RNS Number:9111W
NMBZ Holdings Ld
25 March 2004
NMBZ HOLDINGS LIMITED
Holding company of
NMB Bank Limited (Registered Commercial Bank)
and
Continental Securities Trading (Private) Limited
AUDITED INFLATION ADJUSTED AND HISTORICAL RESULTS FOR THE YEAR ENDED 31 DECEMBER
2003
HIGHLIGHTS
2003 2002
Z$ million Z$ million Change %
Historical attributable profit 16 115 9 556 +69
Inflation adjusted operating expenditure from
continuing operations 47 842 53 943 -11
Historical basic earnings per share (cents) 3 981 2 629 +51
Historical dividend per share (cents) 943 634 +49
Mr Paddy Zhanda, Chairman of NMBZ Holdings, said:
"The Group's results reflect the challenging and turbulent economic conditions
which the Group faced. Strategic initiatives are underway to harness growth
opportunities in the coming year in order to ensure growth and competitive
advantage in our target markets".
Enquiries:
NMBZ HOLDINGS LIMITED Tel: +263-4-759 651/9
David T Hatendi, Acting Managing Director davidh@nmbz.co.zw
Mario dos Remedios, Acting Finance Director mariodosr@nmbz.co.zw
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
COLLEGE HILL - LONDON
Corinna Dorward/Matthew Gregorowski Tel: +44-207-457-2020
CHAIRMAN'S STATEMENT
The country's economy continued its downward spiral in 2003 and recorded its
fifth successive year of economic decline. The year under review was
characterized by:
* Decline in Gross Domestic Product (GDP)
* Hyperinflation and high money supply
* High domestic debt
* Weak Balance of Payments (BOP) position
* Foreign currency shortages
* Cash shortages
Positive factors during the year were:
* Improved concessionary financing for exporters and producers
* New Monetary Policy Statement
ECONOMIC REVIEW
Decline in GDP
Real GDP declined by 3.7% in 1999, 5% in 2000, 7.5% in 2001, 14.5% in 2002 and
is forecast to decline by 13.2% in 2003. Major reductions in GDP are expected in
transport and communication (13.5%), distribution (12.5%), manufacturing
(12.5%), and construction (9.5%).
Hyperinflation and high money supply
The country recorded runaway levels of inflation during 2003 emanating from
shortages of basic commodities, alternative market activities, energy price
increases, a loose monetary policy, general contraction in economic activity and
indexation. Year-on-year inflation, which closed the previous year at 198.9%,
rose to 364.5% by June 2003, reaching an all time peak of 619.5% in November
2003 before easing to 598.7% by December 2003. Inflation is expected to remain
high in 2004 but is expected to follow a declining trend with the Reserve Bank
of Zimbabwe (RBZ) targeting an inflation rate of 175% - 200% by December 2004,
double-digit inflation by 2005 and single-digit levels by 2008.
Broad money supply (M3), which closed the year 2002 at 164.8%, increased to
303.4% year-on-year to July 2003 as a result of increases in credit to the
private sector and government. Broad money supply growth is expected to end
2003 at 500% and is expected to decelerate to 200% by the end of 2004.
High domestic debt
Domestic debt, which stood at Z$346 billion in December 2002, rose to
approximately Z$600 billion by December 2003. The debt is dominated by Treasury
Bills (mainly 2 year paper), which account for 97.5% of the total debt while
government bonds account for the balance of 2.5%. The government intends to
further restructure the domestic debt in 2004 by issuing more long-dated
instruments. The budget deficit is expected to reach Z$1.83 trillion in 2004 and
domestic debt is set to end the year at about Z$2.4 trillion.
Weak Balance of Payments (BOP) position
The country's BOP position remained precarious in 2003 largely as a result of
poor export performance coupled with the absence of external capital inflows.
Exports of goods and services are estimated to have fallen by 3.9% from US$1 603
million in 2002 to US$1 540 million in 2003. Imports of goods and services fell
less steeply from US$2 634 million in 2002 to US$2 618 million in 2003. The
country is estimated to have recorded a current account deficit of US$1 130
million, slightly up from US$1 044 million in 2002.
The capital account deficit is estimated to have declined from US$345 million in
2002 to US$309 million in 2003.
The overall balance of payments deficit for 2003 was therefore US$1 439 million.
Against the background of the weak balance of payments position,gross official
foreign currency reserves for 2003 are estimated at US$175 million, which
represent approximately one month of imports, while usable reserves were much
lower at just under US$40 million.
The country's total external payment arrears continued to rise in 2003. As of
December 2003, external payment arrears were estimated at about US$1.8 billion,
up from US$1.3 billion at the end of December 2002. A breakdown of the external
arrears shows that Government arrears account for the largest portion at $1.2
billion (67%) while parastatals and the private sector account for US$558
million (31%) and US$15 million (2%) respectively.
Foreign Exchange Market and Exchange Rate Policy
The new Monetary Policy Statement introduced significant changes in the foreign
currency market. Exporters are now required to surrender 50% of their receipts
immediately on receipt and of this amount half (i.e. 25% of the total), will be
sold to the RBZ at the official rate of Z$824 to the US dollar and the other
half will be auctioned at the newly introduced foreign currency auction market.
The exporter retains the remaining 50% of the export proceeds in a foreign
currency account (FCA) to meet the exporter's own foreign currency requirements
and if unused after 21 days, the unutilised funds in the FCA will be sold at the
auction.
The continued viability of the new controlled foreign currency auction system
hinges on a strong supply of foreign currency to the market.
Cash Shortages
The first nine months of 2003 saw the emergence of serious cash shortages in the
economy due to a combination of the ever-rising inflation and alternative market
activities. The shortage of cash led to a serious loss of production time as
people spent long hours queuing for cash.
The cash problems were temporarily relieved when government introduced bearer
cheques in September 2003 and a new one thousand dollar note in October 2003.
The bearer cheques have been well received by the general public. In order to
come up with a long-term solution to the cash problems, there is an urgent need
for government to replace bearer cheques with higher denomination notes and a
vigorous promotion by banks of the use of plasticand electronic means of
payment settlement.
Improved concessionary financing facilities for exporters and producers
The Export and Productive Sector Financing facilities, introduced at the
beginning of 2001, were extended by the RBZ in the new Monetary Policy
statement. The facilities include the release of bank's statutory reserves for
on lending to exporters and other producers in mining, manufacturing,
agriculture, construction and tourism at 30% per annum. The policy thrust has
provided significant relief to the beneficiaries.
Monetary policy and interest rates
The Monetary Policy Statement issued in November 2002 largely guided monetary
policy interventions in 2003. In line with this policy, the Reserve Bank of
Zimbabwe pursued a dual interest rate policy designed to encourage productive
and export sector activities while at the same time discouraging consumption and
speculative activities. Despite the rise in interest rates, the gap between
inflation and interest rates remained high resulting in substantially high
negative real interest rates.
The new RBZ Governor ushered in a new Monetary Policy regime on 18 December 2003
whose primary objectives are to cut inflation to below 200% by December 2004,
stabilize the foreign exchange rate and maintain a sound financial system in the
country. The central bank's ability to reduce inflation through monetary policy
interventions will depend on a strong supply response in 2004 and the ability of
the authorities to maintain sufficiently tight monetary and fiscal policies.
