Expanding Horizons, Feeding the Nation
ANNUAL
R E P O RT
2023
2
Annual Report 2023Zambeef Products PLC CONTENTS
Overview
Zambeef at a Glance
Key Milestones
Strategic Reports
Chairman’s Report
Chief Executive Officer’s Report
Sustainability Report
Corporate Governance
Board Reports
Board of Directors
Director’s Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Financial Statements 30 September 2023
Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Supplementary Information - presented in USD (unaudited)
Notice of AGM
Proxy Form
4
6
8
10
13
19
31
34
37
30
44
46
47
48
49
50
51
118
124
132
Annual Report 2023
3
3
Annual Report 2023Zambeef Products PLC Zambeef at a Glance
Who we are
§
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, dairy, fish, flour, stockfeed and day-old chicks throughout Zambia and
the surrounding region. It has further retail operations in Nigeria and Ghana.
Zambeef also has one of the largest row cropping operations in Zambia, growing
wheat, soya beans and maize. Zambeef plants nearly 20,987 hectares annually, with
most of the resulting crops being used in the Zambeef animal feed and flour milling
businesses.
Our Focus
To be the food provider of choice through accessible, affordable and reliable supply. We
aspire to be the most sustainable social, environmental and financially viable business in
the diversified foods industry within Zambia and the region.
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.
Business Segments
Retailing and Cold Chain Food Products
Zambeef’s products are retailed through 237 outlets (2022: 233) directly to end-
consumers, in a value-added form, either through the Zambeef concession agreement
to operate Shoprite’s in-store butcheries (41 in 2023; 41 in 2022) or through Zambeef’s
own retail and wholesale distribution network in Zambia (196 in 2023; 182 in 2022).
Zambeef operates inhouse bucheries in West Africa - Nigeria and Ghana.
Zambeef also operates one of the largest transport and trucking fleets in Zambia (252
trucks), giving Zambeef control over its logistics and distribution.
4
Annual Report 2023Zambeef Products PLC Zambeef at a Glance (continued)
§ The largest processor of beef in Zambia.
§
Five active beef abattoirs (capacity to slaughter 230,000 head p.a.) and five
feedlots located across Zambia (standing capacity 16,000 head).
§ 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 9.4m broilers p.a.). The Group’s breeding and hatchery operations also
supply large quantities of day-old broiler chicks (capacity 25m p.a.) to small- and
medium-scale poultry producers.
§ One of the largest pork processing plants in Zambia, producing bacon, pork
sausages and other meat products. (capacity to slaughter 102,000 heads
p.a.)
§ Dairy farm with approximately 3,685 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.
Cropping and Milling
§
The leading stockfeed producer in Zambia, operating two feed mills, in Lusaka and
Mpongwe, with a capacity of 300,000 tonnes p.a.
§ Novatek is the only stockfeed producer in Zambia with ISO 22,000 Food Safety
Management certification.
§ Novatek supplies feed to Zambeef livestock farming operations and also supplies
168 branded shops owned by external agents (2022: 168) in addition to Zambeef
retail outlets.
§ One of the largest row cropping operations in Zambia.
§
In winter Zambeef plants 7,265 Ha and a total 15,189 Ha is planted in Summer. Due
to double cropping of irrigated land the total area planted annually is 22,454 Ha.
§ Crop production focuses on soyabeans and maize during summer and wheat
during winter.
§ Wheat mill with a capacity to mill 25,000 MT of wheat p.a.
§
§
The largest tannery in Zambia, with a processing capacity of 144,000 hides p.a.
The largest shoe manufacturing plant in Zambia, with a production capacity of
153,000 pairs p.a.
§ One bakery with the capacity to bake 1.2 million loaves of bread p.a.
5
Annual Report 2023Zambeef Products PLC Key Milestones
Zambeef Products
Ltd. incorporated.
1994
1995
Secured concession to
operate the butcheries in all
Shoprite stores in Zambia
2003
Listed on Lusaka Stock
Exchange.
2005
Sinazongwe Abattoir
built
2009
Zampalm and Novatek
Animal Feeds established
Acquired Huntley Farm
(abattoir and feedlot)
1996
Acquired Sinazongwe
Farm, Shoprite expansion
into Nigeria & Ghana
2004
First equity capital raise
(Acquired Masterpork, Chiawa
Farm, Amanita Soya crushing
and refining plant)
2008
Listed on the London Stock
exchange (AIM). Acquired
Mpongwe Farms
2011
BII formerly known as CDC Group
PLC acquires 38% Zambeef
equity for US$65million. Put option
settled to RCL Foods for full
interests in Zamchick & Zamhatch
2016
IDC Zambia acquires
90% of Zampalm ltd for
US$16million
2018
USD$100 million major
expansion plan
2022
2013
Entered into joint venture
with Rainbow Chickens on
Zamchick & Zamhatch
2017
Secured concession to
operate the butcheries in all
Shoprite stores in Zambia
2020
Disposal of Sinazongwe
Farm for US$10million
2023
Started the restructuring
of the Zambeef Group
6
Annual Report 2023Zambeef Products PLC Feeding a growing region
Our foot print
Zambeef Products PLC
Master
Meats
7
Master
Meats
27
Ghana
Shoprites
Total Ghana
Nigeria
Shoprites
Master Meats Outlets
Total Nigeria
Zambia
Zambeef Outlets
Zambeef Macros
Novatek
Bakery
Zamshu Outlets
Total Zambeef Outlets
Shoprites
Total Zambia
Total Zambeef
Total Shoprites
Total Master Meats
2023
2022
7
7
7
7
2023
2022
26
1
27
25
0
25
2023
2022
59
50
42
3
42
196
41
237
60
50
36
1
35
182
41
223
2023
196
74
1
2022
182
73
0
Total Retail Network
271
255
237
Annual Report 2023
7
CHAIRMAN’S REPORT
The Group’s performance
underscores our resilience
within an ever-evolving market
and highlights the robustness
of our vertically integrated
business model, the cornerstone
in creating enduring value for
our esteemed shareholders.
Dear Shareholder,
Over the past financial year, we navigated an extremely
challenging operational landscape. The primary drivers’
midst the ongoing economic headwinds in Zambia were
other factors such as the longer-than-planned foreign
debt restructuring, subdued copper mining activities,
and the devastating impact of climate change affecting
crop yields and rainfall patterns.
At the back of these adversities, the 2023 Government
GDP growth projection of 4.2% was revised downwards
to 2.7%. Consequently, the country saw a tightened
monetary policy coupled with food and energy inflation
which led to a reduced liquidity situation and limited
consumer expenditure. The depreciation of the Kwacha
against major foreign currencies led to escalated costs
in critical inputs such as fuel and agricultural inputs,
further putting pressure on margins.
the
Despite
tough operating environment, our
management team remained focused on our strategy
and through a concerted effort, prioritising revenue
maximisation, volume growth and cost management,
which positioned the group for the commendable
results achieved.
The Group’s performance underscores our resilience
within an ever-evolving market and highlights the
8
robustness of our vertically integrated business model,
the cornerstone in creating enduring value for our
esteemed shareholders.
Strategy
The Board maintains
its unwavering commitment
to realizing the Group's strategic objectives, even in
the face of seasonal market dynamics and economic
fluctuations. The five-year strategy focuses on:
§ Strengthening our core business through targeted
investments and expanding market share.
§ Crafting a tailored human capital strategy to meet
the organizational needs.
§ Enhancing strategic partnerships to bolster our
competitive edge and market position.
§ Divestiture of non-core assets
to allocate
resources effectively.
The three to five-year US$100 million expansion
program, announced last year, is poised to bolster
various value chain capacities within the Group. This
initiative is anticipated to have a transformative impact
on the Zambian economy, fostering
job creation,
augmenting tax revenues, and providing essential
including small-
support to ancillary enterprises,
scale farmers and medium-sized businesses. The
Annual Report 2023Zambeef Products PLC Chairman’s Report (continued)
expansion of the Mpongwe Farm row cropping capacity
is advancing, with the inaugural 7,168 metric tonnes
of wheat crop harvested in the financial year under
review. This milestone is expected to bring about a
substantial enhancement in production efficiency and
capacity throughout the downstream food value chains.
Concurrently, upgrades to the milling and processing
facilities are also making significant progress.
During the year, we had the honour of hosting His
Excellency Hakainde Hichilema, the President of the
Republic of Zambia, who inspected some of our strategic
projects
include the Cropping
expansion, Hatchery expansion, and the new wheat mill.
This event also marked the official launch of the 2023
Wheat harvest season.
in Mpongwe. These
The Economic Environment
the
the fiscal year,
Throughout
local currency
experienced notable volatility against the US Dollar,
with fluctuations of up to 35%. This fluctuation was
primarily driven by heightened demand for the USD,
uncertainties surrounding debt restructuring, and
a sustained increase in global interest rates, which
affected offshore investor participation in local bond
auctions. The ZMW/USD exchange rate commenced
at K15.9 and concluded at K21.31, representing a 35%
surge. Inflation, a critical economic indicator, concluded
the financial year at 12%, as opposed to the previous
year's 9.9%. This was attributed to the depreciation of
the currency, along with escalating food and energy
prices, despite the persistent implementation of a
stringent monetary policy by the central bank.
Noteworthy was the resurgence
in copper prices,
which peaked at USD 8,230/MT, fuelled by China’s
copper consumption. However, subdued production
impede the realization of full
levels continued to
value,
economy's
the
foreign exchange earnings potential. These dynamic
underscores the delicate balance between global
market forces and domestic production capacities.
consequently
impacting
Outlook
The enduring stability of the economy hinges on
the successful resolution of the government's debt
restructuring negotiations. We foresee a positive
trajectory for copper prices, a vital contributor to our
foreign exchange earnings, fuelled by rising global
demand, notably from China and the burgeoning
electric vehicle market. The recently unveiled 2024
National budget has instilled optimism, as it signals
an increase in government expenditure, anticipated to
infuse much-needed liquidity into the economy. We are
optimistic, that this will bolster consumer spending and
subsequently drive economic growth.
Zambeef
is strategically positioned to seize the
opportunities ahead and demonstrates adaptability
in the face of an otherwise challenging operating
environment. This resilience and strategic foresight
underscore our commitment to navigating through
complexities and thriving in the ever-evolving economic
landscape.
16 September 2024 will be the eighth anniversary of
British International Investment plc’s (BII) investment in
the Company. After this date BII’s conversion rights on
their convertible redeemable preference shareholding
(“Preference Shares”) will increase materially, from
currently one-for-one new ordinary share, to one for
3.0833 (recurring) new ordinary shares. BII is the
largest ordinary shareholder and also
Company’s
holds all Preference Shares. The Company has the
right to redeem all or part of the Preference Shares
at the redemption price, which would give BII a 12%
compounded annual return on their investment, subject
to a minimum of USD 0.77 per share (less dividends
received). However, the likelihood of such a repayment
by the Company in this new financial year, or in the
medium term, is currently considered by the Board to
be extremely unlikely. Further details of the Preference
Shares are provided
in note 21 to the financial
statements.
Acknowledgement
Since my last report, we welcomed two additional
Non-Executive Directors of the Board; Mr. Muyangwa
Muyangwa and Dr. John Clifford Rich. Their respective
appointments and subsequent announcements were
on 21 April and 21 June 2023 respectively. We are
confident that their extensive experience (as has been
illustrated in their brief Curriculum vitae on page 31) will
be instrumental in driving our business forward, in line
with our strategic objectives.
I am indebted to my fellow Board members for their
devoted leadership throughout the year and I convey my
sincere appreciation to our diligent management and
staff for yet another year of commendable performance.
The steadfast tenacity and fortitude shown in the face
of challenges is a testament to the team. I take great
pride in our collective achievements thus far and I am
eager for the promising opportunities that will shape
our future progress. Together, we will continue to build
upon this foundation of success.
Michael Mundashi
Chairman
9
Annual Report 2023Zambeef Products PLC CHIEF EXECUTIVE OFFICER’S REPORT
The Group achieved a revenue
of ZMW 6.0 billion (USD 331.5
million), along with a gross profit
of ZMW 1.8 billion (USD 101.1
million). This represents a year-
on-year increase of 12.1% and
12.9% in kwacha terms, and 5.6%
and 6.3% in US dollar terms,
respectively.
Overview
During the financial year ending on September 30, 2023,
Zambeef exhibited agility resulting in strong financial
performance. Management continued to optimise top-
line growth through effective revenue management
while upholding stringent cost control measures,
positioning the Group on the trajectory to actualize its
short to medium-term strategy.
Our achievements stand as a testament to the talent
within our organization and the enduring partnerships
we've established with customers, suppliers, and the
communities in which we operate. Reflecting on the
past year, it is evident that our unwavering dedication
to commercial objectives, along with our commitment
to operational excellence and cost optimization, has
not only spurred us forward but also solidified our
position in some of the sectors in which we operate.
This report offers a comprehensive overview of our
performance, spotlighting significant milestones,
financial performance, and ongoing initiatives aimed at
sustaining growth and creating long-term value.
Financial Performance
Despite a challenging trading environment marked by
constrained consumer spending and a tight monetary
policy, the group achieved strong results for the year
ending September 30, 2023. Escalating costs of vital
including fuel, electricity,
inputs and commodities,
increased
agricultural supplies, and grain,
production costs for our livestock and cropping divisions.
Nevertheless, the group demonstrated volume growth in
most divisions, capitalizing on the momentum from the
latter half of 2022. This was facilitated by a meticulous
approach to revenue management and effective sales
and operational execution.
led to
The Group achieved a revenue of ZMW 6.0 billion (USD
331.5 million), along with a gross profit of ZMW 1.8 billion
(USD 101.1 million). This represents a year-on-year
increase of 12.1% and 12.9% in kwacha terms, and 5.6%
and 6.3% in US dollar terms, respectively.
Additionally, the Group delivered an operating profit
of ZMW 361.4 million (USD 19.8 million), a significant
increase of 108.1% in kwacha terms (96.0% in US dollar
terms) compared to the prior year's ZMW 173.7 million
(USD 10.1 million). Although the prior year was impacted
by a one-off impairment cost of ZMW 141.8 million, this
growth underscores the effectiveness of our commercial
strategy and the successful execution of the cropping
expansion project.
The Group remains dedicated to fortifying its brand equity
and providing customers with high-quality products.
With our diversified and vertically integrated business
10
Annual Report 2023Zambeef Products PLC Chief Executive Officer’s Review (continued)
model, robust brands, and effective management, we are
well-equipped to seize future opportunities and navigate
potential threats.
Strategic Focus
Our strategic focus remains to optimise our existing
asset utilisation and maximise returns. We remain
committed to our strategy of focussing on our core
businesses, in which we strive to be the best in class.
The continued investment in key strategic assets and
divestiture of non-core assets will enable us to increase
cash generation and profitability and therefore continue
to deliver shareholder value. I am pleased to report
that our $100 million medium-term expansion plans
are proceeding as scheduled. We have maintained our
dedication to enhancing capacity and efficiency in
Cropping, Milling, Stockfeed, Dairy, and Poultry.
Our strategic focus in optimising costs and rationalising
the Groups operations continued throughout the
financial year. Managements proposal to restructure
the Group was approved and an announcement was
circulated to all shareholders in June 2023. The Company
is expected to benefit from the restructuring as it will
eliminate unnecessary complexities and duplications of
its business processes across the six different entities,
which have the same key decision-makers, processes,
ownership and senior Executive team. I am particularly
gratified that all the Executive positions have been
filled, positioning the group for navigating forthcoming
business growth with leadership team with the necessary
ability to drive the Group's future success.
Outlook
Looking ahead, our strong brand presence will continue
to be a cornerstone in maintaining customer loyalty.
Additionally, our vertically integrated business model
places us in a favourable position, ensuring a reliable
Table 1: Divisional financial summary in ZMW’000
supply chain and a market for our products. We anticipate
a stabilisation in the economic environment once the
process of debt restructuring concludes and there is
an upswing in Copper production. With these factors in
mind, the Group is poised to leverage the opportunities
arising from a positive economic outlook, strategically
investing for the future in anticipation of an upturn in
consumer spending.
Our ongoing commitment to consolidating our balance
sheet through the disposal of low returning assets,
optimising existing assets and the expansion of
capacity remains a central focus. These measures are
geared towards enhancing shareholder value, a goal
we remain dedicated to achieving. By fortifying our
financial foundation and strengthening our operational
capabilities, we are poised for sustained growth and
prosperity in the years ahead.
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.
Retailing & Cold Chain Food Products
The year was marked with good sales volumes across
all protein categories, despite operating within a
competitive and financially constrained environment.
Our ability to retain and increase volumes was driven
by meticulous sales execution and price optimization,
all of which had a direct impact on the overall revenue
growth.
However, it's worth noting that despite achieving
double-digit volume growth, the beef division reported a
decline in gross profit, primarily attributed to expenses
resulting from the outbreak of Contagious Bovine
Revenue
Gross Profit
Overheads
Operating Profit
2023
2022
2023
2022
2023
2022
2023
2022
ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s ZMW'000s
Retailing and Cold Chain Food
Products
3,579,502
3,138,305
Cropping and Stockfeed
3,799,233
3,369,186
969,955
873,307
716,420
(744,469)
916,766
(412,240)
(628,683)
(467,870)
225,486
461,067
87,737
448,896
Total
7,378,735
6,507,491
1,843,262
1,633,186
(1,156,709)
(1,096,553)
686,553
536,633
Less: Intra/Inter Group Sales
(1,332,578)
(1,112,730)
-
-
-
-
-
-
Central Overhead
Foreign exchange (losses)/gain
Impairment of goodwill
-
-
-
-
-
-
(241,056)
(246,992)
(241,056)
(246,992)
-
-
-
(84,140)
25,808
(84,140)
25,808
-
-
-
-
(141,786)
-
(141,786)
Group Total
6,046,157
5,394,761
1,843,262
1,633,186
(1,481,905)
(1,459,523)
361,357
173,663
11
Annual Report 2023Zambeef Products PLC
Chief Executive Officer’s Review (continued)
Table 2: Divisional financial summary in USD’000
Revenue
Gross Profit
Overheads
Operating Profit
2023
2022
2023
2022
2023
2022
2023
2022
USD'000s USD'000s USD'000s
USD'000s USD'000s
USD'000s USD'000s USD'000s
Retailing and Cold Chain Food
Products
Cropping and Stockfeed
196,245
182,672
208,291
196,111
53,177
47,879
41,701
(40,815)
(36,594)
12,362
5,107.00
53,362
(22,601)
(27,233)
25,278
26,129.00
Total
404,536
378,783
101,056
95,063
(63,416)
(63,827)
37,640
31,236
Less: Intra/Inter Group Sales
(73,058)
(64,769)
Central Overhead
Foreign exchange losses
Impairment of goodwill
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,216)
(14,377)
(13,216)
(14,377)
-
(4,613)
1,502
(4,613)
1,502
Group Total
331,478
314,014
101,056
95,063
(81,245)
(84,955)
19,811
-
0
(8,253)
0
(8,253)
10,108
Pleuropneumonia (CBPP), a disease affecting cattle,
whose effect continued from the previous financial
year into the current one. In addition, rising input
costs, specifically the high price of buying animals and
increased feeding costs, put pressure on profitability.
In the first half of the year, there was a sluggish
demand for chicken, which picked up in the latter
half. This was largely due to other protein categories
becoming relatively more expensive. This shift
in
consumer preference helped bolster sales of both
feed and Day-old chicks, contributing to the division's
overall performance and demonstrating the dynamic
consumer behaviour and the importance of adapting to
market trends.
The Dairy segment’s revenue realisation was on the
back of strong volume growth and is well positioned
to capitalise on further growth opportunities in the
coming periods.
Despite the challenges, the division experienced a
moderate growth of 1.4% growth in gross profit in USD
terms and 7.7% in Kwacha terms over the prior year. This
growth can be attributed to effective pricing strategies,
operational efficiency improvements, and a favourable
product mix.
The Retailing and Cold Chain Food Production segment
is well poised to build upon these achievements and
continue its trajectory of growth and profitability in
the upcoming fiscal year. Through strategic initiatives
and a customer-centric approach, we aim to further
strengthen our position in the market.
Cropping and Milling
The Cropping segment delivered a notable revenue
performance, achieving a growth of 17.7% in Kwacha (10.9%
in USD) compared to the previous year. However, operating
profit ended with a significant reduction, primarily attributed
to lower prices and yields in the summer soya bean crop
which was further compounded by the escalating costs of
critical inputs such as fertilizer and fuel.
In the Stockfeed segment, there was an increase in
demand during the latter half of the year which translated
into revenue and volume maximization, ultimately
contributing to profitability. The positive performance
underscores our capability to adapt to changing market
dynamics and meet customer needs effectively.
The Flour segment experienced double-digit growth in
volumes attributed to the implementation of good sales
strategies and the introduction of new product lines. This
performance highlights our commitment to innovation
and our ability to execute sales initiatives effectively,
thereby driving growth in this segment.
Acknowledgements
I would like to extend my gratitude to our Board of Directors
for their guidance and support. I am also indebted, to
all our dedicated staff and partners, for their invaluable
contributions to the ongoing success of the Group.
I eagerly anticipate what we will achieve in the coming
year as we continue to implement and execute our
growth strategy.
12
Faith Mukutu
Chief Executive Officer
SUSTAINABILITY REPORT
Annual Report 2023Zambeef Products PLC
SUSTAINABILITY REPORT
13
Annual Report 2023Zambeef Products PLC SUSTAINABILITY REPORT
(1) STRATEGY
Sustainability is a critical enabler of our strategic plan; it is a way of doing business and something that key
stakeholders, increasingly, expect of us. We are aware of the need to continue to strengthen the foundation for
sustainable production. This involves investing in People, Processes and Plant and using the Environmental, Social
and Governance (ESG) strategy as a guiding framework.
During the year under review, Mpongwe, Chisamba Huntley and Kalundu Dairy farms received, significant, capital
expenditure investment. At Mpongwe, the sustainable conversion of dry, rain-fed land into irrigated-land saw an
addition of 1,100 hectares to the growing of winter crop and contributed to the increased production tonnage for the
2023 wheat harvest. The construction of the state-of-the-art Wheat flour mill progressed well and was on course for
completion in the next financial year. Chisamba Huntley farm received investment on the Poultry section with the
construction of Environmentally Controlled Houses (ECH) and whilst the Kalundu Dairy farm saw the construction
of new Cow Barns. Due to improved animal welfare this investment yielded in improved productivity for the Poultry
and Dairy divisions. On the Food Safety side, 100% of our Processing Plants were ISO 22000: 2018 certified and
provided, further, evidence of sound food safety environment.
The focus of our vertical integration determine our ability to positively impact our communities. We are aware that
through Global Good Agricultural Practices (Global GAP) and efficient value addition, the challenges of food security,
climate change, and biodiversity loss can be mitigated or minimized. We collaborate with all key stakeholders who
include customers, farmers, communities, shareholders, employees and development finance institutions.
We are committed to upholding the principles enshrined in the International Finance Corporation (IFC) Performance
Standards and World Bank Group Environmental, Health, and Safety Guidelines on environmental and social
sustainability. This commitment is, further, demonstrated in our ESG Strategic Plan.
(2) SUSTAINABLE DEVELOPMENT GOALS
Our capacity to create impact in our communities is mapped against the United Nations (UN) Sustainable
Development Goals (SDGs) and stakeholder priorities. Our Sustainability framework helps to transform our strategy
into practice and enables us to understand and mitigate our environmental footprint, improve the livelihoods of
suppliers, farmers and communities through initiatives that enhance productivity and partnership.
Category
PEOPLE
PROSPERITY
Comments
End Poverty and
Hunger. Ensure
dignity, equality,
health & Safety.
Prosperous &
fulfilling lives in
harmony with
nature
PLANET
Protect planet,
natural resources
and climate
PARTNERSHIP Global / Local
Partnership &
Inclusivity.
Promoting
Governance.
14
SDGs
Zambeef - ESG
Social – MSME Farmers
average spend / year ZMW 1.5
bn, Feeding program, Decent
Staff housing, Education,
Health & Safety, Water security
Economic – 1% GDP
contribution, Indirect &
Direct jobs of above 250,000,
Community schools, new
capacity Investment USD $100
million (June 2022 launched)
Environment – GHG initiatives,
no charcoal usage in Poultry,
Organic farming & Water
security scaled up.
Governance / Partnership
– DFI’s, Communities, Key
stakeholders’ involvement.
Inclusivity – strong
Community involvement,
Employee Union
representation, Statutory
compliance
Annual Report 2023Zambeef Products PLC SUSTAINABILITY REPORT (continued)
(3) ENVIRONMENTAL, HEALTH & SAFETY
We remain committed to driving best practice in the area of Environmental, Health, Social and Safety functions of
the business. Hence, we prioritized regulatory compliance and strengthened our approach towards developing Food
Safety Management Systems and doing so through interventions such as the Global GAP and in conjunction with
the IFC.
During the year we complied with all the necessary Environmental Impact Assessments as required by the Zambia
Environmental Management Agency (ZEMA) and obtained 100% approval rate.
We, further, continued with proactive stakeholder engagement, with Regulators & Chiefdoms, to identify potential
risks. We outline, below, some of the key initiatives undertaken in the year.
(3.1) GHG Emissions & Removal – ISO 14064: 2018 (Quantification & Reporting)
In compliance with the ZEMA directive to phase out substances with high ozone-depleting potential, the business
commenced to replace old refrigeration units with high carbon footprint.
Further, we are delighted to mention that we have been working on climate change risk modelling, as well as Green
house Gases (GHG) measurement and reductions, in order to reduce emissions in our own operations and supply
chain. With the help of the IFC, we created a customized GHG assessment tool, which allowed us to aggregate data
from multiple sources across the group and identify gaps in carbon measurement accuracy.
The GHG Assessment Tool that was developed was used to estimate a carbon footprint for Zambeef’s operations
from 2020 to 2023. Though we have been measuring Scope 1, 2 and 3; however, for this years’ reporting purposes,
we will highlight the emissions under Scope 1 and for which we are directly responsible.
Emission category
FY20
FY21
FY22
FY23
Scope 1 (Direct emissions)
552 107 tCO2e
571 517 tCO2e
437 915 tCO2e
354 127 tCO2e
Overall, Scope 1 emissions reduction of 36% from 2020 to 2023. This is on account of a shift from using charcoal for
Poultry rearing to using ECH, closing of the Nkumba Piggery, discontinuation of the chicken layer business, reduced
number of Beef Cattle maintained in 2022 and reduction in the usage of diesel-powered generators in the, earlier,
part of 2023.
