Correction : Reviewed Condensed Financials 30 S...

Group leadership
Three independent non-executive directors were appointed to the main board on
31 July 2020 in line with the Companies and Other Business Entities Act and
Zimbabwe Stock Exchange Listings Requirements. Executive management structures
are being reviewed ahead of the stepping down of the Executive Chairman from
the executive role to become non-executive Chairman on 31 March 2021.

MEIKLES LIMITED

REVIEWED CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED

30 SEPTEMBER 2020

CHAIRMAN’S STATEMENT

Operating environment

The trading environment during the period under review remained turbulent and was exacerbated by the effects of the COVID-19 pandemic.

The effects of COVID-19 on the Group’s operations were mitigated by various measures implemented by the Government and the Group. Both Agriculture and Supermarkets segments were designated essential services and continued operating during the lockdown period albeit at reduced daily trading hours. Consequently, sales volumes declined during the period under review compared to the same period of the previous financial year. The hospitality segment’s operations were closed for the entire six months under review.

Group Financial Overview

The Group remains in a sound financial position with cash in hand substantially exceeding borrowings. The Board plans to maintain this cash positive position for the foreseeable future.

Group expansion and renovation projects completed and initiated during the period under review are estimated at ZWL 2 billion. The return on these projects will benefit the Group, partly in the current financial year and partly in the following year.

The Group strategy is based on an enhancement over time of its different segments and on a fair distribution by way of dividend to its shareholders.

Shareholders are being asked to approve a share buyback scheme at the upcoming Annual General Meeting, but implementation will be guided largely by expected receipt of funds on deposit with Government. Shareholders are advised that negotiations leading to the receipt of these funds are progressing with some traction.

Group Financial Performance

The Group fared well against the impediments brought about by the COVID-19 pandemic.

Inflation adjusted Group revenue of ZWL 11.2 billion retreated by 8% compared to the same period of the previous year due to COVID-19 induced decline in sales volumes across the Group’s operations.

In historical cost terms, Group revenue grew by 683% to ZWL 8.4 billion (Previous year: ZWL 1.1 billion) reflecting the effect of inflation driven price increases and exchange rate movement on local and export sales respectively.

Group operating profit from continuing operations for the period in inflation adjusted terms was ZWL 660.4 million (previous year: ZWL 1.1 billion).

Group operating profit for the period in historical cost terms grew by 682% to ZWL 1.7 billion from ZWL 212.3 million in the same period of previous year.

Inflation adjusted Group Profit after tax of ZWL 189 million (Previous period: ZWL 2.1 billion) was impacted adversely by the monetary loss of ZWL 1.1 billion arising from the US$ denominated bank and receivable balances.

Group Profit after tax for the six month period, amounted to ZWL 1.9 billion expressed in terms of historical cost (Previous year: ZWL 160.1 million), an increase of 1087% boosted by exchange gains.

Group net current assets denominated in foreign currency on 30 September 2020 were US$ 18.7 million. The Group’s statement of financial position remains strong despite COVID-19 disruptions during the period under review.

TM Supermarkets trading as TM and PnP

Revenue for the period was ZWL 10.0 billion in inflation adjusted terms (Previous period: ZWL 10.8 billion). Units sold declined by 31% during the period under review due to COVID-19 restrictions and shrinking disposable incomes. The segment lost trading days as seven branches closed for days for disinfection purposes following COVID-19 cases.

Operating profit for the period amounted to ZWL 306.1 million in inflation adjusted terms, compared to ZWL 411.7 million achieved in the previous period.

In historical cost terms the operating profit for the period amounted to ZWL 1.1 billion up from ZWL 114.8 million in the previous period.

Despite constraints brought about by COVID-19, the segment opened a new store in Aspindale, Harare in July 2020. Work is at an advanced stage for another new branch in Harare that should be opened before the end of December 2020. The store in Hwange was closed for major renovations and will reopen before the end of December 2020 under the Pick n Pay brand.

