News Column

Annual Report

May 30, 2014

COMPANY REGISTRATION NUMBER 05714562 ZIMNRG PLC FINANCIAL STATEMENTS 28 FEBRUARY 2014 CONTENTS PAGE Officers and professional advisers 1 Strategic report 2 Directors' report 3 Independent auditor's report to the shareholders 6 Profit and loss account 8 Balance sheet 9 Cash flow statement 10 Accounting policies 12 Notes to the financial statements 14 The following page does not form part of the financial statements Detailed profit and loss account 19 The board of directors J.C.W. De Thierry C.P. Latilla-Campbell C. Schaffalitzky de Muckadell Company secretary City Group Plc Registered office 30 City Road London EC1Y 2AG Auditor Edwards Veeder (UK) Limited Chartered Accountants & Statutory Auditor Block E, Brunswick Square Union Street Oldham OL1 1DE Bankers Lloyds TSB Bank plc 39 Threadneedle Street London EC2R 8PT Solicitors Edwin Coe 2 Stone Buildings Lincoln's Inn London WC2A 2TH BUSINESS REVIEW PRINCIPAL ACTIVITIES AND BUSINESS REVIEW The principal activity of the company during the year was that of investment holding company. The results for the year are a reflection of the minimal cost of keeping your company administered whist searching for suitable opportunities. The actual costs were 45,948 (2013: 55,341) added to currency losses of 22,111 (2013: investment and currency income of 39,822). Your Directors have maintained most funds in US dollars as that is the currency they anticipate any deal is likely to be conducted in. The Directors have devoted considerable effort on two possible projects during the year. One has not yet matured into a viable investment prospect and the other was thought to be unsuitable for both parties. As always we continue to search actively for a viable opportunity for the business. Please note that your Directors will continue to waive their fees until a suitable investment opportunity is identified. PRINCIPAL RISKS AND UNCERTAINTIES The principal risks and uncertainties facing the company are general and economic risks as follows: The Company is undertaking no significant activities while it seeks an appropriate and viable investment opportunity. It incurs minimal costs, the company has an exposure to Sterling US $exchange rates as it holds US$balances as this is the most likely currency in which a transaction will be funded, however as the company reports in Sterling unrealized foreign exchange losses may arise from a change in the exchange rate of Sterling and US$. The company's financial instruments comprise cash held in current accounts and fixed short term deposits. The main purpose of financial instruments is to raise finance for the operations of the company's business. The main risk arising from the company's financial instruments are interest rate, currency exchange rate and liquidity risk. Liquidity risk Funds are intended to finance the future development and growth of the company and the effective management of these funds is based upon policies determined by the Board. Funds are invested through the use of short-term deposits. Signed by order of the directors CITY GROUP PLC Company Secretary Approved by the directors on 29th May 2014 The directors present their report and the financial statements of the company for the year ended 28 February 2014. RESULTS AND DIVIDENDS The loss for the year amounted to 64,969. The directors have not recommended a dividend. FINANCIAL INSTRUMENTS Details of the company's financial risk management objectives and policies are included in note 8 to the accounts. THE DIRECTORS AND THEIR INTERESTS IN THE SHARES OF THE COMPANY The directors who served the company during the year together with their beneficial interests in the shares of the company were as follows: ------------------ Ordinary Shares of 0.005 each ---------------------------------------------------------- At 28 February 2014 At 1 March 2013 ---------------------------------------- or later date of appointment -------------------- J.C.W. De Thierry 2,300,000 2,300,000 C.P. Latilla- Campbell 4,190,442 4,190,442 C. Schaffalitzky de Muckadell 100,000 100,000 ---------------------------------------- ---------------------------------------- C. Schaffalitzky de Muckadell was appointed as a director on 20 August 2013. V. Chitalu retired as a director on 20 August 2013. SUBSTANTIAL INTERESTS At the date of the report the Company had been notified that, other than directors, the following were interested in 3% or more of the issued share capital of the Company: No. Ordinary Shares % Somers Investments Limited 14,250,000 29.48 Credit Suisse Client Nominees (UK) Limited 7,500,000 15.52 Alan Mason 3,293,484 6.81 Loeb Aron & Co. Limited 1,500,000 3.10 Somers Investments Limited is controlled by a discretionary trust, of which C.P. Latilla-Campbell is a potential beneficiary. DIRECTORS' RESPONSIBILITIES The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that year. In preparing these financial statements, the directors are required to: -- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent; -- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; -- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. STRATEGIC