RIOZIM LIMITED RioZim Limited
Reviewed Group
Interim Financial Results
For The Half Year Ended 30 June 2023
Head Office: RioZim Limited
1 Kenilworth Road, Highlands, Harare. P O Box CY 1243, Causeway, Highlands, Harare, Zimbabwe
Telephone: +263 746141/9, 776085/91, 746089/95, +263 86 7700 7168,
Cell: +263 77 215 8503-5,Fax: 746228.
CHAIRMAN'S STATEMENT
INTRODUCTION
The Group's resilience and successes over the years has been dependent on the shareholders' continuous support and investment into long-term sustainable
capital projects in the business. The Group experienced a challenging first six months of the year marked by acute power cuts and foreign currency challenges. That
notwithstanding, the Group managed to increase production output, driven by the BIOX Plant at Cam & Motor mine and the 500 TPH Plant at RZM Murowa. Both plants were commissioned in the prior year and yielded positive returns in the current period.
The Government's positive interventions and more particularly, the upward review of the USD nostro retention to 75% from 60% at the beginning of the year partially cushioned the Group and complemented the output growth. However, despite the Group's efforts in growing output, the overall performance for the period was weighed down by incessant power cuts and high cost of production driven by spiralling cost of inputs which resulted in the Group closing the period
in a net loss position. In spite of the challenges faced, the future of the Group, through the BIOX Plant and the 500TPD Plant, is promising and the outlook looks
positive.
GROUP PERFORMANCE
The group's gold production recorded a 6% growth to 417kg from 393kg attained in the comparative prior year period. The growth in gold production resulted from
increased volumes at Cam & Motor mine driven by the recently installed BIOX Plant. Metal prices were favourable during the period as the gold price rose by 4% from an average price of US$1 834/Oz in the same period in prior year to an average price of US$1 910/Oz in the current period.
Revenue for the period was ZW$49.96 billion in comparison to ZW$4.76 billion recorded in the same period in the prior year. The increase in revenue was partly a result of increased gold output as well as exchange rates variation from the comparative prior period. The Group incurred a net loss for the period of ZW$8.7 billion. Despite the growth in output in the current period, the cost base of the Group remained high due to the rising cost of inputs.
GOLD BUSINESS
Renco mine
Gold production for Renco grew by 11% to 194kg during the period from 174kg recorded in the same period in the prior year. The growth in output is attributable
to the successful shift to the 'high throughput low grade' strategy as grades continue to slide down.
CONDENSED CONSOLIDATED STATEMENT
OF PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 Jun 2023 | 30 Jun 2022 | ||
Reviewed | Reviewed | ||
Note | ZW$000 | ZW$000 | |
Revenue | 6 | 49 958 251 | 4 756 485 |
Cost of sales | (41 663 813) | (4 602 322) | |
Gross profit | 8 294 438 | 154 163 | |
Distribution and selling costs | (14 912) | - | |
Administrative expenses | (18 891 943) | (2 544 621) | |
Other income | 916 340 | 98 668 | |
Operating loss | (9 696 077) | (2 291 790) | |
Finance costs | (646 738) | (221 892) | |
Share of profit from an associate | 13 | 413 890 | 83 813 |
Loss before tax | (9 928 925) | (2 429 869) | |
Income tax credit/(expense) | 1 217 031 | (3 039 249) | |
Loss for the period | (8 711 894) | (5 469 118) | |
Loss for the period attributable to: | |||
Owners of the parent | (8 698 200) | (5 463 730) | |
Non-controlling interests | (13 694) | (5 388) | |
(8 711 894) | (5 469 118) | ||
Loss per share (cents): | |||
Basic | (7 128) | (4 477) | |
Diluted basic | (7 128) | (4 477) | |
Dalny mine
Dalny operated under care and maintenance throughout the period. The future of the mine is dependent on resuscitation of underground operations after the open pit resources were exhausted in prior years. The underground project requires a huge investment and is scheduled to be pursued in the near future.
Cam & Motor mine
CONDENSED CONSOLIDATED STATEMENT OF
OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 Jun 2023 | 30 Jun 2022 |
Reviewed | Reviewed |
ZW$000 | ZW$000 |
After successful completion and commissioning of the BIOX Plant in the prior year, the key focus in the current period was optimisation and ramping up of production to plant capacity. As a result of the ramping up exercise, production leap frogged by 6% to 223kg from 211kg achieved in the comparative prior year
period.
