SECURITIES AND EXCHANGE COMMISSION ZAMBIA · Mission Statement Of the Securities and Exchange...
Transcript of SECURITIES AND EXCHANGE COMMISSION ZAMBIA · Mission Statement Of the Securities and Exchange...
SECURITIES AND EXCHANGE COMMISSION
ZAMBIA
Annual Report 2015/2016
Mission Statement
Of the
Securities and Exchange Commission Zambia:
To stimulate the expansion and grow the capital market in order to make a sustainable contribution
to the economic development of Zambia.
Vision
To promote and maintain an organised, accessible, transparent, and diversified capital
market in Zambia.
Mandate
The Securities and Exchange Commission (SEC) was established pursuant to the provisions of
section 3 of the Securities Act, Cap 354 of the Laws of Zambia. The mandate of the Commission is
to ensure that investors, both local and foreign, are protected. It is also the mandate of the
Commission to develop the market. This therefore entails that the Commission has a huge role of
ensuring that there is a balance between investor protection and Capital Market Development.
Securities and Exchange Commission
Corporate Office Address: Secretary and Chief Executive:
Plot 3827 Parliament Road Telephone: (0211) 226911 (direct)
Olympia
P.O. Box 35165
Lusaka
ZAMBIA
Telephone: (0211) 227012/222368/222369/226386
Fax: (0211) 225443
E–mail: [email protected]
Website: www.seczambia.org.zm
Table of Contents The Current SEC Commissioners ...................................................................................................... 5
SEC Management During The Period Under Review ........................................................................ 6
CHAIRMAN’S REVIEW ..................................................................................................................... 7
CHIEF EXECUTIVE’S STATEMENT ................................................................................................ 9
Performance of the equities market ................................................................................................ 9
Equity market ............................................................................................................................. 9
Market Capitalisation ..................................................................................................................... 109
Collective Investment Schemes (CIS) ...................................................................................... 10
Financial Performance of the Commission .................................................................................. 11
Commission Expenses .............................................................................................................. 12
Market Development ........................................................................................................................ 13
Collective Investment Schemes (“CIS”) School’s Challenge Game ....................................... 14
Workshop with Parliamentarians ............................................................................................. 15
The Capital Markets Round Table with the Lord Mayor of the City of London ................. 1615
Professional Development in the Sector ................................................................................... 16
Agreements with other Regulators ........................................................................................... 17
General Awareness ................................................................................................................... 18
Staff Complement ..................................................................................................................... 1918
Conclusion ................................................................................................................................ 1918
OPERATIONAL ACTIVITIES ................................................................................................... 20
Licensing Activities ...................................................................................................................... 20
Regulatory Framework ............................................................................................................. 20
Licences Issued in 2016 ................................................................................................................ 21
Inspections and Surveillance ........................................................................................................ 21
Review of CIS Returns ............................................................................................................. 23
Attendance of Annual General Meetings (AGMs) ................................................................... 23
Investigations ............................................................................................................................ 24
Enforcement and Legal Services ...................................................................................................... 25
Market Transactions ......................................................................................................................... 26
Training and Workshops .................................................................................................................. 27
Strategic Plan Overview ................................................................................................................... 28
SEC Organization Structure ............................................................................................................. 29
Committees and Committee Members ............................................................................................. 30
SEC 2016 Financial Statements ....................................................................................................... 31
APPENDICES .............................................................................................................................. 6058
List of licensees in 2015 -2016 ................................................................................................. 6058
Collective Investment Schemes ............................................................................................ 6058
Fund Managers ..................................................................................................................... 6058
Dealer’s License ................................................................................................................... 6159
Dealer’s Representative Licenses ......................................................................................... 6360
Investment Adviser’s Representative License ...................................................................... 6865
Securities Exchange Licenses ............................................................................................... 6966
The SEC Staff, Past and Current Staff ..................................................................................... 7067
Stock Exchange Details ............................................................................................................ 7168
Listed Companies ..................................................................................................................... 7774
Quoted Companies ................................................................................................................... 8279
Companies with Listed Debt Securities ................................................................................... 8481
The Current SEC Commissioners
(Insert Portraits of SEC Commissioners)
Pursuant to the Securities Act of 1993, during the period under review, the Commission comprised
the following members appointed from institutions specified in the Act:
Chairperson
(Chintu Y. Mulendema)
Mr. Chintu Y. Mulendema
Mr. Mulendema has been the
SEC Board Chairman since
August, 2013. He is a fellow
member of the Zambia
Institute of Chartered
Accountants (ZICA). Mr.
Mulendema represents ZICA
on the Board.
Vice Chairperson
(Amos Siwila)
Mr. Siwila has been the SEC
Board Vice- Chairman since
November 2015. Mr. Siwila a
lawyer, represents the Law
Association of Zambia (LAZ)
on the Board.
Ms Gloria Munkombwe
Commissioner
Ms. Munkombwe has been a SEC
Board Member since April 2011.
She represents the
Non GovernmentalNon-
Governmental Coordinating
Council (NGOCC) on the Board.
Mr Joe .H. Simachela
Commissioner
Mr. Simachela has been a
SEC Board Member since
June 2010. He is a Chief
State Advocate and
represents the Ministry of
Justice on the Board.
Dr Jonathan Chipili
Commissioner
Dr. Chipili has been a SEC
Board Member since August
2012. Dr. Chipili, an
economist at Bank of Zambia
(BoZ) represents the Central
Bank on the Board.
Mr. George Nonde
Commissioner
Mr. Nonde has been a SEC
Board Member since
September 2014. Mr.
Nonde a Chartered
Accountant, represents the
Zambia Chamber of
Commerce and Industry on
the Board.
SEC Management During The Period Under Review
(Insert Portraits of SEC Management)
Phillip K. Chitalu Secretary and Chief Executive
Mutumboi Mundia Director - Market Supervision & Development
Diana Sichone Director - Enforcement & Legal Services
Bruce Mulenga Manager - Market Transactions & Investments
Mateyo Lungu Manager - Finance
Saul Nyalugwe Manager - Administration
Abraham Alutuli Manager- Market Supervision
Nonde Sichilima Manager- Market Supervision
Dingase Makumba Manager -Market Development
Glory Chipoya Manager- Enforcement & Legal Services
CHAIRMAN’S REVIEW
PHOTO It is pleasing to report on the Commission’s performance for the
financial year ended 31st March 2016. The Commission continued
to perform its investor protection role on a positive trajectory.
The Commission approved a new strategic plan for the period 2015 – 2018. With the lessons learnt
from the review of the 2012- 2015 strategic plan performance, the Board and staff are now
committed to see that going forward, capital markets delivered on its pivotal role of channeling
savings to the long-term investment areas. It is also pleasing to note that the Commission continued
to advance the development of the governance structures of the market. While the Ministry of
Finance has been supportive of ensuring the Securities Act was updated through the approval of
the Securities Bill of 2016, we at the Commission will see that the new changes within the Act
worked to further strengthen the needed corporate governance structures in the market.
I am happy to report that other than the Ministry of Finance and Justice ensuring that the Law
reform progressed including by taking the Bill to Parliament, the Lusaka Securities Exchange Plc
(LuSE) became a Public Liability Company (Plc), a desired route to ensure increased participation
by more stakeholders in owning and running the affairs of the market. I am also happy to report
that while becoming a Plc is not an end in itself, the confidence that this will create will attract
more players onto the securities market and in the process, it is hoped that this will help channel
the much needed funding to the disserving economic sectors of our nation by fairing assessing,
and then allocating resources in a competitive but efficient and effective manner.
In the same vein, the SEC has also ensured that in order to fully protect the assets of the investing
public, the LuSE has in the discussions with the SEC, agreed to separate the operations of the
trading platform (LuSE) from those of the custodian of assets, the Central Securities Depository
(CSD). This is not only a good direction to follow for our market, but is also a key IOSCO and
investor requirement. I am thus happy to report that as this happens, again we are likely to see
more interest and participation by foreign and local investors generated by this positive move.
Meanwhile, we have witnessed the growth in the funds under management within the Collective
Investment Scheme (CIS) segment. While the total funds under management is relatively small in
comparative terms, the Commission sees this segment as one that will provide an alternative short
to medium term savings and investment vehicle for both retail and institutional investors. To
enhance this segment, the Commission has issued guidelines on how to segregate the funds under
management from those of the manager including the need to have all managed assets under the
custody of an authorized entity.
I am also happy to report that we at the Commission continued to interact with the market players
so that the Board could get first hand information from the market while the market also had an
opportunity to air their views direct to the Board through the Chairman’s breakfast. We believe
that this is key in running a transparent market. The Commission during the period under review
therefore hosted two breakfast meetings with key stakeholders in the capital markets. We have
seen that since the launch of this initiative, various stakeholders have eagerly sponsored these
breakfast meetings, is an indication that this is one of the needed ways of interacting with the
market.
Going forward, and in the usual Commission spirit of consultation, we will as part of our strategic
plan agenda, hold an indaba to help map our capital market growth pattern. You will agree with
me that without a well thought out capital markets development plan in place, we may have an up
hazard development of the market that did not speak to our Zambian needs. Therefore, we are
looking at sitting down with all key stakeholders so that a long-term capital markets development
agenda could be crafted.
In conclusion, and on behalf of my colleagues on the Commission Board, I wish to extend my
gratitude to all capital markets stakeholders who have weathered with us thus far. I wish to
underscore the importance of continued dialogue and interaction as we implement our new
strategic plan. May I also say that the Commission staff have continued to act in a very professional
way in handling market information and transactions including accommodating the market at short
notice. Ultimately, it is the combined efforts of the Commission and the stakeholders that will help
bring to full realization our mission “ To stimulate the expansion and grow the capital market in
order to make a sustainable contribution to the economic development of Zambia”.
I am confident that with the help of government, other stakeholders, and indeed the SEC staff, the
Commission will continue to be relevant in the economic development agenda of the nation.
Chintu .Y. Mulendema
CHAIRMAN
CHIEF EXECUTIVE’S STATEMENT
The Zambian capital markets continued to contribute to the overall financial sector goals. However,
the challenges faced by the country in the macroeconomic factors, affected the performance of capital
markets. We report below the performance of the equity, corporate debt, and Collective Investment
sectors of the capital markets sector, which all contributed to the overall financial and regulatory
performance of the Commission.
Performance of the equities market
Although we have two licensed exchanges on the market, the performance of the market report is
restricted to the Lusaka Securities Exchange Plc (LuSE), which is the only active regulated market.
The Bonds and Derivatives Exchange (BaDEX) was not active during the review period.
Equity market
The Lusaka Stock Exchange (LuSE) All Share Index (ASI) closed the year at 5,534.39 points
indicating a 9 % decrease compared to the preceding period that closed at 6,099.65 points. The
decrease in the ASI was mainly due to negative price changes in share prices notably in Airtel
(39.6%), Bata Shoes (183.1%), National Breweries (12.5%), Zambian Breweries (21.2%) and
ZCCM-IH (48.1%).
We present below the salient indicators of the performance of the market during the year under
review:
31/03/2016 31/03/2015 percentage
change
LuSE All Share Index 5,534.39 6,099.65 9%↓
Market Cap K’ million 63,466 65,395 3%↓
Market Cap US$ million 5,703 8,539 33%↓
Trading Turnover (Equities) K’million 753 1,093 31%↓
Volume of Shares Traded ’ 103,025,256 234,372,580 56%↓
Number of Trades 2,986 4,924 39%↓
Number of Listed Companies 23 23 0%
Number of Quoted Companies 12 9 33%↑
Market Capitalization/GDP Ratio (%) 20 21 5%↓
Trading Turnover (Debt Securities) K’ million 2,886 1,918 50%↑
Number of Trades (Debt Securities) 274 160 71%↑
Number of Brokers 6 6 0%-
Number of Collective Investment Schemes 8 7 14%↑-
Source: Lusaka Stock Exchange Limited
Market Capitalisation
The market capitalization in Kwacha terms (including Shoprite) declined from K65, 395 million as
at 31st March 2015 to K63, 466 million as at 31st March 2016, representing a 3% decrease. This
decrease in the market capitalisation was due to the fall in the share prices of some of the listed
entities. The market capitalization, excluding Shoprite closed at K 29,227 million as at 31st March
2016 compared to K 31,155 million at 31st March 2015 a 6% drop.
In USD terms, the market capitalization of the LuSE including Shoprite decreased by 33 % from
US$ 8,539 million at 31st March 2015 to US$ 5,631 million as at 31st March 2016. The decrease is
mainly attributed to the depreciation of the Kwacha by 51% between 31st March 2015(K7.43) and
31st March 2016 (K11.27). The market capitalization excluding Shoprite was US$2,593 million as
at 31st March 2016 compared to US$ 4,193 million as at 31st March 2015 a 38% drop.
