Case Study 2 – 2019 – Pre-released information - Zim

2019
Professional Competence
Development Programme

CASE STUDY 2

PRE-RELEASED INFORMATION

ZIMBABWE LOCALISED

Disclaimer: All names of persons, places, and business entities mentioned in this case study are purely fictitious
in nature and any resemblance to real people, living or dead, places or business entities are purely coincidental.

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APT PROFESSIONAL COMPETENCE DEVELOPMENT PROGRAMME

CASE STUDY 2
PRE-RELEASED INFORMATION

Item Title Page

Document A Email from Tracey Gabe 3–7
Document B Email from Liam Swanepoel 8
Document C Abridged Financial Information 9 – 10
Document D Email from Lydia Maseko 11
Document E Email from George Dumas 12 – 13
Document F Email from Tracey Gabe 14 – 16
Document G Email from Max Khan from Poultry Partners Ltd 17
Document H Email from Audit Partner 18

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Document A

From: Tracey Gabe > tracey.gabe@ffc.co.zw

To: Liam Swanepoel > CEO@ffc.co.zw
Date: Thursday 2019-01-23 09:22
Subject: Information pack for applicants for senior positions
Attachment: Information for prospective senior employees

Good morning Liam

As per your request, I have put together a document which sets out information to send to
all applicants for the senior positions the company intends to fill over the next few months.
The document is attached to this email.

Kind Regards

Ms. T Gabe
People Manager

ATTACHMENT TO EMAIL

FARM FRESH CHICKENS (PVT) LTD

INFORMATION FOR PROSPECTIVE SENIOR EMPLOYEES

A. THE COMPANY’S HISTORY AND BACKGROUND

In 1973, Liam Swanepoel, the current Chief Executive Officer, took the opportunity to begin
building a business based in the poultry product industry. From the humble beginning of 50
chickens on a small farm near Marondera, Farm Fresh Chickens (Pvt) Ltd (better known as
FFC) grew to a successful vertically-integrated chicken producer with feed mills, a hatchery,
breeder, layer and broiler farms, a research farm, an abattoir, a processing plant and
warehouse (including an egg grading and packing station). This places FFC amongst the
largest producers currently in the poultry market in Zimbabwe.

The expansion over the last four decades is mainly due to inorganic growth through the
steady acquisition of small, independent farms in the Mashonaland East region, where all
operations are based. FFC does not currently have a distribution division and all distribution
services are outsourced to a distribution center in Harare.

Over the last 12 years, FFC has deliberately focused on reducing the reliance on all external
suppliers throughout the production process and on expanding the company’s vertical
integration.

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FFC believes that it is important to control as much of the production process as possible
and has steadily expanded the in-house supply capacity where necessary and possible. For
example, although competitors usually contract out the growing of their broilers to
independent contract chicken growers, FFC grows all of its broilers on its own broiler farms.
The benefits of this strategy include a more efficient supply chain and the ability to manage
and maintain quality levels more actively.

FFC is owned by The Swanepoel Family Trust (55%), Poultry Partners Ltd (25%) and the
FFC Employee Trust (20%).

FFC boasts a state of the art research farm. The farm is part of the research, development
and efficiency (RDE) division which is responsible for keeping FFC at the forefront of science
in the poultry industry as well as up to date with all available knowledge about the industry
and its production practices.

Poultry Partners Ltd bought its 25% share of FFC in 2015 in order to gain access to the
significant benefits which flow from the RDE division of FFC. Poultry Partners Ltd also
recognised the advantages of having direct access to a producer in the Zimbabwean market
as a strategic initiative to balance the skewed demand and supply of breast meat in the
European market with the demand and supply of dark meat in Zimbabwe.

The FFC Employee Trust was formed in 1996 and its shares were awarded to it in that year.

