contents dih annual report 2018.… · called to be perfect but rather to be consistent,” bears...

Cover Story 2-15Chairman’s Report 16-19Report of the Directors 20-23Programme for the 63rd Annual General Meeting 24Notice of the Meeting 25-26Report of the Independent Auditors 27-32Consolidated Statement of Financial Position 33Consolidated Statement of Income 34Consolidated Statement of Comprehensive Income 35Consolidated Statement of Changes in Equity 36-37

Consolidated Statement of Cash Flows 38-39Statement of Financial Position 40Statement of Income 41Statement of Comprehensive Income 42Statement of Changes in Equity 43-44Statement of Cash Flows 45Notes to the Financial Statements 46-105Five Year Statistical Summary 106Social Distribution for the Company 2018 107Procedure for Transfer of Shares 108Proxy Form 109Notes 110Shareholder’s Questionnaire 111Notes 112

contents

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2 T H E W I N N I N G T E A M | C E L E B R AT I N G P E O P L E , I N S P I R I N G G R E AT N E S S

Michael Jordan, former Professional Basketball player and who by acclamation is considered as the greatest Basketball Player of all time, once said:

“I’ve missed more than nine thousand (9,000) shots

in my career. I’ve lost almost three hundred (300)

games. Twenty-six (26) times I’ve been trusted to

take the game-winning shot and missed. I’ve failed

over and over and over again in my life. And that is

why I succeed.”

Wikipedia offers as a “definition” of the word “team”;

“A team is a group of individuals working together

to achieve a goal.”

Naresh Jain, Tech-startup Founder, further elaborated this understanding in 2009 in one of his several articles written on the subject:

“Team members need to learn how to help one

another, help other team members realise their true

potential, and create an environment that allows

everyone to go beyond his or her limitations.”

the tastefor excellence


It might be an easy assumption to arrive at if either the Michael Jordan quotation or the Naresh Jain conclusion is read in isolation, that all a team needs to have in order to be a winning team, are the disciplines of practice and skill. No. There are many more attributes and qualities which go into the building of a winning team, other than practice and skill. The first among equals of all the attributes required for the building of a winning team, is the understanding of reliability. The comment, “that we are not all called to be perfect but rather to be consistent,” bears repetition.

A reliable team member who gets the work done, who equally contributes in the sharing of the work load, who meets timelines, and follows through on assignments, is a valuable asset. He or she is a team member who can be relied on to deliver a consistent and outstanding result all of the time. The quality of reliability is founded on the bedrock of constructive communication. Winning teams, need members who have the ability and capacity to speak up and express their thoughts and ideas clearly, and effectively, directly and honestly with respect for their peers and for the work of the team. Such are the hallmarks of constructive communication. Winning team members, do not shy away from making a point, but rather make it in the most effective way possible with confidence and respect for the other team members. It follows that effective team players, have also cultivated the ability to listen actively. The adage that humans were created with one mouth and two ears bears some consideration.

the passionfor consistency


Good listeners are essential for teams to function effectively.A well-oiled and functioning team, needs members who can absorb, understand, and consider ideas and points of view from other people without endlessly debating and arguing every point. Such members can also receive criticism without reacting defensively. It was a wise tailor who once said to an apprentice, “Measure twice and cut once.” The same understanding is true for effective communication and problem resolution. Team members need to be disciplined enough to listen first and speak second to enable meaningful dialogue which produces results.

A worrying aspect of our evolution as humans is the 21st Century understanding of participation and involvement. Some persons understanding of membership is to occasionally turn up and little else. Good team players are active participants. They come prepared for team meetings and encounters and listen and participate in discussions. They are fully engaged in the work of the team and do not sit passively on the side lines. Team members who function as active participants take the initiative to help make things happen and volunteer for assignments and sharing of the work load.

the power of participation


Their whole approach is a “Can Do Approach”. They ask themselves the question, “What contribution can I make to help the team achieve success?” Good team players, share. They are willing to share information, knowledge and experience. They take the initiative to keep other members informed without being over bearing or pompous. The capacity and/or ability to do this comes from the learned ability of being able to work with others. To the good team player, it is almost second nature.

The Good Book reminds us that each day will bring its own challenges. A well-functioning team is one which exhibits the flexibility to deal with changing conditions, oftentimes creating the change itself. Good team members roll with the punches and can adapt to ever changing situations. They do not complain or become excessively agitated because a new approach or direction is suggested to be tried out.

the drive for collaboration


Commitment to the team and its goals, is yet another hallmark of the well-functioning team. Strong team players care deeply about their work, about the team and what the team is attempting to accomplish. They show up every day and visibly demonstrate this caring and commitment. They want to make a meaningful contribution, and want other team members to do the same.

One may be tempted to conclude that well-functioning teams and the members do not encounter speed bumps along the way. Teams will encounter and will have to deal with problems. It may even on occasion appear as if the sole reason for establishing teams or committees, is to address problems. Good team players are willing to deal with all kinds of problems in a solution-oriented manner. They are problem solvers. They do not dwell on problems for protracted periods, get involved in apportioning blame when problems arise or avoid dealing with issues. Team players get the problems out into the open for discussion and collaborate to find solutions.

the capacity for achievement


The Traffic Code reminds those who aspire to be holders of a Driver’s License of the three “C’s”. Players on winning teams have an awareness of and are able to demonstrate the importance of the three “C’s”, meaning “Care, Courtesy and Consideration”. The members treat fellow team members with care, courtesy and consideration, not some of the time, but consistently. They show understanding and the willingness to support other team members to get the job done.

They do not place conditionalities on their membership and involvement. Effective team players deal professionally with their fellow members and look beyond the parameters of their own contribution to the greater good which is the team’s success. Winning as a team is one of the great motivations of employee performance. Members of a winning team, have and demonstrate this motivation.

the process of partnership


The symbols “Banks Beer and GT Beer”, reflected on the cover of our 2018 Annual Report to the Shareholders are visual images of our understanding of a winning team and they depict our appreciation of the meaning of success which for us is a Journey and not a Destination.

We celebrate in them the people who continue to make it all possible meaning our Shareholders, our Employees, our Dealers, Customers and our Suppliers. They continue to be our motivation through which our 2018 Motto “A Winning Team; Celebrating People, Inspiring Greatness” becomes possible.

the ingredients for teamwork


My fellow shareholders, it is with pleasure that I present my report on the performance of the Banks DIH Ltd Group for the period ended 30 September 2018. The Group’s third party revenue was $30.923 billion when compared with $30.006 billion in 2017, representing an increase of $917.0 million or 3%. The Trading Profit from Operations for the Group was $6.837 billion when compared with $6.196 billion achieved in 2017, representing an increase of $641.0 million or 10%.

Profit after Tax attributable to the Shareholders of the parent was $4.286 billion compared to $3.888 billion in 2017, an increase of $398.0 million or 10%.

The Group’s Net Asset Value per share increased from $34.33 to $40.15 by 16.9%. The Board of Directors of the Company has recommended a dividend proposal of $1.10 per share unit, resulting in an overall cost of $934.8 million.

