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Zambia Bata Shoe Company Plc. Annual financial statements For the year ended 31 December 2016

Zambia Bata Shoe Company Plc. Annual financial statements Contents Page Chairman’s report 2 - 4 Report of the Directors 5 - 6 Directors’ responsibilities in respect of the preparation of financial statements 7 Statement of Corporate Governance 8 - 9 Independent auditor’s report 10 - 12 Statement of financial position 13 Statement of profit or loss and other comprehensive income 14 Statement of changes in equity 15 Statement of cash flows 16 Notes to the financial statements 17 – 53 Appendix I 54

Zambia Bata Shoe Company Plc.

Chairman’s report

Ladies and Gentlemen,

1 Introduction I am once again delighted to present my report to the 55th Annual General Meeting of our Company. Below are the highlights of the company’s performance for the year 2016.

HIGHLIGHTS 2016 2015 GROWTH Revenue 128,458,129 137,203,719 -6% Gross profit 57,273,346 61,589,643 -7% Profit before tax(PBT) 10,401,866 9,287,273 12% Proposed dividend per share 0.06 0.06 0%

Earnings per share 0.09 0.07 14%

2. Operating Environment

The Board would like to once again commend the Government of the Republic of Zambia for embracing viable economic policies and for creating an enabling and peaceful environment for doing business. We also commend the Government of the Republic of Zambia for conducting successful general elections in August 2016. We take cognisance of the fact that there have been numerous challenges to both global and regional economies and Zambia was not spared. Our Government so far has managed to put in place measures that we believe will assist businesses to sustain operations and eventually begin to see improvements though this will also depend on Major Global players. Your company performed quite well considering the business environment that prevailed especially in the first half of the year.

3. Performance

2016 was a difficult year for us as it was with many companies. This was due to a combination of factors. As we all know, we had a serious drought in the country and this affected our operations especially in all our rural stores. These stores normally make substantial contribution to our business. This coupled with the downward trend in business in the copper belt, made our situation much more difficult. The majority of our Lusaka stores however performed quite well and managed to cover those stores in other districts whose performance was below both their targets and previous year. Generally, business was better in the first half of the year as compared to the second half. This despite our January and May back to school period which are normally good business periods. The second half showed slow business in August and September, but started to improve from October right through to December. This was mainly due to having a good shoe line collection for the festive season and also due to early rains which is quite a big relief to the devastating drought that we were facing. We also had good sales in our Rain Master Gumboots from October right through to December and this was mainly due to the good rains during this period. We also had a good back to school period as parents started to buy school shoes for their children in December in preparation for the 2017 school calendar. This trend continued right through the January Back to school and at the moment we expect 2017 to be a good year as compared to 2016. Due to these difficult trading conditions outlined above, your company managed to achieve the following results in the 2016 year; Turnover achieved was K128, 458,129, which is 94% of K137, 203,719 achieved in the previous year. Profit before Tax was K 10,401,866 which is 112% of K 9,287,273 achieved in 2015. We opened a new store at the new Cosmopolitan Mall in the first half of 2016 and we expect the shopping mall to start attracting the shopping public in greater numbers this year as the mall establishes itself and this should also see our new store

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Zambia Bata Shoe Company Plc

Chairman’s report (continued) doing good business. We have also re-opened our store at East Park Shopping Mall to cater for our customers in that part of the City and also remain covered in these Malls so that our customers who buy from these Malls will be able to buy their favourite Bata shoes at their convenience. We are positive that this year should be a good year.

Merchandising

Our merchandising Department as usual did many exciting changes to our shoe line range so as to ensure that we cater to various tastes in all our stores. We are a family Shoe chain of stores and our product range has been completely overhauled to keep up with international trends with a local touch. We have introduced many new product ranges in our shoe line across the board and many of our customers have expressed great satisfaction with our shoe line. We will continue to upgrade our range with new exciting trendy styles especially for our fashion conscious young customers. We have also continued to offer good rewards for our Bata loyalty customers in the form of generous discounts and will offer even more rewards in this coming year. At the end of December 2016, we had over 120,000 members registered with us through this program and we are looking to have 500.000 members by the end of 2017. We continue to fine tune our marketing activities by engaging our customers through both the traditional marketing channels and also the social media which is now an integral part of communicating with our new generation. A completely new Marketing strategy and an overhauling of our Retail approach has been put in place with a complete revolution in new ladies shoe line. This will be launched later this year and should really see all our ladies coming to purchase their fashion shoes from Bata. We are very confident that we have come up with a winning fashion shoe range that will catch the imagination of all our ladies.

Staff Training

Training remains the cornerstone of our success. All our new employees are given the necessary induction training to prepare them for their new roles. This is done irrespective of the position. We have specific training for all our sales staff in terms of customer service and also impart product knowledge to them. We utilise our training school at our Head Office in Lusaka. In addition we have our regional training academy in Nairobi Kenya situated at Bata Kenya Head Office. These courses are conducted by international experts in their various fields in Marketing, Accounting, Production, Retailing and various other fields. In 2016, our merchandising and collection managers attended these meetings in Kenya, China and Italy and we will be seeing the benefits as we move ahead and start implementing various ideas gained in these interactions and training.

4. Dividends

Taking into account all the measures that we have to take to strengthen the company and also looking ahead, the company still needs to have strong financial resources especially in the area of store renovations, opening of new stores and revamping of our IT Department which has lagged behind in acquiring of new technology. I am pleased however to inform you that your Board of Directors has recommended a dividend of K0.06 on each ordinary share (K0.06 in 2015) held as at close of business on 21st April 2017 being the record date.

5. Outlook for 2017 Going forward, we are now quite optimistic that our country has now turned the corner. After the general elections that were held in August last year the situation has now changed for the better. We now have a new Government that will be in office for the next five years and there is general confidence in the business community. One can see that since the elections, the

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Zambia Bata Shoe Company Plc

Chairman’s report (continued) Kwacha has now stabilised as compared to the volatility that we had in both 2015 and 2016. As business we are now able to plan without the disruptions of the unstable currency that we faced in the last year. The drought that we had in the 2015 and 2016 farming season caused a lot of hardships in the country and customers faced financial hardships to maintain their families especially coupled with the economy which became stagnant due also to deteriorating copper prices on the international markets. There was very little disposable cash and people had to care for the basic needs before they could think of any new purchases. The Copper Belt province as we all know was very much affected by this down turn in copper prices and some mines actually started downsizing their workforce. We had also the load shedding due to lack of water in our major dams and rivers for generation of power. Our manufacturing had to run on generators and this increased our input costs reducing our margins as we could not afford to increase our products since most of our customers could not afford such price increases. Every business was forced to take very difficult decisions to cut costs and maximise existing resources in order to continue to be viable. Your Company was forced by these circumstances to take similar actions in order to remain viable. Today we remain in a strong position to take advantage of the country’s changing fortunes and we are very confident that 2017 should see us covering lost ground of the past two years. Looking forward, we can all see that this year we have an above normal rainy season and all indications are that we should have a good harvest. Apart from those areas that were affected by the Army Worm, every indication is that this will be a good agricultural year. This will be good for customers in the rural stores who should be able to have a good harvest which result in them having disposable cash. It is also encouraging to see the copper prices starting to increase to reasonable levels. This should have a positive effect in the copper belt which is one of our main trading area. Generally, with the new Government in place, and taking into account all the other positive factors in the economy; we see the future looking bright for your company. We are therefore confident that this year barring, any unforeseen adverse conditions, the Company should do well.

6. Conclusion

In conclusion, I would like to pay tribute to all employees of the Company for putting in such hard work and sacrifice especially considering the difficult conditions we had to face this year and to achieve these results. I would also like to thank fellow members of the Board and the Bata International Group for their technical support. ______________________ Chairman

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Zambia Bata Shoe Company Plc. Report of the Directors For the year ended 31 December 2016 Share Capital During the year 2016, the authorised and issued share capital of the company remained at 78, 000,000 and 76,107,600 respectively shares at K0.01 each.

Activities The principal business of Zambia Bata Shoe Company Plc. is the manufacture and trading in footwear and other leather and plastic products.

Results The year 2016 was quite difficult for many companies and your Company was no exception. The economic conditions remained very difficult during the entire year except in the last quarter when we started seeing some improvements. But this was very late to positively change the year’s results. Notwithstanding these difficult economic conditions, the Company managed to achieve the following results; Turnover in 2016 was K 128,458,129 which represented 94% of the previous year turnover of K 137,203,719. Profit before tax in 2016 was K 10,401,866 and this represented 112% of the previous year figure of K 9,287,273. The source of this information is the statement of profit and loss and other comprehensive income in the audited financial statements for 2016. Directors The Directors for the year 2016 were Messer’s Ronjoy Sengupta, George Sokota, Charles Mate, Prosper Bachi and John Murathe. All the Directors, having retired in accordance with the Company`s Articles of Association have offered themselves for re-election except for Mr. George Sokota who is not seeking re-election and Ronjoy Sengupta who has resigned from the board in December 2016 and in his place the main shareholder is proposing Mr. Alberto Errico who will also be chairman of the Board. Directors’ Interest in Ordinary Shares There are two directors out of five who have an interest in the shares of the Company. Mr C. Mate is associated with Hilda’s Hens Family Trust that holds 6,126,000 shares and G. Sokota holds 1,957,843 ordinary shares of the Company through D. G. Partners. There is no right to subscribe for equity or debt securities which has been granted to any Director. Employees The average number of employees employed by the Company during the year was 94 and 95 for the year 2015. The total amount paid to the employees during the period under review (in the form of salaries, wages, housing, allowances and provision for benefits) was K9 million against K8 million paid in 2015. Health, Safety and Welfare Our Company has strict rules with regards to Environmental Health and Safety (EH&S). The Company is a member of the Bata Shoe Organisation which has very elaborate and clear guidelines when it comes to looking after our environment and the safety of all our employees. The company conducts a comprehensive risk assessment of all environment issues including safety incidents that may occur on our site. We also have a Health and Safety Committee. Our safety committee works very closely with the Zambia Environmental Management Agency to ensure that we fully comply with all environmental regulations as amended from time to time. We also hold fire drills conducted by experts from the City`s Fire Department to ensure that in the event of fire every employee is aware of their duties and are also taught how to handle fire equipment. Basic first aid lessons are also conducted by our partners who are experts in the field and they also provide us with the basic first aid kits which are kept in our premises.

