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TANZANIA BREWERIES LIMITED Annual Report and Accounts 2008

TANZANIA BREWERIES LIMITED Annual Report and Accounts 2008 Annual... · 2018. 1. 10. · record of annual growth in profit since the Company was listed on the Dar es Salaam Stock

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Page 1: TANZANIA BREWERIES LIMITED Annual Report and Accounts 2008 Annual... · 2018. 1. 10. · record of annual growth in profit since the Company was listed on the Dar es Salaam Stock

TANZANIA BREWERIES LIMITEDAnnual Report and Accounts 2008

Page 2: TANZANIA BREWERIES LIMITED Annual Report and Accounts 2008 Annual... · 2018. 1. 10. · record of annual growth in profit since the Company was listed on the Dar es Salaam Stock
Page 3: TANZANIA BREWERIES LIMITED Annual Report and Accounts 2008 Annual... · 2018. 1. 10. · record of annual growth in profit since the Company was listed on the Dar es Salaam Stock

Tanzania Breweries Limited Page 1

10 Year Review 2

3

5

7

8

10

12

14

18

19

20

21

22

23

24

25

Group Cash Value Added

Chairman’s Statement

Vision, Mission & Company Values

Board of Directors

Report of the Directors

Corporate Governance

Managing Director’s Report

TBL Responsible Way

Statement of Directors’ Responsibilities

Report of the Auditors

Profi t & Loss Accounts

Balance Sheets

Statements of Changes in Equity

Cash Flow Statements

Index to Notes to Financial Statements

48Administration and Notice of Meeting

Contents

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Tanzania Breweries LimitedPage 2

Sales and Total AssetsTshs millions

Earnings and DividendsTshs millions

10 Year Review

2008 2007 2006 2005 2004 2003 *2002 2001 #2000 1998

Sales Tshs. M 383,181 314,878 260,628 229,644 197,982 174,048 135,059 125,082 144,795 123,538

Profit before income tax Tshs. M 109,168 95,603 85,584 69,332 57,471 47,635 34,218 29,121 31,554 24,285

Dividends declared Tshs. M 58,986 58,986 52,202 56,036 36,866 30,790 25,835 25,246 21,407 17,400

Cash flow from operations Tshs. M 83,467 79,011 60,099 67,489 42,248 43,242 30,069 32,127 28,530 23,700

Net cash invested to expand operations Tshs. M 58,723 30,475 15,121 3,771 4,822 2,723 3,309 827 5,845 10,199

Total borrowings Tshs. M 57,899 36,774 25,270 5,760 19,701 13,740 12,434 11,181 7,935 8,256

Gearing % 48 34 24 6 18 12 15 14 12 15

Market capitalisation Tshs. Bn 490 466 442 436 395 472 330 132 130 156

Earnings per share Tshs. 242 209 193 157 128 122 110 119 130 104

Earnings per share growth % 16 9 23 22 5 11 (8) (8) 25 25

# For fifteen months ended March 2000

* Tax holiday ended July 2001

Total Assets Sales Earnings Dividends

0 20062002 2003 2004 2005 20082007 2007

-0

10000

20000

30000

40000

50000

60000

70000

50000

100000

150000

200000

250000

300000

350000

400000

020062002 2003 2004 2005 20082007

10000

20000

30000

40000

50000

60000

70000

80000

2003 2004 2005 2006

Total Assets Sales Earnings Dividends

0 20062002 2003 2004 2005 20082007 2007

-0

10000

20000

30000

40000

50000

60000

70000

50000

100000

150000

200000

250000

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350000

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020062002 2003 2004 2005 20082007

10000

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2003 2004 2005 2006

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Tanzania Breweries Limited Page 3

# For fifteen months ended March 2000

* Tax holiday ended July 2001

20076%

61%1%

21%

11%

2008

6%

61%1%

23%

9%

Employees

State

Lenders

Shareholders

Retentions

20076%

61%1%

21%

11%

2008

6%

61%1%

23%

9%

Employees

State

Lenders

Shareholders

Retentions

Group Cash Value Added

31 March 2008

Tshs. M %

31 March 2007

Tshs. M %

Cash generated

Cash derived from sales 452,045 379,190

Cash paid to suppliers (183,706) (136,664)

Cash value added 268,339 100 242,526 100

Cash utilised to

Remunerate employees for their services (17,015) 6 (13,988) 6

Pay direct taxes to Government (30,662) 11 (27,473) 11

Pay excise duty and Value Added Tax (133,651) 50 (120,075) 50

Provide lenders with a return on borrowings (3,544) 1 (1,979) 1

Provide shareholders with cash dividends (60,649) 23 (52,294) 21

Cash disbursed among stakeholders (245,521) 91 (215,809) 89

Cash retained to fund replacement of assets and facilitate further growth 22,818 9 26,717 11

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Tanzania Breweries LimitedPage 4

Page 7: TANZANIA BREWERIES LIMITED Annual Report and Accounts 2008 Annual... · 2018. 1. 10. · record of annual growth in profit since the Company was listed on the Dar es Salaam Stock

Tanzania Breweries Limited Page 5

I am pleased to report that Tanzania Breweries Limited was voted The Most Respected Company in Tanzania from an East African survey undertaken by PricewaterhouseCoopers and Nation Newspapers. Tanzania Breweries has received this accolade for four consecutive years and is confident it will maintain this position. In an award ceremony organized by the Association of Tanzania Employers, TBL was named the overall winner in the Category of Human Resources in this year’s Employer of the Year Award ceremonies, first prize in the Staff Training and Development, Occupational Safety and Health and Large Enterprise category and second prize for the fight against HIV/AIDS, Corporate Social Responsibility and Employees Relations. During the year under review TBL was second runner-up for the President’s Manufacturer of the Year Award. These important awards acknowledge the company’s performance, reputation and good governance. These achievements were attained because of the commitment, dedication and hard work by the management and staff of the TBL Group. I would like to thank them all for their achievements.

In order for TBL to grow, the country’s infrastructure must be continuously improved and upgraded. Transport, water and electricity supplies require sustained improvement and upgrading. TBL shall co-operate with Government in pursuit of this objective.

I remain optimistic about what the future holds, not only for Tanzania Breweries Limited but also for the national economy. I am confident that TBL will continue its proud record of positive growth in earnings and dividends and its contribution to the economy of Tanzania.

I would like to thank the directors of TBL for their wise counsel and dedicated service during the past year. The good performance of the Group in the year under review is a testimony to their service. I look forward to their exemplary contribution to TBL as well as towards the development of Tanzania in the period ahead of us.

Cleopa David MsuyaChairman

The year under review was again most challenging for Tanzania Breweries Limited (TBL) due to higher fuel prices, a significant rise in key raw material input costs, and transport constraints caused by inadequate infrastructure. Nevertheless in this challenging environment, performance exceeded expectations, with the Group volume output rising by 7.8% to 2.7 million hectoliters which translated into an operating profit of Tshs 113 billion, a 16% improvement over last year. TBL maintained its proud record of annual growth in profit since the Company was listed on the Dar es Salaam Stock Exchange in 1998. The earnings per share increased from Tshs 209.1 per share to Tshs 242.2 per share, an improvement of 16% over the last year. Dividend per share for the year under review remained consistent with that of the prior year at Tshs 200.

TBL continues to make a significant contribution to Government revenues by way of corporate, excise and value added taxes. Payments to Government increased from Tshs147.5 billion to Tshs173.3 billion, an increase of 17.5% over last year.

In the year under review the Group continued to invest in the future of the business through appropriate investment in capital equipment. More than Tshs 58 billion was invested in fixed assets and a further Tshs 115 billion is planned for the coming year, which includes the construction of a new brewery in Mbeya and the installation of a state of the art packaging line at the Dar es Salaam brewery.These achievements are a testimony to the successful joint venture which was consumated when SABMiller, one of the largest brewers in the world, the Tanzanian Government and other shareholders invested in TBL. The joint venture has since benefited all shareholders, the national economy and the consumers of TBL products, as well as the committed and skilled labour force which makes TBL what it is.

Looking ahead, TBL is committed to focus on the following strategic objectives:

1) To produce and provide world class quality products and ser-vice to Tanzanian consumer at affordable prices;

2) To expand the use of locally produced raw materials which are competitive in price and quality; in this context and against the background of the increase of world commodity prices, TBL will continue to promote more barley production for use in our breweries;

3) To continue with the current efforts to increase export sales of our products to neighbouring countries.

A successful implementation of this strategic programme by TBL will contribute to Tanzania’s economic growth, job creation and poverty reduction, which are national policy objectives which we fully support.

As a corporate citizen of the nation, TBL has continued to make contributions to community projects and the emphasis in the past year has been on educational, environmental and health projects. Moving forward, TBL will prioritize sectors that will enhance the TBL image in the unfolding Tanzanian landscape, keeping national policy objectives in mind.

Chairman’s Statement

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Tanzania Breweries LimitedPage 6

Kama raia mwema, “Corporate Citizen”, Kampuni ya Bia Tanzania imeendeleza juhudi zake katika kuchangia kuleta maelendeleo kwa Jamii kwa kuwekeza kwenye nyanja za Elimu, Mazingira na Afya kwa jamii. Bila ya kusahau mahitaji na matakwa ya nchi, ni nia ya Kampuni kuendelea kuwekeza kwenye nyanja muhimu ambazo zitaweza kuinua sura na mwelekeo wa kampuni katika hali hii ya ushindani kibiashara.

Ninayo furaha kuwa Kampuni ya Bia Tanzania kwa mwaka wa nne mfululizo iliweza kupata Tuzo ya Kampuni inayoheshimika zaidi nchini Tanzania, tuzo itolewayo na PricewaterhouseCoopers na Kampuni ya Magazeti “Nation Newspapers” kutokana na tafiti mbali mbali za m akampuni yaliyoko katika Afrika ya Mashariki. Pamoja na tuzo hii, Kampuni ya Bia ilichaguliwa kuwa mshindi mkuu katika nafasi ya Rasili mali Watu kuwa Mwajiri Bora wa Mwaka , katika ngazi ya Mafunzo na Maendeleo ya Wafanyakazi, tuzo ambayo inatolewa na Chama cha Waajiri Tanzania “(Association of Tanzania Employers)”. Pamoja na kuongoza kwenye tuzo hizo, Kampuni pia iliweza kushika nafasi za pili kwenye Tuzo ya Raisi ya Mzalishaji Bora itolewayo na Confederation of Tanzania Industries, na tuzo nyingine ya Huduma kwa Jamii, Mwajiri mwenye Uhusiano mzuri na Mpambanaji na Vita dhidi ya UKIMWI itolewayo na Association of Tanzania Employers. Mafanikio haya ni ishara kubwa na yakutia moyo inayoonyesha jinsi Kampuni inavyojituma katika ufanisi wa makini katika shughuli zake za siku hadi siku mpaka kukubalika na kutambuliwa na wengi kwa sifa za kuheshimika nchini. Haya ni matokeo mema ya kutokana na kujitolea, kujituma na kufanya kazi kwa bidii, juhudi, mbinu, maarifa na ushirikiano mkubwa kwa Uongozi na Wafanyakazi kwa ujumla. Ningependa kuwashukuru wote kwa mafanikio hayo.

Ili Kampuni iendelee kukua hainabudi miundo mbinu ya nchi iendelee kuboreshwa na ni muhimu nishati ya umeme, maji na usafiri uwe wakuaminika na kuboreshwa kila wakati. Kampuni ya TBL itashirikiana na serikali kufanikisha nia hii.

Nina imani kubwa na hali nzuri na ya kuridhisha itakuwepo hapo usoni sio tu kwa Kampuni ya Bia, bali kwa nchi yetu ya Tanzania kiuchumi. Nina imani kabisa kwamba Kampuni ya Bia Tanzania itaendeleza rekodi yake ya mafanikio na ufanisi bora kiuzalishaji, kimasoko na kifedha ili kuwezesha kuendelea kukua kwa mapato yake na gawio kwa wanahisa, na pia kuongeza mchango wake katika uchumi wa nchi yetu ya Tanzania.

Ningependa kuwashukuru Wakurugenzi wa Bodi ya Kampuni kwa ushauri wao wa busara na kujitolea kutoa huduma katika kipindi chote cha mwaka uliopita. Utendaji huu mzuri ni dhihirisho la juhudi zao. Ni matumaini yangu kuwa, wataendelea na juhudi hizi ili kuiwezesha Kampuni izidi kupata mafanikio zaidi mwakani na kuiletea Tanzania mafanikio makubwa.

Cleopa David MsuyaMwenyekiti wa Bodi

Mwaka wa fedha ulioishia Machi 2008 ulikuwa ni mwaka mwingine tena uliokuwa na changamoto kubwa kwa kampuni ya Bia Tanzania (TBL) kwa sababu ya ongezeko kubwa la bei ya mafuta, kupanda kwa bei za mali ghafi na pia matatizo ya uchukuzi yaliyosababishwa na mapungufu katika miundombinu.

Pamoja na changamoto hizo, matokeo ya biashara kwa mwaka 2008 yalikuwa mazuri na yalivuka matarajio kwani kiasi cha bidhaa zilizozalishwa na TBL pamoja na Kampuni zake tanzu kilipanda kwa 7.8% hadi kufikia hektolita million 2.7 ambazo zilizalisha faida (kabla ya kulipa kodi na riba) ya Shillingi billion 113, ikiwa ni ongezeko la asilimia 16 zaidi ya mwaka uliopita. Kwa mara nyingine tena Kampuni ya Bia Tanzania imeendeleza rekodi yake nzuri ya ongezeko la faida kwa mwaka tangu Kampuni ilipoorodheshwa katika Soko la Hisa la Dar es Salaam mwaka 1998. Mapato kwa hisa yaliongezeka kutoka Shillingi 209.10 hadi kufikia Shillingi 242.2 kwa hisa, ikiwa ni ongezeko la asilimia 16 zaidi ya mwaka jana. Gawio kwa kila hisa lilibaki kama mwaka uliopita yaani Shillingi 200.

TBL inaendelea kutoa mchango mkubwa katika mapato ya Serikali kwa kulipa kodi ya mapato ya shirika, ushuru na kodi ya ongezeko la thamani. Malipo ya kodi yaliyofanywa Serikalini yameongezeka kutoka Shillingi bilioni 147.5 hadi kufikia Shillingi bilioni 173.3 ikiwa ni ongezeko la asilimia 17.5 zaidi ya mwaka jana.