Tanganda

Revenue of ZWL 935 million in inflation adjusted terms was 15% lower than ZWL 1.1 billion achieved during the six months ended 30 September 2019.

Operating profit in inflation adjusted terms was ZWL 402.9 million compared with ZWL 604.5 million in the previous period. In the past season all crops were affected by lack of rain and power.

Operating profit in historical cost terms was ZWL 573.6 million (previous period ZWL 95.4 million).

Bulk tea export sales of 3 282 tonnes were 11% lower than 3 669 tonnes sold in the comparative period last year. Average international bulk tea export price for the period retreated to US$1.35/kg from US$1.47/kg in the six months’ period to 30 September 2019. Bulk tea production for the period declined by 17% primarily due to adverse weather. Packed tea sales volumes grew by 14%.

The volume of Macadamia production declined by 37% from 854 tonnes in prior year season down to 537 tonnes attributed to the drought and failure to irrigate crops due to power losses. The average price of primary grades of US$5.37 was 8% firmer than in the prior period.

The volume of avocado export sales grew by 15% to 1671 tonnes from 1 450 tonnes in the comparative period. However, due to the lockdowns in Europe that resulted in massive closure of restaurants and hotels, the avocado average selling price declined by 37% from US$1.62/kg in the half year ended 30 September 2019 down to US$1.02/kg for six months ended 30 September 2020.

The construction of the 1.8 Mega Watt solar farm at Ratelshoek, Chipinge was completed in September 2020. The plant is now supplying power for irrigation and acting as a standby source of power for the factory, supported by diesel generators when power supply from the National grid is interrupted. During the current power outages 70% diesel savings have been realised when compared with prior year usage. Two more solar power plants are under construction at Tingamira and Jersey estates and are scheduled for completion by January 2021.

Tanganda’s contribution to foreign currency generation was recognised by Zimtrade as the segment was awarded ‘Processed Foods - exporter of the year award 2019’.

Hospitality

The segment’s operations in Victoria Falls were affected for the entire period under review as international tourism and travel was disrupted by the COVID-19 pandemic. The hotel reopened on 1 November 2020. Our current focus is on the refurbishment roll out that is scheduled to commence at the beginning of 2021.

Operating profit in inflation adjusted terms was ZWL 33.3 million compared to the previous period of ZWL 154.2 million.

Properties

Plans to transform and reconfigure the Group’s properties have been finalised and roll out has commenced. Some of the properties will be disposed of and proceeds reinvested in strategic locations.

Group leadership

Three independent non-executive directors were appointed to the main board on 31 July 2020 in line with the Companies and Other Business Entities Act and Zimbabwe Stock Exchange Listings Requirements. Executive management structures are being reviewed ahead of the stepping down of the Executive Chairman from the executive role to become non-executive Chairman on 31 March 2021.

Outlook
The Group is well placed to take advantage of opportunities that may arise as it has substantial resources to support its strategies. To this end, capital projects across the subsidiaries will be completed as planned.

There are strong indications that the forthcoming agricultural season will be more positive than the previous two seasons, which augurs well for Tanganda.

The COVID-19 induced decline in volumes experienced at TM Pick n Pay appears to have eased.

Corporate Social Responsibility

The Group supported the fight against COVID-19 through its subsidiaries and the Meikles Foundation. Supermarket segment donated face masks to customers through the branch network and accelerated the distribution of food hampers as well as blankets to elderly homes and orphanages. In addition, the segment partnered with Zimbabwe Broadcasting Corporation (ZBC) to raise awareness of the COVID-19 pandemic and recommended precautionary measures targeting both urban and rural communities. Tanganda contributed to the construction of provincial and district COVID-19 isolation centres. Meikles Foundation provided food stuffs to vulnerable members of society in Epworth.

