Securities and Exchange Commission2012/2013 ANNUAL REPORT 03 THE CURRENT SEC MANAGEMENT. OVERVIEW On 13th September 2012, Zambia saw the successful issue of the inaugural 10 year Sovereign

Securities andExchange

Commission

2012 / 2013Annual Report

Annual Report

Securities andExchange CommissionPlot 3827 Parliament RoadOlympia, LusakaZAMBIA

P O Box 35165 Lusaka ZAMBIA

Telephone: +260 211-227012/226386/222369/222368Fax: +260 211 225443E-mail: [email protected]: seczambia.org.zm

TABLE OF CONTENTS

THE SEC COMMISSIONERS ------------------------2

THE SEC MANAGEMENT-----------------------------3

CHAIRMAN’S REVIEW---------------------------------4

CHIEF EXECUTIVE’S STATEMENT ---------------7

LICENSING ACTIVITIES

Dealer’s Licence-------------------------------19

Investment Advisor’s Licence --------------20

Dealer’s Representative Licence----------21

Investment Advisor’s

Representative Licence----------------------23

Collective Investment Schemes -----------24

Securities and Exchange Commission --24

TRAINING FOR MARKET PLAYERS AND

WORKSHOPS

The AMERC Meeting

----------------------------------

25

Multinational and Regional Conferences

and Summits attended by

Commission Staff -----------------------------25

FINANCIAL STATEMENTS--------------------------26

APPENDICES

SEC Commissioners

----------------------------------

52

SEC Staff

----------------------------------

52

SEC Committee Members ---------------------------53

SEC Organisation Chart ------------------------------54

Stock Exchange Details-------------------------------55

Dealers

----------------------------------

56

Investment Advisors

----------------------------------

60

Listed Companies

----------------------------------

61

Quoted Companies

----------------------------------

65

Companies with Listed Debt Securities -----------67

Companies with Quoted Debt Securities ---------67

MISSION STATEMENT

of the

Securities and Exchange Commission Zambia:

To have Zambian Capital Markets that promote

a safe and secure environment for Issuers to

raise Capital while protecting investors and

providing for transparent and secure trading,

clearing and settlement.

SECURITIES AND EXCHANGECOMMISSION

Secretary and Chief Executive:

Plot 3827 Parliament Road

Olympia

Telephone: +260 211 226911 (direct)

P O Box 35165

Lusaka

ZAMBIA

Telephone: +260 211-

227012/226386/222369/222368

Fax: +260 211 225443

E-mail: [email protected]

Website: www.seczambia.org.zm

ANNUAL REPORT

2012/2013

01

George MubipeChairman

Commissioners

Joe H. Simachela Ben Zulu

Dr Jonathan Chipili Gloria Munkombwe

Amos SiwilaVice-Chairman

02

THE CURRENT SEC COMMISSIONERS

Dr E.D. Wala ChabalaSecretary & Chief Executive

Major Constantine HaraDirector – Enforcement and Legal Affairs

Queen ShachileManager – Corporate Services

Mayford ChikoyaManager – Finance

Bruce MulengaManager – Market Transactions

Phillip ChitaluDirector – Market Transactions and Investments

Mutumboi MundiaDirector – Market Supervision and Development

Kennedy BwalyaManager – Market Supervision

2012/2013 ANNUAL REPORT

03

THE CURRENT SEC MANAGEMENT

OVERVIEW

On 13th September 2012, Zambia saw the successful issue of the inaugural 10

year Sovereign bond of US$750 million, at the most favorable price ever secured

(5.625%) in Sub-Saharan Africa for a first issue. This debut bond strengthened

on its first day of official trading becoming sub-Saharan Africa’s most successful

bond launch with bids worth 24 times the amount on offer.

Zambia’s economy extended its momentum in 2012. The growth was driven by expansion in agriculture,

construction, manufacturing, transport and financial services.

For the period under review, the Zambian market saw a number of developments.

In May 2012, the Ministry of Finance introduced a Statutory Instrument, SI 33, which prohibits the use of

foreign currency in domestic transactions. This measure is intended to strengthen the Zambian Kwacha as

the legal tender for goods and services in Zambia.

In the same light, on 1st January 2013, the Zambian currency was rebased and a new currency symbol

ZMW was adopted. The intention of this significant measure was to recognize and reflect the effect of several

years of continued improvement in the macroeconomic environment as evidenced by declining inflation rates

to single digits, among other factors.

These above developments would most certainly have enhanced the visibility of Zambia on the horizon of

many investors.

Despite the positive attributes, the Zambian Capital Markets remain relatively small, unsophisticated and

are still facing challenges. The Commission has been working tirelessly to ensure that the Zambian Capital

Markets play a more a significant role in the Zambian economy, and eventually the region and internationally.

It is to that effect, the theme for this annual report for the period 1st April 2012 to 31st March 2013 could

aptly be coined as “Capital Markets, an effective avenue for investing in Zambia.” It implies recognition of

SEC’s positive strides of ensuring Zambian Capital Markets play the role that they are supposed to in the

economy of Zambia.

CAPITAL MARKETS PERFORMANCE

The market capitalization was on a rebound during the year under review. The market capitalization as at

1st April 2012 totalled ZMW 46,438 compared to ZMW 52,231 as at 31st March 2013, a twelve percent

increase.

The financial period under review (1st April 2012 to 31st March 2013), was an excellent year to the Zambian

bond markets especially with the successful issuance of the inaugural 10 year Sovereign bond, a clear

reflection of high confidence that the international investor community has in Zambia as a safe and preferred

place to invest.

The period under review certainly posed its own challenges, both domestic and foreign. For instance, the

stock market liquidity remained subdued (worsened by low floats available for trading), and the number of

listed securities remain relatively small.

GeorgeMubipe

Chairman

04

CHAIRMAN’S REVIEW

In the Capital Markets, we were pleased by the market being able to perform its primary function of beinga

source of capital. The series of actions embarked upon by the Commission during the year under review

were aimed at further strengthening the role that Capital Markets have to play in the Zambian economy while

seeking to improve their efficiency, effectiveness and transparency.

THE COMMISSION

The aims of the Commission’s strategy were to ensure the Capital Markets, being a source of financing for

business expansion, were better able to meet the needs of Zambia’s growing economy. With regards to the

Strategic Plan, the SEC performance was on track as highlighted below:

Firstly, the Commission for the period under review, embarked on beefing up its institutional capacity as a

foundation for the transformation of the Capital Market. Consequently, a new organizational structure has

been implemented.

Secondly, the Commission ensured that the Capital Markets played a more significant role in the Zambian

economy, regionally and internationally. In its quest to increase awareness and participation in the Zambian

Capital Markets, the Commission proactively engaged and educated potential issuers, professional bodies,

the media, and various political leaders on the merits of Capital Markets.

Thirdly, the Commission ensured that there was efficient and effective supervision of the Zambian Capital

Markets. Intensified random inspections of licensees were undertaken in addition to monitorings done

throughout the period under review, thereby ensuring that issues raised during inspections were reverted

to and addressed. The Commission has also seen timely enforcement of actions to ensure strict adherence

to license conditions.

Further, the Commission also adopted a more risk based approach to regulation characterized by tailored

supervision, more effective enforcement and the use of appropriate incentives to promote a high level of

regulatory compliance.

Finally, the Commission also played its part in ensuring that transactions in the markets were both efficient

and effective. It did so by coming up with guidelines and parameters that constrained suspicious transactions

in the Market.

OUTLOOK

The period under review was an extremely busy period for the Commission as it began implementing the

2012-2015 Strategic Plan objectives and tasks.

Going forward, the Commission has the following planned activities:

To further instill Capital Markets appreciation and awareness, the Commission has embarked on a drive to

identify government owned entities with potential for utilizing the Capital Markets for capital raising. The

Commission is committed to getting at least one government owned entity listed on the Lusaka Stock

Exchange and/or raise debt fundings through the Capital Markets and as alternatives to Government funding

support in its various forms.


05

CHAIRMAN’S REVIEW (continued)

It is a well known fact that the Zambian Capital Markets are still illiquid. It is for this reason that the Commission

seeks to develop policy framework and promote adherence to listing rules to improve trading of stocks. The

Commission also seeks to implement conditions, infrastructure and policy framework to enhance secondary

trading of bonds. Further, the Commission has positioned itself to encourage multi-lateral bodies to issue

local currency denominated securities in the Zambian Capital Markets to fund various projects in Zambia.

When it comes to the development of new Capital Markets products and securities, the Commission seeks

to undertake studies and develop policy frameworks for infrastructure bonds. The Commission also intends

to look into introducing Sharia compliant products on one hand, while on the other hand seeks to have more

efficient tax treatment of investments in property.

The Commission going forward is also looking at promoting the migration of transactions from off market

(OTC) to exchanges. The idea is to establish guidelines and parameters that would constrain and/or incentivize

traders in the Market to use exchanges, so that transactions are monitored and regulated.

CONCLUSION

In concluding, I would like to extend my sincere thanks to the Members of the Commission for their continued

service over the period under review. Their input was most valued particularly spanning the strategy

development process and subsequently its implementation.

Finally, I must record my heartfelt appreciation to the staff of the Commission who remained devoted to their

work, during the period under review, especially in the first year of rolling-out the 2012-2015 Strategic Plan.

I thank them for their professionalism, dedication and support.

George Mubipe

CHAIRMAN

06

CHAIRMAN’S REVIEW (continued)

Market Cap K Million

The market capitalization in Kwacha terms rose from ZMW 46,438 as at 1st April 2012 to ZMW 52,231 as

at 31st March 2013, representing a 12% increase. This increase was due to price gains on various counters.

Market Cap USD

In USD terms, the market capitalization of LuSE increased by 11% from U$ 8,656 million at 1st April 2012

to U$ 9,566 million as at 31st March 2013. Despite the depreciation of the Kwacha by 10% between 1st April

2012 (ZMW 5.37) and 31st March 2013 (ZMW 5.46), the increase in the market capitalization in USD was

due to the increase in market capitalization in Kwacha terms.

In comparison, Malawi Stock Exchange market capitalization declined by 54% from U$ 1.4 billion as at 1st

April 2012 to U$ 652 million as at 31st March 2013 due to the depreciation of the Malawian Kwacha by 146%.

The Nairobi Stock Exchange market capitalization on the other hand, increased by 17% from U$15 billion

on 1st April 2012 to U$18 billion on 31st March 2013.

Dr E D WalaChabala

Secretary &CEO

PERFORMANCE OF THE CAPITAL MARKETS

The Lusaka Stock Exchange (LuSE) All Share Index (ASI) closed the year at

4,166 points indicating a 6% increase compared to preceding period that ended

which closed at 3,926. The increase in the ASI was mainly due to price increases

in share prices notably in Investrust Bank Plc (1488%), Standard Chartered Bank

Plc (112.1%), Zambeef (106.4%) and National Breweries (100%).

