First Mutual Properties : 2023 FY Financials & Audit Report

Acknowledgements

Overview of Operating Environment

The global macroeconomic conditions remained largely uncertain due to multiple shocks. Inflationary pressures and supply chain disruptions had a spill-over effect on the local economy. As a result, the local US dollar inflation increased.

Despite the forgoing, Zimbabwe's economic situation was relatively stable on the back of tight monetary measures adopted by the authorities. Sustaining macroeconomic stability will go a long way in stimulating the demand for supporting infrastructure including properties among others.

The Zimbabwe dollar depreciated by 516% against the US dollar to ZWL671 in December 2022 from ZWL109 last year.

Annual inflation rose to 244% at year-end from 61% in December 2021. However, inflationary pressures started to recede during the last quarter of the year due to monetary policy interventions by the authorities to limit money supply growth and "speculative" foreign currency activities.

Management continued to closely monitor the business environment and adapted its strategies to protect the business from the exogenous shocks as demonstrated by the performance achieved during the year.

Property Market long-term impacts

The property market fundamentals were mixed during the year. The leasing market for commercial space was the most active segment, with buoyant activity in the retail and industrial sectors. However, the office segment was subdued because of the need by people to re-adjust their newly-formed working habits of "working from home" to "back to the office". The CBD office experienced the highest vacancy rates forcing most owners to re-model their properties to cater for the Small and Medium Enterprises (SMEs) sector. Further, the retail, industrial and residential sectors enjoyed relatively huge activity during the year. In contrast, commercial property transactions were low due to huge investment requirements. Limited commercial property developments seen during the period under review have largely been self- funded, and are being used as a hedge against currency and inflation risks as well as possible future rental increases.

The industry grappled with "twin evils" of rising defaults on lease obligations and construction cost inflation. Management continues to closely manage these risks given their potentially huge impact on the company's strategy.

Business performance overview

The Group's inflation adjusted Net Property Income after administration expenses was ZWL140.5 million (FY 2021: ZWL589.4 million) despite a 42% growth in inflation adjusted revenue to ZWL2.9 billion (FY 2021: ZWL2.0 billion). In historical terms, revenue grew by 342% from ZWL475.4 million in December 2021 to ZWL2.1 billion largely due to the repricing of rentals and relatively good occupancy that stood at 85.5%. Foreign and local currency rental mix was 70% to 30% at the end of the year. This has enabled the Company to preserve value from foreign currency and inflation risks while creating capacity to finance its on-going capital and growth expenditure programs from internal resources.

Collections decreased to 72% from 82% in the prior year particularly on the back of the country's contractionary policies.

The business strives to maintain buildings in lettable and safe conditions. Against this strategic imperative, a total of ZWL528 million was deployed towards maintenance of buildings. The Company will continue to commit resources towards enhancing the quality of its product offering.

Property valuations

An independent property valuation conducted by Knight Frank Zimbabwe as at 31 December 2022 valued the property portfolio at ZWL 109.3 billion (FY 2021: ZWL 22 billion), representing a growth of 397%.

Developments

The Group is at early construction stages of a new office block in Arundel Office Park. The contractor is already on site, and was working on pile foundations in the basement at the end of the year. The project is expected to be completed by December 2023.

Following the successful completion of the construction of Mbare retail warehouse, the premises were handed over to the tenant (Gain Cash and Carry) during the year. The tenant started operations in July 2022.

Various projects to provide university students accommodation are being pursued. At this stage, the most advanced one involves constructing a 430-bed facility in Chinhoyi, which started in October 2022. First Mutual Properties is a co-investor and project manager in the project with other pension funds. The project is expected to be completed in November 2023.

Sustainability

The year 2022 saw First Mutual Properties making significant progress on the sustainability journey through harnessing renewable energy and improving energy efficiency of its properties. Some of the notable green projects implemented during the year include the solar system installation at the head office, replacement of all traditional light bulbs with low energy consumption LED lights and erection of waste management centres. FMP will pursue more of such initiatives going forward as we strive to manage our business sustainably.

FMP was conferred the prestigious Overall Best Corporate Governance award at the Chartered Governance and Accountancy Institute in Zimbabwe Awards 2022. The Company also received the third overall prize on Best Board Practices and Best Shareholder Treatment. These accolades reaffirm the Company's efforts to improve corporate governance and sustainability practices.

Dividend

At a meeting held on 24 February 2023, your Board resolved that a final dividend of ZWL 175.4 million being 14.1821

ZWL cents per share and an additional USD150,000 (being 0.011818 United States cents per share) be declared from the profits of the Company for the fourth quarter ended 31 December 2022. This brings the cumulative dividend for the year ended 31 December 2022 to ZWL 477.8 million being 38.5786 ZWL cents per share and USD 400,000 being 0.03229 United States Cents per share.

