Zambia Sugar Plc AR 2010

7/28/2019 Zambia Sugar Plc AR 2010

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CONTENTS

Companyproleandoperatinglocations 2

Directorateandseniormanagement 3

Directorsreport 5

Analysisofshareholders 9

Corporategovernance 12

Fiveyearreview 14

Valueaddedstatement 16

Statementofresponsibility 18

Reportoftheindependentauditors 19

Noticeofmeeting 45

Shareholdersdiary 46

Corporateinformation 46

Formofproxy 47

Z A M B I A S U G A R P l c

KEY FEATURES 2010 2009

Revenue(ZK'million) 907 963 532478

Protfromoperations(ZK'million) 159 006 78048

Protfortheyear(ZK'million) 97 640 137116

Basicanddilutedearningspershare(ZK) 16.09 25.27

Headlineearningspershare(ZK) 15.90 25.39

Year-endmarketprice(ZK) 315 239

Price:headlineearningsratio(%) 19.8 9.5

Dividendspershare(ZK) 7.5 12.60

Numberofsharesinissue(000) 6 331 428 5426938

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COMPANY PROFILE

ZambiaSugarPlcislistedontheLusakaStockExchange.In2009,thecompanycompletedasuccessfulrightsissueduring

whichitsprincipalshareholder,IllovoSugarLimitedofSouthAfrica,partiallyrenounceditsrightsandconsequentlyreduced

itsshareholdinginZambiaSugarfrom89.7%to81.6%.This,insupportofgovernmentpolicytoincreaselocalparticipationin

business,enablesincreasedpublicownershipinthecompany.Thebalanceoftheissuedsharecapitalisheldbyinstitutional

investorsandmembersofthepublic,includingemployees.

ZambiaSugarisbasedattheNakambalaEstateintheMazabukaDistrictoftheSouthernProvince.Combinedwithgood

climaticandsoilconditions,the companyscanegrowingoperationsaresignicantlyenhancedby accesstowaterfrom

theKafueRiverforfull-scaleirrigationofthecrop,resultinginexcellentcaneyieldsandhighsucrosecontentincane.

Approximately60%ofcanethroughputforthefactoryisprovidedbytheseoperations,withthebalancesuppliedbyprivate

outgrowers.Thesugarproducedfromcanesuppliedbylocalsmall-scalecanefarmers,andexportedtotheEuropeanUnion

(EU),benetsfromnancialincentivesgrantedundertheFairtradelabel.

The company is Zambias largest sugar producer with the capacit y to produce 450 000 tons of high-quality sugar per

annum.About41%ofcurrentproductionissoldtodomesticconsumerandindustrialmarkets,withthebalanceexportedto

preferentialmarketsintheEuropeanUnion(EU)andtoregionalmarkets.Thecompanyalsomanufacturesarangeofsugar-

basedspecialtyproducts.Molasses,aby-productofthesugarmillingoperation,issoldmainlyasstockfeedintobothlocal

andregionalmarkets.

AllsugarissoldundertheWhitespoonlabelanddirect-consumptiondomesticmarketsugarisVitamin-Afortied.

ZambiaSugaristhesinglelargestprivateagriculturalandmillingcompany,andemployerintheMazabukaregion,andis

regardedexternallyasapremieragriculturalenterpriseinZambia.Itcurrentlyemploysaround2000permanentemployees

andjustover4000seasonalworkersatpeakperiods.Itisasignicantearnerofforeignexchangeandindirectlysupportsthe

ongoingcreationandexistingviabilityofmanylocalenterpriseswhichsupplygoodsandservicestothecompany.Zambia

Sugaradministersanactivesocialinvestmentprogramme,deliveringmeaningfulbenetstoitssurroundingcommunities.

Zambia Sugars holding company, Illovo Sugar Limited, is a leading, global, low-cost sugar producer and a signicant

manufacturerofhigh-valuedownstreamproducts.ThegroupisAfricasbiggestsugarproducerandhasextensiveagricultural

and manufacturing operationsin six African countries.Downstream products include furfural(used mainly in lube oilreneriesforthepuricationofoils),furfuryl alcohol(usedmainlytoproducearesininthefoundryindustryasa binder

forfoundrysands),diacetyland2.3-pentanedione(bothusedashighqualitynaturalavourants),Agriguard(anagricultural

nematicide),BioMassSugar(asugarcane-basedfertiliser),ethylalcoholandlactulose(anaturallaxative).Illovoislistedonthe

JSELimited.ItisasubsidiaryofAssociatedBritishFoodsplcwhichholds51%oftheissuedsharecapital.

HEAD OFFICE

Mazabukaagricultural,

sugarmanufacturing,

packinganddistribution

operations.

SALES DEPOTS

OPERATING LOCATIONS

L U S A K A

Ma z a b u k a

N a k o n d e

K a s a m a

M a n s a

C h i p a t a

N d o l a

K a s u m b a l e s a

S o l w e z i

L u a n g w aM u m b w aM o n g u

Zambia

L i v i n g s t o n e

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DIRECTORATE

Name Qualifications Appointed Position

NON-EXECUTIVE CHAIRMAN

DGMacLe od(63)^# BCom,A MP(O xon) 20 01 D ep ut yChairmanIllovoSugarLimite d

EXECUTIVE DIRECTORS

SDLangton(48)# PrEng,BScEng 2008 ManagingDirector

DMKabunda(47) BA(PubAdmin),MBA 2008 HumanResourcesDirector

RMLKatowa(49) BA,MBA,MCIM,FZIM 2002 MarketingDirector

SSMunsamy(55) BTechMgt,MDP 2009 OperationsDirector

DMWellington(54) BAcc,CA 2008 FinancialDirector

NON-EXECUTIVE DIRECTORS

GJClark (54) * # BAcct(Hons), FCA(Aust) 2001 ManagingDirector I llovoSugar L imited

BMStuart(62)# BCom, DipSugarTech,SEP 2009 Operat ionsDirector I llovoSugarL imited

KZarnack(37)*# BCom,CA(SA) 2005 FinancialDirectorIllovoSugarLimited

NON-EXECUTIVE INDEPENDENT DIRECTORS

FMBanda ACIS,FCMA 2002 Directorofcompanies

ABChikwanda*^ BSc(Econ) 2001 Directorofcompanies

ARMpungwe BA(Hons) 2007 Directorofcompanies

MDMwanakatwe BA,ACCA,FZICA 2005 Directorofcompanies

DPatel 2006 Directorofcompanies

SENIOR MANAGEMENT

Name Qualifications Joined Operating responsibility

JMMukukwa(45) MScChemEng 1990 Factory

LMSievu(48) BAcc,ACMA,ACIS,FZICA 2004 Corporateaf fairs

HPVeenstra(53) MAgMgt(AgEcon) 2003 Agriculture

* - AuditCommit teeMember

^ - Remun er ationCommit teeMemb er

# - R iskManagementCommitteeMember

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DIRECTORS REPORT

PRINCIPAL ACTIVITIES

Thepr incipal activ itiesofthecompanyarethecultivationofsugarcaneand the

productionofsugarforsaleintolocalandexportmarkets.

REVIE OF OPERATIONS

Zambia Sugars operations recorded a net prot after taxation of ZK97 640

millionfortheyear,havingproduced315043tonsofsugar(2009:193880tons)

andsold305973tons(2009:192826tons).

RecordcaneandsugarproductionfollowingthecompletionofZambiaSugars

majorexpansionprojectin2009resultedinoperatingprotdoublingfromZK78

billioninthepreviousyeartoZK159billionin2009/10.Salesvolumeincreased

from193000tonsto306000tonsfollowingstrongdemandforsugarinall

markets. Realisations fromexport saleswere, however, negativelyimpacted

bythestrengthoftheKwacha,althoughthestrongcurrencywasofbenet

to foreign currency denominated operating costs. Eective costcontroland

improvedsalespricingandvolumesbenetedmargins.

InAugust2009,thecompanycompletedasuccessfulrightsissuewhichraised

US$50million.Duringtheprocess,theIllovogrouppartiallyrenounceditsrights

andconsequentlyreduceditsshareholdinginZambiaSugarfrom89.7%to81.6%,

thisbeingsupportiveoftheGovernmentpolicytoincreaselocalparticipationin

businessesinZambia.Theproceedswereusedtoreduceborrowingsrelatedto

therecentmajorexpansionprojectandtheacquisitionofNangaFarmsPLC,a

largecanegrowingcompanycurrentlyproducing325000tonsofcanewiththe

potentialtofurtherincreaseoutput.

During the year, the company spent capital of ZK13 969 million on the

replacement of assets and ZK144 799 million on further expansion of the

business. A total of ZK25 928 million was spenton the refurbishment and

overhauloffactoryplantandmachinerytoensurethatthefactoryiskeptin

soundcondition,thatstrategicplantisadequatelyprotectedagainstbreakdown

andthatproductqualitymeetsglobalstandards.

ARICULTURE

The agricultural operations incorporating Nanga Farms produced a record

canecropof1.7milliontonsin 2009/10,comparedwith722000 producedin

thepreviousseason.Heavyandunseasonalrainfallduringtheseason,however,

impactednegativelyuponcanedeliveries,resultinginanareaof3250hectares

ofcanelandbeingcarried-overforprocessingin2010/11.Outgrowerdeliveries

amountedtoapproximately910000tonsofcane,bringingtotalcaneproduction

to 2.6 million tons(2009 1.6 million tons), an increaseof approximately one

milliontonscomparedto2008/09.

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P RO D UC T IO N

In its rst year of operation followingthe expansionof thefactory, record sugar productionof 315 000 tons wasachieved,

representinga62%increaseintonnagecomparedtothepreviousseason.Overall,factoryperformanceandecienciesshowed

considerableimprovementoverthepreviousseason,withtheplantreachingitsnewratedcapacity.

MA RK ET IN

Domesticmarketsugardemandincreasedby10%comparedtothepreviousyear,drivenbystronglocaleconomicfundamentals.

Regionalsugardecitswerebenecialtoexportopportunitiesandprices.DespiteareductioninEUsugarprices,eectivefrom

1October2009,thecompanybenetedfromincreasedandunrestrictedmarketaccesstotheEUbywayofZambiasduty-free

andquotafreeaccessintothismarket.Consequently,exportstotheEUincreasedfrom40000tonsinthepreviousyeartonearly

90000tonsin2009/10.

