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    MISSION STATEMENT, VISION AND CORE VALUES

    MISSION

    STATEMENT

    To be the leading beverage

    company in Nigeria, marketing

    high quality brands to deliver

    superior customer satisfaction

    in an environmentally

    friendly way

    “ VISION

    To be a

    World-Class

    Company

    CORE

    VALUES

    Respect;

    Passion for Quality;

    Enjoyment and

    Performance.

    2

    Nigerian Breweries Plc, the pioneer and largest brewing

    Company in Nigeria was incorporated in 1946 as Nigerian

    Brewery Limited. In June 1949, the Company recorded a

    landmark when the first bottle of STAR lager beer rolled off its

    Lagos Brewery bottling lines. This first brewery in Lagos has

    undergone several optimisation processes.

    In 1957, the Company commissioned its second brewery in Aba

    and the name became Nigerian Breweries Limited. This was

    followed by Kaduna Brewery in 1963 and Ibadan Brewery in

    1982. Following the coming into effect of the Companies and

    Allied Matters Act in 1990, the name of the Company was

    changed to Nigerian Breweries Plc to reflect its public limited

    liability status.

    In 1993, the Company acquired its fifth brewery in Enugu and in

    2003, a sixth brewery (Ama Brewery), sited at Amaeke Ngwo in

    Enugu State was commissioned. Ama Brewery remains the

    biggest brewery in Nigeria. Operations in the old Enugu Brewery

    were discontinued in 2004 following the completion of Ama

    Brewery. An ultra-modern malting plant was acquired in Aba in

    2008.

    In October 2011, the Company acquired majority equity interests

    in two companies, Sona Systems Associates Business

    Management Limited (Sona Systems), with two breweries in Ota

    and Kakuri, Kaduna, and Life Breweries Company Limited (Life

    Breweries) with a brewery in Onitsha (now used as a Distribution

    Centre). Another malting plant (located in the Kakuri, Kaduna

    Brewery) was acquired as part of the Sona Systems acquisition.

    Sona Systems and Life Breweries were merged with the

    Company in the middle of 2012. At the end of 2014, an enlarged

    Nigerian Breweries Plc emerged from the merger with

    Consolidated Breweries Plc. Three breweries at Imagbon, near

    Ijebu Ode, Awo-Omamma and Makurdi (now used as a

    Distribution Centre) were added to the existing eight breweries as

    a result of the merger.

    Thus, from a humble beginning in 1946, the Company now has

    nine fully operational breweries from which its high quality

    products are produced and distributed to all parts of Nigeria, in

    addition to the two malting plants in Aba and Kaduna. It also has

    Sales Offices and Distribution Centres across the country.

    Nigerian Breweries Plc has a rich portfolio of high quality brands:

    Star lager beer was launched in 1949, followed by Gulder lager

    beer in 1970. Maltina, the nourishing malt drink, was introduced

    in 1976, followed by Legend Extra Stout in 1992 and Amstel

    Malta in 1994. Heineken lager beer was re-launched into the

    Nigerian market in 1998. Maltina Sip-it, packaged in Tetrapaks

    was launched in 2005, while Fayrouz, the premium nonalcoholic

    soft drink, was launched in 2006. Climax, a herbal

    energy drink was launched in 2010. Following the acquisition of

    Sona Systems and Life Breweries in 2011, Goldberg lager,

    Malta Gold and Life Continental lager, were added to the brand

    portfolio. The Company increased its portfolio of brands in 2014

    COMPANY PROFILE

    with the addition of Ace Passion in addition to two line extensions

    of the Star brand - Star Lite and Star Radler. Also in 2014 as a

    result of the merger with Consolidated Breweries, "33" Export

    lager beer, Williams dark ale, Turbo King dark ale, More lager

    beer and two malt drinks, Maltex and Hi Malt became part of the

    Company's product offering. In 2015, the globally acclaimed

    premium apple cider, Strongbow (Gold Apple) was launched.

    Star Triple X, a further line extension of the Star brand in addition

    to two line extensions of the Ace brand - Ace Roots and Ace

    Rhythm were added to our portfolio in 2015. In 2017, the Ace

    brand was further extended with the launch of Ace Desire, a

    ready-to-drink "Zobo" flavoured alcoholic offering. Also launched

    in 2017, was a premium international brand, Stella lager beer, a

    product with an innovative and unique brewing technique.

    The Company has an export business which dates back to 1986.

    The current export destinations are the United Kingdom, the

    Netherlands, United States of America, other parts of Africa as

    well as part of the Middle East and Asia.

    As a major brewing company, Nigerian Breweries Plc encourages

    and has indeed played major roles in the establishment of

    ancillary businesses. These include the manufacture of bottles,

    cans, crown corks, labels, cartons, plastic crates and service

    providers including those in the hospitality sector, distribution,

    transport, event management, advertising and marketing

    communication.

    The Company was listed on the floor of The

    Nigerian Stock Exchange (NSE) in 1973.

    As at 31st December, 2017, it had a market

    capitalisation of approximately N1.1

    trillion, making it one of the topmost

    companies in Nigeria by market

    capitalization. It has received

    several awards in the capital

    market including, The NSE

    President's Merit Award in the

    Brewery Sector, The NSE

    Quoted Company of the Year

    Award, The NSE CEO's Distinguished

    Award for Compliance,

    and The NSE CEO's award as

    the Most Compliant Listed

    Company on The Nigerian

    Stock Exchange.

    Nigerian Breweries is also a

    recipient of awards and

    recognitions in other areas of its

    operations including product

    quality, marketing excellence,

    c o r p o r a t e g o v e r n a n c e ,

    corporate social responsibility

    and sustainability.

    3


    HEADQUARTERS

    Iganmu House

    Abebe Village Road, Iganmu

    P.O. Box 545, Lagos

    Tel: (01) 2717400-20

    Brewery/Malting Plant Locations

    Lagos Brewery

    Abebe Village Road, Iganmu

    P.O. Box 86, Apapa-Lagos

    Tel: (01) 2717400-20 Ext: 2734

    Ibadan Brewery

    Ibadan/Ife Road

    P.O. Box 12176, Ibadan

    Tel: (01) 2717405

    Kudenda Brewery

    1A, Kudenda Industrial Area

    Plot A4-C2, P.O. Box 6010

    Kaduna South

    Tel: (01) 2717400 Ext: 87101

    Kudenda Malting Plant

    1A, Kudenda Industrial Area,

    Plot A4-C2, P.O. Box 6010

    Kaduna South

    Tel: (01) 2717400 Ext: 87101

    NATIONWIDE PRESENCE

    Aba Brewery

    Industry Road

    P.O. Box 497, Aba

    Tel: (01) 2717403

    Ama Brewery

    Amaeke Ngwo. 9th Mile Corner

    P.M.B. 01781, Enugu

    Tel: (01) 2717407

    Awo-Omamma Brewery

    Km 24, Owerri/Onitsha Road

    Awo-Omamma, Imo State

    Tel: 0807 229 0955-6

    Aba Malting Plant

    Ohuru Village

    Ogbor Hill Industrial

    Obingwa, Aba

    Tel: (01) 2717403

    Kakuri Brewery

    Industrial Layout, Kakuri

    P.M.B. 2116, Kaduna

    Tel: (01) 2717404

    Ota Brewery

    Km 38 Lagos/Abeokuta Expressway

    Sango Ota

    Tel: (01) 271400 Ext: 86101

    Ijebu - Ode Brewery

    Epe Road,

    Imagbon Village, Ogun State

    Tel: 0807 209 1310

    Sales Regions

    Lagos Business Unit

    Headquarters Annex

    Abebe Village Road, Iganmu

    P.O. Box 86, Apapa, Lagos

    Tel: (01) 2717400 Ext: 2816

    West Business Unit

    Km 3, Ibadan-Ife Road

    P.O. Box 813, Ibadan

    Tel: (01) 2717400 Ext: 5807

    Mid-West Business Unit

    42, Ihama Road

    GRA, Benin City

    Tel: (01) 2717400 Ext: 6508

    Central Business Unit

    Plot 413, Idu Industrial Layout

    Abuja, FCT

    Tel: (01) 271400 Ext: 6210

    North Business Unit

    Industrial Layout, Kakuri

    Kaduna

    Tel: (01) 2717400 Ext: 4807

    East Business Unit

    Plot 10, Ebeano Estate

    New Haven

    Enugu

    Tel: (01) 2717400 Ext: 6306

    South Business Unit

    Industry Road

    P.O. Box 496, Aba

    Tel: (01) 2717400 Ext: 3805

    5

    Directors: Chief Kolawole B. Jamodu, CFR - Chairman

    Mr. Jordi Borrut Bel (Spanish) (appointed wef 22/01/18) - Managing Director/CEO

    Mr. Johan A. Doyer (Dutch) (interim 16/06/17 - 21/01/18) - Managing Director/CEO

    Mr. Nicolaas A. Vervelde (Dutch) (resigned wef 16/06/17) - Managing Director/CEO

    Mr. Olusegun S. Adebanji - Non-Executive

    Chief Samuel O. Bolarinde - Non-Executive

    Mr. Hubert I. Eze (resigned wef 31/01/18) - Sales Director

    Mr. Victor Famuyibo (resigned wef 27/01/18) - Human Resource Director

    Mr. Sijbe Hiemstra (Dutch) - Non-Executive

    Mr. Franco M. Maggi (Italian) - Marketing Director

    Dr. Obadiah O. Mailafia - Non Executive

    Mrs. Ndidi O. Nwuneli, MFR - Non-Executive

    Mrs. Ifueko M. Omoigui Okauru, MFR - Non-Executive

    Mr. Atedo N.A. Peterside, CON - Non-Executive

    Mr. Roland Pirmez (Belgian) - Non-Executive

    Mr. Mark P. Rutten (Dutch) - Finance Director

    Mr. Hendrik A. Wymenga (Dutch) - Supply Chain Director

    Company Secretary/Legal Adviser: Uaboi G. Agbebaku, Esq.

    Registered Office: 1, Abebe Village Road

    Iganmu

    P. O. Box 545, Lagos

    Tel: (01) 2717400-20

    www.nbplc.com

    Registration No: RC: 613

    Independent Auditor: Deloitte & Touche (previously known as Akintola Williams Deloitte)

    Civic Towers

    Ozumba Mbadiwe Avenue

    Victoria Island, Lagos

    Tel: (01) 9041700

    www.deloitte.com.ng

    Registrars: First Registrars and Investor Services Limited

    Plot 2, Abebe Village Road

    Iganmu

    P.M.B. 12692, Marina, Lagos

    Tel (01) 2701079; 2799880

    www.firstregistrarsnigeria.com

    DIRECTORS AND OTHER CORPORATE INFORMATION

    6

    2017 2016 % Change

    In millions of Naira

    Revenue 344,563 313,743 9.8

    Results from operating activities 57,126 52,908 8.0

    Profit for the year 33,009 28,397 16.2

    Declared dividend* 28,454 36,474 (22.0)

    Share capital 3,998 3,965 0.8

    Total equity 178,151 165,806 7.4

    Data per 50 kobo share in Kobo

    Earnings 413 358 15.6

    Declared dividend* 358 460 (22.2)

    Net Assets 2,237 2,091 7.0

    Dividend per 50 kobo share in respect of

    current year results only (in kobo)

    Interim dividend declared 100 100 -

    Final dividend proposed** 313 258 21.3

    Stock Exchange Information

    Stock Exchange quotation in Naira per share 134.90 147.99 (8.8)

    Number of shares issued 7,996,902 7,929,100 0.9

    Market capitalisation in N: million 1,078,782 1,173,428 (8.1)

    Number of employees 3,328 3,646 (8.7)

    Ratios

    Declared dividend coverage

    (Earnings per share/declared dividend per share) 1.16 0.78 48.6

    Current assets/current liabilities 0.56 0.52 7.6

    Interest coverage

    Interest coverage

    (Results from operating activities/interest expense) 5.33 3.86 38.0

    COMPANY RESULTS AT A GLANCE

    ST FOR THE YEAR ENDED 31 DECEMBER

    NOTE:

    * Declared dividend represents the final dividend per share proposed for the preceding year (258 kobo) but declared in the current year and the interim dividend

    per share declared during the year (100 kobo).

    **The Directors propose a final dividend of 313 kobo per share (2016: 258 kobo per share) based on the issued share capital of 7,996,902,051 ordinary shares of

    50 kobo each subject to approval by the shareholders at the Annual General Meeting fixed for 20th April, 2018.

    7

    BOARD OF DIRECTORS

    Chief Kolawole B. Jamodu, CFR

    Chairman (Independent Non-Executive Director)

    Chief Jamodu was appointed to the Board of Directors as a Non-

    Executive Director effective the 1st of March, 2006 and became

    the Chairman effective the 1st of January, 2008. He is a chartered

    accountant, an industrialist and a former Minister of Industry of

    the Federal Government of Nigeria. He was re-appointed as

    Chairman of PZ Cussons Nigeria Plc in 2014 after a previous

    stint as Chairman and Group Chief Executive of the PZ Group.

    He is a former Chairman of Universal Trust Bank Plc. He is the

    immediate past President of the Manufacturers' Association of

    Nigeria (MAN) and sits on the Board of United Bank for Africa

    Plc. Chief Jamodu is a member of the Nigerian Industrial Policy

    and Competitiveness Advisory Council chaired by the Vice-

    President of the Federal Republic of Nigeria.

    Mr. Jordi Borrut Bel

    Managing Director/CEO

    Mr. Borrut Bel was appointed a member of the Board of Directors

    and the Managing Director/CEO of the Company effective the

    22nd of January, 2018. He joined the Heineken N.V. group in 1997

    as a Sales Representative at Heineken Spain. He has held

    various commercial positions, first as Distribution Project

    Manager in Slovakia and thereafter as Brand Manager at

    Heineken France followed by a Trade Marketing role at Group

    Commerce in Amsterdam. He returned to Heineken Spain first

    as Regional Sales Director, then On-Premise National Sales

    Director and subsequently On-Premise Sales and Distribution

    Director. Mr. Borrut Bel was, until his appointment to his current

    position in Nigerian Breweries Plc, the Managing Director of

    Brarudi SA, the Heineken Operating Company in Burundi.

    Mr. Olusegun S. Adebanji

    Non-Executive Director

    Mr. Adebanji was re-appointed to the Board of Directors as a

    Non-Executive Director effective 28th February, 2007. He was

    initially on the Board as an Executive Director between 1996 and

    1998 when he was the Company's Finance Director. His career

    path took him through Unilever and Heineken companies in

    Europe and Africa. He was at different times the Managing

    Director of Ghana Breweries Limited and Namibian Breweries

    Limited. Mr. Adebanji is also a Non-Executive Director of Beloxxi

    Industries Limited and the Chairman of Cornerstone Insurance

    Plc.

    Chief Samuel O. Bolarinde

    Independent Non-Executive Director

    Chief Bolarinde was appointed to the Board of Directors as a

    Non-Executive Director effective 11th February, 2015. He rose

    through the ranks to become Managing Director of Vitafoam

    Nigeria Plc and later Chairman of its Board of Directors. He is an

    industrialist and currently sits on the Boards of Toyota Nigeria

    Limited and Sunlink Petroleum Limited. He was a former

    Chairman of Wema Bank Plc as well as a former Non-Executive

    Director of the dissolved Consolidated Breweries Plc.

    BOARD OF DIRECTORS' PROFILE

    Mr. Sijbe (Siep) Hiemstra

    Non-Executive Director

    Mr. Hiemstra joined the Board of Directors effective the 1st of

    August, 2011 after becoming the Heineken Regional President

    for Africa and Middle East, a positon he held until 17th August,

    2015 when he retired from Heineken. He started his Heineken

    career in January 1978 holding commercial, general

    management and technical positions in different parts of

    Europe, Africa and Asia/Pacific.

    Mr. Franco Maria Maggi

    Marketing Director

    Mr. Maggi became a member of the Board of Directors effective

    the 1st of September, 2015. He joined the Heineken N.V. Group in

    2000. He has held finance and marketing positions in Italy, South

    Africa and Mexico. Mr. Maggi was the Northern Mainstream

    Portfolio Director in CM/HEINEKEN México prior to joining the

    Board of Nigerian Breweries Plc.

    Dr. Obadiah O. Mailafia

    Independent Non- Executive Director

    Dr. Mailafia was appointed to the Board of Directors effective the

    5th of December, 2014. Dr. Mailafia is a career economist, banker

    and international development specialist with over 25 years'

    experience. He was an official of the African Development Bank

    Group. He was the Chief of Staff of the 80-member African,

    Caribbean and Pacific (ACP) Group of States based in Brussels,

    Belgium. He has also served the Federal Government of Nigeria

    in different capacities - as a Deputy Governor of the Central

    Bank of Nigeria, as a Special Adviser to the President on

    Economic and Policy Matters and as a Member of the Economic

    Management Team headed by the President of the Federal

    Republic of Nigeria.

    Mrs. Ndidi O. Nwuneli, MFR

    Independent Non-Executive Director

    Mrs. Nwuneli joined the Board of Directors effective the 5th of

    December, 2014. She is the Founder of LEAP Africa, Co-

    Founder of AACE Food Processing & Distribution, an

    indigenous agro-processing company, and a Partner at Sahel

    Capital, an advisory and consulting firm focused on the

    agribusiness and nutrition sectors in West Africa. She has over

    22 years of private sector and international development

    experience and sits on the Boards of Nestle Nigeria Plc, Godrej

    Consumer Products Limited headquartered in India and Fairfax

    Africa Holdings Corp., a financial services company that

    operates out of Canada.

    10

    Mr. Mark P. Rutten

    Finance Director

    Mr. Rutten was appointed to the Board of Directors effective the

    1st of August, 2014. He joined the Heineken N.V. Group in 2000

    and has occupied various finance positions in Europe and Africa.

    Prior to his appointment to the Board, he was the Finance

    Director of Bralima Brewery (the Heineken operating company in

    Democratic Republic of Congo).

    Mr. Hendrik A. Wymenga

    Supply Chain Director

    Mr. Wymenga became a member of the Board of Directors

    effective the 1st of September, 2010. He started his Heineken

    N.V. career in 1994 when he joined the Technological

    Department of Vrumona B.V., a subsidiary of Heineken N.V. He

    has subsequently brought his technical expertise to bear in

    packaging, brewing, production and supply chain within the

    Heineken N.V. Group in Europe, the Caribbean and the

    Americas. Before his current appointment to the Board of

    Directors as the Technical Director, Mr. Wymenga was the

    Regional Supply Chain Manager, Heineken Americas.

    Uaboi G. Agbebaku, Esq.

    Company Secretary/Legal Adviser

    Mr. Agbebaku was appointed as Secretary to the Board of

    Directors effective the 1st of January, 2008. He joined the

    Company in January, 2003 as the Legal Affairs Manager. Before

    then, he was in private practice as a legal practitioner with the

    law firm of David Garrick & Co. He is a Fellow of the Institute of

    Chartered Secretaries & Administrators of Nigeria.

    BOARD OF DIRECTORS' PROFILE (CONT’D)

    Mrs. Ifueko M. Omoigui Okauru, MFR

    Independent Non-Executive Director

    Mrs. Okauru was appointed to the Board of Directors effective

    the 20th of February, 2013.

    She has over three decades of work experience with proven

    leadership ability at board and executive management levels in

    both private and public sectors. She is currently the Managing

    Partner and co-founder of Compliance Professionals Plc, a

    compliance consulting company.

    She serves as Independent Non-Executive Director on the

    Boards of Central Securities Clearing System Plc and Seplat

    Petroleum Development Company Plc; Chairman of the Board

    of Trustees of the Lagos State Employment Trust Fund

    (LSETF); Commissioner of the Independent Commission for the

    Reform of International Corporate Taxation (ICRICT), Chairman

    of the Nigeria Tax Research Network (NTRN) and founding

    member of the Board of Trustees of DAGOMO Foundation

    Nigeria Ltd/GTE. She is also the founder of ReStraL Ltd.,

    owners of the Franklin Covey Franchise in Nigeria, Gambia,

    Ghana, Liberia and Sierra-Leone.

    She was the Executive Chairman of the Federal Inland Revenue

    Service (FIRS) which she led meritoriously for two consecutive

    terms.

    Mr. Atedo N. A. Peterside, CON

    Non-Executive Director

    Mr. Peterside was appointed to the Board of Directors effective

    21st August, 2008. He is the founder of Stanbic IBTC Bank Plc

    and the Chairman of Cadbury Nigeria Plc. He is also the

    Chairman and Founder of ANAP Business Jets Limited. He was

    the Chairman of the Committee that crafted the first Corporate

    Governance Code for Public Companies in Nigeria. Mr.

    Peterside sits on the Boards of Flour Mills of Nigeria Plc,

    Standard Bank Group Limited, The Standard Bank of South

    Africa Limited and Unilever Nigeria Plc and is also the Alternate

    Vice Chairman (Private Sector) of the Nigerian Industrial and

    Competitiveness Advisory Council, which is chaired by the Vice

    President of the Federal Republic of Nigeria.

    Mr. Roland Pirmez

    Non-Executive Director

    Mr. Pirmez joined the Board of Directors effective the 1st of

    September, 2015 shortly after becoming the Heineken Regional

    President for Africa, Middle East and Eastern Europe. He

    started his Heineken career in 1995 and has held general

    management positions within the Heineken N.V. Group in Africa,

    Asia and Europe. He was, until his current position, the Regional

    President for Asia Pacific.

    11


    NOTICE IS HEREBY GIVEN that the 72nd Annual General

    Meeting of Nigerian Breweries Plc will be held in the Shell

    Nigeria Hall, Muson Centre, 8/9 Marina, Onikan, Lagos on

    Friday, 20th April, 2018 at 10.00 a.m. for the following purposes:

    A ORDINARY BUSINESS

    1. To lay before the meeting, the Report of the Directors and

    the Statement of Financial Position as at 31st December

    2017, together with the Income Statement for the year

    ended on that date and the Reports of the Independent

    Auditor and the Audit Committee thereon.

    2. To declare a dividend.

    3. To elect/re-elect Directors including Chief Samuel O.

    Bolarinde, who is over 70 years old, special notice to that

    effect having been received by the Company in

    accordance with Section 256 of the Companies and

    Allied Matters Act, Cap. C20, Laws of the Federation of

    Nigeria, 2004.

    4. To authorise the Directors to fix the remuneration of the

    Independent Auditor.

    5. To elect members of the Audit Committee.

    B. SPECIAL BUSINESS

    6. To fix the remuneration of the Directors.

    7. To consider and if thought fit, pass the following resolution

    as an ordinary resolution of the Company:

    "That the general mandate given to the Company to enter

    into recurrent transactions with related parties for the

    Company's day-to-day operations, including amongst

    others the procurement of goods and services, on normal

    commercial terms be and is hereby renewed."

    Dated the 13th of February, 2018.

    By Order of the Board.

    Uaboi G. Agbebaku, Esq.

    Company Secretary/Legal Adviser

    FRC/2013/NBA/00000001003

    Iganmu House

    Abebe Village Road

    Iganmu, Lagos

    Nigeria

    NOTICE OF ANNUAL GENERAL MEETING

    NOTES:

    (a) PROXIES

    A member of the Company entitled to attend and vote is entitled to

    appoint a proxy to attend instead of him. A proxy for a Corporation

    may vote on a show of hands and on a Poll. A proxy need not be a

    member. A Proxy Form is attached to the Annual Report and

    Accounts. If the Proxy Form is to be valid for the purposes of the

    meeting, it must be completed and deposited at the office of the

    Registrars, First Registrars and Investor Services Limited, Plot 2,

    Abebe Village Road, Iganmu, Lagos not less than forty-eight (48)

    hours prior to the time of the meeting.

    (b) AUDIT COMMITTEE MEMBERS

    In accordance with Section 359(5) of the Companies and Allied

    Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004, a

    shareholder may nominate another shareholder for election as a

    member of the Audit Committee by giving notice in writing of such

    nomination to the Company Secretary/Legal Adviser, not later than

    21 days before the Annual General Meeting.

    (c) DIVIDEND

    A total dividend of N33,027,205,471 (thirty three billion, twenty

    seven million, two hundred and five thousand, four hundred and

    seventy one naira only), that is, N4.13 (four naira thirteen kobo) per

    share for the 2017 financial year, has been recommended by the

    Board for approval. Having earlier paid an interim dividend of N7.9

    billion that is N1.00 per share which was declared in October 2017,

    the final dividend will be N25,030,303,420 (twenty five billion, thirty

    million, three hundred and three thousand, four hundred and twenty

    naira only) that is, N3.13 (three naira thirteen kobo) per share. If

    approved, the final dividend will be payable on Monday, 23rd April,

    2018, to shareholders whose names appear on the Company's

    Register of Members at the close of business on Tuesday, 6th of

    March, 2018.

    (d) CLOSURE OF REGISTER

    The Register of Members and Transfer Books of the Company will

    be closed from Wednesday, 7th March, 2018 to Tuesday, 13th

    March, 2018 (both dates inclusive), for the purpose of preparing an

    up-to-date Register of Members.

    (e) GENERAL MANDATE

    In line with The Nigerian Stock Exchange Rules on Transactions

    with Related Parties, the Company is required to seek a renewal of

    the general mandate from shareholders as per item 7 of the agenda

    above. Members had unanimously given a general mandate to the

    Company at the last Annual General Meeting to enable it enter into

    related party transactions for the Company's day-to-day

    operations.

    (f) SHAREHOLDERS' RIGHT TO ASK QUESTIONS

    Shareholders have a right to ask questions not only at the Annual

    General Meeting, but also in writing prior to the said Meeting. Such

    questions must be submitted to the Company through the Company

    Secretary/Legal Adviser on or before Friday, 6th day of April, 2018.

    13


    CHAIRMAN’S ADDRESS

    CHIEF KOLAWOLE B. JAMODU, CFR

    Chairman (Independent Non-Executive Director)

    15

    My fellow Shareholders, distinguished ladies and gentlemen, it

    is my pleasure to once again welcome you, on behalf of the

    Board of Directors, to another Annual General Meeting ("AGM")

    of our great Company, Nigerian Breweries Plc. This will be the

    72nd AGM, underlying the fact that our Company has come a long

    way. You all should be proud to have contributed to the longevity

    of our Company.

    As it is customary, I would like to first do a quick review of the

    2017 operating environment, touching on its impact on

    businesses and consumers as well as a brief look at the

    expectations for 2018.

    2017 Business/Operating Environment

    The tough 2016 macro-economic environment which

    culminated in the country going into a period of recession,

    continued into the early part of 2017. In the later part of the year

    however, there was a positive upturn in the economy with a

    marginal growth of 0.55% in the second quarter and another

    growth of 1.4% in the third quarter, signalling an exit from

    recession after five consecutive quarters of contractions. The

    turnaround thus presented a positive outlook for the economy

    and a boost for investors' confidence. Improvement in crude oil

    price and production output were major contributors to the

    recovery. Other factors were the improvement in liquidity in the

    foreign exchange market and the commitment of the

    Government to the ease of doing business initiatives. The

    National Bureau of Statistics, reported that $12.2 billion of

    foreign (capital) investment came into the country in 2017, an

    increase of 138% over the $5.4 billion in 2016. The annual GDP

    growth for 2017 was a positive 0.8% compared to the

    contraction of -1.58% in 2016.

    We commend Government for the efforts that led to the

    country's exit from recession. We look forward to the turnaround

    also impacting on welfare especially with regard to lower food

    prices, affordable healthcare, cost of transportation, good

    roads, constant power supply and security of lives and property

    amongst others. Unemployment rate remained high during the

    year and the challenge of workers in the public sector being paid

    as and when due remained. Also and despite the actions taken

    in 2016 to liberalise the downstream sector of the petroleum

    industry which led to an increase of about 70% in the pump price

    of petrol, the issue of constant supply and availability of the

    product in some parts of the country remained.

    For businesses in general and manufacturing in particular, 2017

    was a mixed bag. Access to foreign exchange improved

    considerably. There was relative stability in the exchange rates

    and availability of foreign exchange. The actions of the Central

    Bank of Nigeria including the introduction of the Investors and

    Exporters Window, led to the improvement in liquidity which

    enhanced the capability to import raw materials, boosted

    capacity utilisation and helped in the payment of financial

    commitments to foreign trade partners. On the flip side of the

    coin however, there were high interest rates, dearth of social

    infrastructures including power generation and transmission,

    deplorable roads, multiple taxation and low purchasing power

    leading to high cost of doing business. Congestions in the Lagos

    ports combined with traffic congestion on the access roads to the

    ports were added bottlenecks for businesses with attendant

    consequences of loss of man hours, increased cost of haulage

    and delays in the movement of raw and packaging materials

    across the country. While acknowledging the on-going

    collaboration between Government and the private sector to fix

    the roads, urgent action is required in the short term to ease

    movements in the affected areas, considering the importance of

    the Lagos ports to the entire country.