B. BOARD OF DIRECTORS

Chairman and CEO: Mr. Liam Swanepoel

Director and CFO: Ms. Lydia Maseko
Director and Head of IT: Mr. Rajaan Naidoo
Director and Head of Strategy: Ms. Hlengiwe Qwabe CA(Z)
Non-executive Director: Max Khan, Poultry Partners Ltd

C. PRODUCTION PROCESS

FFC uses a hybrid breed in its broiler operations and another hybrid in its commercial layer
operations. FFC has done so since 2011. At that time, the RDE division felt the broiler hybrid
was the most efficient broiler available with a superior feed conversion efficiency, growth
rate, days-to-market and heavy muscling. The layer hybrid was determined to be the most
efficient commercial layer available, known for its good feed conversion ratio, liveability and
consistent high number of quality, strong-shelled eggs. The grandparent stock is imported
from Scotland and guaranteed to have disease-free genetic material.

Eggs are collected from the breeder farms and sent to the hatchery where they are
incubated under controlled temperature and humidity conditions, to ensure an optimal
hatching environment. Once hatched, the chicks are vaccinated against disease and the
day-old chicks (broiler hybrid) are carefully transported to the broiler farms. Day-old pullets
(layer hybrids) are moved to FFC’s layer farms.

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At the broiler and layer farms, the chickens are reared in temperature controlled houses
under the supervision of a team of farm and production managers, health and quality
inspectors and veterinarians. The chickens are fed a very specific diet, the main ingredients
of which are maize (about 50%), specifically formulated protein ingredients, soya beans,
vitamins and minerals. The ingredients are milled and mixed in very specific ratios (based on
the guidance of RDE) at the feeding mills. Antibiotics are administered only when absolutely
necessary and care is taken that relevant regulations are complied with. FFC chickens are
not given any hormones. Animal welfare is important and strict bio-security rules are
followed to prevent the outbreak and spread of avian diseases.

Once the broilers have reached the correct harvest weight, they are sent to the abattoir for
harvest and then to the processing plant for product processing and packaging. Layer hens
produce commercial eggs that are graded and packed at the packing station. All packaged
products are stored in the temperature controlled warehouse, ready for collection and
distribution.

Production and product management

With the sheer size, complexity and number of processes in the company, FFC is managed
under various divisions as well as under the two main product lines (Eggs and Chickens).
Internal sales are made at transfer prices that are agreed upon monthly between buying and
selling divisions. Product line managers have insight into these discussions and approve all
final prices to ensure the end-products are competitive in the market.

Internal sales include the following product lines:

 Feed
 Hatching eggs
 Day-old broiler chicks
 Day-old layer chicks
 Broilers at harvest weight
 Harvested whole chickens
 By-products

D. PRODUCTS

FFC sells a range of products mainly locally. The product mix is determined by the marketing
and operations departments and is based on three factors. The first is the demand for the
various products in the market; the second is the gross profit margin associated with the
particular product; and lastly the yield from the production process. The yield is monitored
closely by the RDE division. The external sales include the following product lines:
 Individually Quick Frozen (“IQF”) whole chickens
 IQF chicken pieces
 Fresh chicken pieces
 Fresh whole chickens
 Prepared chicken
o Crumbed pieces
o Reformed pieces
o Ready-to-eat meals
o Marinated pieces
o Sausages
o Frozen meals (Fryer-ready)

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 Eggs
 By-products from offal (produced throughout the whole production process):
o Poultry by-product meal (used in the production of dog and cat food)
o Fat
o Compost

Although FFC has a diverse range of products, the primary focus has always been on
producing frozen chicken pieces (termed “Individually Quick Frozen” in the industry) for sale
to large retail chains and independent wholesalers. IQF products in the industry are
“commodity like” and carry the lowest profit margins. This is the cheapest category of
chicken product and therefore the majority of consumers fall into the lower income
segments. IQF is the largest market in Zimbabwe – it is the most popular amongst the mass
market and accounts for more than 50% of all chicken sales. The IQF products carry the
most significant exposure to the dumping of foreign excess production.

E. RESEARCH, DEVELOPMENT, AND EFFICIENCY (RDE) DIVISION

With FFC’s commitment to produce top-quality products, the emphasis has always been to
excel through the innovative use of technology. RDE has been key in this regard with FFC
using some of the most advanced technologies available in farming and production
practises.