EXPANSION PROJECT

InDecember2009,ZambiaSugars recentmajorexpansionprojectwas ociallycommissionedby HisExcellenciesPresidentJacobZumaoftheRepublicofSouthAfricaandPresidentRupiahBandaoftheRepublicofZambia.TheR1.7billionproject,which

resultedinthedevelopmentofanadditional10500hectaresofirrigatedcaneeldsbythecompanyanditssupplyinggrowers,

alongwiththeexpansionofthefactorysmillingcapacity,hasincreasedannualsugarproductionfromaround200000tonsto

450000tons.Amongstmanyotherbenets,theprojecthasalsoresultedinthedevelopmentoftheMagobboandManyonyo

smallholdersugarcaneschemeswhichwillseetheestablishmentof438hectarestoirrigatedcaneland.

Afurther majorbenetof theexpansionprojectwas theinstallationofsignicantlyincreasedelectricitygeneratingcapacity,

allowing all of the Zambia Sugar business,including its agricultural operations, to become self-sucient in its own power

requirements.

Aprojecttoinvestigatethefeasibilityoferectinganethanolplanttomakeuseofthefactorysincreasedmolassessupplieshas

commenced.Itisenvisagedthatthisplantwouldsupplyethanolforblendingwithpetrol.

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DIRECTORS REPORT

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PROSPECTS

Goodclimaticconditionsandincreasedlandundercanewillfurtherincreasesugarcanedeliveriestothefactoryin2010/11.

The factory ispositioned to further consolidatethe expansion gains achievedin2009/10andanothers ignicant increase in

sugarproductionisanticipatedinthecurrentseason.Operatingprotisanticipatedtoincreaseaccordingly.Exchangerate

movementsandweatherwillcontinuetoinuenceprots.

Financingcostswillcontinuetoimpactonearningsinthecomingyear.However,shouldtheKwacharemainatitscurrent

higherlevels,thenegativeimpactofincreasednancingcostswillbemitigatedbyexchangerategainsrelatingtoUSdollar-

denominatedexpansion-relatedloans.

H UMA N RES O URC ES

Human resourcemanagement and operational strategiesare determined by the business needsof the company. These

strategiesembracethemacroeconomicandlabourenvironmentsandarealignedtotheIIlovogroupsstrategicintent.Awork

ethicofcontinuousimprovementwhichencouragesfocusedandskilledemployeestorealisetheirfullpotentialandtomakea

dierenceintheirareasofoperationisacornerstoneofthecompanyspolicy.

Employeedevelopmentand performancemanagementcombineto elicit thebest fromemployees andensureequitable

labourpractices. Thecompanyencouragesandproactively engagesin dialogueandpartnershipwiththe union. Various

communicationchannelssuchasaJointConsultativeCouncil,inadditiontothebargainingtableareopenandenhancegood

rapportbetweenmanagementandunionrepresentatives.Themutualrespectbetweenthepartnershasbeenacknowledged

andcommendedbytheMinistryofLabourandSocialSecurity.

The continued development of employees through wide- ranging training initiatives to ensure that employee talents are

harnessedintheirareasofoperation,bothfromamanagerialandtechnicalperspective,remainsanareaoffocus.

Keyareasofhumanresourcesfocusincludebestpracticebenchmarking,targetedmanpowersuccessionplanning;talentand

performancemanagement;themaintenanceofcollaborativeindustrialrelations;humanresourcedevelopmentandbusiness

understanding;localisationprogrammes;andthehealthandwelfareofemployeesandtheirdependants.

Technology transfer and upgrading of local skills and mentorship remains a priori ty. While development programmes

encompass positionsat alllevels,emphasiswas again placed onthe upliftmentof artisans andoperators. Thecompany

continuestobenetfromparticipationinIllovogrouptraininginitiativessuchasaLeadershipandDevelopmentProgramme

forseniormanagers.

Managementtraineesarefollowingthegroupsprogrammedevelopedforthiscategoryofemployees.Severaljuniormanagers

havebenetedfromperiodsofsecondmentandtechnicalvisitstosugarmillingoperationsinSouthAfrica.

ABusinessUnderstandingProgrammecontinuestobeanimportantpartofthecompanysemployeeinvolvementprocess.

The upgrading of the estate infras tructure and amenities continued during the year, and an ongoing village electricat ion

programmehascontinued.

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HEALTH, SAFETY AND ELFARE

The integrate dSafety, OccupationalHealth andEnvironmental ManagementSystem (SHE) remains entrenche din all areasofoperationswiththecompanymaintainingNOSAFour-starplatinumawardsforthe factoryandagriculturaloperations.The

companycontinuedtomaintainSABSISO9001:2000QualityManagementSystemaccreditation.

Healthcare isprovided toallemployees mostly throughaccessto company-runclinics.Thecompanysintegratedmalaria

controlprogrammewasawardedacerticateofexcellenceforBestPracticesbytheZambianMinistryofHealthformaintaining

malariapositiveincidencestobelow50per1000populationontheNakambalaestate.Inaddition,undertheHIV/AIDsand

wellnessprogramme,thecompanycontinuedwithvigorousVoluntaryCounsellingandTesting(VCT)with70%ofpermanent

workforce,68%oftheseasonalworkforceand42%ofdependantshavingundergoneVCT.Intheperiodunderreview,ourHIV/

AIDSmanagementprogrammehasbeenratedbytheMinistryofHealthasthebestintheprovince.

DIRECTORATE AND SECRETARY

Thedirectorswhoheldof ficeduringtheyearwere:

Non-ExecutiveDirectors

DGMacLeod#^ :Chairman

GJClark*^# :ChairmanoftheRemunerationCommittee

BMStuart# :ChairmanoftheRiskManagementCommittee

KZarnack*# :ChairmanoftheAuditCommittee

Non-ExecutiveandIndependentDirectors

ABChikwanda*^

FMBanda

ARMpungwe

MDMwanakatwe

DPatel

ExecutiveDirectors

DMKabunda :HumanResourcesDirector

RLKatowa :MarketingDirector

SDLangton :ManagingDirector

SSMunsamy :OperationsDirector

DMWellington :FinancialDirector

*MemberoftheAuditCommittee

^MemberoftheRemunerationCommittee

#MemberofRiskManagementCommittee

CompanySecretary

LMSievu

DIRECTORS REPORT

(continued)

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D IREC T O RS IN T ERES T S

Nodirectorhadanymaterialinterestinanycontractwiththecompanyduringtheyearunderreview.

Thebenecial interest softhedirectorsholdingoceattheendof theyear underreviewintheissuedordinarysharecapi talof

thecompanyasat31March2010wereasfollows:

2010 2009

No of shares No of shares

FMBanda 143505 143505

ABChikwanda 200000 200000

DMKabunda 350000 300000

SHARE CAPITAL

The 47thannual genera lmeetingof members of the company passeda special resolut ion to increase the author ised share

capitalbycreatingafurther1465000000newordinarysharesof50Ngweeeach,therebyincreasingthesharecapitalofthe

Companyfrom5535000000ordinarysharesofK0.50eachto7000000000.Aftera6:1renounceablerightsissue,theissued

sharecapitaloftheCompanyincreasedto6331427708ordinarysharesofK0.50each.

ANALYSIS OF SHAREHOLDER S

Numberof holders

Numberof shares %

Individuals

1 - 250000 3399 71132128 1.12

250001 - 500000 33 14268959 0.23

500001 - 750000 9 6169367 0.10

750001 - 1000000 5 4397404 0.07

1000001 - 2000000 6 8412375 0.13

2000001andabove 3 13152115 0.21

3 455 117 532 348 1.86

Banks,NomineesandTrusts 26 247008102 3.90

PensionsFunds 23 780696979 12.33

Companies 43 23033607 0.36

IllovoSugarCoperatiefU.A. 1 5163156672 81.55

93 6 213 895 360 98.14

Total 3 548 6 331 427 708 100.00

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DIVIDENDS

The company has previous ly advisedit sintention toreducedividendpayouts to50%ofa fter tax prots whi lst serv icing thefundingrequirementsarisingfromtheexpansionproject.

AninterimdividendofZK5.00pershare(2009:ZK5.60)waspaidtoshareholderson8January2010.Noticeisherebygiventhat

asecondinterimdividendofZK2.00pershare(2009:ZK6.00)hasbeendeclaredinrespectoftheyearended31March2010.This

dividendispayableon14June2010toshareholdersregisteredatthecloseofbusinesson14May2010.

AttheforthcomingAnnualGeneralMeetingtobeheldon26August2010,theDirectorswillproposeanaldividendforthe

yearended31March2010ofZK0.50pershare(2009:ZK1.00).ThiswillresultinatotaldividendfortheyearofZK7.50pershare

(2009:ZK12.60)

SOCIAL INVESTMENT

The company has an active social investment programme struc tured to address the specic needs of its surrounding

communities.Prospectiveprojectsareconsideredonthebasisthattheyaremotivatedbymembersofthelocalcommunity

anddesignatedcompanyrepresentatives.Togaincompanysupport,projectsmustbeshowntobemeaningfulandsustainable,

toreachandbenetasmanypeopleaspossible,andtohaveon-goingcommunityparticipation.

Ongoingprojectsarediverseinnatureandinclude,eitherintheformofcashfundingordirectassistance,thesponsorship

ofmajorsportingeventsandmajorculturalandtraditionalceremonies,donationstothedisabled,theupliftingoffacilitiesat

districthospitals,policestations,orphanages,governmentandmissionschools,sportsandsocialclubs,thelocalradiostation,

drainageworksinhighdensityanddiseasepronecompoundsandassistinginmaintainingsomeofthemunicipalroads.

The companyscontribution to the well being and uplif ting of the surroundingcommunityhas been recognize dand in the

past,thecompanyhaswontheannualZambiaInstituteofMarketingBestCorporateSocialResponsibleCompanyAward.

