Annual Report
2021
www.zambeefplc.com
OVERVIEW
STRATEGIC
REPORT
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
Contents
Overview
Zambeef at a Glance
History and Key Milestones
Strategies report
Chairman’s Report
Chief Executive Officer’s Report
Key Market Indicators
Divisional Performance
Sustainability Report
Corporate Governance
Corporate Governance
Board of Directors
Report of the Directors
Statement of Directors’ Responsibilities
Financial Statements 30 September 2021
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Financial Statements
Notice of AGM
Proxy form
4
8
10
13
15
16
20
26
36
38
43
46
51
53
55
57
59
61
63
65
156
161
Zambeef Products PLC Annual Report 2021
3
Zambeef at a Glance
Zambeef Products PLC (“Zambeef”) is the largest
integrated cold chain food products and agribusiness
company in Zambia and one of the largest in the
Southern Africa region. Zambeef is quoted on both the
Lusaka Securities Exchange and the AIM market of the
London Stock Exchange.
It is involved in the primary production, processing,
distribution and retailing of beef, chicken, pork, eggs,
dairy, fish, flour, stockfeed and day-old chicks throughout
Zambia and the surrounding region. It further has retail
operations in Nigeria and Ghana.
Zambeef also has one of the largest row cropping
operations in Zambia, growing maize, soybeans and
wheat. Zambeef plants nearly 21,000 hectares (ha)
annually, with most of the resulting crops being used in
the Zambeef animal feed and flour milling businesses.
Our Purpose
Zambeef’s vision is to be one of the most accessible,
affordable and quality cold chain food providers in
the region, delivered through our extensive retail and
distribution network throughout Zambia and West
Africa.
Our Business Model
Our vertically integrated business model provides strong
foundations for growth and:
Underpins margin capture and value add;
Secures supply chain;
Reduces Risk and earnings volatility
§
§
§
4
Zambeef Products PLC Annual Report 2021 Zambeef at a Glance (continued)
DIVISIONS
Retail and Distribution
Zambeef’s products are retailed through 238 outlets (2020:
235) directly to end-consumers, in a value-added form, either
through the Zambeef concession agreement to operate
Shoprite’s in-store butcheries (73 in 2021; 71 in 2020) or
through Zambeef’s own retail and wholesale distribution
network in Zambia (166 in 2021; 165 in 2020).
•
•
•
•
•
•
•
63 Zambeef retail outlets (2020: 65)
41 Zambeef Macros (2020: 39)
30 Novatek retail outlets (2020: 29)
1 Bakery (2020: 1)
31 Zamshu outlets (2020: 31)
41 Shoprite butcheries in Zambia (2020: 39)
31 Shoprite butcheries in West Africa: 25 in Nigeria
and 6 in Ghana (2020: 32)
Zambeef also operates one of the largest transport and
trucking fleets in Zambia, giving Zambeef control over its
logistics and distribution.
Cold Chain Food Production
•
•
The largest processor of beef in Zambia.
Five beef abattoirs (capacity to slaughter 230,000 heads
per annum (p.a.)) and five feedlots located across Zambia
(standing capacity 14,000 heads).
• Meat processing plant with a capacity to process over
100,000 cattle p.a.
• One of the largest chicken processors, producing fresh and
frozen products (capacity 8.8m broilers p.a.) and a table
egg producer (285,000 layers). The Group’s breeding and
hatchery operations also supply large quantities of day-old
broiler chicks (capacity 22.4m p.a.) to small and medium
scale poultry producers.
• One of the largest piggeries and pork processing plants in
Zambia, producing bacon, pork sausages and other meat
products. (capacity to slaughter 75,000 head p.a.)
• Dairy farm with approximately 3,100 cows and a dairy parlour
milking capacity of 2,000 cows per day.
• Dairy processing plant (capacity 120,000 litres/day) to
process milk, lacto and a wide range of value-added
products including yoghurt, drinking yoghurt, cheese,
butter and milk-based juices.
5
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Zambeef at a Glance (continued)
Stock feed (Novatek)
•
leading stockfeed producer
The
in Zambia,
operating two feed mills, in Lusaka and Mpongwe,
with a capacity of 300,000 tonnes p.a.
• Novatek products are certified by the Zambia
Bureau of Standards (ZS 017, ZS 018 and ZS 019)
and the company is the only stockfeed producer in
Zambia with ISO 22,000 Food Safety Management
certification.
• One of the largest row cropping operations in
Zambia.
•
6,099 ha of irrigated and 8,730 ha of rainfed, arable
land.
• Double cropping of irrigated land means Zambeef
plants 20,696 ha p.a.
• Crop production focuses on soyabeans and maize
during summer and wheat during winter.
• Wheat mill with a capacity to mill 25,000 metric
tonnes (mt) of wheat p.a.
•
The largest tannery in Zambia, with a processing
capacity of 130,000 hides p.a.
•
The largest shoe manufacturing plant in Zambia,
with a production capacity of 200,000 pairs p.a.
• One bakery with the capacity to bake 1.2 million
loaves of bread p.a.
Cropping
Other businesses
6
Zambeef Products PLC Annual Report 2021 7
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW History & Key Milestone
History & Key Milestones
1995
Secured
concession to
operate the
butcheries in all
Shoprite stores in
Zambia
2003
Listed on Lusaka
Stock Exchange.
Dr Jacob
Mwanza became
chairman.
2005
Sinazongwe
Abattoir built
2009
Zampalm and
Novatek Animal
Feeds established
Lorem ipsum
1994
Zambeef Products Ltd.
incorporated with 60 sta ,
a rented abattoir & 2
butcheries, delivering 180
beef cattle per month in 3
land rovers
1996
Acquired Huntley
Farm (abattoir
and feedlot)
2004
Acquired
Sinazongwe
Farm, Shoprite
expansion into
Nigeria & Ghana
2008
First equity
capital raise
(Acquired
Masterpork,
Chiawa Farm,
Zamanita Soya crushing
and refining plant)
Entered into JV’s
with RCL Foods
on Zamchick &
Zamhatch
2013
CDC Group PLC acquires
rof ytiuqe feebmaZ %83
US$65million. Put option
settled to RCL Foods for
full interests in Zamchick
& Zamhatch
IDC Zambia acquires
90% of Zampalm ltd for
US$16million
2016
2018
2011
2015
2017
2020
Listed on the London Stock
exchange (AIM). Acquired
Mpongwe Farms
Disposal of Zamanita
Ltd to Cargill for
US$26million
Commissioning of
US$30million hatchery
and stockfeed mill at
Mpongwe Farm
Disposal of
Sinazongwe
Farm for
US$10million
4
Zambeef Products PLC Annual Report 2019
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8
06/12/2019 17:15:07
Zambeef Products PLC Annual Report 2021 Overview
Strategic
report
Corporate
governance
Financial
statements
Feeding a growing region
Zambia
Zambeef Outlets
Zambeef Macros
Novatek
Bakery
Zamshu Outlets
Total Zambeef Outlets
Shoprites
Total Zambia
Nigeria
Shoprites
Master Meats
Outlets
Total Nigeria
Ghana
Shoprites
Total Ghana
2021
2020
63
41
30
1
31
166
41
207
25
0
25
6
6
65
39
29
1
31
165
39
204
25
0
25
7
7
2021
2020
Total
Zambeef
Total
Shoprites
Total Retail
Network
166
72
238
Zambeef Products PLC Annual Report 2019
165
71
236
5
9
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06/12/2019 17:15:08
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CHAIRMAN’S REPORT
in the first half and experienced a
steep appreciation in the second
half of the financial year. Increased
consumer spending, stemming from
government dismantling of domestic
debt and the central bank’s Covid-19
economic stimulus package resulted
in
for our
products.
increased demand
load
The good rainfall season experienced
during the summer increased the
supply of hydroelectric power to
the nation, which helped alleviate
the
situation,
shedding
thus positively impacting on the
financial performance. The strength,
resilience and agility of our business
can be seen through the financial
performance.
The Group generated an operating
profit, including profit from asset
held for sale, of ZMW299.3 million
(USD14.1 million) compared
to
ZMW212.1 million (USD13.1 million)
in
the prior financial year. The
operating profit excluding profit from
asset held for sale operations was
ZMW267.3million (USD12.7 million)
compared
to ZMW210.5 million
(USD13.1 million) achieved in the
previous financial year. Profit before
tax was ZMW203.9 million (USD9.7 million)
compared to a Loss before tax of
ZMW22.7 million
(USD1.4 million)
achieved in the prior financial year.
The Group’s performance in the
face of headwinds illustrates the
strengths of our vertically integrated
business model, the strength of our
brands and a good management
team.
The Board believes the key to
sustainable growth, while mitigating
the effects of dynamic economic
and climate cycles, lies in remaining
committed to its strategic priorities.
As such, the focus remains on
the core businesses that generate
Dear Shareholder,
It is my pleasure to present to you the
Chairman’s Report with respect to
the financial year ended September
30, 2021.
The unprecedented effects of the
global pandemic disrupted all
aspects of life around the world
and our business has not been
exempted. This
invariably meant
difficult trading conditions, balancing
between safeguarding the welfare of
our people and customers against
ensuring the business continuing
to run efficiently and effectively
whilst feeding the nation. The 2021
financial year was characterised by
supply challenges and rising input
costs underpinned by a tough macro
environment. In comparison to the
previous period, the macroeconomic
relatively
fundamentals
stable during the financial year in
the context of events in the second
half of 2020. The local currency
depreciated at a much slower rate
remained
10
sustainable and strong cashflows,
while reducing our debt to release
cash
in higher
returning projects.
for reinvestment
The Economic Environment
The Zambian economy came under
significant pressure in the first half
of the financial year, stemming from
the national debt burden, which
was exacerbated by the impact of
the coronavirus pandemic while the
second half saw the country hold
successful general elections which
resulted in positive market sentiments
and a positive economic outlook.
The Zambian kwacha appreciated
steeply in the last quarter, supported
by foreign participation in the bond
market and a higher copper price on
the international commodity markets.
in
recovery
Despite
the global
economy, the Zambian economic
recovery shall remain gradual, given
the high debt burden, high inflation
and a volatile currency.
and
Inflationary pressures, particularly
food inflation, had resulted in a
significant drop in our customers’
has
income
disposable
continued to put pressure on the
consumers’ share of wallet going
towards food spend. Inflation for the
financial year under review closed at
22.1% compared to 15.7% for the
previous financial year.
Divisional Performance
Review
to
Retail and Cold Chain Food
Products
focus
The Group continued
on
revenue optimisation, asset
utilisation and cost control as pillars
to drive profitability in the combined
retail and cold chain food products
divisions. Revenue grew by 30%
with an operating profit of ZMW
Zambeef Products PLC Annual Report 2021
216.4 Million.
Supply challenges experienced by
the division and rising global food
prices precipitated
input
costs. As a result, the division saw
volumes decline across most protein
categories.
rising
to
The Poultry business remained a
major source of profitable growth for
the group. Management implemented
measures
improve production
efficiencies, which contributed to
improved gross profit margins.
Increased demand for eggs, broilers
and therefore day-old chicks allowed
for revenue growth and improved
profitability.
Stockfeed
Volumes were flat compared to prior
year during the period owing to slow
growth and declines on major product
lines. The shortage of day-old chicks
on the market limited customers
buying of broiler feed while an export
ban imposed by government reduced
export sales. The increase in the
world prices of GMO-free soya beans
and imported materials negatively
impacted cost of sales and therefore
profitability.
Cropping
Zambia had a good summer rainfall
season and as a result, yields for
the summer crop were in line with
expectations, with winter crop yields
exceeding forecasts supported by
better farming practices and reduced
load-shedding. The country delivered
a bumper maize harvest, which
helped to stabilise maize prices.
Outlook
anticipate macro-economic
We
stability to continue over the medium
term supported by improved investor
sentiment, high copper prices and
improved electricity supply. The
kwacha
is expected to maintain
relative stability with minor volatility
towards the end of the 2021 calendar
year. The copper price, which is a
major foreign exchange earner for
the country, is expected to continue
the global economy
holding as
to
from
recover
continues
the
Covid-19 related shocks. The inflation
rate is expected to reduce following
an expected summer crop bumper
harvest from a forecasted La Niña
weather pattern, the appreciation
of the kwacha and restoration of
global supply stability. The Covid-19
pandemic remains a threat to the
country as the country’s vaccination
program continues to move at a slow
pace.
The group remains committed to
delivering value to shareholders and is
well positioned to navigate the turmoil
while capitalising on opportunities.
Strategy
During the year, the board embarked
on a five-year strategy refresh process
for the Group. Although it is difficult
to look ahead with any certainty, I am
happy to report that we now have a
strategy in place that positions the
Group to tackle the challenges ahead
while capitalising on the opportunities
presented and therefore maximise
shareholder value. The strategy
11
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CHAIRMAN’S REPORT (continued)
provides clarity in terms of where
we want to go and what we want to
do, having set realistic targets and
mapped out a journey. The five year
strategy will be underpinned by the
following pillars:
§ Focus and strengthen our core
business by investing in produc-
tion capacity and grow market
share
§ Divestiture of non-core assets to
free up resources
§ Develop a human capital strate-
gy that aligns with business ob-
jectives
§ Strengthen our strategic partner-
ships
Acknowledgement
On behalf of the Company and the
board of directors, I would like to
express my sincere gratitude to
Dr Lawrence Sikutwa, Margaret
John Rabb, David
Mudenda,
Osborne and Professor Enala Mwase
who resigned from the board in the
first half of the year. Their dedication
and contributions to the success of
the business over the years will be
greatly missed.
who joined as group head of Legal
& Company Secretary and Nyangu
Kayamba who also joined as Human
Resources executive. I believe it is a
good addition to the dedicated team
and that we have a good balance of
skills and professionalism.
During the year, we welcomed Katebe
Monica Musonda, Pearson Gowero
and Roman Frenkel to our board of
directors. Their industry experience
and rich diverse backgrounds will be
key in driving the business into the
next phase of the Groups evolution
as a regional food provider.
At senior management level, we said
farewell to Danny Museteka who had
been with the company for 22 years,
his last role being company secretary.
Danny played a vital role in helping
to transform the company over the
years, and I would like to thank him
for his outstanding contribution.
We welcomed Mwansa Mutimushi
thank my
fellow board
I also
members for steering the Group
through this challenging period. To
our management and staff, I express
my gratitude to them for another solid
performance, dedicated efforts and
resilience in the face of challenges.
I am proud of our achievements
to date, and I am excited by the
potential opportunities upon which
we will build our future progress.
Michael Mundashi SC
Chairman
12
Zambeef Products PLC Annual Report 2021 CHIEF EXECUTIVE OFFICER’S REPORT
financial performance. The increase
in raw material input costs, such
as Soya and
imported products,
impacted on production costs. The
resultant increase in food prices to our
customers saw increased demand
for more affordable offerings of our
products as customers traded down.
The load shedding situation improved
towards the end of the calendar
year 2020 following good regional
rains because of
the La Niña
weather pattern, resulting in reduced
generator
fuel expenditure and
improved production efficiencies.
The Group delivered operating profit,
including profit from asset held for
sale, of ZMW299.3 million (USD14.1
million), equating to a growth of
42%
in kwacha terms and 8%
growth in US dollar terms, compared
(USD13.1
with ZMW212.1 million
million) in 2020. The operating profit
excluding profit from asset held for
sale was ZMW267.3million (USD12.6
to ZMW210.5
million) compared
million (USD13.1 million) achieved in
the previous financial year.
Our revenue, including from asset
held for sale, was ZMW5.2 billion
(USD244.1 million) and we achieved
a gross profit of ZMW1.54 million
(USD73.1 million),
respectively
30.8% and 22.8% above the prior
year in kwacha terms, and 0.5%
and 0.1% growth in US dollar terms,
respectively.
The Group’s performance was driven
by growth in the poultry and retail
divisions. Management continued
optimising top line growth through
revenue management initiatives while
the continued cost control measures
helped deliver good operating profit
performance.
The Group
recorded exchange
gains owing to the appreciation of
the local currency. Financing costs
reduced following a reduction
in
debt and the appreciation of the
local currency. Management took
steps to restructure the company’s
debt profile by replacing USD debt
with kwacha debt to match the debt
profile to the revenue profile and thus
reduce foreign exchange risk, which
should help provide predictability to
the bottom line going forward. The
USD to ZMW debt mix now stands
at 15%:85% compared to 80%:20%
at the end of the previous financial
year. The Group derived a significant
the central bank’s
benefit
Covid-19 relief fund with favourable
interest rates.
from
and
diversified
vertically
Our
integrated business with good
brands, supportive partners and
an experienced management team
helped deliver encouraging results
during a challenging year.
focus
remains
Strategic focus
to
Our strategic
optimise our asset utilisation and
returns. We
maximise
remain
committed
to our strategy of
focussing on our core businesses
in which we strive to be the best in
class. The continued deleveraging
and divestiture of non-core assets
will enable us to free up cash to
invest into our core businesses and
therefore maximise
shareholder
value.
Retail and Cold Chain Food
Products (CCFP)
The year saw traditionally high-
volume sales
lines come under
pressure amidst a high inflationary
environment and reduced customer
spending. Despite high demand
in our key product lines, supply
constraints negatively
impacted
volume growth. Revenue growth was
mainly driven by pricing on traditional
13
cost
efficiency
operating
Overview
Despite the rising input costs and
rising global food prices, and a
environment
difficult
resulting from the 2020 economic
and Covid-19 pandemic
related
uncertainties, the positive full year
performance has been driven by
for
sustained consumer demand
our products,
reductions
improvements
and
especially in the poultry business.
The macroeconomic fundamentals
remained
relatively stable during
the financial year in the context
of the previous comparative year.
The local currency depreciated at a
much slower rate in the first half and
experienced a steep appreciation
in the second half of the financial
year. Increased consumer spending
stemming
the Covid-19
economic stimulus package resulted
in
for our
products. The good rainfall season
helped alleviate load shedding and
therefore positively impacted on the
increased demand
from
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CHIEF EXECUTIVE OFFICER’S REPORT (continued)
product categories and aided by
sales volume growth of
traded
goods and affordable alternative
food categories. Shoprite in-store
butcheries were a source of revenue
growth as they proved relatively more
resilient to inflationary pressures.
Sales volumes came under pressure
on the back of supply constraints
due to constrained livestock pro-
ducer profitability levels. Significant
producer price increases were nec-
essary during the period for livestock
producers to increase output. The
price increases that were necessary
to stimulate supply resulted in cus-
tomers moving towards more af-
fordable protein offerings. The poul-
try division was a major contributor
to revenue growth due to improved
efficiencies and high demand for it as
a relatively affordable protein source,
in the form of chicken and eggs.
Despite the challenges, the Retail
and Cold Chain Food Products busi-
ness registered a healthy revenue
growth of 30% above the prior year.
Management employed a revenue
optimisation strategy,
responding
quickly to the evolving volatile oper-
ating environment.
Retail and Cold Chain Food Products
delivered an operating profit of ZMW
216.4 million in kwacha terms and
USD10.3 million
in dollar terms.
Operational efficiency improvements
and overhead spend discipline en-
sured translation of the top line
growth to the bottom-line. Reduced
load shedding helped reduce fuel
costs of our electricity generators,
which further contributed to the in-
creased profitability, particularly in
the second quarter.
Stockfeed
Revenue for the division was 31%
above prior year mainly due to price,
as volumes remained flat on prior
year. The demand for poultry feed
reduced following a day-old chick
supply shortage across the market.
feed
An export ban on animal
from Zambia resulted in a further
slowdown of production volumes.
However, fish feed continued to
register exponential growth following
the sector specific lifting of the fish
feed export ban and government’s
efforts to make Zambia a regional
player in the aquaculture sector. The
depreciation of the kwacha to the
USD and ZAR negatively impacted
foreign currency denominated costs.
The high soya beans prices also
negatively impacted on the cost of
sales.
Cropping
Revenue in USD terms increased by
10% due to a favourable winter crop
price and sale of the soya summer
crop. However, operating profit
decreased in USD terms due to price
increases
input costs. Zambia
experienced a good rainfall season
and the yield of the summer crop
was in line with expectations with the
yield of the winter crop exceeding
expectations.
in
Outlook
The macroeconomic environment
is expected to remain stable with
indicators expected to adjust to
a more favourable position. The
successful
holding of general
elections on 12 August 2021 and
the resultant change in government
and peaceful transition has brought
investor confidence and optimism.
This triggered a sharp appreciation
foreign direct
of the kwacha as foreign interest in
intensified
government securities
and
investment
prospects improved. This coupled with
high copper prices, a potential IMF
deal and continued low load shedding
levels due to another La Niña weather
pattern this summer, has improved
the country’s economic outlook. We
expect this to translate into a slowdown
in inflation, reduced interest rates and
thus increased economic activity and a
restoration of macroeconomic stability.
Despite the macro-economic head-
winds and uncertainty caused by
the Covid-19 pandemic, Zambeef’s
underlying performance has been
and is expected to remain resilient,
improving as the economic situa-
tion improves. Our brands help us
maintain customer loyalty while the
vertically integrated business model
helps to secure both supply and a
market for our products. The future
recovery in the economy and strong
management have positioned us well
for an improved profitability in the
coming years.
Our deleveraging strategy and debt
profile reorganisation will help relieve
exchange losses and financing cost
pressures to the bottom line, which
will increase free cash flow to enable
us to invest in the future.
We remain committed to implement-
ing and enforcing Covid-19 proto-
cols in our outlets while driving the
vaccination of all our employees. We
believe that a healthy, sustainable
and profitable growth trend can only
be achieved when we work together
with our partners, communities and
customers to curb infections through
the observation and implementation
of safety protocols.
14
Zambeef Products PLC Annual Report 2021
Key Market Indicators
Reporting Period Monthly Averaged Comparatives
2021
2020
Change
Economy
ROE ZMW/USD
Annual Inflation rate
Copper
Commodities
Maize
Soya Beans
SE Cake
Wheat
Input Prices
Maize Bran
Broiler Grower
Pig Grower
Layer feed
Day-old chick
Selling Prices
Beef Mixed cut
Chicken Frozen
Chicken Live Market
Egg Tray
ZMW
%
$/Ton
$/ton
$/ton
$/ton
$/Ton
K/Ton
K/50kg
K/50Kg
K/50kg
K/DOC
K/Kg
K/Kg
K/Chicken
K/tray of 30
Eggs
21.1
22.1
16.2
15.7
9,041
6,610
150
400
416
440
252
382
403
415
1,690
1,190
367
317
273
11.0
44.4
34.6
80
48.8
310
251
231
6.8
37.7
28.2
52
35.6
30%
41%
37%
-40%
5%
3%
6%
42%
18%
26%
18%
62%
18%
23%
54%
37%
15
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
DIVISIONAL PERFORMANCE
Table 1 (ZMW) and Table 2 (USD) below provide a summary of the consolidated performance of the key business divisions
reported at an operating profit level.
Table 1: Divisional financial summary in ZMW’000
ZMW
Division
Total
Revenue
Gross Profit
Overheads
Operating Profit
2021
ZMW’000
2020
ZMW’000
2021
ZMW’000
2020
ZMW’000
2021
ZMW’000
2020
ZMW’000
2021
ZMW’000
2020
ZMW’000
Retailing
2,906,466
2,396,313
271,261
243,377
(338,901)
(322,041)
(67,640)
(78,664)
CCFP
2,054,232
1,516,371
556,186
401,276
(272,126)
(213,054)
284,060
188,222
Less Interco
(1,705,769)
(1,399,926)
Combined
Retail &
CCFP
3,254,929
2,512,758
827,447
644,653
(611,027)
(535,095)
216,420
109,558
Stock Feed
1,747,742
1,331,965
300,436
255,888
(153,716)
(129,539)
146,720
126,349
Cropping
Others
Total
Less: Intra/
Inter Group
Sales
Central
Overhead
754,385
343,391
651,560
272,254
266,405
(192,845)
(160,618)
203,609
70,579
48,676
(31,985)
(23,450)
79,409
38,594
105,787
25,226
6,100,447
4,699,892
1,470,716
1,215,622
(989,573)
(848,702)
481,143
366,920
(1,126,096)
(824,788)
(213,813)
(156,389)
(213,813)
(156,389)
16
Zambeef Products PLC Annual Report 2021
Divisional performance (continued)
Group Total
4,974,351
Table 2: Divisional financial summary in USD’000
3,875,104
1,470,716
1,215,622 (1,203,386)
(1,005,091)
267,330
210,531
USD
Division
Total
Retailing
CCFP
Less Interco
Combined
Retail &
CCFP
Stock Feed
Cropping
Others
Total
Less: Intra/
Inter Group
Sales
Central
Overhead
Revenue
Gross Profit
Overheads
Operating Profit
2021
USD’000
2020
USD’000
2021
USD’000
2020
USD’000
2021
USD’000
2020
USD’000
2021
USD’000
2020
USD’000
137,617
97,265
(80,766)
148,195
93,777
(86,576)
12,844
26,335
-
15,051
24,816
-
(16,046)
(12,885)
-
(19,916)
(13,176)
-
(3,203)
13,450
-
(4,865)
11,640
154,116
155,396
39,178
39,867
(28,931)
(33,092)
10,247
6,775
82,753
35,719
16,259
82,373
40,294
12,592
288,847
290,655
14,225
12,891
3,342
69,636
15,825
16,475
3,010
(7,278)
(9,131)
(1,514)
(8,011)
(9,933)
(1,450)
6,947
3,760
1,827
7,814
6,542
1,560
75,178
(46,855)
(52,486)
22,781
22,691
(53,319)
(51,007)
(10,124)
(9,672)
(10,124)
(9,672)
Group Total
235,528
239,648
69,636
75,178
(56,979)
(62,158)
12,658
13,020
17
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Divisional performance Summary (continued)
Taking the performance of each of our
key business areas in turn:
Retail and Cold Chain Food
Products
The combined Retail and Cold Chain
Food Products divisions generated
an EBIT margin of 6.7% which
increased by 229 basis points from the
previous financial year to ZMW 216.4
million (2020: ZMW 109.6 million) in
kwacha terms and grew impressively
by 51.2% to USD 10.3 million (2020:
USD 6.7 million) in dollar terms.
The performance was underpinned
by revenue optimisation and cost
control in Poultry products supported
the
increased demand given
by
relative affordability of Chicken
and Egg as a source of protein.
Cost pressure arising from supply
constraints negatively impacted on
the profitability in Pork, Beef and Milk.
West Africa Retail
Our Nigerian business was impacted
by the sporadic protests related to
the Shoprite announcement of the
intention to pull out of the Nigeria
market and the EndSARS protests.
In addition, the business experienced
supply challenges across its major
these
product
challenges, revenue
increased by
14% to USD 15.4 million (2020: USD
13.5 million) mainly due to pricing and
exchange translational effects with
dollar revenue increasing by 14%.
However, operating profit declined
by 52% in dollar terms due to rising
costs of inputs.
lines. Despite all
Stockfeed
Sales volumes were flat on prior year
mainly due to declines on key volume
categories. Shortage of day-old
chicks slowed the growth of broiler
feed while an export ban impacted
export sales.
18
Revenue grew by 31% in kwacha
terms and 0.5%
in USD terms,
while the operating profit grew by
16% to ZMW 146.7 million (2020:
ZMW 126 million) or declined by 11%
to USD 6.9 million (2020: USD 7.8
million) in dollar terms. Production
costs was impacted by rising costs
of inputs, particularly the Soya and
imported raw materials.
Cropping
The Cropping business is key to
Zambeef, providing
raw material
inputs for value added processing
within the Group and serving as a
currency hedge by being able to
generate USD cash flow.
Revenue increased by 10% in USD
terms to USD 44.3 million including
from asset held for sale (2020: USD
40.3 million) which translated to a
43.4% growth in revenue to ZMW
935.9 million
(2020: ZMW 651.5
million) when analysed in kwacha
terms. Gross profit
increased by
30% to ZMW 345 million compared
to the previous corresponding period
(2020: ZMW 266 million) in kwacha
terms despite a 1% reduction in USD
terms to USD 16.3 million (2020: USD
16.5 million). The division observed
an increase in overheads of 47% in
kwacha terms and 12.7% in USD as
a result of increments in repair and
maintenance costs during the period
under review.
Zambia experienced a good rainfall
season and the summer harvest
line with
to be
is expected
expectations. However, the price of
maize is expected to be lower than
the prior year following the expected
bumper harvest predicted for Zambia.
in
Other businesses
Total revenue from the Group’s other
business units increased by 68.7% to
ZMW 343 million (2020: ZMW 203.6
million) mainly due to growth in
both the milling and leather to shoe
businesses. This translated to gross
profit growth of 45% in kwacha
terms due to cost pressures in Milling
arising from the increase in price of
wheat in kwacha terms following the
depreciation of the currency.
leather
to shoe business
The
turnaround strategy paid off as the
division saw an increase in demand
for its products, particularly school
the opening of
following
shoes,
related
schools after Covid-19
closures.
focus
Management
has been to optimise production
efficiencies, control overhead costs,
innovation and look for new market
opportunities for its products.
Walter Roodt
Chief Executive Officer
30 November 2021
Zambeef Products PLC Annual Report 2021 19
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Sustainability Report
is
to
committed
‘triple bottom
a
Zambeef
line’
sustainable
approach to its operations in order
to help deliver a positive economic,
social, and environmental impact. We
believe that economic sustainability
is not simply our traditional corporate
capital, but is also a measure of
how the business impacts on the
economic environment, underpinned
by our commitment to environmental
and social sustainability.
Zambeef is committed to provide
a safe and healthy workplace for
its employees and contractors,
protecting
the environment and
being a responsible corporate citizen
in the communities where we have
a presence. This commitment is
enshrined in our Environmental &
Social and Health, Safety & Welfare
Policies.
to
committed
has
Zambeef
the
set
principles
upholding
International Finance
the
in
out
Performance
Corporation
Standards
(PS) and World Bank
Group Environmental, Health, and
Safety Guidelines on environmental
and social sustainability.
(IFC)
The Board of Directors provides
oversight through its Environmental
and Social Committee. Through
this Committee, the Board provides
strategic advice and guidance
regarding systemic and strategic
issues.
environmental and social
The Committee ensures that the
Company has adequate and robust
systems
for monitoring
the environmental, health & safety
and
and
social management
in accordance with
performance,
applicable
legislation and good
International Industry Practice.
in place
Zambeef has an environmental and
social action plan (ESAP) that has
been agreed on with its international
development finance partners
to
help ensure continuous performance
improvement at the corporate and
operational level.
20
The Company has dedicated a
separate central department, of ten
employees, to environmental and
social compliance and improvements
in operational Divisions. In addition
to the environmental and social
twenty-
department,
nine
to
employees dedicated
environmental and social activities at
an operational level.
there are
Local capital markets
ü A significant percentage of the
Group’s shareholding
(8.13%)
is owned by local institutional
investors and pension funds,
including the National Pension
Scheme Authority which means
every working Zambian has a
stake in the company.
Economic performance
Export earnings
Zambeef is a significant contributor
to the country’s economic activities.
Employment
ü The Group is a member of the
Zambia Development Agency’s
elite Million Dollar Club of
leading exporters.
ü Zambeef continues to be one
of the largest employers in the
country, with 6,795 staff, 14.33
% of who are females.
ü Three of the five members of the
Executive Team are female.
ü For the FYE 30 September
2021,
recorded
the Group
foreign exchange export income
of over USD1.7 Million, while
total Group USD-denominated
revenues were USD 235.5
Million.
ü Over 99.5% of employees are
Skills development
Zambian.
ü The Group’s cropping division
provides significant employment
to rural communities, where
poverty levels are higher than in
urban areas.
ü Most of Zambeef’s raw material
suppliers are located and provide
employment to communities in
rural areas.
Taxes
The Group is a significant contributor
to government revenues. In the year
under review, it contributed in excess
of ZMW190m in various taxes which
include:-
ü Value Added Tax
ü Pay As You Earn
ü Customs Duties
ü Property Transfer Tax
ü NAPSA
ü Workers Compensation
ü The Group is fully committed
to developing and training its
employees at all levels.
ü Specific and specialised train-
ing in food safety, occupational
health and safety, safe handling
of hazardous materials is offered
to employees.
ü The
in
Group’s
continual
reinvestment
human
resources and a deliberate focus
on diversity and inclusion has
resulted in many senior positions
being held by Zambian females.
Food security
ü Zambeef plays a pivotal role
in the national food security
of Zambia, ensuring that the
country has sufficient capacity
to feed its growing population
as well as a surplus for export
feed neighbouring
to help
countries.
company
The
produced over 104,743 metric
tons of grains (43,318 tons of
Zambeef Products PLC Annual Report 2021 Social performance
Zambeef continues to align its social investments to the United Nations Sustainable Development Goals.
We work closely with small and medium scale farmers;
• They supply in beef, chicken, pork and milk raw materials to our Cold Chain Food
Divisions
• They supply soya beans and maize to our stockfeed operations
• We render support to the vulnerable (hospices, hospitals, orphanages and care
homes) through donation of food products produced by the company
• We fund and support public healthcare institutions and company owned medical
clinics
• The company supports community/government schools located within the
communities in which it operates
• The company has constructed new class room blocks and rehabilitated public-
school infrastructure
wheat, 36,471 tons of soya
beans and 24,954 tons of maize)
in the year under review.
ü The company also produced
31,272 tons of maize silage and
3,790 tons of rhodes grass for
its livestock.
ü 8.26 million broiler chickens
were processed.
ü 55.60 million
eggs were
produced in the financial year.
ü 19.22-million-day old broiler
chicks were produced from the
hatchery.
