Entity Annual Reports IDC 2016

DEEPENING AND SUPPORTING ZAMBIA’S INDUSTRIAL CAPACITY
2016 ANNUAL REPORT

INDUSTRIAL DEVELOPMENT CORPORATION LIMITED
GENERAL INFORMATION
REGISTERED NAME:
Industrial Development Corporation Limited
COMPANY REGISTRATION NUMBER:

119056
PHYSICAL ADDRESS:
3rd Floor, Mukuba Pension House
Dedan Kimathi Road
Lusaka, Zambia
POSTAL ADDRESS:
P.O Box 37232
Lusaka, ZAMBIA
TELEPHONE NUMBER:
+260 211 843567/8 +260 967 773007
EMAIL ADDRESS:
[email protected]
WEBSITE:
www.idc.co.zm
2 2016 REPORT
Vision Statement
To become Africa’s best performing sovereign holding corporation and strategic investment
partner.
Mission Statement
To maximise long term shareholder value in State Owned Enterprises and invest in key
economic sectors to contribute to industrialisation and sustainable economic growth.
Goal Statement
To transform State Owned Enterprises towards commercial viability, contribute to
industrialisation and job creation.
Value Statement
The IDC holds the following key values:
• Professionalism
We uphold the highest standards of professionalism in the conduct of our business and
expect the same of those we do business with.
• Transparency
All our investments and business undertakings are consistent with the tenets of
accountability in the use of public funds.
• Integrity
In everything we do we are honest to ourselves, our shareholders and our stakeholders.
• Distinction
We are committed to continuous learning, improvement and delivering excellent
results.
• Partnerships
The foundation of our approach to business and investment is to mutually benefit from
our complementary strengths with our partners and team work.
STRATEGIC FOCUS
These strategic pillars shown in the diagram below ensure that the IDC remains focused on its
core mandate to the satisfaction of its shareholders, partners and the public.
Joint Ventures
TRANSFORMATION
PARTNERSHIPS
New Sectors Restructure Citizen Participation

INDUSTRIES
STRATEGIC
EMERGING
Regional Markets Grow Shareholder value Small and Medium

SOE
Renewable Energy Grow Strategic Value Enterprises

Rural Industrialisation Long term investments Private Sector Support
Long term investments
2016 REPORT 3
Contents
General Information 1
LIST OF ABBREVIATIONS 5
CHIEF EXECUTIVE OFFICER’S STATEMENT 6
1. Companies under IDC Portfolio 10
2. Principal Activities 11
2.1 IDC’s Dual Mandate 11
3. Operational Performance 11
3.1.1 Scaling Solar project 11
3.1.2 Tractor Assembly Plant 11
3.1.3 Recommissioning of Zambia China Mulungushi Textiles Plant 12

4. Portfolio Management 12
5. Human Capital 12
5.1 Staff Complement 12
6. Record of attendance of the Sub-Board Committees 12
6.1 Investments and Portfolio Management Committee 12
FINANCIAL STATEMENTS 15
4 2016 REPORT
LIST OF ABBREVIATIONS
ARC Audit and Risk Committee
BPC Bangweulu Power Company
DPNW Department of National Parks and Wildlife
EGP Enel Green Power
ESIA Environmental and Social Impact Assessment
FAC Finance and Administration Committee
FINDECO Financial Development Corporation
GDP Gross Domestic Product
GRZ Government of the Republic of Zambia
GSA Government Support Agreement
IDC Industrial Development Corporation Limited
IFC International Finance Corporation
INDECO Industrial Development Corporation
IPMC Investment and Portfolio Management Committee
IPP Independent Power Producer
LSMFEZ Lusaka South Multi Facility Economic Zone
MCTI Ministry of Commerce, Trade and Industry
MLGH Ministry of Local Government and Housing
MOE Ministry of Energy
MOF Ministry of Finance
MOTA Ministry of Tourism and Arts
MOU Memorandum of Understanding
NOP Net Operating Profit
NPC Ngonye Power Company
PPA Power Purchase Agreement
PS Permanent Secretary
RFP Request for Proposals
SHA Shareholders Agreement
SOE State Owned Enterprise
SPV Special Purposes Vehicle
ST Secretary to Treasury
ZDA Zambia Development Agency
ZEMA Zambia Environmental Management Agency
ZESCO Zambia Electricity Supply Corporation
ZIMCO Zambia Industrial and Mining Corporation Limited
ZRA Zambia Revenue Authority
2016 REPORT 5
CHIEF EXECUTIVE OFFICER’S

STATEMENT
2016 was a great year for IDC as we recorded positive performance
on the portfolio and investment activities set out in 2015. This annual
report provides a summary of the Corporation’s key financial and
operational results during the year.
KEY PORTFOLIO HIGHLIGHTS

The number of companies in the portfolio remained the same during
the year. No divestures from companies were made.
In terms of the shareholding mix, we have above 50% shareholding
in 22 out of 29 companies in our portfolio. This translates into 75.86%
of our portfolio companies being subsidiaries and 24.14% being
associates.
IDC investments are across 12 sectors. The financial sector includes both banking and non-banking financial
services, for which the shareholding of our two insurance companies ZSIC Life and ZSIC General were held
directly by ZSIC Holdings Limited, a direct subsidiary of the IDC.
6 2016 REPORT
Financial Performance
Total dividend income for 2016 was K95.2million from K43.46million in 2015. We saw growth in total
revenues by this 119% and this is attributed to an increase in the number of subsidiaries and investee
companies paying dividends. The number of companies paying dividends increased from one (1) in 2015
to 4 (four) in 2016.
A profit after tax of K39.99million was recorded in 2016, which represented an increase of 146% from
K16.23m profit after tax in 2015. The increase was largely attributed to an increase in the number of
companies that paid dividends when compared to prior year.
In terms of the sectoral split in 2016 companies that paid dividends, composed of two from the financial
sector, one from the energy sector and the other from the mining sector. The mining sector paid the largest
dividend which amounted to K51.3million. In the coming year, a dividend policy will be put in place to
provide guidance on dividend declaration for the SOEs and help with predictability on the part of IDC.
Below is an analysis of the sectoral split of SOEs paying dividend:
2016 REPORT 7
The IDC Balance Sheet year on year grew mainly from the increase in retained earnings as a result of
increased dividend income and lower cost structures. As at 31 December 2016, the total value of assets
was K15.81 billion as compared to the previous year at K15.7 billion. The K59.39million increase was mainly
attributed to the investments made on short term deposits as well as the capitalized project costs. The
largest component of the total assets of the corporation are its investments in subsidiaries, which account
for 91.67% of the total assets.
Operational performance
As a holding company, IDCs success is dependent on its investment assets and how they are managed.
We have been reviewing the structure of the SOEs and will in 2017 commence the process of restructuring
some of the companies which include the ZSIC Group. We will also be divesting from three of our associate
investments that we consider are mature and where we do not see ourselves having much of a role now.
I wish to commend our employees who worked tirelessly during the year. As a first project being embarked
on, we commenced the bidding process for our scaling solar project was completed. Two Special Purpose
Vehicles (SPVs) namely; Bangweulu Power Company (BPC) and Ngonye Power Company (NPC) were
incorporated with IDC holding 20% equity in each power plant. I must say that being the first project
that we embarked on, its success will be measured by our ability to attain commercial and financial close
and commence construction for supply of power into the National Grid. Let me take this opportunity to
thank the Ministry of Finance (MoF), ZESCO, Energy Regulation Board (ERB), Zambia Development Agency
(ZDA), Zambia Environmental Management Agency (ZEMA), Zambia Revenue Authority (ZRA), Ministry of
Energy (MoE), Ministry of Local Government and Housing (MLGH), Lusaka South Multi Facility Economic
Zone (LS-MFEZ), Department of National Parks and Wildlife under the Ministry of Tourism and Arts and
other stakeholders that have been supporting us to ensure that this becomes a reality.
Key milestones achieved included execution of key project agreements such as the Government Support
Agreement (GSA) by MoF, Power Purchase Agreement (PPA) and Shareholders Agreement (SHA).
Our country’s drawback to increasing agricultural productivity has been the lack of mechanisation in the
Agricultural sector. In response to the challenge, IDC management is happy to report that a memorandum
of understanding (MoU) was signed with a Polish Company called URSUS S.A, a leading tractor manufacturer
in Europe, on industrial and commercial co-operation for establishment of a tractor assembly plant and
service centers across the country.
Re-alignment of Business Units