Trading Turnover (value of traded shares)
The Market turnover for the period under review decreased by by 31% from K 1,093 million as at
31st March 2015 to K 753 million as at 31st March 2016. The 2014/2015 increase in turnover is
attributed to the Government’s scale down of its holding in ZCCM-IH, and the Lafarge exercise of
meeting the minimum float of 25% that were conducted during the financial year.
Volume of Trades (Number of Shares Traded)
The volume of shares traded during the financial period decreased by 39% from 4,924 shares as at
31st March 2015 to 2,986 shares at 31st March 2016. The decline is in volume of shares trade is
attributed to low activities in the market due to the effect of various economic factors in the period
under review.
Listed and Quoted Companies
There was no change in the number of listed companies during the period under review, while the
number of quoted companies increased from 9 as at 31st March 2015 to 12 as at 31st March 2016.
The three(3) Companies that were added to the quoted tier are Ikulileni Investment Plc, Veritas
General Insurance Plc and Engineering Institution of Zambia Properties Plc.
Trading Turnover (Government Debt Securities)
The trading turnover increased by 50% from K1, 918 million as at 31st March 2015 to K2,886 million
as at 31st March 2016. Similarly, the number of trades in debt securities increased by 71% from 160
trades as at 31st March 2015 to 274 trades as at 31st March 2016. in the previous period to 156 trades.
Corporate Bonds
In terms of corporate bonds, the total value of debt securities registered with the Commission
asCommission as at 31st March 2016 was K15.1 billion and the total amount of debt outstanding as
at 31st March 2016 was K 856.7 million representing 5.70% of the total amount of registered debt
with the Commission.
Collective Investment Schemes (CIS)
While the number of CIS managers remain the same as in the 2015-2016 financial year, the value of
funds under management significantly increased from 252,054,264 to 360,475,337. This increase is
mainly due to the participation in the sector by private pension funds. Although this is relatively
small compared to other markets in the region, the oversight role that the Commission is playing is
beginning to positively impact on the performance of the CIS sector.
Financial Performance of the Commission
The Commission continues to receive a grant from the government as part of government efforts in
growing this sector as well as ensuring long term savings are protected. With the challenges
mentioned above in the equity, corporate debt, and CIS segments of our market, these to some extent
negatively impacted on the financial performance of the Commission. However, it is also worth
noting that although the ability to generate revenues affects the Commission’s main mandate of
investor protection as some programs are not fully implemented, the Commission’s mandate is not
to post surpluses. Therefore, it is important not to put too much weight on the financial performance
indicators only. We report in a later section on some of these non financial activities that the SEC is
required to do as part of its mandate.
The period under review ending 31 March 2016 recorded an operating surplus of K2,926,459 from
a combined income of K17,347,216. This is against total operating costs of K14,42,757 for the
year. Compared to the 2015 financial year, there was a 54% reduction in the surplus recorded for
the year. This was due to a decrease in market activities with respect to the registration and trade
commission’s income lines.
Accumulated Fund
The Commission’s Accumulated fund position at the end of the period stood at a K9,500,169 in
contrast to K6,573,710 in the previous period. This will assist the Commission meat future employee
obligations such as gratuity and accumulated leave pay.
The diagram below shows the net assets position over of the last five years, which shows that the
commission has managed to keep its costs within its purse limits, and without compromising its core
mandate of investor protection
Income Earned
During the year ended 31st March 2016, the low level of market activities affected the ability of the
SEC to generate income, which resulted in the GRZ grant accounting for an increased contribution
-2000000
0
2000000
4000000
6000000
8000000
10000000
2012 2013 2014 2015 2016
Net Assets
Column1
of 56% to the total Commission income. This is despite the government grant remaining at the same
level in the last three financial years. Therefore, the grant as a contribution to the total income for
the Commission increased from 49% in the previous financial year to 56% as explained above.
Below is a depiction of the trend in the last two financial years:
Commission Expenses
0
10
20
30
40
50
60
2016
2015
56%
2%
7%
8%
14%
2%
1%
1%
2%
0%
4%
2% 3%
Income Streams
Grz Income
Authorisation
LuSE Trade Commissions
Licensing Fees
Registration Fees
Scrutiny Fees
Inspection Fees
Luse Annual Fee
CIS Levies
Sundry & Other
Interest Received
The Commission’s major expense continues to be employee costs, a significant and key component
of our regulatory activities and cost drivers. On a comparative basis, during the review period, the
Commission’s total staff costs were 51.48% of its total expenditure while employee costs accounted
for 56.93% of total costs in 2015. Being a service oriented organization, labor, awareness, and
governance costs continues to be the Commission’s major cost elements.
The Commission also strives to uphold good corporate governance by ensuring that the SEC had a
well functioning board supported by effective board committees. The professionally stuffed
committees of the board have continued to assist the Commission run its affairs in a professional
manner. Therefore, Board expenses inclusive of Committees are another line on our expenditure side
that contributes to our administrative costs. The Board and committees also help the organization by
carrying out checks and balances as well as guidance where need be.
Our staff being our greatest resource, the Commission ensures continued training and development
activities were in place. The Commission continues to passionately take strives in developing the
market through development programs such as the Capital Markets Awareness Campaigns.
Capital Expenditure
During the period under review, the Commission’s capital expenditure was as follows:
Type 2016 ZMW 2015 ZMW
Computer hardware 63,123 47,851
Office equipment 2,751 6,730
Office furniture 8,329 20,080
Motor vehicles 210,806 -
Total 285,009 74,661
There was an increase of 74% in capital expenditure during the period under review due to the purchase of
two utility motor vehicles meant to assist the Commission perform market inspections more effectively.
Market Development
The Commission has a dual mandate of regulating and at the same time developing the market. In
regulating and developing the market, various activities were undertaken during the year. These
included the following:
The Let’s Talk Capital Markets Awareness Program
The ‘Let’s Talk Capital Markets awareness campaign was undertaken in line with the National
Strategy for Financial Education whose objective is to empower Zambians with improved
knowledge, understanding, skills, motivation and confidence to help them secure positive financial
outcomes for themselves and their families. Further, this is consistent with country’s vision 2030
meant to make Zambia a prosperous middle-income country by 2030.
The ‘Let’s Talk Capital Markets Awareness Campaign’
launched in May, 2015 by Hon. Minister of Finance
Alexander Chikwanda MP. included various awareness
and sensitization activities undertaken as follows:-
The Launch by the Minister of Finance Hon. Alexander
Chikwanda, MP.
Following the Minister’s launch of the awareness
campaign, deliberations by market players on what was
needed to develop the market took place in various
round table discussion groups.
Round Table breakaway workshop for State Owned
Entities
Round Table breakaway workshop for SME's access to
finance at the launch
Collective Investment Schemes (“CIS”) School’s Challenge Game
The Commission sponsored and coordinated a CIS Schools Challenge Game, a 12 week challenge.
The CIS Schools Challenge was designed to bring awareness on alternative investment instruments
available on the Zambian market. In this challenge, each participating school invested their virtual
money through an equity CIS on the stock exchange. The challenge was to have school going
children appreciate the rigours of making investment decisions based on real life scenarios. The CIS
challenge came to an end on 16th October 2015 with the winning schools being given various prizes.
The competition which was successfully implemented has left a positive investment and decision
making impact in the pupils and teachers who became familiar with not only the SEC mandate but
also the products in the Capital Markets especially equity based investment instruments.
The 1st Prize of K10,000 went to Northmead Secondary School, 2nd Prize of K8,000 went to Roma
Girls Secondary Schools while the 3rd Prize of K3,500 was awarded to Chelstone Secondary School.
Right: The Launch of the CIS Schools and challenge where pupils were trained in preparation for the game and on the right is the awards
giving ceremony with Northmead presented with winners prize by SEC Chairman Mr Chintu Y. Mulendema.
Group photo of all participating schools and officials from the Ministry of Education and SEC.
Workshop with Parliamentarians
The Commission has identified the need to have all stakeholders aware of the existence and
importance of capital markets in the development agenda of the nation. It was with this picture in
mind that the SEC organized a workshop for Parliamentarians. Parliamentarians are also identified
as key stakeholders in the capital markets development process considering that Law reviews to meet
the changing financial landscape is important.
Awareness workshop with parliamentarians
1 web
The Capital Markets Round Table with the Lord Mayor of the City of London
The Securities and Exchange Commission in collaboration with KPMG Zambia Ltd, held a Capital
Markets Round Table discussion and networking luncheon where the Rt. Hon. The Lord Mayor of the City
of London, Jeffrey Mountevans and a British business delegation that visited Zambia from 24th February to
27th February 2016 was hosted.
SEC took the opportunity to engage the Lord Mayor and his delegation at a round table discussion
where other key local capital markets players and professional advisors were invited to participate.
The topic under discussion was “Facilitating ForeignFacilitating Foreign Direct Investments Using
the Zambian Capital Markets – Growing Zambia’s Capital Markets and Raising Capital for
Infrastructure and SME Development”.
The round table discussion was envisioned as a useful forum for exchange of information amongst
all participants, including giving the Lord Mayor’s delegation the opportunity to learn more about
the investment opportunities in Zambia and opportunities within the Zambian capital markets for
facilitating FDIs.
The Rt. Hon Lord Mayor of the City of London Jeffrey Mountevans addressing stakeholders during the Capital Markets Round Table
discussion.
Professional Development in the Sector
As part of the Commission’s efforts in ensuring the market developed, availability of relevant investment and
capital markets skills is important. To this end, the SEC partners with both local and foreign academic and
professional institutions in delivering continued education (CEs) programs on the market. Locally, the SEC
has for over 10 years worked together with the Zambia College of Pension and Insurance (formerly Zambia
College of Insurance and Business Studies – ZBIC) in running a capital markets relevant short term course.
In order to take the development of capital markets to another level, the SEC signed an agreement with the
Chartered Institute of Securities and Investments (CISI) of the UK. The agreement recognizes the mutual
collaboration need to provide an effective framework for cooperation in the development of a formal
certification program for the financial services sector practitioners that will enhance and promote
professionalism and professional standards in the financial services industry in Zambia.
The Rt. Hon Mayor of the City of London Jeffrey Mountevans and SEC Board Chairman Mr. Chintu Y. Mulendema sign an agreement for
the collaboration of the CISI and SEC.
This agreement was signed during the round table discussion with the Lord Mayor of the City of London on
25th February 2016.
Agreements with other Regulators
To speed up the rate at which services are provided including the need to authorise and/or register financial
transactions timely, agreements with other regulators is necessary. It is with this background that the SEC has
embarked on the process of ensuring communication channels such as MOUs are put in place so that clients
are not inconvenienced in their fund raising ventures. The PACRA, which authorises share capital of players
on the capital market is thus an important player within our share registration process.
The Commission therefore signed an MOU between SEC and Patents And Companies Registration Authority
(PACRA)
PACRA Registrar Mr Anthony Bwembya and SEC Secretary and Chief Executive Secretary Mr Phillip Chitalu sign an MoU
This MOU will serve to promote the integrity and efficiency the securities industry as companies seeking to
operate in the securities market will be attended to effectively. The MOU will also enhance the supervision
of cross-authority transactions, and in the process preventing fraudulent and other prohibited practices in
Zambia.
General Awareness
As part of a general awareness campaign, the SEC participated in the Lusaka Show Society Agriculture and
Commercial held in August 2015. The Capital markets pavilion was a hive of activity where SEC, the LuSE,
BaDEX and several fund managers interacted with the show goers and exchanged information on what
happens in the capital markets while visitors inquired and suggested what they needed to see in the capital
markets.
Part of the SEC Team with Market Players in the Capital Market at the Show stand
Staff Complement
The Commission’s staff complement during the review period remained at 18 (2015 – 18).
Conclusion
The market has a lot of potential to grow. With the Commission’s awareness programs such as the meeting
with parliamentarians, Schools challenge, and the regular Chairman’s breakfast meetings, the SEC sees
growth prospects in both the use of the market to fund projects as well as use of the equity and CIS savings
and investment options by the public.
Phillip K. Chitalu
SECRETARY & CHIEF EXECUTIVE
OPERATIONAL ACTIVITIES
Licensing Activities
The Securities and Exchange Commission (SEC), a regulatory body which is established under the
Securities Act, Cap 354 of the Laws of Zambia, is the licensing authority for capital markets and
securities business intermediaries. As the regulator and supervisor of the capital markets and
securities industry in Zambia, the SEC hereby informs the investing public that it is a requirement of
the Securities Act for all financial intermediaries conducting securities business such as dealing in
securities, collective investment schemes, derivative products, providing investment advisory
services, and any similar activities in Zambia to be licensed unless such intermediaries are exempt
by law.
Therefore, before any person conducts securities business in Zambia, that person must obtain an
appropriate licence from SEC. Likewise, the public should, for their own protection, ensure that they
only deal with licensed firms or individuals when conducting investment related transactions such
as putting their money in unit trusts, offshore investment plans etc.
