Meikles : 2023 Annual Report

1 | MEIKLES LIMITED ANNUAL REPORT 2023

ANNUAL REPORT

2023

ABOUT OUR REPORT

Meikles Limited, a public company listed on the Zimbabwe Stock Exchange ("ZSE") and London Stock Exchange ("LSE"), is pleased to present the annual report for the year ended 28 February 2023. This report integrates both financial and non-financialinformation.

SCOPE OF THE REPORT

This report contains information for Meikles Limited which is incorporated and domiciled in Zimbabwe. In this report, unless otherwise stated, references to "our", "we", "us", "the Group", "Meikles Ltd" refers to Meikles Limited and its subsidiaries that includes TM Supermarkets (Pvt) Ltd; Meikles Guard Services (Pvt) Ltd; Thomas Meikle Properties (Pvt) Ltd and Meikles Hospitality (Pvt) Ltd.

REPORTING FRAMEWORKS

This report was prepared with due consideration of the following reporting requirements:

• The Companies and Other Business Entities Act [Chapter 24:31];
• Statutory Instrument ("SI") 134 of 2019 Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules, 2019;
• International Financial Reporting Standards (IFRS); and
• Global Reporting Initiative (GRI) Standards.

SUSTAINABILITY DATA

This report was prepared using both quantitative and qualitative data extracted from company records, policies and persons responsible in the Key Results Areas ("KRA") of sustainability impacts for the Group. In some cases, assumptions were made and confirmed for consistency with business activities. Where data has not been provided by all subsidiaries, it is indicated under each table. The Group continues to review its measurement systems on sustainability data to ensure consistency across subsidiary operations.

ASSURANCE

The consolidated financial statements were audited by Ernst & Young Chartered Accountants (Zimbabwe) in accordance with the International Standards of Auditing ("ISA"). The independent auditor's report is found on pages 40 to 45. Non-financialinformation and data used for sustainability reporting was internally validated by the Group Internal Audit Department. The report was verified for compliance with GRI Standards by the Institute for Sustainability Africa ("INSAF") as subject matter experts. A GRI Content Index is presented on pages 97 to 100. Management validated the report for consistency with business operations before publication.

MEIKLES LIMITED ANNUAL REPORT 2023 | 2

RESTATEMENTS

Meikles Ltd made restatements to sustainability data where measurement was evaluated and this is indicated on the relevant indicators.

REPORT DECLARATION

The Board of Directors and Management confirm that this report has been prepared in accordance with GRI Standards - 'Core' option.

BOARD APPROVAL

The Board recognises its responsibility for ensuring the integrity of the information contained in this annual report and has approved it as fairly representing the Group's overall performance.

FORWARD LOOKING STATEMENTS

This report may contain forward looking statements. These statements are estimates and projections by Meikles Limited based on current available information. Forward looking statements are not statements of historical fact and may contain the terms "may", "will", "should", "continue", "aims", "estimates", "projects", "believes", "intends", "expects", "plans", "seeks" or "anticipates", or words of similar meaning. Forward looking statements are not guarantees of future developments and results outlined therein. They are dependent on several factors which may involve various risks and uncertainties, and are based on assumptions beyond our control. Readers are cautioned not to place undue reliance on forward looking statements.

FEEDBACK ON THE REPORT

The Group values opinions and feedback from all stakeholders on how we can improve our operations and reporting. We welcome any suggestions and or inquiries you may have. Kindly share your feedback with Tabani Mpofu (Mr), Company Secretary, on email [e-mail].