The research division has been central to the success achieved by FFC during the often
difficult and volatile trading conditions experienced in the industry. Since establishing the
division in 2008, its objectives have been to reduce input costs innovatively, increase
operational efficiency and increase product quality, all whilst ensuring that our chickens are
comfortable and healthy throughout their lifecycle. Although the division has made significant
contributions to the common body of knowledge available on the poultry industry as a whole
and in Southern Africa more specifically, its focus is primarily to develop insights for FFC’s
exclusive use and benefit. This has been crucial in recent years as FFC is under constant
pressure to survive and even gain market share in the turmoil being experienced in the
poultry industry in Zimbabwe.

The RDE mandate does not only include research and development, but also includes
improvement and maintenance of efficiency. After implementation of new processes, RDE is
responsible for the development of standards to be met and the protocol to be followed
within the production process. Continuous measurement, evaluation and monitoring of KPIs
against these standards and protocol are central in realising the efficiencies envisaged
during research and development.

The research division has recently presented the following proposed projects to the board.
- Fly farms to be used to reduce input cost of feed whilst increasing the quality thereof;
- Water management systems and optimisation.
- Creation of new, and refinement of current, KPIs used to monitor, evaluate and
manage performance.
- Breed and genetic optimisation to increase hardiness and production levels.

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Previous projects RDE has worked on have resulted in better mitigation and control of
disease risk, process automation and real-time reporting through various measurement
tools. Current projects include:
 Big data in Poultry
o This project is focused on database building through innovation measurement
techniques and signalling tools and the subsequent analysis and evaluation of data
by data scientists. The project’s objectives are to identify anomalies after detecting
signals falling outside of the normal tolerance levels within the various processes.
The database is built across all operations and various hypotheses are tested
through re-creation of the events and circumstances on the research farm. The
second phase of this project, which is yet to start, is to build an artificial intelligence
system, based on the parameters created from the big data analysis of the first
phase, that can predict and self-adjust the production environment to maintain
optimal production levels.
 Energy production and optimal utilization
o This project’s objective is to create a cost-effective model of a conversion plant which
would utilise biogas and heat produced in FFC’s production processes to generate
the energy required to run an entire site. Additionally, the plant would include
electricity management systems to optimally spread and limit electricity usage.

F. DEVELOPMENT OF SMALL ENTREPRENEURIAL COMPANIES

Notwithstanding the company’s decision to avoid outsourcing wherever possible, FFC has
entered into a number of outsourcing agreements with small entrepreneurial companies.
These companies prepare upmarket chicken products packed with various sauces and
spices such as barbeque packs, chicken kebabs and chicken pieces in marinade.

These agreements were entered into in 2017 with FFC committing itself to Enterprise and
Supplier Development as part of its Social Responsibility Initiative.

The business model is essentially that FFC supplies the entrepreneurs with chicken pieces;
the entrepreneurs manufacture the sauces, package the products and sell the products back
to FFC, which manages distribution.

FFC initially assisted these entrepreneurs with the establishment of their businesses and by
facilitating successful applications for finance to the Industrial Development Corporation.
FFC provided a guarantee on the loans with the Industrial Development Corporation

FFC continues to assist on an ongoing basis in various areas, including:

 General management including developing the owners’ management skills.
 Financial management.
 Staff training.
 Research relating to development and packing of the sauces (RDE).

The entrepreneurs are allowed to engage in other business activities and are therefore not
limited to conducting their operations with FFC only.
FFC also entered into contract growing arrangements with small scale farmers to grow
broiler chickens on behalf of the company. An eight-week cycle is used where the grower
keeps the birds for thirty-three to thirty-eight (33-38) days and the site rests for three (3)
weeks during which cleaning and disinfection is carried out.

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Under the contract, FFC is obliged to:

 provide the day-old chicks and feed,

 provide transport for the day old chicks and feed to the farmer,
 provide vaccines, medication and cleaning chemicals as required, and
 collect birds ready for slaughter
while the grower farmer is obliged to provide the infrastructure, labour, litter, brooding
requirements and water for the birds.
The birds are kept on the grower site and upon achieving target slaughter weight are
collected by FFC. The grower is responsible for the birds from day of receipt till delivery
to FFC processing plant. FFC will slaughter, process, provide refrigeration facilities and
market and sell the final product.
The grower farmer is compensated a pre-determined management fees per bird
delivered for slaughter