EMPLOYEES

Theaver agenumberofemp loyeesemployedthroughouttheyearunderreviewwasas follows:

April 2009 4863 October 2009 5501

May 2009 5064 November 2009 5360

June 2009 4957 December 2009 4627

July 2009 5458 January 2010 2649

August 2009 5457 February 2010 2646

September 2009 5452 March 2010 2684

The total remunerationandbenet spaidin respectofth eaboveemp loyees wasZK174944mill ion(2009: ZK130355million)

fortheyearended31March2010.

RESEARCH AND DEVELOPMENT

Inordertooptimisethereturnfromexistinginstalledcapacity,thecompanycontinuestobenetfromwell-establishedin-

house group resources which provide technicalexpertise in agricultural productionand sugar anddownstream product

manufacturetoalloperations.Acentralisedcoreofexpertiseexiststoensuretechnicalstandardsareoptimizedandmaintained

forbothexistingequipmentandnewagriculturalandfactoryinstallations,andto keepabreastwithtechnicalinnovations.

Benchmarkingto improveproductivityandreduceunitcostsis amajorareaof attentioninall operations,withadditional

resourcesrecentlyhavingbeenallocatedtoenhanceoperationalperformanceandbenchmarkingacrossthegroup.

AUDITORS

Deloitte&ToucheweretheCompanysauditorsduringtheyear.

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The Directors and employees of Zambia Sugar strive to ensure that the Company is managed in an ecient, accountable,

responsible and moral manner. The board of directors endorses the Lusaka Stock Exchange Corporate overnance Codefor listed and quoted companies (The Code) and believes that in all material respects the Company complied with the

principles of the Code throughout the year under review.

THE BOARD AND BOARD COMMITTEES

TheCompanyhasaunitar yboardofdirectors ,whichhasapredominanceofnon -executivedirectors .Theroles ofthechairman

andchiefexecutiveareseparatedandthe Chairmanisnon-executive.TheCompanysboardof directorsisaccountableto

shareholdersandresponsibleforreviewingtheperformanceofmanagementagainstbudgetsandbusinessplans,ensuringa

comprehensivesystemofinternalcontrolpoliciesandproceduresoperatesandcomplieswithsoundcorporategovernance

principles,andidentifyingkeyriskareas.

The board isul timately responsible for ensuring that the business is agoingcon cernand tothisend,ee ctivelycontrols the

Companyanditsmanagementandisinvolvedinalldecisionsthatarematerialforthispurpose.Theboarddelegatestheday-

to-daymanagementofthebusinesstothemanagingdirectorassistedbyseniormanagement. Duringtheyear,theboard

mettoconsiderissuesofoperationalstrategy,capitalexpenditureandothermattershavingamaterialeectontheCompany.

The board of directors held four regular meetings in the past year where the management presente d matters for board

discussionandapproval.TherewasfullattendanceatallmeetingsotherthanMrsMDMwanakatweattheApril2009meeting,

MessrsGJClark,MDMwanakatweandDKPatelattheOctober2009meeting,andMsKZarnackattheFebruary2010meeting.

The directors gave satisf actor y reasons to the board for not attending the meetings. In addition, there is provision in the

CompanysArticlesofAssociationfordecisionstakenbetweenmeetingstobeconrmedbywayofdirectorsresolution.

Members of theboard have accessto theadviceof theCompanysecretary, andmay,in appropriate circumstances, take

independentprofessionaladviceattheCompanysexpense.

AUDIT COMMITTEE

The Audit Committee of the board comprises a chairman, who is a non-executi ve director, and two other non-execut ive

boardmembers.TheCommitteeisresponsibleformaintaininganappropriaterelationshipwiththeexternalauditorsandfor

reviewingtheCompanysinternalauditresources,internalnancialcontrolsandtheauditprocess.Itaidstheboardinseeking

toensurethatthe nancialandnon-nancialinformationsuppliedto shareholderspresentsa balancedassessmentof the

Companysposition.

TheCommitte ereviewstheobje ctivi tyandindependenceof theexternalauditorsandalsoconsidersth escopeof theirwork

andfeespaidforauditandnon-auditservices.

TheCommitteehasunrestrictedaccesstoCompanydocument sandinformation,aswellastoemployeesoftheCompanyand

theexternalauditors.Membersofthecommitteemay,inpursuitoftheirduties,takeindependentprofessionaladviceonany

matterattheCompanysexpense.Thecommitteechairmanreportstheoutcomeofmeetingstotheboard.

BoththeexternalandinternalauditorshaveunrestrictedaccesstotheCommitteeanditsChairman.

TheCommitteehastwomeetin gsayear,andinthep astyear therewasfull attendancebyi tsmembersatbothmeetings.

REMUN ERAT IO N C O MMIT T EE

The Remuner ation Committe e comprises three non-execut ive directors. The Committee is responsible for reviewing

compensation toattract, retain and motivate executives and senior managers of quality required for the business. The

CommitteeassessesandapprovesthebroadremunerationstrategyoftheCompany,andisalsoresponsiblefordevelopingand

determiningtheCompanysgeneralpolicyonexecutiveandseniormanagement.TheCommitteeplaysanintegralpartinthe

successionplanningrelativetoseniormanagers.TheCommitteemetonceduringthepastyearandtherewasfullattendance.

RISK MANAEMENT COMMITTEE

The Company s Risk Management Committe e comprises three non-execut ive directors and one execut ive director and is

chairedbyanon-executivedirector.Ingeneral,riskmanagementmeetingsheldbythecompanyareattendedbyallsenior

managersoftheCompany.

CORPORATE GOVERNANCE

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The Committee has formal terms of reference approved by the board. The Committe e is responsible for reviewing the

Companysriskphilosophy,strategyandpolicies,andensuringcompliancewithsuchpolicies;reviewingtheadequacyand

overalleectivenessofthe Companysriskmanagementfunction;ensuringtheimplementationof anongoingprocessfor

riskidentication,mitigationandmanagement;ensuringtheestablishmentofacomprehensivesystemofcontrols;pursuing

measuresforincreasingriskawarenessthroughouttheCompany;reviewinganysignicantlegalmatters;andreviewingthe

adequacyofinsurancecoverage.TheCommitteegivesparticularfocustooperationalrisks,includinghealthandsafety.The

Committeemeetstwiceayear.TherewasfullattendanceatallmeetingsotherthanMissKZarnakattheFebruary2010meeting

whogavesatisfactoryreasonsfornotattending.

EX EC UT IV E C O MMIT T EE O F MA N A EMEN T

Themanagingdirectorandseniormanagementmeetonaweekly basistoreviewoperationalper formance,capit alprogrammes

andotherrelevantissues.TheExecutiveCommitteeofManagementisresponsibleforimplementingthestrategiesandpolicies

determinedbytheboardandmanagingthebusinessandaairsoftheCompany.

MA N A EMEN T REP O RT IN

TheCompanyhasestablishedmanagementrepor tingprocedures,whichincludethepreparationofannualstrategicplansand

budgets.Actualresultsarereportedmonthlyagainstapprovedbudgetsandcomparedtotheprioryear.Protandcashow

projectionsarereviewedregularlywhilstworkingcapitalandborrowinglevelsaremonitoredonanongoingbasis.

INTERNAL CONTROL

The control systems are designed to safeguard the Companys assets, maintain proper accounting records and ensure the

reliabilityofmanagementandnancialinformationproducedbytheCompany.ControlsystemsarebasedonestablishedIllovo

Sugargrouppoliciesandproceduresandareimplementedbytrainedpersonnelwithanappropriatesegregationofduties.

Theeectivenessoftheseinternalcontro lsandsystemsismonitoredbytheinternalaudit departmentandwiththeaidofse lf-

assessmentauditchecklists.Theindependentauditorsthroughtheauditworktheyperformconrmthattheabovementioned

monitoringproceduresarebeingeectivelyapplied.

Nothinghascometotheattentionofthedirectorsortheindependentauditorstoindicatethatanymaterialbreakdowninthe

functioningofabovementionedinternalcontrolsandsystemshasoccurredduringtheyearunderreview.

ET H IC S

Itisafundamentalpolicyofthecompanytoconductitsbusinesswithhonestyandintegrityandinaccordancewiththe

highestlegalandethicalstandards.TheCompanyhasaCodeofConductandBusinessPractices,determiningtheminimum

standardsrequiredofallsta,whichisdisseminatedthroughouttheCompanyandreviewedannuallybyseniormanagement.

TheCodeprescr ibes,interalia, thattheCompanyshallnot makepol iticaldonationsandproscribesbriberyandcorruption.All

managersarerequiredtogivewrittenagreementtothisCode.Inanyinstancewhereethicalstandardsarecalledintoquestion,

thecircumstancesareinvestigatedandresolvedbytheappropriateexecutive.Hotlinefacilities,encouragingpeoplefrom

withinandoutsidetheCompanytoanonymouslyreportanywrongdoingsareoperatedbyindependentforensicaccountants,

andallmattersarisingarethenappropriatelyinvestigatedandreportedupon.

INSIDER TRADIN

DirectorsandocersoftheCompanywhohaveaccesstounpublished,pricesensitiveinformationinrespectoftheCompany

areprohibitedfromdealinginthesharesoftheCompanyduringdenedrestrictedperiods,includingthoseperiodsimmediately

priortotheannouncementofinterimandnalnancialresults.

