Assessment from the Zambia Revenue Authority ("ZRA")
Zambeef (AIM: ZAM), the fully integrated agri-business with operations in Zambia, Nigeria and Ghana, announces that it has received a letter from the ZRA (dated 24 January 2012 and received by Zambeef on 31 January 2012) (the "Notice"), which states that there is an outstanding tax liability relating to Zamanita Limited ("Zamanita"), the Company's wholly owned subsidiary involved in edible oil seed crushing, importing and processing.
On 21 June 2010, the ZRA undertook an audit of Zamanita and advised that the tariff code on importation of palm oil being applied was incorrect and further advised of the correct tariff code to be applied, which attracted a higher rate of duty. Furthermore, the ZRA also advised that the revised rate of duty should be backdated to the time Zambeef acquired Zamanita in January 2008.
Following subsequent discussions with ZRA, an assessment of ZMK 56.5 billion (approximately US$ 11.8 million) was issued by the ZRA on 27 October 2010, which included duties, taxes and penalties.
In light of this assessment, Zamanita made an appeal to the ZRA, which resulted in the above assessment being set aside and the Commissioner General of the ZRA, in a letter dated 15 December 2010, issuing a full and final demand of ZMK 8.7 billion (approximately US$ 1.9 million) (the "Settlement"), which was paid in by Zamanita in instalments over a six month period, ending May 2011, at which point the matter was considered closed.
The Notice overturns the full and final settlement decision of the Commissioner General dated 15 December 2010 and issued in its place an assessment of ZMK 54.6 billion (approximately US$ 10.7 million) which is the original assessment plus accrued interest less the Settlement paid to ZRA of ZMK 8.7 billion (approximately US$ 1.9 million).
The board of directors of Zambeef will take all measures to appeal this assessment and further announcements on any future developments will be advised in due course.
For further information, please contact:
Zambeef Products plc
Francis Grogan, Chief Executive Officer
Tel: +260 (0) 9 7799 9001
Yusuf Koya, Executive Director
Tel: +260 (0) 9 7799 9100
Strand Hanson Limited
Tel: +44 (0) 20 7409 3494
Panmure Gordon (UK) Limited
Tel: +44 (0) 20 7459 3600
Renaissance Capital Limited
Tel: +44 (0) 20 7367-7777
Tel +260 (211) 220 707
Tel: +44 (0) 20 7466 5000
Notes to Editors
The Zambeef Group is one of the largest integrated agri-businesses in Zambia, involved in the primary production, processing, distribution and retailing of beef, chickens, pork, milk, eggs, dairy products, fish, flour, bread, edible oils and stock feed, throughout Zambia and the surrounding region, as well as Nigeria and Ghana. The Group is also one of the largest cereal row cropping operations in Zambia, with approximately 8,000 Ha of irrigated land and approximately 9,000 Ha of dry land, available for planting each year. The Group has approximately 4,750 employees.
Further information can be found on www.zambeefplc.com
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