Annual Report
2013
The name Imara means ‘strong’ in Swahili, the language spoken by
more than 130 million people living and working across Af...
CONTENTS
Vision, Purpose and Core Values
International Footprint And Regional Offices
Divisional Structure
Group Organisat...
VISION, PURPOSE AND CORE VALUES
VISION
“A Successful Africa.”
We are Africans, confident in the future of Africa.
We view ...
CORE VALUES
Integrity
We are honest, ethical and transparent in our dealings with clients, our investors and with
each oth...
3PAGE |
INTERNATIONAL FOOTPRINT AND REGIONAL OFFICES
	 Namibia
	 Windhoek +264 61 25 6666
	 Angola
	 Luanda +244 222 372 0...
4PAGE |
DIVISIONAL STRUCTURE
Imara Group
Asset Management
Imara Asset
Management Limited
* BVI
Imara Asset
Management UK L...
5PAGE |
Group ORGANISATIONAL STRUCTURE
Imara Holdings Limited
Africa
Investments
Limited
Imara Asset
Management
UK Limited...
6PAGE |
C F Africa
Limited
*BVI
Imara
Trademarks
Limited
*BVI
Imara Beresford
International
Limited
Imara Asset
Management...
Mkuze Zululand
A full moon rises over the Mkuze Village in the northern Zululand river region. The Mkuze River itself flow...
9PAGE |
GROUP PROFILE
General Information
Country of incorporation	 Botswana
Principal activities	 Holding Company for a P...
10PAGE |
DIRECTORATE AND GROUP MANAGEMENT
Directorate
Imara Holdings Limited	
SM Ndoro	 Chairman	 Non-executive	 Zimbabwe	...
11PAGE |
CHAIRMAN’S STATEMENT
Overview
Group results for the year ended 30 April 2013 are
in some ways positive but in oth...
Nguni cattle vs wildlife
The sun goes down on the sacred cow both literally
and metaphorically. Although this beast cuts a...
13PAGE |
CHAIRMAN’S STATEMENT
for Africa excluding South Africa. The Zimbabwe
Stock Exchange was particularly robust durin...
Zulu shepard boy
The Zulu Empire had already greatly expanded what was a modest kingdom out through the wildlands and hill...
15PAGE |
CHIEF EXECUTIVE OFFICER’S REVIEW OF OPERATIONS
Group Review
The performance of your Group in the year ended 30
Ap...
16PAGE |
capital raisings and capital markets work in a number of
countries. Work continues on a number of transactions,
w...
17PAGE |
CHIEF EXECUTIVE OFFICER’S REVIEW OF OPERATIONS
the political process and economic performance. While
intheshortte...
Target rhino
Near the top of the illegal wildlife shopping list is
rhino (or more specifically, rhino horn) the brutal
dem...
19PAGE |
CORPORATE GOVERNANCE REPORT
Nature of business
Imara Holdings Limited is a Botswana registered
Company,licencedby...
20PAGE |
information technology, internal control and
compliance systems are in place to protect the
Group’s assets, so as...
21PAGE |
CORPORATE GOVERNANCE REPORT
knowledge necessary to conduct the business of the
Board.
There have been no new appo...
Mkuze Zulu girl and Giraffe
“We must begin thinking like a river if we are to leave a legacy of beauty and life for future...
23PAGE |
CORPORATE GOVERNANCE REPORT
ensuing Board meetings. Senior executives are invited
to attend meetings of the commi...
24PAGE |
The Remuneration Committee is responsible for setting
remuneration policies for the Group. It aims to ensure
that...
25PAGE |
CORPORATE GOVERNANCE REPORT
The regulators and supervisory authorities at subsidiary
Company and fund level are a...
26PAGE |
AR Fleming
GE Johns
JR Legat
ACH Mackeurtan
RH Macleod
SM Ndoro
DE Stone
MJS Tunmer
Total
5 652 103
63 122
2 841 ...
27PAGE |
CORPORATE GOVERNANCE REPORT
Botswana Stock Exchange
The Imara share was listed on the Venture Capital
Market of t...
28PAGE |
Imara is a Group with an authentic African heritage
which owes its success, in part, to the support of
the commun...
School children from the Gumbi tribe, future custodians of the environment
Part of the fresh educational vision of the Wil...
31PAGE |
IMARA’S CORPORATE SOCIAL INVESTMENT INITIATIVE UPDATE
The Imara Trust; converting complexity into
African strengt...
32PAGE |
and the level of destitution makes them susceptible.
When one accepts that the natural environment is an
integral...
33PAGE |
IMARA’S CORPORATE SOCIAL INVESTMENT INITIATIVE UPDATE
of local communities about the importance of
wildlife conse...
34PAGE |
Bear in mind that the services of corporate
photographers are engaged to visually express the
personality and phi...
35PAGE |
GLOSSARY
Term	 Meaning or Definition
Attributable earnings	 the portion of net profit for the year, which is attr...
36PAGE |
Term	 Meaning or Definition
Funds under management	 assets managed by the Group, which are beneficially
	 owned b...
37PAGE |
122 483
10 774
98 097
105 925
8 504
(3 742)
4 762
5 635
137 731
148 976
199 921
(16 253)
3 054
139
4,09
3,78
2,15...
38PAGE |
59 140
58 650
61 220
255
285
210
150,81
273
9,61
9,20
3,00
Passed
3,00
1,18
1,18
2,68
26,54
2,35
(0,28)
59 152
58...
39PAGE |
GRAPHICAL FIVE-YEAR FINANCIAL HIGHLIGHTS AND RATIOS
160,000
140,000
120,000
100,000
80,000
60,000
40,000
0
160,00...
40PAGE |
150,000
120,000
90,000
60,000
30,000
0
150,000
120,000
90,000
60,000
30,000
0
2012 20132009 2010 2011
Shareholder...
Imara Holdings Limited
Consolidated Annual Financial Statements
Financial year ended 30 April 2013
42PAGE |
Report on the ...
Imara Holdings Limited
Consolidated Annual Financial Statements
Financial year ended 30 April 2013
43PAGE |
Revenue
Other ...
Imara Holdings Limited
Consolidated Annual Financial Statements
Financial year ended 30 April 2013
44PAGE |
(Loss)/profit ...
Imara Holdings Limited
Consolidated Annual Financial Statements
Financial year ended 30 April 2013
45PAGE |
Non-current as...
Imara Holdings Limited
Consolidated Annual Financial Statements
Financial year ended 30 April 2013
46PAGE |
Profit before ...
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Imara 2013 annual report

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Imara Holdings Limited annual report for the year ended 30 April 2013

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Imara 2013 annual report

  1. 1. Annual Report 2013
  2. 2. The name Imara means ‘strong’ in Swahili, the language spoken by more than 130 million people living and working across Africa. We chose this name for our Company because it reflects our African roots as well as the stability, persistence and endurance of our approach to wealth management. These qualities are proudly reflected in our Company motto: ‘strong in name, resolute by nature’. As an investment banking Group with a uniquely African heritage, Imara has adopted a remarkable and typically African creature for our emblem. The scarab is small yet highly industrious. Capable of carrying more than 800 times its body weight, it is one of the world’s strongest animals. It also plays an important role in maintaining a healthy and thriving ecosystem by improving soil fertility and forage growth. Like the scarab, Imara accelerates the prosperity of the continent by offering a full range of financial products and solutions for institutional, corporate and high net worth clients investing in Africa.
  3. 3. CONTENTS Vision, Purpose and Core Values International Footprint And Regional Offices Divisional Structure Group Organisational Structure Group Profile Directorate and Group Management Chairman’s Statement Chief Executive Officer’s Review of Operations Corporate Governance Report Imara’s Corporate Social Investment Initiative Update Glossary Five-Year Financial Highlights and Ratios Graphical Five-Year Financial Highlights and Ratios Independent Auditor’s Report Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes In Equity Notes to the Consolidated Financial Statements Shareholder Information Notice of Annual General Meeting Form of Proxy 1 3 4 5 9 10 11 15 19 31 35 37 39 42 43 45 46 47 51 113 115 118
  4. 4. VISION, PURPOSE AND CORE VALUES VISION “A Successful Africa.” We are Africans, confident in the future of Africa. We view Africa as the continent of opportunity and are passionate about its potential. We believe that Africa’s influence will grow as its economies continue to develop. We understand African markets and know how to harness their unique investment opportunities. PURPOSE “To Accelerate the Prosperity of Africa.” We believe the key to unlocking Africa’s success is through economic growth and prosperity. As a leading investment banking Group, we facilitate growth by offering a full range of financial products and solutions for institutional, corporate and high net worth clients investing in Africa.
  5. 5. CORE VALUES Integrity We are honest, ethical and transparent in our dealings with clients, our investors and with each other. We demonstrate genuine structural integrity being unified in operation, sound in construction and robust in our management of risk and compliance. Knowledge With over 50 years of operation in Africa, we are equipped with an unrivalled reserve of expertise and experience. Weusethiswealthofunderstandingtoadviseandinvestmoreastutelythanourcompetitors. We make sure our clients benefit from our in-depth research. We are uniquely qualified to develop African solutions for Africa. Discipline Discipline governs the processes through which we control and conduct business; it transforms our knowledge and competence into results. We focus our efforts through efficient and reliable systems. We promote a culture of ownership and accountability. Enterprise We believe enterprise is the combination of initiative and resourcefulness that fuels economic development. We encourage African entrepreneurship to create prosperity in Africa. We develop dynamic and innovative investment solutions. Resoluteness We believe resoluteness is the quality of being purposeful, determined and unwavering. To be resolute is to be focused and committed, both attributes to which we aspire. Our own strong character helps us to fulfil our purpose and concentrate on achieving our goals.
