Website: www.lafarge.co.ke Email: [email protected] Tel: 0730614352/614353/0730 614358 P.O Box10921-00100,Nairobi. Kitui Road,OffKampalaRd, IndustrialArea,Nairobi Corporate Office, BAMBURI CEMENTLIMITED eetabr BamburiCement CementBamburi
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 www.lafarge.co.ke BAMBURI CEMENT LIMITED AND FINANCIALSTATEMENTS ANNUAL REPORT Welcome to our 2019 report *VU[LU[Z
Our Vision 2019 OVERVIEW 1 About LafargeHolcim 6 ;VIL[OL\UKPZW\[LKSLHKLYHUK[OLWYLMLYYLK About Bamburi Cement Group 8 WHY[ULYI`WYV]PKPUNPUUV]H[P]LZVS\[PVUZMVY .YV\W2L`ÄUHUJPHSOPNOSPNO[Z nation buidling. =HS\LHKKLKZ[H[LTLU[ *OHPYTHU»Z:[H[LTLU[ Our Strategy: BUILDING FOR GROWTH .YV\W4HUHNPUN+PYLJ[VY»Z:[H[LTLU[ based on 4 pillars )VHYKVM+PYLJ[VYZ ,_LJ\[P]L*VTTP[[LL4LTILYZ Growth People .YV^MHZ[LY[OHU[OLTHYRL[I`JHW[\YPUN BUSINESS REVIEW VWWVY[\UP[PLZMYVT[OL)PNHNLUKH )LJVTLHUHNPSLSLHUHUKWLYMVYTHUJLMVJ\ZLK VYNHUPaH[PVUI`LTWV^LYPUNV\YWLVWSL 2 >OH[^LKV 6WLYH[PVUHS9L]PL^ Performance -YHUJOPZL5L[^VYR/PNOSPNO[Z Sustainability 6\Y7YVQLJ[Z )L[OLILZ[JHZOJVZ[JVTWHU`PU[OL )L[OLTVZ[YLZWLJ[LKJVTWHU`I`HSS 4HYRL[PUN/PNOSPNO[Z JV\U[Y`[OYV\NOPUUV]H[PVU VWLYH[PVUHS /LHS[OHUK:HML[` Z[HRLOVSKLYZI`JYLH[PUNZOHYLK]HS\L^P[O[OLT excellence 6\Y7LVWSLHUK:`Z[LTZ 9PZRHUK*VU[YVS
SUSTAINABILITY REVIEW 3 6\Y:\Z[HPUHIPSP[`-YHTL^VYR 7LVWSLHUK*VTT\UP[PLZ Climate 68 >H[LYHUK5H[\YL *PYJ\SHY,JVUVT`
GOVERNANCE 4 *VYWVYH[L.V]LYUHUJL:[H[LTLU[ 9LT\ULYH[PVU9LWVY[ :OHYLOVSKLY7YVÄSL
FINANCIAL REVIEW 5 Corporate information 92 9LWVY[VM[OL+PYLJ[VYZ :[H[LTLU[VM+PYLJ[VYZ»9LZWVUZPIPSP[PLZ 0UKLWLUKLU[(\KP[VYZ»9LWVY[ *VUZVSPKH[LK:[H[LTLU[VM7YVÄ[VY3VZZ HUK6[OLY*VTWYLOLUZP]L0UJVTL *VTWHU`:[H[LTLU[VM7YVÄ[VY3VZZ HUK6[OLY*VTWYLOLUZP]L0UJVTL *VUZVSPKH[LK:[H[LTLU[VM-PUHUJPHS7VZP[PVU *VTWHU`:[H[LTLU[VM-PUHUJPHS7VZP[PVU *VUZVSPKH[LK:[H[LTLU[VM*OHUNLZPU,X\P[` *VTWHU`:[H[LTLU[VM*OHUNLZPU,X\P[` *VUZVSPKH[LK:[H[LTLU[VM*HZO-SV^Z *VTWHU`:[H[LTLU[VM*HZO-SV^Z 5V[LZ[V[OL-PUHUJPHS:[H[LTLU[Z
Report theme: ;OPZ`LHY»ZYLWVY[JLSLIYH[LZV\YUH[\YHS JHWP[HSHUKZOV^JHZLZ)HTI\YP¹ZJVTTP[TLU[[V Z\Z[HPUHIPSP[`HUKLU]PYVUTLU[HSSLHKLYZOPW 1
2019 OVERVIEW
Karst caves, at Bamburi Quarry, are naturally created when rainwater dissolves the limestone as it percolates to the ground. The caves have been used by local communities for centuries. Bamburi Cement preserves them as a cultural heritage site. 1 2019 OVERVIEW About LafargeHolcim
LARGEST FOOTPRINT IN BUILDING MATERIALS
Grinding plant
Cement plant EUROPE CHFm 7,670 Net sales
NORTH AMERICA CHFm 6,311 Net sales ASIA PACIFIC CHFm 6,491 KEY FIGURES Net sales
MIDDLE EAST 72,452 OUR FOUR VALUE DRIVERS Employees AFRICA CHFm VALUE CREATED IN 2019 2,903 FINANCIALS 264 Net sales Cement and grinding plants LATIN AMERICA NON-FINANCIALS 3.1% CHFm Net sales growth (like-for-like) 649 2,620 561 kg Aggregates plants 6.5% Net sales CO2 emitted per ton of cementitious material Recurring EBITDA growth (pre-IFRS 16, like-for-like) 48 m 1,402 49.5% Tons of waste reused in operations Ready-mix concrete plants 299 l 7.6% Freshwater withdrawn per ton of cementitious material Return on invested capital (pre-IFRS 16)
5.9 m 6 People benefiting from our community investments 7
2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW
About Bamburi Cement Group
Bamburi Cement Ltd Hima Cement Ltd (Z\IZPKPHY`VM3HMHYNL/VSJPT[OL^VYSKSLHKLYPUI\PSKPUNTH[LYPHSZ )HTI\YPOHZ[^VWSHU[ZPU4VTIHZHHUK([OP9P]LY (Z\IZPKPHY`VM)HTI\YP*LTLU[3[K^P[O[^VWSHU[ZPU2HZLZLHUK Tororo.
Bamburi Special Products Ltd UGANDA >OVSS`V^ULKZ\IZPKPHY`[OH[Z\WWSPLZ9LHK`4P_*VUJYL[LHUK 7YLJHZ[JVUJYL[LISVJRZ Bonastore Ltd (VULZ[VWZOVW^OLYLVULJHUÄUKH^PKLYHUNLVMJVUZ[Y\J[PVU WYVK\J[ZZLY]PJLZHUKL_WLY[PZLMVY[OLPYJVUZ[Y\J[PVUULLKZ KENYA
Lafarge Eco Systems Ltd >OVSS`V^ULKZ\IZPKPHY`VM[OL*VTWHU`^OVZLMVJ\ZPZVU Z\Z[HPUHISLSHUK\ZLHUKX\HYY`YLOHIPSP[H[PVU
RWANDA Hima Cement Rwanda Binastore Ltd (Z\IZPKPHY`VM/PTH*LTLU[3[K0[PZ[OLWYLMLYYLKZ\WWSPLYVMOPNOX\HSP[`JLTLU[ (VULZ[VWZOVW^OLYLVULJHUÄUKH^PKLYHUNLVMJVUZ[Y\J[PVU HUK9LHK`4P_JVUJYL[LZVS\[PVUZ[V[OLTHYRL[ WYVK\J[ZZLY]PJLZHUKL_WLY[PZLMVY[OLPYJVUZ[Y\J[PVUULLKZ
8 9
2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW
.YV\W2L`ÄUHUJPHSOPNOSPNO[Z Value added statement
Employees Group Turnover
45,000 39,200 1000 37,262 880 40,000 38,034 35,974 36,796 900 802 808 822 729 35,000 800 16,803 700 359 30,000 16,773 14,214 14,578 352 16,380 331 347 25,000 600 326 500 20,000 Shs million 400 15,000 300 19,403 21,261 521 10,000 19,864 22,397 19,594 Customers Banks Payment to
Number of staff 471 470 200 461 403 5,000 37,117M 60M 100 Governments 0 - 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 *\Z[VTLYZHYLH[[OLOLHY[VM >LJYLH[L]HS\LMVYV\YÄUHUJPHS 3,461M Uganda Kenya Total Group Uganda Kenya Total V\YI\ZPULZZ>L\UKLYZ[HUKV\Y ZLY]PJLZWYV]PKLYZ[OYV\NO[OL )`^VYRPUNJSVZLS`^P[OIV[O SVJHSTHYRL[ZHUKZ[YP]L[VL_JLLK ÄUHUJPHSWYVK\J[HUKZLY]PJLZ 5H[PVUHSHUK*V\U[`NV]LYUTLU[Z V\YJ\Z[VTLYZ»L_WLJ[H[PVUZ ^LHJJLZZMYVT[OLTLUHISPUN ^LIYPUN[OLILULÄ[ZVMWYP]H[L >LHYLJVUJLYULK^P[OWYV]PKPUN \Z[VÄUHUJLV\YVWLYH[PVUZHUK ZLJ[VYVWLYH[PVU"WYV]PKPUNYL]LU\L V\YJ\Z[VTLYZ^P[O[OLOPNOLZ[ PU]LZ[TLU[Z MVY[OLL_JOLX\LY[OYV\NO]HYPV\Z X\HSP[`WYVK\J[ZHUKYLZWVUK [H_LZHUKWH`TLU[ZHUKPUÅ\LUJPUN Group Profit before tax Group Profit attributable to shareholders HWWYVWYPH[LS`[V[OLPYJVUJLYUZ WYHJ[PJLZPU[OLJVUZ[Y\J[PVUZLJ[VY 9,000 8,458 8,271 [OYV\NOWVSPJ`KPHSVN\LHUKZOHYPUN 8,000 VMV\YL_WLYPLUJLHUKL_WLY[PZL
7,000 8,000 6,000 7,000
5,000 6,000 5,260 5,243 8,458 5,000
Shs million 4,000 4,000
3,000 Shs million 3,000 2,000 2,000 1,647 861 633 1,000 620 728 1,000 - 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Shareholders Suppliers Our Employees (Dividend) 29,953M 3,230M - >L^VYRJVSSHIVYH[P]LS`^P[O 6\YLTWSV`LLZKYP]LV\YI\ZPULZZ Group Earnings/ Dividend per Share Group Cash and Cash Equivalents >LWYV]PKLZOHYLOVSKLYZ^P[O ZL]LYHSZ[YH[LNPJZ\WWSPLYZ>L >LZ[YP]L[VJYLH[LHKP]LYZL VWLUHUK[YHUZWHYLU[PUMVYTH[PVU JHZJHKLV\YOPNOI\ZPULZZ HUKPUJS\ZP]L^VYRWSHJL^OLYL
16.00 9,000 HUKLUJV\YHNL[^V^H` JVUK\J[[OYV\NO[OLZL HSSV\YJVSSLHN\LZJHUYLHJO 14.47 14.44 8,453 14.00 13.00 8,000 JVTT\UPJH[PVU^OPSLVIZLY]PUN YLSH[PVUZOPWZ>LLUZ\YL[OH[ [OLPYM\SSWV[LU[PHS^OPSLWYV]PKPUN 12.00 6,972 [OLOPNOLZ[Z[HUKHYKZVMJVYWVYH[L ^L[YLH[V\YZ\WWSPLYZ^P[O[OL competitive remuneration and 12.00 7,000 NV]LYUHUJLHUKL[OPJHSI\ZPULZZ \[TVZ[YLZWLJ[HUKLUJV\YHNL ILULÄ[ZHUKWYPVYP[PaPUN[OLPYOLHS[O 10.00 6,000 WYHJ[PJLZ co-creation. HUKZHML[` 8.00 5,000
4,000
Shs million 3,490 6.00 5.10 4.54 3,106 4.00 3,000 4.00 2,366 2.37 1.74 2,000 2.00 0 1,000 0.00 2015 2016 2017 2018 2019 - EPS (Shs per share) DPS (Shs per share) 2015 2016 2017 2018 2019
Communities Capital Expenditure Retained for 45M 1,340M Sustainable Growth 1,334M >LZLLR[VJYLH[LZVJPHS >LHYLJVUZPZ[LU[S`PTWYV]PUN environmental and economic V\YWYVK\J[P]LJHWHJP[`[OYV\NO *HZOYL[HPULKMVYZ\Z[HPUHISL ILULÄ[ZMVYJVTT\UP[PLZ^OLYL^L PU]LZ[TLU[ZPUTHJOPULY` VWLYH[PVUZPUV\YI\ZPULZZ operate. LX\PWTLU[[LJOUVSVN`HUKV[OLY HZZL[ZZVHZ[VTHPU[HPUV\Y competitive advantage.
10 11
2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW Chairman’s Statement
The statement covers Bamburi Cement (the ‘Company’) and its subsidiaries (together, the ‘Group’)
Investing for future growth through the capacity expansion In 2018, Bamburi Cement Limited (Bamburi Cement) JVTTPZZPVULKHUHKKP[PVUHS TPSSPVU[VUULZVMJLTLU[ NYPUKPUNJHWHJP[`WLY`LHY;OLHKKP[PVUHSJHWHJP[`IYPUNPUN V\Y[V[HSPUZ[HSSLKNYPUKPUNJHWHJP[`[VTPSSPVU[VUULZWLY `LHYOHZZVSPKPÄLKV\YTHYRL[SLHKLYZOPWWVZP[PVUPU2LU`H (ZHYLZ\S[)HTI\YPPZ^LSSWSHJLK[VHKKYLZZPUJYLHZPUN KLTHUKPUIV[OKVTLZ[PJHUKYLNPVUHSTHYRL[ZKYP]LUI` NYV^[OPU[OLJVUZ[Y\J[PVUZLJ[VY
:PTPSHYS`/PTH*LTLU[3PTP[LK/PTH*LTLU[HSZV JVTTPZZPVULKHKKP[PVUHSJLTLU[NYPUKPUNJHWHJP[`PU ,HZ[LYU >P[OVW[PTHSJLTLU[NYPUKPUNJHWHJP[`7OHZLPUWSHJL ;OL.YV\WOHZUV^LTIHYRLKVU[OLZLJVUKWOHZLVM PU]LZ[PUNMVY.YV^[O^OPJOLU[HPSZ[OLI\PSKPUNVMHUL^ JSPURLYSPUL[VPUJYLHZLV\YJSPURLYWYVK\J[PVUJHWHJP[`ZV ^LJHUIL ZLSMZ\ѝJPLU[;OLWYVQLJ[^PSSKLSP]LYH Z[H[LVM[OLHY[NYLLUÄLSKJSPURLYWSHU[PU2LU`H >P[O7OHZLVMPU]LZ[PUNMVYNYV^[OJVTWSL[LKHUK 7OHZLUV^\UKLY^H`;OL.YV\WPZUV^^LSSWVZP[PVULK [VL_WSVP[VWWVY[\UP[PLZPU[OLUL_[WOHZLVMV\YNYV^[O[V ZVSPKPM`V\YTHYRL[SLHKLYZOPWWVZP[PVUNVPUNMVY^HYK “The Group is now well positioned to exploit opportunities in the next phase of our growth to solidify our market leadership position going forward” Haller Park 12 13 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW Chairman’s Statement Economic Environment in our main East African NYPUKPUNJHWHJP[`^OPJOPZW\[[PUNWYLZZ\YLVUJLTLU[ VM[OL The Group is successfully implementing Strategy 2022 – “Building for Growth”. We have “Resilient topline performance continued to defend our market in challenging market leadership position. With the conditions.” completion of our capacity expansion projects, we have now embarked on a journey towards cost leadership. To reinforce our competitive edge in Kenya, the Group launched new innovative products to meet the ever changing and dynamic needs of users of our products in order to grow volumes. Additionally, the Group has also launched a transformation drive to increase JVZ[LMÄJPLUJPLZ[OYV\NOV\[V\Y operations. Forest Trails 16 17 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW Group Managing Director’s Statement In 2019, Bamburi Cement Limted (Bamburi Cement) 0U2LU`H^LJSVZLKHSS[OLVWLU/:07HJ[PVUZH[ SL]LS 0U V\Y JHYIVUMVV[WYPU[H[SV^SL]LSZVM*62LTPZZPVUZ^OPSL [VLUJV\YHNLHUKPUZ[PSZHMLKYP]PUNILOH]PV\YZHUK V]LY I` +<9(*,4JVTLZZLJVUK[V;,4)6;OLZLHYL[OL OHIP[ZHTVUNZ[V\YJVU[YHJ[LK[YHUZWVY[LYKYP]LYZ>L 6]LYHSS[OLV\[IYLHR^OPJOOHZJH\ZLKHZSV^KV^U NYLLULZ[JLTLU[ZPU[OLTHYRL[HUK[OL`\UKLYSPULV\Y PTWSLTLU[LK[OLKYP]LYZJVYLJHYK[VOLSW[YHJRHUKYLWVY[ -VSSV^PUN[OLJSVZ\YLVM[OL 18 4H` 19 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW Board of Directors DR. JOHN P.N. SIMBA 75 RITA KAVASHE, 55 MBS EGH OGW LLB, LLD (Hon.) MBS MBA, BEd 1VOUPZHU(K]VJH[LVM[OL/PNO*V\Y[VM2LU`HHUK:LUPVY7HY[ULYH[:PTIH :PTIH 9P[HPZHJHW[HPUVM[OLH\[VTV[P]LPUK\Z[Y`^P[OV]LY`LHYZ»L_WLYPLUJL:OLQVPULK (K]VJH[LZ/LWYL]PV\ZS`^VYRLK^P[O[OL([[VYUL`.LULYHS»Z*OHTILYZ0UK\Z[YPHS .LULYHS4V[VYZ,HZ[(MYPJH3PTP[LK.4,(PU HZH+PYLJ[:HSLZ,_LJ\[P]LHM[LY^OPJO *VTTLYJPHS+L]LSVWTLU[*VYWVYH[PVU0*+*5H[PVUHS)HURVM2LU`HHUK[OL,_LJ\[P]L ZOLYVZL[OYV\NO[OLYHURZOVSKPUNWVZP[PVUZPU2LU`HHUK:V\[O(MYPJHILMVYLILPUN :LJYL[HYPH[ ;LJOUPJHS 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW Board of Directors PIERRE DELEPLANQUE 55 GRACE OLUOCH 50 MBA BComm, CPA (K) 7PLYYLQVPULK3HMHYNLPU HZ*-63HMHYNL=LULa\LSH^OPJOYVSLOLOLSK\U[PS1\UL .YHJLWYL]PV\ZS`^VYRLKH[ VASILEIOS KARALIS 46 JEAN-MICHEL PONS 42 MSc International Banking & Finance, BSc Mathematics MSc Engineering =HZPSLVPZ^VYRLKPU7YPJL^H[LYOV\ZL*VVWLYZ.YLLJLMVYMV\Y`LHYZILMVYLQVPUPUN3HMHYNL 1LHU4PJOLSQVPULK3HMHYNL/VSJPTPUHZ*V\U[Y`)\ZPULZZ+L]LSVWTLU[+PYLJ[VY .YLLJLPU HZHUHUHS`Z[^P[OPU[OL-PUHUJL+LWHY[TLU[/L^HZZ\IZLX\LU[S` (SNLYPH :LYIPHHM[LY^OPJOOL^HZWYVTV[LK[V0UUV]H[PVU+PYLJ[VY(SNLYPH[OLU[V WYVTV[LK[V(ZZPZ[HU[*VU[YVSSLY0UK\Z[YPHS *HWL_HUK[OLU6WLYH[PVUZ*VU[YVSSLY0U *V\U[Y`*OPLM,_LJ\[P]L6ѝJLY4VSKV]H)LMVYLQVPUPUN3HMHYNL1LHU4PJOLSOHK^VYRLK OLTV]LK[V3HMHYNL:(PU-YHUJLHZ0U]LZ[TLU[HUK4 (7YVQLJ[Z4HUHNLYHM[LY PU:HPU[.VIHPU9\ZZPHMVYMV\Y`LHYZ ^OPJOOL^HZ[YHUZMLYYLK[V3HMHYNL0UKVULZPHHZ*VU[YVSSPUN=PJL7YLZPKLU[-VSSV^PUN /L^HZHWWVPU[LK[V[OL)VHYKVU 1\UL HUKPZ[OL4HUHNPUN+PYLJ[VY/PTH [OLTLYNLYPU =HZPSLVPZ^HZHWWVPU[LK[OL/VSJPT0UKVULZPH/LHKVM*VU[YVSSPUN0U Cement Limited. OL^HZHWWVPU[LK[OL4PKKSL,HZ[ (MYPJH9LNPVUHS*VU[YVSSLYHWVZP[PVUOLOLSK \U[PSILNPUUPUNVM ^OLUOL^HZHWWVPU[LK/LHKVM-PUHUJL,HZ[ :V\[O(MYPJHHUK Indian Ocean. Executive Director Non Executive Director /L^HZHWWVPU[LK[V[OL)VHYKVU4HYJO SEDDIQ HASSANI 50 BETTY KANYAGIA 45 MSc Eng Mechanics, MSc Eng Aeronautics, PhD Mechanics LLB, CPS (K), MCIArB :LKKPX^VYRLKHZHUH\KP[VYHUK:[YH[LN`JVUZ\S[HU[PU(Y[O\Y(UKLYZLU*HZHISHUJH )L[[`WYHJ[PZLK^P[OHSH^ÄYTPU5HPYVIPILMVYLQVPUPUN7YPJL^H[LYOV\ZL*VVWLYZ;H_HUK ILMVYLQVPUPUN3HMHYNL4VYVJJV;OLYLOLOLSKZL]LYHSWVZP[PVUZPUJS\KPUN*VU[YVS 3LNHS:LY]PJLZ+LWHY[TLU[HZH*VUZ\S[HU[:OLQVPULK)HTI\YP*LTLU[3PTP[LKPU 4HUHNLY*,63HMHYNL.`WZ\T4VYVJJV7\YJOHZPUN 3VNPZ[PJZ+PYLJ[VYHUK4HYRL[PUN HZ[OL*VTWLUZH[PVUHUK)LULÄ[Z4HUHNLYHWVZP[PVUZOLOLSK\U[PSZOL[VVRV]LYHZ :[YH[LN`+PYLJ[VY\U[PSOL^HZHWWVPU[LK[OL3HMHYNL/VSJPT/LHKVM.YV^[O 0UUV]H[PVU *VTWHU`:LJYL[HY`PU1\UL MVY4PKKSL,HZ[HUK(MYPJHPU )L[[`PZH*VTTPZZPVULYMVY6H[OZHUK5V[HY`7\ISPJ:OLPZHTLTILYVM[OL3H^:VJPL[` :LKKPX^HZHWWVPU[LK[V[OL)VHYKHZ.YV\W4HUHNPUN+PYLJ[VYVU -LIY\HY` VM2LU`H[OL*OHY[LYLK0UZ[P[\[LVM(YIP[YH[VYZ[OL0UZ[P[\[LVM*LY[PÄLK7\ISPJ:LJYL[HYPLZ VM2LU`HHUK[OL*VTTVU^LHS[O3H^`LYZ(ZZVJPH[PVU /LPZHTLTILYVM[OL5VTPUH[PVU9LT\ULYH[PVU /9*VTTP[[LLHUK[OL/PTH*LTLU[ 3PTP[LK)VHYKVM+PYLJ[VYZ Secretary Executive Director 22 23 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW Executive Committee Members SEDDIQ HASSANI Group Managing Director 6\YSLHKLYZOPW[LHTLUZ\YLZ[OH[)HTI\YP»ZYLZV\YJLZHYLKLWSV`LKLќLJ[P]LS`^P[OHMVJ\ZVUTH_PTPaPUNKL]LSVWTLU[ PTWHJ[HUKTLL[PUN[OLULLKZVMV\YJSPLU[Z)HTI\YP»Z4HUHNLTLU[;LHTILULÄ[ZMYVT`LHYZVMKL]LSVWTLU[L_WLYPLUJL HKP]LYZP[`VMRUV^SLKNLHUKKPZ[PUJ[J\S[\YHSWLYZWLJ[P]LZ;OL[LHTZOHWLZV\YZ[YH[LNPLZHUKWVSPJPLZWVZP[PVUPUN )HTI\YP[VJYLH[LVWWVY[\UP[PLZ^OLYL[OL`HYLULLKLKTVZ[ GRACE OLUOCH KANYI GITONGA Finance Director Sales Director IRENE NAIBO MOSES WERE Human Resource & Organization Director Supply Chain Director LAURENT NOËL JACK HYUN 25 24 Growth Director Plant Manager (Mom Plant) 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 1 2019 OVERVIEW 2 BUSINESS REVIEW 26 27 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 2 BUSINESS REVIEW What we do We offer a wide range of application based cement products that are specially designed for different requirements Readymix Concrete in response to our customer needs WYLTP_LKJVUJYL[LKLSP]LYLK[VJ\Z[VTLYZP[LHZYLHK`[V\ZL+LSP]LYZ VUX\HSP[`HUKJVU]LUPLUJL BamburiBlox OPNOX\HSP[`WYLJHZ[JVUJYL[LWH]PUNISVJRZ[OH[VќLYH]HYPL[`VM WH]PUNZVS\[PVUZ=HYPL[`VMKLZPNUZHUKHLZ[OL[PJZMLH[\YLZ[VTLL[ KPќLYLU[[HZ[LZ CONCRETE PRODUCTS Precast Mould H]HYPL[`VMTV\SKLKWYLJHZ[JVUJYL[LWYVK\J[ZMVY]HYPV\Z\ZLZ¶ YHUNPUNMYVTISVJRKYHPUHNLOVSSV^ISVJRZYVHKRLYIZLKNLYLZ[YHPU[Z [VMLUJPUNWYVK\J[ZHTVUNV[OLYZ Application based product brands FUNDI MC 22.5 HUL^THZVUY`JLTLU[ILZ[Z\P[LKMVYTVY[HY^VYRZZ\JOHZWSHZ[LYPUN YLUKLYPUNISVJRSH`PUNZJYLLKHUKYLWHPY^VYRZ TEMBO 32.5 HNLULYHSW\YWVZLJLTLU[^P[O^PKLHWWSPJH[PVUZPUKVTLZ[PJJVUZ[Y\J[PVU WYVQLJ[ZPUJS\KPUNTVY[HY^VYRZZ[Y\J[\YHSHWWSPJH[PVUZSV^HUKTLKP\T CEMENT Z[YLUN[OJVUJYL[L NGUVU 32.5 R HYHWPKZL[[PUNJLTLU[^P[O^PKLHWWSPJH[PVUZMYVTKVTLZ[PJJVUJYL[L[V SHYNLI\PSKPUNHUKJVUZ[Y\J[PVUWYVQLJ[Z0[PZHSZVZ\P[LKMVYWYLJHZ[JVUJYL[L HWWSPJH[PVUZ Bamburi Haller Park MULTIPURPOSE HNLULYHSW\YWVZLJLTLU[^P[OH^PKLYHUNLVMHWWSPJH[PVUZPUJVUZ[Y\J[PVU 32.5 MYVTKVTLZ[PJJVUJYL[L[VSHYNLI\PSKPUNWYVQLJ[Z0[ZNVVKZ[YLUN[OWLYMVYTHUJL H^VYSKMHTV\ZLJVSVNPJHSHUKLJV[V\YPZT THRLZP[Z\P[HISLMVYIV[ONLULYHSW\YWVZLHUKZ[Y\J[\YHSJVUJYL[LHWWSPJH[PVUZ ZOV^JHZL^OPJO^HZVUJLH)HTI\YPX\HYY` ^HZ[LSHUKHUK^HZYLOHIPSP[H[LKPU[VHYPJO SUPASET 32.5 MHZ[ZL[[PUNJLTLU[MVYWYLJHZ[HUKOPNOLHYS`Z[YLUN[OHWWSPJH[PVUZ0[ZOPNOLHYS` KP]LYZL[YVWPJHSLJVZ`Z[LT/HSSLY7HYRPZH Haller Park Z[YLUN[OHUKYHWPKZL[[PUNMLH[\YLZVќLYZPTWYV]LK[\YUHYV\UKK\YPUNWYVK\J[PVU YLJYLH[PVUHSOV[ZWV[PKLHSMVYL_WLYPLU[PHS VMWYLJHZ[WYVK\J[Z SUSTAINABILITY SLHYUPUNHUKZLYLULV\[KVVYL_WLYPLUJLZ0[ POWERMAX 42.5 HWYLTP\TISLUKLKJLTLU[[OH[JVTIPULZL_JLSSLU[Z[YLUN[OWLYMVYTHUJLH[ VќLYZH]HYPL[`VMH[[YHJ[PVUZ[VLK\JH[LYHPZL HSSZ[HNLZ^P[O]LYZH[PSP[`HUKLUOHUJLKK\YHIPSP[`ILULÄ[Z0[PZILZ[Z\P[LKMVY H^HYLULZZHUKLU[LY[HPU]PZP[VYZ"HUKPZOVTL WYVQLJ[Z^OLYLOPNOJVUJYL[LZ[YLUN[OZYHWPKKLTV\SKPUNHUKJVUZ[Y\J[PVU [VHKP]LYZLYHUNLVM^PSKHUPTHSZ ZWLLKPZYLX\PYLK POWERPLUS HW\YLJLTLU[^P[OZ\WLYPVYWLYMVYTHUJLILZ[Z\P[LKMVYOPNOZ[YLUN[OJVUJYL[L 42.5 ^VYRZ Bamburi Forest Trails DURACEM 42.5 HWYLTP\TJLTLU[[OH[PZLUNPULLYLKMVYZWLJPHSPaLKHWWSPJH[PVUZ[VWYV]PKL H]LYKHU[JVVSMVYLZ[^P[OVWLUNYHZZSHUKZ LH/SR Z\WLYPVYZ\SWOH[LYLZPZ[HUJL]LY`SV^OLH[HUKL_JLSSLU[Z[YLUN[O0[Z HUKÄ[ULZZ[YHPSZ[YHUZMVYTLKMYVTH)HTI\YP HWWSPJH[PVUZPUJS\KLIYPKNLZPUJVHZ[HSHYLHZWPLYZ^OHY]LZKLLWYHM[ZKHTZ X\HYYPLKIHYYLUSHUKZJHWL0[»ZJVVSZLYLULHUK HUK^H[LY[YLH[TLU[^VYRZ MYLZOHTIPLUJLMYLLMYVTUVPZLTHRLZP[HUPKLHS Forest Trails KLZ[PUH[PVUMVYV\[KVVYHJ[P]P[PLZL]LU[ZHUK RAPIDSET 42.5R YHWPKOHYKLUPUNJLTLU[THKLMVYHUPJOLWYLJHZ[JVUJYL[LTHYRL[(]HPSHISLPU RNIHNZ9(70+:,;VќLYZILULÄ[ZSPRLZWLLKZ[YLUN[OHUKSV^JVZ[[V[OL L_J\YZPVUZ;OLÄ[ULZZ[YHPSZHYL\ZLKMVYSLPZ\YL JVUZ\TLY ^HSRPUNQVNNPUNHUKJ`JSPUN POWERCRETE HU\S[YHOPNOZ[YLUN[OJLTLU[LZWLJPHSS`PKLHSMVYHWWSPJH[PVUZZ\JOHZWYL 52.5 Z[YLZZLKJVUJYL[LYHPS^H`ZSLLWLYZZR`ZJYHWLYMV\UKH[PVUZWYLJHZ[ZSHIZHUK Geocycle ILHTZIYPKNLZV]LYWHZZLZ^PUKTPSSMV\UKH[PVUZOLH]`K\[`PUK\Z[YPHSÅVVYZ and many more. VќLYPUNZ\Z[HPUHISL^HZ[LTHUHNLTLU[ ZVS\[PVUZ[VPUK\Z[YPLZHUKT\UPJPWHSP[PLZ +PZWVZHS[OYV\NOJVWYVJLZZPUNPUJLTLU[RPSUZ" HZHMLHUKTVYLYLZWVUZPISLZVS\[PVU[V^HZ[L management. 28 29 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Operational Review The Cement Market in East Africa recorded a mixed performance in 2019 Group 0U [OL.YV\WJVU[PU\LK[VL_LJ\[LP[Z:[YH[LN`¶ ¸)\PSKPUNMVY.YV^[O¹)V[O)HTI\YP*LTLU[3PTP[LK)HTI\YP Cement) in Kenya and Hima Cement Limited (Hima Cement) in 32 33 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Operational Review Bamburi Cement Limited Bamburi Special Products Lafarge Eco Systems Limited 0U 2LU`HJLTLU[THYRL[JVU[YHJ[LKI` Limited ;OPZPZHM\SS`V^ULKZ\IZPKPHY`VM)HTI\YP [VJSVZLH[ 4; ! 4;KLZWP[L[OL *LTLU[RUV^UMVYP[ZWYVMLZZPVUHSPZTPUX\HYY` ;OPZPZH^OVSS`V^ULKZ\IZPKPHY`VM[OL LJVUVT`NYV^PUNH[ ;OPZ^HZVUHJJV\U[VM YLOHIPSP[H[PVULJVZ`Z[LTZKL]LSVWTLU[ .YV\WHUK[OLSHYNLZ[Z\WWSPLYVM9LHK` ZSV^KV^UPUJVUZ[Y\J[PVUHJ[P]P[PLZPU[OLPUKP]PK\HS JVUZLY]H[PVUTHUHNLTLU[HUKPUWYVTV[PUN TP_*VUJYL[LHUK7YLJHZ[ISVJRZPU2LU`H OVTLI\PSKLYZHUKPUMYHZ[Y\J[\YLZLNTLU[Z6U[OL LK\JH[PVUHUKH^HYLULZZPU[OLHMVYLTLU[PVULK +LZWP[L[OLWYL]HPSPUNJOHSSLUNLZPU[OL PUMYHZ[Y\J[\YLMYVU[[OLÅHNZOPW:[HUKHYK.H\NL ÄLSKZ6]LY[OL`LHYZ[OLJVTWHU`OHZ Kenya JVUZ[Y\J[PVUZLJ[VYTHPUS`THYRL[KLJSPULHUK 9HPS^H`:.9WYVQLJ[^HZ[LYTPUH[LKH[WOHZL( ILLUYLOHIPSP[H[PUNKLJVTTPZZPVULKX\HYY` JVTWL[P[P]LWYPJLWYLZZ\YL)HTI\YP:WLJPHS ^OPJOLUKLKH[5HP]HZOH;OLHU[PJPWH[LK7OHZL) SHUKZJHWLZHUK[YHUZMVYTPUN[OLTPU[V 7YVK\J[»ZWYVÄ[HIPSP[`PUJYLHZLK[V:OZ ^OPJO^HZ[VL_[LUK[OL:.9SPUL\W[V[OL>LZ[LYU L_JLW[PVUHSUH[\YLYLZLY]LZ[OH[Z\WWVY[]PIYHU[ TPSSPVU !:OZ TPSSPVUVUHJJV\U[VM 2LU`H[V^UVM2PZ\T\HUK^OPJO^HZL_WLJ[LK[V LJVZ`Z[LTZ)HTI\YP/HSSLY7HYRHUK)HTI\YP PUUV]H[PVUHUKJVZ[YLZ[Y\J[\YPUN JVTTLUJLPU KPKUV[TH[LYPHSPZLVUHJJV\U[VM -VYLZ[;YHPSZHYL^VYSKYLUV^ULKLJVSVNPJHS M\UKPUNJVUZ[YHPU[Z*LTLU[JVUZ\TW[PVUI`[OL:.9 +\YPUN[OL`LHY)HTI\YP:WLJPHS7YVK\J[Z ZOV^JHZLZ[OH[KLTVUZ[YH[LV\YJVTTP[TLU[ WYVQLJ[PU K\YPUN[OLJVUZ[Y\J[PVUVM7OHZL( KL]LSVWLK)HTI\YP 34 35 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Operational Review .YV\W7YVÄ[HIPSP[` .YV\W*HZOÅV^ .YV\W;\YUV]LYH[:OZ IU !:OZ IU .YVZZJHZOÅV^NLULYH[LKMYVTVWLYH[PVUZPU H[:OZ YLNPZ[LYLKHKLJSPULVM V]LYWYPVY`LHYK\L[V[OL IU^HZULHYS`H[[OLZHTLSL]LSHZPUWYPVY`LHY H[ KPZJVU[PU\H[PVUVM9^HUKHL_WVY[ZHUK[OLZOLS]PUNVM :OZ IU/V^L]LY[OL.YV\WWHPKSV^LY[H_LZI`:OZ 7OHZL)VM[OL:[HUKHYK.H\NL9HPS^H`:.9WYVQLJ[ TPU JVTWHYLK[V V^PUN[V[OLPU]LZ[TLU[ PU2LU`H:LSSPUNWYPJLZHSZVKLJSPULKPUJVTWHYPZVU[V KLK\J[PVUILULÄ[HYPZPUNMYVT[OLJVTTPZZPVUPUNVM[OL SL]LSZVUHJJV\U[VMJVTWL[P[P]LWYLZZ\YLM\LSSLKI` JHWHJP[`L_WHUZPVUWYVQLJ[ZI`IV[O)HTI\YPHUK/PTH V]LYJHWHJP[`PU[OLJLTLU[THYRL[ PU ^OPSLPU [OLYLZPK\HSILULÄ[VUS`PTWHJ[LK )HTI\YP;V[OLJVU[YHY`[OLPU[LYLZ[IPSSPU VM:OZ ;OL.YV\WOHZYLZ[H[LKP[ZWYL]PV\ZS`YLWVY[LK6WLYH[PUN T:OZ TPU ^HZKV\ISL[OLWYL]PV\Z`LHY 7YVÄ[MVY[OL-PUHUJPHS@LHY MYVT:OZ T[V:OZ SL]LSVUHJJV\U[VM[OLM\SS`LHYPTWHJ[VM[OLJVZ[VM[OL TI`[HRPUNHUHKKP[PVUHSHJJY\HSVM:OZ T^OPJO KLI[[HRLUI`/PTH[VÄUHUJL[OLJHWHJP[`L_WHUZPVU YLSH[LZ[V[OLYLJVNUP[PVUVM=(;SPHIPSP[`PTWHJ[PUN WYVQLJ[;OLUL[PTWHJ[VMOPNOLYPU[LYLZ[HUKSV^LY[H_LZ Uganda I\[^HZUV[HJJY\LK[OLU;OLSPHIPSP[`^HZIYV\NO[[V[OL Hima Cement Limited WHPKVM:OZ T^HZSHYNLS`[OLKYP]LYVM[OLOPNOLYUL[ H[[LU[PVUVMTHUHNLTLU[]PHHTHUHNLTLU[JVTTPZZPVULK JHZONLULYH[LKMYVTVWLYH[PUNHJ[P]P[PLZ^OPJONYL^I`:OZ 0U 36 37 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT PRODUCTS, SERVICES & SOLUTIONS ROAD INTEGRATED HYDRAULIC ROAD BINDERS AND SERVICES OFFER FOR BETTER ROADS 2 BUSINESS REVIEW Franchise Network Highlights 2019 Our Projects Binastore >OLU[OL*VTWHU`Z[HY[LK[YHKPUNPU4H` [OLPUP[PHSZ[YH[LN`^HZ[VVWLYH[LP[ [OYV\NOIYHUKLKMYHUJOPZLZ[VYLZ^OPJO ^V\SKI\`[OPYKWHY[`JVTWSLTLU[HY` WYVK\J[ZMYVT[OL)PUHZ[VYLW\YJOHZPUN WSH[MVYT^OPSLZLSSPUN)HTI\YPIYHUKLK cement. 0U [OLYL^HZJOHUNLPUZ[YH[LN`;OL *VTWHU`Z[VWWLKYLJY\P[PUNHUKIYHUKPUN MYHUJOPZLZHUKPUZ[LHKVWLULK[OL)PUHZ[VYL W\YJOHZPUNWSH[MVYT[VHSS)HTI\YPJLTLU[ YL[HPSLYZ;OPZJOHUNLYLZ\S[LKPU[OL*VTWHU` ZLSSPUN[OPYKWHY[`WYVK\J[Z[VTVYL[OHU YL[HPSLYZK\YPUN[OL`LHYJVTWHYLK[VVUS` MYHUJOPZLZ[VYLZPU Rehabilitation of Old Mombasa Road >P[OH]PL^VMHJOPL]PUNIL[[LYTHYNPUZHUK YLK\JPUNYLSPHUJLVUSVJHSZ\WWSPLYZ[OL -VSSV^PUN[OLZ\JJLZZM\SJVTWSL[PVUHUKJVTTPZZPVUPUNVM *VTWHU`HSZVLTIHYRLKVUPTWVY[PUNZVTL [OLJHWHJP[`PUJYLHZLWYVQLJ[H[[OL5HPYVIP.YPUKPUN7SHU[ WYVK\J[Z;^VZOPWTLU[Z^LYLZ\JJLZZM\SS` 5.7PU [OYV\NOHZ[YH[LNPJPU]LZ[TLU[VM<:+T PTWVY[LK^P[O[OLZ[HUKUKZOPWTLU[Z HUHKKP[PVUHSWYVK\J[PVUJHWHJP[`VM TL[YPJ[VUZ HJOPL]PUN HUK VMPTWVY[LKZ[VJR WLY`LHY^HZPUQLJ[LK ZHSLZI`[OLLUKVM YLZWLJ[P]LS` ;OPZÄYZ[WOHZLVM[OLWYVQLJ[PUJYLHZLK)HTI\YP*LTLU[»Z +LZWP[L[OLJOHUNLPUZ[YH[LN`[OL*VTWHU` [V[HSHUU\HSNYPUKPUNJHWHJP[`VMP[Z2LU`HIHZLK7SHU[Z Z[PSSYLHSPZLKHUVWLYH[PUNSVZZMVY[OL`LHYVM [VTL[YPJ[VUULZHKKYLZZPUN[OLWYVQLJ[LKKLTHUKPU :OZ TPSSPVUHNHPUZ[WYL]PV\Z`LHY»ZSVZZVM IV[OKVTLZ[PJHUKYLNPVUHSTHYRL[ZKYP]LUI`NYV^[OPU[OL :OZTPSSPVU;OPZ^HZTHPUS`H[[YPI\[LK JVUZ[Y\J[PVUZLJ[VY [VSV^LYZHSLZHUKTHYNPUJVTWHYLK[V ;VLќLJ[P]LS`[YHUZWVY[[OLHKKP[PVUHSJHWHJP[`[OLWYVQLJ[ Ä_LKJVZ[ZPU[OL*VTWHU`»ZZLJVUK`LHYVM J\STPUH[LKPU[OLYLOHIPSP[H[PVUVM[OLKPSHWPKH[LKRT6SK operation. 4VTIHZH9VHK(Z[YL[JO[V[OLWSHU[ Future Outlook ;OLYLOHIPSP[H[PVU^HZKVUL[OYV\NOH7HY[ULYZOPW^P[O )PUHZ[VYLPZVW[PTPZ[PJVUPTWYV]PUNP[»Z 2LU`H5H[PVUHS/PNO^H`(\[OVYP[`2LU/([VJVUJYL[L IV[[VTSPULPU[OYV\NOPUJYLHZLKPTWVY[Z Z\YMHJLZ[HUKHYKZ ^P[OIL[[LYTHYNPUZPUJYLHZLKSL]LYHNPUNVU ;OLYVHK^HZKLZPNULK[V^P[OZ[HUKOLH]`[Y\JR[YHѝJ )HTI\YPZHSLZ[LHTHUKHJ[P]LPU]VS]LTLU[PU HUKZ[VYT^H[LYKYHPUHNL0[PZJVUZPKLYLKHILZ[WYHJ[PJL ZLSSPUN[OPYKWHY[`WYVK\J[Z[VHJOPL]LIL[[LY ZOV^JHZLI`2LU/(JVTWS`PUN^P[OSVJHSHUKPU[LYUH[PVUHS ZHSLZ Z[HUKHYKZ ;OL<:+ TUYVHKYLOHIPSP[H[PVUWYVQLJ[^HZJVTWSL[LK ZHMLS`VU[PTLHUKVUI\KNL[PU1\UL VќLYPUN 900,000 \UX\LZ[PVUHISLK\YHIPSP[`HUKSV^THPU[LUHUJLJVZ[ZPU JVTWHYPZVU[VIP[\TLUYVHKZ metric tons In view of achieving :WLJPHSJVUJYL[L^HZZ\WWSPLKI`)HTI\YP:WLJPHS additional production capacity 7YVK\J[ZHUKPTWYV]LKV\YZ[HRLOVSKLYZ»L_WLYPLUJLZ better margins and LZWLJPHSS`PUYLK\JPUN[Y\JR[\YUHYV\UK[PTL¶MVYIV[O per year was injected. JLTLU[HUKYH^TH[LYPHS[Y\JRZ reducing reliance Commencement of Capacity Increase Phase II (Project on local suppliers, Indigo) 0U )HTI\YPLTIHYRLKVU7OHZL00VM[OLJHWHJP[` the Company PUJYLHZLJVKLUHTLK0UKPNV[VJHYY`V\[HMLHZPIPSP[`Z[\K` [VHK]PZLHJSPURLYJHWHJP[`PUJYLHZLZ[YH[LN`MVSSV^PUN also embarked on Z\JJLZZM\SJVTWSL[PVUHUKHWWYV]HSVM[OLVWWVY[\UP[` Z[\K`;OLWYVQLJ[HPTZH[PUJYLHZPUNJSPURLYWYVK\J[PVU importing some of the JHWHJP[`I`JVUZ[Y\J[PUNHZ[H[LVM[OLHY[NYLLUÄLSKJSPURLY products. plant in Kenya. 40 41 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Marketing Highlights Kenya at a glance DURACEM launched TEMBO reformulated Bamburi introduced ;OL*VTWHU`HSZV +<9(*,49 H YLMVYT\SH[LKP[ZNLULYHS :\SWOH[LYLZPZ[HU[JLTLU[ W\YWVZLJLTLU[[V 4HU\MHJ[\YLKH[4VTIHZH PUJS\KLISHZ[M\YUHJL 7SHU[+<9(*,4PZ ZSHNTHRPUNP[IYPNO[LYPU LUNPULLYLKMVYZWLJPHSPaLK JVSVYHUKLUOHUJPUNP[Z HWWSPJH[PVUZ[VWYV]PKL Z\P[HIPSP[`MVYWSHZ[LYHUK Z\WLYPVYZ\SWOH[LYLZPZ[HUJLSV^OLH[HUKL_JLSSLU[ ÄUPZOPUN;OLPUJS\ZPVU Z[YLUN[O;OLWYVK\J[PZ[HYNL[LKH[OPNOZ[YLUN[O VMZSHN^OPJO^HZKVULHZWLY2LU`H)\YLH\VM THYPULWYVQLJ[ZSPRLIYPKNLZWPLYZX\H`Z^OHY]LZ :[HUKHYKZZWLJPÄJH[PVUPTWYV]LK\W[HRLVM;,4)6 KHTZ^PUKTPSSMV\UKH[PVUZHZ^LSSHZJVS\TUZHUK H^LSSSPRLKIYHUKPUHOPNOS`JVTWL[P[P]LTHYRL[ ZSPWMVYT^VYRZ Interacting with Architects, Zawadi Challenge Engineers and Developers AH^HKPPU JHTLVMHNLH[[YHJ[PUN )HTI\YPJVU[PU\LKZ[YLUN[OLUPUNYLSH[PVUZOPWZ UV[VUS`TVYLWHY[PJPWH[PVUI`YL[HPSLYZ ^P[ORL`WHY[ULYZHUKJ\Z[VTLYZ^OPSZ[ I\[HSZVZ[YH[LNPJWHY[ULYZ^PSSPUN KYP]PUNP[ZSVUN[LYTHNLUKHVMPTWYV]PUN [VZWVUZVYHUKWHY[PJPWH[LPU[OL 1,175 WYVMLZZPVUHSPZTPUJVUZ[Y\J[PVU;OL[LHTZ WYVNYHTZ\JOHZ0Z\a\(WL_HTVUN customers PU[LYHJ[LK^P[OZ[HRLOVSKLYZHUKJ\Z[VTLYZ V[OLYZ3V`HSJ\Z[VTLYZJVU[PU\L[V won [OYV\NOMYLX\LU[PUK\Z[Y`WSH[MVYTZZ\JOHZ[OL ILYLJVNUPaLKHUKYL^HYKLK[OYV\NO HUU\HS(YJOP[LJ[ZHUK,UNPULLYZ*VU]LU[PVU AH^HKP*OHSSLUNL^OPJOOHZNVULH 7YVWLY[`+L]LSVWLYZ*VUMLYLUJLHUKMVY\TZI` SVUN^H`[VPUYLSH[PVUZOPWI\PSKPUN [OL5H[PVUHS*VUZ[Y\J[PVU(\[OVYP[` POWERMAX at Retail ;VKYP]L\W[HRLVM POWERMAXH[[OL3HRL 27 HUK*VHZ[9LNPVUZ towns countrywide 4HYRL[PUN^VYRLK^P[OH visited [LHTVM*VUZ[Y\J[PVU ZP[LHK]PZVYZ^OVLUNHNLK MVYLTLUHUKJVU[YHJ[VYZH[ TLKP\TSHYNLJVUZ[Y\J[PVU 2,019 ZP[LZLK\JH[PUN[OLTVUPOWERMAX value fundis met WYVWVZP[PVU^OPJOLU[HPSLKL_WSHPUPUN[OLJVZ[ ZH]PUNILULÄ[J\Z[VTLYZ^V\SKLUQV`VU\ZPUN POWERMAX.;OYV\NO[OL:P[L(K]PZVYJHTWHPNU ZP[LZ^LYL]PZP[LK THZVUZHUK Builders Academy JVUZ[Y\J[PVUJVTWHUPLZLUNHNLK6]LY SLHKZ ^LYLNLULYH[LKHUKZHSLVMPOWERMAX, NGUVU )\PSKLYZ(JHKLT`JVU[PU\LZ[VILHJYP[PJHSJVTWVULU[MVY and TEMBO )HTI\YP[VKYP]L[OLHNLUKHVM7YVMLZZPVUHSPZTPU)\PSKPUN HJYVZZ[OLJV\U[Y`;OYV\NO[OLMVY\T)HTI\YPZ[YP]LZ[V ZOHYLI\PSKPUNRUV^SLKNL^P[OHNVHSVMPTWYV]PUNZRPSSZVM Mystery Shopper Promotion HZTHU`THZVUZHZWVZZPISL )\`LYZVMV\YJLTLU[IYHUKZ^LYLPUZ[HU[S`YL^HYKLK ^P[OHMYLLIHNVMJLTLU[MVYL]LY` IHNZIV\NO[;OL ZP_^LLRWYVTV[PVUPU]VS]LK OHYK^HYLZ[VYLZHUK TVYL[OHU THZVUZ^LYLYL^HYKLK;OLWYVTV[PVU SLK[VHUPUJYLHZLPU]VS\TLZPU[OLYLNPVUZP[^HZ 42 actived. 43 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Marketing Highlights Our strengthened high Uganda at a glance performance culture is 7YVK\J[HUK0UUV]H[PVUPU ^LVW[PTPaLKKL]LSVWLKHUKSH\UJOLKUL^WYVK\J[Z[VKYP]LTHYRL[ZOHYL>LHSZV LUNHNLKPUHNNYLZZP]L[YHKLTHYRL[PUN[VI\PSKIYHUKH^HYLULZZWLUL[YH[LUL^THYRL[ZHUKJYLH[LHIYHUKW\SS underpinned by values of trust and integrity. RAPIDSET launched ROADCEM launched 9(70+:,;PZHVULVM 96(+*,4^HZKL]LSVWLK P[ZRPUKWYVK\J[PU[LYTZ HZHUPUUV]H[P]LWYVK\J[ of mix and performance PKLHSMVYZ[HIPSPaH[PVUVM THKLMVYHUPJOLWYLJHZ[ YVHKZ\IIHZLZHZ^LSSHZ THYRL[WHJRHNLKPU extending life for gravel HO`IYPKRNIHN YVHKZ0U /PTH^HZ 9(70+:,;VќLYZILULÄ[ZSPRLZWLLKZ[YLUN[O HISL[VZLSSH[V[HSVM [VUZVM[OLJLTLU[ HUKSV^JVZ[[V[OLJVUZ\TLY MVYYVHKZ\IIHZLZ[HIPSPaH[PVUHWWSPJH[PVUZ Launched FUNAMU NE HIMA Loyalty campaign (UH[PVU^PKLJ\Z[VTLY loyalty campaign tagged HIMA MOBILE APP now in the ¸-\UHT\UL/PTH¹^HZ market! conducted in a bid to ;OYV\NOWHY[ULYZOPW^P[O?LU[L Z\WWVY[NLULYHS[YHKL an innovative e-commerce NHPUIHJRTHYRL[ZOHYL WSH[MVYT[OL/PTH*LTLU[ HUKJV\U[LYZOHYLSVZZ (WW^HZSH\UJOLKPU6J[VILY ;OLVUNVPUNJHTWHPNU VќLYPUNJ\Z[VTLYZLHZL PZZL[[VY\UMVY PU[OLW\YJOHZLVMJVUZ[Y\J[PVU `LHY^P[OJ\Z[VTLYZ TH[LYPHSZ ^OVTLL[[OLPY[HYNL[Z ^PUUPUNZJOVVSMLLZHUKTLKPJHSPUZ\YHUJLMVY[^V MHTPS`TLTILYZ Sponsorships to build Meet the customer market storms brand image ;OLJVTTLYJPHS[LHTHUK,_JVJVU[PU\V\ZS` Hima Cement maintained LUNHNLK^P[OJ\Z[VTLYZ[OYV\NO4HYRL[:[VYTZ ZWVUZVYZOPWZMVY[VW HUK;YHKL]PZP[ZL]LY`TVU[O[VI\PSKIL[[LY ZWVY[ZJS\IZ!/PTH*LTLU[ \UKLYZ[HUKPUNVM[OLJ\Z[VTLYULLKZHUKPTWYV]L /LH[OLUZ9\NI`*S\I VUZLY]PJLKLSP]LY` -VV[IHSS.PHU[Z=PWLYZHUK RPJRIV_PUNMLTHSLHJL Patricia Apolot in a bid [VI\PSKIYHUKH^HYLULZZ JYLH[LL_JP[LTLU[HUKZ[H`[VWVMTPUK >LJVU[PU\LK[VZ\WWVY[Z[HRLOVSKLYZ[OYV\NOZWVUZVYZOPW VM[OL*LTLU[HUK/HYK^HYL+LHSLYZ(ZZVJPH[PVU*/(+( L_WVZYLNPVUHSKLHSLYLUNHNLTLU[Z^OLYLKLHSLYZ^LYL [HRLUMVYHZP[L]PZP[VMV\YUL^WSHU[PU;VYVYVHUK[OL[VW WLYMVYTPUNJ\Z[VTLYZYL^HYKLKMVY[OLPYSV`HS[` 44 45 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Health and Safety Kenya Road Safety 6\Y/LHS[OHUK:HML[`/ :WLYMVYTHUJL^HZPTWHJ[LKI`VULYVHKMH[HSP[`HUKMV\Y3VZ[;PTL Road Safety Campaign 0UJPKLU[Z3;0ZPUV\Y4VTIHZH7SHU[7SHUZ^LYLW\[PUWSHJL[VYL]LYZL[OPZ[YLUKPUHUK 0U )HTI\YP*LTLU[WHY[ULYLK^P[O[OL5H[PVUHS IL`VUK;OLYL^LYLZVTLWVZP[P]LYLZ\S[ZZ\JOHZ JSVZ\YLVMHJ[PVUZVM[OLZ[YH[LNPJ/LHS[OHUK ;YHUZWVY[:HML[`(\[OVYP[`5;:(4HJOHRVZ*V\U[` .V]LYUTLU[HUKV\Y[YHUZWVY[LYZ[VTHYR[OL[O(UU\HS :HML[`0TWYV]LTLU[7SHU/:07HKKP[PVUHSS`[OLYL^HZPTWYV]LTLU[PU[OLX\HSP[`=PZPISL7LYZVUHS 9VHK:HML[`JHTWHPNU[OH[PU]VS]LKZLUZP[PaPUNKYP]LYZ *VTTP[TLU[Z=7*ZJVTWHYLK[V TV[VYIPRLYPKLYZWLKLZ[YPHUZHUKV[OLYYVHK\ZLYZVUYVHK ZHML[`HSVUN[OL5VY[OLYU*VYYPKVYHUKV[OLYYVHKZPU[OL country. )HTI\YP*LTLU[HZVULVM[OLSHYNLZ[JVU[YPI\[VYZ[V[OL U\TILYVM]LOPJSLZVU2LU`HUYVHKZ^P[OIL[^LLU ¶[Y\JRZ[YHUZWVY[PUN)HTI\YP»ZYH^TH[LYPHSZHUK WYVK\J[ZJV]LYPUNV]LYTPSSPVURPSVTL[LYZWLYHUU\T SH\UJOLK[OPZYVHKZHML[`WYVNYHTPU ;OLWYVNYHT PZHUJOVYLKVU+YP]LY4HUHNLTLU[=LOPJSL4HUHNLTLU[ Journey Management, Load Management and Contractor 4HUHNLTLU[HZ^LSSHZHUU\HS[YHPUPUNMVYV]LY KYP]LYZ TV[VYJ`JSPZ[ZHUKV[OLYYVHK\ZLYZVUYVHK ZHML[`HUKKLMLUZP]LKYP]PUN,HJO`LHY[OLKYP]LYZNL[ HUU\HSYLMYLZOLYZ^OPSLIVKHIVKHYPKLYZOH]LILLU [YHPULKHSVUN[OL5VY[OLYU*VYYPKVYJVU[YPI\[PUN[V[OL YLK\J[PVUVMYVHKJHYUHNLHUKKLH[OZ Transporter Partnerships ;OLZWPYP[VMV\Y[YHUZWVY[LYWHY[ULYZOPWZPZ[VLUZ\YL[OH[ V\Y[YHUZWVY[LYZYLTHPUH\[VUVTV\ZPU[OLPYVWLYH[PVUZ L]LUHZ^LLUMVYJLJVTWSPHUJL^P[OV\YYVHKZHML[` WVSPJPLZ;OYV\NO[YHUZWVY[LYZP[LH\KP[Z^LZ\WWVY[ HUKHK]PZL[YHUZWVY[LYZVUOV^[VHKOLYL[VHUKTLL[ TPUPT\TYLX\PYLTLU[Z4VZ[[YHUZWVY[LYZOH]LHKVW[LK V\YYVHK[YHUZWVY[ZHML[`WVSPJPLZHUKWYVJLK\YLZ[OLU WLYZVUHSPaLK[OLTMVYPTWYV]LTLU[JVU[YPI\[PUN[VV]LYHSS PTWYV]LKZHML[`Z[HUKHYKZHUKJ\S[\YL *\YYLU[S`^LHYL[OLVUS`I\ZPULZZ\UP[^P[OPU 3HMHYNL/VSJPT»Z4,(YLNPVU^P[O-P]L:[HYYH[LK [YHUZWVY[LYZJ\YYLU[S`[^V>LOH]LPU[LNYH[LK0=4:0U =LOPJSL4VUP[VYPUN:`Z[LTHUK[Y\JRPUZWLJ[PVU[VVSZ[V LUZ\YLKYP]LYILOH]PVYPZTHUHNLKPUYLHS[PTLHM[LYL]LY` [YPWUV[H[LUKVMTVU[OHZ^HZWYL]PV\ZS`KVUL>LOH]L ZVMHYHJOPL]LKV]LY 0=4:JVTWSPHUJL0U ^L HSZV^LU[SP]L^P[OKPNP[HSQV\YUL`THUHNLTLU[HUKWPSV[LK KPNP[HSZVS\[PVUZSPRLPUJHIPUKYP]LYHSLY[Z`Z[LTZPUSPUL 2019 Health and Safety Improvement Plan (HSIP) PPP 0U/V\ZLRLLWPUNZ\Z[HPUHISLZVS\[PVUZ^LYL Health and Safety Management System ^P[O0=4:HUK9V\[L/HaHYK4HWWPUN^P[ONVVKZ\JJLZZ PTWSLTLU[LKHJYVZZ[OLZP[LZ[VHKKYLZZ[OL >LHJOPL]LK JVTWSPHUJLPUKYP]LY[YHPUPUNHUK >LOHKÄ]LZ[YH[LNPJVIQLJ[P]LZPU ^OPJO^LYL ;OPZ^HZHNVVKWYHJ[PJL[OH[^HZPU[YVK\JLKPU OV\ZLRLLWPUNPZZ\LZMYVT[OLZV\YJL HZZLZZTLU[ ILPUNZWVUZVYLKI`,_JVTLTILYZ!9VHK:HML[`/LHS[O 0[PUJS\KLZH\KP[Z[OH[HYLSLKI`,_JVTLTILYZHZH /V\ZLRLLWPUN>VYRH[/LPNO[HUK9PZR4HUHNLTLU[ P] 0U>VYRPUNH[/LPNO[ZVS\[PVUZ^LYLPTWSLTLU[LK KLTVUZ[YH[PVUVM[OLPYSLHKLYZOPWHUKJVTTP[TLU[[V >LJVTWSL[LKPU[LNYH[PVUVM[OLÅLL[THUHNLTLU[JLU[YL MVSSV^PUN[OL/PLYHYJO`VM*VU[YVSZWYPUJPWSL^P[OMVJ\Z OLHS[OHUKZHML[`>LOH]LZVMHYJHYYPLKV\[ H\KP[Z H[5HPYVIP.YPUKPUN7SHU[^P[O*\Z[VTLY:LY]PJL;OL P 0U9VHK:HML[`^LNLULYH[LKHZJVYLJHYKIHZLKVU[OL VULUNPULLYPUNJVU[YVSZHPTLKH[YLK\JPUNZJHќVSK\ZL HJYVZZHSSZP[LZ^P[OV]LY LTWSV`LLZMYVT[OLKPќLYLU[ ZHTLWYVQLJ[PZUV^VUNVPUNH[4VTIHZH7SHU[>P[O[OPZ V\[W\[VM[OL0U=LOPJSL4VUP[VYPUN:`Z[LT0=4:HUK HJYVZZ[OLZP[LZ:VTLVM[OLZVS\[PVUZPTWSLTLU[LK ZP[LZILPUN[YHPULKHUKPU]VS]LKVU[OLZLH\KP[Z6]LY V\YVWLYH[PVUZHYLTHKLZLHTSLZZ^P[OYLK\JLK;;(; \ZLK[OPZZJVYLJHYK[VYH[LHUKPKLU[PM`ZHMLHUK\UZHML PUJS\KLKPUZ[HSSH[PVUVMWSH[MVYTZ^P[OZPKLWYV[LJ[PVU SL]LSVULÄUKPUNZOH]LILLUJSVZLKPU[OLZLMV\Y`LHYZ" ;Y\JR;\YUHYV\UK;PTL0UHKKP[PVU^LHSZV^LU[SP]LPU KYP]LYZ>L[OLUHWWSPLK[OLYL^HYKHUKZHUJ[PVU HUK[VLIVHYKZ TLHUPUNLSPTPUH[PVUVMWV[LU[PHSMH[HSP[PLZ6\YMVJ\ZPZUV^ +LJLTILY^P[O[OL;YHUZWVY[(UHS`[PJ*LU[YL[OH[WYV]PKLZ WVSPJ`VU[OLKYP]LYZIHZLKVU[OPZZJVYLJHYKWVZP[P]LS` [OL3VNPZ[PJZ[LHT^P[OZ\TTHYPaLKYLWVY[ZIV[OZHML[` PUÅ\LUJLK[OLPYKYP]PUNILOH]PVY ] 0U9PZR4HUHNLTLU[[OL.YV\WPU[YVK\JLKHUL^YPZR [VLSPTPUH[LYLWLH[ÄUKPUNZ HUKVWLYH[PVUZYLWVY[PUNVWLYH[PVUZMYVTIV[O7SHU[Z^P[O THUHNLTLU[HWWYVHJOHUKYLSH\UJOLK[VVSIV_[HSRZ Global Health and Safety Days PU[LNYH[PVUVM0=4:^P[OV[OLYVWLYH[PUNZ`Z[LTZZ\JOHZ PP 0U/LHS[OZVTLLUNPULLYPUNJVU[YVSZ^LYLPTWSLTLU[LK 3PMLZH]PUN[HSRZHUKYPZRHZZLZZTLU[H\KP[Z3PMLZH]PUN :(736.65HUK/6+04 [VHKKYLZZLYNVUVTPJZPZZ\LZPUSPM[PUNVMIHNZ\ZPUN H\KP[Z6]LYZHML^VYRPUNWYVJLK\YLZ^LYL 0U [OLYL^HZNYLH[TVIPSPaH[PVUK\YPUN[OL/LHS[OHUK [YVSSL`Z;VTHUHNLK\Z[L_WVZ\YL[V^VYRLYZPU[OL KL]LSVWLK\UKLY[OPZWPSSHYMVYOPNOMYLX\LUJ`OPNOYPZR :HML[`+H`ZJHTWHPNUOLSKPU4H`HUK1\UL>LMVJ\ZLK WHJRPUNWSHU[H[5HPYVIP.YPUKPUN7SHU[HOVVK^HZ QVIZ VUV\YÄ]L/ :Y\SLZHUK[OLJVUZLX\LUJLTHUHNLTLU[ 46 PUZ[HSSLK WVSPJ`-\UÄSSLKHJ[P]P[PLZ^LYLJHYYPLKV\[^P[OHTHaPUN 47 WYPaLZ^VUI`LTWSV`LLZHUKJVU[YHJ[VYZ[Hќ 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 2 BUSINESS REVIEW Health and Safety Boda boda training ;OL)VKH)VKHTV[VYJ`JSPZ[ZYVHKZHML[`H^HYLULZZ JHTWHPNU^HZPUP[PH[LKI`)HTI\YP*LTLU[HUKWHY[ULY VYNHUPaH[PVUZPU ;OLTHPUPKLH^HZ[VZLUZP[PaL)VKH )VKHYPKLYZVUYVHKZHML[`HUKTHRL[OLTIL[[LYYVHK \ZLYZ)VKH)VKHYLSH[LKHJJPKLU[ZPU2LU`HOH]LILLUVU [OLPUJYLHZL^P[OOPNOMH[HSP[PLZYLJVYKLK ;OLWYVNYHTPU]VS]LZHOV\YJSHZZYVVT+LMLUZP]L9PKLY ;YHPUPUNMVY[OL)VKH)VKH6WLYH[VYZHUKPZKVULHJYVZZ [OLUVY[OLYUJVYYPKVYPUZWLJPÄJ[V^UZ;OL`HYL[OLU HZZLZZLKHUKJLY[PÄLK0UHKKP[PVU^LHSZVPU]VS]L[YHѝJ WVSPJLHUK5;:(5H[PVUHS;YHUZWVY[HUK:HML[`(\[OVYP[` [VZOHYLYLN\SH[VY`YLX\PYLTLU[ZZ\JOHZSPJLUZPUNVM[OL \USPJLUZLKHUK[YHPUPUN )HTI\YPOHZ[YHPULKV]LY TV[VYJ`JSPZ[ZVUYVHK ZHML[`HUKKLMLUZP]LYPKPUNV]LY[OLWHZ[`LHYZ;OPZOHZ JVU[YPI\[LK[V[OLYL]LYZHSVM[OL\UMVY[\UH[L[YLUKPUYVHK JHYUHNLHUKSVZZVMSP]LZ(JJPKLU[ZHSZVYLZ\S[[VLJVUVTPJ SVZZ[V[OL]PJ[PTZHUK[OLPYMHTPSPLZ0UHKKP[PVUILOH]PV\Y JOHUNLOH]LILLU^P[ULZZLKHTVUN[OVZL[YHPULK^P[O TVZ[YPKLYZLUZ\YPUN\ZLVMOLSTL[ZYLÅLJ[P]L]LZ[ZHUK JHYY`PUNUV[TVYL[OHUVULWPSSPVUWHZZLUNLY Transport Directors Meeting 0U ^LOVZ[LKV\YJVU[YHJ[LK[YHUZWVY[LYZMVYV\Y (UU\HS;YHUZWVY[LYZ+PYLJ[VYZ4LL[PUNJVPUJPKPUN^P[O SH\UJOVMV\Y/LHS[O :HML[`+H`ZJHTWHPNU+\YPUN Transport directors signed a commitment [OLTLL[PUN[OLÄ]L/ :Y\SLZHUK[OLJVUZLX\LUJL THUHNLTLU[WVSPJ`^LYLYL]PZP[LK;OLKPYLJ[VYZ[OLU charter as a renewal of their commitment ZPNULKHJVTTP[TLU[JOHY[LYHZHYLUL^HSVM[OLPY JVTTP[TLU[[VKLTVUZ[YH[PUNSLHKLYZOPWPUYVHKZHML[`HUK to demonstrating leadership in road safety NLULYHSOLHS[OHUKZHML[`H[[OLPYYLZWLJ[P]LJVTWHUPLZ 0[^HZHSZVHUVWWVY[\UP[`[VYL]PL^V\YYVHKZHML[` and general health and safety at their performance. What Next? respective companies 6\Y/0:7MVYPZYLHK`HUK^LZOHSSILMVJ\ZPUNVU 9VHK:HML[`/LHS[O>VYRPUNH[/LPNO[3LHKLYZOPWHUK Accountability, and Competency. 