2016 INTEGRATED REPORT · This report covers the period from 1 October 2015 to 30 September 2016. However, we have also included any ... Nampak is Africa’s largest diversified packaging

2016 INTEGRATED REPORT

NA

MPA

K LIMITED

INTEG

RATED REPO

RT 2016

2016IntegratedReport


About our reportOur integrated report is the main communication avenue to our shareholders and other stakeholders in Nampak Limited who are interested in our commitment to create value and ensure a sustainable business into the future. In this report we provide a balanced and accurate assessment of our financial, economic, social, governance and environmental factors.

We report on the six capitals upon which we rely and that have an impact on our business. We also report on the operational and financial performance of Nampak together with the risks and opportunities that determine our material issues, our strategic response to them as well as our future view.

Scope and boundaryThis report covers the period from 1 October 2015 to

30 September 2016. However, we have also included any

significant events which occurred after year-end and before the

approval date of the report. Most of the content includes all Nampak

businesses in all geographies except where specifically noted in the

relevant sections.

Nampak reports on its operations by packaging substrate, being

metals, glass, paper and plastics and also by geographical region.

The report includes all the group’s businesses and associates and all

significant items are reported on a comparable basis.

Financial statements and other reportsWe have provided summarised financial statements in this integrated

report. The full consolidated annual financial statements, full

corporate governance report, full remuneration report and a detailed

sustainability report are all available on our website or may be

requested from our company secretary [email protected]

Significant changes during the reporting periodThe group entered into a sale and leaseback of 15 properties

which raised R1.7 billion in gross proceeds with a capital profit

of R1.3 billion. The proceeds will be utilised in the reduction of

interest-bearing debt and post-retirement medical aid liabilities.

The group incurred R681 million in foreign exchange losses during

the year, with operations in Nigeria contributing the majority of

the loss.

Asset impairments of R360 million arose during the year primarily

related to the conversion to aluminium of a tinplate line in Angola.

Content and material issuesMaterial issues are defined as those which have the potential to

significantly affect our ability to create stakeholder value and sustain

the group into the future. They determine the content of this report

and are detailed on page 27 .

AssuranceFinancial informationThe financial information in this report has been prepared in

accordance with International Financial Reporting Standards (IFRS)

and has been independently audited by our external auditors,

Deloitte & Touche.

Non-financial informationWe considered the following main standards in providing non-

financial information:•• JSE Listings Requirements•• The Companies Act•• King III•• The IIRC’s International <IR> Framework•• The FTSE/JSE Responsible Investment Index Series•• GRI G4 guidelines and CDP standard

We are pleased to report that following our participation in the

FTSE Russell ESG Ratings survey Nampak has been included in the

reserve group for potential promotion to the top 30 list of companies.

1 About our report

Who we are2 About Nampak

4 Our operating context

6 How we performed in 2016

8 Chairman’s review

How we create value using the six capitals10 How we create value using the six capitals

12 Human capital

14 Manufactured capital

15 Financial capital

16 Intellectual capital

17 Social and relationship capital

18 Natural capital

19 Key relationships on which we rely to create value

Strategic context22 Chief executive’s report

24 Strategy – plans and performance

26 Nampak R&D – central to our strategic delivery

27 Material issues affecting our strategy

30 Social, ethics and transformation activities

31 Our material risks and opportunities

Strategic performance36 Chief financial officer’s review

43 Five-year financial review

46 Audit committee report

48 Independent auditor’s report

49 Directors’ responsibility for annual financial statements

49 Preparer of financial statements

49 Certificate by company secretary

50 Financial statements

Operational review

59 Metals

62 Glass

64 Plastics

67 Paper

Governance and remuneration68 How we are governed to create value

74 Board of directors

77 Executive committee

78 Remuneration report

Shareholder information90 Notice of annual general meeting

95 Proxy

97 Analysis of registered shareholders and company schemes

98 Shareholders’ diary

99 Glossary of terms

100 Corporate information

Contents

www.nampak.comScan this QR code with your mobile device for quick access to the report.

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PAGE

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Approval by the boardThe board acknowledges its responsibility for ensuring the integrity of the integrated report and has applied its collective mind in the preparation and presentation of this report. In our opinion the 2016 integrated report is presented in accordance with the framework of the IIRC.

Tito Mboweni André de RuyterChairman Chief executive officer

Forward-looking informationThis integrated report contains forward-looking statements that, unless otherwise indicated, reflect the group’s expectations at year-end. Actual results may differ materially from the group’s expectations. The group cannot guarantee that any forward-looking statements will materialise and, accordingly, readers are cautioned not to place undue reliance on this. The group disclaims any intention and assumes no obligation to revise any forward-looking statement, even if new information becomes available, other than as required by the JSE Limited Listings Requirements or any other applicable regulations.

www.nampak.comScan this QR code with your mobile device for quick access to the report.

NavigationThe following icons provide links to additional information:

PAGEThis icon gives you references to supporting information throughout the report.

This icon tells you where you can find more information online and on our website: www.nampak.com

Details of our material issues appear on page 2.

Report feedbackWe continually strive to improve our reporting and welcome any comments that will assist us in doing so. Please contact [email protected]



1 Nampak Limited Integrated Report 2016

Our visionTo provide best-in-class packaging throughout our selected markets

About Nampak

Nampak is Africa’s largest diversified packaging group. We are the market leader in manufacturing beverage cans in South Africa, Nigeria and Angola and have commanding positions in other metal, glass and plastic packaging in South Africa. We are the sole producer of cigarette cartons in Nigeria and a significant manufacturer of paper packaging in many other African countries. For more than 70 years we have invested in world-class facilities. We operate in 11 countries in Africa as well as in the United Kingdom and Ireland. Our 6 678 people provide leading-edge packaging to our customers, some of whom are among the world’s largest FMCG companies. Nampak has a well resourced R&D facility that provides innovative solutions which fully supports our varied customers’ packaging requirements. We support recycling, reuse and recovery of used packaging. Our strategy is to unlock further value from our base business and accelerate growth in the Rest of Africa.

Our mission To deliver sustainable value to stakeholders as a responsible corporate

citizen and leader in packaging in our selected markets

Our values

Responsibility Integrity Excellence Commitment Teamwork

Our material issues

Challenging macro-economic environment

in key markets

Liquidity restrictions and the exposure of

restricted cash to currency volatility

Our operational and financial performance

People – safety, skills and transformation

Uncertain regulatory and policy environment


2 51 operations and 2 corporate offices as well as our R&D facility in

13 countries

3

3

1

1

1

1

1

1

1

28

2

9

Zimbabwe

South Africa

Zambia

United Kingdom

Tanzania

Swaziland

Nigeria

Malawi

Kenya

Angola

Ireland

Ethiopia

Botswana

Where we operate

Value creation – where our people live and work

South Africa 4 185

Rest of Africa 1 909

Metals 2 288

Glass 435

Plastics 1 283

Angola 224

Kenya 193

Nigeria 420

Tanzania 71

Zimbabwe 118

Metals 1 026

Corporate office

179

Botswana 19

Ethiopia 9

Swaziland 8

Zimbabwe 145

Plastics 181

Nigeria 93

Malawi 122

Zambia 142

Zimbabwe 345

Paper 702

United Kingdom & Ireland

584

Number of people

Corporate office

12

Plastics 572


Who

we

are

Our operating context

Factors that influence the use of packaging•• Economic growth and disposable incomes •• Urbanisation and levels of health awareness•• Population size and growth rate•• Ease of use and serving sizes•• Consideration of the environmental impact of packaging

The global packaging industry•• Worth US$870 billion per annum•• Major customers: FMCG firms•• Main end-markets: food, beverages and home and beauty care•• Environmental concerns encourage innovation•• Demand for convenience foods drives development

Africa’s packaging industry•• Worth US$22 billion per annum•• Supported by growing middle class•• Higher margins justified by perceived risks•• Competition limited but growing•• We expect packaging demand to grow by a CAGR of between 5 and 10% to 2021

South Africa’s packaging industry•• Worth US$4 billion per annum•• Growing competition, including imports•• Consolidation of customer base•• Increasing regulatory requirements•• We expect packaging demand to grow by a CAGR of between 2 and 5% to 2021

Source: Industry and Nampak estimates

The environment in which we operate helps us identify our material issues – those that could affect the delivery of our strategy as well as our ability to create value in the short, medium and long term.In 2016, weak economies, volatile currencies, policy uncertainty and skills shortages were the major themes in our macro environment. On pages 28 and 29 we discuss the implications of these on Nampak’s value creation, as well as our strategic responses to them in the year. Among other important factors that continued to define our operating context were the dynamics of the packaging sector globally, in Africa and South Africa:


Our investment case:• Africa’s largest packaging group• Leading market positions in Africa, United Kingdom and Republic of Ireland• Comprehensive plan to improve performance• De-leveraged balance sheet• Optimised organisational structure• Strong relationships with multinationals• Invaluable partnerships

Our customers:• ABInbev • British American Tobacco• Castel• Clover • Coca-Cola• Diageo• Distell• Dulux• GSK• Heineken• Kansai Plascon• Kingsley Beverages• Namibia Breweries

• Nestlé• Oceana• Orange Grove Dairies• Pioneer• RCL Foods • Reckitt Benckiser• Refriango• Rhodes Food Group• SC Johnson• Tiger Brands• United National Breweries• Unilever• Woodlands Dairy

Our major partners:• Bericap• Crown• Elopak• Mauser• Silgan• Wiegand-Glas


Who

we

are

How we performed in 2016

In the face of macro-economic challenges that led to demand and currency volatility, Nampak delivered improved trading results for 2016.

Revenue from the Rest of Africa up

26%Contribution to group trading profit 52%

Headline earnings per share

48% Net increase in cash of R4.2 billion versus decrease of R1.5 billion in the prior year

Earnings per share

11%

Reduced net gearing from 72% to 49%

Abnormal foreign exchange losses in Nigeria and Angola of R681 million due to in-country dollar shortages

Group revenue up

11%

ConcludedR1.7 billion South African property sale and leaseback

Recorded R186 million swing in Glass’s profitability

Cash extraction from Rest of Africa up from 59% to

77%6 Nampak Limited Integrated Report 2016

Cut water consumption by

7%

Recycled 59 000 tonnes of glass

Corporate social investment

spend of

R8.5 millionin South Africa and

a further R1.0 million in the

Rest of Africa9% reduction in CO2 emissions per R million revenue

Achieved LTIFR of

0.48against the target of 0.50

Nampak apprenticeships increased by 18% to

176

Employed

26graduates


Who

we

are

Chairman’s review

Focusing on factors within Nampak’s control2016 was a year of steady progress by Nampak. Driven to deliver on its strategy, and in so doing create value for all its stakeholders, the group extended the work started in 2015 to fundamentally transform the business. Since then, the executive team has been revitalised; the operating model clarified; safety prioritised; operations excellence programmes implemented; business processes streamlined and low-margin and non-core businesses sold.

This has resulted in a more efficient organisation better able to withstand difficult trading conditions, and ready to leverage its established businesses in Africa once the economic tide turns.

Weak global economic growth in 2016 meant a challenging environment for commerce the world over. A range of external factors – political uncertainty, lower commodity prices, volatile currencies and liquidity issues, drought conditions and high inflation – impacted the performance of Nampak’s businesses. The economies of Angola and Nigeria were under significant pressure with the timing and quantum of conversion from in-country currencies to US dollars uncertain and sporadic. As a result, significant losses on the translation of restricted cash balances in both countries led to a drop in the group’s earnings in the year.

However, Nampak continued to make solid advances on those

factors over which it has control, among them operational efficiency,

balance sheet management and people development.

The strategic performance tables on page 24 , as well as the reports

of the CEO (page 22 ) and CFO (page 36 ) give details of

Nampak’s delivery against strategy in the year and the group’s plans

to ensure sustainable value creation in the future. In running the

business and advancing its growth, Nampak considers the

availability of the resources and relationships on which it relies,

known as the six capitals, as well as the impact that the group has

on them. Details of these, and the trade-offs that invariably have to

be made, are given on pages 12 to 18 .

Committed to the highest standards of corporate governance, the

board is responsible for the strategic direction of the group, as well

as for maintaining control over the issues that affect Nampak’s ability

to create value. This year, for the first time, the integrated report gives

greater detail of these material issues (pages 28 and 29 ) – how

they are managed, their implications for value as well as the group’s

strategic response in the year.

2016 was a year of steady progress by Nampak. Driven to deliver on its strategy, and in so doing create value for all its stakeholders, the group extended the work started in 2015 to fundamentally transform the business. Nampak is a more efficient organisation better able to withstand difficult trading conditions, and ready to leverage its established businesses in Africa once the economic tide turns.


How the board responds often requires tough choices, chief among them in 2016 the decision to suspend the payment of both an interim and full-year dividend. The group launched a review of the dividend policy, intent on ensuring that future payments are more closely linked to Nampak’s generation of cash.

Putting people and policy firstWhile all five of the material issues identified in the year were given equal attention by management and directors in the year, the two of particular focus for me were the issues relating to people – their safety, skills and transformation, as well as that which deals with the uncertain regulatory and policy environment.

People are at the heart of the business’s value proposition and Nampak needs to attract, develop and retain engaged and diverse employees who ensure the delivery of strategy. The group’s graduate training programme continues to provide a strong pipeline of talent, whose contribution is notable. Recent annual talent management reviews have exposed critical skills gaps, and although much progress has been made to address these, more is required.

The group’s efforts to strengthen the participation of the previously disadvantaged in the South African economy – through, among others, employment equity, enterprise development and social investment – are well established and wide-ranging. Although Nampak has been recognised for its progressiveness, it cannot rest on its laurels: there is still more work for all in South Africa to do to bring about meaningful and sustainable change.

The South African manufacturing sector, of which Nampak is a mainstay, needs policy certainty as well as a resolution to the political uncertainty that has dogged the country recently. The packaging sector is feeling the weight of a significant regulatory burden that includes the requirement by the Department of Environmental Affairs to prepare and submit waste management plans to the minister for approval. These are in terms of the National Environmental Management: Waste Act, 2008.

Nampak, and the rest of the packaging industry, is concerned that the proposed waste management plans and the associated levy structure will result in the unintended consequence of waste recycling – of which Nampak is a key driver – actually decreasing and the industry coming under further pressure. Levies will place local manufacturing at a structural competitive disadvantage to foreign packaging companies. The introduction of a carbon tax and a proposed tax on sugar-sweetened beverages will further exacerbate this.

Nampak’s record on mitigating its environmental impact is well known. Nampak Research and Development, which in October 2016 marked 70 years of innovation and customer collaboration, is dedicated to making products that are lighter and therefore more environmentally friendly.

Between 2012 and 2016, Bevcan invested substantially in new aluminium beverage can production facilities, demonstrating the group’s commitment to a more sustainable, lighter and infinitely recyclable form of packaging. The group invested R1.2 billion in a state-of-the-art water- and power-efficient glass furnace as well as a number of projects to refurbish and upgrade existing operations to be more efficient. The major items in this recapitalisation programme are now complete. South Africa has an enviable record on the percentage of packaging that is collected for recycling. For details, see the operational reviews on pages 59 to 67 .

Looking aheadIn the year under review, Nampak significantly strengthened those factors over which it has control. While the economic outlook in its markets is clouded in the short term, in the longer term the group is well positioned to leverage its operations, experience and partnerships and benefit from a return to macro-economic stability.

On behalf of the board, I would like to thank all Nampak’s people, led by a refreshed and dedicated management team, for their diligence and enthusiasm in the year. We look to the future with confidence.

Tito MboweniChairman

Bryanston21 November 2016


Who

we

are

How we create value using the six capitals

Human capital The health, skills, safety, initiative and diversity of our people, suppliers and partners

Manufactured capitalOur production and research facilities; cullet, tinplate, aluminium, plastic and paper; public infrastructure

Financial capitalEquity and debt financing as well as cash generated from operations and investments

Intellectual capitalOur experience; proprietary and licensed technology; innovation; operational, marketing and procurement excellence initiatives

Social capitalCommunities; customers; suppliers; trade unions; industry bodies; governments; our brand and reputation, regulatory authorities

Natural capitalWater, land, air, limestone, sand and soda ash

Inputs

People• Attract, develop and retain engaged

employees • Develop and manage stakeholder

relationships• Ensure accountability• Deliver an empowered company

Product• Provide reliable, fit-for-purpose products• Ensure consistent quality• Support initiatives to reduce, reuse, recycle• Invest in innovation through research and

development

Processes• Maintain a safe workplace• Secure our advantage by buying, making

and selling better• Manufacture to the best quality and

environmental standards• Continuously improve our performance

We create value by converting raw materials into packaging products used to protect, preserve and transport consumer products. To do this, we rely on various relationships and resources, which we refer to as the six capitals.

Informed by our vision, mission, values and governance, this supports delivery of our strategy and is our approach to people, processes and product:

By considering our operating environment and our material issues, we ensure that we are responsive to changes and are able to adapt.

Our business model


Outcomes

6 678 employees

R3.1 billionpaid in wages and salaries

B-BBEE level 3*

LTIFR of 0.48

Trading profit

of R1.9 billion 4%

R1.7 billion raised from property sale and leaseback

Reduced gearing from

72% to 49%

R1.4 billion in capital expenditure

Asset impairments of R360 millionpredominantly Angolan tinplate line

R41.6 million spent on R&D

R8.5 million social investment in South Africa

47% of cullet used in glass manufacturing process

R

R

We need inputs of each to deliver on our strategy and generate value for all stakeholders. We carefully consider the trade-offs between the capitals, aiming to maximise positive outputs and outcomes, and limit any negative impacts.

Outputs

Dependable

packaging products made of

metals, glass, plastics and paper

Greenhouse gas emissions

28.67 tonnesCO2e per Rm revenue down 8%

* Currently under evaluation.


How

we

crea

te v

alue

Human capital

Through their expertise and experience our people enable us to operate our facilities safely, effectively and efficiently and contribute to the achievement of our goals and objectives.We have a comprehensive approach to managing our people and we are committed to addressing inequalities in the workplace. We invest substantially in employee training and development. Our culture is inclusive and we value diversity. Our people operate within a clearly defined governance framework and must adhere to the group’s code of conduct and business ethics policy.

How we achieved our outcomes•• We continued with our self-audits on risk-control standards including health and safety which are then subject to peer audit.

•• Provided bursaries for studies in engineering, science and accounting which are critical disciplines for the success of our business

•• Further invested in our training and development programmes

•• Introduced annual group talent management reviews

•• Appointed highly experienced managers to improve procurement and information management

Trade-offs in our use of human capitalThe installation of aluminium beverage can lines which produce more cans per minute than tinplate lines will result in a reduction in the number of manufacturing plants with a consequent reduction in employee numbers. This had a negative impact on human capital. However, our financial capital was positively impacted as the business has become more cost-effective, as demanded by our customers.

Inputs

2016 2015

Number of employees Number 6 678 6 663

Graduate development programme graduates

men 11 12

women 15 8

Nampak apprenticeships Number 176 149

Bursaries awarded Number 40 45

Employee development investment R million 53.3 48.1

HIV counselling and testing* % 59 80

* Offered annually

Outcomes2016 2015

Wages and salaries paid R billion 3.1 2.8

Lost-time injury frequency rate Rate 0.48 0.89

Work-related fatalities

Employees Number zero zero

Contractors Number 1 zero

Non-work-related fatalities Number 2 zero

Managers attending leadership training Number 109 127

Graduate development programme graduates employed

Number 26 20


Vuyo Dlova spent the early part of her childhood in KwaThema,

Springs before going to school at Sacred Heart College in

Observatory, Johannesburg. She matriculated in 2002 and went

on to complete a BASocs degree in labour studies,

organisational psychology and human resource management at

the University of Cape Town.

In 2010 Vuyo joined Nampak Cartons & Labels as a trainee and

was enrolled in the Nampak graduate development programme.

She says that this is a clear indication of Nampak’s commitment

to developing talent and that if you prove yourself by being open

to the learning process your efforts will be recognised. After

completing the programme Vuyo was initially employed as an

internal sales coordinator at Nampak Cartons & Labels and then

went on to manage some large and important customer

accounts. She was transferred to DivFood in Cape Town in

2013 and is currently customer service manager based at the

DivFood Bellville warehouse.

She recently completed the Management Development

Programme which is run in partnership with the Gordon Institute

of Business Science.

Thalenta Mtshali was born in Osizweni, Madadeni, Newcastle

and attended school at Thubelihle High School where he

matriculated in 2004. He then went on to complete a BSc

degree in electrical engineering at the University of Cape Town.

He was the first person in his family to achieve a university

degree.

In 2012 he joined the Nampak programme as a graduate

trainee at Nampak Cartons and Labels in Denver, Johannesburg

and in 2014 was appointed as a cold end technician at

Nampak Glass. His responsibilities include the day-to-day

running of the cold end of Furnace 3 but more importantly he has

to verify that the glass packaging is of acceptable quality before

it is despatched to our customers.

Thalenta says that the experience of the graduate development

programme has added a new set of values and has taught him

how to be humble, to take time to listen to conflicting views and

to learn from the wealth of experience that Nampak has to offer.

Training and developing our employeesWe recognise the importance that leaders can have in maintaining our competitive edge in the market place. The Nampak graduate development programme is one of the ways that we grow our own talent. This programme is aimed at building capacity for our future managers and leaders.


How

we

crea

te v

alue

Manufactured capital

We depend on our extensive existing asset base of plants, property and equipment to sustain our ongoing service to our customers and provide them with the packaging products they require. With operations in 11 countries in Africa and in the United Kingdom and Ireland we are more than capable of meeting our customers’ needs.We continue to upgrade our equipment and invest in new technologies that will contribute to achieving our goal of ‘Packaging Excellence’. The investment in modern equipment also plays a role in reducing the environmental impact of our manufacturing processes.

How we achieved our outcomes•• Commissioned new aluminium beverage can line at Rosslyn

•• Expanded beverage can ends plant capacity

•• Reduced spoilage at Bevcan Springs

•• Installed diesel generators at all DivFood operations

•• Commissioned new modern equipment at DivFood Vanderbijlpark and Mobeni

•• Invested in new equipment to manufacture a range of plastic packaging

Trade-offs in our use of manufactured capitalThe installation of modern equipment has impacted negatively on our human capital as operating this equipment requires fewer employees. Given our move to high-speed aluminium lines, we have impaired our tinplate line in Angola. Our financial capital will, however, benefit from this modernisation.

Inputs

2016 2015

Production facilities:

South Africa Number 28 29

Rest of Africa Number 13 16

UK/Ireland Number 10 8

Research & Development facility ✓ ✓

Cullet tonnes 59 000 63 000

Polymer resin tonnes 97 600 101 000

Aluminium and tinplate usage not disclosed for competitive reasons

Outcomes2016 2015

Capital expenditure

– expansion R billion 1.0 0.8

– replacement R billion 0.4 1.4

Depreciation and amortisation R million 912 802

Impairment of assets R million 360 121


Financial capital

The funds generated by our operations and borrowings raised from financial institutions constitute our financial capital inputs. These funds are used to run our business and to finance both expansion and replacement capital expenditure. They are also used to pay interest on borrowed money and, where appropriate, to distribute dividends to our shareholders. Our financial capital is reinvested in all the other capitals in a considered manner to ensure the sustainability of our business.The targeted return on capital is an important consideration when making investment decisions.

How we achieved our outcomes•• Concluded R1.7 billion sale and leaseback of properties

•• Achieved the benefits of our buy better, make better, sell better strategic imperative

•• Realised the returns expected from capital investment projects

•• Increased our focus on working capital management

•• Tightly controlled the capital investment programme

•• Implemented new focused cash management system

•• Strictly monitored liquidity issues in Rest of Africa

Balance sheet optimisation•• Released cash of approximately R487.8 million from inventories

•• Restructured loan covenants

•• Restructured R2 billion short-term debt to long-term debt

Trade-offs in our use of financial capitalOur financial capital benefits from the installation of modern equipment but this has been at the expense of jobs which negatively impacts our human capital. The suspension of the 2016 dividend has assisted in deleveraging the balance sheet and is consistent with the group’s strategy to conserve cash.

Inputs

2016 2015

Market capitalisation R billion 13.4 18.1

Total equity R billion 9.4 9.2

Capital investment R billion 1.4 2.2

Net interest-bearing debt R billion 4.6 6.6

Net interest incurred R million 485.5 279.0

Outcomes2016 2015

Operating profit* R billion 2.2 1.7Cash generated from operations R billion 2.8 1.7

Net borrowings to shareholders’ equity (gearing) % 49.0 71.8

Headline earnings per share* cents 107.6 208.2Earnings attributable to shareholders R billion 1.6 1.0

Dividends paid to shareholders R million 576** 946

Return on net assets* % 11.2 10.7Employment costs* R billion 3.1 2.8Interest paid to providers of capital R million 521 376

Earnings per share* cents 254.5 228.3Net cash generated/(utilised) R billion 1.8 (0.1)* Continuing operations** Final dividend for 2015


How

we

crea

te v

alue

Intellectual capital

We regard innovation as a key competitive advantage and our R&D facility in Cape Town possesses both the required intellectual knowledge and expertise to give us the edge in providing constantly improving world-class packaging solutions to our customers. This facility, which has a budget of R42 million and is unrivalled on the African continent, celebrated its 70th anniversary in October 2016.Our Nampak brand has been established over 47 years as a listed company and our ongoing investment in new technology provides our customers with the confidence that they will receive the expected level of service from us. Our logo ‘Nampak Packaging Excellence’ embraces our culture of providing outstanding manufacturing and service.

How we achieved our outcomes•• Contributed intellectual input to the introduction of a light-weight two-piece food can

•• We utilised our upgraded finite element analysis (FEA) and CAD software to redesign and light-weight plastic packaging products

•• Down-gauging trials on beverage cans are in progress

•• We assisted our customers with microbiology and can-handling audits as well as product evaluation and analysis

•• We provided bursaries to develop our intellectual capability

Trade-offs in our use of intellectual capitalOur investment in intellectual capital reduces our stocks of financial capital in the short term but increases our human, manufactured, financial and social and relationship capital in the longer term.

Inputs•• Our R&D facility which employed no fewer than 23 scientists, two engineers, 10 technologists, three technicians and four business information researchers

•• An R&D budget of R42 million

•• Our 6 678 skilled and experienced employees

•• Intangible assets valued at R309 million (excluding goodwill)

•• Our technical association with a number of key packaging manufacturers

Outcomes•• Reduced usage of tinplate

•• Light-weighted and redesigned plastic packaging

•• Improved customer relationships

•• Contributed to better food safety

•• Higher skills levels


Social and relationship capital

We contribute to helping the communities in which we operate and recognise that this is an integral part of our business sustainability. We also focus on building partnerships with trade unions and other structured engagement forums to effectively manage the risks associated with industrial action.Our relationships with our suppliers, customers, industry and government bodies, and regulatory bodies are equally important to our success. Our business activities have an impact on many aspects of society and we have strategies and systems in place that ensure that our relationships are managed effectively.

Inputs•• Beneficial management and employee relationships

•• Constructive relationships with trade unions

•• Ongoing interactions with government and tax authorities

•• Good relationships with our customers and suppliers

•• Informed communications with our shareholders and the investment community

•• A focused corporate social investment strategy

Outcomes

2016 2015

Long-term agreements with key customers ✓ ✓

Economic value-added R billion 6.73 5.65

Corporate social investment R million 8.5 10.7

B-BBEE contributor status Level In progress 3

No strike action ✓ ✓

Black management % 55 59

Successfully concluded wage negotiations at Glass and Liquid Paper in 2016

14 years of our school partnering programme, invested R3.3 million in 2016

How we achieved our outcomes•• Engaged with affected employees regarding post-retirement medical aid funding

•• Held joint consultative discussions with all trade unions

•• Participated with industry partners on waste management and recycling initiatives

•• Responded to government call for comment on proposed waste management legislation

•• Kept the investment community informed on performance and progress on strategy

•• Continued with our social investment programme including rebuilding a school in Ibadan, Nigeria investing R680 000

Trade-offs in our use of social and relationship capitalOur ongoing investment in social and relationship capital reduces our financial capital in the short term. However, over the long term our business will benefit from these investments which will then have a positive impact on our financial capital.


How

we

crea

te v

alue

Natural capital

We require quality water, land, air and energy. We also depend on a reliable supply of limestone, sand and soda ash for the manufacture of our glass packaging. We apply our resources to convert natural capital into value across all the other capitals.

We strive to reduce the impact of post-consumer packaging waste on landfill facilities through embracing environmental production standards and producer responsibility, evidenced by our commitment to maximising recycling and light-weighting.

