Abridged Audited Consolidated Financial Statements for the year ended 30 September 2013

Chairmans Statement
Introduction The 12 months to 30 September 2013 were extremely difficult, as business confidence, investment and economic activity became increasingly depressed. At Powerspeed, we maintained focus on expanding trading operations under the Electrosales Hardware brand. The expansion program has been exciting, and has been met with enthusiasm by our old customers, and attracted many new ones. The Group profit is down on the previous year, largely as a result of the investments in transforming the business into the first choice national hardware retailer. Financial Performance At USD28.6m, turnover for the period, is marginally down on the previous year's USD29.2m. On the other hand, gross profit is 6% up, from USD8.2m to USD8.7m; reflecting the increase in the Group's retail business, where the overall gross margin rose by 2.4 points, from 28.0% to 30.4%. The expansion and improvement of the branch network countrywide, has increased expenses, resulting in a marginal decrease in profit from operations, from USD1.39m to USD1.16m. An extremely tight debtors policy may have negatively impacted on turnover. However, the policy helped improve cash flows and has allowed for a greater investment in stocks, while reducing the cost of finance from USD676k to USD555k. Profit for the year came in at USD466k, compared to USD535k last year. Consequently, earnings per share fell from 0.14 cents to 0.12 cents. Review of Operations In pursuit of approved strategy, there has been a drive to improve and expand the Group's trading branch network. During the financial year, new branches were opened in Victoria Falls and on Harare Street within the Harare CBD. Two new branches were also opened in Chinhoyi and Gweru, in October 2013. In addition, Kwekwe, Msasa and Mutare branches were re-located to bigger premises, while Bulawayo, Chiredzi and Masvingo branches were renovated and re-branded Electrosales. These improvements have provided for a significantly enhanced shopping experience for our customers, which is delivering increased market share for us. The Group's engineering units have been re-structured to operate mainly as service centres, with limited product manufacture, in support of the Group's trading operations, and as special project implementation units. Whereas it is not anticipated that these operations will make a significant contribution to Group income under the present economic environment, they do provide strength where product customisation or backup services are required and the group will still be in a position to expand the engineering division should the conditions for manufacture in Zimbabwe improve. Outlook The Electrosales Hardware brand has continued to improve its already good position as the foremost supplier of hardware products with continuous improvement to the range of products on offer. We believe that Zimbabwean consumers deserve, and will demand, first class service from their retailers and we believe that we can provide this. This will be a core strength going forward and puts the group in a strong position as Zimbabwe progressively reintegrates into regional and global markets. Dividend There continues to be a great need for working capital to finance expansion of the business and also to reduce borrowings. Therefore the Board considered it prudent not to declare a dividend for the year ended 30 September 2013. Appreciation I would like to express our gratitude to management and all staff, for their dedication and application, which have yielded these commendable results. Our thanks also go to our suppliers and customers for their support. The strong relationships we have with them are helping to build the group to our mutual benefit. We thank our shareholders for their continued patience and support and, although there is no dividend payable, we do believe that we are steadily building value and that the rewards will come in due course. Finally, I am grateful to my fellow Directors for their invaluable contributions over the past year. It continues to be a pleasure working with you all. 13 December 2013 CASH GENERATED FROM OPERATIONS Profit before income tax Adjustment for non-cash items: Profit from disposal of property, plant and equipment Unrealised exchange gain/(loss) Finance cost Depreciation charge for the year Operating cash flow before changes in working capital Changes in working capital: Increase in inventory (Increase)/decrease in related party receivables Decrease in trade and other receivables Decrease in related party payables Increase/(decrease) in trade and other payables Cash generated from operating activities Finance cost Tax paid Cash generated from/(utilised in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Acquisition of investment property Proceeds from the disposal of property, plant and equipment Cash utilised in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Share buy back Proceeds from issue of shares Net proceeds from loans (raised)/repaid Cash (utilised in)/generated from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of year 9

Abridged Consolidated Statement of Financial Position

as at 30 September 2013 Notes ASSETS Non-current assets Property, plant and equipment Investment property Investment in subsidiaries GROUP 2013 USD 1 320 820 3 910 000 5 230 820 Current assets Inventories Related party receivables Trade and other receivables Cash and cash equivalents Tax receivable 2012 USD 1 353 943 3 910 000 5 263 943 COMPANY 2013 2012 USD USD 1 315 636 2 820 888 4 136 524 1 345 648 2 820 666 4 166 334