J.R.T. MOXON

Chairman

12 October 2023

3 | MEIKLES LIMITED ANNUAL REPORT 2023

CONTENTS

MEIKLES LTD AT A GLANCE	Page		Page
	DIRECTORS RESPONSIBILITY AND
Our Journey of over 100 years	4
Group Structure	5	GROUP FINANCIAL STATEMENTS
Meikles Group Footprint	6	Report of the Directors	38
Our Business Value Systems	7	Directors' Responsibility for Financial Reporting	39
Group Performance Highlights	8	Independent Auditors' Report	40
		Consolidated Statement of Profit and Loss
STRATEGIC REVIEW		and Other Comprehensive Income	46
	Consolidated Statement of Financial Position	47
Chairman's Statement	9	Consolidated Statement of Changes in Equity	48
Overview of Major Subsidiaries	11	Consolidated Statement of Cash Flows	49
CORPORATE GOVERNANCE		Notes to the Financial Statements	50
	COMPANY FINANCIAL STATEMENTS
Group Governance	13
Board Structure	13	Company Statement of Profit and Loss
Directorate	14	And Other Comprehensive Income	92
Directors and Senior Management	17	Company Statement of Financial Position	93
Compliance	18	Company Abridged Notes to the Financial Statements	94
Anti-corruption	18	ANNEXURES
Cybersecurity and Data Privacy	18
Human Rights	19	Key Performance Measures	95
Risk Management	19	Shareholder Information	96
CORPORATE SUSTAINABILITY		GRI Content Index	97
	Corporate Information	101
Corporate Sustainability	21	Notice of Meeting	102
Stakeholder Relations and Engagements	22	Form of Proxy	104
Our Sustainability Context	23	Instruction for signing and lodging form of Proxy	105
Materiality Matrix	24
RESPONSIBLE OPERATIONS
Product Quality and Safety	25
Customer Grievance Management	25
Responsible Sourcing	25
Packaging Materials	26
Green and Eco-Friendly Property Management	27
HUMAN CAPITAL MANAGEMENT
Employees	27
Labour Practices	27
Human Capital Base	28
Collective Bargaining	29
Post-Employment Welfare	29
Occupational Health and Safety	29
Training and Education	30
Gender Diversity and Equal Opportunity	31
SUSTAINABLE OPERATIONS
Energy	31
Water	32
Waste	33
CLIMATE ACTION
Climate Action	34
Emissions	34
Ecology and Biodiversity	34
CORPORATE SOCIAL RESPONSIBILITY
Investing in our Community	35
Sustainable Development Goals	36
ECONOMIC CONTRIBUTIONS
Economic Performance	36
Economic Value Generated and Distributed	37
Tax Management	37

MEIKLES LIMITED ANNUAL REPORT 2023 | 4

MEIKLES LTD AT A GLANCE

OUR JOURNEY OF OVER 100 YEARS

1892

1915

1920s

1978

1996

1998

1999

2001

2007

2010

2012

2013

2014

2019

2020

2022

John, Stewart and Thomas Meikle, brothers migrated from Scotland to Southern Africa, opening trading business in Fort Victoria (now Masvingo) in now Zimbabwe.

Business spread to Bulawayo, Umtali (Mutare) and Salisbury (Harare).

Thomas Meikle opens hotel business in now present day Harare.

Tanganda Tea Estate established.

TM Supermarkets ("TMSM") established.

Meikles family businesses are listed on the Zimbabwe Stock Exchange and London Stock Exchange under Meikles Africa Limited.

Pick n Pay South Africa acquires 25% of TM Supermarkets.

Meikles Limited purchases 50% of The Victoria Falls Hotel lease and operations.

Meikles Limited purchases 50% of the Cape Grace Hotel business and property.

Meikles Limited purchases the remaining 50% of the Cape Grace Hotel business and property.

Merger of Meikles Limited, Tanganda Tea Company Limited, Cotton Printers (Private) Limited, and Kingdom Financial Holdings Limited.

Demerger of Kingdom Financial Holdings Limited from Meikles Limited.

Meikles Limited acquires 35% shareholding in Mentor Africa (Pty) Limited ("Mentor") through a merger of the Cape Grace Hotel into Mentor.

Pick n Pay South Africa increases shareholding in TMSM to 49%.

Meikles Guard Services (Private) Limited formed as a wholly owned subsidiary company.

Closure of Departmental Stores trading as Meikles Stores, Barbours and Greatermans.

Meikles Limited disposes Meikles Hotel in Harare.

Tanganda Tea Company unbundled.

Disposal of 35% shareholding in Mentor.

The Group still operates businesses in the following sectors:

Retail	TM Supermarkets trading as TM Pick n Pay.
Hospitality	The Victoria Falls Hotel (Operated in partnership with African Sun Limited).
Real Estate and Property	Thomas Meikle Properties.
Security Services	Meikles Guard Services.

49%

51%

70%

74%

Pick n Pay

TM Supermarkets

(Private) Limited

(See note below)

Mopani Property

Development

(Private)

Limited

Ringsmoke

Investment

(Private)

Limited

Meikles Hospitality

(Private) Limited

100% (incorporating 50% partnership in The

Victoria Falls Hotel)

100%	Cape Grace
Investments
	Limited

MEIKLES

LIMITED

100%	Greatermans Stores	100%	Meikles Guard
(1979) (Private)	Services (Private)
Limited		(Department	Limited
			Stores)

Thomas Meikles

100% Properties (Private)

Limited

100%	Ninety Speke
(Private) Limited

GROUP STRUCTURE

MEIKLES LTD AT A GLANCE	5 | MEIKLES LIMITED ANNUAL REPORT 2023
(continued)

Note: TM Supermarkets (Private) Limited has the following 100% owned subsidiaries: Ebony Properties (Private) Limited, Osterland Investments (Private) Limited and Petria Properties (Private) Limited. Dormant companies have been excluded.