In contrast to other similar markets, for the same period, the Malawi All Share Index recorded a positive

increase of 5.47%, while Nairobi Stock Exchange All Share Index recorded an increase of 20%.

Source: Lusaka Stock Exchange Limited

31/3/2013 01/4/2012 percentage

change

LuSE All Share Index 4,166 3,926 6% 5

Market Cap K Million 52,231 46,438 12% 5

Market Cap USD Million 9,566 8,656 11% 5

Trading Turnover (Equities) K Million 214,353 856,413 75% 6

Volume of Shares Traded in millions 2,086 1,032 102% 5

Number of Trades 5,684 6,662 15% 6

Number of Listed Companies 21 21 -

Number of Quoted Companies 9 9 -

Market Capitalization/GDP Ratio (%) 47 60 22% 6

Trading Turnover (Debt Securities) K Million 1,962,227 1,245,721 58% 5

Number of Trades (Debt Securities) 191 95 101% 5

Number of Listed Debt Security Instruments 4 4 -

Number of Quoted Debt Security Instruments - - -

Number of Collective Investment Schemes 6 6 -

Number of Brokers 6 6 -


CHIEF EXECUTIVE’S STATEMENT

07

Trading turnover

The Market turnover for the period under review dropped by 75% from ZMW 856,413 as at 1st April 2012

to ZMW 214,353 as at 31st March 2013. The 2012/2013 turnover was significantly lower because of the

Arcades and Farmers’ House merger which boosted 2011/2012 trading turnover. In addition, the relative

attractiveness of the return on fixed interest securities compared to equity also contributed to the low turnover.

Among the notable contribution to the overall turnover include Puma Energy 29%, Zambeef 16%, Zambia

Sugar 12% and Copperbelt Energy 10%.

Volume of Trades in millions/Number of trades

The volume of shares transacted increased from 1,032,000,000 shares as at 1st April 2012 to 2,081,505,977

as 31st March 2013, representing 102% increase. The second quarter of the financial year had the highest

number of shares transacted amounting to 887,383,399 shares, of which Standard Chartered shares

accounted for 776,238,912 shares. However, the number of trades declined by 15% from 6,662 as 1st April

2012 to 5,684 as at 31st March 2013.

The Malawi Stock Exchange transacted 2,702,172,588 shares for the period under review, which was 161%

more than the Zambian market, despite a cover trading turnover.

Listed and quoted companies

There was no increase in the number of listed and quoted companies as at 31st March 2013.

Malawi Stock Exchange and Nairobi Stock Exchange as at 31st March 2013 had 14 and 60 listed companies

respectively.

Market Capitalization/GDP Ratio (%)

The Market Capitalization/GDP Ratio declined by 22% from 60 as at 1st April 2012 to 47 as at 31st March

2013. The decline is attributed to the fact that the GDP grew faster at a rate of 19% (in kwacha terms) than

the market capitalization which grew at a 7% rate, hence, resulting in a decline in the Market Capitalization

/GDP ratio. The GDP grew from ZMW 93,344.4 million as at December 2011 to ZMW 111,049.4 million as

at December 2012.

Malawi Stock Exchange had Market Capitalization/GDP ratio of 19% for the same period.

Trading Turnover (Debt Securities) K Million

The trading turnover increased by 58% from 1,245,721 as 1st April 2012 to 1,962,227 as at 31st March 2013.

Similarly, the number of trades increased by 101% from 95 in the previous period to 191 trades.

FINANCIAL PERFORMANCE

The review period ending 31st March 2013 recorded operating deficit of ZMW 1,469 million with a combined

income of ZMW 6,417 million against operating costs of ZMW 7,887 million. Compared to the previous

period, there was a 72.23% decrease in the operating surplus (from ZMW 2,182 million) and a decrease

08

CHIEF EXECUTIVE’S STATEMENT (continued)

in income of 6% (from ZMW 5,853 million).

The Commission’s Accumulated Fund position at the end of the period, stood at negative ZMW 52 million

in contrast to that of ZMW 1,417 million in the previous period. The diagram below shows net assets position

over a trend of five years.

Net assets

2000

1500

1000

500

0

-500

-1000

-1500

-2000

2008 2009 2010 2011 2012 2013

Income earned

GRZ Grant

Registration Fees

LuSE Trade Commissions

Authorisation Fees

Licensing Fees

Issuers Fees

Inspection Fees

Sundry Income

64%10%

8%

7%

5%

3%


09


During the year ended 31st March 2013, GRZ grant(s) accounted for 64% of the Commission’s income while

36% was income sourced from the Commission’s own operations. The previous Financial Year had 39%

of Commission’s income from GRZ grants while 61% was sourced from the Commission’s operations.

The Commission earned 8% of its income from LuSE trade commissions, compared to 32% in the preceding

period. The decrease is as a result of a reduction in the number of trades on the Exchange.

EXPENDITURE

The Commission, during the review period spent ZMW 4,274 million on staff costs compared to ZMW 3,419

million in the previous financial year. However, the Commission is under the process of improving income

and reducing expenditure for self-sustenance. The Commission continued to focus on public awareness by

financing programs and projects that may eventually develop the local Capital Markets and also improve

investor protection.

We show below a depiction of the trend in the last two financial years:

CAPITAL EXPENDITURE

During the period under review, capital expenditure was as follows:

Type 2013 2012

K’ Million K’ Million

Motor Vehicles 609 334

Office Equipment 27 -

Computer Hardware 141 74

Office Furniture 155 63

Total 932 471

2012

2013

4500

4000

3500

3000

2500

2000

1500

1000

500

0

10


Inspections and Enforcement

The Securities and Exchange Commission carried out annual inspections for the year ended 31st March

2013. The following dealers were inspected:

1 . Stockbrokers Zambia Limited

2 . Pangaea Renaissance Capital Securities Limited

3 . Intermarket Securities Limited

4 . Intermarket Unit Trust

5 . Madison Asset Management Company

6 . Madison Unit Trust Fund

7 . Equity Capital Resources Plc

8 . Equity Capital Resources Unit Trust Fund

9 . Laurence Paul Unit Trust Fund

10 . African Banking Corporation

11 . African Alliance Securities Zambia Limited

12 . Lusaka Stock Exchange

13 . Standard Chartered Bank Custodial Services

14 . African Life Financial Services

15 . Entrust Financial Services

16 . TN Medical Support Services

17 . Zambia Capital Partners

18 . Agricultural Advisors International

19 . Profin Group

Two vehicles were purchased by the Commission during the period under review, for the Secretary and

Chief Executive Officer, as well as a Pool vehicle.

Expenses on office furniture were mainly due to the relocation from Rhodes Park to Olympia. Expenses on

office equipment were as a result of purchasing and installing new hardware and systems in the new office

environment.

OPERATIONAL ACTIVITIES

Licensing

During the Financial Year ended 31st March 2013 the Commission licensed various entities and the breakdown

in the number of licenses granted in different categories is shown below:

License area 31/3/2013 01/4/2012 percentage

change

Dealer’s Licence 24 16 50% 5

Investment Advisor’s Licence 6 7 14% 6

Dealer’s Representative Licence 50 31 61% 5

Investment Advisor’s Representative Licence 5 6 17% 6

Collective Investment Schemes 6 7 14% 6


11


The status of the industry is presented using the following criteria:

Profitability

The period under review has been slow in terms of business activities for the Capital Markets. The trade

commissions have been low and the corporate actions have been few leading to losses for most of the

market players

Net asset values were positive for most of the entities except for one entity and eight companies had negative

retained earnings.

Capital Adequacy Requirements – Dealers

It was noted that most of the dealers were not able to meet the capital adequacy requirements with the

exception of two who did have positive net capital and four who had negative liquidity margins. This means

that only two out of the six brokering firms fully met the capital adequacy requirements.

Secondly, out of the ten inspected dealers, six fully met the capital adequacy requirements.

Back Office Operations – Dealers

It was noted that there has been significant improvements in the back office operations for most of the dealers.

It was again noted that most dealers have acquired software that has resulted in the efficient operations of

their businesses with only one firm using Microsoft Excel for updating brokerage related activities. The

company however embarked on purchasing brokerage software.

At one dealer, contract notes for some purchase of share transactions were not on file. But upon engaging

them the contract notes were traced and attached to the transactions.

At one dealer there had been incidences of the broker selling shares for the clients without remitting the

funds to the clients and also delaying in purchasing clients’ shares. Upon engaging the dealer these anomalies

were corrected.

Internal Controls – Dealers

All the ten inspected dealers had strong internal controls with an exception of one. It was noted that there

was no segregation of duties with regards to receiving the clients’ funds for the one dealer. It was noted that

the General Manager could receive the funds, issue a receipt and deposit in the bank account. This situation

has, however, changed as they have since employed more staff to handle the transactions.

Collective Investment Schemes (CISs)

The Commission is glad to report that the following Unit Trust Funds had their Annual General Meetings

(AGMs) in the year under review:

1 . Intermarket Unit Trusts

2 . Madison Unit Trust Fund

3 . Laurence Paul Unit Trust Fund.

12


Two Collective Investment Schemes did not have their AGMs.

The Commission is glad to report that one Unit Trust had its first AGM since its inception in 2002.

The Commission had also taken an enforcement action against one Unit Trust which had been operating

without renewing its licence.

The Commission is glad to report that all the CISs have submitted their assets to custodians. Similarly, CISs

have also been submitting their unit holder’s register to the custodians.

The Commission was pleased to note that Equity Capital Resources (ECR), who was managing Fidelity Life

Assurance Zambia Limited, called for an Extra Ordinary General Meeting for the unit holders in Fidelity Life

on 31st July 2012. It was reported that the net assets position stood at ZMW 2,300 million whereas the total

claims amounted to ZMW 2,200 million. At this meeting it was resolved that a Forensic Audit be conducted

on the fund over the next three (3) months, a period in which the scheme will resume operations until the

completion of the audit at which investors will then decide on the direction of the scheme. It was agreed that

the forensic audit must cover a period of five (5) years.

Investment Advisors’

At the time of inspection, one entity did not have audited accounts for the year ended 31st December 2011.

Another licensee had appointed accountants to prepare their financial statements instead of auditors. The

Commission advised them to rectify the situation. Another firm was yet to submit audited financial statements

for the years ended 31st December 2010 and 2011.

Zambia Capital Partners (ZCP) was granted an Investment Advisor’s licence for 2013 effective 1st January

2013 to expire on 31st December 2013, but they have since gone into voluntary liquidation and the licence

was surrendered. A meeting was held between ZCP and the Commission to ensure that investors’ interests

were protected.