The dividend will be payable on or about 26 April 2023 to all shareholders of the Company registered at close of business on 14 April 2023. The shares of the Company will be traded cum-dividend on the Zimbabwe Stock Exchange up to

11 April 2023 and ex-dividend as from 12 April 2023.

Business Outlook

The Company remains focused on delivering on its strategy despite the environmental uncertainty caused by the global geopolitical tensions as well as a volatile and complex economic environment. This involves developing a sustainable and well-diversified business portfolio, delivering on new projects within budget, schedule and acceptable quality as well as creating value for all our stakeholders.

The FMP management and staff have continued to deliver favourable results in the face of a challenging business environment. I would like to thank them all for their invaluable commitment.

On behalf of the board, I would also want to thank our key stakeholders and my fellow board members for their immense contribution.

Consolidated Abridged Statement of Financial Position

1 653

8 672

1 197

1 198

Consolidated Abridged Statement of Comprehensive Income

for the year ended 31 December 2022

Revenue Property expenses Provision for credit losses Net property income (NPI)

Employee related expenses Other expenses

NPI after admin expenses

Fair value adjustment - investment properties

Net monetary loss Finance income

Share of profit of associate Other income

Profit before income tax Income tax expense Profit for the year

Other comprehensive income for the year Total comprehensive profit for the yearAttributable to: -Owners of the parent -Non controlling interest Total profit for the year

INFLATION ADJUSTED HISTORICAL COST Audited Audited Unaudited Unaudited

*Restated *RestatedNote

31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021

• ZWL 000 ZWL 000 ZWL 000 ZWL 000

• 15 2 900 532

• 16 (1 842 422)

  (125 915) 932 195 (325 751) (465 943) 140 501

• 18 33 574 174 (1 172 611)

• 19 370 166

• 7 70 306

• 20 1 811 473

• 17 34 794 009

• 21 (3 213 761) 31 580 248

2 044 479 (997 662)

2 101 573 (1 366 076)

475 465 (213 772)

(83 869) 962 948 (180 544) (193 047) 589 357

(125 915) 609 582 (286 238) (346 002)

(22 658)

(24 398) 237 295 (46 078) (54 250) 136 967

• 23 782 301

  (330 165)

  87 405 250 -

  12 629 754

  -

  73 835 - 305 161

  310 442

  18 514

  114 622

  -

• 24 420 489 (4 444 630) 19 975 859

89 103 774 (9 501 073) 79 602 701

1 296 118

96 776 12 882 011 (1 798 912) 11 083 099

- 31 580 248

- 19 975 859

- 79 602 701

- 11 083 099

31 580 248 - 31 580 248

19 975 859 - 19 975 859

79 602 701 - 79 602 701

11 083 099 - 11 083 099

Basic earnings per share (ZWL cents) 2 554 1 615 6 437 896

Diluted earnings per share (ZWL cents) 2 551 1 613 6 429 895

Headline earnings per share (ZWL cents) 2 554 1 615 6 437 896

Weighted average number of shares in issue

1 236 557 948 1 236 791 272 1 236 557 948 1 236 791 272

* Reclassification of employee related expenses and other expenses to property expenses was done and disclosed in note 16.

Consolidated Statement of Changes in Equity

AUDITED INFLATION ADJUSTED Attributable to owners of the parentTotal

for the year ended 31 December 2022

UNAUDITED HISTORICAL COST Attributable to owners of the parent

Consolidated Abridged Statement of Cash Flows

for the year ended 31 December 2022

*Net cash flow from financing activities is comprised of dividends paid out and repurchase of treasury shares.

Notes to the Consolidated Abridged Financial Statements

for the year ended 31 December 2022

• 1 Corporate information

  First Mutual Properties Limited is a public company incorporated and domiciled in Zimbabwe and its shares are publicly traded on the Zimbabwe Stock Exchange. The principal activities of the Group are property investment, development and management. The consolidated financial statements of the Group for the twelve months ended 31 December 2022 were authorised for issue in accordance with a resolution of the directors at a meeting held on 24 February 2023.

• 2 Statement for compliance

  The Group's financial statements have been prepared in accordance with International Financial Reporting Standard ("IFRS") as issued by the International Accounting Standards Board ("the IASB"), International Financial Reporting Interpretations Committee ("IFRIC") as issued by the IFRS Interpretations Committee ("IFRS IC") and in a manner required by the Zimbabwe Companies and Other Business Entities Act (Chapter 24:31). The financial statements are based on statutory records that are maintained under the historical cost convention except for investment properties and equity securities at fair value through profit or loss that have been measured on a fair value basis.

