Documente Academic
Documente Profesional
Documente Cultură
1
Financial Highlights
68.7% 80.9%
Profit after tax ZMK Millions Profit after tax US$ Millions
59.0% 70.5%
ZAMBEEF,
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Financial Highlights
32.2% 41.7%
Dividends Dividends
ZMK Millions US$ Millions
43.2% 53.5%
flying higher!
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Financial Highlights
Segmental Analysis of Operating Profits 2008
1.08%
LEATHER & SHOE
1.05%
MASTER MEATS NIGERIA
1.74% 0.39%
EGGS MASTER MEATS GHANA
1.18% 0.24%
BAKERY OTHER
1.08%
ZAMCHICK INN
11.67%
EDIBLE OILS 32.27%
BEEF
10.04%
0.41% MILK
FISH
1.67%
EGGS 5.92%
CHICKEN
2.31%
22.61%
STOCK FEED
CROPS
6.35%
PORK
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Financial Highlights
5
Chairman’s Report
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Chairman’s Report
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Who We Are
Group Structure
SUBSIDIARIES
OPERATING DIVISIONS
WITHIN
ZAMBEEF PRODUCTS PLC
BEEF
CHICKEN
EGG
MILK
CROPPING
RANCHING
AFRICA INTERNATIONAL
• Angola • China
• Botswana • England
• Malawi • India
• Ghana • Italy
• Nigeria
• Namibia ZAMBIA
BUTCHERIES (91)
• Tanzania ABATTOIRS (8)
FARMS (5)
• South Africa ZAMCHICK INNS (7)
PROCESSING PLANTS (3)
• Zimbabwe
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Who We Are
Geographical Representation
D.R.C
TANZANIA
LAKE TANGANYIKA
LAKE MWERU
KASAMA
Northern
ZAMPALM
MANSA
LAKE BANGWEULU
Luapula
LUANGWA
ANGOLA SOLWEZI CHILILABOMBWE
MUFULIRA
North Western CHINGOLA CHAMBESHI
KITWE
KALULUSHI
NDOLA
LUANSHYA Eastern
CHIPATA
KAPIRI MPOSHI
KABWE PETAUKE
Central CHISAMBA
MONGU MUMBWA LUSAKA
Western
MAZABUKA
SENANGA NAMWALA
CHIRUNDU ZAMBEZI
SINAZONGWE
CHOMA
LAKE KARIBA
ZAMBEZI Southern
LIVINGSTONE
ZIMBABWE
BOTSWANA
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MOZAMBIQUE
Who We Are
Fact Sheet
• Largest feedlotter of quality beef in Zambia feedlotting 12 000 grain-fed cattle per
annum
• 8 abattoirs strategically located around Zambia
• State of the art dairy milking 850 cows per day and producing an average of 20
PROCESSING
MILK & MILK
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Who We Are
Fact Sheet
ZAMANITA
• Crushes 36 000 tons of oil seed in crushing plant
• Produces 20 000 tons of animal feed cake per annum
• Margarine production commenced in February 2008
• Bio fuels plant commissioned during 2008
• Plastics plant to produce full range of plastic bottles for oil
STOCK FEED
• Currently producing 120 tons of stock feed per day in own stock feed plant
NOVATEK
• Modern fully automated stock feed to commence operation in February 2009 for
both Zambeef and external sales
• Capacity of 6 000 tons per month
BUTCHERY OUTLETS
• Sells high quality beef, chicken, pork, milk, eggs, processed meat, edible oils and
bread in 93 outlets throughout Zambia and West Africa
• In store butcheries in Shoprite supermarkets in Zambia, Nigeria and Ghana
FASTFOOD
OUTLETS
• One of the largest trucking and transport fleets in Zambia in excess of 200 units
• Own modern workshop to service and maintain fleet
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How We Have Performed
14
Zamanita Plant
How We Have Performed
Joint Managing Directors’ Report
In order to finance these strategic acquisitions This has been another year of strong growth for
as well as part finance the large reinvestment in the Zambeef Products PLC Group with Turnover
the Zambeef Products PLC existing operations, increasing by 69% in Kwacha terms and 81% in
Zambeef Products PLC issued 44,036,595 new Dollar terms. Profit after tax increased by 59% in
ordinary shares during the year raising K259bn. Kwacha terms and 71% in Dollar terms.
This has resulted in a very well capitalised and
diversified agri-business which is well placed to It is pleasing to note that the acquisition of Master
benefit from the strong real growth not only in Pork Ltd, Zamanita Ltd, and Nanga Farms PLC
Zambia but in the region. were all strong earnings enhancing acquisitions
contributing to the weighted average earnings
The Zambian economy has continued to show per share increasing by 32% in Kwacha terms
strong growth with the economy growing in real and 42% in dollar terms.
terms by 6.8% in 2007 and is expected to grow
by 6% in 2008. The resulting increase in real in- These excellent results have resulted in the
comes has contributed to strong growth in the Zambeef Board of Directors proposing increas-
demand for basic food products and has resulted ing the dividend pay out for the year from K9.5bn
in Zambeef Products PLC Group having to in- to K13.6bn representing an increase of 43%.
vest in all its divisions to continue to meet this
increased demand for food. The group continues OPERATIONAL REVIEW
to be the largest food provider in Zambia and
has increased exports into the region in line with This has been a year which has not only seen the
the vision of being the leading food provider continued expansion of the Zambeef Group’s
for the region. With the region being a large existing operations but has also seen the very
net importer of food, the challenge remains for successful incorporation of the Master Pork
Zambeef Products PLC to continue to grow to Ltd pork operations and the Zamanita Ltd oil
help ensure food security for the region. operations into the Zambeef Group. Master
Pork Ltd became a wholly owned subsidiary of
The Zambeef Board of Directors have ap- Zambeef Products PLC on 2nd January 2008 and
proved a number of exciting new projects for Zamanita Ltd became a wholly owned subsidiary
the next financial year which include the building on 15th February 2008. In addition Nanga Farms
of a new modern stock feed plant to provide PLC became an 85.73% subsidiary of Zambeef
quality stock feed to Zambeef ’s operations as Products PLC on 1st July 2008. The full benefit
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How We Have Performed
Joint Managing Directors’ Report
CHICKEN (ZAMCHICK)
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How We Have Performed
Joint Managing Directors’ Report
DAIRY (ZAMMILK)
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How We Have Performed
Joint Managing Directors’ Report
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How We Have Performed
Joint Managing Directors’ Report
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Nanga Farm
How We Have Performed
Joint Managing Directors’ Report
FEED PLANT increase during the coming year with the new
stock feed plant in production.
The feed plant division remains an important part
of the Zambeef operations adding value to the MILLING (ZAMFLOUR)
maize and soya produced by Zambeef Products
PLC and converting it into a product that can be The flour milling operations have had an out-
fed to the chickens, cattle and pigs. Zambeef cur- standing year with the commencement of
rently produces all its own stock feed in its own operations at Zambeef ’s new flour mill during
stock feed plant. During the year the Zambeef November 2007. Zambeef had been producing
Board of Directors approved a US$8m project flour under a toll milling agreement with another
for the establishment of a fully automated state mill since November 2006. The start of milling at
of the art stock feed plant which will take the Zambeef ’s own mill has resulted in an improve-
feed milling industry in Zambia to a new level. ment in quality and efficiency. The brand name,
This stock feed plant should be operational in Zamflour, has grown in strength during the year
February 2009 and will produce all of the and sales both within Zambia and the region
Zambeef Group stock feed requirements as well have increased significantly during the year with
as sell stock feed to third parties in Zambia and turnover up 105% in Kwacha terms and 121%
into the region. This plant will have the capac- in Dollar terms while operating profit increased
ity to produce 6,000 tonnes of feed per month. 656% in Kwacha terms and 713% in Dollar
With the expansion of the Zamanita oil crushing terms.
plant, the stock feed plant will have a good sup-
ply of protein for the livestock sector. Instead of The milling operations will continue to add value
this protein being exported in the raw form, the to Zambeef ’s wheat production and will con-
intention is to add maximum value in the stock tinue to grow as Zambeef ’s wheat production
feed plant before selling the stock feed in the grows annually. This division can look confidently
Zambian and regional market. to the future.