After addressing all the notable teething challenges during the period, the forecast for the second half the year is positive and the mine is set to continue on the growth trajectory achieved in the six-month period.
BASE METALS BUSINESS
The Empress Nickel Refinery continued under care and maintenance throughout the period.
CHROME BUSINESS
There has been no change on the Company's chrome claims in Darwendale as the court case is still pending finalisation.
DIAMOND BUSINESS
RZM Murowa, the Group's associate, recorded an 84% increase in production from 115 000 carats achieved in half year 2022, to 212 000 carats in the current
Loss for the period
Other comprehensive income to be reclassified to profit or loss:
Foreign currency translation exchange gains
Net other comprehensive income to be reclassified to profit or loss
Other comprehensive income not to be reclassified to profit or loss
Total other comprehensive income for the period net of tax
Total comprehensive income for the period
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interests
(8 711 894) | (5 469 118) | |
65 055 024 | 9 369 724 | |
65 055 024 | 9 369 724 | |
- | - | |
65 055 024 | 9 369 724 | |
56 343 130 | 3 900 606 | |
58 570 914 | 3 961 870 | |
(2 227 784) | (61 264) | |
56 343 130 | 3 900 606 |
period. This marked growth in production was stimulated by the recently installed 500 TPD Plant which was commissioned in the second half of the previous year. Despite some teething challenges that were encountered in the first quarter of the year, the overall performance of the plant for the period was satisfactory which
enabled the ramping up of plant throughput.
The contribution from the associate towards the Group's profitability remains positive backed by the increased production output as share of profit from the
associate increased from ZW$83.8 million in comparative period to ZW$413.9 million in the current period.
OUTLOOK
The stability and performance of the Group's two major projects, the BIOX Plant at Cam & Motor and the 500 TPD Plant at RZM Murowa, during the period provides
confidence for a positive outlook in the second half of the year as the Company is set to continue sweating these two assets towards designed capacity.
Power supply remains a significant threat to the business as this will curtail plant running time. The Group installed back up power generators to mitigate the
production losses occasioned by power cuts however, this comes with an increased cost of production.
The dynamic and challenging macro-economic environment remains an impediment to business growth and continues to have a negative effect on the operating performance of the Group.
DIRECTORATE
The Board wishes to announce the resignation of Mr Manit M. Shah as the Chief Executive Officer of the Group from the 27th of April 2023. Manit was influential
in steering the Group's milestone projects which have now come to fruition and the Board is grateful for his contribution to the success of the Group. The Board wishes him well in his future endeavours.
Mr. Rajgopal Swami was appointed as the Chief Executive Officer for the Group with effect from the 28th of April 2023. Raj has been part of the RioZim Group for several years as the Chief Finance Officer and has been an integral part in the success of the business. Mr. Atish Mangal was appointed as the Chief Finance Officer with effect from the 28th of April 2023.
The Board is also pleased to announce the appointment of Mr. Grant R. Flanagan and Mr. Ajay P. Shanghavi as Non-Executive Directors with effect from the 28th of
April 2023. Grant has over 20 years' experience specialising in the frontier and emerging market of Africa. Ajay is a Mechanical Engineer and Production Engineer by profession and also holds a Marketing, Computer and General Management diploma. These two will certainly bring necessary technical support and diversity
to the Board.
Mr. Gopal K. Jain resigned as a Non-Executive Director with effect from the 27th of April 2023. The Board would like to thank Mr Jain for his valuable contribution
to the Group.
DIVIDENDS
No dividends were declared for the period.
APPRECIATION
I would like to extend my appreciation to my esteemed Directors for their perseverance and commitment in transforming the fortunes of the Company. I am confident that the progress achieved under the Directors' oversight in the period under review will steer the Group back to profitability. I am also humbled by the continued dedication of our Management and resilience of our Employees towards the success of the Company. I further acknowledge all our valuable stakeholders
who continue to support our Group.
