IBPlc 2020 AR

Achievements:

• Association with football gave the • 5 lucky super fans were sponsored on
brand massive leverage to connect an All-Expense paid trip to Tanzania
with the youth and engender youthful for the Continental Finals.
appeal.
• The Nigerian Champions (Scope FC)
• Over 1000 teams registered and went to Tanzania to represent the
participated in the tournament. Country and won the continental finals
as well.

51 International Breweries Plc.

RAISE A TROPHY CAMPAIGN

Trophy Lager is the ‘Honourable’ Joseph Yobo (Sports personality) and
brand that exists to accord respect to was executed across major platforms:
honourable men and rewards honourable TV, Billboards, Radio, Online, In-bar
actions. Hence, this thematic campaign and trade channels.
was anchored around this attribute to
champion the positive narrative about
Nigeria and Nigerians.

‘Raise A Trophy To Naija’s Honour’
campaign was a rallying call to
Nigerians to rise up and celebrate their
best because ‘Honour’ is an integral
fibre of the Nigerian society. Trophy
Lager is Brewed with honour and is in a
position to champion Nigerians behind
this honourable cause.

The campaign featured the Trophy
Brand Ambassadors: Femi Adebayo
(Actor), Falz (Music Artiste) and

Honour

is an integral
fibre of the
Nigerian
society

International Breweries Plc. 52

Trophy
Lager is the
‘Honourable’
brand that
exists to
accord
respect to
honourable
men and
rewards
honourable
actions

53 International Breweries Plc.



From March 2019 to June 2019, the Hero
Lager brand engaged in the inspiring
Every Drop is earned Campaign. This
campaign was ideated after insight
revealed that many people tend to
seek validation for their daily hustle.
They look for things or people that
can inspire them on this journey, but
sometimes these sources of inspiration
are hard to come by.

Armed with this insight, the brand
team pondered on how Hero can
become a brand that motivates and
inspires its consumers on their journey.
This is how the Every Drop is Earned
Campaign was birthed. The campaign
was communicated mainly via radio
and billboards.

In July 2019, the Hero team embarked on • More than 1 million reach across all social
the emotive and exciting NEVER FORGET media platforms
WHERE YOU COME FROM #Echefula
campaign. The campaign was birthed in • 200,000 plus engagement recorded in
response to a UNESCO report which stated the first 2 weeks
that most languages will go into extinction by
2025 and the Igbo language is one of them. • Impressions: Over 1 million in 1 month
Asides language, westernisation has also
taken its toll on the culture and way of life of The campaign also had a music video which
the Igbo people. Going by this report, it can featured the brand ambassadors and was
be said that westernisation is slowly robbing communicated via radio, TVC and lampposts.
the Igbo people of their culture and way of The campaign ended in November, 2019.
life.

With the Echefula campaign, the Hero Lager
brand team sought to position Hero as a beer
that not only identifies with the Igbos but
also encourages them to take pride in their
HERITAGE.

The campaign was highly successful, and
consumers were able to engage with it. Here
are some of the results recorded in the first
month of the campaign:

• Over 20,000 views on YouTube for the
Music Video

International Breweries Plc. 56

In the Hero Clan Can Activation of
the Echefula campaign, the brand
launched limited edition labels to drive
the conversation around embracing
individual roles and responsibilities
towards communal growth. Brand
utilized Nsibidi a unique and ancient
art-form language of the Igbo people
in the designs of the new labels as
language is an intrinsic element of the
Igbo culture.

CHALLENGE TO BE
ADDRESSED:

To re-ignite a sense of identity
and individual responsibility to the
community. Identity and responsibility
are at the heart of the Igbo culture.

IDEA:

Launched limited edition labels
representing five unique appellations.
Each appellation connotes a unique
role played by individuals in their
communities. Celebrating these
roles dials up the awareness of
collective responsibility for communal
development. This activation delivers
on the brand purpose of inspiring and
recognising the potential hero in every
individual. This activation was deeply
rooted in the Echefula campaign
“Never forget your Identity”.

The five labels launched are: Igwe,
Odogwu, Ada, Nwanne and Dike.
All new labels were featured in the
new copies – on radio, TV, billboards,
Digital and In-bar posters with media
amplification

57 International Breweries Plc.

Hero has
continued
to excite
and
engage its
teeming
consumers

In 2012, Hero Lager Beer launched in a International Breweries Plc.
Onitsha. The launch activation was via
the platform of music, staging the 1st
night concert event in the East in almost
20 years.

Since then, Hero has continued to excite
and engage its teeming consumers and
fans with various campaigns, musical,
sports and cultural events.

CHALLENGE TO BE
ADDRESSED:

Drive awareness of brand campaign and
drive brand engagement via experiential
event.

IDEA:

Hero Fiesta is an annual musical
platform owned by Hero Lager, and used
to reward and entertain our consumers
for their loyalty.

Hero Fiesta 5 tagged ‘Echefula Edition’
was held in Onitsha on 23rd November
2019.

This event had an audience size of
10000 consumers in attendance at the
Ikpeazu Stadium in Ontisha.

The 2019 edition was also the launch our
innovative Clan packaging design Cans.
Consumers were thrilled and engaged
with the brand throughout the festival.

59



CASTLE LITE

MADE FOR

EXTRA

COLD

NEW TECHNOLOGY

Not for Sale to Persons Under the Age of 18. 2017/09/20 11:46 AM

P316 Castle Lite Nigeria_PSL Launch_A2_2_G.indd 1

THE BOARD

BTHOEARD

THE BOARD

His Majesty Nnaemeka A. Achebe, Obi of Onitsha, had
a 30-year career with the Royal Dutch Shell Petroleum
Group of Companies in Nigeria and overseas.

He is the Chairman of the Anambra State Traditional
Rulers Council and Chancellor of Ahmadu Bello
University, Zaria. He was educated at Stanford and
Columbia Universities in the U.S.A and an alumnus of
the National Institute for Policy and Strategic Studies,
Kuru. He is also the current Chairman of Unilever
Nigeria Plc.

HRM NNAEMEKA A. ACHEBE CFR, MNI

Chairman

MR. HUGO DIAS ROCHA Mr. Hugo Dias Rocha has worked with the ABInBev
Managing Director group for over 24 years in different leadership roles
within the Sales, Process Integration and Human
Resources functions in various countries including
Brazil, Dominican Republic, China, Colombia, Argentina
and South Africa.

He holds a Master’s degree in Business Administration
(MBA) from the Sao Paulo Business School, Brazil and
a Degree in Mechanical Engineering from the Federal
University, Paraiso, Brazil. He has exceptional career in
sales as the AB Inbev Commercial Vice-President for
integration in China and a handful of Latin American
Countries.

63 International Breweries Plc.

THE BOARD

Mr. Zambrano comes with tremendous experience
having worked extensively in virtually all aspects of
financial management across ABInBev’s businesses
in Latin America and East Africa.

He holds a Masters in Business Administration (MBA) MR. BRUNO ZAMBRANO ARANA
from Mccombs School of Business – Austin, Texas.
He holds a Bachelor of Science in Economics from
University of Texas at Arlington – Arlington, Texas.
He was the Finance Director at Tanzanian Breweries
prior to joining International Breweries Plc. in January
2020.

