Zambia Sugar
ANNUAL REPORT 2008 Cover picture: The agricultural operations performed well during the 2007/08 season with an increase in the average cane yield being achieved. The onset of early and heavy summer rains affected harvesting and haulage operations, bringing the crop harvest to a premature end in December 2007.
Production of sugar at the Nakambala factory Concerted efforts to improve domestic Preferential sales to the EU increased by 28% was constrained by very wet weather late in market sales in Zambia, including compared to last year, due to additional the season and the earlier than planned mill improvements to the company’s sugar export tonnages, including quota re- closure, with final output amounting to 234 000 distribution and depot systems and the allocations, being awarded to Zambia. The tons of sugar. The factory operated normally promotion of specific pack sizes, resulted in exports included increased tonnages of whilst preparations were made during the year a significant increase in demand, with sales higher-premium speciality sugars. for its expansion in the offcrop period. increasing by 17% above those of last year. ZAMBIA SUGAR EXPANSION
A major agricultural and milling expansion is currently being undertaken at Zambia Sugar whereby an additional 10 500 hectares of irrigated cane fields are being developed by the company and its growers, and the factory expanded to produce 440 000 tons of sugar annually, an increase of 200 000 tons compared to production in 2006/07.
During the year, an additional The agricultural development Milling capacity at the Nakambala The expansion work carried 2 085 hectares of land were includes the establishment of a factory was increased and sugar out during the 2007/08 season developed to cane by growers, comprehensive irrigation scheme to production in the 2008/09 extended to all parts of the factory. whilst in the current 2008/09 pump water from the Kafue River to season is expected to increase More than 1 500 people have been season, a further 7 500 hectares the cane fields. By completion, the significantly. employed and accommodated of cane development is being total length of canals constructed on site by Zambia Sugar to effect undertaken by the company and for the project will measure both the agricultural and factory its growers. 31 kilometres. expansion. Number of shares of inissue (000) Number share (ZK) Dividends per Price :earnings ratio (%) Year-end market price (ZK) share earnings anddiluted Basic (ZK) per Profit year forthe (ZK’million) Profitfrom (ZK’million) operations Revenue (ZK’million) omo rx 43 41 41 40 18 14 19 16 12 4 17 10 3 proxy of Form information Corporate 2 diary Shareholders’ ofmeeting Notice of the independent auditors Report ofresponsibility Statement -contents statements Annual financial statement Value added Five yearreview Corporate governance Analysis ofshareholders report Directors’ andDirectorate senior management locations operating and Company profile CONTENTS FEATURESKEY SUGARP ZAMBIA lc 5426 938 69 629 585 303 127 780 23.8 560 14.90 23.6 2008 2008 570 096 5426 938 101 162
133 371 13.00 9.4 170 18.6 2007
1 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 COMPANY PROFILE
Zambia Sugar Plc is listed on the Lusaka Stock Exchange. Illovo Sugar Limited of South Africa, through its wholly owned subsidiary Illovo Sugar Cooperatief UA, holds 89.7% of the issued share capital. The balance of shares is held by institutional investors and members of the public, including employees.
Zambia Sugar is the largest sugar producer in Zambia. The Nakambala factory is located in the Mazabuka district and produces sugar from sugar cane grown on its own agricultural estates and from that supplied by independent outgrowers. Approximately 48% of sugar produced is sold on the domestic market for both industrial and home consumption, and about 23% is exported to the European Union under preferential trade agreements. The company also manufactures a range of sugar-based speciality products. Molasses, a by-product of the sugar milling process, is sold mainly as stock feed in to both domestic and regional markets.
All sugar is sold under the Whitespoon label and direct-consumption domestic market sugar is Vitamin-A fortified.
The Illovo Group has extensive agricultural and manufacturing operations in six African countries. It cultivates annually approximately 5.7 million tons of sugar cane on its own agricultural estates and produces around two million tons of sugar, which is sold principally to domestic and preferential markets, as well as to regional and world markets. Value-added operations include the production of furfural (used mainly in lube oil refineries for the purification of oils), furfuryl alcohol (used mainly to produce a resin in the foundry industry as a binder for foundry sands), Agriguard (an agricultural nematicide), diacetyl and 2.3–pentanedione (both used as high-quality natural flavourants), BioMass Sugar (a sugar cane-based fertiliser), ethyl alcohol, lactulose (a natural laxative), syrup and speciality sugars.
OPERATING LOCATIONS Nakonde ANNUAL REPORT 2008 ANNUAL HEAD OFFICE Kasama
Mazabuka – agricultural, Mansa sugar manufacturing, packing and distribution
operations. Solwezi SALES DEPOTS Kusumbalesa Ndola Zambia Chipata
Mongu Mumbwa Luangwa
ZAMBIA SUGAR Plc LUSAKA Mazabuka
2
Livingstone # - Risk Management Committee Member Risk Management Committee - # Member Committee Remuneration - ^ Member Audit Committee - * Name Qualifications Joined Operating responsibility Operating Factory Agriculture Corporate affairs Joined 2007 2003 companies of Director 2004 M.Ag.Mgt.(Ag.Econ.) F.C.C.A., A.C.M.A. F.Z.I.C.A., Ltd Sugar –Illovo Director Financial Qualifications 2006 Mech.Eng. H.N.D. 2005 ofcompanies Director (51) H PVeenstra (41) R Dehrmann (46) L Sievu ofcompanies Director ofcompanies Director 2007 ofcompanies Director –Illovo Sugar Ltd ManagingDirector Name C.A.(S.A.) MANAGEMENT 2002 SENIOR 2001 2005 2001 Marketing Director Operations Director B.A.(Hons.) F.Z.I.C.A. A.C.C.A., B.A., B.Com., A.M.P.(Oxon) F.C.M.A. A.C.I.S., Director Financial 2002 2008 B.Sc.(Econ.) K Zarnack*# Human Resources Director Patel D Director Managing 2005 M DMwanakatwe A RMpungwe 2008 Pr.Eng., B.Sc.Eng. D GMacLeod^# –Illovo Sugar Director Operations 2005 Position M.B.A. A BChikwanda*^ B.A., F MBanda B.A.(Pub.Admin.), M.B.A. Appointed B.Compt., M.B.L. Non-executive Directors 2001 S DLangton (47) Sugar Tech. Dip. R MLKatowa (47) B.Acct.(Hons.), A.C.A. D M Kabunda (45) Qualifications (48) J ABlumberg J PMdeRobillard (61)# Executive Directors G JClark(52)*^# Non-executive Chairman Name DIRECTORATE
3 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 4 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 DIRECTORS’ REPORT similar efforts are planned for the new season. new forthe are planned similar efforts ma factory ofthe skills upgrading progress continues in Good tons achieved. being 000 of234 output mill closure, earlier andthe thanplanned season sugarthe withfinal wetconditions late asaresult in very ofthe constrained further was Production problems. mechanical and operational of to anumber disappointing due was season forthe performance factory Overall PRODUCTION comingthe season. in is crop forecast agood and favourable have been period growing year. last less thanthat weather achieved conditions duringthe The tons season substantially was forthe 000 of1088 production cane to 2007. apremature December during end crop harvest Consequently, an harvesting affected rains summer onset ofearly andheavy The achieved. being average yield cane well withanincrease inthe performed operations agricultural The AGRICULTURE breakdownagainst andthat produc protected plant is adequately that condition, strategic is keptinsound to ensure factory that the machinery plant and factory of overhaul and Atotal business. ofZK19the refurbishment million onthe spent 500 was replacement andZK411 ofassets 192 of expansion million further onthe ofZK13 year the capital Sugar Zambia spent During 953 million onthe (2007: 249 978 tons), stocks. supplemented existing from 2007/08of sugar inthe of243 withsales season, 023 tons of ZK127 780 million. Itproduced 233 569 tons (2007: 244 850 tons) company’s taxation recordedThe operations profit after anet REVIEW OF OPERATIONS markets. into andexport ofsugar forsale local production and the company ofthe are cultivation ofsugar the cane activities principal The PRINCIPAL ACTIVITIES to the increased domestic demand andpreferentialto increased domestic the sales. year duringthe sugar underreview due to decreased markets regional market interms ofSADC Sugarsupply Protocol of The arrangements. into SACU the made were also Sales sugars. speciality higher-premium export to awarded The being Zambia. tonnag year, export to due additional year. Preferential to EU sales the by28% increased to compared last increase increasing indemand,withsales by17% oflast those above sizes, resulted pack inasignificant promotionand the ofspecific systems toimprovements anddepot company’s the sugar distribution to including inZambia, market sales improve domestic efforts Concerted MARKETING intenance and operational staff and staff intenance operational and t quality meets global standards. global meets t quality es, including quota re-allocations, es, includingquota re-allocations, d haulage activities, bringingthe d haulageactivities, s included increased tonnages of