S R BEEBEEJAUN
CHAIRMAN
CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 30 JUNE 2023
30 Jun 2023 | 31 Dec 2022 | ||
Reviewed | Audited | ||
Note | ZW$000 | ZW$000 | |
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 8 | 382 641 272 | 47 891 528 |
Exploration, evaluation and | |||
development assets | 71 821 753 | 8 679 608 | |
Right of use asset | 430 488 | 81 744 | |
Investment in associate company | 13 | 160 755 671 | 18 521 109 |
Fair value through other comprehensive | |||
income investments | 9 | 24 659 | 24 659 |
Total non-current assets | 615 673 843 | 75 198 648 | |
Current assets | |||
Inventories | 10 | 78 452 120 | 9 565 620 |
Trade and other receivables | 40 529 003 | 4 795 721 | |
Cash and cash equivalents | 14 252 020 | 394 558 | |
Total current assets | 133 233 143 | 14 755 899 | |
Total assets | 748 906 986 | 89 954 547 | |
EQUITY & LIABILITIES | |||
Shareholders' equity | |||
Share capital | 1 345 | 1 345 | |
Share premium | 20 789 | 20 789 | |
Fair value through other comprehensive | |||
income reserve | 23 403 | 23 403 | |
Accumulated losses | (30 909 519) | (22 211 319) | |
Foreign currency translation reserve | 93 296 770 | 26 027 656 | |
Equity attributable to equity holders of the parent | 62 432 788 | 3 861 874 | |
Non-controlling interests | (2 518 562) | (290 808) | |
Total equity | 59 914 226 | 3 571 066 | |
Non-current liabilities | |||
Interest-bearing loans and borrowings | 11 | 3 059 334 | 1 466 173 |
Mine rehabilitation provision | 20 852 904 | 2 486 067 | |
Other payables | 12 | 173 679 431 | 20 706 978 |
Deferred tax liabilities | 9 687 603 | 10 904 633 | |
Employee benefit liability | 169 321 | 169 321 | |
Lease liability | - | 94 463 | |
Total non-current liabilities | 207 448 593 | 35 827 635 | |
Current liabilities | |||
Trade and other payables | 12 | 416 861 921 | 42 312 856 |
Interest-bearing loans and borrowings | 11 | 64 165 660 | 8 225 156 |
Lease liability | 516 586 | 17 834 | |
Total current liabilities | 481 544 167 | 50 555 846 | |
Total liabilities | 688 992 760 | 86 383 481 | |
Total liabilities and shareholders' equity | 748 906 986 | 89 954 547 |
DIRECTORS: S R Beebeejaun (Chairman), C Dengu (Deputy Chairman), R Swami* (Chief Executive Officer), M S Bindra, G R Flanagan, M T Sachak, A P Shanghavi - Executive*
RioZim Limited
Reviewed Group
Interim Financial Results
For The Half Year Ended 30 June 2023
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Attributable To Equity Holders Of The Parent | ||||||||||
Fair value | Foreign | |||||||||
through other | currency | Non- | ||||||||
Share | Share | comprehensive | translation | Accumulated | controlling | Total | ||||
capital | premium | income reserve | reserve | losses | Total | interests | Equity | |||
ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | |||
Balance at 1 January 2022 | 1 345 | 20 789 | 13 173 | 6 003 034 | (2 061 721) | 3 976 620 | (33 090) | 3 943 530 | ||
Loss for the period | - | - | - | - | (5 463 730) | (5 463 730) | (5 388) | (5 469 118) | ||
Other comprehensive income/(loss) net of tax | - | - | - | 9 425 600 | - | 9 425 600 | (55 876) | 9 369 724 | ||
Total comprehensive income/(loss) net of tax | - | - | - | 9 425 600 | (5 463 730) | 3 961 870 | (61 265) | 3 900 606 | ||
Balance as at 30 June 2022 (reviewed) | ||||||||||
1 345 | 20 789 | 13 173 | 15 428 634 | (7 525 451) | 7 938 490 | (94 355) | 7 844 136 | |||
Balance at 1 January 2023 | 1 345 | 20 789 | 23 403 | 26 027 656 | (22 211 319) | 3 861 874 | (290 778) | 3 571 096 | ||
Loss for the period | - | - | (8 698 200) | (8 698 200) | (13 694) | (8 711 894) | ||||
Other comprehensive income/(loss) net of tax | - | - | 67 269 114 | - | 67 269 114 | (2 214 090) | 65 055 024 | |||
