THE WORLD AS WE HAVE CREATED IT IS A PROCESS OF OUR THINKING...
ANNUAL REPORT TWENTY THIRTEEN IT CANNOT BE CHANGED WITHOUT CHANGING OUR THINKING.
Albert Einstein FINANCIAL STATEMENTS
50 Group Salient Features 51 Group Value Added Statement 52 Five-Year Summary of Results 53 Summary of Statistics 54 Ordinary Share Ownership A POSITIVE ACTION DEVELOPS 56 Financial Review FROM A POSITIVE VISION 57 Approval of Annual Financial Statements Hendrik van der Westhuizen 58 Independent Auditor’s Report 59 Report of the Directors 60 Statements of Financial Position REPORTS 61 Statements of Comprehensive Income
6 Company Profile 62 Statements of Cash Flows 8 Financial Highlights 63 Statements of Changes in Equity 10 Directorate and Administration 64 Notes to the Annual Financial Statements 11 Board of Directors 101 Annexure A - Secured Interest-bearing Loans and Borrowings 14 Senior Leadership Team 103 Annexure B - Property, Plant and 16 Chairman’s Statement Equipment and Intangible Assets 21 Managing Director’s Report 106 Annexure C - Interest in Subsidiaries 24 Sustainability Report 107 Annexure D - Directors’ Emoluments 44 Remuneration Report 108 Notice to Shareholders 46 Corporate Governance 109 Proxy Form Company Profile...
COMPANY PROFILE
Established on 29 October 1920, Namibia Breweries Limited In 2008, the joint venture was deepened through the formation of (NBL) is one of the leading beverage manufacturing companies DHN Drinks (Pty) Ltd in South Africa. This partnership has enabled in Namibia and, indeed, in Southern Africa. In 1920, the Kronen NBL to further penetrate the lucrative South African market. At Brauerei (Swakopmund), the Omaruru Brewery (Omaruru), the present, Windhoek Lager is brewed under licence in Gauteng for Klein Windhoek Brewery (Windhoek), and the Felsenkeller Brewery the South African market and distributed by DHN Drinks (Pty) Ltd. (Windhoek) were acquired by Messrs Carl List and Hermann Ohlthaver, who consolidated them to form South West Breweries Brewed by choice according to the German Reinheitsgebot (“Purity Ltd. When, in 1967, South West Breweries Ltd acquired the Hansa Law”) of 1516, Windhoek Lager, Windhoek Light, Windhoek Draught Brauerei in Swakopmund, the company became the only remaining and Tafel Lager enjoy a reputation of quality and purity for which the independent commercial brewery in Southern Africa. With Namibia’s brands have earned international recognition – including winning independence in 1990, South West Breweries Ltd changed to its gold medals during the prestigious Deutsche Landwirtschafts- current name of Namibia Breweries Ltd (NBL). Gesellschaft (DLG.) Awards in 2005, 2007, 2008, 2009, 2010, 2011, 2012 and 2013. Today, with the stated vision To Be the Most Progressive and Inspiring Company, NBL leads the domestic beer market and has The Ohlthaver & List Group of Companies launched a value system a significant share of the premium beer category in South Africa. in 2004, known as Mwenyopaleka, which means “rebirth” in the NBL’s total exports account for more than half of total production local Oshiwambo vernacular. Mwenyopaleka embodies the Group’s output. collective commitment to challenge our historic and cultural past to improve the future for everyone. As a member of the O&L Group, In May 1996, NBL listed on the Namibian Stock Exchange (NSX) NBL adopted the Mwenyopaleka values, which aim to align Group and became a publicly owned company. The Ohlthaver & List activities. In 2011, NBL adopted the new Group purpose: Creating Group of Companies, a major Namibian group, is the controlling a future, enhancing life, which governs the strategic focus for the shareholder in NBL. In 2003, leading drinks company Diageo and Group. brewer Heineken became NBL’s strategic partners. Brandhouse Beverages (Pty) Ltd serves as the marketing vehicle for NBL’s joint venture with Heineken and Diageo in South Africa. 21.0% 500.1
2013 2013
19.9% 28.9% 429.0 2012 2012
20.9% 375.3 20.9% 2011 2011
17.5% 303.0
2010 2010
16.4% 256.6 16.4% OPERATING PROFIT MARGINS 2009 2009 OPERATING PROFIT (N$ MILLION)
4.6% 85.8% BEER 50.9% EXPORT SOFTS
9.2% RTD’s
DIVISIONAL 0.4% GEOGRAPHIC CONTRIBUTUTION TO 49.1% OTHER NAMIBIA CONTRIBUTUTION TO REVENUE 2013 REVENUE 2013
31 27 CENTS FINAL TOTAL DIVIDENDS PER CENTS FINAL (Proposed) SHARE DECLARED AND (23.11.2012) TOTAL DIVIDENDS PROPOSED PER SHARE 31 27 CENTS INTERIM CENTS INTERIM 2013 (10.05.2013) 62CENTS (11.05.2012) 54CENTS 2012
BALANCED PORTFOLIO FINEST TURNOVER 2013 TAFEL LAGER (N$ MILLION) FINEST TURNOVER 2012 TAFEL LAGER (N$ MILLION) WINDHOEK DRAUGHT 2383 WINDHOEK 2160 DRAUGHT 2013 2012 OTHER PERCENT GROWTH OTHER PERCENT GROWTH IN TURNOVER IN VOLUMES: NAMIBIA 10 WINDHOEK WINDHOEK 12 LAGER LAGER Directorate and Administration... Board of Directors...
DIRECTORATE CHAIRMAN AND AND ADMINISTRATION EXECUTIVE DIRECTORS
EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS COMMITTEES
H van der Westhuizen G Mahinda 3 Remuneration and Nominations Committee Appointed to the Board as Managing Appointed to the Board on 1 July 2009. NB Blazquez (Chairperson) Director on 2 April 2012. Resigned on 17 September 2013. S Hiemstra (appointed 31 August 2012) BA Kidner 1 E Ender P Grüttemeyer 10 11 Appointed to the Board as Financial Joined the Group in 1975. Appointed Audit Committee Director on 18 July 2008. to the Board 1 February 1983. HB Gerdes (Chairperson) Resigned on 17 September 2013. S Thieme P Grüttemeyer Appointed to the Board in 2002. Elected M Kromat Chairperson of the Board on 11 July 2002. DFM Leleu NB Blazquez 1 Appointed to the Board on 2 September 2004. ADMINISTRATION H-B Gerdes Appointed to the Board on 28 July 2000. Company Registration Number P Grüttemeyer 2/1920 (Incorporated in Namibia) Appointed to the Board on 3 June 2004. 1979/001528/10 (Externally registered in C-L List South Africa) Appointed to the Board on 28 June 1979. Secretaries BHW Masche Ohlthaver and List Centre (Proprietary) Limited Joined the Group in 1968. Appointed to Alexander Forbes House, the Board on 28 June 1979. 23–33 Fidel Castro Street Resigned on 22 July 2013. PO Box 16, Windhoek, Namibia L van der Borght 6 Auditors Alternate Director to S Hiemstra. Appointed Deloitte & Touche to the Board on 2 December 2010. PO Box 47, Windhoek, Namibia S Hiemstra 5 Sponsor Sven Thieme Hendrik van der Westhuizen Bruce Anthony Kidner Appointed to the Board on 31 August 2011. PSG Konsult Namibian Namibian British M Kromat 2 PO Box 196, Windhoek, Namibia Chairman Managing Director Finance Director Alternate Director to G Mahinda. Appointed Transfer Secretaries to the Board on 30 November 2011. Transfer Secretaries (Proprietary) Limited Sven was appointed in March 2002. He is Wessie, a graduate of the University of Cape Town, Bruce joined Namibia Breweries in July 2008 DFM Leleu 4 PO Box 2401, Windhoek, Namibia the Executive Chairman of the Ohlthaver & has been with the O&L Group of Companies since as Finance Director. He is a qualified Chartered Appointed to the Board on 2 April 2012. Principal Bankers List Group (O&L). He joined O&L in 1998, 2003. In 2006 he was appointed to the board of Accountant with a wealth of experience. L V McLeod-Katjirua First National Bank of Namibia Limited after four years working as a Chartered Hangana Seafood (Pty) Ltd and became its Managing Prior to his current role, he held the position Appointed to the Board on 2 April 2012. PO Box 285, Windhoek Accountant in Luxembourg. He was also the Director in 2009. He played an integral role in successfully of Finance Director at the Guinness Ghana Attorneys architect of several joint ventures entered placing Hangana Seafood (Pty) Ltd on the road Breweries Group in Accra (Ghana) and Engling, Stritter & Partners into by O&L, including the deal between of sustained profitability and has over 19 years of has been with Diageo Plc since 1997. PO Box 43, Windhoek, Namibia Heineken, Diageo and Namibia Breweries. experience in the Food and Beverage Industry.
Nationalities: 1 British 2 South African 3 Kenyan 4 French 5 Dutch 6 Belgian Board of Directors...
1. Bernd Masche 2. Sijbe Hiemstra 3. Peter Grüttemeyer
A registered professional engineer in South Appointed in August 2011, Sijbe has over Joined the Ohlthaver & List Group of Africa and Namibia, he joined Namibia 30 years experience and has held several Companies (O&L) in October 2003 as chief Breweries (then South West Breweries) in senior positions in the Heineken Group ranging executive officer where he is responsible for September 1968. He was appointed as from Portfolio Manager to Heineken Regional formulating and executing strategy. He is a managing director of the company in 1982 and President Asia Pacific. Based at the Heineken qualified Chartered Accountant and prior to NON-EXECUTIVE after having served 21 years in this position, Headquarters in Amsterdam, Sijbe also holds a joining O&L, he held the position of partner- retired in September 2003, whereafter he BBA degree from the Rotterdam School in-charge of the Deloitte Namibia practice. was appointed as non-executive director in a of Higher Education Studies. DIRECTORS consultancy capacity until October 2009.
4. Hans-Bruno Gerdes 5. Gerald Mahinda 6. Ernst Ender
Managing partner of the attorneys firm Engling, Gerald Mahinda moved to South Africa as Ernst was appointed as executive director Stritter & Partners in Windhoek, Habo is also an managing director of Brandhouse, with in February 1983, he took over responsibility associate of the Institute of Chartered Secretaries effect from 1 July 2009 after successfully for the Company’s export business as director: and holds a B.Proc. degree from the University leading East Africa Breweries (EABL) for developing markets in 2002. Prior to his 12 13 of Cape Town. He currently practices as a over ten years. He joined EABL as the group appointment in 1983, he held the position commercial/corporate attorney, holds numerous finance and strategy director in 1999, a of manager: marketing & sales. Ernst retired 1 2 3 4 directorships and is actively involved in the position he held until 2003. He rose to the on 31 January 2008 but remains on the NBL organised legal profession. Presently, he position of group managing director in 2004, Board as non-executive director. He was also serves as chairman of the audit committee. following a short tenure as strategy and appointed to the Ohlthaver & List Board in change director of Guinness Nigeria Plc. June 2008 as a non-executive director.
7. Carl-Ludwig List 8. Didier Leleu 9. Governor Laura Mcleod-Katjirua
Born to Werner and Margarete List, raised Didier is a graduate of the French Business Governor Mcleod-Katjirua has a long history of in Midgard and schooled in Swakopmund, he School. He held the post of Finance Director serving the people of Namibia. She has been matriculated in Cape Town and completed for Heineken France from 2003 until his active in the promotion of gender equality and 5 6 7 8 his banking education in Germany in 1971 appointment in 2012 as Senior Heineken education in Namibia. She is currently the after attending the University of Stellenbosch. Director Regional Finance Africa Middle East. Appointed Governor of Omaheke Region where After having devoted twenty years (1972- He sits on the boards of various she continues to support various initiatives that 1992) of his career to the Ohlthaver & List joint ventures and participations on support the development and wellbeing Group, he remains a dedicated director behalf of the Heineken Group. of Namibians. of the Group and Namibia Breweries.
10. Lieven van der Borght 11. Martin Kromat 12. Nick Blazquez 9 10 11 12 Lieven holds Masters Degrees in Law and Martin holds a combined Master’s degree in Nick is President for Diageo with accountability Business Administration from the Catholic business administration and electronic engineer- for Africa, Turkey, Russia, Central and Eastern University of Leuven, Belgium. With many years ing from the Darmstadt University of Technology. Europe and Global Sales. Prior to that he of experience within the Heineken Group and With 13 years’ experience in fast-moving led Diageo’s businesses in Asia and held other reputable international corporates, he holds consumer goods with Procter & Gamble, he various other senior positions in Great the position of Heineken Regional Commercial brings a wealth of knowledge and insight to the Britain. He is also a non-executive Director Director Africa and Middle East. He also serves NBL Board and DHN Drinks (Pty) Ltd, the latter of Mercy Corps. He is the chairman of as a non-executive Director of Heineken Sirocco being where he currently serves as the Finance the NBL remuneration committee. Dubai and DHN Drinks (Pty) Ltd at present. Director. Senior Leadership Team...
SENIOR LEADERSHIP TEAM Supply Manager Managing Director Supply Chain Manager Abrie Plooy du Export Markets Manager Human Capital Manager Hans Herrmann Finance DirectorFinance Hendrik van der WesthuizenHendrik der van National Marketing Manager Thomas Hochreiter National Sales Manager Bruce Kidner Makari Terence Rosemary Shippiki Anton Goosen
14 15 Chairman’s Statement...
CHAIRMAN’S STATEMENT
16 17 GLOBAL ECONOMY against the negative impacts of large commodity price fluctuations Although the impact of the global financial crisis had been on development and macroeconomic stability in the world economy. experienced in some economies as of 2007, in Africa, and in particular Namibia, the negative impact of the recession was Meanwhile, challenges to global growth remain high as recovery has delayed, and was only fully experienced in recent years. Around proven more prolonged and challenging than any previous recession the world, stock markets have fallen, large financial institutions in the last century. A unique set of challenges and opportunities have collapsed or been bought out and governments in even the face businesses at the tail end of 2013 and as such critical growth wealthiest nations have had to come up with rescue packages to factors in the near and long term include: 1) Fiscal challenges bail out their financial systems. facing countries in the Organisation for Economic Co-operation and Development (OECD); 2) Deregulation and rebalancing in On the one hand many people are concerned that those responsible key sectors of developing economies; 3) Sectoral issues such as for the financial problems are the ones being bailed out, while on the housing; 4) The uncertain longer-term effects of new monetary other hand, a global financial meltdown has most certainly affected policies; 5) Commodity price uncertainty, including oil prices; and the livelihoods of almost everyone in an increasingly inter-connected 6) Food inflation. On a positive note, growing strength in the US world. For the developing world, the rise in food prices as well as the economy could spark a quicker-than-anticipated rebound in the knock-on effects from the uncertainty and instability in international global economic recovery. Furthermore, Africa’s economic outlook financial, currency and commodity markets, coupled with doubts for 2013 and 2014 is promising, confirming its healthy resilience to about the direction of monetary policy in some major developed internal and external shocks and its role as a growth pole in an ailing countries, have had a compounding effect and contributed to a global economy. It’s agricultural, mining and energy resources, gloomy outlook for the world economy. High fuel costs, soaring could boost the continent’s economic growth and pave the way for a commodity prices as well as the oil price instability, amongst others, breakthrough in human development. Africa’s economy is projected are some of the global economic challenges that have unfortunately to grow by 4.8% in 2013 and accelerate further to 5.3% in 2014. impacted negatively on trade worldwide. GLOBAL BEER INDUSTRY As such, commodity-dependent economies like Namibia, have 2013 was a year characterised by slower than projected Global been exposed to considerable external shocks stemming from growth, caused to a large extent, by subdued growth in several key price booms and busts in international commodity markets. emerging market economies, as well as the protracted recession in Market liberalisation and privatisation in the commodity sector the Euro area. Despite the challenging environment within which have not resulted in greater stability of international commodity we operate, I am pleased to report that Namibia Breweries Limited prices. There is widespread dissatisfaction with the outcomes of (NBL) delivered a solid financial performance, and is well positioned unregulated financial and commodity markets, which fail to transmit to continue benefiting from the growing demand for craft beer, as reliable price signals for commodity producers. In recent years, the consumers shift to brands which satisfy their need for authenticity, global economic policy environment seems to have become more tradition and genuineness. favorable to fresh thinking about the need for multilateral actions Chairman’s Statement... Chairman’s Statement...
The global beer manufacturing industry has experienced declining Having successfully entrenched our people management processes, In celebration of Namibia’s 23rd Independence Anniversary, NBL FUTURE OUTLOOK per capita beer consumption across the US and European markets, and breakthrough leadership culture, I am pleased to report that presented our key stakeholders with our special Independence Moving forward we will continue to employ strategies and solutions as the overall beer market has reached a level of maturity, while we have also implemented a number of new initiatives such as our Lager - an exclusive Namibian beer brewed with our first ever home- that minimise the impact of the financial crisis to our businesses, growth in countries like China, Thailand, and India is average. At electronic recruitment system which has enhanced the efficiency grown malted barley. This is indeed a big milestone for us and has while maintaining focus on further growing NBL and its distinctive the same time, in emerging markets, rising disposable incomes and effectiveness of our recruitment process, while also creating a paved the way for further work to conduct larger scale trials that will quality brands. We are confident that we are in a position now, more and changing consumer needs, have brought about a rise in beer database of potential candidates and reducing our carbon footprint. determine the commercial viability of Namibian barley. than ever before, to grow and become a market leader beyond our consumption, and strong volume growth. Across most markets, in the home base Namibia, while continuing to deliver on our promise of premium beer category, phenomenal growth has been experienced NBL HIGHLIGHTS These are but some of the many highlights that are testimony to quality and distinction. in the higher-value craft beer segment, and all indications are that Despite the tough global economic climate which we continue to our continued commitment to excellence. While we have initiated this trend is set to continue. experience, I am pleased that NBL’s performance has returned a number of efficiencies and cost savings projects, we have not ACKNOWLEDGEMENT AND APPRECIATION double digit growth in operating profit. Our brands and repute for compromised on quality, values or heritage, and have continued to I would like to acknowledge the deep commitment of our employees Globally, the beer industry has been facing major challenges resulting quality and excellence, continued to gain popularity as we sustained deliver excellent value to all our stakeholders. as they deserve our thanks for not only helping to deliver record from increased costs of production, to declining consumer spending our growth in overall sales, in both Namibia and South Africa, while financial results, but for their efforts in serving our customers and 18 19 and rising levels of unemployment. However, with recovery from making major inroads into our key markets. The new Windhoek As part of our commitment as a leading corporate citizen - our communities with pride and passion. Their dedication to provide the global financial crisis, and reduction in unemployment, the beer Trade Mark that was launched in March 2012 continued to perform committed to conducting business in a socially and environmentally legendary service and to respond with overwhelming support to industry is expected to witness considerable growth in upcoming well, while contributing to the overall growth in volumes. This was responsible manner - we pride ourselves in having systems in the needs of the communities within which we operate is highly years, with volume growth primarily driven by developing markets. further supported by the launch of a new TV campaign which was place to minimise the potentially negative impact of our operations commendable and deeply appreciated. In developed markets it is likely that the focus will be on premium aired in South Africa and across the region. on the environment and on society. This saw NBL maintaining its brands, new variants and craft beers, as well as pricing. Together position as the alcohol industry leader when it comes to promoting I would also like to extend my profound appreciation to our with increasing economies of scale and efficiency savings, these Namibia Breweries was awarded with the prestigious Gold Deutsche responsible drinking, as well as responsible conduct in the alcohol shareholders, investors, the Government, our business partners, trends should ensure steady margin expansion and strong cash Landwirtschafts-Gesellschaft (DLG) award for four of all its brands, industry, through numerous responsible drinking initiatives. At the associates, customers and consumers, for their continued support. flow. namely Tafel Lager, Windhoek Draught, Windhoek Lager and same time, in fulfilling our obligation towards making a valuable Your board remains committed, and we look forward to serving you Windhoek Light in 2013, again reaffirming our commitment to contribution to the society within which we operate, we continued in 2014. O&L GROUP CONTEXT consistently delivering exceptional quality. to deliver a comprehensive corporate social investment programme The Ohlthaver & List Group of Companies (O&L) - of which NBL is which supports key national development areas. a subsidiary - is driven by its purpose ‘Creating a future, enhancing The project to upgrade the brewhouse was completed in the first half Sven Thieme life’, which is further supported by Vision 2017 which is ‘to be the of the financial year, and I am confident that we have now created The Namibia Breweries Limited Board is committed to the highest Chairman most progressive and inspiring company’. I am pleased to report that sufficient capacity to support our export strategy going forward. I standards of corporate governance. This report outlines the way the significant progress has been made in delivery against objectives as am pleased to report that during this year, we delivered the highest Directors control and govern NBL. Namibia Breweries Limited is per the metrics defined in Vision 2017, and herewith wish to report annual volume ever produced in the Windhoek Brewery, namely 2.6 subject to all legislation in Namibia as well as the listing requirements on but a few highlights pertaining to the year under review. million hectolitres (hl) of beer. of the Namibia Stock Exchange (NSX).
The O&L Group was awarded the overall 1st place in the 2012 and The expansions included a number of greening initiatives, which, We are inspired and determined to really create a breakthrough 2013 Deloitte Best Company To Work For survey in Southern Africa, together with our continued focus on enhancing efficiencies, organisation where the highest level of affinity/connection, ownership as well as the 1st place as Best Company To Work For in Namibia, supported our sustainability agenda. Furthermore, the board and interdependence is evident in our people, products and services. while also again being awarded the Seal of Service Excellence. approved the installation of a 1 MW on-grid solar photovoltaic (PV) As part of the O&L Group, with its vision to be the most progressive This is an outstanding yet humbling achievement for us as we have facility that, once it has been fully installed towards the end of 2013, and inspiring company and its over-arching vision metrics of retained our position as Best Company To Work For in Namibia for will be the largest roof-mounted PV solar plant in Africa to date. N$2 billion EBIT, a further 2500 employment opportunities, two consecutive years, but even more so, for being voted by our reducing its carbon footprint, as well as being a preferred employer employees as the top company in the region, after increased stiff Part of our strategy, as a member of the O&L Group, is to build of choice, we are set to achieve Vision 2017. competition. innovative and sustainable businesses, which generate long-term profitability. As such, NBL had in 2011 commenced with barley While we expect the economic conditions in some of the markets This further shows the tremendous commitment and dedication trials to determine the feasibility of establishing a successful barley in which we operate to remain challenging, I am confident that we have to excellence in all our people management processes. industry in Namibia, with the further aim of providing numerous our management and employees will continue to deliver superior As our business grows, we will continue to grow our people, and employment opportunities and secondary benefits to our country, performance and continue to deliver value to all our stakeholders. further enhance our employee’s welfare, their capabilities, and their while meeting our own supply needs. expertise and experience. Managing Director’s Report...
MANAGING DIRECTOR’S REPORT
20 21 I am pleased to report that, during the year under review, “EVERYONE PURPOSEFULLY PRODUCING BREAKTHROUGH Namibia Breweries Limited (NBL) delivered another solid financial EVERYWHERE” performance with an operating profit of N$500 million and revenue We also invested heavily in the training and development of our of N$2,383 billion, compared with the prior year’s operating profit staff across the business in order to maximise their knowledge of N$429 million and revenue of N$2,160 billion. This translates to and expertise, develop job-specific technical skills, and enhance a healthy increase in operating profit of 17% and revenue increase leadership capacity. In addition to the Ohlthaver & List Group (O&L) of 10%. A 62c dividend per share was declared for the full year. This World Leadership Development Programme, we introduced the performance, despite the challenging environment within which we Leadership Foundation Programme and the Business Management operate, is evidence that our 2017 breakthrough plan is delivering Skills Programme during 2012, which was successfully completed positive results. by 21 employees (14 completed the Leadership Foundation Programme and 7 completed Business Management Skills During 2012, and again this year, NBL made major inroads into Programme). key markets and continued to grow overall sales in both Namibia and South Africa. In Namibia, the Tafel Lager brand continued to In 2012 and 2013, the Ohlthaver & List Group of Companies was spearhead NBL portfolio growth and helped increase market share voted as the No 1 Best Company to Work For in Southern Africa and despite the size limitations of the domestic market. In response to Namibia in the large category in the Deloitte Best Company To Work consumer demands for convenience and value, NBL also launched For (BCTWF) Survey. Employee engagement was and will remain an a new Tafel Lager 440-ml can domestically. Windhoek Draught integral part of our strategy to entrench our values as defined in our continued to perform well and contributed to the overall growth Mwenyopaleka Programme, and to ensure that employees are fully in Namibian volumes. Despite pressure from mainstream brands, aligned to our business objectives and purpose, and will continue Windhoek Lager maintained its positive contributions to sales in to drive breakthrough performance during the next financial year. Namibia. “AMAZING EXPERIENCES, ENDURING IMPACT” In our export markets, growth rates varied, with the impact of Following the major capital investments of 2011 and 2012, I am restrictive legislation being felt most in Botswana, where alcohol pleased to report that further investments were made to extend levies rose beyond the 40% mark. In Mozambique and Zambia, the brewhouse and expand capacity, while further greening our Windhoek Draught did particularly well. DHN Drinks, our joint operations. With all the investments to expand capacity completed venture in South Africa, continued to grow its portfolio at single-digit during 2013, I am confident that sufficient capacity has now been levels despite the highly competitive environment. The Windhoek created to support our export growth strategy going forward. Vigo, trademark delivered tremendous growth in South Africa, with the NBL’s new-to-world malt soft drink range launched in May 2012, performance of Windhoek Draught 440-ml cans being one of the had a solid start and exceeded all expectations. In line with NBL’s main contributors to surpassing the 1,000,000-hl mark in 2012. commitment to promoting responsible drinking and in response to The Windhoek trademark saw the launch of a new TV campaign consumer demands for premium low and non-alcoholic drinks, we which was aired in South Africa and across the southern African will continue to innovate in this arena and deliver further value to our region. consumers. Managing Director’s Report... Sustainability Report...
