NATIONAL BREWERIES PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2009
National Breweries Plc
Annual Report and Financial Statements
for the year ended 31 March 2009
Table of contents
Page
V...
National Breweries Plc
Vision, mission and values
for the year ended 31 March 2009
OUR NEW VISION, MISSION AND VALUES
Our ...
National Breweries Plc
Company Financial Review
for the year ended 31 March 2009
Year
Year
Year
Year
ended
ended
ended
en...
National Breweries Plc
Chairman’s Statement
for the year ended 31 March 2009
Financial Performance
I am pleased to report ...
National Breweries Plc
Chairman’s Statement (continued)
for the year ended 31 March 2009
advantage and we strive to improv...
National Breweries Plc
Managing Director’s report
for the year ended 31 March 2009
Operating and economic environment
The ...
National Breweries Plc
Managing Director’s report (continued)
for the year ended 31 March 2009
We have achieved pre-tax pr...
National Breweries Plc
Sustainable development report
for the year ended 31 March 2009
Because Sustainable Development is...
National Breweries Plc
Directors’ Report
for the year ended 31 March 2009
The Directors present their report and the audit...
National Breweries Plc
Directors’ Report (continued)
for the year ended 31 March 2009
Exports
The Company exported Top One...
National Breweries Plc
Directors’ Report (continued)
for the year ended 31 March 2009
Ultimate parent company
The ultimate...
National Breweries Plc
Statement of Directors’ Responsibilities
for the year ended 31 March 2009
The Zambia Companies Act ...
REPORT OF THE INDEPENDENT AUDITOR
TO THE MEMBERS OF NATIONAL BREWERIES PLC
Report on the financial statements
Pricewaterh...
Report on other legal requirements
The Zambia Companies Act requires that in carrying out our audit we consider whether th...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Financial Statements
for the year ended 31 March 2009
(all amounts are in millions of kwacha unless...
National Breweries Plc
Principal shareholders and share distribution
For the year ended 31 March 2009
Principal shareholde...
National Breweries Plc
Directorate and Corporate Information
For the year ended 31 March 2009
CHAIRMAN
V Chitalu *
DIRECTO...
NOTICE OF THE ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 41st ANNUAL GENERAL MEETING of NATIONAL
BREWERIES PLC...
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National Breweries PLC Zambia 2009 FY results

National Breweries PLC Zambia 2009 FY results
Published on: Mar 3, 2016
Published in: Investor Relations      Business      Economy & Finance      
Source: www.slideshare.net


Transcripts - National Breweries PLC Zambia 2009 FY results

  • 1. NATIONAL BREWERIES PLC ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2009
  • 2. National Breweries Plc Annual Report and Financial Statements for the year ended 31 March 2009 Table of contents Page Vision, mission and values 1 Company financial review 2 Chairman’s Statement 3-4 Managing director’s report 5-6 Sustainable development report Directors’ report Statement of directors’ responsibilities Report of the independent auditor 7 8 - 10 11 12 - 13 Financial statements: Profit and loss account 14 Balance sheet 15 Statement of changes in equity 16 Cash flow statement 17 Notes 18 – 33 Principal shareholders and share distribution 34 Directorate and corporate information 35 Notice of annual general meeting 36
  • 3. National Breweries Plc Vision, mission and values for the year ended 31 March 2009 OUR NEW VISION, MISSION AND VALUES Our Group vision is to be the most admired company in the global beer industry, by being the • Investment of choice • Employer of choice • Partner of choice MISSION Our Mission is to be the most admired and respected company as judged by our stakeholders. VALUES Our people are our enduring advantage • • • • The calibre, passion and commitment of our people set us apart We value and encourage diversity We select and develop people for the long term Performance is what counts Accountability is clear and personal • • • • • We favour decentralised management and practical maximum local autonomy Goals and objectives are aligned and clearly articulated We prize both intellectual rigor and emotional engagement We are honest about performance We require and enable self-management We work and win in teams • • • • We actively develop and share knowledge within the group We consciously balance local and group interest We foster trust and integrity in internal relationships We encourage camaraderie and a sense of fun We understand and respect our customers and consumers • • • • We are endlessly concerned with our customers’ needs and perceptions We build lasting relationships, based on trust We aspire to offer the preferred choice of products and services We innovate and lead in a changing world Our reputation is indivisible • • • • Our reputation relies on the actions and statements of every employee We build our reputation for the long term We are fair and ethical in all our dealings We benefit the local communities in which we operate W J Tiedt Managing Director 8 June 2009 1
  • 4. National Breweries Plc Company Financial Review for the year ended 31 March 2009 Year Year Year Year ended ended ended ended 31 March 31 March 31 March 31 March 2009 2008 2007 2006 Year ended 31 March 2005 Year ended 31 March 2004 K Million Gross turnover 264 983 177 416 168 908 154 414 116 016 65 116 Product taxes/excise duty (76 331) (54 059) (51 523) (46 902) (37 798) (19 459) Net turnover 188 652 123 357 117 385 107,512 78 218 45 657 Profit before taxation 37 514 35 323 41 025 36 879 25 224 15 464 Profit after taxation 23 814 22 377 26 401 23 192 16 277 10 340 Non current assets 31 264 21 012 16 722 11 864 8 517 5 429 Net current (liabilities)/assets (7 187) 3 179 9 017 12 133 19 174 16 040 Deferred income tax (4 473) (2 886) (2 382) (1 881) (1 101) (532) Shareholders interest (19 604) (21 305) (23 196) (21 616) (25 986) (20 500) Kwacha Earnings per share 377.99 355.18 419.06 368.12 258.38 164.13 Dividends per share 377.99 355.18 419.06 368.12 258.38 164.13 30,000 250,000 25,000 Kwacha (M illions) Kwacha (Millions) 300,000 200,000 150,000 100,000 50,000 - 20,000 15,000 10,000 5,000 - 2004 2005 2006 2007 2008 2009 2004 Gross Turnover 2005 2006 2007 2008 Profit afte r taxation 2 2009