5 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 6 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 DIRECTORS’ REPORT demand at that time. However, likely that itappears cutinquotas2010,and is to able make‘across-the-board’ afinal supply and ifthere is animbalance between EU Commission ha The have to tons. amounted 5.6 million andsince sugar quota EUrenunciations reform ofthe implementation domestic continuesThe to take effect EU SUGAR REGIME REFORM additional cane land development of around 7 500 hectares being undertaken byadditional thecompany cane land growers. development undertaken being and its ofaround hectares 7500 increased, with further will be milling capacity factory offcrop, current 2008/09 during the andthe season undertaken to be programme, expansion the of phase final Inthe bygrowers. to cane developed have been ofland2006/07. 085 hectares anadditional2 whilst season, 2008/09 increased forthe hasbeen Milling capacity expanded to produce de are fields being ofirrigated10 440 cane hectares 500 000 tons of sugar annually, andmilling isA majoragricultural currently expansion an increase of 200 000ZAMBIA tons SUGAR - EXPANSION PROJECT compared to production in EUfuture market access ACP forboth states andLDC’s, includingZambia. providing significant arrangements new account withthe involved, various divergent the parties ofthe positions successful conclusionThe negotiations EU ofthese withthe is considered areasonable outcome into taking price will apply. price”, will asa“floor whichimporters below established market, aminimumprice to the amechanism protect As /quota-fr EPA, to entitled will be deliverduty-free 2009, 1October from quotas will states, nolongerapply and ACP–non-LDC which are signatories effect With to an to survei onlysubject but applicable, limits volume access to EU /quota-free the 2009, forsugar withno LDC’s 1October from will have duty-free full effect With states concluding EPA’s regional forsupply in2008/09; place for2007/08, tonnage inadditionto duty-free anew tons, ofapproximately presently to allocated ACP 230000 states, Quantity” will remain in “Complimentary The willperiod continue; licensing duringthis 2009. Import access to 1October 1July2009 from /quota-free ofduty-free a deferment Co (EBA) ButArms” forLeast quota Developed “Everything The EU ACP will bringtoThe existing anendthe Sugar Protocol 2009; on30September arrangements EPA’s inthe access included ofmarket sugar for elements The areasfollows: 2008. operative on1January EPA. African interim the andSouthern Whilst EPA’sEast became they of2008, course duringthe finalised will be (ACP) andPacific Caribbean EU the andAfrican, Stat between (EPA’s) Agreements interim of Economic regional to anumber Partnership establish Negotiations stabilise. will (continued) ee tonnages toee EU, the up to limits; various volume llance if fraud or abnormal volume surges volume occur; orabnormal llance iffraud veloped by the company and its growers, and the factory factory company andthe growers, bythe andits veloped being undertaken at Zambia Sugar whereby anadditional at Sugar whereby Zambia undertaken being following the latest the renunciations,following European the market of the same amount being made available to ACP madeavailable amountthose being same of the be denied an import licence. Thereafter, no minimum d set atarget forquota withdr d set from 1 October 2009 to 30September 2012 will be es have been concluded. Zambia is included inthe isincluded Zambia concluded. havees been untries (LDC’s) increasedto will cover be in2008/09 awals of six million tons, tons, million six of awals of the village electrification programme. villageof the electrification andamenities estate infrastructure ofthe upgrading The Africa. South in to operations Illovo visits technical and secondment of periods from have benefited managers junior Several group’s the are progr following trainees Management training initiatives such as theLeadership company co The andoperatorskills. ofartisan upliftment the season. While development programmes and employee involvement process. Technology transfer an intent company’s ofthe strategic part andcontinues animportant to halfof2008 be first duringthe cutters cane and presented to to be employees all is permanent scheduled Programme Illovo Business Understanding The focus. am from both operation, are competent areasof intheir continuedThe development ofemployees training through initiatives wide-ranging to ensure that personnel are areas towho challenged intheir make ofwork. adifference employees committed and skilled requires which organisation, aworld-class to being company is committed The operation. ofthe business needs bythe are determined Human resource strategy management andoperational HUMAN RESOURCES and Development Programme for senior managers. encompass positions at all levels, emphasis was again placed onthe continued during the year, continued duringthe phase second includingthe ntinues to in from participation theIllovo benefit Group anagerial and technical perspective, remainsanareaof perspective, technical and anagerial amme developed for ofemployees. thisamme developed category d upgrading of local skills was a priority throughout skills apriority was oflocal d upgrading
7 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 8 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 DIRECTORATE AND SECRETARY largely onapreventative managed, basis,actively to being are diseases The HIV/AIDS as such malaria. and epidemics life-threatening against stance pro-active a company takes through The access mostly toHealth care is to clinics. provided all employees company-run NOSA platinummaintaining award its 2-star forsafety prog occupational health andsafety co-ordinated The WELFARE AND HEALTH, SAFETY DIRECTORS’ REPORT ongoing. The programme involvesongoing. The ed high-profile is HIV/AIDS group-initiated people the of its amongst Wellness co-ordination Programme Sugar’s Zambia themselves. programme is due for implementation at Zambia Sugar during the 2008/09 season. is at dueforimplementation 2008/09 Sugar Zambia programme duringthe This facilities. medical mill-based its at Treatment programmes HIV-Anti-Retroviral government-funded in Inanew promotionand the ofahealthy lifestyle. counselling use andtesting, ofprophy voluntary education, diseases, use ofpeer prevention transmitted ofsexually The directors who held office during the year duringthe were: office held who directors The L MSievu Director : Operations :Marketing Director Company Secretary : HumanResources Director on24th adirector appointed was S DLangton April2008 1st onthe 2008 adirector appointed was January D MKabunda Director :Financial ofRisk Management Committee # Member :Managing Director Committee Remuneration ofthe ^ Member Audit ofthe Committee * Member S DLangton R LKatowa D MKabunda J ABlumberg J PMdeRobillard# Audit Committee ofthe :Chairman Executive Directors Patel D Board ofthe :Chairman M DMwanakatwe Committee Remuneration ofthe :Chairman A RMpungwe F MBanda A BChikwanda*^ and Independent Directors Non-Executive K Zarnack*# D GMacLeod^# G JClark*^# Non-Executive Directors (continued) : Chairman of the Risk Management Committee Risk Management the of : Chairman ucation and awareness campaigns, effective t ucation and awareness campaigns, effective and its ISOand its 9001:2000 management accreditation. quality ramme has shown encouraging results with the company encouraging results withthe hasshown ramme negate their impact on the business and the employees employees andthe business onthe impact their negate itiative, Illovo group the hascommenced implementing counsellors process and inthe ofpreventative activities lactic antibiotics, effective screening fortuberculosis screening antibiotics, effective lactic reatment and and reatment ad D MKabunda A BChikwanda F MBanda hr aia ftecmaya t3 ac 08wr sflos company ofthe share asat capital 31 were asfollows: March 2008 year issued at end ofthe ordinary underreviewinthe the office holding directors interests ofthe beneficial The had any material director No company interest withthe year duringthe underreview. inany contract DIRECTORS’ INTERESTS There was no change to the authorised andissued company. changeto share ofthe no was authorised capital the There CAPITALSHARE N o of shares No ofshares No o ofshares 300 000 200 000 100 000 082007 2008
300 000 200 000 000 200 193 342 193
9 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 10 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 Total opne 9 86056 0.34 7.55 18 546 660 49 410 002 408 0.60 16 32 785 666 27 Illovo Sugar Cooperatief U.A. Companies Pensions Funds Banks, Nominees and Trusts 001 andabove 2 000 000 001 -2000 1 000 750 000 001 -1000 001500 -750 000 250 001 000 -500 1 -250 000 Individuals ANALYSIS SHAREHOLDERS OF of holders Number 346 5469805 100.00 5426 938 035 3456 332 95195 1.28 69 591 905 3312 6 650431.78 530 96 473 3363 3 5398752 98.21 5329 807 562 93 5 22934 0.23 12 219 334 35 6 5 4 89.71 358 4868 942 1 0.04 0.05 0.10 0.08 2278 000 727 2648 5697 269 1 4095 238 2 6 7 of shares Number % Institute of South Africa, and benefits from ongoing from research byInstitute theseinstitutions. and benefits ofSouthAfrica, undertaken Sugarcane Research Sugar Institute Milling andthe African Research South company ofthe is amember The capacity. installed existing return from the andsugar and production agricultural inboth expertise technical group provide resources which in-house well-established from company continues to benefit The DEVELOPMENT AND RESEARCH 31 (2007: March 2008 ZK116 561 million) ZK125 was employees above ofthe total in respect remuneration paid The 982 million year forthe ended year asfollows: throughout was the under review employed ofemployees average number The EMPLOYEES roads. municipal of maintenance and station, radio local clubs,the social and sports schools, government orphanages, stations, police donations events, to disa the ofmajorsporting sponsorship either innature include, and are diverse projects Ongoing community participation. on-going to and have aspossible, asmany people to sustainable, reach and benefit and meaningful to be shown be must company To projects representatives. gaincompany support, employee-appointed and community local the of are considered basis onthe that are they bymembers motivated projects surrounding Prospective communities. its of needs specific to the address structured programme investment social company hasanactive The SOCIAL INVESTMENT yearfor the ofZK14.90 share (2007: per ZK13.00) 31 year forthe ended dividend ofZK1.00 March 2008 share (2007: per ZK0.65). will This result inatotal dividend on to held be Meeting AnnualGeneral At forthcoming the ofbusinessclose on16 May 2008. 31 yearof the ended 13 is onthe dividend This payable March 2008. to registered at shareholders 2008 June the is herebyinterim giventhat asecond ofZK6.45 dividend share (2007: per ZK7.25) inrespect declared hasbeen An interim ofZK7.45 dividend share (2007: per ZK5.10) wa DIVIDENDS DIRECTORS’ REPORT Deloitte &ToucheDeloitte were Company’s the year. auditors duringthe AUDITORS uy519Jnay2986 2833 4440 5396 5613 February January March December November October 5518 5139 5750 4979 933 4 2 186 September August July June May April (continued) downstream manufacture, in order product to optimise s paid to shareholders on the 4 January 2008. Notice 2008. 4January onthe tos paid shareholders in the form of cash funding or direct assistance, the the 27 June 2008, the Directors will propose afinal will propose Directors 27 the the 2008, June bled, the uplifting of facilities at district hospitals, at district offacilities uplifting the bled,
