Copperbelt Energy Corporation Plc 2015 annual report

CONTENTS

CEC and its Group entities

Statement from the Chairman

Report from the Managing Director

Report from the Chief Financial Officer

Corporate Social Responsibility Report

Group Financial Statements and

Financial Statements for the year ended

31 December 2015

248

1422

44

The Copperbelt Energy Corporation PLC (CEC) is an independent power transmission, distribution and generation company with interests in closely linked businesses in Zambia and the African region, including optic fibre based telecommunications.

A member of the Southern African Power Pool and listed on the Lusaka Stock Exchange, CEC has a deep insight into the mining industry, enabling it to provide quality electricity and other power products and services to the majority of the mines in Zambia.

Well positioned as a developer of energy infrastructure in Africa and respected in the region for its skills in designing and operating transmission systems, CEC has emerged as a credible independent power generating company, with some strategic generating projects in the pipeline.

• Over 60 years of experience in supplying power to the mines• Circa 1,000 kilometres of 220kV and 66kV transmission lines• 540 kilometres of optic fibre on power lines• 41 High Voltage substations and dedicated control centre• 80MW embedded thermal generation• Power transmission for national utilities – Zambia and Democratic Republic of Congo (DRC)• Owns and operates Zambian part of the Zambia – DRC Interconnector line• Accounts for over 50% of power consumed in Zambia

CEC Liquid Telecom owns and operates a national long haul broadband fibre based backbone from Chirundu to Kasumbalesa. Its business is the provision of competitive high quality services through wholesaling of national and international fibre bandwidth capacity, terrestrial internet bandwidth and lease of dark fibre for both short and long haul, locally and internationally, and with access to submarine fibre cables.

CEC Liquid Telecom’s market segment is in wholesale. The infrastructure is neutral and operated in a non-exclusive manner in Zambia, Zimbabwe, Lesotho, Botswana and South Africa.

CEC Liquid Telecom is a joint venture company of CEC and regional fibre infrastructure builder and operator, Liquid Telecommunications Holdings of Mauritius. It has become the preferred wholesale broadband connectivity telecommunications company both at national level and within the region.

Hai Telecommunications Limited (Hai Zambia) is an integrated communications service provider supplying high speed internet services and inter-office connectivity to institutional and retail customers in Zambia using optic fibre as its core technology.

Formerly known as Realtime Technology Alliance Africa Limited, Hai Zambia pioneered the roll out of fibre to businesses and positioned itself as the preferred internet and connectivity service provider for institutional customers in Zambia. The company provides services to about 50% of Zambia’s large corporates.

Wholly owned by CEC Liquid Telecom, Hai Zambia is able to seamlessly provide services to its multinational customers beyond Zambia’s borders. From a previous niche focus of institutional investors, Hai Zambia has extended its service provision to the retail consumer market segment.

Hai Zambia is fast becoming the internet service provider of choice in Zambia due to its increasingly differentiated service offering and unmatched support.

CEC AND ITS GROUP ENTITIES

4 COPPERBELT ENERGY CORPORATION PLC AND ITS SUBSIDIARIES

CEC Africa Investments Limited (CEC Africa) is an investments holding company established to develop, finance and operate power infrastructure projects across Sub-Saharan Africa (SSA).

A pan-African power assets developer, CEC Africa provides access to an African power platform with attractive assets across SSA and has a strong pipeline of both green field and brownfield power projects in development across Africa.

Riding on the opportunity presented by Africa’s significant power infrastructure deficit and growing investment interest for infrastructure, CEC Africa offers an attractive investment vehicle in Africa’s energy infrastructure sector.

Abuja Electricity Distribution Plc (AED Plc) is 60% owned by KANN Utility Limited (KANN), itself a 75% subsidiary of CEC Africa Investments Limited. KANN is the operator of AED Plc and responsible for implementing the business plan.

AED Plc is a power distribution company in Nigeria with a franchise to distribute and electricity in four states comprising the Federal Capital Territory of Abuja, Niger, Kogi and Nasarawa. The AED Plc distribution zone covers 133,014km2 which has a population of at least 10.5 million people in 2.3 million households, dominated by the Federal Capital.

AED Plc has around 700,000 customers and an average electrification rate of 27%.

North South Power Company Limited (NSP) has the concession to operate the Shiroro Hydroelectric Power Plant. The hydro plant, commissioned in 1990, is presently Nigeria’s newest hydroelectric power plant and is in good working order. It is located in the Niger State, 500 metres downstream from the confluence of the Kaduna and Dinya Rivers, and is located within the AED Plc franchise distribution zone. It has an installed capacity of 600MW, consisting of 4x150MW generating units at a head level of 97 metres. The plant’s water reservoir is capable of storing approximately 7bnm3, which allows for a 42% utilization factor.

The Group holds an effective 20% minority equity stake.

5ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2015

STATEMENT FROM THE CHAIRMANHanson Sindowe

The Group, in 2015, had to tread some difficult waters as the local and international economic storm clouds tested the resilience of the business and its ability to identify and ride on those opportunities that shore up overall performance while deftly scaling the challenges for a positive turnaround. I am pleased to report that 2015 delivered commendable performance for the Zambian operations, relative to the operating environment; while we made operational and regulatory improvements in Nigeria.

Group Health, Safety, Environment and Social (HSES) performance

Maintaining high standards of safety, health and environmental management is a flag the Group does not wish to let down but keep flying high not only for the good of the business but also for the benefit of the customers we serve and the communities we operate in.

I am, thus, pleased to report that our HSES performance in 2015 bettered that of 2014 across the Group as indicated by an impeccable 5.57 million hours (2014: 4.74 million) without a system lost time accident and a 62.5% reduction in road traffic accidents at CEC Plc, reduced fatalities at Abuja Electricity Distribution Plc (AED Plc) in Nigeria and a positive result in other key safety indicators such as near-miss reporting, which tremendously rose from 17 in 2014 - the year in which reporting the concept was introduced - to 2,995 in the period under review; while delivery of


toolbox safety talks, also introduced the previous year, steadily increased throughout the year across all AED Plc area offices. At North South Power Company Limited (NSP), CEC Liquid Telecommunication Limited and Hai Telecommunications, the good HSES performance recorded in 2014 was generally maintained.

I am quick to note that a great work still lies ahead of us to get to a level, at AED Plc, where HSES is of the expected and acceptable world-class power sector standard; when delivering HSES excellence becomes a culture for every member of staff. This will, in large part, be achieved by providing adequate capacity building training and exposure across the establishment and I am glad to report that the company is soon, in 2016, to embark on this training, starting with the executives who are expected to provide the necessary leadership. In the meantime, multiple interventions including corrective action measures continue to be taken.

Group Operational and Financial Performance

The business operates within an environment that is affected by broader happenings and most telling in 2015 at a global scale was the slowed economic performance of Asian economies, most significantly China, which is a huge trading partner of most African economies. This was combined with falling currencies and depressed commodity prices, notably of oil and copper, which two are important for our business within the context of our operations in Nigeria and Zambia respectively.

In Zambia, the problem of inadequate energy availability worsened in the latter part of the year resulting into the declaration of a force majeure by CEC Plc’s major supplier of electricity, ZESCO Limited, in accordance with the Bulk Supply Agreement as it was unable to supply CEC Plc’s full energy requirements. CEC Plc was in turn compelled to declare to its customers a force majeure within the provisions of our contracts, the effect of which limited the amount of locally sourced power the Company could supply to its customers to 70% of their normal requirements. The effect of this supply cutback on financial performance was ameliorated by the Company’s ability to make deeper inroads into the Democratic Republic of Congo power supply market, and to partly import power from within the region to make up the local energy supply difference as our customers required.

From a customer perspective, falling copper prices and other factors in the economic environment did not bode well with their operational sustainability as they saw themselves threatened, which resulted in some cutting back on operations and labour. We remain optimistic that our mining customers’ operations are viable, sustainable and positive going forward especially that a number of them are still pursuing expansionist agendas, giving us more reason to take a bullish view on the mining industry.

On the Nigerian side, the wider operating environment was also plagued with economic challenges somewhat similar to those seen in Zambia with respect to currency depreciation and record low oil prices on the world


market. Closer to the power sector, a huge challenge throughout 2015 was the insufficient revenue inflows across the power industry. It is gratifying to note that the Federal Government is alive to the liquidity challenges prevailing in the sector and is participating in mitigating initiatives, including the Central Bank of Nigeria sponsored Nigeria Electricity Market Stabilization Facility, a fund of some USD1.8 billion, in which AED Plc is earmarked to participate. The intended primary use of funds to be obtained from that facility is the part settlement of liabilities to the market operator, accumulated before the coming into effect of the Transitional Electricity Market. Non-cost reflective tariffs in 2015 continued to impact negatively on the company’s financial performance.

Even with these challenges, I am comforted to report that AED Plc posted increased revenue of USD33 million, mainly on account of the 2015 tariff increase and performance improvements. The company also remained cash flow neutral owing to the rules pertaining to the treatment of the market operator’s bill as outlined in the Interim Rules 2. Notable positives for the company in 2015 include the approval by the regulator of AED Plc’s 10-year tariff plan which will allow the company to fully implement its business plan going forward. As well, available power saw a steady increase in the latter part of the year, a development that had a positive effect on consumers and their perception of the power industry generally.

With regard to NSP, the same liquidity challenges affecting the distribution sector extend to the generation sector. Although the Transitional Electricity Market was declared in February, certain contracts are yet to be activated, resulting in underpayments and accumulation of liabilities. There are signs of market recovery on the horizon, however, as the Government has shown willingness to address the market’s challenges. Even with the difficult business environment, NSP grew its gross profit from USD44.9 million to USD47.4 million while total assets grew by 6%.

On the telecommunications side, a Group restructuring earlier in the year saw Realtime Technology Alliance Africa Limited (Realtime), formerly a 50% joint venture subsidiary of CEC Plc, become fully owned by CEC Liquid Telecommunication Limited (CEC Liquid Telecom) following a transfer of CEC Plc shareholding to CEC Liquid Telecom. Subsequently, Realtime rebranded to Hai Telecommunications Limited (Hai Zambia). CEC Plc remains a 50% shareholder of CEC Liquid Telecom. Hai Zambia now has wider service offerings to the market, including retail consumers, while maintaining its niche market of institutional customers. Both businesses continue to grow and consolidate their positions in the market.

Outlook

We are sure that some of the challenges experienced in 2015, such as the energy situation in Zambia, will linger for a while still but we have every confidence that CEC Plc will continue to be robust in 2016 and beyond. With a safe and reliable network; innovative solutions to the challenges faced; a management team focused on increasing and delivering value; as well as a dedicated and knowledgeable workforce, I have no doubt that the Company’s operational and financial performance can only get stronger as projects in the works conclude and start contributing to the bottom line. Identifying and seizing opportunities will continue to be a stand-out factor for business growth going forward.

The recent affirmations of the policy and regulatory framework by both the Federal Government and the regulator, give us the confidence that all stakeholders in the Nigerian power sector are desirous of a properly functional, successful and sustainable power industry. We look forward to 2016 with great anticipation in view of the tariff approvals and adjustments taking place effective 1 February 2016. The business in Nigeria will continue to be resilient and begin to turn around and post the kind of performance that shareholders would look forward to.

The Group will continue to pursue viable projects in the Sub-Saharan African power space and we expect to make significant progress with respect to the 128MW CECA Sierra Leone thermal power project within 2016.

>>> STATEMENT FROM THE CHAIRMAN



REPOR T FROM THEMANAGING DIREC TOROwen Silavwe

Overview

Despite the headwinds that we faced

in our operating environment both

in Zambia and Nigeria, the overall

performance for 2015 has not

significantly been impacted. In Zambia,

in particular, Copperbelt Energy

Corporation Plc (CEC Plc) delivered a solid

performance on the back of strong growth

in international power sales. While the

power shortage that began during the

year, coupled with falling commodity

prices on the global market, eventually

impacted the local power sales, especially

in the final quarter of the year, our income

from international power sales to the

Democratic Republic of Congo (DRC)

remained bullish, enabling the Company

to more than make up for the potential

revenue loss that it faced.

In Nigeria, our investments, managed through our investment platform CEC Africa Investments Limited (CECA), continued to face challenges similar to what we saw in 2014. These include broader sector liquidity shortage on account of below cost tariffs in


addition to the large capital injection required to spur operational improvements. The year, however, ended on a positive note as during the last quarter of the year, regulatory pronouncements were made aimed at moving the applicable tariffs in the sector towards cost reflectivity. This move by the Nigerian Electricity Regulatory Commission is critical for the viability of the electricity sector in general and that of our investments in particular as it will inject the much needed liquidity in the market. Together with operational improvements that we are already implementing, these factors lay a firm foundation for strong business performance for CECA in the near future.

Health, Safety, Environment and Social

During the year, we continued to pursue our vision of achieving excellence in health, safety, environment and social (HSES) across the Group. At CEC Plc, the Company clocked 5.57 million man hours without a system related lost time accident. Such an incident last occurred in 2010. This record is commendable and I take the opportunity to thank all our employees for actively observing safe work practices that have been instrumental in helping us achieve this record. We also recorded improvements in a number of safety metrics in comparison to the previous year. For example, we reduced the number of total lost time accidents (LTIFR) from 0.21 in 2014 to 0.08 in 2015 while the severity of injuries sustained from lost time accidents (LTISR) improved from 5.83 in 2014 to 1.37 in 2015. With such a good record, the chance that something may go wrong increases as complacency may easily set in. There should be no room for complacency - we need to continuously work on improving our performance and record in this area.

At Abuja Electricity Distribution Plc (AED Plc), we have continued to implement a number of HSES programmes through which we are beginning to see compliance becoming an integral part of business operations. Compliance is not the goal, HSES excellence is! In 2015, we rolled out a number of HSES work plans which we continue to monitor. The 4 broad directions covered in our plans are:

• Our People: We safeguard the health and safety of our people (employees and contractors)

• Our Environment: Understanding and managing the impact of our operations and projects on the environment

• Our Community: Enhancing the lives of the communities in which we operate

• Our Risks: Proactive identification, assessment and management of key HSES risks in our business

Even with all the progress made this far, a lot more work still remains to be done to improve on our safety performance metrics at AED Plc. There was a 30% reduction in the number of fatalities at the company in the year (20 in 2014 compared to 14 in 2015). We fully recognize the need and remain committed to work even harder to sustain this reduction while preventing

further deaths. AED Plc will collaborate more closely with all stakeholders – regulators, host communities, NGOs and all our employees to ensure that nobody gets in harms’ way at any of our facilities. Specific initiatives geared towards fatality prevention include: continuous network infrastructure improvements, access restriction of unauthorized persons to company facilities, increased community awareness of risks associated with company infrastructure, dedicated customer service centres where faults are reported for quick resolution and continued implementation of the AED Plc Fatality Prevention Plan.

Zambian Operations

In Zambia, CEC Plc’s main business focus remains the delivery of reliable and secure power supply to our mining customers, provision of emergency power supply during periods of non-availability of the national power sources and providing wheeling services. We recognize that our ability to deliver on this undertaking is impacted by the state of the wider national power network. In 2015, the drought experienced during the 2014/2015 rainy season imposed generation constraints whose consequences continue to be felt nation-wide. While the Company was able to deliver all power requirements of our mine customers in Zambia from local sources in the first 9 months of the year, the worsening power situation forced ZESCO Limited (ZESCO), our major power supplier, to declare a force majeure under the Bulk Supply Agreement (BSA), thereby reducing their obligation to meet our needs during this challenging time to 70% of our full power requirements.

We in turn declared a force majeure in accordance with the Power Supply Agreements (PSAs) with our customers, which led to a reduction in the power we could supply them from Zambian sources to 70% of their requirements. I am happy to report that we, however, managed to enter into alternative supply arrangements with our customers under which we sourced power from entities within the Southern African Power Pool (SAPP) to make up for a large portion of the 30% reduction, which we could not supply from Zambian sources. Since this power came at a higher price than the locally sourced power, our customers had a choice as to how much of this power they wished to access. To close the 30% supply gap, most of the customers employed a combination of internal operational efficiency improvements and accessing the power we made available from SAPP sources.

Alongside the power supply challenges, our customers grappled with falling commodity prices on the global market. We saw the combination of the unfavourable copper prices and the effects of the power deficit drive a shift in the focus by most of the mines to cost cutting and efficiency improvements at their existing operations while investments in already committed projects continued. While this would seem to be a sensible reaction driven by immediate bottom line concerns, there is a likelihood it may translate into setbacks in terms of future commodity supply and inventories; with available forecasts pointing to copper prices remaining depressed for the next twelve to eighteen months.


Of note is the fact that the effects of falling commodity prices and the power deficit largely manifested in the final quarter of the year as our power sales to the mines had remained strong for the best part of the year. By the fourth quarter, however, sales to the mines dipped by about 10% overall and we forecast that this reduction in demand would top at 15% going into 2016. Year-on-year, energy sales to our customers declined by about 3% - from 4,208 GWh in 2014 to 4,092 GWh in 2015. Going into 2016, we anticipate an average reduction in power uptake by the mines of between 10% to 15%. Domestic wheeling, which is the provision of transmission services to ZESCO for the power it supplies to its domestic, industrial and commercial customers on the Copperbelt also declined by about 4% year-on-year on account of the load shedding program instituted to manage the power deficit..

Despite the above challenges we, on the whole, delivered an improved financial performance at on the back of our international power sales business segment that continues to post good growth. This business segment maintained a strong performance, recording an income growth of more than 100% over 2014.

The tariff increment of about 29% passed by the Energy Regulation Board (ERB) in April 2014 remained an unresolved matter of dispute before the courts of law. However, towards the end of the year, the Government through the Ministry of Energy and Water Development commenced a fresh tariff adjustment process through which a uniform tariff of 10.35 USc/kWh to all mines in Zambia was announced. The main cost driver for this increase in tariffs is the increasing cost of providing electricity to customers; mostly driven by new sources of power which cost a lot more than the power from legacy power stations. Implementation of the new uniform tariff is being undertaken in 2016.

Efforts to modernize and enhance the capacity of the transmission and distribution network continued throughout 2015. We managed to undertake further network augmentation works for the transmission backbone through installation of more 120MVA, 220/66kV transformers while more medium sized transformers and switchgear were installed to replace aging ones at customer supply points. With the current reduction in demand, we are likely to slow down on the program with respect to capacity upgrade of our transmission backbone in 2016 though equipment modernization and upgrades at customer supply points will accelerate. Further upgrades to the network backbone will resume when the demand fundamentals linked to power supply indicate an upward trend, which should culminate into the revision of the rolling 10-year capital expenditure programme.

Nigerian Operations

2015 continued to be a challenging year for the Nigerian operations but it ended on several positive notes. The below expectation financial performance of the Nigerian Electricity Supply Industry (NESI) was a drag on both

>>> REPOR T FROM THE MANAGING DIREC TOR


of our operating assets. During the fourth quarter, however, several regulatory pronouncements signalled the long awaited commencement of an electricity market in Nigeria guided by cost reflective tariff planning principles. This is expected to inject much needed liquidity in the sector, which will positively affect the profitability of the distribution companies and the cash flows to the generation entities.

During the year, the strategy was reviewed to focus more on stabilizing existing operations, away from a more growth oriented strategy. This strategy refocus is necessary to allow the company an opportunity to build up capability for a future, sustainable growth programme within two to three years. Under the new strategic focus, CECA will first concentrate on turning around the operations of AED Plc and establishing steady cash flows from North South Power Company Limited (NSP). Attention will also be paid to completing the development and construction of the first phase of the 128MW HFO power plant in Freetown under CEC Africa Sierra Leone.

