| Wed 3 Mar 2010, 14:24 | | LAF - Lonrho Plc - Results for the year ended 30 September 2009 |
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LAF
LOLAF
LAF - Lonrho Plc - Results for the year ended 30 September 2009
LONRHO PLC
(Formerly Lonrho Africa Plc)
(Incorporated and registered in England and Wales)
(Registration number 2805337)
(Share code: LAF; ISIN number: GB0002568813)
("Lonrho" or "the Company")
Results for the year ended 30 September 2009
3 March 2010
Lonrho (AIM: LONR), the conglomerate with a structured portfolio of African
investments, is pleased to publish its audited results for the year ended 30
September 2009. These are in line with the quarterly report and trading
update released on 9th November.
Lonrho has continued to develop its investments in infrastructure, transport,
agribusiness, hotels and support services.
Financial Review
The financial results remain in line with the Company`s expectations. The year
has been pivotal in demonstrating the effectiveness of Lonrho`s investment
strategy, with all of the Companies operating businesses contributing towards
a considerable increase in Lonrho`s turnover and profitability
- Turnover increased by 111% to GBP90.9m (up from GBP43.1m in 2008)
- Net assets increased by 16.4% to GBP81.1m (up from GBP 69.7m in 2008)
- Loss before tax reduced to GBP4.5m from GBP38.7m in 2008
David Lenigas, Executive Chairman of Lonrho commented:
"I am delighted that the Lonrho management teams have demonstrated significant
progress delivering real growth and strong tangible businesses on the ground.
Turnover for the year has risen to GBP90.9m and each established operating
business is cash positive. Lonrho has produced EBITDA positive results for the
year proving that the Company has delivered on its commitments.
The solid foundations that are now in place across all five divisions, in
seventeen countries, provide the building blocks for further development and
profitable growth this year. Lonrho has minimal debt and with these impressive
full year results, each of the divisions is in a good position to raise local
debt to help fund further expansion.
The future African economy is being driven by oil, mineral resources and
agriculture. Lonrho is ideally placed to participate in and benefit from these
specific market opportunities across the continent."
LONRHO ENQUIRIES
Lonrho Plc +44 (0)20 7016 5105
David Lenigas, Executive Chairman +44 (0)7881 825 378
Geoffrey White, Chief Executive Officer +44 (0)7717 307 308
David Armstrong, Finance Director +44 (0)7833 054 693
Pelham Bell Pottinger
Charles Vivian +44 (0) 20 7337 1538
+44 (0) 7977 297903
James MacFarlane +44 (0) 20 7337 1527
+44 (0) 7841 672 831
Beaumont Cornish Limited (Nomad)
Rosalind Hill Abrahams +44 (0) 20 7628 3396
Roland Cornish +44 (0) 20 7628 3396
Statutory accounts
The financial information set out in this announcement does not constitute the
company`s statutory accounts for the years ended 30 September 2009 or 2008.
The financial information for the year ended 30 September 2008 is derived from
the statutory accounts for that year. The audit of the statutory accounts for
the year ended 30 September 2009 is complete. The auditors reported on those
accounts; their report was unqualified and did not include references to any
matters to which the auditors drew attention to by way of emphasis without
qualifying their report.
The full annual report and financial statements are published on its web site
(www.lonrho.com) today and are being posted to shareholders.
Chairman`s Statement
David Lenigas
Executive Chairman
2nd March 2010
Lonrho has had an excellent twelve months in business. Against the background
of the year`s global economic turmoil, the Company has grown its operations,
improved profitability in its established businesses, enhanced management and
systems and has entered 2010 in a very strong position. The Company has little
debt, strong cash flow from operational businesses, and is well positioned to
grow turnover and profits in its core businesses in 2010.
It is widely accepted that the emerging African markets are taking on global
significance. With nearly a billion consumers, increasing political stability,
rising disposable incomes and unique resources Africa is a Continent whose
time has come and that will deliver strong growth over the coming decades.
Gross Domestic Product in Sub Saharan Africa (SSA) is forecast to grow at 7%
in 2010 (International Monetary Fund) and this growth is expected to continue
as the emerging economies of the region develop.
Lonrho`s strategy is to provide the services and industries that emergent
Africa requires and, implicit in that, to assist the development of the
Continent. The Company`s heritage of over one hundred years of building
businesses in Africa is unique.
The strength of the brand across the Continent, in all aspects of our
business, adds tangible commercial value to our operations.
Lonrho`s five operational divisions operate in seventeen countries and are
focused on supporting and servicing the three industries that are driving the
economic growth across SSA. These are:
Oil Agriculture Minerals
The African oil and gas industry is having a huge impact on the economies of
the established producing countries. Angola (the 2009 OPEC Chairman) is
producing 2 million barrels per day, overtaking Nigeria as the Continent`s
largest producer and Equatorial Guinea, which produces 450,000 barrels per
day. New finds in Uganda, Ghana, Cote D`Ivoire and along the east coast are
generating real economic growth opportunities. Currently Africa supplies 16%
of USA oil and this will grow over the coming few years to 25%. Likewise,
China has developed significant off-take agreements across the Continent to
fuel its burgeoning economic expansion and, in return, African infrastructure
is benefiting from massive Chinese investment. Lonrho is deeply involved in
providing support for the oil sector across the Continent as it develops
through projects such as our oil services port, Luba Freeport, serving West
Africa.
In agriculture, the macro forecasts for global production indicate that not
only does African agriculture have significant potential but, importantly,
that the World will actually rely on agricultural production from Africa to
meet demand over the coming decade. This is coupled with a growing domestic
market, approaching one billion people that need to be fed on the Continent
itself. Lonrho is a leading player in this market, stimulating and managing
production, distributing agricultural equipment and vertically integrating
agricultural logistics to take African produce from the grower to the
consumer, both within Africa and in Europe, the Middle East and Scandinavia.
The mineral wealth of Africa is well documented. With the growing political
stability across the Continent and the benefit of significant and growing
foreign direct investment, the mineral wealth of Africa is finally being
realised. Lonrho provides schools, hotels, transport, water, workers camps and
logistic services to the mining industry.
The multiplier effect of foreign direct investment and the development of each
new project in these three strategic industries stimulates growth and
development. Each investment benefits the surrounding economy creating
employment and in turn subsidiary investment opportunities and thus provides
regional socio-economic benefits, increasing the affluence of the market and
the number of consumers within Africa.
Africa is a phenomenally strong emerging market driven at the most basic level
by the World`s oil, agricultural and mineral requirements, which continue to
see growing demand.
Chief Executive`s Review
Geoffrey White
Director & Chief Executive Officer
2nd March 2010
During the year to 30th September 2009 Lonrho has successfully grown and
developed. The Company has delivered on its short term objective of
establishing a series of five core business sectors that provide the
fundamental building blocks from which the Company can grow and expand.
Financial Highlights of the 2008 / 2009 financial year are:
- Turnover for the financial year increased 266% on a like for like basis
and by 111% on a reported basis against the previous year
- 16.4% growth in net assets year on year from GBP69.7 million to GBP81.1
million
- Loss before tax reduced from GBP38.7 million to GBP4.5 million
In 2006 Lonrho was set a mandate by its institutional shareholders to build a
conglomerate focused solely on the emerging African market. The subsequent
three years have seen the Company define a clear and deliberate strategy
focused on five key business sectors. The Company has now invested in and
delivered the essential foundations of the businesses in each sector, namely:
Agribusiness Infrastructure Hotels Transport Support Services
The businesses have proven they are viable and sound investments and
importantly all the established operating businesses are cash positive. In
addition the Company continues to invest in the rollout of its existing
businesses into new markets.
Following the fundraising in December 2009, the Company enters 2010 in a
strong position. Lonrho has little debt, significant cash at bank, a well
understood commercial strategy, quality management teams in place and each
divisional operation is tried and tested. A notable achievement in three
years.
The corporate agenda is now to utilise these solid building blocks to
replicate, grow and support the Company`s divisions across the Continent,
utilising the management skills, experience and proven results of current
operations to expand into new countries where equivalent markets are
available.
Lonrho has developed its business divisions to be aligned with the oil,
agriculture and mineral industry sectors and to work with these expanding
industries both from an operational perspective and from a service industry
perspective. As the oil, agriculture and mineral industries grow across the
Continent, Lonrho`s market for supporting these industries expands.
As a result of its focus on the oil, agriculture and mineral industries,
Lonrho operations are inevitably focused on the African countries that are
seeing the strongest economic growth and development, such as Angola,
Equatorial Guinea and Mozambique.
Emerging markets are inherently risky and it is incumbent on the Company to
best manage risk. Lonrho has structured its operations so as to mitigate both
political risk and commercial risk as much as possible, thus providing a sound
platform for investors to approach Africa.
Lonrho operates its businesses across seventeen countries in Sub Saharan
Africa, thus mitigating political risk and exposure to any single country, and
divides its corporate activities into five core divisions, each division a
standalone entity with no recourse to other divisions, thus significantly
reducing commercial risk. This structure reduces investment risk in Africa
whilst providing unrestricted access to this exciting emerging market.
Agribusiness
- African agricultural output is growing significantly, driven by the
growth in domestic consumption and the expanding requirement for African
produce to be supplied into the global market.
- Rollex (51% holding), continues to be the central platform within
Lonrho`s Agribusiness division and year on year sales have risen 49%. The
Rollex strategic focus remains the vertical integration of the agriculture
market, taking African produce, processing and packaging it and delivering it
to both local and international markets including Europe, the Middle East and
Scandinavia. The division benefits from the continued development of
agriculture for local and export markets in Africa and the growing requirement
to deliver production from farm to consumer across the Continent. This market
sector provides a service that is growing in demand as African producers
increase output and also provides better margins than straight farming
operations.
- Rollex processes and packs fruit, vegetables, meat and fish for its
clients, which include leading retailers Shoprite, Woolworths, Pick n Pay and
Spar in Southern Africa as well as exporting to Tesco, Sainsburys, Marks &
Spencer, Spinneys and others globally.
- Rollex Freight and Rollex Cargo continue to grow their businesses
maximising the back-load efficiencies for the trucking fleet used for
collecting agricultural produce across Southern Africa.
- Building work continues on the John Deere distributorship for Angola (51%
holding) located in Catete, in the Bengo Province. John Deere Angola exhibited
at the Angolan National Agricultural Fair (FILPA) on the 14 July 2009. The
Lonrho John Deere stand attracted great interest and significant sales
enquiries and firm orders were received. Agricultural redevelopment remains a
primary Angolan Government objective. The Government has announced that it
intends to invest US$2 billion (GBP1.2 billion) in rebuilding Angolan
agriculture of which a reported US$350 million (GBP220 million) of financial
incentives is being made available to indigenous farmers to purchase
agricultural equipment.
Infrastructure
- Luba Freeport (63% holding), the Lonrho oil services terminal in the Gulf
of Guinea, is unique in West Africa in that it is a natural deep water port
situated in a large secluded bay providing depths of up to 45 metres. Luba is,
importantly, surrounded by open land. This allows it to have room for
expansion, in contrast to most African ports which are `city locked` and have
no further land available. Luba is Lonrho`s largest single asset.
- Noble Energy has committed to utilise the port as a central operational
base for its Gulf of Guinea operations. Noble is expected to develop into a
further major client for Luba, joining the extensive list of world class
tenants already established at the port, including companies such as
ExxonMobil, Baker Hughes, Schlumberger, Hess, M-I SWACO and SBM.
- Revenue at Luba has increased by 9% against the previous year. The
activity for the first half is showing strong signs of growth with new
drilling programs being initiated off-shore by several existing Luba tenants
and general oil industry confidence in the Gulf of Guinea is clearly growing.
- A new container scanner for the port has been purchased and is due to
arrive and be installed in early 2010. Once operational, the scanner will
provide the premier container scanner security service in Equatorial Guinea
and will be a major asset for the port.
- Kwikbuild Corporation Limited (70% holding) and its South African
subsidiary E-Kwikbuild (52% holding) provides prefabricated building solutions
for Africa. These include houses, schools, clinics, offices and workers` camps
for the mining and oil industry. E-Kwikbuild is a Black Empowerment Enterprise
company.
- The elections in South Africa this year led to a decrease in the number
of tenders that were issued as Government contracts. Since the year end there
has been a four-fold increase in the number of projects released for tender by
the South African Government. Kwikbuild has reacted to the opportunity created
by the upsurge in the tender process and has tendered for significant
potential volumes.
- Historically, E-Kwikbuild wins circa 40% of the tender applications that
it submits and, following the commissioning of a new production plant during
the year, has started to increase focus on export markets across the
Continent, including Tanzania, Kenya, Ghana, Angola, Mozambique, Uganda and
the DRC.
Hotels
- Hotel Cardoso in Mozambique (59% holding + Management Contract) has seen
average occupancy levels of close to 80% during the year and the hotel is
achieving an average room rate of over US$100 per night. The refurbishment of
the rooms, conference facilities and restaurant with its new terrace
overlooking the bay and the redevelopment of the park adjacent to the hotel,
including the new playground and coffee shop, have firmly re-established Hotel
Cardoso at the premier end of the Maputo hotel market.
- The Grand Karavia Hotel in Lubumbashi, DRC (50% holding + Management
Contract) continues with its US$20million (GBP12 million) refurbishment. The
hotel will provide the only international standard accommodation in
Lubumbashi, the centre of the burgeoning copper belt of the DRC. The recovery
of the copper sector in Lubumbashi continues and demand for hotel rooms is
expected to be strong when it opens in 2010. The executive management team
joined the company as from the 1st October 2009 as planned and are
implementing the pre-opening program.
Transport
- Lonrho`s pan African regional aviation business, Fly540, has continued to
expand its network and build on its reputation for reliability, safety and
punctuality. Fly540 remains focused on delivering the first international
standard regional African airline that services two key markets; regional
distribution for intercontinental carriers flying into Africa and the ability
for passengers in Africa to travel North to South and East to West across the
Continent.
- The East Africa hub is now fully operational based out of Nairobi serving
Kenya, Uganda, Tanzania, Southern Sudan and Burundi. Carrying 215,735 (2008:
171,160) passengers in 2009 the airline is operating to plan and continues to
build new routes as it grows.
- Fly540 Angola (60% holding) continues to work with the Angolan Civil
Aviation Authority to convert the Air Services Licence (ASL), received in July
2008, to the Air Operators Certificate (AOC) necessary to permit flight
operations to commence. It is expected that flight operations will commence in
the next two months.
- Initial destinations for Fly540 Angola will include the major centres of
Cabinda, Luanda, Soyo, Benguela, Huambo, and Malanje and thereafter will grow
to fifteen domestic destinations. Operations are centred out of Cabinda (the
centre of the oil industry) and Luanda. Lonrho plans to initially deploy a new
ATR72 aircraft to Angola to establish the primary routes and further aircraft
as the operation grows. The Company is in the process of concluding the
necessary financing arrangements.
- Fly540 Ghana (60% holding) has been awarded an ASL by the Ghana Civil
Aviation Authority and is rapidly finalising the process to convert this to an
AOC. Flight operations are expected to commence during the first half of 2010.
- Fly540 Zimbabwe (a LonZim company) plans to commence operations in 2010.
Support Services
- Bytes & Pieces (65% holding) is the market leader in the IT sector in
Mozambique and continues to grow as a result of expanding business to existing
clients as the market benefits from the continued economic growth of
Mozambique.
- Lonrho IT (CES, 50% holding + Board control) continues to grow its
operations across Southern Africa. In South Africa the Johannesburg and
Nelspruit offices continue to expand.
- CES Zambia (45% holding+ Board control) started trading in quarter three
of the financial year and is already on track to achieve US$1m turnover in the
first 12 months of operation.
- Lonrho Water focuses on two strategic sectors, water bottling for
domestic consumption and water purification plants. On the bottling side, the
company continues operating in Mozambique and DRC, and is constructing a 4
million litre per month plant in Angola to serve the Luanda market. The water
purification plants are scaleable units designed into 40ft containers that are
applicable to rural communities, corporations, municipalities and industrial
or domestic use where there is a requirement for potable standard water from a
local source.
LonZim Plc
- LonZim Plc (LonZim), in which Lonrho currently has a 24.61% shareholding
and a management contract, has built a business portfolio that consists of
eight businesses centred on the hotel, IT, real estate, security printing
logistics and distribution sectors.
- LonZim reported on 15 October 2009 that the portfolio of businesses
acquired over the past two years reflected (at acquisition cost) that LonZim`s
market capitalisation represented a 62% discount to the cost of the businesses
acquired. Asset value per share was stated as 101.6p. Profit before tax for
the year to 31 August 2009 was GBP0.9million.
Financing Activities
- Lonrho announced on 11 November 2008 that it had raised GBP15.6m for the
completion of its existing capital and development programs. On 11 August
2009, the Company announced that it had raised GBP2.5m to complete the
acquisition agreement in relation to Rollex Pty.
- Post year end, on 9 December 2009, Lonrho announced that it had raised
GBP25.1m to increase its equity position in its core businesses, including its
agricultural and prefabricated buildings divisions, and for working capital.
Corporate Social Responsibility
Lonrho believes that its investments and acquisitions in Africa encourage job
creation and help to stimulate economic activity in those countries in which
it operates. The Group endeavours to make a positive difference to the local
communities in which its companies are based.
- Luba Freeport continues to sponsor the local school which provides
education for over 100 children. Domestic waste disposal services are also
provided for the town of Luba. Students are employed on an annual basis
providing valuable work experience.
- Fly540 recently paid for the construction of a kitchen block at the Imani
Childrens Home, which will greatly improve the quality of life of the children
in the home. Fly540 also hosted their Christmas Party, provides free flights
to their branches and sponsors the further education of a number of children.
