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Chief Executive Officer’s Report……………………10 …...Eastgate Complex Harare, Zimbabwe...

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  • AnnuAlRepoRt 2013

    3

    Vision……………..……….....................………………...............................................................................4

    Mission & Values……………..…....................................................................................................................5

    Corporate Information.........……………………………………...............................................................................6

    Chairman’s Statement…………………..…………………………........................................................................…..8

    Chief Executive Officer’s Report..............……………………....................................................................10

    Board of Directors……………....……………………………………...........................................................................14

    Senior Management.......…....……………………………………...........................................................................16

    Corporate Governance Report...........………………………......................................................................... 18

    Financial Statements………………………………………………........................................................................ 20

    Directors’ Responsibility Statement..........................................................................................21

    Independent Auditors’ Report.............……………………………..........................................….............22

    Statement of Financial Position............................................................................................... 24

    Statement of Profit or Loss and Other Comprehensive Income......................................25

    Statement of Changes in Reserves............................................................................................ 26

    Statement of Cash Flows.......................................................................................................... 27

    Notes to the Financial Statements.....................................................................................28-41

    ContentsNOTICE OF ANNUAL GENERAL MEETING

    NOTICE IS HEREBY GIVEN that the twenty first Annual General Meeting of ZimTrade will be held on Thursday 27 November 2014 at 08:30 hours at Cresta Lodge, Shizha Conference Room, Msasa, Harare for the purpose of transacting the following business:

    1. To confirm the Minutes of the Previous Annual General Meeting and consider the Matters Arising thereof.

    2. To receive the Chairman’s Report for the year ended 31December 2013.

    3. To receive, consider, and, if deemed fit, adopt the Financial Statements for the year ended 31 December 2013.

    4. To elect Members of the Board. In terms of Section 13 of the Constitution, Dr M. S. D. Mutopo and Mr. B. Mushohwe are due for retirement by rotation and are offering themselves for re-election. (Nomination forms are available at the addresses below).

    5. To appoint the Auditors for the ensuing year.

    In terms of Section 18.4.5 of the ZimTrade constitution, a member entitled to attend and vote at this meeting is entitled to appoint a proxy to vote and speak in his/her stead. All proxy forms must be received by ZimTrade before 16:00 hours on 25 November 2014. The forms are available at ZimTrade offices in Harare and Bulawayo.

    By Order of the Board

    P. ChangundaCOMPANY SECRETARY

    Pix

    lWrx

    ztd

    1400

    5

    HEAD OFFICE: 904 Premium Close, Mt. Pleasant Business Park, Harare, Zimbabwe; Phone: +263 4 369330-43; Fax: +263 4 369224; Email: [email protected] OFFICE: 48 Josiah Tongogara Street, Bulawayo, Zimbabwe; Phone: +263 9 66151, 62378; Fax: +263 9 62397;Email: [email protected]

    Developing Viable & Sustainable International Trade

  • AnnuAlRepoRt 2013

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    Helen Keller

    Our MissionTo provide world standard services to Zimbabwe’s exporting community so as to enhance global competitiveness, mindful of the environmental impact of business operations.

    Our VisionGrowth in prosperity and employment generation in Zimbabwe through increased trade.

    Our Values

    Client Focus

    Responsiveness

    Integrity

    Teamwork

    Innovation

  • AnnuAlRepoRt 2013

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    Corporate InfomationAnnuAl RepoRt 2013

    About ZimTradeZimTrade, the national trade development and promotion organisation, is a unique joint venture partnership between the Private Sector and the Government of Zimbabwe. It was established in 1991.

    Principal OfficesHead office904 Premium CloseMount Pleasant Business ParkP.O. Box 2738Harare, ZimbabweTel: +263 (4) 369 330-41Email: [email protected]: www.zimtrade.co.zw

    regional office48 JosiahTongogara StreetP.O. Box 3090Bulawayo, ZimbabweTel: +263 (9) 66151Email: [email protected]: www.zimtrade.co.zw

    Legal Practitioners

    dMH legal Practitioners6th Floor GoldbridgeEastgate ComplexHarare, Zimbabwe

    AuditorsBdo ZiMBaBwe cHartered accountants3 Baines AvenueHarare, Zimbabwe

    Bankers

    cBZ BanK liMited7 Selous AvenueHarare, Zimbabwe

  • AnnuAlRepoRt 2013

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    It gives me great pleasure to present to you the ZimTrade Report for the year ended 31 December 2013. The Organisation’s focus in 2013 was to position itself strategically, through the implementation of the Turnaround Strategy (2012-2017), so as to consistently provide relevant and high quality needs-based exporter services. I am pleased to report that significant progress has been made towards this objective.

    opeRAting enviRonmentZimbabwe’s economy has remained plagued by a number of macroeconomic challenges. During the year 2013, the economy registered a growth rate of 3.7% which was 0.7 percentage points lower than that for 2012. Since the introduction of the multi-currency regime in 2009, Zimbabwe’s trade performance has not been satisfactory and the trade balance widened from US$1.3 billion in 2009 to US$4.1 billion in 2013. Increasing exports, particularly those of value added products, will play a major role towards the reversal of this unsustainable situation.

    Companies in the productive sectors continue to face viability challenges due to lack of affordable long-term credit, low liquidity, electricity shortages and the use of antiquated machinery and equipment, among other issues. Owing to these challenges, capacity utilisation in the Manufacturing sector has declined to about 37.9%, according to a survey conducted by the Confederation of Zimbabwe Industries (CZI) in August 2013.

    The Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset), which was launched in October 2013, if fully implemented, has the potential to create an environment where there is increased support to manufacturing companies through the Value Addition and Beneficiation Cluster.

    ZimtRAde’s FinAnciAl peRFoRmAnceThe financial performance of the Organisation improved significantly during the year under review. Total income grew by 75% to US$2 550 489 in 2013 from US$1 457 154 in 2012. The private sector contribution to the Organisation’s income has continued to increase with the Trade Development Surcharge accounting for 94% of the total income in 2013 in comparison to 88% in 2012.

    Expenditure for 2013, at US$1 535 715, grew by 53% from previous year on account of increased programme activities and recruitment of staff made to enhance internal capacity to deliver on these programmes.

    A surplus of US$1 014 774 was recorded for the year due to delays in the finalisation of recruitment and eventual roll-out of programmed activities.

    The Statement of Financial Position shows a healthy current ratio of 24:1. Non-current assets grew by 96% to US$568 153.

    diRectoRAteMr. S. Jabangwe was elected at the 2013 Annual General Meeting and we welcome him onto the Board. Mr. M. Mazimbe left the Board at the end of the 2013 AGM. We wish him success in his future endeavours.

    outlookThe Organisation remains focussed on its mandate, that is, trade development and promotion to meaningfully contribute towards the resuscitation of industries and subsequent reversal of the unsustainable trade deficit.