Licensees are required by law to display their licences prominently at all their business premises.
Members of the public are warned that you should only give instructions to properly licensed persons,
as placing your financial assets and other interests with unlicensed persons places your investments
at great risk. When in doubt regarding the licensing status of any person offering you securities
business, kindly consult the SEC.
Regulatory Framework
The Securities Act is the principal Act for the regulation of the Zambian securities market. The
Securities and Exchange Commission (SEC) has as a mandate to protect investors and ensuring that
the markets were free, fair, transparent and above all liquid. The SEC therefore adopts a consolidated
strategy in the regulation and supervision of the capital market players or intermediaries, as these are
key in the protection of the investing public.
Licensing, being at the forefront, sets high regulatory standards at the very outset to fulfil the
Commission’s mandate which is designed to ensure investor protection and support the operation of
a free, orderly, fair, secure and properly functioning Securities Market. Licensing acts as the focal
point between the SEC and the market players so as to strike the right balance between its business
friendly approach and complying with international regulatory standards.
In line with its endeavour to align its processes to international best practices and to embrace modern
regulatory approaches, the SEC constantly ensures that these practices are embedded intoembedded
into its operations at the licensing stage. As a result, this provides for a more cohesive and transparent
framework guiding further improvements in the Commission’s regulatory approach.
The licensing procedure is clearly defined in the Securities Act and rules, regulations and guidance
notes issued by the SEC. At Licensing, the SEC has in place a transparent and well-established set
of procedures leading to the issue of a licence or the rejection thereof.
The regulatory power of the Commission is anchored upon four pillars as follow:
Any person dealing or advising on securities must be licensed by the Commission;
Any securities market must be authorized and licensed as a securities exchange by the
Commission;
All securities of a public company which are publicly traded must be registered by the
Commission; and
Collective Investment Schemes must be authorized by the Commission.
In assessing applications, the SEC is required to conduct a number of assessments - including the fit
and proper test of applicants, financial soundness of the applicants, lawfulness and moral standards
of the proposed activity and any other relevant issues. Where applications may cause harm to the
good repute of the jurisdiction, such applications are recommended for rejection.
In 2016, the SEC rejected 2 applications with the purpose to protect the good repute of the
jurisdiction. The main reasons for which the applications were rejected are lack of fitness and
propriety of the proposed Applicant and unsound financial position.
Licences Issued in 2016
The Capital Markets Sector has been gaining momentum and systemic importance based on the
number of applications for licences received in 2016. However, the Commission continued in its role
of ensuring that only fit and proper persons and entities were allowed to offer securities services to
the investing public.
During the Financial Year ended 31st March 2016 the Commission licensed various entities, in whose
details are in the appendix. The breakdown of the licenses issued is as follows:
License area 31/03/2016 31/03/2015
Percentage
change
1. Collective Investment Schemes (CIS)
8 7
14%↑-
2. Dealer’s License 27 25
-
3. Dealer’s Representative License 105 70
43%↑
4. Investment Advisor’s License 7 7
-
5. Investment Advisor’s Representative License 19 12
42.0%↑
6. Securities Exchange License 3 2
50.0%↑
Total 169 123
37%↑
Inspections and Surveillance
Inspections
In order to ensure that the market was safe and secure, the SEC carried out annual inspections for the
year ended 31st March 2016. Inspections were carried out on dealers, Investment advisors and
securities exchanges. Inspections involve a desk review of each licensee’s file, face to face
interactions with officers of the licensees and examination of documents. The final output was an
inspection report with recommendations. For the period under review, licensees were inspected as
follows:
Surveillance
The overall mandate of the SEC under the Securities Act Cap 354 of the Laws of Zambia is to protect
investors. One of the functions that ensures this is done is market surveillance, which includes
monitoring, investigations, inspections and handling complaints from the market players.
Complaints Handling
In term of complaints, the commission handled nine (9) complaints in the period under review and
seven (7) have been successfully concluded. The remaining two (2) have been passed on for
recommendation to the relevant departments.
TYPE OF COMPLAINT
DATE
RECIVED
ACTION TAKEN
STATUS
1. Requested update on
progression of shares:
24.03.16 The concerned party gave proof that the client
was assistance accordingly but there’s no
feedback from client showing he was satisfied
with the efforts.
open
2. Sought update on why an
agent was appointed for him
without his authorization
24.03.15 the client was advised that the appointment of
agents is done by the issuer .
closed
3. Appealed against reduction
of shares by Airtel from
30,000 to 600
11.06.15 The LuSE contacted the client via a letter and
the SEC was in copy explaining the
consolidation of Airtel shares and helped him
understand what that meant.
closed
4. Sought for an update on why
he has not received a dividend
on his remaining 500
ZAMEFA shares
13.07.15 The client gave instructions to sell on two
occasions and this has been confirmed by the
LuSE. He did not reconcile his shareholding
properly after the last of his shares were sold.
Hence no dividend closed
5. A client complained of the
broker having held on to his
money for 8 months after sale
of Madison shares
17.09.15 The broker wrote to the client (with SEC in
copy) and apologized the having
inconvenienced the client .
closed
License type Number of
licensees
Number
inspected
% Inspected
1.Dealers 28 23 82.1%
2.Investment advisors 8 5 62.5%
3.CISs 8 8 100.0%
4.Securities Exchanges 2 2 100.0%
Total 46 38 82.6%
6. A client complained of the
broker not having contacted
him to collect money after
selling of his shares
25.09 15 . The broker explained their lack of
communication to the client as a lapse in their
operations and therefore compensated the
client. closed
7. Sale of clients shares
without their consent
06.10.15 the case has been handed over for
enforcement.
open
8. Baby and family bond issues 07.01.16 clients resolved to settle their issues outside of
the commission’s oversight
closed
9. Delays in the payment of a
ZANACO dividend
12.08.16 complaint resolved and closed
closed
Review of CIS Returns
As part of the Commission’s supervisory processes, the CIS fund managers submit monthly returns,
which the SEC uses to monitor the safety of funds. The CIS industry, which eight (8) fund managers
who manage 30 sub funds are required to appoint a trustee who acts as the investor’s custodian.
Meanwhile, all funds should be separately kept at one of the two licensed custodians. At 31 March
2016, the funds under management were held as follows:
Name of Fund 31 March
2016 31 March
2015
ZMW ZMW
ABC Unit Trust 49,934,260 40,907,627
Mukuyu Unit Trust 3,536,841 -
Madison Unit Trust 54,678,155 44,457,218
Mpile Unit Trust 211,311,728 129,145,270
ECR Unit Trust 2,234,769 1,958,102
Intermarket Unit
Trust
8,560,591 12,847,906
Kukula Fund 1 23,264,398 18,088,016
LP Unit Trust 6,954,595 4,650,124
Total 360,475,337 252,054,264
Attendance of Annual General Meetings (AGMs)
As part of our investor protection activities, the Commission attends in an observer capacity,
AGMs of listed and registered entities. During the year our market surveillance team AGMs for
most of the listed companies and the following items were noted;
a) Attendance; About 50 percent of the AGMs were well attended and compliant in terms of
holding the meetings within the stipulated time and for those that were outside time waivers
were applied for and granted before the due date.
b) Investor Participation; investors fully participated in the deliberations of the meetings very
well and all issues raised were well responded to by most companies. Most investors
seemed well involved in the monitoring of the performance of the companies in which they
have invested.
Investigations
The Commission undertook two investigations in the period under review. The outcome of the
investigations was that one of the parties involved was brought to book and handed over to the
relevant authorities while the Commission is still in the process of obtaining more information on
and investigating on the other case.
Enforcement and Legal Services
The Commission through the Department of Enforcement and Legal Services ( “DELS”) is
responsible for the enforcing the Securities Act (“the Act”) and the Rules made there under. It is also
responsible for identifying and recommending law reform and development in the securities sector.
The following gives DELS activities during the period under review.
Regulatory Changes in the Proposed Securities Bill (“the Bill”)
The Bill, which underwent stakeholder review is currently at the National Assembly awaiting to be
presented for legislation. The Commission is hopeful that the Bill will be enacted into law during the
Session beginning September, 2016. The following are the highlights of the proposed changes to the
Securities Bill:
Introduction of Perpetual Licenses
The Bill introduces a perpetual license with annual license fees. The license once granted is
valid until revoked or suspended. It is envisaged that this will make it relatively easy to
administer and will reduce the licensees’ annual application requirements.
a) Regulation of Share Transfer Agents/ Securities Registrars
In the current Securities Act, Cap 354 of the Laws of Zambia Transfer Agents are recognized
but there is no specific provision for their regulation. The Securities Bill brings the Agents in
the regulatory ambit of the Commission. In recognizing the vital role played by the Agents
in the securities market, the proposed Bill is timely and progressive in proposing for the
regulation of the Agents. In the same vein, the Bill introduces the licensing of clearing and
settlement agencies to operate in the capital market’s space.
b) The Capital Markets Tribunal
The Securities Bill creates a Tribunal to deal with disputes in the capital market. The Tribunal
will be headed by a Chairman who should be a lawyer qualified to be appointed Judge of the
High Court.
c) The Commission’s Power to vet Directors
The Bill proposes that the Commission shall have the power to vet and approve the Directors
and senior Management appointed to serve on an exchange (s). The Bill also proposes to
introduce fitness standard for members and directors of the exchange (s).
Regulatory Actions Taken Between April, 2015 and August, 2016
The Securities Act provides broadly for the suspension, revocation and/or criminal prosecution as
enforcement options for any licensee that breaches its provisions. The Commission has recourse to
these options when there are grounds and circumstances meriting the specific action. During the
period under consideration, the Commission undertook a number of administrative actions on
licensees.
Market Transactions
During the financial year ending 31st March 2016, the Commission received and approved
applications for companies including registration of securities, mergers and acquisitions. Waivers
from certain Securities Act obligations as enshrined in the Act, and other miscellaneous market
activities were also considered.
The table below shows the companies, type and number of securities that where approved during the
period under review:
DATE COMPANY TYPE AND NUMBER
OF SECURITIES/OR
TRANSACTION
APPROVAL
GRANTED
ON
PURPOSE OF MEETING
01.04.2015
Zambia Institute of
Chartered
Accountants
US$ 28,000,000 Medium
Term Note Programme 09.04.2015
Approval for registration of a
Medium Term Note
Programme
01.04.2015
Engineering Institute
of Zambia
50,000,000 Engineering
Institute of Zambia
ordinary shares 09.04.2015
Approval for registration of
shares
01.04.2015
Imara Global &
Imara Africa
Opportunities Fund
Off shore Collective
Investment Scheme 01.04.2015
Approval for Authorisation of
Collective Investment Scheme
01.04.2015
Ikulileni Investment
Plc
27,016,057 Ikulileni
ordinary shares 18.04.2015
Approval for registration of
shares
19.06.2015
Mukuyu Growth
Fund
Collective Investment
Scheme 25.06.2015
Approval for Authorisation of
Collective Investment Scheme
19.06.2015 Zambian Home
Loans
ZMW 45,000,000
Medium Term Note
Programme 19.08.2015
Approval for registration of a
Medium Term Note
Programme
19.06.2015 Madison Finance
Company
ZMW 400,000,000
Medium Term Note
Programme 25.06.2015
Approval for registration of a
Medium Term Note
Programme
19.06.2015 SABMiller Plc
Employee Share
Ownership Plan 25.06.2015
Authorization of Employee
Share Ownership Plan
19.06.2015 Bayport Financial
Services Ltd
ZMW 300,000,000
Medium Term Note
Programme 25.06.2015
Approval for registration of
additional Notes
06.08.2015
Ulendo
ZMW 500,000,000
Medium Term Note
Programme 19.08.2015
Approval for registration of a
Medium Term Note
Programme
15.10.2015 Zambia National
Building Society
ZWM 400,000,000
Medium Term Note
Programme 12.11.2015
Approval for registration of a
Medium Term Note
Programme
15.10.2015
BancABC
ZMW 400,000,000
Medium Term Note
Programme 12.11.2015
Approval for registration of a
Medium Term Note
Programme
16.02.2016
JP Morgan
Investment and
Franklin Templeton
Investment Fund
Off Shore Collective
Investment Scheme
18.02.2016
Approval for Authorisation of
Collective Investment Scheme
Training and Workshops
Multi-national and Regional Conferences and Summits Attended by Commission Staff
The Commission has a deliberate policy to ensure staff are aware of the developments in this ever
changing capital markets environment. The country and the commission are also signatories to
regional bodies such as SADC, which among other things require membership and attendance at
meetings such as those of the Committee on Insurance, Securities and Non Bank Authorities
(CISNA) and the Eastern and Southern African Anti Money Laundering Group (ESAAMLAG).