- Fly540 also provided free flights to doctors involved in Operation Smile,
sponsored the Children`s Christmas Party at the Terry Hope Centre, and has
provided assistance in the form of flights or donations to eleven local
community organisations.
- As part of Fly540`s ongoing commitment to preserving the environment,
Fly540 has been involved in tree planting in both Mombasa and Nairobi as a
contribution towards the drive to preserve the water catchment areas in Kenya.
It has also supported and promoted the cleaning up of the beach, and was
involved in tree planting, in Bujumbura, Burundi.
- Hotel Cardoso funded the repainting of the local school buildings which
was completed in December 2008. The second and final stage of the landscaping
of the park adjacent to the Hotel, Zona de Jogos, which has been funded by the
Hotel, was also completed, along with an amphitheatre for use by
schoolchildren and the public. The park provides a good safe venue for
children at the adjacent school to use during breaks and after school hours. A
cafe was opened in March 2009 employing 23 additional staff.
- Hotel Cardoso donated furniture, bed linen and towels arising from the
refurbishment undertaken at the Hotel to a local organisation.
- Hotel Cardoso also provides an in-house clinic for 178 staff members and
their immediate families, with a full time nurse and a qualified doctor that
visits the clinic twice daily.
- E-Kwikbuild donated two care centres for underprivileged pre-school
children in Cape Town.
- E-Kwikbuild also made a cash donation towards essential equipment for a
medical facility in Khayalitshe in Cape Town and a number of smaller donations
to local community organisations to assist them with building facilities.
Lonrho recognises that employment is key to the growth of Africa and currently
employs over 1,100 people throughout the Group. All employees are treated
equally and with respect, and the Company encourages internal and external
training of staff where appropriate to develop requisite knowledge and skills.
E-Kwikbuild is creating employment for subcontractors to erect the buildings
that they manufacture. The necessary training is provided and quality checks
are carried out on their work in the field. This is recognised as a transfer
of skills by the South African Government and contributes towards the
company`s Black Economic Empowerment status.
Lonrho aims to protect the environment and has an office recycling policy
whereby waste paper is recycled where possible. Company stationary and
business cards are produced using recycled stock and Annual and Interim
Reports are printed on `9 lives 55` stock, which is produced with 55% recycled
fibre together with 45% FSC certified virgin fibre from well managed forests.
A policy to reduce carbon emissions in the workplace is being developed.
To maximise the benefit to the communities in which Lonrho operates, the Group
will continue to develop its corporate and social responsibility programme
over the coming year. A Committee of the Board of Lonrho Plc has recently been
established to promote this further.
Executive Directors
David Lenigas Executive Chairman
David Lenigas holds a Bachelor of Applied Science in Mining Engineering. He
has extensive experience operating in the public company environment and is
currently the Chairman of LonZim Plc, Leni Gas & Oil Plc, Templar Minerals
Limited, Solo Oil Plc, Zest Group Plc and Lonrho Mining Limited and is a non-
executive Director of Vatukoula Gold Mines Plc.
Geoffrey White
Director & Chief Executive Officer
Geoffrey White holds a BSc in Economics and
Management Science. During his 28 year career he has held senior management
roles with Thomas Tilling Plc, BTR Plc, Dee Corporation Plc, Asda Plc and
latterly worked for five years for a private investment fund based in London.
He has been responsible for the planning, financing, development and
management of a range of projects in the leisure, industrial and natural
resource sectors. These projects include establishing joint ventures with
international corporations such as Hilton Hotels International, Ford Motors
(PAG), Praton International GmbH and FFS Refiners (pty) Ltd. He is also an
Executive Director of LonZim Plc.
David Armstrong Finance Director
David Armstrong (FCA) brings with him extensive experience of operating across
Africa having been, until October 2004, the Commercial Director of Diageo
Africa with combined functional responsibility for finance, information
systems, strategy and business development. He contributed to the successful
deployment of Diageo`s pan-African growth strategy, encompassing over 50
countries. More recently, he has been the COO of McArtherGlen in the UK and
Europe. He is also Finance Director of Lonzim Plc.
Emma Priestley Executive Director
Emma Priestley worked in investment banking for 5 years following a career as
a mining engineer. She has a background in mining and financial services
having worked with consultants IMC Mackay & Schnellman, investment bank CSFB,
advisors VSA resources and Ambrian Partners, where she worked as a corporate
broker and advisor. Emma is a graduate of Camborne School of Mines, a
Chartered Mining Engineer and Chartered Mineral Surveyor. She is also an
Executive Director of LonZim Plc.
Non-Executive Directors & General Counsel
Jean Ellis Non-Executive Director
Jean Ellis is a Chartered Accountant and Chartered Tax Advisor, and holds an
Insolvency Practitioner`s license. She is the senior partner in the regional
firm of Chartered Accountants, Duncan Sheard Glass, having been a partner
there since 2002. Prior to this, she was Group Financial Controller and Tax
Manager with Lonrho Plc and holds a number of directorships for its subsidiary
companies. Jean has a Bachelor of Arts Degree in Pure Mathematics from
Liverpool University. She was formerly Finance Director of Lonrho Plc and
Lonzim Plc and is currently a Non-Executive Director of Lonzim Plc.
Donald Strang Non-Executive Director
Donald Strang is a Chartered Accountant with over 16 years experience in
financial management predominantly within the natural resources sector. He has
previously held financial positions with several publicly listed mining
companies (including Global Coal Management Plc, Brinkley Mining Plc, Macraes
Mining Company Limited and Perilya Mines Limited), Ernst & Young and in the
investment banking sector.
Ambassador Frances Cook Non-Executive Director
A former U.S. ambassador to Burundi, to Cameroon and to the Sultanate of Oman,
Ambassador Cook also held numerous senior positions in the Department of
State, including Deputy Assistant Secretary of State for Refugee Programs, and
Deputy Assistant Secretary of State for Political-Military Affairs, Consul
General in Alexandria, Egypt, and Director for West Africa. She transitioned
to the private sector in May 1999, where she runs an international business
consulting firm, The Ballard Group llc. Ambassador Cook currently serves on
the boards of Alliant Techsystems (NYSE) and Global Options Group (NASDAQ),
and the Corporate Council on Africa. She is a Senior Fellow at the Center for
Naval Analyses, and a member of the Council on Foreign Relations. She was
educated at the Universities of Virginia and Harvard, and resides in
Washington, D.C.
Michael Bennett General Counsel
Michael Bennett has a BA LLB degree from Rhodes University in South Africa and
was admitted as a legal practitioner in the Republic of Zimbabwe in 1996. He
practiced law at one of the biggest firms in Zimbabwe before moving to the
United Kingdom in 2000 and joined a corporate law firm in central London
specialising in mergers and acquisitions and AIM related transactional work.
He qualified as an English solicitor in 2001 becoming a partner in 2004.
Michael has specialised in the acquisition and disposal of companies across a
variety of sectors and in jurisdictions ranging across Africa, Europe, the
former Soviet Union and North America.
Statement of Directors` responsibilities in respect of the
Annual Report and Accounts 2009
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company
financial statements for each financial year. As required by the AIM Rules of
the London Stock Exchange they are required to prepare the Group financial
statements in accordance with IFRSs as adopted by the EU and applicable law
and have elected to prepare the parent Company financial statements on the
same basis.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and parent Company and of their profit or loss for that
period. In preparing each of the Group and parent Company financial
statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and estimates that are reasonable and prudent;
- state whether they have been prepared in accordance with IFRSs as adopted
by the EU; and
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group and the parent Company will continue
in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the parent Company`s transactions and disclose
with reasonable accuracy at any time the financial position of the parent
Company and enable them to ensure that its financial statements comply with
the Companies Act 2006. They have general responsibility for taking such steps
as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
Report of the Directors
For the year ended 30 September 2009
The Directors of Lonrho Plc submit their report, together with the audited
financial statements for the year ended 30 September 2009.
The Company number is 2805337.
Principal activities
The Group has re-established itself as a pan-African Group with a diverse
portfolio of investments. In order to create maximum value for shareholders
the management is implementing the investment strategy outlined in the
Chairman`s Statement.
Business review and development
The Chairman`s statement and the Chief Executive`s review of operations
contain information on developments during the year and key potential future
developments.
The requirements of the enhanced business review in relation to strategy and
progress thereon are contained in the Chairman`s statement and the Chief
Executive`s review of operations. The principal risks and uncertainties relate
to the revenue generation in the Group`s businesses, which being located in
Africa are subject to respective government policies, political stability and
general economic conditions in the relevant country. Other risks to which the
Group is exposed are the lack of suitably experienced management and exposure
to foreign currency movements.
The Group monitors cash flow as its primary key performance indicator. Given
the current global financial situation, the Directors are carefully monitoring
cash resources within the Group and have instigated a number of initiatives to
ensure funding will be available for planned projects. The operating cash
outflow for the year to 30 September 2009 was GBP14.5 million (2008: GBP35.7
million). If such funding cannot be secured, the projects will be delayed or
cancelled to ensure that the Group can manage its cash resources for the
foreseeable future and hence the financial statements have been prepared on a
going concern basis. The group has raised additional capital since the year
end (note 35). The Group also uses a number of other key performance
indicators which are measured at different tiers in the operation. At the top
level, the Group tracks turnover, gross margin, contribution to overheads,
cash generation and performance against budget. The Group uses a number of
specific, non-financial, key performance indicators at individual business
levels. For example passenger numbers and load factors for Fly540, occupancy
levels at Hotel Cardoso, and ship movements at Luba Freeport.
The Directors wish to mitigate risk by proper evaluation of every investment
that is made and have therefore developed a risk analysis reporting procedure,
which links into the Company`s Corporate Governance procedures. The Group is
continuing to strengthen its management team by the recruitment of highly
experienced individuals.
Further information concerning the Group`s policies and exposure to financial
risk can be found in note 29 to the financial statements.
Post balance sheet events
Details of the significant events since the balance sheet date are contained
in note 35 to the financial statements.
Dividend
The Directors do not recommend the payment of a dividend (2008 GBPnil).
Corporate governance
Compliance with the Combined Code
The Directors recognise the value of the Combined Code on Corporate Governance
and, whilst under AIM rules full compliance is not required, the Directors
have considered the recommendations and applicability insofar as is
practicable and appropriate for a public company of its size.
Board of Directors
The Board of Directors currently comprises four Executive Directors, one of
whom is the Chairman, and three Non-Executive Directors. The Directors are of
the opinion that the Board comprises a suitable balance to enable the
recommendations of the Combined Code to be implemented to an appropriate
level. The Board, through the Chairman in particular, maintains regular
contact with its advisers and public relations consultants in order to ensure
that the Board develops an understanding of the views of the major
shareholders about the Company.
The Board meets quarterly and is responsible for formulating, reviewing and
approving the Company`s strategy, financial activities and operating
performance. Day to day management is devolved to the executive management
who are charged with consulting the Board on all significant financial and
operational matters. Consequently decisions are made promptly following
consultation amongst the Directors and managers concerned where necessary and
appropriate.
All necessary information is supplied to the Directors on a timely basis to
enable them to discharge their duties effectively, and all Directors have
access to independent professional advice, at the Company`s expense, as and
when required.
The Chairman is available to meet with institutional shareholders to discuss
any issues and concerns regarding the Group`s governance. The Non-Executive
Directors may also attend meetings with major shareholders if requested.
The participation of both private and institutional investors at the Annual
General Meeting is encouraged by the Board.
Internal controls
The Directors acknowledge their responsibility for the Company`s and the
Group`s systems of internal control, which are designed to safeguard the
assets of the Group and ensure the reliability of financial information for
both internal use and external publication. Overall control is ensured by a
regular detailed reporting system covering the state of the Group`s financial
affairs. The Board has implemented procedures for identifying, evaluating and
managing the significant risks that face the Group.
Any system of internal control can provide only reasonable, and not absolute,
assurance that material financial irregularities will be detected or that the
risk of failure to achieve business objectives is eliminated.
Committees
The Board has devolved duties to the following committees:
Executive Committee
The Executive Committee ("the Committee") comprises the Executive Directors
and senior managers including the Group`s General Counsel, Group Financial
Controller and the Business Development Manager. The Chairman of the Committee
is David Lenigas or, in his absence, Geoffrey White. Its terms of reference
indicate at least 8 regular meetings per year. The Committee`s primary
responsibilities are to review the operating performance of each Group
operating company, manage the Group`s strategic planning process and corporate
acquisition and disposal programme, monitor and approve capital expenditure
and contracts entered into by the Group and to manage the Group`s HR policies.
Audit Committee
The Audit Committee ("the Committee") comprises three Directors, two of whom
are Non-Executive Directors. The current members are Donald Strang (Chairman),
Jean Ellis and Geoffrey White. Its terms of reference indicate at least three
regular meetings per year. The Committee`s primary responsibilities are to
review the effectiveness of the Company`s systems of internal control and
financial reporting systems (including financial, operational, compliance and
risk management), to review with the external auditors the nature and scope of
their audit and the results of the audit, to evaluate and select external
auditors ensuring their independence and objectivity, and to review the
Company`s financial statements.
Remuneration Committee
The Remuneration Committee ("the Committee") comprises three Directors, two of
whom are Non-Executive Directors. The current members are Donald Strang
(Chairman), Ambassador Frances Cook and David Armstrong. Its terms of
reference indicate at least two regular meetings per year. The Company`s
policy is to remunerate senior executives fairly in such a manner as to
facilitate the recruitment, retention and motivation of staff. The Committee
will agree with the Board a framework for the remuneration of the Chairman,
the Executive Directors and the senior management of the Group.
The principal objective of the Committee is to ensure that members of the
executive management of the Company are provided incentives to encourage
enhanced performance and are, in a fair and responsible manner, rewarded for
their individual contributions to the success of the Company bearing in mind
inter alia the size, profitability, market capitalisation of the Group, its
reputation and performance relative to other companies, the performance of
individuals and the best interests of shareholders. Non-Executive Directors`
fees are considered and agreed by the Board as a whole.
Nomination Committee
The Nomination Committee ("the Committee") comprises three Directors, two of
whom are Non-Executive Directors. The current members are Jean Ellis
(Chairperson), Ambassador Frances Cook and Geoffrey White. Its terms of
reference indicate at least two regular meetings per year. The Committee`s
primary responsibility is to identify candidates to fill Board vacancies as
and when they arise, give consideration to succession planning, review the
structure, size and composition of the Board and to review the leadership
needs of the organisation.
Directors
The present Board of the Company is set out on pages 8 and 9. On 1 December
2008 Mr D Armstrong was appointed as Finance Director and Mrs J M Ellis, who
previously held the position, became a Non-Executive Director. Mr D A Lenigas,
Mr G T White, Ms E K Priestley, Mr D I G L Strang and Ambassador F D Cook
served as Directors throughout the year.
At the forthcoming Annual General Meeting, Mrs J M Ellis and Mr G T White will
retire by rotation. Being eligible, they will offer themselves for re-
election. Biographical details of all Directors are set out on page 8 and 9.
Directors` share interests
The Directors at the year-end are set out below. All Directors served
throughout the year unless otherwise indicated.
At
01.10.08
At or date
30.09. of
09 appointme
No of nt if
shares later
No of
shares
D A Lenigas 250,00 250,000
0
G T White 200,00 200,000
0
D Armstrong (appointed 1 December 2008) 200,00 Nil
0
E K Priestley 40,712 40,712
Ambassador F Cook Nil Nil
J M Ellis 4,000 4,000
D I G L Strang Nil Nil
All of the above interests are recorded in the Company`s Register of
Directors` Share and Debenture Interests. No Director has a beneficial
interest in the shares or debentures of any of the Company`s subsidiary
undertakings. There have been no changes in Directors` share interests since
30 September 2009.
Share options
During the year, unapproved share options were granted over ordinary shares
and the exercise price of options previously granted amended, as set out
below. These options are embodied in an individual contract between the
Company and the individual and have been granted under The Lonrho Plc
Unapproved Share Option Plan.
As at Original Granted As at Adjusted
1.10.2008 exercise during 30.09.09 exercise
price the year price Exercise
period
D A 3,500,000 17p - 3,500,000 6.5p Jan 2006 -
Lenigas Jan 2011
D A 3,750,000 34.5p - 3,750,000 6.5p April 2007
Lenigas - April
2012
D A 1,615,000 44p - 1,615,000 6.5p July 2007 -
Lenigas July 2012
D A - - 2,500,000 2,500,000 6.5p Jan 2009 -
Lenigas Jan 2014
G T White 2,500,000 34.5p - 2,500,000 6.5p April 2007
- April
2014
G T White 1,065,000 44p - 1,065,000 6.5p July 2007 -
July 2012
G T White - - 2,000,000 2,000,000 6.5p Jan 2009 -
Jan 2014
D - - 1,000,000 1,000,000 6.5P Jan 2009 -
Armstrong Jan 2014
E K 1,250,000 22.5p - 1,250,000 6.5p April 2006
Priestley - April
2011
E K 1,250,000 34.5p - 1,250,000 6.5p April 2007
Priestley - April
2012
E K 1,065,000 44p - 1,065,000 6.5p July 2007 -
Priestley July 2012
E K - - 1,000,000 1,000,000 6.5p Jan 2009 -
Priestley Jan 2014
F D Cook - - 500,000 500,000 6.5p Jan 2009 -
Jan 2014
J M Ellis 350,000 44p - 350,000 6.5p July 2007 -
July 2012
J M Ellis - - 500,000 500,000 6.5p Jan 2009 -
Jan 2014
D I G L 500,000 34.5p - 500,000 6.5p April 2007
Strang - April
2012
D I G L 200,000 44p - 200,000 6.5p July 2007 -
Strang July 2012
D I G L - - 500,000 500,000 6.5p Jan 2009 -
Strang Jan 2014
Insurance
The Company has effected Directors and Officers Liability insurance cover for
Group Directors.