  • 5. National Breweries Plc Chairman’s Statement for the year ended 31 March 2009 Financial Performance I am pleased to report to our shareholders that the Company posted good results for the year improving on previous year’s performance. The Company regained its lost share of the market and record volumes were reported in this financial year. Our strategy to price aggressively coupled with a well managed distribution network, yielded positive results. Investment in technical areas ensured that our product quality was consistent in line with our mission. The Company did face challenges, however, in the form of high commodity prices in particular crude oil. This resulted in high fuel prices adversely affecting our distribution costs. The weakening of the kwacha in the second quarter put pressure on certain input costs further eroding our trading margin. Despite all this, the Company came out with a reasonable performance adding more value to shareholder investment. The opaque beer industry will continue to be highly competitive. The Company captured lost share in 2008 to end the year in a reasonable position. The Company’s objective will be to maintain its position and add to the current growth while meeting customer expectations with a quality product and service delivery of the highest calibre. Key Results Pre-tax profit of K 37,514 million for the year (2008: K 35,323 million) up 6.2% Gross turnover increase of 49.4% compared to previous year Earnings per share of K377.99 (2008: K355.18) The Company continues to be debt free An interim dividend of K220.93 (2008: K171.11) was paid in February 2009 A proposed final dividend of K157.06 bringing total dividends for the year to K377.99 (2008: K355.18) Dividends An interim dividend of K220.93 per share was paid during the year. A final dividend of K157.06 per share is recommended for approval at the annual general meeting which will be paid by 31 August 2009. This will be paid to ordinary shareholders registered at close of business on 30 June 2009. This represents 100% distribution of profits. Corporate Governance The existence of good corporate governance principles is important in running an organisation. The Company’s Board of Directors and Audit Committee continue to set high standards of Corporate Governance. The Company continues to adhere to the Listing Rules and Securities Rules as enforced by the Lusaka Stock Exchange and Security and Exchange Commission respectively. The Company has also continued to comply with principles on corporate governance and internal control as set out in the Combined Code and Turnbull Report. The Company is part of a large multinational group that provides considerable support in ensuring that high standards of corporate governance are maintained. The Company has made tremendous strides in instilling a change of work ethic throughout the business. Employees are always encouraged to execute their duties with due diligence, honesty and integrity. Through the Integrity Club formed in 2006, the Company has received positive response from employees in the fight against fraud. Human Resource The Company made key recruitments during the year in line with our strategy of Strategic People Resourcing (SPR). As per our mission statement, people are our enduring 3
  • 6. National Breweries Plc Chairman’s Statement (continued) for the year ended 31 March 2009 advantage and we strive to improve staff welfare all the time. This is in line with our objectives and goals. Training continues to be a key part our strategy; equipping staff with latest technologies ensuring that we are always ahead of our competitors. We continue to train more peer educators within the business and maintain zero tolerance towards stigmatisation. The Company remains one of the few that procure anti-retroviral drugs for affected employees. We encourage employees to undergo voluntary testing and counselling and a centre is available within the Company premises. A challenging year lies ahead for every business in the wake of the current economic conditions and depressed commodity prices, in particular copper. I have all the confidence that, with the team available, the Company will be guided professionally and wisely. In conclusion, I thank the Managing Director, Management, staff and the Board of Directors for their support and efforts during this challenging year and I look forward to more success in the 2010 financial year. V Chitalu Chairman 8 June 2009 4
  • 7. National Breweries Plc Managing Director’s report for the year ended 31 March 2009 Operating and economic environment The Zambian economy continued to show growth during the first quarter of the financial year with copper prices at their peak. This had an impact on all sectors of the economy as production volumes in the mining industry resulted in excess liquidity and a stronger Kwacha. The Country’s economy experienced uncertainties at the beginning of the second quarter following the President’s illness and eventual death. This caused panic in the financial markets as foreign investors rushed to change their portfolio mix and notably the Kwacha started to depreciate rapidly. The world economy collapsed with most nations admitting that a recession was imminent. This did not help the cause locally and commodity prices tumbled as global demand stalled. This impacted the mining industry adversely resulting in massive job cuts and closure of some mines. The stock market suffered a similar fate and share prices fail reversing gains achieved earlier in the year. Surprisingly, the property market continued to hold with reasonable gains being posted. Crude oil prices had mixed results after reaching the US$ 140 per barrel mark putting more pressure on world economies as the cost of production and distribution increased substantially. The Zambian economy was not spared with fuel prices hitting the US$3 dollar per litre mark in mid September 2008. In the agriculture sector, the flooding experienced in late 2007 and early 2008 resulted in a shortage of the maize crop. This sent prices rocketing, doubling on previous year’s levels. The annual inflation rate increased from 9.8% in March 2008 to 13.1% in March 2009, comprising 6.8% food inflation and 6.3% non-food inflation. The annual food inflation increased to 13.9% from 9.1% in March 2008. Annual non-food inflation followed a similar trend rising from 10.4% in March 2008 to 12.3% in March 2009. The Zambian Kwacha has depreciated following the collapse of the copper price on the world market. The local currency reached peak levels of K3,200 in June 2008 to close at K5,620 in March 2009. Performance The Company has posted good results on the back of economic challenges highlighted above. The weakening Kwacha resulted in rise in input costs in particular packaging and energy costs. Soaring maize prices increased production costs and the effect of high fuel prices cannot go without mention. The Company met these challenges with well planned distribution strategies and competitive pricing not undermining consistent quality in the production process. The Company posted record volumes establishing itself in the market and regaining lost share to end the year strongly. Whilst we recorded a double digit growth in gross turnover, operating profit did not follow suit due to increased costs as explained above. Our strategy to grow packed beer volume continued with a strong performance out of the total portfolio. Despite the uncertainty and speculation surrounding the mining industry, the Copperbelt recorded good volume. In ensuring that we produce a consistent quality product, the Company continues to maintain its equipment to the highest levels through planned and preventative refurbishment. Our electronic process monitoring continues at all our production plants and this is yielding positive results. We aim to benchmark ourselves with our regional partners to ensure that high standards are maintained. The Company invested K10 billion in distribution resources increasing and replacing vehicles in the delivery fleet. This has paid off with our network growing substantially. Vehicle monitoring equipment is installed on all the delivery fleet. This has resulted in improved service delivery and cost saving in fuel usage and vehicle maintenance costs. 5