Following on the successes of our brands in the 2010, 2011 and 2012, which recognises Namibians who, like our Windhoek Lager 2012 coveted Deutsche Landwirtschafts Gesellschaft (DLG) Awards, brand, have achieved international recognition for their exceptional we are proud that our four key brands; Tafel Lager, Windhoek Lager, qualities. These individuals are nominated by the public as goodwill Windhoek Draught and Windhoek Light, all obtained gold medals at ambassadors for their efforts to enhance the lives of all Namibians. the 2013 DLG Awards, while Windhoek Lager, Windhoek Light and Urbock also won medals at the European Beer Star Awards in 2013. FUTURE OUTLOOK Despite the challenges the alcohol industry faces in terms of so- A further development we are pleased to report on, is the newly called “sin taxes” on alcohol, as well as restrictive legislation introduced Sales Automation System, which supports our QDVP4 impacting on profitability, we believe the investments behind our (Quality, Distribution, Visibility, Price, Promotion, Persuasion and brands, our production facilities and our staff, have paved the Partnership) model, and enables us to continue delivering service way for further growth. We are also confident that, amidst the excellence to our customers and consumers alike. In ensuring that increasingly competitive environment in South Africa, our joint we create further value to customers as well as promote responsible venture, DHN Drinks, will remain important for growth in the 22 23 conduct in the broader liquor industry, we also work closely with beer portfolio. As such, going forward, we will transfer volumes to A COMPANY IS ONLY AS GOOD the Namibia Shebeen Association to provide training and coaching appropriate production sites to maximise efficiencies, while creating AS THE PEOPLE IT KEEPS aimed at uplifting standards and encouraging self-regulation in the opportunities for further innovation and export growth. informal liquor outlets known as shebeens. Mary Kay Ash With regard to exports, we are excited about our new strategy by “SUSTAINABLE EXECUTION IN EVERYTHING” means of which we are focusing on growing four key markets in NBL is committed to operating its business in a socially and the southern African region by placing our own Market Managers environmentally responsible manner, and has earned recognition in these locations, working closely with our distribution partners as Namibia’s alcohol industry leader when it comes to promoting in-country, and providing further advertising and promotion responsible drinking and practising effective self-regulation. We investments behind our brands. With the new structure put in place continued to roll out the responsible drinking programme, DRINKiQ, to support our export markets, and a more focused approach to amongst both our staff and external stakeholders, equipping them servicing our other trading markets, we are confident that our export with facts about alcohol and encouraging responsible choices. strategy is well on track. We will continue to leverage our portfolio of premium beers, particularly the Windhoek trademark, but will also We are particularly satisfied with the progress we made in greening capitalise on new opportunities through innovations and renovations, our operations and supporting our sustainability agenda. In June exploring the growing craft beer segment at the same time, and 2013, the NBL Board approved the construction of a major solar responding to consumers’ ever-changing needs. We are confident energy plant. Once it is complete, Namibia Breweries will have the that the business will continue to benefit from the investments largest rooftop solar plant in Africa. In terms of water, our usage per made, and that this, together with the passion and commitment of unit of beer increased slightly from 4.3 units of water per unit of beer our people to take this business to a new level, will ensure that NBL in 2012, to 4.5 units of water per unit of beer in 2013. However, maintains its trajectory towards growth and prosperity. we are confident that we remain on track to our target of achieving below 4 units of water per unit of beer in the next four years. Our APPRECIATION efforts to enhance our contribution to the society within which we I wish to express my sincere appreciation to the Board, our operate saw another milestone being met after we successfully Chairman, the Management, and all the employees of Namibia brewed the first-ever batch of beer from Namibian-grown malted Breweries Limited for their unrelenting dedication to Creating a barley in March 2013, to coincide with the celebration of Namibia’s Future, Enhancing Life. In addition, my deepest gratitude goes to 23rd year of independence. This was one of the highlights of our suppliers, customers and consumers for their ongoing support. the year under review, as the barley trials which commenced in November 2011 had now proved successful. This showed that there was merit in exploring the malting options available to NBL Hendrik van der Westhuizen in its quest to establish a local barley industry that would have the Managing Director potential to stimulate further job creation. In creating shared value for our consumers and celebrating national pride, we launched the third annual Windhoek Lager Ambassador Awards in September Sustainability Report...
SUSTAINABILITY REPORT
24 25 As part of the O&L Group and inspired by our purpose of creating Supporting initiative: Managing talent a future, enhancing life, Namibia Breweries Limited embraces Inspired by our purpose of Creating a Future, Enhancing Life, its obligations as a corporate citizen towards the society within the development and growth of our own and the nation’s talents which it operates, as well as towards its shareholders, employees, remained a critical human capital initiative for NBL. Our talent stakeholders and the environment, and is therefore committed to management strategy focused on talent attraction and acquisition, operating its business in a sustainable way. talent development and up-skilling, as well as succession planning.
We continued to invest in people through various training opportunities such as generic interventions, specialised external courses, study OUR PEOPLE loans granted, secondment to international assignments with our partners, internship opportunities, and the allocation of bursaries. HUMAN CAPITAL PERSPECTIVE A new breakthrough initiative launched during the year under NBL’s people-oriented strategy has been connected to the review was the Basic Management Skills Programme for entry- Group strategic focus area Everyone is Purposefully Producing level managers. NBL has well-defined succession policies and Breakthrough Everywhere. This strategy was designed to achieve retention strategies in place together with aggressive development three key strategic outcomes, and has been supported by various programmes in order to ensure the readiness of successors and the breakthrough initiatives designed to realise those outcomes, namely: retention of a high-quality workforce.
Strategic Outcome 1: Everyone is deeply connected to purpose, Supporting initiative: Leadership development lives the values and is proud of what they do. As part of leadership development, Gap International – a United States-based consultancy – continues to provide support to the Supporting initiative: Excellent company climate senior leadership team through its Performance Diagnostic tool. The Ohlthaver & List Group was awarded the overall winner position The team has benefited substantially by the acquisition of skills from in the Large Business Category of the 2012 and 2013 Deloitte’s this programme, which aims at improving business performance. Best Company to Work For Survey in Southern African Development Community (SADC) and in Namibia. Through benchmarking our The O&L World Programme is another breakthrough milestone that human capital practices against best practices of other companies, has made an enormous contribution towards building leaders within participation in this survey has enabled us to improve our human capital the business. This Programme was developed in-house, and aims at policies and procedures and to ensure that our people are connected sharing the O&L history, purpose, values and leadership philosophy to our purpose. The conferring of this award indicates that our people so that a collective mindset, behaviour and culture, are achieved, have recognised the improvements we have brought about, and that and leadership model competencies are entrenched within the we are on the right path towards realising this strategic outcome. organisation. O&L World is facilitated by the NBL Board Chairman and senior leaders, which is testimony to the importance the Group Strategic Outcome 2: Everyone is successful, thriving and making attaches to leadership development. things happen in breakthrough mode. NBL’s overall Value Star winner for 2013 Sustainability Report... Our People...
Strategic Outcome 3: Everyone is valued, recognised and Our various internal newsletters also contribute towards continuing to NBL understands that safety knowledge improves through ongoing increased productivity, and reduced absenteeism. To the employee, appreciated for the difference they make. build a culture of open, honest and from-the-heart communication. training and awareness creation. Thus, we constantly invite it means a safe and healthy work environment, enhanced self- employees to let us have their input on ensuring safety at work. At all esteem, reduced stress, improved morale, increased job satisfaction, Supporting initiative: Talking to and rewarding our people Partnership relationship performance indicators our operations around the country, we are committed to providing a and increased skills and knowledge for the protection of their health Employee engagement and consultations are critical success factors A proficiency test is a method used to validate a particular safe and healthy working environment through the implementation and safety – all of which lead to an improved sense of well-being. for the realisation of our strategic outcomes. Employee engagement measurement process. The artefact’s reference is not known by the of our occupational health and safety policies and procedures, and communications were accomplished through the continuation participating laboratory at the time of its measurement and, thus, which are guided by legislation and international best practices. In addition, internal and external audits are conducted on a regular of successful and thriving platforms such as Open Forum meetings, the proficiency test is an excellent way to validate the laboratory’s Our vision is to make and deliver our products with zero work-related basis to indicate our level of legal compliance in respect of health and the MD’s Road Show, Leadership/Shop Steward Meetings, Union measurement process. injuries and illnesses on the part of our shareholders, contractors safety activities. Awareness sessions and induction programmes are Leadership Engagement Forums and the Affirmative Action and other stakeholders. Our principal measure of health and safety in place to promote behavioural safety on our premises. Similarly, we Consultative Committee meetings. Our Mwenyopaleka Value NBL has been taking part in Heineken Proficiency Ring Testing over performance is in the number of accidents which have resulted in regard the safety of contractors working on our site as being of vital Programme continued through various initiatives such as the Value many years, namely Heineken Analytical Ring Analysis (HARA) and days lost from work. As a point of increased concern and ongoing importance. Contractor safety requirements, which are compulsory Star Programme, Fun Days and the monthly newsletter. Heineken Microbiology Ring Analysis (HMRA). HARA’s primary aim attention for us is the accident frequency rate which, over the to any contractor performing work on our premises, make explicit 26 27 is to promote the quality of the analytical measurement of a range of reporting period, was 0.5 per 200,000 hours worked, resulting in a provision for compliance with NBL’s health and safety policies and Reward programmes, such as Value Star, long-service awards, components in beer for all Heineken-related brewery laboratories, total loss of 68 days of work. national legislation. the short-term incentive scheme as well as the improved incentive while the primary aim of HMRA is to improve the quality of scheme for the bargaining unit, were key initiatives with which we quantification and identification of a range of beer-related micro- All lost-time injuries were production-related and, as a result of Monitoring workplace exposure and health recognised and rewarded our people for the difference they made. organisms. HARA and HMRA enable participants to demonstrate investigations into these incidents, the application of safe work A fundamental goal of our occupational health programme is to to their customers and Management the validity of their results, and procedures was reinforced. As we do with all incidents, we learn prevent occupational diseases by eliminating exposure to them, or New e-recruitment system they highlight opportunities for improvement of these analyses. from these events to help strengthen our programme going by controlling such exposure to levels believed to be safe. Where In order for us to accelerate employee recruitment, reduce cost, forward. We continuously strive to improve our safety and health hazards to health exist, they are measured, assessed in terms of broaden our pool of potential recruits and build a future database Since December 2012, NBL began participating in the Heineken programmes and records. We believe visible, demonstrated their significance, and controlled at source. To determine the nature of applicants, we have finalised and launched the E-recruitment Sensory Ring Analysis (HSRA) with great achievements. The leadership commitment and a strong health and safety culture are and extent of potential health hazards, an occupational hygiene Portal. Through this portal, managers can also direct and monitor primary aim of the HSRA is to support all breweries in the sensory key drivers of this improvement. In pursuit of this goal, we focus survey was conducted to assess and control environmental factors an employee’s performance and development during his/her period recognition of a range of flavour components in beer. The sensory on reporting and data accuracy; constantly enhance safety training and stresses arising in or from the workplace which might impair of probation within the business. Furthermore, the portal provides ring enables participants to demonstrate their ability to recognise and the sharing of best practices; and intensify our campaigns on the health or well-being of our staff. The survey included the opportunities to the business to migrate key Namibian talent across components in beer, and reveals opportunities for improvement and behaviour-based safety. Additionally, we continue to monitor the measurement and evaluation of noise levels, indoor and outdoor air the globe and back home, and ease the skills shortage for highly targeted training. safety performance of our operations through routine internal and quality, and the quality of illumination. specialised jobs within the market. external audits of performance in terms of our own internal standards Below are NBL’s proficiency test results, i.e. itsFirst Time Right and requirements, as well as applicable laws and regulations. In an To ensure potential hazards are properly controlled, baseline and ENGAGING OUR PEOPLE laboratory results, for 2012. These results indicate that the attempt to ensure health and safety information is communicated on periodic medical examinations are also conducted to monitor NBL realises that our employees are our most valuable assets. laboratory has been excelling in the three disciplines of laboratory various platforms such as our production areas, where the majority personal health in relation to exposure to job-related health hazards. Therefore, we place great emphasis on employee engagement and competency, as follows: of staff work shifts, workplace forums are held on a weekly basis. Through this risk-based medical surveillance, we were able to communication. Testimony to our results in this regard is not only This provides a fast-track communication vehicle to reach all those assess each individual in respect of his/her fitness for the tasks NBL’s business performance, but also our outstanding achievement Heineken Heineken Heineken working on our premises. We use these forums not only to draw being performed, ensuring their long-term capacity to work. During as the Best Company to Work for in Namibia and in the Southern Year to date Analytical Microbiology Sensory Ring attention to specific health and safety issues and our performance the period under review, almost 95% of our staff complement African Development Community (SADC), as rated by Deloitte’s Best Ring Analysis Ring Analysis Analysis record, but also to recognise achievements and positive behaviour. underwent the medical examination. With the information obtained Company to Work For survey in 2012 and 2013. Our participation in from these examinations, we were able to establish an occupational January – the survey was not aimed at earning accolades, but rather at creating 95.4% (Excellent) 94.9% (Excellent) 96.5% (Excellent) Our periodic health, safety and fire risk assessments also guide us health and wellness programme to suit the corporate health profile. December 2012 an opportunity for introspection and evaluation in order to gauge in respect of measures that have been recommended in controlling what our employees were experiencing in respect of working for us. identified hazards, selecting personal protective equipment, In additional to previously identified occupational hygiene stressors, We believe that, by creating an excellent employment experience, Zero accidents reviewing of written safe working procedures, promoting measures we realised there was a need to extend clinic services to include and effectively engaging our employees to be aligned to achieving NBL is committed to ensuring a safe and healthy work environment to reduce risk, and the interaction or consultation between health screenings such as those for weight management, high blood our strategic objectives, we will continue to grow and sustain our for all. The health and safety of everyone who works at NBL, including Departments before commencing new projects or installations. The pressure and unhealthy levels of cholesterol. Now, through regular business. Therefore, we live our value Let’s Talk through various at all our distribution centres around the country, depends on a benefits of such a programme are endless. monitoring and by means of awareness and educational sessions, platforms. These include Open Forums and workplace forums, the general ‘zero tolerance’ policy, based on ensuring the reliability of we aim to change behaviour in order to manage the health and MD’s Road Show, Leadership/Shop Steward and Affirmative Action installations, machinery, adhering to safe working practices, health NBL’s health and safety programme demonstrates that we are a wellness of our employees through a holistic approach. Consultative Committee meetings. monitoring, and investigation of all cases of incidents or accidents. company that cares. As a result, we enjoy improved staff morale, Sustainability Report... Our People...
Our absenteeism monitoring programme has also greatly contributed situations that could possibly occur. Having considered various principles, this is not what inspires us to continually understand drafted by the Ministry of Health and Social Services will continue as to being more proactive in identifying potential negative trends. As a scenarios, we have drawn up plans of how we will respond in our impacts on the environment and society, and ensure that we we strive to effectively address alcohol-related harm, and contribute result, the employees identified are expected to attend a counselling different situations. In any emergency situation, having the basic contribute in a meaningful way. to establishing a society that enjoys alcoholic beverages responsibly. session. Having a system that assists us in accurately monitoring knowledge or guidance of what is to be expected and to assist absences due to ill health has had only positive results, including an one in responding appropriately to it. Our objective, therefore, is to Promoting responsible drinking Caring for our environment overall reduction in staff taking sick leave, and a resultant positive reduce the possible consequences of an emergency by preventing As a caring corporate citizen, we not only believe in giving back to Mindful not only of the potential dangers manufacturing industries effect on costs to the company. In addition, we are now able to fatalities and/or injuries; reducing damage to buildings, machinery, the community that supports us, but also ensure that we conduct could pose to the environment, but also of the scarcity of production identify potential work process problems, trending analysis by equipment or product; and resuming normal operations after the our business in a responsible manner. Leading the responsible inputs, NBL continuously seeks ways to reduce its environmental absence type, Department, individual, or time-specific details. event. Our emergency plan, which is revised on an annual basis drinking agenda in Namibia, NBL was instrumental in establishing impact and to enhance the sustainability of its operations. due to the increased project activity on site, includes all possible the Self-regulating Alcohol Industry Forum (SAIF) in 2007. Still Therefore, as part of NBL’s strategy to employ sustainable resource Dealing with growing workloads emergencies, consequences, required actions, written procedures, today, NBL leads the alcohol industry in Namibia in promoting self- management practices, the business also continuously benchmarks Occupational stress is not only related to what goes on at work: and the resources available. We also have detailed lists of regulation, responsible conduct, and alcohol harm-reduction. Apart its operations against similar-sized breweries globally by measuring conflicts between the demands of the workplace and those at personnel, including their home telephone numbers, their duties from maintaining existing responsible drinking programmes such as and improving efficiencies on components such as water 28 29 home are increasingly common. Indeed, a healthy balance between and responsibilities, site plans, and large-scale maps showing DRINKiQ and our Think Ahead – Don’t Drink and Drive Programme, consumption, energy usage and packaging materials. The results of the working and personal lives of an organisation’s staff is very evacuation routes and service conduits such as water and power NBL also extended its responsibility as a leader in this area by this commitment to sustainability have been that NBL is consistently important for its sustainability. Experience indicates that, if a person lines. Furthermore, we ensure new employees understand their partnering with the Namibia Shebeen Association to conduct amongst the top five breweries in its peer group in Africa. While is not coping well, their health suffers; their relationships at work roles and responsibilities in the event of an emergency situation, training and support capacity-building in the informal liquor outlet NBL’s commitment to the environment has seen the business invest and at home become strained; and they become irritable, their and that they familiarise themselves with emergency escape routes, segment. Like bars everywhere, shebeens are often associated with in environmentally friendly practices for quite some time, particularly concentration is compromised, and their judgment is impaired – all assembly points, and the location of emergency equipment. various social problems. For this reason, NBL conducted training significant progress in greening operations was achieved in the past of which normally lead to an increase in accidents and mistakes. sessions for shebeen owners and their staff, not only to provide three years alone, through our various expansion projects. These Due to the nature of our operations, we encourage employees to them with basic business skills, but also to encourage responsible included the installation of a new ammonia (NH3) cooling circuit NBL, through addressing the well-being of our employees, is able undergo first aid and fire-fighting training. We are proud to report business conduct and adherence to the law. and a new boiler system. These two measures enhance efficiency to maintain an environment that is conducive to building positive that, in every area of work, on every shift, on any given day of the considerably while reducing NBL’s carbon footprint. During the working relationships and identify employee concerns at an early week, we have persons qualified and certified to attend to fire- With high rates of unemployment in Namibia and challenges in reporting period the Board also approved a further investment in a stage. We support the well-being of employees by encouraging and fighting and first aid incidents. Our employees have received formal education, alcohol abuse is a symptom of various socio-economic 1-MW solar power plant which will be installed on the rooftop of NBL’s promoting healthy lifestyles and team-building events to minimise training in fire safety, during which time they receive information on problems faced by society. Therefore, strategic partnerships, wide main plant. This will effect further reductions in NBL’s carbon output. stress. We also ensure that time cards are monitored strictly to how to prevent fires from starting as well as what actions to take stakeholder participation, and targeted interventions are essential minimise events where employees work overtime on a regular basis. if fire breaks out. In addition, we have persons equipped with the in turning around harmful drinking patterns. It is this approach that In addition to employing cleaner production practices, NBL necessary information and equipment to apply first aid. We maintain also saw NBL partnering with the road safety fraternity, amongst has earned recognition as a leader in promoting environmental Healthy employees good working relationships and ensure a close liaison with external others the Motor Vehicle Accident Fund, the Namibian Police and preservation beyond our operations by leveraging our role as one of NBL has realised that a workplace wellness programme is an organisations such as the Fire Brigade and its Emergency Services the City Police, which contributed to the success of NBL’s Think Namibia’s leading corporates. We work with numerous stakeholders investment in our most important resource: our people. While Department, and well as with government bodies such as the Ahead – Don’t Drink and Drive Campaign. in promoting natural resource management in the broader productivity and overall revenue are important, the bottom line Ministry of Labour and Social Welfare and the Ministry of Health and community as well as foster a sense of environmental responsibility. of such programmes is that a healthy employee tends to be a Social Services. We encourage representatives from these offices to In creating ambassadors for responsible drinking and increasing In this role, NBL has led a number of successful clean-up projects happier and more productive employee. Indeed, employee welfare visit our premises on a regular basis to familiarise themselves with the pool of knowledge on the subject, NBL continued to roll out such as Project Shine, which has positively impacted the coastal has a direct impact on a company’s success. Programmes at our our set-up when there are any changes in our operations, and when the DRINKiQ Programme with key external stakeholders. These regions of Namibia since 2007, and is still going strong. New operations range from simply offering information to workers, to we are in need of consultation in the event of new projects. With included health officials, law enforcers, Town Councillors, and social initiatives such as the Fish River Canyon Clean-up to remove litter subsidising healthy lunches and providing fitness information. them being so actively involved, we are guaranteed that they are workers. NBL also continued to conduct the DRINKiQ Programme from the second largest canyon in the world were launched in 2012. In addition, our canteen operations underwent a major facelift familiar with our site layout and can, therefore, assist us optimally in with all employees attending the O&L Group’s Induction. during the year under review – not only in terms of newly installed the event of an emergency. In addition to the continued success of recycling projects through equipment, but also by preparing meals that people consider to be Under the Chairmanship of NBL, SAIF also continued to grow, not the Recycle Namibia Forum, of which NBL is a founding sponsor healthier options. By providing employees with these services, we CORPORATE SOCIAL INVESTMENT only in terms of its membership base and effective self-regulation, and active member, NBL depots were also actively involved in aim to improve their well-being and job satisfaction as well as raise We depend on all our stakeholders for our persistent progress and but also in respect of harm-reduction interventions. SAIF has supporting recycling efforts, mostly by individuals. These individuals our staff retention rate. growth. Therefore, contributing to our stakeholders, in whatever successfully created various platforms to stimulate balanced debate regularly receive assistance with transporting their recyclables from form, ensures our continued survival and prospects as a business and cooperation amongst stakeholders in order to find solutions various towns to buy-back centres in the city. Emergency preparedness entity. Hence, corporate social investment is at once an investment to key issues such as the legislative framework and ineffective law Not only are we committed to promoting the well-being of all our in our own future as well. However, while our commitment to the enforcement, to name but a few challenges. These initiatives and staff, we also ensure a professional response to all emergency society within which we operate is grounded on sound business other efforts offering input to the National Alcohol Policy being Sustainability Report... Sustainability Report...
Caring for our community The Ambassador competition not only celebrates Namibians who NBL is committed to contributing to communities by, among other have made a positive contribution to society, but also places the things, hiring and procuring locally wherever possible. Therefore, we spotlight on deserving causes and charities, while supporting the give preference to local businesses and small- and medium-scale efforts of the Namibian Government to enhance national pride. enterprises, and are pleased to report that, with local procurement spend having amounted to more than N$575 million during the During the year under review, NBL continued to support various reporting period, NBL currently procures 30% of its goods and other social welfare causes such as the Organisation for the services from local suppliers. Empowerment of Widows/Widowers and Orphans of HIV and AIDS in Namibia (OEWONA), and the Dr Christina Swart-Opperman Great strides were made in the barley feasibility study initiated by AIDS Orphan Foundation Trust (CSO), which provides children in NBL in 2010, which forms part of NBL’s endeavours to add further various parts of the country with necessities such as food, shelter value locally. Following the successful first trials to establish whether and clothing. With our support, the CSO Trust also enhances the brewing barley could be grown in Namibia, larger-scale trials were well-being of these children by paying for their school fees, school 30 THE VALUE OF AN IDEA 31 conducted in 2012 to examine the commercial viability of such uniforms and stationery, as well as by taking care of their health. This an enterprise. The harvest from two trial locations was then sent offers the children an opportunity to live a better life, despite the fact LIES IN THE USING OF IT to Germany for malting, after which it was returned to Namibia. that many of them have lost their parents due to HIV and AIDS. NBL Thomas Edison Soon, we had successfully brewed the first beer ever to contain staff also volunteered their time and energy through projects such Namibian-grown malt barley. This special brew, shared among as the Christmas Tree Initiative for Orphans and Vulnerable Children various stakeholders, was extremely well received. The next phase (OVCs), which entailed making up gift boxes, and the Cancer Apple of the feasibility study will focus on further commercial aspects of a Project, which raises funds for the Cancer Association of Namibia local barley industry, including an analysis of the viability of various (CAN) throughout the year. Furthermore, NBL continued its long- malting options. We are confident that, should NBL, with the support standing commitment to the CAN by sponsoring their awareness- of its partners, be able to stimulate a successful barley industry raising activities aimed at combating the spread of cancer through in Namibia, numerous employment opportunities and secondary early detection and prevention, as well as the AB May Cancer Care benefits will be created for the country. Centre, the country’s only dedicated oncological treatment facility.