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Zambia Bata Shoe Company Report of the Directors (continued) For the year ended 31 December 2016 Company Social Responsibility The Company continues to play a positive role in alleviating some desperate cases of those in need in our society. To this effect, 2016 was no exception. The company organised a trip to the Koinonia Mutunzi Community School, which was identified as requiring some assistance. The Company donated 100 pairs of school shoes and also awarded the best pupils with school bags in addition to the school shoes. Your Company will continue to give assistance whenever possible. Registration The Company commenced its operations in the country in 1937. Zambia Bata Shoe Company Plc. is a public company, which was incorporated in the then Northern Rhodesia originally as a private company on 14 August 1963. In 1973, Zambia Bata Shoe Company became a public company with Zambians holding 15.5% of the share capital. The company was quoted on the LuSE in 1994 and finally moved to the listed tier on March 30, 2009. Presently more than 400 Zambians hold 26% of the company’s share capital which translates to 19,235,598 shares Corporate Governance The Board of Directors hereby confirms that the Company has complied with all the internal control aspects of the principles of good governance. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and comply with the Companies Act 1994. The Company has no service contracts with any of the Directors, except for the Managing Director and the Finance Director. There have been no contracts of significance subsisting during or at the end of the financial year in which any Director has been materially interested. Proposed Dividend As the economy is now showing good signs of improvement, this will be time to once again start to renovate some of our stores to give them a facelift as we had suspended these activities in the past two years due to economic adverse conditions. We intend to renovate four of our stores this year in addition to opening another three new stores. Your Board of Directors is pleased to recommend a final dividend of K0.06 ( 6 Ngwee) per share, which represent 100% of the previous year, for record date 21st April, 2017 and payable by 24th of April, 2017. By order of the Board Company Secretary

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Zambia Bata Shoe Company Plc. Directors' responsibilities in respect of the preparation of financial statements The Company’s directors are responsible for the preparation and fair presentation of the financial statements of Zambia Bata Shoe Company Plc., comprising the statement of financial position as at 31 December 2016, and the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of Zambia. In addition, the directors are responsible for preparing the director’s report. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management as well as the preparation of the supplementary schedules included in these financial statements. The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the Company will not be a going concern in the year ahead. The auditor is responsible for reporting on whether the annual financial statements are fairly presented in all material respects in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of Zambia. Approval of the financial statements The annual financial statements, of the Company as identified in the first paragraph were approved by the Directors on 16th March 17 and were signed on their behalf by: ................................................... …………………………………. Director Director

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Zambia Bata Shoe Company Plc. Statement of Corporate Governance Introduction During the year 2016 we aimed at ensuring that we put in place appropriate governance frame works to ensure best practice at all times. Board Performance The board continued to perform its oversight role while providing guidance to executive management. The board activities are properly documented and planned to show the number of meetings to be held and the decisions made. The Board Charter During the year 2016 Zambia Bata Shoe Company developed a Board Charter which high lights the duties and responsibilities of the Board of Directors. The Charter sets out the following.

1. The appointment of directors 2. Directors Conduct 3. Duties and Roles of the Directors 4. The powers of the Directors 5. Remunerating Directors 6. Assessments ,removal and resignation of Directors 7. Powers delegated to other various committees

The Board Composition and Engagement The Zambia Bata Board of directors is made up of five members, and the attendance for the year 2016 is as illustrated below.

The Non-Executive Directors are eligible for appointment by the shareholders at the AGM while the Executive Directors have running contracts with Zambia Bata Shoe Company. The Role of the Managing Director and Chairman are performed by separate persons. The role of the

Chairman is undertaken by the Group Africa President.

Directors NameCategory of Director

February March _AGM August November

George Sokota NED √ √ √ √Charles Mate NED √ x √ √Prosper Bachi ED √ √ √ √John Murathe ED √ √ √ √Ronjoy Sengupta ED √ √ √ x

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Directors Interest There are two directors out of five who have an interest in the shares of the Company. Mr C. Mate is associated with Hilda’s Hens Family Trust that holds 6,126,000 shares and G. Sokota hold 1,957,843 ordinary shares of the Company through D. G. Partners. There is no right to subscribe for equity or debt securities which has been granted to any Director. Directors Compensation The Executive Directors remuneration is disclosed in Note 25 of the Financial Statements. Board Committees The Board has not formed other committees in 2016 but will implement this in the year 2017 to ensure compliance with corporate Governance best practices. External Audit The External Auditors are appointed by the shareholders at the AGM and are eligible for re-election at the next Annual General Meeting. Environmental Policy Statement Zambia Bata is committed to protecting the environment to ensure a long term sustainable future for the country and its people .In keeping with this policy, the company’s main objectives are;

a) To Minimize the use of energy b) Eliminate the use of toxic Substances c) Reduce the generation of waste

Zambia Bata Shoe Company believes in the concept of prevention of pollution at source as the best alternative where waste generation is inevitable, the company is committed to recycling in such ways that minimize undesirable effects on air, water and land. In the pursuit of its mission, management is committed to;

a) Adopt and encourage use of processes ,operations ,chemicals and materials which have low risk to the environment and health

b) Be sensitive and responsive to public concern about pollution and environmental impacts of plastic and rubber industry

Code of Ethics Zambia Bata Shoe Company follows the Code of ethics as outlined by BSO code of Ethics guidance. The Code of conduct is made available to all employees and stakeholder’s .it gives guidance to;

a) Ethics and Conduct b) Principles of conduct c) Common Sources of conflict d) Guidelines on Gifts e) Guidelines on Social Activities

This policy gives a clear picture of what is expected of all employees.

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Independent Auditors' Report To the members of Zambia Bata Shoe Company Limited Plc. Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Zambia Bata Shoe Company Plc set out on pages 10 to 51, which comprise the statement of financial position as at December 31, 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements present fairly, in all material respects the financial position of Zambia Bata Shoe Company Plc as at December 31, 2016, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Zambia Companies Act, 1994. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key Audit Matters are those matters that in our professional judgement that were of most significance in the audit of the current period. These matters were addressed in the context of our audit of the financial statements as whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial statements.

Key Audit Matters How a KAM was addressed in the audit Revaluation of Property, plant and equipment The Company carries property in the financial statements using a revaluation model under IAS 16- property Plant and Equipment. The policy is to conduct revaluations at intervals of every 3 years. The last revaluation performed by a professional valuer was performed for the year ended 31 December 2014. The next scheduled professional valuation will be performed for the year ended 31 December 2017. IFRS 13- fair value measurement requires management to reassess fair values of these assets at each balance sheet date. The valuations are dependent on the use of certain key assumptions, judgments and estimates that could affect the actual vales of these properties as at 31 December 2016. Management has obtained an updated review from the professional valuer of these properties as at 31 December 2016. The report was obtained on 11 March 2017.

Our procedures in relation to the valuation of land and buildings included:

1. Reviewing the valuation performed y a professional valuer as of 31 December 2014.

2. Assessing the methodologies used and the appropriateness of the key assumptions used by the valuer in their interim reassessment.

We found the key assumptions used to be reasonable to support the interim revolution performed by a professional valuer to support the disclosures as at 31 December 2016. . Refer to disclosures in note 7 to be financial statements.

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Contingent liabilities The company is involved in legal cases involving former employees that have sued the company on grounds of unfair dismissal and unliquidated damages for separation benefits. These cases are still under the court process Because of the uncertainty regarding final determination of the outcome of these cases, these matters have been disclosed in the financial statements as a contingent liability.

Our audit procedures included, among others, making inquiries of internal and external legal counsel, reviewing the status of the court process and documents, reviewing and evaluating the uncertainties considered by the Company, in particular defenses that has been put forward by the Company relative to the facts on the ground. The Company’s disclosures about this matter are included in Note 24, which specifically explains the uncertainties which gives rise to the classification of these matters as contingent liabilities.