Therefore, during the Financial Year ended 31 March 2016, Commission staff attended the following
training, Conferences, meetings and workshops.
Course and Location Dates Attended by
Capital Markets Training, USA
14th – 29th March 2015
Director Market Supervision &
Development (DMSD)
Strategy Management, Dublin
13th – 24th April 2015
Secretary & Chief Executive
(SCE)
ZICA Annual General Workshop
17th – 18th April 2015
Three Commissioners, Manager
Market Transactions &
Investments and Manager Finance
CISNA, Lilongwe, Malawi
27th – 1st May 2015
Manager Market Transactions &
Investments (MMT&I)
ESAAMLG Meeting, Brisbane,
Australia
21st – 26th June, 2015
Director Enforcement & Legal
Services
LAZ Annual Business
Conference, Livingstone
23rd – 25th April, 2015
Manager Enforcement & Legal
Services (MELS)
World Bank Impact Evaluation
Workshop - Istanbul, Turkey
11th – 14th May 2015 Director Market Supervision &
Development (DMSD)
FSB Familiarisation Tour and
Training, South Africa
20th – 30th July, 2015
Accounts Assistant, Surveillance
Officer
International Skills Development
Symposium, Livingstone
22nd – 26th June, 2015
Personal Assistant & Secretary
Market Transactions &
Investments
ZICA Annual Business
Conference, Livingstone
11th – 14th August, 2015
Manager Market Transactions &
Investments, Manager Finance
and Manager Market Supervision
CISNA, Mozambique
26th – 30th October, 2015
Secretary & Chief Executive
(SCE), Manager Market
Transactions & Investments
(MMT&I)
Kenya Familiarisation Tour
8th – 15th November 2015
Director Market Supervision &
Development (DMSD), Manager
Market Supervision, Surveillance
Officer Manager Enforcement &
Legal Services
13th Annual African Capital
Markets Conference, Cape
Town, South Africa
25th -27th November 2015 SCE, SEC Commissioners
Manager, Market Transactions &
Investments
Performance Management
Training, Chaminuka Lodge,
Lusaka
15th – 17th March, 2016
Human Resource Officer
Driver’s Workshop, Livingstone 26th – 27th March 2016 Driver & Office Assistant
Strategic Plan Overview
The Commission has identified and charted objectives that will be pursued during the 2015 -2018
strategic planning period. These objectives include the following:
Objective One: “Develop and deploy strengthened institutional capacity.
This objective has been carried from the 2012-2015 Strategic Plan as we believe that this is the
backbone of the Commission performing better as a regulator.
Objective Two: “Establish and maintain an effective and efficient regulatory environment for
Capital Market.
This is to provide the investors and the market in general with comfort that there is an effective and
efficient regulatory and legal system protecting their interests.
Third objective: “Encourage and facilitate the development and diversification of Capital
Market products and financial instruments.”
This is in a bid to grow the Zambian Capital Market and thus offer a wider selection of investment
instruments.
Fourth objective: “Optimise market transaction costs.”
In general, this will ensure that the Capital Market contributed to the reduction in the cost of doing
business in Zambia.
Fifth objective: Enhance investor protection within the Zambian Capital Market.
This is one of the core mandates of the Commission, and cannot be overemphasized. A happy
investor leads to increased confidence in the Zambian capital market.
The identified goals and activities will be given to specific directorates.
The above identified goals and activities are expected to help increase the number of investors and
issuers through awareness and building market confidence. The Commission plans to see a market
where there is increased liquidity achieved through having a trusted market where there is increased
number of listed entities as well as participation on the market by an increased number of investors.
SEC Organization Structure
Manager-Admin
Secretary and Chief
Executive
Director-
Finance & Admin
Manager-
Law Reform
& Devpt
Manager-
Market
Devpt
Manager-
Finance
Manager-
Mtk
Transactions
Internal
Auditor
SEC Board
Secretary
Board Committees
Compensation Fund
Committee
Licensing Committee
Market
Transactions Committee
Staff Remuneration Committee
Risk &Audit Committee
Director-
Mkt Supervision & Devpt
Office Assistant
Director-Enforcement & Legal
Services
Secretary Secretary
Personal
Assistant
Exec..
Assistant
Risk &Audit Committee
Accounts
Officers
Manager-
Investigations &
Enforcement
Surveillance
Officer
Manager-
Mkt Supervision (*2)
HR
Officer
Drivers
NO.
1
3
9
22
1
3
0
3
3
=45
3
Committees and Committee Members
COMMITTEE
NAME
INSTITUTION
Licensing
Commissioner Joe Simachela
Commissioner Amos Siwila
Dr. Leonard Kalinde
Mrs. Namakau Mundia-Ntini
Ms. Chiluba Mumba
MoJ
LAZ
BoZ
PIA
ERB
Compensation
Fund
Commissioner (Dr) Jonathan Chipili
Mr. Brian Tembo
Dr. Francis Ndilila
Ms. Abigail L Chimuka
Ms. Annie Chala Kalulu
BOZ
LuSE
ZACCI
LAZ
BAZ
Risk & Audit
Commissioner Gloria Munkombwe
Mr. Chintu Y Mulendema
Mr. George Nonde
Dr. Fortune Kamusaki
NGOCC
ZICA
ZACCI
MoFNP
Staff &
Remuneration
Committee
Commissioner Amos Siwila
Commissioner Joe H Simachela
Commissioner Gloria Munkombwe
LAZ
MoJ
NGOCC
Market
Transactions
Committee
Commissioner (Dr) Jonathan Chipili
Commissioner Chintu Y Mulendema
Mr. Patrick D. Chisanga
Mr. Chilufya Sampa
Commissioner George Nonde
Mr. Anthony Bwembya
BoZ
ZICA
ZDA
CCPC
ZACCI
PACRA
Procurement
Committee
Mr. Phillip K. Chitalu
Mr. Charles Ng’andu
Mr. Mwawi Phiri
Mr. Saul Nyalugwe
SEC
Independent
Independent
SEC
SEC 2016 Financial Statements
Securities and Exchange Commission
Financial Statements 31 March 2016
SECURITIES AND EXCHANGE COMMISSION
FINANCIAL STATEMENTS – 31 MARCH 2016
Contents Page Statement of Commissioners’ responsibilities 1 Report of the independent auditors 2 - 3 Statement of comprehensive income 4 Statement of changes in equity 5 Statement of financial position 6 Statement of cash flows 7 Notes to the financial statements 8 - 24 Detailed statement of comprehensive income Schedule
1.
SECURITIES AND EXCHANGE COMMISSION
STATEMENT OF COMMISSIONERS’ RESPONSIBILITIES The Securities Act, 1993 requires the commissioners to prepare financial statements for each financial year which give a true and fair view of the financial position of Securities and Exchange Commission and of its financial performance and its cash flows for the year then ended. In preparing such financial statements, the commissioners are responsible for • 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 the applicable financial reporting framework, and on
the going concern basis unless it is inappropriate to presume that the Commission will continue in operation. The commissioners are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Commission and enable them to ensure that the financial statements comply with the Securities Act, 1993. They are also responsible for safeguarding the assets of the Commission and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The commissioners confirm that in their opinion (a) the financial statements give a true and fair view of the financial position of Securities and Exchange
Commission as of 31 March 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 Commission will be able to pay
its debts as and when these fall due; and (c) the financial statements are drawn up in accordance with International Financial Reporting Standards. This statement is made in accordance with a resolution of the commissioners. Signed at Lusaka Chairman
Commissioner
2.
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
SECURITIES AND EXCHANGE COMMISSION
We have audited the accompanying financial statements of Securities and Exchange Commission, which comprise the statement of financial position as at 31 March 2016, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Commissioners’ responsibility for the financial statements As described on page 1 the commissioners are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as the commissioners determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3.
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
SECURITIES AND EXCHANGE COMMISSION (CONTINUED)
Opinion In our opinion, the financial statements give a true and fair view of the financial position of Securities and Exchange Commission as at 31 March 2016, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Report on other legal and regulatory requirements In our opinion, the financial statements of Securities and Exchange Commission as of 31 March 2016 have been properly prepared in accordance with the Securities Act, 1993 Cap 354 of the Laws of Zambia, and the accounting and other records and registers have been properly kept in accordance with the Act. Chartered Accountants Wesley Beene (AUD/ F000465) Name of Partner signing on behalf of the firm Lusaka Date:
4.
SECURITIES AND EXCHANGE COMMISSION
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2016
Note 2016 2015 ZMW ZMW Income Grants and other income 6 17,347,216 19,672,240
Expenditure Employee benefits costs (7,424,317) (7,500,326) Depreciation (363,015) (472,733) Other operating expenses (6,633,425) (5,201,104) (14,420,757) (13,174,163) Surplus for the year 7 2,926,456 6,498,077 Other comprehensive income - - Total comprehensive income 2,926,459 6,498,077
5.
SECURITIES AND EXCHANGE COMMISSION
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2016
Accumulated
reserves Total ZMW ZMW
At 1 April 2014 75,633 75,633 Total comprehensive income for the year 6,498,077 6,498,077 At 31 March 2015 6,573,710 6,573,710 Total comprehensive income for the year 2,926,459 2,926,459 At 31 March 2016 9,500,169 9,500,169
6.
SECURITIES AND EXCHANGE COMMISSION
STATEMENT OF FINANCIAL POSITION - 31 MARCH 2016
Note 2016 2015 ZMW ZMW
ASSETS
Non-current assets Motor vehicles, furniture and equipment 9 421,953 515,873 421,953 515,873
Current assets Short term deposit 10 6,250,000 2,160,000 Investments 11 - 578,157
Trade and other receivables 12 3,204,874 2,504,098 Cash and cash equivalents 13 3,031,684 7,497,128 12,486,558 12,739,383 Total assets 12,908,511 13,255,256
EQUITY AND LIABILITIES
Funds and reserves Accumulated reserves 9,500,169 6,573,710 9,500,169 6,573,710 Non-current liabilities Finance lease obligations 14 - 24,572 - 24,572
Current liabilities Finance lease obligations 14 - 128,123 Trade and other payables 15 3,408,342 6,528,851 3,408,342 6,656,974 Total equity and liabilities 12,908,511 13,255,256 The financial statements on pages 4 to 24 were approved by the Board of Commissioners on and were signed on its behalf by:
) ) CHAIRMAN
) )
) COMMISSIONER ) )
7.
SECURITIES AND EXCHANGE COMMISSION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2016
2015 2014
ZMW ZMW
Cash flows from operating activities
Surplus for the year 2,926,459 6,498,077 Depreciation 363,015 472,734 Interest received (613,463) (41,914)
Increase in trade and other receivables (700,776) (147,478) Gain on disposal of motor vehicles, furniture and equipment - (1,450) Increase in trade and other payables (3,120,509) 2,954,894 Net cash (outflow)/inflow (on)/from operating activities (1,145,274) 9,734,863 Investing activities Purchase of property, plant and equipment (285,009) (74,661) Investments purchased (6,250,000) (2,887,838) Interest received 613,463 41,914 Investment interest reinvested - (129,530) Investments redeemed 2,738,157 995,871 Proceeds from disposal of motor vehicles, furniture and equipment 15,914 63,055 Net cash outflow on investing activities (3,167,475) (1,991,189) Financing activities Finance lease payments (152,695) (465,809) Net cash outflow on financing activities (152,695) (465,809) (Decrease)/Increase in cash and cash equivalents (4,465,444) 7,277,865 Cash and cash equivalents at beginning of the year 7,497,128 219,263
Cash and cash equivalents at end of the year 3,041,755 7,497,128
Represented by: Cash in hand and at bank 3,041,755 7,497,128
8.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 1. The Commission
The Commission is a body corporate that came into existence by an Act of Parliament, the Securities Act No. 38 of 1993, with the objective of inter-alia regulating and developing the securities market in Zambia.
2. Basis of preparing the financial statements - going concern basis
The financial statements have been prepared on a going concern basis which assumes that the Commission will continue in operational existence for the foreseeable future.
The validity of this assumption depends on the Commission being able to generate sufficient funds from its future activities to meet its working capital requirements and the Government of the Republic of Zambia increasing its grants to the Commission. If the Commission was unable to continue in operational existence for the foreseeable future, adjustments would have to be made to reduce the reporting date values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify equipment and motor vehicles and long term liabilities as current assets and liabilities.
The Commissioners are of the opinion that it is appropriate for the financial statements to be prepared on a going concern basis.
3. Principal accounting policies
The principal accounting policies applied by the Commission in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. (a) Basis of presentation
The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements are presented in accordance with IAS 1 “Preparation of financial statements” (Revised 2007). The Commission has elected to present the “Statement of Comprehensive income” in one statement namely the “Statement of Comprehensive Income”. They have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial assets and liabilities at fair value through the statement of comprehensive income.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Commission’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 4.