Dividend

The Company intends to declare two interim dividends and a final dividend based on profits for the year. The first interim dividend declared is ZWL 42.5 cents per share amounting to ZWL 111.0 million which is the same as the final dividend in the previous year.

Appreciation

I would like to extend my appreciation to our customers, suppliers, shareholders, and regulatory authorities for their continued support. I extend also my appreciation to my fellow Directors, and to management and staff for their dedication and commitment.

JRT Moxon

Executive Chairman

25 November 2020

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
	INFLATION ADJUSTED		HISTORICAL COST*
	Reviewed	Unaudited	Unaudited	Unaudited
	30 Sep 2020	30 Sep 2019	30 Sep 2020	30 Sep 2019
CONTINUING OPERATIONS	ZWL 000	ZWL 000	ZWL 000	ZWL 000
Revenue	11,218,926	12,147,997	8,411,317	1,074,373
Net operating costs	(10,558,505)	(11,056,642)	(6,750,237)	(862,060)

Operating profit	660,421	1,091,355	1,661,080	212,313
Investment income	5,150	532	841	44
Finance costs	(121,556)	(75,599)	(101,374)	(5,670)
Net exchange gains / (losses)	1,428,081	(111,581)	1,050,643	3,231
Fair value adjustments on biological assets	(495,029)	(54,631)	(156,034)	(6,901)
Net monetary (loss) / gain	(684,721)	1,290,819	-	-
Profit before tax	792,346	2,140,895	2,455,156	203,017
Income tax expense	(603,914)	(359,607)	(523,569)	(44,482)
Profit for the period from continuing operations	188,432	1,781,288	1,931,587	158,535

DISCONTINUED OPERATION
Profit / (loss) for the period from discontinued operation	906	328,077	(46,553)	1,548
Profit for the period	189,338	2,109,365	1,885,034	160,083

Other comprehensive income, net of tax
Items that may be reclassified subsequently to profit or loss:
Exchange rate and monetary adjustments on translation of foreign operations	236,206	236,602	993,740	336,380
Other comprehensive income for the period, net of tax	236,206	236,602	993,740	336,380

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	425,544	2,345,967	2,878,774	496,463

Profit for the period attributable to:
Owners of the parent	75,723	1,691,238	1,541,784	134,983
Non-controlling interests	113,615	418,127	343,250	25,100
	189,338	2,109,365	1,885,034	160,083
Total comprehensive income is attributable to:
Owners of the parent	311,929	1,927,840	2,535,524	471,363
Non-controlling interests	113,615	418,127	343,250	25,100
	425,544	2,345,967	2,878,774	496,463
Earnings per share (cents)
Basic earnings per share from continuing and discontinued operations	29.01	647.82	590.58	51.70
Basic earnings per share from continuing operations	28.66	522.15	608.41	51.11

Diluted earnings per share from continuing and discontinued operations	27.21	607.73	554.03	48.51
Diluted earnings per share from continuing operations	26.88	489.84	570.76	47.95

Headline earnings per share from continuing and discontinued operations	28.75	648.01	589.96	51.77
Headline earnings per share from continuing operations	28.28	522.00	607.79	47.70

Diluted headline earnings per share from continuing and discontinued operations	26.98	607.91	553.45	48.57
Diluted headline earnings per share from continuing operations	26.53	489.70	570.18	44.75

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

	INFLATION ADJUSTED		HISTORICAL COST*
	Reviewed	Audited	Unaudited	Unaudited
	30 Sep 2020	31 Mar 2020	30 Sep 2020	31 Mar 2020
	ZWL 000	ZWL 000	ZWL 000	ZWL 000
ASSETS
Non-current assets
Property, plant and equipment	6,758,249	6,643,826	720,299	403,617
Investment property	7,904	7,993	228	231
Right of use assets	1,465,955	1,086,871	398,907	75,885
Investment in Mentor Africa (Pty) Limited	559,727	467,536	559,727	171,813
Biological assets	42,163	61,234	42,163	22,503
Intangible assets	4,272	4,272	124	124
Other financial assets	869,274	719,396	866,592	263,440
Deferred tax	353	189	78,029	20,637
Total non-current assets	9,707,897	8,991,317	2,666,069	958,250