The Stock Exchange

At the Stock Exchange, there were three issues of consideration as follows:

(i) Settlement Guarantee Fund

As at 30th September 2012, the Settlement Guarantee Fund was ZMW 48,632. The objective of this fund

is to have funds to fall back on when the paying broker fails to pay, so that settlement is achieved.

The ZMW 48,632 guarantee fund is too small when compared to the turnover of trades that pass through

the LuSE. For example, in 2011 the total turnover of LuSE trades was ZMW 775.3 million.

The risk of settlement failure is high when the settlement guarantee fund is small such as in this case.

To increase the amount of the Settlement Guarantee Fund the Lusaka Stock Exchange has set aside a

further ZMW 1,295 million to fall back on in addition to the ZMW 48,632 Guarantee Fund. This ZMW 1,295

million is at Intermarket Banking Corporation as a Fixed Deposit Investment.


13


The Commission had recommended that there was need for the members to increase the contributions to

the Settlement Guarantee Fund. The contributions should be commensurate with the net settlement obligation

by each broker over a period of time. For example, LuSE should suggest that each broker contributes 5%

of the net settlement obligations in a year. The Settlement Guarantee Fund should be grown to a reasonable

size.

(ii) Inspection of LuSE Broker members

The LuSE is supposed to be inspecting its broker members as a Self-Regulatory Organisation (SRO). It was

noted that in 2012 no inspections were conducted by the LuSE. The Commission had recommended that

the LuSE should improve in this particular area. As an SRO, it’s supposed to closely monitor and supervise

its members. The Commission is of the view that LuSE should start carrying out its duties as a SRO.

(iii) Separation of the Central Shares Depository (CSD) from the LuSE

Efforts by the Securities and Exchange Commission to separate the CSD from the LuSE have been met

with resistance by the LuSE Management and some Board Members. In as much as we understand that

this is a business case, there are no efforts by the LuSE Management to rectify this position. The Commission

will continue engaging LuSE to see ways in which the separation could be achieved.

The compliance levels by the Capital Markets players have tremendously improved. This can be seen by

improvements in the back office operations of almost all the dealers and hosting of Annual General Meetings

(AGMs) by the Collective Investments Schemes.

The improvement in the compliance levels can be attributed to the consistent follow-up on matters where

there is a breach by the Commission.

In conclusion, SEC is slowly moving to Risk Based Supervision as it moves to achieve the objective of being

an efficient and effective regulator.

ENFORCEMENT ACTIONS

For the period under review, the SEC had censured a number of dealers with regards to lack of adherence

to conduct of best practices in the securities business, that is, failure to submit audited financial reports,

failure to execute clients’ instructions on time, failure to maintain minimum liquidity margins, failure to conduct

quarterly board meetings, inter alia.

In another matter, an Issuer of equities is alleged to have refused to pay out dividends to investors after the

same were being duly declared by its Board of Directors.

MARKET TRANSACTIONS

During the financial year ending 31st March 2013, the Commission received and approved 13 applications

for various transactions including registration of securities, merger and acquisitions, waivers from certain

Securities Act obligations as enshrined in the Act, and other miscellaneous market activities.

The total values of approved transactions was ZMW 1,120,000 while the value of trade commissions at the

14


Lusaka Stock Exchange was ZMW 497,403.00 which together made the total transaction value of ZMW

1,167,403.00 for the market or about 0.0015% of GDP.

These are broken down into various categories below:

DATE COMPANY TYPE AND APPROVAL PURPOSE

NUMBER OF GRANTED ON OF MEETING

SECURITIES/OR

TRANSACTION

27.04.2012 Zanaco 8,500,000,000

Zanaco ordinary Approval for registration

shares 27.04.2012 of additional shares

27.04.2012 Standard 870,000,000,000

Chartered Bank Standard Chartered Approval for registration

ordinary shares 27.04.2012 of additional shares

27.06.2012 Madison Financial 50,000,000 Approval for registration

Services ordinary shares 27.06.2012 of shares

27.06.2012 Kukula Fund I 27.06.2012 Approval of Collective

Investment Scheme

27.06.2012 Pump Energy Plc 120,811,168 10.07.2012 Approval for application

shares of Mandatory offer to

minority shareholder in

Puma Energy Plc

Market transactions

2 500 000

2 000 000

1 500 000

1 000 000

500 000

0LuSE Trading

ActivityShare Registration Mergers & Acquisitions

2013 K’000

2012 K’000


15


INVESTOR PROTECTION

Zambia has achieved important progress in terms of strengthening its policy framework for investment over

the past few years.

To stimulate private sector investment, the Government has put in place a package of investment incentives

through the ZDA Act, such as statutory protection of investment and the right to repatriate 100 percent of

profits and dividends without any restrictions. Specific investment incentives for qualifying local and foreign

investors are clearly indicated in the Act, as well as in the section on taxation.

The ZDA Act provides for additional incentives for investments of U$ 10 Million in priority sectors involved

in value addition. This is a progressive step, with potential for diversifying and modernizing the economy

through innovation, should also be considered and implemented systematically.

PROMOTION OF CAPITAL MARKETS

Zambia is a multiparty democracy and provides a market oriented liberalized economic environment in a

strife-free, multicultural society. The current Zambian Government welcomes investors across sectors and

the laws relating to investment have provided for incentives.

The country’s central location in the region, as well as a combination of the following keys strengths, make

it an ideal investment location:

n Stable Political Conditions,

n Macroeconomic Stability,

n Macroeconomic Conditions,

n Adequate Human Capital,

n Technology and

n Microeconomic Environment economic.

DATE COMPANY TYPE AND APPROVAL PURPOSE

NUMBER OF GRANTED ON OF MEETING

SECURITIES/OR

TRANSACTION

10.07.2012 Cavmont Capital 92,745,000,000 Approval for application

Holdings Plc ordinary shares 05.11.2012 ordinary shares

10.07.2012 Investrust Bank Plc 115,000,000,000 Approval for application

ordinary shares 05.11.2012 ordinary shares

18.03.2013 Zambeef Plc 18.03.2013 Approval of Employee

share Option Plan

18.03.2013 Rio Tinto 18.03.2013 Awaiting approval

18.03.2013 Outotec OYJ 18.03.2013 Awaiting approval

18.03.2013 Powerflex 18.03.2013 Awaiting approval

16


STAFF COMPLEMENT

The Commission’s staff complement during the review period increased to 14 members as at 31st March

2013 from ten (10) members as at 31st March 2012, a forty per cent increase.

CONCLUSION

Perhaps the most poignant statistics of market performance are the slower growth of the market compared

to the economy and the consequent reduction in the market capitalization to GDP ratio. The poor performance

of the markets had a knock-on effect on all aspect of the Capital Markets, as reflected in the adverse financial

performance of the Securities and Exchange Commission (SEC) and most of the dealers. This was also

reflected in the lack of any significant new transactions being registered in the market. There were no new

listings.

While the objective of the regulator is not to make money, however, to be efficacious, the regulator certainly

needs resources, and these resources ought to come from the regulated market. Therefore, the environment

where there are no business activities and transactions in the market, and both market players and the

regulator end up in adverse financial positions in indicative of a severely underperforming market. Such as

situation has undesirable knock on effects, such as holding on to clients’ funds long after their transactions

are done, mixing operational funds with client funds, inability to adhere to liquidity margins in the market, etc.

It then follows that measuring the efficacy of the regulator ought to be in terms of ensuring a stable, predictable

and confidence inducing market which attracts more players to it for continued growth and positive performance.

The SEC, through the launch of its 2012-15 Strategic Plan and pursuing the implementation of the contained

strategic objectives, seeks to achieve such efficacy. The SEC has therefore, intensified a number of activities

in the market over the period under review. For instance, inspections were carried out not only prior to

licensing, but at random intervals during the course of the period. The entities that were found wanting in

terms of compliance were engaged through the early part of the period until they achieved the compliance

levels required of them. The SEC organization was restructured and its staffing levels were increased to

achieve this efficacy.

Other activities that the SEC embarked on to improve the performance of the market included market

development activities which included sponsoring workshops with State Owned Enterprises (SOEs) to

perchance encourage them to use Capital Markets to raise funding, as opposed to relying on the government

or bank loans.

The one aspect of the market that remains a challenge from the point of view of the transformational strategic

objectives being pursued by the SEC is the stock market itself. There are aspects of its operations that

embody systemic risk which would require significant restructuring to address. The SEC has engaged both

the members and owners of the market and its secretariat to work with them to achieve this transformation.

Dr E.D. Wala Chabala

SECRETARY AND CHIEF EXECUTIVE

SEC Staff 31st March 2013 31st March 2012

Staff complement 14 10


17


REGULATORY FRAMEWORK

The Securities Act is the principal Act for regulation of Zambian Securities Market and was specifically

designed to ensure adequate investor protection and support the operation of a free, orderly, fair, secure

and properly functioning Securities Market. The Securities Act creates and defines a central market in which

both quoted and listed securities trade on the securities exchange as opposed to the dual market system.

The Act also established the Securities and Exchange Commission as the regulator of the Securities Market.

The regulatory power of the Commission is anchored upon four major pillars:

n Any person dealing or advising on securities must be licensed by the Commission;

n Any securities market must be authorized and licensed as a securities exchange by the Commission;

n All securities of a public company which are publicly traded must be registered by the Commission;

and

n Collective investment schemes must be authorized by the Commission.

Licensing of Intermediaries

The Commission continued in its role of ensuring that only fit and proper persons and entities were allowed

to offer securities services to the investing public. The following entities were duly authorized to conduct

securities business in the categories shown below.

Dealer’s License

The following corporate entities held this license during the period under review:

18

LICENSING ACTIVITIES

DEALER’S LICENSE



19

LICENSING ACTIVITIES (continued)

CES

ES ES

INVESTMENT ADVISOR’S LICENSE



20

DEALER’S REPRESENTATIVE LICENSE

The following persons held this license during the period under review:



21


22

INVESTMENT ADVISOR’S REPRESENTATIVE LICENSE

The following persons held this license during the period under review:



23

COLLECTIVE INVESTMENT SCHEMES

The following collective investment schemes were operational during the period under review:

SECURITIES EXCHANGE LICENSES

The following exchanges were operational during the period under review:


24

THE AMERC MEETING

The Securities and Exchange Commission participated in the 30th Africa Middle East Regional Committee

(AMERC) meeting held in Dubai.

The main focus of this meeting was on Risk Based Supervision (RBS), that is, what it means and whether

it works, as well as challenges associated with Risk Based Supervision.

A bilateral agreement was signed at the close of the meeting.

Multi-national and Regional Conferences and Summits Attended by Commission Staff

During the Financial Year, Commission staff attended the following training,conferences, meetings and

workshops.