  • 8. National Breweries Plc Managing Director’s report (continued) for the year ended 31 March 2009 We have achieved pre-tax profits of K37,514 million (2008: K35,323 million). The Company’s contribution to the State, in the form of VAT, Excise Duty and Corporate tax during the year was K90 billion (2008: K67 billion) a 34% increase. As mentioned in the Chairman’s report, the Company paid an interim dividend during the year of K220.93 per share. A final dividend of K157.06 per share will be paid bringing the total dividend for the year to K377.99 per share. This represents an increase of 6.4% against 2008. Current and future prospects Our main objective will be to maintain volume and post more growth to add more value to our shareholders’ investment. The outlook for the economy is positive as commodity prices start to pick up. Copper prices have touched US$ 4,800 per ton levels last seen in November 2008. This is good news for the Copperbelt as further job losses will be curtailed and economic activity restored. The maize crop is expected to be in abundance with a good harvest season predicted. This will be welcome in as far as the Company’s input costs are concerned. The outlook for the Kwacha remains gloomy with financial market experts supporting a recovery. This has a direct impact on certain inputs. More will depend on the recovery of the global economy. This will lead to more Foreign Direct Investment (FDI) trickling into the economy to revamp the manufacturing industries. Expansion for most business entities will be dependent on availability of credit at the right price as current borrowing costs are relatively high. The Company has a strong management team in place and is well positioned to meet the challenges that lie ahead in the new financial year. Key focus areas for management will incorporate the following: • • • • • • to maintain volumes and explore growth opportunities to continue with our high service delivery and customer satisfaction with a consistent and quality product continue with training initiatives for our employees planned preventative maintenance to maintain production equipment to high standards more community support in the markets we operate in maintain group standards in IT infrastructure and explore opportunities to improve MIS W J TIEDT Managing Director 8 June 2009 6
  • 9. National Breweries Plc Sustainable development report for the year ended 31 March 2009 Because Sustainable Development is ‘a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also in the future generations to come,’ National Breweries believes it can make a difference in many spheres through various sustainable development activities in line with SABMiller’s most valued 10 priorities. Activities and Projects Alcohol Policy: Bearing in mind that we work for a beer company it is imperative for all our members of staff especially to know the effects of alcohol abuse, the dangers of drink & driving and also dangers of under age drinking. Therefore National Breweries Plc embarked on a roll out of the Alcohol Behaviour Communication (ABC), which will this year be rolled out to every member of staff including some key stakeholders and partners so that we are in the long run able to communicate meaningful messages to the wider public with us being in the lead to discourage the above vices. HIV/AIDS: Understanding that HIV/AIDS is the biggest killer of Zambia’s workforce, National Breweries Plc embarked on a sensitisation program which included the training of several Peer Educators from all area offices. Corporate Social Investment (CSI): The company invested in several projects and gave monies to orphanages like Cheshire Homes, the Zambia Federation for the Blind, and also managed to assist in giving cartons of Maheu to the flood victims in Kazungula district. Enterprise Development: In a bid to support enterprise development, National Breweries Plc supported over 3,000 small scale farmers from across Zambia by choosing to buy their maize for the production of Chibuku Shake Shake over the already established farmers. Realising that agriculture is one of Zambia’s mainstays with more than 30% of the total population living in the rural area and depending on agriculture for their livelihood, National Breweries Plc saw it fit to try and make the lives of the small scale farmers better by supporting them through the buying of the maize and also help create employment for the communities in the surrounding catchment areas where the small scale farmers draw their manpower to harvest the fields. Litter: Admittedly, litter is one of National Breweries main challenges owing to its packed beer. In 2009, the company embarked on sensitisation ‘edutainment’ programs which included drama acts in some communities to emphasise the need for the communities to be wary of litter around their homes and other surrounding areas. Bins were also donated to various institutions and markets in a bid to curb the scourge. W J Tiedt Managing Director 8 June 2009 7
  • 10. National Breweries Plc Directors’ Report for the year ended 31 March 2009 The Directors present their report and the audited financial statements of National Breweries Plc for the year ended 31 March 2009, which disclose the state of affairs of the Company. Principal Activities The principal activity of the Company continued to be the production, packaging, distribution and sale of traditional beverages. Share capital The authorised share capital of the Company is 75,000,000 ordinary shares of K1 each of which 63,000,000 are issued and fully paid and are held as follows: Shareholders % Number of shares held 70 30 44 100 000 18 900 000 100 63,000,000 2009 K’ million 2008 K’ million Revenue __188,652 __123,357 Profit for the year ___23,814 __22,377 Heinrich’s Syndicate Limited Widely held on Lusaka Stock Exchange Total Results and dividends During the year an interim dividend of K 13,919 million (2008: K10,780) was paid. The directors recommend the approval of a final dividend of K 9,895 million (2008: K11,596 million), bringing total dividend for the year to K 23,814 million (2008: K22,377 million). Average number and remuneration of employees The total remuneration of employees during the year amounted to K19,819 million (2008: K14,976 million) and the average monthly number of employees during the year was as follows: Month April May June Number Month Number Month Number Month Number 504 509 507 July August September 559 582 594 October November December 613 630 653 January February March 642 609 609 Gifts and Donations During the year the Company made donations of K36 million (2008: Nil) to charitable organisations. 8