At AED Plc, business infrastructure investments continued to be made including in ICT systems to support new billing and vending platforms. The year also saw the launch of a Super Vendor Program through which resellers are being recruited to increase the footprint of vending points from 50 to over 300 initially, which should result in increased customer accessibility. Resellers also have a vested interest in protecting sales in their area and, therefore, also act as an outsourced revenue protection system, guarding against commercial losses. The major development for AED Plc was the approval by the NERC of the company’s ten-year tariff plan in the fourth quarter, after protracted negotiations. This plan has set AED Plc on a path to commercial viability. The plan calls for significant operational improvements, as well, to be viable.

Operations at NSP were stable during 2015, with hydrologically imposed generation constraints at Shiroro Hydro Power Plant, in the first eight months of the year, giving way to above normal generation in the fourth quarter, following record water in-flows during the months of August and September. The year ended with about a 20% shortfall on planned generation. With the foreseen improvements in the liquidity of the NESI, we expect NSP to focus on ensuring that some cash begins to flow upstream at the earliest. There is an additional accounting issue with respect to a mismatch between the reporting currency, the Naira, and the currency of the 30-year concession agreement, the US Dollar. This mismatch results in an accounting loss whenever the Naira depreciates against the US Dollar, and this loss can sometimes be large enough to wipe out the profit for a given period. NSP has already engaged the government, through the Bureau of Public Enterprises, in negotiations with a view to resolving the issue as soon as possible.

There has been good progress made towards completing the development phase of the first 50MW of the Sierra


Leone generation project. An EPC contractor has been selected and all fuel supply related decisions, including supplier identification and logistics, have been made. The project has gained the support of an enviable club of lenders from the development finance institution (DFI) universe – debt is fully subscribed. The PPA, originally ratified by the Government of Sierra Leone in May 2014, is being updated to reflect the actual EPC, fuel and debt conditions. By December 2015, it was expected that the project would reach financial close during 2016.

Telecoms Business

Our investments in the telecommunications sector where we own 50% of CEC Liquid Telecommunication Limited (CEC Liquid Telecom) – the other 50% owned by Liquid Telecommunications Holdings Limited – which in turn wholly owns Hai Telecommunications Limited (Hai Zambia), recorded encouraging results in 2015. We are seeing good growth coming from the business, consolidating its position and brand name in the market. CEC Liquid Telecom has continued to cement its position as the preferred wholesale broadband connectivity telecommunications company in Zambia, with the drive to improve the quality and affordability of the services it offers.

The company, whose backbone now spans the full breadth of Zambia, continued to grow its fibre footprint along inner town roads and highways from 2,494km in 2014 to 2,730km in 2015 and at the same time expanded its product portfolio using the Fiber to the Home (FTTH) service. The FTTH project roll-out has covered most parts of Lusaka and is set to be extended to other parts of the country in the coming year. Through these actions, the company is not only enhancing the quality of its service provision but is also creating a firm footing upon which to continue with its growth story into the future. Importantly, I am pleased to report that CEC Liquid Telecom has now turned profitable and we remain confident that the company will grow its profitability in the coming years.

Of importance to note on Hai Zambia (formerly Realtime), is the Group restructuring which resulted into a change in its shareholding during 2015. Hai Zambia became a wholly owned subsidiary of CEC Liquid Telecom, effectively becoming the latter’s retail arm; albeit operating at arms’ length. This was a momentous development for the business as the move was and is expected to significantly grow the business through synergies with the parent company, CEC Liquid Telecom.

>>> REPOR T FROM THE MANAGING DIREC TOR


Looking Ahead

There are challenges and opportunities that lie ahead of us in the coming year. Notable of these is the need for us to grow and sustain our other income arising from international power sales, which have become an important integral part of our business. This business segment, which three years ago was only 3% of our other income, today constitutes about 20% of our total revenue. We need to continue focusing on strategies that will earn us further growth and sustainability of this business segment.

The power deficit and the associated rolling blackouts that the Zambian market continues to face pose a big challenge to our business. Our response to this challenge lies in us participating in establishing secure sources of power, both local and international. The response to the challenges should include a strategy for incorporating renewable energy sources, especially solar.

Our power network continues to be a mix of new assets, reflecting the best available technology, and aging assets

that are close to their end of technical useful life. Our network is as strong as the weakest link. We, therefore, need to continue investing in the renewal of aging assets and to ensure that no asset failure occurs that may hinder us from delivering the service quality that our customers have come to expect of the CEC brand. This process is complimented by adequate investment in modern tools for condition monitoring and in the enhancement of the skills of our engineers.

Creating value for our shareholders remains paramount. While we believe that the Group provides a unique and compelling opportunity for equity investors, we have noted that its shares on the Lusaka Stock Exchange (LuSE) continue to trade at a significant discount to the potential fully distributed market value. The undervaluation remains of concern to both the Board and Management. Going forward, we will need to evaluate options for unlocking shareholder value.


REPOR T FROM THECHIEF F INANCIAL OFFICER

Mutale Mukuka

Group Performance

2015, despite being a challenging year

where a number of external economic

factors negatively impacted on the

environment in which the business

is undertaken, saw most entities in

the Group retain resilience and taking

positive strides in a number of areas.

Group turnover, at USD616.736 million

(2014: USD580.991 million), increased

by 6% compared to prior year while gross

margin increased 80% at USD157.314

million (2014: USD87.157 million). The

increase in gross margin is on account of

the improvement in the average billing

efficiency from 68% to 81% at Abuja

Electricity Distribution Plc (AED Plc).

The Group’s operating cash costs increased by 2% from USD118.393 million to USD121.315 million. However, total costs increased from USD201.031 million to USD340.908 million representing a 70% rise. The increase is on account of increased provision for bad debt as well as an impairment of Property, Plant and Equipment (PPE) of USD86.138 million.

At the beginning of 2015, the Group reviewed the bad debt provision policy from being “the collectability of


the receivable being assessed at the reporting date based on management assessment of overdue debt being collectable and making a specific allowance for any doubtful receivable based on review of all outstanding amounts at any period” to management to undertake impairment to any receivable overdue for more than 120 days. Management should provide documentary evidence for any deviation from this policy. which may include written undertaking or court order confirming recoverability of the receivable.

With this policy being in place during the year, the provision for bad debt increased to USD94.469 million from USD44.052 million in 2014. The change in policy negatively impacted on the Group profitability but the business is of the view that this policy facilitates the presentation of true and fair financial statements.

To the right is a reconciliation of the total costs to cash costs.

Business Segmentation

The Group Financial Statements are largely formed by two operating entities’ financials, being (i) the Company and (ii) AED Plc, whose size is significant to the overall Group Financial Statements. The investment in NSP of 20% as well as CEC Liquid Telecom’s 50% are equity accounted for in the consolidated financial statements in accordance with IFRS11. Below are summarized financial highlights for the five operating entities in the Group.

All amounts in USD ‘000

CEC Plc AED Plc NSP HAI CEC LIQUID

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

Revenue 291,054 291,948 322,078 289,044 61,746 63,179 6,380 7,017 14,734 13,333

Gross Profit 86,479 88,697 67,231 (1,540) 47,381 44,922 2,499 3,510 10,016 7,294

EBIDTA 69,352 50,135 (215,711) (122,036) 36,403 41,353 (200) 1,084 2,385 1,701

figure 1.12015 2014

Total Costs 340,908 201,031

Impairment of PPE (86,138) -

Depreciation (38,986) (38,586)

Provision for bad debt

(94,469) (44,052)

Cash Costs 121,315 118,393


The Company

Revenue recognised from the ordinary course of business for the Company at USD291 million is comparable to 2014 figure. Operating profit for the year increased by 38% from the previous year to USD69.3 million (2014: USD50.1 million). The increase is attributed to growth in other income, primarily made up of the power supplies to the DRC based mines, which rose to USD31.7 million (2014: USD12.9 million), and the reduction in cash costs on account of the depreciation of the Kwacha to USD34.338 million (2014: USD40.946 million).

REVENUE

OPERATINGMARGIN

OPERATINGCASHFLOW

EBIT2 011

2 012

2 013

2 014

2 015

100- 200 300

-

-

-

-

-

>>> REPOR T FROM THE CHIEF F INANCIAL OFFICER


AED Plc

Revenue increased to USD322 million from USD289 million the previous year due to the February 2015 tariff increase as well as the improvement in billing efficiency. AED Plc recorded an increase in gross profit from the 2014 gross loss of USD1.540 million to gross profit of USD67.231 million.

Operating costs increased to USD285.554 million from USD120.496 million on account of the change in policy on provision for bad debt as explained earlier. Included in the 2015 costs is a provision for bad debt of USD94.469 million and a loss arising from the impairment of PPE of USD86.138 million.

The business recorded a loss during the year but made significant improvements in operational statistics which underpin the business plan. Below is a graph of the ATC&C loss profile for the year 2015.

in USD’millions

in USD’millions in USD’millions

OPERATINGCASHFLOW

REVENUE

ATC&C LOSS PROFILE GRAPH

GROSS MARGIN %

EBITDA

2014

2015

100- 200 400

-

-

300

4 8 12 16


NSP

The business remained profitable with revenue reduced by 2% to USD61.746 million on account of low hydrology relative to the previous year. On the same account, EBIDTA reduced by 8% to USD36.403 million compared to the previous year on account of the increased cost profile.

The key challenge requiring resolution remains the currency mismatch between the revenue and the obligations under the PPA, which are denominated in USD. Revenues continue to be underpinned by the Nigerian Electricity Regulatory Commission (NERC) approved tariffs as opposed to the PPA tariffs (which provide a foreign exchange true up mechanism), and the delay in activating the PPA has negatively impacted on the accounting profits of the business.

On this account, the business recognized foreign exchange losses which resulted in a loss of USD13.3 million compared to the 2014 loss of USD5.056 million.The collection efficiency during the year improved from 65% to 83% of the billable revenue. The increase is on account of improved collections by distribution companies as well as the impact of the funds accessed under the Central Bank of Nigeria facility.

CEC Liquid Telecom

The performance of the business was impressive with revenue growing at 11% while gross margin and EBIDTA increased by 37% and 40% respectively. The business continued to make capital investments in priority projects including new technologies, such as the acquisition of Long Term Evolution (LTE) Spectrum, which is a wireless solution for provision of connectivity solutions that provides an alternative to the fibre solutions being pursued by the business. Additionally, the company upgraded its Multiprotocol Label Switching (MPLS) and the Gigabit Passive Optical Networks (GPON) fibre solutions. Below is a summary trend of the financials for the business.

2015 2014 2013

Revenue 14,734 13,333 10,570

Gross Profit 10,016 7,294 5,176

EBITDA 2,385 1,701 1281

Capital Deployment and Financial Assistance

The Group comprises entities at different development and operational phases. The objective is to allow the Group to retain a diversified portfolio of projects to create options for the future and provide the necessary flexibility and opportunities to support future growth, aimed at shareholder value creation and improved service to our customers. The viability of such opportunities depends on the outlook of each business, as well as the general market and economic conditions.

Each business operates as a stand-alone unit from a finance perspective, based on project finance principles. This implies that there is no cash leakage among the different units within the Group unless, of course, approvals are granted by the Board upon having undertaken a business case for such support. The cash flows of each unit are ring-fenced for this purpose.

During the year, the Company had extended support in form of a guarantee of USD6.5 million to CEC Liquid Telecom financiers. Additionally, a USD4 million facility was approved for funding into CEC Africa operations. The drawdown of this facility is over a 12 month period.

Capital Projects and Investments

On project development, the Group progressed the development of the 128MW Heavy Fuel Oil (HFO) project in Freetown, Sierra Leone, having spent USD3 million during the year; and the 40MW Kabompo Gorge hydroelectric project in North-Western Zambia. Feasibility studies on the early works to expand the renewable energy generation portfolio by exploring installation of solar parks in Zambia is underway. Additionally, plans to expand the generation capacity at Shiroro hydropower plant with solar generation are underway.

In addition to project development expenditure, the Group progressed the capital expenditure programs for the various replacement, expansion, operational and automation projects.

Total expenditure for project development and capital expenditure amounted to USD41.781 million (2014: USD38.661 million).

Going Concern

During the year ended 31 December 2015, the Group made a loss of USD220.352 million (2014: loss USD164.02 million). The Group loss posted during the year resulted in negative EPS. Additionally, at the same date, the Group’s current liabilities exceeded its total current assets by USD191.978 million (2014: USD98.94 million) an increase of USD93.038 million. The Group loss and the negative net current liability position is a filter through of the AED Plc financial results. AED Plc posted a loss of USD216 million (2014: loss USD197 million) and a net current liability of USD227 million (2014: USD71 million).

Group AED Plc

Current Assets 279,427 134,363

Current Liability 459,238 (361,341)

Current Net Liability (179,811) (226,978)

Adjustment: MO - NBET bill 264,211 264,211

Revised Current Net Asset 84,400 37,233

From the date of acquisition of AED Plc, the Nigerian power industry operated under the Interim Rules, which structure was superseded by the commencement of the Transitional Electricity Market (TEM) on 1 February,



2015. The Interim Rules recognized that the industry did not generate sufficient revenue for all players in the power sector and, as a result, provided for distribution companies (who are the cash collection agencies for the industry), to only pay for a portion of power with the balance accrued to be paid in future and aligned with the tariff increase plan as well as the operational improvement targets. In the specific case of AED Plc, the payment obligation was limited to 65% of the Market Operator’s bill. Arising from this structure, AED Plc as at 31 December, 2015 had an accumulated Market Operator’s debt of over N52.2 billion (USD264.2 million).

The industry structure is such that the accumulated bills for the purchase of power from the Market Operator and the Nigerian Bulk Electricity Trader (NBET), post February 2015, will be partly paid from the facility which the Federal Government of Nigeria (FGN) has extended through the CBN to all distribution companies. This will provide the sector with the required immediate liquidity and will be repaid over a number of years. Parallel to this process, the NERC has approved a 10-year tariff profile for distribution companies, which profile provides for phased tariff increments.

The said approved tariff increments are structured in such a manner that the distribution companies, subject to achieving the benchmark operational performance target, should have sufficient liquidity to more than cover the repayment of the CBN facility and provide the regulated equity return to investors.

The NERC approved 10-year tariff plan, provides sufficient comfort that the net liability position will reverse in the medium term. It is worth noting that in addition to the approved 10-year tariff plan, the current tariff framework provides for bi-annual reviews to cover the following key assumptions:

a. Inflation rate (based on CBN publication)

b. Exchange rate (based on CBN publication)c. Gas prices (as supplied by Ministry of Petroleum

Resources and NNPC)d. Generation Capacity (As supplied by the system

operator)e. Capacity to evacuate generation capacity

The business plan and forecast of AED Plc financials and taking into account the approved tariffs confirm that the business is a going concern.

Senior Debt Facilities

The Group, during the year and in line with the 2015 financial priorities, managed to re-structure the acquisition facility funded by United Bank of Africa Plc (UBA) with a focus on re-profiling the debt repayments aimed at aligning with the cash inflows. The key terms of the refinanced facility include a 7-year tenor effective 31 December 2015, with a 15 month capital repayment moratorium. Interest will be serviced on a quarterly basis. Terms of the other facilities from Development Finance Institutions (DFI) and commercial lenders remained unchanged during the year.

At the end of the year, the Group had net borrowings of USD236 million (2014: USD237.4 million). The restructuring of the facilities during the year align the Group cash flows to debt repayments and allow for appropriate risk management in this area as it provides the required increased operational and financial flexibility with a new set of financial terms, which are set out in note 23 to the accounts.

The weighted average debt maturity was 8.4 years compared to 7.21 years the previous year. The increase in the weighted debt maturity years, of 1.2 years, is attributed to the debt refinancing that happened during the year. Maturity of the facilities is spread over the years, as highlighted below:

Group Debt Repayment Profile


Financial Priorities

During 2015, the financial priorities for the Group included a focus on re-profiling the debt repayment with particular focus on 2015 to 2017 to align with cash flows, focus on improving the cash generation from operations, implementation and roll out of the Enterprise Resource Plan for reporting and analysis purposes, and mitigation of the currency mismatch between assets and liabilities. Unfortunately, the latter was not closed out as at reporting date.

During 2016, the financial priorities will be to review and focus on unlocking shareholder value on account of low market capitalization relative to the business fundamentals. In order to protect the businesses and continue on a path of ensuring project financing at respective project levels, the raising of equity at CEC Africa will remain a key priority for the year.

Additionally, management will focus on closing out the transaction aimed at aligning the currencies of assets and liabilities across the entities and finalizing the interest rate hedge. In addressing all of the above, a key focus will remain the recognition of the fact that cash is KING and, therefore, continue on a path to protect and sustain operating cash generation.

Dividends

Subsequent to the reporting period, the Directors recommended, on Tuesday, 29 January 2016, an interim dividend of US Cents 1.0092 per ordinary share, which translates to 11.36 Ngwee (ZMW 0.1136) per share, using the Bank of Zambia mid-rate applicable on the date of declaration. The dividend was paid to the shareholders registered in the share register of the Company at the close of business on Friday, 4 March 2016. Dividend payments were posted from Monday, 7 March 2016.




CORPORATE SOCIALRESPONSIBIL IT Y REPOR T


CEC remains deeply committed to making a tangible difference in the communities where we work and live. Through our corporate social responsibility (CSR), CEC has demonstrated responsible action, sustainable operations and contributions to the community that go beyond our commercial success.

In 2015, CEC supported four key areas of our CSR pillars and this report highlights our performance in that respect.

Education

Beginning 2010, the Company embarked on an unprecedented project to support higher education in the country by constructing a real-life power system at the University of Zambia’s School of Engineering for the purpose of according students an opportunity to experience practicing their learning on the same equipment that they would be exposed to in industry.

The power system comprising two substations of 11/66kV and 66/3.3kV, 11/3.3kV switchgear room, a short 66kV transmission line, battery and control rooms and associated civil infrastructures was conceptualized with the view that students must as far as is practicable be employable when they enter the job market; not only in the theoretical sense but also the practical side of learning. CEC’s investment of USD2.560 million is, therefore, an effort to bridge the gap between the engineering student’s theoretical classroom instruction and the knowledgeable, hands-on expectation of the market. It is a practical way of investing in Zambia’s engineering training and quality of qualifications to produce a pool of engineers from which the Company would later obtain its employees, and who will in future be expected to contribute to the country’s economic and social development. The project was completed in November, 2015.

CEC believes in the power of partnerships and in 2015 offered logistical, human resource and other material

support to Beyond the Bike on their two bicycle rides undertaken in 2015, continuing with a partnership that has been running since 2012.

An initiative of United Kingdom-based charity Beyond Ourselves, Beyond the Bike involves riders cycling long distances to raise funds which support community schools mostly located in peri-urban Copperbelt. Over the past six years, the charity has built classroom and toilet blocks, and kitchens at the various schools they support. A feeding programme has been developed at each supported school, providing every child with a meal every school day. More than 250,000 meals were served in 2015.

In Nigeria, North South Power Company Limited (NSP), long term concessionaire for the Shiroro Hydropower Plant, directly supports education facilities around the Shiroro community. In 2015, support to both the primary and secondary schools were aimed at ensuring continuity of high standards of education for students; who include children and dependents of employees. The schools have recorded high pass rates and various investments have been made to improve the facilities and support the teaching staff, who are direct employees of NSP.