    Following from the recovery of key macro-economic indicators,

    the market capitalisation of the equities market grew by about

    47% from N9.25 trillion at the end of 2016 to N13.62 trillion at the

    end of 2017. The Nigerian Stock Exchange ("The NSE") ended

    2017 as the best performing exchange in Africa and the third best

    in the world; our Company remained one of the most capitalised

    companies listed on The NSE.

    CHAIRMAN’S ADDRESS (CONT’D)

    16

    The Brewed Product Market in 2017

    The brewed product market was relatively stable in the year,

    notwithstanding the modest growth recorded in the economy. In

    the face of pressure on consumer purchasing power, down

    trading to lower priced brands continued in the year with the new

    Mainstream (former Value-for-Money) segment sustaining its

    growth at the expense of the Premium segment. Aggressive

    competition by way of discounts and promotions characterised

    the market in 2017. With our unrelenting focus on our strategic

    initiatives of Cost Leadership (hinged on a strong central

    backbone with efficient processes), Market Leadership

    (supported by our strong brands), and continuous

    implementation of our innovation agenda, we retained our

    leadership position in the market.

    Review of 2017 Operations

    Being a brand-led and consumer-focused Company, we

    maintained our connection with our consumers through various

    brand and consumer engagement activities. Our flagship brand,

    Star Lager, partnered with the Lagos State Government to

    present the One Lagos Fiesta. A major landmark of the oneweek

    event was the unveiling of the first of its kind, Eyo statue

    made out of more than three thousand creatively stacked Star

    Lager crates, - it was indeed the center of attraction all through

    the fiesta. The brand continued its strong support to local and

    international football. In addition to on the ground activities on

    match days across the country, coaching clinics were ran by

    Arsenal FC coaches for local coaches thereby helping to further

    develop the Nigerian Professional Football League. Two

    leading European football clubs, FC Barcelona and Chelsea

    FC were added to the "Star League", in 2017, joining the

    other clubs already being sponsored - Arsenal FC,

    Juventus FC, Manchester City FC, Paris Saint-

    Germain FC, and Real Madrid CF.

    Our consumer rewarding activities included:

    ● the now classic UEFA Champions League

    Final VIP Experience hosted by Heineken®,

    where consumers and customers enjoyed

    the 2017 UEFA Champions League Final in

    Cardiff, Wales;

    ● the Ultimate Vacation for many lucky Gulder

    consumers who were rewarded with allexpense

    paid Ultimate VIP trip to Dubai; and

    ● a fantastic malt crafting experience for

    consumers of Amstel Malta in the Amstel

    Malta Plant Tour.

    Still on consumers, Maltina, the nourishing No. 1 Malt drink in

    Nigeria, partnered with the world-famous family entertainment

    brand, Nickelodeon, to successfully host the first ever

    Nickelodeon Festival, NickFest, in Nigeria. It turned out to be

    two amazing days of family-centric festival of music, fun and

    entertainment activities for all ages.

    In 2017, the very first Nigerian campaign by Heineken® came to

    life, reaching an estimated audience of twenty million at launch.

    The campaign features Jidenna, a Nigerian-born music star

    making waves in the international entertainment stage. The

    commercial is unique in being the first time such a campaign with

    Nigerian cultural background would be produced by the brand.

    The success of the campaign has seen it being launched in over

    fourteen other countries across the African continent, as a

    testament of the powerful insight behind it.

    As part of our strategic agenda of Market Leadership supported

    by innovation, we launched a new international premium lager

    brand, Stella, into the Nigerian market. Crafted in 1897, by

    Belgian master brewers, Stella is the product of a very

    innovative and unique brewing technique, brewed with natural

    ingredients - the finest malted barley, high quality hops, and the

    best quality water. We also launched Ace Desire, a spirit mixed

    alcoholic drink with that familiar traditional zobo flavor, with

    natural extracts of Hibiscus for a uniquely intense refreshment.

    Our brands have always been avenues of direct and indirect

    empowerment for Nigerians. In 2017, Life Continental lager

    expanded and enhanced the Life for Progress empowerment

    scheme in the Eastern part of the country with two hundred

    young entrepreneurs receiving cash grants for their businesses.

    The brand also berthed a talent discovery and consumer

    engaging programme, Hi-Life Music Fest which

    attracted top Hi-Life artistes including Flavour and

    Bright Chimezie.

    Another of our brands, Goldberg, launched the

    Isedowo Empowerment Scheme in the Western

    part of the country with three hundred artisans

    benefiting (cash grants) from the scheme.

    Goldberg also developed further the Ariya

    Repete programme, to celebrate both fuji and

    juju music. These series of events in the

    Western part of the country, created an avenue

    for young Nigerians to showcase their talents

    as well as helped to promote part of the rich

    Yoruba culture and heritage.

    CHAIRMAN’S ADDRESS (CONT’D)

    17

    Through the second pillar of our strategic agenda, Cost

    Leadership, we recorded substantial savings which contributed

    to the positive results achieved in 2017. We maintained our

    focus on efficiencies, cost optimisation in the organisation and

    elimination of costs that add no value to the consumer. Revenue

    management is another aspect of the Cost Leadership

    programme with focus on revenue per hectolitre and optimising

    investment in commercial activities.

    2017 was another year of awards and recognitions for our

    Company. These included the Performance Earning and

    Returns Leadership (PEARL) Sectoral Leadership award for

    Consumer Goods (Breweries); the Best Contributing Employer

    award of the Industrial Training Fund and the Fair Competition

    and Creativity award of the Consumer Rights Awareness

    Advancement and Advocacy Initiative (Goldberg Lager Beer).

    Others were the Advertisers Association of Nigeria (ADVAN)

    Awards for marketing excellence in the following categories:

    Digital/Social Media Marketing ("33" Export Lager Beer); Brand

    of the Year West Africa (Heineken®); Campaign of the Year

    (Heineken®); and Brand Manager of the Year (Obabiyi Fagade).

    Our investment in capacity building for our people in particular

    and the country in general continued in 2017. Our collaboration

    with the Industrial Training Fund and the Nigeria Employers'

    Consultative Association which started in 2011 produced

    another set of twenty five graduates in 2017. We invested over

    two hundred thousand hours in leadership and functional skills

    training for our people, and also continued with our young

    graduate recruitment/management trainee programme. The

    training facilities in Lagos (Star Academy) and Ibadan (Supply

    Chain Academy) alongside the satellite training centres of the

    Supply Chain Academy across the country, helped us in

    executing our training plans. Our parent company, HEINEKEN

    N.V. again provided an opportunity for our people to occupy

    varied roles in different operating companies across the globe.

    At the end of 2017, we had twenty eight of our Managers, all

    Nigerians, on international assignments in various Heineken

    operations world-wide.

    Similarly and notwithstanding the operating environment, we

    kept investing in our brewery operations and facilities. This was

    to ensure that we kept our operations at the optimum level,

    enabling us to not only produce the high quality brands that we

    are known for and which our consumers deserve, but to also

    ensure that our operations are carried out in the safest, most

    hygienic and environmentally friendly environment. In that

    regard, various projects were completed and commissioned in

    all the Breweries; we had the privilege of having His Excellency,

    the Executive Governor of Ogun State, Senator Ibikunle

    Amosun, CON, FCA, personally commissioning a few of such

    projects in our Ota Brewery.

    For our social intervention activities especially in the areas of

    education, social amenities and service, creative art, community

    development and the environment, please see our Corporate

    Social Responsibility (CSR) report on page 42 of the Annual

    Report and Accounts.

    2017 Company Performance

    Although the brewed product market recorded a near zero

    growth in 2017 and despite the overall tough macro-economic

    operating environment in the year, including double-digit

    inflation rate, the Company was able to record improvement in

    its results.

    Our Turnover rose by 10% from N314 billion in 2016 to N345

    billion in 2017. Results from Operating Activities (Operating

    Profit) went up by 8% from N53 billion in 2016 to N57 billion

    despite higher input cost and the aforementioned inflation rate.

    Combined with a lower Net Finance Cost aided by a reduced

    foreign exchange loss, we ended the year with a Profit After Tax

    of N33 billion, a 16% increase over the N28 billion recorded in

    2016.

    Dividend

    My dear Shareholders, your Board is pleased to recommend for

    your approval at the AGM, the payment of a total dividend of

    N33,027,205,471 (thirty three billion, twenty seven million, two

    hundred and five thousand, four hundred and seventy one naira

    only), that is, N4.13 (four naira thirteen kobo) per ordinary share

    of 50 kobo each for the 2017 financial year. The Board had, in

    October of 2017, approved the payment of an interim dividend of

    N7,996,902,051 (Seven billion, nine hundred and ninety-six

    million, nine hundred and two thousand and fifty-one naira only)

    that is N1.00 per share. The final dividend being proposed

    therefore would be N25,030,303,420 (twenty five billion, thirty

    million, three hundred and three thousand, four hundred and

    twenty naira only) that is, N3.13 (three naira thirteen kobo). If

    approved, the final dividend per share will be subject to the

    deduction of withholding tax at the appropriate rates. Only

    Shareholders who were recorded in the Register of Members as

    at close of business on the 6th of March, 2018, would benefit

    from the final dividend which shall be payable on the 23rd of

    April, 2018.

    I would like to use this opportunity to encourage all Shareholders

    to join the e-dividend train. The e-dividend is a complete solution

    to the recurring issue of unclaimed dividends. I commend and

    fully support the sensitisation efforts of the Securities &

    Exchange Commission, The Nigerian Stock Exchange and the

    CHAIRMAN’S ADDRESS (CONT’D)

    18

    Central Securities and Clearing System Plc in this area. For your

    use, an e-dividend form is included in the Annual Report and

    Accounts. Kindly tear it off, complete it and return it to our

    Registrar (First Registrars & Investor Services Limited). The

    form is also available on our website (www.nbplc.com) and that

    of the Registrar (www.firstregistrarsnigeria.com).

    Board of Directors

    Dear Shareholders, there were some changes on the Board of

    Directors after the last AGM. In June 2017, Mr. Nicolaas A.

    Vervelde resigned as a Director and as the Managing

    Director/CEO to enable him take up another appointment in the

    HEINEKEN Group. The Board thereafter appointed Mr. Johan.

    A. Doyer as a Director and the Managing Director/CEO in an

    interim capacity until the 21st of January, 2018. Subsequently,

    Mr. Jordi Borrut Bel was appointed as a Director and the

    substantive Managing Director/CEO effective the 22nd of

    January, 2018. Mr. Borrut Bel will be presented to you at the

    AGM for an approval of his appointment as a Director as

    required by the Companies & Allied Matters Act, Cap. C20, Laws

    of the Federation of Nigeria, 2004. Still on the Board, two of the

    Executive Directors, Messrs Victor Famuyibo and Hubert I. Eze,

    resigned from the Board effective the 27th and the 31st of January,

    2018 respectively. Mr. Famuyibo had attained the mandatory

    retirement age in the Company of 60 years while Mr. Eze, took

    up a higher position outside Nigeria in the HEINEKEN Group.

    The Board and the Company remain grateful to Messrs

    Vervelde, Doyer, Famuyibo and Eze for their individual

    contributions to the growth of the Company during their

    respective tenure on the Board.

    The Directors to retire by rotation as required by the Company's

    Articles of Association and who, being eligible, have offered

    themselves for re-election are Chief Samuel O. Bolarinde, Mr.

    Franco Maria Maggi, Dr. Obadiah O. Mailafia and Mrs. Ndidi N.

    Nwuneli, MFR.

    Looking Ahead: 2018

    Operating Environment

    The Macro-economic environment is expected to be better in

    2018 than the previous year with the fundamentals of the

    economy improving. GDP is projected to grow at between 2%

    and 4%, crude oil price is expected to stabilise at about $50 per

    barrel and the headline inflation is projected to inch further

    downward. To build on the positive indices of 2017, investment

    in social infrastructure remains critical. We therefore look

    forward to an early passage of the 2018 budget as well as its full

    implementation especially in the areas of capital expenditure.

    The ease of doing business initiatives should be sustained

    especially in the areas of friendly tax policies, investment

    policies and multiplicity of exchange rates. We also look forward

    to the clearing of the traffic bottlenecks in and around the Lagos

    ports and roads in that axis. For our Lagos Brewery and

    Headquarters operations especially, this would be a big relief as

    we are directly impacted by the situation.

    Brewed Product Market

    The activities that characterised the market in the later part of

    2017, discounts and promotions, are expected to remain in

    2018. In the face of low disposable income for a great proportion

    of the populace, consumers are expected to seek for more

    affordable brands. Even more aggressive competitive activities

    are therefore expected. Nevertheless, the Board remains

    confident that our Company has the experience, the people, the

    brands and the footprint to deal with whatever challenges that

    the market may bring, thereby continuing to deliver good return

    on investment to our esteemed Shareholders.

    Conclusion

    Let me conclude by expressing my sincere thanks to you, my

    dear Shareholders for your unalloyed trust and confidence in the

    Company, the Board and the Management. Your continuing

    support is well appreciated.

    To our parent company, HEINEKEN N.V., that believed in this

    country in 1946 when it led others to incorporate what is today

    known as Nigerian Breweries Plc, I also say "Thank You" for the

    wonderful and continuing support that has made us one of the

    biggest and the best companies in Nigeria. Thank you also for

    believing in this country.

    My thanks equally go to all our stakeholders, particularly our

    Transporters, Distributors, Customers, Consumers, Suppliers,

    Agencies, Professional Advisers, the Government at both the

    Federal and State levels and our host communities, for their

    support.

    I thank my fellow Board Members, the Management and every

    employee for the performance in 2017. Your individual

    contribution helped to keep us ahead of the pack as the leading

    beverage company in Nigeria. I count on you to sustain and build

    on our successes especially in the face of increasing

    competition.

    Above all, to God be the glory.

    Thank you and God bless you.

    CHIEF KOLAWOLE B. JAMODU, CFR

    Chairman, Board of Directors


    The Directors are pleased to present their annual report together

    with the audited financial statements of the Company for the year

    ended 31st December, 2017.

    1. Legal Status

    Nigerian Breweries Plc, a public company quoted on The

    Nigerian Stock Exchange, was incorporated on the 16th of

    November, 1946, under the name, Nigerian Brewery

    Limited. The name was changed on the 7th of January, 1957,

    to Nigerian Breweries Limited and thereafter to Nigerian

    Breweries Plc in 1990 when the Companies and Allied

    Matters Act of that year came into effect. The Company is a

    subsidiary of Heineken N.V. of the Netherlands, which held

    approximately 56% interest in the equity of Nigerian

    Breweries Plc as at 31st December, 2017.

    2. Principal Activities

    During the year under review, the principal activities of the

    Company remained brewing, marketing and selling of lager,

    stout, non-alcoholic malt drinks and soft drinks.

    3. Progress Trust (CPFA) Limited

    Progress Trust (CPFA) Limited was incorporated by the

    Company and is a duly registered Closed Pension Fund

    Administrator whose sole activity is the administration of the

    pension and the defined contribution gratuity scheme for

    both employees and former employees of Nigerian

    Breweries Plc. See Note 16 to the financial statements.

    DIRECTORS' REPORT

    ST FOR THE YEAR ENDED 31 DECEMBER, 2017

    MR. JORDI BORRUT BEL

    Managing Director/CEO

    4. The Nigerian Breweries-Felix Ohiwerei Education Trust Fund

    The Nigerian Breweries-Felix Ohiwerei Education Trust Fund was incorporated by the Company and is a sponsored charitable

    Trust. The proceeds from its investments are disbursed solely for the promotion of education. See Note 34c to the financial

    statements

    5. Benue Bottling Company Limited

    Following the merger with Consolidated Breweries Plc, the enlarged Company acquired an 89.3% majority equity interest in

    Benue Bottling Company Limited (BBCL). The subsidiary, BBCL, is an entity with no business activities that holds land, buildings

    and some idle production assets. The financial position of the subsidiary has been consolidated in these financial statements.

    6. Review of Operations

    Although the Nigerian economy officially exited recession in the second quarter of 2017, the aftershocks continued throughout the

    year. Whilst the foreign exchange situation improved in the course of the year, double digit inflation continued to impact both

    businesses and consumers. Nevertheless, the Company was able to end the year with improved results through continuous focus

    and execution of the twin agenda of Cost Leadership and Market Leadership supported by Innovation.

    2017 2016

    N'000 N'000 % Change

    Revenue 344,562,517 313,743,147 9.8

    Results From Operating Activities 57,126,310 52,908,411 8.0

    Profit Before Taxation 46,572,313 39,622,914 17.5

    Taxation (13,563,021) (11,226,137) 20.8

    Profit after Tax 33,009,292 28,396,777 16.2

    20

    7. Dividend

    The Directors are pleased to recommend to Shareholders at the forthcoming Annual General Meeting, the declaration of a total

    dividend of N33,027,205,471 (thirty three billion, twenty seven million, two hundred and five thousand, four hundred and seventy

    one naira only), that is, N4.13 (four naira thirteen kobo) per ordinary share of fifty kobo each. The Company had earlier paid an

    interim dividend of N7,996,902,051 (Seven billion, nine hundred and ninety-six million, nine hundred and two thousand and fiftyone

    naira only) that is, N1.00 (one naira only). Thus, the final dividend will be N25,030,303,420 (twenty five billion, thirty million,

    three hundred and three thousand, four hundred and twenty naira only) that is, N3.13 per share. If the proposed final dividend is

    approved, it will be subject to deduction of withholding tax at the appropriate rate and the dividend will become payable on the 23rd

    of April, 2018, to all Shareholders whose names appear on the Company's Register of Members at the close of business on the 6th

    of March, 2018.

    8. Shareholding and Substantial Shareholders

    The issued and fully paid-up Share Capital of the Company as at 31st December, 2017 was 7,996,902,051 Ordinary Shares of 50

    kobo each. The Register of Members shows that three companies: Heineken Brouwerijen B.V. holding 37.76%, Distilled Trading

    International B.V. holding 15.47% and Stanbic Nominees Nigeria Limited holding 13.28% held more than 10% of the Company's

    issued share capital as at the said date. The remaining 33.49% of the issued shares were held by other individuals and institutions.

    Aside the aforementioned three companies, no other shareholder held more than 5% of the issued share capital of the Company

    as at 31st December, 2017. Heineken Brouwerijen B.V. and Distilled Trading International B.V. are part of the Heineken N.V. Group.

    9. Distributors

    The Company delivers most of its products nationwide through an extensive network of key distributors, wholesalers, bulk

    breakers and major retail stores. The names of the major customers are listed on page 124 of this Annual Report and Accounts.

    10. Board of Directors

    The composition of the Board of Directors is as shown on page 8 hereof. The Board is at present made up of nine (9) Non-Executive

    Directors (including the Chairman) and four (4) Executive Directors.

    There were changes on the Board since after the last Annual General Meeting. Following his picking up another appointment in the

    Heineken Group outside Nigeria, Mr. Nicolaas A. Vervelde resigned from the Board and as the Managing Director/CEO effective

    16th of June, 2017. Mr. Johan A. Doyer was subsequently appointed to the Board and as the interim Managing Director/CEO

    effective the 16th of June, 2017 and on completion of his short term assignment, Mr. Johan A. Doyer resigned from the Board

    effective the 21st of January, 2018. Consequently, Mr. Jordi Borrut Bel was appointed to the Board and as the substantive Managing

    Director/CEO of the Company effective the 22nd of January, 2018.

    Other changes were the resignations of Messrs. Victor Famuyibo (effective 27th January, 2018) and Mr. Hubert I. Eze (effective 31st

    January, 2018), the Human Resource Director and Sales Director respectively. While Mr. Famuyibo's resignation followed his

    attaining the mandatory retirement age in the Company, Mr. Eze's resignation was to enable him pick up a higher appointment in

    the Heineken Group outside Nigeria. On behalf of Shareholders, the Board thanked Messrs. Vervelde, Doyer, Famuyibo and Eze

    for their individual contributions to the growth of the Company during their tenures as members of the Board.

    The Directors to retire by rotation at the forthcoming Annual General Meeting in conformity with the Articles of Association, and who,

    being eligible, have offered themselves for re-election at the meeting are Chief Samuel O. Bolarinde, Mr. Franco Maria Maggi, Dr.

    Obadiah O. Mailafia and Mrs. Ndidi N. Nwuneli, MFR. With regard to the re-election of Chief Bolarinde, who is over 70 years old,

    special notice to that effect was received from him as required under Section 256 of the Companies and Allied Matters Act, Cap.

    C20, Laws of the Federation of Nigeria, 2004 (hereinafter referred to as "CAMA").

    Also, in line with Section 249(1) and (2) of CAMA, Mr. Borrut Bel will be presented at the forthcoming Annual General Meeting for

    Shareholders' approval of his appointment as a Director.

    11. Statement of Directors' Responsibilities

    The Directors accept responsibility for the preparation of the annual financial statements set out on pages 52 to 115 that give a true

    and fair view in accordance with the International Financial Reporting Standards (IFRS) and in the manner required by CAMA as

    well as the Financial Reporting Council of Nigeria Act, 2011.

    The Directors further accept responsibility for maintaining adequate accounting records as required by the CAMA and for such

    internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material

    misstatement whether due to fraud or error.

    DIRECTORS' REPORT (CONT’D)

    21

    The Directors have made an assessment of the Company's ability to continue as a going concern and have no reason to believe the

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

    12. Record of Directors' Attendance

    Further to the provisions of Section 258(2) of CAMA, the Record of Directors' Attendance at Board Meetings during the year under

    review will be available at the Annual General Meeting for inspection. See also, item 21(a) below.

    13. Directors' Interest in Shares

    The interest of each current Director in the issued share capital of the Company, as recorded in the Register of Members and/or

    notified by the Directors for the purpose of Section 275 of CAMA and disclosed in accordance with Section 342 also of CAMA as

    well as the Listing Rules of The Nigerian Stock Exchange, is as follows:

    Name As at 13th As at 31st As at 31st

    February, 2018 December, 2017 December, 2016

    Chief Kolawole B. Jamodu, CFR 536,704 536,704 486,704

    Mr. Jordi Borrut Bel Nil N.A. N.A.

    Mr. Olusegun S. Adebanji* Nil Nil 200,000

    Chief Samuel O. Bolarinde 711,603 711,603 711,603

    Mr. Sijbe (Siep) Hiemstra Nil Nil Nil

    Mr. Franco M. Maggi Nil Nil Nil

    Dr. Obadiah O. Mailafia Nil Nil Nil

    Mrs. Ndidi O. Nwuneli, MFR Nil Nil Nil

    Mrs. Ifueko M. Omoigui Okauru, MFR 35,992 35,992 35,992

    Mr. Atedo N.A. Peterside, CON** Nil Nil Nil

    Mr. Roland Pirmez Nil Nil Nil

    Mr. Mark P. Rutten Nil Nil Nil

    Mr. Hendrik A. Wymenga Nil Nil Nil

    *Has indirect holding of 305,334 units of the Company's shares via Callisto Investments Limited.

    **Has indirect holding of 10 million units of the Company's shares via The First ANAP Domestic Trust.

    14. Agricultural/raw materials improvements

    The Company, in conjunction with Heineken Supply Chain B.V. of the Netherlands and other Heineken companies, is

    involved in activities aimed at development of new Hybrid Sorghum varieties with the potential of increasing the

    yield/output for sorghum farmers as well as improving the quality of sorghum malt which is a major raw material input

    in our operations. Two high-yielding hybrid sorghum varieties have been developed and registered by the Company;

    the process of commercialisation of these hybrids is on-going. The Company has a subsisting consultancy

    agreement with a Nigerian Professor on the development of sorghum seeds.

    The Company has entered into supply agreements with local cassava starch processors whose activities have

    impacted positively in the communities where they operate. We have an offtake arrangement with a

    multinational company that has huge investment in the sugarcane value chain. This is aimed at replacing

    imported sugar in our recipe with a local substitute.

    15. Property, plant and equipment

    Information relating to changes in property, plant and equipment is given in Note 14 to the Financial Statements.

    DIRECTORS' REPORT (CONT’D)

    22

    16. Gifts and Donations

    In 2017, the Company made gifts and donations amounting to N76,885,994 (2016: N145,972,218) as follows:

    Beneficiary/Project Naira

    Borehole Project for Police College, Jos 5,197,500

    Refurbishment/Equipping of Kudenda Primary Health Centre 5,092,500

    Street light Project for Ameke Road, Umuezeani, Enugu 5,447,736

    Scholarship Scheme for Imagbon Community Indigenes 1,052,500

    Solar Powered Borehole for Alalubosa Community, Ibadan 5,985,000

    Medical Equipment & Drug Donations to Alaka Health Care Center 9,202,925

    Lagos International Poetry Competition 6,000,000

    Don't Drink and Drive Campaign with Federal Road Safety Commission 12,937,100

    Transformer for Ota Brewery Host Community 4,784,325

    Sponsorship of Kaduna State Investment Forum 10,525,000

    Renovation of Nigeria Immigration Services Clinic, Ikoyi 10,661,358

    76,885,994

    In accordance with Section 38(2) of CAMA, the Company did not make any donation or gift to any political party, political

    association or for any political purpose in the course of the year under review.

    17. Employees and Employment

    (a) Employment of Physically-Challenged Persons

    Nigerian Breweries Plc is an equal opportunity employer and does not discriminate on any grounds. Thus, we provide

    employment opportunities to physically-challenged persons. However, this actually goes beyond the need to ensure that

    there is no discrimination against such persons, but driven by a deep conviction that even in disability, there could be

    immense ability. At present, we have nine (9) physically-challenged persons in our employment.

    (b) Employee Involvement and Training

    In today's competitive business landscape, human capability has been found to be a key factor for corporate success. The

    critical challenge towards continuous performance improvement remains the capability and speed of response to changes in

    the business environment through people development. Thus, a drive in the right direction for employees' development is

    imperative for sustainable superior company performance. In Nigerian Breweries Plc, we believe strongly that we must win

    with our people. We must not only enable employees to perform in their day-to-day jobs, but must unlock their potentials and

    make it possible for them to unleash energy to achieve business goals.

    Continuous training and upgrading of skills at all levels of the Company is therefore the key to achieving a meaningful

    competitive advantage and long-term business success.

    We provide our employees both operational and leadership training within and outside Nigeria to expose them to best

    practices and improve knowledge transfer at international level.

    (c) Health, Safety and Welfare

    The Company takes the health, safety and welfare of its employees very seriously, with a strong conviction that a healthy

    workforce will always be highly productive and will deliver superior performances at all times. Consequently, there are on-site

    clinics manned by qualified medical personnel in all our brewery locations that provide primary health care round the clock for

    employees at work. Furthermore, top health care providers have been carefully selected under a managed care scheme to

    look after the health care needs of employees and their dependants. We comply with relevant statutory provisions and

    regulations on health, safety and welfare matters as well as providing the education required to enable compliance by

    employees. As a good corporate citizen, we recognise the threat of HIV/AIDS in sub-Saharan Africa. Hence, as an extension

    of our medical policy, Nigerian Breweries Plc operates a comprehensive workplace HIV/AIDS programme spanning the

    continuum of policy to treatment.

    DIRECTORS' REPORT (CONT’D)

    23

    18. Integrated (QFHSE) Policy Statement

    Nigerian Breweries Plc is a responsible corporate citizen and operating company of Heineken N.V., with a mission to be the

    leading beverage company in Nigeria marketing high brands to deliver superior customer satisfaction in a safe and

    environmentally friendly way. The management of Nigerian Breweries, through an Integrated Management System that meets

    internationally recognised standard for Quality, Food Safety, Environment and Occupational Health and Safety is committed to:

    ● Produce and market high quality beverages that are safe for consumption, consistently meet customer requirements and

    deliver consumer satisfaction.

    ● Protecting the environment and preventing pollution in all areas of our environmental impact.

    ● Preventing injuries and ill health of all our employees and those affected by our operations.

    ● Fulfilling all legal and other compliance obligations for the Integrated Management System.

    ● Continually improving our systems to enhance performance through the use of Total Productive Management and other

    relevant tools.

    19. Business Conduct

    Our business is conducted with integrity and due regard to the legitimate interest of all stakeholders. As part of this, we have

    adopted policies such as Code of Business Conduct, Community Involvement Policy and Environmental Policy which provide

    amongst others for:

    (a) Respect for Law

    Nigerian Breweries Plc ensures that its existence and operations remain within the ambit of all applicable laws. Our

    employees are expected to comply with the laws and regulations of Nigeria.

    (b) Business Integrity

    We believe that corruption is evil in the business environment as it is in the society generally. We maintain appropriate anticorruption

    policies and programmes in our business. Accordingly, Nigerian Breweries Plc does not give or receive, whether

    directly or indirectly, bribes or any other incentive to obtain improper advantages for business or financial gain.