Information Other than the Financial Statements and Auditor’s Report Thereon The directors are responsible for the other information. The other information comprises the Directorate and corporate information, the Chairman’s Report, Report of the Directors and the Director’s responsibility Statement, which we obtained prior to the date of this report, and the annual report, which is expected to be made available to us after that date. Other information does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. Responsibilities of the Directors for the Financial Statements The directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards and the requirements of the Zambia Companies Act, 1994, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. The directors are also responsible for overseeing Zambia Bata Shoe Company Plc’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for

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one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Zambia Bata Shoe Company Plc’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements As required by the Companies Act of Zambia we report to you, based on our audit, that: a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b) in our opinion proper books of accounts, other records and registers have been kept by the company, so far as appears from our examination of those books and registers; and c) the company’s statement of financial position and profit and loss account are in agreement with the books of account. Ernst & Young Chartered Accountants The engagement partner on the audit resulting in this independent auditor’s report is Mike Musonda March 2017 Partner - Practising certificate number: AUD/F005781 Lusaka

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Statement of financial position as at 31 December 2016

In Zambian Kwacha

Note 2016

2015 Assets

Property, plant and equipment 7 62,169,324

67,642,001 Intangible assets 7.1 140,048

194,406

Total non – current assets 62,309,372

67,836,407

Inventories 8 42,676,647

41,347,752

Amounts due from related companies 25 213,302 1,591,730

Trade and other receivables 9 2,704,715 5,471,431 Cash and cash equivalents 10 12,985,436 1,869,299 Total current assets 58,580,100 50,280,212

Total assets 120,889,472 118,116,619

Equity Share capital 11 761,076 761,076

Revaluation reserve

30,016,134

31,005,920 Retained earnings 53,668,196 50,388,237 Total equity 84,445,406 82,155,233

Liabilities Deferred tax liability 12 15,237,127 16,030,911 Total non-current liabilities 15,237,127 16,030,911

Current tax payable 19 1,672,357 699,026 Trade and other payables 13 11,506,654 12,345,324 Provisions 13.1 793,693 55,079 Amounts due to related companies 25 7,234,235 6,831,046 Total current liabilities 21,206,939 19,930,475

Total liabilities 36,444,066 35,961,386

Total equity and liabilities 120,889,472 118,116,619

These financial statements were approved by the board of directors on 16th March 2017 and were signed by: ................................... ................................. Director Director The notes on pages 17 to 53 form an integral part of these financial statements.

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Statement of profit or loss and other comprehensive income for the year ended 31 December 2016

In Zambian Kwacha

Note 2016

2015

Revenue 14

128,458,129

137,203,719

Cost of sales

(71,184,783)

(75,614,076)

Gross profit

57,273,346

61,589,643

Other income 15

1,144,547

174,000

58,417,893

61,763,643

Administration expenses 16

(20,447,771)

(22,786,034)

Operating expenses 17 (27,795,226)

(28,299,336)

Total expenses

(48,242,997)

(51,085,370)

Operating profit

10,174,896

10,678,273

Finance Income 18

340,274 -

Finance expense 18 (113,304)

(1,391,000)

Profit before tax

10,401,866

9,287,273

Income tax expense 19

(3,867,567)

(3,679,235)

Profit for the year

6,534,299

5,608,038

Other comprehensive income Total other comprehensive income net of Deferred tax - -

Total comprehensive income for the year

6,534,299

5,608,038

Earnings per share 0.09 0.07

Basic / diluted

The notes on pages 17 to 53 form an integral part of these financial statements

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Statement of changes in equity For the year ended 31 December 2016

In Zambian Kwacha

Share capital

Revaluation reserve

Retained earnings Total

Balance at 1 January 2015 761,076 32,009,649 50,626,213 83,396,938 Total comprehensive income for the year Profit for the year - - 5,608,038 5,608,038 Total comprehensive income - - 5,608,038 5,608,038

Other equity transfers

Revaluation reserve (unwinding of the reserve) - (1,003,729) 1,003,729 -

Total other equity transfers - (1,003,729) 1,003,729 -

Transactions with owners recorded directly in equity Distributions to owners Dividends to equity holders - - (6,849,743) (6,849,743) Balance at 31 December 2015 761,076 31,005,920 50,388,237 82,155,233

Balance at 1 January 2016 761,076 31,005,920 50,388,237 82,155,233

Total comprehensive income for the period Profit for the year - - 6,534,299 6,534,299 Total comprehensive income for the period - - 6,534,299 6,534,299

Other equity transfers Revaluation reserve (unwinding of the reserve) - (989,786) 989,786 -

Prior Year Adjustment - - 322,330 322,330 Total other equity transfers - (989,786) 1,312,116 322,330

Transactions with owners recorded directly in equity Distributions to owners Dividends to equity holders - - (4,566,456) (4,566,456) Balance at 31 December 2016 761,076 30,016,134 53,668,196 84,445,406 Revaluation reserve

Revaluation reserves arise from the periodic revaluation of property and equipment and represent the excess of the revalued amount over the carrying value of the property and equipment at the date of revaluation. Deferred tax arising in respect of the revaluation of property has been charged directly against the revaluation reserves upon initial revaluation in accordance with International Accounting Standard (IAS) 12: Income Taxes. Prior Year Adjustment This resulted from an opening balance adjustment on inventory The notes on pages 17 to 53 form an integral part of these financial statements.

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Zambia Bata Shoe Company Plc. Statement of cash flows For the year ended 31 December 2016 In Zambian Kwacha

The notes on pages 17 to 53 form an integral part of these financial statements.

Note 2016 2015

Cash flows from operating activities

Profit before tax 10,401,866 9,287,274

Adjustment for:

Depreciation 7 6,545,710 6,324,326

Unrealised exchange differences (1,024,781) 3,054,903

Reversal of impairment of inventory 8 751,993 (733,178)

Provisions for Profit sharing 13 773,088 336,212

Impairment of receivables 22 (67,477) (12,250)

Amortisation of intangible assets 7 56,675 20,742

Loss on disposal of equipment - 164,378

Net Finance (expense)/Income 18 (226,970) 1,391,000

17,210,104 19,833,407

Changes in:

- inventories (1,328,895) 7,403,827

- trade and other receivables 2,766,716 (632,294)

- balances due from related companies 1,378,428 658,413

- balances due to related companies 403,189 (4,082,086)

- Provisions 738,614 (569,780)

- trade and other payables (838,670) (496,270)

Cash generated from operating activities 20,329,486 22,115,217

Income tax paid 19 (3,741,484) (8,919,524)

Interest received 18 340,274

Interest paid 18 (113,304) (1,391,000)

Net cash from operating activities 16,814,972 11,804,693

Cash flows from investing activities

Purchase of property plant and equipment 7 (1,140,351) (6,333,408)

Acquisition of intangible assets 7 (2,318) (177,416)

Proceeds from disposal of equipment - 337,315

Net cash used in investing activities (1,142,669) (6,173,509)

Cash flows from financing activities

Dividends paid (4,566,455) (6,849,743)

Net cash used in financing activities (4,566,455) (6,849,743)

Net increase/(decrease) in cash and cash equivalents 11,105,848 (1,218,559)

Cash and cash equivalents at 1 January 1,869,299 3,234,430

Effect of exchange rate fluctuations on cash held 10,289 (146,572)

Cash and cash equivalents at 31 December 10 12,985,436 1,869,299

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Notes to the financial statements for the year ended 31 December 2016

1 Principal business activity

Zambia Bata Shoe Company Plc. (“the Company”) is domiciled in Zambia. The address of the Company’s registered office is plot 6437, Mukwa Road, Lusaka. The Company is engaged in the business of manufacturing and trading in shoes, other leather and plastic products.

2 Basis of preparation

(a) Statement of compliance

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

Details of the Company’s accounting policies, including changes during the year, are included in Notes 3 to 6.

(b) Functional and presentation currency

These financial statements are presented in Zambian Kwacha (“Kwacha”), which is the Company’s functional and presentation currency.

3 Use of estimates and judgements

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. In the process of applying the Company’s accounting policies, management has made various judgements. Those which management has assessed to have the most significant effect on the amounts recognised in the financial statements have been discussed in the individual notes of the related financial statement line items. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. The company made estimates in making provisions for bad debts on trade receivables and in assessing residual values, provision for inventory write offs and useful lives of property, plant and equipment. The aging of trade receivables was used in making a determination of amounts to be provided for while managements experience was used in determining residual values and useful lives. The Company re-assesses the fair value of property, plant and equipment carried under the revaluation model using a valuation methodology based on a gross replacement cost to determine the open market value, by reference to market-based evidence, using comparable prices adjusted for specific market factors such as nature, location and condition of the property, plant and equipment. The key assumptions used to determine the fair value of the properties and sensitivity analyses are provided in Note 7.

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Notes to the financial statements (continued) for the year ended 31 December 2016

3 Use of estimates and judgements (continued)

Measurement of fair values The Company measures land, building and equipment at fair value.

The Company has an established control framework with respect to the measurement of fair values.

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

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

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

(unobservable inputs).

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

Further information about the assumptions made in measuring fair values is included in the following notes: Note 7 – Property, plant and equipment (revaluation of property).

4A Changes in accounting policies The accounting policies adopted by the Company are consistent with those of the prior year.

Amendments and improvements to standards that became effective for the Company in the current year did not have a material impact on the company’s financial results. The nature and the impact of the standards and amendments that are applicable to the financial statements of the Company are described below:

IAS 1 Disclosure Initiative – Amendments to IAS 1 Effective for annual periods beginning on or after 1 January 2016. Key requirements The amendments clarify: • The materiality requirements in IAS 1 that specific line items in the statement(s) of profit

or loss and Other Comprehensive Income and the statement of financial position may be disaggregated

• That entities have flexibility as to the order in which they present the notes to financial statements

• That entities have flexibility as to the order in which they present the notes to financial statements

• That entities have flexibility as to the order in which they present the notes to financial statement

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• That entities have flexibility as to the order in which they present the notes to financial

statements • That the share of Other Comprehensive Income of associates and joint ventures accounted

for using the equity method must be presented in aggregate as a single line item, and classified between those items that will or will not be subsequently reclassified to profit or loss

• Furthermore, the amendments clarify the requirements that apply when additional subtotals are presented in the statement of financial position and the statement(s) of profit or loss and Other Comprehensive Income.

These amendments are intended to assist entities in applying judgement when meeting the presentation and disclosure requirements in IFRS, and do not affect recognition and measurement. Although these amendments clarify existing requirements of IAS 1, the clarifications may facilitate enhanced disclosure effectiveness. The amendment is expected to enhance the disclosure requirements but did not impact on the recognition and measurement of the financial statements.

