Final Results

MEIKLES LIMITED

ABRIDGED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2019

CHAIRMAN’S STATEMENT

It gives me pleasure to present the Chairman’s Report for the financial year ended 31 March 2019.

FINANCIAL OVERVIEW

There were significant developments in the operating environment during the year under review. The main highlights impacting the financial statements are as follows:-

• Year on year inflation was 66.8% at the end of March 2019.

• In October 2018, Reserve Bank of Zimbabwe (“RBZ”), through a Monetary Policy announcement separated bank accounts into RTGS FCA and Nostro FCA and maintained the exchange rate between them at 1:1.

• Government promulgated Statutory Instruments (“SI”) 32 & 33 of 2019 that introduced RTGS Dollar (“RTGS$”) as legal tender in Zimbabwe. SI 33 of 2019 prescribes the manner in which certain balances in the financial statements should be treated as a consequence of the recognition of the RTGS$ as a currency in Zimbabwe.

• RBZ issued Exchange Control Directive RU 28 of 2019 on 22 February 2019 introducing an interbank market for trading RTGS$ against other foreign currencies. The opening exchange rate was set at 2.5 RTGS$ to one United States Dollar (“US$”).

The functional currency of the Group changed in the current year to RTGS$ from US$ in the previous years as a consequence of the above. The Group also changed its presentation currency to RTGS$. Financial statements for the year ended 31 March 2019 are presented in RTGS$. Comparative financial information was translated to RTGS$ using an exchange rate of 1:1. The Group opted to comply with the requirements of SI 33 of 2019 and the treatment of foreign currency denominated transactions does not fully comply with International Accounting Standard (“IAS”) 21 – “The Effects of Changes in Foreign Exchange Rates”.

GROUP FINANCIAL PERFORMANCE

Despite the changes in the economic environment during the year under review, the Group performed well.

Revenue grew from RTGS$524.9 million in 2018 to RTGS$791.6 million in the year under review.

Group earnings before interest, taxation, depreciation and amortisation (“EBITDA”) for continuing operations increased to RTGS$101.5 million from RTGS$40.6 million in the financial year to 31 March 2018.

Profit for the year grew to RTGS$66.0 million (2018: RTGS$8.2 million).

Total comprehensive income for the year increased to RTGS$118.3 million, (2018: RTGS$8.2 million), of which RTGS$106.2 million was attributable to owners of the parent and the remaining balance of RTGS$12.1 million for minority shareholders.

Segmental contributions to the Group’s financial performance is set out in note 7 of these abridged audited financial statements. 

REVIEW OF OPERATIONS

Supermarkets - trading as TM Pick n Pay

Revenue increased by 53.2% over the previous year. EBITDA increased to RTGS$69.0 million from RTGS$34.5 million in the previous comparative year. Profit for the year is after a provision for exchange losses on foreign currency denominated liabilities accumulated prior to the introduction of the RTGS$ commonly referred as “legacy debt” of RTGS$23.9 million.  

Increase in revenue and profit was achieved through growth in units sold and inflation induced price increases, however the segment was continuously competitive in its pricing policies.

A new branch was opened in Victoria Falls in March 2019 and upgrades of more branches have commenced.

Agriculture

EBITDA rose to RTGS$31.7 million from RTGS$10.3 million in the previous year.

From November 2018, international bulk tea export prices that had remained firm at an average US$1.68/kg up to October 2018 started to decline by between 10% and 15% due to oversupply by Kenya. The segment’s annual made tea production of 10,171 tonnes was commendable. Made tea production during the year ended 31 March 2018 was 10,601 tonnes.

Export earnings from the new crops being macadamia nuts, avocadoes and coffee grew by 96% from US$2.3 million in the prior year to US$4.5 million in the year ended 31 March 2019. As a percentage of total exports, the new crops contributed 25% up from 13% in the prior year. The contribution of the new crops to the segment’s export earnings is expected to increase to 60% within three years as these crops reach maturity. In September 2018, Tanganda Tea Company Limited received the Confederation of Zimbabwe Industries (CZI) Exporter of The Year Award.   

Pick n Pay South Africa opened shelf space to Tanganda’s packed tea brands during the last quarter of fiscal year 2018. The endorsement by Pick n Pay South Africa will assist our efforts to penetrate the South African tea market. With anticipated growth in packed tea sales to the regional market, the segment invested in a new world-class IMA tagless tea-bagging machine. The machine arrived from Italy in March 2019 and was successfully installed. Export earnings from tea are poised to grow through higher prices from increased exports to the regional market. 

