ANNUAL REPORT 2016
DRINK RESPONSIBLY.
2016 ANNUAL REPORT & FINANCIAL STATEMENTS
TABLE OF CONTENTS
1 Corporate Information 2
2 Board Members 3
3 Notice of Annual General Meeting 8
4 Chairman’s Statement 9
5 Report of the Directors 12
6 Independent Auditor’s Report 22
7 Statement of Financial Position 23
8 Statement of Comprehensive Income 24
9 Statement of Changes in Equity 25
10 Statement of Cash Flows 26
11 Notes to the Financial Statements 28
12 Shareholder Information Appendix I
13 Five Year Financial Summary Appendix II
1 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
CORPORATE INFORMATION 1
Board of Directors Simon Harvey (Joined the Board in September 2015, appointed Board Chairman in May 2016) David Harlock (Resigned in May 2016) Peter Ndegwa (Resigned in November 2015) Francis Agbonlahor (Joined the Board in December 2015, appointed MD in January 2016) Ebenezer Magnus Boye Ekwunife Okoli (Resigned in October 2015) Stephen Nirenstein Prince William Ankrah Preba Efua Greenstreet (Resigned in September 2015) Mark Sandys Martyn Mensah Leo Breen (Appointed in September 2015) Boudewijn Haarsma (Appointed in September 2015, and resigned in October 2015) Kofi Sekyere (Appointed in September 2015)
Secretary Registrars H. Essie Humphrey-Ackumey Universal Merchant Bank Limited Guinness Ghana Breweries Limited 123 Kwame Nkrumah Avenue P.O. Box 3610 Sethi Plaza Accra Adabraka - Accra
Registered Office Solicitor Guinness Ghana Breweries Limited Legal Ink Solicitors & Notaries Industrial Area, Kaasi House No. F 89/7 Emmaus Road P.O. Box 1536 Off 2nd Labone Street, Labone Kumasi P.O. Box 24, Kanda Accra Independent Auditor PricewaterhouseCoopers Bankers Chartered Accountants Barclays Bank of Ghana Limited Number 12, Airport City Guaranty Trust Bank (Ghana) Limited Una Home 3rd Floor Standard Chartered Bank Ghana Limited PMB CT42, Cantonments Societe Generale Ghana Limited Accra Stanbic Bank Ghana Limited Zenith Bank (Ghana) Limited Fidelity Bank Ghana Limited Access Bank (Ghana) Limited
2 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
BOARD MEMBERS 2
SIMON HARVEY
Board Chairman
Simon Harvey joined the Board in September 2015 and was appointed Board Chairman of Guinness Ghana Breweries Limited (GGBL) in May 2016. Prior to joining Diageo in September 2015 as Managing Director, Africa Regional Markets (ARM), Simon was the Operations Director, West Africa, and Managing Director of SABMiller Africa & Asia (Pty) Limited. His other directorships are in Seychelles Breweries Limited and the Meta Abo Brewery Share Company in Ethiopia.
FRANCIS OSEMWEGIE AGBONLAHOR
Managing Director
Francis Osemwegie Agbonlahor joined the Board in December 2015 and was appointed to the role of Managing Director of GGBL effective 25 January 2016. Francis joined Guinness Nigeria plc on 1 December, 1990 as a graduate trainee and held several senior roles including Head of Customer Service, Plant Manager and Supply Chain Director at Guinness Nigeria plc. He was appointed General Manager of the Meta Abo Brewery Share Company in Ethiopia following Diageo’s acquisition of the business in January 2012.
3 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
BOARD MEMBERS 2
STEPHEN NIRENSTEIN
Finance Director
Stephen is currently the Finance Director of Guinness Ghana Breweries Limited. Prior to his current role, he was the Group Financial Planning and Analysis Director for Diageo Budapest. Before then, Stephen spent three years as the Financial Controller for the Diageo Red Stripe business in Jamaica and also worked as the Commercial Finance Manager for Diageo International Beer Supply based in London.
MARK SANDYS
Non-Executive Director
Mark Sandys has over 15 years of experience working in Diageo. He is currently the Guinness Global Brand Director.
He has been with Diageo since 1999 and he has held positions of Category Director for Whisky & Reserve in Asia Pacific, Marketing & Innovation Director in Diageo Russia & Eastern Europe, Global Marketing Strategy & Innovation Director in respect of Baileys, Marketing Manager Gordon’s Gin and Guinness Brand Manager.
4 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
BOARD MEMBERS 2
EBENEZER MAGNUS BOYE
Non-Executive Director
Ebenezer Magnus Boye is a former director of Ghana Breweries Limited. He is a retired Managing Director of Coopers and Lybrand – Ghana (now PricewaterhouseCoopers), a past President of the Institute of Chartered Accountants of Ghana and The Chartered Institute of Taxation, Ghana.
He has served on the boards of a number of public and private companies including Barclays Bank of Ghana Limited, Unilever Ghana Limited and Ghana Ports and Habours Authority. He was appointed to serve on the GGBL Board in July 2004.
MARTYN MENSAH
Non-Executive Director
Martyn Mensah is the Chief Executive Officer of UT Holdings, owners of a diversified group of subsidiaries. He also serves on the board of UT Bank, Enablis Ghana, Maridav Ghana Limited, the Zawadi Foundation and he is the Chairman of the board of Petra Trust, a pension’s trustee.
5 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
BOARD MEMBERS 2
LEO BREEN
Non-Executive Director
Leo Breen has over 14 years working experience as Finance Director. He has managed finance operations for a Diageo business unit comprising 16 countries including companies in Greece and Italy. He was the Finance Director for Diageo China from 2006 to 2011. He is currently the Finance & Strategy Director for Diageo Africa Regional Markets and is based in London. He also serves on the board of Meta Abo Share Company in Ethiopia.
KOFI SEKYERE
Non-Executive Director
Kofi Sekyere is currently the Chief Executive Officer of TAH Capital (Pty) Limited, Johannesburg, South Africa responsible for developing and the implementation of the company’s growth marketing strategy for Sub-sahara Africa. He has 20 year’s experience in telecommunications and Finance sector.
He also serves on a number of boards in Ghana, Southern Africa and the United States of America.
6 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
BOARD MEMBERS 2
PRINCE WILLIAM ANKRAH
Non-Executive Director
Prince William Ankrah was appointed to serve on the GGBL Board in May 2014. He is the General Secretary of the Mineworkers Union, the Trade Union Congress, Ghana and has a wealth of experience in industrial Relations Management. He serves on a number of boards in Ghana.
H. ESSIE HUMPHREY-ACKUMEY
Company Secretary
H. Essie Humphrey-Ackumey is a Barrister-at-Law in England and Wales, and a Solicitor & Advocate of the Supreme Court of Ghana. She has over 25 years’ experience in banking and finance, company law and practice, human rights law, insurance and labour related issues. Prior to joining the Company, she was the Head of Legal and Company Secretary of Fidelity Bank Ghana Limited and Company Secretary of Fidelity Asia Bank Limited, Kuala Lumpur, Malaysia.
7 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTICE OF ANNUAL GENERAL MEETING 3
Notice is hereby given that the 44th Annual General Meeting of Guinness Ghana Breweries Limited will be held at Alisa Hotel, Accra on Thursday October 27, 2016 at 10 o’clock in the forenoon for the following purposes:
AGENDA Board of Directors and Secretary ORDINARY BUSINESS Simon Harvey (Chairman), Francis Agbonlahor (Managing Director), Stephen Nirenstein (Finance Director), Leo 1. To receive the Report of the Directors, the Breen, Mark Sandys, Ebenezer Magnus Boye, Martyn Financial Statements for the year ended 30th June 2016 Mensah, Kofi Sekyere, Prince William Ankrah, H. Essie and the Report of the Auditors thereon. Humphrey-Ackumey (Secretary). 2. To re-elect Directors. Executive Management Committee 3. To approve non-executive directors’ fees. Francis Agbonlahor, Stephen Nirenstein, Andy Jones, 4. To authorise the Directors to fix the remuneration Eric Adadevoh, Eric Otoo, Gabriel Opoku-Asare, H. Essie of the Auditors. Humphrey-Ackumey, Luck Ochieng, Kweku Sekyi-Cann, Helen Opoku-Agyemang. SPECIAL BUSINESS Audit Committee 1. To amend Regulation 58 (1) of the Company’s Regulations to include Regulation 58 (1) (a) and Ebenezer Magnus Boye, Martyn Mensah and Stephen (b) as follows: Nirenstein.
a. The electronic version of the Annual Report and Nominations Committee Financial Statements shall be posted on the Simon Harvey, Stephen Nirenstein. Business’ website as follows: www.guinnessghana.com and same forwarded Registered Office to the e-mail addresses of shareholders before Guinness Ghana Breweries Limited, Kaase Industrial Annual General Meetings. Area, P. O. Box 1536, Kumasi b. A limited number of hard copies of the Annual Report will be made available to shareholders at Registrar’s Office the grounds of the Annual General Meeting for Universal Merchant Bank Ghana Limited, Registrars use by shareholders attending the meeting. Department, 123 Kwame Nkrumah Avenue, Sethi Plaza, A member of the Company entitled to attend and Adabraka, P. O. Box GP 401, Accra. vote is entitled to appoint a proxy to attend and vote instead of him. A proxy need not also be a Member. A proxy form is attached and for it to be valid for the purpose of the Meeting, it must be completed and deposited at the Registrars’, Universal Merchant Bank Ghana Limited’s offices not less than 48 hours before the meeting. Dated this 20th day of September, 2016
By order of the Board H. Essie Humphrey-Ackumey Company Secretary
8 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
CHAIRMAN’S STATEMENT 4
Good Morning Nii Mei, Naa Mei, shareholders, ladies and gentlemen. Welcome to the 44th annual general meeting of Guinness Ghana Breweries Limited (GGBL).
I would like to start by introducing myself as the new Board Chairman.
I joined Diageo in September 2015 as Managing Director, Africa Regional Markets (ARM). Prior to that I served as the Operations Director, West Africa, and Managing Director of SABMiller Africa & Asia (Pty) Limited. I currently serve on the Board of Seychelles Breweries Limited and the Meta Abo Brewery Share Company in Ethiopia.
I was appointed the Board Chairman of Guinness Ghana Breweries Limited in May 2016.
And now I would like to introduce the remaining members of the Board.
Francis Osemwegie Agbonlahor was appointed Ebenezer Magnus Boye is a former director of to the role of Managing Director of GGBL effective 25 Ghana Breweries Limited. He is a retired Managing January 2016. Francis joined Guinness Nigeria plc on 1 Director of Coopers and Lybrand – Ghana (now December, 1990 as a graduate trainee and held several PricewaterhouseCoopers), a past President of the senior roles including Head of Customer Service, Plant Institute of Chartered Accountants of Ghana and The Manager and Supply Chain Director at Guinness Nigeria Chartered Institute of Taxation, Ghana. He has served on plc. He was appointed General Manager of the Meta Abo the boards of a number of public and private companies Brewery Share Company in Ethiopia following Diageo’s including Barclays Bank of Ghana Limited, Unilever Ghana acquisition of the business in January 2012. Limited and Ghana Ports and Habours Authority. He was appointed to serve on the GGBL Board in July 2004. Stephen Nirenstein is currently the Finance Director of Guinness Ghana Breweries Limited. Prior to his current Martyn Mensah holds a Master’s in Business role, he was the Group Financial Planning and Analysis Administration and Diploma from the Imperial College of Director for Diageo Budapest. Before then, Stephen spent Science, Medicine & Technology in London. He also holds three years as the Financial Controller for the Diageo a degree in Electrical and Electronic Engineering from the Red Stripe business in Jamaica and also worked as the University of Bath in the United Kingdom. Commercial Finance Manager for Diageo International Beer Supply based in London. Currently, Martyn is the Chief Executive Officer of UT Holdings, owners of a diversified group of subsidiaries. Mark Sandys is a graduate of Balliol College, Oxford He also serves on the board of UT Bank, Enablis Ghana, University and has over 15 years of experience working Maridav Ghana Limited, the Zawadi Foundation and he in Diageo. He is currently the Guinness Global Brand is the Chairman of the board of Petra Trust, a pension’s Director. trustee.
He has worked with Diageo since 1999 and he has held Leo Breen has over 14 years working experience as positions of Category Director for Whisky & Reserve in Finance Director. He has managed finance operations for Asia Pacific, Marketing & Innovation Director in Diageo a Diageo business unit comprising 16 counties including Russia & Eastern Europe, Global Marketing Strategy companies in Greece and Italy. He was the Finance & Innovation Director in respect of Baileys, Marketing Director for Diageo China from 2006 to 2011. He is Manager Gordon’s Gin and Guinness Brand Manager. currently the Finance & Strategy Director for Diageo Africa
9 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
CHAIRMAN’S STATEMENT cont’d 4
Regional Markets and is based in London. He also serves Ghana’s macro-economic performance remains on the board of Meta Abo Share Company in Ethiopia. challenged. Inflation pressures remains elevated in 2016 due to the continuing pass-through effects of Kofi Sekyere holds an MSc. in Material Science the adjustments in utility prices and, to a lesser extent, Engineering from the University of Virginia, Charlottesville, petroleum prices. The Year on Year inflation as at June USA. He holds a BSc. In Physics from the Bates College, ’16 was at 18.4% compared to June’ 15 Year on Year Lewiston in Maine, USA as well as an MBA in Finance inflation rate of 17.1 %. and Marketing from the Sloan School of Management in Massachusetts Institute of Technology (MIT) Cambridge Cost of borrowing continues to be a challenge for in the USA. businesses. The Bank of Ghana’s Monetary Policy Rate as at June 2015 was at 22% and this moved up to 26% He also serves on a number of boards in Ghana and as at June 2016. These are a few examples of macro- southern Africa. economic challenges we continue to face.
