Our Profile

Zambeef Products PLC is one of the

largerst agri-businesses in Zambia and
the region, involved in the production,
processing, distribution and retail-
ing of beef, chickens, pork, eggs, milk,
dairy products, edible oils and bread
throughout Zambia & West Africa.

The company is also one of the larg-

est cropping operations in Africa with
4 380 hectares under irrigation of row
crops and 2 450 hectares under irriga-
tion of sugarcane. The Group is in the
process of rolling out a 20 000 hectare
palm plantation.
Contents
Financial Highlights 2
Chairman’s Report 7
Who We Are
Group Structure 8
Geographical Representation 10
Fact Sheet 12
How We Have Performed
Joint Managing Directors’ Report 15
How We Are Governed
Environmental, Health & Safety, and
Social Responsibility Report 27
Corporate Governance Report 32
Citizen’s Economic Empowerment Report 38
Board of Directors- Biography 40
Directors’ Attendance Register 43
Financial and Shareholder Information
Ratios and Statistics 45
Consolidated Financial Statements 46
Notice of the Annual General Meeting Appendix 1
Proxy Form Appendix 2

1
Financial Highlights

Turnover ZMK Millions Turnover US$ Millions

68.7% 80.9%

Profit after tax ZMK Millions Profit after tax US$ Millions

59.0% 70.5%

ZAMBEEF,
2
 Financial Highlights

Weighted average earnings Weighted average earnings

per share ZMK per share US Cent

32.2% 41.7%

Dividends Dividends
ZMK Millions US$ Millions

43.2% 53.5%

flying higher!
3
Financial Highlights
Segmental Analysis of Operating Profits 2008

Fully Diversified Operating Profits

1.08%
LEATHER & SHOE
1.05%
MASTER MEATS NIGERIA
1.74% 0.39%
EGGS MASTER MEATS GHANA
1.18% 0.24%
BAKERY OTHER

1.08%
ZAMCHICK INN
11.67%
EDIBLE OILS 32.27%
BEEF

10.04%
0.41% MILK
FISH

1.67%
EGGS 5.92%
CHICKEN
2.31%
22.61%
STOCK FEED
CROPS

6.35%
PORK

Diversification has reduced earnings

volatility and increased quality of earnings

4
Financial Highlights

5
 Chairman’s Report

6

Dear Shareholder,
I am pleased to report that the financial year
ended September 2008 has once again been
another excellent year for the Zambeef group,
despite the tough global economic climate and
severe floods.
Turnover increased by 69% to K493bn and profit
after tax increased by 59% to K37.4bn. The in-
terim and final dividend pay out of K13.6bn for
2008 is 43% higher than last year dividend pay
out of K9.5bn.
One of our key strengths and reason for our
continued success lies in our diversification strat-
egy and our significant reinvestment policy, which
has reduced earnings volatility and improved the
quality of earnings. We continue to expand our
business in areas where we believe we have a
comparative advantage.
During the financial year under review, we invest-
ed in excess of K289bn in developing, expanding
and diversifying the business, largely through the
issue of 44,036,595 new ordinary shares.This has
resulted in a very well capitalized and diversified
agri-business which is well placed to benefit from
the strong real growth not only in Zambia but in
the region.
We successfully concluded the acquisitions of
Zamanita Ltd (edible oil), the assets of Amanita
Milling Ltd, the acquisition of the Chiawa Farm
assets in the Zambezi Valley, 100% sharehold-
ing of Master Pork Ltd, 85.7% shareholding of
Nanga Farms PLC as well as establishing a palm
plantation and commencing trading operations
in Ghana.
Chairman’s Report
The above acquisitions have been successfully in-
tegrated within the Zambeef Group and we are
anticipating significant upside from these ven-
tures during 2009 and beyond. It is pleasing to
note that the above business acquisitions were
all strong earnings enhancing, contributing to the
weighted average earnings per share increasing
by 32%.
In addition, we approved a number of new and
exciting projects for 2009, totaling in excess of
US$30m, including the building of a new mod-
ern stock feed plant, the setting up of a poultry
hatchery, the continued expansion of the irri-
gated cropping operations, the establishment of
ranching operations, the expansion of the pig-
gery and pork processing operations and the
establishment of the first 3,500 hectares of the
planned 20,000 hectare palm plantation.
I am also proud to report that Zambeef won
the Lusaka Stock Exchange Corporate Gover-
nance first prize which clearly demonstrates
your Board’s commitment to good corporate
governance principles based on openness, integ-
rity, accountability and transparency.
As Chairman of the company, I would like to
express my gratitude for the support I have re-
ceived from my colleagues on the Board as well
as members of Zambeef ’s senior management.
I also wish to extend my appreciation to Mr. Da-
vid Phiri who retired as a non-executive director
in June 2008; David has diligently served Zam-
beef as a director since 2002 and his advise over
the years has been invaluable.
On behalf of the Board, I would like to pay tribute
to our thousands of employees for their loyalty,
enthusiasm and team spirit, which has ensured
another very successful year for Zambeef.
Dr. Jacob Mwanza
Chairman
7
 Who We Are
Group Structure

ZAMBEEF PRODUCTS PLC

SUBSIDIARIES

Zambeef Zamleather Ltd Nanga Farms Novatek Ltd Zampalm Ltd

Retailing Ltd PLC

• 8 Abattoirs • Tannery • Sugarcane • Stock Feed • Palm Plantation

• 91 Butcheries • Finished Leather • Cattle Herd division producing
• 3 Processing Division feed for dairy and
Plants • Shoe Division beef, poultry and
• 7 Zamchick Inns pigs
• Mill & Bakery

100% 100% 85.73% 100% 100%

8
 Who We Are
Group Structure

OPERATING DIVISIONS
WITHIN
ZAMBEEF PRODUCTS PLC

BEEF
CHICKEN
EGG
MILK
CROPPING
RANCHING

Zamanita Ltd Master Pork Ltd Master Meat Master Meats

& Agro (Ghana) Ltd
Production Co.
of Nigeria Ltd

• Edible Oil • Pork Abattoir • Franshise on • Franchise on

Crushing Plant • Pork Processing Shoprite Checkers Shoprite Checkers
• Edible Oil Refinery Plant Butcheries Butcheries
• Margarine Plant • Sow Piggery
• Plastics Plant

100% 100% 90% 90%

9
Who We Are
Geographical Representation

Countries to which Zambeef Products PLC has exported products

Countries to which Zambeef Products PLC is operating

AFRICA INTERNATIONAL
• Angola • China

• Botswana • England

• DRC • Hong Kong

• Malawi • India

• Ghana • Italy

• Nigeria

• Namibia ZAMBIA
BUTCHERIES (91)
• Tanzania ABATTOIRS (8)
FARMS (5)
• South Africa ZAMCHICK INNS (7)
PROCESSING PLANTS (3)
• Zimbabwe
10
 Who We Are
Geographical Representation

D.R.C
TANZANIA
LAKE TANGANYIKA

LAKE MWERU

KASAMA

Northern
ZAMPALM

MANSA
LAKE BANGWEULU
Luapula
LUANGWA
ANGOLA SOLWEZI CHILILABOMBWE
MUFULIRA
North Western CHINGOLA CHAMBESHI
KITWE
KALULUSHI
NDOLA
LUANSHYA Eastern
CHIPATA
KAPIRI MPOSHI

KABWE PETAUKE
Central CHISAMBA
MONGU MUMBWA LUSAKA

Western
MAZABUKA

SENANGA NAMWALA
CHIRUNDU ZAMBEZI

SINAZONGWE
CHOMA

LAKE KARIBA
ZAMBEZI Southern
LIVINGSTONE

ZIMBABWE

BOTSWANA

11
MOZAMBIQUE
 Who We Are
Fact Sheet

• Largest meat company in Zambia slaughtering 60 000 cattle per annum

FEEDLOT
BEEF &

• Largest feedlotter of quality beef in Zambia feedlotting 12 000 grain-fed cattle per
annum
• 8 abattoirs strategically located around Zambia

• State of the art dairy milking 850 cows per day and producing an average of 20
PROCESSING
MILK & MILK

thousand litres of milk per day

• Milk pasteurised and homogenised in modern milk processing plant
• Further value added in producing drinking yoghurt, eating yoghurt, cheese, butter
and cream
• Juice line successfully commissioned in 2008
CHICKEN &

• Largest chicken producer processing 3.5 million chickens per annum

EGG

• Major egg producer currently producing 20 million eggs per annum

• Zambia’s only national egg supplier

• Largest pork processor in Zambia processing 25 000 pigs per annum

PORK

• Largest pig producer producing 6 000 pigs per annum

• Expanding pig production and processing operations

• One of the largest cropping operations in Africa

CROPPING
GRAINS

• Producing maize, soya, wheat and lucerne

• 4 380 hectares under irrigation
• 1 500 hectares of dry land crops
• Harvested 50 000 tons of grain during 2008
• Silo storage capacity of 32 000 tons

• One of the largest sugarcane farms in Zambia

CROPPING
SUGARCANE

• 2 450 hectares under irrigation

• Produced in excess of 162 000 tons of sugarcane
• Beef herd totalling 1 427 head of cattle
CROPPING
PALMS

• First commercial palm plantation in Zambia

• Planting first 3 500 hectares during 2009
• Expected plantation size of 20 000 hectares

12
 Who We Are
Fact Sheet

MILL AND BAKERY

• State of the art wheat mill commissioned November 2007
• Capacity to mill 3 000 tons of wheat per month
• State of the art bakery commissioned during May 2007
• Currently baking 20 000 loaves per day

• The largest edible oils plant in Zambia

ZAMANITA
• Crushes 36 000 tons of oil seed in crushing plant
• Produces 20 000 tons of animal feed cake per annum
• Margarine production commenced in February 2008
• Bio fuels plant commissioned during 2008
• Plastics plant to produce full range of plastic bottles for oil

STOCK FEED
• Currently producing 120 tons of stock feed per day in own stock feed plant

NOVATEK
• Modern fully automated stock feed to commence operation in February 2009 for
both Zambeef and external sales
• Capacity of 6 000 tons per month

LEATHER & SHOES

• Currently processes 80 000 hides per annum through tannery
• Exports to South Africa, Europe, and the Far East valued at US$ 1.4 million per
annum
• Major producer of industrial footwear for the local and regional markets

BUTCHERY OUTLETS
• Sells high quality beef, chicken, pork, milk, eggs, processed meat, edible oils and
bread in 93 outlets throughout Zambia and West Africa
• In store butcheries in Shoprite supermarkets in Zambia, Nigeria and Ghana
FASTFOOD
OUTLETS

• Popular fast food chain selling fried chicken and chips

• 7 Zamchick Inns with more planned for next year
TRANSPORT &
DISTRIBUTION

• One of the largest trucking and transport fleets in Zambia in excess of 200 units
• Own modern workshop to service and maintain fleet

13
 How We Have Performed

14
Zamanita Plant

OVERVIEW
The Zambeef Products PLC Group of Companies
are pleased to confirm the completion of anoth-
er outstanding financial year for the Group. Not
only has the Group’s existing business continued
to grow, but the financial year has seen the suc-
cessful acquisition by Zambeef Products PLC of
four new subsidiaries operating in pork, edible
oils, sugar production and the establishment of
a Palm Plantation. The Zambeef Products PLC
Group also started trading in Ghana through
a new subsidiary in November 2007 resulting
in the Group now having operations in three
African countries namely Zambia, Nigeria and
Ghana.
In order to finance these strategic acquisitions
as well as part finance the large reinvestment in
the Zambeef Products PLC existing operations,
Zambeef Products PLC issued 44,036,595 new
ordinary shares during the year raising K259bn.
This has resulted in a very well capitalised and
diversified agri-business which is well placed to
benefit from the strong real growth not only in
Zambia but in the region.
The Zambian economy has continued to show
strong growth with the economy growing in real
terms by 6.8% in 2007 and is expected to grow
by 6% in 2008. The resulting increase in real in-
comes has contributed to strong growth in the
demand for basic food products and has resulted
in Zambeef Products PLC Group having to in-
vest in all its divisions to continue to meet this
increased demand for food. The group continues
to be the largest food provider in Zambia and
has increased exports into the region in line with
the vision of being the leading food provider
for the region. With the region being a large
net importer of food, the challenge remains for
Zambeef Products PLC to continue to grow to
help ensure food security for the region.
The Zambeef Board of Directors have ap-
proved a number of exciting new projects for
the next financial year which include the building
of a new modern stock feed plant to provide
quality stock feed to Zambeef ’s operations as
How We Have Performed
Joint Managing Directors’ Report
well as the open market, the setting up of a
poultry hatchery in order to provide day old
chicks to Zambeef ’s poultry operations as well
as the open market, the continued expansion
of Zambeef ’s irrigated cropping operations, the
establishment of Zambeef ’s ranching operations
and the expansion of the Zambeef ’s pork pro-
duction. In addition Zampalm Ltd, a subsidiary
of Zambeef Products PLC will start planting the
first 3,500 hectares of the planned 20,000 hect-
are Palm Plantation. Zambeef is also looking at
new opportunities in the region. These projects
will contribute to the continued growth of the
Zambeef Products PLC Group of Companies.
FINANCIAL REVIEW
This has been another year of strong growth for
the Zambeef Products PLC Group with Turnover
increasing by 69% in Kwacha terms and 81% in
Dollar terms. Profit after tax increased by 59% in
Kwacha terms and 71% in Dollar terms.
It is pleasing to note that the acquisition of Master
Pork Ltd, Zamanita Ltd, and Nanga Farms PLC
were all strong earnings enhancing acquisitions
contributing to the weighted average earnings
per share increasing by 32% in Kwacha terms
and 42% in dollar terms.
These excellent results have resulted in the
Zambeef Board of Directors proposing increas-
ing the dividend pay out for the year from K9.5bn
to K13.6bn representing an increase of 43%.
OPERATIONAL REVIEW
This has been a year which has not only seen the
continued expansion of the Zambeef Group’s
existing operations but has also seen the very
successful incorporation of the Master Pork
Ltd pork operations and the Zamanita Ltd oil
operations into the Zambeef Group. Master
Pork Ltd became a wholly owned subsidiary of
Zambeef Products PLC on 2nd January 2008 and
Zamanita Ltd became a wholly owned subsidiary
on 15th February 2008. In addition Nanga Farms
PLC became an 85.73% subsidiary of Zambeef
Products PLC on 1st July 2008. The full benefit
15
How We Have Performed
Joint Managing Directors’ Report
of these acquisitions will come through in the
Zambeef Group results for the 2008/9 Financial
Year. Zambeef Products PLC also incorporated
a 90% subsidiary company called Master Meats
(Ghana) Ltd which commenced trading on 1st
November 2007. This company has had a suc-
cessful first 10 months of operations and the
intention is to continue to grow the West African
operations both in Ghana and Nigeria. Finally
Zambeef Products PLC acquired Zampalm Ltd
on 14th May 2008.This company is in the process
of establishing a 20,000 hectare Palm Plantation
in Zambia’s Northern Province. This project will
only start generating a return in five years time.
However, once in production, this project will
have a very material impact on the results of the
Zambeef Group.
The performance of the divisions and subsidiar-
ies of Zambeef Products PLC are discussed in
more detail below:
16
BEEF (ZAMBEEF)
The beef division has had an outstanding year
with turnover up 23% in Kwacha terms and 32%
in Dollar terms while gross profit increased by
28% in Kwacha terms and 38% in US Dollar
terms.The beef division remains the single largest
division within the Zambeef Group accounting
for 32% of operating profits.
During the 2007 financial year Zambeef Products
PLC invested in 3 new regional abattoirs taking
the number of abattoirs from five to eight. The
rewards from this substantial investment have
now been realised and the Zambeef Group is
in the enviable position of having abattoirs in
almost all the main cattle areas of Zambia. This
has reduced the volatility of supply of beef and
meant that Zambeef has been able to meet the
increased demand for beef from the increasing
real incomes. During the year Zambeef Products
PLC also established a second large beef feed-
lotting operation at its Sinazongwe Farm in
Southern Province. This was necessitated by a
restriction on the movement of live animals out
of Southern Province. This has further strength-
ened the beef operations and meant that the
Group is less vulnerable to disruptions in supply
from disease outbreaks.
The beef division can look forward to continued
growth with real incomes rising in Zambia and
the continual upgrading and expanding of its
retailing network.
CHICKEN (ZAMCHICK)
The chicken division has shown a 19% growth in
turnover while operating profits have remained
constant. This reduction in margins was largely
due to the large increase in feed prices from the
significant increase in maize and soya prices during
the year. There is always a delay in passing these
prices onto the consumer resulting in a decrease
in margins. Despite this reduction in margins
the Zambeef Group remains committed to the
expansion of its poultry operations. The Board
of Directors have approved the establishment of
Zambeef ’s own hatchery which will supply all of