In 2010, the year that saw Namibia celebrate its 20th anniversary Stakeholder communication and relationships of independence while NBL toasted to its own 90th birthday, we In living our value, Let’s Talk, we continuously engage in dialogue launched a national pride programme aimed at recognising and with our stakeholders and embrace the notion of co-creation by celebrating remarkable Namibians, who, like the Windhoek Lager considering the views of all role players in informing our decisions brand, have achieved international recognition for their exceptional and shaping the future. Strong relationships are, therefore, at the qualities. Since then, each year an individual has been recognised heart of all our success. We believe that, in order to develop joint as a top achiever and lauded for his or her contribution to enhancing solutions, healthy relationships are essential in sharing knowledge the lives of others. and expertise, and creating value for all.
The third Windhoek Lager Ambassador initiative was launched in NBL has also made significant progress with new initiatives, such 2012, and was extended to engage the public in garnering nominees as our barley project and the solar project. Projects such as these for the awards. The following categories of award applied: offer opportunities to nurture excellent stakeholder relations, and • Education cooperation with and amongst our partners has delivered favourable • Community development results for all. • Sport • Health–Science–Technology • Business success • Conservation, and • The arts. Sustainability Report...
32 33 state of our environment is influenced by our behaviour, and that we OUR ENVIRONMENT have the opportunity to make an impact on the future. Consideration is taken in various areas such as water conservation, energy CONSERVING OUR ENVIRONMENT efficiency, waste reduction and reducing our carbon footprint in “To waste, to destroy our natural resources, to skin and exhaust the order to lessen the impact our business has on the environment. In land instead of using it so as to increase its usefulness, will result addition to the programmes and tools we have developed to reduce in undermining in the days of our children the very prosperity which our environmental impact, we also monitor progress on actions and we ought by right to hand down to them amplified and developed.” promote good practice. Our energy and waste programmes, for Theodore Roosevelt example, consolidate key data on waste, energy, and water use in an effort to reduce consumption across the company. We have also Environmental conservation is the careful use of natural resources developed a tool to measure our carbon footprint. to ensure that there is enough for the future, while ensuring that damage to the environment is minimised. Environmental problems Two of the factors that play a huge role in our business are water such as the depletion of natural resources, water pollution and and energy. global warming have all resulted mainly from human activities. • Water is vital to our business and it is one of the main ingredients Conservation also involves minimising the negative impacts caused in our products. It is also used in our manufacturing process. by these environmental problems. Water is also essential to sustaining every community in the world. We practise our water stewardship in various areas: As citizens of the world, each of us is responsible for the health of we reduce our water use ratio (efficiency), and recycle the water our planet. Our choices and our actions contribute to the well-being used in our operations (wastewater treatment). Water will always or deterioration of the environment. It is our Earth – the only one we be important to our company and country, and we are continually have. Thus, conserving the environment is one of the single most working to reduce our impact and minimise our use. important things that people, companies and countries need to do • We use energy for heating and for power throughout the brewing in their day-to-day lives and operations. and packaging processes. Therefore, the availability and affordability of fuel is vital to our business – as is the availability Environmental sustainability involves making decisions and taking of electricity in the bottling and fermentation process. action that are in the interests of protecting the natural world, with a particular emphasis on preserving the capability of the environment to support human life. It is an important topic today, as people are realising the full impact that businesses and individuals can and do have on the environment.
We at NBL consider it our duty to look after our environment. Thus, we take our environmental responsibility very seriously. We continually enforce the concept amongst our employees that the Sustainability Report... Our Environment...
• Upgrading of the brewhouse for more efficient and flexible NBL has, therefore, embarked on implementing a manufacturing Thermal energy usage GO GREEN! processing execution system (MES) aimed at providing up-to-date information The financial year under review saw 68.4 MJ of thermal energy used Going green is trending worldwide, from food manufacturers • Upgrading of the carbon dioxide recovery plant, and on the performance of key processes, enabling Management to per hectolitre produced. This is well below industry benchmarks. to financial institutions, as more and more people take on • Construction of a solar energy plant. make the right decisions right when they are needed, e.g. decisions The good performance of the previous reporting period was the responsibility for preserving our environment. When one that can save the company money, conserve already scarce water sustained, and will be maintained while we continuously aim to considers the costs and benefits of going green, perhaps the resources, and reduce the load on an already stressed electrical improve on this figure. best place to start is with an understanding of what is meant energy grid. The MES will also tie into laboratory operations, allowing generally by the phrase. closer integration of the quality control and production processes. Non-recycled waste With only 200 g of non-recycled waste generated per hectolitre, Environmentally friendly activities have been popular for True to the vision of being the “most progressive and inspiring NBL is an industry leader. Over 80% of all inorganic waste produced many decades, to conserve energy, reduce pollution and save company to work for”, NBL is using in-house talent to develop an on site is recycled. Organic solid waste from production operations, money. The drive for the more recent green movement came MES that is tailor-made to serve our needs. i.e. spent grain and used yeast, are sold as valuable animal feed. from the theory that the human-generated release of carbon 34 Water treatment 35 dioxide into the atmosphere was contributing to an increase Environmental performance indicators Reduce – Reuse – Recycle: The treatment of waste at NBL in temperatures across the entire planet. These concerns REDUCING WASTE caused some governments, businesses, and individuals to Indicator Unit Target FY2012 FY2013 Waste reduction at NBL is facilitated by constantly monitoring re-examine their own roles in the release of carbon dioxide wastage such as beer losses, as well as the usage rates of – 5.0 Industry Water (hl/hl produced) ≤ 4.0 4.3 4.5 and to attempt to reduce their output of this gas. Average • packaging material Electricity (kw/hl produced) ≤ 7.96 7.9 8.3 Not available • cleaning agents When we speak today of going green, we generally refer to 77.0 Global • raw materials, and Thermal energy (mj/hl produced) ≤ 69.5 68.0 68.4 something broader than global warming. What is usually Standard • water. meant is a heightened awareness of using the Earth’s resources more efficiently. The term today includes efforts Aerial view of the NBL main plant Table 1: Environmental performance indicators Whilst the increase in complexity of the brand portfolio and demand to conserve our natural resources, reduce our contributions for our products has made packaging difficult to manage, losses to landfills, and reduce pollution generally. Water usage experienced in packaging materials remain within industry norms. Going green, can be summarised For the year under review, we used 4.5 units of water to produce each The packaging loss of returnable bottles registers at only 1%, which with the words “reduce, reuse, unit of beer. This is slightly higher than in previous years, although is well below industry norms. recycle” – which means reduce still below international benchmarks. An increase in customer and waste, reuse whatever materials consumer demand has pushed NBL to produce at its maximum As regards its use of low-waste packaging materials for non- you can, and recycle what you can. capacity, whilst still maintaining flexibility. However, doing everything returnable bottles, NBL has switched over from pallet wrapping by humanly possible to meet customers’ expectations has its cost; stretch film to pallet shrouding by stretch hoods. Pallet shrouds add Brewhouse nonetheless, with the new possibilities in measurement available more stability to a pallet of full product than stretch film, resulting The goal of the NBL Environmental Management System is to through MES, what we measure, we can manage. NBL remains in fewer losses of product. The rolls of stretch hood are also more improve our environmental performance. This means we focus on – committed to its 2017 goal of 4 units of water per unit of beer. efficiently utilised by the palletisers than stretch film. In addition, the • optimising our water consumption Manufacturing Execution System Project shrouds are easier to recycle than the wraps. • optimising our energy consumption In 1986, NBL built a new brewery at its Iscor Street premises in Electrical energy usage • recovering our carbon dioxide Windhoek. With a planned yearly output of barely 500,000 hl, The reporting period saw electrical consumption registering at The mainstay of our product portfolio is the 750-ml returnable • managing our waste, and together with a brand-new Siemens-automated brewhouse, it was 8.3 kWh per hectolitre produced – also slightly higher than in the bottle, with its low environmental impact. The new shape of the • innovating our packaging materials and methods. the pinnacle of brewing technology in Africa at the time. Since then, previous financial year. A major driver of consumption is the beer bottle, which was implemented in 2010, has proved – even after NBL has undergone massive development, without having removed clarification system, as well as production pressure created by only three years – to be more resilient to external damage such as Projects in this regard that were completed during the reporting the original production facility. Thanks to countless subsequent constant demand for our extensive 78 SKU portfolio which resulted scuffing, than the older bottle, resulting in fewer losses. period, and new projects that will carry over into the coming modifications, extensions and redesigns, the brewery is still at the in poorer efficiency of power use, due to regular changeovers. financial year, are as follows: forefront of brewing technology, but it now produces five times its Looking forward, MES-driven data will allow for more effective Over the last two years, the consumption of cleaning agents has also • A new water treatment plant, comprising ultrafiltration and original capacity, namely 2.6 million hl per year, with the capacity to control of tank cooling, beer clarification and therefore packaging been reduced by 15%. reverse osmosis for producing high-quality water and improved reach 3 million hl and beyond. line efficiency – the major users of electrical energy in a modern water usage brewery. Reducing water losses and beer losses remain a focus for the future. • A new ammonia-based cooling plant, with improved cooling and With a portfolio of 78 individual stock-keeping units (SKUs), managing process efficiencies this complexity and scale effectively is simply not humanly possible.
Sustainability Report... Our Environment...
REUSING WASTE One of the most important resources in a brewery that can be reused is water. In 2013, NBL started installing a water reticulation 201 system in packaging which will allow rinse water from returnable- container rinsers to be used as cleaning water elsewhere in the packaging cycle.
In other cleaning systems throughout the brewery, the last-rinse 192 water of cleaning operations is mostly reused as the first-rinse water in the next cleaning operation. 2012 2013 Spent grain from the brewhouse is reused as nutrient-rich animal feed. Figure 1: Non-recycled industrial waste per 1,000 hl produced (kg) 36 37 Sugar used for the production of carbonated soft drinks is supplied in 1-t bags. The bags are returned to the supplier, who reuses them. Reducing environmental impact The main cleaning agent used is lye (caustic soda). This is used in EFFICIENT CARBON DIOXIDE RECOVERY cleaning-in-place (CIP) systems. The lye is reused until it loses its Carbon dioxide is produced as a natural by-product of fermentation. effectiveness, after which the lye is pumped into a sedimentation At NBL we collect, purify and reuse this gas for filling beer and tank. There, the dirty sediments settle and are removed. The to produce carbonated soft drinks and ready-to-drink alcoholic remaining liquid is still usable: it is refreshed with new lye to the beverages. correct cleaning concentration, and reused. In order to accommodate the increase in beer production, the RECYCLING WASTE outdated carbon dioxide recovery plant is being replaced with An accredited waste contractor removes and sorts waste for recycling a modern, efficient and environmentally friendly plant, with an at NBL. Much of the waste is already sorted on-site into plastic, additional 98 t of storage capacity. Thus, instead of releasing glass (where possible, already colour-sorted), steel, aluminium and the harmful gas into the atmosphere, NBL can recover and store paper. Over 80% of all inorganic solid waste produced on-site is carbon dioxide for use in other areas of production or sell it to other recycled in this manner. companies who need a high-quality form of the gas.
NBL is a founding and active member of the Recycle Namibia EFFICIENT HEAT ENERGY USAGE Forum, which vigorously promotes recycling throughout the country. During the year under review, the brewhouse was upgraded. Part of The waste contractor also provides what it calls File 13 containers this upgrade entailed the installation of internal boilers in the wort for offices in NBL, where paper waste is collected for recycling. kettles. This change has brought with it some reduction not only in the use of heat energy in the brewhouse, but also, therefore, in the consumption of fuel used to create this energy. Lower fuel usage means lower carbon dioxide emissions – which reduces NBL’s carbon footprint.
REDUCING THE CARBON FOOTPRINT OF INCOMING MATERIALS
Hazardous waste One of the main contributors to a manufacturer’s carbon footprint Non-recycled organic industrial waste is the transport of incoming materials and of outgoing finished Non-recycled waste to landfill product. Thus, every effort is taken to maximise loads and, once Recycled industrial waste the trucks have distributed finished product, to have them return Recycled organic industrial waste with new packaging material or empty returnable bottles and crates. 2012 2013
Figure 1: Waste type Lautertun Tank in the Brewhouse Sustainability Report... Sustainability Report...
Another innovation is the use of Namibian-grown barley. In partnership with the Faculty of Agriculture and Natural Resources CARBON FOOTPRINT: at the University of Namibia, NBL is assisting with efforts to grow SOME DEFINITIONS AND EXPLANATIONS barley in Namibia under various irrigation schemes. After this barley was harvested, it was specially malted for us in Germany • “… the total sets of greenhouse gas emissions (such as before being used. In March 2013, an Independence Lager, brewed carbon dioxide and methane) caused by an organisation, with Namibian malt barley, was produced. The quality of the beer event, product or person.” 1 was consistent with that brewed with solely European malt barley. By sourcing raw materials from local suppliers rather than from • “… a measure of the total amount of carbon dioxide (CO2) overseas, the environmental impact of transporting raw materials and methane (CH4) emissions of a defined population, to production sites is greatly reduced – not to mention the social system or activity, considering all relevant sources within benefit of creating more livelihoods for local farmers. the spatial and temporal boundary of the population, system or activity of interest. Calculated as carbon dioxide equivalent 38 39 REDUCING THE IMPACT OF EFFLUENT (CO2e) using the relevant 100-year global warming potential THE ONLY WAY TO DISCOVER THE LIMITS OF THE POSSIBLE Effluent at NBL is collected in large tanks. There, its power of Hydrogen (GWP100)”. 2 IS TO GO BEYOND THEM INTO THE IMPOSSIBLE (pH) and temperature are balanced out, and solids are removed. Only then is the effluent released into the City of Windhoek’s effluent • One’s carbon footprint measures the total amount of Arthur C. Clarke stream, thus reducing the impact on the environment. greenhouse gases emitted as a result of one’s daily activities and processes. This includes collecting and delivering raw Using cleaning materials efficiently and reducing product losses also materials, processing such materials, and transporting means cleaner effluent. In addition, NBL uses disinfection media finished products to customers. All of these processes such as peracetic acid and hydrogen peroxide, which naturally require energy and, if this energy is derived from burning break down into water and dissolved carbon dioxide and, thus, have fossil fuel, it creates a carbon footprint. no environmental impact.
REDUCING THE IMPACT OF ENERGY GENERATION 1 Carbon Trust (2009); cited at http://en.wikipedia.org/wiki/ A 1-MW photovoltaic solar power plant has been commissioned, Carbon_footprint, last accessed 16 August 2013. and construction will start on it in the second half of 2013. Covering 2 European Rental Association (2012); available at the roof of the packaging hall, this plant will provide up to a third http://www.erarental.org/userfiles/file/ERA%20Publications/ERA%20 of NBL’s electrical power needs, significantly reducing both cost -%20FAQ%20Carbon%20Footprint.pdf; last accessed 16 August 2013. and environmental impact, whilst reducing the strain on Namibia’s power grid.
The possibility of reusing spent grain as an energy source is also being investigated.
Looking back at the year under review, NBL has had a tough time managing the demands of its customers whilst still running a low-carbon-footprint and water- and energy-efficient production facility. We will continue to seek further opportunities to improve efficiencies. Sustainability Report...
40 41 • Tafel Lager – Winner of a Gold Medal in the category “European- BRANDS, GROWTH & FOCUS Style Mild Lager” at the 2008 European Beer Star Awards in Nuremberg. OUR AWARD-WINNING BRANDS AND OUR PASSION FOR • Urbock – Winner of a Bronze Medal at the 2013 European Beer EXCELLENCE Star Awards in Nuremberg Consistent quality leads to winning brands NBL does not compromise on quality as only consistent quality QUALITY TO OUR CONSUMERS and excellence will guarantee the long-term success of NBL beers NBL is dedicated to the highest quality in all the work we do. Quality in the market locally and beyond. This great commitment and is the uncompromising standard for our actions, and it flows from workmanship has resulted in numerous awards for NBL brands. The our passion and our pride in being part of the O&L community. following were the most notable recent achievements: Quality work, which results from our personal efforts, is the first • Namibia Breweries Limited – Recipient of a Bronze Medal Best of ingredient of quality brands and the source of our reputation for the Best, for Sustainable Quality in the DLG Awards having high standards. As a sustainable business, we understand that achieved above average results for 5 uninterrupted years being consumers must trust NBL and the quality of our brands. Therefore, 2008, 2009, 2010, 2011 and 2012. our NBL Quality Policy commits us to delivering quality products • Windhoek Lager – Winner of a Gold Medal at the 2007, 2008, and services by doing the right things right – the first time, and every 2009, 2010, 2011, 2012 and 2013 International DLG Awards as time. The quality of our products and services has always been one well as a Bronze medal at the 2013 European Beer Star Awards. of our company’s key values; hence, NBL is committed to deliver • Windhoek Light – Winner of a Gold Medal at the 2005 Brewing quality products and services by – Industry International Awards, and winner of a Bronze Medal in • striving to continuously exceed the expectations of our 2007, a Silver Medal in 2006, 2010, 2011 and 2012, and a Gold consumers, customers and stakeholders Medal in 2013 at the International DLG Awards • continuously improving our products, processes, procedures • Windhoek Light – Winner of a Silver Medal in the category and methods, and “German-style Leicht Bier (Light Beer)” at the 2012 and 2013 • providing our employees with a suitable work environment, European Beer Star Awards in Nuremberg infrastructure and adequate resources to complete their work • Windhoek Draught – Winner of a Silver Medal at the 2006 with the highest proficiency and to enable them to develop their International DLG Awards, and Gold at the 2007, 2008, 2009, skills to a competent level. 2010, 2011, 2012 and 2013 Awards • Windhoek Draught – Winner of a Silver Medal in the category NBL is forever striving to produce quality products that are not “European-style Mild Lager” at the 2012 European Beer Star only safe for consumption, but which also meet the needs of our Awards in Nuremberg consumers and the expectations of consumers. We do so by being • Tafel Lager – Winner of a Silver Medal at the 2006 International fully compliant with the Hazards Analysis and Critical Control Point DLG Awards, as well as Gold at the 2007, 2008, 2009, 2010, (HACCP) South African National Standard (SANS) 10330:2007 on 2011, 2012 and 2013 Awards, and food safety. Sustainability Report... >>>>>>>
The relationships we develop with consumers are based on trust. consumer, and relentlessly unpacking consumer insights. Vigo, We also strictly ensure that we only target and sell to people over the NBL’s non-alcoholic malt-based beverage, continues to enjoy legal purchasing age. phenomenal success, surpassing initial projections by 100% by the end of the financial year under review. The overwhelming customer NBL prides itself in having stringent testing on all its raw materials as and consumer response is ascribed to the unparalleled quality of well as in-process and final products to ensure that only the highest both the intrinsic and extrinsic properties of the brand. quality raw materials are used and that all processes yield a high quality liquid that will be enjoyed by our consumers. Therefore, In creating enduring consumer experiences, Vigo launched multiple to fulfil consumer expectations, NBL’s standards are designed to campaigns using both traditional and digital media, and the brand detect and address all defects through its quality management now boasts first place in Namibia with Facebook likes of over systems. Our quality standards are measured internally through 20,000 within a period of seven months – clearly authenticating packaging defects, and externally through customer and consumer consumer approval. complaints. Packaging defects and complaints are investigated 42 43 thoroughly and used to eliminate future problems. Tafel Lager continues to reap benefits from a hugely successful and emotive National Pride campaign – an advertising idea that We focus on quality through our quality management system, which has outstripped expectations in distributing the brand energy to aims to ensure, among other things, that our people are properly customers and consumers alike, and which has resulted in the brand trained, their responsibilities as regards vouchsafing quality are recording a double-digit volume growth. As the biggest mainstream clear, quality is monitored, and targets are set for improvement. Our brand in Namibia, Tafel Lager commits to accessibility in all channels brands are enjoyed across the globe. We currently export worldwide and in formats that are suitable for all drinking occasions. To keep to countries like Australia, Germany and the United Kingdom, as the brand relevant and in line with the international consumer well as to countries on the African continent, including Angola, trends, Tafel Lager extended its offering into a 440-ml can which Botswana, Cameroon, Kenya, Mozambique, Uganda and Zimbabwe. was launched to market in April 2012. Tafel Lager adorers now have their favourite brand in yet another affordable and convenient pack. OUR BRANDS IN PERSPECTIVE February 2013 will go down in the chronicles of history as the month Faced with affordability challenges in its key export markets, NBL that saw the first beer brewed with our locally grown barley. The launched a fully recyclable one-way keg solution which was aimed at barley was malted in Germany and shipped back to Namibia for profitably accessing the Botswana draught-on-tap market. This one- brewing. The limited edition Independence Lager was produced in way, non-returnable keg was launched in Botswana in September celebration of this important milestone in the history of NBL and 2012 with an initial installation of 40 units in selected outlets. This Namibia as a country. This special Independence Lager presented innovation allowed consumers to experience the highest quality to various stakeholders, including shareholders; government offices, Windhoek Draught on tap at an affordable price. ministries and agencies; our customers; and captains of various industries with whom we could share our story and the importance After extensive research, NBL launched a new and compelling of growing barley in Namibia. communication platform for Windhoek Lager and Windhoek Draught on the African digital satellite television service provider This special brew was received and savoured with immense pride DSTV. The Made of the Right Stuff campaign is deeply rooted in the amongst the selected recipients who shared gratifying feedback on Windhoek trademark values of authenticity and character. Although the high quality and exceptional taste of the beer that had been the campaign was only launched at the end of 2012, it has already brewed using locally grown barley. The nod of approval from these resulted in a significant increase in theWindhoek trademark brand’s esteemed recipients was a critical watershed in the phase of this equity, and is expected to further cement Windhoek’s positioning in project and its benefits – not only to NBL, but also to the economic the premium beer segment. independence of the Land of the Brave by bolstering the critical agricultural sector of our county. In summary, we have highlighted a number of projects which shows that being part of the O&L Group, NBL is committed to its As a consumer-centric organisation, NBL continues to create purpose of Creating a Future, Enhancing Life, and will continue to amazing experiences with its innovations. The success of Vigo innovate, collaborate and invest in preserving Namibia’s beautiful is a clear demonstration of the importance of being one with the environment for generations to come. Water Treatment Plant Remuneration Report... Remuneration Report...
- give full consideration to succession planning in the course of its Remuneration components work, taking into account the challenges and opportunities Base salary facing the company and, therefore, what skills and expertise are The fixed element of remuneration is referred to as base salary. Its needed on the Board in the future purpose is to provide a competitive level of remuneration for each REMUNERATION - keep under review the structure, size and composition (including grade of manager. The base salary is subject to annual review. It is the skills, knowledge and experience) of the Board, and make set to be competitive at the median level, with reference to market recommendations to the Board with regard to any changes, practice in companies that are comparable in terms of size, market REPORT subject to the provisions of the company’s Articles of Association sector, business complexity and international scope. and the Companies Act, 2004 (No. 28 of 2004) - consider and, if appropriate, make recommendations to the Base salaries are reviewed annually and adjusted as necessary Board regarding: at the beginning of the financial year, taking into account external - the tenure of Non-executive Directors on the Board, and market trends, and business and personal performance. - the reappointment of any Non-executive Director at the 44 45 THE REMUNERATION AND NOMINATIONS COMMITTEE - To ensure that there is a formal, transparent and objective method conclusion of his or her specified term of office Benefits The Remuneration and Nominations Committee is a formal NBL to recommend to shareholders regarding Director remuneration - approve and, if in the interest of the company, ensure that all Benefits provide security for employees and their families and Board Sub-committee. This report and its recommendations were packages, including pension benefits employment agreements between the company and the include membership of a retirement fund and a medical aid scheme approved by the NBL Board. During the year under review, no - To ensure that the fees paid to Non-executive Directors are a fair Directors are limited to three- or five-year periods, if applicable, to which contributions are made. The retirement fund is a defined Remuneration and Nominations Committee meeting was held. reflection of the contribution they make to the company provided such agreements are renewable, and contribution fund. - To advise on, and monitor, a suitable performance-related - action any other duties or responsibilities expressly delegated to Composition of the Committee formula, inclusive of the Board criteria on which performance- the Committee by the Board. Short-term incentive For the year ended 30 June 2013, the following Non-executive related elements are based with regard to the trading period, if Executive Directors and the rest of the senior leadership team participate Directors were members of the Committee: applicable, and Review of the company’s remuneration policy in an annual short-term incentive (STI) scheme. The STI is a cash bonus • Mr Nick Blazquez (Chairman) - To separate the review and recommendation of Non-executive NBL has a remuneration policy that applies to its Executives. plan designed to support the overall remuneration policy by – • Mr Sjibe Hiemstra (appointed 31 August 2012), and fees from the review and recommendation of Executive This policy is geared specifically to supporting its business goals • focusing participants on achieving financial year performance • Mr Peter Grüttemeyer. remuneration, each with its own motivation and basis for the by enabling it to attract, acquire, retain and appropriately reward goals which contribute to sustainable shareholder value, and recommendation. executives of the calibre necessary to deliver the required high • providing significant bonus differential based on performance The Managing Director and the Manager for Human Capital are levels of performance. The policy is reviewed periodically to take against predetermined company financial targets, as well as also invited to meetings in an advisory capacity, except when their Nominations account of changing circumstances in the market, the industry and strategic and divisional or personal performance objectives. own remuneration is discussed. From time to time, independent - To ensure a formal and transparent process for the appointment the economy. The main principles of the company’s remuneration remuneration consultancies are instructed to provide advice on of new Directors to the Board. In fulfilling this function, the policy for Executives are to: Executive Directors and senior leadership members may earn a executive remuneration matters to the Committee. The Commitee’s Committee is required to: • provide total remuneration which is competitive in structure and bonus of up to 41.67% of their total annual package. The senior responsibilities are set out in its Terms of Reference, as approved - assess the necessary and desirable competencies of prospective quantum with comparative companies’ practices within the leadership team’s functional targets are based on their respective by the Board. Board members based on merit and objective criteria. In Southern African Development Community (SADC) Region critical success factors, and include both financial and non-financial doing so, candidates from a wide range of backgrounds are to • achieve clear alignment between total remuneration on the one targets. Financial targets comprise 50% of the STI bonus potential, Remuneration be considered, in keeping with the dynamics and diversity of the hand, and delivered business and personal performance on the other while strategic and divisional/personal targets, including leadership - To monitor the Company’s remuneration policy, including country • link variable elements of remuneration to the achievement of competency assessments, make up the remaining 50%. policies relating to: - review Board nominations from shareholders and to provide challenging performance criteria that are consistent with the - parameters used in determining senior leadership remuneration recommendations to the Board in respect of such nominations best interest of the company The Remuneration Committee reviews the performance of Executive scales - ensure that, on appointment to the Board, Non-executive • provide an appropriate balance of fixed and variable Directors and the senior leadership team every year. The Committee - executive remuneration, including remuneration packages for Directors receive a formal letter of appointment setting out remuneration, and also approves individual performance against relevant targets and Senior Management clearly what is expected of them in terms of their time • provide internal equity among executives and facilitate the objectives once a year. - the structure of the remuneration of Executive Directors, Non- commitment, Committee service (if any), and involvement movement of executives within the O&L Group. executive Directors, the Chairperson and, where applicable, outside Board meetings Long-term incentive Board Committee members - define and implement procedures for the annual statement of Directors’ emoluments NBL did not have a long-term incentive plan in place for the - the design of executive incentives, inclusive of the Board criteria disclosure of any conflict of interest and the annual statement of The Director’s emoluments are disclosed in Annexure D of the year under review. The Board of Directors resolved to defer the on which performance-related elements are based with regard compliance Annual Financial Statements. implementation of such a plan until further notice. to the trading period, if applicable, and - senior employee recruitment, retention and termination Corporate Governance... Corporate Governance...