--END-

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Document B

From: Liam Swanepoel > CEO@ffc.co.zw

To: Hlengiwe Qwabe > hlengiwe.qwabe@ffc.co.zw
Date: Wednesday 2019-01-29 11:08
Subject: Export of white breast meat to the EU

Good morning Hlengi,

On a recent trip to Bulawayo from Harare, my attention was drawn to an article published in
the Herald entitled “Poultry Industry on High Alert” (https://www.herald.co.zw/poultry-
industry-on-high-alert/)

This article made me realise again that effective mitigation strategy against dumping
requires other measures such as increasing cost effective local production capacity,
increase market surveillance and border controls and not to rely solely on import tariffs.
Although the Zimbabwean government imposed import tariffs on named poultry products
(including fertilised eggs) through statutory instruments, restocking birds after the Aviation
Influenza has left demand of poultry products outstripping supply.

I believe that the sustained economic downturn requires the country to move in the direction
of increased production at lower costs in order to satisfy local demand and also to start
competing in the export markets.
The findings of a study conducted by the Wageningen University in the Netherlands in 2013
found that the cost of a whole-chicken in countries such Brazil, United States, South Africa
and other countries is significantly lower than in Europe. We are aware that consumers in
developed countries, like Europe, are willing to pay premium prices for white breast
portions, which they perceive to be healthier.
As you know, we have a board meeting scheduled for next week and I believe the time has
come for us to brief the board on the necessity of a strategy to mitigate potential dumping
together with growth.
There is still some way to go on this strategy getting the go ahead, but I believe the time is
right to start doing the groundwork to present the foundation of a viable idea to the board at
their next meeting.
Please get started with the groundwork referred to above.
Last thought, the CAGE framework may also help us to identify relevant considerations.

Kind Regards

Mr. L Swanepoel
CEO

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Document C

ABRIDGED FINANCIAL INFORMATION

The abridged draft and unaudited financial results and financial position of FFC for the year
ended 31 December 2018 (FY2018) are summarised in the tables below (FFC prepares its
financial statements in terms of International Financial Reporting Standards (IFRS)):

FARM FRESH CHICKENS (PVT) LTD

STATEMENTS OF PROFIT OR LOSS

Year end: March 2018 2017

Notes $’000 $’000
Revenue 108 778 112 519
Operating expenses (98 851) (102 609)
Earnings before interest, taxation,
depreciation and amortisation (EBITDA) 9 927 9 910
Depreciation, amortisation and (2 261) (2 230)
impairment
Earnings before interest and taxation 7 666 7 680
Interest income 431 304
Finance costs (665) (485)
Profit before taxation 7 432 7 499
Taxation (2 090) (1 983)
Profit for the year 5 342 5 516

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FARM FRESH CHICKENS (PVT) LTD

STATEMENTS OF FINANCIAL POSITION

Year end: March 2018 2017

Notes $’000 $’000
Non-current assets 71 852 70 072
Property, plant and equipment 71 852 70 072

Current assets 43 112 44 356

Inventory 1 10 264 11 424
Biological assets 2 14 372 14 308
Trade and other receivables 16 424 15 720
Cash and cash equivalents 2 052 2 904

Total assets 114 964 114 428

Ordinary share capital 20 391 20 391

Retained income 24 337 19 773
Total equity 44 728 40 164

Non-current liabilities 29 473 31 256

Long-term loans 17 928 19 979
Deferred taxation 11 545 11 277

Current liabilities 40 763 43 008

Short-term portion of long-term loans 6 668 6 068
Taxation 2 086 1 854
Trade and other payables 32 009 35 086

Total equity and liabilities 114 964 114 428

Notes to the abridged financial information

1 Inventory comprises feed raw materials, harvested chicken, eggs and processed
products. Harvested chicken and eggs are transferred from biological assets to
inventory at the date of harvesting.

2 Biological assets comprise chicken breeding stock (which includes grandparent

breeding, parent stock and hatching eggs), live broiler birds (which include day old
chicks) and layer stock (which also include day old chicks and commercial eggs).

Broiler birds are harvested after approximately 7 to 10 weeks (depending on when

they reach the correct harvest weight). For breeding and layer stock, egg production
starts at approximately 23 weeks of age, and the breeding period lasts until +/-week
64, whereafter the spent hens are harvested for salvage value.

