INTEGRATED
ANNUAL REPORT
For the year ended 31 December 2023
Investing SMARTLY www.zccm-ih.com.zm
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
Contents Page
About this report 1
About Us 2
§ Our Investments 3 – 5
§ Our Strategy and KPI’s 7
§ FY 2023 Group Performance Highlight 8 – 9
§ Operating Environment 10 – 13
§ Risk Management 14 – 18
Chairperson’s Statement 19 – 22
Report of the Directors 23 – 31
Chief Executive Ofcer’s Statement 32 – 34
Executive Management Team 35
Operation’s Report
§ Subsidiary Companies’ Performance 36 – 41
§ Associate Companies’ Performance 42 – 47
§ Other Investments Performance 48
§ Climate Related Financial Disclosures 49 – 52
Directors’ Responsibilities in respect of the Preparation of the Consolidated and Separate Annual
Financial Statements 53
Independent Auditor’s Report 54 – 60
Annual Financial Statements
Consolidated and Separate Statements of Financial Position 61 – 62
Consolidated and Separate Statements of Prot or Loss and Other Comprehensive Income 63 – 64
Consolidated and Separate Statements of Changes in Equity 65 – 66
Consolidated and Separate Statements of Cash Flows 67 – 68
Notes to the Annual Financial Ftatements 69 – 197
Corporate Information 198
Appendix 199 – 203
Konkola Copper Mines
ZCCM INVESTMENTS
HOLDINGS PLC
Investing SMARTLY
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
1
ABOUT THIS REPORT
The Integrated Annual Report for the year ended 31 December 2023 provides a holistic view of ZCCM Investments
Holdings Plc (“the Company or ZCCM-IH”) and its subsidiaries (“the Group”) business model, how the Company is
managed and how it manages its investment portfolio. This report therefore provides a complete analysis of our
business to satisfy the information needs of key stakeholders that will use the Integrated Report. The information
presented aims to provide our various stakeholders with a good understanding of the nancial, human, social,
environmental and economic impacts of ZCCM-IH to enable them to evaluate our ability to create sustainable
value for our stakeholders.
FRAMEWORK
The Financial Statements set out on Pages 61 to 197 have been prepared in accordance with International
Financial Reporting Standards (IFRS Accounting Standards) and its interpretations as issued by the International
Accounting Standard Board ("IASB”). Our Integrated Report is prepared in compliance with the Companies Act
of Zambia and the listing requirements of the three stock markets on which ZCCM-IH is listed namely: Primary
market – Lusaka Securities Exchange, and Secondary markets – Paris Euronext Access and London Stock
Exchanges.
SCOPE AND BOUNDARY
This report outlines who we are, what we do and how we create value, providing insights into our structure,
strategy, objectives, performance, governance, and future viability. The report provides an overview of the
operations and performance of all businesses in which ZCCM-IH is invested. The scope of this report relates
to ZCCM-IH as an investment holding company and as a group encompassing its subsidiary and associate
investee companies’ activities and material matters arising from its investment activities. Material developments
beyond the reporting period up to the date of publishing of this report have been included.
MATERIALITY
This report provides information on all those matters that we believe could substantively affect value creation at
ZCCM-IH. Written primarily for current and prospective investors, the report is of interest to any stakeholder who
wishes to make an informed assessment of ZCCM-IH’s ability to create value over time. This report presents the
identied material information through a clearly structured narrative. Additional information not material for this
report, but of interest for other purposes, are provided on our website: www.zccm-ih.com.zm
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
2
ABOUT US
ZCCM Investments Holdings Plc (ZCCM-IH) is a premier diversied mining investment and operations company,
with signicant and focused interests in Zambia’s mining and energy sectors. The Group’s portfolio commodity
mix includes copper, gold, amethyst, manganese, limestone, coal and electric power energy. The shareholding
structure is as follows: the Industrial Development Corporation Ltd (IDC) holds 60.3%, Government of the Republic
of Zambia (GRZ) holds 17.3%, National Pension Scheme Authority (NAPSA) holds 15% and the remaining 7.4% is
held by private investors. The geographical spread of the minority shareholders, who number over 4000, cover
countries in Europe, Africa, the Caribbean, Australia, Asia and North America.
The Company has a primary listing on the Lusaka Securities Exchange, and secondary listings on the – Euronext
Access Paris and London Stock Exchanges under ISIN number ZM0000000037 on all listings.
Vision: “To be a world-class mining and energy investment company that benets the people of Zambia”
This vision’s underlining aspiration of being world class entails that:
• Our global competitiveness edge is driven by our value propositions, extensive and deep industry
knowledge and technical expertise in mining, nancial and investment management;
• We uphold the highest institutional standards in Environmental, Social and Governance principles and
Transparency; and that,
• We have a resilient organisational structure that thrives on a high-performance culture that has
exceptional employee skill sets and talent management practices.
Mission: “To create tangible wealth sustainably for the benet of the Zambian people and all our stakeholders”.
• The underlying and fundamental aspect of our mission is creation of wealth in a sustainable manner.
This entails that: Our strategy is informed by ambition that is focused, innovative, agile and adaptable to
the changing environment;
• We are driven by creating and maximising value through value addition and beneciation of commodities
within our portfolio; and,
• We build sustainability in all aspects through commodity diversication that will lead to sustained business
growth.
Our vision and mission are espoused and supported by our core values that are deeply ingrained principles
guiding all of our Company's actions. The following values serve as our corporate cultural cornerstones:
• Integrity: We resolve to always act and operate ethically, in dealing with one’s colleagues and for one’s
stakeholders even when no one is looking.
• Teamwork: We will always strive to work together as a team.
• Respect: We give respect to ourselves, our peers, our stakeholders, subordinates, our superiors and our
business partners
• Transparency and accountability: We respect processes and procedures in an open manner in all our
dealings and take ownership of our actions.
• Efciency: We will achieve more with less and apply all our resources optimally.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
3
ABOUT US (continued)
Our Investments
S/N Asset Name % Interest Product/Service
Status as at date of this
report.
01 Mopani Copper Mines Plc 100.0 Copper cathode and
anode slimes
Operational
02 Limestone Resources Ltd 100.0 Supplier of limestone
products
Operational
03 Ndola Lime Company Ltd 100.0 Supplier of limestone
products
Winding up
04 Nkandabwe Coal Mine Ltd 100.0 Coal mining Winding up
05 Misenge Environmental and
Technical Services Ltd
100.0 Services to the mining
sector
Operational
06 Kariba Minerals Ltd 100.0 Amethyst mine Operational
07 Mushe Milling Ltd 100.0 Milling Winding up
08 Kabundi Resources Ltd 100.0 Manganese mining Development
09 Investrust Bank Plc 71.4 Commercial bank In possession by Bank of
Zambia
10 Zambia Gold Company Ltd 51.0 Gold mining, exploration
and trading
Development/Exploration
11 Central African Cement Ltd 49.0 Cement and thermal
power energy
Development
12 Rembrandt Properties Ltd 49.0 Real estate Operational
13 Consolidated Gold Company
Ltd.
45.0 Gold processing Operational/Divestment
14 Maamba Collieries Limited 35.0 Supplier of coal and
generator of 300Mw
thermal power
Operational
15 Copperbelt Energy
Corporation Plc
31.07 Distribution network to
large-scale copper mines
on the Copperbelt in
Zambia
Operational
16 Konkola Copper Mines Plc 20.6 Copper cathode,
copper-cobalt alloys and
anode slimes
(In provisional liquidation)
17 CNMC Luanshya Copper
Mines Plc
20.0 Copper concentrates
and copper cathode
Operational
18 Kansanshi Mining Plc 20.0 Copper concentrate,
smelter, Copper anode,
copper cathode and
Gold Dore
Operational
19 Lubambe Copper Mine Plc 20.0 Copper concentrates Operational
20 Mingomba Mining Limited 20.0 Copper concentrates Exploration
21 Copper Tree Minerals Limited 15.6 Copper cathode Development
22 NFC Africa Mining Plc 15.0 Copper concentrates Operational
23 Chibuluma Mines Plc 15.0 Copper concentrates Operational/Further
Exploration
24 Chambishi Metals Plc 10.0 Copper cathode and
cobalt metal processing
Care and maintenance
25 Oranto Petroleum Limited 10.0 Oil and gas Exploration/Divestment
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
4
ZCCM-IH
Mining Assets • Mopani Copper Mines Plc
• Limestone Resources Ltd
• Ndola Lime Company Ltd
• Chibuluma Mines Plc
• CNMC Luanshya Copper Mines Plc
• Kansanshi Mining Plc
• Konkola Copper Mines Plc
• Lubambe Copper Mines Plc
• Kariba Minerals Ltd
• NFC Africa Mining Plc
• Kabundi Resources Ltd
• Zambia Gold Company Ltd
• Copper Tree Minerals Limited
Technical Services • Misenge Environmental and
Technical Services Ltd
Manufacturing/
Processing
• Consolidated Gold Company Ltd.
• Chambishi Metals Plc
• Mushe Milling Ltd
• Central African Cement Limited
Financial Services Investrust Bank Plc
Real Estate Rembrandt Properties Ltd
Energy Assets • Maamba Collieries Limited
• Copperbelt Energy Corporation Plc
• Oranto Petroleum Ltd
ABOUT US (continued)
Our Investments (continued)
List of investments as per sector
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
5
ABOUT US (continued)
Our Investments (continued)
The current portfolio as per sectoral investment value contribution is illustrated in the gure below. The pie charts
further shows the direction the Company intends to take in line with the 2023-2026 strategic plan, realigning its
portfolio to focus on Mining, Energy and Beneciation/Value Addition.
Portfolio Mix Snapshot
Real Estate
4%
Manufacturing/
Processing
4%
Real Estate
1%
Financial
Services
4%
Mineral Value
Addition
11%
Technical Services
4%
Energy
20%
Energy
14%
Mineral Value
Addition
14%
Technical Services
4%
Mining
64%
2026 2023
Mining
56%
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Kansanshi Mining Plc
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
7
OUR STRATEGY AND KEY PERFORMANCE INDICATORS
The year ended 31 December 2023 marked the rst year of our revised four-year (2023 – 2026) strategy period
(SP). The key pillars underpinning this ZCCM-IH SP period and performance progress as at 31 December 2023
are set out below:
No.
STRATEGIC GOAL/
PILLAR KEY TARGETS PERFORMANCE PROGRESS
1 Achieve Financial
excellence and
sustainability
• Income growth of from prior
year;
• Annual average prot after
tax of Consistency in dividend
pay-outs to shareholders with a
dividend pay-out ratio of 35%;
and
• Portfolio return (NAV growth)
above the higher benchmark
or 40%.
• Recorded total income* of
ZMW6,942 million in 2023.
• Achieved a prot after tax of
ZMW 4,841 million.
• Total dividend of ZMW724 mil-
lion declared for 2021 and 2022.
• NAV per share movement in-
crease from ZMW153.48 in 2022
to ZMW232.72 in 2023.
2 Strengthen
stakeholder
relationships and
improve
stakeholder
satisfaction.
• Improve the ZCCM-IH brand
recognition to 90%;
• Improve stakeholder relations;
and
• Improve Compliance rates to
100%.
• Increased brand recognition to
68%.
• Strenthened shareholder
engangement and
management
• Compliance at 98%.
3 Achieve
operational
excellence and
business focus.
• Improve Corporate
Governance index;
• Implement an agile entreprise
Technology architecture ; and
• Optimise the ZCCM-IH
organisational structure.
• Corporate Governance index
at 100%.
• 80% of business processes inte-
grated.
• Organisational design process
in progress
4 Invest in our
people.
• Implement a high-performance
culture; and
• Promote learning and develop-
ment; and
• Develop and implement staff
retention strategies.
• % of high performers at 30%.
• 78% of employees with skills
upgraded
• Staff turnover at 1%.
*Total income comprises revenue from contracts with customers, other income, fair value gain on nancial
assets , investment income and nance income.
•
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Five-Year Group Performance Highlights
31 Mar
2019
31 Dec
2019
31 Dec
2020
31 Dec
2021
31 Dec
2022
31 Dec
2023
RETURNS
Total Returns (ZMW Mn) 2,458 1,605 8,428 -8,144 -4,815 -12,976
Return on Opening Equity (%) 28.00% 15.00% 67.00% -38.80% -37.61% -164.07%
Earnings per share (ZMW) 2.79 1.91 13.91 -78.19 -23.54 -25.35
FINANCIAL POSITION
Total Assets (ZMW Mn) 13,412 15,248 23,296 46,818 48,919 58,464
Net Asset Value (ZMW Mn) 11,025 12,630 21,004 12,809 7,909 -5,691
NAV Per Share ZMW 68.56 78.54 130.62 79.66 49.18 -35.39
Current ratio 0.90 0.83 1.17 1.25 1.11 0.46
Cash and cash equivalents
(ZMW Mn) 74 57 181 185 329 360
GEARING
Debt (ZMW Mn) 104 - 171 25,414 29,029 -
Debt to equity % 0.94% 0.00% 0.81% 66.49% 78.59% 0.00%
Net Cash (Debt) to Equity % 0.30% 0.00% 0.00% 66.33% 78.40% 5.96%
ROA: Return on Assets, is computed as prot for the year expressed as a percentage of closing total assets for the
year
EPS: Earning Per Share, is computed as prot for the year divided by total number of issued shares
ZMW 11.7
billion
-ZMW25.35
-ZMW 4.08
billion
-7.0%
Revenue
EPS
Loss for the year
ROA
FY 2023 Group Performance Highlights
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
9
FY 2023 Group Performance Highlights (continued)
Dividend Policy
The ZCCM-IH dividend policy provides that the Company may pay a minimum of 35% of the unconsolidated
realised net prot after tax for a particular nancial year, when conditions for declaring a dividend are met after
considering the Company’s free cash ows and Investment needs.
The following table shows the Company’s historical dividend declaration:
Year Dividend Declared ZMW Per Share Total Dividend
2023 Dec 1.51 ZMW243 million
2022 Dec 2.41 ZMW387 million
2021 Dec 2.09 ZMW336 million
2020 Dec 0.53 ZMW 85 million
2019 Dec 0.33 ZMW 53 million
2019 March 0.33 ZMW 53 million
2018 March 0.61 ZMW 98 million
2017 March 0.84 ZMW 135 million
2015 March 1.56 ZMW 251 million
Zambia Gold Company Ltd
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
10
OUR OPERATING ENVIRONMENT
Global Economy
Global economic growth is held up well in the face of sharp monetary policy tightening and geopolitical shocks.
Europe avoided a recession in the winter of 2022/23 (helped by its shift away from Russian oil and gas), and US
consumer spending continued to grow in the rst half of 2023. China’s economic rebound following the exit from
its zero-covid policy has zzled out, but growth remained higher than in 2022. Strength in the global economy
reected a good starting point. Rising corporate prots, aided by high prices, protected consumption and
investment. These factors limited the weakening in global growth to 2.3% at market exchange rates in 2023, from
3.1% in 2022, a reasonable outturn given the headwinds.
Strong household and corporate balance sheets helped the global economy to weather price pressures, higher
interest rates and geopolitical tensions. EIU forecasts that the global economy will continue to skirt a recession,
growing by 2.3% in 2024 - the same rate as estimated in 2023. Faster growth in Europe (led by Germany) will
counteract softer US expansion in 2024, while moderate stimulus will stabilise China’s economy.
OECD ination is forecast to moderate from 4.4% in 2023 to 2.2% in 2024. That prices will not undo recent gains
of 2021-23, however, will preserve a source of social tension. Ination in several emerging and frontier markets
will remain rapid into 2024. Scenarios related to Russia’s invasion of Ukraine and the US-China rivalry will remain
major sources of geopolitical risk, with the potential to upend our global outlook. Even absent major escalation
in either arena, however, global rms will revisit their approach to supply chains and markets as geopolitical
factors increasingly inuence trade and investment policies, driving changes in global capital allocation.
Renewables are expected to continue their rapid growth, driven in part by their cost competitiveness—in many
regions they are already the lowest-cost option for incremental new-build power generation. Renewable energy
sources are expected to provide between 45 and 50 percent of global generation by 2030, and between 65
and 85 percent by 2050. In all scenarios, solar is the biggest contributor of renewable energy, followed by wind.
The ramp-up of renewables could see emissions from power generation reduced by between 17 and 71 percent
by 2050 compared to present levels, despite a doubling or even tripling of demand. However, the renewables
build-out faces challenges, from supply-chain issues to slow permitting and grid build-out implications.
Global copper producers beneted from robust China demand in 2023 as decarbonization drivers offset a
weak property market. Mined supply could return strongly until 2025, tipping the market into a modest, multiyear
surplus. South America’s challenging regulatory and political environments, which impede delivery of new
mines, remain solid midterm supports. In this report, our interactive copper supply-and-demand model analyses
risks and opportunities for the rest of the decade.
Demand for electric vehicles and renewables could remain decisive drivers over the next two decades,
offsetting the negative pull from China’s maturing economy and sustaining consumption at or slightly above
long-term trends. Yet in the near term, copper could fall below US$8,000 a ton, with marginal cost support kicking
in at US$7,400.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Our Operating Environment (continued)
Zambian Economy
Zambia is posting strong growth but in a rising inationary environment. This is mainly being driven by a currency
weakening that is breeding cost push effects wider. Investors still found kwacha bonds attractive despite
premiums above ination narrowing. The country continues to register offshore interest from players that still
hold a bullish view around the sovereign posture post full debt restructure. The Kwacha has been consistently
depreciating, reaching new record highs in 2023. This trend is concerning as it could potentially undermine the
economic progress made so far this year.
Towards the end of 2023, the Central Bank raised the cash reserve ratio 550 bps to 17.0% in a space of two weeks
in addition to upward adjusting its benchmark interest rate to 11.0% in the quest to stem a currency slide that
continues to depreciate. The country continued to grapple with rising cyclical demand for foreign exchange
for agribusiness inputs in the fourth quarter while the supply side remains constricted by lower mining production
whose royalties feed directly to the treasury by passing the forex markets.
Gross Domestic Product (GDP) estimates for the third quarter of 2023 show that the economy grew by 5.1 percent
from 7.5 percent in the third quarter of 2022. This translates in a slowdown in growth of 2.4 percentage points
compared to the corresponding quarter in 2022. The estimates are based on the year- on-year comparison of
GDP at constant 2010 prices. The GDP quarterly growth rate can be seen in the gure below.
Figure 1: GDP Quarterly Growth Rate 2021 – 2023 (Source – ZAMSTATS)
The key industries driving growth included:
Information & communication (4.9%), Construction (1.5%), Wholesale and retail (1.2%). Others included Financial
and Insurance services, Manufacturing and Transportation and storage which accounted for 0.7%, 0.3% and
0.3% respectively. On the other hand, Agriculture, Forestry and Fishing (-0.9%), along with Mining and quarrying
(-0.9%), Electricity (-0.1%) and Administrative and support service activities (-0.3%t) had a negative effect on
overall GDP growth. Industry growth contributions provide an insight into the sources of growth in the economy.
Annual ination for December 2023 increased to 13.1 percent from 12.9 percent recorded in November 2023.
This means that on average, prices of goods and services increased by 13.1 percent between December 2022
and December 2023 as shown in the gure below:
2021 2022 2023
Q1
3.0%
4.70%
9.80%
7.50%
7.50%
5.80%
2.80%
4.60%
4.40%
5.70%
5.50%
8.00
Q1 Q1Q3 Q3 Q3 Q4Q2 Q2 Q2Q4 Q4
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
12
DEC-22 JAN-23 FEB-23 MAR-23 APR-23 MAY-23 JUN-23 JUL-23 AUG-23 SEPT-23 OCT-23 NOV-23 DEC-23
9.9
9.4
9.8
9.9
10.2
9.9
9.8
10.3
10.8
12.0
12.6 12.9
13.1
Our Operating Environment (continued)
Zambian economy (continued)
Source - ZAMSTATS
Figure 2: Annual Ination (Dec 2022 to 2023)
The cumulative total trade for the period January to December 2023 was ZMW415.5 billion while that of 2022 for
the same period was ZMW349.7 billion representing a 18.0 percent increase as shown in the gure below:
Figure 3: Total Trade (Dec 2022 to 2023)
The total value of exports via all modes of transport for the period January to December 2023 was ZMW210.8
billion. The total volume of exports via all modes for the period January to December 2023 was 10.2 million Mt.
The total value of imports via all modes of transport for the period January to December 2023 was ZMW204.7
billion. In terms of volumes, a total of 7.2 million Mt of imports was recorded for the year 2023. Exports mainly
comprising domestically produced goods, increased by 14.6 percent to ZMW21.1 billion in December 2023
from ZMW18.4 billion in November 2023. This was mainly on account of 21.4 percent increase in export earnings
from intermediate goods.
JAN FEB MAR APR M AY JUN JUL AUG SEPT OCT NOV DEC
Source: ZAMSTATS
NOTE: Total Trade = (Export + import)
34.9
66.3
103.1
27.2
55.7
87.5
133.8
116.4
168.1
148.0
200.4
178.4
2023 2022
233.1
207.0
268.9
234.8
303.8
262.7
336.7
290.2
374.1
319.8
415.5
349.7
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
13
2021 2022
Copper Production
2023
697,790
763,287
800,696
820,000
800,000
780,000
760,000
740,000
720,000
700,000
680,000
660,000
640,000
Our Operating Environment (continued)
Zambian economy (continued)
Zambia's annual copper production in 2023 dropped to 697,790 tons from 763,287 tons in 2022 despite a strong
copper outlook. The drop in production can be attributed to the decline in production at Mopani and Konkola
copper mines. Copper remains a very important commodity in Zambia's economic development and the
continued decrease in annual production has had serious implications on the local economy. The continued
decrease in copper production is against the Government's target of 3 million tonnes per annum in 10 years.
Zambia's annual copper production gures over the last 3 years are shown in the gure below:
Annual Copper Production 2021-2023
Source – MOMMD
The currency slide, low mining production and environmental factors such as erratic precipitation remain key
upside risks to the Zambian economy which could breed further ination and power generation bottlenecks
respectively.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
14
RISK MANAGEMENT
Managing risk and uncertainty is integral to the successful delivery of our strategy and supports our desire
to grow a sustainable and resilient business. ZCCM-IH recognises that risks and uncertainties are inherent to
business activities and may have a signicant nancial, operational, or reputational impact.
Effective risk management supports the delivery of our strategic objectives and the sustainable growth of
our business. As with any business, ZCCM-IH regularly faces business uncertainties, and it is only through a
structured approach to risk management that we, continue to proactively respond to, mitigate, and manage
these risks and embrace opportunities as they arise. Our performance continues to highlight the resilience of
our people, our business model, and our proven track record of delivery despite business uncertainty. ZCCM-IH
has a robust risk management governance framework and management process in place.
The Risk Management Governance Framework
The Board is ultimately responsible for the management of risk and for setting ZCCM-IH’s risk appetite. On a
quarterly basis, the principal and emerging risks facing the ZCCM-IH are assessed, and a robust risk management
governance framework is in place which enables the Company to effectively prioritise and manage risk within
our risk appetite levels.
ZCCM-IH’s risk management governance framework has been designed using a three lines of defence model
which has been implemented to ensure there is clear ownership and delegation of responsibility for the
management and oversight of risk to support the appropriate ow of information throughout the Company.
An overview of the Company’s risk management governance structure along with the key responsibilities
within it is outlined in the diagram below.
Board of Directors
Management Team
Audit Committee
The Board has overall responsibility to ensure that appropriate risk management and internal control systems,
designed to identify, manage and mitigate risks which may impact the achievement of the ZCCM-IH’s
objectives are in place. The Board also ensure an appropriate risk appetite has been set and consider how
the Company’s longer-term viability may be impacted by the crystallisation of one or more of these risks.
Executive management are responsible for the effective operation of internal controls designed to manage
and mitigate the principal risks and uncertainties. The 3 lines defence model ensures accountability for risk
management is embedded into processes and procedures. Key management committees support risk
management including the Management Committee, and the Management Investment Committee.
Responsibility has been delegated by the Board to provide structured and systematic oversight of the
ZCCM-IH’s risk management and internal control systems. They review and monitor the effectiveness of the
Company’s risk management and internal control systems throughout the year. The Chairman reports to the
Board on its activities regarding audit matters and risk management.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
15
RISK MANAGEMENT (continued)
Enterprise Risk Management Process
Our enterprise risk management process is embedded across ZCCM-IH to support the delivery of our strategic
objectives, and our annual risk assessment is an integral part of this process. This risk assessment incorporates
a group-wide top down and bottom-up evaluation to determine the likelihood of occurrence and potential
impact of risks on the Company and Group at a residual level. Input is obtained from senior business and
functional management through a series of workshops, one-to-one interviews, and surveys, which are
consolidated to produce the Corporate Risk Register. Our risk universe forms the basis of conversations and
additional new and emerging risks are added as they are identied and assessed. A standard risk scoring
methodology has been devised to provide context and ensure consistency in reporting and evaluation of risks.
The output from this process is consolidated to determine the principal risks and uncertainties for the ZCCM-IH.
Main Risks
Our business is subject to inherent risks in nancial, regulatory, strategic, and operational areas among others.
The risks described below are not the only ones facing ZCCM-IH, but describe some of our key sources of
uncertainty and critical risk management activities:
Key focus areas:
• Strategy/Stakeholder engagement: risks arising from uncertainties that may impact the achievement of
our strategic objectives and stakeholders.
• Investments: risks arising from events and uncertainties that may impact our investment activities.
• Financial: risks arising from events related to nancial reporting, funding, liquidity, and credit.
• Operations: risks arising from our business, that have the potential to impact operational performance,
people, and environment.
• Compliance: risks arising from non-compliance.
The following are key risks that the Group considers to be of great signicance as it stands today. They have
the potential to affect the Group’s business adversely and materially. For each risk there is a description of the
possible risk impact on the Group should it occur, and the mitigation plan to manage the risk. The Group also
faces risk and uncertainties in common with other businesses. These have not been set out as key risks below.
This list is likely to change over time as different risks take on larger or smaller signicance. The size, complexity
and spread of the business and the continually changing environment in which the Group operates also mean
that the list cannot be an exhaustive list of all signicant risks that may ultimately affect the Group.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
16
RISK MANAGEMENT (continued)
Main Risks (continued)
Key Risk Type Risk Description Risk Management and Mitigation
Strategic Risk Strategic risk arises from the design
and implementation of our business
model, the key decisions made in
relation to investment and capital
allocation, as well as uncertainties and
untapped opportunities embedded
in our strategic intent and how well
they are executed. It also arises from
the negative impact that can result
from the deterioration of the Groups
reputation among stakeholders and
the public, resulting in revenue loss,
litigation, regulatory sanctions, and
decline in share price.
As the scale and breadth of its
business and operations expand,
the Group faces risks associated with
implementing its strategic initiatives.
Sub-optimal allocation of resources in
areas like investments and exploration
may result in the inability to meet the
desired strategic outcomes, such as
to effectively counter competitive
pressures.
• The Group’s strategic planning process
incorporates prioritization and focus on
strategic objectives to guide effective and
efcient allocation of resources required
to execute plans Alignment of subsidiary
strategic plans to group strategy.
• Strategy reviews for all businesses are
conducted periodically.
• Appointment of representatives on subsidiary
boards to ensure oversight.
• Ensuring that the group only invests in
opportunities that have been extensively
tested, reviewed, and approved by the
investments committee. The testing phase
includes stress testing of the models,
considerations of a legal, tax and risk opinion
to validate the business case.
Issues of Social
Licence to
Operate
This is caused by evolving expectations
around the sector’s impact on
communities and the environment
make obtaining and maintaining
our social licenses an increasingly
complex issue to navigate.
Two of ZCCM-IH subsidiaries have had
to halt their business operations, due
to changes/evolving requirements
and expectations of maintaining the
Social Licences.
• Continuous stakeholder engagement
especially with traditional leaders and their
communities.
• Taking steps in building relationships with
the indigenous communities to go beyond
doing just what’s required by regulation.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Risk Management (continued)
Main Risks (continued)
Key Risk Type Risk Description Risk Management and Mitigation
Capital/Funding
Risk
Limited access to affordable capital
required to fund exploration and identied
investment opportunities especially those
that require signicant capital outlay.
Non-availability of capital/funding for the
subsidiaries (especially the mining rms)
that is required for the capital projects
if they are to enhance/increase their
production levels.
• Our approach has been on a case-
by-case basis, from seeking for
strategic equity partners for some
of our subsidiaries such as Mopani
Copper Mines that has a signicant
contribution to ZCCM-IH’s balance
sheet by asset size, to providing funding
for the turnaround plans of others, such
as Limestone Resources and Kariba
Minerals.
Credit Risk ZCCM-IH’s Credit risk mainly stems from:
• signicant high exposure of both credit
and concentration risk emanating
from loans advanced to its subsidiaries
and other investee companies.
• Continued non-performing related
party loans, therefore increasing
its Non-Performing Loans ratio and
subsequently the impairment ratio.
Our mitigation strategy to credit risk
includes the following:
• Implementation of credit limits that are
dened by the risk appetite statement.
This provides a threshold/limit of how
much credit risk the institution can take
on to meet its set objectives.
• Enhance its Subsidiary Oversight policy,
to improve monitoring.
• Explore options to restructure loan
agreements.
Compliance Risk Compliance risk is ZCCM-IH’s potential
exposure to legal penalties, nancial
forfeiture, and material loss, resulting from
failure to act in accordance with industry
laws and regulations, internal policies or
prescribed best practices
• Ensure compliance by facilitating the
regular identication, mitigation and
reporting of compliance risk.
• Regular review of applicable legislation,
policy direction and other relevant
documentation, such as budgets to
execute directives and resolutions
Investment Risk This is the risk of incurring nancial losses in
ZCCM-IH’s portfolio in pursuit of returns. This
risk would arise from.
• Under-performance by investee
companies.
• non-performing shareholder loans and
advances; and
• Investment concentration risk.
• Change in the political, economic,
social factors and economic outlook.
• The implementation of risk
management process on all
investments and subsidiary matters to
provide assessment and identication
of emerging and on-going risks with
corresponding information and advice
on how to manage these risks. This
allows business/investment decisions to
take all relevant risks adequately into
account.
• The Group’s portfolio focus approach
includes business review meetings. The
key agenda in each of these meetings
is to assess the management of all the
key risks that the asset is exposed to.
The Group also seeks to, as much as
possible, diversify its investments by
investing in a diverse range of minerals.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Risk Management (continued)
Main Risks (continued)
Key Risk Type Risk Description Risk Management and Mitigation
Operational Risk Failure of key processes, systems and/
or people comes at additional operating
costs to ZCCM-IH, thereby reducing overall
operational efciency and effectiveness
• Establishment of clear policies and
processes.
• Embracing and fostering a culture
of diversity and inclusivity which
encourages staff to be innovative
and be supportive of each other.
• Monitoring compliance with the
policies and processes
• Clear goal setting and perfor-
mance management
A people driven approach to managing
the enabling technology and ensuring
that system support is always available. This
includes technology allowing staff to work
remotely as may be needed from time to
time.
Three Lines of Defence Model
Since the implementation of the three lines of defence model in 2021 several initiatives have been implemented
to facilitate an effective risk management system. Some of the initiatives include the implementation of Risk
Management Policies and Procedures, Annual Risk Assessments across the Group and regular assessment and
reporting of the status of the principal and emerging risks.
• The 3 lines of defence model implemented by the Company are:
• First Line of Defence: Operational Management is responsible for risk identication, managing the internal
control environment and monitoring changes in the risk prole of the Group.
• Second Line of Defence: Group functional teams ensure the rst line is operating as designed, manage
performance reviews, internal control verications and facilitate risk assessments. This includes Compliance,
Information & Cyber Security, Legal and Risk Control functions.
• Third Line Defence: Group Internal Audit function with other external assurance providers perform reviews
which give independent assurance over the operation of the internal control framework, risk management
systems and governance processes.
This model is used because it provides a standardised and comprehensive risk management process that
claries roles and provides guidance for effective risk management and governance.
The Board sets the tone and inuences the risk management culture. All strategic, business and investments
decisions are made with due consideration of the related risks and mitigants. The risk culture is fostered by
periodic risk register reviews by a cross functioning Risk Coordinators Committee. This initiative reviews the risk
registers and status of the mitigating controls.
A robust Risk Management Training Program has been implemented with a focus on operational risk
management with the objective to foster risk awareness and understanding across the institution to strengthen
the risk management.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
19
As we reect on the past scal year, it is with a sense of pride that we present to
you the operational performance and strategic developments experienced during
the nancial year 2023. The year was marked by both challenges and signicant
achievements that underscore our resilience and commitment to excellence in the
mining sector.
Performance Overview
The Group’s nancial performance has experienced a downturn, with an increased
post-tax loss of ZMW4.08 billion (US$199 million) in 2023 from ZMW3.79 billion (US$222
million) recorded in 2022, primarily due to the persistent underperformance of our
subsidiary, Mopani Copper Mines (“Mopani”).
The Group recorded an increase in total assets from ZMW48.92 billion (US$2.8 billion)
recorded in 2022 to ZMW 58.46 billion (US$2.3 billion) recorded in 2023 mainly due to
increase in fair value of investee companies during the year.
The Group’s total liabilities increased from ZMW41.01 billion (US$2.27 billion) in 2022 to ZMW64.15 billion (US$2.50 billion) in
2023 on account of unpaid interest on Glencore long-term loan facility of US$1.5 billion in addition to exchange losses
due to the depreciation of the Kwacha during the year.
The Group’s accumulated loss as of 31 December 2023 was at ZMW16.47 billion (US$639.60 million loss) [2022: ZMW11.94
billion negative (US$561.56 million loss)]. The adverse increase in retained earnings is attributable to the recorded Group
loss of ZMW4.08 billion (US$199 million loss) [2022: ZMW3.79 billion loss (US$222 million loss)].
The Company’s performance during the year was favourable with a prot for the year of ZMW4.84 billion (US$236
million) up from ZMW4.26 billion (US$249.78 million) recorded in 2022.
CHAIRPERSON’S STATEMENT
Group Performance
Mr. Kakenenwa Muyangwa
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
20
CHAIRPERSON’S STATEMENT (continued)
Performance overview
Retained Earnings- ZMW-million
Strategic Investments
Our focus on sustainable mining practices and enhancing operational efciencies across our portfolio has been
pivotal in ensuring long term environmental stewardship and maximising our operational performance. We have
made signicant progress in our key projects, as highlighted below:
• Expanded interest in Copperbelt Energy Corporation Plc (“CEC”) from 24.1% held since 2018, to 31.07%.
• Employed cutting-edge mining exploration technologies through our 20% owned associate, Mingomba
Mining Limited. Mingomba Mining Limited is a partnership between Mingomba Holdings Limited 52%,
EMR Capital, 28%, and ZCCM-IH, 20%. MML was established in 2023. At the Mingomba project, the mine
is leveraging on articial intelligence (AI) to enhance mineral exploration. This AI-enhanced method is a
signicant deviation from traditional exploration techniques, combining geoscience with data science
to optimize the exploration process. By integrating various types of data, including public and historical
records as well as information from AI-guided eld programs. This approach aims to identify geological
anomalies with a level of precision previously unattainable through conventional methods positioning
ZCCM-IH at the forefront of the industry’s evolution towards sustainability and innovation.
• After the year end, ZCCM Investments Holdings Plc (ZCCM-IH), entered into an agreement with
International Resources Holding (IRH), marking a strategic partnership focused on Mopani Copper Mines
(MCM). IRH, through its subsidiary Delta Mining, acquired a 51% stake in MCM as part of this agreement.
The investment detail includes IRH committing to investing a total of $1.1 billion in MCM. This investment
includes $620 million in new equity capital for a 51% stake in MCM, about $400 million provided as a
shareholder loan by way of novation of Glencore debt, and additional funds aimed at restructuring
existing Glencore liabilities and bolstering MCM's balance sheet.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
21
The investment will be used to fund MCM's production expansion plan, provide working capital, and contribute
to paying off part of the $1.5 billion debt previously owed to Glencore.
• Kansanshi Mining Plc: On 4th April 2023, ZCCM-IH completed the conversion of its dividend right in Kansanshi
Mining Plc (“Kansanshi”) into a Life of Mine royalty right which would provide ZCCM-IH with predictable
income streams going forward. This transaction marked a turning point for a new operating model which
would result in improving shareholder value. Kansanshi has continued to invest in its expansion program for
the S3 project which is aimed at increasing production signicantly from 2026 onwards.
• Konkola Copper Mines Plc: Signicant progress was made to resolve outstanding legal matters between
ZCCM-IH and Konkola Copper Mines Plc (“KCM”). KCM’s Provisional Liquidator entered into a written
agreement to suspend the hearing of the disputes between the parties to pursue amicable settlement of
the disputes. Following this engagement, the parties engaged in ex-curia discussions to resolve the disputes
and have reached a signicant milestone. Subsequently, the parties nalised and agreed the terms of
the new Shareholders’ Agreement and the Implementation Agreement which agreements will be legally
binding on the Parties to ensure that the renewed commitments are fullled.
Corporate Governance
Good corporate governance is fundamental to our operations. We have continued to strengthen our
governance structures, ensuring transparency, accountability, and ethical business practices.
Major Company risks in 2023
The material risks that the business remains exposed to as at close of Q4 2023, included Strategic risk, Credit risk,
Operational risk, and Compliance risk. The overall rating of the ZCCM-IH risk prole is rated as Medium as at Q4, 2023.
The key drivers for the overall company risk posture include, the signicantly high contingent off-balance sheet
liabilities, breach of the Securities & Exchange Act which resulted in being suspended from London Stock
Exchange- LSE- due to non-compliance to publish audited nancial results for 2021 and 2022, however the
company was reinstatement on the London Stock Exchange by the end of 2023.
The overall future forecast has been rated medium owing to the expected signicant reduction in the contingent
off-balance sheet liabilities once the Strategic Equity Partner (SEP) process on Mopani Copper Mines (MCM) is
concluded, increasing social license issue where two of our social licenses have been revoked and the potential
risk of this increasing, high Non-Performing Loans Ratio, and non-nalization of the Investrust Bank Financials that
has the potential to have signicant impact on the ZCCM-IH 2024 nancials now that the SEP process on MCM
is concluded.
Capital market
The ZCCM-IH share price on the three stock exchanges closed as follows, with an inclusion of the respective
market capitalisation using the issued share capital:
Market Capitalisation
31 December 2023 31 December 2022
Stock Exchange
Number of
Shares
Share price Market capitalisation Share price Market capitalisation
Lusaka Securities
Exchange
149,888,015 ZMW 42.00 ZMW6,295,296,630.00 ZMW 37.98 ZMW5,692,746,809.70
Euronext Access 10,619,577 EUR 1.54 EUR 16,354,148.58 EUR 1.40 EUR 14,867,407.80
London Stock
Exchange
292,694 US$ 1.65 US$ 483,811.47 GBP 1.29 US$ 483,811.47
Total 160,800,286
CHAIRPERSON’S STATEMENT (continued)
Strategic Investments (continued)
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
22
Lusaka Securities Exchange
The Company’s share price on the Lusaka Securities Exchange (“LuSE”) opened at ZMW37.98 and closed at
ZMW42.00 per share, which was also the low and high for the year respectively, representing a 10.58% increase
in value. During the period a total of 11,851 shares were traded in 324 transactions for a ZMW480,476.00 turnover.
Euronext Access
ZCCM-IH stock trading on the Euronext Access (“Euronext”) commenced the period trading at EUR1.40 and
concluded the year trading at EUR1.54 per share representing a 10% increase in value. Euronext traded stock
peaked at EUR1.78 per share and hit a low of EUR1.12 per share during which a total of 919,248 shares were
traded in 982 transactions for a turnover of EUR 1,277,683.00.
London Stock Exchange
The trading of ZCCM-IH shares on the London Stock Exchange ("LSE") was restored effective 27 November 2023,
following a temporal suspension on 8 May 2023 by the Financial Conduct Authority of the United Kingdom. This
suspension was due to the Company’s non-compliance with Financial Conduct Authority ("FCA") Disclosure and
Transparency Rules Sourcebook 4.1.3, related to the delayed publication of audited nancial results for the years
2021 and 2022.
The lifting of the suspension follows the successful completion and publication of the audited nancial results for
the said years.
The ZCCM-IH share price on the London Stock Exchange (“LSE”) commenced and concluded the year trading
at US$1.65 per share. This was also the high and low for the period representing a no change in value. No shares
were traded during the year hence a nil turnover for the period.
Directorate Changes
During the year, the Company had three (3) changes in terms of non-executive directors, one (1) change in the
ofce of the executive director following the appointment of Dr Ndoba J Vibetti as ZCCM-IH Chief Executive
Ofcer effective 1
st
February 2023. I wish to thank the directors that retired from the Board during the year, for
the service rendered to the Company. At the same time, I am condent that the new directors appointed in
the year, together with the colleagues they joined on the Board will live up to the huge expectations of the
shareholders and the nation at large.
Outlook
Looking ahead, we are optimistic about the future of ZCCM-IH and the mining industry at large. While we
anticipate continued market uncertainties, our strategic initiatives are designed to enhance our resilience and
growth. We will continue to focus on operational excellence, sustainable practices, strategic partnerships, and
exploring new opportunities that align with our growth trajectory. ZCCM-IH will continue to play a signicant role
in supporting Government’s long-term goals of achieving production targets of over 3 million tonnes per year
by 2032.
Acknowledgement
On behalf of the board, I extend our sincere gratitude to our employees for their hard work and dedication. We
also thank our shareholders, partners, and the communities we operate in for their continued support and trust
in ZCCM-IH. Together, we are building a stronger, sustainable, and more protable future.
Mr. Kakenenwa Muyangwa
Board Chairperson
CHAIRPERSON’S STATEMENT (continued)
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
23
REPORT OF THE DIRECTORS
The Directors submit their report together with the audited nancial statements for the year ended 31 December
2023, which disclose the state of affairs of ZCCM Investments Holdings Plc (‘the Company’) and its subsidiaries
(together “the Group”).
BOARD OF DIRECTORS
Mr. Kakenenwa Muyangwa
Board Chairperson
(Non - Executive Director)
Mr. Mubita Akapelwa
Vice Board Chairperson
(Non - Executive Director)
Mr. Philippe G. Taussac
(Non - Executive Director)
Mr. Moses Smart Nyirenda
(Non - Executive Director)
Mr. Muyangwa Muyangwa
(Non - Executive Director)
Dr. Ndoba Joseph Vibetti
(Chief Executive Ofcer)
Ms. Masitala Nanyangwe Mushinga
(Non - Executive Director)
Bishop John Mambo
(Non - Executive Director)
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
24
REPORT OF THE DIRECTORS (continued)
SHARE CAPITAL
The authorised share capital of the Company remained unchanged at ZMW2,000,000 divided as follows:
120,000,000 “A” Ordinary Shares of ZMW 0.01 each; and
80,000,000 “B” Ordinary Shares of ZMW 0.01 each.
Class “A” Ordinary Shares and Class “B” Ordinary Shares all rank pari passu in all respects.
During the year, the issued share capital remained unchanged at 160,800,286 shares with a nominal value
of ZMW1, 608,003 as detailed below:
Number of
shares
Amount
ZMW
At beginning and end of year 160,800,286 1,608,003
SHAREHOLDING BY DIRECTORS
As at 31 December 2023, Mr Philippe G. Taussac (Non-Executive Director and Chairperson of the
Investments Committee of the Board) had 162,015 shares.
CHANGES TO SENIOR MANAGEMENT
During the year 2023, the Company welcomed the following employees to Senior and middle Management:
• Dr Ndoba Vibetti, Chief Executive Ofcer. He was appointed on 1 February 2023.
• Mr Lombe Mbalashi, Chief Legal Ofcer. He was appointed on 5 June 2023.
• Mr Charles Mjumphi, Company Secretary. He was appointed on 23 March 2023.
• Mr Mukuka Kangwa, Chief Information and Technology Ofcer. He was appointed on 1 February 2023.
• Mr Gift Zulu, Procurement Manager. He was appointed on 1 August 2023.
• Ms Mwaka Mwamulima, Risk Manager. She was appointed on 1 February 2023.
PRINCIPAL ACTIVITIES
ZCCM-IH (“the Company’’) is an investments holdings company which has a primary listing on the Lusaka
Securities Exchange and secondary listings on the London and Euronext Paris Stock Exchanges. The
Company has the majority of its investments held in the copper mining sector of Zambia. The Company’s
focus going forward will include the following:
• Developing and implementing investments strategies and aligning Company operations towards
maximizing of shareholder value in the mining sector;
• Monitoring the performance of investee companies to ensure they consistently declare reasonable
dividends and ensure Company growth;
• Ensuring effective representation on the Boards of the investee companies;
• Establishing and securing joint venture partnerships for projects assessed to be viable;
• Establishing metal streaming arrangements;
• Establishing a royalty model to maximize shareholder value; and
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
25
REPORT OF THE DIRECTORS (continued)
DIVIDENDS
During the year, the Company declared a dividend of ZMW 243 million (2022: ZMW 387 million).
DIRECTORATE CHANGE
During the year and up to signing date of this report, the following were changes in the directorate:
Ms Dolika E S Banda (Board Chairperson)
Appointed on 13 December 2021 and resigned 5
May 2023
Mr. Kakenenwa Muyangwa (Board Chairperson) Appointed on 5 May 2023
Mr Mubita Akapelwa (Non-Executive Director/Vice
Board Chairperson)
Appointed on 10 October 2023
Mr Muyangwa Muyangwa (Non – Executive Director/
Investment Committee)
Mrs. Masitala Nayangwe Mushinga (Non – Executive
Director/ Audit Committee Chairperson)
Appointed on 7 March 2023
Dr. Ndoba J Vibetti (Executive Director/ Chief Execu-
tive Ofcer)
Appointed on 1 February 2023
Mr Gregory Kabwe (Non – Executive Director/ Audit
Committee Chairman)
Appointed on 13 December 2021 and retired on 2
March 2023
Mr Brian Nalishuwa (Non-Executive Director)
Appointed on 7 December 2022 and retired on 10
October 2023
BOARD COMMITTEE’S FUNCTIONS
Audit Committee Remuneration Committee
Ms. Masitala Mushinga (Chairperson). (Appointed on
7 March 2023).
Mr Moses Nyirenda (Chairman)
Bishop John H Mambo Mr Bishop H Mambo
Mr Philippe G Taussac Dr Ndoba J Vibetti
Mr Vincent Nyambe (Co-opted member) Mr Muyangwa Muyangwa
Mr Brian Nalishuwa (Appointed 7 December 2022
and retired on 10 October 2023)
Mr Gregory Kabwe (Retired on 2 March 2023)
Mr Mubita Akapelwa (Non-Executive Director/Vice
Board Chairperson) (Appointed on 10 October 2023)
Ms Masitala Mushinga
Mr. Gregory Kabwe (Chairman) (Retired on 2 March
2023)
Mr Ronnie Kamanya
Dr Ndoba J. Vibetti (Chief Executive Ofcer/
Appointed 1 February 2023
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
26
REPORT OF THE DIRECTORS (continued)
BOARD COMMITTEE’S FUNCTIONS
Investments Committee
Mr Philippe G Taussac Chairman
Dr Ndoba J. Vibetti Chief Executive Ofcer
Mr Moses S Nyirenda Non-Executive Member
Mr Albert Halwampa Co-opted Member
Mr Brian Musonda Chief Investments Ofcer
Mr Basil Nundwe Co-opted Member
Mr Muyangwa Muyangwa Non-Executive Member
Mr Mubita Akapelwa Non-Executive Member
Mr Brian Nalishuwa Retired) (Non-Executive Member
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
27
REPORT OF THE DIRECTORS (continued)
BOARD COMMITTEE’S FUNCTIONS (continued)
DIRECTORS’ PARTICIPATION IN MEETINGS
Record of attendance of Board and Committee meetings held during the period to 31 December 2023.
Board Meetings:
Name of Director
03/01/23
03/02/23
17/03/23
28/03/23
07/04/23
04/05/23
17/05/23
09/06/23
23/06/
21/07/23
28/07/23
22/08/23
25/08/23
01/09/23
19/09/23
27/09/23
03/11/23
28/11/23
30/11/23
07/12/23
22/12/23
Ms Dolika Banda,
(Former Chairperson)
√ √ √ √ √
Mr Kakenenwa
Muyangwa
(Chairperson)
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Mr Moses Nyirenda √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Ms Masitala Mushinga
√ √ √ √ √ √ √ √ X √ √ √ √ √ √ √ √ √ √
Mr Gregory Kabwe
(Retired)
√ √ X X √ √
Mr Bishop John
Mambo
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
X
Dr Ndoba J Vibetti
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Mr Philippe G Taussac √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Mr Muyangwa
Muyangwa
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ X X √ √ √ X
Mr Brian Nalishuwa
(Retired)
√ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
Mr Mubita Akapelwa
(Vice Chairperson)
√ √ √ √ √
Key: √ - In attendance X – Not in attendance - Not a member on a stated date of meeting
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
28
REPORT OF THE DIRECTORS (continued)
BOARD COMMITTEE’S FUNCTIONS (continued)
Audit Committee
The committee provides oversight on the effectiveness of the Group’s operational and nancial reporting sys-
tems and accuracy of information, and that the Group’s published Financial Statements represent a true and
fair reection. The specic terms of reference include:
• Reviewing and appraising the soundness of risk management, internal controls, and the reliability and
integrity of nancial, managerial, and operating data.
• Ascertaining compliance with the ZCCM-IH Group policies and procedures.
• Evaluating asset safeguards and accountability.
• Evaluating the economy and efciency with which resources are employed.
• Reviewing operations or programs to assess whether they are being carried out as planned and whether
results are consistent with established objectives.
• Providing advice to management regarding the adequacy and effectiveness of controls regarding major
decisions.
Meeting Attendance:
Name Of Director 7/04/23 8/05/23 13/06/23 13/07/23 22/08/23 14/11/23 05/12/23
Ms Masitala Mushinga
(chairperson)
√ √ √ √ √ √ √
Mr Philippe G Taussac √ √ √ √ √ √ √
Mr Mubita Akapelwa
√ √
Mr Vincent Nyambe √ √ √ √ √ √ √
Mr Bishop John Mambo √ √ √ √ √ √ √
Dr Ndoba J Vibetti √ √ √ √ √ √ X
Mr Brian Nalishuwa (Retired)
√ √ √ √ √
Key: √ - In attendance X – Not in attendance - Not a member on a stated date of meeting
Investments Committee
To adequately supervise and monitor the investment function of the Company, the Investments Committee of
the Board’s duties and responsibilities shall be:
• To evaluate and approve or disapprove and refer all approved investments to the full Board.
To evaluate and recommend to the Board on the disinvestments.