  6. 6. 3PAGE | INTERNATIONAL FOOTPRINT AND REGIONAL OFFICES Namibia Windhoek +264 61 25 6666 Angola Luanda +244 222 372 029 Nigeria Lagos +234 1 461 0691 Kenya Nairobi +254 2034 2756 South Africa Johannesburg +27 11 550 6100 Mauritius Mauritius +230 464 9799 Zambia Lusaka +260 211 232 456 Botswana Gaborone +267 318 8710 Scotland Edinburgh +44 131 550 3737 Malawi Blantyre +265 1 822 803 Zimbabwe Harare +263 4 790 090 SOUTH AFRICA ANGOLA NAMIBIA BOTSWANA ZAMBIA MALAWI KENYA NIGERIA OFFICES (including Associates, Partners and Representatives) SCOTLAND ZIMBABWE MAURITIUS
  7. 7. 4PAGE | DIVISIONAL STRUCTURE Imara Group Asset Management Imara Asset Management Limited * BVI Imara Asset Management UK Limited *United Kingdom Imara Asset Management (Mauritius) Limited *Mauritius Imara Asset Management South Africa (Pty) Ltd *South Africa Imara Asset Management (Pty) Limited (Dormant) *Botswana Imara Corporate Finance South Africa (Pty) Ltd *South Africa Imara Botswana Limited *Botswana Imara S P Reid (Pty) Ltd *South Africa Imara Africa Securities (Pty) Limited *Botswana Imara Capital Securities (Pty) Ltd *Botswana Imara Securities Angola SVM Limitada (Dormant) *Angola Stockbrokers Malawi Limited *Malawi Africa Investments Limited *BVI Imara Holdings Limited * Botswana Imara Capital South Africa (Pty) Ltd *South Africa Imara Capital Limited (Dormant) *Botswana C F Africa Limited *BVI Imara Trademarks Limited *BVI Imara Capital Limited *BVI Imara Capital Kenya Limited (Dormant) *Kenya Imara Capital Limited Zambia *Zambia Imara Capital Botswana (Pty) Ltd *Botswana Corporate Finance Stockbroking Trust Administration Imara Asset Management (Pvt) Limited *Zimbabwe Imara Corporate Finance (Pvt) Limited *Zimbabwe Associate Imara Beresford International Limited *Mauritius Imara Edwards Securities (Pvt) Limited *Zimbabwe Stockbrokers Zambia Limited *Zambia Associate Africa Private Equity Fund Managers (Pty) Ltd *Botswana Imara Capital Zimbabwe (Pvt) Limited *Zimbabwe Legend Active Trading Company Investment Holding or Group Parent Company Dormant or Non Trading Company *Country of Registration
  8. 8. 5PAGE | Group ORGANISATIONAL STRUCTURE Imara Holdings Limited Africa Investments Limited Imara Asset Management UK Limited Imara Asset Management Limited *BVI Imara Corporate Finance South Africa (Pty) Ltd Imara Capital South Africa (Pty) Ltd Imara South Africa Trust Imara SP Reid (Pty) Ltd (Stockbroking) Imara Asset Management South Africa (Pty) Ltd Imara Capital Limited *BVI Stockbrokers Malawi Limited Imara Capital Botswana (Pty) Ltd Imara Africa Securities (Pty) Limited (Dormant) Imara Botswana Limited Imara Capital Limited (Dormant) Imara Asset Management (Pty) Limited (Dormant) Management Contracts Imara African Opportunities Fund Imara Global Fund Imara Africa Series Fund Imara Capital Securities (Pty) Limited Africa Private Equity Fund Managers (Pty) Ltd 93.75% 100% 100% 100% 100% 100% 100% 100% 100% 100% 50.10% 50% 25% Sub Funds: • Zimbabwe Fund • Nigeria Fund • East Africa Fund • African Resources Fund 100% 6.25% Group holding company, incorporated in Botswana and a registered International Financial Services Company (Offshore Investment Status)
  9. 9. 6PAGE | C F Africa Limited *BVI Imara Trademarks Limited *BVI Imara Beresford International Limited Imara Asset Management Mauritius (Pty) Limited Imara Capital Limited Zambia Non Trading Companies Imara Capital Zimbabwe (Pvt) Limited Beresford Trust and Corporate Services Imara Asset Management (Pvt) Limited Imara Edwards Securities (Pvt) Limited Beresford One Limited Imara Nominees Limited Beresford Two Limited Imara Corporate Finance Zimbabwe (Pvt) Limited Imara Trust Company (Mauritius) Limited Stockbrokers Zambia Limited Imara Capital Kenya Limited Imara Securities Angola SVM Limitada Imara Two Limited Imara Directors Limited 100% 100% 100%51% 50% 46,35% 100% 100% 100% 100% 25% Legend Botswana South Africa British Virgin Islands Zimbabwe Malawi Kenya Angola United Kingdom Zambia Mauritius 100% 50%
  10. 10. Mkuze Zululand A full moon rises over the Mkuze Village in the northern Zululand river region. The Mkuze River itself flows along the southern border of the community owned game reserve. This reserve, called Somkhanda, comprises 16,000 hectares of forest, grasslands and savannah. Under the full force of the ethereal lunar light, game rangers and anti-poaching units are on high alert – the full moon is also known as a poacher’s moon. The threat of extinction to endangered game is but one issue affecting regions like Somkhanda. Groups like the Wildlife ACT Fund have helped identify aspects of the human ecology that need attention. When rapidly expanding tribal communities, such as the Gumbi, are prevented from accessing protected areas they cannot be expected (with inadequate conservation education) to sustainably address issues such as food security. As a result, they tend to look towards protected resources as a means of survival, and the demand for bush meat escalates. Poachers cross into local game reserves and hunt any animal that their dogs can catch.
  11. 11. 9PAGE | GROUP PROFILE General Information Country of incorporation Botswana Principal activities Holding Company for a Pan-African Financial Services Group Company registration number CO - 2002/3377 Tax registration number CO - 65018-0101-9 Registered office Union Provident Trust First Floor, Times Square Plot 134, Independance Avenue, Gaborone, Botswana P.O. Box 46699, Village, Gaborone Registration status: Registered in the Botswana International Financial Services Centre (IFSC) Tax Certificate Number 22 - Effective date 28 July 2003 Independent auditors Ernst & Young (EY) Bankers Barclays Bank of Botswana Barclays Bank of Mauritius First National Bank Limited (Botswana) First National Bank Limited (South Africa) Standard Bank Limited (Mauritius) Botswana Stock Exchange code IMARA Reuters code IMRA.BT Transfer secretaries Corpserve Botswana Unit 206, Second Floor, Plot 64516, Showgrounds Close, Fairgrounds, Gaborone Telephone: +267 393 2244, Facsimile: +267 393 2243 email: contactus@corpservebotswana.co.bw Business addresses & contact details Botswana: Unit 6, Second Floor, Morojwa Mews, Plot 74770, Western Commercial Road, New Central Business District, Gaborone. Telephone: +267 3188 710, Facsimile: +267 3191 767 Website: www.imara.com South Africa Imara House, Block 3 257 Oxford Road, Illovo 2116, Johannesburg Telephone: +27 11 550 6100, Facsimile: +27 11 550 6110
  12. 12. 10PAGE | DIRECTORATE AND GROUP MANAGEMENT Directorate Imara Holdings Limited SM Ndoro Chairman Non-executive Zimbabwe MJS Tunmer Chief Executive Executive Zimbabwe AR Fleming Non-executive British GE Johns Non-executive Botswana JR Legat Executive British ACH Mackeurtan Executive South Africa RH Macleod Executive South Africa TJ Matsau Non-executive South Africa GZ Steffens Lead Independent director Non-executive German DE Stone Executive South Africa Company Secretary DE Stone Botswana Stock Exchange Compliance Officer: DE Stone Audit Committee GZ Steffens Chairman Non-executive GE Johns Non-executive TJ Matsau Non-executive SM Ndoro By invitation Non-executive DE Stone By invitation Executive Remuneration Committee GE Johns Chairman Non -executive TJ Matsau Non-executive SM Ndoro Non-executive MJS Tunmer By invitation Executive ACH Mackeurtan By Invitation Executive Nominations Committee SM Ndoro Chairman Non-executive GE Johns Non-executive ACH Mackeurtan Executive MJS Tunmer Social & Ethics Committee (South Africa) TJ Matsau Chairman Non-executive B Jena Executive R Macleod Executive L Warburton Executive MJS Tunmer By invitation Executive DE Stone By invitation Executive Management MJS Tunmer Chief Executive Officer DE Stone Chief Financial Officer JR Legat Head: Asset Management RH Macleod Head: Corporate Finance MJS Tunmer Head: Stockbroking P Prayag Head: Trust Administration & Custodial Services
  13. 13. 11PAGE | CHAIRMAN’S STATEMENT Overview Group results for the year ended 30 April 2013 are in some ways positive but in other ways negative; positive in that the Group reported a profit before tax for the year of P3.48 million; that the earnings performance in the second half of the year was strong with profit before tax of P7.66 million and positive in that total assets for the Group increased by more than 26%. Negative because of a seemingly abnormally high tax charge and the resultant loss for the year, and more significantly, that the earnings performance continues to be below expectations. For the half year to 31 October 2012, the Group reported a loss after tax of P5.12 million and a total comprehensive loss of P7.63 million. Albeit that the Group`s earnings performance tends to be stronger in the second half of the year, up until late in the financial year, indications were that a loss higher than what was finally achieved, would be reported. The better than expected pre-tax performance was mainly due to the outstanding performance of the asset management division in the final quarter of the year where funds under management increased significantly and performance fees were earned on certain of the Imara Funds. Impairment charges against receivables and the carrying cost of investments in associate companies added almost P3.8 million to total expenses for the year, and costs relating to the on-going NBS arbitration process a further P2.5 million. Group Financial Review ImaraBeresfordInternationalLimited,theMauritius based Company engaged in trust, administration and custodial business became a subsidiary Company on 31 October 2012. This followed the acquisition of an additional 10.99% equity stake which increased the Group’s equity holding to 51%. This Company has contributed positively to Group earnings both as an associate Company, prior to October 2012, and subsequently as a subsidiary Company. The financial results for Imara Capital Zimbabwe (Private) Limited, which became a subsidiary Company on 30 November 2011 in the previous financial year, are included for a full year in April 2013 as opposed to the seven months in the previous financial period. This entity has also reported significantly improved earnings for the year on the back of sound performances by its asset management and securities trading businesses. The inclusion of these entities as subsidiary companies distorts to some degree the comparative financial information and detracts from a direct year on year comparison. Associate companies contributed P1.09 million to Group earnings for the year but impairment charges of P1.29 million in respect of the Malawian and Zambian entities, resulted in a net loss from associate companies of some P200 000. All divisions, with the exception of the corporate finance division, were profitable for the year. Asset management continues to be the principle contributor to Group earnings and cash flow and its results for the year have been boosted by a P3.2 million gain on available-for-sale-financial assets. Results for the stockbroking division, although up on the previous year, are somewhat disappointing as brokerage rates across the region continue to be under pressure. The establishment of the Africa Trading Desk in Johannesburg has diversified the division`s earnings stream allowing it to gain new ground in the institutional investor base as well as more recently, entry into the retail stockbroking sector
  14. 14. Nguni cattle vs wildlife The sun goes down on the sacred cow both literally and metaphorically. Although this beast cuts a lonely, albeit beautiful, figure he is in abundant Company. In the Somkhanda region, the cattle and wildlife are in constant conflict over space and grazing. The demand for food and wealth for a growing human population causes a corresponding increase in the number of cattle. Overgrazing in the tribal lands adjoined to the reserves means an ever-diminishing availability of lush grassland. As tracts of the land become untenable as sustenance for the cattle, barren landscapes become a feature of the area, and herdsman start to eye the verdant herb on the other side of the fence. On the reserves, techniques are employed by strict game management that ensure against over grazing.