ü 65,184 beef cattle, 35,103 goats
and 462 sheep were processed
during the year.
ü 45,692 pigs were processed
during the year.
Food Quality and Safety
The company continued making
progress
improvement of
the quality and safety of foods it
manufactures and offers for sale to
the public.
in the
Customer Care Feedback: The
dedicated customer phone care line
and email service have been widely
publicised, on product packaging
trading premises.
and also
Giving our customers opportunities
to engage with the business
is
an
important component of our
stakeholder management program.
in
We receive valuable feedback about
our products and quality of service,
and that helps us to improve both the
products and services we offer.
In FY19, 419 customers used these
feedback platforms to contact the
business;
increased
the number
to 778 in FY20, and was at 853 by
the end of FY21. This progression
shows that customers are finding the
engagement process a useful tool for
communicating with the business.
Food Safety Management System
(FSMS): The FSMS ensures that
the business has a continuous
improvement program on the quality
and safety of the food it produces
21
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Sustainability Report (continued)
and offers for sale to the public.
In the year under review, the Chicken
Processing Plant, Dairy Processing
Plant and Masterpork Factory
obtained
ISO 22000 certification;
this was in addition to the already
certified the Novatek Feeds Lusaka
Plant which was certified in 2015.
in Mpongwe
The Novatek Plant
has undergone a Stage 2 Audit and
should receive certification by the
second quarter of FY22.
Focus in the new financial year
is on the ISO 22,000 certification
of the Flour Mill, Zamhatch, Beef
processing operation. We continue
implementation of a Hazard
the
Analysis Critical Control Point
certification scheme in our Retailing
Division. The ambition of the Group
is to have the entire internal food
supply chain to be fully certified in
the near future.
Inclusive business model: Zambeef
inclusive and all-
operates an
embracing
model,
business
consequently, it continues to source
the bulk of its raw materials from
rural communities in Zambia. 100%
of the beef processed and 83% of
the pork handled by Masterpork
was sourced and supplied from
small-scale and emerging farmers.
We engaged out-growers, who
supply 65% of the broiler chickens
processed by Zamchick. 92% of the
maize and 54% of the soya beans
used at Novatek Animal Feeds were
externally supplied, predominantly
by small-scale rural farmers.
We believe that a strong linkage to rural
based suppliers helps fight poverty
‘economically
in these otherwise
excluded’ communities, meeting the
aspirations of UN SDG 1, of ‘ending
poverty in all its forms everywhere’.
In the FY under review, the company
bought grain and
livestock from
52,930 emerging, small-scale and
22
medium-scale farmers across the
country.
Community engagement: Zambeef
continues engaging with neighbouring
communities in the areas where we
operate. Consultations are held
on a regular basis and every time
developmental projects are initiated
at company sites. Zambeef fully
complies with good
international
industry practice in all its land related
engagements.
and
care
Support to vulnerable communities/
groups through foodstuff donations:
The company renders support to
the vulnerable (hospices, hospitals,
orphanages
homes)
foodstuffs.
through donations of
There are currently 22 institutions
hosting vulnerable people which
the company supports
through
the food supply program. A total
of US$250,000 was budgeted for
this support in the FY under review.
This gesture by the company aligns
strongly with UN SDG 2, whose main
aspiration is to ‘end hunger, achieve
food security and improved nutrition’
Additional support, in response to the
Covid-19 pandemic, was rendered
to local authorities, public schools
and
communities.
The support was mostly in the form
of hygiene stations, sanitiser and
awareness programs.
neighbouring
Support to educational and healthcare
institutions: Zambeef continues to
fund educational and healthcare
institutions in addition to Mpongwe
School and medical clinic, wholly
owned by the company and whose
teachers, teaching aids, healthcare
workers, equipment and facilities
are fully funded by the company. In
the year under review, the Mpongwe
expenses amounted to US$175,000.
government
The company also supports community
and
and
healthcare institutions located in the
areas where it operates.
schools
These company activities align with
UN SDG 3 and 4, whose aspirations
are to ‘ensure healthy lives and
promote well-being for all at all ages’
and ‘ensure inclusive and equitable
quality education and promote
lifelong learning opportunities for all’,
respectively.
Zambeef also supports a number of
traditional ceremonies and sporting
activities across the country.
Environmental performance
Zambeef continues to work towards
good international industry practice by
implementing a process of continual
improvement in environmental and
social management.
During the FY under review, the
company submitted four Environmental
Zambeef Products PLC Annual Report 2021 Sustainability Report (continued)
Project Briefs (EPB) to the Zambia Environmental Management Agency (ZEMA) as governed by Statutory Instrument No. 28 of
1997 ‘Environmental Impact Assessments Regulations’ read together with the Environmental Management Act (EMA) No. 12 of
2011. This practice also fulfils the requirements of IFC PS 1: ‘’Assessment and Management of Environmental and Social Risks
and Impacts.”
The under-listed projects were approved by the ZEMA Board;
Overview
1. Establishment of a composting site at Kalundu Dairy Farm in Chisamba District, Central Province.
Strategic
report
Corporate
governance
Financial
statements
2. Construction of one new agro-chemical storage facility at Kampemba Farm in Mpongwe District of the Copperbelt Province.
3.
4.
Installation of 25,000 litre above ground diesel tank at Kitwe Processing, Copperbelt Province.
Building a nation
Installation of three 22,500 litre above ground diesel tanks at Sinazongwe Feedlot in Sinazongwe District of Southern Province.
BUILDING A NATION
23
Zambeef Products PLC Annual Report 2019
23
Zambeef Annual Report 2019_2_Damaged.indd 23
06/12/2019 17:15:29
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW 24
Zambeef Products PLC Annual Report 2021 Corporate
Governance
25
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CORPORATE GOVERNANCE STATEMENT
does not apply to companies floated
on the AIM of the London Stock
Exchange, the market on which
Zambeef is listed. For the purposes
of being listed on AIM, the Company
has agreed to maintain standards of
corporate governance recommended
by AIM. In this regard, and bearing
in mind the size and scale of the
operations of the Company, the
Company has adopted the QCA
Code as the basis of its corporate
governance standards.
On LuSE, Zambeef Products Plc.
has established a formal governance
framework by way of adopting the
LuSE code as well as comprehensive
company policies and guidelines,
audit and assurance procedures
which
compliance with
applicable laws and regulation as well
as recognized codes of good practice.
ensure
of
report
an
therefore aims
overview
to
This
provide
the
Company’s governance practices.
to
is comprehensive, albeit
It
avoid duplicity of information, the
other relevant information will be
contained in the other reports and
financial statements that form part of
the Annual Report for the year.
CORPORATE GOVERNANCE IN
ACTION
Company’s
corporate
The
governance practices
are put
together in the Corporate Governance
Handbook that is subject to review
by the Board from time to time. The
last such review was in September
2021. The Handbook addresses the
various areas of governance and
covers the following aspects:
§ Share Dealing Code
§ Disclosure Policy
§ AIM Rules Compliance Policy
§
LuSE Listing Rules Compliance
Policy
§ Anti-Corruption and Bribery
Policy
Incident
including
reporting and whistleblowing
§ Social Media Policy
§ Related Party
Transactions
Policy
§ Delegation of Authority
§ Board Charter
§
§
§
the
Terms of Reference
Remuneration and Succession
Committee
for
Terms of Reference for the Audit
and Risk Committee
Terms of Reference
Environmental
and
Committee
for
the
Social
§ Memorandum
on
Inside
Information and;
§ Group Code of Ethics
THE BOARD OF DIRECTORS
The Company has a unitary board of
directors, which at the start of the year
under review, comprised 11 directors
but later reduced to 9, retaining a
number within that required per its
Articles of Association, yet balancing
the requisite business acumen and
skills pertinent to the business. Of
the 9 Directors, 7 are Non-Executive
Directors, and 2 are Executive
Directors. 5 Non-Executive Directors
are considered independent by the
Board, in terms of the guidelines
prescribed in the QCA Code and the
LuSE Corporate Governance Listing
Rules.
The Board is responsible for the
performance and direction of the
Company, through the establishment
of strategic objectives and key
policies, as well as approving major
business decisions, in accordance
with its charter.
The Board believes that its overall
composition
is appropriate, with
no individual or group dominating
the decision-making process, and
with a good balance of knowledge,
experience and independence. The
role of the Chairman is separate
from that of the Chief Executive
Officer (CEO) and considered to be
independent.
New appointments to the board
are carried out in a transparent
Zambeef Products Plc (“Zambeef” or
the “Company”) remains committed
to maintaining, promoting and
achieving the highest standards of
corporate governance and corporate
citizenship by adhering to the relevant
codes of best practice, and the
principles of fairness, accountability,
responsibility,
and
integrity.
transparency
recognising
The company strives for continuous
that
improvement,
the achievement of a
long-term
sustainable business is dependent
on stable, well-functioning and well-
governed
social,
economic and governance practices.
environmental,
The Board has developed a
Corporate Governance Code that
complies with the Lusaka Securities
Corporate
Exchange
(LuSE)
the
Governance Code. Further,
Company has formally adopted the
Quoted Companies Alliance (QCA)
Corporate Governance Code (“QCA
Code”) on a ‘comply or explain’
basis, as required by the AIM Rules
for Companies.
FRAMEWORK
As a company listed on exchanges in
Lusaka and London, we are required
to comply with LuSE and UK specific
corporate governance codes. The
UK Corporate Governance Code
26
Zambeef Products PLC Annual Report 2021 Corporate Governance (continued)
and
manner and are made in accordance
with the recommendations of the
Remuneration
Succession
Committee and, following approval
of
to
the board, are subject
confirmation by shareholders at the
Annual General Meeting.
Details of the current Directors, their
roles and background are available
on the Company’s website at www.
zambeefplc.com.
RESPONSIBILITIES OF THE
BOARD
reviewed during
The Board responsibilities are set
out by a Board Charter, which
requires that there is an appropriate
balance of power and authority
on the board. The Board Charter
was
the year
under review, the board satisfied
its responsibilities
in compliance
therewith. The Board is responsible
for the overall stewardship of the
Company. The Board’s role consists
fundamental elements:
of
oversight.
decision-making
and
two
function
The decision-making
is
exercised through the formulation
with management of fundamental
policies and strategic goals and
the approval of certain significant
actions. The oversight
function
concerns the review of management
decisions, the adequacy of systems
and controls and the implementation
of policies. In performing its role, the
Board makes major policy decisions,
participates in strategic planning,
delegates to management authority
and responsibility
for day-to-day
affairs and reviews management’s
performance and effectiveness.
CHAIRMAN AND CEO ROLES
The roles of the Chairman and CEO
are performed by separate persons,
with the Chairman being responsible
for;
•
•
•
Providing leadership to the Board
in relation to all Board Matters;
Representing the views of the
Board to the public;
Acting as a conduit between the
Board and being the primary
point of contact between the
Board and the Chief Executive
Officer;
Board
Principles of good governance are
embedded in the way the Board; its
sub-committee and the executive
committee operates their business.
The
integrity,
principles of good governance
its
and accountability throughout
activities and each director brings
independence of character and
judgment to their role.
applies
The Board Composition
Director
Michael Mundashi SC
Walter Roodt
Frank Braeken
Roman Frenkel
Pearson Gowero
Yollard Kachinda
Jonathan Kirby
Faith Mukutu
Title
Chairman
Executive Director (CEO)
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-executive Director
Executive Director
Katebe Monica Musonda
Independent Non-Executive
• Overseeing the Board agenda
all Board
conducting
and
meetings;
• Overseeing
conducting
and
Annual General Meeting (AGM)
and other shareholder meetings
and;
•
Keeping the Board informed of
all major project proposals by
way of specific reports;
Date of Appointment
04/09/2019
29/03/2019
30/06/2018
01/03/2021
01/03/2021
18/04/2017
03/08/2017
04/09/2019
01/03/2021
27
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Corporate Governance (continued)
As at the date of the report, the Board comprised of 9 Directors, 7 are Non-Executive Directors, and 2 are Executive
Directors. The seven Directors are considered by the company to be independent in character and judgement and free
from any business or other relations that could materially interfere with the exercise of their judgement. Brief curricula
vitae of the directors appear on 36-37 of this report.
The Board is satisfied that all the Directors have sufficient time to devote to their roles and that it is not placing undue
reliance on key individuals.
MEETINGS OF THE BOARD
The board has four regular meetings each year and the company’s Articles of Association makes provision for decisions
to be taken between meetings by way of written resolutions, when required. During the year under review, four meetings
were held and attendance was as shown by table below;
DIRECTORS’ NAME
M Mundashi SC
W Roodt
F Braeken
R Frenkel
P Gowero
Y Kachinda
J Kirby
M Mudenda
F Mukutu
K M Musonda
E Mwase
D Osborne
J Rabb
L Sikutwa
BOARD
MEETING
(25/11/20)
BOARD
MEETING
(15/02/2021)
BOARD
MEETING
(9/06/2021)
BOARD
MEETING
(15/09/21)
TOTAL
MEETINGS
ATTENDED
TOTAL
MEETINGS
HELD
BA
BA
BA
BA
BA
BA
RS
RS
RS
RS
RS
RS
RS
RS
RS
RS
RS
4
4
4
2
2
4
4
2
4
2
2
2
2
1
4
4
4
4
4
4
4
4
4
4
4
4
4
4
Key
X
BA
RS
Attended
Absent
Before Appointment
Resigned
28
Zambeef Products PLC Annual Report 2021 Corporate Governance (continued)
BOARD COMMITTEES
in
assist
To
responsibilities,
established three committees:
its
the Board has
exercising
•
•
•
the Audit and Risk Committee
the Remuneration and Succession
Committee
the Environmental and Social
Governance Committee.
The board committees operate
under approved mandates and
terms of reference, which define
their functions and responsibilities.
Through the Company’s management
committee, management meets
and serves to assist the board to
co-ordinate, guide and monitor
the management and performance
of the Company. Following each
meeting, the committee chair reports
to the Board on the committee’s
activities,
such
recommendations as are deemed
appropriate in the circumstances.
Minutes of committee meetings are
made available to all directors on a
timely basis. Non-executive directors
actively participate in all committees.
and makes
1.
Audit and Risk Committee
The Board approved the membership
to the Audit Committee of the long
outstanding
independent
and
advisor and co-opted member -
Hastings Mtine in September 2021.
(QCA Code principle 6: He has
extensive experience as a Chartered
Accountant in the fields of financial
reporting, external audit,
internal
audit, corporate governance and
risk management gained in public
practice and on various corporate
boards. He is a former Senior Partner
for KPMG Zambia. He provides a
detailed review and advisory service
to the Audit Committee across each
of these areas.
Responsibilities:
to ensure
• The primary role of the Audit
the
is
Committee
integrity of the financial reporting
and audit process,
including
review of the interim and annual
financial statements before they
are submitted to the board for
final approval.
• To ensure that a sound risk
internal
and
management
control system
is maintained
and reviewing the system for
monitoring
compliance with
applicable laws and regulations.
• To give due consideration and
review of corporate governance
in accordance with
matters
relevant frameworks including the
LuSE Corporate
Governance Code and the QCA
Code.
• Monitor and review the reports
and function of the internal audit
department, in line with its own
charter, which requires systematic
evaluation of the effectiveness
risk management, control,
of
compliance and governance
processes for the Group.
• Monitor and review the reports
of the external auditors and their
performance.
• At least once a year, the members
of the committee should meet the
auditors without
external
the presence of any Executive
Director.
• The committee should also con-
sider and make recommendations
to the Board, to be put to share-
holders for approval at the Annual
General Meeting, as regards the
appointment and/or
reappoint-
ment of the company’s external
auditor.
• Monitor the ethical conduct of
the Company, its executives and
senior officials.
Committee Meeting Attendance Schedule
NAME
CATERGORY OF
DIRECTOR
Jonathan Kirby/
Lawrence Sikutwa**
Chair: INED
Frank Braeken
Pearson Gowero
Roman Frenkel
NED
INED
NED
Hastings Mtine
Committee Member
Margaret Mudenda
David Osborne
INED
NED
23/11/2020
16/02/2021
08/06/2021
14/09/2021
**
BA
BA
BA
BA
BA
BA
BA
BA
RS
RS
RS
RS
Key
BA
**
RS
Attendance
Before Appointment
Retired as Chairman of the Audit Committee on 31/12/2020
Resigned
29
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Corporate Governance (continued)
2.
Remuneration and
Succession Committee
to fill Board vacancies as and
when they arise.
committee
the
provided
remuneration
The
oversight over
and compensation for senior
management to retain and motivate
staff to perform at the level of the
quality required. The committee
is chaired by an independent non-
executive director.
Chairman – John Rabb*/Katebe
Monica Musonda**
(John Rabb
resigned from the Board on 28
February, 2021. Katebe Monica
Musonda took over as Chair of the
committee as of 1 March, 2021)
Members
- Yollard Kachinda,
Jonathan Kirby, Margaret Mudenda*
and Frank Braeken.
(Margaret Mudenda resigned from
the Board on 28 February, 2021)
Responsibilities:
• Regularly review the structure,
knowledge, experience
size,
and diversity of the Board, as
well as
the sub-committees
of the Board, and make
recommendations to the Board
with regard to changes.
• Responsible
identifying,
for
evaluating and nominating, for the
approval of the Board, candidates
The
• Consider succession planning
for Directors and other senior
executive management, and
in particular, for the key roles of
Chairman and CEO of the
Company.
appointment
of CEO and directors can
only be made following
a formal, rigorous assessment
by
its
this committee and
formal recommendations being
made to the Board, having also
evaluated the balance of skills,
knowledge,
and
diversity on the Board.
experience
• Determine and agree with the
Board the framework or broad
policy for the remuneration of
the CEO, the Chairman of the
Board, the Executive Directors,
the Company Secretary, and
such other members of the
executive management of the
Group to whom the Board has
extended the remit of the
committee.
• Determining the remuneration
policy by considering all factors
necessary,
which
legal and
including
requirements,
regulatory
it deems
relevant
of
and
the provisions
the
recommendations
QCA Code and associated
guidance. The objective of such
policy shall be to ensure that
members of the Group
executive management
provided with
incentives to encourage
enhanced performance and are,
in a fair and responsible manner,
rewarded
for their individual
contributions to the success of
the Group.
are
appropriate
• The committee ensures reporting
of the Remuneration Committee’s
agreed fees and remuneration,
for both the executive directors
and non-executive directors, in
the formal Report of the Directors
in the Annual Report. This
requires
formal approval by
the shareholders in an AGM.
The Chairman ensures he
is
available to answer questions/
comments put
forward by
the shareholders in the AGM
regarding directors’
fees and
remuneration.
• Perform evaluations of
the
Committees
Board
Board,
(and their constituents),
and recommend training where
necessary.
Committee Meeting Attendance Schedule
NAME
Katebe Monica Musonda*/
John Rabb**
Frank Braeken
Yollard Kachinda
Jonathan Kirby
Margaret Mudenda
CATERGORY
OF DIRECTOR 23/11/2020
16/02/2021
08/06/2021
14/09/2021
Chair: INED
**
**
**
**
INED
INED
NED
INED
RS
RS
Key
BA
*
**
RS
Attendance
Before Appointment
Current Chair of Committee (appointed 01/03/2021)
Resigned from the Board by date of report
Resigned
30
Zambeef Products PLC Annual Report 2021
Corporate Governance (continued)
3. Environmental and Social
Committee
Chairperson
- Professor Enala
Tembo- Mwase*/Pearson Gowero **
Members – John Rabb*, David
Osborne*, Roman Frenkel**, Katebe
Monica Musonda**, Yollard Kachinda
Responsibilities:
• Provide strategic advice and
guidance to the Board in relation
strategic
to
systemic
environmental
social
(“E&S”) issues which affect the
Company’s business model and
strategy.
and
and
that
• Ensure
the Company
in place adequate and
has
robust systems, policies and
procedures
for monitoring
the E&S management of the
Company, in accordance with
and
applicable
Good
Industry
Practice (“GIIP”), defined by IFC
Performance Standards.
International
legislation
• Monitor the implementation of the
Environmental and Social Action
Plan and any corrective action
plans that may be developed in
due course.
• Oversee any Company investiga-
tions relating to breaches of E&S
laws, regulations and standards
and/or the Company’s E&S pol-
icies, management systems and
plans.
• Ensure
good
corporate
citizenship
through promotion
of equality, prevention of unfair
discrimination and reduction of
corruption.
• Ensure
contribution
to
development of the communities
in which
its activities are
predominantly conducted, or
its products or
within which
predominantly
services
marketed.
are
Retirement and Election of
Directors
It is the Board’s policy that new
directors are subject to confirmation
at the first opportunity following their
appointment. All Directors, excluding
the Executive Directors are subject
to retirement and re-election on a
rotational basis with one-third of the
board being re-elected annually.
Performance Evaluation of the
Board
The Board carries out an annual
self-assessment of its performance
during the year, based on its Board
Charter’s objectives, with
the
Company Secretary collating and
reporting on the findings from each
Board member.
Areas covered in the self-assessment
include:
• Management of Board meetings
and discussions;
•
•
•
External and
relationships;
Internal Board
Skills of Board members;
Reaction to events;
• Chairman;
• Chairman and CEO relationships;
•
Attendance and contribution in
meetings;
• Open channels of communication;
•
Risk and Control frameworks;
• Composition;
•
Terms of Reference;
• Committees of the Board;
• Company Secretary;
•
•
•
•
•
•
Timeliness of information;
Board Agenda;
AGM;
External Stakeholders;
Induction and training; and
Succession planning.
The board will continue to implement
necessary changes to enhance its
performance.
Committee Meeting Attendance Schedule
NAME
CATERGORY
OF
DIRECTOR
Pearson Gowero*/Enala Mwase** Chair: INED
23/11/2020
**
16/02/2021
**
Roman Frenkel
Yollard Kachinda
Katebe Monica Musonda
John Rabb**
David Osborne**
NED
INED
INED
INED
NED
BA
BA
BA
BA
BA
BA
08/06/2021
**
14/09/2021
**
RS
RS
RS
RS
Key
BA
**
RS
Attendance
Before Appointment
Retired as Chairman of the Committee on 28/02/2021
Resigned
31
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
Corporate Governance (continued)
BOARD INDUCTION AND
DEVELOPMENT
Newly appointed directors are taken
through
the Company’s Articles
of Association, the Board Charter,
Codes of conduct, policies, listing
regulations and applicable acts such
as Companies Act and Securities
Act. They follow a tailored induction
the
programme
Company Secretary which includes a
scheduled trip to tour the operations.
facilitated by
COMPANY SECRETARY
Secretary
Company
The
is
responsible for implementing and
sustaining high levels of corporate
governance and keeps abreast of
legislation, regulations and corporate
governance developments which
may impact on the business. All
Directors have direct access to the
Company Secretary.
STAFF DEVELOPMENT,
TRAINING AND INFORMATION
TECHNOLOGY
The Company is committed to staff
development and training as this is
a key ingredient to continued and
improved operations.
The Company places emphasis
on information technology as key
in its strategy of delivering quality
products which are the first choice of
our customers and consumers.
STAKEHOLDER RELATIONS
ensures
considerable
places
Zambeef
importance
in maintaining active
investor relations through open, fair
transparent communications.
and
timely
The Company
dissemination of information to its
investors and other stakeholders
through various media. A dedicated
the
shareholders unit
Transfer Secretaries is responsible
for active
the
shareholders.
interaction with
through
The Zambeef business model has
identified and understands
the
importance of maintaining strong
working relationships with;
•
its key small-scale suppliers
32
across grains and livestock,
business performance.
•
•
•
•
•
raw
larger commercial
its
material/input suppliers and
livestock suppliers,
its wide customer base across
food
stockfeed, cold chain
products, and other products,
its regulators such as Zambia
Environmental
Management
Agency (ZEMA), Patents and
Companies Registration Agency
(PACRA), Water Resources
Management Agency (WARMA),
Lusaka Securities Exchange
(LuSE), Securities and Exchange
Commission
AIM
Nominated Advisor;
(SEC),
its financiers;
social responsibility partners in
communities.
views
(AGM)
institutional
In addition, Zambeef has shareholder
meetings, formally through Annual
General Meetings
and
Extraordinary General Meetings
(EGM), where required, and informally
meetings
through
half-yearly
shareholders.
with
Shareholders’
are
communicated in an open and frank
manner, with senior management
taking due note of their concerns
when expressed. The Board believes
that these engagements have proven
successful, as shareholder views
have fed into the current corporate
strategy. The CEO and Chief Financial
(CFO) meet and conduct
Officer
results presentations with
formal
shareholders on a half-yearly basis.
The Board considers the AGM key
in providing shareholders with the
opportunity to ask the Board and
chairperson of the Audit committee
questions concerning the affairs of
the Company. Accordingly, all legal
and regulatory requirements, notices
and information are released well in
advance to shareholders, regulators,
stock exchange and Company
websites. To this end, the Company
ensures copies of the Annual Report
and Accounts are made available
well before the AGM as this ensures
the shareholders have insight of the
all
shareholder
The Group publishes the outcome
of
resolutions
immediately after each AGM or
EGM. Zambeef maintains all market
announcements and Annual Reports
on its website for the last 10 years.
Internally the Board and Management
consider effective communication as
being critical to the success of the
business.
INTERNAL AUDITORS
The Company has an internal audit
function designed to add value to the
Company and improve operations.
the Company
The Internal Audit function provides
an independent assurance service
to the Board, the Audit and Risk
Committee and management. The
Internal audit function is formally
defined via an Internal Audit charter
and assists
to
accomplish its objectives by bringing
a systematic approach
the
evaluation of the effectiveness of the
governance, risk management and
control processes that management
has put into place. The head of the
internal audit function attends the
Audit and Risk Committee meetings
and has unrestricted access to the
chairperson of the committee.
in
PROCUREMENT
requires competitive
The Board
bidding
for significant purchases
and contracts, above determined
thresholds, through a formal Board-
approved Delegations of Authority
policy that covers the Board and
senior management.
EXTERNAL AUDITORS
External auditors are appointed by
the shareholders and are subject
to reappointment at the AGM. The
current external auditors of
the
Company are Grant Thornton (GT).
The Company together with external
auditors ensures that quality and
independent audits are undertaken
through regular and systematic audit
planning and also rotation of client
staff engaged on the audits.
Zambeef Products PLC Annual Report 2021 Corporate Governance (continued)
ORGANISATIONAL INTEGRITY
In its continued efforts to foster
integrity within the organisation, the
Company continues to enforce the
Group Code of Ethics policy and
encourages all employees to make
a declaration of their assets and/or
business involvements’ every year.
Employees are also encouraged
to declare all the gifts received in
the course of employment by way
of a gift register, maintained by the
Company Secretary.
INTERNAL CONTROL
and ethical standards. The Company
has a Code of Conduct and Business
Practices, determining the minimum
standards required of all staff, which
is disseminated
the
Company.
throughout
implemented,
The Company has
and widely disseminated
to all
stakeholders (including suppliers), a
Group Code of Ethics and Conduct.
INCIDENT REPORTING, ANTI-
BRIBERY AND CORRUPTION AND
WHISTLEBLOWING
POLICIES
AND PROCEDURES
safeguard
and
produced
The control systems are designed
to
the Company’s
assets, maintain proper accounting
records and ensure the reliability
financial
of management
information
the
by
Company. Control systems are
based on established Zambeef group
policies and procedures and are
implemented by trained personnel,
with an appropriate segregation of
duties.
The effectiveness of these internal
controls and systems is monitored
by the internal audit department,
with the aid of self-assessment audit
checklists. Management is also in
the transitional process of reporting
Internal Controls over Financial
Reporting as prescribed by
the
Zambian Securities and Exchange
Commission.
independent
The
external auditors, through the audit
work they perform, confirm that
abovementioned monitoring
the
procedures
applied
effectively.
are being
Nothing has come to the attention
of the Directors or the independent
external auditors to indicate that any
material breakdown in the functioning
of abovementioned internal controls
and systems has occurred during the
year under review.
ETHICS
Company’s
The
fundamental
policy is to conduct its business
with honesty and integrity and in
accordance with the highest legal
has
Company
The
detailed
policies and procedures covering
Incident Reporting, Anti-Bribery
and
and
Whistleblowing.
Corruption
(ABC)
The Group’s ABC program has
been formulated in conjunction with
CDC Group PLC (CDC), following
best
is
international practice.
well structured, documented and
rigorously monitored.
It
There
internal
is a dedicated
Whistleblowing Manager, managing
reports and complaints. These
complaints can be made in various
forms, and anonymously, without
fear of adverse consequences. This
policy has active senior management
is widely
encouragement
communicated within the Group,
with a verifiable and transparent
process of handling complaints. This
has resulted in valuable information
being obtained for further action.
and
Internal Audit closely monitors,
reviews and reports on all of these
the Audit and Risk
policies
Committee of the Board.
to
LEGAL COMPLIANCE
that
The Board requires management
to submit an annual declaration
confirming
the Company’s
operations complied with relevant
laws and regulations. In addition,
the Company complies with local
legislation. The Company has
recourse to the group Company
Secretary and external legal advice
on matters of legal compliance.
INSIDER TRADING
Directors and officers of the Company
who have access to unpublished,
price sensitive information, in respect
of the Company, are prohibited from
dealing in the shares of the Company,
during defined restricted periods,
including those periods immediately
prior to the announcement of interim
and final financial results. These
regulations are clearly stipulated in
the Share Dealing Code section of
the Corporate Governance manual.
SHARE DEALING
The Company has adopted a
share-dealing code
for dealings
in shares by Directors and senior
employees appropriate for an AIM-
listed company. The Directors
ensure that they comply with Rule
21 of the AIM rules for Companies
relating to Directors’ dealings and
take all reasonable steps to ensure
the Company’s
compliance by
relevant
including
employees,
obtaining the advice of its AIM
Nominated Advisor. In compliance
with the Market Abuse Regulation
(MAR), the Chairman of the Board is
responsible for share dealings by the
Directors, assisted by the Company
Secretary as the Compliance Officer.
Directors’
companies
Interests
in other
In compliance with Section 110 of
the Companies Act of Zambia, all
Directors are required to declare
to the Board their interests in other
companies, and this is considered if
any such company enters into any
contract with any Group company.
The Group has a Related-Parties
Transactions policy which aims to
ensure
related-
party transactions and appropriate
management of any approved
transactions.
transparency
in
RELATED-PARTY TRANSACTIONS
The Board gives authorisation for
any transactions carried out by the
group with any anyone or business
considered a related party. Such
transactions are evaluated as to
33
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Corporate Governance (continued)
whether the parties are treated fairly and in accordance with market conditions. For recurrent transactions carried out
with clients during the Groups’ ordinary course of business under normal market conditions that are not significant, the
Board gives prior authorisation for the general terms of the transaction.
DIRECTORS’ SHAREHOLDINGS
In compliance with Sections 30, 110 and 195 of the Companies Act of Zambia, all Directors are required to disclose their
shareholdings in the Company and any related companies.
MARKET DISCLOSURE
The Company prepares trading statements, interim and final results as required by the AIM, the LuSE and SEC rules and
also prepares a detailed narrative statement to accompany the results. Company results are disseminated widely through
the newswires and our own distribution lists.
COMPLIANCE STATUS OF LuSE CORPORATE GOVERNANCE RULES
ZAMBEEF COMPLIANCE SCHEDULE
Applicable
Non-
Applicable
Full
Compliance
Partial
Compliance
Non-
Compliance
%N/A
Category
General Matters
Chairman and CEO*
Executive and NEDs
Directors’
Compensation
Share & Share
dealings
Board meetings
Board evaluations**
Company Secretary
Board committees
Legal and
compliance
External audit
Internal audit
Risk
Integrated
sustainability
reporting
Disclosure and
Stakeholder
Reporting
Organisation
integrity
Total
Rules
15
5
4
9
4
4
1
4
10
2
7
12
7
7
4
6
15
4
9
4
4
1
4
10
2
7
12
7
7
4
6
101
100
1
15
4
9
4
4
4
10
2
7
12
7
7
4
6
99
0
1
-
1
1
%FC
100
100
100
100
100
0
100
100
100
100
100
100
100
100
100
99
%PC
%NC
-
-
-
-
-
-
-
Summary of areas that are not fully compliant or inapplicable
Areas not applicable
* Chairman and CEO performed by seperate persons
**Board Evaluation: following the changes in the composition of the board as explained in the chairman’s statement it was
not prudent to evaluate the performance of the board as a whole on accout of the new directors.
34
Zambeef Products PLC Annual Report 2021 35
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Board of Directors
Walter Roodt (age 45)
CEO
Nationality: Namibian
Faith Mukutu (age 41)
Chief Financial Officer
Nationality: Zambian
Michael Mundashi SC (age 63)
Chairman Nationality: Zambian
Qualifications:
Bachelor of Laws Degree (University of
Zambia); Post Graduate qualification
as an Advocate of the High Court of
Zambia.
Experience:
Over 30 years post qualification
experience in both the public and
private sectors. Served as Chairman of
the Zambian Tax Appeals Court and as
Independent Non- Executive Chairman
of Standard Chartered Bank Zambia Plc.
External appointments Currently
serving as Chairman of Sanlam
Insurance; Director of Nico General
Insurance. Also, full time Managing
Partner of the law firm of Mulenga
Mundashi Legal Practitioners.
Qualifications:
BSc. (Agric.) Animal
Science (University of
Pretoria, RSA); MSc.
(Agric.) Nutrition Science
(University
of Pretoria, RSA); Senior
Executive Programme
(London Business School,
UK).
Experience:
Over 15 years of
experience in Agriculture
in Southern Africa.
External appointments:
Director of City Dental Ltd.
