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INDEX TO FINANCIAL STATEMENTS
About this report 2
Group Profile 3
Corporate and Group Management 4
Corporate Profile and Mission 5
Letter to the Ministry of Industry,Commerce, and Enterprise Development 7
Notice to the Shareholder 8
Chairman’s Statement 9 - 10
Report of the Directors 11 - 12
Corporate Governance 13 - 15
Directors’ Responsibility Statement 16
General Manager’s Report 17 - 21
Report of the Independent Auditors 22 - 28
Statements of Financial Position 29 - 30
Income Statements 31
Statements of Other Comprehensive Income 32
Statements of Changes in Equity 33 - 35
Statements of Cash Flows 36 - 37
Significant Accounting Policies 38 - 68
Notes to the Financial Statements 69 - 129
CONTENTS PAGE
IDCZ ANNUAL REPORT
For the year ended 31 December 2017
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IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
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ABOUT THIS REPORT
We are pleased to present our 54th Annual Report.
Itisourprincipalcommunicationtoallstakeholdersonourabilitytocreatesustainablevalueovertime.
Boundary and Scope
This annual report covers the performance of the Industrial Development Corporation of Zimbabwe Limited(IDCZ)anditssubsidiariesandassociatesfortheyearended31December2017.
This report informsyou about our operational andfinancial performance against the previously stated plans,stakeholders,governance,materialissues,risksandopportunitiesandhowtheseinfluenceourstrategicobjectivesandfutureplans.
Reporting Principles and Assurance
Thisreportiscompiledandpresentedconsideringtherequirementsofthegenerallyacceptedcorporatepracticesprescribed by the Codes of Best Practice; Cadbury Report, King IV and Zimbabwe Corporate GovernanceFramework for StateEnterprises andParastatals andNationalCodeonCorporateGovernanceZimbabwe, allrelevantlegislation,regulations,relevantInternationalFinancialReportingStandards(IFRS),therequirementsofthePublicFinanceManagementAct(PFMA)(Chapter22:19),whereappropriate.
TheIDCZreceivesexternalassurancefromitsauditor,KPMGCharteredAccountants,onthefairpresentationoftheAnnualFinancialStatements.ThefindingsareincludedintheIndependentAuditor’sReport.
Wearecommittedtoimprovingonthisreportandwouldappreciateyourconstructivefeedback.Commentscanbesenttopr@idc.co.zw,orsubmittedtotheIDCZOfficesat93ParkLane,Harare,Zimbabwe.
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IDCZ | ANNUAL REPORT 31 DECEMBER 2017
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GROUP PROFILE
Shareholding:100%ownedbytheGovernmentofZimbabwe
Board of Directors
HerbertNkala (Chairman)GloriaZvaravanhu(Mrs) (ViceChairman)JohnMushayavanhu (NonExecutive)RobsonMafori(Prof) (NonExecutive)SelmaMurielFallala(Dr) (NonExecutive)MichaelNyamadzawoNdudzo (GeneralManager)retired31July2017BenjaminNkosentyaKumalo (GeneralManager)joined7September2017
*JealousPaulMuchineripi(Dr)appointedasnon-executivedirectoron12February2018*MichaelShorayiCharambaappointedasnon-executivedirectoron12February2018
RegisteredOffice
93ParkLane,P.O.BoxCY1431,Causeway,Harare
Telephone: 2630242706971-5or250405Email: administrator@idc.co.zw
Auditor KPMGCharteredAccountants(Zimbabwe)MutualGardens100TheChase(West),EmeraldHill,Harare
Bankers
AgriculturalDevelopmentBankofZimbabwet/aAgribankHurudzaHouse14-16NelsonMandelaAvenue,Harare
ZBBankLimitedCornerFirstStreet/SpekeAvenue,Harare
Lawyers
ChiteweLawPractice212ASamNujomaStreet,Avondale,Harare
Chikwengo&TaongaiLawChambers15OrkneyRoad,Eastlea,Harare
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IDCZ | ANNUAL REPORT 31 DECEMBER 2017
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CORPORATE AND GROUP MANAGEMENT
BOARD COMMITTEES
Business Development Committee
ProfRobsonMafoti(Chairman),MrJohnMushayavanhu,BenjaminNkosentyaKumalo.
Finance & Audit Committee
MrsGloriaZvaravanhu(Chairman),DrSelmaMFallala,MrJohnMushayavanhu,BenjaminNkosentyaKumalo.
Nomination Committee
MrHerbertNkala(Chairman),MrJohnMushayavanhu,MrsGloriaZvaravanhu,ProfRobsonMafoti,DrSelmaM.Fallala,BenjaminNkosentyaKumalo.
Remuneration & Human Resources Committee
MrJohnMushayavanhu(Chairman),MrsGloriaZvaravanhu,BenjaminNkosentyaKumalo.
Corporate Management
MichaelNyamadzawoNdudzo GeneralManager(retired31July2017) BenjaminNkosentyaKumalo GeneralManager(appointed7September2017) CollinMutingwende CorporateServicesExecutive TranosNgwebu SeniorManager:DevelopmentFinance&InvestmentAnalysis NgonidzasheMusungwa FinanceManager ChristopherMutiti InternalAuditManager GilbertTapfuma ProjectsManager:AgroProcessing RindiraiShoko(Mrs) ProjectsManager:Chemicals,Knowledge&MarketResearch BrianMushohwe ProjectsManager:MineralsBeneficiation DerekSibanda PublicRelationsandAdministrationManager LeniKoni CorporateSecretaryandCompliancesManager
*BrianMushohwe(Mr)secondedtoMotira(Private)LimitedasActingManagingDirectoron1January2017
Subsidiary Companies
TapuwaAlvinMashingaidze GroupChiefExecutiveOfficer,ChemplexCorporationLimited GodfreyZivanai GeneralManager,GinholeInvestments(Private)Limitedt/alastHopeEstate BenjaminNkosentyaKumalo GroupChiefExecutiveOfficer,MotecHoldings(Private)Limited FungisaiMupazviriho GeneralManager,SunwayCity(Private)Limited BrianMushohwe ActingManagingDirector,Motira(Private)Limited
*BenjaminNKumaloresignedfromMotecHoldings(Private)Limitedon31August2017
Associated and Other Companies MohammedAbbasi ChiefOperatingOfficer,ModzoneEnterprises(Private)Limited WangYong ManagingDirector,Sino-ZimbabweCementCompany(Private)Limited SylvesterMangani GeneralManager,SurfaceWilmarInvestments&OlivineHoldings(Private)Limited CavinNkiwane GeneralManager,ZimbabweGrainBag(Private)Limited RahminHassim GroupManagingDirector,StoneHoldings(Private)Limited
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IDCZ | ANNUAL REPORT 31 DECEMBER 2017
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CORPORATE PROFILE AND MISSION TheIndustrialDevelopmentCorporationofZimbabweLimitedwasincorporatedthroughitsenablingIndustrial
DevelopmentCorporationAct (Chapter14:10) in1963 to invest in industry as a state agency.The IndustrialDevelopmentCorporationofZimbabweLimitedActwasamendedin1984toallowtheCorporationtopromoteinvestmentandeconomicco-operationacrossborders.TheCorporationidentifiesanddevelopsindustrialprojectopportunitiesintocommerciallyviableventuresinpartnershipwithlocal,regionalandinternationalinvestors,andtechnologyandmarketaccesspartners.
Havingbeeninbusinessforthelast54years,theCorporationhastransformedandbuiltaninvestmentportfolio,withthecorebeinginthesectorsofmotorandtransport,fertiliserandchemicals,cement,basemineralprocessing,andagro-processing.Italsohasinvestmentsintextiles,graniteprocessing,packaging,insuranceandrealestate.
The main objectives of the Corporation are:
“WiththeapprovaloftheMinistertoestablishandconductindustrialundertakings;tofacilitate,promote,guideandassistinthefinancingofnewindustriesandindustrialundertakings,expansionschemes,betterorganisationandmodernisationofexistingindustries;toundertakethedevelopmentofmanagementandtechnicalexpertiseinthecarryingoutoftheoperationsinindustryandindustrialundertakings,includingthedevelopmentofexpertiseinprojectanalysis,evaluationofinvestmentopportunitiesandprovisionofconsultancyservices,andtotakesuchmeasuresasmaybenecessaryorexpedient toenable theCorporationtoexercisecontroloverenterprises inwhichithasmadeaninvestment.”
It is a legal requirement for the IDC that:
(a)“TheeconomicrequirementsofZimbabwemaybemetandindustrialdevelopmentwithinZimbabwemaybeplanned,expeditedandconductedonsoundbusinessprinciples”.
(b)“Everyapplicationorproposaldealtwithbyitisconsideredstrictlyonitseconomicmerits,irrespectiveofallotherconsiderationswhatsoever”;andthat
(c)“Sofarasmaybepracticable,theCorporationshallnotberequiredtoprovideanundulylargeproportionofthecapitalwhichisnecessaryforsuchestablishmentordevelopment.”
In broad and aspirational terms, the IDCZ has the following vision: Corporate Vision
TocontributetothetransformationofZimbabwetoavalueaddingandbeneficiatingmiddleincomeeconomy.
Corporate Mission
To identify, develop, mobilize resources and finance industrial project opportunities into commercially viableventures in partnerships with local, regional and international investors, and technology and market accesspartners.