How we achieved our outcomes•• We continued with our initiatives to promote recycling

•• Further investment in aluminium beverage can lines which will reduce energy demand

•• Invested R18 million in cullet sorting technology which has resulted in an increase in the usage of cullet

•• We reduced our dependence on municipal resources

•• We achieved the energy intensity efficiency target rate set in 2014 largely as a result of significantly improved performance at Glass

•• Drilled a borehole at Glass which will supply process and grey water

•• Installed energy-efficient lighting

Trade-offs in our use of natural capitalWe impact negatively on natural capital by using non-renewable resources such as limestone, silica sand and soda ash. The use of cullet, however, impacts positively on natural capital and we will continue to increase the use of this recycled material.

Inputs

2016 2015

Water consumption Mega litres 1 652 1 811

Land area used Square metres 980 373 1 019 438

Energy use Gigajoules 4 555 381 4 432 406

Purchased electricity Megawatt hours 424 161.11 434 347.87

Limestone tonnes 36 600 33 675

Silica sand tonnes 133 139 120 657

Soda ash tonnes 39 312 35 077

Outcomes2016 2015

Emissions (scope 1 and 2)

tCO2e/Rm revenue

28.67 31.80

Energy intensity % tCO2e from electricity 66% 69%

Cullet usage % 47 50

Finer cullet mm 3 7

Metal packaging waste collection % increased from 65% to

70% over four years

Plastic packaging waste collection % increased from 41% to

46% over four years

CDP climate change score

A- relative to C average


The key relationships on which we rely to create value

Sustainable value creation depends on successful interactions with stakeholders. Using our values as the basis of all exchanges, we aim to engage proactively with those who impact Nampak, as well as those on whom we have an impact. This informs our strategy development and evaluation, our risk management as well as our material issues.

The key stakeholders with whom we interact are:

Supply quality materials and services

Engage on issues facing the industry

Purchase appropriate products at competitive prices

Provide financial capital for sustainable

earnings growth

Shareholders and other funders

Key stakeholders

Although stakeholder relationship management is implemented at all levels across all our divisions, in terms of King III, our social, ethics and transformation committee monitors the company’s activities in this regard. The Nampak board of directors, however, retains ultimate responsibility for corporate reputation and stakeholder relationships. Opportunities and risks arising from our stakeholder engagements are also addressed in our risk management process.

Any stakeholder wishing to report matters of concern anonymously can email [email protected], which is operated independently by Deloitte & Touche.

Facilitate debate on issues facing the business and employees

Supply skills needed to deliver on our strategy

Holds us accountable for being a responsible

corporate citizen

Provide enabling

environment for value creation

Employees

Civil society

Governments and

regulators

Industry bodies Suppliers

Tradeunions

Customers


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In 2016, we considered the following to be the key issues of each stakeholder group, and our related actions. The icons show the links to our material issues.

Shareholders and other funders#

Key issues Our actions•• Strategy and sustainable returns•• Liquidity issues in Angola and Nigeria

•• Debt management•• Executive remuneration policy

•• Implemented numerous initiatives to improve operational efficiencies, cut costs, enhance profitability

•• Engaged with authorities in Angola and Nigeria•• Implemented new cash management system; improved inventory management; restructured debt; concluded property sale and leaseback

•• Provided shareholders with opportunity to discuss remuneration policy

# At year-end, our shareholding was 54% local and 46% foreign. We received a merit award from EY for our focus on value creation in our 2015 integrated report, which was rated excellent.

Employees*

Key issues Our actions•• Post-retirement medical aid for employees with at least 25 years of service by 2011

•• Workplace safety•• Securing and developing necessary skills

•• Performance management

•• Provided employees with lump-sum payments to fund their own post-retirement medical aid contributions

•• Renewed focus on safe working conditions; reduced LTIFR to 0.48 from 0.89

•• Put 109 people through managerial development programmes

•• Carried out performance reviews with 100% of managers

* Nampak News was a finalist for the Best Internal Magazine in the 2016 SA Publication Forum Awards.

Trade unions

Key issues Our actions•• Restructuring and retrenchments; pending closure of Bevcan Durban

•• Successful conclusion of wage negotiations

•• Establishment of Nampak Enterprise Bargaining Forum

•• Held successful joint consultative discussions with all trade unions; no disputes

•• Concluded scheduled wage negotiations at Glass and at Liquid Paper; no strikes

•• In consultation with NUMSA and other trade unions to establish Nampak Enterprise Bargaining Forum

Customers

Key issues Our actions•• Provide reliable supply of quality packaging and innovative solutions

•• Retain key customers•• Sustain good customer relationships•• Higher-than-acceptable spoilage at Bevcan Springs

•• Met customers’ needs by supplying quality products on time

•• Implemented a sales and marketing training programme

•• Improved manufacturing expertise and skills to reduce spoilage

The key relationships on which we rely to create value continued


Suppliers

Key issues Our actions•• Realise benefits of ‘buy better’ initiatives

•• Meet B-BBEE procurement targets•• Ensure consistent supply of quality raw materials

•• Utilised centralised procurement expertise; reduced supplier numbers

•• Negotiated long-term contracts for the supply of critical raw materials

•• Established and tested alternative supply channels•• Focused on identifying further B-BBEE suppliers

Industry bodies

Key issues Our actions•• Waste management •• Environmental impact of post-consumer packaging

•• Submitted comments on intention to call for waste management plans

•• Provided responses to government on policy changes through Packaging SA, BUSA and the Manufacturing Circle

Governments and regulators

Key issues Our actions•• Good governance and compliance•• Maintaining sound relations with the municipalities in which we operate

•• Additional proposed taxes on packaging and manufacturing

•• Proposed introduction of carbon and sugar tax

•• Liquidity issues in Angola and Nigeria

•• Maximising tax incentives

•• Maintained sound governance policies and processes

•• Participated in constructive engagements with municipalities

•• Provided detailed responses to various proposed policy changes

•• Formulated an enhanced engagement plan•• Applied for tax incentives from revenue authorities•• Close engagement with authorities in Angola and Nigeria helped improve liquidity

•• Complied with JSE and revenue authorities

Civil society

Key issues Our actions•• Improving the lives of communities in which we operate

•• Contributing significantly to secondary and tertiary education

•• Continuing our long-term commitment to environmental education

•• Dedicated R8.5 million in social investment •• Continued supporting partnered schools; provided bursaries to qualifying students on merit

•• Extended support to Eco-schools initiative


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Chief executive’s report

Building on the achievements of 2015, in 2016 we focused our efforts on unlocking further value from our base business. We put in place comprehensive plans to ‘buy, make and sell better’ and in so doing generate more cash, and moved closer towards completing our asset recapitalisation programme that is already enhancing our efficiency and competitiveness. Our operational performance improved markedly.

Getting the best out of our assets Nampak’s determination to consistently improve performance

was evident in 2016, when we recorded significant advances

in our work to deliver against our strategic objectives. This was

despite a challenging trading environment, which is one of five

material issues identified in the year and discussed in further detail

on pages 28 and 29 .

Building on the achievements of 2015, in 2016 we focused our

efforts on unlocking further value from our base business. We put

in place comprehensive plans to ‘buy, make and sell better’ and

in so doing generated more cash, and moved closer towards

completing our asset recapitalisation programme that is already

enhancing our efficiency and competitiveness. Our operational

performance improved markedly, with improved trading margins

at 10.5% from 9.8%.

We reduced the complexity of our business and introduced new

systems and processes to monitor, manage and forecast activities.

We implemented a new information management plan, appointing

a new chief information officer, and upgraded our supply chain

activities, appointing a chief procurement officer and increasing data

accuracy. This paid off with a R126 million procurement saving in

the year, and more to come. We reduced inventories, net of

disposals, by a total of R900 million over two years.

Safety is our number one priority and a key performance indicator

for executive remuneration, as well as a good proxy for operational

performance. In the year, we recorded an LTIFR of 0.48, down from

0.89 a year earlier and better than the target for the year of 0.5.

However, we are committed to zero harm and have set ourselves

a target of 0.4 in 2017.


In his report on page 36 , CFO Glenn Fullerton unpacks the many

achievements in the finance portfolio in the year. Suffice to say

that the fundamental restructuring of the balance sheet has been

transformative for Nampak – we have de-risked the balance sheet,

and returned the business to a sound financial footing, with strong

cash flows. Having stabilised our gearing, we are looking forward

to resuming dividend payments in the coming financial year.

In 2016, we focused on those things we could control and did our

best to optimise our assets and processes. However, due to the

commodity crisis hitting oil-producing countries hard, the environment

was tough, particularly in Angola and Nigeria: liquidity issues and

the exposure to currency volatility of restricted cash in these countries

was a material issue for Nampak, and resulted in an overall decline

in headline earnings.

In some parts of our business, slower GDP growth was not all bad:

as our packaging goes into a number of staple food products, we

benefited as consumers traded down to canned product – cheaper

forms of protein – from fresh produce, or favoured larger beverage

packs offering greater value. Some countries restricted imports of

certain goods by encouraging import replacement with locally

produced and packaged goods.

Believing in the African growth storyDespite the macro-economic headwinds in many African markets

in 2016, we are still confident of the demographic fundamentals

underpinning long-term packaging growth, and our strategic

objective to accelerate growth in the Rest of Africa remains intact.

We are, however, being circumspect as well as mindful of the need

not to lose our first-mover advantage. We are investigating alternative

mechanisms to allow us to achieve our objective without necessarily

committing to significant and risky capital expenditure.

In 2016, our trading margins in the Rest of Africa continued to be

attractive and our volumes showed remarkable resilience. Revenue

from these businesses contributed 31% compared with 27% in 2015.

Trading profit for the region made up 52% of our total, from 2015’s

48%. Consumption, urbanisation and disposable income trends in

sub-Saharan Africa support our investment thesis. The consumption of

packaging in this region is expected to grow by 5 – 10% per annum

until 2021. In South Africa, the expected growth rate is 2 – 5% a

year over the same period.

Looking aheadAlthough we made good progress on many fronts in 2016, in

the year ahead we are not complacent: more needs to be

done to improve our cash-generating ability, our operational

focus and unlocking growth opportunities through greater

agility and a deeper understanding of the needs of our

customers. We will continue to focus on achieving an

excellent overall manufacturing offering, leveraging our

many important partnerships.

The changing trading environment requires us to maintain a

keen eye on economic, political and market conditions, while

taking a longer-term strategic view on building for the future.

Ours is now a restructured and optimised organisation, with our

plants by and large operating efficiently and at benchmark

rates following a period of intense intervention to achieve

operational excellence.

Following the substantial investments made over the past few

years, the bulk of our facilities now operate the latest-generation

machinery, and we have a great opportunity to use this new

machinery to work hard to deliver value for us and our

stakeholders. While more work is scheduled mainly in our

South African Plastics business, we intend to keep a close rein

on the group’s total capital expenditure. Our forecast for

spending in 2017 is approximately R1 billion, down from

R1.4 billion in 2016.

I would like to thank Nampak people everywhere for their

commitment in 2016, and look forward to their continuing

contribution in taking this organisation to greater heights in

the year ahead.

André de Ruyter

Chief executive officer

Bryanston

21 November 2016


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Strategic imperative Performance in 2016 Status Focus ahead

Actively manage our portfolio

•• Concluded sale and leaseback transaction, raised R1.7 billion with R1.3 billion capital profit

•• Sold stake in Sancella•• Closed small general line DivFood business•• Disposed of 50% share in Crown Cork Company Mozambique

•• Further consolidation possible

Manage costs stringently

•• Concluded consultations to close Bevcan Durban•• Achieved R126 million procurement savings•• Reduced DivFood headcount by 180

•• Continued extraction of value and savings on total cost of ownership•• Focus on operations excellence to drive efficiencies•• Ensure below-inflation cash fixed cost increases

Manage working capital prudently

•• Released R607 million from inventory and trade receivables•• Saved R40 million through stock reduction at Plastics•• Reduced inventory days•• Introduced inventory management as executive KPI•• Introduced cash management committee

•• Further reductions in working capital•• Further reduce stock days to 70 in South Africa and 90 in Rest of Africa•• Streamline procurement processes•• Ensure that cash is king•• Increase working capital velocity

Improve business performance by buying, making and selling better

•• Turned around Glass: profitable and pack-to-melt at benchmark levels•• Launched Bevcan operations excellence project•• Enhanced emphasis on safety, delivered LTIFR of 0.48 vs 1.2 in 2014

•• Implemented marketing excellence initiatives•• Reduced SKUs by 30% in DivFood and Glass•• Reduced active customer accounts by 186, improving efficiencies

•• Drive improvements in procurement •• Focus on efficiencies, reduction in down time and less overtime•• Focus on reducing complexity•• Optimise contribution margins and continue SKU rationalisation•• Drive sales excellence for margin expansion, be data driven•• Emphasise systematic and integrated approach to decision making

Invest to compete

•• Completed phase 1 of DivFood recapitalisation•• Optimised organisational structure•• Commissioned Bevcan aluminium line at Rosslyn•• Commissioned Bevcan Springs can ends plant expansion•• Commissioned various new Plastics lines•• Improved project evaluation and management

•• Replace outdated equipment and consolidate sites•• Ensure world-class project management and execution•• Return on capital invested at benchmark rates•• Return on growth and restructuring capex at hurdle rate and only if working capital targets are met

Grow through greenfield investment and acquisitions in glass, metals and plastics

•• Was judicious with investments and managing risks•• Maintained Glass in Ethiopia and Nigeria as credible opportunities

•• Explore feasibility of further glass opportunities•• Bevcan growth depends on market, liquidity and exchange rate

Grow at a reasonable and sustainable return

•• Moderated project pipeline because of macro-economic challenges •• Raise the hurdle rate

Partner with major multinational customers

•• Signed up large new customer in Angola•• Increased Bevcan Nigeria sales volumes by 27,7%

•• Continue to leverage strong relationships with multinationals•• Extend technology partnerships to sustain market positions

Sensibly manage and grow our presence in current jurisdictions

•• Leveraged import replacement opportunities in Zimbabwe and Nigeria

•• Drive exports in select markets where margins are attractive

Our strategy – plans and performance

Nampak’s strategy is to get the best out of our business over the near to medium term, and then to grow to pursue our vision, which is to provide best-in-class packaging throughout our selected markets. We measure progress against our strategy through the key performance indicators (KPIs) of our group executive committee.

Accelerate growth in the Rest of Africa

Unlock further value from base business

Strategic objective


Strategic imperative Performance in 2016 Status Focus ahead

Actively manage our portfolio

•• Concluded sale and leaseback transaction, raised R1.7 billion with R1.3 billion capital profit

•• Sold stake in Sancella•• Closed small general line DivFood business•• Disposed of 50% share in Crown Cork Company Mozambique

•• Further consolidation possible

Manage costs stringently

•• Concluded consultations to close Bevcan Durban•• Achieved R126 million procurement savings•• Reduced DivFood headcount by 180

•• Continued extraction of value and savings on total cost of ownership•• Focus on operations excellence to drive efficiencies•• Ensure below-inflation cash fixed cost increases

Manage working capital prudently

•• Released R607 million from inventory and trade receivables•• Saved R40 million through stock reduction at Plastics•• Reduced inventory days•• Introduced inventory management as executive KPI•• Introduced cash management committee

•• Further reductions in working capital•• Further reduce stock days to 70 in South Africa and 90 in Rest of Africa•• Streamline procurement processes•• Ensure that cash is king•• Increase working capital velocity

Improve business performance by buying, making and selling better

•• Turned around Glass: profitable and pack-to-melt at benchmark levels•• Launched Bevcan operations excellence project•• Enhanced emphasis on safety, delivered LTIFR of 0.48 vs 1.2 in 2014

•• Implemented marketing excellence initiatives•• Reduced SKUs by 30% in DivFood and Glass•• Reduced active customer accounts by 186, improving efficiencies

•• Drive improvements in procurement •• Focus on efficiencies, reduction in down time and less overtime•• Focus on reducing complexity•• Optimise contribution margins and continue SKU rationalisation•• Drive sales excellence for margin expansion, be data driven•• Emphasise systematic and integrated approach to decision making

Invest to compete

•• Completed phase 1 of DivFood recapitalisation•• Optimised organisational structure•• Commissioned Bevcan aluminium line at Rosslyn•• Commissioned Bevcan Springs can ends plant expansion•• Commissioned various new Plastics lines•• Improved project evaluation and management

•• Replace outdated equipment and consolidate sites•• Ensure world-class project management and execution•• Return on capital invested at benchmark rates•• Return on growth and restructuring capex at hurdle rate and only if working capital targets are met

Grow through greenfield investment and acquisitions in glass, metals and plastics

•• Was judicious with investments and managing risks•• Maintained Glass in Ethiopia and Nigeria as credible opportunities

•• Explore feasibility of further glass opportunities•• Bevcan growth depends on market, liquidity and exchange rate

Grow at a reasonable and sustainable return

•• Moderated project pipeline because of macro-economic challenges •• Raise the hurdle rate

Partner with major multinational customers

•• Signed up large new customer in Angola•• Increased Bevcan Nigeria sales volumes by 27,7%

•• Continue to leverage strong relationships with multinationals•• Extend technology partnerships to sustain market positions

Sensibly manage and grow our presence in current jurisdictions

•• Leveraged import replacement opportunities in Zimbabwe and Nigeria

•• Drive exports in select markets where margins are attractive

Key: Good progress Some progress, more to come Disappointing

KPIs 2016

Among the most important in 2016 were:

•• Improve safety performance

•• Integrity and ethics management

•• Deleverage balance sheet

•• Liquidity management

•• Inventory management

•• DivFood plan implementation

•• Bevcan spoilage reduction, project execution

•• Benchmark Glass pack-to-melt ratios

•• Plastics operational excellence achievements

•• Project execution

•• Operational excellence

•• Project pipeline in place in Rest of Africa

Link to remuneration

Performance against KPIs determines a component of executives’ annual STI


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Nampak R&D – central to our strategic delivery

In October 2016 Nampak Research & Development celebrated 70 years of scientific and technical expertise in the development, production and use of world-class packaging. This benefits, promotes and adds value to our divisions and our customers, supporting the delivery of our service offering and the management of our material issues.

While Nampak R&D’s responsibilities are many and varied, in particular the work that we do to reduce the weight of our products contributes significantly to national efforts to reduce the amount of post-consumer packaging waste. By making our products lighter, we reduce our consumption of raw materials; we require less energy to transport our finished products; and we reduce the volume of post-consumer packaging waste. This is done without affecting the integrity of our products or the requirement that they be fit for purpose. Together with our support and facilitation of the recycling, reuse and recovery of packaging, we minimise our environmental impacts while providing world-class products that protect food and beverages, and ultimately benefit our customers’ sales.

In Metals, our aluminium beverage cans weigh 60% less than tinplate cans and are 100%

recyclable. Lines that produce aluminium cans consume 17% less energy per can than

those that produce tinplate cans. As the end product is lighter, these lines also reduce

transport costs. Our lighter two-piece food can, which is made from 0.29mm tinplate

versus 0.31 mm used previously, is now available throughout South Africa. We

continuously evaluate opportunities to use lighter materials and innovative designs to ensure

that we constantly improve our packaging. Some 70% of all metal packaging in South

Africa is collected for recycling – comparing very favourably with rates in the rest of

the world.

In Plastics, in the year we embarked on a project to reduce the weight of our crates, as

well as that of some of our plastic closures. We reduced the weight of our 1ℓ PET milk

bottle from 47g to 35.5g, while increasing its recycled PET content from 30% to 50%, as

well as reducing the weight of the 2ℓ HDPE milk bottle from 43g to 38g. We continue to

work on other light-weighting projects for bottles and crates. Our Infini milk bottles in the

UK offer an average 16% weight saving across the range, with specific bottle sizes

achieving weight reductions of up to 25%. They contain at least 20% recycled HDPE,

which is forecast to grow to 50% by 2020. About 46% of all plastic packaging in South

Africa is collected for recycling.

In Glass, in 2016 waste glass or cullet made up 47% of the content of our bottles. By

using cullet in our furnaces, we saved 196 terajoules of energy during the year, with the

benefit of fewer CO2 emissions. We started commissioning new cullet-sorting technology

that will enable cullet to be colour sorted to a much finer level, facilitating an increase in

the usage of mixed cullet that we procure from glass recyclers. Four-fifths of all beer sold in

South Africa is sold in returnable glass bottles, and some 41% of all glass packaging in

South Africa is collected for recycling.


Material issues affecting our strategy

Material issues are those with the potential to significantly affect our ability to deliver on our strategy, create value and sustain the group in the short, medium and long term. The most noticeable impact of these issues in the short term is on the group’s share price, which lost 25% of its value in 2016.

Identifying material issuesIn 2016, we identified five material issues:

Managing material issues

We identify them by reviewing:•• Information at divisional board and group executive committee meetings

•• Industry developments and the group’s risks and opportunities

•• Economic research

•• Stakeholder engagements

•• Applicable policies and regulations

•• Relevant media coverage

•• Input from key management

We prioritise them by assessing:•• Potential impact

•• Our risk and reward metrics

We respond to them by:

•• Evaluating the effect on our risk tolerance and risk appetite

•• Putting in place management actions to mitigate against negative outcomes

•• Considering the trade-offs between the capitals

We report on them:

•• At regular board and sub-committee meetings

•• To shareholders in formal reporting sessions

•• To employees and unions through structured channels

•• Through industry bodies

We monitor them:

•• Against internal and published performance targets

•• Against competitor activities

•• In consultation with our suppliers and customers

Challenging macro-economic

environment in key markets

Liquidity restrictions and the exposure of

restricted cash to currency volatility


People – safety, skills and

transformation

Uncertain regulatory and

policy environment

Material issues affecting our strategy


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Material issues affecting our strategy continued

Material issue Implications for value Our strategic response in 2016

Challenging macro-economic environment in key markets

In our key markets the economies were weak and currencies were volatile. Lower commodity prices dampened macro-economic demand and led, in some cases, to a national shortage of foreign currency albeit trading in Nigeria remained strong. Government revenue came under pressure, with an impact on consumers, who cut spending. In South Africa, manufacturing conditions and investment sentiment were poor, further depressed by the possibility of a sovereign credit downgrade in December 2016. Consolidation of both the competitive and customer landscape continued.

•• Decline in demand for packaging products•• Upward pressure on inventory levels as customers drew down less than forecast

•• Downward pressure on revenue, margins and earnings•• Dollar-denominated debt’s exposure to rand/dollar exchange rate volatility

•• Hampered potential for organic growth as well as opportunities for new investments

•• Any downgrade in South Africa’s sovereign rating could increase our cost of funding

•• Restructured the balance sheet to reduce impact of any sovereign downgrade

•• Worked to improve operational and business performance by•– Buying better – cut procurement costs by R126 million•– Making better – implemented operations excellence, made management changes, reduced headcount

•– Selling better – rationalised product offering, reduced complexity•• Improved forecasting, planning, procurement and information management

Liquidity restrictions and exposure of restricted cash to currency volatility

The sharp fall in oil prices from above US$110 a barrel in mid-2014 to below US$30 in early 2016 hit oil exporters Angola and Nigeria hard. It led to lower export earnings, a steep decline in their currencies and shortages of foreign currency. In line with IFRS, the functional currency for Bevcan in Angola and Nigeria is the US dollar, and that for our paper and metals businesses in Nigeria is the naira. In our accounts, when translating from functional currency to our reporting currency, all movements in monetary items are processed through our profit and loss statement. This resulted in a foreign exchange loss of R681 million against a loss of R161 million in the prior year.

•• Limited our ability to settle debt with internal creditors (Isle of Man treasury)

•• Reduced cash balances at group level due to weaker naira and kwanza while cash balances in Nigeria and Angola rose to R2.0 billion from R700 million

•• Abnormal foreign currency translation losses of R681 million and significantly reduced group profitability

•• Increased engagement with local regulators, central banks and credit providers

•• Leveraged position as major manufacturer in Angola and good relations with authorities to extract restricted cash

•• Hedged US$45 million in Angola via US dollar-indexed kwanza bonds

•• Secured US$27 million in dollar deliverable forwards in Nigeria•• Restructured our debt both locally and in Rest of Africa•• Continued to link Bevcan Nigeria product pricing to US dollar•• 50% of cash in Nigeria and Angola hedged•• Cash extraction in Nigeria and Angola improved from 59% to 77%


The levels of spoilage at Bevcan Springs plant improved but remained above target. At the Bevcan Rosslyn facility, a second aluminium line was commissioned and ramped-up, in line with expectations. We restored Glass to profitability. Operationally, Bevcan Angola and Nigeria performed very well. Plastics put in place the foundations required for enhanced performance. We restructured our balance sheet, which was stressed by years of high capital expenditure and a generous dividend policy. We readjusted to the financial implications of recent divestitures. We devoted considerable attention to addressing our post-retirement medical aid liability, which had grown significantly. Net gearing was reduced from 72% to 49%.

•• Improved prospects for efficiencies, profitability, longer-term returns to investors

•• Vulnerability to weaker rand – for every R1 easing in the rand/dollar in 2016, our US dollar debt increased by R389 million

•• Pressure on ability to meet loan covenants•• Post-retirement medical aid liability of R1.5 billion prior to an alternative annuity offer to pensioners

•• Successfully implemented numerous interventions to improve operational efficiencies

•• Restructured the balance sheet: •– Entered property sale and leaseback deal, raising R1.7 billion and reducing liabilities accordingly

•– Released R607 million from inventories and trade receivables•– Limited capital expenditure to R1.4 billion •– Suspended 2016 dividend, reduced net gearing from 72% to 49% which is within the 40% to 60% target range

•– Offered pensioners alternatives to post-retirement medical aid, reducing liability by R393 million to R1.1 billion

•– Renegotiated loan covenants; applied transformative cash management system

•– Cash extraction increased from 59% to 77%


Ensuring the safety of our people and that of our contractors is critical. Tragically in the year, an electrical contractor died in a high-voltage incident and two people were killed when a contractor driving a Nampak truck lost control of his vehicle. Our overall safety performance improved.

Nampak continued to face a shortage of skills. The fall in Nampak’s share price had implications for our ability to retain key talent. In South Africa, the meaningful transformation of society from one characterised by huge inequality remained vital.

•• Unsafe operations harm people, the environment, quality and our reputation

•• Insufficient skills may impact our ability to meet customer requirements

•• Inadequate skills could harm operational effectiveness and ability to deliver on strategy

•• Potential to affect revenue, profitability, investor returns and tax payable to authorities

•• A transformed society in the workplace, with greater equality, is a more sustainable one

•• Introduced group-wide behaviour-based safety initiative•• Firmed up succession plans for all managerial positions•• Injected new, diverse talent as opportunities arose•• Provided executive coaching to facilitate people development•• Delivered management training aligned with recognised qualifications•• Offered specific technical training; committed to inclusive growth


A significant regulatory burden is being placed on South African manufacturing, and packaging in particular. New broad-based black economic empowerment (B-BBEE) codes recently came into force. The increased regulatory burden includes implications of the National Pricing Strategy for Waste Management Charges; the requirement of the Department of Environmental Affairs (DEA) to prepare and submit for government approval waste management plans; the planned tax on carbon emissions and the proposed tax on sugar-sweetened beverages.

•• Our contributor status under the new B-BBEE codes will decline •• Waste management levies will place local manufacturing at a structural disadvantage

•• Additional fees could change the industry’s recycling of post-consumer packaging

•• Failure to remain compliant could lead to penalties and harm our licence to operate

•• Profitability will be pressured, impacting returns to investors

•• Drove multi-pronged B-BBEE approach, with clear development and succession plans

•• Maintained our significant contributions to recycling •• Sustained our efforts on greater light-weighting of products•• Engaged constructively with policy makers on proposed regulatory changes

•• Focused on unlocking further value from base businesses to build resilience to withstand requirements of greater regulatory burden


Material issue Implications for value Our strategic response in 2016

Challenging macro-economic environment in key markets

In our key markets the economies were weak and currencies were volatile. Lower commodity prices dampened macro-economic demand and led, in some cases, to a national shortage of foreign currency albeit trading in Nigeria remained strong. Government revenue came under pressure, with an impact on consumers, who cut spending. In South Africa, manufacturing conditions and investment sentiment were poor, further depressed by the possibility of a sovereign credit downgrade in December 2016. Consolidation of both the competitive and customer landscape continued.

