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Zambeef Products Plc LSE:ZAM London Ordinary Share ZM0000000201 ORD ZMW0.01
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Zambeef Products PLC Interim Results

17/06/2020 7:00am

UK Regulatory (RNS & others)


Zambeef Products (LSE:ZAM)
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From Jun 2020 to Aug 2020

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TIDMZAM

RNS Number : 1644Q

Zambeef Products PLC

17 June 2020

17 June 2020

Zambeef Products plc

("Zambeef" or the "Group")

Interim res ults for the Half Year Ended 31 March 2020

Zambeef (AIM: ZAM), the integrated cold chain foods and retail business with operations in Zambia, Nigeria and Ghana, today announces its unaudited interim results for the six months ended 31 March 2020.

Financial Highlights

 
                               31-Mar-20    31-Mar-19      %      31-Mar-20   31-Mar-19      % 
                               ZMW'000s     ZMW'000s              USD'000s    USD'000s 
                             ------------  ----------            ----------  ---------- 
 Revenue                       1,797,633    1,416,490   26.91%     129,233     118,833     8.75% 
 Cost of sales                (1,168,504)   (945,920)   24.82%     (83,472)    (78,036)    6.97% 
 Gross profit                   626,129      470,570    33.06%      45,013      39,477    14.02% 
 Administrative expenses       (500,630)    (459,193)    8.97%     (36,029)    (38,582)    6.62% 
 Operating profit               125,499      11,377      1003%      9,022        954      845.70% 
 Share of loss equity 
  accounted investment          (1,898)      (1,819)     4.3%       (136)       (153)     -11.1% 
 Exchange losses               (62,870)      (3,347)     1778%     (4,520)      (281)      1509% 
 Finance costs                 (48,241)     (36,367)    32.65%     (3,468)     (3,051)    13.67% 
 Profit before taxation         12,490      (30,156)    141.42%      898       (2,531)    135.48% 
 Taxation charge                 (927)       (1,633)    -43.23%      (67)       (137)     51.09% 
 Group income/(loss) 
  for the year from 
  continuing operations         11,563      (31,789)    136.37%      831       (2,668)    131.15% 
 (Loss)/profit from 
  discontinued operations       (9,423)         -                   (677)         - 
 Group income for 
  the year                       2,140      (31,789)    106.73%      154       (2,668)    105.77% 
 
 EBITDA                         192,088      70,104      174%      13,809       5,881     134.81% 
                             ------------  ----------  --------  ----------  ----------  -------- 
 Gross Profit Margin            34.83%       33.22%                34.83%      33.22% 
 EBITDA Margin                  10.67%        4.95%                10.67%       4.95% 
 Debt/Equity (Gearing)          27.24%       28.04%                27.24%      28.04% 
 Debt-To-EBITDA                  5.22         12.36                 4.02        12.08 
                             ------------  ----------  --------  ----------  ----------  -------- 
 
 

PERFORMANCE OVERVIEW

The half-year period ended 31st March 2020 (HY 2020) saw Zambeef post encouraging results in the context of a very challenging macroeconomic environment. During this period, the Zambian Kwacha weakened by 37%, resulting in short- to medium-term record inflation. The high inflation, coupled with a tight monetary policy, eroded the purchasing power of our customers. The challenges stemming from reduced electricity generation, on the back of a regional record drought, significantly increased operational costs which, in turn, impacted on margins as some divisions were unable to pass through the increases.

Despite the challenging economic environment and the uncertainty caused by the onset of the COVID-19 pandemic, consumer demand for Zambeef's products remained robust, and the trading performance in the period has been satisfactory.

Zambeef's chain of 237 retail outlets - both own-brand and within Shoprite supermarkets - remain at the heart of the business, with demand from customers driving supply. During the half-year period under review, the Group continued to invest in the roll-out of two macro stores and two retail outlets in strategic locations.

KEY FINANCIAL HIGHLIGHTS

Revenue and gross profit for the period was ZMW 1,798 million (USD 129.2 million) and ZMW 626 million (USD 45.0 million), which was up in Kwacha terms by 27% and 33% respectively, and in dollar terms by 9% and 14% respectively, from the previous half-year period.

Management's continued focus on cost control ensured administration expenses increased by only 9% (7% in US$ terms) from ZMW 459 million (US$38.6 million) in the previous period to ZMW 501 million (US$36 million) in the current period, in the context of 14% inflation during the period.

The Group achieved an operating profit of ZMW 125 million versus ZMW 11 million recorded in the previous half year period (USD 9 million vs USD 0.954 million), which represents a 1,003% increase in ZMW and an 846% increase in USD. This increase in profitability was driven by increased sales volumes in the Cropping and Stockfeed divisions and pricing and cost optimisation initiatives undertaken by management across our divisions.

Finance costs increased by 33% in ZMW and 14% in USD as a result of higher utilisation of working capital, rising ZMW interest rates and the depreciation of the Zambian Kwacha against the US Dollar, resulting in increasing interest on US Dollar facilities in Kwacha terms.

As a result, the Group managed to generate a profit of ZMW 2 million (USD 0.154 million) compared to a loss of ZMW 32 million (USD 2.7 million) in the previous half-year period.

Zambeef's management remains committed to focusing on its core divisions to generate cash flow that will be channelled towards deleveraging the Group.

Zambeef's management will continue to focus resources on the Group's profitable business divisions, whilst improving those divisions that need additional attention to ensure that all areas of the business contribute fully to Group profitability. In response to the current uncertainty of the COVID-19 situation, the Group is moving quickly to take appropriate actions to further manage costs and preserve balance sheet flexibility during this period. The conclusion of the sale of Sinazongwe farm in April 2020 was a key milestone whose proceeds will go towards reducing debt.

OUTLOOK

As previously announced, despite the uncertainty caused by the COVID-19 pandemic, the trading performance is expected to remain satisifactory for H2 2020 and, accordingly, for the year ending 30 September 2020, dollar revenue, EBITDA, EBIT and adjusted Profit Before Tax* are anticipated to be in line with market expectations.

* Adjusted Profit Before Tax is defined as excluding any realised or unrealised foreign exchange gains or losses and any losses or gains made from asset disposals.

Commenting on these results, Chairman Mr. Michael Mundashi said:

"The Zambian economy was under significant fiscal pressure during the period, which, combined with the shock of the COVID-19 pandemic on the global economy, led to reduced demand for copper and a sharp depreciation in the Kwacha. The subsequent inflationary impact resulted in a significant drop in our customers' disposable income.

"Despite the challenging economic environment and the uncertainty caused by the COVID-19 pandemic, consumer demand for Zambeef's products remained robust and the trading performance in the period was satisfactory.

"The Group continued with its long term strategy to invest in the roll-out of macro stores and retail outlets in strategic locations. The Group's strategic partnership with Shoprite has been essential as we continue to observe growth through the Shoprite butcheries.

"Looking ahead, the macro-economic climate is expected to remain challenging for the rest of the financial year, characterised by a volatile Kwacha, continued electricity supply constraints and a potentially crippling COVID-19 pandemic. Despite this, the Group still expects to report Full Year results for the year ending 30 September 2020 in line with current market expectations."

 
 For further information, please visit www.zambeefplc.com or 
  contact: 
 
 Zambeef Products plc                           Tel: +260 (0) 211 
                                                 369003 
 Walter Roodt, Chief Executive Officer 
  Faith Mukutu, Chief Financial Officer 
 
 Strand Hanson Limited (Nominated & Financial   Tel: +44 (0) 20 7409 
  Adviser)                                       3494 
 James Spinney 
 Ritchie Balmer 
 Rob Patrick 
 
 FinnCap (Broker)                               Tel: +44 (0) 20 7220 
                                                 0500 
 Chris Raggett 
 Powerscourt (Financial PR)                     Tel: +44 (0)20 7250 
                                                 1446 
 Nick Dibden 
 Bethany Johannsen 
 

About Zambeef Products PLC

Zambeef Products PLC is the largest integrated cold chain food products and agribusiness in Zambia and one of the largest in the region, involved in the production, processing, distribution and retailing of beef, chicken, pork, dairy, eggs, fish, flour and stockfeed throughout Zambia and the surrounding regions, as well as Nigeria and Ghana. The Group also has large cereal row cropping operations (principally maize, soya beans and wheat), with approximately 7,973 hectares of row crops under irrigation, which are planted twice a year and a further 8,776 hectares of rain-fed crops available for planting each year.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CHAIRMAN'S REPORT

It is my pleasure to present to you the Chairman's Report for the six months ended 31 March, 2020.

Despite the challenging economic environment and the uncertainty caused by the COVID-19 pandemic, consumer demand for Zambeef's products in-country stood up well, and trading performance in the period has been satisfactory.,The Group generated a profit after tax of ZMW 2 million (USD 0.1 million), compared to a loss of ZMW 32 million (USD 2.7 million) in the previous period. This achievement, in the face of economic and market difficulties, illustrates the Group's fundamental strengths as a diversified and vertically integrated business.

The Board remains committed to achieving the Group's strategic priorities, despite fundamental changes in the operating environment. The Group will continue to focus on organically growing the core business that generates sustainable and strong cashflows, particularly our Retail and Cold Chain Food Products (CCFP) and Stockfeed divisions.

I am pleased to report that the successful divestment of Sinazongwe Farm to Chenguang Biotech (Zambia) Agri-Dev Limited for a total consideration of USD 10 million was finalised in April 2020. The net sale proceeds will largely be used to pay down the Group's debt and reduce interest costs. The disposal demonstrates the Group's strategy to focus on its core business of producing and retailing CCFP and stockfeed.

The Economic Environment

The Zambian economy has been under significant fiscal pressure during the period, which, combined with the shock of the COVID-19 pandemic on the global economy, has led to reduced demand for copper and a sharp depreciation in the Kwacha. The subsequent inflationary impact has resulted in a significant drop in our customers' disposable income and has continued to put pressure on the share of wallet going towards food spend.

Zambia is currently battling an electricity generation crisis, with load shedding hours having worsened in the period from October 2019 to January 2020. The Kwacha to Dollar exchange rate depreciation has resulted in significant price increases, especially on imported goods, which in turn saw inflation leap to 14% in March 2020 from 11% at the beginning of October 2019.

Trading Results

In the face of these macroeconomic challenges, management took proactive mitigation steps for both the short and longer-term, underpinned by continued focus on key strategic initiatives. Therefore, the Group's results are very encouraging as the Group posted a profit after tax (from continued operations) of ZMW 11.6 million (USD 0.8 million) compared to a loss of ZMW 32 million (USD 2.7 million) over the same period last year. The increased profitability was mainly driven by cropping, following improved yields in the summer crop, and increased volumes and margins in the Stockfeed division.

During the period, the Group recorded an underlying EBITDA growth of 173%, supported by top-line growth and cost optimisation.

Net debt at the end of the period was ZMW 1,002 million (USD 55.5million), compared with ZMW 886 million (USD 67.1 million) for the same period last year. This was before any repayment of debt from the proceeds of the sale of Sinazongwe farm. Despite making strides towards the repayment of USD debt, the devaluation of the local currency resulted in a translational increase in the Kwacha debt. Our focus continues to be on reducing the Group's indebtedness, with dollar debt being the priority.

Retail and Cold Chain Food Products

Zambeef's chain of 237 retail outlets - both own-brand (166) and within Shoprite supermarkets (71) - remain at the heart of the business, with demand from customers driving supply. During the half-year period under review, the Group continued to invest in the roll-out of two macro stores and two retail outlets in strategic locations. The Group's strategic partnership with Shoprite has been essential as we continue to observe growth through the Shoprite butcheries. Revenue in Retail and Cold Chain Food Products grew 15% against the prior half-year period. Cost pressures, mainly from increased depreciation and dollar-denominated fleet maintenance costs, resulted in operating profit performance being largely in line with the prior half-year period.

Cropping

Cropping revenue increased by 71% due to improved maize and wheat volumes, coupled with better pricing obtained on maize sales. Difficulties arising from the constrained electricity supply and Kwacha depreciation-related inflation put pressure on costs while having the opposite effect on revenue.

Stockfeed

The Stockfeed operations posted strong volume growth of 19% in the half-year period. This, coupled with strong revenue realisation, ensured healthy top-line growth. Despite the challenges around load shedding and the drought impacting margins, gross profit grew 58% compared to the prior half-year due to improved manufacturing capacity utilisation and cost management.

Outlook

The macro-economic climate is expected to remain challenging for the rest of Zambeef's financial year, characterised by a volatile Kwacha, continued electricity supply constraints and a potentially crippling COVID-19 pandemic. Despite this, the Group still expects to report Full Year results for the year ending 30 September 2020 in line with current market expectations.

The pandemic has changed the way we work and the way we interact with our customers in the marketplace. Exports into some of our key markets have slowed as many countries impose strict movement lockdowns. The pandemic presents an unprecedented challenge for all of us, yet the fundamental strengths of our company remain unchanged. The health and safety of our employees is our priority and we are doing our part to help the communities we operate in.

In response to the current uncertainty of the COVID-19 pandemic, the Group is moving quickly to take appropriate actions to manage costs further and preserve balance sheet flexibility.

I would like to express my utmost appreciation to our management and staff for their dedicated efforts to feed the nation during this challenging period.

Michael Mundashi

Chairman

16 June 2020

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CHIEF EXECUTIVE OFFICER'S REVIEW

Overview

The half-year period ended 31st March 2020 (HY 2020) saw Zambeef post encouraging results in the context of a very challenging macroeconomic environment. During this period, the Zambian Kwacha weakened by 37%, resulting in short to medium term record inflation. The high inflation coupled with a tight monetary policy eroded the purchasing power of our customers. The challenges stemming from reduced electricity generation, on the back of a regional record drought, significantly increased operational costs that eroded margins and some of our divisions were unable to pass on the increases to our customers.

Our revenue for the period was ZMW 1,798 million (USD 129.2 million), and we achieved a gross profit of ZMW 626 million (USD 45.0 million), which was up in Kwacha terms by 27% and 33%, and in dollar terms by 9% and 14% respectively from the previous half-year period. The growth in both metrics was driven by the performance of the Stockfeed and Cropping divisions.

Despite the challenges in the operating environment, Zambeef recorded an operating profit from continuing operations of ZMW 125 million (USD 9.0 million) and a profit after tax of ZMW 11.6 million (USD 0.8 million) compared to a ZMW 11.4 million (USD 0.95 million) and a ZMW 31.8 million (USD 2.7 million) loss respectively in the previous half-year period.

The performance achieved was encouraging, considering the adverse trading conditions, and is attributable to the strong Zambeef brands, a wide-ranging retail footprint, market penetration and a vertical and diversified product offering. In addition, swift actions from the management team resulted in mitigating some of the aforementioned challenges. Management will continue driving efficiencies to enable sustained top-line growth while looking for opportunities to optimise costs. Our consistent commitment to achieving our long-term strategic objectives through the years has allowed the Group to maintain market share and grow, despite a volatile economic environment.

Strategic focus

Zambeef's strategic focus on the roll-out of macro and retail stores across Zambia has continued to contribute to revenue growth. The proceeds from the sale of the Sinazongwe Farm will enable us to accelerate the pay down on our debt as we continue with the deleveraging strategy and focusing on our core businesses.

Retail and Cold Chain Food Products (CCFP)

The disposable income of our customers was constrained during the period, driven by high inflation which resulted in a subdued performance in some of our product lines. Despite this, the Group continued to grow revenue and volumes in its Retailing and Cold Chain Food Production division from the prior half-year period. However, margins have come under pressure because of higher production input costs that we were unable to fully pass on to our customers.

Stockfeed

The Stockfeed division performed exceptionally well during the period. Stockfeed sales volumes grew by 19% to 117,313 tonnes (HY 2019: 98,847 tonnes). Revenue growth of 56% was recorded on the back of volume growth and pricing. Management focus on cost control ensured operating profit growth of 160% above HY 2019 in Kwacha terms, despite the period being characterized by higher fuel and electricity costs.

Cropping

Cropping revenue increased 71% on the back of increased sales volumes of maize and wheat following the carryover stocks from the previous season. The drop in the average price of soya beans by 9% in Dollar terms was offset by the translational effect of the depreciation of the Kwacha. Increased load shedding and the cost of inputs was shielded by the dollar-denominated revenue increase.

Outlook

We anticipate the macro-economic climate to remain challenging but more stable in the second half of the financial year. The accelerated depreciation of the Kwacha appears to be behind us for now and the Kwacha seems to have stabilised. We anticipate that Zambia will acclimate to living with COVID-19 and resuming life under a new normal. However, the impacts of the pandemic still pose a significant risk to the business.

Moderate revenue growth is expected across most of our product lines due to a slowdown in the economy, supported by anticipated good yields from the winter crops. However, the full effects of an inflationary second quarter will be felt in the next half year. Consequently, we expect to see more pressure on our margins with minimal passing on of cost increases as consumer spending power erodes further.

As such, and despite expected satisfactory revenue, EBITDA and EBIT performance (all of which are currently in line with market expectations for the full year) and the Group's profit before tax for the full year (when factoring in foreign exchange effects) is expected to be negatively impacted.

Our Dollar debt is expected to reduce after applying the proceeds of the sale of the Sinazongwe Farm. However, we expect to end the year with a higher Kwacha debt balance due to the effects of its continued depreciation. This will be due to the increased interest costs on dollar debt in Kwacha terms, although we expect to continue paying down the debt.

I am confident that management will respond to these challenges and continue steering the business towards sustaining this performance over the second half of the year. We will continue our concerted efforts to protect our staff, customers and the general public from the effects of COVID-19. Health protocols have been rolled out in all of our workplaces and shops, and periodic compliance audits continue to be performed.

