NICOL aNNUaL rEPOrT - nicoltz.comnicoltz.com/Admin/News/files/documents/34-annual report_ final_low... · from the Capital Markets and Securities Authority ... On 15th July 2008,

AnnuAl report 2016 | MkutAno Mkuu wA MwAkA 2016 1

NICOL

TaarIfa ya MWaKa 2016

aNNUaL rEPOrT

NatioNal iNvestmeNts CompaNy limited


Contents | Yaliyomo

Our Vision, Mission and Core Values ................... 2Dira, Maono na Maadili yetu ................................ 2

Group Information ................................................ 3Taarifa za Kampuni ............................................... 3

Our Investments .................................................... 5Uwekezaji wetu ...................................................... 5

Financial Highlights - Year 2016 .......................... 6Mambo muhimu kwa mwaka 2016 ....................... 6

Future Outlook ...................................................... 12Matarajio ya mbeleni ............................................. 12

Chairman’s Report ................................................. 14Taarifa ya mwenyekiti ............................................ 14

Corporate Governance .......................................... 24Utawala Bora ......................................................... 24

Board of Directors ................................................. 25Bodi ya Wakurugenzi ............................................ 25

Investments Committee ........................................ 29Kamati ya Uwekezaji ............................................ 29

Executive Management ......................................... 31Menejimenti .......................................................... 31

Report of the Directors ......................................... 34

Statement of Directors' Responsibilities ................ 38

Report of the Independent Auditor ....................... 40

Statement of Profit or Loss ................................... 43

Statement of Financial Position ............................ 44

Statement of Changes in Equity ........................... 45

Statement of Cash Flows ...................................... 47

Notes to the Financial Statements ........................ 48

2ND AGM 2016


AnnuAl report 2016 | MkutAno Mkuu wA MwAkA 20162

OUR VISIONTo develop and increase active participation of local Tanzanians in the management and control of the National economy.

Kujenga na kuongeza ushirikishwaji wa Watanzania katika kumiliki na kuendesha uchumi wa Taifa.

OUR MISSIONTo be the leading Collective Investment Scheme in the country, mobilizing resources from public and participating in viable economic ventures through equity ownership and investments using the most cost effective management systems and technology, highly qualified and motivated personnel.

Kuwa kiongozi katika Mfumo wa Uwekezaji wa Pamoja hapa nchini, kuhamasisha rasilimali kutoka kwa umma na kushiriki kikamilifu katika ubia wa kiuchumi bora kwa umiliki wa usawa na uwekezaji kwa kutumia mifumo ya gharama nafuu ya usimamizi na teknolojia, wafanyakazi wenye ujuzi na wenye motisha.

CORE VALUESThe Company provides services anchored in transparency, efficiency, commitment, integrity and accountability to the shareholders and general public. The core value of the company are:

· Transparency – to have a work culture where employees rigorously communicate with their peers and exchange ideas and thoughts, which progressively builds up and maintains trust and respect.

· Integrity – Honesty and adherence to the codes of conduct that sustains high regard in the eyes of the public nationally and internationally.

· Professionalism - To act professional in all actions and dealings with our shareholders, clients and partners.

Kampuni hutoa huduma zilizounganishwa katika uwazi, ufanisi, kujitolea, uaminifu na uwajibikaji kwa wanahisa na umma kwa ujumla. Maadili ya msingi ya kampuni ni:

· Uwazi - kuwa na utamaduni wa kazi ambapo wafanyakazi wanawasiliana kwa urahisi na wenzao na kubadilishana mawazo na mawazo, ambayo huendeleza na kuendeleza imani na heshima.

· Uaminifu - Uaminifu na kuzingatia kanuni za maadili ambazo huwa na suala la juu kwa macho ya umma kwa kitaifa na kimataifa.

· Ustadi - Kutenda mtaalamu katika vitendo vyote na kushughulika na washirika wetu, wateja na washirika.

VISION, MISSION AND VALUES DIRA, MAONO NA MAADILI



INCORPORATION AND LISTING OF NICOL

National Investments Company Limited (NICOL) is a Limited Liability Public Company registered in the United Republic of Tanzania. Its main goal is to economically empower ordinary citizens by acquiring a stake in the economy of Tanzania through the establishment, or acquisition and management of selected viable economic ventures in various sectors of the economy.

NICOL was initially formed in 1999 by canvassing support from various individuals. This initiative progressively gained the support of many Tanzanians, leading to its incorporation as a limited public company under the Companies Act, on 27th June 2001, with registration number 41664.

LISTING AND SUSPENSION OF NICOL FROM DSE

NICOL subsequently obtained the authorization from the Capital Markets and Securities Authority (CMSA) to operate as a Collective Investment Scheme, allowing it to invite members of the general public to subscribe to its shares. On 15th July 2008, NICOL was listed and started trading its shares in the Dar es Salaam Stock Exchange (DSE).

As a company listed in the Dar es Salaam Stock Exchange (DSE), NICOL was obliged to comply with the requirements of transparency and complete disclosure of information, including, but not limited to disclosure of:

financial results for the financial year that have been reviewed by an independent external audit in accordance with the International Financial Reporting Standards (IFRS);

any sale or purchase of assets, licenses or subsidiaries which could materially alter the company’s business;

any litigation or threat of litigation which may

GROUP INFORMATION TAARIFA ZA KAMPUNI

KUANZISHWA KWA NICOL NA KUORODHESHWA KATIKA SOKO LA HISA

National Investments Company Limited (NICOL) ni kampuni ya umma iliyosajiliwa katika Jamhuri ya Muungano wa Tanzania. Lengo kubwa ni kuwawezesha wananchi wa kawaida kiuchumi kupitia ushiriki katika uchumi kupitia ununuzi na uongozi wa makampuni yenye faida.

NICOL kwanza ilianzishwa mwaka 1999was initially formed in 1999 kwa kuhamasisha uungwaji mkono na watu mbalimbali. Jitihada hizo ziliungwa mkono na waTanzania wengi mpaka ikafikia kampuni ikasajiliwa chini ya Sheria ya Makampuni tarehe 27 Juni 2001, ikiwa na namba ya usajili 41664.

KUSAJILIWA NA KUONDOLEWA KATIKA SOKO LA HISA

NICOL baadaye ilipata ridhaa ya Capital Markets and Securities Authority (CMS) kuendesha kazi zake kama Collective Investment Scheme, ikaruhusiwa kukaribisha wananchi kununua hisa za NICOL. Tarehe 15 Julai 2008, NICOL iliorodheshwa na ikaanza kuuza shea zake katika soko la hisa la Dar es Salaam.

Kama kampuni iliyoorodheshwa soko la hisa la Dar es Salaam, NICOL ilitakiwa kukidhi matakwa ya. Kama kampuni iliyoorodheshwa ilitakiwa itii matakwa ya uwazi, kutoa taarifa zote iliwa ni pamoja na:

Matokeo ya kifedha kwa mwaka wa fedha ambayo yamekaguliwa na wakaguzi huru wa nje kwa mujibu wa IFRS.;

Mauzo au manunuzi yeyote ya mali leseni au kampuni tanza ambayo inaweza kuathiri kwa kiasi kikubwa biashara ya kampuni.;

Kesi yeyote au tishio la kesi ambayo inaweza kuathiri bei ya hisa za NICOL



NICOL ilishindwa kukidhi matakwa ya DSE Continuing Listing Obligations, kama ilivyooneshwa hapa chini:

NICOL ilishindwa kuonesha matokea kifedha, na baada ya kubanwa na mamlaka za udhibiti wakatumia taarifa za kugushi. Wakati huo NICOL ilikuwa inaendeshwa vibay kifedha, na matokeo yake hadi kufika December 2009. NICOL ilikuwa imelimbikiza hasara ya shilingi blioni 11.2/=. Mwenyekiti alikuwa anaogopa kuumbuka

NICOL ilishindwa kuweka wazi manunuzi na mauzo ya mali zake; yaani mauzo ya hisa za Bayport Ltd ambazo ununzi wake ulikuwa na utata. Hali kadhalika NICOL ilishindwa kuweka wazi ununuzi wa asilimia 51% ya hisa za Interchem Pharmaceuticals and Bevarages Ltd

NICOL ilishindwa kuweka wazi kesi ambayo ilifunguliwa na African Banking Corporation ili walipwe shilingi bilioni 6/= ilizokopesha TFDC

Mapungufu haya na mengine ya utawala bora yalionekana kwa mamlaka za udhibitiambazo, kwa kuzingatia NICOL ilikuwa inatangazwa kama kampuni ya Wazawa, walijaribu mara kadhaa kutoa miongozo na maagizo ya kufuatwa, lakini mwenyekit aligoma kufuata maelekezo.

Katika hali hiyo, mamlaka ililazimika kufuata taratibu na sheria zilizopo. Soko la Hisa liliisimamisha NICOL kuuza hisa zake katika soko la hisa. Wanahisa hatimayw waliffukuza Bodi, hatua ambayo imekuwa inapingwa na Mweneyekiti aliyeondolewa.

have a material impact upon the price of NICOL’s shares.

• NICOL failed to comply with the DSE Continuing Listing Obligations as shown hereunder:

NICOL failed to disclose its financial results. On being pressured by the regulatory authorities, falsified financial results were used. At that time NICOL was being financially mismanaged, consequently NICOL was accumulating losses that by 31 December 2009 totaled T.Shs 11.2 billion/=. The then NICOL Chairman feared exposure.

NICOL failed to disclose the sale and purchase of assets; i.e. the disposal of the Bayport Ltd shares it was holding, and whose acquisition had raised some questions. Likewise, NICOL failed to disclose the acquisition of 51% stake in Interchem Pharmaceuticals and Beverages Company Ltd (IPBL), whose legal existence cannot be established.

NICOL failed to disclose a Court case instituted by African Banking Corporation Tanzania Ltd for the recovery of a T.Shs 6billion loan facility extended to its subsidiary company, Tanzania Fisheries Development Company Ltd.

These and other good governance shortcomings were evident to the Regulatory authorities who, in consideration of the fact that NICOL had been promoted as a vehicle for empowering indigenous Tanzanians, made several attempts to guide and nurture NICOL into compliance with the rules and regulations, but the Chairman was obstinate and resistant.

In the circumstances the Regulatory authorities had to move in accordance with the provisions of the rules and Regulations and suspended the Board and the Chief Executive Officer. The Dar es Salaam Stock Exchange suspended NICOL from trading its shares. The shareholders ultimately dismissed the Board, which action was challenged by the Chairman until the Court ruled to bar him from involving himself in NICOL operational issues.




OUR INVESTMENTS UWEKEZAJI WETU



total revenue and expensesMapato na Matumizi

total revenue Breakdown Year 2016Mchanganuo wa Mapato kwa Mwaka 2016

1

6,099

1,913

1,136

244

3,651

0 1000 2000 3000 4000 5000 6000 7000

Other income

Revenue from Subsidiary

Gain on disposal of security investments

Interest income

Dividend income

Revenu

e (TZS M

illion)

HIGHLIGHTS FOR THE YEAR 2016 MAMBO MUHIMU KWA MWAKA 2016



total expenses Breakdown Year 2016Mchanganuo wa Matumizi kwa Mwaka 2016

key Figure From The Statement of Financial position taarifa Muhimu katika Mizania Ya Fedha Mwaka 2016

2

466

500

42

696

813

840

1,015

PROVISION COSTS

TAXATION

FINANCE EXPENSES

COST OF SALES

ADMINSTRATIVE EXPENSES

LEGAL FEES

STAFF EXPENSES

EXPENSES (TZS MILLION)

10.1

1.9

96.9

5.1

103.7

-‐ 20.0 40.0 60.0 80.0 100.0 120.0

Current Liability

Non-‐ Current Liability

Total Equity

Current Assets

Assets

FINANCIAL POSITION (TZS MILLION)

2

466

500

42

696

813

840

1,015

PROVISION COSTS

TAXATION

FINANCE EXPENSES

COST OF SALES

ADMINSTRATIVE EXPENSES

LEGAL FEES

STAFF EXPENSES

EXPENSES (TZS MILLION)

10.1

1.9

96.9

5.1

103.7

-‐ 20.0 40.0 60.0 80.0 100.0 120.0

Current Liability

Non-‐ Current Liability

Total Equity

Current Assets

Assets

FINANCIAL POSITION (TZS MILLION)




In TZS (Million) 2010 2011 2012 2013 2014 2015 2016

Tzs Tzs Tzs Tzs Tzs Tzs Tzs Investment Income 1,040 1,188 1,650 2,513 3,298 3,718 5,031Income from Subsidiary (TMC) 1,635 1,304 2,154 1,670 1,574 2,021 1,913

Other Income 3 23 43 214 521 128 6,099

3

1,040 1,188 1,650

2,513

3,298 3,718

5,031

-‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2010 2011 2012 2013 2014 2015 2016

TZS MILLION

FINANCIAL YEAR

Investment Income

Other Income

5,242

3,836 4,091 3,483

4,467

5,663

3,873

-

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015 2016

TZS MILLION

FINANCIAL YEAR

(2,690) (1,398)

(341) 778 755

15

8,670

(4,000)

(2,000)

-‐

2,000

4,000

6,000

8,000

10,000

2010 2011 2012 2013 2014 2015 2016

Profit and Loss (TZS Million)

Financial Year

3

1,040 1,188 1,650

2,513

3,298 3,718

5,031

-‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2010 2011 2012 2013 2014 2015 2016

TZS MILLION

FINANCIAL YEAR

Investment Income

Other Income

5,242

3,836 4,091 3,483

4,467

5,663

3,873

-

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015 2016

TZS MILLION

FINANCIAL YEAR

(2,690) (1,398)

(341) 778 755

15

8,670

(4,000)

(2,000)

-‐

2,000

4,000

6,000

8,000

10,000

2010 2011 2012 2013 2014 2015 2016


Financial Year

HIGHLIGHTS FOR THE YEAR 2010- 2016 MAMBO MUHIMU KWA MWAKA 2010- 2016

revenue from investments and other Mapato yatokanayo na uwekezaji na mengineyo

revenue from investments and other Mapato yatokanayo na uwekezaji na mengineyo

operating and other expensesMatumizi ya uendeshaji na mengineyo



Shareholder’s fundMtaji wa wanahisa

net assets value per sharerasilimali halisi kwa hisa

3

1,040 1,188 1,650

2,513

3,298 3,718

5,031

-‐

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2010 2011 2012 2013 2014 2015 2016

TZS MILLION

FINANCIAL YEAR

Investment Income

Other Income

5,242

3,836 4,091 3,483

4,467

5,663

3,873

-

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015 2016 TZS MILLION

FINANCIAL YEAR

(2,690) (1,398)

(341) 778 755

15

8,670

(4,000)

(2,000)

-‐

2,000

4,000

6,000

8,000

10,000

2010 2011 2012 2013 2014 2015 2016


Financial Year

4

12,97

2

18,11

4

26,85

5

79,97

3

109

,609

80,51

4

99,41

8

2010 2011 2012 2013 2014 2015 2016

In Tzs M

illion

Financial Year

343 479 710

2,113 2,897

2,128

2,627

2010 2011 2012 2013 2014 2015 2016

TZS MILLION

FINANCIAL YEAR

4

12,97

2

18,11

4

26,85

5

79,97

3

109

,609

80,51

4

99,41

8

2010 2011 2012 2013 2014 2015 2016

In Tzs M

illion

Financial Year

343 479 710

2,113 2,897

2,128

2,627

2010 2011 2012 2013 2014 2015 2016

TZS MILLION

FINANCIAL YEAR


total profit after tax Jumla ya faida baada ya kodi



CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR 2010 TO 2016

2016 2015 2014 2013 2012 2011 2010

TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000

Revenue 1,912,522 2,020,538 1,574,060 1,669,756 2,153,539 1,304,259 1,635,442

Cost of sales (696,453) (844,919) (687,144) (758,164) (704,994) (382,001) (2,031,447)

Gross profit 1,216,069 1,175,619 886,916 911,592 1,448,545 922,258 (396,005(

Other income 6,099,309 128,126 521,002 214,078 43,425 22,580 2,821

Other expenses (466,172) (238,361) (266,699) - (41,555) (160,060) (340,050)

Administrative expenses (2,667,915) (2,961,457) (3,239,456) (2,518,061) (3,173,071) (3,175,686) (2,488,504)

Operating loss before financecosts 4,181,291 (1,896,073( (2,098,237( (1,392,391( (1,722,656( (2,390,908( (3,221,738(

Investments Income 5,030,620 3,718,407 3,298,380 2,513,340 1,650,000 1,188,000 1,039,787

Finance expenses (42,037) (1,618,353) (273,317) (206,982) (171,756) (118,666) (382,025)

Profit before taxation 9,169,874 203,981 926,826 913,967 (244,412( (1,321,574( (2,563,976(

Taxation (499,710) (188,970) (171,594) (135,942) (96,375) (76,875) (126,014)

Profit for the year 8,670,164 15,011 755,232 778,025 (340,787( (1,398,449( (2,689,990(

Other comprehensive incomenet of income tax

Net change in fair value of available for sale financialassets

6,560,209 (29,512,192) 28,373,634 51,966,045 8,910,000 6,270,000 (4,950,000)

Reclassification adjustments relating to available for sale financial assets disposed inthe year

(1,494,562)

Gain on Property Revaluation 3,649,766

Total comprehensive (loss(/income 17,385,577 (29,497,181( 29,128,866 52,744,070 8,569,213 4,871,551 (7,639,990(

Income/(loss( attributable to

Equity holders of the company 8,760,352 417,409 1,262,014 1,152,511 (169,203) (1,128,050) (2,284,428)

Non-controlling interest (90,187) (402,398) (506,782) (374,486) (171,584) (270,399) (405,562)

8,670,165 15,011 755,232 778,025 (340,787( (1,398,449( (2,689,990(

Total comprehensive (loss(/:income attributable to

Equity holders of the company 15,687,380 (29,094,783) 29,635,648 53,118,556 8,740,797 5,141,950 (7,234,428)

Non-controlling interest 1,698,198 (402,398) (506,782) (374,486) (171,584) (270,399) (405,562)

17,385,578 (29,497,181( 29,128,866 52,744,070 8,569,213 4,871,551 (7,639,990(

Earnings per share for profit attributable to the ordinary:equity holder of the company

(Basic earnings per share (TZS 232 11 33 30 -4 -30 -60

Diluted earnings per share((TZS 232 11 33 30 -4 -30 -60



ConSolIDAteD StAteMent oF FInAnCIAl poSItIon For tHe YeAr 2010 to 2016

2016 2015 2014 2013 2012 2011 2010TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000 TZS’ 000

ASSETSNon-current assetsProperty, plant and equip-ment 6,841,645 2,664,494 2,037,977 2,165,787 2,378,206 2,969,157 3,685,160

Investment securities 96,896,377 90,416,198 118,748,468 90,501,600 36,960,000 28,050,000 21,780,000Deferred tax asset 153,665 153,665 153,665 153,665 153,665 153,665

