Unaudited Abridged Consolidated Financial Statements for the six months ended 31 March 2014

DIRECTORS: Dr. S.H. Makoni, H.N. Macklin, M.S. Gurira, M.S. Kretzmann, C.C.M. Tambo, N.H. Kretzmer
Abridged Consolidated Statement of Comprehensive Income
for the six months ended 31 March 2014
6 Months 6 Months 12 Months
March March September
Notes 2014 2013 2013
USD USD USD
Revenue 16 569 360 15 180 510 28 601 573
Cost of Sales (11 466 221) (10 606 018) (19 908 032)
Gross Profit 5 103 139 4 574 492 8 693 541
Sundry revenue 160 428 171 781 435 324
Operating expenses (4 421 810) (4 125 871) (7 970 918)
Operating Profit 841 757 620 402 1 157 947
Finance cost (288 458) (312 646) (554 570)
Profit before taxation 553 299 307 756 603 377
Taxation 4 (142 477) (79 247) (137 475)
Profit after taxation 410 822 228 509 465 902
Other comprehensive income:
Exchange difference on translating
foreign operations (58 932) (110 867) 36 432
Income tax relating to components of other
comprehensive income 43 757 22 702 (19 352)
Other comprehensive income for the period,
net of tax (15 175) (88 165) 17 080
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD 395 647 140 344 482 982
Earnings per share
Basic earnings per share (in cents) 0.11 0.06 0.12
Diluted earnings per share (in cents) 0.11 0.06 0.12
6 Months 6 Months 12 Months
March March September
Notes 2014 2013 2013
USD USD USD
Assets
Property, plant and equipment 5 1 352 415 1 373 949 1 320 820
Investment property 6 3 910 000 4 263 959 3 910 000
5 262 415 5 637 908 5 230 820
Current Assets
Inventories 7 11 463 216 8 354 029 9 275 069
Trade and other receivables 8 2 328 072 2 644 571 1 779 395
Cash and cash equivalents 9 133 929 753 323 331 447
13 925 217 11 751 923 11 385 911
Total Assets 19 187 632 17 389 831 16 616 731
Equity and Liabilities
Share capital 10 38 366 39 078 38 670
Foreign translation reserve (4 351) (94 421) 10 824
Derived equity 7 588 016 7 964 712 7 638 890
Retained earnings 726 680 78 465 315 858
8 348 711 7 987 834 8 004 242
Non Current Liabilities
Deferred taxation 1 206 560 1 321 798 1 192 999
Long term borrowings 12 1 094 146 420 051 1 046 241
2 300 706 1 741 849 2 239 240
Current Liabilities
Trade and other payables 11 4 074 023 3 782 873 3 615 337
Borrowings 12 4 408 290 3 827 394 2 754 819
Taxation 55 902 49 881 3 093
8 538 215 7 660 148 6 373 249
Total equity and liabilities 19 187 632 17 389 831 16 616 731
Abridged Consolidated Statement of Financial Position
as at 31 March 2014
Abridged Consolidated Statement of Cash Flows
for the six months ended 31 March 2014
6 Months 6 Months 12 Months
March March September
Notes 2014 2013 2013
USD USD USD
Operating cashflow before re-investment in
working capital changes 974 079 750 647 1 551 572
Decrease in working capital (2 572 276) (628 988) (923 485)
Operating cash flow (1 598 197) 121 659 628 087
Income taxes paid (76 110) (48 693) (191 371)
Net cash (utilised)/generated in operations (1 674 307) 72 966 436 716
Net cash utilised in investing activities (173 409) (238 424) (343 424)
Net cash generated from/(utilised in) financing activities 1 650 198 826 410 (97 432)
Net (decrease)/increase in cash and cash
equivalents (197 518) 660 952 (4 140)
Net cash and cash equivalents at beginning of period 331 447 (1 162 567) 335 587
Cash and cash equivalents at end of period 133 929 (501 615) 331 447
COMMENTARY
The group had a substantially improved six months to 31 March 2014, when compared to the same
period last year, despite the worsening macro economic conditions in Zimbabwe. These results are
confirmation that we have selected the right strategies and they reflect the tireless and dedicated
efforts by management and staff to make things work, irrespective of the external environment.
FINANCIAL PERFORMANCE
Turnover at $16.6m was 9% up on the same period last year while gross profit rose 10.9% to $5.1m.
