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Zambian Breweries Plc
Consolidated Financial Statements
For The Year Ended 31 March 2009
(all amounts are in millions of Kwacha unless otherwise stated)
31
NOTES (continued)
e) Capital risk
The Group’s objectives when managing capital are to safeguard its ability to continue as a going
concern in order to provide returns for shareholders and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, issue new capital or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of a gearing ratio. This
ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less
cash and cash equivalents. Total capital is calculated as equity plus net debt.
During the year Group’s strategy, which changed from prior year’s, was to maintain a gearing ratio less
than 75%. The gearing ratio at 31 March 2009 was 40% (2008: 16%)
2009 2008
Total borrowings 158,326 46,914
Less: cash and cash equivalents (20,439) (8,257)
Net debt 137,887 38,657
Total equity 210,558 208,642
Total capital 348,445 247,229
Gearing ratio 40% 16%