103,738,022 93,234,357 120,940,110 92,821,052 39,491,871 31,172,822 25,618,825Current assetsDue from related parties - - - - 3,780 19,204Trade and other receivables 4,407,743 304,066 17,894 44,229 8,625 1,170,357 12,107Cash and cash equivalent 712,295 1,787,439 4,134,339 2,638,756 2,686,818 - -

5,120,038 2,091,505 4,152,233 2,682,985 2,695,443 1,174,137 31,311

Total assets 108,858,060 95,325,862 125,092,343 95,504,037 42,187,314 32,346,959 25,650,136

EQUITY &LIABILITIESCapital and reservesIssued share capital 4,730,153 4,730,153 4,730,153 4,730,153 4,730,153 4,730,153 4,730,153Share premium 4,562,836 4,562,836 4,562,836 4,562,836 4,562,836 4,562,836 4,562,836Accumulated losses (4,141,556) -11,955,876 -12,373,285 -13,635,300 -14,787,811 -14,618,608 -13,490,559Proposed Dividend 946,031Available for sale reserves 88,242,722 83,177,075 112,689,267 84,315,633 32,349,588 23,439,588 17,169,588Property revaluation reserve 1,861,381

Total equity attributable toequity holders of the Group 96,201,567 80,514,188 109,608,971 79,973,322 26,854,766 18,113,969 12,972,018

Non-controlling interest 658,877 (1,039,323) (636,925) (130,142) 244,344 415,928 686,327 Total equity 96,860,444 79,474,865 108,972,046 79,843,180 27,099,110 18,529,897 13,658,345Non-Current LiabilitiesOther liability 286,834 382,304 -Deferred tax liability 1,564,186Current liabilitiesIncome tax payable 221,754 125,375 122,325 115,650 105,375 91,500 74,025Other liability 26,704 26,704 -Borrowing 4,419,449 7,506,304 7,223,113 7,023,962 6,846,298 6,717,768 6,619,357Trade and other payables 5,478,690 7,810,310 8,774,859 8,521,245 8,136,531 7,007,794 5,298,409

10,146,597 15,468,693 16,120,297 15,660,857 15,088,204 13,817,062 11,991,791

Total equity & liabilities 108,858,060 95,325,862 125,092,343 95,504,037 42,187,314 32,346,959 25,650,136



Investments portfoliouwekezaji

projected performance trend 2017- 2020Mategemeo ya utendaji 2017- 2020

projected earnings and dividend per shareMategemeo ya magawio kwa hisa

5

2,100

5,069 5,441 5,842

-‐ 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

2017 2018 2019 2020

TZS Million

Financial Year

Revenue Expenses Profit Before Tax

49

127 136

146

29 38 41 44

0

20

40

60

80

100

120

140

160

2017 2018 2019 2020

In TZS (Per Share)

Financial Year

5

2,100

5,069 5,441 5,842

-‐ 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

2017 2018 2019 2020

TZS Million

Financial Year

Revenue Expenses Profit Before Tax

49

127 136

146

29 38 41 44

0

20

40

60

80

100

120

140

160

2017 2018 2019 2020

In TZS (Per Share)

Financial Year

Equity Fixed Deposite Commercial Paper Government Bond Treasury Bills

NMB Equity Other

10%10%

10%8%92%

45%

25%

FUTURE OUTLOOK MATARAJIO YA MBELENI

projected income statement for the year 2017 to 2020Matarajio ya mapato na matumizi kwa mwaka 2017 to 2020

2017 2018 2019 2020

TZS “Mil” TZS “Mil” TZS “Mil” TZS “Mil”Revenue 5,753 7,629 7,931 8,509Expenses (3,653) (2,560) (2,490) (2,667)Profit Before Tax 2,100 5,069 5,441 5,842Taxation (252) (277) (305) (335)Profit After Tax 1,848 4,792 5,136 5,507 Earnings Per Share 49 127 136 146Dividend Per Share 29 38 41 44



“Pamoja na Matatizo yote tuliyopitia, tumeendelea kuhakikisha mtaji wa NICOL unaimarika ili kuleta maendeleo na mafanikio makubwa kwa wanahisa katika siku za usoni. Kwa mara ya kwanza katika kipindi cha miaka kumi tumeweza kutangaza gawio kwa hisa, na tunahakika NICOL itaendelea kutoa gawio kila Mwaka.”

“Notwithstanding the magnitude of the problems encountered, we consistently ensured NICOL’s capital is strentherned to achieve a better financial performance in the future. For the fist time in ten years we are able to declare a dividend. We are confident that NICOL shall continue to pay dividends incrementally in the years to come”

Dr. Gideon H. KaundaNICOL Board Chairman



INTRODUCTIONOn behalf of the Board of Directors, I am pleased to present to you the third Annual Report covering the period ending 31 December 2016. The report deals with outstanding issues of special interest to the Shareholders.

Audited Financial Statements. Prior to the Board/management changes in 2012, NICOL did not have any audited financial accounts after 2008. One of the priorities of the new management was to grapple with the legal requirements to prepare and audit all the outstanding financial accounts. Thus, the audited Financial Statement for the year ended 31 December 2009 finalized and tabled at the 2nd Annual General Meeting.

The audit of the Financial Statements for the years ending 31 December 2010 to 2015 was completed in May 2017. The Auditors issued an unqualified report for NICOL corporate Financial Statements and a qualified Report for the Group Financial Statements. The poor state of Tanzania Meat Company Ltd (TMC) financial accounts was the causal factor for the qualified report issued for the group financial statements. The gravity of the situation at TMC necessitated the commissioning of a forensic audit which revealed poor governance and gross financial mismanagement. Appropriate action has been taken by the TMC Board.

For purposes of compliance with the relevant law, the Shareholders are hereby requested to pass a Resolution adopting the audited financial statements for the years ending 31 December 2010 to 2015. The highlights of these financial statements have been shown in pages 6 and 11 of this report. The audited financial statements are also available from NICOL offices, or may be downloaded from NICOL website.

Court CasesSince the inception of new management, NICOL was subjected to numerous court cases, most of which were frivolous and vexatious. Unfortunately, these cases were instigated by the dismissed NICOL Chairman and his colleagues. NICOL has so far won all the cases in which judgments and rulings have been delivered to date; a situation which the losers have obstinately refused to accept, and thus resort

UTANGULIZIKwa niaba ya Bodi ya Wakurugenzi, nina furaha kubwa kuleta mbele yenu Taarifa ya Mwaka kwa kipindi kilichoishia tarehe 31 Disemba 2016. Taarifa yangu itazungumzia matukio muhimu katika kipindi hiki.

Taarifa za Fedha Zilizokaguliwa Itakumbukwa kuwa katika Mkutano Mkuu wa Pili wa Mwaka niliarifu kuwa Bodi yangu ilikuta viporo vya mahesabu ya kampuni vilivyokuwa vimelala kwa zaidi ya miaka minane. Kwa sababu ambazo zinazojulikana kwa Wanahisa, iliwezekana kukamilisha na kuleta mbele ya Mkutano Mkuu mahesabu ya mwaka 2009.

Ukaguzi wa Taarifa za Fedha kwa miaka iliyofuata, kuanzia tarehe 31 Disemba 2010 mpaka 2015, ulikamilika mwezi Mei 2017. Wakaguzi wa mahesabu walitoa hati safi kwa mahesabu ya NICOL kampuni, na “qualified report “ kwa mahesabu ya mahesabu ya NICOL grupu; ambao yanajumuisha mahesabu ya kampuni tanzu. Uwekaji mbaya wa mahesabu ya kampuni tanzu ndio sababu kubwa ya kupata “qualified opinion”.

Kwa kuzingatia muda uliopita, na vilevile uwepo wa mahesabu yaliyokaguliwa kwa mwaka unaoishia tarehe 31 Disemba 2016, tumewaletea “Financial Highlights” za mahesabu ya miaka 2010 mpaka 2015, ambazo zimeoneshwa katika ukarasa 6-11 wa Taarifa ya Mwaka. Mahesabu kamili kwa kipindi hiki yanapatikana kwenye tovuti ya NICOL. Kwa madhumuni ya “compliancy”, wanahisa wanaombwa wayapitishe mahesabu yaliyokaguliwa kwa miaka ya fedha 2010 mpaka 2015.

Kesi zilizopo MahakamaniKatika mwaka ulioisha idadi ya kesi zilizofunguliwa zilipungua sana. Hata hivyo hakuna kesi yeyote kati ya hizo ambayo iliathiri utendaji kazi wa NICOL. Hata hivyo, kwa mujibu wa kumbukumbu za kimahakama, inaonekana kuna kakikundi ka wanahisa wachache sana ambao, pamoja na kwamba huwa wanashiriki mikutano husika ya wanahisa tangu ule wa tarehe 14 Aprili 2012, wamekuwa wakifungua kesi mahakamani, zenye madai ya kujirudia, kupinga maamuzi halali yalichukuliwa Wanahisa mikutanoni, wakiomba kuuzuia, kama sio kuufuta kabisa, uongozi na Bodi ya NICOL iliyowekwa madarakani na wanahisa.

CHAIRMAN’S REPORT TAARIFA YA MWENYEKITI



to constantly appealing against these rulings and judgments. Nevertheles, there has been a considerable decrease in number of new cases filed during the past one year. None of the new cases pose a threat to NICOL activities.

Examination of all the cases show that they were filed by the same small group of people who actively oppose the decisions made by Shareholders, the Courts and the government. Some of these individuals are NICOL Shareholders who have fully participated in all the shareholders meeting ever held since 14th April 2012, but lacked the courage to state their case before fellow shareholders.

Instead, they have chosen to hide behind the court cases by which they seek to restrain or dislodge the Board and management that had been legitimately appointed by the Shareholders. Curiously, in most of these cases, these individuals are invariably represented by the same law firm; M/s Ngalo and Co Advocates. Some of the owners of Ngalo and Co Advocates are also Shareholders in NICOL. As for the cases filed, the reliefs sought and the arguments presented invariably recur in all the cases, as may be observed in a few of the cases hereunder:

1. Civil Case No. 26 of 2016, Philemon Mgaya, Ibrahim Kaduma, Tabitha Siwale, Amb. Anthony Nyakyi and Salum Shamte vs. PSPF, PPF, LAPF, GEPF, the CMSA, Dr. Gideon H Kaunda Kinoni A Wamunza and National Investments Company Ltd.

In this matter, the Plaintiffs, who are represented by Advocate Colman Ngalo (also a NICOL shareholder) from Ngalo and Co Advocates, claim that the shareholders meeting held on 14th April 2012 was unlawful and irregular, they therefore claim:

i. That they be paid T.Sh2.5billion as special damages,

ii. permanent injunction restraining the Defendants and their agents from interfering affairs and management of NICOL, and

iii. to be paid general damages.

The case above is still pending. However, after had delivered rulings in cases (No. 2) and (No. 3) below,

Na wamediriki kuwaorodhesha kama walalamikaji wanahisa ambao hawana habari kabisa na hizo kesi zilizofunguliwa! Katika kufungua kesi hizo, Wanahisa hawa mara nyingi sana wanawakilishwa na kampuni ya uwakili ya Ngalo & Co Advocates, ambayo baadhi ya wamiliki wake ni wanahisa wa NICOL. Kesi hizi ni za kipuuzi na kuudhi, na maombi yao kwa mahakama kimsingi huwa hayabadiliki, licha ya wingi wa kesi, kama ilivyooneshwa katika mifano ifuatayo:

1. Civil Case No. 26 of 2016, Philemon Mgaya, Ibrahim Kaduma, Tabitha Siwale, Amb. Anthony Nyakyi and Salum Shamte dhidi ya PSPF, PPF, LAPF, GEPF, the CMSA, Dr. Gideon H Kaunda Kinoni A Wamunza na National Investments Company Ltd.

Katika kesi hii, Walalamikaji, ambao wanawakilishwa na Wakili Colman Ngalo kutoka kampuni ya uwakili ya Ngalo & Co Advocates, wanadai kuwa Mkutano wa Wanahisa uliofanyika tarehe 14 April 2012 haukua halali na “irregular”, hivyo bassi wanaiomba Mahakama iamuru:

i. Walalamikaji walipwe shilingi bilioni 2.5 kama “special damages”

ii. Walalamikiwa, au wakala wao wazuiwe kuingilia masuala au uongozi wa NICOL.

iii. Walipwe “special damages” kama mahakama itakavyoona.

Kesi hii bado ipo mahakamani haijaamuliwa. Lakini cha kushangaza ni kwamba, baada ya uamuzi kutolewa katika kesi namba 2 na 3 hapo chini, ambazo zilitokana na kesi hii, jalada la kesi hii limetoweka kutoka mahakamani. Mwanasheria wa NICOL amemwaandikia Msajili wa Mahakama juu ya hali hii isiyo ya kawaida.

Aidha, Wanahisa vilevile wanaombwa wazingatie kuwa walalamikaji wawili waliojumuishwa katika kesi hii, Mrs Tabitha Siwale na Bw. Ibrahim Kaduma wamekana kimaandishi kufahamu uwepo wa kesi, au kuhusika kwa namna yeyote katika kesi hii; lakini “saini zao” zipo katika hati ya malalamiko. Wakili wa kesi hii atafahamu aliizipataje saini zao.

2. Misc. Civil Application No 167 of 2016, inatokana na Civil Case No. 26 ya 2016 (No. 1 hapo juu), Philemon Mgaya, Ibrahim Kaduma, Tabitha




which originates from this case, the case file for, and traces of Civil Case No. 26 of 2016 mysteriously disappeared from the Court. NICOL’s lawyers have written to the Registrar, but there has been no response to date.

The Shareholders may also wish to note that the second and third Plaintiffs, Mr. Ibrahim Kaduma and Mrs. Tabitha Siwale, have denied in writing their involvement in any way whatsoever, or any knowledge of this case! In the circumstances, notwithstanding the frivolous and vexatious nature of the cases, the Advocates representing the Plaintiffs in this matter should explain why the signatures of the alleged Plaintiffs in the Plaint should not be treated as forgeries.

2. Misc. Civil Application No 167 of 2016, originating from Civil Case No. 26 of 2016 (No. 1 above), Philemon Mgaya, Ibrahim Kaduma, Tabitha Siwale, Amb. Anthony Nyakyi and Salum Shamte vs. PSPF, PPF, LAPF, GEPF, the CMSA, Dr. Gideon H Kaunda Kinoni A Wamunza and National Investments Company Ltd.

This application was filed by Philemon Mgaya, allegedly with the authorization from the other 4 applicants, prayed for an urgent ex-parte order restraining the Respondents from operating bank account No. 2010130015 with the National Bank of Commerce, and from dealing with all properties of the company.

The Applicants were represented by Advocate Michael J.T. Ngalo from Ngalo and Co Advocates. The point to note is that Mrs. Siwale and Mr. Kaduma denied involvement in this matter.This application was struck out with costs on preliminary objection.

3. Misc. Civil Application No 800 of 2016, originating from Civil Case No. 26 of 2016 (1 above), Philemon Mgaya, Ibrahim Kaduma, Tabitha Siwale, Amb. Anthony Nyakyi and Salum Shamte vs. Dr. Gideon H Kaunda Kinoni A Wamunza and National Investments Company Ltd.

The Applicants, who were represented by Advocate Colman Ngalo from Ngalo and Co Advocates, prayed for orders to restrain the Respondents from holding

Siwale, Amb. Anthony Nyakyi and Salum Shamte dhidi ya PSPF, PPF, LAPF, GEPF, the CMSA, Dr. Gideon H Kaunda Kinoni A Wamunza na National Investments Company Ltd.

Kesi hii ilifunguliwa na Bw. Philemon Mgaya, inasemekana akiwa na kibali cha walalamikaji 4 wengine (tumeonesha hapo juu wamekana kimaandishi kuhusika au kujua uwepo wa kesi hii) akiwasilishwa na Wakili Michael T J Ngalo, kutoka kampuni ya uwakili ya Ngalo and Co Advocates, akiomba Mahakama itoe “urgent ex-parte order” kuwazuia walalamikiwa kuendesha akaunti ya benki Namba 2010130015 iliyopo National Microfinance Bank, na wasijihusishe na mali nyingine za kampuni.

Mahakama iliyatupilia mbali maombi haya kutokana na preliminary objection iliyowekwa na wajibu maombi.

3. Misc. Civil Application No 800 of 2016, inatokana na Civil Case No. 26 of 2016 (angalia namba 1 hapo juu), Philemon Mgaya, Ibrahim Kaduma, Tabitha Siwale, Amb. Anthony Nyakyi and Salum Shamte dhidi ya Dr. Gideon H Kaunda Kinoni A Wamunza na National Investments Company Ltd.

Waombaji katika kesi hii, ambao waliwakilishwa na Wakili Colman Ngalo kutoka Ngalo and Co Advocates, waliomba amri ya Mahakama kuwazuia wajibu maombi wasiitishe Mkutano Mkuu wa Wanahisa.

Mahakama iliitupilia mbali kesi na wahusika wakaamuriwa walipe gharama za kuendesha kesi.Kama ilivyokuwa katika namba 1 hapo juu, ni wazi saini za Waombaji Na. 1 na 2 zilighushiwa kwani wanakana kuhusika na maombi haya kwa namna yeyote ile.

4. Misc. Commercial Cause No. 11 of 2017 Salum Shamte na Dr. Bonaventura Mtei dhidi ya Dr. Gideon Kaunda, Adam Kinoni Wamunza na National Investments Company Ltd.

Katika kesi hii Waombaji, ambao wanawakilishwa na Wakili Colman Ngalo kutoka Ngalo and Co Advocates, waniomba Mahakama ibatilishe kumbukumbu za Mkutano Mkuu wa Pili wa Wanahisa uliofanyika tarehe 26 Novemba 2016




the shareholders’ Annual General Meeting on 26th November 2016.

The matter was dismissed with cost.As was the case in No. 1 and No. 2 above, the second and third Applicants had dissociated themselves from case, hence their signatures in the application are forged.

4. Misc. Commercial Cause No. 11 of 2017 Salum Shamte and Dr. Bonaventura Mtei vs. Dr. Gideon Kaunda, Adam Kinoni Wamunza and National Investments Company Ltd.

The Petitioners, who were represented by Colman Ngalo of Ngalo and Co Advocates, petitioned the Court for nullification of the proceedings of the 2nd NICOL Annual General Meeting held on 26th November 2016.The matter was dismissed with costs at Preliminary objection.

5. Misc. Commercial Application No. 262 of 2017 Salum Shamte and Dr. Bonaventura Mtei vs. Dr. Gideon Kaunda, Adam Kinoni Wamunza and National Investments Company Ltd.

The case was filed by Advocate Michael T J Ngalo, of Ngalo and Co Advocates, allegedly on instructions of the Applicants, praying for extension of time to file a petition under the Companies Act for orders to nullify the proceedings of the 2nd Annual General Meeting held on 28th November 2016. The matter is coming for hearing on 6th December 2017.