DIVISIONAL PERFORMANCE

Table 1 (ZMW) and Table 2 (USD) below provide a summary of the consolidated performance of the key business divisions reported at an operating profit level.

Table 1: Divisional financial summary in ZMW'000

 
 ZMW                    Revenue             Gross Profit             Overheads          Operating Profit 
                   2020        2019        2020       2019       2020        2019        2020       2019 
 Division         ZMW'000     ZMW'000     ZMW'000    ZMW'000    ZMW'000     ZMW'000     ZMW'000    ZMW'000 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Total 
 Retailing       1,138,678     975,606    120,170    105,971   (166,107)   (142,460)   (45,937)   (36,489) 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 CCFP              745,736     681,798    196,628    176,308   (104,790)    (93,495)     91,837     82,813 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Less Interco    (721,059)   (648,538) 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Combined 
 Retail &        1,163,355   1,008,866    316,798    282,279   (270,897)   (235,955)     45,900     46,324 
 CCFP 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Stock Feed        641,656     412,344    122,378     77,544    (60,753)    (53,873)     61,625     23,671 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Cropping          256,990     150,529    161,886     93,323    (85,151)    (80,593)     76,735     12,730 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Others            109,476      96,129     25,067     17,424    (11,634)    (13,305)     13,434      4,119 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Total           2,171,477   1,667,868    626,129    470,570   (428,435)   (383,726)    197,694     86,844 
==============  ==========  ==========  =========  =========  ==========  ==========  =========  ========= 
 Less: Intra/ 
                                        ---------  ---------  ----------  ----------  ---------  --------- 
 Inter Group     (373,844)   (251,378) 
                                        ---------  ---------  ----------  ----------  ---------  --------- 
 Sales 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Central 
                ----------  ----------  ---------  --------- 
 Overhead                                                       (72,195)    (75,467)   (72,195)   (75,467) 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Group Total     1,797,633   1,416,490    626,129    470,570   (500,630)   (459,193)    125,499     11,377 
--------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 

Table 2: Divisional financial summary in USD'000

 
 USD                   Revenue            Gross Profit            Overheads         Operating Profit 
                   2020       2019       2020       2019       2020       2019       2020       2019 
 Division         USD'000    USD'000    USD'000    USD'000    USD'000    USD'000    USD'000    USD'000 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Total 
 Retailing         81,861     81,846      8,640      8,890   (11,942)   (11,951)    (3,302)    (3,061) 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 CCFP              53,612     57,198     14,135     14,791    (7,533)    (7,844)      6,602      6,947 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Less Interco    (51,838)   (54,408) 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Combined 
 Retail &          83,635     84,636     22,775     23,681   (19,475)   (19,795)      3,300      3,886 
 CCFP 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Stock Feed        46,129     34,593      8,798      6,505    (4,368)    (4,520)      4,430      1,986 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Cropping          18,475     12,628     11,638      7,829    (6,122)    (6,761)      5,516      1,068 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Others             7,870      8,065      1,802      1,462      (836)    (1,116)        966        346 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Total            156,109    139,922     45,013     39,477   (30,801)   (32,192)     14,212      7,285 
==============  =========  =========  =========  =========  =========  =========  =========  ========= 
 Less: Intra/ 
                                      ---------  ---------  ---------  ---------  ---------  --------- 
 Inter Group     (26,876)   (21,089) 
                                      ---------  ---------  ---------  ---------  ---------  --------- 
 Sales 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Central 
                ---------  ---------  ---------  --------- 
 Overhead                                                     (5,190)    (6,331)    (5,190)    (6,331) 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 Group Total      129,233    118,833     45,013     39,477   (35,991)   (38,523)      9,022        954 
--------------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
 

DIVISIONAL REVIEW

Taking the performance of each of our key business areas in turn:

Retail and Cold Chain Food Products

Table 3 (ZMW) and Table 4 (USD) provide the key business area performances of the combined Retail and Cold Chain Food Products divisions.

Table 3: Retail and Cold Chain Food Products ZMW'000

 
 HY 2020                   Revenue             Gross Profit             Overheads          Operating Profit 
 Division             2020        2019        2020       2019       2020        2019        2020       2019 
                     ZMW'000     ZMW'000     ZMW'000    ZMW'000    ZMW'000     ZMW'000     ZMW'000    ZMW'000 
                   ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Retailing 
  Zambia            1,029,584     882,826     94,721     84,017   (143,720)   (124,304)   (48,999)   (40,287) 
-----------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Retailing 
  West Africa         109,094      92,780     25,449     21,954    (22,387)    (18,156)      3,062      3,798 
-----------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Total Retailing    1,138,678     975,606    120,170    105,971   (166,107)   (142,460)   (45,937)   (36,489) 
-----------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 CCFP                 745,736     681,798    196,628    176,308   (104,790)    (93,495)     91,837     82,813 
-----------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Less Interco       (721,059)   (648,538) 
-----------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 Combined Retail 
  & CCFP            1,163,355   1,008,866    316,798    282,279   (270,897)   (235,955)     45,900     46,324 
-----------------  ----------  ----------  ---------  ---------  ----------  ----------  ---------  --------- 
 

Table 3: Retail and Cold Chain Food Products USD'000

 
 HY 2020                  Revenue            Gross Profit            Overheads             Operating Profit 
 Division             2020       2019       2020       2019       2020       2019     2020 USD'000   2019 USD'000 
                     USD'000    USD'000    USD'000    USD'000    USD'000    USD'000 
                   ---------  ---------  ---------  ---------  ---------  ---------  -------------  ------------- 
 Retailing 
  Zambia              74,017     74,063      6,810      7,048   (10,333)   (10,428)        (3,522)        (3,380) 
-----------------  ---------  ---------  ---------  ---------  ---------  ---------  -------------  ------------- 
 Retailing 
  West Africa          7,843      7,783      1,830      1,842    (1,609)    (1,523)            220            319 
-----------------  ---------  ---------  ---------  ---------  ---------  ---------  -------------  ------------- 
 Total Retailing      81,860     81,846      8,639      8,890   (11,942)   (11,951)        (3,302)        (3,061) 
-----------------  ---------  ---------  ---------  ---------  ---------  ---------  -------------  ------------- 
 CCFP                 53,612     57,198     14,135     14,791    (7,533)    (7,844)          6,602          6,947 
-----------------  ---------  ---------  ---------  ---------  ---------  ---------  -------------  ------------- 
 Less Interco       (51,838)   (54,408)          -                     -                         - 
-----------------  ---------  ---------  ---------  ---------  ---------  ---------  -------------  ------------- 
 Combined Retail 
  & CCFP              83,634     84,636     22,775     23,681   (19,475)   (19,795)          3,300          3,886 
-----------------  ---------  ---------  ---------  ---------  ---------  ---------  -------------  ------------- 
 

We successfully rolled out two new macro outlets and two new retail outlets in strategic locations as part of our ongoing drive to optimise revenue and efficiencies across the Retail division.

Net sales in the combined Retail and Cold Chain Food Products (CCFP) divisions increased by 15% to ZMW 1,163 million (2019: ZMW 1,009 million) and decreased by 1% to USD 83.6 million (HY 2019: USD 84.6 million), the difference owing to the depreciation of the Kwacha. The gross profit margin decreased slightly by 75 basis points to 27% in Kwacha terms (HY 2019: 28%), with a 15% increase in overheads to ZMW 271 million (HY 2019: ZMW 236 million) or a 2% reduction in dollar terms to USD 19.5 million (HY 2019: USD 19.8 million).

The combined Retail and CCFP divisions generated a satisfactory 4% operating margin despite declining from the 2019 margin of 5%, owing to cost increases that could not be fully passed on to our customers through the retail network. The operating profit value in absolute terms decreased by 1% to ZMW 45.9 million (HY 2019: ZMW 46.3 million) in Kwacha terms and 15% in USD terms to 3.3 million (HY 2019: USD 3.9 million).

Zambia Retail

Zambia Retail revenue increased by 17% to ZMW 1,029 million (HY 2019: ZMW 883 million), whilst the gross profit increased by 13%. However, due to the depreciation in the Kwacha relative to the Dollar, revenue was flat at USD 81.9 million (HY 2019: USD 81.8 million).

West Africa Retail

Sales in West Africa (via the Nigeria and Ghana Shoprite concessions) increased by 18% to ZMW 109 million (HY 2019: ZMW 93 million). West African retail contribution to revenue increased by 9 basis points to 10.60%, from 10.51% last year. It has turned cash flow positive and marginally contributed to the operating profit in the division.

Beef

Beef is the largest contributor to revenue in the CCFP at 23% (HY 2019: 22%) of total revenue. Despite sales volumes increasing by a marginal 1%, revenues increased 8% owing to the favourable price of Beef and by-products. Gross profit increased by 34% on the back of an 8% revenue increase due to a reduction in input costs, particularly the buying price of Cattle. The price of maize bran remained relatively stable, only increasing by 9% against the prior half-year, especially in the context of Maize price increasing by 72%.

Poultry (ZamChick, ZamHatch and ZamEgg)

Revenue in the poultry business increased by 24% to ZMW 240 million (HY 2019: ZMW 193 million) and is the second-largest revenue contributor to the CCFP business. Gross profits decreased by 30% to ZMW 41 million (HY 2019: ZMW 59 million), mainly due to the higher input costs that could not be fully passed on to customers. In particular, stockfeed increased by 36%, which affected input costs. Overheads increased by an inflationary 14%, mainly impacted by higher energy and repair and maintenance costs.

Pork (Masterpork )

The Pork division saw a drop in sales volumes by 9%, mainly impacted by a decline in affordable Hungarian sausage sales. Revenue increased by 12%, translating to a 26% increase in gross profit of ZMW 24 million (HY2019: ZMW 19 million) due to pricing to recoup some lost margin due to cost increases.

Overhead costs increased by 36% compared to the prior year, mainly impacted by power outages causing increased machinery repair and maintenance costs and electricity tariffs

Milk (ZamMilk)

Milk revenue increased by 3% on the back of a 6% increase in average selling prices. The volumes of processed milk products reduced as the demand for fresh milk products soared, resulting in a net 3% reduction in sales volumes. Gross profit margin increased by 1,470 basis points owing to price and a favourable sales mix skewed towards the higher-margin products. Kalundu dairy saw an improvement in production efficiencies which also contributed to the increased margins.

Stockfeed (Novatek)

ZMW

 
      Revenue          Gross Profit           Overheads         Operating Profit 
------------------  ------------------  --------------------  ------------------- 
  2020      2019      2020      2019       2020       2019       2020      2019 
 ZMW'000   ZMW'000   ZMW'000   ZMW'000   ZMW'000    ZMW'000    ZMW'000    ZMW'000 
 641,656   412,344   122,378   77,544    (60,752)   (53,873)    61,624    23,671 
--------  --------  --------  --------  ---------  ---------  ---------  -------- 
 

USD

 
      Revenue          Gross Profit          Overheads        Operating Profit 
------------------  ------------------  ------------------  ------------------- 
  2020      2019      2020      2019      2020      2019       2020      2019 
 USD'000   USD'000   USD'000   USD'000   USD'000   USD'000   USD'000    USD'000 
 46,129    34,593     8,798     6,505    (4,368)   (4,520)    4,430      1,985 
--------  --------  --------  --------  --------  --------  ---------  -------- 
 

Revenue grew by 56% in Kwacha terms (33% in USD terms) due to volume and pricing, while the operating profit grew by a significant 160% to ZMW 62 million (HY 2019: ZMW 24 million) or 123% to USD 4.4 million (HY 2019: USD 2.0 million) in Dollar terms. The gross margin remained flat at 19.1% from 18.8% in the prior year. Increased raw material costs, due to a severe drought in the 2019 harvest season as well as running backup diesel generators for prolonged periods to generate electricity, impacted on the profit margin.

Overheads and efficiencies were key operational focus areas during the period and grew only by an inflationary 13% to ZMW 61 million (HY 2019: ZMW 54 million).

Cropping

ZMW

 
      Revenue          Gross Profit           Overheads         Operating Profit 
------------------  ------------------  --------------------  ------------------- 
  2020      2019      2020      2019       2020       2019       2020      2019 
 ZMW'000   ZMW'000   ZMW'000   ZMW'000   ZMW'000    ZMW'000    ZMW'000    ZMW'000 
 256,990   150,529   161,886   93,323    (85,151)   (80,593)    76,735    12,730 
--------  --------  --------  --------  ---------  ---------  ---------  -------- 
 

USD

 
      Revenue          Gross Profit          Overheads        Operating Profit 
------------------  ------------------  ------------------  ------------------- 
  2020      2019      2020      2019      2020      2019       2020      2019 
 USD'000   USD'000   USD'000   USD'000   USD'000   USD'000   USD'000    USD'000 
 18,475    12,628    11,638     7,829    (6,122)   (6,761)    5,517      1,068 
--------  --------  --------  --------  --------  --------  ---------  -------- 
 

Zambeef's cropping division provides a currency risk hedge against the depreciation of the Kwacha, due to the crops being traded and financed in USD terms. The division performed exceptionally well during the period.

Revenue increased 71% to ZMW 257 million (HY 2019: ZMW 151 million) or 46% to USD 18.5 million (HY 2019: USD 12.6 million), mainly due to increased maize and wheat sales volumes coupled with an increase in maize price. Gross profit increased 73% compared to the prior half-year, with only a 26% increase in the overheads due to increases in the cost of electricity and fuel.

Other businesses

ZMW

 
      Revenue          Gross Profit           Overheads         Operating Profit 
------------------  ------------------  --------------------  ------------------- 
  2020      2019      2020      2019       2020       2019       2020      2019 
 ZMW'000   ZMW'000   ZMW'000   ZMW'000   ZMW'000    ZMW'000    ZMW'000    ZMW'000 
 109,476   96,129    25,067    17,424    (11,634)   (13,305)    13,434     4,119 
--------  --------  --------  --------  ---------  ---------  ---------  -------- 
 

USD

 
      Revenue          Gross Profit          Overheads        Operating Profit 
------------------  ------------------  ------------------  ------------------- 
 USD'000   USD'000   USD'000   USD'000   USD'000   USD'000   USD'000    USD'000 
  2020      2019      2020      2019      2020      2019       2020      2019 
  7,870     8,065     1,802     1,462     (836)    (1,116)     966        346 
--------  --------  --------  --------  --------  --------  ---------  -------- 
 

Total revenue from the other business divisions increased by 14% to ZMW 109 million (HY 2019: ZMW 96 million) and decreased by 2% to USD 7.9 million (HY 2019: USD 8.1 million). The gross profit increased by 44% in Kwacha terms (23% in Dollar terms) and the operating profit increased by 226% in Kwacha terms (179% in Dollar terms).

Milling

The wheat and maize milling division had an exceptional performance, recording operating profit growth of 57% in Kwacha terms (40% in Dollar terms), due to the increases in the flour price and the volumes of maize milled. Overheads were also well managed, assisted by a reduction in repair and maintenance costs.

Zamleather

Zamleather recorded a significant improvement in the period as the turnaround strategy for the leather and shoe business began taking shape. Revenue increased by 29% (10% in Dollar terms), supported by an increase in shoe sales volumes. Gross profit increased 56% in Kwacha terms (34% in Dollar terms), helped by a swing in volume to higher-margin shoes and grade improvements resulting from higher selectivity of the hides processed into wet blue leather.

Walter Roodt

Chief Executive Officer

16 June 2020

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

REPORT OF THE DIRECTORS

In compliance with Section 275 of the Companies Act, the Directors submit their report on the activities of the Group for the six month period ended 31 March 2020.

   1.             Principal activities 

Zambeef Products PLC and its subsidiaries ("Group") is one of the largest agri-businesses in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed and flour. The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 Ha of irrigated row crops and 8,623 Ha of rain-fed/dry-land crops available for planting each year. The Group also has operations in West Africa in Nigeria and Ghana.

   2.             The Company 

The Company is incorporated and domiciled in Zambia.

Business address Postal address

Plot 4970, Manda Road Private Bag 17

Industrial Area Woodlands

Lusaka Lusaka

ZAMBIA ZAMBIA

   3.             Share capital 

Details of the Company's authorised and issued share capital are as follows:

 
                                        31 Mar 2020           30 Mar 2019 
                                   --------------------  -------------------- 
                                    ZMW'000s   USD'000s   ZMW'000s   USD'000s 
 Authorised 
 700,000,000 ordinary shares 
  of ZMW0.01 each                      7,000        938      7,000        938 
                                   =========  =========  =========  ========= 
 Issued and fully paid 
 Ordinary shares 
 300,579,630 ordinary shares 
  of ZMW0.01 each                      3,006        449      3,006        449 
 Preference shares - convertible 
  redeemable 
 100,057,658 of ZMW0.01 each           1,000        100      1,000        100 
                                   =========  =========  =========  ========= 
 
   4.             Results 

The Group's results are as follows:

                                                                                                    Unaudited                                                                             Audited 
 
                                  6 months   6 months    6 months   6 months 
                                        to         to          to         to     Year ended     Year ended 
                                  31 March   31 March    31 March   31 March   30 September   30 September 
                                      2020       2020        2019       2019           2019           2019 
 Group                            ZMW'000s   USD'000s    ZMW'000s   USD'000s       ZMW'000s       USD'000s 
 Revenue                         1,797,633    129,233   1,416,490    118,833      3,134,967        254,462 
 Profit/ (loss) 
  before taxation                   12,490        898    (30,156)    (2,531)         38,653          3,138 
 Taxation charge                     (927)       (67)     (1,633)      (137)        (2,780)          (226) 
 Loss from discontinued 
  operations                       (9,423)      (677)           -          -       (17,379)        (1,411) 
                          ----------------  ---------  ----------  ---------  -------------  ------------- 
 Group profit 
  /(loss) for 
  the period                         2,140        154    (31,789)    (2,668)         18,494          1,501 
                          ----------------  ---------  ----------  ---------  -------------  ------------- 
 
 Group profit 
  /(loss) attributable 
  to: 
 Equity holders 
  of the parent                      1,650        119    (32,379)    (2,717)         18,100          1,469 
 Non-controlling 
  interest                             490         35         590         49            394             32 
                          ----------------  ---------  ----------  ---------  -------------  ------------- 
                                     2,140        154    (31,789)    (2,668)         18,494          1,501 
                          ----------------  ---------  ----------  ---------  -------------  ------------- 
 
   5.             Dividends 

There was no dividend paid or proposed for the six month period ended 31 March 2020.