REPORT In accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 the information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 has been included in the company's Strategic Report. AUDITOR Edwards Veeder (UK) Limited are deemed to be re-appointed under section 487(2) of the Companies Act 2006. Each of the persons who is a director at the date of approval of this report confirm that: -- so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware; and -- each director has taken all steps that they ought to have taken as a director to make themself aware of any relevant audit information and to establish that the company's auditor is aware of that information. Registered office: Signed by order of the directors 30 City Road London EC1Y 2AG CITY GROUP PLC Company Secretary Approved by the directors on 29th May 2014 We have audited the financial statements of ZimNRG PLC for the year ended 28 February 2014. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company's shareholders, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's shareholders those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's shareholders as a body, for our audit work, for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: -- give a true and fair view of the state of the company's affairs as at 28 February 2014 and of its loss for the year then ended; -- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and -- have been prepared in accordance with the requirements of the Companies Act 2006. OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion: -- the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and -- the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: -- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or -- the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or -- certain disclosures of directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit. MR ANDREW WADSWORTH (Senior Statutory Auditor) For and on behalf of EDWARDS VEEDER (UK) LIMITED Block E, Brunswick Square Chartered Accountants Union Street & Statutory Auditor Oldham OL1 1DE ------------------------ ---------------------------------------------------------------------------- TURNOVER - - ---------------------------------------------------------------------------- Administrative expenses 68,059 15,519 Other operating income (1,463) (2,986) ------------------------ OPERATING LOSS 1 (66,596) (12,533) Profit on disposal of current asset investments 1,476 323 ------------------------ (65,120) (12,210) Interest receivable 151 842 ------------------------ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (64,969) (11,368) Tax on loss on ordinary activities - - ---------------------------- LOSS FOR THE FINANCIAL YEAR (64,969) (11,368) Balance brought forward (660,400) (649,032) ---------------------------- Balance carried forward (725,369) (660,400) ---------------------------- ---------------------------- Earnings per share (pence) Basic 3 (0.13) (0.02) ------------------------------ ------------------------------ Diluted 3 (0.12) (0.02) ------------------------------ ------------------------------ All of the activities of the company are classed as continuing. The company has no recognised gains or losses other than the results for the year as set out above. CURRENT ASSETS Debtors 4 15,999 17,414 Investments 5 - 145,226 Cash at bank and in hand 176,777 95,412 ------------ ------------ 192,776 258,052 CREDITORS: Amounts falling due within one year 6 9,225 9,532 ------------ ------------ NET CURRENT ASSETS 183,551 248,520 ------------------------ TOTAL ASSETS LESS CURRENT LIABILITIES 183,551 248,520 ------------------------ ------------------------ CAPITAL AND RESERVES Called-up equity share capital 10 241,660 241,660 Share premium account 11 667,260 667,260 Profit and loss account (725,369) (660,400) -------------------------- SHAREHOLDERS' FUNDS 12 183,551 248,520 -------------------------- -------------------------- These accounts were approved by the directors and authorised for issue on ........................, and are signed on their behalf by: ---------------------------- C.P. LATILLA-CAMPBELL Company Registration Number: 05714562 NET CASH OUTFLOW FROM OPERATING ACTIVITIES (46,417) (33,073) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 151 842 -------------- -------------- NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 151 842 CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Disposal of current asset investments 149,530 14,474 Payment to acquire other current asset investments (5,064) (14,839) -------------- -------------- NET CASH INFLOW/(OUTFLOW) FOR CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 144,466 (365) ---------------------------- INCREASE/(DECREASE) IN CASH 98,200 (32,596) ---------------------------- ---------------------------- RECONCILIATION OF OPERATING LOSS TO NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES 2014 2013 Operating loss (66,596) (12,533) Decrease in debtors 1,415 18,008 (Decrease)/increase in creditors (307) 93 Loss/(gain) on foreign currency