48 49 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 2 BUSINESS REVIEW Health and Safety Uganda Ebola Response Plan 6U[O1\UL [OL4PUPZ[Y`VM/LHS[OKLJSHYLK[OL 0U MVY[\UH[LS`[OLI\ZPULZZKPKUV[YLNPZ[LYHU`MH[HSP[`VUZP[LHZHYLZ\S[VMV\YVWLYH[PVUZ [OV\[IYLHRVM,IVSH=PY\Z+PZLHZL,=+PU2HZLZL /V^L]LYÄ]L3;0Z^LYLYLNPZ[LYLK\WMYVTMV\YPU[OLWYL]PV\Z`LHY KPZ[YPJ[PU:V\[O>LZ[LYU People Kenya ^HZH[YHUZP[PVUHS`LHYPUV\YI\ZPULZZPUV\YLќVY[Z[VKYP]LHWLYMVYTHUJLJ\S[\YLH[HSSSL]LSZ ^P[OPUHK`UHTPJI\ZPULZZLU]PYVUTLU[;OL7LVWSL(NLUKH^HZHRL`WYPVYP[`[VLUZ\YL^LLX\PW HUKKL]LSVWV\YWLVWSL[VZ\WWVY[HJOPL]LTLU[VMI\ZPULZZVIQLJ[P]LZ Headcount Pipeline Development • Geo Statistics, Block Modelling & Leapfrog software training ;VKL]LSVWJVTWL[LUJPLZMVYV\Y +HDG2τFH ¶[VLUOHUJLZRPSSZPUNLVSVNPJHS M\[\YLVYNHUPaH[PVUHSZ\JJLZZ^L Z[H[PZ[PJZHUKISVJRTVKLSJYLH[PVU Nairobi Grinding Plant (NAI OH]LWHY[ULYLK^P[OSVJHSSLHYUPUN Plant) PUZ[P[\[PVUZPUJS\KPUN\UP]LYZP[PLZHUK • Technical Information System [LJOUPJHSJVSSLNLZHZ^LSSHZ[OL (TIS) training MOM Plant 2LU`H(ZZVJPH[PVUVM4HU\MHJ[\YLYZ • Professional Interview Bamburi Special Products 2(4HUK.V]LYUTLU[IVKPLZ Preparations (PIP)¶HVULKH` (BSP) VUKPќLYLU[WYVNYHTZ>LOH]L [YHPUPUNOVZ[LKI`[OL0UZ[P[\[LVM KL]LSVWLKJVTWL[LUJPLZPUPUK\Z[YPHS Lafarge Eco Systems (LES) 18 ,UNPULLYZVM2LU`H0,2H[[LUKLK M\UJ[PVUZHUKHSZV[YHPULK[OYV\NOV\Y I`V\YLUNPULLYZ Binastore 8 Z[Y\J[\YLKNYHK\H[L[YHPULLZWYVNYHT PU[LYUZOPWHUKHWWYLU[PJLZOPW0U Virtual Learning at Plant School Total ^LWYV]PKLKPU[LYUZOPWHUK 7HY[VM[OL.YV\W»ZZ[YH[LN`PZPU HWWYLU[PJLZOPWVWWVY[\UP[PLZ[V L_WSVYPUNUL^VWWVY[\UP[PLZ^P[OPU Training and Development Z[\KLU[ZIV[OVUNVPUNZ[\KLU[ZHUK [OLKPZY\W[P]LKPNP[HS[LJOUVSVNPLZ0U YLJLU[NYHK\H[LZ;OLZLVWWVY[\UP[PLZ ;OL.YV\WOHZPKLU[PÄLKSLHYUPUNHZ SPUL^P[O[OPZ^LPU[YVK\JLK]PY[\HS J\[HJYVZZHSSV\YI\ZPULZZZLNTLU[Z HRL`I\PSKPUNISVJRMVYKLSP]LYPUN SLHYUPUNPUV\Y7SHU[:JOVVSIHZLK HUKM\UJ[PVUZHUKWYV]PKLKSLHYUPUNPU V\[Z[HUKPUNWLYMVYTHUJL([[OL VUPU[LYHJ[P]L+TVKLSVMHJLTLU[ PUK\Z[YPHSLU]PYVUTLU[HSLJVSVNPJHS ZHTL[PTLV\Y7SHU[:JOVVSOHZILLU WSHU[HUKZ\WWVY[LKI`/;*=P]L JVUZLY]H[PVUHUKTHUHNLTLU[>L PKLU[PÄLKHZ[OL3HMHYNL/VSJPT4PKKSL -VJ\ZHÄYZ[VMP[ZRPUK]PY[\HSYLHSP[` HYLVU[YHJRPUKL]LSVWPUNHNVVK ,HZ[ (MYPJH4,(YLNPVUHSPUK\Z[YPHS Z`Z[LT;OPZOHZILLUPKLU[PÄLKHZH KH[HIHZLVMM\[\YLSLHKLYZ learning and development centre JVZ[LѝJPLU[HS[LYUH[L[VMHJL[VMHJL HUKPZUV^[YHPUPUNPUK\Z[YPHSHUK Technical training training. THUHNLTLU[[LHTZHJYVZZ[OLYLNPVU ;OPZJVTLZHZHUHK]HU[HNL[V2LU`H (U\TILYVM[OLZL^LYLJVUK\J[LK Shutdown management workshop including: Z[Hќ^OV^PSSILULÄ[MYVTJVU[PU\V\Z ;VPTWYV]LLѝJPLUJPLZPUVYNHUPaPUN development. • Quarry Scheduling Optimization HUKL_LJ\[PUNTHQVYYLWHPYZPU[OL 0U ^L^VYRLK[VKLÄUL[OL (QSO)¶8\HYY`THUHNLYZHUK WSHU[Z[LJOUPJHS[LHTZ^LYL\WKH[LK JVTWL[LUJPLZWLY[PULU[MVYPUKP]PK\HS WSHUULYZ^LYL[YHPULKVUH VUULJLZZHY`HJ[PVUZ[VILWLYMVYTLK LTWSV`LLZKLWHY[TLU[ZHUK[OLLU[PYL 3HMHYNL/VSJPTZ[HUKHYK[VVS K\YPUN[OLLU[PYLJ`JSLVMHZO\[KV^U VYNHUPaH[PVU[VPUJYLHZLWLYMVYTHUJL MVYVW[PTPaPUNX\HYY`L_[YHJ[PVU HJJVYKPUN[V[OL*LTLU[0UK\Z[YPHS ;OLSLHYUPUNWYVNYHTZJHYYPLKV\[ ;OPZ^HZ[VZ\WWVY[[OL4PULYHSZ -YHTL^VYRVYKLY[VHJOPL]L[OL HPTLKH[HKKYLZZPUNIV[OSVJHSHUK +LWVZP[Z,]HS\H[PVUHUK8\HYY` I\ZPULZZVIQLJ[P]LZ 7SHUUPUNWOHZLVM[OL*LTLU[ YLNPVUHSULLKZHUK[OLRUV^SLKNL Capex Project Management (CPM) HJX\PYLKPZHSYLHK`ILPUNHWWSPLKI` 0UK\Z[YPHS-YHTL^VYR*0- LTWSV`LLZ • Central Control Room ;YHPUPUNMVY*74JOHTWPVUZHUK RL`*HWL_WLYZVUULS[VIVVZ[[OLPY :VTLVM[OL[YHPUPUNPUJS\KLK! 2SHUDWLRQV &&52 FHUWLðFDWLRQ ¶HWLYMVYTHUJLKL]LSVWTLU[ JVTWL[LUJPLZKYH^PUNWHY[PJPWHU[Z BE READY Program HUKJVTWL[LUJPLZPTWYV]LTLU[ MYVT3HMHYNL/VSJPTZ\IZPKPHYPLZPU WYVNYHT[OH[PUJS\KLZTVU[OS` 2LU`HAPTIHI^LAHTIPH5PNLYPH ;OPZPZH3HMHYNL/VSJPTPUK\J[PVU HUK:V\[O(MYPJH;OL`^LYLHSZV WYVNYHTMVYUL^LUNPULLYZPUJLTLU[ WVZ[JLY[PÄJH[PVUWLYMVYTHUJL JOLJRZI`HWYVK\J[PVUJVHJO LTWV^LYLK[V[YHPUV[OLY[LHTZPU[OLPY WSHU[ZHUKNYHK\H[LYLJY\P[Z^P[OUV JV\U[YPLZ ZPNUPÄJHU[JLTLU[THU\MHJ[\YPUN ;OLJLY[PÄJH[PVUPZH^HYKLK^OLU L_WLYPLUJL0[^HZSH\UJOLKPU HUVWLYH[VYJHUKLTVUZ[YH[L HUKOHZLX\PWWLKSLHYULYZ^P[OZRPSSZ WLYMVYTHUJL^P[OPU VM PUKPќLYLU[[LJOUVSVNPLZHUKWYVJLZZLZ VWLYH[PUN[HYNL[ZHUKJHWHISLVM PUJLTLU[WYVK\J[PVU^OPSLYHPZPUN THUHNPUNJLY[HPUPUJPKLU[Z H^HYLULZZVUZHML[`HUKLU]PYVUTLU[ HZWLJ[ZX\HSP[`HUKJVZ[PTWHJ[ 52 JOHSSLUNLZ 53 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 2 BUSINESS REVIEW Our People and Systems Pre-retirement planning and preparedness training ;OLZLPUP[PH[P]LZ^LYLKVULPU ! ;OLOLHS[OHUK^LSSULZZWYVNYHTOHZPUJVYWVYH[LK]HYPV\Z M-Bamburi app HWWYVHJOLZPUJS\KPUN! )HTI\YP*LTLU[LUKLH]VYZ[VZ\WWVY[V\YZ[HќHJYVZZ Balance for Better ;OL4)HTI\YPTVIPSLHWWSPJH[PVUÄYZ[SH\UJOLKPU [OL]HYPV\ZZ[HNLZVM[OLPY^VYRSPML;OPZ[YHPUPUN[HYNL[LK (^LSSULZZWYVNYHT" 6U[OL.SVIHS0U[LYUH[PVUHS>VTLU»Z+H`^LSH\UJOLK ^HZLUOHUJLK[VLUHISLLHZ`HJJLZZHUK\ZL;OLHWWPZ LTWSV`LLZHIV]L `LHYZVSKHUKJV]LYLKOV^[V V\Y)HTI\YP)HSHUJLMVY)L[[LY0UP[PH[P]L)))0(Z[Hќ ,TWSV`LLHZZPZ[HUJLWYVNYHT" UV^HWYLMLYYLK[VVS[OH[KLSP]LYZLTWSV`LLJVTT\UPJH[PVU WYLWHYL^LSSWYHJ[PJHSS`HUKWZ`JOVSVNPJHSS`MVY[OLPY JHTWHPNU^HZJHYYPLKV\[^OLYLZ[HќZOHYLKPKLHZVU >VYRWSHJL/0=WYVNYHT" [VHSSZ[HќPUZ[HU[S`[OYV\NO[OLPYTVIPSLWOVULZNP]PUNHSS retirement. WYVNYHTZ[VPTWSLTLU[MYVT^OPJO[OYLL^LYLZLSLJ[LK (KKPJ[PVUZ\WWVY[WYVNYHT" Z[Hќ[OLVWWVY[\UP[`[VILPUMVYTLKPUH[PTLS`THUULYH[ [OLZHTL[PTLKLZWP[L^OLYL[OL`HYL^VYRPUNMYVT;OPZPZ Resilience training )))0PZUV^HUPUP[PH[P]L^P[O[OYLLRL`WPSSHYZ[OH[ (JVTWYLOLUZP]LTLKPJHSJV]LY" JOHTWPVUZMVYHUPUJS\ZP]L^VYRLU]PYVUTLU[;OLZLHYL! PUYLJVNUP[PVUVM[OLKP]LYZP[`VMV\YLTWSV`LLZ"MYVTVѝJL -HJPSP[H[LKI`PU[LYUH[PVUHSH\[OVYZWLHRLYHUKYLZPSPLUJL 9L[PYLLZWHYLU[ZHUKZPISPUNZTLKPJHSJV]LY" IHZLK[VTHYRL[ÄLSKIHZLKHUK[LJOUPJHSPUK\Z[YPHSZ[Hќ L_WLY[AHOLLU5HUQPZLZZPVUZ^LYLOVZ[LKMVY)HTI\YP 4LU[VYZOPW (UU\HSOLHS[OHZZLZZTLU[Z" MLTHSLZ[HќPUIV[O4VTIHZHHUK5HPYVIP[VVќLY[OLT Awards 7YL]LU[PVUVM:L_\HS/HYHZZTLU[ /LHS[OWYVTV[PVUHJ[P]P[PLZ"HUK YLHS[PTL[VVSZVULTWV^LYTLU[MVYYLZPSPLUJL:PTWSL Employer of the Year Awards [VVSZ^LYLHWWSPLK[VSPUR[OL[YHPUPUN[VV\YVWLYH[PVUZ :;,4:JPLUJL;LJOUVSVN`,UNPULLYPUN /9WVSPJPLZ[OH[Z\WWVY[OLHS[OHUK^LSSILPUNSPRL HUKZVM[ZRPSSZ 4H[OLTH[PJZ H^VYRPUNTV[OLYZ»WVSPJ`ÅL_PISL^VYRPUNOV\YZ )HTI\YP^HZYLJVNUPaLKHZHTVUN[OL[VWILZ[ ILYLH]LTLU[WVSPJ`JVUÄULTLU[SLH]LMVYWHYLU[Z^OV LTWSV`LYZPU[OL HUU\HS,TWSV`LYVM[OL@LHY(^HYKZ Employee development Men’s Day Celebration OH]L[V[HRLJHYLVM[OLPYZPJRJOPSKYLUPUOVZWP[HSHTVUN 0U ZVTL JVTWHUPLZWHY[PJPWH[LKHUK)HTI\YP V[OLYZ 0UHUHPT[VJVU[PU\L[VWYV]PKLHIHSHUJLKHWWYVHJO ;OLVIQLJ[P]L^HZ[VJLSLIYH[LWVZP[P]LTHSLYVSLTVKLSZ *LTLU[JHTLPUZP_[O;OL,TWSV`LYVM[OL@LHY(^HYKZ [VKL]LSVWTLU[^LVќLYLKVWLUWYVNYHTZMVYZ[HќVU HUK[VYHPZLH^HYLULZZVMJOHSSLUNLZMHJLKI`TLUZ\JOHZ Union negotiations ,@(PZHUHUU\HSPUP[PH[P]LVYNHUPaLKI`[OL-LKLYH[PVUVM ÄUHUJPHS^LSSULZZJHYLLYTHUHNLTLU[SLHKLYZOPWHUK TLU[HSOLHS[OHUKÄUHUJPHSZLJ\YP[` 2LU`H,TWSV`LYZ-2,NLHYLK[V^HYKZWYVTV[PUNHUK [LJOUPJHSKL]LSVWTLU[ )HTI\YP*LTLU[HS^H`ZLUKLH]V\YZ[VHUKOHZILLUHISL LUJV\YHNPUNILZ[WYHJ[PJLZPU*VYWVYH[L7LYMVYTHUJL Support Forum [VTHPU[HPUZV\UKPUK\Z[YPHSYLSH[PVUZHUKYLSH[PVUZOPWZ^P[O 7LVWSL4HUHNLTLU[HUK0UK\Z[YPHS9LSH[PVUZHTVUNZ[ Health and safety training >LHSZVSH\UJOLKHUVUSPULJVTT\UP[`[OH[ZWHUZHJYVZZ HSSZ[HRLOVSKLYZ>LJVUJS\KLK[OL3HMHYNL,JV:`Z[LTZ LTWSV`LYZPU2LU`H;OPZPZPUHIPK[VYHPZLHUKZ\Z[HPU *VSSLJ[P]L)HYNHPUPUN(NYLLTLU[*)(Z\JJLZZM\SS`HUK WYVK\J[P]P[`LU[LYWYPZLWLYMVYTHUJLHUKYLZWVUZPIPSP[` 9PZR(ZZLZZTLU[![VHSPNU4HUHNLYZHUK:\WLY]PZVYZ [OL3HMHYNL/VSJPT.YV\W[OH[JVUULJ[ZIV[O[OL^VTLU JSVZLK[OL HUK HNYLLTLU[Z [V[OLUL^3HMHYNL/VSJPT9PZR(ZZLZZTLU[ HUKTLU^P[OPU[OL.YV\W^P[OPUMVYTH[PVUHY[PJSLZHUK amicably. Gender Equality in Kenya Ranking Z[HUKHYKZ>LL_WLJ[[VZLLPTWYV]LTLU[ZPU[OL JVU[HJ[Z[VZ\WWVY[[OLPYJHYLLYZHUKWLYZVUHSNYV^[O X\HSP[`VM[OLYPZRHZZLZZTLU[ZKVULPU[OL7SHU[Z Employee Engagement and Outreach – Let’s Talk )HTI\YP^HZYHURLKV\[VM SPZ[LKJVTWHUPLZPU Staff health and wellness programs 2LU`HVUNLUKLYLX\HSP[`,X\PSLHWWHY[ULYLK^P[O[OL /V[4H[LYPHS:HML[`[YHPUPUN!PU^OPJO^L[HYNL[LK )HTI\YP*LTLU[»ZOLHS[OHUK^LSSULZZWYVNYHTZLLRZ (Z^L^VYRLK[VIYPUNV\YLTWSV`LLZJSVZLY[V[OL 5HPYVIP:LJ\YP[PLZ,_JOHUNL5:,HUK5L^-HJLZ5L^ [YHPUPUN[V[OLTHUHNLTLU[[LHTZOPM[[LHTZ [VWYVTV[LOLHS[OPLYSPMLZ[`SLZHTVUNP[ZLTWSV`LLZ>L VYNHUPaH[PVUHUKZ\WWVY[LUNHNLTLU[[OLYL^HZYLHSPaLK =VPJLZ[VHZZLZZHSSSPZ[LKJVTWHUPLZPU2LU`HVUNLUKLY HUK[OLTLJOHUPJHSZ[Hќ;OLVIQLJ[P]LZ^LYL[V OH]LUV^HSZVPU[LNYH[LKLTWSV`LLZ»MHTPS`TLTILYZHUK HULLKMVYZ[Hќ[VIL^LSS\WKH[LKVUHSSWYVNYHTZHUK LX\HSP[`PU[OL^VYRWSHJL-VY[OLL]HS\H[PVU[OL`\ZLK HKKYLZZL_WVZ\YLVM^VYRLYZ[VOV[TH[LYPHSZHUK Z\IJVU[YHJ[LK^VYRLYZPU[V[OL]HYPV\Z^LSSULZZPUP[PH[P]LZ WVSPJPLZ[OH[HќLJ[[OLPY^VYRHUK^VYRWSHJL0USPUL^P[O [OL,X\PSLHW:JVYLJHYK[OLTVZ[JVTWYLOLUZP]L TPUPTPaLYPZRVMPUQ\Y` ^P[OHILSPLM[OH[[OL^VYRWSHJLWYV]PKLZ[OLTVZ[ [OPZ^LPU[YVK\JLKH/9[OLTLKUL^ZSL[[LYLet’s Talk[OH[ TL[OVKVSVN`MVYL]HS\H[PUNNLUKLYLX\HSP[`PU[OL Diversity and Inclusion conducive environment to promote and embed a culture of RLLWZZ[Hќ^LSS\WKH[LKVUJYP[PJHS/9[VWPJZYHUNPUNMYVT ^VYRWSHJL;OL:JVYLJHYKOHZ JYP[LYPHPUJS\KPUNNLUKLY OLHS[O[YHUZSH[PUN[VLTWV^LYLKLTWSV`LLZMHTPSPLZHUK ILULÄ[ZHUKJVTWLUZH[PVU[YHPUPUNHUKKL]LSVWTLU[ IHSHUJLHJYVZZ[OL^VYRMVYJL[OLNLUKLYWH`NHWWHPK :PUJLP[ZMV\UKPUNPU[OL`LHY [OL+P]LYZP[`HUK JVTT\UP[PLZ OLHS[OHUK^LSSULZZJVTWSPHUJLLTWSV`LLYLJVNUP[PVU WHYLU[HSSLH]LHUKHU[PZL_\HSOHYHZZTLU[WVSPJPLZ 0UJS\ZPVUWYVNYHTJVU[PU\LZ[VILHZ[YH[LNPJPUP[PH[P]L WLYMVYTHUJLTHUHNLTLU[HJOPL]LTLU[ZLTWSV`LL [VLUZ\YL^LWYV]PKLHZHMLMHPYHUKPUJS\ZP]L^VYR YLSH[PVUZHTVUNV[OLYZ LU]PYVUTLU[HJYVZZV\YI\ZPULZZ 54 55 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Our People and Systems People Uganda ;OYV\NOV\Y;HSLU[4HUHNLTLU[Z[YH[LN`[OLI\ZPULZZOHKHUHZZ\YLKWPWLSPULVM º9LHK`5V^» [HSLU[MVYHSSJYP[PJHSWVZP[PVUZ>VYRJVU[PU\LZ[VYLHJOH[SLHZ[ º9LHK`5V^»[HSLU[WPWLSPULMVYHSS YVSLZPU[OLVYNHUPaH[PVU Information systems Talent Management 0U2HZLZL^LPTWSLTLU[LK[OL.YHK\H[L,UNPULLYPUN 7YVNYHT^P[O NYHK\H[LLUNPULLYZPU8\HSP[` ;OLI\ZPULZZTVKLSHWWSPJH[PVUZ^OPJOOH]LILLU ;OYV\NOV\Y;HSLU[4HUHNLTLU[Z[YH[LN`[OLI\ZPULZZ 7YVK\J[PVU4HPU[LUHUJLHUK8\HYY`^OVOH]L Y\UUPUNZPUJL1HU\HY` JVU[PU\L[VZ\WWVY[V\Y OHKHUHZZ\YLKWPWLSPULVM º9LHK`5V^»[HSLU[MVYHSS ZVMHYQVPULK[OLL_LJ\[PVU[LHTZ I\ZPULZZWYVJLZZLZHUKHJOPL]LTLU[VMI\ZPULZZ V\YJYP[PJHSWVZP[PVUZ>VYRJVU[PU\LZ[VILKVUL[VYLHJO VIQLJ[P]LZHZ^LSSJYLH[PUN]HS\LMVYV\YJ\Z[VTLYZHUK H[SLHZ[ º9LHK`5V^»[HSLU[WPWLSPULMVYHSSYVSLZPU[OL >LPU[YVK\JLK*VTTLYJPHS[LHT»ZTVU[OS`YL]PL^HUK Z[HRLOVSKLYZ organization. JVHJOPUNZLZZPVUZ[VPTWYV]LV\YZHSLZZ[Hќ»JVTTLYJPHS HJ\TLUHJYVZZ[OLI\ZPULZZM\UJ[PVU ;OL.YV\W\UKLY[VVR[OLMVSSV^PUNWYVQLJ[ZPU ! (ZHYLZ\S[VMV\YYVI\Z[[HSLU[THUHNLTLU[Z[YH[LN` VMV\YZ[HќOHKHSH[LYHSTV]LVYHWYVTV[PVU=VS\U[HY` Organisation Effectiveness (OE) 0TWSLTLU[LKHUKJVUÄN\YLKZLUKPUNVMLSLJ[YVUPJ [\YUV]LY^HZH[ HUK^LYLJY\P[LK L_[LYUHSWLVWSL[V HUKKPNP[HSS`ZPNULKJ\Z[VTLYPU]VPJLZ^P[O[H_ 6\YKLZPYLHZHI\ZPULZZPZ[VLZ[HISPZOHUKJYLH[LÄ[MVY Z[YLUN[OLUV\Y*VTTLYJPHSHUK6WLYH[PVUZ[LHTZ JVTWSPHU[LSLJ[YVUPJZPNUH[\YLZ[VV\YJ\Z[VTLYZ W\YWVZLVYNHUPaH[PVUHSZ[Y\J[\YLZ[OH[HYLZPTWSLHNPSL ;OPZPTWYV]LK[OLLѝJPLUJ`VM[OLJ\Z[VTLY LѝJPLU[HUKLќLJ[P]LHUKHYLTPYYVYLK[VI\ZPULZZWYPVYP[PLZ Diversity and Inclusion PU]VPJPUNWYVJLZZ[OYV\NOTVYLYLHS[PTLPU]VPJL 56 57 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 2 BUSINESS REVIEW Risk and Control Business Risk Management 4HUHNLTLU[HJRUV^SLKNLZ[OH[YPZRPZHUPUOLYLU[WHY[VM [OLI\ZPULZZHUK[OH[LќLJ[P]LYPZRTHUHNLTLU[PZPU[LNYHS [V[OLHJOPL]LTLU[VMI\ZPULZZVIQLJ[P]LZHUKZ[YH[LN` 4HUHNLTLU[PZ[OLYLMVYLJVU[PU\V\ZS`KL]LSVWPUNHUK LUOHUJPUNP[ZYPZRHUKJVU[YVSWYVJLK\YLZ[VPTWYV]L[OL TLJOHUPZTZMVYYPZRPKLU[PÄJH[PVUL]HS\H[PVUTVUP[VYPUN and management. ;OL.YV\WJVUK\J[LKHJVTWYLOLUZP]LYPZRHZZLZZTLU[PU VMV\YI\ZPULZZYPZRZHUKVWWVY[\UP[PLZ;OLV\[W\[ ^HZHYPZRHUKVWWVY[\UP[PLZTHWWPUN^P[OHJ[PVUWSHUZ[V TP[PNH[L[OLYPZRZHUKL_WSVP[[OLVWWVY[\UP[PLZ 0[PZ[OL)VHYKZVWPUPVU[OH[[OLZ`Z[LTVMI\ZPULZZYPZR THUHNLTLU[PUWSHJLWYV]PKLZYLHZVUHISLHZZ\YHUJL[OH[ I\ZPULZZYPZRTHUHNLTLU[MVY[OL.YV\WPZHKLX\H[LHUK ZV\UK Internal Control Risk Management 0U[LYUHS*VU[YVSYPZRZHYLYPZRZ[OH[HќLJ[[OLLќLJ[P]LULZZ HUKLѝJPLUJ`VMPU[LYUHSJVU[YVSZHUK[O\ZHќLJ[[OL HJOPL]LTLU[VMI\ZPULZZVIQLJ[P]LZ;OL`HYLHWHY[VM VWLYH[PVUHSHUKJVTWSPHUJLYPZR ;OL)VHYKPZKLKPJH[LK[V[OLPKLU[PÄJH[PVUVMRL`PU[LYUHS JVU[YVSYPZRZHUKWYV]PKPUNHZZ\YHUJL[V[OLZOHYLOVSKLYZ [OH[[OLYPZRZHYLM\SS`\UKLYZ[VVKHUKTHUHNLK -VY[OL`LHY\UKLYYL]PL^[OL)VHYKOHZJVUK\J[LKH YL]PL^VMPU[LYUHSWVSPJPLZHUKPU[LYUHSJVU[YVSVMZPNUPÄJHU[ YPZRZHUKVMTH[LYPHSZ`Z[LTZ 0[PZ[OLVWPUPVUVM[OL)VHYK[OH[[OLZ`Z[LTVMYPZR THUHNLTLU[HUKPU[LYUHSJVU[YVSZPZPUWSHJLHUK^HZ HKLX\H[LHUKLќLJ[P]LPU Internal Controls 0U[LYUHS*VU[YVSZJVTWYPZLVMTL[OVKZHUKWYVJLK\YLZ HKVW[LKI`4HUHNLTLU[[VWYV]PKLYLHZVUHISLHZZ\YHUJL PUZHMLN\HYKPUNHZZL[ZWYL]LU[PVUHUKKL[LJ[PVUVM LYYVYHJJ\YHJ`HUKJVTWSL[LULZZVMHJJV\U[PUNYLJVYKZ [VNL[OLY^P[OYLSPHIPSP[`VMÄUHUJPHSZ[H[LTLU[Z ;OL.YV\WOHZPUWSHJLZP_[` THUKH[VY`4PUPT\T *VU[YVS:[HUKHYKZ4*:»Z;OLZLLUJVTWHZZJVU[YVSZ from Governance and Compliance, Accounting, Financial 9LWVY[PUN/LHS[O :HML[`:LJ\YP[`/\THU9LZV\YJLZ 0U]LU[VY`,_WLUKP[\YL-P_LK(ZZL[ZHUK0UMVYTH[PVU ;LJOUVSVN`,HJO,_LJ\[P]L*VTTP[[LLTLTILYPZ YLZWVUZPISLMVYHZL[VMTPUPT\TJVU[YVSZ[HUKHYKZHUKPZ HWWVPU[LK*VU[YVS7YVJLZZ6^ULYMVY[OLPYYLZWLJ[P]LHYLH ;OLZL4*:ZHYLTHUKH[VY`MVYHSSV\YVWLYH[PVUZHJYVZZ [OL.YV\WHUKHYL[LZ[LKMVYJVTWSPHUJLPUH[^V`LHY J`JSL-VY 4HUHNLTLU[OHZTHKLHUHZZLZZTLU[ VML_PZ[PUNNHWZHUKKLÄULKHJ[PVUWSHUZ[VLUZ\YLM\SS VWLYH[PVUVM[OLZL4*:Z ;OL)VHYK[OYV\NO[OL(\KP[HUK9PZR*VTTP[[LLOHZ YL]PL^LK[OLPTWSLTLU[H[PVUVM[OL4*:ZHZ^LSSHZ[OL PU[LYUHSH\KP[YLWVY[Z^P[OPU[OL`LHYHUKPZZH[PZÄLK[OH[ [OLJVU[YVSLU]PYVUTLU[PZHKLX\H[L[VLUZ\YLLѝJPLU[ 58 I\ZPULZZVWLYH[PVUZHUKKL[LJ[PVUVMTH[LYPHSLYYVYZ 59 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 3 SUSTAINABILITY REVIEW 3 SUSTAINABILITY REVIEW Our Sustainability Framework 6\YZ\Z[HPUHIPSP[`HNLUKHPZ\UKLYWPUULKI`3HMHYNL/VSJPT»ZV]LYHYJOPUNZ\Z[HPUHIPSP[`PU[LU[PVU As Bamburi Cement Group, we are convinced [V¸JYLH[LZOHYLK]HS\L^P[OZVJPL[`¹HUK[OL3HMHYNL/VSJPT»ZWSHU^P[OHZL[VMJSLHY that sustained economic growth cannot occur JVTTP[TLU[ZHUK[HYNL[Z[OH[HYLZ\WWVY[P]LVM[OL Climate Circular Water & People & Economy Nature Communities -YVTP[ZPUJLW[PVU[OL.YV\WOHZILLUH[[OLMVYLMYVU[VMPU]LZ[PUNPUJVTT\UP[`WYVNYHTZHUK *VYWVYH[L:VJPHS9LZWVUZPIPSP[`*:9PUP[PH[P]LZ[VMVYNLJVTT\UP[`LUNHNLTLU[ZHUKJYLH[L ZOHYLK]HS\L[OYV\NOZ\Z[HPUHISLI\ZPULZZWYHJ[PJLZHUKZ[YH[LNPJWHY[ULYZOPWZ>LLUKLH]V\Y [VJVUK\J[V\YHJ[P]P[PLZWYVMLZZPVUHSS`HUKYLZWVUZPIS`JHYLM\SS`THUHNPUNI\ZPULZZZ\Z[HPUHIPSP[` YPZRZPUVYKLY[VWYV[LJ[V\YLTWSV`LLZSVJHSJVTT\UP[PLZHUK[OLUH[\YHSLU]PYVUTLU[PU^OPJO ^LVWLYH[L^OPSLJYLH[PUN]HS\LMVYV\YJ\Z[VTLYZHUKZ[HRLOVSKLYZ 62 63 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 3 SUSTAINABILITY REVIEW People and Communities ;OLSVJHSJVTT\UP[`H[2HQPHKV*V\U[`PZHUV[OLYPTWVY[HU[ *OPSKYLU ;OL3PIYHY`PU OVZ[LK YLHKLYZ^OPSL iv. Farmer training UGANDA Z[\KLU[ZILJHTLHUU\HSTLTILYZLUQV`PUNHKKP[PVUHS HJ[P]P[PLZ MHYTPUNZ[\KLU[Z^LYLOVZ[LKHUK[YHPULKH[4[VWHUNH Stakeholder Management 2. Health -HYTZ\IQLJ[ZJV]LYLKPUJS\KLKHZZVY[LK]LNL[HISL ;OL(\KP[VYP\TI\PS[PUOHZHZLH[PUNJHWHJP[` MHYTPUNWV\S[Y`HUKÄZOMHYTPUN >LJVU[PU\LKYVI\Z[HJ[P]LLUNHNLTLU[^P[O]HYPV\Z HIV VMJOPSKYLUÄSTZJYLLUPUNMHJPSP[PLZHUKHZ[HNL0[ Z[HRLOVSKLYZH[IV[O5H[PVUHSHUKSVJHSSL]LS;OPZPUJS\KLK @V\[O-HYTLYZ7YVQLJ[HNHYKLUPUNJVUJLW[[OH[HSSV^Z /PTH*LTLU[PZVULVM[OLÄYZ[WYP]H[LJVTWHUPLZPU VќLYZJOPSKYLUHUV\[KVVYYLHKPUNMHJPSP[`[OH[OHZHJVVS 66 67 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 3 SUSTAINABILITY REVIEW Climate 3. Environmental conservation education and ZLY]LZHZHULHYS`^HYUPUNVMKL[LYPVYH[PVUPULJVSVNPJHS awareness Z[H[\ZVM^L[SHUKZPU2LU`H-\Y[OLY[YHPUPUN^HZHSZVKVUL PUJSVZLJVSSHIVYH[PVU^P[O[OL2LU`H4HYPULHUK-PZOLYPLZ 0USPUL^P[O3HMHYNL/VSJPTZ\Z[HPUHIPSP[`HTIP[PVUZ3HMHYNL 9LZLHYJO0UZ[P[\[L24-90[VPUJYLHZLPU[LYUHSJHWHJP[`PU ,JV:`Z[LTZWSH`ZHRL`YVSLPUWYVTV[PUNHKVW[PVUVM HX\HJ\S[\YLVWLYH[PVUZH[[OLÄZOMHYTPU)HTI\YP/HSSLY :\Z[HPUHISL+L]LSVWTLU[.VHS[OYV\NO,U]PYVUTLU[HS 7HYR JVUZLY]H[PVULK\JH[PVU 0U [VJYLH[LH^HYLULZZVML_WLYPLUJLZVќLYLKH[ 0U 3HMHYNL,JV:`Z[LTZYL]PL^LKP[ZHWWYVHJOLZ )HTI\YP-VYLZ[;YHPSZ[OL[LHTOVZ[LKHU0U[LYTLKPH-P[ULZZ [VPU[LYHJ[P]LS`HUKLќLJ[P]LS`[LHJOPUZWPYLHUKKLSPNO[ *OHSSLUNLH[)HTI\YP-VYLZ[;YHPSZ[OH[IYV\NO[[VNL[OLY `V\UNZJPLU[PZ[ZYLZV\YJLTHUHNLYZHUKLU[O\ZPHZ[Z WHY[PJPWHU[Z[V)HTI\YP-VYLZ[;YHPSZ PULU]PYVUTLU[HSJVUZLY]H[PVU[OYV\NOPU[LYWYL[H[PVUVM )HTI\YPLU]PYVUTLU[HSYLZWVUZPIPSP[`6]LYZ[\KLU[Z 4. Green cement by Bamburi MYVT2LU`HU\UP]LYZP[PLZ^LYLOVZ[LK[V[HPSVYTHKL (ZWHY[VM[OL3HMHYNL/VSJPT.YV\W)HTI\YP*LTLU[ ZJPLU[PÄJÄLSKL_J\YZPVUZVULU]PYVUTLU[HSJVUZLY]H[PVUH[ YLTHPUZÄYTS`JVTTP[[LK[VY\UUPUNJHYIVULѝJPLU[ YLZ[VYLKMVYLZ[WSHU[H[PVUZ;OPZPZHUPUZWPYPUNHWWYVHJOMVY VWLYH[PVUZHUK[OH[PUJS\KLZYLK\JPUNV\YUL[JHYIVU `V\UNZJPLU[PZ[Z[\KLU[Z[VLUNHNLPUWYHJ[PJHSZVS\[PVUZ LTPZZPVUZWLY[VUULVMJLTLU[>LWSHU[VHJOPL]L WYLWHYPUN[OLTILJVTLIL[[LYTHUHNLYZHUK[VJHYLMVY[OL [OPZTHPUS`[OYV\NOYLK\J[PVUVMJSPURLY[VJLTLU[YH[PV environment. JVUZ\TPUNSLZZMVZZPSLULYN`WLY[VUULVMJLTLU[HZ^LSSHZ *HWHJP[`)\PSKPUN3HMHYNL,JV:`Z[LTZJVU[PU\LK^P[O \ZPUNHS[LYUH[P]LM\LSZ HUPU[LYUHSZ[Hќ[YHPUPUNWYVNYHTVU*VUZLY]H[PVU[VI\PSK 0U )HTI\YP*LTLU[THKLZPNUPÄJHU[TPSLZ[VULZI` PU[LYUHSJHWHJP[`^P[OPU[OLMYHTL^VYRVMTPUPUNHUK SH\UJOPUN[OLºNYLLULZ[»JLTLU[WYVK\J[ZPU2LU`H;OL 1. Green Initiative Challenge (GIC): reversing climate change through afforestation LU]PYVUTLU[HSTHUHNLTLU[;OLWYVNYHTPZ[HPSVYTHKL[V [^VJLTLU[IYHUKZUHTLS`;,4)6*,4=JVTWVZP[LHUK JH[LY[V[OLYLX\PYLTLU[ZVMV\YVWLYH[PVUZHUK]PZP[VYZ^OV +<9(*,4*,4000):ZSHNJLTLU[OH]LHUHKKP[PVUVM ;OL.0*WYVNYHTPZH[LU`LHYPUP[PH[P]L[OH[PZKLZPNULK[VJVTIH[KLZLY[PÄJH[PVU PUJS\KLLK\JH[PVUHSNYV\WZ(J[P]P[PLZPUJS\KLPU[LYHJ[P]LWHYR ISHZ[M\YUHJLZSHN[OLYLI`YLK\JPUN[OLHTV\U[VMJSPURLY [OYV\NOHќVYLZ[H[PVU0[ZLLRZ[VZ\WWVY[NYLLUPUNVMHYPKHUKZLTPHYPKHYLHZJOHUNPUN [V\YZLU]PYVUTLU[HS[HSRZHUKWYLZLU[H[PVUZ \ZLK[VWYVK\JL[OLT;OLZL[^VWYVK\J[ZHYLÄYZ[ZSHN [OLJ\S[\YLVMJVTT\UP[PLZ[VILLU]PYVUTLU[HSWYV[LJ[PVUHTIHZZHKVYZI`TPUPTPaPUN JLTLU[ZHUKNYLLULZ[PU[OLTHYRL[\UKLYZJVYPUN)HTI\YP LU]PYVUTLU[HSKLNYHKH[PVUHUKPTWYV]PUNSP]LSPOVVKZ :[HќMYVT3HMHYNL,JV:`Z[LTZPUJVSSHIVYH[PVU^P[O 5H[PVUHS4\ZL\TZVM2LU`HHUK5H[\YL2LU`HWHY[PJPWH[LK *LTLU[»ZJVTTP[TLU[[VZ\Z[HPUHIPSP[`[OYV\NOWYV]PZPVUVM ;OYV\NOHWHY[ULYZOPWIL[^LLU)HTI\YP*LTLU[2LU.LU-V\UKH[PVUHUK)L[[LY PU[OL(UU\HS>H[LYMV^SJLUZ\ZPU>H[HT\HUK4HSPUKP SV^JHYIVUJLTLU[Z .SVIL-VYLZ[Y`[OLWYVNYHT[HYNL[ZZJOVVSZHYV\UK[OL -VYRZO`KYVWV^LYZ[H[PVUZ ;OLL_LYJPZLPZ\ZLK[VWYV]PKLIHZLSPULKH[HHNHPUZ[^OPJO PU,TI\2P[\PHUK4HJOHRVZJV\U[PLZ.0*^HZKLZPNULK[VPUZWPYLHUKLTWV^LY JOHUNLZPU^H[LYIPYKU\TILYZJHUILHZZLZZLKP[HSZV ZJOVVSZHUKZ[\KLU[ZWHY[PJPWH[LPULU]PYVUTLU[HSHJ[P]P[PLZI`KL]LSVWPUNZTHSSMVYLZ[Z HUK^VVKSV[Z^P[OPU[OLPYJVTWV\UKZMVYT\S[PWSLILULÄ[Z]PHZ\Z[HPUHISLTHUHNLTLU[ VM^VVKSV[Z;OLZ\Z[HPUHISLTHUHNLTLU[HUKOHY]LZ[PUNVM[YLLZLLKSPUNZWYV]PKLZ ZJOVVSZ^P[OYLUL^HISLZV\YJLVM^VVKM\LS[OLYLI`YLK\JPUNWYLZZ\YLVUZ\YYV\UKPUN MVYLZ[YLZV\YJLZJVU[YPI\[PUN[V[OLYLK\J[PVUVMNYLLUOV\ZLNHZLZ[OYV\NOJHYIVU ZLX\LZ[YH[PVUHUKZLJ\YPUN^H[LYJH[JOTLU[HYLHZI`JVU[YVSSPUNZVPSLYVZPVU ;OLV]LYHSSNVHSVM[OLWYVNYHTPZ[VLUYVSZJOVVSZHUKNYLLU HJYLZ^P[O [YLLZLLKSPUNZHUK MY\P[ZLLKSPUNZI`[OL`LHY 0U .0*^VYRLK^P[OZJOVVSZ[LHJOLYZHUKV]LYZ[\KLU[ZPU JHWHJP[`I\PSKPUNHUK[YLLNYV^PUN7HY[VM)HTI\YP»ZZWVUZVYZOPWVM[OLWYVNYHT ^LU[[V^HYKZZJOVSHYZOPWHUKTLU[VYZOPWVMIYPNO[HUKULLK`Z[\KLU[Z^OVWYV]LK[V ILLU]PYVUTLU[HSHTIHZZHKVYZ>LHSZVOVZ[LK[OL^PUUPUNZ[\KLU[Z[LHJOLYZHUK LK\JH[PVUVѝJLYZH[V\YNSVIHSS`HJJSHPTLKJVUZLY]H[PVUZOV^JHZL)HTI\YP/HSSLY7HYR 2. Quarry rehabilitation and maintenance 3HMHYNL,JV:`Z[LTZ[OLLU]PYVUTLU[HSHYTVM)HTI\YP*LTLU[JVU[YPI\[LZ[V^HYKZ JVTIH[PUNJSPTH[LJOHUNL[OYV\NO[OLYLOHIPSP[H[PVUVM)HTI\YP*LTLU[»ZX\HYYPLZ HUKIPVKP]LYZP[`JVUZLY]H[PVU.YLLUPUNHJ[PVUZJVU[YPI\[L[VWVSS\[PVUJVU[YVS[OYV\NO [OLHIZVYW[PVUVM*6LTPZZPVUZHUKYLSLHZLVMV_`NLU]P[HSMVYO\THU^LSSILPUN `LHYZVMJVUZPZ[LU[X\HYY`YLOHIPSP[H[PVUWYVNYHTTLOHZYLZ\S[LKPUYLOHIPSP[H[PVUVMTVYL [OHUOHVMSHUK"YLZ\S[PUNPUMVYLZ[WSHU[H[PVUZ[OH[WSH`HTHQVYYVSLPUTHPU[HPUPUN O`KYVSVN` 0U [OL9LOHIPSP[H[PVU[LHTH[3HMHYNL,JV:`Z[LTZJVUJS\KLKWPVULLYWSHU[PUN VM /HVMX\HYY`YLOHIPSP[H[PVUPU=PWPUNV8\HYY`^P[OV]LY WPVULLY*HZ\HYPUH LX\PZL[PMVSPHZLLKSPUNZILPUNWSHU[LKK\YPUN[OLYHPU`ZLHZVU;OL[LHTHSZVJVUK\J[LK [OLÄYZ[WOHZLVMTHPU[LUHUJLMVYH`V\UN OHJHZ\HYPUHMVYLZ[WSHU[H[PVU7SHU[H[PVU THPU[LUHUJLPZWHY[VMX\HYY`YLOHIPSP[H[PVUWYVJLZZHUKPU]VS]LZZ[HRPUNYLWSHJPUN TVY[HSP[PLZWY\UPUNHUK[OPUUPUN@V\UNWSHU[H[PVUZ^P[O[YLLZYHUNPUNIL[^LLU 68 TL[LYZ[V TL[LYZPUOLPNO[\UKLYNVJVU[PU\V\ZTVUP[VYPUNHUKTHPU[LUHUJL 69 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 3 SUSTAINABILITY REVIEW Water and Nature ;OPZYPJOIPVKP]LYZP[`THRLZ[OLZLWHYRZPKLHSSLHYUPUN Uganda NYV\UKZMVYH]HYPL[`VMJVUZLY]H[PVUSLZZVUZ^P[OHJYVZZ ZLJ[PVUVMYLZV\YJLZH]HPSHISL[V]PZP[VYZ[VPU[LYHJ[^P[OHUK Environment: Promoting better land use KLYP]LHZT\JO]HS\LHZWVZZPISLMYVT[OLT 0U ^LJVU[PU\LKV\YWHY[ULYZOPW^P[O>VYSK>PKL 2. Wildlife integration -\UKMVY5H[\YL>>-[VWYVTV[LIL[[LYSHUK\ZLWYHJ[PJLZ I`MHYTLYZ[OYV\NOWH`TLU[MVY>H[LYZOLK:LY]PJLZ >LOH]LJYLH[LKHM\UJ[PVUHSLJVZ`Z[LTV]LY[OL`LHYZ :JOLTLPU[OL9P]LY4\I\R\JH[JOTLU[HYLHPU>LZ[LYU ;OPZPUJS\KLZ[OLPU[YVK\J[PVUVMHUPTHSZTHU`VM[OLT 70 71 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 3 SUSTAINABILITY REVIEW Circular Economy Kenya >HZ[LJVU[PU\LZ[VILHTHQVYJOHSSLUNLKLTHUKPUN \YNLU[H[[LU[PVUNSVIHSS`^P[OJV\U[YPLZZ[Y\NNSPUN[V Geocycle provides ÄUKZ\Z[HPUHISLZVS\[PVUZ[VTHUHNPUN^HZ[LVMKPќLYLU[ MVYTZMYVT4\UPJPWHS:VSPK>HZ[L4:>[VHNYPJ\S[\YHS sustainable waste ^HZ[LWOHYTHJL\[PJHSHUK]HYPV\Z[`WLZVMPUK\Z[YPHS management solutions ^HZ[L2LU`HPZUVL_JLW[PVU 0U2LU`HPSSLNHS^HZ[LTHUHNLTLU[WYHJ[PJLZ[OH[Z[LT and safe disposal MYVTPTWYVWLYHKTPUPZ[YH[PVUVMK\TWZP[LZOH]LILJVTL [OLUVYT^P[OJV\U[`NV]LYUTLU[ZNYHWWSPUN[VTHUHNL of industrial and L]LYNYV^PUN]VS\TLZVMT\UPJPWHSZVSPK^HZ[L[OH[LUK \WPU]HYPV\ZK\TWZP[LZHJYVZZ[OLJV\U[Y` agricultural wastes, :PUJLPUJLW[PVUPU .LVJ`JSL2LU`HOHZJVU[PU\LK [VVќLY^HZ[LTHUHNLTLU[ZLY]PJLZ[V^HZ[LWYVK\JLYZ through co-processing PU]HYPV\ZZLJ[VYZVM[OLLJVUVT`;OL.LVJ`JSL[LHT JVU[PU\LZ[V[HWPU[V[OLL_WLY[PZLHUKRUV^SLKNL at cement kilns. from LafargeHolcim Group to provide economical and Z\Z[HPUHISLZVS\[PVUZ[V[OL^HZ[LTHUHNLTLU[JOHSSLUNL ^P[OPU2LU`H .LVJ`JSLZV\YJLZMVY]HYPV\Z[`WLZVM^HZ[L^OPJO )HTI\YP*LTLU[KPZWVZLZVќ[OYV\NOV\YJLTLU[RPSUZ SLH]PUNUVYLZPK\LZ^OPSLHJOPL]PUNIV[OLULYN`HUKVY TH[LYPHSZYLJV]LY` .LVJ`JSLOHZLUNHNLKSPRLTPUKLKVYNHUPaH[PVUZ HUKJH\J\ZLZ[VLUJV\YHNLYLZWVUZPISLOHUKSPUNHUK [YLH[TLU[VM^HZ[LPUVYKLY[VWYV[LJ[[OLLU]PYVUTLU[ \[PSPaPUN[OLZLMVY\TZ[VZOHYLILZ[WYHJ[PJLZHSVUN ^P[OPUJYLHZPUNH^HYLULZZVU[OLILULÄ[ZVM^HZ[L THUHNLTLU[[OYV\NOJVWYVJLZZPUNPUJLTLU[RPSUZ *VWYVJLZZPUNPZHZHMLHUKTVYLYLZWVUZPISLZVS\[PVU[V ^HZ[LTHUHNLTLU[^P[O]HYPV\ZILULÄ[Z *VWYVJLZZPUNVM^HZ[LPUJLTLU[RPSUZVќLYZH Z\WLYPVYLU]PYVUTLU[HSS`MYPLUKS`ZVS\[PVU[V^HZ[L THUHNLTLU[SLH]PUNaLYVYLZPK\LHUKUV^HZ[L 0[YLK\JLZNYLLUOV\ZLNHZLTPZZPVUZHZ^HZ[LPZ\ZLK [VYLWSHJLMVZZPSM\LSZHUKYH^TH[LYPHSZ +\L[V\ZLVM^HZ[LHZHS[LYUH[P]LM\LSVYYH^ TH[LYPHSZ.LVJ`JSLJVU[YPI\[LZ[V[OLWYLZLY]H[PVU VMMVZZPSM\LSZHUKV[OLYUH[\YHSYLZV\YJLZ[OH[^V\SK UVYTHSS`ILTPULKHUK\ZLKPUJLTLU[WYVK\J[PVU 72 73 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 3 SUSTAINABILITY REVIEW Circular Economy 0U ZVTLVM[OLPUP[PH[P]LZ[OH[JHTLVMHNL include: ;OL:HML>HZ[L6PS+PZWVZHS:>6+ PUP[PH[P]L[OPZPZHWHY[ULYZOPWIL[^LLU .LVJ`JSL2LU`HHUK[OL7L[YVSL\T0UZ[P[\[L VM,HZ[(MYPJH70,(:>6+PZHPTLKH[ WYL]LU[PUN^HZ[LVPSMYVTILPUNYLJ`JSLK HUKZVSK[VTV[VYPZ[ZHZPUMLYPVYS\IYPJHU[Z [OH[^V\SKUV[VUS`KHTHNL[OL]LOPJSLZVM TV[VYPZ[ZI\[HSZV[OLLU]PYVUTLU[>OLU WVVYS`THUHNLK^HZ[LVPSTH`HSZVLUK \WILPUNZWPSSLKVU[OLNYV\UK[OLYLMVYL JVU[HTPUH[PUNV\Y^H[LYZHUKZVPSZ;OYV\NO :>6+.LVJ`JSLOHZWYVJLZZLKPUL_JLZZVM TPSSPVUSP[YLZVM^HZ[LVPS *VWYVJLZZPUNVMHNYPJ\S[\YHS^HZ[LMYVT TPSSLYZHUKL_WVY[LYZVMHNYPJ\S[\YHSWYVK\JL HUKSVJHSMHYTPUNJVTT\UP[PLZHUKLUZ\YPUN KPZWVZHSVMTPSSPUN^HZ[LZ\JOHZYPJLO\ZRZ HUK[LHZ^LLWPUNZ 6ќLYPUN^HZ[LKPZWVZHSZLY]PJLZ[V NV]LYUTLU[HNLUJPLZMVYJVUKLTULK NVVKZKLZPNUH[LKMVYKLZ[Y\J[PVUHZ^LSSHZ KPZWVZHSVMOHaHYKV\ZHUKUVUOHaHYKV\Z ^HZ[LMVY]HYPV\ZPUK\Z[YPLZHUKZLJ[VYZ .YV^PUNJVUZ\TW[PVUVM^HZ[L[`YLZMYVT [YHUZWVY[LYZÅLL[V^ULYZHUKYLJ`JSLYZ ,UNHNLTLU[Z^P[O5H[PVUHS,U]PYVUTLU[HS 4HUHNLTLU[(\[OVYP[`5,4([VZ\WWVY[ LќVY[Z[OH[LUZ\YL^HZ[LMYLLLU]PYVUTLU[ [OYV\NOWVSPJ`PTWSLTLU[H[PVUHUKLUMVYJPUN ILZ[WYHJ[PJLZPU^HZ[LTHUHNLTLU[ 0U )HTI\YP*LTLU[»Z4VTIHZH7SHU[ HJOPL]LKH[OLYTHSZ\IZ[P[\[PVUYH[L;:9VM 0TWYV]LKWLYMVYTHUJLVU[OLYTHSZ\IZ[P[\[PVUYH[L;:9 )PVTHZZKY`LYWYVQLJ[HSZVNV[*(7,?HWWYV]HSPU ^OPSL[OL5HPYVIP.YPUKPUN7SHU[HJOPL]LK ^HZVUHJJV\U[VM! 6UJVTWSL[PVUP[^PSSLUZ\YLHZLJ\YLZV\YJLVMIPVTHZZ HZ\IZ[P[\[PVUYH[LVM H[HJOLHWLYJVZ[HUKIL[[LYJSPURLYMHJ[VY5L_[Z[LWZ IL[[LYUL[JHSVYPÄJ]HS\L PUJS\KLKLZPNUHUKSH`V\[HWWYV]HSHUKZLSLJ[PVUVM Uganda Z[YVUNJVSSHIVYH[PVUIL[^LLUZ[HRLOVSKLYZ" X\HSPÄLKZ\WWSPLY^P[OH[HYNL[[VJVTTPZZPVUPUNPU :LW[LTILY .LVJ`JSLWYV]PKLZZ\Z[HPUHISL^HZ[L 6W[PTHS(-TP_KLZPNU[OH[JVUZPKLYLKX\HSP[`HUKJVZ[ THUHNLTLU[ZVS\[PVUZHUKZHMLKPZWVZHSVM 4HU\MHJ[\YLVM[OL*OLTPJHSJO\[LLX\PWTLU[^HZ .VVKZV\YJPUNZ[YH[LN` PUK\Z[YPHSHUKHNYPJ\S[\YHS^HZ[LZ[OYV\NOJV JVTWSL[LKPU [OLWYVQLJ[^PSSLUZ\YL[OH[.LVJ`JSL WYVJLZZPUNH[JLTLU[RPSUZ :[HISLWSHU[VWLYH[PVUZ \[PSPaLZ[OLRPSUZMVYYL]LU\LNLULYH[PVU ;OLHS[LYUH[P]LM\LSZJVUZ\TLKPU H[/PTH ;VWTHUHNLTLU[Z\WWVY[ .LVJ`JSL GOVERNANCE 76 77 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 4 GOVERNANCE Corporate Governance Statement ;OL)VHYKVM+PYLJ[VYZVM Board >OPSL[OL.YV\WKVLZUV[ZWLJPM`H[PTLYLX\PYLTLU[[OH[LHJOKPYLJ[VYT\Z[KLKPJH[LMVY[OLI\ZPULZZVM[OL.YV\W +PYLJ[VYZHYLL_WLJ[LK[VH[[LUKHSSTLL[PUNZVM[OL)VHYKHUK[OL*VTTP[[LLZVU^OPJO[OL`ZLY]LHUK[VKL]V[LZ\ѝJPLU[ Bamburi Cement Limited Mandate [PTL[V[OL*VTWHU`[VWLYMVYT[OLPYK\[PLZ>P[O)VHYKWHWLYZHUKV[OLYKVJ\TLU[ZJPYJ\SH[LKH[SLHZ[MV\Y[LLUKH`ZPU YLTHPUZÄYTPUP[ZILSPLM[OH[ ;OL)VHYKVM+PYLJ[VYZTHPUYVSLZHYLWYV]PKPUNSLHKLYZOPWHUKZ[L^HYKZOPWMVY HK]HUJL[OL+PYLJ[VYZHYLL_WLJ[LK[VILZ\ѝJPLU[S`WYLWHYLKMVYHUKM\SS`WHY[PJPWH[LPUHSSTLL[PUNZ;OLH[[LUKHUJLYLWVY[ good corporate governance [OL.YV\W MVY[OL`LHY\UKLYYL]PL^PZJVU[HPULKPU[OL[HISLILSV^ PZJYP[PJHSMVY[OLSVUN[LYT 0[ZVWLYH[PVUZHYLNV]LYULKI`[OL*VTWHU`»Z(Y[PJSLZVM(ZZVJPH[PVU[OL)VHYK Audit & Risk NR&HR Director Category Board AGM Z\JJLZZVM[OL.YV\WLUZ\YPUN *OHY[LY[OL)VHYK(UU\HS>VYR7SHUHUK[OL)VHYK4HU\HSHZ^LSSHZZ[H[\[VY` Committee Committee WYV]PZPVUZ\UKLY[OLSH^ZVM[OL9LW\ISPJVM2LU`H Z\Z[HPUHISLYL[\YUZMVYPU]LZ[VYZ 1VOU:PTIH 5VUL_LJ\[P]L - HUKZ[HRLOVSKLYZ ;VLUZ\YL[OLVISPNH[PVUZVM[OL)VHYKHYLJSLHY[VHSS[OL)VHYKOHZKL]LSVWLK :LKKPX/HZZHUP Executive H:JOLK\SLVM4H[[LYZ9LZLY]LKMVY[OL)VHYK^OPJOHYLTH[[LYZ[OH[VUS`[OL (SPJL6^\VY 5VUL_LJ\[P]L ;OPZZ[H[LTLU[WYV]PKLZ )VHYKP[ZLSMVY[OYV\NOP[ZJVTTP[[LLZJHUOHUKSL(U`PZZ\LZV\[ZPKL[OLZL[OL ULJLZZHY`PUMVYTH[PVU[V )VHYKOHZKLSLNH[LK[V4HUHNLTLU[[OYV\NO[OL:JOLK\SLVM4H[[LYZ+LSLNH[LK .YHJL6S\VJO Executive - LUHISLPU]LZ[VYZL]HS\H[LOV^ I`[OL)VHYK /LSLU.PJOVOP 5VUL_LJ\[P]L - [OL*VTWHU`OHZHWWSPLK -VYV[OLYTH[[LYZ[OL)VHYKPZZ\WWVY[LKI`[OYLLJVTTP[[LLZ[OL(\KP[ 9PZR 1LHU4PJOLS7VUZ Executive - [OLWYPUJPWSLZVM;OL*HWP[HS *VTTP[[LL[OL5VTPUH[PVU9LT\ULYH[PVU /9*VTTP[[LLHUK[OL,_LJ\[P]L 1VZLWO2PTV[L 5VUL_LJ\[P]L - Committee. 