Inconsistencies between monetary and fiscal policies have traditionally
undermined the effectiveness of monetary policy in the past.
Economic Outlook
It is encouraging to see that stakeholders are realising the need to resolutely
implement economic policies that will turn around the economy. To return to a
growth and recovery path, the following key factors are pertinent;
* Containment of money supply growth and runaway inflation.
* Restoration of relationships with the international financial
community.
We remain optimistic that, given the right economic policies and a national
passion and pride to succeed,the country will return to a growth path.
GROUP INFLATION ADJUSTED RESULTS
Introduction
In accordance with International Financial Reporting Standards (IFRSs)
promulgated by the International Accounting Standards Board (IASB), the Group
continues to prepare its results using hyperinflationary accounting with
historical results being provided as a supplement. Unless otherwise stated,
figures in this statement are inflation adjusted.
The hyperinflationary conditions affected earnings resulting in the Group
posting an inflation adjusted attributable loss of Z$28 538 million.
Compliance with International Accounting Standards
The existence of hyperinflation as defined by International Accounting Standard
(IAS) 29 was formally identified in Zimbabwe by the Zimbabwe Accounting
Practices Board, which decided that IAS 29 would be applied for financial
periods beginning on or after 1 January 2000. Consequently, these results have
been prepared in compliance with IAS 29, which requires the adjustment of the
financial statements on the basis of the inflation indices over the reporting
period, and a restatement of prior year comparative figures.
Loss before taxation
Inflation adjusted loss before taxation from continuing operations increased
from a profit of Z$94 269 million to a loss of Z$12 739 million during the
period under review. Loss before taxation from discontinuing operations
increased from a profit of Z$886 million to a loss of Z$3 021 million.
Attributable profits
The Group recorded an inflation adjusted attributable loss of Z$28 538 million
over the adjusted result for the same period last year.
Net interest income
Net interest income from continuing operations decreased by 36% to Z$98 877
million from Z$154 213 million. The decrease was primarily a result of decreases
in income from lending and investing activities.
Non-interest income
Non-interest income from continuing operations decreased by10% and contributed
8% (2002 - 6%) of the net operating income from continuing operations.
Operating expenses
Operating expenses from continuing operations decreased by 11% over the same
period last year and operating expenses from discontinuing operations increased
by 44%. The decrease in the operating expenses from continuing operations was
driven by a reduction of 36% in staff costs which was partly offset by IT
related administration expenditure.
Loss on net monetary position
The loss on net monetary position occurs as a result of the restatement of
amounts to current value. The loss of Z$84 891 million from continuing
operations and that of Z$2 870 million from discontinuing operations is based on
the inflationindex as provided by the Central Statistical Office of Zimbabwe.
The loss has been charged to income in accordance with the International
Accounting Standard 29 "Reporting in Hyperinflationary Economies".
Bad and doubtful debts
A conservative approach continues to be taken with respect to provisions for bad
and doubtful debts, although on an inflation adjusted basis a marginal decrease
in the provisions from Z$8 161 million in the previous year to Z$7 209 million
was recorded
Dividend
A final dividend of 510 cents per share has been proposed, bringing the total
historical dividend for the year to 943 cents per share, an increase of 49% from
the position at 31 December 2002.
BALANCE SHEET
Growth in Asset Base
The Group's total asset base decreased by 45% from Z$622 016 million at 31
December 2002 to Z$339 997 million. The decrease was mainly caused by a
reduction in balance with banks and cash (51%), financial assets held for
trading (69%), quoted and other investments (93%), advances and other accounts
(26%) and Customer's indebtedness for acceptances (93%). These were however
offset by a slight increase in property and equipment (34%).
The movement is consistent with the Group's strategy in the current economic
environment.
Capital adequacy
The banking subsidiary's capital adequacy ratio at 31 December 2003 calculated
on the historic cost basis in accordance with the guidelines of the Reserve Bank
was 14.51 %, (31 December 2002 - 14.14%). The minimum required by the Reserve
Bank of Zimbabwe is 10%.
Share buy back
The directors were authorised at the Annual General Meeting held on 20 May 2003
to repurchase up to 56 million shares for cancellation. No shares were
repurchased for cancellation for the period to 31 December 2003.
Own equity instruments
Own equity instruments previously reflected in the financial statements were
sold to offshore investors unrelated to the Group in the period underreview.
Further information is set forth at note 13.4.
CONTINENTAL SECURITIES TRADING (PRIVATE) LIMITED
A decision was taken to dispose of the Group's interest in Continental
Securities Trading (Private) Limited (CST). A Memorandum of Understanding was
signed with the purchaser in November 2003 and the transfer of the shareholding
to the new owners was with effect from 1 January 2004. The subsidiary
contributed negatively to Group attributable profit.
THE ZIMBABWE STOCK EXCHANGE (ZSE)
The number of listed companies was 82 at the end of 2003. The total market
capitalisation during the period grew by 382% in Zimbabwe dollar terms to close
the year at Z$4 177.3 billion.
Trading in the company's shares was suspended from 7 July 2003 to 9 July 2003.
The suspension was lifted after the ZSE was provided with certain assurances
regarding the transaction referred to at note 13.4 and possible breaches of the
ZSE listing requirements.
FOREIGN EXCHANGETRADING LICENCE
The Bank's foreign exchange trading licence was withdrawn by the Central Bank
for a period of twelve months with effect from 14 August 2003. The licence was
restored on 30 January 2004 after an appeal to the Authorities.
OUTLOOK AND STRATEGY
The first half of 2004 will be a difficult period for business and we anticipate
that the second half of 2004 will be less demanding as the effects of economic
stakeholders' cooperation start to take root. Runaway inflation,shortages of
foreign currency and a deteriorating balance of payments (BOP) position will
continue to affect the economy.
We will open a few commercial branches in strategic areas in the first half of
the year coupled with a consolidation of the existing operations. The growth of
non-funded income will continue to be a strategic imperative and initiatives are
underway to buttress this growth.
POST BALANCE SHEET EVENT
On Monday 23 February 2004, the Zimbabwe Republic Police served a notice on the
Bank concerning investigations on allegations of breaches of the Exchange
Control Act and Regulations involving two UK companies, LTB Money Transfers and
LTB Finance House. As pointed out in a notice to shareholders dated 3 March
2004, neither company is a subsidiary of the Bank and the Bank is not a
shareholder in either company. On Friday 27 February 2004, the police sought to
interview the four executive directors but they were unavailable. The Bank is
co-operating fully with the authorities and is working to achieve a speedy
resolution to this matter.
DIRECTORS, MANAGEMENT AND STAFF
In this difficult year, management and staff have shown their continued
dedication and commitment to delivering value. On behalf of the Board, and the
company's shareholders, I would like to convey my sincere appreciation to the
non-executive directors, the Managing Director, executive directors, management
and staff.