Qualifications:
A.C.C.A. (Chartered
Certified Accountant)
– Zambia Centre for
Accountancy Studies,
Zambia;
Certified Accounting
Technician – Zambia
Centre for
Accountancy Studies,
Zambia
Experience:
Over 15 years’ experience
in senior finance positions
of major corporates,
including Zambia
Sugar Plc and Zambian
Breweries (part of
SABMiller Group).
External appointments
Current directorships
include Bayport Financial
Services Ltd, Good Nature
Agro, & Zayohub Zambia Ltd.
Katebe Monica Musonda
(46)
Non-Executive Director
Chair Remco
Director
Nationality: Zambian
Qualifications:
LL. B (UNZA); LL.M
(Corporate Law & Finance
- London)
Executive Management
Programme (Harvard
Kennedy).
Experience:
Over 15 years PQE, Debt
& Equity Capital Markets &
Project Finance;
9 years in FMCG having
founded Java Foods
Previously worked as
General Counsel to the
Dangote Group.
External Appointments
Independent Non-
Executive Chair Airtel
Networks Plc & Zambian
Breweries Plc
Non-Executive Director
Arcelor Mittal South
Africa Plc, Mixta Nigeria,
Dangote Cement Zambia
Founder & CE Java Foods.
36
Zambeef Products PLC Annual Report 2021
Yollard Kachinda (age 58 )
Non-Executive Director
Nationality: Zambian
Jonathan Kirby (age 59)
Non-Executive Director
Nationality: South African
Frank Braeken (age 61)
Non-Executive Director
Nationality: Belgian
Roman Frenkel (age 41)
Non-Executive Director
Nationality: British
Pearson Gowero (age 63)
Non-Executive Director
Nationality: Zimbabwe
Qualifications:
BSc (Ed.) Mathematics
and Statistics (University
of Zambia)
MSc Social Protection
Financing (Maastricht
University, Netherlands).
Qualifications
Bachelor of Accounting
(University of the
Witwatersrand, RSA)
Higher Diploma in Tax Law
(Rand Afrikaans University,
RSA) CA (RSA).
Experience:
Over 25 years’ experience
at the Zambian National
Pension Scheme Authority
(NAPSA).
External appointments
Director General of
NAPSA. Currently serving
on the Board of Directors
of ZCCM-IH Plc.
Experience:
Over 30 years’ business
management and Finance
in London, Hong Kong,
Singapore and South
Africa.
Previously Vice President
(Finance) of AB Inbev
Africa and CFO of
SABMiller Africa.
External appointments
Currently on the board
of Delta Corporation,
Zimbabwe, Consol
Holdings (Pty) Ltd, South
Africa, Cavlier Food (Pty)
Ltd, South Africa and
McWade Productions (Pty)
Ltd, South Africa.
Qualifications:
MBA in Finance (Leuven
University, Belgium)
Degree in Law with major
in Corporate Law (Catholic
University Lueven,
Belgium) Advanced
Management Program
(Wharton Penn University,
USA).
Experience:
Over 30 years of
experience in the Fast-
Moving Consumer
Goods. Previously head
of Unilever Africa and
Chief Investment officer of
Amatheon Agri Holding.
External appointments
Currently serving on the
boards of Buhler AG,
Alliance for a Green
Revolution in Africa, F.M.B
BWC-
LLC, Marie Stopes
International and AECF
Limited.
Qualifications
Durham University MEng
Mechanical Engineering;
ACA (ICAEW).
Qualifications:
BSc (Economics) Hons
(University of Zimbabwe)
MBL (University of South
Africa).
Experience:
Over 10 years’ investment
experience in private
equity in emerging
markets. Previously
Investment Director at
Ethemba Capital LLP,
emerging markets private
equity fund based in
London. Previously
investment banker at
Merrill Lynch in London
and transaction services
and audit professional at
KPMG in London.
External appointments
Currently Director, Food &
Agriculture, Direct Private
Equity at CDC Group PLC
in London.
Experience:
Nearly 40 years experience
in business management
including Retail and Fast-
Moving Consumer Goods.
Former Managing Director
of Zambian Breweries PLC
and recently retired as
Chief Executive Officer of
Delta Corporation Limited
(Zimbabwe).
External appointments
Has previously served
as a Director on several
boards and is currently a
Director of both SeedCo
Zimbabwe Limited and
SeedCo International
Limited. He is a member
of the National Council
of the Confederation of
Zimbabwe Industries.
37
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
REPORT OF THE DIRECTORS
In compliance with Section 275 of the Zambian Companies Act, the Directors submit their report on the activities
of the Group for the year ended 30 September 2021.
1.
2.
Principal activities
Zambeef Products PLC and its subsidiaries (“The Group”) is one of the largest agri-businesses in
Zambia. The Group is principally involved in the production, processing, distribution and retailing of
beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed and flour. The Group also has
large row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 Ha
of row crops under irrigation and 8,623 Ha of rain-fed/dry-land crops available for planting each year.
The Group also has operations in West Africa in Nigeria and Ghana.
The Company
The Company, Zambeef Products Plc, is a public limited company incorporated and domiciled in
Zambia.
Business address
Plot 4970, Manda Road
Industrial Area
Lusaka
ZAMBIA
Postal address
Private Bag 17
Woodlands
Lusaka
ZAMBIA
3.
Share capital
Details of the Company’s authorised and issued share capital are as follows:
30 September 2021
30 September 2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
7,000
938
7,000
938
Authorised
700,000,000 ordinary shares of
ZMW0.01 each
Issued and fully paid
Ordinary shares
300,579,630 of ZMW0.01 each
3,006
449
3,006
449
Preference shares – Convertible
Redeemable
100,057,658 of ZMW0.01 each
1,000
100
1,000
100
4.
Results
The Group’s results are as follows:
Group
Notes
2021
2021
2020
2020
Revenue
Profit/(loss) before
taxation
Taxation charge
Profit/ (loss) from
discontinued operation
Group profit/(loss) for
the year
Group profit/(loss)
attributable to:
Equity holders of the
parent
Non-controlling interest
38
5
10
ZMW’000s
ZMW’000s
4,974,351
USD’000s
USD’000s
ZMW’000s
ZMW’000s
USD’000s
USD’000s
235,528
3,875,104
239,648
203,971
(35,148)
-
9,658
(22,673)
(1,664)
(112,957)
-
33,435
(1,402)
(6,986)
2,068
168,823
7,995
(102,195)
(6,320)
167,980
843
168,823
7,955
(103,419)
40
7,995
1,224
(102,195)
(6,396)
76
(6,320)
Zambeef Products PLC Annual Report 2021
REPORT OF THE DIRECTORS (CONTINUED)
5.
Dividends
There has been no dividend proposed for the year ended 30 September 2021 (2020: ZMW nil).
6. Management
The senior management team comprise the following:
-
Walter Roodt
Faith Mukutu
-
Mike Lovett -
-
Mwansa Mutimushi
-
Nyangu Kayamba
-
Mboo Mumba
-
Koos Potgieter
-
Murray Moore
-
Richard Franklin
-
Mathews Ngosa
-
Alun Maskell
-
Wiehan Visagie
Henry Kasanga
-
Nathan Chishimba -
-
Gbenga Ibitoye
-
Lufeyo Nkhoma
-
Clement Mulenga
Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Company Secretary
Human Resources Executive
Group Head – Banking & Administration
General Manager - Farming
General Manager – Beef and Dairy
General Manager – Zamleather Limited
General Manager – Zam Chick Limited, Zamhatch Limited
General Manager – Masterpork Limited
General Manager – Stock Feed
General Manager - Milling
Commercial Manager Retailing
Financial Controller – West Africa
General Manager – Master Meats Ghana
General Manager – Master Meats Nigeria
7.
Chairman
(Retired on 31 December 2020)
(Retired on 28 February 2021)
(Retired on 28 February 2021)
(Retired on 28 February 2021)
(Retired on 28 February 2021)
Directors and Secretary
The Directors in office during the financial period and at the date of this report were as follows:
Michael Mundashi SC
-
Dr. Lawrence S. Sikutwa -
-
John Rabb
-
Prof. Enala Mwase
-
David Osborne
Margaret Mudenda
-
Yollard Kachinda
Jonathan Kirby
Frank Braeken
Katebe Monica Musonda -
-
Pearson Gowero
-
Roman Frenkel
-
Walter Roodt
-
Faith Mukutu
-
Danny Museteka
-
Mwansa Mutimushi
(Appointed on 1st March 2021)
(Appointed on 1st March 2021)
(Appointed on 1st March 2021)
Chief Executive Officer
Executive Director
Company Secretary (Retired on 29 January 2021)
Company Secretary (Appointed on 1 February 2021)
39
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
REPORT OF THE DIRECTORS (continued)
8.
Directors’ interests
The Directors held the following interests in the Company’s ordinary shares at the reporting date:
30 September 2021
30 September 2020
Direct
Indirect
Direct
14,000,000
-
-
-
375,000
-
Indirect
14,000,000
-
-
John Rabb*
Frank Braeken
Katebe Monica Musonda
-
-
555
555
* Retired on 28 February 2021.
9.
Directors’ fees and remuneration
ZMW
NON-EXECUTIVE
Michael Mundashi SC
Yollard Kachinda
Margaret Mudenda
Lawrence Sikutwa
Enala Mwase
Jonathan Kirby
John Rabb
Frank Braeken
Katebe Monica Musonda
Pearson Gowero
EXECUTIVE
Walter Roodt
Faith Mukutu
Danny Museteka
Mwansa Mutimushi
14,000,000
375,000
14,000,000
Salary
Car Allowance
Medicals
860,000
463,225
120,272
100,226
100,225
533,870
120,272
463,225
338,333
338,333
-
-
-
-
5,444,977
Company Car
4,950,015
Company Car
1,376,011
1,467,564
-
-
-
-
-
-
Yes
Yes
Yes
-
In addition to the above, all Executive Directors are entitled to a gratuity of 25 per cent of their gross
basic salary paid over the two-year contract term.
Mr Frank Braeken was engaged in consultancy work at a fee of USD37,500.
Further, the Board co-opted Mr. Hastings Mtine into the Audit Committee as a member. Mr. Mtine’s
remuneration was ZMW232,657 for the year under review.
40
Zambeef Products PLC Annual Report 2021
REPORT OF THE DIRECTORS (continued)
10. Significant Shareholdings
As at 30 September 2021, the Company has been advised of the following notable interests in its ordinary
share capital:
Investor Name
CDC Group Plc
Africa Life
National Pension Scheme Authority (Zambia)
M & G Investment Management
SBM Securities
Sussex Trust
Eastspring Investment
Rhodora
Red Fort Partnership
Current
Position
% of
Shareholding
52,601,435
43,030,134
24,797,818
24,575,000
15,925,191
14,000,000
11,995,062
8,639,374
8,175,000
17.3%
14.1%
8.1%
8.1%
5.2%
4.6%
4.0%
2.8%
2.7%
CDC Group Plc are also the holders of 100,057,658 convertible redeemable preference shares. These
shares have four voting rights for every five preference shares held resulting in CDC having 34.8% of the
voting rights.
11. Employees
The Group employed an average of 7,029 (30 September 2020 – 7,082) employees and total salaries
and wages were ZMW626.8 million (USD29.7 million) for the year ended 30 September 2021 (30
September 2020 – ZMW493.5million [USD30.5 million]).
The average number of persons employed by the Group in each month of the financial year is as
follows:
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Headcount
6,590
6,781
7,078
7,152
7,210
7,224
7,106
6,842
7,003
7,334
7,228
6,795
41
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
REPORT OF THE DIRECTORS (continued)
12. Safety, Health and Environmental issues
As part of some of the Group’s term loans, as well as the CDC Group PLC equity investment, the Group
has signed up to an Environmental and Social Action Plan (“ESAP”), which requires the Group to meet
both local Zambian standards as well as international standards relating to the environment.
The Group provides education and healthcare services to its employees. The Group also supports various
community activities in the areas that it operates from.
13.
Legal matters
There are no significant legal or arbitration proceedings (including to the knowledge of the Directors,
any such proceedings which are pending or threatened, by or against the Company or any subsidiary
of the Group) which may have or have had during the 12 months immediately preceding the date of this
document a significant effect on the financial position or profitability of the Company or any member of
the Group.
14. Gifts and donations
The Group made donations of ZMW2.5 million (USD 0.5million) (30 September 2020: ZMW7.9million
[USD0.5million]) to a number of activities.
15. Export sales
The Group made exports of ZMW36.6 million (USD1.7 million) during the period (30 September 2020:
ZMW37.5 million [USD2.3 million]).
16. Property, plant and equipment
Assets totalling ZMW116.1 million (USD5.6 million) were purchased by the Group during the period (30
September 2020 – ZMW92.7 million [USD5.7 million]).
17. Other material facts, circumstances and events
The Directors are not aware of any material fact, circumstance or event which occurred between the
accounting date and the date of this report which might influence an assessment of the Group’s financial
position or the results of its operations. The outbreak of the COVID-19 pandemic has had a negative
effect on the country’s economy. However the consumer demand for Zambeef’s products stood up well
and the current trading conditions are expected to continue in the near future. The effect on the business
from the pandemic has been minimal.
18. Events since the year end
There have been no significant events affecting the Group since the year-end.
19. Annual financial statements
The annual financial statements set out on pages 51 to 154 have been approved by the directors.
20.
Auditor
In accordance with the provisions of section 257(1) of the Zambian Companies Act No. 10 of 2017,
the auditors, Messrs Grant Thornton, will retire as auditors of the Company at the forthcoming Annual
General Meeting.
By order of the Board
Mwansa Mutimushi
Company Secretary
Date: 30 November 2021
42
Zambeef Products PLC Annual Report 2021
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
Section 265 of the Zambian Companies Act 2017 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 whether due to fraud or error;
selecting appropriate accounting policies and applying them consistently;
making judgements and accounting estimates that are reasonable in the circumstances; and
preparing the financial statements in accordance with the applicable financial reporting framework,
and on the going concern basis unless it is inappropriate to presume that 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 Group and enable them to ensure that the financial statements comply
with the Zambian Companies Act No. 10 of 2017. They are also responsible for safeguarding the assets of the
Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Board of Directors confirm that in their opinion:
(a)
(b)
(c)
the financial statements give a true and fair view of the financial position of Zambeef Products PLC and
its subsidiaries as at 30 September 2021, and of its financial performance and its cash flows for the
year then ended;
at the date of this statement there are reasonable grounds to believe that the Group will be able to pay
its debts as and when these fall due; and
the financial statements are drawn up in accordance with the provisions of the second schedule to
Section 164 of the Companies Act and International Financial Reporting Standards.
This statement is made in accordance with a resolution of the Directors.
Signed at Lusaka on 30 November 2021
Michael Mundashi SC
Chairman
Walter Roodt
Chief Executive Officer
43
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
44
Zambeef Products PLC Annual Report 2021 Zambeef Products PLC and its subsidiaries
Financial Statements
30 September 2021
45
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW Grant Thornton
5th Floor Mukuba
Pension House
Dedan Kimathi Road
P.O. Box 30885
Lusaka, Zambia
T +260 (211) 227722-8
M +260 955817011
E gtlusaka.mailbox@zm.gt.com
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ZAMBEEF PRODUCTS PLC AND ITS
SUBSIDIARIES
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Zambeef Products PLC (the ‘parent Company’)
and its subsidiaries (the ‘Group’) for the year ended 30 September 2021, which comprise the Consolidated
Statement of Comprehensive Income, the consolidated and Separate Statement of Changes in Equity, the
Consolidated and Separate Statements of Financial Position and the Consolidated and Separate Statements
of Cash Flows and notes to the Financial statements, including a summary of significant accounting policies.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s
affairs as at 30 September 2021 and of the Group’s profit/loss and the parent Company’s profit/loss
for the year then ended;
the Group financial statements have been properly prepared in accordance with International Financial
Reporting Standards in conformity with the requirements of the Companies Act and the Securities Act
of Zambia;
the parent Company financial statements have been properly prepared in accordance with International
Financial Reporting Standards in conformity with the requirements of the Companies Act and the
Securities Act of Zambia and as applied in accordance with the provisions of the Companies Act
2017; and the financial statements have been prepared in accordance with the requirements of the
Companies Act No. 10 of 2017.
Partners
Edgar Hamuwele (Managing)
Christopher Mulenga
Wesley Beene
Rodia Musonda
Chilala Banda
Audit l Tax l Advisory
Chartered Accountants
Zambian Member of Grant Thornton International
VAT reg 1001696100. Registered in Lusaka. Company number 8116
Grant Thornton Zambia and other member firms are not a worldwide partnership. GTI and each member firm is separate legal entity.
Services are delivered independently by the member firms. GTI and its member firms are not agents, and do not obligate, one another
and are not liable for one another's acts or omissions.
www.gt.com.zm
46
Zambeef Products PLC Annual Report 2021
OVERVIEW
STRATEGIC
REPORT
CORPORATE
GOVERNANCE
FINANCIAL
STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ZAMBEEF PRODUCTS PLC AND ITS
SUBSIDIARIES
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Group and Parent Company accordance with
the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (IESBA Code) together with ethical requirements that are relevant to our audit of the financial
statements in Zambia, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Description of matter
How the matter was addressed in our audit
Valuation of biological assets
The valuation of biological assets is determined
through use of estimates and category of the
animals.
Due to the judgements required in arriving
at biological assets values, the valuation of
biological assets was considered a key matter.
Classification, measurement and impairment
of financial assets
The Group applies IFRS 9 ‘Financial Instruments’
in the preparation of the consolidated financial
statements.
to
review
required
the
The directors are
these
classifications of assets and ensure
classifications are
the
requirements of IFRS 9. The directors also
reviewed the fair valuations and impairment
model.
in accordance with
Due to the complex and subjective judgements
required in estimating the timing and valuation
of impairment and in estimating the fair value of
assets, this was considered a key audit matter.
We physically counted the livestock at the year-end
and engaged an expert to review the categorization
and quality of the animals.
We weighed samples of the animals in the various
categories to ascertain the average weight of
animals in those categories.
We measured the crop fields, checked the subsequent
yields based on the actual yields achieved and we
checked the quality of the crop in the ground and the
harvested using an the auditor expert.
We also analysed the valuations of cattle included
in the biological assets based on the valuation
methods used which included price per weight.
We assessed the classification of the financial assets
for compliance with the reporting standard.
In considering the reasonableness of the impairment
provision, we tested the aging of all outstanding trade
receivables to determine those that were overdue.
We further assessed their recoverability through
testing of subsequent receipts.
Zambeef Products PLC Annual Report 2021
47
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ZAMBEEF PRODUCTS PLC AND ITS
SUBSIDIARIES
Key Audit Matters (continued)
Valuation of goodwill
to K167 million
(USD
Goodwill amounting
8.3 million) was carried in the consolidated
statement of financial position. Under IAS 36,
the Company is required to test the amount of
goodwill for impairment at least annually. The
impairment tests were significant to our audit due
to the complexity of the assessment process and
judgements and assumptions involved which are
affected by expected future market and economic
developments.
We challenged the cash flow projections included in
the annual goodwill impairment tests. For our audit
we furthermore assessed and tested the assumptions
and methodologies used by management.
Information Other than the Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information included
in the Chairman’s report, report of the Directors, Chief Executive Officer’s review, Sustainability report and
Corporate Governance Statements, but does not include the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement in the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards and the requirements of the Companies Act
and the Securities Act of Zambia and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, management is responsible for assessing the Group’s and Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Group and/or the
Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s and Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
48
Zambeef Products PLC Annual Report 2021 INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ZAMBEEF PRODUCTS PLC AND ITS
SUBSIDIARIES
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
skepticism throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s and the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as
a going concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group and/or the
Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
49
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ZAMBEEF PRODUCTS PLC AND ITS
SUBSIDIARIES
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
The Companies Act 2017 of Zambia requires that in carrying out our audit of Zambeef Products PLC, we
report on whether:
i)
ii)
iii)
as required by Section 259(3) (a), there is a relationship, interest or debt which, ourselves, as the
company auditors have with the company.
as required by Section 259 (3) (b), there are no breaches by the company’s directors, of corporate
governance principles or practices contained in Sections 82 and 122 of part VII of the Companies
Act 2017 of Zambia.
in accordance with Section 250 (2), as regards loans made to a Company Officer (a director,
Company Secretary or Exclusive Officer of the company). The Company states the:
• Particulars of any relevant loan during the financial year to which the accounts apply including
any loan which was repaid during the year or;
• Amount of any relevant loan, whenever made, which remained outstanding at the end of the
financial year.
In respect of the foregoing requirements, we have no matter to report.
Chartered Accountants
Wesley M Beene (AUD/F000465)
Name of Partner signing on behalf of the firm
Lusaka
Date: 30 November 2021
50
Zambeef Products PLC Annual Report 2021 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Group
Revenue
Net (loss)/gain arising from price
changes in fair value of biological assets
Cost of sales
Gross profit
Administrative expenses
Distribution costs
Other income
Operating profit
Note
2021
2021
2020
2020
ZMW’000s USD’000s
ZMW’000s
USD’000s
5
4,974,351
235,528
3,875,104
239,648
16(a)
6,651
315
(14,381)
(889)
(3,510,286)
(166,207)
(2,645,101)
(163,581)
1,470,716
69,636
1,215,622
75,178
(1,150,658)
(54,482)
(945,198)
(58,454)
(66,848)
(3,165)
(66,770)
(4,129)
14,120
669
6,877
425
267,330
12,658
210,531
13,020
7(a)
7(b)
6
7
Share of loss from equity accounted
investment
Profit from asset held for sale
34
Exchange losses on translating foreign
currency transactions and balances
(3,358)
31,949
(160)
1,513
(3,177)
-
23,332
1,105
(137,705)
Finance costs
9
(115,282)
(5,458)
(92,322)
Profit/(loss) before taxation
203,971
9,658
(22,673)
Taxation charge
10
(35,148)
(1,664)
(112,957)
(197)
-
(8,516)
(5,709)
(1,402)
(6,986)
Group (loss)/income for the year from
continuing operations
168,823
7,995
(135,630)
(8,388)
Profit from discontinued operations
34
-
-
33,435
2,068
Group income/(loss) for the year
168,823
7,995
(102,195)
(6,320)
The translated USD figures are for supplementary reporting purposes.
51
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2021 (CONTINUED)
Note
2021
2021
2020
2020
ZMW’000s USD’000s ZMW’000s USD’000s
167,980
7,955
(103,419)
(6,396)
843
40
1,224
76
168,823
7,995
(102,195)
(6,320)
Group income/(loss) attributable to:
Equity holders of the parent
Non-controlling interest
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Exchange gains/(losses) on translating presentational
currency
(286,645)
25,338
625,042
(52,402)
Items that will not be reclassified
subsequently to profit or loss
Remeasurement of net defined benefit liability
(2,813)
(133)
6,229
Remeasurement of leases
Revaluation of assets
-
-
192,403
9,110
315
-
385
20
-
Total other comprehensive income/(loss)
(97,055)
34,315
631,586
(51,997)
Total comprehensive income/(loss) for the year
71,768
42,310
529,391
(58,317)
Total comprehensive income/(loss) for the year
attributable to:
Equity holders of the parent
Non-controlling interest
Earnings per share
Basic earnings per share – continued operations
Basic earnings per share – discontinued operations
Total Basic earnings per share
Diluted earnings per share
Diluted earnings per share – continued operations
Diluted earnings per share – discontinued operations
Total Diluted earnings per share
12
12
12
12
12
12
73,867
42,440
525,030
(58,661)
(2,099)
(130)
4,361
344
71,768
42,310
529,391
(58,317)
Ngwee
Cents
Ngwee
Cents
55.89
2.65
(45.12)
-
-
11.12
55.89
2.65
(34.00)
41.92
1.99
(45.12)
-
-
11.12
41.92
1.99
(34.00)
(2.79)
0.69
(2.10)
(2.79)
0.69
(2.10)
The translated USD figures are for supplementary reporting purposes.
52
Zambeef Products PLC Annual Report 2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021
(i) In Zambian
Kwacha
Issued
share
capital
Share
premium
Preference
share
capital
Foreign
exchange
reserve
Revaluation
reserve
Retained
earnings
Total
attributable
to owners
of the
parent
Non-
controlling
interest
Total
equity
ZMW’000s ZMW’000s ZMW’000s ZMW’000s
ZMW’000s ZMW’000s
ZMW’000s ZMW’000s ZMW’000s
As at 30
September 2019
Adjustment on
transition to
IFRS16
At 1 October
2019
Loss for the year
Transfer of surplus
depreciation
Other
comprehensive
income:
Exchange (loss)
on translating
presentational
currency
Remeasurement
of net defined
benefit liability
Total
comprehensive
income
At 30 September
2020
Profit for the year
Revaluation
Transfer of surplus
depreciation
Other
comprehensive
income:
Exchange
gain/ (loss)
on translating
presentational
currency
Remeasurement
of net defined
benefit liability
Total
comprehensive
income
At 30 September
2021
3,006
1,125,012
1,000
381,929
1,199,058
535,704
3,245,709
(4,881)
3,240,828
-
-
-
-
-
-
-
-
-
-
315
315
-
315
(4,881)
3,240,828
381,929
1,199,058
536,019
3,246,024
(4,881)
3,241,143
-
-
-
-
-
-
-
-
-
-
-
-
-
(103,419)
(103,419)
1,224
(102,195)
(31,345)
31,345
-
-
-
621,905
-
-
-
-
621,905
3,137
625,042
6,229
6,229
-
6,229
621,905
(31,345)
(65,845)
524,715
4,361
529,076
3,006
1,125,012
1,000
1,003,834
1,167,713
470,174
3,770,739
(520)
3,770,219
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
167,980
167,980
843
168,823
192,403
-
192,403
(44,377)
44,377
-
-
-
192,403
-
(283,703)
-
-
-
-
(283,703)
(2,942)
(286,645)
(2,813)
(2,813)
-
(2,813)
(283,703)
148,026
209,544
73,867
(2,099)
71,768
3,006
1,125,012
1,000
720,131
1,315,739
679,718
3,844,606
(2,619)
3,841,987
The translated USD figures are for supplementary reporting purposes.
53
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021 (CONTINUED)
(ii) In US Dollar
Issued
share
capital
Preference
share
capital
Share
premium
Foreign
exchange
reserve
Revaluation
reserve
Retained
earnings
Total
attributable
to owners
of the
parent
Non-
controlling
interest
Total
equity
USD’000s
USD’000s USD’000s USD’000s
USD’000s USD’000s
USD’000s
USD’000s USD’000s
At 1 October 2019
449
185,095
100
(197,748)
173,209
84,782
245,887
(370)
245,517
Adjustment on
transition to IFRS
16
As at 1 October
2019
Loss for the year
Transfer of surplus
depreciation
Other
comprehensive
income:
Exchange gains
on translating
presentational
currency
Remeasurement of
net defined benefit
liability
Total
comprehensive
income
At 30 September
2020
Profit for the year
Revaluation
Transfer of surplus
depreciation
Other
comprehensive
income:
Exchange gains
on translating
presentational
currency
Remeasurement of
net defined benefit
liability
Total
comprehensive
income
At 30 September
2021
-
-
-
-
-
20
20
-
20
449
185,095
100
(197,748)
173,209
84,802
245,907
(370)
245,537
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,396)
(6,396)
76
(6,320)
(1,938)
1,938
-
-
-
(52,670)
-
-
-
-
(52,670)
268
(52,402)
385
385
-
385
(52,670)
(1,938)
(4,073)
(58,681)
344
(58,337)
449
185,095
100
(250,418)
171,271
80,729
187,226
(26)
187,200
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,955
9,110
-
7,955
9,110
(2,101)
2,101
-
40
-
-
7,995
9,110
-
25,508
-
-
-
-
25,508
(170)
25,338
(133)
(133)
-
(133)
25,508
7,009
9,923
42,440
(130)
42,310
449
185,095
100
(224,910)
178,280
90,652
229,666
(156)
229,510
The translated USD figures are for supplementary reporting purposes.
54
Zambeef Products PLC Annual Report 2021 COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021
(i) In Zambian
Kwacha
Issued
share
capital
Preference
share
capital
Share
premium
Revaluation
reserve
Foreign
exchange
reserve
Retained
earnings
Total equity
ZMW’000s
ZMW’000s ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
At 1 October
2019
Profit for the year
Other
comprehensive
income:
Transfer
of surplus
depreciation
Remeasurement
of net defined
benefits liability
Exchange gain
on translating
presentational
currency
Total
comprehensive
income
At 30 September
2020
Profit for the year
Other
comprehensive
income:
Revaluation
Transfer
of surplus
depreciation
Remeasurement
of net defined
benefits liability
Exchange gain
on translating
presentational
currency
Total
comprehensive
income
At 30 September
2021
3,006
1,000
1,125,012
862,152
360,506
535,236
2,886,912
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(33,614)
-
-
-
-
-
26,838
26,838
33,614
-
1,836
1,836
609,324
-
609,324
-
(33,614)
609,324
62,288
637,998
3,006
1,000
1,125,012
828,538
969,830
597,524
3,524,910
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40,125
(46,972)
-
-
-
-
-
-
131,349
131,349
-
40,125
46,972
-
(1,408)
(1,408)
(271,935)
-
(271,935)
(6,847)
(271,935)
176,913
(101,869)
3,006
1,000
1,125,012
821,691
697,895
774,437
3,423,041
The translated USD figures are for supplementary reporting purposes.
55
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2021 (CONTINUED)
(ii) In US Dollar
Issued
share
capital
Preference
share
capital
Share
premium
Revaluation
reserve
Foreign
exchange
reserve
Retained
earnings Total equity
USD’000s USD’000s
USD’000s
USD’000s USD’000s USD’000s
USD’000s
At 1 October 2019
449
100
185,095
116,408
(168,059)
84,712
218,705
Profit for the year
Other
comprehensive
income:
Transfer of surplus
depreciation
Remeasurement of
net defined benefits
liability
Exchange losses
on translating
presentational
currency
Total
comprehensive
income
At 30 September
2020
Profit for the year
Other
comprehensive
income:
Revaluation
Transfer of surplus
depreciation
Remeasurement of
net defined benefits
liability
Exchange losses
on translating
presentational
currency
Total
comprehensive
income
At 30 September
2021
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,079)
-
-
-
-
-
1,661
1,661
2,079
-
114
114
(45,460)
-
(45,460)
(2,079)
(45,460)
3,854
(43,685)
449
100
185,095
114,329
(213,519)
88,566
175,020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,900
(2,224)
-
-
-
-
-
6,219
6,219
-
1,900
2,224
-
(66)
(66)
21,410
-
21,410
(324)
21,410
8,377
29,463
449
100
185,095
114,005
(192,109)
96,943
204,483
The translated USD figures are for supplementary reporting purposes.
56
Zambeef Products PLC Annual Report 2021 CONSOLIDATED STATEMENT OF FINANCIAL POSITION - 30 SEPTEMBER
2021
ASSETS
Note
2021
2021
2020
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Non-current assets
Goodwill
Property, plant and equipment
Investment in associate
Deferred tax asset
Current assets
Biological assets
Inventories
Trade and other receivables
Assets held for sale
Amounts due from related companies
Income tax recoverable
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Preference share capital
Share premium
Other reserves
13
14
15(e)
10(e)
16
17
18
34
19
10(c)
20
21
21
22
166,801
9,964
166,801
8,282
3,115,018
186,082
3,264,505
162,091
40,468
9,050
2,417
541
43,826
9,552
2,176
474
3,331,337
199,004
3,484,684
173,023
358,997
21,445
176,305
1,197,846
71,556
1,103,640
234,076
170,550
4,202
3,707
13,983
10,188
251
221
132,668
175,654
9,337
1,784
201,539
12,039
111,136
2,170,917
129,683
1,710,524
8,754
54,798
6,587
8,722
464
89
5,518
84,932
5,502,254
328,687
5,195,208
257,955
3,006
1,000
449
100
3,006
1,000
449
100
1,125,012
185,095
1,125,012
185,095
2,715,588
44,022
2,641,721
1,582
3,844,606
229,666
3,770,739
187,226
Non-controlling interest
(2,619)
(156)
(520)
(26)
3,841,987
229,510
3,770,219
187,200
The translated USD figures are for supplementary reporting purposes.
57
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CONSOLIDATED STATEMENT OF FINANCIAL POSITION - 30 SEPTEMBER
2021 (CONTINUED)
Note
2021
2021
2020
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Non-current liabilities
Interest bearing liabilities
Leases
Deferred liability
Deferred tax liability
Current liabilities
Interest bearing liabilities
Leases
Trade and other payables
Provisions
Amounts due to related companies
Taxation payable
Bank overdrafts
195,555
11,682
190,218
9,445
23
24
25
7,253
8,891
433
531
19,750
11,389
69,950
10(e)
88,056
5,260
23
24
26
27
28
10(c)
20
299,755
17,906
291,307
210,709
12,587
326,899
12,418
464,103
169,307
-
13,771
742
23,259
27,723
10,113
-
823
321,648
113,347
443
41
490,204
29,283
348,045
1,360,512
81,271
1,133,682
981
565
3,473
14,464
16,231
1,155
15,971
5,629
22
2
17,281
56,291
Total equity and liabilities
5,502,254
328,687
5,195,208
257,955
The financial statements on pages 51 to 154 were approved by the Board of Directors on 30 November 2021
and were signed on its behalf by:
Michael Mundashi SC
Chairman
Walter Roodt
Chief Executive Officer
The translated USD figures are for supplementary reporting purposes.