  Auditor's statement

  The consolidated inflation adjusted financial statements from which this abridged version has been extracted, have been audited by Ernst & Young Chartered Accountants (Zimbabwe). A qualified opinion has been issued as a result of the impact of the prior period non-compliance with the requirements of International Accounting Standard 8 "Accounting Policies, Changes in Accounting Estimates and Errors", and the consequential impact of applying International Accounting standard 29 "Financial Reporting in Hyperinflationary Economies" on incorrect base numbers. The audit report also includes a key audit matter with regards to the valuation of investment properties in the current year. The auditor's report is available for inspection at the Group's registered office.

  The Audit Partner for this engagement was Fungai Kuipa (PAAB Practising certificate number 335).

Inflation Adjustments

For the purpose of fair presentation in accordance with International Accounting Standard 29 "Financial Reporting in Hyper Inflationary Economies" the financial statements have been restated for changes in the general purchasing power of the ZWL and appropriate adjustments have been made. The restatement has been calculated by means of conversion factors derived from the month on month Consumer Price Index (CPI) prepared by the Zimbabwe Statistical Agency. All items in the statement of comprehensive income are restated by applying the relevant monthly conversion factors. The conversion factors used are as follows:

3

The principal accounting policies adopted in the presentation of these financial statements are consistent with those of the previous financial year. However the Group changed the classification of staff related expenses and other offices expenses which are directly associated with the management of properties from administration expenses to property expenses in line with regional listed property companies. The reclassification resulted in increase in property expenses and decrease in administration expenses with no effect on profit for the period.

4

Reporting period and currency ("ZWL")

The reporting period is 1 January 2022 to 31 December 2022. The financial statements are presented in Zimbabwean dollars (ZWL) being the functional and reporting currency of the primary economic environment in which the Group operates. There was no change in the functional currency and reporting currency of the Group from the previous financial period. The Group used the RBZ auction rate to translate all transactions done in foreign currency to Zimbabwean dollars (ZWL).

5

Going concern assumption

The Directors have assessed the ability of the Group and Company to continue operating as going concerns and believe that the preparation of these abridged financial statements on a going concern basis is appropriate. Based on the Unaudited Historical financial performance for the year of 2022. The business also continues to implement futuristic plans in response to the market trends to ensure sustainable earnings, with investments planned for Arundel Office Park expansion and participation in FMHL Group projects, retail land acquisitions and tenant driven expansion initiatives. In addition, borrowing capabilities continue to be pursued due to the positive cash flow generation. These all provide evidence of business continuity and the thrust to implement strategic plans and targets. It is to this effect that First Mutual Properties Limited financial statements will continue to be prepared under the going concern basis.

6

Fair value measurement

The Group's fair values of its investment properties are based on valuations performed by Knight Frank Zimbabwe an accredited independent valuer. Knight Frank is a specialist in valuing these types of investment properties and has recent experience in the location and category of the investment properties being valued. The valuations are based upon assumptions on future rental income, anticipated maintenance costs, future development costs and the appropriate discount rate. Where the market information is available, the valuers make use of market information from transactions of similar properties . Significant judgements were applied as at 31 December 2022 as a result of the uncertainties resulting from the hyperinflationary economic environment, currency shifts, excessive market volatility and lack of recent transactions conducted in ZWL.

6.1

Investment Properties

At 1 January Disposals Additions

Reclassification to held for sale Improvements to existing properties Fair value adjustments

Closing Balance

6.2

Investment Property held for sale

INFLATION ADJUSTED

HISTORICAL COST

Audited Audited 31 Dec 2022 31 Dec 2021

Unaudited Unaudited 31 Dec 2022 31 Dec 2021

ZWL000 ZWL000 22 039 000 9 395 892 -

During the year ended 31 December 2022, the directors of First Mutual Properties Limited decided to dispose of a residential parcel of land, known as 472 Goodhope Township of Lot 4 of Goodhope, Harare as part of the Group's ongoing capital recycling strategy. Conditions for the classification as held for sale (as stipulated in IFRS 5- Non-current assets held for sale and discontinued operations) were met as at 31 December 2022. The asset was reclassified to current assets from investment property as disclosed below. The sale of the residential parcel of land is expected to be completed within a year from the reporting date.