4HYRL[Z(\[OVYP[`;OL*VKL 4I\]P5N\UaL 5VUL_LJ\[P]L of Corporate Governance ;OL)VHYKOHZKL]LSVWLKJOHY[LYZMVYP[ZLSMHUKP[ZJVTTP[[LLZHZ^LSSHZ 5PJVSHZ.LVYNL Executive -- KVJ\TLU[LKHSSWVSPJPLZULJLZZHY`MVYM\Y[OLYHUJLVMP[ZTHUKH[L;OLZL - 7YHJ[PJLZMVY0ZZ\LYZVM KVJ\TLU[ZHUKHSSNV]LYUHUJLKVJ\TLU[ZHYLYL]PL^LKYLN\SHYS`[VLUZ\YL[OL` 9P[H2H]HZOL 5VUL_LJ\[P]L :LJ\YP[PLZ[V;OL7\ISPJ YLTHPUYLSL]HU[HUKHWWSPJHISLPU[OLZLL]LY`JOHUNPUN[PTLZ 7PLYYL+LSLWSHUX\L 5VUL_LJ\[P]L - [OL*VKLHUKV[OLYNSVIHS Membership and Size =HZPSLPVZ2HYHSPZ 5VULL_LJ\[P]L -- ILZ[WYHJ[PJLZHUKZOV\SKIL :PUJL[OLSHZ[YLWVY[5PJVSHZ.LVYNLYLZPNULKHZ[OL/PTH4HUHNPUN+PYLJ[VY NOTE: U\TILYZHYLH[[LUKHUJLU\TILYVMTLL[PUNZLU[P[SLK[VH[[LUK YLHK[VNL[OLY^P[O[OL^PKLY HUK^HZYLWSHJLKI`1LHU4PJOLS7VUZ corporate governance report ;OL)VHYKJVTWVZP[PVUYLTHPULK[OLZHTL^P[OÄ]LPUKLWLUKLU[UVUL_LJ\[P]L ;OL*OHPYTHUHUK.YV\W4HUHNPUN+PYLJ[VYTLL[H[SLHZ[VUJLHTVU[O^OLYL[OL.YV\W4HUHNPUN+PYLJ[VY\WKH[LZ[OL VU[OL*VTWHU`^LIZP[L KPYLJ[VYZ[OYLLUVUL_LJ\[P]LKPYLJ[VYZHUK[OYLLL_LJ\[P]LKPYLJ[VYZYLWYLZLU[PUN *OHPYTHUVUHU`TH[[LYZ[OH[YLX\PYL[OL*OHPYTHU»ZH[[LU[PVU-\Y[OLY[OL*OHPYTHUHUKVY[OL.YV\W4HUHNPUN+PYLJ[VY MV\YKPќLYLU[UH[PVUHSP[PLZHUKKP]LYZLWYVMLZZPVUHSIHJRNYV\UKZ OVSKKPZJ\ZZPVUZ^P[O[OL+PYLJ[VYZPUKP]PK\HSS`VYQVPU[S`[VRLLW+PYLJ[VYZ\WKH[LKHUKWYV]PKLVWWVY[\UP[`MVY[OL+PYLJ[VYZ 0USPUL^P[O[OLN\PKLSPULZ [VYHPZLHU`PZZ\LZVYJVUJLYUZPUIL[^LLU[OLTLL[PUNZ PZZ\LKI`[OL*HWP[HS4HYRL[Z >P[OV]LY JVTWYPZPUNVMUVUL_LJ\[P]LKPYLJ[VYZ[OL)VHYKPZHISL[V LќLJ[P]LS`WYV]PKLPUKLWLUKLU[V]LYZPNO[VUZ[YH[LN`RLLW4HUHNLTLU[PU +\YPUN[OL`LHY[OL*VTWHU`PU[YVK\JLKZLZZPVUZMVY[OLPUKLWLUKLU[UVUL_LJ\[P]L+PYLJ[VYZILMVYLHM[LYLHJO)VHYK (\[OVYP[`PU OH]PUN JOLJRSL]LYHNLVU[OLPYUL[^VYRVMV\[ZPKLJVU[HJ[ZMVY[OL.YV\W»ZILULÄ[^OPSL HUKVY*VTTP[[LLTLL[PUNPU[OLHIZLUJLVM4HUHNLTLU[;OL+PYLJ[VYZJHUHSZVOH]LVUSPULKPZJ\ZZPVUZMHJPSP[H[LKI`[OL \UKLY[HRLUHNV]LYUHUJL LUZ\YPUNWYVWLYYPZRTHUHNLTLU[^P[OPU[OLWHYHTL[LYZKLLTLKHJJLW[HISLMVY .YV\W»Z,)VHYKZVM[^HYL^OPJOHSZVLUZ\YLZLJ\YP[`VM[OLPUMVYTH[PVU [OL.YV\W H\KP[MVY[OL`LHY HUK Director Compensation KLTVUZ[YH[LKWYVHJ[P]L -VY[OL`LHY\UKLYYL]PL^[OL+PYLJ[VYZHYLZH[PZÄLK^P[O[OLLќLJ[P]LULZZVM[OL +PYLJ[VYJVTWLUZH[PVUPZYL]PL^LKHUU\HSS`I`[OL)VHYKHUKHWWYV]LKI`[OL:OHYLOVSKLYZ;OLKL[HPSZVM[OL+PYLJ[VY )VHYKHUKP[Z*VTTP[[LLZ PTWSLTLU[H[PVUVM[OLH\KP[ JVTWLUZH[PVUHYLJVU[HPULKPU[OL+PYLJ[VYZ»9LT\ULYH[PVU9LWVY[^OPJOPZJVU[HPULKLSZL^OLYLPU[OPZ(UU\HS9LWVY[ ÄUKPUNZ[OL*VTWHU`^HZ Operations ;OLL_LJ\[P]L+PYLJ[VYZHUK[OL3HMHYNL/VSJPTUVTPULLZKVUV[YLJLP]LHU`HKKP[PVUHSJVTWLUZH[PVUMVY[OLPYZLY]PJLVU[OL UV[YLX\PYLK[VJHYY`V\[H >P[O[OLZ\WWVY[HUKHZZPZ[HUJLMYVT[OL.YV\W4HUHNPUN+PYLJ[VYHUK[OL Board. :LJYL[HY`[OL*OHPYTHUPZYLZWVUZPISLMVY[OLVWLYH[PVUZVM[OL)VHYKPUJS\KPUN NV]LYUHUJLH\KP[MVY[OL`LHY Separation of Roles \UKLYYL]PL^ ^P[OV\[SPTP[H[PVUZL[[PUNHNLUKHWYLZPKPUNV]LY[OLTLL[PUNZHZ^LSSHZ WYV]PKPUNSLHKLYZOPWHUKN\PKHUJL 0USPUL^P[ONVVKNV]LYUHUJL[OLYVSLZVM[OL*OHPYVM[OL)VHYKVM+PYLJ[VYZHUK[OH[VM[OL.YV\W4HUHNPUN+PYLJ[VYHYL OLSKI`[^VKPќLYLU[PUKP]PK\HSZ^P[OLHJOOH]PUNJSLHYHUKKPZ[PUJ[YLZWVUZPIPSP[PLZ ;OL)VHYK»ZVWLYH[PVUZHYLN\PKLKI`[OL(UU\HS>VYR7SHUHZ^LSSHZHU` KLTHUKZ[OH[TH`HYPZL ;OLYLZWVUZPIPSP[PLZVM[OL*OHPYPUJS\KLWYV]PKPUNSLHKLYZOPW[V[OL)VHYKTHUHNLTLU[VM)VHYKHќHPYZJVYWVYH[L NV]LYUHUJL)VHYKWLYMVYTHUJLL]HS\H[PVUHJ[PUNHZ[OLPU[LYTLKPHY`IL[^LLU[OL)VHYKHUK4HUHNLTLU[HZ^LSSHZ ;VHKLX\H[LS`JV]LY[OL)VHYK»ZHUU\HS^VYRWSHUTLL[PUNKH[LZHYLHNYLLK YLWYLZLU[PUN[OL.YV\WPUPU[LYHJ[PVUZ^P[OZ[HRLOVSKLYZ PU5V]LTILYVM[OLWYLJLKPUN`LHY0U [OL)VHYKOLSKLPNO[TLL[PUNZ [OYLLTVYL[OHU[OL\Z\HSU\TILYK\L[VL_PNLUJPLZVMK\[`PUJS\KPUNHZWLJPHS ;OL4HUHNPUN+PYLJ[VYPZYLZWVUZPISLMVY[OLKH`[VKH`Y\UUPUNVM[OLVWLYH[PVUZLUZ\YPUN[OLZ[YH[LN`HWWYV]LKI`[OL TLL[PUNHUKHZLZZPVU[VKPZJ\ZZ[OLÄUKPUNZVMP[ZÄYZ[WLYMVYTHUJLL]HS\H[PVU )VHYKPZPTWSLTLU[LK^P[OPU[OLKLÄULKYPZRTH[YP_HUK[OH[[OLVIQLJ[P]LZZL[HYLTL[ JVUK\J[LKI`HUL_[LYUHSJVUZ\S[HU[^OPJOTLL[PUNHSZVKL]LSVWLKHJ[PVUWSHUZ MYVT[OLPKLU[PÄLKPZZ\LZ 4LL[PUN]LU\LZHYLJOVZLU[VLUZ\YL[OL)VHYK]PZP[ZHZTHU`VM[OL.YV\W»Z ZP[LZHZWVZZPISLHUKPU[LYHJ[Z^P[OLTWSV`LLZH[[OLZLZP[LZ 78 79 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 4 GOVERNANCE Corporate Governance Statement (continued) Training & Evaluation ;OL)VHYKHUK[OL*VTTP[[LLZHYLZH[PZÄLK[OH[[OL +\YPUN[OL`LHY[OL*VTTP[[LLYL]PL^LKZ[HќYLT\ULYH[PVU *VTTP[[LLZOH]LTL[[OLPYTHUKH[LZHZWYV]PKLKMVYPU PUJS\KPUN]HSPKH[PVUVM[OL IVU\ZVIQLJ[P]LZ Induction and Training [OLYLZWLJ[P]L*OHY[LYZ^OPJO^HZHSZVJVUÄYTLKI`[OL HJOPL]LTLU[ZHUKYL]PL^HWWYV]HSVM[OLYLT\ULYH[PVU ;OL)VHYKOHZZL[[OLWYPUJPWSLZVUPUK\J[PVUHUK[YHPUPUNMVY[OL+PYLJ[VYZ ÄUKPUNZVM[OLWLYMVYTHUJLL]HS\H[PVU WYVWVZHSZMVY MVYIV[O2LU`HHUK IT Policy ;OL)VHYKOHZHKVW[LK[OL3HMHYNL/VSJPT.YV\W0;WVSPJ` ;OL7VSPJ`HPTZ[VJYLH[L]HS\LHZPUUV]H[P]LI\ZPULZZLUHISLYHUKHULѝJPLUJ`KYP]LYHUKPUJS\KLZ[OYLLKVTHPUZ0; :PNUPÄJHU[TH[[LYZHYLKPZZLTPUH[LK[V :LJ\YP[`0;:LY]PJL4HUHNLTLU[HUKV[OLY0;WYVJLZZLZ;OL7VSPJ`ZL[ZV\[[OLHYLHZVM0;YLZWVUZPIPSP[`P[ZWYVJLZZLZ the market through announcements to the HUKHNV]LYUHUJLTVKLS;OL0;MYHTL^VYRPZKLZPNULKHUKTHPU[HPULKVUHYLN\SHYIHZPZ[VRLLW[OLHWWYVHJOVUHU HWWYVWYPH[LSL]LSVMNV]LYUHUJLHUK[VLUZ\YLLѝJPLU[HUKZLJ\YLWYVJLZZLZ regulators, publication in the newspapers Procurement Policy and posting on the Group’s website. ;OL)VHYKOHZHKVW[LK[OL3HMHYNL/VSJPT.YV\W0;WVSPJ` ;OL7VSPJ`HPTZ[VJYLH[L]HS\LHZPUUV]H[P]LI\ZPULZZLUHISLYHUKHULѝJPLUJ`KYP]LYHUKPUJS\KLZ[OYLLKVTHPUZ0; :LJ\YP[`0;:LY]PJL4HUHNLTLU[HUKV[OLY0;WYVJLZZLZ;OL7VSPJ`ZL[ZV\[[OLHYLHZVM0;YLZWVUZPIPSP[`P[ZWYVJLZZLZ HUKHNV]LYUHUJLTVKLS;OL0;MYHTL^VYRPZKLZPNULKHUKTHPU[HPULKVUHYLN\SHYIHZPZ[VRLLW[OLHWWYVHJOVUHU HWWYVWYPH[LSL]LSVMNV]LYUHUJLHUK[VLUZ\YLLѝJPLU[HUKZLJ\YLWYVJLZZLZ Related Party Transactions Policy ;OL7VSPJ`HWWSPLZ[VHU`[YHUZHJ[PVUHYYHUNLTLU[VYYLSH[PVUZOPWVYHU`ZLYPLZVMZPTPSHY[YHUZHJ[PVUZHYYHUNLTLU[ZVY YLSH[PVUZOPWZIL[^LLU[OL*VTWHU`HUKVULVYTVYLVMP[Z9LSH[LK7HY[PLZ0[WYV]PKLZHMYHTL^VYRMVYNV]LYUHUJLHUK YLWVY[PUNVM9LSH[LK7HY[`;YHUZHJ[PVUZ ;OL)VHYKHSZVYL]PL^LK[OLYLSH[LKWHY[`[YHUZHJ[PVUZWVSPJ`HZ^LSSHZ[OLYLJVTTLUKH[PVUZVM[OL(\KP[ 9PZR*VTTP[[LL VULHJO[YHUZHJ[PVU (SSYLSH[LKWHY[`[YHUZHJ[PVUZHYLKLJSHYLKLSZL^OLYLPU[OPZYLWVY[ Share Trading ;OL)VHYKHWWSPLZ[OLZ[H[\[VY`WYV]PZPVUZHZ^LSSHZ[OL3HMHYNL/VSJPT;YHKL9LZ[YPJ[PVU4HYRL[+PZJSVZ\YL+PYLJ[P]LPU YLZWLJ[VMZOHYLKLHSPUNZ )LMVYL[OLLUKVMLHJO`LHY[OL*VTWHU`:LJYL[HY`JVTT\UPJH[LZ[OLISHJRV\[WLYPVKZK\YPUN^OPJO[OL+PYLJ[VYZHUK PKLU[PÄLKYLSL]HU[LTWSV`LLZHYLUV[H\[OVYPZLK[V[YHKLPU*VTWHU`ZOHYLZ Communication ;OL)VHYK»ZJVTT\UPJH[PVUZ[YH[LN`HPTZ[VWYV]PKLZOHYLOVSKLYZ^P[O[OLOPNOLZ[Z[HUKHYKZVMKPZJSVZ\YLHUKÄUHUJPHS [YHUZWHYLUJ`;OL)VHYKHUUV\UJLZP[ZHJOPL]LTLU[ZHUKWYVZWLJ[Z[VZOHYLOVSKLYZI`^H`VMPU[LYPTHUKM\SS`LHYYLZ\S[Z :PNUPÄJHU[TH[[LYZHYLKPZZLTPUH[LK[V[OLTHYRL[[OYV\NOHUUV\UJLTLU[Z[V[OLYLN\SH[VYZW\ISPJH[PVUPU[OLUL^ZWHWLYZ HUKWVZ[PUNVU[OL.YV\W»Z^LIZP[L +\YPUN[OL`LHY[OL.YV\W4HUHNPUN+PYLJ[VYOLSKZL]LYHSZLZZPVUZ^P[O[OLTLKPH[VKPZJ\ZZ[VWPJHSPZZ\LZ3HMHYNL,JV :`Z[LTZ3PTP[LK»ZZ\Z[HPUHIPSP[`LќVY[Z^LYLHSZVMLH[\YLKPU[OLSVJHSTLKPH ;OL.YV\W]HS\LZ[OLVWPUPVUZVMWYP]H[LPU]LZ[VYZHUKJVU[PU\LK[VLUNHNL[OLT[OYV\NOV\[[OL`LHY;OL.YV\W4HUHNPUN +PYLJ[VYHUK-PUHUJL+PYLJ[VYTL[^P[OHUKYLJLP]LKMLLKIHJRMYVTHUHS`Z[ZHUKPUZ[P[\[PVUHSZOHYLOVSKLYZ ;OL.YV\WLUJV\YHNLZPUKP]PK\HSZOHYLOVSKLY^P[OLUX\PYPLZ[VMVY^HYK[OLT^OPJOHYL[OLUTHUHNLKI`[OL*OHPY[OL 4HUHNPUN+PYLJ[VYHUKVY[OL*VTWHU`:LJYL[HY` Annual General Meeting ;OL.YV\WOLSKP[Z(UU\HS.LULYHS4LL[PUN(.4VU 1\UL PU4VTIHZH[OL.YV\W»ZOVTLIHZL6[OLY[OHU[OL :OHYLOVSKLYZ[OL+PYLJ[VYZ^LYLHSZVWYLZLU[HUK\ZLKP[[VTLL[HUKPU[LYHJ[^P[O[OL:OHYLOVSKLYZWYLZLU[;OLTLL[PUN ^HZHSZVH[[LUKLKI`HYLWYLZLU[H[P]LMYVT+LSVP[[L[OLL_[LYUHSH\KP[VYZ Financial Results ;OL.YV\WHUUV\UJLZP[ZÄUHUJPHSYLZ\S[ZL]LY`ZP_TVU[OZ;OLOHSM`LHYHUKM\SS`LHYYLZ\S[ZHYLYLSLHZLK[OYV\NO W\ISPJH[PVUPU[^VKHPS`UL^ZWHWLYZHUK[OL.YV\W»Z^LIZP[L;OL.YV\WHSZVYLSLHZLZH8 (WHWLY^P[OLHJOZL[VM ÄUHUJPHSYLZ\S[Z[VLUHISLHKLLWLY\UKLYZ[HUKPUNVM[OLYLZ\S[Z^OPSLHSZVHU[PJPWH[PUNHUKYLZWVUKPUN[VHU`X\LZ[PVUZ YLSH[PUN[OLYL[V ;OLZOHYLOVSKLYZHSZVNL[HJVW`VM[OLHUU\HSYLWVY[^OPJOJVU[HPUZ[OLM\SS`LHYYLZ\S[ZV[OLYYLWVY[ZHUKPUMVYTH[PVUVU [OL.YV\W 82 83 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 4 GOVERNANCE Remuneration Report ;OPZ9LWVY[PZJVTWPSLKPUJVTWSPHUJL[V+P]PZPVU VM[OL2LU`HU*VTWHUPLZ(J[ HUKPU Performance Bonus 2018 HJJVYKHUJL^P[O[OL;LU[O:JOLK\SLVM[OL*VTWHUPLZ.LULYHS9LN\SH[PVUZ >OLYLYLX\PYLK (SSLTWSV`LLZWHY[PJPWH[LPU[OL.YV\W»ZZOVY[[LYTPUJLU[P]LWYVNYHT^OLYL[OLIVU\ZWHPKPZKPZJYL[PVUHY`HUKIHZLKVU HUKHZPUKPJH[LK[OL9LWVY[OHZILLUH\KP[LKI`[OLH\KP[VYZ+LSVP[[L *VTWHU`HUKPUKP]PK\HSWLYMVYTHUJL-VY[OL.YV\W4HUHNPUN+PYLJ[VY[OLZOVY[[LYTPUJLU[P]LWYVNYHTHSZVPUJS\KLZ 3HMHYNL/VSJPT4PKKSL,HZ[(MYPJHYLNPVUVIQLJ[P]LZ6]LYHSSIVU\ZWLYMVYTHUJLMVY2LU`HHUK Remuneration Outcomes 2018 - 2019: Executive Directors Remuneration Outcomes 2018 - 2019: Non-Executive Directors Terms of Employment Terms of Employment ;OL,_LJ\[P]L+PYLJ[VYZHYLLTWSV`LK\UKLYZLY]PJLJVU[YHJ[Z[OH[HYLLP[OLYÄ_LK[LYTVYVWLULUKLK;OLKH[LZVM[OLZL ;OLUVUL_LJ\[P]L+PYLJ[VYZPUJS\KPUN[OL*OHPYTHUHYLHWWVPU[LKI`SL[[LYZVMHWWVPU[TLU[^OPJOKVUV[JVU[HPUÄ_LK JVU[YHJ[ZHYL! [LYTWLYPVK^OPJOHWWVPU[TLU[PZZ\IQLJ[[VWLYMVYTHUJLYL]PL^HUKYLLSLJ[PVUI`[OLZOHYLOVSKLYZH[HUU\HSNLULYHS TLL[PUNZ Name Date of Contract Duration Notice Period ;OLKH[LZVM[OLSL[[LYZVMHWWVPU[TLU[HYLZL[V\[ILSV^! :LKKPX/HZZHUP 9 February 2018 `LHYZ TVU[OZ 5PJVSHZ.LVYNL 4HYJO 9LZPNULKVU 1\UL 5( Name Date of contract .YHJL6S\VJO 19 October 2018 Open ended TVU[OZ +Y1VOU:PTIH 5V]LTILY 1LHU4PJOLS7VUZ 1 June 2019 `LHYZ TVU[OZ 1VZLWO2PTV[L 6 June 2016 :VTLVM[OLJVU[YHJ[ZOH]LHUPUKLÄUP[L[LYT^OPSLV[OLYZHYLMVY[OLPUKPJH[LKÄ_LK[LYTIV[OVM^OPJOTH`IL[LYTPUH[LK (SPJL6^\VY 4HYJO I`LP[OLYWHY[`I`NP]PUN[OLPUKPJH[LKUV[PJLWLYPVK /LSLU.PJOVOP 4HYJO ;OLYL^LYLUVZPNUPÄJHU[JOHUNLZ[V[OLYLT\ULYH[PVUPUYLZWLJ[VMWLUZPVUVYHSSV^HUJLZK\YPUN[OL`LHY 9P[H2H]HZOL 4HYJO ;OL*VTWHU`KVLZUV[OH]LHU`SVUN[LYTPUJLU[P]LZVYZOHYLVW[PVUZJOLTLZ 7PLYYL+LSLWSHUX\L 1\UL Salary Review 4I\]P5N\UaL (\N\Z[ =HZPSLPVZ2HYHSPZ 4HYJO ;OLL_LJ\[P]LKPYLJ[VYZHSHYPLZYL]PL^^HZ\UKLY[HRLUPUSPUL^P[O[OLV]LYHSSJVTWHU`ZHSHY`YL]PL^;OLZHSHY`YL]PL^[VVR PU[VJVUZPKLYH[PVU[OLV]LYHSSI\KNL[MVYPUJYLHZLHUKPUKP]PK\HSWLYMVYTHUJLMVY[OL`LHY ;OLPUJYLHZLZH^HYKLKJVTWHYLK[V[OLZHSHY`PUJYLHZLZH]LYHNLMVYZHSHYPLKZ[HќHYLHZZOV^UILSV^! (WHY[MYVT[OLPYZLY]PJLJVU[YHJ[ZUVKPYLJ[VYOHZOHKHU`TH[LYPHSPU[LYLZ[PUHU`JVU[YHJ[^P[O[OL.YV\W -VSSV^PUNH\[OVYPZH[PVUVM[OLZOHYLOVSKLYZ[OL59/9*JHYYPLKV\[HZ\Y]L`[VILUJOTHYRMLLZ^P[OJVTWHYHISL Name 2019 2018 JVTWHUPLZ;OLÄUKPUNZVM[OLZ\Y]L`^LYL[OH[[OLMLLZWHPKI`[OL*VTWHU`^LYLZPNUPÄJHU[S`ILOPUK[OLTHYRL[TLKPHU :LKKPX/HZZHUP 5VUL [OLMLL[HYNL[YHUNL;OL)VHYKWYVWVZLKH[[OL.LULYHS4LL[PUNHUKP[^HZHNYLLK[VPTWSLTLU[[OLPUJYLHZLV]LY[^V 5PJVSHZ.LVYNL 5VUL `LHYZ[OLÄYZ[VM^OPJO^HZHWWYV]LKI`[OL:OHYLOVSKLYZH[[OL(UU\HS.LULYHS4LL[PUNOLSKVU 1\UL HUK PTWSLTLU[LK[OLYLHM[LY .YHJL6S\VJO 5VUL 5VUL (]LYHNLZ[HќZHSHY`PUJYLHZL2LU`H (]LYHNLZ[HќZHSHY`PUJYLHZL 84 85 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 4 GOVERNANCE Remuneration Report ;OL+PYLJ[VYZHYLWHPKHUHUU\HSMLLWHPKIPHUU\HSS`HUKTLL[PUNH[[LUKHUJLMLLZ;OLMLLZWHPKPU ^LYL! Non-Executive Director Remuneration Name Annual Sitting Total Annual Sitting Total Fees Allowance1 2019 Fees Allowance 2018 +Y1VOU:PTIH (SPJL6^\VY 691,080 /LSLU.PJOVOP 691,080 1VZLWO2PTV[L 691,080 4I\]P5N\UaL 691,080 2 9P[H2H]HZOL 691,080 Total Fees 5,009,514 10,998,327 16,007,841 3,334,527 9,728,699 13,063,226 1 Must be read together with the attendance register for purposes of the sitting allowance 2 Appointed August 2018 ;OL+PYLJ[VYZ»[YH]LSPZM\SS`MHJPSP[H[LKI`[OL*VTWHU`HUK[OLYLMVYLUV[YH]LSHUKYLSH[LKL_WLUZLZHYLPUJ\YYLKI`[OL PUKP]PK\HSKPYLJ[VYZ/V^L]LYPU[OL\USPRLS`L]LU[[OH[[OPZOHWWLULK[OL*VTWHU`YLPTI\YZLK[OLJVZ[ ;OLYLPZUVMVYTHSYLX\PYLTLU[[OH[[OL+PYLJ[VYZOVSKZOHYLZPU[OL*VTWHU`HUK[OLYLPZUVZOHYLVW[PVUZJOLTL[OH[ HWWSPLZ[V[OLUVUL_LJ\[P]LKPYLJ[VYZ ;OLUVUL_LJ\[P]LKPYLJ[VYZHYLUV[TLTILYZVM[OL.YV\WWLUZPVUZJOLTLI`]PY[\LVMZP[[PUNVU[OL)VHYK 6UILOHSMVM[OL)VHYK Dr John P N Simba Chairman, Nomination, Remuneration & HR Committee 4H` 86 87 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 4 GOVERNANCE :OHYLOVSKLY7YVÄSL Top 10 Shareholders as at 31 December 2019 Rank Name of Shareholder Shares % 1 Fincem Holding Ltd 2 Kencem Holding Limited :[HUKHYK*OHY[LYLK5VTPULLZ9,:(*2, :[HUKHYK*OHY[LYLK2LU`H5VTPULLZ3[K(*2, (THYQLL[)HSVVIOHP7H[LS )HSVVIOHP*OOV[HIOHP7H[LS 6 :[HUKHYK*OHY[LYLK2LU`H5VTPULLZ3[K(*2, 0*,(3PVU3PML(ZZ\YHUJL*VTWHU`3[K¶7VVSLK 8 :[HUKHYK*OHY[LYLK5VTPULLZ(* 9 :[HUKHYK*OHY[LYLK5VTPULLZ5VU9LZK(* 10 50**\Z[VKPHS:LY]PJLZ(* Share Analysis by Domicile as at 31 December 2019 DOMICILE NUMBER OF SHARES % NUMBER OF HOLDERS -VYLPNU0UZ[P[\[PVUZ 29 -VYLPNU0UKP]PK\HSZ 3VJHS0UZ[P[\[PVUZ 682 3VJHS0UKP]PK\HSZ TOTAL 362,959,275 100.00% 3,421 Share Analysis by volume as at 31 December 2019 VOLUME NUMBER OF SHARES % NUMBER OF HOLDERS ¶ ¶ 1,201 ¶ 209 ¶ ¶ > 1,000,000 TOTAL 362,959,275 100.00% 3,421 88 89 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW 5 FINANCIAL REVIEW Corporate information Report of the Directors MVY[OL`LHYLUKLK+LJLTILY DIRECTORS Executive ;OLKPYLJ[VYZOH]L[OLWSLHZ\YLVMWYLZLU[PUN[OLPYHUU\HSYLWVY[[VNL[OLY^P[O[OLH\KP[LKÄUHUJPHSZ[H[LTLU[ZVM)HTI\YP :/HZZHUP (Moroccan) *LTLU[ 3PTP[LK [OL ¸*VTWHU` HUK P[Z Z\IZPKPHYPLZ [VNL[OLY [OL ¸.YV\W¹ MVY [OL `LHY LUKLK +LJLTILY PU 5.LVYNL -YLUJO 9LZPNULK 1\UL HJJVYKHUJL^P[O:LJ[PVU VM[OL2LU`HU*VTWHUPLZ(J[ ^OPJOKPZJSVZL[OLZ[H[LVMÄUHUJPHSHќHPYZ .6S\VJO (Kenyan) 1. PRINCIPAL ACTIVITIES 147VUZ -YLUJO (WWVPU[LK 1\UL ;OL.YV\WPZWYPTHYPS`LUNHNLKPU[OLTHU\MHJ[\YLHUKZHSLVMJLTLU[HUKJLTLU[YLSH[LKWYVK\J[Z;OL.YV\WHSZV Non-executive V^UZHUKTHPU[HPUZH^VYSKJSHZZUH[\YLHUKLU]PYVUTLU[HSWHYRJYLH[LKMYVTYLOHIPSP[H[LKX\HYYPLZ 1:PTIH (Kenyan) *OHPYTHU J M Kimote (Kenyan) 9LZ[H[LK (6^\VY (Kenyan) 2019 2018 Shs’ million :OZ»TPSSPVU /.PJOVOP (Kenyan) 2. RESULTS 92H]HZOL (Kenyan) .YV\WWYVÄ[ILMVYL[H_ 620 7+LSLWSHUX\L -YLUJO ;H_JOHYNL 45N\UaL (Kenyan) =2HYHSPZ (Hellenic) .YV\WWYVÄ[MVY[OL`LHY SECRETARY B Kanyagia Attributable to: 861 *LY[PÄLK7\ISPJ:LJYL[HY`2LU`H 6^ULYZVM[OLWHYLU[*VTWHU` 5VUJVU[YVSSPUNPU[LYLZ[Z (289) 395V 2P[\P9VHK P.O. Box 10921 - 00100 5HPYVIP2LU`H +\YPUN[OL`LHY[OL REGISTRARS *\Z[VK` 9LNPZ[YHYZ:LY]PJLZ3PTP[LK 3. DIVIDENDS 0247SHJLZ[-SVVY;V^LY) +\YPUN[OL`LHY[OL+PYLJ[VYZKPKUV[YLJVTTLUKWH`TLU[VMHUPU[LYPTKP]PKLUK0U :OZWLYVYKPUHY`ZOHYL -PM[O5NVUN(]LU\L HTV\U[PUN[V:OZ TPSSPVU^HZWHPKH[PU[LYPT^OPSLHKP]PKLUKVM:OZWLYVYKPUHY`ZOHYLHTV\U[PUN[V:OZ 76)V_ TPSSPVU^HZWHPKH[ÄUHS;OLKPYLJ[VYZKVUV[YLJVTTLUK[OLWH`TLU[VMHKP]PKLUKPUYLZWLJ[VM[OL`LHY 5HPYVIP2LU`H 4. DIRECTORS AUDITORS +LSVP[[L ;V\JOL ;OLKPYLJ[VYZ^OVZLY]LKK\YPUN[OL`LHYHUK\W[V[OLKH[LVMHWWYV]HSVM[OPZYLWVY[HYLKPZJSVZLKVUWHNL Deloitte Place >HP`HRP>H`4\[OHUNHYP 5. AUDITORS 76)V_ +LSVP[[L ;V\JOLOH]PUNL_WYLZZLK[OLPY^PSSPUNULZZJVU[PU\LPUVѝJLPUHJJVYKHUJLWYV]PZPVUZVMZLJ[PVU VM 5HPYVIP2LU`H [OL2LU`HU*VTWHUPLZ(J[ ;OLKPYLJ[VYZTVUP[VY[OLLќLJ[P]LULZZVIQLJ[P]P[`HUKPUKLWLUKLUJLVM[OLH\KP[VY PRINCIPAL BANKERS *P[PIHUR5( *P[PIHUR5( 2019 (55<(39,769; -05(5*0(3:;(;,4,5; 7 May 2020 BAMBURI CEMENT 5 FINANCIAL REVIEW Statement of Directors’ Responsibilities Independent Auditors’ Report MVY[OL`LHYLUKLK+LJLTILY To the members of Bamburi Cement Limited ;OL2LU`HU*VTWHUPLZ(J[ YLX\PYLZ[OLKPYLJ[VYZ[VWYLWHYLÄUHUJPHSZ[H[LTLU[ZMVYLHJOÄUHUJPHS`LHY[OH[NP]LH[Y\LHUK 9LWVY[VU[OLH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z MHPY]PL^VM[OLÄUHUJPHSWVZP[PVUVM[OL.YV\WHUKVM[OL*VTWHU`HZH[[OLLUKVM[OLÄUHUJPHS`LHYHUKVM[OLPYWYVÄ[VYSVZZMVY [OH[`LHY0[HSZVYLX\PYLZ[OLKPYLJ[VYZ[VLUZ\YL[OH[[OL*VTWHU`HUKP[ZZ\IZPKPHYPLZTHPU[HPUWYVWLYHJJV\U[PUNYLJVYKZ[OH[ Our opinion HYLZ\ѝJPLU[[VZOV^HUKL_WSHPU[OL[YHUZHJ[PVUZVM[OL*VTWHU`HUKP[ZZ\IZPKPHYPLZHUKKPZJSVZL^P[OYLHZVUHISLHJJ\YHJ` [OLÄUHUJPHSWVZP[PVUVM[OL.YV\WHUK[OL*VTWHU`;OLKPYLJ[VYZHYLHSZVYLZWVUZPISLMVYZHMLN\HYKPUN[OLHZZL[ZVM[OL.YV\W >LOH]LH\KP[LK[OLHJJVTWHU`PUNÄUHUJPHSZ[H[LTLU[ZVM)HTI\YP*LTLU[3PTP[LK[OL¸*VTWHU`¹HUKP[ZZ\IZPKPHYPLZ HUK[OL*VTWHU`HUKMVY[HRPUNYLHZVUHISLZ[LWZMVY[OLWYL]LU[PVUHUKKL[LJ[PVUVMMYH\KHUKLYYVYZ [VNL[OLY[OL¸.YV\W¹ZL[V\[VUWHNLZ [V JVTWYPZPUN[OLJVUZVSPKH[LKHUKJVTWHU`Z[H[LTLU[ZVMÄUHUJPHS WVZP[PVUH[+LJLTILY HUKJVUZVSPKH[LKHUKJVTWHU`Z[H[LTLU[ZVMWYVÄ[VYSVZZHUKV[OLYJVTWYLOLUZP]L ;OL KPYLJ[VYZ HJJLW[ YLZWVUZPIPSP[` MVY [OL WYLWHYH[PVU HUK WYLZLU[H[PVU VM [OLZL ÄUHUJPHS Z[H[LTLU[Z PU HJJVYKHUJL ^P[O PUJVTLJVUZVSPKH[LKHUKJVTWHU`Z[H[LTLU[ZVMJOHUNLZPULX\P[`HUKJVUZVSPKH[LKHUKJVTWHU`Z[H[LTLU[ZVMJHZO 0U[LYUH[PVUHS-PUHUJPHS9LWVY[PUN:[HUKHYKZHUKPU[OLTHUULYYLX\PYLKI`[OL2LU`HU*VTWHUPLZ(J[ ;OL`HSZVHJJLW[ ÅV^ZMVY[OL`LHY[OLULUKLKHUKUV[LZ[V[OLÄUHUJPHSZ[H[LTLU[ZPUJS\KPUNHZ\TTHY`VMZPNUPÄJHU[HJJV\U[PUNWVSPJPLZ YLZWVUZPIPSP[`MVY! 0UV\YVWPUPVU[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZNP]LH[Y\LHUKMHPY]PL^VM[OLÄUHUJPHSWVZP[PVUVM[OL P KLZPNUPUNPTWSLTLU[PUNHUKTHPU[HPUPUNZ\JOPU[LYUHSJVU[YVSHZ[OL`KL[LYTPULULJLZZHY`[VLUHISL[OLWYLZLU[H[PVUVM .YV\WHUKVM[OL*VTWHU`H[+LJLTILY HUKVM[OLPYÄUHUJPHSWLYMVYTHUJLHUKJHZOÅV^ZMVY[OL`LHY[OLULUKLK ÄUHUJPHSZ[H[LTLU[Z[OH[HYLMYLLMYVTTH[LYPHSTPZZ[H[LTLU[^OL[OLYK\L[VMYH\KVYLYYVY" PUHJJVYKHUJL^P[O0U[LYUH[PVUHS-PUHUJPHS9LWVY[PUN:[HUKHYKZHUK[OLYLX\PYLTLU[ZVM[OL2LU`HU*VTWHUPLZ(J[ PP ZLSLJ[PUNZ\P[HISLHJJV\U[PUNWVSPJPLZHUK[OLUHWWS`PUN[OLTJVUZPZ[LU[S`"HUK Basis for Opinion PPP THRPUNHJJV\U[PUNLZ[PTH[LZHUKQ\KNLTLU[Z[OH[HYLYLHZVUHISLPU[OLJPYJ\TZ[HUJLZ >LJVUK\J[LKV\YH\KP[PUHJJVYKHUJL^P[O0U[LYUH[PVUHS:[HUKHYKZVU(\KP[PUN0:(Z6\YYLZWVUZPIPSP[PLZ\UKLY[OVZL Z[HUKHYKZHYLM\Y[OLYKLZJYPILKPU[OL(\KP[VY»ZYLZWVUZPIPSP[PLZMVY[OLH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHS /H]PUNTHKLHUHZZLZZTLU[VM[OL.YV\W»ZHUK[OL*VTWHU`»ZHIPSP[`[VJVU[PU\LHZNVPUNJVUJLYUZL_JLW[MVY[OLL]LU[Z statements section of our report. HZZVJPH[LK^P[O*6=0+ HZKPZJSVZLKPUUV[LVM[OLÄUHUJPHSZ[H[LTLU[Z[OLKPYLJ[VYZHYLUV[H^HYLVMHU`TH[LYPHS \UJLY[HPU[PLZYLSH[LK[VL]LU[ZVYJVUKP[PVUZ[OH[TH`JHZ[KV\I[\WVU[OL.YV\WHUK[OL*VTWHU`»ZHIPSP[`[VJVU[PU\LHZ >LHYLPUKLWLUKLU[VM[OL.YV\WHUK[OL*VTWHU`PUHJJVYKHUJL^P[O[OL0U[LYUH[PVUHS,[OPJZ:[HUKHYKZ)VHYKMVY NVPUNJVUJLYUZ (JJV\U[HU[Z»*VKLVM,[OPJZMVY7YVMLZZPVUHS(JJV\U[HU[Z0,:)(*VKL[VNL[OLY^P[O[OLL[OPJHSYLX\PYLTLU[Z[OH[HYL YLSL]HU[[VV\YH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZPU2LU`HHUK^LOH]LM\SÄSSLKV\YL[OPJHS ;OLKPYLJ[VYZHJRUV^SLKNL[OH[[OLPUKLWLUKLU[H\KP[VM[OLÄUHUJPHSZ[H[LTLU[ZKVLZUV[YLSPL]L[OLTVM[OLPYYLZWVUZPIPSP[PLZ YLZWVUZPIPSP[PLZPUHJJVYKHUJL^P[O[OLZLYLX\PYLTLU[ZHUK[OL0,:)(*VKL (WWYV]LKI`[OL)VHYKVM+PYLJ[VYZVU 4H`HUKZPNULKVUP[ZILOHSMI`! >LILSPL]L[OH[[OLH\KP[L]PKLUJL^LOH]LVI[HPULKPZZ\ѝJPLU[HUKHWWYVWYPH[L[VWYV]PKLHIHZPZMVYV\YVWPUPVU Key Audit Matters 2L`H\KP[TH[[LYZHYL[OVZLTH[[LYZ[OH[PUV\YWYVMLZZPVUHSQ\KNLTLU[^LYLVMTVZ[ZPNUPÄJHUJLPUV\YH\KP[VM[OL ______JVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZVM[OLJ\YYLU[WLYPVK;OLZLTH[[LYZ^LYLHKKYLZZLKPU[OLJVU[L_[VMV\Y Dr John P.N Simba Seddiq Hassani H\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZHZH^OVSLHUKPUMVYTPUNV\YVWPUPVU[OLYLVUHUK^LKVUV[ Chairman Group Managing Director WYV]PKLHZLWHYH[LVWPUPVUVU[OLZLTH[[LYZ 94 95 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 5 FINANCIAL REVIEW Independent Auditors’ Report Independent Auditors’ Report To the members of Bamburi Cement Limited (continued) To the members of Bamburi Cement Limited (continued) 9LWVY[VU[OLH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z*VU[PU\LK 9LWVY[VU[OLH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z*VU[PU\LK Other Information Key Audit Matters (Continued) ;OL+PYLJ[VYZHYLYLZWVUZPISLMVY[OLV[OLYPUMVYTH[PVU;OLV[OLYPUMVYTH[PVUJVTWYPZLZ[OL9LWVY[VM[OL+PYLJ[VYZHUK Key audit matter How our audit addressed the key audit matter HZYLX\PYLKI`[OL2LU`HU*VTWHUPLZ(J[ [OL*OHPYTHU»ZZ[H[LTLU[[OL.YV\W4HUHNPUNKPYLJ[VY»ZZ[H[LTLU[ *VYWVYH[LNV]LYUHUJLZ[H[LTLU[[OL6WLYH[PVUHSYL]PL^YLWVY[HUK[OL:\Z[HPUHIPSP[` YLWVY[^OPJO^LYLVI[HPULKWYPVY[VKH[LVM[OPZYLWVY[;OLV[OLYPUMVYTH[PVUKVLZUV[PUJS\KL[OLJVUZVSPKH[LKHUK Valuation of Trade Receivables ;VYLZWVUK[V[OLRL`H\KP[TH[[LY^LWLYMVYTLK[OL JVTWHU`ÄUHUJPHSZ[H[LTLU[Z[OLYLT\ULYH[PVUYLWVY[HUKV\YH\KP[VYZ»YLWVY[[OLYLVU MVSSV^PUNWYVJLK\YLZ! +\L[V[OLSL]LSVMQ\KNLTLU[HUKLZ[PTH[PVUYLSH[PUN [V[OLPTWHPYTLU[HZZLZZTLU[VM[YHKLYLJLP]HISLZI` % ;LZ[LK[OLKLZPNUPTWSLTLU[H[PVUHUKVWLYH[PUN 6\YVWPUPVUVU[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZKVLZUV[JV]LY[OLV[OLYPUMVYTH[PVUHUK^LKVUV[ KPYLJ[VYZPUHJJVYKHUJL^P[O[OLYLX\PYLTLU[ZVM0-9: ! LќLJ[P]LULZZVMRL`JVU[YVSZHJYVZZ[OLWYVJLZZLZYLSL]HU[ L_WYLZZHU`MVYTVMHZZ\YHUJLJVUJS\ZPVU[OLYLVU ÄUHUJPHSPUZ[Y\TLU[Z[OL]HS\H[PVUVM[YHKLYLJLP]HISLZPZ [V[OL,*3NV]LYUHUJLKH[HHJJ\YHJ`HUKJVTWSL[LULZZ JVUZPKLYLK[VILHRL`H\KP[TH[[LY HUKPUKP]PK\HSWYV]PZPVUZHUKWYVK\J[PVUVMQV\YUHSLU[YPLZ 0UJVUULJ[PVU^P[OV\YH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZV\YYLZWVUZPIPSP[`PZ[VYLHK[OLV[OLY (ZKPZJSVZLKPUUV[LHVM[OLJVUZVSPKH[LKHUK HUKKPZJSVZ\YLZ PUMVYTH[PVUPKLU[PÄLKHIV]LHUKPUKVPUNZVJVUZPKLY^OL[OLY[OLV[OLYPUMVYTH[PVUPZTH[LYPHSS`PUJVUZPZ[LU[^P[O[OL JVTWHU`ÄUHUJPHSZ[H[LTLU[Z[OL.YV\W»ZHUK ÄUHUJPHSZ[H[LTLU[ZVYV\YRUV^SLKNLVI[HPULKPU[OLH\KP[VYV[OLY^PZLHWWLHYZ[VILTH[LYPHSS`TPZZ[H[LK0MIHZLK *VTWHU`»Z[YHKLYLJLP]HISLZHTV\U[LK[V:OZIPSSPVU % (ZZLZZLK[OLHWWYVWYPH[LULZZVMJ\Z[VTLYNYV\WPUNZI` VU[OL^VYR^LOH]LWLYMVYTLKVU[OLV[OLYPUMVYTH[PVU^LJVUJS\KL[OH[[OLYLPZHTH[LYPHSTPZZ[H[LTLU[VM[OPZV[OLY HUK:OZ TPSSPVUHZH[+LJLTILY YLZWLJ[P]LS` ]LYPM`PUN[OLOPZ[VYPJHSKH[HHUKHZZ\TW[PVUZHKVW[LKHZH PUMVYTH[PVU^LHYLYLX\PYLK[VYLWVY[[OH[MHJ[>LOH]LUV[OPUN[VYLWVY[PU[OPZYLNHYK IHZPZMVY[OLNYV\WPUNZ 2L`Q\KNLTLU[ZHUKLZ[PTH[PVUPUYLZWLJ[VM[OL[PTPUN 9LZWVUZPIPSP[PLZVM[OL+PYLJ[VYZMVY[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z HUKTLHZ\YLTLU[VML_WLJ[LKJYLKP[SVZZLZ,*3 % (ZZLZZLK^OL[OLYMVYLJHZ[LKTHJYVLJVUVTPJ]HYPHISLZ include: ^LYLHWWYVWYPH[L ;OL+PYLJ[VYZHYLYLZWVUZPISLMVY[OLWYLWHYH[PVUHUKMHPYWYLZLU[H[PVUVM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z [OH[NP]LH[Y\LHUKMHPY]PL^PUHJJVYKHUJL^P[O0U[LYUH[PVUHS-PUHUJPHS9LWVY[PUN:[HUKHYKZHUK[OLYLX\PYLTLU[ZVM % +L[LYTPUPUN[OLHWWYVWYPH[LJ\Z[VTLYNYV\WPUNZ % (ZZLZZLK^OL[OLY[OLWLYPVKV]LY^OPJO[OLVIZLY]LK [OL2LU`HU*VTWHUPLZ(J[ HUKMVYZ\JOPU[LYUHSJVU[YVSHZ[OL+PYLJ[VYZKL[LYTPULHYLULJLZZHY`[VLUHISL[OL IHZLKVUJYLKP[YPZRJOHYHJ[LYPZ[PJZHUKOPZ[VYPJHS OPZ[VYPJHSSVZZYH[LZ^HZHWWYVWYPH[LPUKL]LSVWPUN[OL WYLWHYH[PVUVMJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z[OH[HYLMYLLMYVTTH[LYPHSTPZZ[H[LTLU[^OL[OLYK\L[V JYLKP[SVZZL_WLYPLUJL" L_WLJ[LKSVZZYH[LZ fraud or error. % +L[LYTPUPUN[OLWLYPVKV]LY^OPJO[OLVIZLY]LK % ;LZ[LK[OLKH[H\ZLKPU[OL,*3JHSJ\SH[PVUMVYHJJ\YHJ` 0UWYLWHYPUN[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z[OLKPYLJ[VYZHYLYLZWVUZPISLMVYHZZLZZPUN[OL.YV\W»ZHUK OPZ[VYPJHSSVZZYH[LZHYLHWWYVWYPH[L"HUK HUKJVTWSL[LULZZ [OL*VTWHU`»ZHIPSP[`[VJVU[PU\LHZHNVPUNJVUJLYUKPZJSVZPUNHZHWWSPJHISLTH[[LYZYLSH[LK[VNVPUNJVUJLYUHUK\ZPUN [OLNVPUNJVUJLYUIHZPZVMHJJV\U[PUN\USLZZ[OL+PYLJ[VYZLP[OLYPU[LUK[VSPX\PKH[L[OL*VTWHU`HUKVYP[ZZ\IZPKPHYPLZVY % (KQ\Z[PUN[OLOPZ[VYPJHSSVZZYH[LZ^P[OMVY^HYK % =HSPKH[LK[OLJVTWSL[LULZZHUKHWWYVWYPH[LULZZVM[OL [VJLHZL[OLPYVWLYH[PVUZVYOH]LUVYLHSPZ[PJHS[LYUH[P]LI\[[VKVZV SVVRPUNTHJYVLJVUVTPJMHJ[VYZ YLSH[LKKPZJSVZ\YLZ[OYV\NOHZZLZZPUN[OLKPZJSVZ\YLVM [YHKLYLJLP]HISLZHUKL_WLJ[LKJYLKP[SVZZWYV]PZPVUPU 6[OLYTH[[LYZJVUZPKLYLKPUKL[LYTPUPUNL_WLJ[LKSVZZLZ UV[LZHHUK PPVM[OLJVUZVSPKH[LKHUKJVTWHU` (\KP[VYZ»YLZWVUZPIPSP[PLZMVY[OLH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z include: ÄUHUJPHSZ[H[LTLU[Z 6\YVIQLJ[P]LZHYL[VVI[HPUYLHZVUHISLHZZ\YHUJLHIV\[^OL[OLY[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZHZH ^OVSLHYLMYLLMYVTTH[LYPHSTPZZ[H[LTLU[^OL[OLYK\L[VMYH\KVYLYYVYHUK[VPZZ\LHUH\KP[VYZ»YLWVY[[OH[PUJS\KLZV\Y % *VTWSL[LULZZHUKHJJ\YHJ`VMKH[H\ZLK[V )HZLKVU[OLL]PKLUJLVI[HPULK^LHYLZH[PZÄLK[OH[[YHKL VWPUPVU9LHZVUHISLHZZ\YHUJLPZHOPNOSL]LSVMHZZ\YHUJLI\[PZUV[HN\HYHU[LL[OH[HUH\KP[JVUK\J[LKPUHJJVYKHUJL JHSJ\SH[L[OL,*3"HUK YLJLP]HISLZ,*3WYV]PZPVUZHYLYLHZVUHISLHUKPUHJJVYKHUJL ^P[O0:(Z^PSSHS^H`ZKL[LJ[HTH[LYPHSTPZZ[H[LTLU[^OLUP[L_PZ[Z4PZZ[H[LTLU[ZJHUHYPZLMYVTMYH\KVYLYYVYHUKHYL ^P[O[OLYLX\PYLTLU[ZVM0-9: 0UHKKP[PVU[OLKPZJSVZ\YLZ JVUZPKLYLKTH[LYPHSPMPUKP]PK\HSS`VYPU[OLHNNYLNH[L[OL`JV\SKYLHZVUHIS`ILL_WLJ[LK[VPUÅ\LUJL[OLLJVUVTPJ % (JJ\YHJ`HUKHKLX\HJ`VM[OLÄUHUJPHSZ[H[LTLU[ PU[OLÄUHUJPHSZ[H[LTLU[ZPUYLZWLJ[VM[YHKLYLJLP]HISLZ,*3 KLJPZPVUZVM\ZLYZ[HRLUVU[OLIHZPZVM[OLZLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z KPZJSVZ\YLZ WYV]PZPVUZ^LYLMV\UK[VILHWWYVWYPH[L (ZWHY[VMHUH\KP[PUHJJVYKHUJL^P[O0:(Z^LL_LYJPZLWYVMLZZPVUHSQ\KNLTLU[HUKTHPU[HPUWYVMLZZPVUHSZJLW[PJPZT 9LMLY[VUV[LVM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHS [OYV\NOV\[[OLH\KP[>LHSZV! Z[H[LTLU[ZMVYJYP[PJHSHJJV\U[PUNQ\KNLTLU[ZHUKRL` ZV\YJLZVMLZ[PTH[PVU\UJLY[HPU[`(SZVYLMLY[VUV[L PP % 0KLU[PM`HUKHZZLZZ[OLYPZRZVMTH[LYPHSTPZZ[H[LTLU[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[Z^OL[OLY MVYKL[HPSZVU[OLLZ[PTH[LKJYLKP[SVZZKPZJSVZ\YL K\L[VMYH\KVYLYYVYKLZPNUHUKWLYMVYTH\KP[WYVJLK\YLZYLZWVUZP]L[V[OVZLYPZRZHUKVI[HPUH\KP[L]PKLUJL[OH[PZ Z\ѝJPLU[HUKHWWYVWYPH[L[VWYV]PKLHIHZPZMVYV\YVWPUPVU;OLYPZRVMUV[KL[LJ[PUNHTH[LYPHSTPZZ[H[LTLU[YLZ\S[PUN MYVTMYH\KPZOPNOLY[OHUMVYVULYLZ\S[PUNMYVTLYYVYHZMYH\KTH`PU]VS]LJVSS\ZPVUMVYNLY`PU[LU[PVUHSVTPZZPVUZ TPZYLWYLZLU[H[PVUZVY[OLV]LYYPKLVMPU[LYUHSJVU[YVS % 6I[HPUHU\UKLYZ[HUKPUNVMPU[LYUHSJVU[YVSYLSL]HU[[V[OLH\KP[PUVYKLY[VKLZPNUH\KP[WYVJLK\YLZ[OH[HYLHWWYVWYPH[L PU[OLJPYJ\TZ[HUJLZI\[UV[MVY[OLW\YWVZLVML_WYLZZPUNHUVWPUPVUVU[OLLќLJ[P]LULZZVM[OL.YV\W»ZHUK[OL *VTWHU`»ZPU[LYUHSJVU[YVS % ,]HS\H[L[OLHWWYVWYPH[LULZZVMHJJV\U[PUNWVSPJPLZ\ZLKHUK[OLYLHZVUHISLULZZVMHJJV\U[PUNLZ[PTH[LZHUKYLSH[LK KPZJSVZ\YLZTHKLI`[OL+PYLJ[VYZ 96 97 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Independent Auditors’ Report *VUZVSPKH[LK:[H[LTLU[VM7YVÄ[VY3VZZHUK6[OLY*VTWYLOLUZP]L0UJVTL To the members of Bamburi Cement Limited (continued) MVY[OL`LHYLUKLK+LJLTILY 9LWVY[VU[OLH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZJVU[PU\LK 2019 2018 9LZ[H[LK (\KP[VYZ»YLZWVUZPIPSP[PLZMVY[OLH\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZJVU[PU\LK 5V[LZ Shs’million :OZ»TPSSPVU Revenue % *VUJS\KLVU[OLHWWYVWYPH[LULZZVM[OL+PYLJ[VYZ»\ZLVM[OLNVPUNJVUJLYUIHZPZVMHJJV\U[PUNHUKIHZLKVU[OL *VZ[VMNVVKZZVSK H\KP[L]PKLUJLVI[HPULK^OL[OLYHTH[LYPHS\UJLY[HPU[`L_PZ[ZYLSH[LK[VL]LU[ZVYJVUKP[PVUZ[OH[TH`JHZ[ZPNUPÄJHU[ *VZ[VM[YHUZWVY[ZLY]PJL KV\I[VU[OL.YV\W»ZHUK[OL*VTWHU`»ZHIPSP[`[VJVU[PU\LHZNVPUNJVUJLYUZ0M^LJVUJS\KL[OH[HTH[LYPHS .YVZZWYVÄ[ 5,304 6,735 \UJLY[HPU[`L_PZ[Z^LHYLYLX\PYLK[VKYH^H[[LU[PVUPUV\YH\KP[VYZ»YLWVY[[V[OLYLSH[LKKPZJSVZ\YLZPU[OLÄUHUJPHS Z[H[LTLU[ZVYPMZ\JOKPZJSVZ\YLZHYLPUHKLX\H[L[VTVKPM`V\YVWPUPVU6\YJVUJS\ZPVUZHYLIHZLKVU[OLH\KP[ 4HYRL[PUNHUKZHSLZL_WLUZLZ 9(i) (862) (1,002) L]PKLUJLVI[HPULK\W[V[OLKH[LVMV\YH\KP[VYZ»YLWVY[/V^L]LYM\[\YLL]LU[ZVYJVUKP[PVUZTH`JH\ZL[OL.YV\WHUK (KTPUPZ[YH[PVUL_WLUZLZ 9(ii) [OL*VTWHU`[VJLHZL[VJVU[PU\LHZNVPUNJVUJLYUZ 0TWHPYTLU[SVZZLZVUÄUHUJPHSHZZL[Z 22(b) 0TWHPYTLU[VMV[OLYHZZL[Z 9(iii) % ,]HS\H[L[OLV]LYHSSWYLZLU[H[PVUZ[Y\J[\YLHUKJVU[LU[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZPUJS\KPUN 6[OLYPUJVTL P [OLKPZJSVZ\YLZHUK^OL[OLY[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZYLWYLZLU[[OL\UKLYS`PUN[YHUZHJ[PVUZ 6[OLYNHPUZSVZZLZ 8 HUKL]LU[ZPUHTHUULY[OH[HJOPL]LZMHPYWYLZLU[H[PVU 6[OLYVWLYH[PUNL_WLUZLZ 10(a) (1,182) % 6I[HPUZ\ѝJPLU[HWWYVWYPH[LH\KP[L]PKLUJLYLNHYKPUN[OLÄUHUJPHSPUMVYTH[PVUVM[OLLU[P[PLZVYI\ZPULZZHJ[P]P[PLZ 9LZ[Y\J[\YPUNJVZ[Z 10(b) - ^P[OPU[OL.YV\W[VL_WYLZZHUVWPUPVUVU[OLJVUZVSPKH[LKÄUHUJPHSZ[H[LTLU[Z>LHYLYLZWVUZPISLMVY[OLKPYLJ[PVU 6WLYH[PUNWYVÄ[ 1,117 775 Z\WLY]PZPVUHUKWLYMVYTHUJLVM[OL.YV\WH\KP[>LYLTHPUZVSLS`YLZWVUZPISLMVYV\YH\KP[VWPUPVU Finance income PP 60 >LJVTT\UPJH[L^P[O[OL)VHYK(\KP[HUK9PZR*VTTP[[LLYLNHYKPUNHTVUNV[OLYTH[[LYZ[OLWSHUULKZJVWLHUK[PTPUN -PUHUJLJVZ[Z PPP VM[OLH\KP[HUKZPNUPÄJHU[H\KP[ÄUKPUNZPUJS\KPUNHU`ZPNUPÄJHU[KLÄJPLUJPLZPUPU[LYUHSJVU[YVS[OH[^LPKLU[PM`K\YPUNV\Y -PUHUJLJVZ[¶UL[ audit. 7YVÄ[ILMVYLPUJVTL[H_ 11(a) 728 620 ;H_JOHYNL 12(a) >LHSZVWYV]PKL[OL)VHYK(\KP[HUK9PZR*VTTP[[LL^P[OHZ[H[LTLU[[OH[^LOH]LJVTWSPLK^P[OYLSL]HU[L[OPJHS YLX\PYLTLU[ZYLNHYKPUNPUKLWLUKLUJLHUK[VJVTT\UPJH[L^P[O[OLTHSSYLSH[PVUZOPWZHUKV[OLYTH[[LYZ[OH[TH` 7YVÄ[MVY[OL`LHY 359 572 YLHZVUHIS`IL[OV\NO[[VILHYVUV\YPUKLWLUKLUJLHUK^OLYLHWWSPJHISLYLSH[LKZHMLN\HYKZ-YVT[OLTH[[LYZ 6[OLYJVTWYLOLUZP]LSVZZPUJVTLUV[[VILYLJSHZZPÄLK[VWYVÄ[VY JVTT\UPJH[LK^P[O[OL)VHYK(\KP[HUK9PZR*VTTP[[LL^LKL[LYTPUL[OVZLTH[[LYZ[OH[^LYLVMTVZ[ZPNUPÄJHUJLPU[OL loss in subsequent periods: H\KP[VM[OLJVUZVSPKH[LKHUKJVTWHU`ÄUHUJPHSZ[H[LTLU[ZVM[OLJ\YYLU[WLYPVKHUKHYL[OLYLMVYLRL`H\KP[TH[[LYZ>L (J[\HYPHSSVZZLZNHPUZ 28 (20) 21 KLZJYPIL[OLZLTH[[LYZPUV\YH\KP[VY»ZYLWVY[\USLZZSH^VYYLN\SH[PVUWYLJS\KLZW\ISPJKPZJSVZ\YLHIV\[[OLTH[[LYVY^OLU 0UJVTL[H_LќLJ[ 12(a) 6 (6) PUL_[YLTLS`YHYLJPYJ\TZ[HUJLZ^LKL[LYTPUL[OH[HTH[[LYZOV\SKUV[ILJVTT\UPJH[LKPUV\YYLWVY[ILJH\ZL[OLHK]LYZL JVUZLX\LUJLZVMKVPUNZV^V\SKYLHZVUHIS`ILL_WLJ[LK[VV\[^LPNO[OLW\ISPJPU[LYLZ[ILULÄ[ZVMZ\JOJVTT\UPJH[PVU .HPUZVUWYVWLY[`YL]HS\H[PVU H - 0UJVTL[H_LќLJ[ 12(a) - Report on other matters prescribed by the Kenyan Companies Act, 2015 - -HPY]HS\LSVZZVUPU]LZ[TLU[ZPULX\P[`PUZ[Y\TLU[ZKLZPNUH[LKHZH[ Report of the Directors FVTOCI 19(b) .HPUVUZHSLVMX\V[LKLX\P[PLZ 19(b) - 0UV\YVWPUPVU[OLPUMVYTH[PVUNP]LUPU[OLYLWVY[VMKPYLJ[VYZ»YLWVY[VUWHNL PZJVUZPZ[LU[^P[O[OLÄUHUJPHSZ[H[LTLU[Z 0UJVTL[H_LќLJ[ - - Directors’ remuneration report (121) 5L[V[OLYJVTWYLOLUZP]LSVZZPUJVTLUV[[VILYLJSHZZPÄLK[VWYVÄ[VY 0UV\YVWPUPVU[OLH\KP[HISLWHY[VM[OLKPYLJ[VYZ»YLT\ULYH[PVUYLWVY[VUWHNLZ [V OHZILLUWYVWLYS`WYLWHYLKPU SVZZPUZ\IZLX\LU[WLYPVKZ (31) 1,164 HJJVYKHUJL^P[O[OL2LU`HU*VTWHUPLZ(J[ 6[OLYJVTWYLOLUZP]LPUJVTLSVZZ[VILYLJSHZZPÄLK[VWYVÄ[VYSVZZ in subsequent periods: ,_JOHUNLPUJVTLSVZZVU[YHUZSH[PVUVMMVYLPNUVWLYH[PVUZ 22 5L[V[OLYJVTWYLOLUZP]LPUJVTLSVZZ[VILYLJSHZZPÄLK[VWYVÄ[VYSVZZ PUZ\IZLX\LU[WLYPVKZ 22 (388) 6;/,9*6479,/,5:0=,36::05*64,-69;/,@,(95,;6-;(? (9) 776 *LY[PÄLK7\ISPJ(JJV\U[HU[Z2LU`H ;6;(3*6479,/,5:0=,05*64,-69;/,@,(9 Nairobi, Kenya 7 May 2020 7YVÄ[MVY[OL`LHYH[[YPI\[LK[V! 6^ULYZVM[OLWHYLU[*VTWHU` 861 *7(-YLK(SVV7YHJ[PZPUNJLY[PÄJH[L5V . 5VUJVU[YVSSPUNPU[LYLZ[ 18(b) (289) :PNUPUNWHY[ULYYLZWVUZPISLMVY[OLPUKLWLUKLU[H\KP[ ;V[HSJVTWYLOLUZP]LPUJVTLH[[YPI\[LK[V! 6^ULYZVM[OLWHYLU[*VTWHU` 5VUJVU[YVSSPUNPU[LYLZ[ 18(b) ,HYUPUNZWLYZOHYL¶IHZPJHUKKPS\[LK :LLUV[L MVYKL[HPSZYLNHYKPUN[OLYLZ[H[LTLU[ 98 99 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 5 FINANCIAL REVIEW *VTWHU`:[H[LTLU[VM7YVÄ[VY3VZZHUK6[OLY*VTWYLOLUZP]L0UJVTL Consolidated Statement of Financial Position MVY[OL`LHYLUKLK+LJLTILY HZH[+LJLTILY 2019 2018 +LJLTILY 1 January Shs’million 2019 2018 2018 5V[LZ :OZ»TPSSPVU 9LZ[H[LK Revenue 21,211 9LZ[H[LK 5V[LZ Shs’million *VZ[VMNVVKZZVSK :OZ»TPSSPVU :OZ»TPSSPVU ASSETS (1,880) (1,910) *VZ[VM[YHUZWVY[ZLY]PJL NON-CURRENT ASSETS 7YVWLY[`WSHU[HUKLX\PWTLU[ H .YVZZWYVÄ[ 3,723 4,656 7YLWHPKVWLYH[PUNSLHZLYLU[HSZ 16(a) - 9PNO[VM\ZLHZZL[Z 16(b) -- 4HYRL[PUNHUKZHSLZL_WLUZLZ 9(i) 0U[HUNPISLHZZL[Z (KTPUPZ[YH[PVUL_WLUZLZ 9(ii) (1,019) ,X\P[`PU]LZ[TLU[Z 19(a) 180 0TWHPYTLU[SVZZLZVUÄUHUJPHSHZZL[Z 22(b) 6[OLYSVUN[LYTPU]LZ[TLU[Z 18(c) - - 10 )PVSVNPJHSHZZL[Z H 0TWHPYTLU[VMV[OLYHZZL[Z 9(iii) - 3PTLZ[VULYLZLY]LZ I - 6[OLYPUJVTL P .VVK^PSS 20 6[OLYNHPUZSVZZLZ 8 6[OLYVWLYH[PUNL_WLUZLZ 10(a) CURRENT ASSETS 9LZ[Y\J[\YPUNJVZ[Z 10(b) - (119) 0U]LU[VYPLZ 21 6,862 0TWHPYTLU[VMPU]LZ[TLU[PUZ\IZPKPHYPLZ 18(a) (191) - )PVSVNPJHSHZZL[Z I - ;YHKLHUKV[OLYYLJLP]HISLZ 22(a) Corporate tax recoverable 12(c) 280 6WLYH[PUNWYVÄ[ 1,283 1,802 *HZOHUKJHZOLX\P]HSLU[Z H Finance income PP 12,092 -PUHUJLJVZ[Z PPP (ZZL[ZJSHZZPÄLKHZOLSKMVYZHSL - - Finance income - net. 9 TOTAL ASSETS 49,085 50,146 47,052 7YVÄ[ILMVYL[H_ 11(a) 1,292 1,852 EQUITY AND LIABILITIES EQUITY ;H_JOHYNL 12(a) :OHYLJHWP[HS (ZZL[YL]HS\H[PVUYLZLY]L H 11,906 7YVÄ[MVY[OL`LHY 1,008 1,645 -HPY]HS\LYLZLY]L - - 102 ;YHUZSH[PVUYLZLY]L J 9L[HPULKLHYUPUNZ 6[OLYJVTWYLOLUZP]LSVZZPUJVTLUV[[VILYLJSHZZPÄLK[V ,X\P[`H[[YPI\[HISL[VV^ULYZVM[OL*VTWHU` 29,266 WYVÄ[VYSVZZPUZ\IZLX\LU[WLYPVKZ! 5VUJVU[YVSSPUNPU[LYLZ[Z ;V[HSLX\P[` -HPY]HS\LSVZZVUPU]LZ[TLU[ZPULX\P[`PUZ[Y\TLU[Z NON-CURRENT LIABILITIES KLZPNUH[LKHZH[-=;6*0 19(b) Deferred tax liability 26 .HPUVUZHSLVMX\V[LKLX\P[PLZ 19(b) - 7YV]PZPVUZ 289 921 0UJVTL[H_LќLJ[ 12(a) - - ,TWSV`LLZ»KLÄULKILULÄ[SPHIPSP[PLZ 28 3VUN[LYTIVYYV^PUNZ K 2,010 - (121) 3LHZLSPHIPSP[PLZ - - (J[\HYPHSSVZZLZNHPUZ 28 CURRENT LIABILITIES ______Dr John P.N Simba Seddiq Hassani Chairman Group Managing Director 101 100 :LLUV[L MVYKL[HPSZYLNHYKPUN[OLYLZ[H[LTLU[ 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 5 FINANCIAL REVIEW Company Statement of Financial Position Consolidated Statement of Changes in Equity HZH[+LJLTILY MVY[OL`LHYLUKLK+LJLTILY 2019 2018 Asset Non- 5V[LZ Shs’million :OZ»TPSSPVU Share revaluation Translation Retained Owners of the controlling Total ASSETS capital reserve reserve earnings Company interests equity NON-CURRENT ASSETS Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million 7YVWLY[`WSHU[HUKLX\PWTLU[ I @LHYLUKLK+LJLTILY 5V[L 5V[L H 5V[L J 0U[HUNPISLHZZL[Z H 0U]LZ[TLU[ZPUZ\IZPKPHYPLZ 18(a) 1,809 2,000 ([1HU\HY` (ZWYL]PV\ZS`YLWVY[LK 11,906 29,711 3,752 ,X\P[`PU]LZ[TLU[Z 19(a) 180 )PVSVNPJHSHZZL[Z H 7YPVY`LHYHKQ\Z[TLU[ZUL[VM[H_UV[L 3VHU[VZ\IZPKPHY` J - -- - (135) (58) 21,861 ______ CURRENT ASSETS ([1HU\HY` (ZYLZ[H[LK 11,906 29,576 3,694 0U]LU[VYPLZ 21 )PVSVNPJHSHZZL[Z I 7YVÄ[SVZZMVY[OL`LHY -- - 633 (274) 3VHU[VZ\IZPKPHY` J 29 ;YHKLHUKV[OLYYLJLP]HISL 22(a) 6[OLYJVTWYLOLUZP]LPUJVTLSVZZMVY Corporate tax recoverable 12(c) - [OL`LHY -- (18) 9 (9) *HZOHUKJHZOLX\P]HSLU[Z H 2,289 2,161 ;V[HSJVTWYLOLUZP]LPUJVTLMVY[OL`LHY - - 600 615 (265) TOTAL ASSETS 29,374 30,214 ;YHUZMLYVML_JLZZKLWYLJPH[PVUUL[VM[H_ - - --- +P]PKLUKZ!5V[LI EQUITY AND LIABILITIES -PUHSKP]PKLUKZMVY KLJSHYLKHUK EQUITY approved - - - - :OHYLJHWP[HS (ZZL[YL]HS\H[PVUYLZLY]L H 10,662 ([+LJLTILY 9L[HPULKLHYUPUNZ 1,815 11,664 (2,027) 17,251 28,703 3,429 32,132 ;V[HSLX\P[` 22,021 ;OLYLZLY]LHJJV\U[ZPUJS\KLKPU[OLZ[H[LTLU[VMJOHUNLZPULX\P[`HYLL_WSHPULKILSV^! NON-CURRENT LIABILITIES % ;OL HZZL[ YL]HS\H[PVU YLZLY]L YLWYLZLU[Z [OL UL[ J\T\SH[P]L Z\YWS\Z HYPZPUN MYVT YL]HS\H[PVUZ VM WYVWLY[` WSHU[ HUK Deferred tax liability 26 2,620 LX\PWTLU[5V[L H 7YV]PZPVUZ % 9L[HPULKLHYUPUNZYLWYLZLU[HJJ\T\SH[LKWYVÄ[ZYL[HPULKI`[OL.YV\WHM[LYWH`TLU[VMKP]PKLUKZ[V[OLZOHYLOVSKLYZ ,TWSV`LLZ»KLÄULKILULÄ[SPHIPSP[PLZ 28 % ;OL[YHUZSH[PVUYLZLY]LYLWYLZLU[Z[OLJ\T\SH[P]LWVZP[PVUVM[YHUZSH[PVUNHPUZHUKSVZZLZHYPZPUNMYVTJVU]LYZPVUVMUL[ HZZL[ZVM[OLMVYLPNUZ\IZPKPHY`*VTWHU`[V[OLWYLZLU[H[PVUJ\YYLUJ`5V[L J CURRENT LIABILITIES ;OLÄUHUJPHSZ[H[LTLU[ZVUWHNLZ [V ^LYLHWWYV]LKHUKH\[OVYPZLKMVYPZZ\LI`[OL)VHYKVM+PYLJ[VYZVU 4H`HUK^LYLZPNULKVUP[ZILOHSMI`! ______Dr John P.N Simba Seddiq Hassani Chairman Group Managing Director 102 103 2019 (55<(39,769; -05(5*0(3:;(;,4,5; BAMBURI CEMENT 5 FINANCIAL REVIEW Consolidated Statement of Changes in Equity Company Statement of Changes in Equity MVY[OL`LHYLUKLK+LJLTILY MVY[OL`LHYLUKLK+LJLTILY (ZZL[ 5VU :OHYL revaluation Fair value ;YHUZSH[PVU Retained 6^ULYZVM[OL controlling Total Share Asset Retained Total capital YLZLY]L YLZLY]L YLZLY]L LHYUPUNZ Company PU[LYLZ[Z LX\P[` revaluation :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU capital reserve earnings equity @LHYLUKLK+LJLTILY @LHYLUKLK+LJLTILY Shs’million Shs’million Shs’million Shs’million 5V[L 5V[L H 5V[L I 5V[L J 2018 5V[L 5V[L H ([1HU\HY` (Z 102 WYL]PV\ZS`YLWVY[LK At 1 January 2019 10,662 7YPVY`LHYHKQ\Z[TLU[ZUV[L - - - (106) (106) 7YVÄ[MVY[OL`LHY - - 1,008 1,008 ______6[OLYJVTWYLOLUZP]LSVZZMVY[OL`LHY -- ([1HU\HY` (Z 102 29,266 ;V[HSJVTWYLOLUZP]LPUJVTLMVY[OL`LHY - - 969 969 YLZ[H[LK ;YHUZMLYVML_JLZZKLWYLJPH[PVUUL[VM[H_ - - 0-9: [YHUZP[PVUHKQ\Z[TLU[ -- - - (220) -PUHSKP]PKLUKZMVY KLJSHYLKHUKHWWYV]LK5V[LI - - 7YVÄ[MVY[OL`LHYYLZ[H[LK - - - - 861 861 (289) ZLLUV[L ([+LJLTILY 22,021 6[OLYJVTWYLOLUZP]LPUJVTL SVZZMVY[OL`LHY - 889 (121) ;V[HSJVTWYLOLUZP]LPUJVTL SVZZMVY[OL`LHY - 889 (121) ;OLYLZLY]LHJJV\U[ZPUJS\KLKPU[OLZ[H[LTLU[VMJOHUNLZPULX\P[`HYLL_WSHPULKILSV^! 