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How We Have Performed
Joint Managing Directors’ Report
FISH
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How We Have Performed
Joint Managing Directors’ Report
worldwide. Zambeef Products PLC have started This acquisition was an important strategic de-
a small fish project on its Chiawa Farm and with cision by the Zambeef Group. The edible oils
fish continuing to be a cheap form of protein, the produced by Zamanita compliment Zambeef
Group is looking at the viability of doing a large Group’s range of basic foods retailed through
fish project. its retailing network. In addition the by-product
from the oil crushing plant is the main source of
EDIBLE OIL (ZAMANITA) protein for the livestock sector. Zambeef is thus
committed to expanding the crushing plant in or-
In February 2008, Zambeef Products PLC ac- der to ensure as many of the oil seeds grown in
quired the assets of the largest edible oil pro- Zambia are crushed and value added in Zambia.
ducer in Zambia. These assets were placed in a This reduces Zambia’s need to import edible oils
wholly owned subsidiary of Zambeef Products and ensures the protein remains in Zambia to
PLC called Zamanita Ltd. Zamanita has been develop the livestock sector.
very successfully brought into the Zambeef
Group and its products are now being distrib- Zamanita has embarked on an aggressive capital
uted through the Zambeef Group’s distribution expenditure program in order to upgrade the
and retailing network. Zamanita is now the third Zamanita plant and ensure it is competitive
largest division within the Zambeef Group after in the region. A new cotton seed decorticat-
the beef and farming divisions accounting for ing plant has been installed which now allows
12% of the operating profits. Zamanita to crush cotton seed in addition to
soya and sunflower seed. This now means that
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How We Have Performed
Joint Managing Directors’ Report
23
Sinazongwe Farm
How We Have Performed
Joint Managing Directors’ Report
The Zambeef retailing network remains the being two in Abuja, one in Lagos and one in
engine which drives the Zambeef business. It al- Ogun State. In addition 12 additional sites are
lows Zambeef to add maximum value to all its currently being looked at. As a result we expect
primary production through further processing in 2010/11 the Nigerian operations to increase
before branding and then retailing these products significantly and become a material part of the
directly to the end consumer. With real incomes Zambeef Group operations.
increasing in Zambia, the resulting increase in
demand for food in Zambeef ’s retailing network FUTURE DEVELOPMENTS
keeps the pressure on all the Zambeef Group
Divisions to continue to expand to meet this The Zambeef Products PLC Board of Directors
demand. have already approved new projects to the value
of US$30m for the 2008/9 Financial Year. These
WEST AFRICA (NIGERIA & GHANA) projects include the setting up of a poultry hatch-
ery, building a modern new piggery, expansion of
On 1st November 2007 the Zambeef Group the processed meats division, expansion of the
commenced operations in Ghana through a 90% irrigated cropping operations, establishment of
subsidiary called Master Meats (Ghana) Ltd. This ranching operations, and development of a new
is the second country outside of Zambia that stock feed plant.
Zambeef Products PLC has operations in. The
other country being Nigeria where Zambeef The Zambeef Group is also considering stra-
Products PLC also has a 90% subsidiary called tegic acquisitions both in the region and within
Master Meats and Agricultural Production Zambia.The Zambeef Group has prided itself on
Company of Nigeria Ltd. Both these operations the continual reinvestment back into its opera-
have the franchise on the South African super- tions and expects 2009 to be another exciting
market giant, Shoprite Checkers butcheries, in year for the Group.
these countries.
APPRECIATION
The Ghana operation has had a very good first
10 months of operations with the company David Phiri retired as a non executive director of
making an operating profit of K750m and break- Zambeef Products PLC on 6th June 2008. David
ing even for the year. This is an excellent start Phiri has had a long association with Zambeef
to operations in Ghana. Shoprite are looking at Products PLC and served as a non executive
further sites in Ghana and are in the process of director since 2002. His advice over the years
starting developing 2 sites in Accra and one in has been invaluable particularly with Zambeef
Kumasi which will open in late 2009 and mid Products PLC becoming a public company in
2010. Two further sites are being looked at in February 2003.
Accra. As a result the Ghana operations will have
strong growth with most of this coming through As Joint Managing Directors, we would like to
in 2010/11. most sincerely thank David Phiri for his wise and
constructive guidance over the years.
The Nigerian operation has continued to grow
and will be opening its new pork processing plant STAFF & BOARD OF DIRECTORS
in the New Year. This will be a smaller version of
Zambeef ’s Master Pork operations in Zambia. The Zambeef Group remains committed to at-
Shoprite have an aggressive expansion program tract, retain and motivate top quality people in
in Nigeria with work starting on four new sites the best interests of the Group. As Joint Managing
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How We Have Performed
Joint Managing Directors’ Report
Directors we would like to thank all the staff of the Ltd and Managing Director of Lonhro Africa
Zambeef Group in Zambia, Nigeria and Ghana Cotton.
for their contribution to another very successful
year for Zambeef. It is another year we can all We would again like to sincerely thank our Board
look back on with a lot of pride. A company is colleagues for the continual guidance, advise and
only as good as its work force and the success support in continuing to grow and expand our
of Zambeef is a reflection of the dedication and business. Zambeef Products PLC is fortunate in
work by the employees. the high calibre of its directors with enormous
experience in the private and public sector both
We would like to welcome our new directors within Zambia and internationally. In particular
who have joined us during the year. Dr Aubrey we must thank our Board Chairman Dr Jacob
Muyeke Chibumba joined the Board as a non Mwanza for his continued tremendous support
executive director following the retirement of and guidance.
David Phiri. He is currently the Director General
of NAPSA, the main state pension fund in Zambia CONCLUSION
and brings wide experience in international busi-
ness and risk management. Diego Casilli joined This has been another exceptional year for the
as an executive director on 2nd January 2008, Zambeef Group of Companies. It is a year in
following the acquisition of Zamanita Ltd. Diego which Zambeef has matured significantly with a
Casilli was one of the owners of this company and number of strategic and profitable acquisitions. It
took shares in Zambeef as part of the acquisition has seen Zambeef widen its operations in Africa
cost. He has an excellent knowledge of business with the commencement of operations in Ghana
in Zambia and the region and has brought a lot and has seen Zambeef expand its existing op-
of new ideas and opportunities to Zambeef. erations with the strategic objective of being the
Nick Wilkinson joined as an executive director leading food provider for the region. Zambeef
on 19th September 2008. Nick Wilkinson again can continue to look to the future with a great
brings enormous business skills and knowledge deal of confidence.
of business in Africa having been Chief Executive
of Mpongwe Development Company Ltd and
Nanga Farms PLC, Chief Executive of Dunavant
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How We Are Governed
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How We Are Governed
Environmental, Health & Safety and Social Responsibility Report
• Provide a safe and healthful workplace and ensure that personnel are properly trained and have appro-
priate safety and emergency equipment.
• Be an environmentally responsible neighbour in the communities where we operate, and act promptly
and responsibly to correct incidents or conditions that endanger health, safety, or the environment.
• Conduct our business in compliance with applicable environmental and health & safety laws and regula-
tions.
• Be a responsible and committed corporate citizen and be a useful and effective member of the commu-
nities within which we operate.
• Aim to reduce poverty by establishing strong partnerships with local communities & supporting com-
munity initiatives, especially in the health and education areas, that deliver sustainable long-term results &
real benefits to the communities within which we operate.
• Review yearly our strategies, objectives and targets and monitor environmental programs to ensure con-
tinuous improvement of our environmental performance.
• Conduct ongoing audits to ensure compliance of environmental and health & safety legislation and re-
port periodically to the Board of Directors.
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How We Are Governed
Environmental, Health & Safety and Social Responsibility Report
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How We Are Governed
Environmental, Health & Safety and Social Responsibility Report
About 242 managers, stock controllers and cashiers were trained during the
year under review, who later trained their own staff in their respective outlets
and the number came to 941. The staff were trained in the following areas:
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How We Are Governed
Environmental, Health & Safety and Social Responsibility Report
Zambeef has also teamed-up with a UK based charity called Alive &
Kicking, which aims to use the power of football to deliver health
education, in particular, to raise HIV/AIDS awareness and malaria
prevention. The charity already operates in Kenya and South Africa.
• Buying footballs to be distributed to schools and orphanages in poor, largely rural areas
• Provide finished leather from our tannery at reduced prices
• Provide space at our tannery/shoe plant free of charge
• Use of our shoe plant equipment free of charge
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How We Are Governed
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How We Are Governed
Corporate Governance Report
CORE POLICY
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How We Are Governed
Corporate Governance Report
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How We Are Governed
Corporate governance Report
the audit process, and that a sound risk manage- Remuneration Committee
ment and internal control system is maintained.
The Committee provides an independent over- The Remuneration Committee is chaired by Dr.
sight of the group’s system of internal control Jacob Mwanza, and its membership consists of
and financial reporting processes, including the three non-executive directors. The two Joint
review of the interim and annual financial state- Managing Directors and the Executive Director
ments before they are submitted to the Board attend, report & participate at all meetings of the
for final approval. committee but they do not take part in any deci-
sions regarding their own remuneration.