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PRODUCTION & SALES 2010 2009 2008 2007 2006Tons '000 Tons'000 Tons'000 Tons'000 Tons'000

Own estate cane produced 1 705 722 1088 1242 1291Total cane milled 2 612 1626 1860 1877 1894

Sugar production 315 194 234 245 248

Cane sugar ratio 8.29 8.47 7.96 7.66 7.65

Sugar sales 306 193 243 250 239Local 130 118 116 99 92Export 176 75 127 151 147

Molasses sales 56 45 55 51 47Local 41 39 42 40 40Exports 15 6 13 11 7

FINANCIAL 2010 2009 2008 2007 2006Notes ZK million ZKmill ion ZKmill ion ZKmill ion ZKmill ion

Statement of comprehensive incomeRevenue(netofVAT) 907 963 532478 585303 570096 501833

Protfromoperations 159 006 78048 69629 133371 105702Netnancingcosts 46 285 - 446 1903 2777Protbeforetaxation 112 721 78048 69183 131468 102925

Taxation 15 081 (59068) (58597) 30306 24085Protfortheyear 97 640 137116 127780 101162 78840Attributabletonon-controllinginterest 1 464 0 0 0 0Protattributabletoordinaryshareholders 96 176 137116 127780 101162 78840

Reconciliation of headline earningsProtattributabletoshareholdersofZambiaSugarPlc 96 176 137116 127780 101162 78840Adjustedfor:(Gain)/lossonsaleofproperty,plantandequipment (1 133) 688 (754) (580) (542)Headlineearningsfortheyear 95 043 137804 127026 100582 78298

Balance sheet

Property,plantandequipment 1 303 378 1115712 531792 118128 103119Intangibleasset 67 902Caneroots 204 826 162595 69850 63759 66251Deferredtaxassets 17 982 31037 - - -Currentassets 427 938 311341 200199 187667 203608Cashandbankbalances 59 145 119777 149383 108376 50399Borrowings 1 231 550 1155345 454209 - -Deferredtaxliabilities 34 329 - 28031 47442 46654Retirementbenetobligation - - - 2075 2639Currentliabilities 83 377 151725 101886 105791 96727Netassetvalue 731 915 433392 367098 322622 277357

Protability and asset management

Operaringmargin % 17.5 14.7 11.9 23.4 21.1Returnonnetassets 1 % 13.2 7.5 11.5 39.0 33.3

Liquidity and borrowings

Currentratio 2 times 5.8 2.8 3.4 3.0 2.6Interestcover 3 times 3.4 - 156.1 70.1 38.1Netdebt:equity 4 % 160 239 83 - -Gearing 5 % 62 71 45 - -

Earnings and dividends per share

Basicanddilutedearningspershare 6 ZMK'000 16.09 25.2 23.5 18.6 14.5Headlineearningspershare 7 ZMK'000 15.90 25.4 23.4 18.5 14.4Dividendpershare 8 ZMK 7.5 12.6 14.9 13.0 10.2Dividendcover 9 times 2.1 2.0 1.6 1.4 1.3Dividendpaid ZMK'm 69 646 70822 83304 55897 62410

LUSE statistics

Ordinarysharesinissue 000 6 331 428 5 426 93 8 5 426 93 8 5 426 938 5 426 938Weightedaveragenumberofshares 000 5 977 066 5 426 93 8 5 426 938 5426 938 5 426 93 8Netassetvaluepershare 10 ZMK'000 115.6 79.9 67.6 59.4 51.1Marketpricepershareatyearend ZMK 315 239 560 170 150Dividendyieldatyearend 11 % 2.4 5.3 2.7 7.4 6.8Price:headlineearningsratio 12 % 19.8 9.4 23.9 9.2 10.4

FIVE yEAR REVIEw

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FIVE yEAR REVIEw NOTES

1. Return on net assets

Protfromoperationsexpressedasapercentageofaveragenetoperatingassets.

2. Current ratio

Currentassetsdividedbycurrentliabilities.

3. Interest cover

Protfromoperationsdividedbynancingcosts.

4. Net debt : equity

Interest-bearingliabilities,netofcashandcashequivalents,expressedasapercentageoftotalequity.

5. earing

Interest-bearingliabilities,netofcashandcashequivalents,expressedasapercentageoftotalnetdebtplusequity.

6. Basic and diluted earnings per share

Netprotattributabletoordinaryshareholdersdividedbytheweightedaveragenumberofordinarysharesinissue.

7. Headline earnings per share

Headlineearningsdividedbytheweightedaveragenumberofordinarysharesinissue.

8. Dividend per share

Dividendspershare(interim-paidanddeclared;nal-proposed).

9. Dividend cover

Headlineearningspersharedividedbydividendspershare(interim-paidanddeclared;nal-proposed).

10. Net asset value per share

Totalassetsless totalliabilities dividedbythenumberofsharesinissue.

11. Dividend yield at year end

Dividendspershare(interim-paidanddeclared;nal-proposed)asapercentageoftheyear-endmarketprice.

12. Price: headline earnings ratio

Year-endmarketpricedividedbyheadlineearningspershare.

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The value added statement reects the wealth the Company has generate d through its agricultural, manufacturing and selling

operations,andthesubsequentdistributionandreinvestmentinthebusiness.

WealthcreatedinthecurrentnancialyearwasZK489859million,ofwhich78%wasdistributedtoemployees,providersofcapitaland

theGovernment.36%ofthewealthcreatedwaspaidtoemployees.Thebalanceofthewealthcreatedwasretainedandreinvestedinthecompanyforthereplacementofassetsandtheongoingdevelopmentofoperations.

ROUP COMPANY

2010 2010 2009

ZK'million ZK'million ZK'million

ealth created

Revenue 907 963 907 963 532478

Financingincome 93 309 90 945 -

Paidtooutgrowersforcane (156 334) (194 922) (137385)Manufacturinganddistributioncosts (355 079) (333 076) (163169)

489 859 470 910 231924

ealth distributed

Toemployeesassalaries,wagesandother benet s 174 944 172 623 130355

Tobankinginstitutionsasnancecos ts 139 594 138 509 -

Toshareholdersasdividends 69 646 69 646 70822

Togovernmentastaxation 60 - 8250

384 244 380 778 209427

ealth re-invested

Retainedprots 26 530 17 733 66294

Depreciation 64 064 59 344 23521

Deferredtaxation 15 021 13 055 (67318)

489 859 470 910 231924

Amounts paid to government for taxation excludes the following:

Employeestaxdeductedfromremuneration 27 854 27 461 21252

NetVATamountspaidtogovernment 19 562 16 140 12961

Customsandexciseduties 21 711 21 506 8325

Withholdingtaxescollectedonbehalfofgovernment 3 742 3 742 1021

VALUE ADDED STATEMENT

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Z a m b i a S u g a r P l c(Incorporated in Zambia)

A N N U A L F I N A N C I A L S T AT E M E N T S

fortheyearended31March2010

CONTENTS

Statement of responsibility 18

Report of the independent auditor 19

Statements of comprehensive income 20

Statements of nancial position 21

Statements of changes in equity 22

Statements of cashows 23

Notes to the statements of cashows 24

Notes to the nancial statements 25 17

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Section164(6)oftheCompaniesAct,1994(asamended)requirestheDirectorstopreparenancialstatementsforeachnancialyear

whichgiveatrueandfairviewoftheaairsoftheGroupandtheCompanyandtheprotorlossforthatperiod.

The Directors are responsible for the maintenanceof adequateaccounting records and the preparation and integrit y of the annual

nancial statementsand related information, which havebeen audited by the independent external auditors, Messrs Deloitte &

Touche.

The Directors are also responsible for the systems of internal control. These are designed to provide reasonable, but not absolute,

assuranceastothereliabilityofthenancialstatements,andtoadequatelysafeguard,verifyandmaintainaccountabilityforassets,

andtopreventanddetectmaterialmisstatements.Thesystemsareimplementedandmonitoredbysuitablytrainedpersonnelwith

anappropriatesegregationofauthorityandduties.NothinghascometotheattentionoftheDirectorstoindicatethatanymaterial

breakdowninthefunctioningofthesecontrols,proceduresandsystemshasoccurredduringtheyearunderreview.

In the opinion of the Directors:

thestatementofcomprehensiveincomeisdrawnupsoastogiveatrueandfairviewoftheprotofthe

GroupandtheCompanyforthenancialyearended31March2010;

thestatementofnancialpositionisdrawnupsoastogiveatrueandfairviewofthestateofaairsof

theGroupandtheCompanyasat31March2010;and

therearereasonablegroundstobelievethattheGroupandtheCompanywillbeabletopaydebtsasand

whentheyfalldue.

the nancial statements have been prepared in accordance with International Financial Reporting

StandardsandtheCompaniesAct,1994(asamended).

SignedonbehalfoftheBoardby:

DGMacLeod SDLangton

Chairman ManagingDirector

STATEMENT OF RESPONSIBILITy FOR ANNUAL FINANCIAL STATEMENTS


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TO THE MEMBERS OF ZAMBIA SUAR Plc

Report on the nancial statements

WehaveauditedtheannualnancialstatementsandgroupnancialstatementsofZambiaSugarPlc,whichcomprisethestatementof

nancialpositionandconsolidatedstatementofnancialpositionasat31March2010,andthestatementofcomprehensiveincomeand

consolidatedstatementofcomprehensiveincome,thestatementofchangesinequityandconsolidatedstatementofchangesinequity,

statementofcashowsandconsolidatedstatementofcashowsfortheyearthenended,andasummaryofsignicantaccounting

policiesandotherexplanatorynotes.

Directors responsibility for the nancial statements

Thecompany sdirectorsareresponsiblefor overseeingthepreparationandfairpresentat ionoftheseconsolidatednancial statement s

inaccordancewithInternationalFinancialReportingStandardsandtheCompaniesAct1994(asamended).Thisresponsibilityincludes

designing,implementingandmaintaininginternalcontrolsrelevanttothepreparationandfairpresentationofnancialstatementsthat

arefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies,andmakingaccountingestimatesthatarereasonableinthecircumstances.

Auditors responsibility

Ourresponsibilityistoexpressanopiniononthesenancialstatementsbasedonouraudit.Weconductedourauditinaccordancewith

InternationalStandardsonAuditing.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudit

toobtainreasonableassurancewhetherthenancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabout theamountsanddisclosuresinthe nancialstatements.

The procedures selec ted depend on the auditors judgment , including the assessment of the risks of material misstatement of the

nancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolsrelevant

totheentityspreparationandfairpresentationofthenancialstatementsinordertodesignauditproceduresthatareappropriate

inthecircumstances,butnotforthepurposeofexpressinganopinionontheeectivenessoftheentitysinternalcontrols.Anaudit

alsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadeby

management,aswellasevaluatingtheoverallpresentationofthenancialstatements.

Webelievethattheauditevidencewehaveobtainedissucientandappropriatetoprovideabasisforourauditopinion.

Opinion

Inouropinion,thenancialstatementsgiveatrueandfairviewofthenancialpositionoftheCompanyandofthegroupat31March

2010,andtheirnancialperformanceandtheircashowsfortheyearthenendedinaccordancewithInternationalFinancialReporting

StandardsandtheCompaniesAct1994(asamended).