The board resolved to appoint Mr Freeman T Kembo as non-executive director on 25
November 2003 and I would like to welcome him to the board. Dr C J Constable
resigned from the board effective 1 January 2004. I would like to place on
record our thanks to Dr Constable for his contribution over the years. On 24
February 2004, the Board appointed Dr Gibson N Mandishona as a non-executive
director and I would like to welcome him to the board.
Effective 1 March 2004, the board appointed as executive director Dr David T
Hatendi andresolved to appoint Dr Hatendi and Mr Mario L dos Remedios in the
roles of acting Managing Director and acting Finance Director respectively until
the current investigations involving the four executive directors have been
finalised. I would particularly like to welcome Dr Hatendi to the bank and thank
both gentleman for their agreement to take on this task.
PADDY TENDAYI ZHANDA
CHAIRMAN
23 March 2004
RESPONSIBILITY
These financial statements are the responsibility of the directors. This
responsibility includes the setting up of internal control and risk management
processes, which are monitored independently.
CORPORATE GOVERNANCE
The Group adheres to principles of corporate governance derived from the King
Reports and the United Kingdom Combined Code. The group is cognisant of its
duty to conduct business with due care and in good faith in order to safeguard
all stakeholders' interests.
BOARD OF DIRECTORS
Board appointments are made to ensure a variety of skills and expertise on the
Board. Non-executive directors are of such calibre as to provide independence
to the Board. The Chairman of the Board is a non-executive director. The Board
is supported by various committees in executing its responsibilities. The Board
meets at least quarterly to assess risk, review performance and provide guidance
to management on both operational and policy issues.
GOING CONCERN
The Group financial statements are prepared on a going concern basis. In the
opinion of the directors, the group's business is sound and adequate resources
exist to support this basis.
RISK MANAGEMENT
In the ordinary course of business the group manages risks of all forms
especially operational, market, liquidity and credit risks. These risks are
identified and monitored through various channels and mechanisms. The risk
management department, headed by a General Manager reporting to the Chief
Executive, is responsible for the management of the overall risk profile.
The Group's main objective is to contain the risks inherent within the financial
services sector and to ensure that the Group's various risk profiles are
understood and appropriately managed to the benefit of customers, stakeholders
and shareholders.
Operational risk
This risk is inherent in all business activities and is the potential for loss
arising from ineffective internal controls, poor operational procedures to
support these controls, errors and deliberate acts of fraud. The balancing of
the risk and the cost incurred to reduce the risk is critical. The board has an
Audit Committee whose function is to ensure that this risk is minimised. The
Audit Committee through the internal audit function assesses the adequacy of the
internal controls and makes the necessary recommendations to the Board.
Market risk
This arises from adverse movements in the marketplace, which occur in the money
(interest rate risk), foreign exchange and equity markets in which the group
operates. The group has in place an Asset and Liability Management Committee
(ALCO), which comprises the departmental heads of Risk, Treasury, Corporate and
Retail banking, Internal Audit and Finance, inaddition to executive directors.
The committee monitors these risks and recommends the appropriate levels to
which the group should be exposed at any time. The approval of all dealing
limits ultimately rests with this committee.
Liquidity risk
The management of liquidity in the group is primarily designed to ensure that
the group meets its obligations timeously. The Treasury department in
consultation with ALCO formulates and applies appropriate investment methods and
instruments toensure that this is achieved. In pursuance of the management of
this risk, the Risk management department periodically reports on facility
utilisations and excesses that need management attention.
Credit risk
The Board has put in place sanctioning committees which operate according to the
amount requested by an applicant. The risk management department reviews all
applications. This initial review allows only those applications that do not
unduly expose the group to be considered by the sanctioning committees.
The directors are happy with the risk management processes in the Bank as these
have contributed to the minimization of losses arising from risk exposures
INCOME STATEMENTS
INFLATION ADJUSTED HISTORICAL
Restated
Note 2003 2002 2003 2002
CONTINUING OPERATIONS Z$ million Z$ million Z$ million Z$ million
Interest from lending activities 92 585 104 260 49 127 9 911
Income from investing activities 68 083 136 374 33 010 16 711
--------------- ------------ ----------- ------------
160 668 240 634 82 137 26 622
Interest expense 5 (61 791) (86 421) (38 221) (8 154)
--------------- ------------ ----------- ------------
Net interest income 98 877 154 213 43 916 18 468
Net foreign exchange gains 16 005 29 061 5 646 1 016
Non-interest income 6 10 292 11 439 3 222 1 449
--------------- ------------ ----------- ------------
Net operating income 125 174 194 713 52 784 20 933
Operating expenditure 7 (47 842) (53 943) (16 805) (3 902)
Charge for bad and doubtful debts (5 180) (8 161) (5 180) (1 168)
Loss on net monetary position (84 891) (38 340) - -
--------------- ------------ ----------- ------------
(Loss)/profit before taxation (12 739) 94 269 30 799 15 863
Taxation 8 (10 934) (53181) (12 615) (5 505)
Financial institutions levy 8 (1 594) (4 968) (1 594) (711)
--------------- ------------ ----------- ------------
(Loss)/profit from continuing operations (25 267) 36 120 16 590 9 647
--------------- ------------ ----------- ------------
DISCONTINUING OPERATIONS
Trading income 6 200 6 792 2 232 244
Operating expenditure (4 322) (3 005) (728) (273)
Charge for bad and doubtful debts (2 029) - (2 029) -
Loss on net monetary position (2 870) (2 901) - -
--------------- ------------ ----------- ------------
(Loss)/profit before taxation (3 021) 886 (525) (29)
Taxation (250) (266) 50 (149)
--------------- ------------ ----------- ------------
(Loss)/profit from discontinuing operations (3 271) 620 (479) (178)
--------------- ------------ ----------- ------------
Total (loss)/profit from operations from
operations before minority interest (28 538) 36 740 16 115 9 469
Minority interests - 887 - 87
--------------- ------------ ----------- ------------
(Loss)/profit attributable to ordinary
shareholders (28 538) 37 627 16 115 9 556
--------------- ------------ ----------- ------------
Earnings per share (cents)
- Basic (7 050) 10 351 3 981 2 629
- Headline (7 643) 10 301 3 764 2 625
- Diluted basic (6 681) 10 332 3 773 2 624
- Diluted headlines (7 243) 10 282 3 567 2 620
Dividend per share (cents) 1 316 5 017 943 634
BALANCE SHEETS INFLATION ADJUSTED HISTORICAL
Restated
Note 2003 2002 2003 2002
SHAREHOLDERS' FUNDS Z$ Z$ Z$ Z$ million
million million million
Share capital 13 18 670 18 580 107 91
