Zambia Sugar : Annual Reports 2022

ZAMBIA SUGAR PLC .

2	ANNUAL REPORT 202 2	ZAMBIA SUGAR PLC .

2022 FINANCIAL PERFORMANCE HIGHLIGHTS:

REVENUE		OPERATING PROFIT		PROFIT AFTER TAX
K 5 112		K 1 242		K 1 005
MILLION		MILLION		MILLION
2021: K 4 989 million		2021: K 1 615 million		2021: K 1 086 million
EARNINGS PER SHARE		DIVIDEND PER SHARE		SALES
		382 337 TONNES
317.5 ngwee		94.4 ngwee
		EXPORT 106 266 TONNES
				DOMESTIC 276 071 TONNES &
2021: 343 ngwee		2021: 85.5 ngwee		2021: 413 000 TONNES
				DOMESTIC 263 000 TONNES &
				EXPORT 150 000 TONNES

PRODUCTION		CANE SUGAR RATIO
385 164 TONNES		8.24
2021: 397 000 TONNES		2021: 8.1

CONTENTS

2022 in Review
- Chairman's Statement		04
- Country Managing Director's Statement		07
At a Glance - Zambia Sugar Plc			10
About Zambia Sugar		12
Strategy			16
Value Added Statement					42
Board of Directors							44
Executive Management Committee				48
Corporate Governance				50
Annual Financial Statements				56
Five Year Review					127
Notice of 61st Annual General Meeting				130
Minutes of the 60th Annual General Meeting			132
Form of Proxy			133

CANE SUPPLY

3 169 374 TONNES

2021: 3 216 000 TONNES

ZAMBIA SUGAR PLC .	ANNUAL REPORT 2022	3

CHAIRMAN'S STATEMENT

Dear Shareholders,

The Board continued to work with Management to create a safe, healthy and respectful workplace, a beautiful estate, and to be the best at serving customers. During the year under review, the impact of COVID-19 on the business was successfully contained and steps were taken to develop a robust ESG agenda which will be translated into concrete projects in the years ahead.

RESULTS

The Managing Director's Statement and Annual Financial Statements will provide details of health and safety, operational and financial performance, highlights of which include:

• Reduction in lost time injuries and zero fatalities
• Successful containment of the COVID-19 pandemic which saw over 98% vaccination of employees and their dependents

• Strong operational performance in Agriculture, Factory, and Logistics operations
• Record domestic sales for the second year running
• Stellar financial performance similar to the previous year
• Alignment on three strategic objectives focused on customer centricity and route to consumer, maximum capacity utilization and achieving power self-sufficiency.

I am proud of the performance of the Company given that it was delivered in a year which presented numerous challenges in both the operational and economic environments. I especially wish to congratulate the staff for their fortitude during the period under review. It is because of their actions that the Company delivered another strong performance despite the challenging business environment.

The Company is pursuing the safety vision of "Zero Harm to employees" with commitment and energy and will continue to support efforts to improve health and safety in the workplace. There are clear plans to achieve sustainable operational, commercial and financial objectives which should continue to create value for shareholders. The Company is committed to creating shared value working with

all stakeholders including employees, contractors, suppliers, growers, local communities, and Government.

ECONOMIC OVERVIEW

The country had single digit inflation, and Gross Domestic Product (GDP) for the year grew by 3.2% relative to the previous year. The Kwacha appreciated during the year driven by portfolio inflows on the back of positive investor sentiment related to the change in economic management by the new Government and the approval of the IMF funded

4	ANNUAL REPORT 2022	ZAMBIA SUGAR PLC .

programme. The country's international reserves increased to $3 billion representing 3.7 months of import cover.

Although the copper price declined from the relative highs of $9 500 to just above $7 700 per tonne, the country continues to grow its output despite restrictions due to of the COVID-19 pandemic. The government has made mining royalties tax deductible in a drive to see the industry more than double production by 2030. The spin offs from the mining industry will no doubt positively contribute to demand for sugar from consumers employed in this sector.

Positive sentiments surround the energy sector with the Government's commitment to resolving the challenges of this sector in order to support the growth of private sector investment. Zambia is now in a position to generate more electricity than its economy demands. The Minister of Finance's budget speech presents even further confidence to investors given reference to financing of the Zambia-Tanzania- Kenya interconnector. Zambia Sugar will continue to pay particular interest in this area which is key to the Company's vision.

CREATING SHARED VALUE

The Company recorded good results in the strategic objective of local supplier development with a deliberate focus on local sourcing and promoting thriving local communities. The Company increased its procurement of local packaging working with a Zambian Company and further invested in supporting suppliers based in the Community where we operate.

The Government Policy of free education has created an enhanced focus on support to schools not only within the area where we operate but across the country. With the growing number of pupils geared to begin enrolling in schools, the Company will continue to forge partnerships with local schools to enable the infrastructure to support the growing needs of the community. The Company is convinced

ZAMBIA SUGAR PLC .	ANNUAL REPORT 2022	5