3VZZVUMHPY]HS\LVMX\V[LK ZLJ\YP[PLZ % ;OL HZZL[ YL]HS\H[PVU YLZLY]L YLWYLZLU[Z [OL UL[ J\T\SH[P]L Z\YWS\Z HYPZPUN MYVT YL]HS\H[PVUZ VM WYVWLY[` WSHU[ HUK - - 19 - (19) - - - ;YHUZMLYVML_JLZZ LX\PWTLU[5V[L H depreciation (net of tax) % ;OL YL[HPULK LHYUPUNZ YLWYLZLU[ HJJ\T\SH[LK WYVÄ[ YL[HPULK I` [OL *VTWHU` HM[LY WH`TLU[ VM KP]PKLUKZ [V [OL - -- --- +P]PKLUKZ!5V[LI ZOHYLOVSKLYZ -PUHSKP]PKLUKZMVY declared and approved -- - - - 0U[LYPTKP]PKLUKZMVY declared and approved - - - - - - - - - -- ([+LJLTILY 11,906 - ;OLYLZLY]LHJJV\U[ZPUJS\KLKPU[OLZ[H[LTLU[VMJOHUNLZPULX\P[`HYLL_WSHPULKILSV^! Ç ;OL HZZL[ YL]HS\H[PVU YLZLY]L YLWYLZLU[Z [OL UL[ J\T\SH[P]L Z\YWS\Z HYPZPUN MYVT YL]HS\H[PVUZ VM WYVWLY[` WSHU[ HUK LX\PWTLU[5V[L H Ç 9L[HPULKLHYUPUNZYLWYLZLU[HJJ\T\SH[LKWYVÄ[ZYL[HPULKI`[OL.YV\WHM[LYWH`TLU[VMKP]PKLUKZ[V[OLZOHYLOVSKLYZ Ç ;OL[YHUZSH[PVUYLZLY]LYLWYLZLU[Z[OLJ\T\SH[P]LWVZP[PVUVM[YHUZSH[PVUNHPUZHUKSVZZLZHYPZPUNMYVTJVU]LYZPVUVMUL[ HZZL[ZVM[OLMVYLPNUZ\IZPKPHY`*VTWHU`[V[OLWYLZLU[H[PVUJ\YYLUJ`5V[L J 104 105 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Company Statement of Changes in Equity Consolidated Statement of Cash Flows MVY[OL`LHYLUKLK+LJLTILY MVY[OL`LHYLUKLK+LJLTILY :OHYL (ZZL[ Fair value Retained Total 2019 2018 revaluation 5V[LZ Shs’million :OZ»TPSSPVU capital YLZLY]L YLZLY]L LHYUPUNZ LX\P[` CASH FLOWS FROM OPERATING ACTIVITIES @LHYLUKLK+LJLTILY :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU 5V[L 5V[L H 5V[L I *HZONLULYH[LKMYVTVWLYH[PVUZ 0U[LYLZ[YLJLP]LK PP 60 0U[LYLZ[WHPK At 1 January 2018 10,899 102 9,019 Tax paid 12(c) .HPUVUPU[LYJVTWHU`HZZL[[YHUZMLY --- 7YVÄ[MVY[OL`LHY --- 5L[JHZONLULYH[LKMYVTVWLYH[PUNHJ[P]P[PLZ 6[OLYJVTWYLOLUZP]LSVZZPUJVTLMVY[OL`LHY - - (121) 12 (109) CASH FLOWS FROM INVESTING ACTIVITIES 3VZZVUMHPY]HS\H[PVUVMX\V[LKLX\P[PLZ - - 19 (19) - ;V[HSJVTWYLOLUZP]LPUJVTLMVY[OL`LHY - - (102) 7\YJOHZLVMWYVWLY[`WSHU[HUKLX\PWTLU[ H 7\YJOHZLVMPU[HUNPISLHZZL[Z ;YHUZMLYVML_JLZZKLWYLJPH[PVUUL[VM[H_ - - - (JX\PZP[PVUVMSPTLZ[VULYLZLY]LZ - +P]PKLUKZ!5V[LI 7YVJLLKZMYVTZHSLVMX\V[LKLX\P[PLZ -16 -PUHSKP]PKLUKZMVY KLJSHYLKHUKHWWYV]LK --- 7YVJLLKZMYVTKPZWVZHSVMWYVWLY[`WSHU[HUKLX\PWTLU[ 62 0U[LYPTKP]PKLUKZMVY KLJSHYLKHUKHWWYV]LK - - - 5L[JHZO\ZLKPUPU]LZ[PUNHJ[P]P[PLZ (1,019) CASH FLOWS FROM FINANCING ACTIVITIES ([+LJLTILY 10,662 - +P]PKLUKZWHPK[VZOHYLOVSKLYZ I ;OLYLZLY]LHJJV\U[ZPUJS\KLKPU[OLZ[H[LTLU[VMJOHUNLZPULX\P[`HYLL_WSHPULKILSV^! 7YVJLLKZMYVTIVYYV^PUNZ K - 9LWH`TLU[VMSLHZLSPHIPSP[PLZ - % ;OL HZZL[ YL]HS\H[PVU YLZLY]L YLWYLZLU[Z [OL UL[ J\T\SH[P]L Z\YWS\Z HYPZPUN MYVT YL]HS\H[PVUZ VM WYVWLY[` WSHU[ HUK LX\PWTLU[5V[L H 5L[JHZONLULYH[LK\ZLKPUMYVTÄUHUJPUNHJ[P]P[PLZ % ;OL YL[HPULK LHYUPUNZ YLWYLZLU[ HJJ\T\SH[LK WYVÄ[ YL[HPULK I` [OL *VTWHU` HM[LY WH`TLU[ VM KP]PKLUKZ [V [OL ZOHYLOVSKLYZ 5,;05*9,(:,+,*9,(:,05*(:/(5+*(:/,8<0=(3,5;: MOVEMENT IN CASH AND CASH EQUIVALENTS *HZOHUKJHZOLX\P]HSLU[ZH[[OLILNPUUPUNVM[OL`LHY 5L[PUJYLHZLKLJYLHZLPUJHZOHUKJHZOLX\P]HSLU[ZK\YPUN[OL`LHY ,ќLJ[ZVML_JOHUNLYH[LJOHUNLZVUJHZOOLSKPUMVYLPNUJ\YYLUJPLZ 12 (19) *HZOHUKJHZOLX\P]HSLU[ZHUKH[LUKVM[OL`LHY I 106 107 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Company Statement of Cash Flows Notes to the Financial Statements MVY[OL`LHYLUKLK+LJLTILY MVY[OL`LHYLUKLK+LJLTILY 2019 2018 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 5V[L Shs’million :OZ»TPSSPVU *(:/-36>:-96467,9(;05.(*;0=0;0,: ;OLHJJV\U[PUNWVSPJPLZHKVW[LKPU[OLWYLWHYH[PVUVM[OLZLÄUHUJPHSZ[H[LTLU[ZHYLZL[V\[ILSV^;OLZLWVSPJPLZOH]L ILLUJVUZPZ[LU[S`HWWSPLK[VHSS`LHYZWYLZLU[LK\USLZZV[OLY^PZLZ[H[LK *HZONLULYH[LKMYVTVWLYH[PVUZ 2,999 0U[LYLZ[YLJLP]LK PP a) Basis of preparation Tax paid 12(c) ;OLJVUZVSPKH[LKHUK[OL*VTWHU`ÄUHUJPHSZ[H[LTLU[ZOH]LILLUWYLWHYLKVUOPZ[VYPJHSJVZ[IHZPZVMHJJV\U[PUN 5L[JHZONLULYH[LKMYVTVWLYH[PUNHJ[P]P[PLZ L_JLW[MVYJLY[HPUP[LTZVMWYVWLY[`WSHU[HUKLX\PWTLU[HUKH]HPSHISL¶MVYZHSLÄUHUJPHSHZZL[Z[OH[OH]LILLU TLHZ\YLKH[MHPY]HS\LHUKL_JLW[^OLYLV[OLY^PZLZ[H[LKPU[OLHJJV\U[PUNWVSPJPLZILSV^ *(:/-36>:-96405=,:;05.(*;0=0;0,: ;OLÄUHUJPHSZ[H[LTLU[ZVM[OL.YV\WHUK[OL*VTWHU`OH]LILLUWYLWHYLKPUHJJVYKHUJL^P[O0U[LYUH[PVUHS -PUHUJPHS9LWVY[PUN:[HUKHYKZ0-9:ZHZPZZ\LKI`[OL0U[LYUH[PVUHS(JJV\U[PUN:[HUKHYKZ)VHYK0(:)HUKPU 7\YJOHZLVMWYVWLY[`WSHU[HUKLX\PWTLU[ I (962) [OLTHUULYYLX\PYLKI`[OL2LU`HU*VTWHUPLZ(J[ ;OLPUKP]PK\HSÄUHUJPHSZ[H[LTLU[ZVMLHJO.YV\WLU[P[` 7\YJOHZLVMPU[HUNPISLHZZL[Z HYLWYLZLU[LKPU[OLJ\YYLUJ`VM[OLWYPTHY`LJVUVTPJLU]PYVUTLU[PU^OPJO[OLLU[P[`VWLYH[LZP[ZM\UJ[PVUHS 7YVJLLKZMYVTZHSLVMX\V[LKLX\P[PLZ -16 J\YYLUJ`-VY[OLW\YWVZLVM[OLJVUZVSPKH[LKÄUHUJPHSZ[H[LTLU[Z[OLYLZ\S[ZHUKÄUHUJPHSWVZP[PVUVMLHJO 3VHUZYLWH`TLU[Z J 29 29 LU[P[`HYLWYLZLU[LKPUTPSSPVUZVM2LU`H:OPSSPUNZ:OZ»4PSSPVU^OPJOPZ[OLM\UJ[PVUHSJ\YYLUJ`VM[OLWHYLU[ *VTWHU`HUK[OLWYLZLU[H[PVUJ\YYLUJ`MVY[OLJVUZVSPKH[LKÄUHUJPHSZ[H[LTLU[Z 5L[JHZO\ZLKPUPU]LZ[PUNHJ[P]P[PLZ -VY [OL W\YWVZL VM YLWVY[PUN \UKLY [OL 2LU`HU *VTWHUPLZ (J[ [OL IHSHUJL ZOLL[ PU [OLZL ÄUHUJPHS *(:/-36>:-964-05(5*05.(*;0=0;0,: Z[H[LTLU[ZPZYLWYLZLU[LKI`Z[H[LTLU[VMÄUHUJPHSWVZP[PVUHUK[OLWYVÄ[HUKSVZZHJJV\U[PZYLWYLZLU[LKI`[OL Z[H[LTLU[VMWYVÄ[VYSVZZHUKV[OLYJVTWYLOLUZP]L0UJVTL +P]PKLUKZWHPK[V[OLZOHYLOVSKLYZ I 0UJYLHZLPUPU]LZ[TLU[PUZ\IZPKPHYPLZ - (100) b) Application of new and revised International Financial Reporting Standards (IFRSs) 5L[JHZO\ZLKPUÄUHUJPUNHJ[P]P[PLZ P 9LSL]HU[UL^Z[HUKHYKZHUKHTLUKTLU[Z[VW\ISPZOLKZ[HUKHYKZLɈLJ[P]LMVY[OL`LHYLUKLK 31 December 2019 5,;05*9,(:,+,*9,(:,05*(:/(5+*(:/ ,8<0=(3,5;: 128 Impact of initial adoption of IFRS 16 Leases 46=,4,5;05*(:/(5+*(:/,8<0=(3,5;: 0U[OLJ\YYLU[`LHY[OL.YV\WOHZHWWSPLK0-9: 3LHZLZHZPZZ\LKI`[OL0(:)PU1HU\HY` [OH[PZLќLJ[P]L MVYHUU\HSWLYPVKZ[OH[ILNPUVUVYHM[LY1HU\HY` *HZOHUKJHZOLX\P]HSLU[ZH[[OLILNPUUPUNVM[OL`LHY 2,161 5L[PUJYLHZLKLJYLHZLPUJHZOHUKJHZOLX\P]HSLU[ZK\YPUN[OL`LHY 128 0-9: PU[YVK\JLZUL^VYHTLUKLKYLX\PYLTLU[Z^P[OYLZWLJ[[VSLHZLHJJV\U[PUN0[PU[YVK\JLZZPNUPÄJHU[ JOHUNLZ[VSLZZLLHJJV\U[PUNI`YLTV]PUN[OLKPZ[PUJ[PVUIL[^LLUVWLYH[PUNHUKÄUHUJLSLHZLHUKYLX\PYPUN *HZOHUKJHZOLX\P]HSLU[ZH[[OLLUKVM[OL`LHY I 2,289 2,161 [OLYLJVNUP[PVUVMHYPNO[VM\ZLHZZL[HUKHSLHZLSPHIPSP[`H[JVTTLUJLTLU[MVYHSSSLHZLZL_JLW[MVYZOVY[[LYT SLHZLZHUKSLHZLZVMSV^]HS\LHZZL[Z^OLUZ\JOYLJVNUP[PVUL_LTW[PVUZHYLHKVW[LK0UJVU[YHZ[[VSLZZLL HJJV\U[PUN[OLYLX\PYLTLU[ZMVYSLZZVYHJJV\U[PUNOH]LYLTHPULKSHYNLS`\UJOHUNLK;OLPTWHJ[VM[OLHKVW[PVU VM0-9: VU[OL.YV\W»ZJVUZVSPKH[LKÄUHUJPHSZ[H[LTLU[ZPZKLZJYPILKILSV^ ;OLKH[LVMPUP[PHSHWWSPJH[PVUVM0-9: MVY[OL.YV\WPZ1HU\HY` ;OL.YV\WHWWSPLK[OLUL^Z[HUKHYKPUHJJVYKHUJL^P[O[OLTVKPÄLKYL[YVZWLJ[P]LHWWYVHJO^P[OV\[YLZ[H[LTLU[ VM[OLJVTWHYH[P]LWLYPVKPUHJJVYKHUJL^P[O[OL[YHUZP[PVUHSWYV]PZPVUZVM0-9: ;OL.YV\WOHZYLJVNUPaLKSLHZLSPHIPSP[PLZH[[OLKH[LVMPUP[PHSHWWSPJH[PVUMVYSLHZLZWYL]PV\ZS`JSHZZPÄLKHZHU VWLYH[PUNSLHZLHWWS`PUN0(: ;OLSLHZLSPHIPSP[PLZOH]LILLUTLHZ\YLKH[[OLWYLZLU[]HS\LVM[OLYLTHPUPUN SLHZLWH`TLU[ZKPZJV\U[LK\ZPUN[OLSLZZLL»ZPUJYLTLU[HSIVYYV^PUNYH[LH[[OLKH[LVMPUP[PHSHWWSPJH[PVU ;OL.YV\WOHZYLJVNUPZLKHYPNO[VM\ZLHZZL[H[[OLKH[LVMPUP[PHSHWWSPJH[PVUMVYSLHZLZWYL]PV\ZS`JSHZZPÄLKHZ HUVWLYH[PUNSLHZLHWWS`PUN0(: ;OL.YV\WOHZVUHSLHZLI`SLHZLIHZPZTLHZ\YLK[OLYPNO[VM\ZLHZZL[ H[P[ZJHYY`PUNHTV\U[HZPM[OL:[HUKHYKOHKILLUHWWSPLKZPUJL[OLJVTTLUJLTLU[KH[LI\[KPZJV\U[LK\ZPUN [OL.YV\W»ZPUJYLTLU[HSIVYYV^PUNYH[LH[[OLKH[LVMPUP[PHSHWWSPJH[PVU 108 109 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) b) Application of new and revised International Financial Reporting Standards (IFRSs) b) Application of new and revised International Financial Reporting Standards (IFRSs) i) 9LSL]HU[UL^Z[HUKHYKZHUKHTLUKTLU[Z[VW\ISPZOLKZ[HUKHYKZLɈLJ[P]LMVY[OL`LHYLUKLK i) 9LSL]HU[UL^Z[HUKHYKZHUKHTLUKTLU[Z[VW\ISPZOLKZ[HUKHYKZLɈLJ[P]LMVY[OL`LHYLUKLK 31 December 2019 (Continued) 31 December 2019 (Continued) Impact of initial application of IFRS 16 Leases (Continued) Impact of initial application of IFRS 16 Leases (Continued) H0TWHJ[VM[OLUL^KLÄUP[PVUVMHSLHZL (c) Impact on Lessor Accounting ;OL.YV\WOHZTHKL\ZLVM[OLWYHJ[PJHSL_WLKPLU[H]HPSHISLVU[YHUZP[PVU[V0-9: UV[[VYLHZZLZZ^OL[OLY 0-9: KVLZUV[JOHUNLZ\IZ[HU[PHSS`OV^HSLZZVYHJJV\U[ZMVYSLHZLZ ;OL.YV\WHWWSPLZ[OLKLÄUP[PVUVMHSLHZLHUKYLSH[LKN\PKHUJLZL[V\[PU0-9: [VHSSJVU[YHJ[ZLU[LYLKPU[V ;OL^LPNO[LKH]LYHNLSLZZLLZPUJYLTLU[HSIVYYV^PUNYH[LHWWSPLK[VSLHZLSPHIPSP[PLZYLJVNUPZLKPU[OLZ[H[LTLU[ VYJOHUNLKVUVYHM[LY1HU\HY` 0UWYLWHYH[PVUMVY[OLÄYZ[[PTLHWWSPJH[PVUVM0-9: [OL.YV\WOHZ VMÄUHUJPHSWVZP[PVUVU1HU\HY` PZ JHYYPLKV\[HYL]PL^VMHSS[OLSLHZLJVU[YHJ[Z;OLYL]PL^OHZZOV^U[OH[[OLUL^KLÄUP[PVUPU0-9: ^PSSUV[ ZPNUPÄJHU[S`JOHUNL[OLZJVWLVMJVU[YHJ[Z[OH[TLL[[OLKLÄUP[PVUVMHSLHZLMVY[OL.YV\W ;OL MVSSV^PUN [HISL ZOV^Z [OL VWLYH[PUN SLHZL JVTTP[TLU[Z KPZJSVZLK HWWS`PUN 0(: H[ +LJLTILY KPZJV\U[LK\ZPUN[OLPUJYLTLU[HSIVYYV^PUNYH[LH[[OLKH[LVMPUP[PHSHWWSPJH[PVUHUK[OLSLHZLSPHIPSP[PLZ (b) Impact on Lessee Accounting YLJVNUPZLKPU[OLZ[H[LTLU[VMÄUHUJPHSWVZP[PVUH[[OLKH[LVMPUP[PHSHWWSPJH[PVU (i) Former operating leases GROUP Shs’million 0-9: JOHUNLZOV^[OL.YV\WHJJV\U[ZMVYSLHZLZWYL]PV\ZS`JSHZZPÄLKHZVWLYH[PUNSLHZLZ\UKLY0(: ^OPJO^LYLVќIHSHUJLZOLL[ 6WLYH[PUNSLHZLJVTTP[TLU[ZH[+LJLTILY ,ќLJ[VMSLHZL[LYTPUH[PVUZ (9) (WWS`PUN0-9: MVYHSSSLHZLZL_JLW[HZUV[LKILSV^[OL.YV\W! ,ќLJ[VMKPZJV\U[PUN[OLHIV]LHTV\U[Z ,ќLJ[VM=HS\L(KKLK;H_=(;LSPTPUH[PVU (11) H 9LJVNUPZLZ YPNO[VM\ZL HZZL[Z HUK SLHZL SPHIPSP[PLZ PU [OL Z[H[LTLU[ VM ÄUHUJPHS WVZP[PVU PUP[PHSS` ______TLHZ\YLKH[[OLWYLZLU[]HS\LVM[OLM\[\YLSLHZLWH`TLU[Z" 3LHZLSPHIPSP[PLZYLJVNUPZLKH[1HU\HY` I 9LJVNUPZLZKLWYLJPH[PVUVMYPNO[VM\ZLHZZL[ZHUKPU[LYLZ[VUSLHZLSPHIPSP[PLZPUWYVÄ[VYSVZZ" ======J :LWHYH[LZ[OL[V[HSHTV\U[VMJHZOWHPKPU[VHWYPUJPWHSWVY[PVUWYLZLU[LK^P[OPUÄUHUJPUNHJ[P]P[PLZ 0TWHJ[VUHZZL[ZSPHIPSP[PLZHUKLX\P[`HZH[1HU\HY` HUKPU[LYLZ[WYLZLU[LK^P[OPUÄUHUJPUNHJ[P]P[PLZPU[OLZ[H[LTLU[VMJHZOÅV^Z 3LHZLPUJLU[P]LZLNYLU[MYLLWLYPVKHYLYLJVNUPZLKHZWHY[VM[OLTLHZ\YLTLU[VM[OLYPNO[VM\ZL As previously IFRS 16 After IFRS 16 HZZL[ZHUKSLHZLSPHIPSP[PLZ^OLYLHZ\UKLY0(: [OL`YLZ\S[LKPU[OLYLJVNUP[PVUVMHSLHZLPUJLU[P]L reported adjustments Adjustments HTVY[PZLKHZHYLK\J[PVUVMYLU[HSL_WLUZLZNLULYHSS`VUHZ[YHPNO[SPULIHZPZ Shs’million Shs’million Shs’million - 110 111 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SIGNIFICANT ACCOUNTING POLICIES (continued) b) Application of new and revised International Financial Reporting Standards (IFRSs) (continued) b) Application of new and revised International Financial Reporting Standards (IFRSs) (continued) i) 9LSL]HU[UL^Z[HUKHYKZHUKHTLUKTLU[Z[VW\ISPZOLKZ[HUKHYKZLɈLJ[P]LMVY[OL`LHYLUKLK i) 9LSL]HU[UL^Z[HUKHYKZHUKHTLUKTLU[Z[VW\ISPZOLKZ[HUKHYKZLɈLJ[P]LMVY[OL`LHYLUKLK 31 December 2019 (Continued) 31 December 2019 (Continued) 0U[OLJ\YYLU[`LHY[OL.YV\WOHZHWWSPLKHU\TILYVMHTLUKTLU[Z[V0-9::[HUKHYKZHUK0U[LYWYL[H[PVUZPZZ\LK (TLUKTLU[Z[V0(: ,TWSV`LL)LULÄ[Z7SHU(TLUKTLU[*\Y[HPSTLU[VY:L[[SLTLU[ I`[OL0(:)[OH[HYLLќLJ[P]LMVYHUHUU\HSWLYPVK[OH[ILNPUZVUVYHM[LY1HU\HY` ;OLPYHKVW[PVUOHZUV[ OHKHU`TH[LYPHSPTWHJ[VU[OLKPZJSVZ\YLZVYVU[OLHTV\U[ZYLWVY[LKPU[OLZLÄUHUJPHSZ[H[LTLU[Z ;OL.YV\WOHZHKVW[LK[OLHTLUKTLU[ZVM0(: MVY[OLÄYZ[[PTLPU[OLJ\YYLU[`LHY;OLHTLUKTLU[ZJSHYPM` [OH[[OLWHZ[ZLY]PJLJVZ[VYVM[OLNHPUVYSVZZVUZL[[SLTLU[PZJHSJ\SH[LKI`TLHZ\YPUN[OLKLÄULKILULÄ[ Amendments to IFRS 9 Prepayment Features with Negative Compensation SPHIPSP[`HZZL[\ZPUN\WKH[LKHZZ\TW[PVUZHUKJVTWHYPUNILULÄ[ZVќLYLKHUKWSHUHZZL[ZILMVYLHUKHM[LY[OL WSHUHTLUKTLU[VYJ\Y[HPSTLU[VYZL[[SLTLU[I\[PNUVYPUN[OLLќLJ[VM[OLHZZL[JLPSPUN[OH[TH`HYPZL^OLU[OL ;OL.YV\WOHZHKVW[LK[OLHTLUKTLU[Z[V0-9: MVY[OLÄYZ[[PTLPU[OLJ\YYLU[`LHY;OLHTLUKTLU[Z[V0-9: KLÄULKILULÄ[WSHUPZPUHZ\YWS\ZWVZP[PVU0(: PZUV^JSLHY[OH[[OLJOHUNLPU[OLLќLJ[VM[OLHZZL[JLPSPUN JSHYPM`[OH[MVY[OLW\YWVZLVMHZZLZZPUN^OL[OLYHWYLWH`TLU[MLH[\YLTLL[Z[OLºZVSLS`WH`TLU[ZVMWYPUJPWHS [OH[TH`YLZ\S[MYVT[OLWSHUHTLUKTLU[VYJ\Y[HPSTLU[VYZL[[SLTLU[PZKL[LYTPULKPUHZLJVUKZ[LWHUKPZ HUKPU[LYLZ[»:770JVUKP[PVU[OLWHY[`L_LYJPZPUN[OLVW[PVUTH`WH`VYYLJLP]LYLHZVUHISLJVTWLUZH[PVUMVY[OL YLJVNUPZLKPU[OLUVYTHSTHUULYPUV[OLYJVTWYLOLUZP]LPUJVTL WYLWH`TLU[PYYLZWLJ[P]LVM[OLYLHZVUMVYWYLWH`TLU[0UV[OLY^VYKZÄUHUJPHSHZZL[Z^P[OWYLWH`TLU[MLH[\YLZ ^P[OULNH[P]LJVTWLUZH[PVUKVUV[H\[VTH[PJHSS`MHPS:770 ;OLWHYHNYHWOZ[OH[YLSH[L[VTLHZ\YPUN[OLJ\YYLU[ZLY]PJLJVZ[HUK[OLUL[PU[LYLZ[VU[OLUL[KLÄULKILULÄ[ SPHIPSP[`HZZL[OH]LHSZVILLUHTLUKLK;OL.YV\W^PSSUV^ILYLX\PYLK[V\ZL[OL\WKH[LKHZZ\TW[PVUZMYVT Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures [OPZYLTLHZ\YLTLU[[VKL[LYTPULJ\YYLU[ZLY]PJLJVZ[HUKUL[PU[LYLZ[MVY[OLYLTHPUKLYVM[OLYLWVY[PUNWLYPVK HM[LY[OLJOHUNL[V[OLWSHU0U[OLJHZLVM[OLUL[PU[LYLZ[[OLHTLUKTLU[ZTHRLP[JSLHY[OH[MVY[OLWLYPVK ;OL.YV\WOHZHKVW[LK[OLHTLUKTLU[Z[V0(: MVY[OLÄYZ[[PTLPU[OLJ\YYLU[`LHY;OLHTLUKTLU[JSHYPÄLZ WVZ[ WSHU HTLUKTLU[ [OL UL[ PU[LYLZ[ PZ JHSJ\SH[LK I` T\S[PWS`PUN [OL UL[ KLÄULK ILULÄ[ SPHIPSP[` HZZL[ HZ [OH[0-9: PUJS\KPUNP[ZPTWHPYTLU[YLX\PYLTLU[ZHWWSPLZ[VV[OLYÄUHUJPHSPUZ[Y\TLU[ZPUHUHZZVJPH[LVYQVPU[ YLTLHZ\YLK\UKLY0(: ! ^P[O[OLKPZJV\U[YH[L\ZLKPU[OLYLTLHZ\YLTLU[HSZV[HRPUNPU[VHJJV\U[[OL ]LU[\YL[V^OPJO[OLLX\P[`TL[OVKPZUV[HWWSPLK;OLZLPUJS\KLSVUN[LYTPU[LYLZ[Z[OH[PUZ\IZ[HUJLMVYTWHY[ LќLJ[VMJVU[YPI\[PVUZHUKILULÄ[WH`TLU[ZVU[OLUL[KLÄULKILULÄ[SPHIPSP[`HZZL[ VM[OLLU[P[`»ZUL[PU]LZ[TLU[PUHUHZZVJPH[LVYQVPU[]LU[\YL;OL.YV\WHWWSPLZ0-9: [VZ\JOSVUN[LYTPU[LYLZ[Z ILMVYLP[HWWSPLZ0(: 0UHWWS`PUN0-9: [OL.YV\WKVLZUV[[HRLHJJV\U[VMHU`HKQ\Z[TLU[Z[V[OLJHYY`PUN IFRIC 23 Uncertainty over Income Tax Treatments HTV\U[VMSVUN[LYTPU[LYLZ[ZYLX\PYLKI`0(: PLHKQ\Z[TLU[Z[V[OLJHYY`PUNHTV\U[VMSVUN[LYTPU[LYLZ[Z HYPZPUNMYVT[OLHSSVJH[PVUVMSVZZLZVM[OLPU]LZ[LLVYHZZLZZTLU[VMPTWHPYTLU[PUHJJVYKHUJL^P[O0(: ;OL.YV\WOHZHKVW[LK0-90*MVY[OLÄYZ[[PTLPU[OLJ\YYLU[`LHY0-90*ZL[ZV\[OV^[VKL[LYTPUL[OL HJJV\U[PUN[H_WVZP[PVU^OLU[OLYLPZ\UJLY[HPU[`V]LYPUJVTL[H_[YLH[TLU[Z;OL0U[LYWYL[H[PVUYLX\PYLZ[OL Annual Improvements to IFRS Standards 2015–2017 Cycle Amendments to IFRS 3 Business Group to: Combinations, IFRS 11 Joint Arrangements, IAS 12 Income Taxes and IAS 23 Borrowing Costs • KL[LYTPUL^OL[OLY\UJLY[HPU[H_WVZP[PVUZHYLHZZLZZLKZLWHYH[LS`VYHZHNYV\W"HUK ;OL.YV\WOHZHKVW[LK[OLHTLUKTLU[ZPUJS\KLKPU[OLAnnual Improvements to IFRS Standards 2015–2017 • HZZLZZ^OL[OLYP[PZWYVIHISL[OH[H[H_H\[OVYP[`^PSSHJJLW[HU\UJLY[HPU[H_[YLH[TLU[\ZLKVYWYVWVZLK CycleMVY[OLÄYZ[[PTLPU[OLJ\YYLU[`LHY;OL(UU\HS0TWYV]LTLU[ZPUJS\KLHTLUKTLU[Z[VMV\Y:[HUKHYKZ! [VIL\ZLKI`HULU[P[`PUP[ZPUJVTL[H_ÄSPUNZ! IAS 12 Income Taxes ¶0M`LZ[OL.YV\WZOV\SKKL[LYTPULP[ZHJJV\U[PUN[H_WVZP[PVUJVUZPZ[LU[S`^P[O[OL[H_[YLH[TLU[\ZLK ;OLHTLUKTLU[ZJSHYPM`[OH[[OL.YV\WZOV\SKYLJVNUPZL[OLPUJVTL[H_JVUZLX\LUJLZVMKP]PKLUKZPUWYVÄ[VY VYWSHUULK[VIL\ZLKPUP[ZPUJVTL[H_ÄSPUNZ SVZZV[OLYJVTWYLOLUZP]LPUJVTLVYLX\P[`HJJVYKPUN[V^OLYL[OL.YV\WVYPNPUHSS`YLJVNUPZLK[OL[YHUZHJ[PVUZ ¶0MUV[OL.YV\WZOV\SKYLÅLJ[[OLLќLJ[VM\UJLY[HPU[`PUKL[LYTPUPUNP[ZHJJV\U[PUN[H_WVZP[PVU\ZPUN [OH[ NLULYH[LK [OL KPZ[YPI\[HISL WYVÄ[Z ;OPZ PZ [OL JHZL PYYLZWLJ[P]L VM ^OL[OLY KPќLYLU[ [H_ YH[LZ HWWS` [V LP[OLY[OLTVZ[SPRLS`HTV\U[VY[OLL_WLJ[LK]HS\LTL[OVK KPZ[YPI\[LKHUK\UKPZ[YPI\[LKWYVÄ[Z ii) 5L^HUKYL]PZLK0-9::[HUKHYKZPUPZZ\LI\[UV[`L[LɈLJ[P]LMVY[OL`LHYLUKLK+LJLTILY IAS 23 Borrowing Costs ([[OLKH[LVMH\[OVYPZH[PVUVM[OLZLÄUHUJPHSZ[H[LTLU[Z[OL.YV\WOHZUV[HWWSPLK[OLMVSSV^PUNUL^HUKYL]PZLK ;OLHTLUKTLU[ZJSHYPM`[OH[PMHU`ZWLJPÄJIVYYV^PUNYLTHPUZV\[Z[HUKPUNHM[LY[OLYLSH[LKHZZL[PZYLHK`MVYP[Z 0-9::[HUKHYKZ[OH[OH]LILLUPZZ\LKI\[HYLUV[`L[LќLJ[P]L! PU[LUKLK\ZLVYZHSL[OH[IVYYV^PUNILJVTLZWHY[VM[OLM\UKZ[OH[HULU[P[`IVYYV^ZNLULYHSS`^OLUJHSJ\SH[PUN [OLJHWP[HSPZH[PVUYH[LVUNLULYHSIVYYV^PUNZ New and Amendments to standards ,ɈLJ[P]LMVYHUU\HSWLYPVKZILNPUUPUNVUVYHM[LY IFRS 3 Business Combinations 0-9: Insurance 1HU\HY`^P[OLHYSPLYHWWSPJH[PVUWLYTP[[LK ;OLHTLUKTLU[ZJSHYPM`[OH[^OLU[OL.YV\WVI[HPUZJVU[YVSVMHI\ZPULZZ[OH[PZHQVPU[VWLYH[PVU[OL.YV\W HWWSPLZ[OLYLX\PYLTLU[ZMVYHI\ZPULZZJVTIPUH[PVUHJOPL]LKPUZ[HNLZPUJS\KPUNYLTLHZ\YPUNP[ZWYL]PV\ZS`OLSK (TLUKTLU[Z[V0(:HUK0(: Sale or @L[[VILZL[OV^L]LYLHYSPLYHWWSPJH[PVUWLYTP[[LK PU[LYLZ[7/0PU[OLQVPU[VWLYH[PVUH[MHPY]HS\L;OL7/0[VILYLTLHZ\YLKPUJS\KLZHU`\UYLJVNUPZLKHZZL[Z Contribution of Assets between an investor and SPHIPSP[PLZHUKNVVK^PSSYLSH[PUN[V[OLQVPU[VWLYH[PVU its Associate or Joint Venture (TLUKTLU[Z[V0-9:+LÄUP[PVUVMHI\ZPULZZ 1HU\HY`^P[OLHYSPLYHWWSPJH[PVUWLYTP[[LK IFRS 11 Joint Arrangements (TLUKTLU[Z[V0(:HUK0(: +LÄUP[PVUVM 1HU\HY`^P[OLHYSPLYHWWSPJH[PVUWLYTP[[LK ;OLHTLUKTLU[ZJSHYPM`[OH[^OLUHWHY[`[OH[WHY[PJPWH[LZPUI\[KVLZUV[OH]LQVPU[JVU[YVSVMHQVPU[VWLYH[PVU material [OH[PZHI\ZPULZZVI[HPUZQVPU[JVU[YVSVMZ\JOHQVPU[VWLYH[PVU[OL.YV\WKVLZUV[YLTLHZ\YLP[Z7/0PU[OLQVPU[ operation. *VUJLW[\HS-YHTL^VYR! Amendments to 1HU\HY`^P[OLHYSPLYHWWSPJH[PVUWLYTP[[LK References to the Conceptual Framework in IFRS standards ;OL+PYLJ[VYZKVUV[L_WLJ[[OH[[OLHKVW[PVUVM[OL:[HUKHYKZSPZ[LKHIV]L^PSSOH]LHTH[LYPHSPTWHJ[VU[OL 112 ÄUHUJPHSZ[H[LTLU[ZVM[OL.YV\WPUM\[\YLWLYPVKZL_JLW[HZUV[LKILSV^! 113 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SIGNIFICANT ACCOUNTING POLICIES (continued) b) Application of new and revised International Financial Reporting Standards (IFRSs) (continued) b) Application of new and revised International Financial Reporting Standards (IFRSs) (continued) ii) 5L^HUKYL]PZLK0-9::[HUKHYKZPUPZZ\LI\[UV[`L[LɈLJ[P]LMVY[OL`LHYLUKLK+LJLTILY ii) 5L^HUKYL]PZLK0-9::[HUKHYKZPUPZZ\LI\[UV[`L[LɈLJ[P]LMVY[OL`LHYLUKLK+LJLTILY (continued) (continued) IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an Investor and its Amendments to References to the Conceptual Framework in IFRS Standards Associate or Joint Venture ;VNL[OLY^P[O[OLYL]PZLK*VUJLW[\HS-YHTL^VYR^OPJOILJHTLLќLJ[P]L\WVUW\ISPJH[PVUVU 4HYJO ;OLHTLUKTLU[Z[V0-9:HUK0(: KLHS^P[OZP[\H[PVUZ^OLYL[OLYLPZHZHSLVYJVU[YPI\[PVUVMHZZL[Z [OL0(:)OHZHSZVPZZ\LK(TLUKTLU[Z[V9LMLYLUJLZ[V[OL*VUJLW[\HS-YHTL^VYRPU0-9::[HUKHYKZ;OL IL[^LLUHUPU]LZ[VYHUKP[ZHZZVJPH[LVYQVPU[]LU[\YL:WLJPÄJHSS`[OLHTLUKTLU[ZZ[H[L[OH[NHPUZVYSVZZLZ KVJ\TLU[JVU[HPUZHTLUKTLU[Z[V0-9:0-9:0-9: 0-9:0(:0(: 0(:0(: 0(: 0-90* YLZ\S[PUNMYVT[OLSVZZVMJVU[YVSVMHZ\IZPKPHY`[OH[KVLZUV[JVU[HPUHI\ZPULZZPUH[YHUZHJ[PVU^P[OHUHZZVJPH[L 0-90* 0-90*0-90*HUK:0* VYHQVPU[]LU[\YL[OH[PZHJJV\U[LKMVY\ZPUN[OLLX\P[`TL[OVKHYLYLJVNUPZLKPU[OLWHYLU[»ZWYVÄ[VYSVZZVUS` [V[OLL_[LU[VM[OL\UYLSH[LKPU]LZ[VYZ»PU[LYLZ[ZPU[OH[HZZVJPH[LVYQVPU[]LU[\YL:PTPSHYS`NHPUZHUKSVZZLZ 5V[HSSHTLUKTLU[ZOV^L]LY\WKH[L[OVZLWYVUV\UJLTLU[Z^P[OYLNHYK[VYLMLYLUJLZ[VHUKX\V[LZMYVT[OL YLZ\S[PUNMYVT[OLYLTLHZ\YLTLU[VMPU]LZ[TLU[ZYL[HPULKPUHU`MVYTLYZ\IZPKPHY`[OH[OHZILJVTLHUHZZVJPH[L MYHTL^VYRZV[OH[[OL`YLMLY[V[OLYL]PZLKConceptual Framework:VTLWYVUV\UJLTLU[ZHYLVUS`\WKH[LK VYHQVPU[]LU[\YL[OH[PZHJJV\U[LKMVY\ZPUN[OLLX\P[`TL[OVK[VMHPY]HS\LHYLYLJVNUPZLKPU[OLMVYTLYWHYLU[»Z [VPUKPJH[L^OPJO]LYZPVUVM[OL-YHTL^VYR[OL`HYLYLMLYLUJPUN[V[OL0(:*FrameworkHKVW[LKI`[OL0(:) WYVÄ[VYSVZZVUS`[V[OLL_[LU[VM[OL\UYLSH[LKPU]LZ[VYZ»PU[LYLZ[ZPU[OLUL^HZZVJPH[LVYQVPU[]LU[\YL PU[OL0(:)-YHTL^VYRVMVY[OLUL^YL]PZLKFrameworkVM VY[VPUKPJH[L[OH[KLÄUP[PVUZPU [OL:[HUKHYKOH]LUV[ILLU\WKH[LK^P[O[OLUL^KLÄUP[PVUZKL]LSVWLKPU[OLYL]PZLKConceptual Framework. ;OLLќLJ[P]LKH[LVM[OLHTLUKTLU[ZOHZ`L[[VILZL[I`[OL0(:)"OV^L]LYLHYSPLYHWWSPJH[PVUVM[OLHTLUKTLU[Z PZWLYTP[[LK;OLKPYLJ[VYZVM[OL.YV\WHU[PJPWH[L[OH[[OLHWWSPJH[PVUVM[OLZLHTLUKTLU[ZTH`OH]LHUPTWHJ[ ;OL HTLUKTLU[Z ^OLYL [OL` HJ[\HSS` HYL \WKH[LZ HYL LќLJ[P]L MVY HUU\HS WLYPVKZ ILNPUUPUN VU VY HM[LY VU[OLÄUHUJPHSZ[H[LTLU[ZPUM\[\YLWLYPVKZZOV\SKZ\JO[YHUZHJ[PVUZHYPZL 1HU\HY`^P[OLHYS`HWWSPJH[PVUWLYTP[[LK ;OL +PYLJ[VYZ VM [OL .YV\W HYL J\YYLU[S` HZZLZZPUN [OL PTWHJ[ VM [OLZL HTLUKTLU[Z HUK WSHU [V HKVW[ [OL iii) Early adoption of standards HTLUKTLU[ZVU[OLYLX\PYLKLќLJ[P]LKH[LPMULJLZZHY` ;OL.YV\WKPKUV[LHYS`HKVW[HU`UL^VYHTLUKLKZ[HUKHYKZPU (TLUKTLU[Z[V0-9:+LÄUP[PVUVMHI\ZPULZZ c) Basis of Consolidation ;OLHTLUKTLU[ZJSHYPM`[OH[^OPSLI\ZPULZZLZ\Z\HSS`OH]LV\[W\[ZV\[W\[ZHYLUV[YLX\PYLKMVYHUPU[LNYH[LK ZL[VMHJ[P]P[PLZHUKHZZL[Z[VX\HSPM`HZHI\ZPULZZ;VILJVUZPKLYLKHI\ZPULZZHUHJX\PYLKZL[VMHJ[P]P[PLZHUK ;OLJVUZVSPKH[LKÄUHUJPHSZ[H[LTLU[ZJVTWYPZL[OLÄUHUJPHSZ[H[LTLU[ZVM[OL*VTWHU`HUKLU[P[PLZJVU[YVSSLK HZZL[ZT\Z[PUJS\KLH[HTPUPT\THUPUW\[HUKHZ\IZ[HU[P]LWYVJLZZ[OH[[VNL[OLYZPNUPÄJHU[S`JVU[YPI\[L[V I`[OLJVTWHU`HZH[+LJLTILY *VU[YVSPZHJOPL]LK^OLU[OL.YV\WPZL_WVZLKVYOHZYPNO[Z[V [OLHIPSP[`[VJYLH[LV\[W\[Z ]HYPHISLYL[\YUZMYVTP[ZPU]VS]LTLU[^P[O[OLPU]LZ[LLHUKOHZ[OLHIPSP[`[VHќLJ[[OVZLYL[\YUZ[OYV\NOP[ZWV^LY V]LY[OLPU]LZ[LL (KKP[PVUHSN\PKHUJLPZWYV]PKLK[OH[OLSWZ[VKL[LYTPUL^OL[OLYHZ\IZ[HU[P]LWYVJLZZOHZILLUHJX\PYLK ;OLHTLUKTLU[ZPU[YVK\JLHUVW[PVUHSJVUJLU[YH[PVU[LZ[[OH[WLYTP[ZHZPTWSPÄLKHZZLZZTLU[VM^OL[OLYHU (SPZ[VM[OLZ\IZPKPHYPLZPU[OL.YV\WPZWYV]PKLKPU5V[L H HJX\PYLKZL[VMHJ[P]P[PLZHUKHZZL[ZPZUV[HI\ZPULZZ ;OL +PYLJ[VYZ VM [OL .YV\W HYL J\YYLU[S` HZZLZZPUN [OL PTWHJ[ VM [OLZL HTLUKTLU[Z HUK WSHU [V HKVW[ [OL >OLU[OL.YV\WOHZSLZZ[OHUHTHQVYP[`VM[OL]V[PUNVYZPTPSHYYPNO[ZVMHUPU]LZ[LL[OL.YV\WJVUZPKLYZHSS HTLUKTLU[ZVU[OLYLX\PYLKLќLJ[P]LKH[LPMULJLZZHY` YLSL]HU[MHJ[ZHUKJPYJ\TZ[HUJLZPUHZZLZZPUN^OL[OLYP[OHZWV^LYV]LYHUPU]LZ[LLPUJS\KPUN! (TLUKTLU[Z[V0(:HUK0(: +LÄUP[PVUVMTH[LYPHS % ;OLJVU[YHJ[\HSHYYHUNLTLU[^P[O[OLV[OLY]V[LOVSKLYZVM[OLPU]LZ[LL" % 9PNO[ZHYPZPUNMYVTV[OLYJVU[YHJ[\HSHYYHUNLTLU[Z"HUKVY ;OLHTLUKTLU[ZHYLPU[LUKLK[VTHRL[OLKLÄUP[PVUVMTH[LYPHSPU0(:LHZPLY[V\UKLYZ[HUKHUKHYLUV[ % ;OL.YV\W»Z]V[PUNYPNO[ZHUKWV[LU[PHS]V[PUNYPNO[Z PU[LUKLK[VHS[LY[OL\UKLYS`PUNJVUJLW[VMTH[LYPHSP[`PU0-9::[HUKHYKZ;OLJVUJLW[VMºVIZJ\YPUN»TH[LYPHS PUMVYTH[PVU^P[OPTTH[LYPHSPUMVYTH[PVUOHZILLUPUJS\KLKHZWHY[VM[OLUL^KLÄUP[PVU ;OL.YV\WYLHZZLZZLZ^OL[OLYVYUV[P[JVU[YVSZHUPU]LZ[LLPMMHJ[ZHUKJPYJ\TZ[HUJLZPUKPJH[L[OH[[OLYLHYL JOHUNLZ[VVULVYTVYLVM[OL[OYLLLSLTLU[ZVMJVU[YVS*VUZVSPKH[PVUVMHZ\IZPKPHY`ILNPUZ^OLU[OL.YV\W ;OL[OYLZOVSKMVYTH[LYPHSP[`PUÅ\LUJPUN\ZLYZOHZILLUJOHUNLKMYVTºJV\SKPUÅ\LUJL»[VºJV\SKYLHZVUHIS`IL VI[HPUZJVU[YVSV]LY[OLZ\IZPKPHY`HUKJLHZLZ^OLU[OL.YV\WSVZLZJVU[YVSVM[OLZ\IZPKPHY`(ZZL[ZSPHIPSP[PLZ L_WLJ[LK[VPUÅ\LUJL» PUJVTLHUKL_WLUZLZVMHZ\IZPKPHY`HJX\PYLKVYKPZWVZLKVMK\YPUN[OL`LHYHYLPUJS\KLKPU[OLJVUZVSPKH[LK ÄUHUJPHSZ[H[LTLU[ZMYVT[OLKH[L[OL.YV\WNHPUZJVU[YVS\U[PS[OLKH[L[OL.YV\WJLHZLZ[VJVU[YVS[OLZ\IZPKPHY` ;OLKLÄUP[PVUVMTH[LYPHSPU0(: OHZILLUYLWSHJLKI`HYLMLYLUJL[V[OLKLÄUP[PVUVMTH[LYPHSPU0(:0U HKKP[PVU[OL0(:)HTLUKLKV[OLY:[HUKHYKZHUK[OL*VUJLW[\HS-YHTL^VYR[OH[JVU[HPUHKLÄUP[PVUVM TH[LYPHSVYYLMLY[V[OL[LYTºTH[LYPHS»[VLUZ\YLJVUZPZ[LUJ` ;OLHTLUKTLU[ZHYLHWWSPLKWYVZWLJ[P]LS`MVYHUU\HSWLYPVKZILNPUUPUNVUVYHM[LY1HU\HY`^P[OLHYSPLY HWWSPJH[PVUWLYTP[[LK;OL+PYLJ[VYZVM[OL.YV\WHYLJ\YYLU[S`HZZLZZPUN[OLPTWHJ[VM[OLZLHTLUKTLU[ZHUK 114 WSHU[VHKVW[[OLHTLUKTLU[ZVU[OLYLX\PYLKLќLJ[P]LKH[LPMULJLZZHY` 115 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SIGNIFICANT ACCOUNTING POLICIES (continued) c) Basis of Consolidation d) Business combinations and goodwill (Continued) 7YVÄ[VYSVZZHUKLHJOJVTWVULU[VMV[OLYJVTWYLOLUZP]LPUJVTLHYLH[[YPI\[LK[V[OLLX\P[`OVSKLYZVM[OL (M[LYPUP[PHSYLJVNUP[PVUNVVK^PSSPZTLHZ\YLKH[JVZ[SLZZHU`HJJ\T\SH[LKPTWHPYTLU[SVZZLZ-VY[OLW\YWVZL WHYLU[VM[OL.YV\WHUK[V[OLUVUJVU[YVSSPUNPU[LYLZ[ZL]LUPM[OPZYLZ\S[ZPU[OLUVUJVU[YVSSPUNPU[LYLZ[ZOH]PUN VMPTWHPYTLU[[LZ[PUNNVVK^PSSPZHSSVJH[LK[V[OLJHZONLULYH[PUN\UP[ZL_WLJ[LK[VILULÄ[MYVT[OLZ`ULYNPLZVM HKLÄJP[IHSHUJL>OLUULJLZZHY`HKQ\Z[TLU[ZHYLTHKL[V[OLÄUHUJPHSZ[H[LTLU[ZVMZ\IZPKPHYPLZ[VIYPUN[OLPY [OLI\ZPULZZJVTIPUH[PVU*HZONLULYH[PUN\UP[Z[V^OPJONVVK^PSSOHZILLUHSSVJH[LKHYL[LZ[LKMVYPTWHPYTLU[ HJJV\U[PUNWVSPJPLZPU[VSPUL^P[O[OL.YV\W»ZHJJV\U[PUNWVSPJPLZ HUU\HSS`0M[OLYLJV]LYHISLHTV\U[VM[OLJHZONLULYH[PUN\UP[PZSLZZ[OHU[OLJHYY`PUNHTV\U[VM[OL\UP[[OL PTWHPYTLU[SVZZPZHSSVJH[LK[VYLK\JL[OLJHYY`PUNHTV\U[VM[OLNVVK^PSSHSSVJH[LK[V[OL\UP[(UPTWHPYTLU[ >OLU [OL WYVWVY[PVU VM [OL LX\P[` OLSK I` UVUJVU[YVSSPUN PU[LYLZ[Z JOHUNLZ [OL .YV\W HKQ\Z[Z [OL JHYY`PUN SVZZYLJVNUPZLKMVYNVVK^PSSPZUV[YL]LYZLKPUHZ\IZLX\LU[WLYPVK>OLYLNVVK^PSSOHZILLUHSSVJH[LK[VHJHZO HTV\U[ZVM[OLJVU[YVSSPUNHUKUVUJVU[YVSSPUNPU[LYLZ[Z[VYLÅLJ[[OLJOHUNLZPU[OLPYYLSH[P]LPU[LYLZ[ZPU[OL NLULYH[PUN\UP[HUKWHY[VM[OLVWLYH[PVU^P[OPU[OH[\UP[PZKPZWVZLKVM[OLNVVK^PSSHZZVJPH[LK^P[O[OLKPZWVZLK .YV\W;OL.YV\WYLJVNUPZLZKPYLJ[S`PULX\P[`HU`KPќLYLUJLIL[^LLU[OLHTV\U[I`^OPJO[OLUVUJVU[YVSSPUN VWLYH[PVUPZPUJS\KLKPU[OLJHYY`PUNHTV\U[VM[OLVWLYH[PVU^OLUKL[LYTPUPUN[OLNHPUVYSVZZVUKPZWVZHS PU[LYLZ[ZHYLHKQ\Z[LKHUK[OLMHPY]HS\LVM[OLJVUZPKLYH[PVUWHPKVYYLJLP]LKHUKH[[YPI\[HISL[V[OLV^ULYZVM [OLWHYLU[ .VVK^PSSKPZWVZLKPU[OLZLJPYJ\TZ[HUJLZPZTLHZ\YLKIHZLKVU[OLYLSH[P]L]HS\LZVM[OLKPZWVZLKVWLYH[PVU HUK[OLWVY[PVUVM[OLJHZONLULYH[PUN\UP[YL[HPULK +PZJSVZ\YLZVMUVUJVU[YVSSPUNPU[LYLZ[ZHYLPUJS\KLKPU5V[LZ I (SSPU[YHNYV\WHZZL[ZHUKSPHIPSP[PLZLX\P[`PUJVTLL_WLUZLZHUKJHZOÅV^ZYLSH[PUN[V[YHUZHJ[PVUZIL[^LLU e) Translation of foreign currencies TLTILYZVM[OL.YV\WHYLLSPTPUH[LKPUM\SSVUJVUZVSPKH[PVU P ;YHUZHJ[PVUZHUKIHSHUJLZ ( JOHUNL PU [OL V^ULYZOPW PU[LYLZ[ VM H Z\IZPKPHY` ^P[OV\[ H SVZZ VM JVU[YVS PZ HJJV\U[LK MVY HZ HU LX\P[` [YHUZHJ[PVU0M[OL.YV\WSVZLZJVU[YVSV]LYHZ\IZPKPHY`P[! ;YHUZHJ[PVUZ PU MVYLPNU J\YYLUJPLZ HYL PUP[PHSS` YLJVYKLK I` [OL .YV\W»ZLU[P[PLZ H[ [OLPY YLZWLJ[P]L M\UJ[PVUHS J\YYLUJ`ZWV[YH[LZH[[OLKH[L[OL[YHUZHJ[PVUÄYZ[X\HSPÄLZMVYYLJVNUP[PVU % +LYLJVNUPZLZ[OLHZZL[ZPUJS\KPUNNVVK^PSSHUKSPHIPSP[PLZVM[OLZ\IZPKPHY`" % +LYLJVNUPZLZ[OLJHYY`PUNHTV\U[VMHU`UVUJVU[YVSSPUNPU[LYLZ[Z" 4VUL[HY`HZZL[ZHUKSPHIPSP[PLZKLUVTPUH[LKPUMVYLPNUJ\YYLUJPLZHYL[YHUZSH[LKH[[OLM\UJ[PVUHSJ\YYLUJ`ZWV[ % +LYLJVNUPZLZ[OLJ\T\SH[P]L[YHUZSH[PVUKPќLYLUJLZYLJVYKLKPULX\P[`" YH[LZVML_JOHUNLH[[OLYLWVY[PUNKH[L+PќLYLUJLZHYPZPUNVUZL[[SLTLU[VY[YHUZSH[PVUVMTVUL[HY`P[LTZHYL % 9LJVNUPZLZ[OLMHPY]HS\LVM[OLJVUZPKLYH[PVUYLJLP]LK" YLJVNUPZLKPUWYVÄ[VYSVZZ^P[O[OLL_JLW[PVUVMTVUL[HY`P[LTZ[OH[HYLKLZPNUH[LKHZWHY[VM[OLOLKNLVM[OL % 9LJVNUPZLZ[OLMHPY]HS\LVMHU`PU]LZ[TLU[YL[HPULK" .YV\W»ZUL[PU]LZ[TLU[VMHMVYLPNUVWLYH[PVU;OLZLHYLYLJVNUPZLKPUV[OLYJVTWYLOLUZP]LPUJVTL\U[PS[OLUL[ % 9LJVNUPZLZHU`Z\YWS\ZVYKLÄJP[PUWYVÄ[VYSVZZ"HUK PU]LZ[TLU[PZKPZWVZLKVMH[^OPJO[PTL[OLJ\T\SH[P]LHTV\U[PZYLJSHZZPÄLK[VWYVÄ[VYSVZZ;H_JOHYNLZHUK % 9LJSHZZPÄLZ[OLWHYLU[»ZZOHYLVMJVTWVULU[ZWYL]PV\ZS`YLJVNUPZLKPU6*0[VWYVÄ[VYSVZZVYYL[HPULK JYLKP[ZH[[YPI\[HISL[VL_JOHUNLKPќLYLUJLZVU[OVZLTVUL[HY`P[LTZHYLHSZVYLJVYKLKPUV[OLYJVTWYLOLUZP]L LHYUPUNZHZHWWYVWYPH[LHZ^V\SKILYLX\PYLKPM[OL.YV\WOHKKPYLJ[S`KPZWVZLKVM[OLYLSH[LKHZZL[ZVY income. SPHIPSP[PLZ 5VUTVUL[HY`P[LTZ[OH[HYLTLHZ\YLKPU[LYTZVMOPZ[VYPJHSJVZ[PUHMVYLPNUJ\YYLUJ`HYL[YHUZSH[LK\ZPUN[OL d) Business combinations and goodwill L_JOHUNLYH[LZH[[OLKH[LZVM[OLPUP[PHS[YHUZHJ[PVUZ5VUTVUL[HY`P[LTZTLHZ\YLKH[MHPY]HS\LPUHMVYLPNU J\YYLUJ`HYL[YHUZSH[LK\ZPUN[OLL_JOHUNLYH[LZH[[OLKH[L^OLU[OLMHPY]HS\LPZKL[LYTPULK;OLNHPUVYSVZZ )\ZPULZZJVTIPUH[PVUZHYLHJJV\U[LKMVY\ZPUN[OLHJX\PZP[PVUTL[OVK;OLJVZ[VMHUHJX\PZP[PVUPZTLHZ\YLK HYPZPUNVU[YHUZSH[PVUVMUVUTVUL[HY`P[LTZTLHZ\YLKH[MHPY]HS\LPZ[YLH[LKPUSPUL^P[O[OLYLJVNUP[PVUVMNHPU HZ[OLHNNYLNH[LVM[OLJVUZPKLYH[PVU[YHUZMLYYLKTLHZ\YLKH[HJX\PZP[PVUKH[LMHPY]HS\LHUK[OLHTV\U[VMHU` VYSVZZVUJOHUNLPUMHPY]HS\LVM[OLP[LTPL[YHUZSH[PVUKPќLYLUJLZVUP[LTZ^OVZLMHPY]HS\LNHPUVYSVZZPZ UVUJVU[YVSSPUNPU[LYLZ[PU[OLHJX\PYLL-VYLHJOI\ZPULZZJVTIPUH[PVU[OL.YV\WLSLJ[Z^OL[OLY[VTLHZ\YL[OL YLJVNUPZLKPUV[OLYJVTWYLOLUZP]LPUJVTLVYWYVÄ[VYSVZZHYLHSZVYLJVNUPZLKPUV[OLYJVTWYLOLUZP]LPUJVTL UVUJVU[YVSSPUNPU[LYLZ[PU[OLHJX\PYLLH[MHPY]HS\LVYH[[OLWYVWVY[PVUH[LZOHYLVM[OLHJX\PYLL»ZPKLU[PÄHISLUL[ VYWYVÄ[VYSVZZYLZWLJ[P]LS` HZZL[Z(JX\PZP[PVUYLSH[LKJVZ[ZHYLL_WLUZLKHZPUJ\YYLKHUKPUJS\KLKPUHKTPUPZ[YH[P]LL_WLUZLZ (U`NVVK^PSSHYPZPUNVU[OLHJX\PZP[PVUVMHMVYLPNUVWLYH[PVUHUKHU`MHPY]HS\LHKQ\Z[TLU[Z[V[OLJHYY`PUN >OLU[OL.YV\WHJX\PYLZHI\ZPULZZP[HZZLZZLZ[OLÄUHUJPHSHZZL[ZHUKSPHIPSP[PLZHZZ\TLKMVYHWWYVWYPH[L HTV\U[ZVMHZZL[ZHUKSPHIPSP[PLZHYPZPUNVU[OLHJX\PZP[PVUHYL[YLH[LKHZHZZL[ZHUKSPHIPSP[PLZVM[OLMVYLPNU JSHZZPÄJH[PVUHUKKLZPNUH[PVUPUHJJVYKHUJL^P[O[OLJVU[YHJ[\HS[LYTZLJVUVTPJJPYJ\TZ[HUJLZHUKWLY[PULU[ VWLYH[PVUHUK[YHUZSH[LKH[[OLZWV[YH[LVML_JOHUNLH[[OLYLWVY[PUNKH[L JVUKP[PVUZHZH[[OLHJX\PZP[PVUKH[L;OPZPUJS\KLZ[OLZLWHYH[PVUVMLTILKKLKKLYP]H[P]LZPUOVZ[JVU[YHJ[ZI` [OLHJX\PYLL PP ;YHUZSH[PVUVMMVYLPNUVWLYH[PVUZ 0M [OL I\ZPULZZ JVTIPUH[PVU PZ HJOPL]LK PU Z[HNLZ [OL WYL]PV\ZS` OLSK LX\P[` PU[LYLZ[ PZ YLTLHZ\YLK H[ P[Z ;OLYLZ\S[ZHUKÄUHUJPHSWVZP[PVUVMHSS[OL.YV\WLU[P[PLZUVULVM^OPJOOHZ[OLJ\YYLUJ`VMHO`WLYPUÅH[PVUHY` HJX\PZP[PVUKH[LMHPY]HS\LHUKHU`YLZ\S[PUNNHPUVYSVZZPZYLJVNUPZLKPUWYVÄ[VYSVZZ0[PZ[OLUJVUZPKLYLKPU[OL LJVUVT` [OH[ OH]L H M\UJ[PVUHS J\YYLUJ` KPќLYLU[ MYVT [OL WYLZLU[H[PVU J\YYLUJ` HYL [YHUZSH[LK PU[V [OL KL[LYTPUH[PVUVMNVVK^PSS WYLZLU[H[PVUJ\YYLUJ`HZMVSSV^Z! (U`JVU[PUNLU[JVUZPKLYH[PVU[VIL[YHUZMLYYLKI`[OLHJX\PYLY^PSSILYLJVNUPZLKH[MHPY]HS\LH[[OLHJX\PZP[PVU % HZZL[ZHUKSPHIPSP[PLZMVYLHJOZ[H[LTLU[VMÄUHUJPHSWVZP[PVUWYLZLU[LKHYL[YHUZSH[LKPU[V2LU`H:OPSSPUNZ KH[L*VU[PUNLU[JVUZPKLYH[PVUJSHZZPÄLKHZHUHZZL[VYSPHIPSP[`[OH[PZHÄUHUJPHSPUZ[Y\TLU[HUK^P[OPU[OLZJVWL \ZPUNL_JOHUNLYH[LZWYL]HPSPUNH[[OLLUKVM[OLYLWVY[PUNWLYPVK" VM0-9: -PUHUJPHS0UZ[Y\TLU[Z!9LJVNUP[PVUHUK4LHZ\YLTLU[PZTLHZ\YLKH[MHPY]HS\L^P[OJOHUNLZPUMHPY % PUJVTLHUKL_WLUZLZMVYLHJOZ[H[LTLU[VMWYVÄ[VYSVZZHUKV[OLYJVTWYLOLUZP]LPUJVTLHYL[YHUZSH[LK ]HS\LYLJVNUPZLKPUWYVÄ[VYSVZZPUHJJVYKHUJL^P[O[OL0-9:0M[OLJVU[PUNLU[JVUZPKLYH[PVUPZUV[^P[OPU[OL H[H]LYHNLL_JOHUNLYH[LZ\USLZZ[OPZH]LYHNLPZUV[HYLHZVUHISLHWWYV_PTH[PVUVM[OLJ\T\SH[P]LLќLJ[ ZJVWLVM0-9: P[PZTLHZ\YLKH[LHJOYLWVY[PUNKH[LHUKJOHUNLZPUMHPY]HS\LYLJVNUPZLKPUWYVÄ[VYSVZZ VM[OLYH[LZWYL]HPSPUNVU[OL[YHUZHJ[PVUKH[LZPU^OPJOJHZLPUJVTLHUKL_WLUZLZHYL[YHUZSH[LKH[[OL *VU[PUNLU[JVUZPKLYH[PVU[OH[PZJSHZZPÄLKHZLX\P[`PZUV[YLTLHZ\YLKHUKZ\IZLX\LU[ZL[[SLTLU[PZHJJV\U[LK KH[LZVM[OL[YHUZHJ[PVUZ"HUK MVY^P[OPULX\P[` % HSSYLZ\S[PUNL_JOHUNLKPќLYLUJLZHYLYLJVNUPZLK\UKLYV[OLYJVTWYLOLUZP]LPUJVTLHUKHJJ\T\SH[LKPUH ZLWHYH[LOLHKPUN[YHUZSH[PVUYLZLY]LPU[OLJVUZVSPKH[LKZ[H[LTLU[VMJOHUNLZPULX\P[` .VVK^PSSPZPUP[PHSS`TLHZ\YLKH[JVZ[ILPUN[OLL_JLZZVM[OLHNNYLNH[LVM[OLJVUZPKLYH[PVU[YHUZMLYYLKHUK[OL HTV\U[YLJVNUPZLKMVYUVUJVU[YVSSPUNPU[LYLZ[V]LY[OLUL[PKLU[PÄHISLHZZL[ZHJX\PYLKHUKSPHIPSP[PLZHZZ\TLK >OLUHMVYLPNUVWLYH[PVUPZZVSK[OLJ\T\SH[P]LHTV\U[VM[OLL_JOHUNLKPќLYLUJLZYLSH[PUN[V[OH[MVYLPNU 0M[OLMHPY]HS\LVM[OLUL[HZZL[ZHJX\PYLKPZPUL_JLZZVM[OLHNNYLNH[LJVUZPKLYH[PVU[YHUZMLYYLK[OLNHPUPZ LU[P[`YLJVNUPZLKPUV[OLYJVTWYLOLUZP]LPUJVTLHUKHJJ\T\SH[LKVU[OLZLWHYH[LJVTWVULU[VMLX\P[`PZ 116 YLJVNUPZLKPUWYVÄ[VYSVZZ YLJSHZZPÄLKMYVTLX\P[`[VWYVÄ[VYSVZZ^OLU[OLNHPUVYSVZZVUKPZWVZHSPZYLJVNUPZLK 117 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SIGNIFICANT ACCOUNTING POLICIES (continued) f) Revenue recognition g) Borrowing costs ;OL.YV\WYLJVNUPZLZYL]LU\LMYVT[OLMVSSV^PUNTHQVYZV\YJLZ! )VYYV^PUNJVZ[ZJVUZPZ[VMPU[LYLZ[HUKV[OLYJVZ[Z[OH[HULU[P[`PUJ\YZPUJVUULJ[PVU^P[O[OLIVYYV^PUNVMM\UKZ )VYYV^PUNJVZ[Z[OH[HYLKPYLJ[S`H[[YPI\[HISL[V[OLHJX\PZP[PVUJVUZ[Y\J[PVUVYWYVK\J[PVUVMX\HSPM`PUNHZZL[Z^OPJO % :HSLVMJLTLU[HUKJLTLU[WYVK\J[Z HYLHZZL[Z[OH[ULJLZZHYPS`[HRLHZ\IZ[HU[PHSWLYPVKVM[PTL[VNL[YLHK`MVY[OLPYPU[LUKLK\ZLVYZHSLHYLJHWP[HSPZLK % -YVT[YHUZWVY[ZLY]PJLZ HZWHY[VM[OLJVZ[VM[OVZLHZZL[Z\U[PSZ\JOH[PTLHZ[OLHZZL[ZHYLZ\IZ[HU[PHSS`YLHK`MVY[OLPYPU[LUKLK\ZLVY ZHSL0U]LZ[TLU[PUJVTLLHYULKVU[OL[LTWVYHY`PU]LZ[TLU[VMZWLJPÄJIVYYV^PUNZWLUKPUN[OLPYL_WLUKP[\YLVU ;YHUZWVY[YL]LU\LPZ[OLZ\YJOHYNL[VJ\Z[VTLYI`[OL.YV\WHUK*VTWHU`MVYHYYHUNPUNKLSP]LY`VMJLTLU[HUK X\HSPM`PUNHZZL[ZPZKLK\J[LKMYVT[OLIVYYV^PUNJVZ[ZLSPNPISLMVYJHWP[HSPZH[PVU JLTLU[WYVK\J[Z[V[OLJ\Z[VTLY (SSV[OLYIVYYV^PUNJVZ[ZHYLYLJVNUPZLKPUWYVÄ[VYSVZZPU[OLWLYPVKPU^OPJO[OL`HYLPUJ\YYLK 9L]LU\LPZTLHZ\YLKIHZLKVU[OLJVUZPKLYH[PVU[V^OPJO[OL.YV\WL_WLJ[Z[VILLU[P[SLKPUHJVU[YHJ[^P[OH