    The Organisation remains guided by the Turnaround Strategy (2012-2017) as it endeavours to deliver value to its clients and stakeholders. In this regard, we will continue to provide relevant and high quality needs-based exporter services with special focus on external export market development activities. AcknowledgementsI wish to extend my gratitude to the ZimTrade Chief Executive Officer, Ms. Sithembile P. Pilime, and to the management and staff for their dedication and committment to duty that has enabled ZimTrade to effectively carry out its mandate.

    I further express my appreciation to my fellow Directors for their valuable contributions and to all our clients and Stakeholders for their continued support during the year.

    J. sizibacHAiRmAnHARARE

    09 June 2014

    Chairman’s StatementAnnuAl RepoRt 2013

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    intRoduction

    The year 2013 proved yet again to be very challenging for Zimbabwe’s productive sector in general, and exporters in particular.

    The same issues, such as acute liquidity shortages, lack of affordable finance, unreliable supply of enablers (electricity, water)

    and infrastructure bottlenecks, among others, continued to take their toll on the economy resulting in further decline in capacity

    utilisation and, in some cases, company closures (de-industrialisation).

    Zimbabwe’s capacity to produce value-added products for both the domestic and export markets has thus been severely

    compromised. As a result, the contribution of manufactured exports to total exports remained very subdued at 9% in 2013.

    The country’s exports remain skewed in favour of crude materials (i.e. minerals and unprocessed agricultural products), thus

    reducing export earnings.

    Zimbabwe’s balance of trade has remained negative since 2009, despite the noticeable stabilisation of the economic situation.

    According to Zimstat, the country’s trade deficit increased from US$3.6 billion in 2012 to US$4.2 billion in 2013 (see Fig. 1

    below).

    CEO’s ReportAnnuAl RepoRt 2013

    Zimbabwe Trade Balance

    -6

    -4

    -2

    0

    2

    4

    6

    8

    10

    2009 2010 2011 2012 2013

    Exports US$ Imports US$ Trade Deficit US$

    US$

    Billi

    on

    Fig. 1: Zimbabwe’s Trade Performance 2009 - 2013

  • AnnuAlRepoRt 2013

    AnnuAlRepoRt 2013

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    who exchanged ideas on value chains and proposed solutions

    to challenges that are hindering the growth of value added

    exports. It stimulated interest in value chains as a strategy

    for restoring export capacity and competitiveness.

    ZimTrade, in collaboration with the Confederation of

    Zimbabwe Industries (CZI), carried out the local export

    manufacturing capacity survey during the last quarter

    of 2013. The survey provided up-to-date information on

    the Zimbabwean manufacturing sector, necessary for the

    implementation of pro-export development strategies as well

    as advocating for effective policy and technical interventions

    for the growth of exports.

    The survey findings and recommendations have since

    provided the basis for an informed lobby to Government for

    a conducive business operating environment. The full survey

    report was released in April 2014.

    The delivery of the Export Marketing Training Programme

    (EMTP), which was traditionally conducted in Harare and

    Bulawayo, was extended to Kwekwe in recognition of the

    need to inculcate an export culture across the country.

    In November 2013 the Geneva-based International Trade

    Centre (ITC), the joint agency of the World Trade Organisation

    and the United Nations, conducted a benchmarking exercise

    of ZimTrade. ITC’s benchmarking provides trade support

    institutions around the world with an independent and

    objective assessment of their efficiency and institutional

    perfomance in relation to the good practices of similar

    organisations.

    The benchmarking excersice recognised that whilst ZimTrade

    had severely gone down during the period of economic

    down-turn, it was now on a strong recovery path. In their

    report the ITC described ZimTrade as “... now rising, phoenix-

    like, to operate at the levels that are required and expected

    by its clients and stakeholders”. The report acknowledges

    that the journey is still in its early stages. We, therefore, are

    determined to continue on this growth trajectory to ensure

    that you, our clients, receive support services commensurate

    with those received by your counterparts worldwide.

    outlook

    ZimTrade will continue to engage stakeholders and authorities

    to lobby for the improvement of the business operating

    environment based on the findings and recommendations

    of the Local Export Manufacturing Capacity Survey.

    Furthermore, these surveys will be continued focusing on

    specific sectors to maximise the prospects of targeted

    technical interventions to address the needs of exporters.

    The TPSDP will have a medium-to-long term impact to

    improving access to trade information and related market

    intelligence - all of which are key instruments to enhancing

    export competitiveness.

    AppReciAtion

    I would like to express my appreciation to the ZimTrade

    Board for their guidance, as well as to the Ministry of Industry

    & Commerce and Stakeholders for their continued support.

    I wish to extend my gratitude to Development Cooperation

    Partners and Sponsors for their timely assistance that has

    facilitated the successful execution of our programmes.

    These include the EU, COMESA, ITC, CBZ Bank, Old Mutual,

    Stanbic Bank, Lonhro/Rollex, Credsure, Ethiopian Airlines,

    Allen Wack and Shepherd, and the Meikles Hotel.

    I would also like to thank Management and Staff for their

    hard work and commitment to quality service delivery.

    s. p. pilime (ms.)

    CHIEF EXECUTIVE OFFICER

    HARARE

    09 June 2014

    There is urgent need for appropriate interventions in order

    to contain the unsustainable trade imbalance. We are

    encouraged that the Government launched the Zimbabwe

    Agenda for Sustainable Socio-Economic Transformation

    (Zim Asset) last year. Zim Asset’s focus on value-addition and

    beneficiation of our natural resources as well as the proposed

    setting up of Special Economic Zones should have a positive

    impact on the country’s economic turnaround.

    ZimtRAde opeRAtions

    In line with its Turnaround Strategy (2012-2017), ZimTrade’s

    programmes in 2013 focused on external market research

    and export promotional activities in the region covering SADC

    and COMESA. Other activities carried out include capacity

    building of the organisation and small to medium enterprises,

    trade facilitation and advocacy as well as dissemination of

    information to exporters and other stakeholders.

    A major corporate realignment exercise of the organisation

    was undertaken in order to improve operational efficiency. This

    was part of an initiative that sought to align internal capacities

    towards the effective delivery of ZimTrade’s mandate. The

    process resulted in the adoption of a new organisational

    structure that has guided the recruitment of new staff.

    Thus, 2013 was a year of rebuilding the organisation. The

    recruitment excercise was only completed in 2014.

    During the year under review, ZimTrade also engaged the

    European Union (EU) to consider a project proposal for the

    redevelopment of the Trade Information Centre (TIC), the

    capacity building of ZimTrade staff and the review of the SME

    Capacity Building Programme. This was accepted by the EU

    and subsequently included under its Trade and Private Sector

    Development Programme (TPSDP), which is a programme for

    technical support to Zimbabwe covering a number of trade

    and business support organisations, commencing 2014.

    Following the success of the market development initiatives

    that ZimTrade carried out in Tete in 2012, a comprehensive

    field export market research was undertaken in the Tete,

    Nampula and Niassa Provinces of Mozambique. The research

    identified export and export-related investment opportunities

    in the three provinces. The findings were shared with the

    business community through information dissemination

    seminars that were held in Harare, Kwekwe and Bulawayo.

    Programmes to facilitate Zimbabwean companies to explore

    opportunities in these provinces are planned, starting with a

    second Trade Mission to Tete in August 2014.