Health

The NSP-run Shiroro Hospital is a full-fledged 45 bed facility and is the largest medical facility within a radius of about 60km. During 2015, various initiatives were undertaken to ensure that the hospital’s operations are made more sustainable in the long term. The company engaged the services of a professional medical facilities management organization to help achieve sustainability. This process, when completed in 2016, is expected to culminate into the hospital becoming a recognised institution under the Nigerian national health insurance scheme. This recognition will have the effect of creating more opportunities for people in the surrounding community to access the facility under existing government supported mechanisms.


Social Infrastructure

CEC undertook to light up portions of some of the key streets in the city of Kitwe, the base of its operations. The project, which has components of both conventional and solar lighting covering parts of Nkana East and Nkana West areas, was implemented in two phases from April 2014, concluding in April 2015 at a cost of USD0.066 million. The scope of the street lighting project covered installation of new conventional and solar lighting, rehabilitation of old conventional lights and replacement of vandalized cables, overhead conductors, insulators, circuit breakers and photocells.

The rationale for undertaking this project was steeped in the belief that CEC ought to add social value to the community in which it works and lives by identifying with the concerns of other community members and offering solutions. Dark streets pose a hazard to safety, security and even health – all of which are top of our Health, Safety, Environment and Social (HSES) agenda, which we extend beyond the Company and into the community. With the rate of road traffic accidents and incidents being as high as they are in the country generally, and against which CEC staff are not spared – either as drivers or pedestrians – CEC saw this as an opportunity to contribute to safety enhancement in the community. Being awake to environmental and economic considerations, CEC saw this as an opportunity to demonstrate use of renewable energy resources in public usage by deploying some solar lights while also piloting solar with a view for larger scale utilization in future.

Vulnerable Children and Young People

Our community is not short of children and young people lacking in many areas – from not having a family to being without basic requirements and amenities, including access to education owing to lack of resources to meet the various financial obligations to support their education.

CEC supported the Company’s employee volunteer association, Mutende Community Service Group, with financial and other material resources enabling the employees to provide food, toiletries, books and other school requirements to the children of Dayspring Orphanage. The donation went further to take up the responsibility of sponsoring an intellectually able but financially disadvantaged orphan who had qualified for college. Mutende has taken up the responsibility of meeting his fees until he completes his three-year program of study.

Mutende, again with CEC support, raised funds to help meet the various areas of lack, including bed linen, for children who receive treatment from Arthur Davison Children’s Hospital in Ndola; the only dedicated paediatric health institution on the Copperbelt Province.

The women of CEC identified and met some immediate needs faced by some of the physically challenged members of our community by visiting and donating

various items to St. Martin’s School for the deaf and dumb in Kitwe.

Sport

The Company’s flagship sporting undertaking is the Power Dynamos Football Club (PDFC or Power Dynamos). The side, which is among the most successful and accomplished in the Zambian elite football league, is a notable contributor of talent to the national soccer team.The team’s on-field performance failed to earn them any silverware during the 2015 campaign, despite having participated in all competitions. Power Dynamos finished the season placed third on the Zambian premier league table, therefore, not qualified to compete in continental football in 2016. The technical bench remained unchanged and the team was reinforced by the purchase of three players and recalling of one player loaned out to Nkana Football Club the previous season. In 2015, financial support to PDFC was in the order of USD0.998 million.

Empowerment and other Social Support

NSP begun an initiative of creating opportunities for its former employees. As a start, a company formed by recently separated employees was awarded a contract to provide refuse management services around the plant and office areas, as well as the employees’ compound, comprising more than 300 houses. This opportunity enables those former employees party to it to continue having an economic interest in the Shiroro area even after leaving employment, and is a model the company intends to replicate on other opportunities that may arise.

Furnishing a newly constructed police station in Kitwe’s New Ndeke area was one way that CEC Plc contributed to enhancing security for both the property and persons of residents in the area.

The Company also made a donation of assorted material items to prison inmates of Kamfinsa Maximum Prison in Kitwe in recognition of and support to the prisoners’ rehabilitation.

The Group remained committed to investing in people and communities, to operating sustainably, acting responsibly and making tangible contributions in the communities in which our companies work and live. We have seen the positive impacts our CSR programs have had on the business, the environment, communities and even employees.

>>> CORPORATE SOCIAL RESPONSIBIL IT Y REPOR T



The Directors have pleasure, in submitting to the shareholders, their report on the Group financial statements and financial statement for Copperbelt Energy Corporation PLC (“the Company”) for the year ended 31 December 2015.

The Company continued to be listed on the Lusaka Stock Exchange (LuSE) and is the holding Company for CEC Africa Investments Limited (CEC Africa), a subsidiary investment company incorporated in Mauritius, which in turn holds indirect equity interest in a Nigerian registered distribution utility called the Abuja Electricity Distribution Plc (AED Plc), as well as an indirect minority equity interest in a Nigerian registered company called North South Power Company Limited (NSP). Additionally, the Company holds a 50% direct shareholding in CEC Liquid Telecommunication Limited (CEC Liquid Telecom) a joint venture Company registered and domiciled in Zambia. Until May 2015, the Company had 50% shareholding in another joint venture company Realtime Technology Alliance Africa Limited (Realtime) whose ownership was transferred by share acquisition, to CEC Liquid Telecom.

1. The Group

As at 31 December 2015, the Company had direct shareholding in three companies, namely; (i) CEC Africa (ii) CEC Liquid Telecom (iii) CEC-Kabompo Hydro Power Limited (CEC-KPHL). CEC Africa has indirect shareholding in two operating subsidiaries namely; 45% equity holding in AED Plc and 20% equity interest in NSP.

2. Principal Activities

The principal activities of the Group are the generation, transmission, distribution and sale of electricity and telecommunications services provision.

The Company’s core business remains the transmission, distribution, generation and sale of electricity primarily on the Copperbelt. The joint venture CEC Liquid Telecom continued with its business of providing wholesale capacity and internet bandwidth to the Zambia Information and Communications Technology Authority-licensed private and public operators and took on the provision of IP connectivity and internet services including corporate connectivity solutions and a list of other ICT services following its acquisition of Realtime (now renamed “Hai Telecommunications Limited”).

The principal activity of CEC Africa is to operate as an investment company. During the year, CEC Africa continued to hold the following investments:

• 75% equity investment in KANN Utility Company Limited, a Nigerian investment holding company, which holds 60% majority equity interest in AED Plc, also a Nigerian company that has the franchise rights to supply and distribute electricity to four Nigerian states including the Federal Capital Territory (Abuja), Niger, Nasarawa and Kogi.

• 100% equity investment in CEC Africa Hydro Investments Limited, a Mauritian investment company, which subsequently owns 20% equity interest in NSP, a Nigerian company that holds a 30 year concession to operate and maintain the 600MW Shiroro hydropower plant (Shiroro).

3. Group Share Transfer – Realtime Transaction (Hai Telecommunications Limited)

Following the transfer of the 50% shareholding (2000 Shares) held by RTAA (PVT) Botswana in Realtime Technology Alliance Africa Limited to CEC Liquid on 11 March 2015 and the Company’s 50% shareholding (2000 Shares) to CEC Liquid Telecom on 13 May 2015, CEC Liquid Telecom now holds 99.95% shareholding (3,998 shares) in Hai Telecommunications, whilst 0.025% (1 share) is held by Hanson Sindowe as nominee shareholder of the Company and the other 0.025% (1 share) is held by Nic Rudnick as nominee shareholder of Liquid Telecommunications Holdings Ltd.

The name Realtime Technology Alliance Africa Limited was on 17 July 2015 changed to Hai Telecommunications Limited upon satisfying all regulatory/statutory requirements. The company now trades as Hai Zambia and is the country’s second largest internet service provider.

DIREC TORS’ REPOR T


4. Share Capital

The authorised and issued and fully paid share capital of the Group is

2015Number of Shares

AuthorisedIssued 2015

Value

The Company 2,000,000,000 1,625,000,597 ZMW10,000

CEC Africa 100,000,000 100,000000 USD100,000,000

CEC Liquid Telecom 10,000,000 10,000,000 ZMW10

Abuja Electricity Distribution Plc 10,000,000 10,000,000 USD 30,750

North South PowerCompany Limited 500,000,000 500,000,000 USD 3,075,000

The authorised share capital of the Company is K20,000 thousand, divided into 2,000,000,000 Ordinary shares of a par value of K0.01 each and 1 Special Share of K1.40 held in the Company by the Government of the Republic of Zambia.

As at 31 December 2015, the shareholding in the Company was as follows:

Zambian Energy Corporation (Ireland) Limited 845,000,000

ZCCM Investments Holdings PLC 325,000,000

Private Individuals/Institutions 455,000,597

Government of the Republic of Zambia (Golden Share) 1 Special Share

5. SignificantShareholdingintheCompany

As at 31 December 2015, substantial shareholding (5% or more) in the Company’s share capital was as follows:

Zambian Energy Corporation (Ireland) Limited 52%

ZCCM Investment Holdings PLC 20% African Life Financial Services 6.6%

6. ActivityontheLusakaStockExchange

The Company continued to be listed and actively traded on the Lusaka Stock Exchange (LuSE). A total of 50,073,614 shares were traded in 2015 (2014: 63,772,415) in 1,014 trades, with a turnover of K31,945,328 (USD2.9 million). The share price averaged K0.64; reaching a 12-month high of K0.69, a low of K0.57 and closed the year at K0.65. The Company’s shares are traded in the dematerialized form on the LuSE. CEC Plc’s transfer agent is Corpserve Transfer Agents Limited (Corpserve Zambia).


>>> DIREC TOR ’S REPOR T

7. Financial Results

Below is a table of financial highlights for the Group over the last two years. The consolidated financial results have incorporated 100% of the Company and CEC Africa. The results of CEC Africa are a consolidation of the results of all of its investments. The share of profit or loss of the telecom Joint Ventures (CEC Liquid Telecom and Hai Zambia) and the associate NSP have been incorporated.

Consolidated The Company AED Plc

2015 2014 2015 2014 2015 2014

Revenue (USD'000 616,736 580,991 291,054 291,948 322,078 289,044

Gross profit (USD'000) 157,314 87,157 86,479 88,697 67,231 (1,540)

PBIT(USD'000) (151,160) (100,055) 68,351 50,135 (215,326) (150,190)

Net profit (USD'000) (220,352) (164,022) 39,525 33,605 (216,634) (156,476)

Property, plant and equipment (NBV)(USD'000) 823,332 763,803 400,435 231,289 422,876 532,627

Inventory (USD'000) 6,093 5,892 2,346 2,869 3,748 3,022

Current assets (USD'000) 279,427 278,665 171,372 161,615 134,363 154,314

Total assets (USD'000) 1,176,671 1,106,715 721,654 542,228 557,404 564,487

Current liabilities (USD'000) 459,238 377,604 107,978 112,326 361,341 225,540

Loans (USD'000) 235,632 237,423 101,595 230,942 1,176 1,057

Non-current liabilities (USD'000) 424,459 292,208 232,188 150,424 104,904 295,249

Equity (USD'000) 292,974 436,903 381,486 279,478 184,950 191,920

Acid test ratio (Times) 0.58 0.72 1.56 1.41 0.36 0.67

EBITDA (USD'000) (151,160) (100,055) 69,352 50,135 (215,648) (122,036)

Return on assets - - 5% 6% - -

Return on equity - - 13% 12% 0% 0%

Earnings per share (USD cents (0.055) (0.043) 0.024 0.022 - -

NSP Realtime CEC Liquid

2015 2014 2015 2014 2015 2014

Revenue 61,746 63,179 6,380 7,017 14,734 13,333

Gross profit 47,381 44,922 2,499 3,510 10,016 7,294

Net loss/profit (13,299) (5,056) (295) 485 1,546 (112)

Share of loss/profit (2,660) (1,011) (148) 243 773 (56)

Total assets 278,668 267,100 2,394 2,511 54,201 51,236

Total Liabilities 250,836 222,044 2,121 1,635 20,567 22,061

8. Going Concern

During the year ended 31 December 2015, the Group made a loss of USD220.352 million (2014: loss USD164.02 million). At that date, the Group’s current liabilities exceeded its total current assets by USD179.811 million (2014: USD98.94 million).

The net current liability position is solely driven by AED Plc financials, which has a net current liability position of USD227 million (2014: USD71 million). From date of acquisition, the Nigerian power industry operated under the Interim Rules up until February, 2015. These rules recognized that the industry did not generate sufficient revenue for all players and, therefore, provided for distribution companies to only pay for a portion of power with the balance to be covered in future once the industry establishes sufficient cash flows. In the specific case of AED Plc, the payment obligation was limited to 65% of the Market Operator’s bill. The total accumulated unpaid bill to the Market Operator was N52 billion.

The industry structure is such that the accumulated bills for the purchase of power from the Market Operator and the Nigerian Bulk Electricity Trader (post February 2015), will be partly paid from the facility which the Federal Government of Nigeria (FGN) has extended through the Central Bank of Nigeria to all distribution companies. This will provide the sector with the required immediate liquidity and will be repaid over a number of years. Parallel to this process, the NERC has approved a 10-year tariff profile for distribution companies, which profile provides for phased tariff increments. The said approved tariff increments are structured in such a manner that the distribution companies, subject to achieving the benchmark operational performance targets, should have sufficient liquidity to more than cover the repayment of the CBN facility and provide the regulated equity return to investors.

The other operations in the Group all are profit making and have a net current asset position contributing to Group financial results.


9. Investments in Subsidiaries

During the year, the Company retained its equity interest in the following companies.

CEC Africa Investments Limited - 100%CEC Liquid Telecommunication Limited - 50%CEC–Kabompo Hydro Power Limited - 100%

Further, the Company had indirect equity holding in the following companies:

KANN Utility Limited (Nigeria) - 75%Hai Telecommunications Limited (Zambia) - 50%CEC Africa Hydro Investments Limited - 100%CEC Africa (Sierra Leone) Limited - 50.1%Copperbelt Energy Nigeria Limited - 100%CEC Africa Services Limited (Zambia) - 100%

The trading results for these investments have been incorporated in the Group consolidated results.

10. Capital Expenditure

The Group’s capital expenditure strategy and decisions continued to be focused on minimizing and managing business risks, enhancing customer satisfaction and enhancing future business activities.

As in previous years, the capital expenditure programme focused on critical business operational areas. In particular, , expansion of capacity at major substations to meet customer needs, replacement of system assets that had reached the end of their useful lives, metering programs, implementation of vending platform, IT systems to support the billing platform as well as to maintain the required high standards for Safety, Health and Environment (SHE) compliance. Additionally, capital expenditure was expended on retrofitting and recommissioning of the Avon Gas Turbine Engine, procurement of circuit breakers, operational vehicles and power transformers. The Group spent a total of USD29 million during the year compared to USD25.8 million in 2014.

11. Insurance

The Group has insured its operational assets against property damage and business interruption. The Group also maintains insurance for its Directors in respect of their duties as Directors of the Company. Besides the foregoing, the Company has cover for employer’s liability, public and product liability, Group personal accident, and motor vehicle. Total premiums paid during the year for the Group was USD4.44 million.

12. Dividends and Transfers to Reserves

The policy of the Company in respect of the payment of dividends is a matter to be determined by the Board in accordance with the principles outlined below:

The Company’s actual accumulated profits arising from the business of the Company in respect of each year after: -

(i) provision of working capital as determined by the Board;

(ii) transfer to reserves as in the opinion of the Board ought reasonably to be made;

(iii) serviceofalldebtsandfullcompliancewithanyfinancingagreementstowhichtheCompanyisparty at the relevant time of payment; and

(iv) taking into account the interests of the shareholders in minimizing taxation liabilities; shallbedistributedbytheCompanytotheshareholdersbywayofdividend.

The Company has a policy of declaring dividends twice a year where determined by the Board. However, in 2015 only one dividend of USD14 million was paid on 2 March 2015.

Retained profit taken to reserves as at 31 December 2015 was USD39,525 million.



13. Operations

During the year under review, the main source of the Company’s purchases of energy to meet customers’ requirements was ZESCO Limited (ZESCO), under the Bulk Supply Agreement. However, due to low rainfall received during the preceding year, the country experienced an energy deficit and ZESCO implemented a 30% reduction in its power supplies to CEC during the last quarter of the year pursuant to a declaration of force majeure. To a large extent, the Company mitigated this national shortfall by sourcing additional energy from the Southern African region. Energy sales to the mine customers totaled 4,092GWh compared to 4,208GWh in 2014. Average capacity sales were 532MW compared to 544MW in 2014. The decline was attributed to a combination of the national energy deficit and the falling prices of copper on the world market, which impacted mines’ operations.

The performance of the Company’s power supply network on the Copperbelt was satisfactory although numerous incidents of power failure from the national grid impacted power supplies to CEC’s mine customers. The Company’s full complement of emergency Gas Turbine Alternators (GTAs) was available throughout the year except for Bancroft No. 1 unit, which was unavailable from May to early December due to a damaged Avon engine resulting from a fire.

All areas of security operations continued to be relatively calm in 2015. Notwithstanding, a few instances of angle irons thefts and vandalism were a source of concern. Isolated incidents of thefts of overhead copper conductors and vandalism of the system were experienced at the beginning and towards the end of the year. However, active investigations led to the full recovery of the materials.

During the year, the strategy was reviewed to focus more on stabilizing existing operations, away from a more growth oriented strategy. This strategy refocus is necessary for ensuring sustained growth and to allow the Company an opportunity to build up capability for a future growth programme within 2 to 3 years. Under the new strategic focus, CECA will concentrate on turning around the operations of AED Plc and establishing steady cash flows from NSP. Attention will also be paid to completing the development and construction of the first phase of the 128MW HFO power plant in Freetown, Sierra Leone under CEC Africa Sierra Leone.

At AED Plc, business infrastructure investments continued to be made including in ICT systems to support new billing and vending platforms. The year also saw the launch of a Super Vendor Program, through which resellers are being recruited to increase the footprint of vending points from 50 to over 300 initially, which increase customer accessibility. Resellers also have a vested interest in protecting sales in their area and, therefore, also act as an outsourced revenue protection system, guarding against commercial losses. The major development for AED Plc came in the fourth quarter of the year when the NERC approved the company’s ten year tariff plan after protracted negotiations. This plan has set AED Plc on a path to commercial viability. The plan calls for significant operational improvements, as well, to be viable.

Operations at NSP were stable during 2015, with hydrologically imposed generation constraints at Shiroro Hydro Power Plant, in the first eight months of the year, giving way to above normal generation in the final quarter, following record water in-flows during the months of August and September. The year ended with about a 20% shortfall on planned generation. With the foreseen improvements in the liquidity of the NESI, the NSP shareholders’ focus will be to ensure that some cash begins to flow upstream at the earliest. There is an additional accounting issue with respect to a mismatch between the reporting currency, the Naira, and the currency of the 30-year concession agreement – the US Dollar. This mismatch results in an accounting loss whenever the Naira depreciates against the US Dollar, and this loss can sometimes be large enough to wipe out the profit for a given period. NSP has already engaged the government, through the Bureau of Public Enterprises, in negotiations with a view to resolving the issue.

