CAFCA LIMITED - Audited Abridged Financial Results for the year ended 30 September 2016

Release Date: 18/11/2016 12:30
Code(s): CAC
 
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Audited Abridged Financial Results for the year ended 30 September 2016

Cafca Limited
Share Code: CAC
ISIN Code: ZW0009011942

Notice To Shareholders

Audited Abridged Financial Results for the year ended 30 September 2016

All figures are in United States Dollars


                                                          30 SEPT 2016       30SEPT 2015


STATEMENT OF COMPREHENSIVE INCOME
Revenue                                                    18,148,818        29,310,805
Operating profit                                              757,196         2,445,067
Finance income                                                      -            10,009
Finance cost                                                  (79,168)           (2,733)
Profit before income tax                                      678,028         2,452,551
Income tax expense                                           (259,424)         (656,027)
Profit for the year                                            418,604        1,796,524
Other comprehensive income:                                     -                 -
Total comprehensive income for the year                        418,604        1,796,524




Issued Ordinary Shares (weighted) (number)                 32,830,666        32,770,666
Basic Earnings per share (cents)                                1.28              5.48
Diluted Earnings per share(number)                         33,459,000        33,459,000
Diluted Earnings per share (cents)                               1.25              5.37
Headline earnings per share(number)                       32,830,666        32,770,666
Headline earnings per share(cents)                             1.25              5.48




STATEMENT OF FINANCIAL POSITION                           AT 31 SEPT 2016   AT 31 SEPT 2015
ASSETS                                                $              $
Non-Current Assets
Property ,plant and equipment                      3,246,265       3,416,831
Available for sale financial assets                   18,540          18,540
Total non current assets                           3,264,805       3,435,371

Current assets
Inventories                                        8,307,412       9,540,613
Trade and other Receivables                        3,410,419       5,320,445
Cash and cash equivalents(excluding overdraft)     1,473,598          49,508
Total Assets                                      16,456,234      18,345,937


Equity attributable to owners of the parent
Share Capital                                             328            328
Share premium                                        169,281         138,081
Share option reserve                                   5,300          57,733
Retained earnings                                 14,535,256      14,115,652
Total Equity                                      14,709,165      14,311,794


LIABILITIES
Non-current liabilities

Deferred income tax liabilities                    682,411         624,882

Current liabilities
Trade and other payables                           828,242        2,480,976
Provisions                                         236,416          221,537
Bank overdraft                                           -          680,523
Current tax liabilities                                  -           26,225
Total liabilities                                1,747,069        4,034,143

Total equity and liabilities                     16,456,234       18,345,636




STATEMENT OF CHANGES IN EQUITY
                                                  Share Capital   Share Premium   Share Option   Retained
                                                                                  reserve        earnings   Total
                                                                $             $                 $          $            $
Balance at 1 October 2014                                       326           87,699            61,722     12,139,864   12,269,611
Transfer of non-distributable reserve
Transaction with owners:
Issue of shares                                                 2              12,398           -              -            12,400
Share options                                                   -              37,984           16,011                      53,995
Total comprehensive income for the year                         -             -                 -          1,796,524     1,796,524
Net profit for the year                                         -             -                 -          1,796,524     1,796,524
Reversal of impairment loss                                     -             -                 -            179,264       179,264
Other comprehensive income for the year                         -             -                 -          -             -
Balance at 30 September 2015                                    326           138,081           57,733     14,115,652   14,311,794



Balance at 1 October 2015                                       326           138,081           57,733     14,115,652   14,311,794
Transaction with owners:
Issue of shares                                                  -             7,200            -               -          7,200
Share options                                                    -            24,000            (52,433)        -        (53,433)
Total comprehensive income for the year                          -              -               -            418,604      418,604
Profit for the period                                            -              -               -            418,604      418,604
Other comprehensive income for the year                          -              -               -               -            -
Balance at 30 September 2016                                    328           169,281             5,300    14,534,256   14,709,165