Zambeef ’s day old chick requirements and also
sell day old chicks to the open market. Zambeef
is continuing to build new chicken houses and
is confident that margins will increase particu-
larly as commodity prices appear to be reducing
which will result in feed prices reducing.
EGGS (ZAMCHICK EGG)
The Zambeef Group did not expand its egg
operations during the year. The Group remains
Zambia’s only national egg supplier producing ap-
proximately 20 million eggs per annum. Turnover
was up by 9% while operating profits were down
by 16%. As with the chicken division this is as a
result of a delay in passing the large increase in
stock feed prices onto the consumer resulting in
a reduction in margins. There are no immediate
plans for the expansion of the egg operations.
PORK (MASTER PORK)
The acquisition of Master Pork Ltd and the in-
tegration of these operations into the Zambeef
Group has been a huge success. It the first 9
months as a subsidiary of Zambeef Products
How We Have Performed
Joint Managing Directors’ Report
PLC, Master Pork Ltd has had operating profits
of K12.1bn representing 6.4% of the Zambeef
Group’s operating profits.
The Zambeef Group expects strong growth from
its pork operations for the foreseeable future
and is investing in expanding the pork processing
plant as well as increase its own pork production
in order to plan for the future growth of Master
Pork Ltd. In the first nine months of operations
since becoming a wholly owned subsidiary of
Zambeef Products PLC, Master Pork has more
than doubled its monthly turnover. Continued
strong growth within Zambia is expected and
the aim is to start supplying the processed pork
products into the region as well.
DAIRY (ZAMMILK)
This remains the Zambeef Group’s highest
margin division operating on a gross profit per-
centage of 60% and accounting for 10% of the
Group’s operating profits. The division has per-
formed very well despite the difficulties arising
from the 25% reduction in the dairy herd during
2007. This reduction was in order to remove all
cows with mastitis from the herd following the
exceptionally rainy 2006/7 season. In order to
ensure this problem is not repeated the roads
used by the dairy cows, when being taken to the
dairy parlour for milking, were tarred at a cost
of US$300,000 before the 2007/8 rainy season.
Despite another very heavy rainy season in
2007/8 the tarred roads have ensured that this
problem has not been repeated. We will now
see a steady increase in the dairy herd and con-
sequently in the supply of milk. In order to speed
up the increase in the dairy herd, sexed semen is
now being used.
To compensate for the reduction in the Zambeef
dairy herd, expensive milk was bought which
reduced margins. In addition stock feed prices
increased significantly during the year. The dairy
division performed very well by increasing the
production of its value added lines being butter,
cream, yoghurt, drinking yoghurt and starting the
production of a milk based juice line. In spite of
the 20% reduction in the dairy herd, the dairy
17
How We Have Performed
Joint Managing Directors’ Report
division has performed remarkably well to show
a 12% increase in turnover and a 10% reduction
in operating profits in Kwacha terms.
With the dairy herd numbers increasing strongly
again the dairy division can look forward to solid
growth moving forward in terms of turnover and
margins.
CROPPING (ZAMBEEF FARMING)
The Zambeef Group’s cropping operations con-
tinue to be the fastest growing division within
the group. Zambia’s fertile soils, excellent climate
and ample water resources make it a unique
place in the world to do large scale cropping op-
erations. In addition to the large expansion of its
grain cropping operations, the Zambeef Group is
now a major sugar cane grower having acquired
a large sugar estate during the year.
The cropping operations turnover increased by
69% while operating profits also increased by
69% representing 23% of the Zambeef Group’s
total operating profits.This remains a priority area
for expansion for the foreseeable future particu-
larly with the Zambeef Group’s ability to further
value add to most of its cropping activities.
18
a) Grain
Zambeef Products PLC has aggressively contin-
ued with its strategy of expanding its grain crop-
ping operations with all expansion being done
solely under irrigation. This has necessitated
the identification of suitable areas which have
both the water and the power to undertake
large scale irrigation projects. During 2007 the
Zambeef Sinazongwe Farm was fully developed
with 2,000 hectares under irrigation while
Zambeef ’s Chisamba Farm, with 700 hectares
under irrigation, had insufficient water to expand
the irrigation further. As a result Zambeef identi-
fied a new farming block with potential for ex-
pansion and acquired Chiawa Farm in February
2008. This farm is on the confluence of two of
Zambia’s biggest rivers being the Zambezi and
Kafue Rivers. The Farm had 960 hectares under
irrigation but more importantly the potential to
develop a further 2,000 hectares under irriga-
tion. During 2008 a further 720 hectares under
irrigation has been developed and a further 700
hectares is planned for 2009.
The Zambeef Group has now firmly established
itself as the largest grain growing operation in
Africa having increased its operations from 2,700
hectares under irrigation in 2007 to 4,380 hect-
ares in 2008 and a further 700 hectares planned
for 2009. The Zambeef Group is committed to

continuing to expand its grain cropping opera-
tions which will feed into the new modern stock
feed plant and wheat mill and ultimately be sold in
a value added form as one of pork, beef, chicken,
milk, edible oils or bread through the Zambeef
Group’s extensive retailing network. This will re-
main a fast growing part of the Zambeef Group’s
operations.
b) Sugar
Zambeef Products PLC acquired 85.73% of
Nanga Farms PLC on 1st June 2008. Nanga Farms
PLC owns a large sugar estate in Mazabuka which
has 2,450 hectares of sugar under irrigation. This
includes 250 hectares planted during the current
year with a further 250 hectares under irrigation
planned for 2009. Zambia remains one of the
best sugar growing countries in the world with
Nanga Farms yielding on average just under 130
tonnes of cane per hectare. Further, as a Lesser
Developed Country, Zambia has a quota for
the export of sugar to Europe. In addition, it is
possible that with the high fuel costs in Zambia
legislation will in the future be considered for
the blending of ethanol into fuel. As a result the
Zambeef Group is excited about being involved
in the growing of sugar cane and with Zambia’s
unique sugar growing climate there are hopes to
continue to grow the sugar operations.
How We Have Performed
Joint Managing Directors’ Report
c) Palm Plantation
On 14th May 2008, Zambeef Products PLC ac-
quired 100% of Zampalm Ltd which had planned
for the development of a 20,000 hectare Palm
Plantation in Zambia’s Northern Provence.
During the year Zambeef secured 20,000 hect-
ares of land for the establishment of Zambia’s
first commercial Palm Plantation. The seed for
the planting of 3,500 hectares of Palms in 2009
has been imported and the nursery for growing
the seedlings established.
The Zambeef Group is currently a large importer
of crude palm oil from Malaysia for refining at its
Zamanita oil plant in Lusaka. In addition Zambia
and the region is a large net importer of edible
oil. In line with the Zambeef strategic aim of be-
ing self sufficient in the production of the raw
materials for its operations, this project will not
only cater for Zambeef ’s edible oil requirements
but will also make Zambia a large exporter of
edible oil into the region. With the expensive fuel
in Zambia, Zambeef will always consider the op-
tion of some of the palm oil off-take going into
bio fuels.
This is one of the Zambeef Group’s most excit-
ing projects and will in five years time have a
material impact on the Group’s results.
19
Nanga Farm
How We Have Performed
Joint Managing Directors’ Report
FEED PLANT
The feed plant division remains an important part
of the Zambeef operations adding value to the
maize and soya produced by Zambeef Products
PLC and converting it into a product that can be
fed to the chickens, cattle and pigs. Zambeef cur-
rently produces all its own stock feed in its own
stock feed plant. During the year the Zambeef
Board of Directors approved a US$8m project
for the establishment of a fully automated state
of the art stock feed plant which will take the
feed milling industry in Zambia to a new level.
This stock feed plant should be operational in
February 2009 and will produce all of the
Zambeef Group stock feed requirements as well
as sell stock feed to third parties in Zambia and
into the region. This plant will have the capac-
ity to produce 6,000 tonnes of feed per month.
With the expansion of the Zamanita oil crushing
plant, the stock feed plant will have a good sup-
ply of protein for the livestock sector. Instead of
this protein being exported in the raw form, the
intention is to add maximum value in the stock
feed plant before selling the stock feed in the
Zambian and regional market.
The stock feed operations accounted for only
2.3% of the operating profits of the Zambeef
Group for 2008. It is expected that this will
20
increase during the coming year with the new
stock feed plant in production.
MILLING (ZAMFLOUR)
The flour milling operations have had an out-
standing year with the commencement of
operations at Zambeef ’s new flour mill during
November 2007. Zambeef had been producing
flour under a toll milling agreement with another
mill since November 2006. The start of milling at
Zambeef ’s own mill has resulted in an improve-
ment in quality and efficiency. The brand name,
Zamflour, has grown in strength during the year
and sales both within Zambia and the region
have increased significantly during the year with
turnover up 105% in Kwacha terms and 121%
in Dollar terms while operating profit increased
656% in Kwacha terms and 713% in Dollar
terms.
The milling operations will continue to add value
to Zambeef ’s wheat production and will con-
tinue to grow as Zambeef ’s wheat production
grows annually. This division can look confidently
to the future.
BAKING (ZAMLOAF)
Zambeef started baking bread in its new bakery
 How We Have Performed
Joint Managing Directors’ Report

under the brand name Zamloaf in May 2007.The

bakery has a capacity of 30,000 loaves a day and
is currently producing around 20,000 loaves per
day.This allows Zambeef to add still further value
to the wheat it grows by turning its wheat firstly
into flour and then bread before retailing this
bread through the Zambeef retailing network.
Turnover has increased by 204% in Kwacha
terms and 227% in Dollar terms while operating
profits have increased by 196% in Kwacha terms
and 219% in Dollar terms.

This division will continue to grow and Zambeef

hopes to develop the brand name Zamloaf into
Zambia’s national bread brand.

TANNERY (ZAMLEATHER) & SHOE PLANT

(ZAMSHU)

The tannery and shoe plant have had a difficult

year with turnover down and operating profits
significantly down with the tannery dropping by
52% in Kwacha terms and the shoe plant by 57%
in Kwacha terms.

This large reduction in profits resulted from a

dramatic fall in leather prices and demand fol-
lowing the sub prime mortgage crises and then
added to by the credit crunch later in the year.
The global recession has adversely affected
the demand and price of luxury goods such as
leather.

The tannery had an outstanding year in 2007

following Zamleather successfully securing con-
tracts with two large motor vehicle upholstery
leather manufacturers. This industry has been
badly affected by the large fall in the demand for
motor vehicles in the world

The tannery and shoe plant can expect another

tough year ahead.

FISH

Zambeef has continued to expand its fish sales

through its retailing network with turnover up by
98% in kwacha terms. Margins reduced during
the year with a large increase in the price of fish

21
How We Have Performed
Joint Managing Directors’ Report
worldwide. Zambeef Products PLC have started
a small fish project on its Chiawa Farm and with
fish continuing to be a cheap form of protein, the
Group is looking at the viability of doing a large
fish project.
EDIBLE OIL (ZAMANITA)
In February 2008, Zambeef Products PLC ac-
quired the assets of the largest edible oil pro-
ducer in Zambia. These assets were placed in a
wholly owned subsidiary of Zambeef Products
PLC called Zamanita Ltd. Zamanita has been
very successfully brought into the Zambeef
Group and its products are now being distrib-
uted through the Zambeef Group’s distribution
and retailing network. Zamanita is now the third
largest division within the Zambeef Group after
the beef and farming divisions accounting for
12% of the operating profits.
22
This acquisition was an important strategic de-
cision by the Zambeef Group. The edible oils
produced by Zamanita compliment Zambeef
Group’s range of basic foods retailed through
its retailing network. In addition the by-product
from the oil crushing plant is the main source of
protein for the livestock sector. Zambeef is thus
committed to expanding the crushing plant in or-
der to ensure as many of the oil seeds grown in
Zambia are crushed and value added in Zambia.
This reduces Zambia’s need to import edible oils
and ensures the protein remains in Zambia to
develop the livestock sector.
Zamanita has embarked on an aggressive capital
expenditure program in order to upgrade the
Zamanita plant and ensure it is competitive
in the region. A new cotton seed decorticat-
ing plant has been installed which now allows
Zamanita to crush cotton seed in addition to
soya and sunflower seed. This now means that

Zambia’s cotton seed can stay in the country
for further processing instead of being exported
in its raw form. A new reverse osmosis water
plant was installed during the year in order to
get the margarine plant operating.The margarine
plant is now fully operational and sales increasing
monthly. The reverse osmosis plant is also be-
ing utilised to produce bottled water under the
brand name Zamaqua.The plastics plant has been
expanded and Zamanita is largely self sufficient
in the production of all its own plastic bottling
requirements. The plan is to expand the plastics
plant further to meet the Zambeef Group’s plas-
tic requirements. Further capital expenditure is
ongoing on both the oil crushing plant and the
oil refinery.
The prospects for Zamanita look exciting and
strong growth is expected from this operation
for the foreseeable future.
How We Have Performed
Joint Managing Directors’ Report
RETAILING NETWORK
The Zambeef Group has the largest retailing and
distribution network for perishable products in
the country with 98 outlets strategically located
throughout Zambia. This network is continually
being upgraded and expanded. The retailing net-
work in Zambia includes the franchise on the
18 Shoprite Checkers Supermarket butcheries.
It also includes the Zambeef Group’s fast food
chain which is branded as Zamchick Inns. These
have proved very popular and currently stand at
7 Zamchick Inns.
With the increase in the Zambeef Group’s non
perishable business, the Group is considering
starting a new dry store network in addition to
its existing network which sells both perishable
and non perishable products. This would look at
specialising in stock feed, oil, day-old-chicks, maize
meal and flour.
23
Sinazongwe Farm
How We Have Performed
Joint Managing Directors’ Report
The Zambeef retailing network remains the
engine which drives the Zambeef business. It al-
lows Zambeef to add maximum value to all its
primary production through further processing
before branding and then retailing these products
directly to the end consumer. With real incomes
increasing in Zambia, the resulting increase in
demand for food in Zambeef ’s retailing network
keeps the pressure on all the Zambeef Group
Divisions to continue to expand to meet this
demand.
WEST AFRICA (NIGERIA & GHANA)
On 1st November 2007 the Zambeef Group
commenced operations in Ghana through a 90%
subsidiary called Master Meats (Ghana) Ltd. This
is the second country outside of Zambia that
Zambeef Products PLC has operations in. The
other country being Nigeria where Zambeef
Products PLC also has a 90% subsidiary called
Master Meats and Agricultural Production
Company of Nigeria Ltd. Both these operations
have the franchise on the South African super-
market giant, Shoprite Checkers butcheries, in
these countries.
The Ghana operation has had a very good first
10 months of operations with the company
making an operating profit of K750m and break-
ing even for the year. This is an excellent start
to operations in Ghana. Shoprite are looking at
further sites in Ghana and are in the process of
starting developing 2 sites in Accra and one in
Kumasi which will open in late 2009 and mid
2010. Two further sites are being looked at in
Accra. As a result the Ghana operations will have
strong growth with most of this coming through
in 2010/11.
The Nigerian operation has continued to grow
and will be opening its new pork processing plant
in the New Year. This will be a smaller version of
Zambeef ’s Master Pork operations in Zambia.
Shoprite have an aggressive expansion program
in Nigeria with work starting on four new sites
24
being two in Abuja, one in Lagos and one in
Ogun State. In addition 12 additional sites are
currently being looked at. As a result we expect
in 2010/11 the Nigerian operations to increase
significantly and become a material part of the
Zambeef Group operations.
FUTURE DEVELOPMENTS
The Zambeef Products PLC Board of Directors
have already approved new projects to the value
of US$30m for the 2008/9 Financial Year. These
projects include the setting up of a poultry hatch-
ery, building a modern new piggery, expansion of
the processed meats division, expansion of the
irrigated cropping operations, establishment of
ranching operations, and development of a new
stock feed plant.
The Zambeef Group is also considering stra-
tegic acquisitions both in the region and within
Zambia.The Zambeef Group has prided itself on
the continual reinvestment back into its opera-
tions and expects 2009 to be another exciting
year for the Group.
APPRECIATION
David Phiri retired as a non executive director of
Zambeef Products PLC on 6th June 2008. David
Phiri has had a long association with Zambeef
Products PLC and served as a non executive
director since 2002. His advice over the years
has been invaluable particularly with Zambeef
Products PLC becoming a public company in
February 2003.
As Joint Managing Directors, we would like to
most sincerely thank David Phiri for his wise and
constructive guidance over the years.
STAFF & BOARD OF DIRECTORS
The Zambeef Group remains committed to at-
tract, retain and motivate top quality people in
the best interests of the Group. As Joint Managing