   6.             Management 

The Senior Management team comprise the following:

 
 Walter Roodt             Chief Executive Officer 
 Faith Mukutu             Chief Financial Officer 
                         --------------------------------------------------- 
 Mike Lovett              Chief Operating Officer 
                         --------------------------------------------------- 
 Danny Museteka           Company Secretary 
                         --------------------------------------------------- 
 Yusuf Koya               Group Head - Banking and Administration 
                         --------------------------------------------------- 
 Pravin Abraham           Chief Internal Auditor 
                         --------------------------------------------------- 
 Ebrahim Israel           General Manager - International Retailing 
                         --------------------------------------------------- 
 Murray Moore             General Manager - Beef and Dairy 
                         --------------------------------------------------- 
 Lewis Potgieter          General Manager - Sinazongwe Farm 
                         --------------------------------------------------- 
 Robert Hoskins           General Manager - Chiawa Farm 
  Davies 
                         --------------------------------------------------- 
 Francis Mondomona        General Manager - Huntley Farm 
                         --------------------------------------------------- 
 Richard Franklin         General Manager - Zamleather Limited 
                         --------------------------------------------------- 
 David Subakanya          General Manager - Zampalm Limited 
                         --------------------------------------------------- 
 Matthews Ngosa           General Manager - Zamchick Limited, Zamhatch 
                           Limited 
                         --------------------------------------------------- 
 Willem Abraham           General Manager - Dairy 
  Voster 
                         --------------------------------------------------- 
 Alun Maskell             General Manager - Masterpork Limited 
                         --------------------------------------------------- 
 Christiaan Engelbrecht   General Manager - Stock Feed 
                         --------------------------------------------------- 
 Theo de Lange            Group Technical Manager 
                         --------------------------------------------------- 
 Bartholomew Mbao         Dairy Processing Manager 
                         --------------------------------------------------- 
 Lenard Mwanamumbula      Piggery Manager 
                         --------------------------------------------------- 
 Johan Swanepoel          Flour Mill Manager 
                         --------------------------------------------------- 
 Charles Milupi           Poultry Manager 
                         --------------------------------------------------- 
 Ivor Chilufya            Group Financial Controller 
                         --------------------------------------------------- 
 Justin Rust              Commercial Manager 
                         --------------------------------------------------- 
 Basil Webber             Commercial Manager 
                         --------------------------------------------------- 
 Phillip Diedericks       Commercial Manager 
                         --------------------------------------------------- 
 Niyaas Dalal             Finance Manager - Zambeef Products Limited, 
                           Zam Chick Limited, Zamhatch Limited 
                         --------------------------------------------------- 
 Simon Nkhata             Finance Manager - Zambeef Retailing Limited, 
                           Masterpork Limited 
                         --------------------------------------------------- 
 Baron Chisola            Finance Manager - Zampalm Limited, Group Inventory 
                         --------------------------------------------------- 
 Billy Mudenda            Finance Manager - Zamleather Limited 
                         --------------------------------------------------- 
 Shadreck Banda           Financial Controller - Group Fixed Assets 
                         --------------------------------------------------- 
 Chizola Daka             Financial Controller - Group Creditors 
                         --------------------------------------------------- 
 Gbenga Ibitoye           Financial Controller - West Africa 
                         --------------------------------------------------- 
 Caroline Mulaga          Group Head - Debtors and Credit Control 
                         --------------------------------------------------- 
 Anthony Seno             Head of IT 
                         --------------------------------------------------- 
 Awren Mutaka             Head of Human Resources 
                         --------------------------------------------------- 
 Mathews Mbasela          Head of Payroll Processing 
                         --------------------------------------------------- 
 Eddie Tembo              Chief Security Manager 
                         --------------------------------------------------- 
 Jones Kayawe             Head of Environment, Health and Safety 
                         --------------------------------------------------- 
 Field Musongole          Maintenance Manager 
                         --------------------------------------------------- 
 Ernest Gondwe            Regional Manager - Shoprite & Excellent Meats 
                         --------------------------------------------------- 
 Francis Mulenga          Regional Manager - Shoprite 
                         --------------------------------------------------- 
 Noel Chola               Regional Manager - Shoprite 
                         --------------------------------------------------- 
 Rodgers Chinkuli         Regional Manager - Zambeef Outlets 
                         --------------------------------------------------- 
 Hillary Anderson         National Retail Manager - Shoprite 
                         --------------------------------------------------- 
 Lufeyo Nkhoma            General Manager - Master Meats Ghana 
                         --------------------------------------------------- 
 Clement Mulenga          General Manager - Master Meats Nigeria 
                         --------------------------------------------------- 
 
     7.             Directors and Secretary 

The directors in office during the financial period and at the date of this report were as follows:

 
 Michael Mundashi    Chairman 
 Dr. Jacob Mwanza    Chairman (Retired on 31 December 2019) 
                    --------------------------------------- 
 Dr. Lawrence S.     Non-executive director 
  Sikutwa 
                    --------------------------------------- 
 John Rabb           Non-executive director 
                    --------------------------------------- 
 Yollard Kachinda    Non-executive director 
                    --------------------------------------- 
 Prof. Enala Mwase   Non-executive director 
                    --------------------------------------- 
 David Osborne       Non-executive director 
                    --------------------------------------- 
 Margaret Mudenda    Non-executive director 
                    --------------------------------------- 
 Jonathan Kirby      Non-executive director 
                    --------------------------------------- 
 Frank Braeken       Non-executive director 
                    --------------------------------------- 
 Francis Grogan      Chief Executive Officer (Retired on 31 
                      December 2019) 
                    --------------------------------------- 
 Walter Roodt        Chief Executive Officer 
                    --------------------------------------- 
 Faith Mukutu        Executive Director 
                    --------------------------------------- 
 Danny Museteka      Company Secretary 
                    --------------------------------------- 
 
   8.             Directors' interests 

The directors held the following interests in the Company's ordinary shares at the reporting date:

 
                      31 March 2020                   30 September 2019 
      -----------------------------               ------------------------- 
                             Direct     Indirect      Direct     Indirect 
  Dr. Jacob Mwanza*               -            -   1,399,629            - 
  Francis Grogan*                 -            -     995,000    3,596,631 
  John Rabb                       -   14,000,000           -   14,000,000 
  Frank Braeken             375,000            -     375,000            - 
                            375,000   14,000,000   2,769,629   17,596,631 
                           ========  ===========  ==========  =========== 
 
 

*Retired on 31 December 2019

   9.             Directors' fees and remuneration 
 
                                         Housing                     Air Fares 
 ZMW'000             Salary     Bonus    Allowance   Car Allowance    Allowance   Medicals 
 NON-EXECUTIVE 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Jacob Mwanza         245,977     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Michael Mundashi     400,000     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Lawrence Sikutwa     153,736     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 John Rabb            184,483     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Yollard Kachinda     153,736     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Enala Mwasa          153,736     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Margaret Mudenda     184,483     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Jonathan Kirby       184,483     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Frank Braeken        153,736     -         -              -             -           - 
                   ----------  ------  -----------  --------------  -----------  --------- 
 EXECUTIVE 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Francis Grogan     1,665,955     -         -           Company          -          Yes 
                                                          Car 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Walter Roodt       1,725,657     -         -           Company          -          Yes 
                                                          Car 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Faith Mukutu       1,951,328     -         -           Company          -          Yes 
                                                          Car 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Mike Lovett        1,647,681     -        Yes          Company          -          Yes 
                                                          Car 
                   ----------  ------  -----------  --------------  -----------  --------- 
 Danny Museteka     1,508,697     -         -              -             -          Yes 
                   ----------  ------  -----------  --------------  -----------  --------- 
 

In addition to the above, all Executive Directors are also entitled to a gratuity of 10 per cent. of their gross basic salary paid over the two-year contract term, less statutory deductions for tax.

Further, the board co-opted Mr Hastings Mtine into the Audit Committee as an expert advisor. Mr Mtine's remuneration was ZMW11,588 in the period under review.

   10.           Significant Shareholdings 

As at 31 March 2020, the Company has been advised of the following notifiable interests in its ordinary share capital:

 
 Investor Name                        Current Position   % of Shareholding 
 CDC Group Plc                           52,601,435            17.5% 
                                     -----------------  ------------------ 
 M & G Investment Management             46,304,408            15.4% 
                                     -----------------  ------------------ 
 Africa Life                             42,413,679            14.1% 
                                     -----------------  ------------------ 
 National Pension Scheme Authority 
  (Zambia)                               24,797,819            8.3% 
                                     -----------------  ------------------ 
 Sussex Trust                            14,000,000            4.7% 
                                     -----------------  ------------------ 
 Eastspring Investments                  11,995,062            4.0% 
                                     -----------------  ------------------ 
 Artio Global Investors                  9,360,000             3.1% 
                                     -----------------  ------------------ 
 

CDC Group Plc are also the holders of 100,057,658 convertible redeemable preference shares. These shares have four voting rights for every five preference shares held resulting in CDC having 34.85% of the voting rights.

   11.           Employees 

The Group employed an average number of employees of 7,422 (30 September 2019 - 7,407; 31 March 2019 - 7,215) and total salaries and wages were ZMW242.4 million (USD17.4 million) for the six month period to 31 March 2020 (30 September 2019 - ZMW453.7 million [USD36.8 million], 31 March 2019 - ZMW237.6 million [USD19.9 million]).

The average number of persons employed by the Group in each month of the 6 month period is as follows:

 
 October 2019     7,380 
 November 2019    7,581 
                 ------ 
 December 2019    7,633 
                 ------ 
 January 2020     7,022 
                 ------ 
 February 2020    7,417 
                 ------ 
 March 2020       7,499 
                 ------ 
 
   12.           Safety, Health and Environmental issues 

As part of some of the Group's term loans, as well as the recent CDC Group PLC equity investment, the Group has signed up to an Environmental and Social Action Plan ("ESAP"), which requires the Group to meet both local Zambian standards as well as international standards relating to the environment.

The Group provides education and healthcare services to its employees. The Group also supports various community activities in the areas in which it operates.

   13.           Legal matters 

There are no significant or material legal or arbitration proceedings (including to the knowledge of the Directors, any such proceedings which are pending or threatened, by or against the Company or any subsidiary of the Group) which may have or have had during the 12 months immediately preceding the date of this document a significant or material effect on the financial position or profitability of the Company or any member of the Group.

   14.           Gifts and donations 

The Group made donations of ZMW1.2million (USD0.09 million), (30 September 2019 - ZMW2million [USD0.165 million], 31 March 2019 - ZMW1.2 million [USD0.10 million]) to a number of activities.

   15.           Export sales 

The Group made exports of ZMW43 million (USD3 million) during the period (30 September 2019 - ZMW46.5 million [USD3.8 million], 31 March 2019 - ZMW24 million [USD2 million]).

   16.           Property, plant and equipment 

Assets totalling ZMW57.9 million (USD4.2 million) were purchased by the Group during the period (30 September 2019 - ZMW113.8 million [USD9.2 million], 31 March 2019 - ZMW54.6 million [USD4.6 million]).

   17.           Interim report 

The interim report set out below has been approved by the Directors.

By order of the Board

Danny Museteka

Company Secretary

Date: 16 June 2020

The Directors

Zambeef Products PLC

Plot 4970, Manda Road

Industrial Area

Lusaka

Dear Sirs

INDEPENT REVIEW REPORT OF ZAMBEEF PRODUCTS PLC AND ITS

SUBSIDIARIES

Introduction

We have been instructed by the Directors of the Company to review the financial information set out on pages 15 to 52 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors. The Listing Rules of the Lusaka Stock Exchange and International Accounting Standard 34 require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual financial statements except where changes, and reasons for them, are disclosed.

Review of work performed

We conducted our review in accordance with guidance contained in the International Standards on Auditing. A review consists principally of making enquiry of Group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as test of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards on Auditing and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information.

Review conclusion

On basis of our review we are not aware of any material modifications that should be made to the consolidated financial information as presented for the six month period ended 31 March 2020.

Chartered Accountants

Christopher Mulenga (AUD/ F000178)

Name of Partner signing on behalf of the Firm

Lusaka

Date: 16 June 2020

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIODED 31 MARCH 2020

 
                                                     Unaudited                Audited 
                                             31 Mar 2020   31 Mar 2019   30 Sept 2019 
                                     -----  ------------  ------------  ------------- 
 Group                                Note      ZMW'000s      ZMW'000s       ZMW'000s 
                                     -----  ------------  ------------  ------------- 
 
 Revenue                              5(i)     1,797,633     1,416,490      3,134,967 
                                     -----  ------------  ------------  ------------- 
 Net loss arising from 
  price changes in fair 
  value of biological assets           9        (10,408)      (15,729)         10,284 
                                     -----  ------------  ------------  ------------- 
 Cost of sales                               (1,161,096)     (930,191)    (2,063,704) 
                                     -----  ------------  ------------  ------------- 
 Gross profit                         5(i)       626,129       470,570      1,081,547 
                                     -----  ------------  ------------  ------------- 
 Administrative expenses                       (501,168)     (459,899)      (920,771) 
                                     -----  ------------  ------------  ------------- 
 Other income                                        538           706            433 
                                     -----  ------------  ------------  ------------- 
 Operating profit                                125,499        11,377        161,209 
                                     -----  ------------  ------------  ------------- 
 Share of loss equity accounted 
  investment                                     (1,898)       (1,819)        (3,036) 
                                     -----  ------------  ------------  ------------- 
 Exchange losses on translating 
  foreign currency transactions 
  and balances                                  (62,870)       (3,347)       (36,730) 
                                     -----  ------------  ------------  ------------- 
 Finance costs                                  (48,241)      (36,367)       (82,790) 
                                     -----  ------------  ------------  ------------- 
 Profit/(loss) before taxation        5(i)        12,490      (30,156)         38,653 
                                     -----  ------------  ------------  ------------- 
 Taxation charge                      6(a)         (927)       (1,633)        (2,780) 
                                     -----  ------------  ------------  ------------- 
 Group profit/(loss) for 
  the period from continued 
  operations                                      11,563      (31,789)         35,873 
                                     -----  ------------  ------------  ------------- 
 Loss from discontinued 
  operations                           15        (9,423)             -       (17,379) 
                                     -----  ------------  ------------  ------------- 
 Total (loss)/profit for 
  the period                                       2,140      (31,789)         18,494 
                                     -----  ------------  ------------  ------------- 
 
 Group profit/(loss) attributable 
  to: 
                                     -----  ------------  ------------  ------------- 
 Equity holders of the 
  parent                                           1,650      (32,379)         18,100 
                                     -----  ------------  ------------  ------------- 
 Non-controlling interest                            490           590            394 
                                     -----  ------------  ------------  ------------- 
                                                   2,140      (31,789)         18,494 
                                     -----  ------------  ------------  ------------- 
 Other comprehensive income 
                                     -----  ------------  ------------  ------------- 
 Exchange gains on translating 
  presentational currency                        434,406        13,536        106,391 
                                     -----  ------------  ------------  ------------- 
 Remeasurement of net defined 
  benefit liability                                    -             -          8,829 
                                     -----  ------------  ------------  ------------- 
 Remeasurement of leases                            (12) 
                                     -----  ------------  ------------  ------------- 
 Total comprehensive income 
  for the period                                 436,534      (18,253)        133,714 
                                     -----  ------------  ------------  ------------- 
 
 Total comprehensive income/(loss) 
  for the period attributable 
  to: 
                                     -----  ------------  ------------  ------------- 
 Equity holders of the 
  parent                                         433,889      (21,759)        129,935 
                                     -----  ------------  ------------  ------------- 
 Non-controlling interest                          2,645         3,506          3,779 
                                     -----  ------------  ------------  ------------- 
                                                 436,534      (18,253)        133,714 
                                     -----  ------------  ------------  ------------- 
 
 Earnings per share                                Ngwee         Ngwee          Ngwee 
                                     -----  ------------  ------------  ------------- 
 Basic and diluted earnings 
  per share from continued 
  operations                           7            2.76        (7.78)           8.86 
                                     -----  ------------  ------------  ------------- 
 Basic and diluted earnings 
  per share from discontinued 
  operations                           7          (2.35)             -         (4.34) 
                                     -----  ------------  ------------  ------------- 
 Total                                 7            0.41        (7.78)           4.52 
                                     -----  ------------  ------------  ------------- 
 

The accompanying notes form part of the financial statements.