58
Zambeef Products PLC Annual Report 2021
COMPANY STATEMENT OF FINANCIAL POSITION - 30 SEPTEMBER 2021
ASSETS
Note
2021
2021
2020
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Non-current assets
Property, plant and equipment
Investments in subsidiaries
Investment in associate
Current assets
Biological assets
Inventories
Assets held for sale
Trade and other receivables
Amounts due from related companies
Income tax recoverable
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Preference share capital
Share premium
Other reserves
14
15(b)
15(e)
16
17
34
18
19
10(c)
20
21
21
22
2,166,483
129,420
2,476,394
122,959
245,807
14,684
245,807
40,468
2,417
43,826
12,205
2,176
2,452,758
146,521
2,766,027
137,340
307,948
772,972
170,550
91,702
18,396
46,174
10,188
5,478
139,501
814,081
175,654
50,555
6,927
40,421
8,722
2,510
780,554
46,628
1,320,117
65,547
2,520
113,193
151
6,762
565
12,645
28
628
2,239,439
133,777
2,513,118
124,783
4,692,197
280,298
5,279,145
262,123
3,006
1,000
449
100
3,006
1,000
449
100
1,125,012
185,095
1,125,012
185,095
2,294,023
18,839
2,395,892
(10,624)
3,423,041
204,483
3,524,910
175,020
The translated USD figures are for supplementary reporting purposes.
59
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW COMPANY STATEMENT OF FINANCIAL POSITION - 30 SEPTEMBER 2021
(CONTINUED)
Note
2021
2021
2020
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Non-current liabilities
Interest bearing liabilities
Leases
Deferred liability
Deferred tax liability
Current liabilities
Interest bearing liabilities
Leases
Trade and other payables
Provisions
Amounts due to related companies
Bank overdrafts
23
24
25
23
24
26
27
28
20
195,555
11,682
190,218
9,445
1,873
2,124
112
127
8,172
3,356
10(e)
55,905
3,340
41,153
255,457
15,261
242,899
210,709
12,587
326,899
16,231
6,597
293,054
119,649
77,273
394
14,461
17,507
232,844
7,147
4,616
61,200
705,110
170,822
306,417
18,304
1,013,699
60,555
1,511,336
406
167
2,043
12,061
718
11,561
3,039
35,011
8,482
75,042
Total equity and liabilities
4,692,197
280,299
5,279,145
262,123
The financial statements on pages 51 to 154 were approved by the Board of Directors on 30 November 2021 and were
signed on its behalf by:
Michael Mundashi SC
Chairman
Walter Roodt
Chief Executive Officer
The translated USD figures are for supplementary reporting purposes.
60
Zambeef Products PLC Annual Report 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Note
2021
2021
2020
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Cash inflow from operating activities
Profit/(Loss)before taxation
Finance costs
Loss on disposal of property, plant and equipment
9
203,971
115,282
2,260
9,658
5,458
107
Depreciation
14
160,471
7,598
141,408
Share of loss on equity accounted investment
Profit on discontinued operations
Fair value price adjustment
Defined benefits movement
Defined benefits paid
Net unrealised foreign exchange losses
Earnings before interest, tax, depreciation and
amortisation, fair value adjustments and net
unrealised foreign exchange losses
Decrease/(increase) in biological assets
Increase in inventory
(22,673)
(1,402)
92,322
4,796
3,177
1,529
14,381
(3,185)
(1,788)
5,709
297
8,745
196
95
889
(197)
(111)
185,438
11,468
3,358
-
(6,651)
4,473
(6,971)
(19,422)
16
25
159
-
(315)
212
(330)
(920)
456,771
(176,041)
21,627
(8,335)
415,405
(20,269)
25,689
(1,253)
(94,206)
(4,461)
(162,481)
(10,048)
(Increase)/decrease in trade and other receivables
(101,408)
(4,802)
(34,643)
(2,142)
Decrease/(Increase) in amounts due from related
companies
5,135
243
(2,410)
Increase/(decrease) in trade and other payables
198,415
9,395
122,496
Increase in amounts due to related companies
Income tax paid
10(c)
(443)
(4,734)
(21)
(224)
192
(5,525)
(149)
7,575
12
(342)
Net cash inflow from operating activities
283,489
13,422
312,765
19,342
Investing activities
Purchase of property, plant and equipment
14
(116,629)
(5,522)
(92,664)
(5,731)
Proceeds from the sale of assets
Proceeds from the sale of assets/investments
Net cash (outflow)/inflow (on)/ from investing
activities
51
-
2
-
6,452
399
167,264
10,344
(116,578)
(5,520)
81,052
5,012
The translated USD figures are for supplementary reporting purposes.
61
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2021 (CONTINUED)
Net cash (outflow)/ inflow before financing
activities
166,911
7,902
393,817
24,354
Note
2021
2021
2020
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Financing activities
Long term loans repaid
Receipt from term loans
Repayment short term funding
Receipt of short-term funding
Lease finance repayment
Lease finance obtained
Finance costs
29
29
29
29
29
9
(262,705)
(12,439)
(162,217)
(10,032)
220,000
10,417
-
-
(477,906)
(22,628)
(623,231)
(38,542)
449,619
(32,513)
21,289
(1,539)
487,320
(35,478)
-
-
14,329
30,137
(2,194)
886
(115,282)
(5,458)
(92,322)
(5,709)
Net cash outflow on financing activities
(218,787)
(10,358)
(411,599)
(25,454)
Decrease in cash and cash equivalents
(51,876)
(2,456)
(17,782)
(1,100)
Cash and cash equivalents at beginning of the year
(236,909)
(11,763)
(274,425)
(20,790)
Effects of exchange rate changes on the balance
of cash held in foreign currencies
Cash and cash equivalents at end of the year
Represented by:
Cash in hand and at bank
Bank overdrafts
20
20
20
120
(3,025)
55,298
10,127
(288,665)
(17,244)
(236,909)
(11,763)
201,539
12,039
111,136
5,518
(490,204)
(29,283)
(348,045)
(17,281)
(288,665)
(17,244)
(236,909)
(11,763)
The translated USD figures are for supplementary reporting purposes.
62
Zambeef Products PLC Annual Report 2021 COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2021
Note
2021
2021
2020
2020
ZMW’000s USD’000s
ZMW’000s USD’000s
Cash inflow from operating activities
Profit before taxation
Finance costs
Depreciation
Fair value price adjustment
Loss on disposal of property, plant and equipment
Share of loss on equity accounted investment
Defined benefit movement
Defined benefits paid
Profit on discontinued operations
14
16
147,144
84,981
87,466
3,323
553
3,358
2,241
6,967
4,024
4,141
157
26
159
106
(3,473)
(164)
-
-
34,203
68,747
80,462
15,464
1,216
3,177
312
(611)
1,529
2,115
4,252
4,976
956
75
196
19
(38)
95
Net unrealised foreign exchange differences
34,065
1,613
180,954
11,193
Earnings before interest, tax, depreciation and
amortisation
Increase in biological assets
Decrease/(increase) in inventory
Increase in trade and other receivables
(Increase)/decrease in amounts due from related
companies
359,658
(168,448)
17,029
(7,976)
385,453
23,839
(2,286)
41,109
1,946
(130,482)
(41,147)
(1,948)
(22,402)
(141)
(8,069)
(1,385)
539,563
25,545
(275,999)
(17,069)
Increase in trade and other payables
118,659
5,618
74,340
4,597
Increase in amounts due to related companies
(627,837)
(29,727)
215,065
13,300
Income tax paid
10(c)
(2,997)
(142)
(5,314)
(329)
Net cash inflow from operating activities
218,560
10,347
238,375
14,743
Investing activities
Purchase of property, plant and equipment
14
(43,129)
(2,042)
(35,385)
Proceeds from disposal of investment
Proceeds from sale of assets
Net cash (outflow)/inflow (on)/from investing
activities
-
233
-
11
167,264
4,205
(2,188)
10,344
260
(42,896)
(2,031)
136,084
8,416
The translated USD figures are for supplementary reporting purposes.
63
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2021 (CONTINUED)
Net cash inflow before financing activities
175,664
8,316
374,459
23,159
Note
2021
2021
2020
2020
ZMW’000s USD’000s
ZMW’000s USD’000s
Financing activities
Long term loans repaid
Receipt from term loans
Short term funding repaid
Short term funding obtained
Lease finance repayment
Lease finance obtained
Interest paid
29
29
29
29
29
29
(262,705)
(12,439)
(162,217)
(10,032)
220,000
10,417
-
-
(477,906)
(22,628)
(623,231)
(38,542)
449,619
21,289
487,320
(14,163)
(671)
(30,835)
-
-
14,329
30,137
(1,907)
886
(84,981)
(4,024)
(68,747)
(4,252)
Net cash outflow on financing activities
(170,136)
(8,056)
(383,381)
(23,710)
Increase/(Decrease) in cash and cash equivalents
5,528
260
(8,922)
(551)
Cash and cash equivalents at beginning of the year
(158,177)
(7,854)
(195,772)
(14,381)
Effects of exchange rate changes on the balance of
cash held in foreign currencies
Cash and cash equivalents at end of the year
Represented by:
Cash in hand and at bank
Bank overdrafts
20
20
20
(40,575)
(3,949)
46,517
7,078
(193,224)
(11,543)
(158,177)
(7,854)
113,193
6,761
12,644
(306,417)
(18,304)
(170,821)
(193,224)
(11,543)
(158,177)
628
(8,482)
(7,854)
The translated USD figures are for supplementary reporting purposes.
64
Zambeef Products PLC Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
1.
2.
The Group
Zambeef Products PLC and its subsidiaries (“Group”) is one of the largest agri-businesses in Zambia.
The Group is principally involved in the production, processing, distribution and retailing of beef,
chicken, pork, milk, dairy products, eggs, edible oils, stock feed and flour. The Group also has large
row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 Ha of
row crops under irrigation and 8,623 Ha of rain-fed/dry-land crops available for planting each year. The
Group also has operations in West Africa in Nigeria and Ghana.
Principal accounting policies
The principal accounting policies applied by the Group in the preparation of these financial statements
are set out below. These policies have been consistently applied to all the periods presented, unless
otherwise stated.
(a) Basis of consolidation
The consolidated financial statements 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 off during the year are included in the consolidated statement of
comprehensive income from the date of their acquisition or up to the date of their disposal.
Intercompany transactions and profits are eliminated on consolidation and all income and profit
figures relate to external transactions only.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit
or loss and net assets that is not held by the Group. The Group attributes total comprehensive
income or loss of subsidiaries between the owners of the parent and the non-controlling interests
based on their respective ownership interests. Profit or loss and other comprehensive income of
subsidiaries acquired or disposed off during the year are recognised from the effective date of
acquisition or up to the effective date of disposal, as applicable.
(b) Going Concern
At the reporting date loans and other finance amounts repayable within twelve months amount to
ZMW223.1 million (USD13.3 million) [2020: ZMW350.2 million (USD17.4 million)]. After reviewing
the available information including the Group’s strategic plans and continuing support from the
Group’s working capital funders, the Directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence for the foreseeable future. For this
reason, they continue to adopt the going concern basis in preparing the financial statements.
The Group will settle all current liabilities from the continued liquidation of stock and expected
increase in income from the key markets in stockfeed and cropping which continue to perform
well. The stocks are fast moving consumer goods. The Group also has access to bank financing
facilities for working capital funding.
The outbreak of the COVID-19 pandemic has had a negative effect on the country’s economy.
However, the consumer demand for Zambeef’s products stood up well and the current trading
conditions are expected to continue in the near future. The effect on the business, in terms
of sales, from the pandemic has been minimal but has been negatively affected by the steep
depreciation of the currency resulting in exchange losses.
65
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(c) Basis of presentation
The financial statements are prepared in accordance with the provisions of the Zambian
Companies Act 2017 and International Financial Reporting Standards (IFRS). The financial
statements are presented in accordance with IAS 1 “Preparation of financial statements”
(Revised 2007). The Group has elected to present the “Statement of Comprehensive Income” in
one statement namely the “Statement of Comprehensive Income”.
The financial statements have been prepared under the historic cost convention, as modified by
the revaluation of property, plant and equipment, and financial assets and liabilities at fair value
through profit or loss. Biological assets are measured at fair value less costs to sell.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements,
are disclosed in note 3.
Foreign currencies
(i)
Presentation and functional currency
The Company has twelve operating branches, of which eleven have a functional currency
of Zambian Kwacha (ZMW) and one (the Mpongwe Farms Branch) has a functional
currency of United States Dollars (USD) being an operational branch set up during the
year ended 30 September 2012. Management have chosen a variant on the functional
currency of Mpongwe due to the following factors:
-
the majority of farm input costs (fertilizer, farming chemicals, agricultural machinery
spares, etc.), which are primarily sourced from overseas, are driven by USD to ZMW
exchange rate due to origin prices being USD;
the pricing of Mpongwe’s principal outputs (wheat, soya and maize) are significantly
influenced by world USD denominated grain prices;
the capital raised attached to the acquisition of the Mpongwe assets was
denominated in foreign currency;
the Mpongwe assets were purchased in USD; and
the majority of financial liabilities associated with working capital funding and capital
expenditure are sourced in USD and repayable in USD, with a substantial portion of
the Company’s term liabilities secured on the assets of Mpongwe.
-
-
-
-
In light of this, Mpongwe’s assets and liabilities are translated to ZMW and consolidated
with other branches of the Company for reporting and tax purposes in Zambia.
As a result of using a functional currency of USD for Mpongwe, there arose an exchange
difference of ZMW271.9 million (2020: ZMW609.3 million) upon translating all assets
and liabilities, which has been recognised as an unrealised gain in the statement of
comprehensive income of the Company. All the assets and liabilities for Mpongwe are
translated from the functional currency USD to the local currency ZMW which gives rise
to exchange differences.
(d)
66
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(d)
Foreign currencies (continued)
(i)
Presentation and functional currency (continued)
The Group’s reporting currency is Kwacha (ZMW). The presentation of the financial
statements and related disclosures in USD is supplementary information.
(ii) Basis of translating presentation currency to USD for the purposes of supplementary
information
Income statement items have been translated using the average exchange rate for the
year as an approximation to the actual exchange rate. Assets and liabilities have been
translated using the closing exchange rate. Any differences arising from this process
have been recognised in other comprehensive income and accumulated in the foreign
exchange reserve in equity.
Equity items have been translated at the closing exchange rate. Exchange differences
arising on retranslating equity items and opening net assets have been transferred to the
foreign exchange reserve within equity.
The following exchange rates have been applied:
ZMW: USD
Average exchange rate
Closing exchange rate
Year ended 30 September 2020
Year ended 30 September 2021
16.17
21.12
20.14
16.74
All historical financial information, except where specifically stated, is presented in
Zambian Kwacha rounded to the nearest ZMW’000s and United States Dollars rounded
to the nearest USD’000s.
(iii) Basis of translating transactions and balances
Foreign currency transactions are translated into the functional currency using the rates
of exchange prevailing at the date of transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognized in the Statement of Comprehensive Income.
Non-operating foreign exchange gains and losses mainly arise on fluctuations of the
exchange rate between United States Dollars and Zambian Kwacha. Due to the instability
of the exchange rate, which may result in significant unrealised variances of foreign
exchange related assets and liabilities, these gains and losses have been presented below
operating profit in the Statement of Comprehensive Income.
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Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(d)
Foreign currencies (continued)
(iv) Basis of translating foreign operations
In the consolidated financial statements, the financial statements of the foreign subsidiaries
originally presented in their local currency have been translated into Zambian Kwacha.
Assets and liabilities have been translated into Zambian Kwacha at the exchange rates
ruling at the year end. Statement of comprehensive income items have been translated at
an average monthly rate for the year. Any differences arising from this procedure are taken
to the foreign exchange reserve.
ZMW: Nigeria Naira
Average exchange rate
Closing exchange rate
Year ended 30 September 2020
Year ended 30 September 2021
23.10
24.48
19.00
18.55
ZMW: Ghana Cedi
Average exchange rate
Closing exchange rate
Year ended 30 September 2020
Year ended 30 September 2021
0.35
0.36
0.29
0.28
(e)
New standards adopted at 1 October 2020
Other Standards and amendments that are effective for the first time in 2020 and could be
applicable to the Group are as follows:
•
•
•
•
•
Definition of a Business (Amendments to IFRS 3)
Definition of Material (Amendments to IAS 1 and IAS 8)
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
Amendments to Refences to the Conceptual Framework (Various Standards)
COVID-19 Rent Related Concessions (Amendments to IFRS 16)
The pronouncements which have become effective and have therefore, been adopted do not
have a significant impact on the Group’s financial results or position.
There are no new standards and amendments which have been issued and are effective in the
current or future periods anticipated to have material impact.
(f)
Standards, amendments and Interpretations to existing Standards that are not yet effective
and have not been adopted early by the Group
Other Standards and amendments that are not yet effective and have not been adopted early by
the group include:
•
•
•
•
References to the Conceptual Framework
Proceeds before Intended Use (Amendments to IAS 16)
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
Annual Improvements to IFRS Standards 2018-2020 Cycle (Amendments to IFRS 1,
IFRS 9, IFRS 16, IAS 41)
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
•
Management anticipates that all relevant pronouncements will be adopted for the first period
beginning on or after the effective date of the pronouncement. New Standards, amendments
and Interpretations not adopted in the current year have not been disclosed as they are not
expected to have a material impact on the Group’s financial statements.
68
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(g) Business combinations
On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at
their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair
values of the identifiable net assets acquired is recognized as goodwill. Any deficiency of the
cost of acquisition below the fair values of the identifiable net asset acquired is credited to
the statement of comprehensive income in the period of acquisition. Changes in the Group’s
ownership interest that do not result in a loss of control are accounted for as equity transactions.
Purchase of non-controlling interests are recognized directly within equity being the difference
between the fair value of the consideration paid and the relevant share acquired of the carrying
value of the net assets to the subsidiary.
Contingent and deferred consideration arising as a result of acquisitions is stated at fair value.
Contingent and deferred consideration is based on management’s best estimate of the likely
outcome and best estimate of fair value, which is usually, but not always, a contracted formula
based on a multiple of net profit after tax. All acquisition expenses are recognised in the
statement of comprehensive income.
All transactions and balances between Group companies are eliminated on consolidation,
including unrealised gains and losses on transactions between Group companies. Where
unrealised losses on intra-group asset sales are reversed on consolidation, the underlying
asset is also tested for impairment from a Group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed off during
the year are recognised from the effective date of acquisition, or up to the effective date of
disposal, as applicable.
The Group attributes total comprehensive income or loss of subsidiaries between the owners of
the parent and the non-controlling interests based on their respective ownership interests.
Investments in associates are accounted for using the equity method. The carrying amount of
the investment in associates is increased or decreased to recognise the Group’s share of the
profit or loss and other comprehensive income of the associate adjusted, where necessary to
ensure consistency with the accounting policies of the Group. Unrealised gains and losses on
transactions with the Group and its associates are eliminated to the extent of the Group’s interest
in those entities where the unrealised losses are eliminated. Management exercises judgement
in determining the impairment of the underlying asset.
69
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(h) Discontinued operations
A discontinued operation is a component of the entity that has been disposed of. A component
can be distinguished operationally and for financial reporting purposes if:
•
•
•
its operating assets and liabilities can be directly attributed to it
its income (gross revenue) can be directly attributed to it
at least a majority of its operating expenses can be directly attributed to it.
Profit or loss from discontinued operations, including prior year comparatives, is presented in
a single amount in the income statement. This amount comprises the post-tax profit or loss of
discontinued operations and the post-tax gain or loss resulting from the disposal of the Group’s
share of the entity’s net assets.
The disclosures for discontinued operations in the prior years relate to all operations that have
been discontinued by the reporting date for the latest period presented.
Non-current assets classified as held for sale are presented separately and measured at the
lower of their carrying amounts immediately prior to their classification as held for sale and their
fair value less costs to sell.
Once classified as held for sale, the assets are not subject to depreciation or amortisation. Any
profit or loss arising from the sale of a discontinued operation or its remeasurement to fair value
less costs to sell is presented as part of a single line item, profit or loss from discontinued
operations.
(i)
Impairment testing of goodwill and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there
are largely independent cash inflows (cash-generating units). As a result, some assets are
tested individually for impairment and some are tested at cash-generating unit level. Goodwill is
allocated to those cash-generating units that are expected to benefit from synergies of a related
business combination and represent the lowest level within the Group at which management
monitors goodwill.
Cash-generating units to which goodwill has been allocated (determined by the Group’s
management as equivalent to its operating segments) are tested for impairment at least annually.
All other individual assets or cash-generating units are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s (or cash-generating unit’s)
carrying amount exceeds its recoverable amount, which is the higher of fair value less costs
of disposal and value-in-use. To determine the value-in use, management estimates expected
future cash flows from each cash-generating unit and determines a suitable discount rate in
order to calculate the present value of those cash flows. The data used for impairment testing
procedures are directly linked to the Group’s latest approved budget, adjusted as necessary
to exclude the effects of future reorganisations and asset enhancements. Discount factors are
determined individually for each cash-generating unit and reflect current market assessments of
the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill
allocated to that cash generating unit. Any remaining impairment loss is charged pro rata to the
other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an
impairment loss previously recognised may no longer exist. An impairment loss is reversed if the
asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount.
70
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(j)
Revenue recognition
Revenue arises mainly from the sale of cold chain food products, stock feed and cropping.
To determine whether to recognise revenue, the Group follows a 5 step process:
1)
2)
3)
4)
5)
identifying the contracts with a customer;
identifying the performance obligations;
determining the transaction price;
allocating the transaction price to the performance obligations; and
recognising revenue when/as performance obligations are satisfied.
Revenue is recognised at the point in time when control has passed to the customer. This is
when delivery of the product is made to the customers or when customers collect the product
from one of the group’s locations.
A liability is reconginsed for all amounts received in advance for which the performance obligation
of transferring the goods to the customer has not been met. Similarly, if the Group satisfies a
performance obligation before it receives consideration, the Group recognises a receivable in
the statement of financial position.
Cropping
Revenue from cropping is from the sale of wheat, soya and maize grain. The price of the grain
is agreed as per the contract with the customers and the customers are only invoiced when
customer takes delivery of the grain. Revenue is recognised when performance obligations are
satisfied by delivering the grain.
Cold chain food products
The cold food chain products are mainly beef, chicken, pork, fish, milk and dairy products.
These products are sold through the group’s retailing network, most of which is through cash
sales. The credit sales are only invoiced when the products are delivered to the customer or
when the customer collects the products.
Stockfeed
Stockfeed is sold through the Group’s retail network and on contract to certain customers. The
sales through the retail network are cash sales. The credit sales are invoiced when the customer
takes delivery of the stock feed.
Chicks
Revenue for the sale of day-old chicks is generated through direct sales to customers through
the Zambeef outlets and through agents. Customers and agents make advance payments before
getting delivery of the chicks. Revenue is recognised when the customer collects the chicks and
is invoiced.
Mill and bakery
The revenue for mill and bakery is from the sale of flour mill and bread. The flour mill and bread
are sold through the Group’s retail network and are mainly for cash sales.
71
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(k) Property, plant and equipment
All classes of property, plant and equipment are stated at valuation except for plantation
development expenditure and capital work in progress which are stated at historical cost. Capital
work in progress relates to internally constructed building parts and plant and machinery and
are categorised as such on completion. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
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 profit or loss in the statement of comprehensive income during the
financial year in which they are incurred.
The Group has adopted a policy of revaluing all classes of property, plant and equipment,
excluding capital work in progress. Revaluations are conducted at least every five years.
The assets’ residual values and useful lives are reviewed at each reporting date and adjusted
where 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.
Management considers available market information at the reporting date to assess whether the
asset values are appropriate.
Any revaluation surplus is recognised in other comprehensive income and credited to the
revaluation reserve in equity. However, to the extent that any revaluation decrease or impairment
loss has previously been recognised in profit or loss, a revaluation increase is credited to profit
or loss with the remaining part of the increase recognised in other comprehensive income.
Downward revaluations of an assets are recognised upon appraisal or impairment testing, with
the decrease being charged to other comprehensive income to the extent of any revaluation
surplus in equity relating to this asset and any remaining decrease recognised in profit or loss.
Any revaluation surplus remaining in equity on disposal of the asset is transferred 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:
Buildings
Motor vehicles
Aircraft
Furniture & equipment
Plant & machinery
2%
20%
10%
10%
10%
Land and capital work in progress are not depreciated.
72
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(k) Property, plant and equipment (continued)
Gains and losses on disposals are determined by comparing the proceeds with the carrying
amount. These are included in the statement of comprehensive income in other income. When
revalued assets are sold, the amounts included in the revaluation surplus relating to these assets
are transferred to retained earnings.
(l)
Leased assets
The Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract,
or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of
time in exchange for consideration’.
To apply this definition the Group assesses whether the contract meets three key evaluations
which are whether:
•
the contract contains an identified asset, which is either explicitly identified in the contract
or implicitly specified by being identified at the time the asset is made available to the
Group
the Group has the right to obtain substantially all of the economic benefits from use of
the identified asset throughout the period of use, considering its rights within the defined
scope of the contract
the Group has the right to direct the use of the identified asset throughout the period of use.
•
•
The Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used
throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on
the balance sheet. The right-of-use asset is measured at cost less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease liabilities.
The Group depreciates the right-of-use assets on a straight-line basis from the lease
commencement date to the earlier of the end of the useful life of the right-of-use asset or the
end of the lease term. The Group also assesses the right of-use asset for impairment when such
indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the
lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that
rate is readily available or the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments
(including in substance fixed), variable payments based on an index or rate, amounts expected
to be payable under a residual value guarantee and payments arising from options reasonably
certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased
for interest. It is remeasured to reflect any reassessment or modification, or if there are changes
in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-
use asset, or profit and loss if the right-of-use asset is already reduced to zero.
73
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(l)
Leased assets(continued)
The Group has elected to account for short-term leases and leases of low-value assets using the
practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments
in relation to these are recognised as an expense in profit or loss on a straight-line basis over the
lease term.
On the statement of financial position, right-of-use assets have been included in property, plant
and equipment and lease liabilities have been presented on the face of the balance sheet.
Take-on values of right of use assets and liabilities have been based on future lease payments,
discounted at the prevailing incremental borrowing rate to present values. The incremental
borrowing rates are based on the cost of borrowing from third party financiers.
(m) Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the
financial asset expire, or when the financial asset and substantially all the risks and rewards are
transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or
expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and
are measured at the transaction price in accordance with IFRS 15, all financial assets are initially
measured at fair value adjusted for transaction costs (where applicable).
74
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(m)
Financial instruments (continued)
Financial assets, other than those designated and effective as hedging instruments, are classified
into the following categories:
•
amortised cost
•
fair value through profit or loss (FVTPL)
In the periods presented the corporation does not have any financial assets categorised as
FVOCI.
•
•
The classification is determined by both:
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are
presented within finance costs, finance income or other financial items, except for impairment of
trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and
are not designated as FVTPL):
•
they are held within a business model whose objective is to hold the financial assets and
collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments
of principal and interest on the principal amount outstanding
•
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash
equivalents, trade and most other receivables fall into this category of financial instruments as
well as listed bonds that were previously classified as held-to-maturity under IAS 39.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or
‘hold to collect and sell’ are categorised at fair value through profit and loss. Further, irrespective
of business model financial assets whose contractual cash flows are not solely payments of
principal and interest are accounted for at FVTPL.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss.
The fair values of financial assets in this category are determined by reference to active market
transactions or using a valuation technique where no active market exists.
75
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NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(m) Financial instruments (continued)
Impairment of financial assets
IFRS 9’s impairment requirements use more forward-looking information to recognise expected
credit losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of the new
requirements included loans and other debt-type financial assets measured at amortised cost
and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and
loan commitments and some financial guarantee contracts (for the issuer) that are not measured
at fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss
event. Instead the Group considers a broader range of information when assessing credit risk
and measuring expected credit losses, including past events, current conditions, reasonable
and supportable forecasts that affect the expected collectability of the future cash flows of the
instrument.
In applying this forward-looking approach, a distinction is made between:
•
•
financial instruments that have not deteriorated significantly in credit quality since initial
recognition or that have low credit risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in credit quality since initial
recognition and whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected
credit losses’ are recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of
credit losses over the expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as
well as contract assets and records the loss allowance as lifetime expected credit losses. These
are the expected shortfalls in contractual cash flows, considering the potential for default at
any point during the life of the financial instrument. In calculating, the Group uses its historical
experience, external indicators and forward-looking information to calculate the expected credit
losses using a provision matrix.
The Group assess impairment of trade receivables on a collective basis as they possess shared
credit risk characteristics, they have been grouped based on the days past due. Refer to Note
18 for a detailed analysis of how the impairment requirements of IFRS 9 are applied.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative
financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction
costs unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest
method except for derivatives and financial liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses recognised in profit or loss (other than derivative
financial instruments that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument’s fair value that are
reported in profit or loss are included within finance costs or finance income.
76
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(n) Biological assets
Biological assets are valued at their fair values less estimated point of sale costs as determined
by the Directors. The fair value of livestock is determined based on market prices of animals of
similar age, breed and genetic merit. Standing crops are revalued to fair value at each reporting
date based on the estimated market value of fully grown standing crops adjusted for the age and
condition of the crops at the reporting date. Feedlot, standing and dairy cattle, chickens (broilers
and layers), and pigs have been classified as current biological assets based on Directors’
expectation of their useful economic life. Upon maturity of biological assets, they are transferred
to inventory through harvest and culling.
Net gains and losses arising from changes in fair value less estimated point of sale costs of
biological assets are recognised in profit and loss in the statement of comprehensive income.
(o)
Inventory
Inventory is stated at the lower of cost and net realizable 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, including production overheads based on
normal level of activity. Net realizable value takes into account all further costs directly related to
marketing, selling and distribution.
Biological assets are transferred to inventory at the point of harvest/slaughter at fair value in
accordance with IAS 41.
(p) Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank overdrafts, deposits held at call with
banks and balances held with banks.
Bank overdrafts are defined as facilities which are repayable on demand and classified as current
liabilities.
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NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(q)
Interest bearing liabilities
Short-term interest-bearing liabilities include all amounts expected to be repayable within twelve
months from the reporting date, including instalments due on loans of longer duration. Long-
term interest-bearing liabilities represent all amounts payable more than twelve months from the
reporting date.
(r) Other income
Other income is income not related to the operation or management of the specific business
activities of the Group, but which arises from the function of operating an agri-business. Other
income comprises the fair value of the consideration received or receivable.
(s) Taxation
(i)
Current income tax assets and/or liabilities comprise those obligations to, or claims from,
fiscal authorities relating to the current or prior reporting periods, that are unpaid at the
reporting date. Current tax is payable on taxable profit, which differs from profit or loss in
the financial statements. Calculation of current tax is based on tax rates and tax laws that
have been enacted or substantively enacted by the end of the reporting period.
(ii)
Deferred income taxes are calculated using the liability method on temporary differences
between the carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, or on the initial
recognition of an asset or liability unless the related transaction is a business combination
or affects tax or accounting profit. Deferred tax on temporary differences associated with
investments in subsidiaries and joint ventures is not provided if reversal of these temporary
differences can be controlled by the Group and it is probable that reversal will not occur in
the foreseeable future.
(iii)
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are
expected to apply to their respective period of realization, provided they are enacted or
substantively enacted by the end of the reporting period. Deferred tax liabilities are always
provided for in full.
(iv) Deferred tax assets are recognized to the extent that it is probable that they will be able to
be utilized against future taxable income.
(v)
Deferred tax assets and liabilities are offset only when the Group has a right and intention
to set off current tax assets and liabilities from the same taxation authority.
(vi) Changes in deferred tax assets or liabilities are recognized as a component of tax income
or expense in profit or loss, except where they relate to items that are recognized in other
comprehensive income or directly in equity, in which case the related deferred tax is also
recognized in other comprehensive income or equity, respectively.
78
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(t)
Employee benefits
(i)
Pension obligations
The Group has a plan with National Pension Scheme Authority (NAPSA) where the Group
pays an amount equal to the employee’s contributions. Employees contribute 5 per cent.
of their gross earnings up to the statutory cap.
(ii)
Termination benefits
Termination benefits are payable when employment is terminated before the normal
retirement date, or whenever an employee accepts voluntary redundancy in exchange for
these benefits. The Group recognises termination benefits in exchange for the termination
of an employee’s employment as a result of either its termination of an employee’s
employment before normal retirement date or when an employee decides to accept an
offer of benefits in exchange for the termination of employment.
(u) Dividend distributions
Dividend distributions to the Company’s shareholders are recognised as a liability in the financial
statements in the year in which the dividends are approved by the Company’s shareholders at a
general meeting.
(v) Equity and reserves
(i)
Share capital represents the nominal value of shares that have been issued.
(ii)
(iii)
(iv)
(vi)
Share premium includes any premiums received on issue of share capital. Any transaction
costs associated with the issuing of shares are deducted from share premium, net of any
related income tax benefits.
Preference shares are classified as equity if they are non-redeemable and any dividends are
discretionary, or are redeemable but only at the group’s option. Dividends on preference
share capital classified as equity are recognised as distributions within equity.
The revaluation reserve within equity comprises gains and losses due to the revaluation of
property, plant and equipment. This reserve is non-distributable.
Foreign currency translation differences arising from translating to presentational currency
and translating foreign operations are included in the foreign exchange reserve. These
reserves are non-distributable.
(vii) Retained earnings include all current and prior period results as disclosed in the statement
of comprehensive income. All transactions with owners of the parent are recorded
separately within equity.
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NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
2.