INFLATION ADJUSTED

HISTORICAL COST

Closing Balance

At 1 January

Reclassification to held for sale Fair value adjustment Disposal

6.3

Fair value hierarchy

Audited Audited 31 Dec 2022 31 Dec 2021

38 400

Valuation techniques used to derive level 3 fair values

The table below presents the following for each class of the investment property:

• • the fair value measurements at the end of the reporting period;

  Unaudited Unaudited 31 Dec 2022 31 Dec 2021

  ZWL000 ZWL000

  - 38 400 -48 818 - 2 402

  • - (51 220)

  38 400

  -

• • the level of the fair value hierarchy (in this case level 3) within which the fair value measurements are categorised in their entirety;

• • a description of the valuation techniques applied;

• • the inputs used in the fair value measurement, including the ranges of rent charged to different units within the same building; and

• • level 3 fair value measurements, quantitative information about the significant observable inputs used in the fair value measurement.

Notes to the Consolidated Abridged Financial Statements

All amount in ZWL

Class of property

CBD officesOffice parks

CBD retail*Suburban retail*IndustrialResidentialLand - residential

Land - commercial

Total

15 158 400 000 comparable

7 Investment in associate

As at 1 January Additions Dividend received Share of profits Closing Balance

• 8 Vehicles & Equipment At I January

  Additions Disposals Depreciation Closing Balance

• 9 Financial Assets at fair value through profit or loss - Unquoted shares

  As at January

  Fair value adjustment

• 9.1 Financial Assets at fair value through profit or loss - Quoted shares

  As at January

  Additions

  Fair value adjustment

• 10 Financial Assets at Amortised Cost

  Held to maturity investments

  Housing bonds

  Held to maturity investments

  Amortised interest

  Repayments received

• 11 Trade and Other Receivables

  Tenant receivables

  Tenant operating cost recoveries Trade receivables

  Less: Allowance for Credit Losses Net Trade Receivables

  Prepayments

  Other receivables

  Related party receivables

• 11.1 Reconciliation of allowance for credit losses

  Key unobservable inputs

  Income

  Optimal Rental per square metre

  Income capitalisation

  Capital rate/ prime yieldVacancy rate 23%Optimal Rental per square metre

  Income capitalisation

  Capital rate/ prime yieldVacancy rate 6%Optimal Rental per square metre

  Income capitalisation

  Capital rate/ prime yieldVacancy rate 0%Optimal Rental per square metre

  Income capitalisation

  Capital rate/ prime yieldVacancy rate 4%Optimal Rental per square metre

  Income capitalisation

  Capital rate/ prime yieldVacancy rate 10% Comparable transacted properties prices

  Market comparable MarketRate per square metrecomparable MarketRate per square metre

  INFLATION ADJUSTEDRange

  ZWL2,000-ZWL3,500 5.50%-8.5%

  ZWL4,000-

  ZWL5,000 5.00%-6.00%ZWL4,000-

  ZWL10,000 4.50%-6.00%ZWL900-

  ZWL20,000 4.00%-5.50%ZWL1,000-

  ZWL3,500 7.00%-10.00%ZWL1,500.00-

  ZWL20,000.00

  ZWL20,000.00-

  ZWL86,000.00

  HISTORICAL COST

  Add: charge for the year Recovery due to payments Inflation effect

• As at 1 January

  Audited 31 Dec 2022 ZWL000 43 112 190 419 70 306	Unaudited 31 Dec 2022 ZWL000 8 702 122 059 - 114 622
  303 837	43 112	245 383
  28 078 109 802 (277) (15 140)	23 450 15 311 (592) (10 091)	2 833 97 854 (255) (4 433)
  122 463	28 078	95 999
  29 007 33 136	26 172 2 835	8 438 53 705
  62 143	29 007	62 143
  4 807 (183) (1 571)	- 3 670 1 137	1 398 (170) 1 825
  3 053	4 807	3 053
  200 - 79 096 23 168 (23 168)	688 654 - 761 (761)	200 - 79 096 12 757 (12 757)
  79 296	1 342	79 296
  451 033 216 666	248 283 109 615	451 033 216 666
  667 699 (159 094)	357 898 (114 053)	667 699 (159 094)
  508 605 964 370 62 145 16 280	243 845 404 553 43 243 37 761	508 605 788 560 62 145 16 280
  1 551 400	729 402	1 375 590
  114 053 246 427 (120 511) (80 875)	48 519 144 238 (60 370) (18 334)	33 179 192 272 (66 357) -
  159 094	114 053	159 094

  159 094

  Audited Audited 31 Dec 2022 31 Dec 2021

  ZWL000 ZWL000

  43 112 190 419

  303 837

  28 078 109 802

  (277) (15 140) 122 463

  29 007

  33 136

  62 143

  4 807

  (183) (1 571) 3 053

  200 79 096 23 168 (23 168)