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Document D

From: Lydia Maseko > CFO@ffc.co.zw

To: Jabu Morema > jabu.morema@ffc.co.zw
Date: Thursday 2019-01-30 06:52
Subject: Accounting policy for biological assets

Morning Jabu

A few days ago, I was speaking to some of my accountant friends who also work in the
industry, when the issue of accounting for biological assets came up for discussion. After
our chat, I realised we might need to relook our accounting policy for biological assets. I am
getting anxious just thinking about the fact that we need to change our policy!

Then we have been very slow in assessing the impact of the new financial instruments
standards on our financial statements. The draft financial information for FY2018 still
reflects the old financial instruments treatment. My accountant friends in the industry are
well ahead of us. I also heard of some changes to the tax allowances as a result of IFRS 9.
I will need your urgent assistance.

This is just a heads up at this point – I think we need to investigate and update urgently
where necessary. I’ll be sending through our draft 2018 reporting pack shortly for your
review. What I also want to prevent is a repeat of the difficult issues which were raised by
the auditors during last year’s finalisation of the audit meeting. I clearly need to brush up
again on how the auditors evaluate misstatements identified during the audit and how
misstatements could affect their audit opinion. I may need your input in this regard.

Chat soon,

Kind Regards

Ms. L Maseko
CFO

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Document E

From: George Dumas > george.dumas@ffc.co.zw

To: Lydia Maseko > CFO@ffc.co.zw
Date: Thursday 2019-01-30 08:30
Subject: Feed prices and margins

Dear Lydia

I wonder if you can help us here. As you know we have traditionally supplied feed to the
Broiler Farm Division (BFD) but after we sent them notification of a proposed 15% price
increase, they have indicated to us that they intend to source their feed from outside the
group. I immediately indicated to the manager of the Broiler Farms Division, Jan Draai, that
this would not be in the interests of FFC and he responded as follows:

“George you need to remember that FFC has a transfer pricing policy which is based on
market price which means, as I understand it, that we are free to buy our feed from
whoever we choose at the lowest price. BFD is currently paying you a weighted average
price of $0,69 per kg of feed. So, for comparative purposes, I asked Meadow Feeds to give
us a quote. Meadow Feeds have come up with a very competitive price of $0,65 per kg
which they will hold for six months limited to a 10% increase for the following six months.
Rumour has it that they have spare capacity and so their prices are ultra-competitive as
they are looking at ways to fill their order books. This is really good as lower costs mean
more profit for the BFD and FFC as a whole. Their feed contains fish meal which lowers
the cost and their feed conversion rate (FCR) is pretty close to yours.

The cost pressure on BFD is huge as our mortality rate has increased while the number of
annual production cycles has decreased. There is simply no way that we will be in a
position to find the money for an increased feed price.”

So clearly Jan does not understand our position or what is in the interests of FFC. Below
are the detailed projected costs per metric ton (1000 kgs) of broiler feed. Selling prices are
determined by the market and these cost estimates suggest that we will be left with only a
small 10% margin. The 15% increase in selling price is the first increase since April 1, 2018.
While this increase seems dramatic, the annualised increase is much less so. It is also
important to remember that while feed prices are susceptible to general inflation, they are
also susceptible to the price volatility associated with the core ingredients. In the past year
or so, maize prices have stabilised before declining as the nationwide drought abated.

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Raw Materials Cost per ton Mix Total

Yellow Maize US$ 192 50% US$96
Starter Grower Concentrate US$ 473 50% US$236
US$332
Direct Labour US$138
Direct Overhead US$42
Total variable production cost US$512
Fixed Manufacturing Overhead US$104
Total Manufacturing Cost US$616

Bagging in 50kg bags US$84

Delivery costs US$21
Total cost per ton US$721

New selling price per ton to cooperatives US$794

Margin 9.99% US$72

FFC Group Position

70% of our broiler feed production is transferred to the Broiler Farming Division and no
bagging costs are incurred on internal transfers. The other 30% is bagged and sold to the
farming cooperatives for small scale broiler farming. Currently we have no spare capacity
and although untested, we don’t believe that we could sell any more of our broiler feed to
the farming cooperatives as demand from the small scale broiler farmers appears to be
limited. Thus if BFD drop their demand, we would end up with spare capacity.