We have realigned our business units to ensure effectiveness in delivering on the IDC mandate. This has
been consolidated by filling in some key positions and clearly separating the Business Development
Department from the Investments Department to ensure effectiveness in how projects are appraised.
Our People
We believe our people are our biggest resource. It is our belief that an enterprise can have the best strategy
and business model in the world, but if it doesn’t have the hearts and minds of a dedicated workforce,
none of it comes to realisation. For this reason, IDC employees continued to undergo training for purposes
of learning best practices, benchmarking and career development. This included training in investment
advisory and project management.
Although the transformation journey has not yet been completed, I am pleased with the early signs that
am seeing in our corporation in terms of progress on intervention in SOEs and our pipeline projects.
8 2016 REPORT
Summary and Outlook for 2017

IDC will continue its growth trajectory towards the accomplishment of its mandate. Whilst we expect the
challenges of economic conditions particularly to persist in 2017, we remain optimistic that it will also
be filled with opportunities for the corporation to venture into new projects and to take vital steps in
repositioning the SOEs under our portfolio.
In conclusion, I would like to express gratitude to our esteemed shareholder for their confidence, the Board
of Directors for their strategic direction, all the staff for their effort, commitment and hard work, and all
stakeholders for their support.
Mateyo C Kaluba
Group Chief Executive Officer
2016 REPORT 9
1. Companies under IDC Portfolio

In the year under review, IDC had the following subsidiaries and associates under its portfolio;
No. NAME SHARE HOLDING
1 AFROX ZAMBIA LIMITED 30%
2 ENGINEERING SERVICES CORPORATION 100%
3 INDENI PETROLEUM REFINERY LIMITED 100%
4 INDO-ZAMBIA BANK LIMITED 40%
5 KAGEM MINERALS LIMITED 25%
6 LUSAKA SOUTH MULTI-FACILITY ECONOMIC ZONE LIMITED 100%
7 LUSAKA TRUST HOSPITAL 50%
8 MEDICAL STORES LIMITED 100%
9 MPULUNGU HARBOUR CORPORATION LIMITED 100%
10 MUKUBA HOTEL LIMITED 100%
11 MULUNGUSHI INTERNATIONAL CONFERENCE CENTRE 100%
12 MULUNGUSHI VILLAGE COMPLEX LIMITED 100%
13 MUPEPETWE DEVELOPMENT COMPANY 100%
14 NANGA FARMS LIMITED 14.27%
15 NIEC SCHOOL OF BUSINESS TRUST 100%
16 NITROGEN CHEMICALS OF ZAMBIA LIMITED 100%
17 TIMES PRINTPAK ZAMBIA LIMITED 100%
18 ZAMBIA DAILY MAIL LIMITED 100%
19 ZAMBIA ELECTRICITY SUPPLY CORPORATION 100%
20 ZAMBIA FORESTRY AND FOREST INDUSTRIES COMPANY 100%
21 ZAMBIA INTERNATIONAL TRADE FAIR LIMITED 100%
22 ZAMBIA PRINTING COMPANY 100%
23 ZAMBIA RAILWAYS LIMITED 100%
24 ZSIC HOLDINGS LIMITED 100%
25 ZAMBIA-CHINA MULUNGUSHI TEXTILES LIMITED 33%
26 ZAMCAPITOL ENTERPRISES LIMITED 100%
27 ZAMTEL LIMITED 100%
28 ZANACO PLC 25%
29 ZCCM INVESTMENT HOLDINGS PLC 60.28%
10 2016 REPORT
REPORT OF THE DIRECTORS (CONTINUED)
2. Principal Activities
The Industrial Development Corporation (IDC) Limited is a State-Owned Enterprise (SOE) charged
with the mandate to spearhead the Zambian Government’s commercial investments agenda aimed
at strengthening Zambia’s industrial base and job creation. The IDC was incorporated in January 2014
and is wholly owned by the Government through the Minister of Finance pursuant to the Minister of
Finance (Incorporation) Act Cap 349 of the Laws of Zambia.
IDC serves as an investment holding company for State-Owned Enterprises (SOEs) and is an active
shareholder and investor with an existing portfolio that spans across a broad spectrum of sectors
including agriculture, forestry, manufacturing, financial services, mining, energy, telecommunications,
logistics, medical, education, tourism, real estate and media.
2.1 IDC’s Dual Mandate
The IDC’s mandate is as follows:
i. Provide oversight by serving as an active investment holding company for SOEs to
achieve sustainability and profitability;
ii. Play a catalytic role in deepening and supporting Zambia’s industrialisation capacity to
support employment creation across the priority sectors of Manufacturing, Infrastructure,
Agriculture and Tourism. The IDC plays this role through evaluation, pricing and lowering
the investment risk profile by serving as co-investor alongside private sector investors.
3. Operational Performance
3.1 Investment Activity
3.1.1 Scaling Solar Project
During the period under review, a number of milestones were achieved under Round 1 of the
Scaling Solar Programme for the development of two solar power plants of up to 50MW each.
A transparent and competitive bidding process resulted in the selection of Neoen First Solar
of France and Enel Green Power (EGP) of Italy as winning bidders with tariffs of 6.02 US cents
/ kWh and 7.84 US cents / kWh, respectively. These were the lowest tariffs yielded in Sub-
Saharan Africa. Subsequently, Special Purpose Vehicles (SPVs) namely, Bangweulu Power
Company (BPC) and Ngonye Power Company (NPC) were incorporated with IDC holding 20%
equity in each power plant.
Key milestones achieved included; execution of the GSA by GRZ, PPA by ZESCO and SHA
between IDC and the bidders. Additionally, an Environmental and Social Impact Assessment
(ESIA) and other licensing procedures for attainment of commercial close also commenced.
It is expected that Commercial and Financial close will be achieved in the second quarter of
2017, after which construction of the solar plants will begin.
3.1.2 Tractor Assembly Plant
In a strategic move to mechanise the agriculture sector in Zambia, the IDC signed a
memorandum of understanding (MoU) with a Polish Company called URSUS S.A that will lead
to the establishment of a tractor assembly plant and service centers across the country. The
plant is designed to supply the Southern Africa region and the total project cost of $100m
will be financed through a Government to Government tied export credit facility. Project
preparation and construction of the assembly plant will commence in 2017.
2016 REPORT 11
3.1.3 Recommissioning of the Zambia China Mulungushi Textiles Plant

IDC and Marubeni, a Japanese company, signed an MOU at the Tokyo International Conference
for African Development (TICAD) VI Summit in Nairobi, Kenya held from 25th to 29th August
2016. The terms of reference of the MOU were primarily to complete a detailed Technical and
Financial Feasibility Study for the modernisation of the textile plant in Kabwe. The feasibility
study commenced in the last quarter of 2016 and will be completed in March 2017.
4. Portfolio Management
During the second quarter of 2016, the IDC conducted a situational analysis of SOEs under its
portfolio to gain an understanding of their business models, financial performance and operations.
5. Human Capital
Our unique sources of competitive advantage include the skills, commitment, and professionalism
of our people.
5.1 Staff Complement
During the year under review, the IDC continued to operate a lean structure with an total of 20
staff members.
Separations
During the same year under review, three senior executives separated with the company in
November 2016.
Engagements
Mr. Mateyo Kaluba was appointed as Chief Executive Officer (CEO) in an acting capacity
in November 2016. Additionally, six other staff were engaged in the Finance, Portfolio
Management and Procurement Departments.
Staff Development and Training
IDC employees continued to undergo training for purposes of learning best practices,
benchmarking and career development.
6. Record of attendance of the Sub-Board Committees

To ensure that the mandate of the Board is effectively discharged, the Board has established three
sub-committees that provide the required leadership. The committees are chaired by a Board
member.
6.1 Investments and Portfolio Management Committee
The Investments and Portfolio Management Committee is chaired by Fr. Leonard Chiti, an
independent non-executive Director. Attendance of the meetings was as follows:
Name 27thJul 30th 2ndSept 27th 30th 10th Dec
2016 Aug 2016 Sept Sept 2016
2016 2016 2016
Fr. Leonard Chiti P x x x x x
Mr. Robinson K Zulu P P P P P P
Mr. Geoffrey Sakulanda P P P x x P
Mr. Isaac Ngoma P P P P P P
Dr. Lawrence S. Sikutwa x P P P P P
Mrs. Kayula Siame P P x x x P
12 2016 REPORT
6.2 Finance and Administration Committee

The Finance and Administration Committee is chaired by Dr. Lawrence S. Sikutwa, an
independent non-executive Director. Attendance of the meetings was as follows:
Name 16th Sep 2016 27th Sep 2016 10th Dec 2016
Dr. Lawrence S. Sikutwa P P P
Mr. Robinson K. Zulu P P P
Mr. Geoffrey Sakulanda P x P
Mrs. Sylvia Banda P x P
Mr. Fredson Yamba x x x
Mr. David Kombe P P x
2016 REPORT 13
14 2016 REPORT
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
2016 REPORT 15
Contents
REPORT OF THE DIRECTORS 17-19
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 20

