Emerging

Stronger
A better Future

2021 INTEGRATED REPORT AND FINANCIAL STATEMENTS

About this Report
The Integrated Report for the year ended 30
June 2021 provides a holistic view of East African
Breweries Limited’s (EABL) business model. It
comprises information about activities, strategy,
approach to operating responsibly, financial, and
non-financial results. The aim is to comprehensively
report to our existing and prospective investors in
an integrated way to reflect how the organization
operates.

Framework
Our Integrated Report is prepared in accordance
with the International Integrated Reporting
Council’s Integrated Reporting Framework,
adhering to the fundamental concepts. The
Annual Financial Statements were prepared
in accordance with the International Financial
Reporting Standards (IFRS). The report is part of our
commitment to be transparent and accountable
to our stakeholders. The Group constantly
considers whether there are additional reporting
frameworks or metrics we could use to enhance
our disclosures.

Assurance
To enhance the integrity of our report,
the financial statements were audited by
PricewaterhouseCoopers LLP. Their independent
report in relation to the financial statements of the
Group is set out on pages 125 to 128 of this report.
 CONTENTS
Our Business Model 4
Our Value Creation Process 6
Stakeholder Engagement 8
Our Strategy 10
Financial Highlights 12
Executive Summary 14
EABL Overview
Chairman’s Statement 16
East African Breweries Limited (EABL) is the
leading branded alcohol beverage business Group Managing Director’s Statement 20
in East Africa, with an outstanding collection
of brands that range from beer and spirits to Sustainability 25
adult non-alcoholic drinks (ANADs), reaffirming Commercial Update 40
our standing as a total adult beverage (TAB)
company. Our extensive network of breweries, Our Brands 50
distilleries, and distribution facilities spans
across the six markets within which we operate
Our People 68
in East Africa, especially concentrated in the Compliance and Risk Management 76
three core markets of Kenya, Uganda and
Tanzania. Despite operating in East Africa, our Board of Directors 84
unique products can be found in more than 10
Senior Management 88
countries across Africa and beyond. The Group’s
diversity is an important factor in delivering Notice of Annual General Meeting 90
the highest quality brands to East African
consumers and long-term value to investors. Corporate Governance Statement 94
Our brands are an outstanding combination Annual Report and Financial Statements 109
of local beers and spirits together with
international premium spirits. These include: Corporate Information 110
Tusker, Guinness, Bell Lager, Serengeti Lager, Directors’ Report 112
Kenya Cane, Uganda Waragi, Smirnoff and
Johnnie Walker. We are proud of the brands Directors’ Remuneration Report 118
we make and the positive impact they have
in bringing people together, to celebrate life
Statement of Directors’ Responsibilities 124
everyday everywhere. We are passionate about Report of the Independent Auditor 125
alcohol playing a positive role in society as part
of a balanced lifestyle. Financial Statements 129
Principal Shareholders and Share Distribution 197
Proxy Form 198
Electronic Communications Consent Form 199
 Our Business Model

O
ur business operates with the price points to suit our consumers’ changing
simple purpose of supporting our
consumers in ‘Celebrating life every
lifestyles. We continuously invest in building
strong brands that play a positive role in
We are proud of our long
day, everywhere’. The consumer is thus at society. heritage of investing in
the heart of our business. Our performance
ambition ‘to create the best performing, most
Our business model is centered on country- individual markets within
specific strategies, which allow us the agility
trusted and respected consumer products to identify and shape consumer trends, the region and enriching
company in Africa’, coupled with our vision
‘to be the most celebrated business in every
as well as respond to market dynamics the community; as well
to support growth. We are a proud grain-
market in Eastern Africa’, guide how we to-glass business and remain steadfastly as building brands that
operate and every decision we make. focused on: continue to meet consumer
EABL operates across East Africa through • Producing quality beer, spirits, and adult
the following subsidiaries: Kenya Breweries non-alcoholic beverages (ANADs).
needs and bring joy to
Limited (KBL), Uganda Breweries Limited
• Investing in responsible marketing to build millions.
(UBL), Serengeti Breweries Limited (SBL) in
aspiration for high quality brands.
Tanzania, UDV (Kenya) Limited, East African
Beverages (South Sudan) Limited and East • Continuously innovating to unlock new
African Maltings Limited (EAML) in Kenya. opportunities and deliver new offerings
Although our business is concentrated in that meet changing consumer demands.
these markets, our brands are sold in more • Transforming sales execution and
than 10 countries across Africa and beyond. extending our reach to ensure our
The Group’s diversity is an important factor consumers can access and enjoy our
in delivering the highest quality brands brands every day, everywhere.
to East African consumers and long-term • Sourcing and producing locally where
value to East African investors. Our portfolio viable to support local communities.
and geographic reach enable us to deliver
• Playing a positive role in society and
sustainable performance and create value for
delivering value to our stakeholders and
our shareholders.
shareholders.
We are proud of our long heritage of
investing in individual markets within the
region and enriching the community; as well
as building brands that continue to meet
consumer needs and bring joy to millions. We
have a broad portfolio across categories and

4 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 ilele
PAMOJA M

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 5

 Our Value Creation Process

Business
Inputs
Activities

Financial Capital
Includes shareholders’ equity and debt. It is a critical
input in executing our business activities and in
generating, accessing and deploying other forms of
capital.
Read more on page 132

Manufactured Capital Consumer Sourcing Marketing

We have a regional network of sites devoted to insights We work with our We invest in world-
research and development, distillation, maturation, We have well- suppliers to procure class marketing to
brewing, warehousing and packaging of spirits and established high quality raw responsibly build
beer. proprietary data materials and vibrant brands that
Read more on page 44 tools used to services. resonate with our
generate insights, consumers.
understand
Our investment in property, plant and machinery are
and respond to
a source of competitive differentiation.
consumer interests
Read more on page 170 and preferences.

Human and Intellectual Capital

We are proud of our people, whose passion,
commitment and specialist skills make the
difference. Championing inclusion and diversity is
fundamental to driving engagement and achieving
the best possible outcomes for our business.
Innovation Distilling and Selling
Read more on pages 69-75 Using our deep Brewing We partner with
insights of trends, We distill, brew, our customers
Social and Relationship Capital we focus on bottle and distribute through our sales
We continue investing in communities where we driving sustainable our beer and spirits teams to reach our
live and work. We are committed to do our business innovations that brands, working to consumers daily.
the right way from grain to glass. provide new the highest quality
Read more on pages 25-38 products and of manufacturing
experiences for standards.
Natural Capital consumers.
We recognize that the threats to our environment
are urgent and growing, and we are committed to
taking actions to preserve the scarce resources.
Read more on pages 25-38

6 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Our Value Creation Process

Value
Created

Scale Global Giants: Johnnie Walker,

Leading total adult
Smirnoff, Baileys and Guinness are
beverage company in
among the global brands that we bring
Eastern Africa
to market with scale

99 99 years of
experience,
Agility in innovation: Focused on growing
share by innovating new offerings
since 1922 that meet changing consumer needs

Market Extensive footprint

leadership in in supply and
2 key markets distribution

+2 million people impacted Operating across 6 countries in

directly or indirectly by our East Africa, with 6 breweries and
water programmes 1 malting plant

Strong Working with a network of

iconic capable distribution partners and
brands over 110,000 retailers

A Winning Portfolio: Over 40 brands

Partnering with
within spirits and beer, making
over 60,000 farmers to supply
up East Africa’s largest and most
our raw materials
diverse portfolio of brands

Powerful Local Jewels: Some of the most Investing in

iconic and loved brands in East Africa – capacity building
Tusker, Serengeti and Bell Lager from Grain to Glass

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 7

 Stakeholder Engagement

Our purpose and values help guide our engagement.

Why we engage People Consumers Customers

Our people are at the core Understanding our consumers Our customer partners are
of our business. We aim to is key to growing our business experts in the products they
build a trusting, respectful and sustainably for the long term. buy and sell, as well as in the
inclusive culture so that every Consumer motivations, attitudes experiences they create and
individual feels highly engaged and behaviour form the basis deliver. We work with a wide
and can be their best. We want of our brand marketing and range of customers: big and
our people to feel their human innovations. We make our brands small, on-trade and off, digital
rights are respected and that with pride and want them to and e-commerce. Our passion is
they are treated with dignity. be enjoyed responsibly. On to ensure we nurture mutually
We are committed to creating occasions when consumers beneficial relationships that
opportunities for growth and to choose alcohol, we want them to deliver joint value and the best
a continuous learning culture. ‘drink better, not more’. outcome for all our consumers.

Our stakeholders’ • Prioritisation of health, safety • Choice of brands for different • A portfolio of leading brands
interests and wellbeing occasions that meets evolving
consumer preferences
• Investment in learning • Innovation in heritage brands
• Identification of
opportunities for employee and creation of new brands
opportunities that offer
growth and development • Responsible marketing profitable growth
• Ways of working, culture and • Great experiences • Insights into consumer
benefits programme • Product quality behaviour and shopper
• Contribute to the growth of • Sustainability credentials trends
our brands and our • Affordable products • Trusted product quality
performance • Innovation, promotional
• The promotion of inclusion support and merchandising
and diversity • Availability and reliable
supply and stocking
• Technical expertise

How we respond • Safety strategy anchored on • Broad portfolio of choices • Use of best practice sales
our Zero Harm goal that across categories and price analytics and technology
ensures everyone goes home points to support our retailers and
safely everyday • Insightful innovation that distributors
• Company-wide employee satisfies consumer preferences • Ongoing dialogue and
engagement surveys • Responsible advertising and account management
• Consistent talent and marketing that adheres to our support
performance management strict Diageo Marketing Code • Sales calls
approach • Active engagement and • Development of joined-up
• Extensive online learning and education to promote business plans
development material moderation and reduce the • Regular business updates
harmful use of alcohol
• Informative and up-to-date • Training through unique
employee communication • High-quality manufacturing offerings like the Diageo Bar
channels and environmental standards Academy

8 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Stakeholder Engagement

Suppliers Communities Investors Governments and regulators

Our suppliers and agencies are Investing in sustainable We want to enable equity The regulatory environment
experts in the wide range of growth means supporting and and debt investors to have an is critical to the success of
goods and services we require empowering the communities in-depth understanding of our our business. We believe it
to create and market our brands. where we live, work, source strategy and our operational is important that those who
By working with them, we
and sell. By ensuring we make and financial performance, so can influence policy, laws and
not only deliver high-quality
products marketed responsibly, a positive contribution, we can they can more accurately assess regulation understand our
but improve our collective help build thriving communities the value of our shares and the views. We also want to share
impact, ensuring sustainable and strengthen our business. opportunities to finance our information and perspectives
supply chains, reducing our business. on areas that can impact our
environmental impact and business and public health.
making positive contributions to
society.

• Developing strong, mutually • Impact of our operations on • Strategic priorities • Contribution to national
beneficial partnerships the local economy • Financial performance economic and development
• Collaborating to realise • Access to skills development priorities
• Corporate governance
innovation • Opportunities for • Tax, excise and illicit trade
• Leadership credentials,
• Fair contract and payment employment and supplier experience and succession • Positive drinking
terms opportunities programmes and impacts
• Executive remuneration policy
• Consistent performance • Improved access to water, • Wider sustainability agenda,
measurement • Shareholder returns
sanitation and hygiene including human rights,
• Environmental and social environmental impacts,
• Responsible use of natural
resources commitments and progress sustainable agriculture and
support for communities
• Gender equality, inclusion
and diversity • Corporate behaviour
• Transparency and
engagement

• Partnering with suppliers • Ongoing dialogue, annual • Results announcements • Ongoing dialogue
standard, our code for reviews • Investor roadshows • Collaboration on responsible
working with suppliers • Partnerships, including drinking initiatives and
• Meetings and calls
• Direct resolution process local raw material promotion of moderation,
supply partnerships • Annual General Meeting and strengthening industry
• Confidential, independent standards
• Learning for Life, our • Investors’ information on
whistleblowing helpline and
global training programme www.eabl.com • Participation in governments
website business and industry
for hospitality and retail • Participation in investor
• Supplier financing sector workers advisory groups
conferences
• Supplier performance • Community programme • Embedding business
measurement and design that includes gender integrity into the way
performance reviews equality and inclusion and we work
• Regular training on diversity considerations • Diageo Code of Business
sustainable farming practices Conduct
• Tree planting and water
to our farmers replenishment programmes
• Provision of drought resistant • Our community water,
seed varieties sanitation and hygiene
(WASH) programmes

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 9

 Our Strategy

Our strategy is underpinned by our passionate profitability and our own right to win. governments across the region in addressing
desire to serve our consumers with high Our strategy is delivered through four the health risks associated with consumption
quality brands to suit every occasion and executional priorities: bringing vibrancy and of illicit alcohol.
economic level, and our desire to deliver long dynamism to mainstream beer; exploding Delivery of our ambition is further reinforced
term shareholder value to our investors. We mainstream spirits with an affordable and by our laser focus on: building an effective
are committed to serving the communities aspirational portfolio; accelerating and route to consumers, ensuring our brands
in which we operate by ensuring alcohol winning in premium by building aspiration are highly accessible and available; investing
continues to play a positive role in society as and availability of our brands; and shaping across our supply chain from grain to glass:
part of a balanced lifestyle. new frontiers by recruiting new consumers guaranteeing supply through an advantaged
Our strategic ambition is to be one of the within total beverage alcohol. but fit for purpose value chain; and enforcing
best performing, most trusted and respected The informal sector is still the largest source of a culture of continuous evaluation to
consumer products company in Africa. We growth in the region, with as high as 50% of optimise our costs for maximum returns.
recently refreshed our strategic priorities to alcohol consumed and sold through informal Lastly, we pride ourselves in the reputation we
reflect the changing consumer trends and channels. Hence, we will continue to innovate continue to build and solidify as a respected
market dynamics, hence sharpening our at scale to provide safe and accessible partner in the community by enforcing a
focus on where to invest and win based alternatives to our value driven consumers. culture of integrity and compliance across
on an understanding of growth potential, We are also committed to partnering with the business.

Ambition
To create the best performing, most trusted and respected
consumer products company in Africa

Strategic Vibrant Explode Win in Shape New

imperatives Mainstream Mainstream
Beer Spirits Premium Frontiers

Aspirational and Accessible Innovations

Key enablers Route to Supply Efficient Growth /

Consumer Reputation Productivity
Footprint

Unlock Growth Through People and Organisation

10 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Our Strategy

Our Brands
Our broad portfolio consists of outstanding local jewels and international brands, reaching across categories, occasions and price points. We
endeavor to participate where we believe there is great consumer opportunity and growth potential.
A selection of our brands are included in the table below:

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 11

 Financial Highlights

Net Sales ( Kshs bn) Gross Profit (Kshs bn)

+3%
-2%
+15%
Net Sales Growth Gross Margin (%) +13%
"!! 86 "#! #!

"#!
83 38
(! 75 37
"!! 33
&!

"!!
12% 15% #! 46% 44% 44%
$! -9%

#!
+! !
! *#! !

!
F19 F20 F21 F19 F20 F21

Profit Before Tax (Kshs bn) Operating Cash Conversion

Profit Margin %
+! 18 &! +35ppt
-1% 16% : Profit Margin 113%
Excl. provisions$! 103%
22% 11 11
+! 68%
14% 13% !
! *+!
F19 F20 F21 F19 F20 103%

Net sales contribution by country

EABL REPORTED NET SALES BY REGION, F17 EABL REPORTED NET SALES BY REGION, F21

9% 15%
16%

19%

66%
75%

Kenya Uganda Tanzania

Sequential net sales recovery Unrelenting net sales recovery across segments
Kshs bn +15%
86
43% 5
0
75 6
10%

-3%
F20 Bottled Senator Spirits F21
Beer
-29%
F20 H1 F20 H2 F21 H1 F21 H2 Growth vs Prior Year +14% +3% +24%

12 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 13
 Executive Summary

Emerging
stronger:
A better future
Our company recorded 15%
E
ABL witnessed significant business growth in Fiscal year 2021 on the back of improved year-
growth in revenue to on-year operating environment and rapid adaptation of our ways of working to respond
to shifting consumer behaviour across East Africa. The COVID-19 pandemic continued to
Kshs 86 billion for the year disrupt our operations, impacting how we run our business and posing significant challenges
ended June 2021. Profit to our consumers. Nationwide curfews and the need for social distancing impacted sales in
bars and restaurants, as these on-trade channels operated within restricted opening hours in
before tax was up 2% to Kenya and Uganda, our largest markets.
Kshs 10.9 billion. The slower Notwithstanding, the EABL team executed our strategy with determination, consistency, and
profit growth was driven by clarity to deliver better, leveraging our wide portfolio of brands and route to market diversity
across East Africa.
the impact of cost inflation,
adverse foreign exchange Our company recorded 15% growth in revenue to Kshs 86 billion for the year ended June 2021.
Profit before tax was up 2% to Kshs 10.9 billion. The slower profit growth was driven by the
and tax charges. impact of cost inflation, adverse foreign exchange and tax charges.

Market Highlights for the Financial Year

Kenya: Kenya Breweries Limited (KBL) registered 10% year on year revenue growth, with H2
growing 45%, off-setting a 10% decline in H1. Performance was driven by expanding and
adapting the product portfolio to meet emerging channels and new consumer occasions
while continuing to invest ahead on our strategic brands.

14 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Executive Summary
Profit after tax

1%
Profit after tax for the period
however declined 1% to
Kshs 7 billion, impacted by
cost inflation, tax and foreign
exchange fluctuations.

Uganda: Uganda Breweries Limited (UBL) To deliver better margins, we maintained During our Fiscal year 2022, we will maintain
revenues grew 33% year-on-year, with beer our focus on cost efficiency, especially on our focus on investments in sustainability,
and spirits both recording double-digit our discretionary spending, and used the where we aim to deliver renewable energy
growth. Growth was driven by the business’ new and emerging channels to reach our and recycle our water. These are long-term
agility in response to the changing consumer customers. The adjustments we made in the aims, and we have resolved, despite the
shifts and emerging channels. The business business paid off as net sales increased to circumstances, to have sustainability top of
also invested in capacity expansion to support Kshs 86 billion, slightly higher than sales in mind among our people and partners. The
sales growth in line with EABL’s strategy. F19, demonstrating consistent growth. pandemic has proved that only the agile
and the innovative will survive in the long-
Tanzania: Serengeti Breweries Limited (SBL) Profit after tax for the year however term and we shall continue to approach
revenues were up 15%, with beer and spirits declined 1% to Kshs 7 billion, impacted by the improvement of our processes and the
both registering double-digit growth. The cost inflation, tax and foreign exchange impact of our investments in sustainability
business sustained strong growth through fluctuations. Further, the COVID-19 related with the same spirit.
investment behind the brands and capacity tax reliefs in Kenya on corporation tax and VAT
expansion for both beer and local spirits ended in December 2020, resulting in higher In highlights, some of the milestones we have
production. tax charges for the year as the rates reverted reached this year under each pillar include:
back to pre-COVID levels.
As we steered the first full year of the • Promoting Positive Drinking
pandemic, we maintained focus on the Uncertainty in the external environment More than 13 million people across
recovery of the business, cost management persists, despite the measures taken to deal the region were reached through the
to keep margins and the integrity of the with the COVID-19 pandemic and therefore positive drinking campaign and the Red
business. We also empowered our people to the need to conserve cash to support the Card under the ‘Cool Teens Don’t Drink’
execute better with less operating time. business. The Board of Directors does not campaign.
recommend a final dividend and is confident
The pandemic has been characterised that the strategy and other activities going • Championing Inclusion and Diversity
by interesting shifts in the way people forward will enable the company to get back The Science, Technical, Engineering
consume our products, channels they use to a financially assured position. and Mathematics (STEM) programme
and categories of beverages they consume. continued to prosper. We introduced all-
Realities brought about by the pandemic EABL’s performance this year demonstrates female packaging lines in Tanzania and
led us to pivot towards participation in low- good foundation for sustained growth. Uganda.
tempo and casual occasions, gatherings with Our optimism is boosted by ongoing • Preserve Water for Life
friends and families. vaccination efforts across our markets to Our Water of Life programmes across the
protect people. Whereas growth during the region replenished close to 200,000 cubic
Our understanding of this shift has driven year provides momentum for further growth, metres of water. More than 30,000 people
robust growth in our e-commerce and the investments we have made, the new in water stressed areas now have access to
off-trade sales. We now have our own channels we have adopted and consumer the life-giving resource.
e-commerce channel – partycentral.co.ke – trends adapted will potentially deliver a
and have developed partnerships with a set robust platform to extend F21 performance. • Accelerate to a Low-carbon World
of established e-commerce platforms that Our investment in new water recovery,
deliver to our customers. Even as off-trade Pursuing profit goes hand-in-hand with purification and reuse facilities yielded
channels naturally fuelled strong growth in responsible corporate citizenship - placing savings of more than 1.2 billion litres of
spirits, we steered our supply and commercial employees and community at the forefront water annually.
operations to respond to the shifts and of its operations. Under Diageo’s Society
extended our portfolio to drive beer. More of 2030: Spirit of Progress, EABL aims to deliver • Become Sustainable by Design
our beer is now available in cans, packed in a positive impact on society everywhere we More than 60,000 farmers across the
convenient formats and available in more off- live, work, source and sell. region supply us with barley and sorghum
trade channels for our consumers to enjoy. for brewing.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 15

 Chairman’s Statement

EABL’s business during the year grew +15%

in revenue compared to last year and +2%
profit before tax vs prior year. This was as a
result of the determination and resilience
of our employees combined with a strong
portfolio of brands, and route to market
across East Africa.

Dr. Martin Oduor-Otieno

Group Chairman

Overview We are proud of the socio-economic contribution we continue to

F
iscal year 2021 was our first full year operating in an make in the lives of our farmers, trade partners and communities
unprecedented global pandemic and I am pleased to report at large. Whereas deepening economic integration will help
that EABL has demonstrated remarkable organisational deliver growth and prosperity, we look forward to a balanced
resilience and character to emerge stronger. EABL’s business tax environment in all our markets to help us reap from our
during the year grew +15% in revenue compared to last year investments across our value chain.
and +2% profit before tax vs prior year. This was as a result of the Supporting our communities
determination and resilience of our employees combined with a
strong portfolio of brands, and route to market across East Africa. EABL’s ambition is to be the best performing, most trusted and
respected consumer products companies in the region and we
We responded with agility and remained focused on executing know we can only grow if our stakeholders prosper. Our US$5
smartly, leveraging emerging opportunities with consumers million “Raise the Bar” initiative is gathering pace across East
and trade partners. Our actions amidst this pandemic delivered Africa as we provide the much-needed support to thousands
significant efficiencies. We were also able to invest in the long- of bars impacted by Covid-19 in form of practical equipment,
term future of the business. We have invested in capacity digital skills and contactless technology that will help them
expansion in Uganda and Tanzania in line with the consumer implement new government guidelines and safeguard the
needs as well as an EABL owned e-commerce channel; party safety of their staff and consumers. I am pleased to say that we
central. are seeing immediate impact in outlets where we have provided
Regional Operating Environment this support; for instance, we are now seeing more outdoor
spaces in the outlets.
Even with the lingering socio-economic uncertainty, we have
witnessed varying levels of economic disruption across East Our efforts to promote positive drinking continued with
Africa as countries deploy different strategies to manage the pace, with more than 13 million people reached through the
spread of COVID-19 and save lives. We have redoubled our positive drinking campaigns. We have continued with the STEM
efforts to grow our business, leveraging consumer insights programme in our manufacturing sites and have introduced
to respond to shifts and purchasing behaviours to guarantee packaging lines in Tanzania and Uganda, fully run by our female
business growth and sustainability into the future. staff, in line with our diversity and inclusion agenda.

16 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Water recovery has been a significant part people, support innovation and the growth
of our sustainability program, and our of new channels for trade and increase our
replenishment efforts are bearing fruit. efforts to grow business across the region.
Our Water of Life programme is one of the Board Changes
key initiatives in this direction and in Fiscal
2021, we replenished close to 200,000 cubic Since the last Annual General Meeting,
metres and made water accessible to more Dayalan Nayager and Ory Okolloh joined
than 30,000 people. Our water recovery, the Board as non-executive directors. We
purification and reuse facilities have so far welcome them to the Board and look forward
helped save more than 1.2 billion litres of to their contribution in the months and years
water. to come. EABL’s ambition is to be one
We have expanded our farming community In January 2021, Andrew resigned from the of the best performing,
to over 60,000 across the region, ensuring role of Group Managing Director and CEO
of EABL and Mrs Jane Karuku was appointed
most trusted and respected
that as the business grows, the value is
shared more widely. to take the helm. We thank Andrew for his consumer products
invaluable stewardship during his tenure.
Emerging Stronger We are proud to welcome Jane to steer the
companies in the region
Looking ahead, we are optimistic about the company to the next level. and we know we can only
near to long-term future of this business. We
are especially pleased by the projections that
Appreciation grow if our stakeholders
point to economic rebound for Kenya and On behalf of the Board of Directors, I would prosper.
Uganda in 2021, after contracting in 2020. like to recognise and celebrate our customers,
We are glad that the General Elections in consumers, suppliers, partners and agencies
Tanzania and Uganda were completed with as well as the governments in the respective
minimal disruption to our business. Our countries in which we operate for your
Tanzania business continues to deliver good support. We also wish to recognize and
performance. celebrate our Management and employees
for their continued agility and resilience
Following the continued volatility throughout these difficult times. They have
occasioned by COVID-19 and the need to demonstrated deep commitment to the
conserve cash, the board of directors did not business, agility in a time of uncertainty, and
recommend any dividends for the year. the creativity and innovation that has enabled
We are witnessing significant resilience from the business to adapt and take lessons from
our consumers and believe that the ongoing the experiences of the pandemic. We have Looking ahead, we are
vaccine programmes will help expand no doubt that we will emerge stronger and
economic opportunities, as incomes slowly with confidence to look forward to a better optimistic about the near
revert to pre-pandemic levels. This will help future. I would also like to thank my fellow to long-term future of this
us unleash our full potential and investments EABL Board members and members of the
behind our brands. boards of our subsidiary companies for their business. We are especially
We are cautiously optimistic that the counsel, support and dedication throughout pleased by the projections
the year and for delivering a strong corporate
headwinds of the Covid-19 pandemic will
soon be behind us, and our business model governance environment. that point to economic
and strategy are resilient to deliver the rebound for Kenya and
targets of the business in the medium and
long-term. Going forward, we will continue
Dr. Martin Oduor-Otieno Uganda in 2021, after
to watch out for the best interests of our Group Chairman contracting in 2020.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 17

 Taarifa ya Mwenyekiti

Mapato ya EABL katika mwaka huo

yaliongezeka +15% ukilinganisha na
mwaka uliopita, nayo faida kabla ya ushuru
ikaongezeka +2% ukilinganisha na mwaka
uliotangulia. Ukuaji wa kibiashara wa EABL
katika mwaka huo ni matokeo ya kujitolea
kwa wafanyakazi wetu na ukakamavu wao,
pamoja na mseto wa bidhaa zetu bora na
pia matumizi ya njia za kuingia kwenye
masoko kote Afrika Mashariki.

Dr. Martin Oduor-Otieno

Group Chairman

Kwa ufupi Tunatumia vyema ujuzi wetu na maono kujibu mabadiliko

M
waka wa kifedha wa 2021 ulikuwa mwaka wa kwanza kwenye tabia na mitindo ya wateja katika matumizi ya bidhaa
kamili kwetu kuhudumu katika kipindi cha janga la na ununuzi na kuhakikisha tunakuwa na ufanisi siku za baadaye.
kiafya lililoathiri dunia yote. Na nina furaha kuwajulisha Tunajivunia mchango wa kijamii na kiuchumi tunaoendelea
kwamba EABL imedhihirisha ukakamavu na sifa nzuri, na kuutekeleza katika kufanikisha ustawi kwa wakulima wetu,
kuibuka ikiwa imara zaidi. Mapato ya EABL katika mwaka huo washirika wa kibiashara na jamii kwa jumla. Kukoleza
yaliongezeka +15% ukilinganisha na mwaka uliopita, nayo faida ufungamanisho wa kiuchumi kutafanikisha ukuaji wa ustawi,
kabla ya ushuru ikaongezeka +2% ukilinganisha na mwaka lakini tunatazamia kuwepo kwa mazingira ya usawa ya ushuru
uliotangulia. Ukuaji wa kibiashara wa EABL katika mwaka huo ni katika masoko tunayohudumu ili kutusaidia kuvuna kutoka kwa
matokeo ya kujitolea kwa wafanyakazi wetu na ukakamavu wao, uwekezaji wetu katika mfumo wa uzalishaji.
pamoja na mseto wa bidhaa zetu bora na pia matumizi ya njia za
kuingia kwenye masoko kote Afrika Mashariki. Kusaidia jamii zetu

Tulijibu changamoto zilizotokea kwa wepesi wa kuchukua Ndoto ya EABL ni kuwa miongoni mwa kampuni bora zaidi za
hatua na tulisalia kutekeleza mambo yetu kwa weledi, na uzalishaji wa bidhaa zinazoaminika zaidi na kuheshimiwa zaidi
kutumia fursa zilizojitokeza na wateja wetu na washirika wetu na wateja katika kanda hii. Tunafahamu kuwa tunaweza kukua
kibiashara. Matendo yetu wakati wa janga hili yalifanikisha tu iwapo wadau wetu watanawiri. Mpango wetu wa “Raise
uboreshaji mkubwa na kutuwezesha kuwekeza katika siku za the Bar”, kwa maana ya Kuinua Baa ambao ni wa thamani ya
usoni. Tumewekeza katika kupanua uwezo wetu Uganda na Dola za Kimarekani 5 milioni unashika kasi Afrika Mashariki
Tanzania kuendana na mahitaji ya wateja pamoja na mfumo wa ambapo tunatoa usaidizi unaohitajika sana kwa maelfu ya baa
kuuza bidhaa kupitia dijitali wa EABL ambao umepewa jina party zilizoathiriwa na Covid-19. Usaidizi huu ni kwa njia ya mitambo
central. ya kutumiwa kazini, ujuzi wa kidijitali na teknolojia ya kufanikisha
malipo kupitia kadi ili kusaidia wenye baa kutekeleza masharti
Mazingira ya Kibiashara katika kanda mapya ya serikali na kulinda wafanyakazi wao na wateja
Licha ya kutotabirika kulikokuwepo kijamii na kiuchumi, wao. Nina furaha kuwajulisha kwamba tunaona matokeo ya
tumeshuhudia mvurugiko wa kiuchumi wa viwango mbalimbali mpango huu katika baa ambazo tumezisaidia; kwa mfano, sasa
Afrika Mashariki kutokana na mataifa kuchukua mikakati tunashuhudia baa nyingi zikiwa na maeneo ya nje.
tofauti ya kudhibiti kusambaa kwa Covid-19 na kuokoa maisha. Juhudi zetu za kuhamasisha unywaji pombe kwa kuwajibika
Tumeongeza maradufu juhudi zetu za kukuza biashara yetu. zimeendelea pia, ambapo zaidi ya watu 13 milioni wamefikiwa

18 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

na kampeni zetu. Tumeendeleza pia muundo wetu wa biashara na mkakati wetu
mpango wetu wa STEM (Sayansi, Teknolojia, ni imara kutimiza malengo ya biashara katika
Uhandisi na Hisabati) katika viwanda vyetu kipindi kifupi na kirefu.
na kuanzisha vitengo vya kupakia bidhaa
Tukisonga mbele, tutaendelea kujali maslahi
vya wanawake viwandani Tanzania na
ya watu wetu, kusaidia uvumbuzi na ukuaji
Uganda. Hii ni kuendana na ajenda yetu ya
wa njia mpya za kufanya biashara, na
kukumbatia watu wa asili mbalimbali na
kujumuisha wote. kuongeza juhudi zetu kukuza biashara yetu
katika kanda hii.
Kuhifadhi maji imekuwa pia sehemu kubwa
Mabadiliko kwenye bodi
ya juhudi zetu za uendelevu na juhudi zetu Ndoto ya EABL ni kuwa
zinazaa matunda. Mpango wetu wa Water Tangu kufanyika kwa Mkutano Mkuu wa Kila
of Life (Maji ya Uhai) ni miongoni mwa mwaka uliopita, Dayalan Nayager na Ory miongoni mwa kampuni
mikakati yetu mikuu katika hili na katika Okolloh walijiunga na Bodi kama Wakurugenzi bora zaidi za uzalishaji
mwaka wa kifedha 2021, tulihifadhi karibu wasio watendaji. Tunawakaribisha kwenye
lita elfu 200,000 za maji na kuhakikisha maji Bodi na kusubiri kwa hamu mchango wao
wa bidhaa zinazoaminika
yanapatikana kwa karibu kwa watu zaidi katika miezi na miaka ijayo. Januari 2021, zaidi na kuheshimiwa zaidi
ya 30,000. Viwanda vyetu vya kuhifadhi, Andrew alijiuzulu kama Mkurugenzi Mkuu
kusafisha na kutumia tena maji kufikia sasa wa Kundi na Jane Karuku akapandishwa cheo
na wateja katika kanda
vimesaidia kuokoa zaidi ya lita 1.2 bilioni za
maji.
mahali pake. Tunamshukuru Andrew kwa kazi hii. Tunafahamu kuwa
Tumepanua pia jamii yetu ya wakulima hadi
yake zuri na kumkaribisha Jane kuendelea na
kukuza hii kampuni zaidi.
tunaweza kukua tu iwapo
wakulima 62,000 katika kanda, na kuhakikisha
Shukrani
wadau wetu watanawiri.
kwamba kadiri biashata yetu inavyokuwa,
thamani hii inawafikia wengi. Kwa niaba ya Bodi ya Wakurugenzi,
ningependa kuwatambua na kuwashukuru
Kujitokeza imara zaidi
wateja wetu, wanaotumia bidhaa zetu,
Tukitazama mbele, tuna matumaini kuhusu wanaotuuzia bidhaa, washirika wetu wa
siku sijazo za biashara yetu. Tunatiwa moyo kibiashara, mashirika na mamlaka, pamoja
hasa na makadirio ambayo yanadokeza na serikali katika mataifa tunayohudumu kwa
kwamba huenda uchumi Kenya na Uganda usaidizi wao. Tungependa pia kuwatambua
ukaimarika tena 2021, baada ya kudorora na kuwashukuru wasimamizi na wafanyakazi
2020. Tunafurahia pia kwamba uchaguzi
wetu kwa kujitolea kwao na ukakamavu wao
mkuu Tanzania na Uganda ulimalizika bila
kipindi hiki. Wamedhihirisha kujitolea kwao
kuathiri sana biashara yetu. Biashara yetu
sana kwenye biashara hii, wepesi wao wa
Tanzania inaendelea kuandikisha matokeo
kuchukua hatua kipindi cha changamoto, na
mazuri.
ubunifu na uvumbuzi ambavyo vimeisaidia
Kutokana na kutotabirika kulikosababishwa biashara yetu kujiboresha na kujifunza
na COVID-19 na haja ya kuhifadhi fedha, bodi kutokana na yaliyotokea wakati wa janga hili. Tukitazama mbele, tuna
ya wakurugenzi haikupendekeza mgawo wa
faida kwa mwaka huo.
Hatuna shaka kwamba, tutajitokeza tukiwa matumaini kuhusu siku
imara zaidi na tukiwa na imani na matumaini
Tunashuhudia ukakamavu wa kiwango ya siku sijazo za ufanisi. Ningependa pia sijazo za biashara yetu.
kikubwa kutoka kwa wateja wetu na kuwashukuru wanachama wenzangu Tunatiwa moyo hasa
tunaamini kwamba mipango ya utoaji chanjo kwenye Bodi ya EABL na wanachama wa
inayoendelea itapanua fursa za kiuchumi bodi za kampuni zetu tanzu kwa ushauri wao, na makadirio ambayo
zilizopo, huku mapato ya watu yakianza uungaji mkono na kujitolea kwao mwaka huo yanadokeza kwamba
kurejelea viwango vya kabla ya janga. Hii na pia kwa kutoa mazingira bora ya uongozi
itafungulia uwezo wetu kamili na uwekezaji wa kampuni.
huenda uchumi Kenya na
tulioufanya kwenye bidhaa zetu. Uganda ukaimarika tena
Tuna matumaini, lakini na tahadhari pia,
kwamba misukosuko iliyosababishwa na Dkt. Martin Oduor-Otieno 2021, baada ya kudorora
Covid-19 itapita hivi karibuni, na kwamba Mwenyekiti wa Kundi 2020.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 19

 Group Managing Director’s Statement

I am extremely proud of the way all our

employees adapted to the dynamic and
challenging environment, they have
continued to be resilient and agile in
the ways of working to ensure that our
brands are available to our customers and
consumers within the restricted opening
hours for bars and restaurants

Mrs. Jane Karuku

Group Managing Director and
Chief Executive Officer

Overview Another developing trend is that consumers are preferring

E
to meet in smaller groups at home and on special occasions.
ABL’s 2021 financial year was faced with continued volatility In response to this, we have increased investments on these
because of the COVID-19 pandemic. This was the second, emerging channels, building more partnerships with on-line
consecutive year that we saw disruption of our operations platforms, and resulting in the development of our own platform
with restrictive operating environment, curfews, lockdowns, and “party central”. We also continued to innovate in brands, pack
supply chain disruptions local, regional, and global. At a macro formats and packaging to respond to these dynamics.
level across our region we also experienced strained GDP, rising
inflation, depressed consumer spending and an increase in the Performance
number of vulnerable consumers. We delivered a strong set of results in a tough operating
I am extremely proud of the way all our employees adapted to environment. Net sales increased 15% driven by smart
the dynamic and challenging environment, they have continued investment behind brands, channel focus, and innovations. Our
to be resilient and agile in the ways of working to ensure that profit after tax for the period declined 1% to Kshs 7 billion mainly
our brands are available to our customers and consumers impacted by cost inflation, tax, and foreign exchange impact.
within the restricted opening hours for bars and restaurants. Our Further, the COVID-19 related tax reliefs in Kenya on corporation
response to this challenging environment yielded results with tax and VAT ended in December 2020, resulting in higher tax
the business reporting broad-based growth during the financial charges for the year as the rates reverted to pre-COVID levels.
year, with growth across all countries and categories. We have demonstrated strong recovery, recording growth vs
We had made the decision to continue investing smartly in the pre COVID-19 actuals. We also optimised and strengthened our
business despite the uncertainty in the operating environment. portfolio to achieve double digit growth across all markets, beer
We made strategic investments in CAPEX, Environment and A&P growing fast and spirits growing faster. Kenya delivered + 10%
on key brands. These decisions are starting to pay -off and more growth with resilient recovery across all categories. Through
importantly setting us up for success in the future. At the same the year there were curfews, lockdowns and trade restrictions
time, we have continued to manage our costs through various in bars and restaurants across the country, sometimes varying
cost efficiency initiatives. by county and level of restriction which disrupted the business.
There was a significant shift in consumer behaviour that saw
With the changing consumer behaviour and trade restrictions consumers shifting from on-premise consumption to in-
during the pandemic, we have seen a shift in how and where home consumption and off trade purchases. We experienced
consumers shop for their favourite brands. E-commerce has E-commerce channel explosion and the strengthening of the
become one of the biggest trends during the pandemic. off trade channel, and as a result, spirits grew faster + 24%, while

20 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 have dealt with the tough challenges that
Net sales increased, driven COVID-19 has brought into their professional
and personal lives. I sincerely thank all of
by smart investment them for their commitment and resilience.
behind brands, channel Sustainability
focus, and innovations. We continuously work towards ensuring
that the core objectives of sustainability
beer grew at +4%. Uganda delivered very are well integrated into our business model We continuously work
strong results +33%, both spirits and beer demonstrated in our new Diageo 2030 towards ensuring that
strategy. In doing so, we have implemented
growing strongly. Like in Kenya, there were
curfews, lockdowns, and trade restrictions sustainability projects across the region with the core objectives of
through the year. We increased capacity in a focus on community engagement and sustainability are well
empowerment. We have projects to improve
Uganda which offset the effects of the trade
restrictions. Tanzania delivered +15%, with water access and availability, including integrated into our business
robust growth across all categories. Unlike financing water infrastructure in Tanzania, model demonstrated in our
Kenya and Uganda impacting over 6,000,000
in Kenya and Uganda, there were no trade
restrictions in Tanzania, and the business people. We have similarly replenished and new Diageo 2030 strategy.
continued to perform strongly. reused over 198,000m3 of water on our sites.
To drive climate action, we have planted
Strategy thousands of trees through various tree-
We have a robust strategy, and we continue to planting events to promote nature-based
stay on course with the strategic imperatives. solutions to the climate crisis. We have also
We have a strong portfolio; we own the invested heavily in improving our sites across
biggest & fastest growing brands across the the region, to be more resource efficient, less
region. We invested ahead in A&P behind carbon emitting and to ensure that there is
strategic brands to build on the momentum zero waste to landfill. We support and build
and enablers so that we can emerge stronger. capability in our local communities through
We are continuously adapting to the a variety of farmer training programmes to
significant consumer, channel, and category over 60,000 farmers, empowering actors
shifts. Innovation has been key in driving across our supply chain. We raised US$5
growth across markets, categories, segments million in 2020 to directly support our bars
and the growing need for convenience, and restaurants negatively impacted by
by addressing emerging consumption the pandemic which is progressing well,
occasions with elevated brand experiences with over 5000 bartenders having received
combined with aspirational and accessible exceptional training through our Diageo Bar
innovations. The gin explosion in Kenya, new Academy, 66% of which are women.
pack formats to drive price accessibility are Looking forward
examples of how innovation has played a key
role in delivering growth. I am pleased with the results we have
delivered in the year. The results demonstrate
We also embedded a digital-first mindset our strong portfolio and the agility of
reaching millions of consumers and invested our employees to adapt to the dynamic
in an “in-house digital marketing agency” environment with pace. Whilst the threat
to build and drive in-culture content and of the pandemic remains, I am optimistic
ensure that we are always staying connected that with increased vaccination, the macro Throughout the pandemic,
with our consumers and the dynamic
environment.
and restrictive operating environment will
become better. We continue to have a
our priority has been the
Our Employees robust strategy, the business has a strong health and well-being of
Throughout the pandemic, our priority has
momentum and I believe the business will
emerge stronger.
our people, and we have
been the health and well-being of our People,
and we have provided support for the new
provided support for the new
ways of working, flexible working philosophy Mrs. Jane Karuku, ways of working, flexible
and well-being resources and support.
They have remained highly engaged and Group Managing Director and Chief working philosophy and well-
passionate about our business even as they Executive Officer being resources and support.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 21

 Taarifa ya Mkurugenzi Mkuu wa Kundi

Ninajivunia sana jinsi wafanyakazi wetu

walivyofanya mabadiliko kuendana na
mazingira ya changamoto yaliyojitokeza.
Wameendelea kuwa wakakamavu
na wepesi wa kubadilisha mambo
hata kazini kuhakikisha bidhaa zetu
zinaendelea kupatikana na kuwafikia
wateja katika muda mfupi ambao
wenye baa na migahawa waliruhusiwa
kuhudumu.

Jane Karuku
Mkurugenzi Mkuu wa Kundi

Kwa Ufupi Sambamba na kubadilika kwa mitindo ya wateja na vikwazo

M
kwenye biashara kipindi hicho cha janga, tumeshuhudia
waka wa kifedha wa 2021 kwa East African Breweries
mabadiliko katika jinsi wateja wanavyonunua bidhaa zao
Limited (EABL) ulikuwa wa changamoto kutokana
wazipendazo. Biashara ya mtandaoni imekuwa moja ya mitindo
na janga la COVID-19. Huu ulikuwa mwaka wa pili wa
mikuu wakati wa janga hili. Na mtindo mwingine unaojitokeza
kifedha mtawalia, ambapo shughuli zetu ziliathiriwa na mazingira
ni kwamba wateja wanapendelea zaidi kukutana katika makundi
ya kibiashara yenye vikwazo na masharti yaliyowekwa kudhibiti
madogo nyumbani au katika hafla maalum. Katika kujibu
kusambaa kwa virusi hivyo. Mifumo ya usambazaji iliathiriwa
hili, tumewekeza katika njia mpya ibuka za uuzaji, tukajenga
katika ngazi ya taifa, kanda na duniani. Katika ngazi ya kanda,
ushirikiano zaidi na majukwaa ya mtandaoni, na kutengeneza
ukuaji wa GDP ulipungua, kiwango cha mfumko kupanda, watu
mfumo wetu kwa jina “party central”. Tuliendelea pia uvumbuzi
kupunguza matumizi ya pesa na wateja waliopoteza mapato
na ubunifu katika bidhaa zetu na njia za kupakia bidhaa ili kujibu
kuongezeka.
mitindo hii mipya.
Ninajivunia sana jinsi wafanyakazi wetu walivyofanya mabadiliko
kuendana na mazingira ya changamoto yaliyojitokeza. Matokeo
Wameendelea kuwa wakakamavu na wepesi wa kubadilisha Tumedhihirisha kujikwamua na kuandikisha matokeo
mambo hata kazini kuhakikisha bidhaa zetu zinaendelea mazuri sana katika mazingira magumu. Mauzo halisi ya EABL
kupatikana na kuwafikia wateja katika muda mfupi ambao yaliongezeka kwa 15% kutokana na uwekezaji wa busara kwenye
wenye baa na migahawa waliruhusiwa kuhudumu. Hatua nembo za bidhaa zetu, kuangazia njia za uuzaji na uvumbuzi na
tulizozichukua katika mazingira hayo yenye changamoto zilizaa ubunifu. Faida yetu baada ya ushuru kwa mwaka huo ilishuka
matunda na biashara yetu iliandikisha ukuaji katika mwaka huo kwa 1% hadi Kshs 7 bilioni sana kutokana na mfumko wa bei,
wa kifedha. ushuru na athari za ubadilishanaji wa fedha za kigeni. Isitoshe,
Tulifanya uamuzi wa kuendelea kuwekeza kwa busara katika nafuu ya ushuru iliyokuwa imetolewa na serikali ya Kenya katika
biashara yetu licha ya mazingira kuwa ya kutotabirika. Tulifanya ushuru wa mashirika na pia VAT kutokana na COVID-19 ilimalizika
uwekezaji muhimu katika CAPEX (mitambo na miundo mbinu), Desemba 2020. Hii ilichangia kiwango cha ushuru kwa mwaka
Mazingira na katika Mauzo na Utangazaji (A&P) kwa nembo huo kuwa juu kwani kiwango chake kilirejea ilivyokuwa kabla ya
muhimu. Hatua hii zinaanza kuzaa matunda na muhimu zaidi COVID.
kwetu ni kwamba inatuandaa kwa ufanisi siku zijazo. Wakati huo, Tumedhihirisha kujikwamua kwa biashara yetu, ambapo kiwango
tumeendelea pia kudhibiti gharama kupitia mikakati mbalimbali. cha ukuaji sasa kimefikia kiwango cha kabla ya COVID-19.

22 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 thabiti; tunamiliki nembo za bidhaa zilizo
Mauzo halisi ya EABL kubwa zaidi na zinazokua kwa kasi zaidi
katika kanda. Tuliwekeza katika mauzo na
yaliongezeka kwa 15% utangazaji kuangazia nembo muhimu ili
kutokana na uwekezaji wa kuongeza nguvu matumaini tunayoyaona.
Tulibadilika pia kuendana na mabadiliko
busara kwenye nembo za kwenye mitindo ya wateja, njia za uuzaji na
bidhaa zetu, kuangazia njia mabadiliko ya vitengo. Uvumbuzi na ubunifu
vimekuwa viungo muhimu katika kufanikisha
Tuliendelea kujizatiti
za uuzaji na uvumbuzi na ukuaji katika masoko yote, vitengo na sehemu kuhakikisha uendelevu
ubunifu. kwenye soko. Hili ni kupitia kuangazia
mitindo mipya ya utumiaji wa bidhaa zetu
umefungamanishwa na
pamoja na kuboresha ubora wa bidhaa hizo muundo wetu wa biashara,
na upatikanaji wa bidhaa hizo. Umaarufu wa
Tulitumia vyema fursa na kuimarisha shughuli
‘gin’, njia mpya ya kupakia bidhaa ili kuifanya
kama inavyodhihirishwa
zetu na kutuwezesha kupata ukuaji wa zaidi
ya asilimia 10 katika masoko yote, mauzo ya
bei kuwa nafuu pamoja na haja ya kuwa na mkakati wetu mpya wa
rahisi kupatikana ni mifano ya jinsi uvumbuzi
bia yakikua kwa kasi na ya vileo vikali yakikua
umechangia katika kufanikisha ukuaji. Diageo 2030.
kwa kasi hata zaidi.
Tulifungamanisha mtindo wa kufikiria miradi kadha ya upanzi wa maji ili kujenga
Biashara yetu Kenya iliandikisha ukuaji wa 10%
digitali kwanza katika kuwafikia mamilioni
katika vitengo vyote na imekuwa ikiimarika suluhu ya asili kwa mzozo huu wa tabia
ya wateja na pia tukawekeza katika kitengo
tena. Katika mwaka huo, kulikuwa na amri ya nchi. Tumewekeza sana pia katika kuboresha
cha kufanya utangazaji na mauzo ya
watu kutotoka nje usiku, watu kuzuiwa kusafiri viwanda vyetu kote kwenye kanda, kutumia
kidijitali ndani ya biashara yetu ili kuandaa
na baa na migahawa kuwekewa masharti vyema rasilimali, kupunguza utoaji wa gesi
na kukuza utamaduni huo na kuhakikisha
mapya na wakati mwingine kufungwa. ya kaboni na kupunguza uzalishaji wa taka.
kwamba tunawasiliana na wateja wetu katika
Masharti haya wakati mwingine yalikuwa Tunasaidia na kujenga uwezo wa jamii
mazingira yanayobadilika kwa kasi.
tofauti kaunti hadi nyingine, na yalivuruga maeneo tunayohudumu kupitia mipango
biashara. Kulikuwa na mabadiliko makubwa Wafanyakazi wetu kadha ya mafunzo kwa wakulima zaidi ya
katika mitindo ya wateja ambapo wengi Wakati wote wa janga, tulipatia kipaumbele 60,000, na kuwezesha wadau mbalimbali
walianza kutumia bidhaa zetu manyumbani afya na maslahi ya Wafanyakazi wetu, na katika mfumo wa uzalishaji. Ili kuzisaidia jamii
badala ya kwenye biashara rasmi, na pia tumesaidia katika kuwezesha njia mpya zetu, tumetoa Dola za Kimarekani 5 milioni
manunuzi yalikuwa nje ya mifumo ya kawaida za kufanya kazi, mabadiliko katika muda kusaidia baa na migahawa iliyoathiriwa na
ya biashara. Tulishuhudia ongezeko kubwa na utaratibu wa kufanya kazi, rasilimali za janga la corona moja kwa moja. Kupitia
sana la biashara ya mtandaoni na pia mauzo kuboresha hali yao na kuwasaidia wafanyakazi hili, zaidi ya wahudumu wa baa 5,000
ya nje ya mfumo kutokana na hilo. Vileo vikali pia. Wameendelea kujitolea sana katika wamepokea mafunzo maalum kupitia kituo
viliimarika kwa kasi zaidi katika +24% na bia biashara hata walipokuwa wakikabiliana na chetu cha mafunzo cha Diageo Bar Academy,
ikakua kwa +4%. changamoto za COVID-19 katika maisha yao 66% wakiwa wanawake.
Uganda pia iliandikisha matokeo mazuri sana ya kikazi na kibinafsi. Ninawashukuru sana
kwa kujitolea kwao na ukakamavu wao. Tukisonga mbele
ambapo ukuaji ulikuwa +33%, vileo vikali na
bia kwa pamoja zote zikiimarika. Sawa na Uendelevu Nimefurahishwa na matokeo tuliyoyapata
Kenya, kulikuwa na amri ya watu kutotoka mwaka huu. Matokeo hayo yanadhihirisha
Tuliendelea kujizatiti kuhakikisha uendelevu uthabiti wa biashara yetu na wepesi wa
nje usiku, zuio la watu kusafiri na masharti umefungamanishwa na muundo wetu wa
yaliyoathiri biashara katika mwaka huo. wafanyakazi wetu kubadilika kuendana na
biashara, kama inavyodhihirishwa na mkakati
Tuliongeza uwezo wetu wa uzalishaji Uganda mabadiliko katika mazingira kwa haraka.
wetu mpya wa Diageo 2030. Katika kufanya
jambo lililopunguza athari za masharti Ingawa hatari za janga hili bado zipo,
hivyo, tumetekeleza miradi ya uendelevu
yaliyowekwa. nina matumaini kwamba utoaji chanjo
kote katika kanda tukilenga kushirikisha na
unapoongezwa, mazingira ya kibiashara
Tanzania iliandikisha ukuaji wa +15%, ambapo kuwezesha jamii. Tuna miradi ya kuimarisha
upatikanaji wa maji ikiwemo kufadhili yataimarika. Tutaendelea kuwekeza kwa
mapato yaliongezeka pakubwa katika
miundombinu ya maji Tanzania, Kenya na busara, biashara yetu inaendeleza kasi ya
vitengo vyote. Tofauti na Kenya na Uganda,
Uganda na kuwafaa watu zaidi ya 6,000,000 ukuaji, na nina imani tutaibuka tukiwa imara
hakukuwa na masharti yoyote yaliyowekwa
katika mataifa hayo yote. Kadhalika, tumetibu zaidi.
Tanzania, na biashara ilifanya vizuri sana.
na kutumia tena zaidi ya lita elfu 198,000 za
Mkakati
maji katika viwanda vyetu. Ili kuongoza hatua
Jane Karuku
Tuna mkakati mzuri, na tunaendelea kutimiza za kukabiliana na mabadiliko ya tabia nchi,
malengo ya mkakati huo. Tuna biashara tumepanda maelfu ya miche ya miti kupitia Mkurugenzi Mkuu wa Kundi

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 23

24 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
Sustainability

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 25

 Sustainability

Sustainability Agenda

E A B L P r o m o tin g
P o s itiv e D r in k in g
S u p p o r t in g In fo r m e d C h o ic e s :
P o s it iv e m e s s a g in g , k n o w le d g e a n d a w a re n e s s s p re a d t o
o v e r 1 3 ,0 0 0 ,0 0 0 p e o p le in t h e re g io n .