    (c) Corporate Social Responsibility

    As an integral part of the Nigerian society playing varied roles as an employer, supplier, customer, partner, tax payer and

    competitor all at the same time, the Company impacts the society. Where possible, we aim to establish sustainable

    partnerships with our stakeholders within our policy guidelines on community involvement. A Corporate Social Responsibility

    report detailing some of the ways we partnered with our various stakeholders during the year under review is on page 42.

    (d) Environmental Policy

    This policy statement serves to demonstrate our responsibility to the environment and the pursuit of world-class vision in all

    aspects of our operations. We will strive to comply with all current and future environmental laws and regulations, and

    continuously improve the efficiency of our operations to minimise impact on the environment.

    In order to meet this commitment, we are guided by the following regulations:

    i. Strive to comply with relevant State and Federal laws and regulations, and also anticipate signals from the society in

    respect of future legislations;

    ii. Use available technology and knowledge to prevent pollution, or continue to reduce pollution and seek savings in water

    and energy in a cost efficient manner;

    iii. Develop cost effective strategies to ensure that residue/by-products generated in our operations are collected and

    processed in a manner suitable for recycling and/or disposal with the least possible impact on the environment;

    iv. Assess the environmental impacts of new products, processes and major projects before development;

    v. Encourage the necessary awareness among our employees on issues of the environment. This is to engender active

    involvement in maintaining a clean and tidy working environment and to act in an environmentally responsible way;

    vi. Promote environmental sustainability by regular dialogue with our immediate communities and the regulating

    authorities on how to improve on environmental care;

    vii. Publish a bi-annual environmental report.

    DIRECTORS' REPORT (CONT’D)

    24

    20. Conflict of Interests

    Nigerian Breweries Plc recognises and respects the right of its employees to engage in external activities so long as these

    activities do not impair, interfere or conflict with the conscientious performance of their duties and do not involve damage to or

    misuse of the Company's name, trademarks, products, property, reputation, goodwill, confidential information or other resources.

    When an employee is engaged in carrying out a task on behalf of the Company and that employee has a factual or potential private

    interest in the outcome of the task, which is contrary to the best interests of the Company or is substantial enough to affect the

    employee's unbiased judgment, the Company expects the employee to disclose this as appropriate. Failure to comply with this

    policy will have serious career consequences for the employee. Nigerian Breweries Plc maintains policies (for instance, on

    purchasing) that severely reduce the risk of harm to the Company due to a conflict of interest.

    21. Corporate Governance

    Nigerian Breweries Plc adopts a responsible attitude towards corporate governance. The Board is in support of the Securities &

    Exchange Commission's Code of Corporate Governance for Public Companies in Nigeria ("the Code"). The Board will endeavour

    to ensure that the Company is in compliance with the provisions of the Code at all times.

    (a) The Board of Directors

    The Board of Directors is made up of nine (9) Non-Executive Directors, including the Chairman, and four (4) Executive

    Directors. Five (5) of the Non-Executive Directors qualify as Independent Directors. They are Chief Kolawole B. Jamodu,

    CFR; Chief Samuel O. Bolarinde; Dr. Obadiah O. Mailafia; Mrs. Ndidi O. Nwuneli, MFR and Mrs. Ifueko M. Omoigui Okauru,

    MFR. The Board has a formal guideline and process for appointment of persons as Directors.

    The Board is inter alia, responsible for: supervising the conduct of business by Management as well as the general course of

    affairs in the Company; assessing the Company's corporate strategy and general policy; the development of the Company's

    financial position; the Company's risk management and other systems; the Company's organisational structure; and the

    Company's social policy.

    The Board has a formal schedule of meetings each year and met five (5) times in the course of the year under review in line

    with that schedule in addition to a Special Board Meeting. The record of attendance of the current Directors at the meetings is

    set out below:

    15/2/17 3/5/17 15/6/17 27/7/17 25/10/17 8/12/17

    Chief Kolawole B. Jamodu, CFR P P P P P P

    Mr. Nicolaas A. Vervelde P P P NA NA NA

    Mr. Johan A. Doyer NA NA NA P P P

    Mr. Olusegun S. Adebanji P P P A P P

    Chief Samuel O. Bolarinde P P P P P P

    Mr. Hubert I. Eze P P P P P P

    Mr. Victor Famuyibo P P P P P P

    Mr. Sijbe (Siep) Hiemstra P P P A P A

    Mr. Franco M. Maggi P P P P P P

    Dr. Obadiah O. Mailafia P P P P P P

    Mrs. Ndidi O. Nwuneli, MFR P P P P P P

    Mrs. Ifueko M. Omoigui Okauru, MFR P P P A P P

    Mr. Atedo N.A. Peterside, CON P P P P P P

    Mr. Roland Pirmez P P P P P P

    Mr. Mark P. Rutten P P P P P P

    Mr. Hendrik A. Wymenga P P P P P P

    P - Present

    A - Absent with Apology

    NA - Not a member of the Board of Directors as at that date.

    DIRECTORS' REPORT (CONT’D)

    25

    (b) Executive Committee

    The Executive Committee comprises the Executive Directors and other Senior Managers occupying strategic roles in the

    business. It is responsible for agreeing priorities, allocating resources, setting overall corporate targets, agreeing and

    monitoring divisional strategies and plans and has responsibilities for superintending the affairs of the business on a day-today

    basis. It is chaired by the Managing Director/Chief Executive Officer of the Company. The record of the Committee's

    meeting during the year under review is set out below.

    Name Role No. of Meetings No. Attended

    Mr. Nicolaas A. Vervelde Managing Director/CEO 11* 8

    Mr. Johan A. Doyer Managing Director/CEO 11** 10

    Mr. Hubert I. Eze Sales Director 21 19

    Mr. Victor Famuyibo Human Resource Director 18* 14

    Mrs. Grace Omo-Lamai Human Resource Director 5** 3

    Mr. Franco M. Maggi Marketing Director 21 21

    Mr. Mark P. Rutten Finance Director 21 20

    Mr. Hendrik A. Wymenga Supply Chain Director 21 17

    Mr. Kufre U. Ekanem Corporate Affairs Adviser 21 18

    Mr. Henk van Rooijen Director of Logistics 11* 10

    Uaboi G. Agbebaku, Esq. Company Secretary/Legal Adviser 21 17

    * While he was a member of the Committee

    **After he/she became a member of the Committee

    (c) Nomination Committee

    The composition of the Nomination Committee in the year under review was as follows:

    i. Mr. Sijbe (Siep) Hiemstra - Chairman

    ii. Mrs. Ndidi O. Nwuneli, MFR - Member

    iii. Mr. Victor Famuyibo - Member

    The Committee met twice (02/05/17 and 22/11/2017) in the course of the year under review and all members were present.

    This Committee is responsible for, amongst others, making recommendations to the Board on

    candidates for appointment as Directors based on the guidelines set by the Board.

    (d) Remuneration Committee

    The Remuneration Committee in the year under review was composed as follows:

    i. Mr. Atedo N.A. Peterside, CON - Chairman

    ii. Mr. Sijbe (Siep) Hiemstra - Member

    iii. Mr. Victor Famuyibo - Member

    The Committee met twice (02/05/17 and 25/10/17) in the course of the year under review and all

    members were present.

    This Committee's responsibilities include determining and reviewing remuneration packages for

    Directors.

    DIRECTORS' REPORT (CONT’D)

    26

    (e) Audit Committee

    The Audit Committee is composed of three Shareholders' representatives and three Directors' representatives. See page 45

    for details on members of the Committee.

    The record of attendance at the Committee's meetings during the year is as follows:

    15/02/17 02/05/17 25/10/17 06/12/17

    Chief Timothy A. Adesiyan P P A P

    Mr. Olusegun S. Adebanji P P P P

    Dr. Obadiah O. Mailafia P A P P

    Mazi Samuel C. Mpamaugo P P P P

    Mr. David O. Oguntoye P P P P

    Mr. Roland Pirmez P P P P

    P - Present

    A - Absent with Apology

    The Committee, as part of its functions, reviews the Company's overall control systems, financial reporting arrangements

    and standards of business conduct. Members of the Audit Committee have direct access to the Process & Control

    Improvement Department (responsible for internal audit functions) and the Independent Auditor.

    The statutory functions of the Committee are provided for in Section 359(6) of CAMA.

    (f) Risk Management Committee

    This Committee has as its main objective, to oversee the Company's risk management process and to inform/advise the

    Executive Committee, the Board and (where necessary), the Audit Committee about the Company's main risks and

    mitigating actions. The Committee is responsible for assessing the adequacy and effectiveness of the Company's

    management of the risk and compliance function of the Company.

    The composition of the Committee in the year under review was as follows:

    ii. Mr. Roland Pirmez - Chairman

    ii. Mr. Olusegun S. Adebanji - Member

    iii. Mrs. Ifueko M. Omoigui Okauru, MFR - Member

    The Committee met twice (02/05/17 and 08 /12/17) during the year and all members were present.

    Members of the Executive Committee as well as the Head of Process & Control Improvement (responsible for internal audit),

    attend the meetings of the Risk Management Committee.

    (g) Board Evaluation

    A Board evaluation was carried out during the year under review. The outcome of the evaluation showed that The Board was

    satisfied with the various roles it played in the course of the year that provided the support to Management in executing the

    plans for the year. Directors were also satisfied with the steps taken by the Board to undertake a review of the Board's

    Governance process with a view to becoming more effective and improving on its role in providing strategic direction for the

    Company.

    At individual levels, Directors were satisfied with their individual contributions to the Board and equally acknowledged areas

    for improvement.

    (h) Regulations for Dealing in Shares

    Nigerian Breweries Plc has in place Regulations to guide the Board and other employees when effecting transactions in the

    Company's shares. The Company's Regulations for Dealing in Shares and other Securities provide amongst others, the

    periods when transactions are not allowed to be effected on the Company's shares as well as disclosure requirements when

    effecting such transactions. All concerned are obliged to observe the provisions of the Regulations when dealing in the

    Company's shares.

    DIRECTORS' REPORT (CONT’D)

    27

    (i) Complaints Management Policy

    Nigerian Breweries Plc has in place a Complaints Management Policy ("the Policy") in accordance with the requirements of

    the Securities and Exchange Commission. The Policy sets out the broad framework for handling shareholder complaints in a

    fair, impartial, efficient and timely manner. The Policy can be accessed via the Company's website.

    (j) Communication Policy

    Nigerian Breweries Plc has in place a Communication Policy ("the Policy") in accordance with the requirements of the

    Securities and Exchange Commission.

    The Board recognises the need to communicate and disseminate information regarding the operations and management of

    the Company to all relevant stakeholders (including Shareholders, regulatory authorities, media, analysts and the general

    public).

    22. Independent Auditor

    The firm of Deloitte & Touche (previously known as Akintola Williams Deloitte) served as the Independent Auditor during the year

    under review.

    In accordance with Section 357(2) of CAMA, Deloitte & Touche have indicated their willingness to continue in office as

    Independent Auditor to the Company.

    Dated the 13th day of February, 2018.

    By Order of the Board.

    Uaboi G. Agbebaku, Esq.

    Company Secretary/Legal Adviser

    FRC/2013/NBA/00000001003

    Iganmu House

    Abebe Village Road

    Iganmu, Lagos, Nigeria.

    DIRECTORS' REPORT (CONT’D)

    28




    NB/FRSC 'DON'T DRINK AND DRIVE'

    CAMPAIGN HOLDS IN ABUJA










    In Nigerian Breweries Plc, our corporate social

    responsibility and sustainability programme is driven

    through our Brewing a Better World (BaBW) agenda. This

    programme has six focus areas: protecting water

    resources, reducing carbon emission, sourcing

    sustainably, advocating responsible consumption,

    promoting health and safety and growing with

    communities.

    In 2017, we made further progress in our adoption of

    cleaner fuel technology by increasing the number of our

    breweries utilizing natural gas for heating purposes from 5

    to 7 breweries. We also completed a project to utilize

    biogas generated from our waste water treatment plants

    for heating. These improvements further reduced our

    carbon emissions and the environmental impact of our

    breweries. Our combined energy consumption declined by

    3% when compared to 2016, while our energy

    consumption for heating processes reduced by 5%.

    We are committed to achieving 60% local sourcing of our

    raw materials by 2020. We invested in a Sorghum/

    Cassava and locally grown sugar value chain with all three

    agricultural raw materials successfully incorporated into

    some of our recipes. Local Sourcing, warehousing and

    logistic challenges impacted our momentum in 2017;

    despite this, we attained 50.2% agricultural raw material

    input in our production processes. The local sourcing of

    our packaging materials is already above 90%.

    We remain on track in our commitment to continually

    advocate for responsible consumption of alcohol and

    responsible marketing communication campaigns. 10% of

    our Heineken marketing budget was committed to

    responsible consumption initiatives. We sustained our

    "Don't Drink and Drive" partnership with the Federal Road

    Safety Commission. In 2017, three mega city rallies were

    held in Lagos, FCT Abuja and Enugu to drum support for

    the Don't Drink and Drive campaign impacting over 2000

    CORPORATE SOCIAL RESPONSIBILITY

    AND SUSTAINABILITY REPORT

    NOURISHMENT

    IN EVERY SIP

    drivers. This makes a total of 40 cities and over 16,000

    drivers who have been engaged since inception of the

    campaign in 2008.

    Our commitment to the health, well-being and safety of our

    employees remains a top priority in our corporate agenda.

    In 2017, all our employees were trained on life saving

    rules.

    In our bid to grow with our communities we sustained our

    educational sector intervention programmes through The

    Nigerian Breweries - Felix Ohiwerei Education Trust Fund.

    In 2017, forty two blocks of furnished classrooms, twenty

    three toilets and four libraries were completed and

    commissioned. Other initiatives executed through the fund

    are the Maltina Teacher of the Year initiative which

    celebrates professionalism of our teachers and the

    Beyond-the-School programme, a career guidance

    initiative for secondary school students in Lagos.

    Through the support of the Heineken Africa Foundation,

    HAF, we donated Neo Natal equipment to the Pediatrics

    Unit of the Lagos University Teaching Hospital, LUTH, and

    also commissioned, an ultra-modern X-Ray machine at St.

    Gerard's Hospital, Kaduna.

    As we strive towards building a world-class business, our

    commitment to Winning with Nigeria is further

    strengthened through our corporate social responsibility

    and sustainability programmes. We remain dedicated to

    our goal of continuous improvement of the environmental

    impact of our business and the role of our Company in

    society.

    CORPORATE SOCIAL RESPONSIBILITY

    AND SUSTAINABILITY REPORT (CONT’D)


    TO THE MEMBERS OF NIGERIAN BREWERIES PLC

    In accordance with the provisions of section 359(6) of the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria,

    2004, the Members of the Audit Committee of Nigerian Breweries Plc having carried out our statutory functions under the Act, hereby

    report that:

    a) the accounting and reporting policies of the Company are in accordance with legal requirements and agreed ethical practices;

    b) the scope and planning of both the external and internal audit for the year ended 31st December, 2017 are satisfactory. The internal

    audit programmes reinforce the Company's internal control system;

    c) having reviewed the Independent Auditor's memorandum of recommendations on accounting procedures and internal controls,

    we are satisfied with management responses thereon.

    Finally, we acknowledge the co-operation of management and staff in the conduct of our duties.

    Members of the Audit Committee are:

    1) Chief Timothy A. Adesiyan (Shareholders' Representative) - Chairman

    2) Mr. Olusegun S. Adebanji (Directors' Representative) - Member

    3) Dr. Obadiah O. Mailafia (Directors' Representative) - Member

    4) Mazi Samuel C. Mpamaugo (Shareholders' Representative) - Member

    5) Mr. David O. Oguntoye (Shareholders' Representative) - Member

    6) Mr. Roland Pirmez (Directors' Representative) - Member

    The Company Secretary/Legal Adviser served as the Secretary to the Committee.

    Dated the 13th day of February, 2018

    Chief Timothy A. Adesiyan

    FRC/2013/IODN/00000003745

    AUDIT COMMITTEE'S REPORT

    CHIEF TIMOTHY A. ADESIYAN

    MR. OLUSEGUN S. ADEBANJI

    DR. OBADIAH O. MAILAFIA

    MAZI SAMUEL C. MPAMAUGO

    MR. DAVID O. OGUNTOYE

    MR. ROLAND PIRMEZ

    45


    Delo tte

    INDEPENDENT AUDITOR'S REPORT

    To the Shareholders of Nigerian Breweries Plc

    Report on the Audit of the Financial Statements

    Opinion

    We have audited the consolidated and separate financial statements of Nigerian Breweries Plc ("the company") and its subsidiary

    (together referred to as "the Group"),which comprise the consolidated and separate statement of financial position as at 31 December

    2017, and the consolidated and separate statement of profit or loss and other comprehensive income, the statement of changes in equity

    and the consolidated statement of cash flows for the year then ended, and the notes to the consolidated and separate financial

    statements, including a summary of significant accounting policies.

    In our opinion, the consolidated and separate financial statements give a true and fair view of the consolidated and separate financial

    position of Nigerian Breweries Plc as at 31 December 2017 and of its consolidated and separate financial performance and cash flows for

    the year then ended in accordance with the International Financial Reporting Standards ("IFRS"), the Companies and Allied Matters Act

    CAP C20 LFN 2004 and the Financial Reporting Council of Nigeria Act, 2011.

    Basis for Opinion

    We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are

    further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of

    the Group and Company in accordance with the Institute of Chartered Accountants of Nigeria Professional Code of Conduct and Guide

    for Accountants, (ICAN code) and other independence requirements applicable to performing audits of financial statements in Nigeria.

    We have fulfilled our other ethical requirements applicable to performing audits in Nigeria. The ICAN code is consistent with the

    International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Part A and B. We believe that the

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

    Key audit matters

    Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and

    separate financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial

    statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit

    matters below relate to the audit of the consolidated financial statements.

    Key Audit Matter How the matter was addressed in the audit

    Makurdi brewery operation scale down

    The Company resolved to scale down the operations of Makurdi

    Plant to Sales and Logistics Centre in March 2017. The assets at

    the brewery were assessed for redundancy and impairment loss

    was recognized. Management performed a preliminary

    assessment with the assumption that 70% of the assets are

    transferable and can be used at other breweries, and accelerated

    depreciation was applied on the remaining 30% unusable assets.

    Judgement is required by the Directors in assessing both the

    carrying amount and the usability of the assets in other breweries.

    Accordingly, for the purposes of our audit, we identified the

    impairment assessment assets in Makurdi Brewery as key audit

    matter.

    In evaluating the appropriateness of the assessments made by

    Management in arriving at the conclusion that 70% of the assets

    are usable in other breweries, while 30% unusable assets were

    subjected to accelerated depreciation, we performed the

    following review:

    ● We obtained and evaluated Management's assumptions

    for and considerations in determining the actual assets

    that are usable at other breweries and those that should

    be impaired.

    ● Tested the reasonableness of management assumptions

    and considered whether the assumptions are consistent

    with the applicable standards.

    ● We carried out an asset verification exercise to validate

    management assumptions on assets that are useable and

    transferable to other brewery locations

    Our substantive testing did not reveal any material

    misstatements and overall we concluded that the directors had

    factored in all the relevant variables required to determine the

    estimate.

    47

    Returnable packaging - valuation of deposit liability

    Included in the Trade and other payables disclosed in Note 29 to

    the Financial Statements is customers' deposit liability in respect

    of returnable packaging materials (RPM) amounting to N23b.

    The Company provides returnable packaging materials to its

    customers for which in most instances the Company collects

    deposit. The deposit is in turn refunded to the customer upon

    returning of the packaging material to the company.

    Judgement is required by the Directors in assessing the value of

    the outstanding customers' deposit liability. Accordingly, for the

    purposes of our audit, we identified the assessment of

    outstanding customers' liability for returnable packaging

    materials as key audit matter.

    The assumptions with the most significant impact in the

    assessment of outstanding liability for returnable packaging were:

    ● The market loss rate, which is subjective since it is based on the

    directors' experience and expectations in addition to lack of

    readily available market data. The market loss rates are

    estimated for bottle/crate sizes

    ● The cycle times of RPM, i.e. the time it takes for RPM to be

    returned to the entity which is based on the directors' estimates

    as RPMs are not tagged and are interchangeable which makes

    the calculation of the RPM cycle times to be subjective and

    complex.

    In evaluating the value of the outstanding deposit liability our

    procedures incorporated a combination of test of the company's

    controls relating to the estimation of the deposit liability and the

    following substantive procedures:

    ● Testing the inputs (mainly market loss rates and cycle times)

    into the valuation computation in comparison to the company's

    policy in respect of the returnable packaging material.

    ● Performing a retrospective assessment of the prior year

    computations to assess the reasonableness of the

    assumptions and estimates in light of new information

    discovered in the current year.

    ● Recomputation of the expected liability

    ● Performing sensitivity analysis on the market loss rates and

    the cycle times to evaluate the impact on the year-end

    liabilities and eliminate elements of bias in the director's

    assessment.

    The market loss rates and the cycle times used in the valuation

    were found to be appropriate. The rates used appeared to be

    reasonable in line with the supporting information provided.

    Overall, no material misstatement was noted.

    Goodwill - management assessment of recoverability

    Goodwill represents 22% of the balance sheet total and 47% of

    total equity. Procedures over management's annual impairment

    test were significant to our audit because the assessment

    process is complex and the test relies on estimates and

    assumptions. Goodwill is allocated to Cash Generating Units

    (CGUs) and groups of CGUs. The Company uses assumptions in

    respect of future market and economic conditions such as

    economic growth, expected inflation rates, demographic

    developments, expected market share, revenue and margin

    development.

    In evaluating the impairment of goodwill, we assessed and tested

    the assumptions, the discount rates, methodologies and data

    used by the Company, for example by comparing them to external

    data such as expected inflation rates, external market growth

    expectations and by analysing sensitivities in the Company's

    valuation model. We included valuation specialists in our team to

    assist us in these audit activities. We specifically focused on the

    sensitivity in the available headroom of CGUs and whether a

    reasonably possible change in assumptions could cause the

    carrying amount to exceed its recoverable amount. We also

    assessed the historical accuracy of management's estimates.

    We assessed the adequacy of the Company's disclosure in note

    15 of the financial statements about those assumptions to which

    the outcome of the impairment test is most sensitive. No material

    misstatement was noted.

    Other Information

    The directors are responsible for the other information. The other information comprises the Directors' Report and Audit Committee's

    Report as required by Companies and Allied Matters Act CAP C20 LFN 2004, which we obtained prior to the date of this auditor's report

    and the integrated report, which is expected to be made available to us after that date. The other information does not include the

    consolidated and separate financial statements and our auditor's report thereon.

    Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form

    of assurance conclusion thereon.

    INDEPENDENT AUDITOR'S REPORT (CONT’D)

    Delo tte

    48

    In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and,

    in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in

    the audit, or otherwise appears to be materially misstated.

    Based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, if we conclude

    that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

    Responsibilities of the directors for the Consolidated and Separate Financial Statements

    The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in

    accordance with International Financial Reporting Standards, Companies and Allied Matters Act CAP C20 LFN 2004 and the Financial

    Reporting Council of Nigeria Act, 2011 and for such internal control as the directors determine is necessary to enable the preparation of

    consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

    In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group's and the

    Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern

    basis of accounting unless the directors either intend to liquidate the Group or Company and / or to cease operations, or have no realistic

    alternative but to do so.

    Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements

    Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free

    from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable

    assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a

    material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

    aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and

    separate financial statements.

    As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the

    audit. We also:

    ● Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or

    error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to

    provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting

    from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

    ● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

    circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Company's internal

    control.

    ● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

    made by the directors.

    ● Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence

    obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and

    Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention

    in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to

    modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future

    events or conditions may cause the Group and / or the Company to cease to continue as a going concern.

    ● Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and

    whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair

    presentation.

    ● Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to

    express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of

    the group audit. We remain solely responsible for our audit opinion.

    Delo tte

    INDEPENDENT AUDITOR'S REPORT (CONT’D)

    49

    We communicated with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant

    audit findings, including any significant deficiencies in internal control that we identify during our audit.

    We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence,

    and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and

    where applicable, related safeguards.

    From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the

    consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's

    report unless law or regulation precludes public disclosure

    about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because

    the adverse consequences of doing so would reasonably be expected to outweigh the benefits derivable by the public from such

    communication.

    Report on Other Legal and Regulatory Requirements

    In accordance with the Sixth Schedule of Companies and Allied Matters Act CAP C20 LFN 2004 we expressly state that:

    i) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of

    our audit.

    ii) The Group and Company has kept proper books of account, so far as appears from our examination of those books.

    iii) The Group's and Company's financial position and its statement of profit or loss and other comprehensive income are in agreement

    with the books of account and returns.

    Michael Osinloye FCA-FRC/2013/ICAN/00000000819

    For: Deloitte & Touche,

    Chartered Accountants

    Lagos, Nigeria

    February 2018

    Delo tte

    INDEPENDENT AUDITOR'S REPORT (CONT’D)

    50


    ASSETS Notes Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Property, plant and equipment 14(a-b) 195,230,394 195,050,394 191,181,700 190,996,700

    Intangible assets and goodwill 15 98,277,166 98,277,166 99,477,826 99,477,826

    Investments 16 150,000 829,625 150,000 829,625

    Other receivables 17 551,862 551,862 623,331 623,331

    Prepayments 18 525,831 525,831 1,154,399 1,154,399

    Non-current assets 294,735,253 295,234,878 292,587,256 293,081,881

    Inventories 19 42,728,862 42,728,862 31,244,703 31,244,703

    Trade and other receivables 20 20,384,112 20,384,112 19,974,024 19,974,024

    Prepayments 18 1,038,885 1,038,885 301,169 301,169

    Deposit for imports 21 7,474,027 7,474,027 8,429,048 8,429,048

    Cash and bank 22 15,866,954 15,865,776 12,156,432 12,155,254

    Assets held for sale 14g - - 2,453,836 2,453,836

    Current assets 87,492,840 87,491,662 74,559,212 74,558,034

    Total assets 382,228,093 382,726,540 367,146,468 367,639,915

    EQUITY

    Share capital 23b 3,998,451 3,998,451 3,964,551 3,964,551

    Share premium 73,770,356 73,770,356 64,950,103 64,950,103

    Share based payment reserve 748,450 748,450 571,106 571,106

    Retained earnings 99,692,668 99,633,677 96,343,708 96,319,782

    Equity attributable to owners of the company 178,209,925 178,150,934 165,829,468 165,805,542

    Non-controlling interest 88,502 - 84,300 -

    Total Equity 178,298,427 178,150,934 165,913,768 165,805,542

    LIABILITIES

    Loans and borrowings 25(a) 8,000,000 8,000,000 17,000,000 17,000,000

    Employee benefits 26 13,209,837 13,209,837 10,101,065 10,101,065

    Deferred tax liabilities 28 26,666,864 26,666,864 29,876,508 29,876,508

    Non-current liabilities 47,876,701 47,876,701 56,977,573 56,977,573

    Bank overdraft 22 470,930 470,930 870,611 870,611

    Current tax liabilities 12(c) 19,606,270 19,553,190 19,024,168 18,989,567

    Dividend payable 24(b) 8,028,742 8,028,742 12,676,038 12,676,038

    Trade and other payables 29(a) 127,947,023 128,646,043 111,184,310 111,820,584

    Provisions 32 - - 500,000 500,000

    Current liabilities 156,052,965 156,698,905 144,255,127 144,856,800

    Total liabilities 203,929,666 204,575,606 201,232,700 201,834,373

    Total equity and liabilities 382,228,093 382,726,540 367,146,468 367,639,915

    Approved by the Board of Directors on the 13 February 2018 and signed on its behalf by:

    ) Chief Kolawole B. Jamodu (Chairman) FRC/2013/ICAN/00000001617

    ) Mr. Jordi Borrut Bel (Managing Director/CEO)*

    ) Mr. Mark P. Rutten (Finance Director) FRC/2014/IMULTI/00000009921

    The notes on pages 60 to 115 are an integral part of these financial statements.

    *Mr. Borrut Bel has a waiver from the Financial Reporting Council of Nigeria 'FRCN' to sign the Financial Statements while processing his FRCN registration with the

    Council.

