Correction : Final Results

THE RESULTS NOW INCLUDE THE MISSING FINANCIAL TABLES. MEIKLES LIMITED AUDITED RESULTS FOR THE PERIOD ENDED 31 MARCH 2011 CHAIRMAN'S STATEMENT OPERATING ENVIRONMENT The economy has continued to stabilise following dollarisation in February 2009 albeit at a slow pace. Annual inflation declined to 2.7% in March 2011 from 3.2% in December 2010. The inflation outlook remains positive although negative changes are to be expected due to volatilities in fuel and electricity prices and movement in exchange rates, particularly the South African rand against the US dollar. The liquidity situation has remained dire due to limited foreign direct investments and multilateral support from the Breton Woods institutions and or the donor community. Borrowings have become the most common form of funding due to lack of liquidity and confidence in capital markets. As a result of the low liquidity and high demand for loans, interest rates remained relatively high during the period January 2010 to 31 March 2011 with negative implications on productivity and performance across all sectors of the economy. GROUP REVIEW During the past year, we committed to the implementation of measures required to move beyond the substantial challenges that we experienced in 2008 and 2009. I am happy to report to shareholders that the unpleasant litigation initiated by the previous Board of Directors against persons and entities related to the major shareholders in the Company and against Mentor Africa Limited ("Mentor") has been settled. We have now entered a new era of cooperation with the parties to the litigation. Mentor currently holds funds on behalf of the Cape Grace Group to the equivalent value of US$ 4.5 million. These funds will comprise equity in Mentor which has a thriving business in South Africa. It is anticipated that this investment will produce significant returns for the Group. The Board anticipates that the Group's investment in Mentor will produce significant opportunities similar to those that the Group achieved from its prior investment in Mvelephanda/Rebhold. The Mvelephanda shares were realised for the Meikles Group at a significant profit. This profit was utilised to discharge obligations of the Cape Grace entities to the South African Revenue Service and Nedbank when the Cape Grace financing structure was unbundled, ensuring the financial survival of the Cape Grace Hotel, which was under risk at the time. In March 2008, a put and call option agreement for the sale of the Cape Grace Hotel was entered into between Meikles Limited (" Company"), Cape Grace Hotel Limited (BVI) and its subsidiaries which own the Cape Grace Hotel on the one hand, and Mentor on the other. In November 2008, a notice to exercise the option for the purchase of the Meikle Group's interests in the Cape Grace Group was received from Mentor. This transaction has not yet been consummated as a consequence of the litigation that was initiated by the previous Board against Mentor, which has now been withdrawn. The Cape Grace Hotel remains an asset for disposal by the Cape Grace Group to Mentor. As a result of the restoration of a positive business relationship between the Company, its major shareholders, and Mentor, it is anticipated that a deal beneficial to the Group will be consummated with whatever adjustments may be necessary. Proceeds from the sale are also to be invested in Mentor. This investment will be the foundation of a strong regional growth objective for the Group. In response to the litigation brought against the major shareholder entities by the Company and BVI in late 2008, the major shareholder entities filed a substantial answering affidavit in which they put up a complete defence. The previous Board and BVI were unable to file replying affidavits because the major shareholder entities' defences were meritorious. As a result, the Company and BVI had no alternative but to withdraw the litigation against the major shareholder entities. As a consequence of the litigation initiated by the previous Board, certain provisions were made in the Group financial statements for the year ended 31 December 2008. The outcome of the litigation has allowed a recoverable sum denominated in South African rand to the equivalent of US$11,7 million to be reinstated in the current financials. Now that the issues with the major shareholder entities have been resolved and no further claims will be made against them, it is known that the principals of the Company's major shareholders will use their influence and business connections productively to procure investment opportunities for the Group that will provide