•• Decline in demand for packaging products•• Upward pressure on inventory levels as customers drew down less than forecast

•• Downward pressure on revenue, margins and earnings•• Dollar-denominated debt’s exposure to rand/dollar exchange rate volatility

•• Hampered potential for organic growth as well as opportunities for new investments

•• Any downgrade in South Africa’s sovereign rating could increase our cost of funding

•• Restructured the balance sheet to reduce impact of any sovereign downgrade

•• Worked to improve operational and business performance by•– Buying better – cut procurement costs by R126 million•– Making better – implemented operations excellence, made management changes, reduced headcount

•– Selling better – rationalised product offering, reduced complexity•• Improved forecasting, planning, procurement and information management

Liquidity restrictions and exposure of restricted cash to currency volatility

The sharp fall in oil prices from above US$110 a barrel in mid-2014 to below US$30 in early 2016 hit oil exporters Angola and Nigeria hard. It led to lower export earnings, a steep decline in their currencies and shortages of foreign currency. In line with IFRS, the functional currency for Bevcan in Angola and Nigeria is the US dollar, and that for our paper and metals businesses in Nigeria is the naira. In our accounts, when translating from functional currency to our reporting currency, all movements in monetary items are processed through our profit and loss statement. This resulted in a foreign exchange loss of R681 million against a loss of R161 million in the prior year.

•• Limited our ability to settle debt with internal creditors (Isle of Man treasury)

•• Reduced cash balances at group level due to weaker naira and kwanza while cash balances in Nigeria and Angola rose to R2.0 billion from R700 million

•• Abnormal foreign currency translation losses of R681 million and significantly reduced group profitability

•• Increased engagement with local regulators, central banks and credit providers

•• Leveraged position as major manufacturer in Angola and good relations with authorities to extract restricted cash

•• Hedged US$45 million in Angola via US dollar-indexed kwanza bonds

•• Secured US$27 million in dollar deliverable forwards in Nigeria•• Restructured our debt both locally and in Rest of Africa•• Continued to link Bevcan Nigeria product pricing to US dollar•• 50% of cash in Nigeria and Angola hedged•• Cash extraction in Nigeria and Angola improved from 59% to 77%


The levels of spoilage at Bevcan Springs plant improved but remained above target. At the Bevcan Rosslyn facility, a second aluminium line was commissioned and ramped-up, in line with expectations. We restored Glass to profitability. Operationally, Bevcan Angola and Nigeria performed very well. Plastics put in place the foundations required for enhanced performance. We restructured our balance sheet, which was stressed by years of high capital expenditure and a generous dividend policy. We readjusted to the financial implications of recent divestitures. We devoted considerable attention to addressing our post-retirement medical aid liability, which had grown significantly. Net gearing was reduced from 72% to 49%.

•• Improved prospects for efficiencies, profitability, longer-term returns to investors

•• Vulnerability to weaker rand – for every R1 easing in the rand/dollar in 2016, our US dollar debt increased by R389 million

•• Pressure on ability to meet loan covenants•• Post-retirement medical aid liability of R1.5 billion prior to an alternative annuity offer to pensioners

•• Successfully implemented numerous interventions to improve operational efficiencies

•• Restructured the balance sheet: •– Entered property sale and leaseback deal, raising R1.7 billion and reducing liabilities accordingly

•– Released R607 million from inventories and trade receivables•– Limited capital expenditure to R1.4 billion •– Suspended 2016 dividend, reduced net gearing from 72% to 49% which is within the 40% to 60% target range

•– Offered pensioners alternatives to post-retirement medical aid, reducing liability by R393 million to R1.1 billion

•– Renegotiated loan covenants; applied transformative cash management system

•– Cash extraction increased from 59% to 77%


Ensuring the safety of our people and that of our contractors is critical. Tragically in the year, an electrical contractor died in a high-voltage incident and two people were killed when a contractor driving a Nampak truck lost control of his vehicle. Our overall safety performance improved.

Nampak continued to face a shortage of skills. The fall in Nampak’s share price had implications for our ability to retain key talent. In South Africa, the meaningful transformation of society from one characterised by huge inequality remained vital.

•• Unsafe operations harm people, the environment, quality and our reputation

•• Insufficient skills may impact our ability to meet customer requirements

•• Inadequate skills could harm operational effectiveness and ability to deliver on strategy

•• Potential to affect revenue, profitability, investor returns and tax payable to authorities

•• A transformed society in the workplace, with greater equality, is a more sustainable one

•• Introduced group-wide behaviour-based safety initiative•• Firmed up succession plans for all managerial positions•• Injected new, diverse talent as opportunities arose•• Provided executive coaching to facilitate people development•• Delivered management training aligned with recognised qualifications•• Offered specific technical training; committed to inclusive growth


A significant regulatory burden is being placed on South African manufacturing, and packaging in particular. New broad-based black economic empowerment (B-BBEE) codes recently came into force. The increased regulatory burden includes implications of the National Pricing Strategy for Waste Management Charges; the requirement of the Department of Environmental Affairs (DEA) to prepare and submit for government approval waste management plans; the planned tax on carbon emissions and the proposed tax on sugar-sweetened beverages.

•• Our contributor status under the new B-BBEE codes will decline •• Waste management levies will place local manufacturing at a structural disadvantage

•• Additional fees could change the industry’s recycling of post-consumer packaging

•• Failure to remain compliant could lead to penalties and harm our licence to operate

•• Profitability will be pressured, impacting returns to investors

•• Drove multi-pronged B-BBEE approach, with clear development and succession plans

•• Maintained our significant contributions to recycling •• Sustained our efforts on greater light-weighting of products•• Engaged constructively with policy makers on proposed regulatory changes

•• Focused on unlocking further value from base businesses to build resilience to withstand requirements of greater regulatory burden


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TransformationTransformation is a strategic imperative of the company and receives ongoing attention. The social, ethics and transformation committee monitors the company’s performance against its Broad-Based Black Economic Empowerment targets in each category on the scorecard and is pleased with the steady improvement and overall target achievement. The Empowerdex audit of our B-BBEE score was not finalised by year-end and thus the Level 3 contributor status achieved during 2015 reflects the latest position. It is anticipated that this status level will drop as a direct result of the introduction of the new codes. We continue to develop and implement strategies to improve this position.

We are pleased to report that Nampak received the prestigious Black Management Forum’s ‘’Most Progressive Company of the Year’’ award for ‘’promoting and championing black leadership development’’.

The lock-in period of The Nampak Black Management Trust (the Trust”) which was established in October 2005 as part of Nampak’s B-BBEE transaction expired on 31 December 2015. Nampak originally provided a founding grant to the Trust which purchased 27 369 195 Nampak shares at a price of R15.13 per share. The shares were allocated to 679 black managers in the employ of Nampak (the beneficiaries) and the Trust required these shares to be released to the beneficiaries on expiry of the 10-year lock-in period at 31 December 2015. On expiry of the lock-in period, the Trust was required to sell sufficient shares to pay Nampak an amount equal to the founding grant plus a notional return equal to 85% of the prime overdraft rate, less any dividends received by the Trust on the shares that it owned (the hurdle rate).

At 31 December 2015, 189 beneficiaries were still in the employ of Nampak, while 490 of the beneficiaries had left Nampak.

The share price at 31 December 2015 was above the hurdle rate, and all the beneficiaries who were no longer active employees of Nampak either sold all their shares or sold sufficient shares to pay the income tax that was due with the balance of the shares transferred into their own names.

Active employees were provided the same options as the beneficiaries who left Nampak but were also provided with an additional option that allowed them to extend their participation in the Trust to 15 February 2017. At that point, if the share price is below the hurdle rate at that date, their participation will be automatically extended to 31 December 2017. The decision to provide extended participation to active employees was premised on the basis that, as managers still in the employ of Nampak, they could be able to contribute significantly to Nampak’s performance and profitability during the period of the extension, thereby helping to improve the Nampak share price and potentially their own personal reward. Fifty-eight managers elected to extend their participation in the Trust. As at 30 September 2016, the hurdle rate was higher than the share price.

Corporate social investmentNampak’s corporate social investment approach has been in place for a number of years and we are pleased with the long-term relationships that have been formed with the seven carefully selected schools that we sponsor in areas near our operations. During the year, three of our bursars joined the Nampak graduate development programme. We are pleased to advise that for the third time in five years, Nampak achieved second place in the South African Top Graduate Employers of 2016 in the manufacturing category.

Enterprise developmentWe continue to seek opportunities to sustainably increase our participation in enterprise development activities. We continued our support for several enterprise development initiatives during 2016, including TinPac packaging, Last Drop Juice and Vukani MaNtuli. The disposal of the Nampak Sacks division was also concluded within the principles of supplier and enterprise development.

Integrity and ethicsThe committee considered and is satisfied with the progress in monitoring the company’s compliance with the company’s code of conduct and business ethics and the United Nations Global Compact’s 10 principles on human rights, labour, the environment and anti-corruption. The committee is pleased to report that there were no reportable offences during the year.

A code of conduct and business ethics is enforced throughout the group. All directors and employees, irrespective of the country in which they are employed, are obligated under the same code to act with honesty and integrity and to maintain the highest ethical standards. The committee ensures that the code is enforced and by monitoring disciplinary action and sanctions can report that appropriate action has been taken.

Nampak operates ‘Tip-Offs Anonymous’, a hotline which allows callers to report confidentially on any violations of Nampak’s policies and procedures. All disclosures received, resultant investigations and the outcome thereof are communicated and reported to the social, ethics and transformation committee as well as the audit committee. A total of 24 (22 in 2015) reports were received during the year under review, which resulted in six (six in 2015) disciplinary hearings and one (six in 2015) dismissal.

In addition to Tip-Offs Anonymous reports, 33 (57 in 2015) forensic reviews were conducted during the year. The reviews resulted in 12 (18 in 2015) disciplinary hearings, which led to three (12 in 2015) dismissals. The remaining reviews did not reveal substantiated evidence of misconduct or irregularities.

No human rights violations were reported during the year, nor were any material incidents of corruption detected or reported.

Health and safetyThe committee recognises the importance of health and safety in the workplace and monitors performance against safety targets. We are pleased with the overall improvements in safety performance at our manufacturing operations and continue to support the linkage of safety performance to individual incentive bonus payments. OSHAS 18000 certification or equivalent is held at 16 sites.

Customer relationshipsThe committee reviewed performance against consumer legislation and regulations and noted that there were no material breaches. We were pleased to note that 38 out of 51 manufacturing sites held ISO 9001 certification. In addition, the manufacturing operations receive certification for various food safety standards with 32 out of 51 operations holding the standards required by their customers. Our smaller operations are subject to peer audits on a regular basis where it is not appropriate to implement and audit the full standard requirements.

For the full report of the social, ethics and transformation committee, see .

Social, ethics and transformation activities

Through our focused social, ethics and transformation activities we are able to address many of our material issues.


Our material risks and opportunities

We determine Nampak’s most material risks through our risk management process (details of which appear in the group’s corporate governance report on the website. ) We consider each risk’s potential impact on the achievement of the group’s strategy, as well as the probability of each arising. The risk rating position on the heat map reflects the residual risk position after considering the effectiveness of the mitigation strategies. We have ranked these risks in order of their magnitude, although we recognise that these positions may change during the year. We have provided a forward looking view of the risks and opportunities that we believe may impact future performance.

Nampak’s – Top 8 risks

1

Our financial results were severely impacted by our dependency on foreign exchange liquidity and currency fluctuations

Despite having little management control, we performed well during the year. We protected group liquidity and significantly deleveraged the balance sheet and restructured debt profiles

2

The tough macro-economic environment and political conditions impacted demand in our key markets

We remain firm in our view of the long-term fundamentals for investing in Africa and that our alignment with major multinationals in these regions will create the anticipated value over the medium term

3

Uncertain and demanding regulatory and policy framework changes in South Africa continue to hamper operations in the manufacturing sector

We are hopeful constructive engagement between government and industry will bring about sensible solutions that align regulatory requirements with growth progression and job creation

4

The divisions have improved their financial and operational performance even though demand across most products was weak. Glass returned to profitability and spoilage at our Bevcan Springs operation reduced

Improved safety and operational excellence performance and general modernisation of our equipment resulted in an overall improvement in our operational performance across all substrates. We have the capabilities and capacity to meet and benefit from any increase in demand

How we performed against our top four risks:

MaximumProbability

Minimum

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Maximum

PROBABILITY

Minimum Maximum

Max

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SEV

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2

3 4

5

6 7 8

1 Dependency on foreign exchange liquidity and currency movements

Tough macro-economic and political conditions in our key markets


Financial underperformance at operations

Uncontrollable increases to defined benefit liabilities

Inadequate people, culture and diversity development

Customer retention

Dependency on limited suppliers

2

3

4

5

6

7

8


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1 Dependency on foreign exchange liquidity and currency movements

Mitigation strategies:

•• Foreign exchange US dollar hedge strategies applied in Nigeria and Angola, with active cash extraction and hedged structures in place particularly in Angola

•• Foreign currency capital expenditure tightly controlled and hedged•• African financing facilities restructured in line with expected recovery in the oil price•• Sale and leaseback of South African properties released R1.7 billion in cash•• Balance sheet deleveraged and group’s covenant positions strengthened•• Reduced gearing has resulted in lower interest rates•• Strong focus on inventory management released cash and continues to form a component of the group’s incentive bonus targets for 2017

Looking forward:

•• Dollar availability in country in the medium term impacts negatively on local performance from Nigeria, Angola and possibly Zimbabwe

•• Currency volatility continues to have bearing on financial results

Opportunities for value:

•• Oil prices are expected to stabilise in the medium term which may steady liquidity and currency movements•• Strengthened balance sheet is able to withstand further volatility

2 Tough macro-economic and political conditions in our key markets


•• Long-term fundamentals for investment in African markets remained intact•• Leveraged existing customer relationships•• Our market positions remained strong with more than 60% of our customer base consisting of large multinationals with strong brands with very strong credit ratings

•• Robust project pipeline established to capture further growth

Looking forward:

•• Slow consumer demand and high inflation restrict customer demand•• Increase in inventory levels as a result of continued reduced demand•• Volatile rand exchange rate given political uncertainty•• Potential downgrade of South Africa’s sovereign credit rating•• Persistently low oil price


•• We are well positioned to take advantage of any organic growth•• A moderate recovery in business confidence, which is at its lowest in 30 years, would increase customers’ willingness to spend

Our material risks and opportunities continued


3 Uncertain regulatory and policy environment


•• Continued engagement with South Africa’s DEA, dti and Treasury on all aspects of proposed legislation both directly or in conjunction with industry bodies

•• Glass and plastics converters already participate in well established industry producer responsibility organisations (PRO) which will be a requirement under the proposed legislation. Voluntary industry levy collections are used to support recycling initiatives. While metals have been actively involved in recycling initiatives, a formal PRO is not in place, however, it will be established within appropriate timeframes

•• Recycling rates of post-consumer packaging waste in South Africa are steadily improving across all substrates (refer to pages 59 to 67 for statistics)

•• Sustained our efforts at light-weighting products

Looking forward:

•• Promulgated legislation which is not aligned with current industry initiatives, specifically post-consumer waste management, carbon tax and sugar tax

•• Complex regulatory environment making it difficult to comply with all legislation at all times


•• Active participation in industry forums which decreases the severity of proposed regulation and provides a balance with economic growth requirements

4 Financial underperformance at operations


•• Glass turned around and profitable with pack-to-melt ratios at benchmark levels•• Continued focus on reduction in SKUs•• Increased focus on forecasting resulted in improved planning•• Introduced group-wide behaviour-based safety initiative •• Operations excellence initiatives and programmes created improvements in efficiencies and costs in all divisions•• Spoilage reduced at Bevcan’s Springs operation

Looking forward:

•• Opportunities for attracting new customers in support of the turnaround strategy for Plastics UK operation


•• Modernised operational base at favourable exchange rates provides barriers to entry of competitors•• We are well positioned to increase market share and operating margins generally•• Diversification from milk products to include juice and other products improve operational leverage in the United Kingdom


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5 Uncontrollable increases to defined benefit liabilities


•• Good progress made on settlement of the post-retirement medical aid liability accorded to South African pensioners younger than 75 years. At 30 September 2016, 475 pensioners had selected an annuity benefit in lieu of future subsidies by the company. At the closing date of the offer on 15 October 2016, 947 of 1 285 pensioners had responded with 73% of these pensioners opting for the alternative annuity offer. We will continue to trace the remaining pensioners so that they are given the same opportunity

•• The defined benefit liability reduced significantly by year-end•• Cash value of acceptances at year-end of R406 million•• Further uptake in South African PRMA annuity offer•• Commenced investigation of de-risking opportunities with the trustees of the Nampak Staff Pension Plan in the United Kingdom

Looking forward:

•• Ability to realise de-risking approaches in the UK pension plan


•• The relationships between gilt yields and inflation in the United Kingdom may improve as Brexit concerns reduce, thereby significantly reducing the funding requirement for the pension plan

•• Stronger balance sheet and income statement to support future growth opportunities

6 Inadequate people, culture and diversity development


•• Implemented a process of defining divisional staff establishments•• Quarterly group talent management reviews introduced which exposed critical skills gaps•• Compulsory employee performance management for managers linked to remuneration•• Continued training and development initiatives at all levels•• Invaluable partnerships with global manufacturers including technical support•• Strong and continued focus on the attraction, retention and training and development of black managers in South Africa, including increased female representation

Looking forward:

•• Skills shortages in areas where we operate•• Education structures in South Africa fail to deliver requisite technical skills•• Potential negative rating as a result of application of the new B-BBEE codes


•• Employee productivity improvements•• Established internal technical training facilities able to accommodate an increased number of apprenticeships and learnerships

Our material risks and opportunities continued


7 Customer retention


•• Value-added benefits provided by Nampak’s R&D facilities:i. Product innovationii. Testing of packaging performanceiii. Evaluation of packaging light-weighting opportunitiesiv. Microbiological assessments in respect of food and beverage safety

•• Established long-term relationships supported by long-term contracts•• Maintained and progressed appropriate quality, health and safety, and food and beverage standards to meet customer audit requirements

Looking forward:

•• Customer consolidation increases pressure on margins and volumes and requires strong adherence to contractual terms to avoid renegotiation

•• Continued pressure on quality and service•• New converters targeting our market share


•• Capability and capacity from recent capital expenditure enables growth with existing customers and attraction of new customers

•• Capital expenditure approved to modernise R&D equipment in 2017

8 Dependency on limited suppliers


•• Commenced journey to improve procurement maturity in the group•• Negotiated supply agreements with service providers•• Established and tested alternative supply arrangements•• Continued review of opportunities to reduce energy and water usage in our operations

Looking forward:

•• Possible extended drought and resultant water shortages•• Pressure on energy supply when economic conditions improve•• Increases in costs above inflation for energy and water which are difficult to pass on to customers


•• Targeting further savings from procurement initiatives•• Ensure compliance with and optimisation of supplier payment terms•• Alignment of inventory holdings with supplier delivery and payment terms


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Chief financial officer’s review

Financial highlights•• Group revenue of R19.1 billion increased by 11%

•• Group trading profit of R1.9 billion improved by 4%

•• Trading profit from Rest of Africa of R990 million was up 12%

•• Glass operation turned around, delivered profit of R105 million compared to loss of R81 million in prior year

•• Group operating profit of R2.2 billion up 29%, benefiting from sale and leaseback transaction

•• Dollar illiquidity in Nigeria and Angola resulted in R681 million abnormal foreign exchange loss

•• Impairment of assets adversely impacted earnings by R360 million

•• EPS up 11%

•• HEPS down 48% due to forex losses, increased interest costs and higher effective tax rate

•• Sale and leaseback transaction raised R1.7 billion, boosting equity by R1.3 billion and reducing interest-bearing debt

•• Group gearing ratio reduced from 72% to 49%

•• Covenants well managed

•• Balance sheet structure substantially strengthened

•– R2 billion short-term funding converted to long term

•– Current ratio improved 50% from 1.0 times to 1.5 times

•• Capital expenditure managed in line with guidance of R1.4 billion to the market with reduction of R0.8 billion from prior year

•• R561 million released from net working capital compared to absorption of R669 million in prior year

•• PRMA liability addressed

•• Net increase in cash generated of R1.8 billion compared to utilisation of R0.1 billion in prior year

•• Net increase of R4.2 billion in cash and cash equivalents compared to net decrease of R1.5 billion in the prior year

•• No final dividend in line with group’s efforts to conserve cash and strengthen the balance sheet further

Confronting challenges, optimising our position

Focus area How we did in 2016

Capex management

Working capital management

Forecasting

Managing liquidity in Rest of Africa

*

Optimising the balance sheet

Managing down gearing

Focusing on cash generation

Creating a platform for growth* Continuous work required.


OverviewIn 2016, Nampak rose to the challenges presented by the difficult macro-economic conditions that we faced. We identified various opportunities to improve our financial structure and processes, successfully implementing a number of initiatives that assisted the group in its journey towards sustainable value creation. By restructuring the balance sheet, we placed Nampak in a much stronger position from which to leverage opportunities, reduce costs and enhance profitability.

Determined to improve our cash position, we introduced a new cash management system that instilled much more rigour in our processes, allowing our refocused team to take charge of our cash position on a daily basis. We readjusted to the financial implications of prior year divestitures; fundamentally changed our approach to working capital management by giving particular attention to restoring inventories to lower, more acceptable levels; and renegotiated our loan covenants with lenders with regard to the exchange rate at which these are measured for the March 2016 and September 2016 measurements respectively. We kept a tight lid on capital expenditure, completing already approved capital projects and worked to improve our forecasting abilities. In this way, we managed the material issues the group faced in the year.

Growing revenue

%

R mi

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3 000

6 000

9 000

12 000

15 000

18 000

21 000

Revenue

3

8

13

18

2012 2013 2014 2015 2016■ Net revenue ■ Trading margin

Revenue increased by 10.7%, a pleasing performance in challenging trading conditions. Bevcan Nigeria and Nampak Glass recorded respective revenue growth in excess of 50% and Bevcan in Angola and our metals business in Nigeria posted increases in revenue in excess of 20%. Glass achieved a revenue growth of 18% after adjusting for the prior year turnover of R251 million generated and capitalised net of operating costs during the start-up phase. The performances in Nigeria and Angola are notable given the significant drop in oil prices in the year and expectations in some quarters that this would result in declining revenue for Nampak operations in these two oil-dependent countries. Stable production at our Glass operation in South Africa was fundamental to the growth in turnover and return to profitability.

Trading margins from operations increased from 9.8% to 10.5% primarily due to cost savings and the turnaround achieved in Glass. Increased centre costs related to unrealised foreign exchange losses on forward exchange contracts and project-related costs resulted in group trading margin declining from 10.6% in 2015 to 10.0% in the current year.

Benefiting from the improved performance of our major businessesNampak’s overall business performance, net of the losses resulting from macro-economic events beyond the control of management, displayed some distinct highlights. Bevcan in Angola and Nigeria contributed one third of group trading profit in the year and, after a difficult 2015, Nampak Glass recorded a R186 million positive swing in profitability at the trading profit level. Together these three businesses made a significant contribution to the overall performance of the group despite trading profit in Angola declining. In light of the continuing weak outlook for economic activity in South Africa, contributions from the group’s higher-margin businesses in the Rest of Africa remain central to the group’s prospects and continued value creation.

Restructuring the balance sheet – sale and leasebackThe single most important element of the restructuring of Nampak’s balance sheet in the year was the sale and leaseback transaction concluded with Imbali Props 21 Proprietary Limited. In terms of the deal, Nampak transferred ownership to Imbali of 15 of our industrial properties, which we are leasing back at rentals similar to those previously paid by Nampak’s operations to Nampak’s property division, as well as the outright sale of another property to Imbali. On 1 September 2016, we received R1.7 billion as full consideration for this transaction, resulting in a capital profit of R1.3 billion that has been disclosed as an abnormal item given its nature and size. Utilisation of past capital losses has resulted in a deferred tax asset being raised during the year, with minimal tax consequences attributable to the disposal. The lease has been classified and recognised as an operating lease in terms of the criteria set out in IAS 17 Leases. Fourteen of the properties were leased for an initial period of 15 years with an option to renew the lease for one additional period of 10 years, and an option to repurchase the properties at market-related prices on termination of the lease. One property was leased for a period of three years. Escalation of rentals is provided for in the lease agreements at inflation-related rates.

As part of our efforts to deploy capital for the highest return and to deleverage and de-risk the balance sheet, we applied the proceeds of this transaction to reduce interest-bearing debt as well as addressing our growing post-retirement medical aid (PRMA) liability. The transaction boosted equity, significantly reduced interest-bearing debt, playing a pivotal role in the restructure of the group balance sheet and substantially reduced the risk of any breach of the group’s loan covenants during a year that was characterised by volatile rand/dollar exchange rates. Our debt to equity ratio declined to 49.0% at year-end, from 71.8% at 30 September 2015, significantly improving the group’s balance sheet structure and creating a platform for future growth.

Reducing our post-retirement medical aid liabilityIn recent years, Nampak’s post-retirement medical aid liability grew sharply as longevity of pensioners increased and medical costs expanded faster than inflation. In 2016, we devoted considerable attention to addressing this liability, which had reached R1.5 billion by September 2015. By offering pensioners below 75 years of age alternatives to the post-retirement medical aid, we reduced our liability by R393 million to R1.1 billion, continuing to fulfil the promise made to pensioners without Nampak having to continue to carry this risk on the group balance sheet with a concomitant


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Chief financial officer’s review continued

reduction of the group’s long-term liabilities. The effect of the acceptance at year-end, of the annuity option offered and accepted by pensioners, will be a pay-out of R406 million and a curtailment benefit of R84 million.

Nigeria and Angola: liquidity constraints and currency devaluationThe collapse in the global crude oil price from above US$110 a barrel in mid-2014 to below US$30 in early 2016 had far-reaching impacts on the economies of oil-dependent countries. Consequently, it led to the economies of Angola and Nigeria recording sharply lower export earnings, a steep decline in their currencies and dire shortages of dollars to fund dollar-denominated imports. The liquidity trends in our Nigerian and Angolan operations changed during the year under review with the good liquidity achieved in Nigeria during the prior year not being repeated in 2016 as a consequence of the uncertainty and liquidity constraints that arose in the Nigerian foreign exchange market ahead of and after the lifting of the naira’s peg on 20 June 2016. We actively pursued opportunities to convert naira into dollars with moderate success.

Over the past year, the macro-economic environment in Nigeria and Angola has remained under pressure with the timing and quantum of conversion from in-country currencies to US dollars uncertain and sporadic. Nampak operations in both countries remain adequately funded with raw material supply secured through the group’s offshore buying and treasury office located in the Isle of Man. During the year we successfully managed down inventory levels and to the extent possible secured appropriate hedging instruments, thereby mitigating the foreign exchange risks. This, together with reduced capital expenditure in these countries in the year, resulted in a 43% decrease in overall supplies secured by the Isle of Man on behalf of Nigeria and Angola.

At 30 September 2016 the equivalent of US$45 million indexed kwanza bonds were acquired as a hedge, up from the US$25 million at 31 March 2016. For the year ended 30 September 2016 repayments in an amount of US$40 million were received in respect of goods and services procured on behalf of the Angolan operation representing liquidity of 95% (2015: 31%) of invoices presented for payment in the year, with the IOM funding the shortfall through financing facilities. The securing of these bonds materially assisted the group’s hedging activities but did not offer immediate convertibility into dollars. In the year to 30 September 2016, the kwanza depreciated by 23% against the US dollar. There is, however, an actively traded secondary market for these Angolan government-backed bonds.

In 2015 the US dollar cash extraction rate in Nigeria exceeded that achieved in Angola; however, 2016 saw improved cash extraction from Angola while that from Nigeria declined. Significant regulatory uncertainty in Nigeria before and after the unpegging of the naira on 20 June 2016 placed significant pressure on Nampak’s ability to receive US dollar allocations.

During the year the equivalent of US$27 million in dollar deliverable forward contracts were secured as a hedge for the Nigerian operations, with the majority maturing during November 2016. In addition, repayments in an amount of US$23 million were made to the IOM in respect of goods and services procured on behalf of the Nigerian operations representing liquidity of 57% (2015: 91%) of

invoices presented for payment in the year. This excludes the aforementioned hedge. Again, the IOM funded the shortfall through financing facilities. In the year to 30 September 2016, the naira depreciated by 58% against the US dollar.

On translation of the Nigerian and Angolan monetary items to the US dollar for dollar functional currency operations and the dollar-based liabilities to naira and kwanza respectively at the ruling official exchange rate, the group incurred R681.0 million (2015: R160.5 million) in abnormal foreign exchange losses with Nigeria contributing the majority of this loss.

At 30 September 2016 Nampak cash balances in both countries amounted to R2.0 billion, up from R1.5 billion at 31 March 2016 and R700 million at 30 September 2015. The cash balances at 30 September 2016 are after taking into account the R681.0 million foreign exchange losses.

No repayments on capital loans, remittance of interest on loans or dividend extractions were possible during the year. During the year US$10 million was classified as part of the net investment in the Nigeria metals and cartons businesses in terms of IAS 21 The Effects of Changes in Foreign Exchange Rates.