2440 11 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 12 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 Association for decisions taken between meetings to be confirmed by way of directors’ resolution. byway ofdirectors’ to confirmed meetings be fordecisions takenAssociation between Inaddition,there is of provision meetings. three Company’s inthe attended who Articles and ARMpungwe each meetings two attended who andMDMwanakatwe DGMacLeod than DPatel meeting, one attended who discussionManagement forboard present andappr matters of Committee ayear Executive where meetings the hasfourregular Company.on the ofdirectors board The having amaterial andother matters issues strategy, effect ofoperational majorprojects expenditure, capital year, the During to hasmet andkey consider policies. board the objectives ofstrategic establishment the Company ofthe through direction the is forsetting to responsible shareholders the ofdirectors board The andis is effective. reviewed regularly system practice international with best comparable governance corporate of standards compliance with ensuring for responsible and is to accountable shareholders directors andth are separated andchiefexecutive Chairman of the has which directors, of board Company hasaunitary The COMMITTEES BOARD AND BOARD THE comp quoted and listed for Code Governance Corporate accountable, responsible and moral manner. the endorses Lusaka Stock of directors board The Exchange inanefficient, Company thatthe ismanaged toensure strive Sugar ofZambia employees and Directors The CORPORATE GOVERNANCE meetings. at both ayear, members meetings attendance year byits full there was hastwo past andin the Committee The access to Audit Committee. the haveauditors unrestricted internalThe operates audit department under an approved financial statements. statutory preparation adopted ofthe in the and practices ofinternal proceduresreview ofthe control andpolicies within operating Committee The members. board executive director, other non- and two comprises is who board anon-executive achairman, ofthe Audit Committee The AUDIT COMMITTEE the Company compliedrespects with the principles of the Code throughout the year under review. and the review of the accounting review ofthe and the andpolicies principles e Chairman is non-executive. The Company’s board of Company’s board The is non-executive. e Chairman a predominance of non-executive directors. The rolesa predominance The directors. ofnon-executive and forensuring that Company’s the internal control Internal Audit internal Charter. the Both andexternal oval. There was full attendance at full other was all meetings There oval. anies (The Code) thatinallmaterial believes and anies (The approved termsapproved ofreference, is forthe responsible highest legal and ethical standards, andto standards, andethical provid legal highest Code is Company aimofthe forthe busi toThe conduct subscribe. must Company to andBusiness hasintroduced Practices The whichall personnel aCode ofConduct senior ETHICS review. internal ofabovementioned breakdown functioning inthe orth hascomeNothing to directors attention ofthe the applied. monitoring procedures effectively are being abovementioned the checklists audit self-assessment aid of internal ofthese controls is andsystems effectiveness The appropriate segregation ofduties. withan personnel andprocedures Illovo Sugar andare bytrained Group implemented policies onestablished based info financial and management of ensure reliability the maintainaccounting proper Company’s the to assets, are control records safeguard designed systems andThe INTERNAL CONTROL an ongoing basis. whil regularly are reviewed projections flow andcash Profit monthly a results are reported Actual plans andbudgets. procedur reporting management Company hasestablished The MANAGEMENT REPORTING practices. management best establishing humanresources, and and technical an business the managing board, bythe determined policies is Management empowered of Committee Executive The EXECUTIVE COMMITTEE OF MANAGEMENT andreviewin matters; legal significant ofcontrols;system measures pursuing forincreasing risk awarenessCompany; throughout the reviewingany ongoing process for risk identification, mitigation and m Company’s ofthe risk effectiveness andoverall adequacy Company’sthe risk philosophy, an andpolicies, strategy terms hasformal ofreference Committee by approved The ayear. twice meets Committee The of Management. director. are atte Meetings and is byanon-executive chaired thre comprises Committee Company’s Risk Management The RISK MANAGEMENT COMMITTEE year attendance. full andthere once was met past duringthe of andmembers directors of compensation ofexecutive is review forthe responsible Committee The directors. comprises non-executive three Committee Remuneration The REMUNERATION COMMITTEE those periods immediately priorto periods announce the those Company are dealing prohibited shares from inthe ofth Company ofthe have who access andofficers toDirectors INSIDER TRADING . The independent auditors independent through the . The g the adequacy ofinsurance coverage. adequacy g the ment of interim and final financial results. interim financial ment of final and e guidance to employees to achieve these aims. toe guidance achievethese to employees anagement; ensuring theestablishment ofacomprehensive the executive Committee of management. The Committee Committee The ofmanagement. Committee executive the rmation produced by the Company.rmation produced bythe Controlare systems management function; ensuring ofan implementation management the function; d ensuring compliance the reviewing withsuch policies; monitored by the internal audit department andwiththe internal bythe monitored auditdepartment gainst approved budgets and compared to the prior year. to prior the compared and budgets approved gainst e Company including periods, during restricted defined unpublished, price sensitive information in respect ofthe priceunpublished, sensitive information inrespect st working capital andborrow capital working st ness with honesty and integrity inaccordance andintegrity withthe withhonesty ness controls and systems has occurred during the year duringthe undercontrols hasoccurred andsystems nded by allnded Committee senior managers oftheExecutive the board. The Committee is forreviewing responsible Committee The board. the e independent auditorse independent to in and responsible for implementing the strategies and strategies the forimplementing and responsible d affairs of the Company, ofthe d affairs prioritising of allocation the e non-executive directors and oneexecutive director e non-executive es, which include the preparation ofannualstrategic es, whichincludethe audit work they perform confirm that confirm perform audit workthey ing levels are on monitored dicate that any material
13 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 5 YEAR REVIEW
PRODUCTION & SALES 2008 2007 2006 2005 2004 Tons '000 Tons '000 Tons '000 Tons '000 Tons '000
Own estate cane produced 1 088 1 242 1 291 1 260 1 218 Total cane milled 1 860 1 877 1 894 1 799 1 788
Sugar production 234 245 248 231 229 Cane sugar ratio 7.96 7.66 7.65 7.78 7.79
Sugar sales 243 250 239 231 237 Local 116 99 92 106 118 Export 127 151 147 125 119
Molasses sales 55 51 47 49 45 Local 42 40 40 35 29 Exports 13 11 7 14 16
FINANCIAL 2008 2007 2006 2005 2004 Notes ZK million ZK million ZK million ZK million ZK million Income statement Revenue (net of VAT) 585 303 570 096 501 833 486 083 432 357 Profit from operations 69 629 133 371 105 702 120 131 124 669 Net financing costs 446 1 903 2 777 843 4 171 Profit before taxation 69 183 131 468 102 925 119 288 120 498 Income tax (refund)/expense (58 597) 30 306 24 085 30 169 26 429 Profit for the year 127 780 101 162 78 840 89 119 94 069
Balance sheet Property, plant and equipment 531 792 118 128 103 119 101 921 98 131 Cane roots 69 850 63 759 66 251 52 899 40 413 Current assets 200 199 187 667 203 608 224 402 178 365 Cash and bank balances 149 383 108 376 50 399 49 765 48 412 Deferred tax liabilities 28 031 47 442 46 654 43 343 39 766 Retirement benefit obligation - 2 075 2 639 2 887 3 778 Current liabilities 101 886 105 791 96 727 121 830 84 574 Long term borrowings 454 209 - - - - Net asset value 367 098 322 622 277 357 260 927 237 203 ANNUAL REPORT 2008 ANNUAL Profitability and asset management Operating margin % 11.9 23.4 21.1 24.7 28.8 Return on net assets 1 % 11.5 39.0 33.3 42.3 52.6
Liquidity and borrowings Current ratio 2 times 3.4 3.0 2.6 2.2 2.7 Interest cover 3 times 156.1 70.1 38.1 142.5 29.9 Gearing 4 % 83 - - - -
Earnings and dividends per share Gain on disposal of fixed assets ZMK 754 580 542 258 48 Basic and diluted earnings per share 5 ZMK 23.6 18.6 13.4 16.5 17.3 Dividend per share 6 ZMK 14.9 13.0 10.2 11.5 10.4 Dividend cover 7 times 1.6 1.4 1.3 1.4 1.7 Dividend paid ZMK 'm 83 304 55 897 62 410 65 395 40 159 ZAMBIA SUGAR Plc
LUSE statistics Ordinary shares in issue '000 5 426 938 5 426 938 5 426 938 5 426 938 5 426 938 14 Net asset value per share 8 ZMK 67.6 59.4 51.1 48.1 43.7 Market price per share at year-end ZMK 560 170 150 110 41 Dividend yield at year-end 9 % 2.7 7.4 6.8 9.2 24.0 Price : earnings ratio 10 % 23.8 9.4 10.3 6.7 2.4 5 YEAR REVIEW – NOTES
1. Return on net assets Profit from operations expressed as a percentage of average net operating assets.
2. Current ratio Current assets divided by current liabilities.
3. Interest cover Profit from operations divided by net financing costs.
4. Gearing Long term borrowings (net of cash) expressed as a percentage of total equity.
5. Basic and diluted earnings per share Profit for the year divided by the weighted average number of ordinary shares in issue.
6. Dividend per share Dividends (interim - paid and declared; final - proposed) divided by the weighted average number of ordinary shares in issue.
7. Dividend cover Earnings per share divided by dividends per share (interim - paid and declared; final - proposed).
8. Net asset value per share Total assets less total liabilities divided by the number of shares in issue.
9. Dividend yield at year-end
Dividends per share (interim - paid and declared; final -proposed) as a percentage of the year-end market price. REPORT 2008 ANNUAL