The Audit Committee is required to ensure that
all appropriate controls and processes are in The main responsibility of the committee is to
place to identify all significant business, strategic, review and approve the remuneration and em-
statutory and financial risks and that these risks ployment terms and conditions of the executive
are being effectively monitored and managed. In directors and senior group employees.
pursuing these objectives, the Audit Committee
oversees relations with the external auditors and The committee has a clearly defined mandate
reviews the effectiveness of the internal audit from the Board aimed at ensuring that the
function. group’s remuneration strategies, packages and
schemes are related to performance, are suitably
The Audit Committee is not aware of any signifi- competitive and give due regard to the interests
cant cases of non-compliance with the group’s of the shareholders and the financial and com-
Code of Corporate Governance during the year mercial health of the company.
under review, nor is it aware of any ascertainable
risk from any litigation pending, in progress or In determining the remuneration of the execu-
threatened, which could be regarded as material tive directors and senior group employees, the
t the group’s financial position. Remuneration Committee has aimed to provide
the appropriate packages required to attract, re-
tain and motivate the executive directors and
senior group employees.
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How We Are Governed
Corporate Governance Report
The committee has considered and submitted internal controls and to eliminate duplication of
recommendations to the Board concerning the effort. The key features of the internal control
fees to be paid to each non-executive director. system that operated throughout the year cov-
Any changes to the fees are approved by the ered by the financial statements are described
Board and the shareholders in a general meet- under the following headings:
ing.
Identification and Evaluation of Business Risks
INTERNAL CONTROL, RISK MANAGEMENT and Control Objectives
AND INTERNAL AUDIT
The Board has the primary responsibility for
The Board is responsible for the group’s system identifying the major risks facing the group and
of internal control and risk management and for for developing appropriate policies to manage
reviewing its effectiveness. The Chief Internal those risks and relies on the reports of the Audit
Auditor has established the procedures neces- Committee.
sary to implement clear operating procedures,
lines of responsibility and delegated authority. Information and Reporting Systems
The system of internal control, which is embed- The group operates a comprehensive annual
ded in all key operations, aims to provide assur- planning and budgeting system with an annual
ance that the company’s business objectives are budget approved by the Board. Reports include
achieved within the risk tolerance levels defined profit forecasts and cash flow statements, which
by the board. Regular management reporting, are used in determining that the group is in line
which provides a balanced assessment of key with its projected trading/financial forecasts and
risks and controls, is an important component of that it has adequate funding for its current and
Board assurance. future needs.
The company’s internal audit function now has
a formal collaboration process in place with the
external auditors to ensure efficient coverage of
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How We Are Governed
Corporate Governance Report
Risk Management
Monitoring
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How We Are Governed
37
How We Are Governed
Citizen’s Economic Empowerment Report
In the year 2006, the Government of the Republic CITIZEN EMPOWERED COMPANY
of Zambia enacted the Citizens Economic
Empowerment Act number 6 (CEE Act). The This is a company where twenty five – fifty per-
Act provides the legal basis for implementing the cent of its equity is owned by citizens.
economic empowerment program in Zambia.
The objective of this program once imple- CITIZEN INFLUENCED COMPANY
mented would be to expand citizen ownership
and effective participation in the affairs of the This is a company where five to twenty five
economy. The Act also established the Citizens percent of its equity is owned by citizens and
Economic Empowerment Commission (CEEC ) in which citizens have significant control of the
whose mandate among others is to promote the management of the company.
economic empowerment of targeted citizens,
citizens empowered companies, citizens influ- CITIZEN OWNED COMPANY
enced companies and citizens owned companies.
To this effect, nine pillars have been identified This is a company where at least fifty point one
as being a summary of the economic empower- percent of its equity is owned by citizens and
ment program; in which citizens have significant control of the
company.
- Equity and Ownership
- Skills Development In light of the Act, and the provisions thereof,
- Greenfield Investment Zambeef Products PLC Group has set up delib-
- Access to Finance erate programs and activities to ensure that the
- Foreign Direct Investment company adheres to the provisions of the CEE
- Preferential Procurement Act.
- Good Corporate Governance
- Corporate Social Responsibility Employment
- Transformation of Society
The group employs over 3,485 employees of
The CEEC with the stakeholders are currently which over 98% are Zambian. Furthermore,
in the process of developing sector codes which the group through its farming division provides
will become legally binding once CEEC cause significant employment to the rural community
their publication in the Government Gazette. where poverty levels are much higher than the
urban areas. In addition to providing employment,
TARGETED CITIZENS the group has set up health, education and sani-
tary facilities to these communities. The group
These have been identified as citizens that have also runs a confidential program for people living
historically been marginalized and whose access with HIV/AIDS which is run on a strict inter- per-
to economic resources and developmental ca- sonal relationship to discourage stigmatization
pacity has been constrained due to various fac- and promote confidentiality.
tors including race, sex, education background,
status and disability. Targeted citizens include;The Equity and Ownership
Youth; Women; Disabled; People living with HIV/
AIDS; Senior Citizens; Retirees; Cooperatives/ Zambeef Products PLC joined the stock market
Farmer Associations. in 2003. This position provided an opportunity
for Citizens at large to buy shares in the com-
pany. It also provided an equal opportunity for
pension fund managers to invest in the com-
pany’s shares so as to provide a return for the
38
How We Are Governed
Skills Development
Preferential Procurement
39
How We Are Governed
Board of Directors - Biography
Dr. Jacob Mwanza
Board Chairman and Chairman of the Remuneration and Executive Committees
Nationality: Zambian
Qualifications: MA Economics (W. Germany)
Experience: Over 30 years Buisiness Management experience, both in the public and
private sectors. Previously Governor of the Central Bank; currently
Chancellor of the University of Zambia. Has served and is currently on several Boards,
including Stanbic Bank, Citi Bank, Intercontinental Hotel.
Rodney Clyde-Anderson
Non-executive Director and member of the Remuneration Committee
Nationality: British
Qualifications: Diploma in Agriculture (Zimbabwe)
Experience: Over 30 years experience in Agribusiness; past Chairman of Herd Book So-
ciety of Zambia and Livestock Services Co-operative Society; previously Vice-president
of Zambia National Farmers Union. Currently serving on several Boards including Bric
Brac Ltd, Wellspring Ltd and Mazabuka Marketing Company Ltd.
Lawrence Sikutwa
Non-executive Director and Chairman of the Audit Committee and member of the
Remuneration and Executive Committees
Nationality: Zambian
Qualifications: FCII; Post Grad Diploma in Insurance (UK)
Experience: Over 30 years experience in Business Management. Previously
General Manager of Zambia State Insurance Corporation; currently Group
Chairman of LSA Ltd Group of Companies.
Hilary Duckworth
Non-executive Director
Nationality: British
Qualifications: R.M.A Sandhurst; MBA (UK)
Experience: Over 20 years experience in Business Management; Merchant
Banking experience with various banks in the UK; Director of a number of
other companies including Bric Brac Ltd.
40
How We Are Governed
Board of Directors- Biography
John Rabb
Non-executive Director
Nationality: South African
Qualifications: BSc (Agriculture); MBA (RSA)
Experience: Over 30 years Business Management experience. Currently
Managing Director of Wooltru Group South Africa. Has served and is currently on
several Boards, including Spur Holdings (listed on JSE) and Wellspring Ltd.
Irene Muyenga
Non-executive Director and member of the Audit and Executive Committees
Nationality: Zambian
Qualifications: BA (ed); DIS; LIII
Experience: Over 20 years Business Management experience. Currently
Managing Director of Zambia State Insurance Corporation. Has served and is currently
on several Boards, including African Insurance Organisation, Insurance Advisory Coun-
cil, Organisation for Eastern & Southern African Insurers, Zambia
Insurance Business College, PTA Re-Insurance Company.
Adam Fleming
Non-executive Director
Nationality: British
Experience: Over 30 years Business Management and Banking experience.
Previously Chairman of Harmony Gold (listed on JSE and one of the largest gold min-
ing companies in the world); currently Chairman of Witwatersrand Consolidated Gold
Resources Ltd. Has served and is currently on several Boards.
41
How We Are Governed
Board of Directors - Biography
Carl Irwin
Joint Managing Director
Nationality: Zambian
Qualifications: B. Com; ACA (UK)
Experience: Over 17 years of accounting & finance experience with a number of
companies, including Coopers & Lybrand UK. Co-founder of Zambeef Products Plc.
Other directorships include Lubungu Wildlife Safari Company Ltd, Proflight Commuter
Services Ltd, Zambezi Ranching & Cropping Ltd and Master Pork Ltd.
Francis Grogan
Joint Managing Director
Nationality: Irish
Qualifications: BSc Agriculture (Ireland)
Experience: Over 22 years experience in agriculture and meat, including
experience with United Meat Packers (Ireland), one of Europe’s largest meat com-
panies. Co-founder of Zambeef Products Plc. Other directorships include Zambezi
Ranching & Cropping Ltd and Master Pork Ltd.