Corporate Values
Transparency Innovation Gendersensitivity Environmentalprotection Professionalismandintegrity Fairplay Empowerment Teamwork
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IDCZ | ANNUAL REPORT 31 DECEMBER 2017
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Group Investment and Shareholding, Structure and Sector Composition GROUP SUBSIDIARY & ASSOCIATED COMPANIES
GO
VE
RN
ME
NT
OF
ZIM
BA
BW
E
MIN
IST
RY
OF
IN
DU
ST
RY
, C
OM
ME
RC
E &
EN
TE
RP
RIS
E D
EV
EL
OP
ME
NT
MIN
IST
RY
OF
FIN
AN
CE
AN
D
EC
ON
OM
IC D
EV
EL
OP
ME
NT
IDC
- H
EA
D O
FF
ICE
93
Park
lan
eH
AR
AR
E
Mo
tor
& T
ran
sp
ort
Mo
tec
Ho
ldin
gs
(Pri
vate
) Li
mit
ed G
roup
10
0%
Will
oval
e M
oto
r In
dus
trie
s (P
riva
te)
Lim
ited
91%
Dev
en E
ngin
eeri
ng(P
riva
te)
Lim
ited
10
0%
Am
tec
(Pri
vate
) Li
mit
ed 2
7.5%
Mo
tira
(P
riva
te)
Lim
ited
Tr
acto
rs 9
9.8
6%
Co
tto
n V
alu
e A
dd
itio
n
Mo
dzo
ne E
nter
pri
ses
(Pvt
) Lt
d G
roup
17.
62%
Afr
ican
Sp
inne
rs (
Pvt
) Lt
d 1
7%
Iraz
im T
exti
les
(Pvt
) Lt
d 1
00
%
Iraz
im B
lank
ets
(Pvt
) Lt
d 1
00
%
Packag
ing Z
imb
abw
e G
rain
Bag
(P
vt)
Ltd
49
%
Gla
ss M
an
ufa
ctu
rin
g
Zim
gla
ss H
old
ing
Ltd
Gro
up
Min
era
l P
roce
ssin
g
Zim
gla
ss In
dus
trie
s (P
vt)
Ltd
10
0%
(U
nder
Liq
uid
atio
n)In
dus
tria
l San
ds
(Pvt
) Lt
d 1
00
%N
atio
nal G
lass
(P
vt)
Ltd
10
0%
(D
orm
ant)
Hea
den
d E
nter
pri
ses
(Pvt
) Lt
d 9
.93%
(D
orm
ant)
Gin
hole
Inve
stm
ents
(P
vt)
Ltd
t/a
Last
Ho
pe
Est
ate
100
%
Sto
ne H
old
ing
(P
vt)
Ltd
Gro
up 4
9%
Co
ntra
ctin
g D
ivis
ion
- M
inac
o
Zim
rock
Inte
rnat
ion
(Pvt
) Lt
d 1
00
%Q
uarr
ying
Ent
erp
rise
s (P
vt)
Ltd
10
0%
Mar
ling
Gra
nite
Mo
zam
biq
ue L
imit
ada
100
%M
inac
o Z
imb
abw
e (P
vt)
Ltd
10
0%
Sin
o-Z
imb
abw
e C
emen
t C
om
pan
y (P
vt)
Ltd
35%
Lup
ane
Dev
elo
pm
ent
Co
mp
any
Re
al
Esta
te D
eve
lop
me
nt
Sun
way
Cit
y (P
vt)
Gro
up L
td 9
9.9
9%
Sun
way
Co
nstr
ucti
on
Co
mp
any
(Pvt
) Lt
d 1
00
%S
unw
ay P
rofe
ssio
nal S
ervi
ce (
Pvt
) Lt
d 1
00
%S
unw
ay R
eal E
stat
e (P
vt)
Ltd
10
0%
Fe
rtil
ize
r &
Ch
em
icals
Ch
em
ple
x C
orp
ora
tio
n L
imit
ed
Gro
up
10
0%
Tra
din
g D
ivis
ion
-Ch
em
ple
x M
ark
eti
ng
-An
imal
& P
ub
lic H
ealt
h
Do
row
a M
iner
als
(Pvt
) Lt
d 1
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%Z
imb
abw
e P
hosp
hate
Ind
istr
ies
100
%G
D H
aula
ge
(Pvt
) Lt
d 1
00
%Z
imb
abw
e F
erti
lizer
Co
mp
any
50%
Sab
le C
hem
ical
s (P
vt)
Ltd
35%
G&
W In
dus
tria
l Min
eral
s (P
vt)
Ltd
10
0%
Alli
ed In
sura
nce
Co
mp
any
(Pvt
) Lt
d 1
00
%
No
n-
Fe
rro
us M
eta
l F
ab
ricati
on
an
d L
igh
t E
ng
ine
eri
ng
Zim
bab
we
Co
pp
er In
dus
trie
s 10
0%
(Und
er L
iqui
dat
ion)
Fo
od
Pro
ce
ssin
g
Inve
sys
Inve
stm
ents
(P
vt)
Ltd
10
0%
t/a
IDC
Ag
rote
ch In
dus
tria
l Ho
ldin
gs
Gro
up
Sur
face
Inve
stm
ents
(P
vt)
Ltd
10
%S
wiv
e Te
chno
log
ies
(Do
rmen
t)
Inve
stm
en
t S
erv
ice
s
Co
rrid
or
Dev
elo
pnm
ents
(P
vt)
Ltd
20
%
Exi
mp
Inve
stm
ent
(Pty
) Lt
d, N
amib
ia 1
00
%*T
he
str
uctu
re w
ill
ch
an
ge
wit
h t
he
un
bu
nd
lin
g
of
Mo
tec H
old
ing
s r
efe
r to
No
te 2
1
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IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
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Letter to Minister of Industry, Commerce and Enterprise Development
TheHonourableDr.MichaelC.BimhaMinisterofIndustry,CommerceandEnterpriseDevelopmentP.O.Box8434CausewayHarare
DearSir
IndustrialDevelopmentCorporationofZimbabweLimitedAnnualReportNo54
Ihave thehonour, onbehalfof the IndustrialDevelopmentCorporationofZimbabweLimited, to submit theCorporation’sAnnualReportandAccountsforthetwelvemonthsended31December2017intermsofSection19(1)oftheCorporation’sAct(Chapter14:10).
Yoursfaithfully
H.NkalaChairman
21June2018
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NOTICE TO THE SHAREHOLDER
Noticeisherebygiventhatthe54thAnnualGeneralMeetingoftheShareholderwillbeheldintheIDCBoardRoom,93ParkLane,Harareon5July2018at1430hoursfortransactingthefollowing:
1. Proxies,quorumandconstitutionofthemeeting.2. ToapprovetheminutesofthepreviousAnnualGeneralMeetingheldon18July2017.3. Toreceive,considerandadoptthefinancialstatementsandthereportsofthedirectorsandauditorforthe
financialyearended31December2017.4. Toapprovetheremunerationofthedirectorsfortheyearended31December2017.5. ToapprovetheremunerationoftheauditorKPMGCharteredAccountantsfortheyearended31December
2017.6. Toappointauditorfortheensuingyear.7. Appointment,resignationandretirementofDirectors.8. Toconsiderthenon-declarationofdividendsasrecommendedbytheDirectors.9. TotransactallsuchotherbusinessasmaybetransactedatanAnnualGeneralMeeting.
Proxies:Thememberisentitledtoappointoneormoreproxiestoactontheirbehalfandtoattend,voteandspeakintheirplace.AproxyneednotbeamemberoftheCorporation.
ByOrderoftheBoard
CollinTMutingwendeCompanySecretary
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CHAIRMAN’S STATEMENT
1.0. Operating Environment
TheZimbabweeconomygrewby3.4%whichwasaconsiderable improvementon thatof2016at0.7%.TheimprovedeconomicgrowthisattributablemainlytothestrongperformanceoftheagriculturalsectordrivenbyGovernment’sCommandAgricultureProgramme.Theoverallbusinessenvironment,however,remainedsubduedandwascharacterisedbyweakinvestorconfidence,cashandforeigncurrencyshortages,priceincreasesandawideningtradedeficit.Asaconsequence,themanufacturingsectorcapacityutilisationdeclinedfrom47.4%in2016to45.1%intheyearunderreview.
ThesmoothpoliticaltransitionfollowingtheresignationoftheformerPresidenton21November,2017seemstohavehaltedthenegativedomesticandforeigninvestorconfidenceandusheredrenewedinterestinZimbabweasaninvestmentdestination.
2.0.Inflation
Inflationclosedtheyearended31December,2017at3.46%,upfrom-0.93%asatendofDecember,2016.
3.0. Recapitalisation
DespitetheGovernmenthavingagreed,throughaCabinetResolutionpassedon14November2016,tofollowitsRightsIssueCallofUS$83millionintendedtoaddresstheGroup’stechnicalinsolvency,itwasstillnotpossibletoaccommodatethisinthe2017and2018NationalBudgetsduetolackoffiscalspace.
4.0 Group Financial Performance
TheGroup’sturnoverfor2017increasedtoUS$101.4million,upfromUS$74.8millionin2016.ThegrossprofitincreasedsubstantiallytoUS$29.4millionin2017,upfromUS$16.3millionin2016.
Theimprovedperformancewasattributabletoincreasedproductionandsalesoffertilizersforwintercroppingandfertilizersalestotobaccofarmersduringthetobaccosellingseason.Further,tollmanufacturingofsuperphosphatefertilizersforcompetitortraderswhopreviouslywereimportingmanufacturedfertilizer,helpedtoboostrevenue.Therewasalsoapositiveknock-oneffectfromtheremovalofOfficeofForeignAssetsControl(OFAC)Sanctionson4October,2016whichtriggeredunrestrictedresumptionofbusinesswith local, regionaland internationalsuppliers and customers. The removal of theOFAC Sanctions also enabled competitive procurement of rawmaterials.