MEIKLES LIMITED ANNUAL REPORT 2023 | 6

MEIKLES LTD AT A GLANCE (continued)

7 | MEIKLES LIMITED ANNUAL REPORT 2023

MEIKLES LTD AT A GLANCE (continued)

OUR BUSINESS VALUE SYSTEMS

BUSINESS ASSOCIATIONS MEMBERSHIP

Some of our subsidiaries are members of the following associations:

TM Pick n Pay Supermarkets

Meikles Hospitality

Meikles Guard Services

• Confederation of Zimbabwe Industries (CZI)
• Employers Confederation of Zimbabwe (EMCOZ)
• Retailers Association of Zimbabwe (RAZ)
• National Employment for Engineering Sector
• Employment Association of Zimbabwe
• National Employment Council for the Commercial Sector (NECCSZ)

•	Tourism Business Council of Zimbabwe	•	Security Association of Zimbabwe (SAZ)
	(TBCZ)	•	National Employment Council for the
•	Hospitality Association of Zimbabwe		Security Industry (NECSI)
	(HAZ)

• Leading Hotels of the World (LHW)
• Africa Travel and Tourism Association (ATTA)
• National Employment Council for Hotel and Catering Industry
• Zimbabwe National Chamber of Commerce (ZNCC)
• We are Africa
• Africa's Eden - Kaza Region

STANDARDS

Some of our subsidiaries subscribe to the following standards:

TM Pick n Pay Supermarkets

Meikles Hospitality

Meikles Guard Services

• Health Registration Certificate - Ministry of Health and Child Welfare Zimbabwe
• Factory Registration Certificate - Local
  Authorities
• Air Emission Licence - Environmental Management Agency (EMA) Zimbabwe
• Liquor Licence - Local Authorities Zimbabwe
• Music Licence - Zimbabwe Music Rights Association (ZIMURA)
• Seller of Seeds, Pesticides Retailers, Radio, and Municipal licences.
• Shop licences
• Agricultural inputs and livestock products retail registration - Agricultural Marketing Authority (AMA)

• Leading Quality Assurance - Leading Hotels of the World (Global)
• Five Star Hotel Grading - Zimbabwe Tourism Authority (ZTA)
• Designated Tourist Facility - Zimbabwe Tourism Authority (ZTA)
• Designated Health Facility (clinic) - Medical Control Authority of Zimbabwe (MCAZ)

• Guard Securities Licence - Ministry of Home Affairs (Zimbabwe)

AWARDS & RECOGNITIONS

Received during FY2023:

TM Pick n Pay Supermarkets

Buy Zimbabwe Awards:

• Insignia Award 2023
• Best company of the year Award 2023
• Champion Award 2023
• Retailer of the year 2023

Contact Centre Association of Zimbabwe

• Excellence in the Retail Service Award

Marketers Association of Zimbabwe SuperBrand Awards

• Runner up in the Retail Supermarkets Sector

CSR Network Zimbabwe

• Excellence in community empowerment and social impact award

MEIKLES LIMITED ANNUAL REPORT 2023 | 8

MEIKLES LTD AT A GLANCE (continued)

GROUP PERFORMANCE HIGHLIGHTS

FINANCIAL HIGHLIGHTS

Revenue (ZWL '000' )		Profit for the period (ZWL '000')
278,948,650		3,090,079
191,734,157 in FY2022		8,096,274 in FY2022
45% Increase		62% Decrease
Historical		Historical
FY2023: 230,859,025		FY2023: 12,335,125
FY2022: 50,666,982		FY2022: 8,875,613
Total Assets (ZWL '000')		Net Cash Flow from Operating Activities (ZWL '000')
104,401,481		2,281,586
70,351,000 in FY2022		6,885,964 in FY2022
48% Increase		67% Decrease
Historical		Historical
FY2023: 78,124,165		FY2023: 12,367,409
FY2022: 17,453,812		FY2022: 2,811,316
SHARE PERFORMANCE
		Inflation Adjusted			Historical
	28 Feb 2023	31 Mar 2022	31 Mar 2021	28 Feb 2023	31 Mar 2022	31 Mar 2021
	ZWL Cents	ZWL Cents	ZWL Cents	ZWL Cents	ZWL Cents	ZWL Cents
Share Price	19,440.00		40,962.94		22,619.17	19,440.00	14,076.62	4,500.94
Basic and Diluted Earnings Per Share from
continuing and discontinued operations	307.59		1,721.64		484.98	2,392.52	2,755.53	1,051.90
Basic and Diluted Earnings Per Share from
continuing operations	307.59		2,370.16		41.55	2,392.52	2,591.81	547.83
SUSTAINABILITY PERFORMANCE
Corporate Responsibility (ZWL '000')		Total Employees (Headcount)
98,940			6,280
19,559 in FY2022			6,013 in FY2022
406% Increase			4% Increase
Electricity (MWh)			Water (m3)
40,499			105,825
41,197 in FY2022			158,344 in FY2022
2% Decrease			33% Decrease