Effects of both the hailstorm of January 2019 and Cyclone Idai of March 2019 have been mitigated by special silviculture on affected macadamia plantations, our investment in microjet irrigation systems and US$ denominated insurance cover. Tea was not affected by the phenomenon. The monetary value of damage caused by Cyclone Idai to standalone structures such as toilets, irrigation equipment covering 30 hectares of macadamia plantations and 5 hectares of macadamia trees was quantified at RTGS$222,343.

The segment contributed labour and machinery to repair some of the damaged infrastructure in Chipinge. In addition, Tanganda also assisted affected communities in both Manicaland and Manica provinces of Zimbabwe and Mozambique respectively with food and water supplies.   

Hospitality

EBITDA for continuing operations increased to RTGS$8.5 million in the current year from RTGS$3.6 million in the previous year.

Meikles Hotel now requires substantial modernisation of guest facilities as well as electro mechanical and plumbing infrastructure to restore it to a 5-star property by international standards. Initial forecasts suggests up to US$30 million needs to be spent on the hotel. The Group does not consider that it is in a position to commit the necessary funds to the hotel and it is best for the future of the hotel to place its development in the hands of skilled international operators. Processes to dispose of the hotel are in progress, hence the financial statements reflect the hotel as an asset held for sale. The Company will be seeking the approval of its shareholders for the proposed disposal at an Extraordinary General Meeting to be convened at a future date.

A refurbishment programme for The Victoria Falls Hotel will commence during the last quarter of fiscal year 2019 after our peak season. Funding for these works has already been secured.

Department stores and properties

The EBITDA loss in the department stores segment reduced to RTGS$2.7 million from RTGS$4.2 million in the previous year.

The influx of cheap imports by several sections of society created a tough trading environment for the department stores segment. The Group will not commit additional resources to resuscitate this segment in its current form but will focus on developing the commercial real estate properties that the retail stores used to occupy.

Security Services

Meikles Guard Services continues to provide security services to both Group companies and to certain third parties. It is anticipated that further third party contracts will be secured.

MEIKLES FOUNDATION

During the year under review, Meikles Foundation continued to work closely with Group entities in raising funds to help disadvantaged members of society. TM Pick n Pay remained the key partner in fundraising efforts through its sponsorship from funds raised at the Charity Golf Day. Rainbow Children’s Home received a substantial donation from the proceeds of the Charity Golf Day. The objective of the Home is to allow disadvantaged children with no relatives or friends in Harare, a welcoming, clean home with healthy sustaining food, to recover from their chemotherapy treatment before their journey home.

Meikles Foundation partnered with three other institutions in a pilot project utilising the existing soccer teams within the prison system in Harare to assist Zimbabwe Prisons with their programme of rehabilitation. The project was granted permission to film the events and the various participating prisons to create a video clip which will be aired locally and internationally shining a light on the Zimbabwe Prison system.

DIVIDEND

In view of the Group’s financial results for the year ended 31 March 2019, the board declared a final dividend of 7.67 RTGS cents per share, bringing the total dividend for the year to 8.87 RTGS cents. The final dividend will amount to RTGS$20.02 million. A full dividend announcement will be published separately in due course. 

STRATEGY AND OUTLOOK

The Group has commenced trading in the new financial year on a more favourable basis relative to the comparable period of the previous financial year, in terms of revenue and profit. Post year end, the exchange rate between RTGS$ and US$ moved significantly impacting favourably on the Group’s exporting segments. Consequently, the Group now has an ability to eliminiate all short term borrowings and creditors in arrears from operating cash flows. In this regard shareholders should also consider sums to be realised from the sale of Meikles Hotel, and the additional planned funding initiaves set out below.

The Group will interact more closely with its majority shareholder. It is believed that such interaction will accelerate progress towards unlocking shareholder value. The Group will benefit from the provision of both local and international investment funds for the use of Group expansion and financial security.

The forward commercial environment will be challenging. The board recognises that additional skills at  board level in the Holding Company and at board level in Group companies will be required to ensure the Group responds to challenges and meets the stringent requirements that will emanate  from the investment funding that will be sourced from the efforts of the majority shareholder.