5.0 Directorate
The IDCZAct (Chapter 14:10) provides for the appointment of aminimumof 5 and amaximumof 9Boardmembers.DuringtheyearunderreviewtheBoardwascomprisedof6membersuptotheendofJulywhenthethenGeneralManager,MrMichaelN.Ndudzowhowasanexecutivedirector,proceededonnormalretirement.MrBenjaminNkosentyaKumalojoinedtheCorporationon7September2017asthenewGeneralManager.A5memberBoardremainedinplacefortherestoftheperiodupto31December,2017withBenjaminNkosentyaKumaloasanex-officiomember.OnbehalfoftheBoard,IwouldliketothankMrMichaelNyamadzawoNdudzoforhiscontributionsandloyaltyover26yearsthatheservedtheCorporation.
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CHAIRMAN’S STATEMENT (continued)
6.0 Outlook Whilethebusinessenvironmentisexpectedtoremainchallengingintheshorttomediumterm,itisanticipated
thatthenewpoliticaldispensationwillresultina“NewEconomicOrder”whichwillentail,amongothermeasures,thecorrectionoffiscal imbalances,addressingfinancialsectorvulnerabilities;reformingpublicenterprisesandlocalauthorities,dealingwithcorruptionintheeconomyandreengagementwiththeinternationalcommunity.Thisshouldimprovethebusinessenvironmentandinvestmentclimatethusstimulatingeconomicrecovery.
The Corporation has embarked on restructuring its investment portfolio and refocusing on the developmentfinancerolesothatitplaysamuchmoreeffectiveroleintherevivalandsustainablegrowthofindustrialcapacityinthecountry.
TherestructuringoftheCorporationwillentailthefollowingmeasures:• Dilution, disposal, dissolution and development of the Corporation’s entire investment portfolio (the “4DStrategy”)
• Recapitalisation of the Corporation and its individual Strategic Business Units (SBUs) to strengthen theirbalancesheetsand
• InitiativestoraiseadditionalcapitalforthesetupoftheDevelopmentFinancefunction.
7.0 Acknowledgements
ItaketheopportunitytosincerelythankmycolleaguesontheIDCZBoard,andtheDirectorsofsubsidiaryandassociatecompaniesfortheircommitmentandcontributionsduring2017,andlookforwardtocontinuationofthesameaswepressonwiththerestructuringandturnaroundoftheGroup,andrepositionourselvesforthedevelopmentfinancerole.
Ialsothanktheshareholder,entireIDCZGroupManagementandStafffortheirinvaluablecontributions,andlast
butnotleast,Ithankallstakeholdersandcustomersfortheircontinuedsupport.
Yoursfaithfully
HerbertNkala CHAIRMAN
21June2018
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REPORT OF THE DIRECTORSFor the year ended 31 December 2017
Thedirectorshavepleasureinsubmittingtheirfiftyfourthreport,togetherwiththeauditedfinancialstatementsforthetwelvemonthsended31December2017.
Share Capital Theauthorisedsharecapitalremainedat50000000ordinarysharesofUS$2eachwithavalueofUS$100000
000aspersection13(1)oftheIDCAct(Chapter14:10).
On14November2016,CabinetapprovedtheconversionofdebtowedtotheMinistryofIndustry,CommerceandEnterpriseDevelopment(theMinistry)into10086717ordinarysharesof$2eachwithavalueof$20173543.TheshareswereissuedtotheMinistryinFebruary2017.Theissuedsharecapitalincreasedfrom4172054ordinarysharesofUS$2eachwithavalueofUS$8344108to14258771ordinarysharesofUS$2eachwithavalueofUS$28517543.
2017 2016
Group Income and Appropriations US$ US$
Profit/(loss)fromoperations 11790144 (3151816)Netfinancecharges (6213780) (7838002)Shareofincome:associatedcompanies (984386) (1634652)Fairvaluegain:investmentproperty 40000 (198822)
Impairmentloss:assets (110781) (2567805)
Impairmentofinvestments - 2006Exceptionalitems - (461198)Gainonlossofcontrol (1460975) 21605249Exchange(losses)/gain (701360) 1060381
_____________ _____________Profitbeforetaxation 2358862 6815341Incometaxcredit/(charge) (4764866) 877879Lossfromdiscontinuedoperations (111805) (640943)
_____________ _____________(Loss)/profitaftertaxation (2517809) 7052277Othercomprehensiveincome 4361479 4593671
_____________ _____________Totalcomprehensiveincomeforyear 1 843 670 11 645 948
Attributable to:-
Non-controllingInterest (1460385) (61521)Ownersoftheparent 3310055 11707469
_____________ _____________1 843 670 11 645 948
_____________ _____________
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REPORT OF THE DIRECTORS (continued)
Directorate
ThetermsforMr.H.Nkala,Prof.Mafoti,Mr.JMushayavanhuandDr.M.Fallalawereextendedfor3yearsfrom05December2015to05December2018.MrsG.ZvaravanhuwasappointedDeputyChairpersoneffectivefrom12October2015andhertermasdirector,whichranupto30April2017,was extended to 30April 2020.Terms forDr. J. PMuchineripi andMr.M. SCharambawhowereappointed directors on12 February 2018will expire on11 February 2021,while that ofMr.B.NKumalowhowasappointedExecutiveDirectoron7September2017runsupto6September2020.
Dividend
ThedirectorsdonotproposetodeclareadividendforthisyearendedDecember2017astheGroupcontinuedtoreportnegativeretainedearnings.
Auditors Atthe54thAnnualGeneralMeetingscheduledfor5July2018,thedirectorswillfixtheremunerationofthe
auditorsforthepastaudit,andappointauditorsfortheensuingyear.
ForandonbehalfoftheBoard
CTMutingwende CorporateSecretary
21June2018
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IDCZ | ANNUAL REPORT 31 DECEMBER 2017
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CORPORATE GOVERNANCE REPORT TheIndustrialDevelopmentCorporationofZimbabweLimitedisaregisteredlimitedliabilityentity,subjecttothe
provisionsoftheIDCZAct(Chapter14:10)of1963asamended.
NoneoftheprovisionsoftheCompaniesAct(Chapter24.03),orofanyotherlawrelatingtocompaniesshallapplytotheCorporationexceptinrespectofspecificprovisionsasmaybeenactedbyPresidentialProclamation.
Foritsroleincatalyzingindustrialization,theIDCZisclassifiedasaDevelopmentFinanceInstitution(DFI)andshallnotbewoundupexceptbyorundertheauthorityofanActofParliament.
Board of Directors
TheBoardofDirectors isappointedbytheMinisterof Industry,CommerceandEnterpriseDevelopment.TheIDCZActdeterminestheconstitution,rights,powersandobligationsoftheBoard.Ofthesixdirectorsledbyanon-executivechairman,fivearefromtheprivatesectorandarenon-executivewiththeGeneralManagerbeingtheonlyexecutivedirector.
TheBoardmeetsatleastquarterly.ThefiveexistingBoardCommitteesmeetaheadofthenormalboardmeetings.AllBoardcommitteesarechairedbynon-executivedirectors.TheBoardhasreservedcertainitemsforitsreviewincludingapprovalofperformanceresults;Greenfieldandexpansionprojectsdevelopment(i.e.structuringjointventuresandappropriatefinancingthereof)andrelatedmaterialagreements;disposalsofinvestments;budgetsandlong-rangeplans,andseniorexecutiveappointmentsandremuneration.TheBoardthusretainsfullcontrolbyapprovingstrategicplan,keyresultareasandmonitoringperformancethroughkeyperformanceindicatorsatleastquarterly.
TheBoard’s assessmentof the IDCZ’sposition ispresented in itsAnnualReport,whichaddressesmattersofconcern and interest to stakeholders, including non-financial matters, reports on both positive and negativeaspectsofIDCZ’sactivities.
TheAnnual Report and the external auditors’ opinionwhich are adopted at theAGMbefore being tabled inParliamentbytheMinisterofIndustry,CommerceandEnterpriseDevelopmentareavailabletothepublic.
TheBoard subscribes to the need to conduct business in linewith generally accepted corporate governancepracticesprescribedbytheCodeofBestPractice(CadburyReport),NationalCodeonCorporateGovernanceandtheCorporateGovernanceFrameworkforStateEnterprisesandParastatals,allrelevantlegislation,regulations,relevantInternationalFinancialReportingStandards,andinaccordancewithitsCorporateValues.
Business Development Committee The Committee oversees the active search for and identification of Greenfield and expansion investment
opportunitiesforimplementationbytheCorporation,throughneworspecialpurposeimplementationvehicles,orthroughexistinginvestmentvehicles.AllcommercialprojectsidentifiedforimplementationmustpassthehurdleofareturnabovetheCorporation’scostofcapital.
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CORPORATE GOVERNANCE REPORT (continued) Finance & Audit Committee
The Committee deals with accounting matters, financial reporting and internal controls. It meets at leastquarterlyandreviewsthefinancialstatementsbeforetheyaresubmittedtotheBoard.TheCommitteemonitorsproposedchangestoaccountingpolicy,reviewsinternalcontrolandreportingmatters,reviewsInternalAuditandIndependentExternalAuditors’reports.TheCommitteehasaccesstoboththeExternalAuditPartnerandtheInternalAuditManager,whoalsoattenditsmeetings.AllsignificantfindingsduringtheauditarebroughttotheattentionoftheBoard.
TheInternalAuditDepartmentisrequiredtocovereachCorporationinvestmentatleastfourtimesperannum.TheCorporationobtainedtheagreementofpartnersinassociatedcompaniesfortheInternalAuditDepartmenttoconductauditsatthoseinvestmentssince2001.