4B Standards issued but not yet effective

Below is the listing of standards issued but not yet effective which are reasonably expected to impact the Company in the future. Amendments to IAS 7: Disclosure Initiative The amendments to IAS 7 Statement of Cash flows are part of the IASB’s Disclosure Initiative and helps users of Financials statements better understand changes in an entity’s debt. The amendments require entities arising from the Financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The amendments are effective for the annual period beginning on or after 1 January 2017.The standard will not have significant impact on the company as the company does not have debt instrument measured at fair value. Amendments to IAS 12: Recognition of Deferred Tax Assets for unrealised losses The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of deductible temporary difference. Furthermore the amendments provide guidance on how an entity should determine future taxable profits a d explain the recovery of some assets for more than their carrying amount. The amendment will come into effect for annual periods beginning on or before 1 January 2017. The impact will be assessed in 2017. Annual Improvements 2014-2016 Cycle These improvements are effective for annual periods beginning on or after 1 January 2017. They include:

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Changes in accounting policies, (continued) IFRS 9 Financial Instruments In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions. The Company plans to adopt the new standard on the required effective date. During 2016, the Company has performed a high-level impact assessment of all three aspects of IFRS 9. This preliminary assessment is based on currently available information and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being made available to the Company in the future. Overall, the Company expects no significant impact on its balance sheet and equity except for the effect of applying the impairment requirements of IFRS 9. The Company expects a higher loss allowance resulting in a negative impact on equity and will perform a detailed assessment in the future to determine the extent. (a) Classification and measurement The Company does not expect a significant impact on its balance sheet or equity on applying the classification and measurement requirements of IFRS 9. Loans as well as trade receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. Thus, the Company expects that these will continue to be measured at amortised cost under IFRS 9. However, the Company will analyse the contractual cash flow characteristics of those instruments in more detail before concluding whether all those instruments meet the criteria for amortised cost measurement under IFRS 9. (b) Impairment IFRS 9 requires the Group to record expected credit losses on all of its debt securities, loans and trade receivables, either on a 12-month or lifetime basis. The Company expects to apply the simplified approach and record lifetime expected losses on all trade receivables. The Company expects a significant impact on its equity due to unsecured nature of its loans and receivables, but it will need to perform a more detailed analysis which considers all reasonable and supportable information, including forward-looking elements to determine the extent of the impact. (c) Hedge accounting IFRS 9 does not change the general principles of how an entity accounts for effective hedges. The company has not entered into any hedge agreements. IFRS 15 Revenue from Contracts with Customers IFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount

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Notes to the financial statements (continued) for the year ended 31 December 2016 that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 January 2018. Early adoption is permitted. The Company plans to adopt the new standard on the required effective date and will apply it prospectively as there are no contracts that will be affected by the adoption. During 2016, the Company performed a preliminary assessment of IFRS 15, which is subject to changes arising from a more detailed ongoing analysis. The company is in the business of selling shoes, bags and other shoe related products. (a) Sale of goods Contracts with customers in which shoes and other products sale is the only performance obligation are not expected to have any impact on the Company. The Company expects the revenue recognition to occur at a point in time when control of the asset is transferred to the customer, generally on delivery of the goods. In applying IFRS 15, the Group considered the following: (i) Variable consideration Some contracts with customers provide a right of return, trade discounts or volume rebates. Currently, the Company recognises revenue from the sale of goods measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. If revenue cannot be reliably measured, the Company defers revenue recognition until the uncertainty is resolved. Such provisions give rise to variable consideration under IFRS 15, and will be required to be estimated at contract inception. IFRS 15 requires the estimated variable consideration to be constrained to prevent over-recognition of revenue. However the company does not expect to have instances where the consideration cannot be determined. (ii) Loyalty points programme The Company has introduced a loyalty programme during the year. The Company determines that the loyalty programme offered gives rise to a separate performance obligation because it provides a material right to the customer. Thus, it allocated a portion of the transaction price to the loyalty programme based on relative stand-alone selling price instead of the allocation methodologies allowed under IFRIC 13 Customer Loyalty Programmes. IFRS 16 - Leases The scope of IFRS 16 includes leases of all assets, with certain exceptions. A lease is defined

as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. IFRS 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance leases under IAS 17. The standard includes two recognition exemptions for lessees – leases of ’low-value’ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease

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Notes to the financial statements (continued) for the year ended 31 December 2016 term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. Lessor accounting is substantially unchanged from today’s accounting under IAS 17.

Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs. Early application is permitted, but not before an entity applies IFRS 15. The lease expense recognition pattern for lessees will generally be accelerated as compared to today. Key balance sheet metrics such as leverage and finance ratios, debt covenants and income statement metrics, such as earnings before interest, taxes, depreciation and amortisation (EBITDA), could be impacted. Also, the cash flow statement for lessees could be affected as payments for the principal portion of the lease liability will be presented within financing activities. Lessor accounting will result in little change compared to today’s lessor accounting. The standard requires lessees and lessors to make more extensive disclosures than under IAS 17. Given the significant accounting implications, lessees will have to carefully consider the contracts they enter into to identify any that are, or contain, leases. This evaluation will also be important for lessors to determine which contracts (or portions of contracts) are subject to the new revenue recognition standard. The impact of this amendment will be assessed closer to year of adoption. The standard is effective 1 January 2019. IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration

The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. Entities may apply the amendments on a fully retrospective basis. Alternatively, an entity may apply the interpretation prospectively to all assets, expenses and income in its scope that are initially recognised on or after: (i) The beginning of the reporting period in which the entity first applies the interpretation Or (ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the interpretation. Early application of interpretation is permitted and must be disclosed. First-time adopters of IFRS are also permitted to apply the interpretation prospectively to all assets, expenses and income initially recognised on or after the date of transition to IFRS. The amendments are intended to eliminate diversity in practice, when recognising the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration received or paid in foreign currency. The

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Notes to the financial statements (continued) for the year ended 31 December 2016 impact is still being assessed close to adoption date. The amendment is effective for annual periods beginning on or after 1 January 2018.

5 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

a) Foreign currency transactions Transactions in foreign currencies are translated to the functional currency of the

Company at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation or settlement of foreign denominated monetary assets and liabilities are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated at the foreign exchange rate ruling at the date of the transaction.

(b) Revenue

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised. Risks and rewards pass on delivery.

(c) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first in-first out (FIFO) method. Cost includes direct costs and production overheads incurred in bringing goods to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(d) Financial instruments

i) Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, Available For Sale (AFS) financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the company commits to purchase or sell the asset. Subsequent measurement For purposes of subsequent measurement financial assets are classified in four categories:

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5 Significant accounting policies (continued)

► Financial assets at fair value through profit or loss ► Loans and receivables ► Held-to-maturity investments ► AFS financial assets

The Company’s financial assets, which comprise trade and other receivables, amounts due from related Companies and cash and cash equivalents, are all classified as loans and receivables. Loans and receivables This category is the most relevant to the company. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables. For more information on receivables, refer to Note 9 Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Company’s statement of financial position) when:

► The rights to receive cash flows from the asset have expired Or

► The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the transferred asset to the extent of the company’s continuing involvement. In that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

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Impairment of financial assets Further disclosures relating to impairment of financial assets are also provided in the Trade receivables Note 9. The company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial assets carried at amortised cost For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial Assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is 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 loss is recognised in the statement of profit or loss. Interest income (recorded as finance income in the statement of profit or loss) continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to finance costs in the statement of profit or loss. ii) Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives

25




designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other payables and amounts due to related parties.

After initial recognition, trade and accounts payable and amounts due to group companies are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of comprehensive income Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss

(iii) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

(e) Share capital

Ordinary shares Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognised as a deduction from equity.

(g) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are either measured at cost or re-valued amount less accumulated depreciation and accumulated impairment losses.

Land, buildings and Equipment are measured at revalued amounts less

accumulated depreciation and accumulated impairment losses.

Fixtures and motor vehicles are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the

asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to working

26




Conditions for their intended use, the costs of dismantling and removing the items

and restoring the site on which they are located and capitalised borrowing cost.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are

determined by comparing the proceeds from disposal with the carrying amount of property and equipment, and are recognised net within other income in profit or loss.

When a revalued item is disposed off the revaluation reserve is transferred to retained earnings.

(ii) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is

recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised in profit or loss as incurred. On-going repairs and maintenance is expensed as incurred.

(iii) Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

The estimated useful lives for the current and comparative periods are as follows: Buildings 20 years Computer and other Equipment 4 -10 years Motor vehicles 4 years Furniture and fixtures 5-10 years

Land has an indefinite useful life hence not depreciated Depreciation methods, useful lives and residual values are reviewed at each

financial year-end and adjusted if appropriate.

(iv) Revaluation An external, independent valuation expert, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Company’s land and buildings and equipment after 3 years. The fair values are based on market values, being the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date.

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Zambia Bata Shoe Company Plc. Notes to the financial statements (continued) for the year ended 31 December 2016 5 Significant accounting policies (continued)

(v) Revaluation surplus The surplus arising on the revaluation of properties is initially credited to a revaluation surplus, which is a non-distributable reserve. A transfer is made (net of tax) from this reserve to retained earnings each year, equivalent to the difference between the actual depreciation charge for the year and the depreciation charge based on historical values, in respect of the re-valued assets. Upon disposal, any revaluation reserve relating to a particular asset being sold is transferred to retained earnings.

If the asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset, thereafter the remaining decrease is recognised in profit or loss.

(vi) Derecognition

An item of property, plant and equipment is derecognised on disposal or when it is withdrawn from use and no future economic benefits are expected from its disposal. The gain or loss on disposal is recognised in profit or loss.