Substantial shareholdings
The Directors have been advised of the following shareholdings at 26th
February 2010 in 3 per cent. or more of the Company`s issued share capital:
Declared Substantial Number of Shares % of Issued Capital
Shareholdings
Mackenzie Cundill 130,908,213 12.46%
Investment Management
Ltd
Capital Research and 101,202,000 9.64%
Management Company
Zesiger Capital Group 87,966,000 8.38%
LLC
Capital Group 84,270,915 8.02%
International, Inc
Eton Park Master 70,000,000 6.67%
Fund, Ltd
L.R. Global Partners 51,637,216 4.92%
L.P. and L.R. Global
Fund Ltd
Share price performance
Between 1 October 2008 and 30 September 2009 the share price in London varied
between a high of 17.00p and a low of 2.35p and in Johannesburg a high of Rand
4.10 and a low of Rand 0.35. At 30 September 2009 the mid-market price of the
shares was 8.03p in London and Rand 1.22 in Johannesburg. At 26th February
2010, the mid-market price of the shares was 13.00p in London and Rand 1.60 in
Johannesburg.
Political and charitable donations
The Company made a charitable donation of GBP3,000 to Sinenjongo High School
in Cape Town.
No other political or charitable donations, save for those disclosed on page
7, have been made by the Group during the year. The Group is involved in a
number of charitable projects through its subsidiaries and investments,
details of which are set out on page 7.
Payment to suppliers
The Group does not follow any code or standard with regard to the payment of
its suppliers. The Group`s policy is to agree terms and conditions with
suppliers in advance; payment is then made in accordance with the agreement
provided the supplier has met the terms and conditions. Amounts due to
suppliers at the balance sheet date are contained in note 27.
City Code on Takeovers and Mergers
The Panel on Takeovers and Mergers confirmed that, at the date the Listing
Particulars were issued in May 1998, Lonrho was subject to the City Code on
Takeovers and Mergers (the "Code"). The Directors believe that, so far as is
practicable, they have operated and will continue to operate the Group so that
it will continue to be subject to the Code.
Auditors
A resolution to re-appoint KPMG Audit Plc and to authorise the Directors to
fix their remuneration will be proposed at the Annual General Meeting in
accordance with section 489 of the Companies Act 2006.
The Directors who held office at the date of approval of this Directors`
Report confirm that, so far as they are each aware, there is no relevant audit
information of which the Company`s Auditors are unaware; and each Director has
taken all the steps that he/she ought to have taken as a Director to make
himself/herself aware of any relevant audit information and to establish that
the Company`s Auditors are aware of that information.
Annual General Meeting
The Annual General Meeting will be held on Wednesday 31st March 2010 at
11.00am at The Great Hall, Merchant Taylors` Hall, 30 Threadneedle Street,
London, EC2R 8JB.
By order of the Board
J. Hughes
Company Secretary
2nd March 2010
Independent Auditors` Report to the Members of
Lonrho Plc
We have audited the financial statements of Lonrho Plc for the year ended 30
September 2009 set out on pages 17 to 64. The financial reporting framework
that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the EU and, as regards the
parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
This report is made solely to the Company`s members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company`s members those matters we
are required to state to them in an auditors` report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company`s members, as
a body, for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors` Responsibilities Statement set out
on page 10, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board`s (APB`s)
Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on
the APB`s web-site at www.frc.org.uk/apb/scope/UKNP
Opinion on financial statements
In our opinion:
- the financial statements give a true and fair view of the state of the
Group`s and of the parent Company`s affairs as at 30 September 2009 and of the
group`s loss for the year then ended;
- the group financial statements have been properly prepared in accordance
with IFRSs as adopted by the EU;
- the parent Company financial statements have been properly prepared in
accordance with IFRSs as adopted by the EU and as applied in accordance with
the provisions of the Companies Act 2006; and
- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors` Report for the
financial year for which the financial statements are prepared is consistent
with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
- the parent Company financial statements are not in agreement with the
accounting records and returns; or
- certain disclosures of directors` remuneration specified by law are not
made; or
- we have not received all the information and explanations we require for
our audit.
I K Bone (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants, 8 Salisbury Square, London EC4Y 8BB
2 March 2010
Consolidated Income Statement
for the year ended 30 September 2009
Not Conti 2009 Total Contin 2008 Total
e nuing GBPm uing GBPm
opera Disconti operat Disconti
tions nued ions nued
GBPm operatio GBPm operatio
ns ns
GBPm GBPm
Revenue 4,5 89.7 1.2 90.9 24.5 18.6 43.1
Cost of 6 (72.8 (1.9) (74.7 (15.6) (38.3) (53.9)
sales ) )
GROSS 16.9 (0.7) 16.2 8.9 (19.7) (10.8)
PROFIT/(LO
SS)
Gain on 8 - - - 5.8 - 5.8
sale of
intangible
asset
Other 6 1.1 2.2 3.3 0.3 - 0.3
operating
income
Impairment 9,1 - - - (0.6) (5.1) (5.7)
of 4
goodwill
Operating 6 (29.5 (0.1) (29.6 (22.6) (4.8) (27.4)
costs ) )
OPERATING (11.5 1.4 (10.1 (8.2) (29.6) (37.8)
LOSS ) )
Finance 11 6.6 - 6.6 6.6 - 6.6
income
Finance 11 (1.2) - (1.2) (0.8) (2.7) (3.5)
expense
NET 5.4 - 5.4 5.8 (2.7) 3.1
FINANCE
INCOME/(EX
PENSE)
Share of 17 0.4 - 0.4 (4.0) - (4.0)
results of
associates
Share of 17 (0.2) - (0.2) - - -
results of
joint
ventures
PROFIT/(LO (5.9) 1.4 (4.5) (6.4) (32.3) (38.7)
SS) BEFORE
TAX
Income tax 12 (0.8) - (0.8) (0.2) (2.1) (2.3)
charge
PROFIT/(LO (6.7) 1.4 (5.3) (6.6) (34.4) (41.0)
SS) FOR
THE YEAR
ATTRIBUTAB
LE TO:
Equity 23 (7.6) 1.4 (6.2) (5.7) (27.6) (33.3)
holders of
the parent
Minority 23 0.9 - 0.9 (0.9) (6.8) (7.7)
interest
LOSS FOR (6.7) 1.4 (5.3) (6.6) (34.4) (41.0)
THE YEAR
EARNINGS
PER SHARE
Basic loss 13 (1.06 0.20 (0.86 (1.5) (7.5) (9.0)
per share ) )
(pence)
Diluted 13 (1.06 0.20 (0.86 (1.5) (7.5) (9.0)
loss per ) )
share
(pence)
The notes on pages 21 to 64 are an integral part of these financial
statements.
Company and Consolidated Statements of Recognised
Income and Expense
for the year ended 30 September 2009
Group Company
2009 2008 2009 2008
GBPm GBPm GBPm GBPm
No
te
Foreign exchange translation 23 (2.8) 0.4 - -
differences
Revaluation of property, 15 - 4.9 - -
plant and equipment
Deferred tax on revaluation 12 - (1.0) - -
of property, plant and
equipment
NET INCOME RECOGNISED (2.8) 4.3 - -
DIRECTLY IN EQUITY
Loss for the year (5.3) (41.0) (7.0) (7.2)
Total recognised expense for (8.1) (36.7) (7.0) (7.2)
the year
ATTRIBUTABLE TO: (8.6) (31.4)
- Equity holders of the 0.5 (5.3) (7.0) (7.2)
parent - -
- Minority interest
Total recognised expense for (8.1) (36.7) (7.0) (7.2)
the year
The notes on pages 21 to 64 are an integral part of these
financial statements.
Company and Consolidated Balance Sheets
as at 30 September 2009
Note Group Company
2009 2008
2009 GBPm GBPm
GBPm 2008
GBPm
ASSETS
Goodwill 14 14.2 5.1 - -
Other intangible assets 14 3.4 0.8 - -
Property, plant and 15 69.8 56.8 - -
equipment
Investments in subsidiaries 16 - - 31.5 31.5
Investments in associates 17 9.2 8.8 7.7 7.3
and joint ventures
Other investments 18 0.6 0.7 - -
Deferred tax 19 - - - -
TOTAL NON-CURRENT ASSETS 97.2 72.2 39.2 38.8
Inventories 20 3.4 2.2 - -
Trade and other receivables 21 32.4 11.6 56.3 45.4
Cash and cash equivalents 22 6.9 10.2 - -
Assets classified as held 9 - 2.6 - -
for sale
TOTAL CURRENT ASSETS 42.7 26.6 56.3 45.4
TOTAL ASSETS 139.9 98.8 95.5 84.2
EQUITY
Share capital 23 8.0 4.6 8.0 4.6
Share premium account 23 104.7 91.3 104.7 91.3
Revaluation reserve 23 4.1 4.5 - -
Share option reserve 23 2.5 2.2 2.5 2.2
Translation reserve 23 (2.0) - - -
Retained earnings 23 (39.2) (33.0) (21.3 (14.3)
)
TOTAL EQUITY ATTRIBUTABLE
TO EQUITY
HOLDERS OF THE COMPANY 78.1 69.6 93.9 83.8
MINORITY INTEREST 23 3.0 0.1 - -
TOTAL EQUITY 81.1 69.7 93.9 83.8
LIABILITIES
Financial liabilities 25 0.3 0.3 - -
Interest bearing loans and 24 15.3 - - -
borrowings
Deferred tax 19 3.0 1.7 - -
Obligations under finance 24 1.1 1.1 - -
leases
TOTAL NON-CURRENT 19.7 3.1 - -
LIABILITIES
Bank overdraft 22 0.9 0.4 0.7 -
Interest-bearing loans and 24 1.5 3.3 - -
borrowings
Obligations under finance 24 0.2 0.2 - -
leases
Trade and other payables 27 36.5 13.8 0.9 0.4
Liabilities classified as 9 - 8.3 - -
held for sale
TOTAL CURRENT LIABILITIES 39.1 26.0 1.6 0.4
TOTAL LIABILITIES 58.8 29.1 1.6 0.4
TOTAL EQUITY AND 139.9 98.8 95.5 84.2
LIABILITIES
The notes on pages 21 to 64 are an integral part of these financial
statements.
These financial statements were approved by the Board of Directors and
authorised for issue on 2 March 2010. They were signed on its behalf by:
Geoffrey White
Director
Company and Consolidated Cash Flow Statements
for the year ended 30 September 2009
No
te Group Company
2009 2008 2009 2008
GBPm GBPm GBPm GBPm
CASH FLOWS FROM OPERATING 28 (5.3) (41.0) (7.0) (7.2)
ACTIVITIES Loss for the (0.7) 6.6 0.3 -
year
Adjustments
CASH FLOWS FROM OPERATING
ACTIVITIES BEFORE
MOVEMENTS IN WORKING (6.0) (34.4) (6.7) (7.2)
CAPITAL
Change in inventories (1.1) (0.5) - -
Change in trade and other (16.7) (5.4) (10.9) (44.7)
receivables
Change in trade and other 10.1 0.4 0.5 -
payables
CASH GENERATED FROM (13.7) (39.9) (17.1) (51.9)
OPERATIONS
Interest received 0.2 7.1 - -
Interest paid (1.0) (2.7) - -
Income tax paid - (0.2) - -
NET CASH FROM OPERATING (14.5) (35.7) (17.1) (51.9)
ACTIVITIES
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds from the sale of 3.7 - - -
property, plant and
equipment
Acquisition of subsidiary, 7 (2.5) (2.1) - -
net of cash acquired
Deposits paid in respect of - (4.4) - -
property, plant and
equipment
Acquisition of property, (14.7) (12.5) - -
plant and equipment
Acquisition of associates (2.4) (1.3) (0.4) -
and joint ventures
NET CASH FROM INVESTING (15.9) (20.3) (0.4) -
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from the issue of 16.8 51.9 16.8 51.9
share capital
Loan advance 11.4 0.1 - -
Repayment of borrowings (1.1) (1.1) - -
Payment of finance lease (0.2) (0.2) - -
liabilities
NET CASH FROM FINANCING 26.9 50.7 16.8 51.9
ACTIVITIES
Net decrease in cash and (3.5) (5.3) (0.7) -
cash equivalents
Cash and cash equivalents 9.4 14.5 - -
at 1 October
Foreign exchange movements 0.1 0.2 - -
CASH AND CASH EQUIVALENTS 22 6.0 9.4 (0.7) -
AT 30 SEPTEMBER
The notes on pages 21 to 64 are an integral part of these
financial statements.
Notes to the Company and Consolidated Financial
Statements
1 Reporting entity
Lonrho Plc (the "Company") is a company incorporated and domiciled in the
United Kingdom. The consolidated financial statements of the Company for the
year ended 30 September 2009 comprise the Company and its subsidiaries
(together referred to as the "Group") and the Group`s interest in associates
and jointly controlled entities.
The financial statements were authorised for issue by the Directors on 2nd
March 2010.
2 Basis of preparation
Statement of compliance
Both the parent Company and the consolidated financial statements have been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union (Adopted IFRS). On publishing the parent
Company financial statements here together with the Group financial
statements, the Company is taking advantage of the exemption in section 408(4)
of the Companies Act 2006 not to present its individual income statement and
related notes that form a part of these approved financial statements. The
loss of the Company is disclosed in note 23 to the accounts.
Going concern
Given the current global financial crisis, the Directors are carefully
monitoring cash resources within the Group and have instigated a number of
initiatives to ensure funding will be available for planned projects. As
described in note 35, the Company has raised GBP25.1 million in December 2009
through share issues.
Functional and presentation currency
The financial statements are presented in pounds sterling which is the
Company`s functional currency. All financial information presented has been
rounded to the nearest GBP0.1 million.
Basis of measurement
The financial statements have been prepared on the historical cost basis
except for the revaluation of certain long leasehold properties, and the
recognition of available-for-sale financial assets at fair value.
At the date of authorisation of the financial statements, the following
Standards and Interpretations which have not been applied to these financial
statements were in issue but not yet effective:
- Revised IFRS 3 - Business combinations
- Amendments to IFRS 1 and IAS 27 - Cost of an investment in a -subsidiary,
jointly controlled entity or associate
- Amendments to IFRS 2 - Share based payments
- Amendments to IFRS7 - Financial Information Disclosure
- Amendments to IFRS 8 - Segment reporting
- Amendments to IAS 27 - Consolidated and separate financial statements
- Amendments to IAS 32 and IAS 1 - Puttable financial instruments and
obligations arising on liquidation
- Amendments to IAS 23 - Borrowing costs
- Amendments to IAS 1 (Revised) - Statements of Comprehensive Income
Revised IAS 1 Presentation of Financial Statements (2007)
Revised IAS 1 introduces the term total comprehensive income, which represents
changes in equity during a period other than those changes resulting from
transactions with owners in their capacity as owners. Total comprehensive
income may be presented in either a single statement of comprehensive income
(effectively combining both the income statement and all non-owner change in a
single statement), or in an income statement and a separate statement of
comprehensive income. Revised IAS1, which becomes mandatory for the Group`s
2010 consolidated financial statements, is expected to have a significant
impact on the presentation of comprehensive income in a single statement of
comprehensive income for its 2010 consolidated statements.
Revised IFRS 3 Business combinations (2008)
Revised IFRS 3 incorporates the following changes that are likely to be
relevant to the Group`s operations:
- The definition of a business has been broadened, which is likely to
result in more acquisitions being treated as business combinations.
- Contingent consideration will be measured at fair value, with subsequent
changes therein recognised in the income statement.
- Transaction costs, other than share and debt issue costs, will be
expensed as incurred.
- Any pre-existing interest in the acquiree will be measured at fair value
with the gain or loss recognised in the income statement.
- Any non-controlling (minority) interest will be measured at either fair
value, or at its proportionate interest in the identifiable assets and
liabilities of the acquiree, on a transaction-by-transaction basis.
Revised IFRS 3, which becomes mandatory for the Group`s 2010 consolidated
financial statements, will be applied prospectively and therefore there will
be no impact on prior periods in the Group`s 2010 consolidated financial
statements.
Amended IAS 27 Consolidated and separate financial statements (2008)
Amended IAS 27 requires accounting for changes in ownership interests by the
Group in a subsidiary, while maintaining control, to be recognised as an
equity transaction. When the Group loses control of a subsidiary, any interest
retained in the former subsidiary will be measured at fair value with the gain
or loss recognised in the income statement. The amendments to IAS 27, which
become mandatory for the Group`s 2010 consolidated financial statements, will
impact minority interests in the consolidated financial statements.
Other than IAS 1 Revised, IFRS 3 and IAS 27, the Directors anticipate that the
adoption of these Standards and Interpretations in future periods will have no
material impact on the financial statements of the Group.
New Standards and Interpretations applicable for the year - IFRIC 13 Customer
Loyalty Programmes
This is applicable to these financial statements but has no material impact
(due to the immaterial nature of these programme).
Use of estimates and judgements
The preparation of financial statements in conformity with Adopted IFRS
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
Estimates made by management in the application of Adopted IFRS that have
significant effect on the financial statements with a significant risk of
material adjustment in the next year are discussed in the following notes:
- valuation of intangible assets (note 14)
- valuation of associates and joint ventures (note 17).
Judgements made by management in the application of Adopted IFRS that have
significant effect on the financial statements are:
- the determination of the functional currencies of subsidiaries (see
below)
- the determination of the accounting treatment in respect of the
acquisition of investments as either associates, joint ventures or
subsidiaries (note 3(a)).
The timing of revenue recognition is not subject to significant uncertainty.