opportunities for growth, as was planned prior to the dispute. Shareholders are once again reminded of the substantial profit arising from the Mvelaphanda shareholding, and the same skills are now once again available to the Group. For the fifteen months period to 31 March 2011, the Group recorded a comprehensive income of US$ 8.0 million (2009: loss of $2.7 million). This outturn includes the loss on the disposal of Kingdom and Cotton Printers to the tune of US$3.8 million. The discontinued operations achieved a profit after tax of US$2.5 million (12 month period ended 31 December 2009, a loss of US$908 000). On comparative twelve month periods, the operating companies achieved a good growth in turnover and gross margin. The Group continues to review systems, structures and processes to optimum levels. Together with the right sizing of the operating companies, these efforts will bear fruit in the coming year. The commentary below is based on the results for the comparable twelve month periods ended 31 March 2011 and 31 March 2010. TM SUPERMARKETS ("TM") The Company achieved an EBITDA of US$3.9 million (2010: loss of US$5.9 million). Turnover was up 42% on the comparative period and gross margin improved by 23%. Some non performing branches were closed while new branches were opened in more sustainable areas. The much awaited Pick `n Pay deal is still to be approved by the regulatory authorities. This has seriously hindered our ability to re-capitalise TM. However, we are progressing with alternative funding which will enable us to revamp stores and will ensure adequate levels of working capital. Potential new sites have been identified for three key stores and details of these will be disclosed at the opportune time. The Kamfinsa branch is currently undergoing major refurbishment. Pick `n Pay Clothing will be introduced to TM in the coming months which will enhance the range and value offered. Point of sale tills have been installed in all branches and this is now providing us with the tools to effectively manage branch performance and profitability. This subsidiary will be a major contributor to the Group going forward and both shareholders in TM are committed to ensuring that the company has a strong capital base. HOTELS The Hotels recorded an EBITDA of US$3.2 million (2010: US$2.3 million). Of this amount, US$1.5 million (2010: loss of US$400 000) was from Zimbabwe operations, while EBITDA of US$1.7 million (2010: US$2.7 million) was from the Cape Grace Hotel. Occupancy levels in 2011 were 43%, 45% and 66% (2010: 30%, 29%, 57%) for Meikles Hotel, the Victoria Falls Hotel and Cape Grace Hotel, respectively. Occupancies to date have shown further growth reflecting the strong interest in Zimbabwe as both a tourist and business destination. Funding is in place for the first phase of the refurbishment of Meikles Hotel and this will begin in the next two months. Further funding is being sought for the complete refurbishment of the hotel. Scope of work for a refurbishment of the Victoria Falls Hotel has been completed and we are engaged with our partner to finalise this project and to seek medium term to long term funding for its completion. We are actively exploring new opportunities both in Zimbabwe and in the region. The regional opportunities are being explored in conjunction with Mentor. TANGANDA TEA COMPANY LIMITED ("TANGANDA") Tanganda achieved an EBITDA of US$502 000 (2010: US$1.6 million). Bulk tea production was 8 602 tonnes (2010:8 498 tonnes), due to reduced winter rains and late summer rains. The production of bulk tea remains a challenge given high power and labour costs. To counter an inability to irrigate sufficiently due to constant power outages, we have participated in a pre-paid power arrangement with the Zimbabwe Electricity Supply Authorities and the result has been extremely positive. Our mineral water plant financed by PTA Bank will be commissioned in due course and production levels are expected to increase. We continue to drive sales of beverage teas and water to the local and regional markets and the benefit of these efforts will be felt in the coming year. We are increasing our hectarage of macadamias and are embarking on a substantial development of avocados, and this will also be included in our outgrowers' programmes. Increased planting has started and the benefits of this will be felt in the medium to long term. Tanganda continues to receive approaches from interested parties, who wish to engage with us in the creation of further growth opportunities. This will result in a more substantial agro industrial company. It is envisaged that the Group will