Finance Division Annual Report

Directors Report and Financial Statements for the year ended 31st October 2009 were completed and approved by the Directors. They were then printed and distributed to members and were considered and adopted at a well attended AGM held on Saturday 26th June 2010.Meanwhile Financial Statements for the first half of the year are now out and as has been mentioned in the Message from the Managing Director we have not attained our budget.
Our total income for the period compared to budget and to last years performance is summarised as follows: 
 
 
UNIT ACTUAL BUDGETED VARIANCE   ACTUAL (2009)
  SHS SHS SHS % SHS
Trading 3,169,064,881 5,217,748,933 -2,048,684,052 (39) 2,012,622,776
Property 541,306,308 489,429,851 51,876,457 11 413,852,187
Other Income 61,023,878 2,200,000 58,823,878 2674 68,232,946
Total 3,771,395,067 5,709,378,784 (1,937,983,717) (34) 2,494,707,909

The overall expenses of Tshs 921 million were within the budgeted amount of Tshs 1 billion which translates to a favourable variance of 11%

The Trading Divisions overall performance was a net contribution of Tshs 221 million and short of the budgeted amount by 9%.

The Property Division recorded a surplus of Tshs 377million which was 45% above budget mainly due to the effects of gains in exchange rates and the near full letting of TFA-ASC.

The revised budget which has been circulated to all units has the following main features:-

  • Sales have been revised downwards by 41% to Tshs 6 billion mainly due to the fact that the anticipated level of sales particularly fertilizers and seeds shall not be achieved. Iringa and Njombe branches have had the most reduction with 69% and 80% reduction from original budget respectively.

  • The trading margins have been revised from 13% to 16% on the assumption that fertilizers sales which have lower margins shall not dominate the sales mix in the remaining half of the financial year. As a result of the  anticipated lower sales, the trading net profit is expected to drop from the original budget of Tshs 734m to  Tshs 271m.

  • Property Division rental revenue and the net profit are expected to increase marginally from Tshs 982m to Tshs 1bn/= and Tshs 530m to Tshs 677m respectively.

  • Total overheads are projected to decrease by 6% to Tshs 1.9 b on account of reduced sales activity and cost  controls.

  • Resulting from the downward revised projected sales and overhead cost reductions, the net profit is  expected to drop from Tshs 198m/= in the original budget to Tshs 11m/=

The ICT Department is being prepared for the Wide Area Network (WAN) branch connections through training.

The sale of none core landed properties has now been concluded with the sale of the Oldeani Depot and Mbozi Plot.

Meanwhile efforts to raise working capital and development finance are continuing and we are discussing these with several financial houses.