Yusuf Koya
Executive Director
Nationality: British
Qualifications: BSc in Geology & Economics; MSc in Economics; ACIB (UK)
Experience: Over 17 years banking experience in corporate finance and credit risk
management, both in the UK and Zambia. Previously Head of Corporate Finance, As-
sistant Corporate Director & Country Credit Director with Barclays Bank Zambia Plc.
Nancy Hart
Finance Director
Nationality: American
Qualifications: BSc in Accounting; CPA (USA)
Experience: Over 17 years accounting, finance & audit experience, including 3 years as
an officer in the Enforcement Division of the US SEC and 4 years as Senior Auditor
with Ernst & Young, USA.
Nick Wilkinson
Executive Director
Nationality: British
Qualifications: BCom in Accounting; Chartered Accountant
Experience: Over 20 years experience in senior management in large corporates in
the Southern African region and Zambia. Previously Managing Director of Mpongwe
Development Company and Dunavant Zambia.
42
How We Are Governed
Directors’ Attendance Register
Diego Casilli
Managing Director (Zamanita Limited)
Nationality: Italian
Qualifications: Bachelor of Commerce with Honors (University of Witwatersrand,RSA)
Experience: Over 18 years in Agro-processing and Commodity Finance operations in
the SADC region.
Other Directorship include Amanita Africa Limited, Inbond Limited, Dolomite Limited.
Danny Museteka
Company Secretary
Nationality: Zambian
Qualifications: MBA (UK); FCCA; PG. DIP BA; Diploma in Accountancy; AZICA
Experience: Over 17 years accounting and finance experience with a number of public
and private companies in Zambia.
Directors A B C D
Jacob Mwanza 4 1 5
Rodney Clyde- Anderson 3 1
Lawrence Sikutwa 4 7 2
Hillary Duckworth 2
John Rabb 3
Irene Muyenga 4 7 3
Adam Flemming 3
Carl Irwin 4 5
Francis Grogan 4 5
Yusuf Koya 4 4
Nancy Hart 4
Aubrey Chibumba 1 1
Diego Casilli 3
Nick Wilkinson
A- Board Meetings
B- Audit Committee Meetings
C- Remuneration Committee Meetings
D- Executive committee
43
44
Financial and Shareholder Information
Ratios and Statistics
Income statement information 2008 2007 2006 2005 2004
Revenue K Millions 492 698 291 971 223 782 196 576 164 740
Gross Profit K Millions 190 881 128 456 100 432 85 821 65 564
Profit attributed to the sharehold- 37 368 23 500 19 634 16 683 14 529
K Millions
ers of Zambeef Products PLC
Number of shares issued 158 706 045 114 669 450 114 669 450 114 669 450 114 669 450
Closing Market Capitalisation K Millions 999 848 630 682 286 559 160,537 91 736
45
Financial and Shareholder Information
Consolidated Financial Statements
30 September 2008
Agenda Appendix 1
46
Financial and Shareholder Information
Approval of Annual Financial Statements & Annual Compliance Certificate
Pursuant to the requirements of schedule 18 to the rules of the Lusaka Stock Exchange, I the undersigned Danny Shaba
Museteka being the duly appointed and registered Secretary certify to the Lusaka Stock Exchange that Zambeef Products Plc
has during the twelve months ended Septemeber 2008, complied with every disclosure requirement for continued listing on
the Lusaka Stock Exchange imposed by the Board of the Exchange during that period.
In addition, I hereby confirm that for the year ended 30 September 2008, the company has lodged with the Registrar of
Companies all such returns as are required by a public company in terms of the Companies Act 1994 and that all such returns
are true and correct.
47
Financial and Shareholder Information
Report of the Directors
The Directors have pleasure in presenting their report of the activities of the company and the group for the year ended 30
September 2008.
1 PRINCIPLE ACTIVITIES
Zambeef Products PLC and its Subsidiaries (“Group”) is one of the largest agri-businesses in Zambia and the region. The
Group’s principal activities are cropping operations as well as the production, processing and retailing of beef, chicken, pork,
eggs, milk, dairy products, wheat products, leather products and edible oils throughout Zambia and West Africa.
2 THE COMPANY
The company floated on the Lusaka Stock Exchange on 14 February 2003 when it became a public limited company. The
company is incorporated and domiciled in Zambia.
3 SHARE CAPITAL
Details of the company’s authorised and issued share capital are included in note 18 to the financial statements.
4 RESULTS
The Group’s results are as follows:
2008 2007
K Million K Million
Turnover 492 698 291 971
Profit before taxation 44 195 28 212
Taxation (5 919) (4 688)
Profit after taxation 38 276 23 524
Profit attributed to minority interest (908) (24)
5 DIVIDENDS
During the year an interim dividend of K2 100 million (2007 – K1 500 million) was paid to the shareholders. A final dividend
of K11 500 million has been proposed by the company’s Board of Directors. This compares to a final dividend of K8 000 mil-
lion paid in the previous year. The directors propose to carry the remaining profit for the year of K23 767 million to reserves
(2007 – K14 000 million).
48
Financial and Shareholder Information
Report of the Directors [continued]
6 SEGMENTAL REPORTING
Contribution to the consolidated turnover and gross profit of the group are as follows:
7 MANAGEMENT
Senior Management Position
Carl Irwin Joint Managing Director
Francis Grogan Joint Managing Director
Yusuf Koya Executive Director
Nick Wilkinson Executive Director
Nancy Hart Finance Director
Diego Casilli Managing Director Zamanita
Danny Museteka Company Secretary
Murray Moore General Manager - Food Processing Operations
Ebraham Israel International Retailing Manager
Sushmit N Maitra Business Solutions Manager
Jones Kayawe Technical Director - Zamanita Limited
David Mynhardt General Manager - Farming (Sinazongwe)
Carl Rorbye General Manager - Farming (Huntley)
Rob Boucher General Manager - Farming (Chiawa)
Raymond Strover General Manager - Nanga Farms PLC
Leon Gunter General Manager - Stock Feed
Richard Franklin General Manager - Zamleather Limited
Alaister McLeod General Manager - Poultry
Justin Pigou General Manager - Dairy
Jacob Erasmus General Manager - Copperbelt
John Stephenson General Manager - Master Meat Nigeria
Lufeyo Nkhoma General Manager - Master Meat Ghana
49
Financial and Shareholder Information
Report of the Directors [continued]
Senior Management [cont] Position
Philip Diedericks Financial Manager
John Nkonjela Finance Manager - Zambeef Products PLC
James Banda Finance Manager - Zambeef Retailing Limited
Lloyd Mwiinga Finance Manager - Nanga Farms PLC
Sanjay Kumar Finance Manager - Zamanita Limited
Ryan Stassen Retailing Operations Manager
Clement Mulenga Retailing Regional Manager
Mabvuto Mbao Retailing Regional Manager
Hilary Anderson Retailing Regional Manager
David Ng’ambi Human Resource Manager
Amos Wambili Human Resource Manager - Zamanita Limited
Eddie Tembo Chief Security Manager
Justo Kapulande Public Relations Manager
Pravin Abraham Group Internal Auditor
Ernest Gondwe Masterpork Plant Manager
Bartholomew Mbao Milk Factory Manager
Peter Wandira Mill Manager
Francis Mandamona Cattle Ranch Manager
Walter Roodt Animal Nutritionist
Wilson Mutale Shoe Plant Manager
Ragu Kulkarni Tannery Manager
Theo de Lange Technical Manager
Gert Zietsman Workshop Manager
Christabel Malijani Environmental, Health & Safety Manager
9 DIRECTORS’ INTERESTS
The directors held the following interests in the company’s ordinary shares at the balance sheet date:
Beneficial Non-Beneficial
J Mwanza 850 000 -
R Clyde Anderson - 1 537 545
C Irwin - 4 567 373
F Grogan - 4 730 747
H Duckworth - 4 698 120
J Rabb - 5 024 920
50
Financial and Shareholder Information
Report of the Directors [continued]
9. DIRECTORS’ INTERESTS [continued]
Beneficial Non-Beneficial
L Sikutwa - 679 864
A Chibumba - -
I Muyenga 1 160 -
A Fleming - 8 266 471
Y Koya 14 323 -
N Hart 17 152 -
D Casilli - 4 438 516
N Wilkinson - -
10 EMPLOYEES
The group employs 3 485 full time employees (2007 – 1 661) and total salaries and wages were K45 717 million for the year
ended 30 September 2008 (2007 – K30 052 million). The company employs 622 full time employees and total salaries and
wages were K6 551 million (2007 – K6 600 million).
The average number of staff for each month in the year was as follows:
Oct 07 Nov Dec Jan 08 Feb Mar Apr May June July Aug Sept
1 673 1 727 1 735 2 073 2 176 2 154 2 384 2 535 2 538 3 189 3 414 3 485
12 EXPORT SALES
The group made exports of US$2.04 million during the year (2007 – US$1.9 million).