Luba Freeport Limited
Luba Freeport Limited, a Jersey registered company, uses US dollars as its
functional currency as the significant transactions of the business are
denominated in US dollars.
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all
periods presented in these consolidated financial statements and in preparing
an opening Adopted IFRS balance sheet as at 1 October 2006 for the purposes of
the transition to Adopted IFRS. The accounting policies have been applied
consistently by Group entities.
(a) Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial statements of
Lonrho Plc and entities controlled by Lonrho Plc (its subsidiaries). Control
is achieved where Lonrho Plc (the Company) has the power to govern the
financial and operating policies of an investee entity so as to obtain
benefits from its activities.
The interest of minority shareholders is stated at the minority`s proportion
of the fair values of the assets and liabilities recognised. Subsequently,
losses applicable to the minority in excess of the minority`s interest in the
subsidiary`s equity are allocated against the interests of the Group except to
the extent that the minority has a binding obligation and is able to make an
additional investment to cover the losses.
The results of entities acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition or
up to the effective date of disposal, as appropriate.
All intra-Group transactions, balances, income and expenses are eliminated on
consolidation.
Associates and Joint Ventures
An associate is an entity in which the Group has the ability to exercise
significant influence but not control over the financial and operating
policies. A joint venture is an entity where the Group jointly controls it`s
financial and operating policy together with other parties. Associates are
accounted for using the equity method and are initially measured at cost as
adjusted by post- acquisition changes in the Group`s share of the net assets
of the associate, less any impairment of the individual investments, from the
date that significant influence commences until the date it ceases.
Losses of the associates in excess of the Group`s interest in those associates
are not recognised except to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of its investee. The
Group`s investment includes goodwill identified on acquisition, net of any
impairment losses. Any excess of the cost of acquisition over the Group`s
share of the fair values of the identifiable net assets of the associate at
the date of acquisition is recognised as goodwill. Any deficiency of the cost
of acquisition below the Group`s share of the fair values of the identifiable
net assets of the associate at the date of acquisition (i.e. discount on
acquisition) is credited to the income statement in the period of acquisition.
The Company records interests in associate and joint ventures initially at
cost and thereafter at cost less provisions for impairment.
Business combinations
The acquisition of subsidiaries and businesses is accounted for using the
purchase method. The cost of the acquisition is measured at the aggregate of
the fair values, at the date of exchange, of assets given, liabilities
incurred or assumed, and equity instruments issued by the Group in exchange
for control of the acquiree, plus any costs directly attributable to the
business combination. The acquiree`s identifiable assets, liabilities and
contingent liabilities that meet the conditions for recognition under IFRS 3
are recognised at their fair values at the acquisition date, except for non-
current assets that are classified as held for sale in accordance with IFRS 5,
which are recognised and measured at fair value less costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination
over the Group`s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised.
If, after reassessment, the Group`s interest in the net fair value of the
acquiree`s identifiable assets, liabilities and contingent liabilities exceeds
the cost of the business combination, the excess is recognised immediately in
the income statement. The interest of minority shareholders in the acquirer is
initially measured at the minority`s proportion of the net fair value of the
assets, liabilities and contingent liabilities recognised.
(b) Intangible assets Goodwill
Goodwill arising on consolidation is recognised as an asset.
Following initial recognition, goodwill is subject to impairment reviews, at
least annually, and measured at cost less accumulated impairment losses. The
recoverable amount is estimated at each balance sheet date. Any impairment
loss is recognised immediately in the income statement and is not subsequently
reversed when the carrying amount of the asset exceeds its recoverable amount.
Any impairment losses recognised in respect of cash generating units are
allocated first to reduce the carrying amount of any goodwill allocated to
cash-generating units (groups of units) and then, to reduce the carrying
amount of other assets in the unit (groups of units) on a pro rata basis.
On disposal of a subsidiary, the attributable amount of goodwill is included
in the determination of the gain or loss on disposal. Goodwill arising on
acquisitions before the date of transition to Adopted IFRS has been retained
at the previous UK GAAP amounts, after being tested for impairment at that
date.
Other intangible assets
Other intangible assets are measured initially at cost and are amortised on a
straight-line basis over their estimated useful lives. The carrying amount is
reduced by any provision for impairment where necessary.
On a business combination, as well as recording separable intangible assets
already recognised in the balance sheet of the acquired entity at their fair
value, identifiable intangible assets that are separable or arise from
contractual or other legal rights are also included in the acquisition balance
sheet at fair value.
Amortisation on intangible assets is charged on a straight line basis over
their useful economic life, on the following basis:
Brands 5 years
Intellectual property 5 years
Licences 5 years
Customer relationships 5 years
(C) Foreign currencies
The individual financial statements of each Group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each Group company are
expressed in pounds sterling, which is the functional currency of the Company,
and the presentational currency for the consolidated financial statements.
In preparing the financial statements of the individual companies,
transactions denominated in foreign currencies are translated into the
respective functional currency of the Group entities using the exchange rates
prevailing at the dates of transactions. Non-monetary assets and liabilities
are translated at the historic rate. Monetary assets and liabilities
denominated in foreign currencies are translated into the functional currency
at the rates of exchange ruling at the balance sheet date. Non-monetary assets
and liabilities denominated in foreign currencies that are measured at fair
value are retranslated to the functional currency at the exchange rate at the
date that the fair value was determined.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement for the
period. Exchange differences arising on the retranslation of non-monetary
items carried at fair value in respect of which gains and losses are
recognised directly in equity are also recognised directly in equity.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group`s foreign operations are translated at exchange
rates prevailing at the balance sheet date. Income and expense are translated
at the average exchange rates for the period, unless exchange rates fluctuate
significantly during that period, in which case weighted average rates are
used. Exchange differences arising, if any, are classified in equity and are
transferred to the Group`s foreign currency translation reserve within equity.
Such translation is recognised as income or as expense in the period in which
the operation is disposed of.
All foreign exchange gains or losses that are reflected in the income
statement are presented within financing income or expense.
(d) Hyperinflation
The Group acquired an associate, LonZim Plc, in 2008 whose main operations are
in Zimbabwe. The policy adopted by LonZim Plc for hyperinflation is stated
below:-
"The uncertainties in the adverse Zimbabwean economic environment have
resulted in subsidiaries of the Group operating in Zimbabwe changing their
functional currency from Zimbabwe dollars to United States dollars.
The rate of increase of inflation in Zimbabwe reached extraordinary levels in
the last quarter of 2008. This was exacerbated by the existence of multiple
exchange rates, the use of foreign currencies for some transactions and the
existence of multiple pricing criteria for similar products based on the mode
of settlement. The effect was that the Zimbabwe dollar was no longer a
functional currency for financial reporting purposes and resulted in a change
in the functional currency for most entities reporting in Zimbabwe. With
effect from 1 February 2009, the subsidiaries Celsys, Millpal and Paynet
changed their functional currency from the Zimbabwe dollar to the United
States dollar as it was evident that the United States dollar represents the
currency of the prime economic environment in which the respective companies
operate. On 29 January 2009 and on 2 February 2009 the Fiscal and Monetary
Authorities gave recognition to the fact that the Zimbabwe dollar was no
longer a functional currency and authorised the use of multiple foreign
currencies for trading in Zimbabwe.
The basis of preparation and presentation of the financial statements of
Celsys, Millpal and Paynet for inclusion in the Lonzim Plc consolidated
accounts follows the guidance issued by the Public Accountants and Auditors
Board and the Zimbabwe Accounting Practices Board. This guidance was issued to
assist preparers of financial statements in converting their financial
statements from Zimbabwe dollars into their new functional currency in a
manner that is consistent with the principles of International Financial
Reporting Standards, in as far as is practicable, in the Zimbabwean economic
environment, at the date of the change of the functional currency. As
suggested by the guidance, assets and liabilities carried at fair value were
valued at the date of change of the functional currency and carried at the
fair values in the new functional currency. Non-monetary assets and
liabilities were valued at their deemed costs. Equity was recognized as the
residual of the Company`s net assets and will be treated as a non-
distributable reserve until clarity has been obtained on the legal position
with respect to the treatment of share capital. Further clarification of
reserves will be pursued after the legal consideration attendant to share
capital has been addressed.
The financial performance, as reflected in the income statement, includes only
the financial performance of Celsys, Millpal and Paynet after the change in
their functional currency at 1 February 2009 however it was considered that
any translation of results for the period pre-dollarization be deemed
immaterial in the context of the Group accounts. The Directors believe that
the balance sheet that has been presented is a fair reflection of the assets
and liabilities of the Company in accordance with International Finance
Standards and, therefore, a fair reflection of the shareholders` equity."
(f) Taxation
The tax expense represents the sum of current tax and deferred tax.
Current taxation
Current tax is based on taxable profit for the period. Taxable profit differs
from net profit as reported in the income statement because it excludes items
of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The Group`s
liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on the investments in subsidiaries and associates, except where the
Group is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates substantially enacted at the
balance sheet date, that apply in the period when the liability is settled or
the asset is realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited to equity, in
which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
(f) Available for sale financial assets
The Group`s investments in equity securities that are not associates or joint
ventures are classified as available-for-sale financial assets. Subsequent to
initial recognition, they are measured at fair value and changes therein,
other than impairment losses (see below), are recognised directly in equity.
When an investment is de-recognised, the cumulative gain or loss in equity is
transferred to the income statement.
Impairment
A financial asset is assessed at each reporting date to determine whether
there is any objective evidence that it is impaired.
A financial asset is considered to be impaired if objective evidence indicates
that one or more events have had a negative effect on the estimated future
cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost
is calculated as the difference between its carrying amount, and the present
value of the estimated future cash flows discounted at the original effective
interest rate. An impairment loss in respect of an available-for-sale
financial asset is calculated by reference to its fair value.
All impairment losses are recognised in the income statement. Any cumulative
loss in respect of an available-for-sale financial asset recognised previously
in equity is transferred to the income statement.
An impairment loss is reversed if the reversal can be related objectively to
an event occurring after the impairment loss was recognised. For financial
assets measured at amortised cost, the reversal is recognised in the income
statement. For available-for sale financial assets that are equity securities,
the reversal is recognised directly in equity.
(g) Property, plant and equipment
Long leasehold land and buildings are stated in the balance sheet at their
revalued amounts, being the fair value at the date of revaluation, less any
subsequent accumulated depreciation and subsequent accumulated impairment
losses. Revaluations are performed with sufficient regularity such that the
carrying amount does not differ materially from that which would be determined
using fair values at the balance sheet date.
Any revaluation increase arising on the revaluation of such land and buildings
is credited to the revaluation reserve, except to the extent that it reverses
a revaluation decrease for the same asset previously recognised as an expense,
in which case the increase is credited to the income statement to the extent
of the decrease previously charged. A decrease in carrying amount arising on
the revaluation of such land and building is charged as an expense to the
extent that it exceeds the balance if any, held in the revaluation reserve
relating to a previous revaluation of that asset. Depreciation on revalued
buildings is charged to the income statement. On subsequent sale or retirement
of a revalued property, the attributable revaluation surplus remaining is
transferred directly to retained earnings.
All other assets are stated at historical cost less accumulated depreciation
and accumulated impairment losses.
Depreciation is charged so as to write off the cost or valuation of assets
(less estimated residual values updated annually), other than long leasehold
land, over their estimated useful lives, on the following basis:
Long leasehold buildings 2% of cost
Short leasehold land and buildings Over the term of the lease
Plant and machinery 10% of cost
Aircraft 5%-6.67% of cost
Motor cars 15%-25% of cost
Fixtures and fittings 15%-25 % of cost
The gain or loss arising on the disposal of an asset is determined as the
difference between the sales proceeds and the carrying amount of the asset and
is recognised in the income statement for the period.
Assets held under finance leases are depreciated over their expected useful
lives on the same basis as owned assets, or where shorter, over the relevant
lease term.
In respect of aircraft, subsequent costs incurred which lend enhancement to
future periods such as long term scheduled maintenance and major overhaul of
aircraft and engines are capitalised and amortised over the length of the
period benefiting from those enhancements. All other costs relating to
maintenance are charged to the income statement as incurred.
(h) Impairment of assets excluding goodwill, inventories and deferred tax
assets
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine
the extent of any impairment loss. Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or cash-
generating unit) is reduced to its recoverable amount.
An impairment loss is recognised as an expense immediately, unless the
relevant asset is carried at a revalued amount in which case the impairment
loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognised as income immediately, unless
the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation increase.
(i) Financial instruments
Financial assets and financial liabilities are recognised in the Group`s
balance sheet when the Group becomes a party to the contractual provisions of
the instrument.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and demand deposits and other
short term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Bank overdrafts that are repayable on demand and form an integral part of the
Group`s cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows.
Trade receivables
Trade receivables are measured at initial recognition at fair value and are
subsequently measured at amortised cost using the effective interest rate
method. Appropriate allowances for estimated recoverable amounts are
recognised in the income statement when there is objective evidence the asset
is impaired.
Trade payables
Trade payables are initially measured at fair value and are subsequently
measured at amortised cost using the effective interest rate method.
Financial liabilities
Financial liabilities are classified according to the substance of the
contractual arrangements entered into.
Bank borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs.
Capital management
The Board`s policy is to maintain a strong capital base so as to maintain
investor, creditor and market confidence and to sustain future development of
the business. The Board of Directors monitors the return on capital, which the
Group defines as net operating income divided by total shareholders` equity,
excluding minority interests.
(j) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
comprises direct materials and where applicable direct expenditure and
attributable overheads that have been incurred in bringing the inventories to
their present location and condition. Net realisable value represents the
estimated selling price less all estimated costs of completion and costs to be
incurred in marketing, selling and distribution.
(k) Share based payments
The Group provides benefits to certain employees, including senior executives,
in the form of share based payments, whereby employees render services in
exchange for shares or rights over shares (equity-settled transactions). The
cost of these equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date at which
they are granted. The fair value is determined by using a Black-Scholes model.
The dilutive effect, if any, of outstanding options is reflected as additional
share dilution in the computation of earnings per share.
(l) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition, interest-
bearing borrowings are stated at amortised cost with any difference between
cost and redemption value being recognised in the income statement over the
period of the borrowings on an effective interest basis.
(m) Dividends
Interim dividends are recognised when paid and final dividends are recognised
as liabilities in the period in which they are approved by shareholders.
(n) Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate,
the risks specific to the liability.
(o) Revenue recognition
Revenue, for the other major segments not detailed below, is derived from the
sale of goods and services and is measured at the fair value of consideration
received or receivable, after deducting discounts, volume rebates, value-added
tax and other sales taxes. A sale of goods and services is recognised when
recovery of the consideration is probable, there is no continuing management
involvement with the goods and services and the amount of revenue can be
measured reliably.
A sale of goods is recognised when the significant risks and rewards of
ownership have passed to the buyer, the associated costs and possible return
of goods can be estimated reliably. This is when title and insurance risk have
passed to the customer and the goods have been delivered to a contractually
agreed location.
A sale of services is recognised when the service has been rendered.
Aircraft division
Revenue for the aircraft division comprises the invoiced value of airline
services, net of passenger taxes, discounts, plus ancillary revenue. Revenue
from the sale of flight seats (passenger revenue) is recognised in the period
in which the service is provided. Unearned revenue represents flight seats
sold but not yet flown and is included within deferred income.
Shipping division (discontinued operation)
Revenue for the shipping division comprises the invoiced value of shipping
services, net of taxes and duties.
Revenue is generated from the transport of containerised goods. The transport
of these goods is referred to as a voyage, and a completed voyage comprises
both a North bound and South bound leg.
Revenue is recognised on a completed voyage basis.
(p) Leases
Leases are classified according to the substance of the transaction. A lease
that transfers substantially all the risks and rewards of ownership to the
lessee is classified as a finance lease. All other leases are classified as
operating leases.
Finance leases
Finance leases are capitalised in the balance sheet at their fair value or, if
lower, at the present value of the minimum lease payments, each determined at
the inception of the lease. The corresponding liability is shown as a finance
lease obligation to the lessor. Leasing repayments comprise both a capital and
a finance element. The finance element is written off to the income statement
so as to produce an approximately constant periodic rate of charge on the
outstanding obligation.
Operating leases
Operating lease rentals are charged to the income statement on a straight line
basis over the period of the lease.
(q) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset, which are assets that necessarily take a
substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings
pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation.
All other borrowing costs are recognised in the income statement in the period
in which they are incurred.
(r)Loss per share
Basic loss per share is calculated based on the weighted average number of
ordinary shares outstanding during the period. Diluted loss per share is based
upon the weighted average number of shares in issue throughout the year,
adjusted for the dilutive effect of potential ordinary shares. The only
potential dilutive ordinary shares in issue are employee share options.
(s) Segment reporting
A segment is a distinguishable component of the Group that is engaged either
in providing products or services (business segment), or in providing products
or services within a particular economic environment (geographical segment),
which is subject to risks and rewards that are different from those of other
segments.
(t) Assets and liabilities classified as held for sale
Non-current assets (or disposal groups comprising assets and liabilities) that
are expected to be recovered primarily through sale rather than through
continuing use are classified as held for sale. Immediately before
classification as held for sale, the assets (or components of a disposal
group) are remeasured in accordance with the Group`s accounting policies.
Thereafter generally the assets (or disposal group) are measured at the lower
of their carrying amount and fair value less cost to sell. Any impairment loss
on a disposal group first is allocated to goodwill, and then to remaining
assets and liabilities on a pro rata basis, except that no loss is allocated
to inventories, financial assets and deferred tax assets, which continue to be
measured in accordance with the Group`s accounting policies. Impairment losses
on initial classification as held for sale and subsequent gains or losses on
re-measurement are recognised in the income statement. Gains are not
recognised in excess of any cumulative impairment loss.