9 | MEIKLES LIMITED ANNUAL REPORT 2023

STRATEGIC REVIEW

CHAIRMAN'S STATEMENT

It gives me pleasure to present the Chairman's Report for the eleven months ended 28 February 2023.

OPERATING ENVIRONMENT

The economy faced elevated levels of inflation, depreciating exchange rate and rising interest rates during the period under review. The resultant impact was reduced disposable income and contraction in consumer demand. The interventions implemented by both fiscal and monetary authorities led to a slowdown of inflation. However, the high interest rates brought in challenges in the supply chain and specifically unfavourable changes in supplier trading terms. Furthermore, frequent power outages during the period under review increased the cost of business operations.

GROUP FINANCIAL PERFORMANCE

The Company changed its financial year-end from March to February to align with the year-end of the main subsidiary, TM Supermarkets (Private) Limited. Therefore, the financial results presented are for eleven months to 28 February 2023 alongside twelve months to 31 March 2022. Reference to "like for like" is a comparison of eleven months ended 28 February 2023 to eleven months period of the previous financial year.

Commentary on financial performance is based on inflation adjusted figures, with comments on certain historical cost figures to enhance comprehension and analysis.

The Group demonstrated resilience to adverse changes in the operating environment as it was able to adapt and respond to the aforesaid challenges.

The Group revenue grew to ZWL 278.9 billion (Previous year: ZWL

191.7 billion) representing a 45% increase (60% on a like for like basis). In historical cost terms, revenue grew by 356% (420% on a like for like basis) to ZWL 230.9 billion (Previous year: ZWL 50.7 billion). Growth in sales units was achieved at the supermarket segment under tough operating conditions characterised by declining customer disposable income during the greater part of the period under review.

Gross profit margin decreased by 2% points to 23% from 25% in the previous year, partly reflecting the impact of the Supermarket segment's strategic thrust on responsible pricing to support customers during the challenging times. In addition, the sales mix was dominated by grocery items that have low margins.

Group net operating costs increased by 63% to ZWL 67.1 billion (Previous year: ZWL 41.3 billion). The Group reviewed employee remuneration on a regular basis to cushion employees from the rising cost of living. Consequently, employee costs increased by 64% and were 50% of total operating costs. In addition, the increases in costs denominated in foreign currency, as well as electricity and water, were ahead of revenue growth.

The Group made an operating loss of ZWL2.0 billion (Previous operating profit: ZWL 6.5 billion) which was due to the reduction in gross profit margin combined with the increase in operating costs. On a positive note, the operating loss was surpassed by the gains from the management of the monetary assets and liabilities. In historical cost terms, operating profit increased by 299% to ZWL 14.8 billion on a like

for like basis.

Investment income is largely interest on funds on deposit with banks. Last year's investment income was boosted by ZWL 3.6 billion recovered on funds placed with Reserve Bank of Zimbabwe in prior years. Finance costs are primarily interest charges on lease liabilities and increased by 72% due to inflation driven rent reviews.

Profit after tax (excluding investment income of ZWL 3.6 billion and ZWL 179.0 million profit on distribution of subsidiary equity to shareholders in the previous year) declined by 48% to ZWL 3.1 billion.

In historical cost terms, profit after tax increased by 206% on a like for like basis.

Total comprehensive income was boosted by the exchange rate impact on the translation of foreign subsidiary and increased to ZWL 25.4 billion (Previous year: ZWL 11.1 billion).

Capital expenditure during the period under review was ZWL7.9 billion (approximately US$15 million) and was all financed from internally generated cash flows. The Group had strong levels of liquidity and solvency at the end of the reporting period. The current assets ratio was 1.74 times up from 1.62 times in the previous year. Debt-to-equityratio was flat year-on-yearat 9% (Historical cost: 13%). Lease liabilities for the various store leases accounted for 84% (Previous year: 90%) of the total debt.

Segmental contribution to the Group's financial performance is set out in Note 6 of the consolidated financial statements.