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INDUSTRIAL DEVELOPMENT CORPORATION
21-22
LIMITED
STATEMENT OF COMPREHENSIVE INCOME 23
STATEMENT OF CHANGES IN EQUITY 24
STATEMENT OF FINANCIAL POSITION 25
STATEMENT OF CASH FLOWS 26
NOTES TO THE FINANCIAL STATEMENTS 27-48
DETAILED STATEMENT OF COMPREHENSIVE INCOME 49
16 2016 REPORT
REPORT OF THE DIRECTORS

In compliance with Division 8.3 of the Companies Act, the directors submit their report on the activities of the
company for the year ended 31 December 2016.
1. Principal activities
The Industrial Development Corporation Limited (IDC) is a domestic development finance institution
wholly owned by the Zambian Government. IDC’s mandate is to play a catalyst role in deepening
and supporting Zambia’s industrialization capacity to support job creation and domestic wealth
formation across key economic sectors. The IDC plays its role through evaluation, pricing and lowering
the investment risk profile by serving as co-investor alongside private sector investors. IDC facilitates
provision and raising of long term finance for projects. Simultaneously, IDC serves as an investment
holding company for state-owned enterprises and new investments, on behalf of the Government of
the Republic of Zambia (GRZ). IDC is not funded by the GRZ. Its sources of financing and revenue include
dividend income from investee companies, equity disposals, bank borrowings and debt issuance in the
capital market. Surpluses generated by the IDC will be reinvested to fund new projects or paid out to
GRZ as dividends or paid into the proposed Sovereign Wealth Fund of Zambia.
2. The Company
The company was incorporated on 21 January 2014 and is domiciled in Zambia.
Business address Postal address
3rd Floor, Mukuba Pension House P O Box 37232
Dedan Kimathi Road Lusaka
Lusaka, Zambia Zambia
3. Share capital
The company is wholly owned by the Government of the Republic of Zambia. Details of the Company’s
authorised and issued share capital are included in note 15 to the financial statements.
4. Results
The company’s results are as follows:
2016 2015
ZMW ZMW
Revenue 95,219,407 43,466,500
Profit before taxation 61,933,726 24,971,461
Income tax charge (21,934,489) (8,742,827)
Profit for the year 39,999,237 16,228,634
5. Dividends
No interim dividend has been paid during the year under review (2015:K nil).
2016 REPORT 17
6. Directors and Secretary

The directors in office at the financial year end and at the date of this report were as follows:
• His Excellency, The President of the Republic of Zambia, Chairman of the IDC Board.
• Honourable Alexander Bwalya Chikwanda, Minister of Finance.
• Honourable Margaret Mwanakatwe, Minister of Commerce Trade and Industry.
• Honourable Given Lubinda, Minister of Agriculture.
• Mr. Fredson Yamba, Secretary to the Treasury.
• Mrs. Kayula A. Siame, Permanent Secretary, Ministry of Commerce Trade and Industry.
• Dr. Lawrence Sikutwa, Chairman and Chief Executive Officer for LSA Group of Companies.
• Mr. Isaac Ngoma, Development Consultant.
• Mrs. Silvia Banda, Chief Executive Officer, Sylva University.
• Mr. Geoffrey Sakulanda, Director, Spirit Insurance.
• Fr. Leonard Chiti, Director Jesuit Centre for Theological Reflection.
• Mr. David Kombe, Chairman and Chief Executive Officer for Blackdot Media.
• Mr. Robison Zulu, Chairman and Chief Executive Officer Meanwood Group of Companies.
7. Directors’ fees and remuneration

• The Company paid K5,474,890 (2015 – K5,116,720) to Executive directors during the year.
• There were no loans made to directors or any outstanding loans from directors at the year end.
• Members of the Board were not entitled to any form of defined pension benefits from the
company.
8. Employees
The company employed an average of 20 employees (2015: 13 ) and total salaries and wages for the
year ended 31 December 2016 were K12,573,033 (2015- K6,884, 149).
9. Health, safety and environmental issues

As part of the conditions of the IDC’s Investment projects, the Company undertakes Environmental
and Social Impact Assessments, a requirement of both the local Zambian standards as well as
international standards relating to the environment.
10. Social Responsibility

The Company is committed to supporting various activities and Companies across Zambia in line with
its overall mandate of promoting, supporting and facilitating job creation.
11. Legal matters

There are no significant or material legal or arbitration proceedings to the knowledge of the Directors,
any such proceedings which are pending or threatened, by or against the Company which may have or
have had during the year immediately preceding the date of this document a significant effect on the
financial position or profitability of the Company.
18 2016 REPORT
12. Gifts and donations

The company made no donations during the year (2015 – KNil).
13. Property, plant and equipment

The company acquired assets totalling K1,499,562 (2015 – K4,053,660) during the year.
14. Other material facts, circumstances and events

The directors are not aware of any material fact, circumstance or event which occurred between the
accounting date and the date of this report which might influence an assessment of the company’s
financial position or the results of its operations.
15. Annual financial statements

The annual financial statements set out on pages 23 to 48 have been approved by the directors.
16. Auditors
In accordance with the provisions of section 171(3) of the Zambian Companies Act the auditors, Messrs
Grant Thornton, will retire as auditors of the company at the forthcoming Annual General Meeting, and
having expressed their willingness to continue in office a resolution for their re-appointment will be
proposed at the Annual General Meeting.
By order of the Board

Date:
2016 REPORT 19
STATEMENT OF DIRECTORS’ RESPONSIBILITIES

Section 164 of the Companies Act 1994 requires the directors to prepare financial statements for each financial
year, which give a true and fair view of the financial position of the Industrial Development Corporation
Limited and of its financial performance and its cash flows for the year then ended. In preparing such
financial statements, the directors are responsible for
• designing, implementing and maintaining internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement whether due to fraud or
error;
• selecting appropriate accounting policies and applying them consistently;
• making judgements and accounting estimates that are reasonable in the circumstances; and
• preparing the financial statements in accordance with International Financial Reporting Standards, and
on the going concern basis unless it is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy
at any time the financial position of the company and enable them to ensure that the financial statements
comply with the Companies Act 1994. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Board of Directors confirms that in their opinion
(a) the financial statements give a true and fair view of the financial position of the Industrial Development
Corporation Limited as of 31 December 2016, and of its financial performance and its cash flows for
the year then ended;
(b) at the date of this statement there are reasonable grounds to believe that the company will be able to
pay its debts as and when these fall due; and
(c) the financial statements are drawn up in accordance with the provisions of the second schedule to
Section 164 of the Companies Act and International Financial Reporting Standards.
This statement is made in accordance with a resolution of the directors.
Signed at Lusaka on
Director Director
20 2016 REPORT
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INDUSTRIAL

DEVELOPMENT CORPORATION LIMITED
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of Industrial Development Corporation Limited,
which comprise the statement of financial position as at 31 December 2016, and the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the financial statements give a true and fair view of the financial position of Industrial
Development Corporation Limited as of 31 December 2016, and of its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting Standards.
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 Financial
Statements section of our report. We are independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in Zambia, and we have fulfilled our
other ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current year. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the 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 management either intends to liquidate the company or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the company’s financial reporting process.
2016 REPORT 21
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INDUSTRIAL

DEVELOPMENT CORPORATION LIMITED (CONTINUED)
Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatements, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level 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 influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient 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 company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on appropriateness of management’s 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 significant doubt on the 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 financial 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 company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including significant deficiencies in internal control
that we identify during our audit.
Report on other legal and regulatory requirements

In our opinion, the financial statements of the Industrial Development Corporation Limited as of 31
December 2016 have been properly prepared in accordance with the Companies Act 1994, and the accounting
and other records and registers have been properly kept in accordance with the Act.
Chartered Accountants
Wesley. M. Beene (AUD F000465)

Name of Partner signing on behalf of the firm
Date:
22 2016 REPORT
STATEMENT OF COMPREHENSIVE INCOME

Note 2016 2015

ZMW ZMW
Revenue 5 95,219,407 43,466,500
Other operating income 3,201,690 319,193
Administrative expenses Schedule 1 (36,487,371) (18,814,232)
Operating profit 61,933,726 24,971,461
Finance costs - -
Profit before taxation 6 61,933,726 24,971,461
Income tax 7(a) (21,934,489) (8,742,827)

Profit for the year 39,999,237 16,228,634
Other comprehensive income - -
Total comprehensive income 39,999,237 16,228,634

