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Meikles Ld (MIK)

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Tuesday 21 June, 2011

Meikles Ld

Correction : Final Results






The economy has continued to stabilise following dollarisation in February 2009
albeit at a slow pace. Annual inflation declined to 2.7% in March 2011 from
3.2% in December 2010. The inflation outlook remains positive although negative
changes are to be expected due to volatilities in fuel and electricity prices
and movement in exchange rates, particularly the South African rand against the
US dollar. The liquidity situation has remained dire due to limited foreign
direct investments and multilateral support from the Breton Woods institutions
and or the donor community. Borrowings have become the most common form of
funding due to lack of liquidity and confidence in capital markets. As a result
of the low liquidity and high demand for loans, interest rates remained
relatively high during the period January 2010 to 31 March 2011 with negative
implications on productivity and performance across all sectors of the economy.


During the past year, we committed to the implementation of measures required
to move beyond the substantial challenges that we experienced in 2008 and 2009.

I am happy to report to shareholders that the unpleasant litigation initiated
by the previous Board of Directors against persons and entities related to the
major shareholders in the Company and against Mentor Africa Limited ("Mentor")
has been settled. We have now entered a new era of cooperation with the parties
to the litigation.

Mentor currently holds funds on behalf of the Cape Grace Group to the
equivalent value of US$ 4.5 million. These funds will comprise equity in Mentor
which has a thriving business in South Africa. It is anticipated that this
investment will produce significant returns for the Group.

The Board anticipates that the Group's investment in Mentor will produce
significant opportunities similar to those that the Group achieved from its
prior investment in Mvelephanda/Rebhold.

The Mvelephanda shares were realised for the Meikles Group at a significant
profit. This profit was utilised to discharge obligations of the Cape Grace
entities to the South African Revenue Service and Nedbank when the Cape Grace
financing structure was unbundled, ensuring the financial survival of the Cape
Grace Hotel, which was under risk at the time.

In March 2008, a put and call option agreement for the sale of the Cape Grace
Hotel was entered into between Meikles Limited (" Company"), Cape Grace Hotel
Limited (BVI) and its subsidiaries which own the Cape Grace Hotel on the one
hand, and Mentor on the other. In November 2008, a notice to exercise the
option for the purchase of the Meikle Group's interests in the Cape Grace Group
was received from Mentor. This transaction has not yet been consummated as a
consequence of the litigation that was initiated by the previous Board against
Mentor, which has now been withdrawn.

The Cape Grace Hotel remains an asset for disposal by the Cape Grace Group to
Mentor. As a result of the restoration of a positive business relationship
between the Company, its major shareholders, and Mentor, it is anticipated that
a deal beneficial to the Group will be consummated with whatever adjustments
may be necessary. Proceeds from the sale are also to be invested in Mentor.
This investment will be the foundation of a strong regional growth objective
for the Group.

In response to the litigation brought against the major shareholder entities by
the Company and BVI in late 2008, the major shareholder entities filed a
substantial answering affidavit in which they put up a complete defence. The
previous Board and BVI were unable to file replying affidavits because the
major shareholder entities' defences were meritorious. As a result, the Company
and BVI had no alternative but to withdraw the litigation against the major
shareholder entities.

As a consequence of the litigation initiated by the previous Board, certain
provisions were made in the Group financial statements for the year ended 31
December 2008. The outcome of the litigation has allowed a recoverable sum
denominated in South African rand to the equivalent of US$11,7 million to be
reinstated in the current financials.

Now that the issues with the major shareholder entities have been resolved and
no further claims will be made against them, it is known that the principals of
the Company's major shareholders will use their influence and business
connections productively to procure investment opportunities for the Group that
will provide opportunities for growth, as was planned prior to the dispute.
Shareholders are once again reminded of the substantial profit arising from the
Mvelaphanda shareholding, and the same skills are now once again available to
the Group.

For the fifteen months period to 31 March 2011, the Group recorded a
comprehensive income of US$ 8.0 million (2009: loss of $2.7 million). This
outturn includes the loss on the disposal of Kingdom and Cotton Printers to the
tune of US$3.8 million. The discontinued operations achieved a profit after tax
of US$2.5 million (12 month period ended 31 December 2009, a loss of US$908

On comparative twelve month periods, the operating companies achieved a good
growth in turnover and gross margin. The Group continues to review systems,
structures and processes to optimum levels. Together with the right sizing of
the operating companies, these efforts will bear fruit in the coming year.

The commentary below is based on the results for the comparable twelve month
periods ended 31 March 2011 and 31 March 2010.