5 6

7 8 9

9 275 069 1 779 395 331 447 11 385 911

7 745 185 2 817 906 335 586 10 898 677

9 082 616 440 494 1 722 490 135 655 16 714 11 397 969

7 452 465 288 393 2 796 996 172 277 10 781 10 720 912

Total assets EQUITY AND LIABILITIES Capital and reserves Share capital Share premium Capital redemption reserve Non-distributable reserves Foreign currency translation reserve Retained earnings/(loss)

16 616 731

16 162 620

15 534 493

14 887 246

10

38 670 174 569 (209 502) 7 673 823 10 825 315 858 8 004 243

39 441 174 569 (119 444) 7 673 823 (6 256) (150 044) 7 612 089

38 670 174 569 (209 502) 7 108 034 613 284 7 725 055

39 441 174 569 (119 444) 7 107 833 175 659 7 378 058

Non-current liabilities Deferred taxation Long term borrowings

12

1 192 999 1 046 241 2 239 240

1 230 664 809 609 2 040 273

92 912 740 846 833 758

113 283 344 707 457 990

Current liabilities Trade and other payables Provisions Related party payables Short term borrowings Taxation

11

12

2 781 805 833 532 2 754 819 3 092 6 373 248

2 769 844 723 036 2 998 054 19 324 6 510 258

2 752 307 833 532 635 022 2 754 819 6 975 680

2 694 333 723 036 635 775 2 998 054 7 051 198

Total equity and liabilities

16 616 731

16 162 620

15 534 493

14 887 246

Abridged Consolidated Statement of Cash Flows

for the year ended 30 September 2013 GROUP 2013 USD 2012 USD COMPANY 2013 2012 USD USD

Notes

603 377

711 187

551 955

611 894

Abridged Consolidated Statement of Comprehensive Income

for the year ended 30 September 2013 GROUP 2013 USD 28 601 573 (19 908 032) 8 693 541 435 324 (7 970 918) 1 157 947 (554 570) 603 377 (137 475) 465 902 2012 USD COMPANY 2013 2012 USD USD 27 780 886 (19 407 216) 8 373 670 417 156 (7 693 070) 1 097 756 (545 801) 551 955 (114 329) 437 626 28 332 571 (20 438 280) 7 894 291 425 683 (7 043 866) 1 276 108 (664 214) 611 894 (152 755) 459 139

(13 335) 17 081 554 570 389 879

(54 461) (140 321) 676 132 352 001

(13 335) 545 801 382 422

(54 461) (152 442) 664 214 378 839

Notes Revenue Cost of sales Gross profit Other income Operating expenses Profit from operations Finance costs Profit before taxation Income tax expense Profit for the year

1 551 572 (1 529 883) 1 038 512 122 456 1 182 657 (554 570) (191 371)

1 544 538 (290 765) 563 981 (772 323) 1 045 431 (676 132) (304 309)

1 466 843 (1 630 151) (152 101) 1 074 506 (754) 168 470 926 813 (545 801) (140 635)

1 448 044 (293 853) 19 553 334 653 (134 274) (659 318) 714 805 (664 214) (282 420)

29 212 004 (21 014 552) 8 197 452 466 091 (7 276 224) 1 387 319 (676 132) 711 187 (175 758) 535 429

436 716

64 990

240 377

(231 829)

Other comprehensive income Exchange difference on translating foreign operations Income tax relating to components of other comprehensive income Other comprehensive income for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(464 800) 121 376 (343 424)

(214 719) (4 309) 109 599 (109 429)

(460 451) 121 377 (339 074)

(213 202) 108 777 (104 425)

36 433 (19 352) 17 081

93 997 (24 204) 69 793

482 982

605 222

437 626

459 139

(90 829) (6 603)

(120 597) 5 188 10 946

(90 829) 152 904

(120 597) 5 188 224 248

Earnings per share Basic earnings per share (in cents)

0.12

0.14

0.11

0.12

(97 432) (4 140) 335 587 331 447

(104 463) (148 902) 484 489 335 586

62 075 (36 622) 172 277 135 655

108 839 (227 415) 399 692 172 277

Diluted earnings per share (in cents)

0.12

0.14

0.11

0.12

DIRECTORS: Dr. S.H. Makoni, H.N. Macklin, M.S. Gurira, M.S. Kretzmann, C.C.M. Tambo, N.H. Kretzmer

