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Masawara Plc (MASA)

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Tuesday 10 June, 2014

Masawara Plc

Annual Accounts - Supplementary Information

RNS Number : 2053J
Masawara Plc
10 June 2014
 



10 June 2014

 

 

Masawara PLC

("Masawara"or "the Company")

 

Annual Accounts - Unaudited Supplementary Information

 

 

Introduction

 

Masawara has, today, released its annual results for the year ended 31 December 2013.  The following unaudited supplementary information is provided to illustrate the effects of the decision to change accounting policy with effect from 1 January 2014 (as detailed in the announcement of Annual Results) to apply the exemption for Investment Entities under IFRS 10 - Consolidated Financial Statements.  This information is unaudited and does not form part of the Annual Results.

 

 

New accounting policy

 

IFRS 10: Consolidated Financial Statements became effective on 1 January 2014 in the European Union, and following the evaluation of the appropriateness of the current accounting policies, the Directors have decided to apply the exemption for Investment Entities prospectively, as we believe that Masawara Plc should be measuring and evaluating the performance of substantially all of its investments on a fair value basis.

 

The Directors are currently aligning the Group's processes and strategies, to enable the Company to meet the requirements for Investment Entity accounting during 2014. The Directors are evaluating the impact of this change in accounting policy on the Group, and have prepared an initial assessment of the impact of IFRS 10, in the form of un-reviewed and unaudited Pro-forma Consolidated Statement of Comprehensive Income, and unaudited Pro-forma Consolidated Statement of Financial Position, to show how the Group's results would have changed, had the new policy been adopted on 1 January 2013.

 

The unaudited Pro-forma financial statements have been prepared on the key assumption that Masawara qualifies for the investment entity exception included in IFRS 10. Consequently, all investments are not consolidated but are carried at fair value with the exception of Masawara Zimbabwe (Private) Limited, a wholly owned subsidiary of Masawara Plc that acts as the Investment Advisor to Masawara Plc. All investments including investment property and non-current assets held for sale are included in the financial assets at fair value through profit or loss on the statement of financial position.

 

The Directors are aware of the recent IFRIC discussions on IFRS 10 and continue to assess the impact of these. The unaudited pro-forma financial statements have not been reviewed nor audited by Ernst & Young LLP.

 

 



 

Unaudited pro-forma consolidated statement of comprehensive income for the year ended 31 December 2013

 



Current 2013

IFRS 10 Adjustments

Adjusted 2013



Audited

Unaudited

Unaudited



 US$

US$

 US$

Continuing operations





Revenue

1

1,821,175

(1,821,175)

-

Share of (loss)/profit of associate - TA Holdings Limited

2

(3,230,316)

3,230,316

-

Share of loss of associate - Telerix Communications (Private) Limited

2

(1,193,715)

1,193,715

-

Share of profit/(loss) of associate - iWayAfrica Zimbabwe (Private) Limited

2

75,042

 

(75,042)

-

Gain on bargain purchase of additional shares in an associate

2

760,706

(760,706)

-

Fair value loss on financial assets at fair value through profit and loss

3

-

(2,658,560)

(2,658,560)

IFRS 10 adjustments

4

-

(12,131,370)

(12,131,370)

Gain on bargain purchase of Minerva Holdings (Private) Limited


240,666

-

240,666

Impairment loss on financial assets


(260,688)

-

(260,688)

Fair value adjustment of investment property

1

(1,968,328)

1,968,328

-

Other property expenses

1

(1,663,062)

1,663,062

-

Administrative expenses


(538,182)

-

(538,182)

Other operating expenses


(4,478,817)

-

(4,478,817)

Loan forgiveness


(191,522)

-

(191,522)

Operating loss


(10,627,041)


(20,018,473)

Finance costs

1

(155,779)

119,542

(36,237)

Finance income

1

1,099,551

(7,648)

1,091,903

Loss before tax from continuing operations


(9,683,269)


(18,962,809)

Income tax credit/(expense)


90,906

-

(7,510)

Loss for the year from continuing operations


(9,592,363)


(18,970,317)






Discontinued operations





Share of loss of discontinued operations

5

(1,180,872)

1,180,872

-

Loss for the year


(10,773,235)


(18,970,317)

 

 

 



 

Unaudited pro-forma consolidated statement of financial position as at 31 December 2013

 



Current 2013

IFRS 10 Adjustments

Adjusted 2013



Audited

Unaudited

Unaudited

ASSETS


US$ 

US$ 

US$ 

Non-current assets





Property, plant and equipment


524,475

-

524,475

Financial assets


11,570,975

-

11,570,975

Financial assets at fair value through profit/loss

6

-

57,123,818

57,123,818

Investment property

1

30,947,400

(30,947,400)