E A B L C h a m p io n in g
In c lu s io n & D iv e r s it y
W o m e n in L e a d e r s h ip :
• 1 4 % o f t h o s e in o u r s e n io r le a d e r s h ip ro le s a re w o m e n
• 7 .4 % in c re a s e in fe m a le h ire s : m a in ly a re s u lt o f o u r
g r a d u a t e p ro g r a m m e s fo c u s in g o n b u ild in g g e n d e r
d iv e r s it y
• 4 2 % o f t h e m e m b e r s o f o u r B o a rd o f D ire c t o r s a re w o m e n

B u s in e s s a n d h o s p it a lit y s k ills t r a in in g :
• O v e r 5 0 0 y o u t h t r a in e d o v e r t h e y e a r a n d e q u ip p e d w it h
s k ills t o im p ro v e t h e ir e m p lo y a b ilit y a n d a b ilit y t o s t a r t t h e ir
o w n e n t re p re n e u r ia l jo u r n e y
• 0 v e r 5 ,0 0 0 b a r t e n d e r s t r a in e d in o u r D ia g e o B a r A c a d e m y

E A B L D o in g B u s in e s s
th e R ig h t W a y
• C l o s i n g t h e G a p : U S $ 5 m i l l i o n r a is e d t o s u p p o r t o u r
b a r s & re s t a u r a n t s n e g a t iv e ly im p a c t e d b y t h e C o v id -1 9
p a n d e m ic .
• O c c u p a t i o n a l H e a l t h & S a f e t y : 3 6 % re d u c t io n in t o t a l
s a fe t y in c id e n t s a n d 1 0 0 % p a s s in s a fe t y a u d it s
• 6 5 % d e c lin e in re p o r t e d b re a c h e s o f c o d e o f c o n d u c t

26 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Sustainability

E A B L P io n e e r in g G ra in -
t o -G l a s s S u s t a i n a b i l i t y
C a r in g fo r W a te r :
Im p ro v e d w a t e r a v a ila b ilit y a n d a c c e s s fo r
3 0 ,0 0 0 p e o p le in K e n y a , U g a n d a a n d
T a n z a n ia b e t w e e n 2 0 2 0 a n d 2 0 2 1 .

B e t w e e n 2 0 2 0 –2 0 2 1 ,1 9 8 ,0 0 0 m 3 o f w a t e r u s e d
o n o u r s it e s w a s re p le n is h e d a n d re u s e d . B e t w e e n
2 0 1 6 t o d a t e , a t o t a l o f 1 ,0 0 6 ,1 3 8 m 3 o f w a t e r h a s
b e e n re p le n is h e d , t h is re p re s e n t s 3 0 .6 % o f o u r
t a rg e t t o re p le n is h 3 ,2 8 2 ,4 6 3 m 3 b y 2 0 2 6 .

T a c k lin g g lo b a l c lim a t e c h a n g e :
2 0 .6 % re d u c t io n in S c o p e 1 a n d 2 e m is s io n s
b e tw e e n 2019 an d 2021.

O u r s it e s a c ro s s K e n y a , U g a n d a a n d T a n z a n ia
u t ilis e a n a v e r a g e o f 8 2 % re n e w a b le e n e rg y .

A c h ie v in g z e r o w a s te :
W e m a in t a in z e ro w a s t e in o u r d ire c t
o p e r a t io n s a n d z e ro w a s t e t o la n d fi ll
t h ro u g h o u t o u r s u p p ly c h a in .

C o lla b o r a t in g w it h f a r m e r s t o
r e g e n e r a t e la n d s c a p e s :
W e p ro v id e o v e r 6 0 ,0 0 0 fa r m e r s a c ro s s K e n y a ,
T a n z a n ia a n d U g a n d a w it h a g r ic u lt u r a l s k ills a n d
re s o u rc e s t o s u p p o r t s u s t a in a b le fa r m in g p r a c t ic e s .

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 27

 Sustainability Kenya

T
he year 2020 marked the end of a
decade and the beginning of a very
crucial period for our business and
stakeholders across the value chain. We
marked the year with the launch of our 10-
year action plan, the 2030 strategy, which
substantially streamlined our goals into three
key pillars: Promotion of Positive drinking,
Championing Inclusion and Diversity and
Pioneering Grain to Glass Sustainability.
Each goal has a succinct set of targets and
we designed key performance indicators to
allow us to continually track and measure
our progress. We sought to give context
to our global strategy, capturing the more
urgent Environment Social & Governance
(ESG) issues in our region and ensuring
that we worked with the most vulnerable
communities. For us, this means a strong
focus on improving water availability and most water efficient breweries in the world.
access across the region as East Africa’s fresh We have two Effluent Treatment Plants (ETP)
water resources are among the lowest in the in Kenya which pre-treat effluent to the Last year, the EABL
world. In addition, the region is experiencing
the adverse conditions associated with global
Nairobi City Water and Sewerage Company Foundation announced
(NCWSC) standards before discharging it into
climate change and we are committed to
the sewer. We are happy to report that both
an investment of over
nature-based, community-led solutions to
the climate crisis. The statistics around gender
of our ETPs (namely, Kisumu and Tusker ETPs) Ksh 20 million towards
are compliant with the NCWSC discharge
equality in the region are also an area we
parameters. The Kshs 22 billion-sustainability
development of water
have worked to improve, including ensuring
access to equal opportunities, training and
project investment also entails water and sanitation projects
recovery plants (WRP) that use pre-treatment
financial support.
(ultra-filtration), hybrid reverse osmosis and
in the Lake Basin areas of
As part of our mission to be accountable and polishing superior reverse osmosis water Lukume, Olembo, Magunga,
transparent in tracking our progress against
Society 2030, we launched our inaugural
technology to further treat wastewater from
the effluent treatment plants. This allows the
Okiki Amayo and Ndhiwa in
sustainability report. The report provided an reuse of wastewater at our breweries. Kenya.
overview of the processes and mechanisms
we have in place to support our commitment Last year, the EABL Foundation announced
to doing business the right way. It highlighted an investment of over Kshs 20 million
the direct impact our sustainability work is towards development of water and
having on our various stakeholders and our
communities. We have made significant
strides in the past year of implementing our
strategy:
We continuously work towards ensuring
that the core objectives of sustainability
are well integrated into our business
model. In doing so, we have implemented
sustainability projects across the region
with a focus on community engagement
and empowerment. We have projects
to improve water access and availability,
including financing water infrastructure
in Tanzania, Kenya and Uganda. To reduce
wastage of water and prevent environmental
pollution from release of effluent water from
our factories, KBL invested in a wastewater
treatment and water recovery plant that
helps us saves up to 1.2 billion cubic liters
of water a year; positioning us amongst the

28 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Kenya Sustainability

sanitation projects in the Lake Basin areas around the lives of over 6,000 people. Initially,
of Lukume, Olembo, Magunga, Okiki Amayo
and Ndhiwa in Kenya. We implemented
the residents could only get water from a
borehole that was 4 kilometres away, at KShs
We have planted thousands
these projects in partnership with the Lake 300 for a 200 litre-drum. However, they now of tress through various
Basin Development Authority, Kenya Red
Cross Society (KRCS) and AMREF Health Africa
have water closer home, paying only Kshs 45 tree-planting events to
for the 200 litre-drum, and therefore saving
in Kenya and they are estimated to benefit Kshs 245 for every drum bought. promote nature-based
over 20,000 people in the region. We also
sponsored the construction of the Jangwani We have planted thousands of tress through solutions to the climate
water project in Ruaraka, which provides various tree-planting events to promote crisis.
clean water and sanitation to more than 3,000 nature-based solutions to the climate crisis.
people in the informal settlement. In Kikuyu, We have also invested heavily in improving
the Mbomboini water project has turned our sites across the region, to be more
to ensure that there is zero waste to landfill.
resource efficient, less carbon emitting and
We support and build capability in our local
communities through a variety of farmer
training programmes, empowering actors
across our supply chain. KBL for example
works with a network of 47,000 barley
and sorghum farmers across the country.
Through EAML, we support our smallholder
farmers through provision of free seeds,
free extension services and pre-financing of
inputs to help underwrite the minimum yield
per acre. During this year’s annual sorghum
field day in Meru County, an agricultural
field supervisor introduced a new sorghum
hybrid to farmers. This new hybrid was found
to be more resistant to pests, diseases and
seasonal changes and would greatly improve
the farmers’ crop yields. Giving the hybrid to
the thousands of smallholder farmers in our
network has given them an opportunity to
adequately feed their families while at the
same time earn more through selling the
yields to us and others. Similarly, the annual
barley field day was held in Mau Narok, where
an agronomist demonstrated to farmers the
importance of crop rotation with canola.
Adoption of the practice will increase soil
fertility, increase crop yield and reduce soil
degradation among other benefits. Our
farmers will therefore be in a position to earn
more from their farms.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 29

 Sustainability Kenya

To champion inclusion and diversity, we the most number of SDGs (13 out of the farmers, doctors, police officers, devolved
have specific programs catered to improve possible 17). The Sustainable Development county units and thousands of people in
the chances of people with disabilities to Goals Forum in Kenya applauded our informal settlements. The Free Sanitizer
earn a living and be a part of our supply commitment and efforts in mainstreaming Handover Campaign won the Social
chain. Recognizing the plight of people SDGs in our business model; becoming the Investment Campaign of the Year category in
living with disabilities (PWDs) due to their epitome of the positive impact of sustainable the Public Relations Society of Kenya Awards
underrepresentation in employment and development on economic, environmental (PRSK Awards) and emerged 1st runner up
supply chains across businesses, we set and social dimensions. We were named the for the Best Marketing Realignment Through
out to map out opportunities for inclusive COVID-19: Public Health Response category,
Private Sector Winner of The 2020 SDGs Kenya
employment along our value chain in a during the Marketing Society of Kenya
Awards during the National Sustainable
bid to empower them and improve their Awards (MSK Awards). Further, our efforts
Development Stakeholders Conference held
livelihoods. Through a phased approach last to promote positive drinking through the
in Mombasa. “Join The Pact” digital campaign emerged
year, we started with the inclusion of PWDs
among our contracted smallholder farmers Sustainability (PRSK and MSK) awards 1st runner up in Best Future Marketing –
in our local raw materials programme. We Sustainability Marketing Campaign category
When the country was in a quagmire due
engaged 39 farmers in Homa Bay County in an to the rising COVID-19 infections in March in the MSK Awards. The campaign was
inaugural initiative as we plan to scale up into last year, we stepped in to support the successful in its aim to drive commitment
formal employment in the next financial year. Government through the provision and from over two million people who pledged
Our target is to increase PWDs inclusion to at distribution of 135,000 litres of free alcohol- to never drink and drive.
least three percent across our value chain by based sanitizer worth Kshs 50 million to
2030. We have also designed unique training
and mentorship programmes to ensure that
women can influence decision-making and
access opportunities across our supply chain.
One of these programmes is our Science,
Technology, Engineering and Mathematics
(STEM) apprenticeship programme that
identifies and recruits gifted women across
various institutions in the region.
Our impact has been, and continues to be
felt across the region. We are major regional
players in the UN Global Compact, and have
been recognised for several sustainability
awards. KBL in particular has been a stunning
example for EABL, as well as an example
for the rest of the world. Most recently,
KBL was shortlisted for an award at the
World Sustainability Awards in the business
transformation category. KBL received special
recognition by KEPSA as the only corporate
in Kenya that has adopted and is tracking

30 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Kenya Sustainability

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 31

 Sustainability Tanzania

Kilimo-Viwanda Agro Scholarship program

Beneficiaries: 71
The Kilimo-Viwanda Scholarship programme
was established by SBL in 2020 to help bright
students from humble backgrounds pursue
college education in agricultural disciplines.
The program covers the cost of all academic-
related expenses including school fees for
the entire period of study – which is primarily
two to three years for diploma agricultural
courses.
The programme complements government
efforts to strengthen the economy of
Tanzania, which recently graduated into
a middle-income country, by enhancing
the existing pool of agricultural experts.
We believe that a strong agricultural sector
is vital in sustaining Tanzania’s economic
development, hence our resolve to support Kilimo viwanda brewery visit.
the training of sector experts.
The Kilimo-Viwanda programme builds on giving them an opportunity to link theory are found in Kilimanjaro, Arusha, Manyara,
both the student’s theoretical learning as and practice in their fields of study. Singida, Dodoma, Shinyanga, Mwanza, and
well as practical exposure through visits to This way, we believe, the students will be Mara regions. SBL supports them through
our breweries and farms. In partnership with inspired to become big farmers in the provision of free seeds, field technical services
a network of 400 farmers that produce and future thereby expanding the current and linking them to financial institutions to
sell cereals to SBL, we arrange filed visits for number of local farmers who supply barley, access credit facilities.
the students to spend time in the farms, sorghum and maize to SBL. The farmers

We believe that a strong

agricultural sector is vital
in sustaining Tanzania’s
economic development,
hence our resolve to
support the training of
sector experts.

Kilimo Viwanda beneficieries from Kaole College of Agriculture.

32 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Sustainability Tanzania

provided with safe and clean water in some

of the neediest areas.
In F21, SBL commissioned two projects: the
Machochwe project which is able to supply
clean and safe water to 6,000 people and
Basuto project, which benefits 3,800 locals.
SBL considers water key in the country’s
future prosperity and has always been ready
to collaborate with the government and
other partners in facilitating access to safe
and clean water.
SBL has a policy commitment towards the
wellbeing of communities in the country,
with water provision being one of our four
priority areas that the company has defined
in its objective to provide social support to
improve the social wellbeing of Tanzanians.
The projects have been undertaken in Iringa,
Kilimanjaro, Mwanza, Tanga, Ruvuma, Dar es
Salaam, Coast, Dodoma and Mara regions,
SBL has provided access to safe and clean water to providing over two million people with clean
over 2 million people and safe water.
SBL has since 2010 to date spent over TZS 1.1 Our water projects not only safeguard
billion to drill 17 boreholes across the country, the beneficiaries’ health, but also increase
an undertaking that has made a significant economic productivity, particularly for girls
contribution in the alleviation of shortage and women who no longer need to spend
of water in Tanzania. Through its program long hours in search of clean water. This gives
known as Water of Life (WOL), SBL has in the girls an opportunity to attend school
most of these projects partnered with other without distraction.
organizations in ensuring that Tanzanians are

SBL has supported the planting of over 5,000 trees The tree planting initiative by SBL comes at
countrywide a time when there are worldwide concerted
SBL considers trees an essential part of the efforts to limit greenhouse gas emissions, both
ecosystem. They filter water bodies, provide regionally and globally, to combat climate
habitats to terrestrial biodiversity, absorb change and guarantee a safe and protected
carbon from the atmosphere and are useful environment for future generations. SBL
for medicinal purposes. Our business and has partnered with various stakeholders in
the community at large are part and parcel planting trees including the Speaker of the
of this ecosystem which makes it a shared National Assembly, Honourable Job Ndugai.
responsibility to conserve and protect the A total of over 5,000 trees have been planted
environment. in various parts of the country

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 33

 Sustainability Uganda

UBL Launches Plastic Waste Management Campaign

to promote sustainable environmental protection
Uganda Breweries Limited announced a
partnership with National Environmental
Management Authority (NEMA), Vivo Energy,
NBS and Stanbic Bank to promote sustainable
environmental protection in a new educative
campaign dubbed ‘Taasa Obutonde,’ which
means ‘Save the Environment.’
The situation in Uganda is dire and needs
immediate action and attention. The rate of
solid waste generation in Kampala alone was
3,206 tons per day in 2015 and is expected
to increase to 4,739 tons per day by 2030. At BECOMING SUSTAINABLE BY DESIGN – UBL launched a plastic waste management campaign dubbed ‘Taasa Obutonde’ in partnership with National
least 51% of plastic garbage in Kampala is Environmental Management Authority, Vivo Energy, Stanbic Bank and NBS.

left uncollected and less than 10% of plastic of plastics and the impact of the disposal to the of plastics while encouraging adoption of the
waste is recycled. environment, human and animal life. Running 3Rs – Reduce, Reuse, Recycle to encourage
The “Taasa Obutonde” campaign will unpack on all media platforms, the partnership will positive behavioral change and an overall
the dangers of irresponsible use and disposal aim to create awareness about safe disposal reduction in environmental degradation.

UBL’s E-Green Team plants 3,000 trees to

commemorate World Environment Day
In commemoration of World Environment
Day and as a contribution towards the
Running Out Of Trees (ROOTs) campaign,
UBL partnered with the Ministry of Water
and Environment and Tree Adoption Uganda
(TAU), to plant 3,000 trees in Nakaseke District.
Uganda’s catchment areas are vital in
providing livelihoods to millions of Ugandans
through activities like fishing, trade and
providing fresh water. It’s therefore necessary
for Uganda Breweries to recommit to tree
planting activities in these areas to continue
supporting communities that depend on
the lake for their daily bread. As a business,
we strongly believe that for effective
environmental management, improving the
livelihoods of people is the first step in the
right direction to sustainable growth. UBL partnered with the Ministry of Water & Environment and Tree Adoption Uganda to plant 3,000 trees in commemoration of World Environment Day.

34 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Uganda Sustainability

Gravity Water Community Project commissioned in

Bududa District, Eastern Uganda
Over 3,000 residents of Buwali sub-county,
Bududa District were beneficiaries of a
gravity water project that was commissioned
by Uganda Breweries and Rotary Uganda on
10th October.
UBL supported the project with a grant
of Kshs 10 million to construct a 3.4 km
transmission line, a reinforced foundation for
the reservoir and 13 public standpipes.
Through this project, UBL provided the
community with clean, safe water for
domestic use, replenished 22,995m3 of
water against a set target of 21,090m3 for
the year and also helped in reducing gender
inequalities such as girls and women walking
long distances to fetch water.

POSITIVELY IMPACTING OUR COMMUNITIES – Preserving Water for Life: Commissioned a gravity water project constructed at a cost of UGX 330 million to support over 3,000 residents of Buwali sub-county, Bududa District. The project is
set to deliver a total of 22,995m3 in annual water replenishment.

The Red Card Campaign launches ‘Smashed’ in

movie format
UBL’s Red Card and ‘Cool Teens Don’t Drink’
campaign launched ‘Suubi’ under the global
Smashed program at a movie premiere in
Kampala attended by a select group of 200
parents, teachers, and student leaders from
various schools around the country.
With the ever-increasing demand for visual
content driven by global trends that have
seen platforms such as Tik Tok, Snap Chat
and Instagram Stories take root among the
youth, it was clear that we had to match the
preferences of our target audience.
Suubi is as entertaining as it is educational,
and the perfect means to sensitize the
youth against underage drinking. It will be
screened across several schools in Uganda
reaching at least 2,000 students in the first
month and with plans to broadcast it on TV
stations nationally.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 35

 Sustainability Uganda

Skills for Life Program boosts youth with start-up

capital
Under the Skills for Life program, UBL offered
40 scholarships to bright but needy youth
to pursue vocational courses at Datamine
Technical Business School, and Africa College
of Commerce and Technology (ACCT),
Kabale. Through a technical expert, Enterprise
Uganda, UBL also provided career guidance
and supported the beneficiaries to start
various businesses to earn revenue. Of the 40
students that were awarded scholarships, 24
of these were female and 16 males. Supported 40 students from our LRM communities in Central and South-Western Uganda with vocational skills through our Skills for Life project.
In line with our Inclusion and Diversity agenda, 60% of the beneficiaries were female.
The 60:40 ratio of female to male students
was deliberate in a bid to champion inclusion From the 40 students, eight outstanding
and diversity by giving more opportunities students, four of them female, were awarded
to female students. UBL is committed to with seed capital of Kshs 0.4 million to boost
elevating and empowering female talent their startups.
because we acknowledge that a diverse
culture is intrinsic to the success of the To further advocate for women
business. We are continuously striving empowerment, UBL runs a Science,
towards achieving gender balance by Technology, Engineering and Mathematics
creating opportunities for female students (STEM) apprenticeship program and has
and equipping them with hands-on skills that recently launched a Commercial program
prepare them for the job market. and a Graduate marketing program for
female university students.

COVID-19 support to communities and government healthcare system and directly support the
In response to the Government of Uganda’s national response to the COVID-19 pandemic.
call on the private sector to support the UBL also supported district local governments
fight against COVID-19, UBL donated UGX 30 nationally and communities around the
million worth of medical equipment to the brewery in Port Bell with hand washing units,
Intensive Care Unit (ICU) at Mulago National sanitizer, and face masks to enhance hygiene
Referral Hospital to bolster medical response measures in markets and other areas with
capacity. high populations.
The contribution is meant to supplement
government efforts to strengthen the national

36 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 37
 Sustainability Uganda

UGANDA
LRM farmer engagements and partnerships
UBL engaged the National Agricultural Research
Organization (NARO) and Operation Wealth
Creation to discuss partnership Opportunities
to enhance UBL Local Raw Material (LRM)
agenda. The Corporate Relations team and UBL
Managing Director also visited barley farmers
in Kabale and Kanungu in South-Western
Uganda to assess progress, provide support
and assurance of UBL’s commitment to LRM
sourcing.

Visited barley farmers in

Kabale and Kanungu in
South-Western Uganda.
We continuously engage
with our barley farmers to
assess progress, provide
support and assurance of
UBL’s commitment to LRM
sourcing.

38 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 39
 Commercial Update

E
ast African Breweries Limited’s (EABL’s)
Route to Consumer (RtC) strategy is to
ensure great physical availability of our
brands, and world class execution across all
channels and segments, clearly establishing
how we serve the market and in the most
cost-effective way to emerge stronger and
accelerate our growth journey.
The three countries have come together as a
region to build an advantaged RtC strategy
leveraging on best practices and talent in
the region and benchmarking with the best
global practices to drive transformation. We
have built capability and skill set within the
region to benefit from each other through
a strong advantaged position to gain a
competitive edge that enables us to deliver
our strategic imperatives and guarantee
sustainable quality growth now and into the
future.
1. Building a network of capable,
efficient, and sustainable distributor
partners
We have a network of well capitalized and
resourced distributor partners handling
our mainstream beer, emerging business – The three countries have
mainly comprised of Senator – and the spirits come together as a region
portfolio. We have built and embedded
structures, systems, standards and processes to build an advantaged
critical for long-term sustainability of the RtC strategy leveraging
partners. These, coupled with our key
standards and plans, have been instrumental on best practices and
in delivering our overall strategic plans. We talent in the region and
have successfully created a ‘winning through
execution’ culture by creating competitive benchmarking with the
trade terms, incentives and reward programs best global practices to
with individual businesses. These are targeted
at delivering distributor Return on Invested drive transformation.
Capital (ROIC).
average 1,200 daily journey plans across
2. Supply chain efficiencies to improve
the country. Simplification of opportunity
availability and cost efficiency
identification in the sales call, supported
Having launched the automating processes through data analytics and technology,
for data collection for our sales force in 2012, ensures that the teams navigate complexity
we have seen tremendous outcomes in with ease and deliver Every Day Great
our operations. The team is well equipped Execution.
and empowered to conduct value adding
We have embedded data driven decision
conversations with our retailers. The finance,
making and execution at the micro level. -
marketing and supply chain teams use the
transforming how we work and significantly
data for daily plans, operation planning,
evolving our performance management -.
and capacity forecasting and reporting.

COVID -19 RtC RESPONSE

3. Simplification using data analytics
As the crisis set in, EABL leveraged on the
and technology
off-trade channel, amplified the wholesale
Simplification is fundamental to creating a channel and focused on new channels such
well-coordinated, capable and agile sales as home deliveries and e-commerce to
force to drive active selling. We have a robust ensure consumers continue enjoying their
customer facing sales team completing an favorite drinks.

40 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Commercial Update

• Home Consumption became more • Rapid acceleration of the digital • Increased consumption at Duka and
prominent following on-trade space evidenced by increase kadukas in Tanzania and Uganda
restrictions in Kenya and Uganda. internet subscription and social respectively. Consumers are still
We partnered with bodaboda network activities which enabled relying on smaller outlets, which are
riders and online partners to deliver partnerships with online partners affordable and closer to their homes.
to consumers. Distributors also such as Jumia, Glovo, Turnup, and
adopted home deliveries as part of Oaks & Cock.
their business model.

• Launch of EABL owned e-commerce • An inaugural inhouse creative team, • Portfolio extensions by introducing
platform party central through a Digitribe, ensures that over 40 brands can and one way glass formats to
partnership with distributors and in EABL’s portfolio are connecting support the home consumption
retail outlets, to provide our portfolio with over 15M consumers on social occasions.
of drinks to consumers wherever media across East Africa.
they are in under 1 hour.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 41

42 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
 HII NI YETU
BEI POA

300ML 30/=
500ML 50/=

BEI POA

300ML 35/=
500ML 55/=

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 43

 Supply Update

E
ABL market comprises of three of
the most competitive supply chain
businesses in Africa. The business houses
The health and safety of our personnel remains a priority. Our
8 plants across 6 sites in the three countries Zero-harm goal anchored in four pillars, namely prevention,
and a maltings plant, as detailed below:
compliance, culture, and capability underscore our unwavering
• Kenya – Tusker (Nairobi), Kisumu, UDV Ltd
and East African Maltings commitment to workplace safety and wellbeing.
• Uganda – Uganda Breweries and IDU Ltd
• Tanzania – Moshi, Mwanza and Dar es KPI Score Benchmark
Saalam
Total Recordable Accidents 0.86 <3.5
We continued to invest smartly for future
growth in line with our strategic ambitions. Severe and Fatal Incidents Prevention 91% 90%
The key investments during the year included;
capacity expansions in Tanzania (spirits) and Parameter Outcome
Uganda (beer), returnable packaging, coolers,
Biomass (Kenya and Uganda) and watery Lost Time Accidents (LTA) for over 6 years <3.5
recovery (Kenya and Uganda). Driving on site accidents 90%
The manufacturing footprint within EABL Reduction in Total Accidents in financial year 2020/2021 versus prior year 34%
continues to deliver stellar performance year ISO45001 Audit 100% Pass Rate
on year through relentless pursuit of a zero-
harm environment, promise to the consumer IS014001 Audit 100% Pass Rate
with regard to quality delivery, unlocking Compliance in Occupational Health & Safety Control Assurance Risk
100%
value through the productivity agenda and Management Controls Management Controls
continued focus on wellbeing. This continues
to magnify the competitive scale of the EABL • Boldness in innovative solutions - EABL • Building strong partnerships with our
supply footprint, hence achieving awards has become the centre of excellence in partners through execution of third-party
year on year. hazardous energies in Africa by being logistics transport safety improvement
at the forefront of Africa Hazardous project to bring our partners to our safety
HEALTH AND SAFETY Energies Control Project (LOTO project) – standards, baseline audits completed
4 equipment upgraded in each site across all sites.
The health and safety of our personnel
remains a priority. Our Zero-Harm goal • Unparalleled innovations in safety e.g. • Productive partnerships and knowledge
anchored in four pillars, namely prevention, asphyxiating gases improvement project transfer between global and local safety
compliance, culture, and capability, in Kenya intended to step change teams resulting in transformational best
underscore our unwavering commitment to management and handling of CO2 practice implementation.
workplace safety and wellbeing. • Sharp focus on safety in the monthly • Successful transition of Global Risk
With over 25 projects delivered through control’s day. Management standards self-evaluation to
collaboration with more than 65 different • Cross-Functional Team (CFT) formed Enablon, which is a global database that
contractor firms, all safety Key Performance at Serengeti Breweries to drive safety allows the global Operations Excellence
Indicators (KPIs) have been maintained at improvements. team to have view of all governance issues,
leading. This success has been achieved • Transformation in safety culture where creating higher levels of transparency.
through: near misses are perceived as opportunities • Embedding lifesaving rules through
to improve. robust weekly themes and videos.
• Rigorous incident investigations (5 whys)
processes and implementation of actions
to avert recurrence.
• Consistent safety awards across the
market to sustain & improve safety culture.
As a result, EABL continues to rank highly,
leading in Diageo across all the safety KPI,
notably:
• 0 Lost Time Accidents (LTAs) for over 6
years.
• Total Recordable Accidents rate at 0.86
vs benchmark of <3.5: A 23% reduction
compared to last year.
• Severe and Fatal Incidents Prevention

44 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Supply Update

compliance at 91% vs benchmark of 90%.

• 100% pass rate in all audits - – ISO45001,
IS014001.
• 34% reduction in total accidents during
the 2020/2021 financial year compared to
previous financial year.
• 100% compliance in Occupational Health
and Safety CARM (Control Assurance and
Risk Management) control.
• 0 driving on site accidents.
During the financial year, UBL was
crowned the winners of the Diageo
Excellence in Health, Safety and Wellbeing
award.

RESPONSE TO COVID-19 PANDEMIC

In the 2020/2021 financial year, the COVID-19
pandemic considerably disrupted Supply
Chain operations, with Kenya and Uganda
feeling the brunt of it more than Tanzania.
Consistent adherence to Diageo and
Government Covid 19 protocols including
site pre-entry screening, limitation of site
access to critical personnel, investment in
intensive sanitisation of the production
closures during lockdown and reduced • There has been remarkable reduction in
facilities, provision of transport to operational
down time. In the same breath Kenya also water usage partially driven by the benefit
staff ensuring adherence to social distancing,
scaled up the spirits production. of installation of the water recovery plants
provision of masks for operations staff served
• Shift to local sourcing from importation in Kenya (Tusker and Kisumu sites) and
to curb the spread of the virus and sustain
Uganda.
business continuity. and hence mitigate out of stock risk.
• The two Kenyan sites boast of being the
As a result of government-imposed • Provision of alternative staff residences
Diageo global benchmarks for energy due
restrictions in some markets, supply had to near production facility in Uganda to ease
to focussed improvements on baseloads
be agile in meeting the shifting demand access when the government-imposed
in Tusker and substitution of grid energy
patterns. This ranged from: restriction on movement of vehicles.
with solar in Kisumu.
• Reduction of production operations to
• All sites across EABL achieved zero waste
match demand. SUSTAINABILITY to landfill status by close of Q4.
• Supporting quick turnaround of The business is keen to operate in a • The ongoing investment in biomass
innovation in response to current market sustainable manner and as such we track powered boilers in Kenya and Uganda will
requirements i.e. Kenya introduced more some KPIs and invest in CAPEX to further upon completion further the sustainability
can formats for beer brands with bar reduce the impact on the environment. agenda by reducing the carbon footprint.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 45

 Supply Update

EABL supply continues to play its part in contributing to the overall • Improvement in flavor scores across all sites, with Tusker
business strategy and performance through driving excellence in improving from 5th to 2nd place in the Diageo league of excellence.
supply chain, quality, supply led productivity and health, safety and • The entities have been keen on high standards, which is
wellbeing: demonstrated by the performance in the Diageo Supply Chain
• Tanzania continues to show cost leadership, closing the year as and Procurement awards. During the 2020/2021 financial year,
one of the top 10 Diageo markets that delivered a reduction in EABL and the entities were among the top three finalists for the
cost base at constant mix. awards.

Awards

F21 Diageo Supply Chain and Procurement Awards

Category Winner
Brewery of the Year UBL
Excellence in Health, Safety and Wellbeing UBL

Category Finalists
Brewery of the Year Tusker Brewery
Sustain Quality Growth UDV
Supply Market of the Year EABL

46 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 47
48 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
Our
Brands
2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 49
 Kenya

Brands Beers

Tusker
Brand Manifesto
Tusker is a one-off. A Kenyan original. A force in our land. Just maybe the first
authentically African brand. Tusker is part of what makes Kenya what it is today –
it’s the chant in the crowd at the match, the spring in the step, the smile on a face.
From its birth in 1922 right through to the present day, Tusker has always been a
vibrant presence in Kenyan lives. We’ve been there as successive generations come
together to celebrate good times and get over challenging ones, make plans, share
passions and laugh together. Be themselves at their positive, confident best – living
for today, looking to tomorrow.
That’s why as we are about to reach our centenary, we see that as just the beginning
of the next hundred years. Like they say, Tusker Milele!
Maybe it’s because we are Kenyan, we know better than anyone Kenyan tastes.
You can taste the country in every bottle. Kenyan Barley from the Masai and the
Savannah, Kenyan spring water, Kenyan yeast and Kenyan sunshine- and yes, that
unique Kenyan spirit too- they all go into making a beer that is as crisp and balanced as
it is clean-tasting and refreshing.
Just the way we Kenyans like our beer.
And maybe too it’s because we are Kenyan through and through, that we share Kenyan
passions and the Kenyan drive to break new ground and make them better. That’s why we
set out to find tomorrow’s music stars. How we get behind our Olympians and our globe-
trotting Rugby Sevens team. And we will be there too the next time around and the time
after that, helping to spark boundary-pushing creativity and new sporting achievement.
Beer matters. When people come together over a Tusker, it’s one of those times that they
get to live their present at its best, to re-affirm their bonds of friendship and to fuel their
determination to make tomorrow more rewarding still.
Tusker Milele! Kenya Milele!

Tusker Lager with our support of our sports people –

This is the beer that started it all. Tusker Lager sponsoring Team Kenya for yet another
is Kenya’s finest national beer. It is brewed Olympics season whilst supporting our very
in Kenya, by Kenyans and made from 100% own Tusker FC to close the year on a high
Kenyan ingredients. A source of fellowship, by winning the Kenya Premier League and
identity and pride since 1922. qualifying to represent Kenya in the CAF Cup!
Tusker also relaunched Tusker Na Nyama – to
Since the roll out of its new positioning, which
cement Tusker as the perfect beer when out
we brought to life via activities to connect the
bonding with friends over a meal – an activity
brand with the next generation of consumers,
that continued to be a significant growth
the brand has started to see marked growth
driver for the brand.
in its equity. We took this to the next level by
launching a new campaign #KenyaMilele – a As we go into our centenary year, we are not
campaign rooted in our brand purpose and only excited to look back at Tusker’s last 100
a celebration of our indomitable Kenyan years, but will more importantly look forward
spirit. Starting off with the launch of a new and launch an iconic campaign to win the
television commercial, the campaign has had hearts and minds of our current and future
resoundingly positive consumer feedback. consumers.
To cement the brand in culture, we continued

50 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Kenya
Beers Brands

Tusker Lite Tusker Malt

We don’t take our Tusker Malt is Kenya’s first premium lager. The
name lightly. To create three key ingredients that make the magic
a beer that has fewer in this bold lager are malt, water and hops.
calories, we crafted a With the finest malt that matures for twice
unique recipe of barley, as long as ordinary beers and rich flavourful
cornstarch and hops. The hops, each Tusker Malt is 100% slow-brewed
result? A light, golden to perfection.
colored liquid with a From the moment the bottle pops, hop
delightful aroma which aromas fill the air. Each mouthful is smooth,
appeals to the senses crisp and satisfying. A highly flavoured malt
before the true magic lager that is not easily forgotten.
happens. With every sip,
In December 2020, we upgraded our Tusker
we “Keep It Lite” with a
Malt can to a modern and dynamic can to
light body that is heavy
match the fine liquid. The can was very well
on taste, creating an
received by consumers and overall, the brand
enjoyable easy drinking
has seen a growth both in brand love and
experience.
positive sentiments.

Guinness
Guinness Foreign Extra Stout (FES) is a beer
born of a thirst for adventure and brewed to
travel the world. Since 31st December, 1759,
when Arthur Guinness made a bold decision
to begin brewing this extraordinary beer, no
beer has gone further, no beer has a greater
depth of history. For 258 years, Guinness
has contributed to the cultures where it
landed, and in turn has absorbed part of the
cultures. As a result, Guinness has evolved to
reflect these in culture: Bright and Vibrant in
Africa.
Guinness is MADE OF MORE; we want to
inspire greatness in all our consumers and
everyone who encounters us. Guinness is
the most loved brand in Kenya, boasting
the strongest equity by a mile. During the
Tusker Cider
financial year we started the journey to
Tusker Cider is East Africa’s biggest cider. revamp Guinness, moving from a single
Since its launch in 2016, the brand continues variant brand to a brew made of more
to be the perfect drink for life’s moments. It with the launch of Guinness Smooth and ways. We launched the new Guinness
delivers an understated sophistication to any Hop House 13. Guinness in Kenya is now Smooth 300ml SKU, making it one of the
everyday occasion. Celebrations, milestones a vibrant trademark that brings flavour to most accessible beers in Kenya. Guinness
or just a simple lunch with friends – big, a broad range of consumers, delivering led the off-trade charge by deploying
small, everyday moments of meaningful fabulous value for the business. impactful and disruptive visibility with full
connection all call for a Tusker Cider. transformation of off-trade outlets whilst
We continued to have the strongest
It is crafted from premium apples and delivers association with football across Total simultaneously driving the premiumization
a deliciously crisp and refreshing drink. Tusker Beverage Alcohol (TBA) and further grew agenda in trend-leading liquor stores with
Cider is the fastest growing variant in the this through simple, efficient and innovative disruptive units.
Tusker portfolio and continues to be one of
our most successful beer innovations yet.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 51

 Kenya

Brands Beers

Balozi the best barley and hops in the purest water

Balozi Lager was launched on 21 December,
st with no preservatives and added sugar.
2012. Its quality is unquestionable, and it White Cap is still the first choice for those
always promises to deliver a rich refreshing who really understand and know what
taste brewed with the purest water and the they want in a good beer. It is undeniably
finest malted barley and hops. As it should the connoisseur’s beer. A distinctive beer
be, it has no added sugar, making Balozi the brewed to perfection using only the finest
choice for today’s health-conscious individual. quality equatorial malting barley and
It continues to play a big role in shaping the using the pure waters flowing from Mt.
mainstream segment at an advantaged price Kenya and a perfect partner to moments
point, providing strong value for money. With that matter either alone, with friends or
the recent introduction of the can variant, family. The ‘No added sugar’ continues to
Balozi is strategically propositioned for the drive the natural/health messaging that
youthful consumer. The no added sugar is in line with the emerging health and
proposition presents a strong and unique wellness trend in Kenya.
positioning; ‘Nothing but character added’ White Cap Light
brand communication coupled with ‘Yes We
White Cap Light is the largest light beer
Can’ campaign to launch the ‘can have’ that
by volume in the market. A superbly
continued to spur growth for Balozi. White Cap matured lager that is a testament of the art
White Cap started as a flagship beer of Allsops of brewing at its best! It also rides on the rich
Brewery (then Taylor and Company Brewery White Cap lager’s heritage. It is a golden beer
in 1938) and was the biggest competitor to that has been filtered to give it superior clarity
EABL’s flagship brands. It was subsequently and authentic crisp taste. White Cap Light
bought in the 1950s. White Cap has an is a premium quality brand with distinctive
unmistakable taste that consistently delivers benefits unmatched by other beer brands. Its
a unique and enjoyable 4.2 ABV (Alcohol by low alcohol content makes it a perfect fit for
volume) beer experience that is made with light drinkers with a 3% ABV.

Pilsner
Pilsner Lager was first brewed in the 1930s at Allsops
brewery, growing to become one of the leading beer
brands for EABL in Kenya, Uganda and Tanzania. It has
unrivalled taste and quality, and boasts of superior
liquid clarity through cold filtering for a crisp refreshing
taste that is inspired by the original Pilsner brewing
process in Europe. It has a legendary boldness which
celebrates the success of Africa’s urban youth culture.
It’s a toast to their resilience and grit, and an invitation
to savour every moment on the journey to success.
Pilsner continues to embed itself in the music platforms
and seeks to entrench itself in the hearts and minds of
the consumers through offering unique experiences via
Reggae, and actively targeting the younger consumers .

Senator
Senator was launched in 2004 as a truly revolutionary brand delivering a quality value beer as
a safe alternative to illicit liquor that Kenyans from all walks of life can enjoy. At the heart of it,
Senator seeks to restore dignity to its core consumers by giving them access to an aspirational
drinking experience at an affordable price. Since its inception, Senator has been rooted in
creating and driving value – from local farmers, suppliers, local communities, government and
most importantly, to the consumer. It is a good beer with an uncompromising quality with
locally sourced ingredients allowing you to enjoy great taste at an affordable price.

52 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Kenya
Spirits Brands

Singleton During the financial year, we broke all the

Whisky, like food, should bring people whisky rules of marketing, unapologetically!
together. To share good music, great Pack and price changes have given
conversation and real enjoyment. Our passion Singleton a new life, injecting vibrancy and
is for crafting deliciously smooth whiskies, a price advantage, thus growing our weekly
made to be unapologetically enjoyed with conversion rates. The brand distribution in
friends. key channels has also grown in double digits.

Johnnie Walker Black

During the financial year, we awakened a We met the targets set and surpassed the
sleeping giant. We unleashed our Global volumes and net sales from last year. We also
Icon in Kenya, recruiting new whisky drinkers managed to defend our market share and
and re-recruiting from affluent other spirits maintained market share in international
drinkers, driving appreciation, and increasing whiskey.
consumption of Johnnie Walker. We are confident that we have developed
We achieved this by going after all the momentum needed to mainatin market
opportunities, winning at retail, disruptively leadership amongst other top global players
transforming the off-trade with visibility in in Kenya.
cash-and-carry and impressively winning at
home occasions via e-commerce.

Smirnoff Vodka drive exciting and consistent consumer offers

This is no fairy tale. It is a journey with a host in the off-trade and on e-commerce such as
of interesting characters on the journey to the crazy consumer offers on World Vodka
return the infamous roots that make our Day, transformational visibility of off-trade
story wildly unique. Smirnoff has a resilient outlets, enticing consumer offers in the on-
and chequered history spanning over 150 trade and anchored by media investments
years with a consistent ability to adapt to and behind TV, digital and billboard channels to
subvert the times around it. Truly, there are drive awareness and impact; we continue to
people, and there are characters. There are win the hearts and minds of the consumers
events, and there are stories. There’s Vodka, in Kenya. In addition to this, we leveraged
then there’s Smirnoff! category activities such as Flex na Mamili
to accelerate the market pull for the brand,
Smirnoff Vodka remains the world’s no. 1
category price campaign to aid performance
vodka brand and the leading premium vodka
of smaller brand formats and model outlet
brand in Kenya. Despite the rampant changes
branding in the cash-and-carry segment to
to our operating environment, the brand has
win in the market.
held its performance and continues to be
a top contributor to the spirits categories
profitability position.
During the past fiscal year, we continued to

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 53

 Kenya

Brands Spirits

Gin Portfolio prioritized on: building physical availability

Our gin portfolio comprises of Tanqueray, and accessibility, landing the Gin and Tonic
Gordon’s and Gilbey’s. In Kenya, Gilbey’s serve and rituals, growing the awareness of
is seen as a democratiser; a great liquid, our brands and winning the hearts of our
affordable, exudes premium cues and consumers. The approach worked and the
credibility/status. results unequivocally speak to this. During
the same period we awakened the giant
Gordon’s is famous for its high juniper
notably; Gilbey’s special dry gin is a leading
content, creating a simple yet sophisticated,
light in the spirits category. Gordon’s London
real cut-through taste and makes for the
Dry, Tanqueray London Dry and Tanqueray 10
definitive Gin and Tonic. Tanqueray continues
enjoyed growth, and Tanqueray 10 has grown
to define premium gin; inviting consumers to
into a much-loved gin.
appreciate and enjoy true craftsmanship and
quality.
During the financial year, our execution

Primary Scotch Through the ‘Flexx Reloaded’ distribution

The Primary Scotch portfolio comprises Black drive, consumer offers in bars, wines and
and White, VAT 69 and J&B Blended Scotch spirits and supermarkets as well as value
Whiskys. During the financial year, the three added packs, the brands have maintained
brands have continued to reboot scotch to relevance with target consumers as well as
grow KBL share of International Whisky. Black enjoyed great volume and value performance.
and White plays the role of being the primary Communication through radio, Out of Home
recruiter into scotch, with VAT 69 being and digital platform have been instrumental
a strategic fighter International Premium in ensuring the brands are rooted in culture
Spirit and J&B creating room for accelerated and connect with consumers in a bid to
growth. strengthen their equity.

Captain Morgan Kenya Cane

Captain Morgan Gold is the Kenya Cane remains the most
champion of fun and the most loved spirit brand in Kenya.
loved rum brand in Kenya. It Under the mantra of celebrating
is the second fastest growing every day moments, Kenya
mainstream spirit brand in Cane continues to be a
Kenya, growing in distribution significant contributor to the
across the country and spirits portfolio.
ensuring the brand is creating As the anchor brand in the
new consumer fun moments consumer promotion ‘Dandia
while at home. Bonus’, the brand was able to
Participation in the concluded sustain performance for the
Dandia Bonus consumer mainstream spirits category.
promotion landed the jackpot KC led the revolution of the
winner. This has propelled home party scene through
consumer trial and sets us up exciting online parties during
well for the coming year. all national holidays, thereby
redefining this space and
leading a new channel to
engage with our consumers
under a new vibrant “254orm”.

54 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Kenya
Spirits Brands

Chrome Trademark Kane Extra

As one of Kenya’s most loved spirits brand in Kenya, Chrome Kane Extra continues to follow its own path as the only brown cane
continued to sustain its growth momentum in the financial year spirit in a world of white spirits since 2003. Despite turbulence in the
through key strategic initiatives that included the successful launch operating environment, Kane Extra continues to demonstrate brand
of Chrome gin in November, 2020. The introduction of the new equity growth with significant shifts being growth in the brands
variant into the Kenyan market sought to leverage the explosion distinctivity scores driven by strong pack performance post the pack
of the Gin sub category with the launch of a smooth and crisp change and positive liquid quality appraisal by consumers.
premium, quality, aspirational yet affordable mainstream gin for the The increased brands trial and penetration performance has
youthful Kenyan consumer. also grown versus the previous year driven by accelerated brand
Our participation in the Mainstream Spirits category national distribution through the ‘Changamkia Kane’ accelerated listing drive
consumer promotion ‘Dandia Bonus Na KaQuarter’ made a significant program and innovative activities such as the Dandia Bonus na
contribution to the brand’s volume and value performance in the Kaquarter National Consumer Promotion (NCP) and the roll out of
financial year. Other category activities included the deployment of optics across the core channels to drive affordability, accessibility and
optics to drive affordability for both Chrome vodka and Chrome gin consumer excitement in the year. We are in a continuum to cement
amongst mainstream consumers. Kane Extra’s position as the anchor spirit brand in our Emerging
We also continued to drive brand relevance and sustain popularity as Business portfolio and the dominant defender of KBL’s lower
the most trendy and vibrant mainstream spirits brand amongst the mainstream spirit market share.
Kenyan millennial consumers in the financial year. We successfully
achieved this through strategic partnerships with popular music
groups Sauti Sol and Sol Generation.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 55

56 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 57
 Tanzania

Brands Beer

Serengeti Lager Tanzania’s national football team. This

Serengeti Lager, which proudly takes its name continued to cement Serengeti Premium
from one of the world’s most famous natural Lager as the number one fan of Tanzanian
wildlife habitats - the Serengeti National Park Football.
in Tanzania - is the original 100% Malt Beer of Tanzania, just like the rest of the world, was
Tanzania. This truly Iconic Tanzanian Beer is a hit by the COVID-19 pandemic and Serengeti
world class beer brewed by one of Tanzanian’s Lager played its role in uniting the country
original Brew Masters. against this virus by rolling out the “Raising
Its unique nature comes from its full body, the Bar Program”. This has been used to
malty grainy flavor and slightly bitter taste assist our trade partners in the cities of Dar
that has a smoothness to it, all qualities that Es Salaam, Arusha, Mwanza and Zanzibar to
make it stand tall and well differentiated from boost the hygiene standards of their outlets
other beers in the market. and encourage consumers to get back to
the trade. A total of 2,000 outlets have been
2020-2021 was another great financial
supported with social distancing and hand
year for Serengeti Premium Lager where
washing equipment.
it witnessed growth in volume, value and
share. Serengeti Premium Lager continued
to leverage its brand positioning as a national
pride brand through the renewal of its three-
year sponsorship deal of the Taifa Stars,

Serengeti Lite This brilliant performance has been delivered

Serengeti Lite has grown from strength to through the refreshing of the Lite with a Bite
strength since it was launched four years campaign that we continued to run during
ago. This financial year was a special one for the financial year. Additionally, Serengeti
Serengeti Lite as it was the year it managed to Lite ran its largest consumer campaign yet
take market leadership as the single biggest dubbed “Serebuka”. This digital campaign
brand in Tanzania with a double-digit value involved consumers participating in a dance
share. In the same breath, Serengeti Lite saw and anthem challenge that was aimed at
its strongest growth in brand equity yet! It placing Serengeti Trademark at the heart
impressively grew brand strength score, and of socialization in Tanzania. The campaign
became the most meaningful and distinctive managed to reach 8.1 million consumers in
brand. As a result of this great performance, the 12-week period it run. Serengeti Lite also
Serengeti Lite was the winner of this year’s continued to drive inclusion and diversity
prestigious Diageo Innovation Award dubbed in Tanzania by reviving the Serengeti Lite
the INNIES in the “Best Sustained Growth” women’s league.
category – the only other brand to do so, after
Senator in Kenya, within the region.

58 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Tanzania
Beer Brands

Pilsner Lager
Pilsner continued its strong streak of growth as it delivered double digit growth in both Volume
and Value during the financial year. In the same breath, Pilsner continued its dominance of the
lower mainstream category by growing impressively.
The 300ml pack introduced last year continues to drive penetration for the brand and as a result,
the pack was launched during the financial year in the Central region. This pack continues to
provide a great tasting beer at an affordable price.
Pilsner as well saw the renewal of its visual identity to make it more contemporary and recruit
the younger consumer in Tanzania. The tag line “Simama Imara, Songa Mbele” translated to
“Stand Tall, Stride On” is a true reflection of the attitude of the young DE Male ready to take on
the challenges life throws at him. This was rolled out across all our media channels i.e. OOH,
Radio and Digital. We also kicked off the process of refreshing all our assets in trade.