13 FIXED ASSETS
The Group purchased assets totalling K220 515 million during the year (2007 – K33 762 million).
15 AUDITORS
In accordance with the provisions of the Articles of Association of the company the auditors, Messrs Grant Thornton, will
retire as auditors of the company at the forthcoming Annual General Meeting, and having expressed their willingness to con-
tinue in office a resolution for their re-appointment will be proposed at the Annual General Meeting.
51
Financial and Shareholder Information
Statement of the Directors’ Responsibilities
Companies Act requires the directors to prepare financial statements for each financial year which
give a true and fair view of the financial position of Zambeef Products PLC and its subsidiaries and
of its financial performance and its cash flows for the year then ended. In preparing such financial
statements, the directors are responsible for:
• designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement;
• make judgements and accounting estimates that are reasonable in the circumstances; and
• preparing the financial statements in accordance with the International Financial Reporting Standards, and on the going
concern basis unless it is inappropriate to presume that the company and the group will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the company and the group and enable them to ensure that the financial statements comply with
the Companies Act 1994. They are also responsible for safeguarding the assets of the company and the group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
(a) the financial statements give a true and fair view of the financial position of Zambeef Products PLC and its subsidiaries as
of 30 September 2008, and of its financial performance and its cash flows for the year then ended;
(b) at the date of this statement there are reasonable grounds to believe that the company and the group will be able to pay
its debts as and when these fall due; and
(c) the financial statements are drawn up in accordance with International Financial Reporting Standards.
52
Financial and Shareholder Information
Report of the Auditors
We have audited the accompanying financial statements of Zambeef Products PLC and its subsidiaries, which comprise the
balance sheet as at 30 September 2008, and the income statement, statement of changes in equity and cash flow statement
for the year then ended, and a summary of significant accounting policies and other explanatory notes.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement
of the financial statements. In making those risk assessments, the auditor considers internal control relevant to the group’s
preparation and fair presentation of the financial statements 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 group’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OPINION
In our opinion, the financial statements give a true and fair view of the financial position of Zambeef Products PLC and
its subsidiaries as of 30 September 2008, and of its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards.
Chartered Accountants
Wesley M Beene
Partner
53
Financial and Shareholder Information
Group Consolidated Profit and Loss Account
For the year ended 30 September 2008
Notes Group
2008 2007
K Million K Million
Turnover 5 492 698 291 971
Cost of sales (301 817) (163 515)
54
Financial and Shareholder Information
Statements of Changes in Equity
30 September 2008
Group statement of changes in equity
55
Financial and Shareholder Information
Group Consolidated Balance Sheet
30 September 2008
Notes Group
2008 2007
K Million K Million
ASSETS
Non-current assets
Property, Plant and Equipment 10 373 416 172 068
Held to maturity financial assets 12 11 760 -
Goodwill 9 69 801 -
Deferred Tax Asset 7 515 -
The financial statements on pages 54 to 81 were approved by the Board of Directors on 21 November 2008 and were
signed on its behalf by:
56
Financial and Shareholder Information
Company Balance Sheet
30 September 2008
Notes Company
2008 2007
K Million K Million
ASSETS
Non-current assets
Property, Plant and Equipment 10 172 588 110 754
Investment in subsidiaries 11 166 729 -
Amount due from Group company 5 205 -
Held to maturity financial assets 12 11 760 1 984
356 282 112 738
Current assets
Biological assets 13 47 575 38 590
Inventories 14 47 648 22 696
Trade and other receivables 15 7 502 5 279
Amounts due from related companies 16 40 871 32 849
Income Tax recoverable 7 963 -
Total current assets 144 559 99 414
Total assets 500 841 212 152
EQUITY AND LIABILITIES
The financial statements on pages 54 to 81 were approved by the Board of Directors on 21st November 2008 and were
signed on its behalf by:
57
Financial and Shareholder Information
Group Consolidated Cash Flow Statement
30 September 2008
Group
2008 2007
K Million K Million
Cash (outflow) inflow (on)/from operating activities
Profit before taxation 44 195 28 212
Interest paid 8 018 2 857
Depreciation 19 039 11 918
Loss on disposal of assets (65) 8
Decrease/(Increase) in Biological assets (30 773) (7 797)
Decrease/(Increase) in Inventory (104 965) (11 346)
Decrease/(Increase) in Trade and other receivables (30 285) (9 497)
Decrease/(Increase) in Amount due from related companies (2 338) (28)
(Decrease)/Increase in Trade and other payables 67 802 7 914
(Decrease)/Increase in Amount due to related companies (1 137) 363
(Decrease)/Increase in Deferred Liability 540 (1 034)
(Decrease)/Increase in Minority interest 3 029 17
Net cash inflow/(outflow) from operating activities (26 941) 21 587
Returns on investments and servicing of finance
Interest paid (8 018) (2 857)
Dividends paid (10 100) (8 499)
Net cash outflow on returns on investments and
servicing (18 118) (11 356)
of finance
Taxation
Income Tax paid (3 714) (645)
Investing Activities
Purchase of Property, plant and equipment (220 508) (33 762)
Investment in held to maturity financial assets (11 760) -
Purchase of goodwill (64 377) -
Proceeds from sale of fixed assets 186 2
Net cash outflow on investing activities (296 459) (33 760)
Net cash outflow before financing (345 232) (24 174)
Financing
Proceeds from issue of shares 256 903 -
Long term loans paid (10 733) (10 016)
Receipt from long term loans 31 284 21 375
Lease finance received (732) 4 353
Net cash inflow from financing 276 722 15 712
Decrease in cash and cash equivalents (68 509) (8 462)
Cash and cash equivalents at 1 October 2007 (16 683) (8 221)
Cash and cash equivalents at 30 September 2008 (85 192) (16 683)
Represented by:
Bank balances and cash 2 913 2 945
Bank overdrafts (88 105) (19 628)
(85 192) (16 683)
58
Financial and Shareholder Information
Notes to the Financial Statements
1. The Company
Zambeef Products PLC and its Subsidiaries (“Group”) is one of the largest agri-businesses in Zambia and the region. The
Group’s principal activities are cropping operations as well as the production, processing and retailing of beef, chicken, pork,
eggs, milk, dairy products, wheat products, leather products and edible oils throughout Zambia and West Africa.
The Group’s major activities comprise feedlotting, poultry, dairy, cropping, slaughtering, processing of meat products and
retailing as well as running a tannery, shoe plant, edible oil plant and bakery.
a) Basis of consolidation
The consolidated income statement and balance sheet include the financial statements of the parent company and its
subsidiary companies made up to the end of the financial year. The results of subsidiaries acquired or disposed of during
the year are included in the consolidated profit and loss account from the date of their acquisition or up to the date of
their disposal. Intergroup transactions and profits are eliminated on consolidation and all income and profit figures relate to
external transactions only.
b) Basis of presentation
The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS).
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgment in the process of applying the group’s accounting policies.
(ii) Amendment to published standards that have been early adopted by the group:
In 2008, the following revised standard was early adopted:
• IAS 23 (revised) Borrowing costs. The amendments restrict the alternative treatment of expensing borrowing costs.
All borrowing costs on qualifying assets are now capitalised.
59
Financial and Shareholder Information
Notes to the Financial Statements [continued]
(iii) Interpretations to published standards that are not yet effective and have not been early adopted by the group:
The following new interpretations to existing standards have been published that are mandatory for the group’s accounting
periods beginning on or after 1 January 2009 or later periods but that the group has not early adopted:
Based on the group’s current business model and accounting policies, management does not expect material impact on its
financial statements when the Standards or interpretations become effective.
The directors have assessed the relevance of these amendments and interpretations with respect to the group’s operations
and concluded that they may not be relevant to the group based on the current operations.
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 group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to the income statement during the financial year in which
they are incurred.
Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to the revaluation sur-
plus in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against fair value reserves
directly in equity; all other decreases are charged to the income statement. Each year, the difference between depreciation
60
Financial and Shareholder Information
Notes to the Financial Statements [continued]
based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s
original cost, net of any related deferred income tax, is transferred from the revaluation surplus to retained earnings.
Depreciation is calculated to write off the cost of property, plant and equipment on a straight line basis over the expected
useful lives of the assets concerned. The principal annual rates used for this purpose are:
The assets’ residual values and useful lives are reviewed at each balance sheet date and adjusted if appropriate.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are included in
the income statement in the other operating income.When revalued assets are sold, the amounts included in the revaluation
surplus relating to these assets are transferred to retained earnings.
Management determines the classification of its investments at initial recognition and re-evaluate this at every reporting
date.
A financial asset is classified into the ‘financial assets at fair value through income’ category at inception if acquired principally
for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short
term profit taking, or if so designated by management.