(h) Intangible assets

Recognition and measurement The Company’s intangible assets comprise computer software. Intangible assets acquired separately are recognised at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure Subsequent expenditure on intangible assets is capitalised only if it meets the following criteria:

i) It is probable that the expected future economic benefits that are attributable to the assets to the assets will flow to the entity and

ii) The cost of the assets can be measured reliably

Amortisation Amortisation is charged on a straight line basis over their estimated useful lives from the date that it is available for use. Amortisation methods, useful lives and residual values are reviewed at the reporting date and adjusted if appropriate. The effects of any changes in estimates are accounted for on a prospective basis. Software is amortised over three years.

Derecognition An intangible asset is derecognised on disposal or when it is withdrawn from use and no future economic benefits are expected from its disposal.

The gain/loss arising from the de-recognition of the intangible is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profit or loss

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Zambia Bata Shoe Company Plc. Notes to the financial statements (continued) for the year ended 31 December 2016 5 Significant accounting policies (continued)

(i) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGUs exceeds its recoverable amount. Impairment losses are recognised in profit or loss except for property or plant and equipment previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income, up to the amount of any previous revaluation. Any excess is taken to profit and loss. Impairment losses are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Such reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

(j) Segment reporting

Segments are determined by different distribution/supply channel.

Segment results reported to the Company’s Managing Director (the Chief Operating Decision Maker) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Head office items comprise mainly corporate assets (primarily the Company’s headquarters), head office expenses and liabilities.

(k) Dividends Dividends are recognised as a liability in the period in which they are approved by the shareholders.

(l) Earnings per share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary

29

Zambia Bata Shoe Company Plc. Notes to the financial statements (continued) for the year ended 31 December 2016

5 Significant accounting policies (continued) shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss. Attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

(m) Employee benefits

(i) Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of an employee's employment as a result of either an entity's decision to terminate an employee's employment before the normal retirement date or an employee's decision to accept an offer of benefits in exchange for the termination of employment. The Company recognises termination benefits as a liability and an expense at the earlier of when the offer of termination cannot be withdrawn or when the related restructuring costs are recognised under IAS 37 Provisions, Contingent Liabilities and Contingents Assets. Termination benefits are measured according to the terms of the termination contract. Where termination benefits are due more than 12 months after the reporting period, the present value of the benefits shall be determined. The discount rate used to calculate the present value shall be determined by reference to market yields on high quality corporate bonds at the end of the reporting period.

(n) Income and Deferred tax and Value Added Tax (VAT)

Income tax for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, or other comprehensive income in which case it is also recognised directly in equity or other comprehensive income. Current tax is the expected tax payable on taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying

amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit. Deferred tax is measured at the tax rates that are

30




expected to be applied based on the laws that have enacted or substantively been enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised. Deferred tax assets and liabilities are offset, if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes issued by the same tax authority on the same taxable entity

Value added tax (VAT) is charged at a rate of 16% for all the value added. The company charges output VAT for all its sales and input VAT for most of its purchases. Revenues, expenses and assets are recognised net of the amount of value added tax except: - Where the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable - Receivables and payables that are stated with the amount of value added tax included. The net amount of Value Added Tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

(o) Leases

Assets held under other leases are classified as operating leases and are not

recognised in the Company’s statement of financial position. Assets subject to operating leases are recognised in the statement of financial position

according to the nature of the assets

Lease payments – lessee and lessor

Payments under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.

31



5 Significant accounting policies (continued) Determining whether an arrangement contains a lease

At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. This will be the case if the following two criteria are met:

The fulfilment of the arrangement is dependent on the use of a specific asset or assets; and

The arrangement contains a right to use the asset(s).

At inception or on reassessment of the arrangement, the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Company concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Company’s incremental borrowing rate.

6 Operating segments

The Company has three reportable segments as detailed below, which are its strategic segments. For each of the strategic supply lines, the Company’s Managing Director (the Chief Operating Decision Maker) reviews internal management reports on a monthly basis. The reviews performed are based on the following reportable segments:

Retail Wholesale Export Information regarding the results of each reportable segment is included below. Performance is measured based on products, growth and profit before income tax, as included in the internal management reports that are reviewed by the Managing Director. Segment growth and profit are used to measure performance as management believes that such information is relevant in evaluating the results of the segment. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred to acquire segment assets that are expected to be used for more than one period.

32



In Zambian Kwacha

6 Operating segments (continued)

Segment assets, liabilities and cash flows

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

Segment assets comprise primarily property, plant and equipment, intangible assets, inventories, receivables and operating cash.

31-Dec-2016 Retail Wholesale Export Total segments Head office Total

Revenue – external 119,465,485 8,703,652 288,992 128,458,129 - 128,458,129 Depreciation and amortisation (4,099,985) (28,122) - (4,128,107) (2,474,278) (6,602,385) Operating profit/(loss) 30,573,852 2,226,886 74,410 32,875,148 22,700,252- 10,174,896 Finance income - - - - 340,274 340,274 Finance expense - - - - (113,304) (113,304) Profit before income tax 30,573,852 2,226,886 74,410 32,875,148 (22,473,282) 10,401,866 Income tax expenses - - - - (3,867,567) (3,867,567) Profit/(loss) for the year 30,573,852 2,226,886 74,410 32,875,148 (26,340,849) 6,534,299

31-Dec-2015Revenue – external 128,451,623 7,846,750 905,346 137,203,719 - 137,203,719 Depreciation and amortisation (3,571,544) (27,870) - (3,599,414) (2,745,654) (6,345,068) Operating profit/(loss) 36,320,924 1,261,182 20,228 37,602,334 (26,924,061) 10,678,273 Finance income - - - - -Finance expense - - - - (1,391,000) (1,391,000) Profit before income tax 36,320,924 1,261,182 20,228 37,602,334 (28,315,061) 9,287,273 Income tax expenses - - - - (3,679,235) (3,679,235) Profit/(loss) for the year 36,320,924 1,261,182 20,228 37,602,334 (31,994,296) 5,608,038

31 December 2016 Retail Wholesale Export Total segments Head office Total

Segment assets 50,724,784 2,673,179 210,185 53,608,148 67,281,324 120,889,472 Segment liabilities - - - - 36,444,066 36,444,066

31 December 2015

Segment assets 31,745,439 1,896,470 1,591,730 35,233,639 82,882,980 118,116,619Segment liabilities - - - - 35,961,386 35,961,386

33

Zambia Bata Shoe Company Plc. Notes to the financial statements (continued) for the year ended 31 December 2016 In Zambian Kwacha

All assets are in Zambia except for some trade receivables and balances due from related parties and these have been disclosed in notes 9 and 25.

Head office liabilities comprise operating liabilities that are managed at head office level and are not split between segments. Revenue per product line was as follows;

2016 2015

Footwear 123,133,221 130,104,224 Non Footwear 5,324,908 7,099,495

128,458,129 137,203,719

34

Zambia Bata Shoe Company Plc. Notes to the financial statements (continued) for the year ended 31 December 2016 In Zambian Kwacha

7 Property, plant and equipment

Land and

Fixtures

Motor

buildings

Equipment

&fittings

vehicles

Total Cost/revaluation Revaluation

Revaluation

Cost

Cost

At 1 January 2015 53,880,000

3,427,400

18,985,043

441,818

76,734,261 Additions -

617,090

5,716,319

-

6,333,409

Disposals -

(498,123)

-

-

(498,123) Write off -

-

(6,122)

-

(6,122)

At 31st December 2015 53,880,000

3,546,367

24,695,240

441,818

82,563,425

At 1st January 2016 53,880,000

3,546,367

24,695,240

441,818

82,563,425 Additions -

7,715

1,132,636

-

1,140,351

Disposals -

-

-

-

- Write off (193,728)

-

(744,093)

(28,338)

(966,159)

Fixed assets on way -

-

391,035

-

391,035

Reclassification (66,092)

-

-

-

(66,092) At 31st December 2016 53,620,180

3,554,082

25,474,818

413,480

83,062,560

Accumulated depreciation

At 1st January 2015 1,974,386

333,610

8,159,480

440,169

10,907,645 Depreciation for the year -

-

4,014,681

1,649

4,016,330

Write Off -

-

(2,551)

-

(2,551) At 31 December 2015 1,974,386

333,610

12,171,610

441,818

14,921,424

At 1st January 2016 1,974,386

333,610

12,171,610

441,818

14,921,424 Depreciation for the year 1,974,386

279,196

4,292,128

-

6,545,710

Write off (88,878)

-

(458,130)

(28,338)

(575,346) Depreciation adjustment -

-

1,447

-

1,447

At 31 December 2016 3,859,894

612,806

16,007,055

413,480

20,893,235

Carrying amounts At 31 December 2015 51,905,614

3,212,757

12,523,630

-

67,642,001

At 31 December 2016 49,760,286

2,941,276

9,467,763

-

62,169,325 The full amount on write off was for fully depreciated assets. Part of the amount written off 390,814 had current year depreciation and therefore has not been reflected as part of accumulated depreciation for 2016. The depreciation adjustment of K 1,447 is the part of the amount to for the alignment of the depreciation to the company fixed asset register and the reclassification amount of K66,092 for the land and buildings is also the realignment of fixed asset register to our financial statement Fair valuation of leasehold land, buildings and Equipment The fair value of property and equipment was determined by an external, independent property valuer, Anderson and Anderson International, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The valuation was in line with the Company’s accounting policy to recognise its leasehold land, buildings and equipment at fair value.