Total comprehensive income/(loss) net of tax | - | - | - | 67 269 114 | (8 698 200) | 58 570 914 | (2 227 784) | 56 343 130 | ||
Balance as at 30 June 2023 (reviewed) | 1 345 | 20 789 | 23 403 | 93 296 770 | (30 909 519) | 62 432 788 | (2 518 562) | 59 914 226 | ||
CONDENSED CONSOLIDATED STATEMENT OF
CASHFLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 Jun 2023 | 30 Jun 2022 | |||
Reviewed | Reviewed | |||
Note | ZW$000 | ZW$000 | ||
Net cash flows from operating activities | 12 174 618 | 419 755 | ||
Cash flows from investing activities | ||||
Investment in exploration and evaluation assets | 8 | (646 725) | (174 341) | |
Additions to property, plant and equipment | (1 051 109) | (122 244) | ||
Net cash used in investing activities | (1 697 835) | (296 585) | ||
Cash flows from financing activities | ||||
Inflows from borrowings | - | 196 609 | ||
Repayment of borrowings | (5 705 043) | (157 875) | ||
Repayment of lease liability | (53 646) | - | ||
Net cash used in financing activities | (5 758 689) | (38 734) | ||
Net increase in cash and cash equivalents | 4 718 094 | 26 362 | ||
Unrealised exchange gains on foreign currency balances | 9 139 369 | 135 542 | ||
Cash and cash equivalents at beginning of period | 394 558 | 142 788 | ||
Cash and cash equivalents at 30 June 2023 | 14 252 021 | 304 692 |
NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
1 GENERAL INFORMATION
RioZim Limited ('the Company') and its subsidiaries (together 'the Group') is involved in mining and metallurgical operations in different locations in Zimbabwe. The Group has mining operations and a metallurgical plant.
The Company is a limited liability company incorporated and domiciled in Zimbabwe. The address of its registered office is 1 Kenilworth Road, Highlands, Harare. The Company is listed on the Zimbabwe Stock Exchange. These condensed consolidated financial statements were authorised for issue by the Board
of Directors on 15 September 2023.
-
BASIS OF PREPARATION
The condensed consolidated financial statements of the Group have been prepared using accounting policies consistent with International Financial Reporting
Standards (IFRS) and in accordance with International Accounting Standard 34 Interim Financial Reporting and the disclosure requirements of the Companies and Other Business Entities Act (Chapter 24:31).
The condensed consolidated financial statements are presented in Zimbabwean Dollars (ZW$), and all values are rounded to the nearest thousand (ZW$000), except where otherwise indicated. The Group's functional currency is the United States Dollar (US$).
The condensed consolidated financial statements are based on statutory records that are maintained under the historical cost conventions as modified by measurement of certain financial assets at fair value. They do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2022.
The Group used interbank exchange rates to convert all transaction and balances from the Group's functional currency United States Dollar (US$) to the reporting currency Zimbabwean Dollar (ZW$). The closing interbank exchange rate as at 30 June 2023 was 5 739.84 (31 December 2022: 684.33).
In 2019, the Public Accountants and Auditors Board (PAAB) issued a pronouncement that factors and characteristics for the application of IAS 29 "Financial
Reporting in Hyper-Inflationary Economies" in Zimbabwe were met and therefore mandated IAS 29 to be applied in the preparation and presentation of financial statements for entities in Zimbabwe. Hyper-inflation financial reporting is however, applicable to entities whose functional currency is the currency in hyper-inflation.
The Group's functional currency is USD, which is not a currency in hyper-inflation and therefore IAS 29 is not applicable to the financial statements of the
Group.
