Grenada Breweries Ltd Annual Report 2019 by TTDigitalPublications

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Table of Contents

Board of Directors ___________________________________________ 4-5 Report of the Chairman _____________________________________ 6-11 Corporate Information ________________________________________ 1 2 CSR 2019 ______________________________________________________ 1 3 Report of the Directors _______________________________________ 1 4 Notice of Meeting _________________________________________ 15-16 Carib Brewery (Grenada) Limited ______________________________ 1 7 Financial Highlights ___________________________________________ 1 8 Independent Auditorsâ&#x20AC;&#x2122; Report ______________________________ 19-21 Statement of Financial Position ________________________________ 22 Statement of Comprehensive Income __________________________ 23 Statement of Changes in Equity _______________________________ 23 Statement of Cash Flows _____________________________________ 24 Notes to the Financial Statements __________________________ 25-44 Form of Proxy ______________________________________________ 45-46

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

“

At a time of uncertainty in the global economy, social d ivisions and unprecedented concern about the environment, we bel ieve that we have a vital role to play in the community.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

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Our Company del ivered record domestic sales volumes and increased export volumes, generating revenues of $64.4M.

INTRODUCTION

COMPANY PERFORMANCE

2019 was another solid year for GBL. Revenues continued its upward trend to a historic $64.4M due to GBL winning customer confidence through our marketing campaigns, quality products, and world-class service. In addition, through shrewd capital investments, we have enhanced shareholder value by leveraging our leadership and manufacturing strengths to be better positioned to compete in the marketplace. As part of this policy, significant investments were made in our brands, machinery and personnel that resulted in a PBT of $13.7M, representing a marginal decline in year on year profit. This investment was required to build the necessary platform to propel the business forward and enhance the Company’s ability to continue to add value and generate long-term robust results for all stakeholders.

Our Company delivered record domestic sales volumes and increased export volumes, generating revenues of $64.4M. During 2019, as a result of our capacity expansion, GBL became and remains the largest sourcing point for innovation export out of the OECS within the Ansa McAL Group of Companies. In the local market, our flagship brands Carib and Stag remained the leading and most popular lagers in the marketplace. The non-alcoholic beverages performed credibly, in a market traversed by numerous substitutes packaged in environmentally destructive disposable packaging. Cost of sales increased over prior year due to increased sales volumes, higher depreciation, repairs to plant and machinery, combined with higher losses and lower efficiencies due to teething issues encountered as a result of the new brewhouse.

ECONOMIC OUTLOOK

Admin and general expenses declined year on year due to improved inventory management resulting in lower provision for obsolescence. Selling and distribution expenses increased as a result of significant investment in our commercial operations through trucks’ replacement and expansion in trade signage and chillers. These were ably supported by other sales and trade promotional activities to strengthen our consumer appeal and to bolster our position as the leading local beverage provider.

Grenada’s GDP grew an estimated 3.1% in 2019, driven by strong activity in construction and tourism. According to the updated IMF forecasts from 14 April 2020, due to the outbreak of the COVID-19, GDP growth is expected to slow down to -8% in 2020 and improve to 6.1% in 2021, subject to the post-pandemic global economic recovery. The country relies on tourism and revenue generated by St. George’s University as its main source of foreign exchange. However, the government has been working on expanding its sources of revenue, including by the creation of the citizenship by investment program, which produced a resurgence in the construction and manufacturing sectors of the economy.

These combined, generated a Profit Before Tax (PBT) of $13.7M, a marginal decline against that of 2018. The 2% decrease of the Corporate Tax Rate (from 30% to 28%), led to an increase in the Profit after tax to $9.8M and further generated a corresponding $0.05 increase in Earnings Per Share (from $2.32 in 2018 to $2.37 in 2019).

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

The Statement of Financial Position continued to be robust with Shareholders Equity increasing to $37.7M from $32.7M. Cash and bank balances remained strong after significant capital expenditure as we are focused on optimizing returns to all our stakeholders. We are confident that our cash position will enable us to successfully navigate through this current uncertain period.

DIVIDEND DECLARATION Being cognizant of the current economic situation in the world today and forecast for 2020 as a result of the COVID-19 pandemic, the Board performed a microscopic review of the cash balances, cash requirements and retained earnings of the Company. Notwithstanding the expected economic downturns your Directors have agreed to distribute some of the cash to you, our valued shareholders who have supported us over the years. As a result, the Board of Directors declared an ordinary dividend of EC$1.18 per share.

CAPITAL INVESTMENTS Capital Investments will continue to be made in a disciplined manner and will remain subject to rigorous strategic and financial analysis. We will apply our disciplined investment process which is at the heart of creating investment returns and is tailored to the nature and risk of each investment. An initial review will identify opportunities with characteristics which meet our strategic risk/return appetite. Extensive and ongoing business and financial due diligence is conducted, before a final investment decision is made. Investments are subject to a formal executive approval process and continuous performance monitoring and risk reviews. Being cognizant of this and in keeping with our strategic goal of increased returns to all stakeholders we continue to make targeted and intelligent capital investments which allows us to attain this goal while maximizing new market and product opportunities thus increasing our value creation. In 2019 investments were made in

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

capacity expansion through the installation of two new dual-purpose vessels, crates and bottles. Investments were also made in the commercial department through truck and forklift replacements and marketing equipment to support our sales effort.

CORPORATE CITIZENSHIP AND ENVIRONMENTAL STEWARDSHIP GBL is proud of being a successful company and of the contributions we make to the greater society. At a time of uncertainty in the global economy, social divisions and unprecedented concern about the environment, we believe that we have a vital role to play in the community. By growing and sustaining an economically strong and responsible business over the long-term we made a positive and significant impact not just to our customers, employees and shareholders but to the economy and society as a whole. GBL strives to achieve an effective program that supports its business objectives while helping the society particularly the communities in which we operate. In keeping with this philosophy, the programmes and activities that we support are widespread. During 2019 we supported various organizations and promoters through sponsoring activities, some of which were at the community level fostering the development of the youth within the community, while others were focusing on showcasing and growing the cultural product that Grenada has to offer. GBL supported Community cricket and Grass Roots football while we also supported the Grenada Football Association and West Indies ODI. We continued our sponsorship of numerous social, cultural sporting and educational events including: Internship Programmes with TAMCC and SGU, National Carnival, Grenada Youth Adventurers (GYA), National Learn to Swim Week, Grenada Independence Activities, Grenada Sailing Festival, Young Generation Basketball Tournament, Community Festivals â&#x20AC;&#x201C; St Marks Festival, St Patrickâ&#x20AC;&#x2122;s Weekend Celebration, Saraka.