4 Segment reporting
Segment information is presented in respect of the Group`s business and
geographical segments. The primary format, business segments, is based on the
Group`s management and internal reporting structure.
There is no inter-segment revenue.
Segment results, assets and liabilities include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly income-earning assets and revenue, interest-
bearing loans, borrowings and expenses, and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during the period to
acquire segment assets that are expected to be used for more than one period.
Business segments
For management purposes, the Group is currently organised into five operating
divisions.
- Agribusiness
- Infrastructure
- Transport
- Support services
- Hotels
- Cargo and shipping (discontinued)
Geographical segments
All of the segments operate in various parts of Africa.
Agri Infras Trans Suppo 2009 Consoli Cargo
busi tructu port rt dated and
ness re GBPm servi continu Shippi
GBPm GBPm ces Hotel ing ng
GBPm s operati Discon
GBPm ons tinued
GBPm operat
ions
GBPm
EXTERNAL 46.5 9.3 21.4 9.1 3.4 89.7 1.2
REVENUE
Segment result 1.0 (4.5) (5.1) 0.1 0.4 (8.1) (0.8)
Unallocated (3.4) 2.2
expenses
Impairment of - -
goodwill
Gain on sale - -
of intangible
asset
OPERATING LOSS (11.5) 1.4
Net finance 5.4 -
income
Share of 0.4 -
results of
associates
Share of (0.2) -
results of
joint venture
Income tax (0.8) -
expense
LOSS FOR THE (6.7) 1.4
YEAR
Business segments
Agrib Infr Trans Supp 2008 Ot Conso Carg
usine astr port ort he lidat o
ss uctu GBPm serv r ed and
GBPm re ices Hotel GB conti Ship
GBPm GBPm s Pm nuing ping
GBPm opera disc
tions onti
GBPm nued
oper
atio
ns
GBPm
EXTERNAL - 7.3 9.3 6.1 1.8 - 24.5 18.6
REVENUE
Segment - (0.6 (4.5) (0.6 0.1 - (5.6) (24.
result ) ) 5)
Unallocated (7.8) -
expenses
Impairment of (0.6 (0.6) (5.1
goodwill ) )
Gain on sale 5.8 -
of intangible
asset
OPERATING (8.2) (29.
LOSS 6)
Net finance 5.8 (2.7
income/(expen )
se)
Share of (4.0) -
results of
associates
Income tax (0.2) (2.1
expense )
LOSS FOR THE (6.6) (34.
YEAR 4)
Agrib Infra Trans Supp 2009 Ot Conso Carg
usine struc port ort he lidat o
ss ture GBPm serv r ed and
GBPm GBPm ices Hotel GB conti Ship
GBPm s Pm nuing ping
GBPm opera Disc
tions onti
GBPm nued
oper
atio
ns
GBPm
Segment 31.8 58.7 14.5 4.5 11.9 - 121.4 -
operating
assets
Investment in - - - - 1.3 7. 9.2 -
associates/joi 9
nt ventures
Unallocated - - - - - 9. 9.3 -
assets/interes 3
t bearing
assets
TOTAL ASSETS 31.8 58.7 14.5 4.5 13.2 17 139.9 -
.2
Segment 19.4 22.5 5.3 1.2 1.2 - 49.6 -
operating
liabilities
Unallocated - - - - - 9. 9.2 -
liabilities / 2
interest
bearing
liabilities
TOTAL 19.4 22.5 5.3 1.2 1.2 9. 58.8 -
LIABILITIES 2
Depreciation 1.4 2.4 1.0 0.1 0.4 - 5.3 -
of segment
assets
Amortisation 0.3 0.1 0.1 0.1 - - 0.6 -
of segment
assets
Capital 4.6 3.6 1.5 0.9 4.1 - 14.7 -
expenditure
Infrastru Trans Supp 2008 Oth Conso Cargo
cture port ort er lidat and
GBPm GBPm serv GBP ed Shippi
ices Hote m conti ng
GBPm ls nuing Discon
GBPm opera tinued
tions operat
GBPm ions
GBPm
Segment 44.2 14.6 4.3 11.7 - 74.8 2.5
operating assets
Investment in 2.2 - - - 6.6 8.8 -
associates
Unallocated - - - - - 12.6 0.1
assets /
interest bearing
assets
TOTAL ASSETS 96.2 2.6
Segment 9.3 2.5 0.8 1.7 - 14.3 7.8
operating
liabilities
Unallocated 6.5 0.5
liabilities /
interest bearing
liabilities
TOTAL 20.8 8.3
LIABILITIES
Depreciation of 2.1 0.7 0.1 0.2 - 3.1 -
segment assets
Amortisation of - 0.1 0.2 - - 0.3 -
segment assets
Capital 8.5 2.1 0.1 1.8 - 12.5 -
expenditure
Impairment of - - 0.7 - - 0.7 5.1
intangible
assets
Geographical segments
2009 Consolidated
Southern
Africa
Southern Eas West Euro contin disc
Africa t Afri pe uing onti
GBPm Afr ca GBPm operat nued
ica GBPm ions oper
GBP GBPm atio
m ns
GBPm
Revenue by location of 59.8 21. 8.0 0.5 89.7 1.2
external customers 4
Revenue by location of 59.8 21. 8.0 0.5 89.7 1.2
assets 4
Segment net assets 29.5 8.6 35.0 8.0 81.1 -
Capital expenditure 9.6 1.5 3.6 - 14.7 -
2008 Consolidated
Southern
Africa
Southern East West contin disc
Africa Afri Afri Euro uing onti
GBPm ca ca pe operat nued
GBPm GBPm GBPm ions oper
GBPm atio
ns
GBPm
Revenue by location 7.7 9.3 7.3 0.2 24.5 18.6
of external customers
Revenue by location 7.9 9.3 7.3 - 24.5 18.6
of assets
Segment net 17.5 11.6 33.7 12.6 75.4 (5.7
assets/(liabilities) )
Capital expenditure 2.0 1.8 8.4 0.3 12.5 -
5 Revenue
Continuing Discontinu Total
operations ed
operations
2009 2008 2009 2008 2009 200
8
GBPm GBPm GBPm GBPm GBPm GBP
m
Sale of goods 12.4 6.1 - - 12.4 6.1
Services 77.3 18.4 1.2 18.6 78.5 37.
0
89.7 24.5 1.2 18.6 90.9 43.
1
6 Group net operating costs
2009 2008
GBPm GBPm
Cost of sales
Administrative expenses 74.7 53.9
Other operating income 29.6 27.4
(3.3) (0.3
)
NET OPERATING COSTS (BEFORE IMPAIRMENT OF
GOODWILL
AND THE GAIN ON SALE OF INTANGIBLE ASSETS 101.0 81.0
)
Administrative expenses include
management related overheads for
operations and head office.
INCLUDED IN NET OPERATING COSTS ABOVE
ARE:
Depreciation of property plant and 5.3 3.1
equipment
Impairment of intangible assets (other - 0.1
than goodwill)
Amortisation of intangible assets (other 0.6 0.3
than goodwill)
Share based payments (notes 23 and 26) 0.3 -
Operating lease rentals:
- Land and buildings 0.4 0.3
- Plant and machinery 0.1 0.1
- Other 1.7 13.6
Staff costs (note 10) 13.0 9.9
Impairment of trade receivables 0.2 0.7
Legal fees relating to discontinued - 1.4
operations
The costs above include the following
relating to discontinued operations:
2009 2008
GBPm GBPm
Gain arising on liquidation of SAILS (2.2) -
Other operating lease rentals 0.6 13.6
Staff costs - 0.3
Impairment of trade receivables - 0.6
Legal fees - 1.4
Auditors remuneration
2009 200
8
GBPm GBP
m
Fees payable to the Company`s auditors 0.2 0.2
for the audit of the Company`s annual
accounts
For the audit of the Company`s 0.1 0.1
subsidiaries pursuant to legislation
TOTAL AUDIT FEES 0.3 0.3
7 Acquisition of subsidiaries
On 1 October 2008, the Group acquired 51.0% of the issued share capital of
Rollex Pty Limited for a consideration of GBP7.9 million. Rollex Pty Limited
is the parent company of a group of companies involved in the provision of
transport and packing solutions for the fruit and vegetable supply industry.
The transaction has been accounted for by the purchase method of accounting.
The fair value of the net assets at 1 October 2008 is set out below:
Pre Fair Values
acqui Subscrip value recognis
sitio tion of adjus ed on
n shares tment acquisit
carry recognis s ion
ing ed GBPm GBPm
value GBPm
GBPm
Property, plant and 3.0 - 0.1 3.1
equipment - - 3.0 3.0
Intangible assets - - (1.0) (1.0)
Deferred tax on 0.1 - - 0.1
intangible assets 3.5 - - 3.5
Inventory
Trade and other
receivables
Cash and cash equivalents 0.8 1.1 - 1.9
Interest-bearing loans (2.6) - (2.6)
and borrowings
Trade and other payables (7.7) - - (7.7)
NET IDENTIFIABLE ASSETS (2.9) 1.1 2.1 0.3
AND LIABILITIES
Minority interest (0.2)
Consideration paid* (4.4)
Deferred consideration (3.5)
GOODWILL ON ACQUISITION (7.8)
NET CASH INFLOW ARISING
ON
ACQUISITION BEFORE (2.5)
DEFERRED CONSIDERATION
* The consideration
includes GBP0.2 million
for acquisition costs.
The fair value adjustment relates to freehold property held within a
subsidiary of Rollex Pty Limited.
The transaction costs incurred to acquire the company were GBP0.2 million.
The goodwill arising on the acquisition of Rollex Pty Limited is attributable
to the anticipated profitability of the distribution of the Group`s services
and products to new customers and additional activities to be developed as a
member of the Lonrho Group.
Rollex Pty Limited contributed GBP46.5 million to revenue and GBP1.0 million
profit to the Group`s loss before tax for the period between the date of
acquisition and the balance sheet date.
On 1 October 2008 the Group gained Board control of E-Kwikbuild Pty Limited
(formerly treated as an associate).
The company value of E-Kwikbuild Pty Limited within its parent company
Kwikbuild Corporation Limited was GBP2.2 million. This GBP2.2 million has been
re-allocated as follows:
Intangibles GBP0.2 million
Goodwill GBP1.3 million
Minority interests GBP0.7 million
There were no acquisition costs.
The goodwill arising on the acquisition of E-Kwikbuild Pty Limited is
attributable to the anticipated profitability of the distribution of the
Group`s services and products.
E- Kwikbuild Pty Limited contributed GBP1.3 million to revenue and GBP0.5
million loss to the Group`s loss before tax for the period between the date of
acquisition and the balance sheet date..
2008 Acquisitions
The transactions in 2008 have been accounted for by the purchase method of
accounting. The fair value of the net assets acquired are shown below:
Kwikbuild
Corporati
on
Limited Total
GBPm GBPm
Intangible assets (excluding
goodwill)
Investments in associates 2.2 2.2
Cash and cash equivalents 1.0 1.0
Trade and other payables (0.6) (0.6)
NET IDENTIFIABLE ASSETS AND 2.6 2.6
LIABILITIES
Minority interest (1.0)
Goodwill on acquisition 1.5
Consideration paid, satisfied in 3.1
cash
Cash acquired (1.0)
NET CASH OUTFLOW ARISING ON 2.1
ACQUISITION
Expenses included in
consideration above were not
material
Revenue for the year to 30 Nil
September 2008
Profit/(loss) from the date of (0.5)
acquisition to 30 September 2008
Profit/(loss) for the year to 30 (0.5)
September 2008
Date of acquisition 11 Oct 4 Aug
2007 2008
Percentage of issued share 55.60% 6.37%
capital acquired
On acquisition of Kwikbuild Kwikbui
Corporati ld
on Corpora
Limited tion
Limited
8 Gain on sale of intangible asset
2009
There were no sales of intangible assets during the year.
2008
During 2008 LonZim Plc was established and was listed on AIM in December 2007
raising GBP29.0 million to invest in opportunities in Zimbabwe and those
related to the Zimbabwean economy.
Lonrho Plc, on behalf of itself and its subsidiaries or companies in which
Lonrho has significant influence over the Board, has agreed not to make
investments in Zimbabwe, or an area in Mozambique known as the Beira Corridor.
In consideration of entering into this agreement, the Company received a free
carry interest of 20% of the issued share capital of LonZim Plc, valued at
GBP7.3 million which resulted in a GBP5.8 million credit to the 2008
consolidated income statement. LonZim Plc is accounted for as an associate
using the equity method (see note 17).
9 Discontinued operations SAILS
Following a review by the Board in September 2008, the Group decided not to
continue to support SAILS. The Board began actively marketing the company for
sale prior to the 2008 year end. Unfortunately this proved unsuccessful and
the company was placed into liquidation on 15 October 2008.
Goodwill totalling GBP5.1 million and GBP2.1 million of deferred tax assets
were charged to the income statement in 2008. The remaining assets and
liabilities of SAILS were transferred to assets and liabilities classified as
held for sale as at 30 September 2008.
2008
Note GBPm
ASSETS CLASSIFIED AS HELD FOR SALE
Property, plant and equipment 15 0.1
Trade and other receivables 2.4
Cash and cash equivalents 0.1
TOTAL ASSETS CLASSIFIED AS HELD FOR SALE 2.6
2008 GBPm
LIABILITIES CLASSIFIED AS HELD FOR SALE
Other financial liabilities 2.0
Bank overdraft 0.5
Trade and other payables 5.8
TOTAL LIABILITIES CLASSIFIED AS HELD FOR SALE 8.3
2009* 2008
GBPm GBPm
CASH FLOWS FROM DISCONTINUED OPERATION
Net cash used in operating activities (0.1) (21.8)
Net cash received from financing activities
by the Group - 22.0
NET MOVEMENT IN CASH AND CASH EQUIVALENTS (0.1) 0.2
* In the period to liquidation.
10 Staff numbers and costs
The aggregate remuneration comprised (including Executive Directors)
Group Company
2009 2008 2009 2008
GBPm GBPm GBPm GBPm
Wages and salaries 11.6 9.5 2.5 2.3
Compulsory social security 1.1 0.4 0.2 0.2
contributions
Share based payments 0.3 - 0.3 -
13.0 9.9 3.0 2.5
The average number of employees
(including Executive Directors)
was:
Group Company
2009 2008 2009 2008
Number Number Numb Numbe
er r
Infrastructure 183 181 - -
Agribusiness 217 - - -
Transport 300 217 - -
Support services 88 82 - -
Hotels 161 136 - -
Cargo and shipping (discontinued - 16 - -
operations)
Central 21 18 21 18
970 650 21 18
2009 2008
GBPm GBPm
REMUNERATION OF DIRECTORS
Directors` emoluments 1.7 1.5
The highest paid Director received emoluments
of GBP0.542 million (2008: GBP0.542 million).
11 Net finance costs
2009 200
GBPm 8
GBP
m
Bank interest receivable Foreign exchange 0.2 0.6
gain 6.4 6.0
FINANCE INCOME 6.6 6.6
Loans repayable within five years and 0.9 0.2
overdrafts
Foreign exchange loss 0.2 2.4
Finance leases 0.1 0.1
Impairment of investments (note 18) - 0.8
FINANCE EXPENSE 1.2 3.5
NET FINANCE INCOME 5.4 3.1
Included within the above is loan interest payable of GBPNil (2008 GBP0.3
million) and foreign exchange losses of GBPNil (2008 GBP2.4 million) relating
to discontinued operations.
The foreign exchange gain of GBP6.4 million (2008GBP6.0 million) has arisen on
the translation of intercompany balances at the year end rate.
12 Income tax expense
Recognised in the income statement 2009 2008
GBPm GBPm
CURRENT TAX EXPENSE Current year
0.8 0.2
DEFERRED TAX EXPENSE 2.1
Write off of asset in respect of -
discontinued operation (note 9)
TOTAL INCOME TAX EXPENSE IN THE INCOME 0.8 2.3
STATEMENT
Reconciliation of effective tax rate 2009 2008
GBPm GBPm
Loss before tax (4.5) (38.7
)
Income tax using the domestic (1.2) (11.2
corporation tax rate )
Effect of tax rates in foreign (0.5) (0.3)
jurisdictions
Provision against carrying value of - 1.2
associate
Net losses where no Group relief is 3.8 10.5
available
Write off of deferred tax asset in - 2.1
respect of discontinued operations
(note 9)
Gain on disposal of subsidiary (0.7) 1.5
undertaking not tax affected
Effect of tax losses utilised (0.3) (1.7)
Non taxable items (0.3) -
Impairment of investments - 0.2
TOTAL TAX EXPENSE 0.8 2.3
2009 2008
Deferred tax recognised directly in equity GBPm GBPm
Relating to revaluation of property,
plant and equipment - 1.0
UK Corporation tax is calculated at a rate of 28% (2008: 29%) of the estimated
assessable loss for the year. Taxation for other jurisdictions is calculated
at the rates prevailing in the respective jurisdictions.
13 Earnings per share
The calculation of the basic and diluted loss per share is based on the
following data
2009 2008
GBPm GBPm
Loss for the purposes of basic earnings per
share being net loss attributable to
equity holders of the parent (6.2) (33.3)
Loss for the purposes of diluted earnings
per share (6.2) (33.3)
Number of shares (millions ) 2009 2008
No. No.
Weighted average number of ordinary 715.7 371.
shares for the purposes of basic 2
earnings per share
Effect of dilutive potential ordinary
shares:
- Share options 37.5 27.5
Weighted average number of ordinary 753.2 398.
shares for the purposes of diluted 7
earnings per share*
*The calculation of diluted loss per share is based on the weighted average
number of shares outstanding as in respect of both the current and prior year
the Group has made a loss and hence the effect of share options is considered
to be anti-dilutive.