retranslation on debt 16,835 (4,095) Fair value adjustment of current asset investments 62 (28,141) Exchange gain on valuation of current asset investments 2,174 (6,405) ------------------------------ Net cash outflow from operating activities (46,417) (33,073) ------------------------------ ------------------------------ RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2014 2013 Increase/(Decrease) in cash in the period 98,200 (32,596) Translation differences (16,835) 4,095 ------------------------------ Movement in net funds in the period 81,365 (28,501) ------------------------------ ------------------------------ Net funds at 1 March 2013 95,412 123,913 ------------------------------ Net funds at 28 February 2014 176,777 95,412 ------------------------------ ------------------------------ ANALYSIS OF CHANGES IN NET FUNDS Exchange At 28 Feb At 1 Mar 2013 Cash flows movement 2014 Net cash: Cash in hand and at bank 95,412 98,200 (16,835) 176,777 ---------------------------------------------------- Net funds 95,412 98,200 (16,835) 176,777 ---------------------------------------------------- ---------------------------------------------------- Basis of accounting The financial statements have been prepared under the historical cost convention, modified to include the revaluation of financial instruments and in accordance with applicable accounting standards. Investments Fixed asset investments are initially recorded at cost. Investments are reviewed annually for impairment and if any permanent diminution in value is recognised, then are written down to net realisable value. Deferred taxation Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions: Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold. Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Foreign currencies Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non- monetary items that are measured at historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items and on the retranslation of monetary items are taken to the profit and loss account. Exchange differences arising on non-monetary items, carried at fair value, are included in the profit and loss account, except for the differences arising on the retranslation of non-monetary items in respect of which gains and losses are recorded in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity. Financial instruments Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability. Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity. Investments All investments are initially recorded at cost, being the fair value of the consideration given and including acquisition costs associated with the investment. All purchases and sales of investments are recognised using trade date accounting. After initial recognition, investments, which are classified as held for trading and available-for-sale, are measured at fair value. Gains or losses on investments held for trading are recognised in the profit and loss account. Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is disposed of or until its value is impaired, at which time the cumulative gain or loss previously reported in equity is included in the profit and loss account. Investments are fair valued using quoted market prices, independent appraisals, discounted cash flow analysis or other appropriate valuation models at the balance sheet date. Cash and cash equivalents Cash and cash equivalents are included in the balance sheet at cost. Cash and cash equivalents comprise cash at bank and cash in hand and short term deposits with an original maturity of 3 months or less. 1. OPERATING LOSS Operating loss is stated after charging/(crediting): 2014 2013 Directors' remuneration - - Losses on financial assets/liabilities at fair value through the profit and loss 62 (28,141) Net loss/(profit) on foreign currency translation 22,111 (11,681) Auditor's remuneration - audit of the financial statements 7,016 6,710 Auditor's remuneration - other fees 600 822 ------------------------------ ------------------------------ 2014 2013 Auditor's remuneration - audit of the financial statements 7,016 6,710 ------------------------------ ------------------------------ Auditor's remuneration - other fees: - Taxation services 600 570 - Payroll services - 252 ------------------------------ 600 822 ------------------------------ ------------------------------ 2. PARTICULARS OF EMPLOYEES The average number of staff employed by the company during the financial year amounted to: 2014 2013 No No Number of management staff 3 3 ------------------------------ ------------------------------ No salaries or wages have been paid to employees, including the directors, during the year. 3. EARNINGS PER SHARE The basic earnings per ordinary share is calculated by dividing profit for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year. The diluted earnings per ordinary share is calculated by dividing profit for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year (after adjusting both figures for the effect of dilutive potential ordinary shares). The calculation of basic and diluted earnings