Board Board, but made themselves available to be re-elected for the next During the year, three Board meetings were held. Attendance was term. All Directors were re-elected by majority vote. as follows: CORPORATE Audit Committee The Audit Committee oversees the internal control and policy 4 SEPTEMBER 27 NOVEMBER 26 MARCH Board members 2012 2012 2013 function. The Committee is chaired by Mr HB Gerdes, a Non- executive Director. Mr P Grüttemeyer (O&L’s Chief Executive GOVERNANCE S Thieme (Chairman) • • • Officer), Mr M Kromat (Brandhouse) and Mr DFM Leleu (Heineken) N Blazquez • • ° are also Non-executive Directors who serve on the Audit Committee. E Ender • • • Hb Gerdes • • The External and Internal auditors, the Finance Director, and the ° Managing Director attend Audit Committee meetings by invitation. P Grüttemeyer • • • The Committee invites other members of Management as required. 46 S Heimstra • 47 The NBL Board is committed to the highest standards of corporate The Board currently consists of 2 Executive Directors and 13 Non- ° ° governance. This report outlines the way the Directors control and executive Directors. There were no resignations or appointments B Kidner • • • Audit Committee meeting attendance is detailed in the table below: govern the company. during the year under review. Resignations and appointments M Kromat ° ° ° subsequent to reporting date are disclosed in the report of the Dfm Leleu • 2 AUGUST 5 NOVEM- ° ° members 6 MARCH 2013 THE BOARD OF DIRECTORS Directors. Cl List • • • 2012 BER 2012 Compliance G Mahinda • • Hb Gerdes (Chairman) • • • NBL is subject to all applicable Namibian legislation as well as the The NBL Board of Directors’ governance philosophy entails ° P Grüttemeyer • • • listing requirements of the Namibian Stock Exchange (NSX). The separating the Chairman’s and Managing Director’s responsibilities B Masche ° • • NSX requires NBL to comply with the King II recommendations. separate, as recommended by King III. Lv Mcleod Katjirua ° • • M Kromat • • • NBL is already committed to follow the latest principles of the King L Van Den Borght ° ° ° Dfm Leleu # # # III recommendations, as relevant in Namibia. New Directors are guided through a tailored induction programme H Van Der Westhuizen • • • that offers them a thorough understanding of the NBL’s operations, • present # appointed at the Board meeting held on 26 March 2013 The Remuneration Committee absorbs the function of the listing requirements, codes of conduct and other applicable codes, ° apology • present recommended Nominations committee. The Remuneration and as well as a brief on their duties. The Board believes that it holds an The Audit Committee is responsible for reviewing financial Nominations committee has the duty to ensure that succession appropriate balance of skills, collective experience, knowledge and The Board has the responsibility of reviewing and evaluating the information and shareholder reporting, including: planning is implemented and monitored regularly. The Committee also skills to be dynamic and effective. company’s strategic goals, agreeing on performance indicators, and • monitoring the integrity of financial statements and making has to verify that Directors are appointed based on the experience, identifying key risks. The senior leadership team is charged with recommendations to the Board knowledge and skills they bring and which will benefit NBL. Committees implementing the company’s strategies and objectives. The senior • ensuring integrated reporting takes place The Board of Directors discharges its responsibility through Board leadership team is also responsible for ensuring that internal controls • reviewing and approving the external audit plan and proposed King III recommends that the majority of directors be independent. meetings, a Remuneration and Nominations Committee, an Audit are in place and functioning in order for the company to operate fees In this regard, the NBL Board continues to depart from King Committee, and a Risk Committee. Each such Committee has a and to mitigate risk. The Board of Directors holds Management • reviewing and monitoring the internal audit plan III recommendations in respect of the number of independent charter which governs its authority. The Audit and Risk Committees accountable for their activities, which are monitored and controlled • monitoring the effectiveness of the risk management process, Directors serving on NBL’s statutory committees. NBL Directors meet at least three times a year, the Remuneration and Nominations through regular reports and performance measurements. including fraud and corruption, information-technology-related continue to be appointed based on their experience, competency, Committee meets whenever necessary, and the Board meets items, and compliance with risk standards adopted by the Group leadership stills and strong business ethics, and it is these attributes quarterly. Procedures are in place to ensure all Directors are obliged to • monitoring the effectiveness of the Group’s system of internal that are regarded as the main criteria for appointment. declare any potential conflict of interest before any Board or any controls other Committee meeting. Directors are required to avoid any direct • reviewing the Group’s policies and practices concerning business or indirect interest that conflicts or may conflict with the company’s conduct and ethics, including whistle-blowing reports received interest. via the Tip-offs Anonymous hotine, and • reviewing internal and external audit reports and monitoring that Mr Sven Thieme was re-elected as the Chairman of the Board at the corrective actions are performed. Annual General Meeting. Mr Hendrik van der Westhuizen and Mr Bruce Kidner were the two Executive Directors serving on the Board of Directors up to 30 June 2013. At the Annual General Meeting (AGM) held on 5 December 2012, four Directors retired from the Corporate Governance... Corporate Governance...
Risk Committee Significant findings were reported and resolved. All findings and If an employee is not comfortable with airing his or her views at All Directors may seek independent advice at the company’s The Risk Committee reports to the Audit Committee. The Risk recommendations are recorded on a tracker and closely monitored these forums, they can contact the Tip-offs Anonymous hotline. The expense under appropriate circumstances in the discharge of their Committee consists of Executive Directors Mr H Van der Westhuizen by Management. The Compliance function is responsible for hotline is administrated by an independent service provider, namely responsibilities. The Company Secretary is responsible for verifying and Mr B Kidner, as well as key senior leaders from NBL. The O&L ensuring that corrective actions are taken and recommendations Deloitte. This is supported by communication of our core value We that all Committees comply with statutory, regulatory and NSX Group Risk Manager also serves on this Committee. implemented. do the right things right. listing requirements. The Compliance function is responsible for submitting compliance certificates to the NSX each year. Directors The Committee regularly evaluates the company’s exposure and Ernst & Young also performs follow-up audits and reports have access to the Company Secretary at all times. responses to significant business, operational, strategic and financial independently to the Audit Committee and to Management as risks. The Directors are ultimately responsible for the company’s regards their own findings and the recommendations based thereon. risk management system. The system is designed to manage risk rather than to eliminate it. On a monthly basis, risks are identified, Both the internal and external auditors have unlimited access to the assessed and discussed within the different business functions. Chairperson of the Audit Committee. These risks are closely managed, monitored and mitigated. The top 48 49 key risks are reported with their respective mitigation plans at each There is a strong drive within NBL to uphold the highest technical Board meeting as well as at Audit Committee meetings. and operational standards. Fire and safety policies and procedures are reviewed and tested on a regular basis so that they continue to Two Risk Committee meetings were held during the year under be compliant with the highest standards. On a regular basis, there review. The minutes of this Committee are made available to and are also internal health and safety audits, which are performed by discussed at Audit Committee meetings as well. Managers within the different functions. Each Manager within his/ her function is evaluated constantly on the health and safety ratings Internal controls achieved during these audits. By strictly following this programme, NBL has a robust controls review process in place. Testing whether NBL has managed to improve its health and safety standards not the business complies with internal control procedures and policies only for staff, but also with respect to contractors, suppliers and is achieved by continuous management reviews, a review of internal other providers of services to NBL. financial controls, and a review of external parties providing internal audits. For the last three years, an annual insurance audit has been performed by Alexander Forbes Insurers. The main plant is audited Experienced and qualified employees are appointed as control on an annual basis, while depots are audited on a rotational basis. champions throughout the business functions in order to review and This year, the Keetmanshoop and Ruhr Street depots were audited. evaluate financial as well as technical controls. Any deficiencies are NBL is proud to have maintained its five-star rating – being the recorded, monitored regularly, and reported to the senior leadership highest possible rating that can be awarded. team. This has proven to be a very successful approach to critically evaluate and improve internal control policies and procedures. Stakeholder communications, ethics and the Tip-offs Anonymous hotline The internal audit function was outsourced to the auditing firm NBL engages with its stakeholders on a regular basis, and its interim Ernst & Young. The internal audit programme is founded on a three- and final results are announced at analyst presentations. These year risk-based approach. The internal audit plan is reviewed on a results are also available on the NBL website and are published in regular basis by the NBL Compliance function. local newspapers.
During the reporting year, the following internal audits were The Audit Committee is responsible for embedding a culture of performed: high ethical standards. Employees have several means available to • Information technology general controls them to raise their concerns and make recommendations or obtain • Fixed asset accounting and management feedback from the senior leadership teams. NBL holds a workplace • Warehouse and distribution management forum within the different functions on a weekly or bi-weekly basis. • Fraud risk assessment, and At these forums, our staff have the opportunity to discuss matters • Continuous control monitoring. of concern to them.
Brewhouse Group Salient Features.. Group Value Added Statement...
GROUP SALIENT FEATURES GROUP VALUE ADDED STATEMENT
30 June 2013 30 June 2012 % 30 June 2013 30 June 2012 N$ 000’s N$ 000’s Change Notes N$ 000’s N$ 000’s
Revenue 2 383 384 2 160 067 10.3 WEALTH CREATED Revenue 2 383 384 2 160 067 Paid to suppliers for materials and services (1 612 658) (1 515 903) Profit attributable to ordinary shareholders 72 945 221 954 (67.1)
VALUE ADDED 770 726 644 164 Earnings per share (cents) 35.3 107.5 (67.1) Income from investments 20 392 22 346
Headline earnings per ordinary share (cents) (Restated) 177.8 149.5 18.9 TOTAL WEALTH CREATED 791 118 666 510 50 51
Dividends declared per ordinary share (cents) 58.0 52.0 11.5 WEALTH DISTRIBUTION Salaries, wages and other employment costs 1 251 202 224 703 Providers of capital Net asset value per ordinary share (cents) 416.6 439.3 (5.2) Dividends to shareholders 119 787 106 345 Finance costs on borrowings 23 648 23 233 Return on ordinary shareholders' funds (%) 8.3 26.1 (68.2) Central and local governments 2 104 699 97 206 Reinvested in Group to maintain and develop operations Amortisation 4 174 1 624 Depreciation 94 028 80 252 Retained earnings (46 842) 115 609 Deferred taxation 25 830 17 538
TOTAL WEALTH DISTRIBUTED 576 526 666 510
NOTES TO THE VALUE ADDED STATEMENT 1. Salaries, wages and other employment costs Salaries, wages, overtime payments, commissions, bonuses and allowances 203 701 190 207 Total contributions to medical aid and pension fund 47 501 34 496 251 202 224 703 2. Central and local governments Normal corporate taxation 103 884 96 489 Rates and taxes paid on properties 815 717 104 699 97 206 3. Additional amounts collected on behalf of central and local governments Customs and excise duties including import surcharges 647 262 555 635 Value added tax collected on revenue 276 373 228 126 PAYE deducted from remuneration paid 42 908 40 596 Witholding taxes 3 340 2 182 969 883 826 539
Number of employees 748 725 Five-Year Summary of Results.. Summary of Statistics...
FIVE-YEAR SUMMARY OF RESULTS SUMMARY OF STATISTICS
N$ 000’s 30 June 2013 30 June 2012 30 June 2011 30 June 2010 30 June 2009 30 June 2013 30 June 2012 30 June 2011 30 June 2010 30 June 2009
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ORDINARY SHARE PERFORMANCE Property, plant and equipment 827 683 799 762 668 574 474 126 431 705 Weighted average number of shares in issue (000's) 206 529 206 529 206 529 206 529 206 529 Investment in joint venture 13 635 118 071 121 359 116 106 14 491 Earnings per ordinary share (cents) 35.3 107.5 102.3 77.4 76.7 Other non-current assets 12 258 6 450 17 479 15 630 13 535 Headline earnings per ordinary share (cents) (Restated) 177.8 149.5 139.8 115.3 93.6 Current assets 860 598 748 238 599 310 566 531 598 395 Dividends paid per ordinary share (cents) 58.0 51.5 47.0 44.1 39.2 Dividend cover (times) 0.6 2.1 2.2 1.8 2.0 Total Assets 1 714 174 1 672 521 1 406 722 1 172 393 1 058 126 Net asset value per ordinary share (cents) 416.6 439.3 383.3 328.1 294.8
Issued capital 1 024 1 024 1 024 1 024 1 024 52 PROFITABILITY AND ASSET MANAGEMENT 53 Retained income 859 447 906 289 790 680 676 510 607 758 Operating margin (%) 21.0 19.9 20.9 17.5 16.4 Ordinary shareholders' equity 860 471 907 313 791 704 677 534 608 782 Return on total assets (%) 32.0 31.8 33.9 30.6 27.8 Interest-bearing loans and borrowings (non-current) 9 231 265 693 185 268 5 444 4 469 Return on ordinary shareholders' funds (%) 8.3 26.1 28.8 24.8 27.8 Other non-current liabilities 171 702 143 458 124 825 119 428 125 128 Current liabilities 672 770 356 057 304 925 369 987 319 747 LIQUIDITY AND LEVERAGE Total equity and liabilities 1 714 174 1 672 521 1 406 722 1 172 393 1 058 126 Total liabilities to total shareholders' funds (%) 81.5 70.3 63.9 57.5 55.4 Financial gearing ratio (%) 32.0 29.8 23.9 23.5 1.2 Interest cover 22.0 19.4 27.8 26.6 78.4 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Current ratio 1.3 2.1 2.0 1.5 1.9 Turnover 2 383 384 2 160 067 1 797 071 1 731 058 1 566 545 Operating expenses (1 883 295) (1 731 052) (1 421 757) (1 428 092) (1 309 903) Operating profit 500 089 429 015 375 314 302 966 256 642 Note: During the prior year the equity accounted loss of the joint venture (N$92 147 000) was inadvertently omitted from the Headline earnings per Finance costs ( 23 648) (23 233) (14 281) (12 075) (3 425) share calculation. This resulted in Headline earnings per share being disclosed as 104.9 cents instead of 149.5 cents as shown above. Headline Finance income 20 392 22 346 21 155 18 340 11 729 earnings for previous periods as shown above have been adjusted accordingly. The error does not have any other impact on the financial statements. Equity loss from joint venture (on-going operations) (109 002) (92 147) (74 867) (78 372) (35 630) DEFINITIONS Equity loss from joint venture (deferred tax asset write down) (188 089) 0 0 0 0 Dividend cover: Profit attributable to ordinary shareholders divided by dividends paid in the year. Profit before income tax 199 742 335 981 307 321 230 859 229 316 Net asset value per share: Ordinary shareholders' equity divided by the total number of ordinary shares in issue. Income tax expense (126 797) (114 027) (96 034) (71 061) (70 918) Operating margin: Operating profit expressed as a percentage of revenue. Total assets: Property, plant and equipment, current and non-current assets. Profit attributable to ordinary shareholders 72 945 221 954 211 287 159 798 158 398 Return on total assets: Operating profit plus finance income expressed as a percentage of average total assets (excluding investment in joint venture). Return on ordinary shareholders' funds: Profit attributable to ordinary shareholders expressed as a percentage of average ordinary shareholders' CONSOLIDATED STATEMENTS OF CASH FLOWS equity. Cash generated by operations 706 776 363 084 401 347 383 107 240 135 Total liabilities: Interest-bearing loans and borrowings other current and non-current liabilities. Deferred taxation and income is excluded. Dividends paid (119 787) (106 345) (97 117) (91 046) (80 931) Financial gearing ratio (%): Interest-bearing loans and borrowings expressed as a percentage of ordinary shareholders' equity. Taxation paid (105 696) (109 442) (81 061) (73 704) (51 917) Interest cover: Operating profit plus finance income divided by finance costs. Current ratio: Current assets divided by current liabilities. Net cash flow from operating activities 481 293 147 297 223 169 218 357 107 287 Net cash flow applied to investing activities (287 402) (204 537) (324 626) (247 546) (174 298) Net cash flow from financing activities (17 989) 57 488 16 085 139 498 (19 279)
Net (decrease) / increase in cash and cash equivalents 175 902 248 (85 372) 110 309 (86 290) Ordinary Share of Ownership..
ORDINARY SHARE OF OWNERSHIP
Number of Number of Shareholders % Shares %
HOLDINGS 1 - 99 16 1.21 771 0.00 100 - 499 381 28.86 88 720 0.04 500 - 999 215 16.29 129 591 0.06 1 000 - 1 999 299 22.65 350 474 0.17 2 000 - 2 999 146 11.06 321 736 0.16 3 000 - 3 999 25 1.89 83 587 0.04 4 000 - 4 999 21 1.59 88 356 0.04 5 000 - 9 999 101 7.6 5 610 525 0.30 54 55 10 000 shares and above 116 8.80 204 855 240 99.19 1 320 100.00 206 529 000 100.00 CATEGORY Corporate bodies 30 2.27 122 830 975 59.47 Nominee companies 27 2.05 74 761 610 36.20 Private individuals 1 242 94.09 7 518 803 3.64 Trusts 21 1.59 1 417 612 0.69 1 320 100.00 206 529 000 100.00 SHAREHOLDER SPREAD
The spread of shares held by non-public and public shareholders was as follows: at 30 June at 30 June 2013 2012 % % Non - public shareholders - holding company 52.6 52.6 - directors and their associates and trustees of the Company's share purchase trust 0.2 0.2 Public shareholders 47.2 47.2 100.0 100.0
MAJOR INDIVIDUAL HOLDINGS With the exception of nominee holdings, the holding company and Diageo Heineken BV, the register of members does not reflect individual beneficial shareholdings at 30 June 2013 in excess of 1% of the total issued capital of the Company. Financial Review... Approval of Financial Statements...
APPROVAL OF FINANCIAL FINANCIAL REVIEW STATEMENTS
ACCOUNTING POLICIES Directors’ responsibility statement The Company’s directors are responsible for the preparation and fair Approval of consolidated and separate financial statements Revenue presentation of the consolidated and separate financial statements, The consolidated and separate financial statements of the Company, Consolidated revenue increased by 10% to N$2,383.4 million from South Africa comprising the statements of financial position at 30 June 2013, as indicated above, were approved by the board of directors on 17 N$2,160.1 million for the year ended 30 June 2013. The increase in The operating loss attributable to DHN Drinks (Pty) Ltd increased and the statements of comprehensive income, the statements of September 2013 and signed on their behalf by: revenue is primarily driven by performance in our home market and compared to the prior year, however taking into account royalties and changes in equity and cash flow statements for the year then ended, increased volumes produced and supplied to DHN our South African production margins that NBL receives for contract packing for South and the notes to the financial statements, which include a summary S Thieme Joint Venture. Africa, NBL continued to make positive returns from the ongoing of significant accounting policies and other explanatory notes, in Chairman operations of our South African business. Total volumes produced by accordance with International Financial Reporting Standards and in 56 57 Operating profit NBL and sold to DHN Drinks (Pty) Ltd were up by 1% compared to the terms of the Namibian Companies Act. Hendrik van der Westhuizen The Group’s operating profit for the year ended 30 June 2013 showed prior year. Our South African joint venture continued to grow sales at Managing Director an increase of 17% over the previous year. This translates into an single digit levels despite the highly competitive environment. The directors’ responsibility includes: designing, implementing and operating margin of 21.0% compared to 20.0% in the previous year. maintaining internal controls relevant to the preparation and fair The Group’s cost base has benefited from continuous focus on our Exports (excluding South Africa) presentation of these financial statements so that they are free from costs and our brewery investments. Export markets performance continued to deliver mixed performance, material misstatement, whether due to fraud or error; selecting and with increased competition particularly in the SADC countries we applying appropriate accounting policies; and making accounting Taxation trade in. The business will focus on fewer key markets going forward. estimates that are reasonable in the circumstances. The taxation charge for the year ended 30 June 2013 was N$126.8 million compared to N$114.0 million for the previous year. In the Significant Matters The directors’ responsibility also includes maintaining adequate current year taxable profits from exports were a smaller percentage The Group has invested into DHN Drinks (Pty) Ltd during the year accounting records and an effective system of risk management. of total taxable income than in the prior year. The group benefits from an amount of N$293.3 million (2012: N$94.6 million). In addition, allowances on profits derived from exports. Accumulated tax losses the group further recognised a full write-down of the deferred tax The directors have made an assessment of the Group and Company’s of the Group’s wholly owned South African subsidiary have not been asset in DHN Drinks (Pty) Ltd given that negotiations to amalgamate ability to continue as a going concern and there is no reason to believe recognised, due to uncertainty regarding the utilisation of the losses. DHN Drinks (Pty) Ltd and the Sedibeng Brewery operations had not the businesses will not be operating as going concerns in the year concluded by 30 June 2013. The Group has also continued to invest ahead. Profit after tax and earnings per share in plant and equipment in line with its expansion and replacement Profit Attributable to Shareholders decreased by 67% over the plans. The auditor is responsible for reporting on whether the group annual corresponding period, based on an effective tax rate of 63.5%. The financial statements and separate parent annual financial statements earnings per share for the year ended 30 June 2013 is 35.3 cents Cash flows are fairly presented in accordance with International Financial (2012: 107.5 cents). Net cash flow from operating activities increased from N$147.3 million Reporting Standards and the Companies Act. in the prior year to N$481.3 million in the current year. The increase Financial position was driven by an increase in volumes and greater efficiences achieved The net debt to equity ratio remains healthy at 1% and is still within within working capital. Net cash flow from investing activities prescribed borrowing capacity of the Group (see note 31). increased from a net outflow of N$204.5 million in the previous year to N$287.4 million in the current year, due to additional investment in Namibian Market DHN (Drinks) Pty Ltd. Net cash out flow from financing activities was Overall beer sales volumes in Namibia continued to grow at double due to the decrease in medium term loan facility (see Annexure A). digits delivering a 12% growth compared to the previous year. The Tafel brand continued to outperform the portfolio and was the main driver of the overall beer growth. Windhoek Draught continues to perform well and has also contributed to the overall growth in volumes. Our ready to drink range (RTD) sales have seen a slight decline whereas Vigo, the new-to-world malt soft drink range launched in 2012 has had a solid start and continues to outperform expectations. Independent Auditor’s Report... Report of the Directors...