Nomination Committee
TheCommitteerecommendstotheBoardnamesofqualifiedpersons,fromadatabasebuiltforthepurpose,forappointmentasnon-executivedirectorsinCorporationinvestments,withaviewtoachievingaskill,genderandgeographicalmixontheseboards.
Remuneration & Human Resources Committee
TheCommitteeisresponsibleforreviewofexecutivemanagementremunerationinlinewiththeRemunerationPolicyapprovedbytheBoard.TheRemunerationPolicywasputinplaceintermsofSections12and23oftheIDCAct (Chapter14:10),afterconsideringthepracticesofcommercializedandprivatizedGovernmentownedcompanies, IDCZSubsidiariesandotherholdingcompaniesofasizeandstandingsimilar tothe Corporation.ThepolicyisaimedatensuringthattheremunerationpracticesattheCorporationarecompetitivetoenabletheCorporationtoattractandretainhighcalibreexecutiveswhileprotectingtheinterestsoftheShareholder.
Risk Management Committee
TheCommitteeidentifiesrisksfacedbytheCorporationanditsinvestmentsandproactivelyseekssolutionsandmeasurestomanagetherisk,whicharerecommendedtoboththeCorporationanditsinvestments.
ATTENDANCE REGISTER Therecordofattendancebythedirectorswasasfollows:-
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CORPORATE GOVERNANCE REPORT (continued) ATTENDANCE REGISTER (continued)
Key/Notes
NM–NotMemberMr.M.N.NdudzoretiredasGeneralManageron31July2017.Mr.B.N.KumalowasappointedGeneralManageron07September2017.TheNominationCommitteedidnotsitastherewerenoappointmentstobemade.TheBoardTransactionCommitteeonlymeetswhenthereisatransactiontobeconducted.TheSpecialRemunerationandHumanResourcesCommitteemeetingsweretoidentify,interviewandappointtheNewGeneralManager.
Code of Conduct and Business Ethics Charter
TheIDCZCodeofConductandBusinessEthicsCharterformsanintegralcomponentofthecontractsofserviceofemployees,andprovideguidanceregardingthebehaviourexpectedfromemployees.
H. Nkala Mrs G Zvaravanhu R. Mafoti (Prof)
BoardChairmanandNominationsCommitteeChairman
FinanceandAuditCommitteeChairman
BusinessDevelopmentCommitteeChairman
J Mushayavanhu M.S. Fallala (Dr)
RemunerationandHumanResourcesCommitteeChairman
RiskManagementCommitteeChairman
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DIRECTORS’ RESPONSIBILITY STATEMENT TheDirectorsoftheCorporationarerequiredbytheIndustrialDevelopmentCorporationActtomaintainadequate
accountingrecordsandtopreparefinancialstatementsthatpresentfairlythestateofaffairsoftheCorporationanditsinvestmentsattheendofeachfinancialyearandoftheprofitandcashflowsfortheperiod.Inpreparingtheaccompanyingfinancialstatements,InternationalFinancialReportingStandardshavebeenfollowed.Suitableaccounting policies have been used and consistently applied, and reasonable and prudent judgements andestimateshavebeenmade.
TheDirectorshavesatisfiedthemselvesthattheGroupwillremainprofitableandthattheCorporationwillbeabletodischargeitsliabilitiesastheyfalldue.ItssubmittedstrategicturnarounddocumenttoGovernmentasitsshareholderandasperrequest,forconsiderationofitsrecapitalisationandotherpolicyassistanceneedswasapprovedon14November2016.TheCorporationBoard is implementing resolutionspassedbyCabinet andthe4D(Dilution,Disposal,DissolutionandDevelopment)StrategyadoptedbytheBoard.Accordingly,theyaresatisfiedthatitisappropriatetoadoptthegoingconcernbasisinpreparingthefinancialstatements.
TheBoardrecognisesandacknowledgesitsresponsibilityfortheGroup’ssystemsofinternalfinancialcontrol.TheGroupmaintainsinternalcontrolsandsystemsthataredesignedtosafeguarditsassets,preventanddetecterrorsandfraudandensurethecompletenessandaccuracyofrecords.TheGroup’sFinanceandAuditCommitteehasmettheExternalAuditortodiscusstheirreportsontheresultsoftheirwork,whichincludeassessmentsoftherelativestrengthsandweaknessesofkeycontrolareas.
Thefinancialstatementsfortheyearended31December2017,whichappearonpages29to129havebeenapprovedbytheBoardofDirectorsatitsmeetingheldon21June2018andweresignedonbehalfoftheBoard,bytheChairmanoftheBoard,andtheGeneralManager.Thesefinancialstatementswhichhavebeenpreparedunderthehistoricalcostconventionareinagreementwiththeunderlyingbooksandrecords,havebeenproperlypreparedinaccordancewiththeaccountingpoliciessetoutinnote2,andcomplywiththedisclosurerequirementsoftheIndustrialDevelopmentAct(Chapter14:10)andtherelevantregulationsmadethereunder.
Thefinancial statements areprepared in accordancewith International FinancialReportingStandards (IFRSs).IFRSscompriseinterpretationsadoptedbytheInternationalAccountingStandardsBoard(IASB),whichincludesstandardsadoptedbytheInternationalAccountingStandardsBoard(IASB)andinterpretationsdevelopedbytheInternational FinancialReporting InterpretationsCommittee (IFRIC) or by the former Standing InterpretationsCommittee(SIC).
ThefinancialstatementswerepreparedunderthesupervisionoftheFinanceManager,NgonidzasheMusungwa,a holder ofBSc (Hons)AppliedAccounting andMasters ofBusinessAdministration (MBA); amember of theAssociation of Chartered CertifiedAccountants (ACCA), Institute of Certified Public Accountants Zimbabwe(CPAZ), and anAssociatemember of the Institute of Chartered Secretaries andAdministrators in Zimbabwe(ACIS).PublicAccountantsandAuditorsBoard(PAAB)registerednumber03702.
H.Nkala B.N.Kumalo Chairman GeneralManager 21June2018 21June2018
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GENERAL MANAGER’S REPORT ON OPERATIONSFOR THE YEAR ENDED 31 DECEMBER 2017
1.0 ZIDERA sanctions
Outofthe$4.2millioninterceptedbyOfficeofForeignAssetsControl(OFAC)intheGroup,$938530.86isstilloutstandingaftertheremovalofthesanctionswiththeresthavingbeenrecoveredduringtheyear.
2.0 Recapitalisation
TherewasnoprovisionfortheUS$83millioninthe2018nationalbudgetpresentedinDecember2017.
Statutorydebtmoratoriumsimplementationremainedoutstandingandisexpectedtobeeffectedin2018.
3.0 Litigation
3.1 Chemplex Corporation (Private) Limited
ChemplexCorporationisexpectedtobenefitfromthethreeyearmoratoriumonitsstatutorydebtofUS$11.9millionapprovedbyCabinetonthe14November,2016.Thishadhowevernotbeenimplementedbytheendoftheyear.
Bank debt restructuring during the year extended the repayment period to 2025. This greatly improve thecompany’stechnicalsolvency.
3.2 ROMSIT
TheROMSITclaimremainsoutstandingandstoodatUS$10883000asatendofDecember2017.Effortstorecover the funds through diplomaticmeans did notmaterialize during theyear under review.However, theInternationalCourtofArbitrationinParisisbeingengagedforrecovery.
3.3 Zimglass
The liquidatorcontinuedto lookforuptakersoftheassetasagoingconcerntomaximizevalueforcreditorswithoutsuccess.
TheguaranteedconsortiumofbanksdebtofUS$16.6millionwhichGovernmenthadpromisedtosettlethroughvariousset-offoptionstofendoffawritofexecutionissuedbytheHighCourtagainsttheCorporationremainsoutstanding,withtheattendantthreatontheCorporation’sassetspledgedassecurity.TheassetsunderthreatincludeIDCZ’sshareholdinginSunwayCityandSurfaceWillmarInvestments.
3.4 Willowvale Motor Industries
The$14.2millionrightsissuefromGovernmentwhichwassupposedtobenefitthemotorGroupdidnotmaterializeduringtheyearnorwasitprovidedforinthe2018annualbudget.Itis,however,hopedthattheUS$5.4millionfromthemoratoriumonstatutorydebtwhichdidnotmaterializein2017willbeimplementedin2018.
3.5Interfin/CFXCuratorClaimonGuarantee
AclaimforZAR909969.02filedbyInterfinBank(underliquidation)attheHighCourtinrespectofaguaranteetheCorporationpurportedlyissuedon22May2009toBonnezim(Private)LimitedisstilltobeheardaftertheCorporationfiledforitsdefence.
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GENERAL MANAGER’S REPORT ON OPERATIONS (continued)
4.0 Performance Reports By Sector
CapacityutilizationwhichremainedbelowbreakevenintheGroupsubsidiariescontinuedtothreatensustainedenterpriseviabilityduringtheperiod.
Thiswasaresultoflackofproperlypricedcapitalforretoolingastheliquiditycrunchpersisted,coupledwithdiminishingnostrobalancestosupportcriticalrawmaterialimports.Thecountryremainedahighcostproducerthereby inhibitingthecountry’sexportpotentialforthegenerationofthemuchneededforeigncurrencyforcriticalrawmaterials,sparesandcapitalequipment.
4.1 Agro-Processing
4.1.1 Fertiliser & Chemicals
WhileDorowaMineralsplantwasrehabilitatedthroughanRBZmediated&guaranteedoffshorelineofcreditfromAfrieximbankin2016,therehabilitationofZimbabwePhosphatesIndustries(ZIMPHOS’s)sulphuricandphosphoricacidplantshoweverremainedoutstanding.