    In order to support the revival of the Clothing Sector, ZimTrade,

    in conjunction with the Zimbabwe Clothing Manufacturers’

    Association, participated at the African Textile, Apparel &

    Footwear Trade Event (Source Africa) that was held in Cape

    Town, South Africa. Participation created awareness of the

    quality of the Zimbabwean clothing products to international

    buyers and investors.

    Further support to the Clothing Sector was extended through

    sponsorship of the Clothing Indabas that were held in Harare

    and Bulawayo under the theme “Made in Zimbabwe”. The

    objective of the Indabas was to create awareness amongst

    stakeholders in Zimbabwe and further afield, of the capability

    of the local Clothing Sector to produce quality competitive

    products.

    Six emergent SME exporters were facilitated by ZimTrade to

    participate at the 2013 Zimbabwe International Trade Fair

    (ZITF). This facilitation is part of ZimTrade’s programme to

    build capacity for new exporters.

    For the second year running, ZimTrade has successfully

    hosted its Annual Exporters’ Conference and Exporter of

    the Year Awards. The theme for the 2013 Conference and

    Awards was, “value chain Business models – the key to

    export competitiveness.”

    The Conference successfully brought together participants

  • AnnuAlRepoRt 2013

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    Board of Directors

    J. sizibachAirmAn

    S. P. Pilime (ex-officio)cHieF executive oFFiceR

    P. ChangundacompAny secRetARy

    M. S. D. Mutopo D. Mushayavanhu T. NdlelaB. Mushohwe

    M. B. Mpofu

    * The Board of Directors also includes B. Mutetwa (Picture not included).

    D. NorupiriS. Jabangwe

  • AnnuAlRepoRt 2013

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    Management

    s. p. pilimechief execuTive Officer

    T. MarufuFinAnce mAnAgeR

    C. TsimbatRAde inFoRmAtioncenteR mAnAgeR

    R. ChizemadiRectoR: opeRAtions

    P. ChangundadiRectoR: FinAnce &AdministRAtion & compAny secRetARy

    V. MafutRAde development & expoRt pRomotion mAnAgeR

    S. NkalaRegionAl mAnAgeR:BulAwAyo

    D. KamutengapuBlic RelAtionsoFFiceR

    A. Majurusme expoRt developmentmAnAgeR

    T. Mbizvosystems AdministRAtoR

    R. MufutumariHumAn ResouRcesoFFiceR

  • AnnuAlRepoRt 2013

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    intRoduction

    ZimTrade is committed to maintaining the highest standards

    of Corporate Governance and is guided by the principles of

    sound Corporate Governance applicable in Zimbabwe. Good

    Corporate Governance is the responsibility of the Board and

    hence their obligation to exercise due care whilst acting in

    good faith to safeguard all stakeholders’ interests.

    memBeRsHip oF tHe BoARd

    The Board of Directors comprises 11 members. In terms of

    section 11 of the ZimTrade Constitution, 4 of the Directors

    are elected by the ZimTrade members at their Annual General

    Meeting (AGM) and 5, including the Chairman, are appointed

    by the Minister of Industry and Commerce in the Government

    of Zimbabwe. The Chief Executive Officer and the Director

    for Finance and Administration are ex-officio members of

    the Board. Two of the Board members elected at the AGM

    retire after two years. Three of the Directors appointed by the

    Minister retire after the first two years with the remaining two

    retiring after the second two years.

    ResponsiBilities oF tHe BoARd

    The ZimTrade Board is governed by the organisation’s

    Constitution, which spells out its duties and responsibilities.

    Besides providing strategic direction, the Board is charged

    with key governance issues such as providing sound risk

    management and effective systems of internal control.

    Overall, the Board is entrusted with ultimate responsibility

    for the management, direction and performance of the

    Organisation. The Board delivers its mandate through

    three committees and these are the Export Development

    Committee, Finance and Audit Committee and Human

    Resources & Premises Committee.

    These Committees are made up of the members of the

    Board and are charged with specific responsibilities under

    their respective Terms of Reference.

    Finance and Audit committee

    The Committee comprises 3 non-executive members and

    meets 4 times per year. The Committee is charged with the

    key corporate governance issues such as risk management,

    review of the effectiveness of internal controls, budget

    approval and review, compliance as well as consideration of

    reports for both internal and external auditors.

    Human Resources and premises committee

    The Committee comprises 3 non-executive members and

    meets 4 times per year. The Committee assists the Board on

    matters relating to remuneration policies and staff welfare,

    appointment of the Chief Executive Officer and Senior

    Management as well as determining their remuneration.

    In addition, the Committee looks into matters relating to

    organisational premises.

    export development committee

    The Committee comprises 3 non-executive members and

    meets 4 times per year. The Committee assists the Board

    through providing strategic direction in the development and

    review of the Annual Work Programme.

    AttendAnce At scHeduled meetings oF tHe BoARd

    And BoARd committees in tHe 2013 FinAnciAl yeAR

    The Board discharges its responsibilities through scheduled

    and ad-hoc meetings. With regard to scheduled meetings, the

    Board meets once every quarter to review the performance

    of the Organisation. Key matters for consideration at all

    Board meetings include the Chief Executive Officer’s Report,

    the Finance Report as well as Committee Reports. During

    the period under review, 4 scheduled Board meetings and

    18 ad-hoc meetings were held. During the same period

    12 scheduled Committee meetings (from the 3 Board

    Committees) and 4 ad-hoc committee meetings were held.

    p. changunda

    COMPANY SECRETARY

    HARARE

    09 June 2014

    Main Board

    Member Attendance/Meetings J. Siziba 4/4S. P. Pilime * 4/4P. Changunda ** 2/2S. Jabangwe 2/2 M. Mazimbe *** 2/2M. B. Mpofu 4/4D. Mushayavanhu 3/4B. Mushohwe 4/4B. Mutetwa 3/4M. S. D. Mutopo 2/4T. Ndlela 4/4D. Norupiri 4/4

    Finance & Audit Committee

    Member Attendance/Meetings M. B. Mpofu 4/4S. P. Pilime * 4/4P. Changunda ** 2/2S. Jabangwe 2/2B. Mushohwe 4/4D. Norupiri 0/2

    Human Resources & Premises Committee

    Member Attendance/Meetings D. Norupiri **** 2/2S. P. Pilime * 4/4P. Changunda ** 2/2 M. Mazimbe 2/2D. Mushayavanhu 3/4 J. Siziba 4/4

    Export Development Committee

    Member Attendance/Meetings T. Ndlela 4/4 S. P. Pilime * 4/4P. Changunda ** 2/2B. Mutetwa 3/4M. S. D. Mutopo 4/4

    Corporate Governance Report

    S. P. Pilime & P. Changunda are ex-officio members of the Board

    * S. P. Pilime was appointed to the Board on 26 June 2013

    ** P. Changunda was appointed to the Board on 01 September 2013

    *** M. Mazimbe retired from the Board on 26 June 2013

    **** D. Norupiri was appointed to the Human Resources & Premises Committee on 04 September 2013

  • AnnuAlRepoRt 2013

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    FinancialStatementsfor the year ended 31 december 2013

    The Directors are required by the Organization’s

    Constitution to maintain adequate accounting records

    and are responsible for the content and integrity of the

    financial statements and related financial information

    included in this report. It is their responsibility to ensure

    that the financial statements fairly present the state of

    affairs of the Organization as at the end of the financial

    year and the results of its operations and cash flows for

    the year then ended, in conformity with International

    Financial Reporting Standards.