  Unaudited Unaudited 31 Dec 2022 31 Dec 2021

  weighted average

  ZWL000 ZWL000

  43 112

  43 112

  8 702

  -

  122 059 -

  114 622

  245 383

  23 450 15 311 (592) (10 091) 28 078

  2 833 97 854

  (255) (138)

  (4 433) (496)

  95 999

  26 172

  8 438

  2 835

  53 705

  29 007

  62 143

  1 398

  • 3 670

    (170) 897

  • 1 137 4 807

  1 825 501

  3 053

  688

  200 200

  - 190

  79 096

  • 761 12 757

  • (761) (12 757)

  11.2 Analysis of allowance for credit losses

  Unaudited Historical

  31 December 2022

  Expected loss rate

  Gross carrying amount-trade receivables provided for Credit loss allowance*Expected loss rate

  Gross carrying amount-trade receivables provided for Credit loss allowance**

  Total credit loss allowance

  31 December 2021

  Expected loss rate

  Gross carrying amount-trade receivables provided for Credit loss allowance*Expected loss rate

  Gross carrying amount-trade receivables provided for Credit loss allowance**

  Total credit loss allowanceCurrentMore than 30 days past due

  7,42% 215 679

  15,01% 121 339

  16 094

  18 412

  3,43% 79 043

  3,43% 11 209

  2 708

  384

  18 802

  18 796

  CurrentMore than 30 days past due

  6,65% 35 724

  13,37% 15 260

  2 381

  2 047

  4,52% 2 555

  4,52%

  459

  115

  21

  2 496

  2 068

  *Credit loss allowance at different loss rates **Credit loss allowance at (2022: 3.43%) (2021: 4.52%)

  Change of provisioning matrix

  More than 60 day past dueMore than 60 day past due

  32,56% 12 470

  23,84% 96 352

  23 283

  23 330

  3,43% 1 383

  4,52%

  4 120

  4 076

  972

  47

  44

  More than 90 days past dueMore than 90 days past due

  44,75% 59 233

  41,56%

  27 090

  27 115

  4,52% 3 129

  3,43%

  2 553

  2 412

  5 756

  141

  727

  25

  More than 120 days past dueMore than 120 days past due

  21 942

  70 637

  71 051

  21 665

  3,43% 12 097

  100% 70 637

  100% 21 665

  4,52% 6 124

  277

  414

  8 702 - - - 8 702

  At 31 December 2022, the Group revised its Expected Credit Loss (ECL) provisioning matrix in line with changes in market and economic conditions affecting the tenants ability to settle their arrears. The revision resulted in a slight change of ECL rates being applied in the year ended 2022 as compared to the prior year. The revision took into account historical data for the past two years. Forward looking information was incorporated by adjusting historical loss rates using estimated GDP movements in the Zimbabwean economy.

  12

  Cash and Cash EquivalentsINFLATION ADJUSTED

  HISTORICAL COST

  1 551 400

  114 053 246 427 (120 511)

  667 699 (159 094)

  508 605

  964 370

  216 666

  451 033

  16 280

  62 145

  357 898 (114 053)

  729 402

  243 845

  48 519 144 238 (60 370)

  404 553

  109 615

  248 283

  37 761

  43 243

  1 375 590

  667 699 (159 094)

  508 605

  33 179 192 272 (66 357)

  788 560

  216 666

  451 033

  16 280

  62 145

  192 677

  104 114 (33 179)

  8 781 41 960 (17 562)