Report on other legal requirements

TheZambianCompaniesAct, 1994(asamended)requires thatincarr yingout ouraudit,weconsiderandrep orttoyouonthefollowingmatter:weconrmthat,inouropinion,theaccountingandotherrecordsandregistersrequiredbytheActhavebeenproperlykeptin

accordancewiththeAct.

DELOITTE&TOUCHE

CHARTEREDACCOUNTANTS

ALICEJERETEMBO

PARTNER

29APRIL2010

REPORT OF THE INDEPENDENT AUDITOR


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STATEMENTS OF COMPREHENSIVE INCOME

for the year e nded 31 March 2010

ROUP COMPANY

Notes 2010 2010 2009


Revenue 4 907 963 907 963 532478Costofsales (464 426) (478 692) (263168)

ross prot 443 537 429 271 269310

Othergainsand(losses) 1 133 533 (688)

Distributionexpenses (152 066) (152 066) (86231)

Administrationexpenses (133 598) (129 740) (104343)

Prot from operations 5 159 006 147 998 78048

Netnancecosts 6 (46 285) (47 564) -

Prot before taxation 112 721 100 434 78048

Taxation 7 (15 081) (13 055) 59068

Prot for the year 97 640 87 379 137116

Othercomprehensiveincome - - -

Total comprehensive income for the year 97 640 87 379 137116

Protattributableto:

ShareholdersofZambiaSugarPlc 96 176 87 379 137116

Non-controllinginterest 1 464 - -

97 640 87 379 137116

Totalcomprehensiveincomeatt ributableto:

ShareholdersofZambiaSugarPlc 96 176 87 379 137116


97 640 87 379 137116

Earnings per share 8

Basicanddilutedearningspershare(ZK) 16.09 14.62 25.27

Headlineearningspershare(ZK) 15.90 14.53 25.39


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STATEMENTS OF FINANCIAL POSITION

as at 31 March 2010

ROUP COMPANY

Notes 31 March 31 March 31March

2010 2010 2009

ZKmillion ZKmillion ZKmillion

ASSETS

Non-current assets

Property,plantandequipment 11 1 303 378 1 206 148 1115712

Intangibleasset 12 67 902 - -

Investmentinsubsidiary 13 - 155 624 -

Caneroots 14 204 826 165 472 162595

Deferredtaxassets 21 17 982 17 982 31037

Current assets 493 024 446 627 431118

Inventories 15 90 500 86 430 69634

Growingcane 16 280 463 244 420 201783

Factoryoverhaulcosts 17 25 928 25 928 20256

Tradeandoth erreceivables 18 26 952 22 828 19668Currenttaxasset 7 138 - -

Amountsduebyrelatedparties 23 3 957 5 976 -

Cashandbankbalances 65 086 61 045 119777

Total assets 2 087 112 1 991 853 1740462

EQUITY AND LIABILITIES

Equity attributable to shareholders of Zambia Sugar Plc 704 546 695 749 433392

Sharecapitalandpremium 19 247 337 247 337 2713

Capitalredemptionreserve 40 40 40

Dividendreserve 15 829 15 829 37989

Retainedearnings 441 340 432 543 392650


Total equity 731 915 695 749 433392

Non-current liabilities 274 101 235 997 977789

Longtermborrowings 20 239 772 235 997 977789

Deferredtaxliabilities 21 34 329 - -

Current liabilities 1 081 096 1 060 107 329281

Tradeandoth erpayables 22 52 035 50 098 78776

Currentportionoflongtermborrowings 20 991 778 978 667 177556

Amountsduetorelatedparties 23 28 004 28 004 68893Bankoverdraft 5 941 - -

Provisions 24 3 338 3 338 4056

Totalliabili ties 1 355 197 1 296 104 1307070

Total equity and liabilities 2 087 112 1 991 853 1740462

The responsibilities of the CompanysDirectors with regard to the prepar ation of the nancial statements are set out on page 18.

Thenancials tatementsonpa ges20to 44wereapprovedfor issuebytheB oardof Directorson29Apr il2010andweresignedonits

behalfby:

DGMacLeod SDLangton

Chairman ManagingDirector


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Sharecapital and

premium

Capitalredemption

reserveRevaluation

reserveDividend

reserveRetainedearnings

Attributable toshareholders

of ZambiaSugar Plc

Non-controlling

interests Total

ZKmillion ZKmillion ZKmillion ZKmillion ZKmillion ZKmillion ZKmillion ZKmillion

ROUP

Balanceat31March2009 2713 40 - 37989 392650 433392 - 433392

Totalcomprehensiveincome

fortheyear 96176 96176 1464 97640

Amortisationofrevaluation

reserve - - - - -

Transfertodividendreserve 47486 (47486) - - -

Dividendspaid (69646) - (69646) - (69646)

Non-controllinginterestarising

fromtheacquisitionofNanga

FarmsPLC - 25905 25905

Issueofsharecapital 244624 244624 - 244624

Balance at 31 March 2010 247 337 40 - 15 829 441 340 704 546 27 369 731 915

COMPANY

Balanceat31March2008 2713 40 14568 40431 309346 367098 - 367098


fortheyear 137116 137116 - 137116

Amortisationofrevaluation

reserve (14568) 14568 - - -


Dividendspaid (70822) - (70822) - (70822)

Balance at 31 March 2009 2713 40 0 37989 392650 433392 0 433392


fortheyear 87379 87379 - 87379


Dividendspaid (69646) - (69646) - (69646)

Issueofsharecapital 244624 244624 - 244624

Balance at 31 March 2010 247 337 40 - 15 829 432 543 695 749 0 695 749

TheCapital RedemptionRes ervewascreatedonthe redemptionofpreferencesharesin1996.

ZambiaSugarPlcacquired85.73%oftheordinarysharesinNangaFarmsPlcforacashconsiderationof ZK155 624 millioneective

27May2009.ThistransactionwasfundedthrougharightsissuethatraisedZK244 624 million.

Thedividendpershare,calcu latedonacashbasis,amounts toZK11.65(2009:ZK13.05).Thecalculat ionisbasedonthedividendspaid

intheyearofZK69 646 million(2009:ZK70822million)dividedbytheweightedaveragenumberofordinarysharesinissueof5 977

066 000 (2009: 5 426 938 035).

ThedividendsdeclaredandproposedamounttoZK15 829 million(2009:ZK37989million).Thecalculationisbasedonthedividend

declaredofZK2.00 per share(2009:ZK6.00)andthedividendproposedofZK0.50 per share(2009:ZK1.00),multipliedbythenumberofordinarysharesinissueof6 331 427 708(2009:5426938035).

STATEMENTS OF CHANGES IN EQUITy

for the year e nded 31 March 2010


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ROUP COMPANY

2010 2010 2009

Notes ZKmillion ZKmillion ZKmillion

Cash ows from operating activities

Protfromoperations 159 006 147 998 78048

Adjustments for:

Depreciation 64 064 59 344 23521

Changeinfairvalueofcaneroots (3 737) (2 877) (1088)

Changeinfairvalueofgrowingcane (48 383) (42 637) (88286)

Provisionsraisedduringtheyear 3 338 3 338 523

Provisionsutilisedduringtheyear (4 056) (4 056) (146)

Factoryoverhaulcostsexpensed 20 256 20 256 19500

Loss/(gain)ondisposalofproperty,plantandequipment (1 133) (533) 688Operatingcashowsbeforemovementsinworkingcapital 189 355 180 833 32760

orking capital movements (119 936) (121 427) 4442

Increaseininventories (16 057) (16 796) (26195)

Factoryoverhaulcostsincurred (25 928) (25 928) (20256)

Decreaseinamountsduetorelatedparties (44 846) (46 865) 51173

(Increase)/decreaseintradeandotherreceivables (192) (3 160) 1431

(Decrease)/increaseintradeandotherpayables (32 913) (28 678) (1711)

Cash generated from operations 69 419 59 406 37202

Netnancingcosts a (112 638) (111 585) -

Incometax(paid)/refund (129) - 2664

Dividendspaid (69 646) (69 646) (70822)

Net cash outows from operating activities (112 994) (121 825) (30956)

Investing activities

Paymentsforproperty,plantandequipment (153 768) (150 589) (587048)

Acquisitionofbusiness b (162 575) - -

Investmentinsubsidiary (155 624) -

Proceedsfromdisposalofproperty,plantandequipment 9 932 6 342 1700

Net cash outows before nancing activities (419 405) (421 696) (616304)

Financing activities

Netproceedsfromissueofequityshares c 244 624 244 624 -

Proceedsfromborrowings 449 127 449 127 586698

Repaymentofborrowings (334 978) (330 787) -

Net decrease in cash and cash equivalents (60 632) (58 732) (29606)

Netcashandcashequivalentsatbeginningofyear 119 777 119 777 149383

Net cash and cash equivalents at end of year 59 145 61 045 119777

STATEMENTS OF CASH FLOwS

for the year en ded 31 March 2010


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1. Signifcant accounting policies

ThenancialstatementshavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)onabasis

consistentwiththeprioryearexceptfortheadoptionoftherevisedIAS1PresentationofFinancialStatements,andIFRS8Operating

Segments.Theadoptionofthesenewandrevisedstandardshasresultedincertaindisclosurereclassications,andthereforehad

noimpactonthegroupsaccountingpolicies.

ThesenancialstatementsarepresentedinZambianKwachainunitsofMillionsofKwacha.

Theprincipalaccountingpoliciesaresetoutbelow:

1.1 Basis of consolidation

TheconsolidatednancialstatementsincorporatethenancialstatementsoftheCompanyandNangaFarmsPLC,controlledby

theCompany(itssubsidiary).ControlisachievedwheretheCompanyhasthepowertogovernthenancialandoperatingpolicies

ofanentitysoastoobtainbenetsfromitsactivities.

Theresultsofthesubsidiaryacquiredduringtheyearareincludedintheconsolidatedstatementofcomprehensiveincomefrom

theeectivedateofacquisitionanduptotheeectivedateofdisposal,asappropriate.