10. Price : earnings ratio Year-end market price divided by earnings per share.
ZAMBIA SUGAR Plc
15 16 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 retained and reinvested in thecompany for thereplacem was created wealth the of balance The employees. to paid was 61% created wealth the Government. of the and capital of providers employees, to distributed was 82% which of ZK207 million, was 765 year financial current the in created Wealth andreinvestment business. subsequent inthe andthe distribution selling operations, wealth the the Company ha statement reflects added value The VALUE STATEMENT ADDED To banking institutions asfinance Tocosts institutions banking To andother benefits wages assalaries, employees Wealth distributed costs anddistribution Manufacturing Revenue Wealth created Paid to cane outgrowers for income Financing Depreciation Retained profits Wealth re-invested To government as taxation (refund)/paid Deferred taxation To asdividends shareholders Net VATNet to paid government amounts remuneration from deducted tax Employees following: the excludes taxation for togovernment paid Amounts Withholding taxes collected on behalf ofgovernment onbehalf collected taxes Withholding Customs andexcise duties ent and theongoing ofassets development of operations. s generated through its agricultural, manufacturing and manufacturing agricultural, throughs generated its
ZK'million 585 303 125 982 207 765 207 765 (264 768) (264 171 219 (113 443) 83 304 44 476 44 21 252 12 961 11 481 (39 186) (39 (19 411)(19 8325 1021 2008 2008 673 1 119 ZK'million ZK'million 23230 262 418
570 096 262 418 204 111 204 (206 320) (206 116 561 (101 590) (101 45 265 12 254 55 897 29 518 11 270 6925 2135 2007 788 232 926 ZAMBIA SUGAR Plc
ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2008
CONTENTS
Statement of responsibility 18
Report of the independent auditors 19
Income statement 20
Balance sheet 21
Statement of changes in equity 22
Cash flow statement 23
Notes to the financial statements 24 ANNUAL REPORT 2008 ANNUAL
ZAMBIA SUGAR Plc
17 18 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 Chairman Chairman G JClark r r r related and informatio statements annualfinancial the of maintenance are forthe responsible Directors ofadequa The Company ofthe orlossforthat profit andthe period. affairs ofthe view andfair which giveatrue year eachfinancial for statements to financial prepare 1994 164(6) Directors the Act, requires Companies the of Section STATEMENTS ANNUAL FOR FINANCIAL STATEMENT RESPONSIBILITY OF monitored by suitably trained personnel withanappropriate personnel monitored bysuitably trained andto preventmaintain forassets, accountability anddete absolute, not but finan assurance ofthe asto reliability the ofinternal to are are control.designed provide also reasonable, systems forthe responsible Directors These The &Touche.auditors, Deloitte In the opinion of the Directors: ofthe opinion In the year duringthe underreview. hasoccurred and systems to indicate Directors attention ofthe the that any controls, material ofthese procedures breakdown functioning inthe there are due. grounds reasonable fall they to that asandwhen Company to able the pay will debts believe be Company ofthe asat state ofaffairs ofthe view asto is upso andfair giveatrue drawn balance sheet the asto income statement an isupso the giveatrue drawn 31 March and 2008; year ended 31year ended March 2008; ct material misstatements. The systems are implemented and are implemented systems The material misstatements. ct n, which have been audited by the independent external external independent bythe audited n, whichhave been cial statements, and to adequately safeguard, verify and verify safeguard, to and adequately cial statements, segregation of authority and ofauthority segregation te accounting records preparation andintegrity andthe d fair view of the profit of the Company ofthe profit financial ofthe forthe view d fair Managing Director J PMdeRobillard duties. Nothing hascome Nothing toduties.
24 APRIL 2008 PARTNER ALICE JERE TEMBO ACCOUNTANTSCHARTERED &TOUCHE DELOITTE keptproperly inaccordance Act. withthe accounting that, inouropinion,the have weconfirm been Act records andother bythe matter: required andregisters out 1994 Zambian Companies Act, requires thatThe incarrying requirements legal onother Report Standards. Reporting Financial fl cash 31 andits financial performance andofits March 2008, andfair giveatrue statements financial In ouropinion,the Opinion opinion. We that auditevidence the we believe presentation statements. financial ofthe ofaccounting reasonableness andthe used estimate policies internal controls. entity’s ofthe Anaudi effectiveness on the circ that procedures areto inthe audit appropriate design considers internal controls presentation inorder relevant preparation statements financial andfair ofthe to entity’s the dueto whether frau misstatement statements, financial ofthe auditors’ onthe depend procedures selected The statements. procedures to auditev obtain An auditinvolves performing misstatement. auditto the reasonable assuranc obtain andperform and plan requirements ethical Standards with accordance that require wecomply International Those with Standards Auditing. on Our responsibility is to express an opinion onthesefinancial statements onour based audit. We conducted our audit in responsibility Auditors’ circumstances. that inthe are reasonable appr andapplying selecting orerror; duetowhether fraud material from misstatement, that are free statements financial of presentation controls fair and relevant to preparation the internal maintaining and implementing designing, includes: responsibility This Standards. Reporting International Financial pres are preparation andfair responsible forthe Directors The statements financial the for responsibility Directors’ notes. explanatory other and accounting significant policies of asummary and ended, 31 statement income statement, ofcha andthe March 2008, at sheet balance the Plc, comprise Sugar which Zambia of statements We accompanying financial have the audited statements financial the on Report PLC SUGAR ZAMBIA OF MEMBERS TO THE REPORT OF THE INDEPENDENT AUDITORS have obtained and appropriate is sufficient to provide abasis for our audit opriate accounting accounting andmaking policies; estimates umstances, but not for the purpose ofexpressing anopinion purpose not forthe but umstances, t also includesevaluating the ows for the year then ended in year ended ows forthe then idence about the amounts anddisclosures amounts the idence financial inthe about nges in equity and cash flow statement for the year statement forthe then flow andcash nges inequity judgment, including the assessment of the risks ofmaterial risks ofthe assessment includingthe judgment, s made by management, as well as evaluating the overall aswells madebymanagement, asevaluatingthe entation of these financial statements inaccordance statements financial entation these of with view of the financial position ofZambia Sugar Plc financial position ofthe asofview e whether the financial statements are free from material from are free statements financial the e whether our audit, we consider and re weconsider and audit, our d or error. In making those risk assessments, the auditor the d orerror. risk assessments, those Inmaking appropriateness ofaccounting accordance International with port to following youonthe port 19 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 20 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 rftfrteya 780 127 share(ZK) per earnings diluted and Basic year the Profit for Profit before taxation 69 69 183 6 5 Income refund/(expense) tax Profit taxation before financeNet costs Gain on disposal of property, plant andequipment ofproperty, Gain ondisposal Gross profit 255 058 255 Distribution costs Administrative costs Gross profit Profitfrom operations Revenue Cost of sales of Cost for the year 31 ended March 2008 INCOME STATEMENT Notes 2008 2008 Notes 7 4 3 ZK’million (330 245) (330 (103 954) (103 585 303 (82 229) 69 629 69 58597 (446) 23.55 754 ZK’million (282 785) (282 570 096 280 627 131 468 101 162 133 371 (54 488) (30 306) (93 348) (1 903) (1 2007 18.64 580
urn iblte 112 960 Trade andother payables Current liabilities obligationsRetirement benefit Current liabilities tax Provisions duetoAmounts related parties Current oflong-term borrowings portion Deferred tax liabilities Total equity and liabilities 951 224951 471 166 Total liabilities and equity Long term borrowings liabilities Non-current Capital and reserves 367 098 098 367 951 224 Retained earnings Dividend reserve reserve Revaluation Capital redemption reserve Share capital reserves and Capital LIABILITIES AND EQUITY Total assets Chairman Managing Director Managing J PMdeRobillard Chairman G JClark by: 24 behalf onits andwere signed April2008 18. out onpage pages statements20 on financial to The on39 were for approved Board ofDirectors issue bythe withregardstatements are toset responsibilitiesfinancial Company's preparationofthe ofthe the Directors The 6 582 349 13 12 14 15 11 10 balances bank and Cash Current assets tax Trade andother receivables costs overhaul Factory Growing cane Inventories Current assets Cane roots equipment plant and Property, Non-current assets ASSETS at 31 2008 March SHEET BALANCE
oe 31 March Notes 20 21 16 18 19 17 17 6 ZK’million 309 346 309 443 135 443 149 383 531 792 113 497 80 487 69 850 69 21 099 099 21 19 500 500 19 14 568 568 14 40 431 43 439 43 28 031 28 17 720 720 17 11 074 074 11 2 664 2664 3679 2713 2008 2008 40
- - 477 930 477 930 2007 31 31 March ZK’million 296043 260 607 322 622 105 791 108 376 112 234 118 128 47 442 442 47 16 389 389 16 42 873 873 42 42 436 436 42 14 856 856 14 14 545 545 14 63 759 63 13 320 320 13 74 079 079 74 49 517 49 18 141 141 18 3847 2075 2713 40
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21 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 22 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 iied ad(334 - (83 304) - 127 780 (83 304) - 127 780 (55 897) - - (80 862) 098 367 346 862 309 80 101 821 1 162 (55 897) - 431 40 101 162 - 14 568 (70 550) 40 (1 821) 70 550 821 1 713 2 year inthe of paid dividends to basis, amounts share, a cash on per calculated dividend The 1996. in shares preference of redemption the on created was Reserve Redemption Capital The 277 357 228 174 Balance at 31 March 2008 (1 821) 28 220 Dividends paid 18 210 Transfer to dividend reserve of revaluationAmortisation reserve 40 Profit for the year at31Balance 2007 March 2713 Dividends paid Transfer to dividend reserve of revaluationAmortisation reserve Profit for the year Balance at 31 March 2006 by the number of ordinary shares inissue of ofordinary number by the of declared dividend to amount proposed and declared dividends The 5 426 938 035 for the year 31 ended March 2008 STATEMENT EQUITY IN CHANGES OF