Capital reserves 40 657 38 871 683 51
Revenue reserves 644 24 449 23 028 8 778
----------- ------------ ---------- ------------
Total shareholders' funds 59 971 81 900 23 818 8 920
Minority Interest 615 615 (59) (59)
----------- ------------ ---------- ------------
60 586 82 515 23 759 8 861
LIABILITIES
Deposits and other accounts 14 173 306 257 844 173 306 36 901
Financial liabilities held for trading 15 66 924 133 754 66 924 19 142
Provision for current taxations 2 274 31 709 2 274 4 538
Acceptances 6 655 97 126 6 655 13 900
Deferred tax liability 30 252 19 068 14 052 1 487
----------- ------------ ---------- ------------
339 997 622 016 286 970 84 829
----------- ------------ ---------- ------------
ASSETS
Balances with banks and cash 64 684 133 034 64684 19 039
Financial assets held for trading 15 36 069 114 944 36 069 16 450
Advances and other accounts 16 149 774 201 350 149 774 28 816
Customers' indebtedness
for acceptances 6 655 97 126 6 655 13 900
Trade investment 1 301 1 230 48 3
Quoted and other investments 994 14 303 1 001 2 047
Investment properties 120 - 52 -
Property and equipment 80 400 60 029 28 687 4 574
----------- ------------ ---------- ------------
339 997 622 016 286 970 84 829
----------- ------------ ---------- ------------
INFLATION ADJUSTED STATEMENT OF CHANGES IN EQUITY
At 31 December 2003
Capital Reserves Revenue
Reserves
Capital Accumulated
Share Share Statutory Redemption Other Profit Total
Capital Premium Reserve Reserve Z$ m Z$ m Z$ m
Z$ m Z$ m Z$ m Z$ m
1 January 2003 18 580 29 989 5 248 3 585 49 24 449 81 900
Share issue 10 1 061 - - - - 1 071
Revaluation - - - - 52 - 52
Net profit for the year - - - - - (28 538) (28 538)
Dividends paid - - - - - (12 650) (12 650)
------ ------ ------ ----- ----- ------- --------
18 590 31 050 5 248 3 585 101 (16 739) 41 835
Own equity 272 1 734 - - - 10 819 12 825
Instruments (note 11.4)
Monetary adjustment on (192) (1 061) - - - 6 564 5 311
own equity instruments
------ ------ ------ ----- ----- ------- --------
Balances at 31 December 18 670 31 723 5 248 3 585 101 644 59 971
2003
------ ------ ------ ----- ----- ------- --------
INFLATION ADJUSTED STATEMENT OF CHANGES IN EQUITY
At 31 December 2002 (Restated)
Capital Reserves Revenue
Reserves
Share Share Statutory Redemption Accumulated
Capital Premium Reserve Reserve Other Profit Total
Z$ m Z$ m Z$ m Z$ m Z$ m Z$ m Z$ m
1 January 2002
Share issue 18 670 31 723 5 248 3 585 49 13 723 72 998
Net profit for the year - - - - - 37 627 37 627
Dividends paid- - - - - (8 650) (8 650)
------ ------ ------ ----- ----- ------- --------
18 670 31 723 5 248 3 585 49 42 700 101 975
Own equity (272) (5 185) - - - (54 572) (60 029)
Instruments (note 13.4)
Monetary adjustment on 182 3 451 - - - 36 321 39 954
Own equity instruments
------ ------ ------ ----- ----- ------- --------
Balances at 31 December 18 580 29 989 5 248 3 585 49 24 449 81 900
2002
------ ------ ------ ----- ----- ------- --------
HISTORICAL STATEMENT OF CHANGES IN EQUITY
At 31 December 2003
Capital Reserves Revenue
Capital Reserves
Share Share Statutory Redemption Accumulated
Capital Premium Reserve Reserve Other Profit Total
Z$ m Z$ m Z$ m Z$ m Z$ m Z$ m Z$ m
1 January 2003 91 - 23 27 1 8 778 8 920
Share issue - options 3 332 - - - - 335
Revaluation - - - - 52 - 52
Net profit for the year - - -- - 16 115 16 115
Dividends paid - - - - - (3 884) (3 884)
------ ------ ------ ----- ----- ------- --------
94 332 23 27 53 21 009 21 538
Own equity 13 248 - - - 2 019 2 280
Instruments - proceeds
(note 13.4)
------ ------ ------ ----- ----- ------- --------
Balances at 31 December 2003 107 580 23 27 53 23 028 23 818
------ ------ ------ ----- ----- ------- --------
HISTORICAL STATEMENT OF CHANGES IN EQUITY
At 31 December 2003
Capital Reserves Revenue
Capital Reserves
Share Share Statutory Redemption Accumulated
Capital Premium Reserve Reserve Other Profit Total
Z$ m Z$ m Z$ m Z$ m Z$ mZ$ m Z$ m
1 January 2002 104 248 23 27 1 2 467 2 870
Net profit for the year - - - - - 9 556 9 556
Dividends paid - - - - - (633) (633)
------ ------ ------ ----- ----- ------- --------
104 248 23 27 1 11 390 11 793
Own equity (13) (248) - - - (2 612) (2 873)
Instruments (note 13.4)
------ ------ ------ ----- ----- ------- --------
Balances at 31 December 2002 91 - 23 27 1 8 778 8 920
------ ------ ------ ----- ----- ------- --------
Shareholder's funds were restated by Z$2 873 million relating to own equity
instruments (note 13.4).
CONSOLIDATED CASH FLOW STATEMENT
CONTINUING OPERATIONS
INFLATION ADJUSTED HISTORICAL
CASH FLOWS FROM OPERATING ACTIVITIES Restated
2003 2002 2003 2002
Z$ million Z$ million Z$ million Z$ million
Profit before taxation and loss on net monetary position 75 152 132 609 30 799 15 863
Non-cash items
Profit on disposal of property and equipment (34) (161) (10) (13)
Depreciation 13 003 11 683 977 257
Charge for bad and doubtful debts 5 180 8 161 5 180 1 168
Loss on net monetary position (84 891) (38 340) - -
------ ------ ----- --------
Operating cash flow before changes in operating
assets and liabilities 5 410 113 952 36 946 17 275
Changes in operating assets and liabilities
Financial liabilities held for trading (53 051) (7 700) 49 472 14 580
Deposits and other accounts (81 058) (33 617) 132 133 22 056
Advances and other accounts 39 279 3 794 (130 609) (19 479)
Financial assets held for trading 7 594 37 537 (1 136) (2 742)
------ ------ ----- --------
(81 826) 113 966 86 806 31 690
------ ------ ----- --------
Taxation
Corporate tax paid (30 834) (31 023) (3 807) (1 518)
------ ------ ----- --------
Net cash (outflows)/inflows from operating activities (112660) 82 943 82 999 30 172
------ ------ ----- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of property and equipment 45 398 13 22
Purchase of property and equipment (40 341) (26 594) (25 914) (2 340)
Purchase of quoted and other investments (net) 13 293 (3 228) 1 001 (1 223)
------ ------ ----- --------
Net cash outflows from investing activities (27 003) (29 424) (24 900) (3 541)
------ ------ ----- --------
Net cash (outflows)/inflows before financing activities (139 663) 53 519 (58 099) 26 631
------ ------ ----- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 1 819 - 369 -
Proceeds from own equity instruments 17 383 - 2 280 -
Dividends paid (12 650) (9 049) (3 884) (672)
------ ------ ----- --------
6 552 (9 049) (1 235) (672)
------ ------ ----- --------
Net (decrease)/increase in cash and cash equivalents
from continuing operations (133 111) 44 470 56 864 25 959
------ ------ ----- --------
CONSOLIDATED CASH FLOW STATEMENT (Cont'd)
DISCONTINUING OPERATIONS INFLATION ADJUSTED HISTORICAL
Restated Restated
CASH FLOWS FROM OPERATING ACTIVITIES 2003 2002 2003 2002
Z$ million Z$ million Z$ million Z$ million
(Loss)/profit before taxation and loss on net monetary (151) 3 787 (525) (29)
position
Non-cash items
Profit on disposal of property and equipment (3 394) (98) (1 225) (8)
Depreciation 4 922 538 77 34
Charge for bad and doubtful debts 2 029 - 2 029 -
Monetary loss (2 870) (2 901) - -
------- ------- ------- ----
Operating cash flows before changes in operating
assets and liabilities 536 1 326 356 (3)
Changes in operating assets and liabilities
Financial liabilities held for trading (13 779) 42 855 (1 690) (157)
Deposits and other accounts (3 478) 56 026 4 272 1 431
Advancesand other accounts 5 088 12 571 2 442 307