Shareholders are advised that this essential part of the Group restructuring process is to be progressed with urgency.  It follows that this process will be accompanied by an assessment, followed by required implementation of future requirements for operational skills in the Group.

APPRECIATION

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

JRT Moxon

Executive Chairman

15 July 2019

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2019
		31 March 2019	31 March 2018
	Notes	RTGS$ 000	RTGS$ 000
CONTINUING OPERATIONS
Revenue	7	791,620	524,935
Net operating costs		(703,426)	(497,611)
Operating profit		88,194	27,324
Investment income		44	271
Finance costs		(8,635)	(8,640)
Net exchange losses		(7,529)	(466)
Loss recognised on discounting Treasury Bills		-	(6)
Fair value adjustments on biological assets		9,433	1,336
Profit before tax		81,507	19,819
Income tax expense		(16,670)	(11,533)
Profit for the year from continuing operations		64,837	8,286
DISCONTINUED OPERATIONS
Profit / (loss) for the year from discontinued operations	10	1,121	(92)
PROFIT FOR THE YEAR		65,958	8,194
Other comprehensive income, net of tax
Items that may be reclassified subsequently to profit or loss:
Exchange gain on translation of foreign operation		61,970	-
Fair value loss on financial assets classified at fair value through other comprehensive income		(9,600)	-
Reclassification adjustment arising from disposal of available-for-sale financial assets		-	47
Income tax relating to items that may be reclassified subsequently to profit or loss		-	-
Other comprehensive income for the year, net of tax		52,370	47
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		118,328	8,241
Profit / (loss) for the year attributable to:
Owners of the parent		53,827	(829)
Non-controlling interests		12,131	9,023
		65,958	8,194
Total comprehensive income / (loss) attributable to:
Owners of the parent		106,197	(782)
Non-controlling interests		12,131	9,023
		118,328	8,241
Earnings / (loss) per share in cents
Basic earnings / (loss) per share from continuing and discontinued operations		20.99	(0.32)
Basic earnings / (loss) per share from continuing operations		20.55	(0.29)
Diluted earnings / (loss) per share from continuing and discontinued operations		19.67	(0.30)
Diluted earnings / (loss) per share from continuing operations		19.26	(0.27)
Headline earnings per share from continuing and discontinued operations		21.43	0.08
Headline earnings per share from continuing operations		20.99	0.12
Diluted headline earnings per share from continuing and discontinued operations		20.09	0.05
Diluted headline earnings per share from continuing operations		19.68	0.08

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2019

		31 March 2019	31 March 2018
	Notes	RTGS$ 000	RTGS$ 000
ASSETS
Non-current assets
Property, plant and equipment		172,267	175,267
Investment property		236	239
Investment in Mentor Africa (Pty) Limited		50,778	20,046
Biological assets		2,905	1,299
Intangible assets		124	124
Other financial assets		31,847	11,815
Deferred tax		9,111	121
Total non-current assets		267,268	208,911
Current assets
Inventories		100,163	43,870
Trade and other receivables		40,471	17,341
Biological assets – produce on bearer plants		11,178	2,810
Other financial assets		9	59
Cash and bank balances		33,006	34,175
		184,827	98,255
Assets held for sale	10	30,032	-
Total current assets		214,859	98,255
Total assets	7	482,127	307,166
EQUITY AND LIABILITIES
Capital and reserves
Share capital		2,611	2,562
Share premium		3,925	1,469
Other reserves		64,929	12,559
Retained earnings		131,914	82,854
Equity attributable to equity holders of the parent		203,379	99,444
Non-controlling interests		48,999	36,241
Total  equity		252,378	135,685
Non-current liabilities
Borrowings		12,244	17,309
Deferred tax		25,617	19,189
Total non-current liabilities		37,861	36,498
Current liabilities
Trade and other payables		140,368	79,010
Borrowings		51,520	55,973
Total current liabilities		191,888	134,983
Total liabilities	7	229,749	171,481
Total equity and liabilities		482,127	307,166