    The Directors acknowledge that they are ultimately

    responsible for the system of internal financial

    control established by the Organization and place

    considerable importance on maintaining a strong

    control environment. To enable the Directors to meet

    these responsibilities, Management set standards for

    internal control aimed at reducing the risk of error or

    loss in a cost effective manner. The standards include

    the proper delegation of responsibilities within a clearly

    defined framework, effective accounting procedures

    and adequate segregation of duties to ensure an

    acceptable level of risk. These controls are monitored

    throughout the Organization and all employees are

    required to maintain the highest ethical standards in

    ensuring the Organization’s business is conducted

    in a manner that in all reasonable circumstances is

    above reproach. The focus of risk management in the

    Organization is on identifying, assessing, managing

    and monitoring all known forms of risk across the

    Directors’ Responsibility Statement

    J. SizibaCHAIRMAN

    S. P. Pilime (Ms.)CHIEF EXECUTIVE OFFICER

    09 June 2014

    Organization. While operating risk cannot be fully

    eliminated, the Organization endeavours to minimize

    it by ensuring that appropriate infrastructure, controls,

    systems and ethical behaviour are applied and managed

    within predetermined procedures and constraints.

    The Directors are of the opinion, based on the information

    and explanations given by Management, that the system

    of internal control provides reasonable assurance that

    the financial records may be relied on for the preparation

    of the financial statements. However, any system of

    internal financial control can provide only reasonable and

    not absolute assurance against material misstatement

    or loss.

    The Directors have assessed the ability of the Organization

    to continue operating as a going concern and believe that

    the preparation of the financial statements on a going

    concern basis is still appropriate.

    The external auditors are responsible for independently

    auditing and reporting on the Organization’s financial

    statements. The financial statements and related notes

    have been audited by the Organization’s external auditors

    and their report is presented on pages 22 to 23.

    The financial statements and the related notes set out on

    pages 24 to 41, which have been prepared on the going

    concern basis, were approved by the Board and were

    signed on its behalf by:

  • AnnuAlRepoRt 2013

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  • AnnuAlRepoRt 2013

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    Statement of Financial Positionas at 31 December 2013

    ZIMTRADE

    STATEMENT OF FINANCIAL POSITION

    as at 31 December 2013

    2013 2012ASSETS Note US$ US$

    Non current assetsProperty and equipment 4 568,153 289,370

    Current assetsInventories 5 6,581 4,406 Accounts receivable 6 56,035 16,064 Cash and cash equivalents 7 1,104,315 457,333

    1,166,931 477,803

    Total assets 1,735,084 767,173

    RESERVES AND LIABILITIES

    ReservesNon distributable reserve 345,826 345,826 Revaluation reserve 70,476 70,476 Accumulated surplus 1,269,398 254,624

    1,685,700 670,926

    Current liabilitiesAccounts payable 8 49,384 96,247

    Total reserves and liabilities 1,735,084 767,173

    CHAIRMAN

    ACTING CHIEF EXECUTIVE OFFICER

    06 March 2014

    5

    J. SizibaCHAIRMAN

    S. P. Pilime (Ms.)CHIEF EXECUTIVE OFFICER

    09 June 2014

    Statement of Profit or Lossand Other Comprehensive Incomefor the year ended 31 december 2013

    ZIMTRADE

    STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor the year ended 31 December 2013

    2013 2012Note US$ US$

    INCOME 2,550,489 1,457,154 Trade development surcharge 2,402,328 1,285,888 Government grant 5,000 51,000 Finance income 32,794 5,836 Fees for services and publication sales 24,084 43,018 Donations 37,980 28,240 Member subscriptions - 250 Event participation fees 22,170 42,021 Other income 26,133 901

    EXPENDITURE (1,535,715) (1,003,597) Board and governance expenses 9 (112,762) (74,128) Employment expenses-administration 10.1 (208,973) (104,286) Employment expenses-direct export development 10.2 (332,619) (312,856) Direct export development expenses 11 (622,667) (278,236) General administration expenses 12 (258,694) (234,091)

    SURPLUS FOR THE YEAR 1,014,774 453,557

    Other comprehensive income - -

    Items that will not be reclassified to profit or loss - -

    Items that will or may be reclassified to profit or loss - -

    Total comprehensive income 1,014,774 453,557

    6

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    Statement of Changes in Reservesfor the year ended 31 december 2013ZIMTRADE

    STATEMENT OF CHANGES IN RESERVESfor the year ended 31 December 2013

    TotalUS$ US$ US$ US$

    Balance at 1 January 2012 345,826 70,476 (198,933) 217,369

    Total comprehensive income for the year - - 453,557 453,557

    Balance at 31 December 2012 345,826 70,476 254,624 670,926

    Total comprehensive income for the year - - 1,014,774 1,014,774

    Balance at 31 December 2013 345,826 70,476 1,269,398 1,685,700

    Non distributable reserve

    Non distributable

    reserveRevaluation

    reserve

    Accumulated surplus/ (deficit)

    Non distributable reserve arose as a result of the restatement of assets values from Zimbabwe dollars to UnitedStates dollars on 1 January 2009.

    7

    Statement of Cash FlowsZIMTRADE

    STATEMENT OF CASH FLOWSfor the year ended 31 December 2013

    2013 2012Note US$ US$

    CASH FLOWS FROM OPERATING ACTIVITIES

    Surplus for the year 1,014,774 453,557 Adjustments for:Depreciation of property and equipment 104,768 22,563 Loss on disposal of property and equipment 15,482 407 Finance income (32,794) (5,836) Cash generated before changes in working capital 1,102,230 470,691

    Working capital changes:Increase in inventories (2,175) (2,601) (Decrease)/increase in accounts payable (46,863) 35,468 Increase in accounts receivable (39,971) (7,437) Net cash generated from operating activities 1,013,221 496,121

    CASH FLOWS FROM INVESTING ACTIVITIES

    Addition or replacement of property and equipment (405,735) (122,851) Proceeds from disposal of property and equipment 6,702 413 Finance income 32,794 5,836 Net cash flows utilised in investing activities (366,239) (116,602)

    INCREASE IN CASH AND CASH EQUIVALENTS 646,982 379,519 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 457,333 77,814 CASH AND CASH EQUIVALENTS AT END OF YEAR 7 1,104,315 457,333

    8

    for the year ended 31 december 2013

  • AnnuAlRepoRt 2013

    AnnuAlRepoRt 2013

    28 29

    Notes to the Financial Statementsfor the year ended 31 december 2013

    1. geneRAl inFoRmAtion

    1.1 nature of businessThe main activity of the Organization is to develop and promote trade between Zimbabwe and other countries.