Non-controllinginterestsinthenetassetsofconsolidatedsubsidiariesareidentiedseparatelyfromthegroupsequitytherein.Non-controllinginterestsconsistoftheamountofthoseinterestsatthedateoftheoriginalbusinesscombinationandthenon-

controllinginterestsshareofchangesinequitysincethedateofthecombination.Lossesapplicabletothenon-controllinginterest

inexcessofthenon-controllinginterestsshareinthesubsidiarysequityareallocatedagainsttheinterestsofthegroup,except

totheextentthatthenon-controllinginteresthasabindingobligationandisabletomakeanadditionalinvestmenttocoverthe

losses.

1.2 Business combinations

The acquisition of subsidiar ies is accounted for using the acquisition method. The cost of the acquisition is measured at the

aggregateofthefairvalues(atthedateofexchange)ofassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissued

bytheGroupinexchangeforcontroloftheacquireeplusanycostsdirectlyattributabletothebusinesscombination.

Theacquireesidentiableassets,liabilitiesandcontingentliabilitiesthatmeettheconditionsforrecognitionunderIFRS3are

recognisedattheirfairvaluesattheacquisitiondate,exceptfornon-currentassets(ordisposalgroups)thatareclassiedasheldfor

saleinaccordancewithIFRS5Non-CurrentAssetsHeldforSaleandDiscontinuedOperations,whicharerecognisedandmeasured

atfairvaluelesscoststosell.

1.3 Revenue

Revenueismeasuredatfairvalueoftheconsiderationreceivedorreceivableandrepresentsamountsreceivableforgoodsand

servicesprovidedinthenormalcourseofbusiness,netofdiscountsandsalesrelatedtaxes.Revenueisrecognisedwhengoodsare

deliveredandtitlehaspassed.

Interestincomeisaccruedonatimebasis,byreferencetotheprincipaloutstandingandattheeectiveinterestrateapplicable,

whichistheratethatexactlydiscountsestimatedfuturecashreceiptsthroughtheexpectedlifeofthenancialassettothatassets

netcarryingamount.

Dividendincomefrominvestmentsisrecognisedwhentheshareholdersrightstoreceivepaymenthavebeenestablished.

1.4 Leases

Leasesareclassiedasnanceleaseswheneverthetermsoftheleasetransfersubstantiallyalltherisksandrewardsofownership

tothelessee.Allotherleasesareclassiedasoperatingleases.

Assetsheldundernanceleasesarerecognisedasassetsofthegroupattheirfairvalueattheinceptionoftheleaseor,iflower,

atthepresentvalueoftheminimumleasepayments.Thecorrespondingliabilityto thelessorisincludedin thestatementof

nancialpositionasananceleaseobligation.Leasepaymentsareapportionedbetweennancechargesandreductionofthe

leaseobligationsoastoachieveaconstantrateofinterestontheremainingbalanceoftheliability.Financechargesarecharged

toprotorloss,unlesstheyaredirectlyattributabletoqualifyingassets,inwhichcasetheyarecapitalisedinaccordancewiththe

groupsgeneralpolicyonborrowingcosts.

Rentalspayableunderoperatingleasesarechargedtoprotorlossonthestraight-linebasisoverthetermoftherelevantlease.

NOTES TO THE FINANCIAL STATEMENTS

for the year en ded 31 March 2010


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1.5 Property, plant and equipment

Property,plantandequipmentarestatedinthestatementofnancialpositionatcostlessaccumulateddepreciationandany

impairment losses.Costincludesprofessionalfeesand, forquali fyingassets,capitalisedborrowingcosts.

Assetsheldundernanceleasesaredepreciatedovertheirexpectedusefullivesonthesamebasisasownedassetsor,whereshorter,thetermoftherelevantasset.

Assetsunderconstructionarecarriedatcost,lessanyidentiedimpairmentloss.Suchassetsareinitiallyshownascapitalworkin

progressandtransferredtotherelevantclassofassetswhencommissioned.Costincludesallcostsincurredtobringtheassetinto

useand,wherenecessary,borrowingcosts.

Depreciationiscalculatedonastraightlinebasisatratesestimatedtowritedowntheassettoitsresidualvalue.Depreciation

commenceswhentheassetsarereadyfortheirintendeduse.

Managementreviewstheresidualvaluesannually,consideringmarketconditionsandprojecteddisposalvalues.Intheannual

assessmentofusefullives,maintenanceprogrammesandtechnological innovationsareconsidered.

Thegainorlossarisingonthedisposalorretirementofanitemofproperty,plantandequipmentisdeterminedasthedierence

betweenthesalesproceedsandthecarryingamountoftheassetandisrecognisedinprotandloss.

InZambia,landisheldonleasefromtheGovernmentoftheRepublicofZambiaforaperiodof99years.Inlinewiththerequirements

ofIAS17-Leases,sincetheleasedoesnottransfersubstantiallyalltherisksandownershipof theland,theleaseistreatedasan

operatinglease.Anyadvancepaymentistreatedasaprepaymentandamortisedovertheperiodoftheleaseonastraightlinebasis.

1.6 Intangible assets

Intangibleassetsacquiredinabusinesscombinationandrecognisedseparatelyfromgoodwillareinitiallyrecognisedattheirfair

valueattheacquisitiondate(whichisregardedastheircost).

Intangibleassetswithindeniteusefullivesandintangibleassetsnotyetavailableforusearetestedforimpairment atleast

annually,andwheneverthereisanindicationthattheassetmaybeimpaired.

1.7 Cane roots and growing cane

Canerootsarevaluedatfairvaluedeterminedbytheescalatedaveragecost,usingappropriateinationrelatedindices,ofeach

yearofplantingadjustedfortheremainingexpectedlife. Thefairvalueofgrowingcaneisdeterminedannuallybasedontheestimatedsucrosecontentincaneat31Marchvaluedatthe

estimatedsucrosepriceforthefollowingseason,lessestimatedcostsforharvestingandcanehaulage.

1.8 Factory overhaul costs

Factoryoverhaulcostscompriseexpenditureactuallyincurredonplantandequipmentfortheoverhaulofthefactoryinpreparation

forthenewsugarseasoncommencingafternancialyearend.Thisexpenditureiswrittenoinfulloveritsexpectedusefullife

beingthedurationofonesugarseason.

1.9 Inventories

Sugarinventoriesarevaluedatthelowerofcostandnetrealisablevalue.Costcomprisesdirectmaterialsand,whereapplicable,

directlabourcostsandthoseoverheadsthathavebeenincurredinbringingtheinventoriestotheirpresentlocationandcondition.Netrealisablevalueistheestimateofthesellingpriceintheordinarycourseofbusiness,lessallestimatedcostsofcompletion

andcoststobeincurredinmarketing,sellinganddistribution.Thebasisofdeterminingcostistheaveragemethod.Maintenance

inventoryisvaluedataveragecostwithobsoleteitemsbeingwritteno.Redundantandslowmovinginventoriesareidentied

andwrittendowntotheirnetrealisablevalue.

Eective annual rates of depreciation are :

Leaseholdbuildings 2-5%

Canalsanddomesticwaterworks 2-2.5%

Furniture,ttingsandequipment 25%Plantandmachinery 5-10%

Motorvehicles-Commercial 25%

Motorvehicles-NonCommercial 10-14.3%


for the year ended 31 March 2010 (continued)


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1.10 Provisions

ProvisionsarerecognisedwhentheGrouphasapresentobligation(legalorconstructive)asaresultofapastevent,itisprobable

thattheGroupwillberequiredtosettletheobligation,andforwhichareliableestimatecanbemadeoftheamountofthe

obligation.

Theamountrecognisedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresentobligationatthereportingdate,takingintoaccounttherisksanduncertaintiessurroundingtheobligation.Whereaprovisionismeasuredusingthe

cashowsestimatedtosettlethepresentobligation,itscarryingamountisthepresentvalueofthosecashows.

1.11 Borrowing costs

Borrowingcostsdirectly attributabletotheacquisition,constructionor productionofqualifying assets,which areassets that

necessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,areaddedtothecostofthoseassets,

untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.Investmentincomeearnedonthetemporary

investmentofspecicborrowingspendingtheirexpenditureonqualifyingassetsisdeductedfromtheborrowingcostseligible

forcapitalisation.

Allotherborrowingcostsarerecognisedinprotandlossintheperiodinwhichtheyareincurred.

1.12 Taxation

Incometaxexpenserepresentsthesumofthetaxcurrentlypayableanddeferredtax.

Thetaxcurrentlypayableisbasedontaxableprotfortheyear.Taxableprotdiersfromprotasreportedinthestatementof

comprehensiveincomebecauseitexcludesitemsofincomeorexpensethataretaxableordeductibleinotheryearsanditalso

excludesitemsthatarenevertaxableordeductible.TheGroupsliabilityforcurrenttaxiscalculatedusingtaxratesthathavebeen

enactedorsubstantivelyenactedbythereportingdate.

Deferredtaxisrecognisedontemporarydierencesbetweenthecarryingamountsofassetsandliabilitiesinthenancialstatements

andthecorrespondingtaxbasesusedinthecomputationoftaxableprot.Deferredtaxliabilitiesaregenerallyrecognisedfor

alltaxabletemporarydierences,and deferredtax assets aregenerallyrecognisedfor alldeductibletemporarydierences to

theextentthatitisprobablethattaxableprotswillbeavailableagainstwhichthosedeductibletemporarydierencescanbe

utilised.

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolonger

probablethatsucienttaxableprotswillbeavailabletoallowallorpartoftheassettoberecovered.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichtheliabilityis

settledortheassetrealised,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbythereporting

date.Themeasurementofdeferredtaxliabilitiesandassetsreectsthetaxconsequencesthatwouldfollowfromthemannerin

whichtheGroupexpects,atthereportingdate,torecoverorsettlethecarryingamountofitsassetsandliabilities.

Deferredtaxassetsandliabilitiesareosetwhenthereisalegallyenforceablerighttosetocurrenttaxassetsagainstcurrent

taxliabilitiesandwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupintendstosettlethem

together.

1.13 Foreign currency transactions

ThenancialstatementsoftheCompanyanditssubsidiaryarepresentedinthecurrencyoftheprimaryeconomicenvironment

inwhichitoperates(itsfunctionalcurrency).Forthepurposeoftheconsolidatednancialstatements,theresultsandnancial

positionareexpressedinZambianKwacha(ZK),whichisthefunctionalcurrencyoftheCompanyanditssubsidiary,aswellasthe

presentationcurrencyfortheconsolidatednancialstatements.