Current assets
Inventories	2,246,657	2,109,719	2,007,275	565,008
Trade and other receivables	2,104,779	1,692,840	2,072,374	606,212
Biological assets – produce on bearer plants	-	509,002	-	187,052
Other financial assets	6,009	9,641	6,009	3,543
Cash and bank balances	665,849	714,225	665,849	262,469
Non-current assets held for sale	13	1,055	6	9
Total current assets	5,023,307	5,036,482	4,751,513	1,624,293

Total assets	14,731,204	14,027,799	7,417,582	2,582,543

EQUITY AND LIABILITIES
Capital and reserves
Share capital	89,401	89,401	2,611	2,611
Share premium	111,561	111,561	3,925	3,925
Other reserves	148,464	(93,508)	1,389,511	395,603
Retained earnings	7,379,329	7,444,436	2,431,504	1,020,252
Equity attributable to equity holders of the parent	7,728,755	7,551,890	3,827,551	1,422,391
Non-controlling interests	2,376,786	2,272,661	512,215	177,063
Total equity	10,105,541	9,824,551	4,339,766	1,599,454

Non-current liabilities
Borrowings	81,269	79,771	81,269	29,314
Lease liabilities	450,318	248,613	450,318	91,527
Deferred tax	1,822,849	1,767,605	275,002	88,022
Total non-current liabilities	2,354,436	2,095,989	806,589	208,863

Current liabilities
Trade and other payables	2,091,814	2,004,900	2,091,814	736,775
Borrowings	153,518	83,779	153,518	30,788
Lease liabilities	25,895	18,580	25,895	6,663
Total current liabilities	2,271,227	2,107,259	2,271,227	774,226

Total liabilities	4,625,663	4,203,248	3,077,816	983,089

Total equity and liabilities	14,731,204	14,027,799	7,417,582	2,582,543

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020


INFLATION ADJUSTED
	Share capital	Share premium	Other reserves	Investment revaluation
	ZWL 000	ZWL 000	ZWL 000	ZWL 000
2020 – Reviewed
Balance at 1 April 2020	89,401	111,561	788,663	(882,171)
Profit for the period	-	-	-	-
Restatement of property	-	-	5,766	-
Other comprehensive income for the period	-	-	236,206	-
Dividend paid – ordinary shareholders	-	-	-	-
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	-	-
Balance at 30 September 2020	89,401	111,561	1,030,635	(882,171)

2019 – Unaudited
Balance at 1 April 2019	89,344	102,416	2,168,566	165,078
Profit for the period	-	-	-	-
Transfer from non-distributable reserves	-	-	(189,851)	-
Other comprehensive income for the period	-	-	236,602	-
Dividend paid – ordinary shareholders	-	-	-	-
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	-	-
Balance at 30 September 2019	89,344	102,416	2,215,317	165,078


INFLATION ADJUSTED
	Retained earnings	Attributable to owners of parent	Non-controlling interests	Total
	ZWL 000	ZWL 000	ZWL 000	ZWL 000
2020 – Reviewed
Balance at 1 April 2020	7,444,436	7,551,890	2,272,661	9,824,551
Profit for the period	75,723	75,723	113,615	189,338
Restatement of property	-	5,766	-	5,766
Other comprehensive income for the period	-	236,206	-	236,206
Dividend paid – ordinary shareholders	(140,830)	(140,830)	(10,453)	(151,283)
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	963	963
Balance at 30 September 2020	7,379,329	7,728,755	2,376,786	10,105,541