  • 11. National Breweries Plc Directors’ Report (continued) for the year ended 31 March 2009 Exports The Company exported Top One Maheu to Democratic Republic of Congo of K 53 million (2008: K 236 million) during the year. Property, plant and equipment The Company purchased property, plant and equipment amounting to K15,489 million (2008: K 8,555 million) during the year. In the opinion of the directors, the carrying value of property, plant and equipment is not more than their recoverable value. Research and development The Company did not incur any research and development costs in the year. Health and safety The Company is committed to securing the reasonable health, safety and welfare of its employees at work and visitors against risks to health or safety arising out of or in connection with the activities of the Company. Statement on corporate governance The Company has continued to commit itself to the achievement of high standards of corporate governance. This has been defined as “the system by which companies are directed and controlled” and the Board is accountable for it to shareholders. The Board of Directors currently consists of four directors comprising one executive director and three non-executive directors. The key functions of the Chairman and Managing Director are clearly defined. All the non-executive directors provide a considerable depth of knowledge and experience collectively gained from a variety of companies. The Board meets at least four times a year and concerns itself with key matters. Responsibility for implementing the Company’s strategy is delegated to management. There is a properly constituted Audit Committee. The committee meets regularly with management and with the internal and external auditors to review the effectiveness of internal controls, other matters raised in regular reports to the Committee and the full year financial statements prior to their submission to the Board. The Audit Committee is satisfied that the Company’s auditor, PricewaterhouseCoopers, continues to be objective and independent of the Company. There is open communication between senior executive management and Board members. The Board and its Audit Committee are supplied with high quality, up-to-date financial, operational and risk assessment information for review prior to each meeting to enable them to discharge their responsibilities. The Board understands the relationship between itself and the shareholders. It acknowledges that its role is to promote the interest of the shareholders and recognises that it is accountable to the shareholders for the performance of the Company. The Company has an Internal Audit Department, which reviews its systems of accounting and other controls. The Internal Audit Department reports to the Audit Committee. 9
  • 12. National Breweries Plc Directors’ Report (continued) for the year ended 31 March 2009 Ultimate parent company The ultimate parent company is SABMiller Plc, a company incorporated in England and Wales under the Companies Act 1985. Directors The directors who held office during the year and to the date of this report were: V. Chitalu - Chairman W. J. Tiedt - Managing Director P. Gowero R Goetzsche - (Resigned 21 October 2008) G. Sokota S Burroughs - (Resigned 30 April 2008) Auditor The auditors, PricewaterhouseCoopers, have indicated their willingness to continue in office and a resolution for their re-appointment will be proposed at the annual general meeting. By order of the Board A Malenga Company Secretary 8 June 2009 10
  • 13. National Breweries Plc Statement of Directors’ Responsibilities for the year ended 31 March 2009 The Zambia Companies Act requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the company as at the end of the financial year and of its profit or loss. It also requires the directors to ensure that the company keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the company. They are also responsible for safeguarding the assets of the company. The directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable estimates, in conformity with International Financial Reporting Standards and the requirements of the Zambia Companies Act. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the company and of its profit in accordance with International Financial Reporting Standards. The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement. Nothing has come to the attention of the directors to indicate that the company will not remain a going concern for at least twelve months from the date of this statement. V Chitalu Chairman W J Tiedt Managing Director 8 June 2009 11
  • 14. REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF NATIONAL BREWERIES PLC Report on the financial statements PricewaterhouseCoopers PricewaterhouseCoopers Place Stand Number 2374 Thabo Mbeki Road P O Box 30942 Lusaka, Zambia Telephone +260 211 256471/72 Facsimile +260 211 256474 www.pwc.com/zm We have audited the accompanying financial statements of National Breweries Plc for the year ended 31 March 2009 set out on pages 14 to 33. These financial statements comprise the balance sheet at 31 March 2009, and the profit and loss account, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes to the financial statements. Directors’ responsibility for the financial statements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and with the requirements of the Zambia Companies Act. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that 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 the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, 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 opinion. Opinion In our opinion the accompanying financial statements give a true and fair view of the state of the company’s financial affairs at 31 March 2009 and of its profit and cash flows for the year then ended in accordance with International Financial Reporting Standards and the Zambia Companies Act. A list of Partners is available from the above address
  • 15. Report on other legal requirements The Zambia Companies Act requires that in carrying out our audit we consider whether the company has kept the accounting records, other records and registers required by this Act. We confirm that, in our opinion, the accounting records, other records, and registers required by the Zambia Companies’ Act have been kept by the company, so far as appears from our examination of those records. Chartered Accountants Mark Libakeni Partner 8 June 2009 13
  • 16. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Profit and loss account Notes Revenue 5 Year ended 31 March 2009 2008 188 652 123 357 (99 257) (45 977) 89 395 77 380 6 1 589 719 Distribution costs Administrative expenses Other operating expenses Finance (costs)/income 7 (6 572) (10 040) (36 185) (673) (8 058) (7 594) (27 790) 666 Profit before income tax 8 37 514 35 323 Income tax expense 10 (13 700) (12 946) 23 814 22 377 Cost of sales Gross profit Other income Profit for the year Earnings per share for profit attributable to the equity holders of the Company - basic and diluted (Kwacha per share) 11 378 355 Dividends: Interim dividends – paid in the year Proposed final dividend for the year 12 12 13 919 9 895 10 781 11 596 23 814 22 377 14
  • 17. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Balance sheet 15 Current assets Inventories Receivables and prepayments Current income tax Cash and bank balances 16 17 10 Current liabilities Payables and accrued expenses Current income tax Bank overdraft 19 10 20 Net current (liabilities)/ assets 2 886 24 191 31 264 21 012 21 012 20 422 4 656 68 2 661 12 978 4 645 8 311 25 934 31 198 3 796 20 411 2 344 22 755 3 179 24 077 REPRESENTED BY Non-current assets Property, plant and equipment 2 886 (7 187) 14 4 473 34 994 Non-current liabilities Deferred income tax 21 305 27 807 Total equity 63 9 646 11 596 31 264 12 63 9 646 9 895 24 077 13 31 March 2008 4 473 EQUITY Share capital Retained earnings Proposed dividend 31 March 2009 19 604 Notes 24 191 The financial statements on pages 14 to 33 were approved for issue by the board of directors on 8 June 2009 and signed on its behalf by: V Chitalu Chairman W J Tiedt Managing Director 15