The Company achieved an EBITDA of US$3.9 million (2010: loss of US$5.9
million). Turnover was up 42% on the comparative period and gross margin
improved by 23%. Some non performing branches were closed while new branches
were opened in more sustainable areas.

The much awaited Pick `n Pay deal is still to be approved by the regulatory
authorities. This has seriously hindered our ability to re-capitalise TM.
However, we are progressing with alternative funding which will enable us to
revamp stores and will ensure adequate levels of working capital.

Potential new sites have been identified for three key stores and details of
these will be disclosed at the opportune time. The Kamfinsa branch is currently
undergoing major refurbishment.

Pick `n Pay Clothing will be introduced to TM in the coming months which will
enhance the range and value offered.

Point of sale tills have been installed in all branches and this is now
providing us with the tools to effectively manage branch performance and

This subsidiary will be a major contributor to the Group going forward and both
shareholders in TM are committed to ensuring that the company has a strong
capital base.


The Hotels recorded an EBITDA of US$3.2 million (2010: US$2.3 million). Of this
amount, US$1.5 million (2010: loss of US$400 000) was from Zimbabwe operations,
while EBITDA of US$1.7 million (2010: US$2.7 million) was from the Cape Grace

Occupancy levels in 2011 were 43%, 45% and 66% (2010: 30%, 29%, 57%) for
Meikles Hotel, the Victoria Falls Hotel and Cape Grace Hotel, respectively.
Occupancies to date have shown further growth reflecting the strong interest in
Zimbabwe as both a tourist and business destination.

Funding is in place for the first phase of the refurbishment of Meikles Hotel
and this will begin in the next two months. Further funding is being sought for
the complete refurbishment of the hotel.

Scope of work for a refurbishment of the Victoria Falls Hotel has been
completed and we are engaged with our partner to finalise this project and to
seek medium term to long term funding for its completion.

We are actively exploring new opportunities both in Zimbabwe and in the region.
The regional opportunities are being explored in conjunction with Mentor.


Tanganda achieved an EBITDA of US$502 000 (2010: US$1.6 million).

Bulk tea production was 8 602 tonnes (2010:8 498 tonnes), due to reduced winter
rains and late summer rains. The production of bulk tea remains a challenge
given high power and labour costs. To counter an inability to irrigate
sufficiently due to constant power outages, we have participated in a pre-paid
power arrangement with the Zimbabwe Electricity Supply Authorities and the
result has been extremely positive.

Our mineral water plant financed by PTA Bank will be commissioned in due course
and production levels are expected to increase. We continue to drive sales of
beverage teas and water to the local and regional markets and the benefit of
these efforts will be felt in the coming year. We are increasing our hectarage
of macadamias and are embarking on a substantial development of avocados, and
this will also be included in our outgrowers' programmes. Increased planting
has started and the benefits of this will be felt in the medium to long term.

Tanganda continues to receive approaches from interested parties, who wish to
engage with us in the creation of further growth opportunities. This will
result in a more substantial agro industrial company. It is envisaged that the
Group will introduce additional investors in Tanganda which will facilitate
substantial growth in this important entity.


The department stores achieved an EBITDA loss of US$15 000 (2010: loss of
US$3.6 million).Turnover grew from US$6 million to US$17 million in 2011.

Funding challenges are still prevalent but progress is being made in securing
medium term lower cost finance.

Non performing stores will be closed, resulting in reduced overheads and
reduced finance levels required for stock holdings.

We are pursuing franchise relationships with major retailers in the region to
enhance our offerings.


The Group has constructively engaged with the Ministry of Youth Development,
Indigenisation and Empowerment on the Group's indigenisation status. A proposed
Employee Share Ownership Trust has been submitted to the Ministry and we are
waiting for a favourable response. Shareholders will be asked to approve this
proposal at the forthcoming Annual General Meeting. The Group will as a result
possess the required indigenisation status. This status has always been the
Group's objective. This was the original concept following the merger with
Kingdom Financial Holdings Limited.


The Board is cognisant of the fact that current levels of borrowing are greater
than they should be in the medium term. The Group has engaged with numerous
interested parties who have indicated a strong interest in participating in
medium to long term debt, at lesser cost, than current borrowings.

The resolution of the shareholder issues and approval of our indigenisation
plan by the Ministry of Youth Development, Indigenisation and Empowerment will
enable us to engage actively with these parties and new more sustainable
financing will be obtained during the coming year.