6. Civil Application No 151 of 2016 Isidore Leka Shirima Catherine Robert Borongo Vs PSPF, PPF, LEPF, GEPF, CMSA, NICOL and Kinoni Adam Wamunza.

The Applicants filed an application for an order of the Court of Appeal to revise the trial Judge order in Misc. Commercial Application No 288 of 2014 dated 18th March 2016, in which Hon. Mansour, J., among others, barred Mr. Felix Gamaliel Mosha from calling himself as Chairman of NICOL’s Board from 14th April 2012.The matter is pending with court awaiting for the Court Summons.

(ambao Wakili Ngalo pia alishiriki). Mahakama iliyatupilia mbali maombi haya katika hatua ya preliminary Objection, na wahusika kutakiwa walipe gharama za kesi.

5. Misc. Commercial Application No. 262 of 2017 Salum Shamte na Dr. Bonaventura Mtei dhidi ya Dr. Gideon Kaunda, Adam Kinoni Wamunza and National Investments Company Ltd.

Kesi hii ilifunguliwa na Wakili Michael T J Ngalo, kutoka kampuni ya uwakili ya Ngalo and Co Advocates, inasemekana kwa maagizo ya Waombaji, akiomba Mahakama imuongezee muda wa kutuma maombi Mahakamani chini ya Sheria ya Makampuni apewe amri ya Mahakama kubatitlisha kumbhukumbu za Mkutano Mkuu wa Pili wa Wanahisa uliofanyika tarehe 26 Novemba 2016.Shauri hili litasilizwa tarehe 6 Disemba 2017.

6. Civil Application No 151 of 2016 Isidore Leka Shirima, Catherine Robert Borongo dhidi ya PSPF, PPF, LEPF, GEPF, CMSA, NICOL na Kinoni Adam Wamunza.

Waombaji katika kesi hii wamefungua maombi wapate amri ya Mahakama ya Rufaa kupitia tena amri ya Mahakama Kuu iliyotolewa katika Misc. Commercial Application No 288 ya 2014 ya tarehe 18th March 2016, ambapo Bwana. Jaji Mansour, kati ya mambo mengine, alimwekea marufuku Bw. Felix Gamaliel Mosha asijiite tena Mwenyekiti wa Bodi ya NICOL tangu tarehe 14 Aprili 2012.Kesi iko Mahakama ya Rufaa ikisubiri samansi.

7. Civil Appeal No 24 of 2016 National Investments Company Limited dhidi ya PSPF, PPF, LAPF, GEPF, CMSA, na Kinoni Adam Wamunza.Rufaa hii imefunguliwa na Bw. Felix Gamaliel Mosha kwa niaba ya NICOL na bila kuidhinishwa au maagizo kutoka NICOL, na akiwa ameipuuza hukumu iliyotolewa na Bwana. Jaji Mansoor (Na. 6 hapo juu). Bw. Mosha anawakilishwa na Wakili Colman Ngalo kutoka Ngalo and Co Advocates.

Kesi hii inasubiri Mahakama ya Rufaa. NICOL imeweka pingamizi la awali la kisheria (Preliminary Objection) kwa sababu Bw. Mosha na Wakili Colman Ngalo hawana maagizo yeyote kutoka NICOL ya kufungua kesi hii kwa niaba ya NICOL,




7. Civil Appeal No 24 of 2016 National Investments Company Limited vs. PSPF, PPF, LAPF, GEPF, CMSA, and Kinoni Adam Wamunza.

This Appeal was filed by Mr. Felix Gamaliel Mosha on behalf of NICOL, in disregard of the High Court ruling referred to in No.6 herein above, and without the authority or instructions from NICOL. Advocate Colman Ngalo from Ngalo and Co Advocates is representing the Appellant.

The appeal is pending in the Court of Appeal. NICOL has raised Preliminary Objection on grounds that both the Appellant and Advocate Colman Ngalo do not have instructions to institute the Appeal on behalf of NICOL, and further that double remedy is being sought; both the Appeal and Revision emanate from the order of Hon. Mansour, J.

Effectively, what these so called shareholders have achieved is to inflict substantial costs upon NICOL and denied NICOL Board and management the right to work peacefully and productively for the company. In the circumstances, it is imperative that the actions of these individuals be curbed by the shareholders voicing their concerns to the general public and the relevant authorities. Towards this end, the shareholders have been requested to pass a resolution that they do not support the action taken by these individuals, who should be required to stop from unauthorized use of the Shareholders’ name to file court cases, and withdraw all the ongoing court cases within one month from the date of this meeting, failing which management should take legal action against them.

Status of Nicol PortfolioNICOL Shareholders had directed the Board to evaluate and report on the status and viability of all the investments made by NICOL and, where deemed appropriate, vacate from the unviable investments. NICOL had invested in equity as well as direct investment in companies and projects. The performance of equity investment has been satisfactory. After the divestiture of Tanzania Fisheries development Company Ltd. reported to the shareholders at the last meeting, NICOL would be left with only a single direct investment, Tanzania Meat Company Ltd (TMC), and investments in projects.

Tanzania Meat Company Ltd (TMC) had been

na kwamba wahusika wanakatia Rufaa kesi ambayo iko katika Mahakama hiyohiyo ikiomba hukumu ya Mh. Jaji Mansoor ipitiwe tena.

Katika kesi zote hizi, wahusika walichofanikiwa ni kuiongezea NICOL gharama za kutetea makesi ya kipuuzi na kuudhi, pamoja na kuinyima Bodi ya NICOL na menejimenti haki ya kufanya kazi zao kwa amani na ufanisi, kwani hawajafanikiwa kushinda hata kesi moja mpaka sasa.

Hivyo basi ipo haja ya kuwadhibiti wahusika, kwa hiyo inapendekezwa Wanahisa wapitishe maazimio yatakayofanikisha hilo. Kwanza iazimiwe kuwa kesi zote za aina hii zimefunguliwa kinyume na utaratibu kwani wahusika hawana “mandate” ya Wanahisa na Mahakama isizi“entertain”. Pili wahusike watakiwe kuzifuta kesi zote katika muda wa mwezimmoja kutoka tarehe ya Mkutano Mkuu; na tatu, iwapo itashindikana kuziondoa mahakamani, menejiment ya NICOL iagizwe kuchukua hatua za kisheria ili suala hili limalizike kabisa.

Hali ya Uwekezaji Uliofanywa na NicolWanahis wa NICOL waliiagiza Bodi itathmini hali ya uwekezaji uliofanywa na NICOL na, kwa jinsi itakavyoonekana, taratibu za kuachana na uwekezaji wote usiokuwa na faida.

NICOL iliwekeza katika “equity” na moja kwa moja katika makampuni na miradi. Uwekezaji katika equity umekuwa unaleta marejesho yanayoridhisha kiasi cha kuiwezesha NICOL kutoa gawio. Kwa upande wa makampuni, baada ya kuiondoa kampuni ya samaki Mwanza (TFDC), unabaki uwekezaji katika kampuni moja tu, yaani Tanzania Meat Company Ltd (TMC). Kampuni hii ilikuwa inaendeshwa vibaya kwa mikataba tata, malengo yake ya awali yalitekelezwa na hivyo kuidunisha na kubaki kama machinjio ya wateja weny mifugo yao. Matokeo yake ni viability ya TMC chini ya mfumo huu ni ndogo sana. Hata hivyo, Bodi imekuwa ikifanya kazi pamoja na Bodi ya TMC kudhibiti hali iliyopo. Utendaji wa kifedha wa TMC, pamoja na kwamba bado unaonesha hasara, lakini hali inaimarika kadri muda unavyopita.

Kuhusu uwekezaji mwingine katika kampuni/miradi isiyokuwa na faida, taratibu za kuzifunga zimeanza kutekelezwa kwa Tanzania Fisheries Development Company Ltd (TFDC(, Africa Biofuel and Emissions Reduction (T( Ltd,




Twiga Feeds Ltd and KDC Minerals (T( Ltd. Makampuni/miradi hii itafungwa kwa kwa kuzingatia matakwa ya Sheria ya Makampuni.Kwa uwekezaji katika Interchem Pharmaceuticals and Beverages Company Ltd (IPBL( – (51%(, na East Africa Meat Company Ltd.; imeamuliwa uchunguzi zaidi ufanyike baada ya uchunguzi wa awali kuibua viashiria vya uwepo ulaghai katika shughuli za uwekezaji katika “makampuni” haya, kama inavyoonekana katika muhtasari wa maelezo yafutayo.

Katika taarifa za aliyekuwa Mwenyekiti wa NICOL wakati huo, Bw. Felix G Mosha, Interchem Pharmaceuticals and Beverages Company Ltd (IPBL( inaoneshwa kama kampuni iliyokuwa inamikiliwa na kutangazwa (promoted) na Bw. Benjamin A. Mengi na familia yake, Dr. Jonas P. Kipokola, MAC Group Ltd na Bw. Yogesh M Manek; na inasemekana ilitokana kuunganishwa (merger) kwa makampuni mawili; yaani, Interchem Pharma Ltd and Milcafe Ltd., ambazo zote zinaonekana katika rejesta ya makampuni iliyopo BRELA, ingawa hazijafile “Annual Returns” kwa zaidi ya miaka kumi. Mahesabu ya NICOL ya wakati huo yanaonesha asilimia 51% ya IPBL inamilikiwa na NICOL.

Hata hivyo,uungwanishaji wa makampuni haya haukukamilishwa, na kwa sasa sababu hilo kutofanyika hazijafahamika. Hivyo basi IPBL kisheria haipo, na vilevile haipo katika rejesta ya makampuni BRELA. Hali inatatiza zaidi ikizingatiwa kuwa tarehe 17 Disemba 2008, Barclays Bank iliiweka Interchem Pharma Ltd chini ya ufilisi baada ya kushindwa kurejesha karadha ya mwaka 2001. Hatua hiyo ya Barclays Bank inabatilisha kabisa matazamio ya muungano wa Interchem Pharma Ltd - Milcafe Ltd.

Kwa upande mwingine, mwaka 2006, NICOL iliingia mkataba wa kununua asilimia 51% ya hisa za IPB Pharmaceutical and Beverages Company Ltd (jina tofauti na linaoonekana katika vitabu vya NICOL; yaani Interchem Pharmaceuticals and Beverages Company Ltd( kwa malipo ya dola za marekani milioni 2; na tayari NICOL imelipa dola 1,124,711.

Kumbukumbu za BRELA zinaonesha kuwa IPL Pharmaceutical and Beverages Company Ltd, iliandikishwa tarehe 15 Septemb 2006, Namba

recklessly mismanaged, and its original objectives were abandoned, and thereby reducing it to a mere slaughterhouse. Consequently, its viability under this mode of operation is marginal, and is not sustainable. The Board has been working in conjunction with the TMC Board to bring the situation under control. TMC’s financial performance, though still loss making, has been improving.

As regard to the other six unviable direct investments, exit procedures are being implemented for four of these; i.e. Tanzania Fisheries Development Company Ltd (TFDC(, Africa Biofuel and Emissions Reduction (T( Ltd, Twiga Feeds Ltd and KDC Minerals (T( Ltd. These investments will be closed over time in accordance with the requirements of the companies Act.

For the remaining two investments; i.e. 51% of the shares in Interchem Pharmaceuticals and Beverages Ltd (IPBL( and yet to be determined proportion in East Africa Meat Company Ltd.; it was decided to carry out further investigations after initial inspection revealed indicators of fraudulence in the investment transactions for these “companies”.

Interchem Pharmaceuticals and Beverages Ltd (IPBL( is on record as being fully owned and promoted by Mr. Benjamin A. Mengi and family, Dr. Jonas P. Kipokola, MAC Group Ltd and Mr. Yogesh M Manek. The company was to be formed from a merger of two existing and duly registered companies; i.e. Interchem Pharma Ltd and Milcafe Ltd. However, both the companies have not filed Annual Returns for over ten years.

Though the resolution to merge the two companies was passed on 29th December 2005, and a Mr. Vinod Dhall being mandated to finalize the requisite legal issues, the merger of the companies was never consummated by the time NICOL came into the picture towards the end of 2006. IPBL had no legal existence, and therefore incapable of entering into any agreement. The situation is further complicated by the fact that Barclays Bank put Interchem Pharma Ltd in receivership on 17th December 2008, under the powers of a 2001 debenture. This move in effect voided all the prospects of an Interchem Pharma Ltd - Milcafe Ltd merger ever taking place.




In 2006, NICOL had signed an Agreement to acquire 51% of a company known as IPB Pharmaceutical and Beverages Ltd (the name of the company in NICOL’s books is Interchem Pharmaceuticals and Beverages Ltd( for US $ 2million, and actually paid US$ 1,124,711. BRELA records show that IPL Pharmaceutical and Beverages Ltd, was incorporated on 15th September 2006, Corporate Number 57702. In the absence of audited Financial Statements it has not been possible to establish the assets of this company.

Despite having paid US $ 1,124,711, out of US $ 2million stipulated in the sale agreement, NICOL has not been listed as a shareholder in BRELA records. The Shareholders of IPL Pharmaceutical and Beverages Ltd are Mac Group (43%), (30.8%), Benjamin A Mengi (30%), Millie Mengi (13%), Yogesh M Manek (7%) and Dr. Jonas P. Kipokola (7%). The Directors of the company are Benjamin A Mengi, Dr. Jonas P. Kipokola, Sylvester Barongo and Masha Makatta.

The situation surrounding these companies require further clarification. Further investigations are in progress to establish into which company NICOL acquired 51% stake and the criteria used; the existence, or otherwise of IPL Pharmaceutical and Beverages Ltd assets, the effects of Barclays Bank receivership, and more recoverability potential of the money paid.

As for East African Meat Company Ltd, NICOL had paid T.Shs 140 million to acquire an unspecified stake in the company. However, BRELA records do not show NICOL as being a member of East African Meat Company Ltd, which official company records show is owned by Dar es Salaam City Council and its municipalities. NICOL is working with Dar es Salaam City Council to establish the fate money paid by NICOL.

Resumption Of Trade Of Nicol Shares At The DseIn accordance with the advice received, NICOL is in the process of revising its Prospectus by way of an Information Memorandum. The task is in advanced stage, and the matter will be reported at the plenary session. Preliminary report indicates that NICOL could resume trading its share at the Dar es Salaam Stock Exchange before the end of this year.

Financial PerformanceThe measures that were taken have resulted in significant improvements in in both the quality

ya Kampuni 57702. Wanahisa wa kampuni hii wanashabihiana na wale wa IPBL, ambao ni Dr. Jonas P. Kipokola (43.2%), Mac Group (30.8%), Benjamin Mengi (19.1%), Millie Mengi (6.8%) and Yogesh M Manek (less than 0.0%). The Directors of the company are Benjamin Mengi, Dr. Jonas P. Kipokola, Sylvester Barongo and Masha Makatta. Kampuni ilifanya mabadiliko mahali zilipo ofisi zake (registered office), wakurugenzi wa kampuni umiliki wa hisa bila kuitarifu BRELA ipasavyo. Hali kadhalika, pamoja na kuwa NICOL iliilipa IPL Pharmaceutical and Beverages Company Ltd. dola za marekani 1,124,711, lakini NICOL haijaorodheshwa kama mmoja wa wanahisa wa IPL Pharmaceutical and Beverages Company Ltd.

Kwa muhtasari huu mfupi itaonekana kuwa kuna umuhimu wa kuendelea na uchunguzi zaidi, kuanzia vigezo vilivyotumika kuamua kununua hisa za IPL Pharmaceutical and Beverages Company Ltd., thamani ya hisa, mali za hii kampuni, uhusiano wa kati ya haya makampuni; yaani IPL Pharmaceutical and Beverages Company Ltd., Interchem Pharma Ltd, Milcafe Ltd.na Interchem Pharmaceuticals and Beverages Company Ltd., athari za ufilisi wa Interchem Pharma Ltd., na muhimu zaidi hatima ya pesa zilizolipwa na NICOL.

Kwa upande wa East African Meat Company Ltd, NICOL ilipa shilingi milioni 140/= ili kuwa mshiriki wa kampuni hii; haijajulikana pesa ililipwa kwa nani. Hata hivyo, rekodi za BRELA zionesha East African Meat Company Ltd ni mali ya Dar es Salaam City Council. Kwa hiyo NICOL inashirikiana na Dar es Salaam City Council kupata undani wa kampuni hii kwa sababu taarifa zilizopo NICOL ni tofauti kabisa na hali ilivyokutwa.

Kurejesha Uuzwaji Wa Hisa Za Nicol Katika Soko La Hisa La Dar Es SalaamBaada ya kuonana na mamlaka husika, NICOL ipo katika mchakato wa kutengeneza upya muhutasari wa kampuni. Kazi hiyo inaendelea vizuri na taarifa kamili itawasilishwa kwenye Mkutano Mkuu. Taarifa za awali zinonesha kuwa hisa za NICOL zinaweza kurudi sokoni ikfikapo Januari 2018.

Utendaji Wa KifedhaHatua ambazo zilichukuliwa zimeleta matokeo mazuri katika uwekaji wa mahesabu ya NICOL grupu, na vilevile utendaji wa kifedha kwa ujumla. Viporo vya utayarishaji na ukaguzi wa mahesabu




kwa miaka inayoishia tarehe 31 Disemba 2010 mpaka 2015 yalikamilika na maeneo muhimu ya mahesabu hayo yameoneshwa katika taarifa hii. Ukaguzi wa taarifa za fedha za mwaka uanaoiishia tarehe 31 Disemba 2016 umekamilika na hati safi imetolewa. Taarifa hiyo inaonesha NiCOL imepat faida kabla ya kodi ya shilingi bilioni 9.172/=. Bodi imependekeza gawio la shilingi 25 kwa kila hisa zilipwe kutokana na faida iliyopatikana mwaka 2016.

Mategemeo ya mwka Ujao na HitimishoKatika kipindi kilichopita wanahisa walitoa malalamiko yao kuhusu kuolipwa gawio kwa miaka mingi.

Hayo yalikuwa matokeo ya uwekezaji mbaya uongozi mbaya kifedha uliojaa tamaa, mambo ambayo yalipelekea mtaji kusinyaa. Kushindwa kwa NICOL kulipa gawio kuliathiri vibaya mtizamo wa uma kwa shughuli za NICOL. Hii taswira ya sifa mbaya imo katika mchakaoto wa kufanyiwa mabadiliko, na sasa NICOL ni kampuni bora.

NICOL inaona katika miaka mitatu mpaka minne ijayo mapato ya uwekezaji na gawio linarotarajiwa kulipwa litakua kwa wastani wa asilimia 20% kwa mwaka. Hii itafanikishwa kwa kupanua uwekezaji uliopo kwa madhumuni ya kupata mtajimbegu ambao utatumika kuwekeza katika masoko ya fedha na mtaji. Baada ya hapo, na kwa kuanzia na mtaji imara itawezekana kuwekea katka nyanja nyingine za uchumi.