14 Intangible assets
Goodwi Bra Inte Lic Tot
ll Custom nds llec enc al
GBPm er GBP tual es GBP
relati m prop GBP m
onship erty m
s GBPm
GBPm
COST
Balance at 1 October 2007 6.5 1.0 0.1 0.2 7.8
-
Acquired through business 1.5 - - - - 1.5
combinations
Increase in shareholding of 2.8 - - - - 2.8
subsidiary undertaking
BALANCE AT 30 SEPTEMBER 10.8 - 1.0 0.1 0.2 12.
2008 1
Balance at 1 October 2008 10.8 - 1.0 0.1 0.2 12.
1
Acquired through business 9.1 3.2 - - - 12.
combinations 3
Discontinued business (5.1) - - - -
(5.
1)
Increase in shareholding of - - - - -
subsidiary undertaking -
BALANCE AT 30 SEPTEMBER 14.8 3.2
2009 1.0 0.1 0.2 19.
3
AMORTISATION AND IMPAIRMENT
LOSSES
Balance at 1 October 2007 - - 0.1 - 0.1
-
Amortisation for the year - - 0.2 0.1 0.3
-
Impairment charge 5.7 - 0.1 - 5.8
-
BALANCE AT 30 SEPTEMBER 5.7 - 0.4 0.1 6.2
2008 -
Balance at 1 October 2008 5.7 -
0.4 - 0.1 6.2
Amortisation for the year 0.3
- 0.2 - 0.1 0.6
Discontinued business (5.1) -
- - - (5.
1)
Impairment charge - -
- - - -
BALANCE AT 30 SEPTEMBER 0.6 0.3 0.6 - 0.2 1.7
2009
CARRYING AMOUNTS
At 1 October 2007 6.5 - 0.9 0.1 0.2 7.7
AT 30 SEPTEMBER 2008 5.1 - 0.6 0.1 0.1 5.9
At 1 October 2008 5.1 - 0.6 0.1 0.1 5.9
AT 30 SEPTEMBER 2009 14.2 2.9 0.4 0.1 - 17.
6
Amortisation and impairment charge
The amortisation and impairment charge is recognised in the operating costs
line of the income statement, with the exception of the goodwill relating to
discontinued operations which has been disclosed separately.
Goodwill acquired in a business combination is allocated at acquisition to the
cash generating units (CGU`s) that are expected to benefit from that business
combination. Before recognition of impairment losses, the carrying amount of
goodwill had been allocated as follows:
Primary CGU 2009 200
Reporting GBPm 8
Segment GBP
m
AGRIBUSINESS Rollex Pty Limited 7.8 -
7.8 -
INFRASTRUCTUR Luba Freeport Limited 3.5 3.5
E
KwikBuild Corporation 2.8 1.5
Limited
6.3 5.0
TRANSPORT Five Forty Aviation Limited 0.1 0.1
SA Independent Liner - 5.1
Services Pty Limited -
(SAILS)
0.1 5.2
SUPPORT Swissta Holdings Limited 0.6 0.6
SERVICES
TOTAL 14.8 10.
8
At 30 September 2009 accumulated impairment losses in respect of goodwill
totalled GBP0.6million (2008: GBP5.7 million).
The Group tests goodwill annually for impairment, or more frequently if there
are indications that goodwill might be impaired which include the current
economic environment. The recoverable amounts are determined from value in use
calculations. The key assumptions for the value in use calculations are those
regarding discount rates, growth rates, expected changes to selling prices and
direct costs during the period.
Management estimates discount rates using pre-tax rates that reflect current
market assessments of the time value of money and the risks specific to the
units. The growth rates are based on management`s assessment of the markets in
which the businesses are operating and reflect known contracts and customer
relationships combined with anticipated growth in markets and market share.
Industry growth forecasts are not always considered applicable as many of the
businesses are operating in non-established markets. Changes in the selling
prices and direct costs are based on past practices and expectations of future
changes in the market.
The Group prepares cash flow forecasts derived from the most recent financial
budgets included in the individual reporting unit`s five year business plan
which are approved by management. For Rollex Pty Limited and KwikBuild
Corporation Limited the Directors have not considered cashflow beyond the five
year period in determining value in use. For Luba Freeport Limited, reflecting
the significant capital investments in the project and the length of the
remaining operating concession (19 years) the Directors have extended the
forecast for a further five years using a 5% growth rate over this period in
determining value in use. The pre-tax rates used to discount the forecast cash
flows within Agribusiness are Rollex Pty Limited 12%, Infrastructure, are Luba
Freeport Limited 10% (2008: 10%) and KwikBuild Corporation Limited 15% (2008:
15%), Transport, being Five Forty Aviation Limited 15% (2008: 15%), and
Support Services being Swissta Holdings Limited 15% (2008: 15%).
Management carried out a range of sensitivity analysis on all the assumptions
used for Rollex Pty Limited, Luba Freeport Limited and KwikBuild Corporation
Limited. The results of this analysis confirmed that there was sufficient
headroom in the carrying value of goodwill for these entities. The Directors
do not consider that any reasonably possible scenario currently forseen could
result in goodwill impairment.
On 30 September 2008, before impairment testing, goodwill of GBP5.1 million
was allocated to SAILS within the cargo and shipping segment. This goodwill
was fully impaired at that date. See note 9 for further details. The assets
and liabilities of SAILS were classified as held for sale as at 30 September
2008. On 15 October 2008 SAILS was put into liquidation.
On 30 September 2008, before impairment testing, goodwill of GBP0.6 million
was allocated to Swissta Holdings Limited within the support services segment.
Due to the economic environment in the sector in which the company operates,
the Group revised its cash flow forecasts, and the goodwill was fully impaired
at that date.
Other intangible assets
The Group tests other intangible assets for impairment if there are
indications that they might be impaired. The carrying value of intangible
assets held by Swissta Holdings Limited totalling GBP0.1 million, have been
fully impaired for the reasons described above.
Estimates and judgements
The Directors believe that the estimates and judgements used in preparing
these financial statements would not have a material impact on the carrying
values of the intangible assets described above.
15 Property, plant and equipment
Plan Fixtur Aircr Total
t es and aft GBPm
Long Short and fittin GBPm
leaseho lease mach gs
ld land hold iner GBPm
and land y
buildin and GBPm
gs build
GBPm ings
GBPm
COST
Balance at 1 October 3.9 27.6 4.1 1.4 4.5 41.5
2007
Additions 0.6 8.1 0.7 1.6 1.5 12.5
Revaluations 4.6 - - - - 4.6
Disposals - - - (0.3) - (0.3)
Transfer to current - - - (0.1) - (0.1)
assets held for sale
(note 9)
Effect of movements 0.9 4.0 0.7 0.1 0.6 6.3
in foreign exchange
BALANCE AT 30 10.0 39.7 5.5 2.7 6.6 64.5
SEPTEMBER 2008
Balance at 1 October 10.0 39.7 5.5 2.7 6.6 64.5
2008
Additions 7.1 3.6 1.0 1.5 1.5 14.7
Business 0.7 - 2.4 - 3.1
combinations
Disposals - - (1.2 (0.2) (3.2) (4.6)
)
Effect of movements (0.7) 4.1 0.8 0.4 0.4 5.0
in foreign exchange
BALANCE AT 30 17.1 47.4 8.5 4.4 5.3 82.7
SEPTEMBER 2009
Plant Fixtur Aircra Total
and es and ft GBPm
Long Shor machi fittin GBPm
t nery gs
leaseh leas GBPm GBPm
old ehol
land d
and land
buildi and
ngs buil
GBPm ding
s
GBPm
DEPRECIATION AND
IMPAIRMENT LOSSES
Balance at 1 October 0.1 2.5 0.9 1.0 0.1 4.6
2007
Depreciation charge 0.1 1.6 0.6 0.3 0.5 3.1
for the year
Depreciation written (0.3) - - - - (0.3)
back on revaluation
Disposals - - - (0.3) - (0.3)
Effect of movements 0.1 0.3 0.1 0.1 - 0.6
in foreign exchange
BALANCE AT 30 - 4.4 1.6 1.1 0.6 7.7
SEPTEMBER 2008
Balance at 1 October - 4.4 1.6 1.1 0.6 7.7
2008
Depreciation charge 0.5 1.9 1.6 0.6 0.7 5.3
for the year
Disposals - - - (0.1) (0.8) (0.9)
Effect of movements 0.2 0.2 0.2 - 0.2 0.8
in foreign exchange
BALANCE AT 30 0.7 6.5 3.4 1.6 0.7 12.9
SEPTEMBER 2009
CARRYING AMOUNTS
At 1 October 2007 3.8 25.1 3.2 0.4 4.4 36.9
At 30 September 2008 10.0 35.3 3.9 1.6 6.0 56.8
At 1 October 2008 10.0 35.3 3.9 1.6 6.0 56.8
At 30 September 2009 16.4 40.9 5.1 2.8 4.6 69.8
Leased plant, machinery and aircraft
The Group leases an aircraft under a finance lease agreement. At the end of
the lease, providing all payments have been made, title to the asset passes to
the Group. At 30 September 2009, the net carrying amount of leased assets were
GBP1.5 million (2008:
GBP1.5 million). See note 24 for details of the lease obligations.
Revalued long leasehold land and buildings
Long leasehold land and buildings, relating to Hotel Cardoso SARL and
Sociedade Comercial Bytes & Pieces Limitada, were revalued in June 2008 and
January 2009 respectively, by Zambujo & Associados Lda, independent valuers,
on the basis of market value. The valuations conform to International
Valuation Standards and were based on recent market transactions at arm`s
length terms for similar properties. The Directors believe these valuations
remain appropriate and accordingly have not commissioned new valuations since
January 2009.
On 30 September 2009, had long leasehold land and buildings been carried at
historical cost less accumulated depreciation, their carrying amount would be
approximately GBP2.0 million (2008: GBP2.1 million). The revaluation surplus
is disclosed in note 23. The revaluation surplus arises in a subsidiary and
cannot be distributed to the parent due its legal restrictions in the country
of incorporation.
Assets in the course of construction
Included within short leasehold land and buildings are assets in the course of
construction totalling GBP8.3 million (2008: GBP5.7 million) which are not
depreciated until they are brought into use.
Capital commitments
Details of capital commitments in relation to property, plant and equipment
are disclosed in note 31.
Borrowing costs
The amount of borrowing costs in respect of interest capitalised during the
year was GBP0.3 million (2008: GBP0.4 million) and has been included within
long leasehold land and buildings.
16 Investments in subsidiaries
The investment by the Company in respect of Lonrho Africa (Holdings) Limited
is stated at cost. This is subject to impairment testing.
A list of principal subsidiaries is set out in note 34.
17 Investments in associates and joint ventures
Group Company
2009 200 2009 2008
GBPm 8 GBPm GBPm
GBP
m
At 1 October 8.8 - -
7.3
Free carry interest received (see note - 5.8 - 7.3
8)
Acquisition of joint venture 1.5 - - -
Share of net assets on acquisition - 3.5 - -
Transfer to business acquisitions (see (2.2) - - -
note 7)
Transfer from other non-current - 3.5 - -
investments (see note 18)
Additions to associates 0.9 - 0.4 -
Shares of loss after taxation - joint (0.2) - - -
ventures
Share of profit after taxation - 0.4 (4. - -
associates 0)
AT 30 SEPTEMBER 9.2 8.8 7.7 7.3
The acquisition of joint ventures relates to the investment of
GBP1.5 million in Grand Karavia, a company based in the DRC.
Additions to associates represents the purchase of additional
shares in Lonzim Plc (see note 33).
The Group had the following investments in joint ventures at
the balance sheet date: investments in
investments in associates and joint ventures at the balance
sheet date:
The Group had the following investments in associates and joint ventures at
the balance sheet date:
Ownership of
Country ordinary share capital
2009 2008
Associates
LonZim Plc+ Isle of Man 27.87% 20.00%
E-KwikBuild Pty
Limited + + South Africa - 30.37%
Lonrho Mining
Limited South Africa 25.32% 24.16%
Arlington
Associates
Limited UK 20.00% 20.00%
Joint Ventures
Grand Karavia
Sarl DRC 50.00% -
+ Held directly by Lonrho Plc.
+ + KwikBuild Corporation Limited (note 7) holds 51% of the share capital
(2008:49%). The Group obtained Board control of this investment with effect
from 1 October 2008 and accordingly has treated this entity as a subsidiary
from that date.
Lonrho Mining Limited
Lonrho Mining Limited was presumed not to be an associate in 2007 due the
Group not being able to exercise significant influence over the company. As a
result of a change in the Board of Lonrho Mining Limited in September 2008,
this was no longer the case and hence it was reclassified from other non-
current asset investments with effect from this date.
The value of the Group`s investment in Lonrho Mining Limited was impaired by
GBP4.0 million in the prior period, to reflect the fall in the value of the
shares on the Australian Securities Exchange. The impairment loss was included
in share of loss after taxation. The recoverable amount of the asset has been
assessed at 30 September 2009 by reference to its value in use.
17 Investments in associates and joint ventures (continued) Summary financial
information on associates and joint ventures (100%)
Revenues Profit/(loss)
for for
the the
year/p year/
eriod perio
d
from from
Asset Liabil Equit acquis acqui
s ities y ition sitio
n
GBPm GBPm GBPm GBPm GBPm
2009
Associates
LonZim Plc* 37.4 (3.9) 33.5 2.6 1.2
Lonrho Mining Limited 2.7 (2.5) 0.2 - 0.7
Arlington Associates 0.1 - 0.1 - (0.3)
Limited
40.2 (6.4) 33.8 2.6 1.6
Joint ventures
Grand Karavia SARL 2.6 - 2.6 - 0.4
Revenues Profit/(loss)
Revenues Profit/(loss)
Revenues Profit/(loss)
Revenues Profit/(loss)
Revenues Profit/(loss)
Revenues Profit/(loss)
for for
the the
year/ year/p
perio eriod
d
Asset Liabil Equit acqui acquis
s ities y sitio ition
n
GBPm GBPm GBPm GBPm GBPm
2008
LonZim Plc* 35.8 (2.3) 33.5 0.2 (1.2)
Lonrho Mining Limited 1.4 (1.9) (0.5) - -
E-KwikBuild Housing 0.7 (0.6) 0.1 2.2 0.1
(Pty) Limited
Arlington Associates 0.4 - 0.4 - -
Limited
38.3 (4.8) 33.5 2.4 (1.1)
* The reported LonZim profit is adjusted to exclude amortisation of the
element of the non-compete agreement not recognized in these accounts on
formation of LonZim.
The market value of the Group`s investment in Lonzim Plc at 30 September 2009
was GBP2.2 million (2008: GBP5.5 million). The entity`s year end is 31 August
and it was incorporated on 25 October 2007. It was listed on the AIM market of
the London Stock Exchange on11 December 2007 whereby Lonrho Plc received 20%
of the shares in exchange for a non-compete agreement in Zimbabwe and the
Beira corridor of Mozambique (see note 8). At 26 February 2010 the market
value of the Group`s investment in LonZim Plc was GBP3.2 million.
Estimates and judgements
The Directors use estimates when assessing the carrying value of the Group`s
investments in associates and joint ventures. In assessing the carrying value
of these investments, the Directors consider a number of sources of
information including financial forecasts prepared by management and market
information where available. In considering impairment risks, the Directors
have regard to the quoted share price of Lonrho Mining Limited and LonZim Plc.
Management forecasts have been used to assess whether impairment of the
Group`s other investments in associates and joint ventures was necessary.
Taking all of these factors into account, including the early stage of
development of these businesses, whilst the carrying value of these interests
exceed their quoted market values at 30 September 2009 the Directors do not
consider these investments impaired.
The Directors believe the estimates and judgements used in preparing the
financial statements of associates and joint ventures do not have a material
impact on the carrying values of investments described above. Where associates
and joint ventures do not have 30 September as their year end the most recent
audited financial statements, adjusted as appropriate to align with the Lonrho
year end, are used for consolidation purposes.18 Other investments
2009 2008
GBPm GBPm
At 1 October 0.7 5.0
Transfer to associate (see note - (3.5)
17)
Impairment charge (0.1) (0.8)
AT 30 SEPTEMBER 0.6 0.7
These investments present the Group with opportunity for return through
dividend income and trading gains. None are traded on active equity markets.
They have no fixed maturity or coupon rate. The fair values, and carrying
values, of these investments are stated at cost less provisions for
impairment.
The Directors consider the fair value of these investments is equal to their
book value. The impairments are based on a review of the company`s net assets
and prospects.
The Group holds 20.0% of the share capital of Swissta RDC SpRL. The Group does
not equity account for this entity because it has no representation on the
Board of Swissta RDC SpRL and is unable to exert significant influence over
the business. The carrying value of Swissta RDC SpRL at the balance sheet date
is GBP0.1 million (2008: GBP0.1 million).
Other investments are classified as available-for-sale financial assets.
19 Deferred tax assets and liabilities Recognised deferred tax assets and
liabilities
Assets Liabiliti
es
2009 2008 2009 2008
GBPm GBPm GBPm GBPm
At 1 October - 2.2 1.7 0.7
Acquisition of intangible assets from - - 1.0 -
acquisition of subsidiaries
Revaluation of property, plant and equipment - - - 1.0
Tax losses related to discontinued - (2.1 - -
operations (note 9) )
Exchange differences - (0.1 0.3 -
)
AT 30 SEPTEMBER - - 3.0 1.7
The deferred tax liability at 30 September 2009 and 2008 related to the
revaluation of property, plant and equipment and recognized intangible assets.
There have been no deferred tax assets and liabilities off-set in the current
or proceeding period.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of tax losses
totalling GBP4.1 million (2008: GBP0.6 million) due to uncertainty against the
ability to deduct these losses against future profits.