Financial assets held for trading - (41 087) - (1 586)
------- ------- ------- ----
(11 633) 71 691 5 380 3 164
Taxation
Corporate tax paid (195) (756) (51) (37)
------- ------- ------- ----
Net cash (outflows)/inflows from operating activities (11 828) 70 935 5 329 3 127
------- ------- ------- ----
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of property and equipment 6 108 1 335 2 424 67
Purchase of property and equipment (680) (12 452) (437) (1 526)
Purchase of quoted and other investments (120) - (52) -
------- ------- ------- ----
Net cash outflows from investing activities 5 308 (11 117) 1 935 (1 459)
------- ------- ------- ----
Net cash (outflows)/inflows before financing activities (6 520) 59 818 7 264 1 668
------- ------- ------- ----
Net (decrease)/increase in cash and cash equivalents
from continuing operations (6 520) 59 818 7 264 1 668
Net (decrease)/increase in cash and cash equivalents
from discontinuing operations (133 111) 44 470 56 864 25 959
------- ------- ------- ----
TOTAL NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (139 631) 104 288 64 128 27 627
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF YEAR 237 790 133 502 34 031 6 404
------- ------- ------- ----
CASH AND CASH EQUIVALENTS AT THE END 98 159 237 790 98 159 34 031
OF THE YEAR 12
------- ------- ------- ----
NOTES TO THE FINANCIAL STATEMENTS
1. INCORPORATION AND ACTIVITIES
The company is incorporated in Zimbabwe and is an investment holding company.
Its subsidiaries are engaged in banking, stockbroking services and fund
management.
2. CURRENCY
These financial statements are expressed in Zimbabwe dollars, and are rounded to
the nearest million.
3. BASIS OF PREPARATION
The financial statements are prepared under the historical cost convention and
adjusted to reflect the changes in general price levels in accordance with IAS
29, Financial Reporting in Hyperinflationary Economies.
The financial statements were approved by the Board on 23 March 2004.
4. INFLATION ACCOUNTING
The economy of Zimbabwe is considered to be a hyperinflationary economy. In
order to comply with IAS 29, Financial Reporting in Hyperinflationary Economies,
financial statements need to be expressed in terms of the measuring unit current
at the balance sheet date. Accordingly, the accompanying financial statements,
including comparatives, have been restated to account for changes in the general
purchasing power of the Zimbabwe dollar. The restatement is based on the
consumer price index at the balance sheet date. The indices and conversion
factors are derived from the inflation rates which are issued by the Central
Statistical Office of Zimbabwe. The indices and conversion factors used were as
follows:
Dates Indices Conversion Factors
31 December 2003 24 384.10 1.0000
31 December 2002 3 489.70 6.9875
31 December 2001 1 167.40 20.8875
The indices have been applied to the historical costs of transactions and
balances as follows:-
* All comparative figures as of and for the year ended 31 December 2002 have
been restated by applying the change in the index to 31 December 2003;
* Income statement transactions have been restated by applying the change in
the index from the approximatedate of the transactions to 31 December
2003;
* Gains and losses arising from the monetary asset or liability positions
have been included in the income statement;
* Non-monetary assets and liabilities have been restated by applying the
change in the index from the date of the transaction, to 31 December 2003;
* Property and equipment, current and accumulated depreciation have been
restated by applying the change in the index from the date of their
purchase to 31 December 2003.
* Equity has been restated by applying the change in index from the date of
issue.
* All items in the cash flow statement are expressed in terms of the
measuring unit current at the balance sheet date.
IAS 29 discourages publication of historical results as a supplement to
inflation adjusted accounts. The Zimbabwe Accounting Practices Board and the
Zimbabwe Stock Exchange have permitted companies in Zimbabwe to publish
historical results in conjunction with inflation adjusted accounts.
5. INTEREST EXPENSE
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
Z$ million Z$ million Z$ million Z$ million
Interest expense 61 791 87 252 38 221 8 273
Borrowing costs capitalised - (831) - (119)
------ ------ ------ -----
61 791 86 421 38 221 8 154
------ ------ ------ -----
6. NON-INTEREST INCOME
INFLATION ADJUSTED HISTORICAL
Restated Restated
2003 2002 2003 2002
Z$ million Z$ million Z$ millionZ$ million
Gains less losses from quoted and other
investments 1 528 (1 279) 449 68
Net commission and fee income:- 7 295 6 345 1 228 561
---------- ------------- ---------- ----------
- Income 7 487 6 743 1 286 594
- Expenses (192) (398) (58) (33)
---------- ------------- ---------- ----------
Broking income 2 806 3 745 989 283
Profit on disposal of property and 3 428 259 1253 21
equipment
Other operating income 1 435 9 161 1 535 760
---------- ------------- ---------- ----------
16 492 18 231 5 454 1 693
---------- ------------- ---------- ----------
Continuing operations 10 292 11 439 3 222 1 449
Discontinuing operations 6 200 6 792 2 232 244
---------- ------------- ---------- ----------
16 492 18 231 5 454 1 693
---------- ------------- ---------- ----------
7. OPERATING EXPENDITURE
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
Z$ million Z$ million Z$ million Z$ million
The operating profit is after charging the
following:-
Administration costs 13 056 13779 7 971 1 463
Audit fees 239 147 132 12
Depreciation 17 925 12 221 1 054 291
Director's remuneration 2 056 1 195 622 128
---------------- ------------------ ----------------- ----------------
-Fees for services as directors 129 35 39 3
- Other emoluments 1 927 1 160 583 125
---------------- ------------------ ----------------- ----------------
Staff costs 18 888 29 606 7 754 2 281
---------------- ------------------ ----------------- ----------------
52 164 56 948 17 533 4 175
---------------- ------------------ ----------------- ----------------
Continuing operations 47 842 53 943 16 805 3 902
Discontinuing operations 4 322 3 005 728 273
---------------- ------------------ ----------------- ----------------
52 164 56 948 17 533 4 175
---------------- ------------------ ----------------- ----------------
8. TAXATION
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
Z$ m Z$ m Z$ m Z$ m
Tax Charge
Current taxation - 25 623 - 3 667
Aids levy - 615 - 88
Deferred tax charge 11 184 27 209 12 565 1 899
------------------ ------------------ ------------------ -----------------
11 184 53 447 12 565 5 654
Financial institutions levy 1 594 4 968 1 594 711
------------------ ------------------ ------------------ -----------------
Total taxation 12 778 58 415 14 159 6 365
------------------ ------------------ ------------------ -----------------
Continuing operations - Taxation 10 934 53 181 12 615 5 505
Continuing operations - Financial
institutions levy 1 594 4 968 1 594 711
Discontinuing operations - Taxation 250 266 (50) 149
------------------ ------------------ ------------------ -----------------
12 778 58 415 14 159 6 365
------------------ ------------------ ------------------ -----------------
The effective historical tax rate has increased to 47% from 40% in the previous
year.