14. Safety and Health Matters

Performance in Health, Safety, Environment and Social (HSES) was satisfactory. All targets for leading indicators were met while 67% of lagging limits were achieved. The recorded HSES losses were one contractor-based lost time accident, one reportable incident and three first aid accidents. There were no system regulations breaches, an indication that the system continued to be safe and reliable. The Company had, as at the reporting date, clocked 5.57 million hours since the last system based lost time accident. The last accident was recorded in December 2010. Compared to 2014, there was an improvement in the performance of key lagging indicators (reduced number of total lost time accidents – LTIFR: 0.082015 Vs. 0.21 2014, reduced severity of injuries sustained from lost time accidents – LTISR: 1.37 2015 Vs. 5.83 2014 and reduced number of Road Traffic Accidents – RTAFR: 0.09 2015 Vs. 0.24 2014)


This performance was attributable to a number of programs that Management put in place in mitigating identified HSES risks. Training was undertaken covering risk management, working in confined spaces and visible felt leadership. Safety publications were produced and disseminated weekly in order to raise awareness among employees on various HSES topics to build a culture where all levels of employees are able to identify, assess and manage hazards in their work places. Audits and inspections were also undertaken to verify compliance to HSES policies and legal requirements and to ensure that the business continues to align with good HSES practices and within the regulatory framework. Further, to enhance on time response to emergencies that could occur within and outside areas of work, emergency preparedness and response plans were tested. Additionally, the Company embarked on enhancing its management system by setting up an Integrated Management System (IMS) in accordance with international standards and enhancing the Environmental Management System by incorporating the IFC Performance Standards.

At the Nigerian operations, Shiroro continued to perform well, with one lost time incident recorded during 2015. The AED Plc HSES performance improved during the year, with a drop in system related accidents involving third parties. The overall safety performance, however, continues - with 10 third party fatalities recorded during the year - to be a source of concern and a focus area for management. A major source of the incidents is public ignorance with respect to electricity safety, including a proliferation of sub-standard networks forming part of the infrastructure. This is expected to take some time to correct and in the meantime, a program is being worked on with relevant regulatory agencies to disconnect the worst identified networks pending improvement to standards. This is in parallel with aggressive public sensitization initiatives, which are expected to be supported by cooperating development financial institutions.

15 Environment and Social Matters

The Company is subject to various environmental regulations including regulations that cover air land, water, ecology and noise. Through monitoring and performance mechanisms, the Company measures its performance against environmental regulations to which it operates. Issues of importance at Company or Group level are reported to the Safety, Health and Environmental Committee and on to the Board thereafter.

During the year 2015, the Company undertook Environmental Impact Assessments (EIAs) for new projects and monitored implementation of Environmental and Social Management Plans (ESMPs), including the Zambia Environmental Management Agency (ZEMA) approval conditions for already approved projects. Regulated environmental aspects associated with the Company operations, vis-à-vis air emissions, hazardous and non-hazardous waste management and ozone depleting substances were monitored to achieve compliance and prevent pollution. There were no contraventions in this respect.

At community level, the Company co-sponsored a school environmental quiz to promote environmental awareness during the World Environment Week and also continued to monitor growth of avenue and citrus fruit trees that were donated to various schools on the Copperbelt in the previous years.

Public HV sensitizations were undertaken to enhance community safety and prevent (HSES) incidents among the communities where the Company infrastructure exists. Some local authorities were also engaged on a number of encroachment issues.

16. Human Resources The total remuneration for employees during the year amounted to USD56.309 million compared to USD62.9 million for 2014.

Below is an analysis of the Group labour costs:

The Group USD56.309 million USD62.901 millionThe Company USD18.723 million USD21.975 millionCEC Africa USD37.586 million USD40.926 million



The table overleaf shows the total average number of employees in the Group during the year.

Month CEC Plc CEC Liquid Telecom Hai Zambia CEC Africa Total

January 381 53 52 2,807 3,293

February 379 53 52 2,839 3,323

March 379 53 63 2,848 3,343

April 377 55 62 2,841 3,335

May 375 55 59 2,843 3,332

June 375 55 59 3,120 3,609

July 375 59 59 3,120 3,613

August 374 59 60 3,100 3,593

September 371 59 60 3,109 3,599

October 377 57 63 3,107 3,604

November 374 57 63 3,169 3,663

December 375 57 63 3,210 3,705

The Group is committed to attracting, developing and retaining talent capable of delivering its business objectives into the future, thereby contributing to enhancing shareholder value.

17. The Board

Role and Responsibilities of the Board

The Board of Directors (the “Board”) formulates the overall strategies and policies of the Company. The Board’s principal duty is to promote the long term success of the Company by creating and delivering sustainable shareholder value and also the achievement of any short term objectives. The role of the Board is principally to provide:

• Overall oversight of the Company, its structures and objectives.• Approval of the Company’s interim and annual results, recommendations for dividend payments and

shareholders’ distributions.• Reviewing the Company’s risks and system of internal control.• Approval of policies in key areas.• Approval of material corporate transactions. • Approval of corporate strategies and plans.• Review and approval of major investments and acquisitions.• Appointment of senior executive management staff and determination of their remuneration.

The Board acts with authority and independence in exercising its duties, discharging its fiduciary responsibilities and ensuring that management observes the highest of standards and ethics. Every member of the Board has equal access to any information related to the Company.

Responsibility for the day to day management of the business is delegated to the Managing Director. The Executive Committee of the Board, however, operates under delegated authority between scheduled Board meetings to provide continuous Board oversight of the business. The Chairman is responsible for the effective conduct of Board and shareholders’ meetings and ensures that each Director contributes to effective decision making.

Characteristics expected of all Board Directors include independence, integrity, high personal and professional ethics, sound business judgement, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.

Board Appointments

The appointment and replacement of Directors is governed by the Articles of Association.

Board Inductions

Upon appointment, Directors are made aware of what is expected of them in terms of their duties in and outside Committee and Board meetings. Each new Director receives a formal induction which includes presentation on the business, visits to Company key sites, an information pack that includes copies of the


Company’s Articles of Association, latest Annual Report and Accounts, Committee terms of reference and copies of recent Board and Committee minutes and supporting papers. The induction programme also covers an overview of the Group operations and Company policies, corporate responsibilities and corporate affairs, and legal matters. The induction addresses issues on governance and regulatory matters and Directors’ statutory duties.

Board Composition

The Board is comprised of eleven Non-Executive Directors and one Executive Director. The Board has seven Committees, whose duties and responsibilities are set out in the respective terms of reference.

The Membership of the Board as at 31 December 2015 was as follows:

Non-Executive Directors Independent Non-Executive Directors

Hanson Sindowe - Chairperson Munakupya Hantuba - Vice Chairperson Michael J TarneyAbel MkandawireRonald TamaleKanad Virk Reynolds C BowaMildred T Kaunda Charity Mwansa - Retired January 2015Emelda Chola - Appointed 26 August 2015 Peter Baird - Alternate to Ronald Tamale and Kanad Virk

Sixtus MulengaJoe M Chisanga

Executive Director

Owen Silavwe

Director Conflicts

The Company has a formal Conflict of Interest policy on the declaration and management of conflicts of Directors and Officers of the Company.

Any potential situation or transactional conflict by a Director must be reported to the Chairman or Company Secretary or declared at a meeting at which the matter is to be discussed at the Board.

Director Indemnities

The Company maintains Directors’ and Officers’ liability insurance providing appropriate cover for any legal action brought against its Directors and/or Officers.

Chairperson’s Role and Responsibilities

The role and responsibilities of the Chairperson are primarily:

a. Running the Board effectively and ensuring that the Board, as a whole, plays a full and constructive part in developing and determining the Company’s strategy and overall commercial objectives.

b. Promoting the highest standards of integrity, probity and corporate governance throughout the Company and particularly at Board level.

c. Ensuring that the Board receives accurate, timely and clear information on the Company’s performance, and the issues, challenges and opportunities facing the Company.

d. Ensuring effective communication with the Company’s stakeholders, including senior management, and ensuring that members of the Board develop and understand the views of the Company’s major investors.

Board Evaluation

Pursuant to the provisions of the Corporate Governance Rules of the LuSE and Board best practice, the Board undertakes a review of its performance and that of the Committees and, accordingly, a formal evaluation of the performance and effectiveness of the Board and its Committees is done annually.

The performance evaluation is based on certain parameters, including composition and quality, effectiveness of Board/Committee process and functions, contribution of the members, Board culture, Board structure, committees and their operations.



Board Meetings and Directors’ Attendance

All Directors are expected to allocate sufficient time to the Company to discharge their respective obligations and attend all Board and Committee meetings and also the Annual General Meeting.

A Director may appoint an alternate Director, by giving notice to the Company, where they are unable to attend meetings. The alternate Director may attend, speak and vote on behalf of the Director for whom they have been appointed where a Director is not himself or herself present.

Board and Committee meetings are prescheduled and an annual calendar is approved by the Board at the November Board meeting. However, in case of special or urgent business, the Board may convene a special Board or Committee meeting or pass resolutions by circular (round robin) resolution in accordance with the Articles of Association.

During the year ended 31 December 2015, there were four scheduled Board meetings on 4 March, 27 May, 26 August and 25 November. The Committees each held four scheduled meetings prior to a scheduled Board meeting. In addition, a number of ad hoc Board and Committee meetings were held during the year.

The Company Managing Director and the Chief Financial Officer are in attendance at all meetings of the Board and its Committees.

18. Board of Directors

The table below shows attendance of Directors and alternates at Board and Committee meetings (Regular and Special) held during the year.

Board EXCOM Audit Rem Invest SHE Risk Nom

Number of meetings held in the year 5 10 5 4 4 4 3 1

Director

Hanson Sindowe 5 10 4 - 4 - - 1

Munakupya Hantuba 5 10 - - 4 2 - 1

Charity Mwansa - - - - - - - -

Michael Tarney 4 6 2 2 4 1 1 -

Abel Mkandawire 5 2 - 3 - 3 - 1

Ronald Tamale 5 8 5 - 3 - 3 -

Reynolds Bowa 5 8 - - 3 - 3 -

Owen Silavwe 5 10 5 4 3 4 3 -

Joe Chisanga 5 1 5 - - - 3 -

∞ Siyanga Malumo - - - - 4 - - -

Emelda Chola - - - - - - - -

Kanad Virk 3 1 4 3 3 - - -

Mildred Kaunda 4 - 5 4 - 3 - -

Sixtus Mulenga 5 - - 3 - 3 - -

* Arnold Simwaba 1 - - - - - - -

* Alternate Director

∞ Mr. Siyanga Malumo is an expert invitee to the Investment Committee of the Board.


The table below shows the composition of Board Committees as at 31 December 2015

COMMITTEES

Exec

utiv

e M

anag

emen

t

Ris

k

Aud

it

Rem

uner

atio

n an

d Em

ploy

ee D

evel

opm

ent

Inve

stm

ent

Safe

ty H

ealt

h an

d En

viro

nmen

tal (

SHE)

Nom

inat

ions

Hanson Sindowe ✓ ✓ CHAIR

Munakupya Hantuba CHAIR ✓ ✓ ✓

Michael Tarney ✓ ✓ ✓

Abel Mkandawire CHAIR ✓ ✓

Ronald Tamale ✓ CHAIR ✓ ✓

Owen Silavwe ✓ ✓ ✓ ✓ ✓

Mildred Kaunda ✓ ✓ ✓

Joe Chisanga ✓ CHAIR

Kanad Virk ✓ ✓ ✓ ✓

Reynolds Bowa ✓ ✓ CHAIR

Sixtus Mulenga ✓ CHAIR

19. Board Committees

Executive Committee

Key Responsibilities

During the year under review, the Committee continued with its mandate of overseeing the major operations of the Company and financial performance. The Executive Committee’s primary function is to exercise and have all powers of the Board in the management of the business and the affairs of the Company during the intervals between meetings of the Board.

Audit Committee

Key Responsibilities The primary duties of the Committee are to provide oversight on the effectiveness of the Group’s operational and financial reporting systems and accuracy of information, and that the Group’s published Financial Statements represent a true and fair reflection. The Committee is also responsible for ensuring that appropriate accounting policies, controls and compliance procedures are in place in the Group. The Committee is responsible for ensuring that compliance management and other internal control activities are operating effectively. The Audit Committee comprises solely of Non-Executive Directors. The Auditors of the Company and Senior Management are, however, always in attendance during committee meetings.

The Committee’s main role is to encourage and safeguard the highest standards of integrity, financial reporting, financial risk management and internal controls. The Committee’s objective is to provide effective governance over the Group’s financial reporting, including the adequacy of related disclosures, the management and oversight of the Group’s systems of internal control, financial risks and the performance of internal audit and the external auditors.

As part of the process of working with the Board to carry out its responsibilities and to maximise effectiveness, meetings of the Committee generally take place just prior to Board Meetings.


Safety, Health and Environment Committee


The Committee’s key role is to ensure that management of SHE matters in the Company is aligned with the overall business strategy of the Company and is geared towards attainment of its commitments and obligations in these fields.

Investment Committee


The Investment Committee was established in order to have a streamlined approach to the various business growth opportunities under consideration by the Company.

The Committee provides focused guidance to grow the CEC business outside the core business, in areas that will create value for the shareholders.

Risk Committee


Effective risk management is fundamental to the business activities of the Group. In line with its mandate, the Risk Committee continued its oversight of all the risk types at Group level during the year 2015.

The Committee recognises that maintaining and continually enhancing the Group’s risk management capabilities is critical to ensuring that the Group’s financial and strategic objectives are achieved within the approved levels of risk appetite.

Nominations Committee

The Committee identifies candidates qualified to be appointed as Independent Non-Executive Directors of the Board and determines the qualifications, positive attributes and independence of such candidates for recommendation to the shareholders of the Company at the AGM of the Company.

Principal prospective Board candidates should have appropriate skills and experience in one or more fields that are related to the Company’s areas of business.

The Committee ensures that there is a balance of skills, in making recommendations to the Board.

The Nominations Committee has oversight of appointment of members to Board Committees and determines the size and composition of the Committees. The Committee ensures that the membership of each committee consists of directors who have diverse and complementary skills, perspectives and experience and that the Committees reflect a balanced geographical makeup of the shareholders of the Company.

Remuneration and Employee Development Committee


The Committee oversees employee remuneration and Mineworkers Union of Zambia (MUZ) wage negotiations, key organisation changes, management and leadership development, pension scheme arrangements and training of employees.

The Committee is responsible for formulating remuneration policies and principles that promote the success of the Company. This Committee is responsible for management appointments, organisation structure, reviewing arrangements for succession planning and management development and determining the remuneration of employees.



Directors’ Interests in Contracts

There were no contracts of significance during or at the end of the financial year in which a Director is or was materially interested other than through shareholding interests.

Directors’ Interests in CEC

Directors’ interests in the Company are as shown in the table below:

2015 2014 2013 2012

Total ordinary issued shares of the Company 1,625,000,597 1,625,000,597 1,000,000,000 1,000,000,000

Direct shareholding

Hanson Sindowe 1,774,567 1,774,567 1,092,000 2,092,000

Michael J Tarney 2,354,148 2,354,148 1,838,000 1,838,000

Reynolds Bowa 184,864 343,050

Owen Silavwe 650,000 650,000 400,000 400,000

Munakupya Hantuba 343,615 344,000 19,000 19,000

Indirect shareholding

Hanson Sindowe 300,092,866 300,092,866 110,802,000 110,802,000

Michael J Tarney 166,596,215 166,596,215 61,513,000 61,513,000

Abel Mkandawire 153,246,550 153,246,550 56,854,00 56,854,00

20. Directors’ Fees and Executive Management Remuneration

The Company paid USD3.826 million to Executive Managers as remuneration and USD0.343 million to Non-Executive Directors as Directors’ fees.

There was USD0.015 million outstanding in ESOP loans from the Executive Directors at the year end. Members of the Board were not entitled to any form of defined pension benefits from the Company.

21. Corporate Social Responsibility

The Group is committed to making a positive difference to the communities in which its various entities operate. During the year, the Group made donations and undertook sponsorships to support a number of social and economic initiatives, and charitable causes. The total cost for social support in 2015, including football, was USD1.507 million.

22. Compliance The Directors confirm that the Group is not in violation of any laws and regulations that would hereby have a material adverse effect on the operation of the business and that the Group has obtained all material licences and permits that are necessary to enable the it carry out its business.

23. Significant Changes in the State of Affairs

There were no significant changes in the state of affairs of the Group that occurred during the financial year under review.

24. Other Material Facts, Circumstances and Events

The Directors are not aware of any material facts, circumstances or events which occurred between the accounting date and the date of this report, which might influence an assessment of the Group’s financial position or the results of its operation.


25. Auditors

At the last Annual General Meeting of the shareholders of the Company, Messrs KPMG were appointed as auditors of the Company.

In accordance with the Company’s Articles of Association, Messrs KPMG will retire as auditors of the Company at the conclusion of the forthcoming Annual General Meeting and have expressed willingness to continue in office. A resolution for their appointment and fixing their remuneration will be tabled at the Annual General Meeting.

By order of the Board

Julia C Z ChailaCompany Secretary

7th March 2016




CEC PLC ’S COMPLIANCE STATUS OF CORPORATE GOVERNANCE RULES

A review of CEC Plc’s compliance with the LuSE Corporate Governance Code as at 31 December 2015 showed that full compliance rate was at 96%. A summary of the compliance status is shown in the chart below.

CATEGORY

TOTA

LRU

LES

APP

LCA

BLE

TO C

EC

NO

T A

PPLC

ABL

E TO

CEC

FULL

COM

PLIA

NC

E

PART

IAL

COM

PLIA

NC

E

NO

NCO

MPL

IAN

CE

%N

A

%FC

%PC

%N

C

1 General Matters 16 16 - 15 1 - 0 94 6 0

2 Chairman & CEO 4 4 - 4 - - 0 100 0 0

3 Executive & Non-Executive Directors 6 6 - 5 1 - 0 83 17 0

4 Director Compensation 9 9 - 8 - 1 0 89 0 11

5 Shares & Share Dealings 4 3 1 3 - - 28 100 0 0

6 Board Meetings 4 4 - 4 - - 0 100 0 0

7 Board Evaluations 1 1 - 1 - - 0 100 0 0

8 Company Secretary 3 3 - 3 - - 0 100 0 0

9 Board Committees 10 10 - 10 - - 0 100 0 0

10 Legal & Compliance 2 2 - 2 - - 0 100 0 0

11 Financial Statements 3 3 - 2 1 - 0 67 33 0

12 External Audit 6 6 - 6 - - 0 100 0 0

13 Internal Audit 12 12 - 12 - - 0 100 0 0

14 Risk 7 7 - 7 - - 0 100 0 0

15 Integrated Sustainability Reporting 7 7 - 7 - - 0 100 0 0

16 Disclosure & Stakeholder Reporting 4 4 - 4 - - 0 100 0 0

17 Organisation Integrity 6 6 - 6 - - 0 100 0 0

104 103 1 99 3 1 28 96 3 1

1% - PARTIALLY COMPLIANT

96% - FULLY COMPLIANT

3% - NON-COMPLIANT


SUMMARY OF AREAS THAT ARE NOT FULLY COMPLIANT

1. AREAS OF NON-COMPLIANCE

i) Theorganizationshouldhaveajustifiablelong-termincentiveprogramformanagement.

2. AREAS OF PARTIAL COMPLIANCE

i) TheLuSEmustbepromptlyfurnished(within30daysofthemeetingbeingheld) withthefollowing:

• Noticesofannualgeneralmeetings;• Theannualfinancialstatements;• Noticesofgeneralmeetings;• Minutesoftheannualgeneralmeetingsorgeneralmeetings

ii) Throughthesponsoringbroker,notifytheLuSEofanychangetotheBoardofDirectorsor CompanySecretaryincluding:

• theappointmentofanewDirectororCompanySecretary;• theresignation,removal,retirementordeathofaDirectororoftheCompanySecretary;and/or• changestoanyimportantfunctionsorexecutiveresponsibilitiesofaDirector;

iii) Interimreportsshallbepublishedanddistributedtoshareholdersafterthe expirationofthefirstsixmonthperiodofafinancialyear,butnolaterthanthreemonthsafterthat date.