Executive Director

Sunday Akintoye Omole, a graduate of
Sociology from the Premier University of Ibadan,
an accountant, holds an MBA specialization
in Human Resources from Everest University,
United States of America. Mr. Omole has
acquired wide working experience both locally
and internationally. The scope of his working
life include accounting, audit and tax practices,
company restructuring, commodities, futures
market analysis, financial services and human
resources management.

Mr. Omole is on the Board of Directors of other MR. SUNDAY AKINTOYE OMOLE
Companies in Nigeria and the United States. Non- Executive Director

International Breweries Plc. 64

THE BOARD

MR. OLUGBENGA AWOMOLO Gbenga Awomolo is currently an Executive Director
Non - Executive Director (Operations) at Alumaco Plc and sits on the Board of
several companies particularly in the manufacturing
sector.

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 holds a Law degree from the University
of Wales, Cardiff.

MR. ANDREW MURRAY Andrew Murray is currently the Vice President,
Non-Executive Director Finance for ABInBev Africa, leading the finance
function across Africa operations, based in
Johannesburg, South Africa. Andrew joined ABInBev
in 2013 as Director of Global M&A based in New York.

In 2015, Andrew worked in ABInBev’s global
Budgeting and Business Performance group focused
on the financial results and budgeting at the global
headquarters. Prior to joining ABInBev, Andrew
worked at Bain & Company, a global management
consulting firm for approximately 7 years. Andrew
has a BA in Mathematics and Economics from
Williams College and an MBA from The Kellogg
School of Management (Northwestern University).

65 International Breweries Plc.

THE BOARD

Igwe Anugwu is a private entrepreneur. He holds
a Diploma in Agricultural Engineering from the
School of Agriculture, Umudike in Abia State.

He is a Patron of Anambra State Traditional Rulers
Council and Elder’s Council. He is the holder of
various congressional Honors, Proclamations and
Keys from several cities in the United States of
America and a director of the board of directors of
the World Conference of Mayors.

He is the Chairman of Zhongtian Construction Nigeria

Ltd. HRM IGWE PETER ANUGWU JP, OFR

Non-Executive Director

Mr. Michael Ajukwu is an astute professional with
combined expertise and contribution to Stakeholder
engagement, risk advisory, general management,
corporate finance spanning over three decades.

He is currently an Independent Director on the board
of Sterling Bank Plc. He served as an Executive
Director, Corporate Banking with United Bank for
Africa. Mr. Ajukwu has over 21 years of experience
in the banking industry with specialty in the Energy
and Multinational sector. He has extensive business
experience in Africa and particularly in Nigeria.

He has been an Independent Non-Executive Director MR. MICHAEL AJUKWU
at Tiger Brands Limited and Sterling Bank Plc Non-Executive Director
respectively. Mr. Ajukwu holds a B.Sc. in Finance from
the University of Lagos and MBA in Accounting and
Finance from New York University.

International Breweries Plc. 66

THE BOARD

ABIYE TOBIN-WEST Abiye Tobin-West is a seasoned Public Sector
Non-Executive Director Administrator with several years of experience. As an
astute Public Administrator, Tobin-West has cognate
experience in corporate governance and served on
several Boards of corporations as a Government
Representative, some of which include the Board
of Internal Revenue Service, Rivers State Tourism
Development Authority, Rivers Microfinance Agency,
Nigeria Engineering Works and RIVERSCOOP
Limited.

Abiye Tobin-West is a life member of Economic
Society of Nigeria, a fellow of Chartered Institute
of Taxation, and a member of Institute of Cost and
Management Accountants.

MR. RICHARD RIVETT-CARNAC Richard Rivett-Carnac is the Treasury and
Non-Executive Director M&A Director for AB InBev Africa based in
Johannesburg, South Africa.

Richard has previously worked within the AB
InBev Group in sales and distribution as a District
Manager in South Africa and in the SABMiller
M&A team based in the United Kingdom
focusing on global mergers and acquisitions.
Prior to joining SABMiller, Richard qualified as a
Chartered Accountant (SA) in Johannesburg and
worked in London as an Investment Banker.

67 International Breweries Plc.

THE BOARD

Olutoyin is a seasoned Consumer Goods and FMCG senior
management professional with over 16 years of multi-
national corporate experience in retail management
& distribution, supply chain optimization, strategic
development, operational planning, risk management,
business development, product development, branding
and marketing across the telecoms, management
consulting & consumer goods /FMCG industries. She
has held past senior roles including missions at L’Oreal,
MTN Nigeria & Accenture and most recently as Regional
Director Anglophone West Africa at Danone ELN where
she worked for the past 6 years. She is currently the
Founder & CEO, Olori Beauty Enterprise LTD, an African
multi-brand cosmetics manufacturing start-up, based
out of Lagos, Nigeria.

Toyin is also a Non-Executive Director at Afrinvest OLUTOYIN M. ODULATE
West Africa Limited. She holds a BSc degree in Civil
& Environmental Engineering from Temple University Independent
in Philadelphia, Pennsylvania and a MBA degree from Non-Executive Director
INSEAD (France & Singapore)

Tolulope Adedeji has extensive experience in building
Brands and businesses. She has built brands from
scratch to market leadership and has transformed
brands from challengers to established brands. ‘Over
the course of her 16 years career, she has built over 15
brands across Africa. Before her current appointment as
Marketing Director for International Breweries Plc, she
was Brand /Commercial Associate Director of Procter
& Gamble Nigeria. She also navigated these brands
through a challenging macro-economic recession in
2016.

Tolu holds a BSc in Business Administration from MRS. TOLULOPE ADEDEJI
Babcock University, a MBA from Obafemi Awolowo Marketing Director
University and a MSC in International Management
from the University of Liverpool, UK. She is a member
of the Chartered Institute of Marketing , UK (MCIM) and
several other marketing bodies.

International Breweries Plc. 68

THE BOARD

Ayojimi is a Barrister and Solicitor of the Supreme
Court of Nigeria with almost 2 decades of Law
practice with considerable experience in providing
experiential advisory in Corporate restructuring. He
was legal adviser to a handful of private companies
and has practiced extensively before superior courts
of record in Nigeria.

MUYIWA AYOJIMI He is a member of the Institute of Chartered
Company Secretary / General Counsel Secretaries and Administrators, Chartered Institute
of Arbitrators, International Corporate Governance
Network, Society for Corporate Governance, Nigerian
Institute of Management and the Nigerian Bar
Association.

69 International Breweries Plc.

CHAIRMAN’S STATEMENT

Dear Shareholders, representa- had many successes to celebrate, though
tives of regulatory agencies, our the year was not without its challenges.
external auditors, members of the Our focus this year was to continue to
drive the organic growth of our business
IBoard, and staff, while deleveraging towards our optimal
t is my pleasure to welcome you all to capital structure.
the 43rd Annual General Meeting of
our Company, International Breweries Nigerian Economic Outlook
Plc.
In line with official protocols, I will give The country held national elections in
an overview of our operating environ- 2019, for the sixth consecutive time
ment, outline some of our major activi- since its return to democracy, and as it
ties during the year and conclude with
our outlook for 2020.