Guinness Foreign Extra Stout

Guinness discovered an exciting year with the re-launch of the brand in market within
Dar Es Salaam. The focus for Guinness was to drive commercial fundamentals and trial
in the year. This was done through a re-launch of the brand and investment put behind
driving distribution and point of sale materials in outlets.
To drive trial, Guinness leveraged the power of the English Premier League to execute
football in an only-Guinness-can-do attitude across premium and mainstream bars.
The results have been great with the brand growing in both Value and Volume.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 59

60
NOT TO BE SOLD TO PERSONS UNDER THE AGE OF 18. PLEASE DRINK RESPONSIBLY
2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
 NO ADDED
SUGAR

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 61

 Tanzania

Brands Spirits

Johnnie Walker® the Out Of Home (OOH) and Digital platforms

Johnnie Walkers journey to becoming the and for the very first time, assets on TV to
most iconic Whisky in Tanzania continued in drive liquid credentials. Additionally, Johnnie
during the financial year. In order to achieve Walker transformed its visibility in trade with
this ambition, Johnnie Walker leveraged a eight brand homes and deployment of Point-
number of pillars. For instance, Being the of-Sale materials in outlets.
Most Desired; Most Enjoyed and Most Talked To be the most enjoyed brand, Johnnie
about whisky brand. Walker rolled out its High Ball activations at
To be the most desired brand and drive scale dubbed Code Red where several outlets
aspiration, Johnnie Walker continued to were activated. Through these activations,
embed itself as the number one supporter 8,000 consumers were served with JW high
of golf in Tanzania in order to recruit high net ball cocktails for sampling. In addition, to
worth individuals into the House of Walker. ensure that Johnnie Walker was available at
The brand also rolled out Monthly Premium point of purchase, listing drives were rolled
Experiences dubbed, the JW Sunday Brunch out that saw Johnnie Walker get listed in
that saw consumers treated to Johnnie 8,000 new outlets within the year.
Walker High Balls, great food and great music. The initiatives have borne fruit with JW
To be the most talked about brand, Johnnie growing both Black and Red labels in Volume
Walker has always been in the media through and Value.

Innovations

Guinness Smooth and visibility while also driving awareness

In an effort to reframe the stout category in and trial.
Tanzania and strengthen the Guinness Trade Smooth has turbocharged the Guinness
Mark, Guinness Smooth was launched during trademark, enabling it to grow double digits
the financial year. Guinness Smooth’s role is to in volume, value and in shares.
recruit lager drinkers into the stout category Consumer feedback has been great so far and
through its unique and delicious liquid plus the plan is to launch the brand countrywide.
accessible price point.
Investment was put behind driving
commercial fundamentals i.e. distribution

62 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 63
 Uganda

Brands Beer

Bell Lager To drive emotional relevance and

Bell Lager has exhibited resilience in a year meaningfulness amongst our target
where the mainstream beer category was consumers, we also redefined innovative
grossly impacted by the pandemic. This approaches around entertainment and
was made possible through demonstrating socialization which was proliferated by
relevance to our consumers in occasion the onset of the COVID-19 lockdown
and creating a meaningful emotional restrictions. Young Uganda adults have
connection that would give them a reason redefined how they interact with each
to choose Bell over any other beer over and other and Bell Lager was well primed to
over again. play in that space.
In line with our growth agenda, we kick- We used this insight to launch a 360
started the year with a redefinition of our thematic campaign dubbed “Mpola
brand purpose to give us an authentic and Enjoyments” to celebrate the Ugandan fun-
credible personality and offering. loving spirit, anytime, anywhere.
A quality campaign was conducted to At the heart of it were those intimate
drive reappraisal of our world class quality and meaningful moments with a small
liquid amongst our consumers and prove group of closest friends that Bell Lager,
to them that our beer was golden in an easy drinking, low ABV, golden lager,
appearance, taste and credential. authoritatively demonstrated its mark.
This was swiftly followed by a drive to The campaign was delivered in a
anchor Bell Lager into occasion, where contemporary and vibrant manner,
we rolled out ‘Bell Na Nyama’ activations partnering with notable social icons to pin
across 300 outlets nationally, tagging Bell the brand into popular culture and plug it
to a proven growth driver of meat pairing into conversation, driving much needed
prominent in the largest and most viable meaningful salience to get Bell Lager
social occasion in Uganda, “Moments to noticed again for all the right reasons.
savor and enjoy with friends.” This has The coming financial year is poised to be
helped register impressive growth and a year of even greater fortune for Bell, with
consolidate our presence and ownership bold and disruptive initiatives to further
in this occasion. progress our growth ambition and mission
to be the most iconic Ugandan beer brand.

Pilsner Lager and recognition of the hustle of the

A cleverly executed and effective everyday Ugandan, a premise that is widely
strategy has continued to bear fruit relatable amongst our consumers. Pilsner
for Pilsner Lager, allowing us to disrupt has established itself as a true reward to
the mainstream category through the those that boldly and fearlessly overcome
consolidated ownership of the lower adversity to achieve their dreams.
mainstream subcategory, gaining share This has been articulated through a
from competition and becoming the fastest multitouch point campaign “Your Time
growing mainstream brand in Uganda. Is Now,” brought to life on radio and out
The brand has also put a stake in the ground, of home countrywide, leveraging our
laying a foundation for the establishment key brand asset of the spirited and iconic
of a meaningful and powerful consumer Roaring Lion, to driving mass awareness at
proposition benchmarked in celebration scale in and out of the trade.

64 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Uganda
Beer Brands

Guinness In a bid to further grow participation at home

During the financial year, the Guinness consumption occasion, Guinness stormed
brand has beaten all odds to stay its growth the arena of e-commerce, ensuring our
trajectory, registering growth between the products were accessible to consumers at
current and past fiscal years and maintaining home. This was done through an introduction
the lead in share as the largest premium beer and proliferation of FES and Smooth cans
in Uganda, even in the face of a pandemic and made available, promoted and activated on
looming uncertainty. This growth has been all leading retail platforms as well as on the
driven by a resuscitated trading environment newly launched Diageo Owned Party Central
and effective marketing and commercial App.
initiatives. Guinness improved its visibility footprint Coming off from a successful launch that was
across the trade, painting the country interrupted by COVID-19, we were able to get
At the heart of our success was the
black through 365 essential deployment back in the game with Guinness Smooth. An
power of through-the-line innovation in
countrywide, as well as impactful and aggressive commercial strategy that saw us
execution, allowing us to overcome barriers
customized outlet branding in both the on achieve the fastest and widest distribution
to consumption and engagement using
and off-trade. footprint for an innovation in Uganda. This
creative, disruptive and effective initiatives.
was supported by Above-The-Line (ATL)
We stretched our partnership with the English Notably, Guinness leads category visibility
campaign to drive mental availability at scale
Premier League beyond just the TV screens in majority of all hyper markets in Uganda
using radio, Out-of-Home (OOH) and TV,
and into the off-trade through the hugely and through our lighthouse branding pilot
which featured an innovative embodiment
successful “Guinness Matchday Magic”. project, we boast of having a viable blueprint
of the signature flavor rooms optimized for a
This came to life through football themed for bold, distinctive and vibrant premium on-
visual audience.
activations in the On-trade and Off-trade trade execution that will be scaled up in the
coming financial year to truly own the trade, We are looking forward to an even more
and supported by impactful football inspired
when the doors are finally opened for our vibrant year ahead, a year during which Black
visibility in the Off-Trade.
consumers to return to the bars. will Shine Brightest.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 65

 Uganda

Brands Beer

Tusker Lite designs, branding and partnering with high

During the financial year, Tusker Lite performing outlets across all the major towns
maintained its growth momentum and in the country to create a brand presence in
managed to scale distribution to regions premium upbeat occasions and locations.
beyond Kampala. In the coming financial year, to keep with
Brand awareness was the main issue going the realized past brand growth in value and
into the New Year and to address this, volume, we will continue to establish the
we increased our media investment to brand as the lead beer for those pioneering a
drive broader reach of our brand message limitless lifestyle in Uganda through creative
“Absolutely Nothing to Prove,” rooted in campaigns and deeply rooted innovations
culture, to fully engage with our target that are culture-oriented.
audience and drive increased consideration.
Tusker Lite also created the much-needed
visibility in trade, rolling out a beacon outlet

Spirits
Scotch and e-commerce, sampling and consumer
In the current financial year, we set out to giveaways, amplified activations in the on-
turbo-charge Johnnie Walker performance trade were executed throughout H2. The
and become the most desired, enjoyed and Limited-Edition packs were also used to
talked about whisky in Uganda. position Johnnie Walker as the No.1 Gift
of Choice in Uganda during festive gifting,
Johnnie Walker has been listed in +15,000
corporate gifting, Whisky Month and Father’s
additional new outlets by leveraging 200ml
Day campaigns. All these campaigns were
SKUs to penetrate non-traditional outlet
supported by disruptive media, innovative
segments. Through the Trade Advocacy
OOH, digital and influencer engagement to
program, we managed to grow a community
make Johnnie Walker relevant in culture.
of ambassadors through reward incentives
for outlets, bar staff training, and consumer Through the above brilliant execution in
offers to drive serve and recruitment. We the current financial year, Johnnie Walker
uplifted Johnnie Walker visibility in trade delivered consistent Equity and Market Share
through bespoke branding of 100 outlets to gains in the International Whisky category to
create a consistent and iconic identity. maintain market leadership.
With the At-Home consumption occasions
becoming dominant during the pandemic,
partnering with emerging channels
especially e-commerce (SafeBoda, Jumia,
Glovo) guaranteed convenience and price
accessibility for consumers.
The Johnnie Walker 200-year anniversary
was a key milestone celebrated by launching
the Icon Limited-Edition packs for Red,
Black, and Gold onto the market supported
by a 360 holistic campaign. Gift-With-
Purchase consumer offers in the off-trade

66 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Uganda
Spirits Brands

Uganda Waragi The Uganda Waragi flavored variants, Coconut

Undoubtedly Uganda’s most loved brand, and Pineapple, have continued to reconstruct
Uganda Waragi maintains pole position as the the architecture of gin consumption and
country’s biggest brand by value, exhibiting spur Uganda Waragi brand efforts to create
resilience in a highly fragmented Gin category excitement, drive recruitment and deliver
that is characterized by an upsurge of new significant volume for the brand.
entrants in the market. The Spirit of Uganda is widely loved and
In the current financial year, a category National appreciated as a high-quality, world-class gin,
Consumer Promotion dubbed Kyusa Levo, boasting of a Gold during the Monde Selection
featuring Bond 7, V&A and Uganda Waragi, Award 2020 and the intent to maintain this
has created emotional attachment, given legacy well into the future.
hope and generated excitement by rewarding
consumers after an unprecedented 2020 and
accelerated the explosion of mainstream spirits
synonymously.

Innovation
Disruption of the mainstream beer Accelerating mainstream spirits with Premiumizing the Gin category with the
category with Guinness Smooth Captain Morgan Gold taste-accessible Gordon’s Pink Gin
Coming off a successful launch that was Following a slow start coupled with a lack Having launched a value proposition in
interrupted by COVID-19 pandemic, we were of consumer understanding of rum in the lower mainstream Gin, we set our sights onto
able to get back in the game with Guinness previous period, an aggressive commercial the PREMIUM SPACE which had not been
Smooth. strategy was deployed behind the brand that supported both ABOVE & BELOW the line.
An aggressive commercial strategy saw us saw us list into 13,000 new outlets delivering We introduced Gordon’s Pink, a new flavored
achieve the fastest and widest distribution impressive incremental NSV. Gin from the Gordon’s family, to tap into the
footprint for an innovation in Uganda, We supported this listing with a massive growing flavored space for the urban female
listing the brand in 80% of called-on outlets, visibility drive in outlets and sampled consumer who is looking for something
disrupting the mainstream category and consumers on Captain & Cola, our signature distinctive to stand out of the crowd on 8th
delivering a fourfold increase in sales. In serve. We also utilized be-spoke partnerships of January, 2021. This move helped register
the process, we tripled Guinness Smooth with Coca Cola Beverages to help us land the impressive results, sampling new consumers
numeric distribution in the financial year. serve across all major consumer touch points. with new Gordon’s Pink, successfully listing
This was supported by always-on Above The Brand equity has grown with currently in new outlets focusing on liquor stores and
Line (ATL) support to drive mental availability and meaningful scores growing in double spirits shops.
at scale using radio, out Of Home and TV, digit. The brand is now set to move to local
which featured an innovative embodiment production in the coming financial year.
of the signature flavor rooms optimized for a
visual audience on TV, achieving double digit
growth in the brand’s awareness.
The 500ml Can format is now available in the
market.

Don Waragi
The sachet ban created a gap in the lower-mainstream spirits category
which we tapped into by creating an accessible and affordable liquid
for the consumer – Don Waragi. The launch of this lower mainstream
value proposition was to boost share from leading and Ambiance Gins
which have been dominant in this space.
The brand was launched in March this year and has been listed in a
growing number of outlets and is on track to grow in this space.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 67

68 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
Our
People

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 69

 Our People and Culture

F
or nearly a century now, the purpose
of East African Breweries Limited (EABL) Our people, fantastic brands and products are at the heart of
has been ‘Celebrating life every day,
everywhere’. Even in these unprecedented our company. We are the present day custodians of some of our
times, we are united by this purpose. And iconic brands in the world, with a responsibility to ensure they
by this we mean so much more than raising
a glass. Everything we do is about creating remain as relevant today as they have in the past and to pass
opportunities, empowering people, building
thriving communities, promoting responsible
them on to the next generation in even better shape.
drinking and protecting the environment.
Our people, fantastic brands and products
are at the heart of our company. We are the
present day custodians of some of our iconic
brands in the world, with a responsibility
to ensure they remain as relevant today as
they have in the past and to pass them on
to the next generation in even better shape.
Our culture is rooted in a deep sense of our
purpose and values, and we are passionate
about our customers and consumers as we
strive to be the best. We give each other the
freedom to succeed and value each and
every person’s contribution.
We work in strong, collaborative teams,
creating a total performance greater than
could be achieved as individuals. The
entrepreneurial spirit ingrained in the
business demands that we exhibit the
belief and determination of those that have
gone before us to provide the best quality
products to consumers wherever they are.
This is why every one of us sells or helps to
sell. All this is only complete when our brands
are in the hands of consumers, being enjoyed
by people all over the world. We each have a
responsibility to actively shape the future of
our great company, inspire through purpose,
invest in talent and win through execution.
The EABL Way
Our people are our biggest asset. Our
East Africa. Our long-term, deliberate and effectiveness and culture, ensuring that:
reputation for professionalism, commitment
elaborate growth agenda for our people • We improve the Quality and Diversity
and integrity is something that we deeply
outlines how we will achieve success of Hiring by embedding hiring for
desire to harness and build upon. Ultimately,
through a host of programmes sharpening Performance in Market(s) to support
this is how we will achieve our ambition to
and developing skills in EABL to deliver on the Inclusion and Diversity agenda and
create the best performing, most trusted
our ambition. Improve Candidate and hiring manager
and respected consumer goods company
globally. experience.
Ensuring that we have the best talent – now Disruptive approach to talent as the • We have put in place an assurance
and in the future – is both one of our biggest bedrock for people’s growth process that focuses on how we plan,
challenges and opportunities to maintain Our disruptive approach to talent focuses on assess and develop talent, underpinned
competitive advantage. EABL has been a top building a talent pipeline and strategically by sound hiring practices, retention of
attraction for the best talent. The company forecasting human resource needs to drive talent and succession cover that enables
has also designed and invested in talent growth. We have outlined four priority areas us win in the marketplace. We conducted
development plans and has been building to guarantee our plans with the right people leadership assessment in Finance, Supply
talent capability across East Africa. and capabilities as we believe in creating and Marketing to identify development
an environment for our people that will areas for future leaders as part of fit-for-
To extend our success, we have continually
stretch, challenge and enable them to grow the-purpose organization;
integrated talent development within our
broader strategy, ensuring that we are more themselves and the business. These areas • Our organisational effectiveness agenda
than the sum of parts of our business across include talent, capability, organisational seeks to transform and enable the delivery

70 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Our People and Culture

We have made a conscious

effort to boost our people’s
skills, embedded by our
firm commitment to help
our people realize and
reach their full potential.

of our performance ambition while our outcomes. It supports individuals in

organisation is known for the consistency,
transparency and pace of its performance
identifying career aspirations with
development actions as a priority. The
70-20-10 principle
in an empowering and winning culture; 70-20-10 principle has been adopted The 70-20-10 principle
• Our recruitment and selection process for development, with 70% practice
ensures fair access to job opportunities and experience coming from one’s has been adopted for
and equal opportunity as we focus on day-to-day job, 20% through coaching development, with 70%
diversity hiring (50:50) irrespective of and mentoring, and 10% from formal
background, disability, religion, gender traditional learning experience, including practice and experience
or ethnicity. We are constantly tracking training and e-learning. Our reward coming from one’s day-
the ratios on a quarterly basis to ensure system encourages equal pay for equal
a balanced approach on internal moves work while it also recognizes and rewards to-day job, 20% through
versus external recruitment in line with exceptional individual performance in
alignment with real business outcomes.
coaching and mentoring,
our Buy/Build strategy. EABL is also
recognized as a net exporter of talent In the past year, we have seen incredible and 10% from formal
with 43 employees on International outcomes being delivered through traditional learning
Assignment in F21. quarterly goal-setting aligned to the
rhythm of setting and delivering quarterly experience including
EABL Talent Programmes
financial targets to drive a culture of agility training and e-learning.
and performance with pace and urgency
We have made a conscious effort to boost
• Graduate Programme – A process that
our people’s skills, embedded by our firm
assesses entry-level talent with high
commitment to help our people realize and
potential to join a 3-year rotational
reach their full potential. To achieve this, we
programme in Sales, Marketing, Supply,
have numerous learning and development
Finance or Enabler functions such as Legal,
channels, but we also strongly believe that
Human Resources, Corporate Relations
our leaders are key in creating the conditions
and others.
for our people to succeed. Some of these are:
• LEAP – A programme designed to create
• Partners for Growth (P4G) – Our
a breakthrough in leadership capability
performance management system
demonstrating the leadership standard at
that puts performance and career
senior management level with a view to
conversations at the heart of the process,
shift from functional to cross-functional
focusing on using and building strengths
business know-how and impact.
with two-way development conversations
to deliver both business and personal • Fast Forward – A unique learning journey

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 71

 Our People and Culture

for aspiring leaders who want to develop Continuous Learning Team

their next leadership level with increased
self-awareness exploiting their full
potential and supporting our business
objectives.
• Senior Leadership Management Program/
Advanced Leadership Management
Program – a unique learning journey
designed for senior leaders to accelerate
their career. Fourteen of our senior leaders
from across EABL are currently on this
program.
• Women in Leadership – in partnership
with Strathmore Business School, we have
continued to run a ‘Women in Leadership’
programme since 2015 and have built the
leadership capability of over 360 women
in our business.

Continuous Learning: Building critical

skills for the future overall winners in the continuous learning objectives and is aligned to our standards of
Continuous and purposeful learning powers category during the Global HR Hero Award leadership, values and culture. We recognize
our performance and growth. This year for driving a continuous learning culture. employees at all levels and primarily through
we set out to define and embed a learning We have also launched three book clubs in our products/brands and through non-cash
strategy that supports talent strategy Kenya, and Uganda recently launching the awards. We use cash awards in certain unique
and employee experience supported by Spirited Women Book club. cases with the approval from the Managing
My Learning Hub, which is an e-learning Director. We recognize publicly in order to
In SBL, the team continued to upskill the
platform that provokes everyday learning inspire and create transparency.
field sales teams to ensure our execution
from everyday experiences that promote standards are aligned to Diageo way of world To remain truly transformative to our
speed of execution, experimentation and class sales by leveraging on technology to employees, we have in place a robust end-
delivers incremental market share. ensure our people are updated on changing to-end welfare and rewards programme
We developed robust learning strategy technological environment. SBL continued including:
at EABL to equip learners with the best to implement short-term rotational • A host of quarterly and annual rewards
capabilities and tools to seize growth secondments, structured mentoring program including annual salary reviews,
opportunities and tackle new challenges. My and ongoing education and leadership performance rewards, spot recognition,
Learning Hub, our e-learning platform, gives development opportunities. functional recognition, company-wide
employees everything they need for their We have also engrained inclusion as a key recognition and long-service awards.
own development, making it easy to find, capability that we keep unlocking for our • A mortgage benefit scheme, partly funded
use, share and comment on a wide range of employees through training sessions on by EABL, in consideration that one of the
learning options. These include world-class unconscious bias, confronting racial bias highest priorities for our employees is the
capabilities from across our global teams and and other aspects of driving and embedding ability to own a home and this aspiration
from external resources. This has seen over inclusion. is an integral part of their financial plans.
40,000 courses completed. • An employee medical scheme and
In F21 we drove agility and resilience in the People welfare and rewards wellness programme to ensure a healthy
business through continuous learning at workforce across our business. The
both leadership and functional level, through The welfare of our people remains a critical
medical scheme also includes COVID-19
quarterly learning themes aligned to business part of our growth agenda, cognizant of the
related illnesses.
priorities, learning provocation at quarterly fact that our performance as a company will
remain robust only if they consider EABL • A clinic fully resourced to provide general
staff engagement sessions and using and specialist medical care to employees
functional learning to upskill employees and a great place to work in. We take a Total
Reward Approach, i.e., we focus not just on and their families. EABL Kenya recently
allow experimentation e.g. e-commerce that launched E-Health, which is an online
enabled the introduction of Party Central, the financial rewards, but also non-financial
rewards. Together, these form our employer medical platform that allows employees
an online platform that promotes speed of to access medical care remotely.
execution. This was all done while leveraging value proposition.
on Executives and Leaders at Teachers to Our recognition principles support this intent • Collective Bargaining Agreement that
drive continuous learning across EABL. as we aim to make recognition immediate spells out all the working conditions and
These efforts saw the Kenya cross functional i.e. as close as possible to the event that has applicable labour relations with the union
Learning team being recognized as the led up to it. We recognize behaviour that as mutually agreed.
supports our short and longer-term business • An Employee Share Ownership Plan

72 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Our People and Culture

(ESOP) connecting employment to the at the same time conducting virtual trainings
long-term success of our business. The on wellness to help us cope with these Over the past year, we have
plan forms a crucial part of employee difficult times. Our mission-based culture
engagement and commitment to driven by cross-functional teams has been supported our front-line
creating sustainable value for both our a standout feature in managing this crisis supply and commercial
people and our business. robustly and holistically.
• Family Leave Policy that offers all female We designed Return to Work site procedures
teams with Personal
employees in East Africa a minimum of for anyone entering EABL sites to ensure Protective Equipment
26 weeks of fully paid maternity leave, that a safe return to work was implemented
regardless of where they live and work in line with government guidelines while (PPE), while at the same
and fully-paid paternity leave of 4 weeks. ensuring an environment that supports time conducting virtual
our employees’ well-being and safety as
• Flex Philosophy that allows employees
to own how they’ll create their best the primary concern. Key focus has been to trainings on wellness to
work and deliver high performance by ensure safety and hygiene at work is ongoing, help us cope with these
to lay out protocols on elevated hygiene and
optimizing where work takes place and
when work takes place. social distancing measures in our workplaces. difficult times.
Responding to COVID-19 Pandemic As the coronavirus outbreak continues
around the world, our focus remained firmly
At EABL, our top priority has been to
on the well-being of our employees and In addition to the above benefits, there has
safeguard the health and well-being of the
we have remained committed to providing been a wide range of webinars, information
employees during these unprecedented
policies and global applicable benefits to and other learning materials through My
times of the COVID-19 pandemic, while
increase emotional support to our employees Learning Hub that are designed to support
taking necessary action to protect our
and their families through the uncertain employees on wellness and change.
business and to support our partners and
times. These benefits included:
communities around us.
Employee Assistant Programmes (EAPs) -
We responded to the pandemic in our Flex Philosophy
EAPs provide key support including free 24-
markets through the cross-functional teams In response to the increasing demand to have
hour confidential counselling and advice
(CFTs), supported by local crisis management flexible working arrangements accelerated by
for employees and their immediate family
teams tracking the welfare of employees COVID-19, EABL adopted The Flex philosophy
members. They cover a broad range of topics
through various projects and best practice which embeds a mindset that underpins the
that are personal and/or work-related. In
protocols aligned with government Diageo Culture, one where we have highly
addition, Uganda instituted a COVID Care
strategies and our people’s safety and engaged and high performance teams
Management programme for staff and their
well-being. We continued implementing working towards our Performance ambition.
dependents.
safety protocols which included: having all The Flex philosophy enables our people to
employees who were able to do so working Bereavement Leave - employees are
supported to step away from work and take own how they’ll create their best work and
remotely, and heightened sanitation deliver high performance, provide agility, and
measures and restrictions on movement time to mourn a loved one. Every employee
has access to bereavement leave upon the enable productivity for our business today,
within our production and warehousing tomorrow and in the future.
sites. loss of an immediate family member.
Life Insurance – It ensures that the employee’s The Flex philosophy provides a set of guiding
Over the past year, we have supported our principles around ad hoc flexibility that
front-line supply and commercial teams with loved ones or other named beneficiaries are
provided with a financial payment in the optimizes where work takes place and when
Personal Protective Equipment (PPE), while work takes place. Flex working may be one-
event of loss of life of the employee.
off, short term, regular or intermittent.

Employer Brand
Driving business performance and employee
immersion sits at the core of our mission. Our
refreshed performance ambition calls for us
to create an enabling environment that spurs
employee engagement. In order to achieve
this, we have created forums to immerse the
whole organisation into strategy and mission
through quarterly: Extended Leadership staff
engagements, Emerging Leaders sessions
and All staff Engagement sessions, to cascade
business priorities, rally organisation energy
to deliver business priorities while working
with various brands and messages displayed
on screen savers to reinforce the message.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 73

 Our People and Culture

In alignment with our people strategy, we

reimagined our approach to growing talent EABL is a diverse business
by deploying cross-functional teams through
the launch of Opportunity Market place as a
way of encouraging learning from each other,
and we believe it is
important for our future
+2%
faster and better decision making, agility
and responsiveness to changing consumer success that our workforce Over the past five years,
needs while leveraging insights to unlock
innovation at scale across our business.
reflects the parts of the we have witnessed an
In addition, we have enhanced our employee world in which we operate. annual growth in gender
advocacy by seeing more content being
posted by our employee-base on LinkedIn inclusive in nature, as it values everybody
diversity. We have recorded
by sharing their Diageo story. Over 95% of irrespective of background, religion, sexuality, +2% increase in female
graduates and new joiners have shared their
Diageo story using a Graphic Interchange
or ethnicity. We have been making a lot of
progress over the last few years in this area
population year on year
Format (GIF) whilst showcasing Diageo’s and increasingly our employees feeling really across all our EABL markets.
investment in talent to a wider pool of proud of the impact we are having not only
connections. inside the organisation, but also externally. Gender Diversity
In a recent Your Voice survey, 93% of our Achieving gender equality and
Diversity is in our DNA employees at EABL are engaged and feel that empowerment is a key focus area for us
EABL is a diverse business and we believe it they can be themselves regardless of their and ties in with United Nations Sustainable
is important for our future success that our diverse backgrounds. Development Goal 5 on empowering
workforce reflects the parts of the world As part of our inclusion and diversity agenda, women and girls. To this end, we have put
in which we operate. This clearly includes we have designed policies and targets on in place measures and frameworks to ensure
having women in leadership positions. We recruitment that support gender parity that we align our business to meet this target.
are currently at 36% female representation at in recruitment, developing and retaining Across EABL, we are particularly proud that
Leadership level across EABL. In January 2021, our employees. The policies also govern we are focused on achieving greater diversity
Mrs. Jane Karuku became the first female workplace practices on human rights and at the most senior level. Our ambition
EABL Group MD. dignity. continues with an intent to have our senior
There has been marked progress in this We know that for our business to thrive and leadership team at 50% by 2025.
agenda, a deliberate journey intrinsic in our for EABL to realize its ambition, we depend We don’t only focus on our leaders within the
culture of diversity. EABL’s intention is to on having diverse talent with a range of business; all our graduate programmes and
ensure diversity is sustained in the leadership backgrounds, skills and capabilities in each our midcareer development programmes
roles. All members of our Executive of the countries in which we operate and to ensure they have an equal intake of women
Committee are individually responsible for reflect our broad consumer base. We view and men to attract, retain and grow the best
helping EABL realize its society 2030 goals. diversity as one of the key enablers that help talent.
We believe the importance of role models our business grow. Over the past five years, we have witnessed an
should never be overlooked. We make sure To effectively sustain the various aspects of annual growth in gender diversity. We have
our female leaders through our Spirited inclusion and diversity, we have embedded recorded +2% increase in female population
Women network and Ceiling Shatters pipeline programmes accelerated towards year on year across all our EABL markets. We
network are highly visible, with a platform achievement and sustainability of gender continue to deliver shifts in gender diversity
to share their career stories with candor, diversity.
whether that is at panel discussions, awards
or coaching and mentoring events.
In Uganda, the team launched Girls 4 Girls
mentorship program that saw the graduation
of 98 of our female talent and Launch of
Legends as an employee advocacy group for
the male population.
We have partnered with local partners to
conduct site accessibility audit to pave the
way for recruiting Persons with Disability.

Building an Inclusive and Diverse Culture

Celebrating our inclusive and diverse culture
is core to EABL’s purpose of “celebrating
life every day everywhere”. This purpose is

74 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Our People and Culture

whilst building out our focus in broader areas suppliers. For example, in marketing, through programme for female university students
of diversity, including disability and ethnicity. our brands we have signed up female taking courses in Science, Technology,
In F21 we focused on gender diversity in directors to work with us in advertising Engineering and Mathematics (STEM) to
our supply and manufacturing sites through and leading the way to shape progressive give them a learning opportunity across East
programs such as STEM, Apprenticeship portrayal in our advertising. Africa.
and Graduate programs. We have had Today, 100% of our Cube Spirits Line in The STEM apprentice programme has been
more women progressing into senior Tanzania is female and in Uganda, 75% of the deployed at scale across our business in
Leadership roles across other functions in production team in Line 5 is female. Kenya, Uganda and Tanzania with a broader
General management, Finance, Supply and Science, Technology, Engineering, strategic intent of improving female diversity
Commercial. Through these initiatives, we Mathematics (STEM) Programme year on year within our supply chain function.
surpassed our FY21 target of 3% increase in In F21 we have enrolled 35 women into the
To be more deliberate in our commitment
female hires, closing at 7.4%. STEM programmes through apprenticeships
to build a more diverse and inclusive
Gender diversity has gone beyond our environment across our business, EABL across Kenya, Uganda and Tanzania.
employees and into our partners and recently launched an apprenticeship

UBL STEM team

KBL STEM Team

Commercial Graduate Trainee

Programme
In May 2021, we launched a
commercial graduate programme
aimed at accelerating growth of
women in commercial and increase
female representation from the current
33% to 50% by the year 2025. The
programme is also aimed at creating a
pipeline of future commercial leaders
within our business.
We have on-boarded 10 female
commercial graduates in Kenya
and seven in Uganda. We intend to
accelerate this program in Tanzania
in F22 as part of our strategic intent
at improving female diversity across
EABL. KBL Commercial graduate trainees UBL Commercial graduate trainees/CGT

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 75

 Compliance and Risk Management

DOING BUSINESS, THE RIGHT therefore unable to detect and report performance, and/or our reputation. Our
WAY FROM GRAIN TO GLASS breaches for investigation. We will maintain approach is holistic and integrated, bringing
vigilance as the situation starts to return together risk management, internal controls
Doing the right thing in the right way is
to normal. We however had 21 employees and business integrity, ensuring that our
the foundation of our business. That means
dismissed across EABL for CoBC breaches, a activities across this agenda focus on the risks
embedding Business Integrity into the way
91% increase vis-a-vis last year. that could have the greatest impact.
we work, every day, everywhere. We remain
deeply committed to operating in the right Accountability for managing risk is embedded
into our management structures. Each market
way in everything we do. Compliance and OUR PRINCIPAL RISKS AND RISK
conducting our business with integrity are and function undertakes an annual risk
MANAGEMENT assessment, establishes mitigation plans and
non-negotiables, and our approach to risk
Risk Management Framework monitors risk on a continual basis. Similarly,
and compliance helps us go beyond the
basics to encourage the right behaviours and Well-managed risk-taking lies at the heart our Audit and Risk Committee regularly
attitudes everywhere, every day. of our Performance Ambition, “To create assesses risk and the Board independently
the best performing, most trusted and reviews the assessment. This Committee met
EABL’s Business Integrity team ensures
respected consumer products company in quarterly and received regular reports on
the business complies with the Diageo
the region”. Great risk management drives the risks faced across the business and the
global Code of Business Conduct (COBC)
better commercial decisions, protects our effectiveness of the actions taken to mitigate
and applicable policies and standards. We
assets and supports a growing, resilient and these risks. We use internal and external data
undertake annual mandatory policy training,
sustainable business. to monitor our risks and to make proactive
with an integrated Annual Certification of
Our approach interventions. We also establish cross-
Compliance (ACC) for all employees, this was
functional working groups and draw on the
completed by 100% of eligible employees in We believe that great risk management starts advice of experts where necessary to ensure
2020. Global training is delivered in an easily with the right conversations to drive better significant risks are effectively managed, and
accessible e-learning format through My business decisions. Our focus is to identify where appropriate escalated to the Executive
Learning Hub. and embed mitigation actions for material and Board for consideration.
Another area of potential compliance risk is risks that could impact our current or future
our interactions with third parties. Our Know
Your Business Partner (KYBP) programme
is designed to help us evaluate the risk of
doing business with a third party prior to
entering into a contractual relationship, as
well as monitor any changes throughout
our interactions. We assess all our business
partners for potential compliance risks such
as bribery and corruption, money laundering,
tax evasion facilitation, data privacy breaches
or other reputational red flags, and implement
additional due diligence processes for those
that pose a potentially higher risk. Central
oversight is provided by our Business
Integrity and Legal teams which undertake
regular reviews on the effectiveness of the
programme.
Breach Management
We encourage our employees, and anyone
we do business with, to raise concerns about
potential breaches of our code or policies.
Our confidential whistle-blowing help line,
SpeakUp, is available via phone or web
portal, enabling anyone to report a concern.
Additionally, we encourage employees to
come forward to their line manager, legal, HR
or risk and compliance and business integrity
partners.
This year, 27 allegations of breaches were
reported, a 56% decline compared to last
year. The decline in reported breaches could
be potentially due to COVID-19 disruption
with staff out of normal duty stations and

76 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Compliance and Risk Management

Identify:
Deep dive to identify
our top risks

Continuous review: Assess:

Utilizing fresh information Assess the likelihood
to drive insightful and impact of risks to drive
discussion and effective effective, prioritized
decision-making mitigations

Mitigate:
Monitor and report: Develop and embed
Insightful reporting mitigation actions

FOCUS IN THE YEAR

We classify our risks into the following categories:
• Strategic/external • Operational
• Compliance/regulatory • Financial

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 77

 Compliance and Risk Management

Identifying our principal risks

The Executive and Board considered the group’s principal risks and reviewed our risk appetite, setting the level of tolerance we have for risks
that could impact delivery of our strategic objectives. There continues to be a focus on identifying and assessing potential emerging risks. The
following are the principal risks and related mitigation strategies that receive close management attention:

Risk Impact Mitigation

Adverse impact of COVID-19 pandemic on Our business operations and performance • Activate Crisis Management Team
business operations have been impacted by the containment (CMT) – led by Executive – and Business
measures adopted by the three govern- Continuity Teams (BCT) – led by Extended
ments such as closure of on-trade as they Leadership Team members – with regular
seek to mitigate the impact of the pandemic, sessions to monitor principal indicators,
and the resulting disruption and economic discuss evolving COVID-19 risks, people
effect on our consumers, customers and safety and security and business continu-
suppliers. ity measures and formulate appropriate
mitigating actions (including standard
operating procedures – SOPs).
• Leverage available trade channels
depending on circumstances (mostly off-
trade channels that include supermarkets,
convenience stores, cash and carry, etc.)
to continue to drive sales.
• Utilise e-commerce sales opportunities
to deliver product directly to off-trade
customers and consumers.
Supply chain disruptions and constraints Supply chain disruptions in raw, packaging • Robust planning process that provides
and other auxiliary materials due to the early warning to supplier failure without
COVID-19 pandemic, climate change and jeopardizing short term production
supplier failure results in lost production, out • Adapted grain varieties to secure grain
of stock, lost sales opportunity, reputation- supplies.
al damage and inability to meet business
targets.
Volatile and challenging macroeconomic Generalised downturn, currency instability, • Tracking of current changes in mac-
environment inflationary pressure, fast-rising unemploy- ro-economic environment through BPM
ment during the COVID period resulting process to understand changes in overall
in increased competition and continuous market.
pressure on disposable income thereby • Quarterly business review meetings by
impacting business performance. the executive to evaluate the relevance
of strategic pillars to the current market
Increased government debt necessitating environment.
high taxation in turn resulting in reduced • Development and review of the 5-year
consumer purchasing power due to low strategy which is pillared on current and
disposable incomes. future macro-economic trends.
• Roll out ‘Raising the Bar’ to support out-
lets abide by COVID-19 Health protocols.
• Price advocacy campaign to support
affordable pricing.                                  
• Portfolio proofing through formats.

78 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Compliance and Risk Management

Unpredictable Legislative, Regulatory and Unpredictable regulatory environment re- • Engagement and lobbying with the
Tax Environment sulting in unexpected change in legislation/ Ministries of Finance and Tax Authorities
government directives which can have an for favourable tax regimes.
immediate impact on our RTC and Supply • Periodic tax health checks done by tax
processes, material supply, COGS and gener- experts.
al inability to achieve business targets. • Tax working group that meets quarterly
to discuss any tax risks and mitigations.
Frequent changes to customs duties and tar-
iffs impacting affordability of our products.
Impact from political Security incidents (including possible terror • The business continues to monitor the
instability and security attacks and volatile situations) pose a risk to political situation keenly while taking ap-
threats including terrorism our people, assets and business operations propriate business measures to safeguard
causing injuries/loss of life, business interrup- our operations.
tions and direct financial loss. • Proactive intelligence gathering, in-
creased surveillance, screening around
Business disruptions impacted by political and across all our facilities with additional
instability. physical security measures to enhance
our detection capability and serve as
additional deterrence.
Critical industry developments as consumers Growing illicit trade (counterfeit, contraband, • Highly diversified portfolio of brands to
move away from our brands to alternative substandard and unregulated products) and ensure coverage of consumer occasions,
products infringement of IP (intellectual property) trends and price points.
adversely affect our business resulting in • Rigorous processes of strategy and in-
financial and reputational exposure. novation development at corporate and
market level.
• Systematic review of emerging consumer
and route to consumer trends at market
and brand level, including growth of
disruptive digital technologies.
• Market surveillance and information shar-
ing with relevant authorities to gather
actionable information pointing to illicit
and contraband activity for action by the
authorities.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 79

 TAIFA LETU. FAHARI YETU. BIA YETU.
80 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
HAIRUHUSIWI KUSAMBAZWA AU KUUZWA KWA WALIO NA UMRI CHINI YA MIAKA 18. TAFADHALI KUNYWA KIISTAARABU.
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2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 81
82 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
Our
Leadership

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 83

 Board of Directors

Dr. Martin Luke Oduor-Otieno, CBS Mr. John O’Keeffe (Age 49) Mrs. Jane Karuku, MGH (Age 59)
(Age 65) Non-Executive Director and Group Vice Chairman, Irish Executive Director, Group Managing Director and CEO,
Independent Non-Executive Director and Group Chairman, Appointed to the Board in July, 2015. Kenyan
Kenyan Appointed to the Board in September 2013.
Mr. John O’Keeffe is the current President,
Appointed to the Board in May, 2016 and appointed as Group Ms. Jane Karuku is the Group Managing
Chairman in January, 2020.
Diageo Africa. He is also a member of the
Diageo Global Executive Committee and Vice Director and CEO of EABL having been
Dr. Martin Luke Oduor-Otieno, CBS, was Chairman of Guinness Nigeria Plc. Prior to appointed on 1st January, 2021. Previously
appointed as the Group Chairman of EABL his appointment as President, Diageo Africa, she was the Managing Director of Kenya
on 1st January, 2020. He is also the Chairman he was the Managing Director for Guinness Breweries Limited (KBL) since July 2015. She
of Kenya Breweries Limited and UDV (Kenya) Nigeria Plc. Mr. O’Keeffe has worked at Diageo is a dynamic business leader, with strong
Limited, both subsidiaries of EABL. He is for 26 years, during which period, he has management experience spanning over
the founder and CEO of The Leadership gained a wealth of experience across both 20 years in FMCG and Non-Governmental
Group Limited, a Nairobi-based consulting emerging and developed markets namely organisations. Prior to her appointment to
firm, which is involved in facilitating board Ireland, Jamaica, Sweden, Greece and Russia. KBL, she was the President of Alliance for a
practice, leadership training as well as Mr. O’Keeffe holds a Bachelor of Commerce Green Revolution in Africa (AGRA). She has also
providing executive coaching and business (Hons) (Economics and Marketing) Degree previously held a number of senior positions
advisory services. Dr. Oduor-Otieno has sat from University College Cork, Ireland. in various companies including Deputy Chief
on many boards and currently holds non- Executive and Secretary General, Telkom
executive directorships in BAT Kenya Plc, as Kenya and Managing Director, Cadbury East
well as Standard Bank Group. He previously and Central Africa. Prior to that Ms. Karuku
worked with Deloitte East Africa as a Financial worked with Farmers Choice Kenya and
Services Partner, and with KCB Group as Kenya Cooperative Creameries. She has been
Chief Executive Officer among other senior a member of the board of Barclays Bank of
private sector appointments. He has also Kenya and Junior Achievement-Kenya. She
served as Permanent Secretary, Treasury is currently the Chairperson of the Kenya
in the Government of Kenya. Dr. Oduor- Covid-19 Fund, Chairperson of Kenya’s
Otieno holds an honorary Doctor of Business Vision 2030 Board, a Trustee at the United
Leadership degree from KCA University, States International University (USIU) and
Executive MBA from ESAMI/Maastricht is a board member at Kenya Association of
School of Management and Bachelor Manufacturers. Ms. Karuku holds a Bachelor
of Commerce degree from University of of Science Degree in Food Science and
Nairobi. He is also an alumnus of the Harvard Technology from the University of Nairobi
Business School’s Advanced Management and an MBA in Marketing from the National
Program and a Fellow of the Kenya Institute University of California.
of Bankers, Institute of Certified Public
Accountants of Kenya, Institute of Directors
Kenya and Institute of Certified Secretaries
Kenya in addition to holding an International
Coaching Federation Credential as an
Associate Certified Coach.

84 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Board of Directors

Mr. Japheth Katto (Age 70) Mr. John Ulanga (Age 50) Ms. Carol Musyoka (Age 49)
Independent Non-Executive Director, Ugandan Independent Non-Executive Director, Tanzanian Independent Non-Executive Director
Appointed to the Board in February, 2014. Appointed to the Board in June, 2019. Appointed to the Board in September, 2015.
Mr. Japheth Katto is a consultant in corporate Mr. John Ulanga is currently the Country Ms. Carol Musyoka is a lawyer, business
governance and financial services regulation. Director for Trade Mark East Africa. Prior to executive and entrepreneur, and is the founder
He was the first CEO of Uganda’s Capital this, he served as the Vice President, External and Chief Executive Officer of Carol Musyoka
Markets Authority from 1998 until 2013. Mr. Affairs and Sustainability for BG Group, a Consulting Limited. She currently provides
Katto has a wealth of experience in both the world leader in oil and gas exploration in consulting and knowledge partnerships for
private and public sectors having held various East Africa. He is a seasoned director and various local and international institutions
accounting, auditing, insolvency, companies’ sits on several boards and is currently the specifically in the areas of leadership and
investigation and financial services regulation Chairman of the University Council of the corporate governance, aimed at improving
roles in East Africa and the UK. He is the Hubert Kairuki Memorial University, Dar board performance. She was previously an
Board Chairman of Stanbic Uganda Holdings es Salaam, the Chairman of the Board of Executive Director at Barclays Bank of Kenya
Limited and Uganda Breweries Limited. He is Directors of Tanzania Financial Services for Limited holding the position of Corporate
an adjunct faculty at Strathmore University the Underserved Settlements (TAFSUS), an Director. She currently holds Non-Executive
Business School. Further, he was a member initiative to upgrade slums and underserved directorships in BAT Kenya plc. She also chairs
of the Global Council of the Association of settlements in Tanzania, as well as the the Business Registration Services, a parastatal
Chartered Certified Accountants (ACCA) and Chairman of the Board of Directors of KCB under the Office of the Attorney General and
sat on the boards of the New York based Bank Tanzania Limited. He holds other non- is adjunct faculty at the Strathmore University
International Federation of Accountants, executive directorship roles as a Director Business School.
Duke of Edinburgh International Award of Mwananchi Communications Limited
Uganda and Junior Achievement Uganda. (publishers of The Citizen, Mwananchi and
Mr. Katto has previously held key public Mwanaspoti Newspapers), Mr. Ulanga is also
appointments in Uganda including a Member of the Africa Policy Advisory Board
commissioner on the Judicial Commission of ONE Campaign (www. one.org), a Fellow of
Enquiry into the Closure of Banks and Council the African Leadership Initiative, East Africa
member of Africa Peer Review Mechanism. and the Aspen Global Leadership Network of
He is a Makerere University B.Com graduate, the Aspen Institute in Colorado, USA.
Fellow of ACCA, member of CPA Uganda and
a Certified Corporate Governance trainer.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 85

 Board of Directors

Mr. Jimmy Mugerwa, (Age 56) Mr. Leo Breen (Age 55) Ms. Risper Ohaga (Age 45)
Independent Non-Executive Director, Ugandan Non-Executive Director, British Executive Director and Group Chief Financial Officer,
Appointed to the Board in July, 2018. Appointed to the Board in January 2020 Kenyan
Appointed to the Board in May 2020.
Mr. Jimmy Mugerwa is an experienced Mr. Leo Breen is the Finance Director, Diageo
business executive leader with a Africa, a role he has held since 2017. He Ms. Risper Ohaga is the EABL, Group Chief
distinguished 27-year career in the oil and gas has over 25 years of experience with the Financial Officer. She is a seasoned finance
industry, both upstream and downstream. Diageo Group and has overseen Finance professional with over 20 years’ experience
Until recently, Jimmy worked with Tullow operations for Diageo businesses in over 40 and is a seasoned Board member. Ms. Ohaga
Oil PLC as the Group Africa advisor and was countries across Europe, Asia and Africa. He joined EABL in February 2020, from the Absa
the Managing Director for Tullow Uganda is an influential executive with a track record Group (previously Barclays Africa Group)
Operations Ltd for eight years. Prior to this, of driving business growth both in major where she held various senior roles across
he worked for 19 years for Royal Dutch Shell markets and emerging markets. Mr. Breen has several African markets with the most recent
where he held various senior executive a BA Hons in Philosophy from the University of posting being Finance Director of Absa Bank
roles including Senior Regional Advisor for Newcastle Upon Tyne and is a CIMA qualified Zambia Plc. Prior to that, she held the role of
Sub Saharan Africa; Africa Retail Marketing accountant from the Chartered Institute of Managing Director for Internal Audit based
Manager; General Manager for Sales and Management Accountants. in Johannesburg. She has extensive regional
Operations Shell East Africa/ Country Chair experience in tax and regulatory matters,
for Kenya Shell as well as directorship roles strategy, risk management and corporate
in several boards for the Shell companies finance, having started her career in KPMG
across East Africa. He currently serves as the Kenya. She is a CPA (Kenya) and holds a BCom
Chairman of the DFCU Bank Board and holds (Hons) in Accounting from The University of
leadership roles on various boards including Nairobi.
non-profit organisations. Until December
2019, Jimmy chaired the Presidential Investor
round table for Oil and Gas for four years. He
was a co-founder chair, together with the
late Professor Wangari Maathai, of the Karura
Forest Environmental Education Trust. He
is also a former Chairman of the Managing
Committee of Starehe Boys Centre. Jimmy
holds a B.Sc. (Agric) from Makerere University
and an M.Sc. degree from the University of
Wales. He also holds the Financial Times Non-
Executive Director Post-Graduate Diploma,
holds several certificates in Oil and Gas
and is an alumni of the Executive Business
Leadership Programme at IMD in Lausanne,
Switzerland.

86 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Board of Directors

Company with effect from 16th October

2020. Ory has previously been the Managing
Director, Omidyar Network and Luminate
Group in Africa. She serves on the Board
of several organisations including the
Thomson Reuters Founders Share Company
and Harvard University’s Centre for African
Studies.
She has previously worked with Google as
the Policy and Strategy Manager for Africa
where she was credited for leading several
Ms. Ory Okolloh, (Age 44) groundbreaking efforts around access, local Mr. Dayalan Nayager (Age 40)
Independent Non- Executive Director, Kenyan Non-Executive Director, South African
content and regulatory reforms. Ory holds
Appointed to the Board in October, 2020. a Bachelor of Arts (Political Science) degree Appointed to the Board in March, 2021.