    CONSOLIDATED AND SEPARATE

    STATEMENT OF FINANCIAL POSITION

    AS AT 31 DECEMBER

    52

    Notes Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Revenue 7 344,562,517 344,562,517 313,743,147 313,743,147

    Cost of sales 10c (201,013,357) (201,013,357) (178,218,528) (178,218,528)

    Gross profit 143,549,160 143,549,160 135,524,619 135,524,619

    Other income 8 2,218,588 2,218,588 615,662 615,662

    Marketing and distribution expenses 10c (66,898,905) (66,898,905) (61,312,319) (61,312,319)

    Administrative expenses 10c (21,747,783) (21,742,533) (21,924,801) (21,919,551)

    Results from operating activities 57,121,060 57,126,310 52,903,161 52,908,411

    Finance income 9(a) 172,074 172,074 416,503 416,503

    Finance costs 9(b) (10,663,076) (10,726,071) (13,645,146) (13,702,000)

    Net finance costs (10,491,002) (10,553,997) (13,228,643) (13,285,497)

    Profit before tax 10 46,630,058 46,572,313 39,674,518 39,622,914

    Income tax expense 12(a) (13,581,499) (13,563,021) (11,257,553) (11,226,137)

    Profit after tax 33,048,559 33,009,292 28,416,965 28,396,777

    Profit for the year attributable to:

    Owners of the Company 33,044,357 33,009,292 28,414,805 28,396,777

    Non-controlling interest 4,202 - 2,160 -

    Profit for the year 33,048,559 33,009,292 28,416,965 28,396,777

    Earnings per share

    Basic earnings per share (kobo) 13(a) 413 413 358 358

    Diluted earnings per share (kobo) 13(b) 414 414 358 358

    The notes on pages 60 to 115 are an integral part of these financial statements.

    CONSOLIDATED AND SEPARATE INCOME STATEMENT

    FOR THE YEAR ENDED 31 DECEMBER

    53

    Notes Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Profit for the year 33,048,559 33,009,292 28,416,965 28,396,777

    Actuarial (losses)/gains 26(f) (1,449,678) (1,449,678) 1,304,129 1,304,129

    Other comprehensive income, net of tax (1,449,678) (1,449,678) 1,304,129 1,304,129

    Total comprehensive income for the year 31,598,881 31,559,614 29,721,094 29,700,906

    Total comprehensive income

    for the year attributable to:

    Owners of the Company 31,594,679 31,559,614 29,718,934 29,700,906

    Non-controlling interest 4,202 2,160 -

    Total comprehensive income for the year 31,598,881 31,559,614 29,721,094 29,700,906

    The notes on pages 60 to 115 are an integral part of these financial statements.

    CONSOLIDATED AND SEPARATE STATEMENT OF

    OTHER COMPREHENSIVE INCOME

    FOR THE YEAR ENDED 31 DECEMBER

    54

    Group Notes Share Share Share Retained Total Non- Total

    Capital Premium Based Earnings Controlling Equity

    Payment Interest

    Reserve

    N'000 N'000 N'000 N'000 N'000

    Balance at

    1st January 2017 3,964,551 64,950,103 571,106 96,343,708 165,829,468 84,300 165,913,768

    Profit for the year - - - 33,044,357 33,044,357 4,202 33,048,559

    Other comprehensive

    income for the year - - - (1,449,678) (1,449,678) - (1,449,678)

    Total comprehensive

    income for the year - - - 31,594,679 31,594,679 4,202 31,598,881

    Transaction with owners,

    recorded directly in equity

    Contributions and

    distributions

    Issue of ordinary shares 33,900 8,820,253 - - 8,854,153 - 8,854,153

    Share based

    payment charge 27 - - 436,198 - 436,198 - 436,198

    -

    Share based payment

    recharge - - (258,854) - (258,854) - (258,854)

    Dividends 24(a) - - - (28,453,982) (28,453,982) - (28,453,982)

    Unclaimed dividends

    written back 24(b) - - - 208,263 208,263 - 208,263

    Total contributions

    and distributions 33,900 8,820,253 177,344 (28,245,719) (19,214,222) - (19,214,222)

    Changes in ownership

    interest

    Total transactions with

    owners of the company 33,900 8,820,253 177,344 3,348,960 12,380,457 4,202 12,384,659

    Balance at

    31st December, 2017 3,998,451 73,770,356 748,450 99,692,668 178,209,925 88,502 178,298,427

    The notes on pages 608 to 115 are an integral part of these financial statements

    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    FOR THE YEAR ENDED 31 DECEMBER 2017

    55

    Company Notes Share Share Share Retained Total

    Capital Premium Based Earnings Equity

    Payment

    Reserve

    N'000 N'000 N'000 N'000 N'000

    Balance at 1st January 2017 3,964,551 64,950,103 571,106 96,319,782 165,805,542

    Profit for the year - - - 33,009,292 33,009,292

    Other comprehensive income for the year - - - (1,449,678) (1,449,678)

    Total Comprehensive income for the year - - - 31,559,614 31,559,614

    Transaction with owners, recorded

    directly in equity

    Contributions and distributions 33,900 8,820,253 - - 8,854,153

    Issue of Ordinary shares

    Share based payment charge 27 - - 436,198 - 436,198

    Share based payment recharge - - (258,854) - (258,854)

    Dividends 24(a) (28,453,982) (28,453,982)

    Unclaimed dividends written back 24(b) 208,263 208,263

    Total contributions and distributions 33,900 8,820,253 177,344 (28,245,719) (19,214,222)

    Changes in ownership interest

    Total transactions with owners

    of the company 33,900 8,820,253 177,344 3,313,895 12,345,392

    Balance at 31st December, 2017 3,998,451 73,770,356 748,450 99,633,677 178,150,934

    In 2017 the company issued 67,801,163 ordinary shares as scrip dividend. The price allotted per share was N130.59 which consists of share

    capital of N33,900 (50k per share) and share premium of N8,820,253 (N130.09 per share)

    The notes on pages 60 to 115 are an integral part of these financial statements.

    STATEMENTS OF CHANGES IN EQUITY

    ST FOR THE YEAR ENDED 31 DECEMBER 2017

    56

    Group Notes Share Share Share Retained Total Non- Total

    Capital Premium Based Earnings Controlling Equity

    Payment Interest

    Reserve

    N'000 N'000 N'000 N'000 N'000

    Balance at 1st

    January 2016 3,964,551 64,950,103 365,702 102,959,007 172,239,363 82,140 172,321,503

    Profit for the year - - - 28,414,805 28,414,805 2,160 28,416,965

    Other comprehensive

    income for the year - - - 1,304,129 1,304,129 - 1,304,129

    Total comprehensive

    income for the year - - - 29,718,934 29,718,934 2,160 29,721,094

    Transaction with owners,

    recorded directly in equity

    Contributions and distributions

    Share based payment charge 27 - - 258,298 - 258,298 - 258,298

    -

    Share based payment recharge - - (52,894) - (52,894) - (52,894)

    Dividends 24(a) - - - (36,473,864) (36,473,864) - (36,473,864)

    Unclaimed dividends

    written back 24(b) - - - 139,631 139,631 - 139,631

    Total contributions

    and distributions - - 205,404 (36,334,233) (36,128,829) - (36,128,829)

    Changes in

    ownership interest

    Total transactions with

    owners of the company - - 205,404 (6,615,299) (6,409,895) - (6,407,735)

    Balance at

    31st December, 2016 3,964,551 64,950,103 571,106 96,343,708 165,829,468 84,300 165,913,768

    The notes on pages 60 to 115 are an integral part of these financial statements

    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    FOR THE YEAR ENDED 31 DECEMBER 2016

    57

    Company Notes Share Share Share Retained Total

    Capital Premium Based Earnings Equity

    Payment

    Reserve

    N'000 N'000 N'000 N'000 N'000

    Balance at 1st January 2016 3,964,551 64,950,103 365,702 102,953,109 172,233,465

    Profit for the year - - - 28,396,777 28,396,777

    Other comprehensive

    income for the year - - - 1,304,129 1,304,129

    Total Comprehensive income for the year - - - 29,700,906 29,700,906

    Transaction with owners,

    recorded directly in equity

    Contributions and distributions

    Share based payment charge 27 - - 258,298 - 258,298

    Share based payment recharge - - (52,894) - (52,894)

    Dividends 24(a) (36,473,864) (36,473,864)

    Unclaimed dividends written back 24(b) - - - 139,631 139,631

    Total contributions and distributions - - 205,404 (36,334,233) (36,128,829)

    Changes in ownership interest

    Total transactions with owners

    of the company - - 205,404 (6,633,327) (6,427,923)

    Balance at 31st December, 2016 3,964,551 64,950,103 571,106 96,319,782 165,805,542

    The notes on pages 60 to 115 are an integral part of these financial statements

    STATEMENTS OF CHANGES IN EQUITY

    FOR THE YEAR ENDED 31 DECEMBER 2016

    58

    Notes Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Profit for the year 33,048,559 33,009,292 28,416,965 28,396,777

    Adjustments for:

    Depreciation 14 32,691,135 32,686,134 28,273,009 28,268,009

    Amortization of intangible assets 15 1,435,727 1,435,727 1,468,637 1,468,637

    Finance income 9(a) (172,074) (172,074) (416,503) (416,503)

    Interest expenses 9(c) 4,162,828 4,225,823 3,981,131 4,037,985

    Gratuity, employee benefit and share

    based payment charges 2,797,263 2,797,263 1,775,481 1,775,481

    Gain/(Loss) on sale of property,

    plant and equipment 10(a) 492,949 492,949 (164,486) (164,486)

    Income tax expense 12(a) 13,581,499 13,563,021 11,257,553 11,226,137

    88,037,886 88,038,135 74,591,787 74,592,037

    Changes in:

    Inventories (11,484,159) (11,484,159) (2,835,000) (2,835,000)

    Trade and other receivables (338,619) (338,619) (3,764,198) (3,764,198)

    Prepayments (109,148) (109,148) (59,394) (59,394)

    Trade and other payables 29(b) 27,231,033 27,293,779 35,868,788 35,925,392

    Provisions 32 (500,000) (500,000) 500,000 500,000

    Deposit for imports 955,021 955,021 (6,195,251) (6,195,251)

    Cash generated from operating activities 103,792,014 103,855,009 98,159,732 98,163,586

    Income tax paid 12(c) (15,587,752) (15,587,752) (15,048,868) (15,048,868)

    Gratuity paid 26(a) (718,305) (718,305) (1,004,019) (1,004,019)

    Other long term employee benefits paid 26(b) (604,956) (604,956) (452,562) (452,562)

    Share Based Payment (258,854) (258,854) (52,894) (52,894)

    VAT paid* (14,571,625) (14,571,625) (11,447,266) (11,447,266)

    Net cash from operating activities 72,050,522 72,113,517 70,154,017 70,210,871

    Cash flows from investing activities

    Finance income 9 172,074 172,074 416,503 416,503

    Proceeds from sale of property,

    plant and equipment 106,890 106,890 264,102 264,102

    Acquisition of property, plant and equipment 14(g) (32,121,578) (32,121,578) (19,213,242) (19,213,242)

    Acquisition of intangible assets 15 (222,409) (222,409) (276,331) (276,331)

    Net cash used in investing activities (32,065,023) (32,065,023) (18,808,968) (18,808,968)

    Cash flows from financing activities

    Proceeds from/(Repayment of)

    loans and borrowings 25(a) (9,000,000) (9,000,000) 14,000,000 14,000,000

    Interest paid 9(c) (2,836,435) (2,899,430) (3,893,338) (3,950,192)

    Dividends paid 24(b) (24,038,861) (24,038,861) (36,057,793) (36,057,793)

    Net cash used in financing activities (35,875,296) (35,938,291) (25,951,131) (26,007,985)

    Net increase in cash and cash equivalents 4,110,203 4,110,203 25,393,918 25,393,918

    Cash and cash equivalents at 1st January 11,285,821 11,284,643 (14,108,097) (14,109,275)

    Cash and cash equivalents at 31st December 22 15,396,024 15,394,846 11,285,821 11,284,643

    The notes on pages 60 to 115 are an integral part of these financial statements.

    * Value Added Tax (VAT) paid shown separately above has been adjusted for in deriving the change in trade and other payables.

    CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS

    FOR THE YEAR ENDED 31 DECEMBER

    59

    1. Reporting entity 61

    2. Basis of preparation 61

    3. Significant accounting policies 62

    4. Determination of fair values 73

    5. Exceptional items and amortisation 74

    6. Amendments to IFRS that are mandatorily effective for period beginning 1st January 2017

    for year ending 31st December 2017 74

    7. Revenue 76

    8. Other income 76

    9. Finance income and finance costs 76

    10. Profit before taxation 77

    11. Personnel expenses 79

    12. Taxation 81

    13. Earnings per share 82

    14. Property, plant and equipment 83

    15. Intangible assets and goodwill 88

    16. Investments 89

    17. Other receivables 90

    18. Prepayments 90

    19. Inventories 90

    20. Trade and other receivables 91

    21. Deposit for imports 91

    22. Cash and cash equivalents 91

    23. Share capital 91

    24. Dividends 92

    25. Loans and borrowings 93

    26. Employee benefits 94

    27. Share-based payment 98

    28. Deferred tax liabilities 100

    29. Trade and other payables 101

    30. Financial instruments - financial risk management and fair values 101

    31. Operating leases 110

    32. Provisions 110

    33. Contingencies 110

    34. Related parties 111

    35. Subsequent events 112

    36. Condensed financial data of consolidated entities 113

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS

    60

    1. Reporting entity

    Nigerian Breweries Plc (the 'Company), a public company quoted on The Nigerian Stock Exchange, was incorporated in Nigeria

    on the 16th November 1946, under the name, Nigerian Brewery Limited. The name was changed on the 7th January 1957, to

    Nigerian Breweries Limited and thereafter to Nigerian Breweries Plc in 1990 when the Companies and Allied Matters Act of that

    year came into effect. The Company is a subsidiary of Heineken N.V. of the Netherlands, the latter having approximately 56%

    interest in the equity of Nigerian Breweries Plc. The address of the Company's registered office is 1, Abebe Village Road, Iganmu,

    Lagos. The Company is primarily involved in the brewing, marketing and selling of lager, stout, non-alcoholic drinks and soft

    drinks.

    As a consequence of the merger with Consolidated Breweries Plc in 2014, the group comprises of the Company and its 89.3%

    majority equity interest in Benue Bottling Company Limited (BBCL). The subsidiary, BBCL, is an entity with no business activities

    that holds land, buildings and some idle production assets. The financial position of the subsidiary has been consolidated in these

    financial statements.

    2. Basis of preparation

    The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The

    financial statements were authorized for issue by the Board of Directors on 13th February 2018, and will presented at the Annual

    General Meeting of Shareholders on 20th April 2018.

    (a) Basis of measurement

    The financial statements have been prepared on the historical cost basis except for the following:

    ● Liabilities for equity-settled share-based payment arrangements - stated at fair value

    ● Defined benefit obligations - stated at present value of the obligation

    ● Inventory - stated at lower of cost or net realizable value

    ● The methods used to measure fair values are discussed further in note 4

    (b) Functional and presentation currency

    These financial statements are presented in Naira, which is the Group/Company's functional currency. All financial

    information presented in Naira has been rounded to the nearest thousand unless stated otherwise.

    (c) Use of estimates and judgements

    The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates

    and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income

    and expenses. Actual results may differ from these estimates.

    Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized

    prospectively.

    In particular, information about assumptions and estimation uncertainties and critical judgements in applying accounting

    policies that have the most significant effect on the amounts recognised in the financial statements are described in the

    following notes:

    Note 13 - Intangible assets and goodwill - key assumptions underlying recoverable amount of CGU

    Note 24 - Measurement of defined benefit obligations - key actuarial assumptions

    Note 31 - Contingencies - key assumptions about the likelihood and magnitude of an outflow of resources

    (d) Measurement of fair values

    A number of the Group/Company's accounting policies and disclosures require the determination of fair value, for both

    financial and non-financial assets and liabilities. When applicable, further information about the assumptions made in

    determining fair values is disclosed in the notes specific to that asset or liability. Significant valuation issues are reported to

    the Audit Committee.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    61

    When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair

    values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as

    follows:

    - Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

    - Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly

    (i.e. as prices) or indirectly (i.e. derived from prices).

    - Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

    In some cases, if the inputs used to measure the fair value of an asset or a liability is categorised in different levels of the fair

    value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as

    the lowest level input that is significant to the entire measurement.

    The Group/Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period

    during which the change has occurred. Further information about the assumptions made in measuring fair value is

    included in Financial Instruments - Financial risk management and fair values (note 30).

    3. Significant accounting policies

    The accounting policies set out below have been applied consistently to all periods presented in these financial statements:

    (a) Basis of consolidation

    (i) Business combinations

    The Company measures goodwill as the fair value of the consideration transferred including the recognized

    amount of any non-controlling interest in the acquiree, less the net recognized amount (generally fair value) of the

    identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is

    negative, a bargain purchase gain is recognized immediately in profit or loss.

    The Company elects on a transaction-by-transaction basis whether to measure non-controlling interest at its fair

    value, or at its proportionate share of the recognized amount of the identifiable net assets, at the acquisition date.

    Transaction costs, other than those associated with the issue of debt or equity securities, that the Company incurs

    in connection with a business combination are expensed as incurred.

    The Company has applied IFRS 3 on business combinations involving entities under common control.

    (ii) Acquisitions of non-controlling interests

    Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as

    equity holders; therefore no goodwill is recognized as a result of such transactions.

    (ii) Subsidiaries

    Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has

    rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its

    power over the entity. The financial statements of subsidiaries are included in the financial statements from the

    date that control commences until the date that control ceases. The accounting policies of subsidiaries are

    modified where necessary to align them with the policies adopted by the Company. Separate disclosure is made

    for non-controlling interest.

    (iii) Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group

    transactions, are eliminated. Unrealized gains arising from transactions with equity accounted investees are

    eliminated against the investment to the extent of the Group's interest in the investee. Unrealized losses are

    eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

    (iv) Structured entities

    Structured entities are entities in which the Company is involved and which are designed so that their activities are

    not governed by way of voting rights. The Company either holds an interest, or does not hold an interest but is a

    sponsor. The Company considers itself a sponsor of a structured entity when it facilities the establishment of that

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    62

    structured entity. In assessing whether the Company has power over such entities in which it has an interest, the

    Company considers factors such as the purpose and design of the investee; its practical ability to direct the relevant

    activities of the investee; the nature of its relationship with the investee; and the size of its exposure to the variability

    of returns of the investee.

    For additional disclosures on the Company's involvement in unconsolidated structured entities, see notes 14 and

    32(c).

    (v) Loss of control

    On the loss of control, the Company derecognises the assets and liabilities of the subsidiary, any non-controlling

    interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of

    control is recognized in profit or loss. If the Company retains any interest in the previous subsidiary, then such

    interest is measured at fair value at the date that control is lost. Subsequently that retained interest is accounted for

    as an equity-accounted investee or at cost less impairment losses depending on the level of influence retained.

    (b) Foreign currency transactions

    Transactions denominated in foreign currencies are translated and recorded in Naira at the actual exchange rates as of the

    date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated to the functional

    currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a

    foreign currency are translated to the functional currency at the exchange rate when the fair value was determined.

    Foreign currency differences arising on translation are recognized in profit or loss. Non-monetary items that are measured

    in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

    (c) Financial instruments

    (i) Non-derivative financial assets

    The Group/Company initially recognizes financial assets on the date that they are originated. All other financial

    assets (including assets designated at fair value through profit or loss) where necessary are recognized initially on

    the trade date at which the Group/Company becomes a party to the contractual provisions of the instrument.

    The Group/Company derecognizes a financial asset when the contractual rights to the cash flows from the asset

    expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which

    substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred

    financial assets that is created or retained by the Group/Company is recognized as a separate asset or liability.

    Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,

    and only when, the Group/Company has a legal right to offset the amounts and intends either to settle on a net basis

    or to realize the asset and settle the liability simultaneously.

    The following are classes of non-derivative financial assets: financial assets at fair value through profit or loss,

    loans and receivables and cash and cash equivalents.

    Financial assets at fair value through profit or loss

    A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as

    such upon initial recognition. Financial assets are designated at fair value through profit or loss if the

    Group/Company manages such investments and makes purchase and sale decisions based on their fair value in

    accordance with the Group/Company's documented risk management or investment strategy. Upon initial

    recognition attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value

    through profit or loss are measured at fair value, and changes therein are recognized in profit or loss.

    Loans and receivables

    Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active

    market. Such assets are recognized initially at fair value plus any directly attributable transaction costs.

    Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest

    method, less any impairment losses. Loans and receivables comprise trade and other receivables as well as

    deposit for imports.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    63

    Cash and cash equivalents

    Cash and cash equivalents comprise cash on hand; cash balances with banks and call deposits with original

    maturities of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the

    Group/Company's cash management are included as a component of cash and cash equivalents for the purpose

    of statement of cash flows.

    (ii) Non-derivative financial liabilities

    All financial liabilities (including liabilities designated at fair value through profit or loss) are recognized initially on

    the trade date at which the Group/Company becomes a party to the contractual provisions of the instrument.

    The Group/Company derecognizes a financial liability when its contractual obligations are discharged or cancelled

    or expire.

    Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,

    and only when, the Group/Company has a legal right to offset the amounts and intends either to settle on a net

    basis or to realize the asset and settle the liability simultaneously.

    The Group/Company has the following non-derivative financial liabilities: loans and borrowings, bank overdrafts,

    trade and other payables as well as dividend payable.

    Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs.

    Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective

    interest method.

    (iii) Share capital

    The Company has only one class of shares, ordinary shares. Ordinary shares are classified as equity. When new

    shares are issued, they are recorded in share capital at their par value. The excess of the issue price over the par

    value is recorded in the share premium reserve. The use of the share premium account is governed by S.120(3) of

    CAMA. All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares are

    entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the

    Company.

    Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity,

    net of any tax effects.

    (d) Property, plant and equipment

    (i) Recognition and measurement

    Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated

    impairment losses. The cost of certain items of property, plant and equipment was determined by reference to the

    previous (Nigerian) GAAP revaluation on 30th June 1995 by Knight Frank (Nigeria) - Chartered Surveyors.

    Cost includes expenditure that is directly attributable to the acquisition of the asset. Property, plant and equipment

    under construction are disclosed as capital work-in-progress. The cost of self-constructed asset includes the cost

    of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for

    their intended use including, where applicable, the costs of dismantling and removing the items and restoring the

    site on which they are located and borrowing costs on qualifying assets.

    Purchased software that is integral to the functionality of the related equipment is capitalized as part of the

    equipment.

    When parts of an item of property, plant and equipment have different useful lives, they are accounted for as

    separate items (major components) of property, plant and equipment.

    Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the

    proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized as profit or

    loss in the statement of comprehensive income.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    64

    (ii) Subsequent costs

    Subsequent expenditure is capitalised only it is probable that the future economic benefits associated with the

    expenditure will flow to the Group/Company and its cost can be measured reliably. The costs of the day-to-day

    servicing of property, plant and equipment are recognized in profit or loss as incurred.

    (iii) Depreciation

    Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted

    for cost, less its residual value.

    Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an

    item of property, plant and equipment which reflects the expected pattern of consumption of the future economic

    benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful

    lives unless it is reasonably certain that the Group/Company will obtain ownership by the end of the lease term in

    which case the assets are depreciated over the useful life.

    The estimated useful lives for the current and comparative periods are as follows:

    ● Leasehold Land - Lease period

    ● Buildings and Infrastructure - 15 to 40 years

    ● Plant and Machinery - 5 to 30 years

    ● Motor Vehicles - 5 years

    ● Furniture and Equipment - 3 to 5 years

    ● Returnable Packaging Materials - 7 to 8 years

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

    appropriate.

    Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred to the relevant asset

    category immediately the asset is available for use and depreciated accordingly.

    (e) Intangible assets

    (i) Goodwill

    Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For measurement of

    goodwill at initial recognition, see Note 3a(i).

    Subsequent measurement

    Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the

    carrying amount of goodwill is included in the carrying amount of the investment. Goodwill is not amortized but

    tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be

    impaired.

    (ii) Research and development

    Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge

    and understanding, is recognized in profit or loss as incurred.

    Development activities involve a plan or design for the production of new or substantially improved products and

    processes. Development expenditure is capitalized only if development costs can be measured reliably, the

    product or process is technically and commercially feasible, future economic benefits are probable, and the

    Group/Company intends to and has sufficient resources to complete development and to use or sell the asset. The

    expenditure capitalized includes the cost of materials, direct labour, overhead costs that are directly attributable to

    preparing the asset for its intended use, and borrowing costs on qualifying assets for which the commencement

    date for capitalization is on or after 1st January 2010. Other development expenditure is recognized in profit or loss

    as incurred.

    Capitalized development expenditure is measured at cost less accumulated amortization and accumulated

    impairment losses.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    65

    (iii) Other Intangible assets

    Other intangible assets that are acquired by the Group/Company and have finite useful lives are measured at cost

    less accumulated amortization and accumulated impairment losses.

    The Group/Company's intangible assets with finite useful lives comprise acquired software and a distribution

    network acquired as part of a business combination. The acquired distribution network provides the Company with

    opportunities for increased market penetration.

    (iv) Subsequent expenditure

    Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific

    Intangible asset to which it relates. All other expenditure, including expenditure on internally generated goodwill

    and brands, is recognized in profit or loss as incurred.

    (v) Amortization of Intangible assets other than goodwill

    Amortization is calculated to write off the cost of intangible assets less their estimated residual values using the

    straight-line method over their estimated useful lives, and is recognized in profit or loss. Goodwill is not amortized.

    The estimated useful life for the current and comparative period is as follows:

    Computer software - 3 to 7 years

    Distribution network - 15 years

    Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if

    appropriate.

    (f) Leases

    Determining whether an arrangement contains a lease

    At inception of an arrangement, the Group/Company determines whether the arrangement is or contains a lease and

    performs an assessment of whether:

    (a) fulfilment of the arrangement is dependent on the use of a specific asset or assets; and

    (b) the arrangement conveys a right to use the asset

    At inception or on reassessment of an arrangement that contains a lease, the Group/Company separates

    payments and other consideration required by the arrangement into those for the lease and those for other

    elements on the basis of their relative fair values. If the Group/Company concludes for a finance lease that it is

    impracticable to separate the payments reliably, then an asset and a liability are recognized at an amount equal to

    the fair value of the underlying asset; subsequently, the liability is reduced as payments are made and an imputed

    finance cost on the liability is recognized using the Group/Company's incremental borrowing rate.

    Leased assets

    Leases in terms of which the Group/Company assumes substantially all the risks and rewards of ownership are

    classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower

    of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is

    accounted for in accordance with the accounting policy applicable to that asset.

    Other leases are operating leases and the leased assets are not recognized in the Group/Company's statement of

    financial position.

    Lease payments

    Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the

    lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the

    lease.

    Minimum lease payments made under finance leases are apportioned between the finance expense and the

    reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to

    produce a constant periodic rate of interest on the remaining balance of the liability.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    66

    (g) Inventories

    Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes expenditure

    incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their

    existing location and condition. The basis of costing is as follows:

    Raw materials, non-returnable packaging materials - purchase cost on a weighted average basis including spare parts

    and purchased finished goods transportation and clearing costs.

    Brewed finished products and products-in-process - weighted average cost of direct materials, labour costs and a

    proportion of production overheads based on normal operating

    capacity.

    Inventory-in-transit - purchase cost incurred to date.

    Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs to completion

    and selling expenses

    (h) Assets held for sale

    Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for sale if it is highly

    probable that they will be recovered primarily through sale rather than through continuing use.

    Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to

    sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on

    a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets and employee benefit

    assets which continue to be measured in accordance with the Group/Company's other accounting policies. Impairment

    losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on remeasurement

    are recognised in profit or loss.

    Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or

    depreciated, and any equity-accounted investee is no longer equity accounted.

    (i) Impairment

    (i) Non-derivative financial assets

    A financial asset subsequently measured at amortised cost, is assessed at each reporting date to determine

    whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates

    that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect

    on the estimated future cash flows of that asset that can be reliably estimated.

    Objective evidence that financial assets (including equity securities) are impaired can include default or

    delinquency by a debtor, restructuring of an amount due to the Group/Company on terms that the Group/Company

    would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the disappearance of an

    active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in

    its fair value below its cost is objective evidence of impairment.

    The Group/Company considers evidence of impairment for receivables at both a specific asset and collective level.

    All individually significant receivables are assessed for specific impairment. All individually significant receivables

    found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but

    not yet identified. Receivables that are not individually significant are collectively assessed for impairment by

    grouping together receivables with similar risk characteristics.

    In assessing collective impairment the Group/Company uses historical trends of the probability of default, timing of

    recoveries and the amount of loss incurred, adjusted for management's judgement as to whether current economic

    and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical

    trends.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    67

    An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference

    between its carrying amount and the present value of the estimated future cash flows discounted at the asset's

    original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against

    receivables. Interest on the impaired asset continues to be recognized through the unwinding of the discount.

    When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is

    reversed through profit or loss.