2019 was another step forward in our
company’s transformational journey. We

International Breweries Plc. 70

CHAIRMAN’S STATEMENT

had always been, the year came with a exchange for importation, the foreign re-

lot of uncertainties. GDP Growth accord- serves continued to decline from US$45.1

ing to the Nigeria Bureau of Statistics billion at July of 2019 to US$39.4 billion

“NBS” stood at 2.27% for 2019. Despite by December. Our business environment

this, domestic demand has not been immune

remained constrained to these harsh realities.

by stagnated private High energy cost, high

consumption in the cost of borrowing, frail

context of high inflation consumer demand, lo-

which was at -2.4%. The The Market gistic bottlenecks, high
Market performance performance cost of importation
continued its moder- continued its continued to have an
ate path of recovery, moderate path effect on performance.
growing by 2.28%. The of recovery, These macro-economic
Monetary Policy Rate growing by realities continued to
was benchmarked at form the basis of our
13.5%. Also, the antici- 2.28%. numbers.

pated review of salaries

and wages as well as

the expected improvement in consumer Operating Environment

confidence stimulated private consump-

tion and ultimately aggregated demand. Our operating Environment continued

to be affected by unfavourable currency

According to data from the (NBS), volatility in the market, impacted our

Nigeria only experienced growth in the cash flow and slowed our anticipated

third quarter of 2019; GDP expanded by deleveraging path. As a result, we proac-

about 2.3% compared to 1.8% in the cor- tively ignited a plan to accelerate delev-

responding quarter of the preceding year eraging in line with our capital allocation

(Q3 2018), this growth was slightly higher priorities.

than the 2.1% growth recorded in Q2

2019. It must be stated that despite this Headwinds to our cost base, especially

growth there was still a gap as popula- with respect to the increases in Excise

tion growth rate was 2.6%. According to and increased drive for revenue by gov-

a PWC report, Nigeria’s economy needed ernment at all levels was the hallmark

to grow (inclusively) at an average rate of the year. Competition continue to be

of at least 5-7% to reduce unemployment fierce as market share became a barge

and alleviate poverty. The decision by the of trophy.

Federal Government in August 2019 to

close the land boarders to halt smuggling Business Performance/Result of

caused a surge in food prices ultimately the Year

resulting in higher inflation rates.

Assessing our financial performance in

Due to increased demand for foreign 2019, it was below our expectations and

71 International Breweries Plc.

CHAIRMAN’S STATEMENT

we are not satisfied with the results. stand that to reach our ambitious goals,

There were many successes, but we also we need to embrace these challenges

faced many challenges. head-on and transform them into op-

portunities for success. To this, we are

In the year under review, we continued committed.

to enhance our focus on top-line growth

and value creation while adopting a Rights Issue

more balanced strategy between volume

and revenue per hectolitre growth. We In the 4th quarter of 2019, our Com-

grew volumes by double digits during pany engaged in a Rights Issue of

the year, with continued gains in market 18,266,206,614 ordinary shares of 0.50

share. Kobo each at N9.00 per share on the

basis of 17 new ordinary share for every

Despite the gains, the downward turn 8 ordinary shares held. The essence of

in the financial performance has been this project was to raise the needed fi-

driven by the impact of increased finance nance to help reduce our debt portfolio.

and operational costs. Additionally, chal- While, the proceeds did not reflect in our

lenging macroeconomic environment account for this period, I am pleased to

in many of our relevant inform this meeting that

markets pressured con- the rights issue was a

sumer disposable in- success.

come, resulting in trade- We delivered The positive impact of
down and consumption Net Revenue the Rights Issue unfor-
contraction. growth of 9.7% tunately could not be
We delivered Net Rev- in 2019, despite realized by year-end
enue growth of 9.7% the increase in owing to circumstances
in 2019, despite the excise duty rate beyond our control, but
increase in excise duty we are hopeful that in the

rate implemented in June emerged financial year,

2019. the proceeds will help

our Company to begin

Our Gross Profit de- stemming the tide of our

creased by 30.2% with Gross Profit high cost of finance.

Margin held back at 19.0%. We faced

significant headwinds in our cost base My special thanks on behalf of the Com-

driven primarily by higher annual in- pany goes to everyone who took up their

crease in commodity and transactional Rights even at a time considered most

currency costs. critical for the Capital Market, coupled

Overall, in 2019, we reported a loss be- with the yuletide season.

fore tax of N36bn mainly driven by the Let me assure you, our beloved share-

increase in excise duty rate, higher raw holders, that as a Board, we are com-

material prices and higher depreciation mitted to a complete reduction of all

expense and cost of finance. We under- external debt to ensure profitability in

International Breweries Plc. 72

CHAIRMAN’S STATEMENT

the near future. application process for national reach
and transparency and collaboration with
Touching lives in our Communities like-minded credible organisations such
as the Enterprise Development Centre,
We are closely connected to the com- Lagos State Employment Trust Fund and
munities where we live and work. Our the Bank of Industry.
products are almost entirely sourced and
locally brewed. We strive to contribute In a period under review, IBPlc. emerged
positively to important issues such as as the Best Company in Provision of
Empowerment, Educa-
tion, Health, Infra- Clean and Affordable
structure Support and Energy at the prestig-
Responsible Drinking in ious 13th edition of
such communities. Our the SERAS CSR Awards
goals are focused on Africa 2019. The award
where we can make the was in recognition of
greatest positive impact. our investment in envi-
ronmental protection,
We continued to con- renewable energy and
tribute our own quota other sustainability initia-
to reducing unemploy- tives within our operations.
ment in the Country with IBPLC. remained the first
the Kickstart programme. brewery in Nigeria to use
In the year under review, solar to power some part of
Ninety (90) youths, some its operations.
of our country’s brightest,
received financial grants of Our community development
N73, 836,000 (ranging be-
tween N250,000 - N3million projects around our plants at
each) from our International
Breweries Foundation. The Gateway, Onitsha, Ilesa and
youths also benefited
from entrepreneurship Port Harcourt on water re-
training and a one-year
post grant mentorship by iterate our commitment to
accredited mentors. Some of the
key achievements of Kickstart included Water Stewardship, which
its upgrade to a national spread (from 2
regions); recognition/commendation by remains one of our 2025
the Vice President, Prof. Yemi Osinbajo;
an endorsement by the Small and Me- Global Sustainability
dium Enterprise Development Agency of
Nigeria (SMEDAN); digitalisation of the Goals. The commission-

ing of health care deliv-

ery centres which has received

commendations from stakeholders and

impacted our host communities is a

testament of our commitment towards

building a better world.