• To periodically review each investment in terms of performance against benchmark returns for the
Company.
• To guide management on the activities of the Management Investment Committee and ensure they
comply with the laid down procedures.
• To advise the Board and guide management on investment-related issues.
• To circulate for information, quarterly reports to the Board and through the Chairman present on matters
therein, if necessary; and,
• To determine the amount to be invested in a period.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
29
REPORT OF THE DIRECTORS (continued)
BOARD COMMITTEE’S FUNCTIONS (continued)
Investments Committee (continued)
Meeting Attendance
Name of Director 18/01/23 14/07/23 02/11/23 16/11/23
Mr Philippe G Taussac (Chairman) √ √ √ √
Mr. Moses Nyirenda √ √ √ √
Mr. Albert Halwampa √ √ √ √
Mr Basil Nundwe √ √ √ √
Mr Muyangwa Muyangwa √ √ √ √
Dr Ndoba J Vibetti
√ √ √
Mr Mubita Akapelwa
√ √
Mr Brian Nalishuwa √ √
Key: √ - In attendance X – Not in attendance - Not a member on a stated date of meeting
Remuneration Committee
The committee is responsible for formulating remuneration policies and principles that promote the
success of the Company. More specically, the Remuneration Committee’s terms of reference include:
• Determine and agree with the Board the framework or broad policy for the remuneration of the Chief
Executive and such other members of the executive management as it is designated to consider.
• Determine targets for any performance-related pay schemes operated by the Company.
• In determining such remuneration packages, give due regard to the prevailing compensation levels in
comparable commercial organizations.
• Agree the policy for authorising claims for expenses from the Chief Executive and Chairman.
• Be exclusively responsible for establishing the selection criteria, selecting, appointing, and setting the terms
of reference for any remuneration consultants who advise the committee.
• Report the frequency of, and attendance by members at, remuneration committee meetings in the annual
report.
• Make the committee’s terms of reference publicly available. These should set out the committee’s delegated
responsibilities and be reviewed and, where necessary, update annually.
Meeting Attendance:
Name of Director 27/01/23 20/04/23 12/07/23 17/11/23
Mr Moses Nyirenda (Chairman) √ √ √ √
Dr Ndoba J Vibetti
X X √
Mr Bishop John Mambo √ √ √ √
Mr Muyangwa Muyangwa √ √ √ √
Mr Gregory Kabwe √
Ms Masitala Mushinga
√ √ √
Mr Ronnie Kamanya X √ √ X
Key: √ - In attendance X – Not in attendance - Not a member on a stated date of meeting
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
30
REPORT OF THE DIRECTORS (continued)
BOARD COMMITTEE’S FUNCTIONS (continued)
Remuneration Policies
Board of Directors fees and emoluments
Group Company
2023 2022 2023 2022
Item ZMW’000 ZMW’000 ZMW’000 ZMW’000
Executive Director’s fees and Emoluments 10,605 4,978 4,694 1,074
Non-executive Director’s Fees 26,477 26,176 10,465 9,265
Total 37,082 31,154 15,159 10,339
Average number and remuneration of employees
The total amount paid as remuneration to employees during the year amounted to ZMW2,167.15 million (2022:
ZMW2,145.92 million) for the Group and ZMW157.32 million (2022: ZMW129.35 million) for the Company. The
average number of employees was as follows:
Month Company Subsidiaries Group Month Company Subsidiaries Group
January 2023 105 6,508 6,613 July 2023 108 6,442 6,550
February 2023 107 6,501 6,608 August 2023 111 6,456 6,567
March 2023 105 6,479 6,584 September 2023 111 6,470 6,581
April 2023 105 6,421 6,526 October 2023 111 6,465 6,576
May 2023 107 6,439 6,546 November 2023 110 6,449 6,559
June 2023 107 6,440 6,547 December 2023 109 6,434 6,543
Staff expenses Group Company
2023 2022 2023 2022
ZMW’000 ZMW’000 ZMW’000 ZMW’000
2,167,145 2,145,918 157,323 129,353
Health and safety employee environment
Health and safety are a top priority in the Group. In order to maintain productivity, the Group ensured a healthy
environment by providing the following to employees:
• Periodic health talks to educate and sensitise employees on various health issues.
• Medical services with some medical facilities
• Subscription to the gym to ensure wellness.
• Work-Life Balance by ensuring that employees took annual leave to refreshen their minds.
• Hand sanitisers, fumigation of ofces buildings and generally a clean environment to prevent contraction
and spread of the Covid-19 virus.
The Group ensured a safe working environment by observing the following:
• Adherence to laws and regulations governing safety at places of work.
• Provision of rst aid kit
• Availability of trained rst aiders and re marshals.
• Serviceable re extinguishers
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
31
REPORT OF THE DIRECTORS (continued)
CORPORATE GOVERNANCE
ZCCM-IH activities are streamlined by the full utilisation of its Management and Board via committees that are guided
by its Corporate Governance Policies. Being a publicly listed entity, ZCCM-IH Corporate Governance Policies are in
line with various codes of conduct required by the regulatory authorities of the stock markets the Company is listed on.
The Group continued to operate by enforcing good corporate governance practices contained in Sections 82
to 122 of Part VII of the Companies Act, 2017 of Zambia, and the Lusaka Securities Exchange (LuSE) Corporate
Governance (CG) Code, publicly available on the Company’s website and from the LuSE upon request.
The Companies diversity policy is embedded in the Human Resource Policy under the clause titled “Equal
Opportunity, Diversity and Positive Action”, which states in part that, “ZCCM-IH will provide equal employment
opportunity to the Zambian nationals on the basis of merit without unlawful discrimination on the basis of age,
gender, colour, tribe, disability, race or religion”.
The Company’s internal controls are implemented amongst others through its Internal Control Policy as approved
by the Board in 2019 and incorporates guidance aligned to requirement of the Securities Act of 2016 related
to the Company’s internal controls. The Company also maintains a Business Risk Register (BRR) which identies
the risks affecting the various aspects of ZCCM-IH strategic and operational areas and how these risks are to be
mitigated. The BRR is monitored on a regular basis by Management and the Audit Committee and reported to
the Board.
Further to this, the Company has formally adopted the OECD principles of Corporate Governance.
The separation of powers between the Directors and Management on one hand and the Chairman of the Board
and the Chief Executive Ofcer on the other was strictly adhered to. All Directors except the Chief Executive
Ofcer on the Board were non-executive during the nancial period.
The Board of Directors is committed to sound corporate governance and the management of environmental
and social issues. Towards the achievement of this commitment, the Board has continued to put in place
appropriate governance policies. This is enshrined in ZCCM-IH’s Strategic Plan for the period 2020 to 2026 by
committing to enhancing its Environmental, Social, and Governance (ESG) adherence.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
32
CHIEF EXECUTIVE OFFICER’S STATEMENT
Introduction
We entered 2023 with much optimism owing to a pipeline of initiatives within
the portfolio, that would culminate in shaping the future we envisage. Some
of these included resolving legacy issues at Mopani Copper Mines Plc and
Konkola Copper Mines Plc to unlock their value; nalising the Kansanshi royalty
agreement to generate predictable and guaranteed revenue; increased
exploration activities to achieve commodity diversication; divestment from
non-core assets; recapitalising our subsidiaries to improve their performance
and protability; and reviewing our company 2020 – 2026 Strategic plan to
ascertain delivery on the set goals and objectives.
Further, at Company level, ZCCM-IH performed solidly in FY2023. Our
commitment to operational excellence saw us achieve another year of strong
company nancial results and cost performance, having maintained operating
costs at 11.5% of total income. This nancial performance is encouraging,
and we remain positive that at a Group level the picture moving forward will
change. After the year end, ZCCM-IH successfully secured Delta Mining Limited
(Delta) as the Strategic Equity Partner at MCM which forms a signicant part
of our portfolio and has great impact on our performance. This impact can be seen at Group level where we
recorded a loss of ZMW 4,076 million for FY23 of which Mopani contributed a loss of ZMW 8.98 billion.
Building a Resilient and Agile Strategy
In 2023, we reviewed our strategic plan, which has resulted in some changes. Our revisions to the strategic
plan have mainly been to our vision, mission and strategic goals. This has been driven by the need to provide
sufcient clarity on where we want to go, who we are and how we intend to ‘win’ as a company. Further, we
have streamlined the company’s strategic goals from eighteen (18) to four (4), which are:
1. Financial excellence and sustainability;
2. Strengthen stakeholder relationships and improve stakeholder satisfaction;
3. Operational excellence and business focus; and,
4. Invest in our people.
Dr Ndoba Vibetti
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
33
CHIEF EXECUTIVE OFFICER’S STATEMENT (continued)
The revision in respect to ZCCM-IH values now put in an acronym as RITTE. The main change here is the
reclassication of ‘E’ from ESG awareness to Efciency as we want to be expedient and nimble in what we do.
ESG or rather Environmental, Social and Governance will now be embedded in our processes as per industry
and global standards.
Further, we have also restated our strategic ethos from Mining SMARTLY to Investing SMARTLY. SMARTLY is an
acronym that entails: S-for sustainability, M-managing our investments proactively, A-Accretion and Agility
signifying the gradual and incremental growth of ZCCM-IH assets; R-Risk, we will ensure all investments are risk
mitigated, T – Timely, our decisions and information dissemination will be undertaken timeously, L – Longevity,
that entails ZCCM-IH investments will be undertaken with sustainability in focus; and lastly Y – Yield, entailing
ZCCM-IH investments should yield a return on investment and maximise value for our shareholders.
Our strategic thrust is now anchored on the new understanding of ‘Unlocking national wealth for all our
stakeholders’. Our focus remains streamlined to exploration, mining and energy related investments, in which we
will aim for signicant shareholding. In addition, our business operations will be optimised into business focused
units to drive efciency and focus. ZCCM-IH will identify itself as an investment company that acquires and
secures protable investments within the mining and energy sectors, from which we will maximise shareholder
value and deliver returns. This strategy will be achieved by applying proven investment principles and innovative
practices.
Most importantly, we have also focused on embedding a high-performance culture, and innovation that are
critical enablers for achieving our strategic objectives and to creating the future institution that is premised on
RITTE (Respect, Integrity, Transparency, Teamwork and Efciency) values. Our drive for continuous improvement
is at the core of our mandate and purpose. Our aspiration is to be the partner of choice for local communities,
government and joint venture partners both local and international.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
34
CHIEF EXECUTIVE OFFICER’S STATEMENT (continued)
Environmental, Social and Governance (ESG)
We recognise our ongoing responsibility to not only deliver nancial performance but also make a positive
contribution and impact to our host communities and create lasting benets for all our stakeholders in a manner
that is responsible and transparent. We know that striving for impeccable ESG principles will help us meet
stakeholder expectations. For instance, in helping to reduce our carbon footprint in our subsidiary operations,
Kariba Minerals Ltd is replacing the use of diesel for power energy with a 250KVA solar captive power plant
to power the mine operations. ZCCM-IH is committed to driving business resilience in the Group through such
sustainable mining practices that works towards decarbonisation and the use of green and sustainable energy.
We will continue to focus on the pursuit of having impeccable environmental, social and governance (ESG)
credentials embedded in our operations at both Company and Group level.
Reshaping our Corporate Culture
Everything we have planned to achieve in our strategic plan is driven and underpinned by creating a secure
and safe working environment, in which our people are able to fully utilise their capabilities. Priority in this area
is to ensure that we create a work environment that rewards and recognises innovation and hard work, whilst
at the same time upskilling and training our workforce. Added to this, in 2023, we undertook job analysis to
ascertain the responsiveness of our organogram and to make it more agile, and the same time reviewed our
incentives and performance reward mechanism.
Leveraging the Global Energy Transition Opportunities
We are working at shaping our portfolio for the future. We have an attractive project pipeline and considerable
momentum to diversify our commodity portfolio to include other critical minerals. We are further strengthening
our portfolio by recapitalising our subsidiaries and divesting from non-core mining and energy assets. We have
embarked on a robust exploration programme in our exploration licences such as the Rufunsa gold exploration
licence and Kabundi’s manganese exploration licence.
Further, we remain on track with regards to growing our foothold in the energy space, having increased our
stake from 20% to 31.07% in CEC Plc in 2023. In line with this, we believe we need to be in the best shape possible
to capture the opportunities ahead of us, which is why we are investing in the long-term health of our people
and assets. By prioritising these areas, we are creating the conditions for consistent operational and nancial
performance. As an indigenous mining and energy investment company with assets in the both the mining and
energy sectors, our portfolio is positioned and built for the future, aimed at maximising shareholder value.
Looking Ahead
Looking ahead, our focus will remain on securing business growth sustainability, with an emphasis on organic
growth, improving operational performance in our subsidiaries, exploring investment opportunities along the
mineral value chain, decarbonizing our operations at Group level, building trust with our partners and host
communities, and investing in our people, who are the greatest company asset. I believe this is what will drive
and sustain our performance and enable us to continue delivering for all our stakeholders in 2024.
We look to the future with condence that we have the right pathway to succeed with the various initiatives and
strategies aimed at creating sustainable long-term value for all stakeholders, while operating in a responsible
and ethical manner across all aspects of our business operations.
Acknowledgement
I end by expressing gratitude to ZCCM-IH members of staff, management team, the board leadership, all
representative directors on our portfolio companies, all ZCCM-IH investees and our partners who have delivered
for ZCCM-IH, its shareholders and all other stakeholders during the year.
Dr. Ndoba Vibetti
Chief Executive Ofcer
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
35
EXECUTIVE MANAGEMENT TEAM
Dr Ndoba Vibetti
Chief Executive Ofcer
Ms Chilandu Sakala
Chief Financial Ofcer
Mr Shepherd Mwanza
Chief Internal Audit Ofcer
Mr Brian Musonda
Chief Investments Ofcer
Mr Charles Mjumphi
Company Secretary
Ms Betty Meleki
Chief Human Resource and
Administration Ofcer
Mr Gift Zulu
Procurement Manager
Mr Kalembo Tito
Strategy Manager
Mr Tisa R. Chama
Chief Technical Ofcer
Ms Loisa Mbatha
Corporate Affairs Manager
Mr Lombe Mbalashi
Chief Legal Ofcer
Mr Mukuka Kangwa
Chief Information and Communications
Technology Ofcer
Ms Mwaka Mwamulima
Risk Manager
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
36
OPERATIONS REPORT
Portfolio Performance Review
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
A Subsidiary Companies
1 Mopani Copper Mines Plc For the year ended 31
st
December 2023, Mopani Copper Mines (MCM)
recorded cumulative net revenue of ZMW11.55 billion (US$562.87 million),
(2022: ZMW11.85 billion (US$695.25 million)). The net loss for the year
under review was ZMW8.96 billion (US$435.29 million) (2022: ZMW5.05
billion (US$292.55 million)).
During the year under review, MCM produced a total of 65,602 tonnes
of nished copper (2022: 72,694 tonnes). The lower production during the
year under review was mainly due to low equipment availability, and
limited ore sources to mine due to delayed development. In addition,
there were multiple outages of the xed plants across all shafts.
After the year ended 31 December 2023, ZCCM-IH achieved a signicant
development on Mopani involving a new partnership and an investment
that marks a transformative chapter for Zambia’s mining sector and
its economy at large. Zambia selected the United Arab Emirates’
International Resources Holdings (IRH), a unit linked to Abu Dhabi’s most
valuable listed company, International Holdings Company (IHC), as the
new strategic equity partner for Mopani Copper Mines. This partnership
is aimed at investing funds into Mopani to help with short-term working
capital and nance the completion of the mine development to unlock
its long-term potential. Additionally, this move is expected to restructure
the Mopani’s balance sheet and increase copper production to at least
200,000 metric tons per annum in future.
In 2024, ZCCM-IH has a 49% equity stake in Mopani Copper Mine, with IRH
through its subsidiary Delta Mining Limited (Delta) holding a 51% equity
stake after an initial investment of US$1.1 billion was made. This agreement
included nancing MCM’s Project Development Plan (PDP) by providing
working capital and restructuring certain existing Glencore liabilities.
A new Board of Directors reecting the revised shareholding structure
has been established, and further capital has been made available as
shareholder loans based on future working capital requirements.
There were no dividends declared during the period under review
(December 2022: Nil).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
37
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
A Subsidiary Companies
2 Zambia Gold Company
Limited (ZGC)
The Zambia Gold Company Limited (ZGCL) has a signicant role in the
Zambian gold sub-sector, with a mandate that spans across the country
to foster the formalisation and growth of this sector. ZGCL engages in
various stages of the gold value chain, encompassing activities such
as gold exploration, production, mine development, processing, and
the marketing of gold both within Zambia and internationally. This
comprehensive involvement is aimed at enhancing the gold sub-
sector’s contribution to the Zambian economy and ensuring sustainable
development and growth within this industry.
Zambia Gold Company is in its start phase, and for the year under
review, it did not produce any gold due to the continued suspension
of mining activities at Kasenseli by the Mines Safety Department which
is the main source of gold production. The sale of gold in the period
under review was from stock held since 2021 and was used to nance
operations of the company. ZGC continues to engage key stakeholders
to reopen the mine in 2024. ZGC shall continue conducting exploration
activities on its other licences and partnership with third party licence
holders. Zambia Gold Company Limited (ZGC) reported revenue of ZMW
38.52 million (2022: ZMW 0.03 million) for the year ended 31 December
2023. During the period under review, the company sold 33.9 Kg of gold
from Kasenseli production and trades conducted at ZGC headquarters
compared to no sales in 2022. Net loss recorded for the year was ZMW
23.35 million (2022: ZMW 51.57 million loss).
There were no dividends declared during the year under review
(December 2022: Nil).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
38
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
A Subsidiary Companies
3 Limestone Resources
Limited (LRL)
Limestone Resources Limited, formerly known as Ndola Lime Company, is
specializing in the production and supply of limestone products. Its diverse
product line-up includes quicklime, hydrated lime, and other lime product
tailored to meet specic customer needs.
The transition from Ndola Lime Company to Limestone Resources Limited
represents a strategic move to address past challenges and leverage on
new opportunities. This change signals an intent to revitalize the business,
possibly by attracting new investment, improving operational efciencies,
and better aligning with market demands. Limestone Resources Limited’s
journey reects a commitment to not only continuing its legacy of quality
limestone product supply but also enhancing its operational and nancial
health for future success.
Limestone Resources Limited has an opportunity to attract fresh capital,
revamp the business, and potentially cut the losses experienced by its
predecessor, Ndola Limestone.
During 2023, LRL continued to build up on the knowledge and experi-
ence of operating the modied VK2 which was red in October 2022 after
nearly 6 years of being idle. The modication and the prolonged idle time
presented initial challenges which took time to resolve. VK 2 was the only
operational kiln at the company as no restoration repair works were car-
ried out on VK1, while the Rotary kiln remained mothballed.
Production from VK2 was an average of 140 tonnes per day against the
kiln’s capacity of 500 tonnes per day due to technical limitations on the
kiln’s operating mode. Another key stumbling block to attain nameplate
capacity was a lack of reliable mining equipment and a frequently mal-
functioning crushing plant.
Revenue for the year was ZMW96.7 million, a notable increase from
ZMW26.8 million in 2022. The company made a loss of ZMW180.74 million
(2022: ZMW90.81 million).
There were no dividends declared during the year under review (Dec
2022: Nil)
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
39
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
A Subsidiary Companies
4 Investrust Bank PLC Investrust Bank Plc is a nancial institution in Zambia, and operations span
across Zambia with a comprehensive network of branches.
Investrust recorded an income of ZMW 202.8 million (2022: ZMW164.25
million). Investrust reported a net loss of ZMW758.18 million (2022: Loss of
ZMW2.6 million).
On the Lusaka Securities Exchange, the Bank’s share price closed at ZMW
25, maintaining the same level as in 2022.
On April 2, 2024, the Bank of Zambia (“BoZ”) took possession of Investrust
Bank Plc (“Investrust”). The possession of Investrust by BoZ was necessitated
by its insolvency. On 24 April 2024, the Bank of Zambia cancelled the
shareholding of ZCCM-IH in Investrust.
There were no dividends declared during the period under review
(December 2022: Nil).
5 Misenge Environmental
and Technical Services
Limited (METS)
Misenge Environmental and Technical Services Ltd (METS) is a subsidiary
of ZCCM-IH, and its business activities is to provide a wide range of
environmental, analytical, radiation safety, and engineering services.
METS prides itself on being a multifaceted, full-service company with a
strong record in environmental management within Zambia’s mining
and mineral processing industry. Its service range includes environmental
impact assessments, environmental compliance audits, mineral sample
preparation, water supply and sewerage systems design, radiation safety
management, and many more. The company operates with a clear
vision to lead in providing its specialized services in Zambia, driven by a
mission to deliver these services efciently to maximize shareholder value .
For the scal year ended December 31, 2023, METS reported a total of
ZMW 14.63 million in revenue for the year ended 31st December 2023
(2022: ZMW10.61 million restated), and net loss of ZMW6.48 million (2022:
prot of ZMW1.01 million restated) The company has been actively
seeking to increase third-party business by participating in several bids
during the year.
There were no dividends declared during the period under review
(December 2022: Nil).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
40
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
A Subsidiary Companies
6 Kariba Minerals
Limited (KML)
Kariba Minerals Ltd, a subsidiary of ZCCM Investments Holdings (ZCCM-IH), is
renowned for producing some of the world’s quality amethyst, a semi-precious
gemstone. The company primarily exports to China and India among others
and during the year under review, KML produced a total of 1,392.52 tonnes
of amethyst which comprised of 374.12 tonnes medium and high grade, and
1,018.40 tonnes commercial grade (2022: 1,503.58 tonnes – 327 tonnes medium
and high grade, and 1,175.76 tonnes commercial grade.)
For the year ended 31
st
December 2023, Kariba Minerals Limited (KML) reported
total revenues of ZMW29.87 million (2022: ZMW23.04 million) with a net prot of
ZMW0.55 million (2022: net loss of ZMW5.19 million).
The ZCCM-IH Board approved funding amounting of US$4.077 million for the
execution of the Kariba Minerals Limited’s Turnaround Plan. This funding aims to
improve the company’s production capabilities, fostering market development
and expansion, strengthening the balance sheet, enhancing operational
efciency, and improving its overall nancial performance going forward. The
overarching objective is to transform the company from loss making to prot
making.
There were no dividends declared during the year (2022: Nil).
7 Mushe Milling
Company Limited
Mushe Milling Ltd, initially acquired by ZCCM-IH in 2019, is undergoing liquidation
as it is deemed not to be of strategic t following a refocus to invest in mining
and energy related investment in ZCCM-IH’s revised 2020-2026 strategic plan.
The liquidation proceedings of Mushe Milling Limited (MML) began in July 2023
following the appointment of the ofce of the Ofcial Receiver as liquidator.
The liquidation of MML was still underway as at the end of the year.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
41
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
A Subsidiary Companies
8 Kabundi Resources Limited Kabundi Resources Ltd, established in May 2019 by ZCCM-IH,
operates in the Central Province of Zambia focusing on manganese
mining. Since beginning operations in May 2020, it has aimed for
a production expansion, currently running two wash plants with
capacities of 1,200 tonnes per day (8-hour shift) and 150 tonnes per
hour. The ore grade averages about 45% manganese. A total of
2,325 tonnes of manganese was produced during the year ended
31st December 2023.
Future plan includes establishing a manganese plant with a
capacity of 60,000 tonnes per annum over three phases and
developments in the Company’s manganese mining activities.
For the year ended 31 December 2023, Kabundi Resources Limited
reported total revenues of ZMW1.1 million (2022: ZMW 13.64 million)
with a net prot of ZMW3.85 million (2022: net prot of ZMW 5.5
million).
There were no dividends declared during the year (2022: Nil).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
42
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
B Associate Companies
1 Maamba Collieries Limited (MCL) Maamba Collieries Limited (MCL) reported total revenue of ZMW5.00
billion (US$243.69 million) for the year ended 31
December 2023
(2022: ZMW4.75 billion (US$278.68 million)) and had a prot after tax
of ZMW2.57 billion (US$125.04 million) (2022: prot of ZMW1.53 billion
(US$89.95 million).
In 2022, ZESCO, Zambia’s state power utility, reached a settlement
in international arbitration with Maamba Collieries Ltd to pay $518
million by August 2024 to settle outstanding arrears for power
supplied. This settlement follows arbitration in London where both
parties agreed on the terms for resolving the debt. According
to the agreement, ZESCO will discharge the arrears in tranches
by August 2023, after adjusting for a cash discount of $60 million
extended by Maamba. The settlement was reached amicably to
address overdue power purchase bills while ensuring that monthly
payments for power sales from May 2022 are fully paid to Maamba.
As at the year ended 31 December 2023 the outstanding debt from
ZESCO to Maamba was USD323.18 million (2022:US$539.93 million).
In 2023, signicant developments were observed at Maamba
Collieries Ltd (MCL), particularly around the Maamba Power
Station and its coal mining operations. MCL operates a modern
Coal Handling and Processing Plant (CHPP) that facilitates the
production of different coal products with consistent quality. Since
its privatization in 2010, MCL has made signicant improvements
in managing coal dumps to mitigate air pollution caused by
spontaneous combustion in the overburden dumps. These efforts
in environmental management have been recognized through
awards from the Zambia Environmental Management Agency
(ZEMA) .
The Maamba Power Station, fuelled by low-grade coal from MCL’s
Maamba mine, plays a crucial role in Zambia’s energy sector.
Currently, the station has two operating units, each with a capacity
of 150 MW, commissioned in 2016. There is potential for expansion,
with plans to add two more units, each also with a capacity of
150 MW, to meet the growing electricity demand in the country.
This expansion, projected to cost around US$400 million, would
potentially double the station’s output to 600 MW.
Maamba Collieries has also explored the possibility of increasing
the power station’s capacity to 600 MW to support Zambia’s
ambition to become an electricity hub in the region. A technical
feasibility study for the expansion was completed, and MCL is
seeking third party funding for the project. These developments
indicate MCL’s commitment to enhancing energy production
capabilities in Zambia, contributing signicantly to the national grid
and supporting sustainable energy security in the region.
During the year, Maamba undertook semi-annual maintenance on
unit 1 of the 150 MW thermal power units between 4
th
August 2023
to 17
th
August 2023. Unit 2 underwent semi-annual maintenance
between 25
th
March 2023 and 7
th
April 2023 as well as forced shut
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
43
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
B Associate Companies
2 Konkola Copper Mines Plc (KCM) KCM’s challenges continued during the year as the fundamental
problems surrounding the underdevelopment of the Konkola
Deep Mining Project (KDMP) remained unresolved, resulting in
the Company reporting low production from own sources and
therefore having to rely on third-party copper concentrates to
feed its Smelter. As a result, nished copper production was also
negatively impacted.
The Provisional Liquidator continued to have full control over the
operations at KCM and the Company continues to face nancial
challenges and is currently unable to produce sufcient output to
support its operations. On 5th September 2023, the Government
of the Republic of Zambia announced that it had reached
an agreement with Vedanta Resources Limited to resolve all
outstanding disputes and Vedanta committed to investing US$1.27
billion towards working capital and mine development at KCM.
Following the announcement made by GRZ, ZCCM-IH and Vedanta
have entered into various agreements which are intended to pave
way for the settlement of outstanding creditors, vacation of the
Provisional Liquidator and nally the reinstatement of the Board of
Directors at KCM.
There were no dividends declared during the year (2022: Nil).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
44
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
B Associate Companies
3 Kansanshi Mining Plc
(Kansanshi)
The principal activities of the mine includes mining, prospecting
for minerals and processing of ore in Solwezi area of North Western
Province. The key notable occurrences in 2023 were:
The successful conversion of ZCCM-IH’s dividend right in KMP to
a 3.10% Life of Mine Royalty Right. This will ensure that ZCCM-IH’s
cashows are more stable and predictable going forward.
KMP implementation of the S3 Expansion project commenced.
The S3 Expansion is a signicant $1.5 billion investment by First
Quantum Minerals aimed at extending the mine’s life into the
2040s, enhancing its production capacity, and generating
employment opportunities. It includes expanding the mining pit,
upgrading the eet, and enlarging the processing plant and
smelter. This expansion is pivotal for adding value within Zambia
and contributes to the nation’s goal of increasing mineral
processing locally and aiming to maximize the mine’s output and
efciency, thereby contributing to local economic development
and job creation. Completion is anticipated by mid-2025.
For the year ended 31 December 2023, Kansanshi recorded revenue
of ZMW32.30 billion (US$1.57 billion) (2022: ZMW25.98 billion US$1.52
billion). Net prot over the period reduced to ZMW343.83 million
(US$16.75 million) from ZMW 2.62 billion (US$153.93 million) in 2022.
The geological and hydrological challenges at Kansanshi continued
to affect average grades which were at 0.6% in 2023, signicantly
affecting the amount of copper and gold recovered.
Royalties received in 2023 were ZMW1,200.19 million (US$56.13 million)
and dividends received were ZMW170.74 million (US$9.05 million).
4 Consolidated Gold
Company of Zambia Limited
(CGCZ)
The Consolidated Gold Company of Zambia Limited (CGCZ)
represents a collaborative venture between ZCCM-IH, holding a 45%
stake, and Karma Mining Services and Rural Development, with a 55%
share. Established in 2020, this Special Purpose Vehicle is dedicated
to establishing a central hub for gold processing and trading within
Zambia.
During the year ended 31
st
December 2023, the Company produced
90.6kg (2022: 50.7kg) of gold, the majority of which was sold to Zambia
Gold Company. Revenue for the year ended 31
st
December 2023 was
ZMW54.20 million (2022: ZMW 50.81 million). CGCZ recorded a loss for
the year of ZMW9.44 million (2022: -ZMW8.76 million)
Due to ongoing protability challenges stemming from the company’s
inability to control the supply of gold feedstock, the ZCCM-IH Board
approved a divestiture from CGCZ. The Share Purchase Agreement
and the Deed of Mutual Termination were executed during the year,
awaiting the fullment of the condition’s precedent specied in the
agreement. ZCCM-IH is set to recover its initial investment of US$1.568
million over three years. Karma has already paid an upfront fee of
US$679,600.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
45
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
B Associate Companies
5 Copperbelt Energy Corporation
Plc (CEC)
Copperbelt Energy Corporation PLC (the “Company”) is
incorporated in Zambia under the Zambia Companies Act as
a public limited Company and listed on the LuSE. The Company
and its subsidiaries (together “the Group”) is involved in power
generation, transmission, distribution, supply, and professional
football through its Club subsidiary.
Key milestones noted during the year:
CEC commissioned the 34 MW Solar PV plant at our Riverside
location in Kitwe and commenced with the evacuation
of power into the grid. In addition, CEC commenced the
implementation of the 60MW Solar PV plant located at
Itimpi in Kitwe. All this is in line with the green growth agenda
and comes alongside technological improvements to the
transmission network. The combined capital investment made
for the Riverside and Itimpi Solar plants was US$75 million.
Copperbelt Energy Corporation (CEC) has also initiated
Zambia’s rst green bond program to raise $200 million on
the LuSE for further investment in solar and other renewable
energy generation projects. Through the Green Bond,
CEC’s subsidiary, CEC Renewables raised US$454 million in
the oversubscribed rst tranche of the bond program, and
this expected to anchor CEC’s green energy generation
ambitions.
For the year under review, CEC reported total revenue of ZMW7.85
billion (US$382.27million), (2022: ZMW6.38 billion (US$374.449 million))
and prot after tax of ZMW2.83 billion (US$137.65 million), (2022:
ZMW866.41 billion (US$50.82 million)). Further, the CEC share price
opened at ZMW3.78 per share and closed at ZMW7.09.
The Company declared a dividend of US$ 55.25 million with ZCCM-
IH receiving US$14.59 million (2022:US$10.3 million).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
46
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
B Associate Companies
6 Rembrandt Properties Limited Rembrandt Properties Limited (Rembrandt), a Special Purpose
Vehicle, was established through a partnership involving ZCCM-IH
with a 49% stake, Urban Brands Asset Management holding 25.5%,
and Sims Capital Ltd also at 25.5%. The entity was specically
created for the development of the Leopards Square Hotel,
featuring 74 rooms. Beyond the equity contribution from ZCCM-IH,
the company successfully secured approximately US$2.2 million
in equity contributions from the other shareholders, in addition to
obtaining debt nancing from ZANACO.
The completion of the property has stalled at approximately 95%
due to challenges with inadequate cash ows. However, the
project has been operational since the second quarter of 2022,
offering a full range of services including conferences, dining, and
accommodation.
During the year ended 31 December 2023, Rembrandt reported
total revenue of ZMW14.77 million (2022: nil) and net loss of ZMW2.47
million (2022: nil).
There were no dividends paid during the year (2022: Nil).
7 Lubambe Copper Mines Limited Lubambe Copper Mine Limited (Lubambe) reported total revenue
of ZMW2.52 billion (US$ 122.59 million) (2022: ZMW2.38 billion
(US$139.72 million)). Over the same period, the Company recorded
a loss of ZMW3.06 billion (US$ 148.86 million (2022: loss of ZMW1.83
billion loss (US$107.12 million)). Lubambe’s road to recovery was
challenging due to poor ground conditions, dewatering challenges,
and high ore dilution. Management changed its mining methods
and mine plan following completion of the SRK technical report. In
the period under review, the company implemented its 420-pump
station to improve ooding and ground conditions for mining.
Lubambe produced 14,984 tonnes in payable copper against a
budget of 22,979 tonnes.
Lubambe completed the US$150 million investment by Kobold
which was for debt restructuring and operations of the business.
This also resulted in the separation of the highly promising Extension
Project into Mingomba Mining Limited (Mingomba) with ZCCM-IH
still retaining 20% in both Lubambe and Mingomba. US$35 million
of the funding was committed for Mingomba explorations. This has
been on-going throughout the period under review. Lubambe’s
existing licence has a remaining life of the mine of less than 7 years
and there is need to explore new business opportunities.
There were no dividends paid during the year (2022: Nil).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
47
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
SN PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
B Associate Companies
8 CNMC Luanshya Copper Mines
Plc (CLM)
The principal activity of the Company continued to be the mining
of copper and exploration for other base and precious metals.
As at 31st December 2023, CLM recorded revenue of ZMW8.5
billion (US$414.51 million) (2022: ZMW7.95 billion (US$467.47 million).
The drop in year-on-year revenue was attributable to a reduction in
copper production due to the loss of ore from Baluba underground
mine which was decommissioned in December 2022. During the
period under review, CLM produced a total of 48,904 tonnes of
copper compared to copper output of 53,952 tonnes produced
in 2022.
Key developments:
CNMC Luanshya Copper Mines (LCM) is set to revitalize the old
Luanshya Mine with a $500 million investment, aiming to create
over 3,000 jobs and annually produce 40,000 tonnes of copper
concentrate. This initiative comes after the mine was dormant for 22
years due to waterlogging issues. The feasibility study for reopening
the mine is underway, with dewatering scheduled to start in April
2024 following the rainy season.
For the year ended 31st December 2023, the Company recorded
a prot of ZMW2.93 billion (US$142.71 million) (2022: ZMW1.68 billion
(US$98.71 million). Despite a drop in copper production, strong
copper price and cost reduction initiatives led to the increase in
protability in 2023.
Due to this improved performance and positive equity position,
the Company declared dividends of US$30 million with US$6 million
paid to ZCCM-IH (2022: US$70 million was declared).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
48
OPERATIONS REPORT (continued)
Portfolio Performance Review (continued)
PORTFOLIO COMPANY 2023 PERFORMANCE REVIEW
C Other Investments
1 NFC Africa Mining Plc (NFCA) For the year ended 31 December 2023, NFCA reported revenue
of ZMW12.8 billion (US$619.82 million), (2022: ZMW9.9 billion
(US$548.46 million)). The drop in year-on-year revenues were
attributable to lower-than-expected production during the year
due to a suspension of operations that occurred in November
2023. During the year under review, NFCA produced a total of
68,757 tonnes of copper compared to copper output of 67,626
tonnes produced in 2022.
During the period under review, the Company recorded a
prot of ZMW1.5 billion (US$76 million) (2022: ZMW1.01 billion
(US$56.01 million)). Despite a drop in copper production, strong
copper price and cost reduction initiatives led to the increase
in protability in 2023.
The company currently has a high debt burden and the
increase in US Dollar denominated lending rates has signicantly
increased the company’s interest costs.
There were no dividends paid during the year ended 31
December 2023 (2022: ZMW51.78 (US$3 million)).
2 Chibuluma Mines Plc Chibuluma remains on lease to LC & Y with no operations of
its own as the life of mine has been depleted. The company
received a total of US$ 0.26 million in royalty revenue against a
budget of US$ 0.23 Million. The company is currently exploring
potential areas that would be deemed viable for renewed
mining and has engaged Kobold Metals of the USA to apply
their advanced Articial Intelligence technology to enhance
chances of discovery.
There were no dividends paid during the year under review
(2022: Nil).
3 Chambishi Metals Plc During the period under review, Chambishi continued to be
under care and maintenance due to lack of feedstock for
the plant and other strategic reasons.
There were no dividends paid during the year under review
(2022: Nil).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
49
CLIMATE RELATED FINANCIAL DISCLOSURES
The ZCCM-IH Board remains committed to the Company’s progress in implementing our approach to climate
change aligning with our broader approach to responsible mining. Alongside our Annual Report, we are
providing a summary report on the approach and contribution to sustainable and responsible mining. The Board
recognizes the importance of maintaining a strategy that remains resilient to the risks and opportunities of the
evolving energy transition and encourages us to continue our focus on progressing towards achieving reduced
net emissions in future.
We recognise our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement by
decarbonising our own operational footprint. We believe that our contribution should take a holistic approach
and have considered our commitment through Joint Venture energy investment vehicles with one of our
stakeholders and to develop a large-scale renewable energy infrastructure to service the Copperbelt mining
and industrial sectors.
Energy transition metals/commodities such as copper, nickel, cobalt, zinc, and vanadium could become
substantially more important given their role in the technologies / infrastructure that underpin low or no carbon
energy sources. We are prioritising exploration activities towards these transition metals and diversication of our
portfolio of metals, is likely to mitigate the nancial impact of a negative demand shift in the event of substitution
of a particular commodity. Our business development and strategy teams continue to assess the underlying
demand for our commodities as well as the new materials that could impact current renewable technology
solutions.
CLIMATE CHANGE RESPONSE KEY DRIVERS
Global Limit to Temperature Rise: It is expected that limiting the increase in global temperature will have an
impact on the demand of fossil fuel which will increase the rate at which decarbonise the global economy as
nations are increasingly coordinating efforts aimed at reducing greenhouse gas emissions, including IEA’s target
of net zero emissions by the end of 2050.
The Paris Agreement aims to hold the increase of global average temperatures to well below 2°C above
pre-industrial levels and to pursue efforts to limit temperature increase to l .5°C above pre-industrial levels.
Higher commodity prices and resource scarcity increase the likelihood of mineral portfolio concentration:
Widespread adoption of renewable energy sources as a means of decarbonising energy supply creates
signicant new demand for the current key enabling commodities, including copper, nickel, and cobalt. The
quantum of potential new demand is generally of a size that is large relative to the current annual production
and known dened global resources of that commodity.
Demand for the commodities we produce: Decarbonisation demand, population growth and industrialisation
of developing economies has an impact on commodity demand. The industrialisation and urbanisation of
developing economies over almost two decades has driven signicant growth in commodity demand. China’s
rapid growth over this period now means that it accounts for up to half of global demand for many commodities.
All potential decarbonisation pathways require signicantly more non-fossil fuel commodities.
OUR APPROACH TO CLIMATE RELATED OPPORTUNITIES
According to CNBC, “Copper prices are set to soar more than 75% over the next two years amid mining supply
disruptions and higher demand for the metal, fuelled by the push for renewable energy. This rise in demand
driven by the green energy transition and a likely decline in the U.S. dollar in the second half of 2024 will push
copper prices higher, according to a report by BMI, a Fitch Solutions research unit.
Additionally, at the recent COP28 climate change conference, more than 60 countries backed a plan to triple
global renewable energy capacity by 2030, a move that Citibank says, “would be extremely bullish for copper.”
In a December report, the investment bank forecast that the higher renewable energy targets would boost
copper demand by extra 4.2 million tons by 2030.This would potentially push copper prices to $15,000 a ton in
2025, the report added, way higher than the record peak of $10,730 per ton scaled in March last year.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
50
CLIMATE RELATED FINANCIAL DISCLOSURES (continued)
OUR APPROACH TO CLIMATE RELATED OPPORTUNITIES (continued)
ZCCM-IH has responded to the projected increase in renewable energy by are prioritising investment in metals
that support the low-carbon transition across its business, the Company is cognisant of the fact that these
commodities will need to be available in large amounts for the transition to progress. With the anticipated rise in
copper demand the cumulative copper decit by 2030 is expected to increase, illustrating the opportunity for
ZCCM-IH’s investment in copper.
For ZCCM-IH to benet from this anticipated opportunity the current level of mining sources and production
levels will signicantly need to increase, to take advantage of the expected increase in demand. The ZCCM-
IH’s 2023 - 2026 revised strategic plan recognises the opportunity in increasing its portfolio in low-cost transition
metals, hence providing resources that will increase the portfolio of these metals which is well positioned to
provide the commodities important to the decarbonisation of the global economy.
As the world shifts from fossil fuels to other sources of energy and governments and consumers continue to
embrace renewable energy, energy storage, electric vehicles and other decarbonising technologies, demand
for the rened metals that enable these transitions is expected to keep growing. It is anticipated that the energy
transition will be non-linear across time and geography. The global transition from fossil fuels to battery power
will require metals such as copper, nickel, cobalt, vanadium, and zinc.
At ZCCM-IH climate risk remediation refers to efforts and strategies aimed at mitigating or reducing the negative
impacts of climate-related challenges. This can involve various actions, such as implementing measures to
adapt to changing climate conditions, developing resilient infrastructure, promoting sustainable practices, and
fostering policies to minimize environmental risks. The goal is to enhance the ability of communities, ecosystems,
and economies to cope with and recover from the impacts of climate change.
During the 2023 Financial Year ZCCM-IH through its subsidiary, Misenge Environmental and Technical Services
(METS) continued to provide recurrent environmental services for its liability. The services included conducting
inspections and monitoring of the Overburden Dumps and the Uranium Tailings Engineered Disposal Cell on
the Copperbelt Province and disused Open Pits in Kabwe. The objective is to ensure that there is very little or
no soil erosion taking place from the facilities. METS offers services to companies under the ZCCM-IH Group to
ensure sustainable mining in its operations. METS proposes measures to mitigate the effects of soil erosion from
the facilities which otherwise may end up in receiving streams and deforestation in areas where exploration
or mining is taking place. ZCCM-IH through METS provides input on Environmental Management Plans in all
the environmental assessment reports that it prepares for and its subsidiaries. The input promotes sustainable
practices by subsidiaries such as:
1. Education and Awareness Programs: Raising awareness about climate change and its impacts, educating
communities on sustainable practices, and fostering a sense of responsibility towards the environment.
(Applicable to Kabundi Resources Limited for 2023).
2. Renewable Energy Adoption: Transitioning to renewable energy sources like solar, wind, and hydroelectric
power reduces dependence on fossil fuels, lowering greenhouse gas emissions and mitigating climate
change. Such as the commencement of the construction of the Captive Solar Power Project at Kariba
Minerals in Mapatizya, Southern Zambia in 2023.
These potential initiatives/opportunities range from renewable power purchases and on-site renewable
power generation, through to energy storage systems, operational efciency initiatives and electrication.
Our carbon abatement initiatives have also advanced and during the period 2023 to the end of 2026, our
planning includes partnering with stakeholders to set up at least one solar power plant to supply power to
one of our mines. Once this is successfully set up, we intend to execute a Joint Venture energy investment
vehicle with one of our stakeholders and to develop a large-scale renewable energy infrastructure to
service the Copperbelt mining and industrial sectors. This initiative addresses the non-reliability of power
supply in the Zambian copper belt area (power outage during dry seasons and costs) and reduces GHG
emissions which will progressively position the Zambian mining sector, not only as a government revenues
contributor, but also as sustainable source of energy.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
51
CLIMATE RELATED FINANCIAL DISCLOSURES (continued)
OUR APPROACH TO CLIMATE RELATED OPPORTUNITIES (continued)
3. Regulatory Compliance: Keep clients informed about evolving environmental regulations related to
climate change, ensuring they remain compliant and helping them navigate regulatory frameworks.
4. Afforestation and Reforestation: Planting trees and restoring forests can reduce carbon dioxide, enhance
biodiversity, and reduce the risks of extreme weather events.
5. Community-Based Adaptation Initiatives: Empowering local communities to develop and implement
adaptation strategies based on their specic vulnerabilities and needs.
In the period under review, ZCCM-IH’s contribution to climate change risk remediation through METS, was
through continuous monitoring of overburden dumps (mine waste) to manage erosional problems which if left
unattended can contribute to oods and stream or river sedimentation thereby impacting the quality of water
for downstream users.
Some of the major activities undertaken by METS during the year included the following:
i. Routine Radiation Surveillance of the Radiation Waste Storage Building (RWSB) and the Uranium Tailings
Engineered Disposal Cell (UTEDC) continued throughout the year. This is a statutory requirement by the
Radiation Protection Authority to ensure compliance.
ii. During the period under review, security surveillance at the Radioactive Waste Storage Building in Kalulushi
continued. ZCCM-IH installed three additional cameras in a bid to improve on technological security to
deter unauthorised personnel entry and eliminate threats to national and global security.
METS engaged the local contractor (SATCOM) sub-contracted by Golden Security Services (GSS) of South
America in charge of the security at the RWSB to ensure that the newly installed cameras were congured
to the existing system to operationalize them. However, the contractor indicated that the newly installed
cameras could not be congured to the existing system as they failed to meet the camera standard
specications of the Company. The contractor recommended that if it wished, ZCCM-IH could have its
own system to run the cameras.
SATCOM, conducted quarterly routine system checks and to carry out maintenance works., which
included:
The access control system which was had malfunctioned.
The camera at the gate which was not working due to problems with the radio link
The faulty alarm siren of the intrusion system
New locks were also installed at the entrance to the RWSB and at the small control building outside. A
new bre cable was also installed to enable visual connection of the CCTV cameras to the computer.
Experts from the United States Department of Energy’s Ofce of Radiological Security (ORS) visited the
Radioactive Waste Storage Building to conduct a sustainability assessment of the existing security systems
at the facility once the contract signed with the Radiation Protection Authority (RPA) expires in April 2024.
The team was accompanied by RPA and National Anti-Terrorism Committee ofcials.
The ORS reported that it had renewed the contract with Golden Security Services (GSS) to continue
providing security and maintenance services at the facility up to April 2024. They also indicated that there
will be need to upgrade the security system with new cameras to replace the existing ones. They also
promised to increase the number of cameras to improve security at the facility. In addition, they would
also like to improve security measures to restrict access into the building.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
52
CLIMATE RELATED FINANCIAL DISCLOSURES (continued)
OUR APPROACH TO CLIMATE RELATED OPPORTUNITIES (continued)
iii. Routine monitoring of environmental liabilities in Chingola (OB4, OB18, OB19, Mimbula Overburden
Dumps), Kitwe (OB53) on the Copperbelt Province and Kabwe (Open Pit No, 5 and 6) in Kabwe, Central
Province continued throughout the year.
Routine monitoring of environmental liabilities in Mufulira district on the Copperbelt Province were
discontinued in March 2020 following the transfer of TD8 and TD10 to the Ministry of Mines and Minerals
Development.
iv. Monitoring of children affected by lead poisoning continued through the Integrated Case Management
(ICM) activities in Kabwe. This included medical reviews and where necessary clinical assessment at
clinics in Makululu, Kasanda and Chowa Health Centres. Other activities involved home visitations and
environmental assessments at homes in the lead affected areas to investigate the causes of persistently
high lead levels in blood in some children.
v. Sampling of underground water efuent from the Ore Shaft at the former ZCCM Ltd Kabwe Mine to test for
statutory compliance in terms of water quality continued during the period under review. All parameters
were found to be in compliance to ZEMA industrial water efuent standards.
vi. Following the submission of the Resettlement Action Plan (RAP) implementation reports to ZEMA for
review and clearance in 2021, ZEMA expressed satisfaction with the implementation of the Kabundi RAP.
However, the Agency expressed concern on the two Project Affected Persons (PAPs) who were yet to be
resettled and compensated (one could not be identied, and the other one was sitting on state land).
ZEMA had directed that during the period under review, ZCCM-IH should ensure that the two PAPs were
compensated. ZCCM-IH made every effort, and one PAP was located and compensated while the other
one could still not be found despite the compensation package being ready. Records at the Provincial
Ministry of Lands ofces in Kabwe could not be found show the details of the remaining PAP.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
53
DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE PREPARATION
OF CONSOLIDATED AND SEPARATE ANNUAL FINANCIAL
STATEMENTS
The Companies Act, 2017 of Zambia requires the Directors to prepare the consolidated and separate annual
nancial statements for each nancial year that give a true and fair view of the state of affairs of the Group and
Company as at the end of the nancial year and of its nancial performance. It also requires the Directors to
ensure that the Group and Company keeps proper accounting records that disclose, with reasonable accuracy,
the nancial position of the Group and Company. They are also responsible for safeguarding the assets of the
Group and Company. The Directors are further required to ensure the Group and Company adheres to the
corporate governance principles or practices contained in Sections 82 to 122 of Part VII of the Companies Act,
2017 of Zambia.
The Directors accept responsibility for the consolidated and separate annual nancial statements, which have
been prepared using appropriate accounting policies supported by reasonable estimates, in conformity with
International Financial Reporting Standards (IFRS Accounting Standards) and its interpretations as issued by the
International Accounting Standards Board (IASB) and the requirements of the Companies Act, 2017 of Zambia.
The Directors further accept responsibility for the maintenance of accounting records that may be relied upon
in the preparation of consolidated and separate annual nancial statements, and for such internal controls as
the Directors determine necessary to enable the preparation of the consolidated and separate annual nancial
statements that are free from material misstatement whether due to fraud or error.
The Directors are of the opinion that the consolidated and separate annual nancial statements set out on
pages 61 to 197 give a true and fair view of the state of the nancial affairs of the Group and Company and of
its nancial performance in accordance with IFRS Accounting Standards and its interpretations as issued by the
IASB and the requirements of the Companies Act, 2017 of Zambia. The Directors further report that they have
implemented and further adhered to the corporate governance principles or practices contained in Sections
82 to 122 of Part VII of the Companies Act, 2017 of Zambia.
Nothing has come to the attention of the Directors to indicate that the Group and Company will not remain a
going concern for at least twelve months from the date of these annual nancial statements.