20 Inventories
2009 2008
GBPm GBPm
Raw materials and consumables 0.9 0.7
Finished goods 2.5 1.5
3.4 2.2
In 2009 raw materials, consumables and changes in work in progress and
finished goods recognised as cost of sales amounted to GBP5.7 million (2008:
GBP4.2 million).
21 Trade and other receivables
Group Company
200 2008 200 200
9 GBPm 9 8
GBP GBP GBP
m m m
Amounts receivable from the sale of 18. 2.6 - -
goods and services 6
Trade receivables due from - 0.3 - -
associates
Other receivables 7.8 7.2 0.5 0.1
Pre-payments and accrued income 6.0 1.5 - -
Amounts owed by Group undertakings - - 55. 45.
8 3
32. 11.6 56. 45.
4 3 4
The average credit period taken on sales of goods is 66.1 days (2008: 19.1
days). No interest is charged on receivables.
The Directors consider the carrying amount of trade and other receivables for
the Group and Company approximates to their fair value.
2009 2008
Movement in the allowance for
doubtful debts GBPm GBPm
At 1 October 0.1 -
Amounts written off during the
year - (0.6)
Increase in allowance recognised
in the income
statement 0.2 0.7
AT 30 SEPTEMBER 0.3 0.1
The amount written off in 2008 relates to SAILS, a discontinued operation.
Refer to note 29 for further information on credit risk management.
22 Cash and cash equivalents
Curren Current Tota Curre Curre Tot
t assets/ l nt nt al
assets (liabilit 2009 asset Asset 200
/(liab ies) s/ s/ 8
ilitie 2009 (liab (liab
s) iliti iliti
for es) es)
sale Held 2008
2009 for
sale
2008
GBPm GBPm GBPm GBPm GBPm GBP
m
Bank balances - 6.9 6.9 0.1 10.2 10.
3
Bank overdrafts - (0.9) (0.9 (0.5) (0.4) (0.
) 9)
CASH AND CASH - 6.0 6.0 (0.4) 9.8 9.4
EQUIVALENTS IN THE
STATEMENT
OF CASH FLOWS
23 Capital and reserves
Group reconciliation of movement in capital and reserves
Attributable to equity holders of the parent
Shar Shar Transl Sha Revalu Retaine Total Minori Total
e e ation re ation d GBPm ty equity
capi prem reserv Opt reserv intere GBPm
tal ium e ion e earning st
GBPm GBPm GBPm res GBPm s GBPm
erv GBPm
e
GBP
m
At 1 2.8 33.2 0.2 2.2 1.6 1.1 41.1 1.6 42.7
Octob
er
2007
Share 1.8 58.1 - - - - 59.9 - 59.9
capit
al
issue
d
Subsi - - - - - - - 3.8 3.8
diari
es
acqui
red
Reval - - - - 2.9 - 2.9 2.0 4.9
uatio
n
Loss - - - - - (33.3) (33.3) (7.7) (41.0)
for
the
perio
d
Defer - - - - - (0.8) (0.8) (0.2) (1.0)
red
tax
Forei - - (0.2) - - - (0.2) 0.6 0.4
gn
excha
nge
trans
latio
n
AT 30 4.6 91.3 - 2.2 4.5 (33.0) 69.6 0.1 69.7
SEPTE
MBER
2008
At 1 4.6 91.3 - 2.2 4.5 (33.0) 69.6 0.1 69.7
Octob
er
2008
Share 3.4 13.4 - - - - 16.8 - 16.8
capit
al
issue
d
Share - - - 0.3 - - 0.3 - 0.3
optio
ns
issue
d
Subsi - - - - - - - 0.2 0.2
diari
es
acqui
red
Subsi - - - - - - - 2.9 2.9
diari
es
sold
Trans - - - - - - - (0.7) (0.7)
fer
(note
7)
Profi - - - - - (6.2) (6.2) 0.9 (5.3)
t/(Lo
ss)
for
the
perio
d
Defer - - - - - - - - -
red
tax
Forei - - (2.0) - (0.4) - (2.4) (0.4) (2.8)
gn
excha
nge
trans
latio
n
AT 30 8.0 104. (2.0) 2.5 4.1 (39.2) 78.1 3.0 81.1
SEPTE 7
MBER
2009
Share capital and share premium
Ordinary shares
In millions of 1p shares 2009 2008
On issue at 1 October 454.9 277.
1
Issued for cash 344.2 177.
8
ON ISSUE AT 30 SEPTEMBER - FULLY 799.1 454.
PAID 9
At 30 September 2009, the authorised share capital comprised 1,100,000,000
ordinary shares (2008: 550,000,000) of 1p each. An increase of 350,000,000
took place on 9 December 2008 and a further increase of 200,000,000 took place
on 30 April 2009. Refer to note 35 for details of share issues after the year
end.
During 2009, the Company issued 308.9 million and 35.3 million shares at
prices of 5p and 7p respectively (2008 44.7 million, 56.9 million and 76.2
million at prices of 38p, 43p and 26p respectively). The costs of the share
issues of GBP1.1 million (2008 GBP1.4 million) have been deducted from the
share premium created on issue.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company. All shares rank equally with regard to the Company`s residual assets.
The Group also issued share options in 2009 (see note 26).
Company reconciliation of movement in capital and reserves
Share Shar Share Retai Total
capital e optio ned GBPm
GBPm prem n earni
ium reser ngs
GBPm ve GBPm
GBPm
At 1 October 2008 2.8 33.2 2.2 (7.1) 31.1
Share capital issued 1.8 58.1 - - 59.9
Equity settled - - - - -
transactions
Loss for the period - - - (7.2) (7.2)
AT 30 SEPTEMBER 2008 4.6 91.3 2.2 (14.3 83.8
)
At 1 October 2008 4.6 91.3 2.2 (14.3 83.8
)
Share capital issued 3.4 - - 16.8
13.4
Equity settled - - 0.3 - 0.3
transactions
Loss for the period - - - (7.0) (7.0)
AT 30 SEPTEMBER 2009 8.0 104. 2.5 (21.3 93.9
7 )
Translation reserve
The translation reserve comprises all foreign exchange differences arising
from the translation of the financial statements of foreign operations since
the conversion to Adopted IFRS on 1 October 2006.
Revaluation reserve
The revaluation reserve relates to property, plant and equipment (see note
15).
Share based payment reserve
The share based payment reserve comprises the charges arising from the
calculation of the share based payments posted to the income statement (see
note 26).
24 Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group`s
interest-bearing loans and borrowings. For more information about the Group`s
exposure to interest rate and foreign currency risk, see note 29.
2009 2008
GBPm GBPm
NON-CURRENT LIABILITIES
Finance lease liabilities 1.1 1.1
Unsecured bank loans 5.2 -
Shareholder loans 7.3 -
Other loans 2.8 -
16.4 1.1
CURRENT LIABILITIES
Unsecured bank loans 1.2 3.0
Convertible loan note 0.3 0.3
Current portion of finance lease 0.2 0.2
liabilities
1.7 3.5
Finance leases
Finance lease liabilities are denominated in US dollars and are payable as
follows:
2009 2008
Futur Prese Futu Prese
e nt re nt
value value
minim of mini of
um minim mum minim
um um
lease lease leas lease
e
payme Interes payme paym Interes payme
nts t nts ents t nts
GBPm GBPm GBPm GBPm GBPm GBPm
Less than one 0.3 (0.1) 0.2 0.3 (0.1) 0.2
year
Between one and 1.2 (0.1) 1.1 1.2 (0.1) 1.1
five years
1.5 (0.2) 1.3 1.5 (0.2) 1.3
Interest is payable on the leases at 9.9% per annum. Under the terms of the
lease agreements, no contingent rents are payable.
Convertible loan note
The UK sterling loan note is held by a minority shareholder in KwikBuild
Corporation Limited. It is convertible to 6.7% of the ordinary share capital
of that company at any time after 1 October 2008 at the option of the
minority. Interest is charged at 8% per annum and there is no repayment date
for the loan. The carrying value approximates to the fair value. See note 35
for events arising after 30 September 2009.
Bank Loans
The Group has one principal bank loan of GBP 5.4 million (2008 GBP3.0 million)
denominated in Central African Franc. The loan is repayable on demand. The
loan is due to be repaid by January 2013 and carries an interest rate of 12%
(2008 12%). The remaining bank losses are denominated in US$ and carry an
interest rate of 2.8% (2008 Nil).
Shareholder and other loans
Shareholder and other loans are denominated in South African Rand.
Bank overdrafts
Bank overdrafts are repayable on demand and are unsecured. The currency
profile is as follows:
200 200
9 8
GBP GBP
m m
Central African Franc 0.1 0.2
US Dollar 0.1 0.2
Sterling 0.7 -
0.9 0.4
The weighted average interest rates paid were 12%
(2008:12%)
The Directors consider the carrying amount of the
Group`s loans and borrowings approximates their
fair value.
25 Interest bearing loans
2009 2008
GBPm GBPm
Shareholder loans in subsidiary
undertakings* 0.3 0.3
0.3 0.3
*The loans are unsecured and are repayable at the discretion of the Directors.
26 Share options
At 30 September 2009 there were 37,505,000 (2008: 27,505,000) share options in
issue with an average exercise price of 10.8p (2008: 31.9p).
The following share options over 1p ordinary shares were granted under an
Unapproved Share option scheme on 13 January 2009.
Name Date Number of Exerci Period Market
granted share se during price
options Price which per
granted exercisab share
le at date
of
grant
or
modific
ation
David 13.01.2009 2,500,000 6.5p 5.8p
Lenigas 13.01.200
9 -
12.01.201
4
Emma 13.01.2009 1,000,000 6.5p 13.01.200 5.8p
Priestley 9 -
12.01.201
4
Geoffrey 13.01.2009 2,000,000 6.5p 13.01.200 5.8p
White 9 -
12.01.201
4
Donald 13.01.2009 500,000 6.5p 13.01.200 5.8p
Strang 9 -
12.01.201
4
Frances 13.01.2009 500,000 6.5p 13.01.200 5.8p
Cook 9 -
12.01.201
4
Jean 13.01.2009 500,000 6.5p 13.01.200 5.8p
Ellis 9 -
12.01.201
4
David 13.01.2009 1,000,000 6.5p 13.01.200 5.8p
Armstrong 9 -
12.01.201
4
Other 13.01.2009 2,000,000 6.5p 13.01.200 5.8p
employees 9 -
and 12.01.201
consultan 4
ts
Total 10,000,000
options
in issue
The following options over 1p ordinary shares granted under an Unapproved
Share option scheme were outstanding at 30 September 2009.
Name Date Number Exer Period Market
granted of cise during price
share which per
option Pric exercisable share
s e at date
grante of
d grant
or
modific
ation
David Lenigas* 25.01.20 3,500, 6.5p 25.01.2006 5.8p
06 000 -
24.01.2011
Emma Priestley* 11.04.20 1,250, 6.5p 11.04.2006 5.8p
06 000 -
10.04.2011
James Hughes* 25.01.20 1,000, 6.5p 25.01.2006 5.8p
06 000 -
24.01.2011
Other employees 30.03.20 1,500, 17.0 30.03.2006 15.0p
and consultants 06 000 p -
29.04.2011
David Lenigas* 30.04.20 3,750, 6.5p 30.04.2007 5.8p
07 000 -
29.04.2012
Emma Priestley* 30.04.20 1,250, 6.5p 30.04.2007 5.8p
07 000 -
29.04.2012
Geoffrey White* 30.04.20 2,500, 6.5p 30.04.2007 5.8p
07 000 -
29.04.2012
Donald Strang* 30.04.20 500,00 6.5p 30.04.2007 5.8p
07 0 -
29.04.2012
Martin Horgan 30.04.20 1,000, 34.5 30.04.2007 32.5p
07 000 p -
29.04.2012
James Hughes* 30.04.20 750,00 6.5p 30.04.2007 5.8p
07 0 -
29.04.2012
Gerard Holden 30.04.20 3,500, 34.5 30.04.2007 32.5p
07 000 p -
29.04.2012
Other employees 30.04.20 290,00 34.5 30.04.2007 32.5p
and consultants 07 0 p -
29.04.2012
Other employees 30.04.20 1,520, 6.5p 30.04.2007 5.8p
and consultants 07 000 -
29.04.2012
David Lenigas* 20.07.20 1,615, 6.5p 20.07.2007 5.8p
07 000 -
19.07.2012
Emma Priestley* 20.07.20 1,065, 6.5p 20.07.2007 5.8p
07 000 -
19.07.2012
Geoffrey White* 20.07.20 1,065, 6.5p 20.07.2007 5.8p
07 000 -
19.07.2012
Donald Strang* 20.07.20 200,00 6.5p 20.07.2007 5.8p
07 0 -
19.07.2012
Martin Horgan 20.07.20 200,00 44.0 20.07.2007 39.5p
07 0 p -
19.07.2012
James Hughes* 20.07.20 350,00 6.5p 20.07.2007 5.8p
07 0 -
19.07.2012
Jean Ellis* 20.07.20 350,00 6.5p 20.07.2007 5.8p
07 0 -
19.07.2012
Other employees 20.07.20 100,00 44.0 20.07.2007 39.5p
and consultants 07 0 p -
19.07.2012
Other employees 20.07.20 250,00 6.5p 20.07.2007 5.8p
and consultants* 07 0 -
19.07.2012
David Lenigas 13.01.20 2,500, 6.5p 13.01.2009 5.8p
09 000 -
12.01.2014
Emma Priestley 13.01.20 1,000, 6.5p 13.01.2009 5.8p
09 000 -
12.01.2014
Geoffrey White 13.01.20 2,000, 6.5p 13.01.2009 5.8p
09 000 -
12.01.2014
Donald Strang 13.01.20 500,00 6.5p 13.01.2009 5.8p
09 0 -
12.01.2014
Frances Cook 13.01.20 500,00 6.5p 13.01.2009 5.8p
09 0 -
12.01.2014
Jean Ellis 13.01.20 500,00 6.5p 13.01.2009 5.8p
09 0 -
12.01.2014
David Armstrong 13.01.20 1,000, 6.5p 13.01.2009 5.8p
09 000 -
12.01.2014
Other employees 13.01.20 2,000, 6.5p 13.01.2009 5.8p
and consultants 09 000 -
12.01.2014
Total options 37,505
issued ,000
* The exercise price was amended to 6.5p on 13 January 2009.
In accordance with IFRS 2 `Share-based payments` share options granted or re-
priced during the year have been measured at fair value at the date of grant
or re-pricing and, in the case of re-priced options, the increase in the fair
value compared with the value of the original award at that date has been
recognised as an expense in the income statement with a corresponding increase
in equity. The fair value of the options granted has been estimated at the
date of grant using the Black-Scholes option-pricing model. The estimated fair
value of the options granted on 13.01.09 was GBP0.2 million. The estimated
fair value of the options re-priced on 13 January 2009 was GBP0.1 million.
Date of Grant
13.01. 30.0 20.0
2009 4.20 7.20
07 07
Share price 5.8p 32.5 39.5
p p
Exercise price 6.5p 34.5 44.0
p p
Expected volatility 49.0% 45.3 45
% .30%
Expected life* 2.5 2.5 2.5
years year year
s s
Expected dividends 0.00% 0.00 0.00
% %
Risk-free interest rate 5.50% 5.50 5.50
% %
* The expected life used for re-priced options is 1 year reflecting the
shorter remaining life of these options
Volatility has been calculated by reference to the movement of the Company`s
share price over the previous three and a half years.
All share options vest at the date of grant and the basis of settlement is in
shares of the Company.
27 Trade and other payables
Group Company
2009 2008 2009 200
GBPm GBPm 8
GBPm GBP
m
Trade payables 21.1 5.6 - -
Amounts owed to Group - - 0.4 0.4
undertakings
Indirect tax and social security 0.4 1.9 - -
liabilities
Deferred income 4.0 - - -
Non-trade payables and accrued 11.0 6.3 0.5 -
expenses
36.5 13.8 0.9 0.4
Trade payables principally comprise outstanding amounts for trade purchases
and on-going costs. The average credit period taken for trade purchases is 45
days (2008 47 days).The Directors consider that the carrying amount of trade
payables approximates to their fair value. The number of days billing
outstanding for the Company at the year end is 31 days (2008: Nil).
28 Notes to the cash flow statement
Grou Company
2009 p
GBPm 2009 2008
2008 GBPm GBPm
GBPm
Depreciation of property, plant - -
and equipment Amortisation of - -
intangible assets 5.3 3.1 - -
Impairment of goodwill and other 0.6 0.3
intangible assets - 5.8
Share based payment expense 0.3 - 0.3 -
Finance income (5.4) (3.9 - -
)
Share of profit of associates (0.2) _ - -
Impairment/write off of goodwill - 4.0 - -
and investment in associate
Gain on disposals of (2.2) - - -
assets/liabilities held for sale
Impairment/loss on disposal of - 0.8 - -
investments
Gain on sale of intangible fixed 0.1 (5.8 - -
asset )
Income tax expense 0.8 2.3 - -
ADJUSTMENTS TO LOSS FOR THE YEAR (0.7) 6.6 0.3 -
29 Financial instruments
The Company has no financial assets apart from the other receivable amounts
owed by and to Group undertakings included within note 21. The Company applies
a similar approach to credit risk management as the Group. The Directors
believe that there were no significant credit risks to the Company.
Exposure to credit, liquidity, interest rate and currency risks arises in the
normal course of the Group`s business.