Revenue generated by the Company was $27.863 billion compared to $26.548 billion in 2017, an increase of $1.315 billion or 5%.

The Profit before Tax for the Company was $6.032 billion compared to $5.079 billion, an increase of $953.0 million or 18.8%, while Profit after Tax for the Company increased from $3.584 billion to $4.085 billion by $501.0 million or 14%.

My fellow shareholders, the improved results achieved were as a result of the increases in physical case sales of our Malt Products, XM Rums and Banko Wines; our Golden Harvest Bread and Baked goods and our Demico and Crème Select Ice-creams and Frostee products. Additionally, benefits were also accrued as a result of efficiencies achieved from raw material conversion and

chairman’s report

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improved production throughput arising from capital expenditure investment over recent years. The improved results were also as a result of lower prices negotiated for several raw and packaging materials as well as from the prudent management of our financial resources.

My fellow shareholders, the introduction of an Environmental Levy of $10.00 per unit for all PET and returnable glass containers was gazetted during the last financial year and affected the selling prices and therefore the affordability of our soft drinks and bottled water products.

Capital ExpenditureMy fellow shareholders, the recapitalisation of the Company’s Capital base was continued during the period under review. The inclusion of state-of-the-art technology through the medium of plant, machinery and equipment on all of the Production Plants and in all of the service departments, enabled improved manufacturing and operational efficiencies. The New Vehicle Workshop and Truck Parking Zone were commissioned along with the New Offices for the Workshop Administration, Environmental and Safety Departments and the Building and Property Departments. Also included in that development, was new PET and Plastics chipping equipment for our in-house generated plastics waste. Our solar energy expansion programme was continued with the installation of a PV/Solar System at our OMG and Main Street Qik Serv facilities. These departments are now partially powered by solar generated electrical power.

In addition, my fellow shareholders, a new packaging line was installed on the Trisco Cookie and Cracker Plant and new production equipment was also installed in the Dairy and Novelty Ice Plant. Our distribution fleet was further enhanced through the acquisition of new trucks and forklifts. In the new year, our Capital Expenditure thrust will be focused on increasing our potable water storage

capacity, the addition of increased fermentation and storage capacity for the Winery and the installation of a new CIP system for the Bottled Water Plant. The project to transition to Solar Power across the Company will be continued. Additionally, my fellow shareholders, we will commence the construction of a new multi-story Car Parking Facility which will include space for planned future development. This construction will be housed at the Demerara Park Area.

Citizens Bank Guyana IncThe Revenue of Citizens Bank Guyana Inc., a 51% owned subsidiary of the Company was $3.160 billion. The Profit before Tax was $1.009 billion and the Profit after Tax was $602.3 million. Net Interest Income was $2.24 billion. The Earnings per share was $10.12 while the total Assets base was $50.5 billion. Loan Assets decreased from $28.2 billion to $25.5 billion in 2018 and Customer Deposits were $40.9 billion compared to $40.6 billion in 2017.

DividendsThe Board of Directors declared a first interim dividend of $0.28 per share unit which was paid on 31 May 2018. A second interim dividend of $0.28 per share unit was also paid on 25 October 2018; and now the Board recommends a final dividend of $0.54 per share unit, with the overall dividend per share unit held of $1.10 or an overall cost of $934.8 million.

Growth in Shareholders’ ValueMy fellow shareholders, within the recently concluded financial year, we examined and evaluated new business models which are compatible with our existing business model to create wealth and value for our Shareholders.

These new business models will bring into our existing business portfolio, a new generation of products and services which will foster job creation and added value.


chairman’s report (cont’d)

We continue to evaluate

our traditional business

model to create wealth for

shareholders through the

creation of new synergies,

the implementation of finance

and marketing initiatives and,

continuing emphasis on cost

reduction strategies.

From the Net Profit of $4.286 billion attributable to Shareholders, a dividend payment of $892.4 million was made, leaving the sum of $3.394 billion which was transferred to Retained Earnings. The Shareholders’ Net Asset Value per share is now $40.15 per share when compared with the 2017 value of $34.33 per share.

Quality Management and Environmental ResponsibilityMy fellow shareholders, I can report with a deep sense of accomplishment that during the period under review, our Banks and GT Beers, our XM Rums, our Rain Forest Water products were awarded either Grand Gold and Gold Medals at the 2018 Monde Selection Quality Awards Competition. Our XM 12-Year-Old and 15-Year-Old Rums were awarded the Grand Gold Medal.

For the year 2018 ISO 9001-2008 Quality Management System was upgraded to ISO 9001-2015, and during the year, the following ISO Standards were recertified: -ISO 22000: 2005 – Food Safety Management SystemISO T/S 22002-4:2013- Prerequisite Programme on Packaging ManufacturingFSSC – 22000: 2014 – Food Safety System CertificationISO/TS 22002-1: 2009 – Prerequisite Programme on Food Safety

During the year the maintenance of ISO 14001:2015 and ISO 18001:2007 certification on environmental management systems and occupational health and safety standards in our manufacturing processes were completed.

The Company was successful at the Finance, Environmental and Safety Audits that were conducted by the Coca-Cola Auditors. Also, we continue to perform exceptionally well in the Guinness League of Excellence which resulted in the Company being ranked fourth place within the Americas for Quality and Packaging of Guinness Stout.

Banks DIH Ltd continues to be managed and guided by the principles of sustainability and accountability so as to ensure

that the best interests of our shareholders, our employees and our suppliers are maintained and to reduce or eliminate any impact which our operations may have on the environment and the communities within which we conduct our business activities.

Community Relations/PartnershipsOur Company’s Theme for Financial Year 2017-2018 was “Foundation for Growth”. To reinforce this understanding several relationship festivals were conducted across the three Counties of Guyana, where Shareholders, Suppliers, Customers and Key Public Officers came together to celebrate our diversity as a Nation. The programme of sponsoring Brand Ambassadors, Sports and Religious Events, Bursary Awards, Apprenticeships/Work Study and Academic Scholarships continued.

Future OutlookMy fellow shareholders, notwithstanding the commendable performance of the Group, we must be mindful of the innate challenges of operating and leading a Group such as ours which may affect our continued development.

Our commitment to innovative technology, leadership in the solar energy sector, the pursuit of market extensions internationally and impending diversification programmes will enable us to deliver better results.

AcknowledgementI will acknowledge the expertise and counsel that the Board of Directors contributed to the progress of the Group throughout the year as well as that of our leadership team and employees. Importantly, on behalf of the Board, I would like to express our gratitude to our valued Shareholders, Suppliers and Customers.