Signed on behalf of the Board of Directors,
_______________________________________ _______________________________
Mr Kakenenwa Muyangwa Ms Masitala N Mushinga
Director Director
Date:___________________2024
31
st
May
54
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ZCCM INVESTMENTS HOLDINGS PLC
Report on the Audit of the Financial Statements
Opinion
We have audited the consolidated and separate nancial statements of ZCCM Investments Holdings Plc ("the
Group and Company") set out on pages 61 to 197, which comprise the consolidated and company statements
of nancial position as at 31 December 2023, and the consolidated and company statements of prot or loss
and other comprehensive income, the consolidated and company statements of changes in equity and the
consolidated and company statements of cash ows for the period then ended, and the notes to the nancial
statements, including a summary of material accounting policies.
In our opinion, the accompanying consolidated and separate nancial statements give a true and fair view of
the consolidated and separate nancial position of ZCCM Investments Holdings Plc as at 31 December 2023,
and of its consolidated and separate nancial performance and consolidated and separate cash ows for the
period then ended in accordance with IFRS Accounting Standards as issued by the International Accounting
Standards Board (IFRS Accounting Standards) and in compliance with the requirements of the Companies Act
of Zambia and the Securities Act of Zambia.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the consolidated
and separate nancial statements section of our report. We are independent of the Group and Company in
accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code) together with the
ethical requirements that are relevant to our audit of the consolidated and separate nancial statements in
Zambia, and we have fullled our other ethical responsibilities in accordance with these requirements and the
IESBA Code. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a
basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most signicance in our audit
of the consolidated and separate nancial statements of the current period. These matters were addressed in
the context of our audit of the consolidated and separate nancial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
55
Valuation of investments in subsidiaries and associates
(Only applicable to the separate nancial statements).
Refer to note 4: use of estimates and judgement, note 22: investment in subsidiaries, note 23(c): investment in
associates and note 44(a)(ii) and note 44(a)(v)
Key audit matter How the matter was addressed in our audit
The Company recognises its investments in
subsidiaries and associates at Fair Value Through
Other Comprehensive Income (FVTOCI). As at 31
December 2023 these balances amounted to ZMW
282,384,000 and ZMW 11,240,080,000 respectively.
Management utilized a valuation expert to
determine the fair value of its investments.
Management exercises signicant judgement when
determining the valuation inputs utilized to value its
level 3 investments. The approach used can either
be the discounted cash ows, relative valuation
or net asset values depending on the industry, life
cycle and comparability of the investee’s business
to other similar listed companies.
Investments in subsidiaries and associates are
measured at fair value and are classied as either
level 1,2 or 3 in accordance with IFRS 13, Fair value
measurement based on the inputs used in the
valuation.
The key inputs and assumptions involving
signicant estimation judgement and having the
most signicant impact on the fair value of the
investments is the:
- Valuation technique used
- Weighted average cost of capital
- Market risk premium
- Earnings before Interest Tax Depreciation
Amortisation (EBITDA) projections
This was an area of focus and considered a key audit
matter due to the signicant complexity, estimation
and judgement applied by management in the
valuation of investments.
The following procedures were performed:
• We assessed the competence, independence and
experience of management’s expert by inspecting
their qualications and experience obtained in
performing valuations of a similar nature;
• We evaluated the reasonableness of the Earnings
before Interest Tax Depreciation Amortisation
(EBITDA) projections used in the computation by
comparing the values used to actual results;
• We evaluated the design and operating
effectiveness of relevant controls relating to
management’s review of the valuation expert’s fair
valuation report.
• With the assistance of our internal valuation
specialists:
• We challenged the approach employed by
management’s appointed expert, including
assessing the reasonableness of the weighted
average cost of capital, market risk premiums
assumptions used by comparing it to external data;
• We assessed comparability of companies used
were the multiples valuation technique was utilised
for reasonableness by evaluating whether industry,
risk proles were similar;
• We recalculated the fair value of investments in
subsidiaries and associated and compared it to
management’s valuation expert’s calculation;
• We assessed the adequacy of the disclosures in the
consolidated and separate nancial statements
related to the valuation of investments in
accordance with IFRS 13, Fair value measurement.
56
Provision for environmental rehabilitation
(Only applicable to the consolidated nancial statements).
Refer to note 37: Provisions for environmental rehabilitation and note 21 Assets classied as held for sale and
note 44(w)
Key audit matter How the matter was addressed in our audit
As at the reporting date, the Group had ZMW 3.4
billion as environmental provision made up of ZMW
3,263,137,000 included in Mopani Copper Mines
as part of liabilities directly associated with assets
classied as held for sale and ZMW 112,751,000 from
the other subsidiaries.
• The provision for environmental rehabilitation is
determined by an independent consultant based
on signicant assumptions and judgements in
determining the:
- costs of rehabilitation
- ination
- discount rate and
- the life of mine.
We considered this to be a key audit matter, given
the signicance of the liability to the consolidated
nancial statements and subjectivity in applying
procedures to evaluate audit evidence relating to
the signicant judgments made by management in its
selection of method and assumptions of calculating
the liability.
The following procedures were performed:
• We tested the design and operating effectiveness
of the relevant controls relating to management’s
review of the environmental rehabilitation provision.
• We evaluated the experience, qualication,
objectivity and independence of the independent
consultant engaged by management by
assessing their qualications, experience on similar
engagements and determining if they have any
interest with the Group.
• We assessed management's calculations
for compliance with the requirements of IAS
37-Provisions, Contingent Liabilities and Contingent
Assets with regards to decommissioning costs.
• We assessed the reasonableness of the ination
used in determining the future costs by comparing
to with external sources.
• We assessed the arithmetic accuracy of the
computation.
• We assessed whether the discount rate used was
comparable with the rate communicated by the
KPMG impairment review specialist (discount used
for the discounting of future cash inows).
• We compared the period used for discounting
the environmental provision with the life of mine
determined by management’s independent
consultant.
• We engaged our own internal environmental
rehabilitation specialist to assist us with the following:
i) Assessing the appropriateness of the costs of
rehabilitation used by comparing it with the mine
closure plan.
ii) Assessing whether the costs of rehabilitation were in
compliance with the Environmental Management
Plan (EMPs).
iii) Assessing whether the rates used in determining the
costs of rehabilitation were in accordance with the
Mines and Safety Department (MSD).
We assessed the adequacy of the disclosures in the
consolidated nancial statements in accordance with
the relevant IAS 37- Provisions, contingent liabilities
and contingent assets.
57
Valuation of nancial assets at fair value through prot loss and valuation of the royalty right interest
(applicable to both consolidated and separate nancial statements)
Refer to note 4: use of estimates and judgement, note 24: Financial assets at fair value through prot and
loss, note 19: intangible assets, note 44(d) and 44(g)
Key audit matter How the matter was addressed in our audit
The Group and Company recognises its investments
at Fair Value Through Prot or Loss (FVTPL) and Royalty
right as ZMW 3,019,500,000 and ZMW 14,259,000,000
respectively
Management utilized a valuation expert to determine
the fair value of its investments.
Management exercises signicant judgement when
determining the valuation inputs utilized to value its
level 3 investments . The approach used can either
be the discounted cash ows, relative valuation or
net asset values depending on the industry, life cycle
and comparability of the investee’s business to other
similar listed companies.
The investments in nancial assets and royalty right
are measured at fair value and are classied as
either level 1, 2 or 3 in accordance with IFRS 13, Fair
Value Measurement based on the inputs used in the
valuation.
The key inputs and assumptions involving signicant
estimation judgement and having the most signicant
impact on the fair value of the investments is the:
- Valuation technique used
- Weighted average cost of capital
- Market risk premium
- Earnings before Interest Tax Depreciation Amortisation
(EBITDA) projections
This was an area of focus and considered a key audit
matter due to the signicant complexity, estimation
and judgement applied by management in the
valuation of investments.
The following procedures were performed:
• We assessed the competence, independence
and experience of management’s expert by
inspecting their qualications and experience
obtained in performing valuations of a similar
nature;
• We evaluated the reasonableness of the Earnings
before Interest Tax Depreciation Amortisation
(EBITDA) projections used in the computation by
comparing the values used to actual results;
• We evaluated the design and operating
effectiveness of relevant controls relating to
management’s review of the valuation expert’s
fair valuation report.
• We checked the arithmetic accuracy of the data
used in the valuation calculations.
• With the assistance of our internal valuation
specialists:
i) We challenged the approach employed by
management’s appointed expert, including
assessing the reasonableness of the weighted
average cost of capital, market risk premiums
assumptions used by comparing it to external
data;
ii) We assessed comparability of companies used
were the multiples valuation technique was utilised
for reasonableness by evaluating whether industry,
risk proles were similar;
iii) We recalculated the fair value of investments in
nancial assets and royalty right and compared it
to management’s valuation expert’s calculation;
• We assessed the adequacy of the disclosures in the
consolidated and separate nancial statements
related to the Valuation of investments in
accordance with IFRS 13, Fair value measurement.
Emphasis of matter - comparative information
We draw attention to Note 45 to the consolidated and separate nancial statements which indicates that the
comparative information presented as at and for the year ended 31 December 2023 has been restated. Our
opinion is not modied in respect of this matter.
Other matter relating to comparative information
The consolidated and separate nancial statements of the Group and Company as at and for the year ended
31 December 2022, excluding the adjustments described in note 45 to the consolidated and separate nancial
58
statements were audited by another auditor who expressed an unmodied opinion on those consolidated and
separate nancial statements on 8 September 2023.
As part of our audit of the consolidated and separate nancial statements as at and for the year then ended 31
December 2023, we audited the adjustments described in note 45 that were applied to restate the comparative
information presented as at and for the year ended 31 December 2022.
We were not engaged to audit, review, or apply any procedures to the consolidated and separate nancial
statements for the comparative nancial statements for the year ended 31 December 2022 other than with
respect to the adjustments described in note 45 to the consolidated and separate nancial statements.
Accordingly, we do not express an opinion or any other form of assurance on those respective nancial
statements taken as a whole. However, in our opinion, the adjustments described in note 45 are appropriate
and have been properly applied.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the document titled “ZCCM Investments Holdings Plc Integrated Annual Report for the year ended
31 December 2023” which includes the Report of the directors and Directors’ responsibilities and approval
as required by the Companies Act of Zambia. The other information does not include the consolidated and
separate nancial statements and our auditor's report thereon.
Our opinion on the consolidated and separate nancial statements does not cover the other information and
we do not express an audit opinion or any form of assurance conclusion thereon.
In connection with our audit of the consolidated and separate nancial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated and separate nancial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the directors for the consolidated and separate nancial statements
The directors are responsible for the preparation of consolidated and separate nancial statements that give
a true and fair view in accordance with IFRS Accounting Standards as issued by the International Accounting
Standards Board (IFRS Accounting Standards) and in compliance with the requirements of the Companies Act
of Zambia and the Securities Act of Zambia, and for such internal control as the directors determine is necessary
to enable the preparation of consolidated and separate nancial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated and separate nancial statements, the directors are responsible for assessing the
group's and company's ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to liquidate
the group and/or company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the consolidated and separate nancial statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate nancial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to inuence the economic decisions of users taken on the basis of these
consolidated and separate nancial statements.
59
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated and separate nancial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufcient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the group's and company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast signicant doubt on the Group and Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated and separate nancial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor's report. However, future events or conditions may cause the group and/or company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate nancial
statements, including the disclosures, and whether the consolidated and separate nancial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufcient appropriate audit evidence regarding the nancial information of the entities or business
activities within the group to express an opinion on the consolidated nancial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our
audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and signicant audit ndings, including any signicant deciencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most signicance
in the audit of the consolidated and separate nancial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benets of such communication.
60
Report on other legal and regulatory requirements
Companies Act of Zambia
In accordance with Section 259 (3) (a) of the Companies Act of Zambia (the Act), we consider and report that:
• there is no relationship, interest or debt we have with the Company; and
• there were no serious breaches of corporate governance principles or practices by the directors. This
statement is made on the basis of the corporate governance provisions of the Act, Part VII – Corporate
Governance of the Companies Act of Zambia.
Securities Act of Zambia
In accordance with Rule 18 of the Securities (Accounting and Financial Reporting Requirements) Rules (SEC
Rules), Statutory Instrument No.163 of 1993, we consider and report that:
• The consolidated and separate statement of nancial position and consolidated and separate statement
of prot or loss and other comprehensive income were in agreement with the Company’s accounting
records; and
• We have obtained all the information and explanations which, to the best of our knowledge and belief,
were necessary for the purposes of our audit.
KPMG Chartered Accountants 7 June 2024
Jason Kazilimani, Jr AUD/F000336
Partner signing on behalf of the rm
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
61
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
31 December
2023
31 December
2022
Note ZMW’000 ZMW’000
Assets
Property, plant and equipment 17 248,857 12,484,907
Exploration and evaluation asset 18 51,437 51,437
Intangible assets 19 14,393,945 3,148,325
Investment property 20 208,598 200,751
Investment in associates 23 10,090,940 15,174,862
Financial assets at fair value through prot or loss 24 3,019,500 1,252,400
Trade and other receivables 26 1,628,837 2,931,539
Environmental Protection Fund 27 7,060 94,433
Deferred tax asset 35 - 122,852
Total non-current assets 29,649,174 35,461,506
Inventories 25 38,299 4,921,366
Trade and other receivables 26 339,169 762,831
Term deposit 28 4,450,451 5,340,202
Cash and cash equivalents 29 360,356 329,173
Assets classied as held for sale 21(ii) 23,626,388 2,103,761
Total current assets 28,814,663 13,457,333
Total assets 58,463,837 48,918,839
Equity
Share capital 32(i) 1,608 1,608
Share premium 32(iii) 2,089,343 2,089,343
Other reserves 8,861,258 17,800,836
Accumulated losses (16,468,059 ) (11,936,251 )
Equity attributable to shareholders (5,515,850 ) 7,955,536
Non-controlling interest (174,784 ) (46,729 )
Total equity (5,690,634 ) 7,908,807
Liabilities
Borrowings 34 - 27,476,859
Deferred tax liability 35 751,833 -
Retirement benets 36 17,381 182,940
Provisions for environmental rehabilitation 37 112,751 1,221,068
Total non-current liabilities 881,965 28,880,867
Borrowings 34 - 864,411
Overdraft 29 - 688,120
Trade and other payables 30 312,756 7,451,177
Provisions 31 44,243 487,689
Current income tax liabilities 14 238,553 190,143
Retirement benets 36 - 139,131
Liabilities directly associated with assets classied as held for sale 21(ii) 62,676,954 2,308,494
Total current liabilities 63,272,506 12,129,165
Total liabilities 64,154,471 41,010,032
Total equity and liabilities 58,463,837 48,918,839
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements.
The consolidated nancial statements were approved and authorised for issue by the Board of Directors on
31 May 2024 and signed on its behalf by:
………………………........……. ……………………….......…
Mr Kakenenwa Muyangwa Ms Masitala N Mushinga
Director Director
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
62
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
31 December
2023
31 December
2022
Assets
Note
ZMW’000 ZMW’000
Property, plant and equipment 17 110,624 90,471
Intangible assets 19 14,260,690 3,377
Investment property 20 208,598 200,751
Investments in subsidiaries 22 282,384 405,051
Investment in associates 23 11,240,080 16,256,411
Financial assets at fair value through prot or loss 24 3,019,500 1,252,400
Trade and other receivables 26 4,586,471 958,162
Deferred income tax asset 35 - 258,966
Total non-current assets 33,708,347 19,425,589
Inventories 25 - 16,427
Trade and other receivables 26 288,268 173,829
Term deposits 28 4,411,330 5,340,202
Cash and cash equivalents 29 61,137 45,586
4,760,735 5,576,044
Assets classied as held for sale 21 - 145,700
Total current assets 4,760,735 5,721,744
Total assets 38,469,082 25,147,333
Equity
Share capital 32(i) 1,608 1,608
Share premium 32(iii) 2,089,343 2,089,343
Other reserves 23,821,722 15,191,294
Retained earnings 11,509,346 7,397,607
Equity attributable to shareholders 37,422,019 24,679,852
Liabilities
Deferred income tax liability 35 618,059 -
Retirement benet obligations 36 17,381 9,275
Provisions for environmental rehabilitation 37 54,498 39,357
Non-current liabilities 689,938 48,632
Trade and other payables 30 78,288 121,005
Provisions 31 41,461 108,686
Current income tax liabilities 14 237,376 189,158
Current liabilities 357,125 418,849
Total liabilities 1,047,063 467,481
Total equity and liabilities 38,469,082 25,147,333
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements.
The Company nancial statements were approved and authorised for issue by the Board of Directors on
31 May 2024 and signed on its behalf by:
……………………………........ ……………….........………
Mr Kakenenwa Muyangwa Ms Masitala N Mushinga
Director Director
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
63
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 31 DECEMBER 2023
31 December
2023
31 December
2022
Restated*
Note ZMW’000 ZMW’000
Continuing operations
Revenue from contracts with customers* 7 11,747,105 11,920,429
Cost of sales* 11 (15,306,333 ) (14,670,351 )
Gross loss (3,559,228 ) (2,749,922 )
Net investment income 8 1,388,863 47,893
Other income* 9 243,727 175,747
Fair value adjustment on nancial assets at fair value through prot or
loss
24
Net impairment losses on nancial assets* 10 (80,165 ) (2,331 )
Administration expenses* 11 (1,865,261 ) (580,348 )
Operating loss (2,104,964 ) (3,314,561 )
Finance income 13 2,212,694 452,441
Finance costs* 13 (4,480,532 ) (2,259,534 )
Net nance costs 13 (2,267,838 ) (1,807,093 )
Share of prot of equity-accounted investees, net of tax 23(a) 2,261,209 1,603,143
Loss before income tax (2,111,593 ) (3,518,511 )
Income tax expense* 14 (1,206,049 ) (248,019 )
Loss for the year from continuous operations (3,317,642 ) (3,766,530 )
Loss from discontinued operations 21(iii) (758,181 ) (19,003 )
Prot for the year (4,075,823 ) (3,785,533 )
Other comprehensive income
Items that will never be reclassied to prot or loss
Revaluation surplus on transfer of property, plant and equipment 17 3,794 12,480
Deferred income tax on revaluation reserve 35 221 (3,746 )
Remeasurements of post-employment benet obligations 36 24,134 204,217
Deferred income tax on remeasurements of post-employment benet
obligations
35
Equity-accounted investees- share of other comprehensive income 23 11,529 11,123
Fair value change on royalty right 19 3,586,824 -
Items that are or may be reclassied to prot or loss
Foreign currency translation differences - equity - accounted investees 23(a) 3,907,834 1,361,754
Foreign currency translation differences- subsidiaries 33 (16,437,514 ) (2,615,140 )
(12,529,680 ) (1,253,386 )
Other comprehensive income, net of tax (8,900,234 ) (1,029,340 )
Total comprehensive income (12,976,057 ) (4,814,873 )
Loss attributable to:
Owners of the Company (3,847,544 ) (3,759,520 )
Non-controlling interests 22(c) (228,279 ) (26,013 )
(4,075,823 ) (3,785,533 )
Total comprehensive income attributable to:
Owners of the Company (12,747,778 ) (4,788,860 )
Non-controlling interests 22(c) (228,279 ) (26,013 )
(12,976,057 ) (4,814,873 )
Earnings per share
Basic and diluted earnings per share (ZMW) 15 (25.35 ) (23.54 )
Earnings per share- continuing operations
Basic and diluted earnings per share (ZMW) 15 (20.63 ) (23.42 )
Earnings per share- discontinuing operations
Basic and diluted earnings per share (ZMW) 15 (4.72 ) (0.12 )
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements.
*The amounts were restated as a result of a prior period error. Refer to note 45 for impact on restatement.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
64
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
31 December
2023
31 December
2022
Note
ZMW’000 ZMW’000
Investment income 8 2,128,699 4,916,309
Revenue from contracts with customers 7 23,180 778
Cost of sales related to revenue from contracts with customer 11 (16,878) (2,130)
Other income 9 42,300 88,203
Fair value adjustment on nancial asset at fair value through prot
or loss 24 1,767,100 (205,600)
Net impairment losses on nancial assets 10 (83,055) (543)
Administration expenses 11 (794,148) (742,731)
Operating prot 3,067,198 4,054,286
Finance income 13 2,980,430 446,047
Finance costs 13 (1,115) (5,284)
Net nance income 13 2,979,315 440,763
Prot before tax 6,046,513 4,495,049
Income tax expense 14 (1,205,034) (236,321)
Prot for the year 4,841,479 4,258,728
Other comprehensive income
Items that will never be reclassied to prot or loss
Revaluation surplus on property, plant and equipment 17 - 12,480
Deferred income tax on revaluation reserve 35 221 (3,746)
Remeasurements of post-employment benet obligations 36 (9,813) 94
Deferred income tax on remeasurements of post-employment
benet obligations 35 2,944 (28)
Fair value change in investments in subsidiaries 21/22 (464,207) 112,033
Fair value change in investments in associates 23 5,508,327 (4,346,678)
Fair value change on royalty right 19 3,586,824 -
Other comprehensive income, net of tax 8,624,296 (4,225,845)
Total comprehensive income 13,465,775 32,883
Earnings per share
Basic and diluted earnings per share (ZMW) 30.11 26.48
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
65
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
Other reserves
ZMW’000 Note
Share
capital
Share
premium
Revaluation
reserve
Translation/
fair value
reserve
Non-
controlling
interests
Retained
earnings Total
Balance at 1 January 2022 1,608 2,089,343 269,964 18,775,524 (20,716 ) (8,306,818 ) 12,808,905
Loss for the year - - - - (26,013 ) (3,759,520 ) (3,785,533 )
Other comprehensive income
Currency translation – equity accounted investees 23(a) - - - 1,361,754 - - 1,361,754
Currency translation of foreign denominated subsidiaries 33(ii) - - - (2,615,140 ) - - (2,615,140 )
Revaluation surplus on property plant and equipment - - 12,480 - - - 12,480
Deferred tax on revaluation reserve - - (3,746 ) - - - (3,746 )
Remeasurements of post-employment benet obligations 36 - - - - - 204,217 204,217
Share of associates other comprehensive income 23(a) - - - - - 11,123 11,123
Deferred tax on remeasurements of post-employment benet obligations 35 - - - - - (28 ) (28 )
Total comprehensive income - - 8,734 (1,253,386 ) (26,013 ) (3,544,208 ) (4,814,873 )
Transaction with owners of the Company – Distributions
Dividends - - - - - (85,225 ) (85,225 )
Balance at 31 December 2022 1,608 2,089,343 278,698 17,522,138 (46,729 ) (11,936,251 ) 7,908,807
Balance at 1 January 2023 1,608 2,089,343 278,698 17,522,138 (46,729 ) (11,936,251 ) 7,908,807
Loss for the year - - - - (228,279 ) (3,847,544 ) (4,075,823 )
Other comprehensive income
Currency translation – equity accounted investees 23(a) - - - 3,907,834 - - 3,907,834
Currency translation of foreign denominated subsidiaries 33(ii) - - - (16,437,514 ) - - (16,437,514 )
Revaluation surplus - - 3,794 - - - 3,794
Transfer of excess depreciation (737 ) 737 -
Deferred tax on transfer of excess depreciation 35 - - 221 - - - 221
Fair value change on royalty right 19 - - - 3,586,824 - - 3,586,824
Remeasurements of post-employment benet obligations 36 - - - - - 24,134 24,134
Share of associates other comprehensive income 23(a) - - - - - 11,529 11,529
Deferred tax on remeasurements of post-employment benet obligations 35 - - - - - 2,944 2,944
Total comprehensive income - - 3,278 (8,942,856 ) (228,279 ) (3,808,200 ) (12,976,057 )
Transaction with owners of the Company – Distributions
Dividends - - - - - (723,608 ) (723,608 )
Derecognition 22(c) - - - - 733 - 733
Equity funding 22(c) - - - - 99,491 - 99,491
Balance at 31 December 2023 1,608 2,089,343 281,976 8,579,282 (174,784 ) (16,468,059 ) (5,590,634)
Retained earnings are the brought forward recognised income, net of expenses, of the Group plus current period prot or loss attributable to shareholders.
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
66
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
Other Reserves
Note Share
capital
Share
Premium
Revaluation
reserve
Fair value
reserve
Retained
earnings
Total
ZMW’000 ZMW’000 ZMW’000 ZMW’000 ZMW’000 ZMW’000
Balance at 1 January 2022 1,608 2,089,343 20,750 19,396,455 3,224,038 24,732,194
Prot for the year - - - - 4,258,728 4,258,728
Other comprehensive income
Revaluation surplus on property plant and equipment - - 12,480 - - 12,480
Deferred income tax on revaluation surplus 35 - - (3,746) - - (3,746)
Change in fair value of investments in subsidiaries 21/22 - - - 112,033 - 112,033
Change in fair value of investments in associates 23 - - - (4,346,678) - (4,346,678)
Remeasurements of post-employment benet obligations 36 - - - - 94 94
Deferred income tax on remeasurements of post-employment benet obligations - - -
-
(28) (28)
Total comprehensive income - - 8,734 (4,234,645) 4,258,794 32,883
Transactions with owners of the Company – distributions
Dividends - - - - (85,225) (85,225)
Balance at 31 December 2022 1,608 2,089,343 29,484 15,161,810 7,397,607 24,679,852
Balance at 1 January 2023 1,608 2,089,343 29,484 15,161,810 7,397,607 24,679,852
Prot for the year - - - - 4,841,479 4,841,479
Other comprehensive income
Transfer of excess depreciation - - (737) - 737 -
Deferred tax on transfer of excess depreciation 35 - - 221 - - 221
Change in fair value of investments in subsidiaries 21/22 - - - (464,207) - (464,207)
Change in fair value of investments in associates 23 - - - 5,508,327 - 5,508,327
Remeasurements of post-employment benet obligations 36 - - - - (9,813) (9,813)
Fair value change on royalty right
19 - - - 3,586,824 - 3,586,824
Deferred income tax on remeasurements of post-employment benet obligations - - - - 2,944 2,944
Total comprehensive income - - (516) 8,630,944 4,835,347 13,465,775
Transactions with owners of the Company – distributions
Dividends - - - - (723,608) (723,608)
Balance at 31 December 2023 1,608 2,089,343 28,968 23,792,754 11,509,346 37,422,019
Retained earnings are the carried forward recognised income, net of expenses, of the Company plus current period prot or loss attributable to shareholders.
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
67
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023
Notes
31 December
2023
ZMW’000
31 December
2022
ZMW’000
Cash ows from operating activities
Loss before tax continuous operations (2,111,593 ) (3,536,029 )
Loss before tax discontinued operations 21(iii) (758,181 ) -
Adjustments for:
Depreciation 17,18 1,783,108 1,769,302
Amortisation of intangible assets 19 389,366 66,813
Prot/(loss) on disposal of property, plant and equipment 9 (233 ) 22
Interest income from related parties and term deposits 8,13 (211,452 ) (351,898 )
Interest expense 34 4,037,815 1,523,989
Impairment of property, plant and equipment 17 44 339
Net impairment losses on nancial assets 10 80,165 -
Derecognition of subsidiaries net liabilities 22(d) (19,366 ) (3,995 )
Change in fair value on nancial assets at fair value through prot or loss 24 (1,767,100 ) 205,600
Fair value change on investment property 20 (22,521 ) (8,465 )
Dened benets (expense) /credit 36 36,853 168,173
Provision for environmental rehabilitation charged to income statement 37 39,822 -
Other provisions charged to income statement 31 (67,015 ) -
Share of prot of equity – accounted investees, net of tax 23 (2,261,209 ) (1,603,143 )
Unrealised foreign currency gain (4,271 ) 39,851
(855,768 ) (1,729,441 )
Change in:
Inventories 1,393,938 (269,480 )
Trade and other receivables (98,657 ) 1,128,978
Trade and other payables (414,818 ) 2,227,309
Assets and liabilities held for sale 1,008,129 59,245
Environmental Protection Fund (17,322 ) (20,977 )
Cash generated from operating activities 1,015,502 1,395,634
Interest paid 34 - (14 )
Tax paid 14 (279,789 ) (46,217 )
Retirement benets paid 36 (11,078 ) (7,340 )
Dividends paid (808,362 ) (85,225 )
Net cash from operating activities (83,727 ) 1,256,838
Cash ows from investing activities
Interest received 8,13 198,637 253,191
Dividend received 23 739,836 4,868,317
Acquisition of property and equipment 17 (754,113 ) (1,338,234 )
Acquisition of intangible assets 19 (221 ) (2,804 )
Proceeds on disposal of property, plant and equipment 233 3,069
Acquisition of investment property 20 - (59 )
Acquisition of investments in associates 23(c) (540,849 ) -
Cash from asset write off - (3 )
Investments in exploration and evaluation asset 18 - (3,794 )
Proceeds from term deposits 28 5,340,202 653,742
Investments in term deposits 28 (4,450,451 ) (5,340,202 )
Net cash generated from (used in) investing activities 533,274 (906,777 )
Cash ows from nancing activities
Minority equity nance 22 99,491 -
Proceeds from borrowings 34 128,733 -
Repayment of borrowings 34 (436,036 ) (698,833 )
Net cash used in nancing activities (207,812 ) (698,833 )
Net increase/(decrease) in cash and cash equivalents 241,735 (348,772 )
Effects of translation of cash and cash equivalents (281,464 ) (28,538 )
Effect of movement in exchange rates on cash held 4,271 (39,851 )
Cash and cash equivalents at 1 January (81,060 ) 336,101
Cash and cash equivalents at 31 December 29 (116,518 ) (81,060 )
Included in the statement of nancial position 360,356 (358,947 )
Included in assets held for sale 21 (476,874 ) 277,887
Cash and cash equivalent at 31 December (116,518 ) (81,060 )
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
68
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023
Note
31 December
2023
ZMW’000
31 December
2022
ZMW’000
Cash ows from operating activities
Prot before tax 6,046,513 4,495,049
Adjustments for:
Depreciation 17 11,276 12,005
Amortisation of intangible assets 19 365,658 1,816
Prot/(loss) on disposal of property, plant and equipment 9 (233) 22
Fair value changes of nancial assets at fair value through prot or loss 24 (1,767,100) 205,600
Impairment of investments in subsidiaries 21(a)/22 - 418,821
Net impairment losses on nancial assets 10 83,055 -
Dened benets expense 36 2,619 3,154
Fair value change on investment property 20 (22,521) (8,465)
Interest expense 34 - 14
Interest receivable on loan and held to maturity investments 13,8 (434,433) (145,334)
Dividend receivable 8 (739,836) -
Royalty receivable 8 (1,201,395) -
Provision for environmental rehabilitation charged to the income statement 37 15,141 -
Other provisions charged to income statement 31 (67,225) -
Unrealised foreign currency gain (4,271) 39,851
2,287,248 5,022,533
Change in:
Inventory 16,427 5,607
Trade and other receivables (3,440,758) (158,962)
Trade and other payables 42,037 4,122
Assets held for sale
- (12,244)
Provision
- 79,158
Provision for environmental rehabilitation - (40,574)
Cash generated from operating activities (1,095,046) 4,899,640
Interest paid - (14)
Tax paid 14 (276,626) (44,030)
Dividends received 801,139 -
Dividends paid (808,362) (85,225)
Royalty received 1,014,511 -
Retirement benet paid 36 (4,326) (4,041)
Net cash (used in)/generated from operating activities (368,710) 4,766,330
Cash ows from investing activities
Interest received 13,8 198,637 46,627
Acquisition of property, plant and equipment 17
(16,755) (13,370)
Acquisition of intangible assets 19
(147) (2,656)
Acquisition of investment property 20
- (59)
Proceeds on disposal of property, plant and equipment
233 1,791
Proceeds from term deposits 28 5,340,202 632,992
Acquisition of investments in subsidiaries 22 (190,001) (86,379)
Acquisition of investments in associates 23 (540,849) -
Investments in term deposits 28 (4,411,330) (5,340,202)
Net cash ows generated from/(used in) investing activities 379,990 (4,761,256)
Cash ows from nancing activities
Repayment of borrowings 34 - (1,135)
Net cash used in nancing activities - (1,135)
Increase in cash and cash equivalents
11,280 3,939
Effect of movement in exchange rates on cash held 4,271 (39,851)
Cash and cash equivalents at 1 January 45,586 81,498
Cash and cash equivalents at 31 December 29 61,137 45,586
The notes on pages 69 to 197 are an integral part of these consolidated and separate nancial statements
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
69
NOTES TO THE FINANCIAL STATEMENTS
in thousands of Kwacha
1 Reporting entity
registered office is at Stand No. 16806, Alick Nkhata Road, Mass Media Complex Area, P.O Box 30048,
investments in associates (together referred to as the ‘Group’). The principal activity of the Company is
to manage the Zambian Government’s stake in the mining sector, as the Zambian Government through
the Industrial Development Corporation
The Company’s shares are listed on the Lusaka Securities Exchange (LuSE), the London Stock Exchange
and Euronext.
2 Basis of preparation
The consolidated annual financial statements are prepared in compliance with International Financial
Reporting Standards (“IFRS Accounting Standards”) and its interpretations as issued by the International
Accounting Standards Board (“IASB®”). The measurement basis applied is the historical cost basis, except
where otherwise stated in the accounting policies below. The Consolidated annual financial statements
are presented in Zambian Kwacha (ZMW), rounded to the nearest thousand. In accordance with the
Companies Act, 2017 of Zambia, the annual financial statements for the year ended 31 December 2023
have been approved for issue by the Directors. Reference to “annual financial statements” in this report
refers to the Consolidated annual financial statements.
The preparation of consolidated annual financial statements in conformity with IFRS Accounting Standards
requires the use of estimates and assumptions. It also requires the Directors to exercise judgement in the
process of applying the Group’s accounting policies. The areas involving higher degree of judgement
or complexity, or where assumptions and estimates are significant to the Consolidated annual financial
statements are disclosed in Note 4.
3 Functional and presentation currency
These consolidated and Company annual financial statements are presented in Zambian Kwacha. The
functional currency for the Company is Zambian Kwacha. All amounts presented in Kwacha have been
rounded to the nearest thousand, unless otherwise indicated.
Several of the Company’s equity investments prepare financial statements in US Dollars, which is their
functional currency, due to the nature of the industry in which they operate. This has resulted in a foreign
currency translation reserve at the consolidated level. More detail is included in notes 22 and 23.
4 Use of estimates and judgements
In preparing these financial statements, management has made judgements, estimates and assumptions
that affect the application of the Group’s and Company’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) Judgements
Information about judgements made in applying accounting policies that have the most significant
effects on the amounts recognised in the consolidated and separate financial statements are
included in:
■ Note 17 – impairment of property, plant and equipment.
In assessing impairment of property plant, management estimates the recoverable amount
of each asset or cash generating unit based on expected future cash flows and uses an
interest rate to discount them. Estimation uncertainty relates to assumptions about future
operating results and the determination of a suitable discount rate.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
70
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
4 Use of estimates and judgements (continued)
(a) Judgements (continued)
Going Concern Assumption
These financial statements have been prepared on a going concern basis.
During the year ended 31 December 2023, the Group made a loss after tax of ZMW4.08
billion (2022: ZMW3.79 billion). As of 31 December 2023, the Group had accumulated loss of
ZMW16.5 billion (2022: ZMW11.94 billion).
Furthermore, Mopani Copper Mines Plc, the group’s most significant subsidiary has material
uncertainty on going concern on account of operating losses and the need for funding to
meet working capital and core capital requirements. In addition, the majority of the Group’s
non-current liabilities relate to borrowings of Mopani. The loan is guaranteed by ZCCM-IH
and in the event that Mopani fails to pay back the loan, ZCCM-IH would be required to fulfil
the loan obligations.
These events or conditions indicate that a material uncertainty exists that may cast significant
doubt on 4the Group’s ability to continue as a going concern.
The Directors consider the going concern basis of preparation to be appropriate based on
the mitigating factors below:
Mitigating factors
■ Management’s recent change of shareholder agreements in 2022 with certain
investee companies i.e., Kansanshi Mining PLC, from dividend model to royalty
model. This agreement is expected to result into more cashflows for the Group, at
an annual average receipts of ZMW772 million (US$30 million), spanning over a 25
years estimated life of mine from 2021. Royalty income amounting to ZMW1.2 billion
(US$58.5 million) was receivable for the year ended 2023.
■ The management and Board of ZCCM-IH have been working with a team of
consultants, Rothschild & Co., South Africa (Pty) Ltd (“Rothschild & Co.”) to assist
ZCCM-IH with the strategic review of Mopani Copper Mines Plc (“MCM” or “Mopani”)
to ensure its sustainability and continued development. Subsequent, to the financial
year end of 31 December 2023 . ZCCM-IH secured the engagement of a strategic
equity partner (IRH/Delta) who has acquired 51% of Mopani’s shareholding.
■ IRH / Delta have committed to invest a total of US$1.1 billion into Mopani Copper
Mines Plc (“MCM” or “Mopani”) as a Strategic Equity Partner (the “Transaction”).
Consequently, the relationship between Glencore International AG (“Glencore”)
and MCM is expected to be restructured. The ZCCM-IH guarantee on this loan will
also be restructured. Refer to note 42: subsequent Events for details.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
71
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
4 Use of estimates and judgements (continued)
(a) Judgements (continued)
Going Concern Assumption (continued)
■ IRH to invest a total of US$1.1 billion into MCM to fund MCM’s Project Development Plan
(“PDP”), provide working capital and restructure certain existing Glencore liabilities as set
out below:
- US$620 million will be provided in the form of new equity capital in return for a 51%
stake in MCM, which will be used for MCM’s capital projects, and to stabilise the
working capital position of the business;
- US$300 million will be provided as a Shareholder Loan to MCM, that will be used to
fully settle the Glencore Transaction Debt of US$1.5 billion plus interest;
- Glencore’s existing debt will be written down to zero and its offtake agreement
with MCM will be terminated;
- Further capital will be made available to MCM as shareholder loans, if required,
based on the future working capital requirements of the business.
- IRH will provide up to US$220 million in interim funding. This funding will be available to
MCM prior to the Transaction Closing, to ensure that the business has sufficient
liquidity until Transaction Close. The interim funding will form part of the US$620
million new equity investment.
- ZCCM-IH will retain a 49% equity stake in MCM at Closing of the Transaction.
- As at 21 March 2024, IRH had provided MCM with US$220 million in equity funding.
` The Directors have therefore formed a judgement that the Going concern assumptions
remains applicable to the Group and Company for at least 12 months from the signing
date of the financial statements. This basis assumes that the funds will be available to
finance future operations, and that the realisation of the assets and settlement of liabilities,
contingent obligations and commitments will occur in the ordinary course if the business.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
72
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
4 Use of estimates and judgements (continued)
(a) Judgements (continued)
Note 17 – impairment of property, plant, and equipment.
In assessing impairment of property plant, management estimates the recoverable amount of
each asset or cash generating unit based on expected future cash flows and uses an interest rate
to discount them. Estimation uncertainty relates to assumptions about future operating results and
the determination of a suitable discount rate.
Note 21 – Assets held for sale.
Management has continued to classify Investrust Bank Plc as an entity held for sale despite the
sale not happening within 12 months from the date they were classified as held for sale in 2020. The
Board is committed to divest from this investment and actively searching for buyers. Subsequent
to the year end, the Bank of Zambia took possession of Investrust Bank Plc which was necessitated
by its insolvency.
During the financial year, ZCCM-IH was focused on securing a strategic equity partner (SEP) for
Mopani Copper Mine Plc (Mopani) to finance the completion of expansion projects and boost
operational efficiency. In 2024 financial year, ZCCM-IH successfully secured Delta Mining Limited
(Delta) as the strategic equity partner. This new partnership resulted in Delta acquiring new shares
in Mopani, which diluted ZCCM-HI’s stake from 100% to 49%. Reduction in ownership interest in
Mopani has necessitated a reclassification of Mopani’s assets and liabilities as Held for Sale and are
separately presented in the consolidated financial statements in accordance with International
Financial Reporting Standard 5: Held for Sale.
Note 22, 23 and 24 – Determining the fair values of investment in subsidiaries, associates, royalty
right and financial assets at fair value through profit or loss on the basis of significant unobservable
inputs.
Valuation of the Group and Company’s unquoted investments is an area of judgement which
involves the use significant estimates and assumptions. Management uses various valuation
techniques when determining the fair values of unquoted investee companies whose outcome is
dependent on several significant unobservable inputs and assumptions as disclosed under Note
19, 22, 23 and 24.
Note 44 (a) iv – consolidation: whether the Company has significant influence over an investee or
de facto control over an investee.
Management has reassessed its involvement in Rembrandt Properties Limited (49%) in accordance
with IFRS 10’s control definition and guidance. It has concluded it has significant influence but not
outright control. In making its judgement, management considered the following:
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
73
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
4 Use of estimates and judgements (continued)
(a) Judgements (continued)
Note 44 (a) v – consolidation: whether the Company has significant influence over an investee or de facto
control over an investee.(continued)
■ Company’s voting rights – the Company’s voting rights are limited to 49% and 45% respectively
but in relation to the dispersion of the voting rights held by other shareholders the Company has a
significant right; and
■ Relative size – in relation to the extent of recent participation by those shareholders in general
meetings, the Company is deemed to have significant influence over the investees.
■ Further, management has reassessed its involvement in Central African Company Limited (49%)
in accordance with IFRS 10’s control definition and guidance. It has concluded it has de facto
control in the Company. In making its judgement, management considered the following:
■ ZCCM-IH’s representation on the board of the investee Company
■ Appointment of key management staff
■ Number of voting rights.
■ Following the above assessment, management has determined that the Company’s involvement
in all its investee companies in accordance with IFRS 10’s control definition and guidance has not
changed from prior year except for Kansanshi Mine Plc.
(b) Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting
in a material adjustment in the year ended 31 December 2022 is included in the following notes:·
Notes 22 – acquisition of subsidiary: fair value of the consideration transferred, and fair value of the
assets acquired and liabilities assumed;
■ Notes 22, 23 and 24 – measurement of fair value of investee companies; key assumptions
about discounted cash flow assumptions;
■ Note 36 – measurement of defined benefit obligations: key actuarial assumptions;
■ Note 31 and 37 – recognition and measurement of provisions and contingencies: key
assumptions about the likelihood and magnitude of an outflow of resources;
■ Note 41 – measurement of ECL allowance for trade receivables and contract assets:
key assumptions in determining the weighted-average loss rate and the valuation of VAT
receivable; and
■ Note 44(j) - impairment test of intangible assets and goodwill: key assumptions underlying
recoverable amounts
(c) 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.
Significant valuation issues are reported to the Group Audit Committee. This includes the Group
finance team that has overall responsibilities for overseeing all significant fair value measurement
including level 3 fair values and reports directly to the Chief Financial Officer (CFO).
The finance team regularly reviews significant unobservable inputs and valuation adjustments. If
third party information arises such as broker quotes or pricing services, used to measure fair values,
then the finance team assesses the evidence obtained from third parties to support the conclusion
that such valuations meet the requirement of IFRS Accounting Standard, including the level in the
fair value hierarchy in which such valuations should be classified.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
74
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
4. Use of estimates and judgements (continued)
(c) Measurement of fair values (continued)
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.
Determination of ore reserves and life of mine plan
Reserves are estimates of the amount of product that can be economically and legally extracted
from the group’s properties. Estimating the quantity and/or grade of reserves requires the size,
shape and depth of ore bodies or fields to be determined by analysing geological data such
as drilling samples. Following this, the quantity of ore that can be extracted in an economical
manner is calculated using data regarding the life of mine plans and forecast sales prices (based
on current and long-term historical average price trends).
A majority of the groups’ property, plant and equipment associated with its mining subsidiaries
are depreciated over the estimated lives of the assets on a units-of-production basis. This also
includes the timing of repayments of life of mine linked borrowings. The calculation of the units-of-
production rate, and therefore the annual depreciation expense could be materially affected by
changes in the underlying estimates which are driven by the life of mine plans. Changes in estimates
can be the result of actual future production differing from current forecasts of future production,
expansion of mineral reserves through exploration activities, differences between estimated and
actual costs of mining and differences in the commodity prices used in the estimation of mineral
reserves.
Changes in the proven and probable reserves estimates may impact the carrying value of property,
plant and equipment, asset retirement obligation provision, recognition of deferred income tax
amounts and depreciation expense amount.
Further information about the assumptions made in measuring fair values is included in the following
notes:
■ Note 41- Financial instruments.
■ Note 20 - Investment property
■ Note 22 – Investment in subsidiaries; and
■ Note 23 – Investment in associates.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
75
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
5 New or revised Standards or Interpretations
5.1 New and amended standards adopted by the Company and Group
The Group adopted the applicable new, revised or amended standards for the financial reporting
periods commencing on or after 1 January 2023.
The amendments to accounting standards below, effective for the reporting period 1 January
2023 did not have any material impact on the Group’s accounting policies and required no
retrospective adjustments to the annual financial statements of the Group.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – (Amendments to IAS
12)
The Group has adopted Deferred Tax relating to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12) from 1 January 2023. The amendments narrow the scope of initial recognition
exemption to exclude transactions that give rise to equal and offsetting temporary differences –
e.g. leases and decommissioning of liabilities. For leases and decommissioning liabilities, an entity
is required to recognise the associated deferred tax assets and liabilities from the beginning of the
earliest comparative period presented, with any cumulative effect recognised as an adjustment to
retained earnings or other components of equity at that date. For all other transactions, an entity
applies the amendments to the transactions that occur on or after the beginning of the earliest
period presented.
The amendment will be applied to transactions that occur on or after the beginning of the earliest
comparative period presented. In addition, Group will recognise deferred tax assets (to the extent
that it is probable that they can be utilised) and deferred tax liabilities at the beginning of the
earliest comparative period for all deductible and taxable temporary differences associated with:
■ right-of-use assets and lease liabilities, and;
■ decommissioning, restoration and similar liabilities, and the corresponding amounts
recognised as part of the cost of the related assets.
The cumulative effect of recognising these adjustments is recognised in retained earnings, or
another component of equity, as appropriate. IAS 12 did not previously address how to account
for the tax effects of on-balance sheet leases and similar transactions and various approaches
were considered acceptable.
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2.
The Group has also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2) from 1 January 2023. Although the amendments did not result in any changes
to the accounting policies themselves, they impacted the accounting policy information disclosed
in the financial statements.
The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies.
The amendments also provide guidance on the application of disclosure of accounting policies,
assisting entities to provide useful, entity-specific accounting information that users need to
understand other information in the financial statements.
Definition of Accounting Estimates – Amendments to IAS 8.
The amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors clarifies
how companies should distinguish changes in accounting policies from changes in accounting
estimates. The distinction is important, because changes in accounting estimates are applied
prospectively to future transactions and other future events, whereas changes in accounting
policies are generally applied retrospectively to past transactions and other past events as well as
the current period.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
76
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
5 New or revised Standards or Interpretations (continued)
5.2 New and amended standards not yet adopted by the Group.
Certain new accounting standards and interpretations have been published that are not
mandatory for 31 December 2023 reporting periods and have not been early adopted by the
Group. These standards are not expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future transactions.
Classification of Liabilities as Current or Non-current – Amendments to IAS 1.
The narrow-scope amendments to IAS 1 Presentation of Financial Statements clarify that
liabilities are classified as either current or non-current, depending on the rights that exist at the
end of the reporting period. Classification is unaffected by the entity’s expectations or events
after the reporting date (e.g., the receipt of a waiver or a breach of covenant).
The amendments also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability. The
amendments could affect the classification of liabilities, particularly for entities that previously
considered management’s intentions to determine classification and for some liabilities that
can be converted into equity.
They must be applied retrospectively in accordance with the normal requirements in IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors. Since approving these
amendments, the IASB has issued an exposure draft proposing further changes and the deferral
of the amendments until at least 1 January 2024.
Sale or contribution of assets between an investor and its associate or joint venture – Amendments
to IFRS 10 and IAS 28. The IASB has made limited scope amendments to IFRS 10 Consolidated
Financial Statements and IAS 28 Investments in Associates and Joint Ventures.
The amendments clarify the accounting treatment for sales or contribution of assets between
an investor and their associates or joint ventures. They confirm that the accounting treatment
depends on whether the non-monetary assets sold or contributed to an associate or joint
venture constitute a ‘business’ (as defined in IFRS 3 Business Combinations).
Where the non-monetary assets constitute a business, the investor will recognise the full gain or
loss on the sale or contribution of assets. If the assets do not meet the definition of a business, the
gain or loss is recognised by the investor only to the extent of the other investor’s interests in the
associate or joint venture. The amendments apply prospectively. In December 2015, the IASB
decided to defer the application date of this amendment until such time as the IASB has
finalised its research project on the equity method.
Leases on sale and leaseback – Amendment to IFRS 16.
These amendments include requirements for sale and leaseback transactions in IFRS 16 to
explain how an entity accounts for a sale and leaseback after the date of the transaction. Sale
and leaseback transactions where some or all the lease payments are variable lease payments
that do not depend on an index or rate are most likely impacted. These amendments are
applicable for annual period beginning on or after 1 January 2024.
Supplier Finance Arrangements – Amendment to IAS 7 and IFRS 7.
These amendments require disclosures to enhance the transparency of supplier finance
arrangements and their effects on a Company’s liabilities, cash flows and exposure to liquidity
risk. The disclosure requirements are the IASB’s response to investors’ concerns that some
companies’ supplier finance arrangements are not sufficiently visible, hindering investors’
analysis. These amendments are applicable for annual periods beginning on or after 1 January
2024.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
77
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
6 Operating segments
(a) Basis for segmentation
The Group has three operational reportable segments, as described below, which are the
Group’s strategic operations. The strategic operation offer different products and services and are
managed separately because they require different technology and marketing strategies.
The group’s management committee, consisting of the chief executive officer, the chief financial
officer, chief investment officer, chief legal officer, chief internal audit officer, chief ICT officer,
chief human resource and administration officer, chief technical officer, and Company secretary,
examines the group’s performance from an operations perspective and has identified three
reportable segments of its business:
1. Investments – This comprises of only ZCCM-IH. This is premiere diversified mining investments
and operations Company whose majority owner is Industrial Development Corporation
(IDC). The Company’s focused interests are investments in Zambia’s mining and energy
sectors.
2. Mining and processing – This comprise of entities actively in the exploration activities, mining
of minerals and processing to finished products. The minerals mined include copper, gold,
amethyst, manganese, and limestone.