Principal accounting policies (continued)
(w) Segmental reporting
IFRS 8 requires segments to be identified on the basis of the internal reports about operating
units of the Group that are regularly reviewed by the Chief Executive Officer and the Chief
Financial Officer who are the Chief Operating Decision Makers (CODMs) to allocate resources
and to assess their performance. The Group operates 12 main reportable divisions which match
the main external revenues earned by the Group:
•
•
•
•
•
•
•
•
•
•
•
•
Retailing Zambia
Retailing – West Africa
Beef
Chicken
Day-old chicks
Pork
Milk and dairy
Eggs
Stockfeed
Crops
Mill and Bakery
Leather and shoe
The business activities are grouped in these segments based on the nature of their business and
in the case of Retailing - West Africa the geographical area in which they conduct their business.
Due to the nature of the Group’s operations, namely that groups of assets and liabilities are
each used to generate a number of the revenue streams above, balance sheet items cannot
be discretely allocated to the above components, and the CODM also review management
information regarding the operating assets and liabilities of the main reporting entities within the
Group as follows:
•
•
•
•
Zambeef
Retailing
Master Pork
Other
The ‘Other’ segment includes the foreign subsidiaries, Zamleather Limited, Zam Chick Limited
and Zamhatch Limited. Foreign subsidiaries include the Group’s two majority-owned subsidiaries
in Nigeria and Ghana. Inter and intra-divisional, and inter-company sales are recognised based
on an internally set transfer price. The prices are reviewed periodically and aim to reflect what
each business segment could achieve if it sold its output to external parties at arm’s length.
(x) Provisions
Provisions for legal disputes, employee benefits or other claims are recognised when the Group
has a present legal or constructive obligation as a result of a past event, it is probable that an
outflow of economic resources will be required from the Group and amounts can be estimated
reliably. The timing or amount of the outflow may still be uncertain. Provisions are not recognised
for future operating losses. Provisions are measured at the estimated expenditure required to
settle the present obligation, based on the most reliable evidence available at the reporting date,
including the risks and uncertainties associated with the present obligation. Where there are
a number of similar obligations, the likelihood that an outflow will be required in settlement is
determined by considering the class of obligations as a whole.
80
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
3.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with adopted IFRS requires management to
make judgements and estimates that affect the application of policies and reported amounts of assets,
liabilities, income, expenses and contingent liabilities. Estimates are based on historical experience
and other assumptions that are considered reasonable under the circumstances.
Significant management judgements
Recognition of deferred tax assets
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised. Management applies judgement
in assessing whether a deferred tax asset is recognised on carried forward trading losses based on
anticipated future profits. This considers projections made by the business and expected future market
conditions. The company from which the deferred tax asset arises has projected taxable profits against
which the tax losses will be utilised within the five year expiry period.
Estimation Uncertainty
Information about estimates and assumptions that may have the most significant effects on recognition
and measurement of assets, liabilities, income and expenses is provided below. Actual results may be
substantially different.
(i)
Valuation of biological assets and inventory
Biological assets are measured at fair value less estimated costs to sell. In estimating fair values
and costs to sell, management considers the most reliable evidence at the times the estimates
are made.
The most significant estimate relates to management’s assessment of anticipated yield per
hectare for establishing the fair value of standing crops. This assessment considers historic
yields, climate conditions and certain other key factors. Realisation of the carrying amounts
of biological assets of ZMW358.9 million (USD21.4 million); ZMW6.6 million (USD0.3 million)
(2020: ZMW176.3 million [USD8.7 million]; ZMW14.4 million [USD0.9 million]) is affected by
price changes in different market segments, and ZMW821.7 million (USD38.9 million) (2020:
ZMW524.4 million [USD32.4 million]) is affected by physical changes in different segments. Refer
to note 16.
Inventories are measured at the lower of cost and net realizable value. In estimating net realizable
values, management considers the most reliable evidence available at the times the estimates
are made. Future realization of the carrying amounts of inventory assets of ZMW1,198 million
(USD71.6 million) (2020: ZMW1,103.6 million [USD54.8 million]) is affected by price changes in
different market segments.
(ii)
Impairment of financial assets and goodwill
In assessing impairment, management estimates the recoverable amount of each asset or
cash generating unit based on expected future cash flows and uses an interest rate to discount
them. Estimation uncertainty relates to assumptions about future operating results and the
determination of a suitable discount rate (see Notes 13 and 18).
(iii) Defined benefit obligation (DBO)
Management’s estimate of the DBO is based on a number of critical underlying assumptions such
as standard rates of inflation, mortality, discount rate and anticipation of future salary increases.
Variation in these assumptions may significantly impact the DBO amount and the annual defined
benefit expenses amount (as analysed in Note 25).
81
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
4. Management of financial risk
The Group’s Board of Directors believes that the Group is well positioned in an improving economy.
Factors contributing to the Group’s strong position are:
(a)
(b)
(c)
Increase in the retail foot print of the Group.
Increase in production facilities of the Group, leading to higher volumes available for retail.
Improvements in the management team across various areas of the Group leading to positive
reinforcement of strong operational synergies.
Overall, the Group is in a strong position and has sufficient capital and liquidity to service its operating
activities and debt.
4.1
Financial risk
The Group is exposed to a range of financial risks through its financial assets and financial
liabilities. The most important components of this financial risk are cash flow risk, interest rate
risk, foreign exchange risk and credit risk. These risks 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.
4.2 Credit risk
The Group has exposure to credit risk, which is the risk that a counterparty will be unable to pay
amounts in full when due. The area where the Group is exposed to credit risk is amounts due
from customers.
The Group structures the levels of credit risk it accepts by placing limits on its exposure to the
level of credit 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.
4.3
Interest risk
The Group has exposure to both variable and fixed interest rates on its borrowings. The area
where the Group is exposed to interest risk is where the variable rate benchmark such as LIBOR,
Zambian Treasury Bill rate, or the Bank of Zambia Policy rate may change.
The Group structures its debt with low spreads over the variable rate benchmark and protects
itself with matching fixed interest rates on its borrowings. Management periodically review
economic conditions relating to such variable benchmarks and is allowed to consider alternate
debt structures where the need may arise.
82
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
4. Management of financial risk (continued)
4.4 Capital management
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as
a going concern so that it can continue to provide returns for shareholders and benefits for other
stakeholders.
The Group sets the amount of capital in proportion to its overall financing structure. The Group
manages the capital structure and adjusts it in the light of the economic conditions and the
risk characteristics of the underlying assets. In order to maintain or adjust the capital structure,
the Group may adjust the amount of the dividends paid to shareholders, return capital to
shareholders, issue new shares, or sell assets to reduce debt.
Capital structure
(i) In Zambian Kwacha
Cash and cash equivalents
Interest bearing liabilities
Equity
(ii) In United States Dollars
Cash and cash equivalents
Interest bearing liabilities
Equity
2021
2020
ZMW’000s
ZMW’000s
(288,665)
(425,935)
3,841,987
3,127,387
(236,909)
(560,126)
3,770,739
2,973,704
2021
2020
USD’000s
USD’000s
(17,244)
(25,444)
229,510
186,822
(11,763)
(27,812)
187,226
147,651
The Directors define capital as equity plus cash less borrowings and its financial strategy in the
short term is to minimize the level of debt in the business whilst ensuring sufficient finances are
available to continue the Group’s business activities.
83
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
4. Management of financial risk (continued)
4.5
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from exchange rate fluctuations. Foreign
currency denominated purchases and sales, together with foreign currency denominated
borrowings, comprise the currency risk of the Group. These risks are minimised by matching the
foreign currency receipts to the foreign currency payments as well as holding foreign currency
bank accounts and export sales.
4.6 Agricultural risk
Agricultural production by its nature contains elements of significant risks and uncertainties
which may adversely affect the business and operations of the Group, including but not limited
to the following:
(i)
any future climate change with a potential shift in weather patterns leading to floods or
droughts and associated crop losses;
potential insect, fungal and weed infestations resulting in crop failure and reduced yields;
(ii)
(iii) wild and domestic animal conflicts and crop raiding; and
(iv)
livestock disease outbreaks. Adverse weather conditions represent a significant operating
risk to the business, affecting the quality and quantity of production and the levels of farm
inputs.
The Group minimises these risks through a robust insurance policy on biological stock (crop and
livestock) and grain inventory.
5.
Segmental reporting
An operating segment is a distinguishable component of the Group that engages in business activities
from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by
the Group’s Chief Operating Decision Makers (‘CODMs’), which is the Chief Executive Officer and Chief
Financial Officer, to make decisions about the allocation of resources and assessment of performance
about which discrete financial information is available. Gross margins and other operating results are
reviewed by the CODM and used for such purposes; some of the other costs are shared. The CODM
reviews information regarding the operating divisions which match the main external revenues earned
by the Group, and management information regarding the operating assets and liabilities of the main
business divisions within the Group.
84
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2021
The segment information for the reporting period is as follows:
(i) In Zambian Kwacha
Segment
Revenue
Revenue
Gross
Profit
Gross Profit
Retailing – Zambia
Master Meats Nigeria
Master Meats Ghana
Retailing West Africa
Total Retailing
Beef
Chicken
Day old chicks
Pork
Milk and dairy
Eggs
Total Cold Chain Food Production
Gross Combined Retail and CCFP
Less: Intra/Inter Sales
Combined Retail & CCFP
Stock Feed
Crops
Mill and Bakery
Leather and shoe
Total Other
Total
Less: Intra/Inter Group Sales
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
-
2,579,905
-
203,236
256,481
70,079
-
-
48,805
19,220
-
-
-
-
326,560
2,906,465
-
-
68,025
271,261
630,140
436,035
224,577
396,788
278,913
87,780
-
-
-
-
-
-
161,232
84,452
135,108
49,225
109,735
16,434
-
-
-
-
-
-
2,054,233
4,960,698
(1,705,769)
3,254,929
1,747,742
754,385
-
-
-
-
-
-
293,730
49,661
-
-
44,564
26,015
-
-
-
-
-
-
556,186
827,447
-
827,447
300,436
272,254
-
-
-
-
-
343,391
6,100,447
(1,126,096)
-
-
-
70,579
1,470,716
-
85
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2021 (continued)
(i) In Zambian Kwacha
Segment
Group total
Central operating costs and other
income
Operating profit
Foreign exchange losses
Profit from asset held for sale
Finance costs
Share of loss on equity accounted
investment
Profit before tax
Revenue
Revenue Gross Profit
Gross Profit
ZMW’000s ZMW’000s
ZMW’000s
ZMW’000s
-
-
-
-
-
-
-
-
4,974,351
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,470,716
(1,203,386)
267,330
23,332
31,949
(115,282)
(3,358)
203,971
Segment
Zambia
Nigeria
Ghana
Total
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
Cold Chain Food Production
4,634,138
256,481
70,079
1,747,742
754,385
343,391
-
-
-
-
-
-
4,960,698
1,747,742
754,385
343,391
Stockfeed
Cropping
Other
Sub-total
7,479,656
256,481
70,079
7,806,216
Intra/inter group sales
(2,831,865)
-
-
(2,831,865)
Total
4,647,791
256,481
70,079
4,974,351
Operating assets/(liabilities)
Zambeef
Retailing Masterpork
Other
Total
Property plant and equipment
2,166,483
302,382
94,940
551,213
3,115,018
ZMW’000s ZMW’000s
ZMW’000s ZMW’000s ZMW’000s
1,080,919
124,393
59,560
291,971
1,556,843
Biological assets and
inventories
Cash, cash equivalents and
bank overdrafts
Trade and other receivables
91,702
26,331
(193,224)
(139,704)
17,162
42,823
27,101
(288,665)
73,220
234,076
Trade and other payables
(412,703)
(111,754)
(18,052)
(90,901)
(633,410)
86
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2020
The segment information for the reporting period is as follows:
(i) In Zambian Kwacha
Segment
Revenue
Revenue
Gross
Profit
Gross Profit
Retailing – Zambia
Master Meats Nigeria
Master Meats Ghana
Retailing West Africa
Total Retailing
Beef
Chicken
Day old chicks
Pork
Milk and dairy
Eggs
Total Cold Chain Food Production
Gross Combined Retail and CCFP
Less: Intra/Inter Sales
Combined Retail & CCFP
Stock Feed
Crops
Mill and Bakery
Leather and shoe
Total Other
Total
Less: Intra/Inter Group Sales
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
-
2,177,555
-
188,754
164,275
54,483
-
-
37,924
16,699
-
-
-
-
218,758
2,396,313
-
-
54,623
243,377
522,585
300,668
128,326
285,581
218,207
61,004
-
-
-
-
-
-
164,307
39,037
53,126
53,194
91,760
(148)
-
-
-
-
-
-
1,516,371
3,912,684
(1,399,926)
2,512,758
1,331,965
651,560
-
-
-
-
-
-
173,659
29,950
-
-
34,107
14,569
-
-
-
-
--
-
401,276
644,653
-
644,653
255,888
266,405
-
-
-
-
-
203,609
4,699,892
(824,788)
-
-
-
48,676
1,215,622
-
87
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2020 (continued)
(i) In Zambian Kwacha
Segment
Group total
Central operating costs and other income
Operating profit
Foreign exchange losses
Finance costs
Share of loss on equity accounted
investment
Loss before tax
Revenue
Revenue Gross Profit Gross Profit
ZMW’000s ZMW’000s
ZMW’000s
ZMW’000s
-
-
-
-
-
-
-
3,875,104
-
-
-
-
-
-
-
-
-
-
-
-
-
1,215,622
(1,005,091)
210,531
(137,705)
(92,322)
(3,177)
(22,673)
Segment
Zambia
Nigeria
Ghana
Total
Cold Chain Food Production
3,693,926
164,275
54,483
3,912,684
ZMW’000s ZMW’000s
ZMW’000s
ZMW’000s
Stockfeed
Cropping
Other
Sub-total
1,331,965
-
-
1,331,965
651,560
-
-
651,560
203,609
-
-
203,609
5,881,060
164,275
54,483
6,099,818
Intra/inter group sales
(2,224,714)
-
-
(2,224,714)
Total
3,656,346
164,275
54,483
3,875,104
Operating assets/(liabilities)
Zambeef
Retailing Masterpork
Other
Total
Property plant and equipment
2,476,394
224,825
81,835
481,451
3,264,505
ZMW’000s
ZMW’000s
ZMW’000s ZMW’000s ZMW’000s
Biological assets and
inventories
Cash, cash equivalents and
bank overdrafts
953,583
81,293
25,930
219,139
1,279,945
(158,177)
(119,683)
5,257
35,694
(236,909)
Trade and other receivables
50,555
15,436
14,121
52,556
132,668
Trade and other payables
(232,842)
(33,502)
(3,589)
(51,715)
(321,648)
88
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2021
(ii) In US Dollars
Segment
Retailing – Zambia
Master Meats Nigeria
Master Meats Ghana
Retail – West Africa
Total Retailing
Beef
Chicken
Day old chicks
Pork
Milk and dairy
Eggs
Total Cold Chain Food Production
Gross Combined Retail and CCFP
Less: Intra/Inter Sales
Combined Retail & CCFP
Stock Feed
Crops
Mill and Bakery
Leather and shoe
Total Other
Total
Less: Intra/Inter Group Sales
Group total
Central operating costs and other
income
Revenue
Revenue Gross Profit Gross Profit
USD’000s
USD’000s
USD’000s
USD’000s
-
122,155
12,144
3,318
-
-
-
-
15,462
137,617
29,836
20,646
10,633
18,787
13,206
4,156
-
-
-
-
-
-
-
-
-
-
-
-
97,264
234,881
(80,766)
154,115
82,753
35,719
-
2,311
910
-
-
7,634
3,999
6,397
2,331
5,196
778
-
-
-
-
-
-
13,908
2,352
-
-
2,110
1,232
-
-
-
-
-
16,260
288,847
(53,319)
235,528
-
-
-
-
-
-
9,623
-
-
3,221
12,844
-
-
-
-
-
-
26,335
39,179
-
39,179
14,224
12,891
-
-
3,342
69,636
-
69,636
(56,978)
89
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2021
Segment
Revenue
Revenue Gross Profit Gross Profit
USD’000s
USD’000s
USD’000s
USD’000s
Operating profit
Foreign exchange losses
Profit from asset held for sale
Finance costs
Share of loss on equity accounted
investment
Profit before tax
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,658
1,105
1,513
(5,458)
(159)
9,658
Segment
Zambia
Nigeria
Ghana
Total
Cold Chain Food Production
219,420
12,144
3,318
234,882
USD’000s
USD’000s
USD’000s USD’000s
Stockfeed
Cropping
Other
Sub-total
82,753
35,719
16,259
-
-
-
-
-
-
82,753
35,719
16,259
354,151
12,144
3,318
369,613
Intra/inter group sales
(134,085)
-
-
(134,085)
Total
220,066
12,144
3,318
235,528
Operating assets/(liabilities)
Zambeef Retailing Masterpork
Other
Total
USD’000s USD’000s
USD’000s USD’000s USD’000s
Property plant and equipment
129,420
18,063
Biological assets and inventories
64,571
7,431
Cash, cash equivalents and bank
overdrafts
(11,543)
(8,346)
Trade and other receivables
5,478
1,574
5,671
3,558
1,025
2,558
32,928
186,082
17,441
93,001
1,620
4,373
(17,244)
13,983
Trade and other payables
(24,795)
(6,769)
(1,078)
(5,195)
(37,837)
90
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2020
(ii) In US Dollars
Segment
Retailing – Zambia
Master Meats Nigeria
Master Meats Ghana
Retail – West Africa
Total Retailing
Beef
Chicken
Day old chicks
Pork
Milk and dairy
Eggs
Total Cold Chain Food Production
Gross Combined Retail and CCFP
Less: Intra/Inter Sales
Combined Retail & CCFP
Stock Feed
Crops
Mill and Bakery
Leather and shoe
Total Other
Total
Less: Intra/Inter Group Sales
Group total
Central operating costs and other
income
Revenue
Revenue
Gross Profit
Gross Profit
USD’000s
USD’000s
USD’000s
USD’000s
-
134,666
10,159
3,369
-
-
32,318
18,594
7,936
17,661
13,495
3,773
-
-
-
-
-
-
10,740
1,852
-
-
-
-
-
-
-
13,528
148,194
-
-
-
-
-
-
93,777
241,971
(86,576)
155,395
82,373
40,294
-
-
12,592
290,654
(51,006)
239,648
-
-
2,345
1,033
-
-
10,161
2,414
3,285
3,291
5,675
(9)
-
-
-
-
-
-
2,109
901
-
-
-
-
-
11,673
-
-
3,378
15,051
-
-
-
-
-
-
24,817
39,868
-
39,868
15,824
16,476
-
-
3,010
75,178
-
75,178
(62,158)
91
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
5.
Segmental reporting (continued)
Year ended 30 September 2020
Segment
Operating profit
Foreign exchange losses
Finance costs
Share of loss on equity accounted investment
Loss before tax
Revenue
Revenue
Gross
Profit
Gross
Profit
USD’000s USD’000s USD’000s
USD’000s
13,020
(8,516)
(5,709)
(197)
(1,402)
Segment
Zambia
Nigeria
Ghana
Total
USD’000s USD’000s USD’000s
USD’000s
Cold Chain Food Production
228,444
10,159 3,369
241,972
Stockfeed
Cropping
Other
Sub-total
Intra/inter group sales
Total
Operating assets/
(liabilities)
Property plant and
equipment
Biological assets and
inventories
Cash, cash equivalents and
bank overdrafts
Trade and other receivables
Trade and other payables
82,373
-
-
40,294
-
-
12,592
-
-
82,373
40,294
12,592
363,703
10,159 3,369
377,231
(137,583)
-
-
(137,583)
226,120
10,159 3,369
239,648
Zambeef
Retailing Masterpork
Other
Total
USD’000s
USD’000s
USD’000s
USD’000s USD’000s
122,959
11,163
4,063
23,906
162,091
47,347
4,036
1,288
10,881
63,552
(7,854)
2,510
(11,561)
2021
(5,943)
766
(1,663)
261
701
(519)
1,773
2,610
(11,763)
6,587
(2,228)
(15,971)
2020
Geographical
Non-
current
assets
Revenues
USD’000s
Non-
current
assets Revenues
ZMW’000s
Non-current
assets
Revenues
Non-
current
assets
Revenues
ZMW’000s
ZMW’000s
USD’000s USD’000s ZMW’000s
ZMW’000s USD’000s
USD’000s
Zambia
4,610,294
3,081,088
218,290
184,055
3,618,848
3,236,288
223,794
160,690
West Africa
326,560
33,930
15,463
2,027
218,759
28,217
13,529
1,401
Rest of world
37,497
-
1,775
-
37,497
-
2,325
-
4,974,351
3,115,018
235,528
186,082
3,875,104
3,264,505
239,648
162,091
92
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
6.
Other income
Other income is mainly derived from the rental income received by the letting out of guest houses on
Mpongwe farm and sale of scrap.
7.
Operating profit
(a) Administration expenses (Zambian Kwacha ZMW)
Depreciation
– Owned assets
– Leased assets
Staff costs
Legal and other professional fees
Directors’ remuneration
– Executive
– Non-Executive
Auditors’ remuneration
– Audit services
– Non audit services
Allowance for credit losses
(Loss) on disposal of property, plant and equipment
Rentals under operating leases
Repairs and maintenance
Water and electricity
Other administration expenses
Total Administration costs
2021
2020
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
142,974
24,787
626,772
30,124
13,238
3,437
16,675
5,700
-
5,700
11,743
-
-
119,157
70,989
101,737
84,382
10,531
352,995
30,124
13,238
3,437
16,675
5,700
-
5,700
6,063
-
-
58,286
42,977
30,158
1,150,658
637,891
125,150
16,258
493,484
7,568
11,555
3,374
14,929
4,825
-
4,825
6,980
(4,796)
1,359
85,941
66,078
127,422
945,198
74,440
6,022
255,721
7,229
11,555
3,374
14,929
4,560
-
4,560
3,937
(1,216)
-
41,612
45,418
33,361
486,013
93
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
7.
Operating profit (continued)
(a) Administration costs (US Dollars USD) (continued)
Depreciation
– Owned assets
– Leased assets
Staff costs
2021
2020
Group Company
Group Company
USD’000s USD’000s USD’000s USD’000s
-
6,790
1,174
-
3,995
499
-
7,740
1,005
-
4,604
372
29,677
16,714
30,518
15,815
Legal and other professional fees
1,426
1,426
468
447
Directors’ remuneration
– Executive
– Non-Executive
Auditors’ remuneration
– Audit services
– Non audit services
Allowance for credit losses
(Loss)/profit on disposal of property, plant and
equipment
Rentals under operating leases
Repairs and maintenance
Water and electricity
Other administration expenses
Total Administration costs
(b) Distribution costs
Salaries and Wages
Depreciation
Repairs and Maintenance
Levies and Licences
Transport
Boarding and Lodging
Insurance
Satellite
Travel
Other
Totals
94
626
162
788
270
-
270
701
-
-
626
162
788
270
-
270
362
-
-
716
209
925
298
-
298
432
(32)
84
716
209
925
282
-
282
243
(75)
-
5,641
3,361
4,654
2,760
2,035
1,354
5,315
4,086
7,615
2,573
2,808
2,062
54,482
30,203
58,454
30,056
2021
2020
Group
Company
Group
Company
ZMW’000
USD’000
ZMW’000
USD’000
21,771
14,527
11,641
5,985
5,680
2,709
1,730
1,262
559
984
1,031
688
551
283
269
128
82
60
26
47
21,808
13,179
15,460
6,009
3,389
2,018
2,137
798
1,308
664
1,349
815
956
372
210
125
132
49
81
40
66,848
3,165
66,770
4,129
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
8.
Staff costs
The Group employed an average of 7,029 employees during the year ended 30 September 2021 (2020:
7,082).
Zambeef Products PLC, Zambeef Retailing Limited, Zam Chick
Limited, Zamhatch Limited & Zamleather Limited
Master Pork Limited
Foreign Subsidiaries
Total
2021
Number
2020
Number
6,444
271
314
7,029
6,467
299
316
7,082
Employee costs for all employees of the Group, including Executive Directors, were:
Salaries and wages
Social security costs
Pension costs
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
554,341
39,518
32,913
626,772
26,247
1,871
1,558
29,676
449,513
21,980
21,991
493,484
27,799
1,359
1,360
30,518
Details of Directors’ contracts may be found in the Directors’ Report.
95
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
9.
Finance costs
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Interest on bank loans and overdrafts
113,648
Lease cost
Total
1,634
115,282
5,381
77
5,458
90,190
2,132
92,322
5,577
132
5,709
10.
Taxation
The Group has various tax rates applicable on the basis of individual entities being defined as agricultural
entities or divisions (income tax rate of 10%) or manufacturing entities or divisions (income tax rate of
35%).
(i) In Zambian Kwacha
2021
2020
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
(a) Tax charge
Current tax:
Tax charge
16,541
1,042
5,172
6,277
Deferred tax:
Deferred taxation (note 10(e))
Tax charge/(credit) for the year
18,607
35,148
14,753
15,795
107,785
112,957
34,523
40,800
96
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
10.
Taxation (continued)
2021
2020
Group
Company
Group
Company
ZMW’000s ZMW’000s ZMW’000s ZMW’000s
203,971
147,144
(22,673)
34,203
(b) Reconciliation of tax charge
Profit/(loss) before taxation
Applicable tax rates range from 10% to 35%
depending on the activities of the entities within the
group.
Expected tax expense
(7,870)
14,714
(34,982)
3,420
Adjustment for non-deductible expenses;
Non-cash fringe benefits
Telephone and internet
Other non-deductible expenses*
Unrecognised deferred tax asset for the year **
Tax charge for the year
(c) Movement in taxation account
Taxation recoverable at 1 October
Charge for the year
Taxation paid
Taxation payable/(recoverable) as at 30 September
Analysed as follows:
Taxation payable
Taxation recoverable
2,443
132
3,975
36,468
35,148
(1,743)
16,541
(4,734)
10,064
13,771
(3,707)
10,064
1,182
77
(178)
-
14,619
335
45,015
87,970
7,475
294
29,611
-
15,795
112,957
40,800
(565)
1,042
(2,997)
(2,520)
-
(2,520)
(2,520)
(1,390)
5,172
(5,525)
(1,743)
41
(1,784)
(1,743)
(1,529)
6,278
(5,314)
(565)
-
(565)
(565)
* The non-deductible expenses for 2020 included the balancing charge and contingent fees relating
to the disposal of the Sinazongwe farm.
** The 2020 unrecognised deferred tax asset refers to the reversal of the prior periods deferred tax
asset and the amount for 2021 is the deferred tax movement that has not been recognised.
97
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
10.
Taxation (continued)
(d)
Tax returns for the year ended 30 September 2021 will be made on the due date.
(e) Deferred taxation
Year ended 30
September 2021
Temporary Differences/
Biological Valuation
Group
Recognised
in profit or
loss
1 October
30
September
1 October
Company
Recognised
in profit or
loss
30
September
ZMW’000
ZMW’000
ZMW’000
ZMW’000
ZMW’000
ZMW’000
18,287
17,612
35,899
14,929
15,866
30,795
Property and Equipment
106,198
(13,672)
92,526
63,300
Tax Loss
(54,446)
26,263
(28,183)
(33,074)
Other Provisions
(9,640)
(11,596)
(21,236)
(4,002)
(6,019)
14,784
(9,878)
57,281
(18,290)
(13,880)
Deferred Income Tax
Liability
Year ended 30
September 2020
Temporary Differences/
Biological Valuation
60,399
18,607
79,006
41,153
14,753
55,906
14,162
4,125
18,287
13,716 1,213
14,929
Property and Equipment
58,464
47,734
106,198
60,872 2,428
63,300
Tax Loss
(111,277)
56,831
(54,446)
(65,175)
32,101
(33,074)
Other Provisions
(8,736)
(903)
(9,640)
(2,783)
(1,219)
(4,002)
Deferred Income Tax
Liability
(47,387)
107,787
60,399
6,630
34,523
41,153
Summary
Group
Company
Group
Company
2021
2020
Deferred tax asset
Deferred tax liability
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
(9,050)
88,056
79,006
-
55,906
55,906
(9,552)
69,952
60,400
-
41,153
41,153
(f) Movement in the tax losses within the group
Opening balance at 1 October 2020
Arising during the year
Utilised during the year
Expired during the year
Closing balance at 30 September 2021
ZMW’000s
USD’000s
668,483
36,696
31,652
1,737
(271,518)
(12,856)
(20,170)
413,491
(955)
19,578
98
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
10.
Taxation (continued)
(ii) In US Dollars
2021
2020
Group
Company
Group
Company
USD’000s
USD’000s
USD’000s
USD’000s
(a) Tax charge
Current tax:
Tax charge
Deferred tax:
783
49
320
388
Deferred taxation (note 10(e))
Tax charge/ (credit) for the year
881
1,664
699
748
6,666
6,986
2,135
2,523
(b) Reconciliation of tax charge
2021
2020
Group
Company
Group
Company
USD’000s
USD’000s
USD’000s
USD’000s
Profit/(loss) before taxation
Expected tax expense
Adjustment for non-deductible
expenses
Non-cash fringe benefits
Telephone and internet
Other non-deductible expenses*
Unrecognised deferred tax asset for
the year**
Tax charge for the year
9,658
(373)
116
6
188
1,727
1,664
6,967
697
(1,402)
(2,163)
56
3
(8)
-
748
904
21
2,784
5,440
6,986
4,088
212
462
18
1,831
-
2,523
* The non-deductible expenses for 2020 included the balancing charge and contingent fees relating
to the disposal of the Sinazongwe farm.
** The 2020 unrecognised deferred tax asset refers to the reversal of the prior periods deferred tax
asset and the amount for 2021 is the deferred tax movement that has not been recognised.
99
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
10.
Taxation (continued)
(c) Movement in taxation account
Taxation recoverable at 1 October
Charge for the year
Taxation paid
Foreign exchange differences
Taxation payable/(recoverable) as at 30
September
Analysed as follows:
Taxation payable
Taxation recoverable
2021
2020
Group
Company
Group
Company
USD’000s
(87)
USD’000s
(28)
USD’000s
(106)
USD’000s
(115)
783
(224)
129
601
823
(221)
601
49
(142)
(30)
(151)
-
(151)
(151)
320
(342)
41
(87)
2
(89)
(87)
388
(328)
27
(28)
-
(28)
(28)
(d)
Tax returns for the year ended 30 September 2020 will be made on the due date.
(e) Deferred taxation
Group
Company
Recognised
in profit or
loss
1 October
Foreign
Translation
30
September
1
October
Recognised
in profit or
loss
Foreign
Translation 30 September
USD’000
USD’000
USD’000 USD’000
USD’000
USD’000
Year ended 30
Sept 2021
Temporary
Differences/
Biological
Valuation
Property and
Equipment
Tax Loss
Other Provisions
Deferred Income
Tax Liability
Year ended 30
Sept 2020
Temporary
Differences/
Biological
Valuation
Property and
Equipment
Tax Loss
Other Provisions
Foreign Exchange
Translation
Deferred Income
Tax Liability
100
908
833
403
2,144
923
5,273
(2,703)
(479)
(647)
1,243
(548)
901
(224)
(241)
5,527
3,915
(1,684)
(2,547)
(1,268)
(248)
2,999
881
839
4,719
2,043
751
(285)
700
(467)
699
1,073
(165)
4,429
(8,430)
(662)
844
5,727
183
-
77
(3,590)
6,666
-
-
-
-
-
-
908
1,113
(190)
5,273
4,941
(1,026)
(2,703)
(5,326)
(479)
(226)
2,779
(22)
-
-
594
2,999
502
2,135
165
(208)
754
(113)
598
-
-
-
-
-
-
1,840
3,422
(1,092)
(830)
3,340
923
3,915
(2,547)
(248)
-
2,043
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
10.
Taxation (continued)
(e) Deferred taxation (continued)
Summary
Group
Company
Group
Company
2021
2020
Deferred tax asset
Deferred tax liability
USD’000s
USD’000s
USD’000s
USD’000s
(541)
5,260
4,719
-
3,340
3,340
(474)
3,473
2,999
-
2,043
2,043
All deferred tax assets (including tax losses and other tax credits) have been recognised in the
statement of financial position.
11. Dividends
There has been no dividend paid or proposed for 2021 (2020: ZMW nil).
101
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
12. Earnings per share
Both the basic and diluted earnings per share have been calculated using the profit attributable to
shareholders of the parent company as the numerator, i.e., no adjustments to profit were necessary
in 2020 or 2021. For diluted earnings per share, the number of shares used in the calculation of EPS
includes preference shares.
Basic earnings per share have been calculated in accordance with IAS 33 which requires that earnings
should be based on the net profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares in issue during the period.
The calculation of the basic earnings per share is based on the earnings attributable to ordinary
shareholders divided by the weighted average number of shares in issue during the period.
The earnings and weighted average number of ordinary shares used in the calculation of basic earnings
per share are as follows:
Basic earnings per share
Profit/(loss) for the year
Weighted average number of ordinary shares
for the purposes of basic earnings per share.
2021
2020
ZMW’000s
USD’000s ZMW’000s
USD’000s
167,980
7,955
(103,419)
(6,396)
300,580
300,580
300,580
300,580
Preference shares
100,058
100,058
100,058
100,058
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share.