Prince William Ankrah was appointed to serve on the Despite these challenges however, our business continues GGBL Board in May 2014. He is the General Secretary of to focus on investing in the growth to bring value to the Mineworkers Union, the Trade Union Congress, Ghana shareholders, customers, consumers, our employees and has a wealth of experience in industrial Relations and the society in which we operate. Management. He serves on a number of boards in Ghana and is a Chartered Member of the Chartered Institute of To ensure we maintain and extend our leadership in Personnel and Development in the UK. Ghana’s beverage industry, we will continue to innovate as critical growth driver for our business. As presented H. Essie Humphrey-Ackumey is a Barrister-at-Law last year, we have seen some amazing success stories in England and Wales, and a Solicitor & Advocate of from innovations like Orjin bitters and Orijin RTD. Further, the Supreme Court of Ghana. She has over 25 years’ in response to the ever evolving consumer taste and experience in banking and finance, company law and demands we introduced Guinness Africa Special, a practice, human rights law, insurance and labour related brand extension of our flagship brand Guinness Foreign issues. Prior to joining the Company, she was the Head Extra Stout, made with 70% sorghum sourced from the of Legal and Company Secretary of Fidelity Bank Ghana northern regions of Ghana as well as selected herbs Limited and Company Secretary of Fidelity Asia Bank and spices. Also, through significant investments we Limited, Kuala Lumpur, Malaysia. introduced convenient packages for our non-alcoholic brands – Malta Guinness and Alvaro in PET in addition BUSINESS ENVIRONMENT to the traditional glass packaging. These and many AND PERFORMANCE others give me the confidence that we will strengthen and Ladies and Gentlemen I now present to you our business accelerate our growth in our premium core. performance for the period July 2015 to June 2016. My predecessor already presented to you our performance Ladies and Gentlemen, we continue to invest in our ambition – to be the best performing, most trusted and business. In the 2015/16 financial year, we invested respected consumer Products Company in Ghana. The in equipment to guarantee the premium quality of our executive management team of your company continues products – these include new state of art laboratories in to work tirelessly to deliver this ambition with clear our Achimota site here in Accra and in Kaasi – Kumasi. focus on enhanced capability, innovation and improving As we focus on growing our business, I am equally proud productivity in the business. of the positive contribution we make to the society – this is a priority of Diageo and it is at the core of our performance ambition. As the only listed beverage business in Ghana, it is essential that we demonstrate our leadership in
10 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
CHAIRMAN’S STATEMENT cont’d 4
everything we do – manufacturing excellence, responsible OUTLOOK marketing, fair trade and reducing alcohol misuse. Nii Mei, Naa Mei, shareholders, ladies and gentlemen, I am delighted to serve as Chairman of the GGBL Board as During the financial year, we partnered with other we strive to extend our leadership in Ghana. Competition stakeholders to raise awareness and change attitudes is getting keener and history has shown that forecasts and behaviors of about 4,000 commercial drivers in 11 and macro-economic predictions may change but we will transport terminals across the country. We also engaged remain resilient and focus on delivering our ambition. selected senior high schools in pilot ‘hit the books and not the booze’ campaign to educate teenage students In this financial year, two things remain my focus and in on the effect of alcohol. These, among other campaigns fact the focus of the entire organisation – productivity and form part of our support to the Global Alcohol Producers’ winning mindset. We need to operate our business in the commitment to reduce the harmful use of alcohol and most efficient way, making bold decisions to ensure we make a tangible difference in areas such as tackling deliver our strategy. underage drinking and reducing drink driving. We will continue to invest behind our brands and our We also remain committed to step change the local supply people and I am confident of a better performance in 2017 chain, investing and providing technical expertise to local when we can give more value to you our shareholders. farmers to improve yields of some locally produced raw materials. GGBL continues to be a guaranteed off-taker Thank you. of harvested sorghum, maize and cassava throughout the country and I am confident that through innovation and brand value re-engineering we will meet our target of using 70% local raw materials by 2019, thereby improving livelihoods of farmers and providing employment opportunities throughout the value chain.
Through the recently announced global strategic partnership with the NGO WaterAid by Diageo, we have renewed our pledge to provide safe accessible drinking water to vulnerable communities.
11 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
REPORT OF THE DIRECTORS TO THE MEMBERS OF GUINNESS GHANA BREWERIES LIMITED 5
The Directors, in submitting to the shareholders their HOLDING COMPANY report and financial statements of the Company for the The Company is a subsidiary of Diageo Highlands BV year ended 30 June 2016, report as follows: and Diageo Ghanaian Holdings BV, both companies incorporated in the Netherlands. The ultimate parent STATEMENT OF DIRECTORS RESPONSIBILITY Company is Diageo Plc, a Company incorporated in the The directors are responsible for the preparation of financial United Kingdom. statements for each financial year which give a true and fair view of the state of affairs of the Company at the end CHANGES IN DIRECTORSHIP of the financial year and of the profit or loss and cash flows During the year under review five directors resigned and for that period. In preparing these financial statements, five directors were appointed as follows: the directors have selected suitable accounting policies and applied them consistently, made judgements and • Messrs. Simon Harvey, Leo Breen, Boudewijn estimates that are reasonable and prudent and followed Haarsma and Kofi Sekyere joined the Board in International Financial Reporting Standards (IFRS) and September 2015. complied with the requirements of the Companies Act, • Mr. Francis Agbonlahor joined the Board in 1963 (Act 179). December 2015 and was appointed Managing The directors are responsible for ensuring that the Director in January 2016. Company keeps proper accounting records that disclose • Ms. Preba Efua Greenstreet resigned in with reasonable accuracy at any time the financial position September 2015. of the Company. The directors are also responsible for safeguarding the assets of the Company and taking • Messrs. Ekwunife Okoli and Boudewijn Haarsma reasonable steps for the prevention and detection of fraud resigned in October 2015 and other irregularities. • Mr. Peter Waititu Ndegwa resigned in November The directors have made an assessment of the Company’s 2015 ability to continue as a going concern and have no reason to believe the business will not be a going concern. • Mr. David Harlock resigned in May 2016
FINANCIAL STATEMENTS AND DIVIDEND DIRECTORS RETIRING AND The results for the year are as set out in the statement SEEKING RE-ELECTION of comprehensive income on page 24 of the financial In accordance with the Companies Act, 1963 (Act 179), statements. the Company’s Regulations and Ghana Stock Exchange Rules the newly appointed Directors namely Simon The directors do not recommend the payment of a Harvey, Leo Breen and Kofi Sekyere will retire and seek dividend for the year ended 30 June 2016 (2015: Nil). re-election at the next Annual General Meeting. The Board would like to recommend that shareholders support their The directors consider the state of the Company’s affairs re-election. to be satisfactory. APPROVAL OF THE FINANCIAL STATEMENTS NATURE OF BUSINESS The financial statements of the Company were approved The Company manufactures, distributes and sells by the Board of Directors on 20 September 2016 and alcoholic and non-alcoholic beverages and their ancillary signed on its behalf by: products.
FRANCIS AGBONLAHOR (Managing Director) STEPHEN NIRENSTEIN (Finance Director)
12 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REPORT
Guinness Ghana Breweries Limited (GGBL) is committed to guidance and necessary approvals and perform their achieving the highest standards of corporate governance, statutory obligations. corporate responsibility and risk management in the conduct of its business. GBBL is also committed to THE EXECUTIVE MANAGEMENT COMMITTEE carrying out its business responsibly and in accordance The Executive Management Committee is made up of the with all laws and regulations which its business activities Managing Director and all the other functional directors are subject to. The board and management team are and is responsible for the day to day management of collectively responsible for ensuring that the highest the company and for all the operational aspects of the standards of corporate governance are achieved when business. The committee meets regularly to review the directing and controlling the business. performance of the business, to assess the operations of the business, to devise and implement strategic BOARD OF DIRECTORS pathways for the company and to ensure that adequate The board is made up of two full time executive directors internal controls and compliance system are in place and and seven non-executive directors. These directors are that they are adhered to. highly qualified and experienced in their professional areas of expertise. The board, chaired by a non-executive The committee also identifies the company’s risk profile director, is responsible for promoting success of the and ensures that all the relevant steps are taken to Company by directing and supervising the Company’s mitigate and address the said risks. affairs. The board; AUDIT SUB-COMMITTEE [ASC] • provides leadership of the Company with a The audit sub-committee [ASC] of the board is comprised framework of prudent and effective controls which of three directors two of whom are non-executive enable risk to be assessed and managed; directors. The ASC is required to exert a high level of oversight and scrutiny into the company’s operations and • provides input into the development of the long- financial reporting and internal controls and compliance term objectives and overall commercial strategy for system. the Company and is responsible for the oversight of the Company’s operations while evaluating and The ASC assists the board in fulfilling its oversight directing the implementation of the Company’s responsibilities relating to the integrity of the financial controls and procedures; statements, compliance with legal and regulatory requirements, the independent auditors qualifications, • provides oversight of the Company’s strategic independence and remuneration, the performance of the aims, ensuring that the necessary financial and internal compliance function and the performance of our human resources are in place for the Company independent auditors, Messrs. PwC. The ASC ensures to meet its objectives, as well as reviewing that recommendations by the auditors and the ASC itself, management performance; for procedural improvements and rectification, are duly • upholds the Company’s values and standards completed by the company. and ensures that its obligations to its shareholders In line with these requirements the ASC met four times and others are understood and met; and this year and was fully engaged in reviewing both the • ensures timely and accurate financial reporting to internal and external audit reports and ensuring that the shareholders. Company followed through on issues to be addressed. In addition the committee reviewed in detail the Company’s There were five well-attended meetings of the board financial statements to ensure that they provide a true and of directors during the year under review, scheduled to accurate record of the state of the Company’s affairs. ensure that the Directors could provide the appropriate
13 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
CORPORATE GOVERNANCE REPORT cont’d
NOMINATIONS COMMITTEE OCCUPATIONAL HEALTH AND The Nominations Committee is currently comprised ENVIRONMENTAL SAFETY of two directors. The Nominations Committee makes Your Company is committed to providing the highest recommendations to the board on all matters concerning standards of health, safety and welfare for its employees corporate governance and directorship practices and has taken major strides in ensuring minimal effluent including development of corporate governance discharge. All aspects of our operation are therefore guidelines, evaluation of the board, committees and conducted in compliance with applicable health and individual directors, identification and selection of new safety laws and regulations and Company policies. board nominees, and oversight of the Company’s policies relating to social and environmental issues. The CODE OF BUSINESS CONDUCT Nominations Committee also evaluates and recommends Your Company is committed to operating with integrity compensation for Non-executive directors. The and has a Code of Business Conduct in place which Nominations Committee met once this year and had very establishes the level of professionalism and integrity productive deliberations on issues in respect of corporate required of all employees and the third parties that the governance and the appointment/nomination of directors Company deals with. The Code clearly spells out the and the remuneration of non - executive directors. high ethical, professional and moral standards expected which include the requirement for reliable and accurate RISK MANAGEMENT AND financial reporting, compliance with all applicable laws, INTERNAL CONTROL the prohibition of improper payments and bribes and the Your Company is proud of its commitment to external commitment to act as a socially responsible company auditing each year. This year in addition to the annual with respect to the environment, the communities we financial audit undertaken by PwC [external audit] the operate in and our employees. Your Company is also Company underwent internal audits and reviews in key committed to promoting responsible drinking and the areas of its operations. We also underwent the Controls highest standards of responsible marketing as captured Assessment and Risk Mitigation [CARM] process to drive in our Marketing Code. improvement and adherence to controls. In conclusion we are happy to inform you that we have created an environment where our employees derive joy and pride from doing the right thing and acting with integrity.
14 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
SUSTAINABILITY AND RESPONSIBILITY
Since the launch of the Diageo 2020 Sustainability and Responsibility Targets, we have committed resources to ensuring we promote programmes and campaigns around the three thematic areas that relate to our operations, namely our Leadership in Alcohol in Society, Building Thriving Communities and Reducing our environmental impact.
LEADERSHIP IN ALCOHOL IN SOCIETY Our bespoke Don’t Drink and Drive programme, ‘Twa The above results proved the need to expand the Kwano Mmom’ (Go the distance instead) continued in programme to meet other commercial drivers in other its third term positing great improvement in the number regions. It also got us closer to the 1 million mark required of commercial drivers reached in partnership with TOTAL by the Diageo 2020 target to be the number of adults Petroleum Ghana Limited. Together with Psychologists reached with information on responsible enjoyment of from the University of Ghana School of Medicine and alcohol. Dentistry – Psychiatry Department, the National road Safety Commission, the Motor Traffic and Transport Our partnerships also fulfilled one of the metrics of the Department of the Ghana Polcie Service and the various 2020 targets and demonstrated our willingness to join commercial drivers’ union, we educated, tested and hands with industry and other players to reduce drink rewarded participants. Out of the 11 transport terminals driving in Ghana. visited, over 4,000 commercial drivers were taken through the education, winning various rewards to inure behavioural change. This represented an additional 4 transport terminals and over 110% increase in the number of participants reached in 2014. New terminals included the Ho market in the Volta region, Adehyeman and Abinchi in the Ashanti Region and Madina in the Greater Accra region in addition to Achimota, Kaneshie, Ashaiman and Tudu in the Greater Accra Region, Tantri in the Central region and Race Course and Asafo in the Ashanti region. More than 31,000 tests were conducted. Throughout the campaign period, only 0.03% of these tests were above Winning driver showing off his reward. the 0.08mg threshold representing drivers who were still Insert - A driver going through the breathalyzer test engaged in Drink driving.
BUILDING THRIVING COMMUNITIES The Water of Life programme is focused on providing access to water, sanitation and hygiene (WASH) in line with UN Sustainable Development Goal 6: ‘Clean water and sanitation’, and is increasingly active in rural areas that supply raw materials to our business. In the year under review, GGBL together with the International Supply Center - Scotland, provided 4 communities in the Awutu Senya district with various water solutions. In total, 69,727 beneficiaries were reached in Ofaada, Akpeteshie Nkwanta, Larbi Ekura and Agbaa.
15 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
SUSTAINABILITY AND RESPONSIBILITY cont’d
REDUCING OUR ENVIRONMENTAL IMPACT GGBL announced it call for sustainable partnerships to deal with the plastic waste in Ghana through a beach cleanup exercise at the Sakumono Titanic Beach. The occasion also represented an employee volunteering activity as GGBL employees joined to clean the beach in partnership with the Ministry of Tourism Culture and the Creative Arts, NShoreNa, Citi FM and ZoomLion. The exercise was aimed at influencing behavioural change among inhabitants of Sakumono and its surroundings whiles calling for a collaborative effort in fighting the waste menace in Ghana. In total, about 500 hands were on deck to clean up the beach.