3. Technical services – This comprises the entity involved in the provision of environmental
consultancy services, analytical services, surveying services and radiation safety. This
Company has been maintained as a separate segment because of its value to the ZCCM-
IH subsidiaries in monitoring of its environmental activities.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
78
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
6 Operating segments (continued)
(a) Basis for segmentation (continued)
The Group’s Chief Executive Officer and the management committee reviews internal reports of each division at least quarterly. The following
summary describes the operations of each reportable segment.
| Segment | Entity | |||||||
| Country of | ||||||||
| operations | ||||||||
| Total | ||||||||
| revenue | ||||||||
| Revenue | ||||||||
| from | ||||||||
| Zambia | ||||||||
| Revenue | ||||||||
| from foreign | ||||||||
| countries | ||||||||
| Total | ||||||||
| segment | ||||||||
| assets | ||||||||
| Non-current | ||||||||
| assets | ||||||||
| Current | ||||||||
| assets | ||||||||
| Investments | ZCCM-IH Plc | Zambia | 23,180 | 23,180 | - | 14,579,912 | 14,579,912 | - |
| Mining and processing | ||||||||
| Mopani Copper Mine | ||||||||
| Plc (Held for sale) | ||||||||
| Zambia | 11,552,419 | 2,173,264 | 9,379,155 | 19,135,738 | 15,646,610 | 3,489,128 | ||
| Mining and processing | ||||||||
| Limestone Resources | ||||||||
| Limited | Zambia | 96,741 | 75,058 | 21,683 | 85,317 | 57,013 | 28,304 | |
| Mining and processing | ||||||||
| Kabundi Resources | ||||||||
| Limited | Zambia | 1,095 | 1,095 | - | 13,858 | 13,008 | 850 | |
| Mining and processing | ||||||||
| Zambia Gold Company | ||||||||
| Limited | Zambia | 38,524 | 38,524 | - | 211,303 | 211,303 | - | |
| Mining and processing | Kariba mineral Limited | Zambia | 29,868 | - | 29,868 | 37,442 | 28,297 | 9,145 |
| Technical Services | Misenge | Zambia | 20,308 | 20,308 | - | 14,095 | 14,095 | - |
| Total from segments | 11,762,135 | 2,331,429 | 9,430,706 | 34,077,665 | 30,550,238 | 3,527,427 | ||
| Less consolidation ad- | ||||||||
| justments | ||||||||
| (15,030) | (15,030) | - | - | - | - | |||
| Consolidated balance | 11,747,105 | 2,316,399 | 9,430,706 | 34,077,665 | 30,550,238 | 3,527,427 |
Note: Segment assets exclude financial instruments, deferred tax assets/liabilities and employee benefit assets
Revenue from foreign countries is distributed as follows:
| Country | Foreign revenue - ZMW |
| Switzerland | 9,379,155 |
| Malawi | 6,687 |
| Democratic Republic of Congo | 14,996 |
| India | 29,868 |
| Total | 9,430,706 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
79
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
6 Segment reporting (continued)
(a) Information about reportable segments
Information recorded on each reportable segment is set out below. Segment profit before tax, as included in internal management reports reviewed by the Group’s
Chief Executive Officer is used to measure performance because management believes that such information is the most relevant in evaluating the results of the
respective segments relative to other entities that operate in the same industries. Only one segment meets the 10% reportable segment criteria per IFRS 8- Segment
Reporting. The segment results for the Group were as follows:
The segment results for the Group were as follows:
December 2023
| Investments | Mining and processing | ||||||||||
| Technical | |||||||||||
| services | |||||||||||
| ZCCM-IH | |||||||||||
| ZMW’000 | |||||||||||
| Mopani | |||||||||||
| Copper | |||||||||||
| Mine Plc | |||||||||||
| (Held for | |||||||||||
| sale) | |||||||||||
| ZMW’000 | |||||||||||
| Limestone | |||||||||||
| Resources | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Zambia | |||||||||||
| Gold | |||||||||||
| Company | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Central | |||||||||||
| African | |||||||||||
| Cement | |||||||||||
| ZMW’000 | |||||||||||
| Kabundi | |||||||||||
| Resources | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Kariba | |||||||||||
| minerals | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Misenge | |||||||||||
| Environmental | |||||||||||
| and Technical | |||||||||||
| Services Limited | |||||||||||
| ZMW’000 | |||||||||||
| Others | |||||||||||
| (Discontinued | |||||||||||
| operations) | |||||||||||
| Consolidation | |||||||||||
| Adjustments | |||||||||||
| ZMW’000 | |||||||||||
| Consolidated | |||||||||||
| ZMW’000 | |||||||||||
| Revenue from external customers: | |||||||||||
| Sales* | 23,180 | 11,552,419 | 96,741 | 38,524 | - | 1,095 | 29,868 | - | - | - | 11,741,827 |
| Services | - | - | - | - | - | - | - | 5,278 | - | - | 5,278 |
| Total revenue from external | |||||||||||
| customers | 23,180 | 11,552,419 | 96,741 | 38,524 | - | 1,095 | 29,868 | 5,278 | - | - | 11,747,105 |
| Inter-segment revenue | - | - | - | - | - | - | 15,030 | - | (15,030) | - | |
| Total segment revenue | 23,180 | 11,552,419 | 96,741 | 38,524 | - | 1,095 | 29,868 | 20,308 | - | (15,030) | 11,747,105 |
| Consolidated revenue | 23,180 | 11,552,419 | 96,741 | 38,524 | - | 1,095 | 29,868 | 20,308 | - | (15,030) | 11,747,105 |
| Interest income | 434,433 | - | - | - | - | - | - | - | 206,224 | (206,224) | 434,433 |
| Interest expense | - | (2,971,812) | (13,995) | - | - | - | (1,240) | - | (95,445) | 305,741 | (2,776,751) |
| Net (impairment)/recovery of | |||||||||||
| financial assets | (83,055) | - | (2,607) | - | - | - | - | (3,986) | 545,886 | (536,403) | (80,165) |
| Personnel expenses | (157,323) | (1,925,389) | (48,022) | (10,047) | (2,283) | (15,950) | (8,131) | (104,647) | 104,647 | (2,167,145) | |
| Depreciation and amortisation | |||||||||||
| expense | (13,110) | (1,765,630) | (10,913) | (13,043) | - | (2,397) | (2,770) | (1,546) | (8,180) | 8,939 | (1,808,650) |
| Other income/(expenses) | 5,842,388 | (13,857,463) | (201,791) | (39,721) | - | 10,654 | (11,177) | (7,164) | (1,302,019) | (155,335) | (9,721,628) |
| Total profit/ (loss) before tax for | |||||||||||
| reported segments | 6,046,513 | (8,967,875) | (180,587) | (24,287) | - | 7,069 | (1,269) | (519) | (758,181) | (493,666) | (4,372,802) |
| Income tax credit/(expense) | (1,205,034) | - | (149) | 942 | - | (3,217) | 1,817 | (408) | - | - | (1,206,049) |
| Share of profit of equity accounted | |||||||||||
| investees | - | - | - | - | - | - | - | - | - | - | 2,261,209 |
| Loss from discontinued operations | - | - | - | - | - | - | - | - | - | - | (758,181) |
| Consolidated profit for the year | 4,841,479 | (8,967,875) | (180,736) | (23,345) | - | 3,852 | 548 | (927) | (758,181) | 1,009,362 | (4,075,823) |
*The Group’s main customer, Glencore International AG of Switzerland, accounts for 79% of the Group’s total revenue.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
80
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
6 Segment reporting (continued)
(b) Information about reportable segment (continued)
December 2023
| Investments | Mining and processing | ||||||||||
| Technical | |||||||||||
| services | |||||||||||
| ZCCM-IH | |||||||||||
| ZMW’000 | |||||||||||
| Mopani | |||||||||||
| Copper Mine | |||||||||||
| Plc | |||||||||||
| (Held for sale) | |||||||||||
| ZMW’000 | |||||||||||
| Limestone | |||||||||||
| Resources | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Zambia | |||||||||||
| Gold | |||||||||||
| Com- | |||||||||||
| pany | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Kariba | |||||||||||
| minerals | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Kabundi | |||||||||||
| Resources | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Central | |||||||||||
| African | |||||||||||
| Cement | |||||||||||
| ZMW’000 | |||||||||||
| Misenge En- | |||||||||||
| vironmental | |||||||||||
| and Techni- | |||||||||||
| cal Services | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Others | |||||||||||
| (Discon- | |||||||||||
| tinued | |||||||||||
| opera- | |||||||||||
| tion) | |||||||||||
| Consolidation | |||||||||||
| Adjustments | |||||||||||
| ZMW’000 | |||||||||||
| Consolidated | |||||||||||
| ZMW’000 | |||||||||||
| Segment assets* | |||||||||||
| Opening balance | 311,026 | 20,221,177 | 103,943 | 118,459 | 39,639 | 8,872 | - | 5,220 | 109,447 | - | 20,917,783 |
| Additions | 16,902 | 718,550 | 1,382 | 266 | 161 | 6,647 | - | 10,426 | 9,373 | - | 763,707 |
| Mineral royalty/right | 14,259,000 | - | - | 133,122 | - | - | - | - | - | - | 14,392,122 |
| Movement in inventory | (16,427) | (1,347,552) | 187 | (27,501) | (3,382) | 736 | - | - | (10,933) | - | (1,404,872) |
| Property plant and | |||||||||||
| equipment Revaluation | - | - | - | - | 3,794 | - | - | - | - | - | 3,794 |
| Increase/(Decrease) in | |||||||||||
| environmental asset | - | 1,309,193 | (9,243) | - | - | - | - | - | - | - | 1,299,950 |
| Disposal | - | - | - | - | - | - | - | - | (5,440) | - | (5,440) |
| Depreciation and amor- | |||||||||||
| tisation | (13,110) | (1,765,630) | (10,913) | (13,043) | (2,770) | (2,397) | - | (1,546) | (8,180) | 8,939 | (1,808,650) |
| Fair value change | 22,521 | - | - | - | - | - | - | - | - | - | 22,521 |
| Transfer | - | - | - | - | - | - | - | - | (94,267) | - | (94,267) |
| Impairment of PPE | - | - | (39) | - | - | - | - | (5) | - | - | (44) |
| Closing balance | 14,579,912 | 19,135,738 | 85,317 | 211,303 | 37,442 | 13,858 | - | 14,095 | - | 8,939 | 34,086,604 |
| Equity accounted | |||||||||||
| investees | 11,240,080 | - | - | - | - | - | - | - | - | (1,149,140) | 10,090,940 |
| Other assets | 12,649,090 | 2,897,253 | 104,245 | 115,491 | 90,274 | 55,662 | - | 38,886 | 1,593,397 | (3,258,005) | 14,286,293 |
| Total assets | 38,469,082 | 22,022,991 | 189,562 | 326,794 | 127,716 | 69,520 | - | 52,981 | 1,593,397 | (4,398,206) | 58,463,837 |
| - | |||||||||||
| Segment liabilities | 113,340 | 4,488,361 | - | - | - | - | - | 2,333 | - | - | 4,604,034 |
| Other liabilities | 933,723 | 58,461,265 | 103,165 | 161,643 | 30,093 | 5,569 | - | 17,140 | 2,606,990 | (2,769,151) | 59,550,437 |
| Total liabilities | 1,047,063 | 62,949,626 | 103,165 | 161,643 | 30,093 | 5,569 | - | 19,473 | 2,606,990 | (2,769,151) | 64,154,471 |
| Cashflows from operat- | |||||||||||
| ing activities | (368,710) | (1,672,840) | (93,682) | 18,599 | (4,394) | 7,440 | - | (1,323) | 4,167 | 2,016,713 | (83,727) |
| Cashflows from investing | |||||||||||
| activities | 379,990 | (718,550) | (1,383) | (267) | (146) | (7,488) | - | (10,427) | |||
| (9,373) | 911,180 | 533,274 | |||||||||
| Cashflows from financing | |||||||||||
| activities | - | 2,155,034 | 132,767 | 95,247 | 90,417 | - | - | - | - | (2,681,277) | (207,812) |
* Segment assets exclude financial instruments, deferred tax assets/liabilities and employee benefit assets.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
81
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
6 Segment reporting (continued)
(b) Information about reportable segment (continued)
December 2022
| Investments | Mining and processing | ||||||||||
| Technical | |||||||||||
| services | |||||||||||
| ZCCM-IH | |||||||||||
| ZMW’000 | |||||||||||
| Mopani | |||||||||||
| Copper | |||||||||||
| Mine Plc | |||||||||||
| ZMW’000 | |||||||||||
| Limestone | |||||||||||
| Resources | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Zambia | |||||||||||
| Gold | |||||||||||
| Company | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Central | |||||||||||
| African | |||||||||||
| Cement | |||||||||||
| ZMW’000 | |||||||||||
| Kabundi | |||||||||||
| Resources | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Kariba | |||||||||||
| minerals | |||||||||||
| Limited | |||||||||||
| ZMW’000 | |||||||||||
| Misenge | |||||||||||
| Environmental | |||||||||||
| and Technical | |||||||||||
| Services Limited | |||||||||||
| ZMW’000 | |||||||||||
| Others | |||||||||||
| (Discon- | |||||||||||
| tinued | |||||||||||
| opera- | |||||||||||
| tion) | |||||||||||
| Consolidation | |||||||||||
| Adjustments | |||||||||||
| ZMW’000 | |||||||||||
| Consolidated | |||||||||||
| ZMW’000 | |||||||||||
| Revenue from external customers: | |||||||||||
| Sales | 778 | 11,854,038 | 26,843 | 31 | - | 13,635 | 23,038 | - | 38,925 | - | 11,957,288 |
| Services | - | - | - | - | - | - | - | 2,066 | - | - | 2,066 |
| Total revenue from external customers | 778 | 11,854,038 | 26,843 | 31 | - | 13,635 | 23,038 | 2,066 | 38,925 | - | 11,959,354 |
| Inter-segment revenue | - | - | - | - | - | - | 2,866 | - | (2,866) | - | |
| Total segment revenue | 778 | 11,854,038 | 26,843 | 31 | - | 13,635 | 23,038 | 4,932 | 38,925 | (2,866) | 11,959,354 |
| - | |||||||||||
| Consolidated revenue | 778 | 11,854,038 | 26,843 | 31 | - | 13,635 | 23,038 | 4,932 | 38,925 | (2,866) | 11,959,354 |
| Interest income | 145,334 | - | - | 340 | - | - | - | - | 206,224 | - | 351,898 |
| Interest expense | (14) | (2,060,039) | (155) | (439) | - | - | (1,304) | - | (102,198) | 96,387 | (2,067,762) |
| Net (impairment)/recovery of financial | |||||||||||
| assets | |||||||||||
| (543) | - | (1,616) | - | - | - | - | 71 | 5,800 | (11,843) | (8,131) | |
| Depreciation and amortisation | |||||||||||
| expense | |||||||||||
| (13,821) | (1,797,870) | (15,978) | (3,503) | - | (1,736) | (2,770) | (474) | (6,945) | 6,982 | (1,836,115) | |
| Other income/(expenses) | 4,363,315 | (13,049,069) | (97,067) | (36,763) | - | (6,687) | (26,256) | (8,874) | (159,324) | (4,517,691) | (13,538,416) |
| Total profit/ (loss) before tax for | |||||||||||
| reported segments | 4,495,049 | (5,052,940) | (87,973) | (40,334) | - | 5,212 | (7,292) | (4,345) | (17,518) | (4,429,031) | (5,139,172) |
| Income tax credit/(expense) | (236,321) | - | (2,811) | (11,231) | - | 294 | 2,099 | (49) | (1,485) | - | (249,504) |
| Share of profit of equity accounted | |||||||||||
| investees | |||||||||||
| - | - | - | - | - | - | - | - | - | 1,603,143 | 1,603,143 | |
| Consolidated profit for the year | 4,258,728 | (5,052,940) | (90,784) | (51,565) | - | 5,506 | (5,193) | (4,394) | (19,003) | (2,825,888) | (3,785,533) |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
82
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
6 Segment reporting (continued)
(b) Information about reportable segment (continued)
December 2022
| Invest- | ||||||||||||
| ments | ||||||||||||
| Mining and processing | ||||||||||||
| Technical | ||||||||||||
| services | ||||||||||||
| ZCCM-IH | ||||||||||||
| ZMW’000 | ||||||||||||
| Mopani | ||||||||||||
| Copper | ||||||||||||
| Mine Plc | ||||||||||||
| ZMW’000 | ||||||||||||
| Limestone | ||||||||||||
| Resources | ||||||||||||
| Limited | ||||||||||||
| ZMW’000 | ||||||||||||
| Zambia | ||||||||||||
| Gold | ||||||||||||
| Company | ||||||||||||
| Limited | ||||||||||||
| ZMW’000 | ||||||||||||
| Nkand- | ||||||||||||
| abwe | ||||||||||||
| Coal | ||||||||||||
| Mine | ||||||||||||
| Limited | ||||||||||||
| ZMW’000 | ||||||||||||
| Kariba | ||||||||||||
| minerals | ||||||||||||
| Limited | ||||||||||||
| ZMW’000 | ||||||||||||
| Kabundi | ||||||||||||
| Resources | ||||||||||||
| Limited | ||||||||||||
| ZMW’000 | ||||||||||||
| Central | ||||||||||||
| African | ||||||||||||
| Cement | ||||||||||||
| ZMW’000 | ||||||||||||
| Misenge En- | ||||||||||||
| vironmental | ||||||||||||
| and Techni- | ||||||||||||
| cal Services | ||||||||||||
| Limited | ||||||||||||
| ZMW’000 | ||||||||||||
| Others (Dis- | ||||||||||||
| continued | ||||||||||||
| operations) | ||||||||||||
| Consolidation | ||||||||||||
| Adjustments | ||||||||||||
| ZMW’000 | Consolidated | |||||||||||
| Segment assets* | ||||||||||||
| Opening balance | 295,237 | 20,428,487 | 61,970 | |||||||||
| 114,795 | ||||||||||||
| - | ||||||||||||
| 38,852 | ||||||||||||
| 10,627 | - | 2,972 | ||||||||||
| 110,220 | ||||||||||||
| 8,663 | 21,071,823 | |||||||||||
| Acquisition of subsidiary | - | - | - | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | - | - | ||||||||||
| - | ||||||||||||
| - | - | |||||||||||
| Additions | 16,085 | 1,320,011 | 235 | |||||||||
| 7,167 | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| 189 | - | 2,722 | ||||||||||
| 6,778 | ||||||||||||
| - | 1,353,187 | |||||||||||
| Movement in inventory | (5,607) | 271,828 | (412) | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| 3,557 | ||||||||||||
| 114 | - | - | ||||||||||
| (258) | ||||||||||||
| - | 269,222 | |||||||||||
| Property plant and equipment | ||||||||||||
| Revaluation | 12,480 | - | - | - | - | - | - | - | - | - | - | 12,480 |
| Increase in environmental asset | - | - | 58,128 | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | - | - | ||||||||||
| - | ||||||||||||
| - | 58,128 | |||||||||||
| Disposal | (1,813) | (1,279) | - | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | - | - | ||||||||||
| - | ||||||||||||
| - | (3,092) | |||||||||||
| Depreciation and amortisation | (13,821) | (1,797,870) | (15,978) | |||||||||
| (3,503) | ||||||||||||
| - | ||||||||||||
| (2,770) | ||||||||||||
| (1,736) | - | (474) | ||||||||||
| (7,293) | ||||||||||||
| 7,330 | (1,836,115) | |||||||||||
| Fair value change | 8,465 | - | - | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | - | - | ||||||||||
| - | ||||||||||||
| - | 8,465 | |||||||||||
| Impairment of PPE | - | - | - | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| (339) | - | - | ||||||||||
| - | ||||||||||||
| - | (339) | |||||||||||
| Closing balance | 311,026 | 20,221,177 | 103,943 | |||||||||
| 118,459 | ||||||||||||
| - | ||||||||||||
| 39,639 | ||||||||||||
| 8,855 | - | 5,220 | ||||||||||
| 109,447 | ||||||||||||
| 15,993 | 20,933,759 | |||||||||||
| Equity accounted investees | 16,256,411 | - | - | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | - | - | ||||||||||
| - | ||||||||||||
| (1,081,549) | 15,174,862 | |||||||||||
| Other assets | 8,579,896 | 2,870,637 | 55,874 | |||||||||
| 3,849 | ||||||||||||
| - | ||||||||||||
| 10,100 | ||||||||||||
| 52,932 | 15 | 48,292 | ||||||||||
| 1,994,314 | ||||||||||||
| (805,691) | 12,810,218 | |||||||||||
| Total assets | 25,147,333 | 23,091,814 | 159,817 | |||||||||
| 122,308 | ||||||||||||
| - | ||||||||||||
| 49,739 | ||||||||||||
| 61,787 | 15 | 53,512 | ||||||||||
| 2,103,761 | ||||||||||||
| (1,871,247) | 48,918,839 | |||||||||||
| - | ||||||||||||
| Segment liabilities | 157,318 | 2,110,355 | - | |||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| - | - | 1,213 | ||||||||||
| - | ||||||||||||
| - | 2,268,886 | |||||||||||
| Other liabilities | 310,163 | 35,963,451 | 103,165 | |||||||||
| 30,225 | ||||||||||||
| - | ||||||||||||
| 54,356 | ||||||||||||
| 1,616 | - | 17,782 | ||||||||||
| 2,353,162 | ||||||||||||
| (92,774) | 38,741,146 | |||||||||||
| Total liabilities | 467,481 | 38,073,806 | 103,165 | |||||||||
| 30,225 | ||||||||||||
| - | ||||||||||||
| 54,356 | ||||||||||||
| 1,616 | - | 18,995 | ||||||||||
| 2,353,162 | ||||||||||||
| (92,774) | 41,010,032 | |||||||||||
| - | ||||||||||||
| Cashflows from operating activities | 4,766,330 | 1,994,127 | (74,408) | |||||||||
| (28,508) | ||||||||||||
| - | ||||||||||||
| (5,113) | ||||||||||||
| 7,237 | - | (1,223) | ||||||||||
| 59,245 | ||||||||||||
| (5,460,849) | 1,256,838 | |||||||||||
| Cashflows from investing activities | (4,761,256) | (697,698) | (235) | |||||||||
| (6,855) | ||||||||||||
| - | ||||||||||||
| - | ||||||||||||
| 150 | - | (2,723) | ||||||||||
| - | ||||||||||||
| 4,561,840 | (906,777) | |||||||||||
| Cashflows from financing activities | (1,135) | - | 97,380 | |||||||||
| 1,547 | ||||||||||||
| - | ||||||||||||
| 445 | ||||||||||||
| 41,174 | - | 45,224 | ||||||||||
| - | ||||||||||||
| (883,468) | (698,833) |
* Segment assets exclude financial instruments, deferred tax assets/liabilities and employee benefit assets.
Group reconciliation of reported assets and liabilities
(i) Other assets consist of trade and other receivables, term deposits, cash and cash equivalents.
(ii) Other liability includes tax liabilities, retirement benefits, environmental liability and legal provision.
(iii) Elimination adjustments relate to intersegment transactions. The adjustment to other liabilities relates to the elimination of shareholder loans and the reclassification of deferred
tax liabilities
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
83
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
7 Revenue from contracts with customers
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Sales of goods transferred at a point in time | 12,176,323 | 12,357,193 | 23,180 | 778 |
| Realisation charges (i) | (434,496) | (438,830) | - | - |
| Services transferred over time | 5,278 | 2,066 | - | - |
| 11,747,105 | 11,920,429 | 23,180 | 778 |
Disaggregation of revenue
Revenue by product line:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Copper cathodes | 11,068,316 | 10,566,593 | - | - |
| Sulphuric acid | 352,050 | 369,081 | - | - |
| Slimes | 114,997 | 191,233 | - | - |
| Limestone | 96,741 | 26,843 | - | - |
| Gold | 61,461 | - | 23,180 | - |
| Amythest | 29,868 | 23,038 | - | - |
| Copper concentrates | 10,262 | 636,204 | - | - |
| Copper anodes | 6,793 | 90,928 | - | - |
| Technical Services | 5,278 | 2,065 | - | - |
| Manganese | 1,095 | 13,635 | - | - |
| Other Goods (Value addition sales) | 244 | 31 | - | - |
| Other Goods (Mine Supplies) | - | 778 | - | 778 |
| Total | 11,747,105 | 11,920,429 | 23,180 | 778 |
*The amounts were restated as a result of a prior period error. Refer to note 45 for impact on
restatement.
8 Investment income
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Investment income | ||||
| Dividends income | - | - | 739,836 | 4,868,317 |
| Interest income | 187,468 | 46,967 | 187,468 | 46,627 |
| Royalty income* | 1,201,395 | 1,365 | 1,201,395 | 1,365 |
| Total Investment income | 1,388,863 | 48,332 | 2,128,699 | 4,916,309 |
| Interest expense | - | (439) | - | - |
| Net Investment income | 1,388,863 | 47,893 | 2,128,699 | 4,916,309 |
*On 31 March 2023 an Extraordinary General Meeting (“EGM”) was held and the shareholders of ZCCM-IH
approved an agreement for a royalty transaction between ZCCM-IH and First Quantum Minerals Limited. The
transaction involved ZCCM-IH conversion of its 20% dividend right in Kansanshi Mining Plc into a 3.1% life of mine
royalty right. The transaction also provides for 20% of the KMP VAT refunds as at June 30, 2022, to be paid to
ZCCM-IH, as and when these are received by KMP from the ZRA. Accordingly, the ZCCM-IH’s 3.1% life of mine
royalty right has been reclassified as an intangible asset.
During the year, ZCCM-IH has recorded total royalty income and VAT refund of ZMW1.2 billion (US$ 58.48 million)
and ZMW170.74 million (US$8.32 million) respectively.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
84
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
9 Other (expenses)/income
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Management fees and commissions | 5,083 | - | 5,378 | 5,944 |
| Fair value adjustment- investment property | ||||
| (note 20) | 22,521 | 8,465 | 22,521 | 8,465 |
| Fair value adjustment - inventory | - | (5,607) | - | (5,607) |
| Rental income | 9,955 | 10,193 | 10,097 | 10,334 |
| Gain/(loss) on disposal of property, plant and | ||||
| equipment | 233 | (22) | 233 | (22) |
| Derecognition of subsidiaries’ net liabilities | ||||
| (Note 22(d)) | ||||
| 19,366 | 3,995 | - | - | |
| Sundry income (ii)* | 186,569 | 158,723 | 4,071 | 69,089 |
| Total balance | 243,727 | 175,747 | 42,300 | 88,203 |
(i) Realisation charges
Realisation charges relate to deductions from the purchase price in line with the sales agreement which
includes freight and transportation costs.
(ii) Sundry income
Sundry income mainly includes income such as core shed viewing/sampling and sale of scrap.
10 Net impairment losses on financial assets
Movements on the provision for impairment of loans and receivables are as follows:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Balance at 1 Jan | 1,087,959 | 1,127,128 | 1,168,203 | 1,646,147 |
| Impairment recognised* | 325,595 | 6,435 | 341,190 | 4,748 |
| Impairment recoveries | (245,430) | (4,104) | (258,135) | (4,205) |
| Net impairment (release)/expense | ||||
| recognised | ||||
| 80,165 | 2,331 | 83,055 | 543 | |
| Included in assets held for sale | - | - | (29,233) | - |
| Receivables written off | - | (41,500) | - | (478,487) |
| Balance at 31 Dec | 1,168,124 | 1,087,959 | 1,222,025 | 1,168,203 |
*The amounts were restated as a result of a prior period error. Refer to note 45 for impact on restatement.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
85
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
11 Expenses by nature
Profit/(loss) before income tax is stated after charging:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Cost of sales* | ||||
| Inventories valuation write (down)/up | 1,337,198 | 5,821,857 | (5,729) | 2,130 |
| Mining and mineral processing costs | 10,148,519 | 4,714,825 | - | - |
| Employee costs* | 1,373,457 | 1,779,261 | - | - |
| Depreciation and amortisation* | 1,773,107 | 1,813,408 | - | - |
| Other cost of sales | 674,052 | 541,000 | 22,607 | - |
| 15,306,333 | 14,670,351 | 16,878 | 2,130 | |
| Administration expenses | ||||
| Depreciation and amortisation* | 396,513 | 31,410 | 376,934 | 13,821 |
| Auditors’ remuneration: | ||||
| - Audit fees | 6,506 | 2,922 | 1,285 | 985 |
| - Taxation services | 306 | 224 | 117 | 117 |
| Employee costs* | 793,688 | 275,201 | 157,323 | 129,353 |
| Impairment of PPE and other assets | 40 | - | - | - |
| Environmental consultancy expenses | - | - | 15,030 | 2,564 |
| Provision for environmental rehabilitation | (1,632) | (46,568) | (1,632) | (47,273) |
| Impairment of investments in subsidiaries | ||||
| (note 22(a)/23) | - | - | - | 418,821 |
| Corporate and administration expenses ((i) | ||||
| below)* | 669,840 | 317,159 | 245,091 | 224,343 |
| 1,865,261 | 580,348 | 794,148 | 742,731 |
(i) Other administration expenses
Corporate and administration expenses mainly include Mopani’s administration cost of ZMW377million (2022:
ZMW100 million), legal expenses of negative ZMW63 million (2022: ZMW115 million) and investment expenses of
ZMW209 million (2022: ZMW30.1 million).
12 Personnel expenses
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Salaries and wages* | 2,120,337 | 1,881,325 | 149,831 | 123,000 |
| Retirement benefit costs: | ||||
| Defined benefit scheme (note 36) | 36,853 | 168,173 | 2,619 | 3,154 |
| Mukuba Pension Scheme | 4,967 | 1,791 | 3,210 | 1,791 |
| National Social Security Funds* | 4,988 | 3,173 | 1,663 | 1,408 |
| 2,167,145 | 2,054,462 | 157,323 | 129,353 |
*The amounts were restated as a result of a prior period error. Refer to note 45 for impact on restatement.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
86
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
13 Finance income and finance costs
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Interest on borrowings (Note 34)* | ||||
| (2,776,751) | (2,061,009) | |||
| - | (14) | |||
| Interest on letter of credit and withholding tax | ||||
| (1,261,064) | - | |||
| - | - | |||
| Exchange differences | ||||
| (419,197) | (179,633) | |||
| (1,115) | (5,270) | |||
| Unwinding of discount on site restoration | ||||
| (23,520) | (18,892) | |||
| - | - | |||
| Finance costs | ||||
| (4,480,532) | (2,259,534) | |||
| (1,115) | (5,284) | |||
| Interest income from associate companies | 24,707 | 98,809 | 246,965 | 98,707 |
| Exchange differences | 2,187,987 | 353,632 | 2,733,465 | 347,340 |
| Finance income | 2,212,694 | 452,441 | 2,980,430 | 446,047 |
| Net finance income recognised in profit or loss | (2,267,838) | (1,807,093) | 2,979,315 | 440,763 |
14 Income tax expense
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Restated* | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Amounts recognised in profit or loss: | ||||
| Current income tax* | (328,199) | (33,797) | (324,844) | (30,952) |
| Deferred income tax charge (note 35) | (877,850) | (214,222) | (880,190) | (205,369) |
| Income tax expense | (1,206,049) | (248,019) | (1,205,034) | (236,321) |
The tax on the Group and Company profit before income tax differs from the theoretical amount that
would arise using the statutory income tax rate as follows:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| (Loss)/Profit before income tax | (2,111,593) | (3,518,511) | 6,046,513 | 4,495,049 |
| Less: share of profit from equity accounted associates | (2,261,209) | (1,603,143) | - | - |
| Total balance | (4,372,802) | (5,121,654) | 6,046,513 | 4,495,049 |
| Tax calculated at rates applicable to profits @ 30% | ||||
| (2022: 30%) Tax effect of: | (1,311,841) | (1,536,496) | 1,813,954 | 1,348,515 |
| Non-deductible expenses*** | ||||
| 2,636,975 | 3,221,079 | (439,349) | ||
| 324,370 | ||||
| Income taxed at a lower rate** | (173,475) | (1,432,905) | (173,458) | (1,432,905) |
| Effect of change in the deferred tax rate | - | (3,659) | - | (3,659) |
| Unrecognised deferred tax | 54,390 | - | 3,887 | - |
| Total income tax expense | 1,206,049 | 248,019 | 1,205,034 | 236,321 |
*The amounts were restated as a result of a prior period error. Refer to note 45 for impact on restatement.
** Income taxes at lower rate relates to rental income and dividends taxed at 15% and 0% respectively. Dividend
income received from Zambian mines is subject to zero tax. Dividend taxed at 0% tax rate amounted to
ZMW404 million (2022: ZMW4.62 billion).
*** Included in the Non-deductible are expenses that are not allowable for deduction for tax purposes such as
unrealised exchange differences and fair valuation movements.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
87
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
14 Income tax expense (Continued)
Current income tax movement in the statement of financial position
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Opening balance 1 Jan | 190,143 | 202,563 | 189,158 | 202,236 |
| Charge for the year | 328,199 | 35,282 | 324,844 | 30,952 |
| Tax paid | (279,789) | (46,217) | (276,626) | (44,030) |
| Included in assets held for sale | - | (1,485) | - | - |
| Closing balance | 238,553 | 190,143 | 237,376 | 189,158 |
15 Earnings per share
(a) Basic earnings per share
The calculation of basic earnings per share has been calculated based on profit or loss attributable to ordinary
shareholders and weighted average number of ordinary shares outstanding.
i) Profit/(loss) attributable to ordinary shareholders (basic)
Group
| 31 Dec 2023 | 31 Dec 2022 | |||||
| Continuing | ||||||
| operations | ||||||
| Discontinued | ||||||
| operations | Total | |||||
| Continuing | ||||||
| operations | ||||||
| Restated* | ||||||
| Discontinued | ||||||
| operations | ||||||
| Restated* | ||||||
| Total | ||||||
| Restated* | ||||||
| Loss for the year, | ||||||
| attributable to ordinary | ||||||
| shareholders | (3,317,642) | (758,181) | (4,075,823) | (3,766,530) | (19,003) | (3,785,533) |
Company
| 31 Dec 2023 | 31 Dec 2022 | |||||
| Continuing | ||||||
| operations | ||||||
| Discontinued | ||||||
| operations | Total | |||||
| Continuing | ||||||
| operations | ||||||
| Restated* | ||||||
| Discontinued | ||||||
| operations | Total | |||||
| Profit for the year, at- | ||||||
| tributable to ordinary | ||||||
| shareholders | 4,841,479 | - | - | 4,258,728 | - | |
| - |
*The amounts were restated as a result of a prior period error. Refer to note 45 for impact on restatement.
ii) Weighted average number of shares (basic)
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Opening balance at 1 January | ||
| 160,800,286 | 160,800,286 | |
| Closing balance | ||
| 160,800,286 | 160,800,286 |
The weighted average number of shares is determined by taking the number of additional shares issued and
multiplying by the number of days the new shares were in issue over the reporting period.
(b) Diluted earnings per share
There were no potentially dilutive shares outstanding at 31 December 2023 (2022: nil). Diluted earnings
per share are therefore the same as basic earnings per share.
16 Dividends per share
A dividend of ZMW1.51 per share was declared for the year ended 31 December 2023 (2022: ZMW 2.41
per share).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
88
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
17 Property, plant and equipment
Reconciliation of carrying amount
| Group | |||||||
| Land and | |||||||
| buildings | |||||||
| Plant and | |||||||
| equipment | |||||||
| Vertical | |||||||
| and rotary | |||||||
| kilns | |||||||
| Mine | |||||||
| Development | |||||||
| Motor | |||||||
| vehicles | |||||||
| Work in | |||||||
| progress | Total | ||||||
| Cost or valuation | |||||||
| Balance at 1 January 2022 | |||||||
| 614,197 | 10,009,740 | - | 2,247,364 | 399,362 | 1,067,743 | 14,338,406 | |
| Additions | |||||||
| 178 | 5,311 | - | - | 9,637 | 1,323,108 | 1,338,234 | |
| Transfers | |||||||
| 116,503 | 123,954 | - | 668,991 | 194,592 | (1,104,040) | - | |
| Revaluation | |||||||
| 8,007 | - | - | - | - | - | 8,007 | |
| Increase in environmental asset | |||||||
| - | - | 101,015 | - | - | - | 101,015 | |
| Disposal | |||||||
| - | (283) | - | - | (9,484) | - | (9,767) | |
| Balance at 31 December 2022 | |||||||
| 738,885 | 10,138,722 | 101,015 | 2,916,355 | 594,107 | 1,286,811 | 15,775,895 | |
| Balance at 1 January 2023 | |||||||
| 738,885 | 10,138,722 | 101,015 | 2,916,355 | 594,107 | 1,286,811 | 15,775,895 | |
| Additions | |||||||
| 1,253 | 8,473 | - | - | 536 | 743,851 | 754,113 | |
| Transfers | |||||||
| 13,205 | 13,265 | - | - | - | (26,470) | - | |
| Transfer from investment property | |||||||
| (Note 20) | 16,790 | - | - | - | - | - | 16,790 |
| Transfer to investment property | |||||||
| (Note 20) | (2,116) | - | - | - | - | - | (2,116) |
| Revaluation | |||||||
| 1,081 | (7,083) | - | - | (1,971) | - | (7,973) | |
| Increase in environmental asset | |||||||
| - | 1,309,193 | - | - | - | - | 1,309,193 | |
| Disposal | |||||||
| - | (5,107) | - | - | (2,333) | - | (7,440) | |
| Reclassified to assets held for sale | |||||||
| (Note 21) | (620,012) | (11,331,194) | - | (2,916,355) | (471,903) | (1,886,625) | (17,226,089) |
| Balance at 31 December 2023 | 149,086 | 126,269 | 101,015 | - | 118,436 | 117,567 | 612,373 |
| Accumulated depreciation and | |||||||
| impairment losses | |||||||
| Balance at 1 January 2022 | |||||||
| 149,449 | 1,068,499 | - | 221,540 | (69,917) | 111,383 | 1,480,954 | |
| Charge for the year | |||||||
| 101,575 | 845,250 | 8,081 | 587,799 | 235,251 | - | 1,777,956 | |
| Impairment | |||||||
| - | - | - | - | 339 | - | 339 | |
| Decrease in environmental asset | |||||||
| - | - | 42,887 | - | - | - | 42,887 | |
| Eliminated on revaluation | |||||||
| (4,473) | - | - | - | - | - | (4,473) | |
| Disposal | |||||||
| - | (136) | - | - | (6,539) | - | (6,675) | |
| Balance at 31 December 2022 | |||||||
| 246,551 | 1,913,613 | 50,968 | 809,339 | 159,134 | 111,383 | 3,290,988 | |
| Balance at 1 January 2023 | |||||||
| 246,551 | 1,913,613 | 50,968 | 809,339 | 159,134 | 111,383 | 3,290,988 | |
| Charge for the year | |||||||
| 123,233 | 1,052,636 | 4,352 | 349,341 | 253,546 | - | 1,783,108 | |
| Impairment | |||||||
| 39 | 5 | - | - | - | - | 44 | |
| Revaluation | |||||||
| (1,372) | (6,840) | - | - | (3,555) | - | (11,767) | |
| Decrease in environmental asset | |||||||
| - | - | 9,243 | - | - | - | 9,243 | |
| Disposal | |||||||
| - | (5,107) | - | - | (2,333) | - | (7,440) | |
| Reclassified to assets held for sale | |||||||
| (Note 21) | (351,578) | (2,886,441) | - | (1,158,680) | (303,961) | - | (4,700,660) |
| Balance at 31 December 2023 | 16,873 | 67,866 | 64,563 | - | 102,831 | 111,383 | 363,516 |
| Carrying amounts | |||||||
| Balance at 31 December 2022 | 492,334 | 8,225,109 | 50,047 | 2,107,016 | 434,973 | 1,175,428 | 12,484,907 |
| Balance at 31 December 2023 | |||||||
| 132,213 | 58,403 | 36,452 | |||||
| - | |||||||
| 15,605 | 6,184 | 248,857 |
(i) Impairment
Property, plant and equipment are reviewed for impairment in accordance with note 44 (j)(ii) ZMW44
thousand worth of assets were impaired during the year (2022: ZMW339 thousands)
(i) Assets pledged as security
Refer to note 39 (ii) for information on non-current assets pledged as security by the Group.
(ii) Leased plant and equipment
The Group did not have any assets under lease as at 31 December 2023 (2022: nil).
(iii) Work in progress
Work in progress relates to the Group’s property plant and equipment in transit and under construction.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
89
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
17 Property, plant, and equipment (continued)
Reconciliation of carrying amount
| Company | |||||
| Land and | |||||
| buildings | |||||
| Plant and | |||||
| equipment | |||||
| Motor | |||||
| vehicles | |||||
| Work in | |||||
| progress | |||||
| Total | |||||
| Cost or revaluation | |||||
| Balance at 1 January 2022 | 59,699 | 27,371 | 35,638 | 987 | 123,695 |
| Additions | - | 2,109 | 5,707 | 5,554 | 13,370 |
| Revaluation | 8,007 | - | - | - | 8,007 |
| Disposal | - | (283) | (4,983) | - | (5,266) |
| Balance at 31 December 2022 | 67,706 | 29,197 | 36,362 | 6,541 | 139,806 |
| Balance at 1 January 2023 | 67,706 | 29,197 | 36,362 | 6,541 | 139,806 |
| Additions | 240 | 1,922 | - | 14,593 | 16,755 |
| Transfers | 13,205 | 6,377 | |||
| - | |||||
| (19,582) | |||||
| - | |||||
| Disposal | - | (5,107) | |||
| (2,333) | |||||
| - | |||||
| (7,440) | |||||
| Transfer from investment property | |||||
| (Note 20) | |||||
| 16,790 | - | ||||
| - | |||||
| - | |||||
| 16,790 | |||||
| Transfer to investment property | |||||
| (Note 20) | |||||
| (2,116) | - | ||||
| - | |||||
| - | |||||
| (2,116) | |||||
| Balance at 31 December 2023 | 95,825 | 32,389 | 34,029 | 1,552 | 163,795 |
| Accumulated depreciation and | |||||
| impairment losses | |||||
| Balance at 1 January 2022 | 3,790 | 18,232 | 22,247 | 987 | 45,256 |
| Charge for the year | 1,406 | 4,430 | 6,169 | - | 12,005 |
| Eliminated on revaluation | (4,473) | - | |||
| - | |||||
| - | |||||
| (4,473) | |||||
| Disposal | - | (136) | |||
| (3,317) | |||||
| - | |||||
| (3,453 | |||||
| Balance at 31 December 2022 | 723 | 22,526 | 25,099 | 987 | 49,335 |
| Balance at 1 January 2023 | 723 | 22,526 | 25,099 | 987 | 49,335 |
| Charge for the year | 1,704 | 4,108 | 5,464 | - | 11,276 |
| Disposal | - | (5,107) | (2,333) | - | (7,440) |
| Balance at 31 December 2023 | 2,427 | 21,527 | 28,230 | 987 | 53,171 |
| Carrying amount | |||||
| Balance at 31 December 2022 | 66,983 | 6,671 | 11,263 | 5,554 | 90,471 |
| Balance at 31 December 2023 | 93,398 | 10,862 | 5,799 | 565 | 110,624 |
Revaluation
Buildings were revalued on 31 December 2022, by independent registered valuers, Sherwood Greene. Valuations
were made based on the Open Market Value. The Company revalues land and buildings every three years.
The carrying values of the properties were adjusted to their revalued amounts and the resultant surplus net of
deferred income tax was credited to the revaluation surplus in shareholders’ equity. Revaluations are done with
sufficient regularity to ensure that the carrying amount does not differ materially from the fair value.
The register showing the details of property, as required by section 30 of the Companies Act, 2017 of Zambia, is
available for inspection during business hours at the registered office of the Company.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
90
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
17 Property, plant and equipment (continued)
Revaluation (Continued)
The carrying amounts of revalued land and buildings were stated on the historical cost basis, the amounts
would be as follows:
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| ZMW,000 | ZMW,000 | |
| Land and buildings | ||
| Cost | ||
| 38,489 | 38,489 | |
| Accumulated depreciation | ||
| (11,110) | (5,257) | |
| Net book amount | ||
| 27,379 | 33,232 |
18 Exploration and evaluation asset
| Reconciliation of carrying amount | Group |
| Cost | ZMW’000 |
| Balance at 1 January 2022 | 49,367 |
| Additions | 3,794 |
| Balance at 31 December 2022 | 53,161 |
| Balance at 1 January 2023 | 53,161 |
| Additions | - |
| Balance at 31 December 2023 | 53,161 |
| Accumulated depreciation and impairment losses | |
| Balance at 1 January 2022 | 10,378 |
| Depreciation adjustment* | (8,654) |
| Balance at 31 December 2022 | 1,724 |
| Balance at 1 January 2023 | 1,724 |
| Charge for the year | - |
| Balance at 31 December 2023 | 1,724 |
| Carrying amount | |
| Balance at 31 December 2022 | 51,437 |
| Balance at 31 December 2023 | 51,437 |
Exploration and evaluation assets represent costs capitalized by the Group in relation to diamond drilling,
laboratory analysis of drilling core samples, geochemical and geophysical studies as well as costs incurred in
acquisition of rights to explore the license area in Kasenseli, Mwinilunga district. The site has been deemed to
possess commercial reserves.
*The depreciation adjustment in 2022 relates to a reversal of overstated depreciation in prior years for the
exploration and evaluation asset for Zambia Gold Limited.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
91
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
19 Intangible assets
The Group’s intangible assets relate to mineral rights and acquired computer software programmes while the
company’s intangible assets relate to computer software.
Reconciliation of carrying amount:
| Group | ||||||
| Mineral | ||||||
| rights | ||||||
| Group | ||||||
| Computer | ||||||
| software | ||||||
| Group | ||||||
| /Company | ||||||
| Royalty right | ||||||
| Total Group | ||||||
| intangible | ||||||
| assets | ||||||
| Company | ||||||
| Computer | ||||||
| software | ||||||
| Total | ||||||
| Company | ||||||
| intangible | ||||||
| assets | ||||||
| Cost | ||||||
| 7Balance as at 1 January 2022 | 3,281,457 | 6,703 | - | 3,288,160 | 6,313 | 6,313 |
| Additions | - | 2,804 | - | 2,804 | 2,656 | 2,656 |
| Balance at 31 December 2022 | 3,281,457 | 9,507 | - | 3,290,964 | 8,969 | 8,969 |
| Balance at 1 January 2023 | 3,281,457 | 9,507 | - | 3,290,964 | 8,969 | 8,969 |
| Additions | 133,122 | 221 | - | 133,343 | 147 | 147 |
| Disposals | - | (1,841) | - | (1,841) | (1,841) | (1,841) |
| Transfer from Associates * | ||||||
| (Note 23 (c)) | - | - | 11,036,000 | 11,036,000 | - | 11,036,000 |
| Fair valuation | - | - | 3,586,824 | 3,586,824 | - | 3,586,824 |
| Classified to assets held for | ||||||
| sale | (3,281,457) | - | - | (3,281,457) | - | - |
| Balance at 31 December 2023 | 133,122 | 7,887 | 14,622,824 | 14,763,833 | 7,275 | 14,630,099 |
| Amortisation | ||||||
| Balance as at 1 January 2022 | 71,692 | 4,134 | - | 75,826 | 3,776 | 3,776 |
| Amortisation charge | 64,961 | 1,852 | - | 66,813 | 1,816 | 1,816 |
| Balance at 31 December 2022 | ||||||
| 136,653 | 5,986 | - | 142,639 | 5,592 | 5,592 | |
| Balance as at 1 January 2023 | 136,653 | 5,986 | - | 142,639 | 5,592 | 5,592 |
| Disposals | - | (1,841) | - | (1,841) | (1,841) | (1,841) |
| Amortisation charge | 23,623 | 1,919 | 363,824 | 389,366 | 1,834 | 365,658 |
| Classified to assets held for | ||||||
| sale | (160,276) | - | - | (160,276) | - | - |
| Balance at 31 December 2023 | - | 6,064 | 363,824 | 369,888 | 5,585 | 369,409 |
| Carrying amount | ||||||
| Balance at 31 December 2022 | 3,144,804 | 3,521 | - | 3,148,325 | 3,377 | 3,377 |
| Balance at 31 December 2023 | 133,122 | 1,823 | 14,259,000 | 14,393,945 | 1,690 | 14,260,690 |
*On 4th April 2023, ZCCM-IH completed the conversion of the dividend rights and certain economic rights
attached to the 20% shareholding in Kansanshi Mining Plc to a 3.1% life of mine royalty right pursuant to the
Royalty Agreement. The directors have since recognised the royalty right as intangible asset in accordance with
IAS 38 Intangible assets. The royalty right has been recognised as an intangible asset and amortised over the
life of mine of Kansanshi Mining Plc. The fair value as at 31 December 2023 was determined by an independent
expert, Stock Brokers Zambia (“SBZ”).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
92
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
19 Intangible assets (continued)
Royalty right
The following table shows the valuation technique used in measuring the fair value of investment in Kansanshi as well as the significant unobservable inputs used.
| Royalty | |||
| Right | Valuation technique | Significant unobservable inputs and key assumptions | |
| Inter-relationship between Key | |||
| unobservable inputs and fair value | |||
| measurement | |||
| Kansanshi | |||
| Mining | |||
| Discounted cash flows: It | |||
| is an income approach | |||
| to valuation and the | |||
| most widely used | |||
| valuation methodology. | |||
| It computes the value of | |||
| a business by calculating | |||
| the present value of | |||
| anticipated future cash | |||
| flows generated by the | |||
| business. The expected | |||
| net cash flows are | |||
| discounted using risk | |||
| adjusted discount rates. | |||
| Relative valuation: | |||
| The relative valuation | |||
| methodology values | |||
| a company using | |||
| market-based multiples, | |||
| including operational | |||
| and asset-based metrics | |||
| • Target participation capital structure | |||
| - Debt to total capitalisation (2023:11.0%, 2022: 21.0%). | |||
| - Equity to total capitalisation (2023:89.0%, 2022:79.0%) | |||
| • Cost of debt | |||
| - Cost of debt (2023: 4.5%, 2022: 8.0%) | |||
| - Effective tax rate (2023: 30%, 2022: 30%) | |||
| - After tax cost of debt (2023: 3.2%, 2022: 5.6%) | |||
| • Cost of equity | |||
| - Risk free rate (2023: 3.88%, 2022: 3.88%) | |||
| - Market risk premium (2023: 9.7%, 2022: 10.29%) | |||
| - Levered beta (2023: 0.7, 2022: 0.98). | |||
| - Cost of equity (2023:10.7%, 2022: 16.8%) | |||
| • WACC (2023: 9.88%, 2022: 15.75%) | |||
| • Key assumptions considered were as follows: | |||
| - Mineral Royalty tax is assumed as follows for copper (a sliding | |||
| scale – from 4% to 10%, with the higher bands being: 10% | |||
| for Cu price over US$7,000/t. Mineral royalty is treated as | |||
| deductible from income tax from 2023 onwards. | |||
| - The MRT for gold revenue is assumed at a fixed rate of 6% and | |||
| is treated as deductible from income tax from 2023 onwards. | |||
| - Copper prices is projected at US$8,482 per ton in 2023 and | |||
| steadily increase to US$8,501 per ton in 2024. Gold prices | |||
| projected at US$1,940/oz in 2023 and to steadily decrease | |||
| to US$1,915/ oz in 2024. After 2024, Copper and Gold prices | |||
| projected at flat rate of US$8,303 per ton and US$1.566/oz | |||
| respectively. | |||
| - Capex expenditure has been projected at US$1.25 billion | |||
| over the life of mine budget incorporating the S3 expansion. | |||
| - Life of mine was estimated to be 22 years. | |||
| The estimated fair value would increase/ | |||
| (decrease) if: | |||
| • Equity to total capitalisation were | |||
| (lower)/higher | |||
| • Cost of debt were higher/(lower) | |||
| • The cost of equity were higher / | |||
| (lower). | |||
| • The copper price increased / | |||
| reduced. | |||
| • WACC (lower)/higher |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
93
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
20 Investment property
(i) Reconciliation of carrying amounts
| Group & Company | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Balance at 1 January | 200,751 | 192,227 |
| Additions | - | 59 |
| Transfer from property, plant and equipment (Note 17) | 2,116 | - |
| Transfer to property, plant and equipment (Note 17) | (16,790) | - |
| Change in fair value (Note 9) | 22,521 | 8,465 |
| Closing balance | 208,598 | 200,751 |
(ii) Amounts recognised in profit or loss for investment properties.