REPORT OF THE CHAIRMAN We are committed to providing our consumers with the best experiences and the best products in the most sustainable and environmentally friendly manner. Social and environmental accountability has always been a concern of ours while being mindful that climate change and resource scarcity are amongst society’s greatest challenges. As an environmentally conscious organization, we are fully committed to minimizing our operational impact on the environment when and wherever possible. This principle is core to ensuring we do business in the right way. Our continued actions to reduce carbon emissions from our operations include the investment in energysaving lights, managing our business travel, and continuously evaluating our process, equipment, and procedures to identify ways to reduce water consumption. Additionally, the main by-product of our brewing process spent grain, is given free of cost to local farmers to be used as animal feed. At the same time, we continue to manufacture in reusable glass bottles and crates which are reused on average 20 times. When are no longer usable, they are collected, crushed, and return to the manufacturer for recycling at GBL’s cost.

GOVERNANCE AND COMPLIANCE Grenada Breweries Limited believes that a robust and effective governance framework is essential to support management in delivering the company’s strategy. In keeping with this belief GBL is managed by an effective Board which is collectively responsible for the long-term success of the company and to deliver sustainable shareholder value. The Board has ultimate responsibility for the management, direction, governance and performance of the company, and leads and oversees the company’s business. The Board plays a critical role in ensuring that the tone for the company’s culture and values is set from the top and strives to ensure that GBL meets high standards of safety, performance and governance. The Board is also responsible for ensuring appropriate resources are in place to achieve its

strategy and deliver sustainable performance. It directs and reviews the Company’s operations within an agreed framework of controls, allowing risk to be assessed and managed within agreed parameters. The Board is collectively accountable to the company’s shareholders for the proper conduct and success of the business. GBL’s Board and management are committed to ensuring that a strong governance framework operates throughout the Group, recognizing that good corporate governance is a vital component to support management’s delivery of the Company’s strategic objectives, and to operate a sustainable business for the benefit of all stakeholders. The Board recognizes that it has responsibilities to its shareholders, customers, employees and suppliers as well as to the communities in which it operates and has ultimate authority over, and oversight of, the Company and regards corporate governance as a critical element in achieving its goals.

HEALTH AND SAFETY COMPLIANCE GBL knows that it is our staff who deliver our business goals and we attach great importance to ensuring the continued health, safety, welfare and development of our workforce and to minimize the distress and disruption caused by any injuries or work-related illnesses which may occur. A positive health and safety culture is at the core of our organization and the health and safety of our employees, contractors and visitors is a priority for GBL and we remain committed to the provision of a safe working environment. We have effective policies, procedures and a safety management system in place to ensure the continued health, safety, welfare and development of our staff. We prioritized employee engagement through regular toolbox sessions, providing reminders of safety procedures and focus on changing our culture from a reactive to a proactive one. Additionally, we have continued to influence and engage with stakeholders, to create and share knowledge and awareness of health and safety risks; encouraged behavior change through

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

assessments and direct interventions including inspections and investigations; maintained a strong focus on face-to-face intervention in work activities; held people to account and taken enforcement action. We monitor our improvements against our targets, examining the causes of incidents and identifying ways in which we can address the issues. Audits are done in every department looking at the work environment, equipment and any improvements that are necessary to reduce accident likelihood. In support of our philosophy that the people best placed to make workplaces safe from harm are our employees, specific focus in 2019 was placed on improving their awareness of workplace hazards, created reporting mechanisms and taking corrective action in the shortest possible time. Through these efforts, GBL realized a reduction in Lost Time Injuries (LTIs) from six to one and overall a 29% reduction in personal injury accidents. GBL continues to provide every employee with the required Personal Protective Equipment (PPEs) for the jobs together with trainings. In 2020, GBL will continue and improve on these initiatives which will further improve the safety of the company.

HUMAN RESOURCE We are proud for the continued commitment, professionalism and hard work of all our colleagues within our organization. It is through their efforts and enthusiasm that we can, and will, continue to protect grow and develop our business and deliver gains to all our stake holders. Our human resource values are focused on being strategic, innovative, professional, respectful, accountable, enabling and transparent, thus supporting GBL in fulfilling its mission. People are a key pillar of growth and only with strong and capable talent will we be able to propel the Company forward. Towards this end, GBL’s talent development initiatives are geared towards cultivating a workforce that is fully engaged and aligned with the organization’s aspirations. Alongside this, the Company’s recruitment programmes allow for the injection of new talent

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

as we move forward to expand our pool of highly skilled employees. In keeping with this belief, notably investments were made in training and development with employees pursing training through: Harvard Business School, University of the West Indies, on the job training relating to the operation of the new state of the art brewhouse, health and safety and several other training initiates facilitated through, autonomous consultants as well through our parent company, Ansa McAL Limited.

CONCLUSION The Covid-19 pandemic is one of the greatest challenges facing the world presently. We must be aware that the Impacts of COVID-19 will be widespread across many industries due to disruption of global supply chains, reduced investment in capital improvements and construction, disruptions to manufacturing and distribution, reduced consumer demand for goods and services due to lost income and restrictions on consumers’ ability to move freely. Nonetheless, with this unprecedented challenge comes opportunities for innovation and strategic actions to improve and build a stronger and more resilient business. While a contraction in our results is forecast for 2020, we have a colossal opportunity to reimagine new ways of doing business and delivering value to our stakeholders. We will reengineer and reformulate our marketing, technical and creative strategies in this new normal to deliver sustainable growth to our shareholders being cognizant of value creation while providing world-class products and services. Our Board is fully aware of the energy focus, tenacity and sacrifice which (are) is required to steadfastly deliver results. I express gratitude to my Board of Directors for their expertise and counsel which contributed to the continuous growth of our Company. On behalf of our Board of Directors I extend a heartfelt thank you to all our employees for their contribution and commitment to strengthening our company. I would like to express our gratitude to the valued shareholders who remain steadfast on the journey

REPORT OF THE CHAIRMAN with us. We are looking forward to the future with great anticipation and expectation. We also thank all customers and business partners for the confidence and unwavering support they have given to us. Our business is a great company with excellent people and robust strategies that ensures (that) we are well-placed to benefit from the resilience of our home market and expansion to

regional and international markets. Our management team has the experience, confidence, strategy and fortitude to drive through challenging times, while we continue to maintain a tight focus on costs and operations to manage our business responsibly considering the existing economic environment.

Anthony N. Sabga III CHAIRMAN

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Corporate Information BOARD OF DIRECTORS Mr. Anthony N. Sabga III - Chairman Mr. Peter Hall - Beverage Sector Head Mr. Ron Antoine - Managing Director Mrs. Aldyn Henry-Bishop - Financial Comptroller/Company Secretary Mr. Andrew Bierzynski - Chairman of Audit Committee Mr. Mark Wilkin Mr. Averne Pantin Mr. Adrian Sabga Mr. Akash Ragbir

AUDIT COMMITTEE Mr. Andrew Bierzynski - Chairman Mr. Ron Antoine Mr. Averne Pantin

SECRETARY/FINANCIAL COMPTROLLER Mrs. Aldyn Henry-Bishop - Bsc. (Hons), FCCA, MBA

REGISTERED OFFICE Grand Anse, St. George’s, Grenada, West Indies.