introduce additional investors in Tanganda which will facilitate substantial growth in this important entity. THOMAS MEIKLE STORES The department stores achieved an EBITDA loss of US$15 000 (2010: loss of US$3.6 million).Turnover grew from US$6 million to US$17 million in 2011. Funding challenges are still prevalent but progress is being made in securing medium term lower cost finance. Non performing stores will be closed, resulting in reduced overheads and reduced finance levels required for stock holdings. We are pursuing franchise relationships with major retailers in the region to enhance our offerings. INDIGENISATION The Group has constructively engaged with the Ministry of Youth Development, Indigenisation and Empowerment on the Group's indigenisation status. A proposed Employee Share Ownership Trust has been submitted to the Ministry and we are waiting for a favourable response. Shareholders will be asked to approve this proposal at the forthcoming Annual General Meeting. The Group will as a result possess the required indigenisation status. This status has always been the Group's objective. This was the original concept following the merger with Kingdom Financial Holdings Limited. RE-CAPITALISATION The Board is cognisant of the fact that current levels of borrowing are greater than they should be in the medium term. The Group has engaged with numerous interested parties who have indicated a strong interest in participating in medium to long term debt, at lesser cost, than current borrowings. The resolution of the shareholder issues and approval of our indigenisation plan by the Ministry of Youth Development, Indigenisation and Empowerment will enable us to engage actively with these parties and new more sustainable financing will be obtained during the coming year. The Group is also to engage with potential investors at subsidiary level for the sale of equity to inject fresh capital into the business and to fund expansion. We shall maintain a controlling interest in all subsidiaries. Interest has been expressed by potential investors, now that the damage caused during 2008 and 2009 has been put behind us. We are actively engaging the Reserve Bank of Zimbabwe for the recovery of our deposit totalling US$37 million. LIQUIDATION OF COTTON PRINTERS (PRIVATE) LIMITED ("CP") The final order for the liquidation of CP was issued on 10 May 2010. With it came the liquidation process which, for all intents and purposes, was concluded on 17 May 2011. All approved creditors were paid 100% of their dues from the proceeds of the asset disposals. At the conclusion of the liquidation, plant and equipment remained unsold. These assets are still available for sale to prospective investors. DE-MERGER OF KINGDOM FINANCIAL HOLDINGS LIMITED ("KFHL") The shareholders approved the terms of the de-merger of KFHL from Meikles Limited ("Group") on 13 October 2010. The terms included conditions precedent such as High Court approval of the reduction of KFHL's share capital by US$22.5 million and also approval of the de-merger by the Minister of Youth Development, Indigenisation and Empowerment. The High Court approval for the capital reduction was secured on 14 December 2010 while the approval by the Minister of Youth Development Indigenisation and Empowerment was obtained on 11 February 2011. The de-merger through the distribution of KFHL's shares to the Company's shareholders was finalised on 18 February 2011. CHANGE IN FINANCIAL YEAR END As previously announced, Meikles Limited changed its financial year end from 31 December to 31 March. Accordingly, the Group has published fifteen months results for the period to 31 March 2011. THE WAY FORWARD Recent years have presented our Group with some of the strongest challenges in our history. We are taking the actions required to put Meikles in a good position to operate as a strong, expanding company and an important source of strength in the Zimbabwean economy. Challenges remain, but we have a strong conviction that we have the right strategies in place to ensure that Meikles will now be able to deliver superior value to all of our stakeholders on a sustained basis. We have been assured that our brand has a very strong appeal in both Zimbabwe and the region and potential opportunities are now coming our way. We are proud of the role that our Group has played in our society, and we are determined to take the actions required to ensure that Meikles is a consistent source of strength for all our stakeholders and for Zimbabwe. The past three years have been destructive in the initial periods and then defensive in the more recent period. We are now in a position to