At the year-end, R990 million or 50% of these cash balances were hedged.

The increase in the cash on hand represents a combination of profit generated in the period, the liquidity shortfall funded by the Isle of Man treasury operation and various foreign exchange translation differences on consolidation. These foreign exchange losses have been disclosed as abnormal items as they are not directly attributable to normal trading and relate to in-country US dollar shortages. All foreign currency translations and foreign currency transactions are translated using the official exchange rate in line with the requirements of International Financial Reporting Standards and foreign exchange regulations in individual countries.

The group remains committed to the operations in these countries with the overall long-term investment rationale based on the demographics underpinning growth in packaging being sound. The group has adequate funding for operations in the Rest of Africa and is well positioned to benefit in the medium to long term.

Performing on our loan covenantsNampak has two defined loan covenants. The first is net interest-bearing debt to EBITDA cover of not more than three times. The second is to maintain an EBITDA to net interest ratio of not less than four times. Through our work in the year, most notably the sale and leaseback transaction and our working capital optimisation programme, our performance with regards to the first loan covenant was very encouraging. It improved to 1.7 times by year-end from 2.3 in 2015 and well below the upper limit of 3.0 times reflecting the improved balance sheet structure.

Our performance with regard to the second covenant – EBITDA to net interest for covenant purposes declined from 9.7 times in 2015 to 5.4 times in 2016 but was still satisfactory and ahead of the required 4 times. This was mainly the result of higher interest costs resulting from consistently higher levels of interest-bearing debt


for a significant portion of 2016 due to the balance of the capital expansion programme having been funded, as well as higher interest rates in South Africa.

Given the rand/dollar exchange rate volatility in 2016 and the group’s exposure to US$378 million interest-bearing debt, we renegotiated debt covenants with our lenders for the 31 March 2016 and 30 September 2016 measurement periods. The renegotiated position allowed both the EBITDA and the interest-bearing debt to be converted at the average rate for the periods as opposed to the interest-bearing debt being measured at the spot rate at the measurement date. This position substantially reduced the risk of a covenant breach during the negotiation period of the sale and leaseback given the extreme volatility in the rand/dollar exchange rate. The restructuring of the balance sheet allowed the group to operate well within the covenants, creating a platform for growth.

0.0

0.5

1.0

1.5

2.0

2.5

Net debt to EBITDA (covenant <3 times)

2012 2013 2014 2015 2016

Tim

es

0

2

4

6

8

10

12

14

EBITDA/interest cover (covenant >4 times)

2012 2013 2014 2015 2016

Tim

es

Profit for the year under review

From continuing operations

2016Rm

2015Rm

Variance%

Revenue 19 138.9 17 291.3 10.7Trading profit 1 905.1 1 839.6 3.6Abnormal items – profits/(losses) 257.7 (158.2) Operating profit 2 162.8 1 681.4 28.6EBITDA* 3 434.9 2 605.1 31.9PBT 1 677.4 1 398.6 19.9PAT 1 478.3 1 456.1 1.5EPS – cents 254.5 228.3 11.5HEPS – cents 107.6 208.2 (48.3)Ordinary dividend – cents – 134.0

* Adjusted for impairments

Nampak’s trading profit increased by 3.6% to R1 905.1 million in 2016 from R1 839.6 million in 2015, primarily due to Bevcan Nigeria’s pleasing performance, the recovery by Nampak Glass and improved performances from DivFood, Plastics’ Liquid Packaging and our Zimbabwe operations. These results were partially offset by increased corporate costs related to various projects and treasury-related unrealised foreign exchange losses at year-end compared to unrealised foreign exchange profits in the prior year. A pleasing turnaround was achieved at Glass with a trading profit of R105 million delivered, compared to a trading loss of R81 million in the prior year with stable production contributing significantly to the improved performance. Glass’s trading loss in the prior year of R76 million has been restated to include unrealised foreign exchange losses previously disclosed as abnormal.

Bevcan South Africa’s volume decline was more than offset by improvements in operating efficiencies. DivFood delivered a pleasing result off the back of its recapitalisation plan, cost efficiencies and improved focus.

Bevcan Nigeria continued to gain market share with strong growth in trading profit. DivFood’s recapitalisation programme and cost-saving initiatives resulted in improved operational efficiencies with a concomitant improvement in profitability. Our UK Plastics business experienced difficult trading conditions, leading to volume and margin pressures with the result partially offset by a once-off credit to earnings of R45 million due to a change in the pension plan rules.

Trading profits in Metals increased by 7%, Plastics by 8% and Paper by 12% with margins in Metals and Plastics being similar to the prior year. Trading margins in the Paper division declined from 14.4% in the prior year to 13.5% in 2016 primarily due to a contraction of margins in Zambia. The trading profit in the Metals division takes into account a reduction of R122 million in the Bevcan operations’ depreciation as a consequence of applying the units of production method to can lines that are not operating at full capacity as opposed to the straight-line method used in the prior year. IAS 16 Property, Plant and Equipment paragraph 61 requires that the depreciation method applied to an asset will be reviewed at least at each financial year-end and, if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset, the method will be changed to reflect the changed pattern. Such a change will be accounted for as a change in an accounting estimate in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. In line with this International Financial Reporting Standard, we changed the method of depreciation for can lines not operating at full capacity. Once operating at full capacity the units of production method will equate to the straight-line method. This is considered a change in estimate of the consumption of the asset over its economic life.

Given the unfavourable macro-economic environment both in South Africa and the rest of the world, these trading results were pleasing.


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ImpairmentsThe group performed impairment testing on the carrying value of goodwill and concluded that no goodwill impairment was required for the year ended 30 September 2016.

The tinplate beverage can line in Angola has been impaired, consistent with the group’s intention to replace it with an aluminium line, from existing kwanza cash balances subject to the allocation of the required foreign exchange by the Angolan authorities. Total asset impairments during the year were R360.4 million (2015: R121.4 million).

Abnormal items

2016Rm

2015Rm

Profit on disposal of property subject to sale and leaseback 1 318.9 –Profit on disposal of other property 15.2 102.5Profit on disposal of investments 3.5 –Devaluation loss arising from Nigerian and Angolan illiquidity (681.0) (160.5)Net impairment losses on property, plant, equipment, intangible assets, investments and shareholder loans (360.4) (121.4)Retrenchment and restructuring costs (34.1) (77.3)Gain on revaluation and consolidation of Zimbabwe associates – 124.2Business acquisition-related costs (4.4) (25.7)

Net gain/(loss) 257.7 (158.2)

During the year, a net gain of R257.7 million was made on abnormal items compared to a net loss of R158.2 million in the prior year. A net profit of R1 318.9 million was achieved on the sale and leaseback transaction. Dollar illiquidity in the Nigerian and Angolan markets resulted in a foreign exchange loss of R681.0 million with the majority of the loss being attributable to the Bevcan Nigerian operation. In the prior year, the R160.5 million loss arose in Bevcan Angola and Bevcan Nigeria. The net impairment losses on property, plant, equipment, intangible assets, investments and shareholders’ loans relates in the main to the R278.0 million impairment of the Bevcan Angola tinplate line. Retrenchment and restructuring costs relate to the closure of the Bevcan Durban operation.

EBITDA (adjusted for impairments)EBITDA improved from R2 605.1 million to R3 434.9 million and benefited from improved operational performances, the capital profit on the sale and leaseback transaction but was negatively impacted by the foreign exchange losses and impairments.

Finance costsNet finance costs increased 74% to R485.5 million as a consequence of increased interest rates, the funding of the capital expenditure programme embarked upon in prior years and a significant reduction in capitalised interest from R100.0 million to R37.9 million in the current year, as projects near completion.

Profit before taxProfit before tax of R1 677.4 million reflected a 19.9% improvement over the prior year aided by the capital profit on the sale and leaseback transaction which was partially offset by foreign exchange losses incurred in Nigeria and Angola and impairments of certain plant and equipment.

Managing taxationNampak has a good record of managing the group’s taxation affairs: we prioritise compliance in all respects across several jurisdictions while optimising allowable deductions and taking opportunities to the full extent possible. In 2016, we continued to benefit from a tax holiday in respect of Bevcan in Nigeria, where we enjoy the benefits of our ‘pioneer’ status in that market. This expires in 2018. In Angola, our tax holiday ends during 2019. We have also benefited from tax incentives granted in relation to our beverage can lines in South Africa with management actively managing the requirements to benefit from these favourable tax laws that encourage investment.

The effective tax rate increased from a negative 4.1% in the prior year to 11.9% primarily due to reduced government incentives. No tax shield on forex losses in the jurisdictions of Nigeria and Angola given the respective pioneer and tax holiday statuses, certain disallowable expenditure and B-BBEE share scheme expenditure claimed in the prior year. The taxation rate was not affected by the capital profit on the sale and leaseback transaction as this capital profit was shielded from capital gains tax by capital tax losses incurred in prior years on which deferred tax assets were raised in the current year.

Profit after tax from continuing operations of R1 478.3 million exceeded the prior year of R1 456.1 million by 1.5%. The group benefited from lower tax rates in jusrisdictions outside of South Africa. The tax rate is expected to return to the previous guidance of between 15% and 20% in 2017. The Bevcan Nigeria pioneer status expires in 2018 and the Bevcan Angola tax holiday ends during 2019.

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5

10

15

20

25

30

Effective tax rate

2012 2013 2014 2015 2016

%


Earnings per share (EPS) and headline earnings per share (HEPS)In 2016, EPS improved by 11.5% assisted by the impact of the sale and leaseback transaction, which was partly offset by foreign currency translation losses as well as impairment costs. HEPS declined by 48.3% to 107.6 cents from 208.2 cents in 2015 primarily due to foreign exchange losses, higher interest costs and an increased effective tax rate.

HEPS/EPS

■ EPS ■ HEPS

201620152014201320120

50

100

150

200

250

300

Cents

Reviewing our dividend policyAfter many years of applying a constant dividend policy of 1.55 times cover with a payout ratio of 64.5% of HEPS, driven primarily by corporate action rather than cash generation, in 2016 the board made the difficult decision to suspend the payment of both the interim and full year dividend. The decision was part of the group’s balance sheet restructuring programme given the high historic gearing levels that arose from aggressive capital expenditure and corporate finance activities over the preceding five years and liquidity issues in Nigeria and Angola. Future dividends will be based on cash generated from operations in non-restricted cash regions after taking into account replacement capital expenditure and net interest paid, and will be based on a payout ratio of 40%.

Capital expenditure and depreciationAfter many years of significant capital expenditure, in 2016 Nampak’s capex was more restrained as we came closer to the end of our major capital investment programme. Over the last three years, capital expenditure has declined from R2.6 billion in 2014 to R2.2 billion in 2015 and R1.4 billion in 2016. This trend is expected to continue, with capital expenditure of R1.0 billion guided for 2017.

Depreciation versus capex

20162015201420132012■ Expansion ■ Replacement ■ Depreciation charge

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0

500

1 000

1 500

2 000

2 500

3 000

The majority of the current years’ capex relates to capex approved in prior years. Expenditure of R1.4 billion in the year is in line with guidance provided to the market.

Focusing on working capital improvementsHistorically, the single biggest impact on working capital at Nampak was related to outflows due to the group’s significant investment in inventory. In 2016, we reversed this trend through careful planning and decisive execution by management resulting in a pleasing cash release during the year. Inventory management will remain a key focus area and form part of the management incentive structure. In 2016, we reduced inventory by R487.8 million and lowered trade and other receivables by R119.1 million, resulting in a gross inflow of R606.9 million compared to an outflow of R1 191.3 million in the prior year. We believe that in the main, inventory is now at levels more suitable to each division and this will be maintained, or improved upon wherever possible. However, there is reduced opportunity for further material optimisation. Our trade receivables consist of several blue-chip companies, which maintained terms. There was little in the way of bad debts, testimony to an extremely well managed and high quality accounts receivable portfolio. The decrease in accounts payable was mainly the result of reduced capex creditors.

Measuring our performance with key ratios

0

5

10

15

20

25

30

ROE

2012 2013 2014 2015 2016

%

A moderate increase in earnings and a proportionally larger increase in equity flowing from the profit on the sale and leaseback transaction and the decrease in treasury shares (Black Management Trust) has slightly decreased ROE compared to the prior year.


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0

5

10

15

20

RONA

2012 2013 2014 2015 2016

%

An improvement in RONA was achieved through improved trading

profit after several years of significant capex to modernise assets

0

10

20

30

40

50

60

70

80

Net gearing

2012 2013 2014 2015 2016

%

Net gearing has benefited from the sale and leaseback transaction, improved working capital management and cash management interventions.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Current ratio

2012 2013 2014 2015 2016

Times

The proceeds from the sale and leaseback transaction improved

working capital management and cash generation has resulted in a

50% improvement in the current year from 1.0 to 1.5 times.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

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1.6

Acid-test ratio

2012 2013 2014 2015 2016

Times

The declining acid-test ratio since 2013 has reversed with the ratio tending towards one times cover indicating the group is almost able to settle all creditors without liquidating inventories.

Looking forwardAfter considerable progress on many fronts in 2016, in the year ahead we will focus on leveraging our new, well-capitalised asset base to the benefit of our shareholders. We will continue to tighten our financial discipline and forecasting and despite continuing macro-economic headwinds believe we have a stable platform for growth following the optimisation of our balance sheet.

After a year in which significant cash was released from inventories, in the period ahead we are targeting further improvements in working capital management, with the aim of inventory holdings being funded by trade payables and increased working capital velocity. This will be supported by linking management incentives to key metrics.

The finance function is a critical enabler to operations to drive profitability and capital allocations. We will continue to closely monitor liquidity issues in the Rest of Africa and work to improve group gearing through greater cash generation. Capital allocation will be prudently reviewed, supported by the multi-disciplinary team we have recently established to review all capital expenditure.

I would like to thank the finance team for their diligence and resourcefulness in a year of many changes, the group executive committee, board and other group committees and our various providers of capital, for their support during the year. I look forward to further improvements in the group’s financial performance in 2017.

Glenn FullertonChief financial officer



Five-year financial review

DefinitionsTreasury sharesTreasury shares represent shares in Nampak Ltd held by group subsidiary companies and trusts.

Weighted average number of sharesWeighted average number of shares in issue is calculated as the number of shares in issue at the beginning of the year (net oftreasury shares), increased by shares issued during the year,weighted on a time basis for the period during which they haveparticipated in the profit of the group.

Dividends declared/cash distributions per ordinary shareInterim dividend/cash distribution paid per ordinary share plus thefinal dividend/cash distribution declared in respect of the current year’s profits.

Trading profitOperating profit adjusted for abnormal gains/(losses).

Abnormal gains/(losses)Gains/(losses) which do not arise from normal trading activities or are of such size, nature or incidence that their disclosure is relevant to explain performance for the period.

Net assetsTotal assets, excluding tax, deferred tax, bank balances, deposits and cash equivalents and non-current receivables, less trade and other payables, provisions and other non-current liabilities.

EBITDAOperating profit before depreciation and amortisation.

EBITDA (debt covenants)Operating profit before depreciation, amortisation and abnormal gains/(osses).

Net debtLoans, borrowings and overdrafts, less bank balances, deposits and cash equivalents and non-current receivables (including current portion).

Net debt (debt covenants)Loans, borrowings and overdrafts, less bank balances, deposits and cash equivalents.

Net finance costs (debt covenants)Net finance costs before interest capitalised.

Employee numbers used for calculationsTotal number of employees adjusted for discontinued operations.

Market capitalisationNumber of ordinary shares in issue multiplied by the year-end market price per share.

Return on equityNet profit attributable to ordinary shareholders

Average ordinary shareholders’ equity

Return on net assetsTrading profit plus investment income and share of profit in

associates and joint ventures

Average net assets

Net asset turnRevenue

Average net assets

Return on invested capitalTrading profit less notional taxation adjustment

Average net debt plus average total equity

Current ratioCurrent assets including assets classified as held for sale

Current liabilities including liabilities classified as held for sale

Acid-test ratioCurrent assets before inventories, including assets classified

as held for sale

Current liabilities including liabilities classified as held for sale

Net debt to EBITDA (debt covenants)Net debt (debt covenants)

EBITDA (debt covenants)

EBITDA interest coverEBITDA

Net finance costs

EBITDA interest cover (debt covenants)EBITDA (debt covenants)

Net finance costs (debt covenants)

Gross gearingLoans, borrowings and overdrafts

Total equity

Net gearingNet debt

Total equity

Productivity per employeeEBITDA

Employee numbers used for calculations

Employment cost per employeeEmployee benefit expense

Employee numbers used for calculations

Earnings yieldHeadline earnings per share

Year-end market price per share

Dividends/cash distributions yieldDividends/cash distributions per ordinary share

Year-end market price per share

Price/earnings ratioYear-end market price per share

Headline earnings per share


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Five-year financial review continued

2016 2015 2014 2013 2012

StatisticsEarnings and dividend dataWeighted number of ordinary shares in issue ‘000 632 667 629 726 627 728 624 921 623 607Headline earnings per share cents 107.6 182.1 234.7 205.3 190.4

Continuing operations cents 107.6 208.2 221.9 141.4 161.6Discontinued operations cents – (26.1) 12.8 63.9 28.8

Change over previous year (continuing operations) % (48) (6) 57 (12) 97Earnings per share cents 254.5 165.6 186.3 207.2 193.4

Continuing operations cents 254.5 228.3 221.7 156.4 165.2Discontinued operations cents – (62.7) (35.4) 50.8 28.2

Change over previous year (continuing operations) % 11 3 42 (5) 127Dividends/cash distributions declared per share cents – 134.0 153.0 140.0 129.5

Change over previous year % (100) (12) 9 8 20 Five-year compound annual growth rate % – (4) (12) (21) (2)

Dividend/cash distribution cover times – 1.5 1.5 1.5 1.5

Financial dataReturn on equity

Continuing operations % 17.9 19.1 23.6 19.6 24.7 Continuing and discontinuing operations % 17.9 12.5 15.4 19.8 21.1

Return on net assetsContinuing operations % 11.2 10.7 16.7 16.6 18.2 Continuing and discontinuing operations % 11.2 11.0 14.8 18.4 21.2

Net asset turnContinuing operations times 1.1 1.1 1.3 1.8 2.1 Continuing and discontinuing operations times 1.1 1.2 1.5 1.9 2.2

Return on invested capital % 9.2 9.0 12.2 16.0 17.4 Current ratio times 1.5 1.0 1.2 1.7 1.5Acid-test ratio times 0.9 0.6 0.7 1.2 0.8EBITDA Interest cover times 7.1 9.3 8.3 13.3 15.6 EBITDA Interest cover – debt covenants times 5.4 9.7 7.3 10.0 13.0 Effective rate of tax

Continuing operations % 11.9 (4.1) 9.1 25.9 26.9 Continuing and discontinuing operations % 11.9 (21.5) 4.1 21.4 27.3

Net debt 4 625.3 6 582.1 5 721.5 1 155.6 1 058.6Gross gearing % 79.7 90.8 89.8 80.0 51.3 Net gearing % 49.0 71.8 72.6 16.1 18.4 Net debt to EBITDA - debt covenants times 1.7 2.3 2.2 0.6 0.6 Number ordinary shares in issue* ‘000 639 884 630 057 628 267 625 457 624 272Net asset value per ordinary share cents 1 476 1 456 1 255 1 150 919Change over previous year % 1 16 9 25 2 * Net of treasury shares

Employee dataPermanent employees 6 678 6 663 9 269 9 965 10 364Temporary employees 1 422 1 328 1 851 1 734 2 005

Total employees 8 100 7 991 11 120 11 699 12 369

Employee numbers used for calculations 8 100 7 945 7 543 7 411 7 132Revenue per employee R’000 2 363 2 176 2 029 1 834 1 716 Employment cost per employee R’000 386 353 333 311 295 Productivity per employee Index 38 25 21 22 20

Operating results R millionContinuing operationsRevenue 19 138.9 17 291.3 15 305.6 13 594.5 12 240.5 Trading profit 1 905.1 1 839.6 1 867.7 1 688.1 1 497.1 Profit after tax from continuing operations 1 478.3 1 456.1 1 426.0 957.6 1 014.9 Discontinued operations(Loss)/profit from discontinued operations – (394.8) (222.4) 318.0 175.8

Profit for the year 1 478.3 1 061.3 1 203.6 1 275.6 1 190.7


2016 2015 2014 2013 2012

Attributable to: R millionEquity holders of Nampak Ltd 1 610.4 1 043.2 1 169.4 1 295.0 1 206.0Non-controlling interests (132.1) 18.1 34.2 (19.4) (15.3)

1 478.3 1 061.3 1 203.6 1 275.6 1 190.7

EBITDA 3 074.5 1 989.4 2 378.3 2 563.7 2 453.7Continuing operations 3 074.5 2 483.7 2 538.0 2 352.3 2 036.3Discontinued operations – (494.3) (159.7) 211.4 417.4

EBITDA (adjusted for impairments) 3 434.9 2 188.5 2 809.7 2 680.0 2 473.1Continuing operations 3 434.9 2 605.1 2 575.2 2 474.5 2 055.7Discontinued operations – (416.6) 234.5 205.5 417.4

Statements of financial position R millionTotal shareholders’ funds 9 444.5 9 172.4 7 883.1 7 190.6 5 739.1 Retirement benefit obligation 1 855.7 2 008.4 2 173.0 2 193.1 1 618.3 Deferred tax and other non-current liabilities 267.1 390.8 503.5 811.5 663.8 Non-current loans and borrowings 6 202.1 4 212.0 4 753.3 3 249.5 1 350.9 Current liabilities 6 334.4 8 623.9 6 578.2 6 179.2 5 152.0

Total equity and liabilities 24 103.8 24 407.5 21 891.1 19 623.9 14 524.1

Property, plant and equipment 10 573.4 11 025.7 9 864.3 7 835.3 6 640.0 Intangibles 4 043.4 4 118.6 3 419.5 814.5 715.1 Other non-current financial assets and deferred tax 154.7 222.4 414.0 455.7 (486.8)Current assets 9 332.3 9 040.8 8 193.3 10 518.4 7 655.8

Total assets 24 103.8 24 407.5 21 891.1 19 623.9 14 524.1

Cash flow R millionCash generated from operations 2 825.3 1 726.5 2 740.1 2 484.1 2 262.2Cash retained from operating activities 890.4 (1 457.8) 419.5 (103.4) 134.5Additions to property, plant, equipment and intangibles (1 443.6) (2 195.2) (2 620.1) (1 447.2) (1 084.2)Net increase/(decrease) in cash 4 162.5 (1 535.2) (3 653.1) 1 944.9 (659.8)

Share performanceMarket price per share

Highest cents 2 820 4 885 4 154 3 780 2 970 Lowest cents 1 635 2 572 4 001 2 809 1 992 Year-end cents 1 944 2 580 4 113 3 121 2 860

Number of ordinary shares in issue ‘000 688 668 702 497 700 708 697 897 696 712Market capitalisation R million 13 388 18 124 28 820 21 781 19 926Volume of shares traded ‘000 979 569 437 360 388 869 496 327 260 793Value of shares traded R million 8 304.2 13 055.2 24 525.0 16 082.8 6 342.8Volume of shares traded as a percentage of total issued shares % 142.2 62.3 55.5 71.1 37.4Earnings yield % 5.5 7.1 5.7 6.6 6.7Dividend/cash distribution yield % – 5.2 3.7 4.5 4.5 Price/earnings ratio times 18.1 14.2 17.5 15.2 15.0

Exchange ratesRand/UK pound

Average 21.07 18.56 17.54 14.49 12.71Closing 17.80 20.97 18.33 16.25 13.39

Rand/EuroAverage 16.43 13.77 14.36 12.19 10.46Closing 15.42 15.50 14.27 13.59 10.68

Rand/US dollarAverage 14.79 12.02 10.58 9.28 8.06Closing 13.72 13.86 11.30 10.05 8.29

Naira/US dollarAverage 229.60 191.21 161.77 158.75 159.54Closing 315.00 199.00 163.70 161.77 157.31

Kwanza/US dollarAverage 161.57 114.52 100.76 96.33 95.14Closing 171.72 140.06 101.21 100.56 95.33


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Audit committee report

IntroductionThe audit committee presents its report for the financial year ended 30 September 2016. The committee has discharged all its responsibilities and carried out all the functions assigned to it in terms of section 94(7) of the Companies Act, No 71 of 2008, and as contained in the committee’s charter.

MembershipShareholders appointed four members to the committee for the 2016 financial year at the annual general meeting on 3 February 2016. The current members are as follows:

Name Date of first appointment

CWN Molope (chairperson)* 1 June 2007

RC Andersen 21 November 2008

NV Lila 27 March 2014

IN Mkhari 27 March 2014

* Mrs Molope will step down as a member of the audit committee at the company’s annual general meeting on 1 February 2017.

Shareholders will be requested to approve the appointment of committee members for the 2017 financial year at the annual general meeting to be held on 1 February 2017. Following the decision of the chairperson to step down on 1 February 2017, the board has recommended that the remaining three members of the committee be re-elected by shareholders. A communication will be sent to shareholders in due course about the election of a fourth member to the committee.

The CVs of the committee members and their attendance at committee meetings can be found on page 69 and pages 74 and 75 of the 2016 integrated report.

MeetingsThe committee meets at least twice per year and during the year under review the committee met six times. Out of the six meetings which were held, three were special committee meetings which considered Nampak Glass capitalisation and depreciation of furnace 3. The group chairman, chief executive officer (CEO), chief financial officer (CFO), internal auditors and external auditors all attend meetings of the committee by invitation. At its meetings, the committee reviews the group’s financial results, receives and considers reports from the internal and external auditors on the results of their work and attends generally to its responsibilities. The committee also meets separately with the internal and external auditors to obtain assurance that they have received full cooperation from management, while the committee chairperson meets regularly with key executives to review issues which require consideration by the committee.

Role of the committeeThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/content/documents/about/audit-committee-charter.pdf. The responsibility of the committee includes:•• the nomination for appointment as auditor of the company of a registered auditor who, in the opinion of the committee, is independent of the company;

•• the determination of the fees to be paid to the auditor and the auditor’s terms of engagement;

•• the determination of the nature and extent of any non-audit services which the auditor may provide to the company;

•• the pre-approval of any proposed contract with the auditor for the provision on non-audit services to the company;

•• the evaluation of the performance of the external auditor;•• the review and evaluation of the effectiveness of the internal controls of the group (with reference to the findings of both the internal and external auditors);

•• monitoring and supervising the effective function of internal audit;•• the appointment, performance assessment and dismissal of the chief internal audit executive;

•• the review of the annual financial statements, the interim reports and any other announcement regarding the group’s results or other financial information to be made public;

•• review of the process for financial reporting;•• monitoring compliance with laws and regulations, material pending litigation, material defalcations, risk management, insurance covers, important accounting issues and specific disclosures in the financial statements; and

•• review and evaluation of the expertise and experience of the CFO.

Discharge of responsibilitiesDuring the year under review the committee:•• reviewed the interim and annual financial statements and recommended them for approval by the board;

•• reviewed the integrated report for 2016 and recommended it for approval by the board;

•• reviewed and satisfied itself that the company’s finance function was adequately resourced by people with appropriate expertise and experience and that the internal financial controls were effective;

•• satisfied itself that the CFO, Mr Glenn Fullerton, has appropriate expertise and experience;

•• resolved to continue to outsource the internal audit function to EY during the financial year;

•• approved the internal audit plans;•• received and reviewed reports from both the internal and external auditors, which included commentary on effectiveness of the internal control environment, systems and processes and, where appropriate, made recommendations to the board;


•• reviewed the independence of the external auditors, Deloitte & Touche, and recommended them for appointment at the annual general meeting as auditors for the 2017 financial year, with Mr Trushar Kalan as the designated auditor. Mr Trushar Kalan was initially appointed as the individual registered auditor during the financial year ended 30 September 2015;

•• ensured that the appointment of the external auditors complied with the provisions of the Companies Act, No 71 of 2008, and other legislation relating to the appointment of auditors;

•• determined the fees to be paid to the external and internal auditors and their terms of engagement;

•• determined the nature and extent of non-audit services which may be provided by the external auditors and pre-approved the contract terms for the provision of non-audit services by the external auditors;

•• noted that it had not received any complaints, from within or outside the company, relating to the accounting practices and internal audit of the company, to the content or auditing of its financial statements, or any related matter;

•• was responsible for the oversight of financial reporting risks, internal financial controls, fraud risks as it relates to financial reporting and IT risks as it relates to financial reporting; and

•• reviewed with management legal and regulatory matters that could have a material impact on the group.

GeneralThe internal and external auditors have unrestricted access to the committee.