    The registered address of the Organization is: 904 Premium Close, Mt Pleasant, Harare

    1.2 currencyThe Organization’s functional and presentation currency is the United States of America dollar (“US$”).

    2. Accounting policies

    2.1 Basis of preparationThe principal accounting policies adopted in the preparation of financial statements are set out below. Except for the reclassification of expenses in the prior year, the policies have been consistently applied. The reclassification was done so as to fairly present the financial statements.

    These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB).

    The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates. It also requires the Organization’s management to exercise judgment in the most appropriate application in complying with the Organization’s accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effects are disclosed on note 3.

    2.2 changes in accounting policy and interpretationsa) New standards, interpretations and amendments effective from 1 January 2013The following new standards, amendments and interpretations are effective for the first time in these financial statements but have not had a material effect on the Organisation:

    • Additional disclosures required in relation to information about rights of offset and related arrangements for financial instruments under an enforceable master netting arrangement (or similar arrangement). (Amendment to IFRS 7 Financial Instruments: Disclosure - Offsetting financial assets and liabilities)

    • Single framework has been established for measuring fair value of financial and non-financial items recognised at fair value (IFRS 13 Fair Value Measurement)

    • Amendments to align the presentation of items of other comprehensive income (OCI) with US GAAP. Name changes of statements in IAS 1 have been made ( IAS 1 Presentation of Financial Statements)

    • Elimination of the ‘corridor’ approach for deferring gains/losses for defined benefit plans, recognition of actuarial gains/losses on remeasuring the defined benefit plan obligation/asset in other comprehensive income rather than in profit or loss, and not being reclassified in subsequent periods, and amendments to timing for recognition of liabilities for termination benefits (IAS 19 Employee Benefits)

    • IAS 32 Amendment to IAS 32 Financial Instruments: Presentation -Offsetting financial assets and financial liabilities

    • IAS 32 Financial Instruments: Presentation- accounting for income taxes.

    b) New standards, amendments and interpretations not yet effective and not early adoptedThe following new standards, interpretations and amendments, which have not been applied in these financial statements, will or may have an effect on the Organisation future financial statements:

    -IFRS 9 Amendment to IFRS 9 Financial Instruments: Defers the effective date of IFRS 9 to 1 January 2015. Entities are no longer required (but are still permitted) to restate comparatives on first time adoption. Instead, additional disclosures on the effects of transition are required disclosures required in relation to information about rights of offset and related arrangements for financial instruments under an enforceable master netting arrangement (or similar arrangement).

    Applicable for annual reporting periods commencing on or after 1 January 2015.As comparatives are no longer required to be restated, if an entity takes advantage of the relief there will be no impact on comparative information that is presented in the financial statements. However, additional disclosures will be required on transition, including the quantitative effects of reclassifying financial assets on transition.

    IFRS 9 Financial Instruments Amends the requirements for classification and measurement of financial assets. The available-for-sale and held-to-maturity categories of financial assets in IAS 39 have been eliminated. Under IFRS 9, there are three categories of financial assets:

    - Amortised cost;- Fair value through profit or loss; and- Fair value through other comprehensive income.

    The effective date of IFRS 9 is still to be determined. The Organisation has not yet made an assessment of the impact of these amendments.

    -IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) - Makes three amendments to IFRS 9:- Adds new hedge accounting requirements into IFRS 9;- Defers the effective date of IFRS 9; and- Makes available for early adoption the presentation of changes in ‘own credit’ in other comprehensive income (OCI) for

    financial liabilities that are accounted for using the fair value option without the need to apply the other requirements of IFRS 9.

    Under the new hedge accounting requirements:- The 80-125% highly effective threshold has been removed;- Risk components of non-financial items can qualify for hedge accounting provided; that the risk component is separately

    identifiable and reliably measurable;- An aggregated position (i.e. combination of a derivative and a non-derivative) can qualify for hedge accounting provided that

    it is managed as one risk exposure;- When entities designate the intrinsic value of options, the initial time value is deferred in OCI and subsequent changes in time

    value are recognised in OCI;- When entities designate only the spot element of a forward contract, the forward points can be deferred in OCI and subsequent

    changes in forward points are recognised in OCI. Initial foreign currency basis spread can also be deferred in OCI with subsequent changes be recognised in OCI; and

    - Net foreign exchange cash flow positions can qualify for hedge accounting.

    The effective date of IFRS 9, of periods beginning on or after 1 January 2015, was removed and left open until all other outstanding phases of IFRS 9 have been completed. The Organisation has not yet made an assessment of the impact of these amendments.

    -IFRS 7 Financial Instruments: Disclosure - Offsetting financial assets and financial liabilitiesAdditional disclosures required in relation to information about rights of offset and related arrangements for financial instruments under an enforceable master netting arrangement (or similar arrangement).

    2.2 changes in accounting policy and interpretations (continued...)

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

  • AnnuAlRepoRt 2013

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    30 31

    Minimum disclosure requirements, in a tabular format that splits financial assets and financial liabilities, are:(a) Gross financial assets and liabilities under a master netting (or similar) agreement;(b) The amounts offset under IAS 32;(c) The net amount presented in the statement of financial position (i.e. (a) - (b));(d) The amounts subject to an enforceable master netting agreement (or similar) not included in the amount offset under IAS 32 (i.e. (b)), being those that fail to meet the offsetting criteria as well as those related to financial collateral, and(e) The net of (d) less (c);

    Applicable to periods commencing on or after 1 January 2014. As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. Currently, the Organisation does not have (and is unlikely to have) any enforceable master netting (or similar) arrangements in place, and therefore the amendment will not add any additional quantitative and qualitative disclosures.

    IAS 32- Amendment to IAS 32 Financial Instruments: Presentation (amended December 2011 and effective annual periods commencing on or after 1 January 2014)

    Offsetting financial assets and financial liabilities.

    The amendment has clarified and expanded the application guidance in relation to the offsetting of financial assets and financial liabilities in respect of:-

    • The meaning of ‘currently has a legally enforceable right of set-off.• The application of simultaneous realisation and settlement. • The offsetting of collateral amounts. • The unit of account for applying the offsetting requirements.

    When this amendment is first adopted for 31 December 2014 year end, there will be no impact in respect of the accounting treatment for offsetting the Organisation’s financial assets and financial liabilities.

    - IAS 36 Impairment of Assets (Amendment to IAS 36 Impairment of Assets - Recoverable amount disclosures for non-financial assets -The amendment introduces narrow scope amendments that:

    - Require the disclosure of the recoverable amount of an asset (or CGU) only in periods in which impairment has been recorded or reversed in respect of that asset (or CGU).

    - Expand and clarify the disclosure requirements when an assets (CGUs) recoverable amount has been determined on the basis of fair value less disposal.

    - Specifically require the disclosure the discount rate when an asset (or CGU) has been impaired (or impairment reversed) where the recoverable amount has been determined based on fair value less costs of disposal using a present value technique.