move forward with real intent. APPRECIATION The past year was certainly eventful and challenging particularly the issues to do with the widely reported shareholder dispute. The resolution of these matters could not have been achieved without the support and guidance of the regulatory authorities, shareholders and fellow board members. Management and staff have worked under extremely difficult conditions and their efforts to support the Group through a difficult period are much appreciated. Our appreciation is extended to Messrs Meiring and Mills who have resigned from the Board and left the Group. We wish them well in their future endeavours. Finally, I wish to express our special appreciation to Farai Rwodzi. Farai became a director and Chairman of the Company at a time when the shareholder dispute was very much present with a daily impact on the Group's affairs. Farai played a substantial role in moving the Group from its then restraints to the present. Farai fought very hard for us all and his efforts in this regard will always be remembered with gratitude. He is now to focus on his own interests and we wish him every success in this regard. J R T MOXON CHAIRMAN 16 June 2011 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 31 MARCH 2011 Restated 15 months to 12 months to 31 March 2011 31 December 2009 US$ US$ CONTINUING OPERATIONS Revenue 330,437,331 148,838,120 Cost of sales (257,658,238) (119,005,212) Gross profit 72,779,093 29,832,908 Other trading income 4,177,687 2,571,464 Employee costs (38,544,663) (16,723,178) Occupancy costs (15,941,464) (9,191,833) Other operating costs (28,518,141) (16,929,922) Operating loss (6,047,488) (10,440,561) Investment revenue 3,592,710 695,685 Finance costs (7,590,331) (425,048) Net exchange (losses)/gains (228,825) 145,428 Fair value adjustments 1,394,398 2,081,234 Reinstatement of funds earmarked for future 11,737,013 investment Profit/(loss) before tax 2,857,477 (7,943,262) Income tax credit 793,382 5,288,669 Profit/(loss) for the period from continuing 3,650,859 (2,654,593) operations Profit/(loss) for the period from discontinued 2,474,066 (908,040) operations PROFIT/(LOSS) FOR THE PERIOD 8,013,636 (2,731,349) Profit/(loss) attributable to: Owners of the parent 6,687,285 (2,856,610) Non-controlling interests (562,360) (706,023) Total comprehensive profit/(loss) attributable to: Owners of the parent 8,575,996 (2,025,326) Non-controlling interests (562,360) (706,023) Earnings/(loss) per share (cents) Basic earnings/(loss) from continuing and 2.73 (1.16) discontinued operations (cents per share) Basic earnings/(loss) from continuing operations 1.72 (0.79) (cents per share) The 2009 figures have been restated for reasons detailed in note 7. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2011 Unaudited Restated Restated 31 March 2011 31 December 1 January 2009 2009 US$ US$ US$ ASSETS Non-current assets Property, plant and equipment 84,278,008 80,530,695 94,371,296 Investment property 44,036 72,046 394,000 Biological assets 7,661,157 6,310,560 4,999,548 Investments in associates - - 1,025,929 Other financial assets and investments 16,600,101 4,554,984 4,449,894 Intangible assets - trademarks 124,141 291,363 268,573 Balances with Reserve Bank of Zimbabwe 36,824,671 12,541,825 35,003,091 Deferred tax 2,355,680 - - Total non-current assets 147,887,794 104,301,473 140,512,331 Current assets Inventories 40,712,631 17,115,270 5,063,570 Trade and other receivables 16,152,929 7,333,889 10,128,432 Other financial assets - 24,198 787,605 Cash and bank balances 3,285,599 2,536,106 16,488,848 60,151,159 27,009,463 32,468,455 Assets held for sale or distribution 41,440,281 145,483,959 31,574,908 Total current assets 101,591,440 172,448,422 64,403,363 Total assets 249,479,234 274,749,895 204,555,694 EQUITY AND LIABILITIES Capital and reserves Share capital 2,453,747 1 1 Non-distributable reserves 2,626,681 109,983,720 150,941,736 Retained earnings/(accumulated losses) 111,204,769 (21,325,383) (19,221,260) Capital and reserves relating to assets 18,083,232 51,658,125 10,621,312 classified as held for sale or distribution Equity attributable to equity holders 134,368,429 140,316,463 142,341,789 of the parent Non-controlling interests 763,422 1,325,782 2,031,805 Total equity 135,131,851 141,642,245 144,373,594 Non-current liabilities Borrowings 3,749,569 845,173 212,184 Deferred tax 15,996,723 15,346,508 24,318,471 Total non-current liabilities 19,746,292 16,191,681 24,530,655 Current liabilities Trade and other payables 30,003,922 22,888,135 5,244,016 Customer deposits - - 17,029,804 Current tax liabilities 487,727 414,152 117,890 Short term