Course and Location Dates Attended by

AfDB Workshop, Botswana 24th-28th July 2012 Director, Market

Transactions and

Investments (DMTI)

SPPRC, South Africa 15th-17th August 2012 Secretary and Chief

Executive (SCE),

Director, Enforcement and

Legal Affairs (DELS)

ESAAMLG, Mozambique 24th August-

1st September 2012 Manager, Finance

FIP Stakeholders Workshop, Botswana 20th-22nd September 2012 SCE, DELS

Bi-annual CISNA Meeting, Malasyia 2nd-6th October 2012 SCE, DMTI

AfDB Meeting 20th-25th October 2012 SCE, DMTI

IIF Inaugural Africa Financial Summit,

Cape Town, SA 11th-13th November 2012 SCE

ARMEC Meeting, Dubai 16th-20th February 2013 SCE,

Director Market

Development and

Supervision (DMDS)

Association of Futures Market,

South Africa 28th February-1st March 2013 DMTI

Strategic Growth Forum Africa 2013,

South Africa 7th-8th March 2013 SCE

Stockbrokers Course, ZIBCT 11th March-19th April 2013 Manager, Market

Supervision


TRAINING AND WORKSHOPS

25

SECURITIES AND EXCHANGE COMMISSION

FINANCIAL STATEMENTS31 MARCH 2013

26

FINANCIAL STATEMENTS31 MARCH 2013

ES

FINANCIAL STATEMENTS FOR

SECURITIES AND EXCHANGE COMMISSION

TABLE OF CONTENTS

Statement of Commissioners’

responsibilities ---------------------------28

Report of the independent auditors----------------------------

29

Statement of comprehensive income ------30

Statement of changes in equity --------------31

Statement of financial position ----------------32

Statement of cashflows -------------------------33

Notes to the financial statements------------------------

34-50

Detailed statement of

comprehensive income -----------------51

27

The Securities Act, 1993 requires the commissioners to prepare financial statements for each financial year

which give a true and fair view of the financial position of Securities and Exchange Commission and of its

financial performance and its cash flows for the year then ended. In preparing such financial statements,

the commissioners are responsible for

n designing, implementing and maintaining internal control relevant to the preparation and fair

presentation of financial statements that are free from material misstatement, whether due to fraud

or error;

n selecting appropriate accounting policies and applying them consistently;

n making judgments and accounting estimates that are reasonable in the circumstances; and

n preparing the financial statements in accordance with the applicable financial reporting framework,

and on the going concern basis unless it is inappropriate to presume that the Commission will continue

in operation.

The commissioners are responsible for keeping proper accounting records which disclose with reasonable

accuracy at any time the financial position of the Commission and enable them to ensure that the financial

statements comply with the Securities Act, 1993. They are also responsible for safeguarding the assets of

the Commission and hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The commissioners confirm that in their opinion

(a) the financial statements give a true and fair view of the financial position of Securities and Exchange

Commission as of 31 March 2013, and of its financial performance and its cash flows for the year

then ended;

(b) at the date of this statement there are reasonable grounds to believe that the Commission will be

able to pay its debts as and when these fall due; and

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

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

Signed at Lusaka on 28 June 2013

COMMISSIONER COMMISSIONER

STATEMENT OF COMMISSIONERS’ RESPONSIBILITIES

28

Grant Thornton

5th Floor Mukuba Pension HouseDedan Kimathi RoadP.O. Box 30885Lusaka, ZambiaT +260 (211) 227722-8F +260 (211) 223774E [email protected]

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF SECURITIES ANDEXCHANGE COMMISSION

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of Securities andExchange Commission as at 31 March 2013, and of its financial performance and its cash flows for the yearthen ended in accordance with International Financial Reporting Standards.

Emphasis of matter

Without qualifying the opinion above, we draw attention to note 2 in the financial statements which indicatesthat the Commission had a deficit over income of ZMW1,469,663 and at the reporting date the Commissioníscurrent liabilities exceeded its current assets by ZMW1,074,053. These conditions along with other mattersas set forth in note 2, indicate the existence of a material uncertainty which may cast significant doubt aboutthe Commissionís ability to continue as a going concern.

Report on other legal and regulatory requirements

In our opinion, the financial statements of Securities and Exchange Commission as of 31 March 2013 havebeen properly prepared in accordance with the Securities Act, 1993 Cap 354 of the Laws of Zambia, and theaccounting and other records and registers have been properly kept in accordance with the Act.

Chartered Accountants

Edgar Hamuwele LusakaPartner 28 June 2013

29

Note 2013 2012

ZMW ZMW

Income

Grants and other income 6 6,417,827 6,829,096

Expenditure

Employee benefits costs (4,274,869) (3,418,547)

Depreciation (372,500) (228,183)

Other operating expenses (3,240,121) (2,575,956)

(7,887,490) (6,222,686)

(Deficit)/surplus for the year 7 (1,469,663) 606,410

Other comprehensive income - -

Total comprehensive (loss)/ income (1,469,663) 606,410

STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2013

30

Accumulated

reserve Total

ZMW ZMW

At 1 April 2011 811,078 811,078

Total comprehensive income for the year 606,410 606,410

At 31 March 2012 1,417,488 1,417,488

Total comprehensive loss for the year (1,469,663) (1,469,663)

At 31 March 2013 (52,175) (52,175)


STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 MARCH 2013

31

Note 2013 2012

ZMW ZMW

ASSETS

Non-current assets

Property, plant and equipment 9 1,021,878 519,512

Investments 10 - 446,892

1,021,878 966,404

Current assets

Trade and other receivables 11 1,409,645 1,132,949

Cash and cash equivalents 12 166,207 1,432,326

1,575,852 2,565,275

Total assets 2,597,730 3,531,679

EQUITY AND LIABILITIES

Funds and reserves

Accumulated reserves (52,175) 1,417,488

(52,175) 1,417,488

Current liabilities

Trade and other payables 13 2,649,905 2,114,191

Total equity and liabilities 2,597,730 3,531,679

The financial statements on pages 30 to 50 were approved by the Board of Commissioners on 28 June

2013 and were signed on its behalf by:

CHAIRMAN

COMMISSIONER

STATEMENT OF FINANCIAL POSITIONAS AT 31 MARCH 2013

32

2013 2012

ZMW ZMW

Cash inflow from operating activities

(Deficit)/surplus for the year (1,469,663) 606,410

Depreciation 372,500 228,183

Loss on disposal of property, plant and equipment - 68,028

Depreciation adjustment 59,321 -

(Increase)/decrease in trade and other receivables (276,696) (451,975)

Decrease /(increase) in trade and other payables 535,714 (221,914)

Net cash inflow from operating activities (778,824) 228,732

Investing activities

Purchase of property, plant and equipment (934,187) (471,971)

Proceeds on disposal of property, plant and equipment - 68,030

Investments 446,892 (446,892)

Net cash outflow on investing activities (487,295) (850,833)

(Decrease)/increase in cash and cash equivalents (1,266,119) (622,101)

Cash and cash equivalents at beginning of the year 1,432,326 2,054,427

Cash and cash equivalents at end of the year 166,207 1,432,326

Represented by:

Cash in hand and at bank 166,207 1,167,223

Short term investments - 265,103

166,207 1,432,326


STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 MARCH 2013

33

1. The Commission

The Commission is a body corporate that came into existence by an Act of Parliament, the Securities

Act No. 38 of 1993, with the objective of inter-alia regulating and developing the securities market

in Zambia.

2. Basis of preparing the financial statements - going concern basis

During the year, the Commission had a deficit of income over expenditure of ZMW 1,469,663 and

at the reporting date the Commissionís current liabilities exceeded its current assets by ZMW 1,074,053.

The Commission meets its day to day working capital requirements through its own generation of

funds and grants from the Government of the Republic of Zambia.

The financial statements have been prepared on a going concern basis which assumes that the

Commission will continue in operational existence for the foreseeable future.

The validity of this assumption depends on the Commission being able to generate sufficient funds

from its future activities to meet its working capital requirements and the Government of the Republic

of Zambia increasing its grants to the Commission.

If the Commissioners were unable to continue in operational existence for the foreseeable future,

adjustments would have to be made to reduce the reporting date values of assets to their recoverable

amounts, to provide for further liabilities that might arise and to reclassify equipment and motor

vehicles and long term liabilities as current assets and liabilities.

The Commissioners are of the opinion that it is appropriate for the financial statements to be prepared

on a going concern basis.

3. Principal accounting policies

The principal accounting policies applied by the Commission in the preparation of the financial

statements are set out below. These policies have been consistently applied to all the years presented,

unless otherwise stated.

(a) Basis of presentation

The financial statements are prepared in accordance with International Financial Reporting

Standards (IFRS). They have been prepared under the historical cost convention, as modified

by the revaluation of available-for-sale financial assets and financial assets and liabilities at fair

value through the statement of comprehensive income.

The preparation of financial statements in conformity with IFRS requires the use of certain

critical accounting estimates. It also requires management to exercise its judgment in the

process of applying the Commissionís 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 4.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2013

34

3. Principal accounting policies (continued)

(a) Basis of presentation (continued)

(a) New standards and interpretations

Standard Description Effective date

IFRS 9 The IASB aims to replace IAS 39 “Financial Instruments: 1 January 2015

Recognition and Measurement” (IAS 39) in its entirety

with IFRS 9. To date, the chapters dealing with

recognition, classification, measurement and

derecognition of financial assets and liabilities have been

issued. These chapters are effective for annual periods

beginning on or after 1 January 2015. Chapters dealing

with impairment methodology and hedge accounting

are still being developed. Further, in November 2011, the

IASB tentatively decided to consider making limited

modifications to IFRS 9’s financial asset classification model

to address application issues.

IFRS 10 A package of new consolidation standards is effective for 1 January 2013

annual periods beginning or after 1 January 2013.

IFRS 10 supersedes IAS 27 ‘“Consolidated and Separate

Financial Statements’ (IAS 27) and SIC 12

‘Consolidation – Special Purpose Entities’”. IFRS 10 revises

the definition of control and provides extensive new

guidance on its application. These new requirements have the

potential to affect which of the Group’s investees are

considered to be subsidiaries and therefore

change the scope of consolidation.

IFRS 11 Joint Arrangements – the Standard aligns more closely 1 January 2013

the accounting by the investors with their rights and

obligations relating to the joint arrangement. In addition,

IAS 31 ís option of using proportionate consolidation for

joint ventures has been eliminated. IFRS 11 now

requires the use of the equity accounting method,

which is currently used for investments in associates.

IFRS 12 Integrates and makes consistent the disclosure 1 January 2013

requirements for various types of investments,

including unconsolidated structured entities. It

introduces new disclosure requirements about the

risks to which an entity is exposed from its

involvement with structured entities.