Expenses for the period rose by 7.3% to $4.4m mainly driven by the expansion of retail capacity in line
with group strategy. EBIT rose substantially from $620k to $842k. Interest declined to $288k, which
resulted in an 80% increase in profit before tax to $553k. A similar increase in taxation leads to
attributable earnings increasing from $229k to $411k.
Although borrowing levels fluctuate continuously, there has been an increase in borrowings to fund
stock in line with the expansion program. This process is carefully managed to ensure that any
increase in borrowings results in a substantial increase in return on capital.
REVIEW OF OPERATIONS
Trading
Trading now constitutes the bulk of the group's business operations and most resources are being
directed at retail. We have continued to expand the Electrosales Hardware brand by increasing the
number of branches, the size of the branches and the range of products on offer. We believe that we
are now the market leader in hardware retail in Zimbabwe with 14 branches, nationwide.
Non-retail trade, which includes sales to industry, construction, contractors and other re-sellers
remains an important part of the group's trading operations but remains severely constrained by the
poor state of the economy in general and businesses in the formal sector.
Engineering
Our engineering operations contributed to profits during the period under review, however this
contribution has become even less significant in the overall picture. The operations are focussed on
the manufacture and service of products traded by the group and, as such, remain an important part
of the group.
OUTLOOK
We are confident that our strategic direction is correct under the prevailing circumstances. The fact
that we have been able to grow both topline and bottom line performance in the current economic
environment, gives us confidence to continue to build on the base that we have established and we
believe that this will substantially increase shareholder value.
DIVIDEND
Given the continuing need for working capital required for growth, the Board has considered it
prudent not to declare a dividend for the half year ended 31 March 2014.
INTRODUCTION
Abridged Statements of Changes in Equity
for the six months ended 31 March 2014
Equity Derived Foreign Retained Total
capital Equity Translation earnings
Reserve
USD USD USD USD USD
Balance at 1 October 2013 38 670 7 638 890 10 824 315 858 8 004 242
Share buyback (304) (50 874) - - (51 178)
Total comprehensive income for the period - - (15 175) 410 822 395 647
Balance at 31 March 2014 38 366 7 588 016 (4 351) 726 680 8 348 711
Balance at 1 October 2012 39 441 7 728 948 (6 256) (150 044) 7 612 089
Total comprehensive income for the period - - (88 165) 228 509 140 344
Share buyback (363) 235 764 - - 235 401
Balance at 31 March 2013 39 078 7 964 712 (94 421) 78 465 7 987 834
Balance at 1 October 2012 39 441 7 728 948 (6 256) (150 044) 7 612 089
Total comprehensive income for the period - - 17 080 465 902 482 982
Share buyback (771) (90 058) - - (90 829)
Balance at 30 September 2013 38 670 7 638 890 10 824 315 858 8 004 242
6 Months 6 Months 12 Months
March March September
2014 2013 2013
USD USD USD
9 Cash and cash equivalents
For the purposes of statement of cash flows, cash
and cash equivalents include cash on hand and in
banks.
Bank and cash balances 133 929 753 323 331 447
10 Share capital
Authorised share capital
500 000 000 ordinary shares at
USD 0.0001 per share 50 000 50 000 50 000
Issued and fully paid
The movement in ordinary share capital is shown
below:
Ordinary share capital 1 October 38 670 39 441 39 441
Share buyback ( 304) ( 363) ( 771)
38 366 39 078 38 670
Number of issued ordinary shares at 1 October 386 708 069 394 412 217 394 412 217
Share buyback (3 046 502) (4 087 529) (7 704 148)
Number of issued ordinary shares at end of period 383 661 567 390 324 688 386 708 069
Percentage bought back 1% 1% 2%
11 Trade and other payables
Trade 1 129 879 1 437 788 823 255
Other 2 944 144 2 345 085 2 792 082
4 074 023 3 782 873 3 615 337
12 Borrowings
Long term borrowings 1 094 146 420 051 1 046 241
Short term borrowings
Bankers acceptances 2 848 000 2 572 456 1 871 968
Bank overdraft 1 560 290 1 254 938 882 851
4 408 290 3 827 394 2 754 819
Borrowings amounting to US$2 848 000 are secured against stocks and debtors, while the rest
are unsecured.