9 DISCONTINUING OPERATION
The Board decided to dispose of the Group's interest in Continental Securities
Trading (Private) Limited (CST). A Memorandum of Understanding was signed with
the purchaser whereby CST would cease operations with effect from 30 November
2003. The shareholding in CST by NMBZ Holdings Limited was transferred to the
purchaser on 1 January 2004 in terms of the Agreement of Sale.
The total assets taken over by the purchaser, amount to Z$290 million and total
liabilities to Z$37 million. All trade debtors and trade creditors were taken
over by the Group.
10 BAD AND DOUBTFUL DEBTS
Provisions are applied to write off advances in part or in whole when
they are considered wholly or partly unrecoverable. The aggregate provisions
which are made during the year are charged to income.
10.1 Specific provisions
Specific provisions are made where the repayment of identified advances is in
doubt and reflect estimates of the loss. Advances are written off against
specific provisions once the probability of recovering any significant amounts
becomes remote.
10.2 General provisions
The general doubtful debt provision relatesto the inherent risk of
losses which, although not separately identified, is known to be present in any
loan portfolio.
10.3 Non-performing loans
Interest on loans and advances is accrued to income until such time as
reasonable doubt exists about its collectibility, thereafter and until all or
part of the loan is written off, interest continues to accrue on customers'
accounts but is not included in income. Such suspended interest is deducted
from loans and advances in the balance sheet. This policy meets the
requirements of the Banking Regulations 2000 issued by the Reserve Bank of
Zimbabwe.
11. EARNINGS PER SHARE
11.1 Inflation adjusted basic loss/earnings per share
The calculation of inflation adjusted basic loss per share for the year ended 31
December 2003 of 7 050 cents (2002 - inflation adjusted earnings of 10 351
cents) is based on a loss after taxation attributable to ordinary shareholders
of Z$28 538 million (2002 - profit attributable to ordinary shareholders of Z$37
627 million) and the weighted average shares in issue of 404 809 987, (2002 -
363 523 767).
Historical basic earnings per share
The calculation of historical basic earnings per share for the year ended 31
December 2003 of 3 981 cents (2002 - 2 629 cents) is based on profit
after taxation attributable to ordinary shareholders of Z$16 115 million (2002 -
Z$9 556 million) and the weighted average shares in issue of 404 809 987,
(2002 - 363 523 767).
11.2 Inflation adjusted headline loss/earnings per share
The calculation of inflation adjusted headline loss per share for the year ended
31 December 2003 of 7 643 cents (2002 - inflation adjusted earnings of 10 301
cents) is based on adjustedloss after taxation attributable to ordinary
shareholders of Z$30 938 million (2002 - profit attributable to ordinary
shareholders of Z$37 448 million) and on the weighted average shares in issue of
404 809 987, (2002 - 363 523 767).
Historical headline earnings per share
The calculation of historical headline earnings per share for the year ended 31
December 2003 of 3 764 cents (2002 - 2 625 cents) is based on adjusted profit
after taxation attributable to ordinary shareholders of Z$15 238 million (2002 -
Z$9 541 million) and on the weighted average shares in issue of 404 809 987,
(2002 - 363 523 767).
The adjustments were as follows:-
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
Z$ million Z$ million Z$ million Z$ million
(Loss)/profit attributable to shareholders (28 538) 37 627 16 115 9 556
Deduct non-recurring items:
Profit on disposal of property, & equipment (3 428) (259) (1 253) (21)
Tax effect 1 028 80 376 6
------------ ------------- ------------ -----------
(30 938) 37 448 15 238 9 541
------------ ------------- ------------ -----------
Weighted average number of shares 405 364 405 364
(millions)
------------ ------------- ------------ -----------
Headline earnings per share is calculated in accordance with Statement of
Investment Practice No.1 issued by the Institute of Investment Management and
Research to assist users of accounts to identify earnings derived from trading
activities.
11.3 Inflation adjusted diluted basic loss/earnings per share
The inflation adjusted diluted basic loss per share for the year ended 31
December 2003 is 6 681 cents (2002 - diluted basic earnings per share of 10 332
cents). The calculation is based on loss after taxation attributable to
ordinary shareholders of Z$28 538 million (2002 - profit after tax attributable
to ordinary shareholders of Z$37 627 million) and on the diluted shares of 427
162 412, (2002 - 364 183 767).
The dilution in basic earnings per share arises from 357 600 share options
granted to senior employees, in terms of the Employee Share Option Scheme and
outstanding at 31 December 2003.
Historical diluted basic earnings per share
The historical diluted earnings per share for the year ended 31 December 2003 is
3 773 cents (2002 - 2 624 cents). The calculation is based on profit after
taxation attributable to ordinary shareholders of Z$16 115 million (2002 - Z$9
556 million) and on the diluted shares of 427 162 412, (2002 - 364 183 767).
The dilution in basicearnings per share arises from 357 600 share options
granted to senior employees, in terms of the Employee Share Option Scheme and
outstanding at 31 December 2003.
11.4 Inflation adjusted diluted headline loss/earnings per share
The inflation adjusted diluted headline loss/earnings per share for the year
ended 31 December 2003 is 7 243 cents (2002 - diluted headlines earnings
per share of 10 282 cents). The calculation is based on adjusted loss after
taxation of Z$30 938 million (2002 - profit after taxation of Z$37 446 million)
and on diluted shares of 427 162 412, (2002 - 364 183 767).
Historical diluted headline earnings per share
The historical diluted headline earnings per share for the year ended 31
December 2003 is 3 567 cents (2002 - 2 620 cents). The calculation is based on
adjusted profit after taxation of Z$15 238 million (2002 - Z$9 541 million) and
on diluted shares of 427 162 412, (2002 - 364 183 767).
