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National Breweries 2013 annual report

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National Breweries annual report for the year ended 31 March 2013

National Breweries annual report for the year ended 31 March 2013


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  • 1. Annual Report 2013 Innovating Refreshing Moving Forward
  • 2. The National Breweries Story After over four decades of brewing Zambia’s favourite opaque beer Chibuku Shake Shake, National Breweries Plc, a Subsidiary of SABMiller Plc saw it fit to invest $5m in a new state of the art brewery meant to brew its latest invention - Chibuku Super. The company believes in working to build strong local businesses that ultimately contribute to the Zambian economy. The building of a new state of the art plant in Kitwe is testimony of the company’s objective to produce high quality products which consumers can enjoy every day. State of the art machinery was launched in October, 2012 with Copperbelt Permanent Secretary Mr Stanford Mschili invited as guest of honour. Africa SABMiller Managing Director - Mr Mark Bowman also attended the event.
  • 3. 1 National Breweries Plc | 2013 Annual Report Contents Financial Highlights 2 Message from the Chairman 3 Message from the Managing Director 5 Board of Directors 7 Directors’ Report 8 Corporate Governance Statement 10 Statement of Directors’ Responsibilities 13 Report of the Independent Auditor 14 Financial Statements Statement of Comprehensive Income 18 Statement of Financial Position 19 Statement of Changes in Equity 20 Statement of Cash Flows 21 Notes 22-42 This is the Annual Report of National Breweries Plc for the year ended 31 March 2013 and it is dated 21 June 2013. It includes information that is required by the Securities and Exchange Commission (SEC). This information may be updated or supplemented at the time of the filing of that document with the SEC or later amended if necessary, although National Breweries Plc does not undertake to update any such information. The Annual Report is made available to all shareholders on the Lusaka Stock Exchange website (www.luse.co.zm). This report includes names of National Breweries Plc products, which constitute trademarks or trade names which National Breweries Plc owns or which others own and license to National Breweries Plc for use. In this report, the term ‘company’ refers to National Breweries Plc and and its consolidated subsidiaries, except as the context otherwise requires. National Breweries Plc’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed and adopted for use in the European Union (EU) and IFRS as issued by the International Accounting Standards Board (IASB). References to IFRS hereafter should be construed as references to both IFRS as adopted by the EU and IFRS as issued by the IASB. Unless otherwise indicated, all financial information contained in this document has been prepared in accordance with IFRS.
  • 4. 0 10 20 30 40 50 60 0 10 20 30 40 50 60 0 10 20 30 40 50 60 0 10 20 30 40 50 60 0 10 20 30 40 50 60 2 National Breweries Plc | 2013 Annual Report Company Financial Review (In Kwacha Thousands) 2009 2010 2011 2012 2013 Company turnover (Incl. excise duty) 215,031 254,187 289,429 276,098 374,176 Company revenue (Excl. excise duty) 188,652 228,629 260,777 249,373 337,470 Operating profit 38,291 50,734 57,681 55,194 52,598 Profit before taxation 37,514 49,788 57,757 54,708 52,381 Profit for the year 23,814 30,928 37,170 35,257 32,457 Total assets 59,071 73,604 81,184 79,969 134,508 Current liabilities 34,994 41,095 44,544 43,801 63,603 Shareholder’s funds 19,604 26,876 30,260 29,514 59,794 Kwacha Earnings per share 0.38 0.49 0.59 0.56 0.52 Dividends per share 0.38 0.49 0.59 0.28 - K 337.5million Company revenue Up 35% from 2012 K 52.6million Operating profit Down 5% from 2012 K 59.8million Shareholder’s funds Up 103% from 2012 shareholder’s funds (in Kwacha millions) 2009 2010 2011 2012 2013 19.6 30.3 29.5 659.6 Chibuku Shake Shake has been the flagship brand for National Breweries Plc for over 40years COMPANY Revenue (in Kwacha millions) 2009 2010 2011 2012 2013 OPERATING PROFIT (in Kwacha millions) 2009 2010 2011 2012 2013 26.9 59.8 172.9 0 50 100 150 200 250 300 350 337.5 0 50 100 150 200 250 300 350 188.7 0 50 100 150 200 250 300 350 228.7 0 50 100 150 200 250 300 350 260.8 0 50 100 150 200 250 300 350 249.4 0 10 20 30 40 50 60 52.6 0 10 20 30 40 50 60 0 10 20 30 40 50 60 0 10 20 30 40 50 60 0 10 20 30 40 50 60 38.3 50.7 57.7 55.2