Finally, there is the issue of quality and supply chain reliability. The suggested alternative
from Meadow Feeds contains fishmeal which is much cheaper than Soya. But the risk is
that the fishmeal permeates the flavour of the broiler with disastrous consequences for
FFC! In addition, their FCR (kgs of feed used for every kg of chicken produced) is, as we
understand it, significantly worse than ours which is laboratory certified at 1.6384 times.
We also supply in bulk directly to the farms with the shortest lead times in the industry. We
doubt if Meadow Feeds could come close to matching our lead times.

So, we are confident that the proposed price of $794 per ton for Broiler Feed is both fair
and in the interests of FFC as a whole. Would you be able to convene a meeting between
the three of us so we can take this matter forward and reach an amicable mutually
advantageous position for all?

Kind Regards

George Dumas
Feed Manager

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Document F
From: Tracey Gabe > tracey.gabe@ffc.co.zw
To: Lydia Maseko > CFO@ffc.co.zw
Cc: Jabu Morema > jabu.morema@ffc.co.zw
Date: Thursday 2019-01-03 08:01
Subject: Employee Incentive/Retention Scheme
Attachment: January 2019 Extract from Statement from LIBSTAN

Hi Lydia and Jabu

This is is important because the ITF16 is due end of January although the annual Income
Tax Return (ITF 12C) is only due in April.
Lydia:
As you are aware, we implemented a new Employee Incentive/Retention Scheme from last
year.
Jabu: You might not yet be familiar with the Scheme
In August 2018, the Remuneration Committee decided upon monetary incentives to be
awarded to various Key Employees. These incentives were determined by the Committee
evaluating actual performance during 2018 against Key Performance Indicators decided
upon at the beginning of the year.
These incentives are over and above the employees’ normal Annual Bonuses but, however,
will not be paid to the employees concerned until August 2021 and then, only provided that
the employees concerned are still in the employ of Farm Fresh at August 2021 and have
completed the three year service period satisfactorily.
These incentives were then invested in a suitable Investment Instrument through LIBSTAN
which keeps track of the amount relating to each employee. The final amount, including
accumulated returns on the investment will be paid out to the employees in August 2021.
The issue:
We have recently received queries from a number of employees concerning why the tax
effects of the amounts awarded under the scheme are not reflected on their salary advice
slips as they fear that there could be a lumpsum tax deduction at the end of 2021. They also
want to know whether or not they will need to disclose the amounts on their forms (ITF1),
when these returns become due.
A related thought affecting the Company that crosses my mind is that, once a year, you guys
ask me to prepare a very detailed ITF16 return. So, I am wondering “Now that we have done
the payroll, how do I reflect the Scheme amounts on the ITF 16?”
I have attached an extract from the latest LIBSTAN statement.