2019 – Unaudited
Balance at 1 April 2019	4,463,277	6,988,681	1,313,409	8,302,090
Profit for the period	1,691,238	1,691,238	418,127	2,109,365
Transfer from non-distributable reserves	189,851	-	-	-
Other comprehensive income for the period	-	236,602	-	236,602
Dividend paid – ordinary shareholders	(152,060)	(152,060)	-	(152,060)
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	47,011	47,011
Balance at 30 September 2019	6,192,306	8,764,461	1,778,547	10,543,008

HISTORICAL COST*

	Share capital	Share premium	Other reserves	Investment revaluation
	ZWL 000	ZWL 000	ZWL 000	ZWL 000
2020 – Unaudited
Balance at 1 April 2020	2,611	3,925	654,854	(259,251)
Profit for the period	-	-	-	-
Restatement of property	-	-	168	-
Other comprehensive income for the period	-	-	993,740	-
Dividend paid – ordinary shareholders	-	-	-	-
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	-	-
Balance at 30 September 2020	2,611	3,925	1,648,762	(259,251)

2019 – Unaudited
Balance at 1 April 2019	2,611	3,925	74,529	(9,600)
Profit for the period	-	-	-	-
Transfer from non-distributable reserves	-	-	(25,000)	-
Other comprehensive income for the period	-	-	336,380	-
Dividend paid – ordinary shareholders	-	-	-	-
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	-	-
Balance at 30 September 2019	2,611	3,925	385,909	(9,600)

	Retained earnings	Attributable to owners of parent	Non-controlling interests	Total
	ZWL 000	ZWL 000	ZWL 000	ZWL 000
2020 – Unaudited
Balance at 1 April 2020	1,020,252	1,422,391	177,063	1,599,454
Profit for the period	1,541,784	1,541,784	343,250	1,885,034
Restatement of property	-	168	-	168
Other comprehensive income for the period	-	993,740	-	993,740
Dividend paid – ordinary shareholders	(130,532)	(130,532)	(8,729)	(139,261)
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	631	631
Balance at 30 September 2020	2,431,504	3,827,551	512,215	4,339,766

2019 – Unaudited
Balance at 1 April 2019	131,914	203,379	48,999	252,378
Profit for the period	134,983	134,983	25,100	160,083
Transfer from non-distributable reserves	25,000	-	-	-
Other comprehensive income for the period	-	336,380	-	336,380
Dividend paid – ordinary shareholders	(20,024)	(20,024)	-	(20,024)
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	6,190	6,190
Balance at 30 September 2019	271,873	654,718	80,289	735,007

CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2020
	INFLATION ADJUSTED		HISTORICAL COST*
	Reviewed	Unaudited	Unaudited	Unaudited
	30 Sep 2020	30 Sep 2019	30 Sep 2020	30 Sep 2019
	ZWL 000	ZWL 000	ZWL 000	ZWL 000
CONTINUING AND DISCONTINUED OPERATIONS
Cash flows from operating activities
Profit / (loss) before tax – continuing operations	792,346	2,140,895	2,455,156	203,017
– discontinued operations	906	325,040	(46,553)	1,548
	793,252	2,465,935	2,408,603	204,565
Adjustments for:
- Depreciation and impairment of property, plant and equipment, investment property and right-of-use assets	323,995	141,378	49,161	9,934
- Net interest	120,487	81,575	103,706	5,626
- Net exchange (gains) / losses	(1,376,887)	143,231	(1,012,668)	1,711
- Fair value adjustments on biological assets	495,029	54,631	156,034	6,901
- Profit on disposal of property, plant and equipment – continuing operations	(1,734)	(9,348)	(1,785)	(1,048)
- Profit on disposal of property, plant and equipment – discontinued operations	(706)	-	(575)	-
Operating cash flow before working capital changes	353,436	2,877,402	1,702,476	227,689