12. CASH AND CASH EQUIVALENTS
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2001
Balances with Reserve Bank of Z$ million Z$ million Z$ million Z$ million
Zimbabwe
Statutory reserve 2 841 286 2 841 41
Balances with other banks and cash
Current, nostro accounts and cash 61 843 132 748 61 843 18 998
---------------- ---------------- -------------- ----------------
64 684 133 034 64 684 19 039
---------------- ---------------- -------------- ----------------
Other
Government and public sector securities 6 464 49 073 6 464 7 023
Bills receivable 27 011 55 683 27 011 7 969
---------------- ---------------- -------------- ----------------
33 475 104 756 33 475 14 992
---------------- ---------------- -------------- ----------------
Total cash and cash equivalents 98 159 237 790 98 159 34 031
---------------- ---------------- -------------- ----------------
Analysed as follows:
Cash and cash equivalents for continuing
operations 97 530 240 661 97 530 34 442
Discontinuing operations - Taxation 629 (2 871) 629 (411)
---------------- ---------------- -------------- ----------------
Total cash and cash equivalents 98 159 237 790 98 159 34 031
---------------- ---------------- -------------- ----------------
The statutory reserve balance with the Reserve Bank of Zimbabwe is non-interest
bearing. The balance is determined on the basis of deposits held and is not
available to the Bank for daily use.
13. SHARE CAPITAL
INFLATION ADJUSTED
GROUP AND COMPANY
Restated
2003 2002 2003 2002
13.1 Authorised Shares Shares Z$ million Z$ million
Ordinary shares of Z$0.25 each 560 000 000 560 000 000 140 140
---------------------------------------------------
13.2 Issued and fully paid
At 1 January 363 523 767 415 991 100 91 104
Shares issued during the year - Options 10 813 712 - 3 -
---------------------------------------------------
At 31 December - Company 374 337 479 415 991 100 94 104
Effect of IAS 29 - - 18 496 18 566
At 31 December 374 337 479 415 991 100 18 590 18 670
Own equity instruments of Z$0.25 each 52 467 333 (52 467 333) 272 (272)
(note 13.4)
---------------------------------------------------
426 804 812 363 523 767 18 862 18 397
Monetary adjustment on own equity - - (192) 182
instruments
---------------------------------------------------
At 31 December - Group 426 804 812 363 523 767 18 670 18 580
---------------------------------------------------
Share options worth Z$335 million and totalling 10 813 712 shares were exercised
by managerial staff in the current year.
Of the unissued ordinary shares, 6 715 077 are reserved for options which may be
granted in terms of a share option scheme. As at 31 December 2003, 357 600
share options were outstanding.
13.3 Share Buy Back
At the Annual General Meeting held on 20 May 2003, shareholders authorised the
directors to purchase up to 56 000 000 (fifty six million) of the company's own
shares. No shares were repurchased for the period to 31 December 2003.
13.4 Own Equity Instruments
Own equity instruments amounting to 52 467 333 shares (the "Shares") at a cost
of Z$2 873 million were sold initially off-market to offshore investors
unrelated to the Group in the period under review for US$2.714 million (Z$2 280
million at the official exchange rate). This transaction has been accounted for
in terms of IAS 32 which provides that no gain or loss is recognised in the
income statement on the sale, issuance or cancellation of these shares.
Consideration received is presented in the financial statements as a change in
equity. Accordingly, the loss on disposal of the own equity instruments has
been charged to revenue reserves in the statement of changes in equity.
14. DEPOSITS AND OTHER ACCOUNTS
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
14.1 Deposits and other accounts by Z$ million Z$ million Z$ million Z$ million
type
Deposits from other banks 92 411 173 002 92 411 24 759
Other money market deposits 16 711 20 732 16 711 2 967
Current and deposit accounts 101 890 81 474 101 890 11 660
---------------- ---------------- --------------- ----------------
Total deposits 211 012 275 208 211 012 39 386
Trade ad other creditors 29 218 116 390 29 218 16 657
---------------- ---------------- --------------- ----------------
240 230 391 598 240 23056 043
Less financial liabilities held for trade (66 924) (133 754) (66 924) (19 142)
(note 15.1)
---------------- ---------------- --------------- ----------------
173 306 257 844 173 306 36 901
---------------- ---------------- --------------- ----------------
14.2 Maturity Analysis
Withdrawals on demand 81 198 156 393 81 198 22 382
Maturing within one month 73 210 54 608 73 210 7 815
Maturing after one month but
within 6 months 52 134 60 540 52 134 8 665
Maturing after one month but
within 12 months 4 470 3 667 4 470 524
---------------- ---------------- -------------- ----------------
211 012 275 208 211 012 39 386
--------------- ---------------- -------------- ----------------
14.3 Sectoral analysis of deposits INFLATION ADJUSTED
Restated
2002 2002
Z$ million % Z$ million %
Banks and other financial institutions 92 411 44 173 002 63
Telecommunications companies 1 721 1 9 943 3
Mining companies 15 - 98 -
Industrial companies 100 868 48 21 -
Other deposits 15 997 7 90 250 33
Municipalities and parastatals - - 1 894 1
--------------- ---------------- -------------- ----------------
211 012 100.00 275 208 100.00
--------------- ---------------- -------------- ----------------
14.4 Sectoral analysis of deposits HISTORICAL
Restated
2002 2002
Z$ million % Z$ million %
Banks and other financial institutions 92 411 44 24 756 63
Telecommunications companies 1 721 1 1 423 3
Mining companies 15 - 14 -
Industrial companies 100 868 48 3 -
Other deposits 15 997 7 12 919 33
Municipalities and parastatals - - 271 1
---------------- ------------ ---------------- ---------------
211 012 100.00 39 386 100.00
----------------- ------------ ---------------- ---------------
15. FINANCIAL INSTRUMENTS HELD FOR TRADING
Fair
Cost Value Restated Historical
2002 2003 2002 2002
15.1 Financial liabilities held for trading Z$ m Z$ m Z$ m Z$ m
Fixed term deposits 6 796 6 870 68 638 9 823
NCDs 61 155 60 054 65 116 6 319
----------------- ----------------- ------------------ ------------------
Total financial liabilities held for trade 67 951 66 924 133 754 19 142
----------------- ----------------- ------------------ ------------------
15.2 Financial assets held for trading
Government and public sector securities 6 577 6 464 49 073 7 023
Agri bonds - - 258 37
Fuel bonds 24 (41) 168 24
Treasury bills 6 360 6 243 47 298 6 769
Zesa bonds 193 262 1 349 193
Bills receivable 25 994 27 011 55 683 7 969
Bills receivable 25 994 27 011 54 900 7 857
Other bills - - 783 112
Fixed term loans 2 594 2 594 10 188 1 458
----------------- ---------------- ---------------- ------------------
Total financial assets held for trading 35 165 36 069 114 944 16 450
----------------- ---------------- ---------------- ------------------
Net financial liabilities (32 786) (30 855) (18 810) (2 692)
------------------ ---------------- ---------------- ------------------
Unrealised gain/(loss) on IAS 39 fair
value adjustment 1 931 (6 373) (912)
---------------- ---------------- -------------------
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
15.3.1 Financial liabilities held for trading Z$ m Z$ m Z$ m Z$ m
Demand to 3 months 66 915 133 754 66 915 19 142
3 months to 1 year 9 - 9 -
----------------- ----------------- ----------------- --------------
Total deposits 66 924 133 754 66 924 19 142
----------------- ----------------- ----------------- --------------
15.3.2 Financial assets held for trading
Demand to 3 months 27 042 43 888 27 042 6 281
3 months to 1 year 9 027 14 800 9 027 2 118
1 year to 5 years - 56 256 -8 051
----------------- ----------------- ----------------- --------------
36 069 114 944 36 069 16450
----------------- ----------------- ----------------- --------------
16. ADVANCES AND OTHER ACCOUNTS
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
16.1.1 Financial liabilities held for trading Z$ m Z$ m Z$ m Z$ m
Total advances 100 631 157 852 100 631 22 591
Other accounts 49 143 43 498 49 143 6 225
------- ------- ------- -------
Total deposits 149 774 201 350 149 774 28 816
------- ------- ------- -------
16.1.2 Maturity analysis
Demand to 3 months 75 370 117 969 75 370 16 883
3 months to 1 year 34 469 34 951 34 469 5 002
1 year to 5 years 5 745 7 588 5 745 1 086
Over 5 years - 9 258 - 1 325
------- ------- ------- -------
Total advances 115 584 169 766 115 584 24 296
Specific and general doubtful debt provisions (8 761) (10 845) (8 761) (1 552)
Suspended interest (6 192) (6 069) (6 192) (153)
------- ------- ------- -------
100 631 157 852 100 631 22 591
Other accounts 49 143 43 498 49 143 6 225
------- ------- ------- -------
Total 149 774 201 350 149 774 28 816
------- ------- ------- -------
16.2 Sectoral analysis of utilisations INFLATION ADJUSTED
Restated
2003 2002
Z$ million % Z$ million %
Industrials 41 586 34 96 937 36
Agriculture and horticulture 21643 18 8 881 3
Conglomerates 13 370 10 5 800 2
Construction and property - - 1 027 -
Services 7 046 6 71 614 27
Mining 6 742 6 12 682 5
Food and beverages 9 466 8 19 935 8
Other 22 386 18 50 016 19
------------------ ----------------- ------------------ -----------------
122 239 100 266 892 100
------------------ ----------------- ------------------ -----------------
The above sectoral analysis comprises advances of Z$115 584 million (2002 -
Z$169 767 million) and customers' indebtedness for acceptances of Z$6 655
million (2002 - Z$97 125 million).