73 International Breweries Plc.

CHAIRMAN’S STATEMENT

The Board Igwe Peter Anugwu ( both of whom are
over 70yrs, special notice having been
In the course of the financial year under received by the Company in accordance
review, the following directors exited the with Section 256 of the Companies and
Board- Mrs. Annabelle Degroot Manag- Allied Matters Act, Cap. C20, Laws of the
ing Director, Mr. Zuber Momoniat Finance Federation, 2004), Mr. Michael Ajukwu
Director with effect from 31 December, and Abiye Tobin-West who were the
2019 and Mr. Godwin Oche with effect longest serving, retired by rotation and
from 30 September, 2019. being eligible have offered themselves
for re-election in line with the Articles
Annabelle Degroot moved into a new of Association. Their re- election will be
role in Europe within the AB InBev proposed at this meeting.
group while Zuber and Godwin moved
on to other interests. They all played Outlook
an integral part in the restructuring and
transformational changes witnessed by The outbreak of the COVID-19 pandemic,
the Company which earned the Company its impact on our economy and particu-
the No. 2 position in the Nigerian brew- larly in our area of business has beat the
ing industry. imagination of every financial analysts
with no mitigating model in sight. Your
Mr. Hugo Dias Rocha replaced Annabelle Board and Management have ignited our
Degroot as Managing Director while Mr. business continuity plans to ensure that
Bruno Zambrano Arana replaced Mr. Zu- the Company remains a going concern
ber Momoniat as Finance Director both and increased health and safety meas-
with effect from 1 January, 2020. They ures for our workforce.
both come to the Company with signifi-
cant experience in leadership roles and We are also relentlessly committed to in-
across the ABInbev markets. Mrs. Tolu- novating and exploring new opportuni-
lope Adedeji was also appointed to fill ties to excite our consumers. Innovation
the casual vacancy created by the exit of is an important driver of our commercial
Mr. Oche effective 30 September, 2019. strategy. We will continue to invest in
new capabilities, enabled by technology,
These new appointments which were to better connect with our customers
made during the year under review will and consumers. These initiatives are
be ratified at this Annual General Meet- more relevant now than ever before.
ing.
Our commitment to financial discipline is
Also, in compliance with the provisions unwavering, especially in the context of
of Article 45 of the Articles of Associa- volatility. We will continue to proactively
tion of the Company which requires one manage those factors upon which we
third of the Directors for the time being have impact and influence.
to retire from office, the following Direc-
tors: HRM Nnaemeka Alfred Achebe, I urge you to continue believing and

International Breweries Plc. 74

supporting the dream of a sustain- International Breweries Plc.
able Company. We have the mettle to
become number one in this market.
Though it tarries, it will surely emerge.
Steadily our planned focus and renew-
ing strategies will define our business
in the coming years.

Conclusion

I sincerely thank all our employees on
behalf of the Board for their resilience,
dedication and agility. You are the
greatest asset of our Company. Your
inspiration and energy are indispensa-
ble to making International Breweries
Plc survive. Dreaming big is in our
DNA and together, as we begin 2020,
we firmly believe that with our com-
mercial strategies, consumer loyalty
in our brands, increasing geographic
footprint, unparalleled efficiency and,
most importantly, our strong pipeline
of committed and talented people, we
can deliver on the new phase of our
objectives now and in the future.
Thank you.

HRM, Nnaemeka Alfred Achebe CFR Mni
Agbogidi
Chairman of the Board.

75

FINANCIAL STATEMENT

Report of the Directors

The directors submit their report together with the audited financial statements for the year ended 31
December 2019, to the members of International Breweries Plc (“the Company”). This report discloses the
financial performance and state of affairs of the Company.

1. Incorporation and address

2. 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. The company is
situated at 22/36 Glover road, Ikoyi, Lagos Nigeria.

Legal form

3. 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. The Company is
a part of the AB InBev Group (The largest Brewer in the World).

Principal activities

The principal activities of the Company are brewing, packaging and marketing of alcoholic and
non-alcoholic beverages.

4. Operating summary

The principal activities of the Company are brewing, packaging and marketing of alcoholic and
non-alcoholic beverages.

Revenue 2019 2018
N’000 N’000
Loss before tax
Tax credit 132,351,500 120,610,825
Loss for the Year
(36,166,949) (8,116,461)
Total comprehensive (loss)/income for the year 8,376,284 4,183,014
(3,933,447)
(27,790,665)
(4,131,589)
(27,650,550)

77 International Breweries Plc.

Report of the Directors

5. Dividend declaration

The Board maintains a dividend policy which guides its decision on dividend declaration. The
Directors therefore resolved not to recommend the payment of a dividend for the period ended
31 December, 2019. The board view this decision as appropriate in the short term and in the

future interest of the Company owing to the current gearing ratio.

6. Directors

The names of the directors as at year end and date of this report are as set out in the corporate
information page. The following directors served during the year under review but resigned
before 31 December, 2019: Mr. Godwin Oche, Mrs. Annabelle Degroot, and Mr. Zuber Momoniat.

Ms. Olutoyin Odulate was appointed on 18 April 2019, Mrs. Tolulope Adedeji was appointed on 18
September 2019, to fill the casual vacancy created by the exit of Mr. Godwin Oche. Mr Hugo, Dias
Rocha and Mr Bruno Zambrano were both appointed with effect from 1 January, 2020 to fill the
casual vacancy exit of Mrs. Annabelle Degroot, and Mr. Zuber Momoniat created on the Board
effective 31 December, 2019.

Details of the Directors’ interest in the Company’s shares during the year under review; as at the
date of approval of this report and as recorded in the register of members and or notified by
the Directors for the purpose of Section 275 of CAMA as well as the Listing Rules of the Nigerian
Stock Exchange are set out below. Directors whose names did not appear here do not have any
direct/indirect shareholding in the Company.

December 2019 December 2018
Number Number

Direct holding 40,732,127 40,732,127
HRM Igwe Nnaemeka Alfred Ugochukwu Achebe 72,647 72,647
Mr. Sunday Akintoye Omole
Michael Onochie Ajukwu 62,000,000 69,750,522

Indirect holding 968,087 968,087
Mr. Sunday Akintoye Omole 106,904,126 106,904,126
('Through Cardinal Investment Nigeria limited)
Mr.Olugbenga Awomolo
(Through Newco Investment Company Limited)

7. Directors’ interest in contracts

All directors with interest in contract have notified the company for the purpose of Section 277
of the Companies and Allied Matters Act, Cap.20 LFN 2004 of their direct or indirect interest in
contracts or proposed contract during the year.

International Breweries Plc. 78

Report of the Directors

The directors do not have any interest required to be disclosed under Section 275 of the
Companies and Allied Matters Act CAP C20, Laws of the Federation of Nigeria 2004.

8.

Property, plant and equipment

Information relating to change in property, plant and equipment is given in note 13 to these
financial statements. A total of N56.8 billion was expended on property, plant and equipment
during the year.



9. 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. The Board is aware of the new National Code
on Corporate Governance and has began the application of the 28 principles as enshrined in the
Code. The company’s conviction is that corporate governance practices should be accorded
a more practical approach in enhancing company ideals and management performance. In
fulfilment of the SEC Code and the National Code, the Company has appointed an Independent
non-executive director.

(i) Leadership and effectiveness
Board of Directors: Composition, Independence and Renewal
The board was composed of as at the date of this report, the chairman, eight non-executive
directors and three executive directors.

The board considers its directors as at year end and as at the time of this report as independent for
the purpose of their contributions to the invaluable integrity, corporate wisdom and experience
towards the board and committees’ deliberations and decisions. The board is therefore satisfied
with the performance and continued independence of judgment of each of the directors.


(ii) The Board’s Operation
Board meetings and attendance
The Board of directors met during the year under review. 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 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.