GGBL employees together with other Stakeholders cleaning the Sakumono Titanic Beach
GGBL is committed to ensure that we meet all the set targets. As a callout we will continue to ensure sustainable sourcing of our raw materials locally and to show our thought leadership in promoting responsible drinking. We look forward to more innovative ways of reducing our environmental impact. The 2020 Sustainability and Responsibility targets affords us the opportunity to give back because we believe doing good is good for business.
16 Following the CI guidlines.
LET’SLET’S GOGO GH!GH! The Malta Guinness word and associated logos are trademarks © Guinness & Co. 2015 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
IGNITING CONSUMER PASSION THROUGH BOLD EXECUTIONS
Baileys Valentine’s and Mothers STAR BEER GHANA MUSIC Day Celebrations AWARDS ACTIVATIONS
Valentine’s Day and Mother’s Day were memorable The 17th edition of the Ghana Music Awards was held occasions for Consumers of Baileys in February and this year. This event is argueably the biggest and most May 2016 respectively. February saw colorful red bows talked about music event in Ghana. Star Beer being the adorning bottles of Baileys in various shops in Ghana official beverage sponsor for the past 3 years partnered such as Say Cheers, Game and Shoprite in Accra; Poku with “Charterhouse” the organizers to bring memorable Trading and ABC mart in Kumasi; and Shop and Save experiences to the patrons. and All needs in Takoradi. With over 25,000 people in attendance at the event In May 2016, beautiful pink bows and special centers and 2,000,000 TV audiences, Star leveraged personalized message cards decorated the Baileys the opportunity to bring the brand purpose to life. bottles in these shops for Mother’s Day attracting shoppers to Baileys as the perfect gift for their mothers. Being a quality beer of world class standard, Star is brewed with natural ingredients with no added sugar, For both Valentines and Mother’s Day, consumers who and undergoes as many as 260 quality checks. It is purchased from selected shops had the opportunity to also refined through a unique cold filtration process that win Dinner for two in the plush La Palm and Golden gives it a full, rich and a refreshing finish that leaves the Tulip hotels in Accra, ‘The View’ in Kumasi and Atlantic consumer with an unforgettable taste experience. hotel in Takoradi. Our digital executions as part of this activation were All activities were supported with Radio partnerships very successful with Facebook likes and engagements from stations across Accra, Kumasi and Takoradi as on the Star page; facebook.com/starbeergh surpassing well as newspaper advertisements which reminded that of previous years and with over 14,000 youtube consumers of these two occasions and encouraged viewers, we exceeded the targeted number of views them to purchase as the ideal gift for their loved ones. by 90%.
18 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
IGNITING CONSUMER PASSION THROUGH BOLD EXECUTIONS
LAUNCH OF ORIJIN IN GHANA
Launched over a year ago Orijin has been established as Initially launched in 75cl and 20cl PET formats, it a favorite among Ghanaian beer and bitters consumers, was imperative to expand Orijin bitters to meet new successfully becoming a credible male trademark re- consumer needs whilst leveraging the huge bitters inventing and modernizing the enormous bitters and format opportunity in Ghana. As a result, Orijin Bag- beer category in Ghana. Orijin aced all consumer in-box (5L) and Orijin Sachet (50ml) were rolled out in 2 and commercial metrics contributing a third to total different test markets. Bag-in-box is still at test phase business volume in F16 despite the intense competitive with Orijin sachet (50ml) rolled out nationwide. Sachets environment. Bold and impactful executions with a in the Bitters & Gin category form about 1/3 of the strong proposition drove for brand performance in F16. category; as ‘On-the-go’ consumption and pressure on disposable income are still prevalent in the Mainstream True to its brand purpose, Orijin owned and partnered Spirits segment. It was key that Orijin Bitters is culturally relevant occasions such as festivals with available in all formats required to win in Mainstream bold executions of Orijin Palace and set up of satellite Spirits. Orijin Bitters in sachet gives the DE consumer sampling opportunities which ensured we reached the opportunity to access a high quality Bitters. 1.5m consumers at the end of the financial year. Driving advocacy was key to brand success. Boyz-Boyz parties ensured we generated positive word of mouth among consumers. This was amplified by the use of radio which carried live feed from activation venues.
19 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
IGNITING CONSUMER PASSION THROUGH BOLD EXECUTIONS
THE DIAGEO MASTER BAR ACADEMY GGBL INTRODUCES NEW CONVENIENT PLASTIC PACK FOR MALTA GUINNESS & ALVARO
In response to the growing consumer need for convenient on-the-go consumption, Guinness Ghana Breweries Limited (GGBL) rolled-out a convenient plastic pack for Malta Guinness and Alvaro.
The new pack was introduced in January 2016 and the launch was supported with exciting marketing and commercial activities such as – radio communication, visibility deployment, market storms in high traffic areas, as well as occasions that presented “On – The – Go” On Tuesday, 28th June, 2016, Johnson Dugbey, from consumption opportunities. The Chop Bar was announced the top bartender at Benefits of this new pack include: the 4th Master Bar Academy (MBA) event held at The Movenpick Ambassador Hotel Accra. The Master • It is easy to open and close Bartender Academy Program was first launched in • It is non-returnable, so there is no need for a 2012. bottle swap or deposit.
Johnson Dugbey came top among some 40 • You can have it wherever, whenever. bartenders who were chosen to compete for the title The new plastic pack comes in 330ml and 500ml sizes of the Master Bartender 2016. Aside carrying the title and the volume of the liquid in the 330 plastic pack is of The Master Bartender of 2016, he also took home the same as the returnable glass bottle. an MBA certificate with exclusive MBA merchandise that includes a special cocktail kit, an iPad loaded MALTA GUINNESS & ALVARO PLASTIC with exclusive cocktail apps, and a cash prize of PACK…………NO WAHALA!! $1000 (US dollars).
MBA is Africa’s largest bartending programme run by Diageo; the world’s leading premium drinks business and the parent company of Guinness Ghana Breweries Limited (GGBL).
The aim of this annual program is to ensure our consumers experience a perfect serve of our International Premium spirits every time all of the time, and that they meet world-class standards. It was based on the belief that bartending is a profession that requires skill and professionalism that led to the business investing in this activity.
To date, this training programme has taken place in more than 30 cities across Africa with over 37,000 bartenders trained. In Ghana, the programme was launched four years ago and has trained over 3,600 bartenders.
20 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
IGNITING CONSUMER PASSION THROUGH BOLD EXECUTIONS
LAUNCH OF GUINESS AFRICA SPECIAL The event began with a press launch which was well represented by journalists, bloggers and broadcasters rd On 23 April 2016, Accra finally met “Africa’s Special from across the various media houses. Consumers one” in grand style. were thrilled and entertained at the Consumer Launch The World Trade Center was the place to be that fateful by Gen. Y. Artiste (Shatta Wale and Episode) with evening, the atmosphere was all ripe for a rousing explosive performances. That fateful day brought out welcome of Guinness Africa Special to the Ghanaian the vibrancy in the youth and showed how alive inside market. we can be with Guinness Africa Special. Consumers left the event ground’s with a mark of Guinness Africa A BRAND NEW BEER made by young African adults Special engraved in a special place in their heart. for young African adults from pack to content to advertising. This one is ours Containing AFRICAN A total of 4,000 consumers were sampled during the INGREDIENTS AND FLAVOUR. event.
Guinness stout made with natural African Herb and Guinness Africa Special has been launched in Accra, Spices for a refreshing vibrant taste with 5% ABV in a Tema, Kumasi and Obuasi. 500ml pack. Guinness Africa Special… Alive inside with natural Extracts
21 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GUINNESS GHANA BREWERIES LIMITED 6
REPORT ON THE FINANCIAL STATEMENTS We believe that the audit evidence we have obtained is We have audited the accompanying financial statements sufficient and appropriate to provide a basis for our audit of Guinness Ghana Breweries Limited set out on pages 23 opinion. to 59. These financial statements comprise the statement of financial position as at 30 June 2016, and the statement Opinion of comprehensive income, statement of changes in equity In our opinion, the accompanying financial statements and statement of cash flows for the year then ended, and give a true and fair view of the financial position of a summary of significant accounting policies and other Guinness Ghana Breweries Limited as at 30 June 2016, explanatory information. and of its financial performance and its cash flows for the year then ended in accordance with International Financial Directors’ responsibility for Reporting Standards and in the manner required by the the financial statements Companies Act, 1963 (Act 179). The directors are responsible for the preparation of financial statements that give a true and fair view in accordance REPORT ON OTHER LEGAL REQUIREMENTS with International Financial Reporting Standards and with The Companies Act, 1963 (Act 179) requires that in the requirements of the Companies Act, 1963 (Act 179) carrying out our audit we consider and report on the and for such internal control, as the directors determine following matters. We confirm that: is necessary to enable the preparation of financial i. we have obtained all the information and statements that are free from material misstatement, explanations which to the best of our knowledge whether due to fraud or error. and belief were necessary for the purposes of our Auditor’s responsibility audit; Our responsibility is to express an opinion on these ii. in our opinion, proper books of account have been financial statements based on our audit. We conducted kept by the Company, so far as appears from our our audit in accordance with International Standards on examination of those books; and Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to iii. the Company’s balance sheet (statement of obtain reasonable assurance about whether the financial financial position) and profit and loss account (part statements are free from material misstatement. of statement of comprehensive income) are in agreement with the books of account. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk PricewaterhouseCoopers (ICAG/F/2016/028) assessments, the auditor considers internal control Chartered Accountants relevant to the entity’s preparation of financial statements Signed by: Michael Asiedu-Antwi (ICAG/P/1138) that give a true and fair view in order to design audit Accra, Ghana procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 26 September, 2016 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.
22 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016 7
2016 2015 Note GH¢’000 GH¢’000 ASSETS Property, plant and equipment 12 374,066 336,091 Intangible assets 13 2,135 2,698 Total non-current assets 376,201 338,789
Inventories 14 86,027 66,370 Trade and other receivables 15 17,404 24,391 Amounts due from related parties 22(ii) 2,635 2,278 Current tax asset 11(ii) 2,572 - Cash and bank balances 16 44,087 48,826 Total current assets 152,725 141,865 Total assets 528,926 480,654
EQUITY AND LIABILITIES Stated capital 19(i) 272,879 96,252 Income surplus account (8,622) (1,070) Total equity 264,257 95,182
Deferred tax liability 11(iv) 9,331 3,522 Obligations under finance lease 18 17,827 8,548 Borrowings 22(iii) 109,110 211,404 Employee benefit obligations 24 1,499 1,481 Total non-current liabilities 137,767 224,955
Bank overdraft 17 26 24,018 Current tax liability 11(ii) - 276 Obligations under finance lease 18 8,505 3,299 Trade and other payables 21 96,547 87,386 Amounts due to related parties 22(i) 21,824 44,770 Provisions 25 - 768 Total current liabilities 126,902 160,517 Total liabilities 264,669 385,472 Total equity and liabilities 528,926 480,654
The financial statements on pages 23 to 59 were approved by the Board of Directors on 20th September, 2016 and signed on their behalf by:
FRANCIS AGBONLAHOR (Managing Director) STEPHEN NIRENSTEIN (Finance Director)
The notes on pages 28 to 59 form an integral part of these financial statements.
23 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016 8
2016 2015 Note GH¢’000 GH¢’000
Revenue 6 566,308 437,348
Cost of sales 26 (389,484) (334,174) Gross profit 176,824 103,174
Advertising and marketing expenses 27 (33,077) (32,029) Administrative expenses 27 (65,044) (59,611) Other expenses 27 (14,139) (28,442) Other income 7 1,225 21,502 Results from operating activities 65,789 4,594
Finance income 10 150 54 Finance costs 10 (67,810) (53,755) Loss before income tax 8 (1,871) (49,107)
Income tax (expense)/ credit 11(i) (5,809) 3,636 Loss for the year (7,680) (45,471)
Other comprehensive income
Items that are not subsequently reclassified to profit or loss: Actuarial gain on defined benefit obligations, net of tax 11(v)(b) 128 34 Other comprehensive income 128 34
Total comprehensive income (loss) for the year (7,552) (45,437)
Basic earnings per share (Ghana cedi per share) 20 (GH¢ 0.036) (GH¢0.215)
Diluted earnings per share (Ghana cedi per share) 20 (GH¢ 0.036) (GH¢0.215)
The notes on pages 28 to 59 form an integral part of these financial statements.
24 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016 9
Income Stated Surplus Capital Account Total Note GH¢’000 GH¢’000 GH¢’000
Year ended 30 June 2016 Balance at 1 July 2015 96,252 (1,070) 95,182 Total comprehensive income Loss for the year - (7,680) (7,680) Other comprehensive income Actuarial gain on defined benefit obligations, net of tax 11(v)(b) - 128 128
Total comprehensive income (loss) for the year - (7,552) (7,552)
Transaction with Owners 19(i) Rights Issue 180,000 - 180,000 Transaction cost arising on rights issue (3,373) - (3,373) 176,627 - 176,627
Balance at 30 June 2016 272,879 (8,622) 264,257
Year ended 30 June 2015 Balance at 1 July 2014 96,252 44,367 140,619 Total comprehensive income Loss for the year - (45,471) (45,471) Other comprehensive income Actuarial gain on defined benefit obligations, net of tax - 34 34
Total comprehensive income for the year - (45,437) (45,437) Balance at 30 June 2015 96,252 (1,070) 95,182
The notes on pages 28 to 59 form an integral part of these financial statements.
25 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016 10
2016 2015 Note GH¢’000 GH¢’000
Cash flows from operating activities Loss before income tax (1,871) (49.107) Adjustments for: - Depreciation 12 49,306 44,006 - Amortisation 13 563 536 - Loss/(profit) disposal of property, plant and equipment 12 989 (21,026) - Impairment loss on trade receivables 2 57 - Finance cost 10 67,810 53,755 - Finance income 10 (150) (54) - Actuarial gain on long service awards (219) 33 - Unrealised exchange difference (1,411) 4,245 115,019 32,445 Changes in: - Inventories (19,657) 12,751 - Trade and other receivables 7,038 9,004 - Trade and other payables 9,920 49,641 - Related party balances (22,688) 9,737 - Employee benefit obligations 403 233 - Provisions (768) (4,944) Cash generated from operating activities 89,267 108,867
Interest paid (12,287) (11,316) Taxes paid 11(ii) (2,885) (2,881) Net cash generated from operating activities 74,095 94,670
Cash flows from investing activities Acquisition of property, plant and equipment (68,859) (83,032) Proceeds from sale of property, plant and equipment 12 378 22,123 Interest received 10 150 54
Net cash used in investing activities (68,331) (60,855)
The notes on pages 28 to 59 form an integral part of these financial statements.