. ZK6.45 share per ZK83 304 million 304 ZK83 (2007: ZK7.25) of proposed dividend andthe KmlinZ’ilo KmlinZ’ilo KmlinZK’million ZK’million ZK’million ZK’million ZK’million ZK’million cptl eev eev eev anns Total earnings reserve reserve reserve capital 5 426 938 035 Share redemption Revaluation Dividend Retained Retained Dividend Revaluation redemption Share 1 0 639 283 6 0 322 622 260 607 42 873 16 389 40 2713 (2007: shares inissue of ZK55 ordinary of number 897 bythe million) divided ZK40 431ZK40 million Capital . ZK15.35 (2007 :ZK42 873 million). onthe calculation is based The (2007 :ZK10.30). onthe calculation is based The ZK1.00 share per (2007: ZK0.65), multiplied
Net cash and cash equivalents at end of year 149 383 41 007 ofyear atend equivalents cash and cash Net ofyear at beginning equivalents andcash cash Net equivalents andcash incash increase Net borrowings from Proceeds activities Financing activities before financing inflow cash Net year duringthe utilised Retirement benefits year duringthe raised Retirement benefits netn ciiis11 189 962 72 plant andequipment ofproperty, disposal Proceeds from (12 653) plant andequipment forproperty, Payments Investing activities activities operating from cash Net Dividends paid Income refund/(paid) tax costs financing Net Cash generated from operations Increase andother payables intrade 85 615 (Increase)/decrease andother receivables intrade 629 69 Increase/(decrease) dueto inamounts related parties incurred overhaulcosts Factory inventories in (Increase)/decrease Working capital movements capital inworking movements before flows cash Operating plant andequipment ofproperty, Gain ondisposal expensed overhaulcosts Factory Provisions year duringthe raised ofgrowing value cane Change infair roots ofcane value Change infair Depreciation for: Adjustments Profitfrom operations Provisions year duringthe utilised for the year 31 ended March 2008 FLOWCASH STATEMENT ZK’million (406 464) (406 (394 521) (394 435 528 108 376 108 (83 304) (19 500) 14 856 856 14 21 977 977 21 11 481 481 11 (2 958) (2 (1 003) (1 (1 263) (1 (6 091) (6 4 400 4400 6408 (2 075)(2 (446) (306) 2008 2008 (754) 754 138 -
57 977 977 57 977 57
84 660 168 272 165 869 ZK’million 108 376 133 371 (55 897) (27 279) (14 856) 50 399 50 15 405 405 15 12 254 254 12 (25 812)(25 13 936 936 13 (1 039) (1 (7 877) (1 805) (1 8649 2403 (1 903) (1 2492 2551 4192 1241 (580) 2007 338 596
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23 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 24 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 1.2 1.1 ACCOUNTING SIGNIFICANT POLICIES 1. for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE and loss. and and inprofit asset amountis ofthe recognised carrying andthe sales proceeds the differenceas the between orretirement gainorlossarising plant is andequipment disposal determined onthe ofanitem The ofproperty, 10% - 5 considered. are 25% innovations technological and maintenance lives, programmes useful of annualassessment Inthe values. 10-14% residualManagement annually, reviewsthe values co 5% - 2 25% Commercial Motor vehicles-Non Motor vehicles-Commercial 2.5% - 2 Plant machinery and Furniture,equipment and fittings waterCanals anddomestic works Leasehold buildings are intended readyvalue. Depreciation fortheir commences assets use. the when Depreciation is calculated on a straight to incurred includes all costs line basis at commissioned. towhen Cost relevant the workinprogressclassofassets andtransferred ascapital shown are initially assets atSuch lessany cost, loss. impairment identified are carried underconstruction Assets or,assets where shorter, term relevant the ofthe asset. basis same asowned livesonthe useful underfinance held leases areexpected depreciated overtheir Assets earnings. retained to directly transferred is revaluation revaluation surplus remaining properties inthe attributable the orretirementsale property, ofarevalued subsequentdepreciation the On charge year depreciation onhistorical forthe andthe values. charge based actual the each year to equivalent difference is revaluation the the between madefrom reserve A transfer income decrease statement ofthe previously to extent charged. the Inthis increase case, the is asanexpense. to credited andthat recognised was the decrease asset, same the that except ofequity, a to extent the part and form plan property, of revaluations from arising Increases accumulated depreciation andany losses. impairment andfitting plant andmachinery, fixtures date.balancediffer materiallyvalues fair sheet the at Movableusingfrom determined be that whichwould to dosobutwithsufficient itnecessary deem Directors borrowin capitalised assets, qualifying for and, fees at cost orvaluation less accumulated depreciation an pl fixed and buildings and land Commercial leasehold Property, plant and equipment are andtitlehaspassed. delivered goods iswhen Revenue year ofdiscountsrecognised duringthe related net delivered andsales taxes. of goods Revenue is measured at fair value of the consideration is ofthe Revenue measuredvalue at fair Revenue statements are financial presentedZambian in ofMillionsThese inunits of Kwacha Kwacha (IFRS), onabasis consistent withprevious years. Standards accordance in Reporting Internationalprepared with Financial been havestatements financial The Effective annual rates of depreciation are : Effective bring the asset into asset bring the use and,wh s and motor vehicles are stated in the balance sheet at cost less balances andmotor sheet inthe vehiclesare stated revaluation increase reverses a revaluation decrease for for decrease revaluation a reverses increase revaluation rates estimated to write down the asset to its residual torates to asset estimated the its down write t and equipment are tot andequipment credited revaluation reserves g costs. Valuations are performed as and when the asandwhen Valuationsg costs. are performed received orreceivable andcomprises selling the value nsidering market conditions and projected disposal disposal market projected conditionsnsidering and d any impairment losses. Cost includesprofessionald any losses. impairment ant and machinery are stated in the balance sheet balance sheet inthe are stated ant andmachinery regularity such that the carrying amount does not ere necessary, borrowing costs. borrowing ere necessary, 1.7 1.6 1.5 1.4 1.3 1.8 use or sale. Investment income earned on the tempor use orsale. Investment onthe income earned are substantially intended ready fortheir until assets asthe such time assets, toare cost ofthose added the take asubstantial that period necessarily which are assets assets, ofqualifying to acquisition, orproduction the attributable construction directly costs Borrowing Borrowing costs date,sheet andare discounted is material. to present effect where the value obligation at balance the the to required settle estimate expenditure of the best measured at Directors’ the made. obligation, andareliable the Provisions estimate be obligation amount can ofthe ofthe to settle are events,past where itis probable that of resources aneconomic outflow will bebenefits required embodying Provisions obligation asaresult Company the are when of hasapresent recognised orconstructive legal Provisions to realisable down net value. their and written average off. cost withobsolete items written being Re basis ofdetermining The cost is th and distribution. ofcompl ofbusiness,course lessall costs estimated to present realisable andcondition. their Net location va overhead andthose costs labour where applicable, direct n and cost of lower at inventories the Sugar are valued Inventories life. useful expected full overits in written-off Thisexpenditure is financial year end. sugar commencing after season new inpreparationforthe factory the Factory overhaul comprise costs in expenditure actually Factory overhaul costs sucroseestimated le price season, following forthe annually, is ofgrowing value determined cane sucrose fair onthe content atThe the based valued incane life. remainingfor the expected average costofeach escalated year bythe ofplanting adjusted determined value at fair are valued roots Cane cane growing and roots Cane utilised. probable that profit taxable willbe available agains differences thatextent it is to the temporary forall are deductible recognised assets taxation Deferred statements andtheir financial the per values timing differences is ratescomputed tax statutory by applying enacted to any differences carrying between forfinancial that arefrom inwhichthey recognised ofitems of purposes recognition fortax arise the from differences can differences. Temporary temporary alltaxable for are liabilities recognised taxation Deferred purposes. fortax ordisallowed foritems year results forthe asadjusted onthe whichare non-assessable is based Tax represents tax. currently sum anddeferred the tax payable ofthe expense currentlyIncome payable tax Taxation All other borrowing costs are recognised inprofit are an recognised costs All other borrowing capitalisation. for eligible costs borrowing the from is deducted assets qualifying on expenditure tax base, andaccountedtax tax. forasdeferred ss estimated costs forhar costs ss estimated accounting purposes. The tax effect of these temporary ofthese temporary effect tax The accounting purposes. d loss in the period in which they are inwhichthey incurred. period d lossinthe e average method. Maintenancee average at method. is inventory valued t which the deductible temporary differencesbecan temporary deductible t whichthe et realisable value. Cost comprises direct materialset realisable value. Cost comprises direct and, etion and costs to be incurred inmarketing, selling to incurred etion andcosts be ary investment of specific specific of investment ary income or expense inadifferent accounting income orexpense period dundant and slow moving inventories slowmoving dundant and are identified lue is estimate selling price the ofthe ordinary inthe curred on plant and equipment for the overhaulof forthe onplant andequipment curred of time to oftime getready intended fortheir use orsale, s that have been incurred s that have been vesting and cane haulage. cane and vesting borrowings pending their in bring the inventories inbringthe 25 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 26 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 1.9 for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE 1.13 1.12 1.11 1.10 into Zambian Kwacha at rates the at re ofexchange the inforeign andliabilities denominated assets Monetary date. transaction onthe ruling Transactions inforeign denominated currencies are into converted Zambian Kwacha at rate the ofexchange transactions Foreign currency debts to suppliers with debts due from customers. to duefrom debts withdebts suppliers to US the Dollar,respect Euro Rand.Cu African andSouth risk to aris foreign Companycurrency isThe exposed Currency Risk andmatchinginvolves estimation the inflowsandoutflows. ofcash committee basis executive bythe and onaweekly isThis onadailybasis monitored Financial bythe Director, Company the Treasurer Managing Director, andthe Risk Liquidity rates. in interest movement Company’s the positions interst rateaccordingmanagement exposures committee to expected Taking cognisance oftheCompany’s oftheseasonality cashflow long and term interest rate therisk forecasts, risk rate Interest Financial riskmanagement income statement. inthe is recognised amounts amount andcarrying recoverable the between difference andany lossonthe is asset impairment determined amount ofthe recoverable estimated the andto is recoverable measurevalue by any impairment asset the life is determinewhether to overthe remaining used useful flowsofthe related cash assets net undiscounted Anestimate future ofthe impaired. may be plantandother assets andequipment property, is evidenceAn assessment that date madeat each balance sheet to there is objective determine whether review impairment Asset contribution is employer’s to charged income statement. the The and employees. exception of expatriate withtheMembership, National (NAPSA) the Pension into came 2000, Authority effect. 