- SIGNIFICANT JUDGEMENTS AND ESTIMATES
When preparing the condensed consolidated financial statements, management undertakes a number of judgements, estimates and assumptions about
recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated. The judgements, estimates and assumptions applied in the condensed consolidated financial statements, including the key sources of estimation uncertainties were the same as those applied in the Group's annual financial statements for the year ended
31 December 2022.
- SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared in accordance with the accounting policies adopted in the Group's annual financial statements for the year ended 31 December 2022 and applicable amendments to International Financial Reporting Standards (IFRS). -
OPERATING SEGMENT INFORMATION
Management has determined the Group's operating segments based on the information reviewed by the Board for the purpose of allocating resources and assessing performance. The revenue, operating profit, assets and liabilities reported to the Board are measured consistently with those in the reported condensed consolidated financial statements.
Gold segment
This operating segment develops and mines gold that is ultimately sold as gold bullion.
Base metals segment
This operating segment comprises of base metals refining facilities.
The Group management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. However, the Group's financing (finance costs) and income taxes are managed on a Group basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.
The following table presents revenue and profit information about the Group's operating segments for the six months ended 30 June 2023:
Adjustments | |||||
Gold | Base Metals | and eliminations | Consolidated | ||
Six months ended 30 June 2023 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | |
Revenue | |||||
External customers | 49 605 159 | 353 092 | - | 49 958 251 | |
Results | |||||
Segment profit/(loss) | 2 211 689 | 1 011 907 | (12 919 673) | (9 696 077) | |
Net finance cost | (646 738) | ||||
Share of associate profit | 413 890 | ||||
Income tax credit | 1 217 031 | ||||
Loss for the period | (8 711 895) | ||||
Other disclosures | |||||
Depreciation | (4 840 105) | (308 406) | (188 246) | (5 336 757) | |
Amortisation of development costs | (1 002 429) | - | - | (1 002 429) | |
Segment assets (June 2023) | 413 851 150 | 44 206 907 | 290 848 928 | 748 906 986 | |
Segment liabilities (June 2023) | 446 653 248 | 42 244 356 | 200 095 156 | 688 992 760 | |
Capital expenditure (June 2023) | 1 261 806 | - | 436 029 | 1 697 835 | |
NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (cont'd)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Adjustments | |||||
Gold | Base Metals | and eliminations | Consolidated | ||
Six months ended 30 June 2022 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | |
Revenue | |||||
External customers | 4 728 469 | 28 016 | - | 4 756 485 | |
Results | |||||
Segment profit/(loss) | (1 122 159) | (353 311) | (816 320) | (2 291 790) | |
Net finance cost | (221 892) | ||||
Share of associate profit | 83 813 | ||||
Income tax expense | (3 039 249) | ||||
Loss for the period | (5 469 118) | ||||
Other disclosures | |||||
Depreciation | (795 312) | (52 769) | (17 139) | (865 220) | |
Amortisation of development costs | (103 263) | - | - | (103 263) | |
Segment assets (June 2022) | 32 747 837 | 3 199 500 | 12 893 287 | 48 786 624 | |
Segment liabilities (June 2022) | 6 244 981 | 13 499 347 | 21 198 160 | 40 942 488 | |
Capital expenditure (June 2022) | 1 126 695 | 6 605 | 67 997 | 1 201 297 | |
Finance costs and fair value gains and losses on financial assets are not allocated to individual segments as the
underlying instruments are managed on an overall Group basis. Taxes, interest bearing liabilities and certain assets such as Fair Value Through Other Comprehensive Income Investments, investments in associates, Financial assets at Amortised Cost and cash and cash equivalents are not allocated to those segments as they are also managed on an overall Group basis. These are included in adjustments and eliminations in the segment disclosures.
6 REVENUE
30 Jun 2023 | 30 Jun 2022 | |
Reviewed | Reviewed | |
ZW$000 | ZW$000 | |
Gold | 49 605 159 | 4 728 469 |
Base metals | 353 092 | 28 016 |
Total revenue | 49 958 251 | 4 756 485 |
7 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
Fair value of FVOCI investments, trade receivables, interest-bearing borrowings and all other receivables and payables approximates their carrying amount.
Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest-level input that is significant to the fair value measurement
is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest-level input that is significant to the fair value measurement
is unobservable.
