Final Results

ZCCM Invs.Hldgs PLC 08 March 2005 ZCCM INVESTMENTS HOLDINGS PLC NOTICE OF THE ANNUAL GENERAL MEETING Notice is hereby given that the 5th Annual General Meeting of members of ZCCM Investments Holdings Plc will be held at Mukuba Pension, 5309 Dedan Kimathi Road, on 30 March 2005 at 13.00 hours. (a) To receive and consider for the 12 month period ended 30 June 2004 the accounts and reports of the Directors and the Auditors for the period ended on that date; and (b) To fix the remuneration of the Auditors for the 12 month period ended 30 June 2004 and appoint Auditors for the ensuing year. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote in his stead. The proxy need not be a member of the Company. A suitable form of proxy is enclosed. By Order of the Board W S Musama, Company Secretary Lusaka, Zambia 03 March 2004 ZCCM INVESTMENTS HOLDINGS PLC CHAIRMAN'S STATEMENT It is my pleasure to present the ZCCM Investments Holdings Plc Annual Report for the year ended 30th June 2004. Following a slow start to the year both in terms of global commodity prices and domestic production, strong copper and cobalt prices coupled with improved output in the second half of the year enabled a satisfactory ending to the year with over ninety percent of the assets in our portfolio having achieved varying levels of profitability. We are confident that the ongoing rehabilitation of existing assets and commencement of high value projects, such as the Kansanshi Copper Mining Project, will raise profitability further. During the year under review, London Metal Exchange copper inventories witnessed a decline mainly attributed to an influx of demand for commodity metals fuelled by growth in Asia and more particularly China. As a result, the cash copper price improved to an average of US$1.10/lb and was sustained at these high levels throughout the year. Cobalt whilst comprising a smaller proportion of our mining activity, also registered a significant upswing in price to the benefit of the industry and country as a whole. It is noteworthy to state that the challenge of our present investment portfolio is hinged on the continued reduction of unit operating costs and continued realization of favourable selling prices. To this end, it is noted that efforts being made at the various units within our portfolio have recorded notable successes. At one of the units, improvements undertaken have as at year end succeeded in reducing the cash operating costs to US$0.53 per lb of copper produced. A total of approximately 280 000 metric tonnes of copper was produced by the mining industry in 1999, a year before complete privatisation of the industry. Though metals prices were depressed during much of the privatisation era to end of December 2003, the introduction of new investors has enabled the mining industry to re-capitalise and also record an increase in production from 336 385 tonnes and 353 594 metric tonnes in 2002 and 2003 respectively. The increase is in part attributed to improvements in techniques and additional production facilities. Subsequent to the year end, Vedanta Resources Plc acquired 51 percent equity stake in our largest operating investment, Konkola Copper Mines plc thereby reducing our shareholding interest from 42 percent to 20.6 percent. This change should facilitate certainty of production through the inflow of additional management expertise and pledged standby funding of US$220 million for future operations. During the year, the closed Ramcoz plc (in Receivership) was sold to J & W and the Agreements were signed on 19 December 2003, upon conclusion of the negotiations between GRZ/Ramcoz Negotiating Team and J & W representatives. At year end completion of the sale was awaiting finalisation of some outstanding items. The coming on stream of new mines such as Kansanshi, the reopening of Luanshya Mines, the entry of a strategic partner at KCM and the implementation of projects intended to increase output at Mopani, should see production figures rise further in future. The Company during the year under review associated with Maamba Collieries Limited, by way of providing technical assistance with significant strides having been achieved resulting in improved coal production and increased supply to the Zambian market. Subsequent to