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2019
	Share capital	Share premium	Other reserves	Investments revaluation	Retained earnings	Attributable  to owners of parent	Non-controlling interests	Total
	RTGS $ 000	RTGS $ 000	RTGS $ 000	RTGS $ 000	RTGS $ 000	RTGS $ 000	RTGS $ 000	RTGS $ 000
2019
Balance at 1 April 2018 – as previously stated	2,562	1,469	12,559	-	82,854	99,444	36,241	135,685
Change in accounting policy – note 11	-	-	-	-	(1,694)	(1,694)	-	(1,694)
Balance at 1 April 2018 - restated	2,562	1,469	12,559	-	81,160	97,750	36,241	133,991
Profit for the year	-	-	-	-	53,827	53,827	12,131	65,958
Issue of shares – scrip dividend	49	2,456	-	-	-	2,505	-	2,505
Other comprehensive income for the year	-	-	61,970	(9,600)	-	52,370	-	52,370
Dividend paid – ordinary shareholders	-	-	-	-	(3,073)	(3,073)	-	(3,073)
Non-controlling interests arising from Mopani Property Development (Private) Limited	-	-	-	-	-	-	627	627
Balance at 31 March 2019	2,611	3,925	74,529	(9,600)	131,914	203,379	48,999	252,378
2018
Balance at 1 April 2017	2,538	1,316	12,559	(47)	83,683	100,049	28,591	128,640
(Loss) / profit for the year	-	-	-	-	(829)	(829)	9,023	8,194
Issue of shares	24	153	-	-	-	177	-	177
Other comprehensive income for the year	-	-	-	47	-	47	-	47
Dividend paid – minority shareholders	-	-	-	-	-	-	(1,715)	(1,715)
Non-controlling interests arising from Mopani Property Development (Private) Limited	-		-			-	342	342
Balance at 31 March 2018	2,562	1,469	12,559	-	82,854	99,444	36,241	135,685

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2019
		31 March 2019	31 March 2018
		RTGS$ 000	RTGS$ 000
Cash flows from operating activities
Profit before tax – continuing operations		81,507	19,819
– discontinued operations		1,121	(39)
		82,628	19,780
Adjustments for:
- Depreciation and impairment of property, plant and equipment and investment property		14,376	13,311
- Net interest		8,591	8,415
Dividend income		-	(53)
- Net exchange losses		7,031	468
- Profit on disposal of operation		-	(768)
- Fair value adjustments on biological assets		(9,433)	(1,336)
Loss recognised on discounting Treasury Bills		-	6
- Loss on disposal of property, plant and equipment		59	1,545
Operating cash flow before working capital changes		103,252	41,368
Increase in inventories		(56,293)	(9,403)
Increase in trade and other receivables		(11,522)	(3,627)
Increase in trade and other payables		34,088	11,895
Cash generated from operations		69,525	40,233
Income taxes paid		(18,038)	(6,447)
Net cash generated from operating activities		51,487	33,786
Cash flows from investing activities
Payment for property, plant and equipment		(41,870)	(17,717)
Proceeds from disposal of property, plant and equipment		355	350
Proceeds from sale of Treasury Bills and coupon interest		-	3,075
Net movement in service assets		51	(89)
Net movement in other  investments		11	847
Net movement on biological assets		(540)	241
Net cash flow on disposal of subsidiary		-	1,060
Investment income		42	208
Net cash used in investing activities		(41,951)	(12,025)
Cash flows from financing activities
Net (decrease) / increase in interest bearing borrowings		(9,518)	7,064
Non-controlling interests arising from Mopani Property Development (Private) Limited		627	519
Finance costs		(8,635)	(8,640)
Dividend paid – ordinary shareholders		(568)	-
Dividend paid – non-controlling interests		-	(1,715)
Net cash used in financing activities		(18,094)	(2,772)
Net (decrease) / increase in cash and bank balances		(8,558)	18,989
Cash and bank balances at the beginning of the year		34,175	15,637
Net effect of exchange rate changes on cash and bank balances		5,743	(451)
Translation of foreign entity		1,646	-
Cash and bank balances at the end of the year		33,006	34,175

NOTES TO THE ABRIDGED AUDITED FINANCIAL STATEMENTS

1. Basis of preparation

The abridged audited 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. These abridged financial statements are presented in RTGS$, which is the Group’s new functional currency.

2. Change in functional and presentation currency

Both the functional and presentation currency changed to RTGS$ in the year ended 31 March 2019 from US$ in prior years. The change in both functional and presentation currency was necessitated by significant developments in the economic environment in Zimbabwe. In February 2019, Government of Zimbabwe issued Statutory Instrument “SI” 33 of 2019, which directed that certain assets and liabilities that were in US$ before 20 February 2019 be deemed to be denominated in RTGS$ at a rate of 1:1 to US$.  The Group opted to comply with the requirements of SI 33 of 2019 and translated assets and liabilities  from US$ to RTGS$ at an exchange of  1:1 with the exception of balances in Nostro FCAs, foreign creditors and debtors at the date of change. Foreign currency denominated transactions were translated at 1:1 in the Statement of Profit or loss and Other Comprehensive Income from the beginning of the financial year up to 21 February 2019 and at the ruling interbank exchange rate thereafter. SI 33 of 2019, restricted full compliance with IAS 21 and the guidance issued by the Public Accountants and Auditors Board.   