borrowings 49,031,109 6,985,213 769,330 79,522,758 30,287,500 23,161,040 Liabilities relating to assets 15,078,333 88,628,469 12,490,405 classified as held for sale or distribution Total current liabilities 94,601,091 118,915,969 35,651,445 Total liabilities 114,347,383 135,107,650 60,182,100 Total equity and liabilities 249,479,234 276,749,895 204,555,694 The 2009 figures have been restated for reasons detailed in note 7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 MARCH 2011 Share Non-distributable (Accumulated Disposal losses)/ group capital reserves retained capital and earnings reserves US$ US$ US$ US$ 2011 Balance at the beginning 1 109,983,720 (21,325,383) 51,658,125 of the period - restated Profit for the period - - 4,213,219 2,474,066 Transfer within reserves - (109,850,773) 146,859,490 (37,008,717) and on disposal of subsidiaries Other comprehensive income - 855,472 - 1,033,239 for the period Share capital 2,453,746 (2,453,746) - - redenomination Transfer in respect of - 4,092,008 (4,018,527) (73,481) assets classified as held for sale Dividend in specie - - (14,524,030) - Balance at the end of the 2,453,747 2,626,681 111,204,769 18,083,232 period 2009 Balance at the beginning 1 148,118,994 (19,221,260) 10,621,312 of the year as previously stated - unaudited Adjustment to nursery - (502,196) - - stocks Write down of other - (152,007) - - receivable Restatement of certain - 3,476,945 - - plant and equipment As restated 1 150,941,736 (19,221,260) 10,621,312 Loss for the period - - - (1,948,570) (908,040) restated Other comprehensive income - 773,591 - 57,693 for the period Transfer in respect of - (41,731,607) (155,553) 41,887,160 assets classified as held for sale or distribution Balance at the end of the 1 109,983,720 (21,325,383) 51,658,125 period Attributable Non to owners of controlling Total parent US$ US$ US$ 2011 Balance at the beginning of the 140,316,463 1,325,782 141,642,245 period - restated Profit for the period 6,687,285 (562,360) 6,124,925 Transfer within reserves and on - - - disposal of subsidiaries Other comprehensive income for 1,888,711 - 1,888,711 the period Share capital redenomination - - - Transfer in respect of assets - - - classified as held for sale Dividend in specie (14,524,030) - (14,524,030) Balance at the end of the period 134,368,429 763,422 135,131,851 2009 Balance at the beginning of the 139,519,047 2,031,805 141,550,852 year as previously stated - unaudited Adjustment to nursery stocks (502,196) - (502,196) Write down of other receivable (152,007) - (152,007) Restatement of certain plant and 3,476,945 - 3,476,945 equipment As restated 142,341,789 2,031,805 144,373,394 Loss for the period - restated (2,856,610) (706,023) (3,562,633) Other comprehensive income for 831,284 - 831,284 the period Transfer in respect of assets - - - classified as held for sale or distribution Balance at the end of the period 140,316,463 1,325,782 141,642,245 The 2009 figures have been restated for reasons detailed in note 7. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2011 Restated 31 March 2011 31 December 2009 Continuing and discontinued operations US$ US$ Cash flows from operating activities Profit/(loss) before tax from continuing and 6,637,964 (9,511,707) discontinued operations Adjustments for - Depreciation expense and impairment 5,388,114 4,457,620 - Net interest 4,921,007 (1,032,285) - Dividend received (1,470,742) - - Net exchange gains 422,743 (100,972) - Loss on disposal of subsidiaries 3,842,146 - - Fair value adjustment 1,977,980 (3,146,077) - Share of profits of associates (666,038) (1,355,561) - Loss on disposal of property, plant and 787,289 61,612 equipment - Reinstatement of funds embarked for future (11,737,013) - investments Operating cash flow before working capital 10,103,450 (10,627,370) changes Increase in inventories (23,641,946) (12,353,587) Increase in trade and other receivables (71,806,512) (43,259,155) Increase in trade and other payables and 56,277,836 72,455,998 financial liabilities Cash (used in) / generated from operations (29,067,172) 6,215,886 Income taxes paid (2,019,495) (168,610) Net cash (used in)/generated from operating (31,086,667) 6,047,276 activities Cash flows from investing activities Payment for property, plant and equipment (11,439,443) (5,386,464) Proceeds from disposal of property, plant and 1,788,716 118,247 equipment Net movement in service assets (65,325) (51,632) Dividends received 1,470,742 454,768 (Payment for)/proceeds from sale of (151,620) 378,067 investments Expenditure on biological assets (205,636) (229,973) Net outflow on disposal of subsidiary (16,433,887) - Development expenditure - (22,783) Investment income 249,853 31,496 Net cash used in investing activities (24,786,600) (4,708,274) Cash flows from financing activities Proceeds from interest bearing borrowings 44,017,194 7,767,865 Finance costs (7,600,557) (771,776) Net cash generated from financing activities 36,416,637 6,996,089 Net (decrease)/increase in cash and bank (19,456,630) 8,335,091 balances Cash and bank balances at the beginning of 25,508,890 16,556,006 the period Net effect of exchange rate changes on cash (436,011) 71,992 and bank balances Translation of foreign entity (831,723) 545,801 Cash and bank balances at the end of the 4,784,526 25,508,890 period The 2009 figures have been restated for reasons detailed in note 7. NOTES TO THE FINANCIAL STATEMENTS 1. General information Meikles Limited, formerly Kingdom Meikles Limited (the Company), is a limited company incorporated in Zimbabwe and is listed on the Zimbabwe and London Stock Exchanges. The principal activities of the Company and its subsidiaries (the Group) are hotel, retail and agriculture operations. The financial statements are presented in United States of America dollars (US$) being the currency of the primary economic environment in which the Group operates. The Group changed its year-end from 31 December to 31 March. As a result, these financial statements are for a 15 month period while the comparatives are for a 12 month period. 2. Basis of preparation The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements are prepared from statutory records that are maintained under the historical cost convention as modified by the revaluation of property, plant, equipment, biological assets and financial instruments which are measured at fair value in the opening statement of financial position. The Group changed its functional currency from Zimbabwe dollars on 1 January 2009 to United States of America dollars (US$). The Group is resuming presentation of IFRS financial statements after the Group issued financial statements in the prior reporting period ended 31 December 2009 which could not include an explicit and unreserved statement of compliance with IFRS due to the effects of severe hyperinflation. The Group has early adopted the amendments to IFRS 1 and is therefore applying that standard in returning to compliance with IFRS. 2.1 Exemption for fair value as deemed cost The Group elected to measure certain items of property, plant and equipment, biological assets, bank balances and cash, inventories, other financial assets, other financial liabilities and trade and other payables at fair value and to use the fair values as the deemed cost of those assets and liabilities in the opening statement of financial position. 2.2 Comparative financial information The financial statements comprise three statements of financial position, and two statements of comprehensive income, two statements of changes in equity and two statements of cash flows as a result of the retrospective application of the amendments to IFRS 1. The comparative statements of comprehensive income, changes in equity and cash flows are for twelve months. 2.3 Reconciliation to previous basis of preparation The Group's financial statements for the prior period ended 31 December 2009 claimed compliance with IFRS, except certain of the requirements of IAS 1 Presentation of Financial Statements, IAS 21 The Effects of Changes in Foreign Exchange Rates, and IAS 29 Financial Reporting in Hyperinflationary Economies. Certain prior year errors were identified during the period and a reconciliation of the amounts previously stated and the restated amounts is presented in note 7. 3. Accounting policies The principal accounting policies of the Group have been applied consistently in all material respects with those of the previous year. 4. Share capital At the Annual General Meeting held on 23 July 2010, the shareholders authorised a redenomination of the authorised share capital of the Company from 10 Zimbabwe cents per share (that is Z$ prior to any restatement to address inflation) to US1 cent per share. Shareholders further authorised that a transfer be made from non distributable reserves to share capital of an amount sufficient to fund the redenomination. In 2009, share capital was presented as US$1 pending the aforesaid redenomination. NOTES TO THE FINANCIAL STATEMENTS 5. Discontinued operations Demerger of Kingdom Financial Holdings Limited (KFHL) from the Group Following the 13 October 2010 EGM of the Company and subsequent court and regulatory approvals, KFHL was demerged from the Group effective 31 October 2010. Voluntary liquidation of Cotton Printers (Private) Limited