    (ii) Non-financial assets

    The carrying amounts of the Group/Company's non-financial assets, other than inventories are reviewed at each

    reporting date to determine whether there is any indication of impairment. If any such indication exists, then the

    asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that

    are not yet available for use, the recoverable amount is estimated each year at the same time.

    The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less

    costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a

    pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to

    the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into

    the smallest group of assets that generates cash inflows from continuing use that are largely independent of the

    cash inflows of other assets or groups of assets (the "cash-generating unit, or CGU"). For the purposes of goodwill

    impairment testing, goodwill acquired in a business combination is allocated to the CGU, or the group of CGUs, that

    is expected to benefit from the synergies of the combination. This allocation is subject to an operating segment

    ceiling test and reflects the lowest level at which that goodwill is monitored for internal reporting purposes.

    The Group/Company's corporate assets do not generate separate cash inflows. If there is an indication that a

    corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate

    asset belongs.

    An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable

    amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are

    allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying

    amounts of the other assets in the unit (group of units) on a pro rata basis.

    An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized

    in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer

    exists. An impairment loss is reversed if there has been a change in the estimates used to determine the

    recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not

    exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment

    loss had been recognized.

    Goodwill that forms part of the carrying amount of an investment in an associate is not recognized separately, and

    therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is

    tested for impairment as a single asset when there is objective evidence that the investment in an associate may be

    impaired.

    (j) Employee benefits

    (i) Defined contribution plan

    A defined contribution plan is a post-employment benefit plan (pension fund) under which the Group/Company

    pays fixed contributions into a separate entity. The Group/Company has no legal or constructive obligations to pay

    further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to

    employee service in the current and prior periods.

    In line with the provisions of the Pension Reform Act 2014, the Group/Company has instituted a defined contribution

    pension scheme for its permanent staff. Staff contributions to the scheme are funded through payroll deductions

    while the Group/Company's contribution is recognised in profit or loss as employee benefit expense in the periods

    during which services are rendered by employees.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    68

    Employees (non-management and management respectively) contribute 7% and 8% of their Basic salary,

    Transport and Housing Allowances to the Fund on a monthly basis. The Group/Company's contribution is 12% and

    10% of each employee's Basic salary, Transport & Housing Allowances for non-management and management

    employees respectively.

    (ii) Gratuity

    The Group/Company currently operates two gratuity schemes, a defined benefit scheme and a defined contribution

    scheme:

    (a) Defined benefit gratuity scheme

    The Company has a defined benefit gratuity scheme for certain employees. The Company's net obligation in

    respect of defined benefit scheme is calculated by estimating the amount of future benefit that employees

    have earned in return for their service in the current and prior periods and that benefit is discounted to

    determine its present value. In determining the liability for employee benefits under the defined benefit

    scheme, consideration is given to future increases in salary rates and the Company's experience with staff

    turnover.

    The recognized liability is determined by an independent actuarial valuation every year using the projected

    unit credit method. Actuarial gains and losses arising from differences between the actual and expected

    outcome in the valuation of the obligation are recognized fully in Other Comprehensive Income. The effect of

    any curtailment is recognized in full in the profit or loss immediately the curtailment occurs. The discount rate

    is the yield on Federal Government of Nigeria issued bonds that have maturity dates approximating the terms

    of the Company's obligation. Although the scheme is not funded, the Company ensures that adequate

    arrangements are in place to meet its obligations under the scheme.

    (b) Defined contribution gratuity scheme

    The Company has a defined contribution scheme for certain employees which is funded through fixed

    contributions made by the Company over the service life of the employees and charged accordingly as

    employee benefit expense in profit or loss. The funds are managed and administered by Progress Trust

    (CPFA) Limited. Progress Trust (CPFA) Limited is a duly registered closed Pension Fund Administrator

    whose sole activity is the administration of the pension and gratuity (defined benefit contribution) schemes for

    employees and former employees of the Company. Nigerian Breweries Plc has no recourse to the funds,

    which is managed in accordance with the Pension Reform Act of 2014 and regulated by the Pension

    Commission.

    (c) Post-retirement medical benefit scheme

    The Company has a post-employment medical benefits scheme for its pensioners and employees, including

    their spouses.

    The recognized liability is determined by an independent actuarial valuation every year using the projected

    unit credit method. Actuarial gains and losses arising from differences between the actual and expected

    outcome in the valuation of the obligation are recognized fully in Other Comprehensive Income. The effect of

    any curtailment is recognized in full in the profit or loss immediately the curtailment occurs. The discount rate

    is the yield on Federal Government of Nigeria issued bonds that have maturity dates approximating the terms

    of the Company's obligation. Although the scheme is not funded, the Company ensures that adequate

    arrangements are in place to meet its obligations under the scheme.

    (iii) Other long-term employee benefits

    The Company's other long-term employee benefits represents Long Service Awards scheme instituted for all

    permanent employees and post-employment medical benefit for pensioners and employees on the defined benefit

    gratuity scheme including their spouses. The Company's obligations in respect of these schemes are the amount of

    future benefits that employees have earned in return for their service in the current and prior periods. The benefit is

    discounted to determine its present value. The discount rate is the yield at the reporting date on Federal

    Government of Nigeria issued bonds that have maturity dates approximating the term of the Company's obligation.

    The calculation is performed using the Projected Unit Credit method. Any actuarial gains and losses are recognized

    in profit or loss.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    69

    (iv) Termination benefits

    Termination benefits are recognized as an expense when the Company is committed demonstrably, without

    realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal

    retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.

    Termination benefits for voluntary redundancies are recognized as an expense if the Company has made an offer

    of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be

    estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted

    to their present value.

    (v) Short-term employee benefits

    Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related

    service is provided.

    A liability is recognized for the amount expected to be paid under short-term cash bonus if the Company has a

    present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and

    the obligation can be estimated reliably.

    (vi) Share-based payment transactions

    Share-based payment arrangements in which the Company receives goods or services and has no obligation to

    settle the share-based payment transaction are accounted for as equity-settled share-based payment

    transactions. All other share based payment arrangements are accounted for as cash settled. As from 1st January

    2006 Heineken N.V, the parent Company, established a share based payment plan for key management

    personnel, including certain senior management of Nigerian Breweries Plc. The grant date fair value of the share

    rights granted is recognized as personnel expenses with a corresponding increase in equity (Share-based

    payment reserve) as a capital contribution from Heineken N.V, over the period that the employees become

    unconditionally entitled to the share rights.

    A recharge arrangement exists between Heineken N.V and Nigerian Breweries Plc whereby vested shares

    delivered to employees' by Heineken N.V are recharged to Nigerian Breweries Plc. The recharge transaction is

    recognized as an intercompany liability with a corresponding adjustment in equity (Share-based payment reserve)

    for the capital contribution recognized in respect of the share-based payment.

    At each reporting date, the estimate of the number of share rights that are expected to vest is revised for internal

    performance conditions. The impact of the revision of original estimates (only applicable for internal performance

    conditions), if any, is recognized in profit or loss, with a corresponding adjustment to equity. The fair value of the

    share plan is measured at grant date taking into account the terms and conditions of the plan.

    (k) Provisions and contingent liabilities

    Provisions

    A provision is recognized if, as a result of a past event, the Group/Company has a present legal or constructive obligation

    that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the

    obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current

    market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is

    recognized as finance cost.

    A provision for restructuring is recognized when the Group/Company has approved a detailed and formal restructuring

    plan, and the restructuring either has commenced or has been announced publicly. Future operating losses are not

    provided for.

    Contingent liabilities

    A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the

    occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company, or a

    present obligation that arises from past events but is not recognized because it is not probable that an outflow of resources

    embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured

    with sufficient reliability.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    70

    Contingent liabilities are only disclosed and not recognized as liabilities in the statement of financial position.

    If the likelihood of an outflow of resources is remote, the possible obligation is neither a provision nor a contingent liability

    and no disclosure is made.

    Onerous contracts

    A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract

    are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present

    value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract

    and taking into consideration any reasonably obtainable sub-leases for onerous lease contracts. Before a provision is

    established, the Company recognises any impairment loss on the assets associated with that contract.

    (l) Revenue

    Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration

    received or receivable, net of value added tax, excise duties, sales returns, trade discounts and volume rebates. Revenue

    is recognized when persuasive evidence exists that the significant risks and rewards of ownership have been transferred to

    the buyer, recovery of the consideration is probable and there is no continuing management involvement with the goods

    and the amount of revenue can be measured reliably.

    If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognized as a

    reduction of revenue as the sales are recognized.

    (m) Other Income

    Income other than sale of goods is recognised as 'Other Income' when persuasive evidence exists that the significant risks

    and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable and there is no

    continuing management involvement with the goods and the amount of revenue can be measured reliably.

    (n) Finance income and finance costs

    Finance income comprises interest income on funds invested (including available-for-sale financial assets), gains on the

    disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair value through profit or loss.

    Finance income is recognized as it accrues in profit or loss, using the effective interest method.

    Finance costs comprise interest expense on borrowings, unwinding of the discount on employee benefits, changes in the

    fair value of financial assets at fair value through profit or loss and impairment losses recognized on financial assets except

    finance costs that are directly attributable to the acquisition, construction or production of a qualifying asset which are

    capitalized as part of the related assets, are recognized in profit or loss using the effective interest method.

    Foreign currency gains and losses are reported on a net basis.

    (o) Income and deferred tax

    Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss

    except to the extent that it relates to a business combination, or items recognized directly in equity or in other

    comprehensive income.

    Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates statutorily

    enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

    Deferred tax is recognized in profit or loss account except to the extent that it relates to a transaction that is recognized

    directly in equity. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be

    available against which the amount will be utilized. Deferred tax assets are reduced to the extent that it is no longer

    probable that the related tax benefit will be realized.

    Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,

    based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities

    are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes

    levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax

    liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    71

    Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for

    financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following

    temporary differences:

    i. the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither

    accounting nor taxable profit or loss.

    ii. differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that

    they will not reverse in the foreseeable future.

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

    In determining the amount of current and deferred tax, the Group/Company takes into account the impact of uncertain tax

    positions and whether additional taxes and interest maybe due. The assessment relies on estimates and assumptions and

    may involve a series of judgements about future event. New information may become available that causes the company to

    adjust its judgements regarding the adequacy of existing tax liabilities; such changes to the tax liabilities will impact tax

    expenses in the period that such a determination is made.

    (p) Earnings per share (EPS)

    The Group/Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is

    calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average

    number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by

    adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares

    outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

    (q) Segment reporting

    An operating segment is a distinguishable component of the Group/Company that earns revenue and incurs expenditure

    from providing related products or services (business segment), or providing products or services within a particular

    economic environment (geographical segment), and which is subject to risks and returns that are different from those of

    other segments.

    The Group/Company's primary format for segment reporting is based on business segments. The business segments are

    determined by management based on the Group/Company's internal reporting structure.

    All operating segments' operating results are reviewed regularly by the Executive Committee, which is considered to be the

    chief operating decision maker for the Group/Company to make decisions about resources to be allocated to the segment

    and assess its performance, and for which discrete financial information is available.

    Where applicable, Segment results that are reported include items directly attributable to a segment as well as those that

    can be allocated on a reasonable basis.

    (r) Loans and borrowings

    Loans and borrowings are recognized initially at fair value, net of transaction costs incurred. Loans and borrowings are

    subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption

    value is recognized in profit or loss over the period of the borrowings using the effective interest method. Loans and

    borrowings included in a fair value hedge are stated at fair value in respect of the risk being hedged.

    Loans and borrowings, for which the Group/Company has an unconditional right to defer settlement of the liability for at

    least 12 months after the statement of financial position date, are classified as non-current liabilities.

    (s) Statement of cash flows

    The statement of cash flows is prepared using the indirect method. Changes in statement of financial position items that

    have not resulted in cash flows such as translation differences, fair value changes, equity-settled share-based payments

    and other non-cash items have been eliminated for the purpose of preparing the statement. Dividends paid to ordinary

    shareholders are included in financing activities. Interest paid is also included in financing activities while finance income is

    included in investing activities.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    72

    (t) Dividends

    Dividends are recognized as liability in the period they are declared.

    Dividends which remained unclaimed for a period exceeding twelve (12) years from the date of declaration and which are

    no longer actionable by shareholders in accordance with Section 385 of CAMA are written back to retained earnings.

    4a. Determination of fair values

    A number of the Group/Company's accounting policies and disclosures require the determination of fair value, for both financial

    and non-financial assets and liabilities. See note 28 (g) for basis of determination of fair value for financial assets and liabilities.

    When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to

    that asset or liability.

    (i) Trade and other receivables

    The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market

    rate of interest at the reporting date. This fair value is determined for disclosure purposes. For short term trade receivables,

    no disclosure of fair value is presented when the carrying amount is a reasonable approximation of fair value.

    (ii) Share-based payment transactions

    The fair value of the share based payment plan is measured at the grant date taking into account the terms and conditions

    of the plan.

    (iii) Non-derivative financial instruments

    Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and

    interest cash flows, discounted at the market rate of interest at the reporting date.

    4b. Fair value as a result of business combinations

    (i) Property, plant and equipment

    The fair value of property, plant and equipment recognized as a result of a business combination is based on the quoted

    market prices for similar items when available and depreciated replacement cost based on independent valuation when

    appropriate.

    (ii) Intangible assets

    The fair value of the distribution network acquired in a business combination is determined using the multi-period excess

    earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of

    creating the related cash flows.

    The fair value of other intangible assets are based on the discounted cash flows expected to be derived from the use and

    eventual sale of the assets.

    (iii) Inventories

    The fair value of inventories acquired in a business combination is determined based on the estimated selling price in the

    ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the

    effort required to complete and sell the inventories.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    73

    5. Exceptional items and amortisation of acquisition-related intangibles (EIA) in net profit

    The table below provides an overview of the exceptional items and amortisation of acquisition-related intangibles in the Company's

    net profit:

    2017 2016

    N'000 N’000

    Profit attributable to equity holders of the Company (net profit) 33,009,292 28,396,777

    Personnel - Redundancy 2,233,000 1,869,000

    (Gain)/Loss on Sale PP&E 492,949 (164,486)

    Depreciation and Impairment losses 1,941,000 531,000

    Income from Insurance Claim (1,571,331) -

    Amortization Customer Relation 231,000 231,000

    Other (1,462,048) -

    1,864,570 2,466,514

    Profit before EIA 34,873,862 30,863,291

    6. A) Amendments to IFRS that are not mandatorily effective for period beginning 1 January 2017

    A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2017,

    which the Company has not applied in preparing these consolidated financial statements.

    IFRS 9 Financial instruments

    IFRS 9, published in July 2014, replaces existing guidance in IAS 39 Financial Instruments: Recognition and Measurement.

    IFRS 9 includes revised guidance on classification and measurement of financial instruments, including a new expected

    credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. The

    Company will implement IFRS 9 per 1 January 2018 using the modified retrospective approach. The Company has

    investigated the impact of the new classification principles on financial assets in scope. The assets currently classified as

    AFS will be measured at FVTOCI under IFRS 9 which constitutes no significant change, except for the accounting for

    accumulative gains or losses when equity securities measured at FVTOCI are disposed of. These cumulative gains or

    losses will not be reclassified to P&L upon disposal but kept in the fair value reserve. The Company has no investments

    classified as held to maturity. The Company has investigated the impact of the expected loss model on trade receivables

    and both advances and loans to customers and concluded that the impact is immaterial. The impact on The Company's

    future consolidated income statement is also expected to be immaterial as the standard requires provisions to be recorded

    earlier and the initial impact of this timing difference is recorded in equity upon implementation.

    IFRS 15 Revenue from Contracts with Customers

    IFRS 15 'Revenue from Contracts with Customers', published in May 2014, establishes a framework for determining

    whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance and will be

    implemented by the Company per 1 January 2018 by applying the retrospective method (restating all prior periods). Under

    the retrospective method the Company will not apply for practical expedients as within the Company the performance

    obligations are satisfied at a point in time rather than over time and IFRS 15 will not result in measurement differences. The

    Company concluded that IFRS 15 impacts the presentation in profit or loss of 'payments to customers for services

    received', such as payments to customers for marketing support. Most of these marketing support payments are currently

    classified as marketing expenses, but will be considered a reduction of revenue under IFRS 15 if the marketing support

    cannot be separated as a distinct service.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    74

    Furthermore, IFRS 15 requires to assess the accounting for excise taxes based on the principal versus agent principle. The

    Company considers to act as a principal for excise taxes in case the excise tax is levied at production. Based on the

    assessment, it has been concluded that the Company acts as a principal. Revenue will be presented without excise tax

    expense. The excise tax expense will be presented on a separate line below revenue in the consolidated income statement

    and a new subtotal, called 'Net revenue' will be added. This 'Net revenue' subtotal is the sum of 'revenue' as defined in IFRS

    15 (after discounts) and the excise tax expense.

    The IFRS 15 changes as described above will have no impact on operating profit, net profit and EPS.

    If IFRS 15 would have been applicable in 2017, the 2017 figures are estimated to be as follows. As these presented

    restated figures are based on estimates, the actual restated financial information may differ from those expressed in this

    estimated restated financial information:

    For the year ended 31 December 2017 IFRS 15 2017 based on IFRS

    reclassification 15 (estimate)

    (estimates)

    N'000 N'000 N'000

    Revenue 344,562,517 21,235,540 365,798,057

    Excise tax expense - (21,270,841) (21,270,841)

    Net revenue 344,562,517 - 344,527,216

    - - -

    Other Income 2,218,588 - 2,218,588

    Cost of Sales (201,013,357) - (201,013,357)

    Marketing and distribution expenses (66,898,905) 35,301 (66,863,604)

    Administration expenses (21,742,533) - (21,742,533)

    Results from Operating Expenses 57,126,310 - 57,126,310

    Profit before tax 46,572,313 - 46,572,313

    Income tax expenses (13,563,021) - (13,563,021)

    IFRS 16 Leases

    IFRS 16 'Leases', published in January 2016, establishes a revised framework for determining whether a lease is

    recognised on the (Consolidated) Statement of Financial Position. It replaces existing guidance on leases, including IAS

    17. The Company will implement IFRS 16 per 1 January 2019. In 2017, the Company has completed the extraction of

    relevant data-points from lease contracts. These will be used for the impact analysis during the first half-year 2018. The

    operating leases that will be recorded on the Company's balance sheet as a result of IFRS 16 is expected to be mainly

    offices, warehouses, (forklift) trucks, land.

    Other standards and interpretations

    The following new or amended standards are not expected to have a significant impact on the Company's consolidated

    financial statements:

    ● Classification and measurement of Share-based Payments (amendments to IFRS 2)

    ● Foreign Currency Transactions and Advance Consideration (IFRIC 22)

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    75

    6. B) Amendments to IFRS that are mandatorily effective for period beginning 1 January 2016

    The Company has adopted the following new standards and amendments to standards, including any consequential

    amendments to other standards, with a date of initial application of 1 January 2016:

    ● Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

    ● Amendments to IFRS Annual Improvements to IFRS 2010-2012 Cycle and 2011-2013 Cycle

    ● The Company has applied the amendments to IFRS included in the Annual Improvements to IFRS 2010-2012 Cycle

    and 2011-2013 Cycle for the first time in the current year. The application of the amendments has had no significant

    impact on the disclosures or amounts recognised in the Company's financial statements.

    7. Revenue

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Nigeria 344,441,486 344,441,486 313,582,465 313,582,465

    Export 121,031 121,031 160,682 160,682

    344,562,517 344,562,517 313,743,147 313,743,147

    Nigeria is the Group/Company's primary geographical segment as over 99% of the Group/Company's sales are made in Nigeria.

    Additionally, all of the Group/Company's sales comprise of brewed products with similar risks and returns. Accordingly, no further

    business or geographical segment information is reported.

    8. Other Income

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Sale of scrap 597,757 597,757 555,662 555,662

    Management services 49,500 49,500 60,000 60,000

    Income from Insurance Claim 1,571,331 1,571,331 - -

    2,218,588 2,218,588 615,662 615,662

    9. Finance income and finance costs

    (a) Finance income represents interest income earned on bank deposits.

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Interest income on bank deposits 172,074 172,074 416,503 416,503

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    76

    (b) Finance cost represents charges paid on bank loans and overdraft facilities utilised during the year.

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Interest expense on loans and borrowings 4,069,920 4,132,915 3,874,608 3,931,462

    Interest expense on overdraft 92,908 92,908 106,523 106,523

    Unwinding of discount on employee benefits 1,471,342 1,471,342 1,347,539 1,347,539

    Net change in fair value of

    Unrealised Hedge instruments: - - 764,079 764,079

    Net loss on foreign exchange transactions* 5,028,906 5,028,906 7,552,397 7,552,397

    Finance cost 10,663,076 10,726,071 13,645,146 13,702,000

    (c) Interest expense in the statement of cash flows

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Finance cost per income statement 10,663,076 10,726,071 13,645,146 13,702,000

    Unwinding of discount on employee benefits (1,471,342) (1,471,342) (1,347,539) (1,347,539)

    Net change in fair value of derivatives - - (764,079) (764,079)

    Loss on foreign exchange (5,028,906) (5,028,906) (7,552,397) (7,552,397)

    Interest expense per statement of cash flows 4,162,828 4,225,823 3,981,131 4,037,985

    Interest accrual (1,326,393) (1,326,393) (87,793) (87,793)

    Interest paid per statement of cash flows 2,836,435 2,899,430 3,893,338 3,950,192

    10. Profit before taxation

    (a) Profit before taxation is stated after charging/(crediting):

    Notes Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Depreciation of property,

    plant and equipment 14 32,691,135 32,686,134 28,273,009 28,268,009

    Amortization of intangible assets 15 1,435,727 1,435,727 1,468,637 1,468,637

    Auditors' remuneration* 56,534 56,534 49,591 49,591

    Personnel expenses 11 41,640,292 41,640,292 39,031,407 39,031,407

    Directors' remuneration 10(b) 1,386,557 1,386,557 974,719 974,719

    Gain on property, plant and

    equipment disposed 492,949 492,949 (164,486) (164,486)

    Lease rental payments 31 491,582 491,582 415,665 415,665

    Royalty and technical

    assistance fees 34 8,943,880 8,943,880 9,011,650 9,011,650

    * Apart from the statutory fee, Deloitte received N49,421 million (2016: - N43,352 million) for the audit for group reporting

    and N4,000 million (2016: - N3,200 million) quarterly certification of National Office for Technology Acquisition and

    Promotion (NOTAP) related payments.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    77

    (b) Remuneration, excluding certain benefits of directors of the Company, who discharged their duties mainly in Nigeria, is

    as follows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Fees:

    Chairman (non-executive)* 2,540 2,540 2,860 2,860

    Other non-executive directors 13,317 13,317 13,600 13,600

    15,857 15,857 16,460 16,460

    Other emoluments:

    Chairman (non-executive) 3,383 3,383 2,951 2,951

    Other Non-executives directors 24,412 24,412 21,427 21,427

    27,795 27,795 24,378 24,378

    Remuneration as executive directors 1,342,905 1,342,905 933,881 933,881

    1,386,557 1,386,557 974,719 974,719

    The emolument (excluding pension contributions) of the highest paid director was N340,207,345 (2016: N255,808,438).

    The number of other directors (excluding the Chairman and highest paid director) who received emoluments excluding

    were within the following ranges:

    Group Company Group Company

    2017 2017 2016 2016

    Number Number Number Number

    N4,000,001 - N30,000,000 8 8 8 8

    N30,000,001 and above 5 5 5 5

    *Excluding cost for the Chairman's office.

    (c) Analysis of expenses by nature

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Raw materials and consumables 128,857,254 128,857,254 113,604,018 113,604,018

    Advertising and sales promotion 22,438,092 22,438,092 22,371,313 22,371,313

    Depreciation 32,691,135 32,686,134 28,273,009 28,268,009

    Amortization 1,435,727 1,435,727 1,468,637 1,468,637

    Employee benefits (see note 11) 41,640,292 41,640,292 39,031,407 39,031,407

    Transportation 28,255,474 28,255,474 24,097,897 24,097,897

    Repairs and maintenance 15,308,886 15,308,886 13,265,545 13,265,545

    Royalty and technical service fees 8,943,880 8,943,880 9,011,650 9,011,650

    Others 10,089,305 10,089,056 10,332,172 10,331,922

    Total cost of sales, marketing &

    distribution and administration expenses 289,660,045 289,654,795 261,455,648 261,450,398

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    78

    11. Personnel expenses

    (a) Staff costs including the provision for gratuity liabilities and other long term employee benefits:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Salaries, wages and allowance 30,054,342 30,054,342 28,860,900 28,860,900

    Pension and Gratuity 4,530,258 4,530,258 4,518,840 4,518,840

    Expenses related to defined benefit plans 74,457 74,457 150,201 150,201

    Training, recruitment and canteen expenses 2,233,463 2,233,463 1,978,372 1,978,372

    Share based payments expenses 436,198 436,198 258,298 258,298

    Medical expenses 894,892 894,892 733,694 733,694

    Other personnel expenses* 3,416,682 3,416,682 2,531,102 2,531,102

    41,640,292 41,640,292 39,031,407 39,031,407

    * Other personnel expenses regard transportation benefits, cars, uniforms, relocation etc.

    (b) The number of persons employed as at 31st December are:

    Group/Company Group/Company

    2017 2016

    Number Number

    Production 1,626 1,755

    Distribution 203 194

    Commercial 917 1,081

    General administration 582 616

    3,328 3,646

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    79

    (c) Number of employees of the Company as at 31st December, whose duties were wholly or mainly discharged in Nigeria,

    received annual remuneration (excluding pension contributions and certain benefits) in the following ranges:

    Group/Company Group/Company

    2017 2016

    Number Number

    N500,000 and below 16 37

    N500,001 - N600,000 - -

    N600,000 - N700,000 1 -

    N700,001 - N800,000 4 -

    N800,001 - N900,000 - 1

    N900,001 - N1,000,000 1 2

    N1,000,001 - N1,100,000 2 2

    N1,100,001 - N1,200,000 11 33

    N1,200,001 - N1,300,000 - 2

    N1,300,001 - N1,400,000 2 20

    N1,400,001 - N1,500,000 1 14

    N1,500,001 - N1,600,000 - 21

    N1,600,001 - N1,700,000 1 1

    N1,700,001 - N1,800,000 1 24

    N1,800,001 - N1,900,000 4 10

    N1,900,001 - N2,000,000 - 6

    N2,000,001 - N2,250,000 12 83

    N2,250,001 - N2,500,000 82 163

    N2,500,001 - N2,750,000 206 266

    N2,750,001 - N3,000,000 173 285

    N3,000,001 - N3,500,000 620 642

    N3,500,001 - N4,000,000 468 418

    N4,000,001 - N5,000,000 486 461

    N5,000,001 - N6,000,000 312 368

    N6,000,001 - N8,000,000 355 255

    N8,000,001 - N10,000,000 133 184

    N10,000,001 - N15,000,000 228 179

    N15,000,001 - N20,000,000 96 58

    N20,000,001 - N30,000,000 68 80

    N30,000,001 and above 45 31

    3,328 3,646

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    80

    12. Taxation

    (a) Income tax expense

    The tax charge for the year has been computed after adjusting for certain items of expenditure and income, which are

    not deductible or chargeable for tax purposes, and comprises:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Current tax expense

    Income tax 14,285,632 14,267,154 12,486,370 12,454,954

    Tertiary education tax 1,325,309 1,325,309 1,368,150 1,368,150

    15,610,941 15,592,463 13,854,520 13,823,104

    Deferred tax expense

    Origination and reversal of

    temporary differences (2,029,442) (2,029,442) (2,596,967) (2,596,967)

    13,581,499 13,563,021 11,257,553 11,226,137

    (b) Reconciliation of effective tax rate

    Group Company Group Company

    2017 2017 2016 2016

    % N’000 % N’000 % N’000 % N’000

    Profit before

    income tax 46,630,058 46,572,313 39,674,518 39,622,914

    Income tax

    using the

    statutory tax rate 30.0 13,990,172 30.0 13,971,694 30.0 11,922,556 30.0 11,891,140

    Impact of tertiary

    education tax 2.0 931,446 2.0 931,446 2.0 792,743 2.0 792,743

    Effect of tax

    incentives and

    exempted Income (4.0) (200,661) (4.0) (200,661) (0.8) (304,484) (0.8) (304,484)

    Non-deductible

    expenses 4.0 203,146 4.0 203,146 0.2 71,067 0.2 71,067

    Other items* (2.9) (1,342,604) (2.9) (1,342,604) (3.1) (1,224,329) (3.1) (1,224,329)

    29.1 13,581,499 29.1 13,563,021 28.3 11,257,553 28.3 11,226,137

    * Other items relate mainly to additional deferred tax asset on Returnable Packaging Material (RPM).