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Rental income from operating leases | ||||
| (note 9) | ||||
| 9,955 | 10,193 | 10,097 | 10,334 | |
| Direct operating expenses from property that generated | ||||
| rental income | (3,466) | (2,287) | (3,466) | (2,287) |
| Net rental Income | 6,489 | 7,906 | 6,631 | 8,047 |
(iii) Leasing arrangements
The investment properties are leased to tenants under operating leases with rentals payable quarterly. Lease
income from operating leases where the group is a lessor is recognised in income on a straight-line basis over
the lease term. There are no variable lease payments that depend on an index or rate. Where considered
necessary to reduce credit risk, the group may obtain three months rental deposit for the term of the lease.
Minimum lease payments receivable on leases of investment properties are as follows:
| Group and Company | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Within 1 year | 7,405 | 6,837 |
(iv) Measurement of fair value
Investment properties, principally office buildings and residential apartments, are held for long-term rental
yields. They are carried at fair value. Changes in fair values are presented in profit or loss as part of other
income.
Fair value hierarchy
The fair value of investment property for the Company was determined, as at 31 December 2023 by Sherwood
Green Property Consultants, who are sufficiently independent property valuers, having appropriate recognised
professional qualifications and recent experience in the location and category of the property being valued.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
94
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
20 Investment property (continued)
(iv) Measurement of fair value (continued)
Fair value hierarchy (continued)
The fair value measurement for investment property of ZMW209 million (2022: ZMW201 million) has been
categorised as a Level 3 fair value based on the inputs to the valuation technique used.
Valuation techniques and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment property, as
well as the significant unobservable inputs used:
| Valuation technique | ||
| Significant unobservable | ||
| inputs | ||
| Inter-relationships between Key | ||
| unobservable inputs and fair value | ||
| measurement | ||
| The investment method of | ||
| valuation was applied for | ||
| valuation of the investment | ||
| properties. In the Investment | ||
| Method, the annual rental | ||
| income presently received or | ||
| expected over a period of time | ||
| for the lease of the property is | ||
| estimated and deducted there | ||
| from the expenses or outgoings | ||
| incidental to the ownership of | ||
| the property to obtain the net | ||
| annual rental value. This net | ||
| annual income is then capitalised | ||
| by an appropriate capitalisation | ||
| rate or years’ purchase figure to | ||
| arrive at the present Capital Value | ||
| of the property. | ||
| In addition, the direct comparison | ||
| method of valuation was also | ||
| applied for residential properties. | ||
| In the direct comparison | ||
| method, a number of similar | ||
| properties called comparable | ||
| are assembled and analysed | ||
| preferably within the vicinity. | ||
| The analysis involves comparing | ||
| relevant aspects of the subject | ||
| property with the comparable such | ||
| as the condition, location, design, | ||
| accessibility and amenities in the | ||
| area among others. Weights in | ||
| terms of figures or percentages are | ||
| assigned to determine a fair rate to | ||
| be applied to the subject property. | ||
| • Expected market rental | ||
| growth (3 - 5%. Weighted | ||
| average 4%) (2023: 4%, | ||
| 2022: 4%) | ||
| • Void periods (average | ||
| 6 months after the end | ||
| of each lease) (2023: 6 | ||
| months, 2022: 6 months) | ||
| • Occupancy rate (90-95%, | ||
| weighted average 90%) | ||
| (2023: 90%, 2022: 90%) | ||
| • Rent-free periods (1-month | ||
| period on new leases) | ||
| (2023: 1 month, 2022: 1 | ||
| month) | ||
| • Risk-adjusted discount | ||
| rates (9% - 10.5%. weighted | ||
| average 10%) (2023: 10% | ||
| 2022: 10%). | ||
| • Land value assessment, a | ||
| rate per acre of K1,000,000 | ||
| was adopted. | ||
| • Capitalization rate ranging | ||
| 9% - 12% has been applied. | ||
| • Costs associated with | ||
| managing and maintaining | ||
| a property or building | ||
| range from 15% -20%. | ||
| The estimated fair value would | ||
| increase or (decrease) if: | ||
| • expected market rental growth were | ||
| higher (lower); | ||
| • void periods were shorter (longer); | ||
| • the occupancy rate were higher | ||
| (lower): | ||
| • Rent-free periods were shorter | ||
| (longer); or | ||
| • The risk-adjusted discount rate were | ||
| lower (higher). |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
95
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
21 Assets classified as held for sale
i) Description
Reconciliation of carrying amount for the Company;
| Company | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Balance at 1 Jan | 145,700 | 430,977 |
| Additions | - | 12,244 |
| Impairment | - | (386,007) |
| Change in fair value | (145,700) | 88,486 |
| Balance at 31 Dec | - | 145,700 |
Investrust Bank Plc
The Board of ZCCM-IH approved management’s plan to divest from Investrust Bank Plc following the change
in the Company’s strategic focus in mining and energy. Investrust Bank Plc is being actively marketed for sale
at a price reasonable in relation to its fair value. Management has a concrete plan in place to dispose off the
bank, which includes actively seeking a buyer and exploring other alternatives within the financial year 2024.
Subsequent to the year end, the Bank of Zambia took possession of the bank. On 2 April 2024, LuSE issued a
notice to halt the trading in securities of Investrust Bank Plc. With effect from 24 April 2024 LuSE had formally
suspended the listing of Investrust Bank Plc on the Lusaka Stock Exchange.
Mopani Copper Mines Plc
During the financial year, ZCCM-IH was focused on securing a strategic equity partner (SEP) for Mopani Copper
Mine Plc (Mopani) to finance the completion of expansion projects and boost operational efficiency. This initiative
would result in dilution of ZCC-IH's ownership interest in Mopani and hence meet the criteria for reclassification
of Mopani’s assets and liabilities as Held for Sale which have been separately presented in the consolidated
financial statements in accordance with International Financial Reporting Standard 5: Held for Sale.
The value of Mopani in the company as of 31 December 2023 was nil and the Company had a net liability value
of ZMW40.92 billion.
Subsequent to the year end, ZCCM-IH successfully secured Delta Mining Limited (Delta) as the strategic equity
partner. This new partnership resulted in Delta acquiring new shares in Mopani, which diluted ZCCM-HI’s stake
from 100% to 49%.
(ii) The assets and liabilities of the investments classified as held for sale are as follows:
| 31 Dec 2023 | Group | Company | |
| Assets | Liabilities | ||
| Fair value | |||
| Mopani Copper Mines | 22,032,991 | (60,173,129) | - |
| Investrust Bank Plc | 1,593,397 | (2,503,825) | - |
| Total | 23,626,388 | (62,676,954) | - |
| 31 Dec 2022 | Group | Company | |
| Assets | Liabilities | Fair value | |
| Investrust Bank Plc | 2,097,750 | (2,249,997) | 145,700 |
| Mushe Milling Company Limited | 6,011 | (58,497) | - |
| Total | 2,103,761 | (2,308,494) | 145,700 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
96
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
21 Assets classified as held for sale (continued)
(iii) Financial performance and cash flow information
The financial performance and cash flow information presented for the year ended 31 December 2023.
| Investrust Bank | |
| Plc | |
| 31 Dec | |
| 2023 | |
| Revenue | 188,822 |
| Other income | 13,977 |
| Cost of sales and expenses | (960,980) |
| Loss before income tax | (758,181) |
| Income tax expense | - |
| Loss for the year | (758,181) |
| Loss attributable to non-controlling interest | (216,840) |
| Net cash outflow from operating activities | 569,594 |
| Net cash outflow from investing activities | (9,373) |
| Net cash inflow from financing activities | - |
| Net cash (out)/in flow | 560,221 |
The financial performance and cashflow information presented for the year ended 31 December 2022:
| Investrust | |||
| Bank Plc | |||
| Mushe Milling | |||
| Company | Total | ||
| 31 Dec | |||
| 2022 | |||
| 31 Dec | |||
| 2022 | |||
| 31 Dec | |||
| 2022 | |||
| Revenue | - | 38,925 | 38,925 |
| Net investment income | 110,779 | - | 110,779 |
| Fees and commission inco | 39,998 | - | 39,998 |
| Other income | 13,473 | 18 | 53,489 |
| Cost of sales and expenses | (165,373) | (55,338) | (316,156) |
| Loss before income tax | (1,123) | (16,395) | (17,518) |
| Income tax expense | (1,485) | - | (1,485) |
| Loss for the year | (2,608) | (16,395) | (19,003) |
| Profit attributable to non-controlling interest | (746) | - | (746) |
| Net cash outflow from operating activities | |||
| (4,874) | (1,569) | (6,443) | |
| Net cash outflow from investing activities | (342) | - | (342) |
| Net cash outflow from financing activities | - | 1,969 | 1,969 |
| Net cash in flow | (5,216) | 400 | (4,816) |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
97
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
21 Assets classified as held for sale (continued)
The following assets and liabilities were reclassified as held for sale as at 31 December 2023;
| Mopani Cop- | |||
| per Mines | |||
| Investrust | |||
| Bank Plc | |||
| Total | |||
| Assets classified as held for sale | |||
| Property, plant, and equipment | 12,525,429 | - | 12,525,429 |
| Intangible assets | 3,121,181 | - | 3,121,181 |
| Trade and other receivables | 2,691,333 | 28,161 | 2,719,494 |
| Term deposits | - | 1,005,015 | 1,005,015 |
| Inventories | 3,489,128 | - | 3,489,128 |
| Other assets | 147,553 | - | 147,553 |
| Cash and cash equivalents | 58,367 | 560,221 | 618,588 |
| Total assets of disposal group held for sale | 22,032,991 | 1,593,397 | 23,626,388 |
| Liabilities directly associated with assets classified as held | |||
| for sale | |||
| Borrowings | (43,518,156) | - | (43,518,156) |
| Provisions for environmental rehabilitation | (3,263,137) | - | (3,263,137) |
| Bank Overdraft | (1,095,462) | - | (1,095,462) |
| Trade and other payables | (12,296,374) | (2,503,825) | (14,800,199) |
| Total liabilities directly associated with assets classified as | |||
| held for sale | (60,173,129) | (2,503,825) | (62,676,954) |
| Net liabilities held for sale | (38,140,138) | (910,428) | (39,050,566) |
| Accumulated non-controlling Interest | - | (252,969) | (252,969) |
For segment reporting purposes, Investrust Bank Plc included in the assets held for sale above, has been classified
under investments segment as part of other assets. Whie Mopani Copper Mines Plc has been classified under the
mining and processing segment.
The following assets and liabilities were reclassified as held for sale as at 31 December 2022;
| Investrust | |||
| Bank Plc | |||
| Mushe | |||
| Milling | |||
| Company | Total | ||
| Assets classified as held for sale | |||
| Property, plant, and equipment | 51,327 | 5,296 | 56,623 |
| Intangible assets | 1,603 | - | 1,603 |
| Financial assets at fair value through profit or loss | 584 | - | 584 |
| Trade and other receivables | 811,725 | - | 811,725 |
| Term deposits | 829,211 | - | 829,211 |
| Inventories | 51,077 | 144 | 51,221 |
| Other assets | 74,907 | - | 74,907 |
| Cash and cash equivalents | 277,316 | 571 | 277,887 |
| Total assets of disposal group held for sale | 2,097,750 | 6,011 | 2,103,761 |
| Liabilities directly associated with assets classified as held for sale | |||
| Borrowings | - | (32,387) | (32,387) |
| Trade and other payables | (2,249,997) | (26,110) | (2,276,107) |
| Total liabilities directly associated with assets classified as held for sale | (2,249,997) | (58,497) | (2,308,494) |
| Net liabilities held for sale | (152,247) | (52,486) | (204,733) |
| Accumulated non-controlling Interest | (36,129) | - | (36,129) |
For segment reporting purposes, the 2 companies included in the disposal group above were classified under
investments segment as part of other assets.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
98
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries
The following are considered when determining whether the Company has control over the investee companies:
• ZCCM-IH’s representation on the board of the investee company
• Appointment of key management staff
• Number of voting rights.
Currently all subsidiaries are wholly owned by ZCCM-IH save for Zambia Gold Company Limited. Zambia Gold
Company Limited is in its their development stage. During this period, ZCCM-IH appoints key management
personnel for the investee company, funds and exercises control over its operations and activities. ZCCM-IH is
deemed to exercise control over the entity.
Set out below is a list of subsidiaries, which are listed and unlisted:
December 2023
| Company | ||||||||
| Country of | ||||||||
| incorpora- | ||||||||
| tion | ||||||||
| Principal | ||||||||
| place of | ||||||||
| business | ||||||||
| Held % | ||||||||
| Interest | ||||||||
| Opening | ||||||||
| carrying | ||||||||
| amount | Addition | |||||||
| Conversion | ||||||||
| of loan | ||||||||
| Change | ||||||||
| in fair | ||||||||
| value | ||||||||
| Closing | ||||||||
| carrying | ||||||||
| amount | ||||||||
| Mopani Copper Mine Plc | Zambia | Kitwe | 100 | - | - | - | - | - |
| Misenge Environmental and Tech- | ||||||||
| nical Services | ||||||||
| Zambia | Kalulushi | 100 | 45,323 | - | ||||
| - | ||||||||
| (11,815) | 33,508 | |||||||
| Kariba Minerals Limited | Zambia | |||||||
| Mapati- | ||||||||
| zya | ||||||||
| 100 | - | |||||||
| 93,568 | 5,839 | 217 | 99,624 | |||||
| Kabundi Resources Limited | Zambia | Serenje | 100 | 85,927 | - | - | (21,077) | 64,850 |
| Limestone Resources Limited | Zambia | Ndola | 100 | 172,553 | 94,521 | - | (267,074) | - |
| Zambia Gold Company limited | Zambia | Lusaka | 51% | 99,811 | 1,912 | - | (17,321) | 84,402 |
| Central African cement Company | ||||||||
| limited | ||||||||
| Zambia | Lusaka | 49% | 1,437 | - | ||||
| - | ||||||||
| (1,437) | - | |||||||
| 405,051 | 190,001 | 5,839 | (318,507) | 282,384 |
December 2022
| Company | ||||||||
| Country of | ||||||||
| incorpora- | ||||||||
| tion | ||||||||
| Principal | ||||||||
| place of | ||||||||
| business | ||||||||
| Held % | ||||||||
| Interest | ||||||||
| Opening | ||||||||
| carrying | ||||||||
| amount | Addition | |||||||
| Impair- | ||||||||
| ment | ||||||||
| Change | ||||||||
| in fair | ||||||||
| value | ||||||||
| Closing | ||||||||
| carrying | ||||||||
| amount | ||||||||
| Mopani Copper Mine Plc | Zambia | Kitwe | 100 | - | - | - | - | - |
| Misenge Environmental and Technical | ||||||||
| Services | ||||||||
| Zambia | Kalulushi | 100 | - | 45,323 | - | - | 45,323 | |
| Nkandabwe Coal Mines Limited | Zambia | Sinazeze | 100 | - | - | - | - | |
| Kariba Minerals Limited | Zambia | |||||||
| Mapati- | ||||||||
| zya | ||||||||
| 100 | 32,814 | - | (32,814) | - | - | |||
| Kabundi Resources Limited | Zambia | Serenje | 100 | 20,959 | 41,421 | - | 23,547 | 85,927 |
| Limestone Resources Limited | Zambia | Ndola | 100 | 172,553 | - | - | 172,553 | |
| Zambia Gold Company limited | Zambia | Lusaka | 51% | 100,176 | (365) | - | 99,811 | |
| Central African cement Company | ||||||||
| limited | ||||||||
| Zambia | Lusaka | 49% | 1,437 | - | - | 1,437 | ||
| 327,939 | 86,379 | (32,814) | 23,547 | 405,051 |
Capital Contributions
During the year 2023, ZCCM-IH Plc made equity contributions to Kariba Minerals, Limestone Resources Limited and
Zambia Gold Limited amounting to ZMW93.57 million, ZMW94.52 and ZMW1.91 million respectively. The capital
contributions were aimed at strengthening balance sheets and improve the operations of the respective companies.
Further, Ministry of Finance invested ZMW 99.49 million during the year into Zambia Gold as capital contribution for its
49% minority interest in the Company.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
99
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries (continued)
(a) Reconciliation of carrying amounts
| Company | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Balance at 1 January | 405,051 | 327,939 |
| Additions | 190,001 | 86,379 |
| Change in fair through other comprehensive income | (318,507) | 23,547 |
| Conversion of loan to equity | 5,839 | - |
| Impairment | - | (32,814) |
| Closing Balance | 282,384 | 405,051 |
In line with the accounting policy for investments in subsidiaries, to carry all its investments at fair value, the Company
performs annual fair value of its investments in subsidiaries and fair value gain/(loss) is recognised. The fair value
gain/(loss) is recognised in the other comprehensive income (OCI). During the year, a fair value movement of
(ZMW318.5 million) was recognised (2022: ZMW23.5 million). Valuation techniques used are disclosed in note 22 (b).
(b) Measurement of fair value
During the year ZCCM – IH Plc engaged an independent expert Stockbrokers Zambia (“SBZ”) to perform the
valuation of the investments held at the year end. SBZ performed a full valuation and provided an independent
valuation opinion in accordance with IFRS 13: Fair Value Measurement and IFRS 9: Financial Instruments.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
100
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries (continued)
(b) Measurement of fair value (continued)
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment in
subsidiaries as well as the significant unobservable inputs used.
| Subsidiary | |||||
| Valuation tech- | |||||
| nique | |||||
| Significant unobservable inputs | |||||
| and key assumptions | |||||
| Inter-relationship between Key | |||||
| unobservable inputs and fair | |||||
| value measurement | |||||
| Mopani cop- | |||||
| per Mine Plc | |||||
| Discounted Cash | |||||
| Flow (DCF) | |||||
| • | Target capital structure | ||||
| Debt to total capitalisation | |||||
| (2023: 26.2%, 2022: 21%). | |||||
| • | Equity to total capitalisation | ||||
| (2023:73.8%, 2022: 79%) | |||||
| • | Cost of debt | ||||
| Cost of debt (2023: 10.3%, | |||||
| 2022: 7%) | |||||
| Effective tax rate (2023: 30 %, | |||||
| 2022: 30%) | |||||
| After tax cost of debt (2023: | |||||
| 7.2%, 2022: 4.9%) | |||||
| • | Cost of equity | ||||
| Risk free rate (2023: 3.9 %, | |||||
| 2022: 3.9%) | |||||
| Market risk premium (2023: | |||||
| 26.7%, 2022: 26.7%) | |||||
| Unlevered beta (2023: 1.2, | |||||
| 2022: 0.95). | |||||
| • | Mineral Royalty tax is as- | ||||
| sumed at 7.5%. (2022: 7.5%) | |||||
| The estimated fair value would | |||||
| change in response to the | |||||
| changes in the factors below: | |||||
| • | Equity to total capitalisation | ||||
| • | Cost of debt | ||||
| • | The cost of equity | ||||
| • | Copper/Cobalt prices | ||||
| • | Capital Expenditure |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
101
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries (continued)
(b) Measurement of fair value (continued)
| Subsidiary | |||
| Valuation | |||
| technique | |||
| Significant | |||
| unobservable inputs | |||
| and key assumptions | |||
| Inter-relationship between Key | |||
| unobservable inputs and fair value | |||
| measurement | |||
| Misenge | |||
| Environmental and | |||
| Technical Services | |||
| Net asset value | |||
| approach | |||
| The values of the assets | |||
| and liabilities | |||
| Increase/(decrease) in assets would | |||
| increase/(decrease) the fair value | |||
| decrease/(increase) in liabilities would | |||
| increase/(decrease) the fair value | |||
| Kariba Mineral | |||
| Limited | |||
| Net asset value | |||
| approach | |||
| The values of the assets | |||
| and liabilities | |||
| Increase/(decrease) in assets would | |||
| increase/(decrease) the fair value | |||
| decrease/(increase) in liabilities would | |||
| increase/(decrease) the fair value | |||
| Kabundi Resources | |||
| Limited | |||
| Net asset value | |||
| approach | |||
| The values of the assets | |||
| and liabilities | |||
| Increase/(decrease) in assets would | |||
| increase/(decrease) the fair value | |||
| decrease/(increase) in liabilities would | |||
| increase/(decrease) the fair value | |||
| Limestone Resources | |||
| Limited | |||
| Net asset value | |||
| approach | |||
| The values of the assets | |||
| and liabilities | |||
| Increase/(decrease) in assets would | |||
| increase/(decrease) the fair value | |||
| decrease/(increase) in liabilities would | |||
| increase/(decrease) the fair value | |||
| Zambia Gold | |||
| Company Limited | |||
| Net asset value | |||
| approach | |||
| The values of the assets | |||
| and liabilities | |||
| Increase/(decrease) in assets would | |||
| increase/(decrease) the fair value | |||
| decrease/(increase) in liabilities would | |||
| increase/(decrease) the fair value |
Valuation technique and significant unobservable inputs
Investments in subsidiaries have been measured at fair value as follows:
Company
| Company investments in subsidiaries analysis | 31-Dec | 31-Dec |
| 2023 | 2022 | |
| Mopani Copper Mine Plc | - | |
| - | ||
| Misenge Environmental and Technical Services | 33,508 | 45,323 |
| Kariba Minerals Limited | 99,624 | - |
| Kabundi Resources Limited | 64,850 | 85,927 |
| Limestone Resources Limited | - | 172,553 |
| Zambia Gold Company Limited | 84,402 | 99,811 |
| Central African Cement Company Limited | - | 1,437 |
| Total | 282,384 | 405,051 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
102
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries (continued)
(b) Measurement of fair value (continued)
Fair value hierarchy
The fair value measurement for the Company’s investment in subsidiaries of ZMW282 million (2022: ZMW405 mil-
lion) has been categorised as a level 3 fair value based on the inputs to the valuation technique used. The fol-
lowing table shows a reconciliation from the opening balances to the closing balances for level 2 and 3 fair values.
| December 2023 | Level 2 | Level 3 | Total |
| Balance at 1 January | - | 405,051 | 405,051 |
| Additions | - | 195,840 | 195,840 |
| Change in fair value | - | (318,507) | (318,507) |
| Balance at 31 December | - | 282,384 | 282,384 |
| December 2022 | Level 2 | Level 3 | Total |
| Balance at 1 January | - | 327,939 | 327,939 |
| Additions | - | 86,379 | 86,379 |
| Change in fair value | - | (9,267) | (9,267) |
| Balance at 31 December | - | 405,051 | 405,051 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
103
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries (continued)
(c) Non-controlling interest
The Group includes three subsidiaries, Investrust Bank Plc, Zambia Gold Company Limited and Central
Cement Company Limited, with material non-controlling interests (NCI):
| Name | ||||||
| Proportion of ownership | ||||||
| interests and voting | ||||||
| rights held by the NCI | ||||||
| Total comprehensive | ||||||
| income allocated to NCI | Accumulated NCI | |||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| Investrust Bank Plc | 28.6% | 28.6% | (216,840) | (746) | (252,969) | (36,129) |
| Zambia Gold Company | ||||||
| Limited | 49% | 49% | (11,906) | |||
| (25,267) | 78,185 | (9,867) | ||||
| Central cement company | ||||||
| limited | 45% | 45% | - | - | - | (733) |
| Total | (228,279) | (26,013) | (174,784) | (46,729) |
Minority interest equity finance
During the year, The Ministry of Finance invested ZMW 99.49 million into Zambia Gold as capital contribution
for its 49% minority interest in the Company.
Summarised financial information for Investrust Bank Plc, Zambia Gold Company limited and Central Cement
Company Limited, before intragroup eliminations, is set out below:
| 2023 | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2023 | ||
| Investrust Bank Plc | ||
| Zambia Gold | ||
| Company Limited | ||
| Non-current assets | - | 211,303 |
| Current assets | 1,593,397 | 114,712 |
| Total assets | 1,593,397 | 326,794 |
| Non-current liabilities | - | 15,313 |
| Current liabilities | 2,503,825 | 146,330 |
| Total liabilities | 2,503,825 | 161,643 |
| Equity attributable to owners of the parent | ||
| (657,459) | 86,966 | |
| Equity attributable non-controlling interests | ||
| (252,969) | 78,185 | |
| Revenue, investment income, fees and commission | 188,822 | 38,524 |
| Other income | 13,977 | |
| - | ||
| Loss for the year attributable to owners of the parent | (541,341) | |
| (11,906) | ||
| Loss for the year attributable to NCI | (216,840) | (11,439) |
| Loss for the year | (758,181) | (23,345) |
| Net cash from operating activities | 569,594 | 18,599 |
| Net cash used in investing activities | (9,373) | (267) |
| Net cash from financing activities | - | 95,247 |
| Net cash inflow | 560,221 | 113,579 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
104
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries (continued)
(c) Non-controlling interest (continued)
| 2022 | |||
| 31 Dec | |||
| 2022 | |||
| 31 Dec | |||
| 2022 | 31 Dec 2022 | ||
| Investrust Bank | |||
| Plc | |||
| Zambia Gold | |||
| Company | |||
| Limited | |||
| Central | |||
| African | |||
| Company | |||
| Limited | |||
| Non-current assets | 56,424 | 90,958 | - |
| Current assets | 2,041,326 | 31,350 | 15 |
| Total assets | 2,097,750 | 122,308 | 15 |
| Non-current liabilities | - | 16,448 | - |
| Current liabilities | 2,249,997 | 13,777 | - |
| Total liabilities | 2,249,997 | 30,225 | - |
| Equity attributable to owners of the parent | (116,118) | 101,950 | 748 |
| Equity attributable non-controlling interests | (36,129) | (9,867) | (733) |
| Revenue, investment income, fees and commission | 150,777 | 31 | - |
| Other income | 13,473 | 443 | |
| Loss for the year attributable to owners of the parent | (1,862) | (26,298) | - |
| Loss for the year attributable to NCI | (746) | (25,267) | - |
| Loss for the year | (2,608) | (51,565) | - |
| Net cash used in operating activities | (4,874) | (28,508) | - |
| Net cash used in investing activities | (342) | (6,855) | - |
| Net cash from financing activities | - | 1,547 | - |
| Net cash out flow | (5,216) | (33,816) | - |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
105
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
22 Investment in subsidiaries (continued)
(d) Derecognition of a subsidiary
During the year, a wholly owned subsidiary of ZCCM-IH, Mushe Milling Limited was declared insolvent and ceased
it operations. The Board of Directors resolved that Mushe be liquidated and a notice for a meeting to wind up
the company voluntarily be issued. Following the decision by the Directors of Mushe, the reminder of the assets
and liabilities were derecognised and written off.
The table below shows the assets and liabilities being derecognised.
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Mushe Milling | ||||
| Limited | ||||
| Central Afri- | ||||
| can Cement | ||||
| Limited | Total | |||
| Nkandabwe | ||||
| Coal Mine | ||||
| Limited | ||||
| Property, plant and equipment | 5,296 | - | 5,296 | - |
| Inventories | 144 | - | 144 | - |
| Cash and cash equivalents | 571 | - | 571 | 3 |
| Retirement benefits | (1,932) | - | (1,932) | (3,998) |
| Trade and other payables | (22,864) | - | (22,864) | - |
| Provisions | (1,187) | - | (1,187) | - |
| Current tax liabilities | (127) | - | (127) | - |
| Non-controlling interest | - | 733 | 733 | - |
| Net liabilities derecognised | (20,099) | 733 | (19,366) | (3,995) |
23 Investment in associates
(a) Reconciliation of carrying amounts
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Balance at 1 January | 15,174,862 | 17,067,159 | 16,256,411 | 20,603,089 |
| Share of profit of equity accounted | ||||
| associates | 2,261,209 | 1,603,143 | - | - |
| Share of other comprehensive income | 11,529 | 11,123 | - | - |
| Dividend received | (739,836) | (4,868,317) | - | - |
| Additions | 540,849 | - | 540,849 | - |
| Transfer to intangible assets (Note 19) * | (11,036,000) | - | (11,036,000) | - |
| Transfer from associate to receivable | (29,507) | - | (29,507) | - |
| Change in fair value (unrealised) | - | - | 5,508,327 | (4,346,678) |
| Currency translation adjustment | 3,907,834 | 1,361,754 | - | - |
| Total Balance | 10,090,940 | 15,174,862 | 11,240,080 | 16,256,411 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
106
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
23 Investment in associates (continued)
(a) Reconciliation of carrying amounts (continued)
* On 4
th
April 2023, ZCCM-IH Plc converted its dividend right in Kansanshi to a 3.10% Life of Mine Royalty Right.
Investments in associates are measured at fair value in the Company’s statement of financial position. In the
consolidated financial statements, investments in associates are equity - accounted.
The decrease in fair value from ZMW 16.26 million to ZMW11.24 million is largely on account of the transfer of
the investment in Kansanshi from Investment in associates to royalty right following the conversion of dividend
rights to royalty right at 3.1% of Kansanshi revenue of own mined minerals. The transaction was approved by the
shareholders at an extra ordinary general meeting on 31 March 2023.
Company
| Name | ||||
| Principal | ||||
| place of | ||||
| business | ||||
| Ownership | ||||
| interest | ||||
| Fair value of | ||||
| ownership interest | ||||
| ZMW’ million | ||||
| Functional | ||||
| currency | ||||
| Konkola Copper Mines Plc | Zambia | 20.60% | Nil | US$ |
| Kansanshi Mining Plc | Zambia | 20% | - | US$ |
| Copperbelt Energy Corporation Plc | Zambia | 31.07% | 3,579 | US$ |
| CNMC Luanshya Copper Mining limited | Zambia | 20% | 1,228 | US$ |
| Maamba Collieries Limited | Zambia | 35% | 5,066 | US$ |
| Lubambe Copper Mines Limited | Zambia | 20% | Nil | US$ |
| Rembrandt Properties Limited | Zambia | 49% | 20 | ZMW |
| Mingomba Mining Limited | Zambia | 20% | 1,328 | US$ |
The following are considered when determining the level of control or influence over the investee companies:
■ ZCCM-IH’s representation on the Board of the investee company
■ Appointment of key management staff
■ Number of voting rights
Currently ZCCM-IH appoints directors in line with its percentage holding on all the Boards of its associates except
for Kansanshi Mining Plc, and as such it exercise’s significant influence over them.
Many of the investee companies have United States Dollars (US$) as their functional currency, due to the nature
of the mining industry, although all investee companies are domiciled in Zambia.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
107
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(b) Investment in associates’ analysis
Group
Summary of financial information for material equity accounted investees.
Where the equity accounted value is zero, no further losses are recognised by ZCCM-IH as there is no obligation to settle any liabilities. The equity accounted
value was zero for Konkola Copper Mines Plc and Lubambe Copper Mines Limited as at 31 December 2023. There was no profit or loss from discontinued
operations.
| Dec-23 | |||||||||||||
| Investee companies | |||||||||||||
| Account- | |||||||||||||
| ing | |||||||||||||
| year end | |||||||||||||
| Country | |||||||||||||
| of incor- | |||||||||||||
| poration | |||||||||||||
| % interest | |||||||||||||
| held | |||||||||||||
| Assets | |||||||||||||
| Current | |||||||||||||
| Non- | |||||||||||||
| Current | |||||||||||||
| Assets | |||||||||||||
| Liabilities | |||||||||||||
| Current | |||||||||||||
| Liabilities | |||||||||||||
| Non-Current | |||||||||||||
| Net assets | |||||||||||||
| Value | Revenues | ||||||||||||
| Profit/ | |||||||||||||
| (Loss) | |||||||||||||
| Share of | |||||||||||||
| profit/(loss) | |||||||||||||
| Share of | |||||||||||||
| profit/(loss) | |||||||||||||
| not rec- | |||||||||||||
| ognised | |||||||||||||
| Share of net | |||||||||||||
| assets | |||||||||||||
| ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ||||
| Copperbelt Energy | |||||||||||||
| Corporation Plc | |||||||||||||
| 31-Dec | Zambia | 31.07% | |||||||||||
| 4,631,023 | 12,764,059 | (1,093,634) | (5,597,083) | 10,704,365 | 7,845,760 | 2,825,126 | 877,767 | - | 3,325,846 | ||||
| CNMC Luanshya | |||||||||||||
| Copper Mine Plc | |||||||||||||
| 31-Dec | Zambia | 20.0% | |||||||||||
| 5,418,840 | 4,345,211 | (3,234,867) | (247,733) | 6,281,451 | 8,492,866 | 2,929,081 | 585,816 | - | 1,256,290 | ||||
| Maamba Collieries | |||||||||||||
| Limited | |||||||||||||
| 31-Mar | Zambia | 35.0% | |||||||||||
| 8,816,113 | 12,170,941 | (2,657,654) | (6,495,708) | 11,833,692 | 5,001,542 | 2,566,315 | 898,210 | - | 4,141,792 | ||||
| Lubambe Copper | |||||||||||||
| Mines Limited | |||||||||||||
| 31-Dec | Zambia | 20.0% | |||||||||||
| 1,782,150 | 5,683,344 | (3,563,927) | (22,544,188) | (18,642,621) | 2,516,011 | (3,055,266) | - | (611,053) | - | ||||
| Rembrandt Proper- | |||||||||||||
| ties Ltd | |||||||||||||
| 31-Dec | Zambia | 49.0% | |||||||||||
| 5,774 | 156,648 | (37,643) | (44,476) | 80,303 | 14,768 | (2,468) | (1,209) | - | 39,348 | ||||
| Mingomba Mining | |||||||||||||
| Limited | |||||||||||||
| 31-Dec | Zambia | 20.0% | |||||||||||
| 5,808 | 6,652,908 | (20,396) | - | 6,638,320 | - | (496,875) | (99,375) | - | 1,327,664 | ||||
| Total | |||||||||||||
| 20,659,708 | 41,773,111 | (10,608,121) | (34,929,188) | 16,895,510 | 23,870,947 | 4,765,913 | 2,261,209 | (611,053) | 10,090,840 |
The financial statements of the Company and associates used in the preparation of the current consolidated financial statements have the same reporting
date of 31 December except for Maamba Collieries and Konkola Copper Mine. For the two-investee companies with different reporting date from that of the
Company, their financial information has been adjusted to align to the reporting date of the consolidated financial statements.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
108
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(b) Investment in associates’ analysis (continued)
Group
Summary of financial information for material equity accounted investees.
| Dec-22 | |||||||||||||
| Account- | |||||||||||||
| ing year | |||||||||||||
| end | |||||||||||||
| Country | |||||||||||||
| of incor- | |||||||||||||
| poration | |||||||||||||
| % | |||||||||||||
| Interest | |||||||||||||
| held | |||||||||||||
| Current | |||||||||||||
| Assets | |||||||||||||
| Non-Cur- | |||||||||||||
| rent Assets | |||||||||||||
| Current | |||||||||||||
| Liabilities | |||||||||||||
| Non-Current | |||||||||||||
| Liabilities | |||||||||||||
| Net asset | |||||||||||||
| value | Revenues | Profit/(Loss) | |||||||||||
| Share of | |||||||||||||
| profit/(loss) | |||||||||||||
| Share of | |||||||||||||
| profit/(loss) | |||||||||||||
| not rec- | |||||||||||||
| ognised | |||||||||||||
| Share of net | |||||||||||||
| assets | |||||||||||||
| ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | ||||
| Kansanshi Mining | |||||||||||||
| Plc | |||||||||||||
| 31-Dec | Zambia | 20.00% | 19,373,853 | 47,737,850 | (2,260,408) | (9,994,207) | 54,857,088 | 25,982,597 | 2,624,472 | 524,894 | - | 10,971,418 | |
| Copperbelt Energy | |||||||||||||
| Corporation Plc | |||||||||||||
| 31-Dec | Zambia | 24.10% | 2,731,650 | 9,224,557 | (3,103,983) | (2,866,881) | 5,985,343 | 6,384,202 | 866,413 | 208,806 | - | 1,442,468 | |
| CNMC Luanshya | |||||||||||||
| Copper Mine Plc | |||||||||||||
| 31-Dec | Zambia | 20.00% | 3,454,653 | 3,027,188 | (2,441,601) | (1,058,147) | 2,982,093 | 7,949,648 | 1,683,023 | 336,605 | - | 596,419 | |
| Maamba Collieries | |||||||||||||
| Ltd | |||||||||||||
| 31-Mar | Zambia | 35.00% | 12,192,257 | 8,669,716 | (4,760,267) | (10,052,793) | 6,048,913 | 4,751,431 | 1,533,668 | 536,784 | |||
| - | |||||||||||||
| 2,117,120 | |||||||||||||
| Lubambe Copper | |||||||||||||
| Mines Ltd | |||||||||||||
| 31-Dec | Zambia | 20.00% | 1,374,664 | 4,203,226 | (2,192,239) | (14,071,280) | (10,685,629) | 2,382,201 | (1,826,317) | - | (365,263) | - | |
| Rembrandt Proper- | |||||||||||||
| ties Ltd | |||||||||||||
| 31-Dec | Zambia | 49.00% | 14 | 150,305 | (27,126) | (51,818) | 71,375 | - | - | - | |||
| - | |||||||||||||
| 34,974 | |||||||||||||
| Zambia Con- | |||||||||||||
| solidated Gold | |||||||||||||
| Company Ltd | |||||||||||||
| 31-Dec | Zambia | 45.00% | 521 | 36,554 | (9,380) | - | 27,695 | 50,810 | (8,768) | (3,946) | - | 12,463 | |
| Totals | 39,127,612 | 73,049,396 | (14,795,004) | (38,095,126) | 59,286,878 | 47,500,889 | 4,872,491 | 1,603,143 | (365,263) | 15,174,862 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
109
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(b) Investments in associates’ analysis (continued)
Company
Summary of fair values for equity accounted investees held by the Company:
| % Interest | |||||
| 31 Dec | |||||
| 2023 | % Interest | ||||
| 31 Dec | |||||
| 2022 | |||||
| Copperbelt Energy Corporation Plc | c(i) | 31.07 | 3,579,268 | 24.1 | 1,480,987 |
| Kansanshi Mining Plc (note 19) | 20.0 | - | 20.0 | 11,036,000 | |
| Konkola Copper Mines Plc | c(iv) | 20.6 | - | 20.6 | - |
| Lubambe Copper Mines Limited | c(v) | 20.0 | - | 20.0 | - |
| Maamba Collieries Limited | c(ii) | 35.0 | 5,066,300 | 35.0 | 2,965,600 |
| CNMC Luanshya Copper Mines Plc | c(iii) | 20.0 | 1,227,500 | 20.0 | 744,000 |
| Rembrandt Properties Limited | c(vi) | 49.0 | 39,348 | 49.0 | 20,324 |
| Zambia Consolidated Gold Company | c(viii) | ||||
| 49.0 | - | 49.0 | 9,500 | ||
| Mingomba Mining Limited | c(vii) | 20.0 | 1,327,664 | - | - |
| 11,240,080 | 16,256,411 |
New investments:
■ During the period under review ZCCM-IH increased its shareholding in Copperbelt Energy Corporation
Plc (“CEC”) from 24.1% held since 2018, to 31.07%. The increase was influenced by our strategic drive
to maximize shareholder value in profitable and viable ventures; coupled with the confidence in CEC’s
projected business growth arising from its expansion into renewable energy.
■ Mingomba Mining Limited is a partnership between Mingomba Holdings Limited 52%, EMR Capital, 28%,
and ZCCM-IH, 20%. MML was established in 2023 and is currently undertaking a drilling programme in
the Mingomba license area in Chililabombwe, a tenement close to the Konkola Copper Mine (“KCM”)
and the Democratic Republic of Congo border area which was previously a part of the Lubambe mine
licence area. Kobold is using Artificial Intelligence (“A.I”) computer-based techniques in the exploration
process, which will help fast track the process to orebody definition and thereafter, mine development.
So far, Kobold has drilled a total of about 32,322 metres in sixteen drill holes as at end of December 2023.
■ On 4th April 2023, ZCCM-IH Plc converted its ordinary equity holding in Kansanshi to a 3.10% Life of Mine
Royalty Right. Following this conversion which resulted in loss of significant influence, management made
an assessment and reclassified int investments in Kansanshi from associate to fair value through profit or
loss.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
110
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(c) Measurement of fair value
Fair value hierarchy
The fair values of the Company’s investment in associates were determined by Stock Brokers Zambia, an external
independent fair valuation expert, having appropriate recognised professional qualifications and experience.
The independent valuers provide the fair value of the Company’s associates annually. The fair value moved
from ZMW16.26 billion in December 2022 to ZMW11.24 billion in December 2023.
The fair value measurement for the Company’s investment in associates of ZMW7,661 million (2022: ZMW14,775
million) has been categorised as a level 3 fair value based on the inputs to the valuation technique used (see
Note 4 (c)).
For Copperbelt Energy Corporation Plc, ZMW3,579 million (2022: ZMW1,481 million) has been categorised as a level
1 based on quoted market prices .
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
111
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(c) Measurement of fair value (continued)
The following table shows a reconciliation from the opening balances to the closing balances for level 2 and 3 fair
values.
Company
| Level 1 | Level 3 | Total | |
| Balance at 1 January 2023 | |||
| Kansanshi Mining Plc | |||
| - | 11,036,000 | 11,036,000 | |
| Copperbelt Energy Corporation Plc | |||
| 1,480,987 | - | 1,480,987 | |
| CNMC Luanshya Copper Mine Plc | |||
| - | 744,000 | 744,000 | |
| Maamba Collieries Limited | |||
| - | 2,965,600 | 2,965,600 | |
| Rembrandt Properties Ltd | |||
| - | 20,324 | 20,324 | |
| Consolidated Gold Company of Zambia | |||
| Limited | - | 9,500 | 9,500 |
| 1,480,987 | 14,775,424 | 16,256,411 | |
| Fair value movement | |||
| Kansanshi Mining Plc | |||
| - | - | - | |
| Copperbelt Energy Corporation Plc | |||
| 1,557,423 | - | 1,557,423 | |
| CNMC Luanshya Copper Mine Plc | |||
| - | 483,500 | 483,500 | |
| Rembrandt Properties Ltd | |||
| - | 19,024 | 19,024 | |
| Maamba Collieries Limited | |||
| - | 2,100,700 | 2,100,700 | |
| 1,557,423 | 2,603,224 | 4,160,647 | |
| Additions/ Transfer | |||
| Copperbelt Energy Corporation Plc | 540,858 | - | 540,858 |
| Consolidated Gold Company of Zambia Limited | - | (9,500) | (9,500) |
| Mingomba Mining Limited | - | 1,327,664 | 1,327,664 |
| Kansanshi Mining Plc | - | (11,036,000) | (11,036,000) |
| 540,858 | |||
| (9,717,836) | (9,176,978) | ||
| Balance at 31 December 2023 | |||
| Kansanshi Mining Plc | |||
| - | - | - | |
| Copperbelt Energy Corporation Plc | |||
| 3,579,268 | - | 3,579,268 | |
| CNMC Luanshya Copper Mine Plc | |||
| - | 1,227,500 | 1,227,500 | |
| Maamba Collieries Limited | |||
| - | 5,066,300 | 5,066,300 | |
| Rembrandt Properties Ltd | |||
| - | 39,348 | 39,348 | |
| Mingomba Mining Limited | |||
| - | 1,327,664 | 1,327,664 | |
| 3,579,268 | 7,660,812 | 11,240,080 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
112
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(c) Measurement of fair value (continued)
Company
| Level 1 | Level 3 | Total | |
| Balance at 1 January 2022 | |||
| Kansanshi Mining Plc | |||
| - | 15,799,000 | 15,799,000 | |
| Copperbelt Energy Corporation Plc | |||
| 1,038,258 | - | 1,038,258 | |
| CNMC Luanshya Copper Mine Plc | |||
| - | 1,513,000 | 1,513,000 | |
| Maamba Collieries Limited | |||
| - | 2,203,000 | 2,203,000 | |
| Rembrandt Properties Ltd | |||
| - | 20,324 | 20,324 | |
| Consolidated Gold Company of Zambia | |||
| Limited | - | 29,507 | 29,507 |
| 1,038,258 | 19,564,831 | 20,603,089 | |
| Fair value movement | |||
| Kansanshi Mining Plc | - | ||
| (4,763,000) | (4,763,000) | ||
| Copperbelt Energy Corporation Plc | 442,729 | ||
| - | 442,729 | ||
| CNMC Luanshya Copper Mine Plc | - | ||
| (769,000) | (769,000) | ||
| Maamba Collieries Limited | - | ||
| 762,600 | 762,600 | ||
| Consolidated Gold Company of Zambia Limited | |||
| - | (20,007) | (20,007) | |
| 442,729 | (4,789,407) | (4,346,678) | |
| Balance at 31 December 2022 | |||
| Kansanshi Mining Plc | |||
| - | 11,036,000 | 11,036,000 | |
| Copperbelt Energy Corporation Plc | |||
| 1,480,987 | - | 1,480,987 | |
| CNMC Luanshya Copper Mine Plc | |||
| - | 744,000 | 744,000 | |
| Maamba Collieries Limited | |||
| - | 2,965,600 | 2,965,600 | |
| Rembrandt Properties Ltd | |||
| - | 20,324 | 20,324 | |
| Consolidated Gold Company of Zambia | |||
| Limited | - | 9,500 | 9,500 |
| 1,480,987 | 14,775,424 | 16,256,411 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
113
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(c) Measurement of fair value (continued)
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment in associates as
well as the significant unobservable inputs used.
| Associate | Valuation technique | Significant unobservable inputs and key assumptions | |
| Inter-relationship between Key | |||
| unobservable inputs and fair | |||
| value measurement | |||
| Maamba | |||
| Collieries | |||
| Discounted cash flows: It is an | |||
| income approach to valuation | |||
| and the most widely used valuation | |||
| methodology. It computes the value | |||
| of a business by calculating the | |||
| present value of anticipated future | |||
| cash flows generated by the business. | |||
| The expected net cash flows are | |||
| discounted using risk adjusted discount | |||
| rates. | |||
| There has been no changes to the | |||
| valuation technique applied in the | |||
| prior year. | |||
| Relative valuation: | |||
| The relative valuation methodology | |||
| values a company using market-based | |||
| multiples, including operational and | |||
| asset-based metrics. | |||
| ■Target participation capital structure | |||
| ▯Debt to total capitalisation (2023: 36.7%, 2022: 36.7%). | |||
| ▯Equity to total capitalisation (2023:63.4%, 2022: 63.4%) | |||
| ■Cost of debt | |||
| ▯Cost of debt (2023: 11.90%, 2022: 10.20%) | |||
| ▯Effective tax rate (2023:30 %, 2022: 30%) | |||
| ▯After tax cost of debt (2023: 8.34%, 2022: 7.28%) | |||
| ■Cost of equity | |||
| ▯Risk free rate (2023:3.88 %, 2022: 3.88 %) | |||
| ▯Market risk premium (2023: 19.2 %, 2022: 26.7 %) | |||
| ▯Unlevered beta (2023: 0.53, 2022: 0.34) | |||
| ■Cost of equity (2023: 18.2%, 2022: 16.6%) | |||
| WACC (2023: 13.20, 2022: 13.20%) | |||
| ■The assumptions considered were as follows: | |||
| ▯PPA is valid until 2036 | |||
| ▯The MRT on coal is projected at 5% throughout the | |||
| forecast period | |||
| ▯ Plant Availability is assumed to be 85%. For the years | |||
| 2025, 2029 and 2033, plant availability is reduced by | |||
| 10.38% to allow for major rehabilitation works. | |||
| ▯ Projected to produce an annual average of 1.9 million | |||
| MWH | |||
| ▯ Projected to mine an annual average of 500,000 tonnes | |||
| of high-grade coal | |||
| ▯ Projected to mine an annual average of 1.52 million | |||
| tonnes of thermal coal | |||
| The estimated fair value would | |||
| increase /(decrease) if: | |||
| ■ Equity to total capitalisation | |||
| were (lower)/higher | |||
| ■ Cost of debt were (higher)/ | |||
| lower | |||
| ■ The cost of equity were | |||
| (lower)/higher | |||
| ■ Coal sales prices increase/ | |||
| decrease. | |||
| ■ Capital Expenditure | |||
| increase/decrease |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
114
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of kwacha
23 Investment in associates (continued)
(c) Measurement of fair value (continued)
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment in associates as well as the significant unobservable inputs used.
| Associate | Valuation technique | Significant unobservable inputs and key assumptions | |
| Inter-relationship between Key | |||
| unobservable inputs and fair value | |||
| measurement | |||
| CNMC | |||
| Luanshya | |||
| Copper | |||
| Mines Plc | |||
| Discounted cash flows: It | |||
| is an income approach | |||
| to valuation and the most | |||
| widely used valuation | |||
| methodology. It computes | |||
| the value of a business by | |||
| calculating the present | |||
| value of anticipated future | |||
| cash flows generated | |||
| by the business. The | |||
| expected net cash flows | |||
| are discounted using risk | |||
| adjusted discount rates. | |||
| ■Target participation capital structure | |||
| ▯Debt to total capitalisation (2023: 26.00%, 2022: 21.00%) | |||
| ▯Equity to total capitalisation (2023: 74.00%, 2022: 79.00%) | |||
| ■Cost of debt | |||
| ▯Cost of debt (2023: 7.00%, 2022: 7.00%) | |||
| ▯Effective tax rate (2023: 30%, 2022: 30%) | |||
| ▯After tax cost of debt (2023: 4.90%, 2022: 4.90%) | |||
| ■Cost of equity | |||
| ▯Risk free rate (2023: 3.88%, 2022: 3.88%) | |||
| ▯Market risk premium (2023: 9.72%, 2022: 13.19%) | |||
| - | ▯Levered beta (2023: 1.10, 2022: 1.16). | ||
| ▯Cost of equity (2023:14.54%, 2022: 19.21%) | |||
| ■WACC (2023: 12.03%, 2022: 16.21%) | |||
| ■Key assumptions considered were as follows: | |||
| ▯Mineral Royalty tax is assumed as follows for copper (a sliding scale – from | |||
| 4% to 10%, with the higher bands being: 10% for Cu price over US$7,000/t. | |||
| Mineral royalty is treated as deductible from income tax from 2023 | |||
| onwards. | |||
| ▯ The MRT for gold revenue is assumed at a fixed rate of 6% and is treated | |||
| as deductible from income tax from 2023 onwards. | |||
| ▯ Copper prices is projected at US$8,482 per ton in 2023 and steadily | |||
| increase to US$8,501 per ton in 2024. Gold prices projected at US$1,940/ | |||
| oz in 2023 and to steadily decrease to US$1,915/ oz in 2024. After 2024, | |||
| Copper and Gold prices projected at flat rate of US$1.566/oz and | |||
| US$8,303 per ton respectively. | |||
| ▯ Capex expenditure has been projected at US$ 177 million over the life of | |||
| mine | |||
| ▯ Life of mine was estimated to be 7 years. | |||
| The estimated fair value would | |||
| increase/decrease if: | |||
| ■ Equity to total capitalisation | |||
| were lower/higher | |||
| ■ Cost of debt were lower/ | |||
| higher | |||
| ■ The cost of equity were lower/ | |||
| higher. | |||
| ■ If the copper price reduced/ | |||
| increased the fair value would | |||
| be lower/higher. |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
115
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(c) Measurement of fair value (continued)
(i) Copperbelt Energy Corporation Plc (CEC)
CEC is listed on Lusaka Securities Exchange (LuSE) and consequently the valuation was based on the spot price
and has been categorised as level 1 as shown below:
| Mark to market | ||
| 31-Dec | 31-Dec | |
| 2023 | 2022 | |
| Details | ||
| Spot price per share at 31 December (ZMW) | 7.09 | 3.78 |
| Number of issued shares owned | 504,833,325 | 391,795,562 |
| Market value (ZMW’000) | 3,579,268 | 1,480,987 |
CEC categorised as a level 1 based on the quoted market price on the Lusaka Securities Exchange.