(3.2) Circular Economy - Sustainable Farming
A sustainable agricultural system is one that makes good use of renewable and/or recyclable resources and leverages
the benefits of circular economy. We recognize that sustainable farming not only conserves soils, but also allows us
to increase productivity per hectare, lowering our overall footprint per ton of food produced. To reduce tillage and soil
compaction, we use innovative farming methods such as advanced agricultural equipment.
We have also begun supplementing artificial fertilizer with compost manure made internally from animal and organic
waste generated by our various divisions. Compost manure application has been shown to improve soil yields and
quality. Our goal is to use compost to replace 50% of the artificial fertilizer used each year.
(3.3) Water
We want to save water while increasing yields and productivity. Water is Life and it is essential to agriculture and
food production. Freshwater (surface and groundwater) management is critical to our operations and supply chains,
as well as the communities and environments in which we operate. We monitor and manage water use in these
upstream operations and are developing resource management plans for all of our priority supply value chains.
We strive to optimize our water use, reduce wastewater volume and content, and protect water courses within our
processing operations. The cropping division’s center pivot irrigation system allows us to apply water precisely where
it is needed on the farm. This reduces the possibility of runoffs and flooding.
15
Annual Report 2023Zambeef Products PLC SUSTAINABILITY REPORT (continued)
(3.4) Animal Health and Welfare
(4) SOCIAL – ECONOMIC CONTRIBUTION
We continued to focus in investing in improving the
animal health and welfare of livestock. In the poultry
division the business made, significant, headway in
constructing ECH for the chickens. One of the major
improvements has been the moving away from using
charcoal to cleaner energy and implementing sound
housekeeping standards. This change has resulted
in over 20% improvement in production efficiencies
compared to prior year.
recognizing
The business continued to
implement programs
that sought to achieve optimal health and well-being
outcomes,
interconnectedness
between people, the livestock we rear and process, the
crops we cultivate and the shared environment in which
all our activities are performed. Herd health plans have
been developed and implemented in livestock-rearing
facilities
the
(3.5) Food Security & Safety
Food Security is at the core of Zambeef commitment
to serving the community with safe and nutritious
food products. The Group procured, from small scale
farmers, over 170,000 metric tons of grain (maize and
soyabeans) and produced just under 100,000 metric
tons of grain (wheat, maize and soyabeans), in the
financial year under review.
In the area of Food Safety, the business continued
to strengthen the implementation of Management
Systems across the operations. This approach led to
the roll-out of a robust Systems-based approach within
the organization’s operations.
To this effect, the company implemented a Food Safety
Management System (FSMS) based on ISO 22000:
2018 in all the food operations, and this resulted in
100% of Plants being certified as ISO 22000 compliant
by the end of financial year 2023.
The Plants included Masterpork, Zamchick Poultry
processing, Zammilk dairy processing, Novatek Lusaka
operation, Abattoir & Beef processing, Flour Mill and
Mpongwe Stockfeed Mill.
16
(4.1) Economic Contribution
As noted, earlier, the Group continued to source the
bulk of its raw materials from Micro Small Medium
Enterprises (MSMEs)
in the rural communities of
Zambia. 100% of the beef and pork processed by the
business were sourced from third-party farmers.
Out-growers are a major supply base of the broiler
chickens processed by Zamchick and with the small-
scale farmers of maize and soya beans supplying
Novatek Animal Feeds with the needed input raw
material for stockfeed production.
In the period under review, the Group empowered,
close to, 100,000 small-scale farmers who supplied
livestock, grain and served as Zamhatch sales agents
and shop owners. Novatek, the Stockfeed Division,
procured 210,000 tons of Maize and Soyabeans in 2023
compared to 200,000 tons in 2022 and most of which
was supplied by small-scale farmers.
Zambeef paid ZMW 416 million of taxes in 2023 (2022:
ZMW 295 million) to the Zambia Revenue Authority
(ZRA).
In the year under review, the Group recorded foreign
exchange export income of over USD$ 5 million, while
total Group USD-equivalent revenues were above USD
300 million.
Total Non-current assets grew by USD $ 30 million
(20%), from USD $ 150 million (2022) to over USD
$180 million (2023). This increase is indicative of the
capacity expansion investments in the business and
with, significant, allocation going to Mpongwe farms. At
the center of this investment is to ensure sustainable
production is embedded in the Group and with the end
result of improving productivity and efficiencies.
Zambeef contributes to, slightly, over 1% to the Gross
Domestic Production (GDP) of the country.
(4.2) Social Contribution
Zambeef continued to align its social investments to
the United Nations Sustainable Development Goals
(UN SDGs). The strong linkage to rural based suppliers
helps fight poverty in these otherwise ‘economically
excluded’ communities, meeting the aspirations of UN
SDG 1 of ‘ending poverty in all its forms everywhere’.
Annual Report 2023Zambeef Products PLC SUSTAINABILITY REPORT (continued)
We outline, below, some of the key community social
responsibility programs initiated:
Novatek – Stockfeed Division: undertook a total of 26
community engagement programs in the financial year
2023 (FY23) compared to 22 in the previous year. The
engagements included training of small-scale farmers,
workshop, product exhibition and information days.
Masterpork Division – maintained 862 small scale pig
suppliers of which 17% were female suppliers and 83%
male. A total of 85 farms were visited during FY23. Of
the farms visited, each had an average of 150 to 800
animals, the semi-intensive pig keeping system was the
most practiced system at these farms. All the farms
practiced the farrow-to-finish operations. The services
offered by the business
included veterinary care,
vaccination, and disease control programs and linkage
to commercial farms.
Zamchick and Kalundu Dairy - maintained out-grower
programs and engaged with farmers.
Customer Complaints – We continued to engage and
respond with our consumers and customers through
the Zambeef dedicated customer phone line via voice
calls, text messages and Whatsapp, email service and
facebook platforms.
Resettlement of Community Encroaching on land –
Stakeholders were engaged on a regular basis, and at
every time developmental projects were initiated at
Group sites. The Group complied with the guidelines
of the IFC Performance Standard number 1: Land
Acquisition and Involuntary Resettlement, in all land
acquisition matters and IFC Performance Standard
number 8: Culture Heritage, which allows us to
preserve and grant unhindered community access to
all properties and sites of archaeological, historical,
cultural, artistic and religious significance.
Employment - Zambeef continues to be one of the
largest employers in the country, with about 7,000
employees, 14 % of whom are female (2022: 13%).
Overall increase in 1% is demonstrative of efforts put
in place to recruit more of deserving female employees
and thereby promote Gender Diversity. There are more
women employees in the non-unionized category at
16% and male workers 84%. Overall direct and indirect
employment is in excess of 250,000.
Training and Development
The Group is fully committed to developing and training
its employees at all levels. During the year the business
continued to offer specific trainings and revisiting
competences in food safety, occupational health and
safety, safe handling of hazardous materials, quantifying
17
Annual Report 2023Zambeef Products PLC SUSTAINABILITY REPORT (continued)
and reporting greenhouse gas emissions were offered
to employees. The Group’s continued reinvestment in
human resources and a deliberate focus on diversity
and inclusion has resulted in many senior positions
being held by Zambians and females. Over 99% of
employees are Zambian.
(4.3) Education, Health and Feeding Program
The company supports education
Chisamba, Chiawa and Chongwe.
in Mpongwe,
For example, the Nampamba Primary School was
constructed by the company and offers classes from
Grade 1 to 7 with close to 500 pupils. The majority of the
pupils are girls. The company has recruited 17 teachers,
at the school, and with housing units located in walking-
distance to the school. In Chisamba, the school was
built by the business and has continued to provide the
education needs of the community.
In health, Zambeef supports with the provision of both
onsite and offsite clinic health facilities for its members
of staff and community.
These Group activities aligned 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.
The Group continues to render support to the vulnerable
through donation of foodstuffs to hospices, hospital,
ophanages and care homes. There are currently 22
institutions hosting vulnerable people which the Group
supports through the food supply program. This gesture
by the Group aligns strongly with UN SDG 2, whose main
aspiration is to ‘end hunger, achieve food security and
improved nutrition’.
In the last 7 years the company allocated USD $1.75
million in the area of Community support programs.
Of this, USD $900,000 was targeted towards Feeding
Program for orphanages and similar institutions and
about USD $800,000 was allocated to supporting
Community Education, Health and Culture & Heritage
and Traditional ceremonies.
(5) GOVERNANCE
Attainment of a long-term sustainable production plan
requires functioning environmental, social, economic
and governance practices. The company, therefore,
strives for continuous improvement in these areas.
Corporate Governance at Zambeef Products Plc
is fundamental in guiding the manner in which the
business is directed and controlled.
The Board of Directors provides oversight through
its Environmental & Social Committee. Through
this committee the Board provides strategic advice
and guidance regarding systemic and strategic
environmental and social matters. The committee
ensures that the Group has adequate and robust
systems in place for monitoring the environmental,
health & safety, and social management & performance,
in accordance with applicable legislation and good
international industry best practice.
In order to ensure effective implementation of the
Board’s strategic objectives, a decision was made to
strengthen Management structure at the Executive
Committee level and this saw the creation of new roles
and subsequent appointment of staff.
All this was done to, further, embed Sustainable
Development within the business and ensure that
productivity and efficiencies were
realized and
ultimately create an environment of shared value for all
key stakeholders.
The clear distinction of roles between the Management
and Board and the sub-committees is fundamental. The
Board charter and other related policies and procedures
serve to provide visibility on the route to take in strategic
and operation decision-making.
18
CORPORATE GOVERNANCE
STATEMENT
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE
STATEMENT
19
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT
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,
transparency and integrity.
Zambeef Products Plc (“Zambeef” or the “Company”)
recognises that achieving a
long-term sustainable
business depends on stable, well-functioning and
well-governed environmental, social, economic and
governance practices. Therefore, the Company strives
for continual development in these areas.
Zambeef 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, transparency
and integrity.
Through its Board of Directors, the Company has put
together its basic framework on Corporate Governance.
It has developed a Corporate Governance Code that
complies with the Lusaka Securities Exchange (LuSE)
Corporate Governance Code. Further, the 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 must comply with LuSE and UK specific Corporate
Governance codes. For the purposes of being quoted
on AIM, the Company has agreed to maintain standards
of corporate governance recommended by AIM. In this
regard, the Company has adopted the QCA Code as the
basis of its corporate governance standards.
On LuSE, Zambeef 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 ensure compliance
with applicable laws and regulations recognised codes
of good practice.
This report, together with other relevant information
contained herein together with the financial statements
that form part of the Annual Report for the year,
therefore, aims to provide an overview of the Company’s
governance practices.
CORPORATE GOVERNANCE IN ACTION
The Company’s corporate governance practices are put
together in the Corporate Governance Handbook which
is subject to review by the Board from time to time. 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 reporting and whistleblowing
including
20
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
§ Social Media Policy
§ Related Party Transactions Policy
§ Delegation of Authority
§ Board Charter
§ Terms of Reference for the Remuneration and
Succession Committee
§ Terms of Reference for the Audit and Risk
Committee
§ Terms of Reference for the Environmental and
Social Committee
§ Memorandum on Inside Information and;
§ Group Code of Ethics
THE BOARD OF DIRECTORS
The Company has a unitary board of directors balancing
the requisite business acumen and skills pertinent
to the business. At the start of the financial year, the
board comprised seven Directors, this increased to
nine within the year, a number that is required per its
Articles of Association. Of the nine Directors, seven
are Non-Executive Directors, and two are Executive
Directors. Five of the seven 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 manner and are made in accordance
with the recommendations of the Remuneration and
Succession Committee and, following approval of the
board, are subject to 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
its responsibilities
The Board's 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 reviewed during the year under
review, the Board satisfied
in
compliance therewith. The Board is responsible for
the overall stewardship of the Company. The Board’s
role consists of two fundamental elements: decision-
making and oversight. The decision-making function is
exercised through the formulation with management
of fundamental policies and strategic goals and the
approval of certain significant actions. The oversight
function concerns
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.
the
Principles of good governance are embedded in the
way the Board; its sub-committee and the executive
committee operate
their business. The Board
applies integrity, principles of good governance and
accountability throughout its activities and each director
brings independence of character and judgment to their
role.
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;
• Overseeing the Board agenda and conducting all
Board meetings;
• Overseeing and conducting Annual General
Meeting (AGM) and other shareholder meetings
and;
• Keeping the Board informed of all major project
proposals by way of specific reports;
21
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
The Board Composition
Director
Michael Mundashi
Faith Mukutu
M’boo Mumba
Jonathan Kirby
Monica Musonda
Roman Frenkel
Pearson Gowero
Muyangwa Muyangwa
Dr John Rich
Title
Chairman
Executive Director (CEO)
Executive Director (CFO)
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Date of Appointment
05/09/2019
05/09/2019
01/12/2022
04/08/2017
01/03/2021
10/03/2021
10/03/2021
21/04/2023
21/06/2023
As of the date of the report, the Board was comprised of the Chairman (Independent Non-Executive Director), and
seven Non-Executive Directors, five of whom, together with the Chairman, 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. The brief curricula vitae of the directors appear on pages 31 – 33 of this report.
The Board is satisfied that the Directors have sufficient time to devote to their roles and that it is not placing undue
reliance on any particular individuals
MEETINGS OF THE BOARD
The Board has four regular meetings each year and the company’s Articles of Association make 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 the table below;
BOARD
MEETING
(22/11/2022)
BOARD
MEETING
(22/02/2023)
BOARD
MEETING
(21/06/2023)
BOARD
MEETING
(20/09/2023)
BA
BA
BA
BA
RS
RS
X
RS
TOTAL
MEETINGS
ATTENDED
TOTAL
MEETINGS
HELD
4
4
4
4
4
4
4
1
2
1
4
4
4
4
4
4
4
4
4
4
DIRECTORS'
NAME
M Mundashi
F Mukutu
R Frenkel
P Gowero
J Kirby
M Mumba
M Musonda
M Muyangwa
J Rich
W Roodt
Key
ü Attended X Absent BA Before Appointment RS Resigned
22
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
BOARD COMMITTEES
To assist in exercising its responsibilities, the Board has established three committees:
•
•
•
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 and makes 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.
1. Audit and Risk Committee
The primary role of the Audit Committee is to ensure the 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.
The committee is chaired by an independent non-executive director. The membership in the financial year is as
hereunder:
Chairman: Jonathan Kirby
Members: Roman Frenkel, Pearson Gowero and Hastings Mtine*. The Executive Directors (CEO and CFO) have
standing invitations to all the committee meetings.
In the year under review, the Committee achieved this among other key responsibilities outlined below:
§
§
§
§
§
§
Ensured that a sound risk management and internal control system was maintained and reviewed the
systems for monitoring compliance with applicable laws and regulations.
Gave due consideration to and reviewed corporate governance matters in accordance with relevant
frameworks including the LuSE Corporate Governance Code and the QCA Code.
Monitored and reviewed the reports and function of the internal audit department, in line with its own
charter, which requires systematic evaluation of the effectiveness of risk management, control, compliance
and governance processes for the Group.
Monitored and reviewed the reports of the external auditors and their performance.
Met with the External Auditors without management to discuss matters in relation with the Company in
line with good practice and as outlined in the Charter.
Continue to monitor the ethical conduct of the Company, its executives and senior officials
The committee is tasked with the responsibility of considering and making recommendations to the Board,
to be put to shareholders for approval at the Annual General Meeting, as regards the appointment and/or
reappointment of the company’s external auditor.
The Committee continues to be assisted by an independent advisor and co-opted member; Hastings Mtine
who was appointed by the Board 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.
23
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
Committee Meeting Attendance Schedule
NAME
Jonathan Kirby
CATEGORY OF DIRECTOR 21/11/2022
Chair: INED
21/02/2023 15/06/2023 19/09/2023
Roman Frenkel
NED
Pearson Gowero
INED
Hastings Mtine*
Committee Member
Key
RS
Attendance
Resigned
Mr Hastings Mtine is an independent advisor of the committee by virtue of which he attends all
*
meetings as a co-opted member.
2.
Remuneration and Succession Committee
The committee provided oversight over the remuneration and compensation for senior management to retain
and motivate staff to perform at the level of quality required. The committee is chaired by an independent non-
executive director.
In the year under review, the Board resolved that the committee meets twice yearly, having completed the
tasks assigned, putting in place policies, key human resources and recommended for appointment skilled
Board members.
The membership in the financial year is as hereunder:
Chairman: Monica Musonda
Members: Roman Frenkel, Jonathan Kirby, Muyangwa Muyangwa, and Felicity Preacher** an observer.
Responsibilities:
•
•
•
•
•
•
Regularly review the structure, size, knowledge, experience 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 for identifying, evaluating and nominating, for the approval of the Board, candidates to fill
Board vacancies as and when they arise.
Consider succession planning for Directors and other senior executive management, and in particular,
for the key roles of Chairman and CEO of the Company. The appointment of CEO and directors can only
be made following a formal, rigorous assessment by this committee and its formal recommendations
being made to the Board, having also evaluated the balance of skills, knowledge, experience and diversity
on the Board.
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 which it deems necessary, including
relevant legal and regulatory requirements, the provisions and recommendations of the QCA Code
and associated guidance. The objective of such policy shall be to ensure that members of the Group's
executive management are provided with appropriate incentives to encourage enhanced performance
and are, in a fair and responsible manner, rewarded for their individual contributions to the success of
the Group.
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.
24
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
Committee Meeting Attendance Schedule
NAME
Monica Musonda
Roman Frenkel
Jonathan Kirby
Muyangwa Muyangwa
Felicity Preacher**
CATEGORY OF DIRECTOR
21/11/2022
21/02/2023
Chair: INED
NED
INED
INED
Observer
BA
BA
BA
BA
Key
BA
Attendance
Before Appointment
Pursuant to the Shareholder Agreement with BII, an observer is permitted to
**
attend meetings and participate in deliberations but may not vote
3. Environmental and Social Committee
The Committee provides strategic advice and guidance to the Board in relation to systemic and strategic
environmental and social (“E&S”) issues which affect the Company’s business model and strategy. The
committee is chaired by an independent non-executive director. The membership in the financial year is as
hereunder:
Chairman: Pearson Gowero
Members: Monica Musonda, Muyangwa , Muyangwa and Dr John Rich.
Responsibilities:
•
Ensure that the Company has in place adequate and robust systems, policies and procedures for
monitoring the E&S management of the Company, in accordance with applicable legislation and Good
International Industry Practice (“GIIP”), defined by IFC Performance Standards.
• Oversee any Company investigations relating to breaches of E&S laws, regulations and standards and/
or the Company’s E&S policies, 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 within which its products or services are predominantly marketed.
Committee Meeting Attendance Schedule
NAME
Pearson Gowero
Roman Frenkel
Muyangwa Muyangwa
Monica Musonda
John Rich
CATEGORY DIRECTOR
Chair: INED
NED
INED
INED
INED
21/11/2022
BA
BA
21/02/2023
BA
BA
15/06/2023
A
19/09/2023
RA
A
Key
RS
RA
A
Attendance
Resigned
Reassigned to another committee
Absent
25
Annual Report 2023Zambeef Products PLC
CORPORATE GOVERNANCE STATEMENT (continued)
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. This is in accordance with Section 206 (5) of the
Companies Act.
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. The
Chairman provides individual feedback to all the members and collectively to the Board.
Areas covered in the self-assessment include:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Management of Board meetings and discussions;
External and Internal Board relationships;
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.
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 the Companies Act and Securities Act. They follow
a tailored induction programme facilitated by the Company Secretary which includes a scheduled trip to tour the
operations.
COMPANY SECRETARY
The Company Secretary 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.
26
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
STAKEHOLDER RELATIONS
Zambeef places considerable importance in maintaining active investor relations through open, fair and transparent
communications. The Company ensures timely dissemination of information to its investors and other stakeholders
through various media. A dedicated shareholders unit through the Transfer Secretaries is responsible for active
interaction with the shareholders.
The Zambeef business model has identified and understands the importance of maintaining strong working
relationships with;
•
•
•
•
•
•
its key small-scale suppliers across grains and livestock networks,
its larger commercial raw material/input suppliers and livestock suppliers,
its wide customer base across stockfeed, cold chain food 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 Stock Exchange
(LuSE), Securities and Exchange Commission (SEC), AIM Nominated Advisor;
its financiers;
social responsibility partners in communities.
In addition, Zambeef has shareholder meetings, formally through Annual General Meetings (AGM) and Extraordinary
General Meetings (EGM), where required, and informally through half-yearly meetings with institutional shareholders.
Shareholders’ views 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 Chief Executive Officer (CEO) and Chief Financial Officer
(CFO) meet and conduct formal results presentations with 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 business performance.
The Group publishes the outcome of all shareholder resolutions immediately after each AGM or EGM. Zambeef has
maintained 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 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 the
Company to accomplish its objectives by bringing a systematic approach in 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.
The Board requires competitive 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 PricewaterhouseCoopers (PwC).
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.
27
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (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
The control systems are designed to safeguard the Company’s assets, maintain proper accounting records and
ensure the reliability of management and financial information produced by the 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. The independent
external auditors, through the audit work they perform, confirm that the abovementioned monitoring procedures
are being applied effectively.
Nothing has come to the attention of the Directors or the independent external auditors to indicate that any material
breakdown in the functioning of the abovementioned internal controls and systems has occurred during the year
under review.
ETHICS
The Company’s fundamental policy is to conduct its business with honesty and integrity and in accordance with the
highest legal and ethical standards. The Company has a Code of Conduct and Business Practices, determining the
minimum standards required of all staff, which is disseminated throughout the Company.
The Company has implemented and widely disseminated to all stakeholders (including suppliers), a Group Code of
Ethics and Conduct.
INCIDENT REPORTING, ANTI-BRIBERY AND CORRUPTION WITH WHISTLEBLOWING POLICIES AND
PROCEDURES
The Company has detailed policies and procedures covering Incident Reporting, Anti-Bribery and Corruption (ABC)
and Whistleblowing.
The Group’s ABC program has been formulated in conjunction with British International Investment (BII), following
best international practice. It is well structured, documented and rigorously monitored.
There is a dedicated internal 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 encouragement and is widely communicated within the Group, with a verifiable and transparent
process of handling complaints. This has resulted in valuable information being obtained for further action.
Internal Audit closely monitors, reviews and reports on all of these policies to the Audit and Risk Committee of the
Board.
LEGAL COMPLIANCE
The Board requires management to submit an annual declaration confirming that 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.
28
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
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-quoted 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 compliance by the Company’s
relevant employees, including 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’ INTERESTS IN OTHER COMPANIES
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 transparency in related-
party transactions and appropriate management of any approved transactions.
RELATED-PARTY TRANSACTIONS
The Board gives authorisation for any transactions carried out by the group with any anyone or considered a
related party. Such transactions are evaluated as to whether the parties are treated fairly and market conditions. For
recurrent transactions carried out with clients during the Group’s 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 market, the LuSE and SEC
rules and also prepares a detailed narrative statement to accompany the results. Company results are disseminated
widely through the LSE, LuSE, newswires and our distribution lists.
29
Annual Report 2023Zambeef Products PLC CORPORATE GOVERNANCE STATEMENT (continued)
COMPLIANCE STATUS OF LuSE CORPORATE GOVERNANCE RULES
ZAMBEEF COMPLIANCE SCHEDULE
Applicable
Non-
Applicable
Full
Compliance
Partial
Compliance
Non-
Compliance %N/A
%FC
%PC
%NC
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
4
9
4
4
1
4
10
2
7
12
7
7
4
6
100
100
1
1
15
4
4
9
4
4
1
4
10
2
7
12
7
7
4
6
99
0
-
-
-
0
-
20
0
100
80
100
100
100
100
100
1000
100
100
100
100
100
100
100
100
100
-
-
-
-
-
-
-
-
-
Summary of areas that are not fully compliant or inapplicable
Areas not applicable
i.
If the role of the Chairperson and CEO are performed by the same person;
a.
The Board must have an independent director as deputy chairperson
There must be a complement of independent directors sufficiently involved in the annual evaluation of
the chairperson’s performance
30
Annual Report 2023Zambeef Products PLC
Board of Directors
Michael Mundashi (age 65)
Experience
Chairman
Non-Executive Director
Nationality: Zambian
Qualifications
Laws Degree
Bachelor of
(University
of Zambia); Post Graduate Certificate
qualification from the Zambia Institute of
Advanced Legal Education.
Over 30 years post qualification experience in
Dispute Resolution and commercial litigation,
pensions and Tax advisory services; in both
the public and private sectors. Previously
served as Chairman of Sanlam Life Assurance
Zambia Limited, Non-Executive Chairman of
Standard Chartered Bank Zambia Plc and
British American Tobacco Plc and has also
served on boards of various pension funds
trusts
External appointments Currently serving
as Director of Nico General Insurance and
Chairman of Lusaka Trust Hospital.
Faith Mukutu (age 43)
Experience
Executive Director: Chief Executive Officer
Nationality: Zambian
Qualifications
A.C.C.A. (Chartered Certified Accountant)
– Zambia Centre for Accountancy Studies,
Zambia; Certified Accounting Technician
– Zambia Centre for Accountancy Studies,
Zambia
Over 15 years of experience in senior finance
positions of major corporates, including
Zambia Sugar Plc and Zambian Breweries
(part of SABMiller Group)
External appointments Current directorships
include, Greater Kafue Landscape Limited, Good
Nature Agro and Zayohub Zambia Ltd
Mboo Mumba (age 44)
Experience
Executive Director: Chief Financial Officer
Nationality: Zambian
Qualifications
Bachelor of Accountancy Degree from
the Copperbelt University in Zambia and a
Chartered Accountant under Association
of Chartered Certified Accountants (ACCA)
of the UK, where he is a Fellow. A Fellow
member of the Zambia Institute of Chartered
Accountants.
Over 15 years combined experience in senior
positions in Finance, Treasury Management
and Banking.
External appointments
Current directorships include St. Ignatius
College and The Society of Jesus Southern
Africa Treasury Committee
Katebe Monica Musonda (48)
Non-Executive Director
Nationality: Zambian
Qualifications
LL. B (UNZA); LL.M (Corporate Law & Finance
- London) Executive Management Programme
(Harvard Kennedy)
Experience
Over 16 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 Director Taifa Marimba,
Mixta Nigeria, Dangote Cement Zambia;
Founder & CEO Java Foods
31
Annual Report 2023Zambeef Products PLC Board of Directors (continued)
Roman Frenkel (age 43)
Non-Executive Director
Nationality: British
Qualifications
Durham University MEng Mechanical
Engineering;
ACA (ICAEW)
Experience
Over 13 years of 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, Head of Food and
Agriculture Equity at British International
Investment PLC in London.