  70 935

  10 985

  12 580

  98 177

  31 888

  72 226

  1 398

  • 8 438

  • 2 833

  • 3 701

  • 4 737

    176 3 291

    - 501 (501) 390

    -

    14

    15

    16

    13

    224 594	40 042	224 594	11 648
    383 094	714 315	383 094	207 797
    68 282	39 023	68 282	11 352
    675 970	793 380	675 970	230 797
    Deferred Tax Liability
    At 1 January	8 954 492	4 656 985	2 598 083	841 971
    Recognised in the statement of profit or loss	-	-	-	-
    -Arising on inventory	(99)	(404)	-	-
    -Arising from prepayments	44 816	6 218	-	-
    -Arising on vehicles and equipment	14 428	(273)	13 591	61
    -Arising on investment properties	2 911 507	4 288 711	9 267 269	1 761 443
    -Arising on financial assets held through profit
    or loss	2 129	142	3 169	(2 231)
    -Arising on provisions for credit losses	(11 134)	(16 200)	(31 126)	(6 031)
    -Arising on leave pay provisions	(1 417)	19 313	(5 435)	2 870
    11 914 722	8 954 492	11 845 551	2 598 083
    Trade and Other Payables
    Tenant payables	183 613	28 636	106 903	7 100
    Related party payables	198 179	22 541	198 179	6 558
    Sundry creditors	173 038	170 303	173 038	49 707
    Suppliers creditors	370 107	135 155	370 107	39 480
    Provision for leave days	28 652	22 920	28 652	6 667
    Group company payables	28 202	29 187	28 202	8 491
    981 791	408 742	905 081	118 003
    Revenue
    Rental income	2 820 408	2 001 579	2 041 383	465 721
    Property Services income	80 124	42 900	60 190	9 744
    2 900 532	2 044 479	2 101 573	475 465
    Property Expenses
    Maintenance costs	528 124	113 893	418 987	25 845
    Property security and utilities	40 409	18 688	33 175	4 272
    Valuation fees	7 128	5 835	5 060	2 113
    Property cost of sales	-	1 796
    Operating costs under recoveries	415 228	272 523	333 606	61 872
    Staff costs*	606 996	359 300	406 872	77 544
    Other costs*	244 537	220 077	168 376	40 330
    1 842 422	997 662	1 366 076	213 772

    Short-term Investments

    Cash and cash equivalents: USD

    ZWL

    Audited 31 Dec 2022 ZWL000 224 594 383 094 68 282	Unaudited 31 Dec 2022 ZWL000 224 594 383 094 68 282
    675 970	793 380	675 970
    8 954 492 - (99) 44 816 14 428 2 911 507 2 129 (11 134) (1 417)	4 656 985 - (404) 6 218 (273) 4 288 711 142 (16 200) 19 313	2 598 083 - - - 13 591 9 267 269 3 169 (31 126) (5 435)
    11 914 722	8 954 492	11 845 551
    183 613 198 179 173 038 370 107 28 652 28 202	28 636 22 541 170 303 135 155 22 920 29 187	106 903 198 179 173 038 370 107 28 652 28 202
    981 791	408 742	905 081
    2 820 408 80 124	2 001 579 42 900	2 041 383 60 190
    2 900 532	2 044 479	2 101 573
    528 124 40 409 7 128 - 415 228 606 996 244 537	113 893 18 688 5 835 7 346 272 523 359 300 220 077	418 987 33 175 5 060 - 333 606 406 872 168 376
    1 842 422	997 662	1 366 076

    ZWL000 ZWL000

    Audited Audited 31 Dec 2022 31 Dec 2021

    Unaudited Unaudited 31 Dec 2022 31 Dec 2021

    ZWL000 ZWL000

    159 094

    114 053

    -

    - 33 179

Notes to the Consolidated Abridged Financial Statements

16.1 *Reclassification effect on property expenses and administration

During the year the business reviewed its long term KPI's targets in line with the agency and asset management model, to ensure the cost centre is optimised, with the business targeting to manage more assets and have a greater number of square meters under management to drive the optimising of KPI's. The business also reviewed KPI's in line with regional best practice reporting for real estate investment companies, with the benchmark taken from leading listed property companies in South Africa. To this end, in order to achieve this, the current reporting format and allocation of expenses, namely staff related costs and property management related expenses, was reclassified from administration expenses to property expenses.

INFLATION ADJUSTED

HISTORICAL COST

• 19 Finance Income

  Increase in property expenses Decrease in employee related expenses Decrease in other expenses

• 17 Profit before income tax takes into account the following

  Directors fees -for services as directors

  Audit fees

  Information communication and technology

  expenses

  Fees and other charges

  Depreciation

  Office costs

  Group shared services

• 18 Fair value adjustments

  Fair value adjustment on investment

  properties

  Fair value adjustment on investment property

  held for sale

• Interest on overdue tenants accounts Interest on money market investments

• 20 Other Income Exchange gains Other income

• 21 Income Tax Expense

  Current income tax

  Deferred tax

  Audited 31 Dec 2022 ZWL 000 851 533 (606 996) (244 537)	Unaudited 31 Dec 2022 ZWL 000 575 248 (406 872) (168 376)
  -	-	-
  29 985 20 075 10 082 119 959 3 028 76 255 202 287 33 574 174 -	10 932 4 246 8 096 12 794 2 130 14 411 138 028 23 771 302 10 999	21 532 12 095 7 159 82 688 887 65 736 144 344 87 405 250 -
  33 574 174	23 782 301	87 405 250
  354 955 15 211	71 838 1 997	297 685 12 757
  370 166	73 835	310 442
  1 668 695 142 778	217 081 88 080	1 160 595 135 523
  1 811 473	305 161	1 296 118
  253 531 2 960 230	147 123 4 297 507	253 531 9 247 542
  3 213 761	4 444 630	9 501 073

