INTERNATIONAL BREWERIES 2017 ANNUAL REPORT

ANNUAL
REPORT

& FINANCIAL STATEMENTS



Our Commitment

We are now part of the Dream-People-
Culture Platform.
Our people represent our major
sustainable competitive advantage as we
now share one vision:

To be the Best beer Company in Nigeria
for a better world having achieved the
vision of the most sought after
manufacturer of choice beer.

We will drive an ownership structure that
values accountability, integrity and
continual improvement of set targets.

We have developed world class
efficiencies that enable us
to compete effectively.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 03

Content

PAGE

Notice of Annual General Meeting 05 - 06

Brief History 07

Corporate information 08

Financial highlights 09

The Board 11 - 13

Chairman’s Statement 14 - 15

Report of the directors 17 - 27

Statement of Directors' responsibilities 28

Statement of Corporate Governance 30

Report of the Audit Committee 31

Report of the independent Auditors 32 - 33

Statement of profit or loss and 34
other comprehensive income

Statement of financial position 35

Statement of changes in equity 36

Statement of cash flows 40

Notes to the financial statements: 41 - 63

Statement of value added 64

Five-year financial summary 65

Shareholder Information 69

E-Dividend Mandate Form 72

Proxy Form 73

04 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

NOTICE OF ANNUAL GENERAL MEETING Notice of annual general meeting

NOTICE IS HEREBY GIVEN that the 40th Annual General Meeting of INTERNATIONAL
BREWERIES PLC will hold at the Banquet Hall, Zenababs Resort, Ilesa, Osun State on
Tuesday 12 September, 2017 at 11.00.a.m. for the following purposes:

ORDINARY BUSINESS

1 To lay before the meeting the report of the Directors, the Statement of
Financial Position as at 31 March, 2017, together with the Statement of
Comprehensive Income for the year ended on that date and the Reports
thereon of the Independent Auditors and the Audit Committee.

2 To re-elect/ approve the appointment of Director(s)
3 To authorize the Directors to fix the remuneration of the Independent Auditors
4 To elect the members of the Audit Committee.

SPECIAL BUSINESS

5 To approve the remuneration of the Directors.
6 To consider and if thought fit, pass the following resolution as an Ordinary

resolution:

“That the Company's year-end be changed from 31 March to 31 December of every
year with its first application being for the 9month period to 31 December, 2017."

Dated 23 May, 2017

By Order of the Board

Muyiwa Ayo.jimi
Company Secretary/General Counsel
FRC/2013/NBA/00000002667
Lawrence Omole Way

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 05

NOTES

NOTES 1. Proxy 4. Change of Address

A member entitled to attend and vote at the meeting is entitled Members are requested to notify the Registrar of changes, if
to appoint a proxy in his/her stead. Such Proxy need not be a any, in their registered addresses and or other details.
member of the company. A Proxy for a Corporation may vote on
a show of hands and on a Poll. A Proxy Form is attached to the 5. Unclaimed Dividend
Annual Reports and Accounts. If the Proxy is to be valid for the
purposes of the meeting, it must be completed, detached, with Members who are yet to claim their previous dividend(s) are
stamp duties and deposited with the Registrars, Apel Capital advised to write to or call at the office of the Registrars, Apel
Registrars, 8 Alhaji Bashorun Street, off Norman Williams, Capital Registrars, 8 Alhaji Bashorun Street, off Norman
S.W. Ikoyi, Lagos the office of the Company Secretary, Williams, S.W. Ikoyi, Lagos. Members are further urged to
International Breweries Plc, Ilesa not later than 48 hours prior advise the Registrar of any change in their security records and
to the time of the meeting. also, open a CSCS account.

2. Closure of Register and Transfer Books 6. Securities Holder's Rights

The Register of Members and Transfer Books will be closed In accordance with Rule 19.12 of the Nigerian Stock Exchange
from Monday 21 August, 2017 to Friday 25 August, 2017 "NSE", shareholders and other holders of the Company's
(both dates inclusive) for updating the Register of Members. securities have the right to ask questions not only at the
meeting but also can do so in writing prior to the meeting. Such
3. Nomination to the Audit Committee questions and or concerns, arising from the Annual Report and
Financial Statements may be submitted to the office of the
In accordance with Section 359 (5) of the Companies and Company Secretary with a copy to the NSE.
Allied Matters Act, Cap.C20, Laws of the Federation of Nigeria,
2004, any member may nominate a Shareholder as a member
of the Audit Committee by giving notice in writing of such
nomination to the Company Secretary at least 21 days before
the Annual General Meeting. Nomination of a member is
further guided by the prescribed rules of regulatory authorities
on Corporate Governance. In accordance with the provisions of
the Financial Reporting Council Act ("FRCN"), any nominated
member/chairman, must be a registered Chartered Accountant
professional with the FRCN for the purposes of signing the
financial statements.

06 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Brief History Brief History

International Breweries Plc was incorporated in December
1971 by its founder and first Chairman, Dr. Lawrence Omole
under the name International Breweries Limited. The Company
commenced production of its flagship product Trophy Lager in
December 1978 with an installed capacity of 200,000
hectoliters per annum.

Following the increasing demand for its products, in December
1982 the Company embarked on an expansion programme to
increase its capacity to 500,000 hectoliters annually. The
company was listed on the floor of the Nigerian Stock Exchange
in April 1995.

In 2008 a turnaround strategy was implemented and the
company successfully raised funds from the Nigerian Capital
market with the issuance of 1.6 million Ordinary Shares of 50
Kobo each at 87K per share. This funding started the
resurgence of the organization and its brands.

In 2008 the Warsteiner Group sold its majority shareholding to
the Castel Group and in January 2012 Castel group entered
into a strategic alliance with SABMiller Plc which has now been
acquired by ABInbev. During this period significant investment
was made which transformed the company and provided it with
a solid foundation for growth and profitability. Its flagship
brands are Trophy Lager and Betamalt.

The production facility and corporate headquarters of the
Company is located at Omi-Asoro, Ilesa in Osun State. In
addition, the Company operates depots in Ibadan, Lagos and
Ilorin to facilitate the re-distribution of its products in the wider
urban area.

With its strategic position in the South West and its increasing
portfolio of world class beverages the organization is perfectly
positioned to satisfy increasing consumer demand and in so
doing delivering superior returns for shareholders.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 07

Corporate Information

Corporate Information Chairman: Mr. Sunday Akintoye Omole -(appointed: 21March, 2017)
Mr. Otunba Michael Daramola - (resigned: 21 March, 2017)

Directors: Mr Michiel Oerlemans (South African) - Chief Operating Officer - (appointed: 21March, 2017)
Mr. Andrew Ross (South African) - (resigned: 21 March, 2017)
Mr. Gustav Van Heerden (South African)
Mrs. Afolake Lawal
Mr. Andries Du Plessis (South African)
Mr. Ryan Martin (South African)
Mr. Folorunsho Awomolo
Mr. Christopher Tyne (South African) - Executive

Alternate Directors: Mr. Olugbenga Awomolo (Mr. Folorunsho Awomolo)
Dr. (Mrs.) Idowu Osibodu (Mr. Sunday Akintoye Omole)
Ms. Abisola Olabinjo (Mrs. Afolake Lawal)

Company Secretary: Mr. Muyiwa Ayo. jimi

Registered Office: Lawrence Omole Way,
Omi Asoro, Ilesa.

Registered Number: RC 9632

Independent Auditors: Baker Tilly Nigeria,
Chartered Accountants,
Zion House,
46 Alaafin Avenue,
Oluyole Industrial Estate,
Ibadan.
Email: [email protected]

Registrar: Apel Capital Registrars Ltd,
No. 18 Alhaji Bashorun Street,
Off Norman Williams street,
Ikoyi, Lagos.
Email: [email protected]

Main Bankers: CitiBank Limited
Ecobank Plc.
First Bank of Nigeria Plc.
Guaranty Trust Bank plc.
Skye Bank Plc.
Stanbic IBTC Plc.
Standard Chartered Bank Limited.
Union Bank of Nigeria
Wema Bank Plc.
Zenith Bank Plc.
Rand Merchant Bank Ltd.

08 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Financial Highlights

2017 2016 Increase/ Highlights
N'000 N'000 (Decrease)

32,711,218 %
15,164,459
Key items in statement of comprehensive income: 23,269,364 40.58%
2,891,749 10,708,935 41.60%
Revenue 1,034,357 (20.92%)
Gross profit 3,656,826 (61.01%)
Profit before tax 44,962,735 2,652,748
Total comprehensive income for the year 31,083,975
13,878,760 33,482,106 34.29%
Key items in statement of financial position: 19,484,715 59.53 %
7,549,199 13,997,391 (0.85%)
Total assets 1,165,203
Total liabilities 7,901,718 (4.46%)
Total equity as at end of the year 7% 1,102,058 5.73%
46%
Key cash flow items from/ (applied to): 25% 19% (63.16%)
18% 46% 0%
Net cash flow from operating activities 86% 22%
Cash and cash equivalents at end of year 15% 13.64%
556 61% 20%
Key ratios:
31 kobo 40.98%
Net return on total equity 421 kobo
Gross profit to revenue 529 5.10%
Operating result on revenue
Operating result on total assets 81 kobo (61.73%)
Debt to equity 425 kobo (0.94%)

Headcount:

Number of employees

Information per 50kobo ordinary share:

Earnings per share
Net assets per share

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 09

Performance Indicators

REVENUE (N'000) PROFIT BEFORE TAX (N'000)

Highlights35,000,000 4,500,000
32,711,21830,000,0004,000,000
23,269,36425,000,0003,500,000
20,649,29520,000,0003,000,000
18,493,90715,000,0002,500,000
17,388,63210,000,0002,000,000
2,891,7491,500,000
3,656,8265,000,0001,000,000
2,815,554
3,925,500-500,000
3,555,546-

2017 2016 2015 2014 2013 2017 2016 2015 2014 2013

SHAREHOLDERS' FUNDS (NAIRA) NET ASSETS PER SHARE(NAIRA)

14,000,000 12,518,004 4.50
12,636,635 4.00
12,000,000 10,807,503 3.50
10,000,000 9,909,167 3.00
8,019,417 2.50
8,000,000 2.00
6,000,000 4.211.50
4,000,000 4.251.00
2,000,000 3.690.50
3
- 2.88-

2017 2016 2015 2014 2013 2017 2016 2015 2014 2013

EARNINGS PER SHARE(KOBO)