EffortwillbemadetorehabilitatetheZIMPHOSplantin2018notwithstandingthenostrochallenges.
Thesearchforastrategicpartnerinthebusinesscontinuedduringtheyearbutwasunsuccessful.ItishopedthatgiventherenewedandheightenedinvestorinterestinZimbabwethisobjectivewillbeachievedin2018.
4.1.2 Food Processing
OperationswererationalizedduringtheyearbetweenSurfaceWilmar(Private)LimitedandOlivineIndustries(Private)Limitedtoachieveproductionefficienciesandreduceoverheads.
However,shortagesoflocallyproducedsoyabeansandcottonseed,whicharekeyinputsintheextractionofcookingoilandproductionofstockfeed,continued.
ImportationofcrudesoyaoilcontinuedduringtheperiodunderreviewwithGovernment,throughtheReserveBankofZimbabwe(RBZ),playingapivotalroleinavailingnostrosupportforsuchimportstoensureproductavailabilityonthelocalmarket.
4.2 Mineral Processing
4.2.1 Cement
Competitionremainedstiffduringtheyearasevidencedbytheemergenceofmoreplayersatthetailendofthevaluechainandthiscausedalotofpriceundercutting.ThefirmingoftheRandtowardstheendoftheyearunderreviewisexpectedtoprotectthelocalindustryfromimportsfromSouthAfrica.
The transferof IndivaFarmby theMinistryof Lands to IDCZ remainedoutstanding as atyearend. This isnecessary as the landwas pledged as part of the IDCZ’s equity contribution into Sino Zimbabwe CementCompany.
Itishopedthatthiswillbeimplementedin2018andopenupothernewprojectopportunitiesatSinoZimbabweCementCompany.
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GENERAL MANAGER’S REPORT ON OPERATIONS (continued)
4.2 Mineral Processing (continued)
4.2.2 Ceramic Products & Tourism
ThedisposaloftheDetemaestateanditsimprovementstoindigenouspeoplethroughapublictenderdidnotmaterializebecauseallthebidswerebelowthereserveprice.
Thisisexpectedtobeconcludedin2018.
4.2.3 Dimension Stone
Theexistingmajorityshareholderagreedtoexercisetheirpre-emptiverightstopurchaseIDCZ’s49%shareholdinginStoneHoldings.Asharesaleagreementwassignedduringthefirsthalfof2017.Howeverthepurchaserfailedtopayinaccordancewiththeagreement.Thisdelayedtheprocessofdisposaloftheshares.
4.2.4 Glass/Silica Sand
ThesharecertificatesofownershipinIndustrialSands(Private)Limitedcouldnotbelocatedandsothesubsidiarycontinuestobeaccountedforasbeforependingfurthersearches.
4.3 Motor & Transport
RemittancestosuppliersremainedachallengeduringtheperiodunderreviewonaccountofdiminishednotrobalancesintheeconomyandtoalesserextentlowdomesticaggregatedemandmakingtheknockedDown(KD)businessdifficulttosustain.
4.3.1 Motor Assembly
Ajointventureconsummatedin2016byWillowvaleMotorIndustry(WMI),AstolMotorsandBeijingAutomobileIndustryofChina(BAIC)facedchallengesofservicingthesupplycreditforimportedmotorvehicleskitsduetoforeigncurrencyshortages.Asaconsequenceassemblyoperationsweresuspendedpendingresolutionofthenon-payment.
EffortstocontractassemblebrandsofotherOriginalEquipmentManufacturers(OEMs)arebeingpursuedwithverygoodprospectsgiventheapprovaloftheMotorIndustryDevelopmentPolicybyGovernment.However,theseplansmayalsobesetbackbythenonavailabilityofforeigncurrencytopayforkits.
4.3.2 After Sales Service, Engineering and Retail
Workshopthroughput,workingcapitalavailabilityandprofitabilityimprovedatAmtecduringtheperiodunderconsideration.
However,thecompany,likeotherplayersinthesector,facedforeigncurrencychallengesforprocurementofthemotorvehicleunitsandpartsstockpipeline.
4.3.3 Tractors
MOTIRA’sbusinessmodelofsourcingbothtractorunitsandpartsfrommultiplesupplierscouldnotbesustainedandhenceadecisionwastakenthatthebusinessbetransferredbacktoAMTECin2018andthatMOTIRAceasesoperations.
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GENERAL MANAGER’S REPORT ON OPERATIONS (continued) 4.4 Non-Ferrous Metal Fabrication
4.4.1 Aluminium
TheIDCZdisposedits51%inAlminMetalIndustriestoArchitecturalAluminiumduringtheyear.
4.4.2 Copper
ThedisposaloftheassetsofZimbabweCopperIndustries(Private)Limitedthroughpublicauctionbytheliquidatorwascompletedduringtheyearalthoughproceedswerenotenoughtocovertheliquidationexpensesandsecuredcreditors.
4.5 Textiles
Cottonproductionhasdeclineddramaticallyinrecentyearsduetounattractivecommoditypricesofcottonlintinthecountryandassuchthesectorremainedunattractiveforinvestors.AfroranSpinnersinNortonremainedoperationalbutatverylowcapacity.
DespiteGovernmentincentivesforcottonproductionthroughdirectbudgetarysupporttocottongrowers,thesector’sfortunesdidnotimproveduringtheperiod.
Modzonesubsidiaries,IrazimTextilesandTravanBlanketsremainedunderjudicialmanagement.
4.6 Polypropylene Packaging
ThesaleofIDCZ’s49%sharesinZimbabweGrainBag(Private)Limitedtothemajorityshareholderunderpre-emptiverightsdidnotproceed.Itishopedtoconcludethesharesaleagreementin2018.
4.7 Insurance
ThesearchforstrategicfitpartnersintheindustryoroutrightdisposalofIDCZsharesinAlliedInsurancetoavoidtheriskofnon-compliancewiththeminimumcapitalisationrequirementswillcontinuein2018.
4.8 Real Estate
SunwayCity is lookingfor jointventurepartnerstodeveloptheInformationCommunicationTechnology(ICT)Hubwhichwouldavailfactory/officespaceforleasetoinvestorswhowouldcomeintotheSpecialEconomicZonedesignatedarea.
Theprocesstofindsuchpartnerswillcontinuein2018.
5.0 Short-Time Working and Retrenchments
With national capacity utilization still below average, the IDCZGroup continued to adopt cost containmentmeasures(includinglabourcosts)andtosearchformeasurestoincreaseitsrevenuestreams.
6.0 Capacity Building
The Corporation staff continued to benefit under Southern African Development Community DevelopmentFinanceResourceCentre(SADCDFRC)capacitybuildingworkshopsandotherrelevantworkshopsandeducationprogrammeswhichwererunlocallyduringtheyear.
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GENERAL MANAGER’S REPORT ON OPERATIONS (continued)
7.0 ZITF
The IDCZGroupexhibited its products and services at theyear’s annual event inBulawayoandwonaGoldMedalAwardfortheBestZimbabweanExhibit,(Chemicals,Pharmaceuticals,CosmeticsandToiletriesGroup)andanotherGoldMedalAwardfortheBestZimbabweanExhibit,(Construction,BuildingandHardware).
8.0 Acknowledgement
Ithanktheshareholder,GroupmanagementandstafffortheirinvaluablecontributionsduringtheyearandcallfortheircontinuedsupportastheCorporationgoesthroughaperiodofrestructuringtoenhanceitsroleintheindustrialisationoftheeconomy.IalsothanktheBoardforitswisecounselandleadershipunderaverydifficulteconomicenvironment.
IwouldliketoalsoacknowledgethecontributionsandloyalservicerenderedbymypredecessorMrM.N.Ndudzo,whoretiredduringthecourseoftheyear.
B.N.Kumalo GeneralManager
21June2018
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KPMGMutualGaderns100TheChase(West)EmeraldHillP.O.Box6Harare,ZimbabweTel:+263242303700,302600Fax:+263242303699
Independent Auditor’s ReportTo the Members of the Industrial Development Corporation of Zimbabwe Limited
Opinion
WehaveauditedtheconsolidatedandseparatefinancialstatementsoftheIndustrialDevelopmentCorporationofZimbabweLimited(theGroupandCorporation)setoutonpages29to129,whichcomprisethestatementsoffinancialpositionasat31December2017,andtheincomestatementsandstatementsofothercomprehensiveincome,thestatementsofchangesinequityandthestatementsofcashflowsfortheyearthenended,andthenotestothefinancialstatements,includingasummaryofsignificantaccountingpolicies.
Inouropinion,exceptforthepossibleeffectofthematterdescribedintheBasisforQualifiedOpinionsectionofourreport,thesefinancialstatementsgiveatrueandfairviewoftheconsolidatedandseparatefinancialpositionoftheIndustrialDevelopmentCorporationofZimbabweLimitedasat31December2017,andofitsconsolidatedandseparatefinancialperformanceandconsolidatedandseparatecashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandardsandinthemannerrequiredbytheprovisionsoftheIndustrialDevelopmentCorporationAct(Chapter14:10).
BasisforQualifiedOpinion
Note 8.1 explains that Industrial Sands (Private) Limited (Industrial Sands)was classified as awholly ownedsubsidiaryoftheIndustrialDevelopmentCorporationofZimbabweLimiteddespitebeingdisclosedasawhollyownedsubsidiaryofZimglassIndustries(Private)Limited(Zimglass)inprioryears.DocumentationinplaceisnotclearonwhetherIndustrialSandsisownedbytheCorporationorbyZimglass.Thenotefurtherexplainsthatthedirectorsareintheprocessofregularisingthelegaldocumentation.WewerenotprovidedwithfurtherevidencetoshowthatIndustrialSandsisownedbytheCorporationortootherwisesupportitsclassificationasasubsidiaryoftheCorporation.ThefinancialresultsofIndustrialSandswereincludedintheconsolidatedfinancialstatements.While the amounts involved are not considered quantitatively material nor pervasive to these consolidatedfinancial statements, thismatter isconsideredqualitativelymaterial to theusersof thesefinancial statementsgiventhenatureofthematter.Ouropinionwasalsoqualifiedinrespectofthismatterintheprioryear.