-

Investment in associates

2

19,879,535

(19,879,535)

-

Total non-current assets


62,922,385


69,219,268

Current assets





Other receivables

1

891,680

(225,543)

669,137

Cash resources

1

49,997

(13,026)

36,970

Total current assets


941,677


706,107

Non-current assets classified as held for sale

7

34,791,351

(34,791,351)

-

Total assets


98,655,413


69,925,375






EQUITY AND LIABILITIES





Equity attributable to equity holders of  the parent


72,641,997

(8,995,482)

63,646,515

Non-controlling interest

1

378,313

(378,313)

-

Non controlling interest held for sale

7

909,375

(909,375)

-

Total equity


73,929,685


63,646,515






Non-current liabilities





Financial liabilities


7,886,818

(6,004,938)

1,881,880

Deferred tax


1,364,685

-

-

Total non-current liabilities


9,251,503

-

1,881,880






Current liabilities





Financial liabilities


670,218

-

670,218

Income tax liability


8,022

-

8,022

Other payables

1

2,664,491

(1,545,751)

1,118,740

Deferred income


2,600,000

-

2,600,000

Total current liabilities


5,942,731


4,396,980

Non-current liabilities classified as held for sale

7

9,531,494

(9,531,494)

-

Total liabilities


24,725,728


6,278,860

Total equity and liabilities


98,655,413


69,925,375

 

 

Explanatory notes

 

General      The consolidation exception in IFRS 10 requires that if a parent qualifies as an investment entity, it ceases to consolidate its investments in subsidiaries. Accordingly, all investments will be held at fair value with any changes in fair value being recognized in the statement of comprehensive income. Application of IFRS 10 by Masawara represents a change in accounting policy which is accounted for prospectively with any effects of the change in accounting policy being recognised in profit or loss in the period of the change in accounting policy.

 

1.                This represents de-consolidation of investment in Dubury Investments (Private) Limited ("Dubury"), the vehicle that holds the investment in Joina City. Revenue, fair value adjustment, other property expenses, finance costs and finance income in Dubury are reversed and all other Dubury assets and liabilities are also reversed. The fair value of the investment in Joina City is then included in the line item "financial assets at fair value through profit/loss" and then a net loss of $2.4 million is recognised in the statement of comprehensive income in the line item "IFRS 10 adjustments", refer to Note 4.

 

2.                This represents reversal of equity accounting of TA Holdings Limited, Telerix Communications (Private) Limited and iWayAfrica Zimbabwe (Private) Limited.

 

3.                This relates to fair value loss on investment in TA Holdings Limited during the 2013 financial year. This was calculated as the difference between the fair value of investment in TA Holdings Limited at beginning of the year and the fair value of the investment of TA Holdings Limited at year end. Fair value at the beginning of the year and fair value at year end was based on TA Holdings Limited trading share prices on the Zimbabwe Stock Exchange at the beginning of the year and at year end respectively.

 

4.                The $12.1 million loss reflects the net effect of the change in accounting policies for accounting of investment in Joina City (change in accounting policy resulted in a $2.4 million loss), investment in Minerva Risk Advisors (Private) Limited (change in accounting policy resulted in a gain of $401,000), investment in iWayAfrica Zimbabwe (Private) Limited (change in accounting policy resulted in a loss of $204,000), investment in TA Holdings Limited (change in accounting policy resulted in a $15.3 million loss, excluding a $2.7 fair value loss during the year (Note 3) and investment in Masawara Energy (Mauritius) Limited (change in accounting policy resulted in a $5.3 million gain).

 

5.                This relates to reversal of share losses of discontinued operations (Masawara Energy (Mauritius) Limited and Minerva Risk Advisors (Private) Limited) that had previously been accounted for in terms of IFRS 5 Non-current assets held for sale and discontinued operations.

 

6.                All the Group's interests in associates in investee companies that were previously equity accounted and consolidated are measured at fair value.

 

7.                This relates to reversal of Masawara Energy (Mauritius) Limited and Minerva Risk Advisors (Private) Limited non-current assets held for sale, non-controlling interest held for sale and non-current liabilities held for sale that had previously been accounted for in terms of IFRS 5 Non-current assets held for sale and discontinued operations.

 

 

Ends

 

 

Contact

 

Masawara PLC

(Masawara Zimbabwe (Private) Limited, the Company's Investment Advisor in Zimbabwe)

+263 4 751805

Rutendo Maziva/Pride Masamba

 

Cenkos Securities plc (Nominated adviser and broker)

+44 20 7397 8900

Nicholas Wells/Ian Soanes/Max Hartley

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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