9.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED)
3. Principal accounting policies (continued)
(b) New and revised standards that are effective for annual periods beginning on or after 1
January 2015
A number of new and revised standards are effective for annual periods beginning on or after 1 January 2015. Information on these new standards is presented below.
IFRIC 21 ‘Levies’ IFRIC 21 clarifies that:
The obligating event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by the government’s legislation. If this activity arises on a specific date within an accounting period then the entire obligation is recognised on that date
the same recognition principles apply in the annual and interim financial statements. IFRIC 21 has no material effect on the annual financial statements. IFRIC 21 has been applied retrospectively in accordance with its transitional provisions and had
no material effect on the financial statements for any period presented. Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) These amendments clarify the application of certain offsetting criteria in IAS 32, including:
the meaning of ‘currently has a legally enforceable right of set-off’
that some gross settlement mechanisms may be considered equivalent to net settlement. The amendments have been applied retrospectively in accordance with their transitional provisions. As the Commission does not currently present any of its financial assets and financial liabilities on a net basis using the provisions of IAS 32, these amendments had no material effect on the financial statements for any period presented.
10.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED)
3. Principal accounting policies (continued)
(b) New and revised standards that are effective for annual periods beginning on or after
1 January 2015 (continued) Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36) These amendments clarify that an entity is required to disclose the recoverable amount of an asset (or cash generating unit) whenever an impairment loss has been recognised or reversed in the period. In addition, they introduce several new disclosures required to be made when the recoverable amount of impaired assets is based on fair value less costs of disposal, including:
additional information about fair value measurement including the applicable level of the fair value hierarchy, and a description of any valuation techniques used and key assumptions made
the discount rates used if fair value less costs of disposal is measured using a present value technique.
The amendments have been applied retrospectively in accordance with their transitional
provisions.
(c) Standards, amendments and interpretations to existing standards that are not yet
effective and have not been adopted early by the Commission
IFRS 9 ‘Financial Instruments’ (2014) The IASB recently released IFRS 9 ‘Financial Instruments’ (2014), representing the completion of its project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’. The new standard 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 have yet to assess the impact of IFRS 9 on these financial statements. The new standard is required to be applied for annual reporting periods beginning on or after 1 January 2018. 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 reporting periods beginning on or after 1 January 2017. Management have not yet assessed the impact of IFRS 15 on these financial statements.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 3. Principal accounting policies (continued)
(c) Grants Government grants are accounted for when there is reasonable assurance that the Commission will comply with the conditions attaching to them and that the grants will be received. Grants that relate to specific capital expenditure are treated as capital grants. Capital grants are deferred and amortised to the statement of comprehensive income in equal annual instalments over the expected useful lives of the assets to which they relate. Grants included in the statement of financial position represent total grants received to date less amounts so far transferred to statement of comprehensive income. Other grants are credited to the statement of comprehensive income in the period in which they are received.
(d) Licensing fee income
Licensing fee income is recognised upon issue of a licence. Registration fee income is recognised once securities are registered. Authorisation fee income on a takeover or merger transactions is recognised when the transaction is duly authorised. The LuSE trade commission is credited to the statement of comprehensive income on an accrual basis.
(e) Interest Interest income is recognised on an accrual basis.
12.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED)
3. Principal accounting policies (continued)
(f) Property, plant and equipment Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the 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 Commission and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.
Increases in the carrying amount arising on revaluation of property, plant and equipment are credited to the revaluation surplus in the accumulated fund. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in accumulated fund; all other decreases are charged to the statement of comprehensive income. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to the statement of comprehensive income and depreciation based on the asset’s original cost is transferred from the revaluation surplus to the accumulated fund.
Depreciation is calculated to write down the assets to residual amounts on a straight line basis over the expected useful lives of the assets concerned. The principal annual rates used for this purpose, which are consistent with those of the previous year, are: -
% Motor vehicles 25 Office equipment 20 Computer hardware 33 1/3 Office furniture 20
The assets’ residual values and useful lives are reviewed at each reporting date and adjusted if
appropriate.
An asset’s carrying amount is written down immediately to its recoverable amount if the 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. When revalued assets are sold, the amounts included in the revaluation surplus relating to these assets are transferred to retained earnings.
(g) Leased assets Where property, plant and equipment 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 leases. The lease rentals are treated as consisting of capital and interest; 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. All other leases are operating leases and the annual rentals are charged to the profit and loss account on a straight line basis over the lease term.
Depreciation on the relevant assets is charged to the profit and loss account over their useful lives. .
13.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 3. Principal accounting policies (continued)
(h) Lease payments
Payments made under operating leases are recognised in the income statement on a straight line basis over
the term of the lease. The Commission during the period under review had no running lease. (i) Financial assets
The Commission classifies its investments into the following categories: financial assets at fair value through profit or loss, trade and other receivables, held-to-maturity financial assets and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluate this at every reporting date. (i) Financial assets at fair value through income
This category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception.
A financial asset is classified into the ‘financial assets at fair value through income’ category at inception if acquired principally for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short term profit taking, or if so designated by management.
(i) Financial assets at fair value through income
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.
(ii) Trade and other receivables Trade and other receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market other than those that the Commission intends to sell in the short term or that it has designated as at fair value through income or available for sale. Trade and other receivables are recognised at fair value, less provision for impairment. A provision for impairment of Trade and other receivables is established when there is objective evidence that the Commission will not be able to collect all amounts due according to their original terms.
(iii) Held-to-maturity financial assets
Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities other than those that meet the definition of trade and other receivables that the Commission’s management has the positive intention and ability to hold to maturity. These assets are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment is established when there is objective evidence that the Commission will not be able to collect all amounts due according to their original terms.
14.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 3. Principal accounting policies (continued)
(i) Financial assets (continued) (iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories.
Financial assets are derecognised when the rights to receive cash flows from them have expired or where they have been transferred and the Commission has also transferred substantially all risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Held-to-maturity financial assets are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the statement of comprehensive income in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-monetary securities classified as available for sale are recognised in equity. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the statement of comprehensive income as net realised gains or losses on financial assets. Interest on available-for-sale securities calculated using the effective interest method is recognised in the statement of comprehensive income. The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active, the Commission establishes fair value by using valuation techniques.
(j) Impairment of assets (i) Financial assets carried at amortised cost
The Commission assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (a 'loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Objective evidence that a financial asset or group of assets is impaired includes observable data that comes to the attention of the Commission about the following events:
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 group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the Commission, including:
15.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 3. Principal accounting policies (continued)
(j) Impairment of assets (continued)
(i) Financial assets carried at amortised cost (continued)
• adverse changes in the payment status of issuers or debtors in the Commission; or
• national or local economic conditions that correlate with defaults on the
assets in the Commission.
The Commission first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant. If the Commission determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss has been incurred on assets carried at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income. If a held-to-maturity investment or a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under contract.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognised in the statement of comprehensive income.
(ii) Financial assets carried at fair value
The Commission assesses at each reporting date whether there is objective evidence that an available-for-sale financial asset is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and current fair value, less any impairment loss on the financial asset previously recognised in profit or loss – is removed from equity and recognised in the statement of comprehensive income. Impairment losses recognised in the statement of comprehensive income on equity instruments are not subsequently reversed. The impairment loss is reversed through the statement of comprehensive income, if in a subsequent period the fair value of a debt instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.
16.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 3. Principal accounting policies (continued)
(j) Impairment of assets (continued)
(iii) Impairment of other non-financial assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
(k) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term
highly liquid investments and balances held with banks. Bank overdrafts that are repayable on
demand are included as a component of cash and cash equivalents. (l) Foreign currencies
(i) Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Commission operates (the ‘functional currency’). The financial statements are presented in Zambian Kwacha, which is the Commission’s presentation currency.
(ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the rates
of exchange prevailing at the date of transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
(m) Employee benefits
(i) Provision for retirement benefits
The Commission has a plan with National Pension Scheme Authority (NAPSA) where the Commission pays an amount equal to the employee’s contributions. Employees contribute 5% of their gross earnings.
(ii) Provisions for leave pay and long service bonus
Provisions for leave pay are made in respect of all staff. In addition, all employees are entitled to gratuity and a provision is made thereon.
(n) Trade and other payables Trade and other payables are stated at cost.
17.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 4. Critical accounting estimates and judgements
The Commission makes estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
In the process of applying Commission’s accounting policies, management has made judgements in determining:
(a) the classification of financial assets; (b) whether assets are impaired; (c) estimation of provision and accruals; and (d) recoverability of trade and other receivables.
5. Management of financial risk
5.1 Financial risk The Commission is exposed to a range of financial risks through its financial assets. The most important component of this financial risk is credit risk. These risks arise from open positions in the interest rate and business environments, all of which are exposed to general and specific market movements. The Commission manages these positions with a framework that has been developed to monitor its customers and return on its investments.
5.1.1 Credit risk The Commission has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Key area where the Commission is exposed to credit risk is trade and other receivables and investments.
The Commission structures the levels of credit risk it accepts by placing limits on its exposure to the level of credit given to or investment made in a single entity.
5.1.2 Foreign currency risk Most of the transactions for the Commission are carried out in Zambian Kwacha. The exposure to foreign currency risk is low.
5.1.3 Capital management The Commission’s objective when managing capital is to safeguard the Commission’s ability to continue as a going concern so that it can continue to provide benefits to stakeholders. The Commission’s capital is supported by grants from the Government of the Republic of Zambia (GRZ) and its internally generated fees.
18.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 6. Income
The main sources of income were:
2016 2015
ZMW (%) ZMW (%) Grants from Government of the Republic of Zambia 9,668,004 56 9,668,004 49 Registration of securities 2,407,500 14 4,541,996 23 LuSE trade commissions 1,173,519 7 2,728,069 14 Other fees and revenues 4,098,193 23 2,734,171 14 17,347,216 19,672,240 100
7. Surplus for the year
2016 2015 Surplus for the year is stated after charging:- ZMW ZMW Depreciation 363,015 472,734 Auditors' remuneration Internal audit - 60,000 External audit 84,370 95,968 84,370 155,968
Commissioners’ and committee expenses 1,093,623 1,122,615
8. Income tax expense The Commission is exempt from income tax. 9. Motor vehicles, furniture and equipment
(a) Summary
Motor Office Office Computer vehicles equipment Furniture equipment Total ZMW ZMW ZMW ZMW ZMW
Cost At 1 April 2014 1,488,765 72,467 256,053 300,965 2,118,250 Additions - 6,730 20,080 47,851 74,661 Disposal (181,662) - - (10,840) (192,502) At 31 March 2015 1,307,103 79,197 276,133 337,976 2,000,409
Additions 210,806 2,751 8,329 63,123 285,009 Disposals (376,813) - - - (376,813)
At 31 March 2016 1,141,096 81,948 284,462 401,099 1,908,605 Depreciation At 1 April 2014 777,517 51,857 129,358 183,967 1,142,699 Charge for the year 321,944 6,068 55,124 89,598 472,734 Disposal (121,107) - - (9,790) (130,897) At 31 March 2015 978,354 57,925 184,482 263,775 1,484,536 Charge for the year 252,403 9,696 51,934 48,981 363,014 Disposals (360,898) - - - (360,898) At 31 March 2016 869,859 67,621 236,416 312,756 1,486,652
Net book value At 31 March 2016 271,237 14,327 48,046 88,343 421,953 At 31 March 2015 328,749 21,272 91,651 74,201 515,873
19.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 2016 2015 ZMW ZMW 10. Short term deposit Standard Chartered Bank PLC 2,250,000 2,160,000 Barclays Bank PLC 4,000,000 - 6,250,000 2,160,000 11. Investments
Madison – Gratuity Investment Fund At the beginning of the year 578,157 716,660 Purchased during the year - 727,838 Interest accrued - 129,530 Redeemed during the year (578,157) (995,871) At the end of the year - 578,157 The Fund was held with Madison Asset Management Company’s Collective Investment Scheme – Gratuity Fund. In the opinion of the directors, the value of the above investment was not less than the carrying amounts at which it has been included in the financial statements.
2016 2015 ZMW ZMW 12. Trade and other receivables GRZ Grant 805,668 805,668 Trade commissions - 68,090 Issuers fees 732,173 631,995 Inspection fees - 61,452 Sundry debtors 10,030 22,000 Accrued income – interest 472,889 92,513 Prepayments and deposits 1,295,798 770,608 3,316,558 2,452,326 Staff debtors 17,073 51,772 Provisions for doubtful debts (128,757) - 3,204,874 2,504,098 13. Cash and cash equivalents
Cash in hand and at bank 3,031,684 7,497,128
14. Finance Lease obligations 2016 2015 ZMW ZMW a) Summary
At 1 April 152,695 618,504 Payments made during the year (152,695) (465,809) At 31 March - 152,695 (b) Lessors Barclays Bank Zambia PLC - 152,695 - 152,695 (c) The amounts are due as follows: Due within one year - 128,123 Due after one year - 24,572 - 152,695
(i) The payments on the leases in the year under review related to a Cavmont Bank Limited lease
that was obtained in 2012 and ran from 7 February 2012 to 30 January 2015.