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(ISAs).Ourresponsibilitiesunderthosestandardsarefurtherdescribed in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report.We are independent of theGroup andCorporation in accordancewith the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants(IESBACode)togetherwiththeethical requirementsthatarerelevanttoourauditofthefinancialstatementsinZimbabwe.WehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirementsandtheIESBACode.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourqualifiedopinion.
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Independent Auditor’s Report (continued) Material Uncertainty Related to Going Concern
Wedrawattentiontonote22inthefinancialstatements,whichindicatesthattheGroupandtheCorporationrecordedatotalprofitandlossfortheyearnetoftaxof$1843670and$1594respectivelyduringtheyearendedDecember312017and,asofthatdate,theGroup’sandtheCorporation’scurrentliabilitiesexceededitscurrentassetsby$35401080and$26426106respectively.AsstatedinNote22,theseeventsorconditions,alongwithothermattersassetforthinthenote,indicatethatamaterialuncertaintyexiststhatmaycastsignificantdoubtontheabilityoftheCorporationanditssubsidiariestocontinueasgoingconcerns.Ouropinionisnotmodifiedfurtherinrespectofthismatter.
Key Audit Matters
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditoftheconsolidatedandseparatefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditoftheconsolidatedandseparatefinancialstatementsasawhole,andinformingouropinionthereon, andwedonotprovidea separateopinionon thesematters. Inaddition to themattersdescribed inthe Basis for Qualified Opinion and Material Uncertainty Related to Going Concernsectionsofourreport,wehavedeterminedthemattersdescribedbelowtobethekeyauditmatterstobecommunicatedinourreport.
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Independent Auditor’s Report (continued)Valuation of land and buildings and investment properties at year end (applicable to the consolidated financialstatements)
Refer to the summary of significant accounting policies in 2.3(n), 2.3(p) and disclosures in notes 2.4 (b) (ii-iii), 6 and 7.to the financial statements.
The key audit matter How we addressed the matter in our audit
Atyearend,thegroupheldlandandbuildingsandinvestmentpropertieswithfairvaluesamountingto $77.2 million and $3.7 million respectively.TheseassetsaremeasuredatfairvalueaspermittedbyIAS16Property,PlantandEquipment(forlandandbuildings)andIAS40InvestmentProperty.
Thelandandbuildingsandinvestmentpropertieswere revalued by an independent valuationspecialist at year end, using the investment anddirect comparison method. This method takesinto account unobservable inputs and thereforerequires significant judgement. In addition, thepropertymarketremainssubduedandthereisnoreadilyavailablemarketinformationonproperties,so a significant amount of judgement has to beappliedindeterminingthepropertyvalues.
The significance of the land and buildings andinvestment properties to the consolidatedstatement of financial position at year end,togetherwiththesignificantvaluationjudgementsresultedinthisareabeingconsideredakeyauditmatter.
Our audit procedures included: We evaluated the competence, independenceand objectivity of the independent valuationspecialistthroughinquiriesregarding interestsandrelationshipsthatmayhavecreatedathreattotheindependent valuation specialist objectivity andinspecting the independent valuation specialist’squalifications, experience with similar valuationsandreputationwithinthemarket.
We critically evaluated the methodology andassumptions incorporated by the independentvaluation specialist into thevaluationsperformed.Ourevaluationincludedcorroboratingassumptionsusedbytheindependentvaluationspecialistagainstinformationobtainedfromothernotablerealestatepractitionersandourgeneralunderstandingofthepropertymarketandmacro-economicenvironment.
We further compared the propertyvalues againstthe ‘best use’ principle required by IFRS 13 FairValueMeasurementandweassessedwhetherthefairvalueprinciples,accordingtothe independentvaluationspecialist’sdefinitions,wasinlinewiththedefinitionperIFRS13.
We evaluated whether disclosures made bymanagement where adequate in accordance withIAS16,IAS40andIFRS13.
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Independent Auditor’s Report (continued)Impairmentofreceivables–tradereceivables(applicabletotheconsolidatedfinancialstatements)andgroupbalancesreceivables(applicabletotheseparatefinancialstatements)
Refer to the summary of significant accounting policies on note 2.3(k) and disclosures in notes 2.4 (b) (v) and 11, 11(a) including 18 to the financial statements.
The key audit matter How we addressed the matter in our audit
AspartoftheGroup’soperations,theGroupsellsgoodsto customers on credit. The Group’s trade receivablesamountedto$14.3millionintheconsolidatedfinancialstatements at year end. In addition, the Corporationprovidesmanagement services and earnsmanagementfees,aswellasdividends,fromentitieswithinthegroup.Group balances receivables in the separate financialstatementsamountedto$2.9millionatyearend.
Theimpairmentofthesereceivablesinvolvessignificantjudgement and estimation about the amounts to berecoveredandthetimingofrepaymentsthereof.
The provisions for impairment raised against thereceivableshavebecomeanevenmorecriticalfocusareainZimbabwe,takingintoaccounttheworseningcashandcurrency shortages, company closures, retrenchmentsandgeneralincreaseincreditriskduetothesefactors.
The significance of the receivables to these financialstatements and the related estimation uncertaintyinvolvedandthehighcreditriskduringtheyear,thiswasconsideredtobeakeyauditmatter inourauditoftheconsolidatedandseparatefinancialstatements.
OurauditofGroup’stradereceivablesincluded:
• Weevaluatedtheoperatingeffectivenessofinternalcontrolsovertheapproval,recordingandmonitoringoftradereceivables.
• We analysed the key inputs used indetermining the receivables impairmentallowanceandevaluatedthereasonablenessof assumptions used by management byinterrogating documentation evidencingthe performance of credit assessments oncustomers in accordance with the Group’spoliciesandapplicablelaws.
• We evaluated payments received fromcustomers subsequent to year-end, pastpayment history and unusual patterns toidentifypotentiallyimpairedbalances.
• We evaluated the reasonability ofmanagement’s judgement by comparingthe prior year’s impairment allowanceraised against current year actualwrite-offsrecorded.
Our audit of the Corporation’s group balances receivables included:
• Weanalysedmanagement’scalculationoftheamountstobeimpairedwithreferencetoourknowledgeof the entitieswithin the group,includingconsiderationof thework thatweperformed in respect of the impairment ofsubsidiaries(seebelow).
We inspected payments received from groupentitiessubsequenttoyearend.
26
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Independent Auditor’s Report (continued)Impairmentofinvestmentinsubsidiaries(applicabletoseparatefinancialstatements)
Refer to the summary of significant accounting policies note 2.3(o) and other disclosures in note 3.7 and note 8.1 to the financial statements.
The key audit matter How we addressed the matter in our audit
Investment in subsidiaries represent a substantialproportionof theCorporation’sassets in the separatefinancial statements. The Corporation measures itsinvestments in subsidiaries at cost. At year end, theCorporation’s investments insubsidiariesamountedto$49.5million.
Due to continuing losses, decreasing revenues andtheinsolvencyofcertainofthesubsidiarieswithintheGroup,thecarryingamountsoftheseinvestmentsmaybe impaired. The Corporation calculates impairmentby comparing the carrying amount to the recoverableamount.
Assessment of impairment requires judgement withregard to determining that the subsidiaries’ carryingamountsarenotabovetheirrecoverableamount.
Duetothepoorperformanceofthesubsidiaries,theirsignificance to the Corporation’s financial statements,thiswasconsideredtobeakeyauditmatter.
Ourauditproceduresincluded:• We evaluated management’s assessment of the
impairment of its subsidiaries by obtaining the auditedfinancial information of subsidiaries and comparing netassetvaluestothecarryingamountsoftheseinvestments.
• WeevaluatedthereasonabilityofusingnetassetvalueasasubstitutefortherecoverableamountofthesubsidiarybyanalysingthenetassetvalueagainstthesubsequentsalepriceofsubsidiariesthathavebeendisposedofbytheCorporation.
• Wealsoanalysedthenetassetvaluesofsubsidiariesthatthegroupplanstodisposeof inthenearfutureagainstthevaluationsprovidedby independent experts and/orindependentpotentialbuyers.
• Weevaluatedtheadequacyofthedisclosuresrelatingtotheimpairmentofsubsidiaries.
Other InformationThe directors are responsible for the other information. The other information comprises of all informationincluded intheAnnualReport. Other informationdoesnot includethefinancialstatementsandourauditors’report thereon.
Ouropinionontheconsolidatedandseparatefinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanauditopinionoranyformofassuranceconclusionthereon.
Inconnectionwithourauditoftheconsolidatedandseparatefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththeconsolidatedandseparatefinancialstatementsorourknowledgeobtained intheaudit,orotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.
Responsibilities of the Directors for the Consolidated and Separate Financial StatementsThedirectorsareresponsibleforthepreparationandfairpresentationoftheconsolidatedandseparatefinancialstatements in accordancewith International Financial Reporting Standards and in a manner required by theIndustrial Development Corporation Act (Chapter 14:10) of Zimbabwe, and for such internal control as thedirectorsdetermineisnecessarytoenablethepreparationofconsolidatedandseparatefinancialstatementsthat
27
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Independent Auditor’s Report (continued)Responsibilities of the Directors for the Consolidated and Separate Financial Statements (continued)
arefreefrommaterialmisstatement,whetherduetofraudorerror.