2016 REPORT 23
STATEMENT OF CHANGES IN EQUITY

Capital Retained
Share Capital Total
Reserve Profits
ZMW ZMW ZMW ZMW
At 1 January 2015 10,000,000 - (2,523,900) 7,476,100
Issued during the year - 15,705,042,000 - 15,705,042,000
Profit for the year - - 16,228,634 16,228,634
At 31 December 2015 10,000,000 15,705,042,000 13,704,734 15,728,746,734
Profit for the year - - 39,999,237 39,999,237
At 31 December 2016 10,000,000 15,705,042,000 53,703,971 15,768,745,971
24 2016 REPORT
STATEMENT OF FINANCIAL POSITION - 31 DECEMBER 2016

ASSETS
Note 2016 2015
ZMW ZMW
Non – current assets
Property, plant and equipment 8 4,321,286 4,444,152
Investment in subsidiaries 9 14,493,294,000 14,493,294,000
Investment in associates 10 1,211,748,000 1,211,748,000
Other investments 11 10,523,878 1,066,980
Deferred tax asset 7(c) - 469,295
15,719,887,164 15,711,022,427
Current assets
Short term deposits 12 76,862,500 10,980,600
Trade and other receivables 13 1,673,325 50,971
Amounts due from related parties 14 10,567,500 -
Bank and cash balances 1,813,243 29,356,807
90,916,568 40,388,378
Total assets 15,810,803,732 15,751,410,805

EQUITY AND LIABILITIES
Capital and reserves
Share capital 15 10,000,000 10,000,000
Capital reserve 16 15,705,042,000 15,705,042,000
Retained profits 53,703,971 13,704,734
15,768,745,971 15,728,746,734
Non current liabilities
Capital grant 17 5,920,084 5,920,084
Deferred tax liability 7(c) 294,548 -
6,214,632 5,920,084
Current liabilities
Trade and other payables 18 5,460,361 7,531,865
Taxation payable 7(d) 30,382,768 9,212,122
35,843,129 16,743,987
Total equity and liabilities 15,810,803,732 15,751,410,805

The financial statements on pages 23 to 48 were approved by the Board of Directors on ……………………….
and were signed on its behalf by:
)
)
) DIRECTORS
)
2016 REPORT 25
STATEMENT OF CASH FLOWS

2016 2015
ZMW ZMW
Cash flows from operating activities
Depreciation 1,622,428 665,375
Earnings before interest, tax, depreciation and 63,556,154 25,636,836
amortisation
(Increase)/decrease in trade and other receivables (1,622,354) 76,291
Increase in amounts due from related parties (10,567,500) -
(Decrease)/increase in trade and other payables (2,071,504) 7,440,125
Income tax paid - -
Net cash outflows on operating activities 49,294,796 33,153,252
Investing activities
Purchase of property, plant and equipment (1,499,562) (4,053,660)
Movement in other investments (9,456,898) (1,066,980)
Net cash outflow on investing activities (10,956,460) (5,120,640)
Net cash inflow before financing activities 38,338,336 28,032,612
Financing activities
Capital grant received - 5,920,084
Net cash inflow from financing activities - 5,920,084
Increase in cash and cash equivalents 38,338,336 33,952,696
Cash and cash equivalents at beginning of the year 40,337,407 6,384,711
Cash and cash equivalents at end of the year 78,675,743 40,337,407
Represented by:
Cash in hand and at bank 1,813,243 29,356,807
Short term bank deposits 76,862,500 10,980,600
78,675,743 40,337,407
26 2016 REPORT
NOTES TO THE FINANCIAL STATEMENTS 31

DECEMBER 2016
1. Company
The company was incorporated on 21 January 2014 and domiciled in Zambia.
The Industrial Development Corporation of Zambia is a domestic development finance institution wholly
owned by the Zambian government. IDC Zambia’s mandate is to play a catalystic role in deepening and
supporting Zambia’s industrialization capacity to support job creation and domestic wealth formation
across key economic sectors. The IDC Zambia plays its role through evaluation, pricing and lowering
the investment risk profile by serving as co-investor alongside private sector investors. IDC Zambia
facilitates provision and raising of long term finance for projects. Simultaneously IDC Zambia serves as
an investment holding company for state-owned enterprises and new investments.
2. Principal accounting policies
The principal accounting policies applied by the company in the preparation of these financial
statements are set out below. These policies have been consistently applied to all the periods presented,
unless otherwise stated.
(a) Basis of presentation
The financial statements are prepared in accordance with the provisions of the Companies
Act 1994 and International Financial Reporting Standards (IFRS). The financial statements
are presented in accordance with IAS 1 “Preparation of financial statements”. They have been
prepared under the historic cost convention, as modified by the revaluation of property, plant
and equipment, available-for-sale financial assets, and financial assets and liabilities at fair value
through profit and loss.
The preparation of financial statements in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the company’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements
are disclosed in note 3.
b) New and revised standards that are effective for annual periods beginning on or after 1
January 2016
The Company has not early adopted any new standards or amendments that have a significant
impact on the Company’s results or financial position.
The standards and amendments that are effective for the first time in 2016 (for entities with a
31 December 2016 year end) and could be applicable to the Company are:
• ‘Annual Improvements to IFRSs’ 2012-2014 cycle
• ‘Disclosure Initiative’ (Amendments to IAS 1)
• ‘Clarification of Acceptable Methods of Depreciation and Amortisation’ (Amendments
to IAS 16 and IAS 38)
• ‘Agriculture: Bearer Plants’ (Amendments to IAS 16 and IAS 41)
• ‘Accounting for Acquisitions of Interests in Joint Operations’ (Amendments to IFRS 11)
• ‘Equity Method in Separate Financial Statements’ (Amendments to IAS 27)
• ‘Investment Entities: Applying the Consolidation Exception’ (Amendments to IFRS 10,
IFRS 12 and IAS 27).
2016 REPORT 27
NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2016
2. Principal accounting policies (continued)

b) New and revised standards that are effective for annual periods beginning on or after 1
January 2016
These amendments do not have a significant impact on these financial statements and
therefore disclosures have not been made.
In addition, IFRS 14 ‘Regulatory Deferral Accounts’ is also effective from 1 January 2016.
However, it is only applicable to first time adopters of IFRS and therefore is not applicable to
the Company.
c) Standards, amendments and interpretations to existing standards that are not yet
effective and have not been adopted early by the Company
At the date of authorisation of these financial statements, certain new standards, and
amendments to existing standards have been published by the IASB that are not yet effective,
and have not been adopted early by the Company. Information on those expected to be
relevant to the Company’s financial statements is provided below.
Management anticipates that all relevant pronouncements will be adopted in the Company’s
accounting policies for the first period beginning after the effective date of the pronouncement.
New standards, interpretations and amendments not either adopted or listed below are not
expected to have a material impact on the Company’s financial statements.
IFRS 9 ‘Financial Instruments’
The new standard for financial instruments (IFRS 9) introduces extensive changes to IAS 39’s
guidance on the classification and measurement of financial assets and introduces a new
‘expected credit loss’ model for the impairment of financial assets. IFRS 9 also provides new
guidance on the application of hedge accounting.
Management has started to assess the impact of IFRS 9 but is not yet in a position to provide
quantified information. At this stage the main areas of expected impact are as follows:
• the classification and measurement of the Company’s financial assets will need to be
reviewed based on the new criteria that considers the assets’ contractual cash flows and
the business model in which they are managed
• an expected credit loss-based impairment will need to be recognised on the Company’s
trade receivables and investments in debt-type assets currently classified as Available
For Sale (AFS) and Held To Maturity (HTM), unless classified as at fair value through profit
or loss in accordance with the new criteria
• it will no longer be possible to measure equity investments at cost less impairment and
all such investments will instead be measured at fair value. Changes in fair value will
be presented in profit or loss unless the Company makes an irrevocable designation to
present them in other comprehensive income.
• if the Company continues to elect the fair value option for certain financial liabilities, fair
value movements will be presented in other comprehensive income to the extent those
changes relate to the Company’s own credit risk.
IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018.
28 2016 REPORT