per ordinary share is based upon the following data: Earnings 2014 2013 Earnings for the purposes of basic earnings per share (64,969) (11,368) ------------------------------ Earnings for the purposes of diluted earnings per share (64,969) (11,368) ------------------------------ ------------------------------ Number of shares 2014 2013 No No Basic weighted average number of shares 48,332,003 48,332,003 Dilutive potential ordinary shares: Share options granted 4,000,000 4,000,000 ------------------------------ Weighted average number of shares for the purposes of diluted earnings per share 52,332,003 52,332,003 ------------------------------ ------------------------------ There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before the completion of these financial statements. 4. DEBTORS 2014 2013 Other debtors 14,563 16,349 Prepayments and accrued income 1,436 1,065 ------------------------------ 15,999 17,414 ------------------------------ ------------------------------ 5. INVESTMENTS 2014 2013 Other investments - 145,226 ------------------------------ ------------------------------ Other investments consist of listed investments held for trading which have been valued at fair value, the quoted market price, at the year end. 6. CREDITORS: Amounts falling due within one year 2014 2013 Trade creditors 1,554 2,533 Accruals and deferred income 7,671 6,999 ------------------------------ 9,225 9,532 ------------------------------ ------------------------------ 7. DEFERRED TAXATION No provision has been made in the financial statements and the amounts unprovided at the end of the year are as follows: 2014 2013 Tax losses available 122,472 116,013 ------------------------------ ------------------------------ 8. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The company's financial instruments comprise cash held in current accounts and fixed short term deposits. The main purpose of financial instruments is to raise finance for the operations of the company's business. The main risk arising from the company's financial instruments are interest rate, currency exchange rate and liquidity risk. Liquidity risk Funds are intended to finance the future development and growth of the company and the effective management of these funds is based upon policies determined by the Board. Funds are invested through the use of short-term deposits. Fair values of financial assets and liabilities The fair value of the company's financial instruments was not materially different from the book value. 9. RELATED PARTY TRANSACTIONS There is no individual with ultimate overall control of the company. C. Latilla-Campbell is a director and shareholder of this company and also a director and 100% shareholder of London Finance & Investment Corporation Limited. Accountancy charges incurred by this company of 4,200 (2013 - 4,498) represent proportional recharges in respect of the time spent on ZimNRG business by the LFIC company accountant. 10. SHARE CAPITAL Authorised share capital: 2014 2013 150,000,000 Ordinary shares of 0.005 each 750,000 750,000 ------------------------------ ------------------------------ Allotted, called up and fully paid: 2014 2013 No No Ordinary shares of 0.005 each 48,332,003 241,660 48,332,003 241,660 ------------------------------------------------ ------------------------------------------------ At the year end there were 4,000,000 (2012 - 4,000,000) share options held by directors at an exercise price of 0.02. 11. SHARE PREMIUM ACCOUNT There was no movement on the share premium account during the financial year. 12. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2014 2013 Loss for the financial year (64,969) (11,368) Opening shareholders' funds 248,520 259,888 ------------------------------ Closing shareholders' funds 183,551 248,520 ------------------------------ ------------------------------ The following page does not form part of the statutory financial statements which are the subject of the independent auditor's report on pages 6 to 7. OVERHEADS Travel 1,676 7,196 Entertaining 350 - Telephone and internet 18 - Printing, postage and stationery 130 210 Books and magazines - 452 Sundry expenses - 25 Legal and professional fees 16,472 16,402 Consultancy fees 9,138 9,712 Share register fees 4,980 4,616 Portfolio management fees 869 3,195 Accountancy fees 4,200 6,260 Auditors remuneration 7,616 6,710 Fair value assets through P&L 62 (28,141) Bank charges 437 563 Foreign currency gains/losses 22,111 (11,681) --------------- --------------- 68,059 15,519 ------------------------------ (68,059) (15,519) OTHER OPERATING INCOME Investment dividend income receivable 1,463 2,986 ------------------------------ OPERATING LOSS (66,596) (12,533) Profit on disposal of current asset investments 1,476 323 ------------------------------ (65,120) (12,210) Investments debenture interest receivable 151 842 ------------------------------ (64,969) (11,368) ------------------------------ LOSS ON ORDINARY ACTIVITIES (64,969) (11,368) ------------------------------ ------------------------------


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