InpreparingthenancialstatementsoftheCompanyanditssubsidiary,transactionsincurrenciesotherthantheitsfunctional

currency(foreigncurrencies)arerecordedattheratesofexchangeprevailingatthedatesofthetransactions.Ateachreporting

date,monetaryitemsdenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthatdate.Non-monetaryitems

carriedatfairvaluethataredenominatedinforeigncurrenciesareretranslatedattheratesprevailingatthedatewhenthefairvalue

wasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslated.

Exchangedierencesarerecognisedinprotorlossintheyearinwhichtheyarise.


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1.14 Financial instruments

TheGroupsprincipalnancialinstrumentsaretradereceivables,cashandcashequivalent,bankborrowingsandtradepayables.

Tradereceivabl esarestatedatcostlessprovisionforimpairment.Thisrepresents fairvalue.Cashandcashequivalentaremeasured

atfairvalue,basedonrelevantexchangeratesatthereportingdate.Tradeandotherpayablesarestatedatcost.

Interest-bearingbankloansandoverdraftsareinitiallymeasuredatfairvalue,andaresubsequentlymeasuredatamortisedcost,usingtheeectiveinterestratemethod.Anydierencebetweentheproceeds(netoftransactioncosts)andthesettlementor

redemptionofborrowingsisrecognisedoverthetermoftheborrowingsinaccordancewiththeGroupsaccountingpolicyfor

borrowingcosts.

1.15 Retirement benets

TheGroupsemployeesaremembersofaseparatelyadministereddenedcontributionpensionscheme.TheGroupscontributions

arechargedtotheprotorlossastheybecomepayableinaccordancewiththerulesofthescheme.

TheGroupcontributestotheNationalPensionAuthority(NAPSA)foritseligibleemployeesasprovidedforbyLaw.Membership,

withtheexceptionofexpatriateemployees,iscompulsoryandmonthlycontributionsbybothemployerandemployeesaremade.

Theemployerscontributionischargedtoprotor lossin theyearinwhichitaris es.

1.16 Asset impairment review

AnassessmentismadeateachreportingdatetodeterminewhetherthereisobjectiveevidencethattheGroupstangibleand

intangibleassetsmaybeimpaired.Anestimateofthefutureundiscountednetcashowsoftherelatedassetsovertheremaining

usefullifeisusedtodeterminewhethertheassetvalueisrecoverableandtomeasureanyimpairmentbyreferencetofairvalue.

Ifsuchevidenceexists,theestimatedrecoverableamountoftheassetisdeterminedandanyimpairmentlossonthedierence

betweentherecoverableamountandcarryingamountsisrecognisedinprotorloss.

1.17 Segmental analysis

Segmentreportingispresentedin respect oftheGroupsbusinesssegments.Thebusinesssegmentsformatisbasedonthe

Groupsmanagementand internalreportingstructureand combinesbusinesses withcommon characteristics.Inter segment

pricingisdeterminedonanarmslengthbasis.

Segmentsresults;assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthosethatcanbeallocatedona

reasonablebasis.

TheGroupiscomprisedofthefollowingbusinesssegments:

Canegrowing-thegrowingofsugarcaneforuseinthesugarproductionprocess,

Sugarproduction- themanufactureofsugarfromsugarcane.

2. International fnancial reporting standards in issue, but not yet eective

Atthedateofapprovalofthesenancialstatements,thefollowingrelevantStandardsandInterpretationswereinissue,butnotyet

eective:

IFRS 2: Share-based payments Theamendmenttothisstandardclariestheaccountingforgroupcash-settledshare-basedpaymenttransactionsintheseparatenancialstatementsofanentityreceivingtheserviceswhenanothergroupentityhasthe

obligationtosettletheaward.Theamendmenttothisstandardiseectivefortheyearending31March2011.

IFRS 3: Business combinations (revised)Thesignicantrevisionstothisstandardrelatetothetreatmentofacquisitioncosts(nowtobeexpensed),contingentconsideration,goodwillwherenon-controllingshareholdersareinvolved,stepacquisitionsand partial

disposals.ConsequentialamendmentswerealsomadetoIAS27:ConsolidatedandSeparateFinancialStatements,IAS28:Investments

inAssociatesandIAS31InterestsinJointVentures.Therevisedstandardsareeectivefortheyearending31March2011.

IFRS 9: Financial instruments: classication and measurementThenewstandardintroducesnewrequirementsforclassifyingandmeasuringnancialliabilities;derecognitionofnancialinstruments;impairment;andhedgeaccounting.Thestandardwillbe

eectivefortheyearending31March2014.

IAS 7: Statement of cash owsTheamendmentrequiresthatonlyexpenditurethatresultsinarecognisedassetinthestatement

ofnancialpositionis eligibleforclassicationasinvestingactivities.Theamendmenttothisstandardis eectivefortheyearending31March2012.




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IAS 17: LeasesTheamendedstandardrequiresthatleasesoflandareclassiedaseithernanceoroperatingusingthegeneralprinciplesofIAS17.Priortotheamendmentleasesoflandweregenerallyconsideredtobeoperatingleases.Theamendedstandard

iseectivefortheyearending31March2012.

Thegroupisintheprocessofevaluatingtheeectsofthesenewandrevisedstandardsand,whilsttheyarenotexpectedtohave

asignicantimpactonthegroupsresults,additionaldisclosuresmayberequired.

3. Critical accounting judgements and key sources o estimation uncertainty

3.1 Critical accounting judgements made by management

IntheapplicationoftheGroupsaccountingpolicies,whicharedescribedinnote1,thedirectorsarerequiredtomakejudgements,

estimatesandassumptionsaboutthecarryingamountsofassetsandliabilitiesthatarenotreadilyapparentfromothersources.

Theestimatesan dassociate dassumptionsarebasedonhistoricalexp erienceandother factorsthat areconsideredtoberelevant.

Actualresultsmaydierfromtheseestimates.

Theestimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedin

theperiodinwhichtheestimateisrevisediftherevisionaectsonlythatperiod,orintheperiodoftherevisionandfutureperiods

iftherevisionaectsbothcurrentandfutureperiods.

Managementhasmadethefollowingjudgement,apartfromthoseinvolvingestimations,thathavethemostsignicanteecton

theamountsrecognisedinthenancialstatements.

Impairment of assets

Inmakingitsjudgement, managementhasassessed ateachreporting datewhetherthereisanyindicationthat the Groups

tangibleandintangibleassetsmaybeimpaired.Ifanysuchindicationexists,therecoverableamountoftheassetisassessedin

ordertodeterminetheextentoftheimpairmentloss,ifany.Therecoverableamountisthehigheroffairvaluelesscoststoselland

valueinuse.

3.2 Key sources of estimation uncertainty

IntheprocessofapplyingtheGroupsaccountingpolicies,managementhasmadethefollowingkeyassumptionsconcerningthefutureandotherkeysourcesofuncertaintyatthereportingdatethathavethemostsignicanteectontheamountsrecognised

inthenancialstatements.

Property, plant and equipment residual values and useful lives

Theseassetsarewrittendowntotheirestimatedresidualvaluesovertheiranticipatedusefullivesusingthestraightlinebasis.

Management reviews theresidualvalues annually considering market conditions and projected disposal values. In assessing

usefullives,maintenanceprogrammesandtechnologicalinnovationsareconsidered.Thecarryingvalueofproperty,plantand

equipmentisdisclosedinnote11tothenancialstatements.

Cane roots valuation

Theescalatedaveragecostsofplantingcanerootsareadjustedfortheremainingexpectedlife.Thisrequiresanestimationby

managementoftheaveragenumberofratoonsexpectedfromthecrop.Thecarryingvalueofcanerootsisdisclosedinnote14to

thenancialstatements.

rowing cane valuation

Growingcaneisvaluedattheestimatedsucrosecontentvaluedattheestimatedsucrosepriceforthefollowingseason,less

estimatedcostsforharvestingandtransport.Theestimatedsucrosecontentrequiresmanagementtoassesstheexpectedcane

andsucroseyieldsforthefollowingseasonconsideringweatherconditionsandharvestingprogrammes.Inassessingtheestimated

sucroseprice,managementisrequiredtoassessintowhichmarketstheforthcomingcropwillbesoldandassessthedomesticand

exportpricesaswellasrelatedforeigncurrencyexchangerates.Thecarryingvalueofgrowingcaneisdisclosedinnote16tothe

nancialstatements.

Therearenootherkeyassumptionsconcerningthefutureorkeysourcesofestimationuncertaintyasatthereportingdatethat

managementhaveassessedashavingasignicantriskofcausingamaterialadjustmenttothecarryingamountsofassetsand

liabilitieswithinthenextnancialyear.