3. AREAS THAT ARE NOT APPLICABLE

i) WhereshareoptionshavebeengrantedtoNon-ExecutiveDirectors,theBoard mustobtainthepriorapprovalofshareownersandmeetthespecificrequirementsoftheCompanies Act.


Board of Direc tors and Secretar y

HANSON SINDOWENon-Executive

ABEL MKANDAWIRENon-Executive

MILDRED KAUNDANon-Executive

JULIA C. Z. CHAILACompany Secretary

MUNAKUPYA HANTUBANon-Executive

KANAD VIRKNon-Executive

JOE CHISANGANon-Executive

OWEN SILAVWEExecutive

RONALD TAMALENon-Executive

SIXTUS MULENGANon-Executive

EMELDAH CHOLANon-Executive

Special Shareholder Representative

MICHAEL J. TARNEYNon-Executive

REYNOLDS BOWANon-Executive



GROUP FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS

CONTENTS

FOR THE YEAR ENDED 31 DECEMBER 2015

Directors’ responsibilities in respect of the preparation of the financial statements

Independent auditor’s report

Statements of financial position

Statements of profit or loss and other comprehensive income

Statements of changes in equity

Statements of cash flows

Notes to the financial statements

45

46

47

48

49

51

53


The Directors are responsible for the preparation and fair presentation of the Group financial statements and financial statements of Copperbelt Energy Corporation Plc (“the Company”), comprising the statements of financial position at 31 December 2015, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and the requirements of the Companies Act of Zambia. In addition, the Directors are responsible for preparing the Directors’ Report.

The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management.

The Directors have made an assessment of the ability of the Company and its subsidiaries to continue as going concerns and have no reason to believe that the businesses will not be a going concerns in the year ahead.

The auditor is responsible for reporting on whether the Group financial statements and financial statements are fairly presented in accordance with the applicable financial reporting framework.

Approval of Group financial statements and financial statements

The Group financial statements and financial statements of Copperbelt Energy Corporation Plc, as identified in the first paragraph, were approved by the Board of Directors on 7 March 2016 and were signed by:

Director Director DirectorHanson Sindowe Owen Silavwe Joe M Chisanga

Directors’ responsibilities in respect of the preparation of financial statements


Independent Auditor’s Report To the shareholders of Copperbelt Energy Corporation Plc

Report on the Financial Statements

We have audited the Group financial statements and financial statements of Copperbelt Energy Corporation Plc (“the Company”) which comprise the statements of financial position at 31 December 2015, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, as set out on pages 47 to 100.

Directors’ Responsibility for the Financial Statements

The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of Zambia, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

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

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

Opinion

In our opinion, these financial statements present fairly, in all material respects, the consolidated and separate financial position of Copperbelt Energy Corporation Plc at 31 December 2015, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of Zambia.

Report on Other Legal and Regulatory Requirements

In accordance with Section 173 (3) of the Companies Act of Zambia, we report that, in our opinion the required accounting records, other records and registers have been properly kept in accordance with the Act.

KPMG Chartered Accountants 15 March 2016

Victor Sitabule AUD/A008772 Partner

KPMG Chartered AccountantsFirst Floor, Elunda TwoAddis Ababa RoundaboutRhodes Park, LusakaPO Box 31282Lusaka, Zambia

Telephone +260 211 372 900Website www.kpmg.com

KPMG Chartered Accountants, a Zambian partnership, is a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Partners: A list of partners is available at the above mentioned address.


GROUP COMPANY

In thousands of US Dollars 2015 2014 2015 2014

Assets NOTE

Property, plant and equipment 14 823,332 763,803 400,434 231,289

Development costs 15(a) 40,819 27,744 31,098 27,744

Intangible assets 15(b) 186 113 - -

Investments in subsidiaries 16 - - 100,001 2

Investments in joint ventures 17(a) 16,865 15,046 15,794 15,294

Investment in associate 17(b) 16,042 21,344 - -

Loans to subsidiary 18 - - 2,955 106,284

Non-current assets 897,244 828,050 550,282 380,613

Inventories 19 6,093 5,892 2,346 2,869

Loans to subsidiary 18 - - 40,000 28,000

Trade and other receivables 20 210,557 168,635 86,991 78,431

Amount due from related parties 28 (i) 1,844 1,695 1,844 8,989

Cash and cash equivalents 21 60,933 102,443 40,191 43,326

Current assets 279,427 278,665 171,372 161,615

Total assets 1,176,671 1,106,715 721,654 542,228

Equity

Share capital 22 2,849 2,849 2,849 2,849

Share premium 60,078 60,078 60,078 60,078

Revaluation reserve 147,582 116,040 151,200 91,349

Foreign currency reserve 10,219 29,338 - -

Retained earnings 16,618 78,780 167,359 125,202

Attributable to owners 237,346 287,085 381,486 279,478

Non-controlling interest 55,628 149,818 - -

Total equity 292,974 436,903 381,486 279,478

Liabilities

Loans and borrowings 23 221,612 204,857 87,575 86,589

Other payables 24 54,142 16,106 49,617 16,106

Employee benefits 25 3,860 6,333 3,860 6,333

Deferred income 26 18,767 7,833 12,180 7,833

Deferred tax liability 12(e) 126,078 57,079 78,958 33,563

Non-current liabilities 424,459 292,208 232,190 150,424

Current tax liabilities 12 (d ) 10,981 13,954 5,471 11,414

Loans and borrowings 23 14,020 32,566 14,020 13,151

Trade and other payables 27 431,119 317,839 88,471 77,593

Bank overdrafts 21 - 10,143 - 10,143

Amounts due to related parties 28 (ii) 3,118 3,102 16 25

Current liabilities 459,238 377,604 107,978 112,326

Total liabilities 883,697 669,812 340,168 262,750

Total equity and liabilities 1,176,671 1,106,715 721,654 542,228

These financial statements were approved by the Board of Directors on 7th March 2016 and were signed on its behalf by:

Director Director Director

>>> GROUP FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

The notes on pages 53 to 100 form an integral part of these financial statements.

Statements of financial position As at 31 December 2015



GROUP COMPANY

In thousands of US Dollars NOTE 2015 2014 2015 2014

Revenue 7 (i) 616,736 580,991 291,054 291,948

Cost of sales (459,422) (493,834) (204,575) (203,251)

Gross profit 157,314 87,157 86,479 88,697

Other income 7(ii) 34,469 14,644 31,795 12,852

Share of profit from joint ventures 17b(ii) 626 186 - -

Share of loss from associate 17b(iii) (2,660) (1,011) - -

Operating expenses 8 (340,909) (201,031) (49,923) (51,414)

Operating (loss)/profit (151,160) (100,055) 68,351 50,135

Finance income 10 1,534 1,251 36 9,819

Finance costs 11 (47,575) (50,541) (7,312) (11,829)

Net finance costs (46,041) (49,290) (7,276) (2,010)

(Loss)/profit before income tax (197,201) (149,345) 61,075 48,125

Income tax expense 12 (a) (23,151) (14,677) (21,550) (14,520)

(Loss)/profit for the year (220,352) (164,022) 39,525 33,605

Other comprehensive income Items that are or may be reclassified to profit or loss

Revaluation surplus 195,251 78,385 116,572 -

Foreign currency translation difference (41,136) 35,373 - -

Defined benefits plan actuarial gains 25(iii) 1,096 1,537 1,096 1,537

Related tax 12(b) (64,788) (24,054) (41,184) (538)

Other comprehensive income 90,423 91,241 76,484 999

Total comprehensive income (129,929) (72,781) 116,008 34,604

(Loss)/profit attributable to:

Owners of the Company (88,686) (69,108) 39,525 33,605

Non-controlling interest (131,666) (94,914) - -

(220,352) (164,022) 39,525 33,605

Total comprehensive income attributable to:

Owners of the Company (35,739) (20,294) 116,008 34,604

Non-controlling interest (94,190) (52,487) - -

(129,929) (72,781) 116,008 34,604

Basic and diluted earnings per share 13 (0.055) (0.043) 0.024 0.022

Statements of profit or loss and other comprehensive income For the year ended 31 December 2015




Statement of changes in equity - Groupfor the year ended 31 December 2015

In thousands of US DollarsShare

capitalShare

premiumRevaluation

reserve

Foreign currency

translation reserve

Retained earnings

Non-controlling

InterestTotal

Balance at 1 January 2014 1,817 40 94,214 6,214 144,024 202,305 448,614

Revaluation surplus - - 35,273 - - 43,112 78,385

Deferred tax on revaluation surplus - - (10,582) - - (12,934) (23,516)

Amortisation of revaluation reserve - - (2,865) - 2,865 - -

Loss for the year - - - - (69,108) (94,914) (164,022)

Defined benefit plan actuarial loss - - - - 1,537 - 1,537

Related tax - - - - (538) - (538)

Foreign currency translation difference - - - 23,124 - 12,249 35,373

Total comprehensive income - - 21,826 23,124 (65,244) (52,487) (72,781)

Transactions with owners of the Company

Rights issue 1,032 60,038 - - - - 61,070

Balance at 31 December 2014 2,849 60,078 116,040 29,338 78,780 149,818 436,903

Balance at 1 January 2015 2,849 60,078 116,040 29,338 78,780 149,818 436,903

Revaluation Reserve Adjustment - - (53,094) - 23,892 29,202 -

Revaluation surplus - - 151,978 - - 43,273 195,251

Deferred tax on revaluation surplus - - (51,422) - - (12,982) (64,404)

Amortisation of revaluation reserve - - (15,920) - 15,920 - -

Loss for the year - - - - (88,686) (131,666) (220,352)

Defined benefit plan actuarial gain - - - - 1,096 - 1,096

Related tax - - - - (384) - (384)

Foreign currency translation difference - - - (19,119) - (22,017) (41,136)

Total comprehensive income - - 31,542 (19,119) (48,162) (94,190) (129,929)


Dividends paid - - - - (14,000) - (14,000)

Balance at 31 December 2015 2,849 60,078 147,582 10,219 16,618 55,628 292,974

Retained earnings Retained earnings are the carried forward recognised income, net of expenses of the Group, plus current year’s loss attributable to the shareholders, less dividend paid.

Share premium The share premium relates to the excess amounts paid by the shareholders on the issue of share capital net of pre-incorporation costs.

Revaluation reservesRevaluation reserve is a non-distributable reserve which represents revaluation surplus on buildings net of deferred tax.

Foreign currency translation reserveThe foreign currency translation reserve arises from the translation of foreign operations.




Statement of changes in equity - Companyfor the year ended 31 December 2015

In thousands of US DollarsShare

capitalShare

premiumRevaluation

reserveRetained earnings Total

Balance at 1 January 2014 1,817 40 94,214 87,733 183,804

Profit for the year - - - 33,605 33,605

Defined benefits plan actuarial gain - - - 1,537 1,537

Related tax - - - (538) (538)

Amortisation of revaluation reserve - - (2,865) 2,865 -

Total comprehensive income - - (2,865) 37,469 34,604


Rights issue 1,032 60,038 - - 61,070

Balance at 31 December 2014 2,849 60,078 91,349 125,202 279,478

Balance at 1 January 2015 2,849 60,078 91,349 125,202 279,478

Revaluation surplus - - 116,571 - 116,571

Deferred tax on revaluation surplus - - (40,800) - (40,800)

Profit for the year - - - 39,525 39,525

Defined benefits plan actuarial gain - - - 1,096 1,096

Related tax - - - (384) (384)

Amortisation of revaluation reserve - - (15,920) 15,920 -

Total comprehensive income - - 59,851 56,157 116,008


Dividends paid - - - (14,000) (14,000)

Balance at 31 December 2015 2,849 60,078 151,200 167,359 381,486

Retained earnings Retained earnings are the carried forward recognised income, net of expenses of the Company, plus current year’s profit attributable to the shareholders, less dividend paid.

Share premium The share premium relates to the excess amounts paid by the shareholders on the issue of share capital net of pre-incorporation costs.

Revaluation reservesRevaluation reserve is a non-distributable reserve which represents revaluation surplus on all classes of assets net of deferred tax.




Statements of cash flowsFor the year ended 31 December 2015

GROUP COMPANY


Cash flows from operating activities

(Loss)/profit before tax (197,201) (149,345) 61,075 48,125

Adjustments for:

Depreciation 14 38,986 38,589 11,600 10,468

Amortisation 15(b) 37 32 - -

(Loss)/profit on disposal of plant and equipment 7/8 (16) 8,188 (16) (19)

Share of profit from associate/joint venture 17 2,034 825 - -

Impairment of property, plant and equipment 8/14 86,139 - 3,986 -

Reversal of impairment provision (500) - (500) -

Translation differences 24,390 37,785 - 570

Finance income 10 (1,534) (1,251) (36) (9,819)

Finance costs 11 47,575 50,541 7,312 11,829

Operating profit before changes in working capital (90) (14,636) 83,421 61,154

Changes in:

- Inventories (200) 516 524 1,103

- Trade and other receivables (41,922) (129,350) (8,560) (43,952)

- Amounts due from related parties (149) 160 (151) (249)

- Amounts due to related parties 16 25 (10) 25

- Deferred income and employment benefits 4,557 (916) (2,030) (916)

- Trade and other payables 112,064 216,933 5,136 33,798

Cash generated from operating activities 74,276 72,732 78,330 50,963

Interest paid 11 (22,838) (29,203) (7,312) (11,829)

Income tax paid 12(d) (23,282) (11,516) (23,282) (11,101)

Net cash generated from/(used in) operating activities 28,156 32,013 47,736 28,033

Cash flows from investing activities

Acquisition of plant and equipment (28,706) (25,769) (20,516) (7,457)

Proceeds from disposal of plant and equipment 16 173 16 117

Acquisition of intangible assets 15(b) (110) - - -

Interest received 10 1,534 1,251 36 9,819

Loan to subsidiary - - (1,374) (39,197)

Development costs 15(a) (13,075) (14,892) (3,354) (14,892)

Net cash used in investing activities (40,341) (39,237) (25,192) (51,610)




Statements of cash flows (cont)For the year ended 31 December 2015

GROUP COMPANY


Cash flows from financing activities

Proceeds from loans and borrowings 23 18,956 119,000 15,000 119,000

Grants received 26(b) 5,000 - 5,000 -

Repayment of loans and borrowings 23 (20,747) (122,519) (13,145) (122,519)

Repayment of customer financed long term payable 24 (8,391) - (8,391) -

Related party loan received 23 - 10,000 - -

Proceeds from issue of shares - 61,070 - 61,070

Dividends paid (14,000) - (14,000) -

Net cash (used)/generated from financing activities (19,182) 67,551 (15,536) 57,551

Net (decrease)/increase in cash and cashequivalents (31,367) 60,327 7,008 33,974

Cash and cash equivalents at 1 January 92,300 31,973 33,183 (791)

Cash and cash equivalents at 31 December 21 60,933 92,300 40,191 33,183




1 Reporting entity

Copperbelt Energy Corporation Plc (“the Company”) is domiciled in the Republic of Zambia. The address of the Company’s registered office is 23rd Avenue, Nkana East, Kitwe. These Group financial statements comprise the Company, subsidiaries and joint venture (together referred to as the “Group” and individually “Group Companies”). Its principal business activity is the generation, transmission, distribution and sale of electricity.

2 Basis of accounting

The Group financial statements and financial statements of Copperbelt Energy Corporation Plc have been prepared in accordance with the International Financial Reporting Standards (IFRSs) and the requirements of the Companies Act of Zambia.

Details of the Group’s accounting policies are included in note 31.

3 Going concern

During the year ended 31 December 2015, the Group made a loss of USD220.352 million (2014: loss USD164.02 million). The Group loss posted during the year resulted in negative Earning Per Share (EPS). Additionally, at the same date, the Group’s current liabilities exceeded its total current assets by USD179.811 million (2014: USD98.94 million) an increase of USD93.038 million. The Group’s loss and the negative net current liability position is a filter through of the AED Plc financial results. AED Plc posted a loss of USD216 million (2014: loss USD197 million) and a net current liability of USD227 million (2014: USD71 million).

The Group’s loss was largely driven by non-cash items shown below:

2015 2014

Total costs 340,908 201,031

Impairment of property, plant and equipment (86,138) -

Depreciation (38,986) (38,586)

Provision for bad debt (94,469) (44,052)

Total non-cash costs (219,593) (82,638)

Cash costs 121,315 118,393

Analysis of the 2015 Current Assets and Current Liabilities in the Group

Group AED Plc

Current assets 279,427 134,363

Current liability (459,238) (361,341)

Net current liability (179,811) (226,978)

Adjustment: MO - NBET bill 264,211 264,211

Net current asset 84,400 37,233

From the date of acquisition of AED Plc, the Nigerian power industry operated under the Interim Rules, which structure was superseded by the commencement of the Transitional Electricity Market (TEM) on 1 February, 2015. The Interim Rules recognized that the industry did not generate sufficient revenue for all players in the power sector and, as a result, provided for distribution companies (who are the cash collection agencies for the industry), to only pay for a portion of power with the balance accrued to be paid in future and aligned with the tariff increase plan as well as the operational improvement targets. In the specific case of AED Plc, the payment obligation was limited to 65% of the Market Operator’s bill. Arising from this structure, AED Plc as at 31 December, 2015 had an accumulated Market Operator’s debt of over N52.2 billion (USD264.2 million).

The operations under TEM is such that the accumulated bills for the purchase of power from the Market Operator and the Nigerian Bulk Electricity Trader (NBET), post February 2015, will be partly paid from the facility which the Federal Government of Nigeria (FGN) has extended through the CBN to all distribution companies. AED Plc has met the significant terms and conditions to access the facility. The facility is Naira denominated and will be repaid over a period of 10 years at an interest rate of 10% per annum. This will provide the sector with the required immediate liquidity and will be repaid over a number of years. Parallel to this process, the NERC has approved a 10-year tariff profile for distribution companies, which profile provides for phased tariff increments. The payable to the MO-NBET recognized in these results will not be demanded until (i) the CBN facility is accessed and part of the proceeds used to cover the MO-NBET bill (ii) A restructuring of the debt and or the operationalization of the tariff increase which will provide liquidity to be used to cover the said liabilities.

Subsequent to reporting date, as part of the NERC approved 10 year tariff plan AED Plc end user consumer tariffs were increased on average 20% effective 1 February 2016.

Notes to the financial statements For the year ended 31 December 2015


3 Going concern (continued)

The said approved tariff increments are structured in such a manner that the distribution companies, subject to achieving the benchmark operational performance targets, should have sufficient liquidity to more than cover the repayment of the CBN facility and provide the regulated equity return to investors.

The NERC approved 10-year tariff plan, provides sufficient comfort that the net liability position will reverse in the medium term. It is worth noting that in addition to the approved 10-year tariff plan, the current tariff framework provides for bi-annual reviews to cover the following key assumptions:

a. Inflation rate (based on CBN publication)b. Exchange rate (based on CBN publication)c. Gas prices (as supplied by Ministry of Petroleum Resources and NNPC)d. Generation Capacity (As supplied by the system operator)e. Capacity to evacuate generation capacity

The Directors have reviewed the forecasts and projections of AED Plc which take into account tariff increases, planned subsidies funding (intervention fund), in collaboration with the Central Bank of Nigeria, planned reductions in aggregate technical, commercial and collection losses, continued deferral of the payment of a certain proportion of the Market Operator’s bill, capital investments required to improve service delivery and financial support offered by KANN Utility Company Limited, the 60% shareholder of AED Plc.

The business plan and forecast of AED Plc financials based on the approved tariffs confirm that the net current liability position is largely driven by the AED Plc payables balance, which is an accumulation of a significant portion of the Market Operators bill.