  15. 15. 13PAGE | CHAIRMAN’S STATEMENT for Africa excluding South Africa. The Zimbabwe Stock Exchange was particularly robust during the period from 1 January 2013 to 30 April 2013 and the all share index reflected an increase of 24.45% during this period. The securities trading business in Zimbabwe was a benefactor of this performance and reported particularly good results for the past year. The tax charge for the year of P4.98 million, (equivalent to an effective rate of 143.4%) appears abnormally high in relation to profitability and continues to reflect the abnormalities of the Group structure, tax legislation affecting the Group across different jurisdictions and the requirement for asset management and stockbroking entities, in particular, to be stand-alone and ring fenced entities for regulatory purposes. On a Group wide basis this inhibits the ability to offset taxable profits in one entity against losses in another. Of the current year tax charge, almost P2.0 million relates to deferred tax reversals from previous years. Outlook The Board continues to hold the view that African capital markets remain attractive to investors, offering upside potential for the Group. Group performance in the second half of the financial year adds credence to this view. World markets however remain volatile with the potential to impact negatively on future results. Zimbabwe represents an important business centre for the Imara Group. Since the publication of the Announcement of Audited Results on 26 July 2013, President RG Mugabe has been re-elected as President of Zimbabwe for a further 5 years with and increased parliamentary majority for his ZANU PF party. It is still too early to assess what impact future economic and investment policies inZimbabwe may have on the Imara Group. Short term fluctuations do not overly concern the Board which continues to see positive opportunities for Imara’s business in Zimbabwe over the medium to long term. SM Ndoro 3rd September, 2013
  16. 16. Zulu shepard boy The Zulu Empire had already greatly expanded what was a modest kingdom out through the wildlands and hilly savannas of sub-tropical Southern Africa before fierce contact with, and eventual succession to colonising Europe. Today, a repatriated KwaZulu-Natal stretches its provincial Eastern flank along a fluid border of deliciously warm Indian Ocean waters, from Port Edward to Mozambique. 21st century ‘Zululand’s’ interior is one of verdant ecological diversity and abounds with wildlife reserves. Some of the reclaimed tribal lands that abut these reserves present environmental sustainability and empowerment challenges. Whereas historically Zululand has been the scene of many consecrated battles, both internecine and international, these days the main threat is to the environment. Due to population increases and unsustainable subsistence practices, the topographical carrying capacity of the regions around the reserves is being stretched to the limit. When tribal communities join forces with initiatives that promote awareness and strategic implementation of modern conservation techniques, the future for children in tribes like the Gumbi looks brighter.
  17. 17. 15PAGE | CHIEF EXECUTIVE OFFICER’S REVIEW OF OPERATIONS Group Review The performance of your Group in the year ended 30 April 2013 was generally disappointing despite some highlights. Market conditions remained difficult although there was an increase in liquidity, while most markets registeredpositivegains.TheperformanceoftheAfrican markets excluding South Africa, was better with eleven closing the year under review in positive territory in US$ terms. Of the larger markets Nigeria was up 49%, Kenya 34% and Zimbabwe 47% while Egypt was down 8% and Morocco 12%. As usual the Group performed better in the second half against a continuing slowdown in China and the Eurozone problems although on the positive side there are signs of a turnaround in the USA. All divisions besides corporate finance delivered profits. The performance of the associates was mixed with Malawi returning a profit and Zambia a loss. Imara Beresford, which was accounted for as an associate until 31 October 2012, contributed P660,000 to the share of associate profits, before it became a subsidiary. The overall contribution from associates was negative by some P200,000 due to impairments. Zimbabwe, which was accounted for as a subsidiary for the full year, for the first time, made a positive contribution. Group profit before tax was P3.48 million but an abnormally high tax charge reduced this to a loss of P1.5 million after tax. Revenue grew by 19% and total expenditure by 32%. Costs were distorted by the inclusion of Zimbabwe as a subsidiary for the full year and Imara Beresford for six months. Cash flow was negative with a net outflow of P14.69 million during the year, although the trend was more positive in the second half. The Group’s “free” cash position remains strong with no debt held by the Group. The Asset Management division remained the star performer. Funds under management of P4.3 billion registered significant growth of 39.5% in Pula terms and 22% in US Dollar terms. This was driven by the strong performance of African markets, which was mirrored in the offshore funds triggering unbudgeted but significant performance fees. In South Africa, continued excellent performance for client portfolios best illustrated by the Imara Equity Fund, attracted new clients both private but importantlyinstitutional.ForeignflowsintotheZimbabwe stock market enabled funds under management there to rise by 49% in US dollar terms. The strong performance of the Funds resulted in performance fees being earned on the Africa Fund, the Nigeria, Zimbabwe and East Africa Funds as well as the Russell Fund. Following on from the Russell mandate to manage the African portion of their Global Emerging and Frontier Market Fund, Imara was appointed in January 2013 to manage a similar product for Danske Capital, a Scandanavian asset manager. This went some way to offsetting the loss of funds due to redemptions and the closing of the Imara Flame Lily Fund. The Mauritian joint venture, Imara Asset Management (Mauritius) Limited, although loss making, performed above expectation and it is hoped this positive trend will continue. Efforts are underway to shortly open a similar joint venture in another African country where strong upside is anticipated. Corporate Finance had a difficult year returning to a loss making position. Although fees were earned on transactions worked on in Angola, Botswana, Mozambique, Zambia, Zimbabwe and South Africa, performance was negatively impacted by impairment charges against receivables and legal costs relating to the on-going NBS Arbitration process. Zimbabwe registeredalossinanilliquidmarketdespitesuccessfully completing two mandates. Of the current mandates two would have successfully closed but for (differing) regulatory impediments. Successful completion of these mandates would have resulted in a profit for the year. Work continues on a significant mandate in Angola, which is now anticipated to be completed in the 2013/2014 financial year. During the year an empowerment joint venture, Imara Mondise, was set up in South Africa and it is anticipated that this should be well placed to attract work in not only South Africa but also Lesotho, Namibia and Swaziland. The division has a strong pipeline including privatizations, M & A,
  18. 18. 16PAGE | capital raisings and capital markets work in a number of countries. Work continues on a number of transactions, which if successful will provide long term secure annuity income, which will help to smooth earnings going forward. In Zimbabwe the micro finance business, ZIADA, continues to produce encouraging results. Stockbroking had a mixed year returning profits of P2.1 million against P4.7 million last year. Margins continue to come under pressure in most of the markets we operate in and in particular Botswana, South Africa and Zambia. Imara SP Reid returned profits of P3.2 million, which was down on the previous year. Average monthly brokerage was 14% lower in addition to a marginal decline in the average number of trades per month. The number of active clients grew strongly to in excess of 13,000. The derivatives desk also experienced a difficult year delivering a lower contribution to revenue, while proprietary trading was also down. On the positive side Imara Africa Securities registered its first profit well ahead of expectations. Although some of this improved performance can be attributed to markets it was also due to a greater number of clients being serviced in a more coherent structured manner. With all systems in place and tried and tested, the service was launched to the retail market in South Africa post year end and it is expected that this will also yield positive returns. A further benefit is that the service has begun to open up the domestic SA institutional market for Imara SP Reid. It is important that this momentum is maintained and as such it is anticipated that further investment will be made into the sales and research team. Turning to our associates, Stockbrokers Malawi had much improved trading results for their year ended 31 December 2012 and this trend has continued in the first half of 2013. The impact of these improved results was however negated to some extent by a significant devaluation of the Malawi Kwacha with fell in value against the Botswana Pula from 22:1 at 30 April 2012 to 52:1 at 30 April 2013. Stockbrokers Zambia recorded a loss for the year. This, together with a rebasing of the Zambian Kwacha, by a factor of 1 000, which took place on 1 January 2013 lead to a decision to impair the carrying cost of this investment by P904 000. Imara Edwards Securities in Zimbabwe had a mixed year with a weak first half followed by a very strong second half. This was largely due to the re-ignition of the Zimbabwe Stock Exchange in October 2012 resulting in a strong finish to the year with total commissions earned of $1.9 m, which was 14% ahead of the prior year. Most encouraging was the performance relative to the rest of the market, with a trade weighted market share over the 12 months of 41%. In Angola, progress towards the establishment of the stock market remained slow. The process to complete the licensing of Imara Securities Angola is underway and it is anticipated this will be completed this year. Despite mixed signals from the authorities it is still expected that the launch of the Bolsa de Valores e Mobiliarios de Angola (BVDA), (Angola Stock Exchange), will take place initially to trade fixed income instruments followed by equities in due course. In the meantime the concentration on Corporate Finance work has shown positive results. The performance of Imara Capital Zimbabwe was largely a reflection of the Zimbabwe Stock Exchange which was a tale of two halves. The market was subdued and flat lining for the first half from April to September 2012 while renewed foreign interest saw a complete turnaround in thesecondhalf.Themarketrose26%overthesixmonths from September 2012 to March 2013, representing a gain of 34% over the financial year. This pushed broking into a strong bottom line performance and asset management into record Funds under Management. Corporate Advisory had a difficult year driven primarily by a lack of liquidity and difficult regulatory approval processes. Against this background profits were well ahead of the previous year. The outlook in Zimbabwe continues to be dominated by
  19. 19. 17PAGE | CHIEF EXECUTIVE OFFICER’S REVIEW OF OPERATIONS the political process and economic performance. While intheshorttermthepoliticswillremainnoisy,itispleasing that a peaceful election has taken place. Although at present things appear uncertain business looks forward to the reintegration of the country with the international community. This should improve confidence leading to better liquidity in the local markets. Substantial FDI will hopefully follow. Imara Beresford International Limited (IBI) in Mauritius, was consolidated for the first time effective 31 October 2012, following the increase in Imara`s shareholding to 51%. The Company had a strong year with profits well ahead of the previous year. This was largely due to better than expected revenues from establishment, management and secretarial fees. Going forward significant effort is being made in marketing the Company’s services. In this respect two African based senior marketing executives have joined the Company and it is expected that their efforts will soon yield positive results. We continue to explore opportunities to increase our coverage in East and West Africa. The relationship with Chapel Hill Denham in Nigeria and Sterling Capital in Kenya continues to produce positive results. The Asset Management relationship with ICEA Asset Management, who is the co-manager of the Imara East Africa Fund, is still working positively. AdecisionwastakenbyyourBoardtonotimplementthe South African empowerment transaction with Vuvuzela Investments 1 (Pty) Limited, which was approved by shareholders last year. This was deemed prudent due to changes in the Empowerment Codes as well as the tax efficiency of the proposed structure. In this light efforts continue to achieve a satisfactory solution. The Imara South Africa Trust, which owns 6.25% of Imara Capital SouthAfrica(Pty)Limited,continuestosupporttheImara Lightwarriors project, which will terminate at the end of this calendar year. A new initiative targeted at assisting specific education in South Africa as well as the region is under review. It is expected that this will be launched in 2014. The Trustees continue to work alongside the Social and Ethics Committee to evaluate options to ensure that the Trust`s resources are deployed appropriately as part of the Group`s corporate social responsibility. The appointment of a Group Marketing Executive has yielded positive results. This has resulted in an improved awareness of the Brand generally through a structured advertising/marketing campaign using both the print and the electronic media. Social media inclusive of Facebook, LinkedIn and Twitter all now form part of the Group`s interface with the market. A complete revamp of the Group`s website is also nearing completion. Imara Holdings remains listed on the Venture Capital Market of the Botswana Stock Exchange and it is still intended to apply to move to the Main Board once the minimum requirement of 300 “Public” shareholders is achieved. Outlook In the current year to date your Group is trading at a breakeven position, despite a difficult operating environment. Once again it is anticipated that the continued growth in interest in Africa will contribute to greater inflows, which should in turn return your Group to profit in the year ahead. I would like to thank my Chairman, Mike Ndoro, and the Board for their continued support and guidance. I must also recognise the contribution made by the entire Imara team. Their dedication and hard work continues to position Imara for growth in the future. MJS TUNMER CHIEF EXECUTIVE OFFICER 3 September 2013
  20. 20. Target rhino Near the top of the illegal wildlife shopping list is rhino (or more specifically, rhino horn) the brutal demand for which is driven by the market in South East Asia and enabled by local poaching networks. Merely providing the co-ordinates of a rhino to poachers is an extremely lucrative inducement for the greedy, or cash-strapped hunter. The population of the Black Rhino hit an all time low of 2,140 in 1995, and it is estimated that its numbers have declined by 97.7% since 1960. Although one can take heart in the knowledge that their numbers have roughly doubled over the last 18 years, (thanks to strategic capture; transportation; re-introduction; tracking and monitoring) these pre-historic beauties are still considered to be critically endangered. The Wildlife ACT Fund alone has been involved in the reintroduction of 60 Black Rhino in the past 2 years. Part of their armoury is cutting edge transmitter technology, the movement sensors of which, when fitted to a rhino’s horn, relay instant information about the distressed animal’s whereabouts. This can enable the perpetrator to be caught red-handed.