The Group is also to engage with potential investors at subsidiary level for
the sale of equity to inject fresh capital into the business and to fund
expansion. We shall maintain a controlling interest in all subsidiaries.
Interest has been expressed by potential investors, now that the damage caused
during 2008 and 2009 has been put behind us.

We are actively engaging the Reserve Bank of Zimbabwe for the recovery of our
deposit totalling US$37 million.


The final order for the liquidation of CP was issued on 10 May 2010. With it
came the liquidation process which, for all intents and purposes, was concluded
on 17 May 2011. All approved creditors were paid 100% of their dues from the
proceeds of the asset disposals. At the conclusion of the liquidation, plant
and equipment remained unsold. These assets are still available for sale to
prospective investors.


The shareholders approved the terms of the de-merger of KFHL from Meikles
Limited ("Group") on 13 October 2010. The terms included conditions precedent
such as High Court approval of the reduction of KFHL's share capital by US$22.5
million and also approval of the de-merger by the Minister of Youth
Development, Indigenisation and Empowerment. The High Court approval for the
capital reduction was secured on 14 December 2010 while the approval by the
Minister of Youth Development Indigenisation and Empowerment was obtained on 11
February 2011. The de-merger through the distribution of KFHL's shares to the
Company's shareholders was finalised on 18 February 2011.


As previously announced, Meikles Limited changed its financial year end from 31
December to 31 March. Accordingly, the Group has published fifteen months
results for the period to 31 March 2011.


Recent years have presented our Group with some of the strongest challenges in
our history. We are taking the actions required to put Meikles in a good
position to operate as a strong, expanding company and an important source of
strength in the Zimbabwean economy.

Challenges remain, but we have a strong conviction that we have the right
strategies in place to ensure that Meikles will now be able to deliver superior
value to all of our stakeholders on a sustained basis.

We have been assured that our brand has a very strong appeal in both Zimbabwe
and the region and potential opportunities are now coming our way.

We are proud of the role that our Group has played in our society, and we are
determined to take the actions required to ensure that Meikles is a consistent
source of strength for all our stakeholders and for Zimbabwe. The past three
years have been destructive in the initial periods and then defensive in the
more recent period. We are now in a position to move forward with real intent.


The past year was certainly eventful and challenging particularly the issues to
do with the widely reported shareholder dispute. The resolution of these
matters could not have been achieved without the support and guidance of the
regulatory authorities, shareholders and fellow board members. Management and
staff have worked under extremely difficult conditions and their efforts to
support the Group through a difficult period are much appreciated.

Our appreciation is extended to Messrs Meiring and Mills who have resigned from
the Board and left the Group. We wish them well in their future endeavours.

Finally, I wish to express our special appreciation to Farai Rwodzi. Farai
became a director and Chairman of the Company at a time when the shareholder
dispute was very much present with a daily impact on the Group's affairs. Farai
played a substantial role in moving the Group from its then restraints to the
present. Farai fought very hard for us all and his efforts in this regard will
always be remembered with gratitude. He is now to focus on his own interests
and we wish him every success in this regard.



16 June 2011



                                                     15 months to   12 months to
                                                    31 March 2011    31 December
                                                              US$            US$
CONTINUING OPERATIONS                                                           
Revenue                                               330,437,331    148,838,120
Cost of sales                                       (257,658,238)  (119,005,212)
Gross profit                                           72,779,093     29,832,908
Other trading income                                    4,177,687      2,571,464
Employee costs                                       (38,544,663)   (16,723,178)
Occupancy costs                                      (15,941,464)    (9,191,833)
Other operating costs                                (28,518,141)   (16,929,922)
Operating loss                                        (6,047,488)   (10,440,561)
Investment revenue                                      3,592,710        695,685
Finance costs                                         (7,590,331)      (425,048)
Net exchange (losses)/gains                             (228,825)        145,428
Fair value adjustments                                  1,394,398      2,081,234
Reinstatement of funds earmarked for future            11,737,013               
Profit/(loss) before tax                                2,857,477    (7,943,262)
Income tax credit                                         793,382      5,288,669
Profit/(loss) for the period from continuing            3,650,859    (2,654,593)
Profit/(loss) for the period from discontinued          2,474,066      (908,040)
PROFIT/(LOSS) FOR THE PERIOD                            8,013,636    (2,731,349)
Profit/(loss) attributable to:                                                  
Owners of the parent                                    6,687,285    (2,856,610)
Non-controlling interests                               (562,360)      (706,023)
Total comprehensive profit/(loss) attributable to:                              
Owners of the parent                                    8,575,996    (2,025,326)
Non-controlling interests                               (562,360)      (706,023)
Earnings/(loss) per share (cents)                                               
Basic earnings/(loss) from continuing and                    2.73         (1.16)
discontinued operations (cents per share)                                       
Basic earnings/(loss) from continuing operations             1.72         (0.79)
(cents per share)                                                               

The 2009 figures have been restated for reasons detailed in note 7.