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Paul AndrewCarto,

Human Resources / Trisco Director

Terrence Bynoe,

Secretary / I.C.T.Executive

Leslie B. Doodnauth,

Worker ManagementParticipation Board

Director

Roy Errol Cheong, A.A., Vice Chairman

Ronald Graham Burch-Smith,

Director

Melissa JessicaDe Santos,

Director


board of directors report

Mohamed Shabir Hussein, A.A., Engineering Services

DirectorMichael Henry Pereira, Operations Director

Frances Sarah Parris, Director

George Gladstone

Mc Donald, A.A., Co-Managing

Director / Marketing Director

Dan Bryan Stoute, Director

Clifford Barrington Reis, C.C.H., Chairman / Managing Director

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T H E W I N N I N G T E A M | C E L E B R AT I N G P E O P L E , I N S P I R I N G G R E AT N E S S

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board of directors reportThe Directors have pleasure in presenting their 63rd Annual Report and the audited Financial Statements for the year ended 30 September 2018.

Principal ActivitiesThe Principal Activities of the Group are the brewing, blending, bottling and wholesale marketing of beers, wines, liquors, and assorted beverages, the processing of food items, the operation of restaurants, bars, laundry services, hotel and the operation of commercial banking.

Revenue & ResultsThe Group’s third party revenue was $30.923 billion compared to $30.006 billion achieved in 2017, an increase of $917.0 million, or 3%.

The Trading Profit from Operations of the Group was $6.837 billion when compared to $6.196 billion achieved in 2017, an increase of $641.0 million or 10%, while Profit after Tax attributable to Equity Holders of the Parent was $4.286 billion compared to $3.888 billion in 2017, an increase of $398.0 million or 10%.

Citizens Bank Guyana Inc., a 51% owned subsidiary of the Company, achieved a Profit before Tax of $1.009 million and a Profit after Tax of $602.3 million.

DividendsA first interim dividend of $0.28 per share unit was paid on May 2018, a second interim dividend of $0.28 per share unit was paid on 25 October 2018, and a final dividend of $0.54 per share unit is now recommended, aggregating to a total of $1.10 or an overall cost of $934.8 million.

Citizens Bank Guyana Inc paid an interim dividend of $0.70 per share unit and a final dividend of 1.80 per share unit is now being recommended, aggregating to a total of $2.50 per share unit or $148.7 million.

Capital ExpenditureIn 2018, the Company’s capital spending amounted to $3.327 billion which included a mechanical conversion on the Nos. 1 and 2 Soft Drink Plants that resulted in the reduced cost of packaging materials. In addition, a new Vehicle Workshop and Truck Parking Zone were commissioned along with our new offices for the Workshop Administration, Environmental and Safety and the Building and Property Departments. A new Plastic and PET Chipping Facility was constructed as well as the Solar Energy Progamme was continued at our OMG and Qik Serv Restaurants. The installation of New Biscuit and Ice-cream Packaging Lines, the drilling of a New Water Well, and additional storage and the purchase of Trucks and Forklifts were also undertaken in the period under review.

The Company’s capital spending authorised for 2019 is $3.498 billion of which $584.6 million is authorised and contracted for.

ReservesThe sum of $4.286 billion Profit attributable to Shareholders has been transferred to Retained Earnings. After the payment of dividends and revaluation of land and buildings, the Reserves at the 30 September 2018 is $32.114 billion.

DirectorsThe following Directors retire by rotation in accordance with Article 108 and being eligible offer themselves for election: Mr. Dan Bryan Stoute and Ms. Melissa Jessica De Santos.

AuditorsThe retiring Auditors, Messrs. Jack A. Alli, Sons & Co. have indicated their willingness to be appointed.

Directors’ InterestsThe interests of the Directors holding office at 30 September 2018 in the ordinary shares of the Company and its subsidiaries were as follows: -

Ordinary Shares of No Par ValueBanks DIH Ltd Associates’ Non Beneficial Beneficial Beneficial Interest

Clifford B. Reis 636,635 - 2,022,865R. Errol Cheong 562,500 - 293,985George G. Mc Donald 656,353 - -Michael H. Pereira 1,436,177 64,591 319,983Paul A. Carto 567,911 - 567,911Mohamed S. Hussein 610,180 - -Frances S. Parris 1,000 - -Ronald Graham Burch-Smith 44,327 - -Leslie Doodnauth 49,050 20,000 38,750

Ordinary Shares of No Par ValueCitizens Bank Guyana Inc. Associates’ Non Beneficial Beneficial Beneficial Interest

Clifford B. Reis - - 125,000R. Errol Cheong - - 31,250Frances S. Parris 6,250 - -

No other Director of Banks DIH Ltd or any of their associates has any beneficial interest in any shares issued by Citizens Bank Guyana Inc.

Caribanks Shipping Company LtdNo Director of Banks DIH Ltd has any beneficial interest in any shares issued by Caribanks Shipping Company Ltd.

Interest in ContractDuring the year, none of the Directors had a material interest in any contract of significance to the Company.

Directors’ Fees per Annum $

R. Errol Cheong 1,608,066 Dan B. Stoute 1,409,625 Frances S. Parris 1,409,625 Ronald G. Burch-Smith 1,409,625 Melissa J. De Santos 1,057,218

Directors’ Service ContractsOther than normal Service Contracts with Directors under the Companies Act 1991, there are no other Service Contracts with the Directors.

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Intra Group LoanBanks DIH Ltd as at 30 September 2018, had an outstanding loan of $290.4 million owing to its subsidiary, Citizens Bank Guyana Inc., which was executed on commercial terms.

Substantial ShareholdersThe following held substantial shareholdings in the Share Capital of the Company at 30 September 2018.

Demerara Mutual Life Assurance Society No. of Shares % Shareholding

2018 96,931,679 11.4 2017 96,931,679 11.4

Trust Company (Guyana) Limited No. of Shares % Shareholding

2018 76,787,681 9.0 2017 76,787,593 9.0

Banks Holdings Ltd No of Shares % Shareholding

2018 50,046,155 5.9 2017 50,046,155 5.9

Hand-in-Hand Group of Companies No of Shares % Shareholding 2018 45,768,132 5.4 2017 45,768,132 5.4

A substantial shareholder is defined as a person or entity entitled to exercise or control the exercise of five percent or more of the voting power at any general meeting of the Company.

Issued Share Capital of Subsidiaries at 30 September 2018 Ordinary Shares of No Par Value

Citizens Bank Guyana Inc. 59,491,300 Caribanks Shipping Co. Ltd 250

Current Litigation MattersOn 1st April 2016, Guyana Revenue Authority consented to a substantial tax write off for a local manufacturing Company. Acting on legal advice, Banks DIH Ltd wrote to Guyana Revenue Authority claiming that it was entitled under Article 149D of the Constitution to be treated equally by the State as it treated the local manufacturing Company’s liability. Guyana Revenue Authority did not respond favourably. As a result, Banks DIH Ltd, acting on legal advice caused to be filed in the High Court of Guyana, legal proceedings against Guyana Revenue Authority and the Attorney General of Guyana, claiming Inter alia:

“… a declaration that Banks DIH Limited is entitled under Article 149D of the Constitution to have the Guyana Revenue Authority treat its liability

for Consumption Tax for the years 2001 – 2006 and its liability to Excise Tax for the years 2007 – 2016 equally or materially in similar manner as the Guyana Revenue Authority treated a local manufacturing company’s liability for the same taxes during the same periods as embodied in the Consent Order dated 1st April, 2016.”