(Increase) / decrease in inventories	(136,938)	181,011	(1,442,267)	(131,459)
(Increase) / decrease in trade and other receivables	(205,296)	121,937	(357,694)	(21,949)
(Decrease) / increase in trade and other payables	(170,011)	(224,874)	1,061,915	171,767
Cash (used in) / generated from operations	(158,809)	2,955,476	964,430	246,048
Income taxes paid	(422,593)	(249,160)	(268,047)	(34,624)
Net cash (used in) / generated from operating activities	(581,402)	2,706,316	696,383	211,424

Cash flows from investing activities
Payment for property, plant and equipment	(402,837)	(1,092,143)	(336,954)	(95,100)
Proceeds from disposal of property, plant and equipment	2,530	11,102	2,363	1,220
Net movement in service assets	15	(1,192)	6	(115)
Net movement in other investments	(10,409)	167	(16,526)	37
Net movement in biological assets	33,044	(714)	11,357	820
Investment income	440	1,002	213	44
Net cash used in investing activities	(377,217)	(1,081,778)	(339,541)	(93,094)

Cash flows from financing activities
Net increase / (decrease) in interest bearing borrowings	71,238	(26,222)	174,685	(3,453)
Non-controlling interests arising from Mopani Property Development (Private) Limited	963	47,011	631	6,190
Finance costs	(121,556)	(82,570)	(98,430)	(5,670)
Lease movement	26,112	38,076	26,112	96
Dividend paid – ordinary shareholders	(111,974)	(152,063)	(109,396)	(20,024)
–minorities	(10,453)	-	(8,729)	-
Net cash used in financing activities	(145,670)	(175,768)	(15,127)	(22,861)

Net (decrease) / increase in cash and bank balances	(1,104,289)	1,448,770	341,715	95,469
Cash and bank balances at the beginning of the period	714,225	697,185	262,469	33,,006
Translation of foreign entity	(844,320)	(734,274)	11,245	2,578
Restatement of property, plant and equipment	5,766	-	168	-
Net effect of exchange rate changes on cash and bank balances	1,290,654	(414,983)	50,252	2,680
Effects of inflation adjustments	603,813	18,747	-	-
Cash and bank balances at the end of the period	665,849	1,015,445	665,849	133,733

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of preparation

The condensed consolidated financial statements are prepared from statutory records that are maintained under the historical cost basis except for biological assets and certain financial instruments which are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The historical costs have been adjusted for the effects of applying International Accounting Standard (“IAS”) 29 – ‘Financial Reporting in Hyperinflationary Economies’ . Refer to note 2.3 for further details.

These condensed consolidated financial statements have been prepared in accordance with the International Accounting Standard (“IAS”) 34 Interim Financial Reporting and should be read in conjunction with the Group’s annual report for the full year to 31 March 2020.

These condensed consolidated financial statements have been prepared under the supervision of Thempson Muzvangwandoga CA (Z), the Group Chief Financial Officer, registered public accountant PAAB Number 2724.

2. Accounting policies

Accounting policies and methods of computation applied in the preparation of these condensed consolidated financial statements are consistent, in all material respects, with those used in the preparation of the annual report. New applicable standards and improvements which became effective in the current year have been complied with and have had no material impact on these condensed consolidated financial statements.

2.1 Functional and presentation currency

These condensed consolidated financial statements are presented in Zimbabwe dollars (ZWL), which is the Group’s functional and presentation currency. The ZWL was designated as the sole transactional, functional and reporting currency following the promulgation of Statutory Instrument 33 of 2019 dated 22 February 2019 and Statutory Instrument 142 of 2019 dated 24 June 2019.

2.2 Historical reporting*

Historical cost financial results are provided only as supplementary information. The primary financial statements are the inflation adjusted results. The auditor’s review conclusion relates only to the inflation adjusted financial results.

2.3 Hyperinflation

On 11 October 2019, the Public Accountants and Auditors Board (“PAAB”) issued a pronouncement on the application of IAS 29. The pronouncement requires that entities operating in Zimbabwe with financial periods ending on or after 1 July 2019, prepare and present financial statements in line with the requirements of IAS 29.