Basic earnings per share (ZMW ngwee and
US cents) – Continued operations
Basic earnings per share (ZMW ngwee and
US cents) – Discontinued operations
Total Basic earnings per share (ZMW ngwee
and US cents)
Diluted earnings per share
Diluted earnings per share – continued
operations
Diluted earnings per share – discontinued
operations
400,638
400,638
400,638
400,638
Ngwee
US cents
Ngwee
US cents
55.89
2.65
(45.12)
(2.79)
-
-
11.12
0.69
55.89
2.65
(34.00)
(2.10)
41.92
1.99
(45.12)
(2.79)
-
-
11.12
0.69
Total diluted earnings per share
41.92
1.99
(34.00)
(2.10)
102
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
13. Goodwill
Cost and Net Book Value
At 1 October 2019
Foreign exchange difference
At 30 September 2020
Foreign exchange difference
At 30 September 2021
ZMW’000s
USD’000s
166,801
-
166,801
-
166,801
12,636
(4,354)
8,282
1,682
9,964
For the purpose of annual impairment testing, goodwill is allocated to the following cash-generating
units, which are the units expected to benefit from the synergies of the business combinations in which
the goodwill arises, as set out below, and is compared to its recoverable value:
Masterpork
ZamChick
Zamhatch
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
15,699
141,786
9,316
166,801
938
8,470
556
9,964
15,699
141,786
9,316
166,801
779
7,040
463
8,282
The recoverable amount of each segment was determined based on value-in-use calculations, covering
a detailed five-year forecast, followed by an extrapolation of expected cash flows for the remaining
useful lives using a growth rate determined by management. The present value of the expected cash
flows of each segment is determined by applying a discount rate which reflects the Group’s cost of
borrowing and adjusted for specific risks that apply to each segment.
The Group tests annually for impairment, or more frequently if there are indicators that goodwill might
be impaired.
The Board’s key assumptions are based on their past experience and future expectations of the market
over the longer term, but not exceeding five years. The Group’s cost of external borrowing adjusted for
dividend payment history, currency risk and in accordance with IAS 36 ‘Impairment of Assets’ is 15%.
In arriving at the individual segment discount rate, management considered risks that are specific
to each unit. The discount rates used in the value in use calculation for Masterpork, Zamchick and
Zamhatch are 17%, 15.5% and 15% respectively.
Masterpork, Zamchick and Zamhatch are expected to achieve a minimum revenue and profitability
growth rate of 10%, 9%, 6% based on past growth recorded and future expected growth, and in light
of projected increase in Zambia’s population and therefore protein consumption.
103
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
13. Goodwill (continued)
Due to the significant headroom within historical impairment calculations, assumptions including
growth rates of cash flows and changes to selling prices and direct costs have not been sensitised.
Therefore, management is not aware of any significant risk of material adjustment to the goodwill figure
in the next financial year. Management’s key assumptions on the cashflow include stable increase in
profit margins based on the increase in consumption in the domestic market.
Recoverable amount of each operating unit is as follows:
Masterpork
Zamchick
Zamhatch
Total
2021
2021
2020
2020
ZMW’000
USD’000
ZMW’000
USD’000
185,633
11,089
125,313
321,184
801,831
1,308,648
19,187
47,899
78,175
489,678
1,171,154
1,786,145
6,222
24,314
58,151
88,687
The Board is not aware of any other changes that would necessitate changes to its calculations.
14. Property, plant and equipment
(i) In Zambian Kwacha
(a) Group
Land and
buildings
Aircraft
Plant and
machinery
Motor
vehicles
Furniture and
equipment
Capital work
in progress
Total
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
Cost or valuation
As at 1 October 2019
2,043,052
865
874,965
76,528
31,617
25,785
3,052,812
Exchange differences
516,215
Additions
Adjustment for
transition to IFRS16
Disposals
7,938
15,425
(1,153)
Transfer to held for sale
(146,063)
Transfers
11,499
-
-
-
-
-
-
128,710
1,369
27,071
10,079
-
-
(4,875)
(3,203)
(48,406)
(787)
28,720
11,406
As at 30 September
2020
2,446,913
865
1,006,185
Exchange differences
(249,093)
-
(40,472)
16,799
-
(865)
24,739
(1,420)
95,392
(1381)
19,671
(2,106)
820
4,551
-
(55)
(387)
2,061
38,607
(505)
8,276
(69)
-
647,114
43,025
92,664
-
15,425
(4,102)
(13,388)
-
(195,643)
(53,686)
-
11,022
3,598,984
-
(291,451)
47,144
116,629
-
-
(4,460)
(294,207)
6,906
18,688
2,240,213
1,024,486
1,250,727
2,240,213
-
-
-
-
-
-
(277,506)
(18,712)
(4,895)
11,898
865
556
(32,007)
-
723,424
529,199
194,225
93,729
69,225
24,504
41,970
30,857
11,113
26,159
3,125,495
26,159
1,679,925
-
1,445,570
723,424
93,729
41,970
26,159
3,121,495
Additions
Disposals
Revaluation
Transfers
As at 30 September
2021
Cost
Revaluation
104
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14. Property, plant and equipment (continued)
Land and
buildings
ZMW’000s
Aircraft
ZMW’000s
Plant and
machinery
ZMW’000s
Motor
vehicles
ZMW’000s
Furniture
and
equipment
ZMW’000s
Capital
work in
progress
ZMW’000s
Total
ZMW’000s
(a) Group (continued)
Depreciation
As at 1 October 2019
31,036
173
142,639
31,859
Exchange difference
Charge for the year
Charge on right of use
assets
Disposals
(728)
19,304
8,362
-
Transfer to held for sale
(5,044)
-
86
-
-
-
(1,897)
95,912
(982)
21,893
-
-
(598)
(1,536)
(14,507)
(329)
(109)
259
221,549
50,905
-
-
4,144
104,820
(698)
24,404
(1,102)
-
(259)
(401)
As at 30 September
2020
Exchange difference
Charge for the year
Disposals
Revaluation
As at 30 September
2021
Net book value
52,930
507
26,629
(76,814)
3,252
At 30 September 2021
2,236,961
719,280
At 30 September 2020
2,393,983
606
784,636
(325,969)
(71,568)
(12,259)
4,144
1,941
1,098
42
10,477
-
-
-
5,281
(543)
4,213
-
(6)
8,836
(37)
4,618
(60)
-
-
-
-
-
-
-
-
-
-
-
210,988
(4,150)
141,408
8,362
(2,140)
(19,989)
334,479
3,958
160,472
(1,822)
(486,610)
91,788
44,487
40,872
26,117
3,115,018
29,771
11,022
3,264,505
105
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW follows:
Gross carrying
amount
At 1 October 2020
Additions
Disposals
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14. Property, plant and equipment (continued)
(b) Included in the net carrying amount of property, plant and equipment are right-of-use assets as
Land and
buildings
Retail
outlets
Farm
equipment
Production
equipment
Motor
vehicles
and trailers
Total
ZMW’000s ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
3,128
1,633
-
12,297
6,210
-
23,874
5,735
-
30,927
5,580
75,806
-
(5,964)
24,963
-
-
5,580
13,578
(5,964)
83,420
At 30 September 2021
4,761
18,507
29,609
Depreciation and
impairment
At 1 October 2020
1,098
7,264
5,651
9,278
1,329
24,620
Disposals
Depreciation
At 30 September 2021
Carrying amount 30
September 2021
Gross carrying
amount
At 1 October 2019
Adjustment on
transition to IFRS 16
Additions
Disposals
2,092
3,190
-
7,312
14,576
3,854
9,505
(1,789)
2,496
9,985
-
1,552
2,881
(1,789)
17,306
40,137
1,571
3,931
20,104
14,978
2,699
43,283
-
-
23,874
30,927
1,560
56,361
3,128
12,297
-
-
-
15,425
-
-
-
-
4,020
4,020
-
-
-
-
-
-
At 30 September 2020
3,128
12,297
23,874
30,927
5,580
75,806
Depreciation and
impairment
At 1 October 2019
Adjustment on
transition to IFRS 16
Depreciation
-
-
2,334
6,185
366
8,885
1,098
-
7,264
-
-
-
-
3,317
3,093
963
8,362
7,373
At 30 September 2020
1,098
7,264
5,651
9,278
1,329
24,620
Carrying amount 30
September 2020
2,030
5,033
18,223
21,649
4,251
51,186
106
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14. Property, plant and equipment (continued)
(ii) In US Dollars
(a) Group
Land and
buildings
Aircraft
Plant and
machinery
Motor
vehicles
Furniture
and
equipment
Capital
work in
progress
Total
USD’000s USD’000s USD’000s USD’000s USD’000s USD’000s USD’000s
Cost or valuation
As at 1 October 2019
Foreign translation
Additions
Adjustment for transition to
IFRS16
Transfers
Disposals
491
954
711
(71)
Transfer to held for sale
(9,033)
As at 30 September 2020
121,295
Foreign translation
Additions
Transfers
Disposals
Revaluation
10,522
795
885
-
327
As at 30 September 2021
133,824
Cost
Revaluation
61,200
72,624
133,824
154,777
(26,534)
66
(23)
66,284
5,798
(16,480)
(2,144)
1,674
623
2,396
(861)
281
-
128
(3)
(23)
-
705
(198)
(49)
4,735
1,918
877
931
41
(100)
(886)
5,599
4,135
1,463
5,598
406
392
26
(3)
(232)
2,507
1,843
664
2,507
-
-
-
-
-
43
(2)
-
-
(41)
-
-
-
-
-
-
1,776
(301)
(2,994)
49,959
4,728
1,171
563
(67)
(13,139)
43,215
31,613
11,603
43,215
1,953
231,274
(104)
(46,146)
2,661
5,730
-
(3,320)
(254)
954
-
(827)
-
(12,099)
936
(90)
178,886
16,441
2,232
5,522
(1,515)
-
-
-
(211)
(13,930)
1,563
186,708
1,563
100,354
-
86,354
1,563
186,708
107
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14. Property, plant and equipment (continued)
Depreciation
As at 1 October 2019
Charge for the year
Charge on right of use assets
Disposals
Transfer to held for sale
Foreign Translation
As at 30 September 2020
Charge for the year
Disposals
Foreign Translation
Revaluation
As at 30 September 2021
Net book value
At 30 September 2021
At 30 September 2020
Land and
buildings
USD’000s
Aircraft
USD’000s
Plant and
machinery
USD’000s
Motor
vehicles
USD’000s
Furniture
and
equipment
USD’000s
Capital
work in
progress
USD’000s
Total
USD’000s
2,351
1,194
517
-
(312)
(1,020)
2,730
1,261
-
(160)
(3,637)
194
133,629
118,565
13
5
-
-
-
(5)
13
`-
(12)
(1)
-
-
-
30
10,807
5,931
-
(37)
(897)
(4,623)
11,181
4,963
(19)
(443)
2,413
1,354
-
(95)
(20)
(1,219)
2,433
1,155
(57)
(32)
(15,434)
(3,389)
248
116
400
261
-
-
(7)
(216)
438
219
(3)
(8)
(580)
65
-
-
-
-
-
-
-
-
-
3
-
3
15,984
8,745
517
(132)
(1,236)
(7,083)
16,795
7,598
(86)
(641)
(23,040)
626
42,988
38,778
5,466
2,302
2,436
1,480
1,562
936
186,082
162,091
(b)
(a) The Group’s property, plant and equipment situated in Zambia were revalued as at 30 September
2021 by Messrs Fairworld Properties Limited, Registered Valuation Surveyors, on the basis of
market value. The surplus on valuation totalling ZMW192.4million (USD9.1 million) was transferred
to a revaluation reserve.
The depreciation charge for the year includes ZMW44.4 million (USD2.1 million) (2020: ZMW31.3
million [USD1.9 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 Group’s distributable reserve,
an equivalent amount has been transferred to distributable reserve from revaluation reserve.
The capital work in progress depicts all capital expenditure items on projects that are yet to be
completed.
In the opinion of the Directors, the carrying values of property, plant and equipment stated above
are not higher than their fair values.
If the cost model had been used, the carrying amounts of the property plant and equipment would
be ZMW783,131 thousand - USD46,782 thousand (2020: ZMW952,751 thousand - USD47,853).
The revalued amounts include a revaluation surplus of ZMW1,336,606 thousand before tax
(2020: ZMW1,167,913 thousand), which is not available for distribution to the shareholders of
Zambeef Products PLC.
(d)
(c)
(e)
Land and
buildings
Aircraft
Plant and
machinery
Motor
vehicles
Furniture and
equipment
Capital
work in
progress
Total
ZMW’000s ZMW’000s ZMW’000s ZMW’000s
ZMW’000s ZMW’000s ZMW’000s
At 30 September 2021
508,127
At 30 September 2020
531,091
-
-
128,300
58,691
40,869
47,144
783,131
313,557
66,755
41,327
11,021
963,751
USD’000s
USD’000s USD’000s
USD’000s
USD’000s USD’000s USD’000s
At 30 September 2021
At 30 September 2020
30,354
26,370
-
-
7,664
15,569
3,506
3,315
2,441
2,052
2,816
547
46,782
47,853
108
Zambeef Products PLC Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14.
Property, plant and equipment (continued)
(f) Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:
Land and
buildings
Retail
outlets
Farm
equipment
Production
equipment
Motor
vehicles and
trailers
Total
USD’000s
USD’000s
USD’000s
USD’000s
USD’000s USD’000s
Gross carrying amount
At 1 October 2020
Additions
Disposals
Exchange differences
At 30 September 2021
Depreciation and impairment
At 1 October 2020
Exchange differences
Depreciation
Disposals
At 30 September 2021
Carrying amount 30 September
2021
Gross carrying amount
155
98
-
31
284
54
12
125
-
191
611
371
-
124
1,185
344
-
241
1,106
1,770
361
73
437
-
871
281
57
230
-
568
1,536
-
(356)
311
1,491
461
93
149
(107)
596
277
-
-
56
333
66
13
93
-
172
3,764
813
(356)
763
4,984
1,223
248
1,034
(107)
2,398
93
235
1,202
895
161
2,586
Land and
buildings
Retail
outlets
Farm
equipment
Production
equipment
Motor
vehicles and
trailers
Total
USD’000s
USD’000s
USD’000s
USD’000s
USD’000s USD’000s
At 1 October 2019
-
-
1,809
2,343
118
4,270
Adjustment on transition to IFRS
16
193
760
-
-
-
953
Additions
Exchange differences
At 30 September 2020
-
-
-
-
249
249
(38)
155
(150)
(623)
(807)
(90)
(1,708)
610
1,186
1,536
277
3,764
Depreciation and impairment
At 1 October 2019
Exchange differences
Depreciation
At 30 September 2020
Carrying amount 30 September
2020
-
-
177
469
28
674
(14)
68
54
(88)
(101)
(199)
(21)
(423)
449
205
191
60
973
361
281
461
67
1,224
101
249
905
1,075
210
2,540
109
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14. Property, plant and equipment (continued)
(i) In Zambian Kwacha
(b) Company
Cost or valuation
Land and
buildings
ZMW’000s
Plant and
machinery
ZMW’000s
Motor
vehicles
ZMW’000s
Furniture
and
equipment
ZMW’000s
Capital work
in progress
ZMW’000s
Total
ZMW’000s
As at October 2019
1,587,200
528,433
26,676
16,131
23,177
2,181,617
Exchange differences
510,532
129,184
Additions
Transfers
Disposals
4,926
17,291
(1,153)
17,404
4,482
(3,653)
Transfer to held for sale
(146,063)
(48,406)
1,804
3,238
-
(1,936)
(787)
934
2,304
607
(55)
(387)
-
642,454
7,513
35,385
(22,380)
-
(34)
(6,831)
-
(195,643)
As at 30 September 2020
1,972,733
627,444
28,995
19,534
8,276
2,656,982
Exchange differences
(249,603)
(53,934)
Additions
Transfers
Revaluation
Disposals
1,249
17,046
12,607
5,854
-
(1,385)
5,300
(223,612)
(5,844)
(2,860)
(980)
3,261
-
(505)
3,518
-
(305,022)
18,055
43,129
-
(18,461)
-
(142)
25,290
15,175
10,116
(65)
19,624
11,773
7,850
-
-
(227,016)
(1,592)
7,870
2,166,483
7,870
887,142
-
1,279,341
As at 30 September 2021
1,742,286
371,413
Cost
Revaluation
629,476
222,848
1,112,810
148,565
1,742,286
371,413
25,290
19,624
7,870
2,166,483
110
Zambeef Products PLC Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14. Property, plant and equipment (continued)
Depreciation
(i) In Zambian Kwacha
(b) Company
As at 1 October 2021
Charge for the year
Disposals
Assets held for sale
As at 30 September 2020
Charge for the year
Disposals
Land and
buildings
ZMW’000s
Plant and
machinery
ZMW’000s
Motor
vehicles
ZMW’000s
Furniture and
equipment
ZMW’000s
Capital work
in progress
ZMW’000s
Total
ZMW’000s
16,871
9,364
-
(5,044)
21,191
8,612
-
93,131
63,374
(529)
(14,507)
141,469
70,039
(751)
9,050
5,921
(857)
(329)
13,785
6610
(110)
(329)
2,455
1,803
(6)
(109)
4,143
2,205
(52)
(109)
-
-
-
-
-
-
-
-
-
-
121,507
80,462
(1,392)
(19,989)
180,588
87,466
(913)
(19,989)
(267,141)
-
Assets held for sale
(5,044)
(14,507)
Revaluation
(29,803)
(210,757)
(20,285)
(6,296)
As at 30 September 2021
-
-
-
-
Net book value
At 30 September 2021
1,742,286
371,413
At 30 September 2020
1,951,542
485,975
25,290
15,210
19,624
15,391
7,870
2,166,483
8,276
2,476,394
(ii) In US Dollars
(b) Company
Cost or valuation
Land and
buildings
USD’000s
Plant and
machinery
USD’000s
Motor
vehicles
USD’000s
Furniture and
equipment
USD’000s
Capital work
in progress
USD’000s
Total
USD’000s
As at October 2019
120,243
40,033
2,021
1,221
1,756
165,274
Exchange differences
Additions
Transfers
Disposals
31,573
305
1,069
(71)
7,989
1,076
277
(226)
Assets held for sale
(7,252)
(2,403)
Foreign translation
(47,916)
(15,592)
As at 30 September 2020
Exchange differences
Additions
Transfers
Disposals
97,951
5,221
59
597
-
31,154
602
807
277
(66)
112
200
-
(120)
(39)
(734)
1,440
202
154
-
(7)
58
142
38
(3)
(19)
(467)
970
174
167
-
(3)
-
465
(1,384)
(2)
-
39,732
2,188
-
(422)
(9,713)
(424)
(65,133)
411
78
855
(874)
-
131,926
6.277
2,042
-
(76)
111
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
14. Property, plant and equipment (continued)
(ii) In US Dollars
(b) Company
Cost or valuation
Revaluation
Foreign translation
Land and
buildings
USD’000s
Plant and
machinery
USD’000s
Motor
vehicles
USD’000s
Furniture and
equipment
USD’000s
Capital work
in progress
USD’000s
Total
USD’000s
251
(10,588)
(277)
(135)
-
(10,749)
As at 30 September 2021
104,079
Cost
Revaluation
37,603
66,476
22,186
13,312
8,874
1,512
1,173
907
605
703
470
104,079
22,186
1,512
1,173
Depreciation
As at October 2019
Charge for the year
Disposals
Transfer to held for sale
Foreign translation
As at 30 September 2020
1,278
579
-
(250)
(555)
1,052
7,056
3,919
(33)
(720)
(3,198)
7,024
Charge for the year
407 3,316
Disposals
Foreign translation
Revaluation
-
(48)
(35)
(326)
(1,411)
(9,979)
As at 30 September 2021
-
-
685
366
(53)
(16)
(297)
685
312
(5)
(32)
(960)
-
Net book value
At 30 September 2021
At 30 September 2020
104,080
96,899
22,187
24,130
1,511
755
186
112
(0)
(5)
(87)
206
104
(1)
(11)
(298)
-
1,172
764
470
470
-
470
-
-
-
-
-
-
-
-
-
-
-
129,420
52,995
76,425
129,420
9,205
4,976
(86)
(991)
(4,137)
8,967
4,139
(41)
(417)
(12,648)
-
470
411
129,420
122,959
a)
The Company’s property, plant and equipment situated in Zambia were revalued as at 30
September 2021 by Messrs Fairworld Properties Limited, Registered Valuation Surveyors, on
the basis of market value. The surplus on valuation totalling ZMW40.1 million (USD1.9 million)
was transferred to a revaluation reserve.
(b)
In the opinion of the Directors, the carrying values of property, plant and equipment stated above
are not higher than their fair values.
(c)
If the cost model had been used, the carrying amounts of the property plant and equipment
would be ZMW430,843 thousand (2020: ZMW452,737 thousand). The revalued amounts include
a revaluation surplus of ZMW888,898 thousand before tax (2020: ZMW828,538 thousand), which
is not available for distribution to the shareholders of Zambeef Products PLC.
112
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
15.
Investments in subsidiaries, associates and minority interests
The principal subsidiaries and associates of the Company, their country of incorporation, ownership of
their issued, ordinary share capital and the nature of their trade are listed below:
(a) Directly/partially owned:
Country of
incorporation
Zambeef Retailing Limited
Zambia
Zamleather Limited
Zambia
Master Meat and Agro
Production Co. of Nigeria Limited
Master Meat (Ghana) Limited
Masterpork Limited
Zampalm Limited
Zam Chick Limited
Zamhatch Limited
Nigeria
Ghana
Zambia
Zambia
Zambia
Zambia
Proportion of all
classes of issued
share capital
owned by the
Company 2020
Proportion of all
classes of issued
share capital
owned by the
Company 2019 Principal activity
100
100
80
90
100
10
100
100
Retailing of Zambeef
products
100
Processing and sale of
leather and production and
sale of shoes
100
Processing and sale of
meat products
Processing and sale of
meat products
80
90
Processing and sale
of pork and processed
products
100
10 Palm tree plantation
Processing and sale of
poultry products
100
Chicken breeding, rearing
and production of stock
feed
100
The proportion of voting rights held is the same as the proportion of shares held.
(b) Movement at cost:
At beginning of the year
Foreign translation
At end of the year
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
245,807
-
245,807
12,205
2,479
14,684
245,807
-
245,807
18,622
(6,417)
12,205
113
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
15.
Investments in subsidiaries and associates (continued)
(c)
The Company’s interests in its subsidiaries, which are unlisted, are as follows:
Name of company
Country of
Incorporation
Assets
ZMW’000s
Liabilities
ZMW’000s
Revenues
ZMW’000s
Profit/(loss)
ZMW’000s
Zambeef Retailing Limited
Zambia
497,202
786,296
2,565,162
(112,548)
Zamleather Limited
Zambia
West Africa Operations
Nigeria & Ghana
87,596
74,272
Masterpork Limited
Zam Chick Limited
Zamhatch Limited
Total at the end of 30
September 2021
Zambia
178,345
Zambia
302,169
57,133
86,463
86,755
21,725
49,661
326,560
375,698
436,035
806
4,602
(5,865)
38,719
Zambia
604,644
165,457
726,541
111,761
1,744,228
1,203,829
4,479,657
37,475
Zambeef Retailing Limited
Zambia
1,158,827
1,399,097
2,149,113
(171,151)
Zamleather Limited
Zambia
101,258
West Africa Operations
Nigeria & Ghana
73,344
76,548
73,545
29,950
218,759
Zambia
253,585
167,145
290,584
Zambia
1,079,335
851,278
300,668
Zambia
811,454
539,538
591,707
3,477,803
3,107,151
3,580,781
(128,717)
(2,665)
7,595
(4,069)
1,189
40,384
Masterpork Limited
Zam Chick Limited
Zamhatch Limited
Total at the end of 30
September 2020
114
Zambeef Products PLC Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
15.
Investments in subsidiaries and associates (continued)
Name of company
Zambeef Retailing Limited
Zamleather Limited
Country of
Incorporation
Zambia
Zambia
West Africa Operations
Nigeria & Ghana
Masterpork Limited
Zam Chick Limited
Zamhatch Limited
Total at the end of 30 September
2021
Zambeef Retailing Limited
Zamleather Limited
Zambia
Zambia
Zambia
Zambia
Zambia
West Africa Operations
Nigeria & Ghana
Masterpork Limited
Zam Chick Limited
Zamhatch Limited
Total at the end of 30 September
2020
Zambia
Zambia
Zambia
Assets
Liabilities Revenues Profit/(loss)
USD’000s USD’000s
USD’000s
USD’000s
USD’000s USD’000s
USD’000s
USD’000s
29,701
47,064
121,457
(5,329)
5,233
4,437
10,654
18,051
36,120
3,413
5,172
5,182
1,298
9,884
2,351
15,462
17,789
20,646
34,401
38
218
(278)
1,833
5,292
104,196
72,013
212,106
1,774
57,539
69,469
132,907
(10,584)
5,028
3,642
12,607
53,592
40,291
3,801
3,652
8,299
42,268
26,789
1,852
13,529
17,977
18,594
36,593
(165)
470
(252)
74
2,497
172,699
154,278
221,452
(7,960)
115
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
15.
Investments in subsidiaries and associates (continued)
Below are the carrying amounts for the investments in the subsidiaries.
Name of company
Zambeef Retailing Limited
Zamleather Limited
Master Meat and Agro Production Co of Nigeria
Limited
Master Meat (Ghana) Limited
Masterpork Limited
Zam Chick Limited
Zamhatch Limited
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
31
1,477
216
1,310
26,601
158,230
57,942
2
88
13
78
1,589
9,453
3,461
31
1,477
216
1,310
26,601
158,230
57,942
2
73
10
64
1,321
7,858
2,877
245,807
14,684
245,807
12,205
(d)
In the opinion of the Directors, the value of the company’s interests in the subsidiary companies
is not less than the amounts at which they are stated in these financial statements.
(e)
As at the reporting date, the Group has a 10% equity interest in Zampalm Limited.
The company has reasonable influence over Zampalm Limited in that, it has representation on
the Board of Directors, participates in policy making decisions and provides essential farming
technical information. The company had a management contract which expired in September
2020 and was responsible for day to day management of Zampalm Limited. The investment is
accounted for using the equity method.
Zampalm Limited’s principal activity is the establishment of a palm oil plantation and processing plant
and the production of crude palm oil. The company is still in the developmental stage and is expected
to start generating profits in 2024.
The summarised financial information for Zampalm Limited is as below;
Revenue
Gross Loss
Loss before tax
Non-current assets
Current assets
Total assets
Capital and reserves
Current liabilities
Total equity and liabilities
2021
2020
ZMW’000s
USD’000s ZMW’000s
USD’000s
4,313
(3,788)
(33,582)
270,693
31,757
302,450
111,278
191,172
302,450
204
(179)
(1,590)
16,170
1,897
3,868
(1,625)
(31,770)
273,811
6,625
239
(100)
(1,965)
13,595
329
18,067
280,436
13,924
6,647
106,846
11,420
18,067
173,590
280,436
5,305
8,619
13,924
116
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
15.
Investments in subsidiaries and associates (continued)
Summarised financial information of the Group’s share in the associate is as follows:
Opening balance
Arising during the year (i)
Loss from continuing operation
Foreign exchange difference
Total comprehensive income
2021
2020
ZMW’000s
USD’000s ZMW’000s
USD’000s
43,826
2,176
-
(3,358)
-
(3,358)
(159)
400
241
12,376
34,627
(3,177)
-
31,450
938
2,141
(196)
(707)
1,238
Carrying amount of the Group’s
interest
40,468
2,417
43,826
2,176
(i)
There was no cash movement during the year. The movement shown above relates to the loss
that was incurred from business activities during the year.
The movement for the prior year includes a balance that was owed by the associate that was
converted to equity.
16.
(a) Biological assets – Group
Biological assets comprise standing crops, feedlot cattle, dairy cattle, pigs and chickens. At 30
September 2021 there were 811 hectares of standing crops, 16,090 cattle (12,836 feedlot cattle and
3,254 dairy cattle) and 759,611 chickens (92,052 breeding, 387,141 layers and 280,418 broilers), and
3,744 pigs. A total of 32,591 feedlot cattle, 976 dairy cattle, 6,459 pigs and 8,225,446 chickens were
culled during the year.
(i) Zambian Kwacha
Standing Crops
Feedlot Cattle
Dairy Cattle
Pigs
Chickens
Total
As at 1
October
ZMW’000s
Increase due
to purchases
ZMW’000s
16,626
40,652
62,380
4,120
52,527
518,097
324,237
102,248
13,241
474,082
176,305
1,431,905
Gains/
(losses)
arising from
fair value
attributable
to physical
changes
ZMW’000s
Gains/
(losses)
arising from
fair value
attributable
to price
changes
ZMW’000s
-
-
3,323
3,328
434,115
71,910
39,818
7,323
268,544
821,710
Decrease
due to
harvest/
transferred
to inventory
ZMW’000s
As at 30
September
ZMW’000s
(914,253)
54,585
(280,485)
156,314
(136,404)
71,365
(20,394)
-
(726,038)
7,618
69,115
6,651
(2,077,574)
358,997
117
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
16. (a) Biological assets – Group (continued)
As at 1
October
USD’000s
Foreign
exchange
USD’000s
Increase due
to purchases
USD’000s
Gains/
(losses)
arising from
fair value
attributable
to physical
changes
USD’000s
Gains
arising from
fair value
attributable
to price
changes
USD’000s
Decrease due
to harvest/
transferred to
inventory
USD’000s
As at 30
September
USD’000s
826
2,018
3,098
203
2,609
8,754
637
1,843
740
87
734
4,041
24,531
15,352
4,841
627
22,447
67,798
20,555
3,405
1,885
347
12,716
38,908
-
-
157
158
-
315
(43,288)
(13,281)
(6,459)
(966)
(34,377)
3,261
9,337
4,262
456
4,129
(98,371)
21,445
(ii) In US Dollars
Standing Crops
Feedlot Cattle
Dairy Cattle
Pigs
Chickens
Total
16.
(b)
Biological assets – Company
Biological assets comprise standing crops, feedlot cattle, dairy cattle, and chickens. At 30 September
2021 there were 811 hectares of standing crops, 16,090 cattle (12,836 feedlot cattle and 3,254 dairy
cattle), and 282,695 chickens. A total of 32,591 feedlot cattle, 976 dairy cattle and 194,113 chickens
were culled during the year.
As at 1 October
ZMW’000s
16,626
40,652
62,380
19,843
Increase
due to
purchases
ZMW’000s
518,097
324,237
102,248
74,919
Gains/
(losses)
arising from
fair value
attributable
to physical
changes
ZMW’000s
Gains/
(losses)
arising from
fair value
attributable
to price
changes
ZMW’000s
Decrease due
to harvest/
transferred to
inventory
ZMW’000s
As at 30
September
ZMW’000s
434,115
71,910
39,818
(3,823)
-
-
(914,253)
54,585
(280,485)
156,314
3,323
(136,404)
-
(65,255)
71,365
25,684
139,501
1,019,501
542,020
3,323
(1,396,397)
307,948
(i) Zambian Kwacha
Standing Crops
Feedlot Cattle
Dairy Cattle
Chickens
Total
Gains/
(losses)
arising from
fair value
attributable
to physical
changes
USD’000s
Gains/
(losses)
arising from
fair value
attributable
to price
changes
USD’000s
Decrease
due to
harvest/
transferred
to inventory
USD’000s
20,555
3,406
1,887
(181)
-
-
157
-
(43,288)
(13,281)
(6,459)
(3,090)
Increase
due to
purchases
USD’000s
24,531
15,352
4,841
3,547
As at 30
September
USD’000s
3,261
9,338
4,264
1,534
3,492
48,271
25,667
157
(66,118)
18,396
As at 1
October
USD’000s
Foreign
exchange
USD’000s
825
2,018
3,098
986
6,927
638
1,843
740
272
(ii) In US Dollars
Standing Crops
Feedlot Cattle
Dairy Cattle
Chickens
Total
118
Zambeef Products PLC Annual Report 2021 NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
17.
Inventories
(i) In Zambian Kwacha
Group
Company
Group
Company
2021
2020
Trading stocks
Abattoir stocks
Raw materials
Stock feed
Consumables
Raw hides and chemicals
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
455,847
23,628
117,962
388,548
203,175
8,686
306,922
595,376
516,046
23,628
90,734
256,057
95,631
-
1,817
325,242
23,930
151,290
5,985
1,817
187,028
8,364
100,826
-
1,197,846
772,972
1,103,640
814,081
(ii) In US Dollars
Group
Company
Group
Company
2021
2020
Trading stocks
Abattoir stocks
Raw materials
Stock feed
Consumables
Raw hides and chemicals
USD’000s
USD’000s
USD’000s
USD’000s
27,231
1,411
7,047
23,211
12,137
519
71,556
18,335
1,411
5,420
15,296
5,713
-
29,562
25,623
90
16,149
1,188
7,512
297
90
9,287
415
5,006
-
46,175
54,798
40,421
A total of ZMW3,510.3 million (USD166.2 million) (2020: ZMW2,645.6 million (USD163.5 million]) was
included in profit and loss as an expense within cost of sales. Inventory was turned every 124 days
(2020: 152 days).
Biological assets totalling ZMW2,077.6 million (USD98.4 million) (2020: ZMW1,557.6 million [USD96.3
million]) were transferred to inventories during the year.
119
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
18.
Trade and other receivables
The carrying amounts of the trade receivables were as below.