Kwa kumalizia, nichukue nafasi hii kuzishukuru Mamlaka zote za Udhibiti na taasisi nyingine za serkali kwa misaada yao, uvumilivu, uongozi na imani walioonesha katika uongozi wa NICOL, has nyakati ambazoBodi ilionekana kuelemewa njama na wingi wa kesi Mahakamani.

Aidha, niwashukuru wanahisa wa NICOL kwa uvumilivu, subira na kutuunga mkono hasa tulipopita katika awamu ngumu. Kwa hiyio naona kama ni jukumu langu kuhakikisha kuwa wanahisa wa NICOL hawatajuta tena kuwekeza NICOL kwaa kurudisha imani yao kaitika Collective Investment Scheme ya wazawa.

Dr. Gideon H KaundaNICOL Board Chairman


of book keeping, as well as the general financial performance of the company and group. The long outstanding of audit of the Financial Statements for the years ending 31 December 2010 to 2015 was completed, the highlight of the same appear in this report. The Financial Statements for the year ended ended 31 December 2016 have been audited and a clean audit report issued. NICOL has made a pretax profit of T.Shs 9.172billion. The Board has proposed payment of a dividend of T.Shs 25/= per paid up share out of the 2016 profits.

The Year Ahead And ConclusionPreviously the Shareholders rightly expressed their concern on NICOL’s protracted inability to pay dividends. This was a consequence of bad investments made coupled with rapacious financial mismanagement, which shrunk the company’s investment income. NICOL failure to pay dividends negatively impacted on a section of the public’s perception of the affairs of NICOL. This reputational image is in the process of transformation. We are now a much better company.

NICOL envisages that in the next three to four years it will increase its investment income and dividends payable on the average of 20% annually. This will be achieved through diversification of the existing investments with a view to creating the requisite seed capital for investment in the equity and money markets. Thereafter, from a stronger capital base, NICOL will be in a position to invest in other areas.

In conclusion, I take this opportunity to thank the Regulatory authorities and other government agencies for their tremendous assistance and help, as well as perseverance, support, guidance and confidence shown in management during the periods when the Board appeared to have been overwhelmed by crooked intrigues and litigations. I should also thank NICOL Shareholders for the tolerance, patience and support shown especially during the difficult phases of this endeavor. It is my responsibility, therefore, to ensure that NICOL shareholders will never again regret having invested in NICOL by restoring their confidence in indigenous Collective Investment Scheme.

Dr. Gideon H KaundaNICOL Board Chairman



CORPORATE GOVERNANCE



UTAWALABORA



ANNUAL GENERAL MEETING

The shareholders Annual General Meeting (AGM) is the highest organ of the company.

The Board of Directors derives its mandate and authority from the AGM. The AGM elect the Board and appoint the external auditors periodically. The Board guides and controls all the affairs of NICOL.

BOARD OF DIRECTORS

The Board is responsible for proper management and assured safeguard of the shareholders’ funds. The Board meets regularly to discharge its duties at the interval and frequency as regulated by the MEMATS. However, in the formative stages of NICOL the Board meets fairly frequently in order to keep close watch on the company’s development. The Board formulates the oversees of the implementation of policies and strategic decision. The Board receives technical advices from the Investment Committee. Although the administrative and operational decisions are delegated to the management, the ultimate responsibility rests with the Board itself. The principle instruments for guiding the functions and operations of the company currently in place are:

Financial Regulations Staff Regulations Investment Policy

INVESTMENT COMMITTEE

The investment committee makes sure that stakeholder’s funds are invested wisely in the high - return generating projects. It independently advised on the investment priorities and establishes and efficient portfolio for NICOL. The Committee determines the placement of Assets and sees to it that the same is managed profitably. The Investment committee is the principle advisor to the Board regarding investment matters.

MKUTANO MKUU WA WANAHISA

Kikao cha Wanahisa ndicho chombo cha juu cha Kampuni. Kikao hicho kinaipa Bodi mamlaka na nguvu za kiutendaji.

Kikao cha Wanahisa ndicho kinacho ichagua Bodi na kuwateua wakaguzi wa mahesabu kwa kipindi husika. Bodi hutawala na kuendesha mambo yote ya NICOL.

BODI YA WAKURUGENZI

Bodi inawajibika kiutawala na kuhakikisha usalama na ulinzi wa rasilimali ya wanahisa.

Bodi huendesha shughuli zake kwa mikutano husika kwa mujibu wa katiba na taratibu mama za kampuni. Kwa nyakati Fulani Bodi hulazimika kukutana kidharura kuhakikisha maendeleo mazuri ya kampuni. Bod hupata ushauri wa kitaaluma toka kwa Kamati ya Uwekezaji. Pamoja na Kukasimu madaraka ya kiutawala na uendeshaji kwa menejimenti, Bodi yenyewe inawajibika

kimsingi kwa mambo hayo. Nyaraka za msing kuisadia kuitawala na kuongoza ni:

Kanuni za Hesabu za Kampuni Kanuni za Kazi za Kampuni Sera ya Uwekezaji ya Kampuni.

KAMATI YA UWEKEZAJI

Kamati ya uwekezaji inajukumu la kuhakikisha kuwa rasilimali za kampuni zinawekezwa kwa umakini katika miradi itoayo faida na yenye majanga madogo yaliyotathminiwa kwa kina. Hutoa ushauri wa kitaalum kwa Bodi katika uwekezaji kwa uhuru, kuiwezesha NICOL kushiriki zaidi katika kuwekeza. Kamati ndicho Chombo kikuu cha kuishauri Bodi katika uwekezaji.

CORPORATE GOVERNANCE UTAWALA BORA



MANAGEMENTThe management, under the guidance of the Board, is charged with the day to day operations of the company. It handles the shareholders affairs and response to the enquiries. It maintains the proper records of the company’s proceedings and coordinate the implementation of the Board’s directives and resolutions on daily basis. The management works as the secretariat to the Board and Investment Committee respectively.

AUDITORSThe Annual General Meeting (AGM) appoints the Auditors to serve the office each year. It is responsibility of the Auditors to report to the shareholders on the Directors’ accountability to safeguard the shareholders’ interest

MENEJIMENTI Menejimenti ina jukumu la kila siku la uendeshaji wa shughuli za Kampuni ikiwa chini ya Bodi. Inshughulikia maswala yote ya Wanahisa na kujibu hoja zao zinapotokea. Inawajibikika kutunza record husika kwa kila jambo lihusulo maswala ya Kampuni. Huratibu utekelezaji wa maamuzi na maagizo ya Bodi kila siku. Menejimenti hufanya kazi kama sekretarieti ya Bodi na Kamati ya Uwekezaji.

WAKAGUZI WA MAHESABUKikao cha Wanahisa huchagua wakaguzi wa Hesabu kila Mwaka. Wakaguzi wa Hesabu huripoti katika kikao cha Wanahisa juu ya uwajibikaji wa Bodi katika kulinda na uedeleza rasilimali za Wanahisa.

CORPORATE GOVERNANCE UTAWALA BORA



of BoArDDIreCtorS



Dr. Gideon H kaunda Mwenyekiti.Gideon H. Kaunda (PhD)Graduated first as a lawyer earning an LLB degree, University of East Africa, Dar-Es-Salaam College. Practiced in Tanzania, Kenya and Uganda as Counsel in the EACSO/EAC, prior to appointment as Tanzania Permanent Representative on ICAO Council in Montreal, Canada. He re-joined Government service after his diplomatic tour of duty. As a UNDP Scholar, Dr. Kaunda obtained a Diploma in Air and Space law, subsequently graduating with a Masters Degree (LLM) and a PhD (DCL), at the Faculty of Graduate Studies and Research, McGill University, Canada.

At different times Dr. Kaunda has served as a Consultant with the World Bank the UNDP, the European Union (EU), AFCAC, Economic Commission for Africa (ECA), COMESA and Lesotho Government on infrastructure projects. Dr. Kaunda supervised the establishment of Alliance Air, a jointly owned airline by Governments of Tanzania, South Africa and Uganda. In 2001 he became an Associate Director, DCDM, a Mauritius based Consulting firm of Business Integrators, Auditors and Accountants.

Before joining the private sector as a TPSF Member, Dr. Kaunda was appointed by a London Panel of Judges Session as an Arbitrator of the International Court of Aviation and Space Arbitration (ICASA. He maintains special interest in the Outer Space regime and scientific studies on celestial bodies, associated with the UN- COPUOS.

Other areas of involvement include the following:• Member, Tanzania Institute of Directors;• Trustee; Nelson Mandela African Institute of Science and Technology.• Founder Director, VIASAT-1 Free to Air Television Network ( TV-1.);• Participant; Government Technical Preparatory Team for the Five Year Development Plan

(FYDP- II) 2016 – 2021.• Member, Court Users` Committee, High Court Commercial Division.• Chairman; Rural Energy Agency (REA).• Board Director and Investment Committee Member; TICL.• Member, Tanganyika Law Society and Advocate of the High Court of Tanzania.• Life Member, McGill Institute of Air and Space Law, Canada.• Co-opted Member, Flight Transportation Laboratory, Centre for Advanced Engineering

Study, School of Aeronautics and Astronautics, Massachusetts Institute of Technology (MIT), Cambridge, Boston USA.

• Rotary International Paul Harris Fellow (2002).• President Rotary Club of Dar-Es-Salaam (2002- 2003).

BOARD OF DIRECTORS BODI YA WAKURUGENZI



Mrs. Joyce n nyanzaMember.Mrs. Joyce Ng’walu Nyanza is an accountant by profession, she had an Advanced Diploma in Accountancy (ADA) acquired from the Institute of Finance Management (IFM) DSM Tanzania from 1989-1992. Mrs. Joyce Ng’walu Nyanza also possesses a MBA acquired from University of Keele, Staffordshire in UK from Sept, 1995 to August, 1996.

She had worked for Tanzania Social Action Fund (TASAF) for 9 years in different capacities as District Accountant January, 2001 - December, 2004 as well as Zonal System Auditor from Janu-ary, 2005-December, 2009. Before joining TASAF Mrs. Nyanza was working as Cash & Liquidity Manager with Swiss Agency for Development Cooperation (SDC) under embassy of Switzerland between May, 1999 and December, 2000. She has also worked as a Board Director in the CRDB Bank Plc for 6 years (2007 – 2013).

She was a Director in the Board of Kilakala Girl’s Secondary School from 2008 – 2012, She is also a Board member in Kitungwa Secondary School from 2014 to date.

Mrs. Joyce n nyanzaMjumbeBi Joyce Ng’walu Nyanza ni mhasibu na taaluma, alikuwa na Diploma ya Juu ya Uhasibu (ADA) aliyopewa kutoka Taasisi ya Usimamizi wa Fedha (IFM) DSM Tanzania mwaka 1989-1992. Bi Joyce Ng’walu Nyanza pia ana MBA aliyopewa kutoka Chuo Kikuu cha Keele, Staffordshire nchini Uingereza kutoka Septemba 1995 hadi Agosti 1996.

Alikuwa amefanya kazi kwa Mfuko wa Hatua za Jamii Tanzania (TASAF) kwa miaka 9 kwa uwezo tofauti kama Mhasibu wa Wilaya Januari 2001 - Desemba 2004 na Mkaguzi wa Mfumo wa Kanda tangu Januari 2005-Desemba 2009. Kabla ya kujiunga na TASAF Bibi Nyanza alikuwa akifanya kazi kama Meneja wa Cash & Liquidity na Shirika la Uswisi la Ushirikiano wa Maendeleo (SDC) chini ya ubalozi wa Uswisi kati ya Mei, 1999 na Desemba 2000. Pia amefanya kazi kama Mkurugenzi wa Bodi katika CRDB Bank Plc kwa 6 miaka (2007 - 2013).

Alikuwa Mkurugenzi wa Bodi ya Shule ya Sekondari ya Kilakala Msichana kutoka 2008 - 2012, pia ni mwanachama wa Bodi katika Shule ya Sekondari ya Kitungwa kuanzia 2014 hadi sasa.

engineer ladislaus M. SalemaMember.Current Chairman of the TMC- Board and consulting civil engineer. He has over 30 years of experience in techno-managerial in public service. He has been in the board of Government Employees Provident Fund (GEPF), a former Manager of National Engineering Company and Divisional Director in Tanzania Social Action Fund, and CEO of MKURABITA.

He is a member Board of trustees of Benjamin William Mkapa foundations.

engineer ladislaus M SalemaMjumbe. Mwenyekiti wa sasa wa TMC- Bodi na ushauri wa wahandisi wa kiraia.Ana uzoefu zaidi ya miaka 30 katika teknolojia ya usimamizi katika huduma ya umma. Amekuwa katika bodi ya Mfuko wa Wafanyakazi wa Serikali (GEPF), Meneja Mkuu wa zamani wa Kampuni ya Taifa ya Uhandisi na Mkurugenzi wa Idara ya Tanzania Action Action Fund, na Mkurugenzi Mtendaji wa MKURABITA. Yeye ni mwanachama wa Bodi ya Wadhamini ya Benjamin William Mkapa Foundations.

BOARD OF DIRECTORS BODI YA WAKURUGENZI



engineer ladislaus M SalemaChairman.Current Chairman of the TMC- Board and consulting civil engineer. He has over 30 years of experience in techno-managerial in public service. He has been in the board of Government Employees Provident Fund (GEPF), a former Manager of National Engineering Company and Divisional Director in Tanzania Social Action Fund, and CEO of MKURABITA.

He is a member Board of trustees of Benjamin William Mkapa foundations.

engineer ladislaus M SalemaMwenyekiti. Mwenyekiti wa sasa wa TMC- Bodi na ushauri wa wahandisi wa kiraia.Ana uzoefu zaidi ya miaka 30 katika teknolojia ya usimamizi katika huduma ya umma. Amekuwa katika bodi ya Mfuko wa Wafanyakazi wa Serikali (GEPF), Meneja Mkuu wa zamani wa Kampuni ya Taifa ya Uhandisi na Mkurugenzi wa Idara ya Tanzania Action Action Fund, na

Mrs. Joyce n nyanzaMember.Mrs. Joyce Ng’walu Nyanza is an accountant by profession, she had an Advanced Diploma in Accountancy (ADA) acquired from the Institute of Finance Management (IFM) DSM Tanzania from 1989-1992. Mrs. Joyce Ng’walu Nyanza also possesses a MBA acquired from University of Keele, Staffordshire in UK from Sept, 1995 to August, 1996.

She had worked for Tanzania Social Action Fund (TASAF) for 9 years in different capacities as District Accountant January, 2001 - December, 2004 as well as Zonal System Auditor from January, 2005-December, 2009.

Mrs. Joyce n nyanzaMjumbeBi Joyce Ng’walu Nyanza ni mhasibu na taaluma, alikuwa na Diploma ya Juu ya Uhasibu (ADA) aliyopewa kutoka Taasisi ya Usimamizi wa Fedha (IFM) DSM Tanzania mwaka 1989-1992. Bi Joyce Ng’walu Nyanza pia ana MBA aliyopewa kutoka Chuo Kikuu cha Keele, Staffordshire nchini Uingereza kutoka Septemba 1995 hadi Agosti 1996.

Alikuwa amefanya kazi kwa Mfuko wa Hatua za Jamii Tanzania (TASAF) kwa miaka 9 kwa uwezo tofauti kama Mhasibu wa Wilaya Januari 2001 - Desemba 2004 na Mkaguzi wa Mfumo wa Kanda tangu Januari 2005-Desemba 2009.

INVESTMENT COMMITTEE KAMATI YA UWEKEZAJI



Benjamin S. MwakagambaCompany SecretaryMr. Benjamin S. Mwakagamba is an Advocate of High Court of Tanzania and a professional member of Tanganyika Law Society, (TLS) and East African Law Society (EALS).

He is currently the Managing Partner and founder of the Law Firm styled as BM Attorneys. He is a legal practitioners and traveled appreciable distance in the litigation field. He deals with among others company formation and investment advice, Legal services to Bank and Financial institution, corporate restructuring.

Environmental Law, intellectual property law, Corporate, Statutory and Business support services, Labour Law, Tax Law, Land law, conveyancing and receivership liquidation. He is appointed retainer by Tanzania Action Aid as Legal counsel handling all legal matter of the organization, and he is also a company Secretary of National Investment Company Limited (NICOL)

Benjamin S. MwakagambaCompany Secretary Bwana Benjamin S. Mwakagamba ni Msemaji wa Mahakama Kuu ya Tanzania na mwanachama wa kitaaluma wa Tanganyika Law Society, (TLS) na Shirikisho la Sheria ya Afrika Mashariki (EALS).

Kwa sasa yeye ni Mshirika (Partner) na mwanzilishi wa kampuni ya kisheria ya BM Attorneys. Mwakagamba amekuwa akitoa ushauri wa kisheria katika sector ya Mabenki na Taasisi za Fedha, sheria za mazingira, uanzishwaji na ulekebishwaji wa makampuni, sheria za kodi na mengine mengi.

Ameteuliwa na Tanzania Action Aid kama shauri wa kisheria kushughulikia mambo yote ya kisheria, na pia kwa sasa ni Katibu wa Kampuni ya (NICOL).

INVESTMENT COMMITTE KAMATI YA UWEZEKAJI



kinoni A. wamunza Chief executive officer Mr. Kinoni A Wamunza has BA (Economics) and MSc (Management) degrees, and a Post Graduate Diploma in Development Studies. He pursued his studies at the University of East Africa at Dar es Salaam, University of Toronto and Arthur D Little Management Institute. Mr. Wamunza has also attended courses in textiles management and privatization and successfully worked in these sectors.

Mr. Wamunza started his career as an Economist in the Ministry of Agriculture and Cooperatives, after four years he moved to National Development Corporation (NDC) as Senior Operations Officer, and, when textiles were hived off from NDC, he was transferred to National Textiles Corporation. Since 1973, when he was appointed a General Manager, Mr. Wamunza has been working in various senior positions in the textiles sub sector until 1994, when he joined the Loans and Advances Realization Trust (LART), a World Bank funded project executing the Financial Sector Reform Program, as the Director of Operations. In this capacity, Mr. Wamunza successfully managed and coordinated the activities to meet the institutional objectives, as per the World Bank Mission Report for the period. LART’s term ended in 2006.

Mr. Wamunza also served on a number of Boards of the textiles companies, in some of which he also served as Chairman. He also served as a Board member of the Board of External Trade, Textiles Manufacturers Association, and the regional NBC Boards for the Lake zone, as well as Mara and Morogoro regions.

In 2012, Mr. Wamunza was appointed as the Interim Manager. From 2016 Mr. Wamuza has been working as the Chief Executive Officer of NICOL on a term contract.

kinoni A wamunza Afisa Mtendaji MkuuMr. Kinoni A Wamunza ana shahada ya BA (Uchumi) na MSc (Usimamizi), na Diploma ya Chuo cha Uzamili katika Mafunzo ya Maendeleo. Alifanya masomo yake katika Chuo Kikuu cha Afrika Mashariki Dar es Salaam, Chuo Kikuu cha Toronto na Taasisi ya Usimamizi wa Arthur D. Mr. Wamunza pia amehudhuria kozi katika usimamizi wa nguo na ubinafsishaji na kufanya kazi kwa ufanisi katika sekta hizi. Mr. Wamunza alianza kazi yake kama Mchumi katika Wizara ya Kilimo na Ushirika, baada ya miaka minne alihamia Shirika la Maendeleo la Taifa (NDC) kama Afisa Mkuu wa Uendeshaji, na, wakati nguo zilipokuwa zikiondolewa kutoka NDC, alihamishiwa kwenye Nguo za Taifa Shirika.