The Directors have made appropriate adjustments to reflect the changes in the general purchasing power on the ZWL and for the purposes of fair presentation in accordance with IAS 29, these changes have been made on the historical cost financial information. Various assumptions have been made, with the significant assumption being the use of the consumer price indices (“CPI”), for the various years. Accordingly, the inflation adjusted condensed consolidated financial statements represent the primary financial results of the Group.

The source of the price indices used was the Reserve Bank of Zimbabwe website. Below are the indices and adjustment factors used up to 30 September 2020:

	Indices	Adjustment Factor
CPI as at 30 September 2020	2,205.24	1.00
CPI as at 31 March 2020	810.40	2.72
CPI as at 30 September 2019	290.40	7.59

Average CPI 2020	1,630.69
Average CPI 2019	192.12

3. Going concern

The Directors assess the ability of the Group to continue in operational existence in the foreseeable future at each reporting date. As at 30 September 2020, the Directors have assessed the Group’s ability to continue operating as a going concern and believe that the preparation of these condensed consolidated financial statements on a going concern basis is still appropriate.

The Group’s segments have put in place various measures to mitigate the adverse impact of the COVID-19 pandemic to the businesses. Apart from the hospitality segment, the rest of the Group’s segments are operating as they are classified as part of essential services. Whilst lockdown restrictions have been eased, customer spending is still to fully recover in the Group’s retail sector due to reduced disposable income. Gradual revenue growth is anticipated in the second half of the financial year.

The Victoria Falls Hotel, which closed at the end of March 2020, re-opened on the 1^st of November 2020 following resumption of domestic and limited international flights after the Government of Zimbabwe eased restrictions in September 2020. However, revenue is still subdued as new cases of COVID-19 infections are on the rise in major source markets. The Cape Grace Hotel remains closed as South Africa still has stringent protocols for visitors entering the country from major tourist source markets.

Both the hospitality segment and the rest of the Group have sufficient cash resources to fund operations for a prolonged period of care and maintenance.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

4. Segment information

	INFLATION ADJUSTED					HISTORICAL COST *
	Reviewed		Unaudited			Unaudited	Unaudited
	30 Sep 2020		30 Sep 2019			30 Sep 2020	30 Sep 2019
Revenue – continuing operations	ZWL 000		ZWL 000			ZWL 000	ZWL 000
Supermarkets	10,025,669		10,756,715			7,501,593	940,930
Agriculture	934,539		1,101,423			750,909	104,271
Hotels	290,340		349,143			180,790	33,116
Corporate*	(31,622)		(59,284)			(21,975)	(3,944)
	11,218,926		12,147,997			8,411,317	1,074,373

Operating profit – continuing operations
Supermarkets	306,093		411,730			1,136,240	114,781
Agriculture	402,915		604,500			573,563	95,417
Hotels	33,297		154,212			52	14,985
Corporate*	(81,884)		(79,087)			(48,775)	(12,870)
	660,421		1,091,355			1,661,080	212,313

		INFLATION ADJUSTED			HISTORICAL COST *
		Reviewed		Audited	Unaudited		Unaudited
		30 Sep 2020		31 Mar 2020	30 Sep 2020		31 Mar 2020
Segment assets		ZWL 000		ZWL 000	ZWL 000		ZWL 000

Supermarkets		7,601,072		6,939,396	3,066,900		938,668
Agriculture		3,761,658		3,800,051	1,546,247		635,265
Hotels		1,729,233		1,867,962	1,321,930		547,585
Corporate*		1,639,241		1,420,390	1,482,505		461,025
		14,731,204		14,027,799	7,417,582		2,582,543
Segment liabilities
Supermarkets		3,076,850		2,621,187	2,038,343		593,171
Agriculture		767,745		806,691	424,384		172,704
Hotels		495,881		404,922	490,197		143,733
Corporate*		285,187		370,448	124,892		73,481
		4,625,663		4,203,248	3,077,816		983,089

*Included in the corporate revenue amount is an adjustment of ZWL 73.5 million (2019: ZWL 95.6 million); (Historical cost ZWL 55.5 million (2019: ZWL 7.2 million) against revenue in respect of inter-segment sales. Inter-company balances have been eliminated in the corporate amounts. Corporate also includes other operating segments that are immaterial to warrant separate disclosure.