REVIEW OF OPERATIONS

Supermarkets - trading as TM Pick n Pay

Revenue grew by 44% (60% on a like for like basis) to ZWL 275.6 billion (Historical cost, on a like for like growth of 414% to ZWL 228.0 billion). Despite the declining consumer disposable income, units sold grew by 2%. "Click and collect", an online portal, was introduced during the period under review and there is an ongoing improvement of the offering.

For the greater part of the period under review, the segment focused on striking a balance in advancing the needs of all stakeholders in a tough trading environment. Supplier payment terms tightened, and the cost of goods escalated in response to high interest rates and inflation.

Profit after tax decreased by 40% to ZWL 4.2 billion (Last year: ZWL

7.0 billion). In historical terms, profit after tax increased by 254% (310% on a like for like basis) to ZWL 11.8 billion.

Despite the reduction in profit margins, the segment funded its store expansion and refurbishments from operating cash flows. Three new stores, Highlands Park, Madokero and Simon Mazorodze, were completed and opened during the period under review. In addition, two new stores were at an advanced stage of completion at the reporting period. The segment demonstrated resilience in working capital management as the frequent changes in supplier trading terms during the period did not adversely affect the level and quality of stocks in the stores.

Hospitality

Revenue increased by 242% (271% on a like for like basis) to ZWL

2.6 billion from ZWL 750 million last year. Revenue growth was 107% in US$ terms. The growth was on the back of an increase in room occupancy of 11.57% points to 28.33%, combined with a 15% increase in the average room rate in United States Dollar terms.

Profit after tax increased to ZWL 1.3 billion from ZWL 563 million in the previous year.

The refurbishment of 47 rooms of The Victoria Falls Hotel was completed during the period under review, a development which bodes well for the hotel's competitive positioning in the market.

Properties

The planned development and repurposing of the main property in Mutare was completed during the period under review and all the available space was taken up by tenants. In addition, the mall along South Avenue in Harare was completed and is fully occupied by tenants. The refurbishment of the building along Robert Mugabe Road in Harare was at an advanced stage of completion at the reporting period. The works were subsequently completed in May 2023 with the anchor tenant being TM Pick n Pay. Refurbishment works on the main building in Bulawayo will commence in due course.

STRATEGIC REVIEW (continued)

CHAIRMAN'S STATEMENT (continued)

REVIEW OF OPERATIONS (continued)

Security Services

Meikles Guard Services generated sufficient cash flows to fund its operations during the year under review. The segment benefits from the expansion of the supermarkets segment.

SUSTAINABILITY

We are implementing ongoing actions across our operating segments to reduce any negative impact on the environment. Some of the activities include annual tree planting, upgrades in refrigeration equipment, promoting use of biodegradable carrier bags and changes in methods of waste handling.

CORPORATE SOCIAL RESPONSIBILITY

The Group's corporate social responsibility activities are primarily conducted through the Meikles Foundation and TM Pick n Pay. Meikles Foundation's main source of funding is donations from Meikles Limited.

During the period under review, Meikles Foundation, in conjunction with its partners, increased their support for underprivileged children suffering from cancer through sponsorship of the Rainbow Children's Village. Moreover, the Foundation supported vulnerable groups with food hampers on a regular basis.

TM Pick n Pay supported old people's homes and children's homes through grocery gift vouchers and blankets. Sixty-eighthomes benefited

from donations of grocery gift vouchers during the period under review. Two thousand, five hundred blankets were donated to twenty homes during the winter months. Fifteen schools, spread across the country were supported with writing books, pens and other ancillary items benefiting seven thousand learners.

MEIKLES LIMITED ANNUAL REPORT 2023 | 10

DIVIDEND

The Board declared a final dividend of 0.80 US$ cents per share, taking the total dividend for the financial year to 1.65 US$ cents per share, inclusive of two interim dividends of 0.25 US$ cents and 0.60 US$ cents.

DIRECTORATE

There were no changes in directorship during the period under review.

OUTLOOK

The economic direction of the country during our forthcoming financial year is difficult to assess in terms of a determination of possible financial performance of the Group, primarily due to volatile exchange rates and high inflation.

The Group sales for the first three months of the financial year and trends to the date of the release of this report have exceeded expectation, as has trading profit.

The Group will continue with the planned development projects. It has the technical resources and skills together with a substantial cash resource to undertake its objectives.

APPRECIATION

I would like to extend my appreciation to our customers and suppliers for their continued support and to our shareholders, other stakeholders, including regulatory authorities, for their assistance and guidance. I would also like to extend my gratitude and appreciation to fellow Board members, management and staff for their dedication and commitment.

J.R.T. MOXON

Chairman

14 July 2023

The Centenary Room at The Victoria Falls Hotel