  ZWL 000 ZWL 000

  Audited Audited

  31 Dec 2022 31 Dec 2021

  851 533 (606 996) (244 537)

  29 985

  20 075

  10 082

  119 959

  3 028

  76 255

  202 287

  33 574 174

  33 574 174

  354 955

  15 211

  370 166

  1 668 695

  142 778

  1 811 473

  253 531 2 960 230

  3 213 761

• 22 Segment Reporting for the year ended 31 December 2022

Unaudited Unaudited

31 Dec 2022 31 Dec 2021

ZWL 000 ZWL 000

579 377 (359 300) (220 077)

-

-10 932

• 4 246

• 8 096

12 794

2 130

14 411

138 028

23 771 302

87 405 250

23 782 301

87 405 250

71 838

1 997

73 835

217 081

1 160 595

88 080

305 161

1 296 118

147 123 4 297 507

253 531 9 247 542

4 444 630

9 501 073

AUDITED INFLATION ADJUSTED

575 248 (406 872) (168 376)

117 874 (77 544) (40 330)

-

-21 532

• 5 148

  12 095

• 1 923

  7 159

• 1 859

  82 688

• 8 860

  887

  99

65 736

2 322

144 344

32 151

12 627 352

-

2 402

12 629 754

297 685

18 013

12 757

501

310 442

18 514

60 217

135 523

36 559

96 776

42 799

1 756 113

1 798 912

Segment reporting for the year ended 31 December 2021

Revenue

Property expenses and allowance for credit losses Segment results

Fair value adjustment - Investment properties Segment profit Employee related expenses Other Expenses

Finance income Other income

Net monetary gain Profit before income tax expense

(131 535) 392 608

10 051 652 10 560 683 - (32 826)

• 4 786 418

  41 184 189 880 -

• 5 179 026 - (26 066) 13 484 - -

Reconciliation of Segment Results for 31 December 2021

Assets

Investment Properties Trade receivables Segment Assets

Other non-current assets Other current assets Total Assets Current Liabilities Capital expenditure

Office ZWL000

Retail ZWL000

32 536 534 15 444 283

128 849

58 271

32 665 383 15 502 554 7 162 254 20 677 007

- -- -

32 665 383 15 502 554 7 162 254 22 063 943

98 098 4 000

23 755 68 332

22

Segment Reporting for the year ended 31 December 2022

Revenue

Property expenses and allowance for credit losses Segment results

Fair value adjustment - Investment properties Segment profit Employee related expenses Other Expenses

Finance income

Share of profit of associate Other income

Profit before income tax expense

Office ZWL000 1 031 987

Retail ZWL000 711 992

(920 708) 111 279

(384 437) 327 555

38 875 000 17 755 640

38 986 279 18 083 195 8 371 719 22 581 308

39 888 517 18 074 665 8 367 249 22 537 737

Reconciliation of Segment Results for 31 December 2022

Assets

Investment Properties Trade receivables Segment Assets

Other non-current assets Current assets

Total Assets Current Liabilities Capital expenditure

Office Retail Industrial Other ConsolidationZWL000 ZWL000 ZWL000 ZWL000

48 340 000 22 248 440 10 315 000 28 430 400

377 648

50 902

48 717 648 22 299 342 10 353 749 28 472 550

- -- -

48 717 648 22 299 342 10 353 749 30 548 451

291 604 27 862

88 736 60 155

Reconciliation of Segment Results for 31 December 2022

AUDITED INFLATION ADJUSTED

Office Retail Industrial Other Consolidation ZWL000 ZWL000 ZWL000 ZWL000 ZWL000

Assets

Investment Properties Trade receivables Segment Assets

Other non-current assets Other current assets Total Assets Current Liabilities Capital expenditure

48 340 000 22 248 440 10 315 000 28 430 400

377 648

50 902

38 749

42 150

48 717 648 22 299 342 10 353 749 28 472 550

- -- -

• - 570 792

• - 1 766 672

48 717 648 22 299 342 10 353 749 30 810 014

315 916 80 823

96 134 174 501

60 498 -

Segment reporting for the year ended 31 December 2021

Revenue

Property expenses and allowance for credit losses Segment results

Fair value adjustment - Investment properties Segment profit Employee related expenses Other Expenses

Finance income Other income

Profit before income tax expense

Office Retail Industrial Other ConsolidationZWL000 ZWL000 ZWL000 ZWL000 278 410 121 895 47 258 29 272