Abridged Audited Consolidated Financial Statements for the year ended 30 September 2013 (continued)
Abridged Statements of Changes in Equity
for the year ended 30 September 2013 GROUP
Equity capital USD Capital NonShare Redemption distributable Premium Reserve reserves USD USD USD Foreign Currency translation reserve USD Retained loss/ earnings USD

security on a loan obtained from Stanbic Bank. The directors have assessed the values of the investment property as at 30 September, 2013 and these have been considered to be reasonable. GROUP 2013 USD 7 Inventories Finished goods Raw materials Work in progress Goods in transit Allowance for obsolete inventory 7 926 578 267 312 75 428 1 400 119 (394 368) 9 275 069 COMPANY 2013 2012 USD USD 7 734 125 267 312 75 428 1 400 119 (394 368) 9 082 616 6 227 558 995 922 98 631 732 800 (602 446) 7 452 465

Total USD

2012 USD 6 520 278 995 922 98 631 732 800 (602 446) 7 745 185

Notes

At 1 October 2011 Fair value adjustment on investment property 13 Restated opening balance as at 1 October 2011 Share buy back Issue of shares Total comprehensive income for the year At 30 September 2012 Total comprehensive income for the year Share buyback At 30 September 2013

34 931 -

- 7 936 638 (262 815)

(76 049) -

(685 473) 7 210 047 (262 815)

34 931 (1 153) 5 663 39 441 (771) 38 670

174 569 174 569 174 569

- 7 673 823 (119 444) -

(76 409) 69 793 (6 256) 17 081 10 825

(685 473) 6 947 232 - (120 597) 180 232 535 429 605 222
8

During the year ended 30 September 2013, a total of USD240 000 was included in profit and loss as an expense increasing the allowance relating to obsolete inventory whilst USD448 078 was written off against the allowance for obsolete stock. Trade and other receivables Trade Allowance for credit losses

(119 444) 7 673 823 (90 058) -

(150 044) 7 612 089 465 902 482 982 (90 829)

1 226 742 (149 116) 1 077 626 701 769 1 779 395

2 266 308 (366 709) 1 899 599 918 307 2 817 906

1 171 156 (149 116) 1 022 040 700 450 1 722 490

2 255 425 (366 709) 1 888 716 908 280 2 796 996

Other

(209 502) 7 673 823

315 858 8 004 243

During the year, a total amount of USD180 000 was included in profit and loss as an expense increasing the allowance relating to credit losses whilst an amount of USD397 593 was written off against trade receivables.
Retained earnings Total

COMPANY
Equity capital Capital NonShare Redemption distributable Premium Reserve reserves

Foreign Currency translation reserve

USD At 1 October 2011 Fair value adjustment on investment property 13 Restated opening balance as at 1 October 2011 Revaluation of investment in subsidiary Share buy back Issue of shares Total comprehensive income for the year At 30 September 2012 Total comprehensive income for the year Share buy back Redenomination of shares At 30 September 2013 34 931 -

USD -

USD

USD

USD -

USD

USD

- 4 252 148 (262 815)

(283 481) 4 003 598 (262 815)

Cash and cash equivalents For the purposes of statement of cash flows, cash and cash equivalents include cash on hand and in banks net of outstanding bank overdrafts. Cash and cash equivalent at the end of the year as shown in the statement of cashflows can be reconciled to the related items in statement of financial position as follows: Cash on hand Bank balances 62 184 269 263 331 447 37 874 297 712 335 586 61 854 73 801 135 655 37 874 134 403 172 277

34 931 (1 153) 5 663 39 441 (771) 38 670

174 569 174 569 174 569

- 3 989 333 - 3 118 500 (119 444) -

(283 481) 3 740 783 - 3 118 500 - (120 597) 180 232 459 139 459 139
10 Share capital Authorised share capital 500 000 000 ordinary shares at USD 0.0001 per share Issued and fully paid The movement in ordinary share capital is shown below: Ordinary share capital 1 October Ordinary shares issued Share buyback

50 000

50 000

50 000

50 000

(119 444) 7 107 833 (90 058) 201

175 658 7 378 058 437 626 437 626 (90 829) 201

39 441 (771) 38 670

34 931 5 663 (1 153) 39 441

39 441 (771) 38 670

34 931 5 663 (1 153) 39 441

(209 502) 7 108 034

613 284 7 725 055

The unissued shares are under the control of the directors for an indefinite period and are subject to the limitations imposed by the Zimbabwe Stock Exchange and the Companies Act (Chapter 24:03).