26 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 10
2016 2015 Note GH¢’000 GH¢’000
Cash flows from financing activities Proceeds from right issue of shares 180,000 - Transaction costs on right issue of shares (3,373) - Repayment of bank loans - (2,941) Repayment of finance lease obligations (5,351) (2,509) Repayment of Borrowings 22(iii) (157,770) - Net cash generated from/ (used in) financing activities 13,506 (5,450)
Net increase in cash and cash equivalents 19,270 28,365 Cash and cash equivalents at 1 July 24,808 (6,678) Effect of movements in exchange rates on cash held (17) 3,121
Cash and cash equivalents at 30 June 16 44,061 24,808
The notes on pages 28 to 59 form an integral part of these financial statements.
27 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 11
1. General information IFRS 9, ‘Financial instruments’, addresses the Guinness Ghana Breweries Limited (GGBL) is a classification, measurement and recognition of financial public limited liability company incorporated under the assets and financial liabilities. The complete version of Companies Act, 1963 (Act 179) and listed on the Ghana IFRS 9 was issued in July 2014. It replaces the guidance in Stock Exchange. It is registered and domiciled in Ghana. IAS 39 that relates to the classification and measurement The registered office is located at Industrial Area, Kaasi. of financial instruments. IFRS 9 retains but simplifies the The Company is primarily involved in the manufacture and mixed measurement model and establishes three primary distribution of alcoholic and non-alcoholic beverages and measurement categories for financial assets: amortised other ancillary products. cost, fair value through OCI and fair value through P&L. The basis of classification depends on the entity’s business 2. Summary of significant model and the contractual cash flow characteristics of accounting policies the financial asset. Investments in equity instruments are The principal accounting policies applied in the required to be measured at fair value through profit or preparation of these financial statements are set out loss with the irrevocable option at inception to present below. These policies have been consistently applied to changes in fair value in OCI not recycling. There is now all years presented, unless otherwise stated. a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification a) Basis of preparation and measurement except for the recognition of changes The financial statements are prepared on the historical in own credit risk in other comprehensive income, for cost basis except for defined benefit obligations which are liabilities designated at fair value through profit or loss. measured at present value of obligation using discount rate of long dated government bond at the reporting date. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It The financial statements have been prepared in requires an economic relationship between the hedged accordance with International Financial Reporting item and hedging instrument and for the ‘hedged ratio’ Standards (IFRS) and the interpretations issued by the to be the same as the one management actually use IFRS Interpretation Committee (IFRS IC) applicable to for risk management purposes. Contemporaneous companies reporting under IFRS and the requirements of documentation is still required but is different to that the Companies Act 1963, (Act 179). currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January i. New and amended standards adopted by the 2018. Early adoption is permitted. The Company is yet to company assess IFRS 9’s full impact. A number of new and amended standards have become effective for the period beginning 1 July 2015. The IFRS 15, ‘Revenue from contracts with customers’ deals directors have assessed the effects of the new and with revenue recognition and establishes principles amended standards and have determined that the new for reporting useful information to users of financial and amended standards do not have any material impact statements about the nature, amount, timing and on the company’s financial statements. uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised ii. New standards, amendments and when a customer obtains control of a good or service interpretations not yet adopted and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces Certain new accounting standards and interpretations IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ have been published that are not mandatory for 30 June and related interpretations. The standard is effective for 2016 reporting periods and have not been early adopted annual periods beginning on or after 1 January 2017 and by the company. Those that are likely to have an impact earlier application is permitted. The Company is assessing on the Company’s financial statements include: the impact of IFRS 15.
28 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
2. Summary of significant accounting policies (continued)
(a) Basis of preparation (continued) The Company derecognises a financial asset when the contractual rights to the cashflows from the asset expire, (ii) New standards and interpretations not yet or it transfers the rights to receive the contractual cash adopted (continued) flows in a transaction in which substantially all of the There are no other standards that are not yet effective risks and rewards of ownership of the financial asset are that would be expected to have a material impact on the transferred, or it neither transfers nor retains substantially Company in the current or future reporting periods and on all of the risk and rewards of ownership and does not foreseeable future transactions retain control over the transferred asset. Any interest in such derecognized financial assets that is created or b) Foreign currency translation retained by the Company is recognized as a separate asset or liability. (i) Functional and presentation currency Items included in the financial statements are measured The Company derecognises a financial liability when its using the currency of the primary economic environment contractual obligations are discharged or cancelled, or in which the entity operates (‘the functional currency’). expire. The financial statements are presented in Ghana Cedi (“GH¢”) which is the Company’s functional currency. Financial assets and financial liabilities are offset and the net amount presented in the statement of financial (ii) Transactions and balances position, when and only when, the Company has the legal right to offset the amounts and intends either to settle Foreign currency transactions are translated into the them on a net basis or to realise the asset and settle the functional currency using the exchange rates prevailing at liability simultaneously. the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions (ii) Non-derivative financial assets – measurement and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign Loans and receivables currencies are recognised in profit or loss. Foreign Loans and receivables comprise of bank balances, trade exchange gains and losses that relate to borrowings and and other receivables and amount due from related cash and cash equivalents are presented in the income parties. statement within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the Loans and receivables are initially recognised at fair income statement within ‘other net income’ or ‘other net value plus any directly attributable transaction costs. expenses’. Subsequent to initial recognition, they are measured at amortised cost using the effective interest rate method. (c) Financial instruments Short-term receivables with no stated interest rate are measured at the original invoice amount if the effect of The Company classifies non-derivative financial assets discounting is immaterial. into the following categories: Loans and other receivables and classifies non–derivative financial liabilities into the (iii) Non-derivative financial liabilities – other financial liabilities category. measurement
(i) Non-derivative financial assets and liabilities – Other financial liabilities comprise of bank overdraft, recognition and derecognition obligation under finance lease, amount due to related parties and trade and other payables. The Company initially recognises loans and receivables on the date when they are originated. All other financial Non–derivative financial liabilities are initially recognized at assets and financial liabilities are initially recognized on the fair values less any directly attributable transaction costs. trade date. Subsequent to initial recognition, these liabilities are measured at amoritised cost using the effective interest rate method.
29 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
2. Summary of significant accounting policies (continued)
d) Stated capital reversed if the reversal can be related objectively to an Proceeds from issue of ordinary shares are classified as event occurring after the impairment loss was recognised. equity. (ii) Non-financial assets Incremental costs directly attributable to the issue of The carrying amounts of the Company’s non-financial ordinary shares, net of any tax effects are recognised as a assets other than deferred tax assets are reviewed at deduction from equity. each reporting date to determine whether there is any indication of impairment. If any such indication exists (e) Impairment then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of (i) Financial assets an asset or its cash generating unit (CGU) exceeds its A financial asset not classified at fair value through profit recoverable amount. or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. The recoverable amount is the greater of its value in use and its fair value less cost to sell. In assessing value in Objective evidence that financial assets are impaired use, the estimated future cash flows are discounted to includes default or delinquency by a debtor, restructuring their present value using a pre-tax discount rate that of an amount due to the Company on terms that the reflects current market assessments of the time value of Company would not consider otherwise, indications that money and the risk specific to the asset. a debtor will enter bankruptcy, adverse changes in the payment status of borrowers, economic conditions that A previously recognised impairment loss is reversed correlate with defaults. where there has been a change in circumstances or in the basis of estimation used to determine the recoverable An impairment loss in respect of a financial asset value, but only to the extent that the asset’s net carrying measured at amortised cost is calculated as the difference amount does not exceed the carrying amount of the asset between its carrying amount, and the present value of that would have been determined, net of depreciation or the estimated future cash flows discounted at the original amortisation, if no impairment loss had been recognised. effective interest rate.
The Company considers evidence of impairment of these (f) Leases assets at both an individual asset and a collective level. (i) Classification All individually significant assets are individually assessed Leases are classified as finance leases whenever the for impairment. Those found not to be impaired are then terms of the lease transfer substantially all the risks and collectively assessed for any impairment that has been rewards of ownership to the lessee. incurred but not yet individually identified. Assets that are not individually significant are collectively assessed Assets held under finance leases are stated as assets of for impairment. Collective assessment is carried out by the Company at the lower of their fair value and the present grouping together assets with similar risk characteristics. value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment In assessing collective impairment, the Company uses losses. The corresponding liability to the lessor is included historical information on the timing of recoveries and in the statement of financial position as a finance lease the amount of loss incurred, and makes an adjustments obligation. Finance costs are charged to profit or loss over if current economic and credit conditions are such that the term of the relevant lease so as to produce a constant the actual losses are likely to be greater or lesser than periodic interest charge on the remaining balance of the suggested historical trends. obligations for each accounting period. All impairment losses are recognised in profit or loss and Leases where significant portions of the risks and rewards reflected in an allowance account. Interest on the impaired of ownership are retained by the lessor are classified as asset continues to be recognised. An impairment loss is operating leases.
30 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
2. Summary of significant accounting policies (continued)
(f) Leases (continued) (iii) Depreciation (ii) Lease payments Depreciation is recognised in profit or loss on a straight- line basis over the estimated useful lives of each part of Payments made under operating leases are recognised an item of property, plant and equipment. Leased assets in profit or loss on a straight-line basis over the term of are depreciated over the shorter of the lease term and the lease. When an operating lease is terminated before their useful lives. Leaseholds are depreciated over the the lease period has expired, any payment required to be unexpired period of the lease. made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. The estimated useful lives for the current and comparative periods are as follows: Minimum lease payments made under finance leases are apportioned between the finance expense and as over period of lease up to reduction of the outstanding lease liability. The finance Buildings expense is allocated to each period during the lease term 50 years so as to produce a constant periodic rate of interest on the remaining balance of the liability. Plant and machinery 8 years to 25 years
Motor vehicles 3 years to 5 years (g) Property, plant and equipment
(i) Recognition and measurement Furniture and equipment 3 years to 8 years Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment Bottles and crates 5 years to 10 years losses. Depreciation methods, useful lives and residual values are Cost includes expenditures that are directly attributable reassessed at each reporting date. to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is Gains and losses on disposal of property, plant and capitalised as part of that equipment. equipment are determined by comparing proceeds from disposal with the carrying amounts of property, plant and When parts of an item of property, plant and equipment equipment and are recognised in profit or loss. have different useful lives, they are accounted for as separate items (major components). (iv) Capital work in progress Property, plant and equipment under construction is (ii) Subsequent costs stated at initial cost and depreciated from the date the The cost of replacing part of an item of property, plant asset is made available for use over its estimated useful and equipment is recognised in the carrying amount of life. Assets are transferred from capital work in progress to the item if it is probable that the future economic benefits an appropriate category of property, plant and equipment embodied within the part will flow to the Company and when commissioned and ready for its intended use. its cost can be measured reliably. The costs of the day- to-day servicing of property, plant and equipment are recognised in profit or loss, as incurred. (h) Intangible assets (i) Software Spare parts, stand-by and servicing equipment held by the Company generally are classified as inventories. Software acquired is stated at cost less accumulated However, if major spare parts and stand-by equipment amortisation and accumulated impairment losses. are expected to be used for more than one period or can Subsequent expenditure on software assets is capitalised be used only in connection with an item of property, plant only when it increases the future economic benefits and equipment, then they are classified as property, plant embodied in the specific asset to which it relates. All other and equipment. expenditure is expensed as incurred.
31 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
2. Summary of significant accounting policies (continued)
(h) Intangible assets (continued) in the financial statements. The pension liabilities and Amortisation is recognised in profit or loss on a straight obligations, however, rest with SSNIT. line basis over the estimated useful life of the software from the date it is available for use. The estimated useful (iv) Provident Fund life for software is 5 to 12 years. Amortisation methods, The Company has a provident fund scheme for staff useful lives and residual values are reviewed at each to which the Company contributes 12% and 15% of reporting date and adjusted if appropriate. the basic salaries of junior and senior staff respectively. Obligations under the plan are limited to the relevant contributions, which are charged to profit or loss as and (i) Inventories when they fall due. Inventories are measured at lower of cost and net realisable value using the weighted average cost principle. The cost (v) Defined benefit plans of inventories includes expenditure incurred in acquiring A defined benefit plan is a post-employment benefit plan inventories and bringing them to their existing location other than a defined contribution plan. The liabilities of and condition. Net realisable value is the estimated selling the Company arising from defined benefit obligations price in the ordinary course of business, less estimated and related current service costs are determined on an selling expenses. Inventories are stated less allowance for actuarial basis using the projected unit of credit method. obsolescence and slow moving items. The Company uses this method to determine the present value of defined benefit obligations, related current service (j) Employee benefits costs and, where applicable, past service costs. Actuarial (i) Short-term benefits gains and losses, which arise mainly from changes in actuarial assumptions and differences between actuarial Short-term employee benefit obligations are measured on assumptions and what actually occurred, are recognised an undiscounted basis and are expensed as the related immediately in other comprehensive income. service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus The Company determines the net interest expense on or profit-sharing plans if the Company has a present legal the net defined benefits liability for the period by applying or constructive obligation to pay this amount as a result of the discount rate used to measure the defined benefit past service provided by the employee and the obligation obligation at the beginning of the annual period to the then can be estimated reliably. – defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a (ii) Defined contribution plans result of contributions and benefits payments. Net interest A defined contribution plan is a post-employment benefit expense and other expenses related to defined benefit plan under which an entity pays fixed contributions into plans are recognised in profit or loss. a separate entity and will have no legal or constructive obligation to pay further contributions if the fund does not (vi) Other long-term benefit hold sufficient assets to pay all employee benefits relating The Company’s obligation in respect of long-term to employee service in the current and prior periods. employee benefits other than pension plans is the amount Obligations for contributions to defined contribution of future benefit that employees have earned in return for schemes are recognised as an expense in profit or loss in their services in the current and prior periods; that benefit periods during which services are rendered by employees. is discounted to determine its present value.