AUDITORS PKF Accountants and Business Advisers Grand Anse, St. George’s, Grenada.

BANKERS CIBC FirstCaribbean International Bank (Barbados) Limited Church Street, St. George’s, Grenada. RBTT Bank (Grenada) Limited Grand Anse, St. George’s, Grenada.

SOLICITORS Mitchell & Co. Units 14-16 Excel Plaza Grand Anse, St. George’s Grenada.

REGISTRARS AND TRANSFER OFFICE Aldyn Henry-Bishop, Company Secretary Grenada Breweries Ltd. Grand Anse, St. George’s Grenada.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Report of the Directors Report of the Directors for the year ended 31st December, 2019 to be presented to the shareholders at the Sixtieth Annual Meeting.

PRINCIPAL ACTIVITIES The principal activities of the Company, registered in Grenada, are brewing, bottling and distribution of Beer, Stout, Malta, Soft Drinks and other Drinks. The Directors have pleasure in presenting to the shareholders their Sixtieth Annual Report, together with the Audited Financial Statements for the year ended December 31, 2019. $000 32,658 9,837

Retained Earnings brought forward as previously reported Net earnings for the year were Retained earnings available for appropriation Dividends paid on the common shares issued: Final 2018 dividend payment of $1.16 cents per share

42,495 (4,820)

Retained earnings carried forward

37,675

Subsequent to year end, a dividend of $1.18 cents per share in respect of 2019 was declared by the Directors. These would be accounted for as an appropriation of retained earnings in the year 2020. Profit before tax was $13,662 Profit after tax and attributable to Shareholders was $9,837.

DIRECTORS The Directors listed on page 3 served during the year. In accordance with By-Law No 1 Section 4.5, Mr. Adrian Sabga and Mrs. Aldyn Henry-Bishop are the Directors retiring by rotation and being eligible, offer themselves for re-election.

AUDITORS The Auditors Messrs. PKF Accountants and Business Advisers retire and being eligible, offer themselves for reappointment at a fee to be agreed with the Directors. Shares According to the Companyâ&#x20AC;&#x2122;s Register, the interests of the Directors on the dates indicated are as follows: Mr. Andrew Bierzynski Mrs. Aldyn Henry-Bishop Mr. Ron Antoine

Shares 134,130 1,560 11,250

(31.12. 2019)

The following companies held more than 5% of the stated capital of the Company: ANSA McAL National Insurance Board On behalf of the Board

Aldyn Henry-Bishop Company Secretary 20th July, 2020

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

2,307,068 389,336

Notice of Annual Meeting of Shareholders Notice is hereby given that the Sixtieth Annual Meeting of Grenada Breweries Limited will be held at the Grenada Room, Radisson Grenada Beach Resort, St. George’s on Friday August 28th, 2020 at 4:30 pm to: Special Business 1. To amend the company’s By-Law No. 1 by inserting paragraph 12.2 as follows: “A meeting of shareholders may be held by means of such telephone, video, electronic, virtual or other communication facilities as to permit persons participating in the meeting to hear each other and every reference in this By-Law to show of hands shall be construed in the case of such a meeting as requiring an oral or written indication by a shareholder of his vote.” 2. To amend the Company’s By-Law No. 1 by changing paragraph 18, methods of giving notice to include by email as follows: “Any notice or other documents required by the Act, the Regulations, the Articles or the By-laws to be sent to any shareholder, debenture holder, director or auditor may be delivered personally or sent by pre-paid mail or cable or telex or facsimile transmission or email to any such person at his latest address, including his or her email address, as shown in the records of the Company or its transfer agent, and to any such director at his latest address, including his or her email address as shown in the records of the Company, or in the latest notice filed under section 66 or 74 of the Act, and to the auditor at his business address, or the email address provided by the auditor.” 3. Shareholders Resolution to Effect Name Change WHEREAS: The board of directors of the Company indicated that it is in the best interest of the Company to change its name from GRENADA BREWERIES LIMITED to CARIB BREWERY (GRENADA) LIMITED and that the purpose of this Special Meeting is to obtain the approval of the shareholders to amend the Articles of Incorporation of the Company to effect the said change. IT WAS RESOLVED THAT: 1. The Articles of Incorporation of the Company be amended to reflect the change of Company’s name from GRENADA BREWERIES LIMITED to CARIB BREWERY (GRENADA) LIMITED; and 2. The Company Secretary do file all appropriate documents at the Corporate Affairs and Intellectual Property Office to reflect the Company’s name change.

Ordinary Business 1.

To receive the Audited Financial Statements for the year ended December 31st, 2019 and the Reports of the Directors and Auditors thereon.

To re-elect Directors.

To re-appoint Auditors and authorize the Directors to fix their remuneration.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Notice of Annual Meeting of Shareholders ALL shareholders are required to wear a mask upon entry and during the proceedings, to follow Radisson Grenadaâ&#x20AC;&#x2122;s established COVID-19 protocols such as washing of hands upon entry, sanitizing hands and submitting to temperature checks. Social distancing will be followed throughout the proceedings with floor markers and seating layout in accordance with social distancing protocols. These precautions have been taken to ensure the well-being of all our stakeholders and to be in compliance with the latest directives from public health and government officials in connection with the COVID-19 virus pandemic.