Directors we would like to thank all the staff of the
Zambeef Group in Zambia, Nigeria and Ghana
for their contribution to another very successful
year for Zambeef. It is another year we can all
look back on with a lot of pride. A company is
only as good as its work force and the success
of Zambeef is a reflection of the dedication and
work by the employees.
We would like to welcome our new directors
who have joined us during the year. Dr Aubrey
Muyeke Chibumba joined the Board as a non
executive director following the retirement of
David Phiri. He is currently the Director General
of NAPSA, the main state pension fund in Zambia
and brings wide experience in international busi-
ness and risk management. Diego Casilli joined
as an executive director on 2nd January 2008,
following the acquisition of Zamanita Ltd. Diego
Casilli was one of the owners of this company and
took shares in Zambeef as part of the acquisition
cost. He has an excellent knowledge of business
in Zambia and the region and has brought a lot
of new ideas and opportunities to Zambeef.
Nick Wilkinson joined as an executive director
on 19th September 2008. Nick Wilkinson again
brings enormous business skills and knowledge
of business in Africa having been Chief Executive
of Mpongwe Development Company Ltd and
Nanga Farms PLC, Chief Executive of Dunavant
How We Have Performed
Joint Managing Directors’ Report
Ltd and Managing Director of Lonhro Africa
Cotton.
We would again like to sincerely thank our Board
colleagues for the continual guidance, advise and
support in continuing to grow and expand our
business. Zambeef Products PLC is fortunate in
the high calibre of its directors with enormous
experience in the private and public sector both
within Zambia and internationally. In particular
we must thank our Board Chairman Dr Jacob
Mwanza for his continued tremendous support
and guidance.
CONCLUSION
This has been another exceptional year for the
Zambeef Group of Companies. It is a year in
which Zambeef has matured significantly with a
number of strategic and profitable acquisitions. It
has seen Zambeef widen its operations in Africa
with the commencement of operations in Ghana
and has seen Zambeef expand its existing op-
erations with the strategic objective of being the
leading food provider for the region. Zambeef
can continue to look to the future with a great
deal of confidence.
25
 How We Are Governed

26
 How We Are Governed
Environmental, Health & Safety and Social Responsibility Report

Zambeef’s environmental policy is aimed at providing a safe and health-

ful work place, protecting the environment, and being a responsible cor-
porate citizen within the communities where we operate. The poli-
cy provides the foundation for the following corporate policy objectives:

• Provide a safe and healthful workplace and ensure that personnel are properly trained and have appro-
priate safety and emergency equipment.
• Be an environmentally responsible neighbour in the communities where we operate, and act promptly
and responsibly to correct incidents or conditions that endanger health, safety, or the environment.
• Conduct our business in compliance with applicable environmental and health & safety laws and regula-
tions.
• Be a responsible and committed corporate citizen and be a useful and effective member of the commu-
nities within which we operate.
• Aim to reduce poverty by establishing strong partnerships with local communities & supporting com-
munity initiatives, especially in the health and education areas, that deliver sustainable long-term results &
real benefits to the communities within which we operate.
• Review yearly our strategies, objectives and targets and monitor environmental programs to ensure con-
tinuous improvement of our environmental performance.
• Conduct ongoing audits to ensure compliance of environmental and health & safety legislation and re-
port periodically to the Board of Directors.

27
How We Are Governed
Environmental, Health & Safety and Social Responsibility Report

Zambeef subscribes to the United Nations Millennium Development

Goals which aim to:

• Eradicate extreme poverty & hunger

• Achieve universal primary education
• Promote gender equality and empower women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, Malaria, TB and other diseases
• Ensure environmental sustainability

We are pleased to report that Zambeef has fully complied

with all environmental and health & safety laws and regulations.

Zambeef also continues to assist and/or support

worthy & noble activities & organizations aimed at poverty
alleviation through both cash donations as well as
providing free meat and dairy products on a
regular basis. Zambeef has also continued to
give support in the following areas:

• Construction of schools and health centres

• Electrification and provision of clean water facilities
• Financial support to teachers and health workers
• Funding of educational & healthcare materials
• Donation of food to the vulnerable
• Support to promotion of sport
• Support to traditional ceremonies
• Support to local authorities
• Support to Ministry of Agriculture for development process of Food Safety Policy

Zambeef also carried out training of staff throughout the

country in various fields as a law requirement under the
Factories Act cap 441 and the Food and Drugs Act cap 303.

28
 How We Are Governed
Environmental, Health & Safety and Social Responsibility Report

About 242 managers, stock controllers and cashiers were trained during the
year under review, who later trained their own staff in their respective outlets
and the number came to 941. The staff were trained in the following areas:

• Hazard Analysis of Critical Control Point (HACCP)

• Food hygiene
• Basic Training Course in First Aid
• Fire Drill and use of fire equipment
• Cholera control
• Solid waste management
• Abstract of the Factories Act Cap 441
• Customer service and marketing
• Role of managers in food premises and relationship with Health Inspectors

29
How We Are Governed
Environmental, Health & Safety and Social Responsibility Report

The development of HIV/AIDS policy was finalised and due to

be implemented shortly. However, HIV programmes, such as
Training Peer Educators, Voluntary Counselling and Testing and Train-
ing of HIV/AIDS AWARENESS to focal persons were carried out.

Zambeef has also teamed-up with a UK based charity called Alive &
Kicking, which aims to use the power of football to deliver health
education, in particular, to raise HIV/AIDS awareness and malaria
prevention. The charity already operates in Kenya and South Africa.

Zambeef has agreed to ‘partner’ this worthy

cause and have so far committed to:

• Buying footballs to be distributed to schools and orphanages in poor, largely rural areas
• Provide finished leather from our tannery at reduced prices
• Provide space at our tannery/shoe plant free of charge
• Use of our shoe plant equipment free of charge

30
How We Are Governed

31
How We Are Governed
Corporate Governance Report

CORE POLICY

The directors of Zambeef Products PLC are fully

committed to the principles of effective corpo-
rate governance and the application of high ethi-
cal standards in the conduct of business.

The group endorses the principles of openness,

integrity, transparency and accountability as ad-
vocated in its Code of Corporate Governance
and as set out in the King Report on Corporate
Governance SA 2002 (King II).

Zambeef ’s success in achieving the highest stan-

dards of corporate governance is evidenced by
Zambeef being awarded the first prize in the Lu-
saka Stock Exchange annual awards held in No-
vember 2007.

CODE OF CORPORATE GOVERNANCE

The key principles underpinning the governance

of the group are set out in its Code of Cor-
porate Governance. Zambeef ’s Code of Cor-
porate Governance complies with the require-
ments of the Lusaka Stock Exchange. The group
believes that a corporate culture of compliance
with applicable laws, regulations, internal policies
and procedures is a core component of good
corporate governance. As such, compliance is
one of the most important areas covered by
Zambeef ’s system of internal control.

The Code spells out the company’s commitment

towards shareholders and stakeholders, as well
as policies and guidelines regarding the personal
conduct of management and other employees.

The key sections of the Code relate to Board

and Directors, Board Committees, Legal and
Compliance, Internal Audit, Risk, Environmental,
Health and Safety and Social Responsibility Poli-
cies, Disclosure & Stakeholder Communication
and Organization Integrity.

32

BOARD OF DIRECTORS
The Board of Directors has been appointed by
the shareholders and is responsible to the share-
holders for setting the direction of Zambeef
through the establishment of strategic objectives
and key policies.
The Board consists of twelve directors, of whom
eight are non-executive directors and six are ex-
ecutive directors. The Board considers the non-
executive directors to be independent as de-
scribed in the King II Report. The non-executive
directors, drawing on their skills, experience and
business acumen, have ensured impartial and ob-
jective viewpoints in decision-making processes
and standards of conduct. The mix of techni-
cal, entrepreneurial, financial and business skills of
the directors is considered to be in balance and
to enhance the effectiveness of the Board.
All directors have had access to management
and to such information as was needed to carry
out their duties and responsibilities fully and ef-
fectively. The directors have stayed fully abreast
of the group’s business through meetings with
senior management and site visits.
One third of the non-executive directors are
subject to the rotation provisions contained in
the Code of Corporate Governance and the
Companies Act and retire at the Annual General
Meeting.
BOARD COMMITTEES
Subject to specific fundamental, strategic and for-
mal matters reserved for its decision, the Board
has delegated certain responsibilities to standing
sub-committees, which operate within defined
terms of reference laid down by the Board, as
referred to below.
How We Are Governed
Corporate Governance Report
The board has the following sub-committees to
assist it with its duties:
• Executive committee
• Audit committee
• Remuneration committee
Executive Committee
The Executive Committee is chaired by the Board
Chairman, Dr Jacob Mwanza, and its member-
ship consists of the two Joint Managing Directors
and three non-executive directors.
The committee is responsible for advising the
Joint Managing Directors in implementing the
strategies and policies determined by the Board
and making quick decisions on issues which
cannot wait for the convening of formal board
meetings. The committee is also responsible for
monitoring the performance of the company.
Audit Committee
The Audit Committee is chaired by Mr. Lawrence
Sikutwa, non-executive director, and its member-
ship consists of three non-executive directors
and an independent secretary. An Executive Di-
rector, the Finance Director and the Chief Inter-
nal Auditor attend, report and participate at all
meetings of the committee, which ensures cohe-
sion with senior management.
The committee operates within defined terms
of reference and authority granted to it by the
Board. The Audit Committee has met four times
during the financial year to advise the Board on a
range of matters, including corporate governance
issues, effectiveness of internal control policies
and procedures, assessing management of risks
facing the business. The committee is also re-
sponsible for ensuring compliance with laws and
other regulatory requirements.
The primary role of the Audit Committee is to
ensure the integrity of the financial reporting and
33
How We Are Governed
Corporate governance Report
the audit process, and that a sound risk manage-
ment and internal control system is maintained.
The Committee provides an independent over-
sight of the group’s system of internal control
and financial reporting processes, including the
review of the interim and annual financial state-
ments before they are submitted to the Board
for final approval.
The Audit Committee is required to ensure that
all appropriate controls and processes are in
place to identify all significant business, strategic,
statutory and financial risks and that these risks
are being effectively monitored and managed. In
pursuing these objectives, the Audit Committee
oversees relations with the external auditors and
reviews the effectiveness of the internal audit
function.
The Audit Committee is not aware of any signifi-
cant cases of non-compliance with the group’s
Code of Corporate Governance during the year
under review, nor is it aware of any ascertainable
risk from any litigation pending, in progress or
threatened, which could be regarded as material
t the group’s financial position.
34
Remuneration Committee
The Remuneration Committee is chaired by Dr.
Jacob Mwanza, and its membership consists of
three non-executive directors. The two Joint
Managing Directors and the Executive Director
attend, report & participate at all meetings of the
committee but they do not take part in any deci-
sions regarding their own remuneration.
The main responsibility of the committee is to
review and approve the remuneration and em-
ployment terms and conditions of the executive
directors and senior group employees.
The committee has a clearly defined mandate
from the Board aimed at ensuring that the
group’s remuneration strategies, packages and
schemes are related to performance, are suitably
competitive and give due regard to the interests
of the shareholders and the financial and com-
mercial health of the company.
In determining the remuneration of the execu-
tive directors and senior group employees, the
Remuneration Committee has aimed to provide
the appropriate packages required to attract, re-
tain and motivate the executive directors and
senior group employees.

The committee has considered and submitted
recommendations to the Board concerning the
fees to be paid to each non-executive director.
Any changes to the fees are approved by the
Board and the shareholders in a general meet-
ing.
INTERNAL CONTROL, RISK MANAGEMENT
AND INTERNAL AUDIT
The Board is responsible for the group’s system
of internal control and risk management and for
reviewing its effectiveness. The Chief Internal
Auditor has established the procedures neces-
sary to implement clear operating procedures,
lines of responsibility and delegated authority.
The system of internal control, which is embed-
ded in all key operations, aims to provide assur-
ance that the company’s business objectives are
achieved within the risk tolerance levels defined
by the board. Regular management reporting,
which provides a balanced assessment of key
risks and controls, is an important component of
Board assurance.
The company’s internal audit function now has
a formal collaboration process in place with the
external auditors to ensure efficient coverage of
How We Are Governed
Corporate Governance Report
internal controls and to eliminate duplication of
effort. The key features of the internal control
system that operated throughout the year cov-
ered by the financial statements are described
under the following headings:
Identification and Evaluation of Business Risks
and Control Objectives
The Board has the primary responsibility for
identifying the major risks facing the group and
for developing appropriate policies to manage
those risks and relies on the reports of the Audit
Committee.
Information and Reporting Systems
The group operates a comprehensive annual
planning and budgeting system with an annual
budget approved by the Board. Reports include
profit forecasts and cash flow statements, which
are used in determining that the group is in line
with its projected trading/financial forecasts and
that it has adequate funding for its current and
future needs.
35
How We Are Governed
Corporate Governance Report

Risk Management

The Board identifies and monitors risk through

the planning process, the close involvement of
the executive directors in the group’s operations
and the periodic monitoring of key issues to en-
sure that the significant risks faced by the group
are being identified, evaluated and appropriately
managed, having regard to the balance of risk,
cost and opportunity.

Monitoring

The Audit Committee considers that there have

been no weaknesses in the system of internal
control that resulted in any material losses or
contingencies during the last year or the period
from the balance sheet date to the date of this
report.

36
How We Are Governed

37
How We Are Governed
Citizen’s Economic Empowerment Report
In the year 2006, the Government of the Republic
of Zambia enacted the Citizens Economic
Empowerment Act number 6 (CEE Act). The
Act provides the legal basis for implementing the
economic empowerment program in Zambia.
The objective of this program once imple-
mented would be to expand citizen ownership
and effective participation in the affairs of the
economy. The Act also established the Citizens
Economic Empowerment Commission (CEEC )
whose mandate among others is to promote the
economic empowerment of targeted citizens,
citizens empowered companies, citizens influ-
enced companies and citizens owned companies.
To this effect, nine pillars have been identified
as being a summary of the economic empower-
ment program;
- Equity and Ownership
- Skills Development
- Greenfield Investment
- Access to Finance
- Foreign Direct Investment
- Preferential Procurement
- Good Corporate Governance
- Corporate Social Responsibility
- Transformation of Society
The CEEC with the stakeholders are currently
in the process of developing sector codes which
will become legally binding once CEEC cause
their publication in the Government Gazette.
TARGETED CITIZENS
These have been identified as citizens that have
historically been marginalized and whose access
to economic resources and developmental ca-
pacity has been constrained due to various fac-
tors including race, sex, education background,
status and disability. Targeted citizens include;The
Youth; Women; Disabled; People living with HIV/
AIDS; Senior Citizens; Retirees; Cooperatives/
Farmer Associations.
38
CITIZEN EMPOWERED COMPANY
This is a company where twenty five – fifty per-
cent of its equity is owned by citizens.
CITIZEN INFLUENCED COMPANY
This is a company where five to twenty five
percent of its equity is owned by citizens and
in which citizens have significant control of the
management of the company.
CITIZEN OWNED COMPANY
This is a company where at least fifty point one
percent of its equity is owned by citizens and
in which citizens have significant control of the
company.
In light of the Act, and the provisions thereof,
Zambeef Products PLC Group has set up delib-
erate programs and activities to ensure that the
company adheres to the provisions of the CEE
Act.
Employment
The group employs over 3,485 employees of
which over 98% are Zambian. Furthermore,
the group through its farming division provides
significant employment to the rural community
where poverty levels are much higher than the
urban areas. In addition to providing employment,
the group has set up health, education and sani-
tary facilities to these communities. The group
also runs a confidential program for people living
with HIV/AIDS which is run on a strict inter- per-
sonal relationship to discourage stigmatization
and promote confidentiality.
Equity and Ownership
Zambeef Products PLC joined the stock market
in 2003. This position provided an opportunity
for Citizens at large to buy shares in the com-
pany. It also provided an equal opportunity for
pension fund managers to invest in the com-
pany’s shares so as to provide a return for the
 How We Are Governed

pensioners. In this regard, the group provided an

environment that allowed for citizens to acquire
equity by buying shares on the stock market. A
large percentage of Zambeef ’s shares are owned
by Zambian individuals and Zambian institutions.