    Application date is for annual reporting periods commencing on or after 1 January 2014.As this is a disclosure standard only, there will be no impact on amounts recognised in the primary financial statements. However, the amount of information disclosed regarding impairment may be reduced.

    None of the other new standards, interpretations and amendments, which are effective for the periods beginning after 1 January 2014 and which have not been adopted early, are expected to have a material effect on the future financial statements.

    2.3 RevenueRevenue comprises the fair value of the consideration received or receivable for services in the ordinary course of the Organization’s activities. Revenue is recognised as follows:

    2.2 changes in accounting policy and interpretations (continued...)

    2.3.1 trade development surcharge levyThe trade development surcharge is accounted for on a receipt basis.

    2.3.2 government grantsThe Organization’s Government grants are related to income. These are recognized in profit and loss on a systematic basis over the period in which the Organization recognises as expenses the related costs for which the grants are intended to compensate.

    2.3.3 donationsDonations are recognised on a receipt basis.

    2.3.4 interest incomeInterest income is recognized on a time proportion basis taking account of the principal outstanding and effective rate over the period to maturity.

    2.3.5 other incomeOther income is recognised on an accrual basis.

    2.4 Financial instruments

    2.4.1 Financial assetsThe Organization classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. The Organization has not classified any of its financial assets as held to maturity.

    2.4.1.1 Loans and receivablesThese assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of loans to staff and prepayments for services. They are initially recognized at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

    Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Organisation will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For advances, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within operating expenses in the statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

    2.4.1.2 Derecognition of financial assetsFinancial assets are derecognized when the rights to receive cash flows from financial assets have expired or where they have been transferred and the Organization has also transferred substantially all risks and rewards of ownership. Gains and losses are recognized in income statement when the financial assets are derecognized or impaired, as well as through the amortization process.

    2.4.1.3 Impairment of financial assets A financial asset is deemed to be impaired when its carrying amount is greater than its estimated receivable amount, and there is evidence to suggest that the impairment occurred subsequent to the initial recognition of the asset in the financial statements.

    2.4.1.4 Impairment of other non-financial assets Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. Assets that

    2.2 changes in accounting policy and interpretations (continued...)

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

  • AnnuAlRepoRt 2013

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    32 33

    are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

    The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses are recognised in the statement of profit or loss and comprehensive income. When an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash generating unit) in prior years. A reversal of the impairment loss is recognised as income immediately unless the relevant asset is carried at a revalued amount in which case the reversal of the impairment loss is treated as an increase in the revaluation reserve.

    2.4.2 Financial liabilities The Organization’s financial liabilities comprise trade and other payables. These are initially recognised at fair value and subsequently carried at amortised cost using effective interest method.

    2.4.3 cash and cash equivalents Cash and cash equivalents include bank balances, cash on hand, deposits held on call with banks and other short term highly liquid investments readily convertible to known amounts of cash with original maturities of three months or less.

    2.5 Retirement benefitsContributions to defined contribution pension schemes are charged to the statement of profit or loss in the year to which they relate.

    2.6 Property and equipmentItems of property and equipment are initially recognized at cost. As well as the purchase price, cost includes directly attributable costs and the estimated present value of any future unavoidable costs of dismantling and removing items. Items of property and equipment are subsequently measured at cost less subsequent depreciation and accumulated impairment losses.

    Depreciation is provided on items of property and equipment to write off the carrying value of items over their expected useful economic lives.

    Freehold buildings - 2% per annum straight lineMotor vehicles - 25% per annum straight lineFurniture and fittings - 10% per annum straight lineOffice equipment - 10% per annum straight lineComputer equipment - 33% per annum straight lineLeasehold improvements - 33% per annum straight line

    The assets’ residual values and useful lives are reviewed at each reporting date and adjusted if appropriate. The residual value of an asset is the estimated amount that would currently be obtained from disposal of the asset, after deducting the estimated costs of disposal, if the asset was already of the age and in condition expected at the end of its useful life. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

    Derecognition of property and equipment An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from use or disposal. Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These

    gains and losses are included in the income statement.

    2.7 income taxThe Organization is not liable for income tax as it is exempt in terms of the 3rd schedule of the Income Tax Act (Chapter 23:06).

    2.8 inventoriesThe inventories of the Organization comprise of stationery and fuel coupons. Inventories are initially measured at cost and are subsequently stated at the lower of cost and net realisable value.

    3. cRiticAl Judgements in Applying tHe oRgAniZAtion’s Accounting policies

    In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts presented in the financial statements and related disclosures. Use of available information and the application of judgment is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements. Significant judgments include:

    (a) Accounts receivableThe Organization assesses its receivables for impairment at each reporting date. In determining whether an impairment loss should be recorded in the financial statements, the Organization makes judgments as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

    (b) Impairment testingThe Organization assesses its property, vehicles and equipment for impairment at each reporting date. Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying amount of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate.

    (c) Residual values and useful livesThe Organization is required to assess the remaining useful lives of its property, vehicles and equipment on an annual basis. This affects the amount of depreciation that is recognized in the statement of financial position. Management assessed residual values at nil for equipment as it intends to use the assets until the end of their economic useful lives.

    2.6 property and equipment (continued...)

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

  • AnnuAlRepoRt 2013

    AnnuAlRepoRt 2013

    34 35

    ZIM

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    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    2013 2012US$ US$

    5 INVENTORIES

    Fuel 2,743 2,977 Stationery 3,838 1,429

    6,581 4,406

    6 ACCOUNTS RECEIVABLE

    Prepayments 17,400 4,626 Staff Loans 35,669 - Other 2,966 11,438

    56,035 16,064

    7 CASH AND CASH EQUIVALENTS

    Cash balances 142 683 Bank balances 642,095 375,013 Money market investments 462,078 81,637

    1,104,315 457,333

    8 ACCOUNTS PAYABLE

    Leave pay provision 19,728 29,435 Other 29,656 66,812

    49,384 96,247

    9 BOARD AND GOVERNANCE EXPENSES

    Audit fees 8,994 6,885 Board fees 71,582 29,366 Board travel and subsistence 21,819 9,230 Withholding tax on directors' fees - 23,690 Annual general meeting costs 10,367 4,957

    112,762 74,128

    18

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    -

  • AnnuAlRepoRt 2013

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    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    2013 2012US$ US$

    10 EMPLOYMENT EXPENSES

    10.1Salaries and allowances 152,762 73,109 Pension costs 12,918 5,459 ZIMDEF 1,561 2,876 Medical aid 10,568 9,024 Funeral assurance contribution 66 183 Bonus pay provision 10,345 4,892 Leave pay provision 3,087 3,540 Recruitment costs 1,870 1,335 Staff welfare 15,796 3,868

    208,973 104,286

    10.2

    Salaries and allowances 224,929 219,328 Pension costs 24,816 16,377 ZIMDEF 4,682 8,628 Medical aid 20,249 27,070 Funeral assurance contribution 198 549 Bonus pay provision 12,345 14,675 Leave pay provision 9,261 10,619 Recruitment costs 5,610 4,005 Staff welfare 30,529 11,605

