chief executive officer’s report……………………10 board of directors · 2016. 8. 1. ·...

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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

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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

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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

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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

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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

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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

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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

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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


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


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

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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:

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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

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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

AnnuAlRepoRt 2013

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:


2.3.1 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




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...)



AnnuAlRepoRt 2013

AnnuAlRepoRt 2013

34 35

ZIM

TRA

DE

NO

TES

TO T

HE

FIN

AN

CIA

L ST

ATE

MEN

TS (

Cont

'd)

for

the

year

end

ed 3

1 D

ecem

ber

2013

Free

hold

Mot

orCo

mpu

ter

Off

ice

Furn

iture

Le

aseh

old

Land

build

ings

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pmen

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and

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Net

Car

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g am

ount

at 1

/01/

1234

,808

65,0

00

30

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9,07

9

30,6

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19

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-

189,

902

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ross

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g am

ount

- C

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Valu

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n34

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65,0

00

30

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9

30,6

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19,6

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-

18

9,90

2

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mul

ated

dep

reci

atio

n-

-

-

-

-

-

-

-

Addi

tions

-

-

107,

759

9,

849

5,

243

-

122,

851

Dis

posa

ls-

-

(3

00)

-

(520

)

-

-

(820

)

Cost

-

-

(300

)

-

(5

20)

-

-

(8

20)

Ac

cum

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ed d

epre

ciat

ion

-

-

-

-

-

-

-

-

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reci

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n ch

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-

(1

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(1

1,52

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(4

,345

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(3,4

10)

(1

,981

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(2

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3)

Net

Car

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g am

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at 3

1/12

/12

34,8

08

63

,700

126,

732

14

,583

31,9

19

17

,628

-

289,

370

G

ross

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- C

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8,25

9

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311,

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(1

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(1

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(4

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(3,4

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(1

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-

(2

2,56

3)

Net

Car

ryin

g am

ount

at 1

/01/

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,808

63,7

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6,73

2

14,5

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31

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ss c

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nt -

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34,8

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138,

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31

1,93

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n-

(1,3

00)

(11,

527)

(4,3

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(3

,410

)

(1,9

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-

(22,

563)

Addi

tions

-

-

288,

891

8,

572

16

,811

24

,245

67,2

16

405,

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D

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sals

-

-

(13,

937)

(3,4

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(2

,297

)

(2,5

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(22,

183)

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st-

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(2

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(5

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)

(2,6

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(3

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(8

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(5

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)

(4,4

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(2

,550

)

(7

,768

)

(104

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Net

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at 3

1/12

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34,8

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62

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318,

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13

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41,9

95

36

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(2

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(8

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(4

,159

)

(7

,768

)

(116

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)

4 PR

OPE

RTY

AND

EQU

IPM

ENT

17

- -

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



-

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36 37

ZIMTRADE


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


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



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38 39

ZIMTRADE


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


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



:

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40 41

ZIMTRADE


14 FINANCIAL INSTRUMENTS - RISK MANAGEMENT (Cont'd)

Liquidity risk

US$At 31 December 2013

Accounts payable 49,384 -



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.


Up to 3 months

US$

23

ZIMTRADE


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



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



Liquidity risk







16














Up to 3 months

US$



Up to 3 months

US$

23

ZIMTRADE



Liquidity risk







16














Up to 3 months

US$



Up to 3 months

US$

23

AnnuAlRepoRt 2013

42

Notes

chief executive officer’s report……………………10 board of directors · 2016. 8. 1. ·...

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