35



In Zambian Kwacha

7 Property, plant and equipment (continued) Fair value hierarchy for property, plant and equipment as at 31 December 2016 Asset type Level 1 Level 2 Level 3 Land and Buildings - - 49,760,286 Equipment - - 2,941,190

Fair value hierarchy for property, plant and equipment as at 31 December 2015 Asset type Level 1 Level 2 Level 3 Land and Buildings - - 51,905,614 Equipment - - 3,212,758

Description of valuation techniques used and key inputs to valuation of production equipment:

Asset type Valuation technique

Significant unobservable inputs

Equipment Cost Approach Gross replacement cost Adjustments for the condition and age, production capacity

Land and Buildings Market comparable Adjusted comparable market prices per square metre.

Land, buildings and equipment were last revalued in 2014. Revaluation occurs after three years. Under market comparable approach, a property’s fair value is estimated based on the value of comparable prices and condition. In the case of land and buildings the location is also further considered. Under the gross replacement method, the gross replacement cost is considered and adjusted for the condition and production capacity. Sensitivity analysis to significant changes in unobservable inputs within Level 3 of the hierarchy Significant increases/ (decreases) in the gross replacement cost would result in a significant higher/ (lower) fair value measurement of equipment. Significant increases/decreases in the average price per square meter would result in a significant higher/(lower) fair value measurement of land and buildings.

If land and buildings and equipment were stated on a historical cost basis, the carrying amounts would be as follows:

36


Notes to the financial statements (continued) for the year ended 31 December 2016 In Zambian Kwacha

7 Property, plant and equipment (continued)

In accordance with section 193 of the Zambia Companies Act, 1994 (as amended) the register showing the details of property, is available for inspection by members and their duly authorised agents at the Registered Office of the company

7.1 Intangible assets (Software)

Cost 2016

2015 At 1 January 251,440

74,024

Acquisitions 2,318

177,416 At 31 December 253,758

251,440

Accumulated amortisation At 1 January 57,035

36,292

Charge for the year 56,675

20,742 At 31 December 113,710

57,034

Carrying amount At 31 December 140,048

194,406

8 Inventories

2016

2015

Raw materials 1,032,244

2,562,785 Finished goods in stock 42,790,890 39,208,253 Spare parts 120,614

91,822

43,943,748

41,864,875

Write down to net realizable value (note 8.1)

(1,267,101)

(515,108)

Total 42,676,647

41,347,752

8.1 Write down of Inventory to net realisable value

2016

2015

Balance at 1 January

(515,108)

(1,248,286)

Impairment loss reversed/ (provided)

(751,993)

733,178

Balance at 31 December Note 8 (1,267,101)

(515,108)

2016 2016 2015 2015

EquipmentLand and building

EquipmentLand and building

Cost 4,342,799 6,534,340 4,335,083 6,728,068 Accumulated depreciation (3,460,945) (2,219,439) (3,181,662) (1,856,767)Net book value 881,854 4,314,901 1,153,421 4,871,301

37


Notes to the financial statements (continued) For the year ended 31 December 2016 In Zambian Kwacha 9 Trade and other receivables

2016

2015 Trade receivables 1,135,326

1,538,748

Less: impairment provision

(253,288) (185,812)

882,038 1,352,936 Advance payments to suppliers 370,022

654,350

Prepayment and other receivables 1,436,462

3,443,934 Staff receivables 16,193

20,211

2,704,715

5,471,431

Trade receivables have a 60 day credit period with no interest charges. The Company’s exposure to credit and currency risks relating to trade and other receivables is as disclosed in note 22. The movement in the provision for bad debts is disclosed in note 22.The prepayments and other receivables includes amounts for insurance claims and prepaid expenses such as medical insurance, Security on rentals etc. The staff receivables relates to unretired imprest on travel advances.

10 Cash and cash equivalents

2016

2015

Cash and bank balances

12,985,436

1,869,299

12,985,436

1,869,299

The Company’s exposure to interest rate risk and a sensitivity analysis for financial assets and

liabilities are disclosed in note 22.

11 Share capital

(a) Ordinary share capital Authorised 2016

2015

78,000,000 ordinary shares of K0.01 each (2015: 78,000,000 ordinary shares of K0.01 each) 780,000

780,000

Issued and fully paid 76,107,600 ordinary shares of K0.01 each

(2015: 76,107,600 ordinary shares of K0.01 each) 761,076

761,076

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to a vote per share at meetings of the Company.

(a) Dividends

2016

2015 Dividends on ordinary shares declared and paid Final dividend for 2015: K 0.06 per share (2014: K 0.09) 4,566,456

6,849,743

Proposed dividends on ordinary shares Final dividend for 2016: K 0.06 per share (2015: K 0.06) 4,566,456 4,566,456

Proposed dividends on ordinary shares are subject to approval at the annual general meeting and

not recognised as a liability as at 31 December.

38


Notes to the financial statements (continued) for the year ended 31 December 2016 In Zambian Kwacha 12 Deferred tax assets and liabilities

Balance 01. Jan.15

Recognised in profit or loss

Recognised in equity

Balance 31.Dec.15

Recognised in profit or loss

Balance 31.Dec.16

Property, plant and equipment 450,268 (450,268) - - 238,231 238,231 Provisions (short term incentive plan) (82,560) 63,282 - (19,278) 8,141 (11,137)Provisions (leave days) - (61,820) - (61,820) 39,579 (22,241)Unrealised exchange losses - (1,069,216) - (1,069,216) 1,069,216 - Unrealised exchange gains 450,722 (450,722) - - 358,674 358,674 Lease straight lining (67,011) - - (67,011) - (67,011)Provision for insurance claims (446,147) 83,208 - (362,939) (140,913) (503,852)Provision for bad debts - (65,034) - (65,034) 65,034 - Receivable provision - (63,000) - (63,000) (18,674) (81,674)Provision for visa - (57,750) - (57,750) - (57,750)Personal accounts provision - (41,498) - (41,498) 41,498 - Suppliers accounts provision - (45,617) - (45,617) (96,066) (141,683)Provision for unbooked invoices - (120,946) - (120,946) 91,860 (29,086)Audit fee provision - (57,225) - (57,225) (82,694) (139,919)Associates accounts provision - (227,431) - (227,431) (448,802) (676,233)Profit sharing provision - - - - (277,793) (277,793)Water Provision - - - - (9) (9)Adverts Provision - - - - (57,366) (57,366)Provision for gratuity - - - - (13,568) (13,568)Provision for freight - - - - (124,833) (124,833)Provision for legal - - - - (185,476) (185,476)Provision for medical - - - - (25,532) (25,532)Points Redemption - Bata Club - - - - (126,293) (126,293)Tax Consultancy - - - - (54,287) (54,287)Revaluation 18,240,219 49,457 - 18,289,676 (1,053,711) 17,235,965 Total 18,545,491 (2,514,580) - 16,030,911 (793,784) 15,237,127

Assets Liabilit ies Net

2016 2015 2016 2015 2016 2015Property, plant and equipment 238,231 - - - 238,231 -

Provisions (short term incentive plan) (11,137) (19,278) - - (11,137) (19,278)Provisions (leave days) (22,241) (61,820) - - (22,241) (61,820)Unrealised exchange losses - - - (1,069,216) - (1,069,216)Unrealised exchange gains - - 358,674 - 358,673.65 - Lease straight lining (67,011) (67,011) - - (67,011) (67,011)Provision for insurance claims (503,852) (362,939) - - (503,852) (362,939)Provision for bad debts - (65,034) - - - (65,034)Receivable provision (81,674) (63,000) - - (81,674) (63,000)Provision for visa (57,750) (57,750) - - (57,750) (57,750)Personal accounts provision - (41,498) - - - (41,498)Suppliers accounts provision (141,683) (45,617) - - (141,683) (45,617)Provision for unbooked invoices (29,086) (120,946) - - (29,086) (120,946)Audit fee provision (139,919) (57,225) - - (139,919) (57,225)Associates accounts provision (676,233) (227,431) - - (676,233) (227,431)Profit sharing provision (277,793) - - - (277,793) - Water Provision (9) - - - (9) - Adverts Provision (57,366) - - - (57,366) - Provision for gratuity (13,568) - - - (13,568) - Provision for freight (124,833) - - - (124,833) - Provision for legal (185,476) - - - (185,476) - Provision for medical (25,532) - - - (25,532) - Points Redemption - Bata Club (126,293) - - - (126,293) - Tax Consultancy (54,287) - - - (54,287) - Revaluation - - 17,235,965 18,289,676 17,235,965 18,289,676 Total (2,357,512) (1,189,549) 17,594,639 17,220,460 15,237,127 16,030,911

39



13 Trade and other payables

2016

2015

Trade payables 3,892,223

5,621,112 Accruals 2,507,107

772,964

Other payables 5,105,284

5,951,248

11,506,654

12,345,324

Trade creditors provide credit for up to 90 days which is not interest bearing. Other payable include PAYE, security deposits, dividends payable and customer advance payments. Accruals are for items such as electricity, levies, VAT and commission.

13.1 Provisions for Profit sharing

Opening balances 55,079

288,647 Charge for the year 773,088

336,212

Payments done in the year (34,474)

(569,780) Closing balances 793,693

55,079

This provision for profit share is payable within one year as per employee contract with the company depending on the target given by head office.