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTH PERIODED 31 MARCH 2020

 
                                                   Unaudited             Audited 
                                                31 Mar     31 Mar 
                                                  2020       2019   30 Sept 2019 
                                     ------  ---------  ---------  ------------- 
 Group                                Note    USD'000s   USD'000s       USD'000s 
                                     ------  ---------  ---------  ------------- 
 Revenue                              5(ii)    129,233    118,833        254,462 
                                     ------  ---------  ---------  ------------- 
 Net loss arising from price 
  changes in fair value of 
  biological assets                     9        (748)    (1,320)            835 
                                     ------  ---------  ---------  ------------- 
 Cost of sales                                (83,472)   (78,036)      (167,509) 
                                     ------  ---------  ---------  ------------- 
 Gross profit                         5(ii)     45,013     39,477         87,788 
                                     ------  ---------  ---------  ------------- 
 Administrative expenses                      (36,029)   (38,582)       (74,738) 
                                     ------  ---------  ---------  ------------- 
 Other income                                       38         59             35 
                                     ------  ---------  ---------  ------------- 
 Operating profit                                9,022        954         13,085 
                                     ------  ---------  ---------  ------------- 
 Share of loss equity accounted 
  investment                                     (136)      (153)          (246) 
                                     ------  ---------  ---------  ------------- 
 Exchange losses on translating 
  foreign currency transactions 
  and balances                                 (4,520)      (281)        (2,981) 
                                     ------  ---------  ---------  ------------- 
 Finance costs                                 (3,468)    (3,051)        (6,720) 
                                     ------  ---------  ---------  ------------- 
 Profit/(loss) before taxation        5(ii)        898    (2,531)          3,138 
                                     ------  ---------  ---------  ------------- 
 Taxation charge                      6(f)        (67)      (137)          (226) 
                                     ------  ---------  ---------  ------------- 
 Group profit/(loss) for 
  the period from continued 
  operations                                       831    (2,668)          2,912 
                                     ------  ---------  ---------  ------------- 
 Loss from discontinued operations     15        (677)          -        (1,411) 
                                     ------  ---------  ---------  ------------- 
 Total profit/(loss) for 
  the period                                       154    (2,668)          1,501 
                                     ------  ---------  ---------  ------------- 
 
 Group profit/(loss) attributable 
  to: 
                                     ------  ---------  ---------  ------------- 
 Equity holders of the parent                      119    (2,717)          1,469 
                                     ------  ---------  ---------  ------------- 
 Non-controlling interest                           35         49             32 
                                     ------  ---------  ---------  ------------- 
                                                   154    (2,668)          1,501 
                                     ------  ---------  ---------  ------------- 
 Other comprehensive income 
                                     ------  ---------  ---------  ------------- 
 Exchange (losses)/gains 
  on translating presentational 
  currency                                    (42,051)      2,208       (10,553) 
                                     ------  ---------  ---------  ------------- 
 Remeasurement of net defined 
  benefit liability                                  -          -            717 
                                     ------  ---------  ---------  ------------- 
 Remeasurement of leases                           (1)          -              - 
                                     ------  ---------  ---------  ------------- 
 Total comprehensive loss 
  for the period                              (41,898)      (460)        (8,335) 
                                     ------  ---------  ---------  ------------- 
 
 Total comprehensive income/(loss) 
  for the period attributable 
  to: 
                                     ------  ---------  ---------  ------------- 
 Equity holders of the parent                 (42,144)      (745)        (8,367) 
                                     ------  ---------  ---------  ------------- 
 Non-controlling interest                          246        285             32 
                                     ------  ---------  ---------  ------------- 
                                              (41,898)      (460)        (8,335) 
                                     ------  ---------  ---------  ------------- 
 
 
 Earnings per share                              Cents      Cents          Cents 
                                     ------  ---------  ---------  ------------- 
 Basic and diluted earnings 
  per share from continued 
  operations                            7         0.20     (0.65)           0.72 
                                     ------  ---------  ---------  ------------- 
 Basic and diluted earnings 
  per share from discontinued 
  operations                            7       (0.17)          -         (0.35) 
                                     ------  ---------  ---------  ------------- 
 Total                                  7         0.03     (0.65)           0.37 
                                     ------  ---------  ---------  ------------- 
 

The accompanying notes form part of the financial statements

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

FOR THE SIX MONTH PERIODED 31 MARCH 2020

 
                                                                                                                        Total 
                                                                                      Foreign                    attributable 
                                                    Preference                       exchange                       to owners 
                         Share           Share           share      Revaluation   translation         Retained         of the   Non-controlling          Total 
                       capital         premium         capital          reserve       reserve         earnings         parent          interest         equity 
                      ZMW'000s        ZMW'000s        ZMW'000s         ZMW'000s      ZMW'000s         ZMW'000s       ZMW'000s          ZMW'000s       ZMW'000s 
                  ------------  --------------  --------------  ---------------  ------------  ---------------  -------------  ----------------  ------------- 
 At 1 October 
  2018                   3,006       1,125,012           1,000        1,228,724       278,923          479,109      3,115,774           (8,660)      3,107,114 
 Loss for the 
  period                     -               -               -                -             -         (32,379)       (32,379)               590       (31,789) 
 Transfer of 
  surplus 
  depreciation               -               -               -         (10,817)                         10,817              -                 -              - 
 Other 
 comprehensive 
 income:                                                                                                                                      -              - 
 Exchange gains 
  on translating 
  presentational 
  currency                   -               -               -                -        10,620                -         10,620             2,916         13,536 
 Total 
  comprehensive 
  income 
  for the period             -               -               -         (10,817)        10,620         (21,562)       (21,759)             3,506       (18,253) 
 At 30 March 
  2019                   3,006       1,125,012           1,000        1,217,907       289,543          457,547      3,094,015           (5,154)      3,088,861 
 Loss for the 
  period                     -               -               -                -             -           59,308         59,308               490         59,798 
 Transfer of 
  surplus 
  depreciation               -               -               -         (18,849)             -           18,849              -                 -              - 
 Other 
 comprehensive 
 income: 
 Exchange gains 
  on translating 
  presentational 
  currency                   -               -               -                -        92,386                -         92,386             (217)         92,169 
 Total 
  comprehensive 
  income 
  for the period             -               -               -         (18,849)        92,386           78,157        151,694               273        151,967 
 At 30 September 
  2019                   3,006       1,125,012           1,000        1,199,058       381,929          535,704      3,245,709           (4,881)      3,240,828 
 Profit for the 
  period                     -               -               -                -             -            1,650          1,650               490          2,140 
 Transfer of 
  surplus 
  depreciation               -               -               -         (14,833)             -           14,833              -                 -              - 
 Other 
  comprehensive 
  income 
  Remeasurement 
  of leases                  -               -               -                -             -             (12)           (12)                 -           (12) 
 Exchange gains 
  on translating 
  presentational 
  currency                   -               -               -                -       432,251                -        432,251             2,155        434,406 
 Total 
  comprehensive 
  income 
  for the period             -               -               -         (14,833)       432,251           16,471        433,889             2,645        436,534 
 At 31 March 
  2020                   3,006       1,125,012           1,000        1,184,225       814,180          552,175      3,679,598           (2,236)      3,677,362 
 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY

FOR THE SIX MONTH PERIODED 31 MARCH 2020

 
                                                                                                                              Total 
                                                                                              Foreign                  attributable 
                                                            Preference                       exchange                     to owners 
                              Share            Share             share      Revaluation   translation       Retained         of the   Non-controlling         Total 
                            capital          premium           capital          reserve       reserve       earnings         parent          Interest        equity 
                           USD'000s         USD'000s          USD'000s         USD'000s      USD'000s       USD'000s       USD'000s          USD'000s      USD'000s 
                  -----------------  ---------------  ----------------  ---------------  ------------  -------------  -------------  ----------------  ------------ 
 At 1 October 
  2018                          449          185,095               100          175,617     (186,889)         80,188        254,560             (708)       253,852 
 Loss for the 
  period                          -                -                 -                -             -        (2,717)        (2,717)                49       (2,668) 
 Transfer of 
  surplus 
  depreciation                    -                -                 -            (907)             -            907              -                 -             - 
 Other 
 comprehensive 
 income 
 Exchange gains 
  on translating 
  presentational 
  currency                        -                -                 -                -         1,972              -          1,972               236         2,208 
 Total 
  comprehensive 
  income for 
  the period                      -                -                 -            (907)         1,972        (1,810)          (745)               285         (460) 
 At 31 March 
  2019                          449          185,095               100          174,710     (184,917)         78,378        253,815             (423)       253,392 
 Transactions 
 with owners 
 Profit for the 
  period                          -                -                 -                -             -          4,903          4,903                40         4,943 
 Transfer of 
  surplus 
  depreciation                    -                -                 -          (1,501)             -          1,501              -                 -             - 
 Revaluation                      -                -                 -                -             -              -              -                 -             - 
 Other 
 comprehensive 
 income: 
 Exchange losses 
  on translating 
  presentational 
  currency                        -                -                 -                -      (12,831)              -       (12,831)                13      (12,818) 
 Total 
  comprehensive 
  income for 
  the period                      -                -                 -          (1,501)      (12,831)          6,404        (7,928)                53       (7,875) 
 At 30 September 
  2019                          449          185,095               100          173,209     (197,748)         84,782        245,887             (370)       245,517 
 Profit for the 
  period                          -                -                 -                -             -            119            119                35           154 
 Transfer of 
  surplus 
  depreciation                    -                -                 -          (1,066)             -          1,066              -                 -             - 
 Other 
  comprehensive 
  income 
  Remeasurement 
  of leases                       -                -                 -                -             -            (1)            (1)                 -           (1) 
 Exchange gains 
  on translating 
  presentational 
  currency                        -                -                 -                -      (42,262)              -       (42,262)               211      (42,051) 
 Total 
  comprehensive 
  income                          -                -                 -          (1,066)      (42,262)          1,184       (42,144)               246      (41,898) 
 At 31 March 
  2020                          449          185,095               100          172,143     (240,010)         85,966        203,743             (124)       203,619 
 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION -- 31 MARCH 2020

 
                                                    Unaudited                   Audited 
                                          -----------------------------  -------------- 
                                    Note   31 Mar 2020      31 Mar 2019    30 Sept 2019 
                                              ZMW'000s         ZMW'000s        ZMW'000s 
 ASSETS 
 Non - current assets 
 Goodwill                                      166,801          166,801         166,801 
 Property, plant and equipment         8     3,292,653        2,895,599       2,841,824 
 Investment in associate                        10,478           13,592          12,376 
 Deferred tax assets                6(e)        80,073           47,619          56,525 
                                             3,550,005        3,123,611       3,077,526 
 Current assets 
 Biological assets                     9       520,437          374,728         170,417 
 Inventories                                   682,619          594,640         941,159 
 Trade and other receivables                    87,924           68,560          98,025 
 Assets held for disposal             15       131,857                -         135,357 
 Amounts due from related 
  companies                                     38,281           37,502          41,554 
 Income tax recoverable             6(c)        18,329           17,517           2,767 
                                             1,479,447        1,092,947       1,389,279 
 
 Total assets                                5,029,452        4,216,558       4,466,805 
 
 EQUITY AND LIABILITIES 
 Capital and reserves 
 Share capital                                   3,006            3,006           3,006 
 Preference share capital                        1,000            1,000           1,000 
 Share premium                               1,125,012        1,125,012       1,125,012 
 Reserves                                    2,550,580        1,964,997       2,116,691 
                                             3,679,598        3,094,015       3,245,709 
 Non-controlling interest                      (2,236)          (5,154)         (4,881) 
                                             3,677,362        3,088,861       3,240,828 
 Non - current liabilities 
 Interest bearing liabilities         11       234,846          256,206         228,099 
 Obligations under finance 
  leases                              12        19,741           19,530          19,297 
 Deferred liability                             15,737           26,644          16,362 
 Deferred taxation                  6(e)        32,154            6,865           9,138 
                                               302,478          309,245         272,896 
 Current liabilities 
 Interest bearing liabilities         11       163,125           94,913         130,661 
 Collateral management agreement      11       227,983          176,159         212,381 
 Obligations under finance 
  leases                              12        24,701           11,111          21,487 
 Trade and other payables                      231,592          173,859         259,585 
 Provisions                                     54,310           41,597          52,914 
 Amounts due to related 
  companies                                      1,265              362             251 
 Taxation payable                   6(c)        15,253           12,109           1,377 
 Bank overdrafts                      10       331,383          308,342         274,425 
                                             1,049,612          818,452         953,081 
 
 Total equity and liabilities                5,029,452        4,216,558       4,466,805 
 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION -- 31 MARCH 2020

 
                                                    Unaudited             Audited 
                                           --------------------------  ------------ 
                                                                            30 Sept 
                                            31 Mar 2020   31 Mar 2019          2019 
                                     Note     USD '000s     USD '000s     USD '000s 
 ASSETS 
 Non - current assets 
 Goodwill                                         9,236        13,683        12,636 
 Property, plant and equipment          8       182,317       237,539       215,290 
 Investment in associate                            580         1,115           938 
 Deferred tax asset                  6(j)         4,434         3,906         4,282 
                                                196,567       256,243       233,146 
 Current assets 
 Biological assets                      9        28,817        30,741        12,910 
 Inventories                                     37,797        48,781        71,300 
 Trade and other receivables                      4,868         5,624         7,426 
 Assets held for disposal              15         7,301             -        10,254 
 Amounts due from related 
  companies                                       2,120         3,076         3,148 
 Income tax recoverable              6(h)         1,015         1,437           210 
                                                 81,918        89,659       105,248 
 
 Total assets                                   278,485       345,902       338,394 
 EQUITY AND LIABILITIES 
 Capital and reserves 
 Share capital                                      449           449           449 
 Preference share capital                           100           100           100 
 Share premium                                  185,095       185,095       185,095 
 Reserves                                        18,099        68,171        60,243 
                                                203,743       253,815       245,887 
 Non-controlling interest                         (124)         (423)         (370) 
                                                203,619       253,392       245,517 
 Non - current liabilities 
 Interest bearing liabilities          11        13,004        21,018        17,280 
 Obligations under finance 
  leases                               12         1,093         1,602         1,462 
 Deferred liability                                 872         2,186         1,240 
 Deferred tax liability              6(j)         1,780           563           692 
                                                 16,749        25,369        20,674 
 Current liabilities 
 Interest bearing liabilities          11         9,032         7,786         9,899 
 Collateral management agreement       11        12,624        14,451        16,089 
 Obligations under finance 
  leases                               12         1,368           911         1,628 
 Trade and other payables                        12,823        14,263        19,665 
 Provisions                                       3,007         3,412         4,009 
 Amounts due to related companies                    69            30            19 
 Taxation payable                    6(h)           845           993           104 
 Bank overdrafts                       10        18,349        25,295        20,790 
                                                 58,117        67,141        72,203 
 
 Total equity and liabilities                   278,485       345,902       338,394 
 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIODED 31 MARCH 2020

 
                                  Unaudited                                      Audited 
 ---------------------------------------------------------------------------  ------------- 
                                                    6 months        6 months 
                                                          to              to          Year to 
                                                 31 Mar 2020     31 Mar 2019     30 Sept 2019 
                                                    ZMW'000s        ZMW'000s         ZMW'000s 
 Cash inflow/(outflow) from/(on) 
  operating activities 
 Profit/(loss) before taxation                        12,490        (30,156)           38,653 
 Finance costs                                        48,241          36,367           82,790 
 (Loss)/profit on disposal of property, 
  plant and equipment                                      -             126            (986) 
 Adjustment on transition to IFRS 
  16                                                 (1,187)               -                - 
 Depreciation on right-of-use assets                     304               -                - 
 Depreciation                                         66,285          58,727          121,921 
 Share of loss of equity accounted 
  investment                                           1,898           1,819            3,036 
 Loss on discontinued operations                     (9,423)               -         (17,379) 
 Fair value price adjustment                          10,408          15,729         (10,284) 
 Net unrealised foreign exchange 
  (gains)/losses                                      31,935         (1,011)            7,153 
 Earnings before interest, tax, depreciation 
 and amortisation, fair value adjustments 
 and net unrealised foreign exchange 
 losses                                              160,951          81,601          224,904 
 (Increase)/decrease in biological 
  assets                                           (360,428)       (193,054)           21,541 
 Decrease in inventory                               258,540          45,171        (301,348) 
 Decrease in trade and other receivables              10,101          87,754           58,289 
 Decrease in amounts due from related 
  companies                                            3,273          12,770            8,718 
 Decrease in trade and other payables 
  and provisions                                    (26,597)       (124,071)         (27,028) 
 Increase in amount due to related 
  companies                                            1,014             130               19 
 (Decrease)/increase in deferred 
  liability                                            (625)         (4,334)          (6,249) 
 Cash outflow from assets held for 
  disposal                                                 -               -                - 
 Income tax paid                                     (3,145)         (5,890)          (9,652) 
 Net cash inflow/(outflow from/(on) 
  operating activities                                43,084        (99,923)         (30,806) 
 
 Investing activities 
 Purchase of property, plant and 
  equipment                                         (57,952)        (54,596)        (113,825) 
 Proceeds from sale of assets                            342               -           11,776 
 Net cash (outflow)/ inflow (on)/ 
  from investing activities                         (57,610)        (54,596)        (102,049) 
 
 Net cash (outflow)/inflow before 
  financing                                         (14,526)       (154,519)        (132,855) 
 
 Financing 
 Long term loans repaid                             (56,612)        (49,876)         (96,913) 
 Receipt of short term funding                        15,602          67,849          119,456 
 Leasing liabilities obtained/(repaid)                 3,658         (7,704)              707 
 Finance costs including discontinued 
  operations                                        (48,241)        (36,367)         (82,790) 
 Net cash outflow from financing                    (85,593)        (26,098)         (59,540) 
 
 Decrease in cash and cash equivalents             (100,119)       (180,617)        (192,395) 
 Cash and cash equivalents at beginning 
  of period                                        (274,425)       (135,743)        (135,743) 
 Effects of exchange rate changes 
  on the balance of 
 cash held in foreign currencies                      43,161           8,018           53,713 
 Cash and cash equivalents at end 
  of period                                        (331,383)       (308,342)        (274,425) 
 Represented by: 
 Cash in hand and at bank                             62,113          50,801           56,753 
 Bank overdrafts                                   (393,496)       (359,143)        (331,178) 
                                                   (331,383)       (308,342)        (274,425) 
 