STATEMENT OF CASH FLOWS

                                                        30 September 2016   30 September 2015
Profit before income tax                                 678,028             2,452,551
Depreciation                                                   319,269               310,037
Share based payment                                          (28,433)               53,995
Profit on sale of property plant,
and equipment                                                9,108)               (27,109)
Finance income                                                 -                  (10,009)
Finance costs                                                79,168                 2,733
Allowance for impairment of trade receivables              (39,771)             (135,369)
Working capital changes:
(Decrease)/Increase in inventories                        1,188,884              (2,327,155)
(Decrease)/increase in trade and other receivables        2,033,683              (1,877,880)
Decrease/increase in trade and other payables            (1,652,734)                779,592
Increase/(decrease)in other liabilities and charges         (14,879)                779,592
Net cash generated from/(utilised in)operations            2,638,695              (842,185)

Tax paid                                                  (312,205)               (675,063)
Finance costs                                              (79,168)                 (2,233)
Finance income                                              -                       10,009
Net generated from/(utilised in) operating activities    2,247,323              (1,509,972)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property ,plant and equipment              (173,684)             (415,275)
Proceeds from sale of property,plant and equipment          23,774                34,050
Net cash utilised in investing activities                 (149,910)             (381,225)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital                      7,200                    12,400


Net increase/(decrease) in cash and cash equivalents     2,104,613               (1,878,797)
Cash and cash equivalents at the beginning of the year    (631,015)               1,247,782
Cash and cash equivalents at the end of year             1,473,598                (631,015)




NOTES THE FINANCIAL STATEMENTS
1.The principal accounting policies of CAFCA Limited (the “Company “), have been followed in all material respects and conform to International
Financial Reporting Standards(IFRS) and in the manner required by Zimbabwe Companies Act(Chapter 24:03).

This publication should be read in conjunction with financial statements for the year ended 30 September 2016,which have been prepared in
accordance with IFRSs and IFRS Interpretations Committee (“IFRS IC” ) Interpretations, applicable to companies reporting under IFRS and in the
manner required by the Zimbabwe Companies Act(Chapter 24:03)


2. The auditors, PricewaterhouseCoopers, have audited the financial statements of the Company for the year ended 30 September 2016.The report
contained in the financial statements, which is available at the Company’s registered office, is unqualified.


3.The financial statements are presented in United States Dollars which is the functional currency of the Company.

4 Scheme of reconstruction
A scheme of reconstruction was approved by the board of directors on 22 September 2015, and the Zimbabwe Revenue Authority
("ZIMRA") with effect from 9 March 2016, involving a transfer of assets and liabilities previously held in BICC Central Africa (Private)
Limited (the "Subsidiary") to the holding company CAFCA Limited (together the “Group”). As a result of the scheme of reconstruction
BICC Central Africa (Private) Limited is now a dormant company and CAFCA Limited (the "Company") is now the operating company.
The financial statements are no longer prepared on a consolidated basis.

5 Common control transactions
A combination involving entities or businesses under common control is a business combination in which all of the combining entities
or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control
is not transitory and is excluded from the scope of IFRS 3, 'Business Combinations'. The Directors made a policy choice to use
predecessor accounting for common control transactions.

No assets or liabilities are restated to their fair values. Instead, the acquirer incorporates predecessor carrying values. These are the carrying
values that are related to the acquired entity. They are generally the carrying amounts of assets and liabilities of the acquired entity
from the consolidated financial statements of the highest entity that has common control for which consolidated financial statements
are prepared. These amounts include any goodwill recorded at the consolidated level in respect of the acquired entity. If no
consolidated financial statements are produced, the values used are those from the financial statements of the acquired entity.

The acquired entity's results and statement of financial position are incorporated retrospectively from the date on which the business
combination between entities under the same control occurred. Consequently, the financial statements do reflect the results of the
acquired entity for the period before the transaction occurred. The corresponding amounts for the previous year are also not restated.