  • 5. 3 National Breweries Plc | 2013 Annual Report Message from the Chairman T he company has during the year continued to consolidate its performance platforms to deliver sustained future growth. We achieved market share growth in our key segments, and key initiatives in Human Resources and Supply Chain departments have realigned company processes to increase efficiency and productivity. Market Overview Market conditions were generally favorable during the year, not withstanding some new regulations on trading hours and packaging specifications which impacted our operations which were amended later in the year. The economy continued to grow in line with market expectations and inflation was well contained within single digit levels. However, the Kwacha came under pressure as high demand for the United States Dollar saw it depreciate by 2.5% year on year to close at 5.403 (Kwacha Rebased). In their first full annual budget, the PF Government focused national resources on initiatives targeted at stimulating economic activity and growth. Massive investments have been made in infrastructure development with the road sector being a major beneficiary. The benefit of this to our business is that we will be able to serve our customers more easily and efficiently. StrategicReview We have continued to make significant progress in positioning the business on a footing of sustained growth. The results for the year clearly show the outcome of the various prudential measures we implemented to grow capacity and improve our route to market. Our brands have continued to enjoy high demand, cementing our belief in the growth prospects of our business. Price compliance still remained a challenge. The coming online of our new Chibuku Super offering in a PET bottle is a game changer for our business and will be key to our future performance. We made strides in securing our agricultural input supplies through our comprehensive local sourcing programs for maize and sorghum that have realized tangible benefits to our small-scale farming partners. Sustained focus on management of fixed costs had a notable impact on driving our performance. We continued to entrench efficiency and productivity measures in our value chain allowing us to maintain competitive pricing in the face of increasing costs of doing business. We continued to witness high competitor activity, most of whom have continued to make bulk deliveries in total disregard to existing legislation. SustainableDevelopment We believe that the long-term sustainability of our business is premised on our being a good ‘corporate citizen’. Our commitment to therefore operate in a responsible, accountable and transparent manner remained unabated as we continued to implement programmes aimed at aligning our objectives with those of the whole society to enable equitable wealth creation and sustainable development. Dear Shareholders, The coming online of our new Chibuku Super offering in a PET bottle is a game changer for our business and will be key to our future performance. We’re Innovating…
  • 6. 4 National Breweries Plc | 2013 Annual Report Message from the Chairman (contd) CorporateGovernance We have continued to be steadfast in observing a strict compliance culture with regard to sound corporate governance principles over the years by applying the best management practices. These practices are oriented towards enhancing investor confidence, with increased transparency and corporate responsibility. We operated under the guidelines of the Lusaka Stock Exchange Governance Code, the UK Combined Code on Corporate Governance and the Turnbull guidance report on internal controls. Future Prospects We are confident that Zambia’s economy will continue on the growth trajectory we have witnessed over the past couple of years. The successful issue by Government of the US$750 million Eurobond has allowed for massive investment in infrastructure which will continue to spur economic activity and employment creation. Together with the highly anticipated increase in copper production following investment into new greenfield mining projects, this is expected to sustain the country’s GDP growth rate at around 7% for 2013. For our business this is good news as improved economic performance will lead to wealth creation and growth in disposable income. The level of inflation remains a risk to pricing stability of our products, which are essentially economy brands. However, we remain confident that, over the short to medium term, government policies will contain inflation within sustainable levels so as to lower the cost of doing business, leading to stability in our pricing. We laud the government for maintaining a conducive environment that is supportive of private sector enterprise growth. The consistency and predictability of government policy has enabled us to take long term investment decisions that we will see us continue growing our business in Zambia. Valentine Chitalu Chairman For over 40 years Chibuku Shake Shake has proved a popular drink to the low income consumers country wide