  • 18. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Statement of changes in equity Note Share capital K’million Retained earnings K’million Proposed dividends K’million Total K’million 63 9 645 13 488 23 196 - 22 377 22 377 - 22 377 22 377 - (10 780) (11 596) (13 488) 11 596 (13 488) (10 780) - 63 9 646 11 596 21 305 Year ended 31 March 2008 At start of year Profit for the year Total recognised income for 2008 Dividends: - Final for 2007 - Interim for 2008 - Proposed final for 2008 12 12 At end of year Year ended 31 March 2009 At start of year 63 Dividends: - Final for 2008 - Interim for 2009 - Proposed final for 2009 16 23 814 23 814 - 23 814 23 814 (13 919) (9 895) (11 596) 9 895 (11 596) (13 919) - 63 At end of year 21 305 - 12 12 11 596 - Profit for the year Total recognised income for 2009 9 646 9 646 9 895 19 604
  • 19. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Cash flow statement Notes 2009 2008 44 265 104 (257) (14 525) 47 802 414 (14 426) 29 587 33 790 (15 554) (8 555) 2 036 176 (13 518) (8 379) Dividends paid (25 515) (24 268) Net cash used in financing activities (25 515) (24 268) (Decrease)/increase in cash and cash equivalents (9 446) 1 143 Movement in cash and cash equivalents At start of year (Decrease)/increase 8 311 (9 446) 7 168 1 143 (1 135) 8 311 Operating activities Cash generated from operations Interest received Interest paid Income tax paid 23 7 7 10 Net cash generated from operating activities Investing activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment 15 Net cash used in investing activities Financing activities At end of year 18 17
  • 20. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes 1 General Information National Breweries Plc is incorporated in Zambia under the Zambia Companies’ Act as a limited liability company and is domiciled in Zambia. The address of its registered office is: Plot number 1609 Sheki Sheki Road Light Industrial Area P O Box 35135 Lusaka 2 Summary of significant accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. (a) Basis of preparation The financial statements are prepared in compliance with International Financial Reporting Standards (IFRS). The measurement basis applied is the historical cost basis, except where otherwise stated in the accounting policies below. The financial statements are presented in Zambia Kwacha (K), rounded to the nearest million. The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. Interpretations effective in 2009 In 2009 new and revised standards and interpretations became effective for the first time and have been adopted by the Company where relevant to its operations. The adoption of these new and revised standards and interpretations had no material effect on the Company’s accounting policies or disclosures: - IFRIC 11 – IFRS 2 - Group and treasury share transactions - IFRIC 12 – Service Concession Arrangements - IFRIC 14 – IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction - IAS 39 and IFRS 7 – Reclassification of financial assets. Standards, interpretations and amendments to published standards that are not yet effective One new standard (IFRS 8 – Operating Segments) and numerous amendments to existing standards and new interpretations have been published and will be effective for the company’s accounting periods beginning on or after 1 January 2009, but the company has not early adopted any of them. 18
  • 21. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 2 Summary of significant accounting policies (continued) The Directors have assessed the relevance of the new standard and interpretations, and amendments to existing standards with respect to the company’s operations and concluded that they will not have any impact on the company’s financial statements, other than for the amendments to IAS 1 - Presentation of Financial Statements, which will require non-owner changes in equity to be presented in a ‘Comprehensive Statement of Income’. (b) Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the company’s activities. Revenue is shown net of value-added tax (VAT), rebates and discounts. The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the company and when specific criteria have been met for each of the company’s activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. (i) Sales of goods are recognised in the period in which the company delivers products to the customer, the customer has accepted the products and collectability of the related receivables is reasonably assured; (ii) Interest income is recognised on a time proportion basis using the effective interest method. (c ) Functional currency and translation of foreign currencies Transactions are recorded on initial recognition in Zambia Kwacha, being the currency of the primary economic environment in which the company operates (the functional currency). Transactions in foreign currencies are converted into Zambia Kwacha using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the profit and loss account within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the profit and loss account within ‘other (losses)/gains – net’. 19
  • 22. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 2 Summary of significant accounting policies (continued) (d) Property, plant and equipment All categories of property, plant and equipment are initially recorded at cost. All property, plant and equipment are subsequently stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the profit and loss account during the financial period in which they are incurred. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts less their residual values over their estimated useful lives, as follows: • • • Buildings Plant and machinery Equipment and motor vehicles 20 years 10 years 4 – 6 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amounts and are taken into account in determining profit. (e) Accounting for leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease. (f) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined by the Weighted Average Cost method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity), but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses. 20