Katika mwaka huu wa mapitio, TBL na kampuni zake tanzu imeendelea kuwekeza katika mustakabali wa biashara kwa kuwekeza kwenye mitambo muhimu inayotumika kuzalishia mali. Zaidi ya shillingi billioni 58 ziliwekezwa katika rasilimali za kudumu, na mwaka huu zaidi ya shillingi billioni 115 zimetengwa kwa matumizi ya ujenzi wa kiwanda kipya cha bia huko Mbeya na ununuzi na ufungaji wa mtambo mpya wa kisasa wa kujaza bia kwenye chupa kwenye Kiwanda cha Dar es Salaam.

Mafanikio haya ni ishara kamili ya juhudi zitokanazo na makubaliano ya kuingia ubia kati ya SABMiller, moja ya makampuni makubwa ya bia ulimwenguni, Serikali ya Tanzania pamoja na wadau wengine waliowekeza kwenye Kampuni hii. Makubaliano haya ya kibiashara yameweza kunufaisha pande zote zilizoshiriki, kuchangia kukua kwa uchumi mzima wa nchi yetu, wateja wetu wanaoburudishwa na bidhaa zetu na wavuja jasho ambao ndio wanaifanya Kampuni yetu kuwa kama ilivyo kwa kujipatia sifa mbali mbali zinazostahili.

Kwa mtazamo wa kipindi kijacho mbele yetu, Kampuni yetu imejizatiti kutekeleza malengo yafuatayo:

1) Kuzalisha na kusambaza bidhaa zilizo bora na zenye hadhi ya kimataifa pamoja na kutoa huduma kwa wateja wake kwa hali ya juu na gharama zinazokubalika

2) Kuongeza utumiaji wa mali ghafi zizalishwazo humu nchini, ambazo bei zake ni ahueni ukilinganisha na upatikanaji wa mali ghafi hizi ulimwenguni ambapo bei hizi hupanda siku hadi siku kutokana na hali halisi na mienendo ya bei za nafaka ulimwenguni kwa sasa. Kwa mantiki hii, Kampuni itajitahidi kuongeza ulimaji wa shayiri hapa nchini ili kuwezesha uzalishaji wa kimea cha kutosheleza mahitaji ya viwanda vyetu vyote.

3) Kuendeleza juhudi na mbinu za kuuza bidhaa zetu nje ya nchi hasa nchi jirani.

Kampuni yetu kuweza kutekeleza malengo na mbinu hizi kutailetea nchi yetu mafanikio makubwa hasa katika ukuaji wa uchumi wa nchi yetu, kuongeza upatikanaji wa ajira na kupunguza madhara yatokanayo na umasikini kwa Watanzania, ambayo ni baadhi ya malengo makuu ya nchi yetu ambayo Kampuni inaunga mkono moja kwa moja.

Taarifa ya Mwenyekiti

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Tanzania Breweries Limited Page 7

Vision, Mission & Company Values

VisionTo be the most admired Company in the beer industry in East Africa • The investment of choice • The employer of choice • The partner of choice

Mission To own and nurture local and international brands which are the first choice of the consumer

Values Our people are our enduring advantage • The caliber, passion and commitment of our people set us apart • We value and encourage diversity • We select and develop people for the long term • Performance is what counts

Accountability is clear and personal • We favour decentralized management and a practical maximum of local autonomy • Goals and objectives are aligned and clearly articulated • We prize both intellectual rigour and emotional engagement • We are honest about performance • We require and enable self-management

We work and win in teams • We actively develop and share knowledge within the Group • We consciously balance local and group interests • We foster trust and integrity in internal relationship • We encourage camaraderie and a sense of fun

We understand and respect our customers and consumers • We are endlessly concerned with our customers’ needs and perceptions • We build lasting relationships, based on trust • We aspire to offer the preferred choices of product and service • We innovate and lead in a changing world

Our reputation is indivisible • Our reputation relies on the actions and statements of every employee • We build our reputation for the long term • We are fair and ethical in all our dealings • We benefit the local communities in which we operate

Brand led... Consumer focussed.

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Tanzania Breweries LimitedPage 8

Board of DirectorsFor the year ended 31 March 2008

The Directors of the Company at the date of this report, all of whom have served since 1 April 2007, unless otherwise stated, are:

Hon. C.D. Msuya (Tanzanian)Chairman. He is the (Rtd) Vice President and Prime Minister and was appointed on the TBL Board on the 18 August 2005. For the year under review, he was an appointee of SABMiller Africa & Asia.

Mr. Mark Bowman (South African)Managing Director of SABMiller Africa appointed on the TBL Board in December 2007. He is an appointee of SABMiller, Africa and Asia.

Mr. D. Carruthers (British)Director of Marketing of SABMiller Africa & Asia, and has been serving the Board since July 2001. He is an appointee of SABMiller Africa & Asia.

Mr. C. McDougall (South African)Director of Operations, East Africa, for SABMiller Africa & Asia and the Managing Director, Tanzania Breweries Limited. He was appointed to the Board in May 2004. He is representing SABMiller Africa & Asia.

Mr. J.G. Kiereini (Kenyan)Chairman of East African Breweries Limited, who have appointed him to the Board with effect from January 2003.

Ambassador A.R. Mpungwe (Tanzanian)Businessman and Director of several companies, appointed by SABMiller Africa & Asia, in October 2001.

Mr. J. Haule (Tanzanian)He is the Deputy Permanent Secretary, Ministry of Finance, sitting on the Board as the Government’s representative with effect from March 2008.

Mr. R.O.S. Mollel (Tanzanian)(Rtd) Permanent Secretary, Vice President’s Office. Appointed to the Board in 1997, representing the Government of Tanzania up to April 2000, and from May 2002 to date, he is an appointee of SABMiller Africa & Asia, and is the Chairman of the Audit Committee.

Mr. G.H. Nel (South African)Senior Finance Manager, SABMiller Africa & Asia. Appointed to the Board in February 2005, and represents SABMiller Africa & Asia.

Dr. S.L. Tax (Tanzanian)She is the Permanent Secretary, Ministry of Industry, Trade and Marketing. She was appointed to the Board in February 2007, representing the Government of Tanzania.

Mr. A.B.S. Kilewo (Tanzanian)Former Executive Managing Director of Tanzania Breweries Limited, and the managing director of Tanzania Oxygen Limited. He was appointed in September 1999.

In accordance with the Company’s Articles of Association, the directors are not required to retire by rotation.

Directors who resigned during the year:

Mr. A.S Nyumayo (Tanzanian)Resigned 31 March 2008

Mr. A.C. Parker (British) Resigned 31 August 2007

Operating Board:

Mr. J.A. van Breda (South African)Finance Director

Mr. J. Cochran (South African)Marketing Director

Mr. P.J.I. Lasway (Tanzanian)Corporate Affairs Director

Mr. D. Mgwassa (Tanzanian)Sales & Distribution Director

Mr. S.F. Kilindo (Tanzanian)Company Secretary

Mr .T.W. Gray (South African)Technical DirectorAppointed 1 May 2007

Mr. G. Fischer (South African)Technical DirectorResigned 30 April 2007

Mr. K.A. Solo (Tanzanian)Human Resources DirectorResigned 30 September 2007

Tanzania Breweries Limited

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Tanzania Breweries Limited Page 9

Page 12: TANZANIA BREWERIES LIMITED Annual Report and Accounts 2008 Annual... · 2018. 1. 10. · record of annual growth in profit since the Company was listed on the Dar es Salaam Stock

Tanzania Breweries LimitedPage 10

Principal ActivitiesThe Company’s principal activities are the production, distribution and sale of malt beer and alcoholic fruit beverages (AFB’s) in Tanzania. It operates breweries in Dar es Salaam, Arusha and Mwanza and thirteen depots throughout the country. It also farms barley, which is used to produce malt at its malting plant in Moshi.

The Company partially owns and manages Tanzania Distilleries Limited, a spirituous liquor company that is situated in Dar es Salaam.

Tanzania Breweries Group owns some of Tanzania’s most popular liquor brands, notably: Safari Lager Kilimanjaro Premium Lager Konyagi

The Company also produces and distributes Castle Lager, Castle Milk Stout and Redds Premium Cold under licence from SABMiller Plc. The Company further manufactures and distributes certain East African Breweries (EABL) brands under licence, the most notable being Tusker Lager, Pilsner Lager and Guinness. Konyagi Ice is manufactured and dis-tributed under licence from Tanzania Distillers Limited. The subsidiary undertaking, Tanzania Distilleries Limited, also distributes Amarula and various other international brands of wines and spirits under licence from Distell (Pty) Limited of South Africa.

Review of Business and Future DevelopmentsSales for the year amounted to Tshs 383,181million (2007: Tshs 314,878million), resulting in a profit after taxation of Tshs 74,195million (2007: Tshs 63,913million).

The level of business and the year end position is satisfactory. The Com-pany will continue with its expansion and facility upgrade programme. The Directors consider that the future prospects of the Company and the Group are promising.

Dividend proposed and paidThe total dividend for the year was Tshs 200 per share, compared with Tsh 200 per share paid last year. Similar to last year, no special dividend has been proposed by the Board for the year under review. The dividend, as was the case last year, has been paid by way of a first and second interim dividend of Tshs 90 and Tshs 110 per share respectively

Employee WelfareThe Company provides medical services through its dispensary and other outside hospitals. Staff are entitled to access referral hospitals as the need arise.

The company places considerable value on the involvement of its employees and has continued its previous practice of keeping them informed on matters affecting them as employees. This is achieved through formal and informal meetings.

Disabled WelfareApplications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment with the company continues and that appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Political and Charitable DonationsThe company did not make any political donations during the year. Donations made to charitable organizations during the year amounted to Tshs 353 million (2007: Tshs 248 million).

AuditorsThe auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office as auditors and are eligible for re-appointment. A resolution proposing the re-appointment of PricewaterhouseCoopers as auditors of the Company for the year 2009 will be put to the Annual General Meeting. BY ORDER OF THE BOARD

Hon. C. D. Msuya Chairman

4 June 2008

Report of the DirectorsFor the year ended 31 March 2008

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Tanzania Breweries Limited Page 11

Shughuli KuuShughuli kuu za Kampuni hapa Tanzania ni kuzalisha, kusambaza na kuuza bia itengenezwayo kwa kimea; na vinywaji vilivyo na ladha ya matunda vyenye kileo. Kampuni inamiliki viwanda vya bia Dar es Salaam, Arusha na Mwanza, pamoja na vituo vya kuhifadhi na kuuza bia kumi na tatu kwenye mikoa mbali mbali hapa nchini. Pia Kampuni inajishughulisha na ulimaji wa zao la shayiri na ina mtambo wa kusindika shayiri ili kupata kimea huko Moshi.

Kampuni inamiliki na kusimamia sehemu ya Kampuni ya Tanzania Distilleries Ltd inayotengeneza vinywaji vikali iliyopo mkoani Dar es Salaam.

Kampuni ya Bia Tanzania (TBL) na Kampuni zake tanzu inamiliki bidhaa maarufu za vileo ambazo ni Safari Lager, Kilimanjaro Premium Lager, na Konyagi

Aidha Kampuni inatengeneza na kusambaza bia ya Castle, Castle Milk Stout na Redds Premium Cold kwa kibali cha SABMiller Plc. Pia Kam-puni inatengeneza na kusambaza baadhi ya bidhaa za Kampuni ya Bia ya Afrika Mashariki (EABL) kwa kibali. Bia ya Tusker, Pilsner Ice, Guin-ness na Guinness Malta ni bidhaa maarufu za EABL ambazo zinauzwa kwa jina la TBL. Konyagi Ice inatengenezwa na kusambazwa kwa kibali cha Kampuni ya Konyagi Tanzania (TDL). Kampuni Tanzu ya TBL, Kam-puni ya Konyagi Tanzania (TDL) inasambaza Amarula na bidhaa nyingine mbalimbali za kimataifa kwa kibali cha Kampuni ya Distell (Pty) Limited ya Afrika Kusini.

Taarifa fupi ya kibiashara na matarajio ya baadayeMauzo kwa mwaka ulioishia Machi 31 2008 yalifikia kiasi cha shillingi 383,181 millioni (shillingi 314,878 millioni mwaka 2007); faida baada ya kodi ya mapato shillingi 74,195 millioni (shillingi 63,913 millioni mwaka 2007) .

Hali ya kibiashara kwa kumalizia mwaka ni yakuridhisha kabisa. Kam-puni itaendelea na mipango yake ya kupanua na kukarabati miundo mbinu ya uzalishaji na usambazaji. Wakurugenzi wana imani na matu-maini makubwa kwa mafanikio ya kuridhisha ya Kampuni yetu kwa sasa na hapo baadaye.

Gawio Lililopendekezwa na KulipwaJumla ya gawio kwa mwaka lilikuwa shillingi 200 kwa kila hisa, sawa na ilivyokuwa mwaka uliotangulia. Kama ilivyokuwa mwaka uliopita, hakukuwa na gawio maalumu lililopendekezwa na Bodi kwa kipindi ha mwaka wa mapitio. Gawio kama ilivyokuwa kwa mwaka uliopita, imelipwa kama gawio la kwanza na la pili la shillingi 90 na shillingi 110 wa kila hisa kwa mfuatano huo.

Maslahi ya WafanyakaziKila mfanyakazi anapatiwa matibabu bure kupitia vituo vyetu vya matibabu na hospitali mbalimbali. Kama ikibidi wafanyakazi wanaweza kutibiwa kwenye hospitali za rufaa.

Kampuni inatilia maanani na kuthamini sana ushirikishaji na michango ya wafanyakazi katika uendeshaji wa Kampuni kwa kuhakikisha wanajulishwa kwa dhati kabisa mambo na matokeo yanayowahusu katika shughuli zao. Hii inafanyika katika mikutano na vikao vya mara kwa mara.

WalemavuMaombi ya kazi ya wenzetu walemavu hupewa nafasi sawa sawa kama walio na hali kamili, kulingana na uwezo na utaalamu wa mwombaji. Ikiwa mfanyakazi yeyote atapata ajali ya kumfanya mlemavu, kila juhudi zitafanywa kulinda ajira yake kwa kumpatia mafunzo yatakayomwezesha kuendelea na ajira yake. Kumsomesha, kumwendeleza na kumpandisha cheo kwa mfanyakazi mlemavu hakutofautiani na mfanyakazi mwingine kwani wote hupewa nafasi sawa kabisa.