J\Z[VTLYHUKL_JS\KLZHTV\U[ZJVSSLJ[LKVUILOHSMVM[OPYKWHY[PLZ;OL.YV\WYLJVNUPZLZYL]LU\L^OLUP[[YHUZMLYZ h) Leases JVU[YVSVMHWYVK\J[VYZLY]PJL[VHJ\Z[VTLY Group as a lessee Sale of cement and cement products (.YV\WYLJVNUPaLZYL]LU\L^OLUP[ZH[PZÄLZHWLYMVYTHUJLVISPNH[PVUI`[YHUZMLYYPUNWYVTPZLKNVVKZ[VHJ\Z[VTLY :PUJL1HU\HY` [OL.YV\WHZZLZZLZH[PUJLW[PVUVMHJVU[YHJ[^OL[OLYP[JVU[HPUZHSLHZL\UKLY0-9: HUK ^OPJOPZ^OLU[OLJ\Z[VTLYVI[HPUZJVU[YVSVM[OLNVVKZ;OLHTV\U[VMYL]LU\LYLJVNUPaLKPZ[OLHTV\U[HSSVJH[LK HJJVYKPUNS`YLJVNUPaLZHYPNO[VM\ZLHZZL[HUKHSLHZLSPHIPSP[`PMP[TLL[Z[OLKLÄUP[PVUVMHSLHZL^P[O[OLL_JLW[PVU [V[OLZH[PZÄLKWLYMVYTHUJLVISPNH[PVU(WLYMVYTHUJLVISPNH[PVUPZZH[PZÄLKH[HWVPU[PU[PTLMVYWYVTPZLZ[V[YHUZMLY VMZOVY[[LYTSLHZLZHUKSLHZLZVMSV^]HS\LHZZL[Z NVVKZ[VHJ\Z[VTLY ;OLSLHZLSPHIPSP[`PZTLHZ\YLKH[JVTTLUJLTLU[KH[LH[[OLWYLZLU[]HS\LVM[OLM\[\YLSLHZLWH`TLU[ZKPZJV\U[LK Transport services ^P[O [OL PU[LYLZ[ YH[L PTWSPJP[ PU [OL SLHZL VYPM UV[ YLHKPS` KL[LYTPUHISL ^P[O [OL SLZZLL»ZYLZWLJ[P]L PUJYLTLU[HS (.YV\WYLJVNUPaLZYL]LU\L^OLUP[ZH[PZÄLZHWLYMVYTHUJLVISPNH[PVUI`[YHUZMLYYPUNZLY]PJL[VHJ\Z[VTLY^OPJOPZ IVYYV^PUNYH[L-\[\YLSLHZLWH`TLU[ZPUJS\KLPUZ\IZ[HUJLÄ_LKWH`TLU[Z]HYPHISLSLHZLWH`TLU[ZKLWLUKPUNVU ^OLU[OLJ\Z[VTLYVI[HPUZJVU[YVSVM[OH[ZLY]PJL;OLHTV\U[VMYL]LU\LYLJVNUPaLKPZ[OLHTV\U[HSSVJH[LK[V[OL HUPUKL_VYYH[LHUKWH`TLU[Z\UKLY[LYTPUH[PVUHUKL_[LUZPVUVW[PVUZ^OLU[OLZLHYLYLÅLJ[LKPU[OLSLHZL[LYT ZH[PZÄLKWLYMVYTHUJLVISPNH[PVU(WLYMVYTHUJLVISPNH[PVUPZZH[PZÄLKH[HWVPU[PU[PTL^OLU[OLJ\Z[VTLYVI[HPUZ ;OLSLHZL[LYTJVTWYPZLZ[OLUVUJHUJLSSHISLSLHZL[LYT[VNL[OLY^P[O[OLWLYPVKJV]LYLKI`L_[LUZPVUVW[PVUZPM JVU[YVSVM[OLZLY]PJL HZZLZZLKHZYLHZVUHIS`JLY[HPU[VILL_LYJPZLKHUK[LYTPUH[PVUVW[PVUZPMHZZLZZLKHZYLHZVUHIS`JLY[HPUUV[[VIL L_LYJPZLK5VUSLHZLJVTWVULU[ZPUJVU[YHJ[ZHYLZLWHYH[LKMYVTSLHZLJVTWVULU[ZHUKHJJVYKPUNS`HJJV\U[LKMVY 9L]LU\LPZZOV^UUL[VM]HS\LHKKLK[H_=(;YL[\YUZYLIH[LZHUKKPZJV\U[ZHUKHM[LYLSPTPUH[PUNZHSLZ^P[OPU[OL PUVWLYH[PUNWYVÄ[VUHJVZ[PUJ\YYLKIHZPZ Group. ;OLYPNO[VM\ZLHZZL[PZYLJVNUPaLKH[[OLJVTTLUJLTLU[KH[LH[JVZ[^OPJOPUJS\KLZ[OLHTV\U[VM[OLSLHZL Interest income SPHIPSP[`YLJVNUPaLKHU`SLHZLWH`TLU[ZTHKLH[VYILMVYL[OLJVTTLUJLTLU[KH[LVM[OLSLHZLPUP[PHSKPYLJ[JVZ[Z -VYHSSÄUHUJPHSPUZ[Y\TLU[ZTLHZ\YLKH[HTVY[PZLKJVZ[HUKPU[LYLZ[ILHYPUNÄUHUJPHSHZZL[ZJSHZZPÄLKHZH]HPSHISL PUJ\YYLKHUKHULZ[PTH[LVMJVZ[Z[VILPUJ\YYLKPUKPZTHU[SPUNHUKYLTV]PUN[OL\UKLYS`PUNHZZL[VYYLZ[VYPUN[OL MVYZHSLPU[LYLZ[PUJVTLPZYLJVYKLK\ZPUN[OLLќLJ[P]LPU[LYLZ[YH[L,09,09PZ[OLYH[L[OH[L_HJ[S`KPZJV\U[Z[OL HZZL[[V[OLJVUKP[PVUHNYLLK^P[O[OLSLZZVY Dividends 0U[OLL]LU[[OH[[OL[H_IHZLVMHYPNO[VM\ZLHZZL[PZUV[[OLZHTLHZP[ZJHYY`PUNHTV\U[MVY0-9:W\YWVZLZVUPUP[PHS 9L]LU\L PZ YLJVNUPZLK ^OLU [OL .YV\W»Z YPNO[ [V YLJLP]L [OL WH`TLU[ PZ LZ[HISPZOLK ^OPJO PZ NLULYHSS` ^OLU YLJVNUP[PVUVMHSLHZLJVU[YHJ[[OL.YV\WYLJVNUPaLZ[OLKLMLYYLK[H_PTWHJ[HYPZPUNVU[OL[LTWVYHY`KPќLYLUJL ZOHYLOVSKLYZHWWYV]L[OLKP]PKLUK IL[^LLU[OLJHYY`PUNHTV\U[VM[OLYPNO[VM\ZLHZZL[HUKP[Z[H_IHZL;OLZHTL[YLH[TLU[HZHIV]LHSZVHWWSPLZ[V [OLPUP[PHSYLJVNUP[PVUVM[OLSLHZLSPHIPSP[` Rental income 9LU[HS PUJVTL PZ YLJVNUPZLK ^OLU [OL .YV\W»ZYPNO[ [V YLJLP]L [OL YLU[ WH`TLU[ PZ LZ[HISPZOLK ;OL .YV\W OHZ 7H`TLU[Z[VHJX\PYLSLHZLOVSKPU[LYLZ[ZPUSHUKHYL[YLH[LKHZWYLWHPKVWLYH[PUNSLHZLYLU[HSZHUKHTVY[PZLKV]LY[OL YLZPKLU[PHSI\PSKPUNZHUKZ\ISL[ZZVTLVM[OLT[VP[ZLTWSV`LLZ WLYPVKVM[OLSLHZL;OLHTVY[PZH[PVUPZYLJVNUPZLKHZHUVWLYH[PUNL_WLUZLPUWYVÄ[VYSVZZ Rendering of services Group as a lessor ;OL.YV\W[OYV\NOP[ZZ\IZPKPHY`3HMHYNL,JVZ`Z[LTZ3PTP[LKVWLYH[LZHWYP]H[LWHYRHUKJOHYNLZLU[Y`MLLZ[V [V\YPZ[Z0UJVTLMYVTYLUKLYPUNVMZLY]PJLZPZYLJVNUPaLK^OLU[OL.YV\W[YHUZMLYZJVU[YVSVMHZLY]PJL[VHJ\Z[VTLY 3LHZLZ PU ^OPJO [OL .YV\W KVLZ UV[ [YHUZMLY Z\IZ[HU[PHSS` HSS [OL YPZRZ HUK ILULÄ[Z VM V^ULYZOPW VM HU HZZL[ HYL JSHZZPÄLKHZVWLYH[PUNSLHZLZ0UP[PHSKPYLJ[JVZ[ZPUJ\YYLKPUULNV[PH[PUNHUVWLYH[PUNSLHZLHYLHKKLK[V[OLJHYY`PUN Rebates HTV\U[VM[OLSLHZLKHZZL[HUKYLJVNUPZLKV]LY[OLSLHZL[LYTVU[OLZHTLIHZPZHZYLU[HSPUJVTL*VU[PUNLU[YLU[Z 9LIH[LZHYLNP]LU[V[OLJ\Z[VTLYZ^OVTLL[JVUKP[PVUZL[I`[OL.YV\WHUK[OL*VTWHU`WVSPJ`(SSYLIH[LZHYL HYLYLJVNUPZLKHZYL]LU\LPU[OLWLYPVKPU^OPJO[OL`HYLLHYULK WHPKPUMVYTVMJYLKP[UV[LZHUK[OLJ\Z[VTLYJVSSLJ[ZJLTLU[VMLX\P]HSLU[]HS\L9LIH[LZHYLJHSJ\SH[LKIHZLKVU [VUZVYWLYJLU[HNL]VS\TLKLWLUKPUNVU[OLZPNULKHNYLLTLU[ *\YYLU[S`[OL.YV\WOHZSLHZLKV\[YLZPKLU[PHSOV\ZLZHUKSHUK[VLTWSV`LLZHUK[OPYKWHY[PLZ:LLUV[L VUYLU[HS PUJVTLMYVTYLZPKLU[PHSWYVWLY[`MVYTVYLKL[HPSZ 118 119 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) i) Property, plant and equipment j) Intangible assets (SSWYVWLY[`WSHU[HUKLX\PWTLU[HYLPUP[PHSS`YLJVYKLKH[JVZ[-YLLOVSKSHUKHUKI\PSKPUNZHYLZ\IZLX\LU[S`ZOV^UH[ *VTW\[LYZVM[^HYLJVZ[ZHYLZ[H[LKH[JVZ[SLZZHJJ\T\SH[LKHTVY[PZH[PVUHUKHU`HJJ\T\SH[LKPTWHPYTLU[SVZZLZ [OLPYYL]HS\LKHTV\U[ZIHZLKVU]HS\H[PVUZI`L_[LYUHSPUKLWLUKLU[]HS\LYZSLZZHJJ\T\SH[LKKLWYLJPH[PVUHUKHU` ;OLJVZ[ZHYLHTVY[PZLKV]LY[OLL_WLJ[LK\ZLM\SSP]LZVM[OLZVM[^HYLVU[OLZ[YHPNO[SPULIHZPZ*\YYLU[S`[OL HJJ\T\SH[LKPTWHPYTLU[SVZZLZ7SHU[HUKTHJOPULY`PZYL]HS\LKPU[LYUHSS`VU[OLIHZPZVMH]HS\H[PVUTVKLSWYLZJYPILK LZ[PTH[LK\ZLM\SSPMLPZÄ]L`LHYZ I`LUNPULLYZHUKJVUZ\S[HU[ZH[[OL[LJOUPJHSJLU[YLVM[OL\S[PTH[LZOHYLOVSKLY;OL]HS\H[PVUZHYLJHYYPLKV\[VUJL L]LY`Ä]L`LHYZ *VTW\[LYZVM[^HYLPZHSZVHZZLZZLKMVYPTWHPYTLU[^OLUL]LY[OLYLPZHUPUKPJH[PVU[OH[[OLPU[HUNPISLHZZL[TH`IL PTWHPYLK(KKP[PVUHSKPZJSVZ\YLZVUPTWHPYTLU[HYLPUJS\KLKPU5V[LZWHUK[V[OLÄUHUJPHSZ[H[LTLU[Z (SS V[OLY WYVWLY[` HUK LX\PWTLU[ HYL Z[H[LK H[ OPZ[VYPJHS JVZ[ SLZZ HJJ\T\SH[LK KLWYLJPH[PVU HUK HJJ\T\SH[LK PTWHPYTLU[SVZZLZPMHU` ;OL\ZLM\SSP]LZVMJVTW\[LYZVM[^HYLHYLYL]PL^LKH[SLHZ[H[[OLLUKVMLHJOYLWVY[PUNWLYPVK*OHUNLZPU[OL L_WLJ[LK\ZLM\SSP]LZHYLJVUZPKLYLK[VTVKPM`[OLHTVY[PZH[PVUWLYPVKHUKHYL[YLH[LKHZJOHUNLZPUHJJV\U[PUN (YL]HS\H[PVUZ\YWS\ZPZYLJVYKLKPUV[OLYJVTWYLOLUZP]LPUJVTLHUKJYLKP[LK[V[OLHZZL[YL]HS\H[PVUYLZLY]LPULX\P[` LZ[PTH[LZ;OLHTVY[PZH[PVUL_WLUZLVUJVTW\[LYZVM[^HYLPZYLJVNUPZLKPUWYVÄ[VYSVZZ /V^L]LY[V[OLL_[LU[[OH[P[YL]LYZLZHYL]HS\H[PVUKLÄJP[VM[OLZHTLHZZL[WYL]PV\ZS`YLJVNUPZLKPUWYVÄ[VYSVZZ[OL PUJYLHZLPZYLJVNUPZLKPUWYVÄ[HUKSVZZ(YL]HS\H[PVUKLÄJP[PZYLJVNUPZLKPUWYVÄ[VYSVZZL_JLW[[V[OLL_[LU[[OH[P[ (U PU[HUNPISL HZZL[ PZ KLYLJVNUPZLK ^OLU UV M\[\YL LJVUVTPJ ILULÄ[Z HYL L_WLJ[LK MYVT P[Z \ZL ;OL .YV\W»Z VќZL[ZHUL_PZ[PUNZ\YWS\ZVU[OLZHTLHZZL[YLJVNUPZLKPU[OLHZZL[YL]HS\H[PVU PU[HUNPISLHZZL[ZHYLTHPUS`JVTW\[LYZVM[^HYL^OPJOPZUV[L_WLJ[LK[VNLULYH[LHU`KPZWVZHSWYVJLLKZVUKL YLJVNUP[PVU;OLKLYLJVNUP[PVUVMPU[HUNPISLHZZL[Z^V\SK[OLYLMVYLYLZ\S[PUHSVZZ^OPJOPZYLJVNUPZLKPUWYVÄ[VY ,HJO`LHY[OLKPќLYLUJLIL[^LLUKLWYLJPH[PVUIHZLKVU[OLYL]HS\LKJHYY`PUNHTV\U[VMHUHZZL[[OLKLWYLJPH[PVU SVZZ JOHYNLK[VWYVÄ[VYSVZZHUKKLWYLJPH[PVUIHZLKVU[OLHZZL[»ZVYPNPUHSJVZ[PZ[YHUZMLYYLKMYVT[OLHZZL[YL]HS\H[PVU YLZLY]L[VYL[HPULKLHYUPUNZ k) Inventories +LWYLJPH[PVU PZ JHSJ\SH[LK VU [OL Z[YHPNO[ SPUL IHZPZ [V ^YP[L KV^U [OL JVZ[ VM LHJO P[LT VM WYVWLY[` WSHU[ HUK 0U]LU[VYPLZHYL]HS\LKH[[OLSV^LYVMJVZ[HUKUL[YLHSPZHISL]HS\L LX\PWTLU[VY[OLYL]HS\LKHTV\U[[VP[ZYLZPK\HS]HS\LV]LYP[ZL_WLJ[LK\ZLM\SSPMLHZMVSSV^Z! 0U]LU[VYPLZVMJVUZ\THISLZHUKZWHYLWHY[ZHYLZ[H[LKH[[OLSV^LYVMJVZ[HUKUL[YLHSPZHISL]HS\L;OLJVZ[VM 3HUKHUKTPULYHSYLZLY]LZ 5V[KLWYLJPH[LK JVUZ\THISLZHUKZWHYLWHY[ZPZ[OL^LPNO[LKH]LYHNLJVZ[SLZZWYV]PZPVUMVYVIZVSL[LHUKZSV^TV]PUNP[LTZ )\PSKPUNZHUK0UZ[HSSH[PVUZ `LHYZ /LH]`THJOPULZHUKPUZ[HSSH[PVUZ `LHYZ (SS V[OLY PU]LU[VYPLZ HYL Z[H[LK H[ [OL SV^LY VM JVZ[ HUK UL[ YLHSPZHISL ]HS\L ;OL JVZ[ PUJS\KLZ KPYLJ[ JVZ[ HUK 6[OLYTHJOPULZ `LHYZ HWWYVWYPH[LV]LYOLHKZHUKPZKL[LYTPULKVU[OLÄYZ[PUÄYZ[V\[TL[OVK -\YUP[\YL]LOPJSLZHUK[VVSZ `LHYZ 5L[YLHSPZHISL]HS\LVMPU]LU[VYPLZPZ[OLLZ[PTH[LKZLSSPUNWYPJLVM[OLPU]LU[VYPLZPU[OLVYKPUHY`JV\YZLVM[OL.YV\W»Z -\Y[OLYKL[HPSZVU\ZLM\SSP]LZHUKYLZPK\HS]HS\LZVMWYVWLY[`WSHU[HUKLX\PWTLU[HYLNP]LUPU5V[L[V[OL I\ZPULZZSLZZ[OLLZ[PTH[LKJVZ[ZVMJVTWSL[PVUHUK[OLLZ[PTH[LKJVZ[ZULJLZZHY`[VTHRL[OLZHSL ÄUHUJPHSZ[H[LTLU[Z l) Tax -YLLOVSKSHUKPZUV[KLWYLJPH[LKHZP[PZKLLTLK[VOH]LHUPUKLÄUP[L\ZLM\SSPMLHUKPZ[LZ[LKMVYPTWHPYTLU[VUHU HUU\HSIHZPZ Current income tax >OLYL[OLJHYY`PUNHTV\U[VMHUHZZL[PZNYLH[LY[OHUP[ZLZ[PTH[LKYLJV]LYHISLHTV\U[P[PZ^YP[[LUKV^UPTTLKPH[LS` *\YYLU[PUJVTL[H_HZZL[ZHUKSPHIPSP[PLZMVY[OLJ\YYLU[WLYPVKHYLTLHZ\YLKH[[OLHTV\U[L_WLJ[LK[VILYLJV]LYLK [VP[ZYLJV]LYHISLHTV\U[(KKP[PVUHSKPZJSVZ\YLZVUPTWHPYTLU[HYLPU5V[LZWHUK[V[OLÄUHUJPHSZ[H[LTLU[Z MYVTVYWHPK[V[OL[H_H[PVUH\[OVYP[PLZ*\YYLU[PUJVTL[H_PZWYV]PKLKVU[OLIHZPZVM[OLYLZ\S[ZMVY[OL`LHYHZ ZOV^UPU[OLÄUHUJPHSZ[H[LTLU[ZHKQ\Z[LKPUHJJVYKHUJL^P[O[H_SLNPZSH[PVU;OL[H_YH[LZHUK[H_SH^Z\ZLK[V (UP[LTVMWYVWLY[`WSHU[HUKLX\PWTLU[HUKHU`ZPNUPÄJHU[WHY[PUP[PHSS`YLJVNUPZLKPZKLYLJVNUPZLK\WVUKPZWVZHS JVTW\[L[OLHTV\U[HYL[OVZL[OH[HYLLUHJ[LKVYZ\IZ[HU[P]LS`LUHJ[LKH[[OLYLWVY[PUNKH[LPU[OLJV\U[YPLZ^OLYL VY^OLUUVM\[\YLLJVUVTPJILULÄ[ZHYLL_WLJ[LKMYVTP[Z\ZLVYKPZWVZHS(U`NHPUVYSVZZHYPZPUNVUKLYLJVNUP[PVU [OL.YV\WVWLYH[LZHUKNLULYH[LZ[H_HISLPUJVTL [OYV\NOKPZWVZHSVYYL[PYLTLU[VM[OLHZZL[JHSJ\SH[LKHZ[OLKPќLYLUJLIL[^LLU[OLUL[KPZWVZHSWYVJLLKZHUK[OL JHYY`PUNHTV\U[VM[OLHZZL[PZPUJS\KLKPUWYVÄ[VYSVZZPU[OL`LHYPU^OPJO[OLHZZL[PZKLYLJVNUPZLK *\YYLU[PUJVTL[H_YLSH[PUN[VP[LTZYLJVNUPZLKV\[ZPKLWYVÄ[VYSVZZPZYLJVNUPZLKKPYLJ[S`PUV[OLYJVTWYLOLUZP]L PUJVTLVYLX\P[`HUKUV[PUWYVÄ[VYSVZZ4HUHNLTLU[WLYPVKPJHSS`L]HS\H[LZWVZP[PVUZ[HRLUPU[OL[H_YL[\YUZ^P[O ;OL3PTLZ[VULYLZLY]LPZHÄUP[LYLZV\YJLOLUJLHTVY[PZH[PVUPZIHZLKVUX\HU[P[`VMSPTLZ[VULTPULK;OLHTVY[PZH[PVU YLZWLJ[[VZP[\H[PVUZPU^OPJOHWWSPJHISL[H_YLN\SH[PVUZHYLZ\IQLJ[[VPU[LYWYL[H[PVUHUKLZ[HISPZOLZWYV]PZPVUZ^OLYL PZHYH[LHUK[OPZPZJVTW\[LKHZHYH[PVVM[OLU\TILYVMSPTLZ[VUL\UP[ZTPULK[V[OL[V[HS]HS\LVMSPTLZ[VUL\UP[Z appropriate. H]HPSHISLK\YPUN[OL`LHY;OL]HS\LVMSPTLZ[VUL\UP[ZK\YPUN[OL`LHYPZHWYVK\J[VM[OLYH[PVVMSPTLZ[VUL\UP[ZTPULK [V[OL[V[HSU\TILYVM\UP[ZH]HPSHISLH[HJX\PZP[PVUKH[LT\S[PWSPLKI`[OL[V[HS]HS\LVM\UP[ZH]HPSHISLHZH[[OH[KH[L Deferred tax ;OLHTVY[PZH[PVUYH[L\ZLKK\YPUN[OL`LHY^HZ:OZ WLY[VUULTPULK +LMLYYLK[H_PZWYV]PKLK\ZPUN[OLSPHIPSP[`TL[OVKMVYHSS[LTWVYHY`KPќLYLUJLZHYPZPUNIL[^LLU[OL[H_IHZLZVM HZZL[ZHUKSPHIPSP[PLZHUK[OLPYJHYY`PUNHTV\U[ZMVYÄUHUJPHSYLWVY[PUNW\YWVZLZH[[OLYLWVY[PUNKH[L ;OLYLZPK\HS]HS\LZ\ZLM\SSP]LZHUKTL[OVKZVMKLWYLJPH[PVUVMWYVWLY[`WSHU[HUKLX\PWTLU[HYLYL]PL^LKH[LHJO ÄUHUJPHS`LHYLUKHUKHKQ\Z[LKWYVZWLJ[P]LS`PMHWWYVWYPH[L +LMLYYLK[H_SPHIPSP[PLZHYLYLJVNUPZLKMVYHSS[H_HISL[LTWVYHY`KPќLYLUJLZL_JLW[! • >OLU[OLKLMLYYLK[H_SPHIPSP[`HYPZLZMYVT[OLPUP[PHSYLJVNUP[PVUVMNVVK^PSSVYHUHZZL[VYSPHIPSP[`PUH[YHUZHJ[PVU [OH[PZUV[HI\ZPULZZJVTIPUH[PVUHUKH[[OL[PTLVM[OL[YHUZHJ[PVUHќLJ[ZULP[OLY[OLHJJV\U[PUNWYVÄ[UVY [H_HISLWYVÄ[VYSVZZ 120 121 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) l) Tax (continued) n) Financial instruments (continued) • 0U YLZWLJ[ VM [H_HISL [LTWVYHY` KPќLYLUJLZ HZZVJPH[LK ^P[O PU]LZ[TLU[Z PU Z\IZPKPHYPLZ HZZVJPH[LZ HUK Financial assets PU[LYLZ[ZPUQVPU[]LU[\YLZ^OLU[OL[PTPUNVM[OLYL]LYZHSVM[OL[LTWVYHY`KPќLYLUJLZJHUILJVU[YVSSLKHUKP[ PZWYVIHISL[OH[[OL[LTWVYHY`KPќLYLUJLZ^PSSUV[YL]LYZLPU[OLMVYLZLLHISLM\[\YL (SSYLN\SHY^H`W\YJOHZLZVYZHSLZVMÄUHUJPHSHZZL[ZHYLYLJVNUPZLKHUKKLYLJVNUPZLKVUH[YHKLKH[LIHZPZ 9LN\SHY^H`W\YJOHZLZVYZHSLZHYLW\YJOHZLZVYZHSLZVMÄUHUJPHSHZZL[Z[OH[YLX\PYLKLSP]LY`VMHZZL[Z^P[OPU[OL +LMLYYLK[H_HZZL[ZHYLYLJVNUPZLKMVYHSSKLK\J[PISL[LTWVYHY`KPќLYLUJLZ[OLJHYY`MVY^HYKVM\U\ZLK[H_JYLKP[Z [PTLMYHTLLZ[HISPZOLKI`YLN\SH[PVUVYJVU]LU[PVUPU[OLTHYRL[WSHJL HUKHU`\U\ZLK[H_SVZZLZ+LMLYYLK[H_HZZL[ZHYLVUS`YLJVNUPZLK[V[OLL_[LU[[OH[P[PZWYVIHISL[OH[M\[\YL[H_HISL (SS YLJVNUPZLK ÄUHUJPHS HZZL[Z HYL TLHZ\YLK Z\IZLX\LU[S` PU [OLPY LU[PYL[` H[ LP[OLY HTVY[PZLK JVZ[ VY MHPY ]HS\L WYVÄ[Z^PSSILH]HPSHISLHNHPUZ[^OPJO[OL[LTWVYHY`KPќLYLUJLZHUK[OLJHYY`MVY^HYKVM\U\ZLK[H_JYLKP[ZHUK KLWLUKPUNVU[OLJSHZZPÄJH[PVUVM[OLÄUHUJPHSHZZL[Z \U\ZLK[H_SVZZLZJHUIL\[PSPZLKL_JLW[! *SHZZPÄJH[PVUVMÄUHUJPHSHZZL[Z • >OLU[OLKLMLYYLK[H_HZZL[YLSH[PUN[V[OLKLK\J[PISL[LTWVYHY`KPќLYLUJLHYPZLZMYVT[OLPUP[PHSYLJVNUP[PVUVM +LI[PUZ[Y\TLU[Z[OH[TLL[[OLMVSSV^PUNJVUKP[PVUZHYLTLHZ\YLKZ\IZLX\LU[S`H[HTVY[PZLKJVZ[! HUHZZL[VYSPHIPSP[`PUH[YHUZHJ[PVU[OH[PZUV[HI\ZPULZZJVTIPUH[PVUHUKH[[OL[PTLVM[OL[YHUZHJ[PVUHќLJ[Z ULP[OLY[OLHJJV\U[PUNWYVÄ[UVY[H_HISLWYVÄ[VYSVZZ • [OLÄUHUJPHSHZZL[PZOLSK^P[OPUHI\ZPULZZTVKLS^OVZLVIQLJ[P]LPZ[VOVSKÄUHUJPHSHZZL[ZPUVYKLY[VJVSSLJ[ • 0UYLZWLJ[VMKLK\J[PISL[LTWVYHY`KPќLYLUJLZHZZVJPH[LK^P[OPU]LZ[TLU[ZPUZ\IZPKPHYPLZHZZVJPH[LZHUK JVU[YHJ[\HSJHZOÅV^Z"HUK PU[LYLZ[ZPUQVPU[]LU[\YLZKLMLYYLK[H_HZZL[ZHYLYLJVNUPZLKVUS`[V[OLL_[LU[[OH[P[PZWYVIHISL[OH[[OL • [OLJVU[YHJ[\HS[LYTZVM[OLÄUHUJPHSHZZL[NP]LYPZLVUZWLJPÄLKKH[LZ[VJHZOÅV^Z[OH[HYLZVSLS`WH`TLU[Z [LTWVYHY`KPќLYLUJLZ^PSSYL]LYZLPU[OLMVYLZLLHISLM\[\YLHUK[H_HISLWYVÄ[^PSSILH]HPSHISLHNHPUZ[^OPJO[OL VMWYPUJPWHSHUKPU[LYLZ[VU[OLWYPUJPWHSHTV\U[V\[Z[HUKPUN. [LTWVYHY`KPќLYLUJLZJHUIL\[PSPZLK +LI[ PUZ[Y\TLU[Z [OH[ TLL[ [OL MVSSV^PUN JVUKP[PVUZ HYL TLHZ\YLK Z\IZLX\LU[S` H[ MHPY ]HS\L [OYV\NO V[OLY ;OLJHYY`PUNHTV\U[VMKLMLYYLK[H_HZZL[ZPZYL]PL^LKH[LHJOYLWVY[PUNKH[LHUKYLK\JLK[V[OLL_[LU[[OH[P[PZUV JVTWYLOLUZP]LPUJVTL-=;6*0! SVUNLYWYVIHISL[OH[Z\ѝJPLU[[H_HISLWYVÄ[^PSSILH]HPSHISL[VHSSV^HSSVYWHY[VM[OLKLMLYYLK[H_HZZL[[VIL\[PSPZLK +LMLYYLK[H_YLSH[PUN[VP[LTZYLJVNUPZLKV\[ZPKLWYVÄ[VYSVZZPZYLJVNUPZLKV\[ZPKLWYVÄ[VYSVZZ+LMLYYLK[H_P[LTZ +LZWP[L[OLMVYLNVPUN[OL.YV\WTH`THRL[OLMVSSV^PUNPYYL]VJHISLLSLJ[PVUKLZPNUH[PVUH[PUP[PHSYLJVNUP[PVUVMH HYLYLJVNUPZLKPUJVYYLSH[PVU[V[OL\UKLYS`PUN[YHUZHJ[PVULP[OLYPUV[OLYJVTWYLOLUZP]LPUJVTLVYKPYLJ[S`PULX\P[` ÄUHUJPHSHZZL[! +LMLYYLK [H_ HZZL[Z HUK KLMLYYLK [H_ SPHIPSP[PLZ HYL VќZL[ VUS` ^OLU [OLYL PZ H SLNHSS` LUMVYJLHISL YPNO[ [V ZL[ Vќ • [OL.YV\WTH`PYYL]VJHIS`LSLJ[[VWYLZLU[Z\IZLX\LU[JOHUNLZPUMHPY]HS\LVMHULX\P[`PU]LZ[TLU[PUV[OLY [OLJ\YYLU[[H_HZZL[ZHNHPUZ[J\YYLU[[H_SPHIPSP[PLZHUK^OLU[OL`YLSH[L[V[OLZHTLLU[P[`HUK[OLZHTL[H_H[PVU JVTWYLOLUZP]LPUJVTLPMJLY[HPUJYP[LYPHHYLTL[ZLLPPPILSV^"HUK H\[OVYP[`HUK[OL.YV\WPU[LUKZ[VZL[[SL[OL[H_HZZL[ZHUK[OL[H_SPHIPSP[PLZVUHUL[IHZPZ • ;OL.YV\WTH`PYYL]VJHIS`KLZPNUH[LHKLI[PU]LZ[TLU[[OH[TLL[Z[OLHTVY[PZLKJVZ[VY-=;6*0JYP[LYPHHZ TLHZ\YLKH[-=;73PMKVPUNZVLSPTPUH[LZVYZPNUPÄJHU[S`YLK\JLZHUHJJV\U[PUNTPZTH[JOZLLP]ILSV^ m) Dividends payable P (TVY[PZLKJVZ[HUKLќLJ[P]LPU[LYLZ[TL[OVK +P]PKLUKZWH`HISLVUVYKPUHY`ZOHYLZHYLJOHYNLK[VYL[HPULKLHYUPUNZPU[OLWLYPVKPU^OPJO[OL`HYLKLJSHYLK 7YVWVZLKKP]PKLUKZHYLUV[HJJY\LKMVY\U[PSYH[PÄLKPUHU(UU\HS.LULYHS4LL[PUN ;OLLќLJ[P]LPU[LYLZ[TL[OVKPZHTL[OVKVMJHSJ\SH[PUN[OLHTVY[PZLKJVZ[VMHKLI[PUZ[Y\TLU[HUKVMHSSVJH[PUN PU[LYLZ[PUJVTLV]LY[OLYLSL]HU[WLYPVK n) Financial instruments -VYÄUHUJPHSHZZL[ZV[OLY[OHUW\YJOHZLKVYVYPNPUH[LKJYLKP[PTWHPYLKÄUHUJPHSHZZL[ZPLHZZL[Z[OH[HYLJYLKP[ -PUHUJPHSHZZL[ZHUKÄUHUJPHSSPHIPSP[PLZHYLYLJVNUPZLKPU[OL.YV\W»ZZ[H[LTLU[VMÄUHUJPHSWVZP[PVU^OLU[OL.YV\W PTWHPYLKVUPUP[PHSYLJVNUP[PVU[OLLќLJ[P]LPU[LYLZ[YH[LPZ[OLYH[L[OH[L_HJ[S`KPZJV\U[ZLZ[PTH[LKM\[\YLJHZO ILJVTLZHWHY[`[V[OLJVU[YHJ[\HSWYV]PZPVUZVM[OLPUZ[Y\TLU[ YLJLPW[ZPUJS\KPUNHSSMLLZHUKWVPU[ZWHPKVYYLJLP]LK[OH[MVYTHUPU[LNYHSWHY[VM[OLLќLJ[P]LPU[LYLZ[YH[L [YHUZHJ[PVUJVZ[ZHUKV[OLYWYLTP\TZVYKPZJV\U[ZL_JS\KPUNL_WLJ[LKJYLKP[SVZZLZ[OYV\NO[OLL_WLJ[LK -PUHUJPHSHZZL[ZHUKÄUHUJPHSSPHIPSP[PLZHYLPUP[PHSS`TLHZ\YLKH[MHPY]HS\L;YHUZHJ[PVUJVZ[Z[OH[HYLKPYLJ[S`H[[YPI\[HISL SPMLVM[OLKLI[PUZ[Y\TLU[VY^OLYLHWWYVWYPH[LHZOVY[LYWLYPVK[V[OLNYVZZJHYY`PUNHTV\U[VM[OLKLI[ [V[OLHJX\PZP[PVUVYPZZ\LVMÄUHUJPHSHZZL[ZHUKÄUHUJPHSSPHIPSP[PLZV[OLY[OHUÄUHUJPHSHZZL[ZHUKÄUHUJPHSSPHIPSP[PLZ PUZ[Y\TLU[VUPUP[PHSYLJVNUP[PVU-VYW\YJOHZLKVYVYPNPUH[LKJYLKP[PTWHPYLKÄUHUJPHSHZZL[ZHJYLKP[HKQ\Z[LK H[MHPY]HS\L[OYV\NOWYVÄ[VYSVZZHYLHKKLK[VVYKLK\J[LKMYVT[OLMHPY]HS\LVM[OLÄUHUJPHSHZZL[ZVYÄUHUJPHS LќLJ[P]LPU[LYLZ[YH[LPZJHSJ\SH[LKI`KPZJV\U[PUN[OLLZ[PTH[LKM\[\YLJHZOÅV^ZPUJS\KPUNL_WLJ[LKJYLKP[ SPHIPSP[PLZHZHWWYVWYPH[LVUPUP[PHSYLJVNUP[PVU;YHUZHJ[PVUJVZ[ZKPYLJ[S`H[[YPI\[HISL[V[OLHJX\PZP[PVUVMÄUHUJPHS SVZZLZ[V[OLHTVY[PZLKJVZ[VM[OLKLI[PUZ[Y\TLU[VUPUP[PHSYLJVNUP[PVU HZZL[ZVYÄUHUJPHSSPHIPSP[PLZH[MHPY]HS\L[OYV\NOWYVÄ[VYSVZZHYLYLJVNUPZLKPTTLKPH[LS`PUWYVÄ[VYSVZZ 122 123 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) n) Financial instruments(continued) n) Financial instruments(continued) P (TVY[PZLKJVZ[HUKLќLJ[P]LPU[LYLZ[TL[OVK*VU[PU\LK Foreign exchange gains and losses ;OLHTVY[PZLKJVZ[VMHÄUHUJPHSHZZL[PZ[OLHTV\U[H[^OPJO[OLÄUHUJPHSHZZL[PZTLHZ\YLKH[PUP[PHSYLJVNUP[PVU ;OLJHYY`PUNHTV\U[VMÄUHUJPHSHZZL[Z[OH[HYLKLUVTPUH[LKPUHMVYLPNUJ\YYLUJ`PZKL[LYTPULKPU[OH[MVYLPNU TPU\Z[OLWYPUJPWHSYLWH`TLU[ZWS\Z[OLJ\T\SH[P]LHTVY[PZH[PVU\ZPUN[OLLќLJ[P]LPU[LYLZ[TL[OVKVMHU` J\YYLUJ`HUK[YHUZSH[LKH[[OLZWV[YH[LH[[OLLUKVMLHJOYLWVY[PUNWLYPVK:WLJPÄJHSS`" KPќLYLUJLIL[^LLU[OH[PUP[PHSHTV\U[HUK[OLTH[\YP[`HTV\U[HKQ\Z[LKMVYHU`SVZZHSSV^HUJL;OLNYVZZ JHYY`PUNHTV\U[VMHÄUHUJPHSHZZL[PZ[OLHTVY[PZLKJVZ[VMHÄUHUJPHSHZZL[ILMVYLHKQ\Z[PUNMVYHU`SVZZ • MVY ÄUHUJPHS HZZL[Z TLHZ\YLK H[ HTVY[PZLK JVZ[ [OH[ HYL UV[ WHY[ VM H KLZPNUH[LK OLKNPUN YLSH[PVUZOPW HSSV^HUJL L_JOHUNLKPќLYLUJLZHYLYLJVNUPZLKPUWYVÄ[VYSVZZPU[OLºV[OLYNHPUZHUKSVZZLZ»SPULP[LT" • MVYLX\P[`PUZ[Y\TLU[ZTLHZ\YLKH[-=;6*0L_JOHUNLKPќLYLUJLZHYLYLJVNUPZLKPUV[OLYJVTWYLOLUZP]L 0U[LYLZ[PUJVTLPZYLJVNUPZLK\ZPUN[OLLќLJ[P]LPU[LYLZ[TL[OVKMVYKLI[PUZ[Y\TLU[ZTLHZ\YLKZ\IZLX\LU[S` PUJVTLPU[OLPU]LZ[TLU[ZYL]HS\H[PVUYLZLY]L H[ HTVY[PZLK JVZ[ HUK H[ -=;6*0 -VY ÄUHUJPHS HZZL[Z V[OLY [OHU W\YJOHZLK VY VYPNPUH[LK JYLKP[ PTWHPYLK ÄUHUJPHSHZZL[ZPU[LYLZ[PUJVTLPZJHSJ\SH[LKI`HWWS`PUN[OLLќLJ[P]LPU[LYLZ[YH[L[V[OLNYVZZJHYY`PUNHTV\U[ 0TWHPYTLU[VMÄUHUJPHSHZZL[Z VMHÄUHUJPHSHZZL[L_JLW[MVYÄUHUJPHSHZZL[Z[OH[OH]LZ\IZLX\LU[S`ILJVTLJYLKP[PTWHPYLKZLLILSV^ -VYÄUHUJPHSHZZL[Z[OH[OH]LZ\IZLX\LU[S`ILJVTLJYLKP[PTWHPYLKPU[LYLZ[PUJVTLPZYLJVNUPZLKI`HWWS`PUN ;OL.YV\WYLJVNUPZLZHSVZZHSSV^HUJLMVYL_WLJ[LKJYLKP[SVZZLZVUPU]LZ[TLU[ZPUKLI[PUZ[Y\TLU[Z[OH[HYL [OLLќLJ[P]LPU[LYLZ[YH[L[V[OLHTVY[PZLKJVZ[VM[OLÄUHUJPHSHZZL[0MPUZ\IZLX\LU[YLWVY[PUNWLYPVKZ[OL TLHZ\YLKH[HTVY[PZLKJVZ[VYH[-=;6*0[YHKLHUKV[OLYYLJLP]HISLZ;OLHTV\U[VML_WLJ[LKJYLKP[SVZZLZPZ JYLKP[YPZRVU[OLJYLKP[PTWHPYLKÄUHUJPHSPUZ[Y\TLU[PTWYV]LZZV[OH[[OLÄUHUJPHSHZZL[PZUVSVUNLYJYLKP[ \WKH[LKH[LHJOYLWVY[PUNKH[L[VYLÅLJ[JOHUNLZPUJYLKP[YPZRZPUJLPUP[PHSYLJVNUP[PVUVM[OLYLZWLJ[P]LÄUHUJPHS PTWHPYLKPU[LYLZ[PUJVTLPZYLJVNUPZLKI`HWWS`PUN[OLLќLJ[P]LPU[LYLZ[YH[L[V[OLNYVZZJHYY`PUNHTV\U[VM PUZ[Y\TLU[ [OLÄUHUJPHSHZZL[ ;OL .YV\W HS^H`Z YLJVNUPZLZ SPML[PTL ,*3 MVY [YHKL YLJLP]HISLZ HUK V[OLY YLJLP]HISLZ ;OL L_WLJ[LK JYLKP[ -VYW\YJOHZLKVYVYPNPUH[LKJYLKP[PTWHPYLKÄUHUJPHSHZZL[Z[OL.YV\WYLJVNUPZLZPU[LYLZ[PUJVTLI`HWWS`PUN SVZZLZVU[OLZLÄUHUJPHSHZZL[ZHYLLZ[PTH[LK\ZPUNHWYV]PZPVUTH[YP_IHZLKVU[OL.YV\W»ZOPZ[VYPJHSJYLKP[SVZZ [OLJYLKP[HKQ\Z[LKLќLJ[P]LPU[LYLZ[YH[L[V[OLHTVY[PZLKJVZ[VM[OLÄUHUJPHSHZZL[MYVTPUP[PHSYLJVNUP[PVU L_WLYPLUJLHKQ\Z[LKMVYMHJ[VYZ[OH[HYLZWLJPÄJ[V[OLKLI[VYZNLULYHSLJVUVTPJJVUKP[PVUZHUKHUHZZLZZTLU[ VMIV[O[OLJ\YYLU[HZ^LSSHZ[OLMVYLJHZ[KPYLJ[PVUVMJVUKP[PVUZH[[OLYLWVY[PUNKH[LPUJS\KPUN[PTL]HS\LVM ;OLJHSJ\SH[PVUKVLZUV[YL]LY[[V[OLNYVZZIHZPZL]LUPM[OLJYLKP[YPZRVM[OLÄUHUJPHSHZZL[Z\IZLX\LU[S` TVUL`^OLYLHWWYVWYPH[L PTWYV]LZZV[OH[[OLÄUHUJPHSHZZL[PZUVSVUNLYJYLKP[PTWHPYLK -VYHSSV[OLYÄUHUJPHSPUZ[Y\TLU[Z[OL.YV\WYLJVNUPZLZSPML[PTL,*3^OLU[OLYLOHZILLUHZPNUPÄJHU[PUJYLHZL 0U[LYLZ[PUJVTLPZYLJVNUPZLKPUWYVÄ[VYSVZZHUKPZPUJS\KLKPU[OL¸ÄUHUJLPUJVTL¶PU[LYLZ[PUJVTL¹SPULP[LT PUJYLKP[YPZRZPUJLPUP[PHSYLJVNUP[PVU PP ,X\P[`PUZ[Y\TLU[ZKLZPNUH[LKHZH[-=;6*0 3PML[PTL ,*3 YLWYLZLU[Z [OL L_WLJ[LK JYLKP[ SVZZLZ [OH[ ^PSS YLZ\S[ MYVT HSS WVZZPISL KLMH\S[ L]LU[Z V]LY [OL L_WLJ[LKSPMLVMHÄUHUJPHSPUZ[Y\TLU[ 6U PUP[PHS YLJVNUP[PVU [OL .YV\W TH` THRL HU PYYL]VJHISL LSLJ[PVU VU HU PUZ[Y\TLU[ I` PUZ[Y\TLU[ IHZPZ [VKLZPNUH[LPU]LZ[TLU[ZPULX\P[`PUZ[Y\TLU[ZHZH[-=;6*0+LZPNUH[PVUH[-=;6*0PZUV[WLYTP[[LKPM[OL P :PNUPÄJHU[PUJYLHZLPUJYLKP[YPZR LX\P[`PU]LZ[TLU[PZOLSKMVY[YHKPUNVYPMP[PZJVU[PUNLU[JVUZPKLYH[PVUYLJVNUPZLKI`HUHJX\PYLYPUHI\ZPULZZ combination. 0U HZZLZZPUN ^OL[OLY [OL JYLKP[ YPZR VU H ÄUHUJPHS PUZ[Y\TLU[ OHZ PUJYLHZLK ZPNUPÄJHU[S` ZPUJL PUP[PHS YLJVNUP[PVU[OL.YV\WJVTWHYLZ[OLYPZRVMHKLMH\S[VJJ\YYPUNVU[OLÄUHUJPHSPUZ[Y\TLU[H[[OLYLWVY[PUN (ÄUHUJPHSHZZL[PZOLSKMVY[YHKPUNPM! KH[L^P[O[OLYPZRVMHKLMH\S[VJJ\YYPUNVU[OLÄUHUJPHSPUZ[Y\TLU[H[[OLKH[LVMPUP[PHSYLJVNUP[PVU0UTHRPUN [OPZHZZLZZTLU[[OL.YV\WJVUZPKLYZIV[OX\HU[P[H[P]LHUKX\HSP[H[P]LPUMVYTH[PVU[OH[PZYLHZVUHISLHUK • P[OHZILLUHJX\PYLKWYPUJPWHSS`MVY[OLW\YWVZLVMZLSSPUNP[PU[OLULHY[LYT"VY Z\WWVY[HISLPUJS\KPUNOPZ[VYPJHSL_WLYPLUJLHUKMVY^HYKSVVRPUNPUMVYTH[PVU[OH[PZH]HPSHISL^P[OV\[\UK\L • VU PUP[PHS YLJVNUP[PVU P[ PZ WHY[ VM H WVY[MVSPV VM PKLU[PÄLK ÄUHUJPHS PUZ[Y\TLU[Z [OH[ [OL .YV\W THUHNLZ JVZ[ VY LќVY[ -VY^HYK SVVRPUN PUMVYTH[PVU JVUZPKLYLK PUJS\KLZ [OL M\[\YL WYVZWLJ[Z VM [OL PUK\Z[YPLZ PU [VNL[OLYHUKOHZL]PKLUJLVMHYLJLU[HJ[\HSWH[[LYUVMZOVY[[LYTWYVÄ[[HRPUN"VY ^OPJO[OL.YV\W»ZKLI[VYZVWLYH[LVI[HPULKMYVTLJVUVTPJL_WLY[YLWVY[ZÄUHUJPHSHUHS`Z[ZNV]LYUTLU[HS • P[PZHKLYP]H[P]LL_JLW[MVYHKLYP]H[P]L[OH[PZHÄUHUJPHSN\HYHU[LLJVU[YHJ[VYHKLZPNUH[LKHUKLќLJ[P]L IVKPLZYLSL]HU[[OPUR[HURZHUKV[OLYZPTPSHYVYNHUPZH[PVUZHZ^LSSHZJVUZPKLYH[PVUVM]HYPV\ZL_[LYUHS OLKNPUNPUZ[Y\TLU[ ZV\YJLZVMHJ[\HSHUKMVYLJHZ[LJVUVTPJPUMVYTH[PVU[OH[YLSH[L[V[OL.YV\W»ZJVYLVWLYH[PVUZ 0U]LZ[TLU[ZPULX\P[`PUZ[Y\TLU[ZH[-=;6*0HYLPUP[PHSS`TLHZ\YLKH[MHPY]HS\LWS\Z[YHUZHJ[PVUJVZ[Z 0UWHY[PJ\SHY[OLMVSSV^PUNPUMVYTH[PVUPZ[HRLUPU[VHJJV\U[^OLUHZZLZZPUN^OL[OLYJYLKP[YPZROHZPUJYLHZLK :\IZLX\LU[S`[OL`HYLTLHZ\YLKH[MHPY]HS\L^P[ONHPUZHUKSVZZLZHYPZPUNMYVTJOHUNLZPUMHPY]HS\LYLJVNUPZLK ZPNUPÄJHU[S`ZPUJLPUP[PHSYLJVNUP[PVU! PUV[OLYJVTWYLOLUZP]LPUJVTLHUKHJJ\T\SH[LKPU[OLPU]LZ[TLU[ZYL]HS\H[PVUYLZLY]L;OLJ\T\SH[P]LNHPU VYSVZZPZUV[ILYLJSHZZPÄLK[VWYVÄ[VYSVZZVUKPZWVZHSVM[OLLX\P[`PU]LZ[TLU[ZPUZ[LHKP[PZ[YHUZMLYYLK[V • HUHJ[\HSVYL_WLJ[LKZPNUPÄJHU[KL[LYPVYH[PVUPU[OLÄUHUJPHSPUZ[Y\TLU[»ZL_[LYUHSPMH]HPSHISLVYPU[LYUHS YL[HPULKLHYUPUNZ JYLKP[YH[PUN" • ZPNUPÄJHU[KL[LYPVYH[PVUPUL_[LYUHSTHYRL[PUKPJH[VYZVMJYLKP[YPZRMVYHWHY[PJ\SHYÄUHUJPHSPUZ[Y\TLU[LNH +P]PKLUKZVU[OLZLPU]LZ[TLU[ZPULX\P[`PUZ[Y\TLU[ZHYLYLJVNUPZLKPUWYVÄ[VYSVZZPUHJJVYKHUJL^P[O0-9: ZPNUPÄJHU[PUJYLHZLPU[OLJYLKP[ZWYLHK[OLJYLKP[KLMH\S[Z^HWWYPJLZMVY[OLKLI[VYVY[OLSLUN[OVM[PTL \USLZZ[OLKP]PKLUKZJSLHYS`YLWYLZLU[HYLJV]LY`VMWHY[VM[OLJVZ[VM[OLPU]LZ[TLU[+P]PKLUKZHYLPUJS\KLK VY[OLL_[LU[[V^OPJO[OLMHPY]HS\LVMHÄUHUJPHSHZZL[OHZILLUSLZZ[OHUP[ZHTVY[PZLKJVZ[" PU[OLºÄUHUJLPUJVTL»SPULP[LTPUWYVÄ[VYSVZZ • L_PZ[PUNVYMVYLJHZ[HK]LYZLJOHUNLZPUI\ZPULZZÄUHUJPHSVYLJVUVTPJJVUKP[PVUZ[OH[HYLL_WLJ[LK[V JH\ZLHZPNUPÄJHU[KLJYLHZLPU[OLKLI[VY»ZHIPSP[`[VTLL[P[ZKLI[VISPNH[PVUZ" ;OL.YV\WOHZKLZPNUH[LKHSSPU]LZ[TLU[ZPULX\P[`PUZ[Y\TLU[Z[OH[HYLUV[OLSKMVY[YHKPUNHZH[-=;6*0VU • HUHJ[\HSVYL_WLJ[LKZPNUPÄJHU[KL[LYPVYH[PVUPU[OLVWLYH[PUNYLZ\S[ZVM[OLKLI[VY" PUP[PHSHWWSPJH[PVUVM0-9: • ZPNUPÄJHU[PUJYLHZLZPUJYLKP[YPZRVUV[OLYÄUHUJPHSPUZ[Y\TLU[ZVM[OLZHTLKLI[VY" 124 125 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) n) Financial instruments(continued) n) Financial instruments(continued) P :PNUPÄJHU[PUJYLHZLPUJYLKP[YPZR*VU[PU\LK PPP *YLKP[PTWHPYLKÄUHUJPHSHZZL[Z • HU HJ[\HS VY L_WLJ[LK ZPNUPÄJHU[ HK]LYZL JOHUNL PU [OL YLN\SH[VY` LJVUVTPJ VY [LJOUVSVNPJHS (ÄUHUJPHSHZZL[PZJYLKP[PTWHPYLK^OLUVULVYTVYLL]LU[Z[OH[OH]LHKL[YPTLU[HSPTWHJ[VU[OLLZ[PTH[LK LU]PYVUTLU[VM[OLKLI[VY[OH[YLZ\S[ZPUHZPNUPÄJHU[KLJYLHZLPU[OLKLI[VY»ZHIPSP[`[VTLL[P[ZKLI[ M\[\YLJHZOÅV^ZVM[OH[ÄUHUJPHSHZZL[OH]LVJJ\YYLK,]PKLUJL[OH[HÄUHUJPHSHZZL[PZJYLKP[PTWHPYLK VISPNH[PVUZ PUJS\KLZVIZLY]HISLKH[HHIV\[[OLMVSSV^PUNL]LU[Z! 0YYLZWLJ[P]LVM[OLV\[JVTLVM[OLHIV]LHZZLZZTLU[[OL.YV\WWYLZ\TLZ[OH[[OLJYLKP[YPZRVUHÄUHUJPHS :PNUPÄJHU[ÄUHUJPHSKPѝJ\S[`VM[OLPZZ\LYVY[OLIVYYV^LY" HZZL[OHZPUJYLHZLKZPNUPÄJHU[S`ZPUJLPUP[PHSYLJVNUP[PVU^OLUJVU[YHJ[\HSWH`TLU[ZHYLTVYL[OHUKH`Z (IYLHJOVMJVU[YHJ[Z\JOHZHKLMH\S[VYWHZ[K\LL]LU[ZLLPPHIV]L" WHZ[K\L\USLZZ[OL.YV\WOHZYLHZVUHISLHUKZ\WWVY[HISLPUMVYTH[PVU[OH[KLTVUZ[YH[LZV[OLY^PZL [OLSLUKLYZVM[OLIVYYV^LYMVYLJVUVTPJVYJVU[YHJ[\HSYLHZVUZYLSH[PUN[V[OLIVYYV^LY»ZÄUHUJPHS KPѝJ\S[` OH]PUN NYHU[LK [V [OL IVYYV^LY H JVUJLZZPVUZ [OH[ [OL SLUKLYZ ^V\SK UV[ V[OLY^PZL +LZWP[L[OLMVYLNVPUN[OL.YV\WHZZ\TLZ[OH[[OLJYLKP[YPZRVUHÄUHUJPHSPUZ[Y\TLU[OHZUV[PUJYLHZLK JVUZPKLY" ZPNUPÄJHU[S`ZPUJLPUP[PHSYLJVNUP[PVUPM[OLÄUHUJPHSPUZ[Y\TLU[PZKL[LYTPULK[VOH]LSV^JYLKP[YPZRH[[OL 0[PZILJVTPUNWYVIHISL[OH[[OLIVYYV^LY^PSSLU[LYIHURY\W[J`VYV[OLYÄUHUJPHSYLVYNHUPZH[PVU"VY YLWVY[PUNKH[L(ÄUHUJPHSPUZ[Y\TLU[PZKL[LYTPULK[VOH]LSV^JYLKP[YPZRPM! ;OLKPZHWWLHYHUJLVMHUHJ[P]LTHYRL[MVY[OH[ÄUHUJPHSHZZL[ILJH\ZLVMÄUHUJPHSKPѝJ\S[PLZ ;OLÄUHUJPHSPUZ[Y\TLU[OHZHSV^YPZRVMKLMH\S[ P] >YP[LVɈWVSPJ` ;OLKLI[VYOHZHZ[YVUNJHWHJP[`[VTLL[P[ZJVU[YHJ[\HSJHZOÅV^VISPNH[PVUZPU[OLULHY[LYTHUK (K]LYZLJOHUNLZPULJVUVTPJHUKI\ZPULZZJVUKP[PVUZPU[OLSVUNLY[LYTTH`I\[^PSSUV[ULJLZZHYPS` ;OL .YV\W ^YP[LZ Vќ H ÄUHUJPHS HZZL[ ^OLU [OLYL PZ PUMVYTH[PVU PUKPJH[PUN [OH[ [OL KLI[VY PZ PU ZL]LYL YLK\JL[OLHIPSP[`VM[OLIVYYV^LY[VM\SÄSP[ZJVU[YHJ[\HSJHZOÅV^VISPNH[PVUZ ÄUHUJPHS KPѝJ\S[` HUK [OLYL PZ UV YLHSPZ[PJ WYVZWLJ[ VM YLJV]LY` LN ^OLU [OL KLI[VY OHZ ILLU WSHJLK \UKLYSPX\PKH[PVUVYOHZLU[LYLKPU[VIHURY\W[J`WYVJLLKPUNZVYPU[OLJHZLVM[YHKLYLJLP]HISLZ^OLU[OL ;OL .YV\W JVUZPKLYZ H ÄUHUJPHS HZZL[ [V OH]L SV^ JYLKP[ YPZR ^OLU [OL HZZL[ OHZ L_[LYUHS JYLKP[ YH[PUN HTV\U[ZHYLV]LY[^V`LHYZWHZ[K\L^OPJOL]LYVJJ\YZZVVULY-PUHUJPHSHZZL[Z^YP[[LUVќTH`Z[PSSIL VMºPU]LZ[TLU[NYHKL»PUHJJVYKHUJL^P[O[OLNSVIHSS`\UKLYZ[VVKKLÄUP[PVUVYPMHUL_[LYUHSYH[PUNPZUV[ Z\IQLJ[[VLUMVYJLTLU[HJ[P]P[PLZ\UKLY[OL.YV\W»ZYLJV]LY`WYVJLK\YLZ[HRPUNPU[VHJJV\U[SLNHSHK]PJL H]HPSHISL[OLHZZL[OHZHUPU[LYUHSYH[PUNVMºWLYMVYTPUN»7LYMVYTPUNTLHUZ[OH[[OLJV\U[LYWHY[`OHZH ^OLYLHWWYVWYPH[L(U`YLJV]LYPLZTHKLHYLYLJVNUPZLKPUWYVÄ[VYSVZZ Z[YVUNÄUHUJPHSWVZP[PVUHUK[OLYLPZUVWHZ[K\LHTV\U[Z (v) Measurement and recognition of expected credit losses -VYÄUHUJPHSN\HYHU[LLJVU[YHJ[Z[OLKH[L[OH[[OL.YV\WILJVTLZHWHY[`[V[OLPYYL]VJHISLJVTTP[TLU[ PZ JVUZPKLYLK [V IL [OL KH[L VM PUP[PHS YLJVNUP[PVU MVY [OL W\YWVZLZ VM HZZLZZPUN [OL ÄUHUJPHS PUZ[Y\TLU[ ;OLTLHZ\YLTLU[VML_WLJ[LKJYLKP[SVZZLZPZHM\UJ[PVUVM[OLWYVIHIPSP[`VMKLMH\S[SVZZNP]LUKLMH\S[PL MVY PTWHPYTLU[ 0U HZZLZZPUN ^OL[OLY [OLYL OHZ ILLU H ZPNUPÄJHU[ PUJYLHZL PU [OL JYLKP[ YPZR ZPUJL PUP[PHS [OLTHNUP[\KLVM[OLSVZZPM[OLYLPZHKLMH\S[HUK[OLL_WVZ\YLH[KLMH\S[;OLHZZLZZTLU[VM[OLWYVIHIPSP[` YLJVNUP[PVUVMHÄUHUJPHSN\HYHU[LLJVU[YHJ[Z[OL.YV\WJVUZPKLYZ[OLJOHUNLZPU[OLYPZR[OH[[OLZWLJPÄLK VMKLMH\S[HUKSVZZNP]LUKLMH\S[PZIHZLKVUOPZ[VYPJHSKH[HHKQ\Z[LKI`MVY^HYKSVVRPUNPUMVYTH[PVUHZ KLI[VY^PSSKLMH\S[VU[OLJVU[YHJ[ KLZJYPILKHIV]L ;OL .YV\W YLN\SHYS` TVUP[VYZ [OL LќLJ[P]LULZZ VM [OL JYP[LYPH \ZLK [V PKLU[PM` ^OL[OLY [OLYL OHZ ILLU H (ZMVY[OLL_WVZ\YLH[KLMH\S[MVYÄUHUJPHSHZZL[Z[OPZPZYLWYLZLU[LKI`[OLHZZL[Z»NYVZZJHYY`PUNHTV\U[ ZPNUPÄJHU[PUJYLHZLPUJYLKP[YPZRHUKYL]PZLZ[OLTHZHWWYVWYPH[L[VLUZ\YL[OH[[OLJYP[LYPHHYLJHWHISLVM H[[OLYLWVY[PUNKH[L"MVYÄUHUJPHSN\HYHU[LLJVU[YHJ[Z[OLL_WVZ\YLPUJS\KLZ[OLHTV\U[KYH^UKV^UHZH[ PKLU[PM`PUNZPNUPÄJHU[PUJYLHZLPUJYLKP[YPZRILMVYL[OLHTV\U[ILJVTLZWHZ[K\L [OLYLWVY[PUNKH[L[VNL[OLY^P[OHU`HKKP[PVUHSHTV\U[ZL_WLJ[LK[VILKYH^UKV^UPU[OLM\[\YLI`KLMH\S[ KH[LKL[LYTPULKIHZLKVUOPZ[VYPJHS[YLUK[OL.YV\W»Z\UKLYZ[HUKPUNVM[OLZWLJPÄJM\[\YLÄUHUJPUNULLKZ PP +LÄUP[PVUVMKLMH\S[ VM[OLKLI[VYZHUKV[OLYYLSL]HU[MVY^HYKSVVRPUNPUMVYTH[PVU ;OL.YV\WJVUZPKLYZ[OLMVSSV^PUNHZJVUZ[P[\[PUNHUL]LU[VMKLMH\S[MVYPU[LYUHSJYLKP[YPZRTHUHNLTLU[ -VYÄUHUJPHSHZZL[Z[OLL_WLJ[LKJYLKP[SVZZPZLZ[PTH[LKHZ[OLKPќLYLUJLIL[^LLUHSSJVU[YHJ[\HSJHZO W\YWVZLZHZOPZ[VYPJHSL_WLYPLUJLPUKPJH[LZ[OH[ÄUHUJPHSHZZL[Z[OH[TLL[LP[OLYVM[OLMVSSV^PUNJYP[LYPHHYL ÅV^Z[OH[HYLK\L[V[OL.YV\WPUHJJVYKHUJL^P[O[OLJVU[YHJ[HUKHSS[OLJHZOÅV^Z[OH[[OL.YV\W generally not recoverable: L_WLJ[Z[VYLJLP]LKPZJV\U[LKH[[OLVYPNPUHSLќLJ[P]LPU[LYLZ[YH[L-VYHSLHZLYLJLP]HISL[OLJHZOÅV^Z \ZLKMVYKL[LYTPUPUN[OLL_WLJ[LKJYLKP[SVZZLZPZJVUZPZ[LU[^P[O[OLJHZOÅV^Z\ZLKPUTLHZ\YPUN[OL • ^OLU[OLYLPZHIYLHJOVMÄUHUJPHSJV]LUHU[ZI`[OLKLI[VY"VY SLHZLYLJLP]HISLPUHJJVYKHUJL^P[O0(: 3LHZLZ • 0UMVYTH[PVUKL]LSVWLKPU[LYUHSS`VYVI[HPULKMYVTL_[LYUHSZV\YJLZPUKPJH[LZ[OH[[OLKLI[VYPZ\USPRLS` [VWH`P[ZJYLKP[VYZPUJS\KPUN[OL.YV\WPUM\SS^P[OV\[[HRPUNPU[VHJJV\U[HU`JVSSH[LYHSOLSKI`[OL -VY H ÄUHUJPHS N\HYHU[LL JVU[YHJ[ HZ [OL .YV\W PZ YLX\PYLK [V THRL WH`TLU[Z VUS` PU [OL L]LU[ VM H Group). KLMH\S[I`[OLKLI[VYPUHJJVYKHUJL^P[O[OL[LYTZVM[OLPUZ[Y\TLU[[OH[PZN\HYHU[LLK[OLL_WLJ[LKSVZZ HSSV^HUJLPZ[OLL_WLJ[LKWH`TLU[Z[VYLPTI\YZL[OLOVSKLYMVYHJYLKP[SVZZ[OH[P[PUJ\YZSLZZHU`HTV\U[Z 0YYLZWLJ[P]LVM[OLHIV]LHUHS`ZPZ[OL.YV\WJVUZPKLYZ[OH[KLMH\S[OHZVJJ\YYLK^OLUHÄUHUJPHSHZZL[PZ [OH[[OL.YV\WL_WLJ[Z[VYLJLP]LMYVT[OLOVSKLY[OLKLI[VYVYHU`V[OLYWHY[` TVYL[OHU KH`ZWHZ[K\L\USLZZ[OL.YV\WOHZYLHZVUHISLHUKZ\WWVY[HISLPUMVYTH[PVU[VKLTVUZ[YH[L 0M[OL.YV\WOHZTLHZ\YLK[OLSVZZHSSV^HUJLMVYHÄUHUJPHSPUZ[Y\TLU[H[HUHTV\U[LX\HS[VSPML[PTL,*3 [OH[HTVYLSHNNPUNKLMH\S[JYP[LYPVUPZTVYLHWWYVWYPH[L PU[OLWYL]PV\ZYLWVY[PUNWLYPVKI\[KL[LYTPULZH[[OLJ\YYLU[YLWVY[PUNKH[L[OH[[OLJVUKP[PVUZMVYSPML[PTL ,*3HYLUVSVUNLYTL[[OL.YV\WTLHZ\YLZ[OLSVZZHSSV^HUJLH[HUHTV\U[LX\HS[VTVU[O,*3H[[OL J\YYLU[YLWVY[PUNKH[LL_JLW[MVYHZZL[ZMVY^OPJOZPTWSPÄLKHWWYVHJO^HZ\ZLK ;OL .YV\W YLJVNUPZLZ HU PTWHPYTLU[ NHPU VY SVZZ PU WYVÄ[ VY SVZZ MVY HSS ÄUHUJPHS PUZ[Y\TLU[Z ^P[O H JVYYLZWVUKPUNHKQ\Z[TLU[[V[OLPYJHYY`PUNHTV\U[[OYV\NOHSVZZHSSV^HUJLHJJV\U[L_JLW[MVYPU]LZ[TLU[Z PU KLI[ PUZ[Y\TLU[Z [OH[ HYL TLHZ\YLK H[ -=;6*0 MVY ^OPJO [OL SVZZ HSSV^HUJL PZ YLJVNUPZLK PU V[OLY JVTWYLOLUZP]LPUJVTLHUKHJJ\T\SH[LKPU[OLPU]LZ[TLU[YL]HS\H[PVUYLZLY]LHUKKVLZUV[YLK\JL[OL JHYY`PUNHTV\U[VM[OLÄUHUJPHSHZZL[PU[OLZ[H[LTLU[VMÄUHUJPHSWVZP[PVU 126 127 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) n) Financial instruments(continued) V 0TWHPYTLU[VMUVUÄUHUJPHSHZZL[Z +LYLJVNUP[PVUVMÄUHUJPHSHZZL[Z ;OL.YV\WHZZLZZLZH[LHJOYLWVY[PUNKH[L^OL[OLY[OLYLPZHUPUKPJH[PVU[OH[HUHZZL[TH`ILPTWHPYLK0MHU` PUKPJH[PVUL_PZ[ZVY^OLUHUU\HSPTWHPYTLU[[LZ[PUNMVYHUHZZL[PZYLX\PYLK[OL.YV\WLZ[PTH[LZ[OLHZZL[»Z ;OL .YV\W KLYLJVNUPZLZ H ÄUHUJPHS HZZL[ VUS` ^OLU [OL JVU[YHJ[\HS YPNO[Z [V [OL JHZO ÅV^Z MYVT [OL HZZL[ YLJV]LYHISLHTV\U[(UHZZL[»ZYLJV]LYHISLHTV\U[PZ[OLOPNOLYVMHUHZZL[»ZVYJHZONLULYH[PUN\UP[»Z*.<MHPY L_WPYLVY^OLUP[[YHUZMLYZ[OLÄUHUJPHSHZZL[HUKZ\IZ[HU[PHSS`HSS[OLYPZRZHUKYL^HYKZVMV^ULYZOPWVM[OLHZZL[ ]HS\LSLZZJVZ[ZVMKPZWVZHSHUKP[Z]HS\LPU\ZL9LJV]LYHISLHTV\U[PZKL[LYTPULKMVYHUPUKP]PK\HSHZZL[\USLZZ [VHUV[OLYLU[P[`0M[OL.YV\WULP[OLY[YHUZMLYZUVYYL[HPUZZ\IZ[HU[PHSS`HSS[OLYPZRZHUKYL^HYKZVMV^ULYZOPW [OLHZZL[KVLZUV[NLULYH[LJHZOPUÅV^Z[OH[HYLSHYNLS`PUKLWLUKLU[VM[OVZLMYVTV[OLYHZZL[ZVYNYV\WZVM HUKJVU[PU\LZ[VJVU[YVS[OL[YHUZMLYYLKHZZL[[OL.YV\WYLJVNUPZLZP[ZYL[HPULKPU[LYLZ[PU[OLHZZL[HUKHU HZZL[Z>OLU[OLJHYY`PUNHTV\U[VMHUHZZL[VY*.<L_JLLKZP[ZYLJV]LYHISLHTV\U[[OLHZZL[PZJVUZPKLYLK HZZVJPH[LKSPHIPSP[`MVYHTV\U[ZP[TH`OH]L[VWH`0M[OL.YV\WYL[HPUZZ\IZ[HU[PHSS`HSS[OLYPZRZHUKYL^HYKZ PTWHPYLKHUKPZ^YP[[LUKV^U[VP[ZYLJV]LYHISLHTV\U[ VM V^ULYZOPW VM H [YHUZMLYYLK ÄUHUJPHS HZZL[ [OL .YV\W JVU[PU\LZ [V YLJVNUPZL [OL ÄUHUJPHS HZZL[ HUK HSZV YLJVNUPZLZHJVSSH[LYHSPZLKIVYYV^PUNMVY[OLWYVJLLKZYLJLP]LK 0UHZZLZZPUN]HS\LPU\ZL[OLLZ[PTH[LKM\[\YLJHZOÅV^ZHYLKPZJV\U[LK[V[OLPYWYLZLU[]HS\L\ZPUNHWYL[H_ 6UKLYLJVNUP[PVUVMHÄUHUJPHSHZZL[TLHZ\YLKH[HTVY[PZLKJVZ[[OLKPќLYLUJLIL[^LLU[OLHZZL[»ZJHYY`PUN KPZJV\U[YH[L[OH[YLÅLJ[ZJ\YYLU[THYRL[HZZLZZTLU[ZVM[OL[PTL]HS\LVMTVUL`HUK[OLYPZRZZWLJPÄJ[V[OL HTV\U[HUK[OLZ\TVM[OLJVUZPKLYH[PVUYLJLP]LKHUKYLJLP]HISLPZYLJVNUPZLKPUWYVÄ[VYSVZZ0UHKKP[PVUVU HZZL[0UKL[LYTPUPUNMHPY]HS\LSLZZJVZ[ZVMKPZWVZHSYLJLU[THYRL[[YHUZHJ[PVUZHYL[HRLUPU[VHJJV\U[0MUV KLYLJVNUP[PVUVMHUPU]LZ[TLU[PUHKLI[PUZ[Y\TLU[JSHZZPÄLKHZH[-=;6*0[OLJ\T\SH[P]LNHPUVYSVZZWYL]PV\ZS` Z\JO[YHUZHJ[PVUZJHUILPKLU[PÄLKHUHWWYVWYPH[L]HS\H[PVUTVKLSPZ\ZLK;OLZLJHSJ\SH[PVUZHYLJVYYVIVYH[LK HJJ\T\SH[LKPU[OLPU]LZ[TLU[ZYL]HS\H[PVUYLZLY]LPZYLJSHZZPÄLK[VWYVÄ[VYSVZZ0UJVU[YHZ[VUKLYLJVNUP[PVUVM I`]HS\H[PVUT\S[PWSLZX\V[LKZOHYLWYPJLZMVYW\ISPJS`[YHKLKJVTWHUPLZVYV[OLYH]HPSHISLMHPY]HS\LPUKPJH[VYZ HUPU]LZ[TLU[PULX\P[`PUZ[Y\TLU[^OPJO[OL.YV\WOHZLSLJ[LKVUPUP[PHSYLJVNUP[PVU[VTLHZ\YLH[-=;6*0[OL J\T\SH[P]LNHPUVYSVZZWYL]PV\ZS`HJJ\T\SH[LKPU[OLPU]LZ[TLU[ZYL]HS\H[PVUYLZLY]LPZUV[YLJSHZZPÄLK[VWYVÄ[ ;OL.YV\WIHZLZP[ZPTWHPYTLU[JHSJ\SH[PVUVUKL[HPSLKI\KNL[ZHUKMVYLJHZ[JHSJ\SH[PVUZ^OPJOHYLWYLWHYLK VYSVZZI\[PZ[YHUZMLYYLK[VYL[HPULKLHYUPUNZ ZLWHYH[LS`MVYLHJOVM[OL.YV\W»Z*. *SHZZPÄJH[PVUHZKLI[VYLX\P[` 0TWHPYTLU[SVZZLZVMJVU[PU\PUNVWLYH[PVUZPUJS\KPUNPTWHPYTLU[VUPU]LU[VYPLZHYLYLJVNUPZLKPU[OLZ[H[LTLU[ VM WYVÄ[ VY SVZZ HUK V[OLY JVTWYLOLUZP]L PUJVTL PU L_WLUZL JH[LNVYPLZ JVUZPZ[LU[ ^P[O [OL M\UJ[PVU VM [OL +LI[HUKLX\P[`PUZ[Y\TLU[ZHYLJSHZZPÄLKHZLP[OLYÄUHUJPHSSPHIPSP[PLZVYHZLX\P[`PUHJJVYKHUJL^P[O[OLZ\IZ[HUJL PTWHPYLK HZZL[ L_JLW[ MVY WYVWLY[PLZ WYL]PV\ZS` YL]HS\LK ^P[O [OL YL]HS\H[PVU [HRLU [V V[OLY JVTWYLOLUZP]L VM[OLJVU[YHJ[\HSHYYHUNLTLU[ZHUK[OLKLÄUP[PVUZVMHÄUHUJPHSSPHIPSP[`HUKHULX\P[`PUZ[Y\TLU[ PUJVTL-VYZ\JOWYVWLY[PLZ[OLPTWHPYTLU[PZYLJVNUPZLKPUV[OLYJVTWYLOLUZP]LPUJVTL\W[V[OLHTV\U[VM HU`WYL]PV\ZYL]HS\H[PVU ,X\P[`PUZ[Y\TLU[Z -VYHZZL[ZL_JS\KPUNNVVK^PSSHUHZZLZZTLU[PZTHKLH[LHJOYLWVY[PUNKH[L[VKL[LYTPUL^OL[OLY[OLYLPZHU (ULX\P[`PUZ[Y\TLU[PZHU`JVU[YHJ[[OH[L]PKLUJLZHYLZPK\HSPU[LYLZ[PU[OLHZZL[ZVMHULU[P[`HM[LYKLK\J[PUN PUKPJH[PVU[OH[WYL]PV\ZS`YLJVNUPZLKPTWHPYTLU[SVZZLZUVSVUNLYL_PZ[VYOH]LKLJYLHZLK0MZ\JOPUKPJH[PVU HSSVMP[ZSPHIPSP[PLZ,X\P[`PUZ[Y\TLU[ZPZZ\LKI`[OL.YV\WHYLYLJVNUPZLKH[[OLWYVJLLKZYLJLP]LKUL[VMKPYLJ[ L_PZ[Z[OL.YV\WLZ[PTH[LZ[OLHZZL[»ZVY*.