Tangu mwaka wa 1973, alipochaguliwa kuwa Meneja Mkuu, Mr. Wamunza amekuwa akifanya kazi katika nafasi mbalimbali za juu katika sekta za nguo mpaka mwaka 1994, alipojiunga na Loans and Advances Realization Trust (LART), Mradi wa Fedha wa Dunia Utekelezaji wa Fedha Mpango wa Mageuzi ya Sekta, kama Mkurugenzi wa Uendeshaji. Kwa uwezo huu, Mr.Wamunza aliweza kusimamia na kuratibu shughuli hizo ili kufikia malengo ya taasisi, kwa mujibu wa Ripoti ya Ujumbe wa Benki ya Dunia kwa kipindi hicho. Muda wa LART ulikamilika mwaka 2006.

Mr. Wamunza pia aliwahi kuwa mjumbe wa Bodi kadhaa ya makampuni ya nguo, ambayo pia aliwahi kuwa Mwenyekiti. Pia aliwahi kuwa mwanachama wa Bodi ya Bodi ya Biashara za Nje, Chama cha Wafanyabiashara wa Nguo, na Bodi za NBC za kikanda kwa eneo la Ziwa, pamoja na mikoa ya Mara na Morogoro.Mnamo mwaka 2012, Mr. Wamunza alichaguliwa kama Meneja wa Muda wa NICOL. Kwa hivi sasa Mr Wamunza ndiye Afisa Mkuu wa NICOL.

EXECUTIVE MANAGEMENT MENEJIMENTI



Benjamin S. MwakagambaCompany SecretaryMr. Benjamin S. Mwakagamba is an Advocate of High Court of Tanzania and a professional member of Tanganyika Law Society, (TLS) and East African Law Society (EALS).

He is currently the Managing Partner and founder of the Law Firm styled as BM Attorneys. He is a legal practitioners and traveled appreciable distance in the litigation field. He deals with among others company formation and investment advice, Legal services to Bank and Financial institution, corporate restructuring. Environmental Law, intellectual property law, Corporate, Statutory and Business support services, Labour Law, Tax Law, Land law, conveyancing and receivership liquidation. He is appointed retainer by Tanzania Action Aid as Legal counsel handling all legal matter of the organization, and he is also a company Secretary of National Investment Company Limited (NICOL).

Benjamin S. MwakagambaCompany SecretaryBwana. Benjamin S. Mwakagamba ni Msemaji wa Mahakama Kuu ya Tanzania na mwanachama wa kitaaluma wa Tanganyika Law Society, (TLS) na Shirikisho la Sheria ya Afrika Mashariki (EALS).

Kwa sasa yeye ni Mshirika (Partner) na mwanzilishi wa kampuni ya kisheria ya BM Attorneys. Mwakagamba amekuwa akitoa ushauri wa kisheria katika sector ya Mabenki na Taasisi za Fedha, sheria za mazingira, uanzishwaji na ulekebishwaji wa makampuni, sheria za kodi na mengine mengi. Ameteuliwa na Tanzania Action Aid kama shauri wa kisheria kushughulikia mambo yote ya kisheria, na pia kwa sasa ni Katibu wa Kampuni ya (NICOL).

CpA. erasto G. ngamilagaDeputy Chief executive officerCPA Erasto Ngamilaga joined NICOL as the Deputy Chief Executive Officer in year 2017. Prior to 2017, CPA Erasto Ngamilaga was the support consultant in NICOL. He has over 12 years of financial and administration experience. Before joining NICOL he was the Credit Risk Manager, Acting Supply Finance Manager at Serengeti Breweries Ltd and before that he was the Cost Accountant and Project Finance Manager at TanzaniteOne Mining Ltd, he was also the Finance Manager at SAAFI, and He was the Financial Analyst at NMB PLC. Mr. Erasto Ngamilaga holds Advanced Diploma in Accountancy from Tanzania Institute of Accountancy (TIA) and is a Certified Public Accountant (CPA T).

CpA. erasto G ngamilagakaimu- Afisa Mtendaji MkuuErasto Ngamilaga alijiunga na NICOL akiwa ni kaimu Afisa Mtendaji Mkuu mnamo July 2017. Kabla ya kujiunga rasmi na NICOL, Erasto Ngamilaga alikua nI mshauri na msaidizi wa maswala mbalimbali katika NICOL. Kwa zaidi ya miaka 12, Erasto Ngamilaga amepata ujuzi mkubwa katika masuala ya usimamizi wa Fedha. Kabla ya kujiunga na NICOL ameshawai kufanya kazi katika kampuni ya Serengeti Breweries kama Credit Risk Manager na Kaimu Supply Finance Manager, na zaidi ya hapo ameshafanya kazi katika kampuni za Tanzaniteone kama Cost Accountant, Finance Manager na baadae kuwa Finance Manager katika kamouni ya SAAFI iliyopo Sumbawanga. Erasto Ngamilaga amepata cha elimu ya juu ya Uhasibu katika Chuo cha TIA na ni Certified Public Account (CPA T).

EXECUTIVE MANAGEMENT MENEJIMENTI



BoArD oF DIreCtorS

(Nationality) : Dr. Gideon H. Kaunda Tanzanian : Mrs. Joyce N. Nyanza Tanzanian : Eng. Ladslaus M. Salema Tanzanian

reGIStereD oFFICe AnD prInCIpAl plACe oF BuSIneSS : 11 Serengeti Road : Mikocheni B : P.O. Box 7465 : Dar Es Salaam : Tanzania

InDepenDent AuDItor : PKF Associates Tanzania : P. O. Box 7323 : Dar Es Salaam : Tanzania

CoMpAnY SeCretArY

: Mr. Benjamin S Mwakagamba : 11 Serengeti Road, Mikocheni B : P. O. Box 7465 : Dar Es Salaam : Tanzania




INTRODUCTIONThe Directors submit their report and the audited consolidated and company financial statements for the financial year ended 31 December 2016, which disclose its consolidated and company state of affairs.

1. INCORPORATIONNational Investment Company Limited (“NICOL” or “Company”) is a publicly listed company incorporated in the United Republic of Tanzania under the Companies Act 2002 and operates vide certificate of incorporation No 41644 of 27 June 2001. However, trading of the company’s shares in the Dar Es Salaam Stock Exchange was suspended in 2011.

NICOL has an authorized share capital of TZS 200 billion dividend into 1.6 billion shares of TZS 125 each; 37,841,218 shares of TZS 125 each have been issued and fully paid.

2. PRINCIPAL ACTIVITYThe principal activity of the company is to acquire or establish and manage business enterprises in key sectors of the economy such as manufacturing, financial services, telecommunications, agriculture, mining and other sectors.

The principal activity of Tanzania Meat Company Limited is custom slaughtering of cattle, sheep and goats. Tanzania Fisheries Development Company Limited deals with exporting and processing of Nile Perch Fish and its by products but has remain dormant since 2009.

3. SUBSIDIARIESNational Investments Company Limited owns three subsidiaries as detailed in the table below:

Name of company % of share holding StatusTanzania Meat Company Limited (TMC) 51 SubsidiaryInterchem Pharmaceuticals Beverages Limited (IPBL) 51 SubsidiaryTanzania Fisheries and Development Company Limited (TFDC) 100 Subsidiary

Out of the above subsidiaries, only TMC had active operations taking place after year end. In 2008, NICOL acquired 51% shareholding in TMCL. The group disposed off the plant, property and equipment of TFDC during the year and is currently undertaking formal procedures to liquidate the company. TFDC had remained dormant since 2009. Barclays Bank has placed Interchem Pharmaceuticals Beverages Limited (IPBL) under receivership for failure to pay its loan, and thus is no longer in NICOL portfolio.

4. OPERATING PERFORMANCEAs of 31 December 2016, the group realized a net profit of TZS 8,670,166,000 (2015: TZS 15,011,000) and although it had net current liabilities amounting to TZS 5,026,559,000 (2015: TZS 13,377,188,000) it held investments in quoted instruments with a carrying value of TZS 96,896,378,164 as at 31 December 2016. These quoted instruments can be readily liquidated in order to settle short term obligations as and when they fall due, hence the realization of assets and settlement of liabilities will occur in the ordinary course of business.Further, the Directors have taken measures that are expected to result in the resumption of trade in the company’s shares at the Dar Es Salaam Stock Exchange (DSE). The Directors have obtained a letter of no

REPORT OF THE DIRECTORS



objection from the Capital Markets and Securities Authority and a request has been accordingly submitted to the CMSA.

5. SUBSEQUENT EVENTSNational Investments Company limited applied for a resumption of trade of its shares on the Dar Es Salaam Stock Exchange. The DSE advised NICOL to obtain a letter of no objection from the Capital Markets and Securities Authority. The request has been accordingly submitted to the CMSA for consideration.

Tanzania Fisheries Development Company Limited (TFDC) transferred its overdraft and bank loan amounting to TZS 6,297,804,000 with African Banking Corporation Tanzania Ltd to National Investments Company Limited through a deed of settlement dated 30 September 2016. The interest on the loan amount was halted by the ABC bank from April 2010 and hence no interest has been accrued in the current financial statements. The whole amount of the ABC loan and overdraft outstanding was settled by NICOL in 2017.

6. FINANCIAL PERFORMANCE

Group Company2016 2015 2016 2015

TZS.’000 TZS.’000 TZS.’000 TZS.’000

Profit before tax 9,169,875 203,981 2,269,548 1,033,413

Tax charge (499,710) (188,970) (358,938) (185,920)

Profit for the year 8,670,165 15,011 1,910,610 847,493

7. DIVIDENDSThe Directors propose a final year 2016 dividend of TZS 25 per share (2015: Nil) amounting to a total of TZS 946,030,450 (2015: Nil).

8. STATE OF AFFAIRSThe Group and Company’s state of affairs as at 31 December 2016 is set out on page 12 of these consolidated and company financial statements.

9. ADMINISTRATIVE MATTERSThe Group is capable of handling all administrative matters.

10. EMPLOYEE MATTERSManagement/employee relationshipManagement/employees relationship continued to be good during year. The Group’s employment terms are reviewed annually in consultation with the workers trade union representatives to ensure they continue to meet statutory and market conditions.The Group communicates with its employees through regular management and staff meetings and through circulars and an in-house newsletter, which is published quarterly. A training program is drawn up every year to cater for all grades of staff. Training is mainly conducted in-house. However, external institutions are used for specialized and executive training programs.

REPORT OF THE DIRECTORS (CONTINUED(



Retirement benefitsAll eligible employees are members of the National Social Security Fund. The Company and subsidiaries contribute 10% of the employees’ gross salary. The fund is a defined contribution scheme with the Company and subsidiaries having no legal or constructive obligation to pay further top-up contributions.

11. DIRECTORSThe names of Directors who held office during the year and to the date of this report are as follows;

Names Nationality

Dr. Gideon H Kaunda (Chairman) Tanzanian

Mrs. Joyce N Nyanza Tanzanian

Eng.Ladislaus M Salema Tanzanian

Directors interest in shares of the Company in 2016

The following are the names of the Directors who held interest in the issued and paid up share capital of the Company.

Names No of sharesDr. Gideon H Kaunda (Chairman) 8,000

Mrs. Joyce N Nyanza 30,000

12. CORPORATE GOVERNANCENICOL is committed to the highest standards of corporate governance. Its governance structure is flexible enough to adapt to changes in the internal and external environment and the Group strives to regularly review its processes, rules and regulations and structure with a view to ensuring the best performance of the Group and overall management of its business. NICOL adheres to global standards and practices of good corporate governance.

Key aspects of the corporate governance are as follows:

The Board of DirectorsThe Board Chairman and Board of Directors are appointed by the shareholders at the Annual General Meeting for term of four (4) years. The Directors are eligible for re-appointment as long as they do not exceed the age of 70 years. The Board is responsible and accountable to shareholders for ensuring that NICOL complies with all relevant aspects of the law and the highest standards of corporate governance and business ethics.

The Board provides overall strategic direction, reviews performance and takes material policy decisions. Responsibility for implementing strategy and day to day operations is delegated by the Board to the Chief Executive Officer (CEO). The Board meets regularly to review all policy issues pertaining to operations and effectiveness of internal control and general financial matters, throughout the year.




TrainingTo enable the Group to discharge its corporate governance obligations effectively, the Group has a Budget for training programs meant to equip its Directors, Management and employees with the best functional skills required in a modern corporate entity.

13. RISK MANAGEMENTThe Board of Directors is ultimately responsible for any loss suffered by the Company and the subsidiaries. The Group’s risk taking, in an appropriate manner, is an integral part of business. Success relies on optimizing the trade-off between risk and reward. In the course of conducting its business, the Group is exposed to a variety of risks, including credit, market, operational, strategic and reputation risk.

The Group’s risk management approach is that:

• All risks must be identified and managed, and that the returns must be commensurate with the risks taken, relative to the corporation’s risk appetite;

• The effectiveness of risk management processes is ensured through formal governance and comprehensive regular reporting processes in a well-defined control environment; and

• It is the responsibility of each individual, relative to their position, to identify themselves with the declared priority of risk management, to recognise real or anticipated risk and to take appropriate action.

risk management is guided by several principles, the most important being:

• The assignment of appropriate responsibility and accountability for all risks and resulting returns;

• The adoption of a framework for integrated risk management which applies across all business units and all risk types for the protection of the company’s reputation;

• Formal risk governance processes.

14. RELATED PARTY TRANSACTIONSDetails of transactions with related parties are disclosed in note 22 of the financial statements.

15. INDEPENDENT AUDITORPKF Associates Tanzania were appointed as the group auditors on 30 June 2017 and have expressed their willingness to continue in office and are eligible for re-appointment. A resolution to re-appoint PKF Associates Tanzania, as auditor will be put to the Annual General Meeting.

BY ORDER OF THE BOARD

Dr. Gideon H Kaunda Mrs. Joyce N NyanzaChairman Director

September 22, 2017




The Tanzanian Companies Act, 2002 requires the Directors to financial statements for each financial year which give a true and fair view of the state of affairs of the group and of the company as at the end of the financial year and of its profit or loss for that year. It also requires the Directors to ensure that the company keeps proper accounting records that are sufficient to show and explain the transactions of the group and the company; that disclose, with reasonable accuracy, the financial position of the group and the company and that enable them to prepare financial statements of the group and the company and that comply with the International Financial Reporting Standards and the requirements of the Tanzanian Companies Act, 2002.

The Directors are also responsible for safeguarding the assets of the group and the company and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors accept responsibility for the preparation and fair presentation of the financial statements in accordance with the International Financial Reporting Standards and in the manner required by the Tanzanian Companies Act, 2002. They also accept responsibility for:

1. Designing, implementing and maintaining such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error;

2. Selecting and applying appropriate accounting policies;

3. Making accounting estimates and judgements that are reasonable in the circumstances;

The Directors are of the opinion that the financial statements give a true and fair view of the financial position of the group and of the company as at 31 December 2016 and of the group’s financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act, 2002.

In preparing these financial statements the Directors have assessed the group’s ability to continue as a going concern. Nothing has come to the attention of the Directors to indicate that the group and its subsidiaries will not remain a going concern for at least the next twelve months from the date of this statement. The Directors acknowledge that the independent audit of the financial statements does not relieve them of their responsibilities.

So far as each of the Directors is aware, there is no relevant audit information which the auditor is unaware of, and each of the Directors has taken all the steps that ought to have been taken in order to become aware of any relevant audit information and to establish that the auditor is aware of that information.

Approved by the Board of Directors on ________________________and signed on its behalf by:

_____________________________________Dr. Gideon H Kaunda - Chairman

_____________________________________ Mrs. Joyce N Nyanza - Director

September 22, 2017

STATEMENT OF DIRECTORS’ RESPONSIBILITIES



The National Board of Accountants and Auditors (NBAA) according to the powers conferred under the Auditors and Accountants (Registration) Act. No. 33 of 1972, as amended by Act No. 2 of 1995, requires financial statements to be accompanied with a declaration issued by the Head of Finance/Accounting responsible for the preparation of financial statements of the entity concerned.

It is the duty of a Professional Accountant to assist the Board of Directors to discharge the responsibility of preparing financial statements of an entity showing a true and fair view of the entity position and performance in accordance with International Financial Reporting Standards and statutory financial reporting requirements.

Full legal responsibility for stated preparation of financial statements rests with the Board of Directors as under Directors Responsibility statement on an earlier page.

In regard thereof, I ..............................................................................................................................................

being the Head of Finance/Accounting of National Investments Company Limited hereby acknowledge my responsibility of ensuring that the company’s financial statements for the year ended 31 December 2016 have been prepared in compliance with applicable accounting standards and statutory requirements.

I thus confirm that the financial statements give a true and fair view position of National Investments Company Limited Group and Company accountsas on that date and that they have been prepared based from properly

Signed by: ...........................................................................

Position: .............................................................................

NBAA Membership No.: ...................................................

Date: ...............................................

Erasto Gaudance Ngamilaga

Head of Finance

September 22, 2017

GA 1878

DECLARATION OF THE HEAD OF FINANCE/ACCOUNTING OF NATIONAL INVESTMENTS COMPANY LIMITED



OpinionWe have audited the consolidated and company financial statements of National Investments Company Limited, set out on pages 11 to 45 which comprise the consolidated and company statement of financial position as at 31 December 2016, and the consolidated and company statement of profit or loss and other comprehensive income, consolidated and company statement of changes in equity and consolidated and company statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements give a true and fair view of the consolidated and company financial position as at 31 December 2016, and the consolidated and company financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and the Tanzania Companies Act, 2002.

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities section of our report. We are independent of the company in accordance with the International Ethics Standards Board for Accountant Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Tanzania, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit MatterKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matter described below to be a key audit matter to be communicated in our report.

Sale of the property, plant and equipment of Tanzania Fisheries Development Company Limited (TFDC) during the year.

As a consequence of its inability to operate at optimum capacity by the wholly owned subsidiary, Tanzania Fisheries Development Company Limited (TFDC) since 2009, the group disposed off the TFDC plant, property and equipment during the year for TZS 4,372,420,000 and is currently undertaking formal procedures to liquidate TFDC. As part of the disposal procedures, the holding company took over the TFDC African Banking Corporation Tanzania Limited borrowings amounting to TZS 6,297,804,000 (Note 13), other liabilities amounting to TZS 1,110,563,582 and the receivable due from the sale of TZS 4,372,420,000.