(i) In Zambian Kwacha
Group
Company
Group Company
2021
2020
Gross trade receivables
Less: allowance for expected credit losses
Trade receivables
Prepayments
Other receivables
Less: other provisions
ZMW’000s
ZMW’000s
ZMW’000s ZMW’000s
166,465
(11,743)
154,722
36,515
42,839
-
95,377
(6,063)
89,314
2,388
-
-
85,386
(5,075)
80,311
25,295
32,710
(5,648)
234,076
91,702
132,668
37,518
(1,516)
36,002
18,335
-
(3,782)
50,555
(ii) In US Dollars
Group
Company
Group Company
2021
2020
Gross trade receivables
Less: allowance for expected credit losses
Trade receivables
Prepayments
Other receivables
Less: other provisions
USD’000s
USD’000s
USD’000s USD’000s
9,944
(701)
9,243
2,181
2,559
-
5,698
(362)
5,336
142
-
-
13,983
5,478
4,240
(252)
3,988
1,256
1,623
(280)
6,587
1,863
(75)
1,788
910
-
(188)
2,510
(a) Allowance for credit losses
The trade receivables do not have a significant financing component and the simplified
approach has been applied to calculate the loss allowance on lifetime expected credit losses.
The allowance for credit losses is calculated for each business unit based on the historical loss
experience and its particular customer profile with shared and specific characteristics which are
influenced by the nature of their business.
The fair value of these short-term financial assets is not individually determined as the carrying
amount is a reasonable approximation of fair value.
All of the Group’s trade and other receivables in the comparative periods have been reviewed for
indicators of impairment. The impaired trade receivables are mostly due from customers in the
business-to-business market that are experiencing financial difficulties.
Note 30(b) includes disclosures relating to the credit risk exposures and analysis relating to the
allowance for expected credit losses. Both the current and comparative impairment provisions
apply the IFRS 9 expected loss model.
120
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
18.
Trade and other receivables (continued)
Movements on the Group’s provision for allowance for expected credit losses and other provisions are
set out in the table below:
2021
2020
(i) In Zambian Kwacha
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
At 1 October
Utilised
Charge for the year
At 30 September
Analysed as follows:
Expected credit losses
Other provisions
Total
10,723
(2,286)
3,306
11,743
10,324
1,419
11,743
5,298
(423)
1,188
6,603
5,956
647
6,603
4,910
(1,167)
6,980
10,723
5,075
5,648
10,723
1,913
(552)
3,937
5,298
1,516
3,782
5,298
(ii) In US Dollars
Group
Company
Group
Company
USD’000s
USD’000s
USD’000s
USD’000s
2021
2020
At 1 October
Foreign exchange
Utilised
Charge for the year
At 30 September
Analysed as follows:
Expected credit losses
Other provisions
Total
532
121
(109)
157
701
617
84
701
263
63
(20)
56
362
338
24
362
372
(200)
(72)
432
532
252
280
532
Trade receivables have a 15 or 30 day credit period.
145
(91)
(34)
243
263
75
188
263
121
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
18.
Trade and other receivables (continued)
The matrix for the calculation of the expected credit losses is as detailed below.
30 September 2021
Trade receivables days past due
Current More than More than
More
than
Total
30 days
60 days
90 days
Expected credit loss rate
4.1%
3.6%
7.1%
90%
Gross carrying amount -
ZMW’000
Lifetime expected credit loss -
ZMW’000
97,994
20,830
1,784
6,026
126,634
4,033
741
127
5,423
10,324
30 September 2020
Trade receivables days past due
Current More than More than
More
than
Total
30 days
60 days
90 days
Expected credit loss rate
4.1%
3.6%
7.2%
90.0%
Gross carrying amount -
ZMW’000
Lifetime expected credit loss -
ZMW’000
70,306
11,723
1,518
1,839
85,386
2,894
417
109
1,655
5,075
30 September 2021
Trade receivables days past due
Current More than More than
More
than
Total
30 days
60 days
90 days
Expected credit loss rate
4.1%
3.6%
7.2%
90.0%
Gross carrying amount -
USD’000
Lifetime expected credit loss -
USD’000
5,854
1,244
107
360
7,565
241
44
8
324
617
30 September 2020
Trade receivables days past due
Current More than More than
More
than
Total
30 days
60 days
90 days
Expected credit loss rate
4.1%
3.6%
7.2%
90.0%
Gross carrying amount -
USD’000
Lifetime expected credit loss -
USD’000
3,492
144
582
21
75
5
91
4,240
82
252
122
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
19. Amounts due from related companies
(i) In Zambian Kwacha
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
2021
2020
Chisamba Ranching and Cropping
Danny Museteka
Tembilo Farms Limited
Lillian Limbuka
Zamleather Limited
Zampalm Limited
Master Meat & Agro Production Co. of
Nigeria Limited
Zam Chick Limited
Master Meat (Ghana) Limited
Zamhatch Limited
Masterpork Limited
Zambeef Retailing
-
93
152
683
-
3,274
-
-
-
-
-
-
4,202
-
93
-
-
50,284
2,570
67,113
-
3,362
110,857
56,331
489,944
780,554
4,185
-
459
1,049
-
3,644
-
-
-
-
-
-
-
-
47,704
3,229
59,974
704,526
3,318
501,366
9,337
1,320,117
123
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
19. Amounts due from related companies (continued)
(ii) In US Dollars
Group
Company
Group
Company
USD’000s
USD’000s
USD’000s
USD’000s
2021
2020
Chisamba Ranching and Cropping
Danny Museteka
Tembilo Farms Limited
Lilian Limbuka
Zamleather Limited
Zampalm Limited
Zam Chick Limited
Mastermeat & Agro Production
Co. of Nigeria Limited
Master Meat (Ghana) Limited
Zamhatch Limited
Masterpork Limited
Zambeef Retailing Limited
-
6
9
41
196
-
-
-
-
251
-
6
-
-
3,004
154
-
4,009
201
6,622
3,365
29,267
46,628
208
-
23
52
-
181
-
-
-
-
-
-
-
-
2,369
160
34,981
2,978
165
24,894
464
65,547
The above balances relate to arm’s length transactions between the transacting parties. External parties
that fall under the ‘Related Party’ disclosure are with respect to Directors who have shareholding in
companies transacting with the Group. Unless otherwise stated, none of the transactions incorporate
special terms and conditions and no guarantees were given or received. Outstanding balances are
usually settled in cash.
The amounts due from related parties have been assessed for impairment using the expected credit
loss model. The expected credit loss determined is immaterial and therefore no separate disclosure
has been made.
There is no interest that is charged on amounts due from related parties and there are no repayment
terms attached.
124
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
20. Cash and cash equivalents
2021
2020
(i) In Zambian Kwacha
Group
Company
Group
Company
Cash in hand and at bank
201,539
113,193
111,136
12,645
Bank overdrafts (note (b))
(490,204)
(306,417)
(348,045)
(170,822)
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
(288,665)
(193,224)
(236,909)
(158,177)
(ii) In US Dollars
Group
Company
Group
Company
2021
2020
Cash in hand and at bank
Bank overdrafts (note (b))
(a) Banking facilities
USD’000s
USD’000s
USD’000s
USD’000s
12,039
(29,283)
(17,244)
6,762
(18,304)
(11,542)
5,518
(17,281)
(11,763)
628
(8,482)
(7,854)
The Group has overdraft facilities totalling ZMW193.3 million (2020: ZMW193.3 million) with
Zanaco Bank Plc. The Zanaco Bank overdraft bears an interest rate of Bank of Zambia Policy
rate plus 6.5 per cent. on the Kwacha facility.
The Group has overdraft facilities totalling ZMW74.6 million (2020: ZMW74.6 million) and USD5
million (2020: USD5 million) with Citibank Zambia Limited. The Citibank overdrafts bear interest
rates of Bank of Zambia Policy rate (BPR) plus 0.25% plus Liquidity Premium (182 day Treasury
bill rate minus BPR) on the Kwacha facility and 3 month USD LIBOR rate plus 3.5 per cent. on
the USD facility.
The Group has overdraft facilities totalling ZMW91.3 million (2020: ZMW57.5 million) and USD0.5
million (2020: USD2 million) with Stanbic Bank Zambia Limited. The Stanbic Bank overdrafts
bear interest rate of Bank of Zambia Policy rate plus 6 per cent. on the Kwacha facility and 3
month USD LIBOR rate plus 4 per cent. on the USD facility.
The Group has overdraft facilities totalling ZMW74 million (2020: ZMW74 million) and USD nil
(2020: USD3 million) with Standard Chartered Bank Zambia Plc. The Standard Chartered Bank
overdrafts bear interest rates of Bank of Zambia Policy rate plus 6 per cent. on the Kwacha
facilities.
The Group obtained overdraft facilities totalling ZMW170 million (2020: ZMW nil) during the year
with First National Bank (FNB). The FNB Bank overdrafts bear interest rates of Bank of Zambia
Policy rate plus 7.5 per cent.
125
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
20. Cash and cash equivalents (continued)
(b) Bank overdrafts
2021
2020
(i) In Zambian Kwacha
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
Zanaco Bank Plc
(183,787)
-
(145,387)
First National Bank (FNB)
(161,051)
(161,051)
-
Citibank Zambia Limited
Stanbic Bank Zambia Limited
Standard Chartered Bank Zambia Plc
(71,664)
(73,702)
-
(71,664)
(101,446)
(73,702)
-
(49,805)
(51,407)
(2)
-
(69,615)
(49,805)
(51,400)
(490,204)
(306,417)
(348,045)
(170,822)
(ii) In US Dollars
Group
Company
Group
Company
USD’000s
USD’000s
USD’000s
USD’000s
2021
2020
Zanaco Bank Plc
First National Bank (FNB)
Citibank Zambia Limited
Stanbic Bank Zambia Limited
Standard Chartered Bank Zambia Plc
(10,979)
(9,621)
(4,281)
(4,402)
-
(9,621)
(4,281)
(4,402)
-
(5,037)
(2,473)
(2,552)
-
(7,219)
(1)
(3,456)
(2,473)
(2,552)
(8,482)
(29,283)
(18,304)
(17,281)
(i)
The Zambeef Products Plc Group bank overdrafts and Short-Term Seasonal Loan facilities are
secured by a floating charge/debenture over all the assets of the Group with a security cover
of 125 per cent. of limits. The floating charge/debenture ranks pari passu between Standard
Chartered Bank Zambia Plc, Citibank Zambia Limited, Zanaco Bank Plc, Stanbic Bank Zambia
Limited and First National Bank (FNB).
All overdrafts are annual revolving facilities.
126
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
21. Share capital
(a) Ordinary share capital
2021
2020
Group Company
Group Company
ZMW’000s ZMW’000s ZMW’000s ZMW’000s
7,000
938
7,000
938
3,006
449
3,006
449
-
-
-
-
-
-
-
-
3,006
449
3,006
449
1,000
100
1,000
100
-
-
-
-
-
-
-
-
1,000
100
1,000
100
700,000,000 ordinary shares of
ZMW0.01 each
(2020: 700,000,000 ordinary shares of
ZMW0.01 each)
Issued and fully paid
At 1 October
Issued during the year
At 30 September
300,579,630 ordinary shares of
ZMW0.01 each
(2020: 300,579,630 ordinary shares of
ZMW0.01 each)
(b) Preference share capital
Issued and fully paid
At 1 October
Issued during the year
At 30 September
100,057,658 preference shares of
ZMW0.01 each
(2020: 100,057,658 preference
shares of ZMW0.01 each)
The preference shares are convertible in whole or in part by CDC into ordinary shares on a one-
for-one basis for the first eight years from 2016 and thereafter on a basis of 3.0833 ordinary
shares for each preference share. These shares have four voting rights for every five preference
shares held.
Zambeef has the right to redeem all or part of the preference shares at the redemption price,
which will give CDC a 12% compounded return on investment.
The zero-coupon preference shares pay a dividend only if a dividend is paid to ordinary
shareholders, and in such cases, the dividend per share will be the same as that for ordinary
shares.
127
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
22. Share premium
At 1 October
Arising during the year
At 30 September
2021
2020
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
1,125,012
185,095
1,125,012
185,095
-
-
-
-
1,125,012
185,095
1,125,012
185,095
Proceeds received in addition to the nominal value of the shares issued have been included in share
premium.
23.
Interest bearing liabilities
DEG – Deutsche Investitions- und
Entwicklungsgesellschaft mbH
(note (a))
Zanaco Bank Plc (note (b))
Standard Chartered Bank Zambia
Plc (note (c))
IFC – International Finance
Corporation (note (d))
Stanbic Bank Zambia Limited
(note e)
Absa Bank Zambia Plc
Less: Short term portion
(repayable within next 12 months)
Long term portion (repayable after
12 months)
2021
2020
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
-
-
-
-
222,547
222,547
6,646
6,646
47,649
47,649
149,877
149,877
39,615
39,615
109,047
109,047
99,000
220,000
406,264
99,000
220,000
406,264
29,000
29,000
517,117
517,117
(210,709)
(210,709)
(326,899)
(326,899)
195,555
195,555
190,218
190,218
128
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
23.
Interest bearing liabilities
2021
2020
(ii) In US Dollars
Group Company
Group Company
USD’000s USD’000s USD’000s USD’000s
DEG – Deutsche Investitions- und
Entwicklungsgesellschaft mbH (note (a))
Zanaco Bank Plc (note (b))
-
-
-
-
Standard Chartered Bank Zambia Plc (note (c))
2,846
2,846
11,050
11,050
330
7,442
330
7,442
IFC – International Finance Corporation (note
(d))
Stanbic Bank Zambia Limited (note (e))
Absa Bank Zambia Plc
2,366
2,366
5,414
5,414
5,914
13,143
24,269
5,914
13,143
24,269
1,440
1,440
25,676
25,676
Less: Short term portion (repayable within next
12 months)
(12,587)
(12,587)
(16,231)
(16,231)
Long term portion (repayable after 12 months)
11,682
11,682
9,445
9,445
(a)
(i) DEG Term Loan 3
The Group had a loan facility of USD nil (2020: USD3.55 million and original amount of
USD10 million) from DEG. Interest on the loan is 4.25 per cent. above the 6 month USD
LIBOR rate per annum payable 6 monthly in arrears. The capital was repayable in 14 biannual
instalments of USD 710,000 commencing May 2016 and expiring in November 2022. The
loan was fully repaid in September 2021.
The DEG term loan 3 was secured by a first ranking legal mortgage over R/E of Farm No.
4450, R/E of F/4451 and R/E of F/5388 (Mpongwe Farm), ranking pari passu with the IFC.
(ii) DEG Term Loan 4
The Group had a loan facility of USD nil (2020: USD7.5 million and the original amount of
USD15 million) from DEG. Interest on the loan is 5.75 per cent. above the 6 month USD
LIBOR rate per annum payable quarterly in arrears. The capital was repayable in 12 quarterly
instalments of USD1,250,000 commencing March 2018 and expiring in September 2023.
The loan was fully repaid in September 2021.
The DEG term loan 4 was secured by a first ranking legal mortgage over R/E of Farm No.
4450, R/E of F/4451 and R/E of F/5388 (Mpongwe Farm), ranking pari passu with the IFC.
129
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
23.
Interest bearing liabilities (continued)
(b) Zanaco Bank Plc
(c)
(d)
The Group has a loan facility of ZMW nil million (2020: ZMW6.65 million and original amount
of ZMW46.5 million) with Zanaco Bank Plc. Interest on the loan 4.5 per cent. above the Bank
of Zambia policy rate per annum payable monthly in arrears. The principal was repayable in 7
annual instalments of ZMW6,642,857 commencing December 2014 and expiring in December
2020.
The loan was secured by a first ranking legal mortgage over Stand No. 4970, Industrial Area,
Lusaka (Head Office).
Standard Chartered Bank Zambia PLC
The Group has a structured agricultural facility with an annual revolving limit totalling USD6
million (2020 – USD18 million) with Standard Chartered Bank Zambia PLC. The purpose of the
facility is the financing of wheat, soya beans and maize under collateral management agreements
and is for 270 days. The balance on the facilities at year end was USD2.8 million (2020: USD7.4
million). Interest on the facility is 3 month USD LIBOR plus 3.25 per cent. per annum calculated
on the daily overdrawn balances.
The facility is secured by a fixed and floating charge over grain stocks of wheat, soya beans and
maize.
International Finance Corporation Loan 2
The Group has a loan facility of USD2.06 million and ZMW5.1 million (2020: USD4.8 million and
ZMW11.98 million and original amount of USD20 million and ZMW49.6 million). Interest on the
loan is 4.75 per cent. above the 6 month USD LIBOR rate per annum for the USD facility and
4.45 per cent. above the 91 day Treasury Bill rate plus a variable swap margin for the Kwacha
facility payable quarterly in arrears. The principal is repayable in 29 equal quarterly instalments
of USD689,655 and ZMW1,710,345 commencing June 2015 and expiring in June 2022.
The loan is secured through a first ranking legal mortgage over R/E of Farm No. 4450, R/E of
Farm No. 4451 & R/E of Farm No. 5388 (Mpongwe farm), ranking pari passu with the DEG.
(e) Stanbic Bank Zambia Limited
In the year ended 30 September 2021, the Group obtained an additional seasonal loan facility
with an annual revolving limit totalling ZMW70 million from Stanbic Bank Zambia Limited bringing
the total facility to K100 million. The balance on the facility at year end was ZMW99 million (2020:
ZMW29 million). Interest on the facility is 8.5 per cent. above the Bank of Zambia policy rate per
annum payable monthly in arrears.
This facility is secured by a floating charge/debenture over all the assets of the Company. The
floating charge/debenture ranks pari passu between Standard Chartered Bank Zambia Plc,
Citibank Zambia Limited and Zanaco Bank Plc and First National Bank (FNB).
(f)
Absa Bank Zambia Plc
During the year ended 30 September 2021, the Company obtained a 5 year loan from Absa Bank
Ltd amounting to ZMW220Million at an interest rate of Bank of Zambia policy rate plus 6.5%.
130
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
24. Leases
Lease liabilities are presented in the statement of financial position as follows:
Current
Non-current
Current
Non-current
2021
2020
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
12,418
7,253
19,671
1,873
6,597
8,470
23,259
19,750
43,009
14,461
8,172
22,633
2021
2020
Group
USD’000s
Company
USD’000s
Group
USD’000s
Company
USD’000s
742
433
1,175
112
394
506
1,155
981
2,136
718
406
1,124
The Group has leases for its motor vehicles and trailers, farming equipment, land and buildings, retail
outlets and production equipment. With the exception of short-term leases and leases of low-value
underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease
liability. Variable lease payments which do not depend on an index or a rate (such as lease payments
based on a percentage of Group sales) are excluded from the initial measurement of the lease liability
and asset. The Group classifies its right-of-use assets in a consistent manner to its property, plant and
equipment.
Each lease generally imposes a restriction that, unless there is a contractual right for the Group to
sublet the asset to another party, the right-of-use asset can only be used by the Group. Leases are
either non-cancellable or may only be cancelled by incurring a substantive termination fee.
Some leases contain an option to purchase the underlying leased asset outright at the end of the lease,
or to extend the lease for a further term. The Group is prohibited from selling or pledging the underlying
leased assets as security. For leases over commercial premises the Group must keep those properties
in a good state of repair and return the properties in their original condition at the end of the lease.
Further, the Group must insure items of property, plant and equipment and incur maintenance fees on
such items in accordance with the lease contracts.
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset
recognised on the statement of financial position:
No. of
right-
of-use
assets
leased
4
10
44
3
68
6
Range of
remaining
term
Average
remaining
lease term
0-1 year
0.3 years
2-3 years
2-3 years
3-4 years
2 years
2 years
3 years
1-3 years
1.5 years
3-4year
3 years
Right-of-use asset
Motor vehicles
Trailers
Farming equipment
Land & buildings
Retail Outlets
Production
equipment
No. of
leases with
extension
options
No. of
leases with
options to
purchase
No. of
leases with
variable
payments
linked to an
index
No. of
leases with
termination
options
-
-
-
-
5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
131
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
24. Leases (continued)
The Group has leases for K19,671 thousand. The lease liabilities are secured by the related underlying
assets. Future minimum lease payments at 30 September 2021 were as follows:
Minimum lease payments due
Within 1
year
1-2 years
2-3 years
3-4 years
4-5 years
After 5
years
Total
ZMW’000s ZMW’000s ZMW’000s ZMW’000s ZMW’000s ZMW’000s ZMW’000s
30 September 2021
Lease payments
Finance charges
Net present values
30 September 2020
13,085
(645)
12,440
5,434
(417)
5,017
Lease payments
23,821
10,103
Finance charges
Net present values
(562)
23,259
(508)
9,595
625
(318)
307
7,758
(380)
7,378
469
(288)
181
3,013
(236)
2,777
469
(257)
212
3,345
(1,831)
1,514
23,427
(3,756)
19,671
44,695
(1,686)
43,009
30 September
2021
30 September
2020
USD’000
USD’000
742
433
1,175
981
1,155
2,136
Within 1
year
1-2 years
2-3 years
3-4 years
4-5years
After 5
years
Total
USD’000
USD’000
USD’000
USD’000
USD’000
USD’000
USD’000
782
(39)
743
1,183
(28)
1,155
325
(25)
300
502
(25)
477
37
(19)
18
385
(19)
366
28
(17)
11
150
(12)
138
28
(15)
13
-
-
-
200
(110)
90
1,400
(225)
1,175
-
-
-
2,220
(84)
2,136
Leasing
Current
Non-Current
Total
Minimum lease payments
30 September 2021
Lease payments
Finance charges
Net Present Values
30 September 2020
Lease payments
Finance charges
Net Present Values
132
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
24. Leases (continued)
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases (leases with an expected
term of 12 months or less) or for leases of low value assets. Payments made under such leases are
expensed on a straight-line basis. In addition, certain variable lease payments are not permitted to be
recognised as lease liabilities and are expensed as incurred.
The expense relating to payments not included in the measurement of the lease liability is as follows:
30 Sept 2021
30 Sept 2021
30 Sept 2020
30 Sept 2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Short-term leases
Leases of low value assets
Variable lease payments
Total
8,237
-
-
8,237
492
-
-
492
1,359
-
-
1,359
84
-
-
84
Included in the finance cost of ZMW92,322 thousand (US$5,709 thousand) is interest expense for
leasing arrangements amounting to ZMW86,000 (US$6,000).
At 30 September 2021 the Group was committed to short-term leases and the total commitment at that
date was ZMW719,364 (USD 35,718).
25. Deferred liability
Under the terms of employment, employees are entitled to certain terminal benefits. Provisions have
been made during the year towards these benefits. This statutory entitlement, which is lost if the
employee is summarily dismissed, becomes payable only when the employee retires after attaining 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, but are not considered material to the Group.
2021
2020
(i) In Zambian Kwacha
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
At 1 October
(Movements)/provision during the
year
Payments made during the year
At 30 September
11,389
4,102
(6,971)
8,891
3,356
2,241
(3,473)
2,124
16,362
(3,185)
(1,788)
11,389
3,655
312
(611)
3,356
The Company engaged a professional actuary, Quantum Consultants & Actuaries, to perform an
actuarial valuation of the liability arising from the employee defined benefit plan as at 30 September
2021. As of the report date, the actuary had finalised the report and the provision was adjusted to
agree to the report.
133
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
25. Deferred liability (continued)
(ii) In US Dollar
At 1 October
(Movements)/provision during the year
Payments made during the year
Foreign translation
At 30 September
2021
2020
Group
USD’000s
Company
USD’000s
Group
USD’000s
Company
USD’000s
565
212
(330)
84
531
167
106
(164)
18
127
1,240
(197)
(111)
(367)
565
277
19
(38)
(91)
167
The assumptions are developed by management with the assistance of independent actuaries.
Discount factors are determined close to each year-end by reference to market yields of bonds that
are denominated in the currency in which the benefits will be paid and that have terms to maturity
approximating to the terms of the related pension obligation. Other assumptions are based on current
actuarial benchmarks and management’s historical experience.
Defined benefit obligation 1 October
11,389
565
16,362
1,240
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Current service cost before deduction
of beneficiary contributions
Interest expense
Remeasurement - actuarial losses from
changes in demographic assumptions
Remeasurement - actuarial losses from
changes in financial assumptions
Experience gains
Benefits paid
Translation difference
Defined benefit obligation 30
September
Unfunded
427
1,234
(1,594)
2,710
1,696
(6,971)
-
8,891
8,891
20
58
(75)
128
80
(330)
85
531
531
589
2,739
-
(4,929)
(1,300)
(2,072)
-
11,389
11,389
36
169
-
(305)
(80)
(128)
(367)
565
565
134
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
25. Deferred liability (continued)
The significant actuarial assumptions for the determination of the defined benefit obligation are the
discount rate, the salary growth rate and the average life expectancy. The assumptions used for the
valuation of the defined benefit obligation are as follows:
Discount rate at date shown
Salary growth rate
Average life expectancies:
-
-
-
-
-
-
25 years of age at reporting date
30 years of age at reporting date
35 years of age at reporting date
40 years of age at reporting date
45 years of age at reporting date
50 years of age at reporting date
30 September
30 September
2021
27%
20%
2020
33%
20%
Probability
of reaching
retirement age
in service
Probability
of reaching
retirement age
in service
47%
57%
66%
72%
78%
86%
47%
57%
66%
72%
78%
86%
Amounts recognised in profit or loss related to the Group’s defined benefit plan are as follows;
Current service cost
Past service cost
Net interest expenses
Total expenses recognised in profit or
loss
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
427
-
1,234
1,661
20
-
58
78
589
-
2,739
3,328
36
-
169
205
Amounts recognised in other comprehensive income related to the Group’s defined benefit plan are as
follows:
Actuarial losses from changes in
demographic assumptions
Actuarial losses from changes in financial
assumptions
Experience (gains)/losses
Return on plan assets (excluding amounts
included in net interest)
Total expenses recognised in other
comprehensive income
2021
2020
ZMW’000s
USD’000s ZMW’000s
USD’000s
(1,594)
2,710
1,697
-
(75)
128
80
-
(4,929)
(1,300)
(305)
(80)
-
-
2,813
133
(6,229)
(385)
135
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
26.
Trade and other payables
(a)
The table below shows the trade and other payables:
Trade and other payables
2021
2020
(i) In Zambian Kwacha
Group
Company
Group
Company
Trade payables
Other payables
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
384,476
79,627
464,103
275,484
17,570
293,054
290,172
31,476
321,648
226,646
6,198
232,844
Trade and other payables
2021
2020
(ii) In US Dollars
Group
Company
Group
Company
Trade payables
Other payables
USD’000s
USD’000s
USD’000s
USD’000s
22,968
4,755
27,723
16,456
1,051
17,507
14,409
1,562
15,971
11,253
308
11,561
The average credit period taken in 2021 was 44 days (2020: 43 days).
All amounts shown under trade and other payables fall due for payment within one year. The
carrying value of trade and other payables are considered to be a reasonable approximation of
fair value.
(b)
Included in the other payables are balances relating to contract liabilities. These are as follows:
2021
2020
Group
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Opening Balance
Receipt from Customers
97,672
969,657
4,850
45,912
75,849
5,746
776,373
48,013
Sales to Customers
(948,123)
(44,892)
(754,550)
(46,663)
Exchange Gain/Loss
-
1,252
-
(2,246)
Closing balance
119,206
7,122
97,672
4,850
Company
Company
2021
2021
2020
2020
ZMW’000s
ZMW’000s
USD’000s
USD’000s
ZMW’000s
ZMW’000s
USD’000s
USD’000s
Opening Balance
Opening Balance
Receipt from Customers
Receipt from Customers
92,276
92,276
611,522
611,522
4,582
4,582
28,954
28,954
71,807
71,807
5,440
5,440
537,341
537,341
33,231
33,231
Sales to Customers
Sales to Customers
(609,313)
(609,313)
(28,850)
(28,850)
(516,872)
(516,872)
(31,965)
(31,965)
Exchange Gain/Loss
Exchange Gain/Loss
Closing balance
Closing balance
--
94,485
94,485
(515)
(515)
-
-
(2,124)
(2,124)
4,171
4,171
92,276
92,276
4,582
4,582
136
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
26.
Trade and other payables (continued)
Advances received from customers represent customer payments received in advance of performance
(contract liability) that are expected to be recognised as revenue in 2022. The advances for supply
of grain is ZMW 99,558 thousand, USD 5,947 thousand (2020: ZMW 84,053 thousand, USD 4,173
thousand), the supply of day-old chicks is ZMW 1,726 thousand, USD 103 thousand (2020: ZMW 1,465
thousand, USD 73 thousand), the amount for the supply of stock feed is ZMW 14,818 thousand, USD
885 thousand (2020: ZMW 10,608 thousand, USD 527 thousand) and others were ZMW 690 thousand,
USD 41 thousand (2020: ZMW 1,546 thousand, USD 77 thousand). All brought forward balances were
recognized as income in the current year.
27. Provisions
Provisions
Staff
Others
Total
Staff
Others
Total
ZMW’000 ZMW’000
ZMW’000 USD’000 USD’000 USD’000
Group
Carrying amount 1
October 2020
Additional provisions
Amount utilised
Foreign translation
Carrying amount 30
September 2021
Company
Carrying amount 1
October 2020
Foreign translation
Additional provisions
Amount utilised
Carrying amount 30
September 2021
66,331
87,608
(48,184)
47,016
25,166
(8,630)
113,347
112,774
3,294
4,148
(56,814)
(2,281)
1,157
2,335
1,503
(409)
366
5,629
5,651
(2,690)
1,523
105,755
63,552
169,307
6,318
3,795
10,113
40,019
21,181
61,200
1,987
1,052
-
49,523
(25,466)
-
39,461
(5,069)
-
702
88,984
2,345
(30,535)
(1,206)
655
1,852
(240)
3,039
1,357
4,197
(1,446)
64,076
55,573
119,649
3,828
3,319
7,147
Staff provisions relate to gratuity, leave pay and other related claims. These are paid as and when they
fall but mainly in December at the end of employee contracts. Other provisions relate to legal and other
claims. These are paid within 3 months average of provisioning.
137
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
28. Amounts due to related companies
(i) In Zambian Kwacha
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
2021
2020
Zambeef Retailing Limited
Masterpork Limited
Tractorzam
Zamchick Limited
Non-current
Current
-
-
-
-
-
-
-
-
-
-
77,273
77,273
-
77,273
-
-
443
-
443
-
443
634,417
70,250
443
-
705,110
-
705,110
(ii) In US Dollars
Group
Company
Group
Company
USD’000s
USD’000s
USD’000s
USD’000s
2021
2020
Zambeef Retailing Limited
Masterpork Limited
Tractorzam
Zamchick Limited
Non-current
Current
-
-
-
-
-
-
-
-
-
-
4,616
4,616
-
4,616
-
-
22
22
-
22
31,501
3,488
22
35,011
-
35,011
The above balances relate to arm’s length transactions with the related parties. External parties that
fall under the ‘Related Party’ disclosure are with respect to all common shareholding companies of the
Board of Directors of the Group. Unless otherwise stated, none of the transactions incorporate special
terms and conditions and no guarantees were given or received.
There is no interest charged on balances due to related parties and there are no repayment terms
attached.
138
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
29.
Reconciliation of liabilities arising from financing activities
The changes in the Group’s liabilities arising from financing activities can be classified as follows:
Long-term
borrowings
Short-term
borrowings
Lease
liabilities
Total
Long-term
borrowings
Short-term
borrowings
Lease
liabilities
Total
Group
ZMW’000
ZMW’000
ZMW’000
ZMW’000
USD’000
USD’000 USD’000 USD’000
1 October 2020
190,218
326,898
43,009
560,125
9,445
16,231
2,136
27,812
Cash-flows:
– Repayment
– Proceeds
Non-cash:
– Exchange
difference
– Reclassification
(262,705)
(477,906)
(32,513)
(773,124)
(12,439)
(22,628)
(1,539)
(36,606)
220,000
449,619
669,619
10,417
21,289
-
31,706
48,042
(87,902)
9,175
(30,685)
4,259
(2,304)
578
2,533
30 September 2021
195,555
210,709
19,671
425,935
11,682
12,588
1,175
25,444
1 October 2019
228,099
343,042
40,784
611,925
17,280
25,988
3,090
46,358
Adoption of IFRS
16
Revised ‘1
October 2019
Cash-flows:
-
-
7,063
7,063
-
-
351
351
228,099
343,042
47,847
618,988
17,280
25,988
3,441
46,709
– Repayment
(162,217)
(623,231)
(35,478)
(820,926)
(10,032)
(38,542)
(2,194)
(50,768)
– Proceeds
– Addition
Non-cash:
– Exchange
difference
-
-
487,320
-
487,320
-
14,329
14,329
-
-
30,137
-
30,137
-
886
886
141,697
102,406
16,311
260,414
3,549
(2,704)
3
848
– Reclassification
(17,361)
17,361
-
-
(1,352)
1,352
-
-
30 September
2020
190,218
326,898
43,009
560,125
9,445
16,231
2,136
27,812
139
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
29.
Reconciliation of liabilities arising from financing activities (continued)
Long-term
borrowings
Short-term
borrowings
Lease
liabilities
Total
Long-term
borrowings
Short-term
borrowings
Lease
liabilities
Total
Company
ZMW’000
ZMW’000
ZMW’000
ZMW’000
USD’000
USD’000 USD’000 USD’000
1 October 2020
190,218
326,898
35,946
553,062
9,445 16,231
2,072
27,748
Cash-flows:
– Repayment
– Proceeds
Non-cash:
(262,705)
(477,906)
(14,163)
(754,774)
(12,439)
(22,628)
(671)
(35,738)
220,000
449,619
-
669,619
10,417
21,289
-
31,706
– Exchange difference
48,042
(87,902)
(13,313)
(53,173)
4,259
(2,304)
(896)
1,059
– Reclassification
30 September 2021
195,555
210,709
8,470
414,734
11,682
12,588
505
24,775
1 October 2019
228,099
343,042
40,784
611,925
17,280 25,988 3,090 46,358
Cash-flows:
– Repayment
(162,217)
(623,231)
(30,835)
(816,283)
(10,032)
(38,542)
(1,907) (50,481)
– Proceeds
– Additions
Non-cash:
-
487,320
-
487,320
-
-
14,329
14,329
-
-
30,137
-
30,137
-
886
886
– Exchange difference
141,697
102,406
11,668
255,771
3,549
(2,704)
3
848
– Reclassification
(17,361)
17,361
-
-
(1,352)
1,352
-
-
30 September 2020
190,218
326,898
35,946
553,062
9,445
16,231 2,072
27,748
140
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
30.