AS AT 31 MARCH 2011

                                                          Restated     Restated
                                        31 March 2011  31 December    1 January
                                                              2009         2009
                                                  US$          US$          US$
Non-current assets                                                             
Property, plant and equipment              84,278,008   80,530,695   94,371,296
Investment property                            44,036       72,046      394,000
Biological assets                           7,661,157    6,310,560    4,999,548
Investments in associates                           -            -    1,025,929
Other financial assets and investments     16,600,101    4,554,984    4,449,894
Intangible assets - trademarks                124,141      291,363      268,573
Balances with Reserve Bank of Zimbabwe     36,824,671   12,541,825   35,003,091
Deferred tax                                2,355,680            -            -
Total non-current assets                  147,887,794  104,301,473  140,512,331
Current assets                                                                 
Inventories                                40,712,631   17,115,270    5,063,570
Trade and other receivables                16,152,929    7,333,889   10,128,432
Other financial assets                              -       24,198      787,605
Cash and bank balances                      3,285,599    2,536,106   16,488,848
                                           60,151,159   27,009,463   32,468,455
Assets held for sale or distribution       41,440,281  145,483,959   31,574,908
Total current assets                      101,591,440  172,448,422   64,403,363
Total assets                              249,479,234  274,749,895  204,555,694
EQUITY AND LIABILITIES                                                         
Capital and reserves                                                           
Share capital                               2,453,747            1            1
Non-distributable reserves                  2,626,681  109,983,720  150,941,736
Retained earnings/(accumulated losses)    111,204,769 (21,325,383) (19,221,260)
Capital and reserves relating to assets    18,083,232   51,658,125   10,621,312
classified as held for sale or                                                 
Equity attributable to equity holders     134,368,429  140,316,463  142,341,789
of the parent                                                                  
Non-controlling interests                     763,422    1,325,782    2,031,805
Total equity                              135,131,851  141,642,245  144,373,594
Non-current liabilities                                                        
Borrowings                                  3,749,569      845,173      212,184
Deferred tax                               15,996,723   15,346,508   24,318,471
Total non-current liabilities              19,746,292   16,191,681   24,530,655
Current liabilities                                                            
Trade and other payables                   30,003,922   22,888,135    5,244,016
Customer deposits                                   -            -   17,029,804
Current tax liabilities                       487,727      414,152      117,890
Short term borrowings                      49,031,109    6,985,213      769,330
                                           79,522,758   30,287,500   23,161,040
Liabilities relating to assets             15,078,333   88,628,469   12,490,405
classified as held for sale or                                                 
Total current liabilities                  94,601,091  118,915,969   35,651,445
Total liabilities                         114,347,383  135,107,650   60,182,100
Total equity and liabilities              249,479,234  276,749,895  204,555,694

The 2009 figures have been restated for reasons detailed in note 7.



                               Share Non-distributable   (Accumulated     Disposal
                                                             losses)/        group
                             capital          reserves       retained  capital and
                                                             earnings     reserves
                                 US$               US$            US$          US$
Balance at the beginning           1       109,983,720   (21,325,383)   51,658,125
of the period - restated                                                          
Profit for the period              -                 -      4,213,219    2,474,066
Transfer within reserves           -     (109,850,773)    146,859,490 (37,008,717)
and on disposal of                                                                
Other comprehensive income         -           855,472              -    1,033,239
for the period                                                                    
Share capital              2,453,746       (2,453,746)              -            -
Transfer in respect of             -         4,092,008    (4,018,527)     (73,481)
assets classified as held                                                         
for sale                                                                          
Dividend in specie                 -                 -   (14,524,030)            -
Balance at the end of the  2,453,747         2,626,681    111,204,769   18,083,232
Balance at the beginning           1       148,118,994   (19,221,260)   10,621,312
of the year as previously                                                         
stated - unaudited                                                                
Adjustment to nursery              -         (502,196)              -            -
Write down of other                -         (152,007)              -            -
Restatement of certain             -         3,476,945              -            -
plant and equipment                                                               
As restated                        1       150,941,736   (19,221,260)   10,621,312
Loss for the period -              -                 -    (1,948,570)    (908,040)
Other comprehensive income         -           773,591              -       57,693
for the period                                                                    
Transfer in respect of             -      (41,731,607)      (155,553)   41,887,160
assets classified as held                                                         
for sale or distribution                                                          
Balance at the end of the          1       109,983,720   (21,325,383)   51,658,125