the year end, the Company has rendered support to Maamba Collieries' by facilitating the sourcing of short term funding amounting to US$300,000. The funds are for the rehabilitation of the Coal Processing Plant (CPP. The Company has continued implementing the Copperbelt Environment Project (CEP) which relates to post privatisation environmental clean up obligations. The Project is sponsored by World Bank/Nordic Development Fund through GRZ and ZCCM-IH has committed US$3.8 million from a project total of US$50.8m. Since inception in March 2000, the Company has been involved in the resolution of historic liabilities arising from the predecessor company ZCCM Limited. It is now the intention of the Company to refocus on the future and identify new and viable projects. The Company aims to seek equity partners, both local and external, possessing appropriate competence and skills to manage the ventures successfully. This action is intended not only to contribute to national employment creation but also to expand and provide a sustainable investment portfolio to meet future challenges as an investment holding Company. As an investments holding company at the forefront of public-private sector partnerships, we recognise that we occupy a unique position in Zambia. It is our view that these partnerships, with the right focus and policies in place, can promote social and economic development. Indeed, one of our foremost objectives is to strive to ensure that all stakeholders in our business adhere to legal and public expectations, particularly with regard to commercial obligations and the preservation of our environment. In conclusion, allow me to acknowledge the invaluable contribution of the Board of Directors and the Management and Staff of ZCCM - IH Plc for their individual and collective contribution, wise counsel and dedication. George K Chibuye Chairman - ZCCM Investments Holdings Plc Lusaka, Zambia 03 March 2005 FINANCIAL REVIEW FINANCIAL HIGHLIGHTS FOR YEAR ENDED 30 JUNE 2004 A Company net profit of K24,261 million was recorded during the year compared to a net profit of K366,315 million reported in the previous year. The reduction was due to a significant reduction in non operating income to K3,156 million during this year from K462,417 million. Last year's income was derived largely from a write off of some of the Company's GRZ debt. Interest income from treasury management activities also reduced significantly on account of lower than expected interest rates. The Company earned revenue of K31,947 million compared to K25,685 million last year, comprising copper and cobalt price participation income of K14,359 million as well as dividend income of K17,588 million, generated from the Company's investments in Chambishi Metals plc and Copperbelt Energy Corporation plc, respectively. The impact of the aforementioned reduction in profitability compared to last year on the Company's cash position was mitigated by the cash receipt of a deferred purchase consideration from Mopani Copper Mines plc of K19,126 million. ZCCM Investments Holdings Plc (Incorporated in the Republic of Zambia) and its subsidiary companies Income Statement for the year ended 30 June,2004 All tabulated figures are stated in Zambian Kwacha Million Company Group Company Group 2004 2004 2003 2003 Revenue 31,947 150,499 25,685 137,266 --------- --------- --------- --------- Operating expenses/cost of sales (16,130) (138,234) (61,012) (190,903) --------- --------- --------- --------- Operating profit/(loss) 15,817 12,265 (35,327) (53,637) Other operating income 7,908 21,283 6,343 17,257 Net financing income/ (costs) 992 1,697 (50,899) (54,014) Environmental expenses (2,899) (2,899) (10,661) (10,661) Non operating income 3,156 11,169 462,417 670,837 --------- --------- --------- --------- Profit before taxation 24,974 43,515 371,873 569,782 Income tax (713) 195 (5,558) (6,725) --------- --------- Net profit for the year 24,261 43,710 366,315 563,057 --------- --------- --------- --------- Earnings per share K271.69 K489.49 K4,102.24 K6,305.48 --------- --------- --------- --------- ZCCM Investments Holdings Plc (Incorporated in the Republic of Zambia) and its subsidiary companies Balance sheet as at 30 June,2004 All tabulated figures are stated in Zambian Kwacha Million