The proceedings by Banks DIH Ltd are pending in the High Court of the Supreme Court of Judicature.

Corporate GovernanceWe remain dedicated to the Principles of Good Corporate Governance and to ensure that the integrity of the Group remains untarnished. The Board recognises the equitable rights of shareholders, ensures the timely and accurate disclosure of all material matters, including its financial situation, performance and ownership, and the strategic guidance of the business.

The standing Committees of the Board during the year were as follows:

The Audit & Finance Committee comprising Mr. R.E. Cheong (Chairman), Messrs. D. Stoute, R.G. Burch-Smith and Ms. M. De Santos.

The Corporate Governance & Human Resources Committee comprising Mr. D. Stoute (Chairman), Mr. R.E. Cheong, and Ms. Frances S. Parris.

The election of Non-executive Directors takes place at the Annual General Meeting of the Company. Non-executive Directors are elected to hold office for a period of two years and can offer themselves for election. Executive Directors are nominated to hold office for a period of two years. Their continuation as Executive Directors for any subsequent period following their nomination to the Board requires the Board’s ratification.

The positions of Chairman of the Board and Chief Executive Officer or Managing Director are combined positions and held by Executive Director, Mr. Clifford B. Reis. The position of Vice-Chairman is held by a Non-executive Director, Mr. R. Errol Cheong. The position of Co-Managing Director/Marketing Director is held by Mr. George G. Mc Donald. A minimum of twelve Board meetings are held each year at the Company’s Corporate Headquarters, Thirst Park, Ruimveldt, Georgetown.


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Thirst Park, Georgetown, Saturday 26 January 20191. Presentation of Long Service Awards.2. The Meeting called to order at 5.00 p.m.3. Presentation of the Financial Statements for the year ended 30 September 2018 and the Reports of the Directors and Auditors thereon.4. Chairman’s Report and Question Period.5. Declaration of Dividend.6. Directors’ Service Agreements providing for their remuneration and other items as listed under the Notice of Meeting.7. After the Meeting is declared closed, bars will be opened until 8.30 p.m.

NOTE: One gift voucher will be presented to each shareholder/shareholding on arrival at the entrance to the meeting. This voucher will be exchanged for a gift either on arrival or after the meeting, and not at anytime thereafter.Children, family or friends of shareholders are not entitled to attend the meeting.

BOARD OF DIRECTORSEXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS

Clifford Barrington Reis, C.C.H. Chairman/Managing Director Roy Errol Cheong, A.A. Vice Chairman, Banks DIH Limited

George Gladstone Mc Donald, A.A. Co-Managing Director/Marketing Director Dan Bryan Stoute Consultant

Michael Henry Pereira Operations Director Frances Sarah Parris General Manager/Corporate Secretary Citizens Bank Guyana Inc.

Paul Andrew Carto Human Resources/Trisco Director Ronald Graham Burch-Smith Attorney-at-Law Mohamed Shabir Hussein, A.A. Engineering Services Director Melissa Jessica De Santos ChiefExecutiveOfficer(ag.,) Demerara Mutual Life Assurance Society Ltd. Leslie Doodnauth Worker Management Participation Board Director Terrence I. Bynoe Secretary/I.C.T. Executive

BANKERS

Citizens Bank Guyana Inc., 231-233 Camp Street & South Road, GeorgetownRepublic Bank (Guyana) Limited, 38/40 Water Street, GeorgetownGuyana Bank for Trade & Industry Limited, 47 Water Street, GeorgetownBank of Baroda, 10 Regent Street & Avenue of the Republic, GeorgetownBank of Nova Scotia, 104 Carmichael Street, GeorgetownDemerara Bank Limited, 230 Camp & South Streets, Georgetown

AUDITOR ATTORNEYS-AT-LAW

Messrs. Jack A. Alli, Sons & Co. Messrs. Cameron & Shepherd Messrs. Boston & Boston 145 Crown Street, Queenstown 2 Avenue of the Republic 2 Croal Street, Stabroek Georgetown, Guyana Georgetown, Guyana Georgetown, Guyana

programme for the 63rd Annual General Meeting

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Notice is hereby given that the 63rd Annual General Meeting of Banks DIH Limited will be held at Thirst Park, Georgetown on Saturday, 26 January 2019 at 5.00 p.m. for the following purposes: -

A. To receive the Financial Statements for the year ended 30 September 2018 and the Reports of the Directors and Auditors thereon.

B. To consider and (if thought fit) pass the following Resolution: 1. “That the Financial Statements for the year ended 30 September 2018 and the Reports of the Directors and Auditors thereon be and are hereby adopted.”

C. To consider the declaration of a Final Dividend of $0.54 per share as recommended by the Directors in addition to an Interim Dividend of $0.28 per share and a second Interim Dividend of $0.28 per share previously declared by them and (if thought fit) pass the following Resolution:

2. “That the Interim Dividend of $0.28 per share and a second Interim Dividend of $0.28 per share already paid be confirmed and that a Final Dividend of $0.54 per share as recommended by the Directors in respect of the year ended 30 September 2018 be approved and paid to shareholders on the Company’s Register at the close of the business on 26 January 2019.”

D. To elect Directors in accordance with Article 109 of the Company’s by-laws. The Directors retiring by rotation are Mr. Dan Bryan Stoute and Ms. Melissa Jessica De Santos, who being eligible, offer

themselves for election. To consider and (if thought fit) pass the following Resolutions: 3. (a) “That the Directors be elected en bloc.” (b) “That the retiring Directors Mr. Dan Bryan Stoute and Ms. Melissa Jessica De Santos, be and are hereby elected

Directors of the Company.”

E. To fix the remuneration of the Directors in accordance with Article 86 of the Company’s by-laws and Section 104 of the Companies’ Act 1991.

To consider and (if thought fit) pass the following Resolution: 4. “That the remuneration of $1,238,260 per annum be paid to the Non-executive Vice Chairman; the remuneration of

$1,031,880 per annum be paid to each Non-executive Director in accordance with Article 86 of the Company’s by-laws and Section 104 of the Companies’ Act 1991 and that a Travelling Allowance for each Non-executive Director be fixed at $378,385 per annum; and that the additional sum of $76,382 per annum be provided for additional remuneration for each Director serving on Technical Committees.”

F. To appoint Auditors in accordance with Article 143 of the Company’s by-laws. To consider and (if thought fit) pass the following resolution: 5. “That Messrs. Jack A. Alli, Sons & Co., be and are hereby appointed Auditors for the period ending with the conclusion

of the next Annual General Meeting.”

G. To fix the remuneration of the Auditors in accordance with Article 146 of the Company’s by-laws. To consider and (if thought fit) pass the following Resolution: 6. “That the remuneration of the Auditors be fixed at $19,000,000 for the current financial year.”

H. To fix charitable donations in accordance with Article 62 of the Company’s by-laws. To consider and (if thought fit) pass the following Resolution: 7. “That the amount appropriated for charitable donations be fixed at $4,560,000 for the current financial year.”