Level 1 | Level 2 | Level 3 | |
Recurring fair value measurements | ZW$000 | ZW$000 | ZW$000 |
30 June 2023 | |||
FVOCI investments | - | - | 24 659 |
Trade receivables (subject to provisional pricing) | - | 243 563 | - |
Impact of level 3 measurements on Other Comprehensive Income | - | - | - |
31 December 2022 | |||
FVOCI investments | - | - | 24 659 |
Impact of level 3 measurements | |||
on Other Comprehensive Income | - | - | 10 768 |
There were no transfers in or transfers out of Level 3 and Level 2 financial instruments.
Trade receivables (subject to provisional pricing)
The Group had trade receivables (subject to provisional pricing) arising from provisional pricing sales
arrangements which the Group entered into with some of its metals in concentrate customers. Final settlement value would be based on final dry weight, agreed assays and final prices which were to be determined at
the end of the Quotational Period (QP), usually 60 days after date of shipment. The QP is the period after
the physical shipment of goods during which the price and grade of mineral sold is subject to change due to fluctuations in commodity prices.
DIRECTORS: S R Beebeejaun (Chairman), C Dengu (Deputy Chairman), R Swami* (Chief Executive Officer), M S Bindra, G R Flanagan, M T Sachak, A P Shanghavi - Executive*
RioZim Limited
Reviewed Group
Interim Financial Results
For The Half Year Ended 30 June 2023
NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (cont'd)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
7 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES cont'd
Description of valuation technique used and key inputs to valuation of the trade receivables
Fair value as at: | Valuation | Significant | ||
Type of financial instrument | 30 June 2023 | 31 Dec 2022 | Technique | inputs |
ZW$000 | ZW$000 | |||
Trade receivables | ||||
(subject to provisional pricing) | 243 563 | - | DCF | Estimated future |
commodity prices. | ||||
Quantities and final |
assays
Valuation techniques
Fair Value through Other Comprehensive Income (FVOCI) investments
The fair value of the FVOCI investments has been determined using the net asset value (NAV) of the investee. Management has evaluated and believes that
NAV provides the most reliable and reasonable fair value after taking into account of the information available, the nature and operations of the investee and
the purpose of the Group's investment in the investee.
The shares of the investee are not publicly traded and there are no other similar companies in the same market whose shares are publicly traded. Furthermore,
the investee does not have a history of declaring dividends. The Group does not have access to the investee's future plans and budgets given the size of its shareholding in the investee. After considering the above factors and the materiality of the investment, management believes that NAV gives the best estimate of the investment's fair value.
Below is the financial information of the investee as at 30 June 2023 that was used to calculate the fair value.
30 Jun 2023 | 31 Dec 2022 | |||
Reviewed | Audited | |||
ZW$000 | ZW$000 | |||
Total assets | 2 909 022 | 2 909 022 | ||
Total liabilities | (1 321 168) | (1 321 168) | ||
Net asset value | 1 587 854 | 1 587 854 | ||
Fair value of investment (1.553% ) | 24 659 | 24 659 |
8 PROPERTY, PLANT AND EQUIPMENT
Heavy | Capital | Furniture | |||||
Land and | Plant and | mobile | work | Motor | and | ||
buildings | equipment | equipment | in progress | vehicles | and fittings | Total | |
GROUP | ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 |
Cost | |||||||
At 31 December 2021 | 2 984 661 | 1 863 378 | 815 334 | 3 871 809 | 77 112 | 47 100 | 9 659 393 |
Additions | - | 11 108 005 | - | 1 941 360 | 11 544 | 10 932 | 13 071 842 |
Transfers* | - | 21 904 870 | (118 706) | (23 457 457) | 118 706 | - | (1 552 587) |