Dated this 20th day of July 2020 By order of the Board

Aldyn Henry-Bishop Company Secretary

Notes: 1. In accordance with Section 108 (1) and (2) of the Company Act #35 of 1994, the Directors have fixed August 1st 2020 as the record date for determining the Shareholders who are entitled to receive dividend payments for the period ending December 31st 2019 and notice of the Annual Meeting for the period ended December 31st 2019. Only Shareholders on record at the close of business on August 1st 2020 are therefore entitled to receive such. A list of such Shareholders will be available for examination by the Shareholders at the Companyâ&#x20AC;&#x2122;s Registered Office during usual business hours and at the Annual Meeting. 2. A Shareholder entitled to attend the Annual Meeting and vote is entitled to appoint one or more proxies to attend and vote instead of him/her; a proxy need not be a Shareholder. Attached is a Proxy Form for your convenience which must be completed and signed in accordance with the Notes on the Proxy Form and then deposited with the Company Secretary at the Registered Office of the Company no later than 48 hours before the time appointed for holding the meeting. 3. The Transfer Books and Register of members will be closed from August 1st - August 28th 2020, inclusive.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Carib Brewery (Grenada) Limited A New Corporate Identity! For close to 60 years, Grenada Breweries Ltd. (GBL) has been the proud home of award-winning beverages. We have consistently worked hard to become and remain both an icon in the local market and a respected employer of choice. Always looking forward, the BREWERY takes prides on striving for continuous quality and agility to improve all aspects of our product, processes and distribution. As the world transitions to the ‘new normal’, GBL must also transform. A new corporate brand identity which includes a company trading name change to CARIB BREWERY (GRENADA) Limited depicts a strong, reputable organization with a solid foundation. This new corporate identity will represent one united family of Breweries (Grenada, Trinidad and Tobago, St. Kitts and Nevis and Florida Beer Company) under the umbrella of the Ansa McAl Group of Companies, one of the Caribbean leading Conglomerates. ANSA McAL stands today as one of the most robust, stable and progressive business institutions in Trinidad and Tobago and the region. We are an iconic Corporate Group comprising of 73 companies in over 8 territories, offering our world renowned brands and product services and state of the art infrastructure, in over 30 markets across the world and employing a population of close to 6000 people. Over the course of the past 16 years, as part of the Ansa McAl Group of companies, GBL has grown from strength to strength, bolstered by being an important part of the Ansa McAl beverage sector. Already often referred to by our customers, consumers and the public at large as “Carib”, GBL now want to formally include the name of its flagship brand in its corporate identity. The connection of Corporate name to flagship brand has deep value and precedent in the industry (Heineken, Carlsberg, Miller Coors etc.). Among the benefits: 1) the automatic benefit to the flagship brand whenever the corporate name if utilized, 2) significant synergies across the Ansa McAl Beverage Sector. CARIB BREWERY ( GRENADA ) Limited is a vibrant part of our island’s soul and culture that has been woven into the social fabric of the greater region. We take pride in Our Brewery, Our Brands, Our People! World Class Brands! World Class Beverages!

Annual Report Financials 2019

Financial Highlights 2015-2019

2015

2016

2017

2018

2019

43,449

47,478

51,987

58,629

64,430

Profit Before Exceptional Items & Tax

8,847

11,575

12,343

13,869

13,662

Income Attributable to Shareholders

6,456

7,982

8,775

9,621

9,837

Earnings per share

$1.55

$1.92

$2.11

$2.32

$2.37

Dividends Amount - Ordinary

$0.78

$0.96

$1.06

$1.16

$1.18

28,261

33,003

27,444

32,658

37,675

Net Sales Revenues

Shareholdersâ&#x20AC;&#x2122; Equity

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Independent Auditor’s Report Pannell House P.O. Box 1798 Grand Anse St. George’s Grenada West Indies Tel (473) 440-2562/3014/2127/0414 Fax (473) 440-6750 Email pkf@Spiceisle.com

Accountants & business advisers

INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF GRENADA BREWERIES LIMITED

Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Grenada Breweries Limited (‘the Company’) which comprise the statement of financial position as at December 31st, 2019, and the statement of comprehensive income, statement of changes in equity and the statement of cash flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31st, 2019 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRSs”).

Basis for Opinion We conducted our audit in accordance with International Standards on auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Grenada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other information included in the Company’s 2019 Annual Report Other information consists of the information included in the Company’s 2019 Annual Report, other than the financial statements and our auditor’s report thereon. Management is responsible for the other information. Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Report on the Audit of the Financial Statements (continued)

Responsibilities of Management and The Audit Committee for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Audit Committee is responsible for overseeing the Company’s financial reporting process. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: 

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Auditors’ Responsibility for the Audit of the Financial Statements 

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.



Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Report on the Audit of the Financial Statements (continued) 

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists; we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.



Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

GRENADA March 11th, 2020

Accountants & Business Advisers:

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Statement of Financial Position at 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Notes

2019

2018

7 8 9

26,013 475 25

15,841 495 25

26,513

16,361

8,845 8,527 5,335 9,476

14,475 8,470 5,330 11,697

32,183

39,972

58,696

56,333

4,155 571 32,949

4,155 571 27,932

37,675

32,658

2,608 469

2,605 490

3,077

3,095

7,935 4,451 5,009 549

10,329 3,921 5,473 857

17,944

20,580

TOTAL LIABILITIES

21,021

23,675

TOTAL EQUITY AND LIABILITIES

58,696

56,333

ASSETS Non-Current Assets Property, plant and equipment Intangible assets Investment security

Current Assets Inventories Trade and other receivables Investment security Cash and cash equivalents

10 11 9 12

TOTAL ASSETS EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Stated capital Capital reserve Retained earnings

13 14

TOTAL EQUITY Non-Current Liabilities Past service benefits liability Deferred tax liability Current Liabilities Trade and other payables Provision for repayment of deposits on cases Amount due to ANSA McAL Group of Companies Taxation payable

15 16

17 18

The accompanying notes form an integral part of these financial statements These financial statements were approved by the Board of Directors on 27th February, 2020 and signed on its behalf by:

:Director

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

:Director

Annual Report Financials 2019

Statement of Comprehensive Income for the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Notes

2019

2018

64,430

58,629

Cost of sales

(39,045)

(33,055)

Gross profit

25,385

25,574

Administration expenses Selling and distribution expenses Rental income Other income

(4,246) (7,825) 18 330

(5,128) (7,478) 22 879

(11,723)

(11,705)

13,662

13,869

(3,846) 21

(4,270) 22

(3,825)

(4,248)

9,837

9,621

Net Sales

Profit for the year before taxation

Provision for taxation - Current expense - Deferred tax 19 Profit for the year after taxation

Statement of Changes in Equity For the year ended 31st December, 2019 Stated Capital

Revaluation Reserve

Retained Earnings

Total Equity

4,155

571

22,718

27,444

Dividends paid

(4,407)

Net profit for the year after taxation

9,621

4,155

571

27,932

32,658

Dividends paid

(4,820)

Net profit for the year after taxation

9,837

4,155

571

32,949

37,675

Balance at 1st January, 2018

Balance at 31st December, 2018

Balance at 31st December, 2019

The accompanying notes form an integral part of these financial statements

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Statement of Cash Flows For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

2019

2018

Net profit for the year before taxation

13,662

13,869

Adjustment for: Depreciation Amortization of intangible asset Gain on disposal

4,366 20 (6)

2,360 53 (17)

18,042

16,265

Operating Activities

Operating profit before working capital changes Decrease/(increase) in inventories Increase in trade and other receivables Increase in investment security Increase/(decrease) in past service benefits liability (Decrease)/increase in trade and other payables Increase in provision for repayment of deposits on cases (Decrease)/increase in amounts due to Ansa McAl Group

5,630 (57) (5) 3 (2,394) 530 (459)

(2,304) (2,370) (1) (366) 1,087 657 2,946

21,290 (4,153)

15,914 (6,993)

17,137

8,921

Disposal of property, plant and equipment Purchase and transfer of property, plant and equipment Purchase of intangible asset

(14,538) -

17 (3,072) (548)

Net cash used in Investing Activities

(14,538)

(3,603)