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2013 (continued)

35





IFRS 13 This standard will replace the guidance on fair 1 January 2013

value measurement in existing IFRS accounting

literature with a single standard.

IAS 19 The IAS 19 Amendments include a number of 1 January 2013

targeted improvements throughout the Standard.

The main changes relate to defined benefit plans.

This would entail:

• eliminating the “corridor method”, requiring entities

to recognise all actuarial gains and losses

arising in the reporting period.

• changing the measurement and presentation of

certain components of defined benefit cost.

• enhancing the disclosure requirements, including

information about the characteristics of defined

benefit plans and the risks that entities are exposed to

through participation in them.

The IAS 19 Amendments are effective for annual

periods beginning on or after 1 January 2013 and

will apply retrospectively.

IAS 27 The Standard requires that when an entity prepares 1 January 2013

(Revised) separate financial statements, investments in

subsidiaries, associates, and jointly controlled entities are

accounted for either at cost, or in accordance with

IFRS 9 Financial Instruments.

The Standard also deals with the recognition of dividends,

certain Group reorganisations and includes a number

of disclosure requirements.


36





IAS 28 This Standard supersedes IAS 28 Investments in 1 January 2013

(Revised) Associates and prescribes the accounting for

investments in associates and sets out the requirements

for the application of the equity method when accounting

for investments in associates and joint ventures.

The Standard defines 'significant influence' and provides

guidance on how the equity method of accounting is to be

applied (including exemptions from applying the equity

method in some cases). It also prescribes how

investments in associates and joint ventures should be

tested for impairment.

Amendments New disclosures are required for all financial 1 January 2013

to IFRS 7 instruments that are set off in accordance with IAS

32.42 and for financial assets that are subject to an

enforceable master netting arrangement or similar

arrangement regardless whether they are set off.

Amendments IAS 32.42

which is unchanged, requires that an 1 January 2014

entity to IAS 32 offsets financial assets and

financial liabilities when it has a legally enforceable

right to set off the recognised amounts, and intends

either to settle on a net basis or to realise the asset and

settle the liability simultaneously. However, new guidance

in IAS 32.AG38B clarifies that the right of set-off:

a) must not be contingent on a future event;

and

b) must be legally enforceable in all of the

following circumstances:

i) the normal course of business;

ii) the event of default; and

iii) the event of insolvency or bankruptcy of

the entity and all of the counterparties.



37





Mandatory Effective Date and Transition Disclosures –

Amendments to IFRS 9 and IFRS 7 1 January 2014

On 16 December 2011, the IASB issued 'Mandatory Effective

Date and Transition Disclosures (Amendments to IFRS 9 and IFRS

7)', which amended the effective date of IFRS 9 to annual periods

beginning on or after 1 January 2015, and modified the relief from

restating comparative periods and the associated

disclosures in IFRS 7.

Annual Improvements Cycle 1 January 2013

The IASB's annual improvements project provides a

streamlined process for dealing efficiently with a collection

of amendments to IFRSs. The primary objective of the process

is to enhance the quality of standards, by amending

existing IFRSs to clarify guidance and wording, or to correct for

relatively minor unintended consequences, conflicts or oversights.

The IASB considered the finalisation of a number of amendments

discussing and finalising:

(1) Repeated application of IFRS 1

(2) IFRS 1 – Exemption for borrowing costs

(3) IAS 1 – Comparative information

(4) IAS 16 – Classification of servicing equipment

(5) IAS 32 – Tax effect of distribution to holders of equity

instruments

(6) IAS 34 – Interim financial reporting and segment information

Based on the Commission’s current business model and accounting policies, management does not

expect material impact on its financial statements when the standards or interpretations become

effective.


38



Grants

Government grants are accounted for when there is reasonable assurance that the Commission will

comply with the conditions attaching to them and that the grants will be received. Grants that relate

to specific capital expenditure are treated as capital grants. Capital grants are deferred and amortised

to the statement of comprehensive income in equal annual instalments over the expected useful lives

of the assets to which they relate. Grants included in the statement of financial position representtotal

grants received to date less amounts so far transferred to statement of comprehensive income. Other

grants are credited to the statement of comprehensive income in the period in which they are received.

Licensing fee income

Licensing fee income is recognised upon issue of a licence. Registration fee income is recognised

once securities are registered. Authorisation fee income on a takeover or merger transactions is

recognised when the transaction is duly authorised. The LuSE trade commission is credited to the

statement of comprehensive income on an accrual basis.

Interest

Interest income is recognised on an accrual basis.

(b) Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes

expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the assetís carrying amount or recognised as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the itemwill flow

to the Commission and the cost of the item can be measured reliably. All other repairs and maintenance

are charged to the statement of comprehensive income during the financial period in which they are

incurred.

Increases in the carrying amount arising on revaluation of property, plant and equipment are credited

to the revaluation surplus in the accumulated fund. Decreases that offset previous increases of the

same asset are charged against fair value reserves directly in accumulated fund; all other decreases

are charged to the statement of comprehensive income. Each year, the difference between depreciation

based on the revalued carrying amount of the asset charged to the statement of comprehensive

income and depreciation based on the assetís original cost is transferred from the revaluation surplus

to the accumulated fund.

Depreciation is calculated to write down the assets to residual amounts on a straight line basis over

the expected useful lives of the assets concerned. The principal annual rates used for this purpose,

which are consistent with those of the previous year, are:



39


(b) Property, plant and equipment (continued)

%

Motor vehicles 25

Office equipment 20

Computer hardware 33 1/3

Office furniture 20

The assets’ residual values and useful lives are reviewed at each reporting date and adjusted if

appropriate.

An asset’s carrying amount is written down immediately to its recoverable amount if the assetís

carrying amount is greater than its recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount.

These are included in the statement of comprehensive income in the other operating income. When

revalued assets are sold, the amounts included in the revaluation surplus relating to these assets are

transferred to retained earnings.

(c) Financial assets

The Commission classifies its investments into the following categories: financial assets at fair value

through profit or loss, trade and other receivables, held-to-maturity financial assets and available-for-

sale financial assets. The classification depends on the purpose for which the investments were

acquired.

Management determines the classification of its investments at initial recognition and re-evaluate this

at every reporting date.

(i) Financial assets at fair value through income

This category has two sub-categories: financial assets held for trading and those designated

at fair value through profit or loss at inception.

A financial asset is classified into the ‘financial assets at fair value through income’ category

at inception if acquired principally for the purpose of selling in the short term, if it forms part

of a portfolio of financial assets in which there is evidence of short term profit taking, or if so

designated by management.

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

– held in internal funds to match investment contracts liabilities that are linked to the changes

in fair value of these assets. The designation of these assets to be at fair value through profit

or loss eliminates or significantly reduces a measurement or recognition inconsistency that


40


(c) Financial assets (continued)

(i) Financial assets at fair value through income (continued)

would otherwise arise from measuring assets or liabilities or recognising the gains and

losses on them on different bases;

– managed and whose performance is evaluated on a fair value basis. Assets that

are part of these portfolios are designated upon initial recognition at fair value through

profit or loss.

(ii) Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market other than those that the Commission intends

to sell in the short term or that it has designated as at fair value through income or available

for sale. Trade and other receivables are recognised at fair value, less provision for impairment.

A provision for impairment of Trade and other receivables is established when there is objective

evidence that the Commission will not be able to collect all amounts due according to their

original terms.

(iii) Held-to-maturity financial assets

Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable

payments and fixed maturities other than those that meet the definition of trade and other

receivables that the Commission’s management has the positive intention and ability to hold

to maturity. These assets are recognised initially at fair value and subsequently measured at

amortised cost using the effective interest method, less provision for impairment. A provision

for impairment is established when there is objective evidence that the Commission will not

be able to collect all amounts due according to their original terms.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated

in this category or not classified in any of the other categories.

Financial assets are derecognised when the rights to receive cash flows from them have

expired or where they have been transferred and the Commission has also transferred

substantially all risks and rewards of ownership.

Available-for-sale financial assets and financial assets at fair value through profit or loss are

subsequently carried at fair value. Held-to-maturity financial assets are carried at amortised

cost using the effective interest method. Realised and unrealised gains and losses arising

from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category

are included in the statement of comprehensive income in the period in which they arise.

Unrealised gains and losses arising from changes in the fair value of non-monetary securities

classified as available-for-sale are recognised in equity. When securities classified as available-

for-sale are sold or impaired, the accumulated fair value adjustments are included in the

statement of comprehensive income as net realised gains or losses on financial assets.



41


(c) Financial assets (continued)

(iv) Available-for-sale financial assets (continued)

Interest on available-for-sale securities calculated using the effective interest method is

recognised in the statement of comprehensive income.

The fair values of quoted investments are based on current bid prices. If the market for a financial

asset is not active, the Commission establishes fair value by using valuation techniques.

(d) Impairment of assets

(i) Financial assets carried at amortised cost

The Commission assesses at each reporting date whether there is objective evidence that a

financial asset or group of financial assets is impaired. A financial asset or group of financial

assets is impaired and impairment losses are incurred only if there is objective evidence of

impairment as a result of one or more events that have occurred after the initial recognition

of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated

future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Objective evidence that a financial asset or group of assets is impaired includes observable

data that comes to the attention of the Commission about the following events:

n significant financial difficulty of the issuer or debtor;

n a breach of contract, such as a default or delinquency in payments;

n it becoming probable that the issuer or debtor will enter bankruptcy or other financial

reorganisation; or

n observable data indicating that there is a measurable decrease in the estimated future

cash flow from a group of financial assets since the initial recognition of those assets,

although the decrease cannot yet be identified with the individual financial assets in the

Commission, including:

• adverse changes in the payment status of issuers or debtors in the Commission;

or

• national or local economic conditions that correlate with defaults on the assets in

the Commission.

The Commission first assesses whether objective evidence of impairment exists individually

for financial assets that are individually significant. If the Commission determines that no

objective evidence of impairment exists for an individually assessed financial asset, whether

significant or not, it includes the asset in a group of financial assets with similar credit risk

characteristics and collectively assesses them for impairment. Assets that are individually

assessed for impairment and for which an impairment loss is or continues to be recognised

are not included in a collective assessment of impairment.


42


(d) Impairment of assets (continued)

(i) Financial assets carried at amortised cost (continued)

If there is objective evidence that an impairment loss has been incurred on assets carried at

amortised cost, the amount of the loss is measured as the difference between the asset’s

carrying amount and the present value of estimated future cash flows (excluding future credit

losses that have been incurred) discounted at the financial asset’s original effective interest

rate. The carrying amount of the asset is reduced through the use of an allowance account,

and the amount of the loss is recognised in the statement of comprehensive income. If a held-

to-maturity investment or a loan has a variable interest rate, the discount rate for measuring

any impairment loss is the current effective interest rate determined under contract.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can

be related objectively to an event occurring after the impairment was recognised, the previously

recognised impairment loss is reversed by adjusting the allowance account. The amount of

the reversal is recognised in the statement of comprehensive income.