Inpreparingtheconsolidatedandseparatefinancialstatements,thedirectorsareresponsibleforassessingtheGroup’sandCorporation’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlessthedirectorseitherintendtoliquidatetheGroupand/orCorporationortoceaseoperations,orhavenorealisticalternativebuttodoso.
Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements. Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial
statementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithISAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisoftheseconsolidatedandseparatefinancialstatements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professionalscepticismthroughouttheaudit.Wealso:
• Identify and assess the risks ofmaterialmisstatement of the consolidated and separate financial statements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.
• Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.
• Obtainanunderstandingof internalcontrol relevant to theaudit inorder todesignauditprocedures thatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofthegroup’sandCorporation’sinternalcontrol.
• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmadebythedirectors.
• Concludeontheappropriatenessofthedirectors’useofthegoingconcernbasisofaccountingandbasedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtonthegroup’sandCorporation’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresintheconsolidatedandseparatefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausetheGroupand/orCorporationtoceasetocontinueasagoingconcern.
• Evaluatetheoverallpresentation,structureandcontentoftheconsolidatedandseparatefinancialstatements,includingthedisclosures,andwhethertheconsolidatedandseparatefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivitieswithinthegrouptoexpressanopinionontheconsolidatedfinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.
28
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Independent Auditor’s Report (continued)Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements. (continued)
• Wecommunicatewiththedirectorsregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.
Fromthematterscommunicatedwiththedirectors,wedeterminethosemattersthatwereofmostsignificanceintheauditoftheconsolidatedandseparatefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesematters inourauditor’s reportunless laworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicated inourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.
KPMG Zimbabwe
RegisteredAccountantsandAuditorsCharteredAccountants(Zimbabwe)
Per: ThembaMudidiPartnerRegisteredAuditorPAABPractisingCertificateNumber0437
21June2018
forandonbehalfof,KPMG Chartered Accountants (Zimbabwe), Reporting Auditors100TheChase(West)EmeraldHill,HarareZimbabwe
29
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Statements of Financial Positionas at 31 December 2017
Group Restated
Corporation
Note 2017 2016 2017 2016
ASSETS US$ US$ US$ US$
Non-current assets
Property,plantandequipment 6 91532269 97857458 111339 104951
Investmentproperties 7 3760000 3720000 - -
Intangibleassets 6.1 413 955 - -
Non-currentportionoflandheldforsale 10 13201910 13504313 - -
Investmentinsubsidiaries 8.1 - - 49514137 49408173
Investmentinassociates 8.2 18024312 16774747 12923804 12923804
Non-currentfinancialassets - 285299 - 1019588
Availableforsalefinancialassets 8.4 1548696 1079978 1261412 865152
________________ ________________ ________________ ________________
128067600 133222750 63810692 64321668
________________ ________________ ________________ ________________
Current assets
Inventories 9 15344877 15262954 - -
Tradeandotherreceivables 11 19884236 21258594 283673 40237
Groupbalancesreceivables 11a - - 2908152 1556185
Loansreceivable 16 - 7858 88673 219697
Non-currentassetsheldforsale 8.5 4048238 9571856 3808538 3609181
Cashandcashequivalents 12 14160513 11050965 34376 6240
________________ ________________ ________________ ________________
53437864 57152227 7123412 5431540
________________ ________________ ________________ ________________
________________ ________________ ________________ ________________
TOTAL ASSETS 181 505 464 190 374 977 70 934 104 69 753 208
________________ ________________ ________________ ________________
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 13 28517543 8344108 28517543 8344108
Waitingforallotment 13 - 20173435 - 20173435
Nondistributablereserve 13(b)(ii) 95118064 96456175 109034771 109034771
Revaluationreserve 13(b)(iii) 8465015 8342841 - -
Marktomarketreserve 248787 (223300) 248787 (211874)
Accumulated losses (102415149) (101597019) (106470493) (106008239)
________________ ________________ ________________ ________________
Equityattributabletoownersoftheparent 29934260 31496240 31330608 31332201
________________ ________________ ________________ ________________
Non-controllinginterests 8.7 13252517 13740555 - -
________________ ________________ ________________ ________________
Total equity 43 186 777 45 236 795 31 330 608 31 332 201
________________ ________________ ________________ ________________
30
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Statements of Financial Position (continued)as at 31 December 2017
Group Corporation
Restated
Note 2017 2016 2017 2016
LIABILITIES US$ US$ US$ US$
Non-current liabilities
Loansandborrowings 14.1 32631560 31219500 2900323 7136468
Deferredtaxliability 5 16848181 16416020 3153656 3649752
_____________ __________________ _______________ __________________
49479741 47635520 6053979 10786220
_____________ __________________ _______________ __________________
Current liabilities
Tradeandotherpayables 15 71200195 74498372 20200203 19631490
Liabilitiesheldforsale 8.5 550091 2897759 - -
Groupbalancespayables - - 1474103 751742
Loansandborrowings 14.2 14834335 18253336 11875211 7251511
Bankoverdrafts 12 364646 1169914 - 44
Currenttaxliability 1889679 683281 - -
______________ __________________ ______________ __________________
88838946 97502662 33549517 27634787
______________ __________________ ______________ __________________
Total liabilities 138 318 687 145 138 182 39 603 496 38 421 007
______________ __________________ ______________ __________________
______________ __________________ ______________ __________________
TOTAL EQUITY AND LIABILITIES 181 505 464 190 374 977 70 934 104 69 753 208
______________ _________________ ______________ _________________
……………………………….H.Nkala
……………………………….B.N.Kumalo
Chairman GeneralManager21June2018 21June2018
31
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Income Statementsfor the year ended 31 December 2017
Group Corporation
Note 2017 2016 2017 2016
US$ US$ US$ US$
Continuing operations
Revenue 3.1 101 444 224 74 848 568 711 774 662 120
Costofsales (72035258) (58583285) - -
_______________ _______________ _______________ _______________
Grossprofit 29 408 966 16 265 283 711 774 662 120
Otherincome 3.2 4012172 6069290 28872 787480
Sellinganddistributionexpenses (3473139) (5053414) - -
Administrationexpenses 3.3 (18157855) (20432975) (1613460) (1485303)
Netfinancecosts 3.4 (6213780) (7838002) (1217935) (2120615)
Investmentpropertyfairvaluegain 7 40000 (198822) - -
Shareoflossofequity-accountedinvestees
netoftax 8.2 (984386) (1634652) - -
Impairmentofassets (110781) (2567805) - -
Impairmentofinvestments - 2006 1031722 (6089235)
Otheroperatingexpenses 3.5 - (461198) - (461198)
Profit/(lossondisposalofinvestments) - - 884701 -
Gainonlossofcontrol 3.6 (1460975) 21605249 - -
Exchangeloss (701360) 1060381 (627875) 1111637
_______________ _______________ _______________ _______________
Profit/(loss)fromcontinuingoperations 2 358 862 6 815 341 (802 200) (7 595 114)
Incometaxcredit 4 (4764866) 877879 339946 (204900)
_______________ _______________ _______________ _______________
(Loss)/profitaftertax (2 406 003) 7 693 220 (462 254) (7 800 014)
_______________ _______________ _______________ _______________
Discontinued operations
Lossfromdiscontinuedoperations,netoftax 8.3 (111805) (640943) - -
_______________ _______________ _______________ _______________
(Loss)/profitaftertax (2 517 809) 7 052 277 (462 254) (7 800 014)
_______________ _______________ _______________ _______________
Attributable to:
Equityholders'interest (5827863) 7189315 (462 254) (7800014)
Non-controllinginterests 3310055 (137038) - -
_______________ _______________ _______________ _______________
(2 517 808) 7 052 277 (462 254) (7 800 014)
_______________ _______________ _______________ _______________
32
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Sta
tem
en
ts o
f o
the
r co
mp
reh
en
sive
in
co
me
for
the
ye
ar
en
de
d 3
1 D
ece
mb
er
20
17
Gro
up
Co
rpo
rati
on
No
te2