20.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED)
14. Finance Lease obligations (continued)
(ii) The other payment on the leases related to a Barclays Bank Zambia PLC lease which ran from 13 February 2013 for a maximum financing period of 36 months.
2016 2015 ZMW ZMW 15. Trade and other payables Provisions and accruals 1,934,557 2,746,943 Market Development Fund 801,231 3,120,000 Amount due to Compensation Fund 37,478 98,176 Due to Zambia Revenue Authority 635,076 563,732 3,408,342 6,528,851 16. Financial assets and liabilities
Financial assets The Commission’s principal financial assets are investments, prepayments, bank balances and cash. The Commission maintains its bank accounts with major banks in Zambia of high credit standing. Prepayments are stated at their nominal value reduced by appropriate allowances for estimated irrecoverable amounts.
Financial liabilities
The Commission’s financial liabilities are creditors and accruals. Financial liabilities are classified according to the substance of the contractual arrangements entered into, and are stated at their nominal value.
(a) Credit risk Credit risk is the risk of financial loss to the Commission if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from trade receivables and other receivables.
In order to manage this risk the Commission has a defined credit policy which is documented and forms the basis of all credit decisions. The Commission also makes allowance for impairment against non-performing accounts, where recovery is doubtful. The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: -
Classes of financial assets Carrying amount 31 March 31 March
2016 2015 ZMW ZMW
Short term deposits 6,250,000 2,160,000 Investments - 578,157 Trade and other receivables 3,204,874 2,504,098 Cash and cash equivalents 3,031,684 7,497,128
12,486,558 12,739,383
21.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 16. Financial assets and liabilities (continued)
(a) Credit risk (continued)
The credit risk for cash and cash equivalents and short term deposits is considered negligible, since the counterparts are reputable banks with high quality external credit ratings. The credit risk for investments is considered to be low, since the Fund Manager is a reputable group. In respect of trade and other receivables, the Commission is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. Based on historical information about default rates, management considers the credit quality of trade receivables that are not past due or impaired to be good. The aged analysis of trade receivables which were not impaired at the reporting date are as follows:- 31 March 31 March 2016 2015 ZMW ZMW Days 0 – 30 101,496 68,090 31 – 60 129,621 -
61 – 90 173,077 693,446 Over 90 327,979 - 732,173 761,536
(b) Interest rate risk The Commission is exposed to interest rate risk to the extent of the balance of any loans and other borrowings taken and outstanding. During the period under review, the commission was not subject to any interest rate risks has it had no any loans, and other borrowings taken and outstanding (2015: +/- 1%). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant. Profit for the year Equity
+1% -1% +1% -1% ZMW ZMW ZMW ZMW 31 March 2016 - - - - 31 March 2015 4,255 (4,255) 4,255 (4,255)
22.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 16. Financial assets and liabilities (continued)
(c) Liquidity risk
Liquidity risk is the risk that the Commission will be unable to meet its obligations as they fall due. The contractual maturities of financial liabilities as at 31 March 2016 is summarised below: At 31 March 2016: Within Within 6 to 12 1 to 5 6 months months years ZMW ZMW ZMW Non-derivative Financial liabilities Finance lease obligations - - - Trade and other payables 2,367,460 1,040,882 - Total 2,367,460 1,040,882 -
At 31 March 2015: Within Within 6 to 12 1 to 5 6 months months years ZMW ZMW ZMW Non-derivative Financial liabilities Finance lease obligations 74,938 74,938 36,656 Trade and other payables 4,898,810 1,630,041 - Total 4,973,748 1,704,979 36,656 The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities at the reporting date.
(d) Cash flow risk
In the opinion of the directors, the risk that future cash flows may not be sufficient to meet its working capital requirements is medium.
(e) Fair value
The carrying amounts of financial assets and liabilities are representative of the Commission’s position as of 31 March 2016 and are in the opinion of the directors not significantly different from their respective fair values due to generally short periods to maturity dates.
Interest-bearing loans and borrowings Fair value is calculated based on expected future principal and interest cash flows.
Trade and other receivables/payables For receivables/payables the carrying amount is deemed to reflect the fair value.
57
23.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED)
16. Financial assets and liabilities (continued)
(f) Categories of financial instruments At 31 March 2016
Fair Receivable value ZMW ZMW
Financial assets Receivables 3,204,874 3,204,874 Short term deposit 6,250,000 6,250,000 Cash and cash equivalents 3,031,684 3,031,684 Total financial assets 12,486,558 12,486,558 Financial
Liabilities at amortised Fair Cost value ZMW ZMW
Financial liabilities Trade payables 3,408,342 3,408,342 Total financial liabilities 3,408,342 3,408,342 Net position 8,923,216 8,923,216
At 31 March 2015
Loans and Fair receivables value Financial assets
Receivables 761,537 761,537 Other receivables 1,742,561 1,742,561 Short Term Deposits 2,160,000 2,160,000 Cash and cash equivalents 7,497,128 7,497,128 Investments 578,157 578,157 Total financial assets 12,739,383 12,739,383 Financial
Liabilities at amortised Fair Cost value ZMW ZMW
Financial liabilities Trade payables 2,840,731 2,840,731 Other payables 3,688,120 3,688,120 Finance lease obligations 152,695 152,695 Total financial liabilities 6,681,546 6,681,546
Net position 6,057,837 6,057,837
58
24.
SECURITIES AND EXCHANGE COMMISSION
NOTES TO THE FINANCIAL STATEMENTS - 31 MARCH 2016 (CONTINUED) 17. Related party transactions
The following transactions were carried out with related parties: 2016 2015
ZMW ZMW (i) Key management compensation Salaries and other short term benefits 2,878,474 2,040,615 Defined contribution pension schemes 29,093 38,218 2,907,567 2,078,833 (ii) Commissioners’ remuneration Fees for service as Commissioners 1,093,624 1,122,615
(iii) Loans to key management - 12,204
18. Capital commitments
There were no capital commitments either contracted or authorised at 31 March 2016 (2015 – ZMW nil).
19. Contingent liabilities The Commission has engaged a legal Counsel to represent it in a litigation against the Commission. The Counsel estimate legal fees of ZMW155,000, which are yet to be agreed with the Commission. This amount has not been provided in these financial statements.
20. Events subsequent to the reporting date
There has not arisen since the end of the financial year any item, transaction or event of a material and unusual nature likely, in the opinion of the Commissioners , to affect substantially the operations of the Commission, the results of those operations or the financial position of the Commission.
59
SCHEDULE
SECURITIES AND EXCHANGE COMMISSION
DETAILED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2016
2016 2015 ZMW ZMW INCOME
Grants Revenue grants 9,668,004 9,668,004 Fees and other income Authorisation fees 311,114 388,582 Commission – LuSE trades 1,173,518 2,728,069 Licensing fees 1,410,674 966,870 Registration fees 2,407,500 4,541,996 Scrutiny fees 288,891 166,667 Sundry income 9,887 46,447 Interest received 613,463 - Issuers fees 515,916 586,661 Investment income 380,375 273,956 Inspection fees 124,363 90,468 Annual fees 115,451 37,273 Levy on Collective Investment Schemes (CIS) 326,427 177,247 Interest staff loans 1,633 - 7,679,212 10,004,236 Total income 17,347,216 19,672,240
EXPENDITURE Advertising expenses 181,998 132,099 Audit fees 84,370 155,968 Bank charges 51,097 28,820 Board and committee expenses 1,093,624 1,122,615 Consultancy fees 404,360 193,504 Depreciation 363,015 472,733 Employee benefits costs 7,424,317 7,500,326 Entertainment 11,912 2,055 Finance charges 39,363 57,368 Insurance 506,607 489,589 Motor vehicle expenses 228,387 249,363 Office operational costs 227,340 161,406 Postage and telephones 298,490 204,810 Electricity and water 57,555 10,613 Printing and stationary 185,889 145,859 Publicity and Education 581,864 600,126 Bad debts provision 128,757 - Rent 954,312 626,103 Repairs and maintenance 68,304 22,911 Security 97,232 54,420 Subscriptions and publications 344,427 193,505 Workshops and seminars 1,087,537 698,749 14,420,757 13,174,163 Surplus for the year 2,926,459 6,498,077
60
APPENDICES
List of licensees in 2015 -2016
The Capital Markets Sector has been gaining momentum based on the number of applications for licences
received in 2016.
However, the Commission continued in its role of ensuring that only fit and proper persons and entities were
allowed to offer securities services to the investing public. The following entities were duly authorised to
conduct securities business in the categories shown below:
Collective Investment Schemes
The following collective investment schemes were operational during the period under review:
Item
Company Name
2016 2015
Yes No Yes No
1 Mukuyu Growth Fund √ √
2 ABC Unit Trust √ √
3 Equity Capital Resources Unit
Trust
√ √
4 Intermarket Unit Trust √ √
5 JM Busha Capital Unit Trusts √
6 Kukula Capital Fund √ √
7 Laurence Paul Unit Trust √ √
8 Madison Unit Trust √ √
9 Mpile Unit Trust √ √
Fund Managers
The following were the Fund Managers during the period under review;
Item
Company Name
2016 2015
Yes No Yes No
1 AoN Pension Fund
Administrators Limited
√ √
2 ABC Investment Services
Limited
√ √
3 Equity Capital Resources Plc √ √
4 Kukula Capital Plc √ √
5 Laurence Paul Investment
Services
√
6 African Life Financial Services
Limited
√ √
61
Dealer’s License
The following corporate entities held this license during the period under review:
62
Item
Company Name
2016 2015
Yes No Yes No
1. Aflife Capital Zambia
Limited
√ √
2. Aflife Holdings
Zambia Limited
√ √
3. African Alliance
Securities Limited
√ √
4. ABC Investment
Services Limited
√ √
5. ABC Zambia Limited √ √
6. African Life Financial
Services
√ √
7. AON Zambia Pension
Funds Administrators
Limited
√ √
8. Barclays Bank Plc √ √
9 Citibank Zambia
Limited
√ √
10. Credit Rating Agency
(Z) Limited
√ √
11. Equity Capital
Resources Plc.
√ √
12. Finance Bank Zambia
Limited
√ √
13. Finance Securities
Limited
√ √
14. First National Bank
Zambia Limited
√ √
15. Focus Financial
Services Limited
√ √
16. Grofin Zambia
Limited
√ √
17. Intermarket Securities
(Z) Limited
√ √
18. Investrust Bank Plc √ √
19. Kukula Capital Plc √ √
20. Laurence Paul
Investment Services
Ltd
√ √
21. Madison Asset
Management
Company Ltd
√ √
22. Pangaea Renaissance
Securities Ltd
√ √
63
Dealer’s Representative Licenses
The following persons held this license during the period under review:
Item
Company Name
2016 2015
Yes No Yes No
1. Mukudzei-Ishe Zhou- Aflife
Capital
√ √
2. Anura Jayanath Karunaratne-
Aflife Holdings
√ √
3. Fortunate Ngatsha-Aflife
Holdings
√ √
4. Fumanikile Bbuku- African
Alliance Securities Limited
√ √
5. Joseph Simate-African Alliance
Securities Limited
√ √
6. Sherry Mary-Anne Thole -
African Alliance Securities
Limited
√ √
7. Danny Mulenga - African
Banking Corporation Investment
Services Limited
√ √
8. Miyanda H Hamusankwa-
African Banking Investments
Services Limited
√ √
9. Tontela Siwale-African Banking
Corporation Investments
Services
√ √
23. Professional Life
Assurance Limited
√ √
24. Stanbic Bank (Z)
Limited
√ √
25. Standard Chartered
Bank (Z) Limited
√ √
26. Stockbrokers Zambia
Limited
√ √
27. Zambia National
Commercial Bank Plc.
√ √
64
10. Christopher K Mwelo-African
Banking Corporation (Z)
Limited
√ √
11. Theresa Chiluba – African
Banking Corporation Limited
√ √
12. Geoffrey Musekiwa-African Life
Financial Services Limited
√ √
13. Jones Phiri-African Life
Financial Services Limited
√ √
14. Muuka Mukongolwa Banda-
African Life Financial Services
Limited
√ √
15. Pethel Chambwe Phiri-African
Life Financial Services Limited
√ √
16. Sarudzai Peter Banda-African
Life Financial Services Limited
√ √
17. Munyumba Mutwale- AON
Zambia Pension Fund
Administrators Limited
√ √
18. Maron Mwangala –AON
Zambia Pension Fund
Administrators Limited
√ √
19. Boston Nkuname – Barclays
Bank Zambia
√ √
20. Lesa Mulenga – Barclays Bank
Zambia
√ √
21. Mark Penyani Katemangwe –
Barclays Bank Zambia
√ √
22. Tiyezyeko Chilembo – Barclays
Bank Zambia
√ √
23. Carmen K. Hachani – Citibank
Zambia Limited
√ √
24. Geofrey Mchangila – Citibank
Zambia Limited
25. Ngosa Mary Kafwembe –
Citibank Zambia Limited
√ √
26. Obert Kamuwanga Limbani –
Citibank Zambia Limited
√ √
27. Steven Chitete- Citibank Zambia
Limited
√ √
28. Cornwell Fungai Musana –
Equity Capital Resource Plc
√ √
29. Peter Mutale Kang’ombe –
Equity Capital Resources Plc.