We performed audit procedures to confirm the value of the assets and liabilities taken over by NICOL and the settlement of the TFDC bank borrowings and receipt of the sale proceeds in order to determine the group loss of TZS 3,034,003,000 arising therefrom (Note 29).

REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF NATIONAL INVESTMENTS COMPANY LIMITED



Other informationThe Directors are responsible for the other information. The other information comprises the Directors’ report, the schedule of expenditure but does not include the financial statements and our auditor’s report thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Directors for the Financial StatementsThe Directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with IFRSs, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the company or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.

REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF NATIONAL INVESTMENTS COMPANY LIMITED (CONTINUED(



• Conclude on the appropriateness of Director’s use of the going concern basis of accounting and based on the audit evidence obtained, assess whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on other legal requirementsAs required by the Tanzanian Companies Act, 2002 we report to you, based on our audit, that:• we have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit;

• in our opinion proper books of account have been kept by the company and the group, so far as appears from our examination of those books; and

• the group and company’s statement of financial position and statement of comprehensive income are in agreement with the books of account.

The engagement partner responsible for the audit resulting in this independent auditor’s report is :

___________________________ Mustansir Gulamhussein ACPA- PKF Associates Tanzania

Date:..............................................

REF: PKF/A014/A/005/15/mg

September 22, 2017

REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF NATIONAL INVESTMENTS COMPANY LIMITED (CONTINUED(



CONSOLIDATED AND COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Group Company2016 2015 2016 2015

Notes TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Revenue 2 1,912,522 2,020,538 - -Cost of sales (696,453) (844,919) - -Gross profit 1,216,069 1,175,619 - -Other income 3 6,099,309 128,126 1,772,660 -Administrative expenses (2,667,915) (2,961,457) (4,415,813) (993,190)Other operating expenses (466,172) (238,361) (75,883) (73,451)Operating profit/(loss( 5 4,181,291 (1,896,073) (2,719,036) (1,066,641)Investment income 4 5,030,620 3,718,407 5,030,620 3,718,407Finance costs 7 (42,037) (1,618,353) (42,037) (1,618,353)Profit before taxation 9,169,875 203,981 2,269,548 1,033,413Tax charge 8 (499,710) (188,970) (358,938) (185,920)Profit for the year 8,670,165 15,011 1,910,610 847,493Other comprehensive income:Gain on property revaluation 15 3,649,766 - - -Available for sale financial assetsReclassification adjustments relating to available for sale financial assets disposed in the year

23 (1,494,562) - (1,494,562) -

Net change in fair value gain on availablefor sale financial assets during the year 23 6,560,209 (29,512,192) 6,560,209 (29,512,192)

Total comprehensive income/(loss( 17,385,578 (29,497,181) 6,976,257 (28,664,699)Profit attributable toEquity shareholders 8,760,352 417,409 1,910,610 847,493Non-controlling interests (90,187) (402,398) - -

8,670,165 15,011 1,910,610 847,493

Total comprehensive income/(loss( attributable to:Equity shareholders 15,687,380 (29,094,783) 6,976,257 (28,664,699)Non-controlling interests 1,698,198 (402,398) - -

17,385,578 (29,497,181) 6,976,257 (28,664,699)

Dividend: Proposed dividend for the year:Final 9 (946,031) - (946,031) -

Earnings per share for profit attributable to the ordinary equity holders of the company:Basic earnings per share 14 232 11 50 22

Diluted earnings per share 14 232 11 50 22The notes on pages 43 to 80 form an integral part of these financial statements Report of the independent auditor - page 40 to 42.

FINANCIAL STATEMENTS | TAARIFA ZA HESABU



CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

Group Company2016 2015 2016 2015

Notes TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000EQUITYShare capital 10 4,730,153 4,730,153 4,730,153 4,730,153Share premium 11 4,562,836 4,562,836 4,562,836 4,562,836Retained earnings (4,141,556) (11,955,877) (2,921,787) (3,886,366)Proposed dividend 9 946,031 - 946,031 -Available for sale reserves 88,242,722 83,177,075 88,242,722 83,177,075Property revaluation reserve 1,861,381 - - -

Equity attributable to owners of the company 96,201,567 80,514,187 95,559,955 88,583,698Non-controlling interests 658,877 (1,039,322) - -Total equity 96,860,444 79,474,865 95,559,955 88,583,698Non-current liabilitiesOther liability 17 286,834 382,304 - -Deferred tax liability 12 1,564,186 - - -

1,851,019 382,304 - -98,711,463 79,857,169 95,559,955 88,583,698

REPRESENTED BYNon-current assetsProperty, plant and equipment 16 6,841,645 2,664,494 2,798 3,705Investment securities 23 96,896,377 90,416,198 96,896,377 90,416,198Investment in subsidiaries 24 - - - -Deferred tax 12 - 153,665 - 153,665

103,738,022 93,234,357 96,899,175 90,573,568Current assetsTrade and other receivables 18 4,407,743 304,066 4,690,270 368,454Cash and cash equivalents 19 712,295 1,787,439 704,621 1,766,065

5,120,038 2,091,505 5,394,891 2,134,519Current liabilitiesTrade and other payables 20 5,478,690 7,810,310 2,314,662 2,882,114Other liability 17 26,704 26,704 - -Borrowings 13 4,419,449 7,506,304 4,419,449 1,208,500Tax payable 221,754 125,375 - 33,775

10,146,597 15,468,693 6,734,111 4,124,389Net current liabilities (5,026,559) (13,377,188) (1,339,220) (1,989,870)

98,711,463 79,857,169 95,559,955 88,583,698The financial statements on pages 43 to 80 were approved and authorized for issue by the Board of Directors on September 22, 2017 and were signed on its behalf by:

__________________ __________________Dr. Gideon H Kaunda Mrs. Joyce N NyanzaDirector DirectorThe notes on pages 48 to 84 form an integral part of these financial statements




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FINANCIAL STATEMENTS TAARIFA ZA HESABU



CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

Group Company

2016 2015 2016 2015

Notes TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Operating activities

Cash used in operations 21 (2,795,084) (575,120) (3,144,395) (1,277,697)

Tax paid (215,893) (185,920) (205,273) (185,920)

Net cash used in operating activities (3,010,977) (761,040) (3,349,668) (1,463,617)

Investing activities Cash paid for purchase of property, plant andequipment 16 (7,483) (694,629) (3,131) (800) Proceeds from disposal of property, plant andequipment 4,372,420 5,499 - -

Cash paid for purchase of quoted instruments (1,816,147) (1,179,922) (1,816,147) (1,179,922)

Proceeds from disposal of quoted instruments 1,518,198 - 1,518,198 -

Net cash used in investing activities 4,066,988 (1,869,052) (301,080) (1,180,722)

Financing activities

Transfer of loan to holding company from TFDC 6,297,804 6,297,804

Repayments of borrowings (2,500,000) - (2,500,000) -

Net cash used in financing activities 3,797,804 - 3,797,804 -

Decrease in cash and cash equivalents 4,853,815 (2,630,092) 147,056 (2,644,339)

Movement in cash and cash equivalents

At start of year (4,141,520) (1,511,428) 557,565 3,201,904

Decrease in cash and cash equivalents 4,853,815 (2,630,092) 147,056 (2,644,339)

At end of year 19 712,295 (4,141,520) 704,621 557,565

The notes on pages 16 to 45 form an integral part of these financial statementsReport of the independent auditor - page 8 to 10.

FINANCIAL STATEMENTS TAARIFA ZA HESABU



1. SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated.

a( Basis of preparationThe consolidated financial statements are prepared under the historical cost convention except as indicated otherwise below and are in accordance with International Financial Reporting Standards (IFRS).The historical cost convention is generally based on the fair value of the consideration given in exchange of assets. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the entity takes into account the characteristics of the asset or liability if market participants would take those characteristics into consideration when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

a( Going concernThe financial performance of the group is set out in the Director’s report and in the statement of profit or loss and the other comprehensive income. The financial position of the group/company is set out in the statement of financial position. Disclosures in respect of risk and capital management are set out in note 25 and 26.

Based on the financial performance and position of the group and its risk management policies, the Directors are of the opinion that the group is well placed to continue in business for the foreseeable future and as a result the financial statements are prepared on a going concern basis.

These financial statements comply with the requirements of the Tanzanian Companies Act, 2002. The statement of profit or loss and statement of comprehensive income represent the profit and loss account referred to in the Act. The statement of financial position represents the balance sheet referred to in the Act.

i( New standards, amendments and interpretations issued but not effectiveAt the date of authorisation of these financial statements the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective for the year presented:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | UFAFANUZI WA TAARIFA ZA HESABU



- Amendments issued in January 2016 to IAS 7 ‘ Statement of Cash Flows ‘ to improve information provided about an entity’s changes in liabilities from financing activities through disclosure (as applicable) of: (i) changes from financing cash flows; (ii) changes from obtaining cash flows; (iii) the effect of changes in foreign exchange rates; (iv) changes in fair value; and (v) other charges. These amendments are effective for annual periods beginning on or after 1 January 2017.

- Amendments issued in January 2017 to IAS 12 ‘ Income Taxes’ that are effective for annual periods beginning on or after 1 January 2017 clarify that unrealised losses on debt instruments that are carried at fair value give rise to a deductible temporary difference on which deferred tax arises where they are carried as cost for tax purposes.

- Amendments issued in June 2016 to IFRS 2 ‘ Share - based Payment ‘ which are effective for annual periods beginning on or after 1 January 2018 clarify the effects of vesting conditions on cash settled schemes, treatment of net settled schemes and modifications for equity settled schemes.

- IFRS 9 ‘Financial Instruments’(Issued in July 2014) will replace IAS 39 and will be effective for annual periods beginning on or after 1 January 2018.It contains requirements for the classification and measurement of financial assets and financial liabilities, impairment, hedge accounting and de-recognition.

- IFRS 9 requires all recognised financial assets to be subsequently measured at amortised cost or fair value (through profit or loss or through comprehensive income), depending on their classification by reference to the business model within which they are held and their contractual cash flow characteristics.

- In respect of financial liabilities, the most significant effect of IFRS 9 where the fair value option is taken will be in respect of the amount of change in fair value of a financial liability designated as at fair value through profit or loss that is at is attributable to changes in the credit risk of that liability is recognised in other comprehensive income (rather than in profit or loss), unless this creates an accounting mismatch.

- In respect of impairment of financial assets, IFRS 9 introduces an “expected credit loss” model based on the concept of providing for expected losses at inception of a contract.

- In respect of hedge accounting, IFRS 9 introduces a substantial overhaul allowing financial statements to better reflect how risk management activities are undertaken when hedging financial and non-financial risks.

- IFRS 15 ‘Revenue from Contracts with Customers’ (issued in May 2014) effective for annual periods beginning on or after 1 January 2018, replaces IAS 11 ‘Construction Contracts’, IAS 18 ‘Revenue ‘and their interpretations (SIC-31 and IFRIC 13,15 and 18).It establishes a single and comprehensive framework for revenue recognition based on a five-step model to be applied to all contracts with customers, enhanced disclosures, and new or improved guidance.

- IFRS 16 ‘Leases’ (issued in January 2016) effective for annual periods beginning on or after 1 January 2019, replaces IAS 17 ‘Leases’, IFRIC 4 ‘Determining whether an Arrangement Contains a Lease’ and their interpretations (SIC-15 and SIC-27). IFRS 16 establishes principles for the recognition, measurement, presentation and disclosure of leases, with the objective of ensuring that lessees and lessors provide relevant information that faithfully represents those transactions.

- The Directors expect that the future adoption of IFRS 9, IFRS 15 and IFRS 16 may have a material impact on the amounts reported. However, it is not practicable to provide a reliable estimate of the effects of the above until a detailed review has been completed. The Directors do not expect that adoption of the other Standards and Interpretations will have a material impact on the financial statements in future periods. The entity plans to apply the changes above from their effective dates noted above.




b( Key sources of estimation uncertainty

In the application of the accounting policies, the Directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other relevant factors. Such estimates and assumptions are reviewed on an on going basis. Revisions to estimates are recognised prospectively.

The Directors have made the following assumptions that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

- Impairment of trade receivables - the company reviews their portfolio of trade receivables on an annual basis. In determining whether receivables are impaired, the management makes as to whether there is any evidence indicating that there is a measurable decrease in the estimated future cash flows expected.

- Useful lives of property, plant and equipment - Management reviews the useful lives and residual values of the items of property, plant and equipment on a regular basis. During the financial year, the Directors determined no significant changes in the useful lives and residual value.

- Fair value measurement and valuation process - In estimating the fair value of an asset or a liability, the group uses market-observable data to the extent it is available. Where level 1 inputs are not available, the group makes use of financial models or engages third party qualified values to perform the valuation and provide inputs to the model.

c( Significant judgements made by management in applying the company’s accounting policies

Directors have made the following judgements that are considered to have the most significant effect on the amounts recognised in the financial statements:

Revenue recognition - In making their judgement, the Directors considered the detailed criteria for the recognition of revenue from the sale of goods set out in IAS 18 and, in particular, whether the group had transferred to the buyer the significant risks and rewards of ownership of the goods. Following the detailed quantification of the group’s liability in respect of rectification work, and the agreed limitation on the customers ability to require further work or to require the replacement of the goods, the Directors are satisfied that the significant risks and rewards have been transferred and that recognition of an appropriate provision for the rectification costs.

Held to maturity financial assets - The Directors have reviewed the group’s held to maturity financial assets in the light of its capital maintenance and liquidity requirements and have confirmed the group’s positive intention and ability to hold those assets to maturity.

Control of subsidiaries, associates and joint ventures - The Directors asses whether or not the group has control over any entity based on whether or not the group has the practical ability to direct the relevant activities of the entity unilaterally. In making their judgement, the directors considered the groups absolute size of holding in the entity and the relative size of dispersion of the shareholdings owned by the other shareholders.

Others may include: valuation of defined benefit obligations, recognition of deferred tax assets




d( Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of business and is stated net of Value Added Tax (VAT) and discounts. The company recognises revenue when the amount of revenue can be reliably measured, it is probable future economic benefits will flow to the entity and when the specific criteria have been met for each of the company’s activities as described below. The amount of revenue is not considered to be reliably measured until all contingencies relating to the service have been resolved. The company bases its estimates on historical results, taking into consideration the type of customer, type of transaction and specifics of each arrangement.

Sales of services such as slaughtering is recognised when cattle, sheep and goats undergo a slaughtering process. Revenue is recognised net of VAT and discounts. Dividend income from investment is recognised when the shareholder’s right to receive payment has been established. Interest income from financial assets is recognised when its probable that the economic benefit will flow to the group and the amount of income can be measured reliably. Interest income is accrued by reference to time in relation to the principal outstanding and the effective interest rate applicable.

e( Investment in subsidiaries/consolidation

Subsidiaries are all entities (including special purpose entities) over which the group has the power to govern the financial and operating policies. Control is achieved when the company; has power over the trustee; is exposed or has right to variable returns from its involvement with the investee and has the ability to use its power to affect its returns.

The group also assesses the existence of control where it does not have a majority of the voting ‘rights power but is able to govern the financial and operating policies of a subsidiary. Control may arise in certain circumstances where including the size of the group’s voting rights relative to the size and dispersion of holdings of other shareholders give the group the power to govern the financial and operating policies, where potential voting rights are held by the company and rights from other contractual arrangements etc.

When the company has assessed and has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.

The company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of controls listed above. Consolidation of a subsidiary begins when the company obtains control over the subsidiary and ceases when the company loses control of the subsidiary . Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit and loss and other comprehensive income from the date the company gains control until the date the company ceases to control the subsidiary.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss from the effective date of acquisition and up to the effective date of disposal as appropriate.




Total comprehensive income of subsidiaries is attributed to the owners of the company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary adjustments are made to financial statements of subsidiary to bring their accounting policies into line with the groups accounting policy.

• Changes in ownership interests in subsidiaries without change of controlTransactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

• Disposal of subsidiariesWhen the group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

• Business combinationsThe group applies the acquisition method to account for business combinations. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred to/by the group, liabilities incurred by the group to the former owners of the acquire and the equity interests issued by the group in exchange for control of the acquire. Acquisition related costs are generally recognised in profit or loss as incurred.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquire is remeasured to fair value at the acquisition date through profit or loss. Amounts arising from interests in the acquire prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.

Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 ‘Financial Instruments: Recognition and Measurement’ in profit or loss income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.




f ( Investments in associates and joint ventures

Associates are all entities over which the group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies Investments in associates or jointly controlled entities are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. The group’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.The group’s share of post-acquisition profit or loss is recognised in profit or loss, and its share of post acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the company and its associates are eliminated to the extent of the company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the group.

Dilution gains and losses arising in investments in associates are recognised in profit or loss.

When a group entity undertakes its activities under joint venture arrangements directly rather than in a separate entity (a joint operation), the Group’s share of jointly controlled assets and any liabilities incurred jointly with other ventures are recognised in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group’s share of the output of jointly controlled assets, and its share of joint venture expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to/from the Group and their amount can be measured reliably.

All property, plant and equipment is initially recorded at cost and thereafter stated at historical cost less accumulated depreciation. Historical cost comprises expenditure initially incurred to bring the asset to its location and condition ready for its intended use. Freehold and leasehold land, buildings and plant and machinery are subsequently shown ‘at market value, based on periodic valuations less subsequent depreciation.

Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of each reporting period. Any accumulated depreciation




at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset.

Increases in the carrying amount arising on revaluation are credited to other comprehensive ‘income except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously expensed. Decreases that offset previous increases of the same asset are charged to other comprehensive income; all other decreases are charged to profit or loss. Each year the difference between depreciation based on the revalued carrying amount of the asset (the depreciation charged to profit or loss) and depreciation based on the asset’s original cost is transferred from the retained earnings to revaluation reserve.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost can be reliably measured. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Leasehold land is not depreciated.

Depreciation is calculated on a straight line method to write down the cost of each asset to its residual value over its estimated useful life using the following annual rates:

Rate %Building 2.5Plant and machinery 20Motor vehicles 20Furniture, fittings and office equipment 25

The assets residual values and useful lives of assets are reviewed, and adjusted if appropriate, at each reporting period.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.

Gains and losses on disposal of property, plant and equipment are determined by comparing the proceeds with the carrying amount and are taken into account in determining operating profit/loss.

g( Functional currency and translation of foreign currencies

(i( Functional and presentation currencyTransactions in foreign currencies during the year are converted into Tanzanian Shillings (the functional currency), at the rates ruling at the transaction




At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign determined currency are not retranslated.

The resulting differences from conversion and translation are dealt with in profit or loss in the year in which arise.

h( Financial instruments

Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than those at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial as appropriate, upon initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

The company’s financial assets which include tax recoverable, cash in hand and cash at bank and trade and other receivables fall into the following category:

- Loans and receivables: financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are classified as current assets where maturities are within 12 month of the reporting date. All assets with maturities greater than 12 months after the reporting date are classified as noon-current assets. Subsequent to initial recognition, they are carried at amortised cost using the effective interest method. Changes in the carrying amount are recognised in profit or loss.