This note presents information about the Group`s exposure to each of the above
risks, the Group`s objectives, policies and processes for measuring and
managing risk, and the Group`s management of capital which the Directors
consider to be the components of Total Equity excluding minority interests as
identified on page 19. Further quantitative disclosures are included
throughout these consolidated financial statements. The Board of Directors
have overall responsibility for the establishment and oversight of the Group`s
risk management framework.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group
has adopted a policy of only dealing with credit worthy counterparties and
obtaining sufficient collateral where appropriate, as a means of mitigating
the risk of financial loss from defaults. No collateral is held at the year
end. The Group`s exposure and the credit ratings of its counterparties are
continuously monitored and the aggregate value of transactions concluded is
spread amongst approved counterparties.
Trade receivables consist of a large number of customers, spread across
diverse industries and geographical areas. Ongoing credit evaluation is
performed on the financial condition of accounts receivable. The Group does
not have any significant credit risk exposure to any single counterparty or
any Group of counterparties having similar characteristics. The credit risk on
liquid funds is limited because the counterparties are banks with high credit-
ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements,
net of any allowances for losses, represents the Group`s maximum exposure to
credit risk without taking account of the value of any collateral obtained. At
the balance sheet date, there were no significant credit risks. The maximum
exposure to credit risk at the balance sheet date was GBP33.3 million being
the total of the carrying amount of financial assets, excluding equity
investments as shown in the table below:
2009 2008
GBPm GBPm
Cash and cash equivalents
Trade receivables 6.9 10.2
Other receivables 18.6 2.6
7.8 7.5
33.3 20.3
The ageing of trade receivables
at the balance sheet date was:
2009 2008
GBPm GBPm
Not due 7.7 1.5
Past due 0-30 days 3.4 0.6
Past due 3 1-60 days 2.1 0.3
More than 60 days past due 5.4 0.2
18.6 2.6
The movement on the provision for doubtful debts is disclosed in note 21. The
provision at the year end of GBP0.3 million (2008: GBP0.1million) relates to
and is included within trade receivables more than 60 days past due. Other
amounts past due are considered collectible based on prior experience.
The maximum exposure to credit 2009 200
risk for trade receivables by GBPm 8
geographic region was: GBP
m
West Africa 8.4 0.9
Southern Africa 9.2 0.8
East Africa 1.0 0.9
18.6 2.6
The maximum exposure to credit
risk for trade receivables at the
balance sheet date by type of
counterparty:
2009 200
8
GBPm GBP
m
Wholesale customers 18.6 2.6
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which has built an appropriate liquidity risk management framework
for the management of the Group`s and Company`s short, medium and long term
funding and liquidity management requirements. The Group and Company manages
liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities by continuously monitoring forecast and actual
cash flows and matching the maturity profiles of financial assets and
liabilities.
The following are the contractual maturities of financial liabilities,
including estimated interest payments and excluding the effect of netting
agreements:
Carrying Contra 2009 1 to 2 to 5yea
amount ctual 1 <2ye <5ye rs
GBPm cash year ars ars and
flows or GBPm GBPm over
GBPm less GBPm
GBPm
Bank overdrafts 0.9 0.9 0.9 - - -
Trade and other 36.5 36.5 36.5 - - -
payables
Bank loans 6.4 6.9 1.3 1.4 4.2 -
Finance leases 1.3 1.5 0.3 0.3 0.9 -
Shareholder loans 7.6 12.1 0.9 0.9 2.7 7.6
Convertible loan note 0.3 0.3 0.3 - - -
Other loans 2.8 3.4 0.3 3.1
55.8 61.6 40.5 5.7 7.8 7.6
2008
Carrying Contra 1 1 to 2 to 5yea
amount ctual year <2ye <5ye rs
GBPm cash or ars ars and
flows less GBPm GBPm over
GBPm GBPm GBPm
Bank overdrafts 0.4 0.5 0.5 - - -
Trade and other 13.8 13.8 13.8 - - -
payables
Bank loans 3.0 3.4 3.4 - - -
Finance leases 1.3 1.5 0.3 0.3 0.9 -
Shareholder loans 0.3 0.3 - - - 0.3
Convertible loans 0.3 0.3
0.3
19.1 19.8 18.3 0.3 0.9 0.3
In respect of income-earning financial assets and interest-bearing financial
liabilities, the following table indicates their effective interest rates at
the balance sheet date and the periods in which they re-price.
2009
Effec
tive
inter 1 1-2 2-5 5
est year year
s
Rate Total or years year and
less s over
% GBPm GBPm GBPm GBPm GBPm
Cash and cash 1% 6.9 6.9 - - -
equivalents
Loans 12% (16.5 (1.2) (2.8) (5.2 (7.3
) ) )
Convertible loan note 8% (0.3) (0.3) - - -
Finance lease 9.9% (1.3) - (1.3) - -
liabilities
Bank overdrafts 12% (0.9) (0.9) - - -
(12.1 4.5 (4.1) (5.2 (7.3
) ) )
2008
Effectiv
e
interest 1 year 1-2 2-5 5
years
Rate Total or less years years and
over
% GBPm GBPm GBPm GBPm GBPm
Cash and cash 5% 10.2 10.2 - - -
equivalents
Loans 12% (3.0) - - (3.0) -
Convertible 8% (0.3) - - - (0.3)
loan note
Finance lease 9.9% (1.3) - - (1.3) -
liabilities
Bank 12% (0.4) (0.4) - - -
overdrafts
5.2 9.8 - (4.3) (0.3)
Cash and cash equivalents
Included in cash equivalents is an amount of GBP2.8 million which is subject
to restrictions on movement as it relates to a performance bond.
Foreign currency risk management
The Group is exposed to foreign currency risk on sales, purchases and
borrowings that are denominated in a currency other than the pounds sterling.
The currencies giving rise to this risk are primarily, US Dollars, South
African Rand, Mozambique Metical, Kenyan Shilling, Central African Franc and
the Euro.
The carrying amount of the Group`s foreign currency denominated monetary
assets and monetary liabilities, and its total net assets at the reporting
date is as follows:
Monetary net Total
assets assets
2009 2009 2008
2008 GBPm GBPm
GBPm GBPm
U.S.Dollar (13.8 0.3 50.5 39.9
)
South African Rand (7.7) - 12.3 2.1
Mozambique Metical 1.0 0.8 14.0 13.0
Kenyan Shillings - (0.3) - 2.5
Central African Franc (5.4) (3.8) (5.4 (3.8
) )
Euro - 0.1 - 0.1
(25.9 (2.9) 71.4 53.8
)
The following significant
exchange rates applied during
the year:
2009 Average Closing
Rate rate
2008 2009
2008
US Dollar 1.55 1.97 1.60 1.7
8
Euro 1.15 1.31 1.09 1.2
7
South African Rand 13.99 14.65 12.12 14.
76
Mozambique Metical 40.35 47.54 46.36 43.
23
Kenyan Shilling 125.11 130.92 124.99 130
.43
Central African Franc 766.20 858.08 717.73 832
.39
The Company does not have any exposure to foreign currencies at the reporting
date (2008: GBPnil).
Foreign currency sensitivity analysis
A 10% strengthening of the UK sterling against the following currencies at 30
September would have increased/(decreased) equity and profit or loss by the
amounts shown below. This analysis assumes that all other variables remain
constant. The analysis is performed on the same basis for 2008.
2009 2008
Equity Profit/( Equity Profit/(lo
loss) ss)
GBPm GBPm GBPm GBPm
US Dollar (3.3) (1.0) (3.5) 1.1
Mozambique (0.8) 0.1 (1.2) (0.1)
Metical
South African (0.6) 0.1 - -
Rand
A 10% weakening of UK sterling against the above currencies at 30 September
would have had the equal but opposite effect on the above currencies to the
amounts shown above, on the basis that all other variables remain constant.
Interest rate risk management
The Company and the Group are not significantly exposed to interest rate risk
as entities in the Group have limited borrowings. The only major loan carries
a fixed interest rate as detailed in note 24. The Company and the Group`s
exposures to interest rates on financial assets and financial liabilities are
detailed in the liquidity risk management section of this note.
Capital management
The Board`s policy for the Group and Company is to maintain a strong capital
base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. The Board of Directors monitors the return
on capital, which the Group defines as net operating income divided by total
shareholders` equity, excluding minority interests.
As the Group is in a phase of expansion, the key capital requirements are to
ensure that funding is available for current and planned projects. To date
this has been achieved through capital raises. Given the current economic
climate, the Directors have instigated a number of other initiatives to ensure
sufficient funds are in place (see note 35).
Fair values
The fair values are not materially different to the carrying amounts shown in
the balance sheet in the current and proceeding year. The following summarises
the major methods and assumptions used in estimating the fair values of
financial instruments.
Interest-bearing loans and borrowings
Fair value is calculated based on discounted expected future principal and
interest cash flows.
Finance lease liabilities
The fair value is estimated as the present value of future cash flows,
discounted at market interest rates for homogeneous lease agreements. The
estimated fair values reflect change in interest rates.
Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the
notional amount is deemed to reflect the fair value. All other
receivables/payables are discounted to determine the fair value.
30 Operating leases
At the balance sheet date, the Group had outstanding commitments for future
minimum lease payments under non-cancellable operating leases, which fall due
as follows:
Property Shipping* Total
200 2008 200 200 200 2008
9 9 8 9
GBP GBPm GBP GBP GBP GBPm
m m m m
Less than one year 0.4 0.3 - 14. 0.4 14.3
0
Between one and five 1.4 0.2 - 0.6 1.2 0.8
years
1.8 0.5 - 14. 1.6 15.1
6
* Relates to SAILS which has been classified as a discontinued operation (see
note 9).
Included in the above, are property leases of the Company amounting to GBP0.3
million (2008: GBP0.2 million) less than 1 year.
31 Capital commitments
The Group has long term capital commitments in respect of an order for ten ATR
aircraft. The total purchase price for the ten aircraft is capped at US$181.9
million (GBP112 million). The deposits for the first two (2008 four) of these
aircraft of US$7.9 million (GBP4.9 million) have been paid and are included
within other receivables (note 21). The timing of the delivery and finance for
the first two aircraft is being negotiated. An Export Credit Agency Promise of
Guarantee has been issued by Coface for 80% of the financing of the initial
four aircraft.
The above commitments are contingent on the successful arrangement of
commercial finance which will be arranged by ATR. Other capital commitments of
GBP1.2 million will be paid within the next financial year (2009
GBP1.1million).
The Company had no capital commitments at 30 September 2009 (2008: GBPnil).
The Group`s share of capital commitments of joint ventures is GBP4.5 million
(2008: GBPNil)
32 Contingent liabilities
There were no contingent liabilities at the balance sheet date (2008: GBPnil),
the outurn of which the Directors consider could materially impact the
financial statements. The Group has no contractual obligation to provide
future funding to joint ventures and has no contingent liabilities in respect
of its joint ventures.
33 Related parties
The Group has a related party relationship with its subsidiaries (see note
34), associates and joint ventures (see note 17), companies in which the Group
has an investment, and with its Directors.
Transactions with subsidiaries
Transactions within the Group companies have been eliminated on consolidation
and are not disclosed in this note.
At the balance sheet date Lonrho Africa (Holdings) Limited owed the Company
GBP55.8 million (2008 GBP45.3 million). Lonrho Africa (Holdings) Limited holds
the operating bank accounts for the Group and the majority of the Group`s
investments. The movement on the intercompany balance represents the transfer
of cash raised during the year through the capital raises.
Transactions with associates
LonZim Plc
At the balance sheet date, the Company owned 27.87% of LonZim Plc and exerts
significant influence over the company. On admission to AIM in 2007 LonZim Plc
issued shares to the value of GBP7.3 million in exchange for Lonrho Plc
entering into a non-compete agreement. The agreement covers a period of five
and a half years from November 2007.
Between 5 February 2009 to 11 February 2009 Lonrho Plc acquired a further
1,650,000 ordinary shares of GBP0.0001 each in LonZim Plc, taking its total
interest to 8,940,000 ordinary shares, which represented an approximate 24.53
per cent. holding in LonZim`s total issued share capital at that time. The
reduction in the overall interest reflects the impact of a share issue by
LonZim in December 2009 in which the Group did not participate.
During the period the Company charged GBP0.4 million (2008 GBP0.2million) to
LonZim Plc as a management charge. At the balance sheet date GBPNil was due
from LonZim Plc (2008 GBP0.2million).
During the year Lonzim acquired 59,682,817 shares in Lonrho Plc at a weighted
average cost of 5p per share. At the year end LonZim Plc held 17,182,817
shares in Lonrho Plc. These were sold over the period to December 2009.
On 1 July 2009 Lonzim acquired an aircraft from Lonrho Air Three (BVI)
Limited, a subsidiary of Lonrho Plc, for a total of US$4.3million
(GBP2.6million). The aircraft is leased to Five Forty Aviation Limited, a
Lonrho subsidiary, for US$55k (GBP35k) per month. The total lease income for
the year to 30 September 2009 amounted to US$0.1million (GBP0.1million).
Investments
On 1 October 2008 Lonzim leased two aircraft to 540 (Uganda) Limited, a Lonrho
subsidiary, for US$50k (GBP31k) per month. The total lease expense for the
year to 30 September 2009 amounted to US$0.6million (GBP0.4million).
From 1 January 2009 ForgetMeNot Africa Limited, a 51% subsidiary of LonZim
Plc, leased office space from Lonrho Plc for GBP2k per month. The total amount
for the year amounted to GBP18k.
On 16 December 2008 Lonrho Africa (Holdings Limited) transferred the entire
share capital of Lonrho Africa Property (Holdings) Limited to LonZim Holdings
Limited for GBP1 consideration. Lonrho Africa Property (Holdings) Limited then
changed its name to LonZim Enterprises Limited.
At the balance sheet date GBPNil (2008: GBP42k) was due to LonZim Plc.
Lonrho Mining Limited
During the year the Group increased its stake in Lonrho Mining Limited from
24.16% to 25.32% at a cost of GBP0.5 million. At the balance sheet date GBP0.1
million was due from Lonrho Mining Limited (2008: GBP0.1million) which arose
from a short term, non-interest bearing loan.
Swissta RDC SpRL
The Group holds 20.0% of Swissta RDC SpRL (see note 18). At the balance sheet
date GBP0.1 million (2008: GBP0.1 million) was due from Swissta RDC SpRL as a
result of a short term non-interest bearing loan.
Transactions with key management personnel
Key management personnel are considered to be the Company`s Directors. Their
remuneration is disclosed in notes 26 and 10.
During the year GBP0.1 million (2008 GBP0.3 million) was charged to the Group
by DSG Chartered Accountants. Jean Ellis is a partner in this firm.
34 Group entities Significant subsidiaries
Country of Ownership
incorporation interest
2009 2008
Luba Freeport Limited Jersey 63% 63%
FiveForty Aviation Limited Kenya 49% 49%
Lonrho Air (BVI) Limited British Virgin 100% 100%
Islands
SA Independent Liner South Africa - 66.7
Services Pty Limited + + %
Sociedade Comercial Bytes & Mozambique 65% 65%
Pieces Limitada
Complete Enterprise Mauritius 50% 50%
Solutions Limited
Complete Enterprise South Africa 40% 40%
Solutions South Africa
(Proprietary) Limited
Indit Technology South Africa 45% 45%
Distribution (Proprietary)
Limited
Swissta Holdings Limited Mauritius 100% 100%
Swissta Mozambique Lda Mozambique 100% 100%
Hotel Cardoso SARL Mozambique 59.04 59.0
% 4%
KwikBuild Corporation Isle of Man 61.97 61.9
Limited % 7%
Lonrho Africa (Holdings) UK 100% 100%
Limited+
Rollex (Pty) Limited South Africa 51% -
E-Kwikbuild (Pty) Limited South Africa 32% 31%
+ Directly held by the Company.
++ SA Independent Liner Services Pty Limited was put into liquidation on 15
October 2008.
Inclusion of all the subsidiaries in the Group would be excessive and
therefore only the significant trading entities are shown above.
Although the Group owns less than half of the voting power of FiveForty
Aviation Limited, it is able to govern the financial and operating policies of
that company by virtue of an agreement with the other investors of FiveForty
Aviation Limited. Consequently, the Group consolidates its investment in the
company.
Similarly for Complete Enterprise Solutions South Africa (Proprietary) Limited
and Indit Technology Distribution (Proprietary) Limited, and E-Kwikbuild (Pty)
Limited (see note 17), the Group has Board control giving it the ability to
govern the financial and operating policies of the companies and hence the
Group consolidates its investment in these companies. Exchange control
procedures exist in Kenya, Mozambique and South Africa which place
restrictions on repatriation of cash to the Group.
35 Events after the balance sheet date
In December 2009:
On 4 December the Company issued 160,257,213 0rdinary shares via a placing at
10p per share raising GBP16.02 million before issue costs. The total amount of
shares in issue following the placing was 959,353,712.
On 21 December the Company increased its holding in Kwikbuild Corporation
Limited to 70%. The Company paid consideration of GBP333,333 to increase its
equity by 8% of the business and to acquire an historic shareholder loan which
in due course will be converted to equity.
On 30 December the Company issued 90,925,000 ordinary shares at 10p raising
GBP9.1 million before issue costs. The total number of shares in issue
following the placing was 1,050,278,712.
In February 2010:
On 18 February 2010 the Company announced that it had signed a formal Heads of
Agreement to acquire 100% of Trak-Auto Lda, (Trak-Auto) the existing holder of
the John Deere and Komatsu dealerships in Mozambique. John Deere is a leading
supplier of agricultural equipment and Komatsu is one of the world`s largest
manufacturers of construction, mining and utility equipment. The acquisition
price is US$2 million (GBP1.2 million) and deferred payments of US$1 million
(GBP0.66 million) per year over three years.
3 March 2010
South African Sponsor
Java Capital (Proprietary) Limited
Date: 03/03/2010 14:24:03 Produced by the JSE SENS Department.
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