    332,619 312,856

    11 DIRECT EXPORT DEVELOPMENT EXPENSESExhibitions, fairs and missions 51,422 45,578 Exporters conference 115,957 53,782 Local industry survey (Export capacity) 18,618 - Information systems maintenance 17,199 3,246 Market researches -Foreign 28,864 28,864 Networking/Benchmarking Programmes 1,834 - Publications/Certificates of origin 19,371 7,216 Quality management systems -ISO certification 5,112 12,707 Seminars and workshops 37,207 20,036 Sponsorship (Export promotion) 12,000 - Travelling and subsistence -External 29,813 7,295 Client entertainment 120 - Professional fees, consultancy and business development 89,859 14,433 Promotions, advertising and publicity 15,702 2,010 Telecommunications 27,165 20,374 Motor vehicle repairs and fuel -Management 14,080 23,695 Motor vehicle repairs and fuel -Pool cars 27,633 20,528 Depreciation -Management vehicles 46,564 6,073 Depreciation -Pool cars 20,695 3,435 Subscriptions 6,740 7,370 People development programme 34,631 - Training and people development 2,081 1,594

    622,667 278,236

    Employment expenses-Direct export development

    Employment expenses-administration

    Employment expenses amounting US$332 619 were incurred in relation to direct export development and have been included under note 10 above.

    19

    Employemnt expenses amounting to US$332,610 were incurred in relation to direct export development and have been included under note 10 above.

    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    2013 2012US$ US$

    12Bank charges 8,356 6,066 Electricity, water and rates 17,742 12,490 Insurance 25,223 7,462 Legal expenses 1,955 - Training and development 694 531 Rent 100,464 85,402 Security 8,115 7,668 ATMP project deficit - 37,180 Telecommunication costs 3,018 2,264 Loss on disposal of assets 15,482 407 Repairs and maintenance 14,721 14,877 Bad debts written off 5,330 62 Penalty on withholding tax on directors fees - 23,690 Interest on withholding tax on directors fees - 2,369 Stationery and office supplies 14,349 13,996 Other general expenses 1,043 3,027 Depreciation expense -Other assets 21,988 11,049 Depreciation -Management vehicles 15,521 2,024

    4,693 3,527 258,694 234,091

    13 PRIOR PERIOD ADJUSTMENTS

    13.1 Change of presentation of the statement of profit or loss and other comprehensive income

    As

    previously

    reported AdjustmentRestated balance

    US$ US$ US$

    Employment expenses 417,142 (312,856) 104,286

    Presentation of the statement of profit or loss and other comprehensive income was changed through

    reclassification of expenses in order to show the correct expenditure categories so as to achieve a fair presentation

    of the financial statements.

    The reclassification has no effect on the statement of profit or loss and other comprehensive income and the statement of financial position

    Motor vehicle repairs -Management

    GENERAL ADMINISTRATION EXPENSES

    20

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

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    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    13 POST EMPLOYMENT BENEFITS

    13 Defined Contribution Fund

    2013 2012US$ US$

    Contributions for the year 30,957 16,590

    13.1 National Social Security Authority Scheme

    Contributions for the year 6,777 5,075

    14 FINANCIAL INSTRUMENTS- RISK MANAGEMENT

    The Organization is exposed through its operations to the following financial risks:1. Credit risk2. Fair value or cash flow interest rate risk3. Liquidity risk

    Principal financial instruments

    a) Accounts receivableb) Bank and cash balancesc) Money market investmentsd) Accounts payable

    The principal financial instruments used by the Organization, from which financial instrument risk arises, are asfollows:

    All employees are members of a defined contribution pension scheme administered by Old Mutual Life Assurance

    Company.

    All eligible employees are members of the National Social Security Scheme to which the employees and the

    Organization contribute. The scheme was promulgated under the National Social Security Authority Act 1989. The

    Organization's obligations under this scheme are limited to specific contributions legislated from time to time.

    Contributions by the Organization amount to 3.5% of pensionable emoluments with a maximum of US$24.50 per

    month per employee.

    In common with all other businesses, the Organization is exposed to risks that arise from its use of financialinstruments. This note describes the Organization's objectives, policies and processes for managing those risks andmethods used to measure them. Further quantitative information in respect of these risks is presented throughoutthese financial statements.

    There have been no substantial changes in the Organization's exposure to financial instrument risks, its objectives,policies and processes for managing those risks or the methods used to measure them from the previous periodsunless otherwise stated in this note.

    21

    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    14 FINANCIAL INSTRUMENTS- RISK MANAGEMENT (Cont'd)

    A summary of the financial instruments held by category is provided below:

    Financial assets

    2013 2012US$ US$

    Accounts receivable 56,035 16,064

    Bank and cash balances 1,104,315 457,333

    1,160,350 473,397

    Financial liabilities

    2013 2012US$ US$

    Accounts payable 49,384 96,247

    Financial instruments not measured at fair value

    General objectives, policies and processes

    Credit risk

    Carrying value2013US$ 2012

    US$Financial assets

    Accounts receivable 56,035 16,064 Bank and cash balances 1,104,315 457,333

    1,160,350 473,397

    Loans and receivables

    Credit risk is the risk of financial loss to the Organization if a customer or a counterparty to a financialinstrument fails to meet its contractual obligations. Financial assets which potentially subject theOrganization to concentrations of credit risk consist primarily of cash and bank balances andreceivables. The Organization's cash and cash equivalents are placed with high quality financialinstitutions.

    Quantitative disclosures of the credit risk exposure in relation to financial assets are set out below.

    Carrying value

    The Board has overall responsibility for the determination of the Organization's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Organization's finance function.

    Financial instruments not measured at fair value include cash and cash equivalents, accounts and long term receivables, accounts payable and borrowings.The carrying value of cash and cash equivalents, accounts and long term receivables, trade and other payables approximates their fair value.

    22

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    :

  • AnnuAlRepoRt 2013

    AnnuAlRepoRt 2013

    40 41

    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    14 FINANCIAL INSTRUMENTS - RISK MANAGEMENT (Cont'd)

    Liquidity risk

    US$At 31 December 2013

    Accounts payable 49,384 -

    US$At 31 December 2012

    Accounts payable 96,247 -

    Fair value or cash flow interest rate risk

    15 MANAGEMENT OF CAPITAL

    16

    d) Using trade information obtained from the Reserve Bank of Zimbabwe, which was extracted from the computersystem used by banks to report cross border payments, Management has started engaging banks on the gapbetween expected income and collected amounts with a view to ensure completeness in surcharge collections.

    The Organization's objective when managing capital is to safeguard the Organization's ability to continue as going

    concern, so that it can benefit stakeholders. The capital of the Organization comprise of reserves.

    The Organization has adopted a non speculative policy on managing interest rate risk. Only approved financial

    institutions with sound capital bases are used to invest surplus funds in.