(ii) Maamba Collieries Limited
A sensitivity analysis table of the equity value, which is based on the discount rate over the life of power plant
indicating reasonably possible changes at the reporting date to one of the relevant valuation assumptions,
holding other assumptions constant, would have affected the value of the investment by the amounts shown
below:
2023
| MRT AND ERB FEES | ||||||
| 5.1% | 5.4% | 5.7% | 6.0% | 6.3% | ||
| WACC | ||||||
| 13.1% | 5,385,000 | 5,382,000 | 5,379,000 | 5,376,000 | 5,374,000 | |
| 13.9% | 5,224,000 | 5,222,000 | 5,219,000 | 5,216,000 | 5,213,000 | |
| 14.6% | 5,072,000 | 5,069,000 | 5,066,300 | 5,064,000 | 5,061,000 | |
| 15.3% | 4,927,000 | 4,924,000 | 4,922,000 | 4,919,000 | 4,916,000 | |
| 16.0% | 4,789,000 | 4,786,000 | 4,784,000 | 4,781,000 | 4,779,000 |
The equity value ranges from ZMW4,924 million (2022: ZMW2,843 million) to ZMW5,216 million (2022: ZMW3,094
million) with the calculated equity value being ZMW5,066 million (2022: ZMW2,966 million).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
116
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(c) Measurement of fair value (continued)
(ii) Maamba Collieries Limited (continued)
2022
| MRT AND ERB FEES | ||||||
| 5.13% | 5.42% | 5.70% | 5.99% | 6.27% | ||
| WACC | ||||||
| 11.9% | 3,236,000 | 3,235,000 | 3,233,000 | 3,231,000 | 3,229,000 | |
| 12.5% | 3,099,000 | 3,098,000 | 3,096,000 | 3,094,000 | 3,093,000 | |
| 13.2% | 2,969,000 | 2,967,000 | 2,965,600 | 2,964,000 | 2,962,000 | |
| 13.9% | 2,845,000 | 2,843,000 | 2,842,000 | 2,840,000 | 2,838,000 | |
| 14.5% | 2,726,000 | 2,725,000 | 2,723,000 | 2,722,000 | 2,720,000 |
The equity value ranges from ZMW2,843 million (2021: ZMW2,088 million) to ZMW3,094 million (2021: ZMW2,324
million) with the calculated equity value being ZMW2,966 million (2021: ZMW2,203 million).
(iii) CNMC Luanshya Copper Mines Plc
A sensitivity analysis table of the equity value, which is based on the discount rate over the life of mine indicating
reasonably possible changes at the reporting date to one of the relevant valuation assumptions, holding other
assumptions constant, would have affected the value of the investment by the amounts shown below:
2023
| Equity Value Sensitivity Analysis | ||||||
| Long-Term Copper Price (US$ / lb) | ||||||
| 3.40 | 3.58 | 3.77 | 3.95 | 4.15 | ||
| WACC | ||||||
| 13.4% | 801,000 | 1,048,000 | 1,308,000 | 1,568,000 | 1,841,000 | |
| 14.1% | 772,000 | 1,013,000 | 1,268,000 | 1,522,000 | 1,790,000 | |
| 14.9% | 743,000 | 979,000 | 1,227,500 | 1,476,000 | 1,737,000 | |
| 15.6% | 715,000 | 946,000 | 1,189,000 | 1,432,000 | 1,687,000 | |
| 16.4% | 688,000 | 913,000 | 1,151,000 | 1,388,000 | 1,637,000 |
The equity value ranges from ZMW946 million (2022: ZMW637million) to ZMW1,522 million (2022: ZMW854 million)
with the calculated equity value being ZMW1,228 million (2022: ZMW744 million).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
117
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
23 Investment in associates (continued)
(c) Measurement of fair value (continued)
(iii) CNMC Luanshya Copper Mines Plc
2022
| Equity Value Sensitivity Analysis | ||||||
| Long-Term Copper Price (US$ / lb) | ||||||
| 3.72 | 3.91 | 4.12 | 4.33 | 4.54 | ||
| WACC | ||||||
| 14.6% | 557,000 | 655,000 | 759,000 | 862,000 | 971,000 | |
| 15.4% | 552,000 | 649,000 | 751,000 | 854,000 | 961,000 | |
| 16.2% | 547,000 | 643,000 | 744,000 | 845,000 | 951,000 | |
| 17.0% | 543,000 | 637,000 | 737,000 | 836,000 | 941,000 | |
| 17.9% | 538,000 | 631,000 | 729,000 | 827,000 | 930,000 |
The equity value ranges from ZMW637 million (2021: ZMW1,352 million) to ZMW854 million (2021: ZMW1,654 million)
with the calculated equity value being ZMW744 million (2021: ZMW1,513 million).
(iv) Konkola Copper Mines Plc (KCM)
The equity value is nil (negative equity value is limited to a zero-value due to the limited liability nature of the
investee company) (2022: nil).
(v) Lubambe Copper Mine Limited
The equity value is nil (negative equity value is limited to a zero-value due to the limited liability nature of the
investee company) (2022: nil).
(vi) Rembrandt Properties Limited
The equity value is ZMW39.35 million (2022: ZMW20.32 million)
| Associate | |||
| Valuation tech- | |||
| nique | |||
| Significant | |||
| unobservable | |||
| inputs and key | |||
| assumptions | |||
| Inter-relationship between Key unobservable | |||
| inputs and fair value measurement | |||
| Rembrandt Proper- | |||
| ties Limited | |||
| Net asset value | |||
| approach | |||
| The values of | |||
| the assets and | |||
| liabilities | |||
| Increase/(decrease) in assets would increase/ | |||
| (decrease) the fair value | |||
| decrease/(increase) in liabilities would | |||
| increase/(decrease) the fair value |
(vii) Mingomba Mining Limited
The equity value is ZMW1.3 billion (2022: nil).
(viii) Consolidated Gold Company Limited (CGCL)
No equity value has been determined for ZCG as the interest in the company was disposed off during the year.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
118
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
24 Financial assets at fair value through profit or loss
(a) Reconciliation of carrying amounts
| Group and Company | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Balance at 1 January | 1,252,400 | 1,458,000 |
| Changes in fair value (unrealised) | 1,767,100 | (205,600) |
| 3,019,500 | 1,252,400 |
Financial assets at fair value through profit or loss include the following:
| Group and Company | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Unlisted equities – at fair value |
| Chibuluma Mines Plc | b(i) | - | - |
| Chambishi Metals PLC | b(ii) | - | - |
| NFC Africa Mine PLC | b(iii) | 3,019,500 | 1,252,400 |
| 3,019,500 | 1,252,400 |
(b) Measurement of fair value
Fair value hierarchy
The fair value for the Company’s financial investments at fair value through profit or loss was determined by
Stock Brokers Zambia (“SBZ”), an external independent valuer, having appropriate recognised professional
qualifications and recent experience of the financial investments being valued. The independent valuers
provide the fair value of these investments annually.
The fair value measurement for the Company’s investments of ZMW 3.02 billion (2022: ZMW 1.25 billion) has been
categorised as a level 3 fair value based on the inputs to the valuation technique used.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
119
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
24 Financial assets at fair value through profit or loss (continued)
(b) Measurement of fair value (continued)
Level 3 fair value
The following table shows a reconciliation from the opening balances to the closing balances for level 3 fair values.
Group and Company
| 31 Dec 2023 | Level 3 | Total |
| Balance at 1 January | 1,252,400 | 1,252,400 |
| Transfer from associated | - | - |
| Net change in fair value | 1,767,100 | 1,767,100 |
| Balance at 31 December | 3,019,500 | 3,019,500 |
| 31 Dec 2022 | Level 3 | Total |
| Balance at 1 January | 1,458,000 | 1,458,000 |
| Net change in fair value | (205,600) | (205,600) |
| Balance at 31 December | 1,252,400 | 1,252,400 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
120
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
in thousands of Kwacha
24 Financial assets at fair value through profit or loss (continued)
(b) Measurement of fair value (continued)
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment in associates as well as the significant unobservable inputs used.
| Associate | Valuation technique | Significant unobservable inputs and key assumptions | |
| Inter-relationship between Key | |||
| unobservable inputs and fair | |||
| value measurement | |||
| NFC Africa | |||
| Mine | |||
| Discounted cash flows: It | |||
| is an income approach | |||
| to valuation and the most | |||
| widely used valuation | |||
| methodology. It computes | |||
| the value of a business by | |||
| calculating the present | |||
| value of anticipated future | |||
| cash flows generated by the | |||
| business. The expected net | |||
| cash flows are discounted | |||
| using risk adjusted discount | |||
| rates. | |||
| Relative valuation: | |||
| The relative valuation | |||
| methodology values a | |||
| company using market- | |||
| based multiples, including | |||
| operational and asset-based | |||
| metrics. | |||
| ■ Target participation capital structure | |||
| ▯ | Debt to total capitalisation (2023:26.2%, 2022: 21.0%). | ||
| ▯ | Equity to total capitalisation (2023:73.8%, 2022:79.0%) | ||
| ■ Cost of debt | |||
| ▯ Cost of debt (2023: 10.0%, 2022: 10.0%) | |||
| ▯ | Effective tax rate (2023: 30%, 2022: 30%) | ||
| ▯ | After tax cost of debt (2023: 7.0%, 2022: 7.0%) | ||
| ■ Cost of equity | |||
| ▯ | Risk free rate (2023: 3.9%, 2022: 3.9%) | ||
| ▯ | Market risk premium (2023: 9.72%, 2022: 13.2%) | ||
| ▯ | Levered beta (2023: 1.53, 2022: 1.16). | ||
| ▯ | Cost of equity (2023:18.7%, 2022: 19.2%) | ||
| ■ WACC (2023: 15.6%, 2022: 16.6%) | |||
| ■ | Key assumptions considered were as follows: | ||
| ▯ | Mineral Royalty tax is assumed as follows for copper (a sliding scale – from | ||
| 4% to 10%, with the higher bands being: 10% for Cu price over US$7,000/t. | |||
| Mineral royalty is treated as deductible from income tax from 2023 | |||
| onwards. | |||
| ▯ The MRT for gold revenue is assumed at a fixed rate of 6% and is treated | |||
| as deductible from income tax from 2023 onwards. | |||
| ▯ Copper prices is projected at US$8,482 per ton in 2023 and steadily | |||
| increase to US$8,501 per ton in 2024. Gold prices projected at US$1,940/ | |||
| oz in 2023 and to steadily decrease to US$1,915/ oz in 2024. After 2024, | |||
| Copper and Gold prices projected at flat rate of US$1.566/oz and | |||
| US$8,303 per ton respectively. | |||
| ▯ Capex expenditure has been projected at US$3.1 billion over the life of | |||
| mine budget incorporating the S3 expansion. | |||
| ▯ Life of mine was estimated to be 13 years. | |||
| The estimated fair value would | |||
| increase/(decrease) if: | |||
| ■ Equity to total capitalisation | |||
| were (lower)/higher | |||
| ■ Cost of debt were higher/ | |||
| (lower) | |||
| ■ The cost of equity were | |||
| higher /(lower). | |||
| ■ If the copper price | |||
| reduced/ increased the | |||
| fair value would be higher/ | |||
| (lower). |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
121
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
24 Financial assets at fair value through profit or loss (continued)
(b) Measurement of fair value (continued)
(i) Chibuluma Mines Plc
The equity value is nil (negative equity value is limited to a zero-value due to the limited liability nature of the
investee company) (2022: nil).
(ii) Chambishi Metals Plc
The equity value is nil (negative equity value is limited to a zero-value due to the limited liability nature of the
investee company) (2022: nil).
(iii) NFC Africa Mines Plc
A sensitivity analysis table of the equity value, which is based on the discount rate and long-term average
copper price over the life of mine indicating reasonably possible changes at the reporting date to one of the
relevant valuation assumptions, holding other assumptions constant, would have affected the value of the
investment by the amounts shown below:
2023
| Equity Value Sensitivity Analysis | ||||||
| Long-Term Average Copper Price (US$/lb) | ||||||
| 3.39 | 3.58 | 3.77 | 3.95 | 4.14 | ||
| WACC | ||||||
| 11.6% | 3,378,000 | 3,557,000 | 3,736,000 | 3,915,000 | 4,094,000 | |
| 13.6% | 3,049,000 | 3,200,000 | 3,352,000 | 3,504,000 | 3,656,000 | |
| 15.6% | 2,761,000 | 2,890,000 | 3,019,500 | 3,149,000 | 3,278,000 | |
| 17.6% | 2,509,000 | 2,619,000 | 2,730,000 | 2,840,000 | 2,951,000 | |
| 19.6% | 2,286,000 | 2,381,000 | 2,476000 | 2,571,000 | 2,665,000 |
The equity value ranges from ZMW2, 619 million (2022: ZMW 983 million) to ZMW3,504 million (2022: ZMW1,580
million with the calculated equity value being ZMW3,020 million (2022: ZMW1,252 million).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
122
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
24 Financial assets at fair value through profit or loss (continued)
(b) Measurement of fair value (continued)
(iii) NFC African Mines Plc (continued)
2022
| Equity Value Sensitivity Analysis | ||||||
| Long-Term Average Copper Price (US$/lb) | ||||||
| 3.71 | 3.91 | 4.12 | 4.33 | 4.53 | 3.71 | |
| WACC | ||||||
| 12.0% | 1,451,000 | 1,584,000 | 1,716,000 | 1,849,000 | 1,981,000 | |
| 13.3% | 1,240,000 | 1,353,000 | 1,467,000 | 1,580,000 | 1,694,000 | |
| 14.0% | 1,057,000 | 1,155,000 | 1,252,400 | 1,350,000 | 1,447,000 | |
| 14.7% | 899,000 | 983,000 | 1,067,000 | 1,151,000 | 1,235,000 | |
| 16.2% | 760,000 | 833,000 | 906,000 | 979,000 | 1,052,000 |
The equity value ranges from ZMW 983 million (2021: ZMW1,220 million) to ZMW1,580 million (2021: ZMW1,746
million) with the calculated equity value being ZMW1,252 million (2021: ZMW1,458 million).
25 Inventories
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Consumable stores | 11,686 | 764,324 | - | - |
| Production stock | 14,659 | 4,062,702 | - | - |
| Stockpiles | 4,440 | 39,112 | - | - |
| Gold nuggets | - | 43,928 | - | 16,427 |
| Gemstones | 7,514 | 11,300 | - | - |
| Balance at 31 December | 38,299 | 4,921,366 | - | 16,427 |
The cost of inventories recognised as an expense and included in the cost of sales amounted to ZMW2,145 million
(2022: ZMW1,527 million. The expensed amounts include ZMW2,072 million (2022: ZMW1,483 million) relating to
Mopani which is classified as held for sale. The amount of inventory write down recognised as cost of sales
amounted to ZMW1.34 billion (2022: ZMW5.86 billion).
Assets pledged as security
Refer to note 39 (ii) for information on current assets pledged as security by the Group.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
123
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
26 Trade and other receivables
Group
Dec 2023
| Current | Gross | ||
| Expected | |||
| credit loss/ | |||
| Impairment | Net | ||
| Trade receivables | 51,455 | (12,601) | 38,854 |
| Dividend receivable | 124,970 | (78,066) | 46,904 |
| Prepayments | 31,409 | (217) | 31,192 |
| VAT receivable | 5,971 | (655) | 5,316 |
| Other receivables | 76,959 | (44,799) | 32,160 |
| Amounts due from related parties (note 38b (vi)) | 497,669 | (312,926) | 184,743 |
| Price participation receivable (see note 38b (vi)) | 9,182 | (9,182) | - |
| Total current receivables | 797,615 | (458,446) | 339,169 |
| Non-current | |||
| Amounts due from related parties (note 38b(vi)) | 2,338,515 | (709,678) | 1,628,837 |
| Total non-current receivables | 2,338,515 | (709,678) | 1,628,837 |
| Total balance | 3,136,130 | (1,168,124) | 1,968,006 |
Group
Dec 2022
| Current | Gross | ||
| Expected | |||
| credit loss/ | |||
| Impairment | Net | ||
| Trade receivables | 367,646 | (6,557) | 361,089 |
| Dividend receivable | 186,381 | (78,174) | 108,207 |
| Prepayments | 150,653 | (152) | 150,501 |
| VAT receivable | 5,358 | (170) | 5,188 |
| Other receivables | 143,088 | (40,903) | 102,185 |
| Amounts due from related parties (note 38b (vi)) | 36,830 | (1,169) | 35,661 |
| Price participation receivable (see note 38b (vi)) | 9,182 | (9,182) | - |
| Total current receivables | 899,138 | (136,307) | 762,831 |
| Non-current | |||
| VAT receivable* | 3,659,482 | (1,595,766) | 2,063,716 |
| Amounts due from related parties (note 38b(vi)) | 1,819,475 | (951,652) | 867,823 |
| Total non-current receivables | 5,478,957 | (2,547,418) | 2,931,539 |
| Total balance | 6,378,095 | (2,683,725) | 3,694,370 |
Assets pledged as security
Refer to note 39 (ii) for information on current assets pledged as security by the Group.
VAT receivable
The expected credit loss on VAT receivable of ZMW1.6 billion relates to the time value of money adjustment for
Mopani Copper Mines Plc.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
124
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
26 Trade and other receivables (continued)
VAT receivables
Valued Added Tax (“VAT”) receivable balance of ZMW3.6 billion relates to Mopani for the financial year ended
31 December 2022. Of this balance, A time value of money adjustment of ZMW1,595 million has been recognised
given the long-term nature of VAT refunds. Management deems the gross VAT receivable is fully recoverable
based on ZRA verification procedures conducted up as at the end of the financial year.
An assessment of output tax amounting to US$362 million (ZMW3.6 billion) had been raised by ZRA. The
assessment covers the years 2011, 2012 and the first quarter of 2013. The basis of assessment is that the Company
(Mopani) has not provided all the evidence that was required under the old Rule 18 of the VAT (General) Rules
to prove an export and in particular the requirement to submit customs import certificates from the country of
final destination. Therefore all sales of metal that were zero rated in the returns have been standard rated in the
assessment by ZRA.
In 2015, VAT Rule 18 was subsequently amended to allow exporters to submit transit documents issued by the
customs authority in the country of transit of the goods instead of import certificates from the country of final
destination, as proof of export for purposes of VAT zero rating. The amendment was with effect from 23 February
2015. As a result, the Company has been able to claim and receive VAT refunds claimed after 1 March 2015.
Company
December 2023
| Current | |||
| Gross | |||
| Expected credit | |||
| loss/Impairment | Net | ||
| Trade receivables | 22,955 | (166) | 22,789 |
| Dividend receivable | 124,970 | (78,066) | 46,904 |
| Prepayments | 942 | (217) | 725 |
| VAT receivable | 2,848 | (655) | 2,193 |
| Other receivables | 75,668 | (44,799) | 30,869 |
| Amounts due from related parties (note 38b(vii)) | 549,188 | (364,400) | 184,788 |
| Price participation receivable (see note below) | 9,182 | (9,182) | - |
| 785,753 | (497,485) | 288,268 | |
| Non-current | |||
| Amounts due from related parties (note 38b(vii)) | 5,311,011 | (724,540) | 4,586,471 |
| Total balance | 6,096,764 | (1,222,025) | 4,874,739 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
125
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
26 Trade and other receivables (continued)
Company
December 2022
| Current | |||
| Gross | |||
| Expected | |||
| credit loss/ | |||
| Impairment | Net | ||
| Trade receivables | 547 | (233) | 314 |
| Dividend receivable | 186,381 | (78,174) | 108,207 |
| Prepayments | 2,199 | (152) | 2,047 |
| VAT receivable | 2,450 | (170) | 2,280 |
| Other receivables * | 65,725 | (40,903) | 24,822 |
| Amounts due from related parties (note 38b(vii)) | 123,896 | (87,737) | 36,159 |
| Price participation receivable | 9,182 | (9,182) | - |
| 390,380 | (216,551) | 173,829 | |
| Non-current | |||
| Amounts due from related parties (note 38b(vii)) | 1,909,814 | (951,652) | 958,162 |
| Total balance | 2,300,194 | (1,168,203) | 1,131,991 |
Other receivables analysis
Group
| 31 Dec 23 | 31 Dec 22 | |||||
| Gross | Impairment | Net | Gross | Impairment | ||
| Net | ||||||
| Staff receivables | 14,365 | (234) | 14,131 | 12,264 | (1,004) | 11,260 |
| Management fees | ||||||
| receivable | ||||||
| 12,309 | (12,309) | - | 11,974 | (11,650) | 324 | |
| Other sundry debtors | 50,285 | (32,256) | 18,029 | 118,850 | (28,249) | 90,601 |
| 76,959 | (44,799) | 32,160 | 143,088 | (40,903) | 102,185 |
Company
| 31 Dec 23 | 31 Dec 22 | |||||
| Gross | Impairment | Net | Gross | Impairment | Net | |
| Staff receivables | 14,365 | (234) | 14,131 | 12,264 | (1,004) | 11,260 |
| Management fees | ||||||
| receivable | ||||||
| 12,309 | (12,309) | - | ||||
| 11,974 | (11,650) | 324 | ||||
| Other sundry debtors | 48,994 | (32,256) | 16,738 | 41,487 | (28,249) | 13,238 |
| 75,668 | (44,799) | 30,869 | 65,725 | (40,903) | 24,822 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
126
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
27 Environmental Protection Fund
| Group | ||
| Environmental Protection Fund Deposit | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| 7,060 | 94,433 | |
| 7,060 | 94,433 |
Environmental Protection Fund deposit relates to the subsidiary Mopani Copper Mine Plc deposits made for
the Company’s estimated decommissioning and closure costs to be incurred at the closure of the Nkana and
Mufulira mines. This is recoverable from Government or can be offset against future liabilities as assessed by the
Government.
The Mines and Minerals Regulations, 1998 (Statutory Instrument No.102 of 1998) provide for the payment of
contributions by mine owners into the Environmental Protection Fund designed to provide for environmental
restoration of defunct sites. The Company contributes into the Environmental Protection Fund and the
contributions paid into the Fund are based on the environmental assessment carried out by environmental
experts. The funds are not accessible and are only available at the time of restoration. Kariba Minerals Limited
have not made any contributions towards the environmental protection funds. The contributions are only due
based on the assessment made by the government department in line with the Act. In this case, there was
no assessment in 2023 and therefore no payment has been made. Assessment is due in 2023. However, all
entities have recognised ARO liabilities which are driven by themselves and are significantly material than the
assessments done by the mining department of the government. This is done in line with IAS 37.
Assets pledged as security
Refer to note 39 (ii) for information on current assets pledged as security by the Group.
28 Term deposits
Term deposits relate to fixed deposits placed in various banks.
The movement in term deposits is as follows:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec 2022 | ||||
| Current | ||||
| Balance at 1January | ||||
| 5,340,202 | 653,742 | 5,340,202 | 632,992 | |
| Matured during the period | (5,340,202) | (653,742) | (5,340,202) | (632,992) |
| Additions | 4,450,451 | 5,340,202 | 4,411,330 | 5,340,202 |
| Total | 4,450,451 | 5,340,202 | 4,411,330 | 5,340,202 |
A lien/chare in the sum of US$550,000 was created over the term deposit as security for the payment of an
overdraft facility and a balance is included in the total of 2023 (nil) (2022: ZMW5.34 million). The Company
performs the Expected Credit loss (ECL) on term deposits. Based on the assessment, the ECL was considered
immaterial for both 2023 and 2022.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
127
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
29 Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise the following:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Cash and bank balances | 360,204 | 328,970 | 61,119 | 45,560 |
| Cash in hand | 152 | 203 | 18 | 26 |
| Cash and cash equivalents in the statement of | ||||
| financial position | 360,356 | 329,173 | 61,137 | 45,586 |
| Bank overdraft | - | (688,120) | - | - |
| Cash and cash equivalents | 360,356 | (358,947) | 61,137 | 45,586 |
| Under assets held for sale (Note 21) | (476,874) | 277,887 | - | - |
| Cash and cash equivalents at 31 Dec | 116,518 | (81,060) | 61,137 | 45,586 |
Bank overdrafts
Mopani Copper Mines Plc
Mopani has overdraft facilitates with Zambia National Commercial Bank Plc amounting to US$10 million, Ecobank
amounting to US$15 million, Indo Zambia Bank amounting to US$5 million, Atlas Mara Bank amounting to US$10
million and Zambia Industrial Commercial Bank amounting to US$2.8 million. The overdraft facilities are secured
by unconditional corporate guarantee from ZCCM Investment Holdings Plc. The overdraft facilities carry interest
rate at 10%.
As at year end, Mopani had outstanding overdraft facilities with ZANACO amounting to US$10 million, Indo-
Zambia Bank amounting to US$4.8 million, ZICB amounting to US$ 2.8 million, Atlas Mara amounting to US$9.9
million and Eco Bank amounting to US$15 million.
Kariba Minerals Limited
The overdraft facility has a limit of US$ 500,000 and attracts interest at 12% per annum. The overdraft is secured
by a cash cover provided by ZCCM-IH.
Financial guarantees
The fair value of the corporate guarantees above was immaterial, thus nil value (2022: nil) was recognised.
As at 31 December,2023 the ECL on the two guarantees was assessed to be nil (2022: nil), as there was no
adverse conditions that existed.
Assets pledged as security
Refer to note 39 (ii) for information on current assets pledged as security by the Group.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
128
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
30 Trade and other payables
| Current | Group | Company | ||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Trade payables | 177,076 | 2,828,762 | - | - |
| Concentrate purchases | - | 2,782,359 | - | - |
| Statutory liabilities | 29,686 | 1,290,633 | 1 | 1 |
| Other payables and accrued | ||||
| expenses | ||||
| 105,994 | 549,423 | 78,287 | 121,004 | |
| Total balance | 312,756 | 7,451,177 | 78,288 | 121,005 |
(i) Concentrate purchases relates to costs accrued for purchases of third party concentrates by Mopani
Copper Mine Plc
(ii) The carrying amount of the current payables and accrued expenses approximate their fair values due to
the short-term nature and low impact of discounting.
(iii) Statutory liabilities relate to Pay As You Earn (PAYE), National Pension Scheme Authority (NAPSA), Mineral
Royalty Tax and Value Added Tax (VAT).
(iv) Other payables and accrued expenses analysis*
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec 2022 | 31 Dec | |||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Staff payables | 9,193 | 406,177 | 9,193 | 4,327 |
| Dividends received in advance* | 10,724 | 10,724 | 10,724 | 10,724 |
| Treasury security deposits | 2,949 | 2,649 | 2,949 | 2,649 |
| Dividend payable | 2,777 | 87,531 | 2,777 | 87,531 |
| Accrued expenses | 5,026 | 731 | 5,026 | 731 |
| Sundry payables | 75,325 | 41,611 | 47,618 | 15,042 |
| Total balance | 105,994 | 549,423 | 78,287 | 121,004 |
*Dividends received in advance relates to dividends received from investee companies which are not payable
but will be offset against future dividends
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
129
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
31 Provisions
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec 2022 | 31 Dec | |||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Legal provisions (i) | 5,036 | 85,332 | 5,036 | 85,332 |
| Provisions – others (ii) | 39,207 | 402,357 | 36,425 | 23,354 |
| 44,243 | 487,689 | 41,461 | 108,686 | |
| i) Legal provision | ||||
| Opening balance | 85,332 | 10,332 | 85,332 | 10,332 |
| Addition | - | 76,400 | - | 76,400 |
| Payments/reversal | (80,296) | (1,400) | (80,296) | (1,400) |
| Closing balance | 5,036 | 85,332 | 5,036 | 85,332 |
| ii) Provisions other | ||||
| Opening balance | 402,357 | 378,746 | 23,354 | 19,196 |
| Addition/Reduction | 38,501 | 31,485 | 35,719 | 28,913 |
| Amounts used during the period | (25,220) | (36,984) | (22,648) | (24,755) |
| Translation (Note 31) | 160,435 | 29,110 | - | - |
| Reclassified to held for sale (Note 21) | (536,866) | - | - | - |
| Closing balance | 39,207 | 402,357 | 36,425 | 23,354 |
| Total provision closing balance | 44,243 | 487,689 | 41,461 | 108,686 |
i) Legal provision arises mainly from a number of legal cases involving the Group. These cases relate to
various legacy matters of the old ZCCM Limited, mostly relating to employee cases and sale of houses.
Legal provisions amounts are premised on claims against the Company before the courts of law and the
likelihood of matter going in favour of the claimant as determined by the legal team. Legal provisions are
payable within 12 months.
ii) Provisions other comprises provisions for consultancy fees regarding various investments projects, as well
as staff related provisions which includes gratuity and leave pay. Provisions other are payable within
12 months. Gratuity disclosed as part of provisions is based on the employee contracts and is fixed per
contract as a rate of the total salary (known percentage of the agreed basic salary in the contract).
iii) The makeup of provisions other balances are:
Provisions Other
| Group | Company | |||
| 31 Dec | 31 Dec | 31 Dec | 31 Dec | |
| 2023 | 2022 | 2023 | 2022 | |
| Staff costs provision | 14,697 | 15,480 | 11,915 | 12,879 |
| Consultancy fees provision | 24,510 | 10,446 | 24,510 | 10,446 |
| Contractors’ costs provision | 376,431 | - | - | |
| Total | 39,207 | 402,357 | 36,425 | 23,325 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
130
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
32 Share capital and premium
(i) Ordinary shares
| Group and Company | ||||||
| Class A shares | Class B shares | Total | ||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| Balance at 31 Dec | 969 | 969 | 639 | 639 | 1,608 | 1,608 |
Class “A” Ordinary Shares and Class “B” Ordinary Shares all rank pari passu in all respects.
Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per
share.
The Company has authorised class A and B shares of 96,976,669 and 63,873,617 respectively of ZMW0.01 each.
Both class A and B shareholders have a right to vote, appoint directors, chairperson and receive a dividend.
(ii) Number of shares
| In thousands of shares | Class A shares | Class B shares | Total shares | |||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| In issue at 31 December – | ||||||
| fully paid | 96,927 | 96,927 | 63,873 | 63,873 | 160,800 | 160,800 |
| Authorised – par value | ||||||
| ZMW0.01 | 120,000 | 120,000 | 80,000 | 80,000 | 200,000 | 200,000 |
(iii) Share premium
| Class A shares | Class B shares | Total | ||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| 31 Dec | ||||||
| 2023 | ||||||
| 31 Dec | ||||||
| 2022 | ||||||
| Ordinary shares | 1,259,407 | 1,259,407 | 829,936 | 829,936 | 2,089,343 | 2,089,343 |
| 1,259,407 | 1,259,407 | 829,936 | 829,936 | 2,089,343 | 2,089,343 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
131
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
33 Other reserves
(i) Revaluation reserve
The revaluation reserve arises from the periodic revaluation of items of property, plant and equipment, and
represents the excess of the revalued amount over the carrying value of the property, plant and equipment
at the date of revaluation. The reserves are non-distributable to the shareholders and are recognised net of
deferred income tax. Deferred tax arising in respect of the revaluation of property, plant and equipment has
been charged directly against revaluation reserves in accordance with IAS 12: Income Taxes.
(ii) Translation reserves of foreign denominated subsidiaries
The translation reserve arises from the translation of the results of the investments in subsidiaries and equity
accounted investees whose functional and presentation currency is the US Dollar. Subsidiary translation reserve
for the year were as follows;
| ZMW’000 | ZMW’000 | |
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Trade and other receivables | 904,155 | 230,243 |
| Environmental protection fund | 42,858 | 7,303 |
| Cash and cash equivalents | (281,464) | (28,538) |
| Borrowings (note 34) | (12,707,437) | (2,172,561) |
| Retirement benefits (note 36) | (69,146) | (25,167) |
| Provisions for environmental rehabilitation (note 37) | (815,048) | (86,118) |
| Trade and other payables | (3,350,997) | (511,192) |
| Provisions (note 31) | (160,435) | (29,110) |
| Total | (16,437,514) | (2,615,140) |
(iii) Fair value reserve
Fair value reserve comprises the cumulative net change in the fair value through other comprehensive income
financial assets until the assets are derecognised or impaired. The reserves are distributable upon realisation.
Where a revalued financial asset is sold, the portion of the reserve that relates to that financial asset, which is
effectively realised, is reduced from the investment revaluation reserve and is recognised in profit or loss. Where
a revalued financial asset is impaired, the portion of the reserve that relates to that financial asset is recognised
in retained earnings. (See note 44 (d (ii)).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
132
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
34 Borrowings
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Current | ||||
| Borrowings | - | 864,411 | - | - |
| Non-current | ||||
| Borrowings | - | 27,476,859 | - | - |
| Total borrowings | - | 28,341,270 | - | - |
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Opening balance | 28,341,270 | 25,343,567 | - | 1,135 |
| Additions | 128,733 | - | - | - |
| Repayments | (436,036) | (698,833) | - | (1,135) |
| Interest – expense | 2,776,751 | 1,523,989 | - | 14 |
| Interest paid | - | (14) | - | (14) |
| Exchange difference due to translation (in- | ||||
| cluded in reserves) (note 33 (ii)) | 12,707,437 | 2,172,561 | - | - |
| Reclassified to held for sale (Note 21) | (43,518,155) | - | - | - |
| Closing balance | - | 28,341,270 | - | - |
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec 2022 | ||||
| International AG/Calisa | ||||
| - | ||||
| 28,341,270 | - | - | ||
| Closing balance | ||||
| - | ||||
| 28,341,270 | ||||
| - | - |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
133
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
34 Borrowings (continued)
Glencore International AG / Carlisa facility
Mopani has historically been funded by shareholder loans from Carlisa and other members of the Glencore group.
As of 31 December 2020, the total shareholder loan was ZMW 71.509 billion (US$4.3 billion). Before the acquisition
of Mopani’s 90% stake from Glencore in March 2021, the shareholder loans agreements were amended, such
that the remaining debt in Mopani was reduced to ZMW 24.95 billion (US$1.5 billion.) The amended debt to
Carlisa and Glencore key terms and conditions are summarised below:
The facilities include the following parties:
▯ Mopani as a borrower
▯ Glencore International AG (GIAG) as a lender in respect of the GIAG facility
▯ Carlisa as a lender in respect of the Carlisa facility
▯ ZCCM-IH as a guarantor
The facility has a balance of ZMW 43.52 billion (2022: ZMW 28.341 billion) as of 31 December 2022 with repayment
period ending 2035 or any such later date as agreed amongst the Parties in writing from time to time. ZCCM-IH
has guaranteed the obligations of Mopani under the GIAG and Carlisa facility. Interest is capitalised for the first
3 years and thereafter payable quarterly at Libor plus 3%. The Glencore and Carlisa borrowings bear interest
at the 3 month SOFR rate plus 3%. The borrowings are payable on 31 December 2035 or any such later date as
agreed amongst the Parties in writing from time to time.
Repayment terms
The facility is repayable under a dual mechanism
▯ 3% of gross revenue of the Mopani group from 2021- 2023, and 10% to 17.5% of gross revenue of Mopani
thereafter.
▯ 33.3% of EBITDA less taxes, changes in working capital, capital expenditure, royalty payment to
Government of the Republic of Zambia (GRZ) for that quarter
Repayment of principal (together with accrued interest) may additionally be required in the event of an
occurrence of certain other early repayment events. These include certain change of control events in respect
of Mopani, proceeds from capital raising or disposal and sales of product other than those pursuant to the
offtake agreements, amongst others. The Group is in compliance to the above terms.
If ZCCM-IH ceases to control Mopani or the GRZ ceases to control ZCCM-IH, the lenders may, at any time
thereafter cancel the facilities and declare all loans, together with accrued interest, immediately due and
payable.
Security
▯ The facility is secured by first ranking fixed and floating charge over all assets and undertakings of Mopani
▯ ZCCM-IH shares in Mopani.
▯ ZCCM-IH Corporate guarantee in favour of Glencore
Aside the terms on repayment, security, off taking and shareholding, there were no other debt covenants.
Mopani’s capital is currently being restructured with the engagement of an equity partner, Delta Mining Limited
(“Delta”), who are expected to inject a total of US$620 million fresh capital through the issue of new shares.
The balance sheet will also be restructured by way of renegotiate the quantum of the transaction debt with
Glencore International AG. Subsequent to the year end, the ZCCM agreement of having the shares in Mopani
as a guarantee for the Glencore loan has been restructured. Glencore no longer has a right over the share of
ZCCM in Mopani on default as part of the investment agreement with Delta Mining Limited. Refer to note 42
Subsequent Events.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
134
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
35 Deferred income tax
Group
Deferred income tax assets are recognised for provisions to the extent that the future related tax benefits will be
realised. There were no unrecognised deferred tax assets during the period. The deferred tax asset have been
recognised only to the extent that it is probable that future taxable profits will be available against which the
temporary differences will be utilised.
Subject to agreement with the Zambia Revenue Authority, the Group has no estimated tax losses as at 31
December 2023 (2022: ZMW469 million). The Group utilised all the tax losses during the year following the
conversion from the dividend model (subjected to 0% income tax rate) to the royalty right (subjected to 30%
income tax rate). The tax losses are available to be carried forward for a period of not more than 5 years from
the charge year in which they were incurred, for set off against future taxable profit from the same source as
follows:
Tax loss analysis
| 2023 | 2022 | |
| ZMW’000 | ZMW’000 | |
| 2022 tax losses available until 2027 | - | - |
| 2021 tax losses available until 2026 | - | 261,822 |
| 2020 tax losses available until 2025 | - | 184,593 |
| 2019 tax losses available until 2023 | - | 22,574 |
| Total | - | 468,989 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
135
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
35 Deferred income tax (continued)
Group (continued)
Deferred income tax was calculated using the enacted income tax rate of 30% (2022: 30%).
| Group | |||||||
| Balance 1 | |||||||
| Jan 2022 | |||||||
| Rec- | |||||||
| ognised | |||||||
| in profit or | |||||||
| loss | |||||||
| Rec- | |||||||
| ognised | |||||||
| OCI | |||||||
| Balance 31 | |||||||
| Dec 2022 | |||||||
| Rec- | |||||||
| ognised | |||||||
| in profit or | |||||||
| loss | |||||||
| Rec- | |||||||
| ognised | |||||||
| in OCI | |||||||
| Balance 31 | |||||||
| Dec 2023 | |||||||
| Movement in temporary differences during the year | |||||||
| Deferred tax asset | |||||||
| Provision for gratuity and leave pay | (2,834) | (66) | - | (2,900) | (890) | - | (3,790) |
| Other provisions | (14,860) | 2,022 | - | (12,838) | (11,171) | - | (24,009) |
| Bad debt Provision | (389,533) | 129,983 | - | (259,550) | (25,088) | - | (284,638) |
| Legal Provision | (3,100) | (22,428) | - | (25,528) | 24,017 | - | (1,511) |
| Environmental provision | (23,979) | 12,172 | - | (11,807) | (4,204) | - | (16,011) |
| Unrealised exchange losses | (110,122) | 22,497 | - | (87,625) | (1,981) | - | (89,606) |
| Supply chain tax losses | - | (405) | - | (405) | - | (405) | |
| Tax losses | (156,972) | 20,641 | - | (136,331) | 136,331 | - | - |
| (701,400) | 164,416 | - | (536,984) | 117,014 | - | (419,970) | |
| Deferred tax liability | |||||||
| Property, plant, and equipment | 20,200 | 15,523 | - | 35,723 | 6,344 | - | 42,067 |
| Property, plant, and equipment – Revaluation | 6,679 | (9,189) | 3,746 | 1,236 | - | (221) | 1,015 |
| Unrealised exchange gains | 319,478 | 43,206 | - | 362,684 | 753,980 | - | 1,116,664 |
| Employee provision | 14,195 | 266 | 28 | 14,489 | 512 | (2,944) | 12,057 |
| 360,552 | 49,806 | 3,774 | 414,132 | 760,836 | (3,165) | 1,171,803 | |
| Deferred tax asset/liability | (340,848) | 214,222 | 3,774 | (122,852) | 877,850 | (3,165) | 751,833 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
136
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
35 Deferred income tax (continued)
Deferred tax on foreign currency reserve
The translation reserves which arise from consolidation (reporting) are not recognised. There is no group tax registration in Zambia, hence translation reserves will
not result in any tax obligations at any time. All taxes recognised at group level are a summation of individual entity’s tax obligations/claims.
Deferred income tax assets are recognised for provisions to the extent that the future related tax benefits will be realised. There were no unrecognised deferred
tax assets during the period.
Company
Deferred income tax assets are recognised for provisions to the extent that the future related tax benefits will be realised. There were no unrecognised deferred
tax assets during the period. Deferred income tax assets and liabilities are attributable to the following items:
| Company | |||||||
| Balance 1 | |||||||
| Jan 2022 | |||||||
| Recognised in | |||||||
| profit or loss | |||||||
| Recognised | |||||||
| OCI | |||||||
| Balance 31 | |||||||
| Dec 2022 | |||||||
| Recognised | |||||||
| in profit or | |||||||
| loss | |||||||
| Recognised | |||||||
| OCI | |||||||
| Balance | |||||||
| 31 Dec | |||||||
| 2023 | |||||||
| Movement in temporary differences during the year | |||||||
| Deferred Tax Asset | |||||||
| Property, plant and equipment | (1,677) | (4,433) | - | (6,110) | 3,735 | - | (2,375) |
| Provision for gratuity and leave pay | (2,867) | (66) | - | (2,933) | (444) | - | (3,377) |
| Other provisions | (1,291) | 895 | - | (396) | 396 | - | - |
| Bad debt Provision | (493,863) | 129,983 | - | (363,880) | (24,917) | - | (388,797) |
| Legal Provision | (3,100) | (22,428) | - | (25,528) | 24,017 | - | (1,511) |
| Employee provision | (3,077) | 266 | 28 | (2,783) | 512 | (2,944) | (5,215) |
| Environmental provision | (23,979) | 12,172 | - | (11,807) | (4,542) | - | (16,349) |
| Tax losses | (154,488) | 14,097 | - | (140,391) | 139,986 | - | (405) |
| (684,342) | 130,486 | 28 | (553,828) | 138,743 | (2,944) | (418,029) | |
| Deferred Tax Liability | |||||||
| Property, plant and equipment – Revaluation | 6,009 | - | 3,746 | 9,755 | - | (221) | 9,534 |
| Unrealised exchange gains | 318,308 | 43,206 | - | 361,514 | 753,179 | - | 1,114,693 |
| Unrealised exchange Losses | (108,084) | 31,677 | - | (76,407) | (11,732) | - | (88,139) |
| Change in investment property | - | - | - | - | - | - | - |
| (216,233) | 74,883 | 3,746 | 294,862 | 741,447 | (221) | 1,036,088 | |
| Deferred Tax (Asset)/Liability | (468,109) | 205,369 | 3,774 | (258,966) | 880,190 | (3,165) | 618,059 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
137
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
36 Retirement benefits
(i) Group defined contribution plan
A defined contribution plan is a pension plan under which the Group pays fixed contributions into the fund. The
Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee service in the current and prior years. The
Company’s contributions to the defined contribution schemes are charged to profit or loss in the year to which
they relate. The Group has no further obligation once contributions have been paid.
(ii) Group defined contribution obligation
Under the terms of employment, permanent employees of the Group are entitled to post employment gratuity
benefits. The benefits are defined benefit in nature based on the members’ length of service and their salary at
the earlier of retirement or death or termination from employment. This scheme is unfunded, and the Group only
pays a benefit upon retirement of an individual qualifying for the benefit.
The regulator, Pensions and Insurance Authority, does not regulate gratuity schemes such as this one. However,
companies that opt to provide an additional and separate unfunded gratuity benefit for their employees are
required to operate within the governing covenants and agreements with their employees. 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.
The Group’s accrued liability in respect of each employee is the present value of the benefits in respect of
service completed to the valuation date but based on projected earnings to retirement or date of payment.
The total accrued liability (or the required provision) at the valuation date is a summation of the accrued liability
in respect of each employee.
Key risks
The plan typically exposes the Group to actuarial risks such as: interest rate risk, salary risk and liquidity risk.
| Interest rate risk | The plan liabilities are calculated using a discount rate set with |
| reference to Zambian government bond yields. A decrease in | |
| government bonds will increase the plan liabilities. | |
| Salary risk | The present value of the defined benefit plan liability is calculated |
| by reference to the future salaries of plan participants. As such, an | |
| increase in the salary of the plan participants will increase the plan’s | |
| liability. | |
| Liquidity risk | The plan is unfunded. There is a risk that resources might not be |
| available when needed to pay the benefits that have become due. |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
138
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
36 Retirement benefits (continued)
(a) The amounts recognised in the statement of financial position are determined as follows:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Present value of unfunded obligations | 17,381 | 322,071 | 17,381 | 9,275 |
(b) Movement in the defined benefit obligation over the year is as follows:
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Balance at 1 January | 322,071 | 340,288 | 9,275 | 10,256 |
| Charge for the period – expense | 36,853 | 168,173 | 2,619 | 3,154 |
| Charge for the period – other comprehensive in- | ||||
| come | (24,134) | (204,217) | 9,813 | (94) |
| Benefits paid during the year | (11,078) | (7,340) | (4,326) | (4,041) |
| Reclassified to trade and other payables | (245,715) | - | - | - |
| Foreign currency translation | 69,146 | 25,167 | - | - |
| Reclassified as held for sale (Note 21) | (129,762) | - | - | - |
| Closing balance – 31 December | 17,381 | 322,071 | 17,381 | 9,275 |
| Non-current liability | 17,381 | 182,940 | 17,381 | 9,275 |
| Current liability | - | 139,131 | - | - |
| 17,381 | 322,071 | 17,381 | 9,275 |
(c) Recognised in profit or loss
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Current service cost | 13,414 | 165,823 | 648 | 804 |
| Interest cost | 23,439 | 2,350 | 1,971 | 2,350 |
| Personnel expenses (note 12) | 36,853 | 168,173 | 2,619 | 3,154 |
(d) Recognised in equity
| Group | Company | |||
| 31 Dec | ||||
| 2023 | 31 Dec 2022 | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Experience adjustment | (27,510) | (307,622) | 6,437 | 5,476 |
| Demographic assumptions | 7,208 | - | 7,208 | - |
| Financial assumptions | (3,832) | 103,405 | (3,832) | (5,570) |
| Total | (24,134) | (204,217) | 9,813 | (94) |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
139
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of kwacha
36 Retirement benefits (continued)
Group defined benefit plans
(e) Actuarial assumptions
Critical assumptions are made by the actuary in determining the present value of retirement benefit obligation
including the discount rate. The carrying amount of the provision and the key assumptions made in estimating
the provision were as follows:
| Group | Company | |||
| 31Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | 31 Dec 2022 | |||
| Discount rate | 26.95% | 27.75% | 23.00% | 25.40% |
| Benefit increase rate | 16.59% | 18.86% | ||
| Future salary increases | 10.0% | 10.0% | 11% | 11% |
The liability and actuarial assumptions are based on the actuarial valuation report as at 31 December 2022.
(f) Sensitivity analysis
The results of the actuarial valuation are sensitive to changes in the financial assumptions than changes in
the demographic assumptions. In preparing the sensitivity analysis of the results to the discount rate used, the
actuary relied on calculations of the duration of the liability. Based on this methodology, the results of the
sensitivity analysis are summarized in the table below:
| Group | Company | |||
| 31 Dec 2023 | 31 Dec 2022 | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Present value | ||||
| of obligation | ||||
| Present value | ||||
| of obligation | ||||
| Present value | ||||
| of obligation | ||||
| Present value | ||||
| of obligation | ||||
| 1% increase in discount rate | ||||
| (4,660) | (4,188) | |||
| (1,221) | (479) | |||
| 1% decrease in discount rate | ||||
| 5,095 | 5,567 | |||
| 1,359 | 528 | |||
| 1% increase in salary rate | ||||
| 5,876 | 5,289 | |||
| 1,494 | 604 | |||
| 1% decrease in salary rate | ||||
| (5,398) | (4,874) | |||
| (1,352) | (551) |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
140
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
36 Retirement benefits (continued)
(f) Sensitivity analysis (continued)
Since all the benefits payable under the plan are salary related, the sensitivity of the liability to a change in the
salary escalation assumption is not expected to be materially different.