Michango ya kisiasa na Huduma kwa JamiiKampuni haikutoa wala kushiriki kuchangia kwenye shughuli zozote za kisiasa kwa mwaka uliopita. Mchango wa Kampuni katika kuendeleza Jamii ilikuwa kiasi cha shillingi 353 millioni (shillingi 248 millioni 2007).

Wakaguzi wa HesabuPricewaterhouseCoopers, ambao ni wakaguzi wetu wa mahesabu kama walivyochaguliwa mwaka jana, wameonyesha nia yao ya kuendelea na kazi ya kukagua mahesabu yetu mwakani na ni mapendekezo wateuliwe tena kuendelea. Azimio la kuwakubalia kuendelea kuwa Wakaguzi wetu wa Mahesabu litapendekezwa kwenye Mkutano Mkuu wa Mwaka.

AGIZO LA BODI YA WAKURUGENZI

Mh C D MsuyaMwenyekiti

4 juni 2008

Taarifa ya WakurugenziHadi Machi 31, 2008

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Tanzania Breweries LimitedPage 12

Tanzania Breweries Limited continued to be committed to the highest standards of corporate governance set out in the Turnbull Report on Internal Control and appropriate best practice that has evolved from guidance issued by leading institutional investor bodies. The Board strives to provide the right leadership, strategic oversight, and control environment to produce and sustain delivery of value to all of the company’s shareholders. The Board applies integrity, principles of good governance and accountability throughout its activities and each director brings independence of character and judgment to the role. All of the members of the board are individually and collectively aware of their responsibilities to the company shareholders.

The Board of DirectorsThe Board consists of Non-Executive Directors and the Managing Director and meets quarterly and has a formal schedule of matters referred to it for decision but otherwise delegates specific responsibilities to the Operating Board and Group Audit Committee. It retains, however, overall responsibility for the activities of the Company, including the implementation of corporate strategy.

Group Audit CommitteeThe Group Audit Committee monitors and reviews the effectiveness of the internal control and the internal financial control of the Company and its subsidiaries.

The Group Audit Committee is a sub-committee of the Board and comprises of three Non-Executive Members. It is regulated by specific terms of reference and meets at least three times during the year. The Committee meets the external auditors and the internal audit departments to review inter alias, accounting, auditing, internal control, financial reporting matters and the published financial statements of the Company. The external auditors have unrestricted access, at all times, to the Group and subsidiary audit committees. Mr. R. O. S. Mollel has chaired the Group Audit Committee during the year.

The overall objective of the Group Audit Committee is to ensure that the Operating Board has created and maintained an effective control environment within the organization and that management demonstrates and stimulates the necessary respect of the internal control structure amongst all parties.

The Group Audit Committee members, as well as the internal and external auditors, have unlimited access to whatever information they require in performing their responsibilities.

The Company also has an Audit Sub-Committee which meets quartely and reviews the effectiveness of risk management processes; the appropriateness and adequacy of the systems of internal financial and operational controls. The Audit Sub Committee also tracks timeliness of management implementation of prior audit recommendations, and is chaired by the Group Internal Audit Manager.

Remuneration CommitteeWe are in the final stages of forming the remuneration committee that will be responsible for the assessment and approval of a broad remuneration strategy for the Company, including short term incentives for executive and senior management. The remuneration strategy is aimed at rewarding employees at market related levels and in accordance with their contribution to the Company’s operating and financial performance in terms of basic pay as well as short-term incentives.

Financial Statements and Annual ReportThe responsibility for the preparation of the financial statements is that of the Company’s Board of Directors. The financial statements are prepared in accordance with generally accepted accounting practices, consistently applied, and in accordance with the requirements of the Tanzania Companies Act 2002 and International Financial Reporting Standards (IFRS). Reasonable judgment and estimates support the information contained in the financial statements.

The Board of Directors is responsible for the integrity, objectivity, and reliability of the Annual Report. The Board of Directors believe that the financial statements fairly represent the financial position of the Company and the Group as at the end of the financial year and the results of its operations and cash flows for the year then ended.

External Auditors and our relationship with themThe external auditors are responsible for the independent review and the expression of an opinion on the truth and fairness of the financial statements.

During the year, PricewaterhouseCoopers continued as the auditors of the Company. The Group Audit Committee has kept under review its policy on, and the independence and objectivity of, the external auditors. The committee examines the processes for and the nature and quantum of non-audit projects awarded to the auditors for compliance with the committee’s policies. The committee is satisfied that the auditors have established internal policies and procedures to ensure services are not provided to the Company and its subsidiaries that would impair auditor independence. As a reassurance, the auditors are required to provide summary details highlighting relationships which the auditors consider might have a bearing on their independence and objectivity as well as written confirmation of independence and an assurance that all requirements for partner rotation have been met. The Group Audit Committee is satisfied that, for the period under review, the auditors have remained independent and objective in their assessments.

Corporate Governance

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Tanzania Breweries Limited Page 13

Relationship with ShareholdersDuring the year the Company held the statutory Annual General Meeting (AGM). A mandatory 21 days notice was issued together with annual reports detailing the Company’s operations under the year of review. The Company paid considerable care and attention to ensure that the AGM was once again an informative, productive and positive experience for all involved. The Company considers the AGM a key event in disseminating information to shareholders which gives them the opportunity to ask questions to the Board.

Prior to the meeting all members duly filed the registration forms including those who had proxy forms. The financial results were communicated directly to the various stakeholders including the regulator via the newspapers.

Share dealings by Directors and OfficersThe Company operates closed periods’ prior to publications of its interim and final results. The closed periods are from 1st October and1st April until the date of publication of the results. During these periods, directors, officers and employees of the Company may not deal in shares or any other instrument pertaining to the shares of the Company.

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Tanzania Breweries LimitedPage 14

Tanzania Breweries Group (TBL) has delivered another excellent performance for the twelve months ended 31 March 2008.

Sales revenue grew by 22% versus the same period last year, and operating profit by over 16%. The growth in sales was mainly due to organic growth in lager beer.

Despite a slow start during the first quarter of the financial year as a result of the lateness of the long rains and a slight market share loss, lager beer volumes grew by a healthy 7.4% during the year with the South and North West Regions performing particularly well.

In the past year, numerous innovations to our brand portfolio were introduced. In April 2007, Eagle Lager, a sorghum-based beer, was introduced in the North East part of the country. In September 2007, Kilimanjaro Premium Lager was made available in a long 500ml neck bottle. Brand Tusker followed in December 2007. During the last quarter of 2007 the more modern 330ml can was introduced on all brands.

During the past financial year, some of the key marketing activities included the ongoing support for the following activities: the Safari National Pool Competition, Kili Basketball on a national basis, and the Kilimanjaro Marathon and Music Awards. The Tusker Challenge Cup continued as an event on the football calendar, and the year ended with the announcement of the Safari Lager sponsored Taifa Cup tournament. In addition to these sponsorships, regional market activation programmes were implemented, the biggest one being the “Ndovu Special Millionaire” crown underliner promotion that rewarded consumers on a daily basis for 60 days.

A number of important distribution optimization initiatives were implemented during the year. New depots were opened in Dar es Salaam and Musoma, a modern interlocking crate was introduced, and mechanized loading was increased through the introduction of additional fork-lift trucks and a more appropriately designed distribution fleet. The Company revised its internal measurement and control of its delivery service to customers through the introduction of a distribution information systems process.

TBL is determined to ensure its distribution network reaches all consumers, hence:

• A central planning department was set up that improved the sales, demand and production planning ability of the company.

• The company has reorganized its national sales team to ensure better coverage and service to the retail trade, as it strives to improve its channel and trade marketing capabilities.

Wine and spirits recorded excellent volume growth of 24% compared to last year. The implementation of tax stamps by the TRA continue to assist but the installation of additional production capability also had a positive effect on trading results. Tanzania Distilleries’ market share continues to improve.

The Company has implemented SABMiller’s sustainable development framework and has made good progress in all areas, focusing primarily on the reduction in water and energy usage.

Working with the community is another important contribution that TBL has made in Tanzania. A total of Tshs 353 million was spent on various community projects, with education projects receiving a 61% share, environmental projects 12%, water and welfare 17%, and health 10%.

The Company’s financial performance was hampered by the depreciation of the Tanzanian shilling, mainly against the euro, resulting in increased pressure on the cost of imported goods and raw materials. The significant rise in fuel prices and the interrupted electricity and water supply also had a negative impact on financial performance. During the year additional funds had to be allocated to people retention and plant maintenance.

The Group’s cash generated from operating activities exceeded Tshs 117 billion of which Tshs 34 billion was utilised to pay corporate tax and interest, Tshs 58 billion funded capital expenditure while the remaining balance went towards funding most of the Tshs 60 billion paid as dividends to shareholders. The Company plans a further Tshs 115 billion capital expenditure programme in Financial Year 2008/9 which includes the construction of a new brewery in Mbeya and the installation of a state of the art packaging line in Dar es Salaam.

Total production volumes for the year were 9% higher than the previous year with all breweries reflecting an improved performance in efficiencies and product quality. The Company’s breweries continue to participate in SABMiller’s ‘Manufacturing Way’ programme and will be implementing revised processes and initiatives that will assist in improvement in TBL’s manufacturing area.

The Company has set in motion a programme to intensify barley growing in the country, with the intention of producing more malt and further improve barley growers’ farming methods.

TBL firmly believes that people make the difference, and the Company continues to invest in the development of its staff. During the past year, the Company spent 4.5% of pay costs on training and development.

The Company improved its capability in the Training and Development field with the introduction of full time local Tanzanian Competency Acquisition assessors in the technical department. This is part of the continuous process of training and empowering TBL staff through training at a SABMiller training centre in South Africa. Two of the three breweries and the malting plant are manned by Tanzanians who have been through SABMiller stringent training programs.

The Company remains committed to the fight against HIV/AIDS, continuing with HIV/AIDS education and awareness campaigns aimed at equipping employees with life skills that will influence behav-

Managing Director’s Report

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Tanzania Breweries Limited Page 15

iour change and prevent infection. The treatment of opportunistic infections and Sexual Transmitted Diseases (STDs) is provided at all TBL medical facilities.

A major area of focus moving forward will be on improving the Company’s capability and ability to improve its total service to retailers. This will be done through specific interventions in the sales and marketing departments, as TBL strives to regain market share. The Company is looking at outsourcing as many of these activities as possible to Tanzanians.

A key factor affecting the Company’s future performance will be the Government Authorities’ ability to upgrade and enhance infrastructure relating to power, communication, water and transport.

To enable the Company to finance its expansion programme and working capital requirements for next year, the Company will need to increase its borrowings by Tshs 100 billion as well as revising the dividend payout ratio down to 70%, from the current level of 80%.

The executive management team remains optimistic that the Tanzania Breweries Group will maintain its proud record of achieving positive earnings growth for the year ahead.

Craig McDougallManaging Director

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Tanzania Breweries LimitedPage 16

Kampuni ya Bia Tanzania (TBL) kwa mara nyingine tena imefanya vizuri kiutendaji kwa kipindi cha miezi kumi na mbili cha mwaka ulioishia tarehe 31 Machi 2008.

Mapato kutokana na mauzo ya bidhaa zake yalikua kwa asilimia 22 ikilinganishwa na kipindi kama hicho mwaka jana, na faida ya uendeshaji ilikua kwa zaidi ya asilimia 16. Ongezeko katika mapato ya mauzo limetokana na ukuaji kwenye mauzo ya bia.

Ingawa kasi ya biashara katika kipindi cha miezi mitatu ya mwanzo ya mwaka wa fedha 2008 ilikuwa ya kusuasua kutokana na kuchelewa kwa mvua za masika na kupoteza kwa asilimia ndogo ya soko, mauzo ya bidhaa za bia zilizouzwa kwa mwaka mzima yalikua kwa asilimia 7.4, kanda ya Kusini na Kaskazini Magharibi zikiongoza kwa mauzo.

Kwa mwaka uliopita jitihada mbalimbali za ubunifu zilifanywa ili kuboresha baadhi ya bidhaa zetu. Mwezi April 2007 aina mpya ya bia ijulikanayo kama “Eagle Lager” inayotengenezwa kwa kutumia kiasi kikubwa cha mtama kama mali ghafi, ilizalishwa na kuuzwa kwenye Kanda ya Kaskazini Mashariki. Mwezi wa Septemba 2007 Kilimanjaro Premium Lager ilianza kuwekwa kwenye aina mpya ya chupa zenye shingo ndefu, ikifuatiwa na Tusker Lager mwezi December 2007. Kwenye kipindi cha miezi ya mwisho wa mwaka 2007, aina mpya na ya kisasa ya kopo lenye ujazo wa mililita 330 kwa aina zote za bia lilizunduliwa.

Kwenye kipindi cha mwaka jana aina na mbinu mbali mbali za muhimu zilibuniwa katika shughuli za masoko, zikijumlisha udhamini wa bia ya Safari kwenye mchezo wa mezani kitaifa “ Safari National Pool Competition”, mchezo wa kikapu kwenye hadhi ya kitaifa (Kili Basketball), mbio ndefu za nyika (Kilimanjaro Marathon) na tuzo ya muziki ya Kilimanjaro (Kilimanjaro Music Award). Kwa mwaka mwingine mfululizo mashindano ya mpira wa miguu ya Tusker (Tusker Challenge Cup) yalifanyika na dau lake kuboreshwa zaidi. Kwa kufunga mwaka, Kampuni ya Bia Tanzania ilikubali kudhamini mashindano ya Mpira wa Miguu ( Safari Lager Taifa Cup). Licha ya udhamini wa matukio haya, Kampuni bado iliweza kudhamini mashindano mbalimbali katika ngazi za mikoa, kubwa zaidi ikiwa na udhamini wa “Ndovu Special Millionaire”, ambapo washindanaji walikuwa wanapata zawadi mbalimbali kutokana na zawadi zilivyojiorodhesha na kufichwa ndani ya kizibo kila siku kwa muda wa siku sitini.

Tumekuwa tukiboresha shughuli za usambazaji wa bidhaa zetu ili kutuwezesha kuwafikia wateja wetu kila mahali na kwa ufanisi zaidi. Vituo vipya vya kuhifadhi na kuuzia idhaa zetu zilifunguliwa huko Ubungo Dar es Salaam na Musoma. Aidha aina mpya ya masanduku yanayojifunga ili kuhakikisha hayaanguki kwa urahisi yalitengenezwa na kuanza kutumika. Kurahisisha na kuboresha upakiaji na upakuaji wa bia kwenye magari nao ulienda sambamba na kununuliwa kwa mitambo mingi zaidi na kubadilisha magari ya uzambazaji yaweze kutumika kwa njia hii bila ya kutumia nguvu za ziada. Ili kuwezesha

wateja wetu waende sambamba na juhudi za Kampuni kuboresha utendaji wake wa kazi za kila siku, ilibidi kuanzisha utaratibu wa kupima utendaji na uendeshaji wa shughuli za kila siku kwa wateja wetu kwa kuanzisha mfumo wa kupeana taarifa za mara kwa mara “Distribution Information Systems Control” Mfumo wa kupanga shughuli za mauzo na uzalishaji “Central Planning Department” ulianzishwa ili kuboresha uwezo wa Kampuni wa kukisia mauzo kwa undani zaidi na kuwezesha uzalishaji ufanywe kukidhi mahitaji ya soko. Kampuni imebidi kuangalia na kuunda upya Idara ya Masoko ili kuhakikisha huduma kwa wateja wetu inafanyika kwa ubora zaidi na kuipa uwezo wakuwafikia wateja kwenye maeneo mengi na makubwa zaidi kuliko mwanzo.

Biashara ya mvinyo na pombe kali nayo ilionyesha mafanikio makubwa kwa kukua kwa asilimia 24 ukilinganisha mwaka jana.

Udhibiti unaofanywa na Mamlaka ya Kodi (TRA) kwa wakwepa kodi ambao unalazimu matumizi ya stempu umeendelea kusaidia ukuaji wa biashara yetu lakini pia kuongezeka kwa uwezo wa uzalishaji umesaidia kupata matokeo mazuri. Asilimia ya soko ya TDL inazidi kuongezeka.

Kampuni imetekeleza mwongozo uliopo katika Mpango mkubwa wa SABMiller wa Maendeleo endelevu “Sustainable Development Framework”. Maendeleo makubwa yamepatikana kwenye maeneo mbali mbali na mkazo mkubwa umewekwa kwenye kupunguza matumizi ya maji na nishati.

Kufanya kazi pamoja na jamii ni mchango mwingine ambao Kampuni inajivunia. Jumla ya Shilingi milioni 353 zimetumika katika miradi mbalimbali ya maelendeleo ya jamii, kama elimu iliyopata asilimia 61, Miradi ya Mazingira asilimia 12, Maji na Ustawi wa Jamii asilimia 17, na Afya asilimia 10.

Utendaji wa Kampuni kama unavyoripotiwa katika taarifa ya fedha umeathiriwa na kushuka kwa thamani ya Shilingi ya Kitanzania dhidi ya sarafu Euro. Hali hii ilizidi kuongeza mzigo wa gharama za bidhaa na malighafi zinazoagizwa kutoka nje ya nchi. Ongezeko maradufu la bei ya mafuta na uhaba wa upatikanaji wa umeme na maji pia vimechangia kwa kiasi kikubwa katika kuathiri matokeo ya biashara yetu katika mwaka ulioishia Machi 2008. Katika kipindi hiki, ilibidi pia fedha kutumika kuhifadhi watu kwenye kampuni na kwa ukarabati wa kiwanda.

Kampuni ya Bia Tanzania na kampuni yake tanzu iliweza kukusanya zaidi ya shillingi billioni 117 kutoka kwenye shughuli zake za kiutendaji. Kati ya hizo fedha zilizokusanywa, billioni 34 zilikuwa ni kulipia kodi ya mapato na riba, shillingi billioni 58 zilitumika kugharamia rasilimali za kudumu na kiasi kilichobaki cha shillingi billioni 60 zilitumika kulipa gawio kwa wanahisa. Kwa kipindi cha mwaka 2008/2009 Kampuni imepanga kutumia kiasi cha shillingi billioni 115 kwa kuwekeza kwenye miradi mbalimbali, mkubwa ukiwa ni ujenzi wa Kiwanda kipya cha Bia huko Mbeya na kufunga mtambo mpya na wa kisasa wa ujazaji bia kwenye Kiwanda cha Dar es Salaam.

Taarifa ya Mkurugenzi Mkuu

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Tanzania Breweries Limited Page 17

Kuwezesha Kampuni kutekeleza mpango wake kabambe wa upanuzi na ujenzi wa viwanda na upatikanaji wa shayiri ya kutosha hapa nchini, Kampuni itabidi kuongeza matumizi yake ya kuwekeza kwenye rasimali za kudumu. Hii ina maana ya kuwa Kampuni itabidi kukopa fedha nyingi kwenye sehemu mbali mbali ili kupata kiasi cha shillingi billioni 100, na kushusha kiwango cha gawio kutoka asilimia 80% hadi 70% .

Pamoja na hayo Menejimenti ina imani na matumaini makubwa kwamba TBL na Kampuni yake tanzu ya TDL itaendelea na rekodi yake safi na ya kujivunia ya kupata matokeo mazuri ya mapato na ongezeko la gawio katika mwaka mpya wa fedha unaokuja.

Craig McDougallMkurugenzi Mkuu

Kiasi cha jumla cha bidhaa zilizozalishwa kwa mwaka uliopita uliongezeka kwa asilimia 9. Ongezeko hili lilichangia katika matumizi mazuri ya viwanda kiutendaji na uzalishaji wa bidhaa zenye ubora wa hali ya juu. Viwanda vyote vimeendelea kutekeleza na kutumia mwongozo ulioko kwenye Sera ya Uzalishaji ya SABMiller “ SAB-Miller Manufacturing Way”. Idara ya Ufundi itaongoza na kuwa mstari wa mbele kutekeleza mwongozo huu ili kuiwezesha Kampuni ya Bia kuongeza kwa kasi kubwa uzalishaji kwa hali ya juu na yakimataifa.

Kampuni imeweka mkakati wa kuongeza uzalishaji wa shayiri nchini, kwa lengo la kuzalisha kimea kwa wingi na pia kuendeleza njia bora za ulimaji wa shayiri.

Kampuni ya Bia inaamini na inajua kiundani kabisa kwamba watu ndio wanaoleta mafanikio na ufanisi mkubwa. Kwa kuelewa hivyo Kampuni ilitumia kiasi cha asilimia 4.5 ya gharama zake kwa kuwekeza kwenye maendeleo ya Wafanyakazi katika nyanja za elimu.

Kutilia mkazo zaidi katika sehemu hii nyeti Kampuni imeona umuhimu wa kumweka mtu atakayeshughulikia sera za kutafuta wafanyakazi wenye vipaji kwenye nyanja mbali mbali na kuhakikisha vipaji hivi vinatunzwa na kuvijali. Hii ni sehemu ya hatua zinazoendelea za kuwafundisha na kuwawezesha wafanyakazi wa TBL kupitia kituo cha mafunzo cha SABMILLER kilichopo Afrika Kusini. Matokeo ya juhudi hizi yamepelekea viwanda vyetu viwili kati ya vitatu vinavyotengeneza bia na kimea kuendeshwa na Watanzania ambao wamepitia kituo cha mafunzo cha SABMILLER.

Kampuni inaendelea na dhamira yake ya kupambana na maambukizi ya virusi vya UKIMWI na inaendelea na kampeni ya kutoa elimu na kuongeza uelewa wa ugonjwa wa UKIMWI ambayo itawapa wafanyakazi wetu mbinu zitakazowafanya wabadili tabia and kuzuia maambukia mapya ya UKIMWI miongoni mwa wafanyakazi. Matibabu ya magonjwa shirikishi na HIV/AIDS pamoja na yale ya zinaa huwa yanatolewa bure katika zahanati za Kampuni. Wafanyakazi walioathirika na UKIMWI ambao chembe chembe zao za kupambana na magonjwa zimepungua (CD4 count) wanapewa bure vidonge vya kurefusha maisha (ARV). Huduma hii hutolewa pia kwa familia zao.

Mkazo mkubwa katika siku za usoni ni utekelezaji wa mipango kabambe wakuboresha uwezo wetu wa kuwahudumia wateja na kuwawezesha waweze kufanya shughuli hii ya usambazaji na uuzaji wa bia uendeshwe kitalaamu na kwa ufanisi mkubwa. Hii itabidi kufanya marekebisho ya lazima na ya kiukweli kwenye Idara za Masoko na Mauzo ili kuiwezesha Kampuni kurudisha asilimia ya soko iliyopoteza kwa washindani wetu.

Ufanisi wa Kampuni kwa siku zijazo utategemea uwezo wa mamlaka husika katika kufanikisha na kuongeza ubora wa miundo mbinu inayoambatana na upatikanaji wa umeme, mawasiliano, maji na uchukuzi. Eneo lingine ambalo linaweza kuathiri kampuni ni kodi ya bidhaa, na kodi zingine mbalimbali pamoja na kuporomoka kwa uimara wa shilingi.

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Tanzania Breweries Limited

1. Responsible alcohol useTBL Group practices and promotes the responsible use of alcohol by those who have decided to consume our products, while at the same time endeavouring to prevent alcohol misuse and abuse.

2. Alcohol policyOur alcohol policy sets a consistent national standard that TBL group companies must meet or exceed, and is integral to how we do business.

3. Employees behaviorTBL group companies have employee alcohol policy in place, which provides guidelines on responsible behavior.

4. Commercial communication Our Compliance Committee meets periodically to monitor and review commercial communications presented by respective directorates, and develop recommendations and endorsements while ensuring that these comply with the Company Alcohol Policy, existing legislation, statutory regulations and self-regulatory codes and the SABMiller plc Code of Commercial Communication.

5. Drinking and driving In partnership with the National Road Safety Council and Tanzania Police Force we have continued to remind drivers and the community through our campaign Drink Responsibly Drive Responsibly.

6. Under age drinkingOur underage restriction signage “Watoto chini ya miaka 18 hawaruhusiwi” reminds all parents and the community that we are active partners with them in efforts to prevent underage access in line with the liquor law.

Our cooperation with retail sales people presents a united front and strengthens the retailers’ hand in refusing alcohol sales to anyone under the age of 18.

7. Trade Brewing We have been hosting Barman’s guild or Beer connoisseurs training for retail establishments to equip our partners with the skills necessary to serve alcohol responsibly as well as intervene effectively with those who may have over-consumed. The program has been directed at bartenders, waiters/waitresses at beer outlets and restaurants, store clerks and managers in bulk stores, liquor and grocery stores.

Page 18

1. Matumizi mazuri ya vileoTBL na kampuni zake tanzu inatumia na kuhimiza matumizi mazuri ya vileo kwa wale walioamua kutumia bidhaa zetu, na wakati huohuo tukijitahidi kuzuia matumizi yasiyofaa na mabaya ya vileo.

2. Sera ya vileoSera yetu ya vileo imeweka viwango vya kitaifa vilivyo thabiti ambavyo TBL na kampuni zake tanzu inapaswa kuvifikia au kuvipita, na ni muhimu kwa jinsi tunavyofanya shughuli za Kibiashara.

3. Tabia za wafanyakaziTBL na kampuni zake tanzu ina sera ya vileo kwa wafanyakazi inayotumika ambayo inatoa miongozo kuhusiana na matumizi mazuri na ya kuwajibika ya vileo.

4. Mawasiliano ya kibiasharaKamati yetu ya Ridhaa inakutana mara kwa mara ili kufuatilia na kupitia mawasiliano ya kibiashara yanayowasilishwa na kurugenzi husika, na kutoa mapendekezo na idhini na wakati huo huo ikihakikisha kuwa yanakubaliana na Sera ya Vileo ya Kampuni, Sheria zilizopo, kanuni zilizokubalika na kanuni za udhibiti binafsi na Kanuni za SABMiller za Mawasiliano ya Kibiashara.

5. Kunywa vileo na kuendesha gariKwa kushirikiana na Baraza la Taifa la Usalama Barabarani na Jeshi la Polisi Tanzania, tumeendelea kuwakumbusha madereva na wananchi kupitia kampeni yetu, Kunywa kwa Kiasi Endesha kwa Uangalifu.

6. Unywaji vileo katika umri mdogoMsemo wetu wa kudhibiti matumizi ya vileo katika umri mdogo, “Watoto chini ya miaka 18 hawaruhusiwi” unawakumbusha wazazi na jamii yote kuwa tunashirikiana nao katika jitihada zetu za kuzuia watoto kupata mwanya wa kutumia vileo kama sheria ya vileo inavyosema.

Ushirikiano wetu na wauzaji reja reja wa bidhaa zetu ni nguvu thabiti inayowaimarisha wauzaji hao katika kuhakikisha hawauzi vileo kwa yeyote mwenye umri chini ya miaka 18.

7. Biashara ya Utengenezaji wa VileoTumekuwa tukidhamini mafunzo ya vyama vya wenye baa na pia magwiji wa bia yanayohusiana na uanzishaji wa bishara za rejareja ili kuwapa washirika wetu ujuzi wa kutoa huduma kwa kiasi pamoja na kuwadhibiti ipasavyo wale wote watakaokuwa wametumia vileo kupita kiasi. Jitihada hizi zimeelekezwa kwa wahudumu wa kiume na wa kike katika baa na migahawa na kwa makarani na mameneja wa maduka ya jumla ya vileo na ya vyakula.

TBL Responsible Way - Kuwajibika kwa TBL

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Page 19

The Tanzanian Companies Act 2002 requires the directors to prepare financial statements for each financial period that give a true and fair view of the state of affairs of the company and the group as at the end of the financial period and their profit or loss. It also requires the directors to ensure that the company keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the company. The directors are also responsible for safeguarding the assets of the company.

The directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and the requirements of the Tanzanian Companies Act 2002. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the company and the group and of their profit in accordance with International Financial Reporting Standards. The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the company and the group will not remain a going concern for at least twelve months from the date of this statement.

Hon. C. D. MsuyaChairman 4 June 2008

Statement of Directors’ ResponsibilitiesFor the year ended 31 March 2008

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Tanzania Breweries LimitedPage 20

Report of the Independent Auditor

We have audited the accompanying consolidated financial statements of Tanzania Breweries Limited, which comprise the balance sheets as at 31 March 2008, and the profit and loss accounts, statements of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Directors’ responsibility for the financial statementsAs described in the Statement of Directors’ Responsibilities, the company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and with the requirements of the Tanzanian Companies Act 2002. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion.

OpinionIn our opinion, the accompanying financial statements give a true and fair view of the state of the company’s and group’s affairs as at 31 March 2008 and of their profits and cash flows for the year then ended in accordance with International Financial Reporting Standards and have been properly prepared in accordance with the Tanzanian Companies Act 2002.

Report on Other Legal and Regulatory RequirementsThis report, including the opinion, has been prepared for, and only for, the company’s members as a body in accordance with the Tanzanian Companies Act 2002 and for no other purposes.

As required by the the Tanzanian Companies Act 2002, we are also required to report to you if, in our opinion, the Directors’ Report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and transactions with the company is not disclosed.

Certified Public Accountants 4 June 2008Dar es Salaam Signed by Michael M. Sallu

to the members of Tanzania Breweries Limited For the year ended 31 March 2008

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Tanzania Breweries Limited Page 21

Profit & Loss Accounts

Notes and related statements forming part of these financial statements appear on pages 26 to 47

Group Company

Notes 2008 2007 2008 2007

Sales 383,181 314,878 346,771 287,144

Cost of sales 6 (205,722) (167,948) (186,418) (152,968)

Gross profit 177,459 146,930 160,353 134,176

Selling and distribution costs 6 (44,537) (31,663) (41,896) (30,646)

Administrative expenses 6 (21,062) (18,110) (19,473) (16,088)

Other income 8 852 425 3,411 4,791

Operating profit 112,712 97,582 102,395 92,233

Finance costs 9 (3,544) (1,979) (3,095) (1,832)

Profit before income tax 109,168 95,603 99,300 90,401

Income tax expense 10 (34,973) (31,690) (31,453) (28,925)

Profit for the year 74,195 63,913 67,847 61,476

Attributable to:

Minority interests 2,763 2,248

Equity holders of the Company 71,432 61,665

Basic earnings per share (Tshs) 11 242.2 209.1

Diluted earning per share(Tshs) 11 242.2 209.1

Dividend per Share (Tshs) 12 200.0 200.0

For the year ended 31 March 2008(All amounts in Tshs M)

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Tanzania Breweries LimitedPage 22

Directors approved the financial statements on pages 21 to 47 on 4 June 2008 and they were signed on their behalf by:-

Hon. C. D. Msuya

Notes and related statements forming part of these financial statements appear on pages 26 to 47

Group Company

Notes 2008 2007 2008 2007

ASSETS

Non-current assets

Property, plant and equipment 13 137,737 92,652 134,840 91,017

Intangible assets 26 40,017 40,108 387 478

Investments 14 369 369 45,388 45,388

178,123 133,129 180,615 136,883

Current assets

Inventories 15 49,874 32,843 44,250 29,817

Accounts receivable 16 21,766 13,512 23,329 14,806

Bank and cash balances 17 10,572 17,100 8,940 14,691

82,212 63,455 76,519 59,314

Total assets 260,335 196,584 257,134 196,197

EQUITY

Capital and reserves attributable to the Company’s equity holders

Share capital 23 29,493 29,493 29,493 29,493

Share premium 45,346 45,346 45,346 45,346

Retained earnings 46,379 33,933 46,529 37,668

121,218 108,772 121,368 112,507

Minority interests 2,041 659 - -

Total equity

123,259 109,431 121,368 112,507

LIABILITIES

Non-current liabilities

Deferred income tax 20 9,691 7,594 9,405 7,430

Provisions 27 417 401 417 401

10,108 7,995 9,822 7,831

Current liabilities

Trade and other payables 18 65,981 41,510 65,669 39,527

Borrowings 19 57,899 36,774 57,437 35,551

Income tax payable 3,088 874 2,838 781

126,968 79,158 125,944 75,859

Total liabilities 137,076 87,153 135,766 83,690

Total equity and liabilities 260,335 196,584 257,134 196,197

Balance SheetsAs at 31 March 2008(All amounts in Tshs M)

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Tanzania Breweries Limited Page 23

Notes and related statements forming part of these financial statements appear on pages 26 to 47

Attributable to equity holders of the Group

GROUP Share Capital Share Premium Retained Earnings Minority Interest Total

Balance at 1 April 2006 29,493 45,346 31,254 1,032 107,125

Profit for the year - - 61,665 2,248 63,913

Dividend paid - - (58,986) (2,228) (61,214)

Sale of Subsidiary - - - (393) (393)

Balance at 31 March 2007 29,493 45,346 33,933 659 109,431

Balance at 1 April 2007 29,493 45,346 33,933 659 109,431

Profit for the year - - 71,432 2,763 74,195

Dividend paid - - (58,986) (1,381) (60,367)

Balance at 31 March 2008 29,493 45,436 46,379 2,041 123,259

Attributable to equity holders of the Company

COMPANY Share Capital Share Premium Retained Earnings Total

Balance at 1 April 2006 29,493 45,346 35,178 - 110,017

Profit for the year - - 61,476 - 61,476

Dividends - - (58,986) - (58,986)

Balance at 31 March 2007 29,493 45,346 37,668 - 112,507

Balance at 1 April 2007 29,493 45,346 37,668 - 112,507

Profit for the year - - 67,847 - 67,847

Dividends - - (58,986) - (58,986)

Balance at 31 March 2008 29,493 45,346 46,529 - 121,368

Statement of Changes in EquityFor the year ended 31 March 2008(All amounts in Tshs M)

Group Company

Notes 2008 2007 2008 2007

ASSETS

Non-current assets

Property, plant and equipment 13 137,737 92,652 134,840 91,017

Intangible assets 26 40,017 40,108 387 478

Investments 14 369 369 45,388 45,388

178,123 133,129 180,615 136,883

Current assets

Inventories 15 49,874 32,843 44,250 29,817

Accounts receivable 16 21,766 13,512 23,329 14,806

Bank and cash balances 17 10,572 17,100 8,940 14,691

82,212 63,455 76,519 59,314

Total assets 260,335 196,584 257,134 196,197

EQUITY

Capital and reserves attributable to the Company’s equity holders

Share capital 23 29,493 29,493 29,493 29,493

Share premium 45,346 45,346 45,346 45,346

Retained earnings 46,379 33,933 46,529 37,668

121,218 108,772 121,368 112,507

Minority interests 2,041 659 - -

Total equity

123,259 109,431 121,368 112,507

LIABILITIES

Non-current liabilities

Deferred income tax 20 9,691 7,594 9,405 7,430

Provisions 27 417 401 417 401

10,108 7,995 9,822 7,831

Current liabilities

Trade and other payables 18 65,981 41,510 65,669 39,527

Borrowings 19 57,899 36,774 57,437 35,551

Income tax payable 3,088 874 2,838 781

126,968 79,158 125,944 75,859

Total liabilities 137,076 87,153 135,766 83,690

Total equity and liabilities 260,335 196,584 257,134 196,197

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Tanzania Breweries LimitedPage 24

Notes and related statements forming part of these financial statements appear on pages 26 to 47

Group Company

Notes 2008 2007 2008 2007

Cash flows from operating activities

Operating Profit 12,712 97,582 102,395 92,233

Adjusted for:

Depreciation, amortisation, impairment and adjustments 13,794 10,708 13,519 10,437

Movement on provisions 502 577 509 603

Profit on disposal of fixed assets (143) (156) (143) (59)

Profit on disposal of subsidiary - (229) - (229)

Other non-cash items - (628) - (221)

Changes in working capital 24(i) (9,192) 609 (6,988) 18

Net cash inflow from operating activities 117,673 108,463 109,292 102,782

Interest paid (3,544) (1,979) (3,095) (1,832)

Taxation paid 24(ii) (30,662) (27,473) (27,421) (24,600)

Net cash inflow from operating activities 83,467 79,011 78,776 76,350

Cash flows from investing activities

Purchase of property, plant and equipment 13 (58,723) (30,475) (57,186) (29,811)

Purchase of intangible assets 26 (73) (195) (73) (195)

Proceeds from disposals 152 293 152 59

Proceeds from disposal of subsidiary - 952 - 952

Net cash used in investing activities (58,644) (29,425) (57,107) (28,995)

Cash flows from financing activities

Dividend paid to group shareholders (59,268) (58,534) (58,171) (58,534)

Dividend paid to minority interests (1,381) (1,777) - -

Increase in intergroup indebtedness 8,173 3,932 8,865 4,245

Net cash used in financing activities (52,476) (56,379) (49,306) (54,289)

Net decrease in cash and cash equivalents (27,653) (6,793) (27,637) (6,934)

Cash and cash equivalents at the start of year (19,674) (12,881) (20,860) (13,926)

Cash and cash equivalents at the end of year (Note 17) (47,327) (19,674) (48,497) (20,860)

Cash Flow StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

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Tanzania Breweries Limited Page 25

NOTE PAGE

1 General information 26

2 Significant accounting policies 26

3 Financial risk management 30

4 Critical accounting estimates and judgements 33

5 Business segments information 34

6 Cost of sales and operating expenses 36

7 Employees’ benefit costs 36

8 Other income 36

9 Finance costs 36

10 Income tax expense 37

11 Earnings per share 37

12 Dividends 37

13 Property, plant and equipment 38

14 Investments 40

15 Inventories 40

16 Accounts receivable 41

17 Bank and cash balances 41

18 Trade and other payables 42

19 Borrowings 42

20 Deferred income tax 42

21 Commitments 43

22 Contingent liabilities 43

23 Share capital 43

24 Cash flow information 44

25 Related party transactions and balances 45

26 Intangible assets 47

27 Provisions 47

28 Ultimate holding company 47

Index to Notes of Financial Statements

Group Company

Notes 2008 2007 2008 2007

Cash flows from operating activities

Operating Profit 12,712 97,582 102,395 92,233

Adjusted for:

Depreciation, amortisation, impairment and adjustments 13,794 10,708 13,519 10,437

Movement on provisions 502 577 509 603

Profit on disposal of fixed assets (143) (156) (143) (59)

Profit on disposal of subsidiary - (229) - (229)

Other non-cash items - (628) - (221)

Changes in working capital 24(i) (9,192) 609 (6,988) 18

Net cash inflow from operating activities 117,673 108,463 109,292 102,782

Interest paid (3,544) (1,979) (3,095) (1,832)

Taxation paid 24(ii) (30,662) (27,473) (27,421) (24,600)

Net cash inflow from operating activities 83,467 79,011 78,776 76,350

Cash flows from investing activities

Purchase of property, plant and equipment 13 (58,723) (30,475) (57,186) (29,811)

Purchase of intangible assets 26 (73) (195) (73) (195)

Proceeds from disposals 152 293 152 59

Proceeds from disposal of subsidiary - 952 - 952

Net cash used in investing activities (58,644) (29,425) (57,107) (28,995)

Cash flows from financing activities

Dividend paid to group shareholders (59,268) (58,534) (58,171) (58,534)

Dividend paid to minority interests (1,381) (1,777) - -

Increase in intergroup indebtedness 8,173 3,932 8,865 4,245

Net cash used in financing activities (52,476) (56,379) (49,306) (54,289)

Net decrease in cash and cash equivalents (27,653) (6,793) (27,637) (6,934)

Cash and cash equivalents at the start of year (19,674) (12,881) (20,860) (13,926)

Cash and cash equivalents at the end of year (Note 17) (47,327) (19,674) (48,497) (20,860)

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Tanzania Breweries LimitedPage 26

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

1. GENERAL INFORMATION

Tanzania Breweries Limited is incorporated in Tanzania as a limited liability company, listed on the Dar es Salaam Stock Exchange and is domiciled in Tanzania. The principal activities of the Company and its subsidiaries are disclosed in the Directors Report. The address of its registered office is:

Uhuru Street,Mchikichini, Ilala District,Plot 79, Block “AA”,P O Box 9013,Dar es Salaam, Tanzania

2. SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set out below.

a. Basis of PreparationThese financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) under the historical cost convention. The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions. It also requires management to exercise its judgment in the process of applying the Group’s and the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the financial statements, are disclosed in Note 4.

Standards, interpretations and amendments to published standards that became effective during the year.

• IAS 1 Amendment, Capital Disclosures. The amendment to IAS 1 introduces disclosures about the level of the Company’s capital and how it manages capital.

• IFRS 7, Financial Instruments: Disclosures. IFRS 7 introduces new disclosures to improve the information about financial instruments, and does not have any impact on the classification and valuation of the Group’s financial instruments, or the disclosures relating to taxation, and trade and other payables. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

Both standards are applied retrospectively. IFRS 7 supersedes IAS 30 and the disclosure requirements of IAS 32.

• IFRIC 8, ‘Scope of IFRS 2’, requires consideration of transactions involving the issuance of equity instruments, where the identifiable consideration received is less than the fair value of the equity instruments issued in order to establish whether or not they fall within the scope of IFRS 2. This standard does not have any impact on the group’s financial statements.

The following standards, amendments and interpretations to existing standards have been published and are mandatory for the group’s accounting periods beginning on or after 1 January 2008 or later periods, but the group has not early adopted them.

• IAS 23 (Amendment), ‘Borrowing costs’ (effective from 1 January 2009). The amendment to the standard is still subject to endorsement by the European Union. It requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. The group will apply IAS 23 (Amended) from 1 January 2009 but is currently not applicable to the group as there are no qualifying assets.

• IFRS 8, ‘Operating segments’ (effective from 1 January 2009). IFRS 8 replaces IAS 14 and aligns segment reporting with the requirements of the US standard SFAS 131, ‘Disclosures about segments of an enterprise and related information’. The new standard requires a ‘management approach’, under which segment information is presented on the same basis as that used for internal reporting purposes. The group will apply IFRS 8 from 1 January 2009. The expected impact is still being assessed in detail by management, but it appears likely that the number of reportable segments, as well as the manner in which the segments are reported, will change in a manner that is consistent with the internal reporting provided to the chief operating decision maker. As goodwill is allocated to groups of cash generating units based on segment level, the change will also require management to reallocate goodwill to the newly identified operating segments. Management does not anticipate that this will result in any impact as the Group does not have any goodwill in its balance sheet.

b. Consolidation

(i) Subsidiaries

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies. This generally accompanies a shareholding of more than one half of voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control passed to the Group and are de-consolidated from the date that control ceases. The Group uses the purchase method of accounting to account for the acquisition of subsidiaries.

The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets and liabilities and contingent liabilities assumed are measured at fair value, at acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.

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Tanzania Breweries Limited Page 27

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(ii) Transactions and minority interestsThe Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Disposals to minority interests result in gains and losses for the Group that are recorded in the income statement. Purchases from minority interests result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary.

(iii) AssociatesAssociates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost.

c. Segment Reporting

A business segment is a Group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The Group’s primary segmental analyses are in accordance with the basis on which the businesses are managed and according to the differing risk and reward profiles. The Group presents its product analysis as its primary segmentation which has been analysed in Note 5. There is no secondary segment analysis as all entries operate within the same geographical area which is Tanzania.

d. Foreign Currency Translation

(i) Functional and presentation currencyItems included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Tanzanian Shillings (Tsh), rounded to the nearest million, which is the Company’s functional and presentation currency.

(ii) Transactions and balancesForeign currency transactions are translated into Tanzania Shillings using the exchange rate prevailing at the dates of the transactions. Monetary assets and liabilities at the balance sheet date, which are expressed in foreign currencies, are translated into Tanzania Shillings at rates ruling at that date. Foreign exchange gains and losses resulting from the settlement

of such transactions and from the translation at the year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

e. Property, plant and equipment

All property, plant and equipment are shown at cost, less subsequent de-preciation and impairment. Cost includes expenditure directly attribut-able to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably measured.

Depreciation is calculated using the straight-line method to allocate the cost of each asset to its residual value over the estimated useful life as follows:Freehold buildings 20 - 50 yearsLeasehold buildings Shorter of the lease term or 50 yearsPlant, vehicles and systems 2 - 30 years

Containers in circulation are recorded within property plant and equip-ment at cost net of accumulated depreciation less any impairment loss. Depreciation of returnable bottles and containers is recorded to write the containers off over the course of their economic life. This is typically undertaken in a two stage process:

- The excess over deposit value is written down over a period of 1-3 years.

- Provisions are made against the deposit values for breakages and loss in trade together with a design obsolescence provision held to write off the deposit value over the expected bottle design period which is a period of no more than 10 years from inception of a bottle design. This period is shortened where appropriate by reference to market dynamics and the ability of the entity to use bottles for different brand.

Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner. All other repairs and maintenance expenditures are charged to the profit and loss account during the financial period in which they are incurred.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in the profit and loss.

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Tanzania Breweries LimitedPage 28

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

f. Intangible Assets

(i) Goodwill

Goodwill arising on consolidation represents the excess of the costs of acquisition over the Group’s interest in the fair value of the identifiable assets (including intangibles), liabilities and contingent liabilities of the acquired entity at the date of acquisition. Where the fair value of the Group’s share of identifiable net assets acquired exceeds the fair value of the consideration, the difference is recorded as negative goodwill. Negative goodwill arising on an acquisition is recognised immediately in the income statement.

Goodwill is stated at cost less impairment losses and is reviewed for impairment on an annual basis. Any impairment identified is recognised immediately in the income statement and is not reversed.

(ii) Software

Where computer software is not an integral part of a related item of property, plant and equipment, the software is capitalised as an intangible asset.

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring them to use. Direct costs associated with the production of identifiable and unique internally generated software products controlled by the Group that will probably generate economic benefits exceeding costs beyond one year are capitalised. Direct costs include software development employment costs (including those of contractors used) and an appropriate portion of overheads. Capitalised computer software, license and development costs are amortised over their useful economic lives of between 3 and 5 years.

Internally generated costs associated with maintaining computer software programmes are expensed as incurred.

g. Impairment of Assets

This policy covers all assets except inventories (see note h), financial assets and deferred income tax assets (see note m).

Impairment reviews are performed by comparing the carrying value of the non-current asset to its recoverable amount, being the higher of the fair value less costs to sell and value in use.

The fair value less costs to sell is considered to be the amount that could be obtained on disposal of the asset. The value in use of the asset is determined by discounting, at a market based pre-tax discount rate, the expected future cash flows resulting from its continued use, including those arising from its final disposal. When the carrying values of non- current assets are written down by any impairment amount, the loss is recognised in the income statement in the period in which it is incurred.

Where the asset does not generate cash flows that are independent from the cash flows of other assets the group estimates the recoverable amount of the cash generating unit (CGU) to which the assets belongs. For the purpose of conducting impairment reviews, CGUs are considered to be groups of assets and liabilities that have separately identifiable cash flows. They also include those assets and liabilities directly involved in producing the income and a suitable proportion of those used to produce more than one income stream.

When an impairment is recognised, the impairment loss is held firstly against any specifically impaired assets of the CGU, then taken against goodwill balances and if there is a remaining loss it is set against the remaining intangible and tangible assets on a pro-rata basis.

Should circumstances or events change and give rise to a reversal of a previous impairment loss, the reversal is recognised in the income statement in the period in which it occurs and the carrying value of the asset is increased. The increase in the carrying value of the asset is restricted to the amount that it would have been had the original impairment not occurred. Impairment losses in respect of goodwill are irreversible.

Intangible non-current assets with an indefinite life and goodwill are tested annually for impairment. Assets subject to amortisation are reviewed for impairment if circumstances or events change to indicate that the carrying value may not be fully recoverable.

h. Inventories

Inventories are stated at the lower of cost incurred in bringing each product to its present location and condition, and net realisable value, as follows:

• Raw materials, consumables and goods for resale: Purchase cost net of discounts and rebates on a first-in first-out basis (FIFO).

• Finished goods and work in progress: Raw material cost plus direct costs and a proportion of manufacturing overhead expenses on a FIFO basis.

Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and disposal.

i. Deposits by Customers

Bottles and containers in circulation are recorded within property plant and equipment and a corresponding liability is recorded in respect of the obligation to repay the customers’ deposits. Deposits paid by customers for branded returnable containers are reflected in the balance sheet within current liabilities. Any estimated liability that may arise in respect of deposits for containers and bottles is shown in provisions.

j. Trade Receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost.

Provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the terms of the receivables. The amount of the provision is the difference between the asset’s carrying value and the present value of the estimated future cash flows discounted at the original effective interest rate. This provision is recognised in the income statement.

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Tanzania Breweries Limited Page 29

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

k. Cash and Cash Equivalents

Cash and cash equivalents include cash in hand, bank deposits repayable on demand, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

Bank overdrafts are shown within borrowings in current liabilities on the balance sheet and are included within cash and cash equivalents on the face of the cash flow statement as they form an integral part of the Group’s cash management.

l. Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the share premium account.

m. Income Tax

Income tax expense is the aggregate of the charge to the profit and loss account in respect of current and deferred income tax. Current income tax is the amount of income tax payable on the taxable profit for the year determined in accordance with the Tanzania Income Tax Act, 2004.

Deferred income tax is provided in full using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted at the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognised to the extent that the directors consider that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

n. Employee Benefits

(i) Wages and salariesWages and salaries for current employees are recognised in the income statement as the employees’ services are rendered.

(ii) Bonus plans

The Group recognises a liability and an expense for bonuses, based on a formula that takes into consideration the profit attributable to the company’s shareholders after certain adjustments.

The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(iii) Defined Contribution Plan The Group makes contribution to a defined contribution plan. The contributions to defined contribution plans are recognised as an expense as the costs become payable. The contributions are recognised as employee benefit expense when they are due.

(iv) Termination benefitsTermination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value in a similar manner to all long term employee benefits.

o. Provisions

Provisions are recognised when there is a present obligation, whether legal or constructive, as a result of a past event for which it is probable that a transfer of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Such provisions are calculated on a discounted basis where the effect is material to the original undiscounted provision. The carrying amount of the provision increases in each period to reflect the passage of time and the unwinding of the discount and the movement is recognised in the income statement within interest costs.

p. Restructuring Provisions

Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses. However provisions are recognised for onerous contracts where the unavoidable cost exceeds the expected benefit.

q. Revenue Recognition

(i) Sale of goods and services

Revenue represents the fair value at consideration received or receivable for goods and services provided to third parties and is recognised when the risks and rewards of ownership are substantially transferred.

The Group presents revenue gross of excise duties because unlike value added tax, excise is not directly related to the value of sales. It is not generally recognised as a separate item on invoices, increases in excise are not always directly passed on to customers, and the Group cannot reclaim the excise where customers do not pay for product received. The Group therefore considers excise as a cost to the Group and reflects it as a production cost. Consequently any excise that is recovered in the sale price is included in revenue.

Revenue excludes value added tax. It is stated net of price discounts, promotional discounts and after an appropriate amount has been provided to cover the sales value of credit notes yet to be issued that relate to the current and prior periods.

The same recognition criteria also apply to the sale of by-products and waste (such as spent grain, malt dust and yeast).

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Tanzania Breweries LimitedPage 30

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

(ii) Interest income

Interest income is recognised on a time-proportion basis using the effective interest method.

When a receivable is impaired the group reduces the carrying amount to its recoverable amount by discounting the estimated future cash flows at the original effective interest rate, and continuing to unwind the discount as interest income.

(iii) Royalty incomeRoyalty income is recognised on an accruals basis in accordance with the relevant agreements and is included in other income.

(iv) Dividend income Dividend income is recognised when the right to receive payment is established.

r. Operating Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

s. Earnings per Share

Basic earnings per share represents the profit on ordinary activities after taxation attributable to the equity shareholders of the parent entity, divided by the weighted average number of ordinary shares in issue during the year, less the weighted average number of ordinary shares held in the Group’s employee benefit trust during the year.

Diluted earnings per share represents the profit on ordinary activities after taxation attributable to the equity shareholders, divided by the weighted average number of ordinary shares in issue during the year, less the weighted average number of ordinary shares held in the Group’s employee benefit trust during the year, plus the weighted average number of dilutive shares resulting from share options and other potential ordinary shares outstanding during the year.

t. Dividend Distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

u. Derivative Financial Assets and Financial Liabilities

Derivative financial assets and financial liabilities are financial instruments whose value changes in response to an underlying variable, require little or no initial investment and are settled in the future.

These include derivatives embedded in host contracts. Such embedded derivatives need not be accounted for separately if the host contract is already fair valued; if it is not considered as a derivative if it was freestanding; or if it can be demonstrated that it is closely related to the host contract. There are certain currency exemptions which the Group and Company has applied to these rules which limit the need to account for certain potential embedded foreign exchange derivatives, namely where a contract is denominated in the functional currency of either party or in a currency that is commonly used in contracts to purchase or sell non-financial items in the economic environment in which the transaction takes place.

Derivative financial assets and liabilities are analysed between current and non-current assets and liabilities on the face of the balance sheet, depending on when they are expected to mature.

v. Comparatives

Where necessary comparatives figures have been adjusted or reclassi-fied to conform with changes in the presentation in the current year.

3 FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks including: credit risk, liquidity risk, market risk (including foreign exchange, interest rate and price risk). The Group’s overall risk management programme seeks to minimize potential adverse effects on the Group’s financial per-formance. Risks management is carried out by the management on be-half of the Board of Directors.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Cash and cash equivalentsThe Group limits its exposure to financial institutions by setting credit limits.

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Tanzania Breweries Limited Page 31

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

The table below shows the credit limit and balance of the main counterparties at the balance sheet date.

Trade and other receivablesThe group has no significant concentrations of credit risk. The Group has implemented policies that require appropriate credit checks on potential customers before sales commence and all major credit customers are required to produce cash deposit or bank guarantees. Credit risk is managed by limiting the aggregate amount of exposure to any one counterpart.

Collateral held comprises: 2008 2007

Cash security Tshs 3,800 M Tshs 4,325 M

Bank guarantees Tshs 3,012 M Tshs 654 M

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 and cash equivalents, the availability of funding from an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, the group maintains flexibility in funding by maintaining availability under committed credit lines and through inter-company short term advances. Management monitors rolling forecasts of the group’s liquidity reserve on the basis of expected cash flows.

The table below analyses the group’s financial liabilities which will be settled on a net basis into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

31 March 2008 31 March 2007

Banks Credit limit Utilised Credit limit Utilised

Stanbic Bank Tanzania Limited 14,700 615 12,430 4,824

Standard Chartered Bank Tanzania Limited 2,450 249 4,350 350

Citibank Tanzania Limited 20,825 7,986 18,645 8,960

NBC Limited 1,225 43 622 668

CRDB Bank Limited 1,225 1,246 6,215 2,233

40,425 10,139 42,262 17,035

Within 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years At 31 March 2008Borrowings 57,899 - - -Corporate tax payable 3,088 - - -Trade and other payables 65,981 - - -

At 31 March 2007Borrowings 36,774 - - -Corporate tax payable 874 - - -Trade and other payables 41,510 - - -

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Tanzania Breweries LimitedPage 32

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Commodity price risk

The group is exposed to variability in the price of raw materials used in the production or in the packaging of finished products, such as the price of malt, barley, sugar and aluminium. These price risks are managed principally through multi year fixed price contracts with suppliers internationally.

Capital risk management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future developments of the business.

The Board seeks to maintain a balance between the higher returns that might be possible with the higher levels of borrowings and the advantages and the security afforded by a sound capital position. The Board monitors the following key credit ratios:

Interest rate and liquidity risk

Fluctuations in interest rates impact on operating activities. In the ordinary course of business, the Group and Company receive cash from its operations and are required to fund working capital and capital expenditure requirements. Funding deficits for the Group and company’s operations have mainly been financed through bank borrowings and overdrafts from financial institutions.

2008 2007

Gearing ratio 59.2% 33.6%

Gross debt / EBITDA 0.58 0.35

Interest Cover 35 times 54 times

Free funds from operations Tshs 83, 467 M TShs 79,011M

Exchange rate risk management

As and when the need arises, the Group enters into transactions denominated in foreign currencies. As a result, the Group is subject to transaction and translation exposure from fluctuations in foreign currency exchange rates. Occasionally, when considered prudent, exposure to foreign currency risk is hedged, by forward contracts.

The Group adopts a policy of ensuring that net monetary assets or liabilities denominated in a non functional currency are lower than Tshs 20 billion. In addition, the Group’s policy is to limit the impact to 1% of Group operating profit (excluding exceptional items) for each 10% change in foreign exchange rates.

The tables on page 33 set out the group’s currency exposures from financial assets and liabilities held by the group companies in currencies other than their functional currencies and resulting in exchange movements in the income statement and balance sheet.

At 31 March 2008, if the Tanzania shilling (Tshs) had weakened by 10% against the US dollar with all other variables held constant, post-tax profit for the year would have been Tshs 783 million (2007: Tshs 916 million) lower, mainly as a result of foreign exchange losses on translation of US dollar-denominated cash and cash equivalents on hand, trade and other payables.

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Tanzania Breweries Limited Page 33

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

31 March 2008Total in functional

currencyExposure in

RandExposure in

US$Exposure in

EuroExposure in

GBP

Financial Assets

Current Assets

Cash & Cash Equivalents 8,645 764 5,766 2,115 -

Current Liabilities

Trade & Other Payables 19,836 3,064 3,147 13,624 1

Non-monetary Assets/(liabilities) (11,191) (2,300) 2,619 (11,509) (1)

31 March 2007Total in functional

currencyExposure in

RandExposure in

US$Exposure in

EuroExposure in

GBPExposure in

KSH

Financial Assets

Current Assets

Cash & Cash Equivalents 14,816 - 14,816 - - -

Current Liabilities

Trade & Other Payables 1,724 297 (10) 993 (73) 516

Non-monetary Assets/(liabilities) 13,092 (297) 14,826 (993) 73 (516)

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In determining and applying accounting policies, judgment is often required where the choice of specific policy, assumption or accounting estimate to be followed could materially affect the reported results or net position of the Group or Company, should it later be determined that a different choice would be more appropriate.

Management considers the following to be areas of significant judgment for the Group and Company:

ii) The determination of the carrying amount of goodwill;

iii) The determination of the carrying amount of plant, property and equipment and related depreciation, capitalisation of costs, estimation of useful economic life and recoverability of such assets;

iv) The calculation of the Group’s total tax charge where tax treatment cannot be finally determined until a formal resolution has been reached with the relevant tax authority

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Tanzania Breweries LimitedPage 34

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

5 BUSINESS SEGMENTS INFORMATION

The group comprises three businesses – Clear Beer, Wines and Spirits and Traditional Beer. Costs relating to the general group management are shared between the Company and its subsidiaries. Segment information about the group’s businesses is presented below.

Clear Beer Wines & Spirits Traditional Beer EliminationsTotal for Group

2008

Sales

Exports 3,406 - - - 3,406

Local 343,365 36,410 - 379,775

Total sales 346,771 36,410 - - 383,181

Operating profit 102,395 11,863 - (1,546) 112,712

Finance costs (3,095) (449) - - (3,544)

Profit before tax 99,300 11,414 - (1.546) 109,168

Income tax (31,453) (3,520) - - (34,973)

Profit for the year 67,847 7,894 - (1,546) 74,195

Other segment items included in the profit and loss account

Depreciation, amortisation and impairment 12,684 275 - - 12,959

Segment assets and liabilities and capital expenditure

Assets

Non-current assets 180,615 2,829 - (5,321) 178,123

Current Assets 76,519 8,688 - (2,995) 82,212

257,134 11,517 (8,316) 260,335

Liabilities & Equity

Current liabilities 125,944 5,759 - (4,735) 126,968

Non-current liabilities 9,822 286 - - 10,108

Owner’s equity 121,368 5,472 - (5,622) 121,218

Minority interest - - - 2,041 2,041

257,134 11,517 - (8,316) 260,335

Capital additions 57,186 1,537 - - 58,723

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Tanzania Breweries Limited Page 35

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

5 BUSINESS SEGMENTS INFORMATION

Clear Beer Wines & Spirits Traditional Beer EliminationsTotal for Group

2007

Sales

Exports 4,322 - - - 4,322

Local 282,821 26,769 966 - 310,556

Total sales 287,143 26,769 966 - 314,878

Operating profit 92,233 9,260 (36) (3,875) 97,582

Finance costs (1,832) (146) (1) - (1,979)

Profit before income tax 90,401 9,114 (37) (3,875) 95,603

Income tax expense (28,925) (2,752) (13) - (31,690)

Profit for the year 61,476 6,362 (50) (3,875) 63,913

Other segment items included in the profit and loss account

Depreciation, amortisation and impairment 9,865 217 54 - 10,136

Segment assets and liabilities and capital expenditure

Assets

Non-current assets 136,883 1,560 - (5,314) 133,129

Current Assets 59,314 4,816 - (675) 63,455

196,197 6,376 - (5,989) 196,584

Liabilities & Equity

Current liabilities 75,859 4,686 - (1,387) 79,158

Non-current liabilities 7,831 165 - (1) 7,995

Owner’s equity 112,507 1,527 - (5,262) 108,772

Minority interest - - - 659 659

196,197 6,378 - (5,991) 196,584

Capital additions 29,811 664 - - 30,475

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Tanzania Breweries LimitedPage 36

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Group Company

2008 2007 2008 2007

6 COST OF SALES AND OPERATING EXPENSES

Excise taxes 83,517 71,714 74,805 64,762

Raw materials used 88,778 68,392 78,808 61,140

Distribution costs 25,892 18,528 24,685 17,861

Depreciation, amortisation and impairment charges 12,959 10,136 12,684 9,865

Employees benefit costs 22,120 18,059 20,716 16,854

Marketing costs 8,914 6,242 8,258 5,892

Administrative costs 4,909 4,652 4,725 4,251

Operating costs 6,359 5,337 6,848 5,199

Maintenance 7,920 6,270 7,593 6,032

Managerial, technical and administrative fees 9,731 8,207 8,471 7,698

Auditors remuneration - audit services 129 131 101 120

Auditors remuneration - non audit services 93 53 93 28

271,321 217,721 247,787 199,702

Made up as follows:

Cost of sales 205,722 167,948 186,418 152,968

Selling and distribution costs 44,537 31,663 41,896 30,646

Administrative expenses 21,062 18,110 19,473 16,088

271,321 217,721 247,787 199,702

7 EMPLOYEES’ BENEFIT COSTS

The following items are included within employees’ benefits expenses

Wages, salaries and other benefits 20,895 17,016 19,572 15,884

Pension costs (defined distribution plans) 1,225 1,043 1,144 970

22,120 18,059 20,716 16,854

8 OTHER INCOME

Profit on disposal of fixed assets 143 156 143 59

Dividend income - - 2,564 4,138

Sundry income 709 269 704 594

852 425 3,411 4,791

9 FINANCE COSTS

Interest expense 4,273 2,017 3,824 1,870

Interest income (732) (328) (732) (328)

Net foreign exchange transaction losses 3 290 3 290

3,544 1,979 3,095 1,832

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Tanzania Breweries Limited Page 37

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Group Company

2008 2007 2008 2007

10 INCOME TAX EXPENSE

Current tax 32,876 28,173 29,478 25,408

Deferred income tax (Note 20) 2,097 3,517 1,975 3,517

34,973 31,690 31,453 28,925

The tax on the company’s profit before tax differs from the theoretical amount that would

arise using the basic tax rate as follows:

Profit before tax 109,168 95,603 99,300 90,401

Tax calculated at a rate of 30% 32,750 28,681 29,790 27,120

Income not subject to tax - - (769) (1,241)

Expenses not deductible for tax expenses 2,223 3,009 2,432 3,046

Tax charge 34,973 31,690 31,453 28,925

Group

2008 2007

11 EARNINGS PER SHARE

Net profit attributable to shareholders (Tshs 000’s) 71,431,999 61,665,247

Weighted average number of share in issue (000’s)(Note 23) 294,928 294,928

Basic and diluted earnings per share (Tshs per share) 242.2 209.1

There being no dilutive or dilutive potential share options, the basic and diluted earnings per

share are the same.

Amount Dividend per share

12 DIVIDENDS 2008 TShs’M

2007

TShs’M

2008 TShs/share

2007

TShs/share

Group

1st Interim dividend 26,544 26,544 90.0 90.0

2nd Interim dividend 32,442 32,442 110.0 110.0

58,986 58,986 200.0 200.0

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Tanzania Breweries LimitedPage 38

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

BuildingsPlant and

machinery

Furniture, equipment and

vehiclesCapital work

in progress Containers Total

1 April 2006

Cost 16,650 84,935 17,755 6,025 10,180 135,545

Accumulated depreciation (6,967) (43,537) (11,428) - - (61,932)

Net book value 9,683 41,398 6,327 6,025 10,180 73,613

Year ended 31 March 2007

Opening net book value 9,683 41,398 6,237 6,025 10,180 73,613

Additions - - - 30,475 - 30,475

Disposals of subsidiary (360) (228) (223) (46) - (857)

Disposals – others - - (3) - - (3)

Transfers 8,084 14,946 3,878 (32,478) 5,570 -

Breakages and shrinkage - - - - (440) (440)

Depreciation charge for the year (808) (6,307) (1,768) - (1,253) (10,136)

Closing net book value 16,599 49,809 8,211 3,976 14,057 92,652

At 31 March 2007

Cost 24,374 99,736 21,733 3,976 15,310 165,129

Accumulated depreciation (7,775) (49,927) (13,522) - (1,253) (72,477)

Net book value 16,599 49,809 8,211 3,976 14,057 92,652

Year ended 31 March 2008

Opening net book value 16,599 49,809 8,211 3,976 14,057 92,652

Additions - - - 58,723 - 58,723

Disposals – others - - (9) - - (9)

Transfers 5,248 17,671 7,380 (43,433) 13,134 -

Breakages and shrinkage - - - - (670) (670)

Depreciation charge for the year (1,056) (7,981) (2,216) - (1,706) (12,959)

Closing net book value 20,791 59,499 13,366 19,266 24,815 137,737

At 31 March 2008

Cost 29,622 117,407 29,104 19,266 27,774 223,173

Accumulated depreciation (8,831) (57,908) (15,738) - (2,959) (85,436)

Net book value 20,791 59,499 13,366 19,266 24,815 137,737

13 PROPERTY, PLANT AND EQUIPMENT - GROUP

The Group’s plant, machinery, equipment and containers have been secured against loans as set out in Note 19 to the financial statements

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Tanzania Breweries Limited Page 39

Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

BuildingsPlant and

machinery

Furniture, equipment and

vehiclesCapital work

in progress Containers Total

1 April 2006

Cost 15,220 82,680 16,347 6,019 10,168 130,434

Accumulated depreciation (6,464) (42,005) (10,453) - - (58,922)

Closing net book value 8,756 40,675 5,894 6,019 10,168 71,512

Year ended 31 March 2007

Opening net book value 8,756 40,675 5,894 6,019 10,168 71,512

Additions - - - 29,811 - 29,811

Disposals - - (1) - - (1)

Transfers 8,030 14,618 3,651 (31,858) 5,559 -

Breakages and shrinkage - - - - (440) (440)

Depreciation charge (761) (6,206) (1,646) - (1,252) (9,865)

Closing net book value 16,025 49,087 7,898 3,972 14,035 91,017

At 31 March 2007

Cost 23,250 97,298 20,241 3,972 15,287 160,048

Accumulated depreciation (7,225) (48,211) (12,343) - (1,252) (69,031)

Net book value 16,025 49,087 7,898 3,972 14,035 91,017

Year ended 31 March 2008

Opening net book value 16,025 49,087 7,898 3,972 14,035 91,017

Additions - - - 57,186 - 57,186

Disposals - - (9) - - (9)

Transfers 5,094 16,985 7,068 (42,266) 13,119 -

Breakages and shrinkage - - - - (670) (670)

Depreciation charge for the year (1,001) (7,892) (2,085) - (1,706) (12,684)

Closing net book value 20,118 58,180 12,872 18,892 24,778 134,840

At 31 March 2008

Cost 28,344 114,283 27,300 18,892 27,736 216,555

Accumulated depreciation (8,226) (56,103) (14,428) - (2,958) (81,715)

Net book value 20,118 58,180 12,872 18,892 24,778 134,840

13 PROPERTY, PLANT AND EQUIPMENT - COMPANY

The Company’s plant, machinery, equipment and containers have been secured against loans as set out in Note 19 to the financial statements

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Group Company

2008 2007 2008 2007

14. INVESTMENTS

Investment in associate company 369 369 369 369

Investment in subsidiaries - - 45,019 45,019

369 369 45,388 46,388

The investments relate to:

The Group’s share of results of its associate company, Mountainside Farms Limited, and its

aggregate assets and liabilities are as follows:

31 October 2008

31 October

2007

Assets 647 437

Liabilities 630 432

Sales 714 393

Profit/(Loss) 13 (175)

Group Company

2008 2007 2008 2007

15 INVENTORIES

Raw materials 27,023 17,898 25,060 16,407

Work in progress 3,290 2,253 3,225 2,178

Finished goods 9,579 5,664 5,974 4,215

Stores and spares 11,210 8,176 11,177 8,134

51,102 33,991 45,436 30,934

Provision for obsolete and damaged stocks (1,228) (1,148) (1,186) (1,117)

49,874 32,843 44,250 29,817

% of issued shares held

Name of undertaking Nature of business Description of shares held 2008 2007

Tanzania Distilleries Limited Manufacturer of spirituous liquor Ordinary 65% 65%

Mountainside Farms Limited Crop farming Ordinary 50% 50%

Kibo Breweries Limited Selling and distribution of clear beer Ordinary 100% 100%

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Group Company

2008 2007 2008 2007

16 ACCOUNTS RECEIVABLE

Trade receivables 13,481 5,709 12,500 5,216

Less: Provision for bad and doubtful debts (1,115) (709) (1,069) (640)

Trade receivables-net 12,366 5,000 11,431 4,576

Advances to suppliers 5,235 3,283 5,235 3,284

Staff advances and loans 235 157 212 143

Sundry advances and deposits 242 1,958 190 1,028

Prepayments 1,537 2,624 948 3,297

Other receivables 2,151 135 5,313 135

Due from related parties (Note 25 (iii)) - 355 - 2,343

21,766 13,512 23,329 14,806

As of 31 March 2008, trade receivables as tabled below were impaired. The individually

impaired receivables mainly relate to trading debt. It was assessed a portion of the

receivables is expected to be recovered. The aging of these receivables is as follows:

Within 30 days - - - -

30-60 days 570 - 570 -

60-90 days 365 69 365 -

Over 90 days 259 1,659 213 1,659

1,194 1,728 1,148 1,659

The remaining trade receivables as tabled below were all current and therefore not

impaired.

Within 30 days 12,287 3,981 11,352 3,557

30-60 days - - - -

60-90 days - - - -

Over 90 days - - - -

12,287 3,981 11,352 3,557

17 BANK AND CASH BALANCES

Cash at bank and in hand 10,572 17,100 8,940 14,691

For the purpose of the cash flow statement, cash and cash

equivalents comprise the following:

Cash and bank balances 10,572 17,100 8,940 14,691

Bank overdrafts (Note 19) (57,899) (36,774) (57,437) (35,551)

Net cash position (47,327) (19,674) (48,497) (20,860)

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Group Company

18 TRADE AND OTHER PAYABLES 2008 2007 2008 2007

Trade payables 14,093 7,652 14,061 7,205

Other payables and accrued expenses 18,789 11,467 18,451 11,072

VAT payable 5,374 4,208 4,784 3,993

Excise duty payable 8,202 6,551 7,429 5,993

Dividends payable 2,035 2,317 2,035 1,220

Payable to related parties (Note 25 (iii)) 17,488 9,315 18,909 10,044

65,981 41,510 65,669 39,527

19 BORROWINGS

Bank overdrafts 57,899 36,774 57,437 35,551

Overdrafts are made up as follows:

Stanbic Bank Tanzania Ltd 4,929 2,507 4,929 2,507

Citibank Tanzania Ltd 24,159 19,770 23,846 19,770

NBC Limited 10,799 5,697 10,799 5,698

Standard Chartered Bank - 1,175 - -

International Commercial Bank 150 50 - -

National Microfinance Bank Ltd. 8,459 - 8,459 -

CRDB Bank Ltd. 9,403 7,575 9,404 7,576

57,899 36,774 57,437 35,551

The weighted average effective interest rate of the overdrafts was 11.67% (2007: 12.2%). The overdrafts are secured by a first charge over the plant, machinery and equipment

at the company’s plant in Dar es Salaam and Mwanza. Total value of the security given is Tshs 91.7 billion (2007: Tshs 54.3 billion).

20 DEFERRED INCOME TAX

Deferred income taxes are calculated on temporary differences under the liability method using a principal tax rate of 30% (2007:30%). The movement on the deferred

income tax account is as follows:

Group Company

2008 2007 2008 2007

At the beginning of the year 7,594 4,312 7,430 4,135

Income statement charge (Note 10) 2,097 3,517 1,975 3,517

Transfer to reserves - (68) - (55)

Disposals of subsidiary - (167) - (167)

At the end of the year 9,691 7,594 9,405 7,430

Details of the deferred tax liability:

Property, plant and equipment 8,684 7,439 8,389 6,027

Other temporary differences 1,007 155 1,016 1,403

9,691 7,594 9,405 7,430

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

21 COMMITMENTS

Capital commitments

The Group had capital commitments approved and contracted but not recorded in its books as at 31 March 2008 of Tshs 13.8 billion (2007: Tshs 5.9 billion).

Operating lease commitments – where a group company is the lessee.

The future aggregate minimum lease payments under non-cancellable operating lease are as follows:

Group Company

2008 2007 2008 2007

Not later than 1 year 1,268 706 1,268 706

Later than 1 year and not less than 5 years 354 396 354 396

1,622 1,102 1,622 1,102

22 CONTINGENT LIABILITIES

22.1 Litigation

The Company is the subject of a number of legal cases relating to contracts with the company to farm barley on leasehold Company premises, labour disputes and contracts

to transport company merchandise. Full provision has been made in these financial statements for an amount which the Directors estimate could settle all outstanding

disputes. However, whilst the Directors are confident that such provisions have been prudently calculated, the maximum potential loss to the Company resulting from all

pending litigation exceeds the provision by Tshs 144 million (2007: Tshs 281 million).

The company’s subsidiary, Tanzania Distilleries Limited (TDL) has various litigation brought against it and has provided against likely losses. The unprovided amount at the year

end was Tshs 300 million (2007: Tshs 300 million).

22.2 Foreign Exchange Contracts

As at 31 March 2008 the company had not entered into any foreign exchange contracts. (2007: Nil).

Group Company

2008 2007 2008 2007

23 SHARE CAPITAL

23.1 Ordinary share capital

Authorised: 294,928,463 ordinary shares of Tshs 100 each 29,493 29,493 29,493 29,493

Issued and fully paid: 294,928,463 ordinary shares of Tshs 100 each 29,493 29,493 29,493 29,493

There were no movements in the share capital of the Company during the year. The Company has one class of ordinary shares which carries no right to fixed income.

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

The ownership structure is as set out below:

23.2 Ownership structure

Ordinary Shares

Ordinary

Shares % holding % holding

2008 2007 2008 2007

Resident shareholders

United Republic of Tanzania 11,797,139 11,797,139 4.00 4.00

Unit Trust of Tanzania 13,503,962 14,739,696 4.58 5.00

Public Service Pension Fund 8,530,547 8,180,547 2.89 2.77

Parastatal Pension Fund 7,304,903 6,437,862 2.48 2.18

National Social Security Fund 9,977,436 7,537,436 3.38 2.56

General Public 17,181,120 19,602,427 5.83 6.65

Total resident 68,295,107 68,295,107 23.16 23.16

Non-resident shareholders

SABMiller Africa BV 155,799,698 155,799,698 52.83 52.83

East African Breweries Limited 58,985,693 58,985,693 20.00 20.00

International Finance Corporation (IFC) 11,847,965 11,847,965 4.02 4.02

Total non-resident 226,633,356 226,633,356 76.85 76.85

Total ordinary shares in issue 294,928,463 294,928,463 100.00 100.00

Group Company

2008 2007 2008 2007

24 CASH FLOW INFORMATION

(i) Changes in working capital

Inventories (17,111) (8,100) (14,502) (8,484)

Receivables (8,660) (288) (8,953) (826)

Payables 16,579 8,997 16,467 9,328

(9,192) 609 (6,988) 18

(ii) Income Tax paid

Income tax receivable 1 April 2007 (874) 27 (781) 27

Income tax payable at 1 April 2007 - (201) - -

Current income tax provided (32,876) (28,173) (29,478) (25,408)

Provision for income tax at end of year 3,088 874 2,838 781

(30,662) (27,473) (27,421) (24,600)

(iii) Dividend paid

By the Company

Dividends payable at the beginning of the year (2,317) (1,414) (1,220) (768)

Current year interim dividend (58,986) (59,437) (58,986) (58,986)

Dividends payable at end of year 2,035 2,317 2,035 1,220

(59,268) (58,534) (58,171) (58,534)

By subsidiaries

Minorities share of dividends declared and paid (1,381) (1,777) - -

(60,649) (60,311) (58,171) (58,534)

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

25 RELATED PARTY TRANSACTIONS AND BALANCES Group Company

2008 2007 2008 2007

(i) Sale of goods and services

Sale of goods

Nile Breweries Limited - 366 - 366

Zambia Breweries Limited - 203 - 203

Kenya Breweries Limited 2,769 2,427 2,769 2,427

2,769 2,996 2,769 2,996

During the year the Company continued exporting canned beer to Nile Breweries Limited,

a subsidiary of SABMiller Africa BV and Kenya Breweries Limited, an associate holding of

SABMiller Africa BV.

Sale of services

Tanzania Distilleries Limited-Management fees - - 629 508

(ii) Purchase of goods and services

Purchase of goods

SABEX 43,323 21,664 43,244 21,924

South African Breweries Limited 1,487 - 1,487 -

East African Breweries Limited 294 - 294 -

Distell Limited 2,150 761 - -

47,255 22,425 45,026 21,924

SABEX, a division of SABMiller Africa & Asia (Pty) Limited, is used as the Group’s procurement agent.

The company imports beer from South African Breweries Limited, a subsidiary of SABMiller Plc.

Tanzania Distilleries Limited import specialised wines and spirits from Distell Limited

Group Company

2008 2007 2008 2007

Purchase of services

Bevman Services A.G 9,101 7,698 9,101 7,698

SABMiller Finance B.V. 3,019 3,165 3,019 3,165

East African Breweries Ltd 2,212 1,600 2,212 1,600

Distillers Corporation International Limited 629 507 - -

14,961 12,970 14,332 12,463

Fees are payable in terms of a management agreement with Bevman Services A.G and Distillers Corporation International Ltd.

The Company produces and distributes SABMiller Finance B.V and East African Breweries Limited’s brands under license.

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

Group Company

(iii) Year-end balances arising from transactions with related parties: 2008 2007 2008 2007

Receivable from related parties

East African Breweries Limited - 129 - 129

Nile Breweries Limited - 165 - 165

Tanzania Distilleries Limited - - - 2,049

Distell Limited - 61 - -

- 355 - 2,343

Payable to related parties

SABMiller Africa & Asia (Pty) Limited 79 2 79 2

SABEX 14,999 6,236 14,999 6,236

East African Breweries Limited - 739 - 739

Nile Breweries - 9 - 9

Distell Limited - - - -

Bevman Services A.G. 1,822 1,615 1,822 1,615

SABMiller Finance B.V. 588 714 588 715

Kibo Breweries Limited - - 1,421 728

17,488 9,315 18,909 10,044

(iv) Key management remuneration

Management salaries and other benefits 2,234 1,940 2,104 1,815

(v) Directors’ emoluments

Non-executive Chairman 10 14 5 11

Non-executive Directors 27 34 24 31

Executive Directors 163 139 163 139

A schedule detailing remuneration of each director will be annexed to these financial statements for presentation to the annual general meeting.

The Directors of the Company own directly and indirectly 43,301 (2007: 43,301) ordinary shares of the Company as 31 March 2008.

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Notes to Financial StatementsFor the year ended 31 March 2008(All amounts in Tshs M)

26 INTANGIBLE ASSETS

Group

Goodwill SoftwareGroup

Total

Company Total

Software

At 31 March 2006 42,339 458 42,797 458

Accumulated amortisation (2,709) (43) (2,752) (43)

Net book value 39,630 415 40,045 415

Year ended 31 March 2007

Opening net book value 39,630 415 40,045 415

Additions - 195 195 195

Amortisation charge - (132) (132) (132)

Closing net book value 39,630 478 40,108 478

As at March 2007 42,339 653 42,992 653

Accumulated amortisation (2,709) (175) (2,884) (175)

Net book value 39,630 478 40,108 478

Year ended 31 March 2008

Opening net book value 39,630 478 40,108 478

Additions - 73 73 73

Amortisation charge - (164) (164) (164)

Closing net book value 39,630 387 40,017 387

At 31 March 2008 42,339 726 43,065 726

Accumulated amortisation (2,709) (339) (3,048) (339)

Net book value 39,630 387 40,017 387

Group Company

2008 2007 2008 2007

27 PROVISIONS

Legal cases at the start of the year 401 412 401 412

Net increase/(decrease) in provision 16 (11) 16 (11)

Legal cases at the end of the year 417 401 417 401

28 ULTIMATE HOLDING COMPANY

SABMiller Africa BV (incorporated in the Netherlands) owns 52.83% of the company’s issued shares. The ultimate holding company is SABMiller plc, incorporated in the

United Kingdom

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NOTICE TO SHAREHOLDERS

Notice is hereby given that the 35th Annual General Meeting of the Shareholders of Tanzania Breweries Limited will be held at Kilimanjaro Kempinski Hotel in Dar es Salaam on 17 July 2008 at 10h00, for the following purposes:

1. Notice of Meeting Notice convening the meeting to be taken as read.

2. Approval of Minutes To approve and sign the minutes of the 34th Annual General Meeting held on 12

July 2007.

3. Matters Arising

4. Financial Statements and Directors’ Report To receive and consider the Directors’ Report, Auditors’ Report and the audited

financial statements for the year ended 31 March 2008.

5. Dividend for the year ended 31 March 2008 To consider and approve total dividend paid for the year ended 31 March 2008.

6. Appointment of Statutory Auditors To approve PricewaterhouseCoopers as the auditors for the next financial year.

7. Any other business Any member entitled to attend and vote, if unable to attend for any reason, is en-

titled to appoint a proxy or proxies to attend, speak, and, on a poll, vote in his/her stead and such a proxy need not also be a member of the Company.

Proxy forms should be forwarded to reach the registered office of the Com-pany or the office of the Company Secretary at least 48 hours before the time fixed for the holding of the meeting.

Please note that a member wishing to attend the Annual General Meeting must arrive with a copy of his/her original share certificate or depository receipt (CDR) and his/her Identification Card.

By the order of the Board

Note: i. Any other business needs to be brought to the attention of the Secretary by the 4 July 2008. ii. Shareholders shall meet all the costs for attending the meeting.

ADMINISTRATION

Tanzania Breweries Limited(Registration Number 2497)

Company Secretary:Steve F. KilindoPostal Address:P.O. Box 9013, Dar es Salaam,Tanzania.Registered Office:Uhuru StreetPlot No.79, Block “AA”Mchikichini, Ilala District,Dar es Salam, Tanzania.Telephone: +255 (0) 22 2182779-82Fax: +255 (0) 22 2182783

Transfer Secretaries:CRDB Bank Ltd.,Head Office: Azikiwe Street,P.O. Box 268, Dar es Salaam.Tel: +255 (0) 22 2117441-7Fax: +255 (0) 22 2113341

External Auditors:PricewaterhouseCoopers,International House, 5th Floor,Garden/Shaaban Robert Street,P.O.Box 45, Dar es Salaam, Tanzania.Tel: +255 (0) 22 2133100

Shareholders:Financial Year End: 31 MarchAnnual General Meeting: July

Results: Interim announcement - NovemberYear end announcement - MayAnnual financial statement - July

Dividends:First Interim: declaration - October payment - NovemberSecond Interim: declaration - February payment - March

Administration and Notice of Meeting

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Tanzania Breweries LimitedPlot 79, Block AA,

Uhuru Street, Mchikichini, Ilala District,Dar es Salaam, Tanzania