(iii) Social Security Contributions The discount rate used is the rate on long dated Under a national pension scheme, the Company Government of Ghana bonds. The calculation is contributes 13% of employee’s basic salary to the performed using the projected unit credit method. Any Social Security and National Insurance Trust (SSNIT) for actuarial gains and losses are recognised in profit or loss. employee pensions. The Company’s obligation is limited to the relevant contributions, which have been recognised
32 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
2. Summary of significant accounting policies (continued)
(k) Revenue The capitalisation of borrowing costs commences when:
Revenue - Sale of goods - expenditures for the asset have occurred; Revenue from the sale of goods is measured at the fair value of consideration received or receivable, net - borrowing costs have been incurred, and of returns, trade discounts, taxes and volume rebates. - activities that are necessary to prepare the asset Revenue is recognised when significant risks and rewards for its intended use or sale are in progress. of ownership have been transferred to the buyer, there is no continuing management involvement in the goods, Capitalisation is suspended during extended periods in recovery of the consideration is probable, associated which active development is interrupted. costs and possible return of goods can be estimated Capitalisation ceases when substantially all the activities reliably and the amount of revenue can be measured necessary to prepare the qualifying asset for its intended reliably. Transfer of risks and rewards occurs when the use or sale are complete. goods are delivered to the customer.
No revenue is recognised if recovery of the consideration (n) Taxation is not considered probable or the revenue and associated Tax expense comprises current and deferred tax. The costs cannot be measured reliably. Company provides for income taxes at current tax rates on the taxable profits of the Company. (l) Finance income and finance costs Income tax is recognised in profit or loss except to the Finance income comprises interest income on funds extent that it relates to items recognised directly in equity invested or held in bank accounts. Interest income is or other comprehensive income. recognised in profit or loss using the effective interest method. Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted Finance costs comprise interest expense on borrowings. or substantively enacted at the reporting date, and any Borrowing costs that are not directly attributable to the adjustment to tax payable in respect of previous years. acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective Deferred tax is recognised in respect of temporary interest method. differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts (m) Borrowing costs used for taxation purposes. Deferred tax is not recognised Borrowing costs that are directly attributable to the for temporary differences on the initial recognition of acquisition, construction or production of a qualifying assets and liabilities in a transaction that is not a business asset are capitalised as part of the cost of that asset until combination and that affects neither accounting nor such time as the asset is ready for its intended use. taxable profit or loss.
The amount of borrowing costs eligible for capitalisation is Deferred tax is measured at the tax rates that are expected determined as follows: to be applied to the temporary differences when they reverse, based on the laws that have been enacted or - Actual borrowing costs on funds specifically substantively enacted by the reporting date. borrowed for the purpose of obtaining a qualifying asset less any temporary investment of those A deferred tax asset is recognised for unused tax losses, borrowings. tax credits and deductible temporary differences only to the extent that it is probable that future taxable profits - Weighted average of the borrowing costs will be available against which the asset can be utilised. applicable to the entity on funds generally Deferred tax assets are reviewed at each reporting date borrowed for the purpose of obtaining a qualifying and are reduced to the extent that it is no longer probable asset. The borrowing costs capitalised do not that the related tax benefit will be realised. exceed the total borrowing costs incurred.
33 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
2. Summary of significant accounting policies (continued)
(n) Taxation (continued) 3. Critical accounting estimates Deferred tax assets and liabilities are offset if there is a and assumptions legally enforceable right to offset current tax liabilities and In preparing these financial statements, management assets, and they relate to taxes levied by the same tax has made judgements, estimates and assumptions that authority on the same taxable entity, or on different tax affect the application of the Company’s policies and entities, but they intend to settle current tax liabilities and the reported amounts of assets, liabilities, income and assets on a net basis or their tax assets and liabilities will expenses. Actual results may differ from these estimates. be realised simultaneously. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are (o) Dividend recognised prospectively. Dividend payable is recognised as a liability in the period in which they are declared and the shareholders right to a) Useful lives of property, plant and equipment receive payment has been established. Critical estimates are made by the directors in determining depreciation rates for property, plant and equipment. The (p) Provisions rates used are set out in note 12. A provision is recognised when the Company has a present legal or constructive obligation as a result of a b) Income taxes past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions Significant judgement is required in determining the are determined by discounting expected future cash flows provision for income taxes. There are many transactions at pre-tax rates that reflect current market assessments and calculations for which the ultimate tax determination of the time value of money and, where appropriate, risks is uncertain during the course of business. The Company specific to the liability. The unwinding of the discount is recognises liabilities for anticipated tax audit issues based recognised as finance costs. on estimates of whether additional taxes will be due. Where the final outcome of these matters are different from the amounts that were initially recorded, such differences q) Segment reporting will impact the current income tax and deferred income Operating segments reflect the Company’s management tax provisions in the period in which such determination structure and the way financial information is regularly is made. reviewed by the Chief Operating Decision Maker (CODM). Operating segments are reported in a manner consistent c) Impairment of financial assets with internal reporting provided to the CODM. Financial assets carried at amortised cost. The Company operates as one business unit dealing in spirits, alcoholic and non-alcoholic beverages. The Company assesses, at each reporting period, whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset (r) Earnings per share or group of financial assets is impaired and impairment The Company presents basic and diluted earnings per losses are incurred only if there is objective evidence of share (EPS) data for its ordinary shares. Basic EPS is impairment as a result of one or more events that have calculated by dividing the profit or loss attributable to occurred after the initial recognition of the asset (a ‘loss ordinary shareholders of the Company by the weighted event’) and that loss event (or events) has an impact on average number of ordinary shares outstanding during the estimated future cash flows of the financial asset or the period. Diluted EPS is determined by adjusting the group of financial assets that can be reliably estimated. profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding Objective evidence that a financial asset or group of for the effects of all dilutive potential ordinary shares. assets is impaired includes observable data that comes to the attention of the Company about the following events:
34 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
3. Critical accounting estimates and assumptions (continued) c) Impairment of financial assets (continued) Estimation of defined benefit obligations • significant financial difficulty of the debtor; The present value of employee benefit obligations depends on a number of factors that are determined on • a breach of contract, such as a default or an actuarial basis using a number of assumptions. Any delinquency in payments; changes in these assumptions will impact the carrying • it becoming probable that the issuer or debtor will amount of the defined benefit obligations. enter bankruptcy or other financial reorganisation; Additional information is disclosed in note 24. • observable data indicating that there is a 4. Determination of fair values measurable decrease in the estimated future cash flow from a group of financial assets since Fair values have been determined for measurement and/ the initial recognition of those assets, although or disclosure purposes based on the following methods. the decrease cannot yet be identified with the individual financial assets in the portfolio, (i) Trade and other receivables including: The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted (i) adverse changes in the payment status of at the market rate of interest at the measurement date. borrowers in the portfolio; and Short-term receivables with no stated interest rate are measured at the original invoice amount if the effect of (ii) national or local economic conditions that discounting is immaterial. Fair value is determined at initial correlate with defaults on the assets in the recognition and, for disclosure purposes, at each annual portfolio. reporting date. The Company first assesses whether objective evidence of impairment exists individually for financial assets that (ii) Cash and cash equivalents are individually significant. The fair value of cash and cash equivalents approximate their carrying values. If the Company determines that no objective evidence of impairment exists for an individually assessed financial (iii) Non-derivative financial liabilities asset, whether significant or not, it includes the asset Other non-derivative financial liabilities are measured at fair in a group of financial assets with similar credit risk value, at initial recognition and for disclosure purposes, at characteristics and collectively assesses them for each annual reporting date. Fair value is calculated based impairment. on the present value of future principal and interest cash If there is objective evidence that an impairment loss has flows, discounted at the market rate of interest at the been incurred, the amount of the loss is measured as the measurement date. difference between the assets’ carrying amount and the present value of estimated future cash flows (excluding 4.1 Measurements of fair values future credit losses that have been incurred). The carrying A number of the Company’s accounting policies and amount of the asset is reduced and the amount of the disclosures require the determination of fair value, for loss is recognised in profit or loss. both financial and non-financial assets and liabilities. The Company regularly reviews significant unobservable If in a subsequent period, the amount of the impairment inputs and valuation adjustments. loss decreases and the decrease can be related objectively to an event occurring after the impairment When measuring the fair value of an asset or liability, was recognised, the previously recognised impairment the Company uses market observable data as far as loss is reversed. The amount of the reversal is recognised possible. Fair values are categorised into different levels in profit or loss. in fair value hierarchy based on the inputs used in the valuation techniques as follows:
35 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
4.1 Measurements of fair values (continued)
• Level 1: quoted prices (unadjusted) in active Further information about the assumptions made in markets for identical assets or liabilities. determining fair values is included in Note 28 financial instrument – fair values and risk management. • Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or 5. OPERATING SEGMENT liability, either directly (i.e. as prices) or indirectly Management has determined the operating segments (i.e. derived from prices). based on the reports reviewed by the CODM that are • Level 3: inputs for the asset and liability that used to make strategic decisions. The CODM considers are not based on observable market data the business from a product perspective and assesses (unobservable inputs). the performance of the operating segments based on net sales value. The accounting policies of the operating If inputs used to measure the fair value of an asset or segments are the same. The Company’s reporting a liability might be categorised in different levels of the segments are based on products, namely spirits, alcoholic fair value hierarchy, then the fair value measurement is and non-alcoholic beverages. categorised in its entirety in the same level of the fair value Costs relating to reporting segments cannot be directly hierarchy as the lowest level input that is significant to the charged to product categories. entire measurement. The segment information provided to the CODM for the reportable segments are as follows:
Non-alcoholic Alcoholic beverages Spirits Total beverages 2016 2015 2016 2015 2016 2015 2016 2015 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 External revenue 300,052 239,764 191,495 170,981 74,761 26,603 566,308 437,348 Depreciation and ------(49,869) (44,542) amortisation Operating cost ------(450,650) (388,212)
Operating profit ------65,789 4,594 Finance income ------150 54 Finance cost ------(67,810) (53,755)
Loss before tax ------(1,871) (49,107) Taxation ------(5,809) 3,636
Net loss for the year ------(7,680) (45,471)
Non-current assets 376,201 338,789
No measure of total assets and liabilities are reviewed by the Board. There are no revenues and non-current assets from outside Ghana. No major customer identified during the year.
36 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
6. REVENUE 2016 2015 GH¢’000 GH¢’000 Gross sales value 818,583 615,754
Excise duty (111,728) (72,618) Value Added Tax (122,878) (91,856)
Taxes collected for government (234,606) (164,474)
Volume discounts (17,669) (13,932)
Net sales value 566,308 437,348
7. OTHER INCOME 2016 2015 GH¢’000 GH¢’000 Profit on disposal of property, plant and equipment - 21,026 Income from assignment of leasehold interest in land - 424 Sundry income 1,225 52 1,225 21,502
8. LOSS BEFORE INCOME TAX Loss before income tax is stated after charging: 2016 2015 GH¢’000 GH¢’000 Personnel costs (Note 9) 83,842 79,252 Directors’ remuneration and expenses 3,612 3,727 Auditor’s remuneration 145 135 Depreciation (Note 12(d)) 49,306 44,006 Amortisation (Note 13) 563 536 Net exchange differences 481 14,816
37 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
9. PERSONNEL COSTS 2016 2015 GH¢’000 GH¢’000 Wages and salaries 55,647 55,351 Social security contributions 2,866 2,841 Contributions to provident fund 2,815 2,569 Defined benefit plan 144 147 Long service award 359 326 Other staff expenses 22,011 18,018 83,842 79,252
The total number of staff employed by the Company at the reporting date was 551 (2015: 569).
10. FINANCE INCOME AND COSTS 2016 2015 GH¢’000 GH¢’000 Finance income – loans and receivables Interest on savings (150) (54)
Finance costs – financial liabilities measured at amortised cost Interest on intercompany loan 55,475 45,183 Interest on bank loans 7,646 5,929 Finance lease interest 4,455 2,506 Other finance cost 234 137 67,810 53,755
11. TAXATION 2016 2015 GH¢’000 GH¢’000 (i) Income tax expense Current tax expense (Note 11(ii)) 37 2,954 Deferred tax expense (Note 11(v)(a)) 5,772 (6,590) 5,809 (3,636)
38 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
11. TAXATION (continued) (ii) Current income tax Balance Charge for Balance at 1/7/15 Payments the year at 30/6/16 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Year ended 30 June 2016 Up to 2014 (2,165) - - (2,165) 2015 (436) - - (436) 2016 - (8) 37 29 (2,601) (8) 37 (2,572) Capital gains tax 2,877 (2,877) - - 276 (2,885) 37 (2,572)
Year ended 30 June 2015 Balance Charge for Balance at 1/7/14 Payments the year at 30/6/15 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Corporate tax Up to 2013 (305) - - (305) 2014 (1,860) - - (1,860) 2015 - (449) 13 (436) (2,165) (449) 13 (2,601) Capital gains tax 2,368 (2,432) 2,941 2,877 203 (2,881) 2,954 (276)
Tax liabilities up to 2013 year of assessment have been agreed with the tax authorities. The remaining tax position is, however subject to agreement with the tax authorities.