Ms. Ory Okolloh was appointed an from the University of Pittsburgh and a Juris Mr. Dayalan Nayager is the Managing
Independent Non-Executive Director of the Doctor (J.D.) from Harvard Law School. Director for Diageo Great Britain. In this role
he is responsible for Diageo’s home market.
Diageo is the world’s leading premium drinks
business operating in 180 countries with
a collection of over 400 brands including
Johnnie Walker, Smirnoff, Captain Morgan,
Tanqueray and Guinness. Dayalan is based
in London and is a member of the Diageo
Europe Executive team.
Prior to this role, Mr. Nayager was Managing
Director for Diageo Travel Retail, one of the
company’s key markets. During his time
in Global Travel he transformed business
delivery, developed a high performing
cross-functional team and embarked on an
Ms. Kathryne Maundu, (Age 43) Mr. Andrew Cowan (Age 54) ambitious strategy that successfully grew
Group Company Secretary, Kenyan Group Managing Director and CEO, Diageo’s travel retail business. Before joining
Appointed Group Company Secretary in March 2020. Resigned from the Board in March 2021. the Global Travel business, Mr. Nayager
Ms. Kathryne Maundu is a Partner at Stamford Mr. Andrew Cowan is an established business was Commercial Director of Brandhouse
Corporate Services LLP, part of Bowmans leader, with a wide range of commercial and in Diageo South Africa where he delivered
in Kenya. She is an expert in Corporate strategic management experience spanning strong performance and deepened customer
Governance within the East Africa region over 20 years in the FMCG sector. Prior to this partnerships.
and has been instrumental in advising appointment, he led Diageo Great Britain Mr. Nayager has extensive experience in
leading corporates in the public and private (GB). Mr. Cowan’s experience straddles the consumer-packaged goods industry,
sector, over the last 15 years. Ms. Kathryne corporate leadership, strategy development, having previously held leadership roles
is recognised as a leader and mentor in operational management as well as sales and across Commercial, Supply Chain, R&D
society and has been named as a Top 40 marketing. Andrew joined Diageo in 2008 as and Marketing for Mars and Heinz. He is
under 40 Women in Kenya; she is a member Commercial Director for Northern Ireland passionate about developing strong talent
of the Women on Boards Network, Women and was appointed to the role of Commercial and is known for his ability to implement a
Corporate Directors (Kenya Chapter) amongst Director in the Republic of Ireland a year structured and disciplined approach that
other accolades. Ms. Kathryne is an Advocate later. He returned to GB in 2011 and led the drives stronger performance and sustainable
of the High Court of Kenya, a member Diageo GB business until his appointment to growth.
of the Law Society of Kenya, a registered EABL. Mr. Cowan resigned from the Board in Mr. Nayager holds a Bachelor of commerce
Certified Public Secretary and an Accredited December 2020 to take up a new role within in Marketing from the University of KwaZulu-
Governance Auditor with the Institute of Diageo. Natal, a Bachelor of Commerce in Business
Certified Secretaries of Kenya. Management from the University of South
Africa and an MBA from the University of
Oxford.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 87

 Senior Management

Mrs. Jane Karuku, MGH Ms. Risper Ohaga Mr. Colin O’Brien Ms. Ednah Otieno
Group Managing Director & Chief Executive Officer Group Chief Financial Officer Global Supply Operational Excellence Outgoing Group Human Resources Director
and EABL Supply Chain Director

Mr. Mark Ocitti Mr. Alvin Mbugua Mr. John Musunga

Serengeti Breweries Limited Managing Director Outgoing Uganda Breweries Limited Managing Director Kenya Breweries Limited Managing Director

Mr. Eric Kiniti Mr. Nadida Rowlands Mr. Graham Villiers-Tuthill

Group Corporate Relations Director Group Legal Director Group Marketing and Innovations Director

88 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 89
 NOTICE AND AGENDA OF THE 2021 ANNUAL GENERAL MEETING

TO ALL SHAREHOLDERS 5) To receive, consider and if thought fit approve the Directors’
NOTICE is hereby given that the Ninety-Ninth Annual General Remuneration Report and the remuneration paid to the Directors
Meeting of East African Breweries Limited will be held via electronic for the year ended 30th June 2021.
communication on Tuesday, 14th September 2021 at 11:00 a.m. East 6) To re-appoint PricewaterhouseCoopers (PwC) LLP as Auditors of the
Africa Time (GMT+3) to conduct the following business: - Company in accordance with the provisions of Section 721(2) of
the Companies Act, 2015 and to authorize the Board to fix their
remuneration for the ensuing financial year.
ORDINARY BUSINESS:
7) To consider any other business of which due notice has been given.
1) To receive, consider and if thought fit, adopt the Annual Report and
Audited Financial Statements for the year ended 30th June 2021
together with the Directors Report and Auditors’ Reports thereon. SPECIAL BUSINESS:
2) Dividend 8) Change of Company Name
To note that the Directors do not recommend a dividend for the To consider and if thought fit to pass the following resolution as a
Financial Year ended 30th June 2021. special resolution, as recommended by the Directors: -
3) Election of Directors: “That the name of the Company be and is hereby changed from
a) Japheth Katto retires in accordance with Clause 2.5 of the Code ‘East African Breweries Limited’ to ‘East African Breweries Plc’ in
of Corporate Governance Practices for Issuers of Securities to the compliance with Section 53 of the Companies Act, 2015 and with
Public 2015, Special notice is hereby given pursuant to Section effect from the date set out in the Certificate of Change of Name
287 of the Companies Act, 2015, that notice has been received, of issued in that regards by the Registrar of Companies”.
the intention to propose the following Resolution as an Ordinary
Resolution at the 2021 Annual General Meeting:- BY ORDER OF THE BOARD
‘That Japheth Katto who has attained the age of 70 years, be and is
hereby re-elected a Director of the Company.’
KATHRYNE MAUNDU
b) Ory Okolloh was appointed during the financial year to fill a casual
COMPANY SECRETARY
vacancy on the Board. She retires in accordance with the provisions
of Article 116 of the Company’s Articles of Association, and being
eligible, offers herself for re-election. Date: 17th August 2021
c) Dayalan Nayager was appointed during the financial year to fill a
casual vacancy on the Board. He retires in accordance with the
provisions of Article 116 of the Company’s Articles of Association,
and being eligible, offers himself for re-election.
d) Martin Oduor-Otieno retires by rotation in accordance with the
provisions of Article 117 of the Company’s Articles of Association,
and being eligible, offers himself for re-election.
e) John Ulanga retires by rotation in accordance with the provisions
of Article 117 of the Company’s Articles of Association, and being
eligible, offers himself for re-election.
4) In accordance with the provisions of Section 769 of the Companies
Act 2015, the following Directors being members of the Board
Audit & Risk Management Committee, be elected to continue
serving as members of the said Committee:
a) John Ulanga d) Leo Breen
b) Japheth Katto e) Ory Okolloh
c) Jimmy Mugerwa

90 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 NOTICE AND AGENDA OF THE 2021 ANNUAL GENERAL MEETING

NOTES: Following receipt of the questions and clarifications, the directors

1) In view of the ongoing Coronavirus 2019 pandemic (COVID-19) and of the Company shall provide written responses to the questions
the related Public Health Regulations and directives passed by the received to the return physical address or email address provided by
Government of Kenya precluding inter alia public gatherings, East the Shareholder no later than 12 hours before the start of the Annual
African Breweries Limited will hold the Ninety-Ninth Annual General General Meeting. A full list of all questions received, and the answers
Meeting (AGM) virtually, and in the manner prescribed in its Articles thereto will be published on the Company’s website not later than 12
of Association. hours before the start of the Annual General Meeting.
2) East African Breweries Limited has convened and is conducting this 7) In accordance with Section 298 (1) of the Companies Act, 2015
Annual General Meeting virtually, via electronic means, in line with the shareholders entitled to attend and vote at the AGM are entitled to
provisions of the Company’s Articles of Association. appoint a proxy to vote on their behalf.
3) Shareholders wishing to participate in the AGM should register by A proxy need not be a member of the Company. If the Proxy appointed
doing the following: - is not the Chairman of the AGM, the appointed proxy will need access
to a mobile telephone.
a) Dialing *483*812# for all Kenyan telephone networks, *284*34# for
Ugandan telephone networks, or *149*46*9# for Tanzania networks, A proxy form is available on the Company’s website via this link: www.
*801*30# for Rwanda networks and *120*6210*10# for South Africa eabl.com. Physical copies of the proxy form are also available at the
networks and following the various registration prompts; or Company Office Headquarters, situated at EABL Bustani Office, 5th
Floor, Garden City Business Park, Block A, Garden City Road, off Exit 7
b) Send an email request to be registered to [email protected]; or
Thika Superhighway, Ruaraka, Nairobi or from Image Registrars Limited
c) Shareholders with email addresses will receive a registration link via offices, 5th Floor Absa Towers (formerly Barclays Plaza), Loita Street.
email which they can use to register.
A proxy must be signed by the appointor or his attorney duly
In order to complete the registration process, shareholders will need authorized in writing. If the appointer is a body corporate, the
to have their ID/Passport Numbers which were used to purchase their instrument appointing the proxy shall be given under its common seal
shares and/or their CDSC Account Number at hand. For assistance, or under the hand of an officer or duly authorized attorney of such
shareholders should dial the following helpline number: (+254) body corporate.
709 170 041 from 8:00 a.m. to 5:00 p.m. from Monday to Friday. Any
A completed form of proxy should be emailed to [email protected]
shareholder outside Kenya should dial the helpline number to be
or delivered to Image
assisted to register or send their details to [email protected].
Registrars Limited, 5th Floor Absa Towers (formerly Barclays Plaza), Loita
4) Registration for the AGM opens on Wednesday, 18 August 2021 at 11:00
Street, P.O. Box 9287 – 00100 GPO, Nairobi, so as to be received not later
am East Africa Time (GMT+3) and will close on Sunday, 12 September
than 48 hours before the time of holding the meeting i.e. Sunday, 12
2021 at 11:00 am East Africa Time (GMT+3).
September, 2021 at 11:00 a.m. Any person appointed as a proxy should
5) In accordance with Section 180 of the Company’s Articles of Association, submit his/her mobile telephone number to the Company no later
the following documents may be viewed on the Company’s website than Sunday, 12 September 2021 at 11:00 a.m. Any proxy registration
www.eabl.com that is rejected will be communicated to the shareholder concerned
(i) a copy of this Notice and the proxy form; no later than Sunday, 12 September 2021 to allow time to address any
(ii) the Company’s Audited Financial Statements for the year ended 30th issues.
June 2021. 8) The AGM will be streamed live via a link which shall be provided to all
The Condensed Audited Financial Statements for the year ended 30th shareholders who will have registered to participate in the general
June 2021 have been published with this Notice. meeting. Duly registered shareholders and proxies will receive a short
message service (SMS/USSD) prompt on their registered mobile
The reports may also be accessed upon request by dialing the USSD numbers, 24 hours prior to the AGM acting as a reminder of the AGM.
code above and selecting the Reports option. The reports and agenda A second SMS/USSD prompt shall be sent one hour ahead of the AGM,
can also be accessed on the livestream link. reminding duly registered shareholders and proxies that the AGM will
6) Shareholders wishing to raise any questions or clarifications regarding begin in an hour’s time and providing a link to the live stream.
the AGM may do so by: 9) Duly registered shareholders and proxies may follow the proceedings
a) Sending their written questions by email to [email protected]; or of the AGM using the live stream platform and may access the agenda.
b) Shareholders who will have registered to participate in the meeting Duly registered shareholders and proxies may vote when prompted
shall be able to ask questions via SMS by dialing the USSD code above by the Chairman.
and selecting the option (ask Question) on the prompts; or 10) A poll shall be conducted for all the resolutions put forward in the
c) Visiting www.eabl.com and accessing the 2021 AGM page where you notice.
can log a question directly on the webpage; and 11) Results of the poll shall be published within 48 hours following
d) In the event that the above is not possible, written questions should conclusion of the AGM, in two newspapers of national circulation and
be physically delivered with a return physical address or email address on the Company’s website.
to the registered office of the Company at EABL Bustani Office, 5th 12) Shareholders are encouraged to continuously monitor the Company’s
Floor, Garden City Business Park, Block A, Garden City Road, off Exit 7 website www.eabl.com for updates relating to the AGM. Please report
Thika Superhighway, Ruaraka, Nairobi. Kindly note that strict COVID-19 any challenges or issues that you may face to us immediately for quick
protocols will be observed at our offices, which includes the opening resolution using the email address [email protected] or our helpline
of physical letters after 48 hours of receipt. (+254) 709 170 000 from 8:00 a.m. to 5:00 p.m. from Monday to Friday.
Shareholders must provide their full details (full names, ID/Passport 13) The Company offices are open during normal business hours on any
Number/CDSC Account Number) when submitting their questions weekday (Saturday, Sunday and Kenya public holidays excluded), unless
and clarifications. closed for any other legal or legitimate reason. Unless stated otherwise,
Any questions and clarifications must reach the Company on or before all timings quoted in this notice are East Africa Time (GMT+3).
Sunday, 12 September 2021 at 11:00 am. Limited questions will be
responded to during the Annual General Meeting.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 91

 ILANI NA AJENDA YA MKUTANO MKUU WA KILA MWAKA

KWA WENYEHISA WOTE 5) Kupokea, kutathmini na iwapo itakubalika, kuidhinisha Ripoti ya

ILANI inatolewa hapa kwamba Mkutano Mkuu wa Kila Mwaka wa Malipo ya Wakurugenzi kwa mwaka uliomalizika 30 Juni 2021.
Tisini na Tisa wa East African Breweries Limited utafanyika kwa njia ya 6) Kuwateua tena PricewaterhouseCoopers (PwC) LLP kuwa Wakaguzi
mawasiliano ya kielektroniki mnamo Jumanne, 14 Septemba, 2021 saa wa Hesabu wa Kampuni kwa mujibu wa Kifungu 721(2) cha Sheria
11:00 a.m. (tano asubuhi) saa za Afrika Mashariki (GMT+3), kutekeleza za Kampuni , 2015 na kuwapa idhini Wakurugenzi wa Bodi kuamua
shughuli zifuatazo: - malipo yao kwa mwaka wa kifedha unaofuata.
7) Kutekeleza shughuli nyingine yoyote ile ambayo ilani yake itakuwa
SHUGHULI ZA KAWAIDA: imepokelewa ifaavyo.
1) Kupokea, kutathmini na iwapo itakubalika, kuidhinisha Ripoti ya Kila
Mwaka na Taarifa za Kifedha Zilizokaguliwa za mwaka uliokamilika SHUGHULI MAALUM
30 Juni 2021 pamoja na ripoti ya Wakurugenzi na Ripoti ya Mkaguzi 8. Kubadilishwa kwa jina la Kampuni
wa hesabu zilizomo kwenye ripoti hiyo.
Kujadili na iwapo itakubalika, kuidhinisha azimio lifuatalo kama Azimio
2) Mgawo wa faida Maalum, kama ilivyopendekezwa na Wakurugenzi: -
Kutambua kwamba Wakurugenzi hawapendekezi kulipwa kwa “Kwamba jina la Kampuni liwe na limebadilishwa kutoka kuwa “East
mgawo wowote wa mwisho wa faida kwa Mwaka wa Kifedha African Breweries Limited” na kuwa “East African Breweries plc” kwa
uliokamilika 30 Juni 2021. kufuata Kifungu 53 cha Sheria za Kampuni, 2015 na hili litatekelezwa
3) Kuchaguliwa kwa Wakurugenzi: kuanzia tarehe iliyoandikwa kwenye Cheti cha Kubadilishwa kwa Jina
a) Japheth Katto anastaafu kuambatana na Kifungu 2.5 cha Maadili kilichotolewa kuhusiana na hili na Msajili wa Kampuni”.
ya Utawala katika Mashirika Yaliyotoa Hisa na Hati za Dhamana
kwa Umma ya mwaka 2015. Ilani maalum inatolewa hapa kwamba
kuambatana na Kifungu 287 cha Sheria za Kampuni za Kenya za
KWA AGIZO LA BODI
mwaka 2015, kwamba ilani imepokelewa, kwa madhumuni ya
kupendekeza azimio lifuatalo kama Azimio la Kawaida katika
Mkutano Mkuu wa Kila Mwaka wa 2021:- KATHRYNE MAUNDU (BI)
‘Kwamba Japheth Katto aliyetimiza miaka 70, awe na hapa KATIBU WA KAMPUNI
anachaguliwa tena kuwa Mkurugenzi katika Kampuni.’
b) Ory Okolloh aliteuliwa wakati wa mwaka huo wa kifedha kujaza Tarehe: 17 Agosti 2021
nafasi iliyokuwa imetokea kwenye Bodi. Anastaafu kuambatana na
Kifungu 116 cha Sheria za Kuundwa kwa Kampuni, na, kwa kuwa
amehitimu, anajiwasilisha kuomba kuchaguliwa tena.
c) Dayalan Nayager aliteuliwa wakati wa mwaka huo wa kifedha kujaza
nafasi iliyokuwa imetokea kwenye Bodi. Anastaafu kuambatana na
Kifungu 116 cha Sheria za Kuundwa kwa Kampuni, na, kwa kuwa
amehitimu, anajiwasilisha kuomba kuchaguliwa tena.
d) Martin Oduor-Otieno anastaafu kwa mzunguko kuambatana na
Kifungu 117 cha Sheria za Kuundwa kwa Kampuni, na, kwa kuwa
amehitimu, anajiwasilisha kuomba kuchaguliwa tena.
e) John Ulanga anastaafu kwa mzunguko kuambatana na Kifungu 117
cha Sheria za Kuundwa kwa Kampuni, na, kwa kuwa amehitimu,
anajiwasilisha kuomba kuchaguliwa tena.

4) Kwa mujibu wa maelezo katika Kifungu 769 cha Sheria za Kampuni,

2015, Wakurugenzi wafuatao, ambao ni wanachama wa Kamati
ya Ukaguzi wa Hesabu & Usimamisi wa Hatari, wachaguliwe
kuendelea kuhudumu kama wanachama wa Kamati hiyo:
a) John Ulanga d) Leo Breen
b) Japheth Katto e) Ory Okolloh
c) Jimmy Mugerwa

92 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 ILANI NA AJENDA YA MKUTANO MKUU WA KILA MWAKA

MAELEZO: au kabla ya Jumapili, 12 Septemba, 2021 saa tano asubuhi (11.00 a.m.).
1) Kutokana na mlipuko unaoendelea wa Virusi vya Corona (COVID-19) Baadhi ya maswali yatajibiwa wakati wa Mkutano Mkuu wa Kila Mwaka.
na kanuni na maagizo ya Afya ya Umma ambayo yamepitishwa na Baada ya kupokelewa kwa maswali yote na maombi ya ufafanuzi,
Serikali ya Kenya ambapo miongoni mwa mengine mikusanyiko ya wakurugenzi wa Kampuni watatoa majibu ya maswali hayo kwa njia
watu imepigwa marufuku, haiwezekani, East African Breweries Limited ya maandishi na kuyatuma kwa anwani ya posta ya kupokea majibu
itaandaa Mkutano Mkuu wa Kila Mwaka (AGM) wa Tisini na Tisa kwa iliyoorodheshwa au barua pepe iliyoorodheshwa na Mwenyehisa si
njia ya mtandao, kwa namna ambavyo imeelezwa kwenye Sheria za chini ya saa 12 kabla ya kuanza kwa mkutano mkuu. Orodha kamili ya
Kuundwa kwa Kampuni. maswali yaliyopokelewa na majibu yaliyotolewa, itachapishwa katika
2) East African Breweries Limited imeitisha na itaandaa mkutano huu tovuti ya Kampuni si chini ya saa 12 kabla ya Mkutano Mkuu kuanza.
mkuu wa kila mwaka, kwa njia ya kielektroniki, kuambatana na Sheria za 7) Kuambatana na Kifungu 298 (1) cha Sheria za Kampuni, wenyehisa walio
Kuundwa kwa Kampuni. na haki ya kuhudhuria na kupiga kura katika AGM wana haki ya kuteua
3) Wenyehisa ambao wangependa kushiriki katika mkutano huu wa AGM wawakilishi wa kupiga kura kwa niaba yao.
wanafaa kujisajili kwa kufanya yafuatayo:- Mwakilishi huyo si lazima awe mwanchama wa Kampuni. Iwapo
a) Kupiga simu *483*812# kwa mitandao yote ya simu Kenya, *284*34# kwa Mwakilishi aliyeteuliwa si Mwenyekiti wa AGM, mwakilishi aliyeteuliwa
mitandao ya simu ya Uganda, au *149*46*9# kwa mitandao ya Tanzania, atahitaji kuwa na simu ya mkononi.
*801*30# kwa mitandao ya Rwanda na *120*6210*10# kwa mitandao ya Fomu ya uwakilishi inapatikana katika tovuti ya Kampuni kwa kufuata
Afrika Kusini na kufuata maelezo mbalimbali ya usajili yatakayotolewa; au kiunganisho hiki cha mtandaoni: www.eabl.com. Nakala za karatasi
b) Kutuma ombi la kusajiliwa kwa njia ya barua pepe kwa eabl.agm@eabl. za fomu za uwakilishi pia zinapatikana katika afisi za Kampuni katika
com; au EABL Bustani Office, Ghorofa ya 5, Garden City Business Park, Jumba A,
c) Wenyehisa waliowasilisha anwani za barua pepe watapokea kiunganisho Barabara ya Garden City, ukitumia Exit 7 katika Barabara Kuu ya Thika,
au link cha kujisajili kupitia barua pepe ambacho wanaweza kukitumia Ruaraka, Nairobi au kutoka kwa afisi za Image Registrars, Ghorofa ya 5,
kujisajili. jumba la Absa Towers (zamani ikiitwa Barclays Plaza), Loita Street.
Ili kukamilisha shughuli hiyo ya kujisajili, wenyehisa watahitajika kuwa na Fomu ya uwakilishi inafaa kutiwa saini na mwenyehisa anayefanya
nambari ya kitambulisho/pasipoti waliyoitumia kununua hisa zao na/au uteuzi au wakili aliyeidhinishwa na mwenyehisa kwa njia ya maandishi.
nambari ya akaunti ya CDSC. Kwa usaidizi, wenyehisa wanafaa kupiga Iwapo anayeteua mwakilishi ni kampuni au shirika, fomu ya uteuzi inafaa
nambari hii ya simu ya msaada: (+254) 709 170 041 kati ya saa mbili kupigwa mhuri rasmi wa kampuni au kuidhinishwa na afisa au wakili
asubuhi (8:00 a.m.) na saa kumi na moja jioni (5:00 p.m.) kuanzia Jumatatu aliyeidhinishwa kuiwakilisha kampuni au shirika hilo.
hadi Ijumaa. Mwenyehisa yeyote aliye nje ya Kenya anafaa kupiga simu Fomu ya uwakilishi iliyojazwa inafaa kutumwa kwa njia ya barua pepe
hiyo ya msaada ili kusaidiwa kujiandikisha au atume maelezo kwa eabl. kwa [email protected] au ifikishwe kwa Image Registrars, Ghorofa ya
[email protected]. 5, jumba la Absa Towers (zamani ikiitwa Barclays Plaza), Loita Street, S.L.P.
4) Shughuli ya kujisajili kwa ajili ya AGM itaanza mnamo Jumatano, 18 Agosti 9287-00100 GPO, na ifike si chini ya saa 48 kabla ya wakati wa kufanyika
2021 saa tano asubuhi (11:00 a.m.) saa za Afrika Mashariki (GMT+3) na kwa mkutano, sawa na kusema si baada ya Jumapili, 12 Septemba, 2021
kufungwa Jumapili tarehe 12 Septemba, 2021 saa tano asubuhi (11:00 saa tano asubuhi (11:00 a.m.). Mtu yeyote aliyeteuliwa kuwa mwakilishi
a.m.) saa za Afrika Mashariki (GMT+3). anafaa kutuma nambari yake ya simu ya mkononi kwa Kampuni kabla ya
5) Kuambatana na Kifungu 180 cha Sheria za Kampuni, stakabadhi zifuatazo Jumapili, 12 Septemba, 2021 saa tano asubuhi (11:00 a.m.) Mwenyehisa
zinaweza kutazamwa kwenye tovuti ya Kampuni katika www.eabl.com ambaye usajili wa mwakilishi wake utakataliwa atafahamishwa kabla ya
Jumapili 12 Septemba 2021 kumpa muda wa kushughulikia masuala
(i) nakala ya Ilani hii na fomu ya uwakilishi;
yatakayoibuka.
(ii) (ii) taarifa za kifedha za Kampuni zilizokaguliwa za mwaka uliokamilika 30
Juni 2021. 8) Matukio ya AGM yatapeperushwa moja kwa moja kupitia kiunganisho
(link) ambacho kitatumwa kwa wenyehisa wote watakaokuwa
Nakala ya ufupisho wa Taarifa za Kifedha za mwaka uliomalizika 30 Juli wamejiandikisha kushiriki katika AGM. Wenyehisa na wawakilishi
2021 imechapishwa pamoja na Ilani hii. waliojiandikisha watapokea ujumbe mfupi (SMS/USSD) kwenye namba
Ripoti hizi zinaweza pia kupatikana kwa kupiga simu nambari ya USSD zao za simu zilizosajiliwa, saa 24 kabla ya AGM kufanyika kuwakumbusha
iliyotolewa hapa juu na kuchagua kiungo cha ripoti. Ripoti na ajenda kuhusu AGM. SMS/USSD ya pili itatumwa saa moja kabla ya AGM
zinaweza pia kupatikana kwenye kiunganisho cha kupeperusha kufanyika, kuwakumbusha wenyehisa waliojisajili na wawakilishi
mkutano moja kwa moja. kwamba AGM itaanza katika muda wa saa moja na ujumbe huo pia
6) Wenyehisa wenye nia ya kuuliza maswali au ufafanuzi kuhusu AGM hii utakuwa na kiunganisho cha kufuatilia matukio moja kwa moja.
wanaweza kufanya hivyo kwa: 9) Wenyehisa na wawakilishi waliosajiliwa wanaweza kufuatilia matukio
a) Kutuma maswali yao kwa maandishi kama barua pepe kwa eabl.agm@ ya AGM wakitumia kiunganisho cha matangazo ya moja kwa moja na
eabl.com; au wanaweza kupata pia ajenda. Wenyehisa na wawakilishi waliosajiliwa
b) Wenyehisa ambao watakuwa wamejiandikisha kuhudhuria mkutano wanaweza kupiga kura (wakiombwa kufanya hivyo na Mwenyekiti) kwa
huu wataweza kuuliza maswali kupitia SMS kwa kupiga nambari ya kutumia huduma ya USSD.
ujumbe (USSD) iliyoorodheshwa hapa juu na kuchagua sehemu ya (uliza 10) Kura itapigwa kwa maazimio yote ambayo yameorodheshwa kwenye
Swali) kwenye yale yatakayojitokeza; au ilani.
c) Kutembelea www.eabl.com na kufika kwenye ukurasa wa 2021 AGM 11) Matokeo ya kura yatachapishwa katika kipindi cha saa 48 baada ya
ambapo unaweza kutuma swali moja kwa moja kupitia ukurasa huo wa kumalizika kwa AGM, katika magazeti mawili yanayosambazwa kitaifa na
mtandao; na katika tovuti ya Kampuni.
d) Iwapo hayo hayatawezekana, kuwasilisha maswali hayo yakiwa kwa njia 12) Wenyehisa wanahimizwa kufuatilia tovuti ya Kampuni www.eabl.
ya maandishi na yakiwa na anwani au barua pepe ya kupokelewa majibu com mara kwa mara kwa taarifa na maelezo kuhusiana na AGM.
kwa afisi zilizosajiliwa za Kampuni katika EABL Bustani Office, Ghorofa ya Tafadhali tujulishe kuhusu matatizo au changamoto zozote unazoweza
5, Garden City Business Park, Jumba A, Barabara ya Garden City, ukitumia kukumbana nazo kwa utatuzi wa haraka kwa barua pepe eabl.agm@
Exit 7 katika Barabara Kuu ya Thika, Ruaraka, Nairobi. Tafadhali, fahamu eabl.com au kwa kutumia nambari yetu ya simu ya msaada ambayo ni
kuwa masharti ya kuzuia COVID-19 yatafuatwa kikamilifu katika afisi (+254) 709 170 000 kati ya saa mbili asubuhi (8:00 a.m.) na kumi na moja
zetu, ambapo ni pamoja na barua kufunguliwa tu saa 48 baada ya jioni (3:00 p.m.) Jumatatu hadi Ijumaa.
kupokelewa.
13) Afisi za Kampuni huwa zimefunguliwa wakati wa saa za kawaida za
Wenyehisa ni sharti waandike maelezo kamili kuwahusu (majina kamili, kuendesha shughuli kila siku ya wiki (isipokuwa Jumamosi, Jumapili na
Nambari ya Kitambulisho/Nambari ya Pasipoti/Nambari ya Akaunti ya siku za mapumziko Kenya) isipokuwa tu ziwe zimefungwa kwa sababu
CDSC) wanapowasilisha maswali yao au maombi ya ufafanuzi. nyingine za kisheria au halali. Isipokuwa kama imeelezwa vinginevyo, saa
Maswali yote na maombi ya ufafanuzi yanafaa kuifikia Kampuni mnamo zote zilizorejelewa kwenye fomu hii ni za Afrika Mashariki (GMT+3)

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 93

Statement of Corporate Governance

Overview
Corporate Governance underpins the process and structure used to direct and manage the business and affairs of the Company towards
enhancing business prosperity and corporate accountability with the ultimate objective of realizing long term shareholder value, whilst taking
into account the interests of other stakeholders. East African Breweries Limited (EABL) is committed to the highest standards of Corporate
Governance and Business Ethics. The Company has instituted systems to ensure that high standards of corporate governance are maintained
at all levels of the organization and is in compliance with the Capital Markets Authority Code of Corporate Governance Practices for Issuers of
Securities to the Public (the CMA Code) as well as the equivalent guidelines for listed companies in Tanzania and Uganda.
Besides complying with the CMA Code, the Company has committed to embedding internal rules of engagement to support corporate
governance. These internal guidelines are constituted in the Code of Business Conduct (CoBC) to which every Director and employee makes a
commitment to comply. The CoBC is aligned to globally accepted standards and meets the requirements of local laws as well as internationally
applicable laws and regulations. It guides activities in dealing with employees, customers, suppliers, competitors, government and the
community at large. The CoBC also articulates the Company’s policy on insider trading. Directors, management, staff members and related
parties are instructed during closed periods, not to trade in their shares while in possession of any insider information not available to the public.
Governance Principles
Among the principles that the Board subscribes to in upholding the Group’s Corporate Governance practices include but are not limited to:-
1. Discipline: the commitment by the Group’s Senior Management to adhere to behavior that is universally recognized and accepted to be
correct and prudent.
2. Transparency and Disclosure: the ease with which an outsider is able to access information relating to the Group and to make meaningful
analysis of the Group’s actions, its economic details and the non-financial aspects pertinent to the business.
3. Independence: the extent to which mechanisms have been put in place to minimize or avoid potential conflicts of interest that may exist,
such as dominance by a strong chief executive or large shareholder.
4. Accountability: Individuals or groups in the Group, who make decisions and take actions on specific issues, need to be accountable for their
decisions and actions.
5. Adherence to laws and regulations: with regard to management, this pertains to compliance with applicable laws and regulations
and implementing standards of relevant best practice. Behaviour must allow for corrective action and for penalizing non-adherence or
mismanagement. Responsible management would, when necessary, put in place what it would take to set the Group on the right path.
While the Board is accountable to the Group’s shareholders, it must act responsively to and with responsibility towards all stakeholders of the
Group.
6. Fairness: the systems that exist within the Company must be impartial in taking into account all those that have an interest in the Company
and its future. The rights of various groups have to be acknowledged and respected, and the Company must continually focus on stakeholder
value free of favouritism.
7. Social responsibility: a well-managed Company will be aware of, and respond to, social issues while placing a high priority on ethical
standards.

OUR CORPORATE GOVERNANCE FRAMEWORK

EABL is committed to implementing and adhering to good corporate governance and best practice. We have put in place a corporate governance
structure which assists to attain the following objectives:
• Organize operational, financial, risk management, and reporting processes such that the Board receives the information it requires to effect
good governance and management and the business units can conduct their activities in ways that comply with regulations and serve
strategic ends.
• Bring the organization’s governance framework down to the level of roles, responsibilities, reporting lines, and communications to bridge the
gap between the governance framework and operational realities.
• Sustain governance by creating a feedback loop in which the Board and management can identify and respond to new business, operational,
competitive, and regulatory needs.

East African Breweries Limited (EABL) is committed

to the highest standards of Corporate Governance
and Business Ethics.

94 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Corporate Governance Statement Statement of Corporate Governance

Our governance framework is highlighted

in the table below:

EABL CORPORATE
GOVERNANCE FRAMEWORK

STRUCTURE
This includes organization design and reporting structure, committee structures and
charters, and control and support function interdependencies

Committee structure
Board of Directors
and Charters

OVERSIGHT RESPONSIBILITIES

Board Oversight and Management Accountability Committee(s) Responsibilities

Responsibilities and Authority and Responsibilities

TALENT AND CULTURE

-
pensation policies (particularly regarding incentives), promotion policies, business and
operating principles, performance measurement and management, training, and leadership
and talent development programs

Performance Business and Leadership

Management and Operating Principles Development and
Incentives Talent Programs

INFRASTRUCTURE
Comprises governance and risk oversight policies and procedures, reports, measures and
metrics, and management capabilities, and the enabling IT and communications support

Policies and Reporting and Technology

Procedures Communication

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 95

Statement of Corporate Governance

THE BOARD OF DIRECTORS

The Board is committed to ensuring that a strong governance framework operates throughout the Group, recognising that good corporate
governance is a vital component to support management in their delivery of the Company’s strategic objectives, and to operate a sustainable
business for the benefit of all stakeholders. The Board recognises that the process of identifying, developing and maintaining high standards of
corporate governance suitable for the Company is ongoing and dynamic to reflect changes in the Company and its business, the composition
of the Board and developments in corporate governance.
The role and functioning of the Board
The Board is comprised of six Independent Non-Executive Directors, three Non-Executive Director and two Executive Directors. The Directors
have a balance and depth of skills and experience, together with long-standing knowledge of the Group, which enables them to discharge their
respective duties and responsibilities effectively
The Board is collectively accountable to the Company’s shareholders for the long-term success of the Company and for its overall strategic
direction, its values and governance. It provides the leadership necessary for the organization to meet its business objectives within the
framework of its internal controls, while also discharging the Company’s obligations to its shareholders. Responsibility for implementing strategy
and day-to-day operations has been delegated by the Board to the Group Managing Director and the Company’s executive team.
There is a formal schedule of matters reserved for consideration by the Board, which include responsibility for the following:
• approval of overall Group strategy and objectives
• approval of the Group annual budget and monitoring progress towards its achievement
• changes to the Group’s capital structure
• changes to the Group’s principal activities
• review and approval of the annual financial statements
• changes to the senior management structure
• approval of Group financing arrangements and treasury policy
• approval of major investments, disposals and additional investments in existing operations
• Approval of major unbudgeted expenditure
These reserved matters are reviewed by the Board, at least annually, to ensure they remain appropriate and complete. In tandem, the Board also
reviews an approved schedule of operational matters, which are delegated to management of the operating subsidiaries.
Division of Responsibilities
The Chairman and the Group Managing Director’s roles are separate, with each having distinct and clearly defined duties and responsibilities.
The Chairman is responsible for leadership of the Board, for ensuring its effectiveness on all aspects of its role and for facilitating productive
contribution of all Directors. The separation of the functions of the Chairman (an Independent Non-Executive director) and the Group Managing
Director (Executive director) supports and ensures the independence of the Board and Management. The balance of power, increased
accountability, clear definition of responsibilities and improved decision-making are attained through a clear distinction between the non-
executive and executive roles.
The Chairman serves as the link between the Board and management in between meetings and is responsible for ensuring that decisions of the
Board are implemented. He is also responsible for ensuring that the interests of the Company’s shareholders are safeguarded and that there is
effective communication with them.
The Group Managing Director has overall responsibility for the performance of the business and provides leadership to facilitate successful
planning and execution of the objectives and strategies agreed by the Board.
Non-Executive Directors
The Board had nine Non-Executive Directors, collectively made up of six Independent Non- Executive Directors and three Non-Executive
Directors as at the end of the financial year.
The Non-Executive Directors help develop strategy and are responsible for ensuring that the business strategies proposed are fully discussed
and critically reviewed. This enables the directors to promote the success of the Company for the benefit of its shareholders, with consideration
of, among other matters, the interests of employees, the fostering of business relationships with customers, suppliers and other stakeholders. The
Non-Executive Directors oversee the operational performance of the business, scrutinise performance of Management and the Company, bring
an external perspective to the Board, monitor reporting of performance and should be available to meet with major stakeholders as appropriate.
To perform these tasks, they have full access to all relevant information, with updates provided on governance, regulatory and other matters
affecting the company.
The Non-Executive Directors come from broad industry and professional backgrounds, with varied experience and expertise aligned to the
needs of the business. The Chairman and five of the Non-Executive Directors, as at the date of this Report, are independent as defined by the
CMA Code and accordingly over half of the Board is constituted of Independent Non-Executive Directors.
On joining the Board, all Directors receive a full induction. Non-Executive Directors also receive a full programme of briefings on all areas of the
Company’s business from Executive Directors, the Company Secretary and other senior executives.

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Corporate Governance Statement Statement of Corporate Governance

Board Membership and Committees

The constitution of the Company’s Board is stipulated by the Company’s Articles of Association. It currently comprises of eleven Directors, of
whom nine are Non-Executive Directors and two are Executive Directors.
The Board carries out its obligations through Board Committees. During the year, there were three standing committees and one ad hoc
committee of the Board. The standing committees were the Board Corporate Governance Committee, the Board Audit and Risk Management
Committee and the Board Nominations & Remuneration Committee. The Board Investment Committee is an ad hoc Committee. The Committees
are all chaired by Independent Non-Executive Directors who also form the majority of the Committee’s membership.
The Board is currently comprised of six Independent Non-Executive Directors, three Non-Executive Directors and two Executive Directors. The
profile of the Board is as set out on pages 84 to 87.

Board of Directors
Dr. M. Oduor-Otieno* – Group Chairman
Mr. J. O’Keeffe ** - Group Vice Chairman
Mr. A. Cowan*** (Former Group Managing Director) – Resigned as GMD and CEO on 31 December 2020 and as a Director on 1 March 2021
Mrs. J. Karuku*** (Group Managing Director and CEO) – Appointed GMD and CEO on 1 January 2021
Mr. J. Katto*
Ms. C. Musyoka*
Mr. J. Mugerwa*
Mr. J Ulanga *
Mr. L. Breen**
Ms. Risper Ohaga***
Ms. Ory Okolloh* – Appointed on 16 October 2020
Mr. Dayalan Nayager ** - Appointed on 1 March 2021

Company Secretary
Ms. Kathryne Maundu

*Independent Non-Executive Director

** Non-Executive Director
*** Executive Directors

Board Corporate Governance The Board Audit and Risk Board Nominations & Remu- Board Investment Committee
Committee Management Committee neration Committee – Ad Hoc Committee

Mr. J. Katto – Chairman Mr. J. Ulanga – Chairman Ms. C. Musyoka - Chairperson Ms. C. Musyoka - Chairperson
Ms. C. Musyoka Mr. J. Katto Dr. M. Oduor-Otieno Mr. J. Katto
Mr. J. Ulanga Mr. J. Mugerwa Mr. J Mugerwa Ms. R. Ohaga
Ms. K. Maundu (Secretary) Mr. L. Breen Mr. J. O’Keeffe Ms. O. Okolloh
Ms. O. Okolloh Ms. K. Maundu (Secretary) Ms. K. Maundu (Secretary)
Ms. K. Maundu (Secretary)

The Board provided overall oversight of the Group. Amongst the key activities during the financial year were:
• Review of the strategy and the F21 Key performance indicators and Annual Operating Plan.
• Oversight of the Group and Subsidiaries performance as well as Committee performance.
• Review of significant tax matters and projects.
• Detailed discussion on the Group Capital structure.
• Issuing a corporate bond.
• Approval of the half year and full year financial results for FY 2021.
• Continued impact of COVID-19 to the business and response strategy.

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Statement of Corporate Governance

Attendance at Board and Annual General Meetings during the Financial Year

16.09.2020 04.03.2021 17.05.2021 25.05.2021

29.07.2020 16.09.2020 (AGM) 10.11.2020 28.01.2021 (Sp. Board) (Sp. Board)
Martin Oduor- √ √ √ √ √ √ √ √
Otieno
Carol Musyoka √ √ √ √ √ √ √ √
Jane Karuku √ √ √ √ √ √ √ √
Andrew Cowan1 √ √ √ √ √ - - -
John O’Keeffe √ √ √ √ √ √ √ √
Leo Breen √ √ √ √ √ √ √ √
John Ulanga √ √ √ √ √ √ √ √
Japheth Katto √ √ √ √ √ √ √ √
Jimmy Mugerwa √ √ √ √ √ √ √ √
Risper Ohaga √ √ √ √ √ √ √ √
Ory Okolloh 2
- - - - √ √ √ √
Dayalan Nayager 3
- - - - - √ √ √

1. Andrew Cowan resigned as a director with effect from 1 March 2021

2. Ory Okolloh was appointed as a director with effect from 16 October 2020.
3. Dayalan Nayager was appointed as a director with effect from 1 March 2021.
Board Corporate Governance Committee
The Board Corporate Governance Committee has oversight over the adherence and compliance by the Company to the principles and
requirements of good corporate governance and business ethics. The Committee is also responsible for ensuring an annual Board evaluation is
conducted for evaluating the performance of the Board, Board Committees, Individual Directors, Group Managing Director and the Company
Secretary. All members of the Committee are Independent Non-Executive Directors.
The Committee monitored implementation of the requirements of the CMA Code and in that regard continued to monitor the independence
of directors; to monitor the directors’ interest in other entities and mitigation measures thereof; review of the Board Charter and the terms of
reference of the various committees. The Committee also reviewed the compliance report to CMA, detailing the measures taken to ensure
compliance with the CMA Code and continued to track the progress made in implementing recommendations from the Board Evaluation
exercise and Legal and Compliance Audit conducted in FY19.
In carrying out its mandate to continuously enhance and entrench effective corporate governance within EABL, the Committee includes in its
annual work plan a corporate governance training session for all Directors.
Attendance at Board Corporate Governance Committee meetings during the Financial Year

28.07.2020 14.10.2020 25.01.2021 19.04.2021

Japheth Katto √ √ √ √
Carol Musyoka √ √ √ √
John Ulanga √ √ √ √

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Corporate Governance Statement Statement of Corporate Governance

Board Audit and Risk Management Committee

The Board Audit and Risk Management Committee (BARC) is responsible for monitoring and reviewing the integrity of the financial statements,
the effectiveness of the accounting, internal control and business risk management systems of the Group, and the efficiency of the Group’s
procedures for handling complaints and whistle blowing allegations. The Mandate of the Committee also includes:
• Reviewing the integrity of the Group’s financial statements.
• Compliance with legal and regulatory requirements.
• Monitoring and reviewing the performance of the Group’s external auditors including their independence and objectivity, making
recommendations as to their reappointments (or where appropriate, change) and approving their terms of engagement and the level of
audit fees payable to them.
• Review of business operations policies.
• Overseeing the internal control and risk management systems in relation to the Company’s financial reporting process and the Group’s
process for preparation of the consolidated financial statements.
During the year, the BARC met five times and reviewed the following business:
• Annual report and associated preliminary year end results announcement, focusing on key areas of accounting judgement and complexity,
accounting and provisioning policies.
• The external audit strategy and the findings of the external auditor from its review of the interim results and hard close as at 30 April 2021 and
the audit of the year-end consolidated financial statements.
• Interim results announcement, which included the condensed financial statements and Company’s management results.
• Business integrity which covered risk management, controls and assurance, breach management and health, safety and environment.
Upon completion of the consolidated financial statements, the BARC reviewed the following:
• The consolidated financial statements for the year ended 30 June 2021, together with the accounting policies, disclosures and other
explanatory information and based on the information provided to it, the Committee satisfied itself that in all material respects, the financial
statements complied with the Companies Act, 2015 and the International Financial Reporting Standards (IFRS).
• Considered the appropriateness of management judgment and the accounting treatment of significant transactions.
In addition, the Committee reviewed various detailed reports from:
• The Control, Compliance and Ethics team (CCE) and the Global Audit and Risk (GAR) team.
• The annual GAR audit plan and the assessment of top risks identified by GAR as driving the plan and scope of audits for the year ended 30
June 2021.
• Legal and Regulatory updates from the Legal Director.
The BARC reviews annually the appointment of the auditors taking into account the auditors’ effectiveness and independence and all
appropriate guidelines and makes a recommendation to the Board accordingly. The Group has a policy on auditor independence and on the
use of the external auditors for non-audit services which is reviewed annually. Any decision to open the external audit to tender is taken on the
recommendation of the BARC. There are no contractual obligations that restrict the Company’s current choice of external auditor.
PricewaterhouseCoopers (PwC) were the Group’s auditors during the financial year. They have since issued a written confirmation to the Board
of their intention to seek re-appointment as the Company’s auditors at the Annual General Meeting, subject to approval by the Shareholders.
During the year, the committee comprised of four Independent Non-Executive Directors and one Non-Executive Director.
Attendance at Board Audit and Risk Management Committee meetings during the Financial Year

27.07.2020 14.10.2020 25.01.2021 20.04.2021 23.06.2021

John Ulanga √ √ √ √ √
Japheth Katto √ √ √ √ √
Jimmy Mugerwa √ √ √ √ √
Leo Breen √ √ √ √ √
Ory Okolloh1 - - √ √ √

1. Ory Okolloh was appointed as a member of the Committee with effect from 30 November 2020.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 99

Statement of Corporate Governance

Board Nominations and Remuneration Committee

The Board Nominations and Remuneration Committee (BNRC) is responsible for key business processes as listed below:
• Identifying and nominating for the approval of the Board, and EABL Subsidiary Boards candidates to fill Board vacancies as and when they
arise.
• Approving key policies and principles driving remuneration decisions for management and non-management employees.
• Identifying and recommending for approval of the Board, remuneration proposals for executive and independent Directors of the Board.
The mandate of the Committee is executed through the processes indicated below:
• Succession planning and external talent pipelining for potential vacancies within the Board. This is done through nomination, selection and
vetting from a pool of suitable candidates to fill vacancies that may arise from the Board and Board Committees.
• Assessing and recommending to the Board, the remuneration of management and non-executive Directors including approval of staff
incentive schemes, pension plans, and other remuneration related terms and conditions of employment.
The Committee had three meetings during the year and dealt with the following business:
• Assessment of the effectiveness and adequacy of the Board succession pipeline and succession plans, with particular consideration for actual
and potential vacancies in the longer term horizon.
• Board changes which occurred during the year.
• Review of the Remuneration policy.
• Review of senior management talent and succession review.
• Review and adoption of changes to reward pay principles, management pay structures, pension plans and other cash and non-cash benefits
pursuant to the talent strategy.
• Review and approval of benefits associated with long term incentive plans related to the Employee Share Ownership Plan (ESOP) including
the relevant Governance Framework and structures.
In the year ended June 2021, following the COVID-19 pandemic, the Committee continued to review policies and procedures on Employee
Health and wellbeing in a COVID-19 environment.
Attendance at Board Nominations & Remuneration Committee meetings during the Financial Year

23.07.2020 26.01.2021 19.04.2021

Carol Musyoka √ √ √
John O’Keeffe √ √ √
Martin Oduor-Otieno √ √ √
Jimmy Mugerwa √ √ √

100 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Corporate Governance Statement Statement of Corporate Governance

Board Investment Committee

The Board Investment Committee is responsible for reviewing and interrogating any investments or divestments that would have a significant
impact on the company’s balance sheet.
The mandate of the Committee includes:
• Ensuring new investments made by the company and its subsidiaries comply with the company strategy and with all applicable laws and
regulations.
• Ensuring the necessary due diligence is conducted before any investments or divestments are made by the company or its subsidiaries.
• Ensuring investments made by the company take into consideration all the stakeholders of the Company.
• During the year, the Committee had eight meetings during which, members reviewed new capital expenditure (capex) projects, and the
restructuring of funding proposals. The Committee also discussed the capital structure of the Company and the early redemption of the
medium term note.

Attendance at Board Investment Committee meetings during the Financial Year

17.07.2020 17.12.2020 25.01.2021 25.02.2021 22.03.2021 06.05.2021 13.05.2021 20.05.2021

Carol Musyoka √ √ √ √ √ √ √ √
Japheth Katto √ √ √ √ √ √ √ √
Risper Ohaga √ √ √ √ √ √ √ √
Ory Okolloh 1
- √ √ √ √ √ √ √
1. Ory Okolloh was appointed as a member of the Committee with effect from 30 November 2020.

Company Secretary
The Company secretary is a member in good standing with the Institute of Certified Secretaries (ICS). The Company Secretary provides a central
source of guidance and advice to the Board on matters of ethics, statutory compliance, compliance with the regulators and good governance.
Role of the Company Secretary
• Providing a central source of guidance and advice to the Board and the Company, on matters of statutory and regulatory compliance and
good governance.
• Providing the Board and the Directors individually with guidance on how their responsibilities should be discharged in the best interests of
the Company.
• Facilitating the induction training of new Directors and assisting with the Directors’ professional development as required. This includes
identifying and facilitating continuous Board education.
• In consultation with the CEO and the Chairman, ensuring effective flow of information within the Board and its committees and between
senior management and Non- Executive Directors. This includes timely compilation and distribution of Board papers and minutes, as well as
communication of resolutions from Board meetings.
• Guiding the company in taking the initiative to not only disclose corporate governance matters as required by law, but also information of
material importance to decision making by shareholders, customers and other stakeholders.
• Keeping formal records of Board discussions and following-up on the timely execution of agreed actions.

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Statement of Corporate Governance

Promotion of Corporate Culture

Internal Regulations
Besides complying with the Code and the laws, the Group has committed to embed internal rules of engagement to support corporate
governance. These internal guidelines are constituted in various policies and in the Code of Business Conduct to which every employee, supplier
and the Board makes a commitment to comply with.
Board Charter
The Board charter outlines the specific roles and responsibilities of the Board which are separate from those of management. The Charter covers
areas relating to Board structure, functions, processes, effectiveness and internal controls. The Charter has also embedded policies on Related
Party Transactions. The Charter is not a substitute or a replacement of any laws and regulations that govern the running of the Company.
The Board Charter is periodically reviewed to ensure that it remains current.
The Charter and Committee Charters have been published on the Company’s website.
Code of Conduct and Ethics
The Company pursues ethical decision making and leadership to promote corporate social responsibility, fair business practices, sustainability
and the triple bottom line that focuses on the society, the environment and profitability.
The Board has implemented a Code of Ethics and Conduct which binds Directors and Employees and is subscribed to by all members of the
Company. Initiatives to ensure its application include training, monitoring, mechanisms for whistle blowing, taking disciplinary action, etc. The
Code has been integrated into the Company’s operations through the development of various policies and reporting mechanisms.
Board policies
The Board has established policy and procedure documents to guide the Directors and management in the implementation of their roles and
responsibilities. A brief summary of the governance documents and their key provisions are listed below:

• Directors are obligated to fully disclose to the Board any real or potential conflict of interest which come to their attention, whether direct or
Conflict of interest policy indirect.
• All business transactions with all parties, directors or their related parties are carried out at arm’s length.

• The policy outlines mechanisms that facilitate anonymous reporting and anti ethical behaviour by all stakeholders.
Whistle Blowing policy • The ethics hotline is managed by an independent, accredited and extenal institution.

• Directors are obligated to fully disclose to the Board any real or potential conflict of interest which come to their attention, whether direct or
Conflict of interest policy indirect.
• All business transactions with all parties, directors or their related parties are carried out at arm’s length.

The policy is used to institute structures to prevent insider dealings by Directors and Management. Through this, the Company endeavors to preserve
Insider Trading policy
the confidentiality of unpublished sensitive information and prevent misuse of such information.

Anti Bribery Policy and Anti fraud • This policy prevents employees and agents from giving or receiving bribes (directly or indirectly) and attempts to induce favours by way of bribes.
and Corruption • We review compliance with regulatory obligations, particularly those surrounding fraud, corruption and Anti Money Laundering.

Board Remuneration Policy This policy sets out the guidelines and criteria for the Board’s compensation.

Operational policies There are broad operational policies that guide Management in execution of the Group’s operations in an efficient manner.

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Corporate Governance Statement Statement of Corporate Governance

Independence of Directors
The Board recognises the importance of independent judgement and constructive engagement on all matters brought before the Board for
deliberation. Directors views should have regard to the best interest of the organization and its stakeholders.
In accordance with the CMA Code, the Board undertakes an annual assessment of Director’s independence based on the independence criteria
outlined in the CMA Code.
Management of Conflicts of Interest
The Directors are obligated to fully disclose to the board any real or potential conflict of interest, which comes to any director’s attention,
whether direct or indirect. The statutory duty to avoid situations in which the directors have or may have interests that conflict with those of
the Company has been observed by the Board in the financial year under review. All business transactions with all parties, directors or their
related parties are carried out at arm’s length. An acknowledgement that should it come to the attention of a director that a matter concerning
the Company may result in a conflict of interest, obligates the director to declare the same and exclude himself / herself from any discussion or
decision over the matter in question.
The Board has formal procedures for managing conflicts of interest in accordance with the Companies Act 2015 and the CMA Code of Corporate
Governance Practices for Issuers of Securities to the Public. Directors are required to give advance notice of any conflict issues to the Chairman
or Company Secretary and these are considered at the next Board meeting.
Declaration of conflicts of interest is also a standard agenda item which is addressed at the onset of each Board and Committee meeting.
Directors are excluded from the quorum and vote in respect of any matters in which they have an interest. No material conflicts were reported
by Directors in the year under review.
The Board also requires all Directors to disclose on appointment, annually and at the beginning of each Board and Board Committee meeting,
any circumstance which may give rise to an actual or potential conflict of interest with their roles as Directors.
Board Performance
Directors Training and Development
The Board is committed to on-going training and development of its Directors and towards that goal, appropriate training interventions were
identified during the year for attendance by Directors. To enable the Non-Executive Director’s gain exposure to the Group’s business on the
ground, one of the four scheduled Board meetings is held in the end markets, where Directors get an opportunity to undertake various trade
visits, engage the sales team and outlet owners on market related issues. Despite the travel restrictions due to the COVID-19 pandemic, in May
2021 the Board had an opportunity to virtually undertake a deep dive on the Tanzania subsidiary, and engaged with the management team
in Serengeti Breweries Limited to gain deeper insights on the market. The Board and its Committees also receive regular briefings on legal and
regulatory developments that affect the business.
The Chairman and the Non-Executive Directors have a particular responsibility for ensuring that the organization’s strategy, the key enablers and
business operations are fully discussed and critically reviewed. This enables the Board to promote the success of the Company for the benefit
of all its stakeholders as a whole. In so doing, the Board has regard to matters such as the interests of the Company’s employees, the fostering
of business relationships with customers, suppliers and other stakeholders and the impact that the Company has on the environment and
communities in which it operates.
Non-Executive Directors do not have service contracts with the Company but instead have letters of appointment which stipulate the terms of
their appointment.
Board Evaluation
The effectiveness of the Board, its Committees, the Executive and Non-Executive Directors, the Chairman, and the Company Secretary is reviewed
annually. The Board evaluation for the year under review, was an internally facilitated process that was managed by the Company Secretary. The
evaluation was aimed at assessing how the Board had performed in its oversight role over the period under review and to identify opportunities
for improvement in its structures and processes in order to improve its effectiveness. The questionnaire was designed to gather some basic
information and was intended to enable each director to express their views on the topics set out in the questionnaire in the following areas:
• Board composition, membership and appointment processes
• Board administration, meetings, agendas and provision of information
• Board, committee and directors’ effectiveness and performance
• Crisis Management - COVID -19 pandemic; and
• Culture, values and purpose.
The Board obtained a very good rating on all areas of assessment. The overall results revealed that the Board continued to operate effectively.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 103

Statement of Corporate Governance

Governance Audit
In compliance with the CMA Code of Corporate Governance Practices for Issuers of Securities to the Public, 2015, the Board appointed Ms.
Catherine Musakali of Dorion Associates LLP to conduct the Company’s Governance Audit for the year ended 30 June 2021. As at the date of
this Annual report, the audit was ongoing.
Engagement with shareholders
The Board seeks to engage with shareholders to maintain a mutual understanding of objectives between them and the Company and manage
their expectations. Relations with shareholders and potential investors are managed principally by the Executive Directors, who are contactable
both directly and via the Shares Registrar.  Shareholders are encouraged to participate in the Company’s Annual General Meetings and contact
the Company’s officers with any questions.  The Board, including the Chairs of the Committees, are available at the Company’s AGMs to answer
questions from shareholders.  The Executive Directors make regular presentations to investors (both existing and potential shareholders), meet
with shareholders to discuss long-term issues and obtain their views, present at externally run investor events and communicate regularly
during the year.  The annual and interim presentations made to investors, interviews with the Executive Directors and a description of the
Company’s investment case are all made available on the Company’s website.  
The Company also retains an external Shares Registrar who provides feedback from existing shareholders and potential investors.  
Communication with Stakeholders
East African Breweries Limited is committed to ensuring that there is regular interaction and communication with its stakeholders who include
shareholders, investors and the financial markets among others. The Board has mapped all its stakeholders and ensures that they are provided
with full and timely information about the company’s performance. This is achieved through the release of the half-year and annual results in
the local press, distribution of annual reports and holding of investor briefings as appropriate. The Annual General Meeting provides a useful
opportunity for shareholder engagement and in particular, for the Chairman to articulate the Company’s progress, receive and answer questions
from investors. The Board believes that there is an active and regular interaction with all its stakeholders. In addition to information on the
Company’s activities the following documents and policies are readily available to stakeholders on the Company’s website:
1. The Board Charter;
2. Board Committees Terms of Reference;
3. The Board Diversity Policy;
4. Conflict and Dispute Resolution Policy;
5. Past and current copies of the Annual Reports;
6. Investor News;
7. Share Price performance – Kenya, Uganda and Tanzania.