Cotton Printers was liquidated during 2010. The company had encountered significant viability problems pre and post dollarisation resulting in it applying for voluntary liquidation in October 2009. The order for final liquidation was granted on 10 May 2010. Cotton Printers did not trade during the period. Cape Grace Hotel operations in South Africa In March 2008, a binding put and call option agreement for the sale of the Cape Grace Hotel to Mentor was entered into between Meikles, Cape Grace Hotel Limited (BVI) and its subsidiaries which own the Cape Grace Hotel on the one hand, and Mentor on the other. In November 2008, a notice to exercise the option for the purchase of Meikles Group's interests in the Cape Grace Group was sent from Mentor to Meikles, and receipt thereof was acknowledged by Meikles. This resulted in a legally binding agreement for the purchase by Mentor of the Cape Grace Hotel. The consummation and implementation of this transaction was delayed as a consequence of the litigation initiated by Meikles against Mentor, which litigation has now been settled and withdrawn. Mentor stands ready to comply with its obligation to purchase the Cape Grace Hotel as a result of the binding agreement referred to aforesaid, and is ready to consummate such transaction and deliver the proceeds of the sale against the delivery of the Cape Grace Hotel in compliance with the agreement. 1. Profit / (loss) for the year from discontinued operations: 31 March 2011 31 December 2009 US$ US$ Revenue 21,137,436 13,856,206 Net interest 6,158,823 6,287,976 Fees and commissions 18,271,363 5,281,660 Other gains 4,711,984 6,225,105 Total income 50,639,606 31,650,947 Expenses* (43,016,973) (33,219,392) Profit/(loss) before tax 7,622,633 (1,568,445) Income tax (1,306,421) 660,405 Profit/(loss) for the year from 6,316,212 (908,040) discontinued operations Loss on disposal of subsidiaries (3,842,146) - Profit/(loss) for the year from 2,474,066 (908,040) discontinued operations (attributable to owners of the parent) Other comprehensive income Exchange differences on translating 1,033,239 1,696,818 foreign entities Losses on property revaluations - (1,641,125) Movement in other reserves - 2,000 Other comprehensive income for the 1,033,239 57,693 period, net of tax Total comprehensive profit/(loss) for 3,507,305 (850,347) the period *The expenses exclude depreciation expense of US$3,220,794 (2009: US$2,091,470) which has been written back in line with the requirements of IFRS5. The loss on disposal of subsidiaries comprises: Loss on disposal of Kingdom Financial 1,075,926 - Holdings Limited Cotton Printers (Private) Limited 2,766,220 - 3,842,146 - Cash flows from discontinued operations Net cash flows from operating (1,072,229) 6,301,615 activities Net cash flows from investing 304,735 619,241 activities Net cash flows from financing (613,708) 132,296 activities Net cash (outflows) / inflows (1,381,202) 7,053,152 2. Assets held for sale or distribution Unaudited 31 March 2011 31 December 2009 1 January 2009 Comprising US$ US$ US$ Assets held for sale: Cape Grace Hotel group of 39,977,389 36,847,922 28,037,302 companies Cotton Printers (Private) - 4,497,374 2,587,606 Limited Motor vehicles* 1,462,892 - - Assets held for distribution to members Kingdom Financial Holdings - 104,093,663 950,000 Limited Total assets held for sale or 41,440,281 145,438,959 31,574,908 distribution Liabilities relating to assets held for sale: Cape Grace Hotel group of 15,078,333 16,363,112 12,490,405 companies Cotton Printers (Private) - 1,641,364 - Limited Liabilities relating to assets held for distribution to members Kingdom Financial Holdings - 70,623,993 - Limited Total liabilities held for sale 15,078,333 88,628,469 12,490,405 or distribution Net assets held for sale or 26,361,948 56,810,490 19,084,503 distribution Equity relating to assets held for sale: Cape Grace Hotel group of 18,083,232 14,231,541 10,621,312 companies Cotton Printers (Private) - 2,766,220 - Limited Equity relating to assets held for distribution to members Kingdom Financial Holdings - 34,660,364 - Limited Total equity relating to assets 18,083,232 51,658,125 10,621,312 classified as held for sale or distribution *The Group intends to dispose of certain motor vehicles to staff and anticipates that the disposal will be completed by 31 July 2011. 