  • 7. 5 National Breweries Plc | 2013 Annual Report Message from the Managing Director O ur overriding objective for the year was to restore volume growth by managing affordability while protecting margins through portfolio innovation and disciplined cost management. We had an exciting year that I am pleased to report on, notwithstanding the comparatively softer financial results. We had new liquor trading regulations that restricted operating hours which meant we lost 1 trading day a week for 2 months, representing 2% of our volume. We also had new regulations that for a considerable time imposed packaging restrictions that meant we could not supply 30% of our portfolio offering. Nevertheless, we delivered a strong volume performance for the year in review, with a growth of 34% in total volumes. This was on the back of a price roll back on our main 1 liter Shake Shake pack, although this expectedly put pressure on our margins. We concluded the installation of additional capacity in commissioning a new PET line for Chibuku Super at our Kitwe brewery. This happened early in the second half of the year with strong demand coming through almost immediately. Strategic Review Against a backdrop of the competitive environment remaining difficult, we enhanced our route to market through investment in additional delivery vehicles. The issuance of various Government regulations to control the opaque beer market directly affected our business in the last financial with the most impactful being Statutory Instrument No. 23 of 2012 - The Liquor Licensing (Intoxicating Liquor) (Quantities and Packaging) Regulation, 2012. The effect of this regulation, as already indicted, was that it inadvertently made the carton pack the only packaging format allowed for opaque beer. We applauded the intention of this regulation in prohibiting the sale of cheap spirits packed in sachets. Regrettably, we saw the return of cheap spirits packed in 200ml PET bottles during the latter part of 2012. Our Chibuku Super PET offering has seen significant growth since its launch and we believe it offers exciting opportunities because of its longer shelf-life. Currency rebasing presented challenges in achieving price compliance in the market as the coins seemed, in most areas, not to be available for retailers to give as change. SustainableDevelopment Our sustainable development strategy ensures that we continue to make a meaningful contribution to the welfare of the communities where we operate. During the year we supported various initiatives, which included providing clean drinking water and housing in Palabana, supporting the initiative aimed at reducing the incidences of early marriages across the country, imparting business skills in young entrepreneurs and sharing information to combat the unintended consequences of irresponsible consumption of alcohol, such as underage drinking. We remain focused on being a force for good in the conduct of our business through strict adherence to ethical behavior in all our interactions with the various stakeholders across our entire value chain. The response from consumers to our Chibuku Super offering has been very strong and there is now a need for us to expand our capacity to meet the high market demand. We’re Refreshing…
  • 8. 6 National Breweries Plc | 2013 Annual Report Message from the Managing Director (contd) CapitalInvestment The remarkable economic performance of the country has continued to present significant opportunities for growth of our business. We made a capital investment in a new Chibuku Super line at our Kitwe Brewery that was successfully commissioned early in the second half of the year. This ZMK25m capital investment involved installation of a line for packaging our new Chibuku Super offering, which is packaged in PET bottles. Lookingahead The Zambian economy continues to grow and perform strongly with key sectors such as mining, manufacturing, construction and social services all seeing massive investment and increased performance. The consensus is that this will continue to be the case in the short- to medium-term as government continues with its free market policies and the country maintains its status as an investor friendly destination. Government’s investment in road infrastructure will increase accessibility across the country, allowing us to penetrate new markets in a bid to achieve our ambitious volume aspirations. We have, in the last year, made the necessary capital investments and organizational changes to strengthen our capabilities and increase our efficiency. The stability of the country’s economic climate presents opportunities for further investment. The response from consumers to our Chibuku Super offering has been very strong and there is now a need for us to expand our capacity to meet the high market demand. This strong performance affirms our strategic view and belief in the high potential of the business. We are, therefore, convinced that the time is right for investment in new brewery infrastructure in Lusaka at our existing Lusaka Plant. One of the key risks facing the business continues to be the management of post-consumer waste. We have made significant progress, in partnership with various stakeholders, including the Ministry of Local Government and Housing, in developing a solution that we hope to install soon. We expect that the implementation of this initiative will be a great step in driving the agenda for environmental protection and sustainability. As