I. To transact any other business of an Ordinary Meeting.

notice of the Meeting


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notice of the Meeting (cont’d)

Any member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company. The instrument appointing a proxy must be stamped and deposited at the Registered Office of the Company not less than forty-eight (48) hours before the time for holding the Meeting. (Note: Saturdays and Holidays are to be excluded when determining the forty-eight hour period.)

BY ORDER OF THE BOARD REGISTERED OFFICE

Terrence I. Bynoe Thirst ParkSecretary / I.C.T. Executive Georgetown Guyana

21 December 2018

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Opinion

We have audited the financial statements of Banks DIH Limited (the ‘Company’) and its Subsidiaries (together the ‘Group’) which comprise the statements of financial position of the Group and the Company as at 30 September 2018, and the statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended for the Group and the Company, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 46 to 105.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and the Company as at 30 September 2018 and of their financial performances and their cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and the requirements of the Guyana Companies Act.

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 Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and Company of the current period. These matters were addressed in the context of our audit of the financial statements of the Group and Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter

Valuation of property, plant and equipment

See notes 2(d) to 2(g), 3(d), 4 and 31 to the financial statements for disclosures of related accounting policies,

judgements, estimates and balances. (Group and Company)

The carrying values of property, plant and equipment for the Group and the Company are $25.6 billion and $22.3 billion, respectively. Property, plant and equipment represent 32 percent and 59 percent of total assets of Group and Company, respectively, and as such, the category is significant to the financial statements.

Material misstatements relating to the carrying values of property, plant and equipment could arise on (a) the composition of costs capitalised; (b) the choice of depreciation rates; and (c) the identification and estimation of impairment, or reversal of impairment.

Our procedures in relation to this key audit matter included, but were not limited to, the following.

§ We tested internal controls relevant to the authorisation, procurement and monitoring of property, plant and equipment.

§ We verified, on a sample basis, costs capitalised in the year to supporting documentation.

§ We reviewed relevant cost categories expensed in the year to identify other potential capital items.

report of the Independent Auditors to the Members of Banks DIH Limited


28



Additionally, in the current year there was a revaluation of the Company’s properties carried out by an external professional.

Given the significance of property, plant and equipment to the financial statements and possibilities for misstatement, the valuation of this category was considered a key audit matter.

§ We assessed the appropriateness of depreciation rates applied to capital items, on a sample basis.

§ We physically inspected capital items, on a sample basis, to determine the working condition.

§ We carried out procedures to identify signs of potential impairment of capital items.

§ For impaired items or categories of items, we evaluated the key assumptions, methodologies, cash generating unit determination and other key inputs used by management in calculating impairment.

§ We engaged a valuation expert to assist with the evaluation of the methodology and underlying assumptions used by management’s expert in the revaluation of properties.

§ We evaluated the valuation approach used by management’s expert against the requirements of IFRS 13, Fair Value Measurement.

§ We tested the completeness and measurement of properties included in the valuation.

§ We assessed the competence and objectivity of management’s expert.

29



Impairment of loans and advances

See notes 2(i), 2(j), 3(a), 8 and 29 to the financial

statements for disclosures of related accounting policies,

judgements, estimates and balances (Group).

The Group, through the banking subsidiary, has gross loans and advances outstanding of $26.8 billion, or 33 percent of total assets. Against this gross amount, there is a provision for impairment of $1.5 billion at the year end.

The methodologies required by IFRSs and Bank of Guyana in respect of impairment provisions are complex and involve significant judgement by management on matters such as:

§ classification of facilities as impaired; § valuation of assets pledged as collateral and

probability of realisation; § time and costs to liquidate pledged collateral;§ amount and timing of other cash flows.

Given the complexity of impairment methodologies and significant reliance on management’s judgement, the impairment of loans and advances was considered a key audit matter.


§ We assessed and tested the controls relied on by management to identify impaired loans and advances.

§ We tested the completeness of the impaired loans and advances identified by management by examining sources of objective evidence of impairment, including but not limited to, the past due and non-performing portfolios.

§ For a sample of unimpaired loans and advances, we validated the classification applied by the Company’s credit monitoring system by examining actual performance during the year and current borrower circumstances.

§ For a sample of impaired loans and advances, we re-performed management’s impairment calculations, both under IFRS provisions and the requirements of the Bank of Guyana. The timing and amount of future cash flows were challenged based on prevailing economic, sector and individual circumstances. Collateral values were assessed against the reports of valuation experts and current market conditions.


30



Valuation of employee benefits

See notes 2(r), 3(b) and 9 to the financial statements for

disclosures of related accounting policies, judgements,

estimates and balances. (Group and Company)

The Company has future defined benefit commitments to employees on retirement. The financial obligations of these commitments are based on years of service and salary levels at retirement. At the year end, the present value of the defined benefit obligations amounted to $2.2 billion. There were assets amounting to $1.8 billion to meet the defined benefit obligations.

The determination of the present value of the defined benefit obligations involves the use of a projection model and the application of a number of assumptions. Due to the complexity of the projection model required, the Company engaged an external actuary to perform the valuations. The assumptions relevant to the determination of the costs in the year and year end valuation include the inflation rate, the discount rate, future salary increases and mortality rates. Variation in assumptions can have a material impact on the calculation of the liabilities.

Given the complexity of the process to value the defined benefit obligations, their valuation was considered a key audit matter.


§ We engaged an actuarial specialist to assist with the evaluation of the methodology and underlying assumptions used by management’s actuary.

§ We evaluated the valuation model used by management’s actuary against the requirements of IAS 19, Employee Benefits.

§ We assessed the reasonableness of assumptions used by management to determine the valuation of defined benefit obligations. This included comparing assumptions to external data (e.g. national averages) or internal data (e.g. salary experience and commitments).

§ We tested the completeness and accuracy of data extracted and supplied to management’s actuary, which was used to value the obligations.

§ We assessed the competence and objectivity of management’s actuary.

§ We confirmed the valuation of assets held to meet the defined benefit obligations.

31

Other Information

Management is responsible for the other information. The other information comprises the information included in the Annual Report but does not include the financial statements of the Group and Company and our auditors’ report thereon. The Annual Report is expected to be made available to us after the date of this auditors’ report.

Our opinion on the financial statements of the Group and Company 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 of the Group and Company, 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 of the Group and Company, or our knowledge obtained during the audit, or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements of the Group and Company in accordance with IFRSs and the requirements of the Guyana Companies Act, 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 these financial statements, management is responsible for assessing the Group and 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 Group or the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group and Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and Company 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 judgement and maintain professional skepticism throughout the audit. We also:

§ Identify and assess the risks of material misstatement of the financial statements of the Group and Company, 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.



32


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

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

§ 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 Group and Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and Company 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 auditors’ report. However, future events or conditions may cause the Group and Company to cease to continue as a going concern.

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

§ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

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

We also provide to those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the Group and Company of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefit of such communication.

The engagement partner in charge of the audit resulting in this independent auditors’ report is Khalil Alli.