3. Statement of compliance

While full compliance with International Financial Reporting Standards (“IFRS”); International Accounting Standards (“IAS”); and the International Financial Reporting Interpretations Committee (“IFRIC”) interpretations was achieved in previous reporting periods, only partial compliance was achieved for the year ended 31 March 2019 as a result of non-compliance with IAS 21 as set out in note 2. These abridged financial results do not include all the information and disclosures required to comply with IFRS and should be read in conjunction with the Group’s consolidated financial statements as at 31 March 2019 available at the Company’s registered office.

4. Audit opinion

These abridged  financial results should be read in conjunction with the complete set of financial statements for the year ended 31 March 2019, which have been audited by Deloitte & Touche Chartered Accountants (Zimbabwe) in accordance with International Standards on Auditing. The auditors issued an adverse opinion on the financial statements for non-compliance with IAS 21. The audit report includes a section on Key Audit Matters. The Key Audit Matters are on valuation of expected credit losses on financial assets and valuation of investment in Mentor Africa (Pty) Limited. The auditor’s report is available for inspection at the Company’s registered address.

5. Accounting policies

Accounting policies and methods of computation applied in the preparation of these abridged financial statements are consistent, in all material respects, with those used in the prior year, except for the adoption of IFRS 9 at the beginning of the currenct financial year, which resulted in changes in accounting policies to financial assets and liabilities.

6. 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 31 March 2019, the Directors have assessed the Group’s ability to continue operating as a going concern and believe that the preparation of these financial statements on a going concern basis is still appropriate. 

7. Segment information

	31 March 2019	31 March 2018
Revenue – Continuing operations	RTGS$ 000	RTGS$ 000
Supermarkets	747,338	487,822
Agriculture	37,015	28,847
Hotels	9,101	7,651
Departmental stores#	792	2,105
Corporate*	(2,626)	(1,490)
	791,620	524,935
EBITDA – Continuing operations
Supermarkets	69,010	34,514
Agriculture?	31,743	10,289
Hotels	8,531	3,594
Departmental stores#	(2,698)	(4,216)
Corporate*	(5,107)	(3,570)
	101,479	40,611
Segment assets
Supermarkets	204,081	126,701
Agriculture	120,763	85,582
Hotels	54,930	46,966
Departmental stores#	20,285	24,517
Corporate*	82,068	23,400
	482,127	307,166

7. Segment information (continued)

	31 March 2019		31 March 2018
Segment liabilities	RTGS$ 000		RTGS$ 000
Supermarkets	108,112		56,148
Agriculture	33,385		32,779
Hotels	26,761		23,515
Departmental stores#	18,102		29,031
Corporate*	43,389		30,008
	229,749		171,481
*Intercompany transactions and balances have been eliminated from the corporate amounts. Corporate also includes other subsidiaries that are immaterial to warrant separate disclosure. ? Prior year EBITDA is after adding back RTGS$1.25 million loss on disposal of coffee bearer plants, which were uprooted to pave way for macadamia trees. #Prior year numbers for the wholesale segment have been re-presented under Department stores. EBITDA figures are before group management fees.
		31 March 2019		31 March 2018
8. Other information		RTGS$ 000		RTGS$ 000
Capital commitments authorised by the Directors but not contracted for		118,836		23,583
Group’s share of capital commitments of joint operations		12,191		3,000
9. Net borrowings
Non-current borrowings		12,244		17,309
Current borrowings		51,520		55,973
Total borrowings		63,764		73,282
Cash and cash equivalents		(33,006)		(34,175)
Net borrowings		30,758		39,107
Comprising:
Secured		56,622		57,505
Unsecured		7,142		15,777
		63,764		73,282
The weighted average cost of borrowings for the year was 13.18% per annum (2018: 13.39% per annum). 9.1     Summary of borrowing arrangements (ii) RTGS$2.0 million which bears interest at 8.4% per annum with final repayment on 31 March 2021. (iii) RTGS$0.8 million which bears interest at 11% per annum, with final repayment on 30 September 2019. (iv) RTGS$3.0 million which bears interest at 15.5% per annum with final repayment on 31 December 2019. (v) RTGS$2.3 million which bears interest at 11% per annum with final repayment on 31 December 2019. (vi) RTGS$3.2 million which bears interest at 11% per annum with final repayment on 31 July 2021. 9.2   Breach of loan covenants During the course of the current year, the Group was in default on some of its loan covenants with lenders. These defaults arose as a result financial difficulties facing some of the Group’s components. The affected lenders had called on the loans but the Group managed to renegotiate new payment agreements with these lenders by 31 March 2019. Details of the revised loan expiry dates are as disclosed in note 9.1 above.