Skills Development

The Zambeef group is fully committed to devel-

oping and training its employees at all levels within
the organization. This year, the group carried out
and/or supported training (in Zambia and over-
seas) of over 900 staff in various fields of finance,
engineering, Hazard Analysis of Critical Control
Point (HACCP), farming, corporate governance,
food processing, food hygiene and safety, milling,
sales and marketing.

The group’s continual re-investment into labour

and human resources has resulted in many se-
nior positions being occupied by Zambians, as
well as two Zambians running the group’s West
Africa operations.

Preferential Procurement

Zambeef has eight regional abattoirs and in many

of these largely rural areas, Zambeef is one of
the largest business partners where the group
injects over K8bn per month into these rural
economies through the procurement of locally
produced raw materials, resulting in poverty al-
leviation and sustainable development of these
rural economies.

Citizen’s Economic Empowerment is a new

concept to the Zambian environment still going
through development and implementation stage.
Once fully completed and up in running, the
company will reposition itself to ensure that it
fully complies with the Act.

39
How We Are Governed
Board of Directors - Biography
Dr. Jacob Mwanza
Board Chairman and Chairman of the Remuneration and Executive Committees
Nationality: Zambian
Qualifications: MA Economics (W. Germany)
Experience: Over 30 years Buisiness Management experience, both in the public and
private sectors. Previously Governor of the Central Bank; currently
Chancellor of the University of Zambia. Has served and is currently on several Boards,
including Stanbic Bank, Citi Bank, Intercontinental Hotel.

Rodney Clyde-Anderson
Non-executive Director and member of the Remuneration Committee
Nationality: British
Qualifications: Diploma in Agriculture (Zimbabwe)
Experience: Over 30 years experience in Agribusiness; past Chairman of Herd Book So-
ciety of Zambia and Livestock Services Co-operative Society; previously Vice-president
of Zambia National Farmers Union. Currently serving on several Boards including Bric
Brac Ltd, Wellspring Ltd and Mazabuka Marketing Company Ltd.

Lawrence Sikutwa
Non-executive Director and Chairman of the Audit Committee and member of the
Remuneration and Executive Committees
Nationality: Zambian
Qualifications: FCII; Post Grad Diploma in Insurance (UK)
Experience: Over 30 years experience in Business Management. Previously
General Manager of Zambia State Insurance Corporation; currently Group
Chairman of LSA Ltd Group of Companies.

Hilary Duckworth
Non-executive Director
Nationality: British
Qualifications: R.M.A Sandhurst; MBA (UK)
Experience: Over 20 years experience in Business Management; Merchant
Banking experience with various banks in the UK; Director of a number of
other companies including Bric Brac Ltd.

David Phiri (Retired 06-06-08)

Non-executive Director and Chairman of the Remuneration Committee and member
of the Executive Committee
Nationality: Zambian
Qualifications: Rhodes Scholar
Experience: Over 30 years Business Management experience, both in the public and
private sectors. Previously Governor or the Central Bank and Ambassador to Sweden.
Has served and is currently on several Boards, including Stanbic Bank, Citi Bank, Anglo
American Corporation, Zambia Venture Capital Fund, Madison Insurance Company Ltd,
British American Tobacco, Holiday Inn

40
 How We Are Governed
Board of Directors- Biography
John Rabb
Non-executive Director
Nationality: South African
Qualifications: BSc (Agriculture); MBA (RSA)
Experience: Over 30 years Business Management experience. Currently
Managing Director of Wooltru Group South Africa. Has served and is currently on
several Boards, including Spur Holdings (listed on JSE) and Wellspring Ltd.

Mark Doron Shnaps (alternate to John Rabb)

Non-executive Director
Nationality: South African
Qualifications: Bachelor of Business Science (UCT with honours in Finance) CA (RSA)
Experience: Over 5 years experience in finance and accounting. Currently
Director of Cape Underwear Manufacturers, a division of Seardel Group
Trading (Pty) Ltd, Financial Director of Creative Fashions, a division of Seardel Group
Trading (Pty) Ltd.

Irene Muyenga
Non-executive Director and member of the Audit and Executive Committees
Nationality: Zambian
Qualifications: BA (ed); DIS; LIII
Experience: Over 20 years Business Management experience. Currently
Managing Director of Zambia State Insurance Corporation. Has served and is currently
on several Boards, including African Insurance Organisation, Insurance Advisory Coun-
cil, Organisation for Eastern & Southern African Insurers, Zambia
Insurance Business College, PTA Re-Insurance Company.

Adam Fleming
Non-executive Director
Nationality: British
Experience: Over 30 years Business Management and Banking experience.
Previously Chairman of Harmony Gold (listed on JSE and one of the largest gold min-
ing companies in the world); currently Chairman of Witwatersrand Consolidated Gold
Resources Ltd. Has served and is currently on several Boards.

Brian Dowden (alternate to Adam Fleming)

Non-executive Director
Nationality: South African
Qualifications: Chartered Accountant (RSA)
Experience: Over 30 years experience as a practicing accountant.

Dr. Aubrey Chibumba

Non-executive Director and member of the Audit and Remuneration Committees
Nationality: Zambian
Qualifications: CFA, PhD, MSc, B Eng
Experience: Over 15 years Business Management experience, both in the public and
private sectors. Previously consultant to a number of international banks. Current head
of NAPSA and Advisor to Governor of the Bank of Zambia.

41
How We Are Governed
Board of Directors - Biography

Carl Irwin
Joint Managing Director
Nationality: Zambian
Qualifications: B. Com; ACA (UK)
Experience: Over 17 years of accounting & finance experience with a number of
companies, including Coopers & Lybrand UK. Co-founder of Zambeef Products Plc.
Other directorships include Lubungu Wildlife Safari Company Ltd, Proflight Commuter
Services Ltd, Zambezi Ranching & Cropping Ltd and Master Pork Ltd.

Francis Grogan
Joint Managing Director
Nationality: Irish
Qualifications: BSc Agriculture (Ireland)
Experience: Over 22 years experience in agriculture and meat, including
experience with United Meat Packers (Ireland), one of Europe’s largest meat com-
panies. Co-founder of Zambeef Products Plc. Other directorships include Zambezi
Ranching & Cropping Ltd and Master Pork Ltd.

Yusuf Koya
Executive Director
Nationality: British
Qualifications: BSc in Geology & Economics; MSc in Economics; ACIB (UK)
Experience: Over 17 years banking experience in corporate finance and credit risk
management, both in the UK and Zambia. Previously Head of Corporate Finance, As-
sistant Corporate Director & Country Credit Director with Barclays Bank Zambia Plc.

Nancy Hart
Finance Director
Nationality: American
Qualifications: BSc in Accounting; CPA (USA)
Experience: Over 17 years accounting, finance & audit experience, including 3 years as
an officer in the Enforcement Division of the US SEC and 4 years as Senior Auditor
with Ernst & Young, USA.

Nick Wilkinson
Executive Director
Nationality: British
Qualifications: BCom in Accounting; Chartered Accountant
Experience: Over 20 years experience in senior management in large corporates in
the Southern African region and Zambia. Previously Managing Director of Mpongwe
Development Company and Dunavant Zambia.

42
 How We Are Governed
Directors’ Attendance Register

Diego Casilli
Managing Director (Zamanita Limited)
Nationality: Italian
Qualifications: Bachelor of Commerce with Honors (University of Witwatersrand,RSA)
Experience: Over 18 years in Agro-processing and Commodity Finance operations in
the SADC region.
Other Directorship include Amanita Africa Limited, Inbond Limited, Dolomite Limited.

Danny Museteka
Company Secretary
Nationality: Zambian
Qualifications: MBA (UK); FCCA; PG. DIP BA; Diploma in Accountancy; AZICA
Experience: Over 17 years accounting and finance experience with a number of public
and private companies in Zambia.

The Number of Board Meetings and Committee meetings attended by the

Directors during the financial year

Directors A B C D
Jacob Mwanza 4 1 5
Rodney Clyde- Anderson 3 1
Lawrence Sikutwa 4 7 2
Hillary Duckworth 2
John Rabb 3
Irene Muyenga 4 7 3
Adam Flemming 3
Carl Irwin 4 5
Francis Grogan 4 5
Yusuf Koya 4 4
Nancy Hart 4
Aubrey Chibumba 1 1
Diego Casilli 3
Nick Wilkinson

A- Board Meetings
B- Audit Committee Meetings
C- Remuneration Committee Meetings
D- Executive committee

43
44
 Financial and Shareholder Information
Ratios and Statistics
Income statement information 2008 2007 2006 2005 2004
Revenue K Millions 492 698 291 971 223 782 196 576 164 740
Gross Profit K Millions 190 881 128 456 100 432 85 821 65 564
Profit attributed to the sharehold- 37 368 23 500 19 634 16 683 14 529
K Millions
ers of Zambeef Products PLC

Revenue US$ 137.1 75.8 55.2 43.8 33.9

Millions
Gross Profit US$ 53.1 33.3 24.8 19.1 13.5
Millions
Net Profit US$ 10.4 6.1 4.8 3.7 3.0
Millions
Balance Sheet Information
Total Asset K Millions 718 940 265 464 169 913 162 708 122 535
Shareholders’ Funds K Millions 435 352 154 754 91 429 80 280 70 456
Total Liabilities K Millions 279 496 110 629 78 422 82 428 51 988
Profitability & Return Ratios
Gross Profit Margin % 38.7 44.0 44.9 43.7 39.8
Net Profit Margin % 7.6 8.0 8.8 8.5 8.8
Return on Equity % 8.6 15.2 21.5 20.8 20.6
Asset Turnover times 1.0 1.4 1.7 1.6 1.8
Liquidity Ratios
Current Ratio times 1.3 1.6 1.8 1.68 1.93
Interest Cover (using EBITDA) times 8.9 15.0 13.6 8.5 17.8
Capital Structure Ratios
Long term debt / Equity Ratio % 10.9 24.8 27.8 37.4 18.3
Total Debt / Equity Ratio % 35.4 42.3 46.7 65.9 39.0
Shareholders Ratios
Earnings per share K 270.92 204.94 171.22 145.49 126.71
Dividend per share K 85.69 82.85 74.13 60.61 60.35
Dividend cover times 3.2 2.5 2.3 2.4 2.1
Dividend payout ratio % 31.6 40.4 43.3 41.7 47.6
Dividend Yield % 1.4 1.5 3.0 4.3 7.5
Price Earnings Ratio ratio 23.3 26.8 14.6 9.6 6.3
Net Asset value per share K 2 743.13 1 349.57 854.29 700.10 615.22
Lusaka Stock Exchange Statistics
Market Value per share
At year end K 6 300 5 500 2 499 1 400 800
Highest K 7 000 5 500 2 500 1 400 1 000
Lowest K 5 500 2 499 1 300 800 671

Number of shares issued 158 706 045 114 669 450 114 669 450 114 669 450 114 669 450

Closing Market Capitalisation K Millions 999 848 630 682 286 559 160,537 91 736

45
Financial and Shareholder Information
Consolidated Financial Statements

30 September 2008

Approval of annual financial statements and annual compliance certificate 47

Report of the Directors 48

Statement of Directors’ responsibilities 52

Report of the Independent Auditors 53

Group consolidated profit and loss account 54

Statement of changes in equity 55

Group consolidated balance sheet 56

Company balance sheet 57

Group consolidated cash flow statement 58

Notes to the financial statements 59

Agenda Appendix 1

Form of Proxy Appendix 2

Notes to the Proxy Form Appendix 2

46
 Financial and Shareholder Information
Approval of Annual Financial Statements & Annual Compliance Certificate

Approval of Financial Statements

The Annual Financial Statements that appear on pages 54 to 81 were approved by the Board of Directors on the 21st
November 2008 and signed on its behalf by:

Dr. Jacob Mwanza Nancy Hart

Chairman Finance Director

Lusaka: 21st November 2008

Annual Compliance Certificate

Pursuant to the requirements of schedule 18 to the rules of the Lusaka Stock Exchange, I the undersigned Danny Shaba
Museteka being the duly appointed and registered Secretary certify to the Lusaka Stock Exchange that Zambeef Products Plc
has during the twelve months ended Septemeber 2008, complied with every disclosure requirement for continued listing on
the Lusaka Stock Exchange imposed by the Board of the Exchange during that period.

In addition, I hereby confirm that for the year ended 30 September 2008, the company has lodged with the Registrar of
Companies all such returns as are required by a public company in terms of the Companies Act 1994 and that all such returns
are true and correct.

Danny Shaba Museteka

Company Secretary

This: 21st day of November 2008

47
Financial and Shareholder Information
Report of the Directors
The Directors have pleasure in presenting their report of the activities of the company and the group for the year ended 30
September 2008.

1 PRINCIPLE ACTIVITIES
Zambeef Products PLC and its Subsidiaries (“Group”) is one of the largest agri-businesses in Zambia and the region. The
Group’s principal activities are cropping operations as well as the production, processing and retailing of beef, chicken, pork,
eggs, milk, dairy products, wheat products, leather products and edible oils throughout Zambia and West Africa.

2 THE COMPANY
The company floated on the Lusaka Stock Exchange on 14 February 2003 when it became a public limited company. The
company is incorporated and domiciled in Zambia.

Business Address Postal Address

Plot 1164, Nkanchibaya Road Private Bag 17
Rhodes Park Woodlands
Lusaka Lusaka
Zambia Zambia

3 SHARE CAPITAL
Details of the company’s authorised and issued share capital are included in note 18 to the financial statements.

4 RESULTS
The Group’s results are as follows:
2008 2007
K Million K Million
Turnover 492 698 291 971
Profit before taxation 44 195 28 212
Taxation (5 919) (4 688)
Profit after taxation 38 276 23 524
Profit attributed to minority interest (908) (24)

Profit attributed to the shareholders of Zambeef Products Plc 37 368 23 500

5 DIVIDENDS
During the year an interim dividend of K2 100 million (2007 – K1 500 million) was paid to the shareholders. A final dividend
of K11 500 million has been proposed by the company’s Board of Directors. This compares to a final dividend of K8 000 mil-
lion paid in the previous year. The directors propose to carry the remaining profit for the year of K23 767 million to reserves
(2007 – K14 000 million).

48
 Financial and Shareholder Information
Report of the Directors [continued]
6 SEGMENTAL REPORTING
Contribution to the consolidated turnover and gross profit of the group are as follows:

Turnover Gross Profit

Turnover 2008 2007 Change 2008 2007 Change
K million K million % K million K million %
Beef 166 222 134 929 23 61 589 47 065 31
Chicken 51 425 43 318 19 11 303 12 439 (9)
Pork 28 082 15 984 76 12 128 2 013 503
Crops 78 869 46 612 69 43 156 25 507 69
Stock Feed 35 715 24 323 47 4 415 4 951 (11)
Eggs 8 009 7 341 9 3 186 3 812 (16)
Fish 2 505 1 266 98 776 751 3
Milk 32 202 28 797 12 19 158 21 325 (10)
ZamChick Inn 7 255 6 804 7 2 062 2 450 (16)
Edible Oils 119 971 - - 22 274 - -
Bakery 9 260 3 047 204 2 247 758 196
Flour 21 803 10 626 105 3 314 438 657
Leather 6 948 7 012 (1) 1 679 3 483 (52)
Shoe 1 898 2 284 (17) 387 901 (57)
Master Meats - Nigeria 16 248 12 389 31 1 995 2 416 (17)
Master Meats- Ghana 5 902 - - 749 - -
Other 3 876 2 983 30 463 147 215

Total 596 190 347 716 190 881 128 456

Less:
Intragroup sales (103 492) (55 745)
Group total 492 698 291 971 190 881 128 456

7 MANAGEMENT
Senior Management Position
Carl Irwin Joint Managing Director
Francis Grogan Joint Managing Director
Yusuf Koya Executive Director
Nick Wilkinson Executive Director
Nancy Hart Finance Director
Diego Casilli Managing Director Zamanita
Danny Museteka Company Secretary
Murray Moore General Manager - Food Processing Operations
Ebraham Israel International Retailing Manager
Sushmit N Maitra Business Solutions Manager
Jones Kayawe Technical Director - Zamanita Limited
David Mynhardt General Manager - Farming (Sinazongwe)
Carl Rorbye General Manager - Farming (Huntley)
Rob Boucher General Manager - Farming (Chiawa)
Raymond Strover General Manager - Nanga Farms PLC
Leon Gunter General Manager - Stock Feed
Richard Franklin General Manager - Zamleather Limited
Alaister McLeod General Manager - Poultry
Justin Pigou General Manager - Dairy
Jacob Erasmus General Manager - Copperbelt
John Stephenson General Manager - Master Meat Nigeria
Lufeyo Nkhoma General Manager - Master Meat Ghana