Foreign currency translation | |||||||
exchange gain/(loss) | 13 746 714 | (4 394 237) | 1 950 453 | 19 429 777 | (38 013) | 440 097 | 30 787 834 |
At 31 December 2022 | 16 731 375 | 30 482 016 | 2 647 081 | 1 785 489 | 169 349 | 498 129 | 51 966 483 |
Additions | - | 664 768 | - | 202 453 | - | 183 888 | 1 051 109 |
Foreign currency translation | |||||||
exchange gain/(loss) | 117 215 218 | 201 634 103 | 7 121 710 | 9 271 157 | 219 223 | 3 227 025 | 338 688 437 |
At 30 June 2023 | 133 946 593 | 232 780 887 | 9 768 791 | 11 259 099 | 388 572 | 3 909 043 | 392 052 985 |
Accumulated Depreciation | |||||||
At 31 December 2021 | 237 344 | 663 051 | 379 798 | - | 39 699 | 19 659 | 1 339 551 |
Depreciation charge for | |||||||
the year | 371 461 | 1 295 724 | 942 588 | - | 85 896 | 39 735 | 2 735 405 |
At 31 December 2022 | 608 805 | 1 958 775 | 1 322 386 | - | 125 595 | 59 394 | 4 074 956 |
Depreciation charge for | |||||||
the year | 596 690 | 3 810 208 | 840 873 | - | 32 822 | 56 164 | 5 336 757 |
At 30 June 2023 | 1 205 495 | 5 768 983 | 2 163 259 | - | 158 418 | 115 557 | 9 411 713 |
Net book value | |||||||
At 31 December 2022 | 16 122 570 | 28 176 285 | 1 324 694 | 1 785 489 | 43 753 | 438 736 | 47 891 528 |
At 30 June 2023 | 132 741 097 | 227 011 904 | 7 605 532 | 11 259 099 | 230 154 | 3 793 485 | 382 641 272 |
9 RELATED PARTY TRANSACTIONS
Rentals | ||||||
charged | Services | Loans from | Services | Amount owed | Amount owed | |
by related | charged to | related | charged by | by related | to related | |
parties | related parties | parties | related parties | parties* | parties^ | |
ZW$000 | ZW$000 | ZW$000 | ZW$000 | ZW$000 | ||
Associate | ||||||
RZM Murowa (Pvt) Ltd | ||||||
Jun 2023 | - | 968 250 | 14 788 669 | - | - | 299 468 005 |
Dec 2022 | - | 505 574 | 11 053 166 | - | - | 28 684 683 |
Shareholders | ||||||
GemRioZim Investments | ||||||
Limited | ||||||
Jun 2023 | - | - | - | 1 194 601 | - | 15 823 350 |
Dec 2022 | - | - | - | 453 356 | - | 1 750 295 |
RioZim Pension Fund | ||||||
Jun 2023 | 71 642 | - | - | - | - | 516 260 |
Dec 2022 | 38 140 | - | - | - | - | 112 296 |
Directors fees | ||||||
Jun 2023 | - | - | - | 174 805 | 1 236 572 | |
Dec 2022 | - | - | - | 163 258 | - | 152 411 |
Amount owed to related parties are included in trade and other payables in the statement of financial position.
All related party outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.
Terms and conditions of transactions with related parties
Transactions with RZM Murowa (Private) Limited (Murowa)
Management fees
RioZim Limited provides administration services to Murowa under a service level agreement.
NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (cont'd)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
10 INVENTORIES
30 Jun 2023 | 31 Dec 2022 | |
Reviewed | Audited | |
ZW$000 | ZW$000 | |
Stores and consumables | 51 044 388 | 6 418 250 |
Ore stockpiles | 7 134 620 | 730 302 |
Metals and minerals in concentrates and circuit | 18 797 973 | 2 241 194 |
Finished metals | 1 475 139 | 175 874 |
78 452 120 | 9 565 620 |
Inventory write-down during the period amounted to Nil (Dec 2022 : ZW$267 622 000)
11 INTEREST-BEARING LOANS AND BORROWINGS
Effective | 30 Jun 2023 | 31 Dec 2022 | |||
Interest rate | Reviewed | Audited | |||
% | Maturity | ZW$000 | ZW$000 | ||
Current | |||||
Bank loans (facility limit US$15.5m) | 10% | On scheduled dates | 43 499 440 | 5 761 220 | |
Long term loan (Centametal AG) | 0% | December 2019* | 20 666 220 | 2 463 936 | |
64 165 660 | 8 225 156 | ||||
Non-current | |||||
Bank loans (facility limit US$15.5m) | 10% | On scheduled dates | 3 059 334 | 1 466 173 | |
3 059 334 | 1 466 173 |
* These facilities matured and are overdue (refer below on Centametal loan)
Security
Bank loans were secured by revenue assignment agreements in respect of gold proceeds.
All other interest bearing loans and borrowings are unsecured.