On Company cash flows
The arrangement is unfunded and the Company pays benefits from general revenues as and when they arise.
The timing of the benefit payments from the plan will be influenced by the age at which employees retire from
the Company.
37 Provisions for environmental rehabilitation
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Balance at 1 January | 1,221,068 | 1,198,814 | 39,357 | 79,931 |
| Charge for the year | (471) | (46,568) | (1,632) | (47,273) |
| Increase/(decrease) in environmental provi- | ||||
| sion charged to environmental assets | 1,299,950 | (42,887) | - | - |
| Exchange movement | 16,773 | 6,699 | 16,773 | 6,699 |
| Unwinding of discount | 23,520 | 18,892 | - | - |
| Translation - included in reserves | 815,048 | 86,118 | - | - |
| Reclassified to held for sale (Note 21) | (3,263,137) | - | - | - |
| Balance at 31 December | 112,751 | 1,221,068 | 54,498 | 39,357 |
The year-end balance represents restoration, rehabilitation and environmental provisions for the Company and
its subsidiaries Mopani Copper Mine Plc, Limestone Company Limited (Limestone) and Kariba Minerals Limited
(Kariba). The Company’s provision is as a result of inherited environmental obligations from the old ZCCM Limited
combined with environmental disturbances from mining operations at Mopani, Limestone and Kariba.
The provisions have been assessed to cost ZMW118.42 million as at 31 December 2023 as compared to
ZMW1,221.07 million as at 31 December 2022. The decrease in the provision for environmental rehabilitation in
2023 as compared to 2022 was as a result of the reclassification of the held for sale balance for Mopani Copper
Mine Plc.
The provision represents the best estimate of the expenditure required to settle the obligations to rehabilitate
environmental disturbances caused by mining operations. Mining Companies are expected to make contributions
to the Environmental Protection Fund, controlled by the Department of Mines and Mineral Development.
Contributions made towards the fund reduces the environmental provision obligation. At the end of useful life
of the mine, Mining Companies are obligated to rehabilitate the damage to the environment and all payments
made to the Environmental Protection Fund will be reimbursed towards this rehabilitation.
The valuation for the environmental restoration provision at 31 December 2023 for the Company and subsidiaries
were performed by independent consultants.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
141
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
37 Provisions for environmental rehabilitation (continued)
Assumptions
The following assumptions were taken into account: Inflation rate of 7% (2022: 6.5%), Discount rate of 3.84%
(2022: 3.99%) and time to settle of 5 to 25 years when cashflows are expected to be incurred.
Based on this assessment, there was an increase in the liability for ARO and remediation on an undiscounted
basis after an inflation factor of 7% (2022:6.5%) of approximately ZMW 118 million (US$4.58 million) ZMW1.22
billion (2022: US$55.62 million). The discount factor of 3.84% was applied in 2022 (2022: 3.99%). The increase in the
restoration provision in the current year is principally attributable to exchange movements.
The changes in cash flow estimates result from new Net Present Value (NPV) estimates of the asset retirement
obligation. An impact of a 10% movement in the inflation rate results into ZMW0.12 million (2022: ZMW356.54
million) change in the retirement and remediation liability while a 10% movement in the discount rate results into
a ZMW0.02 million (2022: ZMW292.54 million) change in the liability and corresponding mineral properties asset.
For each mining area, the ARO cash outflows have been estimated to occur after the end of the mining over a
period which is between 5 to 25 years.
38 Related party transactions
a) Parent and ultimate controlling party
The Group is controlled by the Government of the Republic of Zambia through the Zambian Industrial
Development Corporation (IDC) (60.3%) and Ministry of Finance (17.2%) which owns a total of 77.5% of the
Company’s shares.
b) Related party transactions
(i) Dividend paid to parent Company
| Name | Type | ||||
| Ownership | |||||
| interest | |||||
| Place of | |||||
| incorporation | |||||
| 31 Dec | |||||
| 2023 | |||||
| 31 Dec | |||||
| 2022 | |||||
| Industrial | |||||
| Development | |||||
| Corporation | |||||
| Ultimate parent | |||||
| entity and | |||||
| controlling party | 60.3% | Zambia | 436 | 51 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
142
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
38 Related party transactions (continued)
b) Related party transactions (continued)
(ii) Key management personnel compensation
| Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| Executive Director’s fees and Emoluments | 10,605 | 4,978 | 4,694 | 1,074 |
| Non-executive Director’s Fees | 26,477 | 26,176 | 10,465 | 9,265 |
| Total | 37,082 | 31,154 | 15,159 | 10,339 |
Key management compensation relates to Director’s in the Company and its subsidiaries. Directors’ emoluments
include sitting allowances and salaries.
(iii) Dividend income from related parties
Company
| Relationship | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Kansanshi Mines (Associate) | 170,745 | 4,370,267 |
| CNMC Luanshya Copper Mines Plc (Associates) | 233,568 | 250,282 |
| Copperbelt Energy Corporation (Associate) | 335,523 | 195,988 |
| NFC Africa Mining Plc – (Other investee) | - | 51,780 |
| Total dividends (note 8) | 739,836 | 4,868,317 |
(iv) Interest income from related parties
Company
| Relationship | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Maamba Collieries Limited (Associate) | 56,504 | 77,936 |
| Konkola Copper Mines Plc (Associate) | 832 | 7,305 |
| Mushe Milling Company Limited (Subsidiary) | - | 8,623 |
| Staff loans | 1,330 | 908 |
| Limestone Resources Limited (Subsidiary) | 14,070 | 2,461 |
| Rembrandt Properties Limited (Associate) | 5,501 | 1,474 |
| Mopani Copper Mines (Subsidiary) | 168,728 | - |
| Total interest income (Note 13) | 246,965 | 98,707 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
143
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
38 Related party transactions (continued)
b) Related party transactions (continued)
(v) Management fees income from related parties
Company
| Relationship | ||
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Lubambe Copper Mines (Associate) | 5,072 | - |
| Misenge Environmental and Technical Limited (Subsidiary) | - | 32 |
| Kariba Minerals Limited (Subsidiary) | 11 | 127 |
| Kabundi Resources Limited (Subsidiary) | - | 942 |
| Zambia Gold Company Limited (Subsidiary) | 295 | 4,843 |
| Total management fees (note 9) | 5,378 | 5,944 |
(vi) Amounts due from related parties
Group 2023
| Relationship | Gross | Impairment | ||
| Carrying | ||||
| amount | ||||
| Konkola Copper Mines Plc (vii) | Associate | 309,420 | (309,420) | - |
| Royalty receivable (Kansanshi) | Associate | 185,397 | (3,506) | 181,891 |
| Royalty receivable (Consolidated Gold | ||||
| Company Limited) | Associate | 2,852 | - | 2,852 |
| Sub total | 497,669 | (312,926) | 184,743 | |
| Maamba Collieries Limited (i) | Associate | 1,595,707 | (7,978) | 1,587,729 |
| Lubambe Copper Mines Limited (ii) | Associate | 701,493 | (701,493) | - |
| Rembrandt | Associate | 41,315 | (207) | 41,108 |
| Sub total | 2,338,515 | (709,678) | 1,628,837 | |
| Price participation receivable | Associate | 9,182 | (9,182) | - |
| Dividends receivable Dividends | ||||
| receivable Kansanshi | ||||
| Associate | 124,970 | (78,066) | ||
| 46,904 | ||||
| Total amounts due from related parties | 2,970,336 | (1,109,852) | 1,860,484 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
144
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
38 Related party transactions (continued)
b) Related party transactions (continued)
(vi) Amounts due from related parties
Group 2022
| Relationship | Gross | Impairment | ||
| Carrying | ||||
| amount | ||||
| Maamba Collieries Limited (i) | Associate | |||
| 1,082,168 | (250,159) | 832,009 | ||
| Lubambe Copper Mines Limited (ii) | Associate | 701,493 | (701,493) | - |
| Rembrandt | Associate | 35,814 | - | 35,814 |
| Sub total | 1,819,475 | (951,652) | 867,823 | |
| Konkola Copper Mines Plc (vi) | Associate | 35,697 | (36) | 35,661 |
| Consolidated Gold Company Limited | Associate | 1,133 | (1,133) | - |
| Sub total | 36,830 | (1,169) | 35,661 | |
| Price participation receivable | Associate | 9,182 | (9,182) | - |
| Dividends receivable from CNMC | ||||
| Luanshya Plc | ||||
| Associate | 186,381 | (78,174) | 108,207 | |
| Sub total | 195,563 | (87,356) | 108,207 | |
| Total amounts due from related parties | 2,051,868 | (1,040,177) | 1,011,691 |
Company
December 2023
| Relationship | Gross | Impairment | ||
| Carrying | ||||
| amount | ||||
| Misenge Environmental and Technical | ||||
| Services Limited (v) | Subsidiary | 4,669 | (4,624) | 45 |
| Konkola Copper Mine Plc (vi) | Associate | 309,420 | (309,420) | - |
| Limestone resources limited (ix) | Subsidiary | 46,850 | (46,850) | - |
| Royalty receivable (Kansanshi) | Associate | 188,249 | (3,506) | 184,743 |
| Sub total | 549,188 | (364,400) | 184,788 | |
| Maamba Collieries Limited (i) | Associate | 1,595,707 | (7,978) | 1,587,729 |
| Lubambe Copper Mine Limited (ii) | Associate | 701,493 | (701,493) | - |
| Mopani (x) | Subsidiary | 2,776,497 | (13,882) | 2,762,615 |
| Rembrandt (viii) | Associate | 41,315 | (207) | 41,108 |
| Limestone resources limited (ix) | Subsidiary | 195,999 | (980) | 195,019 |
| Sub total | 5,311,011 | (724,540) | 4,586,471 | |
| Mushe Milling Company Limited (vii) | Subsidiary | 73,965 | (73,965) | - |
| Price participation receivable | Associate | 9,182 | (9,182) | - |
| Dividends receivable (Kansanshi) | Associate | 124,970 | (78,066) | 46,904 |
| Total amounts due from related parties | 6,068,316 | (1,250,153) | 4,818,163 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
145
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
38 Related party transactions (continued)
b) Related party transactions (continued)
(vi) Amounts due from related parties (continued)
Company
December 2022
| Relationship | Gross | Impairment | ||
| Carrying | ||||
| amount | ||||
| Maamba Collieries Limited (i) | Associate | 1,082,168 | (250,159) | 832,009 |
| Lubambe Copper Mine Limited (ii) | Associate | 701,493 | (701,493) | - |
| Limestone resources limited (ix) | Subsidiary | 90,339 | - | 90,339 |
| Rembrandt (viii) | Associate | 35,814 | - | 35,814 |
| Sub total | 1,909,814 | (951,652) | 958,162 | |
| Kariba Minerals Limited (iii) | Subsidiary | 5,839 | (5,839) | - |
| Nkandabwe Coal Mine (iv) | Subsidiary | 7,845 | (7,845) | - |
| Misenge Environmental and Technical | ||||
| Services Limited (v) | Subsidiary | 4,816 | (4,318) | 498 |
| Limestone resources limited (ix) | Subsidiary | 46,850 | (46,850) | - |
| Consolidated Gold Company Limited | Associate | 1,133 | (1,133) | - |
| Konkola Copper Mine Plc (vi) | Associate | 35,697 | (36) | 35,661 |
| Mushe (Trade receivables) (vii) | Subsidiary | 21,716 | (21,716) | - |
| Sub total | 123,896 | (87,737) | 36,159 | |
| Mushe (loan receivable) (vii) | Subsidiary | 44,732 | (44,732) | - |
| Price participation receivable (KCM) | Associate | 9,182 | (9,182) | - |
| Dividends receivable: (CNMC Luanshya Plc) | Associate | 186,381 | (78,174) | 108,207 |
| Sub total | 240,295 | (132,088) | 108,207 | |
| Total amounts due from related parties | 2,274,005 | (1,171,477) | 1,102,528 |
(i) Maamba Collieries Limited (MCL)
On 17 June 2015, ZCCM –IH entered into an inter-company loan agreement for a cash advance of ZMW321.15
million (US$26.345 million) as part of its contribution towards the implementation of the Integrated Mining Project
and the establishment of the 300MW Thermal Power plant project. The loan attracts an interest rate of 6 % per
annum. The principal and interest accrued is repayable in 5 annual instalments commencing in one year after
the commercial operational date of 27 July 2017. This loan is subordinated to the third-party lenders who have
financed the Maamba project.
On 25 March 2019, ZCCM-IH advanced a short-term liquid support of ZMW 220.5 million (US$10 million) to MCL
payable within 60 days from the date of disbursement, and when Maamba receives payment for its power sales
to ZESCO. This shareholder loan is subordinated to the project finance loans and is unsecured and interest is
charged at 6% per annum. After the year end, the loan has been fully paid.
The above loans are subordinated to the financier’s loans of Maamba project and are payable after the
financial close date when all project finance loans are repaid by 2026. MCL has made considerable progress
in settling the outstanding debt with the Commercial Lenders, driven by improved cash flows. Throughout the
year, MCL made a significant advance payment on its loan principal to Commercial Lenders, totalling US$88.5
million, after informing the commercial lenders about its plan to continue with monthly prepayments. Moreover,
the company aims to rapidly settle the remaining project loan balance of US$118 million, utilizing the subsequent
payments received from ZESCO.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
146
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
38 Related party transactions (continued)
b) Related party transactions (continued)
(vi) Amounts due from related parties (Continued)
(i) Maamba Collieries Limited (MCL) (Continued)
No payment was made during the year towards the ZCCM-IH shareholder loan. Management has assessed
the sufficiency of the provision for impairment on the loan receivable, based on Maamba’s loan repayment
performance relating to all project finance loans, as well as its financial performance, and has determined that
there are no indicators for additional impairment provision.
(ii) Lubambe Copper Mines Limited
On 9 November 2023, ZCCM-IH amended the inter-company loan agreement with Lubambe Copper Mines
Limited. The principal amount outstanding for the loan is ZMW701 million (US$103.7 million). The loan is fully
impaired by ZCCM-IH Plc.
(iii) Kariba Minerals Limited
On 22 January 2019, ZCCM-IH advanced a loan to Kariba Minerals Limited amounting to ZMW5.84 million
(US$489,520) for the purchase of equipment. The loan attracts an interest rate of 6 % per annum. The loan
has a moratorium of two years. This loan is fully impaired. On 28
th
July 2023, the ZCCM-IH Board approved the
conversion of the loan to Equity as part of Kariba Minerals Limited Turnaround Plan Funding initiatives.
(iv) Nkandabwe Coal Mine Limited
ZCCM – IH advanced a loan to Nkandabwe Coal Mine of ZMW7.85 million is recoverable from Ministry of Finance
through a debt swap arrangement. Under this arrangement ZCCM-H, will recover the Nkandabwe loan from
dividend payable to Ministry of Finance. Subsequently, the outstanding amount has been recovered in full.
(v) Misenge Environmental and Technical Services Limited
The loan amount outstanding from Misenge Environmental and Technical Services Limited is totalling ZMW4.25
million. The loan is fully impaired by ZCCM-IH Plc.
(vi) Konkola Copper Mine Plc (KCM)
Following the High Court order to appoint a provisional liquidator for KCM, ZCCM-IH advanced ZMW166.57
million (US$10 million) to KCM through the liquidator. Further, on 23
rd
August 2019, ZCCM-IH advanced a loan of
ZMW208.21 million (US$12.5 million) to KCM. The US$12.5 million loan attracted an interest rate of 6 % per annum.
As at 31 December 2023, a combined loan total of ZMW71.64 million (US$2.78 million) was still outstanding. KCM
has since written to ZCCM-IH for the loan to be restructured given the recent developments regarding the
resolution of disputes between shareholders.
ZCCM Investments Holdings Plc had previously provided a Corporate Guarantee to Zambia National Commercial
Bank Plc (“ZANACO”) for ZMW 220 million (US$10 million) (the “Transaction”). The provision of ZMW 220 million
(US$10 million) Corporate Guarantee to ZANACO Plc by ZCCM-IH was for working capital to Konkola Copper
Mines Plc (“KCM”). The Corporate Guarantee to ZANACO Plc was valid until 30
th
November 2023 and upon
expiry, ZANACO informed KCM that they would not be renewing the facility. Given KCM’s financial challenges,
they were unable to repay the facility with ZANACO and as a result, ZCCM-IH was obligated to pay ZANACO
US$10 million. The Corporate Guarantee issued by ZCCM-IH was on the back of a Promissory note issued in
favour of ZCCM-IH by Ministry of Finance for the Corporate Guarantee. ZCCM-IH has since written to the Ministry
of Finance to request them to repay ZCCM-IH the US$10 million owed by KCM.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
147
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
38 Related party transactions (continued)
b) Related party transactions (continued)
(vi) Amounts due from related parties (Continued)
(vii) Mushe Milling Company
On 12 December 2019, ZCCM-IH and Mushe Milling Company Limited entered into a loan facility agreement
amounting to ZMW20.48 million. The facility attracts interest computed as the Bank of Zambia average
commercial lending rate plus 2% per annum. Payment of interest to commence six months from the date of the
facility. The principal repayment of the loan has a moratorium of 12 months, thereafter, the principal to be paid
in 24 equal monthly instalments. The loan is fully impaired.
On 7
th
September 2021, ZCCM-IH and Mushe Milling Company Limited entered into a loan facility agreement
amounting to ZMW6.29 million. The facility attracts interest computed as the Bank of Zambia average commercial
lending rate plus 2% per annum. Payment of interest to commence six months from the date of the facility. The
principal repayment of the loan has a moratorium of 12 months, thereafter, the principal to be paid in 24 equal
monthly instalments. The loan is fully impaired.
(viii) Rembrandt
On 1 September 2022, ZCCM-IH issued a term loan of ZMW29,500,000 to improve the company’s working
capital, with a repayment deadline of 20 August 2023. Additionally, on 29 December 2022, ZCCM-IH granted an
additional shareholder loan totalling ZMW4,839,513.71, due by 30 November 2023. Both loans bear interest at the
364-day Bank of Zambia treasury bill yield rate as of 1 September 2022, plus a margin of 1%, and are secured by
an equal shareholding percentage of 25.5% from each of the other shareholders in Rembrandt, Urban Brands,
and Sims Capital. As of 31 December 2023, Rembrandt had not repaid either loan, leading ZCCM-IH to explore
necessary actions to exercise its rights and acquire the shares of Sims and Urban in Rembrandt, as stipulated in
the Shareholder Loan agreement.
(ix) Limestone Resources Limited
On 7
th
July 2022, ZCCM-IH and Limestone Resources Limited (LRL) signed a Preference Share Subscription
Agreement where ZCCM-IH subscribed for ZMW174.86 million (US$6.79 million) worth of Redeemable Preference
Shares (RPS). The RPS have a tenure of two (2) years and will mature in July 2024. They have a fixed interest rate
of 10.0%. The total amount receivable from Limestone as 31 December 2023 is ZMW196 Million and ZMW46.9
million as loans and trade receivables. The total amount receivable is fully impaired.
(x) Mopani Copper Mines Plc
On 19
th
January 2023, ZCCM-IH and Mopani Copper Mines Plc (Mopani) signed a Bridge Facility Agreement to
make working capital available. The Bridge Facility Agreement to Mopani is financing the immediate working
capital needs and to sustain the operations before the completion of the Strategic Equity Partner (SEP) process.
The bridge facility agreement was a short-term recapitalisation of Mopani by ZCCM-IH. The facility carries an
annual interest rate of 8% plus a 30-day average Secured Overnight Financing Rate (SOFR) as published by the
Federal Reserve Bank of New York. The maturity date of the facility is 31
st
December 2035. As at 31 December
2023, the amount outstanding on the bridge facility was ZMW2.78 billion (US$107.84 million). After the year end
and upon conclusion of the SEP process, ZCCM-IH will immediately recover US$19 million, and the remaining
balance plus the interest will be restructured and carried as a shareholder loan.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
148
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
39 Contingent liabilities
(i) Maamba contingent liabilities
ZCCM-IH, being a co-owner of Maamba Collieries Limited (MCL) with Nava Bharat (Singapore) PTE Ltd (NBS), was
in 2017 required to contribute ZMW 162 million (US$9.75 million) in form of a shareholder loan towards Maamba’s
Base Project Equity according to its shareholding ratio of 35%. However, NBS contributed the whole amount
including the ZMW 215 million (US$9.75million) share for ZCCM-IH.
As a result, it was resolved that ZCCM-IH refunds NBS, interest free, the excess contribution through offset of
ZMW 27.1 million (US$1.23 million) interest payment which was due to ZCCM-IH from Maamba on the initial
outstanding shareholder loan of 31 May 2015. The balance of ZMW 141.68 million (US$8.52 million) was to be paid
by Maamba to NBS from future dividends of Maamba, payable to ZCCM-IH.
ZMW 27.1 million (US$1.23 million) was paid to NBS in 2017, however, no dividends have been received from
Maamba since 2017 to settle the balance. ZCCM-IH has determined that in the absence of dividends from
Maamba it has no present obligation to settle the outstanding balance.
For this reason, ZMW 187.9million (US$8.52 million) due to NBS has not been recognised in these financial
statements.
As at 31st December 2023, ZCCM-IH has provided Corporate Guarantees for the following credit facilities on
behalf of Mopani:
■ Overdraft facility dated 18 September 2023 with African Banking Corporation Zambia Limited with a
principal value of US$10 million, with an interest rate equal to the lender’s USD base rate minus 5% per
annum on a compounding basis and is repayable on demand;
■ Overdraft facility dated 16 May 2023 with Zambia National Commercial Bank plc with a principal value
of US$10 million, with an interest rate equal to the lender’s USD base rate minus 1.5% per annum on a
compounding basis and is repayable on demand;
■ Overdraft facility dated 15 June 2023 with Indo Zambia Bank Limited with a principal value of US$5 million,
with a processing fee of 1% per annum and is repayable on demand;
■ Overdraft facility dated 29 September 2023 with Ecobank Zambia Limited with a principal value of US$15
million, with an interest rate of 8.5% per annum compounding monthly, repayable on demand and
secured via assignment of receivables whereby Mopani channels US$30 million quarterly to its account
with Ecobank Zambia Limited;
■ Medium-term loan facility dated 16 May 2023 with Zambia National Commercial Bank plc with a principal
value of US$5 million, with an interest rate equal to the lender’s USD base rate minus 1.5% per annum on
a compounding basis, repayable through 36 monthly instalments from the date of disbursement and
secured via a subordination agreement and corporate guarantee provided by ZCCM-IH; and
■ Overdraft facility dated 8 November 2023 with Zambia Industrial Commercial Bank Limited with a principal
value of US$ 2.857 million with an interest rate of 11% per annum, repayable on demand and secured
via a letter of undertaking provided by Mopani to channel US$15 million bi-monthly to its account with
Zambia Industrial Commercial Bank Limited.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
149
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
39 Contingent liabilities (continued)
(ii) Assets pledged as security
Assets pledged as security amounting to ZMW22.48 billion (2022: 24.53 billion) relates to Mopani. The assets
pledged as security are specifically for Mopani’s liabilities. The carrying amounts of assets pledged as security
for the borrowings and included assets held for sale are:
| 31 Dec | |||
| 2023 | |||
| 31 Dec | |||
| 2022 | |||
| Assets | Notes | ||
| Property, plant, and equipment | 17 | 12,525,429 | 12,239,693 |
| Intangible assets | 19 | 3,121,181 | 4,579,133 |
| Trade and other receivables | 26 | 3,137,572 | 2,616,620 |
| Environmental protection fund | 27 | 147,553 | 94,433 |
| Inventories | |||
| 25 | |||
| 3,489,128 | 4,836,680 | ||
| Term deposits | 28 | - | 9,026.00 |
| Cash and cash equivalents | 29 | 58,367 | 159,584 |
| Total assets | 22,479,230 | 24,535,169 |
40 Commitments
Capital expenditure authorised by the Board of directors at the reporting date but not yet contracted for is as
follows:
| Group | Company | |||
| 31Dec | ||||
| 2023 | ||||
| 31Dec | ||||
| 2022 | ||||
| 31Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Property, plant, and equipment* | 5,113,296 | 337,519 | 43,835 | 35,118 |
| 5,113,296 | 337,519 | 43,835 | 35,118 |
* Included in capital commitments is a balance of was ZMW5.07 billion (US$247 million) relating to Mopani
authorised by the Board at the reporting date but not yet contracted as at 31 December 2023.
`
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
150
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management
The Group has exposure to the following risks arising from financial instruments:
■ Market risk (see (a))
■ Credit risk (see (b))
■ Liquidity risk (see (c))
(i) Risk management framework
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Group’s
risk management framework. The Board of Directors has established the audit and risk committee, which is
responsible for developing and monitoring the Group’s risk management policies. The committee reports
quarterly to the Board of Directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to
set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The
Group, through its training and management standards and procedures, aims to maintain a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Group audit committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to the risks
faced by the Group. The Group audit committee is assisted in its oversight role by internal audit. Internal audit
undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which
are reported to the audit committee.
(a) 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 Group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
(i) Exposure to currency risk
The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to
the US dollar. The Group is affected by foreign exchange movements on account of assets and income which
are denominated in currencies other than the Company’s functional currency, which is the Zambian Kwacha.
Management’s policy to manage foreign currency risk is to hold both functional and foreign currency fixed
deposits with various banks which act as a natural hedge for foreign currency obligations. Hedging techniques
such as currency swap are also used to manage currency risk. The Group did not enter into any transactions that
required currency swap technique during the year and the prior year.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
151
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(i) Exposure to currency risk (continued)
The summary quantitative data about the Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Zambian Kwacha is detailed
in the table below.
Group
| 2023 | ||||||||||
| ZMW equivalent | ||||||||||
| of US$ and | ||||||||||
| other foreign | ||||||||||
| currencies | US$ Amounts | |||||||||
| ZMW | ||||||||||
| equivalent | ||||||||||
| of EUR | ||||||||||
| and other | ||||||||||
| foreign | ||||||||||
| currencies | ||||||||||
| EUR | ||||||||||
| Amount | ||||||||||
| ZMW | ||||||||||
| equivalent | ||||||||||
| of GBP and | ||||||||||
| other foreign | ||||||||||
| currencies | ||||||||||
| GBP | ||||||||||
| Amount | ||||||||||
| ZMW | ||||||||||
| equivalent | ||||||||||
| of RAND | ||||||||||
| and other | ||||||||||
| foreign | ||||||||||
| currencies | ||||||||||
| RAND | ||||||||||
| Amount | ||||||||||
| ZMW | ||||||||||
| equivalent | ||||||||||
| of PULA and | ||||||||||
| other foreign | ||||||||||
| currencies | ||||||||||
| PULA | ||||||||||
| Amount | ||||||||||
| Cash and cash equivalents | 180,414 | 7,007 | - | - | - | - | 12 | 9 | - | - |
| Trade and other receivables | 1,831,666 | 71,142 | - | - | - | - | 35 | 25 | - | - |
| Term deposits | 4,023,712 | 156,282 | - | - | - | - | - | - | - | - |
| Assets held for sale | 157,163 | 6,104 | 11,302 | 397 | 6,117 | 186 | 64 | 46 | 83 | 60 |
| Borrowings | - | - | - | - | - | - | - | - | - | - |
| Bank overdraft | - | - | - | - | - | - | - | - | ||
| Trade and other payables | (108,524) | (4,215) | - | - | - | - | - | - | - | - |
| Liabilities directly associated | ||||||||||
| with assets classified as held | ||||||||||
| for sale | ||||||||||
| (54,506,470) | (2,117,044) | |||||||||
| (11,968) | (420) | (5,892) | (180) | (452) | (326) | |||||
| - | - | |||||||||
| Net exposure | (48,422,038) | (1,880,723) | (666) | (23) | 225 | 6 | (341) | (246) | 83 | 60 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
152
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(i) Exposure to currency risk (continued)
Group
| Dec 2022 | ||
| ZMW equivalent | ||
| of US$ and | ||
| other foreign | ||
| currencies | ||
| US$ Amounts | ||
| Cash and cash equivalents | 85,438 | 5,129 |
| Trade and other receivables | 506,340 | 30,399 |
| Term deposits | 4,550,140 | 273,175 |
| Assets held for sale | 248,840 | 14,940 |
| Borrowings | (25,343,567) | (1,521,542) |
| Trade and other payables | (5,088,232) | (305,480) |
| Liabilities directly associated with assets classified as held for sale | (254,297) | (15,267) |
| Net exposure | (25,295,338) | (1,518,646) |
The summary quantitative data about the Company’s exposure to foreign currency risk at the end of the
reporting period, expressed in Zambian Kwacha is detailed in the table below.
Company
| Dec 2023 | ||
| ZMW equivalent | ||
| of US$ and | ||
| other foreign | ||
| currencies | ||
| US$ Amounts | ||
| Cash and cash equivalents | 49,574 | 1,925 |
| Financial assets at fair value through comprehensive income | 11,200,732 | 435,039 |
| Trade and other receivables | 4,777,010 | 185,540 |
| Term deposits | 4,023,712 | 156,282 |
| Trade and other payables | ||
| (32,128) | (1,248) | |
| Net exposure | 20,018,900 | 777,538 |
| Dec 2022 | ||
| ZMW equivalent | ||
| of US$ and | ||
| other foreign | ||
| currencies | ||
| US$ Amounts | ||
| Cash and cash equivalents | 28,668 | 1,588 |
| Financial assets at fair value through comprehensive income | 16,226,587 | 898,855 |
| Trade and other receivables | 867,670 | 48,064 |
| Term deposits | 5,047,459 | 279,599 |
| Borrowings | - | - |
| Trade and other payables | (178) | (10) |
| Net exposure | 22,170,206 | 1,228,096 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
153
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(i) Exposure to currency risk (continued)
The following significant exchange rates have been applied during the year:
| Average rate | Reporting date spot rate | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Kwacha | ||||
| US$ 1 | 20.52413 | 17.0500 | 25.7465 | 18.0525 |
Sensitivity analysis
A 10 percent strengthening of the Kwacha against the US Dollar at 31 December 2023 would have increased
(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables,
in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. The analysis
is performed on the same basis for 31 December 2022.
| Equity and profit or loss | ||
| Group | Company | |
| 31 Dec 2023 | ||
| ZMW | (4,842,274) | 2,001,890 |
| 31 Dec 2022 | ||
| ZMW | (2,772,587) | 2,217,021 |
A 10 percent weakening of the Kwacha against the US Dollar at 31 December 2023 would have had the equal
but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables
remain constant.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
154
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(ii) Exposure to interest rate risk
The Group’s operations are subject to cash flow variability due to the risk of interest rate fluctuations to the extent that interest-earning assets (including
investments) and interest-bearing liabilities mature or reprice at different times and/or in differing amounts. In the case of floating rate assets and liabilities the
Group is also exposed to basis risk, which is the difference in repricing characteristics of the various floating rate indices. Asset-liability risk management activities
are conducted in the context of the Group’s sensitivity to cash flow variability attributable to interest rate changes.
| Group | 31 December 2023 | 31 December 2022 | ||||||
| Total | ||||||||
| Zero rate | ||||||||
| instruments | ||||||||
| Floating rate | ||||||||
| instruments | ||||||||
| Fixed rate | ||||||||
| instruments | Total | |||||||
| Zero rate instru- | ||||||||
| ments | ||||||||
| Floating rate | ||||||||
| instruments | ||||||||
| Fixed rate | ||||||||
| instruments | ||||||||
| Assets | ||||||||
| Cash and cash equivalents | 360,356 | - | - | 360,356 | 329,173 | - | - | 329,173 |
| Trade and other receiv- | ||||||||
| ables* | 1,899,338 | 270,501 | - | 1,628,837 | 1,366,758 | 463,274 | - | 903,484 |
| Assets held for sale | 1 ,661,908 | 656,893 | 1,005,015 | 1,919,407 | 1,090,196 | - | 829,211 | |
| Term deposits | 4,450,451 | - | - | 4,450,451 | 5,340,202 | - | - | 5,340,202 |
| Total assets | 8,372,053 | 927,394 | - | 7,444,659 | 8,955,540 | 1,553,470 | - | 7,402,070 |
| Liabilities | ||||||||
| Borrowings | - | - | - | - | (28,341,270) | - | (28,341,270) | - |
| Bank overdraft | - | - | - | (688,120) | - | - | (688,120) | |
| Trade and other payables* | (177,076) | (177,076) | - | - | (5,611,121) | (5,611,121) | - | - |
| Liabilities directly associated | ||||||||
| with assets classified as held | ||||||||
| for sale | (56,466,686) | |||||||
| (11,354,896) | ||||||||
| (43,518,155) | ||||||||
| (1,593,635) | (2,255,562) | (2,255,562) | ||||||
| - | ||||||||
| - | ||||||||
| Total liabilities | (56,643,762) | (11,531,972) | (43,518,155) | (1,593,635) | (36,896,073) | (7,866,683) | (28,341,270) | (688,120) |
| Gap | (48,271,709) | (10,604,578) | (43,518,155) | 5,851,024 | (27,940,533) | (6,313,213) | (28,341,270) | 6,713,950 |
The interest rate gap is measured on an ongoing basis to assess the impact of the exposure after which corrective measures are deliberated. These may include
contract renegotiation and use of money market options to hedge against significant change in variable interest rates.
*Trade and other receivables/payables, excludes prepayments and statutory obligations and contract liabilities respectively. Statutory liabilities are imposed by
law while contract liabilities represent an obligation to deliver a good or service rather than cash or other assets in settlement. Therefore, these do not meet the
definition of financial instruments and have been excluded from the table above.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
155
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(ii) Exposure to interest rate risk (continued)
Company
| 31 December 2023 | |||||||
| Total | |||||||
| Zero rate instru- | |||||||
| ments | |||||||
| Floating rate | |||||||
| instruments | |||||||
| Fixed rate instru- | |||||||
| ments | Total | ||||||
| Zero rate instru- | |||||||
| ments | |||||||
| Fixed rate instru- | |||||||
| ments | |||||||
| Assets | |||||||
| Cash and cash | |||||||
| equivalents | 61,137 | - | - | 61,137 | 45,586 | - | 45,586 |
| Trade and other | |||||||
| receivables* | 4,581,312 | 243,605 | 2,762,615 | 1,575,092 | 860,493 | 11,051 | 849,442 |
| Term deposits | 4,411,330 | - | - | 4,411,330 | 5,340,202 | - | 5,340,202 |
| Total assets | |||||||
| 9,053,779 | 243,605 | 2,762,615 | |||||
| 6,047,559 | |||||||
| 6,246,281 | 11,051 | ||||||
| 6,235,230 | |||||||
| Liabilities | |||||||
| Trade and other | |||||||
| payables* | (25,643) | (25,643) | - | - | (105,231) | (105,231) | - |
| Total liabilities | (25,643) | (25,643) | - | - | (105,231) | (105,231) | - |
| Gap | 9,028,136 | 217,962 | 2,762,615 | 6,047,559 | 6,141,050 | (94,180) | 6,235,230 |
*Trade and other receivables/payables, excludes prepayments and statutory obligations and contract liabilities respectively. Statutory liabilities are imposed by
law while contract liabilities represent an obligation to deliver a good or service rather than cash or other assets in settlement. Therefore, these do not meet the
definition of financial instruments and have been excluded from the table above.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
156
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(ii) Exposure to interest rate risk (continued)
Risks arising from the interest rate benchmark reform
The key risks for the Group arising from the transition are:
■ Interest rate basis risk: There are two elements to this risk as outlined below:
If the bilateral negotiations with the Group’s counterparties are not successfully concluded before the
cessation of IBORs, there are significant uncertainties with regard to the interest rate that would apply. This
gives rise to additional interest rate risk that was not anticipated when the contracts were entered into and
is not captured by our interest rate risk management strategy. For example, in some cases the fallback
clauses in IBOR loan contracts may result in the interest rate becoming fixed for the remaining term at the
last IBOR quote. The Group is working closely with all counterparties to avoid this from occurring, however
if this does arise, the Group’s interest rate risk management policy will apply as normal and may result
in closing out or entering into new interest rate swaps to maintain the mix of floating rate and fixed rate
debt.
■ Interest rate risk basis may arise if a non-derivative instrument held to manage the interest risk on the non-
derivative instrument transition to alternative benchmark rates at different times. The Group will monitor
this risk against its risk management policy which has been updated to allow for temporary mismatches
of up to 12 months and transact additional basis interest rate swaps if required.
■ Liquidity risk: There are fundamental differences between IBORs and the various alternative benchmark
rates which the Company will be adopting. IBORs are forward looking term rates published for a period
(e.g. 3 months) at the beginning of that period and include an inter-bank credit spread, whereas
alternative benchmark rates are typically risk-free overnight rates published at the end of the overnight
period with no embedded credit spread. These differences will result in additional uncertainty regarding
floating rate interest payments which will require additional liquidity management. The Group’s liquidity
risk management policy has been updated to ensure sufficient liquid resources to accommodate
unexpected increases in overnight rates.
■ Accounting: If transition to alternative benchmark rates for certain contracts is finalised in a manner that
does not permit the application of the reliefs introduced in the Phase 2 amendments, this could lead to
volatility in the profit or loss if nonderivative financial instruments are modified or derecognised. The Group
is aiming to agree changes to contracts that would allow IFRS 9 reliefs to apply.
■ Litigation risk: If no agreement is reached to implement the interest rate benchmark reform on existing
contracts, (e.g., arising from differing interpretation of existing fallback terms), there is a risk of prolonged
disputes with counterparties which could give rise to additional legal and other costs. The Group is working
closely with all counterparties to avoid this from occurring.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
157
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(ii) Exposure to interest rate risk (continued)
Interest rate risk
The Group’s interest rate risk arises primarily from the interest received on short term deposits and variable interest
long term borrowings. This exposes the Group to cash flow interest risk.
Cash flow sensitivity analysis of variable rate instrument
A reasonable possible change of 100 basis points in interest rates at the reporting date would have increased /
(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables,
in particular foreign currency exchange, remain constant.
Group
| Effect in thousands of Kwacha | Profit or loss | |
| Increase | ||
| Decrease | ||
| 31 Dec 2023 | ||
| Variable rate instruments | ||
| 43,518 | (43,518) | |
| 31 Dec 2022 | ||
| Variable rate instruments | 28,341 | (28,341) |
Company
| 31 Dec 2023 | ||
| Variable rate instruments | (2,762.62) | 2,762.62 |
| 31 Dec 2022 | ||
| Variable rate instruments | - | |
| - |
The Group’s investments in corporate term deposits, all of which are fixed rate and are measured at amortised
cost exposes the Group to cash flow interest rate risk. The tenure of the investments is mostly less than 1 year. At
31 December 2023, an increase/decrease of 100 basis points would have resulted in a decrease/increase in
the Consolidated and separate post tax profit and equity of ZMW43.5 million (December 2022: ZMW28.3 million).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
158
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(a) Market risk (continued)
(iii) Price risk
The Group is exposed to equity securities price risk because of investments in quoted and unquoted shares
classified as financial assets at fair value through profit or loss. To manage its price risk arising from investments
in equity and debt securities, the Group diversifies its portfolio, in accordance with limits set by the Group. All
quoted shares held by the Group are traded on the Lusaka Securities Exchange. Further, management of the
Group monitors the proportion of equity securities in its investment portfolio based on market indices. Material
investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved
by the Investment Committee of the Board.
The primary goal of the Group’s investment strategy is to maximise investment returns and to improve its returns
in general. Management is assisted by external advisers in this regard.
At 31 December 2023, if the LUSE Index had increased/decreased by five percent with all other variables held
constant and all the Group’s equity instruments moved according to the historical correlation to the index, con-
solidated equity and profit or loss would have been ZMW178.96 million (2022: ZMW81.33 million) higher/lower.
Commodity price risk
General corporate hedging unrelated to any specific project is not undertaken by the Group. The Group
also does not issue or acquire derivative instruments for trading purposes.
The Group is subject to price risk from fluctuations in the market prices of copper and gold. The impact of a 10%
movement on commodity prices with all other variables held constant, consolidated equity and profit or loss
would have been ZMW1.16 billion higher/lower (2022: ZMW1.9 billion higher/lower)
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
159
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from the Group’s from cash and cash equivalents, term
deposits with banks, as well as trade and other receivables. Credit risk is managed on a Group basis.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty.
However, management also considers the factors that may influence the credit risk of its counterparty base,
including the default risk associated with the industry.
(i) Risk management
The Group through risk and audit committee has established a credit procedure under which each new customer
or counterparty is analysed individually for creditworthiness before the Group’s standard payment and delivery
terms and conditions are offered. The Group’s review includes external ratings, if they are available, financial
statements, credit agency information, industry information and in some cases bank references. Sale limits are
established for each customer and monitored regularly by line management.
(ii) Security
To limit the amount of credit exposure to financial institution for term deposits, the Group obtains collateral from
financial institutions which are rated “B” and below. As at 31 December 2023, ZMM680.77 million (December
2022: ZMW571.60 million) of term deposits, collateral was held in the form of treasury bills and government bonds.
Due to the short-term nature of collateral held for term deposits, their carrying amounts approximates their fair
values. No collateral is obtained as security for trade and other receivables. Instead, the Group requests for
advance payments where necessary to reduce credit risk on some customers.
The amount that best represents the Group’s and Company’s maximum exposure to credit risk at 31 December
2023 is made up as follows:
| Group | Company | |||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | |
| 2023 | 2022 | 2023 | 2022 | |
| Cash and cash equivalents | 360,356 | 329,173 | 61,137 | 45,586 |
| Trade and other receivables | 1,899,338 | 1,366,758 | 4,581,312 | 860,493 |
| Term deposits | ||||
| 4,450,451 | 5,340,202 | 4,411,330 | 5,340,202 | |
| 6,710,145 | 7,036,518 | 9,053,779 | 6,246,281 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
160
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(b) Credit risk (continued)
(iii) Impairment of financial assets
The Group applies the Simplified Approach to assess and measure expected credit losses (ECLs) for cash and
cash equivalents, financial instruments at amortised costs and contract assets. The simplified approach entails
recognising the ECL on the lifetime of the balance due to the Group. It involves the calculation of the loss rates
to categories of the third parties that is then applied to the balance. The categorization is done both per unique
characteristics and time the balances are outstanding.
The loss rates is derived using the Group’s own historical credit loss experience and adjust for both current and
forward-looking information. The information is evaluated for its appropriateness in light of market changes so
as to remain relevant and provide valid assessment results. To calculate ECL, trade and other receivables are
grouped based on shared credit risk characteristics and the days past due.
The Group’s historical credit loss experience does not indicate significantly different loss patterns for the various
customer segments. In calculating the expected credit loss rates, the Group considers historical loss rates for
each category of customers. Historical loss rates are adjusted to reflect current and forward-looking information
on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has
identified long term consensus copper price of $3/lb or 6,615/MT, gross domestic product projected growth
of 4% for Zambia, inflation rate for Zambia projected to trend around 8% and 10%, The group considers these
factors in which it sells its goods and services to be the most relevant and, accordingly, adjusts the historical loss
rates based on expected changes in these factors.
The Group’s historical credit loss experience does not show significantly different loss patterns for the various
customer segments. Therefore, the grouping of trade receivables is not disaggregated into further risk profiles
other than days past due.
There were no changes in the estimating techniques or significant assumptions made as at the reporting period.
The loss allowance as at reporting date was determined as follows:
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
161
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(b) Credit risk (continued)
Trade receivables (Excludes prepayments, statutory receivables and other receivables)
Group
31 December 2023
| Gross | Lifetime | |||
| expected | ||||
| credit loss | ||||
| Net | Estimated rate | |||
| of Default (%) | ||||
| Not due | 1,935,205 | (14,090) | 1,921,115 | 0.73 |
| Past due 30 - 60 days | 2,657 | (1,231) | 1,426 | 46.33 |
| Past due 61 – 90 days | 5,237 | (2,283) | 2,954 | 43.59 |
| Past due 91 - 120 days | 6,006 | (4,983) | 1,023 | 82.97 |
| Over 121 days | 1,147,202 | (1,144,659) | 2,543 | 99.78 |
| 3,096,307 | (1,167,246) | 1,929,061 |
31 December 2022
| Gross | ||||
| Lifetime | ||||
| expected | ||||
| credit loss | Net | |||
| Estimated rate | ||||
| of Default (%) | ||||
| Not due | 3,928,200 | (253,993) | 3,674,207 | 6.47 |
| Past due 30 - 60 days | 12,218 | (798) | 11,420 | 6.53 |
| Past due 61 – 90 days | 4,893 | (303) | 4,590 | 6.19 |
| Past due 91 - 120 days | 5,792 | (1,639) | 4,153 | 28.30 |
| Over 121 days | 2,426,992 | (2,426,992) | - | 100.00 |
| 6,378,095 | (2,683,725) | 3,694,370 |
Company
31 December 2023
| Gross | ||||
| Lifetime | ||||
| expected | ||||
| credit loss | Net | |||
| Estimated rate of | ||||
| Default (%) | ||||
| Not due | 4,900,413 | (28,592) | 4,871,821 | 0.58 |
| Past due 30 - 60 days | 1,044 | (1,044) | - | 100.00 |
| Past due 61 - 90 days | 841 | (841) | - | 100.00 |
| Past due 91 - 120 days | 221 | (221) | - | 100.00 |
| Over 121days | 1,190,455 | (1,190,455) | - | 100.00 |
| 6,092,974 | (1,221,153) | 4,871,821 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
162
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(b) Credit risk (continued)
(iii) Impairment of financial assets (continued)
Company
31 December 2022
| Gross | ||||
| Lifetime | ||||
| expected | ||||
| credit loss | Net | |||
| Estimated rate of | ||||
| Default (%) | ||||
| Not due | 1,383,953 | (253,085) | 1,130,868 | 18.29 |
| Past due 30 - 60 days | 1,340 | (686) | 654 | 51.19 |
| Past due 61 - 90 days | 655 | (303) | 352 | 46.26 |
| Past due 91 - 120 days | 713 | (596) | 117 | 83.59 |
| Over 121days | 913,533 | (913,533) | - | 100.00 |
| 2,300,194 | (1,168,203) | 1,131,991 |
As at 31 December 2023 an expected credit loss of ZMW341.19 million was recognised in the Company mainly
relating to KCM which has been under liquidation since 2019. These amounts have been impaired in accordance
with the Company’s expected credit loss model.
No trade receivables has been written off during the year.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent
recoveries of amounts previously written off are credited against the same line item.
The loss allowance recognised is categorised as follows:
| Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| ZMW’000 | ZMW’000 | ZMW’000 | ZMW’000 | |
| Performing debtors | 23,144 | 2,494 | 22,267 | 1,403 |
| Non-performing debtors | 318,046 | 46,851 | 318,923 | 48,013 |
| 341,190 | 49,345 | 341,190 | 49,416 |
Cash and cash equivalents
While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified
impairment loss was immaterial. To limit the amount of credit exposure to financial institution for cash and cash
equivalent, cash and cash equivalents are held with banks which are rated A.
Term deposits and other financial assets
Term deposits and other financial assets at amortised cost relate to staff debtors are considered to have a low
risk of default and the counterparts have a strong capacity to meet their contractual cash flow obligations in
the near term.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
163
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(c) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to
meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flows. The
Group maintains the level of its cash flow and cash equivalents and other highly marketable debt investments
at an amount in excess of expected cash outflows on financial liabilities through cash flow forecasts.
(i) Financing arrangements
The Group had no undrawn borrowing facilities at the end of the reporting period (2020: Nil).
(ii) Maturities of financial liabilities
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts
are gross and undiscounted and include estimated interest payments and exclude the impact of netting
agreements. Balances due within 12 months equal their carrying balances as the impact of discounting is not
significant.
Group
| Carrying | ||||
| amount | ||||
| Contractual | ||||
| amount | ||||
| Within 1 year | ||||
| 2 -5 years | ||||
| At 31 December 2023 | ||||
| Financial liabilities | ||||
| Borrowings | - | - | - | - |
| Overdraft | - | - | - | - |
| Trade and other payables | 177,076 | 177,076 | 177,076 | - |
| Liabilities directly associated with assets | ||||
| classified as held for sale | 56,466,686 | 57,294,412 | 57,294,412 | - |
| 56,643,762 | 57,471,488 | 57,471,488 | - |
| Gross | ||||
| Lifetime | ||||
| expected | ||||
| credit loss | Net | |||
| Estimated rate | ||||
| of Default (%) | ||||
| At 31 December 2022 | ||||
| Financial liabilities | ||||
| Borrowings | 28,341,270 | 28,341,270 | - | 28,341,270 |
| Overdraft | 688,120 | 688,120 | 688,120 | - |
| Trade and other payables | 5,611,121 | 5,611,121 | 5,611,121 | - |
| Liabilities directly associated with assets | ||||
| classified as held for sale | 2,255,562 | 2,255,562 | 2,255,562 | - |
| 36,896,073 | 36,896,073 | 8,554,803 | 28,341,270 |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
164
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(c) Liquidity risk (continued)
Company
| Carrying | ||||
| amount | ||||
| Contractual | ||||
| amount | ||||
| Within 1 | ||||
| year | ||||
| 2 - 5 years | ||||
| At 31 Dec 2023 | ||||
| Financial liabilities | ||||
| Trade and other payables | 25,643 | 25,643 | 25,643 | - |
| 25,643 | 25,643 | 25,643 | - |
| Carrying | ||||
| amount | ||||
| Contractual | ||||
| amount | ||||
| Within1 | ||||
| year | ||||
| 2 - 5 years | ||||
| At 31 Dec 2022 | ||||
| Financial liabilities | ||||
| Borrowings | - | - | - | - |
| Trade and other payables | 105,231 | 105,231 | 105,231 | - |
| 105,231 | 105,231 | 105,231 | - |
(iii) Capital management
The scope of the Group management framework covers the Group’s total equity reported in its financial
statements.
The Group’s and Company objectives when managing capital are to safeguard their ability to continue as
a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the number
of dividends paid to shareholders, issue new capital or sell assets to reduce debt.
The Board’s policy is to implement a sound financial strategy that ensures financial independence and maintains
adequate capital to sustain the long terms objectives of the Group and to meet its operational and capital
budget.