49
Financial and Shareholder Information
Report of the Directors [continued]
Senior Management [cont] Position
Philip Diedericks Financial Manager
John Nkonjela Finance Manager - Zambeef Products PLC
James Banda Finance Manager - Zambeef Retailing Limited
Lloyd Mwiinga Finance Manager - Nanga Farms PLC
Sanjay Kumar Finance Manager - Zamanita Limited
Ryan Stassen Retailing Operations Manager
Clement Mulenga Retailing Regional Manager
Mabvuto Mbao Retailing Regional Manager
Hilary Anderson Retailing Regional Manager
David Ng’ambi Human Resource Manager
Amos Wambili Human Resource Manager - Zamanita Limited
Eddie Tembo Chief Security Manager
Justo Kapulande Public Relations Manager
Pravin Abraham Group Internal Auditor
Ernest Gondwe Masterpork Plant Manager
Bartholomew Mbao Milk Factory Manager
Peter Wandira Mill Manager
Francis Mandamona Cattle Ranch Manager
Walter Roodt Animal Nutritionist
Wilson Mutale Shoe Plant Manager
Ragu Kulkarni Tannery Manager
Theo de Lange Technical Manager
Gert Zietsman Workshop Manager
Christabel Malijani Environmental, Health & Safety Manager

8 DIRECTORS AND SECRETARY

The directors who served during the financial year and at the date of this report were as follows:
J Mwanza Chairman
R Clyde Anderson
C Irwin
F Grogan
H Duckworth
J Rabb (Alternate M Shnaps)
L Sikutwa
D Phiri Retired 6 June 2008
I Muyenga
A Fleming (Alternate B Dowden)
A Chibumba Appointed 6 June 2008
Y Koya
N Hart
D Casilli Appointed 2 January 2008
N Wilkinson Appointed 19 September 2008
D Museteka Company Secretary

9 DIRECTORS’ INTERESTS
The directors held the following interests in the company’s ordinary shares at the balance sheet date:
Beneficial Non-Beneficial
J Mwanza 850 000 -
R Clyde Anderson - 1 537 545
C Irwin - 4 567 373
F Grogan - 4 730 747
H Duckworth - 4 698 120
J Rabb - 5 024 920

50
 Financial and Shareholder Information
Report of the Directors [continued]
9. DIRECTORS’ INTERESTS [continued]
Beneficial Non-Beneficial
L Sikutwa - 679 864
A Chibumba - -
I Muyenga 1 160 -
A Fleming - 8 266 471
Y Koya 14 323 -
N Hart 17 152 -
D Casilli - 4 438 516
N Wilkinson - -

882 635 33 943

There are no other shareholders who hold more than 5% of the issued share capital of the company

10 EMPLOYEES
The group employs 3 485 full time employees (2007 – 1 661) and total salaries and wages were K45 717 million for the year
ended 30 September 2008 (2007 – K30 052 million). The company employs 622 full time employees and total salaries and
wages were K6 551 million (2007 – K6 600 million).

The average number of staff for each month in the year was as follows:

Oct 07 Nov Dec Jan 08 Feb Mar Apr May June July Aug Sept
1 673 1 727 1 735 2 073 2 176 2 154 2 384 2 535 2 538 3 189 3 414 3 485

11 GIFTS AND DONATIONS

The group made donations of K145 million (2007 – K31.5 million) to a number of activities which include Kasisi Orphan-
age, Cheshire Homes, Kaoma Orphanage, Liteta Invalid Compound, Mother of Mary Hospice, Jon Hospice and Kabwe High
Security Prison.

12 EXPORT SALES
The group made exports of US$2.04 million during the year (2007 – US$1.9 million).

13 FIXED ASSETS
The Group purchased assets totalling K220 515 million during the year (2007 – K33 762 million).

14 ANNUAL FINANCIAL STATEMENTS

The annual financial statements set out on pages 54 to 81 have been approved by the directors.

15 AUDITORS
In accordance with the provisions of the Articles of Association of the company the auditors, Messrs Grant Thornton, will
retire as auditors of the company at the forthcoming Annual General Meeting, and having expressed their willingness to con-
tinue in office a resolution for their re-appointment will be proposed at the Annual General Meeting.

By order of the Board

Danny Shaba Museteka

Company Secretary Date: 21 November 2008

51
Financial and Shareholder Information
Statement of the Directors’ Responsibilities

Companies Act requires the directors to prepare financial statements for each financial year which
give a true and fair view of the financial position of Zambeef Products PLC and its subsidiaries and
of its financial performance and its cash flows for the year then ended. In preparing such financial
statements, the directors are responsible for:

• designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement;

• selecting appropriate accounting policies and applying them consistently;

• make judgements and accounting estimates that are reasonable in the circumstances; and

• state whether applicable accounting standards have been followed; and

• preparing the financial statements in accordance with the International Financial Reporting Standards, and on the going
concern basis unless it is inappropriate to presume that the company and the group will continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the company and the group and enable them to ensure that the financial statements comply with
the Companies Act 1994. They are also responsible for safeguarding the assets of the company and the group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board of Directors confirm that in their opinion:

(a) the financial statements give a true and fair view of the financial position of Zambeef Products PLC and its subsidiaries as
of 30 September 2008, and of its financial performance and its cash flows for the year then ended;

(b) at the date of this statement there are reasonable grounds to believe that the company and the group will be able to pay
its debts as and when these fall due; and

(c) the financial statements are drawn up in accordance with International Financial Reporting Standards.

This statement is made in accordance with a resolution of the directors.

Signed at Lusaka on 21 November 2007

Dr. Jacob Mwanza Nancy Hart

Chairman Finance Director

52
 Financial and Shareholder Information
Report of the Auditors

We have audited the accompanying financial statements of Zambeef Products PLC and its subsidiaries, which comprise the
balance sheet as at 30 September 2008, and the income statement, statement of changes in equity and cash flow statement
for the year then ended, and a summary of significant accounting policies and other explanatory notes.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

As described on page 52 management is responsible for the preparation and fair presentation of these financial statements
in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and
maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement; selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.

AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement
of the financial statements. In making those risk assessments, the auditor considers internal control relevant to the group’s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION
In our opinion, the financial statements give a true and fair view of the financial position of Zambeef Products PLC and
its subsidiaries as of 30 September 2008, and of its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In our opinion, the financial statements of Zambeef Products PLC and its subsidiaries as of 30 September 2008 have been
properly prepared in accordance with the Companies Act 1994, and the accounting and other records and registers have
been properly kept in accordance with the Act.

Chartered Accountants

Wesley M Beene
Partner

Lusaka: 21st November 2008

53
Financial and Shareholder Information
Group Consolidated Profit and Loss Account
For the year ended 30 September 2008
Notes Group
2008 2007

K Million K Million
Turnover 5 492 698 291 971
Cost of sales (301 817) (163 515)

Gross profit 19 0881 128 456

Other operating income 736 244
Administrative expenses (139 404) (97 631)
Finance costs (8 018) (2 857)
Profit before taxation 6 44 195 28 212
Income tax expense 7 (5 918) (4 688)
Profit after taxation 38 276 23 524
Profit attributed to minority interest (909) (24)
Profit attributed to the subsidiaries of Zambeef Products Plc 37 368 23 500
Dividend paid/proposed (gross) (13 600) (9 500)
Transfer from revaluation reserve 2 538 2 285
Retained profit for the period 26 306 16 285
Retained profits at 1 October 76 645 60 360
Retained profits at 1 September 102 951 76 645
Weighted Average Earnings per share (Kwacha) 8 270.92 204.94

54
 Financial and Shareholder Information
Statements of Changes in Equity
30 September 2008
Group statement of changes in equity

Share Share Capital Revaluation Retained Total

Capital Premium Reserve Reserve Profits

K Million K Million K Million K Million K Million K Million

At 1 October 2006 10 3 211 14 766 27 833 60 360 91 429
Profit for the year 23 500 23 500
Arising on consolidation (59) (59)
Surplus on valuation 49 38 49 384
Dividends paid (1 500) (1 500)
Dividend Proposed (8 000) (8 000)
Capitalisation issue 105 (105)
Transfer (2 285) 2 285
At 30 September 2007 115 3 106 (44) 74 932 76 645 154 754
Profit for the year 37 368 37 368
Arising from consolidation (74) (74)
Dividend paid (2 100) (2 100)
Dividend proposed (11 500) (11 500)
Rights issue 18 98 373 98 391
Issue of shares 26 158 487 158 513
Transfer (2 538) 2 538
At 30 September 2008 159 259 966 (118) 72 394 102 951 435 352

Company statement of changes in equity

Share Share Revaluation Retained Total

Capital Premium Reserve Profits

K Million K Million K Million K Million K Million

At 1 October 2006 10 3 211 20 839 57 122 81 182
Profit for the year 21 425 21 425
Arising on consolidation
Surplus on valuation 27 772 27 772
Dividends paid (1 500) (1 500)
Dividend Proposed (8 000) (8 000)
Capitalisation issue 105 (105)
Transfer (1 573) 1 573
At 30 September 2007 115 3 106 47 038 70 619 120 879
Profit for the year 24 376 24 376
Arising from consolidation
Dividend paid (2 100) (2 100)
Dividend proposed (11 500) (11 500)
Rights issue 18 98 373 98 391
Issue of Shares 26 158 487 158 513
Transfer (586) 586
At 30 September 2008 159 259 966 46 452 81 981 388 559

55
Financial and Shareholder Information
Group Consolidated Balance Sheet
30 September 2008
Notes Group
2008 2007
K Million K Million
ASSETS

Non-current assets
Property, Plant and Equipment 10 373 416 172 068
Held to maturity financial assets 12 11 760 -
Goodwill 9 69 801 -
Deferred Tax Asset 7 515 -

455 491 172 068

Current assets

Biological assets 13 69 363 38 590

Inventories 14 141 144 36 179
Trade and other receivables 15 48 883 18 598
Amounts due from related companies 16 2 367 29
Income Tax recoverable 7 1 692 -
Total current assets 263 449 93 396
Total assets 718 940 265 464
EQUITY AND LIABILITIES

Capital and reserves

Share capital 18 159 115
Share premium 19 259 967 3 106
Reserves 175 226 151 533
435 352 154 754
Non-current liabilities
Interest bearing liabilities 20 46 618 36 675
Obligations under finance leases 21 644 1 689
Deferred liability 22 4 500 3 960
Deferred tax liability 7 22 959 11 875
74 721 54 199
Current liabilities
Interest bearing liabilities 20 16 315 5 708
Obligations under finance leases 21 2 436 2 123
Trade and other payables 23 89 013 21 210
Amounts due to related companies 29 43 1 180
Taxation payable 7 276 1 525
Dividends payable 11 500 8 000
Cash and cash equivalents 17 85 192 16 683
Total current liabilities 204 775 56 431
Minority interest 4 092 80
Total equity and liabilities 718 940 265 464

The financial statements on pages 54 to 81 were approved by the Board of Directors on 21 November 2008 and were
signed on its behalf by:

Dr. Jacob Mwanza Nancy Hart

Chairman Finance Director

56
 Financial and Shareholder Information
Company Balance Sheet
30 September 2008

Notes Company
2008 2007

K Million K Million
ASSETS

Non-current assets
Property, Plant and Equipment 10 172 588 110 754
Investment in subsidiaries 11 166 729 -
Amount due from Group company 5 205 -
Held to maturity financial assets 12 11 760 1 984
356 282 112 738
Current assets
Biological assets 13 47 575 38 590
Inventories 14 47 648 22 696
Trade and other receivables 15 7 502 5 279
Amounts due from related companies 16 40 871 32 849
Income Tax recoverable 7 963 -
Total current assets 144 559 99 414
Total assets 500 841 212 152
EQUITY AND LIABILITIES

Capital and reserves

Share capital 18 159 115
Share premium 19 259 967 3 106
Reserves 128 433 117 658
388 559 120 879
Non-current liabilities
Interest bearing liabilities 20 28 058 36 675
Defered liability 22 601 588
Deferred taxation 7 14 042 10 739
42 701 48 002
Current liabilities
Interest bearing liabilities 20 6 888 5 708
Trade and other payables 23 16 811 10 207
Amounts due to related companies 24 13 381 456
Taxation payable 7 - 1 465
Dividends payable 11 500 8 000
Cash and cash equivalents 17 21 001 17 435
Total current liabilities 69 581 43 271
Total equity and liabilities 500 841 212 152

The financial statements on pages 54 to 81 were approved by the Board of Directors on 21st November 2008 and were
signed on its behalf by:

Dr. Jacob Mwanza Nancy Hart

Chairman Finance Director

57
Financial and Shareholder Information
Group Consolidated Cash Flow Statement
30 September 2008

Group
2008 2007

K Million K Million
Cash (outflow) inflow (on)/from operating activities
Profit before taxation 44 195 28 212
Interest paid 8 018 2 857
Depreciation 19 039 11 918
Loss on disposal of assets (65) 8
Decrease/(Increase) in Biological assets (30 773) (7 797)
Decrease/(Increase) in Inventory (104 965) (11 346)
Decrease/(Increase) in Trade and other receivables (30 285) (9 497)
Decrease/(Increase) in Amount due from related companies (2 338) (28)
(Decrease)/Increase in Trade and other payables 67 802 7 914
(Decrease)/Increase in Amount due to related companies (1 137) 363
(Decrease)/Increase in Deferred Liability 540 (1 034)
(Decrease)/Increase in Minority interest 3 029 17
Net cash inflow/(outflow) from operating activities (26 941) 21 587
Returns on investments and servicing of finance
Interest paid (8 018) (2 857)
Dividends paid (10 100) (8 499)
Net cash outflow on returns on investments and
servicing (18 118) (11 356)
of finance
Taxation
Income Tax paid (3 714) (645)
Investing Activities
Purchase of Property, plant and equipment (220 508) (33 762)
Investment in held to maturity financial assets (11 760) -
Purchase of goodwill (64 377) -
Proceeds from sale of fixed assets 186 2
Net cash outflow on investing activities (296 459) (33 760)
Net cash outflow before financing (345 232) (24 174)

Financing
Proceeds from issue of shares 256 903 -
Long term loans paid (10 733) (10 016)
Receipt from long term loans 31 284 21 375
Lease finance received (732) 4 353
Net cash inflow from financing 276 722 15 712
Decrease in cash and cash equivalents (68 509) (8 462)
Cash and cash equivalents at 1 October 2007 (16 683) (8 221)
Cash and cash equivalents at 30 September 2008 (85 192) (16 683)
Represented by:
Bank balances and cash 2 913 2 945
Bank overdrafts (88 105) (19 628)
(85 192) (16 683)

58
 Financial and Shareholder Information
Notes to the Financial Statements
1. The Company
Zambeef Products PLC and its Subsidiaries (“Group”) is one of the largest agri-businesses in Zambia and the region. The
Group’s principal activities are cropping operations as well as the production, processing and retailing of beef, chicken, pork,
eggs, milk, dairy products, wheat products, leather products and edible oils throughout Zambia and West Africa.

The Group’s major activities comprise feedlotting, poultry, dairy, cropping, slaughtering, processing of meat products and
retailing as well as running a tannery, shoe plant, edible oil plant and bakery.

2. Principle Accounting Policies

The principal accounting policies applied by the group in the preparation of these financial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.

a) Basis of consolidation
The consolidated income statement and balance sheet include the financial statements of the parent company and its
subsidiary companies made up to the end of the financial year. The results of subsidiaries acquired or disposed of during
the year are included in the consolidated profit and loss account from the date of their acquisition or up to the date of
their disposal. Intergroup transactions and profits are eliminated on consolidation and all income and profit figures relate to
external transactions only.

b) Basis of presentation
The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS).

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgment in the process of applying the group’s accounting policies.

(i) Amendment to published standards effective in 2008:

In 2008, the following new and revised standards and interpretations became effective for the first time and have been
adopted by the group where relevant to its operations.The comparative figures have been restated as required, in accordance
with the relevant requirements:

• IFRIC 14, IAS 19 - The limit on a defined benefit asset

• IFRIC 11, IFRS 2 - The group and treasury share transactions
• IFRIC 12 - Service concession arrangements
• IFRS 8 - Operating segments
• IFRIC 13 - Customer loyalty programmes

(ii) Amendment to published standards that have been early adopted by the group:
In 2008, the following revised standard was early adopted:

• IAS 23 (revised) Borrowing costs. The amendments restrict the alternative treatment of expensing borrowing costs.
All borrowing costs on qualifying assets are now capitalised.