90
80
70
60
50
40
30
20
10
-

2017 2016 2015 2014 2013
31
81

59
64

71

10 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

The Board

International Breweries Plc

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 11

The BoardThe Board MICHIEL OERLEMANS
(Chief Operating Officer)
MR. SUNDAY AKINTOYE OMOLE
(Chairman) Mr. Michiel Oerlemans holds a Bachelor’s
degree in Business and financial management
Mr. Omole is a graduate of the premier respectively amongst other professional
University of Ibadan, B.sc Sociology (1982) a management courses. He started out his
graduate of accounting (1986) Association of career with South African Breweries about
chartered and certified Accountants, and a three decades ago, where he garnered
MBA graduate specializing in Human experience in the marketing, logistics and
Resources from Everest University, United distribution aspects of the Brewery business
States of America. and rose through the ranks to top
management. He has worked to develop and
Sunday has acquired wide working experience implement marketing, sales and operational
both locally and internationally. The scope of strategies with the now controlled ABInbev
his working life include accounting, auditing breweries in Lesotho, Northern region of
and tax practices, food and beverages Zambia and Ghana prior to his joining the
industries, commodities, futures market , Company.
financial services and human resources
management. MRS. AFOLAKE LAWAL
(Non-Executive Director)
Apart from being a director of International
breweries plc, a public quoted company on Mrs. Lawal is a co-founder of the GTI Group.
(The Nigerian Stock Exchange) he is also She is currently the Group Executive Director
director of other companies including Cardinal with over two decades wealth of experience in
Investments (Nigeria) limited, Mustard investment Banking, Corporate Governance
Concept LLc (United States of America), the and Business Strategy.
Omole Group and Universal foods and She is a certified Pension Practitioner and an
Beverages. Associate member of the National Institute of
Marketing of Nigeria (NIMN). This banking
MR. GUSTAV VAN HEERDEN amazon has an Upper Class (Hons) in Law
(Non-Executive Director) (LLB) from the Anglia Ruskin University,
Cambridge U.K. She is an alumnus of Obafemi
Mr. Van Heerden holds a Bachelor of Awolowo University and holds a Master
Commerce, a Certificate in Professional degree in
Management, an Advanced Diploma in International Law and Diplomacy from the
Professional Management, a Masters in University of Lagos. She also obtained a
Business Administration and an Advanced Master of Science in Corporate Governance
Postgraduate Certificate in Taxation. and Finance from the Liverpool John Moores
He has considerable years of experience in University in the U.K.
finance and accounting, auditing and taxation She serves on the board of International
which has been brought to bear in his work Breweries Plc and Etema Plc (both Companies
with various establishments like Coca-Cola quoted on The Nigerian Stock Exchange). She
prior to working with the SABMiller group in is currently the Chairperson of Etema Plc's
different capacities spanning over a decade. Governance and Remuneration Committee
He is a Professional Member of the South and also Chairperson, Governance and
African Institute of Tax Practioners; South General Purpose Committee of IBPlc.
African Institute of Professional Accountants
and Association of Chartered Certified
Accountants.
Mr. Van Heerden's inclusion on the Board of
International Breweries Plc would sure bring
immense value and significant contributions
to the further growth and development of the
Company.

12 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

MR. ANDRIES DU PLESSIS The Board
(Non-Executive Director)
Mr. Du Plessis joined the SABMiller Group
(Coca-Cola Bottling Luanda SARL) in 2004
and has worked in a number of different
businesses in the group. These include
SABMiller Vietnam, Tanzania Breweries
Limited, and as Business Development
Manager for Coca-Cola Bottling Luanda SARL.
Andries was appointed Finance Director,
SABMiller Nigeria in 2009 and having
identified his experience of the Africa and
Nigeria market in particular, he was appointed
the Commercial Director, SABMiller Nigeria
overseeing the businesses in 2012 and
recently Managing Director, SABMiller,
Nigeria.

MR. OLUGBENGA AWOMOLO
(Alternate Director)
Mr. Awomolo is currently an Executive
Director (Operations) at Alumaco Plc and sits
on the Board of several companies. He has
worked in different capacities as an
Investment Executive at Newco Investment
Limited, Nigeria, as an Immigration
Consultant at Midwest Immigration
Consultants, in the United States and as an
Operations manager at Midwest Staffing
Group, USA. He also has a Law degree from
the University of Wales, Cardiff.

MR. MUYIWA AYOJIMI (Secretary to the Board)

Mr. Ayojimi is a Barrister, Solicitor of the Supreme Court and Notary
Public of Nigeria with substantial years of Law practice which has cut
across various degree of legal work including advice on regulatory and
corporate compliance issues and extensive practice before superior
courts of record in Nigeria.
He is a member of the Institute of Chartered Secretaries and
Administrators, Chartered Institute of Arbitrators, International
Corporate Governance Network, Nigerian Institute of Management,
The International Bar Association and the Nigerian Bar Association.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 13

Chairman's Statement

Chairman's Statement Fellow Shareholders, my colleagues
on the Board, the media, ladies and
gentlemen.
In the over four decades of our
Company's existence, nothing has
ever stood still.

The pace of change has never been
anywhere near as rapid as it is today
and looking ahead, I suspect it will
never be slow.

With this, I welcome you to the 40th
Annual General Meeting of our
Company.

ECONOMIC OUTLOOK the challenges facing our economy operating environment during the
The global economy continued with and the manufacturing industry at year, the company ended the
seemingly moderate growth. large. financial year with a marked
Recession was trending amid, improvement on year-on-year top
weakening oil and other commodity OPERATING ENVIRONMENT line (revenue) growth and operating
price increases, all materialized The year under review was indeed profit. Specifically, Revenue, Gross
among emerging markets. In Nigeria, challenging to say the least. With Profit and Operating Profit grew by
the year began with the depreciation significant decline in the gross about 40.6%, 41.6% and 57.3%
of the naira against the dollar and domestic product, unprecedented respectively.
uncertainty around core economic increase in inflation rate and coupled However, compared with the prior
policies which affected the with insecurity and fierce year, profit before tax dipped by
disposable income of consumers. competition, 2017 was indeed tough about 21%. This was mainly due to
The combination of other economic for our business. exchange loss incurred on
factors particularly, the currency revaluation of the company's foreign
volatility contributed to foreign BUSINESS PERFORMANCE loan facilities occasioned by the
exchange losses in most Our Company increased its focus on devaluation of the Naira. The year-
manufacturing Companies balance strategic planning in the year under on-year net profit also fell by over
sheets. Where government import review with sustained product 60% with a concomitant drop in EPS
manufacturers input to policy expansion offerings to our consumers by same percentage.
decisions, implementation of these and cost management to support top
policies would not only be line growth. A RESPONSIBLE BUSINESS
successful, but greatly ameliorate Notwithstanding the challenging Today, we are managed by the

14 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Chairman's Statement (cont’d) Chairman's Statement (cont’d)

world's largest brewer and one of the retired as Chairman of the Board and portfolio of world leading brands has
world's leading consumer Product the resignation of Mr. Andrew Ross created a confidence of a stronger
Company. We have therefore as Chief Operating Officer of the presence of our Company in the
imbibed the dream, people and Company was also accepted by the comity of brewers in the markets that
culture attitude towards ensuring Board. we play in. We will continue to
best practices in all of our processes I place on record our appreciation for intensify our efforts towards a better
and affairs. Our safety and the indefatigable efforts of the duo in business sustenance. Our proposed
environmental indices received a four shaping and implementing our core business combination process which
star rating in the year under review, policies and values towards an would create better value for
an improvement from prior year as enduring success story for our shareholders and establish a strong
we all share a continuing zest to Company and wish them the utmost position for the Company in Africa's
ensure personal responsibility and best in their emerging endeavours. largest economy is hereby
dedication to best practices, putting Fellow shareholders, your Board commended to us all for our support
consumer's interest first and living up remains committed to ensuring that as more information is released and
to our dream culture. As part of the Company is directed to run the statutory clearances
creating stakeholder and consumer profitably and by so doing, sustain a /transactional meetings progresses.
value and amongst other responsible dividend declaration regime. In the
business activities, the Company in outgone year, the Board was unable CONCLUSION
the second edition of its to recommend a dividend having With the firm commitment of our
empowerment project - The Kick been guided by its dividend policy. shareholders, the passionate
Start programme has funded about a The Board arrived at this decision dedication of our people, we look
hundred youths to kick start their having considered the high gearing forward to the continuous
entrepreneurial dreams. This has ratio of the Company, the risk of a celebration of our progress and
contributed our quota to the further currency devaluation, the milestone achievements with you in
reduction of unemployment in the Company's short and long term the emerging years.
Country. expansion programs and the
emerging strategic business Thank you.
GOVERNANCE AND BOARD decisions. This decision was taken in
The year under review witnessed the future interest of the Company. Sunday Akintoye Omole
sustained adherence to the tenets of Chairman
corporate governance. The Board FUTURE OUTLOOK
and director's effectiveness in the We are determined to capture new
discharge of its duties was evaluated growth opportunities while
and adjudged commendable by an maintaining a focus on the long-term
independent assessor. growth prospects for our business.
Penultimate the end of the financial The Company's management by the
year, Otunba Michael Daramola best brewer in the world with diverse

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 15



REPORT OF
THE DIRECTORS

FOR THE YEAR ENDED 31 MARCH 2017.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 17

Report of the directors

Report of the directors The directors have the pleasure of submitting their report together with the audited annual financial statements for the year ended
31 March 2017.

1 Legal form

International Breweries Plc was incorporated as a private limited liability company on 22 December, 1971 and became a public
limited liability company on 26 April, 1994.

2 Principal activities and business review

The principal activities of the company continue to be brewing, packaging and marketing of beer, alcoholic flavoured and non-
alcoholic beverages and soft drinks.

3 Operating summary

2017 2016
N'000 N'000

Revenue 32,711,218 23,269,364

Profit before tax 2,891,749 3,656,826
Taxation (1,857,392) (1,004,078)
Profit after tax for the year
1,034,357 2,652,748

Per 50 kobo share data 16 20
Market value as at 31 March, 2017 (Naira)

4 Dividend Declaration

The Board maintains a dividend policy which guides its decision on dividend declaration.
The Directors resolved not to recommend the payment of a dividend for the year ended 31 March, 2017 owing to the company’s
gearing ratio in line with this policy. The Board views this decision as appropriate in the circumstance and in the future interest of the
company. (2016: 35kobo; 2015: 25kobo).

5 Directors
The names of the current directors are as set out in the corporate information on page 8. All the current directors served throughout
the period except for the former Chairman, Otunba Michiel Daramola and the Chief Operating Officer (COO), Mr. Andrew Ross who
resigned their appointments on the board during the year. While Mr. Sunday Akintoye Omole replaced Otunba Michael Daramola as
the Chairman of the board, Mr. Michael Oerlemans took the place of Mr. Andrew Ross as the new Chief Operating Officer "COO" of
the company. Both directors served on the Board until their resignation from the board on 21 March, 2017. On behalf of all the
shareholders, we once again, thank particularly Otunba Michael Daramola and Mr. Andrew Ross for their immeasurable
contributions to the Company during their period of service.

18 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the directors (cont’d)

Details of the Directors interest in the company’s shares during the year are set out below. Report of the directors (cont’d)

Directors' shareholding 2017 % 2016 %
Name Number Number
-
Direct holding: 50,247 - 50,247 0.08
Mr. Sunday Akintoye Omole 1,582,694
Mrs. Afolake Lawal 1,582,694 0.08 3.25
0.03
Indirect holding:

Mr. Folorunsho Awomolo

(Through Newco Investment Company Limited) 106,904,126 3.25 106,904,126
0.03 968,087
Mr. Sunday Akintoye Omole

(Through Cardinal Investment Nigeria limited) 968,087

6 Directors' interest in contracts 19
The directors have complied with the provisions of Section 277 of the Companies and Allied Matters Act, Cap.20 LFN
2004 at the date of this report.

7 Corporate Governance
This report describes the directors' approach to corporate governance and how the board applied the Codes on
corporate governance and other applicable regulations.

The directors are committed to maintaining the best standard which they believe is pivotal to the discharge of their
stewardship expectations. In his statement as contained in this annual report, the Chairman captures the essence of
the principles of the code in relation to the role and effectiveness of the board. During the year under review the
company further established good corporate governance practices in line with the conviction of the company rather
than a perfunctory response to the threat of regulatory sanctions. The company’s conviction is that corporate
governance practices should be accorded a more practical approach in enhancing company ideals and management
performance.

In compliance with the SEC Code on Corporate Governance, a Board evaluation was conducted by SIAO in the year
under review and their opinion is expressed on page 30 of the annual report.

(i) Leadership and effectiveness

Board of directors: composition, independence and renewal

The board is currently composed of the chairman, five non-executive directors and two executive directors.
The board considers its eight directors- Mr. Akintoye Omole, Mr. Michiel Oerlemans; (subject to ratification of
appointment as a director at the next AGM) , Mr. Ryan Martin, Mrs. Afolake Lawal, Mr. Olugbenga Awomolo, Mr.
Christopher Tyne, Mr. Gustav Van Heerden and Mr. Andries Du Plessis as independent for the purpose of their
continuing to bring their invaluable integrity, corporate wisdom and experience towards the board and committee’s
deliberations. The board is therefore satisfied with the performance and continued independence of judgment of each
of the directors.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the directors (cont’d)

Report of the directors (cont’d) The directors to retire by rotation are Mr. Andries Du Plessis and Mrs. Afolake Lawal and being eligible have offered themselves for re
election at the annual general meeting. The board is of the view that there is an appropriate balance of skills, collective experience
amongst directors to ensure the discharge of their respective duties efficiently.

(ii) The Board's Operation

Board meetings and attendance
The Board of directors met five times during the year. Individual director’s attendance at these meetings is as set out in the table
below. In the few instances where a director was unable to attend a board or committee meeting, his or her alternate attended in
his/her stead and any comments which they had on matters set out in the agenda for consideration at such meeting was given in
advance to the chairman of the meeting.

Analysis of attendance of meetings of Board members

NAME OF DIRECTOR NUMBER OF
MEETINGS
ATTENDED
Total

----------------------------Date of meeting----------------------------

05/05/2016 19/05/2016 09/08/2016 11/11/2016 21/03/2017

Mr. Akintoye Omole (Chairman) Y Y Y Y Y 5/5

Otunba Michael Daramola (RDY) Y Y Y Y Y 5/5

Mr. Michiel Oerlemans (C.O.O.)(ADY)- -- - Y 1/1

Mr. Andrew Ross (RDY) Y YY Y Y 5/5

Mr. Ryan Martin Y YY Y Y 5/5

Mr. Christopher Tyne (Exec. Dir.) Y X Y Y Y 4/5

Mr. Gustav Van Heerden Y YY X Y 4/5

Mrs. Afolake Lawal Y YY Y Y 5/5

Mr. Andries Du Plessis Y YY Y Y 5/5

Mr. Olugbenga Awomolo Y‡ Y‡ Y‡ Y‡ Y‡ 5/5

(ADY) - Appointed during the year Y Present
(RDY) – Resigned during the year X Absent
‡ Alternate Director
- Not a member of the Board as at that date

20 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the directors (cont’d) Report of the directors (cont’d)

OPERATION OF THE BOARD committee has specific written terms of the group are set out in Note 34.
The board sets the strategic objectives reference and committee charters. All
and delegates to management the committee chairmen or their CONFLICT OF INTEREST
detailed planning and implementation of representatives report to the board and The directors are aware and advised to
those policies. The board thereafter their decision extracts are included in the avoid situations where they have, or can
monitors compliance of the actualization board packs circularized to all the board have, a direct or indirect interest that
of the set policies and objectives through members two weeks before their conflicts, or may possibly conflict with
quarterly reports to the board and its meetings. the company's interests and encouraged
committees, enabling directors to explore to make full disclosures. In accordance
and interrogate specific issues for RISK AND THE BOARD OF DIRECTORS with the Companies and Allied Matters
feedback in greater detail. The company's Board of Directors is Act 2004 and the company's articles of
ultimately responsible for the company's association, the
The Board had received and adopted the risk management system board can authorize potential conflicts of
code of conduct regarding securities and for reviewing its effectiveness. The interest that may arise and to impose
transactions and has complied with the company, through its training and such limit or conditions as it may deem
required standard as prescribed by the management standards and procedures, fit. There were however, no actual or
Nigerian Stock Exchange listing rules and aims to develop a disciplined and potential conflicts of interest which were
in the issuer's code of conduct. constructive control environment in required to be authorized by the board
which all employees understand their during the year ended 31 March 2017.
The Board in the year under review has roles and obligations. The risk
also complied with the creation of the management system is designed to THE ROLES OF EXECUTIVE AND NON-
Complaint Management Policy of the manage, rather than eliminate, the risk of EXECUTIVE DIRECTORS
Securities and Exchange Commission failure to achieve business objectives and The executive directors are responsible
which became effective in 2015. there is an ongoing process in place for for proposing strategy and for making and
identifying, assessing, managing, implementing operational decisions.
Complaints from shareholders or monitoring and reporting on the Non-executive directors complement the
stakeholders can be addressed to the significant risks faced by the company. skills and experience of the executive
registrars, APEL Registrars Limited or the directors, bringing independent
Company Secretary of the Company The company's Audit Committee judgment and making inputs through
whose contacts are on page 8 of this oversees how management monitors their knowledge and experience of other
annual report. More details on the Policy compliance with the company's risk businesses and sectors.
can be assessed on the Company's management policies and procedures,
website and reviews the adequacy of the risk INFORMATION DISSEMINATION AND
management framework in relation to the TRAINING
MATTERS OF EXCLUSIVE PRESERVE risks faced by the company. The Audit The Company Secretary is responsible for
The board has a schedule of matters as Committee is assisted in its oversight role advising the board, through the
contained in an approval grid which is by Internal Audit. Internal Audit chairman, on issues of corporate
dealt with exclusively by the board. This undertakes regular reviews of risk governance. The secretariat supplies the
includes but not limited to the approval of management controls and procedures, board and its committees with full and
financial statements; annual expenditure the results of which are reported to the timely information through meeting
/budget plan; material investment or Audit Committee. packs and other sufficient resources to
disposals; Company's business strategy. enable directors to prepare adequately
This process has been in place for the for their meetings and take informed
The board governs through its period under review up to the approval of decisions.
established committees with reporting the Annual Report and Accounts. The
systems. Each committee or standing principal risks and uncertainties facing The company is committed to the

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 21

Report of the directors (cont’d) Report of the directors (cont’d)

continuing development of directors in reviewed its performance prior year, a compliance with Rule (2c) of the
order that they can build on their formal and confidential evaluation of the Financial Reporting Council “FRC” which
expertise and develop an ever more performance and effectiveness of the relates to the fact that Chairmen of the
detailed understanding of the business board and its principal committees, by an Audit Committee are to execute the
and the ever changing legal and independent consultant was undertaken financial statements only if they are
regulatory environment. by SIAO for the year under review. Chartered accountants.
Summary of their report is contained in The external auditors and the executive
OTHER APPOINTMENTS the annual report. director, finance attended the committee
Non-executive directors may serve on the meetings by invitation. The work of the
boards of other companies in order to THE COMPANY SECRETARY committee during the year included Audit
widen their experience and The Company Secretary who acts as matters and reviews.
knowledge for the company's benefit. secretary to the board and its committees The audit committee reports all activities
Directors ensure that their effectiveness attended all the meetings during the year and makes recommendations to the
on the board is not compromised by their under review. board. During the period under review,
external commitments. The board is the audit committee discharged its
pleased that the chairman and the non- (III) THE BOARD COMMITTEES responsibilities as they are defined in the
executive directors commit sufficient committee's terms of reference and has
time to their duties and the non-executive The Audit Committee ensured that applicable standards of
directors have confirmed that they have The audit committee chaired by Mr. governance and compliance are adhered
sufficient time to fulfil their respective Oladepo Adesina met four times during to.
obligations to the company. the year under review. The members are
Mr. Moses Ijayekunle and Mr. Timothy The internal audit manager has direct
BOARD, COMMITTEE AND DIRECTOR Adejuwon representing the shareholders; access to the committee, primarily
PERFORMANCE EVALUATION Mr. Akintoye Omole, Mrs. Afolake Lawal through its chairman. The internal audit
The Board subscribes to performance and Mr. Ryan Martin representing the department has the benefit of adapting
evaluation processes in line with best board. the workings and processes of approved
practice. While the Board periodically The Company had requested a waiver on international and best practice templates
for improved efficiency.

Analysis of attendance of meetings of Audit Committee members

NAME OF 5/05/ Date 10/11/ 21/03/ NUMBER
AUDIT COMMITTEE 2016 08/08/ 2016 2017 OF MEETINGS
MEMBER 2016 ATTENDED
Total

Mr. Oladepo Adesina - (Chairman/Shareholder) Y YY Y 4/4
(Member/Shareholder) Y YY Y 4/4
Mr. Moses Ijayekunle - (Member/Shareholder) Y YY Y 4/4
Member/Director Y YY Y 4/4
Mr. Timothy Adejuwon- Member/Director Y YY Y 4/4
(Member/Director) Y YY Y 4/4
Mr. Akintoye Omole -

Mrs. Afolake Lawal -

Mr. Ryan Martin -

22 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the directors (cont’d) Report of the directors (cont’d)

The Governance Committee
The name of the Committee was changed from Governance and General Purpose Committee to Governance Committee following
the creation of the Risk management and Remuneration Committee.

The committee consists of the Chairperson, Mrs. Afolake Lawal and two members - Mr. Ryan Martin and Mr. Olugbenga Awomolo.
During the period under review, the committee amended its charter to focus on governance and industry issues critical to protecting
the company's license to operate as well as other matters deserving of appropriate attention as contained in the committee's charter.

Analysis of attendance of meetings of Governance Committee members

NAME OF GOVERNANCE --------------------Date------------------------- NUMBER OF
COMMITTEE MEMBER MEETINGS ATTENDED
08/08/2016 10/11/2016 Total
Mrs. Afolake Lawal
Mr. Olugbenga Awomolo YY 2
Mr. Ryan Martin 2
YY 2

YY

8 Share capital
During the year, the number of the company's issued ordinary share capital remained at 3,294,249,280 ordinary shares.
Details of share capital are shown on note 23.

Active shareholders range - summary position as at 31/03/2017

RANGE ANALYSIS AS AT 31-03-2017

Range No. of Holders Holders % Holders Cum. Units Units % Units Cum.
1 - 1,000 0.30% 9,861,917
1,001 - 5,000 17,855 44.06% 17,855 9,861,917 1.14% 47,299,972
5,001 - 10,000 1.26% 88,946,923
10,001 - 50,000 14,954 36.90% 32,809 37,438,055 1.58% 141,024,497
50,001 - 100,000 0.58% 160,043,849
100,001 - 500,000 4,898 12.09% 37,707 41,646,951 1.04% 194,152,566
500,001 - 1,000,000 0.59% 213,539,389
1,000,001 - 2,400,000,000 2,312 5.70% 40,019 52,077,574 93.52% 3,294,249,280
100.00%
Grand Total 276 0.68% 40,295 19,019,352

163 0.40% 40,458 34,108,717

24 0.06% 40,482 19,386,823

45 0.11% 40,527 3,080,709,891

40,527 100.00% 3,294,249,280

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 23

Report of the directors (cont’d) Report of the directors (cont’d)

Substantial shareholding.

The particulars of the shareholders that held more than 5% of the issued and fully-paid share capital of the company as at 31
March, 2017 and at the date of this report are as follows:

Brauhaase International Management GMBH. 2,377,579,013 72.17%
Stanbic IBTC Nominees Nigeria Limited 170,389,023 5.17%

Shareholding by category:

SHARHOLDING STRUCTURE AS AT 31 MARCH, 2017

S/N CATEGORY OF NO. OF NUMBER OF PERCENTAGE
SHAREHOLDER SHAREHOLDER SHARES HELD HOLDING [%]

1 INDIVIDUALS 39,904 315,065,060 9.56

2 INSTITUTIONAL INVESTORS 17.37
0.00
Corporate 597 572,221,606 0.01
125,700 0.88
Institution 16 313,500
28,913,401 0.00
Pensioner 2
72.17
Tax free 5
100.00
3 STATE & LOCAL GOVT 2 31,000

4 FOREIGN SHAREHOLDER 1 2,377,579,013
Portfolio Investor

Total 40,527 3,294,249,280

Purchase of own shares
The company did not purchase any of its own shares during the period under review.

24 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the directors (cont’d) Report of the directors (cont’d)

Purchase of own shares
The company did not purchase any of its own shares during the period under review.

Authorised (N) Issued and Fully Paid-up (N)
Increase
Date Cumulative Increase Cumulative Consideration
-
1971 1,000,000 4,500,000 - 4,500,000 Cash
1978 5,500,000 - 4,500,000
1980 - 5,500,000 1,000,000 5,500,000 Cash
1981 2,500,000 8,000,000 1,300,000 6,800,000 Cash
1981 8,000,000 1,100,000 7,900,000 Bonus
1982 - 8,000,000 100,000 8,000,000 Cash
1982 - 10,000,000 1,000,000 9,000,000 Bonus
1983 2,000,000 10,000,000 1,000,000 10,000,000 Bonus
1985 - 15,000,000 2,000,000 12,000,000 Bonus
1986 5,000,000 15,000,000 3,000,000 15,000,000 Bonus
1988 - 20,000,000 3,000,000 18,000,000 Bonus
1989 5,000,000 20,000,000 2,000,000 20,000,000 Bonus
1991 - 50,000,000 5,000,000 25,000,000 Bonus
1992 30,000,000 50,000,000 15,841,770 40,841,770 Cash
1993 - 50,000,000 2,709,846 43,551,616 Cash
1994 - 150,000,000 2,496,000 46,047,616 Cash
1995 100,000,000 150,000,000 51,867,000 97,914,616 Cash
1996 - 150,000,000 204,000 98,118,616 Cash
1998 - 150,000,000 213,000 98,331,616 Cash
1999 - 150,000,000 51,608,000 149,939,616 Cash
2001 - 260,000,000 60,384 150,000,000
2002 110,000,000 260,000,000 106,457,341 256,457,341 Csha
2007 - 1,500,000,000 - 256,457,341 Cash
2008 1,240,000,000 1,500,000,000 800,000,000 1,056,457,341
2009 1,500,000,000 1,056,457 ,341 Cash
- -
2012 2,000,000,000 Cash
2014 500,000,000 574,805,874 1,631,263,215 Bonus
15,861,425 1,647,124,640

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 25

Report of the directors (cont’d) Report of the directors (cont’d)

9 Corporate social responsibility.

During the period, the company's corporate social responsibility towards its immediate and surrounding communities, especially in
respect of community development, health and education, the environment and other social welfare, was again demonstrated in the
various projects executed during the year and other donations both in cash and in the company's products to various institutions and
community centres. One of the major projects carried out by the company during the year is the continuation of the Youth Enterprise
Development Initiative tagged “KICK START” initiated in the last financial year.

The Kick Start program is aimed at creating a culture of entrepreneurship among young people by promoting business awareness
and material support through the development of business skills by training; providing grants as start-up capital for new businesses
or grants to support expansion of existing businesses; and providing post investment support through mentoring and coaching. The
amount expended on the program as at 31 March, 2017 was thirty-six million, two hundred and forty-eight thousand Naira
(N36.248 million) (2016: N34 million). Other beneficiaries of the corporate social responsibility program of the company are as
listed below. Total expenditure for the year (including donations) was about N55 million (2016: N80 million). This excludes gifts in
company products during the year.

Community projects and donations during the year included the following:

N'000

Continuation of kick Start program (Youth development) 36,248

Construction of Garden Park at Erin-Jesa (Phase 1: still under construction) 8,000

Building of toilets and construction of well and overhead tank for Omi Asoro Clinic 4,000
and maternity Centre, Ilesa

Construction of stage and toilet at Methodist Events Centre, Ilesa 2,000

Building of bus stops at Irojo and Ogedengbe , Ilesa 2,000

Donation of drugs and clinic materials to Omi Asoro Clinic and Maternity Centre, Ilesa. 1,300

Donation of Airconditioner & Generator to Onimo of Imo 500

Road patching at Omi Asoro 500

54,548
=====

26 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the directors (cont’d) Report of the directors (cont’d)

It remains the company's policy not to 11 Employment, environmental have indicated their willingness to
make donations to political and social policies continue as auditors to the company. A
organisations in the country and in resolution will be proposed at the Annual
compliance with section 38(2) of the The company strives to be the employer General Meeting to authorise the
Companies and Allied Matters Act Cap of choice in the Fast-Moving Consumer directors to fix their remuneration.
C 20, Laws of the Federation of Nigeria Goods (FMCG) sector. To achieve this,
2004, the Company did not make any management designs and continually 14 Financial Risk
donation or gift to any political party, reviews employment policies which Information on the company's financial
political association or for any political attract, retain and motivate the highest risk management objectives and policies
purpose during the year under review. quality of staff. Management is and details of its exposure to price risk,
committed to an active equal credit risk, liquidity risk and cash flow
10 Ethical business conduct opportunities policy, from recruitment risk are contained in note 35 to the
The International Breweries Code of and selection, through training and financial statements.
Business Conduct and Ethics sets out the development, appraisal and promotion to The directors are responsible for the
high ethical standards with which all retirement. It is the company's policy to management of the business of the
company's employees are expected to ensure that everyone is treated equally, company and may exercise all the
comply, and forms part of the wider regardless of gender, colour, nationality, powers vested on them by the company
programme of policies and procedures ethnic origin, race, disability, marital subject to the articles of association and
throughout the company for combating status, religion or trade union affiliation. relevant statutes.
bribery and corruption. The company The benefit of employing people of
personnel are committed to conducting different races, genders, creeds and 15 Post balance sheet events
business in a way that is fair, ethical and backgrounds is highly cherished. If There are no post balance sheet events
within the framework of applicable laws employees become disabled, efforts are which could have had a material effect on
and regulations. During the course of the made to allow them to continue in their the state of affairs of the company as at
year, the company's policies and role, or a suitable alternative role, the balance sheet date being 31 March,
procedures were reviewed in light of through making reasonable adjustments. 2017 which have not been adequately
related 'adequate procedures' guidance, disclosed in these financial statements.
and developing corporate best practice, 12 Research and development
and made a number of enhancements, To ensure improved overall operational By Order of the Board
including the roll out of a new company- effectiveness, considerable emphasis is
wide anti-bribery policy. Key aspects placed on research and development in Dated 23 May, 2017.
covered by the programme include, the company's technical activities,
amongst other matters, our anti-bribery through its ultimate parent company, the Muyiwa Ayo. jimi
policy, due diligence and other forms of AB InBev. Group. This enables it to Company Secretary/General Counsel
assurance in relation to business develop new products, packaging, Ilesa, Nigeria.
partners, training of employees and processes and new manufacturing FRC/2013/NBA/00000002667
monitoring and reporting mechanisms. designs.
Independent confidential whistle blower
hotlines had been previously introduced 13 Going concern and audit
into the company's operations so that The directors are satisfied that
employees can report any breach of our International Breweries Plc is a going
Code, including bribery, fraud or concern.
corruption. In accordance with Section 357(2) of the
Companies and Allied Matters Act, Cap.
C20 LFN 2004, Messrs. Baker Tilly
Nigeria (Chartered Accountants)

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 27

Statement of the directors' responsibilities Statement of the
directors' responsibilities

The Directors accept responsibility for the preparation of the annual financial statements for the year ended 31 March, 2017, set out
on pages 34 to 65 that give a true and fair view in accordance with the International Financial Reporting Standards (IFRS) and in the
manner required by the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria, 2004 and the Financial
Reporting Council of Nigeria Act, 2011.

The Directors further accept responsibility for maintaining adequate accounting records as required by the Companies and Allied
Matters Act, Cap C. 20 LFN 2004 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.

The Directors have made an assessment of the company's ability to continue as a going concern and have no reason to believe the
company will not remain a going concern in the year ahead.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

Akintoye Omole Michiel Oerlemans Chris Tyne
Chairman Chief Operating Officer Executive Director, Finance
FRC/2017/IODN/00000016560 FRC/2017/IODN/00000016579 FRC/2013/IODN/000000008084

23 May, 2017

28 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements



SIAO Lagos: 18b Olu Holloway Road, Ikoyi, Lagos.
Tel: 01 463 0871 Fax: 01-463 870

Abuja: 1st Floor, Bank of Industry Building
Central District Area, FCT, Abuja.
Tel: 09-291 2462-3
E-mail: [email protected]
Website: www.siao-ng.com

Statement of
corporate governance

SIAO was appointed to conduct International Breweries Plc’s Board Evaluation. The review covered the period of 31st
March, 2016 to 31st March, 2017. The audit report was signed by a Partner on behalf of SIAO.

The report was prepared independent of the company’s influence and in compliance with the SEC Code of Corporate
Governance (2011) for publicly quoted companies.

It is our responsibility to express an opinion on the corporate governance matters of the Company between 31st March,
2016 and 31st March, 2017, and having studied all documents pertaining to the corporate governance account and
based on that reading and our knowledge of the company, we believe that we have a sufficient basis of our opinions.

This means that our statutory examination of the corporate governance statement is different and substantially less in
scope than an audit conducted in accordance with International Auditing Standards, and generally accepted auditing
standards in Nigeria.

The Corporate Governance Statement has been prepared and its statutory content is consistent with the annual
accounts and the consolidated accounts.

In our opinion, during the period under review, the Company complied substantially with the major corporate
governance requirements outlined above. These requirements are prescribed by the SEC Code of Corporate
Governance (2011)

----------------------------------
Ladi Smith, FCA For: SIAO
FRCN No. 2013/ICAN/00000003796

Date: .........................................

30 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the audit committee Report of the audit committee

In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act, Cap. C20 LFN 2004, we the
members of the Audit Committee of International Breweries Plc, having carried out our statutory functions under the Act, hereby
report as follows: -

(a) That the accounting and reporting policies of the Company are in accordance with legal
requirements and acceptable ethical practices.

(b) That the scope and planning of both the external and internal audit for the year ended
31 March, 2017 are satisfactory and reinforce the company's internal control systems.

(c) That having reviewed the External Auditors' findings and recommendations on management matters, we are satisfied with
management responses thereon.

Finally, we acknowledge the co-operation of management, staff and the external auditors - Messrs Baker Tilly Nigeria in the conduct
of our duties.

Dated this 22of May, 2017. Mr. Oladepo Adesina
FRC/2013/NIM/00000003678
Members of the Audit Committee
1. Mr. Oladepo Adesina Chairman
2. Mr. Moses Ijayekunle
3. Mr. Timothy Adejuwon - Shareholder (Chairman)
4. Mrs. Afolake Lawal
5. Mr. Akintoye Omole - Shareholder Member
6. Mr. Ryan Martin
- Shareholder Member

- Director Member

- Director Member

- Director Member

The company applied for and was granted a waiver from the Financial Reporting Council of Nigeria for non-compliance with the
Transitional Concessions Agreed between the NSE & the FRC regarding rules 1 and 2 of the FRC's Rules, published by the NSE on
March 29, 2016, with reference No: NSE/LARD/LRD/CIR5/16/03/29 with respect to the signatory to the Audit Committee
Report.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 31

Report of the independent Auditors BAKERTILLY
NIGERIA

Chartered Accountants

Zion House, 46 Alaafin Avenue
Oluyole Industrial Estate
P. O. Box 36808
Ibadan, Nigeria
Tel: +234 (0) 8111474671

+234 (0) 8131826784
E-mail: [email protected]
Website: www.bakertillynigeria.com

Report of the
independent Auditors

TO THE MEMBERS OF INTERNATIONAL BREWERIES PLC

Report on the financial statements Standards Board (IAASB), We are misstatements, selecting and applying
We have audited the accompanying independent of the company in appropriate accounting policies, and
financial statements of International accordance with ethical requirements making accounting estimates that are
Breweries Plc, for the year ended 31 that are relevant to our audit of the reasonable in the circumstances.
March, 2017, set out on pages 34 to 40 financial statements, and we have
and 42 to 65 which have been prepared fulfilled our other ethical responsibilities Auditor's responsibility
on the basis of accounting policies on in accordance with these requirements. Our responsibility is to express an
note 3, pages 42 to 49 and other We believe that the audit evidence we independent opinion on these financial
explanatory notes on pages 49 to 63. have obtained is sufficient and statements based on our audit. We
appropriate to provide a basis for our conducted our audit in accordance with
Opinion opinion. the International Standards on Auditing
In our opinion, the financial statements (ISAs). Those standards require that we
give a true and fair view of the company’s Directors' responsibility for the financial comply with ethical requirements and
financial position as at 31 March, 2017, statements plan and perform the audit to obtain
its financial performance and cash flows The Directors are responsible for the reasonable assurance about whether the
for the year ended on that date in preparation and fair presentation of these financial statements are free from
accordance with the International financial statements in accordance with material misstatement.
Financial Reporting Standards, the International Financial Reporting
Companies and Allied Matters Act, CAP Standards , and with the requirements of An audit involves performing procedures
C20 LFN, 2004 and the Financial the Companies and Allied Matters Acts, to obtain audit evidence about the
Reporting Council Act 2011. CAP C20 LFN, 2004 and the Financial amounts and disclosures in the financial
Reporting Council Act 2011. This statements. The procedures selected
Basis for opinion responsibility includes: designing, depend on the auditor's judgement,
We conducted our audit in accordance implementing and maintaining internal including the assessment of the risks of
with the International Standards on control relevant to the preparation and material misstatement of the financial
Auditing (ISAs) issued by the fair presentation of the financial statements. In making those risk
International Auditing and Assurance statements that are free from material assessments, the auditor considers

an independent member of

BAKER TILLY

INTERNATIONAL

32 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Report of the independent Auditors (cont’d) Report of the independent Auditors (cont’d)

internal control relevant to the entity's management, but are not intended to company; and
preparation and fair presentation of the represent all matters that were discussed
financial statements in order to design with them. These matters were iii. The company's statement of
audit procedures that are appropriate in addressed in the context of our audit of financial position and statement of
the circumstances, but not for the the financial statements as a whole, and comprehensive income are in
purpose of expressing an opinion on the in forming our option thereon, and we do agreement with the books of
effectiveness of the entity's internal not provide a separate opinion on them. accounts.
control. An audit also includes evaluating
the appropriateness of accounting As stated in note 19 no actuarial IBADAN, Nigeria
policies used and the reasonableness of valuation was undertaken to ascertain 24 May, 2017.
accounting estimates made by the the liabilities on staff gratuities.
Directors, as well as evaluating the
overall presentation of the financial Report on other legal requirements
statements. The Companies and Allied Matters Act,
CAP C20 LFN, 2004 requires that in
We believe that the audit evidence we carrying out our audit we consider and
have obtained is sufficient and report to you on the following matters.
appropriate to provide a basis for our We confirm that:
opinion.
I. We have obtained all the information
Key Audit Matters and explanations which to the best
Key audit matters are those matters that, of our knowledge and belief were
in our professional judgment, were of necessary for the purpose of our
most significance in our audit of the audit.
financial statements of the period under
review. Key audit mattes are selected ii. In our opinion, proper books of
from the matters communicated with account have been kept by the

an independent member of

BAKER TILLY

INTERNATIONAL

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 33

Statement of profit or loss Statement of profit or loss
and other comprehensive income and other comprehensive income

FOR THE YEAR ENDED 31 MARCH, 2017

Continuing operations Note 2017 2016
Revenue N'000 N'000
Cost of sales 5
Gross profit 6 32,711,218 23,269,364
Other income (17,546,759) (12,560,429)
Marketing and promotion expenses 7
Administrative expenses 8 15,164,459 10,708,935
Results from operating activities 9 102,403 44,772
Interest income 10
Finance cost (5,089,755) (3,596,407)
Profit before tax 10(b) (2,092,682) (2,016,188)
Company income tax expense
Deferred tax 21(a) 8,084,425 5,141,112
Total comprehensive income for the period 14, 21(a), 22 2,983 225,101

Earnings per share (kobo) (5,195,659) (1,709,387)
2,891,749 3,656,826
(676,952)
(1,693,181) (327,126)
(164,211) 2,652,748
1,034,357
====== =======

31 81

The notes on pages 42 to 65 including the statement of accounting policies on pages 49 to 63 form part of these financial
statements.

34 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Statement of financial position Statement of financial position

AS AT 31 MARCH, 2017 Note 2017 2016
N'000 N'000
Assets 12 31,748,068 25,216,244
Non-current assets 13 45,738 54,923
Property, Plant and Equipment 14 1,229,680 127,458
Intangible asset 33,023,486 25,398,625
Deferred tax assets 15
16 3,835,324 2,909,333
Current assets 17 6,938,722 4,072,090
Inventories 1,165,203 1,102,058
Trade and other receivables 11,939,249 8,083,481
Cash and cash equivalents
33,482,106
Total assets 44,962,735
6,479,361
Current liabilities 18(a) 12,476,472 138,153
Trade and other payables 19(a) 165,438
Employee Benefits 20(a) 8,552,420
Borrowings 21(c) 11,987,582 676,952
Current tax liabilities 1,422,602
15,846,886
26,052,094
424,859
Non-current liabilities 19(b) 509,803 93,848
Employee Benefits 18(b) 136,522
Other payables 4,385,556 3,119,122
Deferred tax liabilities 22 5,031,881 3,637,829
31,083,975 19,484,715
Total liabilities
13,997,391
Net assets 13,878,760 =======
======
Equity 1,647,125
Share capital 23 1,647,125 6,160,731
Share premium 24 6,160,731 4,828,779
Retained earnings 25 4,710,148 12,636,635
Total shareholders' equity 1,360,756
Other reserves 12,518,004 13,997,391
Total equity 26 1,360,756 =======

13,878,760
=======

Approved by the Board of Directors on 23 May, 2017 and signed on its behalf according to Law by:

----------------------------------- ---------------------------- ------------------------- -----------------------------
Akintoye Omole Michiel Oerlemans Christopher Tyne Olugbenga Adebajo
Chairman Chief Operating officer Director Chief Accountant
FRC/2017/IODN/00000016560 FRC/2017/IODN/00000016579 FRC/2013/IODN/8084 FRC/2014/ICAN/006878

The notes on pages 42 to 65 including the statement of accounting policies on pages 49 to 63 form part of these financial
statements.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 35

Statement of changes in equity Statement of changes in equity

FOR THE YEAR ENDED 31 MARCH, 2017 Share Other Retained Total
premium Reserves Earnings Equity
Share N'000
capital N'000 N'000 N'000
N'000

Equity as at 1 April, 2016 1,647,125 6,160,731 1,360,756 4,828,779 13,997,391
Dividends paid - - - (1,152,988) (1,152,988)

Total comprehensive income for the year - - - 1,034,357 1,034,357
Equity as at 31 March, 2017 1,647,125 6,160,731 1,360,756 4,710,148 13,878,760
====== ======= ====== ====== =======

FOR THE YEAR ENDED 31 MARCH, 2016 Share Other Retained Total
Premium Reserves Earnings Equity
Share N'000
Capital N'000 N'000 N'000
N'000

Equity as at 1 April, 2015 1,647,125 6,160,731 1,360,756 2,999,647 12,168,259
Dividends paid - - - (823,616) (823,616)

Total comprehensive income for the year - - - 2,652,748 2,652,748
6,160,731 1,360,756 4,828,779 13,997,391
Equity as at 31 March, 2016 1,647,125 ======= ====== ====== =======

======

36 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements







Statement of cash flows Statement of cash flows

FOR THE YEAR ENDED 31 MARCH, 2017

Cash flows from operating activities Note 2017 2016
Cash flow from operating activities before changes N'000 N'000
in working capital 27(a)
Changes in working capital 27(b) 6,238,297 6,871,281
Cash generated from operations 3,621,175 2,489,970
VAT paid 21(c) 9,859,472 9,361,251
Back duty on vat and penalty paid 19(c) (1,346,726) (1,014,251)
Income tax paid
Gratuity paid (70,086) -
Net cash flow from operating activities (877,446) (420,375)

(16,015) (24,907)
7,549,199 7,901,718

Cash flow from investing activities: 12 (8,510,037) (4,176,593)
Purchase of Property plant and equipment 13 - (9,643)
Purchase of intangible assets 14,530
Proceeds on sale of Property plant and equipment 80,230
Interest received 2,983 225,101
Net cash flow applied to investing activities (3,946,605)
(8,426,824)

Cash flow from financing activities: 20 (1,152,988) (823,616)
Dividends paid 10(b) 3,435,161 (1,192,928)
Increase/ (decrease) in bank loan & overdraft (1,690,179)
Interest paid (1,341,403) (3,706,723)
Net cash flow from/(applied to) financing activities 940,770

Net increase in cash and cash equivalent 17 63,145 248,390
Cash and cash equivalent at beginning of period 1,102,058 853,668
Cash and cash equivalent at end of period 1,165,203 1,102,058

The notes on pages 42 to 65 including the statement of accounting policies on pages 49 to 63 form part of these financial
statements.

The reconciliation of cash and cash equivalents is as shown in note 17

40 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

NOTES TO THE
FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2017.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 41

Notes to the financial statements NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March, 2017

1. Corporate information b) Use of estimates and • Classification and measurement.
judgements Financial assets are classified by
International Breweries Plc was reference to the business model within
incorporated as a private limited liability The preparation of the Financial which they are held and their contractual
company in Nigeria on 22 December, Statements requires Management to cash flow characteristics. The 2014
1971, commenced business operations exercise judgement and to make version of IFRS 9 introduces a 'fair value
in August, 1978 and became a public estimates and assumptions that affect through other comprehensive income'
limited liability company on 26 April, the application of policies, reported category for certain debt instruments.
1994 and listed on the Nigeria Stock amounts of revenues, expenses, assets Financial liabilities are classified in a
Exchange. The principal activities of the and liabilities and disclosures. These similar manner to under IAS 39, however
company continue to be brewing, estimates and associated assumptions there are differences in the requirements
packaging and marketing of beer, are based on historical experience and applying to the measurement of an
alcoholic flavoured/ non-alcoholic various other factors that are believed to entity's own credit risk.
beverages and soft drinks. be reasonable under the circumstances.
Actual results may differ from these • Impairment. The 2014 version of
2. Statement of compliance estimates. The estimates and underlying IFRS 9 introduces an 'expected credit
assumptions are reviewed on an ongoing loss' model for the measurement of the
The financial statements are prepared in basis and revisions to accounting impairment of financial assets, so it is no
compliance with International Financial estimates are recognised in the period in longer necessary for a credit event to
Reporting Standards (IFRS) issued by the which the estimate is revised if the have occurred before a credit loss is
International Accounting Standards revision affects only that period or in the recognized.
Board (IASB) and with the period of the revision and future periods if
Interpretations issued by the the revision affects both current and • Hedge accounting. Introduces a
International Financial Reporting future periods. new hedge accounting model that is
Interpretations Committee (IFRIC) as designed to be more closely aligned with
adopted by the Federal Republic of c) Standards and interpretations not how entities undertake risk management
Nigeria. yet adopted activities when hedging financial and
non-financial risk exposures
3. Significant Accounting policies A number of new standards,
amendments to standards and • Derecognition. The requirements
The principal accounting policies interpretations are effective for annual for the derecognition of financial assets
adopted in the preparation of the periods beginning after 1st April 2017, and liabilities are carried forward from
company's financial statements are set and have not been applied in preparing IAS 39.
out below. these financial statements. Those which Effective date
may be relevant to the company are set 1 January 2018
a) Basis of preparation of the out below. The extent of the impact of
these standards is yet to be determined. IFRS 15 Revenue from Contracts with
financial statements The company does not plan to adopt Customers
Unless otherwise stated, the accounts these standards early. These will be IFRS 15 provides a single, principles
have been prepared on an accruals basis adopted in the period that they become based five-step model to be applied to all
and under the historical cost convention. mandatory unless otherwise indicated. contracts with customers.
These financial statements are presented IFRS 9 Financial Instruments The five steps in the model are as follows:
in Nigerian Naira (N), which is the A finalised version of IFRS 9 which • identify the contract with the
company's functional currency. All contains accounting requirements for
financial information presented in Naira financial instruments, replacing IAS 39 customer;
has been rounded to the nearest 'Financial Instruments: Recognition and • identify the performance
thousand unless otherwise stated. Measurement'. The standard contains
requirements in the following areas: obligations in the contract;
• determine the transaction price;

42 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Notes to the financial statements (cont’d) Notes to the financial statements (cont’d))

• allocate the transaction price to with net settlement features, and the preparing the financial statements and
the performance obligations in the accounting for modifications of share- which resulted in additional disclosures
contracts; and based payment transactions from cash- but had no significant impact on the
settled to equity-settled. measurements of the company's assets
• recognise revenue when (or as) and liabilities.
the entity satisfies a performance Effective date
obligation. Recognition of Deferred Tax Assets for
1 January 2018 Unrealised Losses (Amendments to IAS
Guidance is provided on topics such as 12)
the point in which revenue is recognised, Applying IFRS 9 'Financial Instruments'
accounting for variable consideration, with IFRS 4 'Insurance Contracts' Amends IAS 12 'Income Taxes' to clarify
costs of fulfilling and obtaining a contract (Amendments to IFRS 4) the following aspects:
and various related matters. New Amends IFRS 4 'Insurance Contracts' • Unrealised losses on debt
disclosures about revenue are also provide two options for entities that issue instruments measured at fair value and
introduced. insurance contracts within the scope of measured at cost for tax purposes give
IFRS 4: rise to a deductible temporary difference
Effective date • an option that permits entities to regardless of whether the debt
reclassify, from profit or loss to other instrument's holder expects to recover
1 January 2018 comprehensive income, some of the the carrying amount of the debt
IFRS 16 Leases income or expenses arising from instrument by sale or by use.
designated financial assets; this is the so- • The carrying amount of an asset
IFRS 16 specifies how an IFRS reporter called overlay approach; does not limit the estimation of probable
will recognise, measure, present and • an optional temporary exemption future taxable profits.
disclose leases. The standard provides a from applying IFRS 9 for entities whose • Estimates for future taxable profits
single lessee accounting model, requiring predominant activity is issuing contracts exclude tax deductions resulting from the
lessees to recognise assets and liabilities within the scope of IFRS 4; this is the so- reversal of deductible temporary
for all leases unless the lease term is 12 called deferral approach. The application differences.
months or less or the underlying asset of both approaches is optional and an • An entity assesses a deferred tax
has a low value. Lessors continue to entity is permitted to stop applying them asset in combination with other deferred
classify leases as operating or finance, before the new insurance contracts tax assets. Where tax law restricts the
with IFRS 16's approach to lessor standard is applied. utilisation of tax losses, an entity would
accounting substantially unchanged assess a deferred tax asset in
from its predecessor, IAS 17. New Effective date combination with other deferred tax
disclosures about leases are also assets of the same type.
introduced. Overlay approach to be applied when Effective date
IFRS 9 is first applied. Deferral approach
Effective date effective for annual periods beginning on 1 January 2017
or after 1 January 2018 and only Disclosure Initiative (Amendments to
1 January 2019 available for three years after that date. IAS 7)
Classification and Measurement of d) Standards and interpretations Amends IAS 7 'Statement of Cash Flows'
Share-based Payment Transactions effective 31st March 2017 to clarify that entities shall provide
(Amendments to IFRS 2) disclosures that enable users of financial
Amends IFRS 2 'Share-based Payment' to New IFRS standards and amendments to statements to evaluate changes in
clarify the standard in relation to the existing standards that became effective liabilities arising from financing
accounting for cash-settled share-based for annual periods commencing on or activities.
payment transactions that include a after 1st April 2016 have been applied in
performance condition, the classification Effective date
of share-based payment transactions

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 43

Notes to the financial statements (cont’d)) Notes to the financial statements (cont’d)

1 January 2017 straight line basis to write off the costs of economic benefits embodied in the asset
components that have homogenous and is recognised in the income
e) i) Property, Plant and Equipment: useful lives to their residual values over statement at the following rates:
The company uses the cost model for their estimated useful lives as follows:
property, plant and equipment. Plant and · Bottles
equipment are stated at cost less Buildings 22 - 55 years (Excess over deposit value) - 3 years
depreciation and impairments. Computer equipment 5 - 10 years
Cost includes: Plant and machinery 5 - 50 years · Crates
· The purchase price, including Vehicles 8 – 10 years (Excess over deposit value) -7 years
import duties, and non-refundable Marketing vehicles 4 – 8 years
purchase taxes, after deducting trade Furniture and fittings 5 – 30 years iii) Gains and losses on sale
discounts and rebates; Gains and losses on disposals are
· Any costs directly attributable to The company regularly reviews all of its determined by reference to the proceeds
bringing the asset to the location and depreciation rates and residual values. on disposal and carrying amounts of the
condition necessary for it to be capable of Such a review takes into consideration assets and are dealt with in the income
operating in the manner intended by changes in circumstances including statement. Net gains and losses are
management including costs associated expected market requirements for the presented as other operating income and
with site preparation; equipment, rate of expected usage and expenses when recovery of the
· Borrowing costs that are directly variation in the expected rate of consideration is probable, the significant
attributable to the acquisition, technological developments. risks and rewards of ownership have
construction or production of a qualifying Where the carrying amount of an asset is been transferred to the buyer, the
asset over the period up to the time such greater than its estimated recoverable associated costs can be estimated
an asset is substantially ready for its amount, it is written down to its reliably, and there is no continuing
intended use. estimated recoverable amount. As at the management involvement with the PPE.
On adoption of IFRS, the company used balance sheet date, there was no
'revaluation as deemed cost' at the date of indication of impairment of the property f) Intangible assets
transition in respect to certain buildings. plant and equipment and no adverse Purchased software is stated at cost less
Subsequent costs are included in the condition that could impact on the useful accumulated amortisation on a straight –
asset's carrying amount or recognised as lives of such assets was detected. line basis (if applicable) and impairment
a separate asset, as appropriate, only losses. Cost is usually determined by the
when it is probable that future Returnable Containers are reflected at amount paid by the company, unless the
economic benefits associated with the deposit value. Provisions are made asset has been acquired as part of a
item will flow to the company and the against the deposit values for breakages business combination.
cost of the item can be measured reliably. and losses in trade to write off the deposit Intangible assets with finite lives are
value over the expected useful life of the amortised over their estimated useful
All repairs and maintenance costs are container. This period is shortened where economic lives, and only tested for
charged to the income statement during appropriate by reference to market impairment where there is a triggering
the financial period in which they are dynamics. event. Amortisation is included within
incurred. The differences between landed cost and the net operating expenses in the income
the deposit value of new bottles and statement.
ii) Depreciation: crates are also recognised in Returnable
Containers. Amortisation of containers is g) Leases
No depreciation is provided on freehold calculated on a straight line basis over Assets acquired under finance lease are
land and assets in the process of the expected useful lives from the date capitalised and depreciated in
construction. Depreciation on property, that they are available for use. It is accordance with the company's policy on
plant and equipment is calculated on the calculated to reflect the estimated property, plant and equipment unless the
pattern of consumption of the future lease term is shorter whereupon, they are
amortised over the lease term.

44 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Notes to the financial statements (cont’d) Notes to the financial statements (cont’d))

The associated obligations are included the ordinary course of business is credited to the income statement on a
under financial liabilities. measured at the fair value of the straight - line basis over the lease term.
consideration received or receivable, net
h) Impairment of VAT, excise duties, returns, customer j) Expenditure
The carrying amounts of financial assets, discounts and other sales-related Expenditure is recognised in respect of
property, plant and equipment, and discounts. Revenue from the sale of goods and services received when
intangible assets are reviewed at each products is recognised in profit or loss supplied in accordance with contractual
balance sheet date to determine whether when the amount of revenue can be terms. Provision is made when an
there is any indication of impairment in measured reliably, the significant risks obligation exists for a future liability in
accordance with IAS 36:9. If any such and rewards of ownership have been respect of a past event and where the
indication exists, an asset's recoverable transferred to the buyer, recovery of the amount of the obligation can be reliably
amount is estimated. An impairment loss consideration is probable, the associated estimated. Manufacturing start-up costs
is recognised whenever the carrying costs and possible return of products can between validation and the achievement
amount of an asset or the related cash- be estimated reliably, and there is no of normal production are expensed as
generating unit exceeds its recoverable continuing management involvement incurred. Advertising and promotion
amount. Impairment losses are with the products. The methodology and expenses are charged to the income
recognized in the income statement. assumptions used to estimate rebates statement as incurred. Distribution costs
and returns are monitored and adjusted on sales to customers are included in
Calculation of recoverable amount regularly in the light of contractual and selling, general and administrative
The recoverable amount of an asset is legal obligations, historical trends, past expenses.
determined as the higher of its fair value experience and projected market
less costs to sell and value in use. For an conditions. Market conditions are Minimum lease payments under finance
asset that does not generate largely evaluated using wholesaler and other leases are apportioned between the
independent cash inflows, the third-party analyses, market research finance expense and the reduction of the
recoverable amount is determined for the data and internally generated outstanding liability. The finance expense
cash-generating unit to which the asset information. Turnover also includes co- is allocated to each period during the
belongs. In assessing value in use, the packaging income derived from the use of lease term so as to produce a constant
estimated future cash flows are the company's facilities for the periodic rate of interest on the remaining
discounted to their present value using a production of products of other balance of the liability. Contingent lease
discount rate that reflects current market companies under a co-packaging payments are accounted for by revising
assessments of the time value of money arrangement. The same recognition the minimum lease payments over the
and the risks specific to the asset. Should criteria also apply to the sale of by- remaining term of the lease when the
circumstances or events change and give products and waste (such as spent lease adjustment is confirmed.
rise to a reversal of a previous impairment grains) with exception that this is
loss, the reversal is recognised in the included within other income. Borrowing costs that are not directly
income statement in the period in which attributable to the acquisition,
it occurs and the carrying value of the (II). Other income construction or production of a qualifying
asset is increased. The increase in the Other income constitutes gains from the asset are recognised in profit or loss using
carrying value of the asset will only be up sale of assets, net of taxes; proceeds from the effective interest method.
to the amount that it would have been the sale of by-products; interest on
had the original impairment not deposits and others. These various Foreign currency gains and losses are
occurred. sources of income are recognised in profit reported on a net basis in other net
or loss when ownership has been finance expenses.
i) Revenue transferred to the buyer.
k) Income tax
(I). Sale of goods and services Rentals paid and incentives received on Income tax on the profit for the year
Revenue from the sale of products in leased sales trucks are charged or comprises current and deferred taxes.

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 45

Notes to the financial statements (cont’d)) Notes to the financial statements (cont’d)

Income tax is recognized in the income sheet date and are expected to apply Financial assets are recognised when the
statement except to the extent that it when the related deferred tax asset is company has rights or other access to
relates to items recognized directly in realised or the deferred tax liability is economic benefits. Such assets consist of
equity, in which case the tax effect is also settled. cash, equity instruments, a contractual
recognized directly in equity. right to receive cash or another financial
l) Accounting for leases asset, or a contractual right to exchange
Current tax is the amount of tax payable Leased property, plant and equipment financial instruments with another entity
on the taxable profit for the year, using where the company assumes on potentially favourable terms.
the current tax rate in accordance with substantially all the risks and rewards of
the enacted tax statutes, at the date of ownership are classified as finance De-recognition of financial assets
the statement of financial position, and leases. Finance leases are recognised as Financial assets are derecognised when
any adjustment to tax payable in respect assets and liabilities in the statement of the right to receive cash flows from the
of previous years. financial position at an amount equal to asset has expired or has been transferred
the lower of fair value of the leased or when the company has transferred
In line with IAS 12 - income taxes, property and the present value of substantially all risks and rewards of
deferred taxes are provided for using the minimum lease payments at inception of ownership.
liability method which focuses on the lease. Amortisation and impairment
temporary differences. Temporary testing for depreciable leased assets, is Financial liabilities are recognised when
differences are differences between the the same as for own depreciable assets. there is an obligation to transfer benefits
tax base of an asset or liability and its and that obligation is a contractual
carrying amount in the statement of Lease payments are apportioned liability to deliver cash or another
financial position. between the outstanding liabilities and financial asset or to exchange financial
finance charges so as to achieve a instruments with another entity on
The company recognizes a deferred tax constant periodic rate of interest on the potentially unfavourable terms.
liability or asset when there are taxable remaining balance of the liability.
and deductible differences between the De-recognition of financial liabilities
tax base of assets and liabilities and their Lease of assets under which all the risks Financial liabilities are de-recognised
carrying amounts in the balance sheet. and rewards of ownership are when they are extinguished, that is
substantially retained by the lessor are discharged, cancelled or expired. If a
The company recognizes deferred tax classified as operating leases. legally enforceable right exists to set off
assets arising from unrelieved tax losses, Rentals paid and incentives received on recognised amounts of financial assets
tax credits and unabsorbed capital operating leases are charged or credited and liabilities, which are in determinable
allowances carried forward to the extent to the income statement over the lease monetary amounts, and
that it is probable that sufficient taxable term. there is the intention to settle net, the
profit will be available against which the relevant financial assets and liabilities
deferred tax asset can be utilized in m) Financial assets and financial are offset.
future. liabilities
Interest costs are charged to the income
Deferred tax assets are reviewed at each Financial assets and financial liabilities statement in the year in which they
balance sheet date and are reduced to are initially recorded at fair value (plus accrue. Premiums or discounts arising
the extent that it is no longer probable any directly attributable transaction from the difference between the net
that the related tax benefit will be costs, except in the case of those proceeds of financial instruments
realised. classified at fair value through profit or purchased or issued and the amounts
loss). For those financial instruments that receivable or repayable at maturity are
Deferred tax is determined using tax rates are not subsequently held at fair value, included in the effective interest
(and laws) that have been enacted or the company assesses whether there is calculation and taken to net finance costs
substantially enacted at the balance any objective evidence of impairment at over the life of the instrument.
each reporting date.

46 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Notes to the financial statements (cont’d) Notes to the financial statements (cont’d))

Financial assets and financial liabilities cash equivalents includes cash in hand, the company's cash management.
relevant to the company for the year are bank deposits repayable on demand and
as follows: - other short-term highly liquid n) Foreign currency transactions
investments that are readily convertible Transactions arising in foreign currencies
Loans and receivables to known amounts of cash and which are during the period are translated to the
Loans and receivables are non-derivative subject to insignificant risk of changes in functional currency (Nigerian Naira) at
financial assets with fixed or value. It also includes bank overdrafts the exchange rate prevailing at the dates
determinable payments that are not which are shown within borrowings in of the transactions.
quoted on an active market. They arise current liabilities on the statement of
when the company provides money, financial position. At the end of the reporting period,
goods or services directly to a debtor with monetary items denominated in foreign
no intention of trading the receivable. iii) Amounts owed by staff currencies are retranslated at the rates
They are included in current assets, prevailing at that date.
except for maturities of greater than 12 These represent short term interest free
months after the reporting date which are salary advances to members of staff. Exchange differences on monetary items
classified as non-current assets. Loans are recognized in the statement of
and receivables are initially recognised at Financial liabilities held at amortised cost comprehensive income in the period in
fair value including originating fees and Financial liabilities held at amortised cost which they arise.
transaction costs, and subsequently include trade payables, accruals,
measured at amortised cost using the amounts owed to associates – trade, o) Statement of cash flows
effective interest rate method less other payables and borrowings. The statement of cash flows is prepared
provision for impairment. Loans and using the indirect method. Changes in
receivables include trade receivables, i) Trade payables balance sheet items that have not
amounts owed by associates – trade, Trade payables are initially recognised at resulted in cash flows such as translation
amounts owed by staff, accrued income fair value and subsequently measured at differences, fair value changes and other
and cash and cash equivalents. amortised cost using the effective interest non-cash items have been eliminated for
rate method where applicable. Trade the purpose of preparing this statement.
i) Trade receivables payables are analysed between current Dividends paid to ordinary shareholders
Trade receivables are initially recognised and non-current in periods that they are available as well
at fair value and subsequently measured liabilities on the face of the statement of as interest paid on borrowings are
at amortised cost less provision for financial position, depending on when included in financing activities.
impairment. the obligation to settle will be realised.
A provision for impairment of trade p) Share capital
receivables is established when there is ii) Borrowings Ordinary shares are classified as equity.
objective evidence that the company will Borrowings are recognised initially at fair Costs attributable to the issue of ordinary
not be able to collect all amounts due value, net of transaction costs and are shares are recognized as a deduction
according to the terms of the receivables. subsequently stated at amortised cost from equity, net of any tax effects, from
The amount of the provision is the and include accrued and prepaid the proceeds.
difference between the asset's carrying interest. Borrowings are classified as
value and the present value of the current liabilities unless the company has q) Reserves
estimated future cash flows discounted an unconditional right to defer settlement Asset revaluation reserve
at the original effective interest rate. This of the liability for at least 12 months from Surpluses or deficits arising on the
provision is recognised in the income the reporting date. Bank overdrafts are revaluation of individual fixed assets are
statement. shown within borrowings in current credited or debited to a non-distributable
liabilities and are included within cash reserve known as fixed assets revaluation
ii) Cash and cash equivalents and cash equivalents in the statement of reserve. Revaluation deficits in excess of
In the statement of cash flow, cash and cash flow as they form an integral part of the amount of prior revaluation surpluses

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 47

Notes to the financial statements (cont’d)) Notes to the financial statements (cont’d)

on the same assets are charged to other (ii) Finished goods and Work in I) Short term employee benefits
comprehensive income. progress Short term employee benefit obligations
On disposal of a previously re-valued are measured on an undiscounted basis
asset, an amount equal to the revaluation Finished goods and work in progress are and are expensed as the related services
surplus attributable to that asset is measured using standard costs based on are provided. International Breweries Plc
transferred from revaluation reserve to weighted average and include cost of raw recognises wages, salaries, social
revenue reserve. materials, direct costs and an security contributions,
appropriate portion of production bonuses and other allowances for current
r) Earnings per share overheads based on normal operating employees in the income statement as
International Breweries Plc presents capacity. the employees render such services.
basic and diluted earnings per share A liability is recognised for the amount
(EPS) data for its ordinary shares. Basic (iii) Goods in Transit expected to be paid under short - term
EPS is calculated by dividing the profit or Goods ordered, shipped and awaiting benefits if the company has a present
loss attributable to ordinary shareholders delivery are recognised as goods in legal or constructive obligation to pay the
of the company by the weighted average transit and are stated at the purchase amount as a result of past service
number of ordinary price plus other incidental costs incurred provided by the employee and the
shares outstanding during the period. to date. obligation can be estimated reliably.
Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary (iv) Spares, fuel and lubricants ii) Defined contribution plans
shareholders and the weighted average The cost of spare parts, fuel and In line with the provisions of the Nigerian
number of ordinary shares outstanding lubricants is based on weighted average. Pension Reform Act 2004, International
for earlier years. Spare parts are valued at lower of cost Breweries Plc has instituted a defined
and net realizable value. Spare parts and contributory pension scheme for its
s) Inventories servicing equipment are usually carried employees. The scheme is funded by
Inventories are measured at the lower of as inventory and recognised in profit or fixed contributions from employees and
cost and net realizable value. Cost of loss as consumed. However, major spare the company at the rate of 8% and 10%
inventories is determined using weighted parts and stand-by equipment qualify as of remunerations respectively and
average cost method. Net realizable property, plant and equipment when the invested outside the company through
value is the estimated selling price in the company expects to use them during Pension Fund Administrators (PFAs)
ordinary course of business, less more than one period but only at the preferred by employees.
estimated costs of completion and point of issue. Similarly, if the spare parts
estimated costs of disposal. The costs of and servicing equipment can be used The company has no legal or constructive
inventories consist of purchase costs, only in connection with an item of obligation to pay further contributions if
conversion costs and all other costs property, plant and equipment, they are the fund does not hold sufficient assets to
incurred in bringing them to their present accounted for as property, plant and pay all employee benefits relating to
location and condition. equipment. employees' service in the current and
prior periods.
(i) Raw materials t) Employee Benefits
Raw materials and other bought-in International Breweries Plc recognises The matching contributions made by the
components are measured using the employee obligations in line with IAS 19 company to the relevant PFAs are
purchase price, import duties, transport, by making certain assumptions in order recognised as expenses when the costs
dock charges and other costs directly to value the company's gratuity and post- become payable in the reporting periods
attributable to its acquisition less trade retirement obligations in the statement of during which employees have rendered
discounts, rebates and other similar financial position and to determine the services in exchange for those
items; based on weighted average cost amounts to be recognised in the income contributions. The contributions are
formula. statement. recognised as employee benefit expense
when they become due.

48 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements

Notes to the financial statements (cont’d) Notes to the financial statements (cont’d))

Prepaid contributions are recognised as (Employee Compensation Act 2010) the unavoidable cost exceeds the
an asset to the extent that a cash refund IB Plc provides 1% of employees' gross expected benefit.
or a reduction in the future payments is annual salary as disability/death in
available. service insurance benefits under the ii) Contingent liability
Employee Compensation Act 2010 A contingent liability is disclosed, unless
iii) Defined benefit plans (formerly Workmen Compensation Act the possibility of an outflow of resources
A defined benefit plan is a post- CAP W6 LFN, 2004). The charge embodying economic benefits is remote.
employment benefit plan including represents the company's obligations Where the company is jointly and
pension plan that does not qualify as a under the scheme. The charge so severally liable for an obligation, the part
defined contribution plan. The company recognised is expensed in the income of the obligation that is expected to be
makes unfunded provision for retirement statement of the year of incidence. met by other parties is treated as a
benefit entitlements due to staff upon contingent liability. The entity recognises
disengagement based on their years of u) Deposits by customers a provision for the part of the obligation
service and current emoluments as Returnable containers in circulation are for which an outflow of resources
contained in the staff conditions of recorded within property, plant and embodying economic benefits is
service. No other post employment equipment and a corresponding liability probable, except in the extremely rare
benefit arrangement exists between the is recorded in respect of the obligation to circumstances where no reliable
company and the current or past repay the customers' deposits. Deposits estimate can be made. Contingent
employees. paid by customers for branded returnable liabilities are assessed continually to
containers are reflected in the balance determine whether an outflow of
iv) Other long term employee benefits sheet within current liabilities. resources embodying economic benefits
The company's obligation in respect of has become probable. If it becomes
long term employee benefits, other than v) Provisions, contingent liabilities probable that an outflow of future
pension plans, is the amount of future and contingent assets - economic benefits will be required for an
benefit that employees have earned in item previously dealt with as a contingent
return for their service in the current and I) Provisions liability, a provision is recognised in the
prior periods; that benefit is discounted Provisions are recognised when there is a financial statements of the period in
to determine its present value, and the present obligation, whether legal or which the change in probability occurs
fair value of any related assets is constructive, as a result of a past event except in the extremely rare
deducted. for which it is probable that a transfer of circumstances where no reliable
economic benefits will be required to estimate can be made.
The discount rate is the yield at balance settle the obligation and a reliable
sheet date on high-quality rated estimate can be made of the amount of iii) Contingent assets
corporate bonds that have maturity dates the obligation. Such provisions are Contingent assets arising from
approximating the terms of company's calculated on a discounted basis where unplanned or other unexpected events
obligations. The obligation is calculated the effect is material to the original giving rise to the possibility of an inflow of
using the projected unit credit method. undiscounted provision. The company economic benefits are disclosed in the
Any actuarial gains and losses are reviews provisions existing at the end of financial statements. Contingent assets
recognised in the income statement in each reporting period and makes are assessed continually to ensure that
the period in which they arise. appropriate adjustment to reflect the developments are appropriately reflected
current best estimate. in the financial statements. If it has
The company also recognises a liability become virtually certain that an inflow of
and an expense for long-term service If it is no longer probable that an outflow economic benefits will arise, the asset
awards where cash is paid to the of resources embodying economic and the related income are recognised in
employee at certain milestone dates in a benefits will be required to settle the the financial statements of the period in
career with the company. Such accruals obligation, the provision is reversed. which the change occurs. If an inflow of
are appropriately discounted to reflect economic benefits has become probable,
the future payment dates at discount Provisions are not recognised for future an entity discloses the contingent asset.
rates determined by reference to local operating losses; however, provisions are
high-quality corporate bonds. recognised for onerous contracts where

INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements 49

Notes to the financial statements (cont’d)) Notes to the financial statements (cont’d)

4. Segment reporting

No business or geographical segment information is reported as the Company's primary geographical segment is
Nigeria. Presently, 100 percent of the Company's sales are made in Nigeria. Also, identical risks and returns apply to
all Company products. Net revenue for the reporting year was as follows:

Net revenue from Nigeria 2017 2016
5. Total Revenue N'000 N'000
32,711,218 23,269,364
======= =======

(a) Net Revenue (note 3 j) 32,711,218 23,269,364

======= =======

Revenue is wholly derived from Nigeria in respect of the sale of beer and other alcoholic and non-alcoholic

beverages.

6. Cost of sales

Cost of goods sold comprises raw materials, 2017 2016
N'000
conversion cost and materials sourcing expenses. N'000 9,838,591
834,855
Materials consumed and allocated overheads 14,280,588 465,387
20,458
Salaries, wages and allowances (production staff) 1,005,086 896,306
504,832
Technical management fees 654,224 12,560,429
=======
Royalties 11,452
2016
Depreciation - plant machinery 907,098
32,187
Amortisation of containers 688,311 -

17,546,759 12,585
44,772
======= =====

7. Other Income

2017

N'000 N'000

Royalty received 93,345

Profit on sale of PPE 678

Others 8,380

102,403

=====

8. Marketing, promotion and distribution expenses

Transportation and distribution N'000 N'000
Salaries, wages and allowances (S&D staff) 2,882,520 1,709,410
Advertising and promotion
681,174 542,543
1,526,061 1,344,454
5,089,755 3,596,407
====== ======

50 INTERNATIONAL BREWERIES PLC | 2017 Annual Report & Financial Statements