  21. 21. 19PAGE | CORPORATE GOVERNANCE REPORT Nature of business Imara Holdings Limited is a Botswana registered Company,licencedbytheInternationalFinancialServices Centre (IFSC), under Tax Certificate Number 22, and is the holding Company for a Group of companies conducting the following types of business, primarily for institutional and private clients: - Asset management; - Corporate finance; - Stockbroking; - Trust administration and custodial services. There has been no significant change to the nature of business from previous years. Corporate governance principles The Group is committed to the principles set out in the King Report on Governance 2009 (King III). The Board is satisfiedthattheGroupisworkingtowardsfullcompliance with the principles set out in King III and with progress in this regard. Explanations have been provided where the Group is yet to comply with certain key principles. The Imara Holdings Limited Board (the Board) is the highest decision making body in the Group and is ultimately responsible for corporate governance. The Board acknowledges the relationship between strategy, risk, performance and sustainability. The Board of Imara Holdings Limited remains committed in its stewardship of the Group’s affairs, to applying the highest standards of corporate governance and international best practice. Ethics and organisational integrity The Board provides effective leadership based on an ethicalfoundationanddirectsthestrategyandoperations to build sustainable businesses. Professional and ethical conduct and the highest standardsofintegrityareanintegralpartofhowtheGroup conducts its business affairs. The Group recognises that investor and stakeholder perceptions are based on the manner in which the Group, its directors, management and employees conduct business. The Group, therefore, strives to achieve the highest standards of integrity, transparency and business ethics at all times. The Board’s deliberations take into account the values underpinning good corporate governance, namely: - responsibility; - accountability; - fairness; and - transparency and also the Group’s core values namely: - integrity; - knowledge; - discipline; - enterprise; and - resoluteness; The Group formulated and implemented a Code of Ethics during the year. This document codifies the ethical principles which the Group subscribes to and applies. The Code of Ethics assists the Board in ensuring that business ethics across the entire Group are managed effectively and consistently. The Social and Ethics Committee, established in 2012 to comply with South Africa statute, continues to meet on a regular basis and reports to the Imara Capital South Africa and Imara Holdings Limited Boards. Its terms of reference are reviewed annually and are approved by these Boards. Board Charter The Board Charter outlines the role of the Board and its responsibilities. Key responsibilities of the Board include: i. the setting of the strategic direction of the Group and monitoring management’s implementation of that strategy; ii. ensuring an effective corporate governance structure; iii. ensuring that effective audit, risk management,
  22. 22. 20PAGE | information technology, internal control and compliance systems are in place to protect the Group’s assets, so as to minimize the possibility of operating beyond legal requirements or acceptable risk parameters; iv. monitoring of operational performance; v. ensuring that succession planning is in place; and vi. the integrity and quality of communications with stakeholders, regulators, shareholders and employees. Composition and functions of the Board The Group is governed by a unitary Board of directors. In terms of the Company’s Constitution, the Board may not comprise fewer than four or more than twenty directors, at least one of whom shall be ordinarily resident in Botswana. The Board of directors is chaired by Michael Ndoro a non-executive director and comprises ten directors, five of whom are non-executive. Gunter Steffens is the lead independent director. The majority of non-executive directors are independent. Details of the composition of the Board are detailed on page 10 of this Annual Report. In terms of the Company’s Constitution, directors are appointed for three years. At least one third of the directors, (rounded down), retire by rotation annually and if available, can offer themselves for re-election at the Company’s Annual General Meeting. Non-executive directors are not required to hold shares in the Company but certain directors have independently elected to do so. Remuneration levels of non-executive directors are reviewed annually and benchmarked against the Botswana financial services sector companies and proxy financial services Groups with a regional presence. The roles of the Chairman and the Group Chief Executive Officer are separate with clear divisions of their responsibilities to ensure a balance of power and authority between them. The Board delegates responsibility for implementing the strategic direction and managing the day-to-day operations of the Group to the Group Chief Executive Officer. The Chief Executive Officer consults with the Chairman,inthefirstplace,onmatterswhicharesensitive, extraordinary or of a strategic nature. The Board composition is balanced so that no individual BoardmemberorsmallGroupofmembershasunfettered control over decision making. Independent non-executive directors The Board evaluates the independence of non- executive directors annually. Independence is determined according to the King Code of Governance recommended practice, which requires rigorous reviews of directors’ independence and performance annually and particularly so after they have served on the Board forovernineyears.TheBoard,followingitsevaluations,is of the view that all independent non-executive directors are indeed independent. Declaration of directors’ interests Directors of the Board and subsidiary Boards are required to make annual declarations of their interests and a register of directors’ interests is maintained by the Company Secretary. Directors and management are also required to disclose any material interests in contracts and business transactions relating to the Group and to recuse themselves from any discussions relating thereto. The Board manages all conflicts of interest when they arise. The management of conflicts of interest at subsidiary Company level is delegated to the respective Boards within set parameters. Board appointments The selection and appointment of directors is a formal and transparent process, involving the Board as a whole andassistedbytheNominationsCommittee.Inappointing directors, emphasis is placed on achieving a balance of skills, experience, professionalism and industry
  23. 23. 21PAGE | CORPORATE GOVERNANCE REPORT knowledge necessary to conduct the business of the Board. There have been no new appointments to or resignations from the Board of Directors during the past year, except for those directors who retired by rotation, as required bytheCompany’sConstitution,andwhowerere-elected at the Annual General Meeting. Company Secretary The Company Secretary is appointed by the Board of Directors. All directors have direct access to the Company Secretary and to information regarding the Group’s affairs. David Stone serves on the Board as an executive director and is also the Company Secretary. Consequently, the Company has not complied with the King III Code recommendation that the Company Secretary should not be a director of the Company. The Board is, however, of the view that the incumbent is able to execute both roles effectively and independently and the status quo will be reviewed and re-assessed from time to time. Board meetings The Board meets at least four times a year to review the Group’s financial performance, strategic direction and key policies. It approves budgets and reviews the overall effectiveness of the internal control, risk management and statutory and regulatory compliance systems. It also monitors the implementation of strategy and policy through structured reporting mechanisms and consequent accountability by executive management. Access to information and resources Directors have unrestricted access to executive management, the Company Secretary and Group information. They are also entitled to make use of independent professional advisors, at the Group’s expense, when necessary to discharge specific responsibilities. External auditors attend the Group and subsidiary audit committees by invitation. Non- executive members of the Audit and Risk Committee meet with the external auditors at least once a year without executive management present. Board effectiveness and evaluation The Chairman of the Board requires all directors to complete annual questionnaires to evaluate the effectiveness of the Board as a whole and also of its members. This process is used to ensure that the responsibilities detailed in the Board Charter are discharged effectively in accordance with best practice. The results of the evaluation are collated by the Chairman and discussed with the Board with the purpose of identifying training needs for directors. The evaluation process includes a review of the performance of individual directors, including the Chairman. The most recent evaluation exercise indicated that the directors’ were satisfied with the overall effectiveness of the Board and that of its members. The Chairman has also instituted a training program for all main Board directors, whereby directors are required to attend specific training course, through the South African Institute of Directors annually. Board Committees The Board is assisted in the discharge of its duties and responsibilities by a number of Board committees, which comprise the: - Audit and Risk Committee, - Executive Committee; - Nominations Committee; and - Remuneration Committee; These Committees are accountable to the Board. All of theCommitteesarechairedbynon-executivedirectors, with the exception of the Executive Committee which is chaired by the Group Chief Executive Officer. Board Committees, in the main, make recommendations to the main Board for its approval or final decision. Terms of reference of the Committees have been approved by the main Board and are reviewed annually. Minutes of Committee meetings are circulated and reported on at
  24. 24. Mkuze Zulu girl and Giraffe “We must begin thinking like a river if we are to leave a legacy of beauty and life for future generations”, advised the prominent conservationist David Brower. What was meant by this injunction? Consider the impact of a river on the habitat through which it meanders, and it becomes clear that the Mkuze River is not merely a curving trajectory of water. It is a riparian organism, whose dissipating energy animates the terrestrial body around its banks. A river gives birth to an entire habitat-complex of vegetation, root systems, and wildlife. The great biodiversity that typifies riparian zones like the Somkhanda naturally engenders a linkage of diverse animal communities across long stretches of the adjoining land. In other words, a river facilitates the conditions for its own wildlife corridor. Similarly, when humans work in concert with the environment using the best conservational knowledge at their disposal, the effect on the land is vitally generative. This knowledge must be available, for example, to optimally manage giraffes within the confined spaces of Nature Reserves, otherwise the browsing habits of these ungulates has a thinning effect on acacia tree density.
  25. 25. 23PAGE | CORPORATE GOVERNANCE REPORT ensuing Board meetings. Senior executives are invited to attend meetings of the committees by invitation, where considered appropriate. Audit and Risk Committee The Audit and Risk Committee is chaired by Gunter Steffens, the lead independent non-executive director and comprises three members, all of whom are non- executive directors. Details of the composition of the Committee is detailed on page 10 of this Annual Report. The Group Chief Financial Officer and the Chairman of the Board attend meetings of the Committee by invitation. The main responsibility of the Committee is to assist the Board in discharging its responsibilities under the Companies Act for ensuring compliance with regulations imposed by regulators and supervisory authorities and for assessing, managing and monitoring risk. The Committee has formal terms of reference which have been approved by the Board and set out its responsibilities. The Audit and Risk Committee is responsible for recommending the appointment of the external auditors and overseeing the external audit process. It also monitors the effectiveness of: - financial controls; - reporting; - compliance with International Financial Reporting Standards (IFRS); - the system of internal control; and - statutory and regulatory compliance at both Group and subsidiary Company level. - Risk Management The Committee also assesses the independence of the external auditors. Audit and Risk Committee meetings are held at least three timesayearandareattendedbytheindependentexternal auditors, who have unrestricted access to the Chairman of the Committee. Meetings are also attended by internal auditors, compliance officers and senior management, on an as required basis. The Committee meets with the external auditors at least once a year, without executive management present. The Audit and Risk Committee has: - satisfied its responsibilities for the year, in compliance with its terms of reference; - satisfied itself regarding the effectiveness of internal financial controls; - satisfied itself regarding the independence of the external auditors; and - has recommended the approval of the consolidated and Company annual financial statements, incorporating accounting policies, to the Board. Executive Committee The Executive Committee is chaired by the Group Chief Executive Officer and comprises the senior executives of the Group. The Committee meets monthly and is responsible for managing the business of the Group when the Board is not in session, subject to statutory and any other limitations on the delegation of authority determined by the Board from time to time. It also acts as a medium of communication and co-ordination between business units, Group companies, and the Board. - The Executive Committee is also responsible for the implementation of structures, processes and mechanisms relating to information technology governance. The Committee monitors information technology governance practices and ensures that they are aligned with the Group’s performance and sustainability objectives - The Committee has formal terms of reference, which set out its responsibilities. Remuneration Committee The Remuneration Committee is chaired by Gary Johns, a non-executive director and comprises three members all of whom are non-executive directors. Details of the composition of the Committee are detailed on page 10 The Chief Executive Officer and one other executive director attend meetings of the Committee by invitation.