59
Financial and Shareholder Information
Notes to the Financial Statements [continued]
(iii) Interpretations to published standards that are not yet effective and have not been early adopted by the group:
The following new interpretations to existing standards have been published that are mandatory for the group’s accounting
periods beginning on or after 1 January 2009 or later periods but that the group has not early adopted:

Standard or Interpretation Effective for reporting periods

starting on or after

IAS 1 Presentation of financial statements (revised) 1 January 2009

IAS 41 Agriculture (amendment) 1 January 2009
IAS 16 Property, plant and equipment (amendment) 1 January 2009
IAS 32 Financial instruments:Presentation (amendments) 1 January 2009
IAS 36 Impairment of assets (amendments) 1 January 2009
IAS 39 Financial instruments (amendments) 1 January 2009

(iv) Interpretations to published standards that are not yet effective:

The following interpretation and amendments to existing standards have been published and are mandatory for the group’s
accounting periods beginning on or after 1 January 2009 or later periods or are not relevant for the group’s operations:

Standard or Interpretation Effective for reporting periods

starting on or after
IAS 28 Investment in associates (amendment) 1 January 2009
IAS 29 Financial reporting in hyperinflationary economies (amendments) 1 January 2009
IAS 31 Interest in joint venture (amendments) 1 January 2009
IAS 38 Intangible assets (amendment) 1 January 2009
IFRS 2 Share based payment (amendments) 1 January 2009
IAS 40 Investment property (amendment) 1 January 2009
IAS 20 Accounting for Government grants and disclosures of
Government assistance (amendments) 1 January 2009
IFRS 1 First time adoption of IFRS; and IAS 27 consolidated and separate
financial statements 1 January 2009
IFRS 5 Non current assets held for sale and discontinued operations
(amendments) 1 January 2009
IAS 19 Employee benefits (amendments) 1 January 2009
IFRIC 16 Hedges of a net investment in a foreign operation (amendments) 1 October 2008

Based on the group’s current business model and accounting policies, management does not expect material impact on its
financial statements when the Standards or interpretations become effective.

The directors have assessed the relevance of these amendments and interpretations with respect to the group’s operations
and concluded that they may not be relevant to the group based on the current operations.

(c) Revenue recognition

Income is recognised when significant risks and rewards of ownership have been transferred to the buyers and no significant
uncertainties remain regarding the derivation of consideration, associated costs or the possible return of goods.

(d) Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to the income statement during the financial year in which
they are incurred.

Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to the revaluation sur-
plus in shareholders’ equity. Decreases that offset previous increases of the same asset are charged against fair value reserves
directly in equity; all other decreases are charged to the income statement. Each year, the difference between depreciation

60
 Financial and Shareholder Information
Notes to the Financial Statements [continued]

based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s
original cost, net of any related deferred income tax, is transferred from the revaluation surplus to retained earnings.

Depreciation is calculated to write off the cost of property, plant and equipment on a straight line basis over the expected
useful lives of the assets concerned. The principal annual rates used for this purpose are:

Land and buildings 2%

Motor vehicles 20%
Furniture & equipment 10%
Plant & machinery 10%

Capital work in progress is not depreciated.

The assets’ residual values and useful lives are reviewed at each balance sheet date and adjusted if appropriate.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are included in
the income statement in the other operating income.When revalued assets are sold, the amounts included in the revaluation
surplus relating to these assets are transferred to retained earnings.

(e) Leased assets

Where fixed assets are financed by leasing agreements which give rights approximating to ownership (Finance leases) the
assets are treated as if they had been purchased and the capital element of the leasing commitments is shown as obligations
under finance lease. The lease rentals are treated as consisting of capital and interest elements. The capital element is applied
to reduce the outstanding obligations and the interest element is charged to the profit and loss account over the period of
the lease so as to produce a constant periodic rate of interest in the remaining balance of the liability under the lease agree-
ment for each accounting period

(f) Financial assets

The group classifies its investments into the following categories: financial assets at fair value through profit or loss, debtors
and receivables, held-to-maturity financial assets and available-for-sale financial assets. The classification depends on the pur-
pose for which the investments were acquired.

Management determines the classification of its investments at initial recognition and re-evaluate this at every reporting
date.

(i) Financial assets at fair value through income

This category has two sub-categories: financial assets held for trading and those designated at fair value through profit or
loss at inception.

A financial asset is classified into the ‘financial assets at fair value through income’ category at inception if acquired principally
for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short
term profit taking, or if so designated by management.

Financial assets designated as at fair value through profit or loss at inception are those that are:

• held in internal funds to match investment contracts liabilities that are linked to the changes in fair value of these assets.
The designation of these assets to be at fair value through profit or loss eliminates or significantly reduces a measurement or
recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses
on them on different bases;

•managed and whose performance is evaluated on a fair value basis. Assets that are part of these portfolios are designated
upon initial recognition at fair value through profit or loss.

61
Financial and Shareholder Information
Notes to the Financial Statements [continued]

(ii) Debtors and receivables

Debtors and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an ac-
tive market other than those that the group intends to sell in the short term or that it has designated as at fair value through
income or available for sale. Debtors and receivables are recognised at fair value, less provision for impairment. A provision
for impairment of debtors and receivables is established when there is objective evidence that the group will not be able to
collect all amounts due according to their original terms.

(iii) Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities
other than those that meet the definition of debtors and receivables that the group’s management has the positive intention
and ability to hold to maturity. These assets are recognised at fair value, less provision for impairment. A provision for impair-
ment is established when there is objective evidence that the group will not be able to collect all amounts due according to
their original terms.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified
in any of the other categories.

Financial assets are derecognised when the rights to receive cash flows from them have expired or where they have been
transferred and the group has also transferred substantially all risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value.
Debtors and receivables and held-to-maturity financial assets are carried at fair value. Realised and unrealised gains and losses
arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the
income statement in the year in which they arise. Unrealised gains and losses arising from changes in the fair value of non-
monetary securities classified as available for sale are recognised in equity. When securities classified as available for sale are
sold or impaired, the accumulated fair value adjustments are included in the income statement as net realised gains or losses
on financial assets.

Interest on available-for-sale securities is recognised in the income statement. Dividends on available-for-sale equity instru-
ments are recognised in the income statement when the group’s right to receive payments is established.

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active, the
group establishes fair value by using valuation techniques.

(g) Impairment of assets

(i) Financial assets carried at amortised cost

The group assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial
assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there
is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the
asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or
group of financial assets that can be reliably estimated. Objective evidence that a financial asset or group of assets is impaired
includes observable data that comes to the attention of the group about the following events:

• significant financial difficulty of the issuer or debtor;

• a breach of contract, such as a default or delinquency in payments;
• it becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation; or
• observable data indicating that there is a measurable decrease in the estimated future cash flow from a group of financial
assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial
assets in the group, including:
• adverse changes in the payment status of issuers or debtors in the group; or
• national or local economic conditions that correlate with defaults on the assets in the company.

62
 Financial and Shareholder Information
Notes to the Financial Statements [continued]
The group first assesses whether objective evidence of impairment exists individually for financial assets that are individually
significant. If the group determines that no objective evidence of impairment exists for an individually assessed financial asset,
whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and col-
lectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss
is or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred on debtors and receivables or held-to-maturity
investments, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in the income statement.

If in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting the allow-
ance account. The amount of the reversal is recognised in the income statement.

(ii) Financial assets carried at fair value

The group assesses at each balance sheet date whether there is objective evidence that an available-for-sale financial asset
is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference
between the acquisition cost and current fair value, less any impairment loss on the financial asset previously recognised in
income statement – is removed from equity and recognised in the income statement. Impairment losses recognised in the
income statement on equity instruments are not subsequently reversed.The impairment loss is reversed through the income
statement, if in a subsequent year the fair value of a debt instrument classified as available for sale increases and the increase
can be objectively related to an event occurring after the impairment loss was recognised in income statement.

(iii) Impairment of other non-financial assets

Assets that have an indefinite useful life, for example land, are not subject to amortisation and are tested annually for impair-
ment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the as-
set’s carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an asset’s fair value less costs
to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units).

(h) Biological assets

Biological assets are valued at the fair values less estimated point of sale costs as determined by the directors. The fair value
of livestock is determined based on market prices of animals of similar age, breed and genetic merit.

(i) Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is determined on a first in first out basis and includes all
expenditure incurred in the normal course of business in bringing the goods to their present location and condition, includ-
ing production overheads based on normal level of activity. Net realisable value takes into account all further costs directly
related to marketing, selling and distribution.

(j) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments,
balances held with banks.

(k) Borrowing costs

Borrowing costs, being interest payable on loans, are accounted for on an accruals basis.Translation costs arising on arranging
a new financial liability are debited to the liability and amortised over the life of that liability. Borrowing costs are charged to
the income statement for the year in which they are incurred.

63
Financial and Shareholder Information
Notes to the Financial Statements [continued]
(l) Interest bearing liabilities
Short term interest bearing liabilities include all amounts expected to be repayable within twelve months from the date of
the balance sheet, including instalments due on loans of longer duration. Long term interest bearing liabilities represent all
amounts repayable more than twelve months from the date of the balance sheet.

(m) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. Tax currently payable is based on the
results for the year as adjusted for items which are non-assessable or disallowed for tax purposes.

Deferred taxation liabilities are recognised for all taxable temporary differences. Temproary differences can arise from the
recognition for tax purposes of items of income or expense in a different accounting period from that in which they are
recognised for financial accounting purposes. The tax effect of these temporary timing differences is computed by applying
enacted statutory tax rates to any differences between carrying values per the financial statements and their tax base, and
accounted for as deferred tax.

Deferred taxation assets are recognised for all deductible temporary differences to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences can be utilised.

(n) Foreign currencies

(i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which
the group operates (the ‘functional currency’). The financial statements are presented in Zambian Kwacha, which is the
group’s presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the rates of exchange prevailing at the date
of transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the transla-
tion at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the
income statement.

Translation differences on non-monetary items, such as equity at fair value through profit and loss, are reported as part of the
fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial
assets, are included in fair value reserve in equity.

(o) Employee benefits

(i) Pension obligations
The group has a plan with National Pension Scheme Authority (NAPSA) where the group pays an amount equal to the em-
ployee’s contributions. Employees contribute 5% of their gross earnings. This is done for new employees (i.e. those who
entered employment after the introduction of NAPSA) and also for contract employees.

(ii) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an em-
ployee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits when it is
demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan
without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary re-
dundancy. Benefits falling due more than 12 months after the balance sheet date are discounted to present value.

(p) Provisions
Restructuring costs and legal claims
Provisions for restructuring costs and legal claims are recognised when: the group has a present legal or constructive obliga-
tion as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation;
and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee
termination payments. Provisions are not recognised for future operating losses.Where there are a number of similar obliga-
tions, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class
of obligations may be small.

64
 Financial and Shareholder Information
Notes to the Financial Statements [continued]
(q) Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the year in which
the dividends are approved by the company’s shareholders.

3. Critical Accounting Estimates and Judgements

The group makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next finan-
cial year. Estimates and judgements are continually evaluated and based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.

In the process of applying the group’s accounting policies, management has made judgements in determining:

(a) the classification of financial assets;

(b) whether assets are impaired;
(c) estimation of provision and accruals; and
(d) recoverability of trade and other receivables.

4. Management of Financial Risk

(a) Financial risk
The group is exposed to a range of financial risks through its financial assets, financial liabilities (inter-company borrowings).
The most important components of this financial risk are interest rate risk and credit risk.

These risks arise from open positions in interest rate and business environments, all of which are exposed to general and
specific market movements.

The group manages these positions with a framework that has been developed to monitor its customers and return on its
investments.

(i) Credit risk

The group has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due.
Key area where the group is exposed to credit risk is:

• amounts due from customers.

The group structures the levels of credit risk it accepts by placing limits on its exposure to the level of credits given to a
single customer. Such risk is subject to an annual or more frequent review. Limits on the level of credit risk by category and
territory are approved annually by the Board of Directors.

(ii) Capital management

The group’s objective when managing capital is:
• to safeguard the group’s ability to continue as a going concern so that it can continue to provide returns for shareholders
and benefits for other stakeholders.

The group sets the amount of capital in proportion to its overall financing structure.The group manages the capital structure
and makes adjustments to it in the light of the economic conditions and the risk characteristic of the underlying assets. In
order to maintain or adjust the capital structure, the group may adjust the amount of the dividends paid to shareholders,
return capital to shareholders, issues new shares, or sell assets to reduce debt.

(iii) Capital management

The group is exposed to foreign exchange risk arising from exchange rate fluctuations. Foreign currency denominated pur-
chases and sales together with foreign exchange balance sheet items comprise the currency risk of the company. These risks
are minimised by matching foreign currency receipts to the foreign currency payments as well as holding foreign currency
bank accounts and export sales.

65
Financial and Shareholder Information
Notes to the Financial Statements [continued]
5. Turnover
Turnover represents the value of goods invoiced to customers during the year, less returns and allowances

6. Profit Before Taxation Group Company

Profit before taxation is stated after charging:
2008 2007 2008 2007

K Million K Million K Million K Million

Depreciation 19 039 11 918 9 744 8 881

Staff costs 46 234 30 052 6 552 6 600

Legal and professional fees 498 216 492 189

Directors’ Remuneration
Executive 4 900 2 687 4 806 22 687
Non-executive 708 425 708 425
5 608 3 112 5 514 3 112
Auditors Remuneration
Audit service 219 146 110 65
Non-audit service - - - -
219 146 110 65
and after crediting:
Change in share value less estimated point of sale
costs of biological assets 51 770 21 426 42 726 21 426
Exchange (gains)/loss 3 533 1 849 3 225 1 718

7. Income Tax Expense Group Company

2008 2007 2008 2007

K Million K Million K Million K Million

Income tax at 35% / 15% on taxable profit for the
year 830 2 294 40 2 065
Over provision in prior years (430) (92) (127) -
Deferred taxation 5 519 2 302 3 303 1 788
5 919 4 688 3 216 3 853
Reconciliation of the tax charge:
Profit/ (loss) before taxation 44 195 28 212 27 592 25 277
Taxation at current rate on accounting profit 5 336 4 515 3 291 3 791
Tax loss from prior years - (12) - -
5 336 4 503 3 291 3 791
Permanent differences:
Disallowable expenses 604 289 51 (561)
Loss on sale of assets - 1 - 1
Timing differences:
Capital allowances and depreciation (5 306) (1 075) (2 172) (307)
Cattle and crop valuations adjustment (1 131) (1 214) (1 131) (1 214)
Unrealised exchange gains/ (losses) 29 (210) - (259)
Unrealised Tax loss 1 298 - -
Tax payable for the year 830 2 294 40 2 065

66
 Financial and Shareholder Information
Notes to the Financial Statements [continued]
Group Company

2008 2007 2008 2007

K Million K Million K Million K Million

c) Movement in taxation account:
Taxation payable/(recoverable) as at 1 October 1 525 (297) 1 465 (338)
Charges for the year 830 2 385 40 2 065
Overprovision in the prior period (430) - (127) -
Taxation paid (3 714) (563) (2 341) (262)
Arising on acquisition 373 - - -
Taxation payable/(recoverable) as at 30 September (1 416) 1 525 (963) 1 465
Taxation payable (276) - - -
Taxation recoverable (1 692) - (963) -

d) Income tax assessments have been agreed with the Zambia Revenue Authority (ZRA) up to and including the year
ended 30 September 2006. A self-assessment system for income tax was introduced for periods subsequent to 31 March
2004. Income tax returns have been filed with the ZRA for the years ended 30 September 2007. Quarterly tax returns for
the year ended 30 September 2008 were made on the due dates during the year.

Group Company

2008 2007 2008 2007

e) Deferred Taxation
K Million K Million K Million K Million
This represents:
Biological assets 9 248 4 589 5 987 4 589
Accelerated tax allowances 17 812 7 286 8 054 6 150
Unrealised exchange loss/(gain) 128 - - -
Tax loss (4 744) - - -
22 444 11 875 14 041 10 739
Analysis of movement:
At 1 October 11 875 9 572 10 739 8 951
Arising on acquisition 5 051 - - -
Charge to profit and loss 5 518 2 303 3 302 1 788
At 30 September 22 444 11 875 14 041 10 739

8. Earnings Per Share Group Company

2008 2007 2008 2007

K Million K Million K Million K Million

Profit for the year – K Million 37 368 23 500 24 376 21 424
Weighted Average Earnings per share based on
137,928,965 ordinary shares - K 270.92 204.94 176.74 186.84

The weighted average number of ordinary shares is 137,928,965 (September 2007: 114,669,450).

67
Financial and Shareholder Information
Notes to the Financial Statements [continued]
30 September 2008
9. Goodwill
This represents excess of acquisition costs over the net assets in subsidiaries on the date of acquisition.