In addition to the above listed measures, the Group has commenced financing initiatives at CEC Africa where identified equity providers have progressed with the due diligence aimed at facilitating the flow of equity which will partly dilute the Group’s interest in CEC Africa. It is expected that part of the equity to be raised will be reserved to support operating subsidiaries.

Based on the foregoing, the Directors expect the Group to continue as a going concern, realise its assets and discharge its liabilities in the normal course of business. Accordingly, the financial statements are prepared on the basis of accounting policies applicable to a going concern.

4 Functional and presentation currency

These financial statements are presented in USD, which is the Company’s functional currency. All the amounts have been rounded to the nearest thousand unless otherwise indicated.

5 Use of judgements and estimates

In preparing these consolidated and separate financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

A. Judgments

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognised in the consolidated and separate financial statements is included in the following notes:

• Note 17 - classification of the Joint arrangement; and• Note 31(A) - consolidation: whether the Group has de facto control over an investee.

B. Assumptions and estimation uncertainty

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 December 2016 is set out below in the following notes:

• Note 25 – measurement of defined benefit obligations: key actuarial assumptions;• Note 29 – impairment of accounts receivable: assumptions underlying the recoverable amount and the timing of the cashflow.




5 Use of judgements and estimates (continued)

A. Assumptions and estimation uncertainty (continued)

• Note 30 - determination of fair value of financial instruments with significant unobservable inputs;• Note 12 - recognition of deferred tax assets: availability of future taxable profit against which carry forward tax

losses can be used;• Note 34 - recognition and measurement of provisions and contingencies: key assumptions about the likelihood

and magnitude of an outflow of resources; and• Note 14 – determination of fair value of property.

Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values for both financial and non-financial assets and liabilities.

The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the Chief Financial Officer.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

Significant valuation issues are reported to the Group’s Audit Committee.

When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either

directly (i.e. as prices) or indirectly (i.e. derived from prices).• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

• Note 14 - property; and• Note 30 - financial instruments.




6 Segmental reporting See accounting policy in note 31(n)

A. Basis for segmentation

The Group has the following two reportable segments. These two segments represent strategic supply lines. For each of the strategic supply lines, the Group’s Managing Director reviews internal management reports on a monthly basis.

The following summary describes the nature of each of the supply lines.

Reportable segment Description

Transmission This involves the transmission of high voltage power.

Distribution This involves the transmission of low voltage power and is close to consumption sources.

Information related to each reportable segment is included below. Performance is measured based on services, growth and profit before income tax, as included in the internal management reports that are reviewed by the Managing Director. Segment growth and profit are used to measure performance as management believes that such information is relevant in evaluating the results of the segment.

The Group operates in two geographical segments, Zambia and Nigeria.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred to acquire segment assets that are expected to be used for more than one period.

B. Information about reportable segments

31 December 2015 Transmission Distribution Total

Revenue – external 291,054 325,682 616,736

Depreciation (11,600) (27,386) 38,986

Operating profit/(loss) 68,351 (219,511) (151,160)

Net finance costs (7,276) (38,765) (46,041)

Profit/(loss) before income tax 61,075 (258,276) (197,201)

Income tax expenses (21,550) (1,601) (23,151)

Profit/(loss) for the year 39,525 (259,877) (220,352)


Revenue - external 291,948 289,043 580,991

Depreciation 10,468 28,121 38,589

Operating profit 50,135 (150,190) (100,055)


Profit before income tax 48,125 (197,470) (149,345)

Income tax expense (14,520) (157) (14,677)





6 Segmental reporting (continued)

B. Information about reportable segments (continued)

The segment assets and liabilities and cash flows as at 31 December 2015 were as follows:


Segment assets 721,654 455,017 1,176,671

Segment liabilities 340,168 543,529 883,697

Cash flows from operating activities 47,736 (19,580) 28,156

Cash flows used in investing activities (25,192) (15,149) (40,341)

Cash flows from financing activities (15,536) (3,646) (19,182)

Capital expenditure (20,516) (8,190) (28,706)

The segment assets and liabilities and cash flows as at 31 December 2014 were as follows:


Segment assets 542,228 564,487 1,106,715


Cash flows from operating activities 28,033 3,981 32,013

Cash flows used in investing activities (51,610) 12,373 (39,237)

Cash flows from financing activities 57,551 10,000 67,551

Capital expenditure 7,457 18,312 25,769

Segment assets comprise primarily property, plant and equipment, trade and other receivables and operating cash.

Segment liabilities comprise trade and other payables, deferred tax and loans and borrowings.

Capital expenditure comprises additions to property, plant and equipment.

Two customers contribute more than 10% of the Group’s revenue each.




6 Segmental reporting (continued)

C. Geographic information

The geographical information below analyses the Group’s revenue and non-current assets by the Company’s country of domicile.

31 December 2015 Zambia Nigeria Total


Depreciation (11,600) (27,386) (38,986)

Operating profit/(loss) 68,351 (219,511) 151,160


Loss before income tax 61,075 (258,276) (197,201)

Income tax expenses (21,550) (1,601) (23,151)




Depreciation 10,468 28,121 38,589

Operating profit/loss 50,135 (150,190) (100,055)


Profit/(loss) before income tax 48,125 (197,470) (149,345)

Income tax expense (14,520) (157) (14,677)



Segment assets 721,654 455,017 1,176,671


Cash flows from operating activities 47,736 (19,580) 28,156

Cash flows used in investing activities (25,192) (15,149) (40,341)

Cash flows from financing activities (15,536) (3,646) (19,182)



Segment assets 542,228 564,487 1,106,715


Cash flows from operating activities 28,033 3,981 32,013

Cash flows used in investing activities (51,610) 12,373 (39,237)

Cash flows from financing activities 57,551 10,000 67,551





7 i. Revenue See accounting policy in note 31(b)

GROUP COMPANY


Electricity transmission 277,586 276,796 277,586 276,795

Electricity distribution 322,078 289,043 - -

Wheeling – domestic 11,709 13,584 11,709 13,585

Others 5,363 1,568 1,759 1,568

616,736 580,991 291,054 291,948

Company Revenue

Revenue is recognized from activities that are carried out in the ordinary course of business including the following:• Generation; • Transmission; • Distribution; and • Supply.

The four business lines provided above are all regulated by the ERB and underpinned by long term commercial contracts and business plans approved by the Board. The activities from which this revenue is derived include the following: • Supply contracts - this involves the procurement of power at high voltage and transmission through the CEC

network to supply mine customers on the Copperbelt.• Domestic Wheeling services - this includes the provision of (wheeling) transportation services to mostly

ZESCO to move power from point A to point B in the CEC network.• International Wheeling - this involves the wheeling services for international players through the CEC

network.• Generation: Emergency power provision - this service is priced as part of the supply contracts.

Group Revenue

At Group level, revenue includes the distribution business which forms part of the ordinary course of business, therefore, the revenue recorded from this activity forms part of the Group revenue for the period.

ii. Other income

GROUP COMPANY


Power trading 23,853 10,482 23,853 10,482

Sundry income 10,616 4,162 7,942 2,351

34,469 14,644 31,795 12,852

Power Trading

The Company, during past periods, participated in power trading through the SAPP Day Ahead Market as well as through access to regional short term power supply contracts, and supplied most of the power to customers in the DRC. This business, though not yet an activity that is described as being normal course of business, is significantly growing and efforts to evaluate its sustainability are underway.

Sundry Income

Included in the sundry income is mainly an amount representing customer contributions to dedicated assets used to supply their power requirements.




8 Operating expenses

GROUP COMPANY


Depreciation of property and equipment 38,986 38,589 11,600 10,468

Amortisation of intangible assets 37 13 - -

Loss on disposal of fixed assets - 8,188 - -

Personnel and staff related costs (note 9) 56,309 62,901 18,723 21,975

Non-Executive Directors’ fees and benefits 3,498 2,288 343 313

Auditors’ remuneration – audit services 660 325 172 97

Tax services 10 10 10 10

Insurance costs 4,443 4,324 1,974 1,866

Stores and maintenance 2,832 2,958 2,809 2,958

Football expenses 1,169 993 1,169 993

Bad debts provisions 90,533 43,046 - 136

Project costs 570 1,018 570 1,018

Donations 338 220 335 220

Council rates 435 485 435 485

Impairment of property, plant and equipment 86,139 - 3,986 -

Other operating expenses 50,950 35,654 7,797 10,875

340,909 201,031 49,923 51,414




9 Personnel and staff related costs

GROUP COMPANY


Salaries and wages 49,248 52,357 12,747 13,001

Retirement benefits 954 911 782 911

Pension contribution and provisions 1,796 470 1,466 470

Other staff costs differentials and bonuses 3,723 5,842 3,140 5,842

Staff medical costs 182 2,024 182 1,012

Staff training 406 1,297 406 739

56,309 62,901 18,723 21,975

10 Finance income See accounting policy in note 31(c)

GROUP COMPANY


Interest on overdue debtors - 820 - 820

Interest earned - related party 1,534 - - 8,439

Interest earned – other - 431 36 560

1,534 1,251 36 9,819

11 Finance costs See accounting policy in note 31(c)

GROUP COMPANY


Interest on bank loans 22,838 29,203 7,312 11,829

Exchange loss 24,737 21,338 - -

Total 47,575 50,541 7,312 11,829




12 Income taxes See accounting policy in note 31(d)

a. Amount recognised in profit or loss

GROUP COMPANY


Current tax expense 18,940 16,702 17,339 16,545

Deferred tax expense/(credit) 4,211 (2,025) 4,211 (2,025)

Total income tax expense 23,151 14,677 21,550 14,520

The tax expense excludes the Group’s share of the tax expense of equity accounted investments of USD419

b. Amounts recognised in OCI

2015 2014

GROUP In thousands of US Dollars

Before tax

Tax expense

Net of tax

Before tax

Tax expense

Net of tax

Acturial gain 1,096 (384) 712 1,537 (538) 999

Revaluation surplus 195,251 (64,404) 130,847 78,385 (23,516) 54,869

196,347 (64,788) 131,559 79,922 (24,054) 55,868

2015 2014

COMPANY In thousands of US Dollars

Before tax

Tax expense

Net of tax

Before tax

Tax expense

Net of tax

Acturial gain 1,096 (384) 712 1,537 (538) 999

Revaluation surplus 116,751 (40,800) 75,951 - - -

117,847 (41,184) 76,663 1,537 (538) 999

c. Reconciliation of the tax charge:

(Loss)/profit before tax (197,201) (149,345) 61,075 48,125

Income tax using domestic tax rate (56,107) (52,271) 21,376 16,844

Non-deductible expenses (686) 378 (686) 378

Under provision in prior year - 52 - 52

Tax on Equity Accounted Investments (419) - - -

Deferred tax on employee benefits 860 (2,754) 860 (2,754)

Unrecognised temporary differences 79,503 39,918 - -

Tax charge 23,151 14,677 21,550 14,520

d. Current tax liabilities

At the beginning of the year 13,954 8,198 11,414 5,400

Charge for the year 18,940 16,702 17,339 16,545

Exchange differences 1,369 570 - 570

Payments made during the period (23,282) (11,516) (23,282) (11,101)

At the end of the year 10,981 13,954 5,471 11,414




12 Income taxes (continued)

Deferred tax liabilities

Movement in deferred tax balances (Group)

2015 In thousands of US Dollars

Balance1 January

2015

Recognised in profit or

lossRecognised

in OCI

Balance 31

December 2015

Deferred tax assets

Deferred tax liability

Property, plant and equipment

35,802 3,938 - 39,740 - 39,740

Revaluation surplus 23,516 - 64,404 87,920 - 87,920

Employee benefits (2,216) 444 384 (1,388) (1,389) -

Unrealised exchange gain

(23) (171) - (194) (194) -

57,079 4,211 64,788 126,078 (1,583) 127,660


Balance1 January

2014


lossRecognised

in OCI

Balance 31

December 2014

Deferred tax assets


Property, plant and equipment 35,096 706 - 35,802 - 35,802

Revaluation surplus - - 23,516 23,516 - 23,516

Employee benefits - (2,754) 538 (2,216) (2,216) -

Unrealised exchange gain (46) 23 - (23) (23) -

35,050 (2,025) 24,054 57,079 (2,239) 59,318

Movement in deferred tax balances (Company)


Balance1 January

2015


lossRecognised

in OCI

Balance 31

December 2015

Deferred tax assets


Property, plant and equipment 35,802 3,938 - 39,740 - 39,740

Revaluation surplus (2,216) - 40,800 38,584 38,584

Employee benefits (23) 444 384 805 - 805

Unrealised exchange gain - (171) - (171) (171) -

33,563 4,211 41,184 78,958 (171) 79,129


Balance1 January

2014


lossRecognised

in OCI

Balance 31

December 2014

Deferred tax assets


Property, plant and equipment 35,096 706 - 35,802 - 35,802

Employee benefits - (2,754) 538 (2,216) (2,216) -

Unrealised exchange gain (46) 23 - (23) (23) -

35,050 (2,025) 538 33,563 (2,239) 35,802




12 Income taxes (continued)

(e) Deferred tax liabilities (continued)

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profits will be available against which the Group can utilize the benefits therefrom.

Tax losses 2015 2014

Abuja Electricity Distribution Plc 215,326 299,514

KANN Utility 50,069 70,800

265,395 370,314

These tax losses relate to the subsidiary acquired in 2013 and management has established that it is uncertain whether future taxable profits will be available against which the loss can be utilised and therefore this amount has been included in the balance of unrecognised tax losses as at 31 December 2015.

The Company income tax assessments have not yet been agreed with the Zambia Revenue Authority (ZRA) for the period ended 31 December 2015. Quarterly tax returns for the year ended 31 December 2015 were made on the due dates during the year.

13 Basic and diluted earnings per share

The calculation of the basic and diluted earnings per share at 31 December 2015 was based on the (loss)/profit attributable to ordinary shareholders of USD88.686 miilion (2014: profit of USD69.108 miilion) and weighted average number of ordi-nary shares during the year ended 31 December 2015 of 1,625,000,579 (2014: 1,511,986,103).

GROUP COMPANY


(Loss)/ profit attributable to ordinary shares holders (88,686) (69,108) 39,525 33,605

Weighted average number of ordinary shares (000)

Issued at beginning of year 1,625,001 1,000,000 1,625,001 1,000,000

Issued during the year - 511,986 - 511,986

Weighted average number of ordinary shares at end of year 1,625,001 1,511,986 1,625,001 1,511,986

Basic and diluted earnings per share (0.055) (0.043) 0.024 0.022




14

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14 Property, plant and equipment (continued)

a. A schedule listing the properties as required by Section 193 and the Second Schedule of the Companies Act, Cap 388 of the Laws of Zambia is available for inspections by Members or their duly authorised representatives at the registered office of the Company.

b. Included in the cost of property, plant and equipment are fully depreciated assets amounting to USD15.7 million (2014: USD11.779 miilion). The notional depreciation not charged in these financial statements on these assets amounts to USD1.047 miilion (2014: USD0.785 miilion).

c. The transfer of some of the title to property, transferred from ZCCM Investment Holdings (ZCCM–IH) has not yet been concluded, but is in progress.

d. At 30 November 2015, the Company’s property, plant and equipment were revalued by Bitrust Real Estate on the basis of realisable market value. The surplus on revaluation totaling USD116.572 miilion was transferred to a revaluation reserve. The Group policy on revaluation of property, plant and equipment is to revalue every 3 years. The following are the major assumptions made:• Current supply and demand of available property, plant and equipment in the area or location• The extent of the site, the design and quality of the property, plant and equipment

e. At 31 December 2015, the property, plant and equipment of the AED Plc were revalued by Aurecon, on the basis of fair market value. The surplus on revaluation totaling USD81.565 miilion was transferred to a revaluation reserve. The following are the major assumptions made:• Current supply and demand of available land and buildings in the area or location• The extent of the site, the design and quality of the buildings• Include valuation techniques• Inputs used to develop those measures

15 a. Development costs See accounting policy in note 31(p)

GROUP COMPANY

In thousands of US Dollars

At cost2015 2014 2015 2014

Balance at 1 January 27,744 12,852 27,744 12,852

Additions during the year 13,075 14,892 3,354 14,892

Balance at 31 December 40,819 27,744 31,098 27,744

The project development cost at the Company level relates to the cost incurred on behalf of a 100% subsidiary CEC-KHPL, towards the construction of a power station. Included in the Group costs are development costs for CEC Africa Sierra Leone.

b. Intangible assets See accounting policy in note 31(k)

The Intangible assets comprise the accounting software in AED Plc and KANN.

GROUP COMPANY


Cost

Balance at 1 January 145 145 - -

Additions 110 - - -

Balance at 31 December 255 145 - -

Amortisation

Balance at 1 January 32 - - -

Amortisation charge for the year 37 32 - -

Balance at 31 December 69 32 - -

Carrying amounts 186 113 - -

The directors have considered the risk that the software in progress is impaired and have concluded based on development of the software post year end that it is not impaired.




16 Investments in subsidiaries

In thousands of US DollarsPercentage

shareholding31 December

2015Percentage

shareholding31 December

2014

Subsidiaries

CEC Africa Investments Ltd 100 100,000 100 1

CEC - Kabompo Hydro Power Ltd 100 1 100 1

100,001 2

Movement in CEC Africa shares

Balance as at 1 January 1

Capitalisation of loans 99,999

Balance 31 December 100,000

17 Equity accounted investees

a. Joint ventures

The Group has joint control of Hai Zambia and CEC Liquid Telecom. Hai Zambia and CEC Liquid Telecom are engaged in the provision of internet services.

The following table summarises the financial information of Hai Zambia and CEC Liquid Telecom.

2015 Group In thousands of US Dollars

Total

Balance at 1 January 15,046

New shares 500

Share of profit 625

Share FCTR 694

Balance at 31 December 16,865

2014 Group Hai CEC Liquid CEC Liquid

Balance at 1 January 235 14,643 14,878

Share of profit/(loss) 242 (56) 186

Share FCTR (18) - (18)

Balance at 31 December 459 14,587 15,046

Company Jointly controlled entities

Percentage shareholding

31 December 2015

Percentage shareholding 31 December

2014

Hai Zambia - - 50 1,000

CEC Liquid Telecommunication Limited 50 15,794 50 14,294

Balance at 31 December 15,794 15,294




17 Equity accounted investees (continued)

Movement in shares of CEC Liquid 2015

Balance as at 1 January 14,294

New Share Issues 500

Balance 31 December 14,794

b. Investment in associates

North South Power Company Limited

GroupIn thousands of US Dollars

31 December2015

31 December2014

Balance at 1 January 21,344 24,179

Acquisition during the year - -

Share of loss (2,660) (1,011)

Restatement adjustment on cost investment - (1,824)

Foreign currency translation reserve (2,642) -


Jointly controlled entities

i. Hai Telecoms

In thousands of US Dollars31 December

201531 December

2014

Total assets 2,394 2,511

Total liabilities (2,121) (1,635)

Net assets 273 876

Revenues 6,380 7,017

Other income 29 44

Expenses (6,609) (6,434)

Finance costs (95) (142)

(Loss)/profit before tax (295) 485

(Loss)/profit for the year (295) 485

Share of (loss)/profit (50%) (147) 242




17 Equity accounted investees (continued)

Jointly controlled entities (continued)

ii. CEC Liquid Telecommunication Limited


201531 December

2014

Total assets 54,201 51,236


Net assets 33,634 29,175

Revenues 14,734 13,333

Other income 79 103

Expenses (12,429) (13,509)

Profit/(loss) before tax 2,384 (73)

Income tax expense (838) (39)

Profit/(loss) for the year 1,546 (112)

Share of profit/(loss) (50%) 773 (56)

Total share of profits from joint ventures 626 186

Associate

The Group has a 20% holding in NSP which is a key strategic supplier of power.