Notes to the abridged consolidated financial statements

for the year ended 30 September 2013 1 Presentation and statement of compliance The abridged consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting and in terms of the Zimbabwe Stock Exchange listing rules and the Companies Act (Chapter 24:03). They do not include all of the information required for full annual financial statements and should be read in conjunction with the audited annual financial statements, which have been prepared in accordance with International Financial Reporting Standards. Accounting policies The financial statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense. The accounting policies are consistent with those adopted in the Groups last annual financial statements. Group Company 2013 2012 2013 2012 USD USD USD USD Taxation Current taxation (155 788) (196 300) (134 700) (173 297) Deferred taxation 18 313 20 542 20 371 20 542 (137 475) 4. (175 758) (114 329) (152 755)

11

Trade and other payables Trade Other

823 255 1 958 550 2 781 805

1 125 688 1 644 156 2 769 844

826 311 1 925 996 2 752 307

1 125 688 1 568 645 2 694 333

12

Borrowings Long term borrowings Short term borrowings Bankers acceptances Bank overdraft 1 046 241 809 609 740 846 344 707

1 871 968 882 851 2 754 819

1 500 000 1 498 054 2 998 054

1 871 968 882 851 2 754 819

1 500 000 1 498 054 2 998 054

13

Restatement of non-distributable reserve During the year ended 30 September 2013, the directors engaged an independent valuer Gabriel Real Estate to determine the value of investment property. The results of the valuation indicated that the investment property was over valued by USD353 959 at the time of adoption of the multi-currency system in 2009, and this was due to unavailability of reliable market information. The effect of over valuation is USD262 815 net of tax and therefore the non-distributable reserve has been restated accordingly. Financial risk management objectives and policies The Group's principal financial liabilities comprise loans payable, bank overdrafts and trade payables. The main purpose of these financial liabilities is to raise finance for the Groups operations. The Group has various financial assets such as trade receivables and cash and short term deposits, which arise directly from its operations. Exposure to credit, interest rate and currency risk arises in the normal course of Groups business and these are main risks arising from the Groups financial instruments. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below: Credit risk Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Group assumes foreign credit risk only on customers approved by the Board and follows credit review procedures for local credit customers. Interest rate risk The Groups exposure to the risk of changes in market interest rates relates primarily to the Groups long and short term debt obligations and bank overdrafts. The Groups policy is to manage its interest cost using a mix of fixed and variable rate debts. Currency risk The Group is exposed to foreign currency risk on transactions that are denominated in a currency other than the United States Dollar. The currency giving rise to this risk is primarily the Zambian Kwacha. In respect of all monetary assets and liabilities held in currencies other than the United States Dollar , the Group ensures that the net exposure is kept to an acceptable level, by buying or selling foreign currencies at spot rates where necessary to address short-term imbalances. The Groups exposure to foreign currency changes is not significant.

14 Earnings per share The basic and diluted earnings per share have been calculated using profit attributable to shareholders of the Group/Company as the numerator, i.e. no adjustments to profit were necessary in 2012 or 2013. The weighted average number of outstanding shares used for basic and diluted earnings per share amount to 386 708 069. Basic earnings per share (cents) Diluted earnings per share (cents) 0.12 0.12 0.14 0.14 0.11 0.11 0.12 0.12

Headline earnings per share Headline earnings per share excludes all items of a capital nature and represents an after tax amount. It is calculated by dividing headline earnings by the number of shares in issue during the year: Basic earnings per share (cents) Diluted earnings per share (cents) 5 Property, plant and equipment Carrying amount at beginning of year Additions Disposals Depreciation charge for the year Carrying amount at end of year 6 Investment property Carrying amount at the beginning Additions Carrying amount at the end 0.12 0.12 0.15 0.15 0.11 0.11 0.13 0.13

1 353 943 464 800 (108 044) (389 879) 1 320 820

1 546 363 214 719 (55 138) (352 001) 1 353 943

1 345 648 460 451 (108 042) (382 421) 1 315 636

1 695 413 213 202 (184 128) (378 839) 1 345 648

3 910 000 3 910 000

3 905 691 4 309 3 910 000

15

Audit Opinion The Auditors of the Group, Grant Thornton Camelsa Chartered Accountants (Zimbabwe) have audited the financial statements of the Group for the year ended 30 September 2013. The audit report is unmodified.
PSP DEC13 IND

By Order of the Board MS Gurira Group Company Secretary

At 30 September 2013, investment property comprised: Land and buildings located in Ruwa, Gweru, Bulawayo and Chinhoyi. The property in Ruwa on stand 633 and stand 2016 in district of Goromonzi have been placed as

DIRECTORS: Dr. S.H. Makoni, H.N. Macklin, M.S. Gurira, M.S. Kretzmann, C.C.M. Tambo, N.H. Kretzmer