√ √
30. Sabera Khan –Eqiuty Capital
Resources Plc
√ √
31. Chilemba Zulu-Finance Bank
Zambia Plc
√ √
65
32. Mungala Chiboola Matongo-
Finance Bank Zambia Plc
√ √
33. Tushar Thaker – Finance
Securities Limited
√ √
34. Gerald Ndhlovu – First National
Bank
√ √
35. Kapumpe Chola Kaunda-First
National Bank
√ √
36. Llewellyn Foxcroft –First
National Bank
√ √
37. Naomi Hara Palale – First
National Bank
√ √
38. George Mubipe - Focus
Financial Services
√ √
39. Chibamba Kizito Lopa - Grofin
Zambia Limited
√ √
40. Enerst Kando-Grofin Zambia
Limited
√ √
41. Robinson Daka – Grofin Zambia
Limited
√ √
42. Busiwa N. Kayira -Intermarket
Securities Limited
√ √
43. Joseph S Mazila-Intermarket
Securities
√ √
44. Misento Zibbowah-Intermarket
Securities
√ √
45. Harry Mafuta - Investrust Bank
Plc Limited
√ √
46. Richard Mutukwa -Investrust
Bank Plc Limited
√ √
47. Jito Kayumba - Kukula Capital
Limited
√ √
48. Tue Nyboe Andersen-Kukula
Capital Limited
√ √
49. Aaron Yobe Zulu – Lawrence
Paul Investment Services
Limited
√ √
50. Brian Chintu – Madison Asset
Management Co. Limited
√ √
51. Cecilia Kamba Siabusu-Madison
Asset Management
√ √
52. Claire M Lungwe - Madison
Asset Management Co.
√ √
53. Muchindu Kasongolo-Madison
Asset Management Company
Ltd
√ √
66
54. Sipiwe Nkunika - Madison Asset
Management Company Limited
√ √
55. Chenge B. Mwenechanya-
Pangaea Securities Limited
√ √
56.. Derek John Haake- Pangaea
Securities Limited
√ √
57. Ceaser Siwale – Pangaea
Securities Limited
√ √
58. Tidale Mwale-Chisunka -
Pangaea Securities Limited
√ √
59. Wendy Nsamwa NglazeTembo –
Pangaea Securities Limited.
√ √
60. Matete M. Sichizya –
Professional Life Assurance Ltd
√ √
61. Prabhleen Kohli – Professional
Life Assurance Limited
√ √
62. Moses Nkumbu Simbeye –
Stanbic Bank (Z) Ltd
√ √
63. Mwila Pascal Mwenya – Stanbic
Bank (Z) Ltd
√ √
64. Tamara Bbuku – Stanbic Bank
(Z) Limited
√ √
65. Aaron Phiri- Standard Chartered
Bank (Z) Plc
√ √
66. Chimuka Muyovwe- Standard
Chartered Bank (Z) Plc
√ √
67. Davy Nanduba- Standard
Chartered Bank (Z) Plc
√ √
68. Derek Bobo- Standard Chartered
Bank (Z) Plc
√ √
69. Donna Forte-Regis Muleba-
Standard Chartered Bank (Z) Plc
√ √
70.
Florence Mkalipi Nyangu-
Standard Chartered Bank (Z) Plc
√ √
71. John Keyala-Standard Chartered
Bank (Z) Plc
√ √
72. Kabwe Mwaba-Standard
Chartered Bank (Z) Plc
√ √
73. Kalizya W. Zimba-Standard
Chartered Bank (Z) Plc
√ √
74. Mubanga Yvonne Mukuka-
Standard Chartered Bank (Z) Plc
√ √
75. Muchindu Lombe – Standard
Chartered Bank Plc
√ √
67
76. Mulolwa Nkata Kamana-
Standard Chartered Bank (Z) Plc
√ √
77. Mwaka Kalengo Mfula-
Standard Chartered Bank (Z) Plc
√ √
78. Mwali Chisala – Standard
Chartered Bank Plc
√ √
79. Nana Mukwiza - Standard
Chartered Bank Plc
√ √
80. Nicholas Chikumo – Standard
Chartered Bank Plc
√ √
81. Peter L Mwanza – Standard
Chartered Bank Plc
√ √
82. Stanley Kaweme Tamele –
Standard Chartered Bank Plc
√ √
83. Tsugai Mabuto – Standard
Chartered Bank Plc
√ √
84. Wiggins Mupango-Standard
Chartered Bank (Z) Plc
√ √
85. Chanda Mutoni –Stockbrokers
Zambia Limited
√ √
86. Jimmy Mwambazi -
Stockbrokers Zambia Limited
√ √
87. Kamungoma Mate -
Stockbrokers Zambia Limited
√ √
88. Austin Hamukonka Chijikwa-
Zambia National Commercial
Bank
√ √
89. Charity Choombe-Zambia
National Commercial Bank
√ √
90. Charles Kamungu-Zambia
National Commercial Bank
√ √
91. Cliff George Sakala-Zambia
National Commercial Bank
√ √
92. Fredrick Mulenga Kaputo-
Zambia National Commercial
Bank
√ √
93. Ignatius Innocent Kashoka-
Zambia National Commercial
Bank
√ √
94. Kunda Catherine Chikumbi-
Zambia National Commercial
Bank
√ √
68
95. Lishala Clarence Situmbeko-
Zambia National Commercial
Bank
√ √
96. Virginia Mwalilino-Zambia
National Commercial Bank
√ √
97. Suzyo M. Ng’andu – Zambia
National Commercial Bank
√ √
Investment Adviser’s License
The following corporate entities held this license during the period under review:
Item
Company
2016 2015
Yes
No
Yes
No
1. Allied Securities and Asset
Management Limited
√ √
2. Benefits Consulting
Services Limited
√ √
3. Charles Sichangwe √ √
4. DeVere and Partners
Investment Services (Z)
Limited
√ √
5. Entrust Financial Services
Limited
√ √
6. Imara ECR Asset
Management Limited
√ √
7. Riscura Limited √ √
Investment Adviser’s Representative License
The following persons held this license during the period under review:
Item
Company Name
2016 2015
Yes No Yes No
1. Victor P M Sondala-Allied
Securities and Asset Management
Limited
√ √
2. Collina Beena Hasalama
Halwampa – Benefits Consulting
Services Limited
√ √
3. Kandiye Theresa Liweleya –
Benefits Consulting Services
√ √
4. Gift Kapande - deVere and
Partners International Limited
√ √
5. Julian Visser - deVere and
Partners International Limited
√ √
69
6. Kabwe Chishimba Chikolwa-
deVere and Partners International
Limited
√ √
7. Lerato Siame- deVere and
Partners International Limited
√ √
8. Lynda Syamunyangwa- deVere
and Partners International Limited
√ √
9. Maureen Nabulyato – deVere and
Partners International (Z) Limited
√ √
10. Muma Ng’ambi – deVere and
Partners International (Z) Limited
√ √
11. Musenge Kataya – deVere and
Partners International (Z) Limited
√ √
12. Phillip Authur Matias – deVere
and Partners International (Z)
Limited
√ √
13. Stella Nkole Sata – deVere and
Partners International (Z) Limited
√ √
14. Chisala Mulemba – Entrust
Financial Services Limited
√ √
15. David Brown – Entrust Financial
Services Limited
√ √
16. Nathan De Assis – Imara ECR
Asset Management Limited
√ √
17. Charity Siwale – Riscura Zambia
Limited
√ √
18. Cindy Waheeb Taudrous - Riscura
Zambia Limited
√ √
Securities Exchange Licenses
The following exchanges were operational during the period under review:
Item
Company Name
2016 2015
Yes No Yes No
1. Lusaka Stock Exchange Limited √ √
2. Bonds and Derivatives Exchange
of Zambia Limited
√ √
70
The SEC Staff, Past and Current Staff
Mr Phillip K. Chitalu Secretary and Chief
Executive
Ms Mutumboi Mundia Director - Market
Supervision and
Development
Mrs Diana Sichone Director – Enforcement
and Legal Services
Mr Bruce Mulenga Market Transactions and
Investments
Mr Mateyo Lungu
Manager – Finance
Appointed on 28th December,
2015
Mr Mayford Chikoya Manager – Finance
Mr Glory Chipoya Manager – Enforcement
and Legal Services
Appointed on 12th October,
2015
Mr Saul Nyalugwe Manager – Administration
Mr Abraham Alutuli Manager –Market
Supervision
Mr Nonde Sichilima Manager – Market
Supervision
Appointed on 18th September,
2015
Mrs Dingase Makumba Manager – Market
Development
Mrs Emily Moseni
Mangwela
Executive Assistant to the
CEO
Left on 27th January, 2016
Mrs Sitali Mugala Surveillance Officer
Ms Racheal M Banda
Human Resource Officer
Appointed on 21st
September, 2015
Ms Priscilla Mwale Personal Assistant to the
CEO
Ms. Leah Kusensela Accounts Assistant
Ms Yvonne Mpumpo Secretary- Market
Transactions and
Investments
Mrs Glendajoelinda C
Ng’andwe
Secretary – Market
Supervision and
Development
Mr Saviour Mooya Driver
Mr Alexander Tondo Office Assistant
71
Stock Exchange Details
LuSE Details
Chief Executive Officer: Mr. Brian Tembo
Address (physical): Lusaka Stock Exchange Limited
2nd floor, Mamco House
Plot 316B, Independence Avenue
Address (postal): P.O. Box 34523
Lusaka Main
Lusaka
Telephone: +260 (211) 228391/228537
Facsimile: +260 (211) 225969
E-mail: [email protected]
BaDEX Details
Chief Executive Officer: Mr. Peter Sitamulaho
Address (physical): Bonds and Derivatives Exchange
Bond and Derivatives Exchange Zambia Plc
Plot No 7450, Katopola Road
Rhodespark, Off Great East Road
Address (postal): Post. Net Box 334
Private bag E10
Arcades
Lusaka
Telephone: +260 (211) 220537
Facsimile: +260 (211) 220574
E-mail: [email protected]
Dealers
a) Members of the LuSE
African Alliance Zambia Securities Limited
The Colosseum
Block A, Ground floor
Bwinjimfumu Road
Lusaka
P. O. Box 320308
Tel: +260 (211) 220460
Fax: +260 (211) 841033
Email:[email protected]
72
Equity Capital Resources Musheme Road
Lusaka Tel: +260 955 37 84 89
Email: [email protected]
Intermarket Securities limited Ground Floor, Farmers House Central park
P .O. Box 35832, Cairo Road
Lusaka Tel: +260 (211) 227227-8
Fax: +260 (211) 231334
Email: [email protected]
Madison Asset Management Company Ltd
MLife Building, Dar es Salaam Place
Cairo Road
P.O. Box 37013
Lusaka Tel: +260 (211) 233940/16
Fax: +260 (211) 233936
Email: [email protected]
Pangaea Renaissance Securities Ltd 3rd Floor, North Wing
Farmers House, Central Park
P.O. Box 30163, Cairo Road
Lusaka Tel: +260 (211) 220707
Fax: +260 (211) 220925
Email: [email protected]
Stockbrokers Zambia Limited 2nd Floor, Design House
P O Box 38956, Cairo Road
Lusaka Tel: +260 (211) 227303/232456
Fax: +260 (211) 224055
Email: [email protected]
73
b) Non–Members of the LuSE
ABC Investment Services Limited
Ground Floor, Pyramid Plaza
Corner Church and Nasser Roads
P.O. Box 39501
Lusaka
Tel: +260 (211) 257980
Fax: +260 (211) 257970-6
E-mail: [email protected]
Website: www.africanbankingcorp.com
African Life Financial Services
Independence Avenue
Mpile Office Park
Lusaka
P. O. Box 51331
Tel: +260 (211) 252265/253772
Fax: +260 (211 253112
E-mail: [email protected]
Aon Zambia Pension Fund Administrators Limited
Acacia Park
Plot 22768
Thabo Mbeki Road, Arcades
Lusaka
P. O. Box 35403
Tel: +260 (211) 367288
E-mail: [email protected]
Barclays Bank Zambia Plc
Elunda Office Park
Plot 4643 / 4644
Addis Ababa round about, Rhodespark
Lusaka
Private Bag E308
Tel: + (260) (211) 366150 / 169
Fax: + (260) (211) 225553
Quoted on 9th March, 2005
Citibank Zambia Limited
Head Office Building
Cha ChaCha Road-South End
Lusaka P. O. Box 30037
Tel: +260 (211) 229025/28
Fax: +260 (211) 226064
74
Credit Rating Agency