14 Revenue Revenue comprises domestic and export sales as follows:

Domestic sales 128,169,137 136,298,373 Export sales 288,992 905,346

128,458,129 137,203,719

15 Other income

Rental income 119,766 174,000 Exchange gain 1,024,781 -

1,144,547

174,000

Lease commitments Less than one year 173,333

156,000

Between one and five years -

-

173,333

156,000

Lessors shall, in addition to meeting the requirements of IFRS 7 disclose the following for operation

leases: a) The Future minimum lease payments under non –cancellable operating leases in the

aggregate and for each of the following periods : ♦ Not later than one year ♦ Later than one year and not later than five years ♦ Later than five years

b) Total contingent rents recognised as income in the period c) A general description of the lessor’s leasing arrangement

40



16 Administration expenses

Other administration expenses are classified in note 16.2 16.1 Personnel expenses

Pension contributions are to the National Pension Scheme Authority, a statutory defined contribution scheme and African Life. The Company’s obligation ends when contributions are remitted.

16.2 Other expenses

17 Operating expenses

2016 2015Auditors remuneration 688,594 849,403Key management compensation 25 (a) 2,989,938 3,013,983Directors fees 25 (a) 487,993 260,680Personnel expenses 16.1 5,880,146 4,894,131Other expenses 16.2 10,401,100 13,767,837

20,447,771 22,786,034

Salaries and wages 3,072,293 2,169,705Medical and pension (company contributions) 1,061,725 850,929Housing 1,437,693 1,449,589Profit sharing 282,078 336,212Training 26,357 87,696Total 5,880,146 4,894,131

Bank charges 620,332 775,110 Electricity and water 560,281 532,419 Entertainment - 1,949 General expenses 331,416 1,473,482 Travelling expenses 1,482,318 1,384,763 Security 653,820 596,614 Royalty and management fees 4,387,961 4,656,251 Legal and consultancy 2,140,865 994,821 Subscriptions and donations 224,107 133,147 Loss on sale of fixed assets - 164,378 Exchange Loss - 3,054,903

10,401,100 13,767,837

Shop expenses 6,547,972 8,771,227Repairs and maintenance 694,214 581,167Rent expenses 8,813,317 8,384,187Other operating expenses 17.1 11,739,723 10,562,755

27,795,226 28,299,336

41



17.1 Other operating expenses

18 Financing expense

The interest expense was incurred on bank overdraft. The interest income was earned from placing funds in a fixed deposit account.

2016 2015

Advertising 1,562,734 1,476,242Depreciation 17.2 6,401,023 5,795,076Freight and packing 2,012,053 1,752,674Amortisation of intangible assets 56,675 20,743Telephone – internet 1,046,005 987,493Insurance 320,220 251,254Stationary and office expenses 341,013 279,273

11,739,723 10,562,755

17.2 Depreciation

Other operating expenses (note17.1) 6,401,023 5,795,076Cost of sales 144,687 529,250

6,545,710 6,324,326

Finance Income 340,270 Finance expense (113,340) (1,391,000)

226,930 (1,391,000)

42



19 Income tax expense

20 Earnings per share

Profit after tax attributable to ordinary shares 6,534,299 5,608,038 Weighted average number of ordinary shares in issue 76,107,600

76,107,600

Basic earnings per share expressed in Kwacha 0.09

0.07

The calculation of the basic earnings per share is based on the profit after tax attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the year. There were no dilutive potential ordinary shares at 31 December 2016 and basic earnings per share equals to diluted earnings per share. No additional shares were issued during the year.

21 Operating leases

Rent expense recognised in the statement of profit or loss and other comprehensive income

2016

2015

Current year operating lease expense 9,182,296

8,384,187 Increase in rent expense is mostly attributed to annual escalation and the weakening of the kwacha against the US dollar.

Current tax expense 2016 2015 Current year 4,714,815 6,193,816 Deferred tax expense (847,248) (2,514,581)

Tax expense 3,867,567 3,679,235

Reconciliation of effective tax rateProfit before taxation 10,401,867 9,287,273Tax on accounting profit 35.00% 3,640,653 35.00% 3,250,546Tax on other PPE written off -1.44% (144,342) Tax non-deductible expenses 4.04% 406,365 5.33% 494,975Effect of income taxed at a lower rate -0.71% (35,109) -0.71% (66,286)Total income tax expense 39.62% 3,867,567 39.62% 3,679,235

Tax payableOpening balance 699,026 3,424,734Charge for the year 4,714,815 6,193,816Tax paid (3,741,484) (8,919,524)Tax payable 1,672,357 699,026

The non-deductible expenses comprise housing and motoring benefits which are not taxed in the hands of the beneficiary as well as property taxes, expensed tax charges related to exports which were disallowed to be at zero rate, telephone costs which are not deductible and other sundry expenses that are not deductible

43



Lease commitments

Non-cancellable operating lease minimum rentals are payable as follows:

Less than one year 8,143,821

7,352,045 Between one and five years 5,982,162

6,517,334

14,125,983

13,869,379

The Company leases a number of shops under operating leases. The leases typically run for a period of five (5) years, with an option to renew the lease after that date. Lease payments are increased every five years to reflect market rentals. For the non-cancellable leases which provide for increment in rent payments, they have been straight-lined to be equal throughout the lease period. A number of non-cancellable leases have expired and are still to be renewed.

22 Financial instruments The Company has exposure to the following risks from its use of financial instruments:

credit risk liquidity risk market risk

This note presents information about the Company’s exposure to each of the above risks, the

Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included throughout these financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the

Company’s risk management framework. The Board is responsible for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyse the risks faced by

the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Board of Directors oversee how management monitors compliance with the Company’s risk

management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial

instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers.

22 Financial risk management (continued)

Trade and other receivables and related party receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Company’s customer base, including the default risk of the industry and country, in which customers operate, has less of an influence on credit risk.

The Board of Directors has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, when available, and in

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some cases Company references. Purchase limits are established for each customer, which represents the maximum open amount without requiring approval from the Board of Directors; these limits are reviewed annually. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a prepayment basis.

Most of the Company’s credit customers have been transacting with the Company for over five years, and losses have occurred infrequently. Trade and other receivables relate mainly to the Company’s wholesale customers.

Goods are sold subject to retention of title clauses, so that in the event of non-payment the Company may have a secured claim. The Company does not require collateral in respect of trade and other receivables.

Cash and cash equivalent The Company maintains its cash balances with reputable banks. There is therefore minimal risk

that the company may fail to access its cash and cash equivalents. Liquidity risk

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

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

The company has an overdraft facility to meet its obligations when cash balances are lower.

The following are the contractual maturities of financial liabilities.

31-Dec-16 Carrying Contractual cash flows

3 months or less

Trade payables 3,892,223 3,892,223 3,892,223 Amounts due to related party 7,234,235 7,234,235 7,234,235 Total 11,126,458 11,126,458 11,126,458

31 December 2015

Carrying Contractual cash flows

3 months or less

Trade payables 5,621,112 5,621,112 5,621,112 Amounts due to related party 6,831,046 6,831,046 6,831,046 Total 12,452,158 12,452,158 12,452,158

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Market risk

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

Currency risk

The Company is exposed to currency risk on sales and purchases that are denominated in a currency other than the respective functional currency of Company, primarily the U.S. Dollars (USD), South Africa Rand (ZAR) and Euros.

In respect of monetary assets and liabilities denominated in foreign currencies, the Company

ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies to meet the accepted foreign currency risk exposure.

Interest rate risk The Company adopts a policy of ensuring that between 40 and 60 percent of its exposure to changes

in interest rates on borrowings is on a fixed rate basis. The Company does not use interest rate swaps.

The company during the financial year 2016 did not have any interest bearing borrowings.

Capital management For the purpose of the company’s capital management, capital includes issued capital, retained earnings and revaluation reserve. The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors return on capital as well as the level of dividends (2016: K 4,566,455 and 2015: K 4,566,455) to ordinary shareholders.

Financial risk management (continued)

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. However, the company did not have any borrowings. The overall liability position was compared to cash and cash equivalents as below.

2016

2015

Total liabilities 20,547,595 19,930,475

Less: Cash and cash equivalents (12,985,436)

(1,869,299) Net debt 7,562,159 18,063,191 Total equity 84,310,966

82,155,233

Net debt to equity ratio 8.97%

21.99%

There is no target ratio for debt to equity as per articles of Association and there are no external imposed requirements. There were no changes in the Company’s approach to capital management during the year. The liabilities represent all obligations which will lead to cash outflows and as such exclude deferred tax liabilities but include income tax payable.

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Fair values versus carrying amounts

Directors have assessed and concluded that the fair values of financial assets and liabilities are not materially different from the carrying amounts shown in the statement of financial position.

This is due to the short term nature of the financial assets and liabilities and the impact of discounting is likely to be immaterial.

Credit risk Exposure to credit risk

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

2016

2015

Trade receivables 1,135,326

1,538,748 Staff receivables 16,193

20,211

1,151,519

1,558,959

Amounts due from related companies – fellow subsidiaries Bata Shoe Company (Malawi) Ltd. 75,632

1,292,998

Zimbabwe Bata Shoe Co. Ltd. 137,669

298,732

213,302

1,591,730

Cash and cash equivalents 12,985,436

1,869,299

14,350,257

5,019,988

22 Financial risk management (continued)

Credit risk (continued) Exposure to credit risk (continued)

All trade receivables and related companies balances relate to wholesale customers.