The Group monitors capital on the basis of the average gearing ratio in the industry, in Zambia which currently
stands at below 50% of equity. This ratio is calculated as net debt divided by total capital. Net debt is calculated
as total borrowings less cash and cash equivalents. Total capital is calculated as equity plus net debt. The
gearing ratios at 31 Dec 2023 and 31 Dec 2022 were as follows:
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
165
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(c) Liquidity risk (continued)
(iii) Capital management (continued)
| Group | Company | |||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| 31 Dec | ||||
| 2023 | ||||
| 31 Dec | ||||
| 2022 | ||||
| Borrowings | - | 28,341,270 | - | - |
| Bank overdraft | - | 688,120 | - | - |
| Less: cash and cash equivalents | (360,356) | (329,173) | (61,137) | (45,586) |
| Net debt | (360,356) | 28,700,217 | (61,137) | (45,586) |
| Total equity | (5,690,634) | 7,908,807 | 37,422,019 | 24,679,852 |
| Total capital | (6,050,990) | 36,609,024 | 37,360,882 | 24,634,266 |
| Gearing ratio | 5.96% | 78.40% | 0% | 0% |
The interest rates used to discount estimated cash flows when applicable are based on the government yield
curve at the reporting date plus an appropriate credit spread, and are as follows:
| 31 Dec | ||
| 2023 | ||
| 31 Dec | ||
| 2022 | ||
| Loans and borrowings | 14.21% | 12.21% |
There has been no change in management of capital during the year.
(iv) Fair value estimation
The Group classifies its financial assets in the following measurement categories:
(i) those to be measured subsequently at fair value (either through OCI or through profit or loss): and
(ii) those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss
or OCI. Financial liabilities are recorded initially at fair value and subsequently measured at amortised cost using
the effective interest rate method except for derivative instruments that continue to be measured at fair value.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
166
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(c) Liquidity risk (continued)
(iv) Fair value estimation (continued)
The fair value of the financial assets and liabilities carried at amortised cost including cash and cash equivalents,
trade and other receivables, term deposits, borrowings and trade and other payables are considered to
approximate their respective carrying values due to their short-term nature and negligible credit losses.
| Group – 2023 | ||||
| Financial assets | ||||
| at FVTPL | ||||
| Financial | ||||
| liabilities at | ||||
| FVTPL | ||||
| Financial | ||||
| assets at | ||||
| amortised | ||||
| cost | ||||
| Financial | ||||
| liabilities at | ||||
| amortised | ||||
| cost | ||||
| Financial assets at fair value through profit | ||||
| or loss | 3,019,500 | - | - | - |
| Cash and cash equivalents | - | - | 360,356 | - |
| Trade and other receivables | - | - | 1,899,338 | - |
| Term deposits | - | - | 4,411,330 | - |
| Assets classified as held for sale | 584 | - | 1,661,324 | - |
| Financial liabilities | ||||
| Borrowings | - | - | - | - |
| Bank overdraft | - | - | - | - |
| Trade and other payables | - | - | - | (177,076) |
| Liabilities directly associated with assets | ||||
| classified as held for sale | - | - | - | |
| (56,466,686) | ||||
| 3,020,084 | - | 8,332,348 | (56,643,762) |
| Group – 2022 | ||||
| Financial assets | ||||
| at FVTPL | ||||
| Financial | ||||
| liabilities at | ||||
| FVTPL | ||||
| Financial | ||||
| assets at | ||||
| amortised | ||||
| cost | ||||
| Financial | ||||
| liabilities at | ||||
| amortised | ||||
| cost | ||||
| Financial assets at fair value through profit | ||||
| or loss | 1,252,400 | - | - | - |
| Cash and cash equivalents | - | - | 329,173 | - |
| Trade and other receivables | - | - | 1,366,758 | - |
| Term deposits | - | - | 5,340,202 | - |
| Assets classified as held for sale | 584 | - | 1,918,823 | - |
| Financial liabilities | ||||
| Borrowings | - | - | - | (28,341,270) |
| Bank overdraft | - | - | - | (688,120) |
| Trade and other payables | - | - | - | (5,611,992) |
| Liabilities directly associated with assets | ||||
| classified as held for sale | - | - | - | |
| (2,272,861) | ||||
| 1,252,984 | - | 8,954,956 | (36,914,243) |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
167
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
41 Financial risk management (continued)
(c) Liquidity risk (continued)
(iv) Fair value estimation (continued)
| Company – 2023 | |||||
| Financial | |||||
| assets at | |||||
| FVTPL | |||||
| Financial | |||||
| assets at | |||||
| FVTOCI | |||||
| Financial | |||||
| liabilities at | |||||
| FVTPL | |||||
| Financial | |||||
| assets at | |||||
| amortised | |||||
| cost | |||||
| Financial | |||||
| liabilities at | |||||
| amortised | |||||
| cost | |||||
| Financial assets at fair value through | |||||
| profit or loss | |||||
| 3,019,500 | - | - | - | - | |
| Investments in associates | - | 11,240,080 | - | - | - |
| Investments in subsidiaries | - | 282,384 | - | - | - |
| Cash and cash equivalents | - | - | - | 61,137 | - |
| Trade and other receivables | - | - | - | 4,581,312 | - |
| Term deposits | - | - | - | 4,411,330 | - |
| Assets classified as held for sale | |||||
| - | - | - | - | - | |
| Financial liabilities | |||||
| Trade and other payables | - | - | - | - | (25,643) |
| 3,019,500 | |||||
| 11,522,464 | |||||
| - | 9,053,779 | (25,643) |
| Company – 2022 | |||||
| Financial | |||||
| assets at | |||||
| FVTPL | |||||
| Financial | |||||
| assets at | |||||
| FVTOCI | |||||
| Financial | |||||
| liabilities at | |||||
| FVTPL | |||||
| Financial | |||||
| assets at | |||||
| amortised | |||||
| cost | |||||
| Financial | |||||
| liabilities at | |||||
| amortised | |||||
| cost | |||||
| Financial assets at fair value through | |||||
| profit or loss | |||||
| 1,252,400 | - | - | - | ||
| Investments in associates | - | 16,256,411 | - | - | - |
| Investments in subsidiaries | - | 405,051 | - | - | - |
| Cash and cash equivalents | |||||
| - | - | 45,586 | - | ||
| Trade and other receivables | |||||
| - | - | 860,493 | - | ||
| Term deposits | |||||
| - | - | 5,340,202 | - | ||
| Assets classified as held for sale | 145,700 | - | - | - | - |
| Financial liabilities | |||||
| Trade and other payables | |||||
| - | - | - | (105,231) | ||
| 1,398,100 | 16,661,462 | - | 6,246,281 | (105,231) |
Valuation techniques and sensitivity analysis are included in note 23 and 24.
The fair value of the financial assets and liabilities carried at amortised cost including cash and cash equivalents,
trade and other receivables, term deposits, borrowings and trade and other payables are considered to
approximate their respective carrying values due to their short-term nature and negligible credit losses.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
168
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
42 Subsequent events
(i) Konkola Copper Mines Plc (KCM) Court proceeding
Winding Up Proceedings (Lusaka Proceedings).
ZCCM-IH and Vedanta Resources Group have agreed to reset the relationship which resulted in the execution of
an Implementation Agreement, and a New Shareholders Agreement on 6th November 2023. Subsequently, the
parties entered into a Global Settlement Agreement which effectively resolved all disputes between the parties.
The legal processes to withdraw the winding up petition in the Zambian Courts and the Arbitration proceedings
in South Africa are currently being attended to.
(ii) Mopani Copper Mines (MCM)
After the year end, and at an Extraordinary Meeting of the shareholders of ZCCM-IH held on Friday 23 February
2024, the shareholders approved the ZCCM-IH for the transaction relating to up to a US$1.1 billion investment by
International Resources Holding RSC Limited (“IRH”), through its wholly owned subsidiary, Delta Mining Limited
(“Delta”), for a 51% interest in Mopani Copper Mines plc (“Mopani”). This investment will comprise of US$620
million in new equity capital and shareholder loans (the “Transaction”). The transaction is to be implemented by
the following steps outlined in and in accordance with the terms of the Transaction Agreements:
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
169
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
42 Subsequent events (continued)
(ii) Mopani Copper Mines (MCM) (continued)
■ On the Closing Date (being the date at which completion of the subscription by Delta for the
Investor Shares occurs), Mopani shall issue, and Delta shall subscribe for 7,181,633 ordinary shares
in Mopani, comprising 51% of the entire issued share capital of Mopani, at a total price of US$620
million being a price per share of US$86.33 of which US$85.33 per share is share premium.
■ On the Closing Date, Mopani shall issue and the Government of the Republic of Zambia shall
subscribe for 1 special ordinary share which, in accordance with the terms of the Shareholders’
Agreement and Mopani’s new Articles of Association, shall grant the bearer of such share certain
special shareholder rights in respect of Mopani.
■ On the Closing Date, Mopani shall repay US$19 million of the bridge facility agreement dated 20
January 2023, as amended, and restated from time to time, and presently between ZCCM-IH as
lender and Mopani as borrower and this bridge loan agreement shall be amended and restated in
accordance with the terms of the ZCCM Amendment and Restatement Agreement into the ZCCM
Shareholder Loan Agreement
■ Prior to or on the Closing Date, Delta shall pay Glencore US$400 million who shall also receive
payment, in accordance with the terms of the Glencore Payment Covenant, of US$150 million
and the benefit of the Glencore Royalty Agreement, as a result of which the current debt owed by
Mopani to Glencore shall be dealt with as follows:
(a) facility agreements dated 25 July 2013 and 31 March 2000 as consolidated, amended and restated from
time to time and both presently between Glencore and Mopani, shall be novated from Glencore to Delta
in accordance with the Glencore Novation Deed and amended, consolidated and restated effective as
of the Closing Date in accordance with the terms of the IRH ACRA into the Investor Loan Agreement.
(b) cathode and anode slimes offtake agreements dated 31 March 2021, as amended from time to time,
and presently between Carlisa, Glencore and Mopani will be terminated effective as of the Closing Date
in accordance with the terms of the Offtake Deed of Termination.
(c) a charge over all assets of Mopani shall be granted by Mopani in favour of Delta as security for Mopani’s
obligations under the Investor Loan Agreement, in accordance with the terms of the Investor Loan Security
Agreement; and
(d) Glencore shall release the following security it holds over Mopani in accordance with the Finance
Documents Release Deed:
■ floating and fixed charges granted by Mopani in favour of Glencore dated 31 March 2021; and
■ a share charge agreement between ZCCM-IH, Mopani and Glencore dated 31 March 2021.
(e) With effect from the Closing Date, Mopani and Delta shall enter into the Delta Trading Offtake Agreement.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
170
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
42 Subsequent events (continued)
(iii) Payment of US$150,000,000 Glencore Payment Covenant
Subsequent to 31 December 2023 and following the finalisation of the Mopani Transaction, ZCCM-IH entered
into an agreement with the Government of the Republic of Zambia (GRZ) for the settlement of US$150 million
plus interest to be paid by GRZ to Glencore on behalf of ZCCM IH. The US$150 million was a partial consideration
for the write-down of the MCM’s debt to Glencore. The loan agreement has zero interest with a repayment
moratorium of five years and provides GRZ with an option to convert the loan into equity, subject to shareholders’
and regulatory approvals.
As at 21 March 2024, IRH had provided MCM with US$220 million in funding.
(iv) Investrust Bank Plc
On April 2, 2024, the Bank of Zambia (“BoZ”) took possession of Investrust Bank Plc (“Investrust”). The possession of
Investrust by BOZ was necessitated by its insolvency. On 24 April 2024, the Bank of Zambia terminated all interests
of shareholders in Investrust.
43 Basis of measurement
The consolidated and separate financial statements have been prepared on the historical cost basis except for
the following items which are measured on an alternative basis on each reporting date.
| Items | Measurement basis |
| Financial assets at fair value through profit or loss | |
| Investments in associates (Company) | |
| Investment property | |
| Investment in subsidiary | |
| Retirement benefits | |
| Fair value | |
| Fair value | |
| Fair value | |
| Fair value | |
| Present value of the defined obligation | |
| revaluation |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
171
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies
The Group has consistently applied the following accounting policies to all policies to all periods presented in
these financial statements. Certain comparative amounts in the statement of profit or loss and OCI have been
re-presented, to ensure consistency (see Note 7,8 and 13).
Set out below is an index of the significant accounting policies, the details of which are available on the pages
that follow:
| (a) | Basis of consolidation |
| (b) | Foreign currency |
| (c) | Discontinued operation |
| (d) | Financial instruments |
| (e) | Property, plant and equipment |
| (f) | Investment property |
| (g) | Intangible assets |
| (h) | Assets held for sale |
| (i) | Inventories |
| (j) | Impairment |
| (k) | Employee benefits |
| (l) | Provisions and contingent liabilities |
| (m) | Revenue from contracts with customers |
| (n) | Investments income and expenses |
| (o) | Finance income and costs |
| (p) | Exploration costs |
| (q) | Income tax |
| (r) | Earnings per share |
| (s) | Segment reporting |
| (t) | Share capital |
| (u) | Dividend |
| (v) | Mine Developments |
| (w) | Environmental restoration |
(a) Basis of consolidation
(i) Business combinations
The Group accounts for business combinations using the acquisition method 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 are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired. 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.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
172
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(a) Basis of consolidation (continued)
(i) Business combinations
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 value of the replacement awards compared
with the market-based value of the acquiree’s awards and the extent to which the replacement awards relate
to pre-combination service.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when 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.
In the separate financial statements, investments in subsidiaries are classified as fair value through other
comprehensive income (OCI).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
173
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(a) Basis of consolidation (continued)
(iii) Non-controlling interests (NCI)
The group recognises non-controlling interests in an acquired entity either at fair value or at the noncontrolling
interest’s proportionate share of the acquired entity’s net identifiable assets. This decision is made on an
acquisition-by-acquisition basis.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions.
The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and
the non-controlling interests based on their respective ownership interests.
(iv) Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any
related Non-controlling interests (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) Interest in equity accounted investees
The Group’s interest in equity accounted investees comprise interests in associates.
Associates are those entities in which the Group has significant influence, but not control or joint control over
the financial and operating policies. Interests in associates are accounted for using the equity method. They are
initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated
financial statements include the Group’s share of the profit or loss and other comprehensive income, after
adjustments to align the accounting policies with those of the Group, from the date that significant influence
commences until the date that significant influence ceases.
In the separate financial statements investments in associates is subsequently measured at fair value. These are
classified as fair value through other comprehensive income.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of
the investment, including any long-term interests that form part thereof is reduced to zero, and the recognition
of further losses is discontinued except to the extent that the Group has an obligation or has made payments on
behalf of the investee.
(vi) Transactions eliminated on consolidation
Intra-group balances and transactions, fair value changes recognised in respect of its investment in subsidiaries
and associates, and any unrealised income and expenses arising from intra group transactions, are eliminated.
Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment
to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
174
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(a) Basis of consolidation (continued)
(vii) Remeasurement of previously held equity interest – Step up Acquisition
A step acquisition occurs when a shareholder obtains control over an entity by acquiring an additional interest in
that entity. If that entity is a business, the group’s previously held equity interest is remeasured to fair value at the
date the controlling interest is acquired. The remeasurement of the previously held equity interest is recognized
in Profit or loss. Any amounts previously recorded in other comprehensive income relating to the investee is
reclassified and included in the calculation of the gain or loss as of the acquisition date.
(viii) Reporting date
The financial statements of the Company and subsidiaries used in the preparation of the current consolidated
financial statements have the same reporting date of 31 December. When the end of the reporting date of
the Company is different from that of the subsidiary or associates, the Company consolidates the financial
information of the subsidiaries or associates using the most recent financial statements of the subsidiaries or
associates adjusted for the effects of significant transactions or events that occur between the date of those
financial statements and the date of the consolidated financial statements.
(ix) Price Participation Fee
Price Participation fees are variable amount, if any, to be credited to the seller as an additional income based on
variations in the Payable Copper Price, if, as and when reflected in Benchmark Reference Terms from time to time.
The price participation fees are recognised once conditions indicate that additional income is to be received,
based on prevailing prices over the agreed period, and that its been agreed with other parties involved, in this
case the buyer.
(b) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies
are translated to the functional currency at the exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured at fair value in foreign currency are translated to the functional currency at the
exchange rate when the fair value was determined. Non-monetary items that are measured based on historical
cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency
differences are generally recognised in profit or loss and presented within finance costs.
However, foreign currency differences arising from the translation of the following items are recognised in other
comprehensive income:
■ An investment in equity securities designated as at FVOCI (except on impairment, in which case foreign
currency differences that have been recognised in other comprehensive income are reclassified to profit
or loss).
■ Foreign currency differences which arise on the translation of investee companies (which have a different
functional currency) are recognised in other comprehensive income and accumulated in the foreign
currency translation reserve.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
175
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(c) Discontinued operation
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can
be clearly distinguished from the rest of the Group and which:
■ represents a separate major line of business or geographic area of operations;
■ is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of
operations; or
■ is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the
criteria to be classified as held-for-sale. When an operation is classified as a discontinued operation, the
comparative statement of profit or loss and OCI is re-presented as if the operation had been discontinued from
the start of the comparative year.
(d) Financial instruments
(i) Recognition and initial measurement
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial
assets and financial liabilities are initially recognised when the Group becomes a party to the contractual
provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability
is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to
its acquisition or issue. A trade receivable without a significant financing component is initially measured at the
transaction price.
(ii) Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment;
FVOCI – equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business
model for managing financial assets, in which case all affected financial assets are reclassified on the first day
of the first reporting period following the change in the business model.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
176
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(d) Financial instruments
(ii) Classification and subsequent measurement (continued)
Financial assets (continued)
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVTPL):
■ they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows;
■ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not
designated as at FVTPL:
■ it is held within a business model whose objective is achieved by both collecting contractual.
cash flows and selling financial assets; and
■ its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to
present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-
investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at
FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
177
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(d) Financial instruments (continued)
(ii) Classification and subsequent measurement (continued)
Financial assets – Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at
a portfolio level because this best reflects the way the business is managed and information is provided to
management. The information considered includes:
■ the stated policies and objectives for the portfolio and the operation of those policies in practice. These
include whether management’s strategy focuses on earning contractual interest income, maintaining a
particular interest rate profile, matching the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash flows through the sale of the assets;
■ how the performance of the portfolio is evaluated and reported to the Group’s management.
■ the risks that affect the performance of the business model (and the financial assets held within that
business model) and how those risks are managed.
■ how managers of the business are compensated – e.g. whether compensation is based on the fair value
of the assets managed or the contractual cash flows collected; and
■ the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales
and expectations about future sales activity
Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value
basis are measured at FVTPL.
Financial assets – Assessment whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a
contractual term that could change the timing or amount of contractual cash flows such that it would not meet
this condition. In making this assessment, the Group considers:
■ contingent events that would change the amount or timing of cash flows;
■ terms that may adjust the contractual coupon rate, including variable-rate features;
■ prepayment and extension features; and
■ terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
178
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(d) Financial instruments (continued)
(ii) Classification and subsequent measurement (continued)
Financial assets – Subsequent measurement and gains and losses
| Financial assets at FVTPL | These assets are subsequently measured at fair value. Net |
| gains and losses, including any interest or dividend income, are | |
| recognised in profit or loss. | |
| Financial assets at amortised cost | These assets are subsequently measured at amortised cost using |
| the effective interest method. The amortised cost is reduced by | |
| impairment losses. Interest income, foreign exchange gains and | |
| losses and impairment are recognised in profit or loss. Any gain | |
| or loss on derecognition is recognised in profit or loss. | |
| Debt investments at FVOCI | These assets are subsequently measured at fair value. Interest |
| income calculated using the effective interest method, foreign | |
| exchange gains and losses and impairment are recognised in | |
| profit or loss. Other net gains and losses are recognised in OCI. | |
| On derecognition, gains and losses accumulated in OCI are | |
| reclassified to profit or loss. | |
| Equity investments at FVOCI | These assets are subsequently measured at fair value. Dividends |
| are recognised as income in profit or loss unless the dividend | |
| clearly represents a recovery of part of the cost of the investment. | |
| Other net gains and losses are recognised in OCI and are never | |
| reclassified to profit or loss. |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
179
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(d) Financial instruments (continued)
(ii) Classification and subsequent measurement (continued)
Financial liabilities – Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at
FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial
liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are
recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or
loss. Any gain or loss on derecognition is also recognised in profit or loss.
(iii) Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial 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 asset are transferred or in which the Group neither transfers
nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial
asset
The Group enters into transactions whereby it transfers assets recognised in its statement of financial position, but
retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred
assets are not derecognised.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or
expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the
modified liability are substantially different, in which case a new financial liability based on the modified terms is
recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
(iv) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Group currently has a legally enforceable right to set off the amounts and
it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. No set
offs have been effected in these financial statements.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
180
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(e) Property, plant and equipment
(i) Recognition and measurement
All items of property, plant and equipment are measured at cost save for land and buildings are which are
measured at revalued amounts for the Company. For subsidiaries, property plant and equipment are measured at
cost less accumulated depreciation and others at revalued amounts as applicable (see note 17 for full disclosure).
Cost includes capitalised borrowing costs, less accumulated depreciation, and any accumulated impairment
losses.
If significant 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.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to
a working condition for their intended use, the costs of dismantling and removing the items and restoring the site
on which they are located and capitalised borrowing costs.
Capital work in progress relates to items of property, plant and equipment that are under construction and are yet
to be commissioned for use. Work in progress is measured at the costs incurred in relation to the construction up to
the reporting date. Capital work in progress is not depreciated.
The Group’s policy is to revalue regularly to ensure that the carrying amount does not differ materially from
the fair value. The revaluation differences are recognised in other comprehensive income and accumulated in
equity “revaluation reserve” unless the revaluation difference represents the reversal of a revaluation decrease
previously recognised as an expense, in which case the revaluation difference is recognised in profit or loss. A
decrease arising as a result of a revaluation is recognised as an expense to the extent that it exceeds any amount
previously credited to the revaluation surplus relating to the same asset. The revaluation surplus included in equity
is transferred directly to retained earnings when the asset is used by the Group. The amount of the surplus
transferred is the difference between depreciation charge based on the revalued carrying amount of the assets
and the depreciation charge based on the original cost.
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 property, plant and equipment, and is recognised net within other
income/other expenses in profit or loss. When revalued assets are sold, any related amount included in the
revaluation reserve is transferred to retained earnings.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
181
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(e) Property, plant and equipment (continued)
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that future economic benefits associated with the
expenditure will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated
residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit
or loss.
Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives for the current and comparative years are as follows:
| ■ | Property | 20 years | |
| ■ | Leasehold land and buildings | Life of mine | |
| ■ | Motor vehicles | 3 - 5 years | |
| ■ | Plant and equipment | 3 - 7 years | |
| ■ | Vertical and rotary kiln | 15 years | |
| ■ | Rotary kiln | 12 years | |
| ■ | Mineral properties | Unit of production method | |
| ■ | Mine Development | Unit of production method |
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(iv) Reclassification to investment property
When the use of a property changes from owner-occupied to investment property, the property is remeasured
to fair value and reclassified accordingly. Any gain arising on this remeasurement is recognised in profit or loss to
the extent that it reverses a previous impairment loss on the specific property, with any remaining gain recognised
in other Comprehensive Income (OCI) and presented in the revaluation reserve. Any loss is recognised in profit
or loss. However, to the extent that an amount is included in the revaluation surplus for that property, the loss is
recognised in other comprehensive income and reduces the revaluation surplus within equity.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
182
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(f) Investment property
Investment property is property held to earn rental income or capital appreciation or for both, but not for sale
in the ordinary course of business, use for the production or supply of goods or services or for administrative
purposes. Investment property is initially measured at cost and subsequently at fair value with any change
therein recognised in the profit or loss.
Any gain or loss on the disposal of investment property (calculated as the difference between the net
proceeds and the carrying amount of the item) is recognised in profit or loss. When investment property that
was previously classified as property, plant and equipment is sold, any related amount that is included in the
revaluation reserve is transferred to retained earnings.
(g) Intangible assets
(i) Recognition and measurement
Intangible assets
Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less any
accumulated amortisation. The group’s intangible assets comprises acquired computer software programmes.
Costs associated with maintaining software programmes are recognised as an expense as incurred.
Royalty right
Royalty rights have finite useful lives and are measured at fair value less any accumulated amortisation. The
group’s Royalty right comprises the converted dividend right in Kansanshi Mining Plc to a 3.1% life of mine
royalty right.
(ii) 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 are recognised in profit or loss as incurred.
(iii) Amortisation and impairment
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values
using the straight-line method over their estimated useful lives and is recognised in profit or loss.
The estimated useful lives of the Group’s computer software is three to five years.
The estimated useful life of the royalty right is over the life of the mine.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted
if appropriate.
(iv) Derecognition
Intangible assets are derecognised when an asset is sold, exchanged or abandoned and therefore, removed
from the statement of financial position.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
183
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(h) Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for sale if it is highly
probable that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less
costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining
assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred
tax assets, employee benefit assets or investment property, which continue to be measured in accordance
with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale or held-for
distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised
or depreciated, and any equity-accounted investee is no longer equity accounted.
(i) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on
the first-in, first-out principle. In the case of manufactured inventories, cost includes an appropriate share of
production overheads based on normal operating capacity.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
184
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(j) Impairment
(i) Non-derivative financial assets
Financial instruments and contract assets
The Group recognises loss allowances for ECLs on:
■ financial assets measured at amortised cost;
■ debt investments measured at FVOCI; and
■ contract assets.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which
are measured at 12-month ECLs:
■ debt securities that are determined to have low credit risk at the reporting date; and
■ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime
ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and analysis,
based on the Group’s historical experience and informed credit assessment and including forward-looking
information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days
past due.
The Group considers a financial asset to be in default when: the debtor is unlikely to pay its credit obligations to
the Group in full, without recourse by the Group to actions such as realising security (if any is held); or the finan-
cial asset is more than 90 days past due.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instru-
ment.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
185
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(j) Impairment (continued)
(i) Non-derivative financial assets (continued)
Financial instruments and contract assets (continued)
12-month ECLs are the portion of ECLs that result from default events that are possible within the. 12 months after
the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all
cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and
the cash flows that the Group expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt
securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have
a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
■ significant financial difficulty of the borrower or issuer;
■ a breach of contract such as a default or being more than 90 days past due;
■ the restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
■ it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
■ the disappearance of an active market for a security because of financial difficulties.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
186
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(j) Impairment (continued)
(i) Non-derivative financial assets (continued)
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount
of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognised in OCI
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof.
(ii) Non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than, investment
property, inventories and deferred tax assets) to determine whether there is any indication of impairment. Non-
financial assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. 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 CGUs.
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 assessments 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 CGU 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.
Determining whether goodwill is impaired requires an estimation of the present value of future cash flows
generated from the cash generating units to which the goodwill has been allocated. The present value
calculation requires an estimation of the future cash flows expected to arise and a suitable discount rate in
order to calculate present value.
An impairment loss in respect of goodwill is not reversed. For other assets, 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.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
187
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(k) Employee benefits
(i) Short -term employee benefits
Short term-employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee, and the obligation can be estimated reliably.
(ii) Defined contribution plans
Obligations for contribution to defined contribution plans are expensed in the profit or loss as the related service
is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or reduction in
future payments is available. The Group and all its employees also contribute to the National Pension Scheme
Authority, which is a defined contribution scheme.
(iii) Defined benefit plans
The Group provides for retirement benefits (i.e. a defined benefit plan) for all permanent employees in
accordance with established pension scheme rules as well as the provisions of Statutory Instrument No. 119 of
the Laws of Zambia. A defined benefit plan is a post-employment benefit plan other than a defined contribution
plan. The cost of providing the defined benefit plan is determined annually using the Projected Unit Credit
Method, with actuarial valuations being carried out at the end of each reporting period.
The discount rate is required to be determined with reference to the corporate bond yield. However, due to
the non-availability of an active developed market for corporate bonds the discount rate applicable is the
yield at the reporting date on the Government of the Republic of Zambia’s bonds that have maturity dates
approximating the terms of the Group’s obligations and that are denominated in the same currency in which
the benefits are expected to be paid.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
188
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(k) Employee benefits (continued)
(iii) Defined benefit plans (continued)
The defined benefit obligation recognised by the Group, in respect of its defined benefit pension plan, is
calculated by estimating the amount of future benefit that employees have earned in return for their service
in the current and prior periods and discounting that benefit to determine its present value, then deducting
the fair value of any plan assets. When the calculations above result in a benefit to the Group, the recognised
asset is limited to the net total of any cumulative unrecognised actuarial losses and past service costs and the
present value of any economic benefits available in the form of any refunds from the plan or reductions in future
contributions to the plan. An economic benefit is available to the Group if it is realisable during the life of the
plan or on settlement of the plan liabilities.
Actuarial gains and losses arising from changes in actuarial assumptions are charged or credited to other
comprehensive income when they arise. These gains or losses are recognised in full in the year they occur.
Past service costs are recognised immediately in the profit or loss, unless the changes to the pension plan are
conditional on the employees remaining in service for a specified period (the vesting period). In this case, the
past-service costs are amortised on a straight-line basis over the vesting period.
(iv) Other entitlements
Some employees are on fixed term contracts and are entitled to gratuity. These are recognised when they
accrue to employees. An estimate is made for the liability for such entitlements as a result of services rendered
by employees up to the reporting date.
The estimated monetary liability for employees’ accrued annual leave entitlement at the reporting date is
recognised as an expense accrual.
(l) Provisions and contingent liabilities
Provisions are determined by discounting the expected future cash flows at a pre – tax rate that reflects current
market assessment of the time value of money and the risks specific to the liability. The unwinding of the discount
is recognised as finance cost.
1. Environmental rehabilitation and restoration
In accordance with applicable legal requirements, a provision for site restoration in respect of contaminated
land, and the related expense, is recognised when the land is contaminated.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
189
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(l) Provisions and contingent liabilities (continued)
1. Environmental rehabilitation and restoration (continued)
Changes in the measurement of an existing decommissioning, restoration and similar liability that result from
changes in the estimated timing or amount of the outflow of resources embodying economic benefits required
to settle the obligation, or a change in the discount rate, is accounted for in accordance with:
i. changes in the liability alter the revaluation surplus or deficit previously recognised on that asset, so that:
1. a decrease in the liability is (subject to (b)) be recognised in other comprehensive income and increase
the revaluation surplus within equity, except that it is recognised in profit or loss to the extent that it
reverses a revaluation deficit on the asset that was previously recognised in profit or loss;
2. an increase in the liability is recognised in profit or loss, except that it shall be recognised in other
comprehensive income and reduce the revaluation surplus within equity to the extent of any credit
balance existing in the revaluation surplus in respect of that asset.
ii. in the event that a decrease in the liability exceeds the carrying amount that would have been recognised
had the asset been carried under the cost model, the excess is recognised immediately in profit or loss.
iii. a change in the liability is an indication that the asset may have to be revalued in order to ensure that
the carrying amount does not differ materially from that which would be determined using fair value at
the end of the reporting period. Any such revaluation is taken into account in determining the amounts
to be recognised in profit or loss or in other comprehensive income under If a revaluation is necessary, all
assets of that class are revalued.
The adjusted depreciable amount of the asset is depreciated over its useful life. Therefore, once the related
asset has reached the end of its useful life, all subsequent changes in the liability shall be recognised in profit or
loss as they occur. This applies under both the cost model and the revaluation model.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
190
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(l) Provisions and contingent liabilities (continued)
2. Financial guarantee contracts
guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is
initially measured at fair value and subsequently at the higher of:
■ the amount determined in accordance with the expected credit loss model under IFRS 9 Financial
Instruments, and
■ the amount initially recognised less, where appropriate, the cumulative amount of income recognised in
accordance with the principles of IFRS 15 Revenue from Contracts with Customers.
The fair value of financial guarantees is determined based on the present value of the difference in cash flows
between the contractual payments required under the debt instrument and the payments that would be
required without the guarantee, or the estimated amount that would be payable to a third party for assuming
the obligations.
Where guarantees in relation to loans or other payables of associates are provided for no
compensation, the fair values are accounted for as contributions and recognised as part of the cost of the
investment.
3. Contingent liabilities
All possible obligations whose outcomes are dependent on whether some uncertain future event occurs, or a
present obligation but payment is not probable, or the amount cannot be measured reliably are considered
as Contingent liabilities. These contingent liabilities are reviewed on a regular basis and were appropriate an
estimate is made of the potential financial impact on the Group. As at 31 December 2021 and 2020, no potential
liability was recognised.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
191
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(m) Revenue from contracts with customers
Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises
revenue when it transfers control over a good or service to a customer.
The following provides information about the nature and timing of the satisfaction of performance obligations
in contracts with customers, including significant payment terms, and the related revenue recognition policies.
| Type of product/ | ||
| service | Nature and timing of satisfaction of performance | |
| obligations, including significant payment terms | ||
| Revenue recognition policies | ||
| Sale of goods | Customers obtain control of the products | |
| when the goods are delivered. Invoices are | ||
| generated and revenue is recognised at that | ||
| point in time. Invoices are payable within 30 | ||
| days. | ||
| Revenue is recognised in the period | ||
| in which the Group has delivered | ||
| products to the customer, the | ||
| customer has full discretion over the | ||
| channel and price to sell the products, | ||
| and there is no unfulfilled obligations | ||
| that could affect the customers’ | ||
| acceptance of the products. Delivery | ||
| does not occur until the products have | ||
| been accepted by the customers. | ||
| Type of product/ | ||
| service | ||
| Nature and timing of satisfaction of | ||
| performance obligations, including significant | ||
| payment terms | ||
| Revenue recognition policies | ||
| Services | ||
| rendered | ||
| The Group is involved in provision of | ||
| environmental consultancy services, analytical | ||
| services, surveying services and radiation | ||
| safety. Revenue from providing services is | ||
| recognised in the accounting period in which | ||
| the services are rendered. | ||
| Revenue from providing services is | ||
| recognised in the accounting period | ||
| in which the services are rendered. | ||
| For fixed-price contracts, revenue | ||
| is recognised based on the actual | ||
| service provided to the end of the | ||
| reporting period as a proportion of | ||
| the total services to be provided, | ||
| because the customer receives and | ||
| uses the benefits simultaneously. |
Contract assets primarily relate to the Group’s right to consideration for the work completed but not billed at the
reporting date on the customer contracts. The Group had no contract assets as at year end. Contract liabilities
primarily relate to the advance consideration received from the customer for which revenue is recognised when
the goods and services are provided. The Group had no contract liabilities as at year end.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
192
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(n) Investment income and expenses
The Group’s investments income and expenses costs include:
■ Dividends receivables;
■ Interest income; and
■ Interest expense.
Dividends are recognised as revenue in the period in which the right to receive payment is established, which in
the case of quoted securities is usually the ex-dividend date.
Interest income or expense is recognised using the effective interest method.
(o) Finance income and finance costs
The Group’s finance income and finance costs include
■ Gain or loss on financial assets at fair value through profit or loss;
■ The foreign currency gain or loss on financial assets and financial liabilities;
■ Unwinding income or expense on price participation fees;
■ Unwinding expense on environmental provision; and
■ Borrowing costs.
All borrowing costs are recognised in the profit or loss using the effective interest method.
Borrowing costs attributable to fixed assets during construction are capitalised
(p) Exploration costs
The Group is involved in exploration and evaluation of mineral resources including, oil and gas and other similar
non – regenerative resources in specific licence areas where the Group has legal rights. This process also involves
the determination of both the technical feasibility and commercial viability of extracting the mineral resource.
General exploration and associated costs incurred in connection with exploration and evaluation of
mineral resources before the technical feasibility and commercial viability of extracting a mineral resource
is demonstratable, are expensed in the period in which they are incurred. Exploration and associated costs
for projects which are commercially viable, and it is considered that future economic benefits will flow to the
Company are capitalised.
Accounting for exploration and evaluation expenditures
Exploration and evaluation expenditures are measured at cost on initial recognition. Costs directly associated
with commercially viable exploration project are capitalised until the determination of reserves is evaluated. If it
is determined that commercial discovery has not been achieved, these costs are charged to expenses.
Depreciation of exploration and evaluation assets
Exploration and evaluation asset are depreciated using a straight-line method over a period of five years.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
193
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(p) Exploration costs (continued)
After recognition, the exploration and evaluation assets are measured using the cost model in IAS 16 Property,
plant and equipment.
(q) Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that
it relates to a business combination, or items recognised directly in equity or in OCI.
(i) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable
or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty
related to income taxes. It is measured using tax rates enacted or substantively enacted at the reporting date.
Current tax also includes any tax arising from dividends.
(ii) Deferred tax
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 or loss;`
■ temporary differences related to investments in subsidiaries and associates to the extent that the Group is
able to control the timing of the reversal of the temporary differences and it is probable that they will not
reverse in the foreseeable future; and
■ taxable temporary differences arising on the initial recognition of goodwill.
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; such reductions are reversed when probability of
future taxable profit improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has
become probable that future taxable profits will be available against which they can be used.
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.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
194
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(q) Income tax (continued)
(ii) Deferred tax (continued)
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the
Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For
this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered
through sale, and the Group has not rebutted this presumption.
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.
(iii) Tax exposures
In determining the amount of current and deferred tax, the Group considers the impact of tax exposures,
including whether additional taxes and interest may be due. This assessment relies on estimates and assumptions
and may involve a series of judgements about future events. New information may become available that
causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to
tax liabilities would impact tax expense in the period in which such a determination is made.
(r) Earnings per share
The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share
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 year, adjusted for own shares held. Diluted earnings
per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive
potential ordinary shares, which comprise convertible notes and share options.
(s) Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components and for which discrete financial information is available. All operating segments’ operating
results are reviewed regularly by the Group’s Chief Executive Officer to make decisions about resources to be
allocated to the segment and to assess its performance.
(t) Share capital
Ordinary shares Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are
recognised as a deduction from equity.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
195
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
44 Material accounting policies (continued)
(u) Dividends
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s annual financial
statements in the period in which the dividends are approved by the Company’s shareholders. When dividends
are proposed they are presented in a separate column in the statement of changes in equity.
(v) Mine development costs
Exploration and associated costs relating to non-specific projects or properties are expensed in the period
in which they are incurred. Significant property acquisition costs and development costs relating to specific
properties for which economically recoverable reserves are believed to exist are deferred until the project to
which they relate is sold, abandoned, or placed into production. No costs are deferred on a property believed
to be impaired in value. Mine development and property acquisition costs, including costs incurred during
production to expand ore reserves within existing mine operations, are deferred, and amortised over the life of the
mines. Reviews are undertaken regularly to evaluate the carrying values of operating mines and development
properties. If it is determined that the net recoverable amount is significantly lower than the carrying value, and
the impairment in value is likely to be permanent, a write-down to the net recoverable amount is made by a
charge to profit or loss.
(w) Environmental restoration
Provision is made for costs associated with the restoration and rehabilitation of mining sites as soon as the
obligation to incur such costs arises. Such restoration and closure costs are typical of the extractive industry and
are normally accrued to reflect the Company’s obligations at that time. Additional disturbances that arise due
to further development/construction at the mine are recognised as additions or charges to the corresponding
assets and rehabilitation liability when they occur.
Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with
prospectively by recognising an adjustment to the rehabilitation liability and a corresponding adjustment to
the asset to which it relates, if the initial estimate was originally recognised as part of an asset measured in
accordance with IAS 16. If the related asset is measured using the revaluation model, a decrease in the liability
shall be recognised in other comprehensive income and an increase in the liability shall be recognised in profit
or loss, except that it shall be recognised in other comprehensive income. Any reduction in the rehabilitation
liability and, therefore, any deduction from the asset to which it relates, may not exceed the carrying amount
of that asset. If it does, any excess over the carrying value is taken immediately to the statement of profit or loss
and other comprehensive income.
Over time, the discounted liability is increased for the change in present value based on the discount rates
that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the
discount is recognised in the statement of profit or loss and other comprehensive income as part of finance
costs. For closed sites, changes to estimated costs are recognised immediately in the statement of profit or
loss and other comprehensive income. The Company is required to make contributions to the government for
future rehabilitation work relating to its production activities. The contributions are based on an environmental
assessment that is performed by environmental auditors. The Company records a liability for the future
contributions to be made to the government based on the environmental disturbances incurred to date per
the environmental auditor’s assessment with a corresponding charge to profit or loss.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
196
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
45 Restatement
Discontinued Operations Restatement
The statements of profit of loss and other comprehensive income of Investrust Bank Plc and Mushe Milling
Company Limited for the year ended 31 December 2022 were wrongly consolidated and not classified as
discontinued operations despite meeting the criteria of classification as discontinued operations as per IFRS 5
Non-Current Assets Held for Sale and Discontinued Operations. The error affected several income statements line
Items. This classification error resulted in overstatement and understatement of the affected Income statement
lines for the year ended 31 December 2022. The error has been corrected by restating each of the affected
financial statement line items for the prior period.
Consolidated Statement of profit or loss and other comprehensive Income 2022
| 31 Dec 2022 | Correction | 31 Dec 2022 | |
| As previously | |||
| stated | |||
| Reclassifi- | |||
| cation from | |||
| Consolidation | |||
| Restated | |||
| amount | |||
| Revenue from contracts with customers | 11,959,354 | (38,925) | 11,920,429 |
| Net Interest Income from loans and advances/ | |||
| Financial Instruments | 110,779 | (110,779) | - |
| Fees and commissions | 39,998 | (39,998) | - |
| Cost of sales | (14,709,114) | 38,763 | (14,670,351) |
| Gross profit | (2,598,983) | (150,939) | (2,749,922) |
| Net investment income | 47,893 | - | 47,893 |
| Other income | 189,238 | (13,491) | 175,747 |
| Fair value adjustment of financial asset at fair value through | |||
| profit or loss | (205,600) | ||
| - | |||
| (205,600) | |||
| Net impairment losses on financial assets | (8,131) | 5,800 | (2,331) |
| Administration expenses | (749,743) | 169,395 | (580,348) |
| Operating profit/(loss) | (3,325,326) | 10,765 | (3,314,561) |
| Finance income | 452,441 | - | 452441 |
| Finance costs | (2,266,287) | 6,753 | (2,259,534) |
| Net finance income | (1,813,846) | 6,753 | (1,807,093) |
| Share of profit/(loss) of equity accounted investees | 1,603,143 | - | 1,603,143 |
| Profit before tax | (3,536,029) | 17,518 | (3,518,511) |
| Income tax (expense) credit | (249,504) | 1,485 | (248,019) |
| Profit from continuing operations | (3,785,533) | 19,003 | (3,766,530) |
| Loss from discontinuing operations | - | (19,003) | (19,003) |
| Profit for the year | (3,785,533) | - | (3,785,533) |
| Other comprehensive income | (1,029,340) | - | (1,029,340) |
| Total comprehensive income | (4,814,873) | - | (4,814,873) |
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
197
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
In thousands of Kwacha
45 Restatement (continued)
The impact of the restatement on Earnings Per Share in the year ended 31 December 2022 is that the EPS
from continuing operations of (ZMW 23.42) is presented separately from total EPS of (ZMW 23.54).
Statement of financial position 2022 – Consolidated
There was no impact on the consolidated statement of financial position as these were reclassifications
within the statement of profit and loss.
Statement of Cashflows 2022 – Consolidated
There was no impact on the consolidated statement of cash flows.
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
198
CORPORATE INFORMATION
Registered and Corporate Ofce
Stand No. 16806
Alick Nkhata Road
Mass Media Complex Area
P O Box 30048
Lusaka 10101, Zambia
UK Registrars
Link Asset Service
Bourne House
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Brokers for Lusaka Securities Exchange Listing
Stockbrokers Zambia Limited
32 Lubu Road
Longacres
P O Box 38956
Lusaka, Zambia
Auditors
KPMG Chartered Accountants
6
th
Floor Sunshare Towers
Cnr Lubansenshi/Katima Mulilo Roads
Olympia Park
PO Box 31282
Lusaka, Zambia
Principal Bankers:
Barclays Bank (Zambia) Plc
Standard Chartered Bank (Zambia) Plc
Zambia National Commercial Bank Plc
Transfer Secretaries
Corpserve Transfer Agents Limited
Mwaleshi Road, Olympia Park
P O Box 37522
Lusaka 10101, Zambia
Phone: + 260 211 256969/70
Fax : +260 211 256975
Email: info@corpservezambia.com.zm
Shareholder Contact
Charles Mjumphi
Company Secretary
Monica Mwananshiku Chikonde
Board Affairs Manager
Loisa Mbatha Kakoma
Corporate Affairs Manager
Phone : +260 211 221023/228833
Fax : +260 211 220727
E-mail : corporate@zccm-ih.com.zm
Website: www.zccm-ih.com.zm
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
199
Appendix
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
(Unaudited)
31-Dec 31-Dec
2023 2022
US$’000 US$’000
Assets
Property, plant and equipment 9,666 756,962
Exploration and evaluation asset 1,998 2,767
Intangible assets 559,064 189,407
Investment property 8,102 11,120
Investment in associates 391,934 840,596
Financial assets at fair value through prot or loss 117,278 69,375
Trade and other receivables 63,264 162,390
Environmental Protection Fund 274 5,231
Deferred tax asset - 6,805
Non-current assets 1,151,580 2,044,653
Inventories 1,488 295,855
Trade and other receivables 13,173 42,255
Assets held for sale 917,654 116,536
Term deposit 172,857 295,815
Cash and cash equivalents 13,996 18,235
Current assets 1,119,168 768,696
Total assets 2,270,748 2,813,349
Equity
Share capital 62 132
Share premium 81,151 171,398
Other reserves 343,949 934,253
Retained earnings (639,401) (561,555)
Equity attributable to shareholders (214,239) 544,228
Non-controlling interest (6,789) (2,589)
Total Equity (221,028) 541,639
Liabilities
Borrowings - 1,522,053
Deferred tax liability 29,201 -
Retirement benets 675 10,134
Provisions for environmental rehabilitation 4,379 67,640
Non-current liabilities 34,255 1,599,827
Borrowings - 47,883
Bank overdraft - 38,118
Trade and other payables 12,148 412,750
Liabilities associated with assets classied as held for sale 2,434,387 127,877
Provisions 1,721 27,015
Current tax liabilities 9,265 10,533
Retirement benets - 7,707
Current liabilities 2,457,521 671,883
Total liabilities 2,491,776 2,271,710
Total equity and liabilities 2,270,748 2,813,349
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
200
Appendix
SEPARATE STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
(Unaudited)
31-Dec 31-Dec
2023 2022
US$’000 US$’000
Assets
Property, plant and equipment 4,297 7,408
Intangible assets 553,888 198
Investment property 8,102 11,120
Investments in subsidiaries 10,968 22,437
Investment in associates 436,567 900,507
Financial assets at fair value through P&L 117,278 69,375
Deferred tax assets - 14,345
Trade and other receivables 178,140 53,076
Non-current assets 1,309,240 1,078,466
Inventory - 830
Trade and other receivables 11,196 9,629
Assets held for sale - 8,071
Term deposit 171,337 295,815
Cash and cash equivalents 2,375 2,525
Current assets 184,908 316,870
Total assets 1,494,148 1,395,336
Equity
Share capital 62 132
Share premium 81,151 171,398
Other reserves 925,297 758,033
Retained earnings 446,969 439,877
Equity attributable to shareholders 1,453,479 1,369,440
Liabilities
Deferred tax liability 24,006 -
Retirement benets 675 514
Provisions for environmental rehabilitation 2,117 2,180
Non-current liabilities 26,098 2,694
Borrowings - -
Trade and other payables 3,041 6,703
Provisions 1,610 6,021
Current tax liabilities 9,220 10,478
Current liabilities 13,871 23,202
Total liabilities 40,669 25,896
Total equity and liabilities 1,494,148 1,395,336
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
201
Appendix
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 31 DECEMBER 2023
(Unaudited)
31-Dec 31-Dec
2023 2022
US$’000 US$’000
Revenue from customer with contracts 572,356 699,145
Net Interest Income from loans and advances
Financial Instruments - -
Fees and commissions - -
Cost of sales (745,772) (860,431)
Gross prot (173,416) (161,286)
Investment income 67,670 2,835
Investment expenses - (26)
Net investment income 67,670 2,809
Other income 11,875 10,308
Fair value adjustment nancial asset at fair value through
prot or loss
86,099 (12,059)
Impairment of goodwill on acquisition - -
Net impairment losses on nancial assets (3,906) (4137)
Administration expenses (90,881) (34,038)
Operating prot/(loss) (102,559) (194,403)
Finance income 107,809 26,536
Finance costs (218,306) (132,524)
Net nance income (110,497) (105,988)
Share of prot of equity-accounted investees, net of tax 110,173 94,026
Prot before tax (102,883) (206,365)
Income tax (expense)/credit (58,762) (14,547)
Prot from continuing operations (161,645) (220,912)
Loss from discontinued operations (36,941) (1,115)
Prot for the year (198,586) (222,027)
Other comprehensive income
Items that will never be reclassied to prot or loss
Revaluation on property, plant and equipment 185 732
Deferred tax on revaluation reserve 11 (220)
Actuarial gain on dened benet pension plans 1,176 11,978
Deferred tax on dened benet actuarial loss 143 (2)
Royalty right fair valuation 174,761 -
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
202
Appendix
Equity-accounted investees- share of other comprehen-
sive income
562
652
177,117 13,140
Items that are or may be reclassied to prot or loss
Foreign currency translation differences - equity - ac-
counted investees
190,402 79,868
Foreign currency translation differences - Subsidiaries
investees
(800,887)
(153,381)
(610,485) (73,513)
Other comprehensive income, net of tax (433,647) (60,373)
Total comprehensive income (632,233) (282,400)
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
203
Appendix
SEPARATE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
31-Dec 31-Dec
2023 2022
US$’000 US$’000
Investment income 103,717 288,347
Revenue from contracts with customers 1,129 46
Cost of sales (822) (125)
Other income 2,061 5,173
Fair value adjustment nancial asset at fair value
through prot or loss
86,099 (12,059)
Net impairment losses on nancial assets (4,047) (32)
Administration expenses (38,693) (43,562)
Operating (loss)/prot 149,444 237,788
Finance income 145,216 26,161
Finance costs (54) (310)
Net nance income 145,162 25,851
Prot/(loss) before tax 294,606 263,639
Income tax (expense)/credit (58,713) (13,860)
Prot/(loss) for the year 235,893 249,779
Other comprehensive income
Items that will never be reclassied to prot or loss
Revaluation of property, plant and equipment - 732
Deferred tax on amortisation of revaluation re-
serve
11 (220)
Actuarial (loss)/gain on dened benet pension
plans
(478) 6
Deferred tax on dened benet actuarial/(loss)
gain
143 (2)
Fair value change in Investments in subsidiaries (22,618) 6,571
Fair value change in Investments in associates 268,383 (254,937)
Royalty right fair valuation 174,761 -
Other comprehensive income, net of tax 420,202 (247,850)
Total comprehensive income 656,095 1,929
ZCCM INVESTMENTS HOLDINGS PLC
INTEGRATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
204
Email: corporate@zccm-ih.com.zm or Call: 260 211 – 221 023 / 388 000 / 228 833
ZCCM-IH Ofce Park
Stand No. 16806, Alick Nkhata Road
Mass Media Complex Area
P.O Box 30048, Lusaka, 10101