                                  Attributable              Non                
                                     owners of      controlling           Total
                                           US$              US$             US$
Balance at the beginning of the    140,316,463        1,325,782     141,642,245
period - restated                                                              
Profit for the period                6,687,285        (562,360)       6,124,925
Transfer within reserves and on              -                -               -
disposal of subsidiaries                                                       
Other comprehensive income for       1,888,711                -       1,888,711
the period                                                                     
Share capital redenomination                 -                -               -
Transfer in respect of assets                -                -               -
classified as held for sale                                                    
Dividend in specie                (14,524,030)                -    (14,524,030)
Balance at the end of the period   134,368,429          763,422     135,131,851
Balance at the beginning of the    139,519,047        2,031,805     141,550,852
year as previously stated -                                                    
Adjustment to nursery stocks         (502,196)                -       (502,196)
Write down of other receivable       (152,007)                -       (152,007)
Restatement of certain plant and     3,476,945                -       3,476,945
As restated                        142,341,789        2,031,805     144,373,394
Loss for the period - restated     (2,856,610)        (706,023)     (3,562,633)
Other comprehensive income for         831,284                -         831,284
the period                                                                     
Transfer in respect of assets                -                -               -
classified as held for sale or                                                 
Balance at the end of the period   140,316,463        1,325,782     141,642,245

The 2009 figures have been restated for reasons detailed in note 7.



                                                 31 March 2011 31 December 2009
Continuing and discontinued operations                     US$              US$
Cash flows from operating activities                                           
Profit/(loss) before tax from continuing and         6,637,964      (9,511,707)
discontinued operations                                                        
Adjustments for                                                                
- Depreciation expense and impairment                5,388,114        4,457,620
- Net interest                                       4,921,007      (1,032,285)
- Dividend received                                (1,470,742)                -
- Net exchange gains                                   422,743        (100,972)
- Loss on disposal of subsidiaries                   3,842,146                -
- Fair value adjustment                              1,977,980      (3,146,077)
- Share of profits of associates                     (666,038)      (1,355,561)
- Loss on disposal of property, plant and              787,289           61,612
- Reinstatement of funds embarked for future      (11,737,013)                -
Operating cash flow before working capital          10,103,450     (10,627,370)
Increase in inventories                           (23,641,946)     (12,353,587)
Increase in trade and other receivables           (71,806,512)     (43,259,155)
Increase in trade and other payables and            56,277,836       72,455,998
financial liabilities                                                          
Cash (used in) / generated from operations        (29,067,172)        6,215,886
Income taxes paid                                  (2,019,495)        (168,610)
Net cash (used in)/generated from operating       (31,086,667)        6,047,276
Cash flows from investing activities                                           
Payment for property, plant and equipment         (11,439,443)      (5,386,464)
Proceeds from disposal of property, plant and        1,788,716          118,247
Net movement in service assets                        (65,325)         (51,632)
Dividends received                                   1,470,742          454,768
(Payment for)/proceeds from sale of                  (151,620)          378,067
Expenditure on biological assets                     (205,636)        (229,973)
Net outflow on disposal of subsidiary             (16,433,887)                -
Development expenditure                                      -         (22,783)
Investment income                                      249,853           31,496
Net cash used in investing activities             (24,786,600)      (4,708,274)
Cash flows from financing activities                                           
Proceeds from interest bearing borrowings           44,017,194        7,767,865
Finance costs                                      (7,600,557)        (771,776)
Net cash generated from financing activities        36,416,637        6,996,089
Net (decrease)/increase in cash and bank          (19,456,630)        8,335,091
Cash and bank balances at the beginning of          25,508,890       16,556,006
the period                                                                     
Net effect of exchange rate changes on cash          (436,011)           71,992
and bank balances                                                              
Translation of foreign entity                        (831,723)          545,801
Cash and bank balances at the end of the             4,784,526       25,508,890

The 2009 figures have been restated for reasons detailed in note 7.


1. General information

Meikles Limited, formerly Kingdom Meikles Limited (the Company), is a limited
company incorporated in Zimbabwe and is listed on the Zimbabwe and London Stock
Exchanges. The principal activities of the Company and its subsidiaries (the
Group) are hotel, retail and agriculture operations.