10.   Discontinued operations

Meikles Hotel

The Directors of the Company resolved to dispose of the entire Meikles Hotel property, plant and equipment. Meikles Hotel is a division within the Group’s hospitality segment, Meikles Hospitality (Private) Limited. As at the reporting date, sale agreements had been concluded in principle subject to approval by shareholders of the Company and regulatory authorities. Processes to procure approvals requisite to the transaction had commenced by 31 March 2019. The expected proceeds of sale exceed the carrying amount of the related net assets and, accordingly, no impairment losses were recognised. The assets to be disposed have been classified as held for sale on the consolidated statement of financial position. The summary of the profit / (loss) position from the discontinued operation and the non-current assets held for sale have been shown below.

10.   Discontinued operations (continued)

Meikles Financial Services

As reported in the prior year, the Company disposed of Tuscarora Investments (Private) Limited (trading as Meikles Financial Services), which carried out the Group’s financial services operations. The proceeds of sale exceeded the carrying amount of the related net assets and, accordingly, no impairment losses were recognised. The disposal of the financial services operations is consistent with the Group’s long-term policy to focus its activities on its main segments, namely retail, agriculture, hospitality, wholesaling and security services. The results of the discontinued operations included in profit for the period are as set out below.

The prior year comparative financial information from discontinued operation have been re-presented to include the operation classified as discontinued in the current period.

	31 March 2019	31 March 2018
	RTGS$ 000	RTGS$ 000
Profit / (loss) for the period from discontinued operation
Revenue	14,585	9,995
Net fees and commission income	-	297
Net operating costs	(14,658)	(11,453)
Other operating income	696	349
Operating profit / (loss)	623	(812)
Investment income	-	11
Interest expense	-	(4)
Exchange gains / (losses)	498	(2)
Profit on disposal of operation	-	768
Profit / (loss) before tax	1,121	(39)
Taxation	-	(53)
Profit / (loss) for the year from discontinued operations	1,121	(92)
Cash flows from discontinued operation
Net cash inflows from operating activities	3,104	4,035
Net cash flows from  investing activities	(306)	71
Net cash outflows from financing activities	(1,317)	(3,913)
Net cash flows from discontinued operation	1,481	193
Analysis of assets to be disposed of		31 March 2019
		RTGS$ 000
Non-current assets
Property, plant and equipment		30,032
Net assets to be disposed of		30,032

11. Change in accounting policy – IFRS 9 adjustments

The Group has adopted IFRS 9 as issued by the IASB in July 2014 with a date of transition of 1 April 2018, which resulted in changes in accounting policies and adjustments to the amounts and disclosures in these abridged consolidated financial statements. The Group did not early adopt any of IFRS 9 components in previous periods.

The adoption of IFRS 9 has resulted in changes in accounting policies for recognition, classification and measurement of financial assets and financial liabilities as well as impairment of financial assets. IFRS 9 also significantly amends other standards dealing with financial instruments such as IFRS 7 Financial Instruments Disclosure.

As permitted by the transitional provisions of IFRS 9, The Group elected not to restate comparative figures. Any adjustment to the carrying amounts of financial assets and liabilities at the date of transition were recognised in the opening retained earnings.

Below is the reconciliation of retained earnings at 1 April 2018 to show the effects of adopting IFRS 9:

		Retained earnings
	RTGS$’000	RTGS$’000
Balance at 1 April 2018 – as previously stated		82,854
Decrease in trade and other receivables	(638)
Decrease in other financial assets	(1,203)
Increase in deferred tax	147
		(1,694)
Balance at 1 April 2018 – restated		81,160