Kind Regards

Ms. T Gabe
People Manager

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ATTACHMENT TO EMAIL

EXTRACT FROM MAY 2019 STATEMENT FROM LIBSTAN

L IB S TAN
Farm Fresh Chickens Pty Ltd Investor Name: Farm Fresh Chickens Pty Ltd
PO Box 1234 Investor Number: 1287564
VAN ZYLSRUS Statement Date: 25/01/2019
2102 Pages: 8
LIBSTAN Unit Trusts (Note to candidates) Pages 2 - 8 not included
Investor Statement
Reporting Currency: Dollar For the period 26/7/2018 to 25/01/2019
Investment Summary
Account Fund Account Designation Amount Interest ZIM Market Closing Closing Price Closing
Number Invested Dividends Value Units Market
Grand Total LIBSTAN Conservative Balanced Fund All Accounts 273,000.00 4,066.56 2,502.50 643.19 280,672.35 9.9836 280,212.25
5531879412 LIBSTAN Conservative Balanced Fund E Mpengezi 6,000.00 89.38 55.00 14.14 6,168.62 9.9836 6,158.51
5531879413 LIBSTAN Conservative Balanced Fund T Gabe 7,000.00 104.27 64.17 16.49 7,196.73 9.9836 7,184.93
5531879414 LIBSTAN Conservative Balanced Fund J Draai 9,000.00 134.06 82.50 21.20 9,252.93 9.9836 9,237.77
5531879415 LIBSTAN Conservative Balanced Fund A Elsieve 8,000.00 119.17 73.33 18.85 8,224.83 9.9836 8,211.35
5531879416 LIBSTAN Conservative Balanced Fund L Trimmer 4,500.00 67.03 41.25 10.60 4,626.47 9.9836 4,618.88
5531879417 LIBSTAN Conservative Balanced Fund W Hawes 3,000.00 44.69 27.50 7.07 3,084.31 9.9836 3,079.26
5531879418 LIBSTAN Conservative Balanced Fund U Achmat 6,000.00 89.38 55.00 14.14 6,168.62 9.9836 6,158.51
5531879419 LIBSTAN Conservative Balanced Fund NK Mazibuko 5,500.00 81.93 50.42 12.96 5,654.57 9.9836 5,645.30
5531879420 LIBSTAN Conservative Balanced Fund T Mereeotlhe 4,500.00 67.03 41.25 10.60 4,626.47 9.9836 4,618.88
5531879421 LIBSTAN Conservative Balanced Fund P Murulana 5,000.00 74.48 45.83 11.78 5,140.52 9.9836 5,132.09
5531879422 LIBSTAN Conservative Balanced Fund A Olckers 4,000.00 59.58 36.67 9.42 4,112.42 9.9836 4,105.67
5531879423 LIBSTAN Conservative Balanced Fund V Mustapha 5,500.00 81.93 50.42 12.96 5,654.57 9.9836 5,645.30
5531879424 LIBSTAN Conservative Balanced Fund N Baloyi 5,000.00 74.48 45.83 11.78 5,140.52 9.9836 5,132.09
5531879425 LIBSTAN Conservative Balanced Fund S Shabalala 5,000.00 74.48 45.83 11.78 5,140.52 9.9836 5,132.09
Page Sub-Total 78,000.00 1,161.88 715.00 183.77 80,192.10 139.77 80,060.64

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Document G

From: Max Khan > max.khan@poultrypartners.co.zw

To: Lydia Maseko > CFO@ffc.co.zw
Cc: Tracey Gabe > tracey.gabe@ffc.co.zw;
Jabu Morema > jabu.morema@ffc.co.zw
Date: Thursday 2019-01-30 12:55
Subject: RE: Information pack for applicants for senior positions

Good morning Lydia

Your email with the information pack for senior positions is noted. I’ll keep an eye for good
talent and pass this on. We at Poultry Partners are also on the look-out for great talent, so if
you come across some good applicants, please pass those on to me.

Upon reading your section F on the DEVELOPMENT OF SMALL ENTREPRENEURIAL

COMPANIES, I anticipate that you and your auditors might have conflicting views regarding
the consolidation of the small entrepreneurial companies. These accounting standards keep
us busy and now I understand we need to start considering the impact of this new lease
standard, IFRS 16. As far as I recall, FFC has not done much yet on IFRS 16 and will need
to get cracking soon.

Kind Regards

Max Khan
CFO

Poultry Partners Ltd

17 Copyright © Accounting Professional Training (Pty) Ltd 2019

 Case Study 2 – 2019 – Pre-released information - Zim

Document H

From: Kerabo Siaga > kerabo.siaga@abcauditors.co.zw

To: Lydia Maseko > CFO@ffc.co.zw
Date: Thursday 2019-01-30 14:01
Subject: Audit planning

Hi Lydia

Thank you for your phone call yesterday. Sorry that there was not enough time to answer all
your questions regarding the planning of the audit. I suggest that we meet in the coming
week in order to take the discussion further. There is often a lack of understanding of
important concepts such as risk assessment, materiality, material misstatement, audit
approach, and the process we follow in order to develop our audit strategy and audit plans.

Also, just to let you know that in the next week one of my team members will perform some
more risk assessment procedures in order to obtain an understanding of all of the controls
related to the complete production process. We will then use that as a basis when we
develop our audit plans.

Kind Regards

Ms. K Siaga
Audit partner
ABC Auditors Incorporated

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18 Copyright © Accounting Professional Training (Pty) Ltd 2019