(ii) Financial assets carried at fair value

The Commission assesses at each reporting date whether there is objective evidence that an

available-for-sale financial asset is impaired. If any such evidence exists for available-for-sale

financial assets, the cumulative loss – measured as the difference between the acquisition

cost and current fair value, less any impairment loss on the financial asset previously recognised

in profit or loss – is removed from equity and recognised in the statement of comprehensive

income. Impairment losses recognised in the statement of comprehensive income on equity

instruments are not subsequently reversed. The impairment loss is reversed through the

statement of comprehensive income, if in a subsequent period the fair value of a debt instrument

classified as available-for-sale increases and the increase can be objectively related to an

event occurring after the impairment loss was recognised in profit or loss.

(iii) Impairment of other non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually

for impairment. Assets that are subject to amortisation are reviewed for impairment whenever

events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds

its recoverable amount. The recoverable amount is the higher of an asset’s fair value less

costs to sell and value in use. For the purposes of assessing impairment, assets are grouped

at the lowest levels for which there are separately identifiable cash flows (cash-generating

units).

(e) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short- term

highly liquid investments and balances held with banks. Bank overdrafts that are repayable on demand

are included as a component of cash and cash equivalents.


(d) Impairment of assets (continued)

(i) Financial assets carried at amortised cost (continued)

If there is objective evidence that an impairment loss has been incurred on assets carried at

amortised cost, the amount of the loss is measured as the difference between the asset’s

carrying amount and the present value of estimated future cash flows (excluding future credit

losses that have been incurred) discounted at the financial asset’s original effective interest

rate. The carrying amount of the asset is reduced through the use of an allowance account,

and the amount of the loss is recognised in the statement of comprehensive income. If a held-

to-maturity investment or a loan has a variable interest rate, the discount rate for measuring

any impairment loss is the current effective interest rate determined under contract.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can

be related objectively to an event occurring after the impairment was recognised, the previously

recognised impairment loss is reversed by adjusting the allowance account. The amount of

the reversal is recognised in the statement of comprehensive income.

(ii) Financial assets carried at fair value

The Commission assesses at each reporting date whether there is objective evidence that an

available-for-sale financial asset is impaired. If any such evidence exists for available-for-sale

financial assets, the cumulative loss – measured as the difference between the acquisition

cost and current fair value, less any impairment loss on the financial asset previously recognised

in profit or loss – is removed from equity and recognised in the statement of comprehensive

income. Impairment losses recognised in the statement of comprehensive income on equity

instruments are not subsequently reversed. The impairment loss is reversed through the

statement of comprehensive income, if in a subsequent period the fair value of a debt instrument

classified as available-for-sale increases and the increase can be objectively related to an

event occurring after the impairment loss was recognised in profit or loss.

(iii) Impairment of other non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually

for impairment. Assets that are subject to amortisation are reviewed for impairment whenever

events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds

its recoverable amount. The recoverable amount is the higher of an asset’s fair value less

costs to sell and value in use. For the purposes of assessing impairment, assets are grouped

at the lowest levels for which there are separately identifiable cash flows (cash-generating

units).

(e) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short- term

highly liquid investments and balances held with banks. Bank overdrafts that are repayable on demand

are included as a component of cash and cash equivalents.



43


(f) Foreign currencies

(i) Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary

economic environment in which the Commission operates (the ‘functional currency’). The

financial statements are presented in Zambian Kwacha, which is the Commission’s presentation

currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the rates of

exchange prevailing at the date of transactions. Foreign exchange gains and losses resulting

from the settlement of such transactions and from the translation at year end exchange rates

of monetary assets and liabilities denominated in foreign currencies are recognised in the

statement of comprehensive income.

(g) Employee benefits

(i) Provision for retirement benefits

The Commission has a plan with National Pension Scheme Authority (NAPSA) where the

Commission pays an amount equal to the employees’ contributions. Employees contribute

5% of their gross earnings.

(ii) Provisions for leave pay and long service bonus

Provisions for leave pay are made in respect of all staff. In addition, all employees are entitled

to gratuity and a provision is made thereon.

(h) Trade and other payables

Trade and other payables are stated at cost.

4. Critical accounting estimates and judgements

The Commission makes estimates and assumptions that affect the reported amounts of assets and

liabilities in the financial statements. Estimates and judgements are continually evaluated and based

on historical experience and other factors, including expectations of future events that are believed

to be reasonable under the circumstances.

In the process of applying Commission’s accounting policies, management has made judgements

in determining:

(a) the classification of financial assets;

(b) whether assets are impaired;

(c) estimation of provision and accruals; and

(d) recoverability of trade and other receivables.


44

6. Income

The main sources of income were:

2013 2012

ZMW (%) ZMW (%)

Grants from Government of the Republic

of Zambia 4,128,005 64 2,655,003 39

Registration of securities 625,000 10 625,000 9

LuSE trade commissions 497,403 8 2,141,535 31

Other fees and revenues 1,167,419 18 1,407,558 21

6,417,827 6,829,096

5. Management of financial risk

5.1 Financial risk

The Commission is exposed to a range of financial risks through its financial assets. The most

important component of this financial risk is credit risk. These risks arise from open positions in the

interest rate and business environments, all of which are exposed to general and specific market

movements. The Commission manages these positions with a framework that has been developed

to monitor its customers and return on its investments.

5.1.1 Credit risk

The Commission has exposure to credit risk, which is the risk that a counterparty will be unable

to pay amounts in full when due. Key area where the Commission is exposed to credit risk

is trade and other receivables.

The Commission structures the levels of credit risk it accepts by placing limits on its exposure

to the level of credit given to a single entity.

5.1.2 Foreign currency risk

Most of the transactions for the Commission are carried out in Zambian Kwacha. The exposure

to foreign currency risk is low.

5.1.3 Capital management

The Commission’s objective when managing capital is to safeguard the Commission’s ability

to continue as a going concern so that it can continue to provide benefits to stakeholders.

The Commission’s capital is supported by grants from the Government of the Republic of

Zambia (GRZ).



45

7. (Deficit)/surplus for the year

2013 2012

ZMW ZMW

(Deficit)/surplus for the year is stated after charging:

Depreciation 372,500 228,183

Auditors' remuneration 76,560 92,446

Commissioners’ and committee expenses 383,274 323,149

8. Income tax expense

The Commission is exempt from income tax.


46

9. Property, plant and equipment

(a) Summary

Motor Office Office Computer

vehicles equipment Furniture equipment Total

ZMW ZMW ZMW ZMW ZMW

Cost

At 1 April 2011 823,500 104,829 59,599 281,255 1,269,183

Additions 334,336 - 63,185 74,450 471,971

Disposals (362,819) - - - (362,819)

At 31 March 2012 795,017 104,829 122,784 355,705 1,378,335

Additions 609,767 27,412 155,260 141,748 934,187

Disposals (274,832) - - - (274,832)

At 31 March 2013 1,129,952 132,241 278,044 497,453 2,037,690

Depreciation

At 1 April 2011 451,222 100,138 41,157 264,884 857,401

Charge for the year 198,384 3,347 14,164 12,288 228,183

Disposals (226,761) - - - (226,761)

At 31 March 2012 422,845 103,485 55,321 277,172 858,823

Charge for the year 270,262 3,177 33,214 65,847 372,500

Disposals (274,832) - - - (274,832)

Adjustments (59,321) - - - (59,321)

At 31 March 2013 477,596 106,662 88,535 343,019 1,015,812

Net book value

At 31 March 2013 652,356 25,579 189,509 154,434 1,021,878

At 31 March 2012 372,172 1,344 67,463 78,533 519,512


47


2013 2012

ZMW ZMW

10 . Investments

Equity Capital Resources-equity unit fund

At beginning of the year 446,892 -

Purchased during the year - 446,892

Disposals 446,892) -

At the end of the year - 446,892

In the opinion of the directors, the value of the above investment is not less than the carrying amounts

at which it has been included in the financial statements.

11. Trade and other receivables

GRZ Grant 678,001 -

Trade commissions 104,349 345,614

Sundry debtors 13,552 1,298,690

Prepayments and deposits 435,608 563,047

Provision for impairment - (1,277,567)

1,231,510 929,784

Staff debtors 178,135 203,165

1,409,645 1,132,949

12. Cash and cash equivalents

Cash in hand and at bank 166,207 1,167,223

Short term investments - 265,103

166,207 1,432,326

13. Trade and other payables

Provisions and accruals 2,065,919 1,224,760

Amount due to Compensation Fund 19,389 27,510

Due to Zambia Revenue Authority 564,597 861,921

2,649,905 2,114,191

48


14. Financial assets and liabilities

Financial assets

The Commission’s principal financial assets are prepayments, bank balances and cash. The

Commission maintains its bank accounts with major banks in Zambia of high credit standing.

Prepayments are stated at their nominal value reduced by appropriate allowances for estimated

irrecoverable amounts.

The Commission’s financial liabilities are creditors and accruals. Financial liabilities are classified

according to the substance of the contractual arrangements entered into, and are stated at their

nominal value.

(a) Price risk

(i) Currency risk

The majority of the transactions are denominated in Zambian Kwacha and are not therefore

exposed to a currency risk.

(ii) Interest rate risk

Financial assets are not exposed to the risk that their value will fluctuate due to changes in

market interest rates.

(iii) Market risk

The Commission is not exposed to the risk of the value of its financial assets fluctuating as

a result of changes in market prices.

(b) Credit risk

(i) Prepayments

The Commissioners believe the credit risk of financial assets is low.

(c) Liquidity risk

The Commissionís liquidity risk exposure is deemed high due to dependence on Government grants.

(d) Fair value

At the reporting date the carrying values of financial instruments reported in the financial statements

approximate their fair value.



49

2013 2012

ZMW ZMW

15. Related party transactions

The following transactions were carried out with related parties:

(i) Key management compensation

Salaries and other short term benefits 3,150,605 3,394,945

Defined contribution pension schemes 48,215 49,642

3,198,820 3,444,587

(ii) Commissioners’ remuneration

Fees for service as Commissioners 383,274 323,149

(iii) Loans to key management 72,979 151,842

16. Capital commitments

There were no capital commitments either contracted or authorised at 31 March 2013 (2012 – ZMW

nil).

17. Contingent liability

There were no known contingent liabilities at the reporting date (2012 – ZMW nil).