104 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Corporate Governance Statement Statement of Corporate Governance

​Stakeholders and social responsibilities

The Group’s business model relies heavily on developing and maintaining strong relationships with staff, clients and regulatory authorities. The
Board is conscious of its responsibility towards all stakeholders and believes this is an important consideration for the long-term growth of the
business.  Stakeholder engagement and feedback is taken seriously throughout the Group. Regular communication is made around the Group
companies and internal staff. The Group places considerable value on the involvement of its internal staff and keeps them informed on matters
affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through formal and informal
meetings, information available on the Company’s website and Workplace.  The Group uses social media to engage directly with stakeholders
through various channels including Facebook, Twitter and LinkedIn. The Group also engages with regulators and Government agencies both
directly and through membership of worldwide trade associations.
Going Concern
The Board confirms the financial statements are prepared on a going concern basis and is satisfied that the Group has adequate resources to
continue in business for the foreseeable future. In making this assessment, the directors consider a wide range of information relating to present
and anticipated future conditions, including future projections of profitability, cash flows, capital and other resources.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 105

Financial Statements for the year ended 30 June 2021

106 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Financial Statements for the year ended 30 June 2021

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 107

108 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS
 Annual Report
and Financial
Statements

Corporate information 110

Directors’ report 113
Directors’ remuneration report 118
Statement of Directors’ responsibilities 124
Report of the independent auditor 125
Table of contents

Financial statements:
Consolidated statement of profit or loss 129
Consolidated statement of comprehensive income 130
Company statement of profit or loss 131
Consolidated statement of financial position 132
Company statement of financial position 133
Consolidated statement of changes in equity 134
Company statement of changes in equity 136
Consolidated statement on cash flows 137
Company statement of cash flows 138
Notes 137-196
Principal Shareholders and Share Distribution 197
Proxy Form 198
Electronic Communications Consent Form 199

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 109

Annual Report for the year ended 30 June 2021

CORPORATE INFORMATION
DIRECTORS
Dr. M Oduor-Otieno Group Chairman
Mrs. J Karuku Group Managing Director – Appointed on 1 January 2021
Mrs. R G Ohaga Group Chief Financial Officer
Mr. J O’Keeffe**
Mr. L Breen*
Ms. C Musyoka
Mr. J Ulanga****
Mr. J Katto***
Mr. J Mugerwa***
Ms. Ory Okolloh Appointed on 16 October 2020
Mr. Dayalan Nayager***** Appointed on 1 March 2021
Mr. A Cowan* Resigned on 1 March 2021

* British ** Irish *** Ugandan ****Tanzanian ***** South African

110 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

SECRETARY
Ms. Kathryne Maundu (CPS No. 2159)
Stamford Corporate Services LLP
5th Floor, ICEA Lion Centre, West Wing
Riverside Park, Chiromo Road Nairobi
P.O. Box 10643
00100 Nairobi, GPO

AUDITOR
PricewaterhouseCoopers LLP
PwC Tower
Waiyaki Way / Chiromo Road
P.O. Box 43963
00100 Nairobi, GPO

ADVOCATES
Bowmans
5th Floor, ICEA Lion Centre, West Wing
Riverside Park, Chiromo Road Nairobi
P.O. Box 10643
00100 Nairobi, GPO

SHARE REGISTRARS
Custody & Registrar Services Limited
IKM Place
Tower B, 1st Floor
5th Ngong Avenue
P.O. Box 8484
00100 Nairobi, GPO

PRINCIPAL BANKERS
Standard Chartered Bank Kenya Limited
48 Westlands Road, Nairobi, Kenya
P.O. Box 30003
00100 Nairobi, GPO

Stanbic Bank Limited

CfC Stanbic Center
Chiromo Road, Westlands
P.O. Box 30550
00100 Nairobi, GPO

Citibank NA
Citibank House
Upper Hill Road
P.O. Box 30711
00100 Nairobi, GPO

Absa Bank Kenya PLC (formerly Barclays Bank of Kenya Limited)

Barclays Westend Building
Off Waiyaki Way
P.O. Box 30120
00100 Nairobi, GPO

REGISTERED OFFICE
East African Breweries Limited
Corporate Centre,
Garden City Business Park, Ruaraka
PO Box 30161
00100 Nairobi GPO

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 111

Annual Report for the year ended 30 June 2021

DIRECTORS’ REPORT
The Directors submit their report together with the audited financial statements for the year ended 30 June 2021, which disclose the state of
affairs of East African Breweries Limited (“EABL” or the “Company”) together with its subsidiaries (together the “Group”). The annual report and
financial statements have been prepared in accordance with the requirements of the Kenyan Companies Act 2015.
1. Principal activities
The Company and the Group are involved in marketing, production and distribution of a collection of brands that range from beer, spirits to
adult non-alcoholic drinks.
2. Results
The Group and Company results for the year are set out on page 129 and page 131 respectively.
3. Business review
i) Business performance
In the year under review, the COVID-19 pandemic continued to present significant challenges to our business. This was characterized by starting
the financial year under trade and movement restrictions with a partial re-opening of bars in Kenya in the first quarter of the financial year and
closing the financial year in yet another lockdown in Uganda and limited bar operating hours in Kenya.
Throughout the year, the three countries were variously impacted by COVID-19. The Group’s brands, financial stability, and resilience in the face
of adversity were critical factors that helped us navigate this period, which demonstrates a recovery in performance. Net revenue increased
15% to Kshs 86 billion, driven by broad based growth across all markets.This performance reflects a strong recovery and resilience in consumer
demand despite a challenging operating environment. Gross profit increased 13% to Kshs 37.4 billion compared to prior year as net revenue
growth was partially offset by higher cost of sales. The drivers of high cost of sales include excise duty increases, additional costs related to digital
tax stamp implementation in Uganda and general price inflation which was partially mitigated by pro-active cost-saving initiatives.
Profit before tax increased by 2% to Kshs 10.8 billion compared to the prior year with net revenue growth partially offset by the impact of one-
off tax provisions. Profit after tax marginally declined 1% to Kshs 6.9 billion compared to Kshs 7.0 billion reported in the prior year. Excluding the
impact of one-off tax provisions of Kshs 2.8 billion , the group’s profit after tax would have closed at Kshs 8.8 billion, representing a 25% growth
compared to the prior year.
Net cash from operating activities closed at Kshs14.6 billion, a significant improvement of Kshs 11.3 billion compared to the prior year where
liquidity was strained due to the impact of COVID on business performance. The improvement in net cash from operations is attributable to
improvement in operating profit and working capital benefits which demonstates how we are focusing on day to day cash management.
ii) Operating environment
The COVID-19 pandemic brought about socio-economic challenges that disrupted our customers, strained consumer wallets and interrupted
the on-trade channel of our business. Beyond the pandemic, there were also macro-economic pressures, with the depreciation of the Kenya
shilling, and the roll-back of COVID tax relief measures. The impact of the pandemic led to unpredictable times, which required us to closely
track consumers’ attitudes and motivations, and convert these trends to invest effectively in advertising and promotion, and drive sustainable
innovation of new products for consumers.
Inflation was relatively stable across the countries, except for Kenya having a relatively higher inflation rate compared to her neighbors; the
key driver being fuel and food prices. Tanzanian and Ugandan currencies were relatively stable for the better part of the financial year, with
depreciation of the Kenya Shilling ranging between 5% and 9% within the year.
iii) Policy and regulation
The tax and regulatory landscape remain key influencers to the Group’s business performance and strategic decisions. The market has some of
the highest alcohol excise tax rates in Sub Saharan Africa. The Kenya excise regime is a lot more aggressive than that of Tanzania and Uganda.
We expect the Kenya government to continue with between the 5-8% inflationary increases. With general elections concluded in Uganda and
Tanzania, we anticipate there might be some policy shifts as governments seek to address post COVID recovery and stimulus packages for ailing
sectors of the economy. Kenya general elections will be held in 2022 and there is a possibility of having a constitutional referendum in 2021.
In Uganda, the Alcohol Control Policy was passed in September 2019, and we anticipate this could introduce regulations directed at curbing
marketing freedoms, trading hours and licensing, joining Kenya, who already have similar restrictions.
iv) Sustainability
We are committed to creating shared value in the communities where we live, work, source and sell, ensuring that our products and operations
do not cause harm. We are therefore taking the lead in developing solutions to challenges such as climate change, water scarcity, inequality, and
harmful alcohol consumption.
To promote positive drinking, our objective is to demonstrate leadership in ensuring people drink better, addressing alcohol misuse, and
advocating for moderation. We have partnered with a range of organisations and state actors across the region, including the National Transport
and Safety Authority Kenya (NTSA), Dodoma Regional Traffic Police Division and the Alcoholic Beverages Association of Kenya (ABAK), to launch
a series of campaigns aimed at enhancing road safety and instilling responsible behaviour amongst road users. For example, our Don’t Drink and
Drive Campaign in Tanzania has reached over 300,000 people, including bus drivers and boda boda riders.

112 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

DIRECTORS’ REPORT (continued)

3. Business review (Continued)
iv) Sustainability (Continued)
With the ever-increasing demand for visual content driven by global trends that has seen platforms like TikTok, SnapChat and Instagram Stories
take root among the youth, UBL’s Red Card and ‘Cool Teens Don’t Drink’ campaign launched ‘Suubi’ under the global Smashed program.
Across East Africa, we are committed to driving an ambitious inclusion and diversity strategy that is consistent with our performance targets
and relevant to the consumer base we serve. We successfully launched a pilot project in partnership with Sight Savers whereby 39 farmers with
disabilities in Homa Bay county in Kenya were enlisted into our sorghum contract farming scheme. We are keen on advancing this by enlisting
more people with disabilities as suppliers, distributors, and employees across our value chain and aim to have 3% representation by 2030.
As part of our commitment to grain to glass sustainability and under the banner ‘Water for Life’, we have launched a series of community-based
water projects aimed at providing safe, reliable and sustainable supply of the commodity to communities across the East African region. Our
water projects have improved access and availability of clean and safe water to over six million people in Tanzania, Uganda and Kenya. We are
well on our way to accomplishing our 2030 targets on preserving water for life.
Water of Life
In Kenya, we have impacted over 2.5 million people, improving with their access to potable water. In Tanzania, Serengeti Breweries Limited has
drilled over 18 boreholes across the country, providing water to over two million people in water-stressed areas. Between Uganda, Tanzania and
Kenya, ‘Water of Life’ has improved access and availability of water for over six million people.
Water is a key ingredient in our manufacturing process. We also recognise that in Africa we operate in some of the most water stressed cities
in the world. Water stewardship therefore is a critical enabler to building a sustainable business model for us. We have set ambitious targets to
reduce water usage in all our manufacturing sites.
Every day, we treat all our water through an efficient water treatment plant with the aim of returning 100% of wastewater from our operations
back to the environment safely. Over the past years we have invested in numerous areas of our business to substantially reduce the amount of
water that we use in our processes. Currently, we are investing in new water recovery, purification and reuse facilities across 3 sites in East Africa,
including both Tusker and Kisumu sites in Kenya, as well as in Uganda. This very modern technology will drastically reduce our consumption of
water further.
When it comes to delivering efficiency in water and energy use per litre of beer produced, our sites are in the top five ranking of all global beer
production sites. As of September 2020, Uganda Breweries Ltd recorded the lowest ever water ratio of 2.4HL/HL( 2.4 hectolitres per hectolitre of
beer) , against its stretch target of 2.79 HL/HL with a previous gross usage of 3.4HL/HL.
We also take pride in a network of over 60,000 farmers from whom we source our raw materials (sorghum and barley). Our local sourcing
programme is a crucial business priority for us because it enables us to grow value together with the farmers in East Africa. During the lockdown
due to COVID-19, the economic restrictions depressed our sales and in turn caused us to reduce our grain demand. However, we took various
steps to mitigate the impacts of the pandemic on our farmers. We honoured all the contracts, purchasing approximately 45,000 tons of barley
and 32,000 tons of sorghum and paid all the farmers.
Our smallholder farmers are already feeling the effects of climate change, which is unfortunately likely to get worse in the coming decade. We
provide direct support to our farmers in the form of regular trainings on sustainable farming practices, early warning and assessment. We also
provide drought-resistant seed varieties to our farmers to help them be more resilient in the face of climate challenges.
Lastly, we have strategically partnered with private and public entities to amplify environmental sustainability and promote coordinated
responses to the climate emergency.
v) Employees
Employee support during the COVID-19 pandemic
The business has put in place specific guidelines on critical support to employees that covers the gamut of employee experience and challenges
during these unprecedented times. These guidelines include specifics on individual employee well-being and resilience, support with tools and
technology to work from home, keeping employees connected virtually, managing people processes such as recruitment, onboarding and
absence, and pay principles that should apply due to changes in ways and nature of work.
Inclusion and diversity
We believe the most inclusive and diverse culture makes for a better business; we champion inclusion and diversity across our business, with
our partners and communities.
We have targets for our leadership cohort to be 50% female by 2030, we are currently at 36%. We also focus on equal hiring throughout the
business across all levels, for example our Commercial Graduate Program intake recruit is 100% women in Kenya and Uganda, we have increased
the number of women in STEM (Science, Technology, Engineering Mathematics) roles to 30 through apprenticeships across Kenya, Uganda and
Tanzania. Today, 100% of our Cube Spirits Line in Tanzania are female.

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Annual Report for the year ended 30 June 2021

DIRECTORS’ REPORT (continued)

3. Business review (Continued)
v) Employees (Continued)
We believe the importance of role models should never be overlooked. We make sure our female leaders through our Spirited Women network
are highly visible, with a platform to share their career stories with candour; whether that is at panel discussions , awards or coaching and
mentoring events.
Continuous learning journey
The pandemic presented a unique growth opportunity and we repurposed our learning to focus on wellbeing, life skills, navigating complex
challenges, leading self and others in a virtual environment and building capabilities that are relevant for the future of work. Through the year,
we continued to provoke everyday learning from everyday experiences and self-directed learning supported by My Learning Hub as well as
leveraging Leaders as Teachers to build the requisite functional and leadership capabilities across the business.
vi) Internal policy framework
EABL endeavours to ensure that it has best in class policies in the region. EABL wishes to highlight in particular the diversity, procurement and
ICT policies that are in place and are constantly updated in order to incorporate current trends in the region and the fast pace of advancement
in technology.
vii) Related party transactions
The Directors confirm that they have disclosed the Group and Company related party transactions in these financial statements and there were
no insider dealings for the year ended 30 June 2021.
4. Dividends
The Directors do not recommend a dividend for the year ended 30 June 2021 in recognition of the need to conserve cash in view of the
continued volatility occasioned by the COVID-19 pandemic and the impact on our industry (2020: total dividend of Kshs 3 per share amounting
to Kshs 2,372,323,000).
5. Directors
The Directors who held office during the year and to the date of this report are set out on page 110.
6. Employees
The Directors are pleased once again to record their appreciation to all the employees of the Group for their tireless efforts, energy and dedication
during the year.
7. Disclosures to Auditors
The Directors confirm that with respect to each Director at the time of approval of this report:
a) there was, as far as each Director is aware, no relevant audit information of which the Company’s auditor is unaware; and
b) each Director had taken all steps that ought to have been taken as a Director so as to be aware of any relevant audit information and to
establish that the Company’s auditor is aware of that information.
8. Terms of appointment of Auditor
PricewaterhouseCoopers continue in office in accordance with the Company’s Articles of Association and Section 719 of the Kenyan Companies
Act, 2015.
The Directors monitor the effectiveness, objectivity and independence of the auditor. This responsibility includes the approval of the audit
engagement contract and the associated fees on behalf of the shareholders.
9. Approval of financial statements
The financial statements were approved by the Board of Directors on 29 July 2021.
By order of the Board

Ms. Kathryne Maundu

Company Secretary
Date: 29 July 2021

114 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

RIPOTI YA WAKURUGENZI
Wakurugenzi wanawasilisha ripoti yao pamoja na taarifa za kifedha za mwaka uliokamilika 30 Juni 2021, ambazo zinaonyesha hali ya East
African Breweries Limited (“EABL” au “Kampuni”) pamoja na kampuni zake tanzu (kwa pamoja “Kundi”). Ripoti ya kila mwaka na taarifa za kifedha
zimeandaliwa kwa mujibu wa maelezo kwenye Sheria ya Kampuni ya 2015.
1. Shughuli kuu
Kampuni hii na Kundi zinajihusisha katika mauzo, uzalishaji na usambazaji wa mkusanyiko wa nembo za bidhaa ambazo ni kuanzia bia, pombe
kali hadi kwa vinywaji vya watu wazima visivyo na kileo.
2. Matokeo
Matokeo ya Kundi na Kampuni ya kipindi hicho yamechapishwa katika ukurasa wa 127 na ukurasa wa 129 mtawalia.
3. Utathmini wa biashara
i) Matokeo ya biashara
Katika mwaka tunaouangazia, janga la COVID-19 liliendelea kutoa changamoto kwa biashara yetu. Hii ilikuwa ni pamoja na kuanza mwaka kwa
watu kuwekewa shuruti la kutotoka nje na masharti ya kutosafiri. Baa zilifunguliwa kwa muda katika robo ya kwanza ya mwaka Kenya. Mwaka
wa kifedha ulimalizika kwa shuruti jingine la kutotoka nje Uganda na baa kufunguliwa kwa muda tu Kenya.
Katika mwaka huo wote, mataifa yote matatu yaliathiriwa na COVID-19 kwa njia mbalimbali. Nembo za Kundi, uthabiti wa kifedha, na ukakamavu
wakati wa majanga ndivyo vitu vikuu vilivyotusaidia kupitia kipindi hicho ambapo matokeo yetu yalianza kuimarika. Mapato ghafi yalikua kwa
15% hadi Kshs 86 bilioni, hili likichangiwa na ukuaji mpana katika masoko yote. Matokeo haya ni dhihirisho la kuimarika tena na ukakamavu
kwenye mahitaji upande wa wateja licha ya mazingira kuwa magumu. Faida ghafi iliongezeka 13% hadi Kshs 37.4 bilioni ukilinganisha na mwaka
uliotangulia. Ukuaji wa mapato halisi ulipunguzwa kiasi na gharama ya juu ya kufanikisha mauzo. Vitu vilivyochangia gharama ya kufanikisha
mauzo kupanda ni pamoja na; kuongezwa kwa kodi ya bidhaa, gharama za ziada zilizotokana na utekelezaji wa stempu za kidijitali Uganda
pamoja na mfumko wa bei za bidhaa ambao kwa kiwango fulani athari zake zilipunguzwa na mikakati yetu ya kupunguza matumizi.
Faida kabla ya ushuru iliongezeka kwa 2% hadi Kshs 10.8 bilioni ukilinganisha na mwaka uliotangulia huku ukuaji wa mapato halisi ukiathiriwa
kiasi na kutengwa kwa pesa za kulipa kodi ya mara moja. Faida baada ya ushuru ilipungua kidogo kwa 1% hadi Kshs 6.9 bilioni ukilinganisha na
Kshs 7.0 bilioni tulizopata mwaka uliotangulia. Ukiondoa athari za kutengwa kwa kodi ya mara moja ya jumla ya Kshs 2.8 bilioni, faida ya Kundi
baada ya ushuru ingelikuwa Kshs 8.8 bilioni ambao ungekuwa ni ukuaji wa 25% ukilinganisha na mwaka uliotangulia.
Fedha zilizoingia kwa kampuni kutokana na shughuli zetu za kibiashara zilifikia Kshs 14.6 bilioni, ambapo ni kuimarika pakubwa ukilinganisha na
Kshs 11.3 bilioni mwaka uliotangulia ambapo kulikuwa na changamoto katika upatikanaji wa pesa kutokana na athari za COVID kwenye biashara
yetu. Kuimarika huku kwa pesa zilizotokana na shughuli zetu kunatokana na kuimarika kwa faida ghafi baada ya kuondoa gharama ya uendeshaji
shughuli na pia manufaa kutokana na mtaji. Haya yanadhihirisha jinsi tunavyoangazia usimamizi wa fedha siku kwa siku.
ii) Mazingira ya uendeshaji shughuli
Janga la COVID-19 lilileta changamoto za kijamii na kiuchumi zilizowatatiza wateja wetu, kuathiri uwezo wao wa kifedha na kutatiza pia mfumo
wa uuzaji wa biashara yetu. Kando na janga, kulikuwa pia na shinikizo za kiuchumi zilizotokana na kushuka thamani kwa shilingi ya Kenya, na
kuondolewa kwa nafuu za ushuru zilizokuwa zimewekwa kupunguza makali ya COVID. Athari za janga hili zilichangia kuwepo kwa kipindi cha
kutotabirika kilichotuhitaji kufuatilia kwa karibu mitazamo ya wateja na sababu yao ya kufanya mambo, na pia kubadilisha mitindo ili kutuongoza
kuwekeza katika matangazo na uvumishaji wa bidhaa, na kuongoza uvumbuzi wa bidhaa endelevu za kutumiwa na wateja.
Kiwango cha mfumko wa bei za bidhaa na huduma kilikuwa imara katika mataifa tunayohudumu, ingawa kiwango hiki Kenya kilikuwa juu
kidogo ukilinganisha na majirani zake. Sababu kuu ilikuwa bei ya mafuta na vyakula. Sarafu za Tanzania na Uganda zilikuwa pia thabiti kwa
sehemu kubwa ya mwaka huo wa kifedha, huku shilingi ya Kenya ikishuka thamani kwa kati ya 5% na 9% katika mwaka huo.
iii) Sera na sheria
Ushuru na sheria vimebaki kuwa vitu vinavyoathiri sana matokeo ya kibiashara ya Kundi na maamuzi makuu ya kimkakati. Soko hili lina viwango
vya ushuru wa bidhaa za vileo vilivyo miongoni mwa viwango vya juu zaidi Afrika kusini mwa Sahara. Mfumo wa ushuru huo Kenya una makali
zaidi kuliko Tanzania na Uganda. Tunaitarajia serikali ya Kenya kuendelea na ongezeko la 5-8% kuambatana na mfumko. Ikizingatiwa kwamba
Uganda na Tanzania tayari wamefanya uchaguzi, tunatarajia kwamba huenda kukawa na mabadiliko fulani ya kisera serikali zinapokaribia
kutafuta njia za kufufua uchumi baada ya janga la COVID na pia kutoa vichocheo kwa sekta zilizoathirika kwenye uchumi. Uchaguzi mkuu Kenya
utafanyika 2022 na kuna uwezekano wa kura ya maamuzi kuhusu marekebisho ya katiba kufanyika 2021.
Nchini Uganda, Sera ya Udhibiti wa Vileo ilipitishwa Septemba 2019, na tunatarajia hii huenda ikaleta mabadiliko ya kisheria yenye lengo la
kupunguza uhuru wa kutangaza, masaa ya kuuza vileo pamoja na utoaji leseni, na hivyo kujiunga na Kenya ambayo ina masharti kama hayo.
iv) Uendelevu
Tumejitolea kujenga thamani ya pamoja katika jamii katika maeneo ambapo tunaishi, kufanyia kazi, kununua malighafi na kuuza bidhaa, ili
kuhakikisha bidhaa zetu na shughuli zetu hazisababishi madhara. Kwa hivyo, tumechukua uongozi katika kutengeneza suluhu kwa changamoto
kama vile mabadiliko ya tabia nchi, uhaba wa maji, ukosefu wa usawa, na unywaji wa kiholela wa pombe.
Ili kuendeleza unywaji pombe wa kuwajibika, lengo letu ni kudhihirisha uongozi katika kuhakikisha watu wanakunywa pombe kwa njia ya
kuwajibika, kuangazia matumizi mabaya ya pombe na kuendeleza unywaji wa pombe kwa kipimo. Tumeshirikiana na mashirika mbalimbali na
idara za serikali kote kwenye kanda hii, ikiwemo Mamlaka ya Taifa ya Uchukuzi (NTSA), Polisi wa Trafiki Kanda ya Dodoma na Chama cha Vinywaji

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RIPOTI YA WAKURUGENZI (inaendelea)

3. Utathmini wa biashara (mwendelezo)
iv) Uendelevu (mwendelezo)
vyenye Vileo Kenya (ABAK), kuzindua msururu wa kampeni zinazolenga kuimarisha usalama barabarani na kuhimiza tabia za kuwajibika kwa
watu wanaotumia barabara. Kwa mfano, kampeni yetu ya Don’t Drink and Drive kwa maana ya usinywe na kuendesha gari Tanzania imewafikia
zaidi ya watu 300,000, wakiwemo madereva wa mabasi na waendeshaji boda boda.
Kutokana na ongezeko la umaarufu wa video ambao ndio mtindo sasa duniani ambapo mitandao kama vile Tik Tok, Snap Chat na Instagram
Stories imekuwa maarufu sana miongoni mwa vijana, kampeni ya UBL ya Red Card (Kadi Nyekundu) na ‘Cool Teens Don’t Drink’ (Vijana Wazuri
Hawanywi) ilizindua filamu ya ‘Suubi’ kwenye mpango wa kuhamaisha na kuelimisha vijana wa Smashed.
Kote Afrika Mashariki, tumejitolea kuendeleza mkakati wa kuwajumuisha watu wa aina na asili mbalimbali, kuendana na malengo yetu na
kuendana na wateja tunaowahudumia. Tulifanikiwa kuzindua mradi wa majaribio kwa ushirikiano na Sight Savers ambapo wakulima 39 wenye
ulemavu wa aina mbalimbali kaunti ya Homa Bay nchini Kenya walijumuishwa kwenye mpango wetu wa wanakandarasi wanaotukuzia mtama.
Tuna hamu ya kuendeleza mpango huu kwa kuwajumuisha watu zaidi wenye ulemavu kuwa wauzaji, wasambazaji na wafanyakazi wetu katika
ngazi mbalimbali za shughuli zetu. Lengo letu ni wawe 3% kufikia 2030.
Kama sehemu ya kujitolea kwetu katika uendelevu wa kuanzia kwa nafaka hadi kwa gilasi na chini ya kauli mbiu ya ‘Water of Life’, kwa maana
ya Maji ya Uhai, tulizindua msururu wa miradi kadha ya maji yenye lengo la kutoa maji safi, ya kutegemewa na endelevu kwa jamii maeneo
mbalimbali kote kanda ya Afrika Mashariki. Miradi yetu ya maji imeboresha upatikanaji wa maji safi na salama kwa zaidi ya watu milioni sita
Tanzania, Uganda na Kenya. Tumo kwenye hatua nzuri ya kutimiza malengo yetu ya 2030 kuhusu uhifadhi wa maji kwa ajili ya uhai.
Maji ya Uhai
Nchini Kenya, tumewafaa zaidi ya watu 2.5 milioni kwa kurahisisha upatikanaji wa maji safi kwao. Nchini Tanzania, SBL imechimba visima zaidi ya
18 kote nchini humo, vinavyotoa maji kwa watu zaidi ya milioni mbili katika maeneo yenye shida ya maji. Kwa jumla Uganda, Tanzania na Kenya,
‘Maji ya Uhai’ imeimarisha upatikanaji wa maji kwa watu zaidi ya milioni sita.
Maji ni kiungo muhimu katika shughuli yetu ya kutengeneza vileo viwandani. Tunatambua kwamba barani Afrika huwa tunaendesha shughuli
zetu katika baadhi ya miji yenye shida kubwa zaidi za maji duniani. Uwajibikaji kuhusu maji kwa hivyo ni kiungo muhimu katika kuwa na muundo
wa biashara endelevu kwetu. Tumejiwekea malengo makubwa ya kupunguza matumizi ya maji katika viwanda vyetu vyote, na hata zaidi Afrika
ambapo hitaji ni la dharura zaidi.
Kila siku, huwa tunatibu maji yetu kupitia kiwanda cha kutibu maji kwa lengo la kuhakikisha 100% ya maji taka kutoka kwa shughuli zetu za
viwandani yanarejeshwa kwenye mazingira yakiwa salama. Kwa miaka mingi iliyopita, tumewekeza katika maeneo mengi ya biashara yetu ili
kupunguza maji tunayotumia katika viwanda vyetu kwa kiwango kikubwa. Kwa sasa, tunawekeza katika mitambo mipya ya kunusuru maji,
kuyasafisha na kuyatumia tena katika viwanda vyetu katika maeneo 3 Afrika Mashariki, ambapo ni pamoja na Tusker na Kisumu nchini Kenya,
pamoja na Uganda. Teknolojia hii ya kisasa sana itatusaidia kupunguza matumizi ya maji hata zaidi.
Katika kutumia vyema maji na nishati kwa kila lita ya bia inayozalishwa, viwanda vyetu vimo kwenye tano bora miongoni mwa viwanda bora zaidi
duniani. Kufikia Septemba 2020, Uganda Breweries Ltd iliandikisha kipimo cha chini zaidi cha 2.4HL/HL( 2.4 hektolita kwa kila hektolita ya bia) ,
ukilinganisha na lengo la 2.79 HL/HL. Kiwango cha awali kilikuwa 3.4HL/HL.
Tunajivunia pia mtandao wa zaidi ya wakulima 60,000 ambao huwa tunanunua malighafi (mtama na shayiri) kutoka kwao. Mpango wetu wa
kununua kutoka kwa wenyeji unapewa kipaumbele sana nasi kibiashara kwani hutuwezesha kukuza thamani yetu kwa pamoja na wakulima
Afrika Mashariki. Wakati wa shuruti la kutosafiri kutokana na COVID-19, vikwazo vya kiuchumi vilivyowekwa viliathiri mauzo yetu nalo hilo likaathiri
mahitaji ya nafaka. Hata hivyo, tulichukua hatua mbalimbali kupunguza athari zake kwa wakulima. Tulitimiza ahadi zote kwenye mikataba ya
ununuzi, kwa kununua takriban tani 45,000 za shayiri na tani 32,000 za mtama na kuwalipa wakulima wote.
Wakulima wadogo wadogo tayari wanahisi athari za mabadiliko ya tabia nchi, ambazo zinatarajiwa kuwa mbaya zaidi katika mwongo ujao. Huwa
tunatoa usaidizi wa moja kwa moja kwa wakulima kwa njia ya mafunzo ya mara kwa mara kuhusu mbinu endelevu za ukulima, tahadhari ya
mapema na utathmini. Pia huwa tunawapa aina za mbegu zinazoweza kuhimili kiangazi ili kuwasaidia kuweza kukabiliana na changamoto za
mabadiliko ya tabia nchi.
Mwisho, tumeshirikiana na asasi za kibinafsi na za serikali kupigia debe zaidi uendelevu wa kimazingira na kuhimiza pia juhudi za pamoja katika
kukabiliana na dharura ya mabadiliko ya tabia nchi.
v) Wafanyakazi
Usaidizi kwa wafanyakazi wakati wa janga la COVID-19
Biashara imeweka mwongozo wa kina kuhusu usaidizi muhimu kwa wafanyakazi ambao unaangazia upana wa ujuzi na uzoefu wa wafanyakazi
na changamoto zilizojitokeza kipindi hicho. Mwongozo huu una miongoni mwa mengine maslahi na hali ya mfanyakazi pamoja na ukakamavu,
usaidizi wa vifaa na teknolojia kuwezesha watu kufanyia kazi nyumbani, kuwaunganisha wafanyakazi kupitia mtandao, shughuli za usimamizi
wa wafanyakazi kama vile uajiri, kukaribishwa kwa wafanyakazi wapya na wafanyakazi kutokuwa kazini. Pia, unaangazia maadili ya mishahara na
marupurupu. Yote haya yanafaa kutumika kutokana na mabadiliko ya jinsi watu wanavyofanya kazi na kazi yenyewe.
Ujumuishaji na watu aina tofauti
Tunaamini kuwa utamaduni unaojumuisha wote na kukumbatia watu wa aina mbalimbali hufanikisha biashara; tunatetea ujumuishaji na uwepo
wa watu wa aina mbalimbali kote katika biashara yetu, katika washirika wetu na katika jamii.

116 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

RIPOTI YA WAKURUGENZI (inaendelea)

3. Utathmini wa biashara (mwendelezo)
v) Wafanyakazi (mwendelezo)
Tuna malengo ya kuhakikisha viongozi wetu 50% ni wanawake kufikia 2030. Kwa sasa ni 36%. Tunaangazia pia kuajiri kwa msingi wa usawa katika
ngazi zote. Kwa mfano, katika Mpango wetu wa Waliohitimu Vyuo, tulihakikisha kuna 100% Kenya na Uganda. Tumeongeza idadi ya wanawake
katika nafasi za kazi za STEM (Sayansi, Teknolojia, Uhandisi na Hisabati) hadi 30 kupitia mpango wa kujifunza kazi Kenya, Uganda na Tanzania. Leo
hii, 100% ya wanaohudumu Cube Spirits Line nchini Tanzania ni wanawake.
Tunatambua umuhimu wa mifano ya kuigwa. Huwa tunahakikisha kuwa viongozi wetu wanawake wanaonekana vyema kupitia mtandao wa
Spirited Women. Kuna jukwaa lao kusimulia kuhusu safari zao za kitaaluma kwa njia ya uwazi; iwe ni katika mazungumzo ya majopo, hafla za
utoaji wa tuzo au za utoaji wa mafunzo na ulezi.
Safari inayoendelea ya kujifunza
Janga hili lilitoa fursa ya kipekee ya ukuaji na tulifanyia maboresho mfumo wetu wa kujifunza kuangazia maslahi, ujuzi wa kufaa maishani,
kukabiliana na changamoto, kujiongoza na kuwaongoza wengine katika mazingira ya kutokutana ana kwa ana na kujenga uwezo utakaofaa
kwa kazi siku za usoni. Katika mwaka huo, tuliendelea kujifunza kutoka kwa matukio ya kila siku na mafunzo ya kupitia jukwaa la My Learning
Hub pamoja na kuwatumia Viongozi kama Walimu kujenga uwezo unaohitajika kutekeleza majukumu na kuongoza kote katika biashara yetu.
vi) Mfumo wa sera ya ndani
EABL inapania kuhakikisha kuwa ina sera na sheria bora zaidi katika kanda hii. EABL ingependa kuangazia hasa sera zilizowekwa katika kuhakikisha
kwamba watu wa asili mbalimbali wanakumbatiwa na kujumuishwa, manunuzi na teknolojia ya habari na mawasiliano (ICT ) na kuhakikisha
kwamba zinabadilishwa na kufanyiwa marekebisho ili kuendana na mabadiliko katika kanda na mabadiliko ya kiteknolojia yanayotokea kwa kasi.
vii) Shughuli za kibiashara za uhusiano
Wakurugenzi wanathibitisha kwamba wameweka wazi shughuli zao za kibiashara ambazo zinaweza kuwa zinahusiana na Kundi na Kampuni
katika taarifa hizi za kifedha na kwamba hakukuwa na biashara haramu kwenye mwaka uliomalizika 30 Juni 2021.
4. Mgawo wa faida
Wakurugenzi hawapendekezi kulipwa kwa mgawo wa faida kwa mwaka uliomalizika 30 Juni 2021 kwa kutambua hitaji la kuhifadhi fedha
kutokana na kuendelea kwa hali ya kutotabirika ambayo imetokana na janga la COVID-19 na athari zake kwa sekta yetu (2020: mgawo wa faida
wa jumla ya Kshs 3 kwa kila hisa sawa na 2,372,323,000).
5. Wakurugenzi
Wakurugenzi waliohudumu katika mwaka huo na waliopo hadi tarehe ya kutolewa kwa ripoti hii wameorodheshwa katika ukurasa 82-85.
6. Wafanyakazi
Wakurugenzi wana furaha kwa mara nyingine tena kutoa shukrani kwa wafanyakazi wote wa Kundi kwa juhudi zao, nguvu na kujitolea kwao
katika mwaka huo.
7. Kuweka bayana mambo kwa Wakaguzi wa Hesabu
Wakurugenzi wanathibitisha kwamba kuhusiana na kila Mkurugenzi wakati wa kuidhinishwa kwa ripoti hii:
a) Kwa uelewa wa kila Mkurugenzi, hakukuwepo taarifa zozote muhimu za ukaguzi wa hesabu za Kampuni ambazo mkaguzi wa hesabu hakuwa
nazo; na
b) Kila Mkurugenzi alikuwa amechukua hatua zote zilizofaa kuchukuliwa kama Mkurugenzi ili kufahamu taarifa zozote muhimu za ukaguzi wa
hesabu na kuhakikisha kwamba mkaguzi wa hesabu za Kampuni anafahamu taarifa hizo.
8. Masharti ya uteuzi wa Mkaguzi wa hesabu
PricewaterhouseCoopers wanaendelea kuhudumu kwa mujibu wa Mkataba wa Ushirikisho na Kanuni za Kampuni na Kifungu 719 cha Sheria
yaKampuni za Kenya ya mwaka 2015.
Wakurugenzi hufuatilia utendaji kazi, kutopendelea upande wowote, na uhuru wa mkaguzi wa hesabu. Wajibu huu ni pamoja na uidhinishaji wa
mkataba wa kuhudumu kama mkaguzi wa hesabu na malipo yanayohusiana na hilo kwa niaba ya wenyehisa.
9. Kuidhinishwa kwa taarifa za kifedha
Taarifa za kifedha ziliidhinishwa na bodi ya Wakurugenzi mnamo 29 Julai 2021.
Kwa agizo la Bodi

Bi. Kathryne Maundu

Katibu wa Kampuni
Tarehe: 29 Julai 2021

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 117

Annual Report for the year ended 30 June 2021

DIRECTORS’ REMUNERATION REPORT

East African Breweries Limited (“EABL” or “Company”) ambition is to be the best performing, most trusted and respected consumer products
company in Africa. Achieving this will require significant leadership focus and investment behind an ambitious growth strategy. Reward is a key
enabler to this strategy – impacting our ability to not only attract, but to motivate and retain talent with the capability to deliver EABL’s strategy
and performance goals.
EABL is pleased to present the Directors’ remuneration report for the year ended 30 June 2021. This report is compiled pursuant to EABL’s
reward policy, the Capital Markets Authority Code of Corporate Governance, and the Kenyan Companies Act, 2015 Regulations on Directors’
remuneration. A key provision of the Company’s principles is that reward directly support the business strategy with clear and measurable
linkage to business performance.
The EABL reward system seeks to recognise the contribution its employees make towards the success of the Company, while reflecting not only
the value of the roles they perform, but also the level to which they perform them. Our approach to recognising our Directors’ contribution to
the business is based on our reward principles, which are summarised as below:
• Competitiveness: Our total reward levels are reflective of the competitive market, and compare favourably with our peers for such skills. Our
reward structure is reviewed regularly and is subject to external benchmarking to ensure that we continually offer our Directors a competitive
total reward package.
• Transparency: Our reward programme is simple and globally aligned in terms of core offerings and mechanism. We strive to explain to all
stakeholders the component value of the total reward package and the criteria which may affect it.
• Performance based: Our reward programmes are linked to our performance ambition. They are simple and clearly communicated,
recognising individual and business performance.
As at 30 June 2021, EABL’s Board of Directors consisted of:
• 2 Executive Directors: Mrs. Jane Karuku and Mrs. Risper G. Ohaga. Mr. Andrew Cowan resigned from the Board on 1 March 2021.
• 3 Non-Executive Directors: Mr. John O’Keeffe, Mr. Leo Breen and Mr. Dayalan Nayager who was appointed as a Non-Executive Director on 1
March 2021.
• 6 Independent Non-Executive Directors (“INEDs”): Dr. Martin Oduor-Otieno, Ms. Carol Musyoka, Mr. John Ulanga, Mr. Japheth Katto, Mr Jimmy
Mugerwa and Ms. Ory Okolloh. Ms. Ory Okolloh was appointed as Independent Non-Executive Director on 16 October 2020.
In accordance with Section 6 of the Companies (General) (Amendment) Regulations of 2017, the Directors Remuneration Report for the year
ended 30 June 2020 was presented to shareholders for approval at the Annual General Meeting (AGM) held on 16th September 2020. 99.98%
voted in favour of the report, 0.00% voted against the report while 0.02% of the votes were withheld or spoilt.
The next section outlines the details of the remuneration.

118 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

DIRECTORS’ REMUNERATION REPORT (continued)

1. Executive Directors
The reward of the Executive Directors is guided by the principles set out above. It comprises guaranteed elements (base pay and fixed allowances),
benefits and variable elements (bonus pay and stock options or awards).
The elements of the Executive Directors’ remuneration are as detailed out on the table below:

Reward Element Description

Base pay Purpose and link to Group Strategy
The base pay supports the attraction and retention of the best global talent with the capability to deliver EABL’s
strategy and performance goals.
Operation
• It is paid monthly (12 equal instalments) during the year, and is pensionable.
• The base pay is reviewed annually in October, to reflect changes in market pay levels and individual performance.
• The Board Nominations and Remuneration Committee (BNRC) approves the budgets that form the basis for the
annual base salary increments on an annual basis.
• Performance measure –It is based on individual’s level of responsibility
Fixed allowances and Purpose and link to Group Strategy
benefits
These allowances and benefits provide market competitive and cost effective benefits.
Operation
• Fixed allowances are provided in line with the Company’s pay structure and may include a car allowance (unless
in cases where an actual car is provided). Further, Executive Directors on international assignee contracts receive
mobility related allowances to compensate for cost of living and location differentials.
• Market competitive benefits that are in line with the Company’s pay structure include pension, medical, accident
and life insurance and club membership.
• International assignees receive additonal benefits that include: home leave travel, housing support, dependants’
education support and tax support through tax equalisation.
Performance measure – It is based on individual’s level of responsibility.
Bonus Purpose and link to Group Strategy
This incentivises delivery of EABL’s annual strategic financial and non-financial targets. It provides focus on the key
financial metrics and the individual’s contribution to the Company’s performance.
Operation
• Bonus pay is discretionary and is paid out in line with the Company’s bonus scheme referred to as the Annual
Incentive Plan (AIP). AIP seeks to reward an employee’s contribution as part of a winning team’.
• Bonuses are awarded during the EABL Annual Review Cycle and paid out in cash in October of every year.
• The elements used to calculate the bonus are:
o Annual base salary - Bonus is usually expressed in terms of one’s annual base salary.
o The business multiple – This is a reflection of the performance of the business against its annual operating
plan. It could be between 0.0 and 3.0.
o The bonus factor - is the proposed recommendation by the Line Manager. It is a reflection of one’s individual
performance in the performance year and is between 0% - 200%.
Performance measure – This is based on individual and Company performance

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 119

Annual Report for the year ended 30 June 2021

DIRECTORS’ REMUNERATION REPORT (continued)

Reward Element Description
Shares / stock options Purpose and link to Group Strategy
These provide focus on delivering superior long term consistent performance in line with EABL’s business
strategy and to create alignment with the delivery of value and returns to shareholders.

Operation
The Executive Directors participate in the below plans:
• Diageo Executive Long Term Investment Plan (DELTIP) – Under this plan, Diageo has discretion to grant
Restricted Stock Units (RSUs) and/or share options in Diageo plc. Awards are normally made annually in
September. DELTIP encourages leaders of the business to act like owners by linking reward to Diageo plc’s
share price performance. Awards will normally vest three years after grant, subject to continued employment.
Employees can exercise their options at any time within the seven year period following the vesting date.
• The Performance Share Plan (PSP) – This is a long-term incentive that offers the executive the opportunity
to receive a conditional award overshares in Diageo plc, subject to the achievement of performance
conditions: organic Profit Before Exceptional Items and Tax (PBET), organic Net Sales Value (NSV) growth
and Environmental, Social and Governance (ESG) priorities. Provided that the performance conditions are
met, shares will vest and be released to participants three years after the date of grant. The proportion of the
award released depends on the extent to which the performance conditions are met.
Performance measure for the right to receive shares – The vesting of awards is linked to a range of
measures which may include, but are not limited to:
• A growth measure (e.g. net sales growth, operating profit growth);
• A measure of efficiency (e.g. operating margin, cumulative free cash flow, return on invested capital);
• A measure of Diageo’s performance in relation to its peers (e.g. relative total shareholder return); and
• A measure relating to ESG priorities.

Company product All Directors are eligible to receive a discretionary choice from a select product range to enable them experience
the Company brands first hand. The value of the products is Kshs 3,000 per month. There is no cash alternative
to product allowance and it is not a contractual benefit.

Notice period The notice period is defined in the indvidual contracts. Local contracts provide for 3 months notice period.
Notice period for international assignees is defined by their home contracts terms of service.

Termination payments These are defined by Company policy, which provides for severance payment, payment in lieu of notice and
payment of any accrued fixed pay and leave.

Compensation for past This report includes payments made in the relevant financial year to any person who was not a Director of the
Directors Company at the time the payment was made but had previously been a Director of the Company.

120 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

DIRECTORS’ REMUNERATION REPORT (continued)

Executive Directors Remuneration – Auditable information
Table 1: Executive Directors Pay and Benefits

Salary Bonuses Allowances and Total

benefits

Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000

Year ended 30 June 2021
Andrew Cowan 21,324 - 55,932 77,256
Jane Karuku 39,433 - 12,878 52,311
Risper G. Ohaga 23,910 - 4,742 28,652
Total 84,667 - 73,552 158,219

Year ended 30 June 2020

Andrew Cowan 39,197 57,543 54,993 151,733
Jane Karuku 30,867 24,812 6,878 62,557
György Geiszl 16,183 23,181 52,943 92,307
Risper G. Ohaga 9,963 6,121 5,926 22,010
Total 96,210 111,657 120,740 328,607
The remuneration disclosed for directors who serve for a part of the year constitutes payments during the period they were in employment with
the Company.
The bonus is awarded during the annual review cycle and paid out in October of every year. Therefore, the disclosed bonus remuneration is the
amounts paid in the financial year based on the individual and company performance in the prior year.

Table 2: Executive Directors Stock options

The movement in the Executive Directors’ share options awards is as follows:

At start of year Shares/options Shares/options At end of year

awarded exercised
Year ended 30 June 2021
Andrew Cowan 37,563 13,731 (12,797) 38,497
Jane Karuku 45,468 13,198 (8,365) 50,301
Risper G. Ohaga 1,328 5,811 - 7,139
Total 84,359 32,740 (21,162) 95,937

Year ended 30 June 2020

Andrew Cowan 40,377 12,273 (15,087) 37,563
Jane Karuku 40,683 6,901 (2,116) 45,468
György Geiszl 11,541 1,069 (4,781) 7,829
Risper G. Ohaga - 1,328 - 1,328
Total 92,601 21,571 (21,984) 92,188

The charge through profit or loss relating to the share options and awards was Kshs 47,504,000 (2020: Kshs 29,018,000)

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 121

Annual Report for the year ended 30 June 2021

DIRECTORS’ REMUNERATION REPORT (continued)

2. Non-Executive Directors
The Non-Executive Directors, Mr. John O’Keeffe, Mr. Leo Breen and Mr. Dayalan Nayager are full time employees of the majority shareholder,
Diageo plc. As a result of being full time employees of Diageo plc, these Non-Executive Directors did not earn any fees for sitting on the board
of EABL.
3. Independent Non-Executive Directors (INEDS)
Independent Non-Executive Directors’ remuneration policy and framework
Our reward policy targets to ensure that our pay is competitive at all levels across the business which also extends to include the compensa-
tion for the Non-Executive Directors. The Non-Executive Directors remuneration is based on an analysis and understanding of our market prac-
tices as well as the Capital Markets Authority (CMA) guidelines on good corporate governance that “the non-executive directors’ remuneration
should be competitive in line with remuneration for other directors in competing sectors”.
EABL’s preferred market positioning for remuneration is 75th percentile within a comparable peer group of companies. The approved internal
policy and market practice is to review remuneration for Board Members every 2 years.
The list of the reward components is as follows:
(i) Consolidated fees
This is competitive taking into account market rates of pay. Fees are reviewed every two years after a survey of prevailing market rates. Any
increases will be determined in accordance with the ability of the business to fund the increase. Retainer fees are paid on a monthly basis.
Effective financial year 2020, the Retainer Fees and Siting Allowance was consolidated to provide for one amount paid out monthly and differ-
entiated by level of responsibility in the Board. Therefore, no separate attendance fees are paid in addition to the consolidate fees.
(ii) Insurance cover
EABL provides professional indemnity insurance for all the Independent Non-Executive Directors in line with best practice in the market.
(iii) Product allowance
Independent Non-Executive Directors’ are eligible to receive a discretionary choice from a select product range to enable them experience the
Group’s brands first hand. The value of the products is Kshs 3,000 per month. There is no cash alternative to product allowance and it is not a
contractual benefit.
(iv) Travel and accommodation when on Company business
EABL provides for travel and accommodation costs in line with its Travel and Entertainment policy. Independent Non-Executive Directors travel
on business class when going for Company related meetings.
(v) Medical cover
The Company provides Independent Non-Executive Directors with medical cover, both inpatient and outpatient, within the limits provided for
EABL employees.
The Company values continued dialogue with EABL’s shareholders and engages directly with them at the Annual General Meeting when
making any revisions to the INEDs remuneration package.

122 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

DIRECTORS’ REMUNERATION REPORT (continued)

Independent non-executive Directors’ remuneration policy and framework (continued)
INEDS Remuneration – Auditable information

Retainer Sitting Total

allowances
Kshs ‘000 Kshs ‘000 Kshs ‘000
Year ended 30 June 2021
Martin Oduor-Otieno 8,800 - 8,800
Carol Musyoka 5,580 - 5,580
Japheth Katto 6,558 - 6,558
Jimmy Mugerwa 6,251 - 6,251
John Ulanga 6,037 - 6,037
Ory Okolloh 3,720 - 3,720
Total 36,946 - 36,946

Year ended 30 June 2020

Charles Muchene 3,772 280 4,052
Martin Oduor-Otieno 7,108 345 7,453
Carol Musyoka 5,497 375 5,872
Japheth Katto 5,651 67 5,718
Jimmy Mugerwa 5,651 67 5,718
John Ulanga 5,447 79 5,526
Total 33,126 1,213 34,339

By order of the Board

Ms Kathryne Maundu
Company Secretary
Date: 29 July 2021

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 123

Annual Report for the year ended 30 June 2021

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Kenyan Companies Act, 2015 requires the Directors to prepare financial statements for each financial year which give a true and fair view
of the financial position of the Group and Company at the end of the financial year and its financial performance for the year then ended. The
Directors are responsible for ensuring that the Group and Company keeps proper accounting records that are sufficient to show and explain
the transactions of the Group and Company; disclose with reasonable accuracy at any time the financial position of the Group and Company;
and that enables them to prepare financial statements of the Group and Company that comply with prescribed financial reporting standards
and the requirements of the Kenyan Companies Act, 2015. They are also responsible for safeguarding the assets of the Group and Company
and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors accept responsibility for the preparation and presentation of these financial statements in accordance with International Finan-
cial Reporting Standards and in the manner required by the Kenyan Companies Act, 2015. They also accept responsibility for:

i. Designing, implementing and maintaining internal control as they determine necessary to enable the preparation of financial statements
that are free from material misstatements, whether due to fraud or error;

ii. Selecting suitable accounting policies and then applying them consistently; and

iii. Making judgements and accounting estimates that are reasonable in the circumstances.