Financial assets designated as at fair value through profit or loss at inception are those that are:
• held in internal funds to match investment contracts liabilities that are linked to the changes in fair value of these assets.
The designation of these assets to be at fair value through profit or loss eliminates or significantly reduces a measurement or
recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses
on them on different bases;
•managed and whose performance is evaluated on a fair value basis. Assets that are part of these portfolios are designated
upon initial recognition at fair value through profit or loss.
61
Financial and Shareholder Information
Notes to the Financial Statements [continued]
Financial assets are derecognised when the rights to receive cash flows from them have expired or where they have been
transferred and the group has also transferred substantially all risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value.
Debtors and receivables and held-to-maturity financial assets are carried at fair value. Realised and unrealised gains and losses
arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the
income statement in the year in which they arise. Unrealised gains and losses arising from changes in the fair value of non-
monetary securities classified as available for sale are recognised in equity. When securities classified as available for sale are
sold or impaired, the accumulated fair value adjustments are included in the income statement as net realised gains or losses
on financial assets.
Interest on available-for-sale securities is recognised in the income statement. Dividends on available-for-sale equity instru-
ments are recognised in the income statement when the group’s right to receive payments is established.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active, the
group establishes fair value by using valuation techniques.
62
Financial and Shareholder Information
Notes to the Financial Statements [continued]
The group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
significant. If the group determines that no objective evidence of impairment exists for an individually assessed financial asset,
whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and col-
lectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss
is or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred on debtors and receivables or held-to-maturity
investments, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in the income statement.
If in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting the allow-
ance account. The amount of the reversal is recognised in the income statement.
(i) Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is determined on a first in first out basis and includes all
expenditure incurred in the normal course of business in bringing the goods to their present location and condition, includ-
ing production overheads based on normal level of activity. Net realisable value takes into account all further costs directly
related to marketing, selling and distribution.
63
Financial and Shareholder Information
Notes to the Financial Statements [continued]
(l) Interest bearing liabilities
Short term interest bearing liabilities include all amounts expected to be repayable within twelve months from the date of
the balance sheet, including instalments due on loans of longer duration. Long term interest bearing liabilities represent all
amounts repayable more than twelve months from the date of the balance sheet.
(m) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. Tax currently payable is based on the
results for the year as adjusted for items which are non-assessable or disallowed for tax purposes.
Deferred taxation liabilities are recognised for all taxable temporary differences. Temproary differences can arise from the
recognition for tax purposes of items of income or expense in a different accounting period from that in which they are
recognised for financial accounting purposes. The tax effect of these temporary timing differences is computed by applying
enacted statutory tax rates to any differences between carrying values per the financial statements and their tax base, and
accounted for as deferred tax.
Deferred taxation assets are recognised for all deductible temporary differences to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences can be utilised.
Translation differences on non-monetary items, such as equity at fair value through profit and loss, are reported as part of the
fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial
assets, are included in fair value reserve in equity.
(p) Provisions
Restructuring costs and legal claims
Provisions for restructuring costs and legal claims are recognised when: the group has a present legal or constructive obliga-
tion as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation;
and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee
termination payments. Provisions are not recognised for future operating losses.Where there are a number of similar obliga-
tions, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class
of obligations may be small.
64
Financial and Shareholder Information
Notes to the Financial Statements [continued]
(q) Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the year in which
the dividends are approved by the company’s shareholders.
In the process of applying the group’s accounting policies, management has made judgements in determining:
These risks arise from open positions in interest rate and business environments, all of which are exposed to general and
specific market movements.
The group manages these positions with a framework that has been developed to monitor its customers and return on its
investments.
The group structures the levels of credit risk it accepts by placing limits on its exposure to the level of credits given to a
single customer. Such risk is subject to an annual or more frequent review. Limits on the level of credit risk by category and
territory are approved annually by the Board of Directors.
The group sets the amount of capital in proportion to its overall financing structure.The group manages the capital structure
and makes adjustments to it in the light of the economic conditions and the risk characteristic of the underlying assets. In
order to maintain or adjust the capital structure, the group may adjust the amount of the dividends paid to shareholders,
return capital to shareholders, issues new shares, or sell assets to reduce debt.
65
Financial and Shareholder Information
Notes to the Financial Statements [continued]
5. Turnover
Turnover represents the value of goods invoiced to customers during the year, less returns and allowances
Directors’ Remuneration
Executive 4 900 2 687 4 806 22 687
Non-executive 708 425 708 425
5 608 3 112 5 514 3 112
Auditors Remuneration
Audit service 219 146 110 65
Non-audit service - - - -
219 146 110 65
and after crediting:
Change in share value less estimated point of sale
costs of biological assets 51 770 21 426 42 726 21 426
Exchange (gains)/loss 3 533 1 849 3 225 1 718
66
Financial and Shareholder Information
Notes to the Financial Statements [continued]
Group Company
d) Income tax assessments have been agreed with the Zambia Revenue Authority (ZRA) up to and including the year
ended 30 September 2006. A self-assessment system for income tax was introduced for periods subsequent to 31 March
2004. Income tax returns have been filed with the ZRA for the years ended 30 September 2007. Quarterly tax returns for
the year ended 30 September 2008 were made on the due dates during the year.
Group Company
The weighted average number of ordinary shares is 137,928,965 (September 2007: 114,669,450).
67
Financial and Shareholder Information
Notes to the Financial Statements [continued]
30 September 2008
9. Goodwill
This represents excess of acquisition costs over the net assets in subsidiaries on the date of acquisition.
(b) The group’s property, plant and equipment situated in Zambia were last revalued in 2007 by Messrs Knight Frank,
Registered Valuation Surveyors, on the basis of market value. Surplus on valuation and depreciation no longer required total-
ling K49 384 million was transferred to a revaluation reserve.
(c) The depreciation charge for the year includes K2 538 million (2007 - K2 285 million) which relates to the surplus
over the original cost of fixed assets shown at a valuation. As this amount should not be taken to reduce the company’s dis-
tributable reserve, an equivalent amount has been transferred to distributable reserve from revaluation reserve.
(d) Included in land, buildings and equipment are borrowing costs amounting to K889 million. These have been capital-
ised in accordance with IAS 23 – Borrowing Costs (amended).
(e) In the opinion of the directors, the carrying values of property, plant and equipment stated above are not higher than
their fair values.
68
Financial and Shareholder Information
Notes to the Financial Statements [continued]
f) Company Leasehold Plant & Motor Furniture & Capital work Total
Land & Machinery Vehicles equipment in progress
Buildings
K Million K Million K Million K Million K Million K Million
Cost or valuation
At 1 October 2006 37 081 49 960 13 045 1 733 249 102 068
Additions 4 018 4 144 990 174 2 156 11 482
Disposals - - (39) - - (39)
Surplus/(deficit) on
valuation 31 581 (22 166) (11 438) (734) - 2 757
At 30 September 2007 72 680 31 938 2 558 1 173 2 405 110 754
Additions 35 147 23 596 1 172 75 1 588 71 578
Disposals - - - - - -
At 30 September 2008 107 827 55 534 3 730 1 248 13 993 182 332
Cost 35 147 23 596 1 172 75 13 993 73 982
Valuation (2007) 72 680 31 938 2 558 1 173 - 108 349
107 827 55 534 3 730 1 248 13 993 182 332
Depreciation
At 1 October 2006 2 068 11 695 7 446 467 - 21 677
Charge for the year 742 5 259 2 700 181 - 8 882
Disposals - - (29) - - (29)
Adjustment on valuation (2 810) (16 954) (10 117) (648) - (30 530)
At 30 September 2007 - - - - - -
Charges for the year (2 149) 6 813 (638) (144) - (9 744)
Disposals - - - - - -
At 30 September 2008 (2 149) 6 813 (638) (144) - (9 744)
Net book value
At 30 September 2008 105 678 48 721 3 092 1 104 13 993 172 588
At 30 September 2007 72 680 31 938 2 558 1 173 2 405 110 754
(g) The company’s property, plant and equipment were last revalued in 2007 by Messrs. Knight Frank, Registered Valua-
tion Surveyors, on the basis of market value. Net deficit on valuation and depreciation no longer required totalling K27 772
million has been transferred to a revaluation reserve.
(h) The depreciation charge for the year includes K585 million (2007 - K1 572 million) which relates to the surplus
over the original cost of property, plant and equipment shown at a valuation. As this amount should not be taken to reduce
the company’s distributable reserve, an equivalent amount has been transferred to distributable reserve from revaluation
reserve.
(i) Included in land, buildings and equipment are borrowing costs amounting to K889 million. These have been capital-
ised in accordance with IAS 23 – Borrowing Costs (amended).
(j) In the opinion of the directors, the carrying values of property, plant and equipment stated above are not higher than
their fair values.