(iii) Reconciliation of effective tax rate 2016 2015 GH¢’000 GH¢’000 Loss before income tax (1,871) (49,107) Tax calculated using statutory income tax rate of 25% (2015: 25%) (468) (12,277) Expenses not deductible for tax purpose 10,260 8,606 Items taxed at different rate 208 4,325 Items not subject to tax (3,691) (4,290) Recognition of previously unrecognized deferred taxes on leases 403 - Adjustment in respect of prior periods (903) - Income tax expense 5,809 (3,636) Effective tax rate (311%) 7%
39 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
11. TAXATION (continued)
(iv) Recognised deferred tax assets and liabilities
At Charge to Recognised At 30 Deferred Deferred tax 1 July profit or in OCI June tax assets liabilities (Net) loss (Net) GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000
Year ended 30 June 2016 Property, plant and equipment 26,198 319 - 26,517 - 26,517 Provision for doubtful debts (292) 61 - (231) (231) - Inventory provisions (654) 496 - (158) (158) - Provision for pension (338) 5 - (333) (333) - Provision for restructuring (126) 126 - - - - Unrealised exchange differences (1,358) (406) - (1,764) (1,764) - Unutilized capital allowance (19,996) 5,171 - (14,825) (14,825) - End-of-service benefits 88 - 37 125 - 125
Net tax liabilities/ (assets) 3,522 5,772 37 9,331 (17,311) 26,642
Year ended 30 June 2015 Property, plant and equipment 22,797 3,401 - 26,198 - 26,198 Provision for doubtful debts (261) (31) - (292) (292) - Inventory provisions (30) (624) - (654) (654) - Provision for pension (269) (69) - (338) (338) - Provision for restructuring (904) 778 - (126) (126) - Unrealised exchange differences (1,438) 80 - (1,358) (1,358) - Unutilized capital allowance (9,871) (10,125) - (19,996) (19,996) - End-of-service benefits 78 - 10 88 - 88
Net tax liabilities/ (assets) 10,102 (6,590) 10 3,522 (22,764) 26,286
(v) Deferred taxation 2016 2015 GH¢’000 GH¢’000 (a) Movement in deferred tax balances Balance at 1 July 3,522 10,102 Charge / (credit) for the year 5,772 (6,590) Deferred tax on actuarial gain in OCI 37 10 Balance at 30 June 9,331 3,522
40 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
11. TAXATION (continued)
(b) Amount recognised in Other Comprehensive Income 2016 2015 Before Tax Net of Before Tax Net of tax benefit tax tax benefit tax GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Measurement of defined benefit liability 165 (37) 128 44 (10) 34
12. PROPERTY, PLANT AND EQUIPMENT (a) Movement in carrying amount
Year ended 30 June 2016 Capital Plant & Motor Furniture & Bottles & Work in- Buildings Machinery Vehicles Equipment Crates Progress Total GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Cost Balance at 1 July 27,030 262,902 15,112 4,993 169,236 41,394 520,667 Additions - 487 3,971 17 - 84,173 88,648 Disposals - (6,497) (1,131) (2) - - (7,630) Transfers 3,646 21,099 - 1,088 33,598 (59,431) -
Balance at 30 June 30,676 277,991 17,952 6,096 202,834 66,136 601,685
Accumulated Deprecation Balance at 1 July 2,825 86,188 7,846 3,029 84,688 - 184,576 Charge for the year 750 16,936 2,988 818 27,814 - 49,306 Released on - (5,213) (1,048) (2) - - (6,263) disposals
Balance at 30 June 3,575 97,911 9,786 3,845 112,502 - 227,619
Net book value Balance at 30 June 27,101 180,080 8,166 2,251 90,332 66,136 374,066
41 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
12. PROPERTY, PLANT AND EQUIPMENT (continued)
Year ended 30 June 2015 Capital Plant & Motor Furniture & Bottles & Work in- Buildings Machinery Vehicles Equipment Crates Progress Total GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Cost Balance at 1 July 19,024 242,576 12,875 4,692 144,775 12,825 436,767 Additions 4,098 3,369 107 - 82,147 89,721 Disposals (1,438) (2,297) (1,132) - (954) - (5,821) Transfers 9,444 18,525 - 194 25,415 (53,578) -
Balance at 30 June 27,030 262,902 15,112 4,993 169,236 41,394 520,667
Accumulated depreciation Balance at 1 July 2,930 72,200 6,142 2,331 61,691 - 145,294 Charge for the year 711 15,978 2,762 698 23,857 - 44,006 Released on (816) (1,990) (1,058) - (860) - (4,724) disposals
Balance at 30 June 2,825 86,188 7,846 3,029 84,688 - 184,576
Net book Value Balance at 30 June 24,205 176,714 7,266 1,964 84,548 41,394 336,091
(b) Leased plant and equipment (c) Security The Company has a lease arrangement with Stanbic As at 30 June 2016, motor vehicles and coolers acquired Bank Ghana Limited and Societe Generale Ghana under lease arrangements were held as security for the Limited to finance the purchase of motor vehicles and finance lease obligation to Stanbic Bank Ghana Limited coolers for operational purposes. At 30 June 2016, the and Societe Generale Ghana Limited. net book value of leased assets was GH¢28.1 million (2015: GH¢11.3 million).
During the year, the Company acquired motor vehicles and equipment under finance lease of GH¢19.7 million (2015: GH¢6.7 million).
42 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
12. PROPERTY, PLANT AND EQUIPMENT (continued) Disposal of property, plant and equipment 2016 2015 GH¢’000 GH¢’000 Cost 7,630 5,821 Accumulated depreciation (6,263) (4,724) Net book value 1,367 1,097 Proceeds on disposal (378) (22,123) Loss/ (Profit) on disposal 989 (21,026)
(d) Depreciation expense Depreciation has been charged in the statement of comprehensive income as follows: 2016 2015 GH¢’000 GH¢’000 Cost of sales (Note 26) 44,995 40,364 Other expenses (Note 27(iii)) 2,990 2,729 Advertising and marketing expenses (Note 27(i)) 1,321 913 49,306 44,006
13. INTANGIBLE ASSETS (a) Reconciliation of carrying amount 2016 2015 GH¢’000 GH¢’000 Cost Balance at 1 July 11,279 10,743 Additions - 536 Balance at 30 June 11,279 11,279
Amortisation Balance at 1 July 8,581 8,045 Charge for the year 563 536 Balance at 30 June 9,144 8,581 Net book value Balance at 30 June 2,135 2,698
Amortisation of intangible assets is recognised in other expenses (Note 27 (iii)).
(b) Security As at 30 June 2016, there were no restrictions on title for intangible assets and no assets had been pledged as security.
43 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
14. INVENTORIES 2016 2015 GH¢’000 GH¢’000 Raw and packaging materials 45,124 28,831 Work-in-progress 4,196 3,154 Finished products 18,278 13,633 Engineering spares and other consumables 16,562 15,405 Goods in transit 1,867 5,347 86,027 66,370
As at 30 June 2016, there were no inventories pledged as security (2015: Nil).
15. TRADE AND OTHER RECEIVABLES 2016 2015 GH¢’000 GH¢’000 Trade receivables 13,402 15,988 Other receivables 2,080 7,368 Staff debtors 203 330 Prepayments 1,719 705 17,404 24,391
The maximum indebtedness from staff did not exceed GH¢329,846 for the year (2015: GH¢423,610).
16. CASH AND CASH EQUIVALENTS 2016 2015 GH¢’000 GH¢’000 Cash at bank balances 44,087 48,826 Bank overdraft (Note 17) (26) (24,018) Cash and cash equivalents in the statement of cash flows 44,061 24,808
There were no restrictions on the Company’s bank balances at the year end (2015: Nil).
17. BANK OVERDRAFT 2016 2015 GH¢’000 GH¢’000 Guaranty Trust Bank (Ghana) Limited 3 3,483 Barclays Bank of Ghana Limited - 10,123 Societe Generale Ghana Limited 6 3,265 Stanbic Bank Ghana Limited 17 7,147 26 24,018
44 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
17. BANK OVERDRAFT (continued) Societe Generale Ghana Limited The terms of the overdrafts are as follows: The overdraft facility of GH¢15 million is to augment working capital. Interest on this facility is at 25% per Guaranty Trust Bank (Ghana) Limited annum fixed over tenor. A penal interest of 6% per annum The overdraft facility of GH¢10 million is to pay local and above the interest rate applies on due but unpaid sums. foreign suppliers of raw materials as well as settlement The facility is secured by a letter of comfort from the parent of royalties and technical service fees. Interest accrues company Diageo Plc. The facility will mature in July 2017. at 26% per annum and is subject to review in line with prevailing market conditions. This facility is supported by Standard Chartered Bank Ghana Limited a letter of comfort from Diageo Highlands B.V. The facility The overdraft facility of GH¢20 million is to augment expires in March 2017. working capital requirements. Interest on this facility was at 26% per annum subject to change in line with prevailing Barclays Bank of Ghana Limited market conditions. The facility is unsecured. The overdraft facility of GH¢15 million is to supplement working capital in meeting operational expenses. Interest Stanbic Bank Ghana Limited on this facility is at Barclays Bank Base rate plus 4.57%. The overdraft facility of GH¢10 million is to augment The facility is unsecured. working capital requirements. Interest on this facility is at a flat rate of 26%. This facility is supported by a letter of comfort from Diageo Highlands B.V. The facility expires in February 2017.
18. OBLIGATIONS UNDER FINANCE LEASE Present Present Future value of Future value of minimum minimum minimum minimum lease Unearned lease lease Unearned lease payments interest payments payments interest payments 2016 2016 2016 2015 2015 2015 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Less than one year 14,488 5,983 8,505 6,423 3,124 3,299 Between two and five 25,166 7,339 17,827 12,210 3,662 8,548 years 39,654 13,322 26,332 18,633 6,786 11,847
The Company entered into finance lease arrangements coolers. Both leases are for a period of 4 years. The lease with Stanbic Bank Ghana Limited and Societe Generale arrangements attract interest at base rate plus 1.57% per Ghana Limited. The purpose of Stanbic facility was to annum for Stanbic Bank Limited and 25% per annum for finance the purchase of motor vehicles and coolers whilst Societe Generale. Total principal lease payments made in Societe Generale facility was to finance purchase of the year totaled GH¢5.2 million (2015: GH¢2.5 million).
45 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
19. CAPITAL AND RESERVES (i) Stated Capital (a) Ordinary shares Number of Shares Proceeds 2016 2015 2016 2015 GH¢’000 GH¢’000 Authorised: (number in million) Ordinary shares of no par value 400 400
Issued and fully paid: (number in million) For cash 179 83 253,678 77,051 For consideration other than cash 35 35 18,926 18,926 Transfer from retained earnings 93 93 275 275 307 211 272,879 96,252
The holders of ordinary shares are entitled to receive dividend as declared from time to time and are entitled to one vote per share at meetings of the Company.
2016 2015 Movement in ordinary shares Number GH¢’000 Number GH¢’000 Number GH¢’000 (in millions) (in millions) Balance at 1/7/15 211 96,252 211 96,252 Rights issue 96 180,000 - - Less transaction cost arising on rights issues - (3,373) - - Balance at 30/06/16 307 272,879 211 96,252
(b) Shares in treasury (c) Rights issue There is no unpaid liability on any share and there are On 6th May 2016, the company invited its shareholders no calls or instalments unpaid. There are no treasury to subscribe to a rights issue of 96,256,685 ordinary shares. shares on the basis of 1 share for every 2.1920 ordinary shares held, with such shares to be issued on, and rank for dividends after 6th May 2016. The issue was fully subscribed. The purpose of the rights issue was to repay borrowings from Diageo Plc.
46 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
20. EARNINGS PER SHARE Basic and diluted earnings per share The calculation of basic and diluted earnings per share at 30 June 2016 was based on profits attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding.
2016 2015 GH¢’000 GH¢’000 Loss attributable to ordinary shareholders (7,680) (45,471) Weighted average number of ordinary shares 213,712 211,338
At the reporting date, the basic and diluted earnings per share were the same. There were no outstanding shares with potential dilutive effect on the weighted average number of ordinary shares in issue.
21. TRADE AND OTHER PAYABLES 2016 2015 GH¢’000 GH¢’000 Trade payables 46,905 47,667 Non-trade payables and accrued expenses 49,642 39,719 96,547 87,386
22. RELATED PARTY TRANSACTIONS a. The Company is a subsidiary of Diageo Highlands b. Purchase of raw materials, finished goods BV and Diageo Ghanaian Holdings BV, both and plant and equipment companies registered in the Netherlands. The Ultimate Parent Company is Diageo Plc, a Raw materials, finished goods, plant and Company incorporated in the United Kingdom. equipment purchased from related parties during The Company is affiliated with other companies the year as follows: in the group through common control and directorship.
2016 2015 GH¢’000 GH¢’000 Diageo Ireland 16,087 36,574 Guinness Nigeria 39,619 30,533 Diageo Brands BV 15,593 13,497 Kenya Breweries - 436 Diageo Great Britain 19,248 24,225 90,547 105,265
c. Included in profit or loss is an amount of GH¢17.3 d. Finance cost of GH¢55.5 million (2015: million (2015: GH¢8.6 million) in respect of GH¢45.2million) was charged to profit or loss on royalties and technical services fees accruing to account of loan from Diageo Finance Plc. Diageo Ireland, Diageo Brand BV, Diageo Great Britain.
47 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
22. RELATED PARTY TRANSACTIONS (continued) e. Human resource and project cost recharges Transactions with other related parties included human resources and project costs recharges as follows:
2016 2015 GH¢’000 GH¢’000 Diageo Australia 69 363 Diageo Brands BV - 149 Diageo Great Britain 9,015 8,187 Diageo Ireland 3,761 9,350 Diageo Scotland 4,332 2,766 East Africa Breweries Ltd 6,331 6,816 Guinness Cameroun 813 373 Diageo Uzletviteli Szogaltatasok K - 273 Diageo North America 65 30 Diageo Plc 309 385 Guinness Nigeria 11 - Diageo South Africa Pty - 65 Diageo North Ireland - 8 24,706 28,765
Outstanding balances in respect of transactions with related parties at the reporting date were as follows:
(i) Amounts due to related parties 2016 2015 GH¢’000 GH¢’000 Diageo Great Britain 9,555 19,151 Diageo Ireland Limited 7,770 15,833 Diageo Plc - 18 Diageo Northern Ireland 28 - Diageo Scotland Limited 233 224 Diageo Brands B.V 2,742 2,622 Diageo North America Inc 46 1,155 East Africa Brewery Limited 277 1,417 Guinness Nigeria 776 2,430 Guinness Cameroun S.A 71 86 Diageo Uzletviteli Szolgaltatasok K 41 - Diageo Supply Marracuene Limitada 3 - Diageo Angola Limitada 2 - Meta Abo Brewery 201 - Seychelles Breweries Limited 23 - Diageo Australia Limited - 90 Diageo South Africa (Pty) Limited 56 74 Premium Beverage International B.V - 1,666 Diageo Finance Plc - 4 21,824 44,770
48 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
22. RELATED PARTY TRANSACTIONS (continued) (ii) Amounts due from related parties 2016 2015 GH¢’000 GH¢’000 Diageo Great Britain 96 652 Diageo Ireland Limited 1,013 - Guinness Cameroun SA 122 949 Meta Abo Brewery 432 638 Diageo South Africa (Pty) 71 - Guinness Nigeria 472 24 East Africa Brewery Limited 256 15 Uganda Breweries Limited 173 - 2,635 2,278
All outstanding balances with these related parties are to be settled in cash. None of the balances are secured.