Financial instruments
Financial assets
The Group’s principal financial assets are bank balances and cash and trade receivables. The Group
maintains its bank accounts with major banks in Zambia of high credit standing. Trade receivables are
stated at amounts reduced by appropriate allowances for estimated irrecoverable amounts.
Financial liabilities
The Group’s financial liabilities are bank overdrafts, long term loans and trade payables. Financial
liabilities are classified according to the substance of the contractual arrangements entered into. Trade
payables and loans are stated at their nominal value.
Monetary assets and liabilities in foreign currencies
The tables below show the extent to which Group companies have monetary assets and liabilities in
currencies other than their local currency:
(i) In Zambian Kwacha
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
2021
2020
Financial assets
- Cash at bank
-
Trade receivables
- Other receivables
Financial liabilities
85,776
149,103
29,183
78,383
146,966
21,008
14,532
21,622
16,043
7,139
19,485
7,867
- Bank overdrafts
(87,978)
(78,736)
(146,240)
(136,999)
-
Trade and other payables
(299,376)
(286,121)
(198,419)
(185,163)
- Bank loans
-
Leases
(82,133)
(19,050)
(82,133)
(319,622)
(319,622)
(7,176)
(30,341)
(18,468)
Net exposure
(224,475)
(207,809)
(642,425)
(625,761)
141
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
30.
Financial instruments (continued)
(ii) In US Dollars
Financial assets
- Cash at bank
-
Trade receivables
- Other receivables
Financial liabilities
- Bank overdrafts
-
Trade and other payables
- Bank loans
-
Leases
2021
2020
Group
USD’000s
Company
USD’000s
Group
USD’000s
Company
USD’000s
5,124
8,907
1,743
(5,256)
(17,884)
(4,906)
(1,138)
4,682
8,779
1,254
(4,704)
(17,092)
(4,906)
(429)
722
1,074
797
(7,261)
(9,852)
(15,870)
(1,507)
(31,897)
354
967
391
(6,802)
(9,194)
(15,870)
(917)
(31,071)
Net exposure
(13,410)
(12,416)
(i)
In Zambian Kwacha
2021 - Group
US Dollar
ZMW’000s
SA Rand
ZMW’000s
Other
ZMW’000s
Total
ZMW’000s
Financial Assets
- Cash at bank
-
Trade receivables
- Other receivables
Financial Liabilities
- Bank overdrafts
-
Trade and other payables
- Bank loans
-
Leases
76,631
151,559
265
(83,234)
(276,122)
(82,133)
(12,959)
9,343
5,849
18,486
616
-
2,623
86,590
157,408
21,374
(7,051)
(17,325)
-
(90,285)
(2,470)
(295,917)
-
-
-
-
(82,133)
(12,959)
Net exposure
(225,993)
9,302
769
(215,922)
142
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
30.
Financial instruments (continued)
(i)
In Zambian Kwacha
2020 - Group
Financial Assets
- Cash at bank
-
Trade receivables
- Other receivables
Financial Liabilities
-
-
-
-
Bank overdrafts
Trade and other payables
Bank loans
Leases
Net exposure
US Dollar
SA Rand
Other
Total
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
13,074
21,607
8,294
(146,240)
(178,027)
(319,622)
(30,341)
(631,255)
731
15
3,880
727
-
3,869
-
-
(18,835)
(1,557)
-
-
-
-
14,532
21,622
16,043
(146,240)
(198,419)
(319,622)
(30,341)
(14,209)
3,039
(642,425)
(ii) In US Dollars – Group - 2021
US Dollar
SA Rand
Other
Total
USD’000s
USD’000s
USD’000s
USD’000s
Financial Assets
- Cash at bank
-
Trade receivables
- Other receivables
Financial Liabilities
-
-
-
-
Bank overdrafts
Trade and other payables
Bank loans
Leases
Net exposure
4,578
9,054
16
(4,972)
(16,495)
(4,906)
(774)
(13,499)
558
349
1,104
(421)
(1,035)
-
-
555
37
-
157
-
(148)
-
-
46
5,173
9,403
1,277
(5,393)
(17,678)
(4,906)
(774)
(12,898)
143
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
30.
Financial instruments (continued)
(ii) In US Dollars – Group - 2020
US Dollar
SA Rand
Other
Total
USD’000s
USD’000s
USD’000s
USD’000s
Financial Assets
- Cash at bank
-
Trade receivables
- Other receivables
Financial Liabilities
-
-
-
-
Bank overdrafts
Trade and other payables
Bank loans
Leases
Net exposure
649
1,073
412
(7,261)
(8,839)
(15,870)
(1,507)
(31,343)
36
1
193
-
(935)
-
-
(705)
36
-
192
-
(77)
-
-
151
721
1,074
797
(7,261)
(9,851)
(15,870)
(1,507)
(31,897)
Exposure to currency exchange rates arise from the Group’s sales and purchases which are primarily
denominated in US Dollar and South African Rand. The Group’s activities expose it to a variety of
financial risks. The main risks faced by the Group relate to foreign exchange rates, the risk of default
by counterparties to financial transactions and the availability of funds to meet business needs.
These risks are managed as described below:
(i)
Currency risk
Some of the interest-bearing borrowings are denominated in foreign currencies and therefore
lead to a risk of fluctuation of value due to changes in the foreign exchange rate. This risk
is partially hedged by holding United States Dollar bank balances and United States Dollar
denominated exports.
144
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
30.
Financial instruments (continued)
The table below shows the extent to which Group companies have interest bearing liabilities in
currencies other than their functional currency:
DEG - Deutsche Investitions- und
Entwicklungsgesellschaft mbH
International Finance Corporation
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
-
34,484
34,484
-
2,060
2,060
222,547
97,075
319,622
11,050
4,820
15,870
Foreign currency risk sensitivity analysis
Zambian Kwacha/United States Dollar exchange risk
The following tables illustrate the sensitivity of the net result for the year and equity with regard to the
Group’s foreign currency borrowings “with all other things being equal”. It assumes a +/-10 percent
and 5 percent, movement in the United States Dollar/Zambian Kwacha exchange rate for the year
ended 30 September 2021.
If the Zambian Kwacha had weakened against the United States dollar by 10 percent (2020: 10 percent)
then this would have resulted in the following impact on net profit and equity:
Weakening of the Kwacha
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Net loss
Equity
136,725
7,687
(130,545)
3,834,287
202,908
3,740,112
(7,450)
168,823
2021
2020
If the Zambian Kwacha had strengthened against the United States Dollar by 5 per cent. (2020: 5 per
cent) then this would have resulted in the following impact on net profit and equity:
Strengthening of the Kwacha
ZMW’000s
USD’000s
ZMW’000s
USD’000s
Net profit
Equity
184,668
12,021
(84,564)
3,882,230
202,908
3,788,055
(5,505)
197,985
2021
2020
There is no material difference between the carrying value and the fair value of the Group’s financial
liabilities.
145
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
30.
Financial instruments (continued)
(ii)
Interest rate risk
As the Group has no significant interest-bearing assets, the Group’s income and operating cash
flows are substantially independent of changes in market interest rates.
The Group’s interest rate risk arises from overdraft facilities and long-term borrowings. Borrowings
issued at variable rates expose the Group to interest rate risk. The interest rates to which the
Group is exposed are set out in notes 20, 23 and 24. The risk of interest rate movements is
managed through on-going monitoring of the Group’s overdrafts and long-term borrowings, the
spreading of debt between a number of financial institutions and the denomination of debt in
Zambian Kwacha and USD.
The Group’s term facilities are medium to long term with fixed spread over LIBOR. A 0.5 percent
movement in the LIBOR rate would not have a material impact on the interest expense for the
Group.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change
of interest of +/- 5%. These changes are considered to be reasonably possible based on the
current market conditions that have been adversely affected by the outbreak of COVID-19. All
other variables are held constant.
Profit
Equity
Changes in interest rates
+5%
-5%
+5%
-5%
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
30 September 2021
30 September 2020
(55,726)
(34,829)
55,726
34,829
(44,681)
(27,863)
35,666
22,291
Profit
Equity
Changes in interest rates
+5%
-5%
+5%
-5%
USD’000s
ÚSD’000s
USD’000s
USD’000s
30 September 2021
30 September 2020
(2,638)
(2,154)
2,638
2,154
(2,116)
(1,723)
1,688
1,379
(iii) Market risk
The Group is not exposed to the risk of the value of its financial assets fluctuating as a result of
changes in market prices.
146
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
30.
Financial instruments (continued)
(a) Credit risk
(i)
Trade receivables
The Directors believe the credit risk of trade receivables is low. The credit risk is managed
by the selective granting of credit.
(b) Liquidity risk
Liquidity risk is the risk that the Group might be unable to meet its obligations associated with its
financial liabilities. The Group monitors rolling forecasts of the Group’s liquidity requirements to
ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on
any undrawn borrowing facilities so that the Group does not breach limits or covenants (where
applicable) on any of its borrowing facilities. The maturity of the Group’s financial liabilities with
respect to borrowings is set out in notes 20, 23 and 24.
30 September 2021
Current
Non-current
Within 6
months
6 to 12
months
1 to 5
years
later than
years
ZMW’000
ZMW’000
ZMW’000
ZMW’000
Interest bearing liabilities
Other bank borrowings
Lease obligations
Trade and other payables
113,990
-
12,174
468,444
227,980
490,204
12,174
-
178,284
-
7,497
-
-
-
-
-
30 September 2021
Current
Non-current
Within 6
months
6 to 12
months
1 to 5 years
later than
years
USD’000
USD’000
USD’000
USD’000
Interest bearing liabilities
Other bank borrowings
Lease obligations
Trade and other payables
6,809
-
363
27,983
13,619
28,283
727
-
10,650
-
448
-
-
-
-
-
31. Fair value measurement
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the statement of financial position
are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the
observability of significant inputs to the measurement, as follows:
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3: unobservable inputs for the asset or liability.
147
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
31.
Fair value measurement (continued)
The Group had no financial assets within the hierarchy of financial assets and liabilities measured at fair
value on a recurring basis at 30 September 2021, 30 September 2020, and 1 October 2019.
Fair value measurement of non-financial assets
The following table shows the Levels within the hierarchy of non-financial assets measured at fair value
on a recurring basis at 30 September 2021, 30 September 2020, and 1 October 2019:
30 September 2021
Land held for production in Zambia
Office building in Zambia
Plant and machinery
Biological assets
30 September 2020
Land held for production in Zambia
Office building in Zambia
Plant and machinery
Biological assets
Level 1
ZMW’000
-
-
-
-
Level 1
ZMW’000
-
-
-
-
Level 2
ZMW’000
2,186,376
50,585
759,885
368,802
Level 2
ZMW’000
2,396,328
50,585
1,006,185
176,305
Level 3
ZMW’000
-
-
-
-
Level 3
ZMW’000
-
-
-
-
Total
ZMW’000
2,186,376
50,585
759,885
368,802
Total
ZMW’000
2,396,328
50,585
1,006,185
176,305
1 October 2019
Level 1
Level 2
Level 3
Total
Land held for production in Zambia
Office building in Zambia
Plant and machinery
Biological assets
30 September 2021
Land held for production in Zambia
Office building in Zambia
Plant and machinery
Biological assets
30 September 2020
Land held for production in Zambia
Office building in Zambia
Plant and machinery
Biological assets
1 October 2019
Land held for production in Zambia
Office building in Zambia
Plant and machinery
Biological assets
-
-
-
-
Level 1
USD’000
-
-
-
-
Level 1
USD’000
-
-
-
-
Level 1
USD’000
-
-
-
-
1,994,196
48,856
874,965
170,417
Level 2
USD’000
130,608
3,022
45,393
22,031
Level 2
USD’000
118,784
2,511
49,959
8,754
Level 2
USD’000
151,076
3,701
66,284
12,910
-
-
-
-
Level 3
USD’000
-
-
-
-
Level 3
USD’000
-
-
-
-
Level 3
USD’000
-
-
-
-
1,994,196
48,856
874,965
170,417
Total
USD’000
130,608
3,022
45,393
22,031
Total
USD’000
118,784
2,511
49,959
8,754
Total
USD’000
151,076
3,701
66,284
12,910
Fair value of the Group’s main property assets is estimated based on appraisals performed by
independent, professionally-qualified property valuers, Fairworld Properties Limited. The significant
inputs and assumptions are developed in close consultation with management. The valuation processes
and fair value changes are reviewed by the Board of Directors and audit committee at each reporting
date.
148
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
31.
Fair value measurement (continued)
Further information is set out below.
Land held for production in Zambia (Level 2)
Land has been valued using the direct comparison method. This method has been adopted as the
most appropriate for the purpose of this valuation as there are enough comparisons available on the
open market for land. The land was revalued on 30 September 2021. Management determined that
the effect of changes in fair values between the valuation and reporting date is immaterial.
The significant unobservable input is the adjustment for factors specific to the land in question. The
extent and direction of this adjustment depends on the number and characteristics of the observable
market transactions in similar properties that are used as the starting point for valuation. Although
this input is a subjective judgement, management considers that the overall valuation would not be
materially affected by reasonably possible alternative assumptions.
Office building in Zambia (Level 2)
The fair values of the office buildings are estimated by using the direct comparison method. This
method has been adopted as the most appropriate for the purpose of this valuation as there are
enough comparisons available on the open market for buildings.
Plant and machinery (Level 2)
Plant and machinery have been valued using the direct comparison method. This method has been
adopted as the most appropriate for the purpose of this valuation as there are enough comparisons
available on the open market for plant and machinery. The plant and machinery were revalued on
30 September 2021. Management determined that the effect of changes in fair values between the
valuation and reporting date is immaterial.
Biological assets (Level 2)
Biological assets are valued at their fair values less estimated point of sale costs as determined by the
Directors. The fair value of livestock is determined based on market prices of animals of similar age,
breed and genetic merit. Standing crops are valued at fair value at each reporting date based on the
estimated market value of fully grown standing crops adjusted for the age and condition of the crops
at the reporting date.
Biological assets are measured at fair value less estimated costs to sell. In estimating fair values and
costs to sell, management considers the most reliable evidence at the times the estimates are made.
The most significant estimate relates to management’s assessment of anticipated yield per hectare
for establishing the fair value of standing crops. This assessment considers historical yields, climate
conditions and other key factors. The significant input is adjustment related to the crops rate of growth
and estimating of the biological transformation that comprises various processes that cause qualitative
and quantitative changes in the biological asset.
32. Capital commitments
2021
2020
ZMW’000s USD’000s ZMW’000s USD’000s
Capital commitments entered into at the
reporting date
2,100
125
6,690
Not contracted for at the reporting date
-
-
-
332
-
149
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
33. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note. Details of the significant
transactions between the Group and other related parties during the year ended 30 September 2021
are as follows:
(a)
The Group made the following sales to related parties:
Sale of
ZMW’000s USD’000s ZMW’000s USD’000s
2021
2020
Wellspring Ranch
Danny Museteka
Squares Ranch
Animal feeds/
bran
Animal feeds/
bran
Animal feeds/
bran
-
593
-
593
-
28
-
28
98
4,568
28
4,694
6
282
2
290
(b)
The Group made the following purchases from related parties:
Purchase of
ZMW’000s USD’000s ZMW’000s USD’000s
2021
2020
Wellspring Limited
Tembilo Farms
Cattle beef
Chickens
Tractorzam Limited
Tractors/spares
Chisamba Ranching and
Cropping
Lillian Limbuka
Beef
Pigs
-
307
-
-
7,719
8,026
-
15
-
-
365
380
5,553
1,301
6,176
343
80
382
26,495
1,638
4,727
44,252
292
2,735
(c) Sales of goods to related parties were made at the Group’s usual list prices.
(d) Purchases were made at market price.
(e)
The amounts outstanding are unsecured and will be settled in cash. No guarantees have
been given or received.
No expense has been recognised in the period for bad or doubtful debts in respect of the
amounts owed by related parties.
The parties are related by virtue of certain Directors of the Group having a shareholding in
the respective companies.
(f)
(g)
(h) Directors of the Group have shareholdings in the Company as stated in the Report of
the Directors. No dividends have been paid to the Directors via their direct and indirect
shareholdings.
Key management compensation.
(i)
150
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
33. Related party transactions (continued)
The remuneration of Directors and other members of key management during the year were as follows:
2021
2020
Group
Company
Group
Company
ZMW’000s
ZMW’000s
ZMW’000s
ZMW’000s
Short-term benefits
141,669
108,889
81,862
70,091
Post-employment benefits
Other long-term benefits
-
-
-
-
-
-
-
-
Short-term benefits
Post-employment benefits
Other long-term benefits
Group
Company
Group
Company
USD’000s
USD’000s
USD’000s
USD’000s
6,708
5,156
5,062
4,335
-
-
-
-
-
-
-
-
The remuneration of Directors and key executives is determined by the remuneration committee having
regard to the performance of individuals and market trends.
(j)
There were no loans to related parties and key management personnel.
(k)
The Company made the following sales to related parties:
Zambeef Retailing Limited
Masterpork Limited
Zam Chick Limited
Zamhatch Limited
Zamleather Limited
Welllspring Limited
Squares Ranch
Danny Museteka
2021
2020
ZMW’000s
USD’000s
ZMW’000s
USD’000s
996,507
29,430
224,118
91,840
1,799
-
-
47,183
1,071,967
1,393
10,612
4,348
85
-
-
32,102
193,246
116,626
211
98
28
-
1,343,694
-
63,621
4,568
1,418,846
66,294
1,985
11,951
7,213
13
6
2
282
87,746
151
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
33. Related party transactions (continued)
(l)
The Company made the following purchases from related parties
Zambeef Retailing Limited
Zamleather Limited
Zam Chick Limited
Tractorzam Limited
Masterpork Limited
Squares Ranch
Zamhatch Limited
Chisamba Ranching and Cropping
Wellspring Limited
2021
2020
ZMW’000
USD’000
ZMW’000
USD’000
3,810
2,239
1,958
-
19,956
-
7,086
-
-
35,049
180
134
117
-
945
-
423
-
-
1,799
1,852
1,805
913
6,176
40,583
705
24,690
1,237
5,553
83,514
115
112
56
382
2,510
44
1,527
77
343
5,166
34. Assets held for sale
In the year 2020 management decided to sell Chiawa Farm. As such the assets and liabilities of Chiawa
Farm are classified as assets held for sale. The sale is expected to materialise in the next year as investor
confidence in the country’s economy has improved over the period. Chiawa Farm is a part of the cropping
segment.
Previously management had decided to sell the assets of Sinazongwe Farm and the sale was concluded
during the financial year ended 30 September 2020.
The income generated by assets held for sale was as follows:
Revenue
Cost of sales
Administration costs
Operating profit/(loss)
Depreciation
Exchange losses
Profit from disposal of Sinazongwe
farm
Profit from asset held for sale before
tax
Tax (expense)/credit
Profit for the year
September
2021
September
2021
September
2020
September
2020
ZMW’000
USD’000
ZMW’000
USD’000
181,519
(108,382)
(34,292)
38,845
(6,896)
-
-
8,595
(5,132)
(1,624)
1,839
(326)
-
-
67,465
(30,893)
(28,422)
8,150
(6,621)
-
4,172
(1,911)
(1,757)
504
(409)
(168)
31,906
2,141
31,949
1,513
-
-
-
-
-
-
31,949
1,513
33,435
2,068
152
Zambeef Products PLC Annual Report 2021
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
34. Assets held for sale (continued)
The assets and liabilities of the unit held for sale are as follows:
September
2021
September
2021
September
2020
September
2020
ZMW’000
USD’000
ZMW’000
USD’000
Property, plant and equipment
Total non-current assets
170,550
170,550
10,188
10,188
175,654
175,654
8,722
8,722
Biological assets
Inventories
Total current assets
Assets classified as held for sale
Total non-current liabilities
Trade and other payables
Cash and cash equivalents
Total current liabilities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The cash flow effects of the unit held for sale are as follows:
Cash outflow from operating
activities
Cash inflow from investing activities
Cash outflow from financing activities
September
2021
September
2021
September
2020
September
2020
ZMW’000
USD’000
ZMW’000
USD’000
31,949
1,513
-
-
-
-
1,529
167,264
-
95
10,344
-
Previously management decided to sell the assets of Sinazongwe Farm and the sale was concluded
during the financial year ended 30 September 2020.
The sale proceeds from the sale of Sinazongwe farm was K167.3 million (USD 10.3 million) after the
payment of property transfer tax of K8 million (USD 498.8 thousand) and other disposal costs. A profit of
K31.906 million was realised from the disposal of the property, plant and equipment which was carried
at K135.36 million.
35. Contingent liabilities
Various legal claims were brought against the Group during the year. Unless recognised as a provision
(see Note 27), management considers these claims to be unjustified and the probability that they will
require settlement at the Group’s expense to be remote. This evaluation is consistent with external
independent legal advice.
36.
Impact of COVID-19 pandemic
All the divisions of the Group remained operational throughout the pandemic with only minor localised
disruption of business activities. Consumer demand had however remained strong throughout the
period as the country did not go into a total lockdown. Social distancing, sanitising and wearing of
masks has been implemented at all work sites among employees and also at the retail outlets for the
customers.
153
Zambeef Products PLC Annual Report 2021STRATEGIC REPORTCORPORATE GOVERNANCEFINANCIAL STATEMENTSOVERVIEW
NOTES TO THE FINANCIAL STATEMENTS - 30 SEPTEMBER 2021
37. Comparative figures
Where necessary, comparative figures have been reclassified to simplify proper assessment as follows:
Distribution costs – Distribution costs of ZMW66,770 thousand have been reclassified
-
from administration expenses and are presented separately on the face of the statement of
comprehensive income.
-
-
Right of use assets – Non-cash and cash flows in the statement of cash flows, have been
reclassified from investing activities and operating activities respectively. They are classified as
cash outflow on investing activities of ZMW15,425 thousand and charge on right of use assets
of ZMW8,362 thousand.
Tax reconciliation – Tax reconciliation was recast to show the breakdown of non-deductible
expenses amounting to ZMW6.5million in 2021 compared to ZMW59.9million in 2020.
Further the unrecognised deferred tax asset of ZMW36.4million in 2021 compared to
ZMW87.9million in 2020 was disclosed in the reconciliation.
38. Events subsequent to reporting date
No item, transaction or event of a material and unusual nature has arisen since 30 September 2021,
which in the opinion of the directors would substantially affect the operations of the economic entity,
the results of those operations or the state of affairs of the economic entity in the subsequent financial
years
27TH ANNUAL GENERAL
MEETING
154
Zambeef Products PLC Annual Report 2021
27TH ANNUAL GENERAL
MEETING
Zambeef Products PLC Annual Report 2021
155
Zambeef Products PLC
(“Zambeef” or the “Group”)
[INCORPORATED IN THE REPUBLIC OF ZAMBIA]
COMPANY REGISTRATION NUMBER: 31824
SHARE CODE: ZAMBEEF
ISIN: ZM0000000201
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 27th Annual General Meeting of the members of the company will be held virtually on
Tuesday, December 21 2021 at 10:00 hours; in respect of the year ended 30 September 2021.
AGENDA
1.
Minutes of the previous meeting
To receive and note the minutes of the 26th Annual General Meeting held on 24 December, 2020 duly approved by
the Chairman in accordance with the Companies Act.
2.
Financial statements
To receive adopt and approve the reports of the Directors, the Auditors and the Financial Statements for the year
ended September 30, 2021 - (Ordinary resolution number 1)
3.
Ordinary Resolutions
To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolutions;
3.1 Ordinary resolution number 2 – Confirmation of appointment of directors – Roman Frenkel, Pearson
Gowero and Katebe Monica Musonda
To confirm the appointment of Messer’s Roman Frenkel, Pearson Gowero and Ms Monica Musonda, who
were appointed by the board as a director with effect from 1st March, 2021.
3.2 Ordinary resolution number 3 – Re-election of directors retiring by rotation
To re-elect each of Messrs Frank Braeken, Yollard Kachinda and Michael Mundashi SC who retire by rotation
in terms of Companies Act, and who, being eligible, offer themselves for re-election.
The board recommends their re-election to shareholders.
3.3 Ordinary resolution number 4 – Appointment of the independent auditor
Pursuant to the requirements of sections 257(1) of the Companies Act No. 10 of 2017, and as nominated
by the company’s Audit Committee, to resolve that Messer’s PricewaterhouseCoopers be appointed as
the company’s independent registered auditor for the financial year ending 30 September 2022 and to
authorise the directors to determine their remuneration.
4.
Non - Declaration of final dividend
The directors recommend that no dividend be paid for the financial year-ending 30 September 2021. It is noted
that in terms of company’s Articles, the company may only declare a dividend if the directors have recommended
a dividend.
5.
Other business
To transact such other business as may be transacted at an annual general meeting of members.
156156
Zambeef Products PLC Annual Report 2021
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(c)
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(d)
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(e)
If you have problems with the login, please call, the following helplines +260950968435, +260979420470 and
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A Member is entitled to appoint one or more proxies to attend, speak and vote in his or her stead. A proxy need not
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.
Queries pertaining to shareholder relations such as change of address or bank details are to be channelled through
the Transfer Secretaries, whose contact address is:
Corpserve Transfer Agents Limited
6 Mwaleshi Road, Olympia Park, Lusaka, Zambia
Telephone : +260 (211) 256969/70
Facsimile : +260 (211) 256975
Email: - info@corpservezambia.com.zm
By Order of the Board
Mwansa M Mutimushi
COMPANY SECRETARY
157
157
Zambeef Products PLC Annual Report 2021 December 2020 AGM Attendance Register
Zambeef Products Plc
1) Proxies
Name
Proxy
Shares Held
Standard Chartered Zambia Securities Services Nominees Ltd (CDC)
Michael Mundashi SC
52,601,435
National Pension Scheme Authority
Saturnia Regna Pension Trust Fund
Sussex Trust
KCM Pension Trust Scheme
Zambia Sugar Pension Trust -Scheme
Stanbic Bank Pension Trust Fund
Barclays Bank Staff Pension Trust Fund
Zanaco Plc Dc Pension Scheme
Standard Chartered Bank Pension Trust Fund
Lafarge Cement Zambia Plc Pension Trust Scheme
Indeni Pension Trust Scheme
Picz Pension Trust-Money Purchase
CEC Pension Trust Scheme
Lubambe Copper Mines Pension Trust Scheme
Buyantanshi Pension Trust Fund
Sandvic Minning Pension Scheme
Airtel Zambia Staff Pension Fund
Cavmont Bank Zambia Pension Trust Scheme
National Breweries Pension Trust Scheme
Golden Sunset Pension Fund
Rail Systems of Zambia
Examinations Council of Zambia
Prudential Life Assurance Zambia Limited
Ecobank Zambia Limited Pension Trust Scheme
SCZ International Ltd Pension Trust
Finance Bank
Deloitte And Touch Pension Trust Schemd
Zambia National Building Society
Sun International Pension Trust Scheme
UTI Zambia Limited Staff Pension Trust Scheme
Africa 53
Toyota Zambia
Workcom Pension Trust Scheme
Workcom Trust Pension Scheme Ppmz
Multichoice Pension Scheme
Buyantanshi Pension Trust Fund
Zambezi River Authority
Golden Kapopo
Mumba Musunga
John Rabb
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mutale Mpundu
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mumba Musunga
Mutale Mpundu
Mutale Mpundu
Mutale Mpundu
Mumba Musunga
Mumba Musunga
Mutale Mpundu
Mumba Musunga
Mutale Mpundu
Mumba Musunga
Mumba Musunga
Mutale Mpundu
Mutale Mpundu
Mumba Musunga
Mutale Mpundu
Mutale Mpundu
Mutale Mpundu
Mutale Mpundu
Health Sector Grant Aided Institutions Pension Scheme
Mumba Musunga
158
24,797,819
17,793,214
14,000,000
6,960,906
3,288,436
2,878,354
2,477,657
1,334,161
1,108,671
1,012,190
990,224
616,160
563,950
532,763
524,155
493,562
473,966
308,678
202,112
196,544
175,160
171,877
154,460
154,259
141,503
137,931
124,994
110,266
94,913
81,709
66,689
65,808
59,199
59,198
50,334
47,393
40,600
30,000
Zambeef Products PLC Annual Report 2021 Name
Young And Rubicam Pension Trust Scheme
Zambia Episcopal Conference (ZEC)
Lusaka Trust Pension Scheme
Final Salary
ZRL Pension Trust Scheme
Sanlam Life Insurance (Z) Ltd
Game Stores Pension Trust Scheme
Stockbrokers Zambia Ltd.
Total
2) Attendees - Shareholders
Name
Mbewe Conrad
Liebenthal Robert & Ompie M
Namakando Namakando
Patrick Ngosa
Chilufya Musonda Clarence
Nsama Mubanga Burnham
Dennis Mhango
Total
Proxy
Shares Held
Mumba Musunga
Mutale Mpundu
Mutale Mpundu
Mutale Mpundu
Mutale Mpundu
Mumba Musunga
Mumba Musunga
Boniface Mwamba
24,438
15,277
14,558
13,790
5,704
4,550
3,191
1,926
135,004,684
Proxy
Shares Held
7,048
4,688
1,003
730
447
371
172
14,459
159
Zambeef Products PLC Annual Report 2021
3) Attendees - Non Shareholders
Name
Prisca Chizi
James Ndhlovu
Tim Harper
Nyambe Mbanga
Chilala Banda
Christopher Mulenga
Gillian Langmead
Kebby Kaumbi
Musopelo Mwanda
Tidale Mwale - Chisunka
Nenani Sichone
Ernest Kando
Diana Mkonda
Mulolwa Nkhata
Jack Kanyanga
Caroline Mulaga
Baron Chisola
Danny Museteka
Kenny Mukulo
Chishala Malekano
Emmanuel Chembo
Mulwanda Sichula
Faith Mukutu
Mboo Mumba
Representing
Corpserve Zambia
Corpserve Zambia
Finncap
Grant Thornton
Grant Thornton
Grant Thornton
Langmead & Baker Ltd
National Pensions Scheme Authority
National Pensions Scheme Authority
Pangaea Securities
Pangaea Securities
Prudential Life Assurance Zambia
Standard Chartered Bank
Standard Chartered Bank
Stockbrokers Zambia Limited
Zambeef Products Plc
Zambeef Products Plc
Zambeef Products Plc
Zambeef Products Plc
Zambeef Products Plc
Zambeef Products Plc
Zambeef Products Plc
Zambeef Products Plc
Zambeef Products Plc
Count
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
160
Zambeef Products PLC Annual Report 2021 ZAMBEEF PRODUCTS PLC
FORM OF PROXY
For the 27th Annual General Meeting
I/We ______________________________________________________________________________________________________
(Name/s in block letters)
of _________________________________________________________________________ (address)
being a member/ member of the above-named Company hereby appoint
Number of votes
1. ____________________________________ of ________________________________ or in his absence
(1 share = 1 vote)
1. ____________________________________ of ________________________________ or in his absence
3.
the Chairman of the meeting
As my/our proxy to vote for me/us on my/our behalf at the annual meeting of the company to be held virtually on
Tuesday 21 December 2021 at 10:00 hours and at any adjournment thereof as follows:
Resolution
No.
Agenda Item
Mark with X where applicable
In Favour
Against
Abstain
1
2
To receive adopt and approve the reports of the
Directors, the Auditors and the Financial Statements for
the year ended September 30, 2021
Confirmation of Appointment of Directors: -
i. Roman Frenkel
ii. Pearson Gowero
iii. Katebe Monica Musonda
3
Re-election of directors
i. Frank Braeken
ii. Yollard Kachinda
iii. Michael Mundashi SC
4.
Pursuant to Sec. 257 of the Companies Act: To appoint
Messer’s PricewaterhouseCoopers as the independent
auditors and authorise the directors to determine the
auditor’s fees.
Unless otherwise instructed, the proxy will vote as he thinks fit.
Signed at ________________________ on this ___________________ day of ___________________ 2021
Signature _________________________________________________________________________________________________
Assisted by me (where applicable) (see note 3) ________________________________________________________________
Full name/s of signatory/ies if signing in a representative capacity (see note 4) _____________________________________
161
Zambeef Products PLC Annual Report 2021
NOTES TO THE FORM OF PROXY
1.
2.
3.
4.
5.
6.
7.
A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend, speak and
vote in his/her stead. A proxy need not be a member of the Company.
If this proxy form is returned without any indication as to how the proxy should vote, the proxy will be entitled to
vote or abstain from voting as he/she thinks fit.
A minor must be assisted by his/her guardian.
The authority of a person signing a proxy in a representative capacity must be attached to the proxy unless the
Company has already recorded that authority.
In order to be effective, proxy forms must reach the registered office of the Company or the transfer secretaries
before the Annual General Meeting.
The delivery of the duly completed proxy form shall not preclude any member or his/her duly authorised
representative from attending the meeting, speaking and voting instead of such duly appointed proxy.
If two or more proxies attended the meeting, then that person attending the meeting whose name appears first on
the proxy form, and whose name is not deleted, shall be regarded as the validly appointed proxy.
162
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Zambeef Products PLC Annual Report 2021
Zambeef Products PLC Annual Report 2021
164
Zambeef Products PLC Annual Report 2021