Purchases and sales of financial assets are recognised on the trade date i.e. the date on which the company commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership.

A financial asset is impaired if its carrying amount is greater than its estimated recoverable amount. Impairment of financial assets is recognised in the profit or loss under administrative expenses when there is objective evidence that the company will not be able to collect all amounts due per the original terms of the contract. Significant financial difficulties of the issuer, probability that the issuer will enter bankruptcy or financial reorganisation, default in payments and a prolonged decline in fair value of the asset are considered indicators that the asset is impaired.




The amount of the impairment loss is calculated at the difference between the assets carrying amount and the present values of expected future cash flows, discounted at the financial instrument’s effective interest rate. Subsequent recoveries of amounts previously impaired are credited to profit or loss in the year in which they occur.

Financial liabilities

The company’s financial liabilities which include current tax, trade and other payables and borrowings fall into the following category:

- Financial liabilities measured at amortised cost: These are initially measured at fair value and subsequently measured at amortised cost, using the effective interest rate method.

Any difference between the proceeds (net of transaction costs) and the redemption value is recognised ‘as interest expense in profit or loss under finance costs, under the effective interest rate method.

Borrowings are initially recognised at fair value, net of transaction costs incurred and are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised as interest expense in profit or loss under finance costs.

Fees associated with the acquisition of borrowing facilities are recognised as transaction costs of the borrowing to the extent that it is probable that some or all of the facilities will be acquired. In this cases the fees are deferred until the drawn down occurs. If it is not probable that some or all of the facilities will be acquired the fees are accounted for as prepayments under trade and other receivables and amortised over the period of the facility.

All financial liabilities are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled or expired.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when there is a legally enforceable right to offset the amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

i( Cash and cash equivalentsFor the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at call with banks, and financial assets with maturities of less than 3 months, net of bank overdrafts and money market lines.

In the statement of financial position, bank overdrafts are included within borrowings in current liabilities.




j( Interest costInterest is recognised on the time proportion basis, taking account of the principal debt outstanding and the effective rate over the period to maturity.

k( Borrowing costsBorrowing cost is recognised as an expense in the year in which it is incurred, except to the extent that it is directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period to prepare for their intended use or sale. Borrowing costs directly attributable to these qualifying assets are capitalised as part of the costs of those assets.

To the extent that funds are borrowed specifically for the purpose of obtaining a qualifying asset, the amount borrowing costs capitalised are the actual borrowing costs incurred on that borrowing during the year less any investment income on the temporary investment of those borrowings. To the extent that funds are borrowed generally and used for the purpose of obtaining a qualifying asset, the amount of borrowing costs capitalised is determined by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate applied is the weighted average of the borrowing cost applicable to costs applicable to the borrowings of the company that are outstanding during the year other than the borrowings made specifically for the purpose of obtaining a qualifying asset.

Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

Capitalisation of borrowing costs ceases when the assets are substantially ready for their intended use or sale.

l( Taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in statement of profit or loss and other comprehensive income, except to the extent that it relates to items recognised in equity, in which case, the tax is also recognised in equity.

Current taxCurrent tax is provided on the results for the year, adjusted in accordance with tax legislation.




Deferred taxDeferred tax is provided using the liability method for all temporary timing differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred tax. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which temporary timing differences can be utilised.

m( Pension obligations

The company contributes to the statutory National Social Security Fund (NSSF). This is a defined contribution scheme registered under the National Social Security Act. The company’s obligations under this scheme are limited to specific contribution regulated from time and currently stated at 10% of the employee’s gross pay. The company’s contributions are charged to the statement of comprehensive income in the year to which they relate.n( Share capital

Ordinary shares are classified as equity. Any premium received over and above the par value of the shares is classified as ‘share premium’ in equity.

o( Provisions

A provision is recognised if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

p( Earning per Share

The Group and Company presents basic and diluted earning per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to shareholders of the Group and company by the weighted average number of ordinary shares outstanding during he period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive.

q( Comparatives

Where necessary, comparative figures have been reclassified to conform with changes in presentation in the current year.




Group Company2. Revenue 2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Cattle slaughter fees 733,751 757,242 - -Goats and sheep slaughter fees 1,174,320 1,261,103 - -Chilling fees 4,451 1,793 - -Transport income - 400 - -

1,912,522 2,020,538 - -3. Other operating income

Rent income 6,000 4,200 - -Loading fees 77,651 118,111 - -Gain on asset disposal - 5,500 - -Other income - 315 - -Gain on sale of TFDC fixed assets 3,602,175 - - -Provisions written back 2,413,483 - 1,772,660 -

6,099,309 128,126 1,772,660 -

4. Investment income

Dividend income 3,650,794 3,718,407 3,650,794 3,718,407Interest income 243,837 - 243,837 -Gain on disposal of security investments 1,135,989 - 1,135,989 -

5,030,620 3,718,407 5,030,620 3,718,4075. Operating profit/(loss(

The following items have been charged inarriving at the operating profit/(loss)Depreciation on property, plant and equipment (Note 16) 274,040 68,112 4,038 1,346

Auditor’s remuneration:- Current 50,414 53,684 20,861 17,835- Prior year 59,501 - 43,372 -Gain on sale of TFDC fixed assets (3,602,175) - - -Gain on disposal of security investments (1,135,989) - - -Staff costs (Note 6) 1,014,728 1,210,782 348,118 559,658

6. Staff costsSalaries and wages 648,889 613,385 235,190 253,686NSSF expenses 41,207 81,618 4,324 3,790Gratuity 56,622 90,000 72,000 90,000Interim manager expenses 72,000 19,045 17,580 19,045Retirement expenses 17,580 56,622 - -Other staff costs 178,430 350,113 19,024 193,137

1,014,728 1,210,782 348,118 559,658




7. Finance costs

Interest expenses on bank overdraft - 283,191 - 283,191Interest expenses on other liabilities - 589,724 - 589,724Interest income on fixed deposit 15,617 - 15,617 -Foreign exchange loss 26,420 745,438 26,420 745,438

42,037 1,618,353 42,037 1,618,353

8. TaxCurrent tax 205,273 188,970 205,273 185,920

Deferred tax charge (Note 12) - - - -

Prior year’s corporate tax under provision 52,450 - - -Prior year’s deferred tax asset overstated 153,665 - 153,665 -Capital gain tax 88,321 - - -

499,710 188,970 358,938 185,920The tax on the company’s profit before tax differs from the theoretical amount that would arise using the basic rate as follows:Profit before tax 9,169,875 203,981 2,269,548 1,033,413Tax calculated at a tax rate of 30% (2015: 30%) 2,750,963 61,194 680,864 310,024Tax effect of:- income not subject to tax (680,864) (310,024) (680,864) (310,024)- expenses not deductible for tax purpose 26,231 175,708 - -Final tax on dividend income 205,273 185,920 205,273 185,920Tax losses for which no deferred tax asset isrecognized (2,096,329) 76,172 - -Prior year’s deferred tax asset overstated 153,665 - 153,665 -Prior year corporate tax underprovision 52,450 - - -Capital gain tax 88,321 - - -Tax Charge 499,710 188,970 358,938 185,920

9. Dividend

The Directors propose a final dividend of TZS 25 per share (2015: Nil) amounting to a total of TZS 946,030,450

(2015: Nil).

In accordance with the Tanzanian Companies Act 2002, these financial statements reflect this dividend payable which is accounted for in the shareholders’ funds as an appropriation of retained profits in the year ended 31 December 2016.




Group Company10. Share capital 2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Authorised1,600,000,000 Ordinary shares of TZS. 125 each 200,000,000 200,000,000 200,000,000 200,000,000

Issued and fully paid

37,841,218 Ordinary shares of TZS. 125 each 4,730,152 4,730,152 4,730,152 4,730,152

11. Share premium 2016 2015 2016 2015Tshs.’000 Tshs.’000 Tshs.’000 Tshs.’000

Share premium 4,921,388 4,921,388 4,921,388 4,921,388Transaction costs- net of tax (358,552) (358,552) (358,552) (358,552)

4,562,836 4,562,836 4,562,836 4,562,836

12. Deferred taxDeferred tax is calculated, in full, on all temporary tax timing differences under the liability method using a tax rate of 30% (2015: 30%). The movement on the deferred tax account is as follows:

2016 2015 2016 2015TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

At start of year - (153,665) (153,665) (153,665)Credit to profit or loss (Note 8) - - 153,665 -Charge to property reserve (Note 15) 1,564,186 - - -At end of year 1,564,186 (153,665) - (153,665)

The Deferred tax (assets) / liabilities, deferred tax charge/(credit) to profit or loss are attributable to the following items:

Group At start of yearTZS ‘000

Charge torevaluation

reserveTZS ‘000

(Credited(/ charged to profitor loss TZS ‘000

At end of yearTZS ‘000

Deferred tax (asset(/liabilitiesProperty, plant and equipment- accelerated capital allowance -Provisions -Property revaluation - 1,564,186 - 1,564,186Net deferred tax liabilities -

No deferred tax asset has been recognized in the accounts due to significant tax losses carried forward in 2016 as the directors were uncertain of the company’s ability to generate sufficient taxable profits against which the losses will be utilised in the foreseeable future.There is no deferred tax arises from the company since the final tax is withheld on dividend income




Group Company13. Borrowings 2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Current liabilitiesBorrowingAfrican Banking Corporation Tanzania Limited - 1,577,345 - -Bank overdraftAfrican Banking Corporation Tanzania Limited 3,797,804 4,720,459 3,797,804 -Exim Bank (Tanzania) Limited 621,645 1,208,500 621,645 1,208,500

4,419,449 5,928,959 4,419,449 1,208,500Total borrowings 4,419,449 7,506,304 4,419,449 1,208,500

African Banking Corporation Tanzania Limited

The ultimate holding company, National Investments Company Limited entered into a deed of settlement agreement on 30 September 2016 with African Banking Corporation Tanzania Limited to settle the outstanding bank overdraft and bank loan amounting to TZS 6,297,804,000 on behalf of TFDC. The interest on the loan amount was halted by the BancABC from April 2010. The whole amount of the loan and overdraft was repaid by NICOL in 2017.

Exim Bank (Tanzania( Limited

National Investments Company Limited had a disputed overdraft facility with Exim Bank (Tanzania) Limited amounting to TZS 300,000,000 at an interest rate of 19% per annum secured on some of the NMB shares. As per audit confirmation received from the Attorneys dated 24 July 2017 there is an on going case at the Court of Appeal of Tanzania. Exim Bank (Tanzania) Limited claims against NICOL amounting to TZS 621,645,003 including interest and general damages.

14. Earnings per share

Basic earnings per shareBasic group earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year.

Group Company2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Profit attributable to equity holders 8,760,352 417,409 1,910,610 847,493Weighted average number of ordinary shares 37,841,218 37,841,218 37,841,218 37,841,218Earnings per share 232 11 50 22




Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

Diluted earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the company by the adjusted weighted average number of ordinary shares in issue during the year.

Group Company2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Profit attributable to equity holders 8,760,352 417,409 1,910,610 847,493Weighted average number of ordinary shares 37,841,218 37,841,218 37,841,218 37,841,218Earnings per share 232 11 50 22

15. Property revaluation reserve Group Company2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Balance at beginning of the year - - - -Increase on revaluation of properties 5,213,951 - - -Deferred tax liability arising on revaluation (1,564,185) - - -Balance at end of the year 3,649,766 - - -

The properties revaluation reserve arose from the revaluation of land and buildings, office furniture, equipment, plant and machinery and motor vehicles of Tanzania Meat Company Limited.

The company’s assets were valued by an independent valuer, Roots General Agency Co Ltd in association with TKA Company Limited in 2016 on an open market value basis.

16. Property, plant and equipment Year ended 31 December 2016

GroupLeasehold

land Buildings Plant andmachinery

Motorvehicles

Furniture andFittings Total

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Cost or valuationAt start of year 795,665 1,946,281 3,709,303 273,921 131,037 6,856,207Additions - - - - 7,483 7,483Disposal (95,665) (875,512) (2,317,544) (8,500) (58,071) (3,355,292)




gain/(loss) on revaluation 4,405,000 102,229 (964,034) (186,500) 41,004 3,397,699

At end of year 5,105,000 1,172,998 427,725 78,921 121,453 6,906,097

ComprisingCost 700,000 1,070,769 3,709,303 273,921 138,520 5,892,513

Valuation 4,405,000 102,229 (964,034) (186,500) 41,004 3,397,699

5,105,000 1,172,998 2,745,269 87,421 179,524 9,290,212

DepreciationAt start of year - 322,271 3,477,351 268,670 123,421 4,191,713Eliminated on revaluation - (148,108) (1,391,760) (233,500) (42,886) (1,816,254)Eliminated on disposal - (200,932) (2,317,544) (8,500) (58,071) (2,585,047)

Charge for the year - 26,769 231,953 - 15,318 274,040

At end of year - - - 26,670 37,782 64,452

Net book value 5,105,000 1,172,998 427,725 52,251 83,671 6,841,645

Year ended 31 December 2015

Cost or valuationAt start of year 795,665 1,470,014 3,494,677 279,421 127,301 6,167,078Additions - 476,267 214,626 - 3,736 694,629

Disposals - - - (5,500) - (5,500)At end of year 795,665 1,946,281 3,709,303 273,921 131,037 6,856,207

DepreciationAt start of year - 273,613 3,468,687 274,170 112,631 4,129,101Eliminated on disposal - - - (5,500) - (5,500)

Charge for the year - 48,658 8,664 10,790 68,112

At end of year - 322,271 3,477,351 268,670 123,421 4,191,713Net book value 795,665 1,624,010 231,952 5,251 7,616 2,664,494

17. Property, plant and equipment Year ended 31 December 2016 CompanyMotor vehicles Furniture and Fittings Total

TZS ‘000 TZS ‘000 TZS ‘000CostAt start of year 26,670 37,450 64,120Additions - 3,131 3,131At end of year 26,670 40,581 67,251DepreciationAt start of year 26,670 33,745 60,415Charge for the year - 4,038 4,038At end of year 26,670 37,783 64,453Net book value - 2,798 2,798





CostAt start of year 26,670 36,650 63,320Additions - 800 800At end of year 26,670 37,450 64,120DepreciationAt start of year 26,670 32,399 59,069Charge for the year - 1,346 1,346At end of year 26,670 33,745 60,415Net book value - 3,705 3,705

18. Other liability 2016 2015 2016 2015TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Current liabilityAlkafil Company Limited 26,704 26,704 - -Non current liabilityAlkafil Company Limited 286,834 382,304 - -

On 13 November 2013 the company entered into a 5 year contract with Alkafil Company Limited where by Alkafil erected a deboning meat processing facility that will be used specifically and exclusively for the benefit of the Alkafil Company Limited. Under the agreement, the company agreed and allowed Alkafil Company Limited to construct the deboning facility at Alkafil Company Limited costs in the company premises. The consideration of this arrangement is that, the company will slaughter animals (cattle, sheep and goats) at a discounted price in return for capital funding of the fixed asset and improvement made. The permanent fixtures are the property of the company. The present value of the discount granted has been capitalised to property, plant and equipment at a rate of 15% and the corresponding liability recognised as other liability. The asset is depreciated over its useful life. The liability unwinds over the term of the contract. Actual discounts given will be applied to settle the liability.

19. Trade and other receivables 2016 2015 2016 2015TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Trade receivables 97,253 154,414 - -

Other receivables 4,374,271 1,445,393 4,355,259 1,080,671Staff loans and advances 24,805 106,631 24,805 -

4,496,329 1,706,438 4,380,064 1,080,671Less: Provision for doubtful debts (88,586) (1,402,372) - (789,805)

4,407,743 304,066 4,380,064 290,866

Receivable from related party (Note 22 (i)) - - 310,206 77,588

Total trade and other receivables 4,407,743 304,066 4,690,270 368,454

The carrying amounts of trade and other receivables approximate to their The company’s credit risk arises primarily from trade receivables.




The carrying amount of the company’s trade and other receivables is denominated in the following currencies:

2016 2015 2016 2015TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Tanzania shilling 61,743 304,066 344,270 368,454US Dollar 4,346,000 - 4,346,000 -

4,407,743 304,066 4,690,270 368,454

The other classes within trade and other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The company does not hold any collateral as security.

Group Company

20. Cash and cash equivalents 2016 2015 2016 2015TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Cash in hand 802 4,277 718 2,593Bank balances 711,493 1,783,162 703,903 1,763,472

712,295 1,787,439 704,621 1,766,065

For the purposes of the statement of cash flows, the year end cash and cash equivalents comprise the following:

Group Company2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Cash at bank and in hand 712,295 1,787,439 704,621 1,766,065

The company’s bank balances are held with a major Tanzanian financial institution.

The carrying amounts of the company’s cash and cash equivalents are denominated in the following currencies:

2016 2015 2016 2015TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Tanzania Shilling 712,295 1,787,439 704,621 1,766,065US Dollar - - - -

712,295 1,787,439 704,621 1,766,065




Group Company

21. Trade and other payables 2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Trade payables - 58,889 - -Other payables 4,816,968 6,120,095 1,944,586 2,347,783Accruals 661,721 1,631,326 370,076 534,331

5,478,690 7,810,310 2,314,662 2,882,114

The carrying amount of trade and other payables approximate to their fair values.

The carrying amounts of the company’s trade and other payables are denominated in the following currencies:

Group Company2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Tanzania Shilling 4,910,778 7,810,310 1,746,750 2,882,114US Dollar 567,912 - 567,912 -

5,478,690 7,810,310 2,314,662 2,882,114

The maturity analysis of the trade and other payables is as follows:

ConsolidatedYear ended 31 December 2016 0 to 1 month 2 to 3 months 4 to 12 months Total

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Other payables - 4,816,968 4,816,968Accruals 595,549 66,172 - 661,721

595,549 4,816,968 5,478,690

ConsolidatedYear ended 31 December 2015

Trade payables - 58,889 58,889

Other payables - 6,120,095 6,120,095Accruals 1,468,193 - 1,631,326Other provision (4,222,761) 244,699 3,978,062 -

(2,754,567) - 10,157,046 7,810,310

Separate 0 to 1 month 2 to 3 months 4 to 12 months TotalTZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000




Other payables- 1,944,586 1,944,586

Accruals 333,069 37,008 - 370,076333,069 1,944,586 2,314,663

SeparateYear ended 31 December 2015

Other payables- 2,347,783 2,347,783

Accruals 480,898 - - 480,898480,898 2,347,783 2,828,681

22. Cash used in operations

Group Company

2016TZS ‘000

2015TZS ‘000

2016TZS ‘000

2015TZS ‘000

Reconciliation of the profit before tax to cash used in operations:Profit before tax 9,169,875 203,981 2,269,548 1,033,413

Adjustments for:

Depreciation on property, plant and equipment (Note 16) 274,040 68,112 4,038 1,346Gain on disposal of property, plant and equipment (Note 3) - (5,500) -Gain on disposal of security investments (Note 4) (1,135,989) - (1,135,989) -Gain on sale of TFDC fixed assets (Note 3) (3,602,175) - - -Creditors written off (864,490) - (368,789) -Changes in working capital:- trade and other receivables (4,103,676) (286,172) (3,345,749) (345,546)- trade and other payables (2,437,198) (964,549) (567,453) (1,966,910)- Other liability (95,470) 409,008 - -

Cash used in operations (2,795,084) (575,120) (3,144,395) (1,277,697)

23. Related party transactions

The group is controlled by National Investments Company Limited (NICOL) incorporated in Tanzania, which owns 51% of Tanzania Meat Company Limited (TMC) and 100% of Tanzania Fisheries Development Company Limited (TFDC).The remaining 49% of the TMC shares are held by National Ranching Company Limited (NARCO).