10. Property, Plant and Equipment

a) Group Leasehold Plant & Motor Furniture & Capital work Total
Land & Build- Machinery Vehicles equipment in progress
ings

K Million K Million K Million K Million K Million K Million

Cost or valuation
At 1 October 2006 41 765 62 324 16 660 3 858 3 259 127 866
Additions 11 933 12 012 6 070 2 083 1 664 33 762
Disposals - - (40) - - (40)
Surplus/(deficit) on
valuation 48 330 (22 964) (11 581) (3 239) - 10 546
At 30 September 2007 102 028 51 372 11 109 2 702 4 923 172 134
Additions 100 039 78 139 18 084 2 860 21 387 220 509
Disposals - (77) (334) - - (411)
At 30 September 2008 202 067 129 434 28 859 5 562 26 310 392 232
Cost 100 078 78 115 17 834 2 928 26 310 225 264
Valuation (2007) 101 989 51 319 11 025 2 634 - 166 968
202 067 129 434 28 859 5 562 26 310 392 232
Depreciation
At 1 October 2006 2 374 15 196 8 476 968 - 27 014
Charge for the year 836 6 341 4 260 481 - 11 918
Disposals - - (29) - - (29)
Adjustment on Valuation (3 210) (21 519) (12 681) (1 427) - (38 837)
At 30 September 2007 - 18 26 22 - 66
Charges for the year 3 553 11 180 3 669 638 - 19 040
Disposals - (77) (213) - - (290)
At 30 September 2008 3 553 11 121 3 482 660 - 18 816
Net book value
At 30 September 2008 198 514 118 313 25 377 4 902 26 310 373 416
At 30 September 2007 102 028 51 354 11 083 2 680 4 923 172 068

(b) The group’s property, plant and equipment situated in Zambia were last revalued in 2007 by Messrs Knight Frank,
Registered Valuation Surveyors, on the basis of market value. Surplus on valuation and depreciation no longer required total-
ling K49 384 million was transferred to a revaluation reserve.

(c) The depreciation charge for the year includes K2 538 million (2007 - K2 285 million) which relates to the surplus
over the original cost of fixed assets shown at a valuation. As this amount should not be taken to reduce the company’s dis-
tributable reserve, an equivalent amount has been transferred to distributable reserve from revaluation reserve.

(d) Included in land, buildings and equipment are borrowing costs amounting to K889 million. These have been capital-
ised in accordance with IAS 23 – Borrowing Costs (amended).

(e) In the opinion of the directors, the carrying values of property, plant and equipment stated above are not higher than
their fair values.

68
 Financial and Shareholder Information
Notes to the Financial Statements [continued]
f) Company Leasehold Plant & Motor Furniture & Capital work Total
Land & Machinery Vehicles equipment in progress
Buildings
K Million K Million K Million K Million K Million K Million
Cost or valuation
At 1 October 2006 37 081 49 960 13 045 1 733 249 102 068
Additions 4 018 4 144 990 174 2 156 11 482
Disposals - - (39) - - (39)
Surplus/(deficit) on
valuation 31 581 (22 166) (11 438) (734) - 2 757
At 30 September 2007 72 680 31 938 2 558 1 173 2 405 110 754
Additions 35 147 23 596 1 172 75 1 588 71 578
Disposals - - - - - -
At 30 September 2008 107 827 55 534 3 730 1 248 13 993 182 332
Cost 35 147 23 596 1 172 75 13 993 73 982
Valuation (2007) 72 680 31 938 2 558 1 173 - 108 349
107 827 55 534 3 730 1 248 13 993 182 332
Depreciation
At 1 October 2006 2 068 11 695 7 446 467 - 21 677
Charge for the year 742 5 259 2 700 181 - 8 882
Disposals - - (29) - - (29)
Adjustment on valuation (2 810) (16 954) (10 117) (648) - (30 530)
At 30 September 2007 - - - - - -
Charges for the year (2 149) 6 813 (638) (144) - (9 744)
Disposals - - - - - -
At 30 September 2008 (2 149) 6 813 (638) (144) - (9 744)
Net book value
At 30 September 2008 105 678 48 721 3 092 1 104 13 993 172 588
At 30 September 2007 72 680 31 938 2 558 1 173 2 405 110 754

(g) The company’s property, plant and equipment were last revalued in 2007 by Messrs. Knight Frank, Registered Valua-
tion Surveyors, on the basis of market value. Net deficit on valuation and depreciation no longer required totalling K27 772
million has been transferred to a revaluation reserve.

(h) The depreciation charge for the year includes K585 million (2007 - K1 572 million) which relates to the surplus
over the original cost of property, plant and equipment shown at a valuation. As this amount should not be taken to reduce
the company’s distributable reserve, an equivalent amount has been transferred to distributable reserve from revaluation
reserve.

(i) Included in land, buildings and equipment are borrowing costs amounting to K889 million. These have been capital-
ised in accordance with IAS 23 – Borrowing Costs (amended).

(j) In the opinion of the directors, the carrying values of property, plant and equipment stated above are not higher than
their fair values.

69
Financial and Shareholder Information
Notes to the Financial Statements [continued]

11. Investments in Subsidiaries

2008 2007

K Million K Million
a) At cost:
At beginning of the year 1 984 1 777
Arising during the year 164 745 207
At end of the year 166 729 1 984

b) The company’s interest in its subsidiaries, which are unlisted, was as follows:

Country of Assets Liabilities Revenues Profit/loss Interest

Name of company
Incorporation K Million K Million K Millions K Millions Held %

Zambeef Retailing Ltd Zambia 72 776 45 502 241 027 772 100
Zamleather Limited Zambia 10 269 2 612 8 853 1 081 100
Master Meat Limited Nigeria 2 033 1 289 12 389 235 90
Total at the End of 30
September 2007 85 078 49 403 262 269 2 088
Zambeef Retailing Ltd Zambia 97 592 70 025 319 607 289 100
Zamleather Limited Zambia 11 848 5 575 8 316 (1 384) 100
Master Meat Limited Nigeria 3 269 1 829 16 248 611 90
Master Meat Limited Ghana 1 759 1 573 5 937 31 90
Master Pork Limited Zambia 36 918 24 168 34 589 994 100
Zamanita Limited Zambia 101 383 97 194 125 791 7 345 100
Zampalm Limited Zambia 5 204 3 509 - - 100
Novatek Limited Zambia 4 907 4 898 - - 100
Nanga Farms PLC Zambia 68 699 41 577 26 300 6 090 85.73
Total at the End of
30 September 2008 331 579 250 348 536 789 13 976

c) Investments in subsidiaries represent equity holdings in the following companies:

2008 2007
K Million K Million
Zambeef Retailing Ltd 30 30
Zamleather Ltd 1 477 1 477
Master Meat & Agro Production Co. of Nigeria Ltd 270 277
Master Meat (Ghana) Ltd 179 200
Master Pork Ltd 26 600 -
Zamanita Ltd 50 960 -
Nanga Farms PLC 85 508 -
Zampalm Ltd 1 695 -
Novatek Ltd 10 -
166 729 1 984

(d) In the opinion of the directors, the value of the company’s interests in the subsidiary companies are not less than the
amounts at which they are stated in these financial statements.

70
 Financial and Shareholder Information
Notes to the Financial Statements [continued]

12. Held to Maturity Financial Assets

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Arising on acquisition of subsidiary 11 760 - 11 970 -

On 1 February 2008, the company issued 2 138 182 new ordinary shares as performance related consideration payable over
three years to the Shareholders of Amanita Premium Oils Limited provided Zamanita Limited achieves a minimum Net Profit
after Tax of US$1.5 million per annum over three years. The shares were issued to Amanita Premium Oils Limited with full
powers of attorney over any and all rights attached to these shares assigned to the Escrow Agents until the performance
related targets are achieved. The fair value of the shares amounted to K11 760 million (K5 500 per share).

13. Biological Assets

Biological assets comprise standing crops, feedlot cattle, dairy cattle, pigs and chickens. At 30 September 2008 there were 5
245 feedlot cattle, 2 073 dairy cattle, 3 353 pigs and 279 916 chickens. A total of 9 245 feedlot cattle, 927 dairy cattle and 1
169 962 chickens were culled in the year.

Biological asset - Group At 1 Oct Increase Gains Decrease At 30 Sept

2007 due to arising from due to sales 2008
purchase Fair Value

K Million K Million K Million K Million K Million

Standing Crops 13 073 17 026 6 752 (24 960) 11 891
Feedlot Cattle 8 782 37 668 16 368 (40 725) 22 093
Dairy Cattle 13 932 - 2 940 (4 195) 12 677
Chickens 2 803 26 712 17 985 (42 936) 4 564
Pigs - 1 130 3 095 (2 993) 1 232
Cane Root - 4 710 686 - 5 396
Standing Cane - 7 566 3 944 - 11 510
Total 38 590 94 812 51 770 (115 809) 69 363

Biological asset - Company At 1 Oct Increase Gains Decrease At 30 Sept

2007 due to arising due to sales 2008
purchase from Fair
Value

K Million K Million K Million K Million K Million

Standing Crops 13 073 17 026 6 752 (24 960) 11 891
Feedlot Cattle 8 782 35 337 15 049 (40 725) 18 442
Dairy Cattle 13 932 - 2 940 (4 195) 12 677
Chickens 2 803 26 712 17 985 (42 936) 4 564
Total 38 590 79 075 42 726 (112 816) 47 575

71
Financial and Shareholder Information
Notes to the Financial Statements [continued]
14. Inventories
Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Trading stocks 55 402 17 668 34 601 14 408
Abattoir stocks 878 2 539 - -
Raw Materials 57 721 - - -
Stockfeeds 3 750 4 980 3 651 4 980
Consumables 18 179 9 371 9 396 3 308
Raw hides and chemicals 1 080 1 621 - -
Stores 4 169 - - -
Less Provision for obsolete stock (35) - - -
141 144 36 179 47 648 22 696

15. Trade and Other Receivables

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Trade receivables 39 947 17 624 8 186 5 841
Less: provision for impairment losses (765) - (684) (562)
Prepayments 8 933 - - -
Other receivables 768 974 - -
48 883 18 598 7 502 5 279

16. Amounts Due from Related Companies

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Leopard Investments limited 253 28 242 28
Tractorzam 47 - 239 -
Kanyanja Development 102 - 102 20
Zambezi Ranching & Cropping Limited 844 - 1 000 -
Amagrain Limited 79 - - -
Proflight 2 - - -
Inbond Zambia 1 039 - - -
Zambeef Retailing - 18 342 24 794
Zamleather Limited - 2 029 1 266
Master Pork Limited - - 10 793 6 255
Zampalm Limited - 2 361 -
Novatek Limited - 4 423 -
Master Meat & Agro Production Co. of Nigeria Lim- - 408 416
ited
Master Meat (Ghana) Limited - 930 68
2 367 28 40 871 32 849

72
 Financial and Shareholder Information
Notes to the Financial Statements [continued]

17. Cash and Cash Cquivalents

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Cash in hand and at bank 2 913 2 945 784 724
Bank overdrafts (note (a)) (88 105) (19 628) (21 785) (18 160)
(85 192) (16 683) (21 001) (17 436)

(a) Banking facilities

The group has overdraft facilities totalling K3.1 billion (2007 – K3.0 billion) and US$2 600 000 (2007 – US$2 600 000), and
a bank guarantee line of US$300 000 (2007 – US$300 000) with Citibank Zambia Limited. The group has overdraft facilities
totalling K5.0 billion (2007 – K4 Billion) and US$24.025 million (2007 – US$1 900 000) with Barclays Bank Zambia PLC (In-
cluding Zamanita). The Citibank overdrafts bear interest rates of 15% for the Kwacha facility and US$ Prime plus 1.25% for
the United States Dollar facility.The Barclays Bank overdraft bears interest rates of 15% for the Kwacha facility and 12 month
Libor plus 2% for US Dollar facility. Nanga Farms PLC, a subsidiary of the group, has overdraft facilities totalling US$1 700
000 and a letter of credit line of US$1 500 000 with Standard Chartered Bank Zambia PLC. The overdraft bears an interest
rate of 3 month Libor plus 2%.

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Zambia National Commercial Bank PLC 476 943 84 -
Citibank Zambia Limited 11 892 10 430 7 280 1 141
Barclays Bank Zambia PLC 81 286 8 254 14 422 17 019
Standard Chartered Bank Zambia PLC 5 820 - - -
99 474 19 627 21 786 18 160

(i) The bank overdrafts and the guarantee line are secured by a first floating charge over all the assets of the company and
the subsidiary company. The floating charge ranks pari passu between Barclays Bank Zambia PLC, Citibank Zambia Limited,
Zambia National Commercial Bank PLC and DEG.

(ii) The group has a right of set off for overdraft balances with positive bank balances at group level.

(iii) Legal mortgage over plots 5001 and 5960, Mumbwa road, Lusaka (Zamanita), registered to cover US$20 000 000;

(iv) Floating debenture over all other assets of Zamanita Ltd, registered to cover US$15 000 000;

(v) Corporate guarantee by Zambeef Products PLC in favour of Barclays Bank Zambia PLC, registered to cover US$10 000
000 with respect to Zamanita facilities.

73
Financial and Shareholder Information
Notes to the Financial Statements [continued]

18. Share Capital

2008 2007

K Million K Million
Authorised 200 120
200 000 000 ordinary shares of K1 each
(2007: 120 000 000 ordinary shares of K1 each)
Issued and fully paid 159 115
158 706 045 ordinary shares of K1 each
(2007: 114 669 450 ordinary shares of K1 each)

(a) At an Annual General Meeting of the company held on 21st December 2007 the company’s authorised share capital was
increased from K120 000 000 to K200 000 000 by the creation of 80 000 000 ordinary shares of K1 each; these shares to
rank pari passu with the existing shares of the company.

(b) During the year the company’s issued share capital was increased by the issue of 31 736 204 ordinary shares of K1 each
at a premium of K5 499 per share and 12 300 391 ordinary shares of K1 each at a premium of K6 899 per share.

(c) Employee share option scheme

Share options are granted to selected senior employees as a way of rewarding and retaining key employees. Options are
conditional on the employee completing three years’ service (the vesting period). The options are exercisable starting three
years from the date of the grant, subject to the group achieving its targets for the year. The group has no legal or construc-
tive obligation to repurchase or settle the options in cash.

In December 2007, 750 000 share options were granted to 49 key employees with an exercise price set at a market price
on 30 September 2007 of K5 500 per share exercisable in 2010. The value of these options has not been determined and
included in the financial statements.

19. Share Premium

2008 2007

K Million K Million
At 1 October 3 107 3 211
Transfer to issued share capital - (104)
Arising during the year (note 19) 259 378 -
Cost of issue of shares written off (2 518) -
At 30 September 259 967 3 106

74
 Financial and Shareholder Information
Notes to the Financial Statements [continued]
20. Interest Bearing Liabilities
Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Barclays Bank Zambia PLC (note (a)) 20 572 23 133 17 046 23 133
DEG - Deutsde Investitious
GUD Entwicklungsgesellschift
MBH (note (b)) 17 900 19 250 17 900 19 250
Standard Chartered Bank Zambia PLC
(note (c)) 24 462 - - -
62 934 42 383 34 946 42 383
Less: Short term portion (repayable within next 12
months) (16 315) (5 708) (6 888) (5 708)
46 619 36 675 28 058 36 675

(a) Barclays Bank Zambia PLC

• The company has a loan facility of US$749 999.98 (original limit US$1 500 000) from Barclays Bank Zambia PLC,
underwritten by Barclays Bank Mauritius Offshore Banking Unit. Interest on the loan is 2.5% above the six-month LIBOR
rate per annum, payable six–monthly in arrears. The principal is repayable in 14 equal bi-annual instalments commencing July
2006.

• The company has a loan facility of US$2 275 000 (original limit US$3 500 000) from Barclays Bank Zambia PLC
under the European Investment Bank line of credit. Interest on the loan is 7% fixed per annum, payable monthly in arrears.
The principal is repayable in 20 equal quarterly instalments commencing January 2007.

• The company has a loan facility of US$684 000 (original limit US$1 520 000) from Barclays Bank Zambia PLC under
the European Investment Bank line of credit. Interest on the loan is 7.5% fixed per annum, payable monthly in arrears. The
principal is repayable in 20 equal quarterly instalments commencing March 2006.

• The company has a loan facility of EUR387 375 (original limit EUR929 700) from Barclays Bank Zambia PLC under
the European Investment Bank line of credit. Interest on the loan is 7% fixed per annum, payable monthly in arrears. The
principal is repayable in 12 equal bi-annual instalments commencing September 2006.