 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIODED 31 MARCH 2020

 
                                                            Unaudited               Audited 
                                                  -----------------------------  ------------ 
                                                       6 months        6 months 
                                                             to              to       Year to 
                                                         31 Mar          31 Mar       30 Sept 
                                                           2020            2019          2019 
                                                       USD'000s        USD'000s      USD'000s 
 Cash inflow/(outflow) from/(on) operating 
  activities 
 Profit/(loss) before taxation                              898         (2,531)         3,138 
 Finance costs                                            3,468           3,051         6,720 
 Profit/(loss) on disposal of property, 
  plant and equipment                                         -              11          (80) 
 Adjustment on transition to IFRS 16                       (90)               -             - 
 Depreciation charge on right-of-use 
  assets                                                     22               -             - 
 Depreciation                                             4,765           4,927         9,896 
 Share of loss of equity accounted 
  investment                                                136             153           246 
 Loss of disposal of investments                              -               -             - 
 Loss on discontinued operations                          (677)               -       (1,411) 
 Fair value price adjustment                                748           1,320         (835) 
 Net unrealised foreign exchange losses/(gains)           2,296            (85)           581 
 Earnings before interest, tax, depreciation 
  and amortisation, fair value adjustments 
  and net unrealised foreign exchange 
  losses                                                 11,566           6,846        18,255 
 Increase/(decrease) in biological 
  assets                                               (25,911)        (16,196)         1,748 
 Decrease in inventory                                   18,587           3,790      (24,460) 
 Decrease in trade and other receivables                    726           7,362         4,731 
 Decrease in amounts due from related 
  companies                                                 235           1,071           708 
 (Decrease) in trade and other payables                 (1,912)        (10,409)       (2,194) 
 Increase in amount due to related 
  companies                                                  73              11             2 
 (Decrease) in deferred liability                          (45)           (364)         (507) 
 Cash outflow from assets held for 
  disposal                                                    -               -             - 
 Income tax paid                                          (226)           (494)         (783) 
 Net cash inflow/(outflow) from/(on) 
  operating activities                                    3,093         (8,383)       (2,500) 
 
 Investing activities 
 Purchase of property, plant and equipment              (4,166)         (4,580)       (9,239) 
 Proceeds from sale of assets                                25               -           956 
 Net cash outflow on investing activities               (4,141)         (4,580)       (8,283) 
 
 Net cash outflow before financing                      (1,048)        (12,963)      (10,783) 
 Financing 
 Long term loans repaid                                 (4,070)         (4,184)       (7,866) 
 Receipt of short term funding                            1,123           5,692         9,696 
 Leasing liabilities obtained/(repaid)                      263           (646)            57 
 Finance costs including discontinued 
  operations                                            (3,468)         (3,051)       (6,720) 
 Net cash outflow from financing                        (6,152)         (2,189)       (4,833) 
 
 Decrease in cash and cash equivalents                  (7,200)        (15,152)      (15,616) 
 Cash and cash equivalents at beginning 
  of period                                            (20,790)        (11,090)      (11,090) 
 Effects of exchange rate changes on 
  the balance of 
  cash held in foreign currencies                         9,641             947         5,916 
 Cash and cash equivalents at end 
  of period                                            (18,349)        (25,295)      (20,790) 
 Represented by: 
 Cash in hand and at bank                                 3,439           4,167         4,299 
 Bank overdrafts                                       (21,788)        (29,462)      (25,089) 
                                                       (18,349)        (25,295)      (20,790) 
 

ZAMBEEF PRODUCTS PLC AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS -- 31 MARCH 2020

   1.             The Group 

Zambeef Products PLC and its subsidiaries ("Group") is one of the largest agri-businesses in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, milk, dairy products, eggs, edible oils, stock feed and flour. The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 7,971 Ha of irrigated row crops and 8,623 Ha of rain-fed/dry-land crops available for planting each year. The Group also has operations in West Africa, Nigeria and Ghana.

   2.             Principal accounting policies 

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

   (a)            Basis of consolidation 

The consolidated financial statements include the financial statements of the parent Company and its subsidiary companies made up to the end of the financial year. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the date of their acquisition or up to the date of their disposal. Intercompany transactions and profits are eliminated on consolidation and all income and profit figures relate to external transactions only.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests. Losses incurred are allocated to the non-controlling interest in equity until this value is nil, at which point any subsequent losses are allocated against the interests of the parent.

   (b)           Going Concern 

At the reporting date the current portion of long term loan amounts repayable amount to ZMW415.8 million (USD22.9 million) [30 September 2019: ZMW364.5 million (USD27.6 million)]. After reviewing the available information including the Group's strategic plans and continuing support from the Group's working capital funders, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. All current liabilities will be settled from the continued liquidation of stock and expected increase in income from the capital expenditure carried out.

   (c)            Basis of presentation 

The information for the 6 month periods ended 31 March 2020 and 31 March 2019 do not constitute statutory accounts. The figures for the year ended 30 September 2019 have been extracted from the 2019 statutory financial statements. The auditors' report on those financial statements was unqualified.

The financial statements are prepared in accordance with the provisions of the Companies Act and International Financial Reporting Standards (IFRS). The financial statements are presented in accordance with IAS 1 "Preparation of financial statements" (Revised 2007).

The financial statements have been prepared under the historic cost convention, as modified by the revaluation of property, plant and equipment, and financial assets and liabilities at fair value through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3.

   (d)           New Standards adopted as at 1 October 2019 

The Group has adopted the new accounting pronouncements which have become effective in 2019, and are as follows:

IFRS 16 'Leases'

IFRS 16 'Leases' replaces IAS 17 'Leases' along with three Interpretations (IFRIC 4 'Determining whether an Arrangement contains a Lease', SIC 15 'Operating Leases-Incentives' and SIC 27 'Evaluating the Substance of Transactions Involving the Legal Form of a Lease'). The new Standard has been applied using the modified retrospective approach, with the cumulative effect of adopting IFRS 16 being recognised in equity as an adjustment to the opening balance of retained earnings for the current period. Prior periods have not been restated.

For contracts in place at the date of initial application, the Group has elected to apply the definition of a lease from IAS 17 and IFRIC 4 and has not applied IFRS 16 to arrangements that were previously not identified as lease under IAS 17 and IFRIC 4.

The Group has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence at the date of initial application of IFRS 16, being 1 October 2019. At this date, the Group has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of transition.

Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Group has relied on its historic assessment as to whether leases were onerous immediately before the date of initial application of IFRS 16.

On transition, for leases previously accounted for as operating leases with a remaining lease term of less than 12 months and for leases of low-value assets the Group has applied the optional exemptions to not recognise right-of-use assets but to account for the lease expense on a straightline basis over the remaining lease term.

For those leases previously classified as finance leases, the right-of-use asset and lease liability are measured at the date of initial application at the same amounts as under IAS 17 immediately before the date of initial application.

On transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 was 17.6%.

The Group has benefited from the use of hindsight for determining lease terms when considering options to extend and terminate leases.

The following is a reconciliation of total operating lease commitments at 30 September 2019 to the lease liabilities recognised at 1 October 2019:

 
                                                    ZMW'000   USD'000 
 Total operating lease commitments disclosed 
  at 30 September 2019                               15,881     1,203 
                                                  ---------  -------- 
 Recognition exemptions: 
  Leases of low value assets 
  Leases with remaining life less than 
  12 months                                        (14,438)   (1,094) 
                                                  ---------  -------- 
 Variable lease payments not recognised                   -         - 
                                                  ---------  -------- 
 Other minor adjustments relating to 
  commitment disclosures                                  -         - 
                                                  ---------  -------- 
 
 Operating lease liabilities before discounting       1,443       109 
                                                  ---------  -------- 
 Discounted using incremental borrowing 
  rate                                                (254)      (19) 
                                                  ---------  -------- 
 Operating lease liabilities                          1,189        90 
                                                  ---------  -------- 
 Reasonable certain extension options                     -         - 
                                                  ---------  -------- 
 Finance lease obligations                           40,784     3,090 
                                                  ---------  -------- 
 Total lease liabilities recognised under 
  IFRS 16 at 1 October 2019                          41,973     3,180 
                                                  ---------  -------- 
 
   (e)            Foreign currencies 
             (i)            Presentational and functional currency 

Zambeef Products PLC as a company has ten operating branches, of which nine have a historical functional currency of Zambian Kwacha (ZMW) and one (the Mpongwe Farm Branch) has a functional currency of United States Dollars (USD), being an operational branch set up during the financial year ended 30 September 2012. Management have chosen a variant on the functional currency of Mpongwe due to the following factors:

-- the majority of farm input costs (fertilizer, farming chemicals, agricultural machinery spares, etc.), which are primarily sourced from overseas, are driven by USD to ZMW exchange rate due to original prices being USD;

-- the pricing of Mpongwe's principal outputs (wheat, soya and maize) are significantly influenced by world USD denominated grain prices;

-- the capital raised attached to the acquisition of the Mpongwe assets was denominated in foreign currency;

   --   the Mpongwe assets were purchased in USD; 

-- upon admission and dual listing on the AIM market of the London Stock Exchange (LSE), Zambeef was required to report in USD in addition to reporting in ZMW for the LuSE listing; and

-- majority of financial liabilities associated with working capital funding and capital expenditure are sourced in USD and repayable in USD, with a substantial portion of the Company's term liabilities secured on the assets of Mpongwe.

In light of this, Mpongwe's assets and liabilities are translated to ZMW and consolidated with other branches of the Company for reporting and tax purposes in Zambia, with any differences arising out of translation posted as a capital reserve item and a non-distributable reserve.

The Group's reporting currency in Zambia is ZMW and the presentation of financial statements to Non-Zambian shareholders and for the purposes of being listed on the AIM market of the London Stock Exchange also necessitate the presentation of the financial statements in United States Dollars (USD).

(ii) Basis of translating presentational currency to USD for the purposes of supplementary information

Statement of comprehensive income items have been translated using the average exchange rate for the period as an approximation to the actual exchange rate. Assets and liabilities have been translated using the closing exchange rate. Any differences arising from this process have been recognised in other comprehensive income and accumulated in the foreign exchange reserve in equity.

Equity items have been translated at the closing exchange rate. Exchange differences arising on retranslating equity items and opening net assets have also been transferred to the foreign exchange reserve within equity.

The following exchange rates have been applied:

ZMW:USD Average Closing

                                                                                          exchange rate                   exchange rate 

6 months ended 31 March 2019 11.92 12.19

Year ended 30 September 2019 12.32 13.20

6 months ended 31 March 2020 13.91 18.06

All historical financial information, except where specifically stated, is presented in Zambian Kwacha rounded to the nearest ZMW'000s and United States Dollars rounded to the nearest USD'000s.

                   (iii)          Basis of translating transactions and balances 

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

Non-operating foreign exchange gains and losses mainly arise on fluctuations of the exchange rate between United States Dollars and Zambian Kwacha. Due to the instability of the exchange rate, which may result in significant variances of foreign exchange related assets and liabilities, these gains and losses have been presented below operating profit in the statement of comprehensive income.

   (iv)          Basis of translating foreign operations 

In the consolidated financial statements, the financial statements of the foreign subsidiaries originally presented in their local currency have been translated into Zambian Kwacha. Assets and liabilities have been translated into Zambian Kwacha at the exchange rates ruling at the period end. Statement of comprehensive income items have been translated at an average monthly rate for the period. Any differences arising from this procedure are taken to the foreign exchange reserve.

The following exchange rates have been applied:

                                                                                                    Average                                  Closing 

ZMW: Nigeria Naira exchange rate exchange rate

6 months ended 31 March 2019 30.30 29.39

Year ended 30 September 2019 29.21 27.25

6 months ended 31 March 2020 26.00 20.26

                                                                                                    Average                                  Closing 

ZMW: Ghana Cedi exchange rate exchange rate

6 months ended 31 March 2019 0.42 0.44

Year ended 30 September 2019 0.42 0.41

6 months ended 31 March 2020 0.40 0.32

   (f)            General information and basis of preparation 

The condensed interim consolidated financial statements are for the six months ended 31 March 2019 and are presented in Zambian Kwacha and United States Dollars. They have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with IFRS and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2019.

   (g)           Significant accounting policies 

The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 30 September 2019.

   3.             Critical accounting estimates and judgements 

When preparing the Interim Financial Statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgements, estimates and assumptions applied in the Interim Financial Statements, including the key sources of estimation uncertainty, were the same as those applied in the Group's last annual financial statements for the year ended 30 September 2019. The only exceptions are the estimate of income tax liabilities which is determined in the Interim Financial Statements using the estimated average annual effective income tax rate applied to the pre-tax income of the interim period

   4.             Significant events and transactions 

The Group's management believes that the Group is well positioned in the economy Factors contributing to the Group's strong position are:

   (a)            Increase in the retail foot print of the Group. 

(b) Increase in production facilities of the Group leading to higher volumes available for retail.

(c) Improvements in the management team across various areas of the Group leading to positive reinforcement of strong operational synergies.

Overall, the Group is in a strong position and has sufficient capital and liquidity to service its operating activities and debt. The Group's objectives and policies for managing capital credit risk and liquidity risk should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 September 2019.

   5.             Segmental reporting 

An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group's Board of Directors ('BoD') to make decisions about the allocation of resources and assessment of performance about which discrete financial information is available. Gross margin information is sufficient for the BoD to use for such purposes. The BoD reviews information regarding the operating divisions which match the main external revenues earned by the Group, and management information regarding the operating assets and liabilities of the main business divisions within the Group.

During the six month period to 31 March 2020, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss.

The revenues and gross profit generated by each of the Group's operating segments and segment assets are summarised as follows:

Period ended 31 March 2020

                   (i)            in Zambian Kwacha 
 
 Segment                                 Revenue     Gross Profit 
                                        ZMW'000s         ZMW'000s 
 Retailing - Zambia                    1,029,584           94,721 
 Master Meats (Nigeria)                   83,007           17,677 
 Master Meats (Ghana)                     26,087            7,772 
 Retailing West Africa                   109,094           25,449 
 Total Retailing                       1,138,678          120,170 
 
 Beef                                    262,500           81,504 
 Chicken                                 212,538           43,941 
 Pork                                    134,612           24,140 
 Milk and dairy                          108,961           49,569 
 Eggs                                     27,125          (2,526) 
 Total Cold Chain Food Production        745,736          196,628 
 Gross Combined Retail and CCFP        1,884,414          316,798 
 Less: Intra/ Inter Sales              (721,059)                - 
 Combined Retail and CCFP              1,163,355          316,798 
 Stock Feed                              641,656          122,378 
 Crops - row crops                       256,990          161,886 
 
 Mill and bakery                          92,820           18,218 
 Leather and shoe                         16,656            6,849 
 Total Other                             109,476           25,067 
 Total                                 2,171,477          626,129 
 Less: intra/inter group Sales         (373,844)                - 
 Group total                           1,797,633          626,129 
 
                                                         (500,630 
 Central operating costs                                        ) 
 Operating profit                                         125,499 
 Foreign exchange losses                                 (62,870) 
 Finance costs                                           (48,241) 
 Share of loss of equity accounted 
  investment                                              (1,898) 
 Profit before tax                                         12,490 
 
 
 Operating assets/(liabilities) 
                                                             Master 
                                     Zambeef   Retailing       Pork      Other       Total 
                                    ZMW'000s    ZMW'000s   ZMW'000s   ZMW'000s    ZMW'000s 
 Property, plant and equipment     2,491,048     227,715     83,804    490,086   3,292,653 
 Biological assets and 
  inventories                        966,159      68,838     20,491    147,568   1,203,056 
 Cash, cash equivalents 
  and bank overdrafts              (295,320)    (62,209)      4,444     21,702   (331,383) 
 

Period ended 31 March 2020

                   (ii)           in US Dollars 
 
 Segment                                 Revenue    Gross Profit 
                                       USD '000s       USD '000s 
 Retailing - Zambia                       74,018           6,810 
 Master Meats (Nigeria)                    5,967           1,271 
 Master Meats (Ghana)                      1,876             559 
 Retailing West Africa                     7,743           1,830 
 Total Retailing                          81,861           8,640 
 
 Beef                                     18,871           5,859 
 Chicken                                  15,280           3,159 
 Pork                                      9,677           1,735 
 Milk and dairy                            7,833           3,564 
 Fish                                          -               - 
 Eggs                                      1,950           (182) 
 Total Cold Chain Food Production         53,611          14,135 
 Gross Combined Retail and CCFP          135,472          22,775 
 Less: Intra/ Inter Sales               (51,837)               - 
 Combined Retail and CCFP                 83,635          22,775 
 Stock Feed                               46,129           8,798 
 Crops - row crops                        18,475          11,638 
 
 Mill and bakery                           6,673           1,310 
 Leather and shoe                          1,197             492 
 Total Other                               7,870           1,802 
 Total                                   156,109          45,013 
 Less: intra/inter group sales          (26,876)               - 
 Group total                             129,233          45,013 
 
                                                         (35,991 
 Central operating costs                                       ) 
 Operating profit                                          9,022 
 Foreign exchange losses                                 (4,520) 
 Share of loss of equity accounted 
  investment                                               (136) 
 Finance costs                                           (3,468) 
 Profit before tax                                           898 
 
