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A. INTRODUCTION

It is Zanacos core Corporate Social Responsibility (CSR) to take into account its economic, social and environmental impact and itsobligation to employees and the local community. Zanaco strives to promote sustainable development of the communities in whichthe Bank operates not just for the present but for future generations as well.

Zanacos CSR engagements in 2013 include:

Financial education for various target groups under the programme dubbed Financial Fitness. Community engagement and support through Strategic partnerships and direct community support around health, education,environment, water and sanitation.

B. CSR ACTIVITIES

1. Financial Fitness One of Zanacos priority areas is providing financial education to various segments of society to help improve personal financialmanagement and promote improved knowledge of banking products and services in order to create greater confidence in use bycitizens. This is in pursuit of complementing Government efforts in attaining the Millennium Development Goal (MDG) on eradicatingextreme poverty and hunger. Target groups reached in 2013 include small scale and emergent farmers, SMEs, Children, youths andthe general adult population.

Zanaco trained 762 farmers in personal financial management and entrepreneurship. Trainings were conducted in collaborationwith Zambia National Farmers Union (ZNFU) through the District Farmers Associations (DFAs) and Dairy Association of Zambia (DAZ).The trainings promote commercialisation of small scale agriculture and diversification of the rural economy. The total number trainedto date is 2,693.

During the year, 418 SMEs were trained by the bank to enhance business skills and promote integrity in business management.Some training focused on building capacity of business owners and managers in the construction and mine suppliers sector. TheBank has trained 4,490 SMEs to date.

As Zanaco we believe that to achieve meaningful and sustainable impact in financial education, individuals need to be introducedto such concepts early in life. Zanaco takes pride in providing financial education to children and youth through various avenuesthat include institutions of learning such as schools and universities. Financial education was provided to 5,841 children and youthbringing the total number reached to date to 22,275. Basic financial literacy concepts introduced include spending money wisely,saving, budgeting, borrowing, banking services and financial planning.

Zanaco recognises the need to reach all citizens especially rural and low income groups. Financial and consumer educationprogrammes were designed and aired on Radio 1 in all 7 major local languages..

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2. Community engagement and support

Zanaco continues to support and undertake community engagements

around the country in pursuit of solutions to national issues such as

education, health, environment, water and sanitation. The bank leverages

its resources through partnerships and engagement of members of staff

in various locations.

i) Raising literacy levels among early grade learners:

Zanaco in partnership with Read To Succeed Project a USAID funded

project and the Ministry of Education, Science, Vocational Training and

Early Education supported 110 primary schools in Muchinga province

with Reading Tools in a Box. The objective is to improve early grade

literacy among grade 1 to 4 pupils through provision of reading and

teaching materials packaged as reading tools in a box. This support

complements Governments efforts in achieving the MDG on universal

primary education with emphasis on quality. The partnership was

launched by Hon. Dr. John T. N Phiri Minister of Education, Science,

Vocational Training and Early Education who emphasised the need to

raise literacy levels in the country which are currently very low thereby

affecting the performance of scholars in other subjects.

ii) Promoting green and clean energy

Zanaco in partnership with Empowered by Light Foundation a US based

charity establishment funded a solar powered micro grid for Sioma High

School in Sioma District of Western Province. The focus was on

preservation of the environment through provision of clean energy and

improving the learning environment for rural pupils. This support is in

line with the MDG on ensuring environmental sustainability. Sioma

District is currently not connected to the national electricity grid and

therefore the solar micro grid replaced diesel generators which were

costing the government K135,000 per year in polluting diesel. The solar

powered micro-grid also has battery back-up storage to enable power

run at night. Teachers and 600 boarding students now have clean and

green power.