Dividends paid to ordinary shareholders

(4,820)

(4,407)

Net cash used in Financing Activities

(4,820)

(4,407)

(Decrease)/increase in cash and cash equivalents Cash and cash equivalents - at beginning of year

(2,221) 11,697

911 10,786

9,476

11,697

5 9,471

5 11,692

9,476

11,697

Income tax paid Net cash provided by Operating Activities Investing Activities

Financing Activities

- at end of year Represented by: Cash on hand Cash at bank

The accompanying notes form an integral part of these financial statements

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Corporate Information The Company was incorporated in Grenada on 27th July, 1960. The Company was issued a certificate of continuance under Section 365 of the Company’s Act. The Company’s registered office and principal place of business is Maurice Bishop Highway, St. George’s, Grenada. The Company’s principal activities are the brewing, bottling and distribution of Beers, Stout, Maltas and Soft Drinks. Grenada Breweries Limited is a subsidiary of the Ansa McAl Group of Companies, which owns 55.54% of the ordinary share capital of the Company. Ansa McAl Limited is incorporated in the Republic of Trinidad and Tobago and is a diversified public conglomerate which is listed on the Trinidad and Tobago Stock Exchange. The Company’s registered office is 11 Maraval Road, Port of Spain, Trinidad. During the year the Company employed on average one hundred and ninety-seven (197) persons (2018-174).

Significant Accounting Policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to the years presented, unless otherwise stated. (a)

Basis of Preparation These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and are expressed in Eastern Caribbean Currency Dollars. The financial statements have been prepared under the historical cost convention modified by the revaluation of land and buildings. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (b)

Changes in accounting policies and disclosures

(i)

New Accounting Standards, Amendments and Interpretations The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended December 31st, 2018 except for the adoption of new standards and interpretations below. IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an arrangement contains a lease, SIC 15 Operating leases-incentives and SIC 12 Evaluating the Substance of Transactions involving the legal form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under single on-balance sheet model. Lessor accounting is substantially unchanged from IAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in IAS 17. Therefore, IFRS 16 does not have an impact for leases where the Company is a Lessor. The adoption of this standard had no material impact on the Company. IFRS 9 – Financial Instruments Amendments – Preparation Features with Negative Compensation (Effective 1st January, 2019) The amendments to IFRS 9 clarify that a financial asset passes the “solely payments of principal and interest” (SPPI) criterion regardless of the event or circumstances that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract. The basis for conclusions to the amendments clarifies that the early termination can result from a contractual term or from an event outside the control of the parties to the contract such as change in law or regulation leading to the early termination of the contract. In the basis for conclusions to the amendments, the IASB also clarified that the requirements in IFRS 9 for adjusting the amortized cost of a financial liability, when a modification does not result in derecognition, are consistent with those applied to the modification of a financial asset that does not result in derecognition. This means that the gain or loss arising on modification of a financial liability that does not result in derecognition, calculated by discounting the change in contractual cash flows at the original effective interest rate is immediately recognized in profit or loss. The amendments must be applied retrospectively. These amendments had no impact on the Company as there are no debt instruments with prepayment features with negative compensation.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies

(continued)

(b)

Changes in accounting policies and disclosures (continued)

(i)

New Accounting Standards, Amendments and Interpretations (continued) IFRIC 23 – Uncertainty over income tax treatment (Effective 1st January, 2019) The IFRIC interpretation clarifies application of the recognition and measurement requirements in IAS 12 Income Taxes when there is uncertainty over income tax treatments. The interpretation specifically addresses the following: -

Whether an entity considers uncertain tax treatments separately The assumptions an entity makes about the examination of tax treatments by taxation authorities. How an entity determines taxable profit (tax loss), unused tax losses, unused tax credits and tax rates. How an entity considers changes in facts and circumstances.

An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The adoption of this interpretation had no impact on the Company. IAS 12 Income Taxes – Amendment – Income tax consequences of payments on financial instruments classified as equity (Effective 1st January, 2019) The amendment clarifies that the income tax consequences on dividends are linked more directly to past transactions or events that generated distributable profits than to distributions of owners. Therefore, an entity recognized the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events. An entity applies those amendments for annual reporting periods beginning on or after 1 January 2019. When an entity first applies those amendments, it applies them to the income tax consequences or dividends recognized on or after the beginning of the earliest comparative period. The adoption of this amendment has no impact on the Company.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (b)

Changes in accounting policies and disclosures (continued)

(ii)

Standards in issue not yet effective The following is a list of standards and interpretations that are not yet effective up to the date of issuance of the Company’s financial statements. The Company intends to adopt these standards where appropriate, when they become effective.    

(c)

IFRS 17 – Insurance Contracts Effective 1 January 2022) Amendments to IFRS 3 – Definition of Business (Effective 1 January, 2020) Amendments to IAS 1 and IAS 8 - Definition of Material (Effective 1st January, 2020) Amendments to References in the Conceptual Framework in IFRS Standards (Effective 1st January, 2020)

Property, Plant and Equipment Some items of property, plant and equipment are stated at valuation less subsequent depreciation. The others are stated at cost less accumulated depreciation. Subsequent costs are included in the assets carrying amounts or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred. Increases in the carrying amount arising on revaluation of land and buildings are credited to revaluation surplus in equity. Decreases that offset previous increases of the same asset are charged against the surplus directly in equity; all other decreases are charged to the Statement of Comprehensive Income. Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts to their residual values over their estimated useful lives. The rates used are as follows: Per annum Freehold Properties Plant and Machinery Motor Vehicles Furniture, Fixture and Equipment Computers Bottles Crates

2% - 2.50% 2.5% - 33.33% 20% - 33.33% 10% - 33.33% 16.67% - 33.33% 33.3% 10% - 12.5%

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at each Statement of Financial Position 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. 28

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (c)

Property, Plant and Equipment (continued) Gains and losses on disposals are determined by comparing proceeds with carrying amounts. These are included in the Statement of Comprehensive Income. When revalued assets are sold, the amounts included in revaluation surplus are transferred to retained earnings.

(d)

Inventories Inventories are valued as follows: 1) Raw materials and general stocks

- The lower of landed cost determined on the average price basis and net realizable

2) Consumable stores

- The lower of landed cost and net realizable value on a first-out basis.

3) Work-in-progress

- Raw material costs, direct labour and overheads incurred in brewing.

4) Finished products

- Raw material costs, direct labour ad overheads incurred in brewing, bottling and packaging

5) Goods in transit

- Suppliersâ&#x20AC;&#x2122; invoiced cost

Adequate provision has been made for slow-moving and obsolete items. (e)

Returnable Bottles and Crates in Circulation The refundable deposit on bottles and crates is recorded in current liabilities.