69
Financial and Shareholder Information
Notes to the Financial Statements [continued]
2008 2007
K Million K Million
a) At cost:
At beginning of the year 1 984 1 777
Arising during the year 164 745 207
At end of the year 166 729 1 984
b) The company’s interest in its subsidiaries, which are unlisted, was as follows:
Zambeef Retailing Ltd Zambia 72 776 45 502 241 027 772 100
Zamleather Limited Zambia 10 269 2 612 8 853 1 081 100
Master Meat Limited Nigeria 2 033 1 289 12 389 235 90
Total at the End of 30
September 2007 85 078 49 403 262 269 2 088
Zambeef Retailing Ltd Zambia 97 592 70 025 319 607 289 100
Zamleather Limited Zambia 11 848 5 575 8 316 (1 384) 100
Master Meat Limited Nigeria 3 269 1 829 16 248 611 90
Master Meat Limited Ghana 1 759 1 573 5 937 31 90
Master Pork Limited Zambia 36 918 24 168 34 589 994 100
Zamanita Limited Zambia 101 383 97 194 125 791 7 345 100
Zampalm Limited Zambia 5 204 3 509 - - 100
Novatek Limited Zambia 4 907 4 898 - - 100
Nanga Farms PLC Zambia 68 699 41 577 26 300 6 090 85.73
Total at the End of
30 September 2008 331 579 250 348 536 789 13 976
2008 2007
K Million K Million
Zambeef Retailing Ltd 30 30
Zamleather Ltd 1 477 1 477
Master Meat & Agro Production Co. of Nigeria Ltd 270 277
Master Meat (Ghana) Ltd 179 200
Master Pork Ltd 26 600 -
Zamanita Ltd 50 960 -
Nanga Farms PLC 85 508 -
Zampalm Ltd 1 695 -
Novatek Ltd 10 -
166 729 1 984
(d) In the opinion of the directors, the value of the company’s interests in the subsidiary companies are not less than the
amounts at which they are stated in these financial statements.
70
Financial and Shareholder Information
Notes to the Financial Statements [continued]
On 1 February 2008, the company issued 2 138 182 new ordinary shares as performance related consideration payable over
three years to the Shareholders of Amanita Premium Oils Limited provided Zamanita Limited achieves a minimum Net Profit
after Tax of US$1.5 million per annum over three years. The shares were issued to Amanita Premium Oils Limited with full
powers of attorney over any and all rights attached to these shares assigned to the Escrow Agents until the performance
related targets are achieved. The fair value of the shares amounted to K11 760 million (K5 500 per share).
71
Financial and Shareholder Information
Notes to the Financial Statements [continued]
14. Inventories
Group Company
2008 2007 2008 2007
72
Financial and Shareholder Information
Notes to the Financial Statements [continued]
Group Company
2008 2007 2008 2007
(i) The bank overdrafts and the guarantee line are secured by a first floating charge over all the assets of the company and
the subsidiary company. The floating charge ranks pari passu between Barclays Bank Zambia PLC, Citibank Zambia Limited,
Zambia National Commercial Bank PLC and DEG.
(ii) The group has a right of set off for overdraft balances with positive bank balances at group level.
(iii) Legal mortgage over plots 5001 and 5960, Mumbwa road, Lusaka (Zamanita), registered to cover US$20 000 000;
(iv) Floating debenture over all other assets of Zamanita Ltd, registered to cover US$15 000 000;
(v) Corporate guarantee by Zambeef Products PLC in favour of Barclays Bank Zambia PLC, registered to cover US$10 000
000 with respect to Zamanita facilities.
73
Financial and Shareholder Information
Notes to the Financial Statements [continued]
K Million K Million
Authorised 200 120
200 000 000 ordinary shares of K1 each
(2007: 120 000 000 ordinary shares of K1 each)
Issued and fully paid 159 115
158 706 045 ordinary shares of K1 each
(2007: 114 669 450 ordinary shares of K1 each)
(a) At an Annual General Meeting of the company held on 21st December 2007 the company’s authorised share capital was
increased from K120 000 000 to K200 000 000 by the creation of 80 000 000 ordinary shares of K1 each; these shares to
rank pari passu with the existing shares of the company.
(b) During the year the company’s issued share capital was increased by the issue of 31 736 204 ordinary shares of K1 each
at a premium of K5 499 per share and 12 300 391 ordinary shares of K1 each at a premium of K6 899 per share.
In December 2007, 750 000 share options were granted to 49 key employees with an exercise price set at a market price
on 30 September 2007 of K5 500 per share exercisable in 2010. The value of these options has not been determined and
included in the financial statements.
K Million K Million
At 1 October 3 107 3 211
Transfer to issued share capital - (104)
Arising during the year (note 19) 259 378 -
Cost of issue of shares written off (2 518) -
At 30 September 259 967 3 106
74
Financial and Shareholder Information
Notes to the Financial Statements [continued]
20. Interest Bearing Liabilities
Group Company
2008 2007 2008 2007
• The company has a loan facility of US$749 999.98 (original limit US$1 500 000) from Barclays Bank Zambia PLC,
underwritten by Barclays Bank Mauritius Offshore Banking Unit. Interest on the loan is 2.5% above the six-month LIBOR
rate per annum, payable six–monthly in arrears. The principal is repayable in 14 equal bi-annual instalments commencing July
2006.
• The company has a loan facility of US$2 275 000 (original limit US$3 500 000) from Barclays Bank Zambia PLC
under the European Investment Bank line of credit. Interest on the loan is 7% fixed per annum, payable monthly in arrears.
The principal is repayable in 20 equal quarterly instalments commencing January 2007.
• The company has a loan facility of US$684 000 (original limit US$1 520 000) from Barclays Bank Zambia PLC under
the European Investment Bank line of credit. Interest on the loan is 7.5% fixed per annum, payable monthly in arrears. The
principal is repayable in 20 equal quarterly instalments commencing March 2006.
• The company has a loan facility of EUR387 375 (original limit EUR929 700) from Barclays Bank Zambia PLC under
the European Investment Bank line of credit. Interest on the loan is 7% fixed per annum, payable monthly in arrears. The
principal is repayable in 12 equal bi-annual instalments commencing September 2006.
• The company has a loan facility of EUR185 672.29 (original limit EUR232 090) from Barclays Bank Zambia PLC
under the European Investment Bank line of credit. Interest on the loan is 7% fixed per annum, payable monthly in arrears.
The principal is repayable in 10 equal bi-annual instalments commencing October 2007.
• Zamanita Ltd, a subsidiary of the group, has a loan facility of US$1 017 562.50 (Original limit of US$1 206 000) from
Barclays Bank Zambia PLC. Interest on the loan is 2% above 12 month Libor rate per annum, payable monthly in arrears. The
principle is repayable in 32 equal monthly instalments commencing May 2008
The above loans from Barclays Bank Zambia PLC are secured by:
i) Legal mortgage over the Farm No. 4906, Sinazongwe, Choma, registered to cover US$6 200 000; and
ii) Floating debenture over all other assets of the company, registered to cover US$5 500 000 ranking pari passu with
Citibank, Zambia National Commercial Bank and DEG;
(b) DEG Term loan
The company has a loan facility of US$5 000 000 from DEG. Interest on the loan is 2.75% above the six-month USD Libor
rate per annum payable six-monthly in arrears. The principal is repayable in 12 equal bi-annaul instalments commencing April
2009.
The DEG loan is secured by a floating charge/debenture of US$5 000 000 ranking pari passu with Citibank, Barclays Bank
and Zambia National Commercial Bank.
75
Financial and Shareholder Information
Notes to the Financial Statements [continued]
• Nanga Farms PLC, a subsidiary of the group, has a loan facility of US$4 375 000 (Original limit of US$4 375 000)
from Standard Chartered Bank Zambia PLC. Interest on the loan is 2% above 3 month Libor rate per annum, payable
quarterly in arrears. The principle is repayable in seven equal semi-annual installments commencing October 2008.
• Nanga Farms PLC, a subsidiary of the group, has a loan facility of US$1 628 000 (Original limit of US$1 628
000) from Standard Chartered Bank Zambia PLC. Interest on the loan is 2% above 3 month Libor rate per annum, payable
monthly in arrears. The principle is repayable in ten equal semi-annual installments commencing December 2008.
All debt facilities from Standard Chartered Bank Zambia PLC for Nanga Farms PLC are secured by:
i) First Fixed Legal Mortgage over S/D ‘A’ of F123a, R/E of F122a, R/E of F121a and R/E of F603, registered to cover
US$7 600 000;
ii) Fixed & Floating Debenture over farm equipment, registered to cover US$7 600 000;
iii) Assignment of receivables from Zambia Sugar PLC, registered to cover US$7 600 000;
iv) Fixed charge over Debt Service Account & Collection Account, registered to cover US$5 000 000; and
v) Agricultural Charge, registered to cover US$7 600 000.