Centametal loan
This loan was repayable in equal monthly instalments of US$100 000 commencing on 1 July 2014 ending December 2019. The loan is interest free and is unsecured. The outstanding principal loan amount is US$3 600
000 (Dec 2022 : US$3 600 000) and has been recorded at amortised value of ZW$20 666 220 000 (Dec 2022:
ZW$ 2 463 936 000). The loan is under a legal dispute and is pending finalisation by the courts.
12 TRADE AND OTHER PAYABLES
30 Jun 2023 | 31 Dec 2022 | |||
Reviewed | Audited | |||
ZW$000 | ZW$000 | |||
Current | ||||
Trade payables | 49 433 851 | 5 515 700 | ||
Accruals | 16 413 977 | 1 684 820 | ||
Leave pay liabilities | 13 841 601 | 1 740 936 | ||
Statutory liabilities | 10 722 019 | 1 366 607 | ||
Other payables | 326 450 473 | 32 004 793 | ||
416 861 921 | 42 312 856 |
Other payables include mostly the amount due to associate company (RZM Murowa Private Limited)
Non-current | ||
Other payables | 173 679 431 | 20 706 978 |
173 679 431 | 20 706 978 |
Non-current other payables relate to BCL Limited (in liquidation) liability which is under litigation which has
been outstanding since 2016. The legal matter is not expected to be settled in the next 12 months from the reporting period, therefore the amount owing of ZW$173 679 431 000 has been classified under non-
current.
Terms and conditions of the above financial liabilities are in the ordinary course of business:
Trade and other payables are generally non-interest bearing and are normally settled on 30- 90 day terms.
13 INVESTMENT IN ASSOCIATE
The Group has a 22.2% (Dec 2022: 22.2%) interest in RZM Murowa (Private) Limited (Murowa), an unlisted diamonds mining company, operating in Zimbabwe. The associate is strategic to the Group as it brings diversity to the Group's major minerals produced which are gold and basemetals.
The Group's interest in Murowa is accounted for using the equity method in the condensed consolidated financial statements. The financial period for the associate is the same as that of the Group. The Group trades with
Murowa on an arm's length basis and there are no restrictions affect trading between the entities.
The following table illustrates the summarised carrying amount of the investment in associate Murowa :
30 June 2023 | 31 Dec 2022 | |
Reviewed | Audited | |
ZW$000 | ZW$000 | |
Carrying amount of the investment | ||
At 1 January | 18 521 109 | 2 882 544 |
Foreign currency translation gains | 141 820 672 | 15 536 416 |
Share of profit for the period | 413 890 | 102 149 |
At 30 June 2023 | 160 755 671 | 18 521 109 |
The Group has performed an impairment assessment of its investment in associate and concluded that the investment is not impaired.
14 EVENTS AFTER REPORTING PERIOD
There were no events that occurred after the reporting period end and the date when the financial statements
were authorised for issue that require adjustments to the reported amounts or disclosures.
These administrative services include corporate in-house legal services, human resources consultation and management, corporate secretarial services, IT | AUDITOR'S STATEMENT |
support services, procurement services, technical consultation, internal audit services and any other services as agreed by the parties in writing. The fees | These interim condensed consolidated financial statements have been reviewed by Mazars Registered Public |
under this agreement are 1.5% of turnover. | Auditors and an unqualified review conclusion was issued thereon. |
Transactions with Gem RioZim Investments LimitedManagement fees | The reviewer's report is available for inspection at the Group's registered office. The engagement partner for the |
Management fees are for advisory and consultation services which are rendered by GemRioZim Investments Limited. The management fees are charged at | review is Lovemore Kamuzangaza (PAAB Practicing Number 0425). |
1% of the net turnover of RioZim Group including turnover from affiliate companies and recoveries for running expenses and subsistence fees. | |
Lease of space
RioZim Limited has a commercial lease for its Head Office space from RioZim Pension Fund. The lease term will run to 30 April 2024
DIRECTORS: S R Beebeejaun (Chairman), C Dengu (Deputy Chairman), R Swami* (Chief Executive Officer), M S Bindra, G R Flanagan, M T Sachak, A P Shanghavi - Executive*
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RioZim Ltd. published this content on 06 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 October 2023 06:49:07 UTC.