79 International Breweries Plc.

Report of the Directors

Names of Directors Dates of meeting

HRM Igwe Nnaemeka Alfred Achebe 29-1-2019 19-3-2019 18-4-2019 17-7-2019 18-9-2019 15-10-2019 No. of Meetings
(Chairman) Attended
Mr. Akintoye Omole YYY Y YY
Mrs. Annabelle Degroot 6/6
(Managing Director) (RDY) YYY Y YY
Igwe Peter Anugwu 6/6
Mr. Michael Ajukwu YYY Y YY
Mr. Zuber Momoniat (RDY) 6/6
Mrs. Tolulope Adedeji YYY Y YY
Ms. Olutoyin Odulate 6/6
Mr Dias Rocha, Hugo YYY Y NY 5/6
Abiye Tobin-West 5/6
Mr. Olugbenga Awomolo YYY Y NY 2/6
Mr. Andrew Murray 3/6
Otunba Michael Daramola --- - YY
Mr. Godwin Oche -
Mr. Richard Rivett-Carnac - - - Y YY 6/6
6/6
--- - -- 6/6
5/6
YYY Y YY 4/6
5/6
Y‡ Y‡ Y‡ Y‡ Y‡ Y‡

YYY Y YY

YYY N YY

YYY Y NN

YYY N YY

Y - Present
(RDY) – Resigned during the year

- - Not a member of the Board as at that date
‡ - Alternate Director
N - Absent

Operation of the board
The board sets the strategic objectives and delegates to management the detailed planning and
implementation of those policies. The board thereafter monitors compliance of the actualization of the
set policies and objectives through quarterly reports to the board and its committees, enabling directors
to explore and interrogate specific issues for feedback in greater detail.
The board and its committee meetings are held in an atmosphere of robust, constructive and intellectual
debate of issues with sincerity of purpose, integrity and mutual respect.

Matters of exclusive preserve
The board has a schedule of matters as contained in an approval grid which is dealt with exclusively by
the board. This includes but not limited to the approval of financial statements; annual expenditure/
budget plan; material investment or disposals and the Company’s business strategy.

The board governs through its established committees with reporting systems. Each committee or
standing committee has specific written terms of reference and committee charters. All committee
chairmen or their representatives report to the board and their decision extracts are included in the board
packs circularized to all the board members two weeks before their meetings.

International Breweries Plc. 80

Report of the Directors

The following Directors are the longest serving: His Majesty, Nnaemeka Alfred Achebe, Igwe Peter
Anugwu(who are over 70yrs, special notice having been received by the Company in accordance with
section 256 of the Companies and Allied Matters Act, Cap. C20, Laws of the Federation, 2004), Mr.
Michael Ajukwu and Abiye Tobin-West, retired by rotation and being eligible have offered themselves for
re-election in line with the Articles of Association.

Mr. Hugo Dias Rocha replaced Annabelle Degroot as Managing Director and Mr. Bruno Zambrano Arana
replaced Mr. Zuber Momoniat as Finance Director both with effect from 1 January, 2020. They both come
to the Company with significant experience in leadership roles and across the AB Inbev markets. Their
profile is contained in this Annual Report. Mrs. Tolulope Adedeji was also appointed to fill the casual
vacancy created by the exit of Mr. Oche effective 30 September, 2019.
These new appointments which were made during the year under review will be ratified at this Annual
General Meeting. Their re- election will be proposed at this meeting.

Risk and the Board of Directors
The Company’s Board of Directors is ultimately responsible for the Company’s risk management system
and for reviewing its effectiveness. The Company, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees
understand their roles and obligations. The risk management system is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and there is an ongoing process in place for
identifying, assessing, managing, monitoring and reporting on the significant risks faced by the Company.

The Company’s Audit Committee oversees how management monitors compliance with the Company’s
risk management policies and procedures and reviews the adequacy of the risk management framework
in relation to the risks faced by the Company. The Internal Audit function has been expanding in line
with our global risk management structure. The activities and capabilities of the new initiative are far
more improved than the traditional internal audit functions. The new structure will develop business
insights, improve our operations and manage risks in a smart and proactive way using analytical technics
supported by a strong team.

This process has been established for the period under review up to the approval of the Annual Report
and Accounts. The principal risks and uncertainties facing the Company are set out in note 4.

Conflict of interest
The directors are aware and advised to avoid situations where they have, or can have, a direct or indirect
interest that conflicts, or may possibly conflict with the Company’s interests and encouraged to make full
disclosures. In accordance with the Companies and Allied Matters Act 2004 and the Company’s articles
of association, the board can authorize potential conflicts of interest that may arise and to impose such
limit or conditions as it may deem fit. There were however, no actual or potential conflicts of interest
which were required to be authorized by the board during the period ended 31 December 2019.

The Roles of Executive and Non-Executive Directors
The executive directors are responsible for proposing strategy and for making and implementing
operational decisions. Non-executive directors complement the skills and experience of the executive
directors, bringing independent judgment and making inputs through their knowledge and experience of
other businesses and sectors.

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Report of the Directors

Information dissemination and training

The Company Secretary is responsible for advising the board, through the chairman, on issues of corporate
governance. The secretariat supplies the board and its committees with full and timely information through
meeting packs and other resources to enable directors to prepare adequately for their meetings and take
informed decisions.

The company is committed to the continuing development of directors in order that they can build on their
expertise and develop an ever more detailed understanding of the business and the ever changing legal
and regulatory environment.

Other Appointments
Non-executive directors may serve on the boards of other companies in other to widen their experience
and knowledge for the company’s benefit. Directors ensure that their effectiveness on the board is not
compromised by their external commitments. The board is pleased that the chairman and the non-
executive directors commit enough time to their duties and the non-executive directors have confirmed
that they have sufficient time to fulfil their respective obligations to the Company. The Firm of Ernst &
Young performed a board evaluation of the Director’s activities and performance for the year under review.

Board, Committees and Director’s performance evaluation
The Board subscribes to performance evaluation processes in line with best practice and as prescribed by
the National Code on Corporate Governance. A formal evaluation of the board’s performance was carried
out for the year ended 31 December 2019.The board considers its performance in the year under review as
satisfactory and largely in compliance with prescribed codes of corporate governance. The board would
be due for an independent assessment by the next financial year. The Firm of Ernst & Young performed a
board evaluation of the Director’s activities and performance for the year under review. Their certication
notes on these board perfomace evalutions is on page 94 on this annual report.

The Company Secretary
The Company Secretary who acts as secretary to the board and its committees attended all the meetings
during the year under review.

(iii) The Board Committees

The Audit Committee
The audit committee chaired by Mr.Oladepo Adesina met during the period under review. The members
representing the shareholders are Mr. Moses Ijayekunle and Mr. Adetunji Ajani Babajide, Mr. Michael
Ajukwu, Abiye Tobin-West and Mr. Olugbenga Awomolo are representives of the board.

The Global Risks Management Manager, Internal Control Manager and the Finance Director attended the
committee meetings by invitation while The External Auditors just attended a meeting. The work of the
committee during the period included Audit matters and internal audit reviews.

The audit committee reports all activities and makes recommendations to the board. During the year under
review, the audit committee discharged its responsibilities as they are defined in the committee’s terms of
reference and has ensured that applicable standards of governance and compliance are adhered to.

The Internal Control/Global Risks functions have direct access to the committee, primarily through its
chairman. The functions enjoy the benefit of adapting the workings and processes of approved International
and best practice templates for improved efficiency.

International Breweries Plc. 82

Analysis of attendance of meetings of Audit Committee members for the period

Name of Audit Committee Members Date Number of
Mr. Oladepo Adesina - (Chairman/Shareholder) meetings at-
8-3-2019 17-4-2019 16-7-2019 14-10-2019 tended

YY Y Y Total

4/4

Mr. Moses Ijayekunle - ( Member/Shareholder) Y Y Y Y 4/4
Y 4/4
Mr. Adetunji Ajani Babajide - ( Member/Share- Y Y Y Y 4/4
holder)

Mr. Michael Ajukwu - (Director) YY Y

Abiye Tobin-West - (Director) YY Y Y 4/4

Mr. Gbenga Awomolo - (Director) YYY Y 4/4

- Not a member of the Committee as at that date.
N - Absent
Y - Present

The Governance/Remuneration/Nomination Committee

The Committee is charged with the overall responsibility of ensuring that all governance reviews and
strategic plans on remuneration and nomination were complied with.

The committee consist of Mr. Michael Ajukwu, Mr. Akintoye Omole, Abiye Tobin-West and Ms. Olutoyin
Odulate.

Analysis of attendance of meetings of Governance Committee members for the period

Name of governance/ remuneration/ nomination Date Number of meetings
committee member attended

Mr. Michael Ajukwu (Chairman) 17-4-2019 16-7-2019 14-10-2019 Total
Mr. Akintoye Omole Y YY 3
Abiye Tobin-West Y YY 3
Ms. Olutoyin Odulate Y YY 3
- -Y 1

- Not a member of the Committee as at that date
N - Absent
Y - Present

83 International Breweries Plc.

Report of the Directors

The Risk Management/Sustainability Committee

The Committee provides focus on Risks and Sustainability, at all times, taking into cognizance established
best practices. The Committee in that wise assists the Board in its oversight of the risk profile, risk
management framework, risk strategy and the Sustainability framework for the Company.

The Risks Management/Remuneration Committee is composed of six members: Mr. Olugbenga Awomolo,
Mr. Akintoye Omole, Mr. Michael Ajukwu, Abiye Tobin-West, Ms. Olutoyin Odulate and Otunba Michael
Daramola. The Committee held three meetings during the year.

Analysis of attendance of meetings of Risk Management/Remuneration Committee members

Name of governance/ remuneration / nomina- Date Number of
tion committee member meetings at-

Mr. Olugbenga Awomolo (Chairman) 28-1-2019 16-7-2019 14-10-2019 tended
Mr. Akintoye Omole Y Y Y Total
Y Y Y 3/3
3/3
Mr. Michael Ajukwu - - Y
Abiye Tobin-West - - Y 1/3
Ms. Olutoyin Odulate - - Y 1/3
1/3

N - Absent
Y - Present
- Not a member of the Committee as at that date.

International Breweries Plc. 84

10. Share capital

During the year, the number of the Company’s issued ordinary share capital remained at
8,595,861,936 (2018: 8,595,861,936) ordinary shares.

Details of share capital are shown in the report.

Active shareholders range - summary position as at 31 December 2019

Range No of share- Holders % Holders Units Units % Units Cum.
holders Cum.
1 - 1000 18,477 45.76% 18,477 9,876,015 0.11% 9,876,015
1001 - 5000 14,545 36.02% 33,022 36,306,869 0.42% 46,182,884
5001 - 10000 4,596 11.38% 37,618 38,856,929 0.45% 85,039,813
10001 - 50000 2,214 5.48% 39,832 49,300,314 0.57% 134,340,127
50001 - 100000 266 0.66% 40,098 18,110,579 0.21% 152,450,706
100001 - 500000 182 0.45% 40,280 37,435,306 0.44% 189,886,012
500001 - 1000000 29 0.07% 40,309 23,434,415 0.27% 213,320,427
1000001 - 9999999999 0.18% 8,382,541,509 97.52% 8,595,861,936
72 40,381

Grand total 40,381 100% 290,017 8,595,861,936 100%

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 December, 2019 are listed in the table below.
Noteworthy that no other shareholder(s) hold(s) 5% and above in the issued share capital of the
Company as at the date of this report.

Substantial shareholding details: Holding %
Name

AB Inbev Nigeria holdings BV (The “COMPANY) 4,072,100,915 47.37
Brauhaase International Management GMBH 2,377,579,013 27.66

85 International Breweries Plc.

Report of the Directors

Shareholding by category: No. of shareholder Number Of Shares Held Percentage holding (%)
Category of shareholder 7.50
39,778 644,403,790 0.00
Individuals 10.48
Institutional Investors 16 125,700 0.00
Corporate 6.99
Pensioner 546 900,716,642 75.03
State & Local Govt 0.00
Foreign Shareholder 2 313,500 100
Portfolio Investor
Total 5 601,061,576

34 6,449,240,728

40,381 8,595,861,936

Purchase of own shares

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

International Breweries Plc. 86

Report of the Directors

Share capital history

Date Issued No. of Shares Nominal Value Issue Type Remark
(N)
1971 9,000,000 Private Placement Cash
1978 - -
1980 0.50 Private Placement Cash
1981 2,000,000 0.50 Bonus Reserves
1981 2,600,000 0.50
1982 2,200,000 0.50 Private Placement Cash
1982 0.50 Bonus Reserves
1983 200,000 0.50 Bonus Reserves
1985 2,000,000 0.50 Bonus Reserves
1986 2,000,000 0.50 Bonus Reserves
1988 4,000,000 0.50 Bonus Reserves
1989 6,000,000 0.50 Bonus Reserves
1991 6,000,000 0.50 Bonus Reserves
1992 4,000,000 0.50 Bonus Reserves
1993 10,000,000 0.50
1995 31,683,540 0.50 Private Placement Cash
1995 0.50 Private Placement Cash
1996 5,419,692 0.50 Private Placement Cash
1998 4,992,000 0.50 Cash
1999 103,734,000 0.50 Public Offer Cash
2001 0.50 Public Offer Cash
2002 408,000 0.50 Public Offer Cash
2007 426,000 Public Offer Cash
2008 103,216,000 - Rights Issue Cash
2009 120,768 0.50 Rights Issue
2012 212,914,682 Cash
2014 - Public Offer
2017 1,600,000,000 0.50 Cash
2018 0.50 Rights Issue Reserves
1,149,611,748 0.50 Bonus Consolidation
31,722,850 0.50 Merger
Cash
5,301,612,656 Rights Issue
8,595,861,936

87 International Breweries Plc.

Report of the Directors

11. Corporate Social Responsibility

International Breweries continues to make socio-economic investments to support the society and
contributes to the country’s growth. During the period under review, the Company’s corporate social
responsibility towards the society 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.

In response to the rising unemployment population among the youths in Nigeria, 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 2016. 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 list of beneficiaries of the corporate social responsibility program of the company are listed
on pages 22 to 24. of this annual report This excludes gifts in Company products during the year.

Community projects and donations during the year included the following:

Description/projects N’000

Community Health Center Project 30,149
KickStart Project (Youth Empowerment Program) 44,510
Donation for Community Festivals 1,500
School Renovation Project 9,000
Plastic Recycling Project in Collaboration of FBRA 7,000
92,159

It remains the Company’s policy not to make donations to political organisations in the country and
in compliance with section 38(2) of the Companies and Allied Matters Act Cap C 20, Laws of the
Federation of Nigeria 2004, the Company did not make any donation or gift to any political party,
political association or for any political purpose during the year under review.

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Report of the Directors

12. Ethical business conduct

The International Breweries Code of Business Conduct and Ethics as adopted from AB InBev,
sets out high ethical standards with which all Company’s employees are expected to comply, and
forms part of the wider programme of policies and procedures throughout the Company. The
Company personnel are committed to conducting business in a way that is fair, ethical and within
the framework of applicable laws and regulations. During the course of the year, the Company’s
policies and procedures were reviewed in light of related ‘adequate procedures’ guidance, and
developing corporate best practice.