___________________________JACK A. ALLI, SONS & CO.145 Crown Street Georgetown, Guyana 13 December 2018

33

Consolidated Statement of Financial Position30 SePtember 2018


34

Consolidated Statement of IncomeFOr tHe YeAr eNDeD 30 SePtember 2018

The notes on pages 46 to 105 form an integral part of these financial statements.

35

Consolidated Statement of Comprehensive Income FOr tHe YeAr eNDeD 30 SePtember 2018



36

Consolidated Statement of Changes in equity FOr tHe YeAr eNDeD 30 SePtember 2018


37

Consolidated Statement of Changes in equity FOr tHe YeAr eNDeD 30 SePtember 2018



38

Consolidated Statement of Cash FlowsFOr tHe YeAr eNDeD 30 SePtember 2018


39

Consolidated Statement of Cash FlowsFOr tHe YeAr eNDeD 30 SePtember 2018



40

Statement of Financial Position30 SePtember 2018

41

Statement of IncomeFOr tHe YeAr eNDeD 30 SePtember 2018



42

Statement of Comprehensive IncomeFOr tHe YeAr eNDeD 30 SePtember 2018

Thousands of Guyana Dollars 2018 2017

PROFIT FOR THE YEAR 4,085,166 3,584,269

OTHER COMPREHENSIVE INCOME:

Items that will not be reclassified

to profit or loss:

Revaluation of property 1,393,655 0

Deferred tax charge arising on revalution of property (247,664) 0

Remeasurement of employee benefits (69,076) (168,129)

Deferred tax credit arising on remeasurement

of employee benefits 18,996 46,235

1,095,911 (121,894)

Items that may be subsequently reclassified

to profit or loss:

Fair value gains on available-for-sale assets 441,400 17,993

OTHER COMPREHENSIVE INCOME 1,537,311 (103,901)

TOTAL COMPREHENSIVE INCOME 5,622,477 3,480,368


BANKS DIH LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 SEPTEMBER 2018

18


43

Statement of Changes in equity FOr tHe YeAr eNDeD 30 SePtember 2018



44


Statement of Changes in equity FOr tHe YeAr eNDeD 30 SePtember 2018

Statement of Cash Flows FOr YeAr eNDeD 30 SePtember 2018

45The notes on pages 46 to 105 form an integral part of these financial statements.


46

Notes to the Financial Statements30 SePtember 2018

47



48


49



50


51



52


53


2. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

(j) Impairment of Financial Assets (Cont'd)

Supervision Guideline 5

The following information should be considered in the review:

a) original terms and purpose of facility against current balance and status;

b) financial information on the borrower;

c) evaluation of the project being financed;

d) status of collateral including recent valuation, legal assignments and insurance;

e) past record of the borrower; and

f) performance of other members of the group (if applicable).

The provision levels stipulated in SG 5 are as follows.

Classification Provision

Pass 0%

Special Mention 0%

Substandard-

0%

- others 20%

Doubtful 50%

Loss 100%

Write-offs and Recoveries

Each of the five categories has specific classification criteria based on facility performance, collateral status and financialcondition of borrower. Additionally, a general provision equivalent to 1 percent of the portfolio not reviewed is required.

When an asset is uncollectible, it is written off against the related provision for impairment. Recoveries in part or in full ofamounts previously written-off are credited to the statement of income.

31

portion secured by cash, cash substitutes,government securities or governmentguarantees

BANKS DIH LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

30 SEPTEMBER 2018

The banking subsidiary is required to conduct a loan review of at least 70 percent of its portfolio including large accounts andoff-balance sheet commitments, and all past-due and non-performing accounts.

Following the review of the portfolio, accounts are classified into one of five categories being Pass, Special Mention,Substandard, Doubtful or Loss.


54


55



56


(u) Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. As lessee, payments made under an operating lease are charged to the statement of income on a straight-line basis over the period of the lease. As lessor, payments received under an operating lease are credited to the statement of income on a straight-line basis over the period of the lease. (v) Segmental Reporting

The Group's business activities have been classified into three categories for segmental reporting in a manner consistent with the internal reporting provided to the chief operating decision-maker and based largely on the nature of the products and services. The chief operating decision-maker has been identified as the Board of Directors of the parent company. The categories are Beverages, Commercial Banking and All Other Segments. The 'All Other Segments' category includes the Food and Restaurants, Hotel and Laundry Services segments as these do not meet the quantitative thresholds specified in IFRS 8. The types of products and services in each reportable segment are identified in note 1 to these financial statements.

The Group's operations are located in Guyana.

(w) Financial Instruments

Financial instruments carried on the statement of financial position include investment securities, loans and advances, receivables, customers' deposits, payables, accruals, borrowings and cash resources. The recognition methods adopted for each significant instrument is disclosed in the individual policy statements.

57


liability


58


Thousands of Guyana Dollars

4. PROPERTY, PLANT AND EQUIPMENT Furniture,

Group Fittings

Freehold Leasehold Plant and and Motor Construction

Properties Properties Machinery Equipment Vehicles Containers in Progress Total

Cost / Valuation

As at 01 October 2017 10,594,388 95 14,711,636 4,627,177 2,529,846 3,773,638 879,087 37,115,867

Additions 72,669 1,443 70,047 448,565 248,543 1,127,390 1,503,548 3,472,205

Transfers 295,985 0 271,058 48,939 0 0 (615,982) 0

Disposals (13,770) 0 (120,377) (75,677) (103,068) (182,128) (3,565) (498,585)

Revaluation 928,305 0 0 0 0 0 0 928,305

As at 30 September 2018 11,877,577 1,538 14,932,364 5,049,004 2,675,321 4,718,900 1,763,088 41,017,792

Depreciation and Impairment

As at 01 October 2017 (457,068) (41) (6,276,152) (2,701,388) (2,095,519) (1,984,668) 0 (13,514,836)

Depreciation charge (162,058) (378) (982,866) (524,675) (208,929) (956,820) 0 (2,835,726)

Reclassification 0 0 18,578 0 0 (18,578) 0 0

Written back on disposals 0 0 110,937 69,283 103,068 180,785 0 464,073

Written back on revaluation 493,056 0 0 0 0 0 0 493,056

As at 30 September 2018 (126,070) (419) (7,129,503) (3,156,780) (2,201,380) (2,779,281) 0 (15,393,433)

Net Carrying Amount

As at 30 September 2018 11,751,507 1,119 7,802,861 1,892,224 473,941 1,939,619 1,763,088 25,624,359



30 SEPTEMBER 2018

Cost / Valuation

As at 01 October 2016 8,219,033 74,579 13,959,633 3,804,232 2,390,411 4,967,075 3,159,921 36,574,884

Additions 125,6512,259,873

0 364,670 311,866 99,722 716,446 1,344,116 2,962,471

Transfers 0 397,531 807,729 79,044 7,539 (3,551,716) 0

Disposals 0 (74,484) (10,198) (296,650) (39,331) (1,917,422) (73,234) (2,411,319)

Other (10,169) 0 0 0 0 0 0 (10,169)

As at 30 September 2017 10,594,388 95 14,711,636 4,627,177 2,529,846 3,773,638 879,087 37,115,867

Depreciation and Impairment

As at 01 October 2016 (323,453) (74,508) (5,307,756) (2,491,019) (1,903,183) (3,099,085) 0 (13,199,004)

Depreciation charge (143,784) (17) (976,210) (493,806) (231,667) (802,841) 0 (2,648,325)

Written back on disposals 0 74,484 7,814 283,437 39,331 1,917,258 0 2,322,324

Other 10,169 0 0 0 0 0 0 10,169

As at 30 September 2017 (457,068) (41) (6,276,152) (2,701,388) (2,095,519) (1,984,668) 0 (13,514,836)

Net Carrying Amount

As at 30 September 2017 10,137,320 54 8,435,484 1,925,789 434,327 1,788,970 879,087 23,601,031

59

Limited. A fair value gain of $27,707 (2017 - nil) is recognised in the statement of income.