The financial statements are presented in United States of America dollars
(US$) being the currency of the primary economic environment in which the Group

The Group changed its year-end from 31 December to 31 March. As a result, these
financial statements are for a 15 month period while the comparatives are for a
12 month period.

2. Basis of preparation

The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The financial statements

are prepared from statutory records that are maintained under the historical
cost convention as modified by the revaluation of property, plant, equipment,
biological assets and financial instruments which are measured at fair value in
the opening statement of financial position.

The Group changed its functional currency from Zimbabwe dollars on 1 January
2009 to United States of America dollars (US$). The Group is resuming
presentation of IFRS financial statements after the Group issued financial
statements in the prior reporting period ended 31 December 2009 which could not
include an explicit and unreserved statement of compliance with IFRS due to the
effects of severe hyperinflation. The Group has early adopted the amendments to
IFRS 1 and is therefore applying that standard in returning to compliance with

2.1 Exemption for fair value as deemed cost

The Group elected to measure certain items of property, plant and equipment,
biological assets, bank balances and cash, inventories, other financial assets,
other financial liabilities and trade and other payables at fair value and to
use the fair values as the deemed cost of those assets and liabilities in the
opening statement of financial position.

2.2 Comparative financial information

The financial statements comprise three statements of financial position, and
two statements of comprehensive income, two statements of changes in equity and
two statements of cash flows as a result of the retrospective application of
the amendments to IFRS 1. The comparative statements of comprehensive income,
changes in equity and cash flows are for twelve months.

2.3 Reconciliation to previous basis of preparation

The Group's financial statements for the prior period ended 31 December 2009
claimed compliance with IFRS, except certain of the requirements of IAS 1
Presentation of Financial Statements, IAS 21 The Effects of Changes in Foreign
Exchange Rates, and IAS 29 Financial Reporting in Hyperinflationary Economies.
Certain prior year errors were identified during the period and a
reconciliation of the amounts previously stated and the restated amounts is
presented in note 7.

3. Accounting policies

The principal accounting policies of the Group have been applied consistently
in all material respects with those of the previous year.

4. Share capital

At the Annual General Meeting held on 23 July 2010, the shareholders authorised
a redenomination of the authorised share capital of the Company from 10
Zimbabwe cents per share (that is Z$ prior to any restatement to address
inflation) to US1 cent per share. Shareholders further authorised that a
transfer be made from non distributable reserves to share capital of an amount
sufficient to fund the redenomination.

In 2009, share capital was presented as US$1 pending the aforesaid


5. Discontinued operations

Demerger of Kingdom Financial Holdings Limited (KFHL) from the Group

Following the 13 October 2010 EGM of the Company and subsequent court and
regulatory approvals, KFHL was demerged from the Group effective 31 October

Voluntary liquidation of Cotton Printers (Private) Limited

Cotton Printers was liquidated during 2010. The company had encountered
significant viability problems pre and post dollarisation resulting in it
applying for voluntary liquidation in October 2009. The order for final
liquidation was granted on 10 May 2010. Cotton Printers did not trade during
the period.

Cape Grace Hotel operations in South Africa

In March 2008, a binding put and call option agreement for the sale of the Cape
Grace Hotel to Mentor was entered into between Meikles, Cape Grace Hotel
Limited (BVI) and its subsidiaries which own the Cape Grace Hotel on the one
hand, and Mentor on the other. In November 2008, a notice to exercise the
option for the purchase of Meikles Group's interests in the Cape Grace Group
was sent from Mentor to Meikles, and receipt thereof was acknowledged by
Meikles. This resulted in a legally binding agreement for the purchase by
Mentor of the Cape Grace Hotel. The consummation and implementation of this
transaction was delayed as a consequence of the litigation initiated by Meikles
against Mentor, which litigation has now been settled and withdrawn. Mentor
stands ready to comply with its obligation to purchase the Cape Grace Hotel as
a result of the binding agreement referred to aforesaid, and is ready to
consummate such transaction and deliver the proceeds of the sale against the
delivery of the Cape Grace Hotel in compliance with the agreement.