IFRS 15 ‘Revenue from Contracts with Customers’
IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 ‘Revenue’,
IAS 11 ‘Construction Contracts’, and several revenue-related Interpretations. The new
standard establishes a control-based revenue recognition model and provides additional
guidance in many areas not covered in detail under existing IFRSs, including how to account
for arrangements with multiple performance obligations, variable pricing, customer refund
rights, supplier repurchase options, and other common complexities.
IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018.
IFRS 15 introduces new guidance that will require the Company to evaluate the separability of
multiple elements based on whether they are ‘distinct’. A promised good or service is ‘distinct’
if both:
• the customer benefits from the item either on its own or together with other readily
available resources, and
• it is ‘separately identifiable’ (i.e. the Company does not provide a significant service
integrating, modifying or customising it).
The subsequent allocation of arrangement consideration to individual performance
obligations is based on their relative stand-alone selling prices.
The Company is currently in the process of reviewing all its contracts to ascertain how
the new requirements will impact the identification of distinct goods or services and
the allocation of consideration to them.
• loss contracts – Under existing IFRSs, when it is probable that total contract costs
will exceed total contract revenue, the expected loss is recognised immediately in profit
or loss. When a contract covers a number of assets, the construction of each asset is
treated as a separate contract for this purpose if the segmentation criteria in IAS 11
‘Construction Contracts’ are met.
IFRS 15 does not include any guidance on how to account for loss contracts. Accordingly, such
contracts will be accounted for using the guidance in IAS 37 ‘Provisions, Contingent Liabilities
and Contingent Assets’. Under IAS 37, the assessment of whether a provision needs to be
recognised takes place at the contract level and there are no segmentation criteria to apply. As
a result, there may be some instances where loss provisions recognised in the past will not be
recognised under IFRS 15 because the contract as a whole is profitable. In addition, when IFRS
15 requires the Company to combine two or more contracts that are entered into at or near
the same time, the assessment of whether the contract is onerous will be performed at the
level of the combined contracts. Lastly, the Company notes that a loss contract under IAS 11 is
measured using an estimate of the total contract costs including, for example, an appropriate
allocation of construction overheads. This is likely to be greater than the ‘unavoidable costs’
identified under IAS 37.
The Company is currently in the process of reviewing all its customer contracts to ascertain the
extent to which the new requirements will impact the recognition and measurement of loss
provisions.
2016 REPORT 29

IFRS 16 ‘Leases’
IFRS 16 will replace IAS 17 and three related Interpretations. It completes the IASB’s long-
running project to overhaul lease accounting. Leases will be recorded on the statement of
financial position in the form of a right-of-use asset and a lease liability.
IFRS 16 is effective from periods beginning on or after 1 January 2019. Management is yet
to fully assess the impact of the Standard and therefore is unable to provide quantified
information. However, in order to determine the impact the Company are in the process of:
• performing a full review of all agreements to assess whether any additional contracts
will now become a lease under IFRS 16’s new definition
• deciding which transitional provision to adopt; either full retrospective application or
partial retrospective application (which means comparatives do not need to be restated).
The partial application method also provides optional relief from reassessing whether
contracts in place are, or contain, a lease, as well as other reliefs. Deciding which of these
practical expedients to adopt is important as they are one-off choices
• assessing their current disclosures for finance leases (note 2(j)) and operating leases
(note 2(j)) as these are likely to form the basis of the amounts to be capitalised and
become right-of-use assets
• determining which optional accounting simplifications apply to their lease portfolio
and if they are going to use these exemptions
• assessing the additional disclosures that will be required.
(d) Property, plant and equipment
Property, plant and equipment are stated at cost.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item
will flow to the company and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to the statement of comprehensive income during the financial year
in which they are incurred.
Increases in the carrying amount arising on revaluation of property, plant and equipment
are credited to the revaluation surplus in shareholders’ equity. Decreases that offset previous
increases of the same asset are charged against fair value reserves directly in equity; all other
decreases are charged to the statement of comprehensive income. Each year, the difference
between depreciation based on the revalued carrying amount of the asset charged to the
statement of comprehensive income and depreciation based on the asset’s original cost, net of
any related deferred income tax, is transferred from the revaluation surplus to retained earnings.
30 2016 REPORT
NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2016

(d) Property, plant and equipment (continued)
Depreciation is calculated to write off the cost of property, plant and equipment on a straight
line basis over the expected useful lives of the assets concerned. The principal annual rates used
for this purpose are:
Motor vehicles 25%
Furniture & fittings 20%
Computer hardware and software 33.3%
Office equipment 33.3%
Capital work in progress in not depreciated.
As no finite useful life for land can be determined, related carrying amounts are not depreciated.
The assets’ residual values and useful lives are reviewed at each reporting date and adjusted if
appropriate.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying
amount. These are included in the statement of comprehensive income in the other operating
income or other expenses.
(e) Financial assets
The Company classifies its investments into the following categories: financial assets at fair value
through profit or loss, debtors and receivables, held-to-maturity financial assets and available-
for-sale financial assets. The classification depends on the purpose for which the investments
were acquired.
Management determines the classification of its investments at initial recognition and re-
evaluate this at every reporting date.
(i) Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for trading and those designated at
fair value through profit or loss at inception.
A financial asset is classified into the ‘financial assets at fair value through profit or loss’ category
at inception if acquired principally for the purpose of selling in the short term, if it forms part
of a portfolio of financial assets in which there is evidence of short term profit taking, or if so
designated by management.
Financial assets designated as at fair value through profit or loss at inception are those that are:
• held in internal funds to match investment contracts liabilities that are linked to the
changes in fair value of these assets. The designation of these assets to be at fair value
through profit or loss eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise from measuring assets or liabilities or recognising
the gains and losses on them on different bases;
• managed and whose performance is evaluated on a fair value basis. Assets that are part of
these portfolios are designated upon initial recognition at fair value through profit or loss.
2016 REPORT 31

(e) Financial assets (continued)
(ii) Trade and other receivables
Trade and other receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market other than those that the company intends to
sell in the short term or that it has designated as at fair value through income or available for sale.
Trade and receivables are recognised at fair value, less provision for impairment. A provision for
impairment of trade and other receivables is established when there is objective evidence that
the company will not be able to collect all amounts due according to their original terms.
(iii) Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable
payments and fixed maturities other than those that meet the definition of debtors and
receivables that the Company’s management has the positive intention and ability to hold to
maturity. These assets are recognised at fair value, less provision for impairment. A provision for
impairment is established when there is objective evidence that the Company will not be able to
collect all amounts due according to their original terms.
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in
this category or not classified in any of the other categories.
Financial assets are derecognised when the rights to receive cash flows from them have expired
or where they have been transferred and the Company has also transferred substantially all risks
and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value. Trade and other receivables and held-to-maturity financial
assets are carried at fair value. Realised and unrealised gains and losses arising from changes in
the fair value of the ‘financial assets at fair value through profit or loss’ category are included in
the income statement in the year in which they arise. Unrealised gains and losses arising from
changes in the fair value of non-monetary securities classified as available for sale are recognised
in equity. When securities classified as available for sale are sold or impaired, the accumulated
fair value adjustments are included in the income statement as net realised gains or losses on
financial assets.
Interest on available-for-sale securities is recognised in the income statement. Dividends
on available-for-sale equity instruments are recognised in the income statement when the
company’s right to receive payments is established.
The fair values of quoted investments are based on current bid prices. If the market for a financial
asset is not active, the company establishes fair value by using valuation techniques.
32 2016 REPORT

(f) Impairment of assets
(i) Financial assets carried at amortised cost
The Company assesses at each reporting date whether there is objective evidence that a
financial asset or Company of financial assets is impaired. A financial asset or group of financial
assets is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that have occurred after the initial recognition of
the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future
cash flows of the financial asset or group of financial assets that can be reliably estimated.
Objective evidence that a financial asset or group of assets is impaired includes observable
data that comes to the attention of the Company about the following events:
• significant financial difficulty of the issuer or debtor;
• a breach of contract, such as a default or delinquency in payments;
• it becoming probable that the issuer or debtor will enter bankruptcy or other financial
reorganisation; or
• observable data indicating that there is a measurable decrease in the estimated future
cash flow from a Company of financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the individual financial assets in
the company, including:
• adverse changes in the payment status of issuers or debtors in the Company; or
• national or local economic conditions that correlate with defaults on the assets in the
Company.
The Company first assesses whether objective evidence of impairment exists individually for
financial assets that are individually significant. If the Company determines that no objective
evidence of impairment exists for an individually assessed financial asset, whether significant
or not, it includes the asset in a group of financial assets with similar credit risk characteristics
and collectively assesses them for impairment. Assets that are individually assessed for
impairment and for which an impairment loss is or continues to be recognised are not included
in a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred on debtors and
receivables or held-to-maturity investments, the amount of the loss is measured as the
difference between the asset’s carrying amount and the present value. The carrying amount
of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in the statement of comprehensive income.
If in a subsequent year, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed by adjusting the allowance account. The amount of
the reversal is recognised in the statement of comprehensive income.
2016 REPORT 33

