MIRA
INFORM REPORT
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Report Date : |
20.08.2008 |
IDENTIFICATION
DETAILS
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Name : |
ZESCO LTD |
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Registered Office : |
P.O Box 33304 Lusaka 9999 |
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Country : |
Zambia |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
1906 |
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Com. Reg. No.: |
1369 Lusaka, Zambia |
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Legal Form : |
State
Corporation |
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Line of Business : |
Generate and Supply Electric Power and Energy |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 400,000 |
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Status : |
Good |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
COMPANY REPORTED
ZESCO LTD
Principal Address
P.o Box 33304 Lusaka 9999,Zambia
Telephone: +260-221342/226859
Fax: +260-1-222753
Email: zesco@zesco.co.zm
/ mchisela@zesco.co.zm
Internet: www.zesco.co.zm
Established
1906
Registered
10/2/1970
Registration
1369 Lusaka,
Zambia
Legal Form
State Corporation
Stock Listing
Not Listed
Workforce
2007
3700
Office & Factories
Head offices Great East Road, Stand No. 6949 Lusaka,
Zambia
Branches Kitwe, Ndola, Livingstone, Kabwe, Choma,
Kasamba in Zambia
Company Profile
Nominal Capital ZMK. 400,000,000
Paid in Capital ZMK. 194,000,000
Shareholders
Name Position Amount
Ratio
Mr. Rhodnie Sisala CEO
Mr. A N Ng’andu Chairman
Mr. Julius
Kampamba Director
Mr. Christopher
Mubemba Director
Mr. B E Ng’andu Director
Mrs. L M Sibanda Director
Government of
Zambia Shareholder 100.00%
Total 100.00%
Credit Opinion
Our proposed
credit amount of USD 400,000 is recommendable
Affiliated Companies
Company (1)
Management/ Directors
President/ CEO (1)
Name Mr. Rhodnie Sisala
Remarks Top
Decision Maker
President/ CEO (2)
Name Mr. Julius
Kampamba
̃ Top decision maker is the person who has the
ultimate authority or power to make important managerial decisions. He/She may
or may not be officially registered as a president or an executive director.
Business Activities
Generate and
supply electric power and energy
Terms of payment
Buying terms 30% in cash, 70% on credit
Selling terms 80% in cash, 20% on credit
Suppliers
Various
Customers
Public
Recent Sales
USD. 233,000,000
(2007)
Exports
Botswana, Drcongo,
South Africa, Zimbabwe
Export Ratio
30.0%
Import Ratio
20.0%
Domestic Market Share
100.0%
Banking relationship
Main Banks
Barclays Bank
Zambia National
Commercial Bank PLC
Standard Chartered
Bank
Auditors
Grant Thornton
Credit Check of Subject,
President & CEO (as of report date)
Payment Morale: In the documents at our disposal nothing adverse has
been shown so far.
CREDIT RATING: Financial
situation is Satisfactory.
COMMENTS
Maximum credit we recommend is USD 450,000 outstanding at any one time.
BALANCE SHEET
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(In
Million ZMK.) |
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2007 |
2006 |
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ASSETS |
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Non – current assets |
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Property, plant and equipment |
3,121,712 |
2,915,555 |
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Current assets |
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Inventories |
46,971 |
67,874 |
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Trade receivables |
419,033 |
353,160 |
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Prepayments and other receivables |
349,216 |
263,809 |
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Bank balances and cash |
42,664 |
93,246 |
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857,884 |
778,089 |
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Total assets |
3,979,596 |
3,693,644 |
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EQUITY AND LIABILITIES |
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Capital and reserves |
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Share capital |
194 |
194 |
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Shares pending allotment |
21 |
21 |
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Revaluation reserve |
1,135,735 |
1,204,118 |
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Retained profits |
438,585 |
526,297 |
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1,574,535 |
1,730,630 |
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Non – current liabilities |
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Long term loans |
693,294 |
528,561 |
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Capital grants and contribution |
405,987 |
254,065 |
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Deferred liabilities |
364,806 |
334,174 |
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Deferred taxation |
55,231 |
119,519 |
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1,519,318 |
1,236,319 |
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Current liabilities |
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Short term loan |
153,584 |
123,897 |
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Trade and other payables |
461,248 |
344,594 |
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Bank overdrafts |
60,316 |
49,780 |
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Taxation payable |
210,595 |
208,424 |
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885,743 |
726,695 |
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Total equity and liabilities |
3,979,596 |
3,693,644 |
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PROFIT AND LOSS ACCOUNT
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For The Year Ended 31 March 2007 |
2007 |
2006 |
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Revenue |
868,725 |
768,915 |
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Cost of sales |
(163,011) |
(149,487) |
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Gross profit |
705,714 |
619,428 |
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Other operating income |
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Amortization of capital grants |