    (c) Movement in current tax liability

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Balance at 1st January 19,024,168 18,989,567 20,218,516 20,215,330

    Payments during the year (15,587,752) (15,587,752) (15,048,868) (15,048,868)

    Charge for the year 15,610,942 15,592,463 13,854,520 13,823,104

    Reversal 558,912 558,912 - -

    Balance at 31st December 19,606,270 19,553,190 19,024,168 18,989,567

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    81

    13. Earnings per share

    (a) Basic earnings per share

    Basic earnings per share of 414 kobo (2016: 358 kobo) is based on the profit attributable to ordinary shareholders of

    N33,009,292,000 (2016: N28,396,777,000), and on the 7,964,580,401 ordinary shares of 50 kobo each, being the

    weighted average number of ordinary shares in issue (2016: 7,929,100,888):

    Group Company Group Company

    2017 2017 2016 2016

    Weighted average number of

    ordinary shares

    Issued ordinary shares at 1st January 7,929,100,888 7,929,100,888 7,899,989,937 7,899,989,937

    Issued shares* 35,479,513 35,479,513 29,110,951 29,110,951

    Weighted average number of

    ordinary shares at 31st December 7,964,580,401 7,964,580,401 7,929,100,888 7,929,100,888

    * On 23rd June 2017, the Company issued 67,801,163 ordinary shares to shareholders as scrip dividend.

    (b) Diluted earnings per share

    Diluted earnings per share of 414 kobo (2016: 358 kobo) is based on the profit attributable to ordinary shareholders of

    N33,009,292,000 (2016: N28,396,777,000), and on the 7,964,580,401 ordinary shares of 50 kobo each, being the

    weighted average number of ordinary shares in issue (2016: 7,929,100,888) after adjustment for the effects of all dilutive

    potential ordinary shares:

    Group Company Group Company

    2017 2017 2016 2016

    Weighted average

    number of ordinary shares

    Issued ordinary shares at 1st January 7,929,100,888 7,929,100,888 7,899,989,937 7,899,989,937

    Issued shares 35,479,513 35,479,513 29,110,951 29,110,951

    Weighted average number of

    ordinary shares at 31st December 7,964,580,401 7,964,580,401 7,929,100,888 7,929,100,888

    (c) Dividend declared per share

    Dividend declared per share of 358 kobo (2016: 460 kobo) is based on total declared dividend of N28,453,982,337 (2016:

    N36,473,864,075) and on 7,996,902,051 ordinary shares of 50 kobo each, being the ordinary shares in issue (2016:

    7,929,100,888).

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    82

    14. Property, plant and equipment

    (a) The movement on these accounts during the year 2017 was as follows:

    Group

    Furniture Returning Capital

    Leasehold Plant and Motor and Packaging Work-in-

    Land Buildings Machinery Vehicles Equipment materials Progress Total

    N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000

    Gross Book Value

    Balance at

    1st January 2017 10,922,090 57,074,461 167,596,267 20,785,036 22,471,916 83,105,410 4,297,466 366,252,646

    Additions 231,967 206,902 2,313,960 3,999,595 2,318,107 18,841,112 6,986,844 34,898,487

    Disposals - (145,345) (2,118,907) (6,169,001) (1,326,344) (5,386,989) - (15,146,586)

    Transfers from

    Held for Sale 617,405 1,200,947 628,593 - 6,891 - - 2,453,836

    Transfers from

    Capital work-in-progress* - 90,675 1,178,659 18,416 243,397 4,866 (1,548,669) (12,656)

    Balance at

    31st December 2017 11,771,462 58,427,640 169,598,572 18,634,046 23,713,967 96,564,399 9,735,641 388,445,727

    Depreciation and

    impairment

    Balance at

    1st January 2017 1,675,838 18,142,745 86,729,517 12,982,811 14,811,338 40,728,697 - 175,070,946

    Depreciation

    for the year 360,012 4,545,176 11,198,853 2,909,813 2,997,470 10,679,811 - 32,691,135

    Disposals (81,346) (2,116,275) (6,056,888) (1,322,688) (4,969,551) - (14,546,748)

    Balance at

    31st December 2017 2,035,850 22,606,575 95,812,095 9,835,736 16,486,120 46,438,957 - 193,215,333

    Carrying amount

    At 31st December 2016 9,246,252 38,931,716 80,866,750 7,802,225 7,660,578 42,376,713 4,297,466 191,181,700

    At 31st December 2017 9,735,612 35,821,065 73,786,477 8,798,310 7,227,847 50,125,442 9,735,641 195,230,394

    *see note 15

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    83

    14. Property, plant and equipment (Cont’d)

    (b) The movement on these accounts during the year 2017 was as follows:

    Company

    Furniture Returning Capital

    Leasehold Plant and Motor and Packaging Work-in-

    Land Buildings Machinery Vehicles Equipment materials Progress Total

    N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000

    Gross Book Value

    Balance at

    1st January 2017 10,922,090 56,829,033 167,596,267 20,785,036 22,471,916 83,105,410 4,297,466 366,007,218

    Additions 231,967 206,902 2,313,960 3,999,595 2,318,107 18,841,112 6,986,844 34,898,487

    Disposals - (145,345) (2,118,907) (6,169,001) (1,326,344) (5,386,989) - (15,146,586)

    Transfers from

    Held for Sale 617,405 1,200,947 628,593 - 6,891 - - 2,453,836

    Transfers from

    Capital work-in-progress* 90,675 1,178,659 18,416 243,397 4,866 (1,548,669) (12,656)

    Balance at

    31st December 2017 11,771,462 58,182,212 169,598,572 18,634,046 23,713,967 96,564,399 9,735,641 388,200,299

    Depreciation and

    impairment

    Balance at

    1st January 2017 1,675,838 18,082,317 86,729,517 12,982,811 14,811,338 40,728,697 - 175,010,518

    Depreciation

    for the year 360,012 4,540,176 11,198,852 2,909,813 2,997,470 10,679,811 - 32,686,134

    Disposals - (81,346) (2,116,275) (6,056,888) (1,322,688) (4,969,550) - (14,546,747)

    Balance at

    31st December 2017 2,035,850 22,541,147 95,812,094 9,835,736 16,486,120 46,438,958 - 193,149,905

    Carrying amount

    At 31st December 2016 9,246,252 38,746,716 80,866,750 7,802,225 7,660,578 42,376,713 4,297,466 190,996,700

    At 31st December 2017 9,735,612 35,641,065 73,786,478 8,798,310 7,227,847 50,125,441 9,735,641 195,050,394

    *see note 15

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    84

    14. Property, plant and equipment (Cont'd)

    (a) The movement on these accounts during the year 2016 was as follows:

    Group

    Furniture Returning Capital

    Leasehold Plant and Motor and Packaging Work-in-

    Land Buildings Machinery Vehicles Equipment materials Progress Total

    N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000

    Gross Book Value

    Balance at

    1st January 2016 8,154,440 55,880,043 161,804,452 17,496,883 19,784,243 109,620,424 9,486,346 382,226,831

    Additions 31,259 713,428 3,049,959 3,924,860 2,398,007 9,027,307 1,444,517 20,589,337

    Disposals - (421,417) (1,483,503) (784,730) (814) (35,539,198) - (38,229,662)

    Transfers from

    Held for Sale 1,722,990 - - - 553 - - 1,723,543

    Transfers from

    Capital work-in-progress* 1,013,401 902,407 4,225,360 148,023 289,926 (3,123) (6,633,397) (57,403)

    Balance at

    31st December 2016 10,922,090 57,074,461 167,596,267 20,785,036 22,471,916 83,105,410 4,297,466 366,252,646

    Depreciation and

    impairment

    Balance at 1st January 2016 1,331,294 15,854,308 79,197,101 11,154,154 11,719,942 65,671,185 - 184,927,984

    Depreciation for the year 344,544 2,709,854 9,015,874 2,522,114 3,092,210 10,588,413 - 28,273,009

    Disposals - (421,417) (1,483,458) (693,457) (814) (35,530,901) - (38,130,047)

    Balance at

    31st December 2016 1,675,838 18,142,745 86,729,517 12,982,811 14,811,338 40,728,697 - 175,070,946

    Carrying amount

    At 31st December 2015 6,823,146 40,025,735 82,607,351 6,342,729 8,064,301 43,949,239 9,486,346 197,298,847

    At 31st December 2016 9,246,252 38,931,716 80,866,750 7,802,225 7,660,578 42,376,713 4,297,466 191,181,700

    *see note 15

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    85

    14. Property, plant and equipment (Cont'd)

    (b) The movement on these accounts during the year 2016 was as follows:

    Company

    Furniture Returning Capital

    Leasehold Plant and Motor and Packaging Work-in-

    Land Buildings Machinery Vehicles Equipment materials Progress Total

    N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000

    Gross Book Value

    Balance at

    1st January 2016 8,154,440 55,634,615 161,804,451 17,496,883 19,784,244 109,620,424 9,486,346 381,981,403

    Additions 31,259 713,428 3,049,959 3,924,860 2,398,007 9,027,307 1,444,517 20,589,337

    Disposals - (421,417) (1,483,503) (784,730) (814) (35,539,198) - (38,229,662)

    Transfers from

    Held for Sale 1,722,990 553 1,723,543

    Transfers from

    Capital work-in-progress* 1,013,401 902,407 4,225,360 148,023 289,926 (3,123) (6,633,397) (57,403)

    Balance at

    31st December 2016 10,922,090 56,829,033 167,596,267 20,785,036 22,471,916 83,105,410 4,297,466 366,007,218

    Depreciation and

    impairment

    Balance at

    1st January 2016 1,331,294 15,798,880 79,197,101 11,154,154 11,719,942 65,671,185 - 184,872,556

    Depreciation for the year 344,544 2,704,854 9,015,874 2,522,114 3,092,210 10,588,413 - 28,268,009

    Disposals - (421,417) (1,483,458) (693,457) (814) (35,530,901) - (38,130,047)

    Balance at

    31st December 2016 1,675,838 18,082,317 86,729,517 12,982,811 14,811,338 40,728,697 - 175,010,518

    Carrying amount

    At 31st December 2015 6,823,146 39,835,735 82,607,351 6,342,729 8,064,301 43,949,239 9,486,346 197,108,847

    At 31st December 2016 9,246,252 38,746,716 80,866,750 7,802,225 7,660,578 42,376,713 4,297,466 190,996,700

    *see note 15

    (c) Capital Work in Progress

    Closing balance of Capital Work in Progress is analysed as follows:

    Company Company

    2017 2016

    N'000 N'000

    Plant and Machinery 8,270,022 3,776,000

    Buildings 662,655 52,451

    Others 802,964 469,015

    9,735,641 4,297,46

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    86

    14. Property, plant and equipment (Cont'd)

    (d) Capital commitments

    Capital expenditure commitments at the year-end authorized by the Board of Directors comprise:

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Approved and contracted 4,625,530 4,625,530 3,579,286 3,579,286

    Approved but not contracted 10,711,250 10,711,250 8,408,663 8,408,663

    15,336,780 15,336,780 11,987,949 11,987,949

    (e) Assets held for sale

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Cost 2,453,836 2,453,836 4,177,379 4,177,379

    Carrying amount 2,453,836 2,453,836 4,177,379 4,177,379

    Transfer to PP&E (2,453,836) (2,453,836) (1,723,543) (1,723,543)

    Carrying amount - - 2,453,836 2,453,836

    (f) Additions in statement of cash flows

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Additions per note 14 a & b 34,898,487 34,898,487 20,589,338 20,589,338

    PPE in transit (2,776,909) (2,776,909) (1,376,086) (1,376,086)

    Acquisition of PPE per statement

    of cash flows 32,121,578 32,121,578 19,213,242 19,213,242

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    87

    15. Intangible assets and goodwill

    (a) The movement on these accounts during the year 2017 was as follows:

    Group/Company

    Distribution

    Goodwill Software Network Total

    N'000 N'000 N'000 N'000

    Gross Book Value

    Balance at 1st January 2017 84,722,719 2,488,007 17,381,433 104,592,159

    Additions - 222,409 - 222,409

    Disposals - (261,581) - (261,581)

    Transfers from PP&E (note 14) - 12,656 - 12,656

    Balance at 31st December 2017 84,722,719 2,461,491 17,381,433 104,565,646

    Amortisation

    Balance at 1st January 2016 - 1,939,878 3,174,455 5,114,333

    Amortisation for the year - 276,946 1,158,781 1,435,727

    Disposal - (261,580) - (261,581)

    Balance at 31st December 2017 - 1,955,244 4,333,236 6,288,480

    Carrying amount

    At 31st December 2016 84,722,719 548,129 14,206,978 99,477,826

    At 31st December 2017 84,722,719 506,247 13,048,197 98,277,166

    (b) The movement on these accounts during the year 2016 was as follows:

    Group/Company

    Distribution

    Goodwill Software Network Total

    N'000 N'000 N'000 N'000

    Cost

    Balance at 1st January 2016 84,722,719 2,154,273 17,381,433 104,258,425

    Additions - 276,331 - 276,331

    Transfers from PP&E (note 14) - 57,403 - 57,403

    Balance at 31st December 2016 84,722,719 2,488,007 17,381,433 104,592,159

    Amortisation

    Balance at 1st January 2016 - 1,630,021 2,015,675 3,645,696

    Amortisation for the year - 309,857 1,158,780 1,468,637

    Balance at 31st December 2016 - 1,939,878 3,174,455 5,114,333

    Carrying amount

    At 31st December 2015 84,722,719 524,251 15,365,758 100,612,728

    At 31st December 2016 84,722,719 548,129 14,206,978 99,477,826

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    88

    15. Intangible assets and goodwill (Cont'd)

    (c) The amortization charge of all intangible assets is included in administrative expenses in the income statement.

    (d) Effective 31st December 2014, Nigerian Breweries Plc acquired all the shares of Consolidated Breweries Plc through an

    effected Scheme of Merger. The goodwill arising from this transaction represents synergies that is being derived from

    increased economies of scale, deepened brand portfolio, access to new markets and enhanced operating and

    administrative efficiencies.

    Effective 17th October 2011, Nigerian Breweries Plc acquired Sona Systems Associates Business Management Limited

    and Life Breweries Company Limited from Heineken International B.V.. The goodwill arising from numerous synergies

    harnessed from the breweries acquired continues to maximize value for the Company's shareholders and other

    stakeholders.

    For the purpose of impairment testing, goodwill is allocated to the Company as the Cash Generating Unit (CGU), which

    represents the lowest level at which the goodwill is monitored for internal management purpose.

    Goodwill is tested for impairment annually. Impairment is determined by comparing the carrying amount of the (CGU)

    (including goodwill) with the recoverable amount. The recoverable amount of the CGU is the higher of the value in use. The

    value in use in 2016 was determined on a similar basis. The calculation of the value in use was based on the following key

    assumptions:

    ● Cash flows were projected based on actual operating results and a three year business plan. Cash flows for a further

    seven year period were extrapolated using expected annual volume growth rates. Management believes that this

    forecast period is justified due to the long-term nature of the brewery business and past experiences.

    ● The revenue growth per year after the first three year period is assumed to be at the expected annual long-term

    inflation, based on external sources.

    ● A pre-tax Weighted Average Cost of Capital (WACC) was applied in determining the recoverable amount of the unit.

    The WACC represents the Group/Company's weighted average cost of capital.

    The values assigned to the key assumptions (level 2 Inputs) used for the value in use calculations are as follows:

    2017 2016

    - Pre-tax WACC - 20.4% 24.0%

    - Terminal growth rate (2027 and onwards) - 0% (2026 and onwards) - 0%

    - Expected volume growth rates (2018 - 2026) - 4.61% (2017 - 2025) - 0.7%

    The values assigned to the key assumptions represent management's assessment of future trends in the industry and

    are based on both external sources and internal sources (historical data). Management's estimate of the fair value

    less cost to sell is based on the market capitalisation which is dependent on the company's share price.

    The useful life of Goodwill at the reporting date is assessed to be indefinite with no impairment losses.

    16. Investments

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Progress Trust (CPFA) 150,000 150,000 150,000 150,000

    Benue Bottling Company Limited - 679,625 - 679,625

    Investments 150,000 829,625 150,000 829,625

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    89

    16. Investments (Cont'd)

    (a) Progress Trust (CPFA)

    Investment of N150 million represents the cost of the Group/Company's 100% equity investment in Progress Trust (CPFA)

    Limited, incorporated in Nigeria. Progress Trust (CPFA) Limited is an unconsolidated structured entity licensed by the

    National Pension Commission to conduct the business of a closed pension fund administrator and manages the pension

    and gratuity funds of employees and former employees of Nigerian Breweries. The activities of Progress Trust (CPFA)

    Limited are regulated by the National Pension Commission (Pencom) rather than by voting rights and the funds are

    managed in accordance with the Pencom guidelines. The benefits arising from the activities of Progress Trust (CPFA)

    Limited accrue principally to members of the pension and gratuity schemes and the

    Group/Company has no exposure to variable returns arising from its involvement. The Group/Company's residual interest

    in Progress Trust (CPFA) Limited is immaterial. The funds and assets of both the pension and defined contribution gratuity

    scheme are held by an Independent Licensed Pension Fund Custodian in line with the Pension Reform Act, 2014. As a

    result of the above, Progress Trust (CPFA) Limited has not been consolidated.

    The company supports the sourcing of resources to Progress Trust (CPFA) Limited at cost and intends to continue to

    provide support into the future.

    (b) Benue Bottling Company Limited

    Through the effected merger with Consolidated Breweries on 31st December 2014 the Company obtained an 89.3%

    shareholding in Benue Bottling Company Limited, an entity with no business activities. The Investment of N679.6 million

    represents the Company's historical cost of the 89.3% share in the equity of Benue Bottling Company Limited as at 31st

    December 2016 (2015: N679.6 million).

    17. Other receivables

    Non-current other receivables of N552million (2016: N623 million) represent loans granted to the Company's employees, which

    are secured by the employees' retirement benefit obligations. At the year end, the current portion of other receivables amounting

    to N182 million (2016: N320 million) was reclassified to current asset and included in trade and other receivables on the statement

    of financial position (note 20)

    18. Prepayments

    Non-current - (N526 million (2016: N1,154 million) and current prepayments - N1,038 million (2016: N301 million) mainly

    represent rental expenses prepaid by the Company.

    19 Inventories

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Raw materials 17,561,707 17,561,707 8,789,652 8,789,652

    Products in process 2,377,722 2,377,722 3,169,263 3,169,263

    Finished products 7,667,094 7,667,094 3,928,616 3,928,616

    Non-returnable packaging materials 6,470,275 6,020,382 5,944,416 5,944,416

    Spare parts 5,740,475 5,740,475 6,459,461 6,459,461

    Goods in transit 2,911,589 3,361,482 2,953,295 2,953,295

    42,728,862 42,728,862 31,244,703 31,244,703

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    90

    20. Trade and other receivables

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Trade receivables 13,137,794 13,137,794 12,753,803 12,753,803

    Advances 3,802,857 3,802,857 3,949,620 3,949,620

    Other receivables 1,944,447 1,944,447 2,227,873 2,227,873

    Due from related parties 1,499,014 1,499,014 1,042,728 1,042,728

    20,384,112 20,384,112 19,974,024 19,974,024

    The Company's exposure to credit risks and impairment losses related to trade and other receivables is disclosed in Note 30 (a).

    21. Deposit for imports

    Deposits for imports represent naira deposits for foreign currencies purchased for funding of letters of credit and forwards, as well

    as futures. All related to imported raw materials, spare parts and machinery.

    22. Cash and cash equivalents

    Group Company Group Company

    2017 2017 2016 2016

    N’000 N’000 N’000 N’000

    Bank balances 15,730,855 15,729,677 11,929,945 11,928,767

    Call deposits 134,528 134,528 224,482 224,482

    Cash in hand 1,571 1,571 2,005 2,005

    Cash and Bank 15,866,954 15,865,776 12,156,432 12,155,254

    Bank Overdraft (470,930) (470,930) (870,611) (870,611)

    (470,930) (470,930) (870,611) (870,611)

    Cash and cash equivalents in the

    statement of cash flows 15,396,024 15,394,846 11,285,821 11,284,643

    23. Share capital

    (a) Authorised ordinary shares of 50k each

    In number of shares

    Company Company

    2017 2016

    At 1st January 8,000,000,000 8,000,000,000

    At 31st December 10,000,000,000 8,000,000,000

    At the last Annual General Meeting of 3rd May 2017, the Authorised Share Capital was increased from N4 billion divided into

    8 billion ordinary shares of 50 kobo each to N5 billion divided into 10 billion ordinary shares of 50 kobo each.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    91

    23. Share capital (Cont’d)

    (b) Issued and fully paid ordinary shares of 50k each

    Company Company

    2017 2016

    In number of shares

    At 1st January 7,929,100,888 7,929,100,888

    Share issuance 67,801,163 -

    At 31st December 7,996,902,051 7,929,100,888

    In Naira N N

    At 1st January 3,964,551 3,964,551

    Share issuance 33,900 -

    Share Value in Naira 3,998,451 3,964,551

    All shares rank equally with regard to the Company's residual assets.

    The holders of ordinary shares are entitled to one vote per share at meetings of the Company.

    24. Dividends

    (a) Declared dividends

    The following dividends were declared and paid by the Company during the year:

    Company Company

    2017 2016

    N'000 N'000

    100 kobo Interim dividend declared (2016: 100 kobo) 7,996,902 7,929,101

    258 kobo per qualifying ordinary share (2016: 360 kobo) 20,457,080 28,544,763

    28,453,982 36,473,864

    After the respective reporting dates, the following dividends were proposed by the directors. The dividends have not been

    provided for and there are no income tax consequences.

    Company Company

    2017 2016

    N'000 N'000

    313 kobo per qualifying ordinary share (2016: 360 kobo) 25,030,303 20,457,080

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    92

    24. Dividends (Cont’d)

    (b) Dividend payable

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    At 1st January 12,676,038 12,676,038 12,399,599 12,399,599

    Declared dividend (note 24 a) 28,453,982 28,453,982 36,473,864 36,473,864

    Payments paid (Cash) (24,038,861) (24,038,861) (36,057,794) (36,057,794)

    Payments paid (Bonus) (8,854,154) (8,854,154) - -

    Unclaimed dividend transferred to

    retained earnings (208,263) (208,263) (139,631) (139,631)

    At 31st December 8,028,742 8,028,742 12,676,038 12,676,038

    (i) Unclaimed dividend transferred to general reserve represents dividend which have remained unclaimed for over

    twelve (12) years and are therefore no longer recoverable or actionable by the shareholders in accordance with

    Section 383 of CAMA.

    (ii) As at 31st December 2017, N1.4 billion (2016: N2.8 billion) of the total dividend payable is held with the Company's

    registrar, First Registrars and Investor Services Limited. The remaining dividend payable of N6.6 billion (2016:

    N9.8 billion) holds N Nil (2016: N3.6 billion) due to foreign shareholders. The total remaining balance of N6.6 billion

    represents unclaimed dividends, which have been returned to the Company by the Registrar.

    25. Loans and Borrowings

    This note provides information about the contractual terms of the Company's interest-bearing loans and borrowings, which are

    measured at amortized cost. The borrowings are unsecured. For more information about the Company's exposure to interest rate,

    foreign currency and liquidity risks, see Note 30.

    (a) Non Current Non Current

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    At 1st January 17,000,000 17,000,000 3,000,000 3,000,000

    Bank loan Obtained/(repaid) during the year (9,000,000) (9,000,000) 14,000,000 14,000,000

    At 31st December 8,000,000 8,000,000 17,000,000 17,000,000

    (b) The Company has revolving credit facilities with five Nigerian banks to finance its working capital. The approved limit of the

    loan with each of the banks range from N6 billion to N15 billion (total of N66 billion). Each of the agreements were signed in

    2016 with a tenor of five years.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    93

    26. Employee Benefits

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Recognized liability for defined

    benefit obligation (Note 26 a) 10,122,143 10,122,143 7,580,834 7,580,834

    Recognized liability for other long term

    employee benefits (Note 26 b) 3,087,694 3,087,694 2,520,231 2,520,231

    Total employee benefit liabilities 13,209,837 13,209,837 10,101,065 10,101,065

    (a) Movement in the present value of the defined benefit obligation

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Defined benefit obligations at 1st January 7,580,834 7,580,834 9,247,745 9,247,745

    Benefits paid by the plan (718,305) (718,305) (1,004,019) (1,004,019)

    Current service costs and interest (see below) 1,188,645 1,188,645 1,200,149 1,200,149

    Actuarial (gains) and losses recognized in

    other comprehensive income (see note (f)) 2,070,969 2,070,969 (1,863,041) (1,863,041)

    Defined benefit obligations at 31st December 10,122,143 10,122,143 7,580,834 7,580,834

    In 2011, the Company introduced a post-employment medical benefit for pensioners and employees on the defined benefit

    gratuity scheme including their spouses. The liability for this scheme in the current year amounted to N4.9 billion (2016:

    N2.3 billion).

    Defined benefit expense recognized in income statement for defined benefit obligation.

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Current service costs 74,457 74,457 150,201 150,201

    Interest on obligation 1,114,188 1,114,188 1,049,948 1,049,948

    1,188,645 1,188,645 1,200,149 1,200,149

    (b) Movement in other long-term employee benefits

    The movement on the long service awards benefit plan liability during the year was as follows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Obligation at 1st January 2,520,231 2,520,231 2,655,759 2,655,759

    Charge for the year 1,172,419 1,172,419 317,034 317,034

    Payments (604,956) (604,956) (452,562) (452,562)

    Obligation at 31st December 3,087,694 3,087,694 2,520,231 2,520,231

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    94

    26. Employee Benefits (Cont’d)

    Defined benefit expense recognized in the income statement for long service awards obligation

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Current and past service costs 308,105 308,105 352,375 352,375

    Interest on obligation 353,333 353,333 297,591 297,591

    Actuarial (gains)/Losses 510,981 510,981 (332,932) (332,932)

    1,172,419 1,172,419 317,034 317,034

    (c) The movement on the defined contribution plan obligation during the year was as follows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Obligation at 1st January 89,020 89,020 33,438 33,438

    Charge for the year 1,946,341 1,946,341 1,862,519 1,862,519

    Payments (1,869,737) (1,869,737) (1,806,938) (1,806,938)

    Obligation at 31st December 165,624 165,624 89,020 89,020

    The obligation represents the amount yet to be remitted at the year end to the defined benefit contribution plan and has

    been included in non-trade and accrued expenses (note 29 a).

    (d) Pension payable

    The balance on the pension payable account, included in trade and other payables, represents the amount due to the

    Pension Fund Administrators which is yet to be remitted at the year end. The movement on this account during the year was

    as follows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Obligation at 1st January 21,176 21,176 726 726

    Charge for the year 2,457,576 2,457,576 2,408,593 2,408,593

    Payments (2,477,346) (2,477,346) (2,388,143) (2,388,143)

    Obligation at 31st December 1,406 1,406 21,176 21,176

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    95

    26. Employee Benefits (Cont’d)

    (e) The employee benefits related expense are recognized in the following line items in the income statement:

    Cost of sales Marketing Administrative Total

    expenses

    2017 2016 2017 2016 2017 2016 2017 2016

    N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000

    Defined benefit

    obligation expense 32,909 62,893 25,564 50,356 15,984 36,952 74,457 150,201

    Pension expense 1,086,238 1,008,539 843,767 807,493 527,571 592,560 2,457,576 2,408,593

    Defined contribution plan 860,275 779,884 668,243 624,419 417,823 458,216 1,946,341 1,862,519

    Long Service awards

    expense 518,204 132,750 402,530 106,287 251,685 77,996 1,172,419 317,034

    2,497,626 1,984,066 1,940,104 1,588,555 1,213,063 1,165,724 5,650,793 4,738,347

    The Company included N1.5 billion (2016: N1.3 billion) of unwinding of discount relating to its employee benefits in finance

    costs (note 7b).

    The Company expects to pay about N666 million in respect of its defined benefit obligation in 2017.