(f)

Foreign Currencies Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the date of the Statement of Financial Position. The resulting profits and losses are dealt with in the Statement of Comprehensive Income. There are no foreign currency borrowings.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (g)

Past Service Benefits Other Than Pensions The Company provides, to all employees who are members of the Technical and Allied Workersâ&#x20AC;&#x2122; Union (TAWU), a past service benefit payable at the end of employment. This is charged against profit on a systematic basis over the employeesâ&#x20AC;&#x2122; period of employment with the Company. The benefit is calculated on a monthly basis by applying a percentage of current salary levels and is accrued in non-current liabilities.

(h)

Profit Sharing Scheme The Company operates an employee profit sharing scheme and the amount to be distributed to employees each year is based on the terms outlined in the union agreement. Employees receive their profit share in cash. The Company accounts for the profit share as an expense, through the Statement of Comprehensive Income.

(i)

Cash and Cash Equivalents Cash and cash equivalents comprise of cash on hand and at bank and short-term demand deposits with original maturity of three (3) months or less.

(j)

Trade and Other Receivables Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Trade and other receivables are recognised initially at fair value and subsequently measured at amortized cost using the effect interest method, less provision for expected credit loss. The Company uses a provision matrix to calculate expected credit loss (ECL) for trade receivables.

(k)

Financial Instruments Financial instruments are contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (k)

Financial Instruments - (continued)

(i)

Recognition and Measurement All regular way purchases and sales of financial assets are recognised or derecognised on the trade date, that is the date on which the Company commits itself to purchase or sell an asset. A regular way purchase and sale of financial assets is a purchase or sale of an asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned. Initial Measurement The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the instruments. Financial instruments are initially measured at their fair value, except in the case of financial assets and financial liabilities recorded at fair value through profit or loss (FVPL) whereby transaction costs are added to, or subtracted from, this amount. Trade receivables are measured at transaction price. Subsequent measurement categories of financial assets and liabilities The Company classifies all its financial assets based on the business model for managing the assets and the assetâ&#x20AC;&#x2122;s contractual terms. The Company classifies its financial assets at amortized cost except equity which is at fair value through profit and loss. Amortized cost Financial assets are measured at amortized cost if both of the following conditions are met:

(ii)

ď Ź

The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and

ď Ź

The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

Impairment In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss (ECL) model as opposed to an incurred credit loss model under ISA 39. The expected credit loss model requires the Company to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. Therefore, it is no longer necessary for a credit event to have occurred before credit losses are recognized.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (k)

Financial Instruments (continued) The Company records an allowance for expected credit loss for its trade receivables using a simplified approach to calculate ECLs whereby it recognizes a loss allowance based on lifetime ECLs at each reporting date. The ECLs on these financial assets are estimated using a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The provision rates used in the provision matrix are based on days past due. For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If on the other hand the credit risk on a financial instrument has not increased significantly since initial recognition the Company recognizes the loss allowance for the financial instrument at an amount equal to 12-month ECL where applicable. The assessment of whether lifetime ECL should be recognized is based on significant increase in the likelihood or risk of default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or actual default occurring. Lifetime ECL represents the expected credit losses that will result for all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible with 12 months after the reporting date. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial assets have occurred. Evidence that a financial asset is credit-impaired includes observable date about the following events: (i)Significant financial difficulty of the issuer or borrower;

(iii)

(ii)

A breach of contract, such as a default or past due event;

(iii)

It is becoming probable that the borrower will enter in bankruptcy or other financial re-organisation; and

(iv)

The disappearance of an active market for that financial asset because of financial difficulties.

Write offs The gross carrying amount of a financial asset is written off to the extent that there is no realistic prospect of recovery. This is generally when the Company determines that the borrower does not have assets or resources of income that would generate sufficient cash flows to repay the amount subject to the write-of.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (k) (iv)

Financial Instruments (continued) Derecognition of Financial Assets The company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset measured at amortised cost, the difference between the assetâ&#x20AC;&#x2122;s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

(v)

Financial Liabilities When financial liabilities are recognised they are measured at fair value of the consideration given plus transactions cost directly attributable to the acquisition of the liability. Financial liabilities are re-measured at amortised cost using the effective interest rate. Financial liabilities are derecognized when they are extinguished, that is when the obligation specified in the contract as discharged, cancelled or expired. The difference between the carrying amount of a financial liability extinguished and the consideration price is recognized in the statement of comprehensive income.

(l)

Revenue Recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Companyâ&#x20AC;&#x2122;s activities. Revenue is shown net of estimated returns, rebates and discounts. Revenue is recognized when the Company has delivered products to the customer; the customer has accepted the products and collectability of the related receivables is reasonably assured.

(m)

Related Parties Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operating decisions. Transactions entered into with related parties in the normal course of business are carried out on commercial terms and conditions during the year.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (n)

Income Tax The charge for the current year is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using the applicable tax rates for the period. Deferred income tax is provided using the liability method, on all temporary differences at the Statement of Financial Position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rate that is expected to apply to the period when the asset is realized or the liability is settled, based on the enacted tax rate at the Statement of Financial Position date. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

(o)

(p)

Stated Capital Ordinary shares are classified as equity.

(q)

Trade Payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortized cost using the effective interest rate method.

(r)

Provisions Provisions are recognized when the Company has a present legal or constructive obligation, as a result of past events, if it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.

(s)

Dividends Dividends that are proposed and declared during the period are accounted for as an appropriation of retained earnings in the Statement of Changes in Equity.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Significant Accounting Policies (continued) (t)

Finance Charges Finance charges are recognized in the Statement of Comprehensive Income as an expense in the period in which they are incurred.

(u)

Intangible Assets Amortisation is charged to comprehensive income on a straight-line basis over the estimated useful lives of the intangible asset unless such lives are indefinite.

Critical Accounting Estimates and Judgments in Applying Accounting Policies The development of estimates and the exercise of judgement in applying accounting policies may have a material impact on the Company’s reported assets, liabilities, revenues and expenses. The items which may have the most effect on these financial statements, are set out below. i)

Valuation of property The Company utilizes professional valuators to determine the fair value of its properties. Valuations are determined through the application of a variety of different valuation methods which are all sensitive to the underlying assumptions chosen.

ii)

Provisions for expected credit losses of trade receivables The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due. The provision matrix is initially based on the Company’s historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company’s historical credit experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.

iii)

Property, plant, equipment Management exercises judgment in determining whether future economic benefits can be derived from expenditures to be capitalized and in estimating the useful lives and residual values of these assets.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Net Sales Net sales comprise the value of sale of Beer, Stout, Maltas and Soft Drinks in Grenada, Trinidad and St. Vincent excluding Value Added Tax and Stamp Tax.

Other Income Other income comprises manufacturers’ rebate, sundry sales, profit on the disposal of property, plant and equipment and interest income.