During the year, the committee performed the functions required of an audit committee on behalf of all subsidiary companies in South Africa which are required to have an audit committee in terms of the Companies Act, No 71 of 2008.

CWN Molope Chairperson of the audit committee

21 November 2016


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To the shareholders of Nampak LimitedThe accompanying summarised consolidated financial statements set out on pages 48 to 58 , which comprise the summarised consolidated statement of financial position as at 30 September 2016, the summary consolidated statements of financial position, comprehensive income, changes in equity and cash flows for the year then ended, and related notes, are derived from the audited annual consolidated financial statements of Nampak Limited for the year ended 30 September 2016. We expressed an unmodified audit opinion on those annual consolidated financial statements in our report dated 21 November 2016. Our auditor’s report on the audited annual consolidated financial statements contained an Other Matter paragraph “Other reports required by the Companies Act” (included below).

The summarised consolidated financial statements do not contain all the disclosures required by the International Financial Reporting Standards and the requirements of the Companies Act of South Africa as applicable to annual financial statements. Reading the summarised consolidated financial statements, therefore, is not a substitute for reading the audited annual consolidated financial statements of Nampak Limited.

Directors’ responsibility for the summarised consolidated financial statementsThe directors are responsible for the preparation of the summarised consolidated financial statements in accordance with IAS 34: Interim Financial Reporting and the requirements of the Companies Act of South Africa and for such internal control as the directors determine is necessary to enable the preparation of the summarised consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on the summarised consolidated financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing 810: Engagements to Report on Summary Financial Statements.

OpinionIn our opinion, the summarised consolidated financial statements derived from the audited annual consolidated financial statements of Nampak Limited for the year ended 30 September 2016 are

consistent, in all material respects, with those annual consolidated financial statements, in accordance with the IAS 34: Interim Financial Reporting and the requirements of the Companies Act of South Africa as applicable to summarised financial statements.

Other reports required by the Companies ActThe “other reports required by the Companies Act” paragraph in our audit report dated 21 November 2016 states that as part of our audit of the annual consolidated financial statements for the year ended 30 September 2016, we have read the directors’ report, the audit committee’s report and the company secretary’s certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited annual consolidated financial statements. These reports are the responsibility of the respective preparers. The paragraph also states that, based on reading these reports, we have not identified material inconsistencies between these reports and the audited annual consolidated financial statements. The paragraph furthermore states that we have not audited these reports and accordingly do not express an opinion on these reports. The paragraph does not have an effect on the summarised consolidated financial statements or our opinion thereon.

Deloitte & Touche Registered AuditorsPer: Trushar KalanPartner

21 November 2016

Buildings 1 and 2Deloitte PlaceThe Woodlands Office ParkWoodlands DriveWoodmeadSandton

River Walk Office Park41 Matroosberg RoadAshley GardensPretoria

Independent auditor’s report on the summarised consolidated financial statements

National executive: *LL Bam Chief Executive, *AE Swiegers Chief Operating Officer, *GM Pinnock Audit,*N Sing Risk Advisory, *NB Kader Tax, TP Pillay Consulting, S Gwala BPaaS, *K Black Clients & Industries,*JK Mazzocco Talent & Transformation, *MJ Jarvis Finance, *M Jordan Strategy, *MJ Comber Reputation & Risk*TJ Brown Chairman of the Board

A full list of partners and directors is available on request. *Partner and Registered Auditor

B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code

Member of Deloitte Touche Tohmatsu Ltd


The directors of the company are responsible for the preparation and integrity of the summarised consolidated annual financial statements and related financial information included in this report, The annual financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards and the requirements of the Companies Act, No 71 of 2008, and incorporate full and responsible disclosure in line with the accounting philosophy of the group.

The directors are responsible for the internal controls and management enables the directors to meet these responsibilities. Adequate accounting records and internal controls and systems have been maintained to provide reasonable assurance on the integrity and reliability of the financial statements and to adequately safeguard, verify and maintain accountability for the group’s assets. Such controls are based on established policies and procedures and are implemented by trained personnel with appropriate segregation of duties.

The board is responsible for ensuring that the company maintains a sound and effective system of internal control and risk management. The audit committee assessed the effectiveness of the system of internal control and risk management for the year under review,

principally through self-assessment by, and information from, management and reports from the internal and external auditors. Based on these processes and reports the board is of the opinion that the company’s system of internal control and risk management is effective and provides reasonable assurance on the integrity and reliability of the financial statements and the safeguarding of the company’s assets.

It is the responsibility of the independent auditors to report on whether the summarised consolidated financial statements are fairly presented in accordance with the applicable financial reporting framework.

The summarised consolidated annual financial statements of the year ended 30 September 2016, set out on pages 50 to 58 , were approved by the board of directors at its meeting on 21 November 2016 and are signed on its behalf by:

TT Mboweni A de RuyterChairman Chief executive officer

Directors’ responsibility for annual financial statementsfor the year ended 30 September 2016

The summarised consolidated annual financial statements have been prepared under the supervision of GR Fullerton CA(SA).

GR FullertonChief financial officer

Preparer of financial statements

In terms of section 88(2)(e) of the Companies Act, No 71 of 2008, I certify that the company has lodged with the Commissioner all such returns and notices required by the Companies Act and that all such returns and notices are true, correct and up to date.

NP O’BrienCompany secretary

Certificate by company secretary


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Summarised consolidated statement of financial positionat 30 September 2016

Notes2016

R million2015

R million

ASSETSNon-current assetsProperty, plant and equipment and investment property 10 573.4 11 025.7Goodwill and other intangible assets 4 043.4 4 118.6Joint ventures, associates and other investments 27.7 44.1Deferred tax assets 70.6 145.3Other non-current assets 56.4 33.0

14 771.5 15 366.7

Current assetsInventories 3 376.7 3 890.6Trade receivables and other current assets 3 109.0 3 404.4Tax assets 11.2 12.0Bank balances, deposits and cash equivalents 8 2 835.4 1 587.4

9 332.3 8 894.4Assets classified as held for sale – 146.4

Total assets 24 103.8 24 407.5

EQUITY AND LIABILITIESCapital and reservesShare capital 35.4 36.1Capital reserves (121.4) (405.0)Other reserves 51.0 1 061.7Retained earnings 9 238.5 8 109.6

Shareholders’ equity 9 203.5 8 802.4Non-controlling interest 241.0 370.0

Total equity 9 444.5 9 172.4Non-current liabilitiesLoans and borrowings 6 202.1 4 212.0Retirement benefit obligation 1 855.7 2 008.4Deferred tax liabilities 230.1 329.2Other non-current liabilities 37.0 61.6

8 324.9 6 611.2

Current liabilitiesTrade payables, provisions and other current liabilities 4 937.7 4 418.6Bank overdrafts 8 993.4 3 672.3Loans and borrowings 329.4 446.8Tax liabilities 73.9 86.2

6 334.4 8 623.9

Total equity and liabilities 24 103.8 24 407.5


Summarised consolidated statement of comprehensive incomefor the year ended 30 September 2016

Notes2016

R million2015

R million

CONTINUING OPERATIONSRevenue 19 138.9 17 291.3

Operating profit 3 2 162.8 1 681.4Finance costs (527.5) (316.6)Finance income 42.0 37.6Share of profit/(loss) from joint ventures and associates 0.1 (3.8)

Profit before tax 1 677.4 1 398.6Tax (expense)/benefit (199.1) 57.5

Profit for the year from continuing operations 1 478.3 1 456.1

DISCONTINUED OPERATIONSLoss for the year from discontinued operations 6 – (394.8)

Profit for the year 1 478.3 1 061.3Other comprehensive (expense)/income, net of taxItems that will not be reclassified to profit or lossNet actuarial loss from retirement benefit obligations (491.0) (9.6)Items that may be reclassified subsequently to profit or lossExchange differences on translation of foreign operations (509.4) 774.6(Loss)/gain on cash flow hedges (34.3) 56.8

Other comprehensive (expense)/income for the year, net of tax (1 034.7) 821.8

Total comprehensive income for the year 443.6 1 883.1

Profit/(loss) attributable to:Owners of Nampak Ltd 1 610.4 1 043.2Non-controlling interest in subsidiaries (132.1) 18.1

1 478.3 1 061.3

Total comprehensive income/(expense) attributable to:Owners of Nampak Ltd 572.6 1 794.0Non-controlling interest in subsidiaries (129.0) 89.1

443.6 1 883.1

Continuing operationsBasic earnings per share (cents) 254.5 228.3Diluted earnings per share (cents) 253.9 225.6

Headline earnings per share (cents) 107.6 208.2Diluted headline earnings per share (cents) 107.3 205.7

Continuing and discontinued operationsBasic earnings per share (cents) 254.5 165.6Diluted earnings per share (cents) 253.9 163.7

Headline earnings per share (cents) 107.6 182.1Diluted headline earnings per share (cents) 107.3 179.9

Dividend per share (cents) – 134.0


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2016R million

2015R million

Opening balance 9 172.4 7 883.1Net shares issued during the year 28.9 74.9Share-based payment expense/(income) 13.9 (2.6)Share grants exercised (28.8) (75.0)Share of movement in associate’s and joint venture’s non-distributable reserve 0.9 0.6Non-controlling interest realised on disposal of subsidiary – 2.6Shares repurchased and cancelled (0.8) –Treasury shares disposed 384.2 –Transfer from hedging reserve to related assets – (4.9)Increase in non-controlling interest on consolidation of Zimbabwe associates – 356.8Total comprehensive income for the year 443.6 1 883.1Dividends paid (569.8) (946.2)

Closing balance 9 444.5 9 172.4

Comprising:Share capital 35.4 36.1Capital reserves (121.4) (405.0)

Share premium 250.7 221.9Treasury shares (557.9) (827.6)Share-based payments reserve 185.8 200.7

Other reserves 51.0 1 061.7Foreign currency translation reserve 1 494.9 2 017.8Financial instruments hedging reserve 18.8 53.1Recognised actuarial losses (1 466.6) (975.6)Share of non-distributable reserves in associates and joint ventures 3.7 4.5Available-for-sale financial assets revaluation reserve – (38.3)Other 0.2 0.2

Retained earnings 9 238.5 8 109.6

Shareholders’ equity 9 203.5 8 802.4Non-controlling interest 241.0 370.0

Total equity 9 444.5 9 172.4

Summarised consolidated statement of changes in equityfor the year ended 30 September 2016


Notes2016

R million2015

R million

Cash generated from operations before working capital changes 2 264.0 2 395.1Working capital changes 561.3 (668.6)

Cash generated from operations 2 825.3 1 726.5Net interest paid (521.4) (376.4)Income from investments – 7.4Retirement benefits, contributions and settlements (161.0) (364.9)Tax paid (201.3) (151.6)Replacement capital expenditure (475.7) (1 352.6)

Cash flows from operations 1 465.9 (511.6)Dividends paid (575.5) (946.2)

Net cash generated from/(utilised in) operating activities 890.4 (1 457.8)Expansion capital expenditure (951.7) (771.0)Proceeds on disposal of businesses 6 – 1 982.7Proceeds from sale and leaseback transaction 1 701.1 –Other investing activities 142.0 124.7

Net cash generated/(utilised) before financing activities 1 781.8 (121.4)Net cash raised from/(repaid in) financing activities 2 380.7 (1 413.8)

Net increase/(decrease) in cash and cash equivalents 4 162.5 (1 535.2)Net overdraft at beginning of year 8 (2 084.9) (681.0)Cash acquired on consolidation of Zimbabwe associates – 44.1Translation of cash in foreign subsidiaries (235.6) 87.2

Cash and cash equivalents/(net overdraft) at end of year 8 1 842.0 (2 084.9)

Summarised consolidated statement of cash flowsfor the year ended 30 September 2016


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Notes to the summarised consolidated financial statementsfor the year ended 30 September 2016

1. Basis of preparationThe summarised consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports, and the requirements of the Companies Act of South Africa applicable to summarised financial statements. The Listings Requirements require preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Financial Pronouncements as issued by the Financial Reporting Standards Council, and to also, as a minimum, contain the information required by IAS 34: Interim Financial Reporting.

The summarised consolidated financial statements have been prepared under the supervision of the chief financial officer, G Fullerton CA(SA).

2. Accounting policies and computation methodologyThe accounting policies applied in the preparation of the consolidated financial statements for 2016, from which the summarised financial statements were derived, are in terms of IFRS and are consistent with the accounting policies adopted and methods of computation used in the preparation of the previous year’s consolidated financial statements except for the depreciation method applied to plant in the Bevcan operations and the remeasurement of trading profit as defined (note 3).

Change in accounting estimateAs of 1 October 2015, the group changed its method of depreciating plant and equipment at its Bevcan operations from the straight-line method to the units of production method, as it was felt that the latter method reflects more appropriately the pattern of the consumption of the future economic benefits embodied in the assets concerned. In accordance with IAS 16: Property, Plant and Equipment, this is a change in an accounting estimate and is therefore applied prospectively in terms of IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors. The impact of the change in depreciation method for the year ended 30 September 2016 is a decrease in the depreciation expense of R122.0 million.

Remeasurement of trading profitDuring the year, the group reassessed its disclosure of gains and losses arising from the translation of financial instruments. Previously, all gains and losses arising from the translation of financial instruments were regarded as not being part of the normal trading activities of the group and therefore recognised as “abnormal” gains and losses ie outside of trading profit as defined below (note 3). Following this reassessment, only losses on the translation of financial instruments arising from the illiquidity in Angola and Nigeria were regarded as “abnormal” and have been disclosed as such, while other translation gains and losses were now regarded as being part of the group’s normal trading activities and have therefore been recognised as being part of trading profit. Consequently, trading profit from continuing operations for the comparative period has been restated to R1 839.6 million from R1 820.5 million, with the trading profit for all segments for segmental reporting purposes being impacted.

2016R million

2015R million

3. Included in operating profit are:Depreciation 863.1 758.7 Amortisation 48.6 43.6 Reconciliation of operating profit and trading profit1

Operating profit 2 162.8 1 681.4 Net abnormal (gain)/loss2 (257.7) 158.2

Profit on disposal of property subject to sale and leaseback (1 318.9) –Profit on disposal of other property (15.2) (102.5)Profit on disposal of investments (3.5) –Devaluation loss arising from Angolan and Nigerian illiquidity 681.0 160.5Net impairment losses on property, plant, equipment, intangible assets, investments and shareholder loans 360.4 121.4Retrenchment and restructuring costs 34.1 77.3Gain on revaluation and consolidation of Zimbabwe associates – (124.2)Business acquisition-related costs 4.4 25.7

Trading profit 1 905.1 1 839.61 Trading profit is the main measure of profitability used for segmental reporting purposes.2 Abnormal (gains)/losses are defined as (gains)/losses which do not arise from normal trading activities or are of such size, nature or incidence that their

disclosure is relevant to explain the performance for the year.


4. Sale and leaseback transactionThe group entered into a sale and leaseback transaction for the sale and leaseback of 15 of its industrial properties in South Africa effective 1 September 2016.

The selling prices of the properties were determined by an independent valuer and confirmed through a comprehensive market review. The future lease payments are similar to past rentals paid by the operations to the corporate services segment of the group. Overall the transaction is positive for headline earnings per share (HEPS).

Fourteen of the properties were leased for a period of fifteen years with an option to renew the lease agreements for one additional period of 10 years, and an option to repurchase the properties at market related prices on termination of the lease agreements. One property was leased for a period of three years. Escalation of lease payments is provided for in the agreements at inflation-related rates.

In terms of the lease agreements, the group remains responsible for all maintenance, insurance, rates and taxes (“triple net” lease).

2016R million

2015R million

Disposal of properties subject to the transactionNet proceeds on disposal of properties* 1 701.1 –Net carrying value of properties disposed (382.2) –

Profit on disposal of properties 1 318.9 –

Future minimum lease payments2017 145.9 –2018 – 2021 681.1 –2022 onwards 2 709.5 –

Total 3 536.5 –

* Transaction proceeds were R1 744.0 million which included one property sold outright for R12.0 million; transaction costs incurred were R30.9 million.

5. Business combinationsIn the previous financial year, the group consolidated Hunyani Holdings Ltd (Hunyani) and Megapak Zimbabwe (Pvt) Ltd (Megapak) with effect from 1 December 2014. These entities, situated in Zimbabwe, were previously recognised as associates and equity accounted as such. The revaluation of the group’s original interest in Hunyani and Megapak resulted in gains of R14.2 million and R9.3 million respectively.

As part of this process, the group restructured its subsidiary, CarnaudMetalbox Zimbabwe Ltd, and Megapak under Hunyani, and Hunyani was renamed Nampak Zimbabwe Ltd. The transaction also involved the group increasing its effective interest in the Nampak Zimbabwe Ltd group to 51.43%.

2016R million

2015R million

Fair value of previously held interests – 184.9Plus: Non-controlling interests recognised – 356.8Less: Fair value of identifiable net assets acquired – (642.4)

Gain arising on consolidation – (100.7)


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6. Disposal of operationsAn agreement for the sale of Nampak’s 50% shareholding in, and loans to, Sancella SA (Pty) Ltd was entered into on 21 July 2015, with the transaction being effective 1 December 2015. The proceeds from the sale were applied to settle the outstanding loan balances.

The loans had been impaired to the amount expected to be recovered in terms of the transaction as at 30 September 2015 and no further loss was recognised on the recovery of the net carrying values of these loans on the effective date of the transaction.

During the previous year, the group disposed of the following businesses:•• Nampak Corrugated and Nampak Tissue businesses effective 1 April 2015;•• Nampak Flexibles and Nampak Recycling businesses effective 1 July 2015;•• Nampak Sacks business effective 29 September 2015.

The above disposals are consistent with the group’s strategy of exiting its non-core and underperforming businesses.

The results of the discontinued operations included in the statement of comprehensive income are set out below.

2016R million

2015R million

Results of the discontinued operations for the yearRevenue – 3 385.7Expenses – (3 560.7)

Loss before tax – (175.0)Attributable income tax benefit – 8.1

– (166.9)

Loss on disposal of operations – (350.2)Attributable income tax benefit – 122.3

– (227.9)

Loss for the year from discontinued operations – (394.8)

Proceeds on disposal of the discontinued operationsFair value of net assets disposed – 2 331.3 Non-controlling interest released – 2.6 Goodwill disposed – 34.0 Loss on disposal of operations – (350.2)

Total disposal consideration – 2 017.7 Less: Deferred sales proceeds – (35.0)

Net inflow on disposal – 1 982.7

7. Determination of headline earnings

2016R million

2015R million

Continuing operationsProfit attributable to equity holders of the company for the year 1 610.4 1 438.0 Less: Preference dividend (0.1) (0.1)

Basic earnings 1 610.3 1 437.9 Adjusted for:

Net impairment losses on property, plant, equipment, intangible assets and investments 360.8 121.4 Net profit on disposal of investments (3.5) – Gain on revaluation and consolidation of Zimbabwe associates – (124.2)Profit on disposal of property subject to sale and leaseback (1 318.9) – Net loss/(profit) on disposal of other property, plant, equipment and intangible assets 6.8 (102.8)Tax effects and non-controlling interests 25.4 (21.2)

Headline earnings for the year 680.9 1 311.1

Notes to the summarised consolidated financial statements continuedfor the year ended 30 September 2016


7. Determination of headline earnings continued

2016R million

2015R million

Continuing and discontinued operationsProfit attributable to equity holders of the company for the year 1 610.4 1 043.2 Less: Preference dividend (0.1) (0.1)

Basic earnings 1 610.3 1 043.1 Adjusted for:

Net impairment losses on property, plant, equipment, intangible assets and investments 360.8 121.4 Net (profit)/loss on disposal of investments and businesses (3.5) 350.2 Gain on revaluation and consolidation of Zimbabwe associates – (124.2)Profit on disposal of property subject to sale and leaseback (1 318.9) – Net loss/(profit) on disposal of other property, plant, equipment and intangible assets 6.8 (99.2)Tax effects and non-controlling interests 25.4 (144.4)

Headline earnings for the year 680.9 1 146.9

8. Cash and cash equivalents/(net overdraft) at end of yearBank balances, deposits and cash equivalents* 2 835.4 1 587.4 Bank overdrafts (993.4) (3 672.3)

1 842.0 (2 084.9)

* Cash equivalents include US dollar indexed Angolan kwanza bonds of R617.4 million (2015: Nil).

9. Carrying amount of financial instrumentsThe carrying amounts of financial instruments as presented on the statement of financial position are measured as follows:At fair value – level 2Financial assets – 178.2

Derivative financial assets – 178.2 Financial liabilities 40.7 75.3

Derivative financial liabilities 40.7 75.3 At costFinancial assets – 12.7

Investments – 12.7At amortised costFinancial assets 5 789.7 4 608.4

Non-current financial assets 56.4 33.0 Trade receivables and other current assets (excluding prepayments) 2 897.9 2 865.8 Bank balances, deposits and cash equivalents 2 835.4 1 587.4 Assets classified as held for sale* – 122.2

Financial liabilities 12 152.9 12 433.4 Non-current loans and borrowings 6 202.1 4 212.0 Trade payables and other current liabilities (excluding provisions) 4 628.0 4 102.3 Bank overdrafts and current loans 1 322.8 4 119.1

* Current portion of loan to Sancella SA (Pty) Ltd.


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10. Supplementary information

2016R million

2015R million

Capital expenditure 1 443.6 2 195.2 Expansion 951.7 771.0 Replacement 475.7 1 352.6 Intangibles 16.2 71.6

Capital commitments 454.4 1 500.1 Contracted 276.3 727.2 Approved not contracted 178.1 772.9

Lease commitments (including sale and leaseback transaction) 3 759.5 175.6 Land and buildings 3 732.2 150.6 Other 27.3 25.0

Contingent liabilities 83.6 64.2 Customer claims and guarantees 6.7 14.8 Tax contingent liabilities 76.9 49.4

11. Share statisticsOrdinary shares in issue (‘000) 688 668 702 497 Ordinary shares in issue – net of treasury shares (‘000) 639 884 630 057 Weighted average number of ordinary shares on which basic earnings and headline earnings per share are based (‘000) 632 667 629 726 Weighted average number of ordinary shares on which diluted earnings and diluted headline earnings per share are based (‘000) 634 335 637 369

12. Translation reserve movementDue to the strengthening of the rand towards the end of the financial year, a translation loss of R509.4 million (2015: R774.6 million gain) was recognised for the year. The key closing exchange rates at 30 September were $1: R13.72 (2015: $1: R13.86) and £1: R17.80 (2015: £1: R20.97).

13. Related-party transactionsGroup companies, in the ordinary course of business, entered into various purchase and sale transactions with associates, joint ventures and other related parties. The effect of these transactions is included in the financial performance and results of the group.

14. Independent auditor’s opinionThe auditors, Deloitte & Touche, have issued their opinion on the consolidated financial statements for the year ended 30 September 2016. The audit was conducted in accordance with International Standards on Auditing. They have issued an unmodified audit opinion. These summarised financial statements have been derived from the group financial statements and are consistent in all material respects with the consolidated financial statements. Copies of their audit reports are available for inspection at the company’s registered office. Any reference to future financial performance included in this announcement, has not been reviewed or reported on by the company’s auditors.

Notes to the summarised consolidated financial statements continuedfor the year ended 30 September 2016


Operational review – Metals

Key developments • Completed Bevcan recapitalisation, improved operational efficiency in South Africa • Recorded lower Bevcan South African volumes • Faced difficulties in repatriating cash from Angola and Nigeria, where manufacturing facilities ran well • DivFood grew food can volumes and rationalised diversified can offering; improved profitability • DivFood completed the first phase of the recapitalisation programme

2016 2015 % change

Key natural capital inputs:

Energy use (GJ) 1 543 075 1 619 509 (5)

Outputs affecting natural capital:

Emissions intensity (t/CO2e/Rm revenue) 18.37 21.27 (14)

Financial capital:

Revenue (R million) 10 510 9 933 6

Trading profit (R million) 1 285 1 203 7

Trading margin (%) 12.2 12.1 –

Human capital:

Employees 3 314 3 364 (1)

LTIFR 0.40 0.57 Improved

Bevcan is the largest manufacturer of beverage cans in Africa, and the only producer of these in southern Africa, as well as in Angola, where we continue to grow our market share. We have production facilities in South Africa, Angola and Nigeria. Our cans represent more than a third of the market in both Nigeria and East Africa. Operating from five sites, DivFood manufactures two- and three-piece tinplate food cans, and a number of diversified tinplate cans. We are the only producer of aluminium monobloc aerosol cans and two-piece tinplate cans in South Africa. Some 60% of our sales go to the food industry. In the diversified part of our business, tinplate aerosol cans, monobloc aerosols, paint cans and polish cans are the major product categories.

Erik Smuts Group executive: Bevcan

Christiaan BurmeisterGroup executive: DivFood

60

62

64

66

68

70

72

Metal packaging collected for recycling in South Africa (% of tonnes consumed)

2012

64.5%

65.8%

65.8%

70.2%

2013 2014 2015

Source: Packaging SA. Latest data.


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South Africa – BevcanIn 2016, we completed the recapitalisation of Bevcan South Africa, commissioning on time and below budget the last of our new aluminium beverage can lines, as well as a beverage can ends line. This reflects delivery on the Nampak strategic imperative to invest to compete. We launched a comprehensive operations excellence initiative, targeting improvements in operational efficiencies, safety, people development, supply chain management and planning, as well as in our brand and marketing.

We reaped the early rewards of this project, recording significant improvements in the operational performance of our Springs facility, as well as a 40% reduction in the LTIFR (lost-time injury frequency rate). This, along with a number of management changes, is helping with the delivery of our strategic imperative to improve business performance by buying better, making better and selling better.

In a challenging macro-economic environment, demand for our products was erratic: good growth in the first few months of the financial year thanks to the higher-than-usual summer temperatures was followed by an unusually sharp contraction during the late summer and the winter months.

For the year as a whole, volumes fell by 5.4%. The impact on consumer spending of subdued economic activity accounted for around half of this decline, while the rest was a result of the cessation of our beverage can exports from South Africa to Angola, where we had installed a second production line at the end of our 2015 financial year. The effect of the decline in volumes in South Africa was, however, offset by the operational efficiencies and cost reductions we achieved in the year.

Leveraging learnings from previous installations, in July 2016 we installed our Rosslyn facility’s second high-speed aluminium can line. This line performed ahead of expectations. Spoilage, traditionally associated with the commissioning of a new line, was at acceptable levels and we look forward to further improvements in the year ahead. In anticipation of the commissioning of the second line, we closed down the Rosslyn lines that produced so-called slim and slender cans. We started manufacturing these cans out of aluminium at Springs, where we moved closer to benchmark levels of spoilage.

In August 2016, we completed the expansion in Springs of our beverage can ends plant, the operational performance of which was pleasing. The expansion added two billion ends per annum to the existing can ends manufacturing facility with the new volumes destined primarily to our can manufacturing businesses in Angola and Nigeria.

Our aluminium cans weigh on average 60% less than those made of tinplate. Lines that produce aluminium cans consume 17% less energy per can than those that produce tinplate cans. As the end product is lighter, these lines also contribute to reduced transport costs. Our investment in these facilities demonstrates our commitment to a more sustainable and infinitely recyclable form of packaging.

We still operate two tinplate lines, one in Durban and the other in Cape Town. In the year, in line with our strategic imperative to manage costs stringently, we concluded consultations with trade unions and affected parties about the planned closure of the Durban facility. As far as possible, we worked to redeploy skills from this facility to other Bevcan operations. The line’s closure, planned for 15 December 2016, will result in a saving in 2017 of R30 million, rising to R40 million in the years that follow.

We benefited from the support of Nampak Research and Development and our technology agreement with Crown. Nampak R&D continued to work on trials of thinner gauge aluminium for beverage cans and ends, as well as on development work on BPA-NI (Bisphenol-A not intentionally added) coating systems. We maintained world-class operating systems at our facilities, retaining certification under the relevant ISO quality, food safety and environmental standards.

South Africa – DivFoodAt DivFood, we improved our operational and financial performance in the year. A significant amount of management’s attention was devoted to the commissioning of numerous capital projects. We also closed the diversified packaging factory in Epping in the Western Cape. These projects were executed largely on time and in budget, while maintaining satisfactory customer service during the changeover.

We continued to focus on safety, with increased emphasis on behaviour-based interventions. Our overall safety performance improved and we recorded a LTIFR of 0.4 for the year. However, the improvement was overshadowed by a high-voltage explosion at our Mobeni factory in Durban on 1 August 2016. Four people were injured, including two contractors. Due to the seriousness of his injuries, tragically one contractor, Jacques van der Berg, passed away some weeks later. The safety and skills of people are material issues at Nampak.