017
20
162
017
20
16
US
$U
S$
US
$U
S$
(Loss)/profitaftertax
(2 5
17 8
09
)7
05
2 2
77
(46
2 2
55
)(7
80
0 0
14)
Othercomprehensiveincome
--
--
Itemsthatwillnotbereclassifiedtoprofitorloss
Revaluationofproperty,plantandequipment-netoftax
6(a)
3900818
4605097
--
Itemsthatareormaybereclassifiedtoprofitorloss
Availableforsalefinancialasset-netoftax
8.4
460661
(11426)
460661
-
Oth
er
co
mp
reh
en
siv
e i
nco
me
/(lo
ss)
for
the
ye
ar
ne
t o
f ta
x4
36
1 4
79
4 5
93
67
14
60
66
1-
____
____
____
___
____
____
___
____
____
____
___
____
____
___
Totalprofit/(loss)fortheyearnetoftax
1 8
43
67
011
64
5 9
48
(1 5
94
)(7
80
0 0
14)
____
____
____
___
____
____
___
____
____
____
___
____
____
___
Attributableto:
Equityholdersoftheparent
(1466385)
11707469
(1594)
(7800014)
Non-controllinginterests
3310055
(61521)
--
____
____
____
___
____
____
___
____
____
____
___
____
____
___
1 8
43
67
011
64
5 9
48
(1 5
94
)(7
80
0 0
14)
____
____
____
___
____
____
___
____
____
____
___
____
____
___
33
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Sta
tem
en
t o
f ch
an
ge
s in
eq
uit
yF
or
the
ye
ar
en
de
d 3
1 D
ece
mb
er
20
17
Gro
up
W
ait
ing
No
nM
ark
to
No
n
Issu
ed
for
dis
trib
uta
ble
Re
valu
ati
on
mark
et
Accu
mu
late
dco
ntr
oll
ing
To
tal
cap
ital
all
otm
en
tre
serv
ere
serv
ere
serv
elo
sse
sT
ota
lin
tere
sts
eq
uit
y
US
$U
S$
US
$U
S$
US
$U
S$
US
$U
S$
US
$
Rest
ated
Bala
nce
as
at
1 Jan
uary
20
178
34
4 1
08
20
17
3 4
35
99
45
7 6
87
8 3
42
84
1(2
23
30
0)
(10
1 5
97
019
)3
4 4
97
75
213
74
0 5
55
48
23
8 3
07
Correctionoferror
--
(3001512)
--
-(3001512)
-(3001512)
Bala
nce
as
at
1 Jan
uary
20
17 –
Re
state
d8
34
4 1
08
20
17
3 4
35
96
45
6 1
75
8 3
42
84
1(2
23
30
0)
(10
1 5
97
019
)3
1 4
96
24
013
74
0 5
55
45
23
6 7
95
Lossfortheperiod
--
--
(5827863)
(5827863)
3310055
(2517808)
Othercomprehensiveincome
--
3361447
460661
-3822108
539371
4361479
Transfer(from)/toRevenueReserves
-(1980541)
(1545536)
-3526077
--
-
Lossofcontrol
-642430
(1693737)
11426
1483656
443775
(4137464)
(3693689)
-
Dividendspaid
--
--
--
(200000)
(200000)
Issueofnewshares
20173435
(20173435)
--
--
--
-
____
____
____
____
____
____
___
____
____
___
____
____
____
___
____
____
____
____
____
___
____
____
____
___
____
____
___
____
____
____
_
Bala
nce
at
31
De
ce
mb
er
20
172
8 5
17 5
43
-9
5 1
18 0
64
8 4
65
015
24
8 7
87
(10
2 4
15 1
49
)2
9 9
34
26
013
25
2 5
174
3 1
86
77
7
____
____
____
____
____
____
___
____
____
___
____
____
____
___
____
____
____
____
____
___
____
____
____
___
____
____
___
____
____
____
_
34
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Sta
tem
en
t o
f ch
an
ge
s in
eq
uit
y (
co
nti
nu
ed
)F
or
the
ye
ar
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de
d 3
1 D
ece
mb
er
20
17
Gro
up
(co
nti
nu
ed
)W
ait
ing
No
nM
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to
No
n
Issu
ed
for
dis
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uta
ble
Re
valu
ati
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mark
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Accu
mu
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dco
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oll
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To
tal
cap
ital
all
otm
en
tre
serv
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serv
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serv
elo
sse
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ota
lin
tere
sts
eq
uit
y
US
$U
S$
US
$U
S$
US
$U
S$
US
$U
S$
US
$
Bala
nce
as
at
1 Jan
uary
20
168
34
4 1
08
-9
9 4
57
68
718
110
36
6(2
11 8
74
)(1
09
713
65
8)
15 9
86
62
914
10
8 3
60
30
09
4 9
89
Profitfortheperiod
--
--
-7189315
7189315
(137038)
7052277
Othercomprehensiveincome
--
-6231429
(11426)
-6220003
(1626333)
4593670
-
Transfer(from)/toRevenue
Reserves
--
-(104435)
-208870
104435
(104434)
-
LossofControl
--
-(15894519)
718454
(15176065)
-(15176065)
-
ShareIssuetonon-controlling
inte
rest
--
--
--
-1500000
1500000
Awaitingissuefornewshares
-20173435
--
--
20173435
-20173435
____
____
____
____
____
____
___
____
____
___
____
____
____
___
____
____
____
____
____
____
___
____
____
___
____
____
____
___
____
____
___
Bala
nce
at
31
De
ce
mb
er
20
168
34
4 1
08
20
17
3 4
35
99
45
7 6
87
8 3
42
84
1(2
23
30
0)
(10
1 5
97
019
)3
4 4
97
75
213
74
0 5
55
48
23
8 3
07
____
____
____
____
____
____
___
____
____
___
____
____
____
___
____
____
____
____
____
____
___
____
____
___
____
____
____
___
____
____
___
Theopeningbalanceofthenon-distributablereservehasbeenrestatedrefertonote8.5forfurtherdetailontherestatement.
35
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Sta
tem
en
t o
f ch
an
ge
s in
eq
uit
y (
co
nti
nu
ed
) F
or
the
ye
ar
en
de
d 3
1 D
ece
mb
er
20
17
Co
rpo
rati
on
No
nM
ark
to
Wait
ing
fo
rd
istr
ibu
tab
leA
ccu
mu
late
dm
ark
et
Issu
ed
cap
ital
all
otm
en
tre
serv
elo
sse
sre
serv
eT
ota
l
US
$U
S$
US
$U
S$
US
$U
S$
Bala
nce
as
at
1 Jan
uary
20
178
34
4 1
08
20
17
3 4
35
109
03
4 7
71
(10
6 0
08
23
9)
(211
87
4)
31
33
2 2
01
Totallossfortheyear
--
(462254)
-(462254)
Othercomprehensiveincome
--
-460661
460661
Awaitingissuefornewshares
20173435
(20173435)
--
--
____
____
____
____
____
____
___
____
____
____
____
____
____
____
____
____
___
____
____
___
At
31
De
ce
mb
er
20
172
8 5
17 5
43
-10
9 0
34
77
1(1
06
47
0 4
93
)2
48
78
73
1 3
35
56
3
____
____
____
____
____
____
___
____
____
____
____
____
____
____
____
____
___
____
____
___
Bala
nce
as
at
1 Jan
uary
20
168
34
4 1
08
-10
9 0
34
77
1(9
8 2
08
22
5)
(211
87
4)
18 9
58
78
0
Lossfortheperiod
--
(7800014)
-(7800014)
Awaitingissuefornewshares
-20173435
--
-20173435
____
____
____
____
____
____
___
____
____
____
____
____
____
____
____
____
___
____
____
____
At
31
De
ce
mb
er
20
168
34
4 1
08
20
17
3 4
35
109
03
4 7
71
(10
6 0
08
23
9)
(211
87
4)
31
33
2 2
01
____
____
____
____
____
____
___
____
____
____
____
____
____
____
____
____
___
____
____
____
36
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
StatementsofcashflowsFor the year ended 31 December 2017
Group Corporation
2017 2016 2017 2016
Note US$ US$ US$ US$
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss)beforetax 2247057 6174398 (802200) (7595114)
-'fromcontinuingoperations 2358862 6815341 - -
-'fromdiscontinuedoperations (111805) (640943) - -
Adjustmentsfor:
-Exchangegains/(losses) 701360 (1060381) 627875 (1111637)
-Depreciationonproperty,plantandequipment
6 3770536 3979892 13104 23236
-Impairmentlosses/otherexpenses 110781 2567805 (692068) 6550433
-Amortisationofintangibleassets 542 3075 - -
-Dividendreceived - - - (651093)
-Netfinancecosts 3.4 6213780 7838002 1217935 2120615
-(Profit)/lossondisposalofplant&equipment/other
18825 397680 (949102) -
-Provisionforcreditlosses:external 11 (344276) 77315 - -
:Intercompanybalances - - - -
-Intercompanybalanceswrittenoff - - - -
-Gainonlossofcontrolofsubsidiaries 1460975 (21605249) - -
-Shareofprofit/(loss)ofassociates 8.3 984386 1634652 - -
-Fairvalueadjustmentonfinancialassetsatfairvalue
throughprofitandloss (40000) - - -
-Fairvalueadjustmentoninvestmentproperty
- 198882 - -
__________ __________ __________ _________
Operatinggain/(deficit)beforeworking capital changes
15 123 966 206 071 (584 456) (663 560)
Working capital adjustments
Decrease/(increase)ininventories (81924) 10865585 - -
Decrease/(increase)intradeandotherreceivables
1718634 (220166) (1464378) 3049084
Decreaseinfinancialassetsthroughprofitand loss
- - - -
Increase/(decrease)intradeandotherpayables
(3298178) 24459776 (309754) 1594168
__________ __________ __________ _________
Cash from operating activities 13 462 498 35 311 266 (2 358 589) 3 979 692
Taxationpaid (3072022) (541502) (156151) (55901)__________ __________ __________ _________
Netcashflowsusedinoperatingactivities
10 390 476 34 769 764 (2 514 739) 3 923 791
__________ __________ __________ _________
37
IDCZ | ANNUAL REPORT 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORTFOR THE YEAR ENDED 31 DECEMBER 2017
TWENTY|17
IDCZ ANNUAL REPORT
Statementsofcashflows (continued)For the year ended 31 December 2017
Group Corporation
2017 2016 2017 2016
Note US$ US$ US$ US$
INVESTING ACTIVITIES
Purchasesofproperty,plantandequipment 6 (2702805) (1863608) (31858) (5650)
Proceedsorloansfrom/toassociates 7858 2347915 - -
(Purchases)/Saleofinvestments - - 1958979 184600
(Increase)/Decreaseinnon-currentportionofland
heldforsale 302403 (433961) - -
(Increase)/Decreaseinnon-currentassetsheldforsale 5216572 (12008306) - -
(Increase)/Decreaseinliabilitiesheldforsale (2347668) 1511163 - -
Proceedsondisposalofproperty,plantandequipment 765571 161649 - 134
Proceedsoninvestmentproperty - 2150000 - -
Dividendreceived
Recommended