Pearson Gowero (age 65)
Non-Executive Director
Nationality: Zimbabwe
Qualifications
BSc (Economics) Hons (University of
Zimbabwe)
MBL (University of South Africa)
Jonathan Kirby (age 62)
Non-Executive Director
Nationality: South African
Qualifications
Bachelor of Accounting (University of the
Witwatersrand, RSA) Higher Diploma in Tax
Law (Rand Afrikaans University, RSA) CA
(RSA).
Experience
40 years of experience in business
management including Retail and Fast-
Moving Consumer Goods. He served in
various senior executive roles as well as Chief
Executive Officer of two listed companies.
External appointments
Has previously served as a Director on
several boards and is currently a Director of
both SeedCo Zimbabwe Limited, SeedCo
International Limited, NMBZ Holdings and
Markbury Investments Private Limited. He
has in-depth knowledge of Zambian and
Zimbabwean Industries.
Experience
Over 32 years of 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 boards of MIRO Forestry
Products Ltd, Prime Financial Services Group,
Cavalier Food (Pty) Ltd, South Africa and
McWade Productions (Pty) Ltd, South Africa.
Muyangwa Muyangwa (58 age)
External appointments
Non-Executive Director
Nationality: Zambian
Qualifications
Master’s Degree in Business Administration
from the University of Bath in the United
Kingdom and Bachelor’s Degree in Business
Administration from the Copperbelt University,
Zambia.
Experience
Over 30 years of experience in in the financial
and fiscal sectors.
Currently the Director General of the National
Pension Scheme Authority -Zambia, Non-
Executive Director of ZCCM Investments
Holdings Plc and M & N Capital Limited.
Previously served in various positions at
the International Monetary Fund (IMF),
including as a Senior Economist at the IMF
– Headquarters, Washington DC, and as
Technical Assistance Advisor and Revenue
Administration Advisor in East Africa and
West Africa, respectively. Before joining the
IMF, he worked for Zambia Revenue Authority.
where he held the roles of Commissioner
Value Added Tax and Commissioner,
Customs Services.
32
Annual Report 2023Zambeef Products PLC John Rich (age 71)
Non-Executive Director
Nationality: Australian
Qualifications
Bachelor of Science Degree with Honours in
Pathology and a Bachelor of Science Degree
with Honours in Veterinary Science from the
University of Sidney and numerous other
diplomas and certificates within the agriculture,
ruminant nutrition, production and meat
export industry. Post Graduate Foundation in
Veterinary Science and Postgraduate training
in financial management, modelling and
financial analysis.
Experience
Over 40 years of experience
in Corporate
Agribusiness, development banking, mergers
and acquisitions.
in various positions
He previously, served
in the agricultural production and business
management/banking
space under many
international organisations
reputable and
including
for
IFC, European Bank
the
Reconstruction and Development (EBRD) and
Commonwealth Development Corporation (CDC
– now BII) among others.
External appointments
Currently Executive Chairman, of MHP SE
– (MHPC) since 2017, an Independent Non-
Executive Director, of Zalar Morocco, 2014 –
current (Poultry & Grain Trading), AANC Pty
Ltd (Australia) and Teralett Pty Ltd (Australia).
33
Annual Report 2023Zambeef Products PLC Directors Report
For the year ended 30 September 2023
The Directors submit their report together with the audited annual financial statements for the year ended 30
September 2023, which disclose the state of affairs and performance of Zambeef Products PLC (the “Company”)
and its subsidiaries (together, “the Group”).
Principal activities
The principal activities of the Group are the production, processing, distribution and retailing of beef, chicken,
pork, milk, dairy products, eggs, edible oils, stockfeed and flour. The Group also has large row cropping operations
(principally maize, soya beans and wheat), with approximately 14,530 Hectares of row crops under irrigation and
7,924 Hectares of rain-fed/dry-land crops available for planting each year. The Group also has retailing operations in
Nigeria and Ghana.
There has been no significant changes in the Group’s business during the year.
Share capital and beneficial owner(s)
The authorised share capital of the Company remained unchanged at 700,000,000 ordinary shares of K0.01. each.
The issued and fully paid-up share capital remained at 300,579,630 ordinary shares of K0.01 each.
The Group’s notable shareholding and beneficial ownership is represented as follows:
Name of shareholder
British International Investment Plc
Africa Life
First Equity
National Pension Scheme Authority (Zambia)
Krohne Capital
SBM Securities
Sussex Trust
Eastspring Investment
Rhodora
Number of shares
52,601,435
% of shareholding
17.5%
40,005,567
25,487,323
24,797,818
18,979,405
15,925,191
14,000,000
11,995,062
8,639,374
13.3%
8.5%
8.2%
6.3%
5.3%
4.7%
4.0%
2.9%
British International Investment Plc (BII) 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 BII having 34.8% of the
voting rights.
Results and dividend
The Group profit for the year of K120.2 million (2022: K31.6 million) has been added to retained earnings. The Directors
have not declared a dividend nor have any dividends been paid during the year. (2022: Nil)
34
Annual Report 2023Zambeef Products PLC Directors Report (continued)
For the year ended 30 September 2023
Directors and remuneration
The Directors who held office during the year and to the date of this report were:
Name
Michael Mundashi SC
Faith Mukutu
Mboo Mumba
Jonathan Kirby
Katebe Monica Musonda
Pearson Gowero
Roman Frenkel
Muyangwa Muyangwa
John Clifford Rich
Walter Roodt
Position
Chairman
Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Executive Director
-
-
Appointed 1st December 2022
-
-
-
-
Appointed 21st April 2023
Appointed 21st June 2023
Resigned 2nd December 2022
During the year, the total Directors remuneration for services rendered by Executive Directors and Non-Executive
Directors were as follows:
Position
Executive Director
Executive Director
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Name
Walter Roodt
Faith Mukutu
Mboo Mumba
Michael Mundashi SC
Jonathan Kirby
Yollard Kachinda
Katebe Monica Musonda
Pearson Gowero
Muyangwa Muyangwa
John Clifford Rich
Total
Interests register information
2023
K’000
839
8,215
4,149
13,203
989
624
-
624
624
220
126
3,205
2022
K’000
5,033
5,348
-
10,381
920
580
260
580
580
-
-
3,267
16,408
13,648
During the year, the Group officers (a Director, Company Secretary or Executive Officer of a Company) made
declarations of interest in Company transactions and business as follows:
Name of Director
Katebe Monica Musonda
2023- shares
Direct
-
Indirect
555
Direct
-
2022- shares
-
555
-
Indirect
555
555
The interests’ register, as required by the Companies Act, 2017 of Zambia, containing particulars of the above stated
interests declared, is available for inspection at the Group’s registered office.
35
Annual Report 2023Zambeef Products PLC Directors report (continued)
For the year ended 30 September 2023
Average number of employees and remuneration
The total remuneration of employees during the year amounted to 718.2 million (2022: K667.9 million) and the average
number of employees were as follows:
Month
October
November
December
January
February
March
Average Number
7,700
7,406
7,848
8,040
8,376
8,287
Month
April
May
June
July
August
September
Average Number
8,190
8,263
8,252
8,714
8,498
8,271
The Group has policies and procedures to safeguard the occupational health, safety, and welfare of its employees.
Gifts and donations
During the year, the Group made donations of K3.6 million (2022: K2.0 million) to charitable organisations and events.
Research and development
The Group did not incur any costs on research and development during the year (2022: Nil).
Exports
During the year, the Group exported K75.8 million worth of goods from Zambia (2022: K26.4 million).
Property, plant and equipment
During the year, the Group purchased property, plant and equipment amounting to K817.3 million
(2022: K222.1 million). In the opinion of the Directors, the carrying value of property, plant and equipment is not more
than their recoverable value.
Group Auditor and remuneration
The Auditor, PricewaterhouseCoopers Zambia, has indicated their willingness to continue in office and a resolution
for their reappointment will be proposed at the next annual general meeting.
The Auditor remuneration for the audit related to the financial year ended 30 September 2023 was K4.1 million (2022:
K3.3 million).
Signed on behalf of the Board of Directors,
_______________________
Michael Mundashi SC
Director
Date: 7 December 2023
_______________________
Faith Mukutu
Director
36
Annual Report 2023Zambeef Products PLC Statement of Director’s Possibilities
The Companies Act, 2017 of Zambia requires the Directors to prepare annual financial statements for each financial
year that give a true and fair view of the state of affairs of the Group as at the end of the financial year and of its
financial performance. It also requires the Directors to ensure that the Group keeps proper accounting records that
disclose, with reasonable accuracy, the financial position of the Group. They are also responsible for safeguarding
the assets of the Group. The Directors are further required to ensure the Group adheres to the corporate governance
principles or practices contained in Sections 82 to 122 of Part VII of the Companies Act, 2017 of Zambia.
The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate
accounting policies supported by reasonable estimates, in conformity with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and the requirements of the
Companies Act, 2017 of Zambia.
The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in
the preparation of annual financial statements, and for such internal controls as the Directors determine necessary
to enable the preparation of annual financial statements that are free from material misstatement whether due to
fraud or error.
The Directors are of the opinion that the annual financial statements set out on pages 44 to 115 give a true and
fair view of the state of the financial affairs of the Group and of its financial performance in accordance with IFRS
as issued by the IASB and the requirements of the Companies Act, 2017 of Zambia. The Directors further report
that they have implemented and further adhered to the corporate governance principles or practices contained in
Sections 82 to 122 of Part VII of the Companies Act, 2017 of Zambia.
Nothing has come to the attention of the Directors to indicate that the Group will not remain a going concern for at
least twelve months from the date of these annual financial statements.
Signed on behalf of the Board of Directors
_____________________
Michael Mundashi SC
Chairman
_______________________
Faith Mukutu
Chief Executive Officer
Date: 7 December 2023
37
Annual Report 2023Zambeef Products PLC Independent auditor’s report (continued)
Report on the audit of the Group and Company annual financial statements
Our opinion
In our opinion, the Group and Company annual financial statements give a true and fair view of Group and Company
financial position of Zambeef Products PLC (the “Company”) and its subsidiaries (together the “Group”) as at 30
September 2023, and of the Group and Company financial performance and their cash flows for the year then ended
in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) and the requirements of the Companies Act, 2017 of Zambia and the Securities Act, 2016 of
Zambia.
What we have audited
Zambeef Products PLC’s Group and Company annual financial statements are set out on pages 44 to 115 and
comprise:
•
•
•
•
the Group and Company statements of financial position as at 30 September 2023;
the Group and Company statements of profit or loss and other comprehensive income for the year then ended;
the Group and Company statements of changes in equity for the year then ended;
the Group and Company statements of cash flows for the year then ended; and
the notes to the Group and Company annual financial statements, including a summary of significant accounting
policies.
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 Group and Company annual
financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group and Company in accordance with the International Ethics Standards Board
for Accountants’ (IESBA) International Code of Ethics for Professional Accountants (including International
Independence Standards) (the “IESBA Code”). We have fulfilled our other ethical responsibilities in accordance with
the IESBA Code.
38
Annual Report 2023Zambeef Products PLC Independent auditor’s report (continued)
Key audit matter
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
Group and Company annual financial statements of the current period. These matters were addressed in the context
of our audit of the Group and Company annual financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Key audit matter
Impairment of Goodwill
The Group tests whether goodwill has suffered any
impairment on an annual basis. The recoverable amount
of the cash-generating units (CGUs) is determined based
on value-in-use calculations which require the use of
assumptions. The calculations use cash flow projections
based on financial budgets approved by management
covering a five-year period.
Cash flows beyond the five-year period are extrapolated
using the estimated growth rates. These growth rates
are consistent with forecasts included in industry reports
specific to the industry in which each CGU operates.
Key assumptions used in the calculation include:
• estimating the budgeted gross margins to be
generated in the future;
• estimating the long-term growth rate; and;
• determining the discount rate to be used.
We determined this to be an area of focus for the audit on
account of the significance of the judgments applied by the
Directors in determining the recoverable amount of this
Cash Generating Unit (“CGU”).
Refer to Note 3 (Critical accounting estimates and
assumptions) and Note 13 (Goodwill)
How our audit addressed the Key audit matter
In assessing the reasonableness of the assumptions
applied by the Directors, we performed the following
procedures:
• agreed the cash flow forecasts to the most
recently approved budgets and assessed
reliability of budgeted numbers against historic
performance;
•
tested the appropriateness of assumptions used
in preparing the cash flow forecasts and company
budget;
• assessed the reasonableness of the projected
cash outflows arising on repairs and maintenance
expenditure against historic performance and
commitments;
• assessed the reasonableness of the long-term
growth rate against historical growth rate of the
business;
• assessed the reasonableness of the determined
discount rate to ensure it was representative of
the risks specific to the CGU by relying on work
performed by our experts;
• we evaluated the sensitivity of the Group’s
goodwill to fluctuations in the key assumptions
applied to ascertain the extent to which the key
inputs would have to change before goodwill
would be considered impaired; and
• we tested the mathematical accuracy of the
goodwill assessment performed and agreed
information used to the general ledger.
39
Annual Report 2023Zambeef Products PLC Independent auditor’s report (continued)
Key audit matter
Valuation of Biological assets
i) Livestock
In measuring the fair value of livestock and standing crop,
various management estimates and
judgements are
required. Estimates and judgements in determining the fair
value of livestock relate to market prices, average weight
and quality of animals, and mortality rates. The livestock
grow at different rates and there can be a considerable
spread in the quality and weight of animals that affects
the price achieved. An average weight is assumed for the
animals based on a sample deemed to be representative of
the total population per breed and genetic merit.
ii) Standing Crop
For standing crops, the most significant estimate relates
to management’s assessment of anticipated yield per
hectare. This assessment considers historic yields, climate
conditions and prices.
Key assumptions used in the calculations include:
• estimating the average weight of animals;
• estimating the market prices; and;
• estimating the anticipated yields per hectare and
adjustment related to the crops rate of growth.
We determined this to be an area of focus for the audit on
account of the significance of the judgments applied by
the Directors in determining the fair value of the biological
assets.
Refer to Note 3 (Critical accounting estimates and
assumptions) and Note 16 (Biological assets).
Other information
How our audit addressed the Key audit matter
In assessing the reasonableness of the
assumptions applied by the Directors, we
performed the following procedures:
• assessed the determined sample to ensure it
was representative of the animal population
by category and mix;
• observed the weighing of the animals based
on the sample selected and
re-calculated the average weight;
• obtained the market prices from suppliers as
at year end used in the valuation process;
• assessed the reasonableness of anticipated
yields per hectare against the subsequent
yields based on the actual yields achieved
• we evaluated the sensitivity of the biological
in the key
asset values to fluctuations
assumptions applied to ascertain the extent
to which the key inputs would have on the
balances as at year end;
• we tested the mathematical accuracy of
the assessment performed and agreed
information used to the general ledger.
The Directors are responsible for the other information. The other information comprises the Annual Report but
does not include the Group and Company annual financial statements and our auditor’s report thereon.
Our opinion on the Group and Company annual financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
40
Annual Report 2023Zambeef Products PLC Independent auditor’s report (continued)
In connection with our audit of the Group and Company
annual financial statements, our responsibility is to read
the other information identified above and, in doing so,
consider whether the other information is materially
inconsistent with the Group and Company annual
financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
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 Group and Company annual financial
statements.
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 the Directors for the Group and
Company annual financial statements
The Directors are responsible for the preparation of
the Group and Company annual financial statements
that give a true and fair view in accordance with IFRS
as issued by the IASB and the requirements of the
Companies Act, 2017 of Zambia and the Securities
Act, 2016 of Zambia, and for such internal control as
the Directors determine is necessary to enable the
preparation of Group and Company annual financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the Group and Company annual financial
statements, the Directors are 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 the Directors either intend to liquidate
the Group and Company or to cease operations, or have
no realistic alternative but to do so.
The Directors are responsible for overseeing the
Group’s and Company’s financial reporting process.
Auditor’s responsibilities for the audit of the Group and
Company annual financial statements
Our objectives are to obtain reasonable assurance
about whether the Group and Company annual
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
As part of an audit in accordance with ISAs, we exercise
professional
judgement and maintain professional
scepticism throughout the audit. We also:
•
the
risks of material
Identify and assess
misstatement of the Group and Company annual
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 Company’s
internal control;
•
the appropriateness of accounting
Evaluate
policies used and the reasonableness of accounting
estimates and related disclosures made by the
Directors;
• Conclude on the appropriateness of the Directors’
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 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
Group and Company annual financial statements
or, if such disclosures are inadequate, to modify our
opinion.
41
Annual Report 2023Zambeef Products PLC
report on whether:
i) as required by section 259 (3)(a), there is a
relationship, interest or debt which, ourselves, as
the Group and Company Auditor, have in the Group
and Company;
ii) as required by section 259 (3)(b), there are serious
breaches by the Group’s and Company’s Directors,
of corporate governance principles or practices
contained in Sections 82 to 122 of Part VII of the
Companies Act, 2017of Zambia; and
iii)
in accordance with section 250 (2), as regards
loans made to a Group and Company Officer (a
director, company secretary or executive officer of
the Group and Company) the Group and Company
does not state the:
•
•
particulars of any relevant loan made during
the financial year to which the accounts apply,
including any loan which was repaid during that
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
matters to report.
The engagement partner on the audit resulting in this
independent auditor’s report is Andrew Chibuye.
PricewaterhouseCoopers
Chartered Accountants
7 December 2023
Lusaka
Andrew Chibuye
Practicing Certificate Number: AUD/F002378
Partner signing on behalf of the firm
Auditor’s responsibilities for the audit of the Group and
Our conclusions are based on the audit evidence ob-
tained up to the date of our auditor’s report. However,
future events or conditions may cause the Group and
Company to cease to continue as a going concern;
•
Evaluate the overall presentation, structure and
content of the Group and Company annual financial
statements, including the disclosures, and whether
the Group and Company annual 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 Group and Company annual 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 the Directors 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 the Board of Directors 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.
From the matters communicated with the Board of
Directors, we determine those matters that were of most
significance in the audit of the Group and Company
annual 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
42
Financial Statements
30 September 2023
Annual Report 2023Zambeef Products PLC Financial Statements
30 September 2023
43
Annual Report 2023Zambeef Products PLC Statement of Profit or Loss and 0ther Comprehensive Income
Continuing operations
2023
2022
2023
2022
Notes
Group
Company
Revenue from contracts with customers
Change in fair value of biological assets
Cost of sales of goods
Gross profit
Other (expenses)/income
Net impairment losses on financial assets
Impairment of goodwill
Distribution expenses
Administrative expenses
5(ii)
16
7
6
4(b)
13
7
7
6,046,157
643,197
5,394,761
349,462
3,384,408
568,975
3,361,428
338,052
(4,846,092)
(4,111,037)
(3,046,883)
(2,826,242)
1,843,262
1,633,186
906,500
873,238
(46,419)
(2,713)
-
(96,287)
2,491
(17,869)
(141,786)
(65,596)
(18,064)
(1,768)
-
(1,302)
17,325
(7,876)
(141,786)
(67,118)
(1,336,486)
(1,236,762)
(741,469)
(658,635)
Operating profit
361,357
173,664
143,897
15,148
Net Finance costs and Income
Share of loss from equity investment
8
15(ii)
(155,089)
(2,595)
(114,997)
(3,503)
(123,921)
(2,595)
(87,475)
(3,503)
Profit/(loss) before income tax
203,673
55,164
17,381
(75,830)
Income tax expense – continuing operations
10
(72,851)
(63,283)
(15,704)
(27,799)
(Loss)/profit from continuing operations
Profit from discontinued operations after tax
20(i)
130,822
(10,604)
(8,119)
39,697
1,677
(103,629)
(10,604)
39,697
Profit/(loss) for the year
120,218
31,578
(8,927)
(63,932)
Profit/(loss) attributable to:
Owners of Zambeef Products PLC
Non-controlling interests
Other comprehensive income:
Items that maybe reclassified to profit or loss
Translation differences - foreign operations
Translation differences - Mpongwe Farms
Items not reclassified to profit or loss
Revaluation surplus
Actuarial remeasurement losses
Deferred income tax
Other comprehensive income for the year
118,612
1,606
120,218
29,152
2,426
31,578
(8,927)
(63,932)
-
-
(8,927)
(63,932)
22
22
23
26(i)
25
(40,617)
-
(16,320)
(10,847)
-
-
-
(10,847)
1,003,412
(768)
(98,516)
863,511
-
(3,150)
6,394
(23,923)
977,426
(425)
(97,751)
879,250
-
(1,058)
3,018
(8,887)
Total comprehensive income for the year
983,729
7,655
870,323
(72,819)
44
Annual Report 2023Zambeef Products PLC Statement of Profit or Loss and 0ther Comprehensive Income (continued)
Total comprehensive income for the year is
attributable to:
Owners of Zambeef Products Plc
Non-controlling interests
Basic earnings per share
Continuing operations
Discontinued operations
Total basic earnings per share
Diluted earnings per share
Continuing operations
Discontinued operations
Total diluted earnings per share
Notes
Group
Company
2023
2022
2023
2022
K’000
990,425
(6,696)
983,729
K’000
4,970
2,685
7,655
K’000
870,323
-
K’000
(72,819)
-
870,323
(72,819)
Ngwee
Ngwee
Ngwee
42.99
(3.53)
39.46
32.25
(2.65)
29.60
(3.51)
13.21
9.70
(2.63)
9.91
7.28
0.56
(3.53)
(2.97)
0.42
(2.65)
(2.23)
Ngwee
(34.46)
13.21
(21.25)
(25.85)
9.91
(15.94)
30
30
30
30
The notes on pages 51 to 115 form an integral part of these annual financial statements
45
Annual Report 2023Zambeef Products PLC Consolidated Statement of Financial Position
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Investment in associate
Biological assets
Current assets
Biological assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Total assets
EQUITY
Share capital
Share premium
Preference share capital
Foreign currency translation reserve
Revaluation reserve
Retained earnings
Attributable to owners of parent entity
Non-controlling interests (NCI)
LIABILITIES
Non-current liabilities
Lease liabilities
Borrowings
Deferred income tax
Defined benefit obligations
Current liabilities
Lease liabilities
Borrowings
Trade and other payables
Contract liabilities
Current income tax
Total equity and liabilities
Notes
30-Sept-23
K’000
30-Sept-22
K’000
11
13
15
16
16
17
18
19
20(iii)
21
21
21
22
23
12(b)
24
25
26
12(b)
24
27
28
10
4,818,533
25,015
34,370
123,359
5,001,277
285,039
1,656,487
332,703
271,222
157,640
2,703,091
7,704,368
3,006
1,125,012
1,000
660,390
1,964,087
930,261
4,683,756
(6,630)
4,677,126
15,622
687,679
302,017
1,631
1,006,949
6,448
972,827
834,191
164,063
42,764
2,020,293
7,704,368
3,167,000
25,015
36,965
86,592
3,315,572
234,104
1,441,912
289,300
223,972
170,091
2,359,379
5,674,951
3,006
1,125,012
1,000
692,705
1,113,119
758,489
3,693,331
66
3,693,397
12,597
426,222
223,217
3,654
665,690
5,046
525,325
649,573
97,400
38,520
1,315,864
5,674,951
The annual financial statements on pages 44 to 115 were approved for issue by the board of directors on 7 December
2023 and signed on its behalf by:
_____________________
Michael Mundashi SC
Chairman
_______________________
Faith Mukutu
Chief Executive Officer
The notes on pages 51 to 115 form an integral part of these annual financial statements.
46
Annual Report 2023Zambeef Products PLC Company Statement of Financial Position
ASSETS
Non-current assets
Property, plant and equipment
Investment in subsidiaries
Investment in associate
Biological assets
Current assets
Biological assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Current income tax asset
Total assets
EQUITY
Share capital
Share premium
Preference share capital
Foreign currency translation reserve
Revaluation reserve
Retained earnings
LIABILITIES
Non-current liabilities
Lease liabilities
Borrowings
Deferred income tax
Defined benefit obligations
Current liabilities
Lease liabilities
Borrowings
Trade and other payables
Contract liabilities
Current income tax
Total equity and liabilities
Notes
30-Sept-23
K’000
30-Sept-22
K’000
11
14
15
16
16
17
18
19
20(iii)
10
21
21
21
22
23
12(b)
24
25
26
12(b)
24
27
28
10
3,595,380
104,020
34,370
123,359
3,857,129
232,396
1,104,477
1,277,442
209,854
157,640
-
2,981,809
6,838,938
3,006
1,125,012
1,000
687,048
1,561,799
760,468
4,138,333
7,403
687,679
220,829
902
916,813
6,288
783,148
886,026
94,976
13,354
1,783,792
6,838,938
2,181,612
104,020
36,965
86,592
2,409,189
183,061
977,667
786,517
136,149
170,091
-
2,253,485
4,662,674
3,006
1,125,012
1,000
687,048
712,279
739,665
3,268,010
5,354
426,222
140,280
366
572,222
4,878
337,669
367,814
97,400
14,681
822,442
4,662,674
The annual financial statements on pages 44 to 115 were approved for issue by the board of directors on 7 December
2023 and signed on its behalf by:
_____________________
Micheal Mundashi SC
Chairman
_______________________
Faith Mukutu
Chief Executive Officer
The notes on pages 51 to 115 form an integral part of these annual financial statements.
47
Annual Report 2023Zambeef Products PLC
Consolidated Statement of Changes in Equity
Share
Capital
Share
premium
Preference
share
capital
Foreign
currency
translation
reserve
Revaluation
reserve
Retained
earnings
Total
attributable
to owners
of parent
entity
Non-
controlling
interests
Total
Year ended 30 September 2022
K’000
K’000
At start of year
Profit for the year
Other comprehensive income:
Transfer of excess depreciation
Actuarial remeasurement losses
Deferred income tax (Note 25)
Translation differences (Note 22)
Total comprehensive income for
the year
3,006
1,125,012
-
-
-
-
-
-
-
-
-
-
-
-
-
-
K’000
1,000
K’000
720,131
-
-
-
-
(27,426)
(27,426)
-
-
-
-
-
-
-
K’000
K’000
K’000
K’000
1,160,653
678,559
3,688,361
(2,619) 3,685,742
-
29,152
29,152
2,426
31,578
(53,928)
53,928
-
(3,150)
6,394
-
-
-
(47,534)
50,778
-
(3,150)
6,394
(27,426)
(24,182)
-
-
-
259
259
-
(3,150)
6,394
(27,167)
(23,923)
(27,426)
(47,534)
79,930
4,970
2,685
7,655
At end of year
3,006
1,125,012
1,000
692,705
1,113,119 758,489
3,693,331
66 3,693,397
Year ended 30 September 2023
At start of year
Profit for the year
Other comprehensive income:
Revaluation surplus
Transfer of excess depreciation
Actuarial remeasurement losses
Deferred income tax (Note 25)
Translation differences (Note 22)
Total comprehensive income for
the year
3,006
1,125,012
1,000
692,705
1,113,119 758,489
3,693,331
66 3,693,397
-
118,612
118,612
1,606
120,218
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,003,412
-
1,003,412
(53,928)
53,928
-
(768)
(98,516)
-
(768)
(98,516)
-
-
-
-
-
-
1,003,412
-
(768)
(98,516)
(32,315)
-
(32,315)
(8,302)
(40,617)
(32,315)
850,968
53,160
871,813
(8,302)
863,511
(32,315)
850,968
171,772
990,425
(6,696)
983,729
At year end
3,006
1,125,012
1,000
660,390
1,964,087
930,261
4,683,756
(6,630)
4,677,126
The notes on pages 51 to 115 are an integral part of these annual financial statements.
48
Annual Report 2023Zambeef Products PLC Company Statement of Changes in Equity
Share
Capital
K’000
3,006
Share
premium
Preference
share capital
K’000
1,125,012
K’000
1,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Foreign
currency
translation
reserve
K’000
697,895
Revaluation
reserve
K’000
739,522
Retained
earnings
K’000
Total
774,394
3,340,829
-
-
-
-
(10,847)
(10,847)
-
(63,932)
(63,932)
(30,155)
-
2,912
-
30,155
(1,058)
106
-
(27,243)
29,203
-
(1,058)
3,018
(10,847)
(8,887)
(10,847)
(27,243)
(34,729)
(72,819)
At start of year
Loss for the year
Other comprehensive income:
Transfer of excess depreciation
Actuarial remeasurement losses
Deferred income tax (Note 25)
Translation losses on Mpongwe
farms (Note 22)
Total comprehensive income for
the year
At start of year
3,006
1,125,012
1,000
687,048
712,279
739,665
3,268,010
Year ended 30 September 2023
At start of year
Loss for the year
Other comprehensive income:
Revaluation reserve
Transfer of excess depreciation
Actuarial remeasurement losses
Deferred income tax (Note 25)
Translation losses
Total comprehensive income for
the year
3,006
1,125,012
1,000
687,048
712,279
739,665
3,268,010
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,927)
(8,927)
977,426
(30,155)
-
(97,751)
-
-
977,426
30,155
(425)
-
-
-
(425)
(97,751)
-
849,520
29,730
879,250
849,520
20,803
870,323
At year end
3,006
1,125,012
1,000
687,048
1,561,799
760,468
4,138,333
The notes on pages 51 to 115 are an integral part of these annual financial statements.
49
Annual Report 2023Zambeef Products PLC Consolidated Statement of Cash Flows
Cash generated from/(used in) operations
Interest paid on borrowings
Interest paid on leases
Benefits paid
Income tax paid
Notes
29(i)
29(ii)
29(ii)
26(i)
10
Group
2023
K’000
Company
2022
K’000
2023
K’000
2022
K’000
316,758
(44,646)
(2,676)
(3,422)
308,323
(53,473)
(1,813)
(9,672)
(29,141)
(44,646)
(1,312)
(238)
(88,323)
(44,877)
(34,233)
153,025
(53,473)
(784)
(3,247)
(9,828)
Net cash inflow from operating activities
177,691
198,488
(109,570)
85,693
Cash flows from investing activities
Purchase of property, plant and equipment
11
(817,295)
(222,135)
(504,998)
(109,858)
Proceeds from disposal assets
4,025
2,819
6,165
-
Net cash outflow from investing activities
(813,270)
(219,316)
(498,833)
(109,858)
Cash flows from financing activities
Proceeds from borrowings
Principal repayments of borrowings
Principal elements of lease payments
29(ii)
29(ii)
29(ii)
916,396
722,995
916,396
(526,257)
(526,205)
(526,257)
(7,319)
(14,965)
(6,016)
722,995
(526,205)
(7,322)
Net cash in flow from financing activities
382,820
181,825
384,123
189,468
Net increase/(decrease) for the year
(252,759)
160,997
(224,280)
165,303
Movement in cash and cash equivalents
At start of year
Net increase /(decrease)
Exchange differences
(127,708)
(252,759)
(288,665)
(27,876)
160,997
(224,280)
-
(40)
-
(193,224)
165,303
45
At year end
19
(380,467)
(127,708)
(252,156)
(27,876)
The notes on pages 51 to 115 are an integral part of these annual financial statements.
50
Annual Report 2023Zambeef Products PLC Notes to Annual Financial Statements
For the year ended 30 September 2023
1
General information
Zambeef Products PLC (the “Company”) is incorporated in Zambia under the Zambia Companies Act as a public limited
company, listed on the Lusaka Stock Exchange and is domiciled in Zambia. The Company and its subsidiaries (together
“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, stockfeed and flour.
The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 14,530
Hectares of row crops under irrigation and 7,924 Hectares of rain-fed/dry-land crops available for planting each year. The
Group also has operations in West Africa in Nigeria and Ghana.
The Group’s registered office is:
Plot 4970, Manda Road
Industrial Area
Lusaka
Zambia
2
Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these annual financial
statements to the extent they have not already been disclosed in the other notes above. These policies have been
consistently applied to all the years presented, unless otherwise stated. The annual financial statements are for the Group
consisting of Zambeef Products PLC and its subsidiaries.
a)
Basis of preparation
Compliance with IFRS
The annual financial statements of the Group have been prepared in accordance with International Financial
Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable
to companies reporting under IFRS. The annual financial statements comply with IFRS as issued by the International
Accounting Standards Board (IASB).
Historical cost convention
The annual financial statements have been prepared on historical cost basis, except where otherwise stated in the
accounting policies below. The annual financial statements are presented in Zambia Kwacha (K). Where necessary,
comparative figures have been adjusted to conform to changes in presentation in the current period.
In accordance with the Companies Act, 2017 of Zambia, the annual financial statements for the year ended 30
September 2023 have been approved for issue by the Directors.
The preparation of annual financial statements in conformity with IFRS requires the use of estimates and assumptions.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.
The areas involving higher degree of judgement or complexity, or where assumptions and estimates are significant
to the annual financial statements are disclosed in Note 3.
51
Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
i)
New and amended standards adopted by the Group
The Group has adopted the applicable new, revised or amended accounting pronouncements as issued by the
International and Accounting Standards Board (IASB), which were effective for the Group from 1 October 2022.
The amendments to accounting standards below effective for the reporting period 1 October 2022 did not have
any material impact on the Group’s accounting policies and required no retrospective adjustments to the annual
financial statements of the Group.
Property, Plant and Equipment: Proceeds before intended use – Amendments to IAS 16.
The amendment to IAS 16 Property, Plant and Equipment (PP&E) prohibits an entity from deducting from the
cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset
for its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it
assesses technical and physical performance of the asset. The financial performance of the asset is not relevant to
this assessment. Entities must disclose separately the amounts of proceeds and costs relating to items produced
that are not an output of the entity’s ordinary activities.
Onerous Contracts – Cost of Fulfilling a Contract Amendments to IAS 37. The amendment to IAS 37 clarifies that
the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation
of other costs directly related to fulfilling contracts. Before recognising a separate provision for an onerous
contract, the entity recognises any impairment loss that has occurred on assets used in fulfilling the contract.
Annual Improvements to IFRS Standards 2018–2020. The following improvements were finalised in May 2020:
•
•
IFRS 9 Financial Instruments – clarifies which fees should be included in the 10% test for derecognition of
financial liabilities;
IFRS 16 Leases – amendment of illustrative example 13 to remove the illustration of payments from
the lessor relating to leasehold improvements, to remove any confusion about the treatment of lease
incentives;
IFRS 1 First-time Adoption of International Financial Reporting Standards – allows entities that have measured
their assets and liabilities at carrying amounts recorded in their parent’s books to also measure any cumulative
translation differences using the amounts reported by the parent. This amendment will also apply to associates
and joint ventures
ii)
New and amended standards not yet adopted by the Group
Certain new accounting standards and interpretations have been published that are not mandatory for 30 September
2023 reporting periods and have not been early adopted by the Group. These standards are not expected to have a
material impact on the entity in the current or future reporting periods and on foreseeable future transactions.
Classification of Liabilities as Current or Non-current – Amendments to IAS 1. The narrow-scope amendments
to IAS 1 Presentation of Financial Statements clarify that liabilities are classified as either current or noncurrent,
depending on the rights that exist at the end of the reporting period. Classification is unaffected by the entity’s
expectations or events after the reporting date (e.g. the receipt of a waver or a breach of covenant).
52
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
iii)
New and amended standards not yet adopted by the Group(continued)
The amendments also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability. The amendments could
affect the classification of liabilities, particularly for entities that previously considered management’s intentions to
determine classification and for some liabilities that can be converted into equity.
They must be applied retrospectively in accordance with the normal requirements in IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors. Since approving these amendments, the IASB has issued an exposure
draft proposing further changes and the deferral of the amendments until at least 1 January 2024.
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2. The IASB amended IAS 1 to
require entities to disclose their material rather than their significant accounting policies. The amendments define
what is ‘material accounting policy information’ and explain how to identify when accounting policy information
is material. They further clarify that immaterial accounting policy information does not need to be disclosed. If
it is disclosed, it should not obscure material accounting information. To support this amendment, the IASB also
amended IFRS Practice Statement 2 Making Materiality Judgements to provide guidance on how to apply the
concept of materiality to accounting policy disclosures.
Definition of Accounting Estimates – Amendments to IAS 8. The amendment to IAS 8 Accounting Policies, Changes
in Accounting Estimates and Errors clarifies how companies should distinguish changes in accounting policies
from changes in accounting estimates. The distinction is important, because changes in accounting estimates are
applied prospectively to future transactions and other future events, whereas changes in accounting policies are
generally applied retrospectively to past transactions and other past events as well as the current period.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12. The
amendments to IAS 12 Income Taxes require companies to recognise deferred tax on transactions that, on initial
recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply
to transactions such as leases of lessees and decommissioning obligations, and will require the recognition of
additional deferred tax assets and liabilities.
The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative
period presented. In addition, entities should recognise deferred tax assets (to the extent that it is probable that
they can be utilised) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible
and taxable temporary differences associated with:
•
•
right-of-use assets and lease liabilities, and;
decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of
the cost of the related assets.
The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component
of equity, as appropriate. IAS 12 did not previously address how to account for the tax effects of on-balance sheet
leases and similar transactions and various approaches were considered acceptable. Some entities may have
already accounted for such transactions consistent with the new requirements. These entities will not be affected
by the amendments.
Sale or contribution of assets between an investor and its associate or joint venture – Amendments to IFRS 10 and
IAS 28. The IASB has made limited scope amendments to IFRS 10 Consolidated Financial Statements and IAS 28
Investments in Associates and Joint Ventures.
53
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
iii)
New and amended standards not yet adopted by the Group(continued)
The amendments clarify the accounting treatment for sales or contribution of assets between an investor and their
associates or joint ventures. They confirm that the accounting treatment depends on whether the nonmonetary
assets sold or contributed to an associate or joint venture constitute a ‘business’ (as defined in IFRS 3 Business
Combinations).
Where the non-monetary assets constitute a business, the investor will recognise the full gain or loss on the sale
or contribution of assets. If the assets do not meet the definition of a business, the gain or loss is recognised by
the investor only to the extent of the other investor’s interests in the associate or joint venture. The amendments
apply prospectively. In December 2015, the IASB decided to defer the application date of this amendment until
such time as the IASB has finalised its research project on the equity method.
b)
Principles of consolidation and equity accounting
i)
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred
asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the statement of profit or
loss and other comprehensive income, statement of changes in equity and statement of financial position respectively.
54
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
b)
Principles of consolidation and equity accounting (continued)
ii)
Associates
Associates are all entities over which the Group has significant influence but not control or joint control.
This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in
associates are accounted for using the equity method of accounting after initially being recognised at cost.
iii)
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit
or loss, and the Group’s share of movements in other comprehensive income of the investee in other
comprehensive income. Dividends received or receivable from associates are recognised as a reduction in
the carrying amount of the investment.
Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the
entity, including any other unsecured long-term receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the
Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of equity-accounted investees have
been changed where necessary to ensure consistency with the policies adopted by the Group.
The carrying amount of equity-accounted investments is tested annually for impairment, or more frequently
if events or changes in circumstances indicate that they might be impaired.
iv)
Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative
interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests
and any consideration paid or received is recognised in a separate reserve within equity attributable to
owners of Zambeef Products PLC.
When the Group ceases to consolidate or equity account for an investment because of a loss of control
or significant influence, any retained interest in the entity is remeasured to its fair value, with the change
in carrying amount recognised in profit or loss. This fair value becomes the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an associate or financial asset. In addition,
any amounts previously recognised in other comprehensive income in respect of that entity are accounted
for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income are reclassified to profit or loss
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss
where appropriate.
55
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
c)
Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:
•
•
•
•
•
fair values of the assets transferred;
liabilities incurred to the former owners of the acquired business;
equity interests issued by the Group;
fair value of any asset or liability resulting from a contingent consideration arrangement, and;
fair value of any pre-existing equity interest in the subsidiary
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-
controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
•
•
•
consideration transferred,
amount of any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the
fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss
as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an independent financier under comparable
terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss. If the
business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from
such remeasurement are recognised in profit or loss.
d)
Impairment of non-financial assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets 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
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from
other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
56
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
e)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker (CODM). The Board of Zambeef Products PLC has appointed a strategic steering committee
which assesses the financial performance and position of the Group and makes strategic decisions. The steering
committee, which has been identified as being the CODM, consists of the Chief Executive Officer and the Chief
Financial Officer.
f)
Foreign currency translation
i)
Functional and presentation currency
Items included in the annual financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’). The
consolidated financial statements are presented in Zambian Kwacha (K), which is Zambeef Products PLC’s
functional and presentation currency.
ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions,
and from the translation of monetary assets and liabilities denominated in foreign currencies at year end
exchange rates, are recognised in profit or loss. They are deferred in equity if they are attributable to part of
the net investment in a foreign operation.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or
loss on a net basis within other income or other expenses.
Translation differences arising on Mpongwe Farms, whose assets and liabilities are denominated in US
Dollars are posted in other comprehensive income. In December 2021, management aligned the functional
currency of Mpongwe Farms to that of Zambeef Products PLC as the farm is a direct and integral extension
of the reporting entity.
iii)
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
assets and liabilities for each statement of financial position presented are translated at the closing
rate at the date of that statement of financial position;
income and expenses for each statement of profit or loss and statement of comprehensive income
are translated at average exchange rates (unless this is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transactions), and;
•
all resulting exchange differences are recognised in other comprehensive income
On consolidation, exchange differences arising from the translation of any net investment in foreign
entities, and of borrowings are recognised in other comprehensive income. When a foreign operation is sold
or any borrowings forming part of the net investment are repaid, the associated exchange differences are
reclassified to profit or loss, as part of the gain or loss on sale.
57
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
g)
Revenue recognition
The Group’s contracts with customers exist in various forms and typically take the form of signed agreements,
approved customer purchase orders, invoices to customers, terms and conditions documents and customary
business practices, all of which have commercial substance and impact the Company’s future cash flows. Revenue is
recognised at point in time upon delivery of products and customer acceptance. A receivable is recognised when the
goods are delivered as this is the point in time that the consideration is unconditional because only the passage of
time is required before the payment is due.
Retailing and food production
The cold food chain products are mainly beef, chicken, pork, fish, milk and dairy products. These products are sold
through the Group’s retail 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. Revenue is recognised at point in
time when performance obligations are satisfied by delivering the products.
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 stockfeed. Revenue is
recognised at point in time when performance obligations are satisfied by delivering the stockfeed.
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. A contract 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.
Cropping and milling
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 at point in time when performance obligations are satisfied by delivering the grain.
The flour mill and bread are sold through the Group’s retail network and are mainly for cash sales. Revenue is recognised
at point in time upon accptance of products by the customer.
Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or
services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not
adjust any of the transaction prices for the time value of money.
h)
Interest income
Interest income is presented as finance income where it is earned from financial assets that are held for cash
management purposes. Any other interest income is included in other income. Interest income is recognised using
the effective interest method.
58
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
i)
Property, plant and equipment
All items of property, plant and equipment are initially recognised at cost and subsequently shown at fair value,
based on valuations by external independent valuers, less accumulated depreciation. Valuations are performed
with sufficient regularity to ensure that the fair value does not differ materially from its carrying amount. Any
accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset
and the net amount is restated to the revalued amount of the asset.
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. The carrying amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.
Increases in the carrying amounts arising on revaluation of property, plant and equipment are recognised, net of tax,
in other comprehensive income and accumulated in reserves in shareholders’ equity. To the extent that the increase
reverses a decrease previously recognised in profit or loss, the increase is first recognised in profit or loss. Decreases
that reverse previous increases of the same asset are first recognised in other comprehensive income to the extent
of the remaining surplus attributable to the asset; all other decreases are charged to profit or loss. Each year, the
difference between depreciation based on the revalued carrying amount of the asset charged to profit or loss and
depreciation based on the asset’s original cost, net of tax, is reclassified from the property, plant and equipment
revaluation surplus to retained earnings
Depreciation is calculated using the straight-line method to allocate the cost or revalued amounts of the assets, net
of their residual values, over their estimated useful lives as follows:
Buildings
Plant & machinery
Motor vehicles
Furniture & Equipment
2%
10%
20%
10%
Capital work in progress, which represents additions to property, plant and equipment that have not yet been brought
into use, is not depreciated. Additions are transferred into the above depreciable asset classes once they are brought
into use. Capital work in progress is measured at cost less impairments.
The asset’s residual values and useful lives of the assets are reviewed, and adjusted if appropriate, at the end of each
reporting period.
Property, plant and equipment are reviewed 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 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value
less costs to sell, and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash-generating units).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts included in other reserves in
respect of those assets to retained earnings.
59
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
j)
Leases
The following sets out the Group’s lease accounting policy for all leases with the exception of leases with low-value
and short term of less than 12 months for which the Group has taken the exemption under the standard and are
expensed to profit or loss as incurred.
i)
Right of use assets
The Group recognises right of use assets at the commencement date of the lease (i.e., the date the underlying
asset is available for use under the contract). Leasehold land is initially recognised at cost and subsequently
shown at fair value, based on valuations by external independent valuers, less accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities
All other right of use assets are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities.
The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the commencement date (which do not form part of the lease liability
value at the commencement date).
Right of use assets are depreciated on a straight-line basis over the shorter of their estimated useful life and
the lease term.
Buildings
Plant & machinery
Motor vehicles
Leasehold land
10 years
10 years
4 years
Lease term
Lease term
Lease term
70-80 years
Lease term
The right-of-use assets are tested for impairment in accordance with IAS 36 “Impairment of Assets”.
ii)
Lease liabilities
At the commencement date of the lease, the group recognises lease liabilities measured at the present value
of all remaining lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments where the contracts specify fixed or minimum uplifts) and variable
lease payments that depend on an index or a rate.
The variable lease payments that do not depend on an index or a rate are recognized as an expense in the
period in which the event or condition that triggers the payment occurs. Due to the nature of the leased
assets the interest rate implicit in the lease is usually not readily determinable, the Group therefore uses the
incremental borrowing rate in calculating the present value of lease payments at the lease commencement
date.
The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for each period. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term or a change in the in-substance
fixed lease payments.
60
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
k)
Goodwill
Goodwill is measured as described in Note (C). Goodwill is not amortised but it is tested for impairment annually, or
more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those
cash-generating units or groups of cash-generating units that are expected to benefit from the business combination
in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored
for internal management purposes, being the operating segments.
l)
Biological assets
Biological assets are measured at fair value less cost to sell, based on market prices at auction of livestock of similar
age, breed and genetic merit, with adjustments, where necessary, to reflect the differences. Costs to sell include the
incremental selling costs, including auctioneers’ fees, commission paid to brokers and dealers, and estimated costs
of transport to the market, but exclude finance costs and income taxes.
Changes in fair value of livestock and growing crop are recognised in profit or loss. Farming costs such as feeding,
labour costs, pasture maintenance, veterinary services and shearing are expensed as incurred. The cost of purchase
of sheep plus transportation charges are capitalised as part of biological assets.
Cattle and Pigs are measured at fair value based on market prices of similar age, breed and genetic merit, with
adjustments, where necessary, to reflect the differences. Market prices are obtained from local active market. Cattle
and Pigs are classified as current assets if they are to be sold within one year.Standing crops (Maize, Soya and Wheat)
are measured 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.
The cost model is adopted for the measurement of Chickens and agricultural produce (parent breeding stock,
commercial layers, set eggs and unset eggs) as the fair values cannot be reliably measured. Breeding stock and
commercial layers are capitalized at cost at the beginning of their productive cycleand amortised on a straight-
line method over the anticipated productive cycle, to its estimated net realizable value. All the expenses incurred
in establishing and maintaining the assets are recognized in cost of sales. All costs incurred in acquiring biological
assets until point of production are capitalised.
Set and unset eggs are measured on costs with expenses incurred in maintaining the assets included within “cost of
sales” in profit or loss for the period in which they arise.
m)
Inventories
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable
value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual
items of inventory on the basis of first in first out. Costs of purchased inventory are determined after deducting
rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
61
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
n)
Financial instruments
Financial assets and liabilities are recognised in the Group’s statement of financial position when the Group becomes
a party to the contractual provisions of the instruments.
Classification and measurement
Financial assets
The classification depends on the entity’s business model for managing the financial assets and the contractual terms
of the cash flows. The group reclassifies debt investments when and only when its business model for managing
those assets changes. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and
the cash flow characteristics of the asset. The Group measures its debt instruments at amortised cost as assets
are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest. Interest income from these financial assets is included in finance income using the effective interest rate
method. The Group's financial assets are trade receivables and cash and cash equivalents.
i)
Trade and receivables
Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing components when they are recognised at fair value. They are subsequently
measured at amortised cost using the effective interest method, less loss allowance.
ii)
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings
in current liabilities in the statement of financial position.
Financial liabilities
The Group's financial liabilities are classified as amortised cost. Financial liabilities are recognised
initially at fair value and inclusive of directly attributable transaction costs. The Group's financial liabilities are
borrowings and trade and other payables (excluding statutory liabilities).
i)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in profit or loss over the period of the borrowings using the effective
interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the
loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of
the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over
the period of the facility to which it relates.
62
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
m)
Financial instruments (continued)
Financial liabilities (continued)
i)
Borrowings (continued)
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor
to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which
is measured as the difference between the carrying amount of the financial liability and the fair value of the
equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period.
ii)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months after
the reporting period. They are recognised initially at their fair value and subsequently measured at amortised
cost using the effective interest method.
Impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments
carried at amortised cost. The Group applies the simplified approach permitted by IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. Refer to Note 4(b) for
further details.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired
or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/
(losses) together with foreign exchange gains and losses.The Group derecognises financial liabilities when,
and only when, the Group’s obligations are discharged, cancelled or have expired. The difference between the
carrying amount of the financial liability derecognised and the consideration paid and payable is recognised
in profit or loss.
Substantial modification
A substantial modification of the terms of an existing debt instrument or part of it is accounted for as an
extinguishment of the original debt instrument and the recognition of a new debt instrument. Gains or losses
arising from the modification of the terms of a debt instrument are recognised immediately in profit or loss
where the modification does not result in the derecognition of the existing instrument.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously. As at the reporting period, there were
no assets and liabilities off-set relating to financial instruments. The legally enforceable right is not contingent
on future events and is enforceable in the normal course of business and in the event of default, insolvency or
bankruptcy of the Group or the counterparty.
63
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
n)
Other current assets
These amounts generally arise from transactions outside the usual operating activities of the Group. Interest may be
charged at commercial rates where the terms of repayment exceed six months. Collateral is not normally obtained.
Prepayments are amounts paid in advance during the accounting period for an underlying asset that will be consumed
in a future period. When the asset is used or consumed, the prepayments are amortised, and costs are recognised in
operating expenses. Prepayments are stated at their nominal values in the financial statements.
o)
Borrowings costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of
a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its
intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for
their intended use or sale.
Investment income earned on the temporary investment of specific borrowings, pending their expenditure on
qualifying assets, is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed
in the period in which they are incurred.
p)
Non-current assets (or disposal groups) held for sale and discontinued operation
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as
deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried
at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair
value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset
(or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the noncurrent asset (or disposal group) is recognised at the date of
derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified
as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the statement of financial position. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the statement of financial position.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and
that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to
resale. The results of discontinued operations are presented separately in the statement of profit or loss.
64
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued)
q)
Share capital and share premium
Ordinary shares are classified as share capital in equity. Mandatorily redeemable preference shares are classified as
liabilities. However, the Group classifies preference shares as equity as they do not meet the definition of a financial
liabilities. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Any premium received over and above the par value of the shares is classified as share premium in equity. Incremental
costs directly attributable to the issue of new ordinary shares are shown in equity as deduction from the proceeds.
r)
Earnings per share
i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company, excluding
any costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year
and excluding treasury shares.
ii)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after-income tax effect of interest and other financing costs associated with dilutive
potential ordinary shares, and the weighted average number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive potential ordinary shares.
s)
Employee benefits
i)
Short term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
that are expected to be settled wholly within 12 months after the end of the period in which the employees
render the related service are recognised in respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in the statement of financial position.
ii)
Post-employment obligations
The Group operates various post-employment schemes, including both defined contribution and benefit
plans.
Defined contribution plan
The Group and all its employees pay contributions to the National Pension Scheme Authority (NAPSA), a
publicly administered pension scheme on a mandatory basis. The Group has no further payment obligations
once the contributions have been paid. The contributions are recognised as employee benefit expense when
they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction
in the future payments is available.
65
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued
s)
Employee benefits (continued)
ii)
Post-employment obligations (continued)
Defined benefit pension plan
The liability recognised in the statement of financial position in respect of defined benefit pension plans is
the present value of the defined benefit obligation at the end of the reporting period. The plan is unfunded.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit
method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which
the benefits will be paid, and that have terms approximating to the terms of the related obligation. In countries
where there is no deep market in such bonds, the market rates on government bonds are used.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation. This cost is included in employee benefit expense in the statement of profit or loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions
are recognised in the period in which they occur, directly in other comprehensive income. They are included in
retained earnings in the statement of changes in equity and in the statement of financial position.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in profit or loss as past service costs.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement
date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises
termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer
of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS
37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary
redundancy, the termination benefits are measured based on the number of employees expected to accept
the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to
present value.
t)
Income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income, based on the
applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period in the countries where the Group and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an
uncertain tax treatment. The Group measures its tax balances either based on the most likely amount or the expected
value, depending on which method provides a better prediction of the resolution of the uncertainty.
66
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
2
Summary of significant accounting policies (continued
t)
Income tax (continued)
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the annual financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also
not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss and does not
give rise to equal taxable and deductible temporary differences. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in foreign operations where the Group is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets
and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis,
or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
3
Critical accounting estimates and judgements
The preparation of annual financial statements requires the use of accounting estimates which, by definition, will seldom
equal the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances.
The areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially
adjusted due to estimates and assumptions turning out to be wrong are as follows:
i)
Estimated Goodwill impairment
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount
of the cash-generating units (CGUs) is determined based on value-in-use calculations which require the use of
assumptions. The calculations use cash flow projections based on financial budgets approved by management
covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth
rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which
each CGU operates.
67
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
3
Critical accounting estimates and judgements (continued)
ii)
Valuation of biological assets
In measuring the fair value of livestock and standing crop, various management estimates and judgements are
required.
Estimates and judgements in determining the fair value of livestock relate to market prices, average weight and
quality of animals, and mortality rates. The livestock grow at different rates and there can be a considerable spread
in the quality and weight of animals that affects the price achieved. An average weight is assumed for the animals
based on a sample deemed to be representative of the total population per breed and genetic merit.
For standing crop, the most significant estimate relates to management’s assessment of anticipated yield per
hectare and and adjustment related to the crops rate of growth. This assessment considers historic yields, climate
conditions and prices.
iii)
Estimation of 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.
iv)
Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The
Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based
on the Group’s past history and existing market conditions, as well as forward-looking estimates at the end of each
reporting period. Details of the key assumptions and inputs used are disclosed in Note 4(b).
4
Financial risk management
The Group’s risk management is predominantly controlled by a central treasury department (group treasury) under
policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close co-
operation with the Group’s operating units. The Board provides written principles for overall risk management, as well
as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial
instruments and non-derivative financial instruments, and investment of excess liquidity.
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:
Increase in the retail footprint 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.
•
•
•
68
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
The Group’s exposure to foreign currency risk, primarily with respect to the United States Dollar (US$), at the end of the
reporting period, expressed in Zambian Kwacha is detailed in the table below.
As at 30 September 2023
Cash and cash equivalents
Trade and other receivables
Financial liabilities:
Bank overdrafts
Bank loans
Trade and other payable
Lease liabilities
Net exposure
As at 30 September 2022
Financial assets:
Cash and cash equivalents
Trade and other receivables
Financial liabilities:
Bank overdrafts
Bank loans
Trade and other payables
Lease liabilities
Net exposure
Sensitivity
Group
US$
K’000
206,659
132,927
339,586
(40,633)
(148,720)
(376,590)
(8,512)
(574,455)
Company
US$
K’000
198,455
68,581
267,036
(40,321)
(148,720)
(256,662)
(8,303)
(454,006)
(234,869)
(186,970)
2,658
75,841
78,499
(11,577)
(24,754)
(88,858)
(7,127)
(132,316)
1,801
57,493
59,294
(11,561)
(24,754)
(88,858)
(7,127)
(132,300)
(53,817)
(73,006)
At 30 September 2023, if the Zambian Kwacha had weakened/strengthened by 10% (2021: 10%) against the United States
Dollar (US$) with all other variables held constant, the effect on post-tax profit for the year and shareholders’ equity would
follows:
have
been
as
Impact on profit and equity
Group
Company
2023
K’000
23,487
2022
K’000
5,382
2023
K’000
18,697
2022
K’000
7,301
69
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
a)
Market risk (continued)
ii)
Cash flow and fair value Interest rate risk
The Group’s main interest rate risk arises from borrowings with variable rates, which expose the Group to cash
flow interest rate risk. To manage the risks, 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
reviews economic conditions relating to such variable benchmarks and is allowed to consider alternate debt
structures where the need may arise.
The exposure of the Group’s borrowings to interest rate changes at the end of the reporting period are as
follows:
% of total
loans
2023
K’000
% of total
loans
2022
K’000
Group
Variable rate borrowings
1,073,911
65%
647,547
68%
Company
Variable rate borrowings
884,232
60%
459,891
60%
The percentage of total loans shows the proportion of loans that are currently at variable rates in relation to
the total amount of borrowings.
As at 30 September 2023, with all other variables held constant, a 5 % (2022: 5%) decrease/increase in the
base interest rate would have resulted in change in post-tax profit for the year and shareholders’ equity as
follows:
Group
Company
2023
K’000
2,657
2022
K’000
1,475
2023
K’000
2,353
2022
K’000
1,184
Impact on profit and equity
IBOR reforms
During the year, the Group repaid all outstanding loans and renewed both short-term working capital
facilities and long-term debt based on the SOFR rate. There were no long-term facilities transitioned from
LIBOR to SOFR to warrant an assessment of debt modifications or extinguishments.
iii)
Price risk
The Group does not hold any financial instruments subject to price risk (2022: Nil).
b)
Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well
as credit exposures to outstanding receivables.
70
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
b)
Credit risk (continued)
i)
Risk management
For banks and financial institutions, the Group only maintains accounts in reputable well-established
financial institutions. Through selective granting of credit, the Group’s risk control unit assesses the credit
quality of the customer, taking into account its financial position, past experience and other factors. The
Group does not grade the credit quality of receivables. Individual risk limits are set based on internal ratings
in accordance with limits set by the Board. The utilisation of credit limits is regularly monitored.
Sales to retail customers are required to be settled in cash mitigating credit risk. There are no significant
concentrations of credit risk, whether through exposure to individual customers, specific industry sectors
and/or regions. The Directors believe the credit risk of trade receivables is low.
ii)
Security
The Group does not obtain security on outstanding trade receivables
iii)
Impairment of financial assets
The Group has three types of financial assets that are subject to the expected credit loss model:
•
•
•
trade receivables
Cash and cash equivalents
Other financial assets at amortised cost
Trade receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics and the days past due. The Group’s historical credit loss
experience does not show significantly different loss patterns for the various customer segments. Therefore, the
grouping of trade receivables is not disaggregated into further risk profiles other than days past due.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before 30 September
2023 and the corresponding historical credit losses experienced within this period. The historical loss rates are
adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the
customers to settle the receivables. The Group has identified the inflation and interest rates of the countries in
which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates
based on expected changes in these factors.
The outstanding trade receivables subjected to expected credit loss calculation are net of debtors where there is a
legal right to offset.
There were no changes in the estimation techniques or significant assumptions made as at the reporting period.
The amount that best represents the Company’s maximum exposure to credit risk is the carrying value of its financial
assets as presented in the statement of financial position.
71
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
b)
Credit risk (continued)
On that basis, the loss allowance as at 30 September 2023 and 30 September 2022 was determined as follows for
trade receivables:
30 September 2023
Current
31 -60
61 – 90
Over 90
days past due
days past due
days past due
Group
Gross carrying amount
Expected loss rate
Loss allowance
Amortised cost
Company
Gross carrying amount
Expected loss rate
Loss allowance
Amortised cost
30 September 2022
Group
Gross carrying amount
Right to offset balances
Expected loss rate
Loss allowance
Other allowance
Amortised cost
Company
Gross carrying amount
Right to offset balances
Expected loss rate
Loss allowance
Other allowance
Amortised cost
K’000
97,094
97,094
10.2%
(9,908)
87,186
35,689
35,689
16.1%
(5,746)
29,943
Current
K’000
120,034
(16,667)
103,367
5.0%
(5,168)
(13,769)
84,430
46,112
(16,667)
29,445
7%
(2,061)
(6,272)
21,112
K’000
7,171
7,171
15.0%
(1,076)
6,095
482
482
89.9%
(433)
49
K’000
1,121
1,121
65.0%
(729)
392
125
125
100%
(125)
-
K’000
8,348
8,348
90%
(7,513)
835
4,349
4,349
100%
(4,349)
-
31 -60
days past due
K’000
5,871
-
5,871
7.0%
(411)
-
5,460
61 – 90
days past due
K’000
793
-
793
61%
(484)
-
309
Over 90
days past due
K’000
10,867
-
10,867
90%
(9,780)
-
1,087
2,072
-
2,072
26%
(539)
-
1,533
220
-
220
100%
(220)
-
0
5,387
-
5,387
100%
(5,387)
-
0
Total
K’000
113,734
113,734
(19,226)
94,508
40,645
40,645
(10,653)
29,992
Total
K’000
137,565
(16,667)
120,898
(15,843)
(13,769)
91,286
53,791
(16,667)
37,124
(8,207)
(6,272)
22,645
The loss allowances for trade receivables as at 30 September reconcile to the opening loss allowances as follows:
At start of year
Charge recognised in profit or loss
Utilised
Group
2023
K’000
29,612
2,713
(13,099)
19,226
2022
K’000
11,743
17,869
-
29,612
Company
2023
K’000
14,479
1,768
(5,594)
10,653
2022
K’000
6,603
7,876
-
14,479
72
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
b)
Credit risk (continued)
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan
with the Group, and a failure to make contractual payments for a period of greater than 90 days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent
recoveries of amounts previously written off are credited against the same line item.
The loss allowance recognised is categorised as follows:
Performing debtors
Non-performing debtors - over 90 days
Cash and cash equivalents
Group
Company
2023
K’000
11,713
7,513
2022
K’000
6,065
23,547
2023
K’000
6,304
4,349
2022
K’000
8,198
6,281
19,226
29,612
10,653
14,479
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment
loss was immaterial.
Other financial assets at amortised cost
Other financial assets at amortised cost relate to receivables from related parties, staff debtors, and sundry debtors.
All of the Group’s other financial assets at amortised cost are considered to have a low risk of default and the debtors
have a strong capacity to meet their contractual cash flow obligations in the near term.
c)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Prudent liquidity
risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due and to close out market
positions. Due to the dynamic nature of the underlying businesses, Group treasury maintains flexibility in funding by
maintaining availability under committed credit lines.
Management monitors rolling forecasts of the group’s liquidity reserve (comprising the undrawn borrowing facilities
below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in
the operating companies of the Group, in accordance with practice and limits set by the Group. These limits vary by
location to take into account the liquidity of the market in which the entity operates.
In addition, the Group’s liquidity management policy involves projecting cash flows in major currencies and considering
the level of liquid assets necessary to meet these, monitoring financial position liquidity ratios against internal and
external regulatory requirements and maintaining debt financing plans.
73
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
c)
Liquidity risk (continued)
i)
Financing arrangements
The Group had access to the following undrawn borrowing facilities (Bank loans and overdrafts) at the
end of the reporting period:
Group
2023
K’000
2022
K’000
Company
2023
K’000
2022
K’000
Floating rate
Expiring within one year
2,574
1,475
2,280
1,184
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.
Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in
a denominated currency and have an average maturity of 1 years (2022:1 years).
ii)
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.
Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
At 30 September 2023
Group
Trade and other payables*
Borrowings
Lease liabilities
Company
Trade and other payables*
Borrowings
Lease liabilities
At 30 September 2022
Group
Trade and other payables*
Borrowings
Lease liabilities
Company
Trade and other payables*
Borrowings
Lease liabilities
Less than 1
year
K’000
Between 1
and 2 years
K’000
Between
2 and 5
years
K’000
Over
5 years
Total
contractual
cash flows
820,902
972,827
2,038
1,795,767
495,035
783,148
759
1,278,942
612,842
525,325
7,094
1,145,261
362,760
337,669
5,790
706,219
-
95,948
17,172
113,120
-
95,948
14,244
110,192
-
55,732
6,453
62,185
-
55,732
5,225
60,957
-
106,533
5,936
112,469
-
106,533
-
106,533
-
370,490
5,791
376,281
-
370,490
-
370,490
-
485,198
6,005
491,203
-
485,198
-
485,198
-
-
7,991
7,991
-
-
-
820,902
1,660,506
31,151
2,512,559
495,035
1,470,827
15,003
1,980,865
612,842
951,547
27,329
1,591,718
362,760
763,891
11,015
1,137,666
*Trade and other payables exclude statutory liabilities as these are imposed by law and therefore do not meet
the definition of financial instruments.
74
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
d)
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:
•
•
•
•
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;
wild and domestic animal conflicts and crop raiding and;
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.
e)
Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that
they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may
adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets
to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio which is calculated
as Net debt divided by Total ‘equity’ (as shown in the statement of financial position).
During 2023, the Group’s strategy, which was unchanged from prior year, was to maintain a gearing ratio of less
than 70%.The gearing ratio is not part of the contractual debt covenants imposed by the lenders. Therefore, there
is no adverse financing implications on the Group in the event that the ratio deteriorates. The gearing ratios at 30
September 2023 and 30 September 2022 were as follows:
Net debt (Note 29 (ii)
Total equity attributable to parent
Group
Company
2022
K’000
1,411,353
4,683,757
2021
K’000
745,217
3,693,331
2022
K’000
1,274,662
4,134,947
2021
K’000
637,974
3,268,010
Gearing ratio
30%
20%
31%
19%
75
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
f)
Fair value measurements
This note explains the judgements and estimates made in determining the fair values of the non-financial assets
and liabilities that are recognised and measured at fair value in the financial statements. As at the end of the
reporting period, the Group had no financial instruments measured at fair value. To provide an indication about the
reliability of the inputs used in determining fair value, the Group has classified its non-financial assets and liabilities
into the three levels prescribed under the accounting standards as below:
•
•
•
Level 1: The fair value of non-financial instruments traded in active markets is based on quoted market prices
at the end of the reporting period;
Level 2: The fair value of non-financial instruments that are not traded in an active market is determined
using valuation techniques that maximise the use of observable market data and rely as little as possible
on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2;
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3.
At 30 September 2023
Group
Non-financial assets:
Property plant and equipment
Biological assets
Company
Non-financial assets:
Property plant and equipment
Biological assets
At 30 September 2022
Group
Non-financial assets:
Property plant and equipment
Biological assets
Company
Non-financial assets:
Property plant and equipment
Biological assets
Level 1
K’000
Level 2
K’000
Level 3
K’000
Total
K’000
-
-
-
-
-
-
-
-
-
-
-
-
-
4,818,533
408,398
-
4,818,533
408,398
408,398
4,818,533
5,226,931
-
3,595,380
3,595,380
355,758
355,758
-
3,595,380
355,758
3,951,138
320,696
3,167,000
-
3,167,000
320,696
320,696
3,167,000
3,487,696
-
2,181,612
269,653
-
2,181,612
269,653
269,653
2,181,612
2,451,265
There were no transfers between the levels for recurring fair value measurements during the year.
76
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
4
Financial risk management (continued)
f)
Fair value measurements (continued)
Property, plant and equipment
Level 3 fair values were derived using comparable value of similar items of property, plant and equipment and
adjusted for differences in key attributes such as property size and condition. Depreciated replacement cost
approach was used for specialized buildings, furniture and fittings, motor vehicles and office equipment.
The best evidence of fair value is current prices in an active market for similar properties. Where such information
is not available the directors consider information from a variety of sources including current prices in an active
market for properties of a different nature or recent prices of similar properties in less active markets, adjusted to
reflect those differences.
Biological assets
Biological assets are measured at fair value less cost to sell. Refer to Note 3(ii) for further information on the inputs
used in determining the fair value.
g)
Financial instruments by category
Financial assets at amortised cost
Trade and other receivables (excluding
prepayments)
Cash and cash equivalents
Financial liabilities at amortised cost
Borrowings
Lease liabilities
Trade and other payables (excluding
statutory liabilities)
Group
2023
K’000
2022
K’000
Company
2023
K’000
2022
K’000
198,078
271,222
131,056
223,973
809,756
209,854
723,976
136,149
469,300
355,029
1,019,610
860,125
1,660,506
22,070
951,547
17,643
1,470,827
13,689
763,891
10,232
812,764
612,842
486,148
362,760
2,495,340
1,582,032
1,970,664
1,136,883
77
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
5
Segment reporting
The Group’s Chief Operating Decision Makers (CODMs), (consisting of the Chief Executive Officer and the Chief Financial
Officer), examine the Group’s performance both from a product and geographic perspective and has identified two
reportable segments of its business as shown in the table below.
During the year, individual segments ((beef, chicken, pork, fish, dairy products, day-old chicks and stockfeed) have been
aggregated into one reportable segment, Retailing and Food production, as they have similar average gross margins and
similar expected growth rates. The same applies to the Cropping and milling segment.
•
•
Retailing and cold chain food products: This part of business sells cold food chain products which are mainly beef,
chicken, pork, fish, milk, leather and dairy products as well as sale of day-old chicks and stockfeed.
Cropping and milling: This part of business sells wheat, soya and maize grain as well as flour mill and bread.
The CODMs primarily use a measure of gross profit to assess the performance of the operating segments.
Operating costs, interest income, finance cost and assets are not allocated to segments, as these activities are
driven by the central treasury function, which manages the cash position of the Group. There is no single customer
of the Group making up 10% of revenue.
i)
Segment revenue from contracts with customers
The Group derives revenue from the transfer of goods at a point in time by operating segment as follows:
Group
2023
Segment revenue
Inter-segment eliminations
External revenue
Gross profit
2022
Segment revenue
Inter-segment eliminations
External revenue
Gross profit
Company
2023
Segment revenue
Gross profit
2022
Segment revenue
Gross profit
Retailing and Cold
Chain Food Products
K’000
3,579,502
(869,521)
2,709,981
969,955
3,138,305
(689,431)
2,448,874
716,420
Retailing and Cold
Chain Food Products
K’000
1,214,438
209,142
1,103,568
292,687
Cropping
& Milling
K’000
3,799,233
(463,057)
3,336,176
873,307
3,369,186
(423,299)
2,945,887
916,766
Cropping
& Milling
K’000
2,169,970
697,358
2,257,860
580,551
Total
K’000
7,378,735
(1,332,578)
6,046,157
1,843,262
6,507,491
(1,112,730)
5,394,761
1,633,186
Total
K’000
3,384,408
906,500
3,361,428
873,238
78
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
5
Segment reporting (continued)
i)
Segment revenue (continued)
Group
2023
Gross profit by segment
Other income/(expenses)
Distribution and administrative expenses
Operating profit
2022
Gross profit by segment
Other income/(expenses)
Distribution and administrative expenses
Impairment of goodwill
Operating profit
Company
2023
Gross profit by segment
Other income/(expenses)
Distribution and administrative expenses
Operating profit
2022
Gross profit by segment
Other income/(expenses)
Distribution and administrative expenses
Impairment of goodwill
Impairment of investment in subsidiaries
Operating profit
Retailing and
Cold Chain Food
Products
K’000
969,955
(11,848)
(833,458)
124,649
716,420
(34,267)
(628,683)
(141,786)
(88,316)
209,142
(8,080)
(173,418)
27,644
292,687
2,835
(217,726)
-
(141,786)
(63,990)
Group
Operating profit
Unallocated:
Share of loss from equity investment
Net finance income and costs
Profit/(loss) before income tax
2023
K’000
361,357
(2,595)
(155,089)
203,673
2022
K’000
173,664
(3,503)
(114,997)
55,164
Cropping
& Milling
K’000
873,307
(37,284)
(599,315)
236,708
916,766
18,889
(673,675)
-
261,980
697,358
(11,752)
(569,353)
116,253
580,551
6,614
(508,027)
-
-
79,138
Total
K’000
1,843,262
(49,132)
(1,432,773)
361,357
1,633,186
(15,378)
(1,302,358)
(141,786)
173,664
906,500
(19,832)
(742,771)
143,897
873,238
9,449
(725,753)
-
(141,786)
15,148
Company
2023
K’000
143,897
2022
K’000
15,148
(2,595)
(123,921)
(3,503)
(87,475)
17,381
(75,830)
79
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC 5
Segment reporting (continued)
ii)
Segment assets and liabilities
The Group’s assets and liabilities are not allocated to each segment. However, the CODMs review information
regarding the operating assets and liabilities of the main reporting entities within the Group as shown in the table
below.
For the purpose of allocating assets and liabilities, the ‘Other’ segment comprises of the foreign subsidiaries
(Master Meats Nigeria and Ghana), Zamleather Limited, Zamchick Limited and Zamhatch
As at 30 September 2023
Total assets
Total liabilities
As at 30 September 2022
Total assets
Total liabilities
6
Other income/(expenses)
Rental income
Management fees
Loss on disposal of fixed assets
Exchange losses on working capital
Company
Retailing Ltd
Masterpork
K’000
K’000
K’000
Other
K’000
Total
K’000
5,708,592
2,311,433
585,919
427,308
142,380
39,258
1,268,097
259,049
7,704,988
3,037,048
4,181,638
1,285,576
824,979
258,337
256,869
190,320
567,634
241,737
5,831,120
1,975,970
Group
Company
2023
K’000
3,859
21,242
(7,756)
(63,764)
(46,419)
2022
K’000
6,069
-
(29,386)
25,808
2,491
2023
K’000
2,828
21,242
1,040
(43,174)
(18,064)
2022
K’000
5,339
-
(21,772)
33,758
17,325
80
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
7
Breakdown of expenses by nature
Group
Company
Cost of sales of goods:
Changes in inventory – Finished goods
Production and overhead costs
Fuel expenses
Transport
Veterinary
Other miscellaneous expenses
Distribution expenses:
Employee benefits expense (Note 9)
Depreciation
Repairs and maintenance
Levies and licenses
Transport
Insurance
Satellite
Travel
Other
Administrative expenses:
Depreciation
Employee benefits expense (Note 9)
Legal and other professional fees
Directors’ remuneration
Auditors’ remuneration
Repairs and maintenance
Water and electricity
Other miscellaneous expenses
2023
K’000
3,739,698
154,847
67,136
25,341
19,365
839,705
4,846,092
34,880
23,310
6,123
9,171
19,285
116
479
478
2,445
96,287
124,724
683,333
24,337
15,569
4,181
137,165
89,531
257,646
1,336,486
2022
K’000
3,055,812
177,254
41,151
7,813
15,459
813,548
4,111,037
29,447
16,612
4,735
6,483
1,682
1,022
696
701
4,218
65,596
92,636
638,489
24,639
13,648
3,300
118,256
72,532
273,262
1,236,762
2023
K’000
1,948,055
158,847
65,369
25,341
13,600
835,671
3,046,883
2022
K’000
1,769,768
177,254
41,151
7,813
16,708
813,548
2,826,242
-
-
-
-
1,302
-
-
-
-
1,302
73,881
386,982
18,575
2,161
4,181
83,693
57,889
114,107
741,469
-
-
-
-
67,118
-
-
-
-
67,118
56,565
360,683
19,012
13,648
3,300
66,182
43,592
95,653
658,635
Total expenses
6,278,865
5,413,395
3,789,654
3,551,995
8
Finance income and costs
Finance income:
Exchange gains on borrowings (Note 29(ii)
Exchange gains on leases (Note 29(ii)
Finance costs:
Interest expense on bank overdrafts
Interest expense on borrowings (Note 29(ii)
Interest expense on leases (Note 29(ii)
Exchange losses on borrowings
Exchange losses on leases
Group
2023
-
-
-
(87,323)
(44,646)
(2,462)
(134,431)
(18,812)
(1,846)
(20,658)
2022
3,188
353
3,541
(63,252)
(53,473)
(1,813)
(118,538)
-
-
-
Company
2023
-
-
-
(57,471)
(44,646)
(1,312)
(103,429)
(18,812)
(1,680)
(20,492)
2022
3,188
346
3,534
(36,752)
(53,473)
(784)
(91,009)
-
-
Net finance income and costs
(155,089)
(114,997)
(123,921)
(87,475)
81
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC 9
Employee benefit expense
Salaries and other staff costs
Retirement benefits costs:
Social security costs
Pension costs
Allocated as:
Distribution expenses
Administrative expenses
10
Income tax expense
Group
2023
K’000
644,317
2,718
28,745
42,433
718,213
34,880
683,333
718,213
2022
K’000
571,910
49,207
46,819
667,936
29,447
638,489
667,936
Company
2023
K’000
380,033
3,347
12,488
395,868
2022
K’000
331,662
14,668
14,353
360,683
-
395,868
395,868
-
360,683
360,683
This note provides an analysis of the Group’s income tax expense and how the tax expense is affected by non-assessable
and nondeductible items.
Current income tax charge
Deferred income tax credit (Note 25)
Group
2023
K’000
92,567
(19,716)
72,851
2022
K’000
73,333
(5,639)
67,694
Company
2023
K’000
32,906
(17,202)
15,704
2022
K’000
27,029
5,181
32,210
i)
Numerical reconciliation of income tax expense to prima facie tax payable
Applicable tax rates range from 10% to 30% depending on the activities of the entities within the Group.
The tax on the Group and Company’s profit before income tax differs from the theoretical amount that would arise
using the statutory income tax rate as follows:
Profit before income tax from:
Continuing operations
Discontinued operations
Group
2023
K’000
203,673
(10,604)
193,069
2022
K’000
55,164
44,108
99,272
Company
2023
K’000
17,381
(10,604)
6,777
2022
K’000
(75,830)
44,108
(31,722)
Tax at rate of 10% (2022: 10%)
19,307
9,927
678
(3,172)
Tax effects of:
Expenses not deductible for tax purposes
Effect of difference in tax rates
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operation
48,257
5,287
45,988
11,779
12,784
2,242
35,382
-
72,851
67,694
15,704
32,210
72,851
-
72,851
63,283
4,411
67,694
15,704
-
15,704
27,799
4,411
32,210
82
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
10
Income tax expense (continued)
ii)
Movement in current income tax on the statement of financial position
Group
Company
At start of year
Current income tax charge
2023
K’000
38,520
92,567
2022
K’000
10,064
73,333
Payments made during the year
(88,323)
(44,877)
2023
K’000
14,681
32,906
(34,233)
2022
K’000
(2,520)
27,029
(9,828)
At end of year
42,764
38,520
13,354
14,681
iii)
Analysis of tax losses
During the year, the Group carried forward tax losses of K358.8 million (2022: 275.4 million). Unutilised losses expire
after 5 years as shown in the table below:
Period end
Tax loss c/f
Expiry date
30 September 2019
30 September 2020
30 September 2021
30 September 2022
30 September 2023
Total
K’000
17,486
5,327
37,549
1,986
296,505
358,853
30 September 2024
30 September 2025
30 September 2026
30 September 2027
30 September 2028
83
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
11
Property, plant and equipment
Group
Right of use
assets Buildings
Plant
and
machinery
Motor
vehicles
Furniture
and
equipment
K’000
93,729
(1,941)
91,788
91,788
9,924
-
As at 30 September 2021
K’000
K’000
K’000
Cost or fair value
1,595,928
722,203
685,643
Accumulated depreciation
Net book value
(40,137)
(3,252)
1,555,791
718,951
(4,144)
681,499
Year ended 30 September 2022
Opening net book value
1,555,791
718,951
681,499
Additions – PPE
Additions – ROU
Transfers
Disposals -cost
Disposals-accumulated
depreciation
Derecognised - cost
Derecognised – accumulated
depreciation
Depreciation charge
Exchange differences
-
-
-
-
4,071
15,075
-
968
-
15,953
(15,234)
93,300
24,116
(5,329)
(1,096)
770
2,967
(24,963)
9,985
-
-
-
-
6
-
-
(10,991)
(16,034)
(61,095)
(24,385)
-
(9,744)
(12,837)
(57)
Capital
work in
progress
K’000
Total
K’000
26,117
3,165,590
-
(50,572)
26,117
3,115,018
K’000
41,970
(1,098)
40,872
40,872
26,117
3,115,018
3,492
203,680
222,135
-
8,177
(49)
-
15,075
(141,546)
-
(7,550)
(29,258)
5
-
-
(9,577)
(20)
-
-
-
-
-
3,748
(24,963)
9,985
(122,082)
(22,658)
Net book value
1,544,897
698,733
699,473
100,296
42,900
80,701
3,167,000
As at 30 September 2022
Cost or fair value
1,586,040
717,249
761,745
126,616
53,570
80,701
3,325,921
Accumulated depreciation
(41,143)
(18,516)
(62,272)
(26,320)
(10,670)
-
(158,921)
Net book value
1,544,897
698,733
699,473
100,296
42,900
80,701
3,167,000
Assets classified as capital work in progress mainly relate to the costs incurred for the ongoing farm expansion projects at the
Group’s locations.
84
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
11
Property, plant and equipment (continued)
Group
Right of
use assets Buildings
Plant
and
machinery
As at 30 September 2022
Cost or fair value
K’000
1,586,040
K’000
717,249
K’000
761,745
Motor
vehicles
K’000
126,616
Accumulated depreciation
(41,143)
(18,516)
(62,272)
(26,320)
Net book value
1,544,897
698,733
699,473
100,296
Furniture
and
equipment
K’000
53,571
(10,671)
42,900
Capital
work in
progress
K’000
Total
K’000
80,701
3,325,922
-
(158,922)
80,701
3,167,000
Year ended 30 September 2023
Opening net book value
1,544,897
698,733
699,473
100,296
Additions - PPE
-
-
163,008
77,552
42,900
26,884
80,701
3,167,000
483,239
750,683
Additions - Borrowing cost
-
4,928
13,512
10,916
-
-
-
-
-
-
48,172
-
66,612
10,916
2,909
92,681
148,982
-
-
(244,572)
-
Additions - ROU
Transfers
Reclassification of ROU
Revaluation surplus
Disposals -cost
Disposals-accum dep
Derecognised - cost
Derecognised – accum dep
Impairment of assets
Depreciation charge
Exchange differences
(10,050)
1,003,412
-
-
(4,139)
2,075
-
-
-
-
-
-
-
-
10,050
-
-
-
-
-
(3,729)
(1,422)
(54)
705
525
-
-
(5,925)
-
-
-
11
-
-
(281)
(12,566)
(2,035)
(6,095)
(17,225)
(88,096)
(35,622)
(2,952)
(1,891)
(1,261)
(113)
-
-
-
-
-
-
-
-
-
-
1,003,412
(5,205)
1,241
(4,139)
2,075
(6,206)
(159,604)
(8,252)
Net book value
2,540,973
777,226
936,719
141,216
54,859
367,540
4,818,533
As at 30 September 2023
Cost or fair value
2,586,136
812,967
1,086,382
202,633
78,084
367,540
5,133,742
Accumulated depreciation
(45,163)
(35,741)
(149,663)
(61,417)
(23,225)
-
(315,209)
Net book value
2,540,973
777,226
936,719
141,216
54,859
367,540
4,818,533
Assets classified as capital work in progress mainly relate to the costs incurred for the ongoing farm expansion projects at the
Group's locations.
85
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC 11
Property, plant and equipment (continued)
Company
Right of
use assets
Buildings
Plant
and
machinery
As at 30 September 2021
K’000
K’000
K’000
Cost or fair value
1,255,326
522,149
351,309
Accumulated depreciation
(12,386)
-
-
Motor
vehicles
K’000
22,592
-
Furniture
and
equipment
Capital
work in
progress
Total
K’000
19,623
-
K’000
K’000
7,870
2,178,869
-
(12,386)
Net book value
1,242,940
522,149
351,309
22,592
19,623
7,870
2,166,483
22,592
2,010
-
3,263
(101)
Year ended 30 September
2022
Opening net book value
1,242,940
522,149
351,309
Additions
Additions - ROU
Transfers
Disposals-cost
Disposals-accumulated
depreciation
-
1,440
10,156
-
3,711
-
3,804
55,812
(215)
(30,292)
-
-
-
2,196
6
Depreciation charge
(9,368)
(7,361)
(30,903)
(4,752)
Exchange differences
-
(10,963)
(2,081)
Net book value
1,243,728
508,854
349,752
As at 30 September 2022
Cost or fair value
1,265,482
516,215
378,459
Accumulated depreciation
(21,754)
(7,361)
(28,707)
Net book value
1,243,728
508,854
349,752
(57)
22,961
27,707
(4,746)
22,961
19,623
7,870
2,166,483
590
102,107
109,858
-
-
10,156
2,920
(65,799)
-
(3)
(6,792)
(37,403)
1
(4,181)
(19)
-
-
-
2,203
(56,565)
(13,120)
18,931
37,386
2,181,612
23,111
37,386
2,248,360
(4,180)
-
(66,748)
18,931
37,386
2,181,612
Assets classified as capital work in progress mainly relate to the costs incurred for the ongoing farm expansion projects at the
Company’s locations.
86
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
11
Property, plant and equipment (continued)
Company
As at 30 September 2022
Cost or fair value
Right
of use
assets
K’000
1,265,482
Land and
buildings
Plant
and
machinery
K’000
516,215
K’000
378,459
Accumulated depreciation
(21,754)
(7,361)
(28,707)
Net book value
1,243,728
508,854
349,752
Motor
vehicles
K’000
27,707
(4,746)
22,961
Furniture
and
equipment
K’000
23,111
(4,180)
18,931
Capital
work in
progress
K’000
Total
K’000
37,386 2,248,360
-
(66,748)
37,386
2,181,612
Year ended 30 September 2023
Opening net book value
1,243,728
508,854
349,752
Additions – PPE
Additions -ROU
Transfers
-
9,023
-
-
240,915
-
-
41,441
8,032
Revaluation surplus
ROU asset transfer – cost
977,426
(32,260)
ROU asset transfer – depreciation
22,210
-
-
-
-
-
-
-
32,260
(22,210)
(601)
(3,729)
705
-
-
-
22,961
15,097
-
409
-
-
-
-
(73)
18
Impairment of assets
Disposals-cost
Disposals-accumulated
depreciation
Depreciation charge
Net book value
As at 30 September 2023
(2,683)
(7,634)
(49,287)
2,217,444
542,661
555,837
(9,204)
29,208
(5,073)
23,659
18,931
9,919
37,386
2,181,612
239,067
504,998
-
-
-
-
-
(86)
(39)
7
-
9,023
(49,882)
-
-
-
-
-
-
-
-
977,426
-
-
(687)
(3,841)
730
(73,881)
226,571 3,595,380
Cost or fair value
2,219,671
557,656
655,336
43,140
Accumulated depreciation
(2,227)
(14,995)
(99,499)
(13,932)
Net book value
2,217,444
542,661
555,837
29,208
32,905
(9,246)
23,659
226,571
3,735,279
-
(139,899)
226,571 3,595,380
Assets classified as capital work in progress mainly relate to the costs incurred for the ongoing farm expansion projects at the
Company’s locations.
The register showing the details of property as required by Section 30 of the Companies Act, 2017 of Zambia is available during
the business hours at the registered office of the Group.
87
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
11
Property, plant and equipment (continued)
i)
Non-current assets pledged as security
All assets disclosed are pledged as security on the Group’s borrowings for each reporting period and title is
restricted. The Group had no contractual commitments for the acquisition of property, plant and equipment and no
amount of compensation from third parties for items of property, plant and equipment that were impaired, lost or
given up that is included in profit or loss.
ii)
Carrying amounts that would have been recognised if assets were stated at cost
If items of property, plant and equipment were stated on the historical cost basis, the amounts would be as follows:
Group
2023
K’000
2022
K’000
Cost
2,711,567
1,877,967
Accumulated depreciation
(1,173,314)
(1,008,426)
1,538,253
869,541
Right of use assets
Company
2023
K’000
1,865,193
(977,188)
888,005
2022
K’000
1,360,195
(903,307)
456,888
Included in the net carrying amount of property, plant and equipment are right-of-use assets relating to prepaid
plant and machinery and buildings.
In Zambia, land is held on lease from the Government of the Republic of Zambia for a period of 99 years. IFRS 16
requires that for any lease, a right of use asset and lease liability be recognised unless the Group deems the lease
as short-term lease or of low value.
Advance payments made in acquiring the land are added to right of use assets and amortised over the period of
the lease on a straight-line basis and therefore there is no corresponding lease liability. The effect of discounting
the ground rates is immaterial and these have been expensed to profit or loss as incurred. As at the end of the
reporting period, and unchanged from prior year, the Company had insignificant leasing arrangements. Therefore,
the Company has taken the exemption under the standard, and these have been expensed to profit or loss as
incurred. Lease agreements do not impose any covenants other than the security interests in the leased assets
that are held by the lessor.
Leasehold land is initially recognised at cost and subsequently shown at fair value, based on valuations by external
independent valuers, less accumulated depreciation and impairment losses, and adjusted for any remeasurement
of lease liabilities.
88
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
11
Property, plant and equipment (continued)
Right of use assets (continued)
The movement in the right of use assets is as presented in the note property, plant and equipment.
Group
As at 30 September 2021
Cost or fair value
Accumulated depreciation
Net book value
Year ended 30 September 2022
Opening net book value
Additions - ROU
Derecognised - cost
Derecognised - accumulated depreciation
Depreciation charge
Net book value
Year ended 30 September 2023
Opening net book value
Additions - ROU
Transfers
Revaluation surplus
Reclassification from ROU
Derecognised - cost
Derecognised - accumulated depreciation
Depreciation charge
Exchange differences
Net book value
As at 30 September 2023
Cost or fair value
Accumulated depreciation
Net book value
Leasehold
Land
Buildings
Plant
and machinery
1,512,508
-
1,512,508
1,512,508
-
-
-
-
1,512,508
1,512,508
-
-
1,003,412
-
-
-
-
(2,952)
2,512,968
2,512,968
-
2,512,968
23,268
(17,766)
5,502
5,502
4,919
-
-
(1,518)
8,903
8,903
2,104
-
-
-
(4,139)
2,075
(2,023)
-
6,920
26,152
(19,232)
6,920
60,152
(22,371)
37,781
37,781
10,156
(24,963)
9,985
(9,473)
23,486
23,486
8,812
2,909
-
(10,050)
-
-
(4,072)
-
21,085
47,016
(25,931)
21,085
Total
1,595,928
(40,137)
1,555,791
1,555,791
15,075
(24,963)
9,985
(10,991)
1,544,897
1,544,897
10,916
2,909
1,003,412
(10,050)
(4,139)
2,075
(6,095)
(2,952)
2,540,973
2,586,136
(45,163)
2,540,973
89
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC 11
Property, plant and equipment (continued)
Right of use assets (continued)
The movement in the right of use assets is as presented in the note property, plant and equipment.
Company
As at 30 September 2021
Cost or fair value
Accumulated depreciation
Net book value
Year ended 30 September 2022
Opening net book value
Additions - ROU
Depreciation charge
Net book value
As at 30 September 2022
Cost or fair value
Accumulated depreciation
Net book value
Year ended 30 September 2023
Opening net book value
Additions - ROU
Revaluation surplus
Reclassification from ROU
Depreciation charge
Net book value
As at 30 September 2023
Cost or fair value
Accumulated depreciation
Net book value
Leasehold
Land
Buildings
Plant
and machinery
1,220,137
-
1,220,137
1,220,137
-
-
1,220,137
1,220,137
-
1,220,137
1,220,137
-
977,426
-
-
2,197,563
2,197,563
-
2,197,563
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,189
(12,386)
22,803
22,803
10,156
(9,368)
23,591
45,345
(21,754)
23,591
23,591
9,023
-
(10,050)
(2,683)
19,881
22,108
(2,227)
19,881
Total
1,255,326
(12,386)
1,242,940
1,242,940
10,156
(9,368)
1,243,728
1,265,482
(21,754)
1,243,728
1,243,728
9,023
977,426
(10,050)
(2,683)
2,217,444
2,219,671
(2,227)
2,217,444
90
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
12
Leases
The Group leases various offices and retail stores (classified as buildings) and farm and production equipment and trailers
(classified as plant and machinery). Lease agreements do not impose any covenants other than the security interests in
the leased assets that are held by the lessor.
a)
Lease liabilities
Current
Non-current
Group
Company
2023
K’000
6,448
15,622
22,070
2022
K’000
5,046
12,597
17,643
2023
K’000
6,288
7,403
13,691
Refer to Note 29 (ii) for details on the movement in lease liabilities on the statement of financial position.
ii)
Amounts recognised in the statement of profit or loss
Depreciation charge:
Interest expense on lease liabilities
Expense relating to short-term leases
Group
Company
2023
K’000
6,095
2,676
17,929
26,700
2022
K’000
10,451
1,822
20,783
33,056
2023
K’000
2,683
1,312
759
4,754
2022
K’000
4,878
5,354
10,232
2022
K’000
3,495
1,634
8,237
13,366
During the year, there were no expenses relating to low-value assets and variable lease payments recognised
in profit or loss (2022: Nil).
iii)
Maturity analysis of contractual lease payments outstanding
Within 1 year
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
Later than 5 years
Minimum lease payments
Finance charges
Net present value
Group
Company
2023
K’000
2,038
17,172
1,972
1,976
1,988
6,005
31,151
(9,081)
22,070
2022
K’000
7,094
6,453
1,843
1,972
1,976
7,991
27,329
(9,686)
17,643
2023
K’000
759
14,244
-
-
-
-
15,003
(1,312)
13,691
2022
K’000
5,790
5,225
-
-
-
-
11,015
(783)
10,232
The Group did not receive any COVID-19-related rent concessions during the year (2022: Nil).
91
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
13.
Goodwill
Goodwill is monitored by management at the level of the three cash-generating units (CGU). A CGU-level summary of the
goodwill allocation is presented below:
Year ended 30 September 2023
At start of year
Impairment of goodwill
At end of year
Year ended 30 September 2022
At start of year
Impairment of goodwill
At end of year
Masterpork
15,699
-
15,699
Masterpork
15,699
-
15,699
Zamchick
-
-
-
Zamchick
141,786
(141,786)
-
Zamhatch
9,316
-
9,316
Zamhatch
9,316
-
9,316
Total
166,801
(141,786)
25,015
Total
166,801
(141,786)
25,015
The following table sets out the key assumptions for those CGUs that have significant goodwill allocated to them:
Year ended 30 September 2023
Budgeted average operating margins
Discount rates
Long-term growth rate
Year ended 30 September 2022
Budgeted average operating margins
Discount rates
Long-term growth rate
Masterpork
K’000
2%
27.4%
12.0%
2%
22.8%
7.1%
Zamhatch
K’000
17%
27.4%
12.0%
17%
22.8%
10.6%
Management has determined the values assigned to each of the above key assumptions as follows:
•
•
•
Budgeted operating margins: Based on past performance and management’s expectations for the future;
Discount rates: Reflect specific risks relating to the relevant segments and the countries in which they operate;
Long-term growth rate: This is the weighted average growth rate used to extrapolate cash flows beyond the budget
period. The rates are consistent with forecasts included in industry reports.
The sensitivity of Goodwill (excluding the CGU impaired) to changes in the weighted principal assumptions is:
Year ended 30 September 2023
Budgeted average operating margins (-2%)
Discount rates (+1%)
Long-term growth rate (-2%)
Year ended 30 September 2022
Budgeted average operating margins (-2%)
Discount rates (+1%)
Long-term growth rate (-2%)
Masterpork
K’000
(4,038)
(26,149)
(25,925)
(23,048)
(6,501)
(11,083)
Zamhatch
K’000
(242,094)
(378,376)
(275,343)
(38,229)
(9,893)
(19,527)
The recoverable amount of the cash generating unit (CGU) calculated based on value in use exceeded the carrying value
of the net assets as follows:
Year ended 30 September 2023
Masterpork Limited
Zamhatch Limited
92
2023
K’000
98,972
403,441
2022
K’000
66,459
961,654
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
14
Investment in subsidiaries
a) Subsidiaries
The Group’s investments in subsidiaries at 30 September are set out below. Following the impairment of Goodwill
on Zamchick, the Directors were of the view that the investment in the same entity was impaired.
Subsidiary
Investment in subsidiaries
Impairment
Breakdown of investment in subsidiaries
Zambeef Retailing Limited
Zamleather Limited
Master meat (Nigeria) Ltd
Master meat (Ghana) Ltd
Masterpork Limited
Zamchick Limited
Zamhatch Limited
2023
K’000
104,020
-
104,020
2023
K’000
31
1,477
216
1,310
26,601
16,443
57,942
104,020
2022
K’000
245,807
(141,787)
104,020
2022
K’000
31
1,477
216
1,310
26,601
16,443
57,942
104,020
Unless otherwise stated, the entities have share capital consisting solely of ordinary shares that are held directly by
the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country
of incorporation or registration is also their principal place of business.
Name of subsidiary
Place of
incorporation
Ownership
interest
Principal activities
Zambeef Retailing Ltd
Zambia
2023
100%
2022
100% Retailing of Zambeef products
Zamleather Limited
Zambia
100%
100% Processing and sale of leather & shoes
Master meat (Nigeria) Ltd
Nigeria
80%
80% Processing and sale of meat products
Master meat (Ghana) Ltd
Ghana
90%
90% Processing and sale of meat products
Masterpork Limited
Zambia
100%
100% Processing and sale of pork
ZamChick Limited
Zambia
100%
100% Processing and sale of poultry products
Zamhatch Limited
Zambia
100%
100% Chicken breeding, rearing and production of
stockfeed
93
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
14.
Investment in subsidiaries (continued)
a)
Non-controlling interest (NCI)
Nigeria - Master Meat Ltd
Ghana - Master Meat Ltd
Statement of profit or loss
Revenue
Profit for the year
Other comprehensive income
Total comprehensive income
Profit allocated to NCI
Dividends paid to NCI
Statement of financial position
Current assets
Current liabilities
Net current liabilities
Non-current assets
Non-current liabilities
Net non-current assets
2023
K’000
224,925
7,415
-
7,415
1,483
-
25,756
(85,891)
(60,135)
12,182
-
12,182
2022
K’000
238,317
11,895
-
11,895
2,379
-
29,087
(71,989)
(42,902)
30,424
-
30,424
Net (liabilities)/assets
(47,953)
(12,478)
Accumulated NCI
(7,095)
1,638
Statement of cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase in cash
7,415
(417)
-
6,998
11,895
(109)
-
11,786
2023
K’000
42,273
1,227
-
1,227
123
-
5,117
(4,456)
661
659
(153)
506
1,167
259
1,227
(11)
-
1,216
2022
K’000
53,672
470
-
470
47
-
3,435
(5,536)
(2,101)
704
(31)
673
(1,428)
(1,572)
470
(10)
-
460
94
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
15
Investment in associates
Set out below is the associate of the Group as at 30 September 2023 which, in the opinion of the Directors, is material
to the Group. The entity has share capital consisting solely of ordinary shares, which are held directly by the Group. The
country of incorporation or registration is also the entity’s principal place of business, and the proportion of ownership
interest is the same as the proportion of voting rights held.
Entity
Place of
incorporation
Zampalm Limited
Zambia
Ownership interest
Nature of relationship
2023
10%
2022
10%
Associate
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. As at
the end reporting date, the Group had a 10% equity interest in Zampalm Limited. The Group has reasonable influence over
Zampalm Limited as it has representation on the Board of Directors, participates in policy making decisions and provides
essential farming technical information.
The sensitivity of the investment in associate to changes in the weighted principal assumptions is:
Budgeted average operating margins (-2%)
Discount rates (+1%)
Long-term growth rate (-2%)
2023
K’000
11,947
12,577
12,918
2022
K’000
(4,678)
(182)
1,412
If the budgeted gross margin used in the value-in-use calculation for the Investment in associate had been 2% lower than
management’s estimates at year end (4.65% instead of 6.65%), the Group would have had to recognise an impairment
against the carrying amount of Investment in associate of K4.7m (2022: K4.7 million).
The recoverable amount of the investment in associate calculated based on value in use exceeded the carrying value of the
net assets as follows:
Headroom on impairment assessment
2023
K’000
(10,089)
2022
K’000
2,242
The Group had no commitments and contingent liabilities in respect of the associate (2022: Nil).
95
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
15
Investment in associates (continued)
i)
Summarised financial information for associate
The information disclosed below reflects the amounts presented in the annual financial statements of the relevant
associate, Zampalm Limited and not the Group’s share of those amounts.
Statement of profit or loss:
Revenue
Loss from continuing operations
Loss for the year
Other comprehensive income
Total comprehensive income
Statement of financial position:
Non-current assets
Current assets
Total assets
Capital and reserves
Non-current liabilities
Current liabilities
Total equity and liabilities
ii)
Reconciliation of carrying amounts:
At start of year
Share of loss for the year
Share of other comprehensive income
At end of year
2023
K’000
1,791
2022
K’000
2,854
(25,954)
(35,028)
(25,954)
(35,028)
-
-
(25,954)
(35,028)
270,120
10,504
280,624
46,662
209,588
24,374
280,624
36.965
(2,595)
-
34,370
262,279
17,384
279,663
75,609
185,374
18,680
279,663
40,468
(3,503)
-
36,965
96
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
16
Biological assets
The Group’s biological assets comprise standing crops, feedlot cattle, dairy cattle, pigs and chickens.
i)
Analysis by group of biological assets
Group
As at 30 September 2022
At start of year
Standing
crop
K’000
Feedlot
cattle
K’000
Dairy
cattle
K’000
Pigs Chickens
K’000
K’000
Total
K’000
54,585
156,314
71,365
7,618
69,115
358,997
Increase due to purchases
404,645
310,789
1,813
12,977
174,992
905,216
Change in fair value of biological assets:
Due to biological transformation
Due to price changes
292,823
-
292,823
75,124
-
75,124
22,290
-
22,290
4,960
(1,262)
3,698
(42,379)
(2,094)
(44,473)
352,818
(3,356)
349,462
Transfer of harvest to inventory
Decrease due to slaughter/sale
(684,072)
-
-
(427,150)
-
(8,876)
-
(24,293)
-
(148,588)
(684,072)
(608,907)
At end of year
67,981
115,077
86,592
Current
Non-current
67,981
-
67,981
115,077
-
115,077
-
86,592
86,592
As at 30 September 2023
At start of year
67,981
115,077
86,592
Increase due to purchases
453,357
273,635
1,664
Change in fair value of biological assets:
Due to biological transformation
Due to price changes
411,146
-
411,146
113,501
-
113,501
44,328
-
44,328
Transfer of harvest to inventory
Decrease due to slaughter/sale
(823,648)
-
-
(378,653)
-
(9,225)
At end of year
108,836
123,560
123,359
Current
Non-current
108,836
-
108,836
123,560
-
123,560
-
123,359
123,359
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51,046
320,696
51,046
-
51,046
234,104
86,592
320,696
51,046
320,696
69,078
797,734
70,379
3,843
74,222
639,354
3,843
643,197
-
(141,703)
(823,648)
(529,581)
52,643
408,398
52,643
-
52,643
285,039
123,359
408,398
All assets disclosed are pledged as security on the Group’s borrowings for each reporting period and title is
restricted. There were no commitments for the development or acquisition of biological assets.
For standing crops, contributory asset charges have been incorporated into the fair value of the biological assets.
97
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
16
Biological assets (continued)
i)
Analysis of group of biological assets (continued)
Company
As at 30 September 2022
Standing
crop
K’000
Feedlot
cattle
K’000
Dairy
cattle
K’000
Chickens
K’000
Total
K’000
At start of year
54,585
156,314
71,365
25,684
307,948
Increase due to purchases
404,645
310,789
1,813
75,811
793,058
Change in fair value of biological assets:
Due to biological transformation
Due to price changes
292,823
-
292,823
75,124
-
75,124
22,290
-
22,290
(52,186)
-
(52,186)
338,051
-
338,051
Transfer of harvest to inventory
Decrease due to slaughter/sale
(684,072)
-
-
(427,150)
-
(8,876)
-
(49,309)
(684,072)
(485,335)
At end of year
Current
Non-current
As at 30 September 2023
67,981
115,077
86,592
67,981
-
67,981
115,077
-
115,077
-
86,592
86,592
At start of year
67,981
115,077
86,592
Increase due to purchases
453,357
273,635
1,664
Change in fair value of biological assets:
Due to biological transformation
Due to price changes
Transfer of harvest to inventory
Decrease due to slaughter/sale
At end of year
Current
Non-current
411,146
-
411,146
113,501
-
113,501
(823,648)
-
108,836
-
(378,653)
123,560
108,836
-
108,836
123,560
-
123,560
44,328
-
44,328
-
(9,225)
123,359
-
123,359
123,359
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
269,650
183,058
86,592
269,650
269,650
728,656
568,975
-
568,975
(823,648)
(387,878)
355,755
232,396
123,359
355,755
All assets disclosed are pledged as security on the Group’s borrowings for each reporting period and title is
restricted. There were no commitments for the development or acquisition of biological assets.
For standing crops, contributory asset charges have been incorporated into the fair value of the biological assets.
98
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
16
Biological assets (continued)
ii)
Number of hectares and livestock
As at 30 September, the Group had the following number of hectares and livestock
Number of hectares
Standing crop
Number of livestock
Feedlot cattle
Dairy cattle
Chickens
Culled animals
Feedlot cattle
Dairy cattle
Pigs
Chickens
iii)
Key assumptions
Group
2023
1,172
9,612
3,685
220,856
30,462
544
-
4,018,464
2022
5,528
9,036
3,407
229,475
41,039
1,186
5,319
6,753,961
Company
2023
1,172
9,612
3,685
-
30,462
544
-
-
2022
5,528
9,036
3,407
-
41,039
1,186
5,319
328,443
The significant assumptions in the determination of the fair value of biological assets are the average weight per
animal and average yield per hectare for standing crop. The assumptions used for the valuation of the biological
assets are as follows:
Average weight - kg
Bulls
Heifers
Steers
Cows
Average yields per hectare - tons
Wheat
Soya
iv)
Sensitivity
Group
2023
456
322
333
437
6.78
2.79
2022
557
352
480
484
8.0
3.52
Company
2023
456
322
333
437
6.78
2.79
2022
557
352
480
484
8.0
3.52
The sensitivity of the biological assets to changes in the weighted principal assumptions is:
Change in assumption
Average weight (-1%)
Average yields per hectare
(-1%)
Impact on biological assets
Group
Company
2023
K’000
(1,557)
(911)
2022
K’000
(1,510)
(3,843)
2023
K’000
(1,557)
(911)
2022
K’000
(1,510)
(3,843)
99
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
17
Inventory
Trading stocks
Abattoir stocks
Raw materials
Stockfeed
Consumables
Raw hides and chemicals
Group
Company
2023
K’000
565,225
31,700
451,405
439,190
156,707
12,260
1,656,487
2022
K’000
544,345
27,302
132,250
506,136
220,337
11,542
1,441,912
2023
K’000
427,028
31,700
172,969
397,428
75,352
-
1,104,477
2022
K’000
429,358
27,302
73,106
304,245
143,656
-
977,667
Inventories recognised as an expense
4,846,092
4,111,037
3,046,883
2,826,242
18
Trade and other receivables
Trade receivables
Loss allowance (Note 4(b))
Amounts due from related parties (Note 31)
Loans receivable (Note 31)
Prepayments
Other receivables
Group
Company
2023
K’000
215,417
(19,226)
196,191
3,248
-
16,997
116,267
332,703
2022
K’000
137,565
(29,612)
107,953
3,123
-
158,244
19,980
289,300
2023
K’000
78,806
(10,653)
68,153
1,055,062
75,338
10,629
68,260
1,277,442
2022
K’000
53,791
(14,479)
39,312
611,870
67,683
62,541
5,111
786,517
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair
value. As at the end of the reporting period, there were no trade receivables subject to a factoring arrangement (2022: Nil).
19
Cash and cash equivalents
Cash at bank and in hand
Group
2023
K’000
271,222
2022
K’000
223,973
Company
2023
K’000
209,854
2022
K’000
136,149
The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of the financial year as
follows:
Balances as above
Bank overdrafts (Note 24)
Balances per statement of cash flows
Group
Company
2023
K’000
271,222
(651,689)
(380,467)
2022
K’000
223,973
(351,681)
(127,708)
2023
K’000
209,854
(462,010)
(252,156)
2022
K’000
136,149
(164,025)
(27,876)
As at the reporting period, there were no deposits at call nor any restricted cash.
100
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
20
Discontinued operations
In 2020, the Group announced its intention to exit Chiawa Farm unit and initiated an active program to locate a buyer for
its assets, primarily consisting of property, plant and equipment. The associated assets and liabilities were consequently
presented as held for sale in subsequent years.
While there have been several interested parties, the Group has maintained the farm under active marketing as a suitable
bidder is yet to be found. Based on the recent offer letters received from prospective buyers, the Directors are of the
opinion that the carrying amount of the assets does not exceed their recoverable value as at the end of the reporting
period.
Financial information relating to the discontinued operation for the year is set out below.
i)
Financial performance
Revenue
Expenses
(Loss)/profit before income tax
Income tax expense
(Loss)/profit for the year
Other comprehensive income
Total comprehensive income for the year
ii)
Cashflow information
Net cash inflow from operating activities
Net cash inflow from investing activities
Net cash from financing activities
Net increase in cash generated by the farm
2023
K’000
152,466
(163,070)
(10,604)
-
(10,604)
-
(10,604)
(10,604)
-
-
(10,604)
iii)
Assets and liabilities of disposal group classified as held for sale
The following assets were reclassified as held for sale in relation to the assets classified as held for sale:
Assets classified as held for sale
Property plant and equipment
Additions
Transfers
Depreciation charge*
2023
K’000
170,091
-
(5,540)
(6,911)
157,640
2022
K’000
107,039
(62,931)
44,108
(4,411)
39,697
-
39,697
44,108
-
-
44,108
2022
K’000
170,550
6,748
-
(7,207)
170,091
*As the assets have been under active marketing since 2020, the Group depreciates the assets at end of each
period reporting period as the assets are still in use.
There were no liabilities directly associated with assets classified as held for sale during the year (2022: Nil).
101
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
21
Share capital and share premium
Ordinary shares
Authorised
2023
Shares
2022
Shares
2023
K’000
2022
K’000
700,000,000
700,000,000
7,000,000
7,000,000
Issued and fully paid
300,579,630
300,579,630
3,006
3,006
Share premium
Preference shares
Authorised and issued -fully paid
i)
Ordinary shares
1,125,012
1,125,012
1,125,012
1,125,012
100,057,658
100,057,658
1,000
1,000
Ordinary shares have a par value of K0.01. They entitle the holder to participate in dividends, and to share in the
proceeds of winding up the Group in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one
vote, and on a poll each share is entitled to one vote. Of the 300,579,630 issued and fully paid shares, 137,675,979
are held by shareholders on the AIM of the London Stock Exchange and 162,903,611 are held by shareholders on the
Lusaka Stock Exchange.
ii)
Preference shares
The Company’s largest ordinary shareholder, British International Investment (BII), is also the holder of all the
100,057,658 convertible redeemable preference shares in issue (the “Preference Shares”) (par value of K0.01). These
Preference Shares have four voting rights for every five Preference Shares held resulting in BII currently having
approximately 34.8% of the total voting rights in the Company. The Preference Shares are convertible in whole or
in part by BII into ordinary shares on a one-for-one basis until 16 September 2024 (the “Eighth Anniversary”), and
if converted after the Eighth Anniversary, on the basis of one Preference Share into 3.0833 new ordinary shares.
Should in future BII convert all of their Preference Shares on the basis of one for 3.0833 new ordinary shares, their
ordinary shareholding would increase.
For so long as BII does not exercise its conversion rights and continues to hold the Preference Shares after the
Eighth Anniversary, BII’s voting rights will remain unchanged, with four voting rights for every five Preference
Shares held, together with one vote for each ordinary share held, resulting in BII continuing to hold approximately
34.8% of the total voting rights in the Company.
The Company has the right to redeem all or part of the Preference Shares at the redemption price, which will give BII
a 12% compounded annual return on their investment, subject to a minimum of USD 0.77 per Preference Share (less
dividends received to date). The zero-coupon Preference Shares receive a dividend only if a dividend is paid to ordinary
shareholders, and in such cases, the dividend per Preference Share will be the same as that for ordinary shares.
22
Foreign currency translation reserve
This represents the accumulated foreign exchange differences arising from the translation of foreign retail
operations in Nigeria and Ghana. For the Company, the reserve arose from the translation of Mpongwe Farms which were
foreign denominated up until 31 December 2021. The reserves are non-distributable.
At start of year
Translation differences - foreign operations
Translation differences - Mpongwe Farms
Less translation difference - NCI
At end of year
102
Group
Company
2023
K’000
692,705
(40,617)
-
8,302
660,390
2022
K’000
720,131
(16,320)
(10,847)
(259)
692,705
2023
K’000
687,048
-
-
-
687,048
2022
K’000
697,895
-
(10,847)
-
687,048
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
23
Revaluation reserve
Items of property, plant and equipment are recognised at fair value based on periodic, but at least triennial valuations
performed by external independent valuers, less subsequent depreciation. The reserve is used to record increments and
decrements on the revaluation of non-current assets. The fair value of property, plant and equipment was revalued on
30 September 2021 by Messrs, Fairworld Properties Limited.The reserves are non-distributable to the shareholders and
are recognised net of deferred income tax. Leasehold land was revalued on 30 September 2023 by Messrs, Fairworld
Properties Limited.
In the event of a sale of an asset, any balance in the reserve in relation to the asset is transferred to retained
At start of year
Revaluation surplus (Note 11)
Excess depreciation
Deferred income tax (Note 25)
At end of year
24
Borrowings
Non-Current
Bank loans
Current
Bank loans
Bank overdrafts
Group
Company
2023
K’000
1,113,119
1,003,412
(53,928)
(98,516)
1,964,087
2022
K’000
1,160,653
-
(53,928)
6,394
1,113,119
2023
K’000
712,279
977,426
(30,155)
(97,751)
1,561,799
2022
K’000
739,522
-
(30,155)
2,912
712,279
Group
2023
K’000
2022
K’000
Company
2023
K’000
2022
K’000
687,679
426,222
687,679
426,222
321,138
651,689
972,827
1,660,506
173,644
351,681
525,325
951,547
321,138
462,010
783,148
1,470,827
173,644
164,025
337,669
763,891
Refer to Note 29 (ii) for details on the movement in borrowings on the statement of financial position.ii)
103
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
24
Borrowings (continued)
i)
Bank loans
Standard Chartered Bank Zambia Plc
The Group has a structured agricultural facility with an annual revolving limit. The purpose of the facility is the
financing of wheat, soya beans and maize under collateral management agreements. Interest on the facility is
SOFR plus 4.45 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 and is repayable in 270 days. As at the end of
the reporting period, the effective interest rate was 9.77 %(2022: 7.41%).
International Finance Corporation (IFC)
During the year the Group repaid the outstanding loan and entered into an eight (8) year Kwacha loan facility with
the IFC. Interest is fixed at 16 per cent per annum. 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) and is fully repayable in June
2030. The First ranking legal mortgage ranks pari passu between Absa Bank Zambia Plc . As at the end of the
reporting period, the effective interest rate was 16 %.
Stanbic Bank Zambia Limited
The Group has a seasonal loan facility with an annual revolving limit. Interest on the facility is 8.5% 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 Group. The floating charge/debenture ranks pari passu between Standard Chartered
Bank Zambia Plc. The loan is repayable by July 31st in respect of summer cropping and January 31st in respect of
Winter Cropping.
As at the end of the reporting period, the effective interest rate was 18.5 %(2022: 17.5%).
Absa Bank Zambia Plc
The Group has an amortizing loan at an interest rate of Bank of Zambia policy rate plus 6.5%. The facility 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). The first ranking charge ranks pari passu with the International Finance Corporation (IFC) and is
repayable in February 2026. As at the end of the reporting period, the effective interest rate was 16.0% (2022:15.5%).
ZANACO Plc
The Group has an amortizing five year loan facility at an interest rate of Bank of Zambia policy rate plus 6.0%. The
facility is secured through a first legal mortgage over Plot no 4970 Manda road Lusaka and a floating debenture
over Zambeef’s assets ranking pari passu with Standard Chartered Bank, Stanbic Bank and Citibank. The loan is
repayable in July 2028. As at the end of the reporting period, the effective interest rate was 16.0%.
104
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
24
Borrowings (continued)
ii)
Bank-overdrafts
The Group has annual revolving bank overdraft facilities held with various banks namely, Zambia National
Commercial Bank, Stanbic Bank Zambia Limited, Citi Bank Zambia Limited, Standard Chartered Bank Zambia
Limited and First National Bank.
Interest on the bank overdrafts are payable at, in respect of ZMW limits, the prevailing Bank of Zambia (BOZ)
Monetary Policy Rate plus a liquidity premium and a margin ranging from 3.5 % to 7.5% and in respect of USD limits,
the prevailing SOFR rate plus a margin ranging from 3.5% to 4%. As at the end of the reporting period, the average
effective interest rate was 12.65% (2022: 8.5%).
The 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).
iii)
Compliance with loan covenants
Interest cover ratio: (EBITDA/Interest charges)
Current ratio: (Current assets/Current liabilities)
Debt service cover ratio: (EBITDA/Debt service)
Net debt to EBITDA ratio (Total debt- cash)/EBITDA)
Loan to covenant value (Total debt/Total assets)
Liabilities to tangible net worth ratio (Total liabilities/(Equity-Goodwill-
Deferred tax)
Target
2023
2022
>2.5
>1.3
>1.5
<3.0
<130%
<1.0
3.4
1.3
2.7
2.5
7%
0.6
3.7
1.8
1.53
0.7
10%
0.5
The Group complied with the financial covenants of its borrowing facilities throughout the reporting period.
iv)
Fair value
The fair values are not materially different from their carrying amounts.
25
Deferred income tax
Deferred income tax is calculated using the enacted income tax rate of range of 10% to 30%% depending of the activity
of the entities within the Group The movement on the deferred income tax account is as follows:
At start of year
Charge/(credit) in profit or loss
Charge/(credit) in equity
At end of year
Group
Company
2023
K’000
223,217
(19,716)
98,516
302,017
2022
K’000
235,250
(5,639)
(6,394)
223,217
2023
K’000
140,280
(17,202)
97,751
220,829
2022
K’000
138,117
5,181
(3,018)
140,280
Deferred tax assets and liabilities in each jurisdiction are offset as there is a legally enforceable right to offset current tax
assets and liabilities and the deferred tax balances where these relate to the same taxation authority.
105
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
25
Deferred income tax (continued)
Deferred income tax assets and liabilities and deferred income tax charge/(credit) in profit or loss and equity are
attributable to the following items.
Group
Year ended 30 September 2023
Deferred income tax liabilities
Property, plant and equipment
Revaluation surplus
Change in fair value of biological assets
Deferred income tax assets
Tax losses carried forward
Defined benefit obligation
Other temporary differences
Year ended 30 September 2022
Deferred income tax liabilities
Property, plant and equipment
Revaluation surplus
Change in fair value of biological assets
Deferred income tax assets
Tax losses carried forward
Defined benefit obligation
Other temporary differences
Company
Year ended 30 September 2023
Deferred income tax liabilities
Property, plant and equipment
Revaluation surplus
Change in fair value of biological assets
Deferred income tax assets
Tax losses carried forward
Defined benefit obligation
Other temporary differences
Year ended 30 September 2022
Deferred income tax liabilities
Property, plant and equipment
Revaluation surplus
Change in fair value of biological assets
Deferred income tax assets
Tax losses carried forward
Defined benefit obligation
Other temporary differences
106
At start of
year
Profit or loss
Equity At end of year
K’000
K’000
K’000
K’000
118,966
148,692
31,564
-
(32,565)
(12,069)
(31,371)
223,217
92,526
155,086
35,899
-
(28,183)
(1,989)
(18,089)
235,250
74,759
79,151
26,966
(27,483)
(3,166)
(9,947)
140,280
57,281
82,169
30,795
(18,290)
(1,415)
(12,423)
138,117
(7,655)
-
8,767
-
(6,889)
(2,023)
(11,916)
(19,716)
-
97,609
-
-
-
907
-
98,516
26,440
-
-
(6,394)
(4,335)
-
(4,382)
(10,080)
(13,282)
(5,639)
(1,983)
-
8,604
(9,076)
(175)
(14,572)
(17,202)
17,478
-
(3,829)
(9,193)
(1,751)
2,476
5,181
-
-
-
-
-
(6,394)
-
97,751
-
-
-
-
97,751
-
(2,912)
-
-
(106)
-
(3,018)
111,311
246,301
40,331
-
(39,454)
(13,185)
(43,287)
302,017
118,966
148,692
31,564
-
(32,565)
(12,069)
(31,371)
223,217
72,776
176,902
35,570
(36,559)
(3,341)
(24,519)
220,829
74,759
79,257
26,966
(27,483)
(3,272)
(9,947)
140,280
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
26
Defined benefit obligations
The Group awards terminal benefits to its employees upon retirement. This scheme is unfunded, and the 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.
The regulator, Pensions and Insurance Authority, does not regulate gratuity schemes such as this one. However, entities that
provide an additional and separate unfunded gratuity in their annual financial statements should operate within the governing
covenants and agreements with employee representative bodies. Taxation of this scheme falls under the framework and
administration of this arrangement, including decisions as to whether to prefund the benefit costs, or amend the arrangement
design.
The Group’s accrued liability in respect of each employee is the present value of the benefits in respect of service completed
to the valuation date but based on projected earnings to retirement or date of payment. The total accrued liability (or the
required provision) at the valuation date is a summation of the accrued liability in respect of each employee.
i)
Amounts recognised in statement of financial position
The amounts recognised in the statement of financial position and the movements in the net defined benefit
obligation over the year are as follows:
At start of year
Current service cost
Past service cost
Interest cost
Amount recognised in profit or loss
Actuarial remeasurements
Change in demographic assumptions
Change in financial assumptions
Early settlement (gains)/losses
Experience adjustment
Amount recognised in equity
Group
2023
K’000
3,654
70
213
348
631
-
(580)
700
648
768
2022
K’000
8,891
168
598
519
1,285
-
-
2,895
255
3,150
Company
2023
K’000
366
39
118
193
350
-
-
(321)
509
236
424
2022
K’000
2,124
56
201
174
431
-
-
-
972
86
1,058
Benefit payments
(3,422)
(9,672)
(238)
(3,247)
Per statement of financial position
Present value of unfunded obligation
1,631
1,631
3,654
3,654
902
902
366
366
ii)
Actuarial assumptions
The significant actuarial assumptions in 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
Salary growth rate
Group
2023
28%
14%
2022
27%
20%
Company
2023
28%
14%
2022
27%
20%
107
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
26
Defined benefit obligations (continued)
ii)
Actuarial assumptions (continued)
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics
and experience in the local environment. These assumptions translate into an average life
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
iii)
Risk exposure
Probability of reaching retirement age in service
Group
Company
2023
2022
2023
2022
47%
57%
66%
72%
78%
86%
47%
57%
66%
72%
78%
86%
47%
57%
66%
72%
78%
86%
47%
57%
66%
72%
78%
86%
The Group is exposed to a number of risks, the most significant of which are detailed below:
Changes in bond yields
The plan liabilities are calculated using a discount rate set with reference to Zambian government bond yields. A
decrease in government bond yields will increase the plan liabilities.
Changes in salaries
The plan benefits are calculated with reference to employees’ salaries. An increase in salaries will increase the plan
liabilities. This risk becomes higher as the expectations of short-term inflation rise increase, due to the weakened
strength of the Zambian Kwacha against other currencies.
Life expectancy
The plans’ obligations are to provide benefits for the life of the member. Therefore, increases in life expectancy will
result in an increase in the plans’ liabilities.
Liquidity
The plan is unfunded and therefore there is a risk that resources may not be available when needed to pay the benefits
as they fall due.
iv)
Sensitivity
The sensitivity analysis is based on changes in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same
method (present value of the defined benefit obligation calculated with the projected unit credit method at the end
of the reporting period) has been applied as when calculating the defined benefit liability recognised in at end of the
reporting period.
108
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
26
Defined benefit obligations (continued)
iv)
Sensitivity (continued)
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Change in assumption
Discount rate (-1%)
Salary growth rate (+1%)
life expectancy (-1 year)
Impact on defined benefit obligation
Group
Company
2023
K’000
60
71
(846)
2022
K’000
215
234
867
2023
K’000
33
39
(423)
2022
K’000
108
117
469
The scheme does not have any assets and therefore benefits are met as they become due. The weighted average
duration of the defined benefit obligation is 9.4 years (2022: 12.1 years).
v)
Maturity analysis
The expected maturity analysis of undiscounted pension benefits is as follows:
Within 1 year
Between 1 - 2 years
Between 2 - 5 years
Over 5 years
27
Trade and other payables
Trade payables
Amounts due to related parties
(Note 31)
Gratuity and leave pay accruals
Legal and other related claims
Statutory liabilities
Other payables
Group
Company
2023
K’000
-
-
1,113
518
1,631
2022
K’000
-
-
203
3,451
3,654
2023
K’000
-
-
275
1,889
2,164
Group
Company
2023
K’000
432,668
-
117,538
68,977
21,428
193,580
834,191
2022
K’000
344,186
-
126,962
107,901
26,566
43,958
649,573
2023
K’000
223,190
390,103
64,807
68,977
7,303
131,646
886,026
2022
K’000
-
-
21
345
366
2022
K’000
166,173
-
82,565
107,901
6,041
5,134
367,814
Trade payables are unsecured and are usually paid within 30 days of recognition. Gratuity and leave pay provisions are
paid as and when they fall due but mainly in December at the end of employee contracts. Legal and other claim are paid
within 3 months average of recognition.
The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-
term nature.
109
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
28
Contract liabilities
Contract liabilities relate to advance payments received from customers on grain, day-old chicks, stockfeed and other
related products. The Group has recognised the following liabilities related to contracts with customers:
At start of year
Revenue recognised from opening liability
Receipts from customer at year end
At end of year
Group
Company
2023
K’000
97,400
(97,400)
164,063
164,063
2022
K’000
119,206
(119,206)
97,400
97,400
2023
K’000
97,400
(97,400)
94,976
94,976
2022
K’000
94,485
(94,485)
97,400
97,400
During the year, there was no revenue recognised from performance obligations satisfied in previous periods (2022: Nil).
Contract liabilities increased due to the negotiation of larger prepayments and an increase in overall contract activity. All
revenue streams under contract liabilities are for periods of one year. As permitted under IFRS 15, the transaction price
allocated to these unsatisfied performance obligations is not disclosed.
29
Cash generated from operations
Profit/(loss) before income tax from:
Continuing operations
Discontinued operations (Note (20(i)
Adjustments for:
Changes in employee benefits (Note 26(i))
Interest expense on leases (Note 8)
Exchange gains on leases (Note 8)
Interest expense on borrowings (Note 8)
Exchange gains on borrowings (Note 8)
Loss/(gain) on disposal of assets (Note 6)
Depreciation on fixed assets (Note 11)
Depreciation on right of use assets (Note 12(a))
Depreciation on assets held for sale (Note 20 (ii))
Share of loss of associate (Note 15(ii))
Impairment of goodwill (Note 13)
Impairment of investment in subsidiaries (Note 14)
Change in fair value of biological assets (Note 16)
Foreign exchange differences
Changes in working capital:
Biological assets*
Inventories
Trade and other receivables
Trade and other payables
Contract liabilities
Group
2023
K’000
203,673
(10,604)
193,069
631
2,462
1,846
44,646
18,812
7,756
159,604
6,095
6,911
2,595
-
-
(643,197)
(33,270)
555,495
(214,575)
(43,403)
184,618
66,663
2022
K’000
55,164
44,108
99,272
1,285
1,813
(353)
53,473
(3,188)
29,386
111,091
10,991
459
3,503
141,786
-
(349,462)
2,028
387,763
(244,066)
(51,022)
135,370
(21,806)
Company
2023
K’000
17,381
(10,604)
6,777
350
1,312
1,680
44,646
18,812
(1,040)
73,881
-
6,911
2,595
-
-
(568,975)
2,984
482,870
(126,810)
(490,922)
518,212
(2,424)
2022
K’000
(75,830)
44,108
(31,722)
431
784
(346)
53,473
(3,188)
21,772
47,197
9,368
459
3,503
-
141,786
(338,052)
14,932
376,347
(204,695)
85,739
(27,678)
2,915
Cash generated from operations
316,758
308,323
(29,141)
153,025
*The movement in biological assets excludes the change in fair value of biological assets already adjusted for.
110
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
29
Cash flow information (continued)
ii)
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
Cash and cash equivalents (Note 19)
Bank loans (Note 24)
Bank overdrafts (Note 24)
Lease liabilities (Note 12(b))
Group
2022
At start of year
Additions
Interest charged
Principal repayments
Interest paid
Foreign exchange gains
At end of year
2022
At start of year
Additions
Interest charged
Principal repayments
Interest paid
Foreign exchange gains
At end of year
Company
2022
At start of year
Additions
Interest charged
Principal repayments
Interest paid
Foreign exchange gains
At end of year
2023
At start of year
Additions
Interest charged
Principal repayments
Interest paid
Foreign exchange gains
At end of year
Group
Company
2023
K’000
271,222
(1,008,817)
(651,689)
(22,070)
(1,411,354)
2022
K’000
223,973
(599,866)
(351,681)
(17,643)
(745,217)
2023
K’000
209,854
(1,008,817)
(462,010)
(13,691)
(1,274,664)
Liabilities from financing
activities
Net Cash/
(Bank-over-
drafts)
Bank loans
K’000
(406,264)
(722,995)
(53,473)
526,205
53,473
3,188
(599,866)
(599,866)
(916,396)
(44,646)
526,257
44,646
(18,812)
Leases
K’000
(19,671)
(13,290)
(1,813)
14,965
1,813
353
(17,643)
(17,643)
(9,900)
(2,676)
7,319
2,676
(1,846)
K’000
(288,665)
160,957
(63,252)
-
63,252
-
(127,708)
(127,708)
(252,759)
(87,323)
-
87,323
-
2022
K’000
136,149
(599,866)
(164,025)
(10,232)
(637,974)
Total
K’000
(714,600)
(575,328)
(118,538)
541,170
118,538
3,541
(745,217)
(745,217)
(1,179,055)
(134,645)
533,576
134,645
(20,658)
(1,008,817)
(22,070)
(380,467)
(1,411,354)
(406,264)
(722,995)
(53,473)
526,205
53,473
3,188
(599,866)
(599,866)
(916,396)
(44,646)
526,257
44,646
(18,812)
(1,008,817)
(8,470)
(9,430)
(784)
7,322
784
346
(10,232)
(10,232)
(7,793)
(1,312)
6,016
1,312
(1,682)
(13,691)
(193,224)
165,436
(36,752)
-
36,752
(88)
(27,876)
(27,876)
(224,280)
(57,471)
-
57,471
-
(252,156)
(607,958)
(566,989)
(91,009)
533,527
91,009
3,446
(637,974)
(637,974)
(1,148,469)
(103,429)
532,273
103,429
(20,494)
(1,274,664)
111
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
30
Earnings per share (EPS)
Basic earnings per share
Continuing operations
Discontinued operations
Total basic earnings per share
Diluted earnings per share
Continuing operations
Discontinued operations
Total diluted earnings per share
Group
Company
2023
Ngwee
42.99
(3.53)
39.46
32.25
(2.65)
29.60
2022
Ngwee
(3.51)
13.21
9.70
(2.63)
9.91
7.28
2023
Ngwee
0.56
(3.53)
(2.97)
0.42
(2.65)
(2.23)
2022
Ngwee
(34.46)
13.21
(21.25)
(25.85)
9.91
(15.94)
i)
Reconciliations of earnings used in calculating earnings per share
Profit attributable to the ordinary equity holders of the Company used in calculating basic and diluted earnings per
share is as follows:
Continuing operations
Discontinued operations
Group
Company
2023
K’000
129,217
(10,604)
118,613
2022
K’000
(10,545)
39,697
29,152
2023
K’000
1,677
(10,604)
(8,927)
2022
K’000
(103,629)
39,697
(63,932)
ii)
Weighted average number of shares used as the denominator
Ordinary shares used in calculating basic EPS
Preferences shares
Total weighted average shares used in calculating diluted EPS
2023
shares
300,579,630
100,057,658
400,637,288
2022
shares
300,579,630
100,057,658
400,637,288
112
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
31
Related party transactions
The Group is listed on the Lusaka Stock Exchange (LuSE) and has various shareholders. There is no ultimate controlling
parent entity. The major shareholder, British International Investment (BII) Plc which has 17.5% shareholding, is also the
holder of 100,057,658 convertible redeemable preference shares. These shares have four voting rights for every five
preference shares held resulting in BII having 34.8% of the voting rights.