INDEPENDENT REPORT OF THE AUDITOR’S REPORT DIRECTORS
To the members of Namibia Breweries Limited Opinion Founded in 1920, Namibia Breweries Limited is principally engaged Directorate and secretary We have audited the group annual financial statements of In our opinion, the financial statements present fairly, in all material in the brewing and distribution of beer and is also active in the The names of the directors as well as the name and address of the Namibia Breweries Limited, which comprise, the consolidated and respects, the consolidated and separate financial position of Namibia manufacturing and sale of soft drinks. Company’s secretary appear on page 8 and below. separate statements of financial position as at 30 June 2013, the Breweries Limited as at 30 June 2013 and of its consolidated and consolidated and separate statements of comprehensive income, separate financial performance and consolidated and separate Accounting policies Subsidiaries the consolidated and separate statements of changes in equity and cash flows for the year then ended in accordance with International The accounting policies of Namibia Breweries Limited comply with Details of the Company’s subsidiaries are set out in Annexure C of the consolidated and separate statements of cash flows for the year Financial Reporting Standards, and in the manner required by the International Financial Reporting Standards (IFRS) and are consistent this report. then ended, a summary of significant accounting policies and other Companies Act in Namibia. with those of the previous year. explanatory notes and the report of the directors as set out on pages Holding company 58 59 59 to 107. Financial results The Company’s holding company is NBL Investment Holdings Limited, The Group’s operating profit for the year ended 30 June 2013 showed of which the shareholding is held by Ohlthaver & List Finance and Directors’ Responsibility for the Financial Statements an increase of 17% over the previous year. This translates into an Trading Corporation Limited, Heineken International B.V. (“Heineken”) The company’s directors are responsible for the preparation and operating margin of 21%. and Diageo Plc (“Diageo”). The Company’s ultimate holding company fair presentation of these financial statements in accordance with Deloitte & Touche is List Trust Company (Proprietary) Limited. International Financial Reporting Standards, and in the manner Registered Accountants and Auditors Dividends paid required by the Companies Act in Namibia and for such internal Chartered Accountants (Namibia) Details of the ordinary dividends declared, paid and payable in respect Events subsequent to reporting date control as the directors determine is necessary to enable the of the past year are reflected in note 26 to the financial statements. The following resignations and appointments of directors took place preparation of financial statements that are free from material Per: J Cronjé subsequent to the reporting date but before the approval of the misstatement, whether due to fraud or error. Partner Dividend declaration financial statements: Windhoek In addition to the interim dividend paid in May 2013, the board of Auditor’s Responsibility 14 October 2013 directors has decided to declare a final dividend of 31 cents per ordinary Resignations: Bruce Anthony Kidner (Executive Director), Gerald Our responsibility is to express an opinion on these financial share resulting in a total dividend of 62 cents per ordinary share for Mahinda (Non-executive Director) and Bernd Masche (Non-executive statements based on our audit. We conducted our audit in Deloitte Building the year under review. Payment will be effected to the shareholders of Director). accordance with International Standards on Auditing. Those Maerua Mall Complex ordinary shares in the books of the company registered at the close of standards require that we comply with ethical requirements and PO Box 47 business on the 1st of November 2013 and will be paid on the 22nd Appointments: Graeme Mouton (Executive Director) and Jeff Milliken plan and perform the audit to obtain reasonable assurance about Jan Jonker Road of November 2013. (Non-executive Director). whether the financial statements are free of material misstatement. Windhoek An audit involves performing procedures to obtain audit evidence Namibia Capital expenditure Apart from the above non-adjusting events, the directors are not about the amounts and disclosures in the financial statements. The Capital expenditure for the year amounted to N$137.6 million (2012: aware of any other significant post balance sheet events to be procedures selected depend on the auditor’s judgement, including ICAN practice number: 9407 N$209.4 million). accounted for or disclosed in the annual financial statements which the assessment of the risks of material misstatement of the financial significantly affect the financial position of the Group and the results statements, whether due to fraud or error. In making those risk Regional Executives: LL Bam (Chief Executive), Issued capital of its operations. assessments, the auditor considers internal control relevant to the A Swiegers (Chief Operating Officer), GM Pinnock Full details of the authorised and issued capital of the Company at entity’s preparation and fair presentation of the financial statements 30 June 2013 are set out in note 13 to the financial statements. The in order to design audit procedures that are appropriate in the Resident Partners: VJ Mungunda (Managing Partner), 92 471 000 unissued shares of the Company are under the control circumstances, but not for the purpose of expressing an opinion RH McDonald, J Kock, H de Bruin, J Cronjé, of the Directors in terms of a members’ resolution dated 5 December on the effectiveness of the entity’s internal control. An audit also A Akayombokwa, E Tjipuka 2012. In terms of the Companies Act, this authority expires at the includes evaluating the appropriateness of accounting principles forthcoming Annual General Meeting, the members will accordingly used and reasonableness of accounting estimates made by the Director: G Brand be asked to extend this said authority until the Annual General Meeting directors, as well as evaluating the overall financial statements to be held on or around 4 December 2013. presentation. Member of Deloitte Touche Tohmatsu Limited
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Statements of Financial Position... Statements of Comprehensive Income...
STATEMENTS OF FINANCIAL POSITION STATEMENTS OF COMPREHENSIVE INCOME
Company GROUP Company GROUP for the year for the year for the year for the year at 30 June at 30 June at 30 June at 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's Notes N$ 000's N$ 000's N$ 000's N$ 000's Notes N$ 000's N$ 000's
ASSETS 2 159 729 2 383 058 Revenue 19 2 383 384 2 160 067 Non-current assets (1 726 729) (1 883 041) Operating expenses 20 (1 883 295) (1 731 052) 798 483 826 468 Property, plant and equipment 4 827 683 799 762 6 436 12 244 Intangible assets 5 12 244 6 436 433 000 500 017 Operating profit 21 500 089 429 015 828 828 Investment in subsidiaries 6 0 0 (27 942) (23 648) Finance costs 22 (23 648) (23 233) 405 352 13 635 Investment in a joint venture 7 13 635 118 071 22 797 20 361 Finance income 23 20 392 22 346 60 14 14 Available-for-sale investments 8 14 14 61 1 211 113 853 189 853 576 924 283 0 ( 584 372) Impairment of investment 7 0 0 Equity loss from joint venture (on-going operations) 7 (109 002) (92 147) Current assets 203 175 285 890 Inventories 9 285 890 203 175 0 0 Equity loss from joint venture (deferred tax asset write down) 7 (188 089) 0
452 625 306 127 Trade and other receivables, 10 306 907 453 093 427 855 (87 642) Profit before income tax 199 742 335 981 90 969 266 824 Cash and cash equivalents 11 267 801 91 899 71 0 Derivative financial instruments 18 0 71 (112 829) (126 670) Income tax expense 24 (126 797) (114 027) 746 840 858 841 860 598 748 238 315 026 (214 312) Profit for the year 72 945 221 954 1 957 953 1 712 030 Total assets 1 714 174 1 672 521 0 0 Other comprehensive income for the year 0 0 EQUITY AND LIABILITIES Total comprehensive income for the year attributable to Equity 315 026 (214 312) equity holders of the parent 72 945 221 954 1 024 1 024 Share capital 13 1 024 1 024 1 192 220 858 121 Retained earnings 859 447 906 289 Basic earnings per ordinary share (cents) 25.1 35.3 107.5 1 193 244 859 145 Ordinary shareholders' equity 860 471 907 313
Non-current liabilities 265 693 9 231 Interest bearing loans and borrowings 14 9 231 265 693 16 531 18 945 Post employment medical aid and severence pay benefit plan 15 18 945 16 531 126 752 152 549 Deferred taxation liability 16 152 757 126 927 408 976 180 725 180 933 409 151
Current liabilities 4 594 266 633 Interest bearing loans and borrowings 14 266 211 4 469 346 351 405 090 Trade and other payables 17 406 122 346 801 0 378 Derivative financial instruments 18 378 0 4 788 59 Income tax payable 59 4 787 355 733 672 160 672 770 356 057 1 957 953 1 712 030 Total equity and liabilities 1 714 174 1 672 521 Statements of Cash Flows... Statements of Changes in Equity...
STATEMENTS OF CASH FLOWS STATEMENTS OF CHANGES IN EQUITY
Company GROUP for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June Issued Retained 2012 2013 2013 2012 Capital Earnings Total
N$ 000's N$ 000's Notes N$ 000's N$ 000's Notes N$ 000's N$ 000's N$ 000's
Cash flow from operating activities GROUP 2 038 251 2 517 056 Cash receipts from customers 2 517 070 2 038 883 Balance at 30 June 2011 1 024 790 680 791 704 (1 669 414) (1 810 265) Cash paid to suppliers and employees (1 810 294) (1 675 799) Profit for the year 0 221 954 221 954 368 837 706 791 Cash generated by operations 27.1 706 776 363 084 Other comprehensive income for the year 0 0 0 Total comprehensive income for the year attributable to equity holders of the parent 0 221 954 221 954 (106 345) (119 787) Dividends paid 27.2 (119 787) (106 345) Dividends to equity holders 27.2 0 (106 345) (106 345) 62 (91 474) (105 602) Income tax paid 27.3 (105 696) (109 442) 63 171 018 481 402 Net cash flows from operating activities 481 293 147 297 Balance at 30 June 2012 1 024 906 289 907 313
Cash flow from investing activities Profit for the year 0 72 945 72 945 47 416 32 861 Finance income 32 892 46 965 Other comprehensive income for the year 0 0 0 (94 568) (293 260) Purchase of shares in joint venture (293 260) (94 568) Total comprehensive income for the year attributable to equity holders of the parent 0 72 945 72 945 5 709 100 605 Loans repaid by joint venture 100 605 5 709 Dividends to equity holders 27.2 0 (119 787) (119 787) 125 0 Loans advanced by subsidiaries 0 0 12 899 0 Loans repaid by Share purchase trust 0 12 899 Balance at 30 June 2013 1 024 859 447 860 471 1 540 0 Loans repaid by subsidiaries 0 0 (68 834) (62 721) Expansion of property, plant and equipment (62 721) (68 834) (106 879) (74 919) Replacement of property, plant and equipment (74 919) (106 879) COMPANY 1 024 983 539 984 563 (3 494) (2 050) Acquisition of intangible assets (2 050) (3 494) Balance at 30 June 2011 3 665 12 051 Proceeds on sale of assets 12 051 3 665 Profit for the year 0 315 026 315 026 (202 421) (287 433) Net cash flows from investing activities (287 402) (204 537) Other comprehensive income for the year 0 0 0 0 315 026 315 026 Cash flow from financing activities Total comprehensive income for the year attributable to equity holders of the parent Dividends to equity holders 27.2 0 (106 345) (106 345) (27 942) (23 648) Finance costs (23 648) (23 233) (6 724) (7 406) Repayment of interest bearing loans and borrowings (7 281) (6 724) Balance at 30 June 2012 1 024 1192 220 1193 244 87 445 12 940 Proceeds from medium term financing 12 940 87 445 30 507 0 Decrease in Subordinated loan 0 0 Profit for the year 0 (214 312) (214 312) 83 286 (18 114) Net cash flows from financing activities (17 989) 57 488 Other comprehensive income for the year 0 0 0 Total comprehensive income for the year attributable to equity holders of the parent 0 (214 312) (214 312) 51 883 175 855 Net change in cash and cash equivalents 175 902 248 Dividends to equity holders 27.2 0 (119 787) (119 787) 39 086 90 969 Cash and cash equivalents at beginning of the year 91 899 91 651 Balance at 30 June 2013 1 024 858 121 859 145 90 969 266 824 Cash and cash equivalents at end of the year 11 267 801 91 899 Notes to the Annual Financial Statements...
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1. Reporting entity In particular, information about significant areas of estimation 2. Basis of preparation (continued) The Group’s interest in jointly controlled entities are accounted for Namibia Breweries Limited (the “Company”) is a company domiciled uncertainty and critical judgements in applying accounting policies Recoverability of investment in Jointly controlled entity using the equity method of accounting. Under the equity method, in Namibia. The consolidated financial statements of the Company as that have the most significant effect on the amounts recognised in the The Company’s investment in the jointly controlled entity is carried at the interest in a jointly controlled operation is carried in the statement at and for the year ended 30 June 2013 comprise the Company and financial statements is included below: cost less impairment. In prior years the recoverability of the investment of financial position at cost plus post acquisition changes in the its subsidiaries and the Group’s interest in Joint Ventures (together was determined using discounted cash flow valuation model Group’s net share of the assets. The statement of comprehensive referred to as the “Group” and individually as “Group entities”). Deferred tax assets techniques. The inputs into this model were taken from externally income reflects the share of the results of the operations of the Deferred tax assets are recognised for all unused tax losses to the computed values and rates, where this was not possible, management jointly controlled entity. Profits and losses resulting from transactions 2. Basis of preparation extent that it is probable that taxable profit will be available against applied judgement in determining the inputs. Such inputs included, between the Group and the jointly controlled operation are eliminated (a) Statement of compliance which the losses can be utilised. Significant management judgement but were not limited to, anticipated future industry growth, portfolio to the extent of the interest in the jointly controlled entity. The Company and Group financial statements have been prepared in is required to determine the amount of deferred tax assets that can growth rates and internally computed discount rates which take into 64 65 accordance with International Financial Reporting Standards (IFRSs) be recognised, based upon the likely timing and level of future taxable account the Group’s weighted average cost of capital. In the current (iii) Transactions eliminated on consolidation and the requirements of the Namibian Companies Act. profits together with future tax planning strategies. The carrying year, the directors re-evaluated the value of the DHN investment and Intra-group balances and transactions and any unrealised income amount of recognised and unrecognised tax losses are disclosed in have considered this to approximate the company’s share of DHN’s and expenses arising from intra-group transactions, are eliminated in The financial statements were approved by the Board of Directors on note 16 and 24 and management’s judgement with regards to the net asset value at year end. Changes in the assumptions impacting preparing the consolidated financial statements. Unrealised gains from 17 September 2013. recoverability of deferred tax asset in its joint venture in note 7. expected future cash generation could affect the recoverability of the transactions with equity accounted investees are eliminated against valuation of the investment in the jointly controlled entity. the investment to the extent of the Group’s interest in the investee. (b) Basis of measurement Post employment benefits Unrealised losses are eliminated in the same way as unrealised gains, The Company and Group financial statements are prepared on the The cost of post employment medical benefits is determined The Directors have also considered the recoverability of the deferred but only to the extent there is no evidence of impairment. historical cost basis, modified for the fair value treatment of financial using actuarial valuations. The actuarial valuation involves making tax asset in DHN and, given that negotiations between joint venture instruments. assumptions about discount rates, medical inflation, expected return partners regarding a possible restructuring is not yet concluded, (b) Foreign currency on assets and mortality rates. Due to the long term nature of these have resolved to impair their full portion of the deferred tax asset. Transactions denominated in foreign currencies are initially recorded (c) Functional and presentation currency plans, such estimates are subject to significant uncertainty. Further Should circumstances change this judgement may also change with at the functional currency rate ruling at the transaction date. Monetary These financial statements are presented in Namibia Dollars (NAD), details are given in note 15. consequential positive impact to the financial statements. assets and liabilities denominated in foreign currencies are re-translated which is the Company’s and Group’s functional and presentation at the functional currency rate of exchange ruling at the reporting date. currency. Each entity in the Group determines its own functional Severance benefit obligations See note 7 for further details on these key assumptions. All differences are taken to profit or loss. Non-monetary items that are currency and items included in the financial statements of each entity Severance pay has been provided for all employees. Actuarial valuations measured in terms of historical cost in a foreign currency are translated are measured using that functional currency. All information presented are based on assumptions which include employee turnover, mortality 3. Significant accounting policies using the exchange rate at the date of the transaction. in NAD has been rounded to the nearest thousand. rates, the discount rate, the inflation rate and rates of increases in The accounting policies set out below have been applied consistently compensation costs. Further details are given in note 15. to all periods presented in the Company’s and Group’s financial (c) Property, plant and equipment (d) Use of estimates and judgements statements. (i) Recognition and measurement The preparation of financial statements in conformity with IFRSs Property, plant, equipment and intangible assets Items of property, plant and equipment are measured at cost less requires management to make judgements, estimates and assumptions The Group and Company depreciates items of property, plant, (a) Basis of consolidation accumulated depreciation and accumulated impairment losses. Cost that affect the application of policies and reported amounts of assets equipment and intangible assets down to residual value over the (i) Subsidiaries includes expenditure that is directly attributable to the acquisition and liabilities, income and expenses. The estimates and associated useful life of the assets. Management makes and applies assumptions Subsidiaries are those entities over whose financial and operating of the asset. The cost of self-constructed assets includes the cost assumptions are based on historical experience and various other about the expected useful life and residual value of these assets in policies the Group has the power to exercise control, so as to obtain of material and direct labour and other costs directly attributable to factors that are believed to be reasonable under the circumstances, determining the annual depreciation charge. Further details are given benefits from their activities. In assessing control potential voting bringing the asset to a working condition for its intended use. the results of which form the basis of making the judgements about in the accounting policy note on depreciation. rights that presently are exercisable are taken into account. The carrying values of assets and liabilities that are not readily apparent financial statements of subsidiaries are included in the consolidated When parts of an item of property, plant and equipment have from other sources. Actual results may differ from these estimates. In particular management have assumed a depreciation rate of 20% financial statements from the date that control commences until the different useful lives, they are accounted for as separate items (major on returnable containers, this being management’s best estimate of date that control ceases. The financial statements of the subsidiaries components) of property, plant and equipment. Estimates and underlying assumptions are reviewed on an ongoing breakage rate and useful life. The majority of returnable containers are are prepared for the same reporting year as the parent company, basis. Revisions to accounting estimates are recognised in the with customers and the estimate of cost along with the corresponding using consistent accounting policies. Gains and losses on disposal of an item of property, plant and period in which the estimate is revised if the revision affects only that returnable deposit liability is based on management’s judgement of equipment are determined by comparing the proceeds from disposal period, or in the period of the revision and future periods if the revision average turnaround periods of between 5 and 6 weeks. Any change to Investment in subsidiaries are shown at cost in the Company’s with the carrying amount of property, plant and equipment and are affects both current and future periods. these assumptions could have a significant impact on both the asset financial statements. recognised in profit or loss. and corresponding liability.
(ii) Jointly controlled entities Notes to the Annual Financial Statements...
3. Significant accounting policies (continued) Expenditure on development activities, whereby research findings 3. Significant accounting policies (continued) (g) Impairment (c) Property, plant and equipment (continued) are applied to a plan or design for the production of new or substantially (e) Leased assets (i) Financial assets (ii) Subsequent costs improved products and processes, is capitalised if the product or The determination of whether an arrangement is, or contains a lease is A financial asset not carried at fair value through profit or loss, is Subsequent expenditure relating to an item of property, plant and process is technically feasible, costs can be reliably measured, future based on the substance of the arrangement and requires an assessment assessed at each reporting date to determine whether there is any equipment is capitalised when it is probable that future economic economic benefits are feasible and the Group or Company intends of whether the fulfilment of the arrangement is dependent on the use of objective evidence that it is impaired. A financial asset is considered benefits from the use of the asset will be increased and its cost can to and has sufficient resources to complete development and to use a specific asset or assets and the arrangement conveys a right to use to be impaired if objective evidence indicates that one or more events be reliably measured. All other subsequent expenditure is recognised or sell the asset. The expenditure capitalised includes the cost of the asset. have had a negative effect on the estimated future cash flows of as an expense in the period in which it is incurred. materials, direct labour and an appropriate proportion of overheads. the assets that can be estimated reliably. Other development expenditure is recognised in profit or loss as an Leases are classified as finance leases where substantially all the risks (iii) Depreciation expense as incurred. and rewards associated with ownership of an asset are transferred to An impairment loss in respect of a financial asset measured at 66 67 Depreciation is recognised in profit or loss on a straight-line basis the Group or Company. amortised cost is calculated as the difference between the carrying over the estimated useful lives of each of the items of property, plant Capitalised development expenditure is measured at cost less amount, and the present value of the estimated future cash flows and equipment. Leased assets are depreciated over the shorter of accumulated amortisation and impairment losses. Operating leases are those leases which do not fall within the scope of discounted at the asset’s original effective interest rate. An impairment the lease term and their useful life’s unless it is reasonably certain the above definition. Payments made under leases are recognised in loss in respect of an available-for-sale financial asset is calculated by that the Group and Company will obtain ownership by the end of the (ii) Other intangible assets profit or loss on a straight line basis over the term of the lease. reference to its fair value. lease term. Other intangible assets acquired by the Group or Company, which have finite useful lives, are measured at cost less accumulated (f) Inventories All impairment losses are recognised in profit or loss. Any cumulative The depreciation rates for the current and comparative periods are amortisation and impairment losses. Inventories are carried at the lower of cost and net realisable value. loss in respect of an available-for-sale financial asset recognised as follows: The cost of inventories comprises all costs of purchase, conversion previously in equity is transferred to profit or loss. 2013 2012 (iii) Subsequent expenditure and other costs incurred in bringing the inventories to their present Freehold buildings 2 - 12% 2 - 12% Subsequent development expenditure on capitalised intangible location and condition, and is determined as follows: An impairment loss is reversed if the reversal can be related objectively Leasehold land and buildings 4% 4% assets is capitalised only when it increases the future economic to an event occurring after the impairment loss was recognised. Plant and machinery 4 - 20% 4 - 20% benefit embodied in the specific assets to which it relates. All other Raw materials, merchandise and consumable stores: Impairment loss reversals are recognised in profit or loss except for Vehicles 20% 20% subsequent expenditure is expensed as incurred. • Purchase cost on the weighted average basis. impairment reversals of available-for-sale equity securities which are Furniture and equipment 10% 10% recognised in other comprehensive income. Returnable containers 20% 20% (iv) Amortisation Finished goods and work in progress: The useful lives of intangible assets are assessed to be either finite or • Cost of direct materials and labour and a proportion of (ii) Non-financial assets The asset’s residual values, useful lives and methods of depreciation are infinite. Intangible assets with finite lives are amortised on a straight manufacturing overheads based on normal operating capacity but The carrying amounts of the Company’s and the Group’s non-financial reviewed, and adjusted if appropriate, at each financial year-end. Land is line basis over the estimated useful economic life and assessed for excluding borrowing costs. assets, other than inventories and deferred tax assets, are reviewed not depreciated. The carrying values are reviewed for impairment when impairment whenever there is an indication that the intangible asset at each reporting date to determine whether there is any indication of events or changes in circumstances indicate that the carrying value may be impaired. Intangible assets with indefinite useful lives are Obsolete, redundant and slow moving inventories are identified on a impairment. If any such indication exists, then the asset’s recoverable may not be recoverable. tested for impairment annually and are not amortised. If the carrying regular basis and are written down to their estimated net realisable amount is estimated. amount exceeds the recoverable amount, an impairment loss will values. An item of property, plant and equipment is derecognised upon be recognised. Amortisation and impairment charges on intangible The recoverable amount of an asset or cash-generating unit is disposal or when no future economic benefits are expected from its assets are charged to profit or loss. If an intangible asset with an Net realisable value is the estimated selling price in the ordinary the greater of its value in use and its fair value less costs to sell. use or disposal. Any gain or loss arising on derecognition of the asset indefinite life has changed to a finite life the change is made course of the business, less estimated costs of completion and the In assessing value in use, the estimated future cash flows are is included in profit or loss in the year the asset is derecognised. on a prospective basis. estimated costs necessary to make the sale. discounted to their present value using a pre-tax discount rate that Depreciation is not provided on assets during the time of construction. reflects current market assessments of the time value of money and the risks specific to the asset. (d) Intangible assets (i) Research and development An impairment loss is recognised if the carrying amount of an asset Expenditure on research activities, undertaken with the prospect of or its cash-generating unit exceeds its estimated recoverable amount. gaining new scientific or technical knowledge and understanding, and Impairment losses are recognised in profit or loss. expenditure on internally generated goodwill and brands is recognised in profit or loss as an expense as incurred. Notes to the Annual Financial Statements...