  • 23. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 2 Summary of significant accounting policies (continued) (g) Receivables Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. A provision for impairment of receivables is established when there is objective evidence that the company will not be able to collect all the amounts due according to the original terms of receivables. The amount of the provision is the difference between the carrying amount and the present value of expected cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the profit and loss account. (h) Payables Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. (i) Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective interest method; any differences between proceeds (net of transaction costs) and the redemption value is recognised in the profit and loss account over the period of the borrowings. Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. (j) Share capital Ordinary shares are classified as ‘share capital’ in equity. (k) Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet. (l) Employee benefits (i) Retirement benefit obligations The company operates a defined contribution scheme for its employees. The company and all its employees also contribute to the National Pension Scheme Authority (NAPSA), which is a defined contribution scheme. A defined contribution plan is a retirement benefit plan under which the company pays fixed contributions into a separate entity. The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The assets of all schemes are held in separate trustee administered funds, which are funded by contributions from both the company and employees. 21
  • 24. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) (l) Employee benefits (continued) (i) Retirement benefit obligations (continued) The company’s contributions to the defined contribution schemes are charged to the profit and loss account in the year in which they fall due. (ii) Other entitlements The estimated monetary liability for employees’ accrued annual leave entitlement at the balance sheet date is recognised as an expense accrual. (m) Income tax Income tax expense is the aggregate of the charge to the profit and loss account in respect of current income tax and deferred income tax. Tax is recognised in the profit and loss account unless it relates to items recognised directly in equity, in which case it is also recognised directly in equity. Current income tax is the amount of income tax payable on the taxable profit for the year determined in accordance with the Zambian Income Tax Act. Deferred income tax is recognised, using the liability method, on all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. However, the deferred income tax is not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted at the balance sheet date and are expected to apply when the related deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. (n) Dividends Dividends on ordinary shares are charged to equity in the period in which they are declared. Proposed dividends are shown as a separate component of equity until declared. 3 Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including experience of future events that are believed to be reasonable under the circumstances. (i) Critical accounting estimates and assumptions The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. 22
  • 25. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 3 Critical accounting estimates and judgements (continued) (i) Critical accounting estimates and assumptions (continued) Receivables Critical estimates are made by the directors in determining the recoverable amount of impaired receivables. (ii) Critical judgements in applying the entity’s accounting policies In the process of applying the Company’s accounting policies, management has made judgements in determining: • • 4 the classification of financial assets and leases whether assets are impaired. Financial risk management objectives and policies The Company’s activities expose it to a variety of financial risks, including foreign currency exchange rates, credit risk and interest rates. The Company’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on its financial performance but the Company does not hedge any risks. Risk management is carried out by the Finance Director and Finance Manager under the treasury policy approved by the Board of Directors. The policy covers areas such as foreign exchange risk, interest rate risk and investing excess liquidity. The Company has policies in place to ensure that sales are made to customers primarily on a cash basis. For credit sales, the Company has policies in place to ensure that the sales are made to customers with an appropriate credit history. Market risk (i) Foreign exchange risk The company imports certain raw materials and services and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US Dollar and the South African Rand. Foreign exchange risk arises from bank balances and recognised assets and liabilities. Currency exposure arising from liabilities denominated in foreign currencies is managed primarily through the holding of bank balances in the relevant foreign currencies. At 31 March 2009, if the Kwacha had weakened/strengthened by 10% against the US dollar with all other variables held constant, post tax profit for the year would have been K 57 million (2008: K 223 million) higher/lower, mainly as a result of US Dollar denominated trade payables and bank balances. At 31 March 2009, if the Kwacha had weakened/strengthened by 10% movement against the South African Rand with all other variables held constant, post tax profit for the year would have been K 138 million (2008: nil) lower/higher, mainly as a result of South African Rand denominated trade payables and bank balances. 23
  • 26. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 4 Financial risk management objectives and policies (continued) Market risk (continued) (ii) Price risk The company does not hold any financial instruments subject to price risk. (iii) Cash flow and fair value interest rate risk The company’s only interest bearing financial liability is the bank overdraft, which is at variable rate, and on which it is therefore exposed to cash flow interest rate risk. The company regularly monitors financing options available to ensure optimum interest rates are obtained. At 31 March 2009, an increase/decrease of 2% would have resulted in a decrease/increase in post tax profit of K 4 million (2008: Nil). Credit risk Credit risk arises from cash equivalents and deposits with banks, as well as trade and other receivables. The company does not have significant concentrations of credit risk as most of its trade is on cash basis. The amount that best represents the company’s maximum exposure to credit risk at 31 March 2009 is made up as follows: 2009 2 661 202 436 318 8 311 395 2 000 - 3 617 Cash at bank and short term bank deposits Trade receivables Receivables from related companies Other receivables 2008 10 706 No collateral is held for any of the above assets. None of the above assets are past due or impaired. Liquidity risk Prudent liquidity risk management includes maintaining sufficient cash balances, and the availability of funding from an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, the finance department maintains flexibility in funding by maintaining availability under committed credit lines. Exposure in this aspect is limited as the Company is purely a cash business. Management monitors rolling forecasts of the company’s liquidity reserve on the basis of expected cash flow. 24