 1. Profit / (loss) for the year from discontinued operations:
                                              31 March 2011    31 December 2009
                                                        US$                 US$
Revenue                                          21,137,436          13,856,206
Net interest                                      6,158,823           6,287,976
Fees and commissions                             18,271,363           5,281,660
Other gains                                       4,711,984           6,225,105
Total income                                     50,639,606          31,650,947
Expenses*                                      (43,016,973)        (33,219,392)
Profit/(loss) before tax                          7,622,633         (1,568,445)
Income tax                                      (1,306,421)             660,405
Profit/(loss) for the year from                   6,316,212           (908,040)
discontinued operations                                                        
Loss on disposal of subsidiaries                (3,842,146)                   -
Profit/(loss) for the year from                   2,474,066           (908,040)
discontinued operations (attributable                                          
to owners of the parent)                                                       
Other comprehensive income                                                     
Exchange differences on translating               1,033,239           1,696,818
foreign entities                                                               
Losses on property revaluations                           -         (1,641,125)
Movement in other reserves                                -               2,000
Other comprehensive income for the                1,033,239              57,693
period, net of tax                                                             
Total comprehensive profit/(loss) for             3,507,305           (850,347)
the period                                                                     

*The expenses exclude depreciation expense of US$3,220,794 (2009: US$2,091,470)
which has been written back in line with the requirements of IFRS5.

The loss on disposal of subsidiaries                                           
Loss on disposal of Kingdom Financial             1,075,926                   -
Holdings Limited                                                               
Cotton Printers (Private) Limited                 2,766,220                   -
                                                  3,842,146                   -

Cash flows from discontinued operations                                        
Net cash flows from operating                   (1,072,229)           6,301,615
Net cash flows from investing                       304,735             619,241
Net cash flows from financing                     (613,708)             132,296
Net cash (outflows) / inflows                   (1,381,202)           7,053,152

 2. Assets held for sale or distribution
                                31 March 2011 31 December 2009   1 January 2009
Comprising                                US$              US$              US$
Assets held for sale:                                                          
Cape Grace Hotel group of          39,977,389       36,847,922       28,037,302
Cotton Printers (Private)                   -        4,497,374        2,587,606
Motor vehicles*                     1,462,892                -                -
Assets held for distribution to                                                
Kingdom Financial Holdings                  -      104,093,663          950,000
Total assets held for sale or      41,440,281      145,438,959       31,574,908
Liabilities relating to assets                                                 
held for sale:                                                                 
Cape Grace Hotel group of          15,078,333       16,363,112       12,490,405
Cotton Printers (Private)                   -        1,641,364                -
Liabilities relating to assets                                                 
held for distribution to                                                       
Kingdom Financial Holdings                  -       70,623,993                -
Total liabilities held for sale    15,078,333       88,628,469       12,490,405
or distribution                                                                
Net assets held for sale or        26,361,948       56,810,490       19,084,503
Equity relating to assets held                                                 
for sale:                                                                      
Cape Grace Hotel group of          18,083,232       14,231,541       10,621,312
Cotton Printers (Private)                   -        2,766,220                -
Equity relating to assets held                                                 
for distribution to members                                                    
Kingdom Financial Holdings                  -       34,660,364                -
Total equity relating to assets    18,083,232       51,658,125       10,621,312
classified as held for sale or                                                 

*The Group intends to dispose of certain motor vehicles to staff and
anticipates that the disposal will be completed by 31 July 2011.

6. Segment information

                                                31 March 2011  31 December 2011
                                                          US$               US$
Continuing operationgs:                                                        
Supermarkets                                      274,277,230       123,549,306
Agriculture                                        22,498,476        12,925,401
Hotels                                             15,893,206         8,277,370
Stores                                             19,609,707         4,086,043
Intra-group sales                                 (1,841,288)                 -
                                                  330,437,331       148,838,120
Disposal group:                                                                
Banking                                            24,790,186        11,569,636
Hotels                                             21,137,436        13,684,532
Textiles                                                    -           171,674
                                                   45,927,622        25,425,842
(Loss)/profit before tax                                                       
Continuing operations:                                                         
Supermarkets                                        (748,684)       (2,936,322)
Stores                                            (5,628,555)       (3,666,507)
Hotels                                                229,877         (635,962)
Agriculture                                           524,037         2,766,537
Corporate*                                          2,857,477       (7,943,262)
Disposal group:                                                                
Banking                                             4,306,773       (1,984,012)
Hotels                                              3,315,860         2,150,501
Textiles                                                    -       (1,734,934)
                                                    7,622,633       (1,568,445)

*Included in the corporate profit for the period ended 31 March 2011 is an
amount of USD11,737,013 relating to reinstatement of funds held for future
investment. These funds will comprise equity in Mentor Africa Limited which has
a thriving business in South Africa. It is anticipated that this investment
will produce significant returns for the Group.