(a) This finance lease relates to abattoir in Livingstone of a subsidiary company with lease terms of 3 years. The subsid-
iary has options to purchase the equipment for a nominal amount at the conclusion of the lease agreements. The subsidiary’s
obligations under finance leases are secured by the lessors’ title to the leased assets.
76
Financial and Shareholder Information
Notes to the Financial Statements [continued]
(b) The company has a hire purchase facility of EUR320 982 with Freddy Hirsh Zambia Limited. The interest on the
hire purchase is 4.2 fixed per annum. The interest and principal is repayable in 24 equal monthly instalments commencing
December 2006.
(c) The group subsidiary, Masterpork, has a hire purchase facility of EUR121 969 and US$311 503 with Freddy Hirsh
Zambia Ltd. The interest on the hire purchase is 4% fixed per annum for the Euro facility and 6% fixed per annum for the
US$ facility. The interest and principle on the Euro hire purchase facility was repayable in 24 equal monthly installments
commencing September 2006. The interest and principle on the US$ hire purchase facility was repayable in 24 equal
monthly installments commencing June 2007.
(d) The Group’s operations in West Africa has a hire purchase facility of ZAR339 584 with Freddy Hirsch South
Africa Ltd. The interest rate on the hire purchase is 16% fixed per annum. The interest and principle is repayable in 24 equal
monthly installments commencing in December 2008.
77
Financial and Shareholder Information
Notes to the Financial Statements [continued]
22. Deferred Liability
Under the terms of employment, employees are entitled to certain terminal benefits. Provision has been made during
the year towards these benefits. This statutory entitlement, which is lost if the employee is summarily dismissed, be-
comes payable only when the employee retires after attending the age of 55 years and that employee has been employed
for more than ten years. Uncertainty exists over the amount of future outflows due to staff turnover levels.
Group Company
K Million K Million
At 1 October 2007 3 960 588
Provision made during the year 553 24
Payments made during the year (13) (11)
At 30 September 2008 4 500 601
78
Financial and Shareholder Information
Notes to the Financial Statements [continued]
K Million K Million
Capital commitments entered into at the balance sheet date 3 495 5 005
Not contracted for at the balance sheet date 56 623 684
79
Financial and Shareholder Information
Notes to the Financial Statements [continued]
Group Company
The company’s subsidiary company, Zambeef Retailing Limited, has operating leases for its butcheries that are for 12
month periods and renewable at the request of either party. There are no purchase options, contingent rent payments or
restrictions arising on these leases.
Group Company
2008 2007 2008 2007
(b) The group made the following purchases from these related parties:
Group Company
2008 2007 2008 2007
80
Financial and Shareholder Information
Notes to the Financial Statements [continued]
(c) Sales of goods to related parties were made at the company’s usual list prices.
(f) No expense has been recognised in the year for bad or doubtful debts in respect of the amounts owed
by related parties.
Group Company
2008 2007 2008 2007
The remuneration of directors and key executives is determined by the remuneration committee having regard to the
performance of individuals and market trends.
(h) There were no loans to related parties and key management personnel.
81
Financial and Shareholder Information
Notes of the Annual General Meeting
Notice is hereby given that the 14th Annual General Meeting of Zambeef Products PLC will take place at the Taj Pamodzi
Hotel, along Addis Ababa Drive, Lusaka, on Tuesday December 23, 2008 at 10:00 hours.
AGENDA
1. To read the Notice of the Meeting and confirm that a quorum is present.
2. To read and confirm the minutes of the 13th Annual General Meeting held on December 21, 2007.
4. To receive the report of the Directors, the Auditors report and the Financial Statements for the year ended
September 30, 2008. (Resolution 1)
5. To re-appoint Grant Thornton as Auditors for 2008/9 and authorise the Directors to fix their remuneration.
(Resolution 2)
6. To elect Directors to fill any vacancies and confirm the appointment of the following Directors: Aubrey Chibumba,
Nick Wilkinson and Philip Diedericks. (Resolution 3)
7. In terms of the articles, John Rabb and Hillary Duckworth retire but are eligible to offer themselves for re-election.
(Resolution 4)
8. To approve the increase of the authorised Ordinary Shares from 200,000,000 to 400,000,000 and to authorise the
Board of Directors to issue new shares up to this level. (Resolution 5)
9. To approve the issuance of new shares equivalent to US$120m in order to undertake the company’s Capital
Raising Programme. (Resolution 6)
10. To authorise the Directors to make decisions on the utilisation of the proceeds of the Capital Raising Programme
for the acquisition of new assets. (Resolution 7)
11. To approve the allocation of 1,500,000 (one million five hundred thousand) new ordinary shares for Senior
Management Share Option Plan II. (Resolution 8)
12. To approve the registration of all new ordinary shares issued with the Securities Exchange Commission and to
have these new issued ordinary shares listed on the Lusaka Stock Exchange ranking pari passu with the existing issued
ordinary shares. (Resolution 9)
13. To approve the final dividend of K72.46 per share for all shareholders registered at the close of business on 22
December 2008. If approved, the dividends will be paid on or before 31 January 2009. (Resolution 10)
14. Consider any competent business of which due notice has been given.
Note:
A Member is entitled to appoint one or more proxies to attend, speak and vote in his or her stead. A proxy need to be a
member of the company. Proxies must be lodged at the registered office of the company at least 48 hours before the time
fixed for the meeting.
Appendix 1
PROXY FORM
ZAMBEEF PRODUCTS PLC
Proxy Form
I/We,
of
being a member/s of and the registered holder/s of ....................................................... shares in the above named company,
hereby appoint:
of or, in his/her absence, the Chairman of the Company
As my/our proxy to vote for me/us on my/our behalf at the Annual/Extraordinary General Meeting of the Company to
be held on the 23rd day of December 2008
And at any adjournment of that meeting.
* In Favour of/against * In favour * Against
Resolution 1
To receive, approve and adopt annual financial statements for the year ended 30 September
2008.
Resolution 2
Re-appointment of Grant Thornton as Auditors for 2008/9
Resolution 3
Confirm appointment of Mr Aubrey Chibumba, Mr Nick Wilkinson and Mr Philip Diedericks
as directors
Resolution 4
Re-election of directors who retire by rotation of:
• Mr John Rabb
• Mr Hilary Duckworth
Resolution 5
Approve the increase of the Authorised Ordinary Shares from 200 000 000 to 400 000 000
and to authorise the Board of Directors to issue new shares up to this new level.
Resolution 6
Approve the issuance of new shares equivalent to US$120m in order to undertake the
company’s Capital Raising Programme.
Resolution 7
Authorise the Directors to make decisions on the utilisation of the proceeds of the Capital
Raising Programme for the acquisition of new assets
Resolution 8
Approve the allocation of 1,500,000 new ordinary shares for Senior Management Share
Option Plan II
Resolution 9
To approve the registration of all new ordinary shares issued with the Securities Exchange
Commission and to have these new issued ordinary shares listed on the Lusaka Stock
Exchange ranking pari passu with the existing issued ordinary shares
Resolution 10
Approve the final dividend of K72.46 per share for all shareholders registered at the close
of business on 22 December 2008, and if approved, dividends will be paid on or before 31
January 2009
Unless otherwise instructed, the proxy will vote as he/she thinks fit
Signed:
Name:
Date:
Appendix 2
Financial and Shareholder Information
Notes to the Proxy Form
1. A shareholder may insert the name of a proxy or the names of two alternative proxies of his/her choice in the
space provided, with or without deleting “the chairman of the general meeting”. The person whose name stands
first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to
the exclusion of those whose names follow. Any such proxy, who need not be a shareholder of the company,
is entitled to attend, speak and vote on behalf of the shareholder.
2. A proxy is entitled to one vote on a show of hands and, on a poll, one vote for each share held.
A shareholder’s instructions to the proxy must be indicated in the appropriate spaces.
3. If a shareholder does not indicate on this instrument that the proxy is to vote in favour of or against any
resolution or to abstain from voting or gives contradictory instructions, or should any further resolution/s or
any amendment/s which may be properly put before the annual general meeting be proposed, the proxy shall
be entitled to vote as he/she thinks fit.
4. This form of proxy must be received by the company secretary at the registered head office, Plot Number
1164, House Number 1, Nkanchibaya Road, off Addis Ababa Drive, Rhodes Park, Lusaka, by no later than 09:30
on Friday, 19th December, 2008.
5. Documentary evidence establishing the authority of the person signing the proxy in representative capacity must
be attached hereto unless previously recorded by the company’s transfer secretaries.
6. The completion and lodging of this form of proxy will not preclude a shareholder from attending the annual
general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms of
this proxy form.
7. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.
8. The chairman of the meeting may accept or reject any form of proxy, which is completed and/or received other
than in accordance with these notes.
Appendix 2
Notes
Notes