  26. 26. 24PAGE | The Remuneration Committee is responsible for setting remuneration policies for the Group. It aims to ensure that the financial rewards offered to employees are sufficient to attract people of the calibre required to effectively implement strategy, and manage the Group’s affairs in order to produce the required returns for shareholders. It also seeks to ensure that directors and executives are fairly rewarded for their respective contributions to the Group. The Committee performs annual reviews of the Employee Share Option Scheme, theallocationofshareoptions,theprofitsharingscheme and the apportionment of profit share to executives and employees. The Committee has formal terms of reference which set out its responsibilities. The Committee has satisfied its responsibilities for the year, in compliance with its terms of reference. Nominations Committee The Nominations Committee is chaired by Michael Ndoro and comprises four members, two of whom are non-executive directors. The Committee includes the Chief Executive Officer and is responsible for making recommendations to the Board on all new appointments to the Board and reviews the appointment of directors tosubsidiaryCompanyBoards.Aformalandtransparent process is in place in terms of which the requisite skills neededontheBoardareidentifiedandthoseindividuals who are best suited for the position and who are able to assist the Board in their endeavours, are recruited. The Committee meets on an as required basis. The Committee has formal terms of reference, which set out its responsibilities. The Committee has satisfied its responsibilities for the year, in compliance with its terms of reference. Risk Management The Board is responsible for determining the risk appetite of the Group, for setting risk parameters and for the overall governance of risk. The Audit and Risk Committee currently assists the Board in discharging its risk responsibilities by monitoring the effectiveness of risk management procedures at both Group and subsidiary Company level. The Board currently holds the view that the risk and audit function can be combined under a single Committee and as a consequence, there is no separate Risk Committee. This position is however likely to change once implementation of Enterprise Risk Management System is complete. In 2012, the Audit and Risk Committee recommended the implementation of an ISO 31 000 compliant Enterprise Risk Management System (“ERMS”), to assist in the enhancement and standardisation of the Group’s risk management processes. Implementation of the ERMS is in progress but not yet complete. Completion is targeted before December 2013. The Board is however satisfied that existing risk management practises are adequate during this transitional phase. Internal Audit There is currently no centralised internal audit function at a Group level. Certain subsidiary companies have their own internal audit departments but in the main the internal audit function is outsourced. Internal audit reports directly to the Board of directors of their respective companies. The Audit and Risk Committee is looking to expand the internal audit function in order to attain effective combined assurance. Supervisory and Regulatory Compliance The Group and certain of its subsidiary companies are subject to supervisory and regulatory controls in the geographic or country jurisdictions where they operate. In the case of Imara Holdings Limited, the regulators and supervisory authorities are: - Non-Bank Financial Institutions Regulatory Authority (NBFIRA) - International Financial Service Centre (IFSC) - Botswana Stock Exchange (BSE) The Group’s primary regulator is NBFIRA.
  27. 27. 25PAGE | CORPORATE GOVERNANCE REPORT The regulators and supervisory authorities at subsidiary Company and fund level are as follows: - ImaraAssetManagement(UK)Limited–FinancialConduct Authority–UnitedKingdom; - ImaraAfricaOpportunitiesFund-DublinStockExchange -Ireland; - Imara Asset Management South Africa (Proprietary) Limited-FinancialServicesBoard–SouthAfrica; - Imara Asset Management Zimbabwe (Private) Limited – ReserveBankofZimbabwe; - ImaraBeresfordInternationalLimited–Mauritius FinancialServicesBoard; - Imara Capital Securities (Pty) Limited – NBFIRA and BotswanaStockExchange - Imara Corporate Finance (Private) Limited-Zimbabwe - SecuritiesExchangeCommissionofZimbabwe; - ImaraEdwardsSecurities–ZimbabweStockExchange - ImaraSPReid(Proprietary)Limited - Johannesburg Stock Exchange and Financial Services Board–SouthAfrica Supervisory and regulatory controls are generally based on the submission of prescribed returns and annual compliance certificates and in all instances there is an exception reporting requirement. There have been no breaches of supervisory and regulatory controls within the Group and its subsidiaries during the past year. The past year has been characterised by an increase in both the complexity and frequency of regulatory compliance reporting. To address these developments, a GroupcomplianceunithasbeenestablishedandaGroup Compliance Officer appointed. Compliance Officers at subsidiary Company level report to their respective companies and also to the Group Compliance Officer. Board meeting attendance SM Ndoro MJS Tunmer AR Fleming G E Johns JR Legat ACH Mackeurtan RH Macleod TJ Matsau GZ Steffens DE Stone * By invitation. 3/3* - - 3/3 - - - 3/3 3/3 3/3* 4/4 4/4* - 3/4 - 3/4* - 4/4 - - 3/3 3/3* - 3/3 - 3/3* - - - 4/4 4/4 0/4 4/4 4/4 4/4 2/4 4/4 4/4 4/4 1/1 0/1 0/1 1/1 0/1 0/1 0/1 0/1 0/1 1/1 Director Audit & Risk Committee Remuneration Committee Nominations Committee Main AGM 2012/2013 Board Attendance Register
  28. 28. 26PAGE | AR Fleming GE Johns JR Legat ACH Mackeurtan RH Macleod SM Ndoro DE Stone MJS Tunmer Total 5 652 103 63 122 2 841 263 2 573 124 1 399 826 - 110 850 5 913 859 18 554 147 - - - - - - - - - 5 652 103 63 122 2 841 263 2 573 124 1 399 826 - 110 850 5 913 859 18 554 147 - - 175 000 100 000 158 333 - 176 000 163 000 772 333 - - 235 000 150 000 223 333 - 221 000 213 000 1 042 333 Director Number of shares held directly and indirectly at 30 April 2013 Movement in directors shareholding post year end Number of shares held directly and indirectly at 31 July 2013 Share options held under the Imara Share Option Scheme 30 April 2013 Share options held under the Imara Share Option Scheme 31 July 2013 Directors’ shareholding As at 30 April 2013 and 31 July 2013 (the last practicable date prior to the publication of this Annual Report), the directors, directly and indirectly, held the following shares in the Company: AR Fleming GE Johns JR Legat ACH Mackeurtan RH Macleod SM Ndoro DE Stone MJS Tunmer Total 5 652 103 63 122 2 841 263 2 549 119 1 399 826 - 110 850 5 913 859 18 530 142 - - - - - - - - - 5 652 103 63 122 2 841 263 2 549 119 1 399 826 - 110 850 5 913 859 18 530 142 - - 125 000 50 000 108 333 50 000 196 000 113 000 642 333 - - 175 000 100 000 158 333 50 000 246 000 163 000 892 333 Director Number of shares held directly and indirectly at 30 April 2012 Movement in directors shareholding post year end Number of shares held directly and indirectly at 31 July 2012 Share options held under the Imara Share Option Scheme 30 April 2012 Share options held under the Imara Share Option Scheme 31 July 2012 Comparative information relating to directors’ shareholding as at 30 April 2012 and 31 July 2012 are as follows: Directors’ remuneration At the Annual General Meeting of the Company on 22 October 2013, shareholders will be asked to approve the remuneration paid to the directors for the year amounting to P13 232 107 (2012: P12 318 065). Remuneration paid to directors of the Company is disclosed in Note 4 on page 66 and note 15 on page 91
  29. 29. 27PAGE | CORPORATE GOVERNANCE REPORT Botswana Stock Exchange The Imara share was listed on the Venture Capital Market of the Botswana Stock Exchange on 4 October 2006. A minimum of 300 public shareholders is required for a Company to be listed on the main Board of the Botswana Stock Exchange. It remains the Company’s intention to seek a listing on the main Board once the minimum number of shareholders has been achieved. As at 30 April 2013, Imara had a total of 260 shareholders of which 220 were public shareholders. (2012: Total of 273 shareholders of which 226 were public shareholders). The Company has during the year, complied with all of the BSE requirements for a listed entity. Dealing in securities The Group has a policy prohibiting dealings in its shares by its directors, officers, executive management and employees during closed periods, which are in effect: - from 1 November until the publication of interim financial statements; and - from 1 May until the publication of annual financial statements; and - when any directors, officers, executive management and/or employees are in possession of price sensitive information, not readily available to the public. The Group’s policy is fully compliant with the Botswana Stock Exchange’s requirements for listed companies. Communication with stakeholders The Group is committed to a policy of effective communication with stakeholders on matters of mutual interest. The Group has adopted the Botswana Stock Exchange’s guidelines pertaining to the dissemination of financial information to stakeholders. Liaison meetings are also held with NBFIRA, the International Financial Services Centre, regulators and supervisory authorities to brief them on the Group’s performance and key strategic initiatives. InkeepingwiththeGroup’scommitmenttocontinually improve communications with stakeholders, the Group has an Investor Relations section within the Imara Holdings website, www.imara.com, which allows stakeholders to access salient information pertaining to the Group. Social corporate responsibility The Board considers the legitimate interests and expectations of stakeholders when deciding in the best interests of the Group. In determining the best interests oftheGroup,theBoardviewstheGroupasasustainable enterprise and responsible corporate citizen. Remuneration paid to non-executive directors of the Company for the year under review is tabulated below: SM Ndoro AR Fleming GE Johns TJ Matsau GZ Steffens Total 307 345 171 179 300 329 249 360 272 593 1 300 806 72 137 - 52 528 9 652 11 857 146 174 13 143 - - - - 13 143 392 625 171 179 352 857 259 012 284 450 1 460 123 Director Directors fees Expenses Share based payment expense Total Remuneration
  30. 30. 28PAGE | Imara is a Group with an authentic African heritage which owes its success, in part, to the support of the communities in which it operates. The Group recognises its role and responsibility as a corporate citizen and is committed to providing support to those communities through broad based programmes, sponsorship and other initiatives. The Imara South Africa Trust was established in May 2011 and has as its main objective the provision of educational assistance to people from previously disadvantaged Groups in South Africa. A portion of the annual dividends declared by Imara Capital South Africa (Proprietary) Limited will accrue to the Trust. As part of its Social Corporate Responsibility, and under the auspices of the Imara Trust, the Group is pleased with on-going developments under the Imara Lightwarriors Project. The aim of this project is narrated in more detail elsewhere in this Annual Report and illustrates the Group’s commitment to offer educational support to the communities in which it operates. The Group launched an art collection in 2010, styled “The Imara Collection”. This body of photographic work broadly illustrates the theme “Investing in Africa”, through a variety of different lenses and will continue to be published exclusively in our Annual Reports. Additions to the collection during the 2013 year came from the Imara Lightwarriors Project and a field trip undertaken to the Kwa Zulu Natal in South Africa. Post balance sheet events No events or transactions have occurred since 30 April 2013 or are pending, that would have a material effect on the financial statements at that date or for the year then ended, or that are of such significance in relation to the Company’s or Group’s affairs as to require mention in a note to the financial statements in order to not make them misleading regarding the financial position, results of operations, or statement of cash flows of the Group or Company. Directors’ responsibility for the financial statements The directors are responsible for the preparation and fair presentation of the financial statements of the Group and Company in accordance with International Financial Reporting Standards and in a manner required by the Companies Act of Botswana (Companies Act, 2003). This responsibility includes, designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and consistently applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The directors have satisfactorily discharged their responsibility in respect of the financial statements of the Group and Company for the year ended 30 April 2013. The audited financial statements of the Group and Company were approved and adopted by the Board on 26 July 2013 and Messrs MJS Tunmer and DE Stone were authorised to sign these financial statements. The un-audited financial statements for the Group for the six months ended 31 October 2012 were announced on 14 December 2012 and reflected a loss after tax of P5 120 505. The audited results of the Group for the year ended 30 April 2013, were announced on 26 July 2013, and reflected a loss after tax of P1 500 141. The profit after tax for the second half of the year, therefore amounted of P3 620 364.