the leading producer of commercial opaque beer in Zambia, we continue to be concerned about the unintended consequences of irresponsible consumption of alcohol. We will continue to implement programmes that are focused on reducing irresponsible alcohol consumption and will seek more impactful collaborations with key stakeholders in addressing challenges of irresponsible alcohol consumption. We will continue to explore further synergies with our sister companies. With our new capital investments and new offerings, we are entering a phase of accelerated growth in our business. To ensure the sustainability of this strong growth, we will continue to embed our Human Resource strategic initiatives that are focused on developing talent and building winning teams of highly motivated and engaged individuals. Wesley J. Tiedt Managing Director The brand has stood the test of time and now has a new innovation on the market known as Chibuku Super”
  • 9. 7 National Breweries Plc | 2013 Annual Report Board of Directors Valentine (48) is an entrepreneur in Zambia and Southern Africa specializing in private equity and local private sector development. Until December 2003, Valentine worked for CDC/ Actis in London and Lusaka specializing in deals origination throughout Southern Africa and portfolio management in Zambia and Malawi. Valentine was previously Chief Executive Officer at the Zambia Privatisation Agency where he was responsible for the divestiture of over 240 enterprises. He also worked for KPMG Peat Marwick in the United Kingdom in the early part of his career. Valentine holds several board positions in Zambia South Africa and the United Kingdom and is Chairman of several corporate organizations. Valentine is a qualified Accountant and holds a Masters Degree in Development Economics. Valentine Chitalu Anele (48) is the Managing Director of Zambian Breweries plc as well as an executive member of the Board. He worked at South African Breweries (SAB) Limited where he accumulated a wealth of experience for over twelve (12) years in finance, operations, sales and distribution. He holds a bachelor’s Degree in Accounting, an MBA and is a Fellow of the Association of Chartered Certified Accountants (ACCA). George (65) is a professional accountant and financial consultant. He is a Fellow of the Institute of Chartered Accountants in England and Wales. He is also a Fellow of the Association of Certified Accountants, United Kingdom and Fellow of the Zambia Institute of Certified Accountants. He sits on a number of notable boards, several of which he chairs. Annabelle (40) joined Zambian Breweries Plc in 2008 and was appointed as the Finance Director of the Zambia Group in February 2012. She has over 15 years experience in audit and finance functions in the UK and Zambia. Annabelle holds a BA MA in Economics from Cambridge University and is a qualified ACA with the Institute of Chartered Accountants, England & Wales (ICAEW). She is a Fellow of ZICA. Gert (53) joined SABMiller in 1989. He has held several of positions in SABMiller, including Senior VP Finance and Administration in Poland and Group Head of Finance Excellence before returning to the Africa Division in April 2011 as Senior Manager, Finance Operations. Gert holds various degrees including an MBA and PhD as well as a BA Degree in Psychology obtained in 2011. Wes (60) joined SABMiller in 1998 in Botswana as General Manager of Botswana Breweries Limited. He joined National Breweries in Lusaka in May 2003 as Managing Director of National Breweries Plc as well a Director of Zambian Breweries Plc. and was appointed a Director of Chibuku Products Limited of Malawi from May 2003. Wes has over 30 years experience in opaque beer and related products. Wes is also a member of the Institute of Brewing & Distilling and a Fellow of the Chartered Management Institute (CMI) FCMI of the United Kingdom. Anele Malumo George Sokota Annabelle Degroot Gert Nel Wesley John Tiedt
  • 10. 8 National Breweries Plc | 2013 Annual Report Directors’ Report The Directors present their report and the audited financial statements for the year ended 31 March 2013, which disclose the state of affairs of National Breweries Plc (the Company). Principal Activities The principal activity of the Company continued to be the production, packaging, distribution and sale of traditional beverages. In the opinion of the Directors, all the activities of the Company substantially fall within the same industry categorisation. Share Capital The authorised share capital of the Company remained unchanged at 75,000,000 ordinary shares of K1each, of which 63,000,000 are issued and fully paid. Operating Results and Dividends 2013 2012 K’ 000 K’ 000 Revenue 337,470 249,373 Profit for the year 32,457 35,257 The directors did not recommend payment of a dividend (2012: 17.6million). Directors The directors who held office during the year and to the date of this report were: Valentine Chitalu - Chairman George Sokota - Non - Executive Director Anele Malumo - Executive Director Wesley Tiedt - Managing Director Gert Nel - Non - Executive Director Annabelle Degroot - Finance Director