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and capital contributions |
12,702 |
8,732 |
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Interest income |
923 |
1,481 |
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Rental income |
805 |
669 |
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Other income |
27,178 |
19,902 |
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747,322 |
650,212 |
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Depreciation |
(141,831) |
(110,812) |
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Employee remuneration |
(429,672) |
(436,473) |
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Other operating expenses |
(199,420) |
(155,402) |
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Loss before exchange (losses)/gains |
(23,601) |
(52,475) |
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Net exchange (losses)/gains |
(173,335) |
182,696 |
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(Loss)/profit from operations |
(196,936) |
130,221 |
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Finance costs |
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Interest payable on bank overdrafts |
(8,083) |
(4,156) |
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Interest payable on borrowings |
(13,193) |
(6,914) |
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(Loss)/profit before taxation |
(218,212) |
119,151 |
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Taxation recoverable/(charge) |
62,117 |
(76,812) |
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(Loss)/profit for the year |
(156,095) |
42,339 |
CASHFLOW STATEMENT
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For The Year Ended 31 March 2007 |
2007 |
2006 |
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Cash (outflow)/inflow (on)/from operating activities |
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(Loss)/profit before taxation |
(218,212) |
119,151 |
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Interest paid |
21,276 |
11,070 |
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Interest received |
(923) |
(1,481) |
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Unrealized exchange losses/(gains) on long term loans |
173,335 |
(182,696) |
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Profit on sale of assets |
(45) |
- |
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Depreciation |
141,831 |
110,812 |
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Write off of capital work in progress |
- |
4,695 |
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Plant and equipment reclassified |
2,212 |
135 |
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Amortization of capital grants and capital contributions |
(12,702) |
(8,732) |
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Decrease/(increase) in inventories |
20,903 |
(8,635) |
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(Increase)/decrease in trade receivables |
(65,873) |
51,814 |
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(Increase)/decrease in prepayments and other receivables |
(85,407) |
28,503 |
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Increase in trade and other payables |
116,654 |
37,672 |
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Increase in deferred liabilities |
30,632 |
44,136 |
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Net cash inflow from operating activities |
123,681 |
206,444 |
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Returns on investments and servicing of finance |
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Interest received |
923 |
1,481 |
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Interest paid |
(21,276) |
(11,070) |
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Net cash outflow on returns on investments and |
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servicing of finance |
(20,353) |
(9,589) |
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Income tax recovered |
- |
1,450 |
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Investing activities |
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Purchase of property, plant and equipment |
(350,200) |
(360,912) |
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Proceeds from sale of plant and equipment |
45 |
57 |
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Net cash outflow on investing activities |
(350,155) |
(360,855) |
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Net cash flow before financing |
(246,827) |
(162,550) |
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Financing activities |
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Loans received |
135,021 |
458,229 |
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Repayment of loans |
(113,936) |
(348,704) |
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Capital grants and contributions received |
164,624 |
88,158 |
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Net cash inflow from financing activities |
185,709 |
197,683 |
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Increase in cash and cash equivalents |
(61,118) |
35,133 |
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Cash and cash equivalents at 1 April 2006 |
43,466 |
8,333 |
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Cash and cash equivalents at 31 March 2007 |
(17,652) |
43,466 |
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Represented by: |
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Bank balances and cash |
42,664 |
93,246 |
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Bank overdrafts |
(60,316) |
(49,780) |
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(17,652) |
43,466 |
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Exchange Rate |
US$ 1 = ZMK. 3,375.5 |
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.43.72 |
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UK Pound |
1 |
Rs.81.45 |
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Euro |
1 |
Rs.64.47 |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to
assess SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors and their relative weights (as
indicated through %) are as follows:
Financial condition (40%) Ownership background (20%) Payment
record (10%)
Credit history (10%) Market trend (10%) Operational
size (10%)