Corporate Governance

African Distillers Limited follows the principles and general guidelines set out by the King Reports on Corporate Governance. The Company also complies with the Zimbabwe Stock Exchange requirements and other regulatory authorities.

Afdis Code

African Distillers Limited personnel are committed to a long-published code of ethics. This incorporates the Company’s operating, financial and behavioural policies in a set of integrated values, which include the ethical standards required of members of the Afdis family in their interface with one another and with all stakeholders. There are detailed policies and procedures in place covering the regulation and reporting of transactions in securities of the Company by directors and officers.

Directorate

The Board of Directors comprises seven non executive directors and four executive directors who meet at least quarterly. These directors are subject to retirement by rotation and re-election by Shareholders at least once every three years in accordance with the Company’s Articles of Association. Appointments of new directors, approved by the Board are subject to ratification by shareholders. The Board is chaired by a non executive director.

Directors’ Interests

As provided by the Companies Act (Chapter 24:03) and the Company’s Articles of Association, the Directors are bound to declare during the year, in writing, whether they have material interests in any contracts of significance with the Company which could give rise to conflict of interest. No such conflicts were reported this year.

Audit Committee

R. H. M. Maunsell – Chairman

The Audit Committee comprises four non executive directors and the Managing Director. A non executive director chairs the committee which meets twice a year. External auditors review accounting, auditing, financial reporting, internal control and risk management issues. The external auditors are appointed each year based on recommendations of the Audit Committee. An internal audit function is also in place.

Remuneration Committee

J. S. Mutizwa - Chairman

The Remuneration Committee is chaired by a non executive director. The Committee is responsible for reviewing the organisational structure in line with the strategy and make recommendations to the Board. It also recommends the remuneration of executive directors and senior executives.

Risk Management

The risk management process at African Distillers Limited involves the identification, assessment and prioritisation of risk that may impact the achievement of strategic business objectives. The environment in which the Company operates is subject to change and regular assessment of risk is necessary.

The Board, through the Audit Committee is ultimately responsible for maintaining risk management strategies for the Company and monitoring performance through regular assessment. The Board Audit Committee meets twice a year to consider issues relating to financial and accounting controls as well as risk management.

To the Members of African Distillers Limited:

The Directors of the Company are responsible for the preparation and integrity of the annual financial statements and the related financial information included in this report. The Company’s external auditors, Deloitte & Touche, have audited the financial statements and their report appears on page 17. The external auditors are responsible for independently auditing and reporting on these financial statements in conformity with international standards.

The Company’s Directors are required by the Zimbabwe Companies Act (Chapter 24:03) to maintain adequate accounting records and to prepare financial statements for each financial year which present a true and fair view of the state of affairs of the Company at the end of the financial period and of the profit and cash flows for the period. In preparing the accompanying financial statements, International Financial Reporting Standards (IFRS) have been followed, suitable accounting policies have been used, and applied consistently, and reasonable and prudent judgements and estimates have been made. The financial statements incorporate full and responsible disclosure in line with the Company accounting philosophy.

The Directors have reviewed the Company’s budget and cash flow forecast for the year to 30 June 2015. On the basis of this review and in the light of the current financial position and existing borrowing facilities, the Directors are satisfied that, notwithstanding the uncertainty resulting from recent economic policy decisions, African Distillers Limited is a going concern and have continued to adopt the going concern basis in preparing the financial statements.

The Company’s policy on business conduct, which covers ethical behaviour, compliance with legislation and sound accounting practice, underpins the Company’s internal financial control process.

The Board and management are responsible for the Company’s systems of internal control and, in order to comply with these responsibilities, management is required to maintain accurate accounting records and to ensure that adequate systems of internal control are in place. The control systems include accounting and control policies and procedures, defined lines of accountability and delegation of authority and comprehensive financial reporting and analysis. These systems are designed to provide reasonable but not absolute assurance, as to the integrity and reliability of the financial information and also to safeguard, verify and maintain accountability of its assets. They are also designed to minimise fraud and loss. The responsibility for operating the systems is delegated to the Executive Directors who confirm they have reviewed their effectiveness.

The Directors have satisfied themselves that these systems and procedures have been implemented, maintained and monitored by appropriately trained personnel with suitable segregation of authority, duties and reporting lines. The senior executives have signed a representation letter on this compliance. Nothing has come to the attention of the Directors to indicate that any material breakdown in the functioning of these internal controls, procedures and systems has occurred during the period under review.

The Company’s external auditors have reviewed and tested appropriate aspects of internal financial control systems during the course of their statutory examinations of the Company.

The Company’s Audit Committee has met the external auditors to discuss their reports on the results of their work, which include assessments of the relative strengths and weaknesses of key control areas and no breakdowns involving material loss have been reported to the Directors in respect of the year under review.

These annual financial statements for the year ended 30 June 2014 which appear on pages 18 to 42 have been approved by the Board of Directors on 21 August 2014 and signed on their behalf by:

J. S. Mutizwa
Chairman

C. Gombera
Managing Director

21 August 2014
Harare