  • 11. 9 National Breweries Plc | 2013 Annual Report Number of employees and remuneration The total remuneration of employees during the year amounted to K32.6 million (2012: K26.8 million) and the average monthly number of employees during the year was as follows: Month Number Month Number April 634 October 666 May 646 November 668 June 647 December 683 July 653 January 684 August 663 February 686 September 664 March 688 The Company recognizes its responsibility regarding the occupational health, safety, and welfare of its employees and has put in place measures to safeguard them. Export The Company did not export any products during the year (2012: nil). Gifts and Donations During the year, the Company made donations of K67,000 (2012: K74,000) to various charitable organisations and events. Property,Plant and Equipment The Company purchased property, plant and equipment amounting to K38.7 million (2012: K17.8 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 (2012: nil). 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. Auditors The Company’s auditor, PricewaterhouseCoopers, has indicated their willingness to continue in office and a resolution for their reappointment will be proposed at the annual general meeting. Approvalof Financial statements The financial statements were approved by the Board of Directors on 21June 2013. M M.Mutimushi Company Secretary 21 June 2013 We’re Moving Forward…
  • 12. 10 National Breweries Plc | 2013 Annual Report Statement on Corporate Governance M aintaining its track record of adopting sound Corporate Governance principles over the years, National Breweries Plc. (“the Company”) is at the forefront of applying the best management practices, in order to achieve high standards of governance. These practices are oriented towards enhancing investor confidence, with increased transparency and corporate responsibility. The Directors strive to ensure that the leadership of company is transparent, answerable and accountable to its stakeholders. The Board of Directors endorses the Lusaka Stock Exchange (LuSE) Code of Corporate Governance for listed and quoted companies and believes that in all respects, the Company has complied with the principles of the Code throughout the year under review. National Breweries Plc believes that a corporate culture of compliance with applicable laws, regulations, internal policies and procedures is a core component of good Corporate Governance. In light thereof, in the year under review, the Company continued to be compliant in areas of Corporate Governance and disclosure requirements. TheBOARD The Board of Directors has been appointed by the shareholders and is responsible to the shareholders for setting the direction of the Company through the establishment of strategic objectives and key policies. The Board membership consists of six Directors, four of whom are non-executive. The Company draws on the skills and experiences of the non-executive directors who ensured impartial and objective viewpoints in decision-making processes and standards of conduct. The wealthy mix of technical, entrepreneurial, financial and business skills of the Directors enhance the effectiveness of the Board. The Board met formally three times during the year, as well as informally as and when required. Attendance at Board and committee meetings was 100% on the part of all Board members. The Board reserves for itself a formal schedule of matters on which it takes the ultimate decision. These include adopting the Company’s year strategic plan and the annual budget, approving all major capital expenditure and material contracts, acquisitions and disposals of businesses and other assets, appointment of senior executives and succession planning, reviewing management’s corporate and financial performance, and overall review of the Company’s internal controls. Particular other matters are delegated to the Audit Committee of Board, the roles and responsibilities of which are set out below. The Board is presided over by the Chairman who is assisted by the Company Secretary. Retirement AND ELECTION OF DIRECTORS It is the Board’s policy that new Directors are subject to election at the first opportunity following their appointment. Non-executive Directors are subject to retirement and re-election on annual basis, in accordance with the Articles of Association. The CHAIRMAN AND THE MANAGING DIRECTOR The roles of the Chairman and the Managing Director are separate with responsibilities divided between them. This separation of responsibilities has been formalised in their respective letters of appointment. The CHAIRMAN The role of the Chairman of the board is to promote the highest standards of corporate governance, which is meaningful, relevant and understood throughout the business so that we all do the right things at the time and in the right way. Our Chairman also has the responsibility to be accountable to shareholders for the effectiveness of the Board and that it builds a sustainable business through consistent, profitable growth, while taking account of the interests of wider stakeholders.