<»ZYLJV]LYHISLHTV\U[(WYL]PV\ZS`YLJVNUPZLKPTWHPYTLU[SVZZPZ PZZ\LJVZ[Z YL]LYZLKVUS`PM[OLYLOHZILLUHJOHUNLPU[OLHZZ\TW[PVUZ\ZLK[VKL[LYTPUL[OLHZZL[»ZYLJV]LYHISLHTV\U[ 9LW\YJOHZLVM[OL*VTWHU`»ZV^ULX\P[`PUZ[Y\TLU[ZPZYLJVNUPZLKHUKKLK\J[LKKPYLJ[S`PULX\P[`5VNHPU ZPUJL[OLSHZ[PTWHPYTLU[SVZZ^HZYLJVNUPZLK;OLYL]LYZHSPZSPTP[LKZV[OH[[OLJHYY`PUNHTV\U[VM[OLHZZL[ VYSVZZPZYLJVNUPZLKPUWYVÄ[VYSVZZVU[OLW\YJOHZLZHSLPZZ\LVYJHUJLSSH[PVUVM[OL*VTWHU`»ZV^ULX\P[` KVLZUV[L_JLLKP[ZYLJV]LYHISLHTV\U[VYL_JLLK[OLJHYY`PUNHTV\U[[OH[^V\SKOH]LILLUKL[LYTPULKUL[VM PUZ[Y\TLU[Z KLWYLJPH[PVUVYHTVY[PZH[PVUOHKUVPTWHPYTLU[SVZZILLUYLJVNUPZLKMVY[OLHZZL[PUWYPVY`LHYZ -PUHUJPHSSPHIPSP[PLZ :\JOYL]LYZHSPZYLJVNUPZLKPUWYVÄ[VYSVZZ\USLZZ[OLHZZL[PZJHYYPLKH[HYL]HS\LKHTV\U[PU^OPJOJHZL[OL YL]LYZHSPZ[YLH[LKHZHYL]HS\H[PVUPUJYLHZL (SSÄUHUJPHSSPHIPSP[PLZHYLTLHZ\YLKZ\IZLX\LU[S`H[HTVY[PZLKJVZ[\ZPUN[OLLќLJ[P]LPU[LYLZ[TL[OVK -PUHUJPHSSPHIPSP[PLZ[OH[HYPZL^OLUH[YHUZMLYVMHÄUHUJPHSHZZL[KVLZUV[X\HSPM`MVYKLYLJVNUP[PVUVY^OLU[OL p) Employee entitlements JVU[PU\PUNPU]VS]LTLU[HWWYVHJOHWWSPLZHUKÄUHUJPHSN\HYHU[LLJVU[YHJ[ZPZZ\LKI`[OL.YV\WHYLTLHZ\YLK PUHJJVYKHUJL^P[O[OLZWLJPÄJHJJV\U[PUNWVSPJPLZZL[V\[ILSV^ 9L[PYLTLU[ILULÄ[ZVISPNH[PVUZKLÄULKJVU[YPI\[PVUWSHUZ Financial liabilities measured subsequently at amortised cost ;OL.YV\WVWLYH[LZHKLÄULKJVU[YPI\[PVUWLUZPVUZJOLTLMVYLSPNPISLLTWSV`LLZ;OLZJOLTLPZHKTPUPZ[LYLK I` HU PUKLWLUKLU[ HKTPUPZ[YH[PVU *VTWHU` HUK PZ M\UKLK I` JVU[YPI\[PVUZ MYVT [OL .YV\W JVTWHUPLZ HUK -PUHUJPHSSPHIPSP[PLZ[OH[HYLUV[PJVU[PUNLU[JVUZPKLYH[PVUVMHUHJX\PYLYPUHI\ZPULZZJVTIPUH[PVUPPOLSKMVY LTWSV`LLZ;OLZLHYLM\Y[OLYKPZJ\ZZLK\UKLY5V[L [YHKPUNVYPPPKLZPNUH[LKHZH[-=;73HYLTLHZ\YLKZ\IZLX\LU[S`H[HTVY[PZLKJVZ[\ZPUN[OLLќLJ[P]LPU[LYLZ[ TL[OVK ;OL.YV\WHSZVTHRLZJVU[YPI\[PVUZ[V[OLZ[H[\[VY`KLÄULKJVU[YPI\[PVUZJOLTLZPU[OL[^VJV\U[YPLZ^OLYL VWLYH[PVUZHYLIHZLK ;OLLќLJ[P]LPU[LYLZ[TL[OVKPZHTL[OVKVMJHSJ\SH[PUN[OLHTVY[PZLKJVZ[VMHÄUHUJPHSSPHIPSP[`HUKVMHSSVJH[PUN PU[LYLZ[L_WLUZLV]LY[OLYLSL]HU[WLYPVK;OLLќLJ[P]LPU[LYLZ[YH[LPZ[OLYH[L[OH[L_HJ[S`KPZJV\U[ZLZ[PTH[LK M\[\YLJHZOWH`TLU[ZPUJS\KPUNHSSMLLZHUKWVPU[ZWHPKVYYLJLP]LK[OH[MVYTHUPU[LNYHSWHY[VM[OLLќLJ[P]L PU[LYLZ[YH[L[YHUZHJ[PVUJVZ[ZHUKV[OLYWYLTP\TZVYKPZJV\U[Z[OYV\NO[OLL_WLJ[LKSPMLVM[OLÄUHUJPHSSPHIPSP[` VY^OLYLHWWYVWYPH[LHZOVY[LYWLYPVK[V[OLHTVY[PZLKJVZ[VMHÄUHUJPHSSPHIPSP[` 128 129 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) p) Employee entitlements (Continued) Y :LY]PJLNYH[\P[PLZSVUNZLY]PJLH^HYKSLH]LWH`HUK[LYTPUH[PVUILULÄ[Z 9L[PYLTLU[ILULÄ[ZVISPNH[PVUZKLÄULKJVU[YPI\[PVUWSHUZJVU[PU\LK ;OL.YV\WWYV]PKLZZLY]PJLNYH[\P[`[V\UPVUPZHISLZ[Hќ[OH[YL[PYLVUH[[HPUPUN[OLHNLVM `LHYZVYHYLKLJSHYLK YLK\UKHU[;OLZLHYLWYV]PKLK[VLSPNPISLLTWSV`LLZIHZLKVULHJOLTWSV`LL»ZSLUN[OVMZLY]PJL^P[O[OL.YV\W ;OL.YV\W»ZVISPNH[PVUZ[V[OLZ[HќYL[PYLTLU[ZJOLTLZHYLJOHYNLK[VWYVÄ[VYSVZZHZ[OL`MHSSK\L HZWYV]PKLKMVYPU[OLJVSSLJ[P]LIHYNHPUPUNHNYLLTLU[;OL.YV\WHSZVWYV]PKLZMVYSVUNZLY]PJLH^HYK[VZ[Hќ IHZLKVU[OLSLUN[OVMZLY]PJL Other entitlements ;OLJVZ[VMWYV]PKPUNZLY]PJLNYH[\P[`HUKSVUNZLY]PJLH^HYKZ^OPJOHYLJVUZPKLYLKHZKLÄULKILULÄ[WSHUPZ ,TWSV`LLLU[P[SLTLU[Z[VSVUNZLY]PJLH^HYKZHUKZLY]PJLNYH[\P[`HYLYLJVNUPZLK^OLU[OL`HJJY\L[VLTWSV`LLZ KL[LYTPULKI`HWYVMLZZPVUHSHJ[\HY`\ZPUN[OLWYVQLJ[LK\UP[JYLKP[TL[OVK (WYV]PZPVUPZTHKLMVY[OLLZ[PTH[LKSPHIPSP[`MVYSVUNZLY]PJLH^HYKZHZHYLZ\S[VMZLY]PJLZYLUKLYLKI`LTWSV`LLZ \W[V[OLYLWVY[PUNKH[L;OLZLHYLM\Y[OLYKPZJ\ZZLK\UKLY5V[LY¶ZLY]PJLNYH[\P[PLZSVUNZLY]PJLH^HYKZ 9LTLHZ\YLTLU[Z JVTWYPZPUN VM HJ[\HYPHS NHPUZ HUK SVZZLZ HYL YLJVNUPZLK PTTLKPH[LS` PU [OL Z[H[LTLU[ VM and leave pay. ÄUHUJPHSWVZP[PVU^P[OHJVYYLZWVUKPUNKLIP[VYJYLKP[[VYL[HPULKLHYUPUNZ[OYV\NOV[OLYJVTWYLOLUZP]LPUJVTL PU[OLWLYPVKPU^OPJO[OL`VJJ\Y9LTLHZ\YLTLU[ZHYLUV[YLJSHZZPÄLK[VWYVÄ[VYSVZZPUZ\IZLX\LU[WLYPVKZ ,TWSV`LLLU[P[SLTLU[Z[VHUU\HSSLH]LHYLYLJVNUPZLK^OLU[OL`L_WLJ[LK[VILWHPK[VLTWSV`LLZ(WYV]PZPVU PZTHKLMVY[OLLZ[PTH[LKSPHIPSP[`MVYHUU\HSSLH]LH[[OLYLWVY[PUNKH[L;OLZLHYLM\Y[OLYKPZJ\ZZLK\UKLY5V[L 5L[PU[LYLZ[PZJHSJ\SH[LKI`HWWS`PUN[OLKPZJV\U[YH[L[V[OLUL[KLÄULKILULÄ[SPHIPSP[`VYHZZL[ Y¶ZLY]PJLNYH[\P[PLZSVUNZLY]PJLH^HYKZHUKSLH]LWH` ;OL.YV\WYLJVNUPZLZ[OLMVSSV^PUNJOHUNLZPU[OLUL[KLÄULKILULÄ[PUWYVÄ[VYSVZZHZ! Bonus • :LY]PJLJVZ[ZJVTWYPZPUNJ\YYLU[ZLY]PJLJVZ[ZHYLYLJVNUPZLKPUWYVÄ[VYSVZZ\UKLYJVZ[VMZHSLZ"HUK (UHJJY\HSPZYLJVNUPZLKMVY[OLHTV\U[L_WLJ[LK[VILWHPK\UKLYZOVY[[LYTJHZOIVU\ZPM[OL.YV\WOHZH • 5L[PU[LYLZ[L_WLUZLVYPUJVTLPZYLJVNUPZLKPUWYVÄ[VYSVZZ\UKLYJVZ[VMZHSLZ. WYLZLU[SLNHSVYJVUZ[Y\J[P]LVISPNH[PVU[VWH`[OPZHTV\U[HZHYLZ\S[VMWHZ[ZLY]PJLWYV]PKLKI`[OLLTWSV`LL [OLVISPNH[PVUJHUILLZ[PTH[LKYLSPHIS`HUKP[PZWYVIHISL[OH[HUV\[ÅV^VMYLZV\YJLZLTIVK`PUNLJVUVTPJ ,TWSV`LLLU[P[SLTLU[Z[VHUU\HSSLH]LHYLYLJVNUPZLK^OLU[OL`L_WLJ[LK[VILWHPK[VLTWSV`LLZ(WYV]PZPVU ILULÄ[Z^PSSILYLX\PYLK[VZL[[SL[OLVISPNH[PVU PZTHKLMVY[OLLZ[PTH[LKSPHIPSP[`MVYHUU\HSSLH]LH[[OLYLWVY[PUNKH[L:LY]PJLNYH[\P[`SVUNZLY]PJLH^HYKZHUK SLH]LWH`WYV]PZPVUZHYLKPZJSVZLKPU5V[L [V[OLÄUHUJPHSZ[H[LTLU[Z q) Provisions ;OL.YV\WYLJVNUPZLZHSPHIPSP[`HUKL_WLUZLMVY[LYTPUH[PVUILULÄ[ZH[[OLLHYSPLYVM[OLMVSSV^PUNKH[LZ! Site restoration and other environmental provisions H ^OLU[OL.YV\WJHUUVSVUNLY^P[OKYH^[OLVќLYVM[OVZLILULÄ[Z"HUK ;OL.YV\WWYV]PKLZMVY[OLJVZ[ZVMYLZ[VYPUNHZP[L^OLYLHSLNHSVYJVUZ[Y\J[P]LVISPNH[PVUL_PZ[Z;OLLZ[PTH[LK I ^OLU[OL.YV\WYLJVNUPZLZJVZ[ZMVYHYLZ[Y\J[\YPUN[OH[PZ^P[OPU[OLZJVWLVM0(: HUKPU]VS]LZ[OL M\[\YLJVZ[ZMVYRUV^UYLZ[VYH[PVUYLX\PYLTLU[ZHYLKL[LYTPULKVUHZP[LI`ZP[LIHZPZHUKHYLJHSJ\SH[LKIHZLK WH`TLU[VM[LYTPUH[PVUILULÄ[Z. VU[OLWYLZLU[]HS\LVMLZ[PTH[LKM\[\YLJVZ[Z;OL.YV\WYLOHIPSP[H[LZ[OLX\HYYPLKZP[LZVUHUHUU\HSIHZPZ HZHUK^OLU[OLX\HYYPLKZP[LZHYLKPZ\ZLK/LUJLUVJVZ[VMYHPZPUNHWYV]PZPVUILMVYLL_WSVP[H[PVUVM[OLYH^ s) Cash and short-term deposits TH[LYPHSZOHZJVTTLUJLKPZPUJS\KLKPUWYVWLY[`WSHU[HUKLX\PWTLU[;OLLќLJ[VMHU`HKQ\Z[TLU[Z[V[OL WYV]PZPVUK\L[VM\Y[OLYLU]PYVUTLU[HSKHTHNLHZHYLZ\S[VML_WSVP[H[PVUHJ[P]P[PLZPZYLJVYKLK[OYV\NOVWLYH[PUN *HZOHUKZOVY[[LYTKLWVZP[ZPU[OLZ[H[LTLU[VMÄUHUJPHSWVZP[PVUJVTWYPZLJHZOH[IHURZHUKVUOHUKHUK JVZ[ZV]LY[OLSPMLVM[OLZP[LPUVYKLY[VYLÅLJ[[OLILZ[LZ[PTH[LVM[OLL_WLUKP[\YLYLX\PYLK[VZL[[SL[OLVISPNH[PVU ZOVY[[LYTKLWVZP[Z^P[OHTH[\YP[`VM[OYLLTVU[OZVYSLZZ H[[OLLUKVM[OLYLWVY[PUNWLYPVK -VY [OL W\YWVZL VM [OL Z[H[LTLU[ VM JHZO ÅV^Z JHZO HUK JHZO LX\P]HSLU[Z JVUZPZ[ VM JHZO HUK ZOVY[[LYT Other provisions KLWVZP[ZHZKLÄULKHIV]L (WYV]PZPVUPZYLJVNUPaLK^OLUHSLNHSVYJVUZ[Y\J[P]LVISPNH[PVUHYPZPUNMYVTWHZ[L]LU[ZL_PZ[ZP[PZWYVIHISL t) Segment reporting. [OH[HUV\[ÅV^VMYLZV\YJLZLTIVK`PUNLJVUVTPJILULÄ[Z^PSSILYLX\PYLK[VZL[[SL[OLVISPNH[PVUHUKHYLSPHISL LZ[PTH[LJHUILTHKLVM[OPZHTV\U[ :LNTLU[Z HYL YLWVY[LK PU H THUULY JVUZPZ[LU[ ^P[O [OL PU[LYUHS YLWVY[PUN WYV]PKLK [V [OL .YV\W 4HUHNPUN +PYLJ[VY[OL¸4+¹;OL4+THRLZZ[YH[LNPJKLJPZPVUZHUKPZYLZWVUZPISLMVYHSSVJH[PUNYLZV\YJLZHUKHZZLZZPUN *VU[PUNLU[SPHIPSP[PLZ*VU[PUNLU[SPHIPSP[PLZHYPZLMYVTWHZ[L]LU[Z^OVZLL_PZ[LUJL^PSSILJVUÄYTLKVUS`I`[OL WLYMVYTHUJLVM[OLVWLYH[PUNZLNTLU[ZZLLUV[L VJJ\YYLUJLVYUVUVJJ\YYLUJLVMVULVYTVYL\UJLY[HPUM\[\YLL]LU[ZUV[^OVSS`^P[OPU[OLJVU[YVSVM[OL.YV\W ;OL`HYLHJJVYKPUNS`KPZJSVZLKPU[OLUV[LZ[V[OLÄUHUJPHSZ[H[LTLU[Z Contingencies, guarantees, commitments and contingent assets ;OL .YV\W PZ L_WVZLK [V ]HY`PUN KLNYLLZ VM \UJLY[HPU[` YLSH[LK [V [H_ TH[[LYZ HUK YLN\SH[VY` YL]PL^Z HUK H\KP[Z;OL.YV\WHJJV\U[ZMVYP[ZPUJVTL[H_LZVU[OLIHZPZVMP[ZV^UPU[LYUHSHUHS`ZLZZ\WWVY[LKI`L_[LYUHS HK]PJL PM HWWYVWYPH[L ;OL .YV\W JVU[PU\HSS` TVUP[VYZ P[Z [H_ WVZP[PVU HUK ^OLUL]LY \UJLY[HPU[PLZ HYPZL [OL .YV\WHZZLZZLZ[OLWV[LU[PHSJVUZLX\LUJLZHUKLP[OLYHJJY\LZ[OLSPHIPSP[`VYKPZJSVZLZHJVU[PUNLU[SPHIPSP[`PUP[Z ÄUHUJPHSZ[H[LTLU[ZKLWLUKPUNVU[OLZ[YLUN[OVM[OL.YV\W»ZWVZP[PVUHUK[OLYLZ\S[PUNYPZRVMSVZZ 130 131 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) u) Fair value measurement u) Biological assets ;OL.YV\WTLHZ\YLZÄUHUJPHSPUZ[Y\TLU[ZZ\JOHZH]HPSHISLMVYZHSLH[MHPY]HS\LH[LHJOYLWVY[PUNKH[L;OL )PVSVNPJHSHZZL[ZJVTWYPZLVML\JHS`W[\Z*HZ\HYPUH*HZZPZPHTLHHUK5LLTWSHU[H[PVUZ .YV\WHSZVTLHZ\YLZJLY[HPUP[LTZVMWYVWLY[`WSHU[HUKLX\PWTLU[H[MHPY]HS\L(SZVMHPY]HS\LZVMÄUHUJPHS PUZ[Y\TLU[ZTLHZ\YLKH[HTVY[PZLKJVZ[HYLKPZJSVZLKPU5V[L I[V[OLÄUHUJPHSZ[H[LTLU[Z ,\JHS`W[\Z *HZ\HYPUH *HZZP ZPHTLH HUK 5LLT WSHU[H[PVUZ HYL TLHZ\YLK VU PUP[PHS YLJVNUP[PVU HUK H[ LHJO YLWVY[PUNKH[LH[MHPY]HS\LSLZZJVZ[Z[VZLSS(U`NHPUZVYSVZZLZHYPZPUNVUPUP[PHSYLJVNUP[PVUVMIPVSVNPJHSHZZL[Z -HPY]HS\LPZ[OLWYPJL[OH[^V\SKILYLJLP]LK[VZLSSHUHZZL[VYWHPK[V[YHUZMLYHSPHIPSP[`PUHUVYKLYS`[YHUZHJ[PVU HUKMYVTZ\IZLX\LU[JOHUNLZPUMHPY]HS\LSLZZJVZ[Z[VZLSSHYLYLJVNUPZLKPU[OLZ[H[LTLU[VMJVTWYLOLUZP]L IL[^LLUTHYRL[WHY[PJPWHU[ZH[[OLTLHZ\YLTLU[KH[L;OLMHPY]HS\LTLHZ\YLTLU[PZIHZLKVU[OLWYLZ\TW[PVU PUJVTLPU[OL`LHYPU^OPJO[OL`HYPZL(KKP[PVUZHUKYLWSHU[PUNVMIPVSVNPJHSHZZL[ZPUJS\KLJVZ[VMWSHU[PUNHUK [OH[[OL[YHUZHJ[PVU[VZLSS[OLHZZL[VY[YHUZMLY[OLSPHIPSP[`[HRLZWSHJLLP[OLY! \WRLLW\U[PS[OL`TH[\YL:\IZLX\LU[S`HSSJVZ[ZVM\WRLLWHUKTHPU[LUHUJLVMTH[\YLIPVSVNPJHSHZZL[ZHYL YLJVNUPZLKPU[OLPUJVTLZ[H[LTLU[PU[OLWLYPVKPU^OPJO[OL`HYLPUJ\YYLK • 0U[OLWYPUJPWHSTHYRL[MVY[OLHZZL[VYSPHIPSP[`VY • 0U[OLHIZLUJLVMHWYPUJPWHSTHYRL[PU[OLTVZ[HK]HU[HNLV\ZTHYRL[MVY[OLHZZL[VYSPHIPSP[` v) Comparatives ;OLWYPUJPWHSVY[OLTVZ[HK]HU[HNLV\ZTHYRL[T\Z[ILHJJLZZPISL[VI`[OL.YV\W >OLYLULJLZZHY`JVTWHYH[P]LZOH]LILLUHKQ\Z[LK[VJVUMVYT^P[OJOHUNLZPUWYLZLU[H[PVUPU[OLJ\YYLU[`LHY ;OLMHPY]HS\LVMHUHZZL[VYHSPHIPSP[`PZTLHZ\YLK\ZPUN[OLHZZ\TW[PVUZ[OH[THYRL[WHY[PJPWHU[Z^V\SK\ZL^OLU WYPJPUN[OLHZZL[VYSPHIPSP[`HZZ\TPUN[OH[THYRL[WHY[PJPWHU[ZHJ[PU[OLPYLJVUVTPJILZ[PU[LYLZ[ w) Non-current assets held for sale (MHPY]HS\LTLHZ\YLTLU[VMHUVUÄUHUJPHSHZZL[[HRLZPU[VHJJV\U[HTHYRL[WHY[PJPWHU[»ZHIPSP[`[VNLULYH[L 5VUJ\YYLU[HZZL[ZHUKKPZWVZHSNYV\WZJSHZZPÄLKHZOLSKMVYZHSLHYLTLHZ\YLKH[[OLSV^LYVMJHYY`PUNHTV\U[ LJVUVTPJILULÄ[ZI`\ZPUN[OLHZZL[PUP[ZOPNOLZ[HUKILZ[\ZLVYI`ZLSSPUNP[[VHUV[OLYTHYRL[WHY[PJPWHU[[OH[ HUKMHPY]HS\LSLZZJVZ[Z[VZLSS ^V\SK\ZL[OLHZZL[PUP[ZOPNOLZ[HUKILZ[\ZL 5VUJ\YYLU[HZZL[ZHUKKPZWVZHSNYV\WZHYLJSHZZPÄLKHZOLSKMVYZHSLPM[OLPYJHYY`PUNHTV\U[^PSSILYLJV]LYLK ;OL.YV\W\ZLZ]HS\H[PVU[LJOUPX\LZ[OH[HYLHWWYVWYPH[LPU[OLJPYJ\TZ[HUJLZHUKMVY^OPJOZ\ѝJPLU[KH[H [OYV\NOHZHSL[YHUZHJ[PVUYH[OLY[OHU[OYV\NOJVU[PU\PUN\ZL;OPZJVUKP[PVUPZYLNHYKLKHZTL[VUS`^OLU[OL HYLH]HPSHISL[VTLHZ\YLMHPY]HS\LTH_PTPZPUN[OL\ZLVMYLSL]HU[VIZLY]HISLPUW\[ZHUKTPUPTPZPUN[OL\ZLVM ZHSLPZOPNOS`WYVIHISLHUK[OLHZZL[VYKPZWVZHSNYV\WPZH]HPSHISLMVYPTTLKPH[LZHSLPUP[ZWYLZLU[JVUKP[PVU \UVIZLY]HISLPUW\[Z 4HUHNLTLU[T\Z[ILJVTTP[[LK[V[OLZHSL^OPJOZOV\SKILL_WLJ[LK[VX\HSPM`MVYYLJVNUP[PVUHZHJVTWSL[LK (SSHZZL[ZHUKSPHIPSP[PLZMVY^OPJOMHPY]HS\LPZTLHZ\YLKVYKPZJSVZLKPU[OLÄUHUJPHSZ[H[LTLU[ZHYLJH[LNVYPZLK ZHSL^P[OPUVUL`LHYMYVT[OLKH[LVMJSHZZPÄJH[PVU ^P[OPU[OLMHPY]HS\LOPLYHYJO`KLZJYPILKHZMVSSV^ZIHZLKVU[OLSV^LZ[SL]LSPUW\[[OH[PZZPNUPÄJHU[[V[OLMHPY ]HS\LTLHZ\YLTLU[HZH^OVSL! >OLU[OL.YV\WPZJVTTP[[LK[VHZHSLWSHUPU]VS]PUNSVZZVMJVU[YVSVMHZ\IZPKPHY`HSSVM[OLHZZL[ZHUKSPHIPSP[PLZ VM[OH[Z\IZPKPHY`HYLJSHZZPÄLKHZOLSKMVYZHSL^OLU[OLJYP[LYPHKLZJYPILKHIV]LHYLTL[YLNHYKSLZZVM^OL[OLY • 3L]LS8\V[LK\UHKQ\Z[LKTHYRL[WYPJLZPUHJ[P]LTHYRL[ZMVYPKLU[PJHSHZZL[ZVYSPHIPSP[PLZ [OL.YV\W^PSSYL[HPUHUVUJVU[YVSSPUNPU[LYLZ[PUP[ZMVYTLYZ\IZPKPHY`HM[LY[OLZHSL • 3L]LS=HS\H[PVU[LJOUPX\LZMVY^OPJO[OLSV^LZ[SL]LSPUW\[[OH[PZZPNUPÄJHU[[V[OLMHPY]HS\LTLHZ\YLTLU[ PZKPYLJ[S`VYPUKPYLJ[S`VIZLY]HISL"HUK >OLU[OL.YV\WPZJVTTP[[LK[VHZHSLWSHUPU]VS]PUNKPZWVZHSVMHUPU]LZ[TLU[PUHUHZZVJPH[LVYHWVY[PVUVMHU • 3L]LS=HS\H[PVU[LJOUPX\LZMVY^OPJO[OLSV^LZ[SL]LSPUW\[[OH[PZZPNUPÄJHU[[V[OLMHPY]HS\LTLHZ\YLTLU[ PU]LZ[TLU[PUHUHZZVJPH[L[OLPU]LZ[TLU[VY[OLWVY[PVUVM[OLPU]LZ[TLU[PU[OLHZZVJPH[L[OH[^PSSILKPZWVZLK PZ\UVIZLY]HISL VMPZJSHZZPÄLKHZOLSKMVYZHSL^OLU[OLJYP[LYPHKLZJYPILKHIV]LHYLTL[ -VYHZZL[ZHUKSPHIPSP[PLZ[OH[HYLYLJVNUPZLKPU[OLÄUHUJPHSZ[H[LTLU[ZVUHYLJ\YYPUNIHZPZ[OL.YV\WKL[LYTPULZ ;OL.YV\W[OLUJLHZLZ[VHWWS`[OLLX\P[`TL[OVKPUYLSH[PVU[V[OLWVY[PVU[OH[PZJSHZZPÄLKHZOLSKMVYZHSL(U` ^OL[OLY[YHUZMLYZOH]LVJJ\YYLKIL[^LLU3L]LSZPU[OLOPLYHYJO`I`YLHZZLZZPUNJH[LNVYPZH[PVUIHZLKVU[OL YL[HPULKWVY[PVUVMHUPU]LZ[TLU[PUHUHZZVJPH[L[OH[OHZUV[ILLUJSHZZPÄLKHZOLSKMVYZHSLJVU[PU\LZ[VIL SV^LZ[SL]LSPUW\[[OH[PZZPNUPÄJHU[[V[OLMHPY]HS\LTLHZ\YLTLU[HZH^OVSLH[[OLLUKVMLHJOYLWVY[PUNWLYPVK HJJV\U[LKMVY\ZPUN[OLLX\P[`TL[OVK ,_[LYUHS]HS\LYZHYLPU]VS]LKMVY]HS\H[PVUVMZPNUPÄJHU[HZZL[ZZ\JOHZMYLLOVSKSHUKHUKI\PSKPUNZ0U]VS]LTLU[ VML_[LYUHS]HS\LYZPZKLJPKLK\WVUHUU\HSS`I`[OLÄUHUJLKPYLJ[VYHM[LYKPZJ\ZZPVUZ^P[OHUKHWWYV]HSI`[OL .YV\W»ZH\KP[JVTTP[[LL:LSLJ[PVUJYP[LYPHPUJS\KLTHYRL[RUV^SLKNLYLW\[H[PVUPUKLWLUKLUJLHUK^OL[OLY WYVMLZZPVUHSZ[HUKHYKZHYLTHPU[HPULK -VY[OLW\YWVZLVMMHPY]HS\LKPZJSVZ\YLZ[OL.YV\WOHZKL[LYTPULKJSHZZLZVMHZZL[ZHUKSPHIPSP[PLZVU[OLIHZPZ VM[OLUH[\YLJOHYHJ[LYPZ[PJZHUKYPZRZVM[OLHZZL[VYSPHIPSP[`HUK[OLSL]LSVM[OLMHPY]HS\LOPLYHYJO`HZL_WSHPULK above. 132 133 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY 2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued) 0UHWWS`PUN[OL.YV\W»ZHJJV\U[PUNWVSPJPLZ^OPJOHYLKLZJYPILKPUUV[LK[OLKPYLJ[VYZHYLYLX\PYLK[VTHRL Revaluation of certain classes of property, plant and equipment Q\KNLTLU[ZV[OLY[OHU[OVZLPU]VS]PUNLZ[PTH[PVUZ[OH[OH]LHZPNUPÄJHU[PTWHJ[VU[OLHTV\U[ZYLJVNUPZLKHUK[V THRLLZ[PTH[LZHUKHZZ\TW[PVUZHIV\[[OLJHYY`PUNHTV\U[ZVMHZZL[ZHUKSPHIPSP[PLZ[OH[HYLUV[YLHKPS`HWWHYLU[ ;OL.YV\WJHYYPLZJLY[HPUJSHZZLZVMWYVWLY[`WSHU[HUKLX\PWTLU[H[MHPY]HS\L^P[OJOHUNLZPUMHPY]HS\LILPUN MYVTV[OLYZV\YJLZ;OLLZ[PTH[LZHUKHZZVJPH[LKHZZ\TW[PVUZHYLIHZLKVUOPZ[VYPJHSL_WLYPLUJLHUKV[OLYMHJ[VYZ YLJVNUPZLKPUV[OLYJVTWYLOLUZP]LPUJVTL;OL.YV\W»ZSHUKI\PSKPUNZWSHU[HUKTHJOPULY`^LYLSHZ[YL]HS\LK [OH[HYLJVUZPKLYLK[VILYLSL]HU[(J[\HSYLZ\S[ZTH`KPќLYMYVT[OLZLLZ[PTH[LZ VU+LJLTILY 3HUKHUKI\PSKPUNZ^LYL]HS\LKVU[OLIHZPZVMVWLUTHYRL[]HS\LI`PUKLWLUKLU[]HS\LYZ 2UPNO[-YHUR=HS\LYZ3PTP[LK ;OLLZ[PTH[LZHUK\UKLYS`PUNHZZ\TW[PVUZHYLYL]PL^LKVUHUVUNVPUNIHZPZ9L]PZPVUZ[VHJJV\U[PUNLZ[PTH[LZHYL YLJVNUPZLKPU[OLWLYPVKPU^OPJO[OLLZ[PTH[LPZYL]PZLKPM[OLYL]PZPVUHќLJ[ZVUS`[OH[WLYPVKVYPU[OLWLYPVKVM[OL 7SHU[HUKTHJOPULY`^LYLYL]HS\LKVUHKLWYLJPH[LKYLWSHJLTLU[JVZ[IHZPZ\ZPUNH]HS\H[PVUTVKLSWYLZJYPILKI` YL]PZPVUHUKM\[\YLWLYPVKZPM[OLYL]PZPVUHќLJ[ZIV[OJ\YYLU[HUKM\[\YLWLYPVKZ LUNPULLYZHUKJVUZ\S[HU[ZH[[OL[LJOUPJHSJLU[YLVM[OL\S[PTH[LZOHYLOVSKLY *YP[PJHSQ\KNLTLU[ZPUHWWS`PUN[OL.YV\W»ZHJJV\U[PUNWVSPJPLZ -\Y[OLYKL[HPSZVUWYVWLY[`WSHU[HUKLX\PWTLU[HYLNP]LUPU5V[L [V[OLÄUHUJPHSZ[H[LTLU[Z ;OLYLUVHYL[OLJYP[PJHSQ\KNLTLU[ZHWHY[MYVT[OVZLPU]VS]PUNLZ[PTH[PVUZ^OPJOHYLWYLZLU[LKZLWHYH[LS`ILSV^ -HPY]HS\LVMÄUHUJPHSPUZ[Y\TLU[Z [OH[[OLKPYLJ[VYZOH]LTHKLPU[OLWYVJLZZVMHWWS`PUN[OL.YV\W»ZHJJV\U[PUNWVSPJPLZHUK[OH[OH]L[OLTVZ[ ZPNUPÄJHU[LќLJ[VU[OLHTV\U[ZYLJVNUPZLKPUÄUHUJPHSZ[H[LTLU[Z >OLU[OLMHPY]HS\LVMÄUHUJPHSHZZL[ZHUKÄUHUJPHSSPHIPSP[PLZYLJVYKLKPU[OLZ[H[LTLU[VMÄUHUJPHSWVZP[PVUJHUUV[ ILKLYP]LKMYVTHJ[P]LTHYRL[Z[OLPYMHPY]HS\LPZKL[LYTPULK\ZPUN]HS\H[PVU[LJOUPX\LZPUJS\KPUN[OLKPZJV\U[LK Key sources of estimation uncertainty JHZOÅV^TVKLS;OLPUW\[Z[V[OLZLTVKLSZHYL[HRLUMYVTVIZLY]HISLTHYRL[Z^OLYLWVZZPISLI\[^OLYL[OPZPZ UV[MLHZPISLHKLNYLLVMQ\KNLTLU[PZYLX\PYLKPULZ[HISPZOPUNMHPY]HS\LZ;OLQ\KNLTLU[ZPUJS\KLJVUZPKLYH[PVUZVM ;OLRL`HZZ\TW[PVUZJVUJLYUPUN[OLM\[\YLHUKV[OLYRL`ZV\YJLZVMLZ[PTH[PVU\UJLY[HPU[`H[[OLYLWVY[PUNWLYPVK PUW\[ZZ\JOHZSPX\PKP[`YPZRJYLKP[YPZRHUK]VSH[PSP[`*OHUNLZPUHZZ\TW[PVUZHIV\[[OLZLMHJ[VYZJV\SKHќLJ[[OL [OH[TH`OH]LHZPNUPÄJHU[YPZRVMJH\ZPUNHTH[LYPHSHKQ\Z[TLU[[V[OLJHYY`PUNHTV\U[ZVMHZZL[ZHUKSPHIPSP[PLZ^P[OPU YLWVY[LKMHPY]HS\LVMÄUHUJPHSPUZ[Y\TLU[Z:LL5V[L [V[OLÄUHUJPHSZ[H[LTLU[ZMVYM\Y[OLYKPZJ\ZZPVU [OLUL_[ÄUHUJPHS`LHYHYLKPZJ\ZZLKILSV^ Site restoration Taxation provisions ;OL.YV\WTHRLZM\SSWYV]PZPVUMVY[OLM\[\YLJVZ[VMYLOHIPSP[H[PUNP[ZX\HYY`ZP[LZHUKYLSH[LKWYVK\J[PVUMHJPSP[PLZ 1\KNLTLU[PZYLX\PYLKPUKL[LYTPUPUN[OLWYV]PZPVUMVYPUJVTL[H_LZK\L[V[OLJVTWSL_P[`VMSLNPZSH[PVU;OLYLHYL VUHKPZJV\U[LKIHZPZH[[OL[PTLVMKL]LSVWPUN[OLX\HYYPLZHUKPUZ[HSSPUNHUK\ZPUN[OVZLMHJPSP[PLZ6UHUHUU\HS THU`[YHUZHJ[PVUZHUKJHSJ\SH[PVUZMVY^OPJO\S[PTH[L[H_KL[LYTPUH[PVUPZ\UJLY[HPUK\YPUN[OLVYKPUHY`JV\YZLVM IHZPZTHUHNLTLU[^P[O[OLHZZPZ[HUJLVM[LJOUPJHSZ[HќTHRLZLZ[PTH[PVUZVU[OLHKLX\HJ`VM[OLZP[LYLZ[VYH[PVU I\ZPULZZ;OL.YV\WYLJVNUPZLZSPHIPSP[PLZMVYHU[PJPWH[LK[H_H\KP[PZZ\LZIHZLKVULZ[PTH[LZVM^OL[OLYHKKP[PVUHS WYV]PZPVUZ;OLWYV]PZPVUZHYLTHKLIHZLKVU[OLHKKP[PVUHSVWLUZWHJLUL[VMYLOHIPSP[H[LKHYLHZHYPZPUNMYVT [H_LZ ^PSS IL K\L >OLYL [OL ÄUHS [H_ V\[JVTL VM [OLZL TH[[LYZ PZ KPќLYLU[ MYVT [OL HTV\U[Z [OH[ ^LYL PUP[PHSS` X\HYY`PUNVWLYH[PVUZ[OH[[VVRWSHJLPU[OL`LHY;OLLZ[PTH[LKJVZ[WLYOLJ[HYLPZ[OLUHWWSPLK[VKL[LYTPUL[OPZ YLJVYKLK Z\JO KPќLYLUJLZ ^PSS PTWHJ[ [OL PUJVTL [H_ HUK KLMLYYLK [H_ WYV]PZPVUZ PU [OL WLYPVK PU ^OPJO Z\JO HKLX\HJ`;OLJVZ[WLYOLJ[HYLPZWLYPVKPJHSS`HZZLZZLK[VMHJ[VYPUPUÅH[PVU KL[LYTPUH[PVUPZTHKL :P[LYLZ[VYH[PVUWYV]PZPVUZHYLKPZJSVZLKPU5V[L [V[OLÄUHUJPHSZ[H[LTLU[Z ;OL.YV\WYLJVNUPZLZ[OLUL[M\[\YL[H_ILULÄ[[OH[YLSH[LZ[VKLMLYYLKPUJVTL[H_HZZL[Z[V[OLL_[LU[[OH[P[PZ WYVIHISL[OH[[OLKLK\J[PISL[LTWVYHY`KPќLYLUJLZ^PSSYL]LYZLPU[OLMVYLZLLHISLM\[\YL(ZZLZZPUN[OLYLJV]LYHIPSP[`VM 7VZ[LTWSV`TLU[ILULÄ[Z KLMLYYLKPUJVTL[H_HZZL[ZYLX\PYLZ[OL.YV\W[VTHRLZPNUPÄJHU[LZ[PTH[LZYLSH[LK[VL_WLJ[H[PVUZVMM\[\YL[H_HISL PUJVTL,Z[PTH[LZVMM\[\YL[H_HISLPUJVTLHYLIHZLKVUMVYLJHZ[JHZOÅV^ZMYVTVWLYH[PVUZHUK[OLHWWSPJH[PVUVM ;OLJVZ[HUK[OLWYLZLU[]HS\LVM[OLVISPNH[PVUVM[OLZLY]PJLNYH[\P[`SVUNZLY]PJLH^HYKZHUKV[OLYWVZ[LTWSV`TLU[ L_PZ[PUN[H_SH^Z;V[OLL_[LU[[OH[M\[\YLJHZOÅV^ZHUK[H_HISLPUJVTLKPќLYZPNUPÄJHU[S`MYVTLZ[PTH[LZ[OLHIPSP[` ILULÄ[ZHYLKL[LYTPULK\ZPUNHJ[\HYPHS]HS\H[PVUZI`HUPUKLWLUKLU[HJ[\HYPHS]HS\LY(UHJ[\HYPHS]HS\H[PVUPU]VS]LZ VM[OL.YV\W[VYLHSPZL[OLUL[KLMLYYLK[H_HZZL[ZYLJVYKLKH[[OLYLWVY[PUNKH[LJV\SKILPTWHJ[LK THRPUN]HYPV\ZHZZ\TW[PVUZ[OH[TH`KPќLYMYVTHJ[\HSKL]LSVWTLU[ZPU[OLM\[\YL;OLZLPUJS\KL[OLKL[LYTPUH[PVU VM[OLKPZJV\U[YH[LM\[\YLZHSHY`PUJYLHZLZTVY[HSP[`YH[LZHUKM\[\YLWLUZPVUPUJYLHZLZ+\L[V[OLJVTWSL_P[PLZ -\Y[OLYKL[HPSZVUPUJVTL[H_LZHYLKPZJSVZLKPU5V[LZ HUKK[V[OLÄUHUJPHSZ[H[LTLU[Z PU]VS]LKPU[OL]HS\H[PVUHUKP[ZSVUN[LYTUH[\YLHKLÄULKILULÄ[VISPNH[PVUPZOPNOS`ZLUZP[P]L[VJOHUNLZPU[OLZL HZZ\TW[PVUZ(SSHZZ\TW[PVUZHYLYL]PL^LKH[LHJOYLWVY[PUNKH[L Inventories provisioning and inventories count 0UKL[LYTPUPUN[OLHWWYVWYPH[LKPZJV\U[YH[L[OLHJ[\HY`JVUZPKLYZ[OLPU[LYLZ[YH[LZVM[OLNV]LYUTLU[IVUKTHYRL[ 4HUHNLTLU[THRLZWYV]PZPVUZMVYZWHYLZ[OH[L_JLLK[OLZL[TH_PT\TSL]LSIHZLKVU[OL\ZHNLVM[OLPU]LU[VY` ;OLHJ[\HY`HSZVJVUZPKLYZ[OLTLHU[LYTZVM[OL`PLSKVM[OLIVUKHUK[OLSPHIPSP[PLZ;OLTVY[HSP[`YH[LPZIHZLKVU I`JVTWHYPUNP[LTZPUZ[VJR^P[O[OLYLJLU[WHZ[JVUZ\TW[PVU;OLTH_PT\TSL]LSPZKL[LYTPULKI`[HRPUNPU[V W\ISPJS`H]HPSHISLTVY[HSP[`[HISLZMVY[OLZWLJPÄJJV\U[YPLZ-\[\YLZHSHY`PUJYLHZLZHUKWLUZPVUPUJYLHZLZHYLIHZLK JVUZPKLYH[PVU[OLSLHK[PTL[OLZWLJPÄLKVYKLYX\HU[P[`[OLZV\YJLVM[OLZWHYLZHUK[OLWYVQLJ[LK\ZHNLYH[L VUL_WLJ[LKM\[\YLPUÅH[PVUYH[LZMVY[OLYLZWLJ[P]LJV\U[YPLZ ;OLPU]LU[VYPLZJV\U[ZMVYYH^TH[LYPHSZ¶I\SRTH[LYPHSZPUJS\KPUNJSPURLYN`WZ\TIH\_P[LWVaaVSHUHHUKI\SR -\Y[OLYKL[HPSZHIV\[ZLY]PJLNYH[\P[`SVUNZLY]PJLH^HYKZHUKV[OLYWVZ[LTWSV`TLU[ILULÄ[ZHYLNP]LUPU5V[L JLTLU[HYLJHYYPLKV\[[OYV\NOHZ\Y]L`I`HUPUKLWLUKLU[Z\Y]L`VY;OPZZ\Y]L`PUNWYVJLZZYLX\PYLZQ\KNLTLU[ [V[OLÄUHUJPHSZ[H[LTLU[Z HUKLZ[PTH[PVU -\Y[OLYKL[HPSZVUPU]LU[VYPLZHYLNP]LUPU5V[L[V[OLÄUHUJPHSZ[H[LTLU[Z 134 135 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued) 2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued) 0TWHPYTLU[SVZZLZMVYUVUÄUHUJPHSHZZL[Z Useful lives and residual values of property, plant and equipment ([LHJOYLWVY[PUNKH[L[OL.YV\WYL]PL^Z[OLJHYY`PUNHTV\U[ZVMP[Z[HUNPISLHUKPU[HUNPISLHZZL[Z[VKL[LYTPUL ;OL.YV\WYL]PL^Z[OLLZ[PTH[LK\ZLM\SSP]LZHUKYLZPK\HS]HS\LZVMWYVWLY[`WSHU[HUKLX\PWTLU[H[[OLLUKVMLHJO ^OL[OLY[OLYLPZHU`PUKPJH[PVU[OH[[OVZLHZZL[ZOH]LZ\ќLYLKHUPTWHPYTLU[SVZZ0MHU`Z\JOPUKPJH[PVUL_PZ[Z[OL YLWVY[PUNWLYPVK0UYL]PL^PUN[OL\ZLM\SSP]LZVMWYVWLY[`WSHU[HUKLX\PWTLU[[OL.YV\WJVUZPKLYZ[OLYLTHPUPUN YLJV]LYHISLHTV\U[VM[OLHZZL[PZLZ[PTH[LKPUVYKLY[VKL[LYTPUL[OLL_[LU[VM[OLPTWHPYTLU[SVZZ0TWHPYTLU[ WLYPVKV]LY^OPJOHUHZZL[PZL_WLJ[LK[VILH]HPSHISLMVY\ZLI`[OL.YV\W4HUHNLTLU[HSZVSVVRZH[[OLU\TILY L_PZ[Z^OLU[OLJHYY`PUNHTV\U[VMHUHZZL[VYJHZONLULYH[PUN\UP[L_JLLKZP[ZYLJV]LYHISLHTV\U[^OPJOPZ[OL VM WYVK\J[PVU VY ZPTPSHY \UP[Z L_WLJ[LK [V IL VI[HPULK MYVT [OL WYVWLY[` WSHU[ HUK LX\PWTLU[ 1\KNTLU[ HUK OPNOLYVMP[ZMHPY]HS\LSLZZJVZ[ZVMKPZWVZHSHUKP[Z]HS\LPU\ZL;OLMHPY]HS\LSLZZJVZ[ZVMKPZWVZHSJHSJ\SH[PVUPZ HZZ\TW[PVUZHYLYLX\PYLKPULZ[PTH[PUN[OLYLTHPUPUN\ZLM\SWLYPVKHUKLZ[PTH[LZVM[OLU\TILYVMWYVK\J[PVUVY IHZLKVUH]HPSHISLKH[HMYVTIPUKPUNZHSLZ[YHUZHJ[PVUZJVUK\J[LKH[HYT»ZSLUN[OMVYZPTPSHYHZZL[ZVYVIZLY]HISL ZPTPSHY\UP[ZL_WLJ[LK[VILVI[HPULKMYVT[OLWYVWLY[`WSHU[HUKLX\PWTLU[ THYRL[WYPJLZSLZZPUJYLTLU[HSJVZ[ZMVYKPZWVZPUNVM[OLHZZL[;OL]HS\LPU\ZLJHSJ\SH[PVUPZIHZLKVUHKPZJV\U[LK JHZOÅV^TVKLS;OLJHZOÅV^ZHYLKLYP]LKMYVT[OLI\KNL[MVY[OLUL_[Ä]L`LHYZHUKKVUV[PUJS\KLYLZ[Y\J[\YPUN +\YPUN[OLÄUHUJPHS`LHYUVJOHUNLZ[V[OL\ZLM\SSP]LZ^LYLPKLU[PÄLKI`[OL+PYLJ[VYZ-\Y[OLYKL[HPSZVUWYVWLY[` HJ[P]P[PLZ [OH[ [OL .YV\W PZ UV[ `L[ JVTTP[[LK [V VY ZPNUPÄJHU[ M\[\YL PU]LZ[TLU[Z [OH[ ^PSS LUOHUJL [OL HZZL[»Z WSHU[HUKLX\PWTLU[HYLNP]LUPU5V[L [V[OLÄUHUJPHSZ[H[LTLU[Z WLYMVYTHUJLVM[OL*.<ILPUN[LZ[LK;OLYLJV]LYHISLHTV\U[PZTVZ[ZLUZP[P]L[V[OLKPZJV\U[YH[L\ZLKMVY[OL KPZJV\U[LKJHZOÅV^TVKLSHZ^LSSHZ[OLL_WLJ[LKM\[\YLJHZOPUÅV^ZHUK[OLNYV^[OYH[L\ZLKMVYL_[YHWVSH[PVU Contingent liabilities W\YWVZLZ (ZKPZJSVZLKPU5V[L[V[OLÄUHUJPHSZ[H[LTLU[Z[OL.YV\WPZL_WVZLK[V]HYPV\ZJVU[PUNLU[SPHIPSP[PLZPU[OLUVYTHS 0UHZZLZZPUN^OL[OLY[OLYLPZHU`PUKPJH[PVU[OH[[OL[HUNPISLHUKPU[HUNPISLHZZL[ZTH`ILPTWHPYLK[OL.YV\W JV\YZLVMI\ZPULZZPUJS\KPUNHU\TILYVMSLNHSJHZLZ;OL+PYLJ[VYZL]HS\H[L[OLZ[H[\ZVM[OLZLL_WVZ\YLZVUH JVUZPKLYZ[OLMVSSV^PUNPUKPJH[PVUZ! YLN\SHYIHZPZ[VHZZLZZ[OLWYVIHIPSP[`VM[OL.YV\WPUJ\YYPUNYLSH[LKSPHIPSP[PLZ/V^L]LYWYV]PZPVUZHYLVUS`THKL PU[OLÄUHUJPHSZ[H[LTLU[Z^OLYLIHZLKVU[OL+PYLJ[VYZ»L]HS\H[PVUHWYLZLU[VISPNH[PVUOHZILLULZ[HISPZOLK H [OLYLHYLVIZLY]HISLPUKPJH[PVUZ[OH[[OLHZZL[»Z]HS\LOHZKLJSPULKK\YPUN[OLWLYPVKZPNUPÄJHU[S`TVYL[OHU 1\KNLTLU[HUKHZZ\TW[PVUZHYLYLX\PYLKPU! ^V\SKILL_WLJ[LKHZHYLZ\S[VM[OLWHZZHNLVM[PTLVYUVYTHS\ZL I ZPNUPÄJHU[JOHUNLZ^P[OHUHK]LYZLLќLJ[VU[OLLU[P[`OH]L[HRLUWSHJLK\YPUN[OLWLYPVKVY^PSS[HRLWSHJLPU • HZZLZZPUN[OLL_PZ[LUJLVMHWYLZLU[VISPNH[PVUSLNHSVYJVUZ[Y\J[P]LHZHYLZ\S[VMHWHZ[L]LU[" [OLULHYM\[\YLPU[OL[LJOUVSVNPJHSTHYRL[LJVUVTPJVYSLNHSLU]PYVUTLU[PU^OPJO[OLLU[P[`VWLYH[LZVYPU • HZZLZZPUN[OLWYVIHIPSP[`[OH[HUV\[ÅV^VMYLZV\YJLZLTIVK`PUNLJVUVTPJILULÄ[Z^PSSILYLX\PYLK[VZL[[SL [OLTHYRL[[V^OPJOHUHZZL[PZKLKPJH[LK [OLVISPNH[PVU"HUK J THYRL[PU[LYLZ[YH[LZVYV[OLYTHYRL[YH[LZVMYL[\YUVUPU]LZ[TLU[ZOH]LPUJYLHZLKK\YPUN[OLWLYPVKHUK • ,Z[PTH[PUN[OLHTV\U[VM[OLVISPNH[PVU[VILWHPKV\[ [OVZLPUJYLHZLZHYLSPRLS`[VHќLJ[[OLKPZJV\U[YH[L\ZLKPUJHSJ\SH[PUNHUHZZL[»Z]HS\LPU\ZLHUKKLJYLHZL[OL HZZL[»ZYLJV]LYHISLHTV\U[TH[LYPHSS` 0TWHPYTLU[VMÄUHUJPHSHZZL[Z K [OLJHYY`PUNHTV\U[VM[OLUL[HZZL[ZVM[OLLU[P[`PZTVYL[OHUP[ZTHYRL[JHWP[HSPZH[PVU L L]PKLUJLPZH]HPSHISLVMVIZVSLZJLUJLVYWO`ZPJHSKHTHNLVMHUHZZL[ ;OL .YV\W YLJVNUPZLZ H SVZZ HSSV^HUJL MVY L_WLJ[LK JYLKP[ SVZZLZ VU PU]LZ[TLU[Z PU KLI[ PUZ[Y\TLU[Z [OH[ HYL M ZPNUPÄJHU[JOHUNLZ^P[OHUHK]LYZLLќLJ[VU[OLLU[P[`OH]L[HRLUWSHJLK\YPUN[OLWLYPVKVYHYLL_WLJ[LK TLHZ\YLKH[HTVY[PZLKJVZ[VYH[-=;6*0SLHZLYLJLP]HISLZ[YHKLYLJLP]HISLZHUKJVU[YHJ[HZZL[ZHZ^LSSHZVU [V[HRLWSHJLPU[OLULHYM\[\YLPU[OLL_[LU[[V^OPJOVYTHUULYPU^OPJOHUHZZL[PZ\ZLKVYPZL_WLJ[LK[V ÄUHUJPHSN\HYHU[LLJVU[YHJ[Z;OLHTV\U[VML_WLJ[LKJYLKP[SVZZLZPZ\WKH[LKH[LHJOYLWVY[PUNKH[L[VYLÅLJ[ IL\ZLK;OLZLJOHUNLZPUJS\KL[OLHZZL[ILJVTPUNPKSLWSHUZ[VKPZJVU[PU\LVYYLZ[Y\J[\YL[OLVWLYH[PVU[V JOHUNLZPUJYLKP[YPZRZPUJLPUP[PHSYLJVNUP[PVUVM[OLYLZWLJ[P]LÄUHUJPHSPUZ[Y\TLU[ ^OPJOHUHZZL[ILSVUNZWSHUZ[VKPZWVZLVMHUHZZL[ILMVYL[OLWYL]PV\ZS`L_WLJ[LKKH[LHUKYLHZZLZZPUN[OL \ZLM\SSPMLVMHUHZZL[HZÄUP[LYH[OLY[OHUPUKLÄUP[L ;OL.YV\WHS^H`ZYLJVNUPZLZSPML[PTL,*3MVY[YHKLYLJLP]HISLZJVU[YHJ[HZZL[ZHUKSLHZLYLJLP]HISLZ;OLL_WLJ[LK N L]PKLUJLPZH]HPSHISLMYVTPU[LYUHSYLWVY[PUN[OH[PUKPJH[LZ[OH[[OLLJVUVTPJWLYMVYTHUJLVMHUHZZL[PZVY^PSS JYLKP[SVZZLZVU[OLZLÄUHUJPHSHZZL[ZHYLLZ[PTH[LK\ZPUNHWYV]PZPVUTH[YP_IHZLKVU[OL.YV\W»ZOPZ[VYPJHSJYLKP[ IL^VYZL[OHUL_WLJ[LK SVZZL_WLYPLUJLHKQ\Z[LKMVYMHJ[VYZ[OH[HYLZWLJPÄJ[V[OLKLI[VYZNLULYHSLJVUVTPJJVUKP[PVUZHUKHUHZZLZZTLU[ VMIV[O[OLJ\YYLU[HZ^LSSHZ[OLMVYLJHZ[KPYLJ[PVUVMJVUKP[PVUZH[[OLYLWVY[PUNKH[LPUJS\KPUN[PTL]HS\LVMTVUL` -\Y[OLYKL[HPSZVUWYVWLY[`WSHU[HUKLX\PWTLU[HYLNP]LUPU5V[L [V[OLÄUHUJPHSZ[H[LTLU[ZHUKPU[HUNPISL ^OLYLHWWYVWYPH[L HZZL[ZPU5V[L [V[OLÄUHUJPHSZ[H[LTLU[Z -VYHSSV[OLYÄUHUJPHSPUZ[Y\TLU[Z[OL.YV\WYLJVNUPZLZSPML[PTL,*3^OLU[OLYLOHZILLUHZPNUPÄJHU[PUJYLHZLPU +L[LYTPUPUN^OL[OLYNVVK^PSSPZPTWHPYLKYLX\PYLZHULZ[PTH[PVUVM[OL]HS\LPU\ZLVM[OLJHZONLULYH[PUN\UP[Z[V JYLKP[YPZRZPUJLPUP[PHSYLJVNUP[PVU/V^L]LYPM[OLJYLKP[YPZRVU[OLÄUHUJPHSPUZ[Y\TLU[OHZUV[PUJYLHZLKZPNUPÄJHU[S` ^OPJONVVK^PSSOHZILLUHSSVJH[LK+P]PKLUKZYLJLP]LKHYL[OLJHZOÅV^ZMYVT[OL*.<;OL*VTWHU`LZ[PTH[LZ[OL ZPUJLPUP[PHSYLJVNUP[PVU[OL.YV\WTLHZ\YLZ[OLSVZZHSSV^HUJLMVY[OH[ÄUHUJPHSPUZ[Y\TLU[H[HUHTV\U[LX\HS[V KP]PKLUKL_WLJ[LK`LHYS`MYVTLHJO*.<HUKKPZJV\U[Z[OLZL\ZPUNLZ[PTH[LKKPZJV\U[YH[LZ0UHZZLZZPUN^OL[OLY TVU[O,*3 [OLYLPZHU`PUKPJH[PVU[OH[[OL.VVK^PSSPZPTWHPYLK[OL.YV\WJVUZPKLYZ[OH[HU`VIZLY]HISLPUKPJH[PVUZ[OH[[OL *.<»ZKP]PKLUKZOH]LKLJSPULKZPNUPÄJHU[S`K\YPUN[OLWLYPVKTVYL[OHU^V\SKILL_WLJ[LKPUUVYTHSVWLYH[PVUZVM 3PML[PTL,*3YLWYLZLU[Z[OLL_WLJ[LKJYLKP[SVZZLZ[OH[^PSSYLZ\S[MYVTHSSWVZZPISLKLMH\S[L]LU[ZV]LY[OLL_WLJ[LK [OL*.< SPMLVMHÄUHUJPHSPUZ[Y\TLU[0UJVU[YHZ[TVU[O,*3YLWYLZLU[Z[OLWVY[PVUVMSPML[PTL,*3[OH[PZL_WLJ[LK[VYLZ\S[ MYVTKLMH\S[L]LU[ZVUHÄUHUJPHSPUZ[Y\TLU[[OH[HYLWVZZPISL^P[OPUTVU[OZHM[LY[OLYLWVY[PUNKH[L -VYH]HPSHISLMVYZHSLÄUHUJPHSHZZL[Z[OL.YV\WHZZLZZH[LHJOYLWVY[PUNKH[L^OL[OLY[OLYLPZVIQLJ[P]LL]PKLUJL [OH[HUPU]LZ[TLU[VYHNYV\WVMPU]LZ[TLU[ZPZPTWHPYLK0U[OLJHZLVMLX\P[`PU]LZ[TLU[ZJSHZZPÄLKHZH]HPSHISL¶ Lease liability MVYZHSLÄUHUJPHSHZZL[ZVIQLJ[P]LL]PKLUJL^V\SKPUJS\KLHZPNUPÄJHU[VYWYVSVUNLKKLJSPULPU[OLMHPY]HS\LVM[OL PU]LZ[TLU[ILSV^P[ZJVZ[;OLKL[LYTPUH[PVUVM^OH[PZºZPNUPÄJHU[»VYºWYVSVUNLK»YLX\PYLZQ\KNLTLU[;OL.YV\W 0UVYKLY[VTHRLHQ\KNLTLU[[VKL[LYTPUL[OL[LYTVM[OLSLHZLHUK[OLJVYYLZWVUKPUNSLHZLSPHIPSP[`[OLKPYLJ[VYZ [YLH[ZºZPNUPÄJHU[»NLULYHSS`HZ HUKºWYVSVUNLK»NLULYHSS`HZNYLH[LY[OHUZP_TVU[OZ0UTHRPUN[OPZQ\KNLTLU[ JVUZPKLYHU`VW[PVUZYLNHYKPUNL_[LUZPVUVY[LYTPUH[PVUVM[OLSLHZLJVU[YHJ[^OPJOTH`ILH]HPSHISLHUK^OL[OLYP[ [OL.YV\WL]HS\H[LZHTVUNV[OLYMHJ[VYZ[OLK\YH[PVUVYL_[LU[[V^OPJO[OLMHPY]HS\LVMHUPU]LZ[TLU[PZSLZZ[OHU PZWYVIHISL[OH[Z\JOVW[PVUZ^PSSILL_LYJPZLK P[ZJVZ[-\Y[OLYKPZJSVZ\YLZVU[OPZJSHZZVMHZZL[ZHYLKVULPU5V[L [V[OLÄUHUJPHSZ[H[LTLU[Z 136 137 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 3. SEGMENT INFORMATION 3. SEGMENT INFORMATION (continued) 0UHJJVYKHUJL^P[O0-9: 6WLYH[PUN:LNTLU[Z[OLPUMVYTH[PVUWYLZLU[LKOLYLHM[LYI`VWLYH[PUNZLNTLU[PZ[OLZHTL @LHYLUKLK+LJLTILY (SSÄN\YLZPUTPSSPVUZVM2LU`H:OPSSPUNZ HZ [OH[ YLWVY[LK [V [OL *OPLM 6WLYH[PUN +LJPZPVU 4HRLY [OL .YV\W 4HUHNPUN +PYLJ[VY MVY [OL W\YWVZLZ VM THRPUN KLJPZPVUZHIV\[HSSVJH[PUNYLZV\YJLZ[V[OLZLNTLU[HUKHZZLZZPUNP[ZWLYMVYTHUJL Adjustments Kenya Uganda and eliminations Consolidated ;OL .YV\W HUHS`ZLZ P[Z VYNHUPZH[PVUHS Z[Y\J[\YL HUK PU[LYUHS YLWVY[PUN Z`Z[LT MVY [OL W\YWVZL VM PKLU[PM`PUN Z\P[HISL Revenue ZLNTLU[YLWVY[PUNMVYTH[MVY[OL.YV\W;OL.YV\WPZVYNHUPZLKVUHYLNPVUHSIHZPZPU[V[^VTHPUNLVNYHWOPJHSZLNTLU[Z! ,_[LYUHSJ\Z[VTLYZ - 2LU`HHUK 9L]LU\LHZZL[ZHUKSPHIPSP[PLZVM[OLZLNTLU[HYLTLHZ\YLKPUHTHUULYJVUZPZ[LU[^P[O[OH[VM[OLÄUHUJPHSZ[H[LTLU[Z .YVZZWYVÄ[THYNPU - ;OL[YHUZHJ[PVUZHYLJHYYPLKH[HYT»ZSLUN[OZHSLZIL[^LLU[OLZLNTLU[ZHYLTHKLH[WYPJLZ[OH[HWWYV_PTH[LTHYRL[ 6[OLYPUJVTL - - WYPJLZ Finance income 96 - .YV\WTHUHNLTLU[PU[LYUHSS`L]HS\H[LZP[ZWLYMVYTHUJLIHZLK\WVU! -PUHUJLJVZ[Z - • 6WLYH[PUNPUJVTLILMVYLJHWP[HSNHPUZPTWHPYTLU[HUKYLZ[Y\J[\YPUN"HUK 9LZ[Y\J[\YPUNJVZ[Z - - • *HWP[HSLTWSV`LKKLÄULKHZ[OL[V[HSVMNVVK^PSSPU[HUNPISLHUK[HUNPISLHZZL[ZHUK^VYRPUNJHWP[HS 7YVÄ[SVZZILMVYL[H_ (1,110) - 620 0UJVTL[H_L_WLUZL (199) - @LHYLUKLK+LJLTILY (SSÄN\YLZPUTPSSPVUZVM2LU`H:OPSSPUNZ 7YVÄ[SVZZMVY[OL`LHY - Adjustments :LNTLU[HZZL[Z Kenya Uganda and eliminations Consolidated Revenue :LNTLU[SPHIPSP[PLZ ,_[LYUHSJ\Z[VTLYZ 22,218 - +LWYLJPH[PVUHUKHTVY[PZH[PVU 1,206 - 2,011 0U[LYZLNTLU[.LVNYHWOPJHS - - 0TWHPYTLU[VMJHWP[HS^VYRPU Total revenue 22,290 WYVNYLZZ - - *VZ[VMZHSLZ ;V[HSHZZL[ZHYLZOV^UI`[OLNLVNYHWOPJHSHYLHPU^OPJO[OLHZZL[ZHYLSVJH[LK:LNTLU[HZZL[ZJVUZPZ[WYPTHYPS`VM WYVWLY[`WSHU[ HUK LX\PWTLU[ PU[HUNPISL HZZL[Z PU]LU[VYPLZ YLJLP]HISLZ HUK VWLYH[PUN JHZO HUK JHZO LX\P]HSLU[Z .YVZZWYVÄ[ - :LNTLU[SPHIPSP[PLZJVTWYPZL[YHKLHUKV[OLYWH`HISLZKP]PKLUKZWH`HISLHUKJLY[HPUJVYWVYH[LIVYYV^PUNZ;OPZÄN\YL .YVZZWYVÄ[THYNPU - L_JS\KLZPU]LZ[TLU[PUZ\IZPKPHYPLZJVYWVYH[L[H_HUKKLMLYYLK[H_H[PVU 6[OLYPUJVTL - - 0UMVYTH[PVUHIV\[THQVYJ\Z[VTLYZ! Finance income 6 - 60 0UJS\KLKPU[OL.YV\W»ZYL]LU\LZVM:OZ TPSSPVU !:OZ TPSSPVUHYLHWWYV_PTH[LS`:OZ TPSSPVU ! -PUHUJLJVZ[Z 69 - :OZ TPSSPVU^OPJOHYVZLMYVTZHSLZ[V[OL.YV\W»ZSHYNLZ[J\Z[VTLYHYPZPUNMYVT[OL2LU`HUZLNTLU[ 7YVÄ[SVZZILMVYL[H_ (862) - 0UJVTL[H_L_WLUZL - 7YVÄ[SVZZMVY[OL`LHY - :LNTLU[HZZL[Z 20,096 :LNTLU[SPHIPSP[PLZ 16,880 +LWYLJPH[PVUHUKHTVY[PZH[PVU - 2,669 Impairment of Property, Plant and ,X\PWTLU[PUJS\KPUNSPTLZ[VUL YLZLY]LZ - 138 139 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 4. REVENUE 6. REBATES GROUP COMPANY ;OL.YV\WHUK[OL*VTWHU`VќLYYLIH[LZ[V[OLJ\Z[VTLYZ^OVTLL[[OL[LYTZHUKJVUKP[PVUZIHZLKVU[OL L_PZ[PUNYLIH[LZWVSPJPLZ;OLJLTLU[YL]LU\LZHYLWYLZLU[LKUL[VMYLIH[LZ+\YPUN[OL`LHY[OLYLIH[LZVќLYLKI` 2019 2018 2019 2018 [OL.YV\WHUK[OL*VTWHU`^LYLHZMVSSV^Z! Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU GROUP COMPANY 2019 2018 2019 2018 *LTLU[5V[L 20,919 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU 7YLJHZ[WYVK\J[Z -- 892 Ready mix -- 9LIH[LZ 1,218 630 6[OLY 62-- ;YHUZWVY[ZLY]PJLZ 1,696 7. OTHER INCOME AND FINANCE INCOME/COSTS 5L[ZHSLZ 21,211 i) Other income *The other revenue includes mainly service delivery income from tourism activities earned by Lafarge Eco Systems Limited, a subsidiary of Bamburi Cement Limited. Rental income 5. COST OF SALES Total other income 24 47 24 47 GROUP COMPANY ii) Finance income 2019 2018 2019 2018 0U[LYLZ[PUJVTLJHZOKLWVZP[Z^P[OSVJHS 9LZ[H[LK IHURZ 60 96 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU 0U[LYLZ[PUJVTL.YV\W - - +PZ[YPI\[PVUJVZ[Z ;V[HSÄUHUJLPUJVTL 60 103 59 103 *VZ[VM[YHUZWVY[ZLY]PJLZ 1,880 1,910 iii) Finance costs 7HJRHNPUNTH[LYPHSZ 1,286 +PLZLS 106 68 2 1 0U[LYLZ[WH`HISLVUIVYYV^PUNZ - - +LWYLJPH[PVUVMYPNO[VM\ZLHZZL[Z --- 0U[LYLZ[VUSLHZLSPHIPSP[PLZ -- 6[OLYKPZ[YPI\[PVUL_WLUZLZ 1,012 0U[LYLZ[JVZ[VULTWSV`LLILULÄ[ SPHIPSP[PLZ 61 Total distribution cost 6,250 7,026 3,223 3,575 ;V[HSÄUHUJLJVZ[Z 449 258 50 53 7YVK\J[PVUJVZ[VMNVVKZZVSK 8. OTHER GAINS AND LOSSES ,SPTPUH[PVUVMJVZ[VMZHSLZPU[YHNYV\W -- *VZ[VMÄUPZOLKNVVKZW\YJOHZLK .HPUVUKPZWVZHSVMHZZL[Z 196 2 - - ;OPYKWHY[`YH^TH[LYPHSZJVZ[Z -VYLPNUL_JOHUNLSVZZLZ - 7YVK\J[PVUTH[LYPHSZ -VYLPNUL_JOHUNLNHPUZ - - Energy 1,910 Electricity ______:[HќJVZ[Z5V[LI 1,299 Total other gains and losses 125 (255) 14 (25) 6[OLYWYVK\J[PVUL_WLUZLZ 4HPU[LUHUJLL_WLUZLZ *OHUNLZPUPU]LU[VY` (121) 182 Depreciation 2,181 1,022 +LWYLJPH[PVUVMYPNO[VM\ZLHZZL[Z 80 - - - (TVY[PZH[PVU 12 2 - Total production cost of goods sold 25,242 23,501 14,265 14,079 Cost of sales 31,492 30,527 17,488 17,654 *VZ[VMNVVKZZVSK ;YHUZWVY[ZLY]PJLJVZ[Z 1,880 1,910 Cost of sales 31,492 30,527 17,488 17,654 140 141 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 9 OPERATING EXPENSES 9 OTHER OPERATING EXPENSES GROUP COMPANY (i) Marketing and sales expenses 2019 2018 2019 2018 4HYRL[PUNHUKZHSLZL_WLUZLZJVTWYPZLTHPUS`[OPYKWHY[`ZLY]PJLZ^P[OYLZWLJ[[VHK]LY[PZPUN"9V\[L[VTHYRL[ Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU 9;4L_WLUZLZ"I\PSKLYZHJHKLT`[YHPUPUNJVZ[Z"WYVTV[PVUHS"HUKJ\Z[VTLYZSV`HS[`WYVNYHTL_WLUZLZ;OL H;LJOUPJHSMLLZ5V[LH 1,182 [V[HSHTV\U[PUJ\YYLKK\YPUN[OL`LHYMVY[OL.YV\W^HZ:OZ TPSSPVU !:OZTPSSPVUHUKMVY[OL *VTWHU`:OZ TPSSPVU !:OZ TPSSPVU0UJS\KLKPU[OLTHYRL[PUNHUKZHSLZL_WLUZLZPZ:OZ TPSSPVU MVYKLWYLJPH[PVUVMYPNO[VM\ZLHZZL[ZMVY[OL.YV\W I9LZ[Y\J[\YPUNJVZ[Z - - 119 (ii) Administration expenses 0UVYKLY[VHJOPL]LVWLYH[PVUHSLѝJPLUJ`PU [OL.YV\W\UKLY[VVRYH[PVUHSPaH[PVUVM[OLZ[Hќ^OPJOYLZ\S[LK PU YLZ[Y\J[\YPUN VM [OL NYV\W ;OL YLZ[Y\J[\YPUN JVZ[Z ^OPJO HYL H VUL Vќ WYPUJPWHSS` YLWYLZLU[ WHJRHNLZ MVY LTWSV`LLZ»YLK\UKHUJPLZ GROUP COMPANY 2019 2018 2019 2018 11. (a) PROFIT BEFORE TAX Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU GROUP COMPANY 2019 2018 2019 2018 :[HќJVZ[Z5V[LI Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU ;OPYKWHY[`ZLY]PJLZ 188 7YVÄ[ILMVYL[H_PZHYYP]LKH[HM[LYJOHYNPUN 6[OLYHKTPUPZ[YH[PVUL_WLUZLZ :[HќJVZ[Z5V[LI 1,860 )HURJOHYNLZ 19 10 21 Depreciation on property, plant and Depreciation LX\PWTLU[5V[LJ 1,882 1,189 1,129 +LWYLJPH[PVUVMYPNO[VM\ZLHZZL[Z 11--- (TVY[PZH[PVUVMPU[HUNPISLHZZL[Z5V[L 120 121 (TVY[PZH[PVUWYLWHPKVWLYH[PUNSLHZL 89 -1 (TVY[PZH[PVUVMWYLWHPKSLHZLYLU[HSZ5V[L (TVY[PZH[PVUVMPU[HUNPISLHZZL[Z 108 16(a)) - 9 - 1 Total administration expenses 2,085 3,033 1,019 1,407 +LWYLJPH[PVUVUYPNO[VM\ZLVMHZZL[5V[L 16(b)) 221 - - - +PYLJ[VYZ»MLLZ5V[L 16 16 (iii) Impairment of other assets (\KP[VYZ»YLT\ULYH[PVU 16 11 9 7YVWLY[`WSHU[ LX\PWTLU[5V[L H - And after crediting: 3PTLZ[VULYLZLY]LZ5V[L I --- 0U[LYLZ[PUJVTL5V[L 60 0TWHPYTLU[VMQVPU[]LU[\YL¶5V[L H -10-- 75 49 35 - .HPUVUKPZWVZHSVMWSHU[HUKLX\PWTLU[ 5V[L 196 2 - - 5L[MVYLPNUL_JOHUNLSVZZLZNHPUZ5V[L 8) (b) STAFF COSTS :HSHYPLZHUK^HNLZ 1,022 981 9L[PYLTLU[ILULÄ[ZJVZ[Z 266 129 :[Hќ^LSMHYLJVZ[Z 1,860 7YLZLU[LKHZ! *VZ[VMZHSLZ5V[L 1,299 (KTPUPZ[YH[PVUL_WLUZLZ5V[L 1,860 142 143 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 11. (c) DEPRECIATION AND AMORTIZATION 12 TAX (continued) +LWYLJPH[PVUVUWYVWLY[`WSHU[HUKLX\PWTLU[HTVY[PZH[PVUVMPU[HUNPISLHZZL[ZHUKKLWYLJPH[PVUVMYPNO[VM\ZL I 9LJVUJPSPH[PVUVML_WLJ[LK[H_IHZLKVUHJJV\U[PUNWYVÄ[[V[H_JOHYNL! HZZL[ZPZWYLZLU[LKHZMVSSV^Z! GROUP COMPANY GROUP COMPANY 2019 2018 2019 2018 2019 2018 2019 2018 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU Depreciation 9LZ[H[LK *VZ[VMWYVK\J[PVU5V[L 2,181 1,022 7YVÄ[ILMVYL[H_ 620 1,292 (KTPUPZ[YH[PVUL_WLUZLZ5V[L PP ;H_JHSJ\SH[LKH[[OLKVTLZ[PJYH[LZ 2,327 1,882 1,189 1,129 HWWSPJHISLVM 218 186 Amortization ;H_LќLJ[VML_WLUZLZUV[KLK\J[PISLMVY [H_W\YWVZLZ 99 62 *VZ[VMWYVK\J[PVU5V[L 12 2- (KTPUPZ[YH[PVUL_WLUZLZ5V[L PP 108 PU]LZ[TLU[KLK\J[PVU - - 7V^LYYLIH[L - - 120 121 76 77 ;H_JOHYNL 6[OLYJVTWYLOLUZP]LPUJVTLJOHYNL (credit) (J[\HYPHSNHPUSVZZ5V[L 6 (6) 9 Revaluation of property plant and LX\PWTLU[ - -- 144 145 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 15. PROPERTY, PLANT AND EQUIPMENT 13. EARNINGS PER SHARE a) GROUP )HZPJHUKKPS\[LKLHYUPUNZWLYZOHYLPZJHSJ\SH[LKI`KP]PKPUN[OLUL[WYVÄ[H[[YPI\[HISL[V[OLVYKPUHY`LX\P[`OVSKLYZ I`[OL^LPNO[LKH]LYHNLU\TILYVMVYKPUHY`ZOHYLZPUPZZ\LK\YPUN[OL`LHYHZZOV^UILSV^ @LHYLUKLK+LJLTILY Freehold land Plant and 6ɉJL Capital ;OLYL^LYLUVWV[LU[PHSS`KPS\[P]LZOHYLZHZH[+LJLTILY HUKHZH[+LJLTILY and residential machinery equipment work-in- GROUP buildings and tools progress ** Total 2019 2018 Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million :OZ»TPSSPVU Cost or valuation 9LZ[H[LK 7YVÄ[MVY[OL`LHYH[[YPI\[HISL[VV^ULYZVM[OLWHYLU[*VTWHU`:OZTPSSPVU 861 At 1 January 2019 2,092 ;YHUZMLYZMYVTJHWP[HS^VYR >LPNO[LKH]LYHNLU\TILYVMVYKPUHY`ZOHYLZTPSSPVU PUWYVNYLZZ 80 - )HZPJHUKKPS\[LKLHYUPUNZWLYZOHYL:OZ (KKP[PVUZ 1 (ZZL[ZJSHZZPÄLKHZOLSKMVY - 14. DIVIDENDS ZHSL5V[L - +PZWVZHSZ - GROUP - (ZZL[Z^YP[[LUVќ - 2019 2018 ;YHUZSH[PVUKPќLYLUJL 1 9 Shs’million :OZ»TPSSPVU 1 9 (2) ([+LJLTILY (a) Unclaimed dividends At beginning of year 1 6 Depreciation >YP[LIHJRVM+P]PKLUKZ - +LJSHYLKHUKHWWYV]LKK\YPUN[OL`LHY¶B5V[LID At 1 January 2019 - +P]PKLUKZJSHPTLKWHPKPU[OL`LHY *OHYNLMVY[OL`LHY 1,926 91 - At end of year 1 1 (ZZL[ZJSHZZPÄLKHZOLSKMVY - (1) - (8) ZHSL5V[L (b) Dividends declared/approved during the year 2019 and 2018: Elimination of depreciation -PUHSKP]PKLUKZMVYWYL]PV\Z`LHY VUKPZWVZHS -- - 0U[LYPTKP]PKLUKZMVYJ\YYLU[`LHY - ,SPTPUH[LKVU^YP[LVќZ - (2) - ;YHUZSH[PVUKPќLYLUJL 2 6 (1) - ([+LJLTILY 26,220 1,808 - (c) Dividends declared/proposed in respect of the year NET BOOK VALUE 11,254 21,586 385 1,748 35,003 0U[LYPTKP]PKLUKWHPKPU[OL`LHY - 7YVWVZLKMVYHWWYV]HSH[[OLHUU\HSNLULYHSTLL[PUNUV[YLJVNUPZLKHZ ;OLMVYLPNUL_JOHUNLHKQ\Z[TLU[ZHYPZLMYVT[OL[YHUZSH[PVUVM[OLJHYY`PUNHTV\U[ZVMHZZL[ZOLSKI`HZ\IZPKPHY` HSPHIPSP[`HZH[+LJLTILY - /PTJLT/VSKPUNZ3PTP[LKPU[V[OL.YV\W»ZYLWVY[PUNJ\YYLUJ` *HWP[HS^VYRPUWYVNYLZZYLWYLZLU[ZJVZ[ZPUJ\YYLKVUVUNVPUN^VYRPUYLZWLJ[VMHKKP[PVUZHUKYLWSHJLTLU[Z[V - ]HYPV\ZWSHU[ZH[`LHYLUK*HWP[HS^VYRPUWYVNYLZZPZUV[KLWYLJPH[LK\U[PS[OLWSHU[ZHYLJVTWSL[LKHUKIYV\NO[ PU[V\ZL:LL5V[L PPPMVYKL[HPSZVUPTWHPYTLU[Z +P]PKLUKZWLYZOHYLIHZLKVU TPSSPVUZOHYLZ - :OZ +\YPUN[OL`LHYTHUHNLTLU[JHYYPLKV\[HYL]PL^VM[OL^VYRPUNJVUKP[PVUVM[OL.YV\W»ZWSHU[HUKTHJOPULY` VѝJLLX\PWTLU[HUK[VVSZ;OPZYL]PL^YLZ\S[LKPU[OL^YP[LVќVMHZZL[Z^OVZLJVZ[^HZ:OZ TPSSPVUHUK +\YPUN[OL`LHY[OL+PYLJ[VYZKPKUV[YLJVTTLUKWH`TLU[VMHUPU[LYPTHUKÄUHSKP]PKLUK0U :OZWLY OHKHJHYY`PUN]HS\LVM:OZ TPSSPVU VYKPUHY`ZOHYLHTV\U[PUN[V:OZ TPSSPVU^HZWHPKH[PU[LYPT^OPSLHKP]PKLUKVM:OZWLYVYKPUHY`ZOHYL HTV\U[PUN[V:OZ TPSSPVU^HZWHPKH[ÄUHS Withholding tax 7H`TLU[VMKP]PKLUKZPZZ\IQLJ[[V^P[OOVSKPUN[H_H[HYH[LVM MVYUVUYLZPKLU[ZOHYLOVSKLYZVM[OL*VTWHU` HUK MVYYLZPKLU[ZOHYLOVSKLYZ-VYYLZPKLU[V^ULYZVM[OL*VTWHU`^P[OOVSKPUN[H_PZVUS`KLK\J[PISL^OLYL[OL ZOHYLOVSKPUNPZILSV^ 146 147 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 15. PROPERTY, PLANT AND EQUIPMENT 15. PROPERTY, PLANT AND EQUIPMENT (continued) b) COMPANY a) GROUP @LHYLUKLK+LJLTILY @LHYLUKLK+LJLTILY Freehold land Plant and 6ɉJL Capital and residential machinery equipment work-in- Freehold land Plant 6ɉJL Capital- buildings and tools progress ** Total and residential and equipment work-in- Total Buildings machinery and tools progress Shs’million Shs’million Shs’million Shs’million Shs’million Cost or valuation :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU Cost or valuation At 1 January 2018 (ZH[1HU\HY` 9,018 (KKP[PVUZ - (ZZL[Z^YP[[LUVќ - ;YHUZMLYZMYVTJHWP[HS>07 - 9L]HS\H[PVUZ - - - ;YHUZMLYZMYVTJHWP[HS^VYR - (KKP[PVUZ - - - 962 962 290 129 PUWYVNYLZZ ([+LJLTILY 1,008 ;YHUZMLY[VPU[HUNPISLHZZL[Z - - - Depreciation +PZWVZHSZ - (61) (8) - (69) (ZH[1HU\HY` - >YP[LVќZ - (108) ,SPTPUH[LKVU^YP[LVќ - - (2) - (2) ;YHUZSH[PVUKPќLYLUJLZ 101 (168) *OHYNLMVY[OL`LHY - 1,189 ([+LJLTILY 2,092 ([+LJLTILY - 5L[JHYY`PUNHTV\U[ Depreciation ([+LJLTILY 202 1,008 @LHYLUKLK+LJLTILY At 1 January 2018 1,819 - Freehold land Plant 6ɉJL Capital- *OHYNLMVY[OL`LHY 222 90 - 1,882 and residential and equipment work-in- Total ,SPTPUH[LKVUKPZWVZHS - - - Buildings machinery and tools progress >YP[LVќZ - (108) :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU ;YHUZSH[PVUHSKPќLYLUJLZ (268) (61) - Cost or valuation (ZH[1HU\HY` ([+LJLTILY - ;YHUZMLYZMYVTJHWP[HS>07 - - NET BOOK VALUE 11,085 23,118 356 1,665 36,224 (KKP[PVUZ - ;OL[YHUZSH[PVUHKQ\Z[TLU[ZHYPZLMYVT[OL[YHUZSH[PVUVM[OLJHYY`PUNHTV\U[ZVMHZZL[ZOLSKI`HZ\IZPKPHY`/PTJLT +PZWVZHSZ - - /VSKPUNZ3PTP[LK ;YHUZMLY[VHZ\IZPKPHY` - - - *HWP[HS^VYRPUWYVNYLZZYLWYLZLU[ZJVZ[ZPUJ\YYLKVUVUNVPUN^VYRPUYLZWLJ[VMHKKP[PVUZHUKYLWSHJLTLU[Z[V ]HYPV\ZWSHU[ZH[`LHYLUK*HWP[HS^VYRPUWYVNYLZZPZUV[KLWYLJPH[LK\U[PS[OLWSHU[ZHYLJVTWSL[LKHUKIYV\NO[ ([+LJLTILY 9,018 PU[V\ZL Depreciation ;OLZLHZZL[Z5)=:OZ TPSSPVU^LYL^YP[[LUVќMVSSV^PUNHÄ_LKHZZL[Z]LYPÄJH[PVUL_LYJPZLK\YPUN[OL`LHY (ZH[1HU\HY` - *OHYNLMVY[OL`LHY 69 1,002 - 1,129 ,SPTPUH[LKVUKPZWVZHS - - - - - ([+LJLTILY - 5L[JHYY`PUNHTV\U[ ([+LJLTILY ;OPZYLSH[LZ[VSHUK[YHUZMLYYLK[V+PHUP,Z[H[LZ3PTP[LKHZ\IZPKPHY`JVTWHU`H[5L[)VVR=HS\LVM:OZ TPSSPVU ;OLZLHZZL[Z5)=:OZ TPSSPVU^LYL^YP[[LUVќMVSSV^PUNHÄ_LKHZZL[Z]LYPÄJH[PVUL_LYJPZLK\YPUN[OL`LHY 148 149 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 15. PROPERTY, PLANT AND EQUIPMENT (continued) 15. PROPERTY, PLANT AND EQUIPMENT (continued) d) IMPACT OF THE ENACTMENT OF THE LAND REGISTRATION ACT NO. 3 2012 ON THE COMPANY’S c) OTHER DISCLOSURES LAND HOLDING STATUS 0M[OLYL]HS\LKWYVWLY[`WSHU[HUKLX\PWTLU[^LYLZ[H[LKVU[OLOPZ[VYPJHSJVZ[IHZPZ[OLHTV\U[Z^V\SKIL HZMVSSV^Z! ;OLJ\YYLU[*VUZ[P[\[PVULUHJ[LKVU (\N\Z[PU[YVK\JLKZPNUPÄJHU[JOHUNLZPU[OLY\SLZMVYSHUKOVSKPUN GROUP COMPANY I`UVUJP[PaLUZ;OL*VUZ[P[\[PVUUVSVUNLYHSSV^ZMVYLPNULYZHUKMVYLPNUIVKPLZ[VV^UMYLLOVSKSHUKHUKSLHZLOVSK SHUKPUL_JLZZVM `LHYZ-YLLOVSKSHUKHUKSLHZLOVSKSHUKVMTVYL[OHU `LHYZ[LU\YLV^ULKI`MVYLPNULYZHUK 2019 Shs’ :OZ» 2019 Shs’ :OZ» MVYLPNUIVKPLZH\[VTH[PJHSS`ILJVTLZ `LHYSLHZLZ\WVULUHJ[TLU[VM[OLYLX\PYLKSLNPZSH[PVU\UKLY(Y[PJSLZ Millions 4PSSPVUZ Millions 4PSSPVUZ VM[OLJVUZ[P[\[PVU;OLZLJOHUNLZPU[OLSHUKOVSKPUNY\SLZ[VVRLќLJ[VU4H`\WVU[OLLUHJ[TLU[VM[OL 3HUK9LNPZ[YH[PVU(J[5VVM COST (ZWLY[OLKLÄUP[PVUVM(Y[PJSLZ VM[OLJVUZ[P[\[PVU[OL*VTWHU`PZHUVUJP[PaLUHUKOLUJL[OLZ[H[\ZVMP[Z Land MYLLOVSKSHUKJOHUNLZ[V `LHYZSLHZL )\PSKPUNZHUKPUZ[HSSH[PVUZ 4HJOPULZ ;OL*VTWHU`PZ^HP[PUNMVY[OL5H[PVUHS3HUK*VTTPZZPVU[VPZZ\LN\PKLSPULZ[OH[^PSSVWLYH[PVUHSPZL[OLWYV]PZPVUZ TOTAL 35,798 31,033 15,342 14,112 VM[OLJVUZ[P[\[PVUHUK[OLYL]PZLKSHUKSH^Z;OL*VTWHU`^PSSJVU[PU\L[VYLHZZLZZ[OLPTWHJ[VM[OLYL]PZLKSHUK SH^Z[V[OLÄUHUJPHSZ[H[LTLU[ZHZ[OLN\PKLSPULZHYLPZZ\LK ACCUMULATED DEPRECIATION 16.(a) PREPAID OPERATING LEASE RENTALS Land (1) - (1) - GROUP COMPANY )\PSKPUNZHUKPUZ[HSSH[PVUZ (1,802) 4HJOPULZ 2019 2018 2019 2018 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU TOTAL (14,929) (11,083) (8,085) (7,104) Cost 5L[JHYY`PUNHTV\U[ 20,869 19,950 7,257 7,008 At 1 January 200 ;OL.YV\W»ZHUK[OL*VTWHU`»ZSHUKI\PSKPUNZWSHU[HUKTHJOPULY`^LYLSHZ[YL]HS\LKVU+LJLTILY ;YHUZMLY[V9PNO[VM\ZL(ZZL[5V[L I - - /PTH*LTLU[3PTP[LKVU+LJLTILY 3HUKHUKYLZPKLU[PHSI\PSKPUNZ^LYL]HS\LKVU[OLIHZPZVMVWLU -VYLPNUL_JOHUNLHKQ\Z[TLU[Z - (6) - - THYRL[]HS\LI`PUKLWLUKLU[]HS\LYZ2UPNO[-YHUR=HS\LYZ3PTP[LK 7SHU[HUKTHJOPULY`^LYLYL]HS\LKVUHKLWYLJPH[LKYLWSHJLTLU[JVZ[IHZPZ\ZPUNH]HS\H[PVUTVKLSWYLZJYPILK ([+LJLTILY - - I`LUNPULLYZHUKJVUZ\S[HU[ZH[[OL[LJOUPJHSJLU[YLVM[OL\S[PTH[LZOHYLOVSKLY Amortisation -YLLOVSKSHUKHUKYLZPKLU[PHSI\PSKPUNZH[JVZ[PUJS\KLSHUK^P[OHJHYY`PUNHTV\U[VM:OZ TPSSPVU !:OZ TPSSPVUSVJH[LKPU4VTIHZHHUK([OP9P]LY At 1 January 2 ;YHUZMLY[V9PNO[VM\ZL(ZZL[5V[L I - - -VYLPNUL_JOHUNLHKQ\Z[TLU[Z - -- *OHYNLMVY[OL`LHY - 9 - 1 ([+LJLTILY - - 5L[JHYY`PUNHTV\U[ - - - 150 151 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 16.(b) RIGHT OF USE ASSETS- GROUP 17.(a) INTANGIBLE ASSETS – COMPUTER SOFTWARE Machinery & Furniture & Motor GROUP COMPANY Land Buildings equipment equipment vehicles Total Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million Cost 2019 2018 2019 2018 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU COST ([1HU\HY`HZWYL]PV\ZS`YLWVY[LK ------At 1 January (KQ\Z[TLU[VUHKVW[PVUVM0-9: - (KKP[PVUZ ;YHUZMLYMYVTWYLWHPKVWLYH[PUN 0TWHPYTLU[VMZVM[^HYL - (82) - - SLHZL5V[L H ---- ;YHUZMLYMYVT>07 2 - - -VYLPNUL_JOHUNLHKQ\Z[TLU[Z ---- (KKP[PVUZ ------VYLPNUL_JOHUNLHKQ\Z[TLU[Z - - - ([+LJLTILY 191 ([+LJLTILY 609 ACCUMULATED DEPRECIATION At 1 January 2019 ------Amortisation ;YHUZMLYMYVTWYLWHPKVWLYH[PUN At 1 January SLHZL5V[L H ---- - (82) - - -VYLPNUL_JOHUNLHKQ\Z[TLU[Z ---- 0TWHPYTLU[VMZVM[^HYL *OHYNLMVY[OL`LHY 8 126 221 *OHYNLMVY[OL`LHY 120 121 -VYLPNUL_JOHUNLHKQ\Z[TLU[Z - - - ([+LJLTILY 126 288 NET CARRYING VALUE ([+LJLTILY 116 - 5L[JHYY`PUNHTV\U[ ;OLVWLYH[PUNSLHZLYLU[HSZYLSH[L[VSLHZLOVSKSHUKTHPUS`YH^TH[LYPHSZX\HYYPLZSVJH[LKPU4VTIHZHHUK([OP9P]LYPU2LU`HHUK 2HZLZLPU Amortisation At 1 January -- *OHYNLMVY[OL`LHY 1 1 - - -VYLPNUL_JOHUNLHKQ\Z[TLU[Z - - - - 5L[JHYY`PUNHTV\U[ - - ;OLMVYLPNUL_JOHUNLHKQ\Z[TLU[ZHYPZLMYVT[OL[YHUZSH[PVUVM[OLJHYY`PUNHTV\U[ZVMHZZL[ZOLSKI`HZ\IZPKPHY` /PTJLT/VSKPUNZ3PTP[LKPU[V[OL.YV\W»ZYLWVY[PUNJ\YYLUJ` 152 153 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 18. INVESTMENTS IN SUBSIDIARIES 18. INVESTMENTS IN SUBSIDIARIES (continued) a) Information about subsidiaries b) Material partly-owned subsidiary ;OLJVUZVSPKH[LKÄUHUJPHSZ[H[LTLU[ZVM[OL.YV\WPUJS\KLPU]LZ[TLU[PUZ\IZPKPHYPLZHZILSV^ -PUHUJPHSPUMVYTH[PVUVMZ\IZPKPHY`[OH[OHZTH[LYPHSUVUJVU[YVSSPUNPU[LYLZ[ZPZWYV]PKLKILSV^! ;OLZLPU]LZ[TLU[ZHYL\UX\V[LKHUKOLSKH[JVZ[SLZZHJJ\T\SH[LKPTWHPYTLU[SVZZ 7YVWVY[PVUVMLX\P[`PU[LYLZ[OLSKI`UVUJVU[YVSSPUNPU[LYLZ[Z! COMPANY Name Country of incorporation and operation 2019 2018 Principal place Hima Cement Limited 4HYRL[PUNHUKZHSLZL_WLUZLZ 2019 2018 4V]LTLU[PU[OLKPTPU\[PVUVMPU]LZ[TLU[Z (KTPUPZ[YH[PVUL_WLUZLZ Shs’million :OZ»TPSSPVU At beginning of year 2,000 2,000 6[OLYNHPUZHUKSVZZLZ *OHYNL[VWYVÄ[VYSVZZ0TWHPYTLU[ (191) - 6[OLYVWLYH[PUNL_WLUZLZ At end of year 1,809 2,000 6WLYH[PUNSVZZWYVÄ[ (493) (921) ======6 +\YPUN[OL`LHYTHUHNLTLU[YL]PL^LK[OLJVZ[VMPU]LZ[TLU[]LYZ\Z[OLUL[HZZL[ZVM3HMHYNL,JV:`Z[LTZ Finance income 3PTP[LKHUK)PUHZ[VYL3PTP[LKHUK[OPZSLK[V^YP[LKV^UVM[OLJVZ[VMPU]LZ[TLU[[V[OLZ\IZPKPHY`»ZUL[HZZL[ -PUHUJLJVZ[Z value. 5L[ÄUHUJLJVZ[Z (190) )V[OLU[P[PLZHYLUV[ZLWHYH[LJHZONLULYH[PUN\UP[ZMYVT[OLWHYLU[JVTWHU`3HMHYNL,JV:`Z[LTZ3PTP[LK ^HZZL[\W[V\UKLY[HRLX\HYY`YLOHIPSP[H[PVUVUILOHSMVM[OLWHYLU[^OPSL)PUHZ[VYL3PTP[LK»ZWYPUJPWHSHJ[P]P[` Loss before tax (862) (1,111) PZ[VWYVTV[L[OLKPZ[YPI\[PVUVMWHYLU[JVTWHU`»ZWYVK\J[Z;OLWHYLU[JVTWHU`ÄUHUJLZ[OLVWLYH[PVUZVM [OL[^VLU[P[PLZ ;H_JYLKP[JOHYNL Loss for the year (913) (996) 6[OLYJVTWYLOLUZP]LPUJVTLUL[VM[H_ 18 ;V[HSJVTWYLOLUZP]LSVZZWYVÄ[MVY[OL`LHY 154 155 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 18. INVESTMENTS IN SUBSIDIARIES (continued) 19. EQUITY INVESTMENTS –FVTOCI b) Material partly-owned subsidiary (Continued) ;OLZLYLWYLZLU[PU]LZ[TLU[ZPU,X\P[`PUZ[Y\TLU[ZKLZPNUH[LKHZH[-=;6*0^OPJOHYLJHYYPLKH[MHPY]HS\L a) Movement in the equity investments :\TTHYPZLKZ[H[LTLU[VMÄUHUJPHSWVZP[PVUHZH[+LJLTILY 2019 2018 Shs’million :OZ»TPSSPVU GROUP AND COMPANY 9LZ[H[LK 2019 2018 5VUJ\YYLU[HZZL[Z 16,001 ,HZ[(MYPJHU7VY[SHUK*LTLU[3PTP[LK Shs’million :OZ»TPSSPVU 7YVWLY[`WSHU[HUKLX\PWTLU[HUKV[OLYUVUJ\YYLU[HZZL[Z At 1 January 180 *\YYLU[HZZL[Z -HPY]HS\LSVZZ5V[L I 0U]LU[VYPLZHUKJHZOHUKIHURIHSHUJLZHUKV[OLYJ\YYLU[HZZL[Z ([+LJLTILY 180 *\YYLU[SPHIPSP[PLZ ;YHKLHUKV[OLYWH`HISLZHUKV[OLYJ\YYLU[SPHIPSP[PLZ Kenya Oil Company Limited At 1 January -12 5VUJ\YYLU[SPHIPSP[PLZ -HPY]HS\LNHPU5V[L I ,SPTPUH[PVUVUKPZWVZHS (16) ;V[HSLX\P[`HUKYLZLY]LZ ([+LJLTILY - - ;V[HSLX\P[`PU]LZ[TLU[HZH[+LJLTILY 180 ,X\P[`OVSKLYZVMWHYLU[ b) Analysis of the equity investments 5VUJVU[YVSSPUNPU[LYLZ[ Number of shares Valuation 8\V[LK At HKKP[PVUZ At At 1.1.2019 (KKP[PVUZ PUJYLHZL At PU]LZ[TLU[Z 1.1.2019 KPZWVZHSZ :OZ»TPSSPVU KPZWVZHSZ KLJYLHZL \UP[Z \UP[Z \UP[Z :OZ» PUTHYRL[ :OZ»TPSSPVU :\TTHYPZLKJHZOÅV^PUMVYTH[PVUMVY`LHYLUKPUN+LJLTILY Million value 6WLYH[PUNJHZOPUV\[ÅV^Z (129) :OZ»TPSSPVU 0U]LZ[PUNJHZOV\[ÅV^Z (261) -PUHUJPUNJHZOV\[ÅV^ ,HZ[(MYPJHU Portland Cement 5L[PUJYLHZLKLJYLHZLPUJHZOHUKJHZOLX\P]HSLU[Z Limited - 180 - c) Long-term investment Kenya Oil Company Limited - - - - - /PTH*LTLU[9^HUKH3PTP[LKH V^ULKZ\IZPKPHY`VM/PTH*LTLU[3PTP[LKLU[LYLKPU[VHQVPU[]LU[\YL 5V]LTILY [V\UKLY[HRLTHU\MHJ[\YLVMZVPSZ[HIPSPaLKIYPJRZ;OL1VPU[=LU[\YL^HZ[VILJHYYPLKV\[PU Valuation WOHZLKHWWYVHJO Number of shares 8\V[LK At HKKP[PVUZ At At 1.1.2018 (KKP[PVUZ PUJYLHZL At (ZH[+LJLTILY [OLWYVQLJ[OHKUV[[HRLUVќHUK[OLYLMVYL[OLPU]LZ[TLU[VM:OZTPSSPVU^HZ PU]LZ[TLU[Z 1.1.2018 KPZWVZHSZ :OZ»TPSSPVU KPZWVZHSZ KLJYLHZL \UP[Z \UP[Z \UP[Z :OZ» PUTHYRL[ :OZ»TPSSPVU PTWHPYLKILJH\ZL[OLYL^HZ]LY`SV^SPRLSPOVVKVMJVU[PU\PUN^P[O[OPZWYVQLJ[ Million value :OZ»TPSSPVU ,HZ[(MYPJHU Portland Cement Limited - - 180 Kenya Oil Company Limited 12 (16) - (16) (121) 180 156 157 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 20. GOODWILL 22. TRADE AND OTHER RECEIVABLES GROUP (a) Analysis of trade and other receivables: 2019 2018 Shs’million :OZ»TPSSPVU GROUP COMPANY +LJLTILY ([ILNPUUPUNHUKLUKVM[OL`LHY 2019 2018 2019 2018 9LZ[H[LK ;OLNVVK^PSSHTV\U[PUN[V:OZ TPSSPVUHYVZLMYVT[OLHJX\PZP[PVUVMHZ\IZPKPHY`/PTJLT/VSKPUNZ3PTP[LK Shs’million Shs’million PU /PTJLTPZ[OLTHQVYP[`V^ULYVM[OL.YV\W»ZVWLYH[PUN*VTWHU`PU +\YPUN :OZ IPSSPVU !:OZIPSSPVUHUK:OZ IPSSPVU !:OZ IPSSPVUMVY[OL.YV\WHUK :OVY[[LYTIHURKLWVZP[Z - - [OL*VTWHU`YLZWLJ[P]LS`^HZYLJVNUPZLKHZHUL_WLUZLMVYPU]LU[VYPLZ;OPZPZYLJVNUPZLKPUJVZ[VMZHSLZ 158 2,289 2,161 159 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 23. CASH AND CASH EQUIVALENTS (continued) 24. SHARE CAPITAL GROUP AND COMPANY I 9LJVUJPSPH[PVU[VJHZOÅV^Z[H[LTLU[ 2019 2018 -VY[OLW\YWVZLZVM[OLZ[H[LTLU[VMJHZOÅV^ZJHZOHUKJHZOLX\P]HSLU[ZJVTWYPZLIHSHUJLZ^P[OSLZZ[OHU Shs’million :OZ»TPSSPVU [OYLLTVU[OZ»TH[\YP[`MYVT[OLKH[LVMHJX\PZP[PVUPUJS\KPUNJHZOPUOHUKHUKKLWVZP[ZOLSKH[JHSS^P[OIHURZ (\[OVYPZLK HUKV[OLYZOVY[[LYTOPNOS`SPX\PKPU]LZ[TLU[Z^P[OVYPNPUHSTH[\YP[PLZVM[OYLLTVU[OZVYSLZZ(UHS`ZPZVMJHZO HUKJHZOLX\P]HSLU[ZPZHZZL[V\[ILSV^! VYKPUHY`ZOHYLZVM:OZ LHJO GROUP COMPANY YLKLLTHISLJ\T\SH[P]LWYLMLYLUJL 2019 2018 2019 2018 ZOHYLZVM:OZLHJO 2 2 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU )HURHUKJHZOIHSHUJLZ!5V[LH 2,289 2,161 )HURV]LYKYHM[Z5V[LJ - - 0ZZ\LKHUKM\SS`WHPK )HSHUJLZWLYZ[H[LTLU[VMJHZOÅV^Z 2,289 2,161 VYKPUHY`ZOHYLZVM:OZ LHJO (c) Analysis of bank overdrafts -\SS`WHPKVYKPUHY`ZOHYLZ^OPJOOH]LHWHY]HS\LVM:OZ LHJOJHYY`HYPNO[VMVUL]V[LWLYZOHYLHUKOH]LYPNO[Z *P[PIHUR5( 108 -- [VKP]PKLUKZ :[HUKHYK*OHY[LYLK)HUR ;OL.YV\WKVLZUV[OH]LHU\UJVUKP[PVUHSZL[[SLTLU[VM[OLSPHIPSP[`MVYH[SLHZ[TVU[OZHM[LY[OLYLWVY[PUN GROUP AND COMPANY period. 2019 2018 (d) Short term deposits Shs’million :OZ»TPSSPVU GROUP COMPANY At 1 January - 102 2019 2018 2019 2018 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU 5L[SVZZNHPUHYPZPUNVUYL]HS\H[PVUVMLX\P[`PU]LZ[TLU[Z5V[L I - (121) *HSSKLWVZP[ZH[HTVY[PZLKJVZ[ - - 9LJVNUPaLK[OYV\NOYL[HPULKLHYUPUNZ -19 0UJVTL[H_LќLJ[ - - ;OL^LPNO[LKH]LYHNLPU[LYLZ[YH[LZLHYULKVU[OLJHZOKLWVZP[LK^P[OSVJHSIHURZK\YPUN[OL`LHY^LYLHZ ZOV^UILSV^! ([+LJLTILY - - GROUP COMPANY 2019 2018 2019 2018 ;OLSVZZVUYL]HS\H[PVUVM[OLLX\P[`PU]LZ[TLU[OHZILLUYLJVNUPaLK[OYV\NO6*0\W[V[OLTH_PT\TH]HPSHISL HTV\U[ PU [OL MHPY ]HS\L YLZLY]L ;OL IHSHUJL OHZ ILLU YLJVNUPaLK KPYLJ[S` PU YL[HPULK LHYUPUNZ [OYV\NO [OL 3VJHSJ\YYLUJPLZ - - Z[H[LTLU[VMJOHUNLZPULX\P[`-=;6*0[YLH[TLU[OHZILLUPYYL]VJHIS`LSLJ[LKMVYHKVW[PVUVM0-9: -VYLPNUJ\YYLUJPLZ - - (e) Non-Cash transactions-Company c) Translation reserve ,_JOHUNLKPќLYLUJLZYLSH[PUN[V[OL[YHUZSH[PVUVM[OLUL[HZZL[ZVM[OL.YV\W»ZMVYLPNUVWLYH[PVUZMYVT[OLPY 0U [OLJVTWHU`[YHUZMLYYLKSHUK^P[OHUL[IVVR]HS\LVM:OZ TPSSPVU[VP[ZZ\IZPKPHY`JVTWHU`+PHUP M\UJ[PVUHS J\YYLUJ` [V [OL .YV\W»Z WYLZLU[H[PVU J\YYLUJ` 2LU`H ZOPSSPUNZ HYL YLJVNUPZLK KPYLJ[S` PU V[OLY ,Z[H[L3PTP[LKH[HJVUZPKLYH[PVUVM:OZ TPSSPVUPU[OLZOHYLZVM[OLZ\IZPKPHY`JVTWHU` JVTWYLOLUZP]L PUJVTL HUK HJJ\T\SH[LK PU [OL MVYLPNU J\YYLUJ` [YHUZSH[PVU YLZLY]L ,_JOHUNL KPќLYLUJLZ WYL]PV\ZS`HJJ\T\SH[LKPU[OLMVYLPNUJ\YYLUJ`[YHUZSH[PVUYLZLY]LHYLYLJSHZZPÄLK[VWYVÄ[VYSVZZVUKPZWVZHSVY 160 WHY[PHSKPZWVZHSVMHMVYLPNUVWLYH[PVU 161 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 26. DEFERRED TAX LIABILITY 26. DEFERRED TAX LIABILITY (continued) +LMLYYLK[H_LZHYLJHSJ\SH[LKVUHSS[LTWVYHY`KPќLYLUJLZ\UKLY[OLSPHIPSP[`TL[OVK\ZPUNHWYPUJPWHS[H_YH[LVM 7YVÄ[ Other Foreign At ! ;OLTHRL\WVM[OLKLMLYYLK[H_SPHIPSP[`H[[OL`LHYLUKHUK[OLTV]LTLU[VU[OLKLMLYYLK[H_ At or (loss) comprehensive exchange 31 HJJV\U[K\YPUN[OL`LHYHYLHZWYLZLU[LKILSV^! 1 January (Note income (Note adjustment/ December GROUP 2018 12(a)) 12(a)) other 2018 7YVÄ[ Other Foreign At Shs’million Shs’million Shs’million Shs’million Shs’million At or (loss) comprehensive exchange 31 1 January (Note income (Note adjustment/ December 2019 12(a)) 12(a)) other 2019 GROUP 7YVWLY[`WSHU[HUKLX\PWTLU[ - Shs’million Shs’million Shs’million Shs’million Shs’million Property, plant and 7YV]PZPVUMVYZ[HќNYH[\P[` LX\PWTLU[ -- SVUNZLY]PJLH^HYKZHUKSLH]L 6 - (210) )VU\ZWH`HISL (68) - - (61) 7YV]PZPVUMVYZP[L --- YLZ[VYH[PVUHUKSP[PNH[PVU 5L[MVYLPNUL_JOHUNLNHPU JVZ[Z (8) - - 5L[MVYLPNUL_JOHUNLSVZZ 8 -- )VU\ZWH`HISL (61) (2) - - 7YV]PZPVUMVYZP[LYLZ[VYH[PVU HUKSP[PNH[PVUJVZ[Z 12 - - -VYLPNUL_JOHUNL 7YV]PZPVUMVYIHKKLI[Z (60) - (92) SVZZLZNHPUZ -- ;H_SVZZLZ --- 7YV]PZPVUMVYZ[HќNYH[\P[` 7YV]PZPVUMVYVIZVSL[L SVUNZLY]PJLH^HYKZHUK PU]LU[VYPLZ 11 - (218) leave (210) 22 (6) - (182) 7YV]PZPVUMVY7L[JVRLHUK 7YV]PZPVUMVYVIZVSL[L ZSHN - - (10) PU]LU[VYPLZ (218) (12) - - 7YV]PZPVUMVYZP[LPU]LU[VY` -- 7YV]PZPVUMVYIHKKLI[Z - - (190) 7YV]PZPVUMVYJ\Z[VTLY YLIH[LZ - - (18) 7YV]PZPVUMVYJ\Z[VTLY YLIH[LZ (18) (21) - - 7YV]PZPVUMVY^HNLPUJYLTLU[ (12) 12 - - - 7YV]PZPVUMVYYLZ[Y\J[\YPUN --- -VYLPNUJ\YYLUJ`[YHUZSH[PVU NHPUSVZZVU[YHUZSH[PVUZ - - - (9) ;H_SVZZLZ -- -HPY]HS\LVUHZZL[OLSKMVY 12 (12) - - - Foreign currency ZHSL [YHUZSH[PVUSVZZLZNHPUZ 7YV]PZPVUMVYUVUYLJV]LYHISL VU[YHUZSH[PVUZ (9) - - 2 JVZ[Z - (66) - - (66) 7YV]PZPVUMVYYLZ[Y\J[\YPUN - -- 7YV]PZPVUMVY7L[JVRLHUK - - ZSHN (10) 10 - - - ;H_SVZZLZ - 7YV]PZPVUMVYZP[L inventory --- 6[OLYWYV]PZPVUZ (98) (98) ;OLMVYLPNUL_JOHUNLHKQ\Z[TLU[ZHYPZLMYVT[OL[YHUZSH[PVUVM[OLJHYY`PUNHTV\U[ZVMKLMLYYLK[H_OLSKI`H 9L]HS\H[PVUZ\YWS\Z - Z\IZPKPHY`/PTJLT/VSKPUNZ3PTP[LK 7YV]PZPVUMVYUVU YLJV]LYHISLJVZ[Z (66) 66 - - - (6) 2 (ZH[+LJLTILY [OL.YV\WOHKHKLMLYYLK[H_HZZL[HTV\U[PUN[V:OTPSSPVU ¶:O TPSSPVUHYPZPUNMYVT[H_SVZZLZ^OPJOOHZILLUYLJVNUPZLKPU[OLÄUHUJPHSZ[H[LTLU[Z;OLNYV\WOHZPZVM[OL]PL^ [OH[[OLKLMLYYLKHZZL[Z^PSSILYLJV]LYHISL\ZPUN[OLLZ[PTH[LKM\[\YL[H_HISLPUJVTLIHZLKVU[OLHWWYV]LK I\ZPULZZWSHUZHUKI\KNL[Z 162 163 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 26. DEFERRED TAX LIABILITY (continued) 27. PROVISIONS At 7YVÄ[VY Other At Year ended 31 December 2019 1 January loss comprehensive 31 December Site restoration 2019 2019 (Note 12 (a)) income 2019 COMPANY GROUP and litigation Leave pay Total Shs’million Shs’million Shs’million Shs’million Shs’ million Shs’ million Shs’ million At beginning of year 289 69 7YVWLY[`WSHU[HUKLX\PWTLU[ - 7YV]PZPVUMVYZP[LYLZ[VYH[PVUHUK (KKP[PVUHSWYV]PZPVUZ 12 22 SP[PNH[PVUJVZ[Z (28) <[PSPZLKK\YPUN[OL`LHY (18) )VU\ZWH`HISL - (28) At end of year 297 77 374 -VYLPNUL_JOHUNLSVZZLZNHPUZ (2) 9 - *H[LNVYPZLKHZ! 7YV]PZPVUMVYZ[HќNYH[\P[`SVUNZLY]PJL Current portion 12 89 H^HYKZHUKSLH]L (181) (9) 5VUJ\YYLU[WVY[PVU - 7YV]PZPVUMVYVIZVSL[LPU]LU[VYPLZ (68) - (81) 297 77 374 7YV]PZPVUMVYIHKKLI[Z - (60) 7YV]PZPVUMVYJ\Z[VTLYYLIH[LZ (10) (1) - (11) COMPANY 7YV]PZPVUMVYYLZ[Y\J[\YPUN (28) 28 - - At beginning of year 257 29 286 ;H_SVZZLZ (628) - (91) (KKP[PVUHSWYV]PZPVUZ 12 18 2,620 259 (9) 2,870 <[PSPZLKK\YPUN[OL`LHY (2) (6) At end of year *H[LNVYPZLKHZ! At 7YVÄ[VY Other At Current portion 12 1 January loss comprehensive 31 December COMPANY 2018 (Note 12 (a)) income 2018 5VUJ\YYLU[WVY[PVU - Shs’million Shs’million Shs’million Shs’million At end of year Year ended 31 December 2018 7YVWLY[`WSHU[HUKLX\PWTLU[ - 7YV]PZPVUMVYZP[LYLZ[VYH[PVUHUK :P[LYLZ[VYH[PVU 2018 SP[PNH[PVUJVZ[Z (28) - .96<7 and litigation Leave pay Total )VU\ZWH`HISL 12 - :OZ»TPSSPVU :OZ»TPSSPVU Shs’ million -VYLPNUL_JOHUNLNHPUZSVZZLZ 9 (11) - (2) At beginning of year 921 7YV]PZPVUMVYZ[HќNYH[\P[`SVUNZLY]PJL (KKP[PVUHSWYV]PZPVUZ 128 29 H^HYKZHUKSLH]L (19) (181) <[PSPZLKK\YPUN[OL`LHY (12) 7YV]PZPVUMVYVIZVSL[LPU]LU[VYPLZ - (68) At end of year 289 69 358 7YV]PZPVUMVYIHKKLI[Z (22) - 7YV]PZPVUMVYJ\Z[VTLYYLIH[LZ - (10) *H[LNVYPZLKHZ! Current portion - 69 69 7YV]PZPVUMVYYLZ[Y\J[\YPUN - (28) - (28) 289 . 289 -HPY]HS\LVUHZZL[OLSKMVYZHSL 12 (12) - - 5VUJ\YYLU[WVY[PVU 289 69 358 ;H_SVZZLZ - (628) - (628) 2,451 164 5 2,620 *647(5@ (ZH[+LJLTILY [OL*VTWHU`OHKHKLMLYYLK[H_HZZL[HTV\U[PUN[V:O TPSSPVU ¶:O At beginning of year 614 29 643 TPSSPVUHYPZPUNMYVT[H_SVZZLZ^OPJOOHZILLUYLJVNUPZLKPU[OLÄUHUJPHSZ[H[LTLU[Z;OL*VTWHU`OHZPZVM[OL (KKP[PVUHSWYV]PZPVUZ 68 ]PL^[OH[[OLKLMLYYLKHZZL[Z^PSSILYLJV]LYHISL\ZPUN[OLLZ[PTH[LKM\[\YL[H_HISLPUJVTLIHZLKVU[OLHWWYV]LK I\ZPULZZWSHUZHUKI\KNL[Z <[PSPZLKK\YPUN[OL`LHY (8) At end of year 29 286 *H[LNVYPZLKHZ! Current portion - 29 29 5VUJ\YYLU[WVY[PVU - 257 29 286 164 ;OLWYV]PZPVUMVYZP[LYLZ[VYH[PVUHUKSP[PNH[PVUYLSH[LZ[VM\[\YLV\[ÅV^Z[OH[^PSSILYLX\PYLK[VZL[[SLYLSH[LKSPHIPSP[PLZ 165 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 27. PROVISIONS (continued) 28. EMPLOYEE BENEFIT LIABILITIES (continued) ;OL.YV\WTHRLZM\SSWYV]PZPVUMVY[OLM\[\YLJVZ[VMYLOHIPSP[H[PUNP[ZX\HYY`ZP[LZHUKYLSH[LKWYVK\J[PVUMHJPSP[PLZVU Year ended 31 December 2018 HKPZJV\U[LKIHZPZH[[OL[PTLVMKL]LSVWPUN[OLX\HYYPLZHUKPUZ[HSSPUNHUK\ZPUN[OLMHJPSP[PLZ;OLZP[LYLZ[VYH[PVU Group Company WYV]PZPVUYLWYLZLU[Z[OLWYLZLU[]HS\LVMYLOHIPSP[H[PVUJVZ[ZYLSH[PUN[VX\HYY`ZP[LZ;OLZLWYV]PZPVUZOH]LILLU Long Long service JYLH[LKIHZLKVU[OL.YV\W»ZPU[LYUHSLZ[PTH[LZHUKHZZ\TW[PVUZIHZLKVU[OLJ\YYLU[LJVUVTPJLU]PYVUTLU[ service Gratuity Total award Gratuity Total ^OPJOTHUHNLTLU[ILSPL]LZHYLHYLHZVUHISLIHZPZ\WVU^OPJO[VLZ[PTH[L[OLM\[\YLSPHIPSP[`;OLZLLZ[PTH[LZHYL award YL]PL^LKYLN\SHYS`[V[HRLPU[VHJJV\U[HU`TH[LYPHSJOHUNLZ[V[OLHZZ\TW[PVUZ Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million ;OLHJ[\HSYLZ[VYH[PVUJVZ[Z^PSSKLWLUK\WVUM\[\YLTHYRL[WYPJLZMVY[OLULJLZZHY`YLOHIPSP[H[PVU^VYRZYLX\PYLK [OH[^PSSYLÅLJ[THYRL[JVUKP[PVUZH[[OLYLSL]HU[[PTL;OL[PTPUNVM[OLYLOHIPSP[H[PVUPZSPRLS`[VKLWLUKVU^OLU[OL 6WLUPUNLTWSV`LLILULÄ[ X\HYYPLZJLHZL[VWYVK\JLH[LJVUVTPJHSS`]PHISLYH[LZ;OPZPU[\YU^PSSKLWLUK\WVUM\[\YLTH[LYPHSWYPJLZ^OPJO obligation 22 HYLPUOLYLU[S`\UJLY[HPU *\YYLU[ZLY]PJLJVZ[JOHYNLK 6 ;OLHTV\U[VMSP[PNH[PVUWYV]PZPVUZTHKLPZIHZLKVU[OL.YV\W»ZHZZLZZTLU[VM[OLIHZPZMVY[OLJSHPTZHUK[OLSL]LS [VWYVÄ[VYSVZZJVZ[VMZHSLZ VMYPZRVUHJHZLI`JHZLIHZPZ;OLWYV]PZPVUKLWLUKZVU[OL.YV\W»ZHZZLZZTLU[VM[OLZ[HNLVM[OLWYVJLLKPUNZ )LULÄ[ZWH`TLU[Z (9) (126) HUK[OLHYN\TLU[ZPUP[ZKLMLUJL;OLVJJ\YYLUJLVML]LU[ZK\YPUNWYVJLLKPUNZTH`SLHK[VHYLHWWYHPZHSVM[OLYPZR 0U[LYLZ[JVZ[JOHYNLK[V at any time. WYVÄ[VYSVZZJVZ[ 6 61 Actuarial gain-credited to 3LH]LWH`YLSH[LZ[VLTWSV`LLILULÄ[ZPU[OLMVYTVMHUU\HSSLH]LLU[P[SLTLU[ZWYV]PKLKMVY^OLU[OL`HJJY\L[V V[OLYJVTWYLOLUZP]LPUJVTL (2) (19) (21) (1) (16) LTWSV`LLZ^P[OYLMLYLUJL[VZLY]PJLZYLUKLYLK\W[V[OLYLWVY[PUNKH[L,TWSV`LLZHYLLU[P[SLK[VJHYY`MVY^HYKH ;YHUZSH[PVUNHPUZ - (1) (1) - - - TH_PT\TVMSLH]L^VYRPUNKH`ZWLYHUU\T^OPJOZOV\SKILM\SS`\[PSPZLKI`[OLLUKVM[OLMVSSV^PUN`LHY *SVZPUNLTWSV`LLILULÄ[ obligation 22 28. EMPLOYEE BENEFIT LIABILITIES *H[LNVYPZLKHZ! Service gratuity and long service Current portion 6 5VUJ\YYLU[WVY[PVU ;OLWYV]PZPVUZMVYZLY]PJLNYH[\P[`HUKSVUNZLY]PJLH^HYKZYLWYLZLU[LU[P[SLTLU[Z[OH[HJJY\LHZHYLZ\S[VMZLY]PJLZ VќLYLKI`LTWSV`LLZ;OLZLHYLJSHZZPÄLKHZKLÄULKILULÄ[WSHUZHUKHYLUV[M\UKLK;OLJVZ[HUK[OLWYLZLU[ ]HS\LVM[OLVISPNH[PVUVM[OLZLY]PJLNYH[\P[`HUKSVUNZLY]PJLH^HYKZHYLKL[LYTPULK\ZPUNHJ[\HYPHS]HS\H[PVUZI`HU independent actuarial valuer. Total 22 ;OLMVSSV^PUN[HISLZ\TTHYPZLZ[OLJVTWVULU[ZVMUL[ILULÄ[L_WLUZLYLJVNUPZLKPU[OLZ[H[LTLU[VMWYVÄ[VYSVZZ ;OLWYPUJPWHSHJ[\HYPHSHZZ\TW[PVUZ\ZLKPUKL[LYTPUPUNZLY]PJLNYH[\P[`HUKSVUNZLY]PJLH^HYKZVISPNH[PVUZMVY[OL HUKV[OLYJVTWYLOLUZP]LPUJVTLHUK[OLHTV\U[ZYLJVNUPZLKPU[OLZ[H[LTLU[VMÄUHUJPHSWVZP[PVUMVY[OLYLZWLJ[P]L .YV\W»ZWSHUZHYLZOV^UILSV^! WSHUZ! 2019 2018 Year ended 31 December 2019 Kenya Uganda Kenya Uganda Group Company Long Long 0U[LYLZ[YH[L service service award Gratuity Total award Gratuity Total -\[\YLZHSHY`PUJYLHZLZ Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million 3VUNZLY]PJLH^HYKLZJHSH[PVUYH[L 6WLUPUNLTWSV`LLILULÄ[ obligation 22 Other disclosures *\YYLU[ZLY]PJLJVZ[JOHYNLK[V WYVÄ[VYSVZZJVZ[VMZHSLZ 21 21820 Mortality rate )LULÄ[ZWH`TLU[Z (6) (110) (99) ;OLHJ[\HY`\ZLZHJ[P]LZ»TVY[HSP[`( \S[PTH[LHUKWLUZPVULYZ»TVY[HSP[`( HZ[OLIHZL[HISLZVMZ[HUKHYK 0U[LYLZ[JVZ[JOHYNLK[VWYVÄ[ TVY[HSP[`YH[LZ:[H[PZ[PJHSTL[OVKZHYL\ZLK[VHKQ\Z[[OLYH[LZYLÅLJ[LKVU[OLIHZL[HISLIHZLKVU[OL*VTWHU`»Z 6 VYSVZZJVZ[ L_WLYPLUJLVMPTWYV]LTLU[VY^VYZLUPUNVMTVY[HSP[` (J[\HYPHSSVZZJOHYNLK[VV[OLY JVTWYLOLUZP]LPUJVTL (9) 29 20 (1) *SVZPUNLTWSV`LLILULÄ[ obligation 21 *H[LNVYPZLKHZ! Current portion 8 6 5VUJ\YYLU[WVY[PVU 28 Total 21 166 167 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 28. EMPLOYEE BENEFIT LIABILITIES (continued) 29. TRADE AND OTHER PAYABLES Other disclosures (continued) GROUP COMPANY Sensitivity of the Results: 2019 2018 2019 2018 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU ;YHKLWH`HISLZ ;OLYLZ\S[ZVM[OLHJ[\HYPHS]HS\H[PVU^PSSILTVYLZLUZP[P]L[VJOHUNLZPU[OLÄUHUJPHSHZZ\TW[PVU[OHUJOHUNLZPU[OL 2,819 2,682 KLTVNYHWOPJHZZ\TW[PVUZ0UWYLWHYPUN[OLZLUZP[P]P[`HUHS`ZPZVM[OLYLZ\S[Z[V[OLKPZJV\U[YH[L\ZLK[OLHJ[\HYPLZ (JJY\LKL_WLUZLZ 608 OH]LYLSPLKVU[OLJHSJ\SH[PVUZVM[OLK\YH[PVUVM[OLSPHIPSP[`)HZLKVU[OPZTL[OVKVSVN`[OLYLZ\S[ZVM[OLZLUZP[P]P[` 6[OLYWH`HISLZ 821 HUHS`ZPZHYLZ\TTHYPZLKPU[OL[HISLILSV^! 7H`HISL[VYLSH[LKJVTWHUPLZ5V[LI (X\HU[P[H[P]LZLUZP[P]P[`HUHS`ZPZMVYZPNUPÄJHU[HZZ\TW[PVUHZH[+LJLTILY PZHZZOV^UILSV^! Interest rate Future salary increases Award escalation rate ;LYTZHUKJVUKP[PVUZVM[OLHIV]LÄUHUJPHSSPHIPSP[PLZ! Group rate +1/2% -1/2% +1/2% -1/2% +1/2% -1/2% • ;YHKLWH`HISLZHUKWH`HISLZ[VYLSH[LKWHY[PLZHYLUVUPU[LYLZ[ILHYPUNHUKHYLUVYTHSS`ZL[[SLKVUH¶ KH` [LYTZ Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million • 6[OLYWH`HISLZHYLUVUPU[LYLZ[ILHYPUNHUKOH]LHUH]LYHNL[LYTVMSLZZ[OHUVULTVU[O;OLZLTHPUS`YLSH[L[V Gratuity HTV\U[ZK\L[VZ[H[\[VY`IVKPLZPUYLZWLJ[[V`LHYLUKZ[HќKLK\J[PVUZ 3VUNZLY]PJLH^HYKZ 30. CONTINGENT LIABILITIES Total a) Guarantees Company Interest rate Salary escalation rate Award escalation rate +1/2% -1/2% +1/2% -1/2% +1/2% -1/2% GROUP COMPANY Shs’million Shs’million Shs’million Shs’million Shs’million Shs’million 2019 2018 2019 2018 Gratuity Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU 3VUNZLY]PJLH^HYKZ .\HYHU[LLZHUKIVUKZPZZ\LKI`[OL .YV\W»ZIHURLYZPUMH]V\YVM2LU`H Total 9L]LU\L(\[OVYP[`HUK 0(: YLX\PYLZ[OLKPZJV\U[YH[L[VILKL[LYTPULKI`YLMLYLUJL[V[OLTHYRL[`PLSKZVU[OLYLWVY[PUNKH[LVUOPNO Court of Appeal Civil Appeal No. 155 of 2011 - Mining lease X\HSP[`JVYWVYH[LIVUKZVYPU[OLJV\U[YPLZ^OLYL[OLYLPZUVKLLWTHYRL[PUZ\JOIVUKZ[OLTHYRL[`PLSKZVU NV]LYUTLU[IVUKZ;OLJ\YYLUJ`HUK[LYTVM[OLJVYWVYH[LVYNV]LYUTLU[IVUKZZOV\SKILJVUZPZ[LU[^P[O[OL ;OPZ(WWLHSHYPZLZMYVT4PZJ*H\ZL VMPU[OL/PNO*V\Y[/PTH*LTLU[3PTP[LKPZJOHSSLUNPUN[OL J\YYLUJ`HUKLZ[PTH[LK[LYTVM[OLWVZ[LTWSV`TLU[ILULÄ[VISPNH[PVU0U[OLHIZLUJLVMHKLLWHUKSPX\PKTHYRL[ ÄUKPUNZVMHQ\KPJPHSYL]PL^PU^OPJO,HZ[(MYPJHU.VSK:UPѝUN*VTWHU`3PTP[LK[OLKLMLUKHU[YLJSHPTLK[OLPY PUZ\JOSVUNKH[LKZLJ\YP[PLZPU2LU`HHUK 30. CONTINGENCIES (continued) 32. CASH GENERATED FROM OPERATIONS c) Tax matters 9LJVUJPSPH[PVUVMWYVÄ[ILMVYL[H_[VJHZONLULYH[LKMYVTVWLYH[PVUZ! ;OL.YV\WPZYLN\SHYS`Z\IQLJ[LK[VL]HS\H[PVUZI`[OL[H_H[PVUH\[OVYP[PLZVMP[ZKPYLJ[HUKPUKPYLJ[[H_H[PVU HќHPYZHUKPUJVUULJ[PVU^P[OZ\JOYL]PL^Z[H_HZZLZZTLU[ZJHUILPZZ\LKI`[OL[H_H[PVUH\[OVYP[PLZPUYLZWLJ[ GROUP 2019 2018 VM[OL.YV\W»Z[H_H[PVUHќHPYZPUYLSH[PVU[VJHZLZ^OLYLHNYV\WLU[P[`PZKLLTLK[VOH]LMHPSLK[VJVTWS`^P[O 5V[LZ Shs’million :OZ»TPSSPVU [H_SH^Z 9LZ[H[LK 7YVÄ[ILMVYL[H_ 680 0U WYPVY `LHY [OL JVTWHU` YLHJOLK HU HNYLLTLU[ ^P[O [OL 2LU`H 9L]LU\L (\[OVYP[` VU H [H_ HZZLZZTLU[ YLSH[PUN[VWYPVY`LHYZ^OPJO[OLJVTWHU`OHKKPZW\[LK(M\SSZL[[SLTLU[VM[OLHNYLLKWYPUJPWHS[H_HTV\U[PUN Adjustments for: [V:OZ TPSSPVUYLSH[PUN[VJVYWVYH[L[H_=HS\L(KKLK;H_=(;HUK7(@,HUK:OZ TPSSPVUYLSH[PUN +LWYLJPH[PVUVUWYVWLY[`WSHU[HUKLX\PWTLU[ H 1,882 [VTHUHNLTLU[HUK[LJOUPJHSMLLZ^HZWHPKPU 4HUHNLTLU[OHZHWWSPLKMVYH^HP]LYVMPU[LYLZ[HUK (TVY[PZH[PVUVMPU[HUNPISLHZZL[Z 120 121 WLUHS[PLZHJJY\LKHTV\U[PUN[V:OZ288 million[OL+PYLJ[VYZHYLVM[OLVWPUPVU[OH[[OL^HP]LY^PSSILNYHU[LK +LWYLJPH[PVUVMYPNO[VM\ZLHZZL[Z 16(b) 221 - d) Borrowing facilities (TVY[PZH[PVUVMWYLWHPKSLHZLYLU[HSZ 16(a) -9 (TVY[PZH[PVUVMSPTLZ[VULYLZLY]LZ 11 ([[OLLUKVM[OL`LHY[OL.YV\WOHK^VYRPUNJHWP[HSMHJPSP[PLZHTV\U[PUN[V[V[HSVM:OZ IPSSPVU :OZ 0TWHPYTLU[VMWYVWLY[`WSHU[HUKLX\PWTLU[ H IPSSPVUV\[VM^OPJO[OL\UKYH^UMHJPSP[PLZHTV\U[LK[V:OZ IPSSPVU ¶:OZ IPSSPVU;OLKYH^U HTV\U[ZTHPUS`YLSH[L[VZ\WWSPLY[YHKLÄUHUJLIVUKZHUKN\HYHU[LLZ 0TWHPYTLU[VMSPTLZ[VULYLZLY]LZ I - 0U[LYLZ[PUJVTL PP (60) ;OL^VYRPUNJHWP[HSMHJPSP[PLZHYLHUU\HSMHJPSP[PLZ[OH[HYLZ\IQLJ[[VYL]PL^H[]HYPV\ZKH[LZK\YPUN[OL`LHY;OL` 0U[LYLZ[VUSLHZLSPHIPSP[` J - JVUZPZ[VMSL[[LYZVMJYLKP[HUKN\HYHU[LLZHTVUNV[OLYZ 0U[LYLZ[VUIVYYV^PUNZ 31. CAPITAL COMMITMENTS .HPUSVZZVUKPZWVZHSVMWYVWLY[`WSHU[HUKLX\PWTLU[ 8 (196) 2 Impairment of joint venture - 10 Authorised and contracted 5L[MVYLPNUL_JOHUNLSVZZLZNHPUZ (J[\HYPHSNHPUZVU,TWSV`LLZKLÄULKILULÄ[7LUZPVU *HWP[HSL_WLUKP[\YLJVU[YHJ[LKMVYH[[OLLUKVM[OLYLWVY[PUNWLYPVKI\[UV[YLJVNUPZLKPU[OLÄUHUJPHSZ[H[LTLU[ZPZ 6ISPNH[PVUZ (20) - HZMVSSV^Z! 6WLYH[PUNWYVÄ[ILMVYL^VYRPUNJHWP[HSJOHUNLZ GROUP COMPANY Changes in working capital balances: 2019 2018 2019 2018 0UJYLHZLKLJYLHZLPUPU]LU[VYPLZ Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU +LJYLHZLPULTWSV`LLZ»ILULÄ[SPHIPSP[PLZ (6) *VTTP[TLU[ZMVY[OLHJX\PZP[PVUVMWYVWLY[` 218 0-9: [YHUZP[PVUHKQ\Z[TLU[ - (298) 221 WSHU[HUKLX\PWTLU[ F +LJYLHZLPU[YHKLHUKV[OLYYLJLP]HISLZ 1,666 16 *VTTP[TLU[ZK\YPUN[OL`LHYYLSH[L[VJHWP[HSW\YJOHZLZVM77,P[LTZ`L[[VILKLSP]LYLKPUIV[O2LU`HHUK +LJYLHZLPUJYLHZLPUWYV]PZPVUZ GROUP COMPANY 2019 2018 2019 2018 Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU *VTTP[TLU[ZMVY[OLHJX\PZP[PVUVMWYVWLY[` - WSHU[HUKLX\PWTLU[ - - 170 171 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 32. CASH GENERATED FROM OPERATIONS 33. RELATED PARTY TRANSACTIONS 9LJVUJPSPH[PVUVMWYVÄ[ILMVYL[H_[VJHZONLULYH[LKMYVTVWLYH[PVUZ! 5V[L WYV]PKLZ[OLPUMVYTH[PVUHIV\[[OL.YV\W»ZZ[Y\J[\YLPUJS\KPUN[OLKL[HPSZVM[OLZ\IZPKPHYPLZ COMPANY ;OL\S[PTH[LWHYLU[VM[OL.YV\WPZ3HMHYNL/VSJPT3[KPUJVYWVYH[LKPU:^P[aLYSHUK;OLYLHYLV[OLYJVTWHUPLZ 2019 2018 ^OPJOHYLYLSH[LK[V)HTI\YP*LTLU[3PTP[LK[OYV\NOJVTTVUZOHYLOVSKPUNZHUKKPYLJ[VYZOPWZ 5V[LZ Shs’million Shs’million Restated (a) Related party transactions 7YVÄ[ILMVYL[H_ 1,292 ;OL*VTWHU`YLJLP]LZ[LJOUPJHSHZZPZ[HUJLMYVT[OLTHQVYP[`ZOHYLOVSKLY3HMHYNL/VSJPT3[K^OPJOPZWHPKMVY \UKLYHÄ]L`LHYHNYLLTLU[ (KQ\Z[TLU[ZMVY! +LWYLJPH[PVUVUWYVWLY[`WSHU[HUKLX\PWTLU[ 1,189 1,129 I ;OLMVSSV^PUN[YHUZHJ[PVUZ^LYLJHYYPLKV\[^P[OYLSH[LKWHY[PLZK\YPUN[OL`LHY (TVY[PZH[PVUVMPU[HUNPISLHZZL[Z (TVY[PZH[PVUVMWYLWHPKVWLYH[PUNSLHZL -1 Sales of Purchases of Interest goods and goods and received (ZZL[Z^YP[[LUVќ - services services 191 - +PTPU\[PVUVMPU]LZ[TLU[ZPUZ\IZPKPHYPLZ Shs’million Shs’million Shs’million 0U[LYLZ[PUJVTL GROUP 3VZZVUKPZWVZHSVMWYVWLY[`WSHU[HUKLX\PWTLU[ 8 - (QWLW\ZLWKVLJQLðFDQWLQñXHQFHRYHUWKH*URXS (J[\HYPHSNHPUZVU,TWSV`LLZKLÄULKILULÄ[7LUZPVU 6ISPNH[PVUZ 3HMHYNL:([LJOUPJHSZLY]PJLZ - 1,182 - 5L[MVYLPNUL_JOHUNLSVZZLZNHPUZ - 2018 - - 6WLYH[PUNWYVÄ[ILMVYL^VYRPUNJHWP[HSJOHUNLZ Other related companies Lafarge-Holcim Trading 2019 - - Changes in working capital balances: 2018 - - 0UJYLHZLKLJYLHZLPUPU]LU[VYPLZ 3HMHYNL,ULYN`:VS\[PVUZ - 1,268 - 109 2018 - 1,991 - +LJYLHZLPULTWSV`LLZ»ILULÄ[SPHIPSP[PLZ COMPANY +LJYLHZLPUJYLHZLPU[YHKLHUKV[OLYYLJLP]HISLZ ,U[P[`^P[OZPNUPÄJHU[PUÅ\LUJLV]LY[OL.YV\W! +LJYLHZLPUWYV]PZPVUZ (286) 3HMHYNL:( - - 0UJYLHZLPU[YHKLHUKV[OLYWH`HISLZ 2018 - - *HZONLULYH[LKMYVTVWLYH[PVUZ 2,999 Subsidiaries: Hima Cement Limited 2019 -- 2018 -- )HTI\YP:WLJPHS7YVK\J[Z3PTP[LK - 2018 - Other Related parties Lafarge-Holcim Trading 2019 - - 2018 - 2,020 - 3HMHYNL,ULYN`:VS\[PVUZ - 1,268 - 2018 - - (b) Outstanding balances arising from sale and purchase of goods and services to/from related companies at the year-end. 172 173 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 33. RELATED PARTY TRANSACTIONS (continued) 33. RELATED PARTY TRANSACTIONS (continued) (a) Related party transactions (continued) (c) Loan to a subsidiary 9,*,0=()3,:-9649,3(;,+7(9;0,: (ZH[[OLLUKVM[OL`LHY[OLIHSHUJLK\L[V[OL*VTWHU`PUYLZWLJ[VMHSVHU[VP[ZZ\IZPKPHY`)HTI\YP:WLJPHS 7YVK\J[Z3PTP[LKHTV\U[LK[V:OZ TPSSPVU :OZ TPSSPVU;OLSVHUPZ\UZLJ\YLKHUK[OLLќLJ[P]L PU[LYLZ[VU[OLSVHU^HZ ¶ ;OLSVHUYLWH`TLU[WLYPVKPZ`LHYZMYVT1HU\HY`;OL GROUP COMPANY SVHUJVTWYPZLZ! 2019 2018 2019 2018 COMPANY Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU 2019 2018 9LJLP]HISLZMYVTYLSH[LKWHY[PLZ Shs’million :OZ»TPSSPVU Lafarge France 10 10 10 10 3HMHYNL:V\[O(MYPJH Current portion 29 3HMHYNL;LJOUPJHS*LU[YL,\YVWL 2816 5VUJ\YYLU[WVY[PVU - *OPSHUNH*LTLU[7SJAHTIPH 6666 4HSH^P7VY[SHUK*LTLU[ 10888 ;OLTV]LTLU[PUSVHU[VZ\IZPKPHY`PZHZZOV^UILSV^! (ZOHRH*LTLU[*V -2 2 At 1 January Lafarge Cairo 7HPKK\YPUN[OL`LHY (29) (29) 3HMHYNL4,(0;ZLY]PJLZ 26 ([+LJLTILY 0U[LYLZ[JOHYNLKVU[OLHIV]LSVHU5V[L PP 6[OLYYLSH[LKWHY[PLZ 101 62 166 (d) Loan due to a subsidiary company-Non-current liability. GROUP COMPANY 2019 2018 2019 2018 0U /PTH*LTLU[3PTP[LKHZ\IZPKPHY`VM)HTI\YP*LTLU[3PTP[LKYLJLP]LK<:+TPSSPVUMYVT*LTHZJV Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU )=HYLSH[LKJVTWHU`;OL[LYTVM[OLSVHUPZ `LHYZ^P[OHTVYH[VYP\TVM`LHYZ;OLSVHUPZ\UZLJ\YLKHUK H[[YHJ[ZPU[LYLZ[VM 4VU[O<:+30)69 9LJLP]HISLZMYVTZ\IZPKPHYPLZ GROUP Hima Cement Limited - - 28 61 2019 2018 )HTI\YP:WLJPHS7YVK\J[Z3PTP[LK - - 290 Shs’million :OZ»TPSSPVU 3HMHYNL,JV:`Z[LTZ3PTP[LK - - )PUHZ[VYL3PTP[LK - - 69 At 1 January 2,010 - +PHUP,Z[H[L3PTP[LK - - (28) 3VHUYLJLP]LKK\YPUN[OL`LHY - - - 689 -VYLPNUL_JOHUNLSVZZ ;V[HSYLJLP]HISLZB5V[LHD 166 ;YHUZSH[PVUSVZZ 2 - 7H`HISLZ[VYLSH[LKWHY[PLZ ([+LJLTILY 2,010 /VSJPT;LJOUVSVN`3PTP[LK Lafarge France 3HMHYNL,JV:`Z[LTZ3PTP[LK - - 206 162 6[OLYYLSH[LKWHY[PLZ ;V[HSWH`HISLZ5V[L Terms and conditions of transactions and balances with related parties ;OL ZHSLZ [V HUK W\YJOHZLZ MYVT YLSH[LK WHY[PLZ HYL THKL VU [LYTZ HZ ZWLJPÄLK PU [OL [YHUZMLY WYPJPUN HYYHUNLTLU[IL[^LLU[OL.YV\WJVTWHUPLZ6\[Z[HUKPUNIHSHUJLZH[[OL`LHYLUKHYL\UZLJ\YLKHUKPU[LYLZ[ MYLL-VY[OL`LHYLUKLK+LJLTILY [OL.YV\WOHZUV[YLJVYKLKHU`PTWHPYTLU[VMYLJLP]HISLZYLSH[PUN [VHTV\U[ZV^LKI`YLSH[LKWHY[PLZ !5PS;OPZHZZLZZTLU[PZ\UKLY[HRLULHJOÄUHUJPHS`LHY[OYV\NO L_HTPUPUN[OLÄUHUJPHSWVZP[PVUVM[OLYLSH[LKWHY[`HUK[OLTHYRL[PU^OPJO[OLYLSH[LKWHY[`VWLYH[LZ;OLYL OH]LILLUUVN\HYHU[LLZVYJVTTP[TLU[ZWYV]PKLKVYYLJLP]LKMVYHU`YLSH[LKWHY[`YLJLP]HISLZVYWH`HISLZ 174 175 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 33. RELATED PARTY TRANSACTIONS (continued) 34. BIOLOGICAL ASSETS (GROUP AND COMPANY) (e) Key management personnel compensation )PVSVNPJHSHZZL[ZJVTWYPZLL\JHS`W[\ZJHZ\HYPUHJHZZPZPHTLHHUKULLT[YLLWSHU[H[PVUZ;OLZLHYLJHYYPLKH[MHPY ]HS\LSLZZJVZ[Z[VZLSS;OLMHPY]HS\LZVM[OL[YLLZWSHU[H[PVUZPZKL[LYTPULKI`JVTWHU`»ZPU[LYUHS]HS\H[PVUL_WLY[Z ;OLYLT\ULYH[PVUVMKPYLJ[VYZHUKTLTILYZVMRL`THUHNLTLU[K\YPUN[OL`LHY^HZHZMVSSV^Z! IHZLKVUYLJLU[THYRL[[YHUZHJ[PVUWYPJLZ GROUP AND COMPANY ;OLJVTWHU`JVTTLUJLKOHY]LZ[PUNVM[OL^L[THZZMVYKY`PUNK\YPUN[OL`LHY;OL^L[THZZPZUV[ZPNUPÄJHU[S` 2019 2018 KPќLYLU[MYVT[OL[YLLWSHU[H[PVU Shs’million :OZ»TPSSPVU ;OLMHPY]HS\LVM[OL[YLLWSHU[H[PVUOHZYLTHPULK[OLZHTLHZWYPVY`LHYK\L[VTPUPTHSIPVSVNPJHS[YHUZMVYTH[PVUHZ [OL[YLLZOH]LTH[\YLK0UHKKP[PVU[OLTHYRL[WYPJLMVY[OLZLIPVSVNPJHSHZZL[ZOHZYLSH[P]LS`YLTHPULK[OLZHTLHZ Fees for services as a director SHZ[`LHY Executive -- 5VUL_LJ\[P]L 16 (a) Non-current assets Total directors’ fees 16 13 *OHUNLZPUJHYY`PUNHTV\U[ZVMUVUJ\YYLU[IPVSVNPJHSHZZL[ZJVTWYPZL! Emoluments for directors 2019 2018 :HSHYPLZHUKIVU\ZLZ 61 Shs’million :OZ»TPSSPVU :OVY[[LYTLTWSV`LLILULÄ[Z Year ended 31 December 2019 7VZ[LTWSV`TLU[WLUZPVUKLÄULKJVU[YPI\[PVU 12 9 Total emoluments for directors 130 113 ([Z[HY[VM`LHY ;YHUZMLY[VJ\YYLU[HZZL[Z .\HYHU[LLKSVHUZ[VL_LJ\[P]LKPYLJ[VYZ - 1 At end of year (c) Current assets ,TVS\TLU[ZMVYRL`THUHNLTLU[WLYZVUULSL_JS\KPUN[OLKPYLJ[VYZ! :HSHYPLZHUKIVU\ZLZ 119 Growing biological assets ready for use as at the reporting date :OVY[[LYTLTWSV`LLILULÄ[Z At start of year - 7VZ[LTWSV`TLU[WLUZPVUKLÄULKJVU[YPI\[PVU 9 6 ;YHUZMLYMYVTUVUJ\YYLU[HZZL[Z ;V[HSLTVS\TLU[ZMVYRL`THUHNLTLU[WLYZVUHS 168 161 At end of year Total emoluments for directors and other key management ;OLMVSSV^PUN[HISLWYLZLU[Z[OL*VTWHU`»ZIPVSVNPJHSHZZL[Z[OH[HYLTLHZ\YLKH[MHPY]HS\LH[+LJLTILY personnel 314 288 " GROUP AND COMPANY Level 1 Level 2 Level 3 2019 2018 :OZ»TPSSPVU :OZ»TPSSPVU :OZ»TPSSPVU Shs’million :OZ»TPSSPVU Biological assets-trees - - .\HYHU[LLKSVUN[LYTSVHUZ[VRL`THUHNLTLU[Z[Hќ 1 ;OLYL^LYLUV[YHUZMLYZIL[^LLUHU`SL]LSZK\YPUN[OL`LHY .\HYHU[LLKSVUN[LYTSVHUZ[VL_LJ\[P]LKPYLJ[VYZHUKRL` THUHNLTLU[WLYZVUULS 2 Terms and conditions of the guaranteed long-term loan ;OLSVUN[LYTSVHUZ[VL_LJ\[P]LKPYLJ[VYZHUKRL`THUHNLTLU[Z[HќHYLPZZ\LKHZWHY[VM[OLLTWSV`LLILULÄ[ MYVT[OLNLULYHSSVHUZMVY\UZLJ\YLKSVHUZMYVT*P[PIHUR;OL*VTWHU`HJ[ZHZ[OLN\HYHU[VYMVY[OLZLSVHUZ (U`N\HYHU[LLKSVHUZ[OH[L_JLLK:OZ TPSSPVUYLX\PYLHZLJ\YP[`MYVTHSSZ[Hќ;OLSVHUZHYLH[HJVTWHU` negotiated rate. 176 177 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 35. LEASES LIABILITY 36. PRIOR YEAR ADJUSTMENTS-GROUP Group ;OLWYPVY`LHYHKQ\Z[TLU[PZH[[YPI\[HISL[VLYYVYZPUHJJV\U[PUNMVY=(;PU HUK 0U [OL @LHY Result for the year @LHY @LHY 2018 2018 2018 Shs’ million Shs’ million Shs’ million @LHY Owners Non @LHY of company controlling Total interest @LHY VU^HYKZ - 7YVÄ[SVZZMVY[OL`LHYHZWYL]PV\ZS` 890 reported 7YPVYWLYPVKHKQ\Z[TLU[Z (29) ______ 7YVÄ[MVY[OL`LHYHZYLZ[H[LK 861 (289) ======Earnings per share (EPS) - basic and diluted ,7:MVY[OL`LHYHZWYL]PV\ZS`YLWVY[LK for 2018 ====== ,7:MVY[OL`LHYHZYLZ[H[LKMVY ====== 178 179 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 37. ASSETS HELD FOR SALE 39. FINANCIAL RISK MANAGEMENT (continued) +\YPUN[OL)VHYKTLL[PUNVM[OL.YV\WOLSKVU 1\UL [OLKPYLJ[VYZHWWYV]LKKPZWVZHSVMHZZL[ZOLSKI`H Risk Management Framework (continued) Z\IZPKPHY`^OLYLI`[OLZ\IZPKPHY`^PSSZLSSWSHU[THJOPULY`M\YUP[\YLHUKLX\PWTLU[[VH[OPYKWHY[` 2019 ;OL*VYWVYH[L;YLHZ\Y`M\UJ[PVUYLWVY[ZX\HY[LYS`[V[OL3HMHYNL/VSJPTYPZRTHUHNLTLU[JVTTP[[LLHUPUKLWLUKLU[ 2019 IVK`[OH[TVUP[VYZYPZRZHUKWVSPJPLZPTWSLTLU[LK[VTP[PNH[LYPZRL_WVZ\YLZ Shs’ million ;OL)VHYKVM+PYLJ[VYZYL]PL^ZHUKHNYLLZWVSPJPLZMVYTHUHNPUNLHJOVM[OLZLYPZRZ^OPJOHYLZ\TTHYPZLKILSV^! (ZZL[ZJSHZZPÄLKHZOLSKMVYZHSL P 4HYRL[YPZR 7SHU[HUKTHJOPULY`5V[L H -\YUP[\YLHUKLX\PWTLU[5V[L H 4HYRL[YPZRPZ[OLYPZRHYPZPUNMYVTJOHUNLZPUTHYRL[WYPJLZZ\JOHZPU[LYLZ[YH[LZLX\P[`WYPJLZHUKMVYLPNU ___ L_JOHUNLYH[LZ^OPJO^PSSHќLJ[[OL.YV\W»ZPUJVTLVY[OL]HS\LVMP[ZOVSKPUNVMÄUHUJPHSPUZ[Y\TLU[Z;OL VIQLJ[P]L VM THYRL[ YPZR THUHNLTLU[ PZ [V THUHNL HUK JVU[YVS THYRL[ YPZR L_WVZ\YLZ ^P[OPU HJJLW[HISL === WHYHTL[LYZ^OPSLVW[PTPZPUN[OLYL[\YU6]LYHSSYLZWVUZPIPSP[`MVYTHUHNPUNTHYRL[ 38. RETIREMENT BENEFITS SCHEME YPZRYLZ[Z^P[O[OL.YV\W-PUHUJL+PYLJ[VY;OL.YV\W»Z-PUHUJL+LWHY[TLU[PZYLZWVUZPISLMVY[OLKL]LSVWTLU[ VMKL[HPSLKYPZRTHUHNLTLU[WVSPJPLZZ\IQLJ[[VYL]PL^HUKHWWYV]HSI`.YV\W-PUHUJL+PYLJ[VYHUKMVY[OLKH` ;OL.YV\WVWLYH[LZHKLÄULKJVU[YPI\[PVUYL[PYLTLU[WSHUMVY[OLUVU\UPVUPZLKLTWSV`LLZ;OLHZZL[ZVM[OLWSHUZ [VKH`PTWSLTLU[H[PVUVM[OVZLWVSPJPLZ HYLOLSKZLWHYH[LS`MYVT[OVZLVM[OL.YV\WPUM\UKZ\UKLY[OLJVU[YVSVM[Y\Z[LLZ;OLZJOLTLPZHKTPUPZ[LYLKI` HUPUKLWLUKLU[HKTPUPZ[YH[PVU*VTWHU`HUKPZM\UKLKI`JVU[YPI\[PVUZMYVT[OL.YV\WJVTWHUPLZHUKLTWSV`LLZ ;OLYLOHZILLUUVJOHUNL[V[OL.YV\W»ZL_WVZ\YL[VTHYRL[YPZRZVY[OLTHUULYPU^OPJOP[TLHZ\YLZHUK ;OL.YV\W»ZVISPNH[PVUZ[V[OLZ[HќYL[PYLTLU[ILULÄ[ZWSHUZHYLJOHYNLK[VWYVÄ[VYSVZZHZ[OL`MHSSK\LHUKHZ[OL` THUHNLZ[OLYPZR HJJY\L[VLHJOLTWSV`LL H -VYLPNUJ\YYLUJ`YPZRTHUHNLTLU[ ;OL.YV\WHSZVTHRLZJVU[YPI\[PVUZ[V[OLZ[H[\[VY`KLÄULKJVU[YPI\[PVUZJOLTLZPU[OL[^VJV\U[YPLZ^OLYLP[Z VWLYH[PVUZHYLIHZLK;OLVUS`VISPNH[PVUVM[OL.YV\W^P[OYLZWLJ[[V[OLYL[PYLTLU[ILULÄ[WSHUPZ[VTHRL[OL ;OL .YV\W \UKLY[HRLZ JLY[HPU [YHUZHJ[PVUZ KLUVTPUH[LK PU MVYLPNU J\YYLUJPLZ ;OLYLMVYL L_WVZ\YLZ [V ZWLJPÄLKJVU[YPI\[PVUZ L_JOHUNL YH[L Å\J[\H[PVUZ HYPZL -VYLPNU L_JOHUNL YPZR HYPZLZ MYVT M\[\YL JVTTLYJPHS [YHUZHJ[PVUZ YLJVNUPZLK HZZL[Z HUK SPHIPSP[PLZ ;OL NYV\W THUHNLZ MVYLPNU L_JOHUNL YPZR I` JVU]LY[PUN P[Z MVYLPNU ;OL[V[HSL_WLUZLYLJVNUPZLKPUWYVÄ[VYSVZZVM:OZ TPSSPVU !:OZ TPSSPVUHUK:OZ TPSSPVU ! J\YYLUJ`JVSSLJ[PVUZPU[VSVJHSJ\YYLUJ`VUHUVUNVPUNIHZPZ[VJH[LYMVYP[ZVWLYH[PVUHSYLX\PYLTLU[Z;OL :OZ TPSSPVUYLWYLZLU[ZJVU[YPI\[PVUZWH`HISL[V[OLZLWSHUZI`[OL.YV\WHUK*VTWHU`YLZWLJ[P]LS`H[YH[LZ NYV\WYHPZLZZVTLIPSSZPUMVYLPNUJ\YYLUJ`HUKYLJLP]LZ[OLZL[[SLTLU[ZPU[OLZHTLJ\YYLUJ`[VH]VPK[OL ZWLJPÄLKPU[OLY\SLZVM[OLWSHUZ;OLL_WLUZLOHZILLUPUJS\KLK^P[OPU[OLYL[PYLTLU[ILULÄ[ZJVZ[Z\UKLYZ[Hќ LќLJ[VMZ^PUNPUNJ\YYLUJ`L_JOHUNLYH[LZ JVZ[ZPU5V[LI ;OLJHYY`PUNHTV\U[ZVM[OL.YV\W»ZMVYLPNUJ\YYLUJ`KLUVTPUH[LKTVUL[HY`HZZL[ZHUKSPHIPSP[PLZH[[OLLUK 39. FINANCIAL RISK MANAGEMENT VM[OLYLWVY[PUNWLYPVKHYLHZMVSSV^Z! Introduction and overview .YV\WMVYLPNUJ\YYLUJ`YPZR! Denominated in Denominated in ;OL.YV\W»ZWYPUJPWHSÄUHUJPHSSPHIPSP[PLZHYL[YHKLHUKV[OLYWH`HISLZ;OLTHPUW\YWVZLVM[OLZLÄUHUJPHSSPHIPSP[PLZPZ EUR USD TOTAL [VÄUHUJL[OL.YV\W»ZVWLYH[PVUZHUK[VWYV]PKLN\HYHU[LLZ[VZ\WWVY[P[ZVWLYH[PVUZ Shs’million Shs’million Shs’million 31 December 2019: ;OL.YV\W»ZWYPUJPWHSÄUHUJPHSHZZL[ZPUJS\KL[YHKLHUKV[OLYYLJLP]HISLZHUKJHZOHUKZOVY[[LYTKLWVZP[Z[OH[ KLYP]LKPYLJ[S`MYVTP[ZVWLYH[PVUZ;OL.YV\WHSZVOVSKZH]HPSHISLMVYZHSLPU]LZ[TLU[Z Assets ;YHKLHUKV[OLYYLJLP]HISLZ ;OL.YV\WPZL_WVZLK[V" )HURIHSHUJLZ 619 862 THYRL[YPZR" ;V[HSHZZL[Z 669 JYLKP[YPZR"HUK Liabilities SPX\PKP[`YPZR ;YHKLHUKV[OLYWH`HISLZ (981) )HUR6]LYKYHM[ (822) (210) ;OL .YV\W»Z V]LYHSS YPZR THUHNLTLU[ WYVNYHTTL MVJ\ZLZ VU [OL \UWYLKPJ[HIPSP[` VM JOHUNLZ PU [OL I\ZPULZZ LU]PYVUTLU[HUKZLLRZ[VTPUPTPZLWV[LU[PHSHK]LYZLLќLJ[ZVMZ\JOYPZRZVUP[ZÄUHUJPHSWLYMVYTHUJL^P[OPU[OL 5L[L_WVZ\YLWVZP[PVU (601) VW[PVUZH]HPSHISLPU2LU`HHUK 39. FINANCIAL RISK MANAGEMENT (continued) 39. FINANCIAL RISK MANAGEMENT (continued) (i) Market risk (continued) (i) Market risk (continued) a) Foreign currency risk management (continued) a) Foreign currency risk management (continued) *VTWHU`MVYLPNUJ\YYLUJ`YPZR! -VYLPNUJ\YYLUJ`ZLUZP[P]P[`HUHS`ZPZ Denominated in Denominated in ;OL MVSSV^PUN ZLUZP[P]P[` HUHS`ZPZ ZOV^Z OV^ WYVÄ[ HUK LX\P[` ^V\SK JOHUNL PM [OL 2LU`H :OPSSPUN OHK EUR USD TOTAL KLWYLJPH[LKHNHPUZ[[OLV[OLYJ\YYLUJPLZI` ! VU[OLYLWVY[PUNKH[L^P[OHSSV[OLY]HYPHISLZ Shs’million Shs’million Shs’million OLSKJVUZ[HU[;OLYL]LYZL^V\SKHSZVVJJ\YPM[OL2LU`H:OPSSPUNHWWYLJPH[LK^P[OHSSV[OLY]HYPHISLZOLSK 31 December 2019: JVUZ[HU[;OPZPZTHPUS`H[[YPI\[HISL[V[OLJOHUNLPU]HS\LVMMVYLPNUL_JOHUNLYLJLP]HISLZWH`HISLZHUK IHURIHSHUJLZ Assets ;YHKLHUKV[OLYYLJLP]HISLZ 108 ;OL MVSSV^PUN ZLUZP[P]P[` HUHS`ZPZ ZOV^Z OV^ WYVÄ[ HUK LX\P[` ^V\SK JOHUNL PM [OL 2LU`H :OPSSPUN OHK KLWYLJPH[LKHNHPUZ[[OLV[OLYJ\YYLUJPLZI` ! VU[OLYLWVY[PUNKH[L^P[OHSSV[OLY]HYPHISLZ )HURIHSHUJLZ 619 OLSKJVUZ[HU[;OLYL]LYZL^V\SKHSZVVJJ\YPM[OL2LU`H:OPSSPUNHWWYLJPH[LK^P[OHSSV[OLY]HYPHISLZOLSK ;V[HSHZZL[Z 660 120 JVUZ[HU[;OPZPZTHPUS`H[[YPI\[HISL[V[OLJOHUNLPU]HS\LVMMVYLPNUL_JOHUNLYLJLP]HISLZWH`HISLZHUK Liabilities IHURIHSHUJLZ ;YHKLHUKV[OLYWH`HISLZ ,ɈLJ[VUWYVÄ[VYSVZZILMVYL[H_ ,ɈLJ[VULX\P[` 5L[L_WVZ\YLWVZP[PVU 2019 2018 2019 2018 Shs’ million :OZ»TPSSPVU Shs’ million :OZ»TPSSPVU 31 December 2018: GROUP Assets (2) ,<9 ;YHKLHUKV[OLYYLJLP]HISLZ (21) 18 )HURIHSHUJLZ <:+ 26 16 ;V[HSHZZL[Z Liabilities COMPANY (1) ;YHKLHUKV[OLYWH`HISLZ 99 - 99 ,<9 6 (2) (21) 18 <:+ 26 5L[L_WVZ\YLWVZP[PVU b) Interest rate risk ;OL.YV\WHUK[OL*VTWHU`HSZVOVSKZJHZOKLWVZP[Z^P[OÄUHUJPHSPUZ[P[\[PVUZ;OLPU[LYLZ[YH[LZVU[OL JHZOKLWVZP[ZHYLÄ_LKHUKHNYLLK\WVUPUHK]HUJL 4HUHNLTLU[JSVZLS`TVUP[VYZ[OLPU[LYLZ[YH[L[YLUKZ[VTPUPTPZL[OLWV[LU[PHSHK]LYZLPTWHJ[ZVMPU[LYLZ[ YH[LJOHUNLZ+LWVZP[ZHYLWSHJLKH[Ä_LKPU[LYLZ[YH[LZHUKTHUHNLTLU[PZ[OLYLMVYLHISL[VWSHUMVY[OL YLZ\S[PUNPUJVTL-VY[OLMHJPSP[PLZ^P[O]HYPHISLYH[LZ[OL.YV\WHUK[OL*VTWHU`PZPUYLN\SHYJVU[HJ[^P[O [OLSLUKLYZPUHIPK[VVI[HPU[OLILZ[H]HPSHISLYH[LZ +\YPUN[OL`LHYH ! PUJYLHZLKLJYLHZLVM[OLHUU\HSPU[LYLZ[YH[L^V\SKOH]LYLZ\S[LKPUHU PUJYLHZLKLJYLHZLPUWYL[H_WYVÄ[VM:OZ TPSSPVU !:OZ TPSSPVUHUKHUPUJYLHZLKLJYLHZLPU LX\P[`VM:OZTPSSPVU !:OZTPSSPVU;OLHZZ\TLKTV]LTLU[PUPU[LYLZ[YH[LZLUZP[P]P[`HUHS`ZPZPZ IHZLKVU[OLJ\YYLU[S`VIZLY]HISLTHYRL[LU]PYVUTLU[;OPZPZ[OLHTV\U[I`^OPJOPU[LYLZ[YH[LZNLULYHSS` Å\J[\H[LI` c) Price risk 8\V[LKPU]LZ[TLU[ZHYL]HS\LKH[[OLPYTHYRL[WYPJLZ;OLZL]HS\LZHYLZ\IQLJ[[VMYLX\LU[]HYPH[PVUZHUK HK]LYZLTHYRL[TV]LTLU[Z;OPZYPZRPZTP[PNH[LKI`[OLMHJ[[OH[LX\P[`PU]LZ[TLU[ZHYLOLSKMVYZ[YH[LNPJ YH[OLY[OHU[YHKPUNW\YWVZLZ;OL.YV\WHUK[OL*VTWHU`KVUV[HJ[P]LS`[YHKLPULX\P[`PU]LZ[TLU[Z ([+LJLTILY PM[OLWYPJLZH[[OL5HPYVIP:LJ\YP[PLZ,_JOHUNLOHKHWWYLJPH[LKKLWYLJPH[LKI` ^P[OHSSV[OLY]HYPHISLZOLSKJVUZ[HU[^V\SKOH]LYLZ\S[LKPUHUPUJYLHZLKLJYLHZLVUV[OLYJVTWYLOLUZP]L PUJVTLHUKLX\P[`MVY[OL.YV\WHUK*VTWHU`VM:OZ TPSSPVU :OZ TPSSPVUHZHYLZ\S[VMJOHUNLZ 182 PUMHPY]HS\LVMH]HPSHISLMVYZHSLZOHYLZ 183 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 39. FINANCIAL RISK MANAGEMENT (continued) 39. FINANCIAL RISK MANAGEMENT (continued) (ii) Credit risk (ii) Credit risk (continued) *YLKP[YPZRYLMLYZ[V[OLYPZR[OH[HJV\U[LYWHY[`^PSSKLMH\S[VUP[ZJVU[YHJ[\HSVISPNH[PVUZYLZ\S[PUNPUÄUHUJPHS ;OL.YV\W»Z current JYLKP[ YPZRNYHKPUN MYHTL^VYRJVTWYPZLZ[OL MVSSV^PUN JH[LNVYPLZ! SVZZ[V[OL.YV\WHUK[OL*VTWHU`;OL.YV\WHUK[OL*VTWHU`OH]LHKVW[LKHWVSPJ`VMVUS`KLHSPUN^P[O JYLKP[^VY[O`JV\U[LYWHY[PLZHZHTLHUZVMTP[PNH[PUN[OLYPZRVMÄUHUJPHSSVZZMYVTKLMH\S[Z;OL.YV\W»ZHUK[OL Contractors: *VTWHU`»ZL_WVZ\YLHUK[OLJYLKP[YH[PUNVMP[ZJV\U[LYWHY[PLZHYLJVU[PU\V\ZS`TVUP[VYLKHUK[OLHNNYLNH[L ]HS\LVM[YHUZHJ[PVUZJVUJS\KLKPZZWYLHKHTVUNZ[HWWYV]LKJV\U[LYWHY[PLZ*YLKP[L_WVZ\YLPZJVU[YVSSLKI` Category Description Basis for recognizing JV\U[LYWHY[`SPTP[Z[OH[HYLYL]PL^LKHUKHWWYV]LKI`[OLTHUHNLTLU[HUU\HSS` Expected Credit Loss (ECL) GROUP AND COMPANY Performing ;OLJV\U[LYWHY[`OHZHSV^YPZRVMKLMH\S[HUKKVLZUV[ Lifetime ECL OH]LHU`WHZ[K\LHTV\U[Z Trade Receivables Category Description Basis for recognizing ;OL.YV\W*VTWHU`»Z^YP[LVќH[YHKLYLJLP]HISL^OLU[OLYLPZPUMVYTH[PVUPUKPJH[PUN[OH[[OLKLI[VYPZPU Expected Credit Loss ZL]LYLÄUHUJPHSKPѝJ\S[`HUK[OLYLPZUVYLHSPZ[PJWYVZWLJ[VMYLJV]LY`LN^OLU[OLKLI[VYOHZILLUWSHJLK (ECL) \UKLYSPX\PKH[PVUVYOHZLU[LYLKPU[VIHURY\W[J`WYVJLLKPUNZVY^OLU[OL[YHKLYLJLP]HISLZHYLV]LY KH`Z WHZ[K\L^OPJOL]LYVJJ\YZLHYSPLY;OL^YP[LVќ^PSSIL[OLL_JLZZVM[OLHTV\U[V^PUNV]LY[OLZLJ\YP[`VM[OL Performing ;OLJV\U[LYWHY[`OHZHSV^YPZRVMKLMH\S[HUKKVLZUV[ Lifetime ECL IHURN\HYHU[LLYLX\PYLKVM[OLJYLKP[J\Z[VTLYZ0UJHZLVM\UZLJ\YLKKLI[VYZ^OVHYLWYLKVTPUHU[S`PU[OL OH]LHU`WHZ[K\LHTV\U[Z JVU[YHJ[VYZ»ZLNTLU[[OL^YP[LVќ^PSSIL[OLLU[PYLHTV\U[V^PUN[V[OL*VTWHU` Cash customers, predominantly retail Category Description Basis for recognizing Expected Credit Loss (ECL) Doubtful ;OLYLPZL]PKLUJLPUKPJH[PUN[OH[JHZOJ\Z[VTLYZOH]L Lifetime ECL - credit- Z[VWWLK[YHKPUNKLZWP[L[OLTOH]PUNHKLIP[IHSHUJLPU[OLPY impaired HJJV\U[(UPUKPJH[VYVMWYVIHISLSHWZLVUZ`Z[LTZJYLKP[ JOLJRZVYV]LYYPKPUNVMJVU[YVSZ >YP[LVќ ;OLYLPZL]PKLUJLPUKPJH[PUN[OH[[OLKLI[VYPZPUZL]LYL (TV\U[PZ^YP[[LUVќ ÄUHUJPHSKPѝJ\S[`HUK[OL.YV\WOHZUVYLHSPZ[PJWYVZWLJ[VM YLJV]LY`VMHU`HTV\U[ZHIV]L[OLIHURN\HYHU[LL]HS\L HUKVY[OLHTV\U[ZHYLZ\IQLJ[[VJV\Y[WYVJLLKPUNHUK[OL HK]LYZLWYVIHISLV\[JVTLPZYHURLKOPNO 184 185 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 39. FINANCIAL RISK MANAGEMENT (continued) 39. FINANCIAL RISK MANAGEMENT (continued) (ii) Credit risk (continued) (ii) Credit risk (continued) ;OL[HISLZILSV^KL[HPS[OLJYLKP[X\HSP[`VM[OL.YV\W»ZÄUHUJPHSHZZL[ZHUK[OL.YV\W»ZTH_PT\TL_WVZ\YL[VJYLKP[ YPZRI`JYLKP[YPZRYH[PUNNYHKLZ! ;OL[HISLZILSV^KL[HPS[OLJYLKP[X\HSP[`VM[OL*VTWHU`»ZÄUHUJPHSHZZL[ZHUK[OL*VTWHU`»ZTH_PT\TL_WVZ\YL[V JYLKP[YPZRI`JYLKP[YPZRYH[PUNNYHKLZ! Group Company 31 Note External Internal 12-month or Gross Loss Net *SHZZPÄJH[PVU December credit credit lifetime ECL carrying allowance Carrying 31 Note External Internal 12-month or Gross Loss Net *SHZZPÄJH[PVU 2019 rating rating amount Amount December credit credit lifetime ECL carrying allowance Carrying :OZ4PSSPVUZ :OZ4PSSPVUZ :OZ4PSSPVUZ 2019 rating rating amount Amount ,X\P[` 19 4HYRLK[V 5( Performing 180 -=;6*0 :OZ4PSSPVUZ :OZ4PSSPVUZ :OZ4PSSPVUZ PU]LZ[TLU[Z 4HYRL[5:, ,X\P[` 19 4HYRLK[V 5( Performing 180 -=;6*0 )HURIHSHUJL ((())) 5( Lifetime ECL - (TVY[PaLKJVZ[ PU]LZ[TLU[Z 4HYRL[5:, ZPTWSPÄLK )HURIHSHUJL ((())) 5( Lifetime ECL - (TVY[PaLKJVZ[ HWWYVHJO:770 ZPTWSPÄLK Due from 22 5( Performing Lifetime ECL not - (TVY[PaLKJVZ[ HWWYVHJO:770 related a credit-impaired Due from 22 5( Performing Lifetime ECL not - (TVY[PaLKJVZ[ company related a credit-impaired Trade 22 5( Doubtful Lifetime ECL not (TVY[PaLKJVZ[ company YLJLP]HISLZ credit-impaired Trade 22 5( Doubtful Lifetime ECL not (TVY[PaLKJVZ[ YLJLP]HISLZ credit-impaired Loan due to PPP 5( Performing Lifetime ECL - (TVY[PaLKJVZ[ HZ\IZPKPHY` ZPTWSPÄLK 31 Note External Internal 12-month or Gross Loss Net *SHZZPÄJH[PVU HWWYVHJO:770 December credit credit lifetime ECL carrying allowance Carrying 2018 rating rating amount Amount :OZ4PSSPVUZ :OZ4PSSPVUZ :OZ4PSSPVUZ ,X\P[` 19 4HYRLK[V 5( Performing 180 -=;6*0 31 Note External Internal 12-month or Gross Loss Net *SHZZPÄJH[PVU PU]LZ[TLU[Z 4HYRL[5:, December credit credit lifetime ECL carrying allowance Carrying 2018 rating rating amount Amount )HURIHSHUJL ((())) 5( Lifetime ECL - (TVY[PaLKJVZ[ ZPTWSPÄLK :OZ4PSSPVUZ :OZ4PSSPVUZ :OZ4PSSPVUZ HWWYVHJO:770 ,X\P[` 19 4HYRLK[V 5( Performing 180 -=;6*0 Due from 22 5( Performing Lifetime ECL not 166 - 166 (TVY[PaLKJVZ[ PU]LZ[TLU[Z 4HYRL[5:, related a credit-impaired )HURIHSHUJL ((())) 5( Lifetime ECL - (TVY[PaLKJVZ[ company ZPTWSPÄLK Trade 22 5( Doubtful Lifetime ECL not 2,292 (TVY[PaLKJVZ[ HWWYVHJO:770 YLJLP]HISLZ credit-impaired Due from 22 5( Performing Lifetime ECL not 166 - 166 (TVY[PaLKJVZ[ related a credit-impaired company Trade 22 5( Doubtful Lifetime ECL not 2,292 (TVY[PaLKJVZ[ * NSE: Nairobi Securities Exchange YLJLP]HISLZ credit-impaired Loan due to PPP 5( Performing Lifetime ECL - (TVY[PaLKJVZ[ HZ\IZPKPHY` ZPTWSPÄLK HWWYVHJO:770 * NSE: Nairobi Securities Exchange 186 187 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 )HSHUJLZK\L^P[OPUTVU[OZLX\HS[OLPYJHYY`PUNIHSHUJLZHZ[OLPTWHJ[VMKPZJV\U[PUNPZUV[ZPNUPÄJHU[ 39. FINANCIAL RISK MANAGEMENT (continued) 39. FINANCIAL RISK MANAGEMENT (continued) (ii) Credit risk (continued) (ii) Liquidity risk (continued) P ;OLSVZZHSSV^HUJLVUX\V[LKLX\P[PLZH]HPSHISLMVYZHSLHZZL[ZTLHZ\YLKH[-=;6*0PZYLJVNUPaLK[OYV\NO GROUP – Financial liabilities: V[OLY*VTWYLOLUZP]L0UJVTLHUKHJJ\T\SH[LKPU[OLPU]LZ[TLU[YL]HS\H[PVUMHPY]HS\LYLZLY]L:LLUV[L -=;6*0OHZILLUPYYL]VJHIS`LSLJ[LKHUKHWWSPLZILJH\ZL[OLZOHYLZHYLOLSKULP[OLYMVYZHSLUVYHYL[OL` Total 120 days JVU[PUNLU[MVYI\ZPULZZJVTIPUH[PVU amount 0-30 days 31-90 days 91-120 days and above Shs’million Shs’million Shs’million Shs’million Shs’million PP ;OL)HURZ\ZLKI`[OL*VTWHU`HYLLP[OLYKL[LYTPULKVYHWWYV]LKI`[OL\S[PTH[L7HYLU[»Z*VYWVYH[L-PUHUJL HUK;YLHZ\Y`*-;KLWHY[TLU[PUA\YPJO;OL)HURZHYLJSHZZPÄLKHZLP[OLY9LSH[PVUZOPW)HURZVY5PJOL)HURZ 9LSH[PVUZOPWIHURZHYLWYLMLYYLK[V5PJOL)HURZHU`IHURZV\[ZPKL[OL)HUR3PZ[YLX\PYL^YP[[LUHWWYV]HSMYVT 31 December 2019: *-;PUA\YPJO ;YHKLWH`HISLZ 2,819 PPP -VY[YHKLYLJLP]HISLZ[OL.YV\W*VTWHU`OHZHWWSPLK[OLZPTWSPÄLKHWWYVHJOPU0-9: [VTLHZ\YL[OLSVZZ 9LSH[LKWHY[`WH`HISLZ 811 HSSV^HUJLH[SPML[PTL,*3^OPJOPU[OLJHZLVM[OL.YV\W*VTWHU`PZ[OLZHTLHZ[OLTVU[O,*3;OL )VYYV^PUNZ -- - .YV\WKL[LYTPULZ[OLL_WLJ[LKJYLKP[SVZZLZVU[OLZLP[LTZI`\ZPUNHWYV]PZPVUTH[YP_LZ[PTH[LIHZLKVU 6[OLYWH`HISLZ 100 68 108 OPZ[VYPJHSJYLKP[SVZZL_WLYPLUJLIHZLKVU[OLWHZ[K\LZ[H[\ZVM[OLKLI[VYZHKQ\Z[LKHZHWWYVWYPH[L[VYLÅLJ[ J\YYLU[JVUKP[PVUZHUKLZ[PTH[LZVMM\[\YLLJVUVTPJJVUKP[PVUZ(JJVYKPUNS`[OLJYLKP[YPZRWYVÄSLVM[OLZL (JJY\LKL_WLUZLZ HZZL[ZPZWYLZLU[LKIHZLKVU[OLPYWHZ[K\LZ[H[\ZPU[LYTZVM[OLWYV]PZPVUTH[YP_5V[LZ HUK PUJS\KLM\Y[OLYKL[HPSZVU[OLSVZZHSSV^HUJLMVY[OLZLHZZL[ZYLZWLJ[P]LS` +LJLTILY ! P] -VY[OLSVHU[VYLSH[LKWHY[PLZ[OLNYVZZJHYY`PUNHTV\U[YLWYLZLU[Z[OLTH_PT\THTV\U[[OL*VTWHU`L_WLJ[Z ;YHKLWH`HISLZ 2,682 1,022 [VYLJLP]LPUWYPUJPWHSWH`TLU[ZMYVTP[ZZ\IZPKPHY`)HTI\YP:WLJPHS7YVK\J[ZHUK[OLUL[JHYY`PUNHTV\U[ YLWYLZLU[Z[OLHTVY[PaLKJVZ[VM[OLSVHUYLJLP]HISL^P[OV\[KPZJV\U[PUNNP]LU[OH[[OLKPZJV\U[PUN`PLSKZHU 9LSH[LKWHY[`WH`HISLZ PTTH[LYPHSKPќLYLUJLPU[OLJHYY`PUNHTV\U[Z )VYYV^PUNZ 2,010 - - - 2,010 6[OLYWH`HISLZ -- (iii) Liquidity risk (JJY\LKL_WLUZLZ 81 ;OPZPZ[OLYPZR[OH[[OL.YV\W^PSSLUJV\U[LYKPѝJ\S[PLZPUTLL[PUNP[ZÄUHUJPHSJVTTP[TLU[ZMYVTP[ZÄUHUJPHS SPHIPSP[PLZ[OH[HYLZL[[SLKI`KLSP]LYPUNJHZOVYHUV[OLYÄUHUJPHSHZZL[7Y\KLU[SPX\PKP[`YPZRTHUHNLTLU[PUJS\KLZ COMPANY – Financial liabilities: THPU[HPUPUNZ\ѝJPLU[JHZO[VTLL[[OLNYV\W»ZVISPNH[PVUZ Total 91 - 120 120 days 31 December 2018: ;YHKLWH`HISLZ 1,212 - 9LSH[LKWHY[`WH`HISLZ 120 - 6[OLYWH`HISLZ (JJY\LKL_WLUZLZ 608 81 188 189 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 40 CAPITAL RISK MANAGEMENT 41. FAIR VALUE OF ASSETS AND LIABILITIES ;OL.YV\W»ZVIQLJ[P]LZ^OLUTHUHNPUNJHWP[HSHYL! H *VTWHYPZVUI`JSHZZVM[OLJHYY`PUNHTV\U[HUKMHPY]HS\LZVM[OLÄUHUJPHSPUZ[Y\TLU[Z • ;VLUZ\YL[OH[LU[P[PLZPU[OL.YV\W^PSSILHISL[VJVU[PU\LHZNVPUNJVUJLYUZ^OPSLTH_PTPZPUN[OLYL[\YU[V -HPY]HS\LPZ[OLWYPJL[OH[^V\SKILYLJLP]LK[VZLSSHUHZZL[VYWHPK[V[YHUZMLYHSPHIPSP[`PUHUVYKLYS`[YHUZHJ[PVU Z[HRLOVSKLYZ[OYV\NO[OLVW[PTPZH[PVUVM[OLKLI[HUKLX\P[`IHSHUJL IL[^LLUTHYRL[WHY[PJPWHU[ZH[[OLTLHZ\YLTLU[KH[L;OLMHPY]HS\LTLHZ\YLTLU[PZIHZLKVU[OLWYLZ\TW[PVU • ;VTHPU[HPUHZ[YVUNJHWP[HSIHZL[VZ\WWVY[[OLJ\YYLU[HUKM\[\YLKL]LSVWTLU[ULLKZVM[OLI\ZPULZZ [OH[[OL[YHUZHJ[PVU[VZLSS[OLHZZL[VY[YHUZMLY[OLSPHIPSP[`[HRLZWSHJLLP[OLY! ;OLJHWP[HSZ[Y\J[\YLVM[OL.YV\WJVUZPZ[ZVMKLI[^OPJOPUJS\KLZIVYYV^PUNZJHZOHUKJHZOLX\P]HSLU[ZHUKLX\P[` • 0U[OLWYPUJPWHSTHYRL[MVY[OLHZZL[VYSPHIPSP[`"VY H[[YPI\[HISL[VLX\P[`OVSKLYZVM[OLWHYLU[JVTWYPZPUNPZZ\LKJHWP[HSYLZLY]LZHUKYL[HPULKLHYUPUNZ • 0U[OLHIZLUJLVMHWYPUJPWHSTHYRL[PU[OLTVZ[HK]HU[HNLV\ZTHYRL[MVY[OLHZZL[VYSPHIPSP[` ;OL)VHYKVM+PYLJ[VYZYL]PL^Z[OLJHWP[HSZ[Y\J[\YLVUHYLN\SHYIHZPZ(ZWHY[VM[OPZYL]PL^[OLIVHYKJVUZPKLYZ ;OLWYPUJPWHSVY[OLTVZ[HK]HU[HNLV\ZTHYRL[T\Z[ILHJJLZZPISL[VI`[OL*VTWHU` [OLJVZ[VMJHWP[HSHUK[OLYPZRZHZZVJPH[LK^P[OLHJOJSHZZVMJHWP[HS)HZLKVU[OLYL]PL^[OL.YV\WHUHS`ZLZHUK HZZLZZLZ[OLNLHYPUNYH[PV[VKL[LYTPUL[OLSL]LSHUKP[ZVW[PTHSP[` ;OLMHPY]HS\LVMHUHZZL[VYHSPHIPSP[`PZTLHZ\YLK\ZPUN[OLHZZ\TW[PVUZ[OH[THYRL[WHY[PJPWHU[Z^V\SK\ZL ^OLUWYPJPUN[OLHZZL[VYSPHIPSP[`HZZ\TPUN[OH[THYRL[WHY[PJPWHU[ZHJ[PU[OLPYLJVUVTPJILZ[PU[LYLZ[ ;OL.YV\WTVUP[VYZJHWP[HS\ZPUNHNLHYPUNYH[PV^OPJOPZUL[KLI[KP]PKLKI`[V[HSJHWP[HSWS\ZUL[KLI[5L[KLI[PZ JHSJ\SH[LKHZ[V[HSIVYYV^PUNZSLZZJHZOHUKJHZOLX\P]HSLU[Z;OL.YV\W»ZWVSPJ`PZ[VRLLW[OLNLHYPUNYH[PVIL[^LLU ;OL[HISLILSV^ZL[ZV\[[OL.YV\W»ZJSHZZPÄJH[PVUVMLHJOJSHZZVMÄUHUJPHSHZZL[ZHUKSPHIPSP[PLZHUKJVTWHYPZVU HUK ^OLYLHWWSPJHISL(ZH[+LJLTILY [OL.YV\WHUK*VTWHU`^LYLPUUL[JHZOWVZP[PVUOLUJL VM[OLJHYY`PUNHTV\U[HUK[OLPYMHPYL_JS\KPUNHJJY\LKPU[LYLZ[! UV[NLHYLK !UL[JHZOWVZP[PVU ;OLYLOH]LILLUUVTH[LYPHSJOHUNLZPU[OL.YV\W»ZTHUHNLTLU[VMJHWP[HSK\YPUN[OL`LHY GROUP 5V[LZ Carrying amount Fair Value ;OLJVUZ[P[\[PVUVMJHWP[HSTHUHNLKI`[OL.YV\WPZHZZOV^UILSV^! 2019 2018 2019 2018 -PUHUJPHSHZZL[Z Shs’million :OZ»TPSSPVU Shs’million :OZ»TPSSPVU GROUP COMPANY 2019 +LJLTILY 1 January 2019 2018 Shs’million 2018 2018 Shs’million :OZ»TPSSPVU 6[OLYLX\P[`PU]LZ[TLU[Z 19 180 180 9LZ[H[LK 9LZ[H[LK :OZ»TPSSPVU :OZ»TPSSPVU COMPANY -PUHUJPHSHZZL[Z Equity 22,021 6[OLYLX\P[`PU]LZ[TLU[Z 19 180 180 Debt 6[OLYLX\P[`PU]LZ[TLU[ZHYLX\V[LKZOHYLZH[[OL5HPYVIP:LJ\YP[PLZ,_JOHUNL-HPY]HS\LVM[OLX\V[LKZOHYLZ 2,010 - - - )VYYV^PUNZ PZIHZLKVUWYPJLX\V[H[PVUZH[[OLYLWVY[PUNKH[L 3LHZLSPHIPSP[PLZ - - -- )HURV]LYKYHM[Z - - 4HUHNLTLU[HZZLZZLK[OH[[OLMHPY]HS\LVM[YHKLYLJLP]HISLZYLJLP]HISLZMYVTYLSH[LKJVTWHUPLZJHZOHUK 3LZZ!*HZOHUKJHZOLX\P]HSLU[Z (2,289) (2,161) JHZOLX\P]HSLU[Z[YHKLWH`HISLZHUKWH`HISLZ[VYLSH[LKJVTWHUPLZHWWYV_PTH[L[OLPYJHYY`PUNHTV\U[ZSHYNLS` Net debt (2,289) (2,161) K\L[V[OLZOVY[[LYTTH[\YP[PLZVM[OLZLPUZ[Y\TLU[Z ;OLJHYY`PUN]HS\LZVM[OL*VTWHU`»ZSVHU[VZ\IZPKPHY`PZKL[LYTPULKI`\ZPUN+PZJV\U[PUN*HZO-SV^Z+*- Net debt to equity ratio 5( 5( 5( TL[OVKH[KPZJV\U[YH[L[OH[YLÅLJ[Z[OLTHYRL[PU[LYLZ[YH[LHZH[[OLLUKVM[OLYLWVY[PUNWLYPVK b) Fair value hierarchy ;OL[HISLILSV^ZOV^ZHUHUHS`ZPZVMHSSHZZL[ZHUKSPHIPSP[PLZTLHZ\YLKH[MHPY]HS\LPU[OLÄUHUJPHSZ[H[LTLU[Z VYMVY^OPJOMHPY]HS\LZHYLKPZJSVZLKPU[OLÄUHUJPHSZ[H[LTLU[ZI`SL]LSVM[OLMHPY]HS\LOPLYHYJO`;OLZLHYL NYV\WLKPU[VSL]LSZ[VIHZLKVU[OLKLNYLL[V^OPJO[OLMHPY]HS\LPZVIZLY]HISL P 3L]LSMHPY]HS\LTLHZ\YLTLU[ZHYL[OVZLKLYP]LKMYVTX\V[LKWYPJLZ\UHKQ\Z[LKPUHJ[P]LTHYRL[ZMVY PKLU[PJHSHZZL[ZVYSPHIPSP[PLZ" PP 3L]LSMHPY]HS\LTLHZ\YLTLU[ZHYL[OVZLKLYP]LKMYVTPUW\[ZV[OLY[OHUX\V[LKWYPJLZPUJS\KLK^P[OPU SL]LS[OH[HYLVIZLY]HISLMVY[OLHZZL[VYSPHIPSP[`LP[OLYKPYLJ[S`PLHZHWYPJLVYPUKPYLJ[S`PLKLYP]LKMYVT WYPJLZ"HUK PPP 3L]LSMHPY]HS\LTLHZ\YLTLU[ZHYL[OVZLKLYP]LKMYVT]HS\H[PVU[LJOUPX\LZ[OH[PUJS\KLPUW\[ZMVY[OL HZZL[VYSPHIPSP[`[OH[HYLUV[IHZLKVUVIZLY]HISLTHYRL[KH[H\UVIZLY]HISLPUW\[Z 190 191 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 41. FAIR VALUE OF ASSETS AND LIABILITIES (continued) 41. FAIR VALUE OF ASSETS AND LIABILITIES (continued) b) Fair value hierarchy (Continued) b) Fair value hierarchy (continued) Level 1 Level 2 Level 3 ;OLYL^LYLUV[YHUZMLYZIL[^LLUSL]LSZHUKPU[OL`LHY Shs’million Shs’million Shs’million ;OL.YV\W»ZMYLLOVSKSHUKI\PSKPUNZWSHU[HUKTHJOPULY`^LYLSHZ[YL]HS\LKVU+LJLTILY MVY[OL GROUP parent company and December 2018 for Hima Cement Limited. 31 December 2019 ;OL]HS\H[PVUZ^LYLIHZLKVUTHYRL[]HS\LHZMVSSV^Z! (ZZL[Z Comparable method for valuation of land and buildings 7YVWLY[`WSHU[HUKLX\PWTLU[ -HPY]HS\LVM[OLWYVWLY[PLZ^HZKL[LYTPULKI`\ZPUNTHYRL[JVTWHYHISLTL[OVK;OPZTLHUZ[OH[]HS\H[PVUZ -YLLOVSKSHUKHUKI\PSKPUNZ - WLYMVYTLKI`[OL]HS\LYHYLIHZLKVUHJ[P]LTHYRL[WYPJLZZPNUPÄJHU[S`HKQ\Z[LKMVYKPќLYLUJLPU[OLUH[\YL SVJH[PVUVYJVUKP[PVUVM[OLZWLJPÄJWYVWLY[` 7SHU[HUKTHJOPULY` )PVSVNPJHSHZZL[Z - ;OLWYVWLY[PLZ»MHPY]HS\LZ^LYLIHZLKVU]HS\H[PVUZWLYMVYTLKI`2UPNO[-YHUR=HS\LYZ3PTP[LKHUHJJYLKP[LK -HPY]HS\LKLZPNUH[LKH[-=;6*0LX\P[`ZLJ\YP[PLZ - - independent valuer. Depreciated replacement cost for plant and machinery 31 December 2018 7SHU[HUKTHJOPULY`^LYLYL]HS\LKVUHKLWYLJPH[LKYLWSHJLTLU[JVZ[IHZPZ\ZPUNH]HS\H[PVUTVKLSWYLZJYPILK (ZZL[Z I`LUNPULLYZHUKJVUZ\S[HU[ZH[[OL[LJOUPJHSJLU[YLVM[OL\S[PTH[LZOHYLOVSKLY 7YVWLY[`WSHU[HUKLX\PWTLU[ 0U\ZPUN[OLKLWYLJPH[LKYLWSHJLTLU[JVZ[IHZPZ[OLLUNPULLYZHUKJVUZ\S[HU[ZH[[OL[LJOUPJHSJLU[YLVM[OL \S[PTH[LZOHYLOVSKLYLUZ\YLZ[OH[[OPZPZJVUZPZ[LU[^P[OTL[OVKZVMTLHZ\YPUNMHPY]HS\LHZWLY[OLYLX\PYLTLU[Z -YLLOVSKSHUKHUKI\PSKPUNZ - - VM0-9: 7SHU[HUKTHJOPULY` - ;OLLUNPULLYZHUKJVUZ\S[HU[ZLUZ\YL[OH[! )PVSVNPJHSHZZL[Z - - -HPY]HS\LKLZPNUH[LKH[-=;6*0LX\P[`ZLJ\YP[PLZ 180 - - ;OLOPNOLZ[HUKILZ[\ZLVM[OLWYVWLY[`HUKTHJOPULY`PZP[ZJ\YYLU[\ZLHUK ;OLWYPUJPWHSTHYRL[VYPUP[ZHIZLUJL[OLTVZ[HK]HU[HNLV\ZTHYRL[L_P[THYRL[MVY[OLWYVWLY[`HUK COMPANY THJOPULY`PZ[OLZHTLHZ[OLTHYRL[PU^OPJO[OLWYVWLY[`HUKTHJOPULY`^HZVY^PSSILW\YJOHZLKLU[Y` THYRL[ 31 December 2019 0UHKKP[PVU[OLLUNPULLYZHUKJVUZ\S[HU[ZLUZ\YL[OH[[OLYLZ\S[PUNKLWYLJPH[LKYLWSHJLTLU[JVZ[PZHZZLZZLK (ZZL[Z [VLUZ\YLTHYRL[WHY[PJPWHU[ZHYL^PSSPUN[V[YHUZHJ[MVY[OLWYVWLY[`HUKTHJOPULY`PUP[ZJ\YYLU[JVUKP[PVU 7YVWLY[`WSHU[HUKLX\PWTLU[ HUKSVJH[PVUH[[OPZWYPJL;OLPUW\[Z\ZLK[VKL[LYTPULYLWSHJLTLU[JVZ[HYLJVUZPZ[LU[^P[O^OH[THYRL[ -YLLOVSKSHUKHUKI\PSKPUNZ - WHY[PJPWHU[I\`LYZ^PSSWH`[VHJX\PYLVYJVUZ[Y\J[HZ\IZ[P[\[L[OLWYVWLY[`HUKTHJOPULY`VMJVTWHYHISL\[PSP[` ;OLYLWSHJLTLU[JVZ[OHZHSZVILLUHKQ\Z[LKMVYVIZVSLZJLUJL[OH[THYRL[WHY[PJPWHU[I\`LYZ^PSSJVUZPKLY 7SHU[HUKTHJOPULY` - )PVSVNPJHSHZZL[Z - 6[OLYX\V[LKPU]LZ[TLU[Z - - 31 December 2018 (ZZL[Z 7YVWLY[`WSHU[HUKLX\PWTLU[ -YLLOVSKSHUKHUKI\PSKPUNZ - - 7SHU[HUKTHJOPULY` - - )PVSVNPJHSHZZL[Z - - 6[OLYX\V[LKPU]LZ[TLU[Z 180 - - 192 193 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT 5 FINANCIAL REVIEW Notes to the Financial Statements (continued) for the year ended 31 December 2019 41. FAIR VALUE OF ASSETS AND LIABILITIES (continued) 42. EVENTS AFTER THE REPORTING DATE b) Fair value hierarchy (continued) Background -YVT[OLILNPUUPUNVM[OLNSVIHSLJVUVT`OHZILLUHK]LYZLS`HќLJ[LKI`[OLV\[IYLHRVM[OL*VYVUH]PY\Z *6=0+ WHUKLTPJ;OLWHUKLTPJPZHќLJ[PUNLJVUVTPJHUKÄUHUJPHSTHYRL[ZHUK]PY[\HSS`HSSPUK\Z[YPLZHYLMHJPUN +LZJYPW[PVUVM]HS\H[PVU[LJOUPX\LZ\ZLKHUKRL`PUW\[Z[V]HS\H[PVUVMHZZL[ZHUKSPHIPSP[PLZ JOHSSLUNLZHZZVJPH[LK^P[O[OLLJVUVTPJJVUKP[PVUZYLZ\S[PUNMYVTLќVY[Z[VHKKYLZZP[ Valuation Range (Z[OLWHUKLTPJPUJYLHZLZPUIV[OTHNUP[\KLHUKK\YH[PVULU[P[PLZHYLL_WLYPLUJPUNJVUKP[PVUZVM[LUHZZVJPH[LK^P[O technique :PNUPÄJHU[VIZLY]HISLPUW\[Z (weighted average) HNLULYHSLJVUVTPJKV^U[\YU;OPZPUJS\KLZI\[PZUV[SPTP[LK[VÄUHUJPHSTHYRL[]VSH[PSP[`HUKLYVZPVUKL[LYPVYH[PUN Interest rate JYLKP[ SPX\PKP[` JVUJLYUZ M\Y[OLY PUJYLHZLZ PU NV]LYUTLU[ PU[LY]LU[PVU PUJYLHZPUN \ULTWSV`TLU[ IYVHK KLJSPULZ LEVEL 2 - - - PU JVUZ\TLY KPZJYL[PVUHY` ZWLUKPUN PUJYLHZPUN PU]LU[VY` SL]LSZ YLK\J[PVUZ PU WYVK\J[PVU ILJH\ZL VM KLJYLHZLK 3,=,3 KLTHUKHUKSH`VќZHUKV[OLYYLZ[Y\J[\YPUNHJ[P]P[PLZ ;OL.YV\WOHZVWLYH[PVUZPU2LU`HHUK 43. COUNTRY OF INCORPORATION ;OL*VTWHU`PZPUJVYWVYH[LKHUKKVTPJPSLKPU2LU`H\UKLY[OL2LU`HU*VTWHUPLZ(J[ ;OL\S[PTH[LWHYLU[ VM[OL.YV\WPZ3HMHYNL/VSJPT3[KPUJVYWVYH[LKPU:^P[aLYSHUK 194 195 2019 ANNUAL REPORT & FINANCIAL STATEMENT BAMBURI CEMENT