Impairment losses

The aging of trade receivables (including related party receivables) arising from trade at the reporting date was: 31st December 2016

Gross Impairment Net Gross Impairment Net2016 2016 2016 2015 2015 2015

0 - 30 Days 623,863 - 836,631 836,631 - 836,63131 - 60 Days 160,403 - 591,024 591,024 - 591,02461 - 90 Days 61,055 - 96,835 96,835 - 96,835Past due 91 - 180 Days 201,701 - 86,228 86,228 - 86,228Past due 180 - 364 Days 94,547 (47,274) 40,951 81,901 (40,950) 40,951Past due more than one year 206,015 (206,015) 1,292,998 1,437,859 (144,861) 1,292,998At 31 December 1,347,585 (253,288) 2,944,667 3,130,478 (185,811) 2,944,667

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

2016 2015 Balance at 1 January 185,811 173,561 Impairment loss (reversal) /charge 67,477 12,250 Balance at 31 December 253,288 185,811

Maximum credit period is 90 days and generally debtors due for more than 180 days are considered for impairment. The allowance account in respect of trade receivables is used to record impairment losses unless the Company is satisfied that no recovery of the amount owing is possible; at that point the amount is considered irrecoverable and is written off against the financial asset directly. At 31 December 2016 the Company provided K 253,288 as impairment on its trade receivables (2015: K 185,811).

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22 Financial instruments (continued)

Currency risk Exposure to currency risk

The Company’s exposure to foreign currency risk was as follows. The exposure under each currency is the kwacha equivalent of the foreign denominated balance:

31 December ZMW USD EUR SGD ZAR Total ZMW USD EUR SGD ZAR Total

2016 2016 2016 2016 2016 2016 2015 2015 2015 2015 2015 2015

Trade & other receivables 4,084,475 98,315 - - - 4,182,790

5,303,121 168,310 - - - 5,471,431

Cash and cash equivalents 12,365,275 431,626 115,487 -

1,498

12,913,886

1,164,114 655,026 4,642

552

44,965 1,869,299

Amounts due from related companies - 213,302 - - -

213,302 - 1,591,730 - - - 1,591,730

Trade and other payables (10,655,145)

(2,136,210) - -

(93,226)

(12,884,582)

(8,686,356)

(3,658,967) - - - (12,345,323)

Amounts due to related companies - (7,163,481) -

(70,653) - (7,234,134) -

(3,722,818) - (107,290)

(3,000,938)

(6,831,046)

Exposure in statement of financial position 5,794,605

(8,556,448)

115,487

(70,653)

(91,728)

(2,808,739)

(2,219,121)

(4,966,719)

4,642

(106,738)

(2,955,973)

(10,243,909)

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22 Financial instruments (continued)

Currency risk (continued) Exposure to currency risk (continued)

The following significant exchange rates applied during the year:

Average rate Reporting date

2016 2015 2016 2015

USD 10.316 8.795 9.958 11.01 EUR 11.382 9.706

10.475 12.012

SGD 7.457 6.381

6.879 7.7918 ZAR 0.704 0.679

0.724 0.7043

Sensitivity analysis A 10 percent strengthening/weakening of the Kwacha (K) against the foreign

currencies at 31 December 2016 would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis was performed on the same basis for 2015.

23 Capital commitments

The Company has no major commitments as at 31 December 2016 (2015: nil).

Currency exposure

Strengthening by 10%

Weakening by 10%

Strengthening by 10%

Weakening by 10%

USD 8,556,448.0 855,644.8 (855,644.8) 556,169.1 (322,837.0)EUR (115,487.0) (11,548.7) 11,548.7 (7,506.7) 302.0 SGD 70,653.0 7,065.3 (7,065.3) 4,592.4 (6,938.0)ZAR 91,728.0 9,172.8 (9,172.8) 5,962.3 (192,138.0)

31-Dec-16 8,603,342.0 860,334.2 (860,334.2) 559,217.2 (521,611.0)

USD 4,966,719.0 496,671.9 (496,671.9) 322,836.7 (322,836.7)EUR (4,642.0) (464.2) 464.2 (301.7) 301.7 SGD 106,738.0 10,673.8 (10,673.8) 6,938.0 (6,938.0)ZAR 2,955,973.0 295,597.3 (295,597.3) 192,138.2 (192,138.2)

31-Dec-15 8,024,788.0 802,478.8 (802,478.8) 521,611.2 (521,611.2)

Impact on profit & loss Impact on equity

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24 Contingent liabilities

The company has the following contingent liabilities i) Emmanuel Tumba and 7 others Vs Zambia Bata Shoe Company.

There is a pending legal case in which the company paid an amount for termination of employees. The ruling was made in 2008 by the industrial relations court and the company has since paid those sums awarded to the former employee. The Former employees are now seeking interest on the monies paid hence the company may pay an additional sum.

ii) Lucy Msimuko Vs Zambia Bata Shoe Company The nature of the ligation is payment of unliquidated damages being separation benefits claimed by the plaintiff against the defendant. It is estimated that if the plaintiff succeeds in her claims she may recover the sum of K40, 000 plus interest and the sum of K 250,000 as costs on both parties for litigation.

25 Related party transactions

(a) Transactions with key management personnel

i) Loans to directors, executive officers and key management personnel

There were no loans issued to directors, executive officers and key management

personnel.

ii) Key management personnel compensation comprised (continued)

In addition to their salaries, Zambia Bata Shoe Company Plc. also provides non-cash benefits to directors and executive officers, and contributes to a post-employment defined contribution plan on their behalf. Non cash benefits include housing, personal to holder car among other things.

2016 20152,231,426 2,127,400

135,930 181,670 499,382 494,382 123,200 210,531 2,989,938 3,013,983

Short term employee benefitsPension ContributionsBonus provisionsRent paid

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iii) Directors remuneration

Directors fees 487,993

260,680

Director’s fees represent sitting allowances and are paid net of tax.

iv) Dividends paid to entities controlled by directors

Hilda's Hens Family Trust 367,560

551,340 DG Partners 37,706

56,559

(b) Other related party transactions

The Company is 74% owned by Bafin (Nederland) B.V. which is the ultimate parent and in incorporated in the Netherlands. i) Sales to group companies – fellow subsidiaries

2016

2015

Bata Shoe Company (Malawi Limited )

75,039

682,653 Zimbabwe Bata (Trade Sales)

137,474

199,902

Zimbabwe Bata (Sale of equipment)

-

297,689 Botswana Bata Shoe Co. Ltd.( Trade Sales)

76,479

-

288,992

1,180,244

(b) Other related party transactions (continued)

ii) Purchases from group companies

2016

2015

Bata Nederland B.V., Best

1,769,410

628,261 Kenya Bata Shoe Co.Ltd.

2,202,779

1,747,053

Malawi Bata Shoe Co.Ltd.

-

504,297 Zimbabwe Bata Shoe Co.Ltd.

2,559,628

-

Botswana Bata Shoe Co.Ltd.

16,662

- Futura Footwear Limited

17,678,827

8,605,437

Bata Bangladesh

-

2,708 Bata Singapore

21,115,091

25,912,490

Bata Malaysia

179,454 Indonesia P.T.Sepatu Bata

332,030

2,123,167

Global Footwear Services

996,396

777,179 Bata Brands SA

2,807,056

2,737,785

Bata Brands Sarl - Luxembourg -

3,168 Footwear Information Technology 22,991

105,632

49,680,324

43,147,177

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iii) Amounts due from related companies – fellow subsidiaries

No provision for doubtful debt has been made on amounts due from related parties and there has been no impairment. The payment terms are 60 days and there is no interest charged on the amount due.

iv) Amounts due to related companies – fellow subsidiaries

All outstanding balances with these related parties are to be settled in cash within twelve months of the reporting date. None of the balances are secured and no interest is charged.

26 Subsequent Events

No material events or circumstance have arisen between the accounting date and the date of this Report.

2016 2015

Bata Shoe Company (Malawi) Ltd. 75,632 1,292,998Zimbabwe Bata Shoe Co. Ltd. 137,669 298,732

213,302 1,591,730

2016

2015

Bata Nederland B.V., Best

581,070

628,261 Kenya Bata Shoe Co. Ltd.

-

115,308

Malawi Bata Shoe Co. Ltd.

-

745,277 Futura Footwear Limited

4,024,285

3,000,938

Bata Singapore

1,943,516

1,914,157 Indonesia P.T.Sepatu Bata

317,865

-

Global Footwear Services

70,653

107,290 Bata Brands Sarl - Luxembourg

293,730

319,815

Botswana Bata Shoe Co. Ltd.

3,117

-

7,234,235

6,831,046

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Appendix to the financial statements for the year ended 31 December 2016 In Zambian Kwacha 5 year financial record

This appendix does not form part of the financial statements.

2016 2015 2014 2013 2012

Continuing operations:

Turnover 128,458,129 137,203,719 123,305,193 100,502,314 87,012,634

Profit before tax 10,401,866 9,287,273 21,694,591 15,463,206 14,092,970 Taxation (3,867,567) (3,679,235) (8,879,551) (6,136,523) (4,941,772)Profit from continuing operations 6,534,299 5,608,038 12,815,040 9,326,683 9,151,198

Discontinued operation

Profit from discontinued - - - - -

Profit for the period 6,534,299 5,608,038 13,861,593 9,326,683 9,151,198 Dividend proposed/paid per share (Kwacha) 0.06 0.06 0.09 0.07 0.05

Total non – current assets 62,309,372 67,836,407 68,172,344 35,084,157 33,541,579 Total current assets 58,580,100 50,280,212 57,762,244 38,152,383 41,885,585 Total 120,889,472 118,116,619 125,934,588 73,236,540 75,427,164

Share capital 761,076 761,076 761,076 761,076 761,076 Retained earnings 53,668,196 50,388,237 50,626,214 42,651,138 36,273,759 Revaluation reserves 30,016,134 31,005,920 32,009,649 12,024,447 12,580,850 Deferred tax liability 15,237,127 16,030,911 18,545,491 6,242,911 6,780,010 Total current liabilities 21,206,939 19,930,475 23,992,158 11,556,968 19,031,469 Total 120,889,472 118,116,619 125,934,588 73,236,540 75,427,164

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