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ROUP COMPANY

2010 2010 2009


4. RevenueRevenuerepresentsproceedsreceivablefromthefollowingprimary

businesssegments:

Sugarproduction 641 095 679 683 425070

Canegrowing 266 868 228 280 107408

907 963 907 963 532478

Fromsecondarybusinesssegmentsasfollows:

Localmarket 463 307 463 307 356731

Exportmarket 444 656 444 656 175747

907 963 907 963 532478

5. Proft rom operations

Protfromoperationshasbeendeterminedafterchargingthe

following:

Auditors'remuneration

-Auditfees 837 601 350

-Feesforotherservices 38 - 317

-Otherexpenses 24 18 105

Charitabledonations 312 303 191Changeinfairvalueofcaneroots (3 737) (2 877) (1088)

Changeinfairvalueofgrowingcane (48 383) (42 637) (88286)

Depreciationexpense(seenote11) 64 064 59 344 23521

Directorsandkeymanagementemoluments:

-asdirectorsoftheCompany 1 928 1 449 1390

Employeesremunerationexpenses 169 027 166 803 125206

Employercontributionstopensionfunds(seenote26) 5 917 5 820 5149

Exchangegain - - (540)

Factoryoverhaulcostsexpensed(seenote17) 20 256 20 256 19500

Managementfees(seenote23.1) 5 821 5 821 6418

6. Net fnance costs

Interestpaid 144 594 143 509 121331

Less:capitalised (5 000) (5 000) (121331)

139 594 138 509 -

Interestreceived (592) (560) -

Exchangegains (92 717) (90 385) -

46 285 47 564 -


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ROUP COMPANY

2010 2010 2009


7. TaxationZambiancompanytaxation

-currentyearcharge 60 - -

Deferredtaxation

-currentyearcharge/(credit) 7 305 5 335 (67318)

-underprovisioninprioryear 7 716 7 720 8250

Totaltaxationcharge/(credit) 15 081 13 055 (59068)

Includedundercurrentassets/(liabilities):

Receivableinrespectofthepreviousyear 69 - 2664

Payableinrespectofthecurrentyear (60) - -

9 - 2664

Paid/(utilised)duringtheyear 129 - (2664)

Taxationre ceivable 138 - -

Reconciliation of taxation rate : % % %

Companytaxationapplicabletoagriculturalentities 15.0 15.0 15.0

Increase/(reduction)incharge/(credit)dueto:

-Expensesdisallowedfortaxpurposes 2.4 2.5 1.4

-Benetsoftaxholidayondeferredtax (3.9) (4.4) (64.7)

-Permanentdierences (6.9) (7.8) (37.9)

-Underprovisioninprioryear 6.8 7.7 10.6

Eectiverateoftaxation 13.4 13.0 (75.6)


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ROUP COMPANY

2010 2010 2009

ZK ZK ZK

8. Earnings per shareBasicanddilutedearningspershare(ZK) 16.09 14.62 25.27

Headlineearningspershare(ZK) 15.90 14.53 25.39

Earnings ZK'm ZK'm ZK'm

Earningsforthepurposesofbasicanddilutedearningspershare 96 176 87 379 137116

Number of shares Shares Shares Shares

'000 '000 '000

Weightedaveragenumberofordinarysharesforthepurposesofbasic,dilutedandheadlineearningspershare 5 977 066 5 977 066 5426938

Reconciliationofheadlineearnings

ProtattributabletoshareholdersofZambiaSugarPlc 96 176 87 379 137116

Adjustedfor:-

(Gain)/lossonsaleofproperty,plantandequipment (1 133) (533) 688

Headlineearningsfortheyear 95 043 86 846 137804


9. Dividends paid

ZK6.45pershare(secondinterim2008)-paid13June2008 35004

ZK1.00pershare(nal2008)-paid22August2008 5427

ZK5.60pershare(rstinterim2009)-paid4January2009 30391

ZK6.00pershare(secondinterim2009)-paid12June2009 32 562 32 562

ZK1.00pershare(nal2009)-paid24August2009 5 427 5 427

ZK5.00pershare(rstinterim2010)-paid4January2010 31 657 31 657

69 646 69 646 70822

ZK ZK ZK

Dividendsdeclaredpershare-secondinterimdeclared29April2010 2.00 2.00 6.00

Dividendsproposedpershare-naltobeproposedatAGM 0.50 0.50 1.00

Numberofordinarysharesinissue(millions) 6 331 6 331 5427


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10. Segmental analysis

Theprimarybusinesssegmentsof thegroupandthecompanyareclassiedintosugarproductionandcanegrowingasfollows:

ROUP COMPANY

Year to 31 March 2010 Sugarproduction

Canegrowing

TOTALSugar

productionCane

growingTOTAL

ZK'million ZK'million ZK'million ZK'million ZK'million ZK'million

Revenue 641 095 266 868 907 963 679 683 228 280 907 963

Prot from operations 115 933 43 073 159 006 115 933 32 065 147 998

Property, plant and equipment 918 903 384 475 1 303 378 918 903 287 245 1 206 148

Balanceatbeginningofyear 844 498 271 214 1 115 712 844 498 271 214 1 115 712

Additionsatcost 114 767 44 001 158 768 114 767 40 822 155 589

Acquisitionofbusiness - 103 464 103 464 - - -

Transferto caneroots - (1 703) (1 703) - - -

D epre ciationchargeforth eyear (3 4 553) (29 511) (6 4 0 64) (3 4 553) ( 24 791) (59 3 44)

Netbookvalueofdisposals (5 809) (2 990) (8 799) (5 809) - (5 809)

Other intangible assts - 67 902 67 902 - - -

Investment in subsidiary - 155 624 155 624

Cane roots - 204 826 204 826 - 165 472 165 472

Deferred tax asset/(liability) 16 184 1 798 17 982 16 184 1 798 17 982

Current assets 180 862 312 162 493 024 182 881 263 746 446 627

Inventories 73 474 17 026 90 500 73 474 12 956 86 430

Growingcane - 280 463 280 463 - 244 420 244 420

Factoryoverhaulcosts 25 928 - 25 928 25 928 - 25 928

Tradeandoth erreceivables 16 458 10 49 4 26 952 16 458 6 370 22 828

Currenttaxassets - 138 138 - - -

Amountsduebyrelatedparties 3 957 - 3 957 5 976 - 5 976

Cashandcashequivalents 61 045 4 041 65 086 61 045 - 61 045

Current liabilities 701 118 379 978 1 081 096 701 118 358 989 1 060 107

Tradeandotherpayables 40 078 11 957 52 035 40 078 10 020 50 098

Shorttermportionofborrowings 636 133 355 645 991 778 636 133 342 534 978 667

Amountsduetorelatedparties 22 403 5 601 28 004 22 403 5 601 28 004

Bankoverdrafts - 5 941 5 941 - - -

Provisions 2 503 835 3 338 2 503 835 3 338

Non-current liabilities 153 398 120 703 274 101 153 398 82 599 235 997

Longtermborrowings 153 398 86 374 239 772 153 398 82 599 235 997

Deferredtaxliabilities - 34 329 34 329 - - -

Net asset value 261 433 470 482 731 915 263 452 432 297 695 749


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10. Segmental analysis (continued)

COMPANY

Year to 31 March 2009 Sugar

production

Cane

growing

TOTAL


Revenue 425 070 107 408 532 478

Prot before taxation 28 202 49 846 78 048

Property, plant and equipment 844 498 271 214 1 115 712

Balanceatbeginningofyear 355 809 175 983 531 792

Additionsatcost 504 369 197 117 701 486

Transfertocaneroots (91 657) (91 657)

Depreciationchargefortheyear (13 695) (9 826) (23 521)

Netbookvalueofdisposals (1 985) (403) (2 388)

Cane roots - 162 595 162 595

Deferred tax asset 27 804 3 233 31 037

Current assets 208 923 222 195 431 118

Inventories 52 226 17 409 69 634

Growingcane - 201 783 201 783

Factoryoverhaulcosts 20 256 - 20 256

Tradeandoth erreceivables 16 6 65 3 0 03 19 668

Currenttaxassets - - -

Cashandcashequivalents 119 777 - 119 777

Current liabilities 236 588 92 693 329 281

Tradeandoth erpayables 63 021 15 755 78 776

Shorttermportionofborrowings 115 411 62 145 177 556

Amountsduetorelatedparties 55 114 13 779 68 893

Provisions 3 042 1 014 4 056

Non-current liabilities

Longtermborrowings 635 563 342 226 977 789

Net asset value 209 073 224 319 433 392


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11. Property, plant and equipment

Leaseholdland and

buildings

Plant andmachinery

Motorvehicles

Furnitureand fittings

Capitalwork in

progress

Total


ROUP

Cost

Balanceat1April2009 332349 769834 72018 11773 38792 1224766

Additions - - - - 158768 158768

Acquisitionofbusiness 80118 22897 359 90 - 103464

Transfers 376 45 140747 7196 2020 (18760 8) -

Transferto caneroots - - - - (1703) (1703)

Disposals (4070) - (9879) (774) - (14723)

Reclassication 75685 (81204) 2214 3305 - -

Balance at 31 March 2010 521 727 852 274 71 908 16 414 8 249 1 470 572

Depreciation

Balanceat1April2009 20323 38764 39243 10724 109054

Chargeforyear 10279 38956 12116 2713 64064

Disposals (252) - (4954) (718) (5924)

Balance at 31 March 2010 30 350 77 720 46 405 12 719 167 194

Net carrying amount

Balance at 31 March 2010 491 377 774 554 25 503 3 695 8 249 1 303 378


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11. Property, plant and equipment (continued)

Leaseholdland and

buildings

Plant andmachinery

Motorvehicles

Furnitureand fittings

Capitalwork in

progress

Total


COMPANY

Cost

Balanceat1April2008 59169 76220 52354 11432 425232 624407

Additions - - - - 701486 701486

Transfers 273180 696 692 260 56 341 (996269) -

Transfertocaneroots - - - - (91657) (91657 )

Disposals - (3078) (6392) - - (9470)Balanceat1April2009 332 349 769 834 72 018 11 773 38 792 1 224 766

Additions - - - - 155589 155589

Transfers 37510 140746 5856 2020 (186132) -

Disposals (4070) - (6224) (774) - (11068)

Reclassication 75685 (81204) 2214 3305 - -

Balance at 31 March 2010 441 474 829 376 73 864 16 324 8 249 1 369 287

Depreciation

Balanceat1April2008 16388 29422 37448 9357 92615Chargeforyear 3935 10435 7784 1367 23521

Disposals - (1093) (5989) - (7082)

Balanceat1April2009 20 323 38 764 39 243 10 724 109 054

Chargeforyear 10157 38956 7519 2712 59344

Disposals (252) - (4290) (717) (5259)

Balance at 31 March 2010 30 228 77 720 42 472 12 719 163 139

Net carrying amount

Balance at 31 March 2010 411 246 751 656 31 392 3 605 8 249 1 206 148

Balanceat31March2009 312 026 731 070 32 775 1 049 38 792 1 115 712

Expenditureonassetsunderconstructionisinitiallyshownascapitalworkinprogressandistransferredtotherelevantclassof

assetwhencommissioned.

InaccordancewithSection193oftheCompaniesAct, 1994the Registerof LandandBuildingsisavailable forinspectionby

membersandtheirdulyauthorisedagentsattheregisteredoceoftheCompany.

Following thecompletion of theexpansionprogramme andthe nalisation of thecapitalisationof theexpansionassets,a

reclassicationofassetshasbeenmadesoastoproperlyreecttheexpansionassetsintheircorrectassetcategories.


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Documents

Zambia Sugar Plc AR 2010