Having made an assessment of the Company’s ability to continue as a going concern, the Directors have disclosed in Note 2(a)(ii) of the finan-
cial statements matters relating to the use of going concern basis of preparation of the financial statements.

The Group’s statement of financial position indicates a net current liabilities position of Kshs 5,609,779,000 (2020: Kshs 5,076,181,000). The
Directors believe that this is transient in nature as the Group continues to align its capital expenditure with long term funding. The Capital
Markets Authority has exempted the Group from maintaining a current ratio of 1 until June 2023. The Group had undrawn funding available
as at 30 June 2021 of Kshs 11.4 billion (2020: Kshs 4.1 billion) as disclosed in Note 30.

The Directors have undertaken a detailed funding assessment of the Group, including a debt maturity analysis. Based on the outcome of
the assessment, the Directors have concluded that the Group will generate/access sufficient funds to meet all its obligations over the next
twelve-month period from the date of this report. They have also reviewed all the borrowing financial covenants and confirm that the Group is
compliant.

As explained in Note 2(a)(ii) the Directors find it appropriate to prepare these financial statements on a going concern basis.

The Directors acknowledge that the independent audit of the financial statements does not relieve them of their responsibility.

Approved by the Board of Directors on 29 July 2021 and signed on its behalf by:

Ms. Jane Karuku Ms. Risper G Ohaga

Group Managing Director Chief Financial Officer

124 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Independent auditor’s report to the shareholders
of East African Breweries Limited
Report on the audit of the financial statements

Our opinion

We have audited the accompanying financial statements of East African Breweries Limited (the Company) and its subsidiaries (together,
the Group) set out on pages 129 to 196, which comprise the consolidated statement of financial position at 30 June 2021, the consolidated
statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated
statement of cash flows for the year then ended, together with the Company statement of financial position at 30 June 2021, and the Compa-
ny statements of profit or loss and other comprehensive income, changes in equity, and cash flows for the year then ended, and the notes to
the financial statements, including a summary of significant accounting policies.

In our opinion the accompanying financial statements of East African Breweries Limited give a true and fair view of the financial position of
the Group and the Company at 30 June 2021 and of their financial performance and cash flows for the year then ended in accordance with
International Financial Reporting Standards and the requirements of the Companies Act, 2015.

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 company in accordance with the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical require-
ments that are relevant to our audit of the financial statements in Kenya. We have fulfilled our other ethical responsibilities in accordance with
the IESBA Code.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial
statements of the current period. 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.

PricewaterhouseCoopers LLP. PwC Tower, Waiyaki Way/Chiromo Road, Westlands

P O Box 43963 – 00100 Nairobi, Kenya
T: +254 (20)285 5000 F: +254 (20)285 5001 www.pwc.com/ke

Partners: E Kerich B Kimacia M Mugasa A Murage F Muriu P Ngahu R Njoroge S O Norbert’s’ B Okundi K Saiti
Independent auditor’s report to the shareholders
of East African Breweries Limited
Key audit matters (continued)
Key audit matter How our audit addressed the key audit matter

Carrying value of intangible assets (goodwill and brands) and We evaluated and validated the composition of management’s
investments in subsidiaries cash flow forecasts and the underlying assumptions based on the
As disclosed in Note 24 of the financial statements, the Group has historical performance of the CGUs, industry-specific reports and the
goodwill of Kshs 2.9 billion and indefinite-lived brand intangible assets macro economic outlook.
of Kshs 485 million as at 30 June 2021 arising from business acquisitions Our audit procedures included assessing the appropriateness of the
in prior years. The carrying amount of investments in subsidiaries in the impairment models and the reasonableness of the assumptions by
Company’s statement of financial position at 30 June 2021 was Kshs 47 benchmarking the key market-related assumptions in the models,
billion. such as discount rates, long term growth rates and foreign exchange
rates, against external data, and assessing the reliability of cash
As explained in the accounting policies Note 2 (h) and 2 (s) in the
flow forecasts through a review of actual past performance and
financial statements, management perform an impairment assessment
comparison to previous forecasts.
of intangible assets on an annual basis. The impairment assessment is
based on a comparison of the carrying amount of the intangible assets We tested the mathematical accuracy and performed sensitivity
and the investments in subsidiaries in the statement of financial position analysis of the inputs and assumptions to the models.
to their respective recoverable amounts. We assessed the adequacy and appropriateness of the related
disclosures in Notes 24 and 25 of the financial statements.
The determination of the recoverable amount, being the higher of
value-in-use and fair value less costs to dispose, requires management
judgement in both identifying and then valuing the relevant
cash generating units (CGUs). Recoverable amounts are based on
management’s estimate of variables and market conditions such as
future selling prices and sales volume growth rates, the timing of future
operating expenditure, and the most appropriate discount and long-
term growth rates. Variations in management estimates and judgements
could result in material differences in the outcomes of the assessment.

126
Independent auditor’s report to the shareholders
of East African Breweries Limited
Key audit matters (continued)
Key audit matter How our audit addressed the key audit matter

Provisions and contingent liabilities As explained in Note 32 in the financial statements, since the
As explained in Note 32 to the financial statements, the group entities settlement of these matters is subject to future negotiations and
have unresolved assessments and claims by tax authorities on a range of legal proceedings, the calculations of any provisions are subject
tax compliance matters arising in the normal course of business. to inherent uncertainty. We assessed the reasonableness of any
provisions recorded in the financial statements in the context of the
The Directors use the best available information to make significant uncertainty.
judgements at the year-end as to the likely outcome of these matters for
Our audit focused on assessing the reasonableness of the Directors’
purposes of calculating any potential liabilities and/or determining the
judgements in relation to unresolved tax assessments and claims. In
level of disclosures in the financial statements. The future outcome of
particular, our procedures included the following:
these claims could be materially different from the Directors’ judgements.
• where relevant, assessing independent professional opinions
used in the management judgements and estimates; and
• validation of the management judgements and estimates
against the supporting internal information and documents, and
communications with relevant tax authorities.
We evaluated whether the disclosures in the financial statements
appropriately reflect any significant uncertainties that exist around
the unresolved tax matters.

Other information
The other information comprises of the Corporate information, the Directors’ report, the Directors’ remuneration report, the Statement of Di-
rectors’ responsibilities and the Principal shareholders and share distribution information, which we obtained prior to the date of this auditor’s
report, and the rest of the other information in the 2021 Integrated Report and Financial Statements which are expected to be made available
to us after that date, but does not include the financial statements and our auditor’s report thereon. The Directors are responsible for the other
information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stat-
ed in this report, we do not and will express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above 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.
If, based on the work we have performed on the other information we have received prior to the date of this auditor’s report 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.
When we read the rest of the other information in the 2020 Integrated Report and Financial Statements, which was made available to us after
the date of our report and we conclude that there is a material misstatement therein, we are required to communicate the matter to those
charged with governance.
Responsibilities of the Directors for the financial statements
The Directors are responsible for the preparation of financial statements that give a true and fair view in accordance with International Finan-
cial Reporting Standards and the requirements of the Kenyan Companies Act, 2015 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.
In preparing the financial statements, the Directors are responsible for assessing the Groups’ 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 to cease operations, or have no realistic alternative but to do so.

127
Independent auditor’s report to the shareholders
of East African Breweries Limited
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the 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 financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the 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 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 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 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 to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the 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 Group’s financial statements. We are responsible for the direction, supervision and performance of the Group audit.
We remain solely responsible for our audit opinion.
We communicate with the Directors 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 Directors 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 appli-
cable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the Group’s
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 public
interest benefits of such communication.
Report on other matters as prescribed by the Companies Act, 2015
Report of the Directors
In our opinion, the information given in the Directors’ report on pages 112 to 114 is consistent with the financial statements.
Directors’ remuneration report
In our opinion the auditable part of the Directors’ remuneration report on pages 118 to 123 has been properly prepared in accordance with
the Kenyan Companies Act, 2015.

FCPA Michael Mugasa, Practicing Certificate Number 1478

Engagement partner responsible for the audit
For and on behalf of PricewaterhouseCoopers LLP
Certified Public Accountants
Nairobi
29th July 2021

128
 Financial Statements For the year ended 30 June 2021

Consolidated statement of profit or loss

Year ended 30 June
Note 2021 2020
Kshs ‘000 Kshs ‘000
Revenue from contracts with customers 6(a) 85,961,815 74,916,259
Cost of sales 7(a) (48,548,122) (41,896,229)
Gross profit 37,413,693 33,020,030
Selling and distribution costs (7,362,119) (6,590,629)
Administrative expenses 8(a) (9,320,113) (8,565,240)
Other expenses 9(a) (5,924,689) (3,382,811)
Finance income 12(a) 91,242 164,873
Finance costs 12(a) (4,039,981) (3,990,964)
Profit before income tax 10 10,858,033 10,655,259
Income tax expense 13(a) (3,896,093) (3,634,344)
Profit for the year 6,961,940 7,020,915
Profit attributable to:
Equity holders of the Company 4,354,228 4,086,477
Non-controlling interests 18(a) 2,607,712 2,934,438
Profit for the year 6,961,940 7,020,915
Earnings per share
-basic and diluted (Kshs per share) 15 5.51 5.17

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 129

Financial Statements for the year ended 30 June 2021

Consolidated statement of comprehensive income

Year ended 30 June
2021 2020
Kshs ‘000 Kshs ‘000
Profit for the year 6,961,940 7,020,915
Other comprehensive income, net of tax:
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations 209,841 657,748
Total comprehensive income for the year 7,171,781 7,678,663

Total comprehensive income for the year attributable to:

Equity holders of the Company 4,549,415 4,617,270
Non-controlling interests 2,622,366 3,061,393
Total comprehensive income for the year 7,171,781 7,678,663

130 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Company statement of profit or loss and other comprehensive income

Year ended 30 June
2021 2020
Note Kshs ‘000 Kshs ‘000
Revenue from contracts with customers 6(b) 1,743,771 2,019,164
Cost of sales 7(b) - -
Gross profit 1,743,771 2,019,164

Administrative expenses 8(b) (1,568,599) (1,493,509)

Other income/(expenses) 9(b) 1,125,440 (942,523)
Dividend income 2,529,344 13,557,295
Finance income 12(b) 3,210,164 3,101,187
Finance costs 12(b) (4,445,165) (5,560,487)
Profit before income tax 10 2,594,955 10,681,127

Income tax credit/(expense) 13(b) 367,667 (620,194)

Profit for the year 2,962,622 10,060,933

Profit for the year 2,962,622 10,060,933

Other comprehensive income, net of tax - -
Total comprehensive income for the year 2,962,622 10,060,933

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 131

Financial Statements for the year ended 30 June 2021

Consolidated statement of financial position

At 30 June
2021 2020
Note Kshs ‘000 Kshs ‘000
Equity attributable to owners of the Company
Share capital 16 1,581,547 1,581,547
Share premium 16 1,691,151 1,691,151
Other reserves 17(a) (2,606,773) (2,821,327)
Retained earnings 5,519,268 5,869,572
6,185,193 6,320,943
Non-controlling interests 18 8,667,237 7,672,325
Total equity 14,852,430 13,993,268

Non-current liabilities
Deferred income tax 19(a) 6,239,320 5,568,697
Borrowings 30(a) 38,260,591 36,900,000
Lease liabilities 31(a) 1,062,360 1,151,841
45,562,271 43,620,538
Total equity and non-current liabilities 60,414,701 57,613,806

Non-current assets
Property, plant and equipment 20(a) 59,747,234 56,734,910
Right-of-use assets 21(a) 1,451,980 1,577,415
Intangible assets – Software 23(a) 624,952 602,036
Intangible assets – Goodwill 24(a) 2,860,728 2,831,130
Intangible assets – Brand 24(b) 485,008 481,219
Other financial assets 26 10,000 10,000
Deferred income tax 19(a) 844,578 453,277
66,024,480 62,689,987

Current assets
Inventories 27(a) 11,688,157 10,916,370
Trade and other receivables 28(a) 13,022,880 5,681,444
Current income tax 3,769,587 3,708,970
Cash and bank balances 34(b) 5,611,910 5,661,635
34,092,534 25,968,419
Current liabilities
Trade and other payables 29(a) 30,543,718 21,731,083
Dividends payable 14 673,463 815,661
Borrowings 30(a) 6,900,000 4,106,253
Lease liabilities 31(a) 394,243 459,265
Bank overdraft 30(a) 1,190,889 3,932,338
39,702,313 31,044,600
Net current liabilities (5,609,779) (5,076,181)
60,414,701 57,613,806

The financial statements on pages 129 to 196 were approved for issue by the board of Directors on 29 July 2021 and signed on its behalf by:

Ms. Jane Karuku Ms. Risper G Ohaga

Group Managing Director Group Chief Financial Officer

132 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Company statement of financial position

At 30 June
2021 2020
Note Kshs ‘000 Kshs ‘000
Equity attributable to owners of the Company
Share capital 16 1,581,547 1,581,547
Share premium 16 1,691,151 1,691,151
Other reserves 17 73,476 48,310
Retained earnings 19,540,747 16,578,125
Total equity 22,886,921 19,899,133

Non-current liabilities
Borrowings 30(b) 37,108,333 36,900,000
Lease liabilities 31(b) 5,283 10,986
37,113,616 36,910,986
Total equity and non-current liabilities 60,000,537 56,810,119

Non-current assets
Property and equipment 20(b) 443,176 480,265
Right-of-use assets 21(b) 12,599 26,458
Intangible assets – software 23(b) 123,519 122,344
Investment in subsidiaries 25 47,037,625 40,620,200
Other financial assets 26 10,000 10,000
Receivables from related parties 35(b) 31,036,117 27,894,760
Deferred income tax 19(b) 841,629 442,533
79,504,665 69,596,560

Current assets
Trade and other receivables 28(b) 3,335,382 2,096,784
Current income tax 2,300,544 1,812,745
Cash and bank balances 34(b) 1,761,351 3,616,403
7,397,277 7,525,932

Current liabilities
Trade and other payables 29(b) 19,320,605 12,674,504
Dividends payable 14 673,463 815,661
Bank overdraft 34(b) - 2,804,807
Borrowings 30(b) 6,900,000 4,000,000
Lease liabilities 31(b) 7,337 17,401
26,901,405 20,312,373
Net current liabilities (19,504,128) (12,786,441)
60,000,537 56,810,119

The financial statements on pages 129 to 196 were approved for issue by the board of Directors on 29 July 2021 and signed on its behalf by:

Ms. Jane Karuku Ms. Risper G Ohaga

Group Managing Director Group Chief Financial Officer

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 133

134
Consolidated statement of changes in equity
Other Retained Non-controlling
Year ended 30 June 2021 Share capital Share premium reserves earnings Total interests Total equity
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
At 1 July 2020 1,581,547 1,691,151 (2,821,327) 5,869,572 6,320,943 7,672,325 13,993,268
Total comprehensive income
Profit for the year - - - 4,354,228 4,354,228 2,607,712 6,961,940
Other comprehensive income - - 195,187 - 195,187 14,654 209,841
Total comprehensive income for the year - - 195,187 4,354,228 4,549,415 2,622,366 7,171,781

Transactions with owners of the Company

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Acquisition of non-controlling interests (Note 18) - - - (4,704,532) (4,704,532) (1,566,844) (6,271,376)
Share based payment reserve (Note 17(a)) - - 25,166 - 25,166 - 25,166
Employees share ownership plan (Note 17(a)) - - (5,799) - (5,799) - (5,799)
Dividends:
- Interim for 2021 - - - - - (11,020) (11,020)
Financial Statements for the year ended 30 June 2021

- Final for 2020 - - - - - (49,590) (49,590)

Total transactions with owners of the Company - - 19,367 (4,704,532) (4,685,165) (1,627,454) (6,312,619)
At 30 June 2021 1,581,547 1,691,151 (2,606,773) 5,519,268 6,185,193 8,667,237 14,852,430
 Consolidated statement of changes in equity (continued)
Other Retained Non-controlling
Year ended 30 June 2020 Share capital Share premium reserves earnings Total interests Total equity
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
At 1 July 2019 1,581,547 1,691,151 (3,388,566) 8,760,247 8,644,379 7,510,372 16,154,751
Total comprehensive income
Profit for the year - - - 4,086,477 4,086,477 2,934,438 7,020,915
Other comprehensive income - - 530,793 - 530,793 126,955 657,748
Total comprehensive income for the year - - 530,793 4,086,477 4,617,270 3,061,393 7,678,663

Transactions with owners of the Company

Purchase of additional interest in a subsidiary (Note - - - (308,147) (308,147) - (308,147)

18)
Adjustment arising from change in non-controlling - - - 447,964 447,964 (447,964) -
interests (Note 18)
Share based payment reserve (Note 17(a)) - - 22,126 - 22,126 - 22,126
Employees share ownership plan (Note 17(a)) - - 14,320 - 14,320 - 14,320
Dividends:
- Interim for 2020 - - - (2,372,323) (2,372,323) (829,042) (3,201,365)
- Final for 2019 - - - (4,744,646) (4,744,646) (1,622,434) (6,367,080)
Total transactions with owners of the Company - - 36,446 (6,977,152) (6,940,706) (2,899,440) (9,840,146)
At 30 June 2020 1,581,547 1,691,151 (2,821,327) 5,869,572 6,320,943 7,672,325 13,993,268

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Financial Statements for the year ended 30 June 2021

135
Financial Statements for the year ended 30 June 2021

Company statement of changes in equity

Share Share Other Retained
capital premium reserves earnings Total equity
Kshs’000 Kshs’000 Kshs ‘000 Kshs’000 Kshs’000
At 1 July 2020 1,581,547 1,691,151 48,310 16,578,125 19,899,133

Total comprehensive income for the year - - - 2,962,622 2,962,622

Transactions with owners of the company:
Share based payment reserve (Note 17(a)) - - 25,166 - 25,166
Total transactions with owners of the company - - 25,166 - 25,166
At 30 June 2021 1,581,547 1,691,151 73,476 19,540,747 22,886,921

At 1 July 2019 1,581,547 1,691,151 26,184 13,634,161 16,933,043

Total comprehensive income for the year - - 10,060,933 10,060,933
Transactions with owners of the company:
Share based payment reserve (Note 17(a)) - - 22,126 - 22,126
Dividends:
- Interim for 2020 - - - (2,372,323) (2,372,323)
- Final for 2019 - - - (4,744,646) (4,744,646)
Total transactions with owners of the company - - 22,126 (7,116,969) (7,094,843)
At 30 June 2020 1,581,547 1,691,151 48,310 16,578,125 19,899,133

136 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Consolidated statement of cash flows

Notes At 30 June
2021 2020
Kshs ‘000 Kshs ‘000
Operating activities
Cash generated from operations 34(a) 21,523,733 13,636,327
Interest received 12(a) 91,242 164,873
Interest paid on borrowings (3,141,386) (3,865,182)
Interest paid on lease liabilities 31(a) (89,530) (104,349)
Income tax paid (3,772,288) (6,484,820)
Net cash flows from operating activities 14,611,771 3,346,849

Investing activities
Purchase of property, plant and equipment 20(a) (7,744,506) (7,952,915)
Purchase of intangible assets - software 23(a) (182,354) (163,187)
Purchase of additional interest in a subsidiary 18(b) (6,271,376) (308,147)
Proceeds from disposal of property, plant and equipment - 93,992
Net cash flows from investing activities (14,198,236) (8,330,257)

Financing activities
Repayment of principal portion of lease liabilities 31(a) (482,774) (473,709)
Dividends paid to Company’s shareholders 14 - (7,131,156)
Dividends paid to non-controlling interests (60,610) (2,451,476)
Unclaimed dividend paid - Unclaimed Financial Assets Authority (140,396) -
Proceeds from borrowings 30(a) 23,552,160 23,400,000
Repayment of borrowings 30(a) (19,398,508) (18,716,209)
Movement in treasury shares 17 (5,799) 14,320
Net cash flows from financing activities 3,464,073 (5,358,230)
Increase/(decrease) in cash and cash equivalents 3,877,608 (10,341,638)

Movement in cash and cash equivalents

At start of year 1,729,297 12,468,585
Foreign exchange impact on translation (1,185,884) (397,650)
Increase/(decrease) in the year 3,877,608 (10,341,638)
At end of year 34(b) 4,421,021 1,729,297

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 137

Financial Statements for the year ended 30 June 2021

Company statement of cash flows

At 30 June
Notes 2021 2020
Kshs ‘000 Kshs ‘000
Operating activities
Cash used in operations 34(a) 7,296,773 (6,324,044)
Interest received 12(b) 2,725,585 3,101,187
Interest paid on borrowings (4,583,068) (5,378,960)
Interest paid on lease liabilities 31(b) (2,667) (3,817)
Income tax paid (519,229) (596,072)
Net cash flows from operating activities 4,917,394 (9,201,706)

Investing activities
Purchase of property, plant and equipment 20(b) (70,716) (686,808)
Purchase of intangible assets 23(b) (108,770) (75,988)
Purchase of additional interest in a subsidiary 25 (6,271,376) (995,809)
Property, plant and equipment - transfer to related companies 20(b) 44,712 -
Proceeds from disposal of property and equipment 101,733 696,524
Movement in intercompany funding (3,141,357) (9,276,496)
Dividends received from subsidiaries 2,529,344 13,702,016
Net cash flows from investing activities (6,916,430) 3,363,439

Financing activities
Repayment of principal portion of lease liabilities 31(b) (19,146) (24,170)
Dividends paid to Company’s shareholders 14 - (7,131,156)
Unclaimed dividend paid - Unclaimed Financial Assets Authority (140,396)
Proceeds from borrowings - Long term bank loan 30(b) 22,400,000 23,400,000
Repayment of borrowings 30(b) (19,291,667) (18,615,178)
Net cash flows from financing activities 2,948,791 (2,370,504)
Increase/(decrease) in cash and cash equivalents 949,755 (8,208,771)

Movement in cash and cash equivalents

At start of year 811,596 9,020,367
Increase/(decrease) during the year 949,755 (8,208,771)
At end of year 35(b) 1,761,351 811,596

138 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes

1. General information Items included in the financial statements are measured using the
currency of the primary economic environment in which the entity
East African Breweries Limited is incorporated as a limited liability
operates (the functional currency) except where otherwise indicated.
Company in Kenya under the Kenyan Companies Act and is domiciled
in Kenya. The address of its registered office and principal place of (iv) Use of judgement and estimates
business is as follows:
The preparation of financial statements in conformity with IFRS
East African Breweries Limited requires the use of certain critical accounting estimates. It also requires
Corporate Centre, management to exercise its judgement in the process of applying the
Garden City Business Park, Ruaraka Group’s accounting policies. The areas involving a higher degree of
PO Box 30161 judgement or complexity, or where assumptions and estimates are
00100 Nairobi GPO significant to the financial statements, are disclosed in Note 3.
The consolidated financial statements for the Company as at 30 (v) New and amended standards adopted by the Group
June 2021 and for the year then ended comprise the Company and
The following standards and amendments have been applied by the
the subsidiaries (together referred to as the ‘Group’ and individually
Group for the first time for the financial year beginning 1 July 2020:
as ‘Group entities’). The Group is primarily involved in marketing,
production and distribution of a collection of brands that range from Amendments to IAS 1 and IAS 8: Definition of Material
beer, spirits to adult non-alcoholic drinks.
The IASB has made amendments to IAS 1 Presentation of Financial
The Company’s shares are listed on the Nairobi Securities Exchange, Statements and IAS 8 Accounting Policies, Changes in Accounting
Dar es Salaam Stock Exchange and Uganda Stock Exchange. Estimates and Errors which use a consistent definition of materiality
throughout International Financial Reporting Standards and
For Kenyan Companies Act reporting purposes, the balance sheet is
the Conceptual Framework for Financial Reporting, clarify when
represented by the statement of financial position and the profit or
information is material and incorporate some of the guidance in IAS 1
loss account by the income statement, in these financial statements.
about immaterial information.
2. Summary of significant accounting policies
In particular, the amendments clarify:
The principal accounting policies adopted in the preparation of these
• that the reference to obscuring information addresses situations
financial statements are set out below. These policies have been
in which the effect is similar to omitting or misstating that
consistently applied to all years presented, unless otherwise stated.
information, and that an entity assesses materiality in the context
(a) Basis of preparation of the financial statements as a whole, and
(i) Basis of accounting • the meaning of ‘primary users of general purpose financial
statements’ to whom those financial statements are directed, by
The financial statements have been prepared in accordance with
defining them as ‘existing and potential investors, lenders and other
International Financial Reporting Standards (“IFRS”) and in the manner
creditors’ that must rely on general purpose financial statements
required by the Kenyan Companies Act, 2015. The measurement basis
for much of the financial information they need.
applied is the historical cost basis, except where otherwise stated in
the accounting policies below. The application of the amendments had no material impact on the
consolidated financial statements.
(ii) Going Concern
Amendments to IFRS 3: Definition of a business
The Group’s statement of financial position indicates a net current
liabilities position of Kshs 5,609,779,000 (2020: Kshs 5,076,181,000). As The amended definition of a business requires an acquisition to
Directors, we are satisfied that this is transient in nature as the Group include an input and a substantive process that together significantly
continues to align its capital expenditure with long term funding. The contribute to the ability to create outputs. The definition of the term
Capital Markets Authority has exempted the Group from maintaining a ‘outputs’ is amended to focus on goods and services provided to
current ratio of 1 until 2023. The Group had undrawn funding available customers, generating investment income and other income, and
as at 30 June 2021 of Kshs 11.4 billion (30 June 2020: Kshs 4.1 billion) it excludes returns in the form of lower costs and other economic
as disclosed in Note 30. benefits.
To further satisfy themselves as to the going concern of the Group The amendments will likely result in more acquisitions being
Management have undertaken a detailed funding assessment accounted for as asset acquisitions.
including a debt maturity analysis. Based on the outcome of this
The application of the amendments had no material impact on the
exercise it was concluded that the Group would generate/access
consolidated financial statements.
sufficient funds to meet all its obligations over the next twelve-month
period from the date of the financial statements. Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark
Reform
(iii) Functional and presentation currency
The amendments made to IFRS 7 Financial Instruments: Disclosures,
The financial statements are presented in Kenya Shillings (Kshs)
IFRS 9 Financial Instruments and IAS 39 Financial Instruments:
which is the Company’s functional currency. All financial information
Recognition and Measurement provide certain reliefs in relation to
presented in Kenya Shillings have been rounded to the nearest
interest rate benchmark reforms.
thousand except when otherwise indicated.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 139

Financial Statements for the year ended 30 June 2021

Notes (continued)

2. Summary of significant accounting policies (continued) particularly for entities that previously considered management’s
intentions to determine classification and for some liabilities that
(a) Basis of preparation (continued)
can be converted into equity. They must be applied retrospectively
(v)New and amended standards adopted by the Group in accordance with the normal requirements in IAS 8 Accounting
(continued) Policies, Changes in Accounting Estimates and Errors. In May 2020, the
IASB issued an Exposure Draft proposing to defer the effective date of
The reliefs relate to hedge accounting and have the effect that the
the amendments to 1 January 2023.
reforms should not generally cause hedge accounting to terminate.
However, any hedge ineffectiveness should continue to be recorded in The Directors of the Group do not anticipate that the application of
the income statement. Given the pervasive nature of hedges involving the amendments in the future will have a material impact on the
IBOR-based contracts, the reliefs will affect companies in all industries. consolidated financial statements.
The application of the amendments had no material impact on the Amendments to IAS 16: Property, Plant and Equipment: Proceeds
consolidated financial statements. before intended use
Revised Conceptual Framework for Financial Reporting The amendment to IAS 16 Property, Plant and Equipment prohibits an
entity from deducting from the cost of an item of a property, planet
The IASB has issued a revised Conceptual Framework which will be
and equipment any proceeds received from selling items produced
used in standard-setting decisions with immediate effect. Key changes
while the entity is preparing the asset for its intended use. It also
include:
clarifies that an entity is ‘testing whether the asset is functioning
• increasing the prominence of stewardship in the objective of properly’ when it assesses the technical and physical performance of
financial reporting, the asset. The financial performance of the asset is not relevant to this
assessment.
• reinstating prudence as a component of neutrality,
Entities must disclose separately the amounts of proceeds and costs
• defining a reporting entity, which may be a legal entity, or a portion
relating to items produced that are not an output of the entity’s
of an entity,
ordinary activities
• revising the definitions of an asset and a liability,
The Directors of the Group do not anticipate that the application of
• removing the probability threshold for recognition and adding the amendments in the future will have a material impact on the
guidance on derecognition, consolidated financial statements.
• adding guidance on different measurement basis, and, Amendments to IFRS 3: Reference to the Conceptual Framework
• stating that profit or loss is the primary performance indicator and Minor amendments were made to IFRS 3 Business Combinations to
that, in principle, income and expenses in other comprehensive update the references to the Conceptual Framework for Financial
income should be recycled where this enhances the relevance or Reporting and add an exception for the recognition of liabilities and
faithful representation of the financial statements. contingent liabilities within the scope of IAS 37 Provisions, Contingent
Liabilities and Contingent Assets and Interpretation 21 Levies. The
No changes will be made to any of the current accounting standards. amendments also confirm that contingent assets should not be
However, entities that rely on the Framework in determining their recognised at the acquisition date.
accounting policies for transactions, events or conditions that are
not otherwise dealt with under the accounting standards will need The Directors of the Group do not anticipate that the application of
to apply the revised Framework from 1 January 2020. These entities the amendments in the future will have a material impact on the
will need to consider whether their accounting policies are still consolidated financial statements.
appropriate under the revised Framework.
Amendments to IAS 37: Onerous Contracts – Cost of Fulfilling a
The application of the amendments had no material impact on the Contract
consolidated financial statements.
The amendment to IAS 37 clarifies that the direct costs of fulfilling a
contract include both the incremental costs of fulfilling the contract
and an allocation of other costs directly related to fulfilling contracts.
(vi) Relevant new standards and interpretations not yet Before recognising a separate provision for an onerous contract, the
adopted by the Group entity recognises any impairment loss that has occurred on assets
Amendments to IAS 1: Classification of Liabilities as Current or Non- used in fulfilling the contract
Current The Directors of the Group do not anticipate that the application of
The narrow-scope amendments to IAS 1 Presentation of Financial the amendments in the future will have a material impact on the
Statements clarify that liabilities are classified as either current or non- consolidated financial statements.
current, depending on the rights that exist at the end of the reporting Annual Improvements to IFRS Standards 2018-2020
period. Classification is unaffected by the expectations of the entity or
events after the reporting date (eg.: the receipt of a waver or a breach The Annual Improvements to IFRS Standards 2018-2020 cycle make
of covenant). The amendments also clarify what IAS 1 means when it amendments to the followings standards:
refers to the ‘settlement’ of a liability.
• IFRS 9 Financial Instruments – clarifies which fees should be
The amendments could affect the classification of liabilities, included in the 10% test for derecognition of financial liabilities.

140 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

2. Summary of significant accounting policies (continued) and the non-controlling interests are adjusted to reflect the changes
in their relative interests in the subsidiaries. Any difference between
(a) Basis of preparation (continued)
the amount by which the non-controlling interests are adjusted and
(vi) Relevant new standards and interpretations not yet the fair values of the consideration paid or received is recognised
adopted by the Group (continued) directly in equity and attributed to owners of the Company.
• IFRS 16 Leases – amendment of illustrative example 13 to remove (iv) Balances and transactions eliminated at consolidation
the illustration of payments from the lessor relating to leasehold
Intra-group balances and transactions, and any unrealised income
improvements, to remove any confusion about the treatment of
and expenses arising from intra-group transactions, are eliminated.
lease incentives.
Unrealised losses are eliminated in the same way as unrealised gains,
• IFRS 1 First-time Adoption of International Financial Reporting but only to the extent that there is no evidence of impairment.
Standards – allows entities that have measured their assets and
(c) Revenue recognition
liabilities at carrying amounts recorded in their parent’s books
to also measure any cumulative translation differences using the The Group recognises revenue from the sale of goods and services
amounts reported by the parent. This amendment will also apply in the ordinary course of the Group’s activities. The Group recognises
to associates and joint ventures that have taken the same IFRS 1 revenue at a point in time as and when it satisfies a performance
exemption. obligation by transferring control of a product or service to a customer.
• IAS 41 Agriculture – removal of the requirement for entities to The amount of revenue recognised is the amount the Group expects
exclude cash flows for taxation when measuring fair value under to receive in accordance with the terms of the contract, and excludes
IAS 41. This amendment is intended to align with the requirement amounts collected on behalf of third parties, such as value-added tax
in the standard to discount cash flows on a post-tax basis. (VAT), excises, returns, rebates and discounts and after eliminating
sales within the Group.
The Directors of the Group do not anticipate that the application of
the amendments in the future will have a material impact on the Revenue is recognised as follows:
consolidated financial statements.
(i) Sales of goods are recognised in the period in which the Group
(vii) Early adoption of standards delivers products to the customer, the customer accepts the
products and collectability of the related receivables is reasonably
The Group did not early adopt new or amended standards in the year
assured.
ended 30 June 2021.
(ii) Royalty income is recognised based on agreed rates applied on net
(b) Basis of consolidation
sales value of the related products.
The consolidated financial statements include the results of the
(iii) Management fee is recognised based on actual costs plus an
Company and its subsidiaries. A subsidiary is an entity controlled
agreed mark up.
by East African Breweries Limited. Control is the power to direct
the relevant activities of the subsidiary that significantly affects the (d) Dividend income
subsidiary’s return so as to have rights to the variable return from its
Dividend income is recognised as income in the period in which the
activities.
right to receive the payment is established.
Where the Group has the ability to exercise joint control over an entity
(e) Finance income and costs
but has rights to specified assets and obligations for liabilities of that
entity, the entity is consolidated on the basis of the group’s rights over Finance income comprises interest income and foreign exchange
those assets and liabilities. gains that relate to borrowings and cash and cash equivalents. Interest
income is recognised in profit or loss on a time proportion basis using
(i) Subsidiaries
the effective interest method. Once a financial asset is identified as
Subsidiaries are entities controlled by the Group. The financial credit-impaired, the effective interest rate is applied to the amortised
statements of subsidiaries are included in the consolidated financial cost (net of impairment losses) in subsequent reporting periods.
statements from the date on which control commences until the date
Finance costs comprise interest expense and foreign exchange losses
on which control ceases. Investments in subsidiaries are accounted for
that relate to borrowings and cash and cash equivalents. Interest
at cost in the Company’s financial statements.
expense is recognised in profit or loss using the effective interest
(ii) Non-controlling interest (NCI) method.
NCI are initially measured at their proportionate share of the acquired All other foreign exchange gains and losses are presented in profit or
identifiable net assets at the acquisition date. loss within ‘other income/expenses.
(iii) Changes in the Group’s ownership interests in existing (f) Foreign currency translation
subsidiaries
Foreign currency transactions are translated into the functional
Changes in the Group’s ownership interests in subsidiaries that do not currency of the respective entity using the exchange rates prevailing
result in the Group losing control over the subsidiaries are accounted at the dates of the transactions. Foreign exchange gains and losses
for as equity transactions. The carrying amount of the Group’s interests resulting from the settlement of such transactions and from the

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 141

Financial Statements for the year ended 30 June 2021

Notes (continued)

2. Summary of significant accounting policies (continued) Motor vehicles 4 – 5 years

Returnable packaging 5 – 15 years
(f) Foreign currency translation (continued)
Freehold land and capital work in progress is not depreciated.
translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the profit or loss. Depreciation methods, useful lives and residual values are reassessed
annually at each reporting date and adjusted if appropriate.
Consolidation of Group entities
Gains and losses on disposal of an item of property, plant and
The results and financial position of all Group entities that have a
equipment are determined by comparing the proceeds from disposal
functional currency different from the presentation currency are
with the carrying amount of property, plant and equipment and are
translated into the presentation currency as follows:
recognised net within “other income/expenses” in the profit or loss.
• assets and liabilities for each statement of financial position
(h) Intangible assets
presented are translated at the closing rate at the reporting date;
(i) Computer software
• income and expenses for each statement of profit or loss and
other comprehensive income are translated at average exchange Acquired computer software licences are capitalised on the basis of
rates (unless this average is not a reasonable approximation of the the costs incurred to acquire and bring to use the specific software.
cumulative effect of the rates prevailing on the transaction dates, These costs are amortised over their estimated useful lives of the
in which case income and expenses are translated at actual rates at software from the date that they are available for use. The estimated
the dates of the transactions); and useful life is three to five years.
• all resulting exchange differences are recognised in other (ii) Goodwill
comprehensive income and accumulated in the translation reserve
Goodwill represents the excess of the cost of an acquisition over the
except to the extent that the translation difference is allocated to
fair value of the Group’s share of the net identifiable assets of the
Non-controlling interest (NCI).
acquired subsidiary at the date of acquisition. Goodwill on subsidiaries
On consolidation, exchange differences arising from the translation of is carried at cost less accumulated impairment losses. Goodwill is
the net investment in foreign entities, and of borrowings and other tested annually for impairment. Impairment losses on goodwill are not
currency instruments designated as hedges of such investments, are reversed. Gains and losses on disposal of an entity include the carrying
taken to other comprehensive income. When a foreign operation is amount of goodwill relating to the entity sold. Goodwill is allocated
sold, such exchange differences are recognised in the profit or loss as to cash-generating units for the purpose of impairment testing. The
part of the gain or loss on sale. allocation is made to those cash-generating units that are expected
to benefit from the business combination in which the goodwill arose.
If the Group disposes of only part of its interest in a subsidiary that
includes a foreign operation while retaining control, then the relevant (iii) Brands
proportion of the cumulative amount is reattributed to NCI.
Brands acquired as part of acquisitions of businesses are capitalised
The assets and liabilities of foreign operations, including goodwill as intangible assets if their value can be measured reliably on initial
and fair value adjustments arising on acquisition, are translated into recognition and it is probable that the expected future economic
presentation currency at the closing exchange rates at the reporting benefits that are attributable to the asset will flow to the Group.
date. The income and expenses of foreign operations are translated Brands are considered to have an indefinite economic life because of
into the presentation currency at actual exchange rates at the dates the institutional nature of the brands and the Group’s commitment
of the transactions. to develop and enhance their value. The carrying value of these
intangible assets is reviewed at least annually for impairment and
(g) Property, plant and equipment
adjusted to the recoverable amount if required.
Items of property, plant and equipment are measured at cost, less
(i) Financial instruments
accumulated depreciation and accumulated impairment losses. Costs
include expenditure that is directly attributable to the acquisition of Financial assets and financial liabilities are recognised in the Group’s
the asset. Purchased software that is integral to the functionality of the statement of financial position when, and only when, the Group
related equipment is capitalised as part of that equipment. becomes a party to the contractual provisions of the instrument.
Expenditure on assets under construction is charged to work in All regular way purchases or sales of financial assets are recognised
progress until the asset is brought into use. Subsequent expenditure and derecognised on a trade date basis. Regular way purchases or
is capitalised only when it is probable that future economic benefits sales are purchases or sales of financial assets that require delivery of
of the expenditure will flow to the Group. Ongoing repairs and assets within the time frame established by regulation or convention
maintenance are expensed as incurred. in the marketplace.
Depreciation is calculated on a straight-line basis to write down the Classification
cost of each asset to its residual value over its estimated useful life as
The Group classifies its financial instruments into the following
follows:
categories:
Buildings 25 years or unexpired period of lease if
i) Financial assets that are held within a business model whose
less than 25 years
objective is to hold assets in order to collect contractual cash flows,
Plant, equipment, furniture 5 – 33 years
and for which the contractual terms of the financial asset
and fittings

142 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

2. Summary of significant accounting policies (continued) Interest income, dividend income, and exchange gains and losses on
monetary items are recognised in profit or loss.
(i) Financial instruments (continued)
Derecognition
give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding, are Financial assets are derecognised when the rights to receive cash
classified and measured at amortised cost; flows from the financial asset have expired or have been transferred
and the Group has transferred substantially all risks and rewards of
ii) Financial assets that are held within a business model whose
ownership. A financial liability is derecognised when it is extinguished,
objective is achieved by both collecting contractual cash flows and
cancelled or expires.
selling financial assets, and for which the contractual terms of the
financial asset give rise on specified dates to cash flows that are (j) Offsetting of financial assets and liabilities
solely payments of principal and interest on the principal amount
Financial assets and financial liabilities are offset and the net amount is
outstanding, are classified and measured at fair value through
reported on the statement of financial position when there is a legally
other comprehensive income;
enforceable right to offset the recognised amounts and there is an
iii) All other financial assets are classified and measured at fair value intention to settle on a net basis, or to realize the asset and settle the
through profit or loss. liability simultaneously.
iv) Notwithstanding the above, the Group may:
a) on initial recognition of an equity investment that is not held for (k) Leases
trading, irrevocably elect to classify and measure it at fair value
(i) Leases under which the Group is the lessee
through other comprehensive income.
On the commencement date of each lease (excluding leases with a
b) on initial recognition of a debt instrument, irrevocably designate
term of 12 months or less on commencement and leases for which
it as classified and measured at fair value through profit or loss if
the underlying asset is of low value), the Group recognizes a right-of-
doing so eliminates or significantly reduces a measurement or
use asset and a lease liability.
recognition inconsistency.
The lease liability is measured at the present value of the lease
v) Financial liabilities that are held for trading (including derivatives),
payments that are not paid on that date. The lease payments include
financial guarantee contracts, or commitments to provide a
fixed payments, variable payments that depend on an index or a rate,
loan at a below-market interest rate are classified and measured
amounts expected to be payable under residual value guarantees,
at fair value through profit or loss. The Group may also, on initial
and the exercise price of a purchase option if the Group is reasonably
recognition, irrevocably designate a financial liability as at fair value
certain to exercise that option. The lease payments are discounted
through profit or loss if doing so eliminates or significantly reduces
at the interest rate implicit in the lease. If that rate cannot be readily
a measurement or recognition inconsistency.
determined, the Group’s incremental borrowing rate is used.
vi) All other financial liabilities are classified and measured at amortised
For leases that contain non-lease components, the Group allocates
cost.
the consideration payable to the lease and non-lease components
Financial instruments held during the year were classified as follows: based on their relative stand-alone components.
- Demand and term deposits with banking institutions, trade and The right-of-use asset is initially measured at cost comprising the
other receivables and balances with related parties. These were initial measurement of the lease liability, any lease payments made on
classified as at amortised cost. or before the commencement date, any initial direct costs incurred,
and an estimate of the costs of restoring the underlying asset to the
- Borrowings and trade and other liabilities. These were also classified
condition required under the terms of the lease.
as at amortised cost.
Subsequently the lease liability is measured at amortised cost, subject
Initial measurement
to remeasurement to reflect any reassessment, lease modifications, or
On initial recognition: revised fixed lease payments.
i) Financial assets or financial liabilities classified as fair value through Right-of-use assets are subsequently measured at cost less
profit or loss are measured at fair value. accumulated depreciation and any accumulated impairment losses,
adjusted for any remeasurement of the lease liability. Depreciation
ii) Trade receivables are measured at their transaction price.
is calculated using the straight-line method to write down the
iii) All other categories of financial assets and financial liabilities are cost of each asset to its residual value over its estimated useful life.
measured at the fair value plus or minus transaction costs that are If ownership of the underlying asset is not expected to pass to the
directly attributable to the acquisition or issue of the instrument. Group at the end of the lease term, the estimated useful life would not
exceed the lease term.
Subsequent measurement
For leases with a term, on commencement, of 12 months or less and
Financial assets and financial liabilities after initial recognition are
leases for which the underlying asset is of low value, the total lease
measured either at amortised cost, at fair value through other
payments are recognized in profit or loss on a straight-line basis over
comprehensive income, or at fair value through profit or loss according
the lease period.
to their classification.
The above accounting policy has been applied from 1 July 2019.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 143

Financial Statements for the year ended 30 June 2021

Notes (continued)

2. Summary of significant accounting policies (continued) (ii) Termination benefits

(k) Leases (continued) Termination benefits are recognised as an expense when the Group is
demonstrably committed, without realistic possibility of withdrawal,
(ii) Leases under which the Group is the lessor
to a formal detailed plan to terminate employment before the normal
Leases that transfer substantially all the risks and rewards of ownership retirement date.
of the underlying asset to the lessee are classified as finance leases.
(iii) Short-term employee benefits
All other leases are classified as operating leases. Payments received
under operating leases are recognized as income in the profit and loss Short-term employee benefits are expensed as the related service is
account on a straight-line basis over the lease term. provided. A liability is recognised for the amount expected to be paid
if the Group has a present legal or constructive obligation to pay this
(l) Inventories
amount as a result of past service provided by the employee and the
Inventories are stated at the lower of cost and net realisable value. Cost obligation can be estimated reliably.
is based on the weighted average method and expenditure incurred in
(p) Income tax expense
acquiring the inventories and bringing them to their existing location
and condition. The cost of finished goods and work in progress The tax expense for the year comprises current and deferred income
comprises an appropriate share of production overheads based on tax. Tax is recognised in the profit or loss except to the extent that it
normal operating capacity. Net realisable value is the estimate of relates to items recognised in other comprehensive income or directly
the selling price in the ordinary course of business, less the costs of in equity. In this case, the tax is also recognised in other comprehensive
completion and selling expenses. income or directly in equity, respectively.
(m) Treasury shares Current tax is the amount of tax payable on the taxable profit for the
year determined in accordance with the relevant tax legislation and
Treasury shares are shares in East African Breweries Limited that are
any adjustment to tax payable or receivable in respect of previous
held by the East African Breweries Limited Employee Share Ownership
years. The current tax charge is calculated on the basis of the tax rates
Plan for the purpose of issuing shares under the Group’s share
enacted or substantively enacted at the reporting date.
ownership scheme. Treasury shares are recognised at cost where
cost is determined to be the purchase price of the shares in an open Deferred tax is recognised on temporary differences between the
market (Nairobi Securities Exchange). Shares issued to employees are carrying amounts of assets and liabilities for financial reporting
recognised on a first-in-first-out basis. purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for the following temporary differences: the initial
(n) Share-based payment arrangements
recognition of assets or liabilities in a transaction that is not a business
The Group operates equity-settled share-based compensation plans combination and that affects neither accounting nor taxable profit,
for its employees and executives. and differences relating to investments in subsidiaries to the extent
that it is probable that they will not reverse in the foreseeable future. In
Equity-settled share-based payments to employees are measured
addition, deferred income tax is not recognised for taxable temporary
at the fair value of the equity instruments at the grant date. The
differences arising on the initial recognition of goodwill. Deferred tax
fair value determined at the grant date of the equity-settled share-
is measured using tax rates that are expected to be applied to the
based payments is expensed on a straight-line basis over the vesting
temporary differences when they reverse, based on the laws that have
period, based on the Group’s estimate of equity instruments that will
been enacted or substantively enacted by the reporting date.
eventually vest, with a corresponding increase in equity. At the end of
each reporting period, the Group revises its estimate of the number Deferred tax assets and liabilities are offset if there is a legally
of equity instruments expected to vest. The impact of the revision of enforceable right to offset current tax liabilities and assets, and they
the original estimates, if any, is recognised in the profit or loss such relate to income taxes levied by the same tax authority on the same
that the cumulative expense reflects the revised estimate, with a taxable entity, or on different tax entities, but they intend to settle
corresponding adjustment to share based payment reserve in equity. current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
(o) Employee benefits
A deferred income tax asset is recognised to the extent that it is
(i) Retirement benefits obligations
probable that future taxable profits will be available against which
The Group operates defined contribution retirement benefit schemes the temporary difference can be utilised. Deferred tax assets are
for some of its employees. The assets of all schemes are held in separate reviewed at each reporting date and are reduced to the extent that
trustee administered funds, which are funded by contributions from it is no longer probable that the related tax benefit will be realised.
both the Group and employees. The Group and all its employees also A tax rate reconciliation that reconciles the notional taxation charge
contribute to the National Social Security Funds, which are defined as calculated at the Kenya tax rate, to the actual total tax charge is
contribution schemes. prepared on a materiality basis. As a Group operating in multiple
countries, the actual tax rates applicable to profits in some of countries
The Group’s contributions to the defined contribution schemes are
are different from the Kenya tax rate.
recognised in the profit or loss in the year to which they relate. The
Group has no further obligation once the contributions have been Additional income taxes that arise from the distribution of dividends
paid. are recognised at the same time as the liability to pay the related
dividend.