6.Related party transactions
Reunert Electrical Engineering (Proprietary)Limited owns 71% of the company and the remaining 29% are widely held.
The following transactions were carried out with related parties:


                                                                          30 September        30 Septermber
                                                                              2016               2015
(i)Purchases during the period from the holding company:
   CBI-Electric African Cables                                                   238,143          5,184,645
   CBI-Electric Aberdare/ATC Telecoms Cable(Proprietary) Limited                  14,386            180,325

Sales :-
 CBI-Electric African Cables                                                             -        3,630,226


 (ii)There were no loans made to directors or management during the
     year.(2015:US$)

(iii)Year end balances arising from purchase of goods/services:
 Payables to related parties:
 CBI-Electric African Cables                                                             -          576,686


(iv)Key management remuneration:
 Key management includes directors(executive and non-executive)
 and members of the executive committee
Salaries and short term benefits                                                 411,598          416,290
Share options credit                                                              (28,433)         53,995
Director’ emoluments
-Fees                                                                            90,270            76,114

  Total                                                                          473,435          546,399

7.Segmentation information

  The executive management team is the Company’s chief operating decision maker. Management has determined the operating segments based on
reports reviewed by the executive team that are used to make strategic decisions. The Company has one product line, and operates in one industry
sector.

Revenue is primarily from customers who are domiciled in Zimbabwe and revenue from exeternal customers pertains mainly to customers domiciled in
South Africa,Zambia,Malawi and Mozambique.

Revenue analysis

                                                                 30 September 2016   30 September 2015

                   Revenue for customers domiciled in Zimbabwe      16,257,021               23,801,710

                   Revenue from external customers                   1,891,797                5,509,095

                                                                    18,148,818               29,310,805
Revenue from transactions with single and local customers that amount to 10% of more each of the Group’s revenues , equal approximately
$6,007,571(2015 $12,406,957).These revenues are attributable to customers domiciled in Zimbabwe. The breakdown of the major component of the
total revenue from three major customers of least 10% is as follows:

                                                             30 September 2016    30 September 2015

                                      Energy Transmission       6,007,571              12,406,957



The total of non-current assets located in Zimbabwe is $3,264,805 (2015:$3,435,371) and there are no non-current assets located in other
countries.

The segment information provided to the executive team for the product reportable segments for the year ended 30 September are as follows:

                                                             30 September 2016    30 September 2015

Revenue from customers                                           18,148,818           29,310,805

Profit before interest and taxation                                 678,028            2,445,275

Net finance income                                                     -                  10,009

Finance cost                                                     (79,168)               (2,733)

Income tax expense                                                259,424                656,027

Total assets                                                    16,456,233            18,345,937

Liabilities                                                      1,747,069             4,034,143



                                                              30 September 2016    30 September 2015

8.Property plant and equipment

  Capital expenditure                                                173,684               415,275

  Depreciation                                                       310,038               254,441


COMMENTARY AND OVERVIEW OF RESULTS

In response to the anticipated drop in both local and export sales, the strategy for the year was to re-engineer the company from 300 ton a month
capacity to 200 ton a month capacity by dropping costs from $700 000 to $500 000 per month. This was done successfully and the reduction in
working capital resulted in a turnaround in borrowings from a net borrowed position of $680 523 to a net positive bank balance of $1 473 583.

Turnover dropped significantly from $29.3 million to $18.1 million mainly due to the reduction locally in the barter deal with ZESA and no
exports to South Africa.

Pretax profit dropped to $678 028 from $2 452 551 due to the 38% drop in turnover which moved the company towards break even turnover.
The company is well placed to respond to any improvements in our market either local or export – we have funds available and good stockholdings
to ensure quick response to inquiries. The current operating model is sustainable though at these turnover levels only a moderate profit will be
achieved.


Dividend

The Directors do not recommend paying out the cash generated as a dividend at this time due to the need to secure the long term viability of the
company against the background of continued increasing uncertainties in the market and the need to finance raw materials as and when foreign
exchange is made available.



C Kangara
Company Secretary
18 November 2016

Directors: H.P. Mkushi (Chairman) R.N. Webster (Managing)
E.T.Z Chidzonga P.E De Villiers G.Eddey A.E. Dickson A. Mabena S.E Mangwengwende G.J.H Steyn T.A Taylor

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