The following balance arose from transactions with related parties:

Group Company2016 2015 2016 2015

(i( Receivable from related party (Note 18( TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000Tanzania Meat Company Limited - - 310,206 77,588Tanzania Fisheries Development Company Limited - - 7,482,003 4,448,000Provision for impairment - - (7,482,003) (4,448,000)

- - 310,206 77,588

(ii( Investment in subsidiaries

Tanzania Meat Company Limited - - 1,296,856 1,296,856Tanzania Fisheries Development Company Limited - - 330,000 330,000Provision for impairment - - (1,626,856) (1,626,856)

- - - -

(iii( Directors’ remuneration

Director’s fees 36,000 36,000 36,000 36,000

Group Company

24. Investment securities 2016 2015 2016 2015TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

At start of the year 90,416,198 118,748,468 90,416,198 118,748,468Additions 1,816,147 1,179,922 1,816,147 1,179,922Disposals (401,615) - (401,615) -Fair value gain/(loss) for the year 6,560,209 (29,512,192) 6,560,209 (29,512,192)Adjustment relating to shares disposed in the year (1,494,562) - (1,494,562) -At end of the year 96,896,377 90,416,198 96,896,377 90,416,198

These are investments in securities quoted and traded on Dar Es Salaam Stock Exchange (DSE). The market prices of these securities are available to the general public.

% interest 2016 2015held TZS ‘000 TZS ‘000

NMB Shares 6.6 90,886,180 82,623,800Tanzania Breweries Limited 0.12 4,341,720 7,250,964Simba Cement Shares 0.06 64,496 107,628CRDB Shares 0 71,735 116,211Swissport Plc Shares 0.01 18,314 11,981TCC Shares 0.01 88,320 122,496Twiga Cement Shares 0.03 139,782 183,118DSE Shares 6.35 1,285,831 -

0 96,896,378 90,416,198




25. Investment in subsidiaries2016 2015 2016 2015

% % TZS ‘000 TZS ‘000Tanzania Meat Company Limited 51% 51% - 1,296,856Tanzania Fisheries Development Company Limited 100% 100% 3,027,264 330,000Provision for impairment (3,027,264) (1,626,856)

- - - -

In 2008, NICOL acquired 51% shareholding in Tanzania Meat Company Limited, an entity established to take over certain assets of Ministry of Agriculture and Livestock jointly with National Ranching Company.

Tanzania Fisheries Development Company Limited (TFDC(During the year the group sold off TFDC’s property, plant and equipment. Ultimate holding company National Investment Company Limited (NICOL) took over all the liabilities and assets of the subsidiary and paid off the TFDC bank borrowings under a deed of settlement.Tanzania Meat Company Limited (TMC(

TMC incurred a net loss for the year ended 31 December 2016 of TZS 139,889,000 (2015: TZS

821,221,000) and its net current liabilities stood at TZS 3,599,018,000 (2015: TZS 3,629,307,000 ).

TMCL’s ultimate holding company, National Investment Company Limited (NICOL) has confirmed its commitment to continue providing financial support to the company in the form of a quasi -equity loan, without fixed repayment terms and has further confirmed that it will not recall its existing loan of TZS 310,206,000 (2015: TZS 77,588,000) in the foreseeable future. This commitment will remain in place until current assets of the company exceed its current liabilities.




26. Risk management objectives and policies

Financial risk managementThe group’s/company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk ), credit risk and liquidity risk.

The group’s/company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company’s financial performance.

Risk management is carried out by the management.

(a( Market risk

Foreign exchange riskThe group/company is exposed to foreign exchange risk arising primarily with respect to the US Dollar.

The table below summarises the effect of post-tax profit had the Tanzanian Shilling weakened by 10% against the US Dollar, with all other variables held constant. If the Tanzanian Shilling strengthened against the US Dollar, the effect would have been the opposite.

The carrying amount of the group’s/company’s material foreign currency denominated monetary assets and liabilities that will have an impact on profit or loss when the exchange rates changes, at the end of the reporting period are as follows:

Group Company2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000AssetsCash and bank balance - - - -Trade and other receivables 4,346,000 - 4,346,000 -

LiabilitiesBorrowings - - - -Trade and other payables (567,912) - (567,912) -Net exposure 3,778,088 - 3,778,088 -

Pre tax effect on gain 37,780.88 - 37,781 -Tax 11,334 - 11,334 -

Decrease 26,447 - 26,447 -




Price risk

The group is exposed to equity securities price risk arising from investments. The group is also exposed to price risk arising from slaughter fees from cattle, sheep’s and goat.

Interest rate risk

The group has no interest bearing assets and as a result its cash flows are substantially independent of changes in market interest rates.

(b( Credit risk

Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables.

Management assesses the credit quality of the customer, taking into account their financial position, past experience and other factors.

Individual limits are set based on internal or external information in accordance with limits set by the management. The utilisation of credit limits is regularly monitored.

No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties on performance by these counterparties.

None of the financial assets that are fully performing has been renegotiated in the last year.

(c( Liquidity risk

Cash flow forecasting is performed by the finance department of the group by monitoring the group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

Prudent liquidity risk management implies maintaining sufficient cash and bank balances, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the company’s management maintains flexibility in funding by maintaining availability under committed credit lines.

Notes 13 and 20 disclose the maturity analysis of borrowings and trade and other payables respectively.

The table below disclose the undiscounted maturity profile of the groups financial liabilities:




Consolidated 2016On demand Between 3 months - 1 year Between 1 - 5 years More than 5 years Total

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Borrowings 4,419,449 - - - 4,419,449

Trade and other payables - 5,478,690 - - 5,478,690

Other liability - 26,704 286,834 - 313,538

4,419,449 5,505,394 286,834 - 10,211,677

Separate 2016

Borrowings 4,419,449 - - - 4,419,449


Other liability - - - - -

4,419,449 2,314,662 - - 6,734,111

Consolidated 2015

Borrowings 7,506,304 - - - 7,506,304


Other liability - 26,704 382,304 - 409,008

7,506,304 7,837,014 382,304 - 15,725,622

Separate 2015

Borrowings 1,208,500 - - - 1,208,500


Other liability - - - - -

1,208,500 2,882,114 - - 4,090,614

(d( Fair value measurements

The group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The table below shows an analysis of all assets and liabilities for which fair value is measured or disclosed in the financial statements by level of their fair value hierarchy. The fair values are grouped into three levels as mentioned in Note 1 (a) of these financials, based on the degree to which the fair value is observable.

The table below gives information about how the fair values of these financial assets and financial liabilities are determined:




ConsolidatedYear ended 31 December 2016 Level 1 Level 2 Level 3

TZS ‘000 TZS ‘000 TZS ‘000AssetsProperty, plant and equipment - - 6,841,645Investment securities 96,896,377 - -

LiabilitiesProperty revaluation reserve - - 1,861,381Deferred tax liability 1,564,186 -

98,460,563 - 8,703,026

CompanyYear ended 31 December 2016

AssetsProperty, plant and equipment - - -Investment securities 96,896,377 - -

LiabilitiesProperty revaluation reserve - - -Deferred tax liability - - -

96,896,377 - -

ConsolidatedYear ended 31 December 2015 Level 1 Level 2 Level 3

TZS ‘000 TZS ‘000 TZS ‘000AssetsInvestment securities 90,416,198 - -

90,416,198 - -

Separate


Assets

Investment securities 90,416,198 - -90,416,198 - -

- -




27. Capital management

The group’s objectives when managing capital are:

- to provide an adequate return to shareholders by pricing products and services commensurate with the level of risk;

- to comply with the capital requirements set out by the group’s bankers;

- to maintain an optimal capital structure to reduce the cost of capital.

- to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and

- to maintain a strong asset base to support the development of business.

The group sets the amount of capital in proportion to risk. The group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders or adjust the amount of capital expenditure. Consistently with others in the industry, the group monitors capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated as net debt divide by capital. Net debt is calculated as total debt (as shown in the statement of financial position) less cash and cash equivalents. Capital comprises all components of equity (i.e. share capital, retained earnings, revaluation reserve and subordinated loans).

The gearing ratios as at 31 December 2016 and 31 December 2015 were as follows:

Group Company2016 2015 2016 2015

TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Total borrowings 4,419,449 7,506,304 4,419,449 1,208,500

Less: Cash and cash equivalents (Note 19) (712,295) (1,787,439) (704,621) (1,766,065)

Net debt 3,707,154 5,718,865 3,714,828 (557,565)

Total equity 96,860,444 79,474,865 95,559,955 88,583,698

Gearing ratio 0.04 0.07 0.04 (0.01)




28. Segment information

The group has the following three business units which are its reportable segments. These business units offer different products and services, and are managed separately.

The following summary describe the operations of each reportable segment.

- Investment business: Acquiring or establishing and manage business enterprises in key sectors of the economy such as manufacturing industries, financial services, telecommunications, agriculture, mining and service sector. This is done by National Investments Company Limited (NICOL)

- Slaughter business : Custom slaughter of cattle, sheep’s and goats. This is done by Tanzania Meat Company Limited (TMC).

- Fish processing business: Processing of Nile Perch fish into fish fillet for exports. This is done by Tanzania Fisheries Development Company.

No operating segments have been aggregated to form the above reportable operating segments. The chief operating decision maker monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the financial statements. Other than the allocation of costs there no transactions between the two units.

Segment information about the group’s operations is presented below:

Slaughter Fish

Investment processing processing Inter unit

2016 business business business elimination Total

Income and expenses TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Revenue - 1,912,522 - - 1,912,522

Finance income 5,030,620 - - - 5,030,620

Other income 1,772,660 228,773 4,097,876 - 6,099,309

Total revenue 6,803,281 2,141,295 4,097,876 - 13,042,452

Cost of sales - (696,453) - - (696,453)

Administrative expenses (4,415,813) (1,177,351) (108,753) 3,034,000 (2,667,916)

Other operating expenses (75,884) (354,929) (35,360) - (466,173)

Finance expenses (42,037) - - - (42,037)

Total expenses (4,533,734) (2,228,733) (144,113) 3,034,000 (3,872,580)

Profit/(loss) before tax 2,269,547 (87,438( 3,953,763 3,034,000 9,169,873




Slaughter Fish

Investment processing processing Inter unit

2015 business business business elimination Total

Income and expenses TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Revenue - 2,020,538 - - 2,020,538

Finance income 3,718,407 - - - 3,718,407

Other income - 128,126 - - 128,126

Total revenue 3,718,407 2,148,664 - - 5,867,071

Cost of sales - (844,919) - - (844,919)

Administrative expenses (993,190) (1,937,132) (99,456) 122,948 (2,906,830)

Other operating expenses (73,451) (186,309) (33,228) - (292,988)

Finance expenses (1,618,353) - - - (1,618,353)

Total expenses (2,684,994) (2,968,360) (132,684) 122,948 (5,663,090)

Profit/(loss) before tax 1,033,413 (819,696( (132,684( 122,948 203,981

Slaughter FishInvestment processing processing Inter unit

2016 business business business elimination TotalAssets and liabilities TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Total assets 102,294,066 6,874,199 - (310,206) 108,858,059

Total liabilities 6,734,111 5,485,389 7,570,324 (7,792,208) 11,997,616

Slaughter Fish

Investment processing processing Inter unit2015 business business business elimination TotalAssets and liabilities TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000 TZS ‘000

Total assets 92,708,087 1,925,030 770,333 (77,588) 95,325,862

total liabilities 4,124,389 4,046,097 12,206,099 (4,525,588) 15,850,997

29. Contingent liabilities

The group and company is a defendant in various legal actions. The existence of claims and litigation pending as per confirmations received by the group advocates have been provided for in these financial statements.

- Civil Appeal No 81 of 2015, Exim Bank (Tanzania( Limited Vs. National Investments Company Limited: Exim Bank (Tanzania) Limited claim payments of TZS 621,645,003 which includes interest and general damages

- CMA/DSM/ILALA/431/11, National Investments Company Limited Vs. Kathleen Armstrong; Deed of settlement signed on 24th June 2011, Kathleen Armstrong was rewarded a sum of USD 261,387. The application was lodged by NICOL seeking for an extension of time. The application is pending at the High Court of




Tanzania Labour Division.

In the opinion of the Directors and after taking appropriate legal advice, the outcome of other actions will not give rise to any significant loss, apart from the above mentioned claims and litigation which are provided for in the fi

National Investment Company Limited versus Kathleen Armstrong: The case has been lodged at High Court of Tanzania Dar es Salaam District registry. In this case Plaintiff (NICOL), seek for an orders for the defendant to pay them Tsh 424,454,678.8 being special damages suffered by the plaintiff (NICOL). Also restraining the Defendant by from from engaging, or interfering in anyway with the business affairs of the plaintiff. Claiming for the interest and general damages which will be assessed by the court plus costs of the suit. The chances of winning in this case therefore are wider.

National Investment Co. Ltd Vs. Colman Ngalo-Advocate: This complaint is also pending before Advocate committee to with the respondent without any instruction from the complainant lodged Civil Appeal No. 24 of 2016 on behalf of complainant without approval and or authority of the complainant. Further the respondent without instruction, approval and or consent of the complainant represented NICOL is Misc. Civil Application No. 297 of 2014 arising from Civil case No.91 of 2014.The complainant formally requested the respondent to withdraw from his services and representation of NICOL in court cases but they did not bother to respond. The Respondent under the law deserves punishment including permanent deregistration from the roll of Advocate for his commission. The matter is waiting for summons to be issued.

National investment Co. Ltd Vs. Mwezi Mhango Advocate: This complaint is also pending in the Advocate Committee to wit the respondent without any written instruction or mandate to represent the applicants in any of the complainant’s case demanded and was personally paid by National Microfinance Bank (NMB), Tsh 6,194,000 on 25th October 2013 being 50% of the costs awarded by the court to the complainant in the commercial (Interpleader) Case No. 85 of 2012. Further the respondent was requested to immediate demand the stated sum and from of NICOL in court cases but the respondent refused to do so.

National Investment Co. Ltd Vs. Herbert H.H Nyange Advocate: This is a complaint which is also pending in the Advocate Committee, despite the pendency of the Complainant No. 12 of 2012 as per paragraph (i) herein, the respondent continue to act on behalf of the complainant without any instruction. In order occasioned the respondent committed himself and was duly paid a sum of Tsh 6,194,000 being refund payable to the clients as awarded cost. The matter is scheduled hearing on notice.

National Investment Company Limited Vs. Herbert Nyange Advocate: This complaints is pending at the Advocate committee in which the complainant (NICOL) made an application that the respondent be required to answer the allegations as why his name should not be removed from the roll of Advocate for handling NICOL cases without any instruction. The matter is pending before Hon. Dr. Feleshi J.

National Investment Company Limited Vs. PSPF, CMSA, Kinoni Adam Wamunza and others: As per paragraph 7 herein above, this Appeal emanated from the decision of Hon. Mansoon J, in Misc. Commercial Application No. 288, of 2014 dated 18th March 2016, which inter alia one Mr. Felix Gamaliel Mosha is no longer the chairman of




the board of NICOL since 14 the April 2012. They have raised preliminary objection to the effect that, the Appeal is Res-subjudice to the pending Revision No. 151 of 2016, because both the Appeal and the Revision emanated from the order of same Judge. They are therefore awaiting for court summons. The chances of winning in the Appeal is minimum because the shareholders of NICOL disbanded the former Board of Directors of NICOL, and it is now settled principal that the court cannot interfere with internal Affairs of the company.

SCHEDULE OF EXPENDITURE

Group Company2016 2015 2016 2015

1. DIRECT COSTS TZS.’000 TZS.’000 TZS.’000 TZS.’000

Production tools 31,530 25,417 - -

Repairs and maintenance 19,386 61,015 - -Fuel and lubricants 12,175 126,683 - -Uniform and protective equipment 36,674 50,432 - -Electricity and water 132,634 127,863 - -Cleaning expenses 32,399 - - -Municipal levy 28,700 53,771 - -Salaries and wages 276,192 285,259 - -Other staff costs 90,030 114,479 - -Other direct costs 36,733 - - -

696,453 844,919 - -

2. ADMINISTRATIVE EXPENSES

Employment:

Salaries and wages 648,889 613,385 235,190 253,686NSSF expenses 41,207 81,618 4,324 3,790Gratuity 56,622 90,000 72,000 90,000Interim manager expenses 72,000 19,045 17,580 19,045Retirement expenses 17,580 56,622 - -Other staff costs 178,430 350,113 19,024 193,137

Total employment costs 1,014,728 1,210,782 348,118 559,658

Other administrative expenses:

Travelling expenses 95,515 62,820 41,118 5,538Hiring charges 76,617 50,065 - -Motor vehicles running expenses 108,746 - - -Printing and stationery 32,289 30,528 6,820 3,320Legal and professional fees 840,221 257,749 721,916 170,086Postage and telephone 20,956 17,433 7,096 2,061Directors expenses 68,104 64,785 52,604 9,125Directors fees 36,000 36,000 36,000 36,000




Brokerage commissions 19,406 - 19,406 -Office expenses 18,567 6,299 3,356 6,299Bank charges 10,244 7,542 2,942 7,542Audit fees:- Current 50,414 53,684 20,861 17,835- Prior year 59,501 - 43,372 -Fines and penalties 85,272 - - -Advertisement expenses 55,783 - 51,370 -Other expenses 75,551 1,163,770 26,835 52,778Impairment of receivable from TFDC - - 3,034,000 122,948

Total other administrative expenses 1,653,187 1,750,675 4,067,695 433,532

Total administrative expenses 2,667,915 2,961,457 4,415,813 993,1903 OTHER OPERATING EXPENSES

Office rent 82,027 54,627 52,517 54,627Security expenses 65,761 43,638 6,700 4,800Electricity and water 5,686 4,180 5,686 4,180License and subscriptions 6,703 118,933 5,000 5,000Repairs and maintenance 31,956 3,498 1,943 3,498Depreciation of property, plant and equipment 274,040 68,112 4,038 1,346Total other operating expenses 466,173 238,361 75,884 73,451




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NICOL aNNUaL rEPOrT - nicoltz.comnicoltz.com/Admin/News/files/documents/34-annual report_ final_low... · from the Capital Markets and Securities Authority ... On 15th July 2008,