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| Business |
| Press Trust fails to meet obligation |
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by
Ephraim Munthali, 06 January 2005
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11:45:22
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Press Trust’s profits for the year ended March 2004 are soaring but the organisation is unable to meet its requirement of donating not less than 50 percent of its income in any financial year.
According to an audit report by public accountants Deloitte published this week, the Trust is also failing to donate every five years, a minimum of 66 percent of its income.
These two requirements are documented in clauses 3(b) and 3(c) of the Deed of Variation annexed to the Press Trust Reconstruction Act, according to Deloitte.
“The Act of Parliament under which the Trust operates requires certain minimum levels of income to be distributed. These minimum levels have not been met in the current and prior periods,” said the audit report.
Press Trust’s income for the year ended 31 March 2004 amounted to K181.6 million while that for the five year period to 31 March 2004 was K921.6 million.
This means that the minimum distributions should have been K90.8 million for last year ending March and K608.3 million for the five year period.
But the Trust distributed K23.1 million last year and K347.4 million for the five year period—disbursements the auditors said were well below the amounts demanded by the Act.
In an interview yesterday, Press Trust executive secretary Clement Chilingulo explained that the requirements were not met because the quality of the projects received did not meet the criteria laid out in the Act.
Chilingulo said projects needed to benefit the community, be viable, self sustaining and must focus on priority areas of education, health, social welfare, scientific research, disaster relief, sports and culture.
“So you see, we cannot just distribute the money to meet the requirements but we must donate in line with the policies that guide the Trust,” said Chilingulo.
He added that the organisation’s decision to consolidate the trust’s accounts and those of its subsidiary Press Trust Overseas Limited raised the group’s income on the back of low donations, hence the failure to meet the target.
The trust’s major investment is Press Corporation Limited in which it controls 49 percent after offering 44 percent of the company’s shares to the public through the Malawi and London stock markets.
It owns Press Agriculture, has shares in Illovo (Malawi), Stanbic Bank, Blantyre Hotels, Old Mutual, Kang’ombe Investment Limited and Continental Discount House.
The Trust has investments in Mwaiwathu Hospital and joined Malawi Development Corporation to build the stalling Namiwawa Hotel in Blantyre.
A couple of years ago, the trust wrote down to nil its investments in Press Agriculture, Namiwawa Hotel and Mwaiwathu Hospital due to their poor historic performances and uncertainty over future prospects.
“In the event that the investments become profitable and the loans recoverable, their values will be reassessed in accordance with the Trust’s accounting policies,” said Deloitte in its report.
Yesterday, Chilingulo said Mwaiwathu and Press Agriculture are now shaping up and may start bring returns soon while Namiwawa Hotel remains a black hole in the trust’s portfolio.
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