  • 13. 11 National Breweries Plc | 2013 Annual Report The MANAGING DIRECTOR The Managing Director continued to be responsible to the Board for all aspects of the performance and management of the Company. This included developing business strategies for Board approval and achieving timely and effective implementation whilst managing the risks. The AUDIT COMMITTEE The Audit Committee chaired by a non-executive director, met regularly during the year and effectively performed its role with independence as defined by its terms of reference and authority granted to it by the Board. The Audit Committee is not aware of any significant cases of non-compliance with the group’s Code of Corporate Governance during the year under review, nor is it aware of any ascertainable risk from any litigation pending, in progress or threatened, which could be regarded as material to the Company’s financial position. Internal CONTROL, RISK MANAGEMENT AND INTERNAL AUDIT The Board is responsible for the Company’s system of internal control and risk management and for reviewing its effectiveness. The Chief Internal Auditor has established the process necessary to implement clear operating procedures, lines of responsibility and delegated authority. The Chief Internal Auditor has direct access to the Chairman of the Audit committee. External AUDITORS External Auditors are appointed by the shareholders and are subject to reappointment at the AGM. The current external auditors of the Company are PricewaterhouseCoopers (PwC). The Audit Committee is satisfied that for the period under review, the independence of the auditors has not been affected by provision of non- audit services. Communication WITH SHAREHOLDERS Legal National Breweries Plc. places considerable importance in maintaining active investor relations through open, fair and transparent communications. The Company ensures timely dissemination of information to its investors and other stakeholders through various media. A dedicated shareholders unit through the Transfer Secretaries is responsible for active interaction with the shareholders. In addition, the Company encourages communication with all shareholders, and welcomes their participation at Annual General Meetings. All shareholders who attend the Company’s Annual General Meeting are given the opportunity to question the Chairman and other members of the Board, on any aspect of the Company’s business. Corporate SOCIAL RESPONSIBILIY As a business that is committed to the adherence of tenets of corporate sustainability, National Breweries plc. implemented a number programmes in line with the SABMiller “Ten Priorities One Future” Sustainable Development Plan. The primary objective of such programmes was to ensure that the company remained a “force for good” in the community in which it operates. The Company’s corporate social responsibility programmes for the year were as outlined below:- 1. Benefiting communities In partnership with Zambian Breweries Plc. and DMI St Eugene University, the company trained 120 women in basic business management skills as part of its programme to empower vulnerable groups in society. The training was primarily targeted at women because they usually manage household financial resources in rural communities. The two-day programme drew participants from the Ministry of Community Development and Social Services. 2. Discouraging irresponsible drinking National Breweries plc continued to implement its vigorous Alcohol Responsibility agenda that aims to address the challenges of drinking and driving, binge drinking and under-age drinking. With the support of various partners and regulatory bodies, the company hosted forums for information sharing with retails and law enforcement agencies in a bid to implementation of existing alcohol legislation. 3. Encouraging enterprise development in our value chains In another collaboration with Zambian Breweries plc., the company partnered with Habitat for Humanity Zambia and launched a community development project in the Palabana farming community of Chongwe District on 5th September 2012. Situated about 40 kilometres east of Lusaka, Palabana has a population of about 2,500 people. Aspects of the project included rehabilitation of three boreholes and installation of three water hand pumps, provision of building materials, provision of HIV and AIDS Counselling and Testing services, alcohol responsibility training and training in Basic Business Management for women and youth, as well as training in the management and treatment of malaria and water borne diseases such as cholera. In the second phase of the project partnership with Habitat, Zambian Breweries and National Breweries co- opted the United Nations Youth Association of Zambia, who conducted training on Financial Literacy and Gender Based Violence to parents in Palabana.