Company Group Company Group 2004 2004 2003 2003 Assets Property, plant and 3,689 80,620 1,956 41,152 equipment Investments, loans and 449,409 449,393 449,409 449,393 advances Deferred tax asset - 744 - - Other long term 92,222 92,222 67,160 68,212 receivables -------- ------- --------- -------- Total non-current assets 545,320 622,979 518,525 558,757 --------- -------- Inventories - 8,184 - 5,808 Accounts receivable and 57,960 84,722 57,002 81,033 prepayments Government debt securities 29,141 29,141 18,882 18,882 held-to-maturity Cash and bank 14,312 17,254 49,472 51,978 -------- ------- --------- -------- Total current assets 101,413 139,301 125,356 157,701 -------- ------- --------- -------- Total assets 646,733 762,280 643,881 716,458 -------- ------- --------- -------- Equity Called up share capital 893 893 893 893 General reserve (1,597,220) (1,588286) (1,621,481) (1,633,985) Revaluation reserve 870 11,398 870 12,684 Subordinated loan 865,445 865,445 865,445 865,445 -------- ------- --------- -------- Total equity (730,012) (710,550) (754,273) (754,963) -------- ------- --------- -------- Liabilities Long term loans 1,293,278 1,330,408 1,308,084 1,319,980 Finance lease - 3,795 - - Restoration, rehabilitation and environmental provision - 2,451 - 2,435 Grants - 12,008 - 4,678 Deferred tax liabilities - 6,740 - 8,082 --------- -------- Total non-current 1,293,278 1,355,402 1,308,084 1,335,175 liabilities -------- ------- --------- -------- Bank overdraft - 228 - - Finance lease - 1,898 - - Accounts payable 1,693 23,684 24,225 60,543 Accruals and provisions 79,855 89,284 61,804 69,188 Taxation 1,919 2,334 4,041 6,515 -------- ------- --------- -------- Total current liabilities 83,467 117,428 90,070 136,246 -------- Total equity and 646,733 762,280 643,881 716,458 liabilities -------- ------- --------- -------- These financial statements were approved by the board of directors on 3 March 2005. ZCCM Investments Holdings Plc (Incorporated in the Republic of Zambia) and its subsidiary companies Cash flow statement for the year ended 30 June,2004 All tabulated figures are stated in Zambian Kwacha Million Group Group Group Group Operating activities 2004 2004 2003 2003 Profit before tax 43,515 569,782 Adjustments for non-cash items Depreciation 3,950 3,404 Profit on assets retired and sold (697) (1,719) Grants amortised (13,714) (10,034) Dividends income (16,588) (25,685) Movements on KCM restructuring - (317,223) ZESCO loan written back - (431,139) Exchange differences on loans and 215 46,391 investments Changes in operating assets and liabilities (Increase)/decrease non-current (24,010) 314,803 receivables (Increase)/decrease in inventories (2,376) 22,716 (Increase)/decrease in receivables (3,689) 31,164 Decrease in current payables (16,763) (157,458) Increase/(decrease) in other long 16 (103,712) term payables Income tax paid (3,710) (4,392) Interest income (6,771) (5,651) Interest expense 103 13 ------- ------- ------- -------- Cash flows used in operating (40,519) (68,740) activities ------- ------- ------- -------- Investing activities Purchase of property, plant and (43,422) (15,633) equipment Proceeds from sale of equipment and 701 1,974 other assets Investments, loans and advances (10,259) (18,882) Interest received 6,771 4,990 Dividends received 14,929 22,697 Disposal of subsidiary, net of cash - (6,532) disposed of ------- ------- ------- -------- Cash flow from investing activities (31,280) (11,386) ------- ------- ------- -------- Financing activities Proceeds from non - current 30,099 65,744 borrowings Repayment of borrowings (19,886) - Payment of finance lease (66) - liabilities Finance lease received 5,759 - Grants received 21,044 11,314 Interest paid (103) (13) ------- ------- ------- -------- Cash flow from financing activities 36,847 77,045 ------- ------- -------- Net decrease in cash (3,081) Cash balances at beginning of the period Cash and bank balances 51,978 55,428 Bank overdrafts - 51,978 (369) 55,059 ------- ------- ------- -------- Cash balances end of the period Cash and bank balances 17,254 51,978 Bank overdrafts (228) 17,026 - 51,978 ------- ------- ------- -------- This information is provided by RNS The company news service from the London Stock Exchange

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