 
 Operating assets/(liabilities) 
                                    Zambeef   Retailing   Master Pork      Other      Total 
                                   USD'000s    USD'000s      USD'000s   USD'000s   USD'000s 
 Property, plant and equipment      137,932      12,609         4,639     27,137    182,317 
 Biological assets and 
  inventories                        53,497       3.812         1,135      8,170     66,614 
 Cash, cash equivalents 
  and bank overdrafts              (16,352)     (3,445)           246      1,202   (18,349) 
 

Period ended 31 March 2019

                   (i)            in Zambian Kwacha 
 
 Segment                                  Revenue      Gross Profit 
                                         ZMW'000s          ZMW'000s 
 Retailing - Zambia                       882,826            84,017 
 Master Meats (Nigeria)                    70,097            14,496 
 Master Meats (Ghana)                      22,683             7,458 
 Retailing West Africa                     92,780            21,954 
 Total Retailing                          975,606           105,971 
 
 Beef                                     242,892            60,768 
 Chicken                                  167,865            53,469 
 Pork                                     120,561            19,194 
 Milk and dairy                           106,248            32,714 
 Fish                                      18,613             4,361 
 Eggs                                      25,619             5,802 
 Total Cold Chain Food Production         681,798           176,308 
 Gross Combined Retail and CCFP         1,657,404           282,279 
 Less: Intra/ Inter Sales               (648,538)                 - 
 Combined Retail and CCFP               1,008,866           282,279 
 Stock Feed                               412,344            77,544 
 Crops - row crops                        150,529            93,323 
 
 Mill and bakery                           83,198            13,041 
 Leather and shoe                          12,931             4,383 
 Total Other                               96,129            17,424 
 Total                                  1,667,868           470,570 
 Less: intra/inter group Sales          (251,378)                 - 
 Group total                            1,416,490           470,570 
 
 Central operating costs                                  (459,193) 
 Operating profit                                            11,377 
 Foreign exchange losses                                    (3,347) 
 Finance costs                                             (36,367) 
 Share of loss of equity accounted 
  investment                                                (1,819) 
 Loss before tax                                           (30,156) 
 
 
 Operating assets/(liabilities) 
                                                             Master 
                                     Zambeef   Retailing       Pork      Other       Total 
                                    ZMW'000s    ZMW'000s   ZMW'000s   ZMW'000s    ZMW'000s 
 Property, plant and equipment     2,023,654     204,122     84,283    583,540   2,895,599 
 Biological assets and 
  inventories                        630,330      61,762     21,886    255,390     969,368 
 Cash, cash equivalents 
  and bank overdrafts              (242,691)    (76,614)      1,378      9,585   (308,342) 
 

Period ended 31 March 2019

                   (ii)           in US Dollars 
 
 Segment                                Revenue     Gross Profit 
                                      USD '000s        USD '000s 
 Retailing - Zambia                      74,063            7,048 
 Master Meats (Nigeria)                   5,881            1,216 
 Master Meats (Ghana)                     1,903              626 
 Retailing West Africa                    7,784            1,842 
 Total Retailing                         81,847            8,890 
 
 Beef                                    20,377            5,098 
 Chicken                                 14,083            4,486 
 Pork                                    10,114            1,610 
 Milk and dairy                           8,913            2,744 
 Fish                                     1,561              366 
 Eggs                                     2,149              487 
 Total Cold Chain Food Production        57,197           14,791 
 Gross Combined Retail and CCFP         139,044           23,681 
 Less: Intra/ Inter Sales              (54,408)                - 
 Combined Retail and CCFP                84,636           23,681 
 Stock Feed                              34,593            6,505 
 Crops - row crops                       12,628            7,829 
 
 Mill and bakery                          6,980            1,094 
 Leather and shoe                         1,085              368 
 Total Other                              8,065            1,462 
 Total                                  139,922           39,477 
 Less: intra/inter group sales         (21,089)                - 
 Group total                            118,833           39,477 
 
 Central operating costs                                (38,523) 
 Operating profit                                            954 
 Foreign exchange losses                                   (281) 
 Share of loss of equity accounted 
  investment                                               (153) 
 Finance costs                                           (3,051) 
 Loss before tax                                         (2,531) 
 
 
 Operating assets/(liabilities) 
                                    Zambeef   Retailing   Master Pork      Other      Total 
                                   USD'000s    USD'000s      USD'000s   USD'000s   USD'000s 
 Property, plant and equipment      166,009      16,745         6,914     47,871    237,539 
 Biological assets and 
  inventories                        51,709       5,067         1,795     20,951     79,522 
 Cash, cash equivalents 
  and bank overdrafts              (19,909)     (6,285)           113        786   (25,295) 
 

Period ended 30 September 2019

                   (i)            in Zambian Kwacha 
 
 Segment                                 Revenue           Gross 
                                                          Profit 
                                        ZMW'000s        ZMW'000s 
 Retailing - Zambia                    1,853,721         172,031 
 Master Meats (Nigeria)                  138,732          27,381 
 Master Meats (Ghana)                     46,222          14,090 
 Retailing West Africa                   184,954          41,471 
 Total Retailing                       2,038,675         213,502 
 
 Beef                                    474,941         127,946 
 Chicken                                 247,580          52,405 
 Zamhatch                                112,665          60,310 
 Pork                                    252,952          38,642 
 Milk and dairy                          206,531          67,409 
 Fish                                     36,612           7,180 
 Eggs                                     57,211          13,765 
 Total Cold Chain Food Production      1,388,492         367,657 
 Gross Combined Retail and CCFP        3,427,167         581,159 
 Less: Intra/ Inter Sales             (1,303,519               - 
 Combined Retail and CCFP              2,123,648         581,159 
 Stock Feed                              986,075         191,011 
 Crops - row crops                       474,202         270,116 
 
 Mill and bakery                         183,520          30,517 
 Leather and shoe                         26,828           8,744 
 Edible oils                                   -               - 
 Total Other                             210,348          39,261 
 Total                                 3,794,273       1,081,547 
 Less: intra/inter group Sales         (659,306)               - 
 Group total                           3,134,967       1,081,547 
 
 Central operating costs                               (920,338) 
 Operating profit                                        161,209 
 Foreign exchange gains                                 (36,730) 
 Finance costs                                          (82,790) 
 Share of loss on equity accounted 
  investment                                             (3,036) 
 Profit before tax                                        38,653 
 
 
 Operating assets/(liabilities) 
                                     Zambeef   Retailing   Master Pork      Other       Total 
                                    ZMW'000s    ZMW'000s      ZMW'000s   ZMW'000s    ZMW'000s 
 Property, plant and equipment     2,060,110     209,897        84,443    487,374   2,841,824 
 Biological assets and 
  inventories                        820,815      70,921        19,195    200,645   1,111,576 
 Cash, cash equivalents 
  and bank overdrafts              (195,772)    (96,500)         1,461     16,386   (274,425) 
 

Period ended 30 September 2019

                   (i)            in US Dollars 
 
 Segment                                 Revenue    Gross Profit 
                                        USD'000s        USD'000s 
 Retailing - Zambia                      150,464          13,964 
 Master Meats (Nigeria)                   11,261           2,222 
 Master Meats (Ghana)                      3,752           1,144 
 Retailing West Africa                    15,013           3,366 
 Total Retailing                         165,477          17,330 
 
 Beef                                     38,550          10,385 
 Chicken                                  20,096           4,254 
 Zamhatch                                  9,145           4,895 
 Pork                                     20,532           3,137 
 Milk and dairy                           16,764           5,472 
 Fish                                      2,972             583 
 Eggs                                      4,644           1,117 
 Total Cold Chain Food Production        112,703          29,843 
 Gross Combined Retail and CCFP          278,180               - 
 Less: Intra/ Inter Sales              (105,806)               - 
 Combined Retail and CCFP                172,374          47,173 
 Stock Feed                               80,039          15,503 
 Crops - row crops                        38,490          21,925 
 
 Mill and bakery                          14,896           2,477 
 Leather and shoe                          2,178             710 
 Edible oils                                   -               - 
 Total Other                              17,074           3,187 
 Total                                   307,977          87,788 
 Less: intra/inter group Sales          (53,515)               - 
 Group total                             254,462          87,788 
 
 Central operating costs                                (74,703) 
 Operating profit                                         13,085 
 Foreign exchange gains                                  (2,981) 
 Finance costs                                           (6,720) 
 Share of loss on equity accounted 
  investment                                               (246) 
 Profit before tax                                         3,138 
 
 
 Operating assets/(liabilities) 
                                    Zambeef   Retailing   Master Pork      Other      Total 
                                   USD'000s    USD'000s      USD'000s   USD'000s   USD'000s 
 Property, plant and equipment      156,069      15,901         6,397     36,923    215,290 
 Biological assets and 
  inventories                        62,183       5,373         1,454     15,200     84,210 
 Cash, cash equivalents 
  and bank overdrafts              (14,831)     (7,311)           111      1,241   (20,790) 
 

The Group's revenue from external customers and its geographic allocation of non-current assets may be summarised as follows:

 
                       31 Mar 2020               31 Mar 2019              30 Sept 2019 
                ------------------------  ------------------------  ------------------------ 
                             Non-current               Non-current               Non-current 
                  Revenues        assets    Revenues        assets    Revenues        assets 
                  ZMW'000s      ZMW'000s    ZMW'000s    ZMW'000s      ZMW'000s      ZMW'000s 
  Zambia         1,645,395     3,521,231   1,299,747     3,100,818   2,903,553     3,054,396 
  West Africa      109,094        28,774      92,780        22,793     184,954        23,130 
  Rest of 
   world            43,144             -      23,963             -      46,460             - 
                 1,797,633     3,550,005   1,416,490     3,123,611   3,134,967     3,077,526 
                ----------  ------------  ----------  ------------  ----------  ------------ 
 
 
                       31 Mar 2020               31 Mar 2019               30 Sept 2019 
                ------------------------  ------------------------  ------------------------- 
                             Non-current               Non-current                Non-current 
                 Revenues         assets   Revenues         assets    Revenues         assets 
                 USD'000s       USD'000s   USD'000s       USD'000s    USD'000s       USD'000s 
  Zambia          118,289        194,974    109,039        254,373     235,679        231,394 
  West Africa       7,843          1,593      7,784          1,870      15,013          1,752 
  Rest of 
   world            3,101              -      2,010              -       3,770              - 
                  129,233        196,567    118,833        256,243     254,462        233,146 
 
   6.             Taxation 
 
                                        31 Mar      31 Mar 
                                          2020        2019   30 Sept 2019 
 Income tax expense                   ZMW'000s    ZMW'000s       ZMW'000s 
 (a)    Tax charge 
        Current tax: 
  Tax charge                             1,459       1,442          9,222 
        Deferred tax: 
  Deferred taxation (note 
   6(e))                                 (532)         191        (6,442) 
  Tax charge/(credit) for 
   the period                              927       1,633          2,780 
 
 
                                                    31 Mar       31 Mar 
                                                      2020         2019   30 Sept 2019 
                                                  ZMW'000s     ZMW'000s       ZMW'000s 
 (b)    Reconciliation of tax charge 
  Profit/(loss) before taxation                     12,490     (30,156)         38,653 
  Adjustment for; 
   Discontinued operation and 
   other                                           (7,440)        1,819       (14,343) 
  Profit from continued operations                   5,050     (28,337)        24,310) 
 
   Taxation on accounting 
    profit                                         (8,888)     (16,925)       (24,681) 
         Effects of: 
        Permanent differences: 
   Disallowable expenses                             2,576        2,103          3,774 
        Timing differences: 
   Capital allowances and 
    depreciation                                     8,309      (2,945)         22,375 
   Livestock and crop valuations 
    adjustment                                       5,525      (1,336)          1,924 
   Other income                                      (144)            -          1,342 
   Unrealised exchange gains/(losses)                3,003          646          (903) 
   Unrealised tax loss                             (9,454)       20,090        (1,051) 
   Tax charge for the period                           927        1,633          2,780 
 
 (c)    Movement in taxation account 
  Taxation payable at 1 October                    (1,390)        (960)          (960) 
  Charge for the period                              1,459        1,442          9,222 
  Taxation paid                                    (3,145)      (5,890)        (9,652) 
  Taxation payable/(recoverable) 
   at the end of the period                        (3,076)      (5,408)        (1,390) 
 
  Taxation payable                                  15,253       12,109          1,377 
  Taxation recoverable                            (18,329)     (17,517)        (2,767) 
  Taxation payable as at 30 
   September                                       (3,076)      (5,408)        (1,390) 
 

(d) Income tax returns have been filed with the ZRA for the tax year ended 31 December 2019. Quarterly tax returns for the period were made on the due dates.

   (e)                  Deferred taxation 
 
                                      31 Mar       31 Mar 
                                        2020         2019   30 Sept 2019 
                                    ZMW'000s     ZMW'000s       ZMW'000s 
  Represented by: 
  Biological valuation                52,879       17,223         14,162 
  Accelerated tax allowances          88,560       46,259         58,464 
  Provisions                         (7,334)      (6,409)        (8,736) 
  Tax loss                         (182,024)     (97,827)      (111,277) 
                                    (47,919)     (40,754)       (47,387) 
  Analysis of movement: 
  Asset as at 1 October             (47,387)     (40,945)       (40,945) 
  Charge to profit and loss 
   account (note 6(a))                 (532)          191        (6,442) 
  (Asset)/liability as at 
   the end of the period            (47,919)     (40,754)       (47,387) 
  Deferred tax asset                (80,073)     (47,619)       (56,525) 
  Deferred tax liability              32,154        6,865          9,138 
                                    (47,919)     (40,754)       (47,387) 
 
 
                                                     31 Mar       31 Mar       30 Sept 
        Income tax expense                             2020         2019          2019 
                                                   USD'000s     USD'000s      USD'000s 
 (f)    Tax charge 
 
        Current tax: 
  Tax charge                                            105          121           749 
        Deferred tax: 
  Deferred taxation (note 
   6(j))                                               (38)           16         (523) 
  Tax (credit)/charge for 
   the period                                            67          137           226 
 
 (g)    Reconciliation of tax charge 
   Profit/(loss) before taxation                        898      (2,531)         3,138 
   Adjustment for: 
    Discontinued operation 
    and other                                        (535 )          153       (1,165) 
   Profit from continued operations                     363      (2,378)         1,973 
 
   Taxation on accounting 
    profit                                            (639)      (1,420)       (2,003) 
         Effects of: 
        Permanent differences: 
   Disallowable expenses                                185          176           306 
        Timing differences: 
   Capital allowances and 
    depreciation                                        597        (247)         1,816 
   Livestock and crop valuations 
    adjustment                                          397        (112)           156 
   Other income                                        (10)            -           109 
   Unrealised exchange (gains)/losses                   216           54          (73) 
   Unrealised tax loss                                (679)        1,686         ( 85) 
   Tax charge for the period                             67          137           226 
 
 (h)     Movement in taxation account 
  Taxation payable at 1 October                       (106)         (78)          (78) 
  Charge for the year                                   105          121           749 
  Taxation paid                                       (226)        (494)         (783) 
  Foreign exchange                                       57            7             6 
  Taxation payable as at the 
   end of the period                                  (170)        (444)         (106) 
 
  Taxation payable                                      845          993           104 
  Taxation recoverable                              (1,015)      (1,437)         (210) 
  Taxation payable as at 30 
   September                                          (170)        (444)         (106) 
 

(i) Income tax returns have been filed with the ZRA for the year 31 December 2019. Quarterly tax returns for the period were made on the due dates.

 
                                            31 Mar       31 Mar 
                                              2020         2019   30 Sept 2019 
 (j)    Deferred taxation                 USD'000s     USD'000s       USD'000s 
        Represented by: 
  Biological valuation                       2,928        1,413          1,073 
  Accelerated tax allowances                 4,904        3,795          4,429 
  Provisions                                 (406)        (526)          (662) 
  Tax loss                                (10,080)      (8,025)        (8,430) 
                                           (2,654)      (3,343)        (3,590) 
        Analysis of movement: 
  Liability as at 1 October                (3,590)      (3,345)        (3,345) 
  Charge to profit and loss 
   account (note 6(f))                        (38)           16          (523) 
  Foreign exchange                             974         (14)            278 
  (Asset)/liability as at the 
   end of period                           (2,654)      (3,343)        (3,590) 
 
  Deferred tax asset                       (4,434)      (3,906)        (4,282) 
  Deferred tax liability                     1,780          563            692 
                                           (2,654)      (3,343)        (3,590) 
 
   7.             Earnings per share 

Basic and diluted earnings per share have been calculated in accordance with IAS 33 which requires that earnings should be based on the net profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares in issue during the period.