5. Fair value measurement

5.1 Fair value hierarchy
IFRS 13 Fair Value Measurement specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.

5.2 Valuation of Investment Mentor Africa (Pty) Limited (“Mentor”)
The Group’s investment in Mentor Africa (Pty) Limited is carried at FVTOCI and is not held for trading. The investment is unlisted and there is no active market for similar or identical investments. In the absence of market activity and access to more observable level 1 or 2 inputs, the Group utilises level 3 inputs to determine fair value. Valuations are performed by an independent expert valuer, and in preparing such valuation, assumptions are made relating to future events and financial performance.

The investment is valued at a weighted average of three valuation methods, namely: the enterprise value (“EV”), price-to-book value (“PBV”) and the price-to-earnings value (“PE”). The significant unobservable inputs used in these valuations are the EV, PBV and PE proxy multiples obtained from comparable entities listed on the Johannesburg Stock Exchange. The applicable non-trading discount is applied to the proxy multiples to reflect the non-tradability of the Mentor shares as they are not listed on a stock exchange.

Fair valuations are performed annually at each financial year end, and hence no valuation has been done for these condensed consolidated financial statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Fair value measurement (continued)

5.3 Valuation of Biological assets

Biological assets comprise of gum and wattle plantations, livestock and produce growing on the bearer plants. The present value of expected net cash flows from plantations, discounted at a current market determined pre-tax rate, was used to determine fair value of timber plantations. The fair value for livestock was determined by reference to the market price and these valuations were carried out by a professional valuer not connected to the Group. Produce growing on bearer plants is measured at fair value less costs to sell with changes recognised in profit or loss as the produce grows.

Fair values of tea bushes on plantations, macadamia nuts on plantations, coffee beans on plantations and avocado fruit on plantations is determined using Level 1 inputs on the fair value hierarchy, whilst fair values for timber plantations and livestock is determined using level 3 inputs.

6. Discontinued operations

Greatermans Stores

The group exited the departmental stores segment during the first quarter of the previous financial year. The results of the departmental stores for the current year relate to winding down costs and proceeds from disposal of assets and are disclosed as discontinued operations in the current period.

7. Subsequent events

There were no siginificant events after the reporting date.

8. External Auditor’s Review Conclusion

These condensed consolidated financial statements for the six months ended 30 September 2020 have been reviewed by Deloitte & Touche (Chartered Accountants) Zimbabwe who indicate that nothing has come to their attention that causes them to believe that these inflation adjusted condensed consolidated financial statements are not prepared, in all material respects in accordance with IAS 34 and the requirements of the Zimbabwe Stock Exchange Listings Requirements.

The auditor’s review statement is available for inspection at the Company’s registered office and on the website.

Meikles Limited Website : www.meiklesltd.com

Notice to Shareholders

Dividend declaration

Notice is hereby given that the Board of Directors declared an Interim Dividend Number 83 of ZWL 42.5 per share payable out of the profits for the current financial year. The dividend will be payable on or about 18 December 2020. Disbursements to foreign shareholders is subject to Exchange Control Approval and payment guidelines for foreign payments. The timetable for the dividend payment is as follows: -

Action	Date
Dividend announcement	25 November 2020
Last date to trade cum dividend	8 December 2020
Ex-dividend date	9 December 2020
Last record date	11 December 2020
Payment date	18 December 2020