Our capital programme, aligned to the strategic imperative to invest to compete, was aimed at replacing ageing equipment with energy-efficient and technologically advanced machinery to be able to convert the latest generation of thin-gauge tinplate and operate at higher efficiencies. This contributed towards leaner production units and will enhance our competitive position and profitability into the future.

Despite a challenging economic environment, demand for fish cans grew strongly as the industry processed more imported frozen fish in local cans and the importation of filled product declined. Demand for cans for processed meat expanded at a rate ahead of GDP growth and we gained some market share in the fruit canning sector in the year. Demand for vegetable cans was steady.

Our efforts to simplify the business were focused mainly on the diversified product range, customer base and operating models. In line with the strategic imperative to actively manage our portfolio, we closed our Epping plant, with the loss of 47 jobs, and centralised paint can manufacturing in Mobeni. Even though volumes reduced on the back of rationalisation efforts, profitability improved. Tinplate aerosol volumes were steady, while domestic demand for monobloc aerosols grew. Paint volumes declined by 23% on the back of the rationalisation programme and packaging for the small oil can category was largely converted to plastic packaging.

We further developed and stabilised our imported supply of tinplate and reported sustained improvements in the quality and service of our local tinplate supply. Nampak R&D continued to play an important role in supporting DivFood. Significant areas of support were the qualification of imported tinplate; product support for our cans and customer products; field services such as hygiene audits and can handling audits; education on best practice in canning; shelf life studies and thermal processing work. Our plants are all certified under the relevant ISO environmental, quality and food safety standards.

Operational review – Metals continued


Looking aheadIn the short term, continued pressure on consumer spending is likely to limit growth in beverage can volumes. However, consolidation among Bevcan’s customers in the carbonated soft drinks (CSD) sector is potentially good for growth in our volumes. Some 90% of our production volumes are secured in long-term contracts, which guarantee an annual per unit saving to customers from more efficient production capacity as well as volume growth.

We will continue to monitor closely developments in the policy environment, including the proposed tax on sugar-sweetened beverages.

In the year ahead, as part of our continuous improvement journey Bevcan will continue to work to reduce costs and focus on improving cash generation through stringent working capital management. Our investment in the latest technology, our low cost structure, internationally competitive pricing and long-term agreements with customers mean that we are well positioned to defend our market share should long-mooted competition in the sector materialise.

With the first phase of the recapitalisation programme behind us, in the year ahead DivFood will direct more attention to inventory and supply chain optimisation as well as the improvement of our planning processes. In line with the strategic imperative to manage working capital prudently, we anticipate working capital benefits as well as efficiency improvements from these interventions. Realising the opportunity presented by more efficient equipment will be a further area of focus in the year ahead and we would expect our efforts with regard to operational excellence to support an overall improvement in quality and productivity as well as spoilage levels.

Rest of Africa – Beverage cansIn the face of significant economic headwinds, Bevcan’s operations in oil-dependent Angola and Nigeria performed satisfactorily. By signing up new customers, both gained a greater share of markets that were hit hard by the dramatic decline in crude oil prices, which led to reduced government revenues and waning economic activity.

A sharp depreciation of the kwanza and naira resulted in significant translation losses on local cash and debtor balances. We also faced difficulties in repatriating cash amid a shortage of foreign currency. Restricted cash in Angola and Nigeria is a material issue for Nampak, and is discussed in detail on page 28 and 29 .

In Angola, demand for beverage cans fell sharply. However, the start of our contract to supply a large local customer (previously reliant on imported beverage cans) helped limit the decline in our overall production volumes to 3.3%. We also supplied a number of smaller local beverage producers.

Our second production line, which makes aluminium beverage cans, operated above expectations. Because of the slowdown in economic activity, we took steps to cut overhead costs, particularly those related to the first line, which produces cans made of tinplate. We plan to convert the first line to aluminium once economic conditions improve.

Angola, a nation of some 26 million people, represents a major growth opportunity for Nampak, and the work we are doing in Luanda is in line with our strategic objective to accelerate growth in the Rest of Africa.

In Nigeria, even though the market was broadly flat, we grew our volumes as we gained market share at existing customers, in line with contractual commitments. We recorded good production efficiencies and acceptable levels of spoilage. To supplement our energy requirements, we used LPG and diesel generators. The country’s shortage of foreign currency made trading conditions extremely difficult, but there was a slight improvement from June when the government eased foreign exchange regulations and committed to making 60% of the available foreign currency available to the manufacturing industry.

In both Angola and Nigeria, we completed certification under the relevant ISO quality and food safety standards. In Nigeria, we are also certified for our environmental management systems, and are currently undergoing similar certification in Angola.

Rest of Africa – Other metal packagingIn a depressed Nigerian economy, demand was weak at the start of the year, but showed signs of recovery in the second half, led by the substitution of imports with locally produced goods amid a shortage of hard currency available for foreign imported products and production constraints at opposition companies.

In Kenya, we experienced a difficult year in the general food can market due to weaker agricultural harvests, particularly in pineapples and green beans, which are major product sectors. This was also aggravated by the increased self-manufacture of certain can sizes by our major customer.

The regional demand for crowns across Tanzania, Zimbabwe and Zambia remained stable.

In the year we disposed of our share in the metals operation in Mozambique. This was a small operation manufacturing only metal crowns and the small local market did not provide sufficient critical mass to justify further investment to remain sustainably competitive.

Looking aheadDespite the continued pressure in the short term on consumer spending in Nigeria and Angola, we remain optimistic about the longer-term outlook for our Bevcan businesses in these countries. Should oil prices and output stabilise, we expect a recovery in demand in 2018/2019.

In Nigeria the share of beverage cans in the overall packaging offering is still lower than international norms, with room to grow. We will consider installing a second production line when market conditions improve, but are not planning any large capital expenditure in the short term. Similarly, in Angola, we will convert the first tinplate production line to aluminium once economic activity expands.

Bevcan’s major focus in the short term is on overcoming the liquidity constraints in both Nigeria and Angola, where we have developed good relationships with the relevant authorities.

In Kenya, we will continue to grow the crowns business as well as printed pilfer-proof metal closures following our recent capacity expansions for both products. We anticipate a continuation of the recovery of metals demand in Nigeria as customers and general producers look at opportunities to manufacture more product locally.


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Operational review – Glass

Rob MorrisGroup executive: Glass

Key developments • Significantly improved operational efficiencies • Turned around business performance and profitability • Grew the wine market in partnership with Verallia, a leading French wine bottle producer

2016 2015 % change

Key natural capital inputs:Energy use (GJ) 2 137 609 2 022 160 6

Limestone (t) 36 600 33 675 9Silica sand (t) 133 139 120 657 10

Soda ash (t) 39 312 35 077 12

Outputs affecting natural capital:Emissions intensity (t/CO2e/Rm revenue) 145.15 211.80 (31)

Financial capital:Revenue (R million) 1 323 877 51

Trading profit (R million) 105 (81) >100

Trading margin (%) 7.9 (9.2) –

Human capital:Employees 435 402 8


Nampak Glass is the smaller of the two container glass manufacturers in South Africa and has a market share of approximately 25%. We operate three furnaces at our site southeast of Johannesburg. With installed capacity of 285 000 tonnes, our bottles make up approximately 18% of the beer sector’s volumes, 25% of flavoured alcoholic beverages, 15% of wine and 67% of the spirits market.


37

38

39

40

41

42

43

Glass packaging collected for recycling in South Africa (% of tonnes consumed)

2012

39.2%

39.8%

38.9%

41.0%

2013 2014 2015


South AfricaNampak Glass recovered well in 2016, recording improved operational efficiencies, increased production and sales volumes and consequently a turnaround in profitability. We reported a better safety performance and continued use of waste glass, or cullet, as an important component of our raw material input.

Supported by demand from the wine and flavoured alcoholic beverages (FABS) sectors, the South African glass market started to pick up after a number of years of decline, which had primarily been the result of the substitution of glass in the carbonated soft drink (CSD) market with plastics. The glass pack share in the beer segment stabilised and was still dominated by the 750ml returnable bottle. The market for FABS – mainly cider – continued to grow, with glass remaining the primary pack for this sector.

Nampak Glass’s production volumes increased by 19%, supporting the increased sales and also building stock to comfortable levels. We completed our stock build to an acceptable 90 days. We reported trading profit of R105 million, from a trading loss of R81 million in 2015. The trading margin was 7.9% (2015: (9.2%)), helped by the cost benefits of efficiency improvements and general improved cost control.

In line with our strategic imperative to improve business performance by buying, making and selling better, we oversaw a number of interventions in processes, systems and in the plant in the year. These addressed many of the technical concerns recently experienced across our three furnaces and resulted in a return of the furnace efficiencies to acceptable levels.

Apart from upgrades in the bottle-forming process, we implemented new software systems and processes in the forecasting and planning arena as well as in bottle design and forming simulation. This assisted in reducing job and process changes by nearly 30%, to reduce the overall level of complexity in the plant and to ensure that the range of products we produced was better aligned to our production capability.

As a result, production was stable, safe and reliable, and feedback from the market on quality and services was extremely positive.

The optimisation and increase in the use of cullet is a major focus area. This is in addition to numerous incremental energy-saving initiatives, including a lighting optimisation project that reduced our electrical energy requirements by around 1 megawatt. We also worked on a number of water-saving initiatives, studying the feasibility of becoming a zero-effluent-discharge plant by increased recycling of process water.

We are in the process of commissioning new cullet-sorting technology that will enable cullet to be colour sorted to a much finer level, facilitating an increase in the usage of mixed cullet that we procure from glass recyclers. We continued to participate in The Glass Recycling Company (TGRC), which is a voluntary industry initiative supported by glass packaging manufacturers and the majority of food and beverage brand owners in South Africa. It is funded exclusively by the levies paid by these stakeholders. TGRC is well positioned to submit industry waste management plans in

response to proposed new legislative requirements. In 2015, 41% of all glass packaging consumed in South Africa was collected for recycling.

We reported a vastly improved safety performance, with LTIFR reducing to 0.79 from 2.01 in 2015. We consider the wine market in South Africa a major growth sector where Nampak is underrepresented. To ensure a more comprehensive offering to this market, in the year we entered into a sales and distribution agreement with Verallia, a major French wine bottle producer. Nampak now sells Verallia bottles in South Africa that complement our offering, and are of a size and specification not manufactured locally.

We continued to make use of the services of Nampak Research and Development, which constitute a key competitive advantage, offering our customers the necessary support when designing new products, or investigating the cause of any contamination their customers may experience. In the year we retained certification of our glass operations for environmental and energy management standards, as well as those for food safety.

Looking aheadFollowing significant advances in 2016, Nampak Glass now has an acceptable level of stock, and our service and quality to the market has significantly improved. A lack of consumer demand and confidence means that the outlook for the South African glass market remains subdued.

We are working to increase our sales to the Cape wine sector, where demand for our products is rising off a low base and is being supported by greater bottled wine exports to the United Kingdom and Europe.

In June 2016, the Southern African Customs Union and the European Union signed an agreement which will allow South Africa to export 110 million litres of wine to Europe a year, more than double the previous duty-free quota of 48 million litres. Initially, 70% of the quota will be directed to packaged wines, increasing in due course.

We also see opportunity to grow our exports of glass products to the Rest of Africa. This is aligned to our strategic imperative to sensibly manage and grow our presence in current jurisdictions by building a market base through exports from South Africa.

Rest of AfricaWe continue to see medium-term opportunity to invest in glass-making facilities in the Rest of Africa. The three most attractive markets for potential investment are Nigeria, Ethiopia and Angola. We are currently continuing with feasibility studies as we are confident in the long-term growth opportunities, but are being circumspect as the current macro-economic environment in these countries remains unstable. This prevents any such investments in the near term, and any decisions will only be taken once conditions improve.


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Operational review – Plastics

Rob MorrisGroup executive: Rest of Africa

Nampak has 20 plastics facilities in South Africa, running 226 lines. We make HDPE plastic bottles mainly for milk and juice; PET bottles and preforms for juice, CSDs and water; and paper gable-top cartons for sorghum beer, mageu and extended-shelf-life milk. We produce drums and intermediate bulk containers for bulk alcohol and chemicals; closures for CSD bottles, milk bottles and cartons, and sports drinks; tubes for toothpaste; and crates for beverages, bakeries, dairies and the agriculture market. Nampak Plastics Europe operates 10 facilities producing HDPE bottles, mostly for the dairy and juice markets, in the United Kingdom and the Republic of Ireland. In the Rest of Africa, we have preform, crate and closure businesses in Zimbabwe, Ethiopia and Nigeria.

Mxolisi Khutama Group executive: Plastics

Key developments • Put foundations in place for enhanced operational performance • Progressed with turnaround of underperforming plants • Focused on driving increased capacity utilisation through market diversification • Targeted investment in capacity to grow with our customers and recapitalisation to improve productivity and efficiencies

• In Europe, we recorded lower turnover and profits in a highly competitive market

2016 2015 % change

Key natural capital inputs:

Energy use (GJ) 720 003 646 169 11

Outputs affecting natural capital:

Emissions intensity (t/CO2e/Rm revenue) 25.28 26.45 (4)

Financial capital:

Revenue (R million) 5 557 5 011 11

Trading profit (R million) 392 362 8


Human capital:

Employees 2 036 2 000 2

LTIFR 0.67 1.53 Improved40

41

42

43

44

45

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Plastic packaging collected for recycling in South Africa (% of tonnes consumed)

2012

40.9%

43.2%

44.7%

45.6%

2013 2014 2015



South AfricaIn 2016, we made good progress in our work to strengthen the operations in the South African plastics business: we are enhancing the visibility of our operational performance, refining our working capital management and better monitoring our operational efficiencies. Together, these will facilitate a sustained improvement in our overall performance in the long term.

The market proved challenging, with the drought depressing milk production and hence sales of bottles; liquidity issues in the Rest of Africa affecting the uptake of drums; and consumer demand slowing down.

Despite the pressure on volumes, revenue increased by 2.9% and profits improved. This was as a result of an improved product mix, greater efficiencies and a successful turnaround of our plastics closures and crates businesses.

The implementation of our seven-pillar safety approach went well. We reported a significant reduction in the number of incidents, with our LTIFR coming down by 79%, achieving our target of 0.5. We continue to ensure that risks are adequately appraised, mitigation action is formulated and implemented and we follow our rules and procedures. We aim to ensure that no employee gets injured on duty. Zero harm is possible and remains a high priority.

In line with our strategic objective to unlock further value from our base business, we enhanced operations at our key facilities. We gave greater attention to maintenance as well as to standardising our systems for efficiency monitoring and reporting. As plant reliability improved, we were able to secure additional sales, largely mitigating the impact of economic headwinds.

We adopted a sales and operations planning framework as part of our drive to achieve operations excellence. At select plants, we rolled out an automated manufacturing monitoring system, developed in-house by our facility in Westmead, Pinetown. This system allows operators to view the efficiency of each machine, in terms of quality, production, waste and other operational performance metrics.

Liquid packaging – HDPE and PET bottles, drums and cartonsThe drought had a mixed impact on the production of plastic bottles: high summer temperatures lifted our customers’ water and juice sales, and hence demand for our bottles, but led to lower milk production and therefore reduced milk bottle sales.

The greater promotion by producers of UHT long-life packaging continued to limit growth in sales of fresh milk, which is traditionally packaged in HDPE bottles. Preform sales picked up as CSD volumes grew, supported by the hot weather.

As part of efforts for greater operational efficiencies and to support our customers’ growth, we commissioned a number of new pieces of machinery. In July 2016, we brought on line equipment to produce up to 36 million PET water bottles a year for a customer in Gauteng. In our drum business in this province, in August 2016 we commissioned a new line to blow-mould up to 400 000 drums a year, mainly for the agricultural chemicals market.

Towards year-end we brought on stream a new aseptic HDPE packaging line for a large producer of mageu, a non-alcoholic fermented beverage. This segment continues to expand at a rate in excess of the general beverage market.

Liquidity constraints in a number of countries north of South Africa’s borders led to pressure on the sale of drums, many of which are used for bulk alcohol exports to the rest of the continent. However, volumes began to pick up towards year-end.

Demand for paper cartons from the juice and extended-shelf-life milk sectors remained good, but a slowdown in the sorghum beer industry led to a reduction in the total volumes of these cartons that are made in our factory in Isithebe, KwaZulu-Natal.

Closures, tubes and cratesOur crate business benefited from the commissioning in May 2016 of a new injection-moulding line to produce up to one million crates a year. This is part of our turnaround drive in this business. We also invested in equipment, commissioned in July 2016, to produce 85 million new-generation sports drink closures a year.

Nampak Research and Development continued to make good progress on the design of lighter-weight plastic containers, thereby reducing the consumption of raw materials as well as the volumes of post-consumer packaging waste. We embarked on a project to reduce the weight of our crates as well as that of specific plastic closures. We believe this has great process and cost benefits for both Nampak and our customers. Another significant benefit of this intervention is the fulfilment of our promise to reduce, reuse and recycle: less material is used in the process of making crates, bottles and closures and less energy is required to transport lighter-weight products.

Nampak Plastics offers the latest developments in technology, trends and innovation to enhance the value of our customers’ products and brands. Our strong R&D innovation capability, along with our in-plant technology expertise, one-stop offering and excellent customer support are among our key competitive advantages.

Looking aheadAfter a year of considerable advances on many fronts, in 2017 we will align our organisational structure to focus on building the capacity of our business, improving coordination in the market, and standardising our products and practices.

In the next five years, we expect the South African rigid plastic market to expand at a compound annual growth rate of 3.5%. By 2020, we are targeting above-inflation growth, with a widening of our trading margin to above 10%.

We will achieve this through our clear plan to become the preferred and best value packaging partner and supplier in the market, serving the beverage, dairy, household chemicals, personal care and industrial segments. We will grow and defend our market segments; establish best cost and quality leadership; develop an integrated partnership approach and achieve technical excellence.


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As more than a third of our lines are more than 20 years old, we see opportunity to introduce the latest-generation technology through a multi-year investment programme of R200 to R300 million. Given that a number of the projects initiated in 2016 will deliver in the new financial year, we look forward to a positive 2017.

Rest of AfricaOur plastics business in the Rest of Africa performed well in the year, where we invested in additional capacity for preforms and plastic closures in Zimbabwe and Nigeria.

Megapak Zimbabwe had a good year, thanks to strong sales of new closures and the solid performance of our preform lines that supply the sorghum beer industry. In Zimbabwe, this sector favours rigid plastics packaging as opposed to the preference for cartons in other countries in the region.

In Ethiopia, the newly commissioned crate line ran well. While the demand was good, we faced significant regulatory administrative issues related specifically to banking and foreign exchange. This made sourcing of a sustained raw material supply difficult and hampered production; however, we resolved these challenges by year-end.

In Nigeria, demand for Nampak closures was healthy, helped by the substitution of imported product with locally manufactured goods.

Looking aheadWe are considering further rigid plastics investments in Zambia, Zimbabwe and Tanzania in 2017 to cater for increased demand both in new and existing markets. Buoyed by increased demand, we plan to expand our Nigerian closure business in the year ahead with additional moulds.

Liquidity issues in Zimbabwe remain a concern.

United Kingdom and Republic of IrelandHeightened competition in the dairy market, coupled with challenges in starting up two new production sites, led to a difficult year for Nampak Plastics UK, a reduction in profitability as well as management changes.

We launched various cost-cutting initiatives, including those aimed at optimising our energy use and our distribution costs. To reduce our reliance on producing HDPE bottles for the struggling British dairy industry, we started work on developing a number of potential opportunities in the manufacture of alternative plastics in addition to HDPE bottles in other sectors, including some outside the borders of the United Kingdom.

We also advanced our work to secure more opportunities to licence out our patented light-weighting technology, building on agreements already in place in Australia and New Zealand. Safety remains at the forefront of the business in a very regulated market and we reported a pleasing reduction in injury rates.

We closed our factory at Consett in north east England, but opened one in Ballitore, Republic of Ireland and another small plant near Stirling, Scotland. Establishing these two new production facilities cost more than planned because of delays in securing industrial power supply to one site and start-up project management challenges at the other. Plans and actions are underway to ensure both are firmly under control.

Looking aheadIn the year ahead, under new leadership the business will look at opportunities for growth outside our traditional markets as well as step up turnaround plans. The business remains a generator of cash, holder of valuable intellectual property as well as a rand hedge. For the 2016 financial year, the closing rand/pound exchange rate was R17.80 from R20.97 a year earlier.

Operational review – Plastics continued


Operational review – Paper

Rob MorrisGroup executive: Rest of Africa

Key developments • Increased revenue and trading profit across most regions despite tough macro-economic environment

• Benefited from import substitution in many markets amid a shortage of hard currencies

Nampak’s Paper businesses are in Nigeria, Zimbabwe, Kenya, Zambia and Malawi. We supply a range of sectors, from milling, cigarettes and tobacco to the sorghum beer industry. In most of these markets we are the major player. Among our extensive product range are cartons, sacks, bags, board and boxes.

2016 2015 % change

Key natural capital inputs:Energy use (GJ) 152 760 144 568 6

Outputs affecting natural capital:Emissions intensity (t/CO2e/Rm revenue) 5.75 8.88 (35)

Financial capital:Revenue (R million) 1 749 1 470 19

Trading profit (R million) 236 211 12


Human capital:Employees 702 741 (5)


Rest of AfricaNampak’s paper operations, all of which are in African countries beyond the borders of South Africa, had a mixed year. Revenue improved by 19% and trading profit rose 12%, benefiting from the improved performance in Nigeria, the consolidation in Zimbabwe of the Hunyani divisions as well as the consolidation of Bullpak, which was previously a joint venture. We delivered a very creditable safety performance, with an LTIFR of 0.2.

In Kenya, demand for self-opening bags for the milling industry was reasonably stable. Even though a number of competitors have recently entered this market, Bullpak had another good year.

Notwithstanding the current macro-economic problems, demand for cigarette packaging in Nigeria was buoyant, particularly in the second half. However, demand for general commercial paper packaging remained subdued.

Sorghum beer carton sales in Zambia were weak, as a result of both generally depressed demand and the substitution of paper cartons into rigid plastic packaging formats. Our financial results in this market were also affected by the highly volatile exchange rate in the year.

Even though Zimbabwe experienced very difficult macro-economic conditions and there were concerns about customers’ liquidity, our paper operations in that country performed well. This was thanks to a reasonable crop of tobacco, which is packaged in large corrugated boxes. Our performance was also assisted by the greater substitution of imports with locally produced products as well as our cost-saving initiatives, in line with the strategic imperative to manage costs stringently.

In Malawi, sales to the sorghum beer industry remained strong and we had a good year operationally. A higher tobacco crop contributed to increased tobacco case sales in the second half.

Looking aheadIn the year ahead, we expect the market for paper to remain buoyant in the Rest of Africa markets. The restrictions on imported products in Nigeria and Zimbabwe are expected to further encourage the local sourcing of packaged goods. In Zambia, we expect an improved sorghum beer carton performance on the back of a number of interventions. Liquidity constraints in Nigeria and Zimbabwe remain a concern.


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In the year under review Nampak complied with all the corporate

governance requirements of the JSE Limited. A statement of how

the company has applied the principles of King III is set out in the

full corporate governance report on the company’s website ,

while a statement of the exceptions where the company elected not

to comply with the principles of King III appears on page 73 .

King IV released in November 2016 will be applicable to Nampak

for the financial year ending 30 September 2018.

Governance framework and structureThe diagram below is a simple overview of the corporate

governance structure at Nampak.

General meeting of shareholders

Board of directors

Audit committee

External auditor

Appoints Appoints

Appoints

Risk and sustainability committee

Investment committee

Nomination committee

Social, ethics and transformation

committee

Remuneration committee

Group executive committee

Board of directorsThe board is made up of an appropriate combination of executive

and non-executive directors who have suitable academic

qualifications and diverse experience, race and genders. All

non-executive directors are considered independent. For the

biographical details of directors, and their length of tenure, see

pages 74 to 76 , where graphs also provide details of the board’s

representation by race and gender.

Mrs DC Moephuli and Mrs CWN Molope have indicated their

intention to step down as non-executive directors of the company

immediately prior to commencement of the annual general meeting

(“AGM”) on 1 February 2017 due to pressure of other commitments

and Mrs Molope has indicated that she will also not make herself

available for re-election as chairperson of the audit committee.

The board agreed to recommend the election of Mr RC Andersen as

chairman of the audit committee to replace Mrs Molope. A further

announcement will be made in due course about the appointment of

a new non-executive director and the recommended election of a

fourth member to the audit committee.

The board is responsible for the strategic direction of the group,

while also maintaining control over all material matters affecting

the group.

In the year under review, the board reviewed the independence

status of all the non-executive directors and considered them all to be

independent. In particular, the board reviewed the independence

and performance of Dr RJ Khoza, who completed 10 years of

service as a non-executive director on 30 September 2016. The

board concluded that Dr Khoza’s independence of character and

judgement was not in any way affected by his length of service and

that his service was of considerable benefit to the company.

The performance of the chairman is assessed by the board every

second year and will next be assessed in 2017. No one director

has unfettered power of decision making.

How we are governed to create value

Nampak’s board of directors is committed to ensuring that the group adheres to the highest standards of corporate governance in the conduct of its business. The group’s structures and processes are adapted from time to time to reflect best practice standards.


The positions of chief executive officer (CEO) and chairman are

separated, with responsibilities divided between them for matters

affecting the board and management. The division of responsibilities

ensures a balance of power and authority. The chairman leads the

board and ensures that all relevant information is placed before it for

decision. The CEO is responsible for the operation of the businesses,

the development of strategy and the submission of business plans and

budgets to the board for consideration.

All directors, other than the CEO and chief financial officer (CFO),

are subject to retirement and re-election by shareholders every three

years. The CEO and CFO are not subject to this during the periods

of their service contracts. Re-election takes place on a staggered

basis to ensure continuity, but reappointment is not automatic.

The appointments of new directors are subject to confirmation

by shareholders at the first annual general meeting after their

appointment.0 1 2 3 4 5 6

Board

TT Mboweni

RC Andersen

E Ikazoboh

RJ Khoza

NV Lila

PM Madi

FV Tshiqi

PM Surgey

CWN Molope

DC Moephuli

IN Mkhari

AM de Ruyter

GR Fullerton

■ Held ■ Attended Average 91%

Meetings attended

Board committeesThe board is assisted in the discharge of its duties by a number of committees, details of which are set out below:

Audit committee

Members Date of appointment Meetings attended





* Mrs Molope will step down as a member of the audit committee at the company’s AGM on 1 February 2017.

Role, purpose and principal functionsThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/Content/Documents/About/audit-committee-charter.pdf.

Strategic focus for the year under review•• Considered deleveraging of the group’s balance sheet •• Considered the sale and leaseback of property transaction•• Considered liquidity issues in Nigeria and Angola•• Considered the JSE report on monitoring financial statements•• Considered the Nampak dividend policy•• Considered impairment of Angolan tinplate line

0 1 2 3 4 5 6 7



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How we are governed to create value continued

Investment committee


RC Andersen (chairman) 1 January 2014

AM de Ruyter 1 January 2014

GR Fullerton 1 September 2015

E Ikazoboh 27 March 2014

PM Madi 1 January 2014


DC Moephuli* 1 January 2014

* Mrs DC Moephuli will step down as a member of the investment committee at the company’s AGM on 1 February 2017.

Role, purpose and principal functionsThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/Content/Documents/About/investment-committee-charter.pdf

Strategic focus for the year under review•• Considered the sale and leaseback of property transaction•• Reviewed the Nampak Glass furnace 3 project•• Considered Glass opportunities in both Nigeria and Ethiopia•• Considered Plastics opportunities in Europe•• Considered the Nampak debt covenant position and rand volatility



TT Mboweni (chairman) 1 June 2010

RC Andersen 20 July 2009

RJ Khoza 1 February 2011

PM Surgey 29 July 2009

Role, purpose and principal functionsThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/Content/Documents/About/nomination-committee-charter.pdf

Strategic focus for the year under review•• Considered board and executive succession planning and personal development•• Considered non-executive director independence and rotation•• Monitored implementation of action plans from the board evaluation process•• Reviewed the induction programme

0 1 2

E Ikazoboh

AM de Ruyter

PM Madi

IN Mkhari

DC Meophuli

RC Andersen

GR Fullerton


TT Mboweni

RC Anderson

PM Surgey

RJ Khoza


0 1 2 3




PM Surgey (chairman) 29 July 2009

RC Andersen 20 July 2009

TT Mboweni 1 June 2010

Role, purpose and principal functionsThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/Content/Documents/About/remuneration-committee-charter.pdf

Strategic focus for the year under review•• Reviewed remuneration policy with independent external consultants (PwC)•• Approved a medium-term incentive scheme to replace the short-term incentive scheme for 2017 and 2018•• Reviewed defined benefit obligations and strategies to manage the liability

See the remuneration committee report on page 78 .