(iii) Borrowings 2016 2015 GH¢’000 GH¢’000 Balance at 1 July 211,404 159,663 Capitalised interest 51,943 37,233 Repayment (157,770) - Accrued interest 3,533 14,508 109,110 211,404
The Company contracted a loan facility of GH¢109 (iv) Key management compensation million (2015: GH¢270 million) from Diageo Finance Plc. Interest on the loan is at an applicable rate equal to 91 Key management personnel are those persons having day Government of Ghana treasury bills plus a margin of authority and responsibility for planning, directing and 50 basis points to be determined on an ongoing basis controlling the activities of the Company directly or by reference to the group’s transfer pricing policy. Prior indirectly including any Director (whether executive or to 1 July 2017, all or any part of the loan may be repaid otherwise) of the Company. Key management personnel at the option of the borrower subject to approval from compensation is recognised in administrative expenses in the lender. At any time, subsequent to 1 July 2017, the the income statement includes the following: lender may require the borrower to repay either in full or in part, the loan together with accrued interest and all other amounts outstanding under the agreement.
2016 2015 GH¢’000 GH¢’000 Short term benefits 10,661 7,825 Other long term benefits - 1 10,661 7,826
49 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
23. DIVIDENDS The Directors do not recommend the payment of a dividend for the year ended 30 June 2016 (2015: Nil).
24. EMPLOYEE BENEFIT OBLIGATIONS Defined Benefit Plan The defined benefit plans expose the Company to actuarial risks, such as longevity risk and interest rate risk. End of Service Benefits Other Long-term Benefits The Company has an end of service benefit plan that has been designed to help its permanent junior staff build up Long Service Awards savings over a period of time. The Company contributes The Company operates a long service benefit plan for all 5% of each employee’s monthly basic salary to the plan employees, both management staff and junior staff, who on a monthly basis. The plan is not funded. Employees have served the Company for ten (10) years and beyond. who retire as junior staff are given two (2) years’ annual The plan is not funded. salary. The awards vary depending on the number of years served by employees who meet the criteria above.
(a) Employee benefits liabilities 2016 2015 GH¢’000 GH¢’000 Defined benefit liability 422 505 Liability for long service awards 1,077 976 1,499 1,481
(b) Movement in net defined benefit liabilities Balance at 1 July 505 513 Included in profit or loss Current service costs 28 29 Interest costs 116 118 144 147 Included in OCI Actuarial gain (165) (44) Others Benefits paid (62) (111) Balance at 30 June 422 505
(c) Actuarial assumption The following were the principal actuarial assumptions used in determining the defined benefit obligation.
2016 2015 Discount rate 23.00% 21.69% Salary inflation 10.00% 10.00%
50 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
24. EMPLOYEE BENEFIT OBLIGATIONS (continued) (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 obligations by the amounts shown below:
2016 2015 Increase Decrease Increase Decrease GH¢’000 GH¢’000 GH¢’000 GH¢’000 Discount rate (1% movement) (93) 115 (98) 110 Salary inflation (1% movement) 36 (30) 43 (38)
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.
25. PROVISIONS 2016 2015 GH¢’000 GH¢’000 Restructuring - 550 Royalties - 218 - 768
Movement in provisions during the year are set out below: 2016 2015 GH¢’000 GH¢’000 Restructuring Balance at 1 July 550 4,230 Additional provision made during the year - 4,364 Amount used during the year (550) (6,315) Unused amount reversed during the year - (1,729) Balance as at 30 June - 550
2016 2015 GH¢’000 GH¢’000 Royalties Balance at 1 July 218 1,482 Provision made during the year - 1,649 Amount used during the year (218) (2,262) Unused amount reversed during the year - (651) Balance as at 30 June - 218
This relates to royalties for Alvaro and Smirnoff Ice due to Diageo Great Britain and Diageo North America. The royalty agreements are in the process of registration with the Ghana Investment Promotion Council as at the reporting date.
51 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
26. COST OF SALES 2016 2015 GH¢’000 GH¢’000 Direct production costs 193,845 161,823 Production overheads 153,221 127,233 Other costs 42,418 45,118 389,484 334,174
The amount of inventories recognised as an expense during the year was GH¢194 million (2015: GH¢162 million).
27. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2016 2015 GH¢’000 GH¢’000 (i) Advertising and marketing Advertising and marketing expenses 31,756 31,116 Depreciation 1,321 913 33,077 32,029 (ii) Administrative expenses Staff cost 45,331 43,332 Auditor’s remuneration 145 135 Insurance 1,218 1,919 Office related expenses 12,574 9,594 Professional/consultancy costs 1,228 1,612 Communication costs 1,039 726 Other costs 3,509 2,293 65,044 59,611 Staff cost includes: Social security contribution 2,866 2,841 Provident fund contribution 2,815 2,569 (iii) Other expenses Depreciation 2,990 2,729 Amortisation 563 536 Impairment (reversal)/loss (241) 57 Net foreign exchange loses 481 14,816 Sundry expenses 10,346 10,304 14,139 28,442
28. FINANCIAL INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (a) Accounting classification and fair values The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. The carrying amount of financial assets and financial liabilities reasonably approximate their fair value.
52 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
28. FINANCIAL INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (continued) (a) Accounting classification and fair values (continued) Carrying amount Fair value Loans and Other financial receivables liabilities Total Level 3 As at 30 June 2016 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Financial assets Trade and other receivables 15,685 - 15,685 15,685 Amounts due from related parties 2,635 - 2,635 2,635 Bank balances 44,087 - 44,087 44,087 62,407 - 62,407 62,407
Financial liabilities Trade and other payables - 96,547 96,547 96,547 Bank overdraft - 26 26 26 Obligation under finance lease - 26,332 26,332 26,332 Amounts due to related parties - 21,824 21,824 21,824 Borrowings - 109,110 109,110 109,110 - 253,839 253,839 253,839
Carrying amount Fair value Loans and Other financial As at 30 June 2015 receivables liabilities Total Level 3 GH¢’000 GH¢’000 GH¢’000 GH¢’000 Financial assets Trade and other receivables 23,686 - 23,686 23,318 Amounts due from related parties 2,278 - 2,278 2,278 Bank balances 48,826 - 48,826 48,826 74,790 - 74,790 74,412
Financial liabilities Trade and other payables - 78,451 78,451 78,451 Bank overdraft - 24,018 24,018 24,018 Obligation under finance lease - 11,847 11,847 11,847 Amounts due to related parties - 59,278 59,278 59,278 Borrowings - 196,896 196,896 196,896 - 370,490 370,490 370,490
(b) Risk management The Company has exposure to the following risks from its use of financial instruments:
• credit risk • liquidity risk • market risk
53 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
28. FINANCIAL INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (continued) (b) Risk management (continued) (i) Credit risk This note presents information about the Company’s Credit risk is the risk of financial loss to the Company if exposure to each of the above risks, the Company’s a customer or counterparty to a financial instrument fails objectives, policies and processes for measuring and to meet its contractual obligations, and arises principally managing risks and the Company’s management of from receivable from customers. capital. Trade receivables Risk management framework The Company’s exposure to credit risk is influenced The Board of Directors has overall responsibility for mainly by the individual characteristics of each customer. the establishment and oversight of the Company’s risk The credit control committee has established a credit management framework. The Audit sub-committee policy under which new customers are assessed is responsible for monitoring compliance with the individually for credit worthiness before the Company’s Company’s risk management policies and procedures, standard payment terms and conditions are offered. and for reviewing the adequacy of the risk management The Company generally trades with pre-defined and framework in relation to risks faced by the Company. selected customers. Credit exposure on trade receivable is covered by customers issuing post-dated cheques to The Audit sub-committee gains assurances on the cover amounts owed, as well as using landed properties effectiveness of internal control and risk management as collateral and bank guarantees. from: summary information relating to the management of identified risks; detailed reviews of the effectiveness Allowances for impairment of management of selected key risks; results of The Company establishes an allowance for impairment management’s self assessment processes over internal losses that represents its estimate of incurred losses control; and independent work carried out by the Global in respect of trade and other receivables. The main Audit and Risk function, which provide the audit sub- components of this allowance are a specific loss committee and management with results of procedures component that relates to individually significant carried out on key risks, including extent of compliance exposures, and a collective loan loss allowance with standards set on governance; and assurances over established for homogeneous assets in respect of losses the quality of the Company’s internal control. that have been incurred but have not yet been identified. The Company also has a control, compliance and ethics The collective loss allowance is determined based on function in place, which monitors compliance with historical data of payment for similar financial assets. internal procedures and processes and assesses the effectiveness of internal controls. Exposure to credit risk The carrying amount of financial assets represents the The Company’s risk management policies are established maximum credit exposure. to identify and analyse risks faced by the Company, set appropriate risk limits and controls, and monitor risks The maximum exposure to credit risk for trade and other and adherence to limits. Risk management policies receivables at the reporting date was: and systems are reviewed regularly to reflect changes in market conditions, products and services offered. Through training, standards and procedures, the Company aims to maintain a disciplined and constructive control environment, in which all employees understand their roles and obligations.
54 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
28. FINANCIAL INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (continued) (b) Risk management (continued) (i) Credit risk (continued) 2016 2015 GH¢’000 GH¢’000 Key distributors 13,402 15,988 Individuals and companies 2,080 7,368 Employees 203 330 15,685 23,686
Impairment losses The aging of trade receivables at the reporting date was: 2016 2015 GH¢’000 GH¢’000 Current (less than 30 days) 12,470 13,569 Past due but not impaired (31-120 days) - 1,437 Impaired (more than 120 days) 1,972 2,263 Gross trade receivables 14,442 17,269 Impairment loss (1,040) (1,281) Trade receivable 13,402 15,988
The movement in impairment allowance in respect of trade receivables during the year was as follow:
2016 2015 GH¢’000 GH¢’000 Balance at 1 July 1,281 1,224 Impairment charge 2 57 Recoveries (243) - Balance at 30 June 1,040 1,281
Impairment losses have been recognised for specific over the years, and there have been no defaults in customers whose debts are considered impaired. Based payment of outstanding debts. on historical default rates, no additional impairment losses are considered necessary in respect of trade receivables. Bank balances The Company held bank balances of GH¢44.1 million at No impairment loss was recognised for financial assets 30 June 2016 (2015: GH¢48.8 million) which represents other than trade receivables. The recovery during the year its maximum exposure. The bank balances are held with was for trade receivables and has been credited to profit banks licensed by the Bank of Ghana. or loss.. (ii) Liquidity risk Amount due from related parties Liquidity risk is the risk that the Company would either The Company’s exposure to credit risk in respect not have sufficient financial resources available to meet all of amounts due from related parties is minimal. The its obligations and commitments as they fall due, or can Company has transacted business with related parties access them only at excessive cost.
55 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
28. FINANCIAL INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (continued) (b) Risk management (continued) (ii) Liquidity risk (continued) The Company’s approach to managing liquidity is to and other receivables on a daily basis. Diageo Finance Plc, ensure that it maintains adequate liquidity to meet its the finance unit of the Group, makes available borrowings liabilities as and when they fall due. The Company to the Company to support its operations. assesses its debt position every month. The Company also monitors the level of expected cash inflows on trade The following are contractual maturities of financial liabilities:
Contractual cash flows Carrying 6mths As at 30 June 2016 amount Total or less 6-12mths 1-5years GH¢’000 GH¢’000 GH¢ GH¢ GH¢ Non-derivative financial liability Trade and other payables 96,547 96,547 96,547 - - Bank overdraft 26 26 26 - - Obligations under finance lease 26,332 39,654 7,278 7,210 25,166 Amounts due to related parties 21,824 21,824 21,824 - - Borrowings 109,110 109,110 - - 109,110 Balance at 30 June 2016 253,839 267,161 125,675 7,210 134,276
Carrying 6mths As at 30 June 2015 amount Total or less 6-12mths 1-5years GH¢’000 GH¢’000 GH¢ GH¢ GH¢ Non-derivative financial liability Trade and other payables 78,451 78,451 78,451 - - Bank overdraft 24,018 24,018 24,018 - - Obligations under finance lease 11,847 18,633 3,211 3,212 12,210 Amounts due to related parties 59,278 59,278 59,278 - - Borrowings 196,896 247,556 50,660 - 196,896 Balance at 30 June 2015 370,490 427,936 215,618 3,212 209,106
(iii) Market risk to manage any risk exposure. Significant items of Market risk is the risk that changes in market prices, such expenditure are incurred when market prices and other as foreign exchange rates and interest rates will affect the economic indicators are favorable. Company’s income or the value of its holdings of financial instruments. The objective of market risk management Foreign currency risk is to manage and control market risk exposures within The Company is exposed to currency risk on purchases acceptable parameters, while optimising the return and borrowings that are denominated in currencies other than the functional currency. The currencies in which Currently, there is no formal policy designed by these transactions are primarily denominated are Euros management to mitigate the effect of volatilities in (EUR), US Dollars (USD), Great Britain Pounds (GBP), market prices. The Company’s management committee, South African Rands (ZAR), Kenyan Shillings (KES) and however, monitors market trends on a weekly basis CFA Franc (XAF).