  31. 31. School children from the Gumbi tribe, future custodians of the environment Part of the fresh educational vision of the Wildlife Act Fund’s programmes is to transform the mindset of the children. It wants the young community members to envisage their peers in the role of conservationists. Through the Wildlife Active Kids Project, environmentally focused education reaches children in communities that live close to game reserves. Through the bush camp program in Somkhanda Game Reserve, local children benefit from the expert conservation education of professionals from Tembe Elephant Park and Mkhuze Game Reserve. The Community Conservation Liaisons, who have been trained as camp guides themselves, can empower the Gumbi Community with the same opportunity. There are also seminars that draw from the perspectives of community members, so that relevant strategies for economic development can be devised in conjunction with the communities at large. It is only when the feasibility of different community development options is ascertained, that alleviating issues such as food security (which drives the bush meat trade) becomes an option. Provided the intricacies of conservation as a concept are understood, the next generation of Africans can develop the capacity to project and implement its own unique vision – towards the long-term future of the environment that sustains them.
  32. 32. 31PAGE | IMARA’S CORPORATE SOCIAL INVESTMENT INITIATIVE UPDATE The Imara Trust; converting complexity into African strength The Imara Trust was launched on the 1st of May 2011 with the resolute intention of long-term contribution to Black Economic Empowerment with a broad range of beneficiation. Over the last three years, the African investment journey with respect to the Imara Trust has led Imara towards an empirically derived, more nuanced understanding of Corporate Social Responsibility. Imara has accepted that a strategic, adaptable approach to a Corporate Social Investment (CSI) is crucial for Imara to continue realising its aims of good corporate citizenship in accordance with 21st century sustainability measures. Accordingly, dividend flows from Imara’s South African businesses (along with donations from The Imara Group) will continue to be channelled into Imara’s ongoing CSI with a strategic mindset that adapts holistically to evidence of need, in areas where Imara has presence. Imara appreciates that corporate social responsibility embraces the complex interdependence of social, economic, and environmental factors. Furthermore, Imara realises that empowerment for developing communities in Africa depends on a synthesis whereby all three factors mutually re-enforce one another in dynamic equilibrium. It is also important to Imara that the right balance of investment is struck between quality (depth) and quantity (breadth). This balance is illustrated by considering the exciting professional and academic developments afforded by Imara’s long-standing commitment to Teddy Sambu, our photographic Bursar and first Imara Lightwarrior. This year’s Imara Lightwarrior expedition to the Mkuze River drew Teddy, camera in hand, along with mentor and artist, Athol Moult, deep into the reality of tribal life around the Somkhanda Game Reserve and environs. Here, they captured the authentic imagery that comprises the six artworks in these pages. This fourth instalment of the Imara Collection tells a story of a region in rural Africa. It is an artistic expression of a complex eco system surrounding the Mkuze River, which winds its way through world famous nature reserves and tribal community land, supporting a diverse array of people and wildlife. In this region of KwaZulu Natal, a critical mass has been brought about by the friction of increased population, and unsustainable subsistence practices. This in turn has created an urgent need for broad- ranging education. The modern challenges of tribal life in Zululand Historically, the sustainability of river communities around Africa has depended on resources being abundantlyaccessiblewithinthenaturalenvironment. However, the traditional, more itinerant approach to survival for such communities has become unviable in the 21st century, as the number of people pushing into and living within these regions continues to swell. The Gumbi community, who were visited on the expedition to the Mkuze River, serve as an instructive example of the dynamics of the region’s current challenges. Here is a tribe who were, on the face of it, in a comparatively ‘privileged’ position. In an historic decision, they had been able to rightfully reclaim their community land. Following this, the Gumbi community decided to allocate a portion of their land for grazing and homesteads, while the rest was declared a game reserve – so far so good. The fact that this community is now enduring systemic problems stemming from unsustainable use of the land and its wildlife, is somewhat ironic. Currently, burgeoning communities like the Gumbi are unable to support themselves using the available resources (e.g. cattle, fish, crops) within their natural environment in perpetuity (i.e. sustainably),
  33. 33. 32PAGE | and the level of destitution makes them susceptible. When one accepts that the natural environment is an integral part of the Somkhanda region’s economic lifeblood, it makes sense to investigate how the environmental and social ills of the region around the Mkuze River manifest. As it happens, there are a variety of practices straining the land of the Somkhanda region and endangering its wildlife. As the population, in the Gumbi and other communities in the tribal region, continues to expand, the communities are pushed closer to the boundary lines of the Game Reserves. Because of an unwieldy increase in cattle and the over-grazing that ensues, there follows a huge temptation to exploit the reserves. In the reserves, the land is lush because the rolling savannah has been protected by techniques that ensure against over-grazing. Understandably, community members have resorted to removing fences and letting their cattle in to graze. Also, limited job opportunities within the community and low employment render conventionally sourced meat prohibitively expensive. Hence, a whole trade has grown up around ‘bush-meat’. Community members ensnare supposedly protected game within the reserves to sell for bush meat, a far cheaper alternative than conventionally sourced produce. Although it is less prevalent, tribal community members in the region have also been known to succumb to unsavoury financial inducements, such as poaching for the wildlife trade. Theexpertrevolutionineducation–community centred, environmentally specific Given that the Somkhanda Game Reserve is owned by its surrounding community members, it is sad that this has been the response to the land useage. However, the knowledge that the problem is perpetuated by too many inhabitants being unaware of the reserve’s potential (surprisingly, some community members are not even privy to the essential fact that they are the owners of the land and the animals within it), has provided a specific opportunity for social and environmental renewal. While the municipality has provided basic infrastructure, the quality and context-specific nature of education in the region will play a key role in the future success of these communities. On the Imara Lightwarrior expedition to the Mkuze River region, Dr Simon Morgan of The Wildlife ACT Fund hosted Teddy and Athol through Somkhanda. Dr Morgan explained that the Fund’s Trustees, while overseeing the wildlife monitoring and conservation work on Somkhanda Game Reserve on behalf of the community, noted a need for an intensive and extensive community conservation education programme. Discoursewithchildrenintheregionhad revealed a limited conception of the career options available to them as adults. Invariably, community children were only able to identify with the possibility of entering three professions – teacher, policeman, or nurse – because these were the only professions, beyond hunting, that they encountered in the region. The Fund, of course, could immediately see the potential for a range of career paths relevant to the local children in the realm of conservation and eco- tourism. However, for the children to understand and ultimately gravitate towards these options they needed to become attainable. Something new would need to be offered with respect to education and training. As a response, the Wildlife ACTive Kids Project was formed as part of the Fund’s overall community conservation education effort. The Wildlife ACT Fund’s community conservation project includes intervention with compromised individuals, education of adjacent communities about the unsustainability of poaching practices, and education
  34. 34. 33PAGE | IMARA’S CORPORATE SOCIAL INVESTMENT INITIATIVE UPDATE of local communities about the importance of wildlife conservation and biodiversity conservation in general. Adult conservation awareness seminars are given at community meetings in all the tribal communities surrounding Somkhanda Game Reserve. Training and employment of local community members, for wildlife monitoring and conservation education jobs in the game reserve, are also provided. The surveys conducted at community meetings help to ascertain the community development needs of villages adjacent to the game reserve. Atagrassrootslevel,monthlyin-schoolconservation lessons are conducted in all 10 primary schools in the tribal communities surrounding Somkhanda Game Reserve. Four-day free-of-charge Wildlife ACTive Kids conservation bush camps (with all grade six students and teachers from all 10 primary schools) are held at the community owned Ubhejane Bush Camp. Is the education effective? Before educational initiatives, many community members, including children, felt that there was nothing wrong with, poaching with snares. However, ongoing evaluation procedures with children show that attitudes about poaching change dramatically in a positive direction after students go through the Wildlife ACTive Kids conservation education program. Identical questionnaires (regarding environmental science understanding, and conservation attitudes) are administered once before in-school conservation lessons begin, and again after the Children’s Bush Camp Program experience. On exit, and without revision, the students are exhibiting, on average, a 108% increase in correct or preferable answers. Broadly speaking, the initiative consults community leaders to ascertain community needs, injects the local school curriculum with highly effective environment-specific, career-oriented education, and links the communities with relevant donor organizations. Wild expansion: a sustainable blue-print for investment in human ingenuity Imara applaud the schools conservation project in the Somkhanda region and believe that there is merit in the expansion potential of this project or the establishment of similar projects in other regions or countries, such as Botswana. What became clear during the field trip was that as a game reserve owned and created by a tribe, further success in Somkhanda could work as a blue-print for other regions. The dynamics of a project of this nature are catalytic in the way they create a nexus of beneficial relationships. Tribal leadership melds with conservation expertise and the current needs of tribal communities adjacent to Game Reserves. Imara lightwarrior, Teddy Sambu: an African success story On an individual level, it is heartening to report that our photographic Bursar, Teddy Sambu, has exceeded Imara’s expectations with regards to his academic and professional achievements. At the Cape Town School of Photography he has shone with his second-year projects. His ‘Personal Project’ (entitled “The Paradox of Ritual”) contrasts Western Christian Religious rituals – specifically Zionist Christian Church & Catholic Church rituals – with the rituals of traditional, Sangoma based spirituality in Khayelitsha. According to the academic staff, the quality and evocativeness of this work served as further evidence of Teddy’s aptitude for portraiture and visual storytelling. Professionally, Teddy’s energies have found a natural home in corporate photography.