The calculation of the basic and diluted earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

The calculation of the basic and diluted earnings/(loss) per share is shown below:

 
                                    31 Mar 2020           31 Mar 2019           30 Sept 2019 
                                ZMW'000s   USD'000s   ZMW'000s   USD'000s   ZMW'000s   USD '000s 
  Basic earnings per share 
 Profit/(loss) for the 
  period                           1,650        119   (31,199)    (2,619)     18,100       1,469 
 
 Weighted average number 
  of ordinary shares for 
  the purposes of basic 
  earnings per share (in 
  thousand)                      300,580    300,580    300,580    300,580    300,580     300,580 
 Weighted average number 
  of ordinary shares for 
  the purposes of diluted 
  earnings per share (in 
  thousand)                      400,638    400,638    401,187    401,187    400,638     400,638 
 
 Basic earnings per share 
  (ZMW ngwee and US cents) 
  - Continued operations            3.68       0.26    (10.38)     (0.87)      11.80        0.96 
 Basic earnings per share 
  (ZMW ngwee and US cents) 
  - Discontinued operations       (3.13)     (0.23)          -          -     (5.78)      (0.47) 
 Total Basic earnings 
  per share (ZMW ngwee 
  and US cents)                     0.55       0.04    (10.38)     (0.87)       6.02        0.49 
 Diluted earnings per 
  share 
 
   Basic earnings per share 
   - continued operations           2.76       0.20     (7.78)     (0.65)       8.86        0.72 
 
   Basic earnings per share 
   - discontinued operations      (2.35)     (0.17)          -          -     (4.34)      (0.35) 
 
   Total Basic earnings 
   per share                        0.41       0.03     (7.78)     (0.65)       4.52        0.37 
 
   8.             Property plant and equipment 
 
 (i) In Zambian 
  Kwacha 
 (a) Group         Leasehold                                 Plant                   Furniture     Capital       Total 
                    land and               Aircraft            and        Motor            and     work in 
                   buildings               ZMW'000s      machinery     vehicles      equipment    progress    ZMW'000s 
                    ZMW'000s                              ZMW'000s     ZMW'000s       ZMW'000s    ZMW'000s 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Cost or 
 valuation 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 As at 1 
  October 
  2018             2,052,628                    865        815,646       65,605         23,307      46,102   3,004,153 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Exchange 
  differences         71,470                      -         20,871        (194)             61         110      92,318 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Additions            13,868                      -         15,621        7,399          4,948      71,989     113,825 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Disposals           (2,030)                      -        (7,108)      (2,505)          (280)           -    (11,923) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Transfer to 
  held for sale    (116,020)                      -       (27,547)        (876)          (420)       (698)   (145,561) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Transfers            23,136                      -         57,482        7,099          4,001    (91,718)           - 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 As at 30 
  September 
  2019             2,043,052                    865        874,965       76,528         31,617      25,785   3,052,812 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Exchange 
  differences        370,768                      -         82,845        1,473            660           -     455,746 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Additions                 -                      -         16,773        8,444          2,560      30,175      57,952 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Adjustment 
  on transition 
  to IFRS 16           1,187                      -              -            -              -           -       1,187 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Disposals                 -                      -              -      (1,100)            (1)           -     (1,101) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Transfers             6,818                      -          4,303        9,374            910    (21,405)           - 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 As at 31 March 
  2020             2,421,825                    865        978,886       94,719         35,746      34,555   3,566,596 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Depreciation 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 As at 1 
  October 
  2018                16,972                     86         66,820       15,457          2,597           -     101,932 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Exchange 
  difference             539                      -        (2,044)            3           (26)           -     (1,528) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Charge for 
  the year            18,232                     87         83,340       17,459          2,803           -     121,921 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Disposals              (77)                      -          (222)        (814)           (20)           -     (1,133) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Transfer to 
  held for sale      (4,630)                      -        (5,255)        (246)           (73)           -    (10,204) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 As at 30 
  September 
  2019                31,036                    173        142,639       31,859          5,281           -     210,988 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Exchange 
  difference         (1,029)                      -        (1,199)        (310)          (337)           -     (2,875) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Charge for 
  the year            10,177                    130         43,481       10,464          2,033           -      66,285 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Disposals                 -                      -              -        (759)              -           -       (759) 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Charge on 
  rights-of-use 
  assets                 304                      -              -            -              -           -         304 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 As at 31 March 
  2020                40,488                    303        184,921       41,254          6,977           -     273,943 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 Net book value 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 As at 31 March 
  2020             2,381,337                    562        793,965       53,465         28,769      34,555   3,292,653 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 At 30 
  September 
  2019             2,012,016                    692        732,326       44,669         26,336      25,785   2,841,824 
                 -----------  ---------------------  -------------  -----------  -------------  ----------  ---------- 
 
 
 (ii) In US Dollars 
 (a) Group             Leasehold                        Plant       Motor        Furniture        Capital 
                        land and    Aircraft    and machinery    vehicles    and equipment           work        Total 
                       buildings    USD'000s         USD'000s    USD'000s         USD'000s    in progress     USD'000s 
                        USD'000s                                                                 USD'000s 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Cost or valuation 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 As at 1 October 
  2018                   168,428          71           67,332       5,411            1,934          1,869      245,045 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Foreign 
  translation            (7,701)         (5)          (4,317)       (521)            (210)          1,739     (11,015) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Additions                 1,126           -            1,267         601              402          5,843        9,239 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Transfers                 1,878           -            4,666         576              325        (7,445)            - 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Disposals                 (165)           -            (577)       (203)             (23)              -        (968) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Transfer to held 
  for 
  sale                   (8,789)           -          (2,087)        (66)             (32)           (53)     (11,027) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 As at 30 September 
  2019                   154,777          66           66,284       5,798            2,396          1,953      231,274 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Foreign 
  translation           (21,258)        (18)         (13,597)     (1,755)            (666)          (670)     (37,964) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Additions                     -           -            1,206         607              184          2,169        4,166 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Transfers                   490           -              309         674               66        (1,539)            - 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Disposals                     -           -                -        (79)                -              -         (79) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Adjustment on 
  transition 
  of IFRS 16                  90           -                -           -                -              -           90 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 As at 31 March 
  2020                   134,099          48           54,202       5,245            1,980          1,913      197,487 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Depreciation 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 As at 1 October 
  2018                   (4,986)           7           10,895       1,649              370              -        7,935 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Charge for the 
  year                     1,480           7            6,764       1,417              228              -        9,896 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Disposals                   (6)           -             (18)        (66)              (2)              -         (92) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Transfer to held 
  for 
  sale                     (351)           -            (397)        (19)              (6)              -        (773) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Foreign 
  Translation              6,214         (1)          (6,437)       (568)            (190)              -        (982) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 As at 30 September 
  2019                     2,351          13           10,807       2,413              400              -       15,984 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Charge for the 
  year                       732           9            3,126         752              146              -        4,765 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Disposals                     -           -                -        (55)                -              -         (55) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Charge on 
  rights-of-use 
  assets                      22           -                -           -                -              -           22 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Foreign 
  Translation              (863)         (6)          (3,691)       (826)            (160)              -      (5,546) 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 As at 31 March 
  2020                     2,242          16           10,242       2,284              386              -       15,170 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 Net book value 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 At 31 March 2020        131,857          32           43,960       2,961            1,594          1,913      182,317 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 At 30 September 
  2019                   152,426          53           55,477       3,385            1,996          1,953      215,290 
                     -----------  ----------  ---------------  ----------  ---------------  -------------  ----------- 
 

(b) Included in the net carrying amount of property, plant and equipment are right-of-use assets as follows:

 
                                 31 March 2020   31 March 
                                       ZMW'000       2020 
                                                  USD'000 
 Leasehold land and buildings            1,187         90 
                                --------------  --------- 
 Total right-of-use                      1,187         90 
                                --------------  --------- 
 
   9.             Biological assets 
                   (a)            31 March 2020 

Biological assets comprise standing crops, feedlot cattle, dairy cattle, pigs and chickens. At 31 March 2020 there were 14,436 cattle (11,346 feedlot cattle and 3,090 dairy cattle), 715,885 chickens (338,611 layers and 377,274 broilers), and 4,012 pigs. A total of 19,666 feedlot cattle, 571 dairy cattle, 4,834 pigs and 4,349,407 chickens were culled during the period.

                   (i)            in Zambian Kwacha 
 
                                                                                Decrease 
                                            Gains arising   Gains arising         due to 
                                                from fair       from fair 
                                 Increase           value           value       harvest/ 
                                             attributable    attributable 
                        As at      due to              to              to    transferred   As at 31 
                                                 physical 
                   1 Oct 2019   purchases         changes   price changes   to inventory   Mar 2020 
                     ZMW'000s    ZMW'000s        ZMW'000s        ZMW'000s       ZMW'000s   ZMW'000s 
 Standing 
  Crops                27,260     177,208         423,213               -      (272,252)    355,429 
 Feedlot cattle        42,878     182,034          86,496               -      (268,129)     43,279 
 Dairy Cattle          49,767      55,774          51,469          10,088      (106,546)     60,552 
 Pigs                   4,555       6,317             516             320        (7,679)      4,029 
 Chickens              45,957     188,226          25,715               -      (202,750)     57,148 
 Total                170,417     609,559         587,409          10,408      (857,356)    520,437 
                  ===========  ==========  ==============  ==============  =============  ========= 
 
                   (ii)           in US Dollars 
 
                                                           Gains arising      Gains arising 
                                                               From fair          from fair        Decrease 
                                                                   value              value          due to 
                                             Increase       attributable       attributable     to harvest/      As at 
                     As at 1     Foreign       due to        to physical           to price     transferred     31 Mar 
                    Oct 2018    exchange    purchases            changes            changes    to inventory       2019 
                    USD'000s    USD'000s     USD'000s           USD'000s           USD'000s        USD'000s   USD'000s 
 Standing Crops        2,066     (5,978)       12,740             30,425                  -        (19,572)     19,681 
 Feedlot cattle        3,247       (879)       13,087              6,218                  -        (19,276)      2,397 
 Dairy Cattle          3,771     (1,194)        4,010              3,700                725         (7,660)      3,352 
 Pigs                    344        (83)          454                 37                 23           (552)        223 
 Chickens              3,482     (1,122)       13,531              1,849                  -        (14,576)      3,164 
 Total                12,910     (9,256)       43,822             42,229                748        (61,636)     28,817 
                  ==========  ==========  ===========  =================  =================  ==============  ========= 
 
                   (b)           31 March 2019 

Biological assets comprise standing crops, feedlot cattle, dairy cattle, pigs and chickens. At 31 March 2019 there were 12,800 cattle (10,057 feedlot cattle and 2,743 dairy cattle), 880,335 chickens (576,988 layers and 303,347 broilers), and 5,026 pigs. A total of 18,372 feedlot cattle, 64 dairy cattle, 4,256 pigs and 3,627,322 chickens were culled during the period.

                   (i)            in Zambian Kwacha 
 
                                                                              Decrease 
                                          Gains arising   Gains arising         due to 
                                              from fair       from fair 
                               Increase           value           value       harvest/ 
                                           attributable    attributable 
                      As at      due to              to              to    transferred   As at 31 
                                               physical 
                 1 Oct 2018   purchases         changes   price changes   to inventory   Mar 2019 
                   ZMW'000s    ZMW'000s        ZMW'000s        ZMW'000s       ZMW'000s   ZMW'000s 
 Standing 
  Crops              42,419     184,328         182,500        (15,824)      (150,529)    242,894 
 Feedlot 
  cattle             56,750     163,937          64,877               -      (239,309)     46,255 
 Dairy Cattle        48,336      30,741          75,414               -      (108,248)     46,243 
 Pigs                 4,431       2,497           1,070              95        (3,712)      4,381 
 Chickens            29,738     111,069          85,446               -      (191,298)     34,955 
 Total              181,674     492,572         409,307        (15,729)      (693,096)    374,728 
                ===========  ==========  ==============  ==============  =============  ========= 
 
                   (ii)           in US Dollars 
 
                                                           Gains arising      Gains arising 
                                                               From fair          from fair        Decrease 
                                                                   value              value          due to 
                                             Increase       attributable       attributable     to harvest/      As at 
                     As at 1     Foreign       due to        to physical           to price     transferred     31 Mar 
                    Oct 2018    exchange    purchases            changes            changes    to inventory       2019 
                    USD'000s    USD'000s     USD'000s           USD'000s           USD'000s        USD'000s   USD'000s 
 Standing 
  Crops                3,466       (359)       15,464             15,310            (1,327)        (12,628)     19,926 
 Feedlot cattle        4,636          39       13,753              5,443                  -        (20,076)      3,795 
 Dairy Cattle          3,949          20        2,579              6,327                  -         (9,081)      3,794 
 Pigs                    362           2          209                 90                  7           (311)        359 
 Chickens              2,430           -        9,318              7,168                  -        (16,049)      2,867 
 Total                14,843       (298)       41,323             34,338            (1,320)        (58,145)     30,741 
                  ==========  ==========  ===========  =================  =================  ==============  ========= 
 
                   (c)            30 September 2019 

Biological assets comprise standing crops, feedlot and standing cattle, dairy cattle, pigs and chickens. At 30 September 2019 there were 12,335 cattle (9,229 feedlot cattle and 3,106 dairy cattle) and 900,349 chickens (587,815 layers and 312,534 broilers), and 5,014 pigs. A total of 43,711 feedlot cattle, 642 dairy cattle, 9,430 pigs and 7,997,076 chickens were culled during the year.

                   (i)            in Zambian Kwacha 
 
                                            Gains/(losses)                       Decrease 
                                                   arising   Gains arising         due to 
                                                 from fair       from fair 
                               Increase              value           value       harvest/ 
                                              attributable    attributable 
                    As at 1      due to                 to              to    transferred    As at 30 
                   Oct 2018   purchases   physical changes   price changes   to inventory   Sept 2019 
                   ZMW'000s    ZMW'000s           ZMW'000s        ZMW'000s       ZMW'000s    ZMW'000s 
 Standing Crops      42,419     384,077            178,652           6,097      (583,985)      27,260 
 Feedlot Cattle      56,750     312,626            158,018           2,019      (486,535)      42,878 
 Dairy Cattle        48,336      67,939            140,024               -      (206,532)      49,767 
 Pigs                 4,431      10,637              2,237             122       (12,872)       4,555 
 Chickens            29,738     297,042            134,586           2,046      (417,455)      45,957 
 Total              181,674   1,072,321            613,517          10,284    (1,707,379)     170,417 
                  =========  ==========  =================  ==============  =============  ========== 
 
                   (ii)           in US Dollars 
 
                                                     Gains/ (losses)      Gains arising 
                                                        arising from          from fair 
                                                          fair value              value          Decrease 
                    As at                 Increase      attributable       attributable    due to harvest 
                    1 Oct     Foreign       due to       to physical           to price     / transferred     As at 30 
                     2018    exchange    purchases           changes            changes      to inventory    Sept 2019 
                 USD'000s    USD'000s     USD'000s          USD'000s           USD'000s          USD'000s     USD'000s 
 Standing 
  Crops             3,466       (169)       31,175            14,501                495          (47,402)        2,066 
 Feedlot 
  Cattle            4,636       (263)       25,375            12,826                164          (39,491)        3,247 
 Dairy Cattle       3,949       (295)        5,515            11,366                  -          (16,764)        3,771 
 Pigs                 362        (27)          863               182                 10           (1,046)          344 
 Chickens           2,430       (265)       24,111            10,924                166          (33,884)        3,482 
 Total             14,843     (1,019)       87,039            49,799                835         (138,587)       12,910 
                =========  ==========  ===========  ================  =================  ================  =========== 
 
   10.           Cash and cash equivalents 
 
                         31 Mar 2020            31 Mar 2019            30 Sept 2019 
                    ---------------------  ---------------------  --------------------- 
                      ZMW'000s   USD'000s    ZMW'000s   USD'000s    ZMW'000s   USD'000s 
                    ----------  ---------  ----------  ---------  ----------  --------- 
 Cash in hand and 
  at bank               62,113      3,439      50,801      4,167      56,753      4,299 
 Bank overdrafts     (393,496)   (21,788)   (359,143)   (29,462)   (331,178)   (25,089) 
                     (331,383)   (18,349)   (308,342)   (25,295)   (274,425)   (20,790) 
                    ==========  =========  ==========  =========  ==========  ========= 
 
   (a)            Banking facilities 

The Group has overdraft facilities totalling ZMW153.3 million (2019: ZMW118.3 million) with Zanaco Bank Plc. The Zanaco Bank overdraft bears an interest rate of Bank of Zambia Policy rate plus 6 per cent on the Kwacha facility.

The Group has overdraft facilities totalling ZMW74.6 million (2019: ZMW74.6 million) and USD7.3 million (2019: USD5 million) with Citibank Zambia Limited. The Citibank overdrafts bear interest rates of Bank of Zambia Policy rate plus 0.25 per cent plus Liquidity Premium ( defined as 182 day Treasury Bill rate minus BPR) for the Kwacha facility and 3-month USD LIBOR rate plus 3.5 per cent for the USD facility.

The Group has overdraft facilities totalling ZMW57.5 million (2019: ZMW57.5 million) and USD2 million (2019: USD2 million) with Stanbic Bank Zambia Limited. The Stanbic Bank overdrafts bear interest rate of Bank of Zambia Policy rate plus 6 per cent on the Kwacha facility and 3-month USD LIBOR rate plus 4 per cent on the USD facility.

The Group has overdraft facilities totalling ZMW42 million (2019: ZMW30 million) and USD3 million (2019: USD2 million) with Standard Chartered Bank Zambia Plc. The Standard Chartered Bank overdrafts bear interest rates of Bank of Zambia Policy rate plus 6 per cent on the Kwacha facilities and 1-month USD LIBOR rate plus 4 per cent on the USD facilities.

                   (b)           Bank overdrafts 
 
                                    31 Mar 2020            31 Mar 2019            30 Sept 2019 
                               ---------------------  ---------------------  --------------------- 
                                 ZMW'000s   USD'000s    ZMW'000s   USD'000s    ZMW'000s   USD'000s 
 Bank overdrafts represented 
  by: 
 Zanaco Bank PLC                (111,475)    (6,172)    (96,826)    (7,943)   (114,029)    (8,638) 
 Citibank Zambia Limited        (133,840)    (7,411)   (132,800)   (10,894)   (119,071)    (9,021) 
 Stanbic Bank Zambia Limited     (67,162)    (3,719)    (79,961)    (6,560)    (69,060)    (5,232) 
 Standard Chartered Bank 
  Zambia PLC                     (81,019)    (4,486)    (49,556)    (4,065)    (29,018)    (2,198) 
                                (393,496)   (21,788)   (359,143)   (29,462)   (331,178)   (25,089) 
                               ==========  =========  ==========  =========  ==========  ========= 
 

(i) The Zambeef Products Plc Company bank overdrafts are secured by a first floating charge/ debenture over all the assets of the Company. The floating charge/ debenture ranks pari passu between Standard Chartered Bank Zambia Plc (USD5 million), Citibank Zambia Limited (USD16.3 million and ZMW8 million), Zanaco Bank Plc (ZMW185 million), and Stanbic Bank Zambia Limited (ZMW132 million).