Included in the Company's freehold property are properties leased to the banking subsidiary with a carrying value of $644,900 (2017-$617,193). These properties are

considered to be investment properties in the Company's financial statements and are carried at fair values determined at the year end by Rodrigues Architects



60


61



62


63



64


65



66


placed

Deferred taxes are calculated in full on temporary differences under the liability method using the applicable tax rates.There is no enforceable right to set off tax assets against liabilities within the Group and the following amounts are shown in the statement of financial position.

67


Deferred taxes are calculated in full on temporary differences under the liability method using the applicable tax rates.There is no enforceable right to set off tax assets against liabilities within the Group and the following amounts are shown in the statement of financial position.


68


69



70


71



72


73

(20,885)47,680



74


75



76


77



78


79



80


29. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (CONT'D)

The main financial risks affecting the Group are discussed in the following parts to this note.

63

The table excludes financial assets which are not deemed to give rise to credit risks, which are primarily available-for-saleequity securities held by the Group.

Credit Risk

Financial risks are inherent to the operations of the Group and management of these risks is central to the Group's continuingprofitability. The Group is exposed to credit risk, liquidity risk, interest rate risk and foreign exchange risk. The objective ofthe Group's risk management policies and efforts is to minimise the effects of the risks inherent to its operations. Riskmanagement is an ongoing process which involves the identification, assessment and monitoring of risks through theapplication of various approaches which are guided by the Group's policies. These risks are continuously monitored at boththe executive and directorate levels. Management engages in the daily monitoring of risks and provides the Board ofDirectors with monthly reports which analyse exposures to the various elements of risk.



30 SEPTEMBER 2018

Risks arising from Financial Instruments

The Group takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full whendue, through its holding of investment securities, loans and advances, receivables and cash resources. It can also arise fromguarantees and letters of credit provided or credit commitments given by the banking subsidiary.

The following table presents the maximum exposure to credit risk arising on financial instruments, before taking account ofany collateral held or other credit enhancements and after allowance for impairment, where appropriate.

For financial assets recognised on the statement of financial position, the exposure to credit risk equals to their carryingamounts. For guarantees and letters of credit, the maximum exposure to credit risk is the amount that the banking subsidiarywould have to pay if the guarantees and letters of credit were to be called upon. For credit commitments of the bankingsubsidiary that are irrevocable over the life of the respective facilities, the maximum exposure to credit risk is the full amountof the committed facilities.


81



GROUP COMPANY2018 2017 2018 2017

On statement of financial position:

Investment securities 4,122,796 3,979,807 0 0

Loans and advances 25,236,703 27,227,044 0 0

Receivables 1,017,585 963,890 937,612 904,764

Cash resources 17,074,772 13,986,583 6,707,780 6,089,693

47,451,856 46,157,324 7,645,392 6,994,457

Off statement of financial position:

Guarantees 844,268 705,875 0 0Credit commitments 909,209 796,450 0 0

1,753,477 1,502,325 0 0

Maximum exposure to credit risk 49,205,333 47,659,649 7,645,392 6,994,457

Management of investment securities and cash resources

Company



30 SEPTEMBER 2018

Credit Risk (Cont'd)

Collateral is not usually collected on cash resources with banks given the sound nature of such institutions.

64

The risk management policies and processes have been described separately for the Company and its banking subsidiary,where applicable.

Credit risk is managed to achieve a sustainable and superior risk-reward performance while maintaining exposures withinacceptable risk parameters. The Group's policies and processes for managing credit risk are described below for each of itsmajor financial assets.

In relation to its cash resources, the Board of Directors is required to approve the use of new financial institutions for theplacement of cash resources. Thereafter the use of banking facilities is at the discretion of management.

The Company's investment securities comprise equity holdings which are not considered to give rise to credit risk.



82


83



84


85



86


87



88


89



90


91



92


93



94


95




Foreign Exchange Risk

Net Impact on Impact on

Assets Liabilities Position % change income OCI

GROUP increase / increase /

As at 30 September 2018 (decrease) (decrease)

United States Dollar 5,929,628 2,790,665 3,138,963 1.0% 31,390 0

Trinidad & Tobago Dollar 416,413 0 416,413 1.0% 2,283 1,881

Other 323,947 3,745 320,202 1.0% 3,199 3

As at 30 September 2017

United States Dollar 2,800,297 2,071,762 728,535 1.0% 7,285 0

Trinidad & Tobago Dollar 458,073 0 458,073 1.0% 207 4,373

Eastern Caribbean Dollar 102,112 0 102,112 1.0% 1,021 0

Other 147,552 5,794 141,758 1.0% 1,414 3

COMPANY


United States Dollar 1,364,941 1,306,940 58,001 1.0% 580 0


Other 343 0 343 1.0% 0 3


United States Dollar 1,054,329 891,528 162,801 1.0% 1,628 0


Other 341 0 341 1.0% 0 3

The aggregate amounts of assets and liabilities denominated in foreign currencies are shown in the tables below, along with the impactbefore tax of a reasonably possible change in the exchange rate (all changes in exchange rates reflect a strengthening against theGuyana Dollar).

Foreign currency exposure arises from the Group's holding of foreign denominated assets and liabilities. Management of the Groupreviews and manages the risk of unfavourable exchange rate movements by constant monitoring of market trends. To further mitigateagainst foreign exchange risk, the Group maintains a large percentage of its foreign - denominated assets and liabilities in stablecurrencies.