18. Re-denomination of the currency

During the reporting period, the currency was re-denominated. The re-denomination entailed that all

balances carried forward after 31 December 2012 were converted into the re-denominated currency

by dividing the nominal value of the existing currency by a multiplicand of one thousand. The rebasing

of the currency is a non-adjusting event and is not a change in accounting policy. The rebasing of

the currency does not have adjusting effect on the financial statements.

19. Events subsequent to the reporting date

There has not arisen since the end of the financial year any item, transaction or event of a material

and unusual nature likely, in the opinion of the commissioners of the Commission, to affect substantially

the operations of the Commission, the results of those operations or the financial position of the

Commission.


50

2013 2012 ZMW ZMWINCOME

GrantsRevenue grants 4,128,005 2,655,003

Fees and other incomeAuthorisation fees 455,000 675,000Commission – LuSE trades 497,403 2,141,535Licensing fees 305,982 233,400Registration fees 625,000 625,000Scrutiny fees 40,000 85,000Sundry income 46,542 20,224Issuers fees 228,00 234,000Investment income 15,371 109,337Inspection fees 76,524 27,027Annual fees - 23,570 2,289,822 4,174,093

Total income 6,417,827 6,829,096

EXPENDITUREAdvertising expenses 129,595 117,895Audit fees 76,560 92,446Bank charges 21,633 27,490Board and committee expenses 383,274 323,149Consultancy fees 104,337 101,278Cost related to Strategic actions 476,240 -Depreciation 372,500 228,183Depreciation adjustment 59,321 -Employee benefits costs 4,274,869 3,418,547Entertainment 6,917 16,982Fair value Loss 45,537 -Loss on disposal of property, plant and equipment - 68,028Fuel and lubricants 192,918 214,160Insurance 183,702 115,280Motor vehicle expenses 42,071 64,916Office operational costs 84,768 101,813Postage and telephones 138,055 100,555Electricity and water 5,623 7,380Printing and Stationary 140,668 84,737Publicity and Education 122,442 330,189Rent 376,466 263,255Repairs and maintenance 48,804 39,915Security 34,980 34,842Subscriptions and publications 126,550 128,578Workshops and seminars 439,660 343,068 7,887,490 6,222,686

(Deficit)/surplus for the year (1,469,663) 606,410


DETAILED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2013

51

Pursuant to the Securities Act of 2003, during the period under review, the Commission comprised the

following members appointed from institutions specified in the Act:

Dr E.D. Wala Chabala Secretary and Chief Executive Appointed 31st November 2011

Major Constantine Hara Director of Enforcement and Legal Services. Appointed 14th July 2007

Mr Phillip K. Chitalu Director of Market Transactions and

Investments Appointed 1st August, 2011

Ms Mutumboi Mundia Director of Market Supervision

and Development Appointed 2nd January 2013

Mrs Queen Shachile Manager, Corporate Services Appointed 1st February 1995

Mr Mayford Chikoya Manager, Finance Appointed 27th October,1997

Mr Kennedy Bwalya Manager, Market Supervision Appointed 14th January 2013

Mr Bruce Mulenga Manager, Market Transactions Appointed 11th February 2013

Mrs Emily Moseni

Mangwela Executive Assistant to the CEO Appointed 28th January 2013

Ms Priscilla Mwale Personal Assistant to the CEO Appointed 28th January 2013

Ms Chileshe Mwamulima Secretary – Market Supervision &

Development Appointed 14th July 2003

Mrs Yvonne Mwala Secretary – Market Transactions

and Investments Appointed 2nd January 2012

Mr Saviour Mooya Driver Appointed 8th February 1994

Mr Alexander Tondo Office Orderly Appointed 14th August 2006

Mr Collins Choomba Surveillance Officer Resigned 30th November 2012

THE SEC STAFF, PAST AND CURRENT STAFF

Mr George Mubipe Chairman

Zambia Institute of Chartered

Accountants Appointed on 27th July 2011

Mr Amos Siwila Vice Chairman

LAZ Appointed on27th July 2011

Mr Joe Simachela Ministry of Justice Appointed on 27th May 2010

Ms Gloria Munkombwe NGOCC Appointed on 31st May 2011

Mr Ben Zulu ZACCI Appointed on 27th July 2011

Dr. Jonathan Chipili BoZ Appointed on 13th August 2012

THE SEC COMMISSIONERS AND STAFF

52

COMMITTEE NAME INSTITUTION

Licensing Commissioner Amos Siwila LAZ

Dr. Leonard Kalinde Boz

Mrs. Namakau Mundia-Ntini PIA

Mr. Lishomwa Muuka ERB

Compensation Fund Commissioner Jonathan Chipili BOZ

Mrs. Beatrice Nkanza LuSE

Mr. Dominic Kabanje BaDEx

Dr. Francis Ndilila ZACCI

Ms. Abigail L Chimuka LAZ

Ms. Ann Chala Kalulu BAZ

Risk & Audit Commissioner Gloria Munkombwe NGOCC

Mr. Frederick Banda ZICA

Mr. Moses E. Zulu ZICA

Mr. Felix Nkulukusa MoFNP

Staff & Remuneration Committee Commissioner Ben Zulu Zamseed

Ms. Clementina Simwanza ZICTA

Ms. Namucana C. Musiwa (IPP) ZHRMI

Ms. Laura Sitali Independent

Market Transactions Commissioner Joe H Simachela MoJ

Mr. Andrew Chipwende ZDA

Mr. Chilufya Sampa CCPC

Dr. Fortune Kamusaki MoF

Mr. Anthony Bwembya PACRA


THE SEC COMMITTEE MEMBERS

53

Bo

ard

Co

mm

itte

es•

Com

pens

atio

n F

und

Com

mitt

ee•

Lice

nsin

g C

omm

ittee

•M

arke

t Tra

nsac

tions

Com

mitt

ee•

Sta

ff R

emun

erat

ion

Com

mitt

ee•

Ris

k &

Aud

it C

omm

ittee

SE

C B

oard

R

isk

& A

ud

it C

om

mit

tee

Sec

reta

ry &

Chi

efE

xecu

tive

Dir

ecto

r –

Mar

ket

Tra

nsa

ctio

ns

&In

vest

men

ts

Dir

ecto

r –

En

forc

emen

t &

Leg

alS

ervi

ces

Dir

ecto

r –

Mar

ket

Su

per

visi

on

&D

evel

op

men

t

Man

ager

–A

dm

in

Sec

reta

ryS

ecre

tary

Driv

er

Offi

ceA

ssis

tant

Exe

cutiv

eA

ssis

tant

Per

sona

lA

ssis

tant

Lega

lO

ffice

r

Man

ager

–F

inan

ceM

anag

er –

Mar

ket

Tra

nsa

ctio

ns

Man

ager

–M

arke

tS

up

ervi

sio

n

Inte

rnal

Au

dit

or

54

SEC ORGANISATION CHART

LuSE

General Manager: Mrs. Beatrice Nkanza

Address (physical): Lusaka Stock Exchange Limited

3rd Floor,The Exchange Building

Farmers House at Central Park

North Wing

Cairo Road

Lusaka

Address (postal): P.O. Box 34523

Lusaka Main

Lusaka

Telephone: +260 211 228391/228537

Facsimile: +260 211 225969


Website: www.luse.com

BaDex

General Manager: Mr. Allan Thomson

Address (physical): Bonds and Derivatives Exchange

2nd Floor, Central Exchange Building

Central Park

North Wing

Cairo Road

Lusaka

Address (postal): Post. Net Box 334

Private bag E10

Lusaka

Telephone: +260 211 220537

Facsimile: +260 211 220574


Website: www.badex.com


STOCK EXCHANGE DETAILS

55

a) Members of the LuSE

African Alliance Zambia Securities Limited

The Colosseum

Block A, Ground floor

Bwinjimfumu Road

Lusaka

P.O. Box 320308

Tel: +260 211 8405112/13 E-mail:[email protected]

Fax: +260 211 841033

Equity Capital Resources Plc

6th Floor,Kulima Tower

Katunjila Road

P.O. Box 37184

Lusaka

Tel: +260 211 840313 E-mail:[email protected]

Fax: +260 211 236951 Website:www.ecrplczambia.com

Intermarket Securities Zambia Limited

Ground Floor, Building No. 3

South Wing

Cairo Road-North End

P.O. Box 35832

Lusaka

Tel: +260 211 227227/227228/227273 E-mail: [email protected]

Fax: +260 211 227274 Website: www.intermarketsecurities.co.zm

Madison Asset Management Company Limited

1st floor Dar-e-salaam House

P.O. Box 37013

Lusaka

Tel: +260 211 223023 Email: [email protected]

Fax: +260 211 233936 Website: www.madisonassets.co.zm

Pangaea/EMI Securities Limited

3rd Floor, Farmers House at Central Park

North Wing

Cairo Road-North End

P.O. Box 30163

Lusaka


Fax: +260 211 220925 Website: www.pangaeapartners.com/zamindex.htm

DEALERS

56

Stockbrokers Zambia Limited

2nd Floor, Design House

Dar es Salaam Place (off Cairo Road)

P.O. Box 38956

Lusaka

Tel: +260 211 227303/232456 E-mail: [email protected]

Fax: +260 211 224055 Website: www.stockbrokerszambia.com.zm

b) Non-Members of the LuSE

ABC Investment Services Limited

Ground Floor, Pyramid Plaza

Corner Church and Nasser Roads

P.O. Box 39501

Lusaka

Tel: +260 211 257977, 257980 E-mail: [email protected]

Fax: +260 211 257970-6 Website: www.africanbankingcorp.com

Aon Zambia Pension Fund Administrators Limited

Acacia Park

Thabo Mbeki Road

Lusaka

P.O. Box 35403


Fax:+260 211 258061/258099

Citibank Zambia Limited

Head Office Building

Cha ChaCha Road-South End

P.O. Box 30037

Lusaka


Fax: +260 211 226064 Website: www.citibank.co.zm

Focus Financial Services Limited

1st floor, Building 3

Acacia Park

Thabo Mbeki Road

Lusaka

P.O. Box 345536

Tel: +260 211 291310/11/13/14

Fax: +260 211 291311 Website: www.focus.co.zm


57

DEALERS (continued)

Grofin Zambia Limited


Olympia

Lusaka

P.O. Box 33758

Tel: +260 211 295875/6 Generic email: [email protected]

Fax: +260 211 295876 Website: www.grofin.com

Investrust Bank Plc

Investrust House

Plot 4527/8 Freedom Way

P.O. Box 32344

Lusaka

Tel: +260 211 238733-5 E-mail: [email protected]