Risk and sustainability committee


NV Lila (chairperson) 3 November 2015

AM de Ruyter 1 January 2014

GR Fullerton 1 September 2015

PM Madi 12 November 2009

DC Moephuli* 1 October 2010

PM Surgey 1 October 2010

Ex officio: CWN Molope* as chairperson of the audit committee

11 May 2009

* Mrs Moephuli and Mrs Molope will step down as members of the risk and sustainability committee on 1 February 2017.

Role, purpose and principal functionsThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/Content/Documents/About/risk-and-sustainability-charter.pdf

Strategic focus for the year under review•• Reviewed group key risks, mitigations and monitored the implementation of mitigation activities•• Approved risk appetite and tolerance levels for 2016

0 1 2 3 4

PM Surgey

RC Anderson

TT Mboweni


NV Lila

AM de Ruyter

DC Meophuli

PM Surgey

CWN Molope

GR Fullerton

PM Madi


0 1 2


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How we are governed to create value continued

Mrs DC Moephuli was unable to attend all the board and relevant sub-committee meetings due to her commitments at Transnet where she is a full-time employee.

Professor PM Madi was unable to attend all the board meetings and relevant sub-committee meetings due to other commitments.

Mr E Ikazoboh was unable to attend all the board meetings and relevant sub-committee meetings due to other commitments in Nigeria where he resides.

Group executive committeeThe group executive committee is constituted to assist the CEO in managing the business of the group, subject to authority limits delegated to the CEO and the group executive committee in terms of the group’s authority policy. The committee assists the CEO in guiding and controlling the overall direction of the business of the group and acts as a medium of communication and coordination between divisions, group companies and the board. The composition of the committee is as follows:

Members Position

AM de Ruyter Chief executive officer

C Burmeister Group executive: DivFood and R&D

GR Fullerton Chief financial officer

M Khutama Group executive: Plastics

RG Morris Group executive: Africa and Glass

EE Smuts Group executive: Bevcan

FV Tshiqi Group human resources director

NP O’Brien Group executive: Legal, secretarial and insurance

Company secretaryThe company secretary operates on an arm’s-length basis from the board and is not a member of the board. All directors have access to the advice and services of the company secretary. The company secretary is responsible for preparing meeting agendas and recording minutes of board meetings and for ensuring that sound corporate governance procedures are followed. During the year under review the board declared itself satisfied with the competence, qualifications and experience of Neill O’Brien as company secretary.

Board, committee and director evaluationsThe board has decided that formal appraisals of the board, its committees and directors, will be conducted every second year and the next appraisal will take place in 2017.

ComplianceNampak is committed to conducting its business in compliance with all applicable laws and regulations and with honesty in its dealings with customers, employees, suppliers, shareholders and the community. In pursuit of that goal Nampak maintains an effective compliance programme.

The primary purpose of the compliance programme is to detect violations of laws, regulations and company policy. Should Nampak become aware of any violations of laws, regulations or company policies, it will investigate the matter and take disciplinary action where appropriate.

Social, ethics and transformation committee


PM Madi (chairman) 9 November 2009


PM Surgey 29 September 2009

Role, purpose and principal functionsThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/Content/Documents/About/social-ethics-and-transformation-committee-charter.pdf

Strategic focus for the year under review•• Recommended transformation commitments and targets to the board for approval•• Reviewed proposals submitted by management to provide an extension to the lock-in period for active employees who remained beneficiaries in The Black Management Trust as at 31 December 2015 when the original lock-in period expired

•• Monitored the group’s performance against its code of conduct and business ethics

See the full social, ethic and transformation committee report on the website www.nampak.com.

PM Madi

IN Mkhari

PM Surgey


0 1 2


board has given the CFO overall responsibility for managing the IMS governance structures and processes. The IMS function is managed by the chief information officer (CIO), who reports to the CFO. An IMS steering committee is chaired by the CFO, and its membership comprises the CIO and the members of the group executive committee. The committee has a well-defined charter and it is responsible for overseeing IMS direction and investments, and ensuring alignment with business strategy and priorities.

Nampak’s IMS function has adopted the IT Governance Institute (ITGI) governance model, COBIT 5 (Control Objectives for Information and related Technology), as a framework for IMS governance, while continuing to employ best practice frameworks such as Information Technology Infrastructure Library (ITIL) as guidelines for establishing and maintaining effective internal controls, continuity and risk management.

In line with COBIT 5, a framework of IMS policies has been developed and adopted, taking into consideration stakeholder needs, the business imperatives, current legislation and IM trends.

Internal audit provides assurance to management, the audit committee and the risk committee on the effectiveness of IMS governance.

The group’s IMS focus remains to deliver value to Nampak through benefits realisation, resource optimisation and risk mitigation that are aligned with Nampak’s strategy and goals.

King III non-compliance

King III principles Nampak’s approach

2.22 The evaluation of the board, its committees and individual directors should be performed every year.

An in-depth evaluation of the board, its committees and individual directors is facilitated by an independent expert every second year, which the board considers to be an appropriate interval.

2.24 A governance framework should be agreed upon between the group and its subsidiary boards.

Reporting between the group and its subsidiaries is governed by internal policies and procedures and a formal governance framework is not considered essential.

6.4 The board should delegate to management implementation of an effective compliance framework and processes.

The operating entities in Nampak are required to identify laws, rules and standards that apply to the environment in which they operate and to ensure compliance therewith. The operating entities are kept abreast of legislative changes and compliance requirements from a group level.

Schedules of relevant laws and regulations are prepared and maintained for the businesses in the group. A code of conduct and business ethics lays down the standards expected of all employees, while potential violations can be reported through ‘Tip-Offs Anonymous’, which is available 24 hours a day, seven days a week.

Policies and procedures are in place to monitor compliance and to mitigate risks, to implement effective training programmes and to report to management and the board on the effectiveness of the programme. Litigation in the businesses is referred to the group legal adviser, who reports on material litigation to the risk and audit committees and to the board.

During the year there were no prosecutions of Nampak or its personnel for material violations of any laws or regulations, nor were any material penalties or fines imposed on the company or its directors or officers for contraventions of any laws or regulations.

No requests for information were lodged with the company, during the year, in terms of the Promotion of Access to Information Act, 2000.

Information management services Information management services (IMS) is an important part of Nampak’s business and is essential to the support and sustainability of the group. The King III report on corporate governance places responsibility for IMS governance with the board, and the Nampak


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Board of directors

Nampak’s board of directors is committed to ensuring that the group adheres to the highest standards of corporate governance. The board is responsible for the strategic direction of the group, while maintaining control over all material issues affecting Nampak.

Independent non-executive directors

Tito Mboweni (57)ChairmanQualifications: BA, MA, CD(SA)

Appointed: 1 June 2010

ExperienceFormer South African Minister of LabourFormer Governor of the South African Reserve Bank

Member of the national executive committee of the African National Congress since 2012

Other directorshipsAccelerate Property Fund LtdAfrican Centre for Economic Transformation (chairman)Discovery LtdMboweni Brothers Investment Holdings (Pty) LtdPPC LtdSacoil Holdings LtdThe New Development Bank BRICS

Relevant skills and expertiseStrategic leadershipEconomics

RN

Roy Andersen (68)Qualifications: CA(SA), CPA, CD(SA)

Appointed: 28 November 2008

ExperienceFormer chairman of Sanlam Ltd and Stanlib Ltd Former chief executive officer of Liberty Group Ltd

Former president of the JSE Ltd Currently a member of the King Committee on Corporate Governance

Other directorshipsAspen Pharmacare Holdings LtdSasfin Holdings Ltd (chairman)

Relevant skills and expertiseAccountingFinanceCorporate governance

Emmanuel Ikazoboh (Nigerian) (67)Qualifications: FCCA, MBA

Appointed: 1 October 2013

ExperienceChairman of the board of Ecobank TransnationalManaging director of Hedonmark

Management Services (Nigeria)Former administrator of the Nigerian Stock Exchange Former chairman and chief executive officer of Deloitte West and Central Africa

Other directorshipsARM Pension Fund Manager Ltd (chairman)Dangote Cement plcEcobank Transnational Inc (chairman)Oceanwinds Hospitality Ltd (chairman)United Nigeria Textiles plc

Relevant skills and expertiseAccountingFinance

I

Dr Reuel Khoza (67)Qualifications: BA, MA, Eng D, D of Laws honoris causa, CD(SA)


ExperienceFormer chairman of Eskom HoldingsFormer chairman of Nedbank Group Ltd Deputy chairman of the King Committee on Corporate Governance

Other directorshipsAka Capital (Pty) Ltd (chairman)Globeleq (chairman)Sasol Oil (Pty) Ltd

Relevant skills and expertiseStrategic leadershipCorporate governance

N

Nopasika Lila (47)Qualifications: CA(SA)

Appointed: 1 March 2014

ExperienceChief financial officer of the Eskom Pension and Provident FundFormer independent non-executive director of Basil Read Holdings Ltd and Johannesburg Development Agency

Other directorshipsEnx Group Ltd

Relevant skills and expertiseAccountingFinanceCorporate governance

RSA

A I RN


Independent non-executive directors committee key

N Nomination committee – Chairman: Tito Mboweni

R Remuneration committee – Chairman: Peter Surgey

A Audit committee – Chairperson: Nosipho Molope

I Investment committee – Chairman: Roy Anderson

RS Risk and sustainability committee – Chairperson: Nopasika Lila

S Social, ethics and transformation committee – Chairman: Phinda Madi

Phinda Madi (52)Qualifications: BProc, EDP


ExperienceQualified attorneyOwner of Madi Investments (a capital venture business)

Other directorshipsAllcare Medical Administrators (Pty) Ltd (chairman)Illovo Sugar LtdMadi Investments (Pty) LtdSovereign Foods LtdSpar Group Ltd

Relevant skills and expertiseStrategic leadershipEntrepreneurship

I SRS

Ipeleng Mkhari (41)Qualifications: BA


ExperienceCo-founder and chief executive officer of Motseng Investment Holdings (Pty) Ltd

Other directorshipsKap Industrial Holdings LtdMotseng Investment Holdings (Pty) LtdSouth African Property Owners Association

Relevant skills and expertiseStrategic leadership

A I S

Disebo Moephuli (52)Qualifications: BA, MBA


ExperienceChief risk officer at TransnetFormer group treasurer of TransnetHeld positions in a number of financial institutions

Other directorshipsDermatus South Africa (Pty) Ltd

Relevant skills and expertiseFinanceRisk

RSI

Nosipho Molope (52)Qualifications: BSc (Med), CA(SA)

Appointed: 1 June 2007

ExperienceFormer chief financial officer of the Financial Services Board

Other directorshipsMobile Telephone Networks (Pty) LtdMTN Uganda, Rwanda, Swaziland and ZambiaOld Mutual Life Assurance Company (South Africa) LtdOld Mutual Life Holdings (South Africa) LtdSouth 32 SA Coal Holdings (Pty) LtdToyota Financial Services South Africa Ltd

Relevant skills and expertiseAccountingFinance

RSA

Peter Surgey (62)Qualifications: BA LLB

Appointed: 29 July 2009

ExperienceFormer managing director of Plascon and chief executive officer of Barloworld CoatingsFormer board member and director of Barloworld Ltd

Served on the remuneration and audit committees of Control Instruments (Pty) Ltd and NCS Resins (Pty) Ltd

Other directorshipsEarth Probotic Industrial LtdMain Street 1416 (Pty) Ltd

Relevant skills and expertiseStrategic leadership

RS SRN


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Board of directors continued

Executive directors committee key

E Executive committee

I Investment committee

RS Risk and sustainability committee

Fezekile Tshiqi (62)Group human resources directorQualifications: BA, PGDHRM

Appointed: 29 July 2009

ExperienceVarious human resources positions at Unilever, ABI, Corobrik and Adcock Ingram Pharmaceuticals

Former human resources director at Nampak TissueFormer human resources director of Nampak Africa

Other directorshipsNone

Relevant skills and expertisePeople management and developmentEmployee relations

E

Glenn Fullerton (49)Chief financial officerQualifications: CA(SA)

Appointed: 1 September 2015

ExperienceNumerous senior finance positions at HL & H and ComputicketFormer finance director in various subsidiaries at Malbak

Former chief financial officer of MB TechnologiesFormer chief executive officer of MB Technologies


Relevant skills and expertiseFinancialStrategic leadership

André de Ruyter (48)Chief executive officerQualifications: BA, BLC, LLB, MBA

Appointed: 1 April 2014

ExperienceMore than 20 years in senior management with petrochemicals group SasolFormer member of Sasol’s group executive committee


Relevant skills and expertiseStrategic leadership in the manufacturing sector

Executive directors

E I RS

E I RS

Board tenure of chairman and non-executive directors

• • • •0 – 3 years

3 – 6 years

6 – 9 years

9+ years

3 1 5 1

100%

Independent non-executives

Independence of non-executive directors (%)

31%

69%

Black White

Diversity by race of all directors (%)

31%

69%

Men Women

Diversity by gender of all directors (%)

0 1 2 3 4 5 6 7 8

Skills and expertise of all directors

Economics

People management

Entrepreneurship

Corporate governance

Accounting and �nance

Strategic leadership

Number


Executive committee

André de Ruyter (48)Chief executive officerQualifications: BA, BLC, LLB, MBA

Relevant skills and expertiseStrategic leadership in the manufacturing sector

Glenn Fullerton (49)Chief financial officerQualifications: CA(SA)

Relevant skills and expertiseFinancialStrategic leadership

Fezekile Tshiqi (62)Group human resources directorQualifications: BA, PGDHRM

Relevant skills and expertisePeople management and developmentEmployee relations

Christiaan Burmeister (52)Group executive: DivFood and R&DQualifications: CA(SA)

Relevant skills and expertiseFinancialStrategic leadership Operational managementGeneral management

Mxolisi Khutama (40)Group executive: PlasticsQualifications: BSc Eng, PGDMM, PGDBM

Relevant skills and expertiseFinancialOperational managementBusiness developmentAdministration

Rob Morris (54)Group executive: Africa and GlassQualifications: Pr Eng, BSc Eng, BComm (Hons)

Relevant skills and expertiseGeneral managementOperational management in the Rest of AfricaStrategic leadership

Neill O’Brien (62)Company secretary and group legal adviserQualifications: BProc

Relevant skills and expertiseLegalCompany secretarialInsurance

Erik Smuts (46)Group executive: BevcanQualifications: CA(SA), ACMA, CIPM, GEDP

Relevant skills and expertiseFinancialOperational management in the Rest of AfricaGeneral managementStrategic leadership

The group executive committee assists the CEO in guiding and controlling the overall direction of the business. It also acts as a medium of communication and coordination between divisions, group companies and the board.


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Remuneration report

Aligned with shareholders’ expectations, Nampak’s remuneration is designed to facilitate delivery of the group’s strategy.

Report from the remuneration committee chairmanThis year we have followed the same approach as we did last year in presenting a shortened version of our remuneration report within the integrated report, with the full, detailed report available online at .

Within this report, we have provided a summary of the remuneration policy in the form of a detailed elements table, which sets out our policy regarding the different elements of executive and prescribed officer remuneration, including applicable performance conditions and targets, the target levels of pay and the maximum opportunity. To illustrate what remuneration is payable in different performance scenarios, remuneration mix graphs are provided which indicate the levels of pay at threshold and stretch performance.

How did we perform in 2016?Guaranteed packageModest salary increases to guaranteed packages were approved in lie with company performance which amounted to increases of 3.7% for the executive directors and prescribed officers, compared to an average of 7.7% for the rest of the company.

Short-term incentive (STI)The STI bonuses payable during the year reflect the decline in headline earnings per share, which was negatively impacted by the lack of liquidity in Nigeria and the significant currency movements against the US dollar. The emoluments table on page 88 sets out the actual STI bonuses and LTI outcomes for the year under review, and more detail can be found in the full remuneration report. Details of the individual key performance indicators and achievement against these indicators are included on page 87 of this report.

Long-term incentives (LTI)The remuneration committee reviewed performance against the LTI targets at 30 September 2016 which will result in only partial awards vesting to executive directors and prescribed officers in December 2016.

No vesting will take place for the December 2013 allocations in respect of the Performance Share Plan (PSP) and Share Appreciation Plan (SAP) for two of the three performance elements namely for the headline earnings per share and total shareholder return performance targets. The third element of the PSP linked namely the return on equity target was exceeded and therefore the award will vest for this component in December 2016. This will constitute 30% of the PSP award. Shares purchased by participants in the DBP in December 2013, as a result of STI bonus payments earned for the financial performance in 2013, will receive the matching award in December 2016.

Proposed change for 2017STI performance target for operational executivesThe financial target for operational executives for 2016 was based on trading income. In order to ensure that the operations consider the implications of unnecessary expenditure and yet retain their line of sight on trading performance, the remuneration committee has approved a change to the financial performance target for 2017. The operational executive targets will be based on EBITDA adjusted for interest.

LTI performance target for the Performance Share Plan allocationsThe financial performance conditions linked to the PSP, where the bulk of awards are made to the executive directors, prescribed officers and divisional managing directors require a real growth in headline earnings per share and a cumulative growth in total shareholder return for 70% of the awards. Up until 2016, 30% of the share awards vested against achievement of performance against return on equity targets.

The remuneration committee has approved a change to the return on equity performance targets for the December 2016 allocations and to replace this target with return on net asset targets. Equity positions can move significantly as a result of events which are outside the control of management and therefore share awards may vest or not vest based on external factors, whereas return on net assets is directly aligned with company performance.

ConclusionWe continue to engage with shareholders and welcome their inputs and contributions towards the remuneration philosophy and implementation.

In terms of King III and best practise principles the full remuneration policy as contained in the full remuneration report, published online, will be put to a non-binding shareholders’ vote at the annual general meeting of shareholders.

PM SurgeyChairman of the remuneration committee



Remuneration committeeDuring the year, the remuneration committee (the committee) performed the following activities: •• reviewed the remuneration structure after considering advice from external advisers (PwC) to ensure that it remains appropriate in terms of current best market practice

•• reviewed the guaranteed packages of the executive directors, group executive and divisional managing directors

•• reviewed performance targets applicable to the short and long-term incentives

•• established the future performance targets applicable to the short and long-term incentives

•• considered management’s recommendations for non-executive directors’ fees and the fees for the board sub-committees before recommending to the board and then to shareholders for approval

•• reviewed vesting of long-term incentives•• reviewed salary increases for all employees

Further details of committee membership and attendance can be found on page 71 of this report.

Remuneration philosophyOur remuneration philosophy remains unchanged from previous years, and continues to balance the delivery of financial and non-financial measures that underpin the group’s strategy. It supports the attraction and retention of high calibre, experienced individuals who are able to deliver under challenging conditions.How do we pay?

Generally set below the median for the executive directors and group executive committee members as well as the divisional managing directors.

Structured to encourage superior growth in earnings, divisional trading performance after deducting interest charges , divisional inventory management, employment equity and return on net assets (RONA) through the achievement of challenging performance criteria that are designed to align longer-term remuneration directly to growth in shareholder wealth. Individual performance indicators are linked to cash awards to ensure that initiatives that drive long-term sustainability are implemented.

The balance of remuneration is more heavily weighted to at-risk pay elements linked to financial and

non-financial performance criteria.

More at-risk pay aligns behaviours of the individuals and teams to deliver value in line with shareholder expectations.

Guaranteedpackage

Short-term cash incentive

Longer-term share plans

Remuneration mix: policy and actualThe graphs adjacent reflect the anticipated levels of remuneration if Nampak is below the performance target, or is above the expected performance and compared to the actual remuneration for 2016.

Executive directors and group executive committee members

0 5 000 10 000 15 000 20 000 25 000 30 000

Below expected performance (R’000)

Group exco members*

Group human resources director

Chief �nancial of�cer

■ GP ■ STI ■ LTI

Chief executive of�cer

0 5 000 10 000 15 000 20 000 25 000 30 000

Above expected performance (R’000)

Group exco members*



■ GP ■ STI ■ LTI**


0 5 000 10 000 15 000 20 000 25 000 30 000

Actual (R’000)

Group exco members*



■ GP ■ STI ■ LTI


* Average GP.** Based on the annualised maximum potential incentive. Group exco members based on maximum incentive potential applicable to the majority of Group Exco members.


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Element Description Performance conditions and targets Opportunity

Guaranteed package

Retirement funding, life cover, disability cover, personal accident insurance and medical cover are provided on a defined contribution basis and form part of the guaranteed packages.

Guaranteed package levels are recommended by the chief executive officer after taking into account individual experience, current performance and contribution, future career progression as well as resource availability.

The committee has discretion to approve guaranteed packages below or above the target percentage of the median, where specific circumstances merit a differential.

Such circumstances could include attraction and retention of a scarce skill.

There are no performance conditions directly linked to guaranteed packages. However, annual merit increases are aligned with performance management scores and contribution during the year.

The targeted level of guaranteed package for 2016 for directors, group executive committee and divisional managing directors was set at 92.5% of the average market median of the survey data.

Guaranteed pay levels below these job roles are targeted at and above the median providing for the annual cash incentive bonus awards for stretch performance to deliver upper quartile and above earnings for managers.

Annual cash incentive bonus (STI)

The STI structure for 2016 will be retained for 2017 with one change to the financial performance target for operational executives from trading income to EBITDA adjusted for interest. We explain the policy underpinning the STI below.

The STI comprises two components, combined to form the total annual STI:•• Individual performance component: individual delivery against identified strategic objectives. The individual performance targets are linked to financial and non-financial performance indicators.

•• Financial component: achievement against financial performance targets. The financial targets provide a balance between earnings growth and improvements in balance sheet ratios at a group and divisional level.

The weighting between financial performance targets and individual performance targets used to determine the quantum of STIs is as follows:

Employee or employee group

Financial component weighting

Individual performance

component weighting

AM de Ruyter 68% 32%

GR Fullerton 70% 30%

FV Tshiqi 70% 30%

Group executive committee members 60% 40%

To continue aligning the group’s employment equity strategy with directors’ remuneration, the director’s incentives earned are discounted for non-achievement of employment equity targets. For 2016 and 2017, the value attached to this discount factor is 15%.

The committee has discretion to withdraw or change the incentive bonus scheme annually and to withhold any payments if specific circumstances necessitate.

The committee holds overriding discretion on incentive bonus payments including a zero bonus, should circumstances warrant.

Individual performance targets:Individual performance targets are set and reviewed by the committee and cover progress on strategic initiatives which are considered by the board to be crucial for future growth and profitability within the group.

Financial component of the STI:Between 68% – 70% of the annual cash incentive bonus is attributable to financial performance. The percentage of the on-target amounts relating to the financial portion of the annual incentive bonus payments are calculated as follows:

Financial performance conditions for executive directors and group support staff 2016 and 2017:

Financial performance Metric Vesting profile

Stretch performance/cap

Performance measure: Headline earnings per share (HEPS)

Growth in headline earnings per share in excess of the consumer price index was the achievement at the entry level and the top end achievement was 9% above the average consumer price index

Straight line: 0% at entry level and 100% at stretch

Capped at 9% above average CPI which translates into the stretch earning potential for individual executives. Earning potential is further modified by RONA performance detailed below

Modifier: Return on net assets (RONA)

This is a gatekeeper provision and RONA performance below 11.5%, will result in no incentive under the financial component vesting.The remuneration committee is able to review the RONA threshold target in the event of material corporate and strategic activities occurring. In setting the RONA threshold targets, the remuneration committee considers prior group performance as well as the RONAs of peer-group competitors in South Africa and internationally

• Below 11.5% = 0% vesting

• 11.5% = 60% vesting

• 12% = 70% vesting

• 12.5% = 80% vesting

• 13% = 90% vesting; and

• 13.5% = 100% vesting

This performance target serves as a modifier and takes into account the short-term impact of investments on RONA

The following are the maximum potential incentives as a percentage of guaranteed package:


Total maximum potential incentive

as a percentage of guaranteed

package

AM de Ruyter 125%

GR Fullerton 105%

FV Tshiqi 95%

Group executive committee members 85% to 95%

Remuneration report continued



Guaranteed package

Retirement funding, life cover, disability cover, personal accident insurance and medical cover are provided on a defined contribution basis and form part of the guaranteed packages.

Guaranteed package levels are recommended by the chief executive officer after taking into account individual experience, current performance and contribution, future career progression as well as resource availability.

The committee has discretion to approve guaranteed packages below or above the target percentage of the median, where specific circumstances merit a differential.

Such circumstances could include attraction and retention of a scarce skill.

There are no performance conditions directly linked to guaranteed packages. However, annual merit increases are aligned with performance management scores and contribution during the year.

The targeted level of guaranteed package for 2016 for directors, group executive committee and divisional managing directors was set at 92.5% of the average market median of the survey data.

Guaranteed pay levels below these job roles are targeted at and above the median providing for the annual cash incentive bonus awards for stretch performance to deliver upper quartile and above earnings for managers.

Annual cash incentive bonus (STI)

The STI structure for 2016 will be retained for 2017 with one change to the financial performance target for operational executives from trading income to EBITDA adjusted for interest. We explain the policy underpinning the STI below.

The STI comprises two components, combined to form the total annual STI:•• Individual performance component: individual delivery against identified strategic objectives. The individual performance targets are linked to financial and non-financial performance indicators.

•• Financial component: achievement against financial performance targets. The financial targets provide a balance between earnings growth and improvements in balance sheet ratios at a group and divisional level.

The weighting between financial performance targets and individual performance targets used to determine the quantum of STIs is as follows:


Financial component weighting

Individual performance

component weighting

AM de Ruyter 68% 32%

GR Fullerton 70% 30%

FV Tshiqi 70% 30%

Group executive committee members 60% 40%

To continue aligning the group’s employment equity strategy with directors’ remuneration, the director’s incentives earned are discounted for non-achievement of employment equity targets. For 2016 and 2017, the value attached to this discount factor is 15%.

The committee has discretion to withdraw or change the incentive bonus scheme annually and to withhold any payments if specific circumstances necessitate.

The committee holds overriding discretion on incentive bonus payments including a zero bonus, should circumstances warrant.

Individual performance targets:Individual performance targets are set and reviewed by the committee and cover progress on strategic initiatives which are considered by the board to be crucial for future growth and profitability within the group.

Financial component of the STI:Between 68% – 70% of the annual cash incentive bonus is attributable to financial performance. The percentage of the on-target amounts relating to the financial portion of the annual incentive bonus payments are calculated as follows:

Financial performance conditions for executive directors and group support staff 2016 and 2017:

Financial performance Metric Vesting profile

Stretch performance/cap

Performance measure: Headline earnings per share (HEPS)

Growth in headline earnings per share in excess of the consumer price index was the achievement at the entry level and the top end achievement was 9% above the average consumer price index


Capped at 9% above average CPI which translates into the stretch earning potential for individual executives. Earning potential is further modified by RONA performance detailed below

Modifier: Return on net assets (RONA)

This is a gatekeeper provision and RONA performance below 11.5%, will result in no incentive under the financial component vesting.The remuneration committee is able to review the RONA threshold target in the event of material corporate and strategic activities occurring. In setting the RONA threshold targets, the remuneration committee considers prior group performance as well as the RONAs of peer-group competitors in South Africa and internationally

• Below 11.5% = 0% vesting

• 11.5% = 60% vesting

• 12% = 70% vesting

• 12.5% = 80% vesting

• 13% = 90% vesting; and

• 13.5% = 100% vesting

This performance target serves as a modifier and takes into account the short-term impact of investments on RONA

The following are the maximum potential incentives as a percentage of guaranteed package:


Total maximum potential incentive

as a percentage of guaranteed

package

AM de Ruyter 125%

GR Fullerton 105%

FV Tshiqi 95%

Group executive committee members 85% to 95%


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Annual cash incentive bonus (STI) continued

In order to support the drive to improve operational efficiencies, the incentive bonus structures for the operational group executives were more closely aligned to direct line of sight performance targets for 2016. These targets have been modified for 2017 to further align cash management activities.

Financial performance condition targets for operational executives 2016:

Performance category

Percentage of maximum potential incentive Vesting profile

Trading income (group excluding the United Kingdom)* 20%

Straight line: 0% at entry level and 100%

at stretch

Trading income division/s* 40%

Safety targets 10%

Reduction in inventory* 15%

Reduction in cost of overtime* 5%

Individual performance target linked to division 10%

* Self-funded as directly contribute to improved financial performance

Individual performance targets for operational executives 2017:Individual performance targets are set and reviewed by the committee and cover progress on strategic initiatives which are considered by the board to be crucial for future growth and profitability within the group.