3. Significant accounting policies (continued) (iii) Loans and receivables 3. Significant accounting policies (continued) (k) Finance income (g) Impairment (continued) Included in this category are the loans to the share purchase (h) Financial instruments (continued) Finance income comprises interest income on funds. Interest income (ii) Non-financial assets (continued) trust as well as to holding company and fellow subsidiaries. Loans (viii) Non-interest bearing financial liabilities is recognised in the year as it accrues in profit or loss, using the An impairment loss is reversed if there has been a change in the and receivables are non-derivative financial assets with fixed or Non-interest bearing financial liabilities are recognised at amortised effective interest method. estimates used to determine the recoverable amount. An impairment determinable payments that are not quoted in an active market. cost. loss is reversed only to the extent that the asset’s carrying amount does Such assets are carried at amortised cost using the effective (l) Finance costs not exceed the carrying amount that would have been determined, net of interest method. Amortised cost is computed as the amount initially (i) Provisions Finance costs comprise interest expense on borrowings. Borrowing depreciation or amortisation, if no impairment loss had been recognised. recognised minus principle repayments, plus or minus the cumulative Provisions are recognised when the Company or Group has a present costs are recognised in profit or loss using the effective interest amortisation using the effective interest method of any difference legal or constructive obligation, as a result of past events, for which method. Finance costs on qualifying assets are capitalised. (h) Financial instruments between the initially recognised amount and the maturity amount. it is probable that an outflow of economic benefits will be required 68 69 (i) Non-derivative financial instruments This calculation includes all fees and points paid or received between to settle the obligation, and a reliable estimate can be made for the (m) Income tax Non-derivative financial instruments comprise trade and other parties to the contract that are an integral part of the effective interest amount of the obligation. Provisions are determined by discounting Income tax expense comprises current and deferred tax. Income receivables, cash and cash equivalents, interest-bearing borrowings, rate, transaction costs and all other premiums and discounts. Gains the expected future cash flows at a pre-tax rate that reflects the tax expense is recognised in profit or loss except to the extent that trade and other payables. and losses are recognised in profit or loss when the loans and current market assessments of the time value of money and the risks it relates to items recognised directly in equity, in which case it is receivables are derecognised or impaired, as well as through the specific to the liability. recognised in other comprehensive income. Non-derivative financial instruments are recognised initially at fair amortisation process. value plus, for instruments not at fair value through profit and loss, A provision for restructuring is recognised when the Company and Current tax comprises tax payable calculated on the basis of the any directly attributable transaction costs. Subsequent to initial (iv) Trade and other receivables Group has approved a detailed and formal restructuring plan, and the expected taxable income for the year, using the tax rates and tax recognition, non-derivative financial instruments are measured as Trade receivables, which generally have 30-60 day terms, are restructuring has either commenced or has been announced publicly. laws enacted or substantively enacted at the reporting date and any described below. subsequent to initial recognition, recognised at amortised cost, less Future operating losses are not provided for. adjustment of tax payable for previous years. impairment losses. Accounting for finance income and costs is discussed in note 3(k) (j) Revenue Deferred tax is provided on temporary differences at the reporting and 3(l). (v) Cash and cash equivalents Revenue comprises royalty and rental income and the sales of beer, date between the tax bases of assets and liabilities and their carrying For the purpose of the statements of cash flows, cash and cash soft drinks and by-products, less indirect taxes, excise duty and amounts for financial reporting purposes. All regular way purchases and sales of financial assets are recognised equivalents comprise cash on hand, deposits held on call with discounts. on the trade date i.e. the date that the Company and Group commits banks, net of bank overdrafts, all of which are available for use by the Deferred tax is not recognised for the following temporary differences: to purchase the asset. Company and Group unless otherwise stated. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company or Group and the revenue • The initial recognition of an asset or liability in a transaction that (ii) Financial assets or liabilities at fair value through profit or (vi) Interest bearing loans and borrowings can be reliably measured. The following specific recognition criteria is not a business combination and, at the time of the transaction, loss Included in this category are long and medium term financing must also be met before revenue is recognised: affects neither the accounting profit not taxable profit or loss; and Included in this category are derivative financial instruments. Financial and short term borrowings. Non-derivative financial liabilities are • Investments in subsidiaries and jointly controlled entities to the assets or liabilities classified as at fair value through profit or loss, are recognised at amortised cost, using the effective interest method. (i) Sale of Goods extent that it is probable that the temporary differences will not subsequent to initial recognition, measured at fair value with changes Revenue is recognised when the significant risks and rewards of reverse in the foreseeable future; and in fair value recognised in profit or loss. Interest-bearing bank loans and overdrafts are recorded at the value ownership of the goods have passed to the buyer, recovery of the • Taxable temporary differences arising on the initial recognition of of proceeds received, net of direct issue costs. Finance charges are consideration is probable, the associated costs can be estimated goodwill. accounted for on an accrual basis and are added to the carrying reliably, there is no continuing management involvement with the amount of the instrument to the extent that they are not settled in the goods, and the amount of revenue can be measured reliably. The carrying amount of deferred tax assets are reviewed at each period in which they arise. reporting date to determine that sufficient taxable profit will be (ii) Rental income available to allow all or part of the deferred tax asset to be utilised. (vii) Derecognition of financial assets and liabilities Rental income is recognised on a straight-line basis over the term of Unrecognised deferred tax assets are reassessed at the reporting Financial assets - A financial asset is derecognised where the rights to the lease. date and are recognised to the extent that it has become probable that receive cash flows from the asset have expired. future taxable profit will allow the deferred tax asset to be recovered. (iii) Royalty income Financial liabilities - A financial liability is derecognised when the Royalty income is recognised on an accrual basis in accordance with Deferred tax assets and liabilities are measured at the tax rates that obligation under the liability is discharged or cancelled or expires. the substance of the relevant agreement. are expected to apply to the year when the asset is realised or the liability settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Notes to the Annual Financial Statements...
3. Significant accounting policies (continued) (ii) Retirement benefits 3. Significant accounting policies (continued) (r) New and amended IFRS and IFRIC interpretations adopted (m) Income tax (continued) The policy of the Group and Company is to provide retirement benefits (q) Operating segment The Group and Company has adopted the following new and Deferred tax assets and deferred liabilities are offset, if a legally for its employees. The contribution paid by the Group and Company to The Chief Operating Decision Maker reviews the financial results of amended IFRS and IFRIC interpretations during the year. Adoption of enforceable right exists to set off current tax assets against current tax fund obligations for the payment of retirement benefits are recognised the Group as a whole. Therefore the Group, in terms of IFRS 8, only these revised standards and interpretations did not have any effect liabilities and the deferred taxes relate to the same taxable entity and as an expense in profit or loss when they are due. The Ohlthaver & has one segment. Further divisional information has been provided as on the financial performance or position of the Group and company. . the same taxation authority. List Retirement Fund, which is a defined contribution fund, covers all additional information. the Group’s employees and is governed by the Pension Funds Act. (n) Value added tax The Group’s operations are located in Namibia. The Group’s products Revenues, expenses and assets are recognised net of the amount of (iii) Equity compensation benefits are sold on the local market and are exported to South Africa and value added tax except: The Group and Company grants share options to certain employees other African countries. 70 71 under an employee share plan controlled by the ultimate holding • Where the value added tax incurred on a purchase of assets company. or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the (iv) Post employment medical benefits cost of acquisition of the asset or as part of the expense item as The Group and Company provides for post employment healthcare applicable; and benefits to qualifying employees and retired personnel by subsidising • Receivables and payables that are stated with the amount of value a portion of their medical aid contributions. This scheme operates as a added tax included. defined benefit plan and the cost of providing benefits under the plan is determined using the projected credit unit method. The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in Actuarial gains and losses are recognised in profit or loss in full. the statement of financial position. The past service cost is recognised as an expense on a straight line basis over the average period until the benefits become vested. If the (o) Earnings per share benefits are already vested immediately following the introduction of, The calculation of earnings per share is based on earnings attributable or changes to pension plan, past service cost is recognised as an to ordinary shareholders. Account is taken of the weighted average expense immediately. number of ordinary shares in issue for the period during which they have participated in the income of the Group. The Group has no The entitlement to the benefits is usually based on the employee dilutive potential ordinary shares. remaining in service up to retirement age and completing a minimum service period. Earnings is defined as the, profit for the year after taxation and non- controlling interest. (v) Severance benefit obligation In accordance with the Namibia Labour Act, 2007, severance benefits (p) Employee benefits are payable to an employee, if the employee is dismissed, dies while (i) Short term benefits employed or resigns/retires on reaching the age of 65 years. The The cost of all short term employee benefits is recognised during obligation for severance benefits to current employees is actuarially the period in which the employee renders the related service, on an determined in respect of all Group employees and is provided for in undiscounted basis. A liability is recognised for the amount expected full. The cost of providing benefits is determined using the projected- to be paid if the Company or Group has a present legal or constructive unit-credit method, with actuarial valuations being carried out at the obligation to pay this amount as a result of past service provided by end of each reporting period. The movement for the year is recognised the employee and the obligation can be estimated reliably. in profit or loss in the year in which it occurs. Notes to the Annual Financial Statements...
Adoption of new and revised Standards and Interpretations effective in current year: The following Standards and Interpretations issued by the International Financial Reporting Interpretations Committee are effective for the current year: Effective for Effective for annual periods annual periods Issued/ beginning Issued/ beginning New/Revised International Financial Reporting Standards Revised on or after New/Revised International Financial Reporting Standards (continued) Revised on or after
Presentation of Financial Statements June 1 July 1 January IAS 1 - Amendments to revise the way other comprehensive income is presented 2011 2012 IFRS 11 Joint Arrangements May 2011 2013
Income Taxes December 1 January 1 January IAS 12 - Limited scope amendment (recovery of underlying assets) 2010 2012 IFRS 11 Joint Arrangements - Amendments to transitional guidance June 2012 2013 1 January IFRS 12 Disclosure of Interests in Other Entities May 2011 2013 The adoptions of the above Standards and Interpretations have resulted in a number of changes in presentation and disclosure. The revised 1 January Standards and Interpretations had no impact on the reported results or financial position of the company. IFRS 12 Disclosure of Interests in Other Entities - Amendments to transitional guidance June 2012 2013 72 73 RECENT AMENDMENTS 1 January The following table contains effective dates of IFRS’s and recently revised IAS’s, which have not been early adopted by the company and that IFRS 12 Disclosure of Interests in Other Entities - Amendments for investment entities October 2012 2014 might affect future financial periods: 1 January IFRS 13 Fair Value Measurement May 2011 2013 Effective for annual periods Issued/ beginning New/Revised International Financial Reporting Standards Revised on or after
First-time Adoption of International Financial Reporting Standards March 1 January IFRS 1 - Amendments for government loan with a below-market rate of interest when transitioning to IFRS 2012 2013 Effective for annual periods First-time Adoption of International Financial Reporting Standards Issued/ beginning on - Amendments resulting from Annual Improvement 2009-2011 Cycle May 1 January New/Revised International Financial Reporting Standards Revised or after IFRS 1 (repeat application, borrowing costs) 2012 2013 1 January Amendments resulting from Annual Improvements 2009-2011 Cycle 2013 IAS 1 (Comparative Information) May 2012 1 January 2013 and interim Financial Instruments: Disclosure December periods within Property, Plant and Equipment IAS 16 May 2012 1 January 2013 IFRS 7 - Amendments related to the offsetting of assets and liabilities 2011 those periods - Amendments resulting from Annual Improvements 2009-2011 Cycle ( servicing equipment)
Financial Instruments: Disclosure December 1 January Employee Benefits IFRS 7 - Deferral of mandatory effective date of IFRS 9 and amendments to transition disclosures 2011 2015 - Amended Standard resulting from the Post-Employment Benefits and Termination Amended IAS 19 Benefits projects June 2011 1 January 2013 Financial Instruments November 1 January IFRS 9 - Original issue (Classification and measurement of financial assets) 2009 2015 Consolidated and Separate Financial Statements IAS 27 - Original issue May 2011 1 January 2013 Financial Instruments - Reissue to include requirements for the classification and measurement of financial liabilities October 1 January Consolidated and Separate Financial Statements IFRS 9 and incorporate existing derecognition requirements 2010 2015 IAS 27 - Amendments for investment entities October 2012 1 January 2014
Financial Instruments October 1 January Investments in Associates IFRS 9 - Deferral of mandatory effective date of IFRS 9 and amendments to transition disclosures 2010 2015 IAS 28 - Reissued as IAS 28 Investments in Associates and Joint Ventures (as amended in 2011) May 2011 1 January 2013
May 1 January Financial Instruments: Presentation IFRS 10 Consolidated Financial Statements 2011 2013 IAS 32 - to clarify certain aspects because of diversity in application of the requirements on offsetting December 2011 1 January 2014
Consolidated Financial Statements June 1 January Amendments resulting from Annual improvements 2009-2011 Cycle IFRS 10 - Amendments to transitional guidance 2012 2013 IAS 32 (tax effect on equity distribution) May 2012 1 January 2013
Consolidated Financial Statements October 1 January Amendments resulting from Annual improvements 2009-2011 Cycle IFRS 10 - Amendments for investment entities 2012 2014 IAS 34 (Interim Reporting Segment assets) May 2012 1 January 2013 Notes to the Annual Financial Statements...
Company GROUP for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's
4. PROPERTY, PLANT AND EQUIPMENT At cost Effective for 135 132 144 154 Freehold land and buildings 144 154 135 132 annual periods 3 869 3 892 Leasehold land and buildings 6 050 6 027 Issued/ beginning on New/Revised International Financial Reporting Standards (continued) Revised or after 756 099 878 830 Plant and machinery 878 830 756 099 52 027 62 723 Vehicles 62 723 52 027 37 471 43 480 Furniture and equipment 43 480 37 471 IAS 36 Amendments arising from Recoverable Amount Disclosures for Non-Financial Assets May 2013 1 January 2014 127 307 168 605 Returnable containers 168 605 127 307 124 212 35 628 Assets under construction 35 628 124 212 IAS 39 Amendments for Novations of Derivatives June 2013 1 January 2014 1 236 117 1 337 312 1 339 470 1 238 275
Accumulated depreciation and impairment losses 26 474 27 573 Freehold land and buildings 27 573 26 474 1 694 2 175 Leasehold land and buildings 3 119 2 573 304 296 340 746 Plant and machinery 340 746 304 296 Effective for 74 32 851 35 551 Vehicles 35 551 32 851 75 annual periods beginning on 22 439 26 348 Furniture and equipment 26 348 22 439 New/Revised International Financial Reporting Interpretations Committee Interpretations issued but not yet effective or after 49 880 78 451 Returnable containers 78 450 49 880 437 634 510 844 511 787 438 513
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013 Carrying value 108 658 116 581 Freehold land and buildings 116 581 108 658 2 175 1 717 Leasehold land and buildings 2 931 3 454 451 803 538 084 Plant and machinery 538 084 451 803 19 176 27 172 Vehicles 27 172 19 176 15 032 17 132 Furniture and equipment 17 132 15 032 77 427 90 154 Returnable containers 90 155 77 427 124 212 35 628 Assets under construction 35 628 124 212 798 483 826 468 827 683 799 762 Movement of property, plant and equipment has been detailed in Annexure B.
Leased assets Included above are leased vehicles under a number of finance lease agreements, details of which are set out below: Vehicles 19 161 24 851 - at cost 24 851 19 161 (9 128) (9 029) - accumulated depreciation (9 029) (9 128) 10 033 15 822 Carrying value 15 822 10 033 The leased assets are encumbered in terms of finance lease agreements (see notes 14 & 29).
Land and buildings The Group’s land and buildings are not encumbered. Details of the Group’s land and leasehold land and buildings are maintained at the registered office of the Company. Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
5. INTANGIBLE ASSETS 7. INVESTMENT IN A JOINT VENTURE At cost 100 605 0 Loans to joint venture 0 100 605 3 005 11 016 Automation processes 11 016 3 005 304 747 598 007 Shares at cost 598 007 304 747 6 301 8 272 Software licences 8 272 6 301 0 (584 372) Impairment in investment 9 306 19 288 19 288 9 306 0 0 Accumulated equity accounted losses from on-going operations (396 283) (287 281) Accumulated amortisation 0 0 Accumulated equity accounted losses from deferred tax asset write-down (188 089) 0 1 052 3 243 Automation processes 3 243 1 052 405 352 13 635 Carrying amount of the investment 13 635 118 071 1 818 3 801 Software licences 3 801 1 818 2 870 7 044 7 044 2 870 Disclosed as Carrying value 0 0 Current 0 0 1 953 7 773 Automation processes 7 773 1 953 405 352 13 635 Non-current 13 635 118 071 4 483 4 471 Software licences 4 471 4 483 405 352 13 635 13 635 118 071 6 436 12 244 12 244 6 436 As of the date of these Consolidated Financial Statements, Namibia Breweries Movement of intangible assets has been detailed in Annexure B. Limited is in an ongoing stage of negotiations with its Joint Venture partners concerning the amalgamation of DHN Drinks (Pty) Ltd and the Sedibeng 76 77 Brewery operations. 6. INVESTMENT IN SUBSIDIARIES (ANNEXURE C) 988 988 Shares at cost During the current year additional shares were acquired by the existing joint venture partners in proportion to the existing ownership percentages. (285) (582) Loan from subsidiary Furthermore, management reassessed the recoverability of the Group 703 406 and Company investment in DHN Drinks (Pty) Ltd and in particular the 0 0 Loan to subsidiaries recoverability of the DHN deferred tax asset, taking into account that the negotiations with the Joint Venture partners had not concluded by the end of 703 406 the financial year. As a result, the group has recognised a full write-down of its portion of the deferred tax asset in DHN Drinks (Pty) Ltd. This has in turn (125) (422) Current (Note 14) impacted the net asset value of the joint venture and consequently the group’s 828 828 Non-current equity accounted loss. 703 406 Net investment in subsidiaries The loan to the Joint Venture was unsecured and bore interest at JIBAR +2% and had no fixed repayment terms.
Aggregated losses of subsidiaries amounted to N$ 36.3million Trade receivables from the Joint Venture are disclosed in note 10. (2012 N$36.3 million). Income earned by subsidiaries for the year amounted to N$0.3 million (2012: N$0.3 million). Jointly controlled entity - DHN Drinks (Pty) Ltd The Group, through a distribution rights and joint venture agreement with Heineken and Diageo, has a shareholding in this jointly controlled entity. The The loans are interest free and have no fixed repayment terms. principal activity of this entity is the sale the Venturers’ various beverages in the South African market. This joint venture commenced on 1 May 2008. The Group has a 15.5% equity interest in the jointly controlled entity.
The share of assets, liabilities, income and expenses of the jointly controlled entity at 30 June and for the years then ended, which would have been included in the consolidated financial statements if proportionally consolidated, would have been as follows: Current assets 138 105 146 165 Non-current assets 53 320 128 728 191 425 274 893
Current liabilities 124 093 274 025 124 093 274 025
Revenue 654 519 611 305 Total expenses (805 814) (739 087) Loss before income tax (151 295) (127 782) Income tax (145 796) 35 635 Net loss (297 091) (92 147) Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
8. AVAILABLE-FOR-SALE INVESTMENTS 10. TRADE AND OTHER RECEIVABLES (Continued) Unlisted investments Movement in the allowance account for impairment losses: 14 14 L&T Ventures (Proprietary) Limited 14 14 (6 437) (5 506) Balance at the beginning of the year (5 506) (6 437) (486) (632) Charge for the year (632) (486) 14 14 Directors' valuation of unlisted investments 14 14 17 4 588 Utilised 4 588 17 1 400 825 Unused/recovered amounts reversed 825 1 400 9. INVENTORIES (5 506) (725) Balance at the end of the year (725) (5 506) 53 290 72 696 Raw materials 72 696 53 290 16 064 18 501 Work in progress 18 501 16 064 Analysed as follows: (5 506) (725) Individually impaired trade receivables (725) (5 506) 50 012 119 768 Finished products 119 768 50 012 0 0 Collectively impaired trade receivables 0 0 83 146 73 785 Consumable stores 73 785 83 146 (5 506) (725) (725) (5 506) 663 1 140 Merchandise 1 140 663 203 175 285 890 285 890 203 175 In determining the recoverability of a trade receivable, the Company and Group 78 On 30 June 2013 the impairment to inventories amounted to N$5.1 million considers any change in the credit quality of the trade receivable from the date 79 (2012: N$4.6 million). The impairment is included in operating expenses in the credit was initially granted up to the reporting date. See also note 30.3 statement of comprehensive income and is mainly due to redundant spares and changes in packaging design. The concentration of credit risk is limited and is fully detailed in note 30.3. The directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.
10. TRADE AND OTHER RECEIVABLES Included in the allowance for doubtful debts are individually impaired trade 100 186 135 941 Trade receivables 135 994 100 319 receivables with a balance of N$489,000 (2012: N$5,237,000) against which (5 506) (725) Allowance for credit losses (725) (5 506) the group has instituted legal action. 246 675 89 816 Receivables from Joint Ventures 90 543 247 010 The impairment recognised represents the difference between the carrying 2 273 3 998 Receivables from holding company and fellow subsidiaries (Note 28.1) 3 998 2 273 amount of these trade receivable and the present value of the expected 22 888 20 423 Receivables from other related parties (Note 28.2) 20 423 22 888 liquidation proceeds. The group does not hold any collateral over these 50 485 33 054 Value added taxation 33 054 50 485 balances. 12 768 13 300 Refundable deposits 13 300 12 768 3 918 5 416 Prepayments 5 416 3 918 11. CASH AND CASH EQUIVALENTS 18 938 4 904 Other receivables 4 904 18 938 47 072 37 379 Cash and bank 37 637 47 307 452 625 306 127 306 907 453 093 43 897 229 445 Funds on call 230 164 44 592 90 969 266 824 Cash and cash equivalents at end of the year 267 801 91 899
Trade receivables are non-interest bearing and are generally on 30-60 days’ The carrying amount of these assets approximate their fair value. terms.
For terms and conditions relating to related party receivables, refer to note 28. 12. SUBORDINATED LOANS Trade receivables are pledged as security for the medium term loan disclosed 57 912 0 Balance at beginning of the year in note 14 and annexure A. (57 912) 0 Decrease in current year
0 0 Balance at end of the year Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
13. SHARE CAPITAL 15. RETIREMENT BENEFIT INFORMATION Ordinary - Authorised 15.1 Retirement fund 299 000 000 shares of no par value (2012 - 299 000 000) The total value of contributions to the Ohlthaver & List Retirement Fund during the period amounted to: Ordinary - Issued 8 108 12 719 Members 12 719 8 108 206 529 000 shares of no par value (2012 - 206 529 000). All shares issued 12 740 18 447 Employer contributions 18 447 12 740 1 024 1 024 are fully paid. 1 024 1 024 20 848 31 166 31 166 20 848 The 92 471 000 unissued shares of the Company are under the control of the Directors in terms of a members’ resolution dated 5 December 2012. In terms of the Companies Act, this authority expires at the forthcoming Annual General This is a defined contribution plan and is regulated by the Pension Fund Act. Meeting. Members will accordingly be asked to extend this said authority until The fund is valued at intervals of not more than three years. The fund was the Annual General Meeting to be held in 2014. The holders of ordinary shares valued by an independent consulting actuary at 30 June 2013 and its assets are entitled to receive dividends as declared from time to time and are entitled were found to exceed its actuarially calculated liabilities. to one vote per share on meetings of the company. 15.2 Post employment medical aid benefit plan 14. INTEREST-BEARING LOANS AND BORROWINGS 8 613 9 300 Balance at the beginning of the year 9 300 8 613 80 81 This note provides information about the contractual terms of the Company 724 739 Interest cost 739 724 and Group’s interest-bearing loans and borrowings. For more information about 597 1 248 Actuarial gain 1 248 597 the exposure to interest rate risk, see annexure A. (634) (678) Benefits paid (678) (634) 9 300 10 609 Non-current balance at the end of the year 10 609 9 300 Non-current liabilities Secured The Ohlthaver & List group provides for post employment medical aid benefits 260 000 0 Medium term loans (Annexure A) 0 260 000 in respect of retired employees. The present value of the provision at 30 June 2013, as determined by using projected unit credit method was N$10.6 million 5 693 9 231 Finance lease liabilities (Note 4) (Annexure A) 9 231 5 693 (2012: N$9.3 million). 265 693 9 231 9 231 265 693 The principal actuarial assumptions used in determining post employment medical aid benefit obligations for the Group's plan are as follows: Current liabilities 8.75% 7.70% Discount rate 7.70% 8.75% Secured 7.75% 8.10% Healthcare cost inflation 8.10% 7.75% 0 260 000 Medium term loan (Annexure A) 260 000 0 28 28 Members 28 28 125 422 Loans from related parties (Annexure A) 0 0 4 469 6 211 Finance lease liabilities (Annexure A) (Note 4) 6 211 4 469 Sensitivity of results 4 594 266 633 266 211 4 469 1% increase in medical inflation assumption For terms and conditions relating to related party receivables, refer to note 29 and Annexure A. 991 1 168 Accrued liability 1 168 991 10.7% 11.0% % increase 11.0% 10.7% Movable assets 819 877 Current service + interest cost in next year 877 819 A General Notorial Bond has been registered over moveable assets to secure 11.0% 11.4% % increase 11.4% 11.0% the Group and Company liability of R80.0 million. 1% decrease in medical inflation assumption (848) (993) Accrued liability (993) (848) (9.1%) -9.4% % decrease -9.4% (9.1%) (668) (710) Current service + interest cost in next year (710) (668) (9.5%) -9.8% % decrease -9.8% (9.5%) Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
15. RETIREMENT BENEFIT INFORMATION (Continued) 17. TRADE AND OTHER PAYABLES 15.3 Severence benefit 189 537 224 187 Trade and other payables 224 797 189 927 6 823 7 231 Balance at the beginning of the year 7 231 6 823 48 293 52 611 Excise duties 52 611 48 293 565 623 Current service costs 623 565 84 413 93 956 Accruals 93 956 84 473 642 642 Interest cost 642 642 22 432 32 701 Returnable packaging deposits 32 701 22 432 (687) (78) Actuarial gain (78) (687) 1 676 2 057 Payables to related parties (Note 28). 2 057 1 676 (112) (82) Benefits paid (82) (112) 346 351 405 512 406 122 346 801 7 231 8 336 Non-current balance at the end of the year 8 336 7 231 Terms and conditions of the above financial liabilities: For terms and conditions and balances owing to relating to related parties refer 16 531 18 945 Total Retirement benefit liability 18 945 16 531 to note 28. The principal actuarial assumptions used in determining Trade payables are non-interest bearing and are normally settled on 30-60 severence pay obligations for the Group is as follows: day terms. 8.25% 8.20% Discount rate 8.20% 8.25% Accruals include leave, medical, bonus, electricity and management fee 5.75% 5.80% Inflation rate 5.80% 5.75% accruals. 5.75% 6.00% Salary increase rate 6.00% 5.75% 82 83 18. DERIVATIVE FINANCIAL INSTRUMENTS 71 (378) Forward foreign exchange contract asset / (liability) (378) 71 16. DEFERRED TAXATION Refer to note 31.2 for details of outstanding forward exchange contracts at Deferred taxation liability year end.