144 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

2. Summary of significant accounting policies (continued) 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
(q) Dividends
value in use, the estimated future cash flows are discounted to their
Dividends payable on ordinary shares are charged to retained earnings present value using a pre-tax discount rate that reflects current market
in the period in which they are declared. Proposed dividends are not assessments of the time value of money and the risks specific to the
accrued for until ratified in an Annual General Meeting. asset.
(r) Segmental reporting An impairment loss in respect of goodwill is not reversed. For other
assets, an impairment of loss is reversed only to the extent that the
Segment information is presented in respect of the Group’s
asset’s carrying amount does not exceed the carrying amount that
geographical segments, which is the primary format and is based on
would have been determined, net of depreciation and amortisation,
the countries in which the Group operates. The Group has no other
if no impairment loss had been recognised.
distinguishable significant business segments.
(t) Earnings per share
Segment results, assets and liabilities include items directly attributable
to a segment as well as those that can be allocated on a reasonable The Group presents basic and diluted earnings per share (EPS) data for
basis. Inter-segment pricing is determined on an arm’s length basis. its ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted
(s) Impairment
average number of ordinary shares outstanding during the year.
Impairment of financial assets Diluted EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary
The Group recognises a loss allowance for expected credit losses on
shares outstanding for the effects of any dilutive potential ordinary
financial instruments that are measured at amortised cost or at fair
shares.
value through other comprehensive income. The loss allowance is
measured at an amount equal to the lifetime expected credit losses for (u) Borrowing costs
trade receivables and for financial instruments for which: (a) the credit
Borrowing costs consist of interest and other costs that the Group
risk has increased significantly since initial recognition; or (b) there is
incurs in connection with the borrowing of funds. Borrowing costs that
observable evidence of impairment (a credit-impaired financial asset).
are directly attributable to the acquisition, construction or production
If, at the reporting date, the credit risk on a financial asset other than a
of qualifying assets, which are assets that necessarily take a substantial
trade receivable has not increased significantly since initial recognition,
period of time to get ready for their intended use or sale, are capitalised
the loss allowance is measured for that financial instrument at an
as part of the cost of those assets, until such a time as the assets are
amount equal to 12-month expected credit losses. All changes in the
substantially ready for their intended use or sale. Investment income
loss allowance are recognised in profit or loss as impairment gains or
earned on the temporary investment of specific borrowings pending
losses.
their expenditure on qualifying assets is deducted from the borrowing
Lifetime expected credit losses represent the expected credit losses costs eligible for capitalisation.
that result from all possible default events over the expected life of
All other borrowing costs are recognised in profit or loss in the period
a financial instrument. 12-month expected credit losses represent
in which they are incurred.
the portion of lifetime expected credit losses that result from default
events on a financial asset that are possible within 12 months after the (v) Share capital
reporting date.
Ordinary shares are classified as ‘share capital’ in equity. Any premium
Expected credit losses are measured in a way that reflects an unbiased received over and above the par value of the shares is classified as
and probability-weighted amount determined by evaluating a range ‘share premium’ in equity. An equity instrument is any contract that
of possible outcomes, the time value of money, and reasonable and evidences a residual interest in the assets of an entity after deducting
supportable information that is available without undue cost or all of its liabilities. Equity instruments issued by a Group entity are
effort at the reporting date about past events, current conditions and recognised at the proceeds received, net of direct issue costs.
forecasts of future economic conditions.
(w) Cash and cash equivalents
Impairment of non-financial assets
For the purposes of the statement of cash flows, cash and cash
The carrying amounts of the Group’s non-financial assets, other than equivalents comprise cash in hand, bank balances and deposits held
deferred tax assets and inventories, are reviewed at each reporting at call with the banks net of bank overdrafts.
date to determine whether there is any indication of impairment.
(x) Comparatives
If any such indication exists, then the asset’s recoverable amount is
estimated. An impairment loss is recognised if the carrying amount of Where necessary, comparative figures have been adjusted to confirm
an asset or its cash-generating unit exceeds its recoverable amount. with changes in presentation in the current year.
A cash-generating unit is the smallest identifiable asset Group that
3. Critical accounting estimates and judgements
generates cash flows that largely are independent from other assets
and groups. Impairment losses are recognised in profit or loss. Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expected future
Impairment losses recognised in respect of cash-generating units are
events that are believed to be reasonable under the circumstances.
allocated first to reduce the carrying amount of any goodwill allocated
to the units and then to reduce the carrying amount of the other The Group makes estimates and assumptions concerning the future.
assets in the unit on a pro-rata basis. The resulting accounting estimates will, by definition, seldom equal

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 145

Financial Statements for the year ended 30 June 2021

Notes (continued)

3. Critical accounting estimates and judgements (continued) Unless there is an implicit interest rate contained in the lease contract,
the discount rate used to calculate the net present value of the lease
the related actual results. The estimates and assumptions that have
liability is the Group’s incremental borrowing rate. This rate is estimated
a significant risk of causing a material adjustment to the carrying
by the Directors to be the rate which would be paid by the Group to
amounts of assets and liabilities within the next financial year are
purchase a similar asset.
addressed below:
4. Financial risk management objectives and policies
(i) Impairment of goodwill and other indefinite lived intangible
assets (brand) The Group’s activities expose it to a variety of financial risks including
credit risk, liquidity risk and market risks which mainly comprise
Assessment of the recoverable value of an intangible asset, the useful
effects of changes in debt and equity market prices, foreign currency
economic life of an asset, or that an asset has an indefinite life, requires
exchange rates and interest rates. The Group’s overall risk management
management judgement. The Group annually tests whether goodwill
programme focuses on the unpredictability of financial markets and
has suffered any impairment, in accordance with the accounting
seeks to minimise potential adverse effects on its financial performance.
policy stated in Note 2(t). The recoverable amounts of cash-generating
This note presents information about the Group’s exposure to financial
units have been determined based on value-in-use calculations as
risks, the Group’s objectives, policies and processes for measuring
stated in Note 24.
and managing the financial risks. Further quantitative disclosures are
(ii) Calculation of loss allowance on financial assets included throughout these financial statements.
When measuring expected credit loss on financial assets, the Group The Group has established a risk management committee made
uses reasonable and supportable forward-looking information, up of senior management which is responsible for developing and
which is based on assumptions for the future movement of different monitoring the Group’s risk management policies. These policies
economic drivers and how these drivers will affect each other. are established to identify and analyse the risks faced by the Group,
to set appropriate risk limits and controls, and to monitor risks and
Loss given default is an estimate of the loss arising on default. It is
adherence to limits. These risk management policies and systems
based on the difference between the contractual cash flows due and
are reviewed regularly to reflect changes in market conditions and
those that the lender would expect to receive, taking into account
the Group’s activities. The Group has also established a controls and
cash flows from collateral and integral credit enhancements.
compliance function, which carries out regular and adhoc reviews of
(iii) Tax provisions risk management controls and procedures. The results are reported to
senior management.
The Group is subject to income taxes in various jurisdictions. Significant
judgment is required in determining the Group’s provision for taxes. Market risk
There are many transactions and calculations for which the ultimate
i. Foreign currency risk
tax determination is uncertain during the ordinary course of business.
The Group recognises liabilities for anticipated tax audit issues based Foreign currency risk arises on sales, purchases, borrowings and other
on estimates of whether additional taxes will be due. Where the final monetary balances denominated in currencies other than Kenya
tax outcome of these matters is different from the amounts that were Shillings. Management’s policy to manage foreign exchange risk is
initially recorded, such differences will impact the tax provisions in to actively manage the foreign currency denominated procurement
the period in which such determination is made. Disclosures on contracts. The Group also enters into short term cash flow hedge
contingent liabilities with respect to tax are included in Note 32. contracts using available cash balance.
(iv) Property, plant and equipment In addition, the Group manages the foreign currency exposure on
foreign denominated borrowings through foreign exchange forward
Critical estimates are made by the Directors in determining useful
contracts.
lives for property, plant and equipment. The rates used are set out in
Note 2(g) above. Directors also apply estimates in determining the A 5 percent strengthening of the Kenya shilling against the following
existence of returnable packaging materials. currencies at 30 June 2021 would have increased/(decreased) profit
for the year by the amounts shown below. This analysis assumes that
(v) Lease liabilities
all other variables, in particular interest rates, remains constant. The
In order to make a judgement to determine the term of the lease and analysis was performed on the same basis for 2020.
the corresponding lease liability, the Directors consider any options
regarding extension or termination of the lease contract which may
be available and whether it is probable that such options will be
exercised.

146 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

4. Financial risk management objectives and policies (continued)

Market risk (continued)
i. Foreign currency risk (continued)

Group Profit or loss

At 30 June 2021 2020
Kshs’000 Kshs’000
EUR Euro 61,659 (35,510)
GBP Sterling Pound (30,491) 18,137
RWF Rwandan Franc 8,327 9,478
TZS Tanzania Shillings 3,661 2,437
UGX Uganda Shillings 52,751 51,284
USD US Dollar (57,597) (41,801)
ZAR South African Rand (1,847) 4,664
36,463 8,689

Company Profit or loss

At 30 June 2021 2020
Kshs’000 Kshs’000
EUR Euro 123 (676)
GBP Pound Sterling 45,952 52,131
SSP South Sudanese Pound - 2,680
TZS Tanzanian Shilling 3,714 -
UGX Ugandan Shilling 56,533 53,797
USD US Dollar 1,848 1,829
ZAR South African Rand 41 310
108,211 110,071

ii. Price risk

The Group does not hold any financial instruments subject to price risk.

iii. Interest rate risk

The Group’s interest-bearing financial instruments include bank loans, bank overdrafts and related party borrowings. These are at various rates,
and they are therefore exposed to cash flow interest rate risk. The Group regularly monitors financing options available to ensure optimum
interest rates are obtained.

As at 30 June 2021, an increase/decrease of 1 percentage point would have resulted in a decrease/increase in profit for the year of Kshs 32,583,336
(2020: Kshs 38,260,910), mainly as a result of higher/lower interest charges on variable rate borrowings.

Credit risk
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Credit risk arises
from bank balances (including deposits with banks and financial institutions), derivative financial instruments, as well as credit exposures to
customers, including outstanding trade and other receivables, financial guarantees and committed transactions.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 147

Financial Statements for the year ended 30 June 2021

Notes (continued)

4. Financial risk management objectives and policies (continued)

Credit risk (continued)
Maximum exposure to credit risk
The table below represents the Group’s maximum exposure to credit risk at the end of the reporting period excluding the impact of any
collateral held or other credit enhancements:

2021 2020
Kshs 000 Kshs 000
(a) Group
Trade receivables (Note 28(a)) 7,762,422 4,895,259
Other receivables (Note 28(a)) 6,299,109 1,600,375
Receivables from related companies (Note 35(a)) 161,355 299,857
Bank balances (Note 34(b)) 5,611,910 5,661,635
19,834,796 12,457,126

(b) Company
Long-term receivables from subsidiaries (Note 35(b)) 31,036,117 27,894,760
Receivables from related companies (Note 35(b)) 3,061,335 1,430,603
Other receivables (Note 28(b)) 267,762 655,103
Bank balances (Note 34(b)) 1,761,351 3,616,403
36,126,565 33,596,869

Credit risk management policy

The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.
The Group’s exposure and the credit rating of its counterparties are continuously monitored, and the aggregate value of transactions concluded
is spread amongst approved counterparties.
Credit risk on deposits with banking institutions is managed by dealing with institutions with good credit ratings.
Trade and other receivables exposures are managed locally in the operating units where they arise, and credit limits are set as deemed appropriate
for the customer. The operating units analyse credit risk for each new customer before standard payment and delivery terms are offered, taking
into account its financial position, past experience and other factors. Individual risk limits are set based on internal ratings. The utilisation of credit
limits is monitored regularly. In addition, the Group manages credit risk by requiring the customers to provide financial guarantees.
The Group does not have any significant concentrations of credit risk with respect to trade and other receivables as the Group has a large
number of customers which are geographically dispersed. The credit risk associated with receivables is minimal and the allowance expected
credit losses that the Group has recognised in the financial statements is considered adequate to cover any potentially irrecoverable amounts.

148 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

4. Financial risk management objectives and policies (continued)

Credit risk (continued)
Impairment of financial assets
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit losses. The expected credit
losses on trade receivables are estimated using a provision matrix by reference to past default experience of the customer and an analysis of
the customer’s current financial position, adjusted for factors that are specific to the customers, general economic conditions in which the
customers operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

The table below reflects the trade and other receivables, together with the provision for expected credit losses:

(a) Group
2021 2020
Kshs’000 Kshs’000
Not due 5,766,007 907,214
Past due but not impaired:
-by up to 30 days 4,660,853 2,960,205
-by 31 to 120 days 437,178 1,362,379
-over 121 days 2,158,842 726,112
Trade and other receivables 13,022,880 5,955,910

Receivables determined to be impaired:

Carrying amount before provision for expected credit losses 2,038,200 1,511,581
Provision for expected credit losses (2,038,200) (1,511,581)
Net carrying amount 13,022,800 5,955,910

(b) Company
2021 2020
Kshs’000 Kshs’000
Not due 3,219,724 1,795,162
Past due but not impaired:
- by up to 30 days 62,949 290,521
- by 31 to 120 days 2,492 23
- by 121 days and above 50,218 -
Trade and other receivables 3,335,383 2,085,706

Receivables determined to be impaired:

Carrying amount before provision for expected credit losses - -
Provision for expected credit losses - -
Net carrying amount 3,335,383 2,085,706

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of
recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual
payments for a period of greater than 365 days past due.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 149

Financial Statements for the year ended 30 June 2021

Notes (continued)

4. Financial risk management objectives and policies (continued)

Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Prudent liquidity risk management
includes maintaining sufficient cash balances and ensuring the availability of funding from an adequate amount of committed credit facilities.
Due to the dynamic nature of the underlying businesses, the Group maintains flexibility in funding by maintaining availability under committed
credit lines.
Management performs cash flow forecasting and monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient
cash to meet its operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that
the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. The Group’s approach when
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date
to the contractual maturity date. The amounts are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying
balances as the impact of discounting is not significant.

At 30 June 2021:
Group
Less than 1 Between 1 Between 2 Over 5
Current year and 2 years and 5 years years Total
Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000
Borrowings - 10,642,114 17,861,128 13,835,982 12,887,562 55,226,786
Lease liabilities - 460,651 319,839 1,565,244 - 2,345,734
Trade and other payables 8,572,682 21,971,036 - - - 30,543,718
Bank overdraft - 1,190,889 - - - 1,190,889
Dividend payable 673,463 - - - - 673,463
9,246,145 34,264,690 18,180,967 15,401,226 12,887,562 89,980,589

Company

Less than 1 Between 1 Between 2 Over 5

Current year and 2 years and 5 years years Total

Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000

Borrowings - 10,502,702 17,721,717 12,294,234 12,887,562 53,406,215
Lease liabilities - 8,285 4,208 1,425 - 13,918
Trade and other payables - 19,320,605 - - - 19,320,605
Bank overdraft - - - - - -
Dividend payable 673,463 - - - - 673,463
673,463 29,831,592 17,725,925 12,295,659 12,887,562 73,414,201

150 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

4. Financial risk management objectives and policies (continued)

Liquidity risk (continued)

At 30 June 2020:
Group
Less than 1 Between 1 Between 2 Over 5
Current year and 2 years and 5 years years Total
Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000

Borrowings 855,831 2,673,747 9,915,825 20,355,875 12,350,000 46,151,278

Lease liabilities 24,259 463,903 423,409 472,015 323,866 1,707,452
Trade and other payables 1,635,144 20,095,939 - - - 21,731,083
Bank overdraft - 3,932,338 - - - 3,932,338
Dividend payable 815,661 - - - - 815,661
3,330,895 27,165,927 10,339,234 20,827,890 12,673,866 74,337,812

Company

Less than 1 Between 1 Between 2 Over 5

Current year and 2 years and 5 years years Total
Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000
Borrowings 855,831 2,567,494 9,915,825 20,355,875 12,350,000 46,045,025
Lease liabilities 3,631 13,770 9,653 1,333 - 28,387
Trade and other payables - 12,674,504 - - - 12,674,504
Bank overdraft - 2,804,807 - - - 2,804,807
Dividend payable 815,661 - - - - 815,661
1,675,123 18,060,575 9,925,478 20,357,208 12,350,000 62,368,384

Capital risk management

The Group is committed to enhancing shareholder value in the long term, both by investing in the businesses and brands so as to deliver
continued improvement in the return from those investments and by managing the capital structure. 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. The Group’s objectives
when managing capital are:
• To ensure that the Company and the Group will be able to continue as going concerns while maximising the return to stakeholders through
the optimisation of the debt and equity balance.
• To maintain a strong capital base to support the current and future development needs of the business.
In the management of the capital structure, the Group focuses on the net borrowings to earnings before interest, taxes, depreciation, and
amortization (EBITDA) leverage. The Group targets a net borrowings to EBITDA leverage of 1.0 to 1.5 times. The Group regularly reviews the net
borrowings to EBITDA leverage to ensure that it is within the set limits.
COVID-19 pandemic continued to present significant challenges for our business. This was characterized by starting the financial year under
government imposed lockdown or restrictions with a partial re-opening of bars in Kenya in quarter one of the financial year and closing the
financial year in yet another lockdown in Uganda and limited bar operating hours in Kenya. The Group’s brands, financial stability, and resilience
in the face of adversity were critical factors that helped the business navigate this period which demonstrates a recovery in performance. As a
result net revenue increased by 15% compared compared to prior year, driven by broad based growth across all markets. EBITDA increased by
3% resulting from the impact of one-off tax provisions. The business remained heavily leveraged resulting from the one off cash requirements
for example the purchase of additional 30% stake in its subsidiary, Serengeti Breweries Limited for Kshs 6.3 billion in order to tap into more
returns in the future. This came at the time the COVID-19 impact was at its peak. The Directors believe that the financial impact of COVID-19 on
the Group’s and Company’s operations is temporary in nature and they remain optimistic of the business prospects for the future as the global
economy recovers from this crisis.
The Group is not subject to externally imposed capital requirements.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 151

Financial Statements for the year ended 30 June 2021

Notes (continued)

4. Financial risk management objectives and policies (continued)

Capital risk management (continued)

The Group reported net borrowings to EBITDA leverage reflected in the table below:

2021 2020
Kshs’000 Kshs’000
Net borrowings:
Total borrowings (Note 30) 46,351,480 44,938,591
Lease liabilities (Note 31) 1,456,603 1,611,106
Less: cash and bank balances (Note 34(b)) (5,611,910) (5,661,635)
Net debt 42,196,173 40,888,062

EBITDA
Profit before tax 10,858,033 10,655,259
Adjusted for:
Net finance costs 3,948,739 3,826,091
Depreciation and amortisation 5,293,444 4,985,669
Total EBITDA 20,100,216 19,467,019
Net Debt to EBITDA x2.10 x2.10

Fair value measurement

Fair value measurements of financial instruments are presented through the use of a three-level fair value hierarchy that prioritizes the valuation
techniques used in fair value calculations. The Group specifies a hierarchy of valuation techniques based on whether the inputs to those valuation
techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources while unobservable
inputs reflect the Group’s market assumptions.
The different levels in the fair value hierarchy have been defined as follows:
i) Level 1 fair value measurements are derived from quoted prices (unadjusted) in active trading markets for identical assets or liabilities. This
level includes listed debt and equity instruments traded mainly on the Nairobi Securities Exchange (“NSE”).
ii) Level 2 fair value measurements are derived from inputs other than quoted prices that are observable for the asset or liability, either directly
(i.e. as a price) or indirectly (i.e. derived from prices).
iii) Level 3 fair value measurements are derived from valuation techniques that include inputs that are not based on observable market data
(unobservable inputs).
The Group maintains policies and procedures to value instruments using the most relevant data available. If multiple inputs that fall into different
levels of the hierarchy are used in the valuation of an instrument, the instrument is categorised on the basis of the most subjective input.

152 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

4. Financial risk management objectives and policies (continued)

Fair value measurement (continued)

Foreign currency forward contracts are valued using discounted cash flows technique that incorporate the prevailing market rates. Under
this technique, future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the
reporting period), discounted at a rate that reflects the credit risk of the counterparties.
As significant inputs to the valuation are observable in active markets, these instruments are categorized as level 2 in the hierarchy. Other
investments are carried at cost as there is no suitable basis for its valuation and are therefore categorized as level 3 in the hierarchy.
The following table presents the Group and Company’s financial assets and liabilities that are measured at fair value at 30 June 2021.

Level 1 Level 2 Level 3 Total

Kshs’000 Kshs’000 Kshs’000 Kshs’000

Financial assets at fair value through profit or loss:

Other financial assets - - 10,000 10,000
Net assets at fair value through profit or loss - - 10,000 10,000

The following table presents the Group and Company’s financial assets and liabilities that are measured at fair value at 30 June 2020.

Level 1 Level 2 Level 3 Total

Kshs’000 Kshs’000 Kshs’000 Kshs’000

Financial assets at fair value through profit or loss:

Other financial assets - - 10,000 10,000
Net assets at fair value through profit or loss - - 10,000 10,000

There were no transfers between levels during the years ended 30 June 2021 and 30 June 2020.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 153

154
Notes (continued)

5. Operating segments
Directors have determined the operating segments based on the reports reviewed by the Group Executive Committee that are used to make strategic decisions. The Group Executive
Committee includes the Group Managing Director and the Group Chief Financial Officer.
The Group Executive Committee considers the business from a geographical perspective. Geographically, the Group Executive Committee considers the performance of the business in
Kenya, Uganda and Tanzania. Exports to South Sudan, Rwanda, Burundi and the Great Lakes Region are recognised in the country of origin.
The reportable operating segments derive their revenue primarily from brewing, marketing and selling of drinks, malt and barley. The Group Executive Committee assesses the perfor-
mance of the operating segments based on a measure of net sales value.
The segmental information provided to the Group Executive Committee is as follows:

Kenya Uganda Tanzania Eliminations Consolidated

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
External sales 56,849,012 51,518,731 16,021,240 12,047,155 13,091,563 11,350,373 - - 85,961,815 74,916,259
Inter segment sales 4,521,313 3,959,299 63,250 37,849 4,587 - (4,589,150) (3,997,148) - -
Total sales 61,370,325 55,478,030 16,084,490 12,085,004 13,096,150 11,350,373 (4,589,150) (3,997,148) 85,961,815 74,916,259
Financial Statements for the year ended 30 June 2021
 Notes (continued)

5. Operating segments (continued)

Reportable segments assets and liabilities agree to the consolidated assets as follows:

Kenya Uganda Tanzania Eliminations Consolidated

2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
Segment non-current assets 90,210,157 83,298,222 11,306,820 9,183,143 10,535,754 9,888,947 (45,879,151) (39,680,326) 66,024,480 62,689,987
Total segment assets 115,994,551 103,812,646 18,243,181 12,653,222 15,773,097 14,249,582 (48,982,531) (42,056,984) 99,367,646 88,658,466
Segment liabilities 71,363,823 65,225,437 14,691,438 8,974,295 5,742,714 5,225,182 (5,706,289) (4,759,777) 84,515,216 74,665,137
Capital expenditure 3,693,510 4,595,691 2,685,493 1,922,509 1,547,857 1,597,902 - - 7,926,860 8,116,102
Depreciation and amortization 3,513,610 3,350,911 891,700 846,968 888,134 787,790 - - 5,293,444 4,985,669

Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one year. Segment revenue is based on the
geographical location of both customers and assets. The revenue from external parties reported to the Group Executive Committee is measured in a manner consistent with that in the
statement of profit or loss. There is no reliance on individually significant customers by the Group. The amounts provided to the Group Executive Committee in respect to total assets and
total liabilities are measured in a manner consistent with that of the statement of financial position.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

Financial Statements for the year ended 30 June 2021

155
Financial Statements for the year ended 30 June 2021

Notes (continued)

6. Revenue from contracts with customers

a) Group

2021 2020
Kshs ‘000 Kshs ‘000

Gross sales 152,572,477 133,351,955

Indirect taxes (66,610,662) (58,435,696)
85,961,815 74,916,259

(b) Company
Management fees 913,784 1,212,836
Royalties 829,987 806,328
1,743,771 2,019,164

7. Cost of sales

(a) Group

2021 2020
Kshs ‘000 Kshs ‘000

Raw materials and consumables 24,930,181 20,195,033

Distribution and warehousing 7,894,835 6,375,413
Maintenance and other costs 7,845,567 7,872,189
Staff costs 3,617,615 3,590,529
Depreciation and amortization 4,259,924 3,863,065
48,548,122 41,896,229

156 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

8. Administrative expenses

(a) Group

2021 2020
Kshs ‘000 Kshs ‘000

Staff costs 6,734,013 6,378,316

Office supplies and other costs 1,425,264 1,077,330
Depreciation and amortisation 1,033,520 916,048
Travelling and entertainment 127,316 193,546
9,320,113 8,565,240

(b) Company
Staff costs 1,430,060 1,142,287
Office supplies and other costs 21,024 145,730
Depreciation and amortisation 110,329 152,852
Travelling and entertainment 7,186 52,640
1,568,599 1,493,509

9. Other (expenses)/income

(a) Group

2021 2020
Other income Kshs ‘000 Kshs ‘000
Sundry income 44,007 144,000
44,007 144,000

Other expenses
Indirect tax expenses (*) 3,255,764 1,299,439
Expected credit losses on trade receivables (Note 28(a)) 583,279 660,920
Transactional foreign exchange losses 1,218,413 195,143
Write-down of inventories - 324,081
Loss on disposal of property, plant and equipment - 68,390
Sundry expenses 911,240 978,838
5,968,696 3,526,811
(5,924,689) (3,382,811)

(*) Indirect tax expenses are expenses associated with irrecoverable VAT, irrecoverable withholding tax and other tax provisions.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 157

Financial Statements for the year ended 30 June 2021

Notes (continued)

9. Other income/(expenses) (continued)

(b) Company

2021 2020
Kshs ‘000 Kshs ‘000
Other income
Sundry income 1,711,290 -
1,711,290 -

Other expenses
Indirect expenses 222,478 -
Net transactional foreign exchange losses 58,857 24,451
Irrecoverable withholding tax 94,549 122,523
Loss on disposal of equipment - 9,568
Sundry expenses 209,966 785,981
585,850 942,523
1,125,440 (942,523)

(*) Indirect tax expenses are expenses associated with irrecoverable VAT, irrecoverable withholding tax and other tax provisions.

10. Profit before income tax

(a) Group

The following items have been charged in arriving at the profit before tax
2021 2020
Kshs ‘000 Kshs ‘000
Inventories expensed (Note 27) 24,930,181 20,195,033
Employee benefits expense (Note 11(a)) 10,024,254 9,968,845
Depreciation on property, plant and equipment (Note 20(a)) 4,640,708 4,265,062
Depreciation of right-of-use assets (Note 21) 458,680 509,680
Amortisation of intangible assets - software (Note 23(a)) 194,056 210,927
Auditor’s remuneration 37,247 36,158

(b) Company

2021 2020
Kshs ‘000 Kshs ‘000
Employee benefits expense (Note 11(b)) 1,159,656 1,413,372
Depreciation on property and equipment (Note 20(b)) 30,120 51,588
Depreciation of right-of-use assets (Note 21) 17,239 26,099
Amortisation of intangible assets - software (Note 23(b)) 37,517 78,947
Auditor's remuneration 6,623 5,746

158 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

11. Employee benefits expense

a) Group
The following items are included within employee benefits expense:

2021 2020
Kshs ‘000 Kshs ‘000
Salaries and wages 6,902,877 6,677,908
Defined contribution scheme 460,769 482,734
National Social Security Fund 146,892 127,338
Share based payments 25,166 22,126
Employee share ownership plan of the parent company(*) 83,022 63,980
Other staff costs 2,405,528 2,594,759
10,024,254 9,968,845

The average number of employees during the year was as follows:

2021 2020
Production 818 772
Sales and distribution 404 392
Management and administration 278 349
1,500 1,513

(b) Company

The following items are included within employee benefits expense:

2021 2020
Kshs ‘000 Kshs ‘000
Salaries and wages 728,561 681,703
Defined contribution scheme 65,414 101,930
National Social Security Fund (8,044) 23,430
Share based payments 25,166 22,126
Employee share ownership plan of the parent company(*) 48,797 48,807
Other staff costs 299,762 535,376
1,159,656 1,413,372

The average number of employees during the year was as follows:

2021 2020
Management and administration 85 148
85 148

(*) Some of the senior executives of the Group participate in the share ownership schemes linked to the share price of Diageo plc shares and
administered by Diageo plc. The schemes are of various categories. The costs associated with these schemes are recharged to the Company and
accounted for as part of staff costs.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 159

Financial Statements for the year ended 30 June 2021

Notes (continued)

12. Finance income/(expenses)

(a) Group

2021 2020
Kshs ‘000 Kshs ‘000
Finance income
Interest income 91,242 164,873
91,242 164,873
Finance costs
Interest expense on borrowings (3,950,158) (3,817,504)
Interest expense on lease liabilities (89,530) (104,349)
Other finance costs (293) (69,111)
(4,039,981) (3,990,964)

(b) Company
2021 2020
Kshs ‘000 Kshs ‘000
Finance income
Interest income 3,210,164 3,101,187
3,210,164 3,101,187
Finance costs
Interest expense on borrowings (4,442,498) (5,489,497)
Interest expense on lease liabilities (2,667) (3,817)
Other finance costs - (67,173)
(4,445,165) (5,560,487)

13. Income tax expense

(a) Group
The income tax expense has been calculated using income tax rate of 27.5% as at 30 June 2021 (2020: 25%). The applicable rate changed from
25% to 30% during the year following the enactment of the Tax Laws (Amendment) Act, 2020 on 24 December 2020 in Kenya. In line with
amendments, for Group entities incorporated in Kenya, the applied tax rate was 25% for the first half of the year and 30% for the second half of
the year.

2021 2020
Kshs ‘000 Kshs ‘000
Income tax expense
Current income tax:
Current year charge 3,883,464 3,864,468
(Over)/under provision of tax in prior years (166,702) 285,123
Current income tax charge 3,716,762 4,149,591

Deferred income tax:

Current year (credit)/charge (565,636) 267,463
Impact of change in tax rates 670,823 (799,089)
Under provision in prior years 74,144 16,379
Deferred income tax charge 179,331 (515,247)
Total income tax expense 3,896,093 3,634,344

160 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

13. Income tax expense (continued)

(a) Group (continued)

The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the statutory income tax rate as
follows:

2021 2020
Kshs ‘000 Kshs ‘000
Profit before income tax 10,858,033 10,655,259
Tax calculated at the statutory income tax rate of 27.5% (2020 - 25%) 2,985,959 2,663,813

Tax effects of:

- Expenses not deductible for tax purposes 803,355 1,321,132
- Effect of different tax rates of foreign subsidiaries 74,254 146,984
- Tax losses previously not recognised (521,990) -
- Impact of change in tax rates 647,072 (799,089)
(Over)/under provision of current tax in prior years (166,701) 285,123
(Over)/under provision of deferred tax in prior years 74,144 16,379
Income tax expense 3,896,093 3,634,344

(b) Company

2021 2020
Income tax expense Kshs ‘000 Kshs ‘000
Current income tax:
Current year charge 171,035 221,214
(Over)/under provision of tax in prior years (139,606) 333,825
Current income tax expense 31,429 555,039

Deferred income tax:

Current year credit (274,173) (35,194)
Impact of change in tax rates (94,576) 81,468
(Over)/under provision in prior years (30,347) 18,881
Deferred income tax charge (Note 19(b)) (399,096) 65,155
Total tax (credit)/expense (367,667) 620,194

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 161

Financial Statements for the year ended 30 June 2021

Notes (continued)

13. Income tax expense (continued)

(b) Company (continued)

The tax on the Company’s profit before income tax differs from the theoretical amount that would arise using the statutory income tax rate as
follows:

2021 2020
Kshs ‘000 Kshs ‘000
Profit before income tax 2,594,955 10,681,127
Tax calculated at the statutory income tax rate of 27.5% (2020 - 25%) 713,613 2,670,282

Tax effects of:

- Non-taxable income (695,570) (4,164,621)
- Expenses not deductible for tax purposes 423,656 1,680,359
- Tax losses previously not recognised (521,990) -
- Impact of changes in tax rates (117,423) 81,468
(Over)/under provision of deferred income tax in prior year (30,347) 18,881
(Over)/under provision of current income tax in prior year (139,606) 333,825
Income tax (credit)/expense (367,667) 620,194

14. Dividends

The directors do not recommend a dividend for the year ended 30 June 2021 in recognition of the need to conserve cash in view of the
continued volatility occasioned by the COVID-19 pandemic and the impact on our industry (2020: total dividend of Kshs 3 per share amounting
to Kshs 2,372,323,000).

Payment of dividends is subject to withholding tax at a rate of 0%, 5% and 10% depending on the residence and the percentage shareholding
of the respective shareholders.

15. Earnings per share

Basic and diluted earnings per share

The calculation of basic earnings per share at 30 June 2021 was based on profit attributable to ordinary shareholders of Kshs 4,354,228,000 (2020:
Kshs 4,086,477,000) and a weighted average number of ordinary shares outstanding during the year ended 30 June 2020 of 790,774,356 (2020:
Kshs 790,774,356). The basic and diluted earnings per share are the same as there is no dilutive effect.

2021 2020
Kshs ‘000 Kshs ‘000
Profit attributable to ordinary shareholders 4,354,228 4,086,477
Weighted average number of ordinary shares
Issued and paid shares (Note 16) 790,774,356 790,774,356
Basic and diluted earnings per share (Kshs per share) 5.51 5.17

162 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

16. Share capital

Group and Company Number of Ordinary Share

shares shares premium
Kshs’000 Kshs’000
Issued and fully paid
Balance as at 1 July 2019, 30 June 2020 and 30 June 2021 790,774,356 1,581,547 1,691,151

The total authorised number of ordinary shares is 1,000,000,000 with a par value of Kshs 2.00 per share.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general
meetings of the Company. All shares rank equally with regard to the Company’s residual assets.

17. Other reserves

(a) Employee share based payment reserves
The Company operates three equity settled employee share ownership plans (ESOPs) as follows:
a) Executive Share Option Plan (ESOP) – Under the plan, an employee is given an option to buy units at a future date but at a fixed price,
which is set at the time when the option is granted. The vesting period for the shares is three years after which an employee can exercise the
option within seven years. There are no performance conditions attached to this share plan.
b) Restricted Share Units (RSU) – Effective financial year 2020, the Group introduced RSU. RSU are shares offered for free i.e. at no subscription
price as at grant date. The vesting period for the shares is three years after which an employee can exercise the option within seven years.
There are no performance conditions attached to this share plan.
c) Employees Share Save Scheme (ESSS) – This plan enables the eligible employee to save a fixed amount of money over a three-year
period. If an employee joins the plan, he or she is given an option to buy units at a future date at a fixed price set at the grant date. The grant
price is fixed at 80% of the market price at grant date. The vesting period for the shares is three years after which an employee can exercise
the option within seven years. There are no performance conditions attached to this share plan.
The reserves that arise from employee share based payments are as follows:
(i) Treasury shares reserve
Treasury shares reserve represent the cost of the shares held by the Company’s Employee Share Ownership Plan at the end of year. The movement
in the treasury shares reserve in the year is as follows:

30 June 2021 30 June 2020

Number of Kshs’000 Number of Kshs’000
shares shares
At start of year 2,815,644 594,677 2,915,194 608,997
Movement in the year:
Transer of shares 40,326 6,765 - -
Issue of shares upon exercise of options (6,714) (966) (99,550) (14,320)
Total movement in the year 33,612 5,799 (99,550) (14,320)
At end of year 2,849,256 600,476 2,815,644 594,677

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 163

Financial Statements for the year ended 30 June 2021

Notes (continued)

17. Other reserves (continued)

(a) Employee share based payment reserves (continued)

(ii) Share based payment reserve

The share based payment reserve represents the charge to the profit or loss account in respect of share options granted to employees. The
allocated shares for the employee share based payments are held by the East African Breweries Employee Share Ownership Plan.
Share based payments are measured at fair value at the grant date, which is expensed over the period of vesting. The fair value of each option
granted is estimated at the date of grant using Black Scholes option pricing model. The assumptions supporting inputs into the model for
options granted during the period are as follows:

2020 series 2019 series 2018 series

Grant date share price n/a 197 187
Exercise price
-ESOP n/a 197 187
-RSU n/a
-ESSS n/a 158 150
Expected volatility n/a 46.20% 20.01%
Dividend yield n/a 5.2% 3.6%
Forfeiture rate n/a 3.3% 3.9%
Option life n/a 5 years 5 years

During the year ended 30 June 2021, no share options were granted to the employees.
The assumptions above were determined based on the historical trends.
Share based payment reserves are not distributable.
(b) Currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.
Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional currency to the Group’s
presentation currency (Kenya shillings) are recognised directly in other comprehensive income and accumulated in the foreign currency transla-
tion reserve. Exchange differences previously accumulated in the foreign currency translation reserve are reclassified to profit or loss on disposal
or partial disposal of a foreign operation. Translation reserves are not distributable.

164 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

18. Non-controlling interests

(a) Subsidiaries with material non-controlling interests

The following table summarises the information relating to the Group’s subsidiaries that have material non-controlling interests.

At 30 June 2021
Serengeti
UDV (Kenya) Breweries Other
Limited Limited subsidiaries Total
Kshs’000 Kshs’000 Kshs’000 Kshs’000
Non-controlling interest percentage 53.68% 7.5% 1% - 1.8%
Non-current assets 2,322,459 11,018,638 11,299,287
Currents assets 19,218,002 5,183,871 6,750,324
Non-current liabilities (1,147,340) (892,337) (4,451,336)
Current liabilities (5,865,229) (4,557,808) (10,140,296)
Net assets 14,527,892 10,752,364 3,457,979
Carrying amount of non-controlling interest 7,798,572 806,427 62,238 8,667,237

Net sales 21,402,754 13,091,482 16,062,588

Profit after tax 4,488,268 1,578,809 (135,151)
Total comprehensive income 4,488,268 1,578,809 (135,151)
In respect of non-controlling interest 2,409,302 200,842 (2,432) 2,607,712

Cash generated from

Operating activities 1,453,751 2,450,960 3,647,365
Cash used in investment activities (332,018) (1,153,554) (2,010,843)
Cash used in financing activities (10,516) (648,547) 451,057
Net increase in cash and cash equivalents 1,111,217 648,859 2,087,579

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 165

Financial Statements for the year ended 30 June 2021

Notes (continued)

18. Non-controlling interests (continued)

(a) Subsidiaries with material non-controlling interests (continued)

At 30 June 2020
Serengeti
UDV (Kenya) Breweries Other
Limited Limited subsidiaries Total
Non-controlling interest percentage 53.68% 22.5% 1% - 1.8%
Non-current assets 2,184,421 10,368,058 9,175,451
Currents assets 11,709,862 3,794,185 3,955,818
Non-current liabilities (1,267,788) (561,803) (3,542,018)
Current liabilities (2,584,787) (3,773,428) (5,978,850)
Net assets 10,041,708 9,827,012 3,610,401
Carrying amount of non-controlling interest 5,390,389 2,211,078 70,858 7,672,325

Net sales 17,458,879 11,350,372 12,064,486

Profit after tax 4,945,960 1,204,711 466,212
Total profit for the year 4,945,960 1,204,711 466,212
In respect of non-controlling interest 2,654,991 271,060 8,387 2,934,438

Cash generated from operating activities 4,895,823 3,019,565 1,226,973

Cash used in investment activities (263,516) (1,526,048) (1,954,158)
Cash used in financing activities (2,935,623) (1,298,730) (28,325)
Net increase in cash and cash equivalents 1,696,684 194,787 (755,510)

(b) Transactions with non- controlling interests

In February 2020, the Company entered into an agreement to purchase an additional 30% of the legal shareholding in Serengeti Breweries Limit-
ed (SBL) from the non-controlling shareholders. As a result of the transaction, the effective economic interest in SBL has increased from 77.50% to
92.50%, while the legal shareholding has increased from 55% to 85%. The transaction was completed with an effective date of 31 October 2020.

The consideration for the shares was Kshs 8,303 million. Out of this consideration, Kshs 6,271 million was paid in cash and the additional Kshs
2,032 million was utilised to repay the outstanding loan receivables from the non-controlling interest arising from the capital restructuring in
2018.

Financial impact of the transactions with non-controlling shareholder:

The difference arising on the transaction, as shown below, has been recognised in equity being a transaction between shareholders.

Kshs’000
Cash consideration 6,271,376
15% additional share of net assets acquired at completion date (1,566,844)
Difference arising on transactions with non-controlling interests 4,704,532

166 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

18. Non-controlling interests (continued)

(b) Transactions with non- controlling interests (continued)

Amounts due from non-controlling interests:

Movement of the amounts outstanding from the non controlling shareholders is as reflected in the table below:
Kshs’000
Loan advanced to non-controlling shareholders 2,836,496
Settlement through assignment of 50% of dividends declared by the subsidiary (39,845)
Settlement through purchase of shares (as disclosed above) (2,031,727)
Total settlement of the loan to non-controlling shareholders (2,071,572)
Effect of exchange rate changes 109,676
Balance as at 30 June 2021 874,600

19. Deferred income tax

Deferred income tax is calculated using the enacted domestic tax rate of 30% as at 30 June 2021 (2020 – 25%). The movement on the deferred
income tax account is as follows:

(a) Group

2021 2020
Kshs’000 Kshs’000
At start of year 5,115,420 5,555,556
(Credit)/charge to profit or loss (565,636) 267,463
Effect of change in tax rates 670,823 (799,089)
(Over)/under provision of deferred income tax in prior years 74,144 16,379
Effect of change in exchange rates 99,991 75,111
Total deferred income tax movement 279,322 (440,136)
At end of year 5,394,742 5,115,420

Analysed as follows:
Deferred income tax liabilities 6,239,320 5,568,697
Deferred income tax assets (844,578) (453,277)
At end of year 5,394,742 5,115,420

(b) Company

2021 2020
Kshs’000 Kshs’000
At start of year (442,533) (507,688)
Credit to profit or loss (274,173) (35,194)
Effect of change in tax rates (94,576) 81,468
(Over)/under provision of deferred income tax in prior year (30,347) 18,881
Total deferred income tax movement (399,096) 65,155
At end of year (841,629) (442,533)

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 167

Financial Statements for the year ended 30 June 2021

Notes (continued)

19. Deferred income tax (continued)

Deferred income tax assets and liabilities and deferred income tax charge/(credit) in the profit or loss are attributable to the following items:

(a) Group
Year ended 30 June 2021

Impact of Prior year Charged/ Effects of

At 1 July change in tax (over)/under (credited) to exchange At 30 June
2020 rate provision profit or loss rate changes 2021
Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000
Deferred income tax liabilities
Property, plant and equipment 7,321,742 944,781 107,561 (60,081) 130,827 8,444,830
Right-of-use assets 450,278 49,400 1,401 (48,886) 8,851 461,044
Unrealised exchange gains/(losses) 167,881 111 - 34,345 1,593 203,930
Deferred income tax liabilities 7,939,901 994,292 108,962 (74,622) 141,271 9,109,804

Deferred income tax assets

Property, plant and equipment (274,782) - - - (1,670) (276,452)
Unrealised exchange gains/(losses) 334,327 (24,031) 17,511 82,201 (1,561) 408,447
Lease liabilities (459,088) (51,541) (9,251) 29,988 (62) (489,954)
Tax losses carried forward (1,255,297) (14,980) 10,850 146,760 (4,780) (1,117,447)
Tax losses previously not - - - (515,098) - (515,098)
recognised
Other deductible differences (1,169,641) (232,917) (53,928) (234,865) (33,207) (1,724,558)
Deferred income tax assets (2,824,481) (323,469) (34,818) (491,014) (41,280) (3,715,062)
Net deferred income tax 5,115,420 670,823 74,144 (565,636) 99,991 5,394,742

Year ended 30 June 2020

Impact of Prior year Charged/ Effects of

At 1 July change in tax (over)/under (credited) to exchange At 30 June
2019 rate provision profit or loss rate changes 2020
Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000
Deferred income tax liabilities
Property, plant and equipment 7,987,768 (928,784) 80,369 97,871 84,518 7,321,742
Right-of-use assets - - - 450,011 267 450,278
Unrealised exchange gains/(losses) 341,692 (7,865) (52,795) (115,486) 2,335 167,881
Deferred income tax liabilities 8,329,460 (936,649) 27,574 432,396 87,120 7,939,901

Deferred income tax assets

Property, plant and equipment (312,537) 5,267 - 40,320 (7,832) (274,782)
Unrealised exchange gains/(losses) 341,207 (6,973) 123,430 (118,441) (4,896) 334,327
Lease liabilities - - - (459,351) 263 (459,088)
Tax losses carried forward (1,578,168) - - 343,143 (20,272) (1,255,297)
Other deductible differences (1,224,406) 139,266 (953) (104,276) 20,728 (1,169,641)
Deferred income tax assets (2,773,904) 137,560 122,477 (298,605) (12,009) (2,824,481)
Net deferred income tax 5,555,556 (799,089) 150,051 267,463 75,111 5,115,420

168 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

19. Deferred income tax (continued)

(b) Company
Year ended 30 June 2021
Impact of Prior year Charged/
At 1 July change in tax (over)/under (credited) to At 30 June
2020 rate provision profit or loss 2021
Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000
Deferred income tax liabilities
Property, plant and equipment (44,304) (8,861) (1) (4,281) (57,447)
Right-of-use assets 6,615 (96) 1,419 (4,158) 3,780
Unrealised exchange gains 7 1 - 40,122 40,130
Deferred income tax liabilities (37,682) (8,956) 1,418 31,683 (13,537)

Deferred income tax assets

Unrealised exchange losses (83,705) (13,072) 18,343 66,610 (11,824)
Lease liabilities (7,097) - (1,419) 4,730 (3,786)
Tax losses previously not recognised - - - (515,098) (515,098)
Other deductible differences (314,049) (72,548) (48,689) 137,902 (297,384)
Deferred income tax assets (404,851) (85,620) (31,765) (305,856) (828,092)
Net deferred income tax (442,533) (94,576) (30,347) (274,173) (841,629)

Year ended 30 June 2020

Impact of Prior year Charged/

At 1 July change in tax (over)/under (credited) to At 30 June
2019 rate provision profit or loss 2020
Kshs’000 Kshs’000 Kshs’000 Kshs’000 Kshs’000
Deferred income tax liabilities
Property, plant and equipment (44,461) 7,437 (159) (7,121) (44,304)
Right-of-use assets - - - 6,615 6,615
Unrealised exchange gains 39,121 (6,520) - (32,594) 7
Deferred income tax liabilities (5,340) 917 (159) (33,100) (37,682)

Deferred income tax assets

Unrealised exchange losses 874 (146) 3 (84,433) (83,705)
Lease liabilities - - - (7,097) (7,097)
Other deductible differences (503,222) 80,697 19,037 89,436 (314,049)
Deferred income tax assets (502,348) 80,551 19,040 (2,094) (404,851)
Net deferred income tax (507,688) 81,468 18,881 (35,194) (442,533)

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 169

Financial Statements for the year ended 30 June 2021

Notes (continued)

20. Property, plant and equipment

(a) Group

Freehold Leasehold Plant & Returnable Capital work

property buildings equipment packaging in progress Total
Year ended 30 June 2021 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
Cost
1 July 2020 6,074,617 6,241,585 55,461,615 13,999,283 7,548,309 89,325,409
Additions 83,739 498,641 1,717,839 2,293,921 3,150,366 7,744,506
Transfers from capital work in progress 366,346 437,059 2,395,290 95,687 (3,294,382) -
Transfer to intangible assets (Note 22) - - - - (38,878) (38,878)
Assets written off (3,899) (15,412) (1,653,888) (1,187,574) (8,149) (2,868,922)
Effect of exchange rate changes 4,499 86,276 528,042 123,595 151,222 893,634
At 30 June 2021 6,525,302 7,248,149 58,448,898 15,324,912 7,508,488 95,055,749

Depreciation and impairment

At 1 July 2020 1,339,609 1,090,541 23,057,793 7,102,556 - 32,590,499
Charge for the year 200,870 91,785 2,678,962 1,669,091 - 4,640,708
Assets written off (2,491) (9,452) (1,156,519) (1,020,377) - (2,188,839)
Effect of exchange rate changes 3,011 22,427 178,770 61,939 - 266,147
At 30 June 2021 1,540,999 1,195,301 24,759,006 7,813,209 - 35,308,515
Carrying amount at 30 June 2021 4,984,303 6,052,848 33,689,892 7,511,703 7,508,488 59,747,234

There are no assets pledged by the Group to secure liabilities other than as disclosed under Note 30.

The capital work in progress mainly relates to environmental projects in Kenya and Uganda which include the biomass project and water and
effluent recovery projects. It also includes capacity expansion in Kenya, Uganda and Tanzania.

170 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

20. Property, plant and equipment (continued)

(a) Group (Continued)

Freehold Leasehold Plant & Returnable Capital work

property buildings equipment packaging in progress Total
Year ended 30 June 2020 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
Cost
1 July 2019 5,084,598 5,743,341 50,931,269 14,739,259 7,333,880 83,832,347
Additions 260,025 54,678 2,174,799 1,525,250 3,938,163 7,952,915
Transfers from capital work in progress 750,333 395,838 2,592,323 69,677 (3,808,171) -
Disposals (22,745) (2,007) (829,611) - - (854,363)
Transfer to intangible assets (Note 22) - - - - (22,237) (22,237)
Transfer to right-of-use assets (Note 21) - (62,068) - - - (62,068)
Assets written off - - - (2,480,113) - (2,480,113)
Effect of exchange rate changes 2,406 111,803 592,835 145,210 106,674 958,928
At 30 June 2020 6,074,617 6,241,585 55,461,615 13,999,283 7,548,309 89,325,409

Depreciation and impairment

At 1 July 2019 1,178,448 1,014,083 20,974,790 7,627,215 - 30,794,536
Charge for the year 167,141 78,663 2,523,459 1,495,799 - 4,265,062
On assets disposed (7,548) (2,007) (682,426) - - (691,981)
Transfer to right-of-use assets (Note 21) - (26,885) - - - (26,885)
On assets written off - - - (2,098,582) - (2,098,582)
Effect of exchange rate changes 1,568 26,687 241,970 78,124 - 348,349
At 30 June 2020 1,339,609 1,090,541 23,057,793 7,102,556 - 32,590,499
Carrying amount at 30 June 2020 4,735,008 5,151,044 32,403,822 6,896,727 7,548,309 56,734,910

There are no assets pledged by the Group to secure liabilities other than as disclosed under Note 30.

The capital work in progress mainly relates to capacity expansion in Tanzania and beer and spirits upgrade in Uganda.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 171

Financial Statements for the year ended 30 June 2021

Notes (continued)

20. Property and equipment (continued)

(b) Company

Year ended 30 June 2021

Freehold Leasehold Capital work

property buildings Equipment in progress Total
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
1 July 2020 312,396 14,896 310,534 65,153 702,979
Additions 1,216 - - 69,500 70,716
Write-off - - (154,310) - (154,310)
Transfers from capital work in progress 854 - - (854) -
Transfer to intangible assets - software - - - (31,655) (31,655)
Transfers to Group companies - - - (44,712) (44,712)
At 30 June 2021 314,466 14,896 156,224 57,432 543,018

Depreciation and impairment

At 1 July 2020 4,822 877 217,015 - 222,714
Write-off - - (152,992) - (152,992)
Charge for the year 4,711 - 25,409 - 30,120
At 30 June 2021 9,533 877 89,432 - 99,842
Carrying amount at 30 June 2021 304,933 14,019 66,792 57,432 443,176

There are no assets pledged by the Company to secure liabilities other than as disclosed under Note 30.

172 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

20. Property and equipment (continued)

(b) Company (Continued)

Year ended 30 June 2020

Freehold Leasehold Capital work

property buildings Equipment in progress Total
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
1 July 2019 129,599 14,896 333,351 348,640 826,486
Additions 182,297 - 19,463 485,048 686,808
Disposals - - (114,774) - (114,774)
Transfers from capital work in progress 500 - 72,494 (72,994) -
Transfers to Group companies - - - (695,541) (695,541)
At 30 June 2020 312,396 14,896 310,534 65,153 702,979

Depreciation and impairment

At 1 July 2019 2,258 877 274,180 - 277,315
On assets disposed - - (106,189) - (106,189)
Charge for the year 2,564 - 49,024 - 51,588
At 30 June 2020 4,822 877 217,015 - 222,714
Carrying amount at 30 June 2020 307,574 14,019 93,519 65,153 480,265

There are no assets pledged by the Company to secure liabilities other than as disclosed under Note 30.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 173

Financial Statements for the year ended 30 June 2021

Notes (continued)

21. Right-of-use assets

Movement of right-of-use assets:
(a) Group
Year ended 30 June 2021
Motor Leasehold
Buildings Total
vehicles property
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
Gross carrying value
At 1 July 2020 689,296 1,362,954 69,235 2,121,485
Additions 33,526 346,875 - 380,401
Disposals - (159,642) - (159,642)
Effect of exchange rate changes 13,089 33,124 45 46,258
At 30 June 2021 735,911 1,583,311 69,280 2,388,502

Accumulated amortisation
At 1 July 2020 47,576 469,432 27,062 544,070
Amortisation charge 84,812 373,860 8 458,680
Disposals - (82,944) - (82,944)
Effect of exchange rate changes 2,076 14,636 4 16,716
At 30 June 2021 134,464 774,984 27,074 936,522
Net carrying value 601,447 808,327 42,206 1,451,980

Year ended 30 June 2020

Motor Leasehold
Buildings vehicles property Total
Kshs ‘000 Kshs ‘000 Kshs ‘000 Kshs ‘000
Gross carrying value
At 30 June 2019 - As reported - - - -
IFRS 16 transitional adjustment
- Prepaid operating lease rentals (Note 22) - - 7,167 7,167
- Non-prepaid operating lease rentals (Note 31) 38,794 1,150,282 - 1,189,076
At 1 July 2019 38,794 1,150,282 7,167 1,196,243
Additions 647,681 193,585 - 841,266
Reclassifications from property, plant and equipments (Note 20(a)) - - 62,068 62,068
Effect of exchange rate changes 2,821 19,087 - 21,908
At 30 June 2020 689,296 1,362,954 69,235 2,121,485

Accumulated amortisation
At 1 July 2019 - - - -
Amortisation charge 46,569 462,936 175 509,680
Reclassifications from property, plant and equipments (Note 20(a)) - - 26,885 26,885
Effect of exchange rate changes 1,007 6,496 2 7,505
At 30 June 2020 47,576 469,432 27,062 544,070
Net carrying value 641,720 893,522 42,173 1,577,415

174 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

21. Right-of-use assets (Continued)

(b) Company

At 30 June 2021

Motor
vehicles
Kshs ’000 Total
Gross carrying value
At 1 July 2020 52,557 52,557
Additions 3,379 3,379
Disposals (31,407) (31,408)
24,529 24,528

Accumulated amortisation
At 1 July 2020 26,099 26,099
Amortisation charge 17,239 17,239
Disposals (31,408) (31,408)
At 30 June 2021 11,930 11,930
Net carrying value 12,599 12,598

At 30 June 2020

Motor
vehicles
Kshs ’000 Total
Gross carrying value
At 30 June 2019 – As reported - -
IFRS 16 transitional adjustment 52,557 52,557
At 1 July 2020 and 30 June 2020 52,557 52,557

Accumulated amortisation
At 1 July 2019 - -
Amortisation charge 26,099 26,099
At 30 June 2021 26,099 26,099
Net carrying value 26,458 26,458

The Group leases space for offices, motor vehicles and office equipment. The leases of office space is for an average of 10 years with an option to
renew. The Directors were not reasonably certain that the option to renew the lease would be exercised at the expiry of the lease. The option has
therefore not been considered in determining the lease term. The leases of motor vehicles is on average 4 to 5 years, while the leases of office
equipment are for periods of not more than 12 months.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 175

Financial Statements for the year ended 30 June 2021

Notes (continued)

22. Prepaid operating lease rentals

(a) Group

At 30 June
2020
Kshs’000
Cost
At start of year 10,385
Derecognition upon adoption of IFRS 16 Leases (10,385)
Effect of exchange rate changes -
At end of year -

Amortisation
At start of year 3,218
Charge for the year -
Derecognition upon adoption of IFRS 16 Leases (3,218)
Effect of exchange rate changes -
At end of year -
Net book value -
Net book value derecognised upon adoption of IFRS 16 Leases (Note 21) 7,167

176 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

23. Intangible assets - software

(a) Group

2021 2020
Kshs’000 Kshs’000
Cost
At start of year 2,384,698 2,309,929
Additions 182,354 163,187
Disposals (31,902) (128,666)
Transfer from property plant and equipment (Note 20(a)) 38,878 22,237
Effect of exchange rate changes 7,143 18,011
At end of year 2,581,171 2,384,698

Amortisation
At start of year 1,782,662 1,688,853
Charge for the year 194,056 210,927
Disposals (29,081) (128,666)
Effect of exchange rate changes 8,582 11,548
At end of year 1,956,219 1,782,662
Net book value 624,952 602,036

Transfer of assets from property and equipment to intangible assets relate to costs incurred in the acquisition of software.