Key aspects covered by the programme include, amongst other matters, our anti-bribery
policy, due diligence and other forms of compliances in relation to business partners, training of
employees and monitoring and reporting mechanisms. Independent confidential whistle blower
hotlines have been re-introduced into the Company’s operations so that employees and third
parties can report any breach. The Company maintain a whistle blowing Procedure to address
issues that can negatively affect the Company’s reputation.

13. Employment, environmental and health safety policies

The Company sustained the most of its workforce post-merger and reinvigorated the work space
with new employees. The people team designed and continually reviewed employment policies
which attract, retain and motivate the highest quality of staff. Management is committed to an
active equal opportunities policy, from recruitment and selection, through training and
development, appraisal and promotion to retirement. It is the Company’s policy to ensure
that everyone is treated equally, regardless of gender, colour, nationality, ethnic origin, race,
disability, marital status, religion or trade union affiliation. In the year under review.

The Company is committed to its new policy on diversity as it understands that the benefit of
employing the right balance in people of different races, genders, creeds and backgrounds.

The Company is ever committed to sustaining its policies and programmes on occupational health
and safety to ensure a safe working environment for all its employees, suppliers, consumers and
visitors to our sites. We have revised our policies on health and safety to enshrine
world class manufacturing practices.

14. Employment of disabled persons

The Company has no disabled persons in its employment. However, application by disabled
persons are always fully considered, bearing in mind the respective aptitudes and abilities of the
applicants concerned. In the event of members of staff becoming physically challenged, every
effort is made to ensure that their employment with the Company continues and that appropriate
training is arranged. It is the policy of the Company that the training, career development and
promotion of physically challenged persons should, as far as possible, be identical with those of
other employees.

89 International Breweries Plc.

Report of the Directors

15. Diversity and Inclusion

This top priority for the business was further strengthened in the year under review. Equity,
fairness and transparency were some of the underlying principles of our ways of working.

The Company celebrated the International Women’s Day as part of the Company’s drive to
increase female representation in the workplace. We celebrated on this day, our women who
cut-across roles and functions as forklift drivers way up to Executive Management.

16. Research and development

To ensure improved overall operational effectiveness, considerable emphasis is placed on
research and development in the Company’s technical activities, through the AB InBev Group. This
enables the Company to develop new products, packaging, processes and new manufacturing
capabilities.

17. Going concern

The financial statements have been prepared on a going concern basis. The directors have no
doubt that the company will be in existence after 12 months. The directors do not intend to cease
operations or stop any of the production lines.

The shareholders approved that a Rights Issue be conducted to deleverage the Company’s
balance sheet on 15 October, 2019 . The company is strategically positioned for success in the
future. Although it recorded a loss in the year ended 31 December 2019, it continues to grow in
quality and number.

18. Employee consultation and training

The Company places considerable value on the involvement of its employees in its affairs and has
continued with its practice of keeping them informed on matters affecting them as employees
and on various factors affecting the performance of the Company. Employees are consulted
regularly on a wide range of matters affecting their current and future interest. Employees
receive both internal and external training as necessary.

19. Donations and gifts

In accordance with Section 38(2) of the Companies and Allied Matters Act, the Company did
not make any donations or gifts to any charitable organisations, political associations or for any
other purpose in the course of the year under review (2018: nil).

20. Financial risk

Information on the Company’s financial risk management objectives and policies and details of

International Breweries Plc. 90

Report of the Directors

its exposure to price risk, credit risk, liquidity risk and cash flow risk are contained in note
4 to the financial statements.

The directors are responsible for the management of the business of the Company and
may exercise all the powers vested on them by the Company subject to the articles of
association and relevant statutes

21. Events after the reporting period

On 15 October, 2019 shareholders approved that a Rights Issue be conducted to deleverage
the Company’s balance sheet. The company issued 18,266,206,614 Ordinary Shares of
No.50 each at N9.oo per share on the basis of 17 New Ordinary shares for every 8 Ordinary
Shares held as at 6 November, 2019. At the conclusion of the offer, the Rights Issue was
100% subscribed (with proceed amount ofN164,395,859,526 credited to the Company) and
the Board of Directors on 31 December, 2019 passed a resolution to approve the basis of
allotment.

Approval was yet to be obtained from the Securities and Exchange Commission “SEC” as at
year end and hence, no deposit was recorded for the Rights Issue within the period under
review. The SEC approved the allotment on 23 January, 2020 and the new shares has been
successfully listed by the Nigerian Stock Exchange on 7th February 2020.

22. Stakeholder’s Engagement

We are a Company of owners and the continuing need for engagement is key to our success.
The Company knows its stakeholders and proactively engage with them in regular and
constructive discuss thereby managing the change communications at required times to
ensuring shared value for all.

The effective engagement of a broad spectrum of shareholders was reflective of the
cooperation enjoyed on the timely and successful completion the capital raising for the
Company which ended penultimate this report.

23. Complaints Management Policy

Complying with the rules of the Securities and Exchange Commission on framework for
complaints management, the Company and its Registrars provide responses within its
framework to shareholder issues and concerns.
This framework also provides the opportunity for shareholder feedbacks on matters that
can affect its corporate existence.

24. Auditors

In accordance with Section 357(2) of the Companies and Allied Matters Act, Cap. C20
LFN 2004, Messrs. PricewaterhouseCoopers “PwC” (Chartered Accountants) have

91 International Breweries Plc.

Report of the Directors

indicated their willingness to continue as auditors to the Company. A resolution will be
proposed at the Annual General Meeting to authorise the directors to fix their remuneration.

25. Dealing Policy

International Breweries Plc has a Securities Trading Policy “The Policy” which guides the
Board and Employees when attempting effecting transactions in the Company’s shares.
The Policy provides for periods for Dealing in Shares and other Securities; established
communication protocols on periods when transactions are not permitted to be effected
on the Company’s shares (Close Period) as well as disclosure requirements when effecting
such transactions.
The Company complied with the Nigerian Stock Exchange Rules regarding this Policy in the
year under review.
By Order of the Board:

Muyiwa Ayojimi
Company Secretary/General Counsel
Lagos-Nigeria.
FRC/2013/NBA/00000002667
26 March, 2020

International Breweries Plc. 92

Statement of Directors’ Responsibilities

The Companies and Allied Matters Act requires the directors to prepare financial statements for each
financial year that give a true and fair view of the state of financial affairs of the Company at the end of
the year and of its profit or loss. The responsibility includes:

a. ensuring that the Company keeps proper accounting records that disclose, with reasonable
accuracy, the financial position of the Company and comply with the requirements of the
Companies and Allied Matters Act;

b. designing, implementing and maintaining internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatements, whether due to
fraud or error; and

c. preparing the Company’s financial statements using suitable accounting policies supported by
reasonable and prudent judgements and estimates that are consistently applied.

The directors accept responsibility for the annual financial statements, which have been prepared using
appropriate accounting policies supported by reasonable and prudent judgements and estimates, in
conformity with International Financial Reporting Standards and the requirements of the Companies and
Allied Matters Act.

The directors are of the opinion that the financial statements give a true and fair view of the state of the
financial affairs of the Company and of its profit or loss. The directors further accept responsibility for the
maintenance of accounting records that may be relied upon in the preparation of financial statements, as
well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the Company will not remain a going
concern for at least twelve months from the date of this statement.