  • 14. 12 National Breweries Plc | 2013 Annual Report 4.Packaging reuse and recycling The company has continued to take a lead in seeking solutions to the challenges of packaging waste. We have proactively presented out position papers on this matter to key stakeholders. Additionally, we have participated in a pilot programme on recycling of Chibuku cartons. On the whole, we are optimistic that we will soon realise tangible benefits from our programmes in support of waste re-use and re-cycling. 5. Contributing to the reduction of HIV/ AIDS The company continued to provide support on HIV/ Aids to employees, spouses and their dependents through our comprehensive managed health care programme. Though this is essentially an internally driven initiative, we enhanced our collaboration with third-party vendors in order to enhance the programme’s effectiveness. Our annual Voluntary Counseling & Testing (VCT) initiative was a resounding success as we again exceeded our target of 75% for VCT re-testing. National Breweries plc. is part of the fabric of the Zambian society. We know that our continued growth and prosperity is premised on the sustainable growth of the communities in which we operate and we therefore will continue to aid the economic and social development of the country. Organizational INTEGRITY The company has a zero tolerance policy towards bribery and corruption. To this end, continued strides to foster integrity within the organisation were made and achieved through the rolled out of the Ethics and Anti- Bribery Policy Guidelines after the rigorous training of all members of staff on bribery and corruption. Both employees and stakeholders have been encouraged to familiarise themselves with the said guidelines and urged to actively adhere to the code and company values in pursuance of all activities and business endeavours. Corporate Governace (contd) M M.Mutimushi Company Secretary 21 June 2013 ________________
  • 15. 13 National Breweries Plc | 2013 Annual Report Statement of Directors’ Responsibilities For the year ended 31 March 2013 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 are also responsible for such internal control, as the directors determine necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. 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. _______________________ _______________________ Valentine Chitalu Wesley John Tiedt Chairman Managing Director 21 June 2013
  • 16. 14 National Breweries Plc | 2013 Annual Report PricewaterhouseCoopers, PwC Place, Stand No 2374, Thabo Mbeki Road, P.O. Box 30942, Lusaka, Zambia T: +260 (211) 334000 , F: +260(211) 256474, www.pwc.com/zm A list of Partners is available from the address above REPORT OF THE INDEPENDENT AUDITOR TO THE MEMBERS OF NATIONAL BREWERIES PLC Report on the financial statements We have audited the accompanying financial statements of National Breweries Plc set out on pages 18 to 42, which comprise the statement of financial position as at 31 March 2013 and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information. Directors’ responsibility for the financial statements The Directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Financial Reporting Standards and with the requirements of the Zambia Companies Act and for such internal control as the Directors determine is necessary to enable the preparation of 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 accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the 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 judgment, 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 entity’s preparation of financial statements that give a true and fair view 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 entity’s internal control. An audit also includes evaluating the appropriateness of 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 audit opinion. Opinion In our opinion the financial statements give a true and fair view of the financial position of National Breweries Plc at 31 March 2013, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and with the requirements of the Zambia Companies Act.