81



30 SEPTEMBER 2018


96


97



98



Interest Rate Risk (Cont'd)

Concentration of risk (Cont'd)

Over 1 year

but not over Over Non-interest

As at 30 September 2018 Up to 1 year 5 years 5 years bearing Total

Assets

Cash resources 6,272,466 0 0 435,314 6,707,780

Other assets 0 0 0 31,272,572 31,272,572

6,272,466 0 0 31,707,886 37,980,352

Liabilities

Borrowings 0 0 290,421 0 290,421

Other liabilities 0 0 0 7,264,120

7,264,120

7,264,120

0 0 290,421

Interest sensitivity gap 6,272,466 0 (290,421)


Assets

Cash resources 5,921,340 0 0 168,353 6,089,693

Other assets 0 0 0 27,060,835 27,060,835

5,921,340 0 0 27,229,188 33,150,528

Liabilities

Borrowings 0 0 1,042,788 0 1,042,788

Other liabilities 0 0 0 6,412,052 6,412,052

0 0 1,042,788 6,412,052 7,454,840

Interest sensitivity gap 5,921,340 0 (1,042,788)



30 SEPTEMBER 2018

84

COMPANY

7,554,541


99




Interest Rate Risk (Cont'd) GROUP

2018 2017

The effective interest rates on significant financial assets and liabilities are: % %

Investment securities 1.8 1.7

Loans and advances 10.5 10.3

Customers' deposits 1.2 1.7

Price Risk

Capital Management

Company

COMPANY

20172018

Total debt 290,421 1,042,788

Total equity 30,425,811 25,695,688

Gearing ratio 0.01 : 1 0.04 : 1

85



30 SEPTEMBER 2018

The Group is exposed to price risk on equity securities risk in relation to investment securities classified as available-for-sale.The majority of the available-for-sale investment securities is traded on one or more of the regional stock exchanges. Shouldthe market prices on available-for-sale investment securities change by 5 percent with all other variables held constant, theimpact on equity would be $68,462 (2017 - $47,238).

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order toprovide returns to the shareholders and benefits to other stakeholders, to maintain an optimal capital structure to reduce thecost of capital and to maintain a prudent relationship between the capital base and the underlying risks of the business.

In pursuing the capital management objectives, the Company monitors capital on the basis of the gearing ratio. This ratio iscalculated as total debt divided by total capital. The gearing ratio at the reporting date was as follows:


100


101



102


30. SEGMENTAL INFORMATION (CONT'D)

Other Segmental Information

2018 2017

(a) Source of Revenue

Sales of beverages 25,405,719 24,236,968

Commercial banking income 3,112,539 3,541,941

Sales of food items 2,395,683 2,255,974

Hotel and laundry services income 61,519 55,491

30,975,460 30,090,374

Net of consolidation eliminations (52,190) (84,267)

Total revenue 30,923,270 30,006,107

(b) Geographical Information

(c) Major Customers

89

The analysis of the Group's revenue between earnings in Guyana and earnings out of Guyana is shown in note 20 tothese financial statements.

There are no non-current assets, other than financial instruments, located out of Guyana. The geographic analysis of theGroup's financial instruments held at the year end is shown in note 29 to these financial statements.

There was no revenue deriving from transactions with a single customer that amounted to 10 percent or more of theGroup's revenue.



30 SEPTEMBER 2018

GROUP


103



104


105


Five Year Statistical Summary

Company

Group


106

Five Year Statistical Summary:Company

YEARS TO SEPTEMBER 30 2018 2017 2016 2015 2014Thousands of Guyana DollarsOPERATING DATA Sales - Net of Excise Taxes 24,323,941 23,156,314 22,328,366 21,225,900 20,544,246

1,946,763 1,494,507 1,550,154 1,337,124 1,207,907 Net Profit after Tax for Shareholders 4,085,166 3,584,269 4,356,976 2,568,506 2,264,644 Cash Cost Of Dividends Paid 892,354 802,410 1,370,000 640,000 640,000 Net Dividend Cover 4.58 4.47 3.18 4.01 3.54

STATEMENT OF FINANCIAL POSITION DATA

Number of issued & fully paid Capital 849,862 849,862 1,000,000 1,000,000 1,000,000 Working Capital 9,387,976 7,820,867 10,509,514 6,053,769 5,324,411 Net Property, Plant and Equipment 22,262,266 20,125,967 20,246,462 20,541,425 19,261,837 Stockholders' Equity 30,425,811 25,695,688 28,541,325 25,568,852 23,202,427 Assets 37,980,352 33,150,528 35,190,286 34,068,093 31,097,502 Liabilities 7,554,541 7,454,840 6,648,961 8,499,241 7,895,075

PER ORDINARY SHARE UNITNet Profit 4.81 4.10 4.36 2.57 2.26Stockholders' Equity 35.80 30.24 28.54 25.57 23.20Dividends paid for Year 1.05 0.90 1.37 0.64 0.64

Five Year Statistical Summary:Group

YEARS TO SEPTEMBER 30 2018 2017 2016 2015 2014Thousands of Guyana DollarsOPERATING DATA Sales - Net of Excise Taxes 27,384,290 26,613,989 25,516,295 24,874,732 23,695,420 Taxes 2,348,314 1,989,573 1,824,790 1,895,878 1,818,464 Net Profit after Tax for Shareholders 4,286,356 3,887,795 4,468,140 2,944,523 2,660,323 Cash Cost Of Dividends Paid 892,354 802,410 1,370,000 640,000 640,000 Net Dividend Cover 4.80 4.85 3.26 4.60 4.16

Number of issued & fully paid Capital 849,862 849,862 1,000,000 1,000,000 1,000,000 Working Capital (7,988,970) (11,071,714) (9,466,390) (15,097,261) (13,908,590) Net Property, Plant and Equipment 25,624,359 23,601,031 23,375,880 22,845,865 20,759,039 Stockholders' Equity 34,124,221 29,175,923 31,721,304 28,625,280 25,873,974

Taxes

Assets 81,319,447 75,946,222 77,260,878 72,503,325 70,050,693 Liabilities 42,959,530 42,746,048 41,815,726 40,330,905 40,996,849

PER ORDINARY SHARE UNITNet Profit 5.04 4.44 4.47 2.94 2.66Stockholders' Equity 40.15 34.33 31.72 28.63 25.87Dividends paid for Year 1.05 0.90 1.37 0.64 0.64


Five Year Statistical Summary:Company

YEARS TO SEPTEMBER 30 2018 2017 2016 2015 2014Thousands of Guyana DollarsOPERATING DATA Sales - Net of Excise Taxes 24,323,941 23,156,314 22,328,366 21,225,900 20,544,246

1,946,763 1,494,507 1,550,154 1,337,124 1,207,907 Net Profit after Tax for Shareholders 4,085,166 3,584,269 4,356,976 2,568,506 2,264,644 Cash Cost Of Dividends Paid 892,354 802,410 1,370,000 640,000 640,000 Net Dividend Cover 4.58 4.47 3.18 4.01 3.54


Number of issued & fully paid Capital 849,862 849,862 1,000,000 1,000,000 1,000,000 Working Capital 9,387,976 7,820,867 10,509,514 6,053,769 5,324,411 Net Property, Plant and Equipment 22,262,266 20,125,967 20,246,462 20,541,425 19,261,837 Stockholders' Equity 30,425,811 25,695,688 28,541,325 25,568,852 23,202,427 Assets 37,980,352 33,150,528 35,190,286 34,068,093 31,097,502 Liabilities 7,554,541 7,454,840 6,648,961 8,499,241 7,895,075

PER ORDINARY SHARE UNITNet Profit 4.81 4.10 4.36 2.57 2.26Stockholders' Equity 35.80 30.24 28.54 25.57 23.20Dividends paid for Year 1.05 0.90 1.37

contents dih annual report 2018.… · called to be perfect but rather to be consistent,” bears...

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