    Management carried out an analysis of the collection process which revealed weaknesses/ loopholes that resulted in

    incomplete collection of trade development surcharge. This revealed the need to have the Trade Development

    Surcharge Act strengthened. Accordingly management formally requested the Ministry of Industry and Commerce to

    consider the following proposals for the Amendment of the Act:a) Tightening the wording of the Trade Development Surcharge Act to empower ZimTrade to enforce collection by

    banks or inclusion in the Act of a monitoring role by the Reserve Bank of Zimbabwe.b) The Reserve Bank of Zimbabwe to be vested with powers to audit banks to ensure compliance.

    c) Submission to ZimTrade of monthly returns by banks showing details of surcharge collection by importer/exporter(this is already being done by some banks) .

    TRADE DEVELOPMENT SURCHARGE COLLECTION

    Between 3 and 12 months

    Up to 3 months

    US$

    This is the risk of insufficient liquid funds being available to cover commitments. In order to mitigate any liquidity riskthat the Organization faces, the Organization's policy has been throughout the year ended 31 December 2013, tomaintain significant liquid resources from the trade surchages collected.

    Between 3 and 12 months

    Up to 3 months

    US$

    23

    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    17 RELATED PARTY INFORMATION17.1 Related parties

    The following are the related parties of the Organisation:

    Related party Nature of relationship

    S P Pilime Key managementP Changunda Key managementR Chizema Key managementJ Siziba Key managementS Jabangwe Key managementD Mushayavanhu Key managementT Ndlela Key managementB Mutetwa Key managementDr M S D Mutopo Key managementM B Mpofu Key managementD Norupiri Key managementB Mushohwe Key management

    17.2 Related party balancesIncluded in accounts receivable is the following related party balance:Related party 2013 2012

    US$ US$

    S P Pilime 34,667 -

    17.3 Compensation to key management

    2013 2012

    US$ US$Executive directors

    Short term benefits 127,044 121,495 Post employment benefits 9,829 9,467

    136,873 130,962

    Non-Executive directors

    Short term benefits 71,582 29,366

    Total 208,455 160,328

    18 CAPITAL COMMITMENTS

    Authorised and contracted for 8,900 135,500 Authorised but not contracted for 478,300 10,100

    487,200 145,600 Capital expenditure will be financed from cash generated from operations.

    19 EVENTS AFTER THE REPORTING DATE

    19.1 Approval of financial statements

    Key management personnel are employees who have authority and are responsible for planning, directing andcontrolling the activities of the Organization.

    These financial statements were approved by the Board of Directors for issue on 09 June 2014 and they have the power to ammend the financial statements after issue should such circumstances arise.

    This relates to a housing loan given to the CEO which is secured by a house, accrues 7% interest per annum and isrepayable over 5 years.

    24

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    Notes to the Financial Statements (cont...)for the year ended 31 december 2013

    19.2 Expiry of the Board’s term of office.The Board’s term of office expired on 31 March 2014 and this was not renewed. The Minister will, in due course, appoint a new Board.

    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    14 FINANCIAL INSTRUMENTS - RISK MANAGEMENT (Cont'd)

    Liquidity risk

    US$At 31 December 2013

    Accounts payable 49,384 -

    US$At 31 December 2012

    Accounts payable 96,247 -

    Fair value or cash flow interest rate risk

    15 MANAGEMENT OF CAPITAL

    16

    d) Using trade information obtained from the Reserve Bank of Zimbabwe, which was extracted from the computersystem used by banks to report cross border payments, Management has started engaging banks on the gapbetween expected income and collected amounts with a view to ensure completeness in surcharge collections.

    The Organization's objective when managing capital is to safeguard the Organization's ability to continue as going

    concern, so that it can benefit stakeholders. The capital of the Organization comprise of reserves.

    The Organization has adopted a non speculative policy on managing interest rate risk. Only approved financial

    institutions with sound capital bases are used to invest surplus funds in.

    Management carried out an analysis of the collection process which revealed weaknesses/ loopholes that resulted in

    incomplete collection of trade development surcharge. This revealed the need to have the Trade Development

    Surcharge Act strengthened. Accordingly management formally requested the Ministry of Industry and Commerce to

    consider the following proposals for the Amendment of the Act:a) Tightening the wording of the Trade Development Surcharge Act to empower ZimTrade to enforce collection by

    banks or inclusion in the Act of a monitoring role by the Reserve Bank of Zimbabwe.b) The Reserve Bank of Zimbabwe to be vested with powers to audit banks to ensure compliance.

    c) Submission to ZimTrade of monthly returns by banks showing details of surcharge collection by importer/exporter(this is already being done by some banks) .

    TRADE DEVELOPMENT SURCHARGE COLLECTION

    Between 3 and 12 months

    Up to 3 months

    US$

    This is the risk of insufficient liquid funds being available to cover commitments. In order to mitigate any liquidity riskthat the Organization faces, the Organization's policy has been throughout the year ended 31 December 2013, tomaintain significant liquid resources from the trade surchages collected.

    Between 3 and 12 months

    Up to 3 months

    US$

    23

    ZIMTRADE

    NOTES TO THE FINANCIAL STATEMENTS (Cont'd)for the year ended 31 December 2013

    14 FINANCIAL INSTRUMENTS - RISK MANAGEMENT (Cont'd)

    Liquidity risk

    US$At 31 December 2013

    Accounts payable 49,384 -

    US$At 31 December 2012

    Accounts payable 96,247 -

    Fair value or cash flow interest rate risk

    15 MANAGEMENT OF CAPITAL

    16

    d) Using trade information obtained from the Reserve Bank of Zimbabwe, which was extracted from the computersystem used by banks to report cross border payments, Management has started engaging banks on the gapbetween expected income and collected amounts with a view to ensure completeness in surcharge collections.

    The Organization's objective when managing capital is to safeguard the Organization's ability to continue as going

    concern, so that it can benefit stakeholders. The capital of the Organization comprise of reserves.

    The Organization has adopted a non speculative policy on managing interest rate risk. Only approved financial

    institutions with sound capital bases are used to invest surplus funds in.

    Management carried out an analysis of the collection process which revealed weaknesses/ loopholes that resulted in

    incomplete collection of trade development surcharge. This revealed the need to have the Trade Development

    Surcharge Act strengthened. Accordingly management formally requested the Ministry of Industry and Commerce to

    consider the following proposals for the Amendment of the Act:a) Tightening the wording of the Trade Development Surcharge Act to empower ZimTrade to enforce collection by

    banks or inclusion in the Act of a monitoring role by the Reserve Bank of Zimbabwe.b) The Reserve Bank of Zimbabwe to be vested with powers to audit banks to ensure compliance.

    c) Submission to ZimTrade of monthly returns by banks showing details of surcharge collection by importer/exporter(this is already being done by some banks) .

    TRADE DEVELOPMENT SURCHARGE COLLECTION

    Between 3 and 12 months

    Up to 3 months

    US$

    This is the risk of insufficient liquid funds being available to cover commitments. In order to mitigate any liquidity riskthat the Organization faces, the Organization's policy has been throughout the year ended 31 December 2013, tomaintain significant liquid resources from the trade surchages collected.

    Between 3 and 12 months

    Up to 3 months

    US$

    23

  • AnnuAlRepoRt 2013

    42

    Notes


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