  35. 35. 34PAGE | Bear in mind that the services of corporate photographers are engaged to visually express the personality and philosophy of a business. Teddy’s innate people skills, underpinned by his ever- increasing technical mastery, make him a natural,and there is industry proof that this is a professional avenue worth encouraging Teddy to pursue: so pleased were they with his work, Platters Guide to South African Wine has invited Teddy back to shoot a second round of portraits for this year’s edition. Another opportunity has arisen with a major upmarket retailer. Teddy successfully completed a week of work experience in the Woolworths in- house photography studio, and may yet be offered an internship in a Company well-established for its enterprise development among emerging South Africans. Teddy is involved in originating photography for ‘Bags for Good’, the project that produces re-usable shopping bags for Woolworths; with his pictures. Back in his township, Teddy’s reputation as an entrepreneur and his involvement with the community remains deep and constant: he’s still the go-to person in Khayelitsha for photography services needed at funerals, weddings, graduations, and social events and continues to employ two people at Khanye Photo Productions. It may be stating the obvious to observe that Teddy has come a long way since taking photographs of children playing football on the N2 with very rudimentary equipment. However, it is well worth reflecting that with the right network of sustained support, someone with limited education but abundant talent and resilience, can progress through career stages that would otherwise have been unattainable given the limitations of an underprivileged background. Nikon and 44Black enabled Teddy to take the first step of setting up a photography and framing shop in Khayelitsha, whereupon the Imara Lightwarriors CSI has facilitated an invaluable bridging process. Two years on and Teddy is apt to enter the photographic industry at a level commensurate with his talent. Imara is proud to see Teddy, with the right vocational preparation, academic immersion, and mentoring, heading out beyond his course of study towards a bright future – a future with relevant professional contacts for commissions, and sought after photographic apprenticeship opportunities in the industry.
  36. 36. 35PAGE | GLOSSARY Term Meaning or Definition Attributable earnings the portion of net profit for the year, which is attributable to ordinary shareholders of the Company Attributable losses the portion of net losses for the year, which are attributable to ordinary shareholders of the Company Attributable earnings growth the percentage increase in attributable earnings, from one reporting year to the next BBBEE (“BEE”) Broad Based Black Economic Empowerment Cash flow the movement of cash in and out of the Group Capital employed the sum of total equity plus non-current liabilities Closed period the period from the end of a designated financial reporting period to the date of the announcement of the results for that period, during which directors, officers and employees of the Company are prohibited from dealing in the Company’s shares Cost to income ratio cost of services sold plus operating expenses, as a percentage of total income, which comprises revenue and other income Diluted earnings per share attributable earnings divided by the diluted weighted average number of shares. Diluted weighted average number of shares the weighted average number of shares increased by the number of shares that may be issued in future, as a result of existing dilutive instruments (share options & debentures) Dividend per share dividend declared for the year divided by the number of shares in issue at year end Dividend cover the number of times that the Company’s dividend to ordinary shareholders’ could be paid out of its profit after tax in the same accounting period Dividend yield dividend per share as a percentage of the closing price of the Company’s ordinary shares Earnings per share or EPS attributable earnings divided by the weighted average number of shares Earnings yield earnings per share as a percentage of the closing price of the Company’s ordinary share EBITDA earnings before interest, taxation, depreciation, amortisation Effective tax rate the tax (charge)/credit as a percentage of profit before taxation Free cash flow per share net cash flows for the year, (inclusive of working capital changes), divided by the weighted average number of shares The following is a glossary of terms and definitions used in this Annual Report: The glossary of terms and definitions above should be read in conjunction with the Group’s accounting policies.
  37. 37. 36PAGE | Term Meaning or Definition Funds under management assets managed by the Group, which are beneficially owned by clients and as such do not form part of the consolidated Statement of Financial Position Gearing ratio long term interest bearing loans and borrowings divided by shareholders’ equity IFSC International Financial Services Centre, the Botswana Offshore Centre Liquid assets assets held in cash or which can be readily turned into cash with minimal capital loss MK Malawi Kwacha, the standard monetary unit of Malawi Market capitalisation the value of a Company obtained by multiplying the number of ordinary shares in issue by their market value NBFIRA Non Bank Financial Institutions Regulatory Authority Net asset value per share shareholders’ equity divided by the number of ordinary shares in issue at year end Operating earnings after adjusting attributable earnings less “special” items (i.e. asset management for “special” items performance fees and other non-recurring profit items) Price earnings ratio the price of the Company’s ordinary shares divided by earnings per share Pula or P Botswana Pula, the standard monetary unit of Botswana Dividend yield dividend per share as a percentage of the closing price of the Company’s ordinary shares Rand or ZAR South African Rand, the standard monetary unit of South Africa Return on average assets net profit for the year as a percentage of average total assets Return on capital employed attributable earnings as a percentage of capital employed Return on equity attributable earnings as a percentage of shareholders’ equity at year end Revenue growth the percentage increase in revenue, from one reporting period to the next Shareholders’ equity stated capital plus reserves The Group Imara Holdings Limited together with its subsidiaries and associates The Company Imara Holdings Limited, a Company registered in Botswana thebe the smallest monetary unit of Botswana amounting to one hundredth of a Pula USD or US$ United States Dollar, the standard monetary unit of the United States of America Weighted average number of shares the number of ordinary shares in issue at the beginning of the year, increased by shares issued during the year, which in turn are weighted on a time basis for the period during which they participated in the income of the Group
  38. 38. 37PAGE | 122 483 10 774 98 097 105 925 8 504 (3 742) 4 762 5 635 137 731 148 976 199 921 (16 253) 3 054 139 4,09 3,78 2,15 0,00 28,20 44,00 93,90 338,40 27,89 17,68 237,03 161,90 168,63 3,54 (17,52) 3,22 2,96 880 34 145 919 6 015 126 431 140 547 3 477 (4 977) (1 500) (4 305) 129 209 143 474 252 471 (15 875) 4 260 189 (3,33) (3,00) (0,66) 0,00 19,13 143,41 97,91 (44,17) 28,88 32,71 (59,36) (131,50) (176,39) (6,19) 26,29 1,93 1,84 772 (8) P 000’s P 000’s P 000’s P 000’s P 000’s P 000’s P 000’s P 000’s P 000’s P 000’s P 000’s P 000’s P m’s Number % % % % % % % % % % % % % % % times times P 000’s P 000’s FIVE-YEAR FINANCIAL HIGHLIGHTS AND RATIOS 101 516 10 736 85 699 82 464 8 601 2 927 5 674 5 770 132 168 133 536 208 464 64 461 1 894 90 4,37 4,32 2,44 0,69 (43,31) 34,03 92,05 (84,01) (47,28) (16,95) (86,82) (89,79) (89,78) (4,98) (18,96) 2,60 2,52 1 134 63 92 809 3 988 78 220 82 267 2 163 1 662 501 247 140 817 144 399 244 099 25 663 2 768 118 0,18 0,17 0,22 0,00 (8,58) 76,86 97,83 (62,86) (8,73) (0,25) (74,86) (91,17) (95,72) 6,54 17,09 2,16 1,96 787 4 95 538 (4 519) 76 707 90 010 (6 206) 1 487 (7 693) (8 211) 133 021 136 973 242 383 (22 486) 2 960 118 (6,17) (5,99) (3,16) 0,00 2,94 23,97 106,01 (213,32) (1,93) 9,41 (386,86) (1 636,27) (3 427,37) (5,54) (0,70) 2,03 1,81 810 (65) Salient financial results and data: Revenue EBITDA Gross profit Operating expenses Profit / (loss) before taxation Taxation Profit /(loss) after taxation Attributable earnings Shareholders’ equity Capital employed Total assets Free cash flows for the year Funds under management at year end Number of employees – average for the year Key financial ratios: Return on equity Return on capital employed Return on average assets Gearing ratio Revenue growth Effective tax rate Cost to income EBITDA – year on year change Gross profit – year on year change Operating expenses – year on year change Profit / (loss) before tax – year on year change Profit / (loss) after tax – year on year change Attributable earnings growth Shareholders’ equity- year on year change Total assets – year on year change Current assets to current liabilities Liquid assets to current liabilities Revenue per employee Profit / (loss) after tax per employee Years ended 30 April 20122013 2011 2010 2009 Reclassified
  39. 39. 38PAGE | 59 140 58 650 61 220 255 285 210 150,81 273 9,61 9,20 3,00 Passed 3,00 1,18 1,18 2,68 26,54 2,35 (0,28) 59 152 58 655 62 248 249 260 224 147,29 273 (7,34) (7,34) Passed Passed Passed - - - (34,75) 2,20 (0,27) 000’s 000’s 000’s thebe thebe thebe P m’s Number thebe thebe thebe thebe thebe % % times times Pula Pula 56 778 56 394 58 120 450 1 375 450 255,50 298 10,2 9,9 3,00 Passed 3,00 0,67 0,67 3,33 43,98 2,34 1,17 58 162 57 321 58 606 495 680 416 287,90 318 0,43 0,42 Passed Passed Passed - - - 1 149,84 2,46 0,38 58 162 58 162 60 229 300 500 275 174,49 309 (14,12) (14,12) Passed Passed Passed - - - (21,15) 2,29 (0,39) Market and per share data: Number of shares in issue at year end Weighted average shares in issue Diluted weighted average shares in issue Quoted share price at year end Share price- high for the year Share price - low for the year Market capitalisation at year end Number of shareholders at year end Key market and per share ratios: EPS - basic EPS - diluted Dividend per share - ordinary Dividend per share - special Dividend per share - total Dividend yield - ordinary dividend Dividend yield - total dividend Dividend cover - total dividend Price earnings ratio Net asset value per share Free cash flow per share Years ended 30 April 20122013 2011 2010 2009 Reclassified Re-classified items: In the 2009 financial year, the Income Statement was segmented into continuing and discontinued operations. Discontinued operations related to Imara Asset Management (Pty) Limited – Botswana which has ceased trading and is now dormant. Following a re-assessment of discontinued operations in the 2010 financial year, a decision was taken that this classification was no longer applicable and that the operations of this entity should be re-classified. Comparative financial information has been amended to take account of the re-classification. When a Company becomes a subsidiary during the year, the statistics relating to the number of employees is computed on a weighted average basis from the date on which the Company became a subsidiary. In financial year 2013, Imara Beresford International Limited, the Mauritius registered Company became a subsidiary on 31 October 2012. In financial year 2012, Imara Capital Zimbabwe (Private) Limited became a subsidiary on 30 November 2012.