All overdrafts are annual revolving facilities.

   11.           Interest bearing liabilities 
 
                                          31 Mar 2020                31 Mar 2019                30 Sept 2019 
                                     ZMW'000s    USD'000s      ZMW'000s       USD'000s      ZMW'000s     USD'000s 
                                    ----------  ----------  --------------  ------------  -----------  ----------- 
 
 DEG - Deutsche Investitions 
  und Entwicklungsgesellschaft 
  MBH (note (a))                       234,960      13,010         206,376        16,930      197,604       14,970 
 Zanaco Bank Plc (note (b))              6,646         368          13,286         1,090       13,286        1,006 
 International Finance Corporation 
  (note (d))                           127,365       7,052         131,457        10,784      118,870        9,006 
 Standard Chartered Bank Zambia 
  PLC (note ( c)                       227,983      12,624         176,159        14,451      212,381       16,089 
 Stanbic Bank Zambia Limited            29,000       1,606               -             -       29,000        2,197 
                                       625,954      34,660         527,278        43,255      571,141       43,268 
 Less: short-term portion 
  (repayable 
  within next 12 months)             (391,108)    (21,656)       (271,072)      (22,237)    (343,042)     (25,988) 
 Long-term portion (repayable 
  after 12 months)                     234,846      13,004         256,206        21,018      228,099       17,280 
 
 
   (a)        (i)        DEG Term Loan 3 

The Group has a loan facility of USD4.26 million (2019: USD:5.68 million and original amount of USD10 million) from DEG. Interest on the loan is 4.25 per cent. above the 6-month USD LIBOR rate per annum payable 6 monthly in arrears. The capital is repayable in 14 biannual instalments of USD710,000 commencing May 2016 and expiring in November 2022.

The DEG term loan 3 is secured by a legal mortgage over Farm no. 4450, 4451 and 5388 (Mpongwe Farm) ranking pari passu with IFC.

   (ii)       DEG Term Loan 4 

The Group has a loan facility of USD8.75 million (2019: USD:11.25 million and original amount of USD15 million) from DEG. Interest on the loan is 5.75 per cent. above the 6-month USD LIBOR rate per annum payable quarterly in arrears. The capital is repayable in 12 quarterly instalments of USD1,250,000 commencing March 2018 and expiring in March 2023.

The DEG term loan 4 is secured by a legal mortgage over Farm no. 4450, 4451 and 5388 (Mpongwe Farm) ranking pari passu with IFC.

   (b)           Zanaco Bank Plc 

The Group has a loan facility of ZMW6.64 million (2019: ZMW13.3 million) with Zanaco Bank Plc. Interest on the loan is 6 per cent above the Bank of Zambia policy rate per annum payable monthly in arrears. The principal is repayable in 7 annual instalments of ZMW6,642,857 commencing December 2014 and expiring in December 2020.

The loan is secured by a first ranking legal mortgage over Stand No. 4970, Industrial Area, Lusaka (Head Office).

   (c)            Standard Chartered Bank Zambia Plc 

The Group has structured agricultural facilities with an annual revolving limit totalling USD18 million (2020: USD20 million) with Standard Chartered Bank Zambia Plc. The purpose of the facility is the financing of wheat, soya beans, and maize under Collateral Management Agreements/Facilities Against Warehouse Receipts and is for 270 days. The balance on the facilities at period end was USD12.6 million (2019: USD14.5 million). Interest on the facility is 3-month USD LIBOR rate plus 3.25 per cent per annum, calculated on the daily overdrawn balances.

   (d)           International Finance Corporation Loan 
                   (i)           International Finance Corporation Loan 2 

The company has a loan facility of USD6.2 million and ZMW15.4 million (2019: USD8.96 million and ZMW22.2 million and original amount of USD20 million and ZMW49.6 million). Interest on the loan is 4.75 per cent. above the 6-month USD LIBOR rate per annum for the USD facility and 4.45 per cent above the 91-day Treasury Bill rate plus a variable swap margin for the Kwacha facility payable quarterly in arrears. The principal is repayable in 29 equal quarterly instalments of USD689,655 and ZMW1,710,345 commencing June 2015 and expiring in June 2022.

The loan is secured by a legal mortgage over Farm no. 4450,4451 and 5388 ( Mpongwe Farm) ranking pari passu wth DEG.

   12.           Leasing 

Lease liabilities are presented in the statement of financial position within borrowings as follows:

 
                31 March 2020   31 March 2019   30 September 2019 
                      ZMW'000         ZMW'000             ZMW'000 
 Current               24,701          11,111              21,487 
               --------------  --------------  ------------------ 
 Non-current           19,741          19,530              19,297 
               --------------  --------------  ------------------ 
                       44,442          30,641              40,784 
               --------------  --------------  ------------------ 
 

The Group has leases for K44,442 thousand. The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 March 2020 were as follows:

 
                                        Minimum lease payments due 
                      Within                                                      After 
                      1 year   1-2 years   2-3 years   3-4 years   4-5 years    5 years      Total 
                     ZMW'000     ZMW'000     ZMW'000     ZMW'000     ZMW'000    ZMW'000    ZMW'000 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 31 March 
  2020 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Lease payments       25,299      10,653       6,072       4,048           -          -     46,072 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Finance charges       (598)       (535)       (298)       (199)           -          -    (1,630) 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Net present 
  values              24,701      10,118       5,774       3,849           -          -     44,442 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 
 31 March 
  2019 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Lease payments       11,386      10,270       6,162       4,108           -          -     31,926 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Finance charges       (275)       (584)       (266)       (160)           -          -    (1,285) 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Net present 
  values              11,111       9,686       5,896       3,948           -          -     30,641 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 
 30 September 
  2019 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Lease payments       22,018       9,148       7,089       4,059           -          -     42,313 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Finance charges       (531)       (450)       (348)       (200)           -          -    (1,529) 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 Net present 
  values              21,487       8,698       6,741       3,859           -          -     40,784 
                   ---------  ----------  ----------  ----------  ----------  ---------  --------- 
 
 
 Leasing                        31 March 2020             31 March 2019       30 September 2019 
                                      USD'000                   USD'000                 USD'000 
               ------------------------------  ------------------------  ---------------------- 
 Current                                1,368                       911                   1,628 
               ------------------------------  ------------------------  ---------------------- 
 Non-Current                            1,093                     1,602                   1,462 
               ------------------------------  ------------------------  ---------------------- 
 Total                                  2,461                     2,513                   3,090 
               ------------------------------  ------------------------  ---------------------- 
 
 
 Minimum lease payments 
                        Within                                                                                                      After 
                        1 year              1-2 years                2-3 years       3-4 years          4-5years                  5 years          Total 
                       USD'000                USD'000                  USD'000         USD'000           USD'000                  USD'000        USD'000 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 31 March 
 2020 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Lease 
  payments               1,401                    590                      337             224                 -                        -          2,551 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Finance 
  charges                 (33)                   (30)                     (17)            (11)                 -                        -           (90) 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Net 
  Present 
  Values                 1,368                    560                      320             213                 -                        -          2,461 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 
 31 March 
 2019 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Lease 
  payments                 933                    842                      505             337                 -                                   2,617 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Finance 
  charges                 (22)                   (48)                     (22)            (12)                 -                        -          (104) 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Net 
  Present 
  Values                   911                    794                      483             325                 -                        -          2,513 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 
 30 
 September 
 2019 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Lease 
  payments               1,668                    693                      537             308                 -                        -          3,206 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Finance 
  charges                 (40)                   (34)                     (26)            (16)                 -                        -          (116) 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 Net 
  Present 
  Values                 1,628                    659                      511             292                 -                        -          3,090 
-----------                     ---------------------                           --------------                    -----------------------  ------------- 
 

Lease payments not recognised as a liability

The group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred.

The expense relating to payments not included in the measurement of the lease liability is as follows

 
                               31 March 2020   31 March 2020 
                                     ZMW'000         USD'000 
 Short-term leases                     8,718             627 
                              --------------  -------------- 
 Leases of low value assets                -               - 
                              --------------  -------------- 
 Variable lease payments                   -               - 
                              --------------  -------------- 
                                       8,718             627 
                              --------------  -------------- 
 

Included in the finance cost of K48,241,000 (US$3,468,000) is interest expense for leasing arrangements amounting to K86,000 (US$6,000).

   13.           Contingent liabilities 

Certain legal cases are pending against the Company in the Courts of Law. In the opinion of the Directors, and the Company lawyers, none of these cases will result in any material loss to the Company for which a provision is required.

   14.           Fair value measurement 

Fair value measurement of financial instruments

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

   --      Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities 

-- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

   --      Level 3: unobservable inputs for the asset or liability. 

The following table shows the Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis at 31 March 2020 and 30 September 2019.

 
                          Level 1    Level 2    Level 3     Total 
   31 March 2020           ZMW'000    ZMW'000    ZMW'000    ZMW'000 
 Financial Assets 
 Trade receivables           -          -       10,083     10,083 
 Total Assets                -          -       10,083     10,083 
 
 Financial Liabilities 
 US-dollar loans             -      (346,933)      -      (346,933) 
 Total Liabilities           -      (346,933)      -      (346,933) 
 
 Net fair value              -      (346,933)   10,083    (336,850) 
 
 
                          Level 1    Level 2    Level 3     Total 
   30 September 2019       ZMW'000    ZMW'000    ZMW'000    ZMW'000 
 Financial Assets 
Trade receivables            -          -       88,874     88,874 
 Total Assets                -          -       88,874     88,874 
 
 Financial Liabilities 
 US-dollar loans             -      (297,660)      -      (297,660) 
 Total Liabilities           -      (297,669)      -      (297,660) 
 
 Net fair value              -      (297,660)   88,874    (208,786) 
 
 
 31 March 2020            Level 1    Level 2    Level 3     Total 
                           USD'000    USD'000    USD'000    USD'000 
 Financial Assets 
 Trade receivables           -          -         558        558 
 Total Assets                -          -         558        558 
 
 Financial Liabilities 
 US-dollar loans             -      (19,210)       -      (19,210) 
 Total Liabilities           -      (19,210)       -      (19,210) 
 
 Net fair value              -      (19,210)      558     (18,652) 
 
 
                           Level 1    Level 2    Level 3      Total 
   30 September 2019       USD'000    USD'000    USD'000    USD'000 
 Financial Assets 
 Trade receivables               -          -      4,413      4,413 
 Total Assets                    -          -      4,413      4,413 
 
 Financial Liabilities 
 US-dollar loans                 -   (22,550)          -   (22,550) 
 Total Liabilities               -   (22,550)          -   (22,550) 
 
 Net fair value                  -   (22,550)      4,413   (18,137) 
 

There were no transfers between Level 1 and Level 2 in 2020 or 2019.

Measurement of fair value of financial instruments

The Group's finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values, in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based on the characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance team reports directly to the acting Chief Financial Officer (CFO) and to the audit committee.

Valuation processes and fair value changes are discussed among the audit committee and the valuation team at least every year, in line with the Group's reporting dates. The valuation techniques used for instruments categorised in Levels 2 and 3 are described below:

Foreign currency forward contracts (Level 2)

The Group's foreign currency forward contracts are not traded in active markets. These have been fair valued using observable forward exchange rates and interest rates corresponding to the maturity of the contract. The effects of non-observable inputs are not significant for foreign currency forward contracts.

US-dollar loans (Level 2)

The fair values of the US-dollar loans are estimated using a discounted cash flow approach, which discounts the contractual cash flows using discount rates derived from observable market interest rates of similar loans with similar risk. The interest rate used for this calculation is 4.81% (2018: 4.81%).

Contingent consideration (Level 3)

The group did not have any contingent consideration during the year.

Fair value measurement of non-financial assets

The following table shows the Levels within the hierarchy of non-financial assets measured at fair value on a recurring basis at 31 March 2020 and 30 September 2019.

 
                               Level 1    Level 2    Level 3      Total 
   31 March 2020               ZMW'000    ZMW'000    ZMW'000    ZMW'000 
 Property, plant and 
  equipment: 
 Land held for production 
  in Zambia                          -  1,481,369          -  1,481,369 
 Office building in Zambia           -     49,491          -     49,491 
 
                               Level 1    Level 2    Level 3      Total 
   30 September 2019           ZMW'000    ZMW'000    ZMW'000    ZMW'000 
 Property, plant and 
  equipment: 
 Land held for production 
  in Zambia                          -  1,166,494          -  1,166,494 
 Office building in Zambia           -     48,856          -     48,856 
 
                                                     Level 3      Total 
   31 March 2020                                     USD'000    USD'000 
 Property, plant and 
  equipment: 
 Land held for production 
  in Zambia                          -     82,025          -     82,025 
 Office building in Zambia           -      2,740          -      2,740 
 
                               Level 1    Level 2    Level 1    Level 2 
   30 September 2019           USD'000    USD'000    USD'000    USD'000 
 Property, plant and 
  equipment: 
 Land held for production 
  in Zambia                          -     88,371          -     88,371 
 Office building in Zambia           -      3,701          -      3,701 
 
 

Fair value of the Group's main property assets is estimated based on appraisals performed by independent, professionally-qualified property valuers, Fairworld Properties Limited. The significant inputs and assumptions are developed in close consultation with management. The valuation processes and fair value changes are reviewed by the Board of Directors and audit committee at each reporting date.

Further information is set out below.

Land held for production in Zambia (Level 2)

Land has been valued using the direct comparison method. This method has been adopted as the most appropriate for the purpose of this valuation as there are enough comparisons available on the open market for land. The land was revalued on 30 September 2017.

The significant unobservable input is the adjustment for factors specific to the land in question. The extent and direction of this adjustment depends on the number and characteristics of the observable market transactions in similar properties that are used as the starting point for valuation. Although this input is a subjective judgement, management considers that the overall valuation would not be materially affected by reasonably possible alternative assumptions.

The fair values of the office buildings are estimated by using the direct comparison method. This method has been adopted as the most appropriate for the purpose of this valuation as there are enough comparisons available on the open market for buildings.

Level 3 fair value measurement

The Group did not have any financial instruments classified within level 3 (30 September 2019: ZMW nil: 31 March 2019: ZMW nil) therefore no reconciliation of balances is required.

   15.           Assets held for sale 

During the previous period management decided to sell Sinazongwe Farm. As such the assets and liabilities of Sinazongwe were disclosed in accordance with IFRS 5. A sale and purchase agreement was signed during the previous period.

The income generated by assets held for sale was as follows:

 
                                 March          March     March     March  Sept 2019  Sept 2019 
                          2020 ZMW'000   2020 USD'000      2019      2019    ZMW'000    USD'000 
                                                        ZMW'000   USD'000 
Revenue                         15,262          1,097         -         -     41,003      3,328 
Cost of sales                 (12,411)          (892)         -         -   (34,307)    (2,785) 
Administration 
 costs                         (8,811)          (633)         -         -   (18,933)    (1,537) 
Operating loss                 (5,960)          (428)         -         -   (12,237)      (994) 
Depreciation                   (3,463)          (249)         -         -    (5,142)      (417) 
Loss from discontinued 
 operations before 
 tax                           (9,423)          (677)         -         -   (17,379)    (1,411) 
Tax (expense)/credit                 -              -         -         -          -          - 
Loss for the period              9,423          (677)         -         -   (17,379)    (1,411) 
 

The assets and liabilities of the unit held for sale are as follows:

 
                                    March          March     March     March  Sept 2019  Sept 2019 
                             2020 ZMW'000   2020 USD'000      2019      2019    ZMW'000    USD'000 
                                                           ZMW'000   USD'000 
Property, plant 
 and equipment                    131,857          7,301         -         -    135,357     10,254 
Plantation development                  -              -         -         -          -          - 
 expenditure 
Biological assets                       -              -         -         -          -          - 
Total non-current 
 assets                           131,857          7,301         -         -    135,357     10,254 
                                                                                      -          - 
Inventories                             -              -         -         -          -          - 
Trade and other                         -              -         -         -          -          - 
 receivables 
Cash and cash equivalents               -              -         -         -          -          - 
Total current assets                    -              -         -         -          -          - 
Assets classified                       -              -         -         -          -          - 
 as held for sale 
 
Interest bearing                        -              -         -         - 
 liabilities                                                                          -          - 
Deferred liability                      -              -         -         -          -          - 
Deferred income                         -              -         -         - 
 tax                                                                                  -          - 
Total non-current                       -              -         -         - 
 liabilities                                                                          -          - 
 
Trade and other                         -              -         -         - 
 payables                                                                             -          - 
Total current liabilities               -              -         -         -          -          - 
Liabilities classified                  -              -         -         -          -          - 
 as held for sale 
 

The cash flow effects of the unit held for sale are as follows:

 
                                March  March 2020     March     March  Sept 2019  Sept 2019 
                         2020 ZMW'000     USD'000      2019      2019    ZMW'000    USD'000 
                                                    ZMW'000   USD'000 
 
Cash inflow from 
 operating activities         (9,423)       (677)         -         -   (17,349)    (1,411) 
 
   16.           Events subsequent to reporting date 

The divestment of Sinazongwe Farm to Chenguang Biotech (Zambia) Agri-Dev Limited for a total consideration of USD 10 million was finalised in April 2020.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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June 17, 2020 02:00 ET (06:00 GMT)

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