                                            31 March   31 December    1 January
                                                2011          2009         2009
                                                 US$           US$          US$
Segment assets                                                                 
Continuing operations:                                                         
Hotels                                    28,216,356    29,283,147   29,745,874
Stores                                    64,333,525    28,920,859   31,129,339
Supermarkets                              43,860,203    23,034,173   12,021,568
Agriculture                               37,778,493    32,744,400   27,662,549
Banking                                            -             -   13,974,688
Corporate                                 33,850,376    17,328,357   13,974,688
                                         208,038,953   131,310,936  172,980,786
Assets classified as held for sale or                                          
Banking - assets classified as held for            -   104,093,663      950,000
sale or distribution to owners                                                 
Hotels - assets classified as held for    39,977,389    36,847,922   28,037,032
sale (Cape Grace Hotel)                                                        
Textiles - assets classified as held               -     4,497,374    2,587,606
for sale                                                                       
Motor vehicles (see note 5.2)              1,462,892             -            -
                                          41,440,281   145,438,959   31,574,908
                                         249,479,234   276,749,895  204,555,694
Continuing operations:                                                         
Hotels                                     7,080,837    22,304,925   42,310,338
Stores                                    50,234,041     5,424,688    5,591,826
Supermarkets                              40,133,298    17,731,046    2,278,232
Agriculture                               17,160,449    10,265,874    6,416,440
Banking                                            -             -   21,281,356
Corporate                               (15,339,575)   (9,247,352) (30,186,497)
                                          99,269,050    46,479,181   47,691,695
Classified as held for sale or                                                 
Banking - liabilities classified as                -    70,623,993            -
held for distribution to owners                                                
Hotels - liabilities classified as held   15,078,333    16,363,112   12,490,405
for sale (Cape Grace Hotel)                                                    
Textiles - liabilities classified as               -     1,641,364            -
held for sale                                                                  
                                          15,078,333    88,628,469   12,490,405

7. Prior year adjustments

7.1 Opening balances of property, plant and equipment

During the period errors were identified on the 1 January 2009 carrying amounts
of certain property plant, and equipment for the stores and agricultural
operations. The assets were omitted from the valuation exercise carried out at
1 January 2009. This has been corrected by the restatement of the 2009
comparatives included in these financial statements.

7.2 Opening balances of biological assets, other receivables and nursery stocks

During the period, it was discovered that the carrying amounts of certain
biological assets of the agricultural segment were understated while certain
receivables and nursery stocks were incorrectly valued at 1 January 2009,
resulting in a mistatement of the opening carrying amounts. The error has been
corrected in the comparative statements of financial position.

The effect of the corrections are presented below:

                                                        31 December   1 January
                                                               2009        2009
                                                                US$         US$
Increase in property, plant and equipment                 3,857,888   4,720,756
Increase in biological assets                             2,116,946           -
Decrease in inventories                                   (502,196)   (502,196)
Decrease in receivables                                   (152,007)   (152,007)
Increase in non-distributable reserves                    2,822,742 (3,476,945)
Increase in deferred tax                                  1,384,559   1,243,811
Decrease in accumulated losses                            1,113,332           -

8. Supplementary information

                                                     31 March 2011     31 March
                                                               US$          US$
Continuing operations:                                                         
Supermarkets                                           228,947,224  161,249,786
Agriculture                                             17,564,220   15,521,414
Hotels                                                  13,368,551    9,203,775
Stores                                                  17,400,216    5,885,253
Intra-group sales                                      (1,841,288)            -
                                                       275,438,923  191,860,228
Disposal group:                                                                
Hotels                                                  16,580,999   14,365,166
Textiles                                                         -       19,192
                                                        16,580,999   14,384,358
(Loss)/profit before tax                                                       
Continuing operations:                                                         
Stores                                                 (4,403,013)  (4,846,796)
Supermarkets                                               897,244  (6,447,231)
Hotels                                                     494,751    (511,296)
Agriculture                                                222,989      192,771
Corporate*                                               4,761,748  (1,462,540)
                                                         1,973,719 (13,105,092)
Disposal group:                                                                
Hotels                                                   (302,766)      590,818
Textiles                                                         -  (1,224,391)
                                                         (302,766)    (633,573)
Continuing operations:                                                         
Stores                                                    (15,120)  (3,574,358)
Supermarkets                                             3,908,768    5,874,513
Hotels                                                   1,596,443    (389,655)
Agriculture                                                502,054    1,554,955

8.1 Supplementary segment information

Presented below are the segment results for the comparable 12 months periods
ended 31 March.

*As explained in note 6 under corporate figures.

8.2 Other information

9. Exchange rates

For further information contact Brendan Beaumont or Onias Makamba on