Profit for the Year This profit is stated after charging: Auditors’ remuneration Directors’ fees and expenses Depreciation Amortization

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

2019

2018

60 6 4,366 20

53 3 2,360 53

4,771 6,578 (1,807) 4,771

Balance at 31st December, 2019 Cost/Valuation Accumulated depreciation

Net Book Value

Balance at 31st December, 2018 Cost/valuation Accumulated depreciation

1,812 4,766 (1,807)

Net Book Value

For the year ended 31st December, 2019 Opening book value Additions for the year Transfer Depreciation charge for the year

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

6,096

6,096 -

6,096

5,029 6,091 (5,024) -

5,029

5,029 -

5,029

3,072 1,957 -

3,072

Net Book Value

3,072 -

For the year ended 31st December, 2018 Opening book value Additions for the year Disposal for the year - Cost Disposals for the year - Accumulated depreciation Depreciation charge for the year

Work-inProgress

776

776 -

776

299 477 -

299

299 -

299

299 -

299

299 -

Land

1,291

5,687 (4,396)

1,291

1,879 (477) (111)

1,879

6,164 (4,285)

1,879

(140)

1,972 47 -

1,972

6,117 (4,145)

11,130

51,326 (40,196)

11,130

6,983 1,167 5,024 (2,044)

6,983

45,135 (38,152)

6,983

(1,840)

8,379 444 -

8,379

44,691 (36,312)

Plant & Building Machinery

770

1,830 (1,060)

770

861 (91)

861

1,830 (969)

861

(100)

403 558 -

403

1,272 (869)

Fixtures and Fitting

1,179

4,463 (3,284)

1,179

790 702 (313)

790

3,761 (2,971)

790

496 (280)

1,004 66 (496)

1,004

4,191 (3,187)

Motor Vehicles

26,013

76,756 (50,743)

26,013

15,841 9772 4,776 (4,366)

15,841

62,218 (46,377)

15,841

496 (2,360)

15,129 3,072 (496)

15,129

59,642 (44,513)

Total

Balance at 1st January, 2018 Cost/valuation Accumulated depreciation

Bottles in circulation

Annual Report Financials 2019

Notes to the Financial Statements

For the year ended 31st December, 2019

Expressed in thousands of Eastern Caribbean Dollars

Property, Plant and Equipment

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

Intangible Assets 2019

2018

Gross carrying amount, 1 January, 2019 Additions for the year

548 -

548

Gross carrying amount, 31 December 2019

548

Accumulated amortization 31 December, 2019 Amortization for the year

(53) (20)

(53)

Accumulated amortization 31 December, 2019

(73)

(53)

475

495

5,335

5,330

Computer Software

Net carrying amount, 31 December, 2019

Investment Securities Equity security at fair value through profit and loss Eastern Caribbean Securities Exchange -2,500 share of $10 each Investment security at amortized cost Fixed deposits

The fair value of the Eastern Caribbean Securities Exchange Shares was estimated at cost since insufficient recent information was unavailable to measure at fair value.

10.

Inventories Finished goods Raw materials and work in progress Goods in Transit Consumables and spares

902 2,866 3,389 1,688

1,084 8,169 3,523 1,699

8,845

14,475

The difference between the purchase price or production cost of inventories and their replacement value is not material. Bottles in circulation previously included in inventory are not shown under property, plant and equipment.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

11.

Trade and Other Receivables

Inter Company receivables Trade receivables - net Due from other related parties Other receivables Prepayments and accrued income

2019

2018

2,156 4,505 317 98 1,451

1,947 4,715 383 399 1,026

8,527

8,470

Movements in provision for expected credit loss of trade receivables were as follows: As at 1st January, 2019 Net increase in expected credit loss

163 33

55 108

As at 31st December, 2019

196

163

The carrying value of trade and other receivables approximates their fair value.

12.

Cash and Cash Equivalents First Caribbean International Bank (Barbados) Limited - Current Accounts - Cash on hand

9,471 5

11,692 5

9,476

11,697

The Company has an unused EC$5.0 million overdraft facility available with First Caribbean International Bank (Barbados) Limited.

13.

Stated Capital Authorised - 6,000,000 Ordinary shares of no par value - 300,000 10% Preference shares of no par value Allocated, Called Up and Fully Paid - 4,154,652 ordinary shares of no par value

4,155

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

14.

Capital Reserve Account 2019

2018

571

Balance at 31st December, 2019

This reserve consists of surplus derived from revaluation of property, plant and equipment less amounts utilised in the issue of bonus shares.

15.

Past Service Benefits Liability Balance at 1st January, 2019

2,605

2,971

(366)

2,608

2,605

Net contributions/(payments) for the year Balance at 31st December, 2019

This amount is a provision for retirement benefits for persons employed with the Company and represented by the Grenada Technical and Allied Workersâ&#x20AC;&#x2122; Union.

16.

Deferred Tax Liability Balance at 1st January, 2019

490

512

(21)

(22)

490

888 4 2,657 4,255

1,699 1 82 3,151 5,478

7,935

10,329

Deferred tax decrease Balance at 31st December, 2019 The deferred tax liability is due to the acceleration of tax depreciation.

17.

Trade and Other Payables Trade payables Due to other parties Due to statutory authorities Accruals Other payables

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

18.

Amount Due to Ansa McAl Group of Companies

Ansa Chemicals Limited Ansa Automotive Limited Ansa Polymer Ansa McAL Limited - Head Office Carib Brewery TNT Limited/Caribbean Development Company Limited Ansa McAL (USA) Inc. Carib Glassworks Limited Carib Brewery St. Kitts & Nevis Limited Sissons Paint (Grenada) Limited DCI Miami Trinidad & Tobago Insurance Limited

19.

2019

2018

260 1 228 146

286 910 826

2,218 1,424 723 2 3 4

1,689 1,043 747 (72) 6 38 -

5,009

5,473

Taxation Income taxes in the Statement of Comprehensive Income vary from amounts that would be computed by applying the statutory tax rate for the following reasons: Net profit before taxation

20.

13,662

13,869

Tax at applicable statutory rate 28% (2018-30%) Income not subject to tax Expenses not deducted for tax purposes Other

3,825 (2) 139 (137)

4,161 (2) 46 43

Taxation expense

3,825

4,248

4,820

4,407

Dividends Paid Final Dividends paid

21.

Contingent Liabilities At the Statement of Financial Position date the Company was contingently liable to the Government of Grenada for custom bonds in the amount of $126,179.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

22.

Related Party Transactions 2019 i)

The following transactions were carried out with other Ansa McAL Group companies during the year:

Sales of goods

Purchase of goods

Payment of dividends

ii)

Compensation of key management personnel of the company: Salaries and other benefits

23.

2018

6,727

4,775

20,311

19,269

2,677

2,446

1,446

1,779

Operating Lease Commitment As at 31st December, 2019, the Company was committed to annual lease payments as follows: Within one year

24.

25.

