MedTech : June 3, 20222021 FY Results & Audit Report

(Incorporated in Zimbabwe on 10 February 1997, Registration number 897/97)

SHORT FORM ANNOUNCEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

Short-Form Financial Announcement

Issued in terms of Practice Note 13 of the Zimbabwe Stock Exchange

This short-form announcement is the responsibility of the Directors and is only a summary of the information contained in the full announcement and does not contain full or complete details. Any investment decisions by investors and/or shareholders should be based on consideration of the full announcement.

A copy of the full announcement has been shared with shareholders using the latest email addresses supplied by the shareholder and is available upon request, and for inspection at no charge, at the Company's

registered office or via email request to [e-mail]. The full announcement is also available on the Zimbabwe Stock Exchange website (data portal): www.zse.co.zw and the Company website www.medtechholdings.co.zw.

		Inflation adjusted		Historical
	2021	2020	%	2021	2020	%
	$'000	$'000	Change	$'000	$'000	Change
Turnover	953 382	567 161	68%	777 195	255 866	204%
Operating (loss)/profit	(181)	46 569	(100%)	100 923	97 660	3%
Net asset value	452 888	199 860	127%	452 888	(3 846)	(11 876%)
Earnings per share (cents)
Basic - Class A	1 340	452	196%	2 823	7	41 164%
Basic - Class B	1 851	-	-	1 851	-	-
Headline - Class A	193	452	(57%)	522	7	7 524%
Headline - Class B	-	-	-	-	-	-

Dividend

The Directors resolved not to declare a final dividend.

Auditors Statement

This short-formfinancial announcement should be read in conjunction with the complete set of the Group's consolidated financial statements for the year ended 31 December 2021. The Group's consolidated financial

statements have been independently audited by AMG Global Chartered Accountants (Zimbabwe) who have issued a disclaimer. The basis of disclaimer was mainly due to the Group's inability to comply with International Accounting Standard 21 ("IAS 21") (The effects of changes in foreign exchange rates). The auditor's report is available for inspection at the Company's registered office and on the Company's website

www.medtechholdings.co.zw.

M. Patel

Company Secretary 31 May 2022

Directors: Dr C. Beddies (Chairman), P. Masamba, O. Lutz, W. Marere V. Lapham (Chief Executive)

(Incorporated in Zimbabwe on 10 February 1997, Registration number 897/97)

ABRIDGED AUDITED FINANCIAL RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2021

BOARD REPORT

Introduction

It is our pleasure to present the abridged audited financial results for MedTech Holdings Limited for the year ended 31 December 2021. These results largely reflect the performance of MedTech prior to the conversion into a private equity investment holding company, apart from fair value adjustments. We look forward to announcing private equity transactions, currently being pursued, in due course.

Operating environment

The year-on-year official inflation rate closed at 349% in December 2020 before receding to the 50% range from July 2021 and ending the 2021 year at 61%. The official auction exchange rate to the US Dollar was 81.8 on 31 December 2020 and devalued to 108.7 at the end of 2021, a devaluation of 32.9%. Typically, one would expect inflation and devaluation to be similar. The discrepancy may reflect the extent to which the exchange rate was managed during the year. The management of exchange rates has seen a widening gap between the official rate and the parallel market rate, resulting in increased demand for currency from the auction. This disparity has effectively been a tax on exporters and remitters of US Dollars to other local companies

through the 40% and 20% surrender requirement, whilst also effectively being a subsidy to importers. The result has been a disincentive to the country's exporters and local manufacturers - contrary to what we would

ordinarily expect to see.

The operating environment remained difficult and unpredictable during the year, and this has worsened since the year end.

Update of changes from MedTech to BridgeFort

We have been advised that the various changes required at the Registrar of Companies and Other Business Entities resulting from the EGM held on 15 November 2021 are expected imminently. Shareholders will be advised as soon as the final documents have been received and the ZSE has approved the announcement to shareholders and the renaming of the shares.

Financial highlights

CLASS A PORTFOLIO - CONSUMER GOODS

The Class A portfolio primarily includes 50.1% of Zvemvura Trading (Private) Limited, trading as MedTech Distribution, and Chicago Cosmetics (Private) Limited, a 51% subsidiary of MedTech Distribution. These

businesses primarily sell goods to retailers and wholesalers. Credit demanded by supermarkets is generally 30 days from statement for slower moving products, which is onerous in Zimbabwe's unpredictable and

inflationary environment. Typically, these businesses aim to hedge the debtors book and unlock the working capital tied up in debtors through bank borrowings. Inflation continually erodes the real value of the facilities in place necessitating regular facility increases with the associated costs being incurred.

The businesses managed well on hedging mechanisms and this, along with a reduction in the real selling price of goods, less stockouts and a reduction in competition from grey imports and smuggled goods drove an increase in the volume of sales by 110% (198% in distribution and 20% in manufacturing).

Worsening delays in the payment of successful auction bids have hampered operations and resulted in increased working capital demands. At the year-end successful auction bids to the value of USD465,000 were unpaid.

The validated legacy debts amount to ZAR 23.4 million, with ZAR 5.9 million of this having been settled leaving a validated balance payable of ZAR 17.5 million (which has been provided for in the accounts at the auction rate). This legacy debt continues to hamper relationships with suppliers and timeous supply of goods.