  40. 40. 39PAGE | GRAPHICAL FIVE-YEAR FINANCIAL HIGHLIGHTS AND RATIOS 160,000 140,000 120,000 100,000 80,000 60,000 40,000 0 160,000 140,000 120,000 100,000 80,000 60,000 40,000 0 2012 20132009 2010 2011 Revenue - P 000’s 2012 20132009 2010 2011 Operating expenses - P 000’s 6,000 4,000 2,000 0 (2,000) (4,000) (6,000) (8,000) 80 60 40 20 0 (20) (40) (60) (80) 2012 20132009 2010 2011 Profit/(loss) after taxation - P 000’s 12,000 10,000 8,000 6,000 4,000 2,000 0 (2,000) (4,000) (6,000) 2012 20132009 2010 2011 EBITDA - P 000’s 20132009 2010 2011 2012 Profit/(loss) after tax per employee - P 000’s 15 10 5 0 (5) (10) (15) 20132009 2010 2011 2012 Earnings per share (diluted) - thebe 1,200 1,000 800 600 400 200 0 2012 20132009 2010 2011 Revenue per employee - P 000’s 4.00 3.00 2.00 1.00 0 20132009 2010 2011 2012 Dividend per share - thebe
  41. 41. 40PAGE | 150,000 120,000 90,000 60,000 30,000 0 150,000 120,000 90,000 60,000 30,000 0 2012 20132009 2010 2011 Shareholders’ equity - P 000’s 2012 20132009 2010 2011 Capital employed - P 000’s 280,000 240,000 200,000 160,000 120,000 80,000 40,000 0 2012 20132009 2010 2011 Total assets - P 000’s 6 4 2 0 (2) (4) (6) (8) 2012 20132009 2010 2011 Return on capital employed - % 3 2 1 0 (1) (2) (3) (4) 6 4 2 0 (2) (4) (6) (8) 2012 20122013 20132009 20092010 20102011 2011 Return on average assets - % Return on equity - % 300 250 200 150 100 50 0 2012 20132009 2010 2011 Market capitalisation at year end - P’m 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2012 20132009 2010 2011 Funds under management - P’m
  42. 42. Imara Holdings Limited Consolidated Annual Financial Statements Financial year ended 30 April 2013 42PAGE | Report on the Financial Statements We have audited the accompanying Group financial statements of Imara Holdings Limited and the company financial statements, which comprise the Statement of Financial Position as at 30 April 2013, and the Statement of Comprehensive Income, Statement of Changes in Equity and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 43-111. Directors’ Responsibility for the Financial Statements The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with the International Financial Reporting Standards and in the manner required by the Companies Act of Botswana (Companies Act, 2003) and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards of Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Imara Holdings Limited Group and company as at 30 April 2013, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of Botswana (Companies Act, 2003). Ernst & Young Practicing Member: Thomas Chitambo (20030022) Certified Auditor 26 July 2013 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IMARA HOLDINGS LIMITED Second Floor, Plot 22 Khama Cresent PO Box 41015 Gaborone Botswana
  43. 43. Imara Holdings Limited Consolidated Annual Financial Statements Financial year ended 30 April 2013 43PAGE | Revenue Other operating income Total income Operating expenses Cost of services sold Operating profit / (loss) Finance costs Share of profits from associates Reversal of impairment losses / (impairment losses) on investment in associates Profit before tax Income tax (expense) / credit (Loss)/profit for the year Attributable to: Owners of the parent Non- controlling interests (Loss)/profit for the year Earnings per share for the year: Equity shareholders’ of the parent - Basic thebe - Diluted thebe 21 399 661 2 898 683 24 298 344 (15 372 486) - 8 925 858 (2 909 043) - - 6 016 815 (967 271) 5 049 544 - - - - - 10 310 080 33 390 871 43 700 951 (19 551 971) - 24 148 980 (4 323 285) - - 19 825 695 (1 370 573) 18 455 122 - - - - - 122 482 705 14 959 533 137 442 238 (105 924 930) (24 385 406) 7 131 902 (510 042) 1 849 528 32 031 8 503 419 (3 741 781) 4 761 638 5 635 305 (873 667) 4 761 638 9.61 9.20 145 919 445 18 191 196 164 110 641 (140 547 968) (19 488 607) 4 074 066 (396 768) 1 094 609 (1 294 653) 3 477 254 (4 977 395) (1 500 141) (4 304 682) 2 804 541 (1 500 141) (7.34) (7.34) 2 3 4 5 13 13 6 7 7 Notes Group 2013 Pula Group 2012 Pula Company 2013 Pula Company 2012 Pula Year ended 30 April CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
  44. 44. Imara Holdings Limited Consolidated Annual Financial Statements Financial year ended 30 April 2013 44PAGE | (Loss)/profit for the year Other comprehensive income: Net (loss)/gain on available-for-sale-financial assets Transfer to Income Statement on disposal of available-for-sale financial assets Income tax effect Exchange differences on translation of foreign operations Income tax (expense) / benefit Other comprehensive loss for the year, net of tax Total comprehensive (loss)/ income for the year, net of tax Attributable to: Owners of the parent Non-controlling interest Total comprehensive (loss)/ income 5 049 544 (83 814) (410 634) 326 820 - - - - (83 814) 4 965 730 4 965 730 - 4 965 730 18 455 122 (948) (6 539) 5 591 - - - - (948) 18 454 174 18 454 174 - 18 454 174 4 761 638 (2 447 451) 1 186 015 (1 727 816) (1 905 650) 1 420 013 1 420 013 - (1 027 438) 3 734 200 4 607 867 (873 667) 3 734 200 (1 500 141) (1 736 463) (1 260 449) (699 524) 223 510 (1 672 592) (1 672 592) - (3 409 055) (4 909 196) (7 713 737) 2 804 541 (4 909 196) Notes Group 2013 Pula Group 2012 Pula Company 2013 Pula Company 2012 Pula Year ended 30 April CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
  45. 45. Imara Holdings Limited Consolidated Annual Financial Statements Financial year ended 30 April 2013 45PAGE | Non-current assets Equipment Goodwill Intangible assets Investment in subsidiaries Investment in associates Available-for-sale financial assets Accounts receivable - group companies Deferred tax assets Current assets Listed trading securities Trade and other receivables Cash and cash equivalents Income tax refundable TOTAL ASSETS EQUITY AND LIABILITIES Equity Stated capital Non-distributable reserves Distributable reserves Equity attributable to owners of the parent Non-controlling interests Total equity Non-current liabilities Accounts payable - group companies Interest bearing loans and borrowings Retirement benefit obligation Deferred tax liabilities Current liabilities Trade and other payables Listed trading securities – sold short Interest bearing loans and borrowings Income tax payable Bank overdraft Total liabilities TOTAL EQUITY & LIABILITIES 468 708 - - 55 671 033 8 215 354 255 110 45 942 475 2 223 805 112 776 485 - 1 952 943 23 462 229 - 25 415 172 138 191 657 50 914 889 7 856 616 25 511 008 84 282 513 - 84 282 513 52 208 918 - - - 52 208 918 1 700 226 - - - - 1 700 226 53 909 144 138 191 657 866 665 - - 76 117 140 291 142 259 194 41 749 763 874 652 120 158 556 - 1 682 825 16 000 025 - 17 682 850 137 841 406 50 931 011 8 947 179 42 191 921 102 070 111 - 102 070 111 33 495 190 - - - 33 495 190 2 276 105 - - - - 2 276 106 35 771 295 137 841 406 5 686 468 553 460 50 813 - 9 557 712 17 866 934 - 2 341 462 36 056 849 6 408 778 71 647 525 84 571 232 1 237 011 163 864 546 199 921 395 50 914 889 14 706 691 72 109 221 137 730 801 5 790 172 143 520 973 - 1 886 213 - 3 568 992 5 455 205 46 794 659 439 621 3 486 053 145 244 79 640 50 945 217 56 400 422 199 921 395 6 098 309 12 813 858 234 533 - 877 669 21 180 571 - 1 033 646 42 238 586 5 276 905 134 346 123 69 805 677 804 055 210 232 760 252 471 346 50 931 011 12 069 282 66 208 347 129 208 640 8 550 953 137 759 593 - 2 757 301 535 205 2 421 586 5 714 092 105 102 465 95 169 3 295 644 502 264 2 119 108 997 661 114 711 753 252 471 346 9 10 11 12 13 14 15 6 16 17 18 19 20 15 21 6 22 16 21 21 Notes Group 2013 Pula Group 2012 Pula Company 2013 Pula Company 2012 Pula Year ended 30 April CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS
  46. 46. Imara Holdings Limited Consolidated Annual Financial Statements Financial year ended 30 April 2013 46PAGE | Profit before tax Adjusted for non-cash items included in profit before tax: Amortisation Depreciation Interest received Finance costs Share of profit from associates Impairment losses / (reversal of impairment losses) on investment in associates Profit realised from associate company on acquisition of controlling stake Share based payment expense – Options Net foreign exchange difference Fair value (gains) (Profit) / loss from sale of investments Dividends received Profit / (loss) on disposal of equipment Debt forgiveness – group loans Operating cash inflows before working capital adjustments: Increase in trading stock Decrease / (increase) in trade and other receivables Increase / (decrease) in trade and other payables Cash generated from operations Income tax paid Interest received Finance costs Net cash flows (used in) operating activities Cash flows from investing activities: Dividends received – non-group Dividends received – associates and subsidiaries Acquisition of associates Acquisition of non-controlling interest in subsidiary Net cash (paid) /received on acquisition of subsidiary Net cash received on consolidation of subsidiary Purchase of equipment - to maintain operating capacity Proceeds – sale of equipment Loans granted to group companies (Purchase) / proceeds from sale of available-for-sale-financial assets Netcashflows(usedin)/generatedfrominvestingactivities Cash flows from financing activities: Proceeds from issue of shares Loans (paid to)/received from group companies Increase in borrowings Dividends paid – equity holders of the parent & minorities in subsidiaries Net cash flows from / (used in) financing activities Net (decrease) / increase in cash and cash equivalents Net foreign exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Comprising: Cash and equivalents and short term investments Bank overdraft Net cash and cash equivalents 3 477 254 88 786 2 073 300 (3 532 957) 396 768 (1 094 609) 1 294 653 (1 039 005) 854 156 (2 976 866) (3 200 582) (640 770) (889 509) 4 409 - (5 184 972) 882 589 (58 899 350) 54 592 192 (8 609 541) (4 074 483) 3 532 957 (396 768) (9 547 835) 889 509 351 303 (1 355 860) - (264 400) - (2 279 244) 353 090 - (1 208 748) (3 514 349) 16 123 - 871 088 (3 700 232) (2 813 021) (15 875 206) 1 187 172 84 491 592 69 803 558 69 805 677 (2 119) 69 803 558 8 503 421 193 203 1 567 503 (3 953 775) 510 042 (1 849 528) (32 031) - 656 531 (2 035 116) - (1 823 506) (1 068 728) 35 795 - 703 831 (429 141) 41 328 616 (57 540 197) (15 936 891) (3 827 666) 3 953 775 (510 042) (16 320 824) 1 068 728 1 909 853 (589 762) (2 160 926) 529 887 6 219 414 (1 207 768) 436 790 - (8 070 867) (1 864 651) 487 377 - 1 886 213 (441 296) 1 932 294 (16 253 201) 2 557 668 98 187 125 84 491 592 84 571 232 (79 640) 84 491 592 19 825 695 - 191 513 (4 570 920) 4 323 285 - - - 184 928 (1 194 050) - 4 285 (2 002 492) (46 232) (31 935 226) (15 219 215) - 270 117 575 878 (14 373 220) (21 420) 4 570 920 (4 323 285) (14 147 005) 2 002 492 - (1 355 860) (2 906 714) - - (697 484) 154 244 (3 160 027) (2 434) (5 965 783) 16 123 13 221 498 - (1 774 209) 11 463 412 (8 649 376) 1 187 172 23 462 229 16 000 025 16 000 025 - 16 000 025 6 016 815 142 800 204 820 (4 234 348) 2 909 043 - - - 131 610 (2 970 040) - 257 459 (13 557 098) (1 000) - (11 099 939) - (717 130) (793 054) (12 610 123) (19 832) 4 234 348 (2 909 043) (11 304 650) - 13 557 098 (589 763) (2 160 926) (622 088) (46 459) - 1 000 (9 482 261) 454 899 1 111 500 487 377 (4 740 187) - - (4 252 810) (14 445 960) 2 557 668 35 350 521 23 462 229 23 462 229 - 23 462 229 11 9 2 5 13 13 12 4 2 3&4 2 5 2 2 & 13 13 12 12 9 20 18 Notes Group 2013 Pula Group 2012 Pula Company 2013 Pula Company 2012 Pula Year ended 30 April CONSOLIDATED STATEMENT OF CASH FLOWS Cash flows from operating activities:

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