6. Segment information 31 March 2011 31 December 2011 US$ US$ Revenue Continuing operationgs: Supermarkets 274,277,230 123,549,306 Agriculture 22,498,476 12,925,401 Hotels 15,893,206 8,277,370 Stores 19,609,707 4,086,043 Intra-group sales (1,841,288) - 330,437,331 148,838,120 Disposal group: Banking 24,790,186 11,569,636 Hotels 21,137,436 13,684,532 Textiles - 171,674 45,927,622 25,425,842 (Loss)/profit before tax Continuing operations: Supermarkets (748,684) (2,936,322) Stores (5,628,555) (3,666,507) Hotels 229,877 (635,962) Agriculture 524,037 2,766,537 Corporate* 2,857,477 (7,943,262) Disposal group: Banking 4,306,773 (1,984,012) Hotels 3,315,860 2,150,501 Textiles - (1,734,934) 7,622,633 (1,568,445) *Included in the corporate profit for the period ended 31 March 2011 is an amount of USD11,737,013 relating to reinstatement of funds held for future investment. These funds will comprise equity in Mentor Africa Limited which has a thriving business in South Africa. It is anticipated that this investment will produce significant returns for the Group. 31 March 31 December 1 January 2011 2009 2009 US$ US$ US$ Segment assets Continuing operations: Hotels 28,216,356 29,283,147 29,745,874 Stores 64,333,525 28,920,859 31,129,339 Supermarkets 43,860,203 23,034,173 12,021,568 Agriculture 37,778,493 32,744,400 27,662,549 Banking - - 13,974,688 Corporate 33,850,376 17,328,357 13,974,688 208,038,953 131,310,936 172,980,786 Assets classified as held for sale or distribution: Banking - assets classified as held for - 104,093,663 950,000 sale or distribution to owners Hotels - assets classified as held for 39,977,389 36,847,922 28,037,032 sale (Cape Grace Hotel) Textiles - assets classified as held - 4,497,374 2,587,606 for sale Motor vehicles (see note 5.2) 1,462,892 - - 41,440,281 145,438,959 31,574,908 249,479,234 276,749,895 204,555,694 Liabilities Continuing operations: Hotels 7,080,837 22,304,925 42,310,338 Stores 50,234,041 5,424,688 5,591,826 Supermarkets 40,133,298 17,731,046 2,278,232 Agriculture 17,160,449 10,265,874 6,416,440 Banking - - 21,281,356 Corporate (15,339,575) (9,247,352) (30,186,497) 99,269,050 46,479,181 47,691,695 Classified as held for sale or distribution Banking - liabilities classified as - 70,623,993 - held for distribution to owners Hotels - liabilities classified as held 15,078,333 16,363,112 12,490,405 for sale (Cape Grace Hotel) Textiles - liabilities classified as - 1,641,364 - held for sale 15,078,333 88,628,469 12,490,405 7. Prior year adjustments 7.1 Opening balances of property, plant and equipment During the period errors were identified on the 1 January 2009 carrying amounts of certain property plant, and equipment for the stores and agricultural operations. The assets were omitted from the valuation exercise carried out at 1 January 2009. This has been corrected by the restatement of the 2009 comparatives included in these financial statements. 7.2 Opening balances of biological assets, other receivables and nursery stocks During the period, it was discovered that the carrying amounts of certain biological assets of the agricultural segment were understated while certain receivables and nursery stocks were incorrectly valued at 1 January 2009, resulting in a mistatement of the opening carrying amounts. The error has been corrected in the comparative statements of financial position. The effect of the corrections are presented below: 31 December 1 January 2009 2009 US$ US$ Increase in property, plant and equipment 3,857,888 4,720,756 Increase in biological assets 2,116,946 - Decrease in inventories (502,196) (502,196) Decrease in receivables (152,007) (152,007) Increase in non-distributable reserves 2,822,742 (3,476,945) Increase in deferred tax 1,384,559 1,243,811 Decrease in accumulated losses 1,113,332 - 8. Supplementary information 31 March 2011 31 March 2010 US$ US$ Revenue Continuing operations: Supermarkets 228,947,224 161,249,786 Agriculture 17,564,220 15,521,414 Hotels 13,368,551 9,203,775 Stores 17,400,216 5,885,253 Intra-group sales (1,841,288) - 275,438,923 191,860,228 Disposal group: Hotels 16,580,999 14,365,166 Textiles - 19,192 16,580,999 14,384,358 (Loss)/profit before tax Continuing operations: Stores (4,403,013) (4,846,796) Supermarkets 897,244 (6,447,231) Hotels 494,751 (511,296) Agriculture 222,989 192,771 Corporate* 4,761,748 (1,462,540) 1,973,719 (13,105,092) Disposal group: Hotels (302,766) 590,818 Textiles - (1,224,391) (302,766) (633,573) EBITA Continuing operations: Stores (15,120) (3,574,358) Supermarkets 3,908,768 5,874,513 Hotels 1,596,443 (389,655) Agriculture 502,054 1,554,955 8.1 Supplementary segment information Presented below are the segment results for the comparable 12 months periods ended 31 March. *As explained in note 6 under corporate figures. 8.2 Other information 9. Exchange rates For further information contact Brendan Beaumont or Onias Makamba on +263-4-252068/71.

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