Class A Portfolio - Consumer Goods		Inflation adjusted		Historical
Financial Highlights	2021	2020	%	2021	2020		%
	$'000	$'000	Change	$'000	$'000	Change
Turnover	953 382	567 161	68%	777 195	255 866		204%
Profit before tax	221 970	107 183	107%	205 016	(5 516)	(3 817%)
Comprehensive profit after tax attributable
to Class A shareholders	160 769	54 281	196%	338 813	821	44	164%
Basic earnings per share (cents)	1 340	452	196%	2 823	7	41	164%
Headline earnings per share (cents)	193	452	(57%)	522	7	7	524%

CLASS B PORTFOLIO

Whilst a transaction is pursued, the Class B portfolio continues to only reflect a receivable of USD100,200 relating to 50.1% of the land owned by MedTech Distribution and based on the USD200,000 valuation of this land.

Class B Portfolio		Inflation adjusted		Historical
Financial Highlights	2021	2020	%	2021	2020	%
	$'000	$'000	Change	$'000	$'000	Change

Turnover	-
Profit before tax	-
Comprehensive profit after tax attributable
to Class A shareholders	24 847
Basic earnings per share (cents)	1 851
Headline earnings per share (cents)	-

-	-	-	-	-
-	-	-	-	-
-	-	24 847	-	-
-	-	1 851	-	-
-	-	-	-	-

Dividend

The Directors resolved not to declare a final dividend.

Directorate

After the EGM held on 15 November 2021, Rose Mazula, Tarik Sheikh, Farouq Sheikh and Afzal Motiwala stepped down from the board to pave the way for new directors to lead the change to a private equity investment holding company. This change ushered in a new board where Dr Christian Beddies, Pride Masamba, William Marere and Oliver Lutz were appointed as directors at the EGM.

Outlook

The operating environment has deteriorated and become more unpredictable since the year-end with doing business becoming more difficult. Considerable management time is spent in reacting to and dealing with various issues which businesses in most of the rest of the world do not have to invest precious time in. The competitiveness of the informal sector is largely unhindered by policy pronouncements resulting in the informal players becoming an increasing threat to the formal economy. Unfortunately, we envisage this trend continuing, resulting in a smaller tax net and increasing pressure on formal businesses.

Inflation has accelerated rapidly during the year, most recently reported at 132% in May, and will probably continue to do so with a lack of positive policy pronouncements having been witnessed thus far. Should the various recommendations by organisations such as the Zimbabwe National Chamber of Commerce or the Confederation of Zimbabwean Industries be implemented then we anticipate positive developments thereafter.

We will continue to focus on looking for good opportunities, concluding private equity transactions and assisting underlying portfolio companies in achieving their goals.

Appreciation

We wish to extend our appreciation to all stakeholders for their continued support.

AUDITORS STATEMENT

The Group's external auditors, AMG Global Chartered Accountants (Zimbabwe), have audited the Group's financial statements for the year ended 31December 2021 on which this publication is based and have issued a disclaimer thereon. The basis of the disclaimer was mainly due to the Group's inability to comply with

International Accounting Standard 21 ("IAS 21") "The Effects Of Changes In Foreign Exchange Rates". The

financial statements were audited by Clyton Kazembe, CA(Z), a member of the Institute of Chartered

Accountants Zimbabwe ("ICAZ"), Public Practice Certificate Number 0372 and a registered Public Auditor with the Public Accountants and Auditors Board, Public Auditor Registration Number 0226.

The auditor's report is available for inspection at the Company's registered office.

On behalf of the Board

M. Patel

Company Secretary 31 May 2022

Directors: Dr C. Beddies (Chairman), P. Masamba, O. Lutz, W. Marere, V. Lapham (Chief Executive)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME

For the year ended 31 December 2021

		Inflation adjusted		Historical
		2021	2020	2021	2020
		$'000	$'000	$'000	$'000
Turnover		953 382	567 161	777 195	255 866
Cost of sales		(696 435)	(382 607)	(476 280)	(106 500)
		__________	__________	__________	_________
Gross profit		256 947	184 554	300 915	149 366
Operating profit		(181)	46 569	100 923	97 660
Net financing income/(costs)		131 852	(258 662)	104 093	(103 176)
Monetary gain		90 299	319 276	-	-
		__________	__________	__________	_________
Profit/(loss) before taxation		221 970	107 183	205 016	(5 516)
Taxation		(120 374)	4 274	(53 120)	1 300
		__________	__________	__________	_________
Profit/(loss) for the year after taxation		101 596	111 457	151 896	(4 216)
		__________	__________	__________	_________
Other comprehensive income
Revaluation gain		5 707	1 547	15 642	19 731
Fair value gain		185 912	-	324 372	-
Taxation		(32 188)	(382)	(27 178)	(4 878)
		__________	__________	__________	_________
		159 431	1 165	312 837	14 853
		__________	__________	__________	_________
		__________	__________	__________	_________
Total comprehensive profit/(loss) for the year	261 027	112 622	464 733	10 637
		__________	__________	__________	_________
Attributable to:
Owners of the parent		185 616	54 281	363 660	821
Non-controlling interests		75 411	58 341	101 073	9 816
		_________	__________	__________	_________
Total		261 027	112 622	464 733	10 637
		_________	__________	__________	_________
Basic earnings per share	9.1	Cents	Cents	Cents	Cents
Ordinary shareholders		-	-	-	-
Class A shareholders		1 340	452	2 823	7
Class B shareholders		1 851	-	1 851	-
Headline earnings per share	9.2
Ordinary shareholders		-	-	-	-
Class A shareholders		193	452	522	7
Class B shareholders		-	-	-	-