(f) Impairment of assets (continued)
(ii) Financial assets carried at fair value
The Company assesses at each reporting date whether there is objective evidence
that an available-for-sale financial asset is impaired. If any such evidence exists for
available-for-sale financial assets, the cumulative loss – measured as the difference
between the acquisition cost and current fair value, less any impairment loss on the
financial asset previously recognised in statement of comprehensive income – is
removed from equity and recognised in the statement of comprehensive income.
Impairment losses recognised in the statement of comprehensive income on equity
instruments are not subsequently reversed. The impairment loss is reversed through
the statement of comprehensive income, if in a subsequent year the fair value of a debt
instrument classified as available for sale increases and the increase can be objectively
related to an event occurring after the impairment loss was recognised in statement of
comprehensive income.
(iii) Impairment of other non-financial assets
Assets that are subject to amortisation are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s
fair value less costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units).
(g) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other
short-term highly liquid investments and balances held with banks.
Bank overdrafts are defined as facilities which are repayable on demand and classified
as current liabilities.
(h) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(i) Interest bearing liabilities
Short term interest bearing liabilities include all amounts expected to be repayable within
twelve months from the reporting date, including instalments due on loans of longer duration.
Long term interest bearing liabilities represent all amounts repayable more than twelve months
from the reporting date.
34 2016 REPORT

(j) Leased assets
Where fixed assets are financed by leasing agreements which give rights approximating to
ownership (Finance leases) the assets are treated as if they had been purchased and the capital
element of the leasing commitments is shown as obligations under finance lease. The lease
rentals are treated as consisting of capital and interest elements. The capital element is applied
to reduce the outstanding obligations and the interest element is charged to the profit and loss
account over the period of the lease so as to produce a constant periodic rate of interest in the
remaining balance of the liability under the lease agreement for each accounting period.
Rentals payable under operating leases are charged to the statement of comprehensive income
over the term of the relevant lease and in accordance with the terms of the relevant leases.
(k) Investment income
Investment income is accounted for on an accrual basis and relates to interest earned from
short term deposits.
(l) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. Tax currently
payable is based on the results for the year as adjusted for items which are non-assessable or
disallowed for tax purposes.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal
authorities relating to the current or prior reporting periods, that are unpaid at the reporting
date. Current tax is payable on taxable profit, which differs from profit or loss in the financial
statements. Calculation of current tax is based on tax rates and tax laws that have been enacted
or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences
between the carrying amounts of assets and liabilities and their tax bases. However, deferred
tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset
or liability unless the related transaction is a business combination or affects tax or accounting
profit. Deferred tax on temporary differences associated with investments in subsidiaries and
joint ventures is not provided if reversal of these temporary differences can be controlled by
the Company and it is probable that reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are
expected to apply to their respective period of realization, provided they are enacted or
substantively enacted by the end of the reporting period. Deferred tax liabilities are always
provided for in full. Deferred tax assets are recognized to the extent that it is probable that they
will be able to be utilized against future taxable income.
Deferred tax assets and liabilities are offset only when the Company has a right and intention
to set off current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognized as a component of tax income
or expense in profit or loss, except where they relate to items that are recognized in other
comprehensive income (such as the revaluation of land) or directly in equity, in which case the
related deferred tax is also recognized in other comprehensive income or equity, respectively.
(m) Employee benefits
Pension obligations
The Company has a plan with National Pension Scheme Authority (NAPSA) where the company
pays an amount equal to the employee’s contributions. Employees contribute 5% of their
gross earnings up to the statutory limit.
2016 REPORT 35

(n) Provisions
Restructuring costs and legal claims
Provisions for restructuring costs and legal claims are recognised when: the company has a
present legal or constructive obligation as a result of past events; it is more likely than not
that an outflow of resources will be required to settle the obligation; and the amount has
been reliably estimated. Restructuring provisions comprise lease termination penalties and
employee termination payments. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required
in settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the
same class of obligations may be small.
(o) Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the financial
statements in the year in which the dividends are approved by the company’s shareholders.
(p) Equity and reserves
Share capital represents the nominal value of shares that have been issued.
Retained earnings include all current year results disclosed in the statement of comprehensive
income.
3. Critical accounting estimates and judgements
The preparation of financial statements in conformity with adopted IFRS requires management
to make judgements and estimates that affect the application of policies and reported amounts
of assets, liabilities, income, expenses and contingent liabilities. Estimates are based on historical
experience and other assumptions that are considered reasonable under the circumstances. The
estimates and judgements are under continuous review.
Useful lines of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date,
based on the expected utility of the assets. Uncertainties in these estimates, relate to technological
obsolescence that may change the utility of certain assets.
4. Management of financial risk
4.1 Financial risk
The Company is exposed to a range of financial risks through its financial assets, financial
liabilities. The most important components of this financial risk are interest rate risk and credit
risk. These risks arise from open positions in interest rate and business environments, all of
which are exposed to general and specific market movements.
The company manages these positions with a framework that has been developed to monitor
its customers and return on its investments.
4.2 Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. The
Company is not exposed to this risk as at 31 December 2016.
The company structures the levels of credit risk it accepts by placing limits on its exposure to
the level of credits given to a single customer. Such risk is subject to an annual or more frequent
review. Limits on the level of credit risk by category and territory are approved annually by the
Board of Directors.
36 2016 REPORT
4. Management of financial risk (continued)

4.3 Capital management
The Company’s objective when managing capital is to safeguard the company’s ability to
continue as a going concern so that it can continue to provide returns for shareholders and
benefits for other stakeholders.
The Company sets the amount of capital in proportion to its overall financing structure.
The company manages the capital structure and makes adjustments to it in the light of the
economic conditions and the risk characteristic of the underlying assets. In order to maintain
or adjust the capital structure, the Company may adjust the amount of the dividends paid to
shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Capital structure

2016 2015
ZMW ZMW
Cash and cash equivalents 78,675,743 40,337,407
Equity 15,768,745,971 15,728,746,734
15,847,421,714 15,769,084,141
5. Revenue
Revenue represents the dividends received during the year.
6. Profit before taxation
Profit before taxation is stated after charging:
Staff costs 17,936,961 11,404,717
Directors fees 5,474,890 5,116,720
2016 REPORT 37
7. Income tax charge

2016 2015
ZMW ZMW
The change for taxationis made up as follows:
Income tax at 35% (2015:35%) on the taxable
profit for the period 21,170,646 9,212,122
Deferred taxation 763,843 (469,295)
21,934,489 8,742,827
(b) Reconciliation of the tax charge:

Taxation at current rate on
accounting profit 21,676,804 8,740,011
Permanent differences:
Disallowable expenses 257,685 62,985
Timing differences:
Capital allowances and Depreciation (17,080) (220,838)
Tax loss - (950,983)
Movements in provision (746,763) 1,580,947
Deferred taxation 763,843 (469,295)
Tax charge for the year 21,934,489 8,742,827
(c) Deferred taxation

Anaylsis Movement:
At 1 January (469,295) -
Provision during the year 763,843 (469,295)
At 31 December 294,548 (469,295)
(d) Movement in taxation account

Taxation as at 1 January 9,212,122 -
Charge for the year 21,170,646 9,212,122
Tax paid - -
Taxation payable as at 31 December 30,382,768 9,212,122
38 2016 REPORT
8. Property, plant and equipment

(a) Summary
Cost or valuation
Office Motor furniture and Office Total
equipment vehicles fittings Computer
hardware
ZMW ZMW ZMW ZMW ZMW
At 1 January 2015 46,648 937,090 95,572 52,388 1,131,698

Additions 32,719 3,042,529 384,708 593,704 4,053,660
At 31 December 2015 79,367 3,979,619 480,280 646,092 5,185,358
Additions 1,730 600,868 296,345 600,619 1,499,562
At 31 December 2016 81,097 4,580,487 776,625 1,246,711 6,684,920
Depreciation
At 1 January 2015 3,840 54,636 8,632 8,723 75,831
Charge for the period 21,746 475,511 63,746 104,372 665,375
At 31 December 2015 25,586 530,147 72,378 113,095 741,206
Charge for the year 26,792 1,145,122 143,642 306,872 1,622,428
At 31 December 2016 52,378 1,675,269 216,020 419,967 2,363,634
Net book value

At 31 December 2016 28,719 2,905,218 560,605 826,744 4,321,286
At 31 December 2015 53,781 3,449,472 407,902 532,997 4,444,152
(b) In the opinion of the directors, the carrying values of property, plant and equipment stated above are
not higher than their fair values.
2016 REPORT 39
40
9. Investments in subsidiaries
(a) The company’s interest in its subsidiaries is as follows:
2016 REPORT
Country of
Opening balance At 31 December
incorpora- Name of company % Movement
1 January 2016 2016
tion
held ZMW’000 ZMW’000 ZMW’000
Zambia ZESCO 100% 8,369,530 - 8,369,530
Zambia ZCCM Investment 60.28% 3,201,091 - 3,201,091
Zambia Indeni Petroleum 100% 632,625 - 632,625
Zambia Zambia Forestry and Forest Industries Corporation 100% 244,906 - 244,906
Zambia Mulungushi International Conference Centre 100% 135,512 - 135,512