56 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
28. FINANCIAL INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (continued) (b) Risk management (continued) (iii) Market risk (continued) The Company’s exposure to foreign currency risk expressed in transaction currency at the end of the reporting period was as follows:
As at 30 June 2016 EUR USD GBP ZAR KES AUD XAF ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 Bank balances 37 38 4,688 - - - - Trade payables (1,904) (666) (230) - (2,726) - - Trade receivables - 668 - - - - - Related company balances (1,298) (2,077) (333) (226) (4,863) - (5,218) Net exposure (3,165) (2,037) 4,125 (226) (7,589) - (5,218)
As at 30 June 2015 EUR USD GBP ZAR KES AUD XAF ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 Bank balances 2,426 3,192 265 - - - - Trade payables (1,132) (2,080) (187) - (2) - - Trade receivables - 322 - - - - - Related company balances (3,020) (2,592) (1,514) (206) (13,146) (26) (105) Net exposure (1,726) (1,158) (1,436) (206) (13,148) (26) (105)
The following exchange rates were applied during the year:
Average Rate Reporting Date 2016 2015 2016 2015 Cedis EUR 1 4.25 4.30 4.38 4.86 USD 1 3.85 3.62 3.95 4.36 GBP 1 5.70 5.69 5.25 6.85 ZAR 1 0.27 0.31 0.27 0.36 KES 1 0.04 0.04 0.04 0.04 AUD 1 2.79 2.94 2.95 3.36 XAF 1 0.007 0.006 0.007 0.01
Sensitivity analysis on currency risks The following table shows the effect of a strengthening or recorded at 30 June and does not represent actual or weakening of the Ghana cedi against all other currencies future gains or losses. The sensitivity analysis is based on on the Company’s profit or loss and equity. This sensitivity the percentage difference between the closing exchange analysis indicates the potential impact on profit or loss rate and the average exchange rate per currency recorded and equity based upon the foreign currency exposures in the course of the respective financial year.
57 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
28. Financial INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (continued) (b) Risk management (continued) (iii) Market risk (continued) A strengthening/weakening of the Ghana cedi, by the profit or loss by the amounts shown below. This analysis rates shown in the table, against the following currencies assumes that all other variables, in particular interest at 30 June would have increased/decreased equity and rates, remain constant.
As of 30 June 2016 2015 Profit or Profit or Profit or Profit or loss impact: loss impact: loss impact: loss impact: Currency % Change Strengthening Weakening % Change Strengthening Weakening
GH¢’000 GH¢’000 GH¢’000 GH¢’000 Euro ±3.06 411 (411) ±13.02 1,092 (1,092) US$ ±2.60 204 (204) ±20.44 1,032 (1,032) GBP ±7.89 1,856 (1,856) ±20.39 2,005 (2,005) KES ±0.00 - - ±2.56 - - ZAR ±0.00 - - ±16.13 12 (12) AUD ±5.73 - - ±14.29 99 (99) XAF ±0.00 - - ±66.66 - -
Interest rate risk profile Carrying amounts 2016 2015 GH¢’000 GH¢’000 Fixed rate instruments Bank overdraft 6 3,265
Variable rate instrument Bank loans and overdrafts 20 20,753 Borrowings 109,110 196,896 Obligations under finance lease 26,332 11,847 135,462 229,496
Cash flow and fair value interest rate risk Cash flow sensitivity analysis for The company’s main interest rate risk arises from variable rate instruments borrowings at variable rates, which exposes it to cashflow A change of 200 basis points in interest rates at the interest rate risk. reporting date would have an increased/(decreased) effect on equity and profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates remain constant. The analysis is performed on the same basis for 2015.
58 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS CONT’D FOR THE YEAR ENDED 30 JUNE 2016 11
28. Financial INSTRUMENT – FAIR VALUES AND RISK MANAGEMENT (continued) (b) Risk management (continued) (iii) Market risk (continued) As of 30 June 2016 2015 Profit Profit and and Loss Loss impact: % Change impact: Equity % Change Equity GH¢’000 GH¢’000 GH¢’000 GH¢’000 Overdrafts and loans ±2% ±692 ±692 ±2% ±358 ±358 Borrowings ±2% ±4,524 ±4,524 ±2% ±3,481 ±3,481 Obligations under finance lease ±2% ±360 ±360 ±2% ±190 ±190
29. CAPITAL COMMITMENTS 30. CONTINGENT LIABILITIES Capital commitments authorised but not expended Contingent liabilities, in respect of possible claims for property, plant and equipment at the reporting and lawsuits at the reporting date amounted to date amounted to GH¢5.7 million (2015: GH¢0.87 GH¢206,830 (2015: GH¢273,000). Judgement in million). respect of these cases had not been determined as at 30 June 2016. No provision has been made as professional advice on the case that it is unlikely that any significant loss will arise.
59 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION Analysis of Shareholding 12
Appendix I (i) Number of Shareholders The Company had 4,493 ordinary shareholders at 30 June 2016 distributed as follows:
Holding No. of Holders Total Holding % Holding 1 – 1,000 3,169 771,927 0.25 1,001 – 5,000 643 1,589,046 0.52 5,001 – 10,000 414 3,265,127 1.06 10,001 – 999,999,999 267 301,968,727 98.17 4,493 307,594,827 100.00
(ii) List of twenty largest shareholders as at 30 June 2016 Name No. of Shares % Holding 1 DIAGEO HIGHLANDS BV 178,995,652 58.19 2 DIAGEO GHANAIAN HOLDINGS BV 68,295,709 22.22 3 SOCIAL SECURITY AND NATIONAL INSURANCE TRUST 23,294,862 7.57 4 SCBN/BBH (LUX) SCA CUSTODIAN 12,713,049 4.13 5 SCGN/HONKONG SHANGAI ARISAG A.C.F 3,438,794 1.12 6 SCBN/JPMC IRE RE CORONATION FD MGR 1,951,789 0.63 7 SCBN/EPACK INVESTMENT FUND LTD 1,178,015 0.38 8 SCGN/SSB & TRUST AS CUSTODIAN FOR WASATCH FRONTIER 1,074,765 0.35 9 SCBN/ELAC POLICY HOLDERS FUND 781,816 0.25 10 SCGN/SCB MAURITIUS RE SKANDINA 640,011 0.21 11 STD NOMS TVL PTY/BNYM/SANV/CORONATION ASSET MGT 574,413 0.19 12 SCBN/CITIBANK LONDON ROBECO AFRICA 482,632 0.16 13 STD NOMS TVL PTY/BNYM LUX/EAST 465,746 0.15 14 SCBN/CHASE OFFSHORE 6179c 447,770 0.15 15 SCGN/JP MORGAN CHASE VICTORIE AFRICA INDEX 437,510 0.14 16 SCBN/STATE STREET LOND C/O SSB BOST 371,636 0.12 17 STD NOMS TVL PTY/BNYM /UNI. OF NOTRE 366,484 0.12 18 TEACHERS FUND 347,925 0.11 19 SCBN/ELAC SHAREHOLDERS FUND 229,163 0.07 20 SCBN/SSB & T RUSSEL T.C.C. EMP 194,295 0.06 Reported Totals 296,282,036 96.32 Not Reported 11,312,791 3.68 Company Total 307,594,827 100
(iii) Directors’ Shareholding The Director named below held the following number of shares in the Company at 30 June 2016:
Ordinary Shares 2016 2015 Ebenezer Magnus Boye 3,283 1,283
60 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
FIVE YEAR FINANCIAL SUMMARY 13
Appendix II 2016 2015 2014 2013 2012 GH¢’000 GH¢’000 GH¢’000 GH¢’000 GH¢’00 Results Revenue 566,308 437,348 330,645 321,017 292,318
(Loss)/profit before tax (1,871) (49,107) (11,479) 27,868 33,217 Taxation (5,809) 3,636 2,857 (9,591) (8,212)
Profit/(Loss) after taxation (7,680) (45,471) (8,622) 18,277 25,005 Dividend paid - - (3,656) (5,072) - Retained (loss)/profit (7,680) (45,471) (12,278) 13,205 25,005
Statement of Financial Position Property, plant and equipment 374,066 336,091 292,009 225,900 161,329 Intangible assets 2,135 2,698 2,698 3,154 3,615 Bank balances 44,087 48,826 11,736 11,519 35,390 Other current assets 108,638 93,039 112,935 57,418 43,765
Total assets 528,926 480,654 419,378 297,991 244,099 Total liabilities (264,669) (385,472) (278,759) (145,189) (105,14) 264,257 95,182 140,619 152,802 138,957
Share capital 272,879 96,252 96,252 96,252 96,252 Retained earnings (8,622) (1,070) 44,367 56,550 42,705 264,257 95,182 140,619 152,802 138,957
Revenue collected for Government Excise duty 111,728 72,618 62,060 92,888 92,900 Sales tax/value added tax 122,878 91,856 65,075 63,230 57,471 234,606 164,474 127,135 156,118 150,371
Statistics EPS (GH¢) (0.036) (0.215) (0.041) 0.086 0.133 Dividend per share (GH¢) - - 0.02 0.02 - Net asset per share (GH¢) 0.86 0.45 0.67 0.72 0.74 Current ratio 1.20:1 0.81:1 1.22:1 0.56:1 0.99:1 Return on shareholders’ fund (%) (2.91) (47.77) (6.13) 11.96 17.99 Return on net sales value (%) (1.36) (10.40) (2.61) 5.69 8.55
61
2016 ANNUAL REPORT & FINANCIAL STATEMENTS
PROXY FORM
For Company’s Use
Number of Shares ………...... ……………
Resolution For Against 1. To re-elect Simon Harvey as a director 2. To re-elect Leo Breen as a director 3. To re-elect Kofi Sekyere as a director 4. To approve non-executive directors fees 5. To authorise the directors to fix the remuneration of the Auditors. 6. To amend Regulation 58 (1) of the Company’s Regulations to include Regulations 58 (1) (a) and (b) as follows:
(a) The electronic version of the Annual Report and Financial Statements shall be posted on the Business’ website as follows: www.guinessghana.com and same forwarded to the e-mail addresses of shareholders before Annual General Meetings.
(b) A limited number of hard copies of the Annual Report will be made available to shareholders at the grounds of the Annual General Meeting for use by shareholders attending the meeting. Please indicate with an ‘X’ in the appropriate square how you wish your votes to be cast on the resolution set out above. Unless otherwise instructed the Proxy will vote or abstain from voting at his discretion.
ANNUAL GENERAL MEETING to be held at 10 a.m. on 27th October, 2016 at the Alisa Hotel, Accra.
*I/We...... being a member(s) of GUINNESS GHANA BREWERIES LIMITED hereby appoint **...... …………………………………… or failing him the Chairman of the Meeting as my/our Proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on 27th October 2016 and at any adjournment thereof.
Dated this ……………… day of ……………. 2016 …………………………………...... ….
Shareholder’s Signature
* Strike out whichever is not desired.
THIS PROXY FORM SHOULD NOT BE SENT TO THE SECRETARY IF THE MEMBER WILL BE ATTENDING THE MEETING. Notes: 1. A Member (Shareholder) who is unable to attend the Annual General Meeting is allowed by law to vote by proxy. The above Proxy Form has been prepared to enable you to exercise your vote if you cannot personally attend. 2. Provision has been made on the Form for the Chairman of the Meeting to act as your proxy but, if you wish, you may insert in the blank space marked** the name of any person whether a Member of the Company or not, who will attend the Meeting on your behalf instead of the Chairman of the Meeting. 3. In the case of joint holders, each holder must sign. 4. If executed by a corporation, the Proxy Form should bear its Common Seal or be signed on its behalf by a Director. 5. Please sign the above Proxy Form and post it so as to reach the address shown below no later than 10 a.m. on 25th October 2016: The Registrars, Universal Merchant Bank Ghana Limited, Registrars Department, 123 Kwame Nkrumah Avenue, Sethi Plaza, Adabraka, P.O. Box 401, Accra, Ghana 6. The Proxy must produce the Admission Card sent with the Notice of the Meeting to obtain entrance to the Meeting.
63
2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES
65 2016 ANNUAL REPORT & FINANCIAL STATEMENTS
NOTES
66
CelebratingCelebrating TraditionTradition withwith orijinorijin
Kweku Sekyi-Cann (Marketing Director, GGBL) Orijin Bitters being served to the elders and the presenting a crate of Orijin Bitters Osu Mantse ( Nii Okwei Kinka Dowuona VI)
Ga Manste and staff of Guinness Ghana Breweries Limited pose for the cameras Kweku Sekyi-Cann presenting a crate of Orijin Bitters to Nii Okwei Kinka Dowuona VI (Osu Manste)
Kweku Sekyi-Cann (Marketing Director, GGBL) and Rita Rockson (Communications Manager, Nii Kojo Ababio V (James Town Manste) receiving some Orijin Ga Mantse honouring Kweku Sekyi-Cann A Bottle of Orijin Displayed beside Ga Mantse Ga Mantse served Orijin Bitters. GGBL) presenting a bottle of Orijin Bitters to Nii Kojo Ababio V (James Town Manste) t-shirts from Rita Rockson & Kweku Sekyi-Cann
Guinness Ghana Breweries Limited (GGBL), the leading drink variant is currently available in a 300ml glass bottle. beverage business in Ghana introduced ORIJIN in January The Bitters is sold in most bars in Accra and Kumasi at 70p/tot 2015. As a business, GGBL prides itself in operating with a clear while the 200ml sells for GHC 3. The Ready to Drink is also sold understanding of the Ghanaian culture and has paid courtesy at GHC 2.50 per bottle. calls on Ga Traditional Leaders to officially introduce to them ORIJIN bitters and ORIJIN Ready To Drink (RTD). ORIJIN…..ORIJINAL AFRICAN HERBS & FRUITS! Herbs, which is an integral part of our culture have always played an important role in our African tradition, and provided the inspiration for the creation of ORIJIN, which is made from original African herbs, fruits and alcohol. Kweku Sekpyi- Cann in a hand shake with Nii Ayibonte II (Gbese Mantse) Our Chiefs are the custodians of our tradition and therefore play an important role in upholding the culture of using herbs in various recipes. Speaking during the presentations, Marketing Director of GGBL, Kweku Sekyi-Cann said “It is my pleasure to introduce to you once again your Orijin Bitters and Ready to Drink; made from Orijinal African herbs and fruits. This is a quality product from Guinness Ghana Breweries Limited; home of quality beverages.” Orijin is available in 2 variants: Orijin Bitters and the ready to Nii Ayibonte II (Gbese Mantse) poses for a picture with his elders and staff of Nii Ayibonte Adams II (Achimota Manste) drink variant, which is the 1st of its kind in Ghana. Orijin Bitters Guinness Ghana Breweries Limited (Home of Quality Beverages) pouring libation with Orijin Bitters has 2 SKUs: 75cl PET bottle and 20cl PET while the ready to orijinal Inside DRINK RESPONSIBLY 18+