Fax: +260 211 237060 Website: www.investrustbank.co.zm

J M Busha Capital (Z) Limited

Suit 6 & 7

Felopater House

Kabelenga Road

Lusaka

P.O. Box 31103


Fax: +260 211 237443

Kukula Capital Plc

Foxdale Court Office Park

Plot 609 Zambezi Road,

Roma

Lusaka


Website: kukulacapital.com

Lawrence Paul Investment Services Limited

5th Floor, Design House

Dar es Salaam Place (off Cairo Road)

P.O. Box 35008

Lusaka


Fax: +260 211 220454 Website: www.laurencepaul.com

Lloyds Financials Limited

4th Floor, NAPSA Godfrey House

Corner Kabelenga/Longolongo Roads

P.O. Box 390035

Lusaka


Fax: +260 211 238473 Website: www.lloydsfinancials.co.zm

DEALERS (continued)

58

MfumuKazi Capital Partners Limited

No. 40 Bwinjimfumu Road

Lusaka

Stanbic Bank Zambia Limited

1st, 2nd, 4th and 6th Floors, Woodgate House

Cairo Road-South End

P.O. Box 31935

Lusaka


Fax: +260 211 225380 Website: www.stanbicbank.co.zm

Standard Chartered Bank Zambia Plc

Standard Chartered House


P.O. Box 31934

Lusaka


Fax: +260 211 222092/225337 Website: www.standardchartered.com/zm

TN Medical Support Services Limited

Ground Floor

Indeco House

Cairo Road

Lusaka

P.O. Box 34951


Fax: +260 211 840885

Treasfin Securities Limited

Plot 16794, Diplomatic Centre

Mass Media off Alick Nkhata Road

P.O. Box 51058

Lusaka Email: [email protected]

Zambia National Commercial Bank Plc



P.O. Box 33611

Lusaka


Fax: +260 211 223082 Website: www.zanaco.co.zm


59

DEALERS (continued)

DeVere and Partners Investment Services Zambia Limited


Olympia

Lusaka


Fax: +260 211 257114 Website: www.devere-group.com

Entrust Financial Services Limited

Alstone Cottage

Plot 377a/6a

Bishops Road

Kabulonga

P.O. Box 31252

Lusaka

Tel: +260 211 260260/260800 Email: [email protected] or [email protected]

Fax: +260 211 266399

Errol Neal Molver

Plot 12C, off Kabulonga Road

Kabulonga

Lusaka

Profin Limited

17 Matandani Road

Rhodespark

Lusaka

P.O. Box 31425


Fax: +260 211 254360 Website: www.theprofingroup.com

Zambia Capital Partners Limited

5th Floor Mpile House (former Anglo American Building)

74 Independence Avenue

P.O. Box 35404

Lusaka

Tel: +260 211 250292/250298 Email: [email protected]

Fax: +260 211 250306

INVESTMENT ADVISORS

60

AEL Zambia Plc

Plot 1168/M

Kitwe-Mufulira Road

P.O. Box 40092

Mufulira

Tel: +260 212 990945-9 E-mail:[email protected]

Fax: +260 212 412749 Website: www.ael.co.za

Listed on 23rd October, 2006

BAT Zambia Plc

Plot 20992, Kafue Road

Makeni

P.O. Box 30162

Lusaka


Fax: +260 211 272271/272291

Listed on 15th December, 1996

BP Zambia Plc

3rd Floor, Mukuba Pension House

Plot 5309, DedanKimathi Road

P.O. Box 31999

Lusaka


Fax: +260 211 223645

Listed on 18th July, 2002

Cavmont Capital Holdings Zambia Plc

Unit C, Counting House Square

(behind Arcades Shopping Centre)

Thabo Mbeki Road

P.O. Box 32322

Lusaka


Fax: +260 211 256074 Website: www.cavmont.com.zm

Listed on 13th September, 2006

Celtel (later Zain) Zambia Plc

Celtel Head Office

Addis Ababa Drive

P.O. Box 320001

Lusaka

Tel: +260 211 250707, (0977) 770077 E-mail: [email protected]

Fax: +260 211 250595 Website: www.zm.zain.com

Listed on 11th June, 2008


LISTED COMPANIES

61

Lafarge Cement Plc

Farm No. 1880

Kafue Road

P.O. Box 32639

Lusaka


Fax: +260 211 278134

Listed on 22nd May, 1995

Copperbelt Energy Corporation Plc

23rd Avenue, Nkana East

P.O. Box 20819

Kitwe


Fax: +260 212 223445/244040 Website: www.copperbeltenergy.com

Listed on 21st January, 2008

Farmers House Plc

1st Floor, Farmers House at Central Park

North Wing

Cnr Cairo and Church Roads

P.O. Box 30012

Lusaka


Fax: +260 211 222906


Investrust Bank Plc

Investrust House


P.O. Box 32344

Lusaka

Tel: +260 211 238733-5 E-mail: [email protected]

Fax: +260 211 237060 Website: www.investrustbank.co.zm

Listed on 21st June, 2007

Metal Fabricators of Zambia (ZAMEFA) Plc

Plot 1400 Cha ChaCha Road

P.O. Box 90295

Luanshya

Tel: +260 212 510599/511175/511589 E-mail:[email protected]

Fax: +260 212 512637


LISTED COMPANIES (continued)

62

National Breweries Plc

Plot 1609, ShekiSheki Road

P.O. Box 35135

Lusaka


Fax: +260 211 246326

Listed on 16th March, 1998

Pamodzi Hotels Plc

Pamodzi Hotel Complex

Plot 463, Church Road

P.O. Box 35450-Lusaka Main

Lusaka


Fax: +260 211 254005

Listed on December 21st, 2001

Shoprite Holdings Limited

Cnr William Dabs and Old Paarl Roads

Brackenfell 7560

P.O. Box 215

Brackenfell 7561

Western Cape

South Africa

Tel: +27 21 980 4000 E-mail: [email protected]

Fax: +27 21 980 4050 Website: www.shopriteholdings.co.za

Listed on 19th February, 2003

Standard Chartered Bank Zambia Plc

Standard Chartered House

Cairo Road, South End

P.O. Box 31934

Lusaka


Fax: +260 211 222092/225337 Website: www.standardchartered.com/zm

Listed on 30th November, 1998

Zambeef Products Plc

Plot 1, Nkachibaya Road (off Addis Ababa Drive)

Private Bag 17, Woodlands

Lusaka


Fax: +260 211 252496 Website: www.zambeef.co.zm

Listed on 5th April 2005



63

Zambia Bata Shoe Company Plc

P.O. Box 30479

Stand 6437, Mukwa Road

Heavy Industrial Area

Lusaka


Fax: +260 211 245663

Listed on 31st March, 2009

Zambia Consolidated Copper Mines

(ZCCM) Investment Holdings Plc

1st Floor, Mukuba Pension House

Plot 5309, DedanKimathi Road

P.O. Box 30048

Lusaka


Fax: +260 211 220449/221057 Website: www.zccm-ih.com.zm

Listed on 24th January, 1996

Zambian Breweries Plc

Plot 6438, Mungwi Road

Heavy Industrial Area

P.O. Box 31293

Lusaka


Fax: +260 211 245787

Listed on 9th June, 1997

Zambia National Commercial Bank Plc



P.O. Box 33611

Lusaka


Fax: +260 211 223082 Website: www.zanaco.co.zm

Listed on 27th November, 2008

Zambia Sugar Plc



P.O. Box 33611, Lusaka

Nakambala Sugar Estate

Livingstone Road

P O Box 670240 , Mazabuka


Fax: +260 213 230385

Listed on 28th August, 1996


64

Arcades Development Plc

c/o Arcades Shopping Centre

Plot 2374, Great East Road

P.O. Box 33667

Lusaka


Fax: +260 211 256730 Website: www.arcades.co.zm

Quoted on 20th May, 2002

Barclays Bank of Zambia Plc

Kafue House


P.O. Box 31936

Lusaka


Fax: +260 211 222519/226185 Website: www.barclays.com/africa/zambia/

Quoted on 9th March, 2005

Chambishi Metals Plc

Sub-division L and M of Lot No. 10/M

Kitwe-Chingola Road

P.O. Box 21151 (Kitwe)

Chambishi


Fax: +260 212 744035

Quoted on 25th January, 2000

Chibuluma Mines Plc

Chibuluma Mine

P.O. Box 260499

Kalulushi


Fax: +260 212 749799/749299

Quoted on 22nd December, 1999

Kansanshi Mining Plc

Mine Site

P.O. Box 110835

Solwezi

Tel: +260 212 658000 E-mail: [email protected]

Fax: +260 212 658300

Quoted on 29th June,1999 (as Cyprus Amax Kansanshi Plc)


QUOTED COMPANIES

65

Nanga Farms Plc

Farm Plot No: F/122A/Rem

Lubombo Road

P.O. Box 670079

Mazabuka

Tel: +260 211 251894/5, (0213) 235340/1 E-mail: [email protected], [email protected]

Fax: +260 211 251894, (0213) 235341

Quoted on 20th February, 2007

Prima Reinsurance Plc

Plot No. 13/62 Central Street

Chudleigh

Post.Net Box 658

Private Bag E 891

Lusaka

Tel: +260 211 292939, 840158 E-mail: [email protected]

Fax: +260 211 290323 Website: www.prima-re.com

Quoted on 20th December, 2007

QUOTED COMPANIES (continued)

66

COMPANIES WITH LISTED DEBT SECURITIES

Barclays Bank of Zambia Plc

Kafue House


P.O. Box 31936

Lusaka

Tel: (0211) 227659/228858/228866 E-mail: [email protected]

Fax: (0211) 222519/226185 Website: www.barclays.com/africa/zambia/

Debt securities listed on 9th May, 2003

Development Bank of Zambia

Development House

Katondo Street

P.O. Box 33955 Lusaka Main

Lusaka

Tel: (0211) 228576 E-mail: [email protected]

Fax: (0211) 222426 Website: www.dbz.co.zm

Debt securities listed on 28 February, 2007

Investrust Bank Plc

Investrust House


P.O. Box 32344

Lusaka

Tel: (0211) 238733-5 E-mail: [email protected]

Fax: (0211) 237060 Website: www.investrustbank.co.zm

Debt securities listed on 20th July, 2007

COMPANIES WITH QUOTED DEBT SECURITIES

Lunsemfwa Hydro Power Company Limited

Plot 5047 (Former ZCCM Mine Complex)

P.O. Box 80237

Kabwe

Tel: (0215) 223331/224597 E-mail: [email protected]

Fax: (0215) 224754

Debt securities quoted on 29th August, 2003


COMPANIES WITH LISTED OR QUOTED DEBT SECURITIES

67

Documents

Securities and Exchange Commission2012/2013 ANNUAL REPORT 03 THE CURRENT SEC MANAGEMENT. OVERVIEW On 13th September 2012, Zambia saw the successful issue of the inaugural 10 year Sovereign