Zambia Mukuba Hotel 100% 5,326 - 5,326
Zambia Mupepetwe Development Company 100% 1 - 1
Zambia Mulungushi Village 100% 140,487 - 140,487
Zambia Zambia International 100% 39,747 - 39,747
Zambia Medical Services Limited 100% 1 - 1
Zambia Lusaka South Multi-Facility Economic Zone 100% 1,889,080 - 1,889,080
Zambia NIEC Business Trust School 100% 351 - 351
Zambia Zambia Telecommunications Company 100% (206,686) - (206,686)
Zambia Zambia –China Textiles 33% (34,256) - (34,256)
Zambia Zambia Printing Company 100% (4,256) - (4,256)
Zambia Times Printpak (Z) Limited 100% (506,826) - (506,826)
Zambia Zambia Daily Mail Limited 100% (93,235) - (93,235)
Zambia ZSIC GROUP 100% (193,996) - (193,996)
Zambia Mpulungu Harbour Corporation Limited 100% 29,378 - 29,378
Zambia Zambia Railways Limited 100% 928,907 - 928,907
Zambia Engineering Services Corporation 100% 1 - 1
Zambia ZAMCAPITAL ZEL 100% 1 - 1
Zambia Nitrogen Chemicals of Zambia 100% (84,395) - (84,395)
Total 14,493,294 - 14,493,294
9. Investments in subsidiaries (continued)

b) The summarised financial information for the subsidiaries is as follows:
Country of incorpo- Name of company Percentage Assets Liabilities Revenues Profit/
ration held ZMW’000 ZMW’000 ZMW’000 (loss)
ZMW’000
Zambia ZESCO 100% 30,022,298 22,406,239 8,237,828 1,308,640
Zambia ZCCM Investment 60.28% 10,030,775 1,381,462 112,392 443,520
Zambia Indeni Petroleum 100% 643,044 186,911 264,502 21,121
Zambia Zambia Forestry and Forest Industries Corporation 100% 478,582 48,838 198,115 82,288
Zambia Mulungushi International Conference Centre 100% 265,154 124,862 23,704 13,608
Zambia Mukuba Hotel 100% 14,681 17,946 5,387 (56)
Zambia Mupepetwe Development Company 100% 117,965 39,921 3,835 (19,760)
Zambia Mulungushi Village 100% 197,135 22,052 20,950 14,215
Zambia Zambia International Trade Fair Ltd 100% 22,829 10,470 8,848 (2,063)
Zambia Medical Services Limited 100% 1,687,611 1,630,686 68,200 (13,411)
Zambia Lusaka South Multi-Facility Economic Zone 100% 1,931,188 121,694 5,387 1,334
Zambia NIEC Business Trust School 100% 1,630 5,704 592 (1,740)
Zambia Zambia –China Textiles 33% 31,632 305,597 283 22,838
Zambia Zambia Printing Company 100% 9,277 17,909 - (5,026)
Zambia Times Printpak (Z) Limited 100% 54,217 672,200 45,691 (62,986)
Zambia Zambia Daily Mail Limited 100% 208,916 539,131 84,636 73,882
Zambia ZSIC GROUP 100% 721,075 1,000,662 434,115 (36,989)
Zambia Mpulungu Harbour Corporation Limited 100% 31,260 8,868 15,456 (343)
Zambia Zambia Railways Limited 100% 965,876 302,247 178,607 (131,801)
Zambia Engineering Services Corporation 100% 38,173 7,126 15,099 (4,156)
Zambia ZAMCAPITAL ZEL 100% 111,812 54,995 3,053 5,098
2016 REPORT
Zambia Nitrogen Chemicals of Zambia 100% 1,236,840 1,679,867 919,517 54,206
Total at end of 31 December 2016 48,821,970 30,585,387 10,696,197 1,762,419
41
2016 2015
ZMW ZMW
10. Investments in associates
(a) Movement at cost:
At beginning of the year 1,211,748,000 -
Arising during the year - 1,211,748,000
At end of the year 1,211,748,000 1,211,748,000
(b) The company’s interest in its associates is as follows:

Country of Name of company Percentage 1 January Non-cash 31
incorporation held 2016 movement December
ZMW’000 ZMW’000 2016
ZMW’000
Zambia Kagem Mine 20% 275,546 - 275,546
Zambia Nanga Farms 14.27% 24,736 - 24,736
Zambia ZANACO 25% 473,055 - 473,055
Zambia Indo-Zambia Bank 40% 405,294 - 405,294
Zambia Lusaka Trust Hospital 50% 6,450 - 6,450
Zambia Afrox 30% 26,667 - 26,667
Total 1,211,748 - 1,211,748
2016 2015
ZMW ZMW
11. Other investments
At beginning of the year 1,066,980 -
Acquired during the year 9,456,898 1,066,980
At end of the year 10,523,878 1,066,980
The other investments relates to the investment in the scaling solar projects.
12. Short term deposits
Zambia National Commercial Bank – 182 days 76,862,500 10,980,600
13. Trade and other receivables
Staff debtors 170,287 333
Other receivables 250,827 21,321
Prepayments 1,252,211 29,317
1,673,325 50,971
14. Amounts due from related parties
Indeni Petroleum Limited – dividends receivable 10,567,500 -
At end of the year 10,567,500 -
42 2016 REPORT
2016 2015
ZMW ZMW
15. Share capital
Authorised
20,000,000 ordinary shares of K1 each 20,000,000 20,000,000
Issued and fully paid, 10,000,000 ordinary shares of K1 10,000,000 10,000,000
At beginning of the year 10,000,000 10,000,000

Issued during the year - -
At 31 December 10,000,000 10,000,000
16. Capital reserve
On 24 August 2015 the Government of the Republic of Zambia transferred its shares in certain
companies to IDC and an amount of K15,705,042,000 was recognised as capital reserve.
2016 2015
ZMW ZMW
17. Capital grant
Government of the Republic of Zambia 5,920,084 5,920,084
5,920,084 5,920,084
The Private Sector Development, Industrialisation and Job Creation (PSDIJC) had agreed to
collaborate with the Company on four (4) projects anchored under the implementation framework
for the Industrialisation and Job Creation. The projects include; Development of 600MW Grid Scale
Solar Power Plants; Expansion of Industrial Forestry Plantations, establishment of Tourism Investment
vehicle; and the development of Integrated fish Industry. As at the year end, the company had not
yet utilized the grant.
2016 2015
ZMW ZMW
18. Trade and other payables
Trade payables 86,497 2,972,006
Employee related provisions 2,386,986 4,559,865
Other payables 2,986,878 -
5,460,361 7,531,871
19. Financial instruments
Financial Assets
The Company’s principal financial assets are equity instruments, bank balances and cash and trade
and other receivables. The Company maintains its bank accounts with major banks in Zambia of high
credit standing. Trade debtors are stated at their nominal value reduced by appropriate allowances for
estimated irrecoverable amounts. Equity instruments are stated at cost less provision for impairment.
2016 REPORT 43
19. Financial instruments (continued)

Financial liabilities (continued)
Financial liabilities
The Company’s financial liabilities are short and long term loans and trade creditors. Financial liabilities
are classified according to the substance of the contractual arrangements entered into. Trade creditors
are stated at their nominal value.
2016 2015
ZMW ZMW
Financial assets 89,243,243 37,337,407
Financial liabilities (86,497) (2,972,006)
89,156,746 34,365,401
(a) Price risk
(i) Currency risk
The Company’s transactions during the period were mostly carried out in Zambian kwacha.
Exposure to currency exchange rates arise from the company’s bank account maintained in US
dollars (USD).
Foreign currency denominated financial assets and liabilities which exposes the company to
currency risk are disclosed below. The amounts shown are those reported to key management
translated into Zambian kwacha at the closing rate:
2016 2015
ZMW USD ZMW USD
Financial assets 532,370 54,048 - -
Financial liabilities - - - -
Total exposure 532,370 54,048 - -
The following table illustrates the sensitivity of profit and equity in regards to the company’s
financial assets and financial liabilities and the USD/ZMW exchange rate all other things being
equal. It assumes a +/-10% change of the ZMW/USD exchange for the year ended at 31 December
2016 (2015:10%). This percentage has been determined based on the average market volatility
in exchange rate in the previous 12 months.
If the ZMW had strengthened against the USD by 10% (2015:10%) then this would have had the
following impact:
Profit for the year Equity
USD UDS
31 December 2016 - -
If the ZMW had strengthened against the USD by 10% (2015: 10%) then this would have had the
following impact.
Profit for the year Equity
USD UDS
44 2016 REPORT