(149 816) 128 594

(29 626) 92 269

5 337 999

2 541 860

5 466 593 2 634 129 1 250 258 3 517 439

- (9 225) 10 327 60 217

- (7 325) 3 381 -

5 527 912 2 630 185 1 249 357 3 448 291

Reconciliation of Segment Results for 31 December 2021UNAUDITED HISTORICALOffice ZWL000

Retail ZWL000

Assets

Investment Properties Trade receivables Segment Assets

Other non-current assets Current assets

523 384 109 801

Total Assets Current Liabilities Capital expenditure

9 465 000 37 483

4 492 800 16 951

9 502 483 4 509 751 2 083 526 6 015 019

- -- -

9 502 483 4 509 751 2 083 526 6 389 440

28 333 871

6 861 14 885

Notes to the Consolidated Abridged Financial Statements

23

Related Party disclosures

The financial statements include transactions between First Mutual Properties Limited and other subsidiaries of First Mutual Holdings Limited. The following table provides the total amount of transactions, which have been entered into with related parties for the relevant financial year.

Transactions and balances with related Companies

The following table provide the total amount of transactions that have been entered into with related parties during the year ended 31 December 2022:

Inflation adjusted

Group CompanyGroup CompanyCompany

• - First Mutual Holdings Limited

• - First Mutual Life Assurance Company (Private) Limited

• - First Mutual Reinsurance Company Limited

• - First Mutual Health Company (Private) Limited

• - First Mutual Microfinance (Private) Limited

• - First Mutual Funeral Services (Private) Limited

• - First Mutual Wealth Management (Private) Limited

• - NicozDiamond Insurance LimitedOther directors interests*

Payables receivables

ZWL000 - - - 28 018

- 28 202

- 184

• - 1 784

HistoricalZWL000

43 16 322

• 7 503 199 267

• 6 244 18 944

• 748 85 758

  -

  - -

  Rentals charged to Group Companies ZWL000 85 758 199 267 18 944 87 420 1 141 4 055 9 192 5 723	Rentals charged to Group Companies ZWL000 47 221 109 723 10 431 48 136 628 2 233 5 062 3 151
  411 500	28 202 16 322	226 585

  Rentals charged to Group

  ZWL000

  ZWL000

  ZWL000

  ZWL000

  • 748 47 221

  • 7 503 109 723

  • 6 244 10 431

    48 136

    628

    • 2 233

      • 9 192

  • 1 784 43

  • 5 062

    • 5 723 411 500

    28 202

    16 322

  • 3 151 226 585

  5 156

  5 156

  *During the 2022 year the Group rented out premises to Eazstar Investments (Private) Limited, of which the spouse of one of the directors of the Company, is director and controlling shareholder. The Group also rented out premises to Arup Zimbabwe (Private) Limited of which one of the directors of the Company has 25.5% shareholding. The rentals were at market rates.

  Transactions and balances with related Companies

  The following table provide the total amount of transactions that have been entered into with related parties during the year ended 31 Dec 2021:

  Inflation adjusted

  Group CompanyGroup CompanyCompany

  • - First Mutual Holdings Limited

  • - First Mutual Life Assurance Company (Private) Limited

  • - First Mutual Reinsurance Company Limited

  • - First Mutual Health Company (Private) Limited

  • - First Mutual Microfinance (Private) Limited

  • - First Mutual Funeral Services (Private) Limited

  • - First Mutual Wealth Management (Private) Limited

  • - NicozDiamond Insurance LimitedOther directors interests*

  Payables receivablesHistoricalZWL000 -

  - 11 148 29 187

  13 156

  - 4 334

  549 - 864

  - - 504

  ZWL000 28 406

  37 762

  - 9 172

  184 3 113 54 905

  -

  - 556

  Rentals charged to Group Companies ZWL000 28 384 64 454 6 413 35 315 1 734 2 969 3 113 1 911	Rentals charged to Group Companies ZWL000 8 257 18 750 1 866 10 273 504 864 905 556
  144 293	8 491 10 985	41 975

  Rentals charged to Group

  ZWL000 28 384

  ZWL000

  ZWL000

  ZWL000

  8 263 8 257

  18 750

  6 413

  2 668 1 866

  10 273

  144 293

  8 491

  10 985

  41 975

  18 956

  5 514

  *During the 2021 year the Group rented out premises to Eazstar Investments (Private) Limited, of which the spouse of one of the directors of the Company, is director and controlling shareholder. The Group also rented out premises to Arup Zimbabwe (Private) Limited of which one of the directors of the Company has 25.5% shareholding. The rentals were at market rates.

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