The table below summaries the financial information of NSP.

iii. North South Power Company Limited


201531 December

2014

Total assets 278,668 267,100


Net assets 27,832 45,056

Revenues 61,764 63,179

Expenses (25,360) (29,811)

Finance costs (49,703) (40,589)

Loss before tax (13,299) (7,221)

Income tax credit - 2,165

Loss for the year (13,299) (5,056)

Share of loss (20%) (2,660) (1,011)




18 Loans to subsidiary

COMPANY


At cost2015 2014

Balance at 1 January 134,284 95,087

Advanced during the year 1,374 31,758

Loan repayment - (1,000)

Transfer – related party 7,296 -

Amounts capitalised to equity (note 16) (99,999) -

Interest charged during the year (note 10) - 8,439


Current 40,000 28,000

Non-current 2,955 106,284

42,955 134,284

During the year, CEC Plc advanced CEC Africa interest free loans amounting to USD1.374 million and has no fixed repayment period. As per original intention the USD100 million of the loans were converted into equity. The balance outstanding is payable on demand and or convertible to Equity. The non-current balance of USD2.955 million will not be recalled within 12 months.

As at 31 December 2014 CEC Plc had advanced CEC Africa loans amounting to USD 122.525 million. The loans were advanced under six agreements and accrue interest at rates of LIBOR plus 5% - 8.5%

The loans are repayable on demand and have an option of converting the repayable amount (including the accrued interest) into shares in CEC Africa. The intention is to call the USD42.955 million loans after 2 years.

19 Inventories See accounting policy in note 31(o)

GROUP COMPANY


Fuel 1,749 1,749 1,430 1,748

Spares and consumables 4,344 4,143 916 1,121

6,093 5,892 2,346 2,869

In 2015, inventories of USD3.735 million (2014 : USD4.775 million) were recognized as expenses during the year and included in cost of sales.




20 Trade and other receivables

GROUP COMPANY


Trade receivables 336,604 186,602 81,494 74,429

Less: impairment provision (135,592) (45,059) (2,071) (2,071)

201,012 141,543 79,423 72,358

Prepayments and deposits 4,445 2,368 651 672

Other receivables 5,100 24,724 6,917 5,401

210,557 168,635 86,991 78,431

a. Other receivables

The Company in 2007 approved a Share Ownership Plan (ESOP) to allow members of staff to purchase shares in the Company at the time of floatation of these Company shares. The plan allowed the members of staff to obtain the loans to enable them to purchase shares. The other receivables include USD367 million (2014: USD986 million) due from employees under the ESOP.

b. The Group’s exposure to credit and currency risk is disclosed in note 30.

21 Cash and cash equivalents

GROUP COMPANY


Cash at bank 2015 2014 2015 2014

Bank balances 49,791 66,957 40,185 43,309

Margin deposits 11,136 35,469 - -

Petty cash 6 17 6 17

60,933 102,443 40,191 43,326

Bank overdrafts - (10,143) - (10,143)

As per statement of cash flows 60,933 92,300 40,191 33,183

a. The Company has an overdraft facility of USD12.5 million. The overdraft facility bears interest at 5.5% above the 1 month USD LIBOR.b. Margin deposit relates to long term portion of the balance of USD40 million deposited in the Debt Service Reserve Account maintained with creditor bank. The amount is held as lien in line with the terms and conditions under which the Company was granted a loan of USD122 million for financing of its acquisition of a 60% interest in AED Plc.

The Group’s exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are disclosed in note 30.




22 Share capital See accounting policy in note 31(i)

GROUP COMPANY


Authorised1 Special Share of ZMW1.40

At 1 January 3,250 1,817 3,250 1,817

Rights issue - 1,433 - 1,433

At 31 December 3,250 3,250 3,250 3,250

Issued and fully paid 1 Special Share of ZMW1.40

At 1 January 2,849 1,817 2,849 1,817

Rights issue - 1,032 - 1,032

At 31 December 2,849 2,849 2,849 2,849

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to vote per share at meetings of the Group. The number of ordinary shares under Authorised share capital is 2,000,000,000 and the issued are 1,625,000,597

23 Loans and borrowings See accounting policy in note 31(e)

GROUP COMPANY



Addition during the year 18,956 119,000 15,000 119,000

Loan from related parties - 10,000 - -

Payments during the year (20,747) (122,519) (13,145) (122,519)


Current 14,020 32,566 14,020 13,151

Non-current 221,612 204,857 87,575 86,589

235,632 237,423 101,595 99,740

Standard Bank 14,020 13,151 14,020 13,151

United Bank for Africa - 19,415 - -

14,020 32,566 14,020 13,151

The amounts payable within one year and after one year are as per contractual terms of the Group’s interest bearing loans and borrowings which are measured at amortised cost. The details of the Group’s exposure to interest rate, foreign currency and liquidity risk is in note 30.




23 Loans and borrowings (continued)

2015 2014

In thousands of US Dollars Payment CapitalInterest Total Payment Capital

Interest Total

Group

Less than 1 year 14,020 20,029 46,215 32,566 19,370 51,936

More than 1 year 221,612 77,565 287,011 204,857 72,000 276,857

235,632 97,594 333,226 237,423 91,370 328,793

Company

Less than 1 year 14,020 7,880 21,900 13,151 7,370 20,521

More than 1 year 87,575 30,550 87,575 86,589 - 86,589

101,595 38,430 109,475 99,740 7,370 107,110

Senior debt

In May 2014, the Group signed a USD120 million loan facility of which USD105 million was drawn down in 2014 and the remaining USD15 million in 2015. This facility was syndicated and led by Standard Bank. As at 31 December 2015, the loan balance of USD101.595 million was made up of two tranches, the Commercial Lender (CL) and Developmental Financial Institutions (DFI) tranche. The CL comprises Stanbic Bank Zambia Limited, Standard Chartered Bank and Citibank International Plc. The Commercial tranche bears interest of 3 months LIBOR plus a margin of 5.25%. The balance of the Commercial tranche at 31 December 2015 was USD34.220 million. The DFI tranche comprises Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO), Deutsche Investitions - Und Entwicklungsgesellschaft Mbh (DEG), Société De Promotion Et De Participation Pour La Coopération (Proparco). The DFI tranche bears interest of 3 months LIBOR plus a margin of 5.75% for the first 84 months and 6.5% thereafter. The balance of the DFI tranche at 31 December 2015 was USD67.375 million. The loan is payable in March 2026.

United Bank for Africa

On 22 August 2013, KANN Utility obtained a long-term loan of USD122 million from a consortium of local and foreign commercial banks for the purpose of part payment of the outstanding consideration amount on acquisition of a 60% interest in AED Plc. The loan initially carried interest at LIBOR plus 8.5% compounded quarterly with a moratorium on interest and capital payments till 22 August 2014 and 31 December 2014 respectively. The loan was restructured on 31 December 2015 and the capital repayment moratorium period has been extended till 31 March 2017. The restructured interest rate is now Libor plus 10%. The principal loan amount is repayable in 23 equal instalments commencing 30 June 2017. The UBA loan is secured by:

i. Lien on the 60% shares of the Company in its subsidiary, AED Plc;ii. Pledge of the equity investment of the shareholders in the Company;iii. A first fixed and floating charge over the share of the Company in AED Plc;iv. A first charge over the various facility accounts in favor of the creditor bank on behalf of the Company;v. Corporate guarantee of CEC Africa; andvi. A security deposit of USD40 million transferred to the Debt Service Reserve Account (“DSRA”)

Zambian Energy Corporation (Ireland) Limited

In 2014, CEC Africa obtained a long term loan of USD10 million from a related party, Zambian Energy Corporation (Ireland) Limited (ZECI). The loan carries interest at LIBOR +8% and is unsecured. The loan is repayable in 2018.




24 Other payables

GROUP COMPANY


(a) CNMC Luanshya Copper Mines (CNMC LCM) 10,952 10,952 10,952 10,952

Less amounts payable to CNMC LCM within one year

(2,980) (1,490) (2,980) (1,490)

7,972 9,462 7,972 9,462

(b) First Quantum Mining and Operations - 6,644 - 6,644

(c) Konkola Copper Mines (KCM) 49,963 - 49,963 -

Amounts paid during the year (8,391) - (8,391) -

Less amounts payable to KCM within one year (4,500) - (4,500) -

(b) First Quantum Mining and Operations 37,072 - 37,072 -

(d) Mopani Copper Mines (MCM) 4,573 - 4,573 -

(e) CAPMI 4,525 - - -

Grand total 54,142 16,106 49,617 16,106

a. The CNMC Luanshya Copper Mines (CLM) long term creditor relates to the procurement of transmission assets in Luanshya area from CLM. The credit is interest free and repayment is over seven years upon reaching certain milestones. The assets were acquired in December 2012. At the inception of the agreement, the Company recognised an asset and liability at an amount equal to the fair value of the equipment. In 2014, the agreed threshold of 196,244,000kWh was reached, hence, a payment of USD2.980 million is due in 2016.

b. The First Quantum Mining and Operations (FQM) long term creditor relates to the procurement of transmission assets in Ndola area from FQM. The credit is interest free and repayment is over ten years effective from the date when the conditions of the agreement will be met. The assets were acquired in December 2008. At the inception of the agreement, the Company recognized an asset and liability at an amount equal to the fair value of the equipment. The movement between 2014 and 2015 is attributed to charges of capital charge income levied by CEC Plc.

c. The Konkola Copper Mines (KCM) long term creditor relates to the procurement of transmission assets in Chingola area from KCM. The credit is interest free and repayment is over eleven years upon reaching certain milestones. The assets were acquired in December 2015. At the inception of the agreement, the Company recognised an asset and liability at an amount equal to the fair value of the equipment. In 2015, the agreed target was reached, hence, a payment of USD4.5 million is due in 2016.

d. The Mopani Copper Mines (MCM) long term creditor relates to the procurement of transmission assets in Kitwe area from MCM. The credit is interest free and repayment is over five years upon reaching certain milestones. The assets were acquired in December 2015. At the inception of the agreement, the Company recognised an asset and liability at an amount equal to the fair value of the equipment.

e. Under the Credit Advanced Payment for Metering Implementation (CAPMI), AED Plc customers paid for prepaid meters to be installed in their homes.

f. The Company’s exposure to currency and liquidity risk related to trade and other payables is disclosed in note 30.




25 Employee benefits See accounting policy in note 31(p)

(i) The amounts recognised in the statement of financial position are as follows:

GROUP COMPANY


Present value of unfunded obligation 3,860 6,333 3,860 6,333

Total employee benefit liabilities 3,860 6,333 3,860 6,333

(ii) Regulation and Governance

This scheme is unfunded and the employer only pays a benefit upon retirement of an individual qualifying for the benefit. The regulator, Pensions and Insurance Authority (PIA) does not regulate gratuity schemes such as this one. However, companies that provide an additional and separate unfunded gratuity in their books should operate within the governing covenants and agreements with employee representative bodies. Taxation of this scheme falls under the framework and administration of this arrangement, including decisions as to whether to prefund the benefit costs, or amend the arrangement design.

CEC Plc awards terminal benefits to its employees upon retirement, in addition to the retirement benefit received from the CEC Pension Trust Scheme. The benefits are payable depending on date of joining the Company as well as seniority. The benefits are paid as below:

(iii) Movement in net defined benefit liability

GROUP COMPANY



Interest cost 856 1,200 856 1,200

Current service cost 227 318 227 318

Benefits paid (947) (442) (947) (442)

Actuarial gains (1,096) (1,537) (1,096) (1,537)

Exchange differences (1,513) (1,048) (1,513) (1,048)


(iv) Expense recognised in profit or loss

Interest cost 856 1,200 856 1,200

Exchange differences (1,513) (1,048) (1,513) (1,048)

Current service costs 227 318 227 318

(430) 470 (430) 470




25 Employee benefits (continued)

(v) Included in other comprehensive income

Actuarial gains (1,096) (1,537) (1,096) (1,537)

(vi) Actuarial assumptions

The following were the principal actuarial assumptions at the reporting date (expressed as weighted averages).

GROUP COMPANY

2015 2014 2015 2014

Discount rate 22.5% 18.5% 22.5% 18.5%

Salary growth 18% 15.0% 18.0% 15.0%

Inflation rate 15% 12.0% 15% 12.0%

(vii) Sensitivity analysis

Reasonably possible changes, at the reporting date, to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the Defined Benefit Oligation (DBO) as at 31 December 2015 by the amounts shown below.

Impact on DBO

Assumption Change USD’000

Discount rate +1% (200)

-1% 219

Salary increase +1% 316

-1% (293)




26 Deferred income

(a) CEC Liquid GROUP COMPANY


At the beginning of the year 7,833 8,777 7,833 8,777

Amortisation (653) (944) (653) (944)

At the end of the year 7,180 7,833 7,180 7,833

(b) DBSA grant GROUP COMPANY


At the beginning of the year - - - -

Grant received 5,000 - 5,000 -

Grant armotisation - - - -

At the end of the year 5,000 - 5,000 -

(c) Amounts advanced under CAPMI GROUP COMPANY


At the beginning of the year - - - -

Amounts advanced 6,587 - - -

At the end of the year 6,587 - - -

Grand total 18,767 7,833 12,180 7,833

a. In 2012, CEC Plc entered into an Indefeasible right of use agreement of the excess capacity on its Telecoms Assets with CEC Liquid Telecommunication Limited for a period of 15 years for a consideration of USD9.790 million. The consideration is being amortised over 15 years.

b. In 2015, CEC Plc received a Capital grant of USD5 million from the Development Bank of Southern Africa (DBSA) for the construction of a 220kV double circuit transmission line between Zambia and the Democratic Republic of Congo. DBSA was acting as an agent of the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) under the Tripartite Trust Fund (TTF). The project is yet to be capitalized, hence, no amount has been amortised.




27 Trade and other payables

GROUP COMPANY


Trade payables 238,283 281,897 72,566 64,436

Accrued expenses 119,252 33,642 6,947 4,043

Other payables 72,714 1,376 8,088 8,190

Social security and PAYE 870 924 870 924

431,119 317,839 88,471 77,593

28 Related party transactions

CEC Plc owns 50% of Hai Zambia and CEC Liquid Telecom. CEC Plc also owns 100% of CEC Africa and CEC-KHPL.

The following transactions were carried out with related parties:

i. Amounts due from related parties GROUP COMPANY


CEC Africa - - - 7,294

CEC Liquid Telecom 1,844 1,695 1,844 1,695

1,844 1,695 1,844 8,989

ii. Amounts due to related parties GROUP COMPANY


Hai Zambia 16 - 16 25

Xerxes Global Investments 3102 3102 - -

3118 3102 16 25

iii. Sales to related parties GROUP COMPANY


CEC Africa - - - 409

Hai Zambia 16 16 16 16

CEC Liquid Telecom 149 146 149 146

165 162 165 571

iv. Purchases from related parties GROUP COMPANY


Hai Zambia 77 117 77 117

CEC Liquid Telecom 1 - 1 -

78 117 78 117




28 Related party transactions (continued)

v. Directors’ remuneration

A listing of the members of the Board of Directors is included in the Directors’ Report on page 37.

During the year, Directors in the Group received cash remuneration for services rendered to the Company of USD0.343 million (2014 : USD0.313 million).

During the year, Directors in the Group received cash remuneration for services rendered to the Group USD3.498 million (2014: USD2.288 million)

vi. Executive management remuneration (Executive management team, excluding Directors (shown in (v))

COMPANY

In thousands of US Dollars 2015 2014

Short term employment benefits 3,441 3,787

Post-employment benefits 385 199

3,826 3,986

29 Management of financial risk

Financial risk

The Group is exposed to a range of financial risks through its financial assets and financial liabilities. The most important components of this financial risk are interest rate risk, foreign exchange risk and credit risk. These risks are exposed to general and specific market movements.

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

Credit risk

The Group has exposure to credit risk, which is the risk that a counter party will be unable to pay amounts in full when due. The key area where the Group is exposed to credit risk is trade and other receivables.

The Group’s exposure to credit risk is influenced mainly by individual characteristics of each customer. The demographics of the Group’s customer base, including the default risk of the industry and country, in which customers operate, has less of an influence on credit risk. Approximately 10% of the Group’s revenue is attributable to sales transactions with a single customer.

The Group enters into Agreements with new customers, each customer is analysed individually for creditworthiness before credit terms and conditions are offered. The Group’s review includes trade references from other suppliers, when available, and in some cases bank references. Credit limits are established for each customer, which represents the maximum open amount without requiring approval from the senior management; these limits are reviewed annually. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a cash basis.

In monitoring customer credit risk, customer supplies are within the predetermined credit limits, and further supplies are restricted if amounts remain outstanding for more than 60 days, regardless of the amount.

The Group does not require collateral for trade and other receivables.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main component of this allowance relates to individually significant exposures, and a collective loss component is established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment of statistics for similar financial assets.




29 Management of financial risk (continued)

Capital management

The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders. The Company has complied with all capital requirements of its funders.

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

Capital structure

GROUP COMPANY


Cash and cash equivalents (note 21) 60,933 92,300 40,191 33,183

Loans and borrowings (note 23) (235,632) (237,423) (101,595) (99,740)

Equity 292,974 436,903 381,487 279,478

118,275 291,780 320,083 212,921

The Directors define capital as equity plus cash less borrowings and its financial strategy in the short term is to minimize the level of debt in the business whilst ensuring sufficient finances are available to continue the Group’s business activities. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

Currency risk

The Group is exposed to foreign currency risks arising from exchange rate fluctuations. Foreign currency denominated purchases and sales, together with foreign currency denominated borrowings, comprise the currency risk of the Group. The risks are minimized by matching the foreign currency receipts to the foreign currency payments as well as holding foreign currency bank accounts.

Interest rate risk

The Group is exposed to interest rate risk to the extent of the balance of the bank accounts and borrowings.