HRM Nnaemeka Alfred Achebe, CFR,MNI Bruno Zambrano Alexander Chukwuma Atuona
Chairman Executive Director Country Finance Manager
FRC/2013/NIM/00000001568 FRC/2020/003/00000020628 FRC/2019/ICAN/00000019271
26 March, 2020 26 March, 2020 26 March, 2020

93 International Breweries Plc.

Audit Committee Report

To: The Members of International Breweries Plc

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 period ended 31

December, 2019 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 and staff in the conduct of our duties.
Dated this 25th of March, 2020.

Mr. Oladepo Adesina
FRC/2013/NIM/00000003678

Members of the Audit Committee

1. Mr. Oladepo Adesina Shareholder’s Representative (Chairman)
Member
2. Mr. Moses Ijayekunle Shareholder’s Representative Member
Member
3. Mr. Adetunji Ajani Babajide Shareholder’s Representative Member
Member
4. Mr. Michael Ajukwu Director Representative

5. Abiye Tobin-West Director Representative

6. Mr. Olugbenga Awomolo Director Representative

International Breweries Plc. 94

Independent Auditors’ Report

To the Members of International Breweries Plc

Report on the audit of the financial statements

Our opinion

In our opinion, International Breweries Plc’s (“the company’s”) financial statements give a true and fair
view of the financial position of the company as at 31 December 2019, and of its financial performance and
its cash flows for the year then ended in accordance with International Financial Reporting Standards and
the requirements of the Companies and Allied Matters Act and the Financial Reporting Council of Nigeria
Act.

What we have audited

International Breweries Plc’s financial statements comprise:
• the statement of profit or loss and other comprehensive income for the year ended 31
December 2019;

• the statement of financial position as at 31 December 2019;

• the statement of changes in equity for the year then ended;

• the statement of cash flows for the year then ended; and

• the notes to the financial statements, which include a summary of significant accounting
policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report.

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

Independence

We are independent of the Company in accordance with the International Code of Ethics for Professional
Accountants (including International Independence Standards), i.e. the IESBA Code issued by the
International Ethics Standards Board for Accountants. We have fulfilled our other ethical responsibilities
in accordance with the IESBA Code.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion there on, and we do not provide a
separate opinion on these matters.

95 International Breweries Plc.

Independent Auditors’ Report

Key audit matters How our audit addressed the key audit
Impairment 011 trade receivables - N3-5 billion matter
(notes 2 .11, 3a, 4.30, 17-1)
We adopted a substantive approach to test the
impairment on trade receivables Specifically, we:

At 31 December 2019, the company’s trade • evaluated the reasonableness of the
receivable balance is N26.6 billion. methodology adopted for calculating ECL on
We focused on impairment on trade receivables trade receivables;
because the directors made significant and
subjective judgement in determining the amount • checked that benchmarked default patterns
of loss allowance. The directors have utilised the have been appropriately considered to
simplified approach in assessing the loss allowance determine the loss rates for lifetime ECL;
for trade receivables.
• assessed the reasonableness and reliability of
the source of the benchmarked patterns applied;

Significant judgement exercised by management • checked mathematical accuracy of formulae
include: applied in the ECL calculation by recalculating
Methodology used to determine the loss rates the benchmark default pattern and the lifetime
and the benchmark default pattern applied for ECL;
the calculation of the lifetime Expected Credit
Loss (ECL); • checked management methodology for
evaluating the impact of macroeconomic
factors on the loss rates and performed
regression analysis on the historically adopted
loss rate and applicable historical macro
-economic variables;

• Methodology used to access the impact of • checked the forward-looking information used
macroeconomic factors on the loss rates; and in the ECL model to externally available sources
and assessed the reliability of those sources;

• Incorporation of forward- looking information • checked the sensitivity of the loss rates to
such as inflation rate, unemployment rate and forward-looking assumptions; and
crude oil prices in determining the ECL.

• checked the presentation and disclosure of
trade receivables in the financial statements.

Other information

The directors are responsible for the other information. The other information comprises Corporate
Information, Report of the Directors, Report of the Audit Committee, Statement of Directors’
Responsibilities, Statement of Value Added and Five-Year Financial Summary (but does not include
the financial statements and our auditor’s report thereon), which we obtained prior to the date of this

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auditor’s report, and the other sections of the International Plc 2019 Annual Report, which are expected to
be made available to us after that date.

Our opinion on the financial statements does not cover the other information and we do not and will not
express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.

When we read the other sections of the International Breweries Plc 2019 Annual Report, if we conclude
that there is a material misstatement therein, we are required to communicate the matter to those charged
with governance.

Responsibilities of the Directors and those charged with governance for the financial
statements

The directors are responsible for the preparation of the financial statements that give a true and fair view
in accordance with International Financial Reporting Standards and the requirements of the Companies
and Allied Matters Act, the Financial Reporting Council of Nigeria Act, and for such interna l 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.

In prepa ring the financial statements, the directors are respons ible for assessing the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the company’s financial reporting process..

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence

97 International Breweries Plc.

Independent Auditors’ Report

that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the company to cease to continue
as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures , and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters , the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding indep endence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determ ine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

The Companies and Allied Matters Act requires that in carrying out our audit we consider and report to
you on the following matters. We confirm that:

i.) we have obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;

ii.) the company has kept proper books of account, so far as appears from our examination of those
books and returns adequate for our audit have been received from branches not visited by us;

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iii.) the company’s statement profit or loss and other comprehensive income and statemen t of financial
position are in agreement with the books of account.

For : PricewaterhouseCoopers 27th March 2020
Chartered Accountants
Lagos, Nigeria

Engagement Partner: Udochi Muogilim
FRC/2013/ICAN / 00000003209

99 International Breweries Plc.

Ernst & Young Tel: (234 -1) 4630479, 4630480 Fax:
UBA House, 10th Floor (234 -1) 4630481
57 Marina, Lagos E-mail: [email protected]

Report of External Consultants on the Board Performance Evaluation of International
Breweries Plc

We have performed the evaluation of the International Breweries Plc (IBP) for the year ended 31st
December, 2019 in accordance with the guidelines of Section 15.1 -7 of the Securities Exchange Commission
(SEC) Code of Corporate Governance (CCG) 2014 for public limited companies.

The SEC CCG 2014 recommends an annual evaluation of the Board and individual directors of companies,
with specific focus on the board structure and composition, responsibilities, processes, relationships,
individual director’s competences and respective roles in the performance of the board. Subsection 15.6
recommends that the Board engages the services of external consultants to facilitate the performance
evaluation of the Board and its Committees while 15.4 recommends that the result of the Board Evaluation
should be communicated and discussed by the Board as a whole.

Our approach included the review of International Breweries Plc’s Corporate Governance framework, and
all relevant policies and procedures. We obtained written representation through online questionnaires
administered to the Board members and conducted one-on-one interviews with directors.

The evaluation is limited in nature, and as such may not necessarily disclose all significant matters about the
company or reveal irregularities, in the underlying information.

On the basis of our work, the Board of International Breweries Plc has complied with the requirements of
Section 15.1 – 7 of the SEC CCG 2014 during the year ended 31st December, 2019.

Specific recommendations for the further improvement of International Breweries Plc’s Corporate
Governance practices have been articulated and included in our detailed report to the Board.

For: Ernst & Young

Bunmi Akinde 100
Partner, Advisory Services
FRC/2012/ICAN/00000000187
January, 2020.

International Breweries Plc.