99 913 126 752 Balance at beginning of the year 126 927 109 389 19. REVENUE 24 946 33 228 Accelerated depreciation for tax purposes 33 261 24 979 2 132 563 2 359 134 Sale of goods 2 359 155 2 132 596 238 1 404 Debtors allowances 1 404 238 (31 839) (46 532) Discounts allowed (46 532) (31 839) 174 1 588 Consumables 1 588 174 59 005 70 456 Royalty income 70 456 59 005 (7 627) (3 491) Customer deposits (3 491) (7 627) 0 0 Rent received 305 305 (1 063) (2 672) Other provisions (2 672) (1 063) 2 159 729 2 383 058 2 383 384 2 160 067 9 316 0 Lease and leaseback rentals 0 0 20. OPERATING EXPENSES (245) (1 795) Other leases (1 795) (245) Costs by nature 838 1 004 Prepayments 1 004 820 988 150 1 051 378 Raw material and consumables 1 051 378 988 150 (373) (820) Retirement and severance pay benefit obligations (820) (373) 224 703 251 202 Employment costs 251 202 224 703 635 1 974 Intangible assets 1 974 635 261 341 272 868 Administration and marketing expenses 273 057 264 099 0 (4 623) Effect of change in tax rate (4 623) 0 142 121 170 349 Outbound railage and transport 170 349 142 121 26 839 25 797 Movement during the year 25 830 17 538 34 789 37 021 Repairs and maintenance 37 021 34 789 126 752 152 549 152 757 126 927 77 125 100 223 Depreciation, amortisation and net of impairments 100 288 77 190 Analysis of deferred taxation liability: (1 500) 0 Reversal of impairment of loans 0 0 144 963 178 191 Accelerated depreciation for tax purposes 178 417 145 156 1 726 729 1 883 041 1 883 295 1 731 052 (1 404) 0 Debtors allowances 0 (1 404) 4 579 6 167 Consumables 6 167 4 579 (7 627) (11 118) Customer deposits (11 118) (7 627) 0 0 Lease and leaseback rentals 0 0 (7 709) (10 381) Other provisions (10 381) (7 709) (3 455) (5 250) Other leases (5 250) (3 455) 838 1 842 Prepayments 1 824 820 (5 621) (6 441) Retirement and severance pay benefit obligations (6 441) (5 621) 2 188 4 162 Intangible assets 4 162 2 188 0 (4 623) Effect of change in tax rate (4 623) 0 126 752 152 549 152 757 126 927 Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
21. OPERATING PROFIT 24. INCOME TAX EXPENSE is arrived at after taking account of The major components of income tax expense for the years ended Income 30 June 2013 and 2012 are: 1 500 0 Impairment reversal of loans and investments 0 0 (92 870) (109 869) Namibian taxation (109 996) (94 068) 1 000 4 220 Net gains on disposal of plant and equipment 4 220 1 000 (19 959) (16 801) South African taxation (16 801) (19 959) (112 829) (126 670) Total income tax expense in income statement (126 797) (114 027) Expenses
Audit fees Comprising 1 175 1 250 - for statutory audit 1 250 1 175 (66 004) (84 072) Normal taxation - current period: Namibia (84 166) (76 503) 787 1 342 - for other services 1 342 787 (27) 0 - prior period: Namibia 0 (27) 80 187 93 963 Depreciation 94 028 80 252 (19 959) (19 717) - current period: South Africa (19 717) (19 959) 1 624 4 174 Amortisation - intangible asset 4 174 1 624 0 2 916 - prior period: South Africa 2 916 0 8 407 7 521 Directors' emoluments (Annexure D) 7 521 8 407 (26 839) (25 797) Deferred taxation - current period: Namibia (25 830) (17 538) 18 685 31 499 Management fees 31 499 18 685 (112 829) (126 670) Income tax expense (126 797) (114 027) 84 2 819 2 713 Royalties paid 2 713 2 819 85 No provision for normal taxation has been made for certain subsidiaries 774 0 Technical fees 0 774 which have estimated tax losses of N$35.9 million (2012: N$35.9 million). (6 353) 0 Realised loss on foreign exchange transactions 0 (6 353) No deferred tax asset has been recognised for these calculated tax losses Operating lease payments as it is uncertain that future taxable profits will be available against which the 6 349 6 155 - land and buildings 6 155 6 349 associated unused tax losses can be utilised. (767) 500 Impairment / (reversal) of inventories 500 (767) 486 632 Impairment of trade receivables 632 486 Estimated tax losses available for (4 687) 0 Reversal of impairment of fixed assets 0 (4 687) 0 0 Set-off against future taxable income 35 954 35 940 0 0 Less: Applied to offset any deferred taxation liability 0 0 22. FINANCE COSTS 0 0 Bank interest 0 174 0 0 35 954 35 940 21 885 22 259 Interest bearing loans 22 259 21 885 0 0 Utilised to create deferred tax asset 0 0 1 174 1 389 Finance leases 1 389 1 174 0 0 Available to reduce future taxable income 35 954 35 940 4 883 0 Fellow subsidiaries and other related parties 0 0 27 942 23 648 Total finance costs 23 648 23 233
% % Reconciliation of effective tax rate % % 23. FINANCE INCOME 34.0 34.0 Namibian normal tax rate 34.0 34.0 7 270 7 887 Interest - bank and funds on call 7 918 7 882 (Reduction)/ increase in rate of taxation 14 221 12 474 - jointly controlled entities 12 474 14 221 (0.2) 2.4 - exempt income (1.0) 0.0 1 306 0 - fellow subsidiaries and other related parties 0 243 (7.4) 32.8 - manufacturing allowances (14.4) (9.4) 22 797 20 361 Total finance income 20 392 22 346 0 5.3 - decrease in tax rate (2.3) 0 0.1 (0.4) - disallowable expenditure 0.2 0.2 (0.1) 8.2 - effect of rate differential between tax jurisdictions (3.6) (0.2) 0 (226.7) - impairment of investment in joint venture 0 0 0.0 0.0 - equity loss in joint venture 50.6 9.3 26.4 (144.5) Effective rate of taxation 63.5 33.9 Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
25. BASIC AND HEADLINE EARNINGS 26. DIVIDENDS PAID AND PROPOSED (Continued) PER ORDINARY SHARE (RESTATED) Basic earnings per share amounts are calculated by dividing profit for the Proposed dividend year attributable to ordinary equity holders of the parent by weighted average On 17 September 2013 the directors declared a final dividend of 31 cents (3 number of ordinary shares outstanding during the year. September 2012: 27 cents) per ordinary share. This dividend will be paid on 55 763 64 024 22 November 2013. 64 024 55 763 Calculation of weighted average number of shares for basic earnings per share and dilutive earnings per share: 206 529 206 529 Shares issued at beginning of period 206 529 206 529 27. NOTES TO THE CASH FLOW STATEMENTS 0 0 Shares issued during the year to ordinary shareholders 0 0 27.1 Cash generated by operations 206 529 206 529 Weighted average number of shares 206 529 206 529 427 855 (87 642) Profit before income tax 199 742 335 981
Profit attributable to ordinary shareholders 72 945 221 954 Adjustments for: Net impairment reversal on property, plant and equipment (after tax of N$2 415 000) 0 (4 687) 80 187 93 963 Depreciation 94 028 80 252 Accumulated equity accounted losses from ongoing operations 109 002 92 147 1 624 4 174 Amortisation 4 174 1 624 Accumulated equity accounted losses from deferred tax asset 188 089 0 (1 000) (4 220) (Gain) on disposal of property plant and equipment (4 220) (1 000) 86 Net gain on the sale of property, plant and equipment (after tax) (2 785) (660) 87 (1 500) 0 Impairment reversal of loan granted to subsidiary 0 0 Headline earnings 367 251 308 754 (4 687) 0 Impairment reversal of plant and equipment 0 (4 687) 25.1 Basic earnings per ordinary share (cents) (796) 449 Fair value adjustment for derivative financial instruments 449 (796) 315 025 (214 312) Profit attributable to ordinary shareholders 72 945 221 954 1 095 2 414 Increase in provisions 2 414 1 095 206 529 206 529 Weighted number of shares in issue (000's) 206 529 206 529 0 584 372 Impairment of investment in joint venture 0 92 147 152.5 (103.8) Basic earnings per ordinary share (cents) 35.3 107.5 0 0 Accumulated equity accounted losses from on-going operations 109 002 0 0 0 Accumulated equity accounted losses from deferred tax asset write-off 188 089 0 25.2 Headline earnings per ordinary share (cents) (22 797) (20 361) Finance income (20 392) (22 346) Headline earnings 367 251 308 754 27 942 23 648 Finance costs 23 648 23 233 Weighted average number of shares in issue (000's) 206 529 206 529 507 923 596 797 Operating profit before working capital changes 596 934 505 503 Headline earnings per ordinary share (cents) 177.8 149.5
During the prior year the equity accounted loss of the joint venture (N$92 147 000) (52 044) (82 715) Inventories (82 715) (52 044) was inadvertently omitted from the Headline earnings per share calculation. (121 478) 133 998 Trade and other receivables 133 686 (121 184) This resulted in Headline earnings per share being disclosed as 104.9 cents instead of 149.5 cents as shown above. The error does not have any other 34 436 58 711 Trade and other payables 58 871 30 809 impact on the financial statements. 0 0 Non-interest bearing loans and borrowings 0 0 26. DIVIDENDS PAID AND PROPOSED (139 086) 109 994 Working capital changes 109 842 (142 419) In respect of the 2013 financial year 368 837 706 791 Cash generated by operations 706 776 363 084 0 64 024 - interim (31 cents per share, paid 10 May 2013) 64 024 0 0 0 - final (31 cents per share, proposed) 0 0 27.2 Dividends paid
In respect of the 2012 financial year Dividends paid are reconciled to the amounts disclosed in the statement of 55 763 0 - interim (27 cents per share, paid 11 May 2012) 0 55 763 changes in equity as follows: 0 55 763 - final (27 cents per share, paid 23 November 2012) 55 763 0 (106 345) (119 787) Ordinary dividends per statement of changes in equity (119 787) (106 345)
In respect of the 2011 financial year 27.3 Income tax paid 0 0 - interim (25 cents per share, paid 13 May 2011) 0 0 (10 272) (4 788) Balance at beginning of the year (4 787) (17 740) 50 582 0 - final (25 cents per share, paid 18 November 2011) 0 50 582 (85 990) (100 873) Current tax charge (100 968) (96 489) 106 345 119 787 Dividends to equity holders 119 787 106 345 4 788 59 Balance at end of the year 59 4 787 (91 474) (105 602) Income tax paid during the year (105 696) (109 442) The dividends paid and proposed are shown after the elimination of dividends received from shares held in the NBL Share Purchase Trust. Dividend paid per ordinary share (net of share purchase trust) 24.5 27.0 Final dividend (cents) 27.0 24.5 27.0 31.0 Interim dividend (cents) 31.0 27.0 51.5 58.0 58.0 51.5 Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
28. RELATED PARTIES 28. RELATED PARTIES (Continued) The immediate holding company of Namibia Breweries Limited is NBL 28.1 Holding company and fellow subsidiaries (Continued) Investment Holdings Limited of which the shareholding is held by Ohlthaver & Revenue List Finance and Trading Corporation Limited and Heineken International B.V. Sales during the year and Diageo plc. 45 56 Broll and List Property Management (Namibia) (Proprietary) Limited 56 45 The Company's ultimate holding Company is List Trust Company (Proprietary) 1 157 226 1 250 549 DHN Drinks (Proprietary) Limited 1 250 549 1 157 520 Limited. 13 616 8 739 Diageo Great Britain Limited 8 739 13 616 111 657 71 172 Diageo South Africa (Proprietary) Ltd 71 172 111 657 During the year the Company and the Group, in the ordinary course of 45 24 Hangana Seafood (Proprietary) Limited 24 45 business, entered into various sales, purchases and loan transactions with fellow subsidiaries and its holding company. 88 278 87 115 Heineken South Africa Export Company (Proprietary) Ltd 87 115 88 278 243 0 Kilimandjaro Trading (Proprietary) Limited 0 243 The following table provides the total amount of transactions, which have been 1 625 2 703 Namibia Dairies (Proprietary) Limited 2 703 1 625 entered into with related parties for the relevant financial year. For infromation regarding outsanding balances at 30 June 2013 and 2012, refer to notes 6, 7, 170 448 O&L Leisure (Proprietary) Limited 448 170 8, 10, 12, 14 and 17. 216 269 Ohlthaver & List Centre (Proprietary) Limited 269 216 88 180 0 Olifa Hotels & Resorts Namibi (Proprietary) Ltd 0 180 89 28.1 Holding company and fellow subsidiaries 54 59 Wernhill Park (Proprietary) Limited 59 54 Current assets (note 10) 0 3 O&L Energy (Proprietary) Limited 3 0 27 0 Eros Air (Proprietary) Limited 0 27 0 0 W.U.M. Properties Limited t/a Kraatz Steel Division 0 0 0 0 Broll and List Property Management (Namibia) (Proprietary) Limited 0 0 301 337 W.U.M. Properties Limited t/a Model Pick 'n Pay 337 301 38 35 Dimension Data (Proprietary) Limited 35 38 0 0 W.U.M. Properties Limited t/a Namib Sun Hotels 0 0 0 0 Kilimandjaro Investments (Proprietary) Limited 0 0 1 373 656 1 421 474 1 421 474 1 373 950 1 935 3 811 Namibia Dairies (Proprietary) Limited 3 811 1 935 Rent received 55 40 Ohlthaver & List Centre (Proprietary) Limited 40 55 0 0 W.U.M. Properties Limited t/a Model Pick 'n Pay 305 305 54 87 Olifa Hotels & Resorts Namibia (Proprietary) Limited 87 54 1 373 656 1 421 474 Total Revenue from related parties 1 421 779 1 374 255 72 23 W.U.M. Properties Limited t/a Model Pick 'n Pay 23 72 Current liabilities (note 18) 40 0 W.U.M. Properties Limited t/a Namib Sun Hotels 0 40 481 496 Dimension Data (Proprietary) Limited 496 481 0 0 W.U.M. Properties Limited t/a O & L Properties Division 0 0 7 0 Hangana Seafood (Proprietary) Limited 0 7 0 0 Wernhill Park (Proprietary) Limited 0 0 120 125 ICT Holdings (Proprietary) Limited 125 120 0 2 O&L Energy (Proprietary) Limited 2 0 0 3 Namibia Dairies (Proprietary) Limited 3 0 52 0 Hangana Seafood (Proprietary) Limited 0 52 1 059 805 Ohlthaver & List Centre (Proprietary) Limited 805 1 059 2 273 3 998 3 998 2 273 0 230 Broll and List Property Management (Namibia) (Proprietary) Limited 230 0 0 392 O&L Energy (Proprietary) Limited 392 0 0 0 W.U.M. Properties Limited t/a O & L Farming Division 0 0 9 6 W.U.M. Properties Limited t/a Model Pick 'n Pay 6 9 1 676 2 057 2 057 1 676 Purchases during the year 115 113 Eros Air (Proprietary) Limited 113 115 1 249 1 306 ICT Holdings (Proprietary) Limited 1 306 1 249 27 30 Namibia Dairies (Proprietary) Limited 30 27 197 102 O&L Leisure (Proprietary) Limited 102 197 0 0 W.U.M. Properties Limited t/a Namib Sun Division 0 0 0 0 W.U.M. Properties Limited t/a O&L Properties Division 0 0 103 212 W.U.M. Properties Limited t/a Model Pick 'n Pay 212 103 1 691 1 763 1 763 1 691 Interest received 244 397 O&L Centre (Proprietary) Limited 397 244 14 221 12 474 DHN Drinks (Proprietary) Limited 12 474 14 221 1 062 0 CBONAB and SBN trusts 0 0 15 527 12 871 12 871 14 465 Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
28. RELATED PARTIES (Continued) 28. RELATED PARTIES (Continued) 28.1 Holding company and fellow subsidiaries (Continued) 28.2 Other related parties (Continued) Key management personnel Dividends received For directors’ emoluments refer to Annexure D. 1 051 0 Share purchase trust 0 1 051
Interest paid Subsidiaries 4 883 0 CBONAB and SBN trusts 0 0 Details of the subsidiaries are disclosed in Annexure C. 0 0 W.U.M. Properties Limited t/a O&L Properties Division 0 0 4 883 0 0 0 Joint Venture Details of the Joint Venture are disclosed in note 7. Management and shared service fees paid 13 575 25 955 Ohlthaver & List Trust Company Limited 25 955 13 575 Retirement benefit information and post employment medical aid benefit plan Directors’ fees Details of the above are disclosed in note 15.
90 390 415 Ohlthaver & List Trust Company Limited 415 390 91 Terms and conditions of transactions with related parties
The sales to and purchases from related parties are made at normal market 28.2 Other related parties prices. Outstanding balances at year-end are unsecured, on 30-90 day terms, Management fees paid interest free and settlement occurs in cash. 2 555 2 772 Diageo Plc 2 772 2 555 2 555 2 772 Heineken International B.V. 2 772 2 555 For the year ended 30 June 2013, the Group did not have any impairment losses relating to amounts owed by related parties (2012: Nil) and the impairment of 5 110 5 544 5 544 5 110 the NBL RSA (Pty) Ltd. remained the same at N$36.2 million (see Annexure C).
Royalties received Directors interest 60 594 70 456 DHN Drinks (Proprietary) Limited 70 456 60 594 At the financial year end the directors were directly interested in the Company's (1 589) 0 Diageo South Africa (Proprietary) Limited 0 (1 589) issued shares as follows: 59 005 70 456 70 456 59 005 % % Ordinary shares Royalty expense Directly 0.10 0.06 2 819 2 713 Heineken International B.V. 2 713 2 819 0.10 0.06 No individual director has a direct shareholding in excess of 1% of the issued Directors’ fees shares of the Company. 115 100 Engling, Stritter & Partners 100 115 The Company has not been informed of any material changes in these holdings 320 220 Diageo Plc 220 320 between year end and the date of this report. 238 180 Heineken International B.V. 180 238 673 500 500 673 Current assets (note 10) 3 084 1 938 Diageo Great Britain Limited 1 938 3 084 12 636 14 803 Diageo South Africa (Proprietary) Limited 14 803 12 636 7 168 3 682 Heineken South Africa Export Company (Proprietary) Limited 3 682 7 168 22 888 20 423 20 423 22 888
Legal fees 676 1 363 Engling, Stritter & Partners 1 363 676
Technical fees 774 0 Heineken International B.V. 0 774 Notes to the Annual Financial Statements...
Company GROUP for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's 30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND 29. CAPITAL COMMITMENTS AND CONTINGENCIES POLICIES Authorised 30.3 Credit risk The Group’s principle financial instruments, other than derivatives, Financial assets which potentially subject the Group to a concentration 63 980 28 260 Contracted for 28 260 63 980 comprise bank loans, loans to and from holding company and fellow of credit risk consist principally of cash, funds on call and trade 182 250 141 139 Not contracted for 141 139 182 250 subsidiaries, leases and cash and short term deposits. The main receivables. The Group’s cash equivalents and funds on call are 246 230 169 399 169 399 246 230 purpose of these financial instruments is to raise finance for the placed with high credit quality financial institutions. Trade receivables These capital commitments are mainly for the acquisition of new plant and machinery. Group’s operations. The Group has various other financial assets and are stated at their cost less impairment losses. The Group’s single liabilities such as trade receivables and trade payables, which arise largest customer is DHN Drinks (Pty) Ltd. The Group has no other This proposed capital expenditure is to be financed by own funds, and are expected to be settled in the following year. directly from its operations. significant concentration of credit risk or significant exposure to any individual customer or counterparty. 6 229 6 500 Guarantees and suretyship 6 500 6 229 The Group also enters into derivative transactions such as forward The suretyships are issued by First Rand Bank Limited in favour of the South exchange contracts. The reason for this is to manage the currency risk The Group’s exposure to credit risk arises from possible default of the African Revenue Services. from the Group’s operations. As a matter of principle, the Group does counterparty, with a maximum exposure equal to the carrying amount Finance lease liabilities not enter into derivative contracts for speculative purposes. of these instruments. In respect of possible default by a counterparty, The Group has entered into finance leases on certain motor vehicles. These the Group holds collateral as security in the amount of N$ Nil (2012: leases have fixed terms of repayments and purchase options. Lease payments The fair value of foreign exchange forward contracts represents the Nil). 92 are linked to prime variable interest rates. Future minimum lease payments 93 estimated amounts that the company would receive, should the under finance leases together with the present value of the net minimum lease payments are as follows: contracts be terminated at the reporting date, thereby taking into Management monitors adherence to payment terms by the joint account the unrealised gains or losses. venture, on a monthly basis. Financial performance and projected Minimum lease payments cash flows of the joint venture are monitored on a monthly basis to 5 277 7 448 Within one year 7 448 5 277 The main risks arising from the Group’s financial instruments are ensure recoverability of all amounts. 6 212 10 313 After one year but not more than five years 10 313 6 212 interest rate risk, liquidity risk, foreign currency risk and credit risk. 11 489 17 761 Total minimum lease payments 17 761 11 489 The board reviews and agrees policies for managing each of these The granting of credit is made on application and is approved by (1 328) (2 319) Less amounts representing finance charges (2 319) (1 328) risks. management. At year-end the company did not consider there to 10 161 15 442 Principal minimum lease payments 15 442 10 161 be any significant concentration of credit risk or significant exposure Repurchase obligation 30.1 Foreign currency risk to any individual customer or counter party which has not been There exists a potential repurchase obligation relating to the Group’s Joint The Group has transactional currency exposures. Such exposures adequately provided for. Venture in South Africa. The potential obligation arises from a change in product arise from purchases of raw materials and sales of the Group’s mix or the Joint Venture agreement terminating, necessitating a repurchase of products in a currency other than the Group’s functional currency. the distribution rights by the Group. The Directors are of the opinion that in substance this obligation is a derivative over a non-financial asset and as such is assessed in terms of IAS 37: Provisions, Contingent Liabilities and Contingent The Group appropriately hedges foreign purchases in order to manage Assets. The obligation only arises upon termination of the agreement and, in its foreign currency exposure. The Group does not apply hedge the opinion of the Directors cannot be reliably measured at the reporting date. accounting. Forward exchange contracts are entered into in order The Directors have assessed the probability of the contract being terminated in to manage the Group’s exposure to fluctuations in foreign currency the foreseeable future and consider this as being unlikely. exchange rates on foreign transactions. Refer note 31.2 for unutilised Joint Venture - proposed transaction (note 7) forward exchange contracts and uncovered foreign trade receivables As of the date of these Finance Statements, there are on-going discussions and payables at year end. surrounding a proposed transaction which involves a restructuring of existing arrangements between Diageo Highlands Holdings B.V (“Diageo”), Heineken 30.2 Interest rate risk International B.V. (“Heineken”) and NBL (“the parties”) in South Africa. The Group is exposed to interest rate risk as it borrows and places Through this transaction DHN Drinks (Pty) Ltd (“DHN”), the shareholders of which are Diageo, a subsidiary of Diageo Plc, Heineken, a subsidiary of funds at floating interest rates. The risk is managed by maintaining an Heineken N.V. and NBL, intend to acquire 100% of the issued share capital appropriate mix between fixed and floating borrowings and placings of Sedibeng Brewery (Pty) Limited (“Sedibeng”), which owns the Sedibeng within market expectations. brewery, the current shareholders of which are Heineken and Diageo.
Whilst negotiations are still in progress, it is possible that DHN may require Refer to Annexure A and note 31.3 for further detail on interest rates. a proportion of shareholder funding for this proposed transaction. Where such shareholder funding is requested by DHN, NBL will simultaneously raise additional financing to fund such a possible funding request.
DHN Funding obligation Each financial year the shareholders of DHN shall estimate the amount of funding required by DHN. Each shareholder is then required to provide this funding in proportion to its shareholding. In the current financial year, the group’s share of the funding requirement was N$293.6m (2012: N$94.5m) Notes to the Annual Financial Statements...
Company GROUP Company GROUP for the year for the year for the year for the year for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 2012 2013 2013 2012
N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
30. FINANCIAL RISK MANAGEMENT 30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued) OBJECTIVES AND POLICIES (Continued) 30.3 Credit risk (Continued) 30.5 Capital risk management Major concentrations of credit risk that arise from the Group's receivables in The Company and Group manages its capital to ensure that entities in the relation to the location of the customers by the percentage of total receivables group will be able to continue as a going concern while maximising the return from customers are: to stakeholders through the optimisation of the debt and equity balance. The company's and group's overall strategy remains unchanged from the prior year. % % The capital structure of the company and group consists of debt, which Namibia 53.60 21.1 includes the borrowings disclosed in note 14, cash and cash equivalents and RSA 32.00 68.5 equity attributable to equity holders of the parent, comprising issued capital Other export markets 14.40 10.4 reserves and retained earnings. 94 95 100.00 100.0 Gearing ratio As at 30 June, the ageing of trade receivables is as follows: The company's and group's management committee reviews the capital structure on a semi-annual basis. Consistent with others in the industry, the
Original terms Changed terms Past due but not impaired group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings Neither past due Neither past due Total nor impaired nor impaired 0 - 60 days 60 - 120 days 120 + days less cash and cash equivalents. Total capital is calculated as 'equity' as shown in the consolidated balance sheet plus net debt. GROUP N$'000 N$'000 N$’000 N$'000 N$'000 N$'000 2013 250 233 214 557 0 5 732 7 123 22 821 2012 366 984 347 258 0 5 394 3 864 10 468 The gearing ratio at the year end was as follows: 270 162 275 442 Debt (i) 275 442 270 162 COMPANY 2013 249 453 213 777 0 5 732 7 123 22 821 (90 969) (266 824) Less: Cash and cash equivalents (267 801) (91 899) 2012 366 515 346 789 0 5 394 3 864 10 468 179 193 8 618 Net debt 7 641 178 263
30.4 Liquidity risk 1 193 245 859 145 Equity (ii) 860 471 907 313 15% 1% Net debt to equity ratio 1% 20% The Group manages liquidity risk by monitoring forecast cash flows and (i) Debt is defined as long- and short-term borrowings. ensuring that adequate unutilised borrowing facilities are maintained. (ii) Equity includes all capital and reserves of the company.