13 Financial risk management objectives and policies
The Groups principal financial liabilities comprise, loans payable, bank overdrafts and trade
payables. The main purpose of these financial liabilities is to raise finance for the Groups
operations. The Group has various financial assets such as trade receivables and cash and
short term deposits, which arise directly from its operations. Exposure to credit, interest rate and
currency risk arises in the normal course of Groups business and these are main risks arising
from the Groups financial instruments.
The Board of Directors reviews and agrees policies for managing each of these risks which are
summarised below:
Credit risk
Management has a credit policy in place and the exposure to credit risk is monitored on an
ongoing basis. The Group assumes foreign credit risk only on customers approved by the
Board and follows credit review procedures for local credit customers.
Interest rate risk
The Groups exposure to the risk of changes in market interest rates relates primarily to the
Groups long and short term debt obligations and bank overdrafts. The Groups policy is to
manage its interest cost using a mix of fixed and variable rate debts.
Currency risk
The Group is exposed to foreign currency risk on transactions that are denominated in a
currency other than the United States Dollar. The currency giving rise to this risk is primarily the
Zambian Kwacha.
In respect of all monetary assets and liabilities held in currencies other than the United States
Dollar, the Group ensures that the net exposure is kept to an acceptable level, by buying or
selling foreign currencies at spot rates where necessary to address short-term imbalances.
The Groups exposure to foreign currency changes is not significant.
By Order of the Board
MS Gurira
Group Company Secretary
13 June 2014
Unaudited Abridged Consolidated Financial Statements for the six months ended 31 March 2014 (continued)
DIRECTORS: Dr. S.H. Makoni, H.N. Macklin, M.S. Gurira, M.S. Kretzmann, C.C.M. Tambo, N.H. Kretzmer
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Notes to the interim consolidated financial statements
for the six months ended 31 March 2014
1 General information
Powerspeed Electrical Limited, the Groups parent company, is a limited liability company
incorporated and domiciled in Zimbabwe. Its registered office and principal place of business is
Stand 17568, corner Cripps Road/Kelvin North, Graniteside, Harare, Zimbabwe. Powerspeed
Electrical Limiteds shares are listed on the Zimbabwe Stock Exchange.
2 Statement of compliance
The abridged interim consolidated financial statements are based on statutory records
maintained under the historic cost convention. These interim financial statements were
approved for issue by the Board on Thursday 29 May 2014.
3 Basis of preparation
The interim consolidated financial statements for the six months ended 31 March 2014 have
been prepared in accordance with IAS 34 Interim financial reporting. They do not include all of
the information required for full annual financial statements and should be read in conjunction
with the audited financial statements for the year ended 30 September 2013, which have been
prepared in accordance with International Financial Reporting Standards.
In preparing the interim consolidated financial statements, the significant judgements made by
management in applying the companys accounting policies and the key sources of estimation
uncertainty were the same as those applied to the audited annual financial statements as at
30 September 2013.
6 Months 6 Months 12 Months
March March September
2014 2013 2013
USD USD USD
4 Income tax recognised
Current 128 921 79 247 155 788
Deferred 13 556 - (18 313)
142 477 79 247 137 475
5 Property, plant and equipment
Cost or Valuation 2 764 084 2 625 823 2 625 823
Additions 188 099 282 454 464 800
Disposals (29 000) (46 153) (326 539)
Depreciation for the period (1 570 768) (1 488 175) (1 443 264)
Carrying amount at end of period 1 352 415 1 373 949 1 320 820
6 Investment property
Carrying amount at the beginning 3 910 000 4 263 959 3 910 000
Carrying amount at the end 3 910 000 4 263 959 3 910 000
At 31 March 2014, investment property comprised:
Land and buildings located in Ruwa, Gweru,
Bulawayo, Chiredzi and Chinhoyi. The fair value is
based on a Directors valuation done on
30 September 2013. The fair value was determined
based on current prices in an active market for
similar property in the same location and condition.
The properties are leased out on operating leases.
7 Inventories
Finished goods 10 188 499 7 590 789 7 923 893
Raw materials 256 946 843 189 269 997
Work in progress 106 875 71 222 75 428
Goods in transit 1 367 272 631 153 1 400 119
Allowance for obsolete inventory (456 376) (782 324) (394 368)
11 463 216 8 354 029 9 275 069
8 Trade and other receivables
Trade 1 516 191 2 109 442 1 226 742
Allowance for credit losses (149 115) (256 263) (149 116)
1 367 076 1 853 179 1 077 626
Other 960 996 791 392 701 769
2 328 072 2 644 571 1 779 395