Net profit for the year after taxation

9,837

9,621

Number of ordinary shares outstanding during the year

4,155

Basic earnings per share

$2.37

$2.32

Earnings Per Share

Risk Management Risk is inherent in the Companyâ&#x20AC;&#x2122;s activities but is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. The management of risk is important to the Companyâ&#x20AC;&#x2122;s continuing profitability and each person is accountable for the risk exposures relating to their functions and responsibilities. The Company is exposed to credit risk, liquidity risk and market risk. The Board of Directors is responsible for the overall risk management approach and for approving the risk strategies, principles, policies and procedures. Day to day adherence to risk principles is carried out by the executive management of the Company in compliance with the policies approved by the Board of Directors.

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

25.

Risk Management (continued) Credit Risk Management The Company has exposure to credit risk, which is the potential for loss due to debtors or counterparties failure to pay amounts when due. Credit risk is the most important risk for the Company’s business: therefore, management carefully manages its exposure to it. Credit risk exposures arise principally from the Company’s receivables and financial transactions. The Company extends credit to recognized, creditworthy third parties who are subject to a credit verification process. Significant changes in the economy, or in the state of a particular industry segment that represent a concentration of the Company’s customer base, could result in losses that are different from those provided at the date of the Statement of Financial Position. Cash and Short-term Deposits These funds are placed with highly rated banks and management therefore, considers the risk of default of these institutions to be very low. Trade Receivables The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Executive Committee has established a credit policy under which each customer is analyzed individually for creditworthiness prior to the Company offering them a credit facility. Credit limits are assigned to each customer, which represents the maximum credit allowable without approval from the Board of Directors. The Company has procedures in place to restrict customers’ orders if the order will exceed their credit limits. Customers that fail to meet the Company’s benchmark creditworthiness can only trade with the Company on a cash basis. Customer credit risk is monitored according to their credit characteristics such as whether it is an individual or company, types of industry, aging profile and previous financial difficulties. The Company’s credit period is thirty (30) days. Trade receivables over one hundred and eighty (180) days are fully provided for. The following table shows the maximum exposure to credit risk for the components of the Statement of Financial Position. Gross Maximum Exposure

Equity security Trade and other receivables Investment security Cash and cash equivalents

2019

2018

25 8,527 5,335 9,476

25 8,470 5,330 11,697

23,363

25,522

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Annual Report Financials 2019

Notes to the Financial Statements For the year ended 31st December, 2019 Expressed in thousands of Eastern Caribbean Dollars

25.

Risk Management (continued) Set out below is the information about the credit risk exposure on the Companyâ&#x20AC;&#x2122;s trade receivables. Current

31-90 days

90-180 days

Over 180 days

1.5%

100%

Total

December 31st, 2019 Expected credit loss rate

Gross carrying amount Expected credit loss booked

3,279 -

874 (1)

120 -

428 (195)

4,701 (196)

Net carrying amount

3,279

873

120

233

4,505

Expected credit loss rate

0.35%

2.0%

100%

Gross carrying amount Expected credit loss booked

3,137 (11)

1,370 (8)

108 (2)

263 (142)

4,878 (163)

Net carrying amount

3,126

1,362

106

121

4,715

December 31st, 2018

GRENADA BREWERIES LIMITED ANNUAL REPORT 2019

Form of Proxy The Company Secretary Grenada Breweries Limited P.O. Box, 202 Grand Anse, St. George’s Grenada Sixtieth Annual Meeting of Grenada Breweries Ltd. to be held on Friday 28th August, 2020 at 4.30pm at the Grenada Room, Radisson Grenada Beach Resort, Grand Anse, St. George’s, Grenada. I/We ___________________________________________________________________________________________________________ (Name of Shareholder/s) (Block Letters) of______________________________________________________________________________________________________________ (Address) (Block Letters) Shareholder (s) of the above Company, hereby appoint Mr. Anthony N. Sabga III Chairman or failing him, ___________________________________________________________________________________________________________________ (Name of Proxy) of______________________________________________________________________________________________________________ (Address of Proxy) as my/our proxy to vote for me/us on my/our behalf at the above meeting and any adjournment thereof as indicated below on the resolutions to be proposed in the same manner, to the same extent and with the same powers as if I/we were present at the said meeting or such adjournment or adjournments thereof. Please indicate with an “X” in the spaces below how you wish your Proxy to vote in the Resolutions referred to. If no such indication is given the proxy will exercise his discretion as to how he votes or whether he abstains from voting.

Special Business 1.

To amend the Company’s By-Law No. 1 by inserting paragraph 12.2 as follows: “A meeting of shareholders may be held by means of such telephone, video, electronic, virtual or other communication facilities as to permit persons participating in the meeting to hear each other and every reference in this By-Law to show of hands shall be construed in the case of such a meeting as requiring an oral or written indication by a shareholder of his vote.”

To amend the Company’s By-Law No. 1 by changing paragraph 18 Methods of giving notice to include by email as follows: “Any notice or other documents required by the Act, the Regulations, the Articles or the By-laws to be sent to any shareholder, debenture holder, director or auditor may be delivered personally or sent by pre-paid mail or cable or telex or facsimile transmission or email to any such person at his latest address, including his or her email address, as show in the records of the Company or its transfer agent, and to any such director at his latest address, including his or her email address as shown in the records of the Company, or in the latest notice filed under section 66 or 74 of the Act, and to the auditor at his business address, or the email address provided by the auditor.”

Shareholders Resolution to Effect Name Change WHEREAS: The board of directors of the Company indicated that it is in the best interest of the Company to change its name from GRENADA BREWERIES LIMITED to CARIB BREWERY (GRENADA) LIMITED and that the purpose of this Special Meeting is to obtain the approval of the shareholders to amend the Articles of Incorporation of the Company to effect the said change. IT WAS RESOLVED THAT: 1.

The Articles of Incorporation of the Company be amended to reflect the change of Company’s name from GRENADA BREWERIES LIMITED to CARIB BREWERY (GRENADA) LIMITED; and

The Company Secretary do file all appropriate documents at the Corporate Affairs and Intellectual Property Office to reflect the Company’s name change.

For

Against

Resolution No.

Ordinary Resolutions IT WAS RESOLVED THAT:

The Audited Financial Statements of the Company for the year ended December 31, 2019 and the Reports of the Directors and Auditors thereon be adopted.

i.) In accordance with By-Law No. 1 Section 4.5, each of the following persons who retire and being eligible be and each of them hereby is re-elected as a Director of the Company:

For

Against

Mr. Adrian Sabga Mrs. Aldyn Henry-Bishop 3.

PKF Accountants and Business Advisers be re-appointed Auditors of the Company and the Directors be authorised to fix their remuneration for the ensuing year.

Dated this_____________________________ day of

______________________________________ Signature of Shareholder

____________________________________________ 2020

________________________________________ Name in Block letters