Borrowing capacity is assessed by the directors of the Company. The directors consider a ratio of not higher than 50% of shareholders' equity as conservative. 31. FINANCIAL INSTRUMENTS 50% of Shareholder's Equity 430 236 453 657 31.1 Fair values
Less total interest bearing borrowings (275 442) (270 162) The fair value of all financial instruments are substantially identical to the Unutilised borrowing capacity 154 794 183 495 carrying amounts reflected in the balance sheet. Notes to the Annual Financial Statements...
31. FINANCIAL INSTRUMENTS (Continued) 31. FINANCIAL INSTRUMENTS (Continued) 31.2 Hedging activities and foreign currency risk 31.3 Maturity profile
Forward exchange contracts are entered into with banks but are not designated as hedges for specific purchases. If contract rates are more favourable The following tables detail the Group and Company's remaining contractual maturity for its financial liabilities and assets. The tables have been than the spot rate, on the date of payment of foreign creditors, they will be used. The maturity date represents the date when the contract must be drawn up based on the undiscounted cash flows based on the earliest date on which the Group and Company can be required/anticipate to incur exercised if it is not exercised before this date. The following table summarises, by major currency, the unutilised forward exchange contracts and and outflow/inflow. The table includes both interest and principal cash flows. amounts to be paid/ received in foreign currency, for the Group and Company:
Maturity date Foreign amount Exchange rate Namibian Dollar amount 2013 2012 2013 2012 2013 2012 Effective 1 year 2 years 3-5 years 5 years + Total '000 '000 N$ '000 N$ '000 interest rate N$ '000 N$ '000 N$ '000 N$ '000 N$ '000
Forward exchange contracts: Bought: 2013 - Group Euro 1 - 12 months 1 200 1 501 13.15 10.58 15 778 15 876 Financial assets Cash and cash equivalents 6.75% 267 801 0 0 0 267 801 These contracts will be utilised during the next twelve months. No amounts were recognised during the year against equity as a result of cash flow hedges. Trade and other receivables 0.00% 283 377 0 0 0 283 377 Other investments 0.00% 0 0 0 14 14 Foreign trade receivables: 551 178 0 0 14 551 192 US Dollars 658 1 017 9.96 8.41 6 558 8 556 96 Euro 52 406 13.01 10.48 676 4 259 97 Financial liabilities British Sterling 51 0 15.19 0 775 0 Canadian Dollar 33 0 10.39 0 342 0 Interest-bearing liabilities Ref. Anex. A 284 437 5 433 4 880 0 294 750 8 351 12 815 Trade and other payables 0.00% 330 543 0 0 0 330 543 Derivative financial instruments 0.00% 378 0 0 0 378 Foreign trade payables: US Dollars 1.5 30 9.96 8.41 15 256 615 358 5 433 4 880 0 625 671 Euro 761 6 704 13.01 10.48 9 897 70 256 Swiss Franc 23 0 9.37 N/A 220 0 2012 - Group 10 132 70 512 Financial assets Cash and cash equivalents 6.75% 91 899 0 0 0 91 899 Company GROUP Derivative financial instruments 0.00% 71 0 0 0 71 for the year for the year for the year for the year Loans to joint venture JIBAR +2.0% 0 0 100 605 0 100 605 ended 30 June ended 30 June ended 30 June ended 30 June Trade and other receivables 0.00% 366 983 0 0 0 366 983 2012 2013 2013 2012 Restated Restated Other investments 0.00% 0 0 0 14 14 N$ 000's N$ 000's N$ 000's N$ 000's 458 953 0 100 605 14 559 572
Foreign currency sensitivity analysis Financial liabilities The Group is primarily exposed to the currency of the European Central Bank (Euro). Interest-bearing liabilities Ref. Anex. A 5 277 264 090 2 122 0 271 489 The following table details the company’s sensitivity to a 10% increase and Trade and other payables 0.00% 267 969 0 0 0 267 969 decrease in the Namibia Dollar (N$) against the relevant foreign currencies. 273 246 264 090 2 122 0 539 458 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel an represents management’s assessment of the reasonably possible change in foreign exchange rates.
Below, a positive number indicates an increase in profit, a negative number indicates a decrease in profit based on the Namibia Dollar strengthening 10% against the relevant currency. For a 10% weakening of the Namibia Dollar against the relevant currency, there would be an equal and opposite impact on the profit and other equity. Effect on profit before taxation 5 012 (656) Euro (656) 5 012 0 78 British Sterling 78 0 830 654 US Dollars 654 830 0 34 Canadian Dollars 34 0 0 (22) Swiss Franc (22) 0 5 842 88 88 5 842
0 0 Effect on equity 0 0 Notes to the Annual Financial Statements...
31. FINANCIAL INSTRUMENTS (Continued) Company GROUP 31.3 Maturity profile (Continued) for the year for the year for the year for the year ended 30 June ended 30 June ended 30 June ended 30 June 2012 2013 2013 2012 Effective 1 year 2 years 3-5 years 5 years + Total interest rate N$ '000 N$ '000 N$ '000 N$ '000 N$ '000 N$ 000's N$ 000's N$ 000's N$ 000's
31. FINANCIAL INSTRUMENTS (Continued) 2013 - Company Financial assets 31.4 Carrying value of financial instruments on the statement of financial position Cash and cash equivalents 6.75% 266 824 0 0 0 266 824 Trade and other receivables 0.00% 282 876 0 0 0 282 876 Financial assets Other investments 0.00% 0 0 0 14 14 Derivative instruments at fair value through profit or loss 549 700 0 0 14 549 714 71 0 - Forward foreign exchange contracts (note 19) 0 71 Loans and receivables Financial liabilities 0 0 - Subordinated loans (note 13) 0 0 Interest-bearing liabilities Ref. Anex. A 284 437 5 433 4880 0 294 750 0 0 - Loans to subsidiaries (note 6) 0 0 Trade and other payables 0.00% 329 933 0 0 0 329 933 0 0 - Loans (note 8) 0 0 98 Derivative financial instruments 378 0 0 0 378 100 605 0 - Loans to joint venture (note 7) 100 605 99 614 748 5 433 4880 0 625 061 366 983 282 876 - Trade and other receivables (note 10) 283 377 366 983 90 969 266 824 - Cash and cash equivalents (note 11) 267 801 91 899 2012 - Company 558 557 549 700 551 178 559 487 Financial assets Available-for-sale financial assets Cash and cash equivalents 6.75% 90 969 0 0 0 90 969 14 14 - Available-for-sale investments (note 8) 14 14 Derivative financial instruments 0.00% 71 0 0 0 71 Loans to joint venture JIBAR +2.0% 0 0 100 605 0 100 605 Financial liabilities Trade and other receivables 0.00% 366 983 0 0 0 366 983 Derivative instruments at fair value through profit or loss Other investments 0.00% 0 0 0 14 14 0 378 - Forward foreign exchange contracts (note 18) 378 0 458 023 0 100 605 14 558 642 Amortised cost Financial liabilities 267 519 329 933 - Trade and other payables (note 17) 330 543 267 969 Interest-bearing liabilities Ref. Anex. A 5 402 264 090 2 122 0 271 614 270 287 275 442 - Interest bearing loans and borrowings (note 14) 275 442 270 162 Trade and other payables 0.00% 267 519 0 0 0 267 519 537 806 605 375 605 985 538 131 272 921 264 090 2 122 0 539 133 Fair values of financial instruments that are not the same as the carrying Interest rate sensitivity analysis amounts are detailed in note 31.1. Refer to Annexure A.
32. SHARE BASED PAYMENTS Share options are granted to senior management based on the year’s service to the company and the employment grade. The share trust is not active as the last shares were granted in 2000. The Group elected the exemption previously under IFRS 1, paragraph 25(B) not to apply IFRS 2 on share based payments for equity instruments that were granted on or before 7 November 2002. List Trust Company (Proprietary) Limited, the ultimate holding company, manages and consolidates the trust in their financial statements. The trust effectively closed down during the prior year and the loan to the trust was repaid. Notes to the Annual Financial Statements...
33. DIVISIONAL REPORTING
The Chief Operating Decision Maker reviews the financial results of the Group as a whole. Therefore the Group, in terms of IFRS 8, ANNEXURE A only has one segment. Further divisional information has been provided as additional information. SECURED INTEREST-BEARING, LOANS AND BORROWINGS Information about these divisions is presented below:
Beer Softs RTD's Other Total 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 EFFECTIVE interest Rate COMPANY GROUP 2013 2012 Maturity 2013 2012 2013 2012 N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's % % date N$ 000's N$ 000's N$ 000's N$ 000's
Division revenue 2 044 668 1 870 923 108 586 76 161 220 199 199 355 9 931 13 628 2 383 384 2 160 067 PREFERENCE SHARE CAPITAL Division expenses (1 593 105) (1 491 063) ( 103 593) (73 412) ( 186 557) (163 646) (40) (2 931) (1 883 295) (1 731 052) Authorised Division results 451 563 379 860 4 993 2 749 33 642 35 709 9 891 10 697 500 089 429 015 1 000 000 Variable rate redeemable preference shares of N$0.50 each 500 500 500 500 Unallocated corporate expenses 0 0 LOANS FROM RELATED PARTIES Fixed rate instruments Operating profit 500 089 429 015 - Northgate Properties (Proprietary) Limited 0.00 No repayment terms 422 125 Finance costs (23 648) (23 233)
100 Finance income 20 392 22 346 101 Equity loss from Less: Current portion included in short-term interest-bearing borrowings (422) (125) Joint Venture (297 091) (92 147) Profit before taxation 199 742 335 981 Long-term portion of loans from related parties 0 0 Taxation (126 797) (114 027) Profit attributable to 72 945 221 954 ordinary shareholders MEDIUM TERM LOAN Variable rate instruments
- ABSA Bank Limited repayable in instalments commencing in January 2014. Secured by a General Notorial Bond over moveable assets to the value of R80 000 000. (Note 14) JIBAR +2.15% 01/06/2014 80 000 80 000 80 000 80 000
- FirstRand Bank Limited repayable in instalments commencing in September 2013 JIBAR +1.85% 01/06/2014 180 000 180 000 180 000 180 000 Less: Current portion included in short-term interest-bearing borrowings (260 000) 0 (260 000) 0
Long-term portion of medium term loans 0 260 000 0 260 000
FINANCE LEASE LIABILITIES Variable rate instruments - Repayable in monthly instalments of N$489 000 (201: N$439 000) 9.75 9.75 15 442 10 162 15 442 10 162
Less: Current portion included in short-term interest-bearing borrowings (6 211) (4 469) (6 211) (4 469)
Long-term portion of finance lease liabilities 9 231 5 693 9 231 5 693
TOTAL NON-CURRENT INTEREST-BEARING BORROWINGS 9 231 265 693 9 231 265 693 Notes to the Annual Financial Statements...
ANNEXURE A ANNEXURE B SECURED INTEREST-BEARING, LOANS AND BORROWINGS (CONT.) PROPERTY, PLANT AND EQUIPMENT
COMPANY GROUP Freehold Leasehold Furniture land and land and Plant and and Returnable Assets under 2013 2012 2013 2012 buildings buildings machinery Vehicles equipment containers construction Total N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's
ANALYSIS OF REPAYMENTS INCLUDING INTEREST GROUP Repayable within: year 1 284 437 5 402 284 437 5 277 2013 year 2 5 433 264 090 5 433 264 090 Cost year 3 3 340 1 807 3 340 1 807 Balance at beginning of the year 135 132 6 027 756 099 52 027 37 471 127 307 124 212 1 238 275 year 4 1 453 315 1 453 315 Additions 8 733 23 64 448 19 029 4 109 41 298 0 137 640 Repayable thereafter 87 0 87 0 Disposals (4 852) 0 (14 156) (8 333) (361) 0 (811) (28 513) 294 750 271 614 294 750 271 489 Other movements 5 141 0 72 439 0 2 261 0 (87 773) (7 932) Balance at end of the year 144 154 6 050 878 830 62 723 43 480 168 605 35 628 1 339 470 102 ANALYSIS BY CURRENCY 103 South Africa Rands 260 000 260 000 260 000 260 000 Accumulated depreciation Namibia Dollars 34 750 11 614 34 750 11 489 Balance at beginning of the year 26 474 2 573 304 296 32 851 22 439 49 879 0 438 512 Depreciation charges 1 607 546 49 992 9 049 4 263 28 571 0 94 028 INTEREST RATE SENSITIVITY ANALYSIS Accumulated depreciation on disposals (508) 0 (13 542) (6 349) (354) 0 0 (20 753) The sensitivity analyses have been determined based on the exposure to interest Balance at end of the year 27 573 3 119 340 746 35 551 26 348 78 450 0 511 787 rates for non-derivative instruments at the reporting date. For variable rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 100 basis point Carrying amount at end of the year 116 581 2 931 538 084 27 172 17 132 90 155 35 628 827 683 increase or decrease represents management's assessment of the reasonably possible change in interest rates. 2012 If interest rates had been 100 basis points higher or lower and all other variables Cost were held constant: Balance at beginning of the year 115 925 6 186 542 301 51 056 35 010 98 651 189 591 1 038 720 Additions 15 737 0 60 235 10 032 2 195 28 656 92 563 209 418 Interest received: Disposals 0 (159) (130) (9 061) (22) 0 (491) (9 863) - profit before tax for the year would decrease/increase by: 4 735 4 009 4 735 3 249 Other movements 3 470 0 153 693 0 288 0 (157 451) 0 - other equity reserves would decrease/increase by: 0 0 0 0 Balance at end of the year 135 132 6 027 756 099 52 027 37 471 127 307 124 212 1 238 275 Interest paid - profit before tax for the year would decrease/increase by: (3 535) (4 749) (3 535) (4 877) Accumulated depreciation - other equity reserves would decrease/increase by: 0 0 0 0 Balance at beginning of the year 31 110 2 162 260 895 31 548 18 535 25 896 0 370 146 Depreciation charges 963 546 42 561 8 285 3 913 23 984 0 80 252 Accumulated depreciation on disposals 0 (135) (73) (6 981) (9) 0 0 (7 198)
Impairment charge/(reversal) (5 600) 0 913 0 0 0 0 (4 687) Other movements 1 0 0 (1) 0 0 0 0 Balance at end of the year 26 474 2 573 304 296 32 851 22 439 49 880 0 438 513
Carrying amount at end of the year 108 658 3 454 451 803 19 176 15 032 77 427 124 212 799 762 Notes to the Annual Financial Statements...
ANNEXURE B ANNEXURE B PROPERTY, PLANT AND EQUIPMENT (CONT.) INTANGIBLE ASSETS 20% 33% 26% 33% Automation Externally Automation Externally processes purchased processes purchased Freehold Leasehold Furniture software software land and land and Plant and and Returnable Assets under licences Total licences Total buildings buildings machinery Vehicles equipment containers construction Total 2013 2013 2013 2012 2012 2012 N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000’s N$ 000's N$ 000's
COMPANY GROUP
2013 Cost Cost Balance at beginning of the year 3 005 6 301 9 306 3 005 2 807 5 812 Balance at beginning of the year 135 132 3 869 756 099 52 027 37 471 127 307 124 212 1 236 117 Additions 79 1 971 2 050 0 3 494 3 494 Additions 8 733 23 64 448 19 029 4 109 41 298 0 137 640 Other movements 7 932 0 7 932 0 0 0 Disposals (4 852) 0 (14 156) (8 333) (361) 0 (811) (28 513) Balance at end of the year 11 016 8 272 19 288 3 005 6 301 9 306 Other movements 5 141 0 72 439 0 2 261 0 (87 773) (7 932) Balance at end of the year 144 154 3 892 878 830 62 723 43 480 168 605 35 628 1 337 312 Accumulated amortisation 104 105 Balance at beginning of the year 1 052 1 818 2 870 451 795 1 246 Accumulated depreciation Amortisation charges 2 191 1 983 4 174 601 1 023 1 624 Balance at beginning of the year 26 474 1 694 304 296 32 851 22 439 49 880 0 437 634 Balance at end of the year 3 243 3 801 7 044 1 052 1 818 2 870 Depreciation charges 1 607 481 49 992 9 049 4 263 28 571 0 93 963 Accumulated depreciation on disposals (508) 0 (13 542) (6 349) (354) 0 0 (20 753) Carrying amount at end of the year 7 773 4 471 12 244 1 953 4 483 6 436 Balance at end of the year 27 573 2 175 340 746 35 551 26 348 78 451 0 510 844
Carrying amount at end of the year 116 581 1 717 538 084 27 172 17 132 90 154 35 628 826 468 COMPANY
2012 Cost Balance at beginning of the year 3 005 6 301 9 306 3 005 2 807 5 812 Cost Additions 79 1 971 2 050 0 3 494 3 494 Balance at beginning of the year 115 925 4 028 542 301 51 056 35 010 98 651 189 591 1 036 562 Other movements 7 932 0 7 932 0 0 0 Additions 15 737 0 60 235 10 032 2 195 28 656 92 563 209 418 Balance at end of the year 11 016 8 272 19 288 3 005 6 301 9 306 Disposals 0 (159) (130) (9 061) (22) 0 (491) (9 863) Other movements 3 470 153 693 0 288 0 (157 451) 0 Balance at end of the year 135 132 3 869 756 099 52 027 37 471 127 307 124 212 1 236 117 Accumulated amortisation Balance at beginning of the year 1 052 1 818 2 870 451 795 1 246 Amortisation charges 2 191 1 983 4 174 601 1 023 1 624 Accumulated depreciation Balance at end of the year 3 243 3 801 7 044 1 052 1 818 2 870 Balance at beginning of the year 31 110 1 348 260 895 31 548 18 535 25 896 0 369 332 Depreciation charges 963 481 42 561 8 285 3 913 23 984 0 80 187 7 773 4 471 12 244 1 953 4 483 6 436 Accumulated depreciation on disposals 0 (135) (73) (6 981) (9) 0 0 (7 198) Carrying amount at end of the year Impairment charge/(reversal) (5 600) 0 913 0 0 0 0 (4 687) Other movements 1 0 0 (1) 0 0 0 0 Balance at end of the year 26 474 1 694 304 296 32 851 22 439 49 880 0 437 634 Amortisation periods are reviewed at the end of each financial year. If the expected useful life of the asset differ from previous estimates, the amortisation period shall be changed accordingly. The amortisation charge is recognised in the operating expenses in the income statement. Carrying amount at end of the year 108 658 2 175 451 803 19 176 15 032 77 427 124 212 798 483
GROUP & COMPANY The carrying amount of motor vehicles held under finance leases at 30 June 2013 was N$14,999,000 (2012 : N$10,033,000). Additions during the year include N$ 5,113,000 (2012: N$7,455,000) of motor vehicles held under finance leases. Notes to the Annual Financial Statements...
ANNEXURE C ANNEXURE D INTEREST IN SUBSIDIARIES DIRECTORS’ EMOLUMENTS Effective Holding Interest of Holding Company 2013 2013 2013 2013 2013 2013 2012 Issued Shares Indebtedness N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's N$ 000's Capital Country of 2013 2012 2013 2012 2013 2012 Directors' Other Pension/ Subsidiary Company Incorporation N$ 000's % % N$ 000's N$ 000's N$ 000's N$ 000's fees Salary Bonuses Benefits Medical Aid Total Total
BEVERAGES Executive directors B Kidner 0 1 386 701 627 384 3 098 2 801 Hansa Brauerei (Proprietary) Limited Namibia 160 100 100 160 160 (160) (160) D van Jaarsveld 0 0 0 0 0 0 669 J Fitzgerald 0 0 0 0 0 0 2 996 Namibia Breweries South Africa South (Proprietary) Limited Africa 0 100 100 0 0 36 199 36 199 H van der Westhuizen 0 1 232 800 1 028 298 3 358 600
Non-executive directors PROPERTY BHW Masche 70 0 0 0 0 70 80 CL List 80 0 0 0 0 80 80 Northgate Properties 106 E Ender 80 0 0 0 0 80 65 107 (Proprietary) Limited Namibia 0 100 100 828 828 (422) (125) G Mahinda 70 0 0 0 0 70 65 HB Gerdes 100 0 0 0 0 100 115 Northgate Exports (Proprietary) Limited Namibia 0 100 100 0 0 0 0 JJ Campbell 0 0 0 0 0 0 41 NB Blazquez 70 0 0 0 0 70 110 Accumulated loan impairment (36 199) (36 199) S Baraz 0 0 0 0 0 0 55 P Grüttemeyer 110 0 0 0 0 110 120 988 988 (582) (285) S Thieme 155 0 0 0 0 155 170 TA de Man 0 0 0 0 0 0 43 Trading activities of Namibia Breweries South Africa (Proprietary) Limited substantially changed in May 2008, which has resulted in the TZ Hijarunguru 0 0 0 0 0 0 100 assessment that the subsidiary might not be able to pay back borrowed monies. Z Mina 0 0 0 0 0 0 83 S Heimstra 60 0 0 0 0 60 92 L van der Borght 50 0 0 0 0 50 50 M Kromat 80 0 0 0 0 80 49 D Leleu 70 0 0 0 0 70 13 L Mcleod-Katjirua 70 0 0 0 0 70 10
Total emoluments 1 065 2 618 1 501 1 655 682 7 521 8 407 Notes to the Annual Financial Statements...
NOTICE TO SHAREHOLDERS PROXY FORM
for the 92nd Annual General Meeting of NAMIBIA BREWERIES LIMITED Registration number 2/1920
Notice is hereby given that the 92nd Annual General Meeting of By order of the Board The Secretaries shareholders of the Company will be held in the auditorium of Ohlthaver and List Centre (Proprietary) Limited Secretaries Namibia Breweries Limited Namibia Breweries Limited, Namibia Breweries premises, Secretaries P0 Box 16, Windhoek, Namibia Iscor Street, Northern Industrial Area, Windhoek on Wednesday Windhoek 4 December 2013 at 09h00 for the following purposes: 23 September 2013 I/We...... (name in full) of...... (address) 1. To receive and consider, and if approved, adopt the Group Shareholders’ Diary being a shareholder of...... (no. of shares) of the above mentioned Company hereby appoint Annual Financial Statements and the Report of the Independent Annual General Meeting: Wednesday, 4 December 2013 at 09:00 (a)...... (name); or failing him/her Auditors for the financial year ended 30 June 2013 as submitted, (b)...... (name); or failing him/her and to confirm all matters and things undertaken and discharged Reports Published (c)...... (name). by the directors on behalf of the Company. Interim Financial Report 15 March 2013 108 109 Abridged Financial Report 19 September 2013 or failing him/her, the chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the 92nd Annual General Meeting of 2. To elect directors Messrs S Thieme, H-B Gerdes, and E Ender Annual Financial Statements 21 October 2012 the Company to be held in the auditorium of Namibia Breweries Limited, Namibia Breweries premises, Iscor Street, Northern Industrial Area, who retire by rotation in accordance with the Company’s Articles Windhoek on Thursday 4 December 2013 at 09h00 and at any adjournment thereof, in particular to vote for/against/abstain* the resolutions of Association but, being eligible, offer themselves for re-election. Dividends Declared Payable contained in the notice of the meeting. Interim 12 April 2013 10 May 2013 3. Confirmation of the appointment of directors subsequent to the Final 17 September 2013 22 November 2013 I/we desire as follows: previous year end: J Milliken and G Mouton. Item Number * For Against Abstain 4. To approve the directors remuneration as set out in the financial 1. Adoption of the annual financial statements report. 2. Re-election of retiring directors
S Thieme 5. To authorise the directors to re-appoint the auditors and to determine the auditors’ remuneration. H-B Gerdes E Ender 6. To place the unissued 92 471 000 ordinary shares of no par 3. Confirm appointment of new directors value of the Company under the control of the directors who shall be authorised to allot all or any of those shares at their discretion J Milliken on such terms and conditions and at such times as they may G Mouton deem fit. 4. Approval of director’s remuneration 5. Authorisation of directors to re-appoint the auditors 7. To confirm the payment of a final dividend of 31.0 cents, which and approve auditors’ remuneration had been approved by the directors, to the holders of ordinary 6. General authority to the directors to allot and issue shares shares, registered in the books of the Company at the close of 7. Confirmation of the final dividend business on 1 November 2013 and payable on 22 November 2013. *Please indicate by inserting an (X’) in the appropriate block either “for/against/abstain”. If no indication is given, the proxy may vote as he/ she deems fit. 8. To transact such other business as may be transacted at an Annual General Meeting. A member entitled to attend and vote Signed at...... this...... day of 2013. Signature(s) of shareholder...... at the meeting is entitled to appoint one or more proxies to attend and vote in his or her stead. A proxy need not also be a member NOTES TO THE PROXY of the Company. In order to be effective, proxy forms should be 1. A member entitled to attend and vote at the aforementioned meeting is entitled to appoint a proxy (who need not be a member of the forwarded to reach the registered office of the Company not less company) to attend, speak and, on a poll, to vote in his/her stead. than 48 hours prior to the time for the holding of the meeting. 2. Shareholders who wish to appoint proxies must lodge their proxy forms at the registered office of the Company not later than 09h00 on Monday 2 December 2013. 3. In respect of shareholders which are companies, an extract of the relevant resolution of directors must be attached to the proxy form. Iscor Street, Northern Industrial Area, Windhoek, Namibia Tel: +264 61 320 4999, Fax: +264 61 263 327
www.namibiabreweries.com Designed by Weathermen & Co.