Name
BII plc
i)
Subsidiaries
Type
Place of incorporation
Ownership interest
Major shareholder
London
2021
17.5%
2020
17.5%
Interests in subsidiaries are set out in Note 14.
ii)
Key management personnel compensation
Key management includes Directors (executive and non-executive) and members of senior management. The
compensation paid or payable to key management for employee services is shown below:
Short-term employee benefits
Retirement benefit cost - NAPSA
Group
Company
2023
K’000
169,253
955
170,208
2022
K’000
141,028
796
141,824
2023
K’000
136,450
748
137,198
2022
K’000
106,453
584
107,037
iii)
Transactions with other related parties
The following transactions occurred with related parties:
Sales of:
Animal feed and bran
Beef products
Poultry products
Pork products
Purchases of:
Beef products
Poultry products
Pork products
Distribution services
Group
2023
K’000
2022
K’000
Company
2023
K’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,510,425
608,374
68,497
2,187,296
7,236
69,604
3,001
3,042
82,883
2022
K’000
188
1,276,861
214,169
51,375
1,542,593
5,988
33,858
2,894
-
42,740
The Group sales and purchases transactions are with Director owned companies while for the Company, the
transactions are made with fellow subsidiaries.
113
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
31
Related party transactions (continued)
iv)
Outstanding balances arising from sales/purchases of goods and services
The following balances are outstanding at the end of the reporting period in relation to transactions with related
parties:
Receivables from:
Subsidiaries:
Zamleather Limited
Master Meat Nigeria Limited
Master Meat Ghana Limited
Zamhatch Limited
Masterpork Limited
Zambeef Retailing Limited
Zamchick Limted
Common directorship:
Java Foods
Associates:
Zampalm Limited
Payables to:
Subsidiary
Zambeef Retailing Limited
Loans receivable
At start of year
Loans advanced
Foreign exchange gains
Loan repayments received
Group
2023
K’000
2022
K’000
Company
2023
K’000
-
-
-
-
-
-
-
199
3,049
3,248
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,123
3,123
-
-
-
-
-
-
2022
K’000
73,506
64,168
3,515
250,766
102,727
102,100
80,352
-
-
-
2,419
679,553
89,997
73,552
1,787
512,400
199,227
-
250,666
-
426
-
2,345
1,130,400
390,103
-
67,386
-
16,746
(8,793)
75,339
70,474
667
-
(3,458)
67,683
The loans receivable relates to amounts advanced to foreign subsidiaries in Nigeria of K73 million (2022: K64
million) and Ghana of K1.8 million (2022: K3.5 million) for the purposes working capital requirements. The loans are
insecure, payable on demand and interest free.
v)
Directors’ remuneration
Non-executive Director fees
Executive Director salaries and short-term emoluments
Retirement benefit costs – NAPSA contributions
2023
K’000
3,205
13,171
32
16,408
2022
K’000
3,267
10,352
29
13,648
114
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
32
Contingencies
The Group is party to various legal cases whose outcome is dependent on the conclusion of the Zambian judicial process.
Management makes estimates for the outcomes of these cases based on professional advice. There are some cases
where, based on professional advice received, the directors have not made any provision.
The value of potential claims against the Group that would likely result in an unfavourable outcome as at 30 September
was nil (2022: Nil).
33
Commitments
i)
Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities was
K83.6 million (2022: K44.6 million).
ii)
Operating commitments
Contractual obligation for future purchase of raw materials not recognised as a liability was K363.9 million (2022:
K11.896 million).
34
Events occurring after the reporting period
As at the end of the financial period and date of this report, the Directors are not aware of any item, transaction, or event
of a material and unusual nature likely, in the opinion of the Directors of the Group, to affect substantially the operations
of the Group, the results of its operations or financial position of the Group in subsequent financial years.
In the year under review the Board approved Group Restructuring, the shareholders were accordingly notified on 20th
September 2023. The restructuring which was effective 1st October 2023 is expected to be concluded by 31st March 2024.
The group restructuring (the “Group Restructuring”) is aimed at rationalising the Group’s operations across its six
Zambian entities. The group is expected to benefit from the restructuring as it will eliminate unnecessary complexities
and duplications of its business processes across the six different entities, which ultimately have the same key decision-
makers, processes, ownership and senior executive team.
115
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC
116
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC Supplementary Information -
presented in USD (unaudited)
117
Notes to Annual Financial Statements (continued)For the year ended 30 September 2023Annual Report 2023Zambeef Products PLC Statement of Profit or Loss and Other Comprehensive Income
Revenue from contracts with customers
Change in fair value of biological assets
Cost of sales of providing goods
Group
Company
2023
US$’000
331,478
35,263
(265,685)
2022
US$’000
314,014
18,567
(237,518)
2023
US$’000
185,549
31,194
(167,044)
2022
US$’000
195,659
17,903
(162,734)
Gross profit
101,056
95,063
49,699
50,828
Other income/(expenses)
Net impairment losses on financial assets
Impairment of goodwill
Distribution expenses
Administrative expenses
Operating profit
(2,545)
(149)
-
(5,279)
(73,272)
145
(1,040)
(8,253)
(3,818)
(71,989)
(1,892)
(97)
-
(71)
(40,651)
1,008
(458)
(8,253)
(3,907)
(38,337)
19,811
10,108
6,988
881
Share of loss from equity investment
Finance income/(expenses)
Finance costs
(142)
(1,133)
(7,370)
(204)
206
(6,900)
(142)
(222)
(5,670)
(204)
206
(5,297)
Profit before income tax
Income tax expense
(Loss)/profit from continuing operation
Profit from asset held for sale
Profit for the year
Profit attributable to:
Owners of Zambeef Products PLC
Non-controlling interests
Other comprehensive income:
Items that maybe reclassified to profit or loss
Translation losses on foreign operations
Translation losses on Mpongwe Farms
Items not reclassified to profit or loss
Revaluation surplus
Actuarial remeasurement losses
Deferred income tax
Other comprehensive income for the year
11,166
3,210
954
(4,414)
(3,994)
(3,684)
(861)
(1,618)
7,172
(581)
6,591
6,503
88
6,591
(2,227)
-
55,012
(42)
(5,401)
47,342
(474)
2,311
1,837
1,696
141
1,837
(946)
(631)
-
(183)
368
(1,392)
93
(581)
(488)
(488)
-
(488)
-
-
53,587
(23)
(5,359)
48,205
(6,032)
2,311
(3,721)
(3,721)
-
(3,721)
-
(631)
-
(62)
176
(517)
Total comprehensive income for the year
53,933
445
47,717
(4,238)
118
Annual Report 2023Zambeef Products PLC Statement of Profit or Loss and Other Comprehensive Income (continued)
Total comprehensive income for the period is
attributable to:
Owners of Zambeef Products Plc
Non-controlling interests
Basic earnings per share
Continued operations
Discontinued operations
Total basic earnings per share
Diluted earnings per share
Continued operations
Discontinued operations
Total diluted earnings per share
Group
2023
US$’000
Company
2022
US$’000
2023
US$’000
2022
US$’000
54,300
(367)
53,933
2.36
(0.19)
2.17
1.77
(0.15)
1.62
289
156
445
(0.19)
0.77
0.58
(0.15)
0.58
0.43
47,717
-
47,717
0.03
(0.19)
(0.16)
0.02
(0.15)
(0.13)
(4,238)
-
(4,238)
(2.01)
0.77
(1.24)
(1.50)
0.58
(0.92)
119
Annual Report 2023Zambeef Products PLC Consolidated Statement of Financial Position
ASSETS
Non-current assets
Property, plant and equipment
Right of use assets
Goodwill
Investment in associate
Biological assets
Current assets
Biological assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Total assets
EQUITY
Share capital
Share premium
Preference share capital
Foreign currency translation reserve
Revaluation reserve
Retained earnings
Attributable to owners of parent entity
Non-controlling interests
LIBILITIES
Non-current liabilities
Borrowings
Lease liabilities
Deferred income tax
Defined benefit obligations
Current liabilities
Borrowings
Lease liabilities
Trade and other payables
Contract liabilities
Current income tax
Total equity and liabilities
120
30-Sept-23
US$’000
30-Sept-22
US$’000
229,236
-
1,190
1,635
5,869
237,930
13,560
78,805
15,828
12,903
7,500
128,596
366,526
449
185,095
100
49,843
51,360
(64,023)
222,824
(315)
222,509
32,715
743
14,368
78
47,904
46,281
307
39,686
7,805
2,034
96,113
366,526
198,393
2,050
1,583
2,340
5,480
209,846
14,817
91,260
18,310
14,175
10,765
149,327
359,173
449
185,095
100
42,945
65,256
(60,091)
233,754
4
233,758
26,976
797
14,128
231
42,132
33,248
319
41,113
6,165
2,438
83,283
359,173
Annual Report 2023Zambeef Products PLC Company statement of Financial Position
ASSETS
Non-current assets
Property, plant and equipment
Right of use assets
Investment in subsidiaries
Investment in associate
Biological assets
Current assets
Biological assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Current income tax asset
Total assets
EQUITY
Share capital
Share premium
Preference share capital
Foreign currency translation reserve
Revaluation reserve
Retained earnings
LIABILITIES
Non-current liabilities
Lease liabilities
Borrowings
Deferred income tax
Defined benefit obligations
Current liabilities
Lease liabilities
Borrowings
Trade and other payables
Contract liabilities
Current income tax
Total equity and liabilities
30-Sept-23
US$’000
30-Sept-22
US$’000
171,046
-
4,949
1,635
5,869
183,499
11,056
52,544
60,771
9,984
7,500
-
141,855
325,354
449
185,095
100
42,945
65,256
(96,968)
196,877
352
32,715
10,506
43
43,616
299
37,257
42,152
4,518
635
84,861
325,354
136,584
1,493
6,584
2,340
5,481
152,482
11,586
61,878
49,780
8,617
10,765
-
142,626
295,108
449
185,095
100
39,096
45,081
(62,986)
206,835
339
26,976
8,879
23
36,217
309
21,371
23,282
6,165
929
52,056
295,108
121
Annual Report 2023Zambeef Products PLC 122
Annual Report 2023Zambeef Products PLC 29TH ANNUAL GENERAL
MEETING
123
Annual Report 2023Zambeef Products PLC 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 29th Annual General Meeting of the members of the company will be held
virtually (https://eagm.creg.co.zw/EAGM/Login.aspx) on Friday, December 29th 2023 at 10:00 hours; in respect
of the year ended 30 September 2023.
AGENDA
1.
Minutes of the previous meeting
To receive and note the minutes of the 28th Annual General Meeting held on 27 December 2022 duly approved
by the Chairman in accordance with the Companies Act.
2.
Ordinary Resolutions
Ordinary Resolution No. 1
To receive adopt and approve the reports of the Directors, the Auditors, and the Financial Statements for the
year ended September 30, 2023
To consider and, if deemed fit, to pass, with or without modification, the following ordinary resolutions;
Ordinary Resolutions to Confirm the Newly Appointed Directors
To confirm the appointment of Mr. Muyangwa Muyangwa who was appointed by the board as a director with
effect from 21 April 2023 and Dr John Rich who was appointed by the board as director with effect from 21 June
2023.
4.1.1
Ordinary Resolution No. 2. Mr. Muyangwa Muyangwa
4.1.2
Ordinary Resolution No. 3. Dr John Rich
Ordinary Resolutions to Re-election of Directors Retiring by Rotation
To re-elect each of Messrs Michael Mundashi SC and Jonathan Kirby who retire by rotation in terms of the
Companies Act, and who, being eligible, offer themselves for re-election.
4.1.3
Ordinary Resolution No. 4. Mr Michael Mundashi SC
4.1.4
Ordinary Resolution No. 5. Mr Jonathan Kirby
3.
4.
124
Annual Report 2023Zambeef Products PLC
The board recommends their re-election to shareholders. Their details are set out in the Annual Report.
4.2 Ordinary Resolution No. 6: Approval of Directors’ Fees
To approve the annual fees payable by the company to the Non-Executive Directors, for the year
ending 30 September 2023, unless otherwise determined by the company in a general meeting, to be
revised by 10% as follows:
§
§
§
from K572 000 to K629 200 for a Board member;
from K 638 000 to K701 800 for a Board member and Committee Chairperson
from K1 012 000 to K 1 113 200 for the Board Chairman.
4.3 Ordinary Resolution No. 7: Re-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 re-appointed
as the company’s independent registered auditor for the financial year ending 30 September 2023 and
to authorise the Directors to determine their remuneration.
5.
Non - Declaration of Final Dividend
Due to the expansion program announced in the year, the Directors recommend that no dividend be paid for
the financial year ended September 2023.
It is noted that in terms of the company’s Articles, the company may only declare a dividend if the directors
have recommended a dividend.
6
Other business
To transact such other business as may be transacted at an annual general meeting of members.
A member entitled to attend and vote at the meeting is entitled to appoint any person (whether a member of
the Company or not) to attend, speak and vote in his/her stead. Proxy forms are obtainable from the Company
Secretary or at the Transfer Secretaries offices. The forms must be lodged at the Registered Office of the
Company not less than 48 hours before the commencement of the AGM.
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
Facsimile
Mobile No
Email: - info@corpservezambia.com.zm
: +260 (211) 256969/70
: +260 (211) 256975
: +260 950968435
By Order of the Board
Mwansa M Mutimushi
COMPANY SECRETARY
125
Annual Report 2023Zambeef Products PLC
NOTES
Key Sign Up instructions
a). Sign Up
•
•
•
•
•
•
Use the following link to access the platform; https://eagm.creg.co.zw/EAGM/Login.aspx
First-time users are required to sign up by clicking the “Sign Up “option.
If you registered previously, you do not need to sign up again. Kindly use the same logging credentials
that you used before. If you have forgotten your details, use the “Forgot Password” function on the
login window to retrieve your details.
Attendees are to indicate the criteria of their attendance of the provided options i.e. Shareholder/Non-
Shareholder/Proxy
Attendees are required to provide the necessary information to complete the sign-up procedure.
Once Sign-up has been completed, the admins will validate the information provided before granting
access to attendees. Once validated, login credentials will be delivered through email and SMS. The
validation process may take a maximum period of 48 hours.
b). Sign in
Use the following link to access the platform: https://eagm.creg.co.zw/EAGM/Login.aspx
Enter username
Enter Password
Click Login
Click “Register” on the blue button to confirm online attendance
Click “Join Webinar” to begin following video and audio transmission of the meeting proceedings.
Click “Join with Computer Audio” to attend the live meeting
•
•
•
•
•
•
•
126
Annual Report 2023Zambeef Products PLC MINUTES OF THE 28TH ANNUAL GENERAL MEETING OF MEMBERS
HELD ON 27 DECEMBER, 2022 AT 10:00 HOURS AT THE RADISSON BLU
HOTEL, LUSAKA AND FROM VARIOUS LOCATIONS VIRTUALLY
1
PRESENT
DIRECTORATE:
Michael Mundashi (Chairman), Faith Mukutu (Chief Executive Officer), Roman Frenkel, Pearson Gowero and
Mboo Mumba (Chief Financial Officer).
SECRETARY:
Mwansa Mutimushi
(Lists of members present as attached)
2
CALL TO ORDER / QUORUM
A quorum having been met, the meeting was called to order at 10:00 hours.
3
APOLOGIES FOR ABSENCE
Apologies for absence were recorded for Jonathan Kirby and Monica Musonda
4
AGENDA
The notice and agenda were adopted as presented.
5 MINUTES OF THE PREVIOUS MEETING
The minutes of the Annual General Meeting of 21 December, 2021 were noted.
6 MATTERS ARISING
No matters arose for discussion from the minutes of the previous meeting.
7
THE DIRECTORS’ REPORT AND FINANCIAL STATEMENTS
The directors’ report, the auditor’s report and annual financial statements for the year ended 30 September
2022 were presented.
It was resolved that the directors’ report and financial statements for the year ended 30 September 2022 be
approved and adopted and that all matters undertaken and discharged by the directors on behalf of the com-
pany be confirmed.
127
Annual Report 2023Zambeef Products PLC
8
RE- ELECTION OF DIRECTORS
It was resolved that to re-elect as directors Messer’s Roman Frenkel, Pearson Gowero and Ms Katebe Monica
Musonda who retired by rotation and offered themselves for re-election.
9
APPROVAL OF DIRECTORS’ FEES
The recommendation to revise the fees payable to directors by 10% upwards was presented to the meeting.
_________________________
CHAIRMAN
______________________
SECRETARY
Dated this 16 day of February 2023
128
Annual Report 2023Zambeef Products PLC
27 DECEMBER 2022 AGM ATTENDANCE REGISTER
1) Proxies
Name
STANDARD CHARTERED ZAMBIA SECURITIES SERVICES
NOMINEES LTD
NATIONAL PENSION SCHEME AUTHORITY
SATURNIA REGNA PENSION TRUST FUND
ZAMBIA SUGAR PENSION TRUST -SCHEME
STANBIC BANK PENSION TRUST FUND
ZANACO PLC DC PENSION SCHEME
Proxy
MR MICHAEL
MUNDASHI
MR UTEMBELE
SIMWINGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
STANBIC NOMINEES-MPILE LOCAL EQUITY FUND
MINTU CHITEBE
KCM PENSION TRUST SCHEME
MUMBA MUSUNGA
ZAMBIAN BREWERIES PLC PENSION TRUST SCHEME
MUMBA MUSUNGA
BARCLAYS BANK STAFF PENSION TRUST FUND
MUMBA MUSUNGA
BARCLAYS BANK ZAMBIA STAFF PENSION FUND-PPMZ
MUKUPA MWELWA
STANDARD CHARTERED BANK PENSION TRUST FUND
MUMBA MUSUNGA
LAFARGE CEMENT ZAMBIA PLC PENSION TRUST SCHEME MUMBA MUSUNGA
AIRTEL ZAMBIA STAFF PENSION FUND
MUMBA MUSUNGA
LUBAMBE COPPER MINES PENSION TRUST SCHEME
MUMBA MUSUNGA
BUYANTANSHI PENSION TRUST FUND
ZRA PENSION TRUST SCHEME
PICZ PENSION TRUST-MONEY PURCHASE
CEC PENSION TRUST SCHEME
GOLDEN SUNSET PENSION FUND
SANDVIC MINNING PENSION SCHEME
WORKCOM PENSION TRUST SCHEME
GAME STORES PENSION TRUST SCHEME
HEALTH SECTOR GRANT AIDED INSTITUTIONS PENSION
SCHEME
INDENI PENSION TRUST SCHEME
NATIONAL BREWERIES PENSION TRUST SCHEME
PSPF STAFF PENSION SCHEME
SUN INTERNATIONAL PENSION TRUST SCHEME
MUMBA MUSUNGA
MUMBA MUSUNGA
MUKUPA MWELWA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
MUMBA MUSUNGA
ZAMBIA REVENUE AUTHORITY PENSION TRUST SCHEME
MUKUPA MWELWA
STANBIC BANK ZAMBIA NOMINEES
RAIL SYSTEMS OF ZAMBIA
AFRICA 53
EXAMINATIONS COUNCIL OF ZAMBIA
DELOITTE AND TOUCH PENSION TRUST SCHEMD
PRUDENTIAL LIFE ASSURANCE ZAMBIA LIMITED
MINTU CHITEBE
MUKUPA MWELWA
MUKUPA MWELWA
MUKUPA MWELWA
MUMBA MUSUNGA
MUKUPA MWELWA
ECOBANK ZAMBIA LIMITED PENSION TRUST SCHEME
MUMBA MUSUNGA
SCZ INTERNATIONAL LTD PENSION TRUST
FINANCE BANK
OCTAGON UMBRELLA TRUST FUND
MUMBA MUSUNGA
MUKUPA MWELWA
MUMBA MUSUNGA
Shares Held
52,601,435
%
17.50
24,797,819
8.25
13,961,011
3,968,349
3,702,160
2,237,931
2,157,475
1,505,824
1,309,699
1,238,829
1,238,828
1,108,671
1,017,190
997,466
909,222
866,334
777,025
616,160
563,950
521,075
493,562
378,729
317,432
257,330
226,124
202,112
199,704
194,913
186,900
178,571
175,160
172,836
171,877
165,807
154,460
154,259
141,503
137,931
131,371
4.64
1.32
1.23
0.74
0.72
0.50
0.44
0.41
0.41
0.37
0.34
0.33
0.30
0.29
0.26
0.20
0.19
0.17
0.16
0.13
0.11
0.09
0.08
0.07
0.07
0.06
0.06
0.06
0.06
0.06
0.06
0.06
0.05
0.05
0.05
0.05
0.04
129
Annual Report 2023Zambeef Products PLC 1) Proxies (continued)
ZAMBIA NATIONAL BUILDING SOCIETY
MUKUPA MWELWA
110,266
0.04
NATITONAL INSTITUTE FOR SCIENTIFIC AND INDUSTRIAL
RESARCH
MUMBA MUSUNGA
ACCESS BANK ZAMBIA LIMITED PENSION SCHEME
MUMBA MUSUNGA
TOYOTA ZAMBIA
WORKCOM TRUST PENSION SCHEME PPMZ
MULTICHOICE PENSION SCHEME
BUYANTANSHI PENSION TRUST FUND
ZAMBEZI RIVER AUTHORITY
ZRL PENSION TRUST SCHEME
STANBIC NOMINEES LTD
STANBIC NOMINEES ZAMBIA LIMITED
LUSAKA TRUST PENSION SCHEME
FINAL SALARY
CEC PESION TRUST SCHEME
SANLAM LIFE INSURANCE (Z) LTD
STANBIC BANK ZAMBIA NOMINEES
STANBIC NOMINEES ZAMBIA LIMITED
MUKUPA MWELWA
MUKUPA MWELWA
MUKUPA MWELWA
MUKUPA MWELWA
MUKUPA MWELWA
MUMBA MUSUNGA
MINTU CHITEBE
MINTU CHITEBE
MUKUPA MWELWA
MUKUPA MWELWA
MUKUPA MWELWA
MUMBA MUSUNGA
MINTU CHITEBE
MINTU CHITEBE
100,179
87,409
65,808
59,198
50,334
47,393
40,600
39,504
18,395
14,844
14,558
13,790
8,542
4,550
900
3
0.03
0.03
0.02
0.02
0.02
0.02
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.00
0.00
0.00
TOTAL
120,813,307
40.19
Proxy
Shares Held
10,105
2,000
1,500
700
447
263
200
197
189
100
30
%
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
15,731
0.01
2) Attendees - Shareholders
Name
GULATI SATISH K. & PRABHA M.
ISAIAH TONGA
SHAWA BERNARD
PALIJALA ZULU
CHIPIMPA KAJOBA
ROBERT CHARLES PHIRI
PULE MWANSA
THOKOZILE MVULA
EMMANUEL BANDA
VERNON LONGWANI
JOSHUA MBAO
TOTAL
130
Annual Report 2023Zambeef Products PLC 3) Attendees - Non
Shareholders
Name
MATAKA NKHOMA
JOSEPH SIMATE
HOPE Z KUMWENDA
JAMES NDHLOVU
PRISCA CHIZI
JOSEPH PHIRI
CHANDA MUTONI
MIRIA MAZYAMBE
ANDREW CHIBUYE
LUCY NAMUCHIMBA
MRS GRACE C BULAYA
MCHEMA CHINZEWE
LEWIS MOSHO
VICTORIA KAWONGA
MWANSA MUTIMUSHI
PEARSON GOWERO
MIKE LOVETT
ROMAN FRENKEL
MBOO MUMBA
FAITH MUKUTU
Representing
AUTUS SECURITIES LTD
AUTUS SECURITIES LTD
CORPSERVE ZAMBIA
CORPSERVE ZAMBIA
CORPSERVE ZAMBIA
CORPSERVE ZAMBIA
ENGOMA SOLUTIONS LIMITED
LUSAKA SECURITIES EXCHANGE
PRICEWATERHOUSECOOPERS (PWC)
SECURITIES AND EXCHANGE COMMISSION ZAMBIA
STANBIC BANK Z LIMITED
STOCKBROKERS ZAMBIA LTD
STOCKBROKERS ZAMBIA LTD
STOCKBROKERS ZAMBIA LTD
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
131
Annual Report 2023Zambeef Products PLC FORM OF PROXY
For the 29th Annual General Meeting
I/We _____________________________________________________________________________________________________
(Name/s in block letters)
of ______________________________________________________________________________________________ (address)
being a member/ member of the above-named Company hereby appoint
1. ___________________________________ of _____________________________ or in his absence
Number of votes
(1 share = 1 vote)
2. ___________________________________ 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 General Meeting of the company to be
held virtually on Friday, December 29th 2023 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
3
4
5
6.
7.
To receive, adopt and approve the reports of the Directors,
the Auditors and the Financial Statements for the year ended
September 30, 2023
Confirmation of Directors
Mr. Muyangwa Muyangwa
Confirmation of Directors
Dr. John Rich
Re-election of Directors
Mr. Michael Mundashi SC
Re-election of Directors
Mr. Jonathan Kirby
To approve the annual fees payable by the company to the Non-
Executive Directors, for the year ending 30 September 2024,
unless otherwise determined by the company in a general
meeting, to be revised by 10%
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 ______________________ 2023
Signature ________________________________________________________________________________________________
Assisted by me (where applicable) (see note 3) ____________________________________________________________
Full name/s of signatory/ies if signing in a representative capacity (see note 4) _____________________________
132
Annual Report 2023Zambeef Products PLC
NOTES TO THE FORM OF PROXY
1.
2.
3.
4.
5.
6.
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
133
Annual Report 2023Zambeef Products PLC
Notes
134
Annual Report 2023Zambeef Products PLC Notes
135
Annual Report 2023Zambeef Products PLC 136
Annual Report 2023Zambeef Products PLC