1February On employees, is compulsory are rendered byemployees. year related inwhichthe services inthe Contributions to expense contribution retirement defined planspay schemes. asan are recognised severance through and contribution defined employees Company forits provides retirementThe benefits Retirement benefits inaccordanceborrowings Company’ withthe orredemption costs) settlement andthe transaction the proceeds(net interest Any rateof difference between method. using cost, effective the at amortised measured are subsequently and value, at fair measured are initially overdrafts and loans bank Interest-bearing date.at balance sheet the Trade at are cost. stated andother payables rates exchange relevant on based value, fair at measured are equivalent cash and Cash value. fair represents Trade payables. andtrade borrowings receivables are st bank equivalent, cash cash and receivables, are trade instruments financial Company’s principal The Financial instruments arise. inth are included such transactions of settlement and
(continued) s accounting policy for borrowing costs. forborrowing s accounting policy and monthly contributions are employer madebyboth and controlled through flowmanagement cash which e income statement in the financiale income statement year inthe inwhichthey ing from various currency exposures primarilywith exposures variousing from currency porting date. Gains andloss porting of borrowings is recognised over the term ofthe overthe is of borrowings recognised currencies at the balance sheet date balance atcurrencies are sheet the translated rrency risk is managed by matching the currency of bymatching risk is managed currency the rrency ated at cost lessprovision This forimpairment. reference to fair value. If such evidence exists, es arising on translationes arising on
2.1 UNCERTAINTY ESTIMATION OF SOURCES KEY AND ACCOUNTING JUDGEMENTS CRITICAL 2. Kwacha/Euro Dollar Kwacha/US Kwacha/Rand any. The recoverable amount is the higher of fair value less costs to inuse.any. andvalue lesscosts sell value offair amount is recoverable higher the The loss,if impairment ofthe inorder to is extent asset determine amount the assessed ofthe recoverable the Ifany such impaired. indication may exists, be plant and other assets that andequipment items ofproperty, at each hasassessed management judgement, its In making Impairment of assets statements. the financial in recognised amounts the on significant effect Management fo hasmadethe periods. current both andfuture revision ifthe revision ofthe affects periods andfuture period orinthe period, onlythat estimate revision inwhich the is ifthe revised affects period estimates inthe are recognised estimatesThe and underlying assumptions are reviewed onan ongoing basis. Revisions to accounting estimates. that are considered resultsfrom may andother to these factors relevant. differ historical Actual experience be that are on assumptions estimates readily not andassociated apparent are based other sources. The from torequired estimates make andassumptions judgements, ab Company’s application ofthe innoteIn the accounting 1, whichare described are policies, directors the Critical accounting judgements made by management 10% foreign currency sensitivity 10% currency foreign relevant the currency.against indicates anincrease/(decrease)below wherestrengthens the Kwacha inprofitequity orlossand other endfora10% translationtheir at period the changein items adjusts and monetary denominated foreign currency outstanding only includes analysis sensitivity andrepresents ofth assessment management’s personnel currencies. 10%currencies. rate repo when used is sensitivity the to a10%details company’s the sensitivity increase and company’s relates rate exchange exposure The mainlyto US the Dollar, Euro. table Randandthe following The Exchange rates most affecting the performance of the ofthe areasfollows: Company performance the affecting most rates Exchange Monetary assetsMonetary Monetary liabilitiesMonetary ae t3 ac Average year for at31Rates March llowing judgement, apart from those involv those from apart llowing judgement, 2008 3650 5764 (3 097) 097) (3 (3 892) (3 450 2008 795 SDla ARn Euro SA Rand US Dollar 2007 5746 4275 587 2007 (732) (950) 218 rting foreign currency internally to key foreign management currency rting foreign currency rates. Apositive/(negative) rates. foreign currency number decrease in the Kwacha relevantdecrease inthe the foreign against 2008 balance sheet date there is balance sheet whether anindication 3865 5505 2486 (1 091) (1 out the carrying amounts of assets andliabilities ofassets amounts carrying out the 538 3 578 2008 e possible change in foreign exchange rates. The The rates. exchange inforeign change e possible ing estimations, that have most the 2007 4926 3818 2123 2 256 541 2007 (134) (4 511) (4 (4 674) (4 2008 163 (1 701) 701) (1 (1 702) (1 2007 1 27 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 28 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 valuation cane Growing Cane valuation roots lives useful and values residual equipment and plant Property, 2.2 for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE adjustment to the carrying amounts of assets ofassets amounts toadjustment carrying the date balance ashaving sheet the that asignificant management risk havecausing of assessed amaterial are other key no assumptionsThere concerning futu the statements. to financial the ca The rates. exchange currency foreign well asrelated to crop into will assess forthcoming the whichmarkets th Inassessing programmes. harvesting and conditions andsucrose cane management to expected the assess co lessestimated season, following sucrose at estimated co is the Growing valued cane innote is 11 disclosed roots of cane statements. to financial the value carrying crop. the from The ofratoons bymanagement averagean estimation expected ofthe number are averageroots costofplanting escalated cane The byZK 843 million currentreduce depreciation inthe the financial expense year. areheld ofthis assuming assets reassessment, the effect it of certain life useful year financial the the During statements. plant innote is andequipment disclosed 10 ofproperty, value to financial the are carrying considered. The innovations technological and maintenance lives, programmes useful Inassessing values. disposal projected basis. Management residu line reviews the straight the livesusing anticipated residual to overtheir useful estimated values down their are written assets These statements. the financial in recognised amounts the on significant effect most the date at balance sheet that the haveassumptions concerning key andother sources future the ofuncertainty In the process of applying the Company’s the processIn the accounting ofapplying uncertainty Key ofestimation sources sts for harvesting and transport. The estimated sucrose estimated content The requires andtransport. forharvesting sts (continued) and liabilities withinth ems of plant and equipment were extended. The financial The were extended. equipment plant and ems of adjusted for the remaining expected life. This requires life. This remaining expected forthe adjusted ntent sucrose at estimated price the valued forthe al values annually considering market conditions and be sold and assess the domestic and export prices as andexport domestic the andassess sold be policies, management ha management policies, rrying valuerrying of growing cane is disclosed in note 13 yields for the following season following considering forthe yields weather e estimated sucrosee estimated price, management is required re or key sources of estimation uncertainty asatre orkey sources uncertainty ofestimation until the end of their estimated useful lives,is to useful estimated until endoftheir the e next financial year. financial e next s made the following key following s madethe 5. NET FINANCE COSTS NET 5. .POI RMOEAIN PROFIT FROM OPERATIONS 4. REVENUE 3. Interest received Interest Interest paid (see noteManagement fees 20, 38) page Factory overhaul costs expensed overhaul costs Factory Exchange losses/(gains) Exchange Employeesexpenses benefit Employer contributions to pension (see funds note 23, 39) page Company management ofthe withthe -inconnection Company ofthe -asdirectors emoluments: keymanagement and Directors’ Depreciation expense Change in fair value ofgrowing value cane Change infair roots ofcane value Change infair Charitable donations forother services - Fees - Audit fees Auditors’ remuneration charging following: the after determined been Profit has from operations market Export marketLocal asfollows: segments business From secondary growing Cane Sugar production Revenue represents proceeds receivable business from thefollowing primary segments: - Other expenses - Other ZK’million 585 303 585 303 275 300 310 003 426 381 158 922 122 322 14 856 856 14 11 481 481 11 (1 263) (1 (6 091) (6 (1 119) (1 3660 2880 4528 8859 1 426 426 1 6931 2008 2008 ( 446) 452 310 673 673 84
ZK’million 295 906 570 096 570 096 372 273 197 823 274 190 112 628 15 405 405 15 12 254 254 12 (8 022) (8 (2 135) (2 9049 (1 903) (1 2492 3933 4242 4192 2007 290 896 280 89 232 24