    (f) Actuarial gains and losses on defined benefit obligation are recognized in other comprehensive income. The movement on

    the cumulative amount included in retained earnings as at the year-end was as follows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Cumulative amount at 1st January 2,607,289 2,607,289 3,911,418 3,911,418

    Loss/(Gain) Recognized during the year 2,070,969 2,070,969 (1,863,041) (1,863,041)

    Deferred tax (621,291) (621,291) 558,912 558,912

    Recognized during the year net of tax 1,449,678 1,449,678 (1,304,129) (1,304,129)

    Amount accumulated in retained

    earnings at 31st December 4,056,967 4,056,967 2,607,289 2,607,289

    The Company recognized N2.0 billion (2016 N1.9 billion gains) of actuarial losses in other comprehensive income during

    the period in respect of its defined benefit obligations. These losses primarily relate to the changes in observed salary

    increases, changes in benefits payments and the change in discount rate. The actuarial gains and loses recognised during

    the year are analysed as follows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Demographic Assumptions (gains)/Losses 526,241 526,241 - -

    Financial assumption - (gains)/Losses 637,968 637,968 (1,524,446) (1,524,446)

    Experience Assumption - (gains)/Losses 906,760 906,760 (338,595) (338,595)

    Recognized during the year 2,070,969 2,070,969 (1,863,041) (1,863,041)

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    96

    (g) Actuarial assumptions

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

    Group Company Group Company

    2017 2017 2016 2016

    Discount rate (p.a.) 14.5% 14.5% 15.5% 15.5%

    Average pay increase (p.a.) 12.5% 12.5% 15% 15%

    Average rate of inflation (p.a.) 14.5% 14.5% 12% 12%

    Weighted average duration of the plan (years) 9 9 11 11

    Average medical rate of inflation 5.00% 5.00% 5.00% 5.00%

    These assumptions depict management's estimate of the likely future experience of the Company.

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

    mortality are based on the rates published jointly by the Institute and Faculty of Actuaries in the UK as follows:

    Mortality in service

    2017 2016

    Sample age Number of deaths in year out Number of deaths in year

    of 10,000 lives out of 10,000 lives

    25 7 7

    30 7 7

    35 9 9

    40 14 14

    45 26 26

    Mortality in Retirement

    Sample age Expectation of Life (Completed years)

    Management Non-Management PA 90

    50 29 28 27

    55 24 24 22

    60 20 20 19

    65 17 16 15

    70 13 13 12

    75 10 9 9

    80 6 6 7

    Withdrawals/Turnover

    It is assumed that all the employees covered by the defined end of service benefit scheme would retire at age 60 (2016:

    age 60).

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    26. Employee Benefits (Cont’d)

    97

    (h) Sensitivity analysis

    Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other

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

    Post

    Long Unfunded employment

    Service Retirement medical

    Awards Benefit benefit

    N'000 N'000 N'000

    +0.25% (37,829) (70,716) (103,625)

    -0.25% 41,650 78,663 121,179

    +0.5% (75,660) (141,432) (207,250)

    -0.5% 83,300 157,327 242,358

    +0.25% 35,183

    -0.25% (32,475) N/A N/A

    +0.5% 70,366

    -0.5% (64,951) N/A N/A

    +0.25% 5,530 85,351 131,772

    -0.25% (5,170) (77,456) (113,243)

    +0.5% 11,060 170,702 263,544

    -0.5% (10,339) (154,912) (226,486)

    +1 3,930 114,733 81,764

    -1 (4,436) (120,358) (84,596)

    Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an

    approximation of the sensitivity of the assumptions shown.

    Mortality experience

    Discount rate

    Salary increase

    Benefit Inflation rate

    27. Share-based payment

    Since the 1st of January 2006 Heineken N.V, the parent Company, established a share based payment plan for key management

    personnel, including certain senior management of Nigerian Breweries Plc. The grant date fair value of the share rights granted is

    recognized as personnel expenses with a corresponding increase in equity (equity-settled) as a capital contribution from

    Heineken N.V, over the period that the employees become unconditionally entitled to the share rights. All equity settled share

    based payment transactions are accounted for in the share based payment reserve account.

    A recharge arrangement exists between Heineken N.V and Nigerian Breweries Plc whereby vested shares delivered to

    employees by Heineken N.V are recharged to Nigerian Breweries Plc. The recharge transaction is recognized as an intercompany

    liability with a corresponding adjustment in the share-based payment reserve for the capital contribution recognized in respect of

    the share-based payment.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    26. Employee Benefits (Cont’d)

    98

    }

    }

    }

    }

    27. Share-based payment (Cont’d)

    All rights are to be settled by delivery of shares. The terms and conditions relating to the grants of the rights are as follows;

    Grant date/employees Based on Share Price Contractual life

    entitled Number (Euro) Vesting Conditions of rights

    Share rights granted to Continued service,

    key management 13,075 58.95 100% internal 3 years

    personnel in 2015 performance conditions

    Share rights granted to Continued service

    key management 12,177 78.77 100% internal 3 years

    personnel in 2016 performance conditions

    Share rights granted Continued service,

    to key management 12,029 71.26 100% internal 3 years

    personnel in 2017 performance conditions

    * The number of shares is based on target performance.

    The number and weighted average share price per share is as follows:

    Weighted average Number of share Weighted average Number of share

    share price rights share price rights

    (Euro) (Euro)

    2017 2017 2016 2016

    Outstanding at 1st January 60.51 34,327 48.32 36,431

    Granted during the year 71.26 12,029 78.77 12,177

    Vested during the year 49.08 (20,284) 50.47 (26,415)

    Forfeited during the year 63.59 (3,423)

    Performance adjustment 14,461 12,134

    Outstanding as at 31st December 69.68 37,110 60.51 34,327

    Employee expenses 2017 2016 2015

    N'000 N'000 N'000

    Share rights granted in 2014 - 63,390

    Share rights granted in 2015 160,651 62,650 73,305

    Share rights granted in 2016 148,435 78,633 51,930

    Share rights granted in 2017 127,113 - -

    Total expense/(income) recognized as employee costs 436,198 204,674 244,312

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    99

    28. Deferred tax liabilities

    Recognized deferred tax assets and liabilities

    Deferred tax assets and liabilities are attributable to the following:

    Group/ Company Assets Liabilities Net

    31st Dec. 31st Dec. 31st Dec. 31st Dec. 31st Dec. 31st Dec.

    2017 2016 2017 2016 2017 2016

    N'000 N'000 N'000 N'000 N'000 N'000

    Property, plant

    and equipment - 131,203 (27,813,718) (31,416,806) (27,813,718) (31,285,604)

    Intangible assets - - (3,453,695) (3,746,637) (3,453,695) (3,746,637)

    Inventories 396,950 258,661 - - 396,950 258,661

    Employee benefits 3,962,951 2,621,407 - - 3,962,951 2,621,407

    Other items 240,649 2,275,664 - - 240,650 2,275,664

    Net tax

    assets/(liabilities) 4,600,550 5,286,935 (31,267,413) (35,163,443) (26,666,864) (29,876,508)

    Movement in temporary differences during the year

    Balance Income Balance Income Balance

    1st Jan Statement 31st Dec Statement 31st Dec.

    2016 and OCI 2016 and OCI 2017

    N'000 N'000 N'000 N'000 N'000

    Property, plant and equipment (31,739,740) 454,137 (31,285,603) 3,471,885 (27,813,718)

    Intangible assets (4,038,572) 291,935 (3,746,637) 292,942 (3,453,695)

    Inventories 191,217 67,444 258,661 138,289 396,950

    Employee benefits 3,571,051 (949,644) 2,621,407 1,341,544 3,962,951

    Other items 101,480 2,174,184 2,275,664 (2,035,015) 240,650

    Net tax assets/(liabilities) (31,914,564) 2,038,056 (29,876,508) 3,209,645 (26,666,864)

    The net movement during the year ended 31st December 2017, includes a debit amount of N621 million (2016: debit N559 million)

    recorded in other comprehensive income as deferred tax on employee benefits.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    100

    29. Trade and other payables

    (a) Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Trade payables and related accrued expense 38,898,324 39,597,344 28,013,098 28,649,372

    Deposit for Returnable Packaging Materials (RPM) 29,930,949 29,930,949 31,450,256 31,450,256

    Non-trade payables and accrued expenses 23,234,670 23,234,670 19,096,065 19,096,065

    Amount due to related parties 35,883,080 35,883,080 32,624,891 32,624,891

    127,947,023 128,646,043 111,184,310 111,820,584

    (b) Reconciliation of changes in trade and other payables included in consolidated statement of cash flows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Movement in trade and other payables 16,762,710 16,825,456 25,885,411 25,942,015

    Accrued additions to Property Plant and equipment (2,776,909) (2,776,909) (1,376,096) (1,376,096)

    Interest accrual (1,326,393) (1,326,393) (87,793) (87,793)

    VAT paid 14,571,625 14,571,625 11,447,266 11,447,266

    Changes in trade and other payables per

    statement of cash flows 27,231,033 27,293,799 35,868,788 35,925,392

    The Company's exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 28(b).

    30. Financial instruments - financial risk management and fair values

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

    ● Credit risk

    ● Liquidity risk

    ● Market risk

    ● Interest rate risk

    ● Operational risk

    ● Capital management

    This note presents information about the Company's exposure to each of the above risks, the Company's objectives, policies and

    processes for measuring and managing risk, and the Company's management of capital. Further quantitative disclosures are

    included throughout these financial statements.

    Risk management framework

    The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management

    framework. The Board has established the Risk Management Committee, which is responsible for developing and monitoring the

    Company's risk management policies. The committee reports regularly to the Board of Directors on its activities. The Committee is

    assisted in its oversight role by Internal Audit.

    The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set

    appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are

    reviewed regularly by the Risk Management Committee to reflect changes in market conditions and the Company's activities. The

    Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control

    environment in which all employees understand their roles and obligations.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    101

    30. Financial instruments - financial risk management and fair values (Cont'd)

    The Company's Risk Committee oversees how management monitors compliance with the Company's risk management policies

    and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

    Internal Audit undertakes both regular and ad hoc reviews of compliance with established controls and procedures, the results of

    which are reported to Senior Management of the Company at Assurance meetings.

    (a) Credit risk

    Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its

    contractual obligations, and arises principally from the Company's receivables from customers and other related parties.

    The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at

    the reporting date was:

    Notes Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Other receivables (non-current) 17 551,862 551,862 623,331 623,331

    Trade and other receivables 20 20,384,112 20,384,112 19,974,024 19,974,024

    20,935,974 20,935,974 20,597,355 20,597,355

    Cash and bank 22 17,136,757 17,135,579 12,156,432 12,155,254

    38,072,731 38,071,553 32,753,787 32,752,609

    Trade and other receivables

    Management has credit policies in place and the exposure to credit risk is monitored on an ongoing basis. Under the credit

    policies all customers requiring credit over a certain amount are reviewed and new customers analysed individually for

    creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's

    credit assessment process includes specified cash deposits by new customers. Credit limits are established for qualifying

    customers and these limits are reviewed regularly by the Credit Committee. Customers that fail to meet the Company's

    benchmark creditworthiness may transact with the Company only on a prepayment basis.

    The Credit Committee reviews each customer's credit limit in line with the customers' performance in the preceding quarter

    and perceived risk factor assigned to the customer.

    In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they

    are an individual or legal entity, whether they are a key distributor or retail distributor, geographic location, and existence of

    previous financial difficulties. Trade and other receivables relate mainly to the Company's wholesale customers.

    Customers with no trading activities for a period of up to one year are placed on a dormant customer list, and future sales

    are made on a prepayment basis only with approval of management.

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

    and other receivables. The main components of this allowance are a specific loss component that relates to individually

    significant exposures, customers with outstanding amounts but have not placed orders/traded for a prolonged period of

    time (usually one year) and a collective loss component established for groups of similar assets in respect of losses that

    have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment

    statistics.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    102

    30. Financial instruments - financial risk management and fair values (Cont’d)

    The maximum exposure to credit risk for trade and other receivables at the reporting date by type of counter party was:

    2017 2016

    N'000 N'000

    Trade receivables

    - Major customers 14,946,630 14,204,579

    - Other customers 1,656,374 1,574,140

    - Impairment (3,465,210) (3,024,916)

    13,137,794 12,753,803

    Non-trade receivables

    - Other receivables (non-current) 551,862 623,331

    - Due from related parties 1,499,014 1,042,728

    - Advances 3,802,857 3,949,620

    - Others 1,944,447 2,227,873

    7,798,180 7,220,221

    20,935,974 19,974,024

    Impairment losses

    The aging of trade receivables for the Group and Company at the reporting date was:

    Gross Impairment Gross Impairment

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    0 - 30 days 13,274,607 12,615,567 -

    31 - 60 days 120,822 30,206 114,823 28,706

    61 - 180 days 219,367 164,525 208,476 156,357

    More than 180 days 2,988,208 3,270,479 2,839,853 2,839,853

    16,603,004 3,465,210 15,778,719 3,024,916

    The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows:

    2017 2016

    N'000 N'000

    Balance at 1st January (3,024,916) (2,665,177)

    Impairment loss recognised (440,294) (359,739)

    Balance at 31st December (3,465,210) (3,024,916)

    The impairment loss as at 31st December 2017 relates to several customers that are not expected to be able to pay their

    outstanding balances, mainly due to economic circumstances. The Company believes that the unimpaired amounts that are past

    due by more than 30 days are still collectible, based on historic payment behaviour and extensive analyses of the underlying

    customers' credit ratings. The impairment loss is included in administrative expenses in profit or loss.

    Based on historic default rates, the Company believes that, apart from the above, no impairment allowance is necessary in respect

    of trade receivables not past due by up to 30 days. As at the date of these financial statements, over 90 percent of the trade

    receivable balance, which includes the amount owed by the Company's most significant customers have been collected. The

    Company's non-trade receivables are due from parties with no history of credit default. There has been no impairment losses

    incurred by the Company in respect of amounts due from the relevant parties. Accordingly, management considers the amounts

    due from the relevant parties at year end as recoverable.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    103

    30. Financial instruments - financial risk management and fair values (Cont’d)

    Cash and bank

    The Group/Company held cash and bank of N15.9 billion as at 31st December 2017 (2016: N12.2 billion), which represents its

    maximum credit exposure on these assets. The Company mitigates its credit risk exposure of its bank balances by selecting

    reputable banks with good credit ratings and a history of strong financial performance.

    (b) Liquidity risk

    Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial

    liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to

    ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and

    stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

    The Company has a clear focus on ensuring sufficient access to capital to finance growth and to refinance maturing debt

    obligations. As part of the liquidity management process, the Company has various credit arrangements with some banks

    which can be utilized to meet its liquidity requirements.

    Typically the credit terms with customers are more favourable compared to payment terms to its vendors in order to help

    provide sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations.

    This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural

    disasters.

    The following are the undiscounted contractual maturities of financial liabilities, including estimated interest payments and

    excluding the impact of netting agreements

    Group Carrying Contractual 6 months 6-12

    amount cash flows or less months

    N'000 N'000 N'000 N'000

    Non-derivative financial liabilities

    31st December 2017

    Unsecured bank loans 8,000,000 8,495,616 8,495,616 -

    Bank overdraft 470,930 470,930 470,930 -

    Dividend payable 8,028,742 8,028,742 8,028,742 -

    Trade and other payables 127,947,023 127,947,023 127,947,023 -

    144,446,695 144,942,311 144,942,311 -

    Company Carrying Contractual 6 months 6-12

    amount cash flows or less months

    N'000 N'000 N'000 N'000

    Non-derivative financial liabilities

    31st December 2017

    Unsecured bank loans 8,000,000 8,495,616 8,495,616 -

    Bank overdraft 470,930 470,930 470,930 -

    Dividend payable 8,028,742 8,028,742 8,028,742 -

    Trade and other payables 128,646,043 128,646,043 128,646,043 -

    145,145,715 145,641,331 145,641,331 -

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    104

    30. Financial instruments - financial risk management and fair values (Cont’d)

    Group Carrying Contractual 6 months 6-12

    amount cash flows or less months

    N'000 N'000 N'000 N'000

    Non-derivative financial liabilities

    31st December 2016

    Unsecured bank loans 17,000,000 17,797,952 17,797,952 -

    Bank overdraft 870,611 870,611 870,611 -

    Dividend payable 12,676,038 12,676,038 12,676,038 -

    Trade and other payables 111,184,310 111,184,310 111,184,310 -

    141,730,959 142,528,911 142,528,911 -

    Company Carrying Contractual 6 months 6-12

    amount cash flows or less months

    N'000 N'000 N'000 N'000

    Non-derivative financial liabilities

    31st December 2016

    Unsecured bank loans 17,000,000 17,797,952 17,797,952 -

    Bank overdraft 870,611 870,611 870,611 -

    Dividend payable 12,676,038 12,676,038 12,676,038 -

    Trade and other payables 111,820,584 111,820,584 111,820,584 -

    142,367,233 143,165,185 143,165,185 -

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

    different amounts. However, as disclosed in note 25, the Company may, by 5 days written notice prior to the final maturity

    date of the unsecured bank loans, rollover any outstanding loans. If this written notice is not provided as required, the

    payment of any outstanding loan amount may fall due immediately on maturity.

    The Company has contingent liabilities in respect of guarantees provided to certain bankers relating to loans obtained by

    the staff from the banks amounted to N3,754,195,156 (2016: N3,556,152,441), which represents its maximum liquidity

    exposure. The guarantee provided by the Company is backed by the employees' gratuity.

    (c) Market risk

    Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the

    Company's income or the value of its holdings of financial instruments. The objective of market risk management is to

    manage and control market risk exposures within acceptable parameters, while optimizing the return.

    The Company manages market risks by keeping costs low through various cost optimization programs. Moreover, market

    developments are monitored and discussed regularly, and mitigating actions are taken where necessary.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    105

    30. Financial instruments - financial risk management and fair values (Cont’d)

    Currency risk

    The Company is exposed to currency risk on sales and purchases and borrowings that are denominated in a currency

    other than the functional currency of the Company, which is the Naira. The currencies in which these transactions are

    primarily denominated are Euro (EUR), US Dollars (USD) and Pounds Sterling (GBP). The currency risk is the risk that the

    fair value or future cash flows of a financial instrument will fluctuate due to the changes in foreign exchange rates.

    In 2017, the year-end exchange rate of the Naira against the US dollar at the NIFEX which was the primary market utilized

    by the Company moved to approximately N325 vs the year-end 2016 rate of N315. This devaluation had negative

    translational and transactional impact on the company's financial statements.

    In managing foreign currency risk, the Company aims to ensure the availability of these foreign currencies and to reduce

    the impact of short-term fluctuations on earnings. The Company participates in financial instruments provided by the

    Central Bank of Nigeria including forward contracts and futures. Over the longer term, however, permanent changes in

    foreign exchange rates and the availability of foreign currencies, will have an impact on profit.

    Exposure to currency risk

    The Company's transactional exposure to British Pounds (GBP), US Dollar (USD) and Euro (EUR) is as follows:

    31st December 2017 31st December 2016

    In thousands EUR GBP USD EUR GBP USD

    Financial asset

    Group receivables 577 19 9 581 - -

    Cash and cash equivalent 146 124 971 526 207 851

    Deposit for imports 16,802 - - 27,671 - -

    Financial liability - - -

    Group payables (81,140) - (2,665) (70,473) - (76)

    Trade Payables (1,444) (235) (129) - - -

    Net exposure (65,059) 92 (1,814) (41,695) 207 775

    Sensitivity analysis

    A weakening of the Naira, as indicated below, against the EUR, USD and GBP at 31st December would have increased

    (decreased) profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate

    variances that the Company considered to be reasonably possible at the end of the reporting period and has no impact on

    equity. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is

    performed on the same basis for 2016, albeit that the reasonably possible foreign exchange rate variances were different,

    as indicated below.

    Increase/(decrease) in profit or loss

    N'000

    31st December 2017

    EUR (5 percent weakening of the Naira) (1,296,008)

    GBP (5 percent weakening of the Naira) (2,062)

    USD (5 percent weakening of the Naira) (30,080)

    31st December 2016

    EUR (5 percent weakening of the Naira) (682,730)

    GBP (5 percent weakening of the Naira) 3,287

    USD (5 percent weakening of the Naira) 5,985

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    106

    30. Financial instruments - financial risk management and fair values (Cont’d)

    A strengthening of the Naira against the above currencies at 31st December would have had the equal but opposite effect on

    the above currencies to the amounts shown above, on the basis that all other variables remain constant.

    The following significant exchange rates were applied:

    Average rate Reporting date spot rate

    2017 2016 2017 2016

    N N N N

    Euro 365.93 288.69 398.41 321.58

    GB Pounds 417.38 348.11 448.32 374.57

    US Dollar 323.82 261.35 331.66 304.50

    (d) Interest rate risk profile

    In managing interest rate risk, the Company aims to reduce the impact of short-term fluctuations on earnings. Over the

    longer term, however, permanent changes in interest rates would have an impact on profit. The Company opts for a mix of

    fixed and variable interest rates in its financing operations, combined with the use of other financial instruments. Currently,

    The Company's interest rate position is more weighted towards floating than fixed. Financial instruments used during the

    period include commercial papers.

    At the reporting date the interest rate profile of the Company's interest-bearing financial instruments was:

    Carrying amount

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Fixed rate instruments

    Unsecured bank loans (8,000,000) (8,000,000) (17,000,000) (17,000,000)

    Bank overdraft (470,930) (470,930) (870,611) (870,611)

    Financial liabilities (8,470,930) (8,470,930) (17,870,611) (17,870,611)

    The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore

    a change in interest rates at the end of the reporting period would not affect profit or loss.

    (e) Operational risk

    Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Company's

    processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks

    such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.

    Operational risks arise from all of the Company's operations.

    The Company's objective is to manage operational risk so as to balance the avoidance of financial losses and damage to

    the Company's reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and

    creativity.

    The primary responsibility for the development and implementation of controls to address operational risk is assigned to

    management and the executive committee. This responsibility is supported by the development of overall Company

    standards for the management of operational risk in the following areas:

    ● documentation of processes, controls and procedures

    ● periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks

    identified by the risk management committee

    ● training and professional development of employees

    ● appropriate segregation of duties, including the independent authorization of transactions

    ● monitoring of compliance with regulatory and other legal requirements

    ● requirements for reporting of operational losses and proposed remedial action

    ● development of contingency plans for various actions

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    107

    30. Financial instruments - financial risk management and fair values (Cont’d)

    (e) Operational risk (cont'd)

    ● reconciliation and monitoring of transactions

    ● development, communication and monitoring of ethical and acceptable business practices

    ● risk mitigation, including insurance when this is effective.

    ● monitoring of business process performance and development and implementation of improvement mechanisms

    thereof

    Compliance with the Company's standards, established procedures and controls is supported by periodic reviews

    undertaken by Internal Audit. The results of Internal Audit reviews are discussed with management to which they relate,

    with summaries submitted to the Audit Committee and senior management of the Company at Assurance Meetings.

    (f) Capital management

    The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to

    sustain future development of the business. Management monitors the return on capital, which the Company defines as

    result from operating activities divided by total shareholders' equity. Management also monitors the level of dividends to all

    shareholders.

    The Company monitors capital using adjusted debt to equity ratio. At the end of the reporting period, adjusted net debt to

    capital ratio was as follows:

    Group Company Group Company

    2017 2017 2016 2016

    N'000 N'000 N'000 N'000

    Total liabilities 203,929,666 204,575,606 202,251,766 202,853,439

    Less: cash and bank (15,866,954) (15,865,776) (12,156,432) (12,155,254)

    Adjusted net debt 188,062,712 188,709,830 190,095,334 190,698,185

    Total equity 178,209,925 178,150,934 165,913,768 165,805,542

    Adjusted debt to capital ratio 1.06 1.06 1.15 1.15

    There were no changes in the Company's approach to capital management during the year. The Company is not subject to

    externally imposed capital requirements.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    108

    (g) Accounting classification and fair values

    Fair values versus carrying amounts

    The fair values of financial assets and liabilities, versus the carrying amounts are shown in the statement of financial

    position, are as follows:

    Group 31st December 2017 31st December 2016

    Note Carrying Fair value Carrying Fair value

    amount amount

    N'000 N'000 N'000 N'000

    Assets carried at

    amortised cost

    Other receivables (non-current) 17 551,862 551,862 623,331 623,331

    Trade and other receivables 20 20,384,112 20,384,112 19,974,024 19,974,024

    Cash and cash equivalents 22 15,866,954 15,866,954 12,156,432 12,156,432

    36,802,928 36,802,928 32,753,787 32,753,787

    Liabilities carried at

    amortised cost

    Unsecured bank loans 25 8,000,000 8,000,000 17,000,000 17,797,952

    Bank overdraft 22 470,930 470,930 870,611 870,611

    Dividend payable 24b 8,028,742 8,028,742 12,676,038 12,676,038

    Trade and other payables 29 127,947,023 127,947,023 111,184,310 111,184,310

    144,446,695 144,446,695 141,730,959 142,528,911

    The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial

    position, are as follows:

    Company 31st December 2017 31st December 2016

    Note Carrying Fair value Carrying Fair value

    amount amount

    N'000 N'000 N'000 N'000

    Assets carried at

    amortised cost

    Other receivables (non-current) 17 551,862 551,862 623,331 623,331

    Trade and other receivables 20 20,384,112 20,384,112 19,974,024 19,974,024

    Cash and cash equivalents 22 15,865,776 15,865,776 12,155,254 12,155,254

    36,801,750 36,801,750 32,752,609 32,752,609

    Liabilities carried at

    amortised cost

    Unsecured bank loans 25 8,000,000 8,000,000 17,000,000 17,797,952

    Bank overdraft 22 470,930 470,930 870,611 870,611

    Dividend payable 24b 8,028,742 8,028,742 12,676,038 12,676,038

    Trade and other payables 29 128,646,043 128,646,043 111,820,584 111,820,584

    145,145,715 145,145,715 142,367,233 143,165,185

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    30. Financial instruments - financial risk management and fair values (Cont’d)

    109

    Trade and other receivables, bank overdrafts dividend payables and trade and other payables are the Company's short

    term financial instruments. Accordingly, management believes that their fair values are not expected to be materially

    different from their carrying values.

    The discounted cash flow valuation technique has been used to determine the fair value of the unsecured bank loans and

    other long term receivables. The valuation model considers the present value of expected cash flows discounted using

    market related interest rates as follows:

    2017 2016

    Unsecured bank loans (level 2) 19.9% 19.3%

    The future cash flows are based on contractual amounts and considers the probability of occurrence of the cash flow.

    There are no significant unobservable inputs. The fair values were determined on the same basis in prior year and there

    have been no transfers between levels during the year.

    31 Operating leases

    Leases as lessee

    The Company leases a number of offices, warehouse and factory facilities under non-cancellable operating leases. During the

    year ended 31st December 2017, an amount of N492 million was recognized as an expense in profit or loss in respect of operating

    leases (2016: N416 million). Lease rentals are paid upfront and included in prepayments, which are amortised to the profit or loss

    over the life of the lease.

    32. Provision

    The company has no provision (2016: N500m) related to claims from suppliers, which arose in 2016. The most likely outcome had

    been fully provided for in 2016.

    33. Contingencies

    (a) Guarantees and contingent liabilities

    Contingent liabilities in respect of guarantees provided to certain banks in respect of loans obtained by the staff from the

    banks amounted to N3.8 billion (2016: N3.6billion). This guarantee is backed by employees' gratuity. Accordingly,

    management believes that it is not probable that an outflow of resources embodying economic benefits will be required to

    settle the obligation.

    Contingent liabilities in respect of guarantees provided to the Nigerian Customs in respect of customs duty on behalf of the

    Company amounted to N3.6 billion (2016: N3.6 billion) which represents its maximum liquidity exposure.

    (b) Pending litigation and claims

    There are certain lawsuits and claims pending against the Company in various courts of law which are being handled by

    external legal counsels. The contingent liabilities in respect of pending litigation and claims amounted to N9 billion (2016:

    N1,558 billion) as at 31st December 2017. In the opinion of the Directors and based on independent legal advice, the

    Company's liabilities are not likely to be material, but the amount cannot be determined with sufficient reliability thus no

    provision has been made in these financial statements.

    (c) Financial commitments

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

    affairs of the Company, have been taken into consideration in the preparation of these financial statements.

    In the normal course of business, the company uses letters of credit to import materials. The total value of open letters of

    credit as at 31 December was N7,521 million.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    110

    34. Related parties

    (a) Parent and ultimate controlling entity

    Related parties include the parent company, Heineken N.V. and Heineken group entities. Directors, their close family

    members and any employee who is able to exert significant influence on the operating policies of the Company are

    considered as related parties. Key management personnel are also regarded as related parties. Key management

    personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the

    entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

    As at the year ended 31st December 2017 Heineken Brouwerijen B.V., Distilled Trading International B.V. and Heineken

    International B.V. owned 37.76% and 15.47%, and 2.72% respectively of the issued share capital of Nigerian Breweries

    Plc. The ultimate holding company is Heineken N.V.