  • 27. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 4 Financial risk management objectives and policies (continued) Liquidity risk (continued) The table below analyses the company’s financial liabilities that will be settled on a net basis into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant. Within 3 months At 31 March 2009: - bank overdraft - trade and other payables 3 796 31 198 At 31 March 2008: - bank overdraft - trade and other payables 20 411 Capital management The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may limit the amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debt. 5 Revenue 2009 188 652 6 55 1 534 609 110 719 Other income Sundry income Gain on disposal of property, plant and equipment 7 123 357 1 589 Sale of goods 2008 Finance (costs)/ income Interest income Interest expense - bank overdraft Net foreign exchange (loss)/gain on cash and cash equivalents 104 (257) 414 - (520) 252 Net finance (costs)/income (673) 666 25
  • 28. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 8 Expenses by nature The following items have been charged in arriving at the profit before income tax: 2009 2008 4 800 857 2 591 19 819 165 4 199 786 997 14 976 159 461 594 (91) 477 Current income tax Deferred income tax (Note 14) 12 113 1 587 12 442 504 Income tax expense 13 700 12 946 Depreciation on property, plant and equipment (Note 15) Operating lease rentals expensed Write down of inventories Employee benefits expense (Note 9) Auditors’ remuneration 9 Employee benefits expense The following items are included within employee benefits expense: Retirement benefits costs: - Defined contribution scheme - National Pension Scheme Authority 10 Income tax expense The tax on the company’s profit before income tax differs from the theoretical amount that would arise using the statutory income tax rate as follows: 2009 37 514 Profit before income tax 2008 35 323 Tax calculated at the statutory income tax rate of 35% (2008 − 35%) Tax effect of: Income not subject to tax Expenses not deductible for tax purposes 13 130 12 363 (2 313) 2 883 (1 132) 1 715 Income tax expense 13 700 12 946 26
  • 29. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 10 Income tax expense (continued) At end of year 2008 4 328 12 442 (14 426) (68) At start of year Charge for the year Payments during the year 2009 2 344 12 113 (14 525) Current income tax movement in the balance sheet 2 344 Income tax assessments have been agreed with the Zambia Revenue Authority (ZRA) up to and including the year ended 31 March 2003. A self assessment system for income tax was introduced for periods subsequent to 31 March 2003. Income tax returns have been filed with the ZRA for the years ended 31 March 2004, 2005, 2006, 2007 and 2008. Quarterly tax payments for the year ended 31 March 2009 were made on the due dates during the year. 11 Earnings per share 2009 Weighted average number of ordinary shares in issue Basic earnings per share 23 814 22 377 63 63 378 Profit attributable to equity holders of the Company 2008 355 Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. There were no potentially dilutive shares outstanding at 31 March 2009 or 2008. Diluted earnings per share are therefore the same as basic earnings per share. 12 Dividends per share At the annual general meeting to be held on 29 June 2009, a final dividend in respect of the year ended 31 March 2009 of K 157.06 (2008: K184.07) per share amounting to a total of K 9,895 million (2008: K 11,596 million) is to be proposed. During the year an interim dividend of K 220.93 per share (2008: K171.11), amounting to a total of K 13,919 million (2008: K10,780 million) was paid. The total dividend for the year is therefore K 377.99 per share (2008: K 355.18), amounting to a total of K 23,814 million (2008: K 22,377 million). Payment of dividends is subject to withholding tax at rates varying between zero and 15% depending on the resident status of the shareholders. Dividends declared by a company listed on the Lusaka Stock Exchange payable to an individual are exempt from withholding tax. 27
  • 30. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 13 Share capital Number of shares (Thousands) Ordinary shares K’million 63 000 63 Balance at 1 April 2007, 31 March 2008 and 31 March 2009 The total authorised number of ordinary shares is 75 million with a par value of K 1 per share. All issued shares are fully paid. 14 Deferred income tax Deferred income tax is calculated using the enacted income tax rate of 35% (2008: 35%). The movement on the deferred income tax account is as follows: 2009 2008 At start of year Charge to profit and loss account (Note 10) 2 886 1 587 2 382 504 At end of year 4 473 2 886 Deferred income tax assets and liabilities and deferred income tax charge/(credit) in the profit and loss account are attributable to the following items: Year ended 31 March 2009 1.4.2008 Charged to P & L 31.03.2009 Deferred income tax liabilities Property, plant and equipment 2 886 1 587 4 473 Net deferred income tax liability 2 886 1 587 4 473 1.4.2007 Charged to P &L 31.03.2008 Deferred income tax liabilities Property, plant and equipment 2 382 504 2 886 Net deferred income tax liability 2 382 504 2 886 Year ended 31 March 2008 28
  • 31. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 15 Property, plant and equipment Land and Buildings Plant, machinery and vehicles Furniture and fittings Capital work in progress Total 3 416 39 1 627 (314) 10 132 4 393 2 738 (1 165) (3 189) 1 560 270 114 (264) (696) 1 614 3 853 (4 479) - 16 722 8 555 (1 429) (4 199) - 1 107 256 - 1 363 4 768 14 016 1 240 988 21 012 6 598 (1 830) 24 270 ( 10 254) 3 416 (2 176) 988 - 35 272 (14 260) Net book amount 4 768 14 016 1 240 988 21 012 Year ended 31 March 2009 Opening net book amount Additions Transfers Disposals Depreciation charge Depreciation on disposals 4 768 1 630 (335) (347) 90 14 016 7 350 6 038 (920) (3 713) 731 1 240 361 667 (84) (740) 81 988 7 843 ( 8 335) (65) - 21 012 15 554 (1 404) (4 800) 902 Closing net book amount 5 806 23 502 1 525 431 31 264 7 893 (2 087) 36 738 (13 236) 4 360 (2 835) 431 - 49 422 (18 158) 5 806 23 502 1 525 431 31 264 Year ended 31 March 2008 Opening net book amount Additions Transfers Disposals Depreciation charge for the year Depreciation on disposals Closing net book amount At 31 March 2008 Cost Accumulated depreciation At 31 March 2009 Cost Accumulated depreciation Net book amount 29
  • 32. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 15 Property, plant and equipment (continued) The register showing the details of buildings and land, as required by the Section 193 of the Zambia Companies Act, is available during business hours at the registered office of the Company. 16 Inventories 2009 15 876 160 4 386 10 219 84 2 675 20 422 Raw materials Finished goods Other stores and spares 2008 12 978 The cost of inventories recognised as an expense and included in ‘cost of sales’ amounted to K 97, 881 million (2008: K 45,004 million). 17 Receivables and prepayments 2009 2008 Trade receivables Receivables from related companies (Note 24) Other receivables and prepayments 202 436 4 018 395 2 000 2 250 4 656 4 645 The carrying amount of receivables and prepayments approximate to their fair values. 18 Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise the following: 2009 2 661 (3 796) 30 8 311 - (1 135) Cash and bank balances Bank overdraft (Note 20) 2008 8 311