(b) Company

2021 2020
Kshs’000 Kshs’000
Cost
At start of year 1,434,894 1,487,572
Additions 108,770 75,988
Transfer from property plant and equipment (Note 20(a)) 31,655 -
Transfer to Group companies (101,733) -
Disposals - (128,666)
At end of year 1,473,586 1,434,894

Amortisation
At start of year 1,312,550 1,362,269
Charge for the year 37,517 78,947
On assets disposed - (128,666)
At end of year 1,350,067 1,312,550
Net book value 123,519 122,344

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 177

Financial Statements for the year ended 30 June 2021

Notes (continued)

24. Intangible assets - goodwill and brand

(a) Goodwill

Carrying Effect of Carrying

amount at exchange amount at
start of year rate changes end of year
Year ended 30 June 2021 Kshs’000 Kshs’000 Kshs’000
Serengeti Breweries Limited (SBL) 2,219,246 17,481 2,236,727
UDV (Kenya) Limited (UDV) 415,496 - 415,496
International Distillers (Uganda) Limited (IDU) 196,388 12,117 208,505
Total 2,831,130 29,598 2,860,728

Year ended 30 June 2020

Serengeti Breweries Limited (SBL) 2,137,180 82,066 2,219,246
UDV (Kenya) Limited (UDV) 415,496 - 415,496
International Distillers (Uganda) Limited (IDU) 190,325 6,063 196,388
Total 2,743,001 88,129 2,831,130

Goodwill represents the excess of cost of acquisitions over the fair value of identifiable assets and liabilities of the respective subsidiaries at
acquisition date. For each of the subsidiaries, the goodwill was recognised due to the expected synergies arising from the business combination
as at the acquisition date.

(b) Brand

2021 2020
Kshs’000 Kshs’000
At start of year 481,219 463,430
Effect of exchange rate changes 3,789 17,789
At end of year 485,008 481,219

The balance represents the purchase price allocation to the “Premium Serengeti Lager” brand at acquisition of Serengeti Breweries Limited.

178 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

24. Intangible assets - goodwill and brand (continued)

(c) Impairment testing for cash-generating units containing goodwill and brand

(i) Impairment testing methodology

For the purposes of impairment testing, goodwill is allocated to the Group’s operating segments which represent the lowest level within the
Group at which the goodwill is monitored for internal management purposes.

The recoverable amount of an operating segment is determined based on a detailed 5-year model that has been extrapolated in perpetuity by
applying the long-term growth rate of the country. Profit has been amended with working capital and capital expenditure requirements. The
net cashflows have been discounted using the country-specific pre-tax weighted average cost of capital (WACC). These calculations use cash
flow projections approved by management covering a 5-year period. Cash flows beyond the five-year period are extrapolated using estimated
terminal growth rates.

(ii) Key assumptions used for value in use calculations

Tanzania Kenya Uganda

2021 2020 2021 2020 2021 2020
Terminal growth rate 1
4% 5% 5% 5% 5% 5%
WACC rate 2
12% 15% 10% 13% 10% 14%

1. Weighted average growth rate used to extrapolate cash flows beyond the projected period.
2. Pre-tax discount rate applied to the cash flow projections.
These assumptions have been used for the analysis of each operating segment. Management determined forecast profit margin based on past
performance and its expectations for market developments. The weighted average growth rates used are consistent with the forecasts included
in industry reports.
(iii) Results of impairment testing on the carrying amount of goodwill and brand
Goodwill
Based on the above assumptions, the recoverable value of the relevant operating segment exceeded the carrying net asset amount (including
the goodwill) for SBL, UDV and IDU at 30 June 2021. As a result, the Group has not recognized an impairment charge (2020: Nil).
Brand
Based on the above assumptions, the recoverable value of the brand exceeded the carrying value at 30 June 2021. As a result, the Group has not
recognized an impairment charge (2020: Nil).
(iv) Significant estimates: Impact of possible changes in key assumptions
There were no reasonably possible changes in any of the key assumptions that would have resulted in an impairment charge for SBL, UDV and
IDU goodwill and the SBL brand.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 179

Financial Statements for the year ended 30 June 2021

Notes (continued)

25. Investments in subsidiaries

Book value at
Effective
Country of ownership
incorporation interest 30 June 2021 30 June 2020
Kshs’000 Kshs’000
Kenya Breweries Limited Kenya 100% 22,377,809 22,377,809
Serengeti Breweries Limited Tanzania 92.5% 22,387,848 15,970,420
East African Maltings (Kenya) Limited Kenya 100% 687,662 687,662
Uganda Breweries Limited Uganda 98% 687,648 687,648
UDV (Kenya) Limited Kenya 46% 589,410 589,410
International Distillers Uganda Limited Uganda 100% 300,000 300,000
EABL Tanzania Limited Tanzania 100% 5,610 5,610
East African Breweries (Rwanda) Limited Rwanda 100% 1,337 1,337
East African Beverages (South Sudan) Limited South Sudan 99% 299 299
Allsopps (EA) Sales Limited Kenya 100% 3 3
EABL International Limited Kenya 100% 2 2
Salopia Limited Kenya 100% - -
East African Maltings (Uganda) Limited Uganda 100% - -
Net book amount 47,037,628 40,620,200

Movement in investment in subsidiaries

The movement in the carrying amount of the total investment in subsidiaries figure is as reflected below:

Year ended 30 June 2021

Kshs’000
At 1 July 2020 40,620,200
Serengeti Breweries Limited
Purchase of additional shares 6,271,376
Settlement of amounts due from non-controlling interests (Note 18 (b)) 146,052
At 30 June 2021 47,037,628

Year ended 30 June 2020

Kshs’000
At 1 July 2019 39,955,009
Serengeti Breweries Limited
Purchase of additional shares 308,147
Settlement of amounts due from non-controlling interests (330,618)
East African Matlings (Kenya) Limited
Conversion of long-term loan to equity investments 687,662
995,809
At 30 June 2020 40,620,200

180 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

25. Investments in subsidiaries (continued)

Movement in investment in subsidiaries (continued)
As explained in Note 18, the carrying amount of investment in subsidiaries includes loans due from the non-controling shareholders in Serengeti
Breweries Limited of Kshs 874,600,000 (2020: Kshs 2,836,496,000) arising from the capital restructuring of the subsidiary in 2018.
The details of the movement in investment in subsidiaries is as disclosed below:
(a) Serengeti Breweries Limited (SBL)
The investment in SBL increased by Kshs 308 million in the year ended 30 June 2020 and Kshs 6,271 million in the year ended 30 June 2021,
arising from purchase of shares from non-controlling shareholders as disclosed in Note 18.
Impairment assessment
An impairment assessment of the carrying amount of the investment in SBL at Company level was performed at the end of the year using the
value-in-use model. The key assumptions used in the value-in-use model are shown in Note 24. Based on the assumptions, the carrying amount
of the investment was lower than the recoverable amount.
Significant estimate: Impact of possible changes in key assumptions
If the budgeted cash flows used in the value-in-use calculation for SBL had been 10% lower than management’s estimates at 30 June 2021, the
Company would not have recognized any impairment against the carrying amount of the investment in subsidiary (2020: Nil).
If the pre-tax discount rate applied to the cash flow projections for SBL had been 1% higher than management’s estimates (13% instead of 12%),
the Company would not have to recognize an impairment against the carrying value of the investment in subsidiary (2020: Nil).
If the terminal growth rate applied to the cash flow projections for SBL had been 1% lower than management’s estimates (2.5% instead of 3.5%),
the Company would not have had to recognize any impairment against the carrying value of the investment in subsidiary (2020: Nil).
(b) East African Maltings Limited (EAML)
During the year ended 30 June 2020, the Company converted a portion of its long term loan in EAML of Kshs 688 million into equity investment
represented by issue of ordinary share capital.

26. Other financial assets (Group and Company)

2021 2020
Kshs ‘000 Kshs ‘000
20% investment in Challenge Fund Limited who in turn have subscribed to 50% in Central Depository 10,000 10,000
and Settlement Corporation Limited
At end of year 10,000 10,000

During the year, the investment in Challenge Fund Limited did not change. The carrying amount of the investment estimates its fair value.

27. Inventories

2021 2020
(a) Group Kshs’000 Kshs’000
Raw materials and consumables 7,540,796 7,091,534
Work in progress 650,119 588,459
Finished goods 3,324,322 3,213,469
Goods in transit 172,920 22,908
11,688,157 10,916,370

The cost of inventories recognised as an expense and included in ‘cost of sales’ amounted to Kshs 24,930,181,000 (2020: Kshs 20,195,033,000).

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 181

Financial Statements for the year ended 30 June 2021

Notes (continued)

28. Trade and other receivables

(a) Group

2021 2020
Kshs’000 Kshs’000
Trade receivables 7,762,422 4,895,259
Less: provision for expected credit losses (1,419,475) (1,142,429)
6,342,947 3,752,830

Other receivables 6,299,109 1,600,375

Less: provision for expected credit losses (618,725) (369,152)
Prepayments 838,194 397,534
Receivables from related parties (Note 35 (a) (iii)) 161,355 299,857
13,022,880 5,681,444

Movement in expected credit losses allowance

The following table shows the movement in lifetime expected credit losses that has been recognized for trade and other receivables in
accordance with the simplified approach set out in IFRS 9.

2021 2020
Kshs’000 Kshs’000
At start of year 1,511,581 850,661
Charge to profit or loss (Note 9(a)) 583,279 660,920
Write-offs (56,660) -
At end of year 2,038,200 1,511,581

(b) Company

2021 2020
Kshs’000 Kshs’000
Receivables from related companies (Note 35 (b) (iii)) 3,061,335 1,430,603
Other receivables 267,762 655,103
Prepayments 6,285 11,078
3,335,382 2,096,784

182 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

29. Trade and other payables

(a) Group

2021 2020
Kshs’000 Kshs’000
Trade payables 8,772,866 5,672,679
Other payables and accrued expenses 20,076,301 15,186,925
Payables to related parties (Note 35 (a) (iii)) 1,694,551 871,479
30,543,718 21,731,083

(b) Company
Trade payables 781,219 126,357
Payables to related parties (Note 35 (b) (iii)) 17,661,253 10,356,587
Other payables and accrued expenses 878,133 2,191,560
19,320,605 12,674,504

30. Borrowings
(a) Group

2021 2020
Kshs’000 Kshs’000
The borrowings are made up as follows:
Non-current
Bank loans 38,260,591 30,900,000
Medium term note - 6,000,000
38,260,591 36,900,000

Current
Bank loans 6,900,000 4,106,253
6,900,000 4,106,253
Bank overdraft 1,190,889 3,932,338
8,090,889 8,038,591
46,351,480 44,938,591

The carrying amounts of current borrowings approximate their fair value, as the impact of discounting is not material.

2021 2020
Kshs’000 Kshs’000
The movement in borrowings is as follows:
At start of year 44,938,591 36,319,744
Advanced in the year 23,552,160 23,400,000
Repayments in the year (19,398,508) (18,716,209)
Movement in bank overdrafts (2,741,449) 3,932,338
Effect of exchange rate changes 686 2,718
At end of year 46,351,480 44,938,591

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 183

Financial Statements for the year ended 30 June 2021

Notes (continued)

30. Borrowings (continued)

(a) Group (continued)
(i) Bank loans comprise:
• Long term loan from Stanbic Bank Kenya Limited of Kshs 3,500,000,000 (2020: Kshs 4,500,000,000) at a weighted average interest rate of 8.9%
(2020: 8.9%). The loan is unsecured and matures in March 2025.
• Long term loan from Standard Chartered bank of Kenya of Kshs 7,600,000,000 (2020: Kshs 7,600,000,000) at a weighted average interest rate
of 9%. The loan is unsecured and matures in December 2026.
• Medium term loan from Absa Bank Kenya (formerly Barclays Bank of Kenya) of Kshs 3,000,000,000 (2020: Kshs 3,000,000,000) at average annual
interest rates of (CBR+300bps), effectively 8.0% (2020: 8%). This facility is secured by a letter of comfort from Diageo Plc for Kshs 7.8 billion and
matures in December 2026.
• Medium term loan from Stanbic Bank Kenya of Kshs 5,958,333,333.33 (2020: Kshs 6,500,000,000) at interest rate of 8.4% (2020: 8.4%). The loan
is unsecured and matures on June 2026..
• Medium term loan from Standard Chartered bank of Kenya of Kshs 3,750,000,000 (2020: Kshs 4,500,000,000 at interest rate of 8.3% (2020:
8.3%). The loan is unsecured and matures on 28 December 2023.
• Medium term loan from Absa Bank Kenya (formerly Barclays Bank of Kenya) of Kshs 4,800,000,000 (2020: Kshs 4,800,000,000) at an interest of
8.0% (2020: 8%). The loan is unsecured and is repayable in 12 quarterly instalments of Kshs 400,000,000 beginning July 2022.
• Medium term loan from Absa Bank Kenya (formerly Barclays Bank of Kenya) of Kshs 11,000,000,000 (2020: Nil) at an interest of 10.3% (2020:
Nil). The loan is unsecured and matures on July 2022.
• Medium term loan from Stanbic Bank of Uganda of UGX 38,000,000,000 at an effective interest rate of (182 T-bill rate +1.85%), effectively
12.10%.This facility is unsecured and matures on 15 April 2026.
• Short-term loan from Stanbic bank Kenya of Kshs. 2,400,000,000 (2020: Nil) at an interest of SPR (Stanbic Prime rate) +1.4% margin. The loan
is unsecured and matures in September 2021.
• Short-term loan from Citibank Kenya of Kshs. 1,300,000,000 (2020: Nil) at an interest of 10% per annum. The loan is unsecured and matures
on 28 July 2021.
• Short-term loan from Standard Chartered bank of Kshs. 700,000,000 (2020: Nil) at an interest of 9.8% per annum. The loan is unsecured and
matures on 19 April 2022.
(ii) The bank overdraft facilities have an effective interest rate of 10% (2020: 9%) and is sourced from SCB Bank of Kenya, ABSA Kenya, Equity Bank
Kenya, Absa Bank of Uganda, and Citibank Uganda.
(iii) Medium term note of Kshs Nil (2020: Kshs 6,000,000,000). The medium-term note was in two tranches previously. The first tranch of Kshs
5,000,000,000, which had an annual interest rate of 12.95% matured in March 2020. The second tranche of Kshs 6,000,000,000 was redeemed
in June 2021 which was a date earlier than the maturity scheduled for March 2022 and it was refinanced by a long-term loan from Absa Bank
Kenya
The Group is not in breach of any financial covenants for facilities issued by its bankers as at 30 June 2021. The Group had available undrawn
facilities of Kshs 11.4 billion as at 30 June 2021 (2020: Kshs 4.1 billion).

184 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

30. Borrowings (continued)

(b) Company

2021 2020
Kshs’000 Kshs’000
The borrowings are made up as follows:
Non-current
Medium term note 37,108,333 6,000,000
Bank loans - 30,900,000
37,108,333 36,900,000

Current
Bank loans 6,900,000 4,000,000
6,900,000 4,000,000
Bank overdraft - 2,804,807
6,900,000 6,804,807
Total borrowings 44,008,333 43,704,807

The carrying amounts of current borrowings approximate their fair value, as the impact of discounting is not material.

The movement in borrowings is as follows:

2021 2020
Kshs’000 Kshs’000
The movement in borrowings is as follows:
At start of year 43,704,807 36,115,178
Advanced in the year 22,400,000 23,400,000
Repayments (19,291,667) (18,615,178)
Movement in bank overdrafts (2,804,807) 2,804,807
At end of year 44,008,333 43,704,807

(i) Bank loans comprise:

• Long term loan from Stanbic Bank Kenya Limited of Kshs 3,500,000,000 (2020: Kshs 4,500,000,000) at a weighted average interest rate of 8.9%
(2020: 8.9%). The loan is unsecured and matures in March 2025.
• Long term loan from Standard Chartered bank of Kenya of Kshs 7,600,000,000 (2020: Kshs 7,600,000) at a weighted average interest rate of 9%.
The loan is unsecured and matures in December 2026.
• Medium term loan from Absa Bank Kenya (formerly Barclays Bank of Kenya) of Kshs 3,000,000,000 (2020: Kshs 3,000,000,000) at average annual
interest rates of (CBR+300bps), effectively 8.0% (2020: 8.0%). This facility is secured by a letter of comfort from Diageo Plc for Kshs 7.8 billion
and matures in December 2026.
• Medium term loan from Stanbic Bank Kenya of Kshs 5,958,333,333.33 (2020: Kshs 6,500,000,000) at interest rate of 8.4% (2020: 10.4%). The loan
is unsecured and matures on 31 December 2023.
• Medium term loan from Standard Chartered bank of Kenya of Kshs 3,750,000,000 (2020: Kshs 4,500,000,000) at interest rate of 8.3% (2020:
8.3%). The loan is unsecured and matures on 28 December 2023.
• Medium term loan from Absa Bank Kenya (formerly Barclays Bank of Kenya) of Kshs 4,800,000,000 (2020: 4,800,000,000) at an interest of 8.0%
(2020: 8.0%). The loan is unsecured and is repayable in 12 quarterly instalments of Kshs 400,000,000 beginning July 2022.

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 185

Financial Statements for the year ended 30 June 2021

Notes (continued)

30. Borrowings (continued)

(b) Company (Continued)
• Medium term loan from Absa Bank Kenya (formerly Barclays Bank of Kenya) of Kshs 11,000,000,000 (2020: Nil) at an interest of 10.3% (2020:
Nil). The loan is unsecured and matures on July 2022.
• Short-term loan from Stanbic bank Kenya of Kshs. 2,400,000,000 (2020: Nil) at an interest of SPR (Stanbic Prime rate) +1.4% margin. The loan
is unsecured and matures in September 2021.
• Short-term loan from Citibank Kenya of Kshs. 1,300,000,000 (2020: Nil) at an interest of 10% per annum. The loan is unsecured and matures
on 28 July 2021.
• Short-term loan from Citibank Kenya of Kshs. 700,000,000 (2020: Nil) at an interest of 9.8% per annum. The loan is unsecured and matures on
19 April 2022.
(ii) The bank overdraft facilities have an effective interest rate of 10% (2020: 9%) and is sourced from SCB Bank of Kenya, ABSA Kenya, Equity Bank
Kenya, Absa Bank of Uganda, and Citibank Uganda.
(iii) Medium term note of Kshs Nil (2020: Kshs 6,000,000,000). The medium-term note was in two tranches previously. The first tranch of Kshs
5,000,000,000, which had an annual interest rate of 12.95% matured in March 2020. The second tranche of Kshs 6,000,000,000 was redeemed
in June 2021 which was a date earlier than the maturity scheduled for March 2022 and it was refinanced by a long-term loan from Absa Bank
Kenya

186 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

31. Lease liabilities

(a) Group

2021 2020
Movement of lease liabilities:
Kshs ‘000 Kshs ‘000
At 30 June 2019 - -
IFRS 16 transitional adjustment (Note 2(a)) - 1,189,076
At 1 July 1,611,106 1,189,076
Additions 380,401 841,266
Interest expense on leases 89,530 104,349
Repayment of lease liabilities
- Payment of the principal portion of the lease liability (482,774) (473,709)
- Interest paid on lease liabilities (89,530) (104,349)
Effect of change in exchange rates (52,130) 54,473
At June 30 1,456,603 1,611,106

Presented as:
Current lease liabilities 394,243 459,265
Non-current lease liabilities 1,062,360 1,151,841
1,456,603 1,611,106

(b) Company

2021 2020
Movement of lease liabilities: Kshs ‘000 Kshs ‘000
At 30 June 2019 - -
IFRS 16 transitional adjustment (Note 2(a)) - 52,557
At 1 July 28,387 52,557
Additions 3,379 -
Interest expense on leases 2,667 3,817
Repayment of lease liabilities
- Payment of the principal portion of the lease liability (19,146) (24,170)
- Interest paid on lease liabilities (2,667) (3,817)
At June 30 12,620 28,387

Presented as:
Current lease liabilities 7,337 17,401
Non-current lease liabilities 5,283 10,986
12,620 28,387

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 187

Financial Statements for the year ended 30 June 2021

Notes (continued)

32. Contingent liabilities

The Group has operations in several countries and is subject to a number of legal, customs duty, excise duty and other tax claims incidental
to these operations, the outcome of which cannot at present be foreseen and the possible loss or range of loss of which cannot at present
be meaningfully quantified. In particular, the Group is subject to certain claims in the markets that the Group operates in that challenge its
interpretation of various tax regulations and the application thereof.
Based on their own judgement and professional advice received from legal, tax and other advisors, the Directors believe that the provision made
for all these claims sufficiently covers the expected losses arising from them. For most of these cases, the likelihood that the Group will suffer
significant charges or payments is remote; however, in a few cases the Directors consider it possible but not probable that such charges will be
incurred.
The Group continues to vigorously defend its position. The Directors continue to monitor the development of these matters and to the extent
those developments may have a major impact on its financial position, or may significantly affect its ability to meet its commitments, the Group
shall disclose those developments in line with its listing obligations as required by relevant regulations.

33. Commitments
(i) Capital commitments - Group
Capital expenditure contracted for at the reporting date but not recognised in the financial statements is as follows:

2021 2020
Kshs’000 Kshs’000
Contracted but not provided for 4,064,138 5,138,376
Authorised but not contracted for - 884,876
4,064,138 6,023,252

188 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

34. Cash generated from operations

(a) Reconciliation of profit before income tax to cash generated from operations:

2021 2020
Group Kshs’000 Kshs’000
Profit before income tax 10,858,033 10,655,259
Adjusted for:
Interest income (Note 12(a)) (91,242) (164,873)
Interest expense on borrowings (Note 12(a)) 3,950,158 3,886,615
Interest expense on lease liabilities (Note 12(a)) 89,530 104,349
Depreciation of property, plant and equipment (Note 20(a)) 4,640,708 4,265,062
Amortisation of right-of-use asset (Note 21(a)) 458,680 509,680
Amortisation of intangible asset - software (Note 23(a)) 194,056 210,927
Share based payments 25,166 22,126
Loss on disposal of property, plant and equipment - 68,390
Adjustment of dividends payable - 239,225
Write-off of property, plant and equipment 680,083 381,531
Cash generated from operations before working capital adjustments 20,805,172 20,178,291
Changes in working capital:
-Trade and other receivables (7,245,538) 2,621,475
- Inventories (645,030) (3,434,483)
-Trade and other payables 8,609,129 (5,728,956)
Cash generated from operations 21,523,733 13,636,327

Company
Profit before income tax 2,594,955 10,681,127
Adjustments for:
Interest income (Note 12(b)) (3,210,164) (3,101,187)
Interest expense on borrowings (Note 12(b)) 4,442,498 5,556,670
Interest expense on lease liabilities (Note 32(b)) 2,667 3,817
Depreciation of property and equipment (Note 20(b)) 30,120 51,588
Amortisation of right-of-use asset (Note 21(b)) 17,239 26,099
Amortisation of intangible asset - software (Note 23(b)) 37,517 78,947
Share based payments 25,166 22,126
Dividend income (2,529,344) (13,557,295)
Settlement of amounts due from non-controlling interests (non-cash) (Note 18(b)) (146,049) 185,897
Loss on disposal of property and equipment 1,318 9,568
Adjustment of dividends payable - 239,225
Cash generated from operations 1,265,923 196,582
Changes in working capital:
-Trade and other receivables (Note 35(c)) (754,019) (946,310)
- Inventory - -
-Trade and other payables (Note 35(c)) 6,784,869 (5,574,316)
Cash generated from operations 7,296,773 (6,324,044)

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 189

Financial Statements for the year ended 30 June 2021

Notes (continued)

34. Cash generated from operations (continued)

(b) Cash and cash equivalents

2021 2020
Kshs’000 Kshs’000
Group
Cash and bank balances 5,611,910 5,661,635
Bank overdraft (Note 30(a)) (1,190,889) (3,932,338)
4,421,021 1,729,297

Company
Cash and bank balances 1,761,351 3,616,403
Bank overdraft (Note 30(b)) - (2,804,807)
1,761,351 811,596

(c) Movement in working capital

Group

2021 2020
Movement in trade and other receivables
Movement per statement of financial position (7,341,436) 2,541,550
Foreign currency translation differences 95,898 79,925
Net movement in receivables as per cash flow (7,245,538) 2,621,475

Movement in inventory
Movement per statement of financial position (771,787) (3,548,358)
Foreign currency translation differences 126,757 113,875
Net movement in payables as per cash flow (645,030) (3,434,483)

Movement in trade and other payables

Movement per statement of financial position 8,812,635 (6,133,109)
External interest payable (382,299) 158,207
Foreign currency translation differences 178,793 245,946
Net movement in payables as per cash flow 8,609,129 (5,728,956)

190 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

35. Related party transactions

The ultimate parent of the Group is Diageo Plc, incorporated in the United Kingdom. The Company is controlled by Diageo Kenya Limited in-
corporated in Kenya and other subsidiaries of Diageo Plc. There are other Companies that are related to East African Breweries Limited through
common shareholdings.

The following are transactions and balances with related parties:

(a) Group

(i) Management and manufacturing fees and royalties paid

2021 2020
Kshs’000 Kshs’000
Diageo Great Britain 916,956 1,385,933
Diageo Ireland 366,825 512,106
Diageo North America, Inc. 252,871 282,669
Diageo Brands B.V. 138,105 250,752
Diageo Scotland Limited 29,112 79,238
Guinness Cameroon S.A. 8,934 -
Diageo Business Services India 7,796 -
Diageo Business Services Hungary - 48,513
Guinness Ghana Breweries Limited - 15,761
R & A Bailey & Co - 6,056
Other related parties 3,583 6,828
1,724,182 2,587,856

(ii) Purchase of goods and services

2021 2020
Kshs’000 Kshs’000
Diageo Brands B.V. 1,764,326 1,255,601
Diageo Ireland 1,021,500 1,222,395
Diageo Great Britain 516,029 803,026
Guinness Storehouse Limited 69,937 -
Diageo South Africa (Pty) Limited 14,728 -
Diageo Scotland Limited 8,672 -
Diageo Business Services India 4 -
United Spirits Singapore Pte. Limited - 7,858
3,395,196 3,288,880

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 191

Financial Statements for the year ended 30 June 2021

Notes (continued)

35. Related party transactions (continued)

(a) Group (continued)

(iii) Outstanding balances arising from sale and purchase of goods/services

Receivables from related parties

2021 2020
Kshs’000 Kshs’000
Meta Abo Breweries Limited 71,343 25,349
Diageo North America, Inc. 58,260 1,043
Guinness Nigeria Plc 17,897 23,037
Diageo plc 5,195 538
Guinness Cameroon S.A. 2,482 1,552
Guinness Ghana Breweries Limited 810 4,642
Seychelles Breweries Limited 162 3,071
Diageo Great Britain Limited - 215,926
Diageo Ireland - 16,104
Diageo Business Services Hungary - 5,380
Other related parties 5,206 3,215
161,355 299,857

Payables to related parties

2021 2020
Kshs’000 Kshs’000
Diageo Brands B.V 830,093 460,634
Diageo Ireland 609,500 132,867
Diageo Great Britain Limited 180,445 208,996
Diageo North America, Inc 57,550 41,035
Diageo South Africa (Pty) Limited 12,253 -
Guinness Cameroon S.A. 1,920 -
Diageo Business Services Hungary 1,101 1,497
United Spirits Limited - 11,728
Other related parties 1,689 14,722
1,694,551 871,479

192 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

35. Related party transactions (continued)

(b) Company
(i) Management fees and royalties received/(paid)

Transactions with subsidiaries

2021 2020
Kshs’000 Kshs’000
Kenya Breweries Limited 1,204,747 1,539,840
UDV (Kenya) Limited 327,954 289,947
Uganda Breweries Limited 258,103 189,377
Serengeti Breweries Limited 103,670 -
East Africa Maltings Limited 19,553 -
1,914,027 2,019,164

Transactions with related parties with related parties

2021 2020
Kshs’000 Kshs’000
Diageo Great Britain Limited (175,373) -
Other related parties 5,117 -
(170,256) -
1,743,771 2,019,164

(ii) Purchase of goods and services

2021 2020
Kshs 000 Kshs 000
Serengeti Breweries Limited 1,209,530 44,579
Diageo Great Britain Limited 773,986 912,425
Kenya Breweries Limited 97,806 217,444
Diageo Scotland Limited 29,112 77,272
Diageo Ireland 28,966 57,394
Uganda Breweries Limited 12,455 21,728
Diageo Business Services India 7,136 6,056
Guiness Nigeria plc 1,435 3,633
Diageo Business Services Hungary 838 48,513
Diageo Brands B.V. - 71,032
Guinness Ghana Breweries Limited - 15,761
Other related parties 4 4,302
2,161,268 1,480,139

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 193

Financial Statements for the year ended 30 June 2021

Notes (continued)

35. Related party transactions (continued)

(b) Company (continued)
(iii) Outstanding balances arising from sale and purchases of goods and services

Long-term receivables from subsidiaries 2021 2020

Kshs’000 Kshs’000
Kenya Breweries Limited 26,800,000 23,800,000
Uganda Breweries Limited 2,449,117 2,308,422
UDV Kenya Limited 1,100,000 1,100,000
East Africa Maltings Limited 687,000 686,338
31,036,117 27,894,760

The Company has advanced loans to the subsidiaries to finance their capital expenditure and working capital requirements as part of the Group’s
centralized treasury management process. The loans are repayable on demand depending on the cash flows of the subsidiaries. At the year end,
the Company had committed not to recall the loans for at least twelve months from the date of approval of the financial statements. The loans
receivable are unsecured. They attract interest based on the Central Bank of Kenya Rate (CBR) plus 2.5% p.a.

194 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Financial Statements for the year ended 30 June 2021

Notes (continued)

35. Related party transactions (continued)

(b) Company (continued)
(iii) Outstanding balances arising from sale and purchases of good/services (continued)
Receivables from related companies
2021 2020
Receivables from subsidiaries Kshs’000 Kshs’000
East African Maltings Limited 2,895,889 603,500
Kenya Breweries Limited - 506,700
UDV (Kenya) Limited - 48,503
Uganda Breweries Limited 73,606 23,277
Serengeti Breweries Limited 39,962 -
3,009,457 1,181,980
Receivables from related parties
Meta Abo Breweries Limited 30,197 1,428
Diageo Great Britain Limited 8,969 215,926
Guinness Nigeria Plc 3,273 17,215
Guinness Cameroun S.A. 2,482 1,552
Diageo Business Services Limited 2,482 -
Diageo Angola Limitada 2,314 -
Guinness Ghana Breweries Limited 810 4,642
Diageo plc 779 538
Diageo Polski Sp. Z.o.o. 410 -
Seychelles Breweries Limited 162 3,071
Diageo North America, Inc. - 1,043
Other related parties - 3,208
51,878 248,623
3,061,335 1,430,603

Payables to related companies

2021 2020
Kshs’000 Kshs’000
Payables to subsidiaries
UDV (Kenya) Limited 11,368,851 7,627,310
Kenya Breweries Limited 5,984,098 2,448,966
EABL international Limited 254,524 254,524
17,607,473 10,330,800
Payables to related parties
Diageo Great Britain Limited 52,616 -
Diageo Ireland 227 -
Diageo Business Services India 937 -
Diageo Brands B.V - 19,881
Diageo Scotland Limited - 3,254
Diageo Business Services Hungary - 1,497
Other related parties - 1,155
53,780 25,787
17,661,253 10,356,587

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 195

Financial Statements for the year ended 30 June 2021

Notes (continued)

35. Related party transactions (continued)

(c) Other related party disclosures
(i) Directors’ remuneration
Group
2021 2020
Kshs’000 Kshs’000
Fees for services as a Director 36,946 34,339
Share based payments 47,504 29,018
Other emoluments (included in key management compensation in (ii) below) 158,219 328,607
242,669 391,964

Directors’ remuneration include fees in relation to non-executive Directors and compensation to executive Directors in the Company and its
subsidiaries.
Company

2021 2020
Kshs’000 Kshs’000
Fees for services as a Director 36,946 34,339
Share based payments 37,044 17,277
Other emoluments included in key management
compensation in (ii) below) 131,713 248,426
205,703 300,042

(ii) Key management compensation

Key management includes executive Directors and members of senior management. The compensation paid or payable to key management
for employee services is shown below:

Group

2021 2020
Kshs’000 Kshs’000
Salaries and other shorter term employment benefits 835,322 1,275,118
Share based payments 87,950 63,980
Post-employment benefits 79,558 55,513
1,002,830 1,394,611

Company

2021 2020
Kshs’000 Kshs’000
Salaries and other shorter term employment benefits 165,758 447,938
Share based payments 54,580 17,277
Post-employment benefits 4,179 1,625
224,517 466,840

36. Events after the reporting period

As at the date of approval of the financial statements for issue, the Directors were not aware of any matter or circumstances arising since the end
of the financial year, not otherwise dealt with in the financial statements, which would significantly affect the financial position of the Group and
results of its operation as laid out in these financial statements.

196 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 Annual Report for the year ended 30 June 2021

PRINCIPAL SHAREHOLDERS AND SHARE DISTRIBUTION

The ten largest shareholdings in the Company and the respective number of shares held at 30 June 2021 are as follows:

Number of
Name(s) and Address shares %
Diageo Kenya Limited 395,608,434 50.03%
Standard Chartered Nominees Non-Resd. A/C KE10085 19,784,000 2.50%
Standard Chartered Nominees Non-Resd. A/C KE004667 10,999,994 1.39%
Kenya Commercial Bank Nominees Limited A/C 915B 9,575,144 1.21%
Standard Chartered Kenya Nominees Limited A/C KE004553 7,737,449 0.98%
Kenya Commercial Bank Nominees Limited A/C NR1873738 6,998,964 0.89%
Standard Chartered Nominees Non-Resd. A/C 915A 6,879,617 0.87%
Standard Chartered Nominees Limited 6,241,665 0.79%
Stanbic Nominees Limited A/C NR4323488 5,823,892 0.74%
Stanbic Nominees Limited A/C NR7522171 5,327,622 0.67%
Total number of shares 474,976,781 60.06%

Number of Number of
Distribution of shareholders shares shareholders %
1 – 500 shares 2,519,605 13,448 0.32%
501 – 5,000 shares 15,827,774 9,889 2.00%
5,001 – 10,000 shares 6,693,681 936 0.85%
10,001 – 100,000 shares 38,635,356 1,312 4.89%
100,001 – 1,000,000 shares 116,058,048 355 14.68%
Over 1,000,000 shares 611,039,892 79 77.27%
Total 790,774,356 26,019 100.00%

EABL Directors’ shareholding as at 30 June 2021:

Number of
Director’s names shares
Caroline Musyoka 2,782
Jane Karuku 1,296
Ory Okolloh 720
Risper Ohaga 700

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 197

 PROXY FORM

I/WE_____________________________________________________________________________________________________________

Share A/c No_______________________________________________________________________________________________________

Of (Address) _______________________________________________________________________________________________________

Being a member(s) of East African Breweries Limited, hereby appoint: _________________________________________________________

Or failing him/her, the duly appointed Chairperson of the Meeting, to be my/our proxy, to vote for me/us and on my/our behalf at the
AnnualGeneral Meeting of the Company, to be held virtually, by electronic means on Tuesday, 14th September 2021 at 11:00 a.m. East African
Time (GMT+3) and at any adjournment thereof.

As witness I/We lay my/our hand (s) this _________________________ day of _________________________ 2021.

Signature _________________________ Signature __________________________

Please clearly mark the box below to instruct your proxy how to vote

RESOLUTION FOR AGAINST ABSTAIN

1. To receive, consider and adopt the audited Financial Statements for the year ended 30 th

June 2021 together with the Chairman’s, Directors’ and Auditors’ Reports thereon.
2. To re-elect directors:
a. Japheth Katto who has attained the age of 70 years, and being eligible, offers
himself for re-election.

b. Ory Okolloh who was appointed during the financial year to fill a casual vacancy
on the Board. She retires in accordance with the provisions of Article 116 of the
Company’s Articles of Association, and, being eligible, offers herself for re-election..
c. Dayalan Nayager who was appointed during the financial year to fill a casual
vacancy on the Board. He retires in accordance with the provisions of Article 116
of the Company’s Articles of Association, and being eligible, offers himself for re-
election.
d. Martin Otieno-Oduor, who retires by rotation in accordance with the provisions
of Article 117 of the Company’s Articles of Association, and being eligible, offers
himself for re-election.

e. John Ulanga, who retires by rotation in accordance with the provisions of Article
117 of the Company’s Articles of Association, and being eligible, offers himself for
re-election.
3. To elect the following Directors, being members of the Board Audit & Risk
Management Committee to continue to serve as members of the said Committee: -
John Ulanga; Japheth Katto; Jimmy Mugerwa; Leo Breen and Ory Okolloh
4. To receive, consider and if thought fit approve the Directors’ Remuneration Report and the
remuneration paid to the Directors’ for the year ended 30th June 2021.
5. To reappoint, PricewaterhouseCoopers (PwC) LLP as Auditors of the Company by virtue of
Section 721(2) of the Companies Act, 2015 and to authorize the Board of Directors to fix
their remuneration for the ensuing financial year.
Special Business
Change of Company Name

To consider and if thought fit to pass the following resolution as a special resolution, as
recommended by the Directors: -
“That the name of the Company be and is hereby changed from ‘East African Breweries Limited’
to ‘East African Breweries Plc’ in compliance with Section 53 of the Companies Act, 2015 and
with effect from the date set out in the Certificate of Change of Name issued in that regards by
the Registrar of Companies”.

198 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 ELECTRONIC COMMUNICATIONS CONSENT FORM

Please complete in BLOCK CAPITALS

Full name of Proxy(s): __________________________________________________________________________________________

_______________________________________________________________________________________________

_______________________________________________________________________________________________

Address: __________________________________________________________________________________________

__________________________________________________________________________________________

Mobile Number

Date: _______________________________________________ Signature: _____________________________________________

Please tick ONE of the boxes below and return to Image Registrars at P.O. Box 9287- 00100 Nairobi, 5th floor, Absa Towers (formerly
Barclays Plaza), Loita Street:

Approval of Registration
I/We approve to register to participate in the virtual Annual General Meeting of East
African Breweries Limited to be held on 14th September 2021.
Consent for use of the Mobile Number provided
I/WE would give my/our consent for the use of the mobile number provided for
purposes of voting at the AGM.

Notes:
1. If a member is unable to attend personally, this Proxy Form should be completed, signed and delivered (together with a power of attorney
or other authority (if any) under which it is assigned or a notarized certified copy of such power or authority) to EABL offices situated at EABL
Bustani Office, 5th Floor, Garden City Business Park, Block A, Garden City Road, off Exit 7 Thika Superhighway, Ruaraka, Nairobi P.O. Box 30161-
00100 Nairobi, or sent via email to [email protected] to arrive not later than Sunday, 12th September 2021 at 11:00 a.m. i.e. 48 hours before
the meeting or any adjournment thereof or, in the case of a poll taken subsequent to the date of the meeting, or any adjourned meeting,
not less than 24 hours before the time appointed for the taking of the poll which is taken more than 48 hours after the day of the meeting or
adjourned meeting.
2. If a member is unable to attend personally, this Proxy Form should be completed and delivered to EABL offices situated at EABL Bustani Office,
5th Floor, Garden City Business Park, Block A, Garden City Road, off Exit 7 Superhighway, Ruaraka, Nairobi P.O. Box 30161-00100 Nairobi, or
sent via email to [email protected] to arrive not later than Sunday, 12 September 2021 at 11:00 a.m. i.e. 48 hours before the meeting or any
adjournment thereof.
3. In case of a member being a corporate body, the Proxy Form must be under its common seal or under the hand of an officer or duly authorized
attorney of such corporate body.
4. As a shareholder you are entitled to appoint one or more proxies to exercise all or any of your shareholder rights to attend and to speak and
vote on your behalf at the meeting. The appointment of the Chairman of the meeting as proxy has been included for convenience. To appoint
as a proxy any other person, delete the words “the Chairman of the Meeting or” and insert the full name of your proxy in the space provided.
A proxy need not to be a shareholder of the Company.
5. Completion and submission of the form of proxy will not prevent you from attending the meeting and voting at the meeting in person, in
which case any votes cast by your proxy will be excluded.
6. In the case of a company being a shareholder then this proxy form must be executed under its common seal or signed on its behalf by an
officer of that company or an authorized attorney for that company.
7. A vote “abstain” option has been included on the form of proxy. The legal effect of choosing this option on any resolution is that you will be
treated as not having voted on the relevant resolution. The number of votes in respect of which votes are withheld will, however, be counted
and recorded, but disregarded in calculating the number of votes for or against each resolution.
8. The Company offices are open during normal business hours on any weekday (Saturday, Sunday and Kenya public holidays excluded) unless
closed for any other legal or legitimate reason. Unless stated otherwise, all timings quoted in this form of proxy are East African Time (GMT+3).

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 199

 FOMU YA UWAKILISHI
MIMI/SISI_________________________________________________________________________________________________________

Akaunti ya Hisa Nambar _____________________________________________________________________________________________

Wa (Anwani) ______________________________________________________________________________________________________

Nikiwa/tukiwa mwanachama/wanachama wa East African Breweries Limited, namteua/tunamteua: __________________________________

_______________________________________________________________________________

Na asipopatikana Mwenyekiti wa mkutano, kuwa mwakilishi wangu/wetu na kupiga kura kwa niaba yangu/yetu katika Mkutano Mkuu wa Kila
Mwaka wa kampuni utakaoandaliwa kwa njia ya kielektroniki Jumanne, 14 Septemba 2021 saa tano asubuhi (11:00 a.m.) saa za Afrika Mashariki
(GMT+3) na tarehe nyingine yoyote iwapo utaahirishwa.

Kama shahidi/mashahidi Naweka saini /Tunaweka saini tarehe _________________________ ya mwezi wa ______________________ 2021.

Saini _________________________ Saini __________________________

Tafadhali weka alama vyema kwenye kijisanduku hapa chini kumuelekeza mwakilishi wako/wenu jinsi ya kupiga kura

AZIMIO KUUNGA MKONO KUPINGA KUSUSIA

1. Kupokea, kutathmini na iwapo itakubalika, kuidhinisha Taarifa za Kifedha Zilizokaguliwa

za mwaka uliokamilika mnamo 30 Juni 2021 pamoja na ripoti za Mwenyekiti,
Mkurugenzi na Mkaguzi wa hesabu zilizomo.
2. Kuwachagua tena wakurugenzi:
a. Bw Japheth Katto aliyetimiza miaka 70, na, kwa kuwa amehitimu, anajiwasilisha
kuomba kuchaguliwa tena.

b. Ory Okolloh aliyeteuliwa wakati wa mwaka huo wa kifedha kujaza nafasi

iliyokuwa imetokea kwenye Bodi. Anastaafu kuambatana na Kifungu 116 cha
Sheria za Kuundwa kwa Kampuni, na, kwa kuwa amehitimu, anajiwasilisha
kuomba kuchaguliwa tena.
c. Dayalan Nayager aliyeteuliwa wakati wa mwaka huo wa kifedha kujaza nafasi
iliyokuwa imetokea kwenye Bodi. Anastaafu kuambatana na Kifungu 116 cha
Sheria za Kuundwa kwa Kampuni, na, kwa kuwa amehitimu, anajiwasilisha
kuomba kuchaguliwa tena.
d. Martin Oduor-Otieno, anayestaafu kwa mzunguko kuambatana na Kifungu 117
cha Sheria za Kuundwa kwa Kampuni, na, kwa kuwa amehitimu, anajiwasilisha
kuomba kuchaguliwa tena.

e. John Ulanga anayestaafu kwa mzunguko kuambatana na Kifungu 117 cha

Sheria za Kuundwa kwa Kampuni, na, kwa kuwa amehitimu, anajiwasilisha
kuomba kuchaguliwa tena.
3. Kuwachagua Wakurugenzi wafuatao, ambao ni wanachama wa Kamati ya Ukaguzi wa
Hesabu & Usimamisi wa Hatari, wachaguliwe kuendelea kuhudumu kama wanachama
wa Kamati hiyo: -
John Ulanga; Japheth Katto; Jimmy Mugerwa; Leo Breen na Ory Okolloh.
4. Kupokea, kutathmini na iwapo itakubalika, kuidhinisha Ripoti ya Malipo ya Wakurugenzi
kwa mwaka uliomalizika 30 Juni 2021.
5. Kuwateua tena, PricewaterhouseCoopers (PwC) LLP kuhudumu kama Wakaguzi wa
Hesabu wa Kampuni kwa mujibu wa Kifungu 721(2) cha Sheria za Kampuni, 2015
na kuwapa idhini Wakurugenzi wa Bodi kuamua malipo yao kwa mwaka wa kifedha
unaofuata.
Shughuli maalum
Kubadilishwa kwa jina la Kampuni

Kujadili na iwapo itakubalika, kuidhinisha azimio lifuatalo kama Azimio Maalum, kama
ilivyopendekezwa na Wakurugenzi: -
“Kwamba jina la Kampuni liwe na limebadilishwa kutoka kuwa “East African Breweries
Limited” na kuwa “East African Breweries plc” kwa kufuata Kifungu 53 cha Sheria za Kampuni,
2015 na hili kutekelezwa kuanzia tarehe iliyoandikwa kwenye Cheti cha Kubadilishwa kwa
Jina kilichotolewa kuhusiana na hili na Msajili wa Kampuni”.

200 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

 FOMU YA IDHINI YA MAWASILIANO YA KIELEKTRONIKI
Tafadhali jaza kwa HERUFI KUBWA

Jina kamili la mwakilishi (wawakilishi): _____________________________________________________________________________

_______________________________________________________________________________________________

_______________________________________________________________________________________________

Anwani: __________________________________________________________________________________________

__________________________________________________________________________________________

Nambari ya simu

Tarehe: ______________________________________________ Saini: _____________________________________________

Tafadhali weka alama katika MOJA kati ya visanduku vilivyo hapa chini na kuirejesha fomu hii kwa Image Registrars S.L.P. 9287- 00100
Nairobi, Ghorofa ya 5, jumba la Absa Towers (zamani ikiitwa Barclays Plaza), Loita Street:

Idhini ya kusajiliwa
MIMI/SISI ninatoa/tunatoa idhini ya kusajiliwa kushiriki katika Mkutano Mkuu wa Kila
Mwaka utakaofanyika kwa njia ya kielektroniki mnamo 14 Septemba, 2021.
Idhini ya kutumiwa kwa nambari ya simu iliyotolewa
NINGEPENGA/TUNGEPENDA kutoa idhini yangu/yetu ya kutumiwa kwa nambari ya
simu niliyotoa/tuliyotoa kwa ajili ya kupiga kura katika AGM.

Maelezo:
1. Iwapo mwanachama atashindwa kuhudhuria yeye binafsi, Fomu hii ya Uwakilishi inafaa kujazwa na kutiwa saini na ifikishwe (pamoja na idhini
kwa wakili au mamlaka nyingine yoyote (iwapo ipo) ambapo mamlaka yametolewa au barua yenye kiapo ya kutoa idhini au mamlaka hayo
kwa mhusika) kwa afisi za EABL zilizopo EABL Bustani Office, Ghorofa ya 5, Garden City Business Park, Jumba A, Barabara ya Garden City, kwa
kutumia Exit 7 katika Barabara Kuu ya Thika, Ruaraka, Nairobi S.L.P. 30161-00100, Nairobi au kwa njia ya barua pepe kupitia anwani eabl.agm@
eabl.com ili ifike si baada ya Jumapili,12 Septemba, 2021 saa tano asubuhi (11:00 a.m.), yaani si chini ya saa 48 kabla ya wakati wa kufanyika
kwa mkutano, au iwapo kura itapigwa katika tarehe nyingine baada ya mkutano, au mkutano ukiahirishwa hadi siku nyingine, sio chini ya saa
24 kabla ya wakati uliotengwa wa kupigwa kwa kura ambapo kawaida huwa ni zaidi ya saa 48 baada ya tarehe ya kuandaliwa kwa mkutano
au ya kuandaliwa kwa mkutano ulioahirishwa.
2. Iwapo mwanachama atashindwa kuhudhuria yeye binafsi, Fomu hii ya Uwakilishi inafaa kujazwa na ifikishwe kwa afisi za EABL zilizopo EABL
Bustani Office, Ghorofa ya 5, Garden City Business Park, Jumba A, Barabara ya Garden City, kwa kutumia Exit 7 katika Barabara Kuu ya Thika,
Ruaraka, Nairobi S.L.P. 30161-00100, Nairobi, au kwa njia ya barua pepe kupitia anwani [email protected] ili ifike si baada ya Jumapili tarehe
12 Septemba, 2020 saa tano asubuhi (11:00 a.m.), yaani si chini ya saa 48 kabla ya wakati wa kufanyika kwa mkutano, au siku yoyote ile nyingine
iwapo mkutano utaahirishwa.
3. Iwapo anayeteua mwakilishi ni kampuni au shirika, Fomu ya Uwakilishi inafaa kupigwa mhuri rasmi wa kampuni au kuidhinishwa na afisa au
wakili aliyeidhinishwa kuiwakilisha kampuni au shirika hilo.
4. Kama mwenyehisa, una haki ya kumteua mwakilishi au wawakilishi wa kutekeleza haki zote au baadhi ya haki zako kama mwenyehisa na
kuzungumza na kupiga kura kwa niaba yako katika mkutano. Uteuzi wa Mwenyekiti kama mwakilishi umetolewa kama njia moja ili kurahisisha
mambo. Ili kuteua mtu mwingine kuwa mwakilishi, piga kalamu maneno ‘Mwenyekiti wa Mkutano au” na uandike majina kamili ya mwakilishi
wako katika nafasi iliyotolewa. Mwakilishi sio lazima awe mwenyehisa wa Kampuni.
5. Kujazwa na kuwasilishwa kwa fomu ya uwakilishi hakutakuzuia wewe mwenyewe kuhudhuria na kupiga kura mkutanoni, ambapo iwapo
itafanyika kura itakayopigwa na mwakilishi wako haitahesabiwa.
6. Iwapo shirika au kampuni ndiyo mwenyehisa basi fomu ya uwakilishi inafaa kupigwa mhuri rasmi wa kampuni au kuidhinishwa na afisa au
wakili aliyeidhinishwa kuiwakilisha kampuni au shirika hilo.
7. Chaguo la “kususia” limeorodheshwa kwenye sehemu ya kupiga kura kwenye fomu hii ya uwakilishi. Matokeo ya kisheria ya kutumia chaguo hili
kwenye azimio lolote ni kwamba utahesabiwa kama mtu ambaye hakupigia kura azimio hilo. Idadi ya kura zilizosusiwa, hata hivyo, itahesabiwa
na kurekodiwa, lakini hazitatumiwa katika kuhesabu idadi ya kura zilizounga mkono au kupinga kila azimio.
8. Afisi za Kampuni huwa zimefunguliwa wakati wa saa za kawaida za kuendesha shughuli kila siku ya wiki (isipokuwa Jumamosi, Jumapili na siku
za mapumziko Kenya) isipokuwa tu ziwe zimefungwa kwa sababu nyingine za kisheria au halali. Isipokuwa kama imeelezwa vinginevyo, saa
zote zilizorejelewa kwenye fomu hii ni za Afrika Mashariki (GMT+3)

2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 201

Financial Statements for the year ended 30 June 2021
NOTES

202 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS

WAKATI WAKO
Corporate Governance Statement Statement of Corporate Governance

NI SASA

HAIRUHUSIWI KUUZWA WALA KUSAMBAZWA KWA WALIO CHINI YA UMRI2021

WAINTEGRATED
MIAKA REPORT
18. TAFADHALI KUNYWA KISTAARABU
& FINANCIAL STATEMENTS 203
Financial Statements for the year ended 30 June 2021

204 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS