2015 annual report - champion breweries plc (champion) champion annual report.pdf · nigeria. tel:...

Annual Report

2015

Contents

Corporate Information

Company’s Profile

Financial Highlight

Notice of Annual General Meeting

Chairman’s Statement

Directors’ Report

Board of Directors Profile

01

02

04

05

06

09

14

Notes to the Financial Statements

Additional Information

Proxy Form

Independent Auditor’s Report

Statement of Financial Position

Statement of Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

20

21

22

23

24

25

48

51

53

Shareholder E-service Application FormCorporate Governance Report

Statement of Directors’ Responsibilities

Audit Committee’s Report

15

18

19

Page Content Page Content

Champion Breweries Plc Annual Report 2015

Corporate Information

COMPANY SECRETARY Tosan Atle Aiboni/LEGAL ADVISER: FRC/2014/NBA/00000006228 Industrial Layout, Aka Offot, Uyo, Akwa Ibom State REGISTERED OFFICE: Industrial Layout, Aka Offot, P.M.B. 1106, Uyo, Akwa Ibom State, Nigeria. Tel: 08072290942, 08072290943 [email protected] www.championbreweries.com REGISTRARS: Africa Prudential Registrars Plc 220B, Ikorodu Road, Palmgrove, Lagos, Nigeria. Tel: 07080606400 [email protected] INDEPENDENT AUDITORS: KPMG Professional Services KPMG Tower, Bishop Aboyade Cole Street, Victoria Island, Lagos. Tel: (01)2718955, www.kpmg.com/ng

DIRECTORS

01

Dr. Elijah W. Akpan - Chairman

Mr. Sharm G. Kulkarni (Indian) - Managing Director

Mr. Samson E. Aigbedo - Director

Mr. Marinus Johannes Adrianus Gabriels (Dutch) - Director

Mr. Samuel O. Onukwue - Director

Mr. Thompson S. B. Owoka - Director

Mr. Hendrik van Rooijen (Dutch) - Director

Alhaji Shuaibu A. Ottan - Director

Mrs. Helen A. Umanah - Director

REGISTRATION NUMBER: RC: 13388

Company’sProfile02

Champion Breweries Plc has

consistently operated with a

blend of local content and

international best practices and

standards. This has resulted in

the Company achieving profit in

her 2015 results.


03

Champion Breweries Plc the “Company”, was incorporated as a private limited liability Company in Cross-River State in 1974 as “South East Breweries Limited”. This was changed to “Cross River Breweries Limited” and thereafter to “Champion Breweries Limited”.

The Company became a public limited liability company on the 1st of September 1992 and was listed on the Nigerian Stock Exchange as of September 1, 1993.

In December 1976, “Champion Lager beer” was successfully launched into the market. Production capacity was increased from 150,000 to 500,000 hectolitres by the commissioning of a second production line in December 1979.

With high quality and good market performance, Champion Lager Beer and Champ Malta won several awards which are not limited to the Silver Medal in Paris, International Medal for Quality at the 16th World Selection for Beers and non-alcoholic beverages in Luxemburg, Pearl highest Share Price Appreciation in the Nigerian Stock market in 2002, NIS Silver Award in 2005 and NIS Gold Award in 2006.

The Company embarked on an expansion plan which involved substantial amount of resources that could not be recouped. The non-completion of the expansion projects arising from inadequate capital forced the Company to close its doors for business for eleven years from 1990.

The Company’s brewery was officially re-opened in October 2001. In addition, the Company successfully held an Extra-Ordinary General Meeting of its Shareholders during which approval was granted for the authorized share capital of the Company to be increased from N26 million to N450million.

In January 2011, Heineken acquired an indirect interest in the Company through its acquisition of Messrs. Montgomery Ventures Incorporated (MVI) of Panama. On 28 December 2011, Consolidated Breweries acquired a 57% equity stake in Champion Breweries which was previously held by Montgomery Ventures Inc. (Panama). In December 2013, the Securities and Exchange Commission approved the sale of Consolidated Breweries holding in the Company to The Raysun Nigeria Limited “Raysun”, a wholly owned subsidiary of Heineken, via a Scheme of Arrangement.

With the drive to re-capitalize the Company as well as pay-off her debts, the shareholders approved an increase in the Company's authorized share capital to N4.50 billion in 2014 through right issues of ordinary shares. The successful conclusion of the Rights Issue led to the Company raising the sum of Eleven Billion, Three Hundred Million Naira (N11,300,000,000.00) to pay her pending debts. The Company also converted deposits for shares by The Raysun and Akwa Ibom Corporation amounting to N1.1billon to shares capital by private placement of ordinary shares in 2015, and this resulted to further increase in share capital to N3.91 billion.

Champion Breweries Plc has consistently operated with a blend of local content and international best practices and standards. This has resulted in the Company achieving profit in her 2015 results. As at reporting date, the Company has paid off all its borrowings and is better positioned for sustainable growth forthwith.

Champion Breweries Plc still maintains its high quality Champion Lager Beer brand and remains a pride to the consumers. Champ Malta was also re-introduced into the market in 2015 to increase the Company's brand portfolio and overall volumes.

Financial Highlight04


For the year ended 31 December 2015

2014 2015

N’000 N’000

Revenue 3,302,383 3,501,845

Operating profit 25,511 206,769

Profit/(loss) before taxation (1,071,765) 210,179

Taxation (317,242) (133,039)

Profit/(loss)for the year (754,523) 77,140

Other comprehensive income, net of tax (39,422) 17,485

Total comprehensive income (793,945) 94,625

Stock Exchange information:

Stock Exchange quotation in Naira per share 7 3

Number of shares issued (in millions) 7,200 7,830

Market capitalization (in millions) 50,256 20,639

Notice of Annual General Meeting 05


A. ORDINARY BUSINESS

1. Lay before members, the audited financial statements for the year ended December 31, 2015 and the Directors', Auditor's and Audit Committee's Reports thereon.

2. Elect/re-elect Directors as maybe applicable.

3. Authorize the Directors to fix the remuneration of the Auditors.

4. Elect/re-elect shareholders' representatives on the Audit Committee.

B� SPECIAL BUSINESS

5. To approve the remuneration of Directors

6. To consider and if thought fit, pass the following resolution as an ordinary resolution of the Company:

“That a general mandate be and is hereby given to the Company to enter into recurrent transactions with related parties for the Company's day-to-day operations, including the procurement of goods and services, on normal commercial terms.”

NOTICE IS HEREBY GIVEN that the 40th Annual General Meeting of Champion Breweries PLC will be held on Thursday, May 12, 2016 at the Lagoon Restaurants, 1C Ozumba Mbadiwe Street, Victoria Island, Lagos at 12.00 noon to:

1. PROXIES A member of the Company

entitled to attend and vote at the meeting is entitled to appoint a Proxy to attend and vote on a show of hands A . Proxy need not be a member of the Company. A form for proxy is supplied with the notices circulated to members and if it is to be valid for the purpose of the meeting, it must be duly completed, stamped and deposited at the office of the Registrars to Champion Breweries Plc, Africa Prudential Registrars Plc, 220 B, Ikorodu Road, Palmgrove, Lagos not less than 48 hours before the time of the meeting.

2. APPOINTMENT OF MEMBERS OF THE AUDIT COMMITTEE

Any member of the Company may nominate a Shareholder as a member of the Audit Committee of the Company by giving notice in writing of such

nomination to the Company Secretary at least 21 days before the Annual General Meeting.

3. CLOSURE OF REGISTER

The Register of Members shall be closed on Wednesday, March 30, 2016 for the purpose of updating the Register.

Dated February 11, 2016.

By Order of the Board

Tosan Atle AiboniCompany Secretary/Legal AdviserFRC/2014/NBA/00000006228Registered Office:Industrial Layout,Aka Offot, Uyo, Akwa Ibom State.

NOTE:

06


Dr. Elijah W. Akpan Chairman

Chairman’s Statement 07


I am pleased to welcome you all on behalf of the Board of thDirectors to this 40 Annual General Meeting and present

to you the annual report for the year ended 31 December

2015 as well as a review of the Company's performance

for the year.

Permit me to inform you that in 2015, Chief Senas J.

Ukpanah, OFR resigned as a Director of the Company.

During the same period, The Board of Directors

unanimously approved my appointment as Director

representing Akwa Ibom State Government in place of

Chief Ukpanah as well as voting for me as the Chairman of

the Board hence the privilege I'm given to present to you

this report.

I shall also review major developments in the

environment under which we operated.

OPERATING ENVIRONMENT

The year 2015 experienced a sharp downturn and

remained challenging for the global and local economy.

Expectations on the outcome of the presidential election

were high and the economy was practically put to a halt at

that stage. President Muhamadu Buhari led government

won the general election and was sworn-in. The peaceful

conclusion of the general election restored high level of

hope to the public and international communities

thereafter.

The economy was badly hit with a shocking downturn

due to insufficient supply of foreign exchange occasioned

among other factors by sharp decline in the global price of

oil. This has negatively impacted on 80% of Country's

source of revenue. With major reliance on importation,

there has been a reduction in the supplies of goods and

many businesses have been struggling to survive.

Direct Foreign Investment inflows into Nigeria in 2015

slumped 53% to $9.643 billion from $20.750 billion 2014

levels as soft oil prices hit. Data from the National Bureau

of Statistics (NBS) provides that Nigeria's real Gross

Domestic Product (GDP) fell to 2.35% in second quarter

of 2015, compared to 6.54% in same period in 2014.

Sectors such as manufacturing and services were

adversely affected after recording successive decline

over the last three quarters.

DISTINGUISHED SHAREHOLDERS,

Ladies and Gentlemen,

Nigerian capital market ended the year on a bearish

note with investors losing N1.387 trillion in value. The

bearish trend in the market is largely expectation-

induced by continuous drop in foreign exchange

earnings with consequent devaluation pressure on the

Naira.

Government's effort in curbing insecurity in the North

East has been very commendable, however the

situation has remained a challenge as the Boko Haram

sect stepped up its terrorist activities with random

acts of suicide bombings.

The slowdown in the Nigerian economy still persisted

with a further drop in crude oil prices still impeding

foreign exchange supply in the largely import-

dependent economy thus increasing devaluation

pressure on the naira. The insistence of the monetary

authority on controlled foreign exchange regime

coupled with some foreign exchange restrictions has

increased the gap between the official rate and the

parallel market.

TRADING RESULTS

The trading results of the year under review shows

substantial improvement compared to previous years.

Revenue increased to N3.5billion (2014: N 3.3 billion),

while operating profit was N 207 million (2014:N 26

million) Profit before tax was N210 million (2014:loss

of N1.1 billion) due to high impact of finance cost. The

Company's successful conclusion of debt re-

financing, increase in production and sales volume of

Champion Lager Beer as well as re-introduction of

Champ Malta has resulted in positive turnaround of

the business performances during the year.

RE-CAPITALIZATION

The Private Placement exercise in respect of deposit

for shares by The Raysun Nigeria Limited and Akwa

Ibom State Government respectively have been duly

completed within the year under review.

08


Chairman’s Statement (cont’d)

BOARD MATTERS

The Board has continued to ensure compliance with

the provisions of good corporate governance and

related statutory provisions. Efficient performance of

the Board Committees remains commendable.

As mentioned earlier, Chief Senas J. Ukpanah resigned

within the year. This was as a result of completion of his

service to the Akwa Ibom State Government as

Chairman of Akwa Ibom Investment Corporation

'AKICORP'. Chief Ukpanah led the Board in formulating

and execution of Champion turnaround strategy that

has ushered this Company into profitability today. Mr.

Didier Leleu also retired as a Director within the year

under review.

On your behalf, the Board thanked both Chief Ukpanah

and Mr. Leleu for their contribution and support to the

Company and wished them well in their future

endeavors.

During this same period, Mr. Samson Aigbedo and my

humble self were appointed to the Board of Directors

on 3 December 2015 and 22 October 2015 respectively.

Also appointed was Mrs. Helen Umanah to represent

the interest of minority shareholders on the Board.

The Directors retiring by rotation in accordance with

the Company's Articles of Association and Section 259

of the Companies and Allied Matters Act Cap C 20

Laws of the Federation of Nigeria 2004 are Messrs

Samuel Onukwue, Thompson Owoka and Hendrik van

Rooijen who being eligible, have offer themselves for

re-election.

FUTURE OUTLOOK

Year 2016 has started on a challenging note for the

Nigerian economy with global commodity price slump

and global liquidity volatility which has dwindled both

exports income and capital inflows as well as local

currency devaluation.

We also foresee stronger competition with ongoing

global mergers between brewing giants in the world.

This will lead to more innovations and inflow of new brands

in the market.

However, Nigeria's outlook in 2016 is brightened by the

large and varied opportunities in different sectors of the

economy. We shall explore the available possibilities the

Nigerian business environment is offering to increase our

market share within our business region. Considering our

present financial position from deficit to surplus, our

Company has the right mindset and structures to achieve

payment of dividend to you our esteemed shareholders in

no distant future.

We remain resolute in continuously achieving cost

optimization and innovation for increased profit.

CONCLUSION

Distinguished shareholders, your confidence, trust and

support of the Board, Management and employees of the

Company cannot be over emphasized. You have remained

with the Company through “thick and thin” to reach where

we are today.

The Board expresses her appreciation to management of

the company The Raysun Nigeria Limited, in the use of

improved technology, marketing standards and best

practices. Our host Government, Akwa Ibom State, for

providing enabling environment and support for our

freedom of operation to our business. We would not fail to

thank you our esteemed shareholders and other

stakeholders for your efforts, support and guidance in re-

development of our Company.

Thank you and God Bless.

Dr. Elijah AkpanChairman

Directors’ Report 09


For the year ended 31 December 2015

The Directors are pleased to present the annual report of Champion Breweries Plc ("the Company") together with the

financial statements and independent auditor's report for the year ended 31 December 2015.

Legal Form and Principal Activity

The Company was incorporated in Nigeria as a limited liability company on 31 July 1974 and was later converted to

a public limited liability company on 1 September 1992. The Company's principal activities continue to be brewing

and packaging of Champion Lager Beer as well as provision of contract brewing services to Nigerian Breweries Plc,

a related party within the Heineken group. The Company re-commenced production and marketing of its non-

alcoholic beverage drink- Champ Malta in October 2015.

Operating Results

The following is a summary of the Company's operating results:

Revenue 3,302,383 3,501,845 Operating profit 25,511 206,769 Profit/(loss) before tax (1,071,765) 210,179 Taxation 317,242 (133,039) Profit/(loss) for the year (754,523) 77,140 Other comprehensive income, net of tax (39,422) 17,485 Total comprehensive income for the year (793,945) 94,625 Dividend

The directors did not recommend any dividend during the year (2014: Nil).

Board of Directors

The Directors are responsible for oversight of the business, long-term strategy and objectives, and oversight of the

Company's risks while evaluating and directing implementation of the Company's controls and procedures including,

in particular, maintaining a sound system of internal controls to safeguard shareholders' investments and the

Company's assets. Directors and their Interests

The names of Directors who held office during the year under review as well as their interest in the issued share

capital of the Company as recorded in the Register of Members and/or notified by the Directors in compliance with

Section 275 of the Companies and Allied Matters Act Cap C 20 Laws of the Federation of Nigeria 2004 were as

follows:

2015 2014 N'000 N'000

�

20142015

Number of Ordinary Shares

Dr. Elijah W. Akpan (Chairman)** - -

Chief Senas J. Ukpanah, OFR (resigned 22 October 2015)** 1,000 1,000

Mr. Sharm G. Kulkarni (Indian) (Managing Director)* - -

Mr. Marinus J. A. Gabriels (Dutch) (appointed 11 February 2015)** - -

Mr. Hendrik van Rooijen (Dutch) (appointed 11 February 2015)** - -

Mr. Didier Leleu (French) (retired 3 December 2015)** - -

Mr. Thompson S. B. Owoka** 1,000,000 500,000

Mr. A.K. Mirchandani (American) (retired 22 October 2015)** - -

Alhaji Shuaibu A. Ottan** - -

Mr. Samuel O. Onukwue** - -

Mrs Helen A. Umanah - (appointed 3 December 2015)** - 8,110

Mr. Samson E. Aigbedo - (appointed 3 December 2015)**

* Executive Director ** Non-executive Director

10


Directors’ Report (cont’d)

In accordance with Section 277 of the Companies and Allied Matters Act of Nigeria, no Director notified the

Company of any declarable interest in any contract in which the Company was involved during the year under

review (2014: Nil).

Issuance of Ordinary Shares

During the year, the Board of Directors approved the conversion of share deposits made by The Raysun Nigeria

Limited and Akwa Ibom State Government amounting to N1.1 billion and N52.9 million respectively to ordinary

share capital. This resulted in issuance of 629,496,464 million units of ordinary shares of 50k each at N1.85 through

private placement to these shareholders. As a result of these transactions, the Company's issued share capital

increased to N3.91 billion (2014: N3.6 billion) while share premium increased to N9.1 billion (2014: N8.3 billion).

Analysis of Shareholding

As at 31 December, the company's ordinary shares were held as follows:

The Raysun Nigeria Limited 60.7 57.9 2,084,760 2,376,539

Assets Management Nominee 12.3 13.4 480,960 480,932

Akwa Ibom State Government 10.0 8.5 304,920 391,484

Other shareholders. 17.0 20.2 729,360 665,793

100 100 3,600,000 3,914,748

Property, Plant and Equipment

Information relating to movement in property, plant and equipment during the year is disclosed in Note 11 of the

financial statements.

Donations and sponsorship�� The Company gave donations and provided sponsorship during the year as follows:� �

Scholarship to indigenes of host community� � � 1,200 1,200�Free eye screening for indigenes of host community� � - 720�Other donations� � � 600 - �� 1,800 1,920�� In accordance with Section 38(2) of the Companies and Allied Matters Act, 1990 the Company did not make any donation or give gifts to any political party, political association or for any political purpose during the year (2014: Nil).

Business Review and Future Development��

The Company intends to continue the fulfilment of its objectives as indicated in its Memorandum and Articles of Association. �

% % 2014 2015 N'000 N'000

Ordinary shares of 50k each

2015 2014 N'000 N'000

� � �Corporate Governance� � � �

The Directors are committed to ensuring that best practices in corporate governance are observed in all areas of the Company's business. The Company's policies on corporate governance are continually reviewed with focus on high ethical standards of transparency, integrity, accountability and honesty. The Board continues to formulate policies aimed at creating a well-positioned Company that is keen on constantly harmonising the interests of various stakeholders to the business.

11


Code of Business Conduct

The Company has in place a Code of Business Conduct (CoBC) which provides guidance to all its users on the importance of high ethical values in sustainable business growth. The CoBC is subscribed to by all members of the Board of Directors and all employees of the Company. The Company mandates strict adherence to the Code in the Company's day-to-day operation.� � � �Distribution of Company's Products��

The Company's products are sold by distributors within the country. The list of names of such distributors is available at the Commercial Department of the Company.� � � �Employment and Employees�� (a) Employment of physically-challenged persons� � � It is the policy of the Company that there should be no discrimination in considering applications for

employment including those from physically-challenged persons. All employees whether or not disabled are given equal opportunities to develop their experience and knowledge and to qualify for promotion in furtherance of their careers. A total of two physically-challenged persons were in employment by the Company during the year (2014: two)

(b) Employee training and consultation:� � � � The Company is committed to keeping employees fully informed as far as possible regarding the Company's

performance and progress and seeking their views wherever practicable on matters, which particularly affect them as employees.

Training is carried out at various levels through both in-house and external courses. Management, professional and technical expertise are the Company's major assets and investment in developing such skills continues. The Company's expanding skills base has extended the range of training provided and broadened the opportunities for career development within the organisation.

(c) Health, safety at work and welfare of employees� � � The Company maintains a clinic within the brewery, which provide medical services to all its employees.

Severe medical conditions are referred to designated hospitals whose services are retained by the Company through its health management organisation. Such hospitals are located in areas within convenient reach of employees.

Safety regulations are in place in all locations of the Company and employees are well informed about compliance with such regulations.

Business Intergrity

We are convinced that corruption is evil and detrimental to business environment as well as the society at large. We maintain appropriate anti-corruption policies and programmes in our business. Accordingly, Champion Breweries Plc does not give or receive, whether directly or indirectly bribes or any other incentive to obtain improper advantages for business or financial gain.

Complaints Management Policy

The Company has in place a Complaints Management Policy ("the Policy") in accordance with the requirements of the Securities & Exchange Commission. The Policy stipulates the modalities on handling shareholders' complaints in a fair and just manner and same can be assesed on the Company's website.

Independent Auditors�� KPMG Professional Services served as the independent auditors during the year under review.

In accordance with Section 357(2) of the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004, KPMG Professional Services have indicated their willingness to continue in office as independent auditors to the Company.� � � �By Order of the Board� � � �� Mr. Tosan Atle Aiboni� � �Company Secretary� � � �FRC No: FRC/2014/NBA/00000006228� � � �11 February 2016� � �

Directors’ Report (cont’d)

12


Board of Directors

Dr. Elijah W. Akpan Chairman

Mr. Sharm G. Kulkarni Managing Director

Mrs Helen A. Umanah Director

Mr. M.J. A. Gabriels Director

Sitting from left:

13


Board of Directors

Mr. Hendrikvan Rooijen

Director

Alhaji Shuaibu A. Ottan Director

Mr. Samson E. Aigbedo

Director

Mr. SamuelO. Onukwue

Director

Mr. Thompson S .B. Owoka

Director

Standing from left:


14 Board of Directors’ profile

is the Chairman of Champion Breweries Plc. He holds a Pharm. D (Doctor of Pharmacy) degree from the University of Southern California (1993). He joined the Board of Champion Breweries in October 2015 sequel to his appointment as Chairman of Akwa Ibom Investment Corporation. He currently serves on several Boards representing the interest of Akwa Ibom State Government.

Dr. Elijah Willie Akpan

is the Managing Director of Champion Breweries. He holds a Master's degree (M.Sc.) in Chemistry from the Indian Institute of Technology, Mumbai (1980) and M.Tech in Fibre Science from IIT Delhi in 1982. Mr Kulkani has over 28 years work experience in the organic chemical industry as well as food and beverage sector. He was appointed Managing Director in July 2012. Prior to joining the Board, he was the Brewery Manager at Consolidated Breweries (now Nigerian Breweries Plc).

Mr. Sharm Kulkarni

is a Non-Executive Director of Champion. He holds a B.Sc (Hons) in Biochemistry from the University of Ilorin, Nigeria (1981). He joined Heineken in 1982 in the Technological and Production Department, where he held several roles with increasing responsibility within the supply chain division. He joined the Board of Champion Breweries in December 2015.

Mr Samson Aigbedo

Mr Thompson Owoka

is a Non-Executive Director of Champion Breweries. He holds a H i g h e r N a t i o n a l D i p l o m a i n Accountancy from Yaba College of Technology, Lagos (1986) and is a Fellow of the Institute of Chartered Accountant of Nigeria (ACA 1989 and FCA 1999). He joined the Board of Champion Breweries in 2000 and is currently Public Affairs Manager Nigerian Breweries. Prior to this; Mr Owoka was the Acting Managing Director of Champion Breweries and Executive Director of Sona Breweries. He also seats on the Board of SuperBru Ltd, Jos International Breweries and West African Glass Industries Plc.

Mr Samuel Onukwue

is a Non-Executive Director of Champion Breweries. He holds a H ighe r Na t i ona l D ip loma i n Accountancy from Yaba College of Technology, Lagos (1984), an MBA in Banking and Finance from the University of Lagos (1994) and an MSc in Corporate Governance from Leeds Metropolitan University, UK (2007). He is also a Fellow of the Institute of Chartered Accountant of Nigeria (2000).

Mr Onukwue has extensive work experience in banking and financial services sectors where he served at senior and executive management positions. He is currently the

Mr Marinus J. A. Gabriels

is a Non-Executive Director of Champion Breweries. He holds a Bachelor's degree in Accountancy (HEAO-RA) in 1985. He started his career in Finance & Procurement roles within the Shell Group and rose to the S A P C o n t i n u o u s B u s i n e s s Improvement Manager in Shell

Alhaji Shauibu Ottan

is a Non-Executive Director of Champion Breweries. He holds a Bachelor's degree in Economics from Ahmadu Bello University, Zaria (1980). His work experiences includes Commercial Officer, Kwara Ministry of Commerce and Industry and the Nigerian Industrial Development Bank Limited now Bank of Industry (BOI) where he worked for 31 years before his retirement in June 2013.

He joined the Board of Champion Breweries on 14 February 1998.

is a Non-Executive Director of Champion Breweries. She has performed various roles in the Petroleum industry and diplomatic community within Nigeria and abroad. She was a shareholder member of the Audit Committee of Champion Breweries till My 2015.

Mrs. Umanah, joined the Board of Champion Breweries Plc in December 2015 duly representing minority shareholders.

Mrs. Helen Umanah

was appointed as Company Secretary/ Legal Adviser on June 13, 2013. He was called to the Nigerian Bar in 2002.

His work experience includes; Senior Legal Officer in the Public sector (National Commission for M u s e u m s & M o n u m e n t s ) , Managing Partner of private legal firm (Victoria Chambers) and is presently the Legal Manager – Operations of Nigerian Breweries Plc.

Mr. Tosan Atle Aiboni

Petroleum Development Company – Nigeria (JV) in 2005. He joined the Heineken Group in 2010 and is presently the Strategic Business Controller in Nigerian Breweries Plc.

Mr. Gabriels became a Director of Champion Breweries in March 2015.

Managing Director of Mega Equities Limited, a dealing member of the Nigerian Stock Exchange and serves on Boards of some listed and private companies. He is also the current Treasurer of Association of Stockbroking Houses of Nigeria. He joined the Board of Champion Breweries in 2012.

15


Corporate Governance Report

Champion Breweries Plc adopts a responsible attitude towards corporate governance. The Board is in compliance

with the Code of Corporate Governance for Public Companies in Nigeria (“the Code”) release by the Securities &

Exchange Commission in 2011. The Board endeavours to ensure that the Company is in compliance with the

provisions of the Code or disclose our inability to comply.

The Board convened the minimum required number of meetings as recommended by the Code.

The Board of Directors

The Board comprises of eight Non-Executive Directors and one Executive Director. The Directors held five Board

meetings during the year under review. Details of the meetings held were as follows:

a) February 11, 2015

b) May 14, 2015

c) August 6, 2015

d) October 22, 2014

e) December 3, 2015

The record of attendance of members at the meetings is set out below:

Name No. of No. of

Meetings Held Meetings Attended

Dr. Elijah W. Akpan 5 2*

Mr. Sharm G. Kulkarni 5 5

Mr. Samson E. Aigbedo 5 1*

Mr. M. J. A. Gabriels 5 4

Mr. Samuel O. Onukwue 5 4

Mr. Thompson S. B. Owoka 5 5

Alhaji Shuaibu A. Ottan 5 5

Mr. Hendrik van Rooijen 5 5

Mrs. Helen A. Umanah 5 1*

*After he/she become a member of the Board

Board Committees:

i. Governance/Remuneration Committee: The Committee comprises of five Non-Executive Directors

the Governance/Remuneration Committee held three meetings in the year under review. Details of the

meetings held were as follows:

a) August 5, 2015;

b) October 22, 2014;

c) December 3, 2015

The record of attendance of members at the meeting is set out below:

Name No. of No. of



Mr. Samson E. Aigbedo 3 0*

Mr. Hendrik van Rooijen 3 3


Mr. Thompson S. B. Owoka 3 3

*After he become a member of the Committee.

16


Corporate Governance Report (cont’d)

ii. Risk Management Committee: The Committee comprises of four Non-Executive Directors and one

Executive Director.

The Risk Management Committee held three meetings in the year under review. Details of the meetings

were held as follows:

a) August 5, 2015;

b) October 22, 2014;

c) December 3, 2015

The record of attendance of members at the meeting is set out below:

Name No. of No. of



Mr. Sharm G. Kulkani 3 3

Mr. M. J. A. Gabriels 2 3


Mrs. Helen A. Umanah 0* 3

*After he/she become a member of the Committee

REGULATIONS FOR DEALING IN SHARES

Champion Breweries Plc has in place regulations to guide the Board and other employees when effecting

transactions involving the Company's shares. The Company's regulations for dealing in shares and other securities

provide amongst others, the periods when transactions are not allowed to be effected on the Company's shares

as well as disclosure requirements upon effecting such transactions. All concerned are obliged to observe the

provisions of the Regulations when dealing in the Company's shares.

INCORPORATION AND SHARE CAPITAL HISTORY

Champion Breweries was incorporated as a limited liability company on 31 July 1974 with a share capital of

N1,900,000 and was converted to a public limited liability company on 01 May 1992. The Company currently has

an authorised share capital of N4,500,000,000 comprising 9,000,000,000 ordinary shares of 50 kobo each, and an

issued share capital of N3,914,748,000 comprising 7,829,496 ordinary shares of 50 kobo each. The changes in the

share capital of Champion Breweries since inception are summarised below:

17


Corporate Governance Report (cont’d)

Year Authorised (N) Issued & Fully Paid-up (N) Consideration

Increase Cumulative Increase Cumulative

1974 0 1,900,000 1,900,000 1,900,000 Cash

1976 550,000 2,450,000 220,007 2,120,007 Cash

1977 0 2,450,000 269,993 2,390,000 Cash

1978 4,050,000 6,500,000 2,392,344 4,782,344 Cash

1979 0 6,500,000 1,476,150 6,258,494 Cash

1981 8,500,000 15,000,000 13,129,247 19,387,741 Cash

1983 11,000,000 26,000,000 0 19,387,741 Cash

2001 424,000,000 450,000,000 0 19,387,741 Cash

2003 1,550,000,000 2,000,000,000 430,612,259 450,000,000 Cash

2014 2,500,000,000 4,500,000,000 0 450,000,000 Cash

2015 - 4,500,000,000

OWNERSHIP STRUCTURE

As at 31 December 2015, the 7,829,496 ordinary shares of 50 kobo each in the issued share capital of Breweries

were beneficially held as follows:

S/N NAME HOLDING %

1 RAYSUN NIGERIA LIMITED 4,753,078 60.7

2 ASSET MANAGEMENT NOMINEE 961,863 12.3

3 AKWA IBOM STATE GOVERNMENT 782,968 10.0

4 OTHER SHAREHOLDERS 1,331,585 17.0

5. DISCLOSURE OF INTEREST

The interests of the Directors of Champion Breweries in the issued share capital of the Company as at 31, December

2015 were as follows:

Name Direct Indirect

Dr Elijah W. Akpan - -

Mr. Sharm G. Kulkarni 1,000 -

Mr. Samson E. Aigbedo - -

Mr. M. J. A. Gabriels - -

Mr. Sam O. Onukwue - -

Mr Thompson S. B. Owoka 500,000 -

Alhaji Shuaibu A. Ottan - -

Mr. Hendrik van Rooijen - -

Mrs. Helen A. Ukpanah 8,110 -

18


Statement of Directors’ Responsibilities

The Directors accept responsibility for the preparation of the financial statements set out on pages 21 to 46

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 of Nigeria 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 of Nigeria 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 that the Company will not remain a going concern in the year ahead.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

Hendrik van Rooijen (Director) Sharm Kulkarni (Managing Director)

FRC/2016/IODN/00000014023 FRC/2013/IODN/00000002629

11 February 2016 11 February 2016

In relation to the financial statements for the year ended 31 December 2015

19


Audit Committee’s ReportTo the members of Champion Breweries Plc for the year ended 31 December 2015

In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004, we, the members of the Audit Committee of Champion Breweries Plc, having carried out our statutory functions under the Act, hereby report that:

(a) The scope and planning of both the independent audit and internal audit for the year ended 31 December 2015 are satisfactory. The internal audit programmes reinforce the Company's Internal control system; � � � � � � � � (b)� Having reviewed the independent auditor's management letter on accounting procedures and internal controls, we are satisfied with management's responses thereon; � � � � � � � � (c)� The accounting and reporting policies for the year ended 31 December 2015 are in accordance with regulatory requirements and agreed ethical practices.

� � � � � � � ��The independent auditors confirmed, having received full cooperation from the Company's Management, that the scope of their work was not restricted in any way.

� � � � � � � � �

� � � � � � � � �Mr. Samuel O. Onukwue� � � � �

FRC/213/CISN/00000004129� � � � �

11 February 2016� � � � � � � � � � � � � �

Members of the Audit Committee� � � � � � � � � Mr. Godwin Anono� � -� Chairman/ShareholderMr. Thompson S.B. Owoka� -� Member/DirectorMr. Samuel O. Onukwue� -� Member/DirectorMr. Olayemi Olatunde� -� Member/Shareholder � � � � � � � � �

20Independent Auditor’s ReportTo the members of Champion Breweries Plc.

We have audited the accompanying financial

statements of Champion Breweries Plc (“the

Company”), which comprise the statement of financial

position as at 31 December 2015, statement of profit or

loss and other comprehensive income, statement of

changes in equity, statement of cash flows for the year

then ended, a summary of significant accounting

policies and other explanatory information, as set out

on pages 21 to 47.

Directors' Responsibility for the Financial Statements

The Directors are responsible for the preparation of

financial statements that give a true and fair view in

accordance with International Financial Reporting

Standards and in the manner required by the

Companies and Allied Matters Act of Nigeria and the

Financial Reporting Council of Nigeria Act, 2011, and

for such internal control as the Directors determine is

necessary to enable the preparation of financial

statement that are free from material misstatement,

whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these

financial statements based on our audit. We

conducted our audit in accordance with International

Standards on Auditing. Those standards require that

we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance

about whether the financial statement are free from

material misstatement.

An audit involves performing procedures to obtain

audit evidence about the amounts and disclosures in

the financial statements. The procedures selected

depend on the auditor's judgment, including the

assessments of the risks of material misstatement of

the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor

considers internal control relevant to the entity's

preparation and fair presentation of the financial

statements that give a true and fair view in order to

design audit procedure that are appropriate in the

circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the entity's internal

control. An audit also includes evaluating the

appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the

Directors, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our

audit opinion.

Opinion

In our opinion, these financial statements give a true

and fair view of the financial statement give a true and

fair view of the financial position of Champion

Breweries Plc (“the Company”) as at 31 December

2015, and of the Company's financial performance and

cash flows for the year then ended in accordance with

International Financial Reporting Standards and in the

manner required by the Companies and Allied Matters

Act of Nigeria and the Financial Reporting Council of

Nigeria Act, 2011.

Report on Other Legal and Regulatory Requirement

Compliance with the requirements of Schedule 6 of the

Companies and Allied Matters Act of Nigeria.

In our opinion, proper books of account have been

kept by the Company, so far as appears from our

examination of those books and the statement of

financial position and the statement of profit or loss

and other comprehensive income are in agreement

with the books of account.

Signed:

Goodluck C. Obi, FCA FRC/2012/ICAN/00000000442For: KPMG Professional Services Chartered Accountants26 February 2016Lagos Nigeria

Oladimeji I. Salaudeen Oluseyi T. BickerstethVictor U. Onyenkpa

Olanike I. James Oluwafemi O. Awotoye

Ayodele H. OthihiwaGoodluck C. Obi Muhammed M. AdamuOlumide O. OlayinkaOluwatoyin A. Gbagi

Ayodele A. SoyinkaIbitomi M. Adepoju Oladapo R. OkubadejoOlusegun A. SowandeTayo I. Ogungben

21


�Assets� � �Property, plant and equipment� 11 � � 6,844,330 6,917,604 �� Intangible assets� 12 � � 6,878 - �� Deferred tax assets� 9(d)� � 1,202,200 1,085,940 �� Non-current assets� � � 8,053,408 8,003,544 ��

� � � � �Inventories� 13 � � 354,286 350,133 �� Trade and other receivables� 14 � � 577,452 677,101 �� Prepayments� 15 � � 70,938 128,629 �� Cash and cash equivalents� 16 � � 536,297

1,169,753 �� Current assets� � � 1,538,973 2,325,616 �� Total assets� � � 9,592,381 10,329,160 ��

� � � � �Equity� � � � �Share capital� 18� � 3,600,000 3,914,748 �� Share premium� 19� � 8,251,946 9,093,779 �� Other reserves� 20� � 3,701,612 3,701,612 �� Accumulated loss� � � (9,683,127) (9,588,502)�� Total equity� � � 5,870,431 7,121,637 ��

� � � � �Liabilities� � � � �Employee benefits� 21(a)� � 143,021 133,525 ��

Non-current liabilities� � � 143,021 133,525 ��

� � � � �Deposit for shares� 17 � � 1,164,569 - � � Tax liabilities� 9(c)� � - 16,779 �� Trade and other payables� 22 � � 2,414,360 3,057,219 ��

� � � � �Current liabilities� � � 3,578,929 3,073,998 � Total liabilities� � � 3,721,950 3,207,523 �� Total equity and liabilities� � � 9,592,381 10,329,160 ��

� � � � �These financial statements were approved by the Board of Directors on 11 February 2016 and signed on itsbehalf by:

Hendrik van Rooijen (Director) FRC/2016/IODN/00000014023

� � � � � Sharm Kulkarni (Managing Director) FRC/2013/IODN/00000002629

� � �� Additionally certified by:� � � � �� Adesina Liasu (Finance Manager) FRC/2015/ICAN/000000013237

� � � � �The notes on pages 25 to 47 are integral parts of these financial statements.� �

� � � � �

2015 2014 N'000 N'000

Notes

Statement of Financial PositionAs at 31 December

22


� � � � � � � � � � �� Revenue � 5 3,302,383 3,501,845 � � �Cost of sales� 8(d) (2,662,451) � (2,502,147) � �Gross profit� 639,932 � 999,698 � �Other income� 6 104,130 � 52,271 � �Selling and distribution expenses� 8(d) (185,658) � (255,913) � �Administrative expenses� 8(d) (532,893) � (589,287) � �Operating profit� 25,511 � 206,769 � �� Finance income� 7(a) 200,351 � 41,674 � �Finance costs� 7(b) (1,287,645) - � � �Net finance income/(cost)� (1,087,294) � 41,674 � �� Profit/(loss) before minimum tax (1,061,783) � 248,443 � �� Minimum tax� (9,982) � (38,264) � �Profit/(loss) before tax� 8(a) (1,071,765) � 210,179 � �� Income tax� 9(a) 317,242 � (133,039) � �� Profit/(loss) for the year� (754,523) � 77,140 � �� Other comprehensive income� � � � Items that will never be reclassified to profit or loss� � � � Re-measurement of defined benefit liability 21(a) (50,432) � 24,979 � �Related tax 21(c) 11,010 � (7,494) � �Other comprehensive income, net of tax� (39,422) � 17,485 � �Total comprehensive income� (793,945) � 94,625 � �� Earnings/(loss) per share� � � � Basic and diluted earning/(loss) per share (kobo) 10 (24) � 1 � �� The notes on pages 25 to 47 are integral parts of these financial statements.� � � � � � � ��

Statement of Comprehensive IncomeFor the year ended 31 December

2015 2014 N'000

NotesN'000

23


Statement of Changes in EquityFor the year ended 31 December

� � � � � � � � �

Balance as at 1 January 2014� 450,000 �� 129,184 � � (8,889,182)� 3,701,612 � (4,608,386)

� � � � � � � � �Total comprehensive income� � � � � � � � �Loss for the year� - � � - � � (754,523)� � - � (754,523)

Other comprehensive income� - � � - � � (39,422)� � - � � (39,422)

Total comprehensive income � - � � - � � (793,945)� � - � (793,945)

� � � � � � � � �Transactions with owners of the Company � � � � � � � �Contributions by owners� � � � � � � � �Issuance of ordinary shares (Notes 18 and 19) 3,150,000 8,122,762 � - � � - 11,272,762

Total contribution� 3,150,000 �� 8,122,762 � � - � � - 11,272,762

� � � � � � � � �Balance at 31 December 2014� 3,600,000 �� 8,251,946 � � (9,683,127)� 3,701,612 � 5,870,431

� � � � � � � � �� Balance at 1 January 2015� 3,600,000 �� 8,251,946 � � (9,683,127)� 3,701,612 � 5,870,431

� � � � � � � � �Total comprehensive income for the year� � � � � � � �Profit for the year� - � � - � � 77,140 � � - � � 77,140

Other comprehensive income� - � � - � � 17,485 � � - � � 17,485

Total comprehensive income � - � � - � � 94,625 � � - � � 94,625

� � � � � � � � �Transactions with owners of the Company � � � � � � � �

Contributions by owners� � � � � � � � �Issuance of ordinary shares (Notes 18 and 19) 314,748 � 841,833 � � - � � - 1,156,581

Total contribution� 314,748 �� 841,833 � � - � � - 1,156,581

� � � � � � � � �Balance at 31 December 2015� 3,914,748 �� 9,093,779 � � (9,588,502)� 3,701,612 7,121,637

� � � � � � � � �The notes on pages 25 to 47 are integral parts of these financial statements.� � � �

��Accumulated

loss

N'000� � ��

Share

capital

N'000

Share

premium

N'000

Other

reserves

N'000 ��

Total

equity

N'000

24


� � � � � ��Cash flows from operating activities� � � � � �Profit/(loss) for the year� � � (754,523)� 77,140 � �

Adjustments for:� � � � � �Finance income� 7(a) � � (200,351)� (41,674)� �

Finance cost� 7(b) � � 1,287,645 � - ��

Taxation� 9(a) � � (317,242)� 133,039 � �

Depreciation charge 11 � � 848,485 � 622,428 � �

Amortisation charge 12 � � 4,863 � 6,878 � �

Write-off of property, plant and equipment 11 � � 24,797 � - � �

(Gain)/loss on sale of property, plant and equipment� � � (489)� (300)� �

Impairment of inventories 13 � � 58,349 � 51,396 � �

� � � 951,534 � 848,907 � �

Changes in:� � � � � �Inventories � � � (107,004)� (47,243)� �

Trade and other receivables � � � (46,011)� (99,649)� �

Prepayments � � � (14,741)� (57,691)� �

Trade and other payables* � � 225,389 � 703,996 � �

Employee benefit� � � 29,762 � 9,496 � �

Cash generated from operating activities� � � 1,038,929 � 1,348,320 � �

� � � � � �Value added tax paid� � � (30,811)� (61,137)� �

Net cash generated from operating activities� � � 1,008,118 � 1,287,183 � �

� � � � � �Cash flows from investing activities� � � � � �Interest received� 7(a) � � 200,351 � 41,674 � �

Proceeds from sale of property, plant and equipment � � � 533 � 300 � �

Acquisition of property, plant and equipment 11 � � (478,043)� (695,701)� �

Net cash utilised in investing activities� � � (277,159)� (653,727)� �

� � � � � �Cash flows from financing activities� � � � � �Net proceeds from issuance of ordinary shares 18(c) � � 11,272,762 � - ��

Repayment of amounts due to related party 18(c) � � (11,586,569)� - ��

Net cash generated from financing activities� � � (313,807)� - �

� � � � � �Net increase in cash and cash equivalents� � � 417,152 � 633,456 � �

Cash and cash equivalents at 1 January � � � 119,145 � 536,297 � �

Cash and cash equivalents at 31 December� � � 536,297 � 1,169,753 � �

� � � � � �

The notes on pages 25 to 47 are integral parts of these financial statements.

� � � � � �* Value added tax paid as shown above has been adjusted from "changes in trade and other payables" on the

statement of cash flows.

2015 2014 N'000 N'000

Statement of Cash FlowsFor the year ended 31 December

Financial Statements

Notes to the

Reporting entity 26

Basis of accounting 26

Significant accounting policies 27

New standards and interpretations not yet adopted 32

Revenue 33

Other income 33

Finance income and finance cost 33

Profit/(loss) before tax 33

Taxation 35

Basic and diluted earnings/(loss) per share 36

Property, plant and equipment 37

Intangible assets 38

Inventories 38

Trade and other receivables 38

Prepayment 39

Cash and cash equivalents 39

Deposit for shares 39

Share capital 39

Share premium 40

Other reserves � � 40

Employee benefits � � 40

Trade and other payables � � 43

Related parties � � 43

Financial instruments- financial � risk management and fair values 44

Contingencies � � 47

Segment reporting � � 47

Subsequent events � � 47

25


26


Notes to the Financial Statements (cont’d)

1� Reporting entity� Champion Breweries Plc ('the Company') is

domiciled in Nigeria. The Company was incorporated in Nigeria as a limited liability company on 31 July 1974 and later converted to a public limited liability Company on 1 September 1992. The address of the Company's registered office is Industrial Layout, Aka Uffot, Uyo, Akwa Ibom State, Nigeria.

The Company is involved in the brewing and marketing of Champion Lager Beer and Champ Malta. The Company also provides contract brewing and packaging services to Nigerian Breweries Plc, a related party within the Heineken group.

� � �2� Basis of accounting� The financial statements have been prepared in

accordance with International Financial Reporting Standards (IFRS). These financial statements were authorised for issue by the Board of Directors on 11 February 2015. �

� (a) Functional and presentation currency�

� These financial statements are presented in Naira (N), which is the Company's functional currency. All financial information presented in Naira has been rounded to the nearest thousand, except when otherwise indicated.

�� (b) Use of estimates and

judgments�� In preparation of these financial statements,

management has made judgments, estimates and assumptions that affect the application of the Company's accounting policy and the reported amounts of assets, liabilities, income and expenses. Actual result may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing bases. Revisions to estimates are recognised prospectively.

� JudgmentThere were no significant judgment made by management in applying accounting policies that could have had a material effect on the amount and disclosures in financial statement.

� Assumptions and estimation uncertainties.Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 December 2015 is included in the following note:

Note 21- Measurement of defined benefit obligations: key actuarial assumptions.�

� � �� (c) Measurement of fair values � A number of the Company's accounting policies

and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Significant valuation issues are reported to the Audit Committee.

�� When measuring the fair value of an asset or a

liability, the Company uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

� - Level 1: quoted prices (unadjusted) in active

markets for identical assets or liabilities.

� - Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

�� - Level 3: inputs for the asset or liability that are

not based on observable market data (unobservable inputs).

� �� If the inputs used to measure the fair value of an

asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

�� The Company recognises transfers between

levels of the fair value hierarchy at the end of the reporting period during which the charge has occurred. Further information about the assumptions made in measuring fair value is included in Note 26 - Financial instruments- financial risk management and fair values.

(d) Basis of measurement� ��The financial statements have been prepared on the historical cost basis except for the following items which have been measured on an alternative basis:

Items Measurement bases

Non-derivative Initially measured at fair value financial instruments� and subsequently measured at amortised cost.

Employee benefits Present value of defined benefit obligation.

27



3. Significant accounting policies�The significant accounting policies set out below have been applied consistently to all periods presented in these financial statements, unless otherwise indicated.

(a) Foreign currency transactions Transactions in foreign currencies are translated to naira at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the naira at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on translation are recognised in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.

�(b) Financial instruments (i) Non-derivative financial assets

The Company's non-derivative financial assets include trade and other receivables and cash and cash equivalents. The Company initially recognises trade and other receivables on the date that they are originated. All other financial assets are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

�The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability.

Trade and other receivablesTrade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, trade and other receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Cash and cash equivalentsCash and cash equivalents comprise cash

balances and call deposits with original maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Company in the management of its short-term commitments.

(ii) Non-derivative financial liabilitiesAll financial liabilities are recognised initially on trade date at which the Company becomes a party to the contractual provisions of the instrument. The Company classifies non-derivative financial liabilities into the other financial liabilities category. The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

The Company's non-derivative financial liabilities comprise of trade and other payables and deposit for shares. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using the effective interest method.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Share capital and share premiumOrdinary shares are classified as equity. When new shares are issued, they are recorded in share capital at their par value. The excess of the issue price over the par value is recorded in the share premium reserve. All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

Property, plant and equipment(I) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. If significant part of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plan and equipment.

28


Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

(ii) Subsequent expenditureSubsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) DepreciationDepreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values on a straight-line basis over their estimated useful lives and is generally recognised in profit or loss. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land and capital work in progress are not depreciated.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

The estimated useful lives of property plant and equipment for current and comparative periods are as shown below:

Leasehold land� Lease period

Buildings� � 15 to 40 years

Plant & machinery� 5 to 30 years

Furniture and fittings:� 3 to 5 years

Motor vehicles:� �

- Cars and trucks� 5 years

- Forklifts� � 5 years

Returnable packaging materials�:�

- Bottles� � 5 years

- Crates� � 8 years

(e) Intangible assets Intangible assets represents computer software with useful live of 3 years and are measured at cost less accumulated amortisation and any accumulated impairment loss.

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using straight line method over their estimated useful lives, and is generally recognised in profit or loss. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

(f) InventoriesInventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the following: - Raw material, spare parts and non returnable packaging materials- weighted average cost.- Manufactured finished products and products-in-process - weighted average cost of direct materials, labour costs and a proportion of production overheads based on normal operating capacity.

Allowance is made for obsolete, slow-moving or defective items where appropriate.

(g) Impairment(i) Non-derivative financial assetsA financial asset not classified as at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired includes default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor will enter bankruptcy, adverse changes in the payment status of debtors or economic conditions that correlate with defaults.

Financial assets measured at amortised costThe Company considers evidence of impairment for financial assets measured at amortised cost (trade and other receivables) at both a specific asset and collective level. All individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.

In assessing collective impairment, the Company uses historical trends of the probability of


29



default, the timing of recoveries and the amount of loss incurred, adjusted for management's judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate.

Impairment losses are recognised in profit or loss and reflected in an allowance account against trade and other receivables. Interest on the impaired asset continues to be recognised. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

(ii) � Non-financial assets� � �� The carrying amounts of the Company's non-

financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. Indefinite-lived intangible assets are tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (CGU) exceeds its recoverable amount.

� Impairment losses are recognised in profit or

loss. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amounts of the assets in the CGU (group of CGUs) on a pro rata basis.

(h) � Employee benefits� � �� (i) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(ii) Defined contribution plansIn line with the provisions of the Pension Reform Act 2014, the Company has instituted a defined contribution pension scheme for its permanent staff. Staff contributions to the scheme are funded through payroll deductions while the

Company's contribution is recognised in profit or loss as employee benefit expense in the periods during which services are rendered by employees. Under this scheme, employees contribute 8% of their basic salary, transport and housing allowances to a fund on a monthly basis. The Company's contribution is 10% of each employee's basic salary, transport and housing allowances to the fund.

� � � � � �� Obligations for contributions to defined

contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees.

� � � � � �� (iii) Defined benefit plans

The Company's net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually using the projected unit credit method by Alaxender Forbes Consulting Actuaries Nigeria Limited (FRC/2012/0000000000504). When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income. The Company determines the net interest expense (income) on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or

when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or

30


loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iv) Other long-term employee benefitsThe Company's net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise.(v) Termination Benefit

Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

(i) Provisions and contingent liabilitiesProvisionsProvisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

Contingent liabilities Contingent liabilities are only disclosed and not recognised as liabilities in the statement of financial position. If the likelihood of an outflow of resources is remote, the possible obligations is neither a provision nor a contingent liability and no disclosure is made.

(j) RevenueRevenue from the sale of goods and rendering of services is measured at the fair value of the consideration received or receivable, net of value added tax, returns, trade discounts and volume rebates. Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

(k) Finance income and finance costsFinance income comprises interest income on bank deposits.

Finance costs comprise interest expense on borrowings, bank overdrafts and impairment losses recognised on financial assets (other than trade receivables). Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position. Interest income or expense is recognised using the effective interest method.

(l) Income taxIncome tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to a business combination, or items recognised directly in equity or in other comprehensive income.

(i) Current taxCurrent tax comprises the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax assets and liabilities are offsets only if certain criteria are met.

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised for unutilised tax losses, unutilised tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on business plans. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be utilised.


Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. For this purpose, the carrying amount of investment property measured at fair value is presumed to be recovered through sale, and the Company has not rebutted this presumption.

Deferred tax assets and liabilities are offset only if certain criteria are met.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:

i. the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss,

ii. differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future, and

iii. temporary differences arising on the initial recognition of goodwill.

In determining the amount of current and deferred tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

(iii) Minimum tax Minimum tax payable is calculated using the tax

rate applicable based on certain parameters stipulated in the Nigerian tax law. Any amount by which this minimum amount payable exceeds company income tax is shown as minimum tax expenses and presented separately in the statement of comprehensive income.

(m) Earnings per shareThe Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

(n) Segment reportingAn operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company's other components. All operating segments' operating results are reviewed regularly by the Company's Managing Director to make decision about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Company's Managing Director include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, office expenses as well as income and deferred tax assets and liabilities.

(o) LeasesDetermining whether an arrangement contains a leaseAt inception of an arrangement, the Company determines whether the arrangement is or contains a lease.

At inception or on reassessment of an arrangement that contains a lease, the Company separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Company concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset; subsequently, the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Company's incremental borrowing rate.

31



(i) Leased assetsAssets held by the Company under leases which transfer to the Company substantially all of the risks and rewards of ownership are classified as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Assets held under other leases are classified as operating leases and are not recognised in the Company's statement of financial position.

(ii) Lease paymentsPayments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(p) Statement of cash flowsThe statement of cash flows is prepared using the indirect method. Changes in statement of financial position items that have not resulted in cash flows such as translation differences, fair value changes and other non-cash items have been eliminated for the purpose of preparing the statement. Interest paid is included in financing activities.

4. New standards and interpretations not yet adoptedA number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2015; however, the Company has not applied the following new or amended applicable standards in preparing these financial statements:

IAS 1 Disclosure Initiative- (effective for periods beginning 1 January 2016 and early adoption is permitted). The amendments provide additional guidance on the application of materiality and aggregation when preparing financial statements.

IFRS 9- Financial Instruments (effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted.). IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement.

IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and depreciation of

financial instruments from IAS 39.IFRS 15 Revenue from Contracts with Customers- (effective for periods beginning 1 January 2017 and early adoption is permitted). IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes.The extent of the impact of these standards has not been determined and the Company does not plan to adopt these standards early.

��

32



5� Revenue� � � � � ��

� Sale of goods� � � � � 786,1011,228,834�� Contract brewing and packaging� � � � � 2,516,2822,273,011�� 3,302,3833,501,845��6� Other income� � � � � �� Other income represents amount earned from the sale of scraps, by-products, sales commissions and insurance claims.� � � � � � � �7� Finance income and finance cost� � � �� (a)� Finance income represents interest on short term bank deposits. Finance income in 2014 represents income earned from placement of proceeds of issued ordinary shares in interest-bearing bank account.� �� (b)� Finance cost in 2014 represents interest charged on N11.6 billion due to The Raysun Nigeria Limited (parent company) which was fully repaid in 2014.� � � � � � � �8� Profit/(loss) before tax� � � � � �� (a)� Profit/(loss) before tax is stated after charging/ (crediting) the following amounts which are analysed by nature:� � � � � �

� � Depreciation of property, plant and equipment (Note 11)� � 622,428� � 848,485� � Amortisation of intangible asset� � 6,878� � 4,863 � � Personnel expenses (Note (8b))� � 794,984� � 672,253� � Auditor's remuneration� � � � 9,504 � � 8,800 Management fees 69,649 63,312 Technical service fees - 42,182� � Directors' remuneration (Note 8(c))� � 14,005 � � 10,838� � Gain on sale of property, plant and equipment� � (300)� � (489)� � � � � � � �� (b)� Personnel expenses� � � � � �� (i)� Personnel expenses comprise of:� � � ��

� � Salaries and wages� � � � 490,250 460,558 � �� Pension� � � � 15,970 15,553 � �� Defined benefit obligation charge (Note 21(a)(i))� � 12,235 32,909 � �� Long service awards charge (Note 21(a)(ii))� � 36,257 (2,787)� �� Other personnel related expenses� � 117,541 288,751 � �� 672,253 794,984� �� (ii) � The number of full time employees as at 31 December was as follows:�� 2014 2015� �� Number Number� �� Production� � � � 116 106� �� Logistics� � � � 18 18� �� Sales and Marketing� � � � 21 20� �� Administration� � � � 29 27� �� 184 171� ��

2015 2014 N'000 N'000

2015 2014 N'000 N'000

2015 2014 N'000 N'000

33



(iii) � � Employees of the Company, other than directors, whose duties were wholly or mainly discharged in Nigeria, received remuneration (excluding pension contributions) in the following ranges:� � � � � � � �� 2014 2015�� Number Number�� N 400,001 – N 600,000� � � 2� - � � N 600,001 – N 800,000� � 3� - �� N 800,001 – N 1,000,000� � 6� 18�� N 1,000,001 – N 1,200,000� � 22� 25�� N 1,200,001 – N 1,400,000� � 48� 65�� N 1,400,001 – N 1,600,000� � 37� 14�� N 1,600,001 – N 1,800,000� � 26� 7�� N 1,800,001 – N 2,000,000� � 13� 8�� N 2,000,001 – N 2,500,000� � 15� 16�� N 2,500,001 – N 3,000,000� � 1� 5�� N 3,000,001 – N 3,500,000� � 4� 3�� N 3,500,001 – N 4,000,000� � 3� 1�� N 4,000,001 – N 4,500,000� � 2� 1�� N 4,500,001 – N 5,000,000� � 1� 1�� N 5,000,000 – and above� � 1� 7�� 184� 171 �� (c) � Directors remuneration� � � � � �� Directors' remuneration was as follows:

� � � � � �

� � Directors' fees� � � � 360� 725�� Other remuneration� � � � 10,478 13,280�� 10,838 14,005�� Further analysed as follows;� � ��

� � Remuneration of non-executive directors� � 360� 725�� Remuneration of executive directors� � 10,478 13,280�� 10,838 14,005�� The directors' remuneration shown above includes amount paid to:

� � � � � �� Chairman� � � � 60� 200 �� Highest paid director� � � � 10,478 13,280 �� Other directors received emoluments (excluding pension contributions) within the following ranges: � � � � � � 2014� 2015�� Number Number �� N100,000 and below � � � � 7� 4 �� N100,001 - N200,000� � � � - � 1 �� 7 � 5 �

2015 2014 N'000 N'000

2015 2014 N'000 N'000

N'000 N'000

34



35



� � � � � �� (d) � Analysis of expenses by nature�� Raw materials and consumables 310,877 367,753 Advertising and promotion 66,469 131,412 Depreciation of property, plant and equipment 848,485 622,428 Amortisation of intangible asset 4,863 6,878 Personnel costs (Note 8(b)) 672,253 794,984 Utilities 747,949 608,968 Repairs and maintenance 393,256 473,988 Management fee 63,312 69,649 Technical service fee 42,182 - Lease rental expenses 5,000 10,000 Audit fee 8,800 9,504 Professional services costs 13,046 14,373 Impairment loss reversal (2,882) (27,567) IT infrastructure 38,216 57,522 Transportation and accommodation expenses 4,527 32,487 Excise duties 47,124 85,359 Staff training costs 10,946 21,365 Security services costs 25,173 27,178 Others 81,406 41,066 Total cost of sales, marketing, distribution and administrative expenses 3,381,002 � 3,347,347 � � � � � � �

These expenses are further analysed as follows:� �

� Cost of sales� � 2,662,451 �� 2,502,147 �� Selling and distribution expenses� � 185,658 �� 255,913 �� Administrative expenses� � 532,893 �� 589,287 �� 3,381,002 �� 3,347,347 �� 9.� Taxation� � � � � �(a)� Tax charge for the year has been computed after adjusting for certain items of expenditure and income, which are not deductible or chargeable for tax purposes, and comprises:�� Current tax:� � �� Income tax � � - � - �� Tertiary education tax� � � - � 16,779 �� - � 16,779 �� Deferred tax expenses� � � � �� Origination and reversal of temporary differences� � � 317,242 � 116,260 �� 317,242 � 133,039 �

2015 2014 N'000 N'000

2015 2014 N'000 N'000

2015 2014 N'000 N'000

�

� � Assets Liabilities Net

� Recognised deferred � 31-Dec-14� 31-Dec-14 31-Dec-14 3 1 - D e c -15 31-Dec-15 31-Dec-15

� tax assets and liabilities� � �� Property, plant and equipme�nt� - � � � (30,097) (30,097) 104,435 - 104,435

� Employee benefits� � 25,894 � � � � - 25,894 40,926 - 40,926

� Trade and other receivables�� 43,835 � � � � - 43,835 43,835 - 43,835

� Unutilised tax losses� � 1,162,568 � � � � - 1,162,568 896,744 - 896,744

� Net� 1,232,297 (30,097) 1,202,200 1,085,940 - 1,085,940

� � � � � � � � � � � � � Movement in temporary � � � � � � � � �

differences during the year:� � 31 December 2014

Recognised in profit and loss 200,583 (3,964) (4,729) 125,352 317,242

Recognised in other comprehensive income - 11,010 - - 11,010

31 December 2015

Recognised in profit and loss (134,532) (15,032) - 265,824 116,260

Recognised in other comprehensive income - (7,494) - - (7,494)

� ��

(b)� Reconciliation of effective tax rate� � � � � � � � � � � � � � � 2014 2015� � � %� %� �N'000N'000�

� Profit/(loss) before tax (1,071,765) 210,179

Tax using domestic tax rate 30.0 30 (321,530) 63,054

Effect of tertiary education tax 8.0 - - 16,779

Tax effect of tax incentives (6.0) 3 (27,301) (12,663)

Tax effect of non-deductable expenses 1.6 - 552 3,420

Change in recognised deductible temporary

differences 37.8 - - 79,520

Others (8.1) (3) 31,037 (17,071)

Total deferred tax 63 30 (317,242) 133,039

(c) Movement in current tax liability

Balance beginning of the year - -

Charge for the year - 16,779

Payment during the year - -

Balance end of the year - 16,779

� � � � � � � � � �� (d)� Deferred tax assets and liabilities� � � � � � � � � � � � � � � � � � � � � �

10� Basic and diluted earnings/(loss) per share� � � � � � �� The calculation of basic and diluted earnings per share for the year ended 31 December 2015 was based on the profit for the year of N77.3 million (2014: loss of N754.5 million), attributable to ordinary shareholders and weighted average number of ordinary shares outstanding of 3,736,485,180 (2014: 3,116,565,667) calculated as follows:� � � � � � � ��

Property, plant and

equipment�

Trade and other

receivables

Unutilised tax

losses

N'000� N'000� N'000� N'000� N'000�

NetEmployee benefits

N'000� N'000� N'000� N'000� N'000�N'000�

36



(a)� The Company holds land under a finance lease arrangement. The maximum tenor of the lease arrangements is 99 years in line with the Land Use Act. The lease amounts were fully paid at the inception of the lease arrangements. (b)� The Company had no authorised or contractual capital commitments as at the reporting date (2014: Nil).(c)� No borrowing costs were capitalised during the year (2014:Nil)��

� 2014 2015�� Profit/(loss) for the year� � (NGN 754,523,000) NGN 77,139,700

� � � � � �� Weighted average number of ordinary shares� � � � �� Issued ordinary shares at January 1� � 900,000,000 3,116,565,667 � Effect of rights issue during the year� � 2,216,565,667 - � Effect of private placement during the year� � � - 4,595,654,744�� Weighted average number of ordinary shares at 31 December 3,116,565,6677,712,220,410

� � � � � � �� Basic and diluted earnings/(loss) per share (kobo)� � � (24) 1�� There were no potential dilutive ordinary shares during the year.

� � � � � � ��

11 �Property, plant and equipment

� � � � � � � � � � � � �� Cost � � �� Balance at I January 2014� 4,016,004 4,584,435 209,399 288,830 61,235 246,019 9,405,922� Additions � - � �326,043� � 8,156� - 21,278 122,566 478,043� Reclassification� (372,876)� �612,087� � 157� - 239,368 - � Write-offs� (14,695)� ��(10,102)� � - � � - - (24,797)� Disposals� - � � - � � - (9,125)� - - (9,125)� Balance as at 31 December 2014 3,628,433 5,512,463 217,712 279,705 82,513 129,217 9,850,043� � � �� Balance at I January 2015� 3,628,433 5,512,463 217,712 279,705 82,513 129,217 9,850,043� Additions � 78,608 � 292,893� 28,008 43,914 173,958 78,319 695,701� Reclassification� � � - � �� Transfers� � �129,216 (129,216) - � Disposals� � �� (2,234)� � (2,234)� Balance as at 31 December 2015 3,707,041 5,934,572 245,720 321,386 256,471 78,32 10,543,510� � � �� Accumulated Depreciation� � �� Balance at I January 2014� 434,682 1,436,807� 59,163 205,316 30,341 2,166,309� Depreciation charge� 154,116� �609,091� 37,627 32,812 14,839 - 848,485� Disposals� - � � - � � - (9,081)� - - (9,081)� Balance as at 31 December 2014� 588,798 2,045,898 96,790 229,047 45,180 - 3,005,713� � � �� Balance at I January 2015� 588,798 2,045,898� 96,790 229,047 45,180� 3,005,713� Depreciation charge� 145,562� 356,898� 65,151 31,082 23,735� - 622,428� Disposals� - � � - � � - (2,234) - - (2,234)� Balance as at 31 December 2015� 734,360 2,402,796 161,941 257,895 68,915 - 3,625,906� � � �� Carrying amounts� � �� At 31 December 2014 3,039,635 3,466,565 120,922 50,658 37,334 129,217 6,844,330� At 31 December 2015 2,972,681 3,531,776 83,779 63,491 187,555 78,321 6,917,604� � � ��

Furniture and

FittingsMotor

vehicles��

Returnable Packaging Materials��

C� apital Work in

Progress��Land &

Buildings ��Plant and

Machinery��N'000��

Total��N'000�� N'000�� N'000�� N'000�� N'000�� N'000��

37



12� Intangible assets�� Intangible assets represents computer software. The movement on this account during the year was as

follows:

� � � � � � � � � � � � � �� 2014��2015� Cost �� N'000��N'000� Balance, beginning of the year� � � � � � � � 11,741 11,741 � Additions� � � � � � � - - � Balance, end of the year� � � � � � � � � �� 11,741��11,741

� Amortisation� � � � � � � � �� Balance, beginning of the year� � � � � � 2,851 4,863

� Amortisation charge� � � � � � � � � �� 2,012 ��6,878

� Disposal� � � � � � � � - -

� Balance, end of the year� � � � � � 4,863� 11,741

� Carrying amount�� At 31 December 2014� � � � � � � � � �� 8,890 ��6,878

� At 31 December 2015� � � � � � � 6,878 -

�� The amortisation charge of intangible assets is included in administrative expenses.�� 13� Inventories� � � � � � � � �� 2014��2015� � � � � � � � � � � � � � � ��N'000��N'000� Raw materials� � � � � � � � � � �� 10,700��47,445

� Finished products� � � � � � � � � � �� 296��3,406

� Work-in-progress� � � � � � � � � � �� 36,671��40,684

� Packaging materials� � � � � � � � � �� 10,901��13,003

� Engineering spares � � � � � � � � � �� 227,353��233,644

� Other consumables� � � � � � � � � �� 68,365��11,951

� � � � � � � � � � � � � �� 354,286��350,133

� The value of raw materials, non-returnable packaging materials, spare parts, changes in finished products and

work-in-progress recognised in cost of sales during the year amounted to N771 million (2014: N739 million).

During the year, impairment of inventory amounted to N51.4 million (2014 N58.3 million). This amount has

been adjusted in the 'changes in inventories' on the statement of cash flows.�

14� Trade and other receivables�� 2014��2015 � � � � � � � � � � � � � � � ��N'000��N'000

Trade receivables� � � � � � � � � � �� 46,428��87,363

� Other receivables� � � � � � � � � �� 197,005��177,735

� Amounts due from related parties (Note(23 (a))� � � � �� 334,019��412,003

� � � � � � � � � � � � � �� 577,452��677,101

� The Company's exposure to credit risks and impairment losses related to trade and other receivables is

disclosed in Note 24.�

38



39



15� Prepayments� � � �� Prepayments represent advance payment for the supply of spares and other consumables.� ��16� Cash and cash equivalent� � � �� 2014��2015� � � � � ��N'000�N'000

� Cash and cash equivalent� 536,297 345,594

� Short term deposit� - 824,159

� � �� 536,297 �� 1,169,753

17� Deposit for shares� � � �� The movement on these account was as follows:� � � �� 2014��2015

� � � �� N'000�� N'000

� Balance as at 1 January� 1,164,569 1,164,569

� Effect of ordinary share issuance during the year:� � - -

� -� par value of issued ordinary shares (Note 18 (a))� - (314,748)

� -� excess of issue price over par value (Note 19)� � - (849,821)

� Balance as at 31 December� 1,164,569 - � Further information relating to conversion of deposit of shares to ordinary share capital are disclosed in Notes 18 and 19 to the financial statement.�

18� Share capital� � � �� 2014��2015�� N'000��N'000

(a)� Authorised share capital� � � � ` (9,000,000,000 ordinary shares of 50k each (2014: 9,000,000,000

ordinary shares of 50k each)� �� 4,500,000��4,500,000

Allotted, called-up and fully paid� � � � The movement in share capital during the year was as follows:� � � � Number of ordinary shares of 50k each � � � �� 2014��2015

� � �� N'000��N'000

� At 1 January � �� 900,000��7,200,000

� Additional shares issued� �� 6,300,000��629,496

� At 31 December� �� 7,200,000��7,829,496

� � � � � �� 2014��2015

Ordinary shares of 50k each� � � ��N'000N'000

Balance as at 1 January� 450,000 3,600,000

Effect of private placement of ordinary shares (Note18(b))� - 314,748

� Effect of right issue of ordinary shares (Note18(c))� 3,150,000 -

� Balance as at 31 December �� 3,600,000�� 3,914,748

(b)� Conversion of deposit for shares to ordinary share capital � � � � During the year, the Board of Directors approved the conversion of deposits made for shares by The Raysun Nigeria

Limited amounting to N1.1 billion and Akwa Ibom State Government amounting to N52.9 million to share capital

through private placement of ordinary shares. The Company obtained regulatory approval in March 2015 for this

transaction and a total of 629,496,464 units of ordinary shares of 50 kobo each at N1.85 were issued to these

shareholders. � � � � � � �

(c)� Rights issue of ordinary shares.� � � �In 2014, the Company issued 6,300,000,000 units of ordinary shares of 50k each at N1.85 to its existing

shareholders through rights issue and this resulted in increase of ordinary share capital by N3.2 billion. The total

proceed from the rights issue of ordinary shares amounted to N11, 600,000,000 and the excess of issued price

over par value amounting to N8.1 billion was recognised in share premium (Note 20).� The proceeds from the rights issue was used to repay amount of N11.6 billion due to The Raysun Nigeria Limited

(the parent company) in 2014.

19� Share premium

� The movement in share premium reserve was as follows:� �� 2014��2015

� ��N'000 N'000

� Balance as at 1 January� �� 129,184��8,251,946

� Effect of right issue of ordinary shares (Note18(c))� �� 8,122,762��- � Effect of private placement of ordinary shares (Note17)� - 849,821

� Effect of share issue costs� �� (7,988)

Balance as at 31 December � �� 8,251,946��9,093,779

20� Other reserves � � � �� Other reserve represents difference between the carrying amounts and fair values of certain items of property, plant and equipment as at transition date (1 January 2011). This was created as part of the Company's election to apply optional exemptions of deemed cost on transition to IFRS.

21� Employee benefits

(a)� Long term employee benefit �� 2014��2015 � ��N'000 N'000

� - Defined benefit obligation (Note 21(a)(i)) 95,098 89,153 � - Long service award (Note 21(a)(ii))� �� 47,923��44,372

143,021 133,525 � (i)� Movement in the present value of the defined benefit obligation� � � �� 2014��2015 � ��N'000 N'000

Liability as at 1 January� 40,245 95,098

� � Included in profit or loss� � � �� Current service cost� � 5,306 12,065

� � Past service cost� � - 15,810

� � Interest cost� � 6,929 5,034

12,235 32,909

� � Included in other comprehensive income� � � �� Remeasurment loss/(gain)� � � �� Actuarial (gain)/loss arising from changes in:� � � �� - Economic assumptions� � � ��42,473 ��(32,227)� � - Statistical data� � 313 ��833 � � - Salary increase� �� 7,189 ��(4,694)

� � - Financial assumptions� �� 1,083 ��11,108 � � � �� 50,432 (24,979) � � Other� � � �� Benefits paid by the plan� (7,814) (13,875)

� � Liability as at 31 December� 95,098 89,153 �

40



(ii) Movement in the present value of long service awards � � � �� 2014��2015

� ��N'000 N'000

Liability as at 1 January 22,582 47,923 Included in profit or loss Current service cost 2,558 5,855 Interest cost 2,559 6,941 Remeasurment loss/(gain) Actuarial (gain)/loss arising from: - Change in economic assumptions 23,532 (13,965) - Financial assumptions 4,694 (233) - Salary increase 857 (156) - Demographic assumptions 2,057 (1,229) 36,257 (2,787)

Other

Payments (10,916) (764)

Liability as at 31 December 47,923 44,372 (b) The expense is recognised in the following line items in the statement of comprehensive income:

Cost of sales Administrative Total expenses 2014 2014 2014 2015 2015 2015 N'000 N'000 N'000 N'000 N'000 N'000

Defined benefit obligation 9,788 2,447 12,235 26,327 6,582 32,909

Long service awards 29,006 7,251 36,257 (2,230) (557) (2,787)

Pension 12,776 3,194 15,970 12,442 3,111 15,553

51,570 12,892 64,462 36,540 9,135 45,675

(c) Actuarial (gain)/losses recognised in other comprehensive income are analysed as follows: � � � ��

� � � � � ��2014 2015 �� Before tax Tax After tax Before tax Tax After tax N'000 N'000 N'000 N'000 N'000 N'000

Defined benefit obligation 50,432 (11,010) 39,422 (24,979) 7,494 (17,485)

Actuarial loss/(gain) 50,432 (11,010) 3 9,422 (24,979) 7,494 (17,485)

Actuarial assumptions Principal financial actuarial assumptions at the reporting date (expressed as weighted averages):

� � � �� 2014��2015

��N'000 N'000

Average discount rate (p.a.) 13% 11%

Average pay increase (p.a.) 20% 13%

Average rate of inflation (p.a.) 8% 9%

These assumptions depicts managements estimate of the likely future experience of the Company.

Due to unavailability of published reliable demographic data in Nigeria, the demographic assumptions regarding future

mortality are based on the rates on A1949/52 tables published jointly by the Institute and Faculty of Actuaries in the UK.

41



42



� It is assumed that all employees covered by the defined end of service benefit scheme would retire as

follows:

- Junior staff 55 years

- Senior staff 60 years

(d)� Sensitivity analysis� � � � � � �� Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions holding other

assumptions constant would have affected the defined benefit obligation by the amounts shown below.

benefit Long service obligation award N'000 N'000

� Discount rate� � +1%� � � 8,054 � � 2,854

� � � � -1%� � (9,275)� � 3,194)

� Salary increase � � � +1%� � ��(5,737)� � (2,269)

� � � � -1%� � 5,191 � � 2,051

� Mortality rate� � +1%� � � 40 � � 174

� � � � -1%� � � (40)� � (156)

� Sensitivity to each actuarial assumption was determined while other assumptions were held constant. There

has not been a change from the sensitivity approach adopted in prior years. Although the analysis does not

take account of the full distribution of cash flows expected under the plan, it does provide an approximation of

the sensitivity of the assumptions shown.

(e)� Short term employee benefits

� The balance on the pension payable account represents the amount due to the Pension Fund Administrators which is yet to be remitted at the year end. The movement on this account during the year was as follows:

� � � � � � � ��2014 2015� � � � � �� N'000 N'000

� Obligation as at 1 January � � � � � � 2,033 -

� Charge for the year� � � � �� 15,970�� 15,553

� Payments� � � �� (18,003)��(15,553)

� Liability as at 31 December included in

trade and other payables� � - -

� � � � � � � �

43



22� Trade and other payables� � � � �� 2014��2015� � � � �� N'000��N'000

� Trade payables� � � 139,051 303,499

� Other payables and accrued expense� � � � 1,606,682 1,669,008

� Amounts due to related parties (Note 23(a))� � �� 668,627 ��1,084,712

� � � � �� 2,414,360��3,057,219

� � � � � �� The Company's exposure to liquidity risk related to trade and other payables is disclosed in Note 21.

� � � � � �23� Related parties� � � � �(a) Parent company and other related entities� � � �� The Company's parent company is The Raysun Nigeria Limited which owns approximately 60.9% of the

Company's equity as at reporting date. Heineken N.V. is the ultimate parent company of Champion Breweries Plc.

� The Company had transactions with its parent and other entities who are related to the Company by virtue of

being members of the Heineken Group. The transaction value and amounts due from /(to) related parties by

the nature of the transaction are shown below:

� � � � � �� Transaction value� � ��Balance due from

�

� � � ��2014�� 2014��2015 �� 2015 � � � ��N'000�� N'000��N'000 �� N'000� Amount due from related parties� � � � �� Contract Packaging:� � � � �� - Nigerian Breweries� � 2,516,282 � 333,092 2,273,011 411,076

� � � � � �� Other transactions:� � � � �� - Superbrew� � - � � 927 - 927 � � 2,516,282 334,019 2,273,011 412,003

� � ��Transaction value� � ��Balance due to� � �� 2014�� 2014��2015 ��2015 � � �� N'000�� N'000��N'000 �� N'000

� Amount due to related parties� � � � �� Royalties and Technical Fees:*� � � � �� - Montgomery Ventures Incorporated� (42,182) � (273,018) - (273,018)

� Management fee:� � � � �� - The Raysun Nigeria Limited� � (63,312) � (63,312) (69,649) (69,649)�� Purchases:� � � �� - Nigerian Breweries Plc� � - � - (625,003) (398,045)� - The Raysun Nigeria Limited� 10,033,663 (332,297) - (344,000) � � � 9,928,169 � (668,627) (694,652) (1,084,712)

� Deposit for shares:� � � � �� - The Raysun Nigeria Limited� - � - � � � (1,111,594) - � - Akwa Ibom State Government� - � - � � (52,975)� - � � - � - � � �� (1,164,569)�� -

*Management fee relates to agreement between the Company and Montgomery Ventures Incorporated which was approved by the National Office for Technology Acquisition and Promotion.

44



(b) Key Management personnel

In addition to their salaries, the Company also provides non-cash benefits to executive officers, and contributes to a post-employment defined benefit plan on their behalf. In accordance with the terms of the plan, executive officers retire at age 55 and are entitled to receive post employment benefits.

Key management personnel compensation comprised:� � � � � � �� 2014�� 2015� � � � � � �� N'000��N'000� Short-term employee benefits� � � 28,661 45,086

� Post-employment benefits� � � 10,287 17,046 62,132 � 38,948

�24� Financial instruments- financial risk management and fair values� �� Financial risk management� � � � �

The Company has exposure to the following risks from its use of financial instruments:

- credit risk

- liquidity risk

- market risk

This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital.

Risk management framework

The Risk Management Committee is responsible for developing and monitoring the Company's risk management policies which are established to identify and analyse the risks faced by the Company, to set appropriate risk limit and controls, and monitor risks and adherence to limits.

Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.

The Company's Risk Management 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.

Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and related parties.

The Company's financial assets comprise trade and other receivables and cash and cash equivalent as indicated on the statement of financial position. The carrying amount of these financial assets represents maximum credit exposure of the Company.

Trade and other receivables Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.

The Company considers that it is not exposed to significant concentration risk in relation to trade receivables

because over 90% of the Company's customers are concentrated in the South-South geographical region of Nigeria. However, credit risk can arise in the event of non-performance of a counterparty. Credit limits are established for each customer and reviewed on quarterly basis. Customers that fail to meet the Company's benchmark creditworthiness may transact with the Company only on a cash-and-carry basis.

45



The Company further considers that the concentration of credit risk with respect to trade receivables is limited on the bases that the Company grants a credit period of 2 to 3 weeks to selected customers, which mitigates the risk of default by customers.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in

respect of trade and other receivables, which is a specific loss component that relates to individually significant exposures.

� � � � � � � � � � ��2015� ��2014� � � � � � � �� N'000�� N'000 Gross trade receivables 192,544205,912 Impairment (146,116) (118,549) 46,428 87,363 Amounts due from related parties 334,019412,003 Other receivable 197,005 177,735

577,452677,101

Impairment losses

As at the reporting date, the aging of trade receivables based on the most recent transaction date was:

Gross Impairment Gross Impairment 2015 2015 2014 2014 N'000 N'000 N'000 N'000 0-30 days 87,363 - 46,428 -

30-90 days - - - - 91-180 days - - 80 (80) More than 180 days 118,549 (118,549) 146,036 (146,036) 205,912 (118,549) 192,544 (146,116) The movement in the allowance for impairment in respect of trade receivables during the year was as

follows: 2014 2015 N'000 N'000

Balance at 1 January (148,998) (146,116) Impairment loss reversal 2,882 27,567

Balance at 31 December (146,116) (118,549)

The impairment loss as at reporting date relates to trade receivables which in the Company's assessment will not be recoverable from the customers mainly due to their economic circumstances. With respect to other receivables and amounts due from related parties, the Company believes that these unimpaired receivables are collectible based on historical payment behaviour and analyses of the underlying counter party's credit ratings.

Based on historical default rates, the Company believes that, apart from the above, no additional

impairment allowance is required in respect of trade and other receivables. The impairment loss is included in administrative expenses.

(b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

The Company has an appropriate liquidity risk management framework for addressing its short, medium and long term liquidity requirements and makes monthly cash flow projections which assists in monitoring cash flow requirements and optimising cash return on investments.

46

Champion Breweries Plc Annual Report & Accounts 2015


� The following are the contractual maturities of financial liabilities:�

� � � � � � Note��Carrying Contractual � 6 months 6 to 12�� amount� ��cash flows� ��or less ��months�� N'000 N'000 N'000 N'000 31-Dec-15� � � � � � � � �� Non-derivative financial liabilities� � � � � � � �� Trade and other payables� � ��22� 3,057,219 � 3,057,219 3,057,219 -

� � � � � � 3,057,219 3,057,219 3,057,219 -

� 31-Dec-14� � � � � � � � �� Non-derivative financial liabilities� � � � � � � �� Trade and other payables� � ��22� 2,414,360 2,414,360 2,414,360 � -

� Deposit for shares� � � ��17� 1,164,569 � 1,164,569 - 1,164,569

� � � � �� 3,578,929 3,578,929 2,414,360 1,164,569

�It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at

significantly different amounts. � � � � � � � � � � �(c)� Market risk� � � � � � � � �� Market risk is the risk that changes in market prices such as foreign exchange rate will effect the Company's

income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return. The Company manages market risk by keeping cost low through various cost optimisation programmes and also by regular monitoring of market developments.

(d) � Capital management

The Company considers equity contribution from shareholders as its capital.

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going

concern in order to provide returns for the shareholders and to maintain an optimal capital structure.

� In order to maintain an appropriate capital structure, during the year, the Company increased its ordinary share capital

to N3,915 million (2014: N3,600 million) by converting deposit for shares into ordinary share capital through private

placement. In addition, the Company ensures appropriate capital management by monitoring returns on capital and

net debt to equity ratio.

� The Company's return on capital as at the end of the reporting period was as follows: �� 2014��2015� � � � � � � �� N'000��N'000

� Profit/(loss) for the year� � � � �� (754,523) 77,140 �� Total equity� � � � � � � 5,870,431 7,121,637

� Return on capital -13% 1%

� � � � � � � � � �� Furthermore, the Company's adjusted net debt to equity ratio at the end of the reporting period was as follows: �� 2014��2015� � � � � � � �� N'000��N'000

� Total liabilities� � � � � � � 3,721,950 3,207,523

� Less: cash and cash equivalents� � � � � (536,297) (1,169,753)

Net debt 3,185,653 2,037,770

� Total equity� � � � � � � � 5,870,431 7,121,637

� Adjusted net debt to equity ratio 1:1.84 1:3.5�

47



Accounting classification and fair values

The fair values of financial assets and liabilities are not significantly different from the carrying amounts

shown in the statement of financial position.

25 Contingencies

(a) Pending litigation and claims

The Company is a defendant in various law-suits that have arisen in the normal course of business. The contingent

liabilities in respect of pending litigation at year end amounted to N345.3 million. (2014:N472 million ). In the

opinion of the directors and based on independent legal advice, the Company's liability is not likely to be

significant, thus no provision has been made in these financial statements.

(b) Financial commitments

The Directors are of the opinion that all known liabilities and commitments, which are relevant in assessing the

financial position of the Company, have been taken into consideration in the preparation of these financial

statements.

26 Segment reporting

Nigeria is the Company's primary geographical segment as the Company's revenue is entirely earned from sales

of similar product in Nigeria. Additionally, none of the Company's customers accounts for more than ten percent

of the Company's total revenue. Accordingly, no further business or geographical segment information is

reported.

27 Subsequent events

There were no significant subsequent events which could have had a material effect on financial position of the

Company as at 31 December 2015 and its financial performance for the year then ended that have not been

adequately provided for or disclosed in these financial statements.

48


Additional InformationFor the year ended 31 December

Value Added Statement

Revenue 3,501,845 3,302,383

Bought-in-materials and services (1,778,539) (1,607,926)

1,723,306 1,694,457

Other income 52,271 104,131

Value generated by operating activities 1,775,577 100 1,798,588 100 Distribution of Value Added

To Government

- Excise duties 85,359 5 47,124 3

- Minimum tax 38,264 2 9,982 1

- Taxation 133,039 7 (317,242) (18) To Employees:

Personal expenses 794,984 45 672,253 37 To Providers of Finance:

- Finance cost - - 1,287,645 72

Retained in the Business:

To maintain and replace - property, plant and equipment 622,428 35 848,485 47 - intangible asset 6,878 1 4,863 0 To augment reserves 94,625 5 (793,945) (44)

Value added 1,775,577 100 1,798,588 100

2014 2015

N'000 %N'000 %

49


Additional Information

31-Dec 31-Dec 31-Dec 31-Dec 31-Dec 2014 2013 2012 2011 2015 N'000 N'000 N'000 N'000 N'000

Revenue 3,302,383 2,233,259 1,785,345 1,791,109 3,501,845

Profit/(loss) from operating activities 25,511 (543,902) (1,222,013) (1,251,538) 206,769

Profit/(loss) before taxation (1,061,783) (1,730,432) (1,928,865) (1,770,001) 248,443

Profit/(loss) for the year (754,523) (1,178,025) (1,336,690) (1,193,780) 77,140

Comprehensive loss for the year (793,945) (1,178,386) (1,337,505) (1,193,780) 94,625

Ratios

Basic and diluted profit/(loss) per share (kobo) (24) (127) (149) (133) 1

Net liabilities per share (kobo) (188) (508) (381) (232) (91)

Statement of financial position 31-Dec 31-Dec 31-Dec 31-Dec31-Dec 2014 2013 2012 2011 2015 N'000 N'000 N'000 N'000 N'000

Property, plant and equipment 6,844,330 7,239,613 5,657,055 6,362,871 6,917,604

Intangible asset 6,878 11,741 - - -

Deferred tax assets 1,202,200 873,948 321,386 - 1,085,940

Net current liabilities (2,039,956) (12,670,861) (9,345,446) (8,144,702) (748,382)

Employee benefits (143,021) (62,827) (62,995) (39,556) (133,525)

Deferred tax liabilities - - - (271,108) -

Net liabilities 5,870,431 (4,608,386) (3,430,000) (2,092,495) 7,121,637

Funds Employed

Share capital 3,600,000 450,000 450,000 450,000 3,914,748

Share premium 8,251,946 129,184 129,184 129,184 9,093,779

Other reserves 3,701,612 3,701,612 3,701,612 3,701,612 3,701,612

Accumulated loss (9,683,127) (8,889,182) (7,710,796) (6,373,291) (9,588,502)

5,870,431 (4,608,386) (3,430,000) (2,092,495) 7,121,637

Financial Summary Statement of comprehensive income

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4. SPOUSE' NAME:

5. MOTHER'S MAIDEN NAME:*

( = Compulsory fields)*

1. SURNAME/COMPANY NAME:*

16. NEXT OF KIN:

10. PHONE No. (HOME):

8. MOBILE No.:* 9. SEX: MALE FEMALE

12. CSCS CLEARING HOUSE No.:*

14. OCCUPATION:

15. NATIONALITY:

7. ALTERNATE E-MAIL:

11. POSTAL ADDRESS:

E-SHARE REGISTRATION ACTIVATION MANDATE (Please tick the box below )Please take this as authority to activate my account(s) on your 3iOP e-Share Registration Portal where I will be

able to view and manage my investment portfolio online with ease.

13. NAME OF STOCKBROKER:

OTHERS: ______________________________

_____________________________________

BANK DETAILS FOR E-DIVIDEND MANDATEPlease take this as authority to credit my/our under-mentioned account with any dividend payment(s)/lost/misplaced/

stale/unclaimed dividend warrants due on my/our shareholding in the aforementioned company(ies).

17. ACCOUNT NAME:*

18. BANK ACCOUNT NUMBER:*Must be NUBAN

19. BANK:*

20. AGE OF ACCOUNT:*Must be confirmed by the bank

*BANK'S AUTHORISED SIGNATURE & STAMP

DECLARATION

*

Please tick

Champion Breweries Plc

WEBSITE


51


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AFRICA PRUDENTIAL REGISTRARS PLC220B, Ikorodu Road, Palmgrove, Lagos.

Tel: 01-4606460, Lagos.

Proxy FormCHAMPION BREWERIES PLC

I/We*…………………………………………………...…………………………of………………………………………………

…………………………… being member(s) of CHAMPION BREWERIES PLC hereby

appoint**……………………………………………………………. or failing him, DR ELIJAH W. AKPAN or failing her

MR. SHARM G. KULKARNI as my/our proxy to act and vote for me/us and on my/our behalf at the Annual General

Meeting of the Company to be held on Thursday, May 12, 2016 and any adjournment(s) thereof.

BEFORE POSTING THE ABOVE FORM, PLEASE TEAR OFF THIS PART AND RETAIN IT FOR ADMISSION TO THIS MEETINGTH THE 40TH ANNUAL GENERAL MEETING TO BE HELD AT LAGOON RESTAURANTS, 1C OZUMBA MBADIWE STREET, VICTORIA ISLAND, LAGOS ON THURSDAY, 12 MAY 2016

Admission Slip No. of Shares

Name (of person attending) The 40th Annual General Meeting to be held at Lagoon Restaurants, 1C Ozumba Mbadiwe Street, th Victoria Island, Lagos on Thursday, 12 May 2016.

Signature of the person attending

Please Admit

NOTE: The Shareholder or his/her Proxy must produce this Admission Slip in order to be admitted at the meeting. Shareholders or other proxies are requested to sign the Admission Slip at the entrance (venue) of the AGM in the presence of the Registrar on the the day of the Annual General Meeting

The Company SecretaryChampion Breweries PlcIndustrial Layout, Aka OffotUyo, Akwa Ibom State.

The RegistrarAfrica Prudential Registrars220B, Ikorodu Road,Palm Grove, Lagos.

Please post to either of the addresses below:

Name and signature of shareholder

PROXY FORM FOR AGAINST

"That the Financial Statements for the year ended December 31, 2015, the Directors', Auditors' and Audit Committee's Reports thereon be and hereby received, considered and passed" To re-elect Mr. Sam Onukwue as a Director of the Company

To re-elect Mr. Thompson S. B. Owoka as a Director of the Company To re-elect Mr. Hendrik van Rooijen as a Director of the Company "That the appointment of Dr. Elijah W. Akpan as a Director in the Company, who was so appointed on October 22, 2015 in accordance with Section 249 (2) of the Companies and Allied Matters Act, Cap C20 LFN 2004 be and is hereby ratified and that the said Dr. Elijah W. Akpan be and is hereby elected a Director of the Company". "That the appointment of Mr. Samson Aigbedo as a Director in the Company, who was so appointed on December 3, 2015 in accordance with Section 249 (2) of the Companies and Allied Matters Act, Cap C20 LFN 2004 be and is hereby ratified and that the said Mr. Samson Aigbedo be and is hereby elected a Director of the Company". "That the appointment of Mrs. Helen Umanah as a Director in the Company, who was so appointed on December 3, 2015 in accordance with Section 249 (2) of the Companies and Allied Matters Act, Cap C20 LFN 2004 be and is hereby ratified and that the said Mrs. Helen Umanah be and is hereby elected a Director of the Company". "That the Auditors having indicated their willingness to continue in office, the Directors be authorised to fix their remuneration in respect of the year ending December 31, 2015." “To elect/re-elect shareholders' representatives on the Audit Committee.” B. SPECIAL BUSINESS

I. That the Directors be authorised to fix their remuneration in respect of the year ending December 31, 2015.”

ii. To consider and if thought fit, pass the following resolution as an ordinary resolution of the Company:

“That a general mandate be and is hereby given to the Company to enter into recurrent transactions with related parties for the Company's day-to-day operations, including the procurement of goods and services, on normal commercial terms.” Dated this …………day of ………………………, 2016.

Number of Shares held

Signature .............................................................................................

Dated this.............................................. day of .......................... 2016

Notes: A member who is unable to attend an Annual General Meeting is allowed by law to attend and vote by proxy. This Proxy Form has been prepared to enable a member exercise his/her right to vote in case he/she cannot personally attend the meeting, The Proxy Form should not be completed if the member will be attending the meeting. If you will not be able to attend the meeting, then read and comply with the following instructions: (a) Write your name in CAPITALS on the proxy form where marked* (b) Write the name of your proxy (if any) where marked** date and sign the Proxy Form. The common seal of the Company should be affixed on the Proxy Form if executed by a Corporation. The Proxy Form must be posted as to reach any of the addresses shown below not later than 48 hours before the time of holding the meeting.

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AFRICA PRUDENTIAL REGISTRARS PLC220B, Ikorodu Road, Palmgrove, Lagos.

Tel: 01-4606460, Lagos.

2015 annual report - champion breweries plc (champion) champion annual report.pdf · nigeria. tel:...

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