29 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 30 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 .INCOME TAX REFUND/(EXPENSE) 6. 7. BASIC AND DILUTED EARNINGS PER SHARE EARNINGS DILUTED AND BASIC 7. .DIVIDENDS PAID 8. Number of ordinary shares inissue (millions) ordinary of Number shareat -final be per proposed to AGMDividends proposed share -seco per Dividends declared eoclaino aainrt % to entitiesCompany applicable agricultural taxation : rate oftaxation Reconciliation Taxation receivable/(payable) Payable in respect of the current ofthe year inrespect Payable Payable in respect of the previous ofthe year inrespect Payable current (assets)/liabilities: under Included Total taxation rate change- tax - Expenses disallowed for tax purposes fortax disallowed - Expenses to: due incharge increase/(reduction) less: Paid year duringthe year the during utilised Credit Tax ofprevious years inrespect refund - current Deferred taxation - overprovision inprioryear - current Zambian company taxation - Permanent differences rate 35% from - Changeinincome tax to 15% - Taxationbusiness rate units differentialsbetween Earnings per share per Earnings rate taxation of Effective inprioryears - Overprovision ZK1.20 per share (final 2006) - paid 22 August 2006 6 6 512 677 27 21 708 ZK0.65 share (final per paid 23 2007)2007 - August ZK7.25 share (second per interim 2007) 15 -paid 2007 June ZK5.10 share2007 interim (first per paid 3January 2007) - ZK1.20 share (finalpaid 22 per 2006 - August 2006) share (second per ZK4.00 interim 13 -paid 2006) 2006 June yearthroughout the of5426 938 035 (2007: ZK 101 162 shares inissue ofordinary million) number bythe divided onprofit year share forthe of is per ZK Earnings based 127 million780 ZK7.45 2008 share interim (first paid 4January per - 2008) for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE nd interim 24 declared April2008 (continued) ZK’million ZK’million (24 758) (24 83 304 (14 545) 39 345 40 431 40 5427 58597 39 186 39 39 186 39 24 641 641 24 12 265 265 12 3528 2 664 2664 7146 2781 (84.7) (34.8) 2008 2008 (56.6) 23.55 (10.3) 6.45 1.00 15.0 2.1 ZK ZK
- - -
5427 % 35.0
1.8 (12.9)
ZK’million ZK’million (30 306) (40 357) (40 (30 534) (30 (14 545) 55 897 (10 839) (29 518) 25812 1016 (788) 2007 18.64 0.65 7.25 23.1 (0.8) ZK ZK
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.SEGMENTAL ANALYSIS 9. e se au 1392 1316 367 098 173 186 193 471 912 166 167 340 112 960 303 826 917 45 850 69 043 67 Net asset value 349 582 850 69 Deferred tax liability Long term borrowings 140 610 Non-current liabilities - 972 208 Provisions duetoAmounts related parties ofborrowings term portion Short Trade andother payables liabilities Current Cash and cash equivalents Current assets tax Trade andother receivables costs overhaul Factory Growing cane Inventories Current assets Cane roots Profit before taxation 54 273 14 910 69 183 531 792 14 910 175 983 54 273 355 809 Depreciation charge year forthe Additions at cost year of atbeginning Balance Property, plant and equipment Profitbefore taxation Revenue Year to31 2008 March follows: as growing cane and into companyproduction the areclassified of sugar segments business primary The production KmlinZ'ilo ZK'million ZK'million ZK'million 288 038 155 097 443 135 443 155 097 038 288 1933 - 149 383 - 149 383 2311 1194 425 145 141 974 283 171 426 381 158 922 585 303 303 585 922 158 381 426 8 6 808 118 128 38068 060 80 1 4 381 43 439 23891 19 548 19 500 - 19 500 500 19 - 500 19 1 8 223 28 031 12 243 15 788 1 7 2 21 099 3222 17 877 42 910 37 577 80 487 487 80 577 37 910 42 1 7 4 17 720 3544 14 176 ( 2) 409 (11 481) (4 059) (7422) 2 664 - 2 664 2664 - 2664 718 386 11 074 3876 7198 279 2 3679 920 2759 Sugar
- 1347 113 497 113 497 - growing Cane
TOTAL
31 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 32 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 .SEGMENTAL ANALYSIS (continued) 9. for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE e se au 1357 1915 322 622 169 115 517 49 153 507 372 32 105 791 17 145 24 262 759 63 81 529 043 296 Net asset value 759 63 obligation Retirement benefit 123 922 Deferred tax liability liabilities - Non-current 172 121 Taxation payable Provisions duetoAmounts related parties Trade andother payables 570 096 Current liabilities 118 128 468 131 Cash and cash equivalents 197 823 Trade andother receivables 068 38 50 239 costs overhaul Factory Growing cane 372 273 Inventories Current assets 060 80 81 229 roots Cane ofdisposals value book Net Depreciation charge year forthe Additions at cost year of atbeginning Balance Property, plant and equipment Profit before taxation Revenue Year to31 2007 March (continued) production Z'ilo Kmlin ZK'million ZK'million ZK'million 108 376 - 108 376 108 - 376 108 5 7 712 74 079 17 102 56977 2 8 9 27 279 2890 24 389 32 572 9 864 42 436 436 42 864 9 572 32 14 856 - 14 856 856 14 - 856 14 16 193 31 249 47 442 442 47 249 31 193 16 1 7 4 13 320 1745 11 575 1 1 2 18 141 1824 16 317 1 1 3 14 545 4435 10 110 103 119 002 40 63 117 ( 3) 489 (12 254) (4 819) (7435) 287 8 3847 980 2867 Sugar 5 2 2075 1123 952 (1) )(16) (5) (11)
- 1224 112 234 112 234 - growing growing Cane TOTAL TOTAL 10. PROPERTY, PLANT AND EQUIPMENT AND PROPERTY, PLANT 10. Disposals - - (2 523) (18) - (2 541) (2 - 145 425 140) (2 145 425 - - 279 27 - (18) 279 27 (18 561) - 523) (2 - - - 686 - 407 624 (11 093) 6103 140) (2 232 425 - - 413 201 803 11 432 - - 9623 18 648 5007 354 52 - - 176 664 10 764 2149 76 220 - 4218 2462 774 48 169 59 - 10 351 1455 597 66 Balance at 31 March 2008 45 907 57 020 Disposals Transfers 62 379 Additions Balance at 1 April 2007 55 565 Disposals Transfers Additions Balance at 1 April 2006 valuation Cost or ipsl - - ( 2) 8 (2 541) (2 124) 118 128 11 481 (18) 18 648 531 792 615 92 - 12 254 (2 523) agents dulyauthorised andtheir members 2244 232 425 In accordance 193 withSection 1994 Companies Act, ofthe Re the 83 675 assets. value ofthese reasonfair no value and to consider that there iscarrying amaterial the differencebetween 075 2 - 15 495 855 926 38 opinion,gi land andbuildings andintheir (2 124) appropriate, depreciated replacement at cost, 31 to March revalue leasehold 1996. need have the 73 reviewed 545 Directors The Buildings valuers on were revalued by independent expert 39 678 14 906 - 357 9 6692 - commissioned. when class ofasset 1589 - to workinprogress is relevant andis ascapital the initially transferred shown under construction onassets Expenditure 42 063 798 46 8520 37 448 2503 5916 585 481 - 42 781 Balance at - 31 March 2007 33 279 422 29 425 232 6931 1431 3345 Balance at 31 March 2008 11 432 26 919 16 388 Net amount carrying - 29 487 1404 52 354 14 957 Balance at 31 March 2008 23574 Disposals Charge 76 220 for year - 13 553 Balance at 1 April 2007 Disposals 20 243 Charge for year Balance at 1 April 2006 926 38 Depreciation At cost valuation At Comprising: KmlinZ’ilo KmlinZ’ilo KmlinZK’million ZK’million ZK’million ZK’million ZK’million ZK’million eshl ln oo untr aia Total Capital Furniture Motor Plant Leasehold ulig ahnr itnspors progress fittings machinery buildings adadadvhce n work in and vehicles and land and 5 6 620 5 5 142 4522 624 407 425 232 11 432 52 354 76 220 59 169
ven the consistentven the conditions economic there prevailing inZambia, is andstable at registered office the the of Company. the basis of open market value for existing use, basis market forexisting orwherethe value ofopen gister of Land and Buildings is available for inspection by andBuildingsgister is forinspection ofLand available 33 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 34 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 3 GROWING CANE 13. 2 INVENTORIES 12. ROOTS CANE 11. (continued) EQUIPMENT AND PROPERTY, PLANT 10. The area to harvest for the following season is season following forthe area toThe harvest at value endofyear Carrying content in cane of of cane in content which is anticipated to yield 11 253 hectares at 31 the roots cane ofvaluing was purpose March area forthe 2008 undercane The Change in value fair ofyear at beginning value Carrying ofgrowing value ca carrying The of the growing cane was estimated at estimated was 67%. growingof the cane Maintenance stores at value endofyear Carrying Change in value fair ofyear at beginning value Carrying is asfollows: reconciled roots ofcane value carrying The debenture (see note 17). byway ofamortgage secured loans landandbuildings andallAll pl leasehold A term borrowings Interest onother short paid Interest accrued onlongterm borrowings (see note 17) asfollows: are disclosed assets fixed financial inthe capitalised costs Borrowing Finished goods -Sugar goods Finished Provision maintenance forobsolete inventory ssets pledged as security for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE (2007: 11 050 hectares). 15.10% 15.10% (2007: 15.10%). at 31 the As average the March maturity 2008 121 hectare per cane tons ne is asfollows: ne reconciled ant and machinery have been pledged for pledged have been ant machinery and year to 31 under included March 2008 10 659 hectares 659 10 (2007: 116 tons) at asucrose (continued) (2007: 10 897 hectares) 10 (2007: hectares) 897 ZK’million 112 234 113 497 22806 38825 35 234 234 35 69 850 69 43 439 43 63 759 63 18 681 681 18 (3 591) (3 8205 1263 6091 4125 2008 2008 63 759 (2 492) - - 66 251 66 - ZK’million 112 234 116 426 22272 20 164 20 42 436 436 42 24 520 520 24 (2 248) (2 (4 192) (4 2007
15. TRADE AND OTHER RECEIVABLES OTHER AND TRADE 15. COSTS OVERHAUL FACTORY 14. 16. SHARE CAPITAL SHARE 16. Gross tradereceivables molasses. Trade ofsugar and sale ofthe receivables comprise receivable inrespect amounts Balance at endofyear toCharged income statement the year following ofthe inrespect Incurred year of atbeginning Balance Details ofmajorshare report. Details dealings Directors' inthe are disclosed Balance at endofyear year offduringthe written Amounts year of atbeginning Balance debts. provisionMovement inthe fordoubtful Balance at endofyear receivablesOther Provision debts for doubtful 5,426,938,035 Issued paid: andfully 5,535,000,000 Authorised: approximates value. fair their andother amount receivables oftrade consider directors that carrying the The
shares ofZK0.50 each shares of ZK0.50 each ZK0.50 shares of ZK’million (14 856) 34 356 21 099 099 21 19 500 500 19 500 19 17 960 16 777 14 856 856 14 (1 183) (1 1204 4322 1183 2767 2713 2008 2008 (21)
(15 405) ZK’million 15 405 405 15 14 786 786 14 14 856 856 14 856 14 30261 13 582 582 13 18 141 141 18 (1 204) (1 1204 1503 2767 4559 2713 (299) 2007