(a) Price risk
(ii) Interest rate risk
Financial assets are not exposed to the risk that their value will fluctuate due to changes
in market interest rates. The Company’s investment in short term deposits pays a fixed
interest rate.
(iii) Market risk
The company is not exposed to the risk of the value of its financial assets fluctuating as a
result of changes in market prices.
(b) Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the company. The
Company is not exposed to this risk as at 31 December 2016.
The company’s maximum exposure to credit risk is limited to the carrying amounts of financial
assets recognised at 31 December as follows:
2016 2015
ZMW ZMW
Trade and other receivables 1,673,325 50,971
Amounts due from related parties 10,567,500 -
12,240,825 50,971
The company’s management considers that all the above financial assets, that are not impaired
past due for each of the 31 December reporting dates under review are of good credit quality.
At 31 December the company has certain trade receivables that have not been, settled by the
contractual due date but are not considered to be impaired. The amounts at 31 December,
analysed by length of time past due are:
2016 2015
ZMW ZMW
Not more than 3 months - 50,971
More than 3 months but not more than 6 months 1,673,325 -
More than 6 months but not more than 1 year 10,567,500 -
More than 1 year - -
12,240,825 50,971
(c) Liquidity risk
The Company is not believed to be exposed to significant liquidity risk, being inability to sell
financial assets quickly at close to their fair value. This is due to the value of such assets not being
material.
Liquidity risk is that the company might be unable to meet its obligations. The company
manages its liquidity needs by monitoring scheduled debt servicing payments for long term
financial liabilities as well as forecast cash inflows and outflows due to day-to-day business. The
data used for analysing these cash flows is consistent with that used in the contractual maturity
analysis below.
2016 REPORT 45

(c ) Liquidity risk (continued)
As at 31 December the company’s non-derivative financial liabilities have contractual maturities
(including interest payments where applicable) as summarised below:
31 December 2016
Current Non-current
Within 6 6 to 12 1 to 5 Later than 5
months months Years years
ZMW ZMW ZMW ZMW
Trade and other payables 3,073,375 2,386,986 - -
This compares to the maturity of the company’s non-derivative financial liabilities in the previous
reporting periods as follows:
31 December 2015
Current Non-current
Within 6 6 to 12 1 to 5 Later than 5
months months Years years
ZMW ZMW ZMW ZMW
Trade and other payables 2,972,006 4,559,865 - -
(d) Cash flow risk

The Company is not exposed to the risk that future cash flows associated with monetary financial
instruments will fluctuate in amount.
46 2016 REPORT
20. Fair value measurement

Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the statement of financial position
are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the
observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly
• Level 3: unobservable inputs for the asset or liability.
The following table shows the Levels within the hierarchy of financial assets and liabilities measured
at fair value on a recurring basis at 31 December 2016, 31 December 2015, and 1 January 2015.
31 December 2016 Level 1 Level 2 Level 3 Total
ZMW’000 ZMW’000 ZMW’000 ZMW’000
Financial assets
Listed securities and debentures - - - -
Money market funds - - - -
US-dollar forward contracts
-cash flow hedge - - - -
Other forward exchange contracts
inventory - - - -
Total Assets - - - -
US-dollar loans - - - -
Contingent consideration - - - -
Total Liabilities - - - -
Net fair value - - - -
31 December 2015 Level 1 Level 2 Level 3 Total

ZMW’000 ZMW’000 ZMW’000 ZMW’000
Financial assets
inventory - - - -
2016 REPORT 47
20. Fair value measurement (continued)

1 January 2015
Financial assets
inventory - - - -
21. Contingent liability

There were no known contingent liabilities as at 31 December 2016 (2015:Knil).
22. Related party transactions
The results of transactions with related parties during the year are detailed below:
(a) Compensation of key management personnel
The remuneration of management and other members of key management during the year
were as follows:
2016 2015
ZMW ZMW
Short-term benefits 5,474,890 5,116,720
(b) There were no loans to related parties and key management personnel.
(c) Other related party transaction:
Capital grant from GRZ - 5,920,084
23. Capital commitment
There are no capital commitments as at 31 December 2016 (2015:Knil).
24. Events subsequent to reporting date
There has not arisen since the end of the financial year any item, transaction or event of a material
and unusual nature, likely, in the opinion of the directors of the Company, to affect substantially
the operations of the economic entity, the results of those operations or the state of affairs of the
economic entity in the subsequent financial years.
48 2016 REPORT
SCHEDULE 1
DETAILED STATEMENT OF COMPREHENSIVE INCOME
Revenue:
2016 2015
ZMW ZMW
Dividends received 95,219,407 43,466,500
Interest on funds placed on deposit 1,220,637 197,369
Sale of tender document - 121,824
Other income 1,981,053 -
Total Revenue 98,421,097 43,785,693
Expenditure:
External audit 416,560 7,656
Bank charges 345,588 8,050
Fuel & oils 1,121,179 35,090
ICT services 157,090 16,569
Insurance 251,256 39,396
Office consumables 41,033 48,378
Operationalization of the IDC 249,318 759,868
Postage 7,926 3,292
Staff welfare 46,500 -
Professional membership – staff 12,809 -
Procurement committee meetings 135,100
Publication of corporate promotional materials 254,035 30,951
Salaries 12,573,033 6,884,149
Other staff costs 5,363,928 4,520,568
Telephone 473,654 28,728
Tender evaluation meetings - 77,358
Motor vehicle expenses 432,713 32,625
Transport expenses 3,632 3,081
Computer and office accessories 34,917 7,028
Stationery and printing 212,831 44,827
Water - 3,441
Newspaper and periodicals 42,760 34,920
Office rentals 211,200 233,950
Office cleaning 115,230 22,300
Repairs and maintenance 2,436 5,482
Foreign travel expenses 259,527 47,443
Exchange loss 6,155,285 4,416,993
Company secretarial costs 6,498 157,219
Website development - 23,200
Project development - 500,572
General expenses 109,503 19,558
Security 20,850 -
Director’s fees 1,149,800 -
Tax penalties 79,800 -
Local travel 144,068 -
Situational review 3,574,166 -
Seminars 115,130 -
Training 132,307 -
Company searches – PACRA - 415
Company Seals - 650
Board expenses 748,381 -
Total Expenditure 36,487,371 18,814,232
Profit before tax 61,933,726 24,971,461

2016 REPORT 49
50 2016 REPORT

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DEEPENING AND SUPPORTING ZAMBIA’S INDUSTRIAL CAPACITY

2016 ANNUAL REPORT

COMPANY REGISTRATION NUMBER:

New Sectors Restructure Citizen Participation

Regional Markets Grow Shareholder value Small and Medium

Renewable Energy Grow Strategic Value Enterprises

1. Companies under IDC Portfolio 10

2.1 IDC’s Dual Mandate 11

3.1.1 Scaling Solar project 11

3.1.2 Tractor Assembly Plant 11

3.1.3 Recommissioning of Zambia China Mulungushi Textiles Plant 12

CHIEF EXECUTIVE OFFICER’S

KEY PORTFOLIO HIGHLIGHTS

Re-alignment of Business Units

Summary and Outlook for 2017

1. Companies under IDC Portfolio

REPORT OF THE DIRECTORS (CONTINUED)

3.1.3 Recommissioning of the Zambia China Mulungushi Textiles Plant

6. Record of attendance of the Sub-Board Committees

6.2 Finance and Administration Committee

STATEMENT OF DIRECTORS’ RESPONSIBILITIES 20

STATEMENT OF COMPREHENSIVE INCOME 23

STATEMENT OF CHANGES IN EQUITY 24

STATEMENT OF FINANCIAL POSITION 25

STATEMENT OF CASH FLOWS 26

NOTES TO THE FINANCIAL STATEMENTS 27-48

DETAILED STATEMENT OF COMPREHENSIVE INCOME 49

REPORT OF THE DIRECTORS

REPORT OF THE DIRECTORS (CONTINUED)

6. Directors and Secretary

7. Directors’ fees and remuneration

9. Health, safety and environmental issues

10. Social Responsibility

11. Legal matters

REPORT OF THE DIRECTORS (CONTINUED)

12. Gifts and donations

13. Property, plant and equipment

14. Other material facts, circumstances and events

15. Annual financial statements

By order of the Board

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INDUSTRIAL

Report on the Audit of the Financial Statements

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF INDUSTRIAL

Auditor’s Responsibilities for the Audit of the Financial Statements

Report on other legal and regulatory requirements

Wesley. M. Beene (AUD F000465)

STATEMENT OF COMPREHENSIVE INCOME

Note 2016 2015

Other operating income 3,201,690 319,193

Administrative expenses Schedule 1 (36,487,371) (18,814,232)

Operating profit 61,933,726 24,971,461

Income tax 7(a) (21,934,489) (8,742,827)

Other comprehensive income - -

Total comprehensive income 39,999,237 16,228,634

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF FINANCIAL POSITION - 31 DECEMBER 2016

Total assets 15,810,803,732 15,751,410,805

Total equity and liabilities 15,810,803,732 15,751,410,805