16.3 Sectoral analysis of utilisations HISTORICAL
Restated
2003 2002
Z$ million % Z$ million %
Industrials 41 586 34 13 873 36
Agriculture and horticulture 21 643 18 1 271 3
Conglomerates 13 370 10 830 2
Construction and property - - 147 -
Services 7 046 6 10 249 27
Mining 6 742 6 1 815 5
Food and beverages 9 466 8 2 853 8
Other 22 386 18 7 158 19
------------------ ----------------- ------------------ -----------------
122 239 100 38 196 100
------------------ ----------------- ------------------ -----------------
The above sectoral analysis comprises advances of Z$115 584 million (2002 - Z$24
296 million) and customers' indebtedness for acceptances of Z$6 655 million
(2002 - Z$13 900 million).
16.4 Risk concentrations
The material concentration of loans and advances are in the industrial sector
34% (2002 - 36%).
16.5 Provisions for doubtful debts including acceptances
INFLATION ADJUSTED
--------------- 2003 -------- ---------- Restated 2002 ------------
Specific General Total Specific General Total
Z$ m Z$ m Z$ m Z$ m Z$ m Z$ m
At 1 January 5 946 4 899 10 845 5 150 2 852 8 002
Charge against profits 4 748 2 429 7 208 4 213 3 948 8 161
Bad debts written off 1 - 1 7 - 7
Monetary adjustment (5 095) (4 198) (9 293) (424) (1 901) (5 325)
------------ ----------- ----------- ------------ ----------- -----------
At 31 December 5 600 3 161 8 761 5 946 4 899 10 845
------------ ----------- ----------- ------------ ----------- -----------
16.6 Provisions for doubtful debts including acceptances
HISTORICAL
------------------- 2003 -------- ---------- Restated 2002 ------------
Specific General Total Specific General Total
Z$ m Z$ m Z$ m Z$ m Z$ m Z$ m
At 1 January 851 701 1 552 247 136 383
Charge against profits 4 748 2 460 7 208 603 5651 168
Bad debts written off 1 - 1 1 - -
----------- ----------- ----------- ----------- ----------- --------------
At 31 December 5 600 3 161 8 761 851 701 1 552
----------- ----------- ----------- ----------- ----------- --------------
16.7 Non Performing loans and advances
INFLATION ADJUSTED HISTORICAL
Restated
2003 2002 2003 2002
Z$ m Z$ m Z$ m Z$ m
Total non performing loans and advances 16 759 9 971 16 759 1 427
Specific provision for doubtful debts (5 600) (5 946) (5 600) (851)
Interest in suspense (6 192) (1 069) (6 192) (153)
---------------- ------------------- ------------------ -------------
Total deposits 4 967 2 956 4 967 423
---------------- ------------------- ------------------ -------------
The residue on these accounts represents recoverable portions covered by
realisable security.
DIVIDEND ANNOUNCEMENT
year ended 31 December 2003
The Board has proposed a final dividend of 510 cents per share payable to
members registered in the books of the company on 2 April 2004. The transfer
books and register of members will be closed from end of business day on Friday
2 April 2004 to end of business day on Friday 9 April 2004. Dividend cheques
will be mailed to shareholders on or about 16 April 2004. The dividends payable
to non-resident shareholders will be paid subject to Exchange Control
Regulations and approval. Resident and non-resident shareholders' tax of 15%
will be deducted where applicable.
By order of the Board
M B Narotam
Secretary
23 March 2004
DIRECTORS:
P T Zhanda (Chairman), Dr J T Makoni*, Dr D T Hatendi *, O O Chekeche*, M L dos
Remedios*, J S Friedlander, F T Kembo, Dr G N Mandishona,
J A Mushore*, A M T Mutsonziwa, F Zimuto*
* Executive
NMBZ HOLDINGS LIMITED AND SUBSIDIARY
SECRETARY AND REGISTERED OFFICE
Secretary
M B Narotam
Registered Offices
1st Floor NMB Centre
Unity Court George Silundika Avenue/
Cnr 1st Street/Kwame Nkrumah Avenue Leopold Takawira Street
Harare Bulawayo
Zimbabwe Zimbabwe
Telephone +263 4 759651 +263 9 70169
Facsimile +263 4 759648 +263 9 68535
Website: http://www.nmbz.co.zw
Email: enquiries@nmbz.co.zw
Auditors
KPMG Chartered Accountants (Zimbabwe)
Mutual Gardens
100 The Chase (West)
Emerald Hill
Harare
Zimbabwe
Transfer Secretaries
In Zimbabwe In UK
First Transfer Secretaries Computershare Services PLC
4th Floor, Gold Bridge North 36 St Andrew Square
Eastgate Building Edinburgh
Cnr. Robert Mugabe/Second Street EH2 2YB
P O Box 11 UK
Harare
Zimbabwe
Legal Practitioners to the Company
In Zimbabwe In UK
Kantor and Immerman Dechert
MacDonald House 2 Serjeants' Inn
10 Selous Avenue London EC4Y 1LT
Harare UK
Zimbabwe
This information is provided by RNS
The company news service from the London Stock Exchange
END
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