• The company has a loan facility of EUR185 672.29 (original limit EUR232 090) from Barclays Bank Zambia PLC
under the European Investment Bank line of credit. Interest on the loan is 7% fixed per annum, payable monthly in arrears.
The principal is repayable in 10 equal bi-annual instalments commencing October 2007.

• Zamanita Ltd, a subsidiary of the group, has a loan facility of US$1 017 562.50 (Original limit of US$1 206 000) from
Barclays Bank Zambia PLC. Interest on the loan is 2% above 12 month Libor rate per annum, payable monthly in arrears. The
principle is repayable in 32 equal monthly instalments commencing May 2008

The above loans from Barclays Bank Zambia PLC are secured by:

i) Legal mortgage over the Farm No. 4906, Sinazongwe, Choma, registered to cover US$6 200 000; and

ii) Floating debenture over all other assets of the company, registered to cover US$5 500 000 ranking pari passu with
Citibank, Zambia National Commercial Bank and DEG;

(b) DEG Term loan
The company has a loan facility of US$5 000 000 from DEG. Interest on the loan is 2.75% above the six-month USD Libor
rate per annum payable six-monthly in arrears. The principal is repayable in 12 equal bi-annaul instalments commencing April
2009.

The DEG loan is secured by a floating charge/debenture of US$5 000 000 ranking pari passu with Citibank, Barclays Bank
and Zambia National Commercial Bank.

75
Financial and Shareholder Information
Notes to the Financial Statements [continued]

(c) Standard Chartered Bank Zambia PLC

• Nanga Farms PLC, a subsidiary of the group, has a loan facility of US$4 375 000 (Original limit of US$4 375 000)
from Standard Chartered Bank Zambia PLC. Interest on the loan is 2% above 3 month Libor rate per annum, payable
quarterly in arrears. The principle is repayable in seven equal semi-annual installments commencing October 2008.

• Nanga Farms PLC, a subsidiary of the group, has a loan facility of US$1 628 000 (Original limit of US$1 628
000) from Standard Chartered Bank Zambia PLC. Interest on the loan is 2% above 3 month Libor rate per annum, payable
monthly in arrears. The principle is repayable in ten equal semi-annual installments commencing December 2008.

All debt facilities from Standard Chartered Bank Zambia PLC for Nanga Farms PLC are secured by:

i) First Fixed Legal Mortgage over S/D ‘A’ of F123a, R/E of F122a, R/E of F121a and R/E of F603, registered to cover
US$7 600 000;
ii) Fixed & Floating Debenture over farm equipment, registered to cover US$7 600 000;
iii) Assignment of receivables from Zambia Sugar PLC, registered to cover US$7 600 000;
iv) Fixed charge over Debt Service Account & Collection Account, registered to cover US$5 000 000; and
v) Agricultural Charge, registered to cover US$7 600 000.

21. Obligations Under Finance Leases

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

ALS Capital Limited (note (a)) 2 122 2 739 - -
Freddy Hirsh Limited (note (b)) 265 1 073 - -
Freddy Hirsh Limited (note (c)) 609 - - -
Freddy Hirsh Limited (note (d)) 84 - - -
3 080 3 812 - -
Less: payable within 12 months (2 436) (2 123) - -
Repayable after 12 months 644 1 689 - -

(a) This finance lease relates to abattoir in Livingstone of a subsidiary company with lease terms of 3 years. The subsid-
iary has options to purchase the equipment for a nominal amount at the conclusion of the lease agreements. The subsidiary’s
obligations under finance leases are secured by the lessors’ title to the leased assets.

Finance lease liabilities Minimum lease

2008
K Million
No later than 1 year 1 577
Later than 1 year and not later than 5 years 788
Less: future finance charges (243)
2 122

76
 Financial and Shareholder Information
Notes to the Financial Statements [continued]

(b) The company has a hire purchase facility of EUR320 982 with Freddy Hirsh Zambia Limited. The interest on the
hire purchase is 4.2 fixed per annum. The interest and principal is repayable in 24 equal monthly instalments commencing
December 2006.

Finance lease liabilities Minimum lease

2008
K Million
No later than 1 year 215
Later than 1 year and not later than 5 years -
Less: future finance charges (1)
214

(c) The group subsidiary, Masterpork, has a hire purchase facility of EUR121 969 and US$311 503 with Freddy Hirsh
Zambia Ltd. The interest on the hire purchase is 4% fixed per annum for the Euro facility and 6% fixed per annum for the
US$ facility. The interest and principle on the Euro hire purchase facility was repayable in 24 equal monthly installments
commencing September 2006. The interest and principle on the US$ hire purchase facility was repayable in 24 equal
monthly installments commencing June 2007.

Finance lease liabilities Minimum lease

2008
K Million
No later than 1 year 626
Later than 1 year and not later than 5 years -
Less: future finance charges (17)
609

(d) The Group’s operations in West Africa has a hire purchase facility of ZAR339 584 with Freddy Hirsch South
Africa Ltd. The interest rate on the hire purchase is 16% fixed per annum. The interest and principle is repayable in 24 equal
monthly installments commencing in December 2008.

Finance lease liabilities Minimum lease

2008
K Million
No later than 1 year 66
Later than 1 year and not later than 5 years 69
Less: future finance charges (24)
111

77
Financial and Shareholder Information
Notes to the Financial Statements [continued]
22. Deferred Liability
Under the terms of employment, employees are entitled to certain terminal benefits. Provision has been made during
the year towards these benefits. This statutory entitlement, which is lost if the employee is summarily dismissed, be-
comes payable only when the employee retires after attending the age of 55 years and that employee has been employed
for more than ten years. Uncertainty exists over the amount of future outflows due to staff turnover levels.

Group Company

K Million K Million
At 1 October 2007 3 960 588
Provision made during the year 553 24
Payments made during the year (13) (11)
At 30 September 2008 4 500 601

23. Trade and Other Payables

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Trade creditors 47 318 18 218 15 397 5 363
Provisions and accruals 41 695 2 993 5 956 3 399
89 013 21 211 21 353 8 762

24. Amounts Due to Relate Companies

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Zamleather Limited - - - 1 396
Master Meat Limited Nigeria - - - 13
Amagrain 38 - 38 -
Inbond Zambia 4 - 4 -
Zamanita Limited - 8 797 -
Zambezi Ranching and Cropping - 456 - 456
Tractorzam - - - 35
Master Pork Limited - 724 -
42 1 180 8 839 1 900

78
 Financial and Shareholder Information
Notes to the Financial Statements [continued]

25. Financial instruments

Financial assets
The group’s principal financial assets are bank balances and cash and trade debtors. The group maintains its bank accounts
with major banks in Zambia of high credit standing. Trade debtors are stated at their nominal value reduced by appropriate
allowances for estimated irrecoverable amounts.
Financial liabilities
The group’s financial liabilities are long term loans and trade creditors. Financial liabilities are classified according to the
substance of the contractual arrangements entered into. Trade creditors and loans are stated at their nominal value.

(a) Price risk

(i) Currency risk

The interest bearing borrowings are denominated in foreign currencies and therefore lead to a risk of fluctuation of value
due to changes in the foreign exchange rate. This risk is hedged by holding United States Dollar bank balances and Dollar
denominated exports.

(ii) Interest rate risk

Financial assets are not exposed to the risk that their value will fluctuate due to changes in market interest rates. Details of
the interest rates and maturity of interest bearing borrowings are disclosed in note 17, 20 and 21.

(iii) Market risk

The group is not exposed to the risk of the value of its financial assets fluctuating as a result of changes in market prices.

(b) Credit risk

(i) Trade debtors

The directors believe the credit risk of trade debtors is low.The credit risk is managed by the selective granting of credit and
credit limits.

(c) Liquidity risk

The group is not believed to be exposed to significant liquidity risk being inability to sell financial assets quickly at close to
their fair value.

(d) Cash flow risk

The company is not exposed to the risk that future cash flows associated with monetary financial instruments will fluctuate
in amount. It has no instruments that include a floating interest rate.

26. Contingent Liability

Certain legal cases are pending against the company in the Court of Law. In the opinion of the directors, and the company’s
lawyers, none of these cases will result in any material loss to the company for which a provision is required.

27. Capital Commitments

2008 2007

K Million K Million
Capital commitments entered into at the balance sheet date 3 495 5 005
Not contracted for at the balance sheet date 56 623 684

79
Financial and Shareholder Information
Notes to the Financial Statements [continued]

28. Operating Leases

The total value of future minimum annual lease payments under non-cancellable operating leases is as follows:

Group Company

2008 2007 2008 2007

K Million K Million K Million K Million

Within one year 139 106 - -
One to five year 107 15 - -

The company’s subsidiary company, Zambeef Retailing Limited, has operating leases for its butcheries that are for 12
month periods and renewable at the request of either party. There are no purchase options, contingent rent payments or
restrictions arising on these leases.

29. Related Party Transactions

(a) The group made the following sales to these related parties:

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Sales to related parties:
Zambezi Ranching and Cropping Limited 2 017 1 959 2 017 1 959
Kanyanja Development Company Limited 361 173 361 173
Leopard Investment Limited 302 19 280 3
Amagrain Limited 880 - - -
Tractorzam Limited 3 4 - 4
Proflight Commuter Services Limited 4 2 - -
3 567 2 157 2 658 2 139

(b) The group made the following purchases from these related parties:

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Purchases from related parties:
Madison General Insurance Zambia Limited 513 256 - -
Amagrain Limited 16 589 15 956 787 154
Inbond Zambia Limited 1322 926 396 -
Zambezi Ranching and Cropping 6 953 4 794 6 941 4 782
Kanyanja Development Company Limited 504 63 505 62
Leopard Investments 2 685 2 665 99 221
Tractorzam 3 218 538 3 029 350
Proflight Commuter Services Ltd 6 3 - -
31 790 25 201 11 757 5 570

80
 Financial and Shareholder Information
Notes to the Financial Statements [continued]
(c) Sales of goods to related parties were made at the company’s usual list prices.

(d) Purchases were made at market price.

(e) The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.

(f) No expense has been recognised in the year for bad or doubtful debts in respect of the amounts owed
by related parties.

(g) Key management compensation

Group Company
2008 2007 2008 2007

K Million K Million K Million K Million

Salaries and employee benefits 8 831 2 687 4 806 2 687

The remuneration of directors and key executives is determined by the remuneration committee having regard to the
performance of individuals and market trends.

(h) There were no loans to related parties and key management personnel.

30. Events Subsequent to Balance Sheet Date

There has not arisen since the end of the year any item, transaction or event of a material and unusual nature likely, in the
opinion of the directors of the company and the group, to affect substantially the operations of the company and the group,
the results of those operations or the state of affairs of the company and the group in the subsequent financial years.

81
Financial and Shareholder Information
Notes of the Annual General Meeting
Notice is hereby given that the 14th Annual General Meeting of Zambeef Products PLC will take place at the Taj Pamodzi
Hotel, along Addis Ababa Drive, Lusaka, on Tuesday December 23, 2008 at 10:00 hours.

AGENDA
1. To read the Notice of the Meeting and confirm that a quorum is present.

2. To read and confirm the minutes of the 13th Annual General Meeting held on December 21, 2007.

3. Consider any matters arising from the minutes.

4. To receive the report of the Directors, the Auditors report and the Financial Statements for the year ended
September 30, 2008. (Resolution 1)

5. To re-appoint Grant Thornton as Auditors for 2008/9 and authorise the Directors to fix their remuneration.
(Resolution 2)

6. To elect Directors to fill any vacancies and confirm the appointment of the following Directors: Aubrey Chibumba,
Nick Wilkinson and Philip Diedericks. (Resolution 3)

7. In terms of the articles, John Rabb and Hillary Duckworth retire but are eligible to offer themselves for re-election.
(Resolution 4)

8. To approve the increase of the authorised Ordinary Shares from 200,000,000 to 400,000,000 and to authorise the
Board of Directors to issue new shares up to this level. (Resolution 5)

9. To approve the issuance of new shares equivalent to US$120m in order to undertake the company’s Capital
Raising Programme. (Resolution 6)

10. To authorise the Directors to make decisions on the utilisation of the proceeds of the Capital Raising Programme
for the acquisition of new assets. (Resolution 7)

11. To approve the allocation of 1,500,000 (one million five hundred thousand) new ordinary shares for Senior
Management Share Option Plan II. (Resolution 8)

12. To approve the registration of all new ordinary shares issued with the Securities Exchange Commission and to
have these new issued ordinary shares listed on the Lusaka Stock Exchange ranking pari passu with the existing issued
ordinary shares. (Resolution 9)

13. To approve the final dividend of K72.46 per share for all shareholders registered at the close of business on 22
December 2008. If approved, the dividends will be paid on or before 31 January 2009. (Resolution 10)

14. Consider any competent business of which due notice has been given.

By order of the Board, D Museteka, Company Secretary

Note:
A Member is entitled to appoint one or more proxies to attend, speak and vote in his or her stead. A proxy need to be a
member of the company. Proxies must be lodged at the registered office of the company at least 48 hours before the time
fixed for the meeting.

Appendix 1
 PROXY FORM
ZAMBEEF PRODUCTS PLC
Proxy Form
I/We,
of
being a member/s of and the registered holder/s of ....................................................... shares in the above named company,
hereby appoint:
of or, in his/her absence, the Chairman of the Company
As my/our proxy to vote for me/us on my/our behalf at the Annual/Extraordinary General Meeting of the Company to
be held on the 23rd day of December 2008
And at any adjournment of that meeting.
* In Favour of/against * In favour * Against
Resolution 1
To receive, approve and adopt annual financial statements for the year ended 30 September
2008.
Resolution 2
Re-appointment of Grant Thornton as Auditors for 2008/9
Resolution 3
Confirm appointment of Mr Aubrey Chibumba, Mr Nick Wilkinson and Mr Philip Diedericks
as directors
Resolution 4
Re-election of directors who retire by rotation of:
• Mr John Rabb
• Mr Hilary Duckworth
Resolution 5
Approve the increase of the Authorised Ordinary Shares from 200 000 000 to 400 000 000
and to authorise the Board of Directors to issue new shares up to this new level.
Resolution 6
Approve the issuance of new shares equivalent to US$120m in order to undertake the
company’s Capital Raising Programme.
Resolution 7
Authorise the Directors to make decisions on the utilisation of the proceeds of the Capital
Raising Programme for the acquisition of new assets
Resolution 8
Approve the allocation of 1,500,000 new ordinary shares for Senior Management Share
Option Plan II
Resolution 9
To approve the registration of all new ordinary shares issued with the Securities Exchange
Commission and to have these new issued ordinary shares listed on the Lusaka Stock
Exchange ranking pari passu with the existing issued ordinary shares
Resolution 10
Approve the final dividend of K72.46 per share for all shareholders registered at the close
of business on 22 December 2008, and if approved, dividends will be paid on or before 31
January 2009
Unless otherwise instructed, the proxy will vote as he/she thinks fit

Signed:
Name:
Date:

Witnessed by: Signature:

Name:
Address:

Appendix 2
Financial and Shareholder Information
Notes to the Proxy Form
1. A shareholder may insert the name of a proxy or the names of two alternative proxies of his/her choice in the
space provided, with or without deleting “the chairman of the general meeting”. The person whose name stands
first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to
the exclusion of those whose names follow. Any such proxy, who need not be a shareholder of the company,
is entitled to attend, speak and vote on behalf of the shareholder.

2. A proxy is entitled to one vote on a show of hands and, on a poll, one vote for each share held.
A shareholder’s instructions to the proxy must be indicated in the appropriate spaces.

3. If a shareholder does not indicate on this instrument that the proxy is to vote in favour of or against any
resolution or to abstain from voting or gives contradictory instructions, or should any further resolution/s or
any amendment/s which may be properly put before the annual general meeting be proposed, the proxy shall
be entitled to vote as he/she thinks fit.

4. This form of proxy must be received by the company secretary at the registered head office, Plot Number
1164, House Number 1, Nkanchibaya Road, off Addis Ababa Drive, Rhodes Park, Lusaka, by no later than 09:30
on Friday, 19th December, 2008.

5. Documentary evidence establishing the authority of the person signing the proxy in representative capacity must
be attached hereto unless previously recorded by the company’s transfer secretaries.

6. The completion and lodging of this form of proxy will not preclude a shareholder from attending the annual
general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms of
this proxy form.

7. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.

8. The chairman of the meeting may accept or reject any form of proxy, which is completed and/or received other
than in accordance with these notes.

Appendix 2
Notes
Notes