  • 17. 15 National Breweries Plc | 2013 Annual Report Report on other legal requirements The Zambia Companies Act requires that in carrying out our audit we consider whether National Breweries Plc has kept proper accounting records and other records and other registers required by this Act. In our opinion, based on our examination of those records, National Breweries Plc has maintained proper accounting records and other records and other registers as required by the Zambia Companies Act. PricewaterhouseCoopers Chartered Accountants 2013 Lusaka Nasir Ali Partner signing on behalf of the firm
  • 18. 16 National Breweries Plc | 2013 Annual Report National Breweries Plc believes that its products are for the enjoyment of life that should be consumed responsibily by adults over the age of 18yrs
  • 19. 17 National Breweries Plc | 2013 Annual Report Financial Statements Statement of Comprehensive Income 18 Statement of Financial Position 19 Statement of Changes in Equity 20 Statement of Cash Flows 21 Notes 22-42
  • 20. 18 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Statement of Comprehensive Income                                                                                                        
  • 21. 19 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Statement of financial position                                                                                                                         21 June 2013 Valentine Chitalu Wesley John Tiedt Chairman Managing Director
  • 22. 20 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Statement of changes in equity                                                                                                                 
  • 23. 21 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Statement of cash flows                                                                                                     
  • 24. 22 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes                                                                         Plot 6438 Mungwi Road Heavy Industrial Area P O Box 31293 Lusaka
  • 25. 23 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                           
  • 26. 24 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                               
  • 27. 25 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                          
  • 28. 26 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are inthousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                  
  • 29. 27 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                     
  • 30. 28 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                        
  • 31. 29 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                                                  . .
  • 32. 30 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                        
  • 33. 31 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                   
  • 34. 32 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                                          
  • 35. 33 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                     
  • 36. 34 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                                                           1 per
  • 37. 35 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                                                                
  • 38. 36 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                       
  • 39. 37 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                                       
  • 40. 38 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                          
  • 41. 39 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                        •  •                                                                                               5,274
  • 42. 40 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                                                                                                                                                  25 Related party transactions (continued)                                                                         
  • 43. 41 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                  
  • 44. 42 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Notes (continued)                                                            
  • 45. 43 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) Shareholding Information                                                                                                                                                                                          
  • 46. 44 National Breweries Plc | 2013 Annual ReportNational Breweries Pc Financial Statements For the year ended 31 March 2013 (All amounts are in thousands of Kwacha unless otherwise stated) CHAIRMAN V Chitalu DIRECTORS G Sokota W Tiedt A Degroot G Nel A Malumo COMPANY SECRETARY M M Mutimushi REGISTERED OFFICE Plot 6438 Mungwi Road Heavy Industrial Area P O Box 31293 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 Barclays Bank Zambia Plc Citibank Zambia Limited Stanbic Bank Zambia Limited Standard Chartered Bank Plc Lusaka AUDITOR PricewaterhouseCoopers PricewaterhouseCoopers Place Thabo Mbeki Road P O Box 30942 Lusaka REGISTRARS Corpserve Transfer Agents Ltd 6 Mwaleshi Road Olympia Park Lusaka Corporate information
  • 47. 45 National Breweries Plc | 2013 Annual Report NOTES
  • 48. 46 National Breweries Plc | 2013 Annual Report NOTES
  • 49. State of the art machinery installed at the new Kitwe Chibuku PET Plant Copperbelt PS, Stanford Mschili and His Worship, the Kitwe Mayor Chileshe Bweupe look around during the official opening of the Kitwe plant.
  • 50. National Breweries PLC Plot 6438 Mungwi Road Heavy Industrial Area, P O Box 31293 Lusaka, Zambia T: +260 211 246555 www.sabmiller.com

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