Suite 5, Third Floor
Farmers House, Central Park
Lusaka P.O. Box 320445
Telephone: +260 0977 365094
Email: [email protected]
Website: www.creditratingagency.net
Focus Financial Services Limited
1st floor, Building 3
Acacia Park
Thabo Mbeki Road
Lusaka
P. O. Box 345536
Tel: +260 (211) 291310-14
Fax: +260 (211) 291311
Website: www.focus.co.zm
Grofin Zambia Limited
Plot 3827 Parliament Road
Olympia
Lusaka
P.O.Box 33758
Tel: +260 211 295875/6
Fax: +260 211 295876
Generic email: [email protected]
Investrust Bank Plc
Investrust House
Plot 4527/8 Freedom Way
Lusaka P O Box 32344
Tel: (0211) 238733-5
E-mail: [email protected]
Kukula Capital Plc Office 101
1st floor Foxdale Court Office Park
Plot 609 Zambezi Road,
Roma,
Lusaka
Tel: +260 211 295792
Email: [email protected]
75
Lawrence Paul Investment Services Limited
5th Floor, Design House
Dar es Salaam Place (off Cairo Road)
P O Box 35008
Lusaka
Tel: (0211) 220302/3
Fax: (0211) 220454
E-mail: [email protected]
Website: www.laurencepaul.com
Professional Life Assurance Limited
Professional Life Assurance
Finsbury Park
Kabwe Round About
Lusaka
Stanbic Bank Zambia Limited
Stanbic House
Head Office
Plot 2375, Addis Ababa Drive
Lusaka
P. O. Box 31955
Tel: +260 (211) 370000 - 18
Fax: +260 (211 258439
Standard Chartered Bank Zambia Plc
Standard Chartered House
Cairo Road-South End
P O Box 31934
Lusaka Tel: (0211) 229242/229260/229772
Fax: (0211) 222092/225337
E-mail: [email protected]
Website: www.standardchartered.com/zm
Zambia National Commercial Bank Plc
Head Office Building
Cairo Road-South End
P O Box 33611
Lusaka
Tel: + 260 (211) 228979/ 221355/ 221380/ 221404
Fax: + 260 (211) 223084
E-mail: [email protected]
76
Investment Advisors
Benefits Consulting Services Limited
Mpile Office Park
74 Independence Avenue
Lusaka
P. O. Box 31986
Tel: +260 (211) 254517/252265/250190
Fax: +260 (211) 251926
E-mail: [email protected]
Website: www.bencon.co.zm
Charles Sichangwe
Wits Limited
4th Floor, Godfrey House,
Kabelenga Road
Lusaka
Tel: +260 (211) 226441/5
Fax: +260 (211) 227116
Email: [email protected]
deVere and Partners Investment Services Zambia Limited
Plot 3827 Parliament Road
Olympia
Lusaka
Tel: +260 211 295999
Fax: 260 211 257114
Email: [email protected]
Website: www.devere-group.com
Entrust Financial Services Limited Alstone Cottage
Plot 377a/6a
Bishops Road, Kabulonga
Lusaka P. O. Box 31252
Tel: +260 (211) 260260/260800
Fax: +260 (211) 266399
Email: [email protected]
Website: www.holbornservices.com
Imara ECR Asset Management Limited
12 Mushemi Road off Lubu Road
Rhodespark
Lusaka
P. O. Box 37184
Tel: +260 (211) 840313
77
Email: [email protected]
Website: www.imara.com
Profin Limited
17 Matandani Road
Rhodespark
Lusaka
P.O.Box 31425
Tel: +260 (211) 257913
Fax: +260 (211) 254360
Email: [email protected]: theprofingroup.com
Riscura Zambia Limited Figtree house Plot No. 1
Warthog Road, Kabulonga
Lusaka
P.O.Box 320181, LusakaTel: +260 (211) 262 773
Fax: +260 (211) 262 773Email: [email protected]
Website:www.risura.com
Listed Companies
African Explosives Limited (AEL) Zambia Plc
Plot 1168/M
Kitwe-Mufulira Road
P.O. Box 40092
Mufulira Tel: +260 (966) 990945-9
Fax: +260 (212) 412749
Website: www.ael.co.za
Listed on 23rdOctober, 2006
Airtel (formerly Celtel) Zambia Plc
Stand 2375
Addis Ababa drive
Lusaka Tel: +260 (977) 915000
Website: www.Africa.airtel.com/zambia
Listed on 11th June, 2008
78
Bata Shoe Company Plc
Stand 6437, Mukwa Road
Heavy Industrial Area
Lusaka
P.O. Box 30479
Tel: +260 (211) 244397/242328
Fax: +260 (211) 244254
E-mail: [email protected]
Website: www.bata.co.zm
Listed on 31st March, 2009
British American Tobacco (BAT) Zambia Plc Plot 20992, Kafue Road
Lusaka
P.O. Box 30162
Tel: +260 (211) 272264/272287
Fax: +260 (211) 272271
E-mail: [email protected]
Website: www.bat.com
Listed on 15th December, 1996
Cavmont Capital Holdings Zambia Plc Unit C, Counting House Square (behind Arcades Shopping Centre)
Thabo Mbeki Road
P O Box 32322
Lusaka
Tel: (0211) 257772/256055/256064
Fax: (0211) 256074
E-mail: [email protected]
Website: www.cavmont.com.zm
Listed on 13th September, 2006
Copperbelt Energy Corporation Plc 23rd Avenue, Nkana East
Kitwe
P.O. Box 20819
Tel: +260 (212) 244000/244281
Fax: +260 (212) 223445/244040
E-mail: [email protected]
Website: www.copperbeltenergy.com
Listed on 21st January, 2008
Investrust Bank Plc
(as indicated above under section titled “Dealers”)
Listed on 21st June, 2007
79
Lafarge Cement Plc Farm No. 1880
Kafue Road
Chilanga
P.O. Box 30162
Tel: +260 (211) 367400/600
Fax: +260 (211) 278134
E-mail: [email protected]
Website: www.lafarge.com
Listed on 22nd May, 1995
Madison Financial Services Plc
Plot 316 Independence Avenue
P.O.Box 37013
Lusaka
Tel:378700-5
Email: [email protected]
Website:www.madisonshares.com
Listed on 1st September 2014
Metal Fabricators of Zambia (ZAMEFA) Plc
Plot 1400 Cha ChaCha Road
Luanshya
P.O. Box 90295
Tel: +260 (212) 510599
Fax: +260 (212) 229003/4
Website: www.pdic.com
Listed on 9th September, 2004
National Breweries Plc
Plot 1609, ShekiSheki Road
Lusaka
P.O. Box 35135
Tel: +260 (211) 246553
Fax: +260 (211) 246326
Website: www.sabmiller.com
Listed on 16th March, 1998
Pamodzi Hotels Plc
Pamodzi Hotel Complex
Plot 463, Church Road
P.O. Box 35450
Lusaka
Tel: +260 (211) 254455/250995
Fax: +260 (211) 254005
E–mail: [email protected]
Website: www.tajhotels.com
Listed on December 21st, 2001
80
Prima Reinsurance Plc
Plot 187C Namamboli Road
Fairview
Lusaka
Postnet box 658
P/Bab E891
Tel: +260 (211) 221159
Email: [email protected]
Website: www.prima-re.com
Listed on 21st December, 2004
Puma Energy Plc
(formerly BP Zambia) Airtel House
Stand No. 2375, Addis Ababa Drive
Lusaka
P.O. Box 31999
Tel: +260 (211) 376100
Fax: +260 (211) 376149
E–mail: [email protected]
Website:www.pumaenergy.com
Listed on 18thJuly, 2002
Real Estate Investments Zambia Plc
(formerly Farmers House)
Farmers House, Central Park
Cairo Road
Lusaka
P.O. Box 30012
Tel: +260 (211) 227684-89
Fax: +260 (211) 222906
E-mail: [email protected]
Website: www.reiz.co.zm
Listed on 27th September, 1997
Shoprite Holdings Plc
Plot 19255 Cnr, Great East and Manchinchi Roads
Manda Hill Centre
Tel: +260 (211) 251155
Website: www.shopriteholdings.co.za
Listed on 19th February, 2003
Standard Chartered Bank Zambia Plc (as indicated above under section titled “Dealers”)
Listed on 30th November, 1998
81
Zambeef Products Plc
Plot 4970 Manda Road
Industrial Area
Lusaka
P/Bag 17, Woodlands
Tel: +260 (211) 369000
Fax: +260 (211) 369050
E-mail: [email protected]
Website: www.zambeefplc.com
Listed on 5th April 2005
Zambian Breweries Plc
Mungwi Road
Heavy Industrial Area
Lusaka
P.O. Box 30237
Tel: +260 (211) 246555
Fax: +260 (211) 242124
E-mail: [email protected]
Website: www.sabmiller.com
Listed on 9th June, 1997
Zambia National Commercial Bank Plc
(as indicated above under section titled “Dealers”)
Listed on 27thNovember, 2008
Zambia Sugar Plc
Nakambala Sugar Estate
Livingstone Road
P O Box 670240
Mazabuka
Tel: +260 (213) 231103/231106
Fax: +260(213) 230385
E-mail: [email protected]
Website : www.illovosugar.co.za
Listed on 28th August, 1996
ZCCM Investment Holdings Plc 1st Floor, Mukuba Pension House
Plot 5309, Dedan Kimathi Road
Lusaka
P O Box 30048
Tel: +260 (211) 220654/221023
Fax: +260 (211) 220449/221057
E-mail: [email protected]
Website: www.zccm-ih.com.zm
Listed on 24th January, 1996
82
Quoted Companies
Barclays Bank Zambia Plc
Head office (as indicated above under section titled “Dealers” Quoted on 9th March, 2005
Chambishi Metals Plc Sub–division L and M of Lot No. 10/M
Kitwe–Chingola Road
Chambishi
P.O. Box 21151 (Kitwe)
Tel: +260 (212) 744006/7
Fax: +260 (212) 744035
E-mail: [email protected]
Quoted on 25th January, 2000
Chibuluma Mines Plc Off South Downs Airport Road
Lufwanyama
P.O. Box 260499
Tel: +260 (212) 749 – 333/777/110
Fax: +260 (212) 749799/749299
Email: [email protected].
Website:www.metorexgroup.com
Quoted on 22nd December, 1999
Finance Bank Zambia Plc
Finance House, Cairo Road
P.O.Box37102, Lusaka, Zambia
Tel: +260 (211) 229733-42
Fax: +260 (211) 227544
Website:www.financebank.co.zm
Quoted on 13th January 2015
Kansanshi Mining Plc
Mine Site
Solwezi
P.O. Box 110835
Tel: +260 (212) 658000
Fax: +260 (212) 658300
Email: [email protected]
Website: www.first-quantum.com/our-business/operating-mines/kansanshi
Quoted on 29th June,1999 (as Cyprus Amax Kansanshi Plc)
83
Konkola Copper Mines Plc
Stand M/1408
Fern Avenue
Chingola
P/Bag KCM (c) 2000
Tel: +260 (211) 350604
Email: [email protected]
Website: www.kcm.co.zm
Mopani Copper Mines Plc
Corporate Office
Central Street Nkhana West
Kitwe
P.O. Box 22000
Tel: +260 (212) 247012/247847
Fax: +260 (212) 247445
Email: [email protected]
Website: www.mopani-copper-mines
Professional Life Plc
Finsbury park, Cairo road
Northend
Lusaka
P.O.Box 31357
Tel:+260 (211) 222223/4
Email:[email protected]
Website: www.picz.co.zm
Quoted on 9th December 2014
84
Companies with Listed Debt Securities
Bayport Financial Services
Plot 68
Independence Avenue
Lusaka
P.O. Box 33819
Tel: +260 (211) 257243
Fax:+260 (211) 257432
Debt securities listed on 24th April 2014
Focus Financial Services Limited
(as indicated above under section titled “Listed Companies”)
Debt securities listed on 24th April 2014
Investrust Bank Plc
(as indicated above under section titled “Dealers”)
Debt securities listed on 30th November 2009
Izwe Loans Zambia Limited
Plot No. 471 Shop 3A
Cairo Road
Lusaka
P. O .Box 35087
Tel: +260 (211) 235273
Debt securities listed on 15th July 2013 and 1st August 2013
Real Estate Investments Zambia Plc
(as indicated above under section titled “Listed Companies”)
Debt securities listed on 12th November 2010