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iii) Promoting entrepreneurship among studentsThe partnership with the University of Zambia focuses on co-operation

in the implementation of a capacity building project on financialeducation and infrastructure development for the field station in the

School of Agricultural Sciences. The financial education andentrepreneurship training module to be developed will form part of

one of the courses provided.

iv) Improving access to water and sanitationDuring the period under review Zanaco supported Mwapona

Community School in Choma District with water and sanitation relatedsupport. The school is currently using 2 pit latrines servicing 634

students at a toilet pupil ratio of 1: 317. With the completion of theproject, the school will have 12 sanitation points reducing the toilet

pupil ratio to 1: 53. The support is focused on installation of waterreservoirs and provision of plumbing materials to enable the school

have waterborne toilets. The total number of communities previouslysupported with various water installations is 6.

v) Supporting quality health care

Zanaco donated a neonatal resuscitation unit and 10 mattresses toNakonde General Hospital in supplementing Government efforts to

attain the MDG on equitable access to quality health care with emphasison reducing under five mortality rates.

vi) Staff engagement

Our members of staff participate in CSR community engagementthrough identification and recommendation of communities requiringsupport. The school Financial Fitness programme is rolled out throughour branches where schools are adopted and provided with training

materials. Zanaco members of staff have participated in Job shadowingfor pupils and facilitating branch visit for pupils. During the World

Savings day, the Bank provided an opportunity for every member ofstaff to mentor a child on saving through provision of piggy banks.

C. CONCLUSIONZanaco continues to value input towards Corporate Social Responsibility.

We believe it is not only the way of giving back to societybut a way of doing business.

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Section 164(6) of the Companies Act, 1994 (as amended) requires the Directors to prepare financial statements for each financial yearwhich give a true and fair view of the state of affairs of the Bank and of the profit or loss for that period.

The Directors are responsible for the maintenance of adequate accounting records and the preparation and integrity of the annualfinancial statements and related information. The Independent external auditors, Messrs Deloitte & Touche, have audited the annualfinancial statements and their report is shown on page 39. The Directors are also responsible for the systems of internal control. These are designed to provide reasonable, but not absoluteassurance as to the reliability of the financial statements and to adequately safeguard, verify and maintain accountability for assetsand to prevent and detect material misstatements. The systems are implemented and monitored by suitably trained personnel withan appropriate segregation of authority and duties. Nothing has come to the attention of the Directors to indicate that any materialbreakdown in the functioning of these controls, procedures and systems has occurred during the year under review.

The annual financial statements are prepared on a going concern basis, nothing has come to the attention of the Directors to indicatethat the bank will not remain a going concern in the forseeable future.

In the opinion of the Directors:

The profit and loss account is drawn up so as to give a true and fair view of the profit of the Bank for the financial year ended 31December 2013;

The statement of financial position is drawn up so as to give a true and fair view of the state of affairs of the Bank as at 31 December2013;

There are reasonable grounds to believe that the Bank will be able to pay its debts as and when they fall due; and

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and in themanner required by the Companies Act, 1994 (as amended) and the Banking and Financial Services Act,1994 (as amended).

_______________________ _______________________Director Director

_______________________ _______________________Director Secretary

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To the members ofZambia National Commercial Bank Plc

We have audited the accompanying financial statements of Zambia National Commercial Bank Plc, which comprise the statementof financial position as at 31 December 2013, and the statement of profit or loss and other comprehensive income, statement ofchanges in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and otherexplanatory information.

Directors responsibility for the financial statements

The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with InternationalFinancial Reporting Standards, and in the manner required by the Banking and Financial Services Act, 1994 (as amended), and theCompanies Act, 1994 (as amended), and for such internal control as management determines is necessary to enable the preparationof financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevantto the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of Zambia National Commercial Bank Plcas at 31 December 2013, and of its financial performance and cash flows for the year then ended in accordance with InternationalFinancial Reporting Standards, and in the manner required by the Banking and Financial Services Act, 1994 (as amended) and theCompanies Act, 1994 (as amended).

Report on other legal requirements

The Companies Act, 1994 (as amended) under section 173 (3) requires that in carrying out our audit, we consider and report to youon the following matter: We confirm that, in our opinion, the accounting and other records and registers have been properly keptin accordance with the Act.

In accordance with section 64 (2) of the Banking and Financial Services Act, 1994 (as amended), we report that in our opinion:

We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for thepurposes of our audit;

We are not aware of any transaction that has not been within the powers of the Bank or which was contrary to the Act;

The Bank has complied with the provisions of this Act and the regulations, guidelines and prescriptions under this Act; and

There is no non-performing or restructured loan owing to the Bank whose principal amount exceeds 5% of the regulatory capitalof the Bank.

DELOITTE & TOUCHE

C. CHUNGUPARTNER Date: 24 February 2014

new 2013 Annula Report 24.0annual report PART 2 25.02.