  • 33. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 19 Payables and accrued expenses 2009 12 323 8 991 9 884 5 446 7 120 7 845 31 198 Trade payables Amounts due to related companies (Note 24) Other payables and accrued expenses 2008 20 411 The carrying amounts of payables and accrued expenses approximate to their fair values. 20 Bank overdraft The company has an overdraft facility up to a limit of K 8 billion. The facility is renewable quarterly and is subject to review on 30 June 2009. The bank facility is unsecured. The carrying amount of the bank overdraft approximates to the fair value. 21 Contingent liabilities (ii) Legal proceedings The Company is the subject of a number of legal claims relating primarily to employment issues. In the director’s opinion, after taking appropriate legal advice, the outcome of these claims will not give raise to any significant loss. 22 Commitments Capital commitments Capital expenditure contracted for at the balance sheet date but not recognised in the financial statements is as follows: 2009 2 378 Property, plant and equipment 31 2008 1 684
  • 34. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 22 Commitments (continued) Operating lease commitments 2009 2008 Not later than 1 year 1 095 900 23 Cash generated from operations Reconciliation of profit before income tax to cash generated from operations: 2009 37 514 Profit before income tax 2008 35 323 Adjustments for: Interest income (Note 7) Interest expense (Note 7) Depreciation (Note 15) (Profit) on sale of property, plant and equipment Changes in working capital − receivables and prepayments − inventories − payables and accrued expenses − retirement benefit obligations (104) 257 4 800 (1 534) (414) 4 199 (110) (11) (7 444) 10 787 - 10 954 (4 094) 2 105 (161) Cash generated from operations 44 265 47 802 24 Related party transactions The Company is controlled by Heinrich’s Syndicate Limited (incorporated in Zambia) which owns 70% of the Company’s shares. The remaining 30% of the shares are held by various investors. The ultimate parent of the Company is SABMiller Plc (incorporated in England and Wales). The following transactions were carried out with related parties: i) Interest on loans to related parties ii) 2008 59 302 3 417 Fellow subsidiary 2009 2 365 Purchase of services SABMiller Management BV 32
  • 35. National Breweries Plc Financial Statements for the year ended 31 March 2009 (all amounts are in millions of kwacha unless otherwise stated) Notes (continued) 24 Related party transactions (continued) ii) Purchase of services (continued) SABMiller Management BV is a fellow subsidiary of SABMiller Plc and is therefore an entity related through common control. Purchases are based on two long-term contracts for: • • The supply of management and technical services and technical assistance; and Licensing of know-how. iii) Outstanding balances arising from sale and purchase of goods/services 2009 2008 436 2,000 Amounts due to fellow subsidiaries 8 991 7 120 iv) 2009 2008 1 707 1 789 117 70 Receivables from related parties Amounts due from fellow subsidiaries Payables to related parties Key management compensation Salaries and other short-term employment benefits v) Directors’ remuneration Fees for services as a director (included in key management compensation above) ---------- 000 ---------- 33
  • 36. National Breweries Plc Principal shareholders and share distribution For the year ended 31 March 2009 Principal shareholders The ten largest shareholdings in the Company and the respective number of shares held as at 31 March 2009 are as follows: % Number of shares Heinrich Syndicate Limited Barclays Lusaka Nominees Public Service Pension Fund National Pension Scheme Authority Saturnia Regna Pension Trust Fund Local Authorities Superannuation Fund Madison Pension Fund Barclays Bank Plc - Staff Pension Fund Standard Chartered Pension Trust Fund Workers Compensation Fund 70.00 9.73 8.17 2.26 2.08 1.11 0.81 0.70 0.47 0.40 44,100,000 6,131,630 5,147,500 1,421,017 1,312,861 700,000 510,326 438,908 297,626 250,000 Total 95.73 60,309,868 Number of shareholders % Number of shares 323 730 40 37 9 5 0.07 1.62 0.49 1.88 6.49 89.44 46,452 1,022,348 308,099 1,185,301 4,091,764 56,346,036 1,144 100 63,000,000 Name of shareholder 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Distribution of shareholders Less than 500 shares 500 – 5,000 shares 5,001 – 10,000 shares 10,001 – 100,000 shares 100,001 – 1,000,000 shares Over 1,000,000 shares Total Source: Lusaka Stock Exchange Central Depository 34
  • 37. National Breweries Plc Directorate and Corporate Information For the year ended 31 March 2009 CHAIRMAN V Chitalu * DIRECTORS P Gowero*** R Goetzsche** (Resigned 21 October 2008) DIRECTORS G Sokota* W Tiedt** S Burroughs**(Resigned 30 April 2008 ) COMPANY SECRETARY A Malenga* REGISTERED OFFICE Plot No 1609 Sheki Sheki Road Light Industrial Area P O Box 35135 Lusaka LEGAL ADVISORS William Nyirenda& Co Angoni House Obote Avenue P O Box 22144 Kitwe MNB Legal Practitioners 5th Floor, Godfrey House Longolongo Road P O Box 34207 Lusaka BANKERS Stanbic Bank Zambia Limited Standard Chartered Bank Plc Barclays Bank Plc Lusaka AUDITORS PricewaterhouseCoopers PricewaterhouseCoopers Place Thabo Mbeki Road P O Box 30942 Lusaka REGISTRARS Lusaka Stock Exchange Exchange Building 3rd Floor, Farmers House, Central Park Cairo Road P. O. Box 34523 Lusaka * Zambian ** South African ***Zimbabwean 35
  • 38. NOTICE OF THE ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the 41st ANNUAL GENERAL MEETING of NATIONAL BREWERIES PLC will be held at the Southern Sun Ridgeway Hotel, Lusaka, Zambia on Monday 29 June 2009 at 09:00 hours for the following purposes: th 1. To approve the minutes of the 40 Annual General Meeting held on 19 June 2008. 2. To receive and adopt the audited financial statements for the year ended 31 March 2009. 3. To declare a final dividend of K157.06 per share, this will be paid by 31 August 2009 (to ordinary shareholders who are on the register at the close of business on 30 June 2009). 4. To re-appoint PricewaterhouseCoopers as external auditors from the conclusion of this Annual General Meeting to the conclusion of the next Annual General Meeting and to authorise the Board of Directors to fix their remuneration. 5. To authorise the Board of Directors to fix the remuneration of the Directors. 6. To elect Directors in place of those retiring in accordance with the provision of the Company’s articles of association. 7. To transact any other business that may properly be transacted at the annual general meeting. A member entitled to attend and vote at the meeting is entitled to appoint any person (whether a member of the Company or not) to attend and, on a poll, to vote in their place. Proxy forms must be lodged at the Registered Office of the Company not less than 48 hours before the time fixed for the meeting. By order of the Board A MALENGA Company Secretary *Please bring valid identification to the meeting. NOTICE TO SHAREHOLDERS Please be advised that the audited financial statements for the year ended 31 March 2009 in respect of National Breweries PLC, will be distributed to our registered shareholders as at 31 March 2009 in the week commencing 8 June 2009. The Company will make the financial statements available for viewing in PDF format, on the web site of the Lusaka Stock Exchange – www.luse.co.zm from 10 June 2009. By order of the Board A MALENGA Company Secretary P.O Box 35135 Plot 1609 Sheki Sheki Road Lusaka 36

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