30 Financial instruments See accounting policy in note 31(h)

Exposure to currency, interest rate, credit and liquidity risk arises in the normal course of the Group’s business.

i. Credit risk

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

GROUPCARRYING AMOUNTS

COMPANYCARRYING AMOUNTS


Loans to subsidiaries (note 18) - - 42,955 134,284

Amounts due from related parties 1,844 1,695 1,844 8,989

Trade and other receivables (note 20) 206,112 166,267 86,430 77,759

Cash and cash equivalents (note 21) 60,933 102,443 40,191 43,326

268,889 270,405 171,420 264,358

The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:




Domestic 71,488 92,528 71,488 65,805

Other 129,524 49,015 7,935 6,553

201,012 141,543 79,423 72,358

Impairment losses

The aging of trade receivables at the reporting date was:

Group 2015 2014

In thousands of US

DollarsGross Impairment Net Gross Impairment Net

Days

0-21 days 51,006 - 51,006 24,673 - 24,673

22-45 days 19,356 (3,194) 16,162 19,253 (9,304) 9,949

46-59 days 33,643 (12,748) 20,895 10,797 (10,797) -

Over 60 days 232,599 (119,650) 112,949 131,879 (24,958) 106,921

336,604 (135,592) 201,012 186,602 (45,059) 141,543




30 Financial instruments (continued)

Impairment losses (continued)

i. Credit risk

Company 2015 2014

In thousands of US

DollarsGross Impairment Net Gross Impairment Net

Not past due

0-21 days 33,054 - 33,054 35,306 - 35,306

22-45 days 3,388 - 3,388 12,113 - 12,113

46-59 days 1,773 - 1,773 10,797 - 10,797

Over 60 days 43,279 (2,071) 41,208 16,213 (2,071) 14,142

81,494 (2,071) 79,423 74,429 (2,071) 72,358

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

GROUP COMPANY



New provisions 90,533 43,046 - 136


The collectability of receivables is assessed at the reporting date and specific allowances are made for any doubtful receivables based on a review of all outstanding amounts at the year end. Bad debts are written off during the year in which they are identified.

ii. Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.





ii. Liquidity risk (continued)

The following are the contractual maturities of financial liabilities:

31 December 2015 - Group In thousands of US Dollars

CarryingAmount

Contractualcash flows

Within1 year

1 to 2 years

2 to 5years

Longer than 5 years

Non-derivative financial liabilities

Amount due to related parties 3,118 3,118 3,118 - - -

Loans and borrowings 235,632 348,739 14,020 29,868 35,151 269,700

Trade and other payables 485,261 485,261 431,119 4,525 - 49,617

Total 724,011 837,118 448,257 34,393 35,151 319,317

31 December 2014 - Group In thousands of US Dollars

CarryingAmount


Within1 year

1 to 2 years

2 to 5years

Longer than 5 years


Amount due to related parties 3,102 3,102 3,102 - - -


Trade and other payables 333,945 333,945 317,839 16,106 - -

Bank overdraft 10,143 10,143 10,143 - - -

Total 584,613 675,983 394,741 98,932 117,226 81,190

31 December 2015 - Company In thousands of US Dollars

CarryingAmount


Within1 year

1 to 2 years

2 to 5years

Longer than 5 years


Amount due to related parties 16 16 16 - - -


Trade and other payables 138,088 138,088 88,471 - - 49,617

Total 239,699 278,079 102,507 14,020 40,850 96,342

31 December 2014 - Company In thousands of US Dollars

CarryingAmount


Within1 year

1 to 2 years

2 to 5years

Longer than 5 years


Bank overdraft 10,143 10,143 10,143 - - -

Amount due to related parties 25 25 25 - - -


Trade and other payables 93,699 93,699 77,593 16,106 - -

Total 203,607 203,607 100,912 30,132 54,870 25,057





iii. Exposure to currency risk

Group 2015 2014

At 31 December


USD

Nai

ra

Expo

sure

(U

SD

equi

vale

nt)

ZMW

Exp

osur

e (U

SD

equi

vale

nt)

USD

Tot

al

USD

Nai

ra

Expo

sure

(U

SD

equi

vale

nt)

ZMW

Exp

osur

e (U

SD

equi

vale

nt)

USD

Tot

al

Financial assets

Trade and other receivables 79,746 123,555 2,811 206,112 75,055 90,204 1,008 166,267

Amounts due from related parties 1,844 - - 1,844 1,695 - - 1,695

Cash and cash equivalents 51,105 8,816 1,012 60,933 32,913 59,117 10,413 102,443

Total financial assets 132,695 132,371 3,823 268,889 109,663 149,321 11,421 270,405

Financial liabilities

Trade and other payables (166,149) (320,125) (2,105) (385,261) (94,992) (237,946) (1,007) (333,945)

Loans and borrowings (235,632) - - (235,632) (237,423) - - (237,695)

Bank overdraft - - - - (4,106) - (6,037) (10,143)

Total financial liabilities (401,781) (320,125) (2,105) (724,011) (336,521) (237,946) (7,044) (581,511)

Gap (269,086) (187,754) 1,718 (455,122) (226,858) (88,625) 4,377 (311,106)

Company 2015 2014

At 31 December

In thousands of US DollarsUSD

ZMW Exposure (USD

equivalent)USD Total USD

ZMW Exposure (USD

equivalent)USD Total

Financial assets

Trade and other receivables 83,529 2,811 86,340 76,751 1,008 77,759

Amounts due from related parties 44,799 - 44,799 8,989 - 8,989

Cash and cash equivalents 39,221 970 40,191 32,913 10,413 43,326

Total financial assets 167,549 3,781 171,330 118,653 11,421 130,074


Trade and other payables (136,379) (1,709) (138,088) (92,692) (1,007) (93,699)

Amounts due to related parties - (16) (16) - - -

Loans and borrowings (101,595) - (101,595) (99,740) - (99,740)

Bank overdraft - - - (4,106) (6,037) (10,143)

Total financial liabilities (237,974) (1,725) (239,699) (196,538) (7,044) (203,582)

Gap (70,441) 2,072 (68,369) (77,885) 4,377 (73,508)

The following significant exchange rates applied during the year

Closing rate Average rate

2015 2014 2015 2014

Exchange rate USD USD USD USD

ZMW 10.9806 6.3800 8.630 6.1548

Naira 196.5 183 194.2 166





iii. Exposure to currency risk (continued)

Exchange rate sensitivity

A strengthening (weakening) of the US Dollar by 10 percent, as indicated below against the Naira and Kwacha at 31 December 2015, would have increased/(decreased) equity and profit or loss by the amounts shown below. This computation is based on the foreign exchange rate variance that the Group considered reasonably possible at the reporting date. The computation assumes all the other variances remain constant.

Strengthening Weakening

In thousands of US Dollars Equity Profit or loss Equity Profit or loss

31-Dec-15

Naira (18,775) (18,775) 18,775 18,775

31-Dec-14

Naira (8,862) (8,862) 8,862 8,862

Company

31-Dec-15

Zambian Kwacha 207 207 (207) (207)

31-Dec-14

Zambian Kwacha 437 437 (437) (437)

iv. Interest rate risk

At the reporting date the Group had the following interest – bearing financial instruments:




Variable rate instruments

Loans and borrowings (235,632) (237,423) (101,595) (99,740)

Cash and cash equivalents 60,933 92,300 40,191 33,183

(174,699) (145,123) ( 61,404) (66,557)

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in the interest rates at the reporting date would have increased/ (decreased) equity and profit or loss by the amounts shown below. The analysis assumes all the other variables remain constant.

GROUP COMPANY

Strengthening Weakening Strengthening Weakening

In thousands of US Dollars100 basis points 100 basis points 100 basis points 100 basis points

Equity Profit or loss Equity Profit or loss Equity Profit or loss Equity Profit or loss

31-Dec-15

Variable rate instrument 1,747 1,747 (1,747) (1,747) 614 614 (614) (614)

31-Dec-14

Variable rate instrument 1,451 1,451 (1,451) ( 1,451) 666 666 (666) (666)





Fair value sensitivity analysis for fixed rate instruments

The Group does not have fixed rate instruments, hence, they do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect the statement of comprehensive income.

v. Fair values

Fair values versus carrying amounts

The fair values of financial assets and liabilities, together with carrying amounts shown in the balance sheet are as follows:

Group 31 December 2015 31 December 2014

In thousands of US DollarsCarrying Amount Fair Value Carrying

Amount Fair Value

Financial assets

Trade and other receivables 206,112 206,112 166,267 166,267



Total financial assets 268,889 268,889 270,405 270,405



Trade and other payables (485,261) (485,261) (333,945) (333,945)

Bank overdrafts - - (10,143) (10,143)

Amounts due to related parties (3,118) (3,118) (3,102) (3,102)

Total financial liabilities (724,011) (724,011) (584,613) (584,613)

Net position (455,122) (455,122) (314,208) (314,208)

Company 31 December 2015 31 December 2014

In thousands of US DollarsCarrying Amount Fair Value Carrying

Amount Fair Value

Financial assets

Trade and other receivables 86,340 86,340 77,759 77,759

Loans to subsidiary 42,955 42,955 134,284 134,284



Total financial assets 177,037 177,037 264,358 264,358



Trade and other payables (138,088) (138,088) (93,699) (93,699)

Bank overdrafts - - (10,143) (10,143)

Amounts due to related parties (16) (16) (25) (25)

Total financial liabilities (239,699) (239,699) (203,607) (203,607)

Net position (62,662) (62,662) 60,751 60,751




31 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by the Group.

Set out below is an index of the significant accounting policies, the details of which are available on the note reference below.

A. Basis of consolidationB. RevenueC. Finance income and finance costsD. Income taxE. BorrowingsF. Earnings per shareG. Foreign currency H. Financial instrumentsI. Share capitalJ. Property, plant and equipmentK. Intangible assets L. ImpairmentM. ProvisionsN. Segment reportingO. InventoriesP. Employee benefitsQ. Development costs

A. Basis of consolidation

(i) Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date – i.e. when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if they are related to the issue of debt or equity securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.




31 Significant accounting policies (continued)

A. Basis of consolidation (continued)

(i) Business combinations (continued)

If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based measure of the replacement awards compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre-combination service.

(ii) Non-controlling interests (NCI)

NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(iii) Subsidiaries

Subsidiaries’ are entities controlled by the Group. The Group ‘controls’ an entity if it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date when control ceases.

(iv) Loss of control

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

(v) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(vi) Interest in equity-accounted investees

The Group’s interests in equity-accounted investees comprise interests in associates and a joint venture.

Associates are those entities in which the Group has significant influence, but not control or joint control over the financial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for liabilities.

Interests in associates and joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profits or loss and OCI of equity accounted investees, until the date on which significant influence or joint control ceases.





B. Revenue

Revenue is recognized from monies earned from generation, transmission, distribution and supply business activities which are deemed to form part of the ordinary course of business. Revenue from prepaid electricity is deferred and recognized as when the customer consumes / uses electricity. Revenue is stated net of value added tax (VAT), rebates and discounts.

Revenue is recognized when the significant risks and rewards the ownership has been transferred to the buyers of electricity and no significant uncertainties remain regarding the deviation of consideration or associated costs.

Revenue comprises the fair value of consideration received or receivable for the generation, transmission, distribution and supply of electricity to the end users.

Other Income

Income earned from activities outside the ordinary course of business including customer contributions to dedicated assets used to supply power and power trading undertaken.

C. Finance income and finance costs

Finance income comprises interest income on funds invested, bank interest received, interest on overdue accounts and dividend income. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established. Finance costs comprise interest expense on borrowings. All non – qualifying borrowing costs are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

D. Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity, or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax payable also includes any tax liability arising from the declaration of dividends.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit nor loss.

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.





D. Income tax (continued)

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

E. Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowing using the effective interest method.

F. Earnings per share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by dividing the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for the effects of all dilutive potential ordinary shares, which comprise convertible redeemable accumulative preferred stock.

G. Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currency of the Group entities at exchange rates at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Foreign currency differences are generally recongised in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are not translated.





G. Foreign currency (continued)

Foreign operationsThe assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into US Dollar at exchange rates at the reporting date. The income and expenses of foreign operations are translated into US Dollar at the exchange rates at the dates of the transactions.

Foreign currency differences are recognised in OCI and accumulated in the foreign currency translation reserve (translation reserve), except to the extent that the translation difference is allocated to NCI.

When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary that includes a foreign operation while retaining control, then the relevant proportion of the cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

H. Financial instruments

Non-derivative financial assets

The Group classifies non-derivative financial assets into the following category: loans and receivables.The Group classifies non-derivative financial liabilities into the other financial liabilities category.

Non-derivative financial assets and financial liabilities – recognition and de-recognition

The Group initially recognises loans and receivables issued on the date when they are originated.The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial assets are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

Non-derivative financial assets – measurement

Loans and receivables

These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method. Loans and receivables comprise trade and other receivables, cash and cash equivalents and loans to subsidiaries.





H. Financial instruments (continued)

Non-derivative financial liabilities – measurement

Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. Non-derivative financial liabilities comprise other financial liabilities and include interest bearing loans and borrowings and trade and other payables.

Amortised cost

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition, minus principle repayment and plus or minus cumulative amortisation using the effective interest method, with any difference between cost and redemption value.

Offsetting

Financial assets and financial liabilities are not offset, unless the Group has a legal right to offset the amounts and intends either to settle on a net basis or realize the asset and settle the liability simultaneously.

Cash and cash equivalents

In the statement of cash flows, cash and cash equivalents includes bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management.

I. Share capital Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

J. Property, plant and equipment

Recognition and measurement Items of property, plant and equipment are measured at cost or valuation less accumulated depreciation and accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.





J. Property, plant and equipment (continued)

Recognition and measurement (continued)

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of the item of property and equipment, and are recognized net within other income in profit or loss. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.

Subsequent expenditureExpenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately, including major inspection and overhaul expenditure is capitalised. Other subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the item of property, plant and equipment. All other expenditure is recognised in profit or loss as an expense as it is incurred.

DepreciationDepreciation is recognised in the profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets under finance leases are depreciated over the shorter of the lease term and their useful lives.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows: Rates %Buildings 2Primary equipment (Transmission) 1.5 – 8.33Secondary equipment (Distribution network) 1.5 – 8.33Motor vehicles 20Office equipment, furniture and fittings 20

Capital work in progress is not depreciated.

Depreciation methods, useful lives and residual values are reviewed at each reporting date, and adjusted if appropriate. There were no revised estimates in respect of items of property, plant and equipment during the year.




31 Significant accounting policies (continued) K. Intangible assets

Other intangible assets Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.

Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Amortisation Amortisation is based on the cost of an asset less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful lives for the current and comparative years are as follows:

• Purchased software 3 – 5 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.





L. Impairment

Non derivative financial assets Trade and other receivables

Financial asset are assessed at each reporting date to determine whether there is objective evidence of impairment.

Objective evidence that financial assets are impaired includes:

• default or delinquency by a debtor;• restructuring of an amount due to the Group on terms that the Group would not consider otherwise;• indications that a debtor or issuer will enter bankruptcy;• adverse changes in the payment status of borrowings or issuers;• the disappearance of an active market for a security; or• observable data indicating that there is measureable decrease in expected cash flows from a group of financial assets.

Financial assets measured at amortised costThe Group considers evidence of impairment for trade and other receivables and loans to subsidiaries. All individual significant assets are individually assessed for impairment. Those found not to be impaired are then collectively assessed for any impairment that has been incurred but not yet individually identified. Assets that are not individually significant are collectively assessed for impairment. Collective assessment is carried out by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Group uses historical information on the timing of recoveries and the amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested by historical trends.

An impairment loss is calculated as the difference between an asset’s carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.

Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than investments and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units (CGUs).





L. Impairment (continued)

Non – Financial assets (continued)

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGUs exceeds its recoverable amount.

Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

M. Segment reporting

IFRS 8 requires segments to be identified on the basis of the internal reports about operating units of the Group that are regularly reviewed by the Chief Operating Decision Maker to allocate resources and to assess their performance. A segment is a distinguishable component of the Group that is engaged either in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments. Segment revenue is based on the geographical location of customers.

N. Inventories

Inventories are measured at the lower of cost and net realisable value.

Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventories held by the method most appropriate to the particular class of inventory, with valuation being on weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less all estimated costs necessary to make the sale.





O. Employee benefits

Pension obligations

All local employees below 60 years are registered with the statutory defined contribution pension scheme. A defined contribution scheme is a pension plan under which the Group pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees’ benefits relating to employee service in the current and prior periods. For the defined contribution scheme, the Group makes mandatory contributions to the National Pension Scheme Authority. These contributions constitute net periodic costs and are charged to the profit or loss as part of staff costs in the year to which they relate. The Group has no further obligation once the contributions have been paid.

Secondly, there is a defined benefit pension scheme, the assets of which are held in a separate trustee-administered fund. The pension scheme is funded by contributions to the pension scheme. The contributions by the Group are charged to the profit or loss in the period in which the contributions relate. The Group contributes 10.7% and the employees 5% of the employee’s basic salary towards the scheme.

Defined employee benefits

The expected costs of providing post-retirement benefits under defined benefits arrangements relating to employees service during the period are charged to profit or loss. Any actuarial gains and losses on remuneration are recognized immediately in other comprehensive income. In all cases, the pension costs are assessed in accordance with the advice of independent qualified actuaries but require the exercise of significant judgements in relation to assumptions for future salary and pension increases, long term price inflation and investment returns. While management believes the assumptions used are appropriate, a change in assumptions would impact the earnings of the Group.

P. Development costs

Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs.

Other development expenditure is recognised in profit or loss as incurred.

Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.




32 New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning on or after 1 January 2015, and have not been applied in preparing these financial statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards early. These will be adopted in the period that they become mandatory unless otherwise indicated:

Effective date Standard, Amendment or Inter-pretation

Summary of Requirements

1 January2016

Recoverable AmountDisclosures for Non-Financial Assets(Amendments to IAS 36)

The amendments provide additional guidance on the application of materiality and aggregation when preparing financial statements.

The amendments apply for annual periods beginning on or after 1 January 2016 and early application is permitted.

The impact of the adoption of the standard on the financial statements for the Group has not yet been quantified.

1 January 2018 IFRS 9 Financial Instruments1) On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, which replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial Instruments:

The standard is effective for annual periods beginning on or after 1 January 2018 with retrospective application, early adoption is permitted.


1 January 2018 IFRS 15 Revenue from contracts with customers

This standard replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and SIC-31 Revenue – Barter of Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised.

This new standard will most likely have a significant impact on the Group, which will include a possible change in the timing of when revenue is recognised and the amount of revenue recognised.

The standard is effective for annual periods beginning on or after 1 January 2017, with early adoption permitted under IFRS.







33 Capital commitments

Capital commitments authorised and contracted for by the Directors as at 31 December 2015 amounted to USD1.939 million (2014: USD7.546 million).

34 Contingent asset and liabilities

34.1 ERB Tariff Increase

The ERB awarded an electricity tariff increase to ZESCO applicable to all mining companies with effect from 2nd April 2014.

The ERB communicated a 28.8% increase from 5.31 USc/kWh to 6.84 USc/kWh for CEC Plc under the Bulk Supply Agreement (BSA) between ZESCO and CEC Plc. Under the various Power Supply Agreements (PSAs) between CEC Plc and its mining customers, this tariff decision resulted in differentiated increase linked to different customer tariff categories.

Most of the mines have contested this tariff increase and have since commenced an action in the High Court by way of Judicial Review. During the period from 2nd April, 2014 to 31 December, 2015 the mines opted to pay the invoices in part, based on the old tariffs exclusive of the 2014 ERB tariff increase.

Pursuant to the ERB directive, ZESCO has continued to invoice CEC Plc on the basis of the new tariffs and CEC Plc, in turn, has continued to invoice its mining customers on the same basis. From a working capital perspective, CEC Plc payments to ZESCO during the period have been based on the old tariff prevailing (exclusive of 2014 ERB tariff increase), pending determination of the matter in the High Court.

In this regard, in the event of the court’s ruling in favour of the ERB, it will be expected that CEC will pay an amount equivalent to USD135.890 million to ZESCO upon receipt of the owings from the mining houses.

34.2 Legal Proceedings

There were some legal proceedings outstanding against the Group at 31 December, 2015. Provisions have not been made in the financial statements in respect of such claims, based on professional advice and management’s best judgement.

35 Events subsequent to the reporting date

Dividends

Subsequent to the reporting period, the Directors approved, on 29 January 2016, the payment of a dividend of US Cents 1.0092 per ordinary share, which translates to 11.36 Ngwee (K0.1136) per share, using the Bank of Zambia mid-rate applicable on the date of declaration. The dividend was to be paid to the shareholders registered in the share register of the Company at the close of business on Friday, 4 March 2016. Dividend payment was effected on Monday, 7 March 2016.

Tariff increase

Subsequent to reporting date, as part of the NERC approved 10 year tariff plan AED Plc end user consumer tariffs were increased on average 20% effective 1 February 2016. This should result in increased collections, which will improve AED Plc’s working capital position.

Apart from the materials highlighted above, there were no material events after 31 December, 2015 requiring disclosure in the financial statements.


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Website : www.cecinvestor.comEmail : [email protected]

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Copperbelt Energy Corporation Plc 2015 annual report