35 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 36 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 7 LONG-TERM BORROWINGS 17. amounts to amounts to 31 period forthe loans above onthe accrued (iv) costs Borrowing March 2008 company. withthe connection insurances, in ofall licenses, or held used benefit andthe andagreements consents including material claims contracts, property under insurances and all proceeds under company'sof the presentti rights, andfuture charge onfixed andafirst all mortgage legal byway ofafirst (iii) All are loans secured 2012. byDecember repayable are fully 31 interestrate using of March effective the 2008 aggregateThe loans ofthese 13.38%. torates applied date are 13.23%, 12.54% and12.99%. at accrued the Interest hasbeen months plus a2%margin. ofthree The ofeach interest period rate beginning at the interestruling the at day91 (ii) Loansfinancial from institutions and attract other T-Bill 2011.by November 31 interestfull rate in loan is The repayable of using March effective the 2008 18.09%. 2007 at accrued plus the26 a2%margin. Interest October hasbeen weightedthe average rate of15.38% dated Bond 3year forthe Government interest at 17.38% attracts Ireland Sugar Illovo from loan annumbeing (i) The per 2013 2012 2011 2010 2009 31 ending years March: following inthe repayment for aredue amounts The Current portion Current Less: borrowings Total institutions other and Financial -Illovo Sugar Ireland parties Related for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE ZK 18 681 million (see Note 10). Note (see tle andinterestmovable and fixed inall its (continued) 2008 - 2012 - 2008 2007 - 2011 - 2007 amn Interest payment er fEffective Years of rate (%) 80 275 674 18.09 33 178 535 13.38 ZK’million 240 605 108 305 454 209 454 209 443 135 443 52 687 41 538 11 074 (11 074) 2008 2008 - - - ZK’million 2007 ------
8 DEFERRED TAX LIABILITIES 18. 19. RETIREMENT BENEFIT RETIREMENT OBLIGATIONS 19. Property, plant and equipment plant and Property, provision: of Analysis Balance at endofyear Tax losses Tax Provisions roots Growing andcane cane costs overhaul Factory rate -Changesintax differences -Temporary income: to Charged year of atbeginning Balance no further obligation in respect ofretirement gratuities. obligation inrespect further no note (see have company 23). retired andthe now hasagreements employees These ageof were overthe 50 who foremployees covered by retirementcollective benefits of obligations Retirement previously benefit in representedpayable respect amounts year of atbeginning Balance Balance at endofyear Amounts paid during the year duringthe paid Amounts Provision year forthe ZK’million (46 325) (12 265) 47 442 442 47 27 502 502 27 44 574 28 031 28 031 28 (7146) (2 075) (2 2925 2075 (645) 2008 2008 - - 47 442 442 47 ZK’million 46 654 26 399 399 26 47 442 442 47 17 370 370 17 (1 805) (1 2639 2075 1241 4011 (338) 2007 788 - -
37 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 38 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 20. The following transactions were carried out with related parties: outwithrelated parties: were carried transactions following The Illovo Sugar Limited Sugar Illovo Ireland Sugar Illovo Ltd Supply (Pty) African East AMOUNTS DUE TO DUE RELATED PARTIESAMOUNTS Republic of South Africa. ofIllovo inthe Sugar aCompany Limited, incorporated asubsidiary Netherlands, the in UA, incorporated Cooperatief Sugar by Illovo is held shareholding majority The Plc. Sugar Zambia company of All related parties are fellow subsidiariesAll related of parties page 36. innote 17, are disclosed transactions related party of inrespect provided guarantees and basis. Securities length onanarms are conducted transactions All related party innote are 4. disclosed Management fees services. Company withIllovo Sugar Ireland is supply ofmanagement forthe contracted The East African Supply (Pty) Ltd Supply (Pty) African East Illovo Sugar (Malawi) Ltd (Malawi) Sugar Illovo Limited Sugar Illovo Ireland Sugar Illovo for the year 31 ended March 2008 STATEMENTS FINANCIAL TONOTES THE Illovo Sugar Limited, the ultimate the Limited, holding IllovoSugar (continued) management Purchases services 38 004 - 38 004 004 38 - 004 38 42 845 884 43 729 729 43 884 845 42 8 5 9 85 847 1296 551 84 272 - 2772 - 2772 3 42 1342 412 930 and ZK’million 13 348 348 13 17 720 720 17 1349 3023 2008 2008 Interest - paid 13 320 ZK’million 4567 7871 2007 882 -
Total 1 PROVISIONS 21. 4 CONTINGENT LIABILITIES 24. BENEFITS RETIREMENT 23. CAPITAL COMMITMENTS 22. Contracted Utilised during the year duringthe Utilised Provisions year madeduringthe year of At beginning ZK72 526 million related supply forthe ofexpansion plant andequipment. guarantees amounting to ofpayment millionZK33 896 andin respect amounting ofcredit to ofletters are contingentThere liabilities inrespect ofretirement gratuities. obligation inrespect future no and at 31 balance nil(2007: was the March 2008 ZK 2075 million). company has The movement in the provision at current rates ofpay. ofyears service number onthe The is based is gratuity The detailed in note 19 to retirement ageof50the at that date fund. to contribution defined didnot transfer the andwho benefit obligationsfrom 1April 2003 this effect retirement. With on to paid employees retirement SugarZambia Plc gratuity provides forapost Gratuity paid on retirement pension scheme. contribution defined the ZK 4528 million (2007: ZK of 3933 year duringthe inrespect million) expensed was Anamount of incurred. are when recognised pensioncosts andthe pension scheme from 1May 2002,contributionZambia adefined Sugar effect established Plc With Defined contributionpension scheme 17). note (see Capital expenditure will financed be from cash resources long and borrowingsterm not contracted but Approved Provision fees forlegal Provision forleave pay owingto employees asfollows: Analysed gratuity is only paid to employees over over employees to paid only is gratuity ZK’million 344 497344 328 025 025 328 16 472 472 16 2008 2008 3 847 1 287 2 392 3 679 3 679 ( 306) 138 138
ZK’million 843 817 838 614838 (1 039) (1 4 548 3 847 3 847 2007 5 203 1 528 2 319 338 338
39 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 40 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 24 April2008 Company Secretary L MSievu order Board By ofthe A member entitled to entitled andvote attend Amember at To transact such other business as may be transacted at an annual general6. Other meeting of business transact the following business: following the transact will be held at the Intercontinental Hotel, Lusaka, Zambia on Friday, 27 June 2008 at 11h00 to the transfer secretaries not later not secretaries than12h00 transfer the onWednesday, 2008 25June or to office Company’s reach registered the forwarded Company. be should forms Proxy ofthe amember be not need proxy andvote stead.to speak The attend, inhis/her members. Notice is hereby giventhat 46 the NOTICE OF MEETING To elect Ms D M Kabunda and Messr S D Langton as directors, and to re-elect andto re-elect asdirectors, SDLangton To andMessr MsDMKabunda elect ofdirectors’ Election 2. To receive annualfinancial andadoptthe 1. Financial statements That a final dividend ofZK1.00 dividend afinal That 31 share year forthe ended per recommended March 2008 Declaration of final dividend 5. year and financial 2008/2009 the for asauditors &Touche re-appointed be Deloitte That ofauditors’ Appointment 4. at ZK 105 confirmed Company ofthe be to directors million payable annualfee the That fees ofdirectors’ Determination 3. at ofbusiness close on21 on22 andpayable July2008 Company ofthe books inthe to registered all declared shareholders be directors by the remuneration. their to authorised fix be that directors the (March yearfor the endingMarch 2007: 2008. ZK 105 million) forre-election. themselves retirewho eligible, byrotation, andwho, offer being interms Companies Act, ofthe andMDMwanakatwe, andMsRMLKatowa DGMacLeod ABChikwanda, Messrs th annual general meeting of members of the Company ofthe ofmembers meeting annualgeneral the meeting is to entitled meeting aproxy the appoint statements for the year ended 31 year forthe ended statements March 2008.
August 2008. . CORPORATE INFORMATION is nei elrdOctober Declared October May June March June Final Second interim First interim Dividends statements financial and Annual report year announcementProfit forthe Interim report statements and profit Reports meeting Annual general year end Financial Bankers : Barclays Bank of Zambia of Bank Barclays : &Touche Deloitte : (260) 21 1234082 [email protected] : (260) 21 1223174 : : 37268, P OBox Zambia Lusaka, : Bankers (260) 21 3230385 Lewis Nathan Advocates [email protected] : Auditors : (260) 21 3230666 : address E-mail : 670240, P OBox Zambia Mazabuka, Fax Lovemore MSievu Telephone : Postal address : Transfer secretaries Email address Zambia Estate,Mazabuka, Nakambala : Fax Telephone Postal address office registered and address Business Secretary SHAREHOLDERS’ DIARY Standard Chartered Bank Zambia Bank Standard Chartered Zambia Citi-Bank Zambia Stanbic Bank 87 Provident Street, Fairview, Zambia Lusaka, amn August June June April Payment January Declared Payment Declared Payment 41 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 42 ZAMBIA SUGAR Plc ANNUAL REPORT 2008 Signature and entitledto (1share =1vote) being theshareholder/member oftheabovenamed Company held attheIntercontinental Hotel, ZambiaonFriday Lusaka, 27June2008at11h00andany thereof adjournment asfollows: as my/our proxy to attend, speakandvote for me/usandonmy/our behalfattheannualgeneralmeetingofCompany to be ofthemeeting thechairman 3. 2. I/We Signed at 1. do hereby appoint 2. If thisproxy form If isreturned withoutany indicationasto howtheproxy should vote, theproxy willbeentitledto vote or 2. Amember entitledto attend andvote atthemeetingisentitledto appointoneormore proxies to attend, speakandvote in 1. NOTES TO THE FORMOFPROXY Full ifsigning inarepresentative name/sofsignatory/ies (seenote 4) capacity Assisted byme(where applicable)(seenote 3) of (Name/s inblockletters) For the46 FORM OF PROXY SUGARZAMBIA Plc 7. If two ormore two proxies If attended themeeting, thenthatperson attending themeeting whosename appearsfirstontheproxy 7. ofthedulycompleted proxy form shallnotpreclude Thedelivery any representative member or his/herdulyauthorised from 6. order to In beeffective, proxy must forms reach the registered officeofthe Company orthetransfer secretaries byno later t 5. ofapersonsigning aproxy in arepresentative Theauthority mustbeattachedto theproxy capacity unlesstheCompany has Aminormustbeassisted byhis/herguardian. 4. 3. 5. 4. 3. 2. Agenda Item 1. ______his/her stead. Aproxy neednotbeamemberoftheCompany. form, andwhosenameisnotdeleted, shallberegarded asthevalidly appointed proxy. andvotingattending instead themeeting, of such dulyappointed proxy. speaking already recorded that authority. abstain from voting ashe/shethinksfit. 12h00 on Wednesday, 25June2008. ______th ______Declaration offinaldividend.Declaration ofDeloitte & Re-appointment Touche asauditors. Approval ofdirectors’ fees. D GMacLeod, MDMwanakatwe SDLangton, RMLKatowa, DMKabunda, A BChikwanda, ofdirectors’Election financial statements. Adoption oftheaudited 2008annual annualgeneralmeeting
of of ______onthis ______nfvu gis Abstain Against favour In ______Numberofvotes Mark withXwhereMark applicable day of or failinghim/her or failinghim/her ______(address)
2008 han 43 ZAMBIA SUGAR Plc ANNUAL REPORT 2008
Zambia Sugar