    The Company has transactions with its parent, and other related parties who are related to the Company only by virtue of

    being members of the Heineken Group. The total amounts due to related parties by the nature of the transaction are shown

    below:

    Transaction value Balance due (to)/from

    2017 2016 2017 2016

    N'000 N'000 N'000 N'000

    Purchases - other related parties (32,974,346) (25,149,337) (14,841,226) (7,452,975)

    Contract brewing services with: - - - -

    - Other related parties (1,759,707) (1,863,739) (596,889) 168,980

    Technical Service fees & royalties

    - Parent (809,685) (474,961) (233,926) (440,501)

    - Other related parties (8,134,195) (8,536,689) (1,826,280) (5,568,830)

    Total Technical and Royalty (8,943,880) (9,011,650) (2,060,206) (6,009,331)

    Sales and others

    - Other related parties 752,703 574,061 (9,481,569) (472,122)

    All outstanding balances with these related parties are to be settled in cash within twelve months of the reporting date.

    None of the balances are secured nor bear interest.

    (b) Key management personnel compensation

    In addition to their salaries, the Company also provides non-cash benefits to directors and executive officers, and

    contributes to a post-employment defined benefit plan on their behalf. In accordance with the terms of the plan, directors

    and executive officers retire at age 60 and are, including their spouses, entitled to receive post- employment benefits.

    Executive officers also participate in the Heineken Group share-based payment plan (see note 27) and the Company's

    long service awards scheme. This programme awards a certain sum of cash benefit which accrues to the recipient on

    graduated periods of uninterrupted service. Key management personnel compensation comprised:

    2017 2016

    N'000 N'000

    Short term employee benefits 2,557,896 2,101,520

    Long term employee benefits:

    Post-employment benefits 116,349 110,380

    Share based payments 58,154 153,621

    2,732,399 2,365,521

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    111

    (c) The Nigerian Breweries-Felix Ohiwerei Education Trust Fund

    The Nigerian Breweries-Felix Ohiwerei Education Trust Fund (The Trust Fund) is an unconsolidated sponsored structured

    entity incorporated by Nigerian Breweries Plc in November 1994 as a charitable Trust for the advancement of education at

    all levels in Nigeria. The company made a capital grant of N100 million to The Trust Fund in 1994 which The Trust Fund has

    continued to invest in quoted shares and fixed deposits. The capital grant was recognised as an expense by the Company

    in the year it was made. The proceeds from the investments are disbursed solely for the promotion of education in Nigeria.

    The Company is not exposed to variability of returns from its involvement in The Trust Fund. According to the constitution

    of The Trust Fund, the Company has no residual interest in The Trust Fund on its dissolution. As a result of the above, The

    Trust Fund has not been consolidated.

    The Company provides managerial support to The Trust Fund at no cost and intends to continue to provide the support into

    the future. During the year, the Company paid for certain expenses of The Trust Fund for which it was reimbursed at cost.

    As at year end The Trust Fund held 32,451,680 (2015:32,451,680) number of shares in the Company.

    (d) Other related parties

    The Company has entered into a 2-year rental agreement with ANAP Holdings Limited, an entity controlled by Mr. Atedo

    N.A. Peterside, a non-executive director of the Company, for a rental fee of N38.1 million.

    35. Subsequent events

    There are no significant subsequent events, which could have had a material effect on the state of affairs of the Group as at 31st

    December 2017 that have not been adequately provided for or disclosed in the financial statements.

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    112

    36. Condensed financial data of consolidated entities

    Benue

    Elimination Nigerian Bottling

    Group entries Breweries Company

    N'000 N'000 N'000 N'000

    ASSETS

    Property, plant and equipment 195,230,394 195,050,394 180,000

    Intangible assets and goodwill 98,277,166 98,277,166

    Investments 150,000 (679,625) 829,625

    Other receivables 551,862 551,862

    Prepayments 525,831 525,831

    Non-current assets 294,735,253 (679,625) 295,234,878 180,000

    Inventories 42,728,862 42,728,862

    Trade and other receivables 20,384,112 (700,021) 20,384,112 700,021

    Prepayments 1,038,885 1,038,885

    Deposit for imports 7,474,027 7,474,027

    Cash and cash equivalents 15,866,954 15,865,776 1,178

    Assets held for sale - -

    Current assets 87,492,840 (700,021) 87,491,662 701,199

    Total assets 382,228,093 (1,379,646) 382,726,540 881,199

    EQUITY

    Share capital 3,998,451 (5,220) 3,998,451 5,220

    Share premium 73,770,356 (743) 73,770,356 743

    Share based payment reserve 748,450 748,450

    Retained earnings 99,692,668 (762,164) 99,633,677 821,156

    Equity contribution reserve - - - -

    Equity attributable to owners of the Company 178,209,925 (768,127) 178,150,934 827,119

    Non-controlling interest 88,502 88,502

    Total equity 178,298,427 (679,625) 178,150,934 827,119

    LIABILITIES

    Loans and borrowings 8,000,000 8,000,000

    Employee benefits 13,209,837 13,209,837

    Deferred tax liabilities 26,666,864 26,666,864 -

    Non-current liabilities 47,876,701 - 47,876,701 -

    Bank Overdraft 470,930 470,930

    Current tax liabilities 19,833,967 19,780,887 53,080

    Dividend payable 8,028,742 8,028,742

    Trade and other payables 127,947,023 (700,021) 128,646,043 1,000

    Provisions - -

    Current liabilities 156,052,965 (700,021) 156,698,905 54,080

    Total liabilities 203,929,666 (700,021) 204,575,606 54,080

    Total equity and liabilities 382,228,093 (1,379,646) 382,726,540 881,199

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    113

    36. Condensed financial data of consolidated entities (Cont'd)

    Condensed income statement

    Benue

    Elimination Nigerian Bottling

    Group entries Breweries Company

    N'000 N'000 N'000 N'000

    Revenue 344,562,517 344,562,517

    Cost of sales (201,013,357) (201,013,357)

    Gross profit 143,549,160 - 143,549,160 -

    Other income 2,218,588 2,218,588

    Marketing and distribution expenses (66,898,905) (66,898,905)

    Administrative expenses (21,747,783) (21,742,533) (5,250)

    Results from operating activities 57,121,060 - 57,126,310 (5,250)

    Finance income 172,074 (62,995) 172,074 62,995

    Finance costs (10,663,076) 62,995 (10,726,071)

    Net finance costs (10,491,002) - (10,553,997) 62,995

    Profit before tax 46,630,058 - 46,572,313 57,745

    Income tax expense (13,581,499) (13,563,021) (18,478)

    Profit after tax 33,048,559 - 33,009,292 39,267

    Profit for the year attributable to:

    Owners of the Company 33,044,357 - 33,009,292 35,065

    Non-controlling interest 4,202 - 4,202

    Profit for the year 33,048,559 - 33,009,292 39,267

    Condensed statement of comprehensive income

    Benue

    Elimination Nigerian Bottling

    Group entries Breweries Company

    N'000 N'000 N'000 N'000

    Profit for the year 33,048,559 - 33,009,292 39,267

    Actuarial losses (1,449,678) - (1,449,678) -

    Total comprehensive income for the year 31,598,881 - 31,559,614 39,267

    Total comprehensive income for the

    year attributable to:

    Owners of the company 31,594,679 - 31,559,614 35,065

    Non-controlling interest 4,202 - - 4,202

    Total comprehensive income for the year 31,598,881 - 31,559,614 39,267

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    114

    36. Condensed financial data of consolidated entities (Cont'd)

    Condensed statement of cash flows

    Benue

    Elimination Nigerian Bottling

    Group entries Breweries Company

    N'000 N'000 N'000 N'000

    Cash flows from operating activities

    Net profit 33,048,559 - 33,009,292 39,267

    Adjustments for:

    Depreciation and impairment loss 32,691,134 32,686,134 5,000

    Amortization of intangible assets 1,435,727 - 1,435,727 -

    Finance income (172,074) 62,995 (172,074) (62,995)

    Finance expenses 4,162,828 (62,995) 4,225,823 -

    (Gain)/loss on sale of property,

    plant and equipment 492,949 - 492,949 492,949

    Gratuity, employee benefit and share

    based payment charges 2,797,263 - 2,797,263 -

    Income tax expense 13,581,499 - 13,563,021 18,478

    Change in inventories (11,484,159) - (11,484,159) -

    Change in trade and other receivables (338,619) - (338,619) -

    Change in prepayments (109,148) - (109,148)

    Provisions (500,000) (500,000)

    Change in trade and other payables 27,231,034 - 27,293,780 (62,745)

    Change in deposit for imports 955,021 - 955,021 -

    Cash generated from operating activities 103,792,015 - 103,855,010 (62,995)

    Income tax paid (15,587,752) - (15,587,752) -

    Gratuity and Share Based payment paid (977,159) - (977,159) -

    Long service award paid (604,957) - (604,957) -

    VAT paid (14,571,625) - (14,571,625) -

    Net cash from operating activities 72,050,522 - 72,113,517 (62,995)

    Cash flow from investing activities

    Finance income 172,074 62,995 172,074 62,995

    Proceeds from sale of PP&E 106,890 - 106,890 -

    Acquisition of PP&E (32,121,578) - (32,121,578) -

    Acquisition of intangible assets (222,409) - (222,409) -

    Net cash (used)/from investing activities (32,065,023) 62,995 (32,065,023) 62,995

    Repayment of loans and borrowings (9,000,000) - (9,000,000) -

    Interest paid (2,836,435) (62,995) (2,899,430) -

    Dividends paid (24,038,861) - (24,038,861) -

    Net cash used in financing activities (35,875,296) (62,995) (35,938,291) -

    Net increase in cash and cash equivalents 4,110,203 - 4,110,203 -

    Cash and cash equivalents at 1st January 11,285,821 - 11,284,643 1,178

    Cash and cash equivalents at 31st December 15,396,024 - 15,394,846 1,178

    NOTES TO THE CONSOLIDATED AND

    SEPARATE FINANCIAL STATEMENTS (CONT’D)

    115

    2017 % 2016 %

    N'000 N'000

    Revenue 344,562,517 313,743,147

    Bought in materials and services

    - Imported (32,974,346) (25,149,337)

    - Local (187,418,544) (177,197,023)

    124,169,627 111,396,787

    Other income 2,218,588 615,662

    Finance income 172,074 416,503

    Value added by operating activities 126,560,289 100 112,428,952 100

    Distribution of Value Added

    To Government as:

    Taxes 13,563,021 11 11,226,137 10

    To Employees:

    Salaries, wages, fringe and end of service benefits 41,640,292 33 39,031,407 35

    To Providers of Finance:

    - Finance cost (interest expenses) 4,225,823 3 4,037,985 4

    Retained in the Business

    To maintain and replace;

    - Property, plant and equipment 32,686,134 26 28,268,009 25

    - Intangible assets 1,435,727 1 1,468,637 1

    To augment reserves 33,009,292 26 28,396,777 25

    Value added 126,560,289 100 112,428,952 100

    Dividends to shareholders from reserves 28,453,982 36,473,864

    Value added represents the additional wealth which the Company has been able to create by its own and its employees' efforts. This

    statement shows the allocation of that wealth between government, employees, providers of capital and that retained for future creation of

    more wealth.

    ADDITIONAL INFORMATION

    Value Added Statement

    ST FOR THE YEAR ENDED 31 DECEMBER

    116

    10%

    35%

    4%

    25%

    1%

    25%

    11%

    33%

    3%

    26%

    1%

    26%

    2017 DISTRIBUTION OF VALUE ADDED

    2016 DISTRIBUTION OF VALUE ADDED

    VALUE ADDED STATEMENT (CONT’D)

    117

    Taxes

    Salaries, wages and benefits

    Interest Paid

    Depreciation (Property, Plant and Equipment

    Intangibles

    Reserves

    Taxes

    Salaries, wages and benefits

    Interest Paid

    Depreciation (Property, Plant and Equipment

    Intangibles

    Reserves

    2017 2016 2015 2014 2013

    N'000 N'000 N'000 N'000 N'000

    Statement of comprehensive income

    Revenue 344,562,517 313,743,147 293,905,792 266,372,475 268,613,518

    Results from operating activities 57,126,310 52,908,411 62,269,368 66,860,899 69,171,377

    Profit before taxation 46,572,313 39,622,914 54,508,368 61,461,821 62,240,317

    Profit for the year 33,009,292 28,396,777 38,049,518 42,520,253 43,080,349

    Comprehensive income for the year 31,559,614 29,700,906 37,211,895 42,104,674 41,498,365

    Ratios

    Earnings per share (kobo) 413 358 482 562 570

    Share price at year end (Naira) 134.90 147.99 136.0 165.3 167.90

    Declared dividend per share (kobo) 358 460 470 575 300

    Dividend coverage (times) 1.16 0.78 1.02 0.98 1.90

    Net assets per share (kobo) 2,237 2,091 2,172 2,273 1,486

    Statement of financial position

    Employment of Funds

    Property, plant and equipment 195,050,394 190,996,700 197,108,847 193,569,624 153,366,133

    Intangible assets 98,277,166 99,477,826 100,612,728 97,969,253 53,563,357

    Investments 829,625 829,625 829,625 829,625 150,000

    Other receivables 551,862 623,331 321,509 189,710 158,884

    Prepayments 525,831 1,154,399 354,394 187,889 235,790

    Net current liabilities (69,207,243) (70,298,766) (83,175,570) (57,623,943) (55,010,246)

    Loans and borrowings (8,000,000) (17,000,000) - (24,670,000) (9,000,000)

    Employee benefits (13,209,837) (10,101,065) (11,903,504) (10,735,596) (9,274,733)

    Deferred tax liabilities (26,666,864) (29,876,508) (31,914,564) (27,833,732) (21,830,000)

    Net assets 178,150,934 165,805,542 172,233,465 171,882,830 112,359,185

    Funds Employed

    Share capital 3,998,451 3,964,551 3,964,551 3,781,353 3,781,353

    Share premium 73,770,356 64,950,103 64,950,103 4,567,967 4,567,967

    Share based payment reserve 748,450 571,106 365,702 234,340 50,114

    Retained earnings 99,633,677 96,319,782 102,953,109 102,733,836 103,959,751

    Equity contribution reserve - - - 60,565,334 -

    178,150,934 165,805,542 172,233,465 171,882,830 112,359,185

    The financial information presented above reflects historical summaries based on International Financial Reporting Standards. Historical

    financial information for the Group has not been presented.

    COMPANY FIVE-YEAR FINANCIAL SUMMARY

    118

    PERFORMANCE INDICATORS

    800

    1000

    TURNOVER VS PROFIT BEFORE TAXATION (BILLION NAIRA)

    Revenue Profit before taxation

    MARKET CAPITALISATION VS SHAREHOLDERS' FUND

    (BILLION NAIRA)

    Market Cap Shareholders fund

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    2013 2014 2015 2016 2017

    269 266 294 314 345

    62 61 55 40 47

    0

    200

    400

    600

    1200

    1400

    1600

    2013 2014 2015 2016 2017

    1270 1250

    1078

    1173

    1079

    112 172

    172

    166

    178

    119

    PERFORMANCE INDICATORS (CONT’D)

    -

    500

    1,000

    1,500

    2,000

    2,500

    3,000

    2013 2014 2015 2016 2017

    1,486

    2,273 2,172 2,091

    2,237

    570

    562

    482

    358

    413

    -

    200

    400

    600

    800

    1,000

    1,200

    2013 2014 2015 2016 2017

    300

    575

    470

    460 358

    EARNINGS PER SHARE VS DECLARED DIVIDEND PER SHARE

    (KOBO)

    EPS Declared DPS

    NET ASSET PER SHARE VS EARNINGS PER SHARE

    (KOBO)

    Net asset per share EPS

    570 562

    482

    358 413

    120


    Substantial Interest in Shares:

    According to the Register of Members, the following shareholders held more than 5% of the issued share capital of the Company on 31st

    December, 2017.

    Shareholder Number of Shares Percentage

    Heineken Brouwerijen B.V. 3,019,363,804 37.76

    Distilled Trading International B.V. 1,237,500,160 15.47

    Stanbic Nominees Nigeria Limited 1,061,865,402 13.28

    Total 5,318,729,366 66.51

    Statistical Analysis of Shareholding

    (a) The issued and fully paid-up Share Capital of the Company as at 31st December, 2017 was 7,996,902,051 Ordinary Shares of 50

    kobo each. According to the Register of Members, the same three companies listed in the last paragraph above, held more than

    10% of the Issued Share Capital as at 31st December, 2017. The remaining 2,678,172,685 shares (representing 33.49%) were

    held by other individuals and institutions.

    (b) The Registrars advised that the range of shareholding as at 31st December, 2017, was as follows:

    Range No. of Holders Holders% Units Units%

    1 - 1,000 45,697 41.00 21,053,515 0.26

    1,001 - 5,000 30,995 27.77 78,071,389 0.98

    5,001 - 10,000 9,640 8.65 71,005,838 0.89

    10,001 - 50,000 18,127 16.26 445,292,286 5.57

    50,001 - 100,000 4,641 4.16 323,460,294 4.16

    100,001 - 500,000 1,982 1.78 387,232,008 4.84

    500,001 - 1,000,000 213 0.19 148,335,149 1.85

    1,000,001 - 5,000,000 157 0.14 302,264,709 3.78

    5,000,001 - 10,000,000 19 0.02 132,070,434 1.65

    10,000,001 - 50,000,000 19 0.02 423,699,521 5.30

    50,000,001 - 100,000,000 4 0.00 322,998,636 4.04

    100,000,001 - 7,996,902,051 8 0.01 5,332,418,272 66.68

    111,462 100.00 7,996,902,051 100.00

    SHAREHOLDERS' INFORMATION

    Bonus issues

    Date Issued Ratio

    19 June 1976 One for two

    26 February 1977 One for one

    25 February 1978 One for five

    11 July 1979 One for three

    28 June 1980 One for four

    19 June 1981 One for four

    29 June 1983 One for four

    Date Issued Ratio

    25 June 1986 One for two

    27 June 1990 One for three

    30 June 1993 One for one

    28 June 1995 One for one

    30 June 1999 Two for three

    27 June 2002 One for one

    30 June 2004 One for one

    122

    Dividend Overview

    Members are hereby informed that Nigerian Breweries Plc declared the following dividends in the last twelve years:

    Financial Dividend No. Profit after Dividend Dividend per Date approved

    Year Taxation (N’000) (N’000) Share (kobo)

    2005 83 (Interim) 2,890,641 25 23rd November, 2005

    2005 84 8,254,557 6,050,050 80 3rd May, 2006

    2006 85 (Interim) 3,025,025 40 3rd October, 2006

    2006 86 10,900,524 7,865,064 104 23rd May, 2007

    2007 87 (Interim) 4,159,409 55 19th September, 2007

    2007 88 18,942,856 14,746,997 195 28th May, 2008

    2008 89 (interim) 7,562,752 100 16th September, 2008

    2008 90 (Interim) 14,368,868 190 4th December, 2008

    2008 91 25,700,593 3,781,281 50 20th May 2009

    2009 92 (Interim) 9,831,331 130 20th May 2009

    2009 93 (Interim) 11,343,844 150 13th January, 2010

    2009 94 27,910,091 6,730,680 89 19th May, 2010

    2010 95 (Interim) 8,696,497 115 19th May, 2010

    2010 96 30,332,118 9,453,203 125 18th May, 2011

    2011 97 38,408,846 22,687,687 300 16th May, 2012

    2012 98 38,042,714 22,668,113 300 15th May, 2013

    2013 99 43,080,349 34,032,170 450 14th May, 2014

    2014 100 (Interim) 9,453,381 125 22nd October, 2014

    2014 101 42,520,253 27,751,853 350 13th May, 2015

    2015 102 (Interim) 9,514,921 120 21st October, 2015

    2015 103 38,059,684 28,544,763 360 11th May, 2016

    2016 104 (Interim) 7,929,101 100 26th October, 2016

    2016 105 28,396,777 20,457,080 258 3rd May, 2017

    2017 106 (Interim) 24,010,924 7,996,902 100 25th October, 2017

    Unclaimed dividend warrants and share certificates.

    We hereby notify our numerous shareholders that some dividends arising from the list above have remained unclaimed as per our

    records. Also, a number of share certificates have been returned to us as unclaimed because the addresses on them could not be traced

    or the shareholders did not collect them from the Post Office in good time. The affected shareholders are hereby requested to contact the

    Registrars, First Registrars and Investor Services Limited, Plot 2 Abebe Village Road, Iganmu, P.M.B. 12693, Marina, Lagos, Nigeria.

    SHAREHOLDERS' INFORMATION (Cont’d)

    123

    MAJOR CUSTOMERS

    124

    1. A.O. Amuta & Sons Trading Co. Ltd.

    2. A.S. Yakubu & Sons (Nigeria)

    3. Abikka Trading Company Limited

    4. Achison Resources Ltd.

    5. Anaebo Global Services Limited

    6. Anason Associates Nigeria Limited

    7. Anayo Ejike & Sons Nigeria Ltd.

    8. Auscatec Merchants Ltd.

    9. Austino Enterprises

    10. Avutu Trading & Transport Company

    11. Bode Concern Ltd.

    12. Bolaji Karounwi

    13. Bufa Investment Company Limited

    14. C.N. Anyoha & Sons Limited

    15. Cele O. Que Enterprises Nig. Ltd.

    16. Chibidon Authentic Prize Ventures

    17. Chidi Ndupu Enterprises Limited

    18. Chrisemua & Sons Nigeria Ltd.

    19. Chuks & UC Nwaubani Investment Ltd.

    20. D - Dey Limited

    21. De Chimax Enterprises Nigeria

    22. Denike Agoro Enterprises

    23. Edla Stores Limited

    24. Eja Golden Motel Ltd.

    25. Emma Star Enterprises (Nigeria) Ltd.

    26. Ensik Global Ventures

    27. Ese & Ehis Ventures Limited

    28. Eso-Penco International Limited

    29. Everyday Mukon Enterprises

    30. Eze Libra Limited

    31. Fidelity Structures Ltd.

    32. Folky Merchant (Nig.) Limited

    33. Fortunes Renaissance Enterprises

    34. Franklouse Nig. Ltd.

    35. G.A. Dike and Sons Limited

    36. Ginika Store

    37. Glopet Resort Ltd.

    38. Hotels De James Nigeria Ltd.

    39 Ifejiofor & Sons

    40. Ifekwesi Ventures Limited

    41. Ifeoma Chukwuka Nig. Ltd.

    42. Innovation Era Nigeria Limited

    43. Isimemene Okoh Business Venture

    44. J. C. Moghalu & Sons Nigeria Ltd.

    45. J. Egwumba & Sons Nig. Ltd.

    46. J. Jocac Company Nigeria Limited

    47. J. Ogungbola & Sons Limited

    48. J.C. Onoh & Company Limited

    49. J.O. Akushie & Sons Nigeria Limited

    50. J.O. Azubogu & Co. Nig. Ltd.

    51. Jekok Nigeria Limited

    52. Jerry Alagbe & Sons Limited

    53. K.C. Investment Nigeria Limited

    54. Kele Geo & Sons Limited

    55. Ken Maduakor Group Limited

    56. King Paddy Investment Company Ltd.

    57. Lexican Investments Ltd.

    58. M.O. Nkala Nigeria Limited

    59. Magulf Global Enterprises

    60. Makt Biz Ents Limited

    61. Marcellinus & Brothers Elite Ltd.

    62. Mathtrice Nigeria Limited

    63. Mawlat Ventures Limited

    64. Ma-Zanas Nigeria Ltd.

    65. Mekus Stores Nigeria Limited

    66. MGB Integrated Ventures Nig. Ltd.

    67. Modafe Global Resources Nigeria

    68. Modupe Folarin Nigeria Limited

    69. Momoreoluwa Nig. Limited

    70. Moses & Kossy Nig. Enterprise

    71. Muscle Group of Company Nigeria Ltd.

    72. Nathan Ofoma & Sons Limited

    73. Ngozi Global Stores Ltd.

    74. Nkob & Fnmgbab Stores Limited

    75. O. E Investment

    76. O-Fage Ent. Nig. Ltd.

    77. Oficon Nigeria Limited

    78. Omotayo Stores

    79. Onike Stores Limited

    80. Our Line Ltd.

    81. P.N. Dibor & Company Ltd.

    82. Paddymann Nigeria Limited

    83. Patrick Telford & Company Limited

    84. Pauline-Chimex Nigeria Limited

    85. Prinwat Ventures Nigeria Ltd.

    86. R.N. Okeke & Sons

    87. R.A.Olaiya Limited

    88. Rayd Global Solution Ltd.

    89. Redemption Resources International

    90. Retail Supermarkets Nig. Ltd.

    91. Sabiu Hassan Nig. Enterprises

    92. Sammy Mautin Nig. Ltd.

    93. Senna Atlantic Limited

    94. Skyward Resources Ltd.

    95. Steve Imafidon & Sons Limited

    96. Tasho Nigeria Limited

    97. Tendy Nigeria Limited

    98. Thames Aghedo Enterprises Ltd.

    99. Tina U & Associate Ltd.

    100. Wilson Obioha & Sons Limited

    To:

    The Registrar

    First Registrars and Investor Services Limited

    Plot 2, Abebe Village Road, Iganmu

    P.M.B. 12692

    Lagos, Nigeria.

    Shareholder’s Full Name:

    Shareholder’s Address:

    Shareholder’s E-mail:

    Shareholder’s GSM Number:

    Single Shareholder’s Signature:

    Joint Shareholders’/Company Signatures:

    E-DIVIDEND FORM

    I/We hereby request that from now on, all dividend warrant(s) due to me/us from my/our holding(s) in NIGERIAN

    BREWERIES Plc, be paid directly to my/our Bank named below.

    (1)

    (1)

    (2)

    (2)

    Company Seal:

    Name of Bank:

    Branch Address of Bank:

    Bank Account No.

    Bank Sort Code:

    Bank Authorised Signatures & Stamp:

    Please include Page No.

    Please include Page No.

    Surname first

    Only Clearing Banks are acceptable

    No. of Shares

    Resolutions F o r A gainst Abstain

    ANNUAL GENERAL MEETING to be held in the Shell Hall,

    Muson Centre, Onikan, Lagos State on Friday, 20rth April,

    2018 at 10.00 a.m.

    I/WE*………………........………….…………………………….......................

    of …..….…….……………....………………………....…..................…………

    ……………………………………......……………..............……...………...

    being a member/members of NIGERIAN BREWERIES Plc hereby

    appoint**

    ……………….………………………………………..................................…..

    or failing him CHIEF KOLAWOLE B. JAMODU, CFR or failing him MR.

    OLUSEGUN S. ADEBANJI as my/our proxy to act and vote for me/us and

    on my/our behalf at the Annual General Meeting of the Company to be held

    on Friday, 20th April, 2018.

    Dated this…….……… day of ………........…………..…………………, 2018.

    Shareholder's signature ……………........................………………………….

    *Delete as necessary.

    This Proxy Form should NOT be completed and sent to the address overleaf

    if the member will be attending the meeting.

    Notes:

    i. A member (shareholder) who is unable to attend the Annual General Meeting is allowed

    by law to vote by proxy and this Proxy Form has been prepared to enable such

    shareholder exercise the right to vote despite not being physically present at the meeting.

    ii. The names of two Directors of the Company have been entered on the form to ensure

    that someone will be at the Meeting to act as your proxy, but if you wish, you may insert in

    the blank space on the form (marked**) the name of any person, whether member

    (shareholder) of the Company or not who will attend the Meeting and vote on your behalf

    instead of one of the Directors.

    iii. Please sign this Proxy Form and post or deliver it to reach the address overleaf not later

    than 10.00 a.m. on the 18th of April, 2018. If executed by a Corporation, the form must be

    sealed with the Common Seal or under the hand of an officer or attorney duly authorised.

    iv. The proxy must produce the Admission Card issued by the Registrar to obtain entry to the

    meeting.

    To declare a dividend.

    To re-elect Chief Samuel O.

    Bolarinde as a Director.

    To re-elect Mr. Franco M. Maggi as

    a Director.

    To re-elect Mr. Dr. Obadiah O.

    Mailafia as a Director.

    To re-elect Mrs. Ndidi N. Nwuneli,

    MFR as a Director.

    To approve the appointment of Mr.

    Jordi Borrut Bel as a Director.

    To authorise the Directors to fix the

    remuneration of the Independent

    Auditor.

    To elect members of the Audit

    Committee.

    To fix the remuneration of the

    Directors.

    To renew the general mandate for

    related party transactions.

    72nd

    PROXY FORM

    Please indicate with an "x" in the appropriate box how you

    wish your votes to be cast on the resolutions referred to

    above. Unless otherwise instructed, the proxy will vote or

    abstain from voting at his/her discretion.

    FIRST FOLD HERE

    SECOND FOLD HERE

    THIRD FOLD HERE AND INSERT

    Please affix

    postage stamp

    First Registrars and Investor Services Limited

    Plot 2, Abebe Village Road

    Iganmu

    P.M.B. 12692

    Marina, Lagos




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