The individual performance targets for the operational executives are split as follows:

Inventory (including improvement in spares management and maintenance practice) 15%

Safety targets 10%


Financial performance condition changes for operational executives 2017:

Financial performance categoryPercentage of maximum potential incentive Vesting profile

EBITDA adjusted for interest 60%Straight line: 0% at entry level and 100% at stretch




Annual cash incentive bonus (STI) continued

In order to support the drive to improve operational efficiencies, the incentive bonus structures for the operational group executives were more closely aligned to direct line of sight performance targets for 2016. These targets have been modified for 2017 to further align cash management activities.

Financial performance condition targets for operational executives 2016:

Performance category

Percentage of maximum potential incentive Vesting profile

Trading income (group excluding the United Kingdom)* 20%

Straight line: 0% at entry level and 100%

at stretch

Trading income division/s* 40%

Safety targets 10%

Reduction in inventory* 15%

Reduction in cost of overtime* 5%


* Self-funded as directly contribute to improved financial performance

Individual performance targets for operational executives 2017:Individual performance targets are set and reviewed by the committee and cover progress on strategic initiatives which are considered by the board to be crucial for future growth and profitability within the group.

The individual performance targets for the operational executives are split as follows:

Inventory (including improvement in spares management and maintenance practice) 15%

Safety targets 10%


Financial performance condition changes for operational executives 2017:

Financial performance categoryPercentage of maximum potential incentive Vesting profile

EBITDA adjusted for interest 60%Straight line: 0% at entry level and 100% at stretch


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Performance Share Plan (PSP)

The PSP provides for the granting of performance share awards to executive directors and group executive committee members on an annual basis.

Vesting of shares is conditional upon the group achieving specific stretch targets which are set by the committee at commencement of the three-year performance period.

The performance periods commence on 1 October each year and end on 30 September three years later. Shares are allocated in the December immediately after commencement of the performance period in order to avoid allocations during closed periods and to provide time for the stock markets to adjust to the published results.

In order to align participant reward with shareholders’ returns and to support retention strategies, one third of the shares are released and vest immediately on the vesting date, the second one-third a year after the vesting date and the final one-third two years after the vesting date or five years from the original award date.

Additional shares are awarded on the release dates which equate to the dividends that were earned on the vested shares during the performance period.

Performance conditions for 2016 awards in respect of headline earnings per share and total shareholder return targets (consistent with 2015 awards)Proposed performance targets and their weightings for allocations together with the performance conditions for the awards are reflected below:

Financial performance and weighting Metric Vesting profile Stretch performance

Cumulative total shareholder return (TSR) (30% of the vesting achievement)

Improvement in cumulative TSR in excess of the consumer price index of between 9% and 24% over the three-year performance period


Capped at 24% above average CPI which translates into the stretch earning potential for individual executives

Headline earnings per share (40% of the vesting achievement)

Improvement in headline earnings per share in excess of consumer price index on a linear basis between 0% and 24% over the three-year performance period



Return on equity (30%) of the vesting achievementPerformance condition for 2015 awards

Absolute ROE performance of between 15.5% and 17.5% at the end of the three-year performance period

• 15.5%= 60% vesting

• 16% = 70% vesting• 16.5% =

80% vesting• 17% =

90% vesting; and• 17.5% = 100%

Capped at a ROE of 17.5% which translates into the stretch earning potential for individual executives

Proposed performance condition for 2016 awards to replace ROEReturn on net assets (30%) of the vesting achievement

Absolute RONA performance of between 11.5% and 13.5% at the end of the three-year performance period. The remuneration committee is able to review the RONA target in the event of material corporate and strategic activities occurring after setting the RONA targets.

• 11.5% = 60% vesting

• 12% = 70% vesting• 12.5% = 80%

vesting• 13% = 90%

vesting; and• 13.5% = 100%

vesting

Capped at RONA of 13.5% which translates into the stretch earning potential for individual executives

The indicative expected value as a percentage of guaranteed package for the December 2015 award was as follows which is in line with the policy award levels:


Expected value as percentage of guaranteed

package

AM de Ruyter 50%

GR Fullerton 40%

FV Tshiqi 30%

Group executive committee members 30%

This policy will be consistently applied to the December 2016 awards.

Share Appreciation Plan (SAP)

The SAP provides the committee with an instrument to retain executive directors and group executive committee members as well as providing the chief executive officer with a means to attract and retain talent at senior management levels within the group.

Under the SAP, a number of share appreciation rights are periodically offered to executive directors, group executive committee members and senior managers. The vesting of these rights is conditional upon the group achieving specific performance criteria.

At the end of the three-year performance period, the number of share appreciation rights that are released and vest to each participant are determined against achievement of the performance targets. The vesting structure for allocations after 2009 provides for immediate vesting if performance conditions are met and seven years from the original award date for vested options to be exercised.

Performance condition for December 2016 awards (consistent with 2015 awards)Consistent growth in headline earnings per share supports improved share price performance and forms the basis of the performance target under the share appreciation plan.

The performance target and the proposed performance condition for awards are reflected below:

Metric Vesting profile


Improvement in headline earnings per share in excess of consumer price index plus 6% over the three-year performance period

Full vesting on achievement of performance target

The expected value as a percentage of guaranteed package for the December 2015 awards were and 2016 awards are as follows which is in line with the policy award levels:



package

AM de Ruyter 15%

GR Fullerton 15%

FV Tshiqi 10%





Performance Share Plan (PSP)

The PSP provides for the granting of performance share awards to executive directors and group executive committee members on an annual basis.

Vesting of shares is conditional upon the group achieving specific stretch targets which are set by the committee at commencement of the three-year performance period.

The performance periods commence on 1 October each year and end on 30 September three years later. Shares are allocated in the December immediately after commencement of the performance period in order to avoid allocations during closed periods and to provide time for the stock markets to adjust to the published results.

In order to align participant reward with shareholders’ returns and to support retention strategies, one third of the shares are released and vest immediately on the vesting date, the second one-third a year after the vesting date and the final one-third two years after the vesting date or five years from the original award date.

Additional shares are awarded on the release dates which equate to the dividends that were earned on the vested shares during the performance period.

Performance conditions for 2016 awards in respect of headline earnings per share and total shareholder return targets (consistent with 2015 awards)Proposed performance targets and their weightings for allocations together with the performance conditions for the awards are reflected below:

Financial performance and weighting Metric Vesting profile Stretch performance

Cumulative total shareholder return (TSR) (30% of the vesting achievement)

Improvement in cumulative TSR in excess of the consumer price index of between 9% and 24% over the three-year performance period




Improvement in headline earnings per share in excess of consumer price index on a linear basis between 0% and 24% over the three-year performance period



Return on equity (30%) of the vesting achievementPerformance condition for 2015 awards

Absolute ROE performance of between 15.5% and 17.5% at the end of the three-year performance period

• 15.5%= 60% vesting

• 16% = 70% vesting• 16.5% =

80% vesting• 17% =

90% vesting; and• 17.5% = 100%

Capped at a ROE of 17.5% which translates into the stretch earning potential for individual executives

Proposed performance condition for 2016 awards to replace ROEReturn on net assets (30%) of the vesting achievement

Absolute RONA performance of between 11.5% and 13.5% at the end of the three-year performance period. The remuneration committee is able to review the RONA target in the event of material corporate and strategic activities occurring after setting the RONA targets.

• 11.5% = 60% vesting

• 12% = 70% vesting• 12.5% = 80%

vesting• 13% = 90%

vesting; and• 13.5% = 100%

vesting

Capped at RONA of 13.5% which translates into the stretch earning potential for individual executives

The indicative expected value as a percentage of guaranteed package for the December 2015 award was as follows which is in line with the policy award levels:



package

AM de Ruyter 50%

GR Fullerton 40%

FV Tshiqi 30%


This policy will be consistently applied to the December 2016 awards.

Share Appreciation Plan (SAP)

The SAP provides the committee with an instrument to retain executive directors and group executive committee members as well as providing the chief executive officer with a means to attract and retain talent at senior management levels within the group.

Under the SAP, a number of share appreciation rights are periodically offered to executive directors, group executive committee members and senior managers. The vesting of these rights is conditional upon the group achieving specific performance criteria.

At the end of the three-year performance period, the number of share appreciation rights that are released and vest to each participant are determined against achievement of the performance targets. The vesting structure for allocations after 2009 provides for immediate vesting if performance conditions are met and seven years from the original award date for vested options to be exercised.

Performance condition for December 2016 awards (consistent with 2015 awards)Consistent growth in headline earnings per share supports improved share price performance and forms the basis of the performance target under the share appreciation plan.

The performance target and the proposed performance condition for awards are reflected below:

Metric Vesting profile


Improvement in headline earnings per share in excess of consumer price index plus 6% over the three-year performance period

Full vesting on achievement of performance target

The expected value as a percentage of guaranteed package for the December 2015 awards were and 2016 awards are as follows which is in line with the policy award levels:



package

AM de Ruyter 15%

GR Fullerton 15%

FV Tshiqi 10%



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Deferred Bonus Plan (DBP)

The DBP is the third element to the share plan structure. The purpose of the DBP is to encourage executive directors and group executive committee members to use up to 50% of their after tax annual bonus, awarded at an operating level, to acquire shares in the company that are retained for three years. The incentive to do so is a matching award of the number of shares purchased and held for a three-year period on a one-for-one basis.

The plan supports retention aspects, encourages shareholding by executives and directly aligns executive experience with that of shareholders. For this reason, and also to reflect the fact that performance conditions are applied in order to determine the annual bonus payment, no performance conditions are imposed on the matching awards granted under this plan.

Up to 50% of after tax annual bonus that is awarded at operating level can be used to acquire shares in the company. The expected value varies in accordance with achievement under the STI remuneration element.


Long-term incentives – dilution and IFRS expenseThe limit placed on the total number of shares utilised for share plans has not been exceeded.

There is also a limit on the number of shares which can be allocated and remain unvested to any one individual under the three share plans. This limit, also approved by shareholders, is 2 200 000 shares and has not been exceeded.

The following share awards were granted in December 2015:

NameNumber of

SAP awarded

Market value of awards

Note 1Number of

PSP awarded

Market value of awards

Note 1

Executive directorsAM de Ruyter 140 080 – 325 850 6 389 919GR Fullerton 78 268 – 153 823 3 016 469FV Tshiqi 38 346 – 93 353 1 830 652Group executive committeeC Burmeister 38 346 – 91 533 1 794 962M Khutama 38 346 – 85 923 1 684 950RG Morris 38 346 – 98 183 1 925 369NP O’Brien 38 346 – 90 403 1 772 803EE Smuts 38 346 – 94 343 1 850 066

Note 1: VWAP at 30 September 2016 used to reflect market value of the awards.

Non-executive directors’ remunerationNon-executive directors received a base fee for their services as well as a meeting fee based on their participation in board meetings and other committees. The non-executive directors do not receive incentive bonus payments nor do they participate in any of the executive share plans. Non-executive directors are appointed by rotation in terms of Nampak’s memorandum of incorporation.

An increase of 6% in the non-executive directors’ fees and committee fees will be proposed for 2017 and the proposals are set out in the notice of annual general meeting.

Total remuneration outcomes for 2016Total emoluments paid during the year ending 30 September 2016 and for 30 September 2015 are contained in the tables on page 88. The single-figure disclosure includes all guaranteed pay, annual cash incentive bonuses and the value from all long-term incentive plans which vested (or where the performance period ended) during the year under review.



Deferred Bonus Plan (DBP)

The DBP is the third element to the share plan structure. The purpose of the DBP is to encourage executive directors and group executive committee members to use up to 50% of their after tax annual bonus, awarded at an operating level, to acquire shares in the company that are retained for three years. The incentive to do so is a matching award of the number of shares purchased and held for a three-year period on a one-for-one basis.

The plan supports retention aspects, encourages shareholding by executives and directly aligns executive experience with that of shareholders. For this reason, and also to reflect the fact that performance conditions are applied in order to determine the annual bonus payment, no performance conditions are imposed on the matching awards granted under this plan.

Up to 50% of after tax annual bonus that is awarded at operating level can be used to acquire shares in the company. The expected value varies in accordance with achievement under the STI remuneration element.

The graphic below sets out the individual key performance indicators which applied to the group executive and divisional managing directors in 2016. The overall average achievement was 89.8% due to strongly improved performance operationally as well as significant improvements to the balance sheet. Many of these aspects will be carried forward to 2017.

Chief executive officer:•• Group safety target achieved •• Group liquidity managed •• Greater focus on capital expenditure projects •• Operational excellence initiatives delivering improved financial performance

Finance executives:•• Deleveraged balance sheet •• Property sale and leaseback transaction completed

•• Reduction in defined benefit liabilities

•• Mechanisms to mitigate risks associated with US dollar liquidity and currency movements in Nigeria and Angola

•• Improved procurement maturity and achieved planned procurement savings

•• Execution of group’s IT strategy

Operational executives:•• Safety performance targets achieved •• Reduced overtime cost •• Improved inventory management •• Reduced spoilage at Bevcan Springs •• Execution of ends expansion and Rosslyn line 2 for Bevcan

•• Implementation of business unit strategies for DivFood

•• Glass returned to profitability with benchmark pack-to-melt ratios achieved

•• Operational excellence specifically quality, planning and preventive maintenance in Plastics division

•• Project pipeline in place for expansion into countries in the Rest of Africa

Human resources executives:•• Reduced overtime cost •• Restructured engagement structures with trade unions in South Africa (significant progress during the year)

•• Management of Nampak’s performance on the B-BBEE scorecard as the new codes were implemented (Empowerdex rating not finalised)

•• Senior management succession and talent management processes in place with strong skills pipeline established

•• Realigned people development programmes to entrench operational excellence values of making better

= > 90% (superior delivery) = > 75% (significant progress made during the year) = < 75% (work required)

Individual key performance indicators


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Executive directors’ and group executive committee members’ total remuneration 2016SAP and PSP awards for which the performance period expired at the end of the financial year under review are included in the 2016 remuneration (although releasing of these awards is still subject to continued employment until December 2016). For the DBP awards, although no prospective performance conditions are applicable to these awards, participation is voluntary and only quantified and made in December 2016. Accordingly, this information is not available at the time of publishing.

Name

Basic salary(rand)

Company contribution to retirement

(rand)

Guaranteed package

(rand)

Value of other

benefits1

(rand)STI2

(rand)

Total remuneration

(rand)

SAP and PSP3

(rand)

Column 1 2 3 = 1+2 4 5 6 = 4+5 7Executive directorsAM de Ruyter 6 369 501 431 589 6 801 090 20 273 2 442 045 9 263 408 754 789GR Fullerton 3 831 392 31 941 3 863 333 11 516 1 436 400 5 311 249 –FV Tshiqi 2 642 421 249 346 2 891 767 8 620 766 463 3 666 850 367 433

Total 12 843 314 712 876 13 556 190 40 409 4 644 908 18 241 507 1 122 222

Group executive committeeC Burmeister 2 475 833 246 307 2 722 140 8 114 1 664 371 4 394 625 236 477M Khutama 1 992 114 207 886 2 200 000 6 558 721 050 2 927 608 –RG Morris 3 067 042 273 958 3 341 000 9 959 1 823 117 5 174 076 393 318NP O’Brien 2 375 665 241 519 2 617 184 7 801 599 087 3 224 072 291 836EE Smuts 2 730 966 252 738 2 983 704 8 894 988 680 3 981 278 302 131

Total 12 641 620 1 222 408 13 864 028 41 326 5 796 305 19 701 659 1 223 7621 Other benefits refers to group personal accident cover.2 STI disclosed is based on performance during the 2016 financial year, but actual STI payments will only be made in December 2016.3 SAPs and PSPs disclosed were awarded in December 2013 (January 2014 for AM de Ruyter), with the applicable performance period ending 30 September 2016.

Values represented are calculated using the VWAP as at 30 September 2016.

Executive directors’ and group executive committee members’ total remuneration 2015

Name

Basic salary(rand)

Payments by offshore companies

(rand)1


(rand)

Guaranteed package

(rand)

Value of other

benefits10

(rand)STI11

(rand)

Total remuneration

(rand)

SAP and PSP12

(rand)

Column 1 2 3 4 = 1+2+3 5 6 7 = 4+5+6 8Executive directorsAM de Ruyter2 6 078 024 – 524 976 6 603 000 4 251 527 2 057 495 12 912 022 –GR Fullerton3 316 667 – – 316 667 882 90 250 407 799 –G Griffiths4 2 161 399 645 408 161 366 2 968 173 283 144 576 488 3 827 804 500 918 AH Howie5 444 234 – 39 109 483 342 1 347 – 484 689 –FV Tshiqi 2 528 725 – 214 886 2 743 612 7 482 557 125 3 308 218 330 695

Total 11 529 049 645 408 940 336 13 114 793 4 544 381 3 281 358 20 940 533 831 613

Group executive committeeC Burmeister 2 356 294 – 199 706 2 556 000 6 970 1 537 658 4 100 628 187 816 PA de Weerdt6 2 893 355 – 246 987 3 140 342 5 089 458 807 735 9 037 535 1 772 918 M Khutama7 338 335 – 28 332 366 667 1 022 79 420 447 108 –RG Morris8 2 921 912 – 247 916 3 169 829 496 901 600 762 4 267 492 354 584 SE Msane9 1 402 882 – 119 094 1 521 976 6 144 271 317 208 7 983 455 1 420 490 NP O’Brien 2 265 718 – 191 732 2 457 450 7 071 488 160 2 952 681 260 831 EE Smuts 2 671 703 – 225 097 2 896 800 8 269 596 487 3 501 556 213 726 Total 14 850 199 – 1 258 865 16 109 063 11 753 961 4 427 430 32 290 454 4 210 365

1 For the purposes of total remuneration, offshore payments have been converted into rand using the average exchange rate of GBP1: R18.55832 Received a sign on cash award of R4 233 152, paid on 5 January 2015.3 Appointed with effect from 1 September 2015.4 Retired with effect from 19 June 2015. Received leave pay to the value of R277 318 on termination.5 Appointed in the role of acting chief financial officer for the period 19 June 2015 to 31 August 2015.6 Early retirement with effect from 30 September 2015. Received a loss of office payment of R4 192 735. Received a cash settlement in respect of post retirement medical aid of R886 232. Received a long service award to the value of R7 500 for 35 years’ service.7 Appointed with effect from 1 August 2015.8 Received a settlement in respect of post retirement medical aid of R487 887 in the form of a pension fund contribution.9 Retrenched with effect from 31 March 2015. Received a loss of office payment of R4 305 427. Received a special incentive in respect of the sale of the paper businesses of R1 834 793.10 Unless specifically noted above, other refers to group personal accident cover.11 STI disclosed is based on performance during the 2015 financial year, but actual STI payments will only be made in December 2015.12 SAPs and PSPs disclosed were awarded in December 2012, with the applicable performance period ending 30 September 2015 and the employment period

ending in December 2015.


Values represented are calculated using the VWAP as at 30 September 2015.

Non-executive directors’ remuneration 2016/2015The non-executive remuneration paid during the year under review (as approved by shareholders) and the total comparative figure for 2015 are disclosed below:

NameBase

feeMeeting

fees

Audit committee total fees

(rand)


total fees (rand)


total fees (rand)

Investment committee total fees

(rand)

Risk and sustainability

committee total fees

(rand)

Social, ethics and

transformation committee

total fees (rand)

Total 2016 (rand)

Total 2015 (rand)

RC Andersen 164 200 103 800 185 000 98 500 71 450 176 800 – – 799 750 777 980E Ikazoboh 164 200 69 200 – – – 81 900 – – 315 300 347 970RJ Khoza 164 200 103 800 – – 71 450 – – – 339 450 321 745NV Lila3 164 200 103 800 185 000 – – – 170 101 – 623 101 416 540PM Madi 164 200 69 200 – – – 90 200 90 200 176 800 590 600 546 410TT Mboweni1 1 667 400 – – – – – – – 1 667 400 1 580 500IN Mkhari 164 200 86 500 185 000 – – 90 200 – 90 200 616 100 548 590DC Moephuli2 164 200 69 200 – – – 81 900 81 900 – 397 200 416 530CWN Molope3 164 200 103 800 362 700 – – – 97 102 – 727 802 658 755RV Smither4 – – – – – – – – – 255 875PM Surgey 164 200 103 800 – 191 050 71 450 – 90 200 90 200 710 900 704 380

3 145 200 813 100 917 700 289 550 214 350 521 000 529 503 357 200 6 787 603 6 575 2751 Fee includes participation in board sub-committees meetings. 2 Fee donated to Transnet Foundation.3 NV Lila took over chairman role of the Risk and Sustainability committee from CWN Molope with effect from 3 November 2015.4 Resigned from the board and all committees with effect 4 February 2015.

Directors’ fees (rand)


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Notice of annual general meeting

Notice is hereby given that the 49th annual general meeting of shareholders of Nampak Ltd will be held in The Forum at The Campus, Wanderers Building, 57 Sloane Street, Bryanston, 2021, South Africa on Wednesday, 1 February 2017 at 12:00 for the purpose of considering and, if deemed fit, passing with or without modification, the ordinary and special resolutions set out below.

The record date for purposes of determining which shareholders are entitled to receive this notice is Friday, 2 December 2016.

The record date for shareholders to be recorded in the securities register of the company in order to be able to attend, participate and vote at the annual general meeting, is Friday, 27 January 2017. Accordingly, the last date to trade in order to be registered in the company’s register of shareholders is Tuesday, 24 January 2017.

Presentation of annual financial statementsThe consolidated audited annual financial statements of the company and of the group, for the year ended 30 September 2016, incorporating the directors’ report, the audit committee report and the auditor’s report, have been distributed as required and will be presented to shareholders as required in terms of section 30(3)(d) of the Companies Act, No 71 of 2008 (as amended) (the Companies Act).

Report of the social, ethics and transformation committeeIn accordance with Companies Regulation 43(5)(c), issued in terms of the Companies Act, the chairman of the social, ethics and transformation committee will table a report to shareholders, as contained in the integrated report, at the annual general meeting. The full report is available on the website with a summary included on page 30

of the integrated report.

Percentage voting rightsOrdinary resolutions 1 to 9 require a minimum of 50% plus 1 vote of the voting rights cast in order for the resolutions to be adopted:

Ordinary resolution number 1 – re-election of retiring director“RESOLVED that Mr RC Andersen, who is required to retire by rotation as a director of the company in terms of the company’s memorandum of incorporation and who is eligible and available for re-election, be and he is hereby re-elected as an independent, non-executive director of the company.”

Ordinary resolution number 2 – re-election of retiring director“RESOLVED that Professor PM Madi, who is required to retire by rotation as a director of the company in terms of the company’s memorandum of incorporation and who is eligible and available for re-election, be and he is hereby re-elected as an independent, non-executive director of the company.”

Ordinary resolution number 3 – re-election of retiring director“RESOLVED that Ms NV Lila, who is required to retire by rotation as a director of the company in terms of the company’s memorandum of incorporation and who is eligible and available for re-election, be and she is hereby re-elected as an independent, non-executive director of the company.”

Ordinary resolution number 4 – re-election of retiring director“RESOLVED that Mr PM Surgey, who is required to retire by rotation as a director of the company in terms of the company’s memorandum of incorporation and who is eligible and available for re-election, be and he is hereby re-elected as an independent, non-executive director of the company.”

Ordinary resolution number 5 – appointment of external auditors“RESOLVED that Deloitte & Touche be appointed as the company’s external auditors, as nominated by the company’s audit committee, until the next annual general meeting and noted that Mr Trushar Kalan will undertake the audit during the financial year ending 30 September 2017 as the individual registered auditor of Deloitte & Touche.”

Ordinary resolution number 6 – appointment of a member of the audit committee “RESOLVED that Mr RC Andersen, an independent, non-executive director of the company, be and he is hereby appointed a member and chairman of the audit committee until the next annual general meeting of the company.”

Ordinary resolution number 7 – appointment of a member of the audit committee “RESOLVED that Ms NV Lila, an independent, non-executive director of the company, be and she is hereby appointed a member of the audit committee until the next annual general meeting of the company.”

Ordinary resolution number 8 – appointment of a member of the audit committee “RESOLVED that Mrs IN Mkhari, an independent, non-executive director of the company, be and she is hereby appointed a member of the audit committee until the next annual general meeting of the company.”

Following the decision of Mrs Molope to step down on 1 February 2017, the board has recommended that the remaining three members of the audit committee be re-elected by shareholders. A communication will be sent to shareholders in due course about the election of a fourth member to the committee.

* Brief biographies of the directors named in resolutions 1 to 4 and 6 to 8

above, appear on pages 74 and 75

of the integrated report.

Ordinary resolution number 9 – confirmation of the group’s remuneration policy“RESOLVED that as a non-binding advisory vote, the group’s remuneration policy as set out in the remuneration report on pages 78

to 89

of the integrated report be and is hereby

confirmed.”


Percentage voting rightsThe following special resolutions require a minimum of 75% of the voting rights cast in order for the resolutions to be adopted:

Special resolution number 1 – non-executive directors’ fees“RESOLVED that on the recommendation of the remuneration committee, the annual fees payable to the non-executive directors of the company for the 12 months from 1 October 2016 to 30 September 2017, be approved as follows:

Proposed fees Current fees

Board/committee

Base fee per annum

(rand)

Fee per meeting for attendance

(rand)

Number of formal meetings

scheduled per annum

(rand)

Total proposed

fee per annum

(rand)

Total fee per annum(rand)

Non-executive chairman1 1 767 450 1 667 400 Non-executive director 174 200 18 300 5 265 700 250 700Chairman of the audit committee 158 150 37 700 3 271 250 255 900Member of the audit committee 94 250 17 000 3 145 250 137 000Chairman of the nomination committee Member of the nomination committee 56 850 6 300 2 69 450 65 500Chairman of the investment committee2 157 200 15 100 Member of the investment committee2 78 000 8 800 Chairman of the remuneration committee 157 200 15 100 2 187 400 176 800Member of the remuneration committee 78 000 8 800 2 95 600 90 200Chairman of the risk and sustainability committee 157 200 15 100 2 187 400 176 800Member of the risk and sustainability committee 78 000 8 800 2 95 600 90 200Chairman of the social, ethics and transformation committee 157 200 15 100 2 187 400 176 800Member of the social, ethics and transformation committee 78 000 8 800 2 95 600 90 200

1 Single fee for the role of non-executive chairman and participation in sub-committee meetings, including fee for chairing nomination committee.2 Fees paid only when investment committee meetings are required.

Reason and effectThe reason for and effect of special resolution number 1 is to grant the company the authority to pay fees to its non-executive directors for their services as directors.


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Notice of annual general meeting continued

Special resolution number 2 – general authority to repurchase company shares “RESOLVED that subject to compliance with the requirements of the JSE Limited and the Companies Act, the company or any of its subsidiaries be and they are hereby granted a general authority to acquire by purchase on the JSE ordinary shares issued by the company provided that:(i) the number of ordinary shares acquired in any one financial year

shall not exceed 20% of the ordinary shares in issue at the date on which this resolution is passed;

(ii) this authority shall lapse on the earlier of the date of the next annual general meeting of the company or the date 15 months after the date on which this resolution is passed;

(iii) the price paid per ordinary share may not be greater than 10% above the weighted average of the market value of the ordinary shares for the five business days immediately preceding the date on which a purchase is made; and

(iv) the number of shares purchased by subsidiaries of the company shall not exceed 10% in the aggregate of the number of issued shares in the company at the relevant times.”

Reason and effectThe reason and effect for special resolution number 2 is to grant the company a general authority to allow it or any of its subsidiaries, if the directors of the company deem it appropriate in the interests of the company, to acquire by purchase on the JSE ordinary shares issued by the company subject to the restrictions contained in the above resolution. Such purchases:(i) may not in any financial year exceed 20% of the company’s

ordinary shares in issue at the date of passing the above resolution;

(ii) must be effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the company and the counterparty;

(iii) may not be made at prices in excess of 10% above the weighted average of the market value of the ordinary shares for the five days preceding the date of purchase;

(iv) must comply with the requirements of the JSE; and(v) if made by a subsidiary or subsidiaries may not exceed 10%

in the aggregate of the issued shares in the company.

This authority will only be used if the circumstances are appropriate and ordinary shares will be purchased on the JSE.

The directors, after considering the effect of a repurchase of up to 20% of the company’s issued ordinary shares, are of the opinion that if such repurchase is implemented:(i) the company and its subsidiaries will be able to pay their debts

in the ordinary course of business for a period of 12 months after the date of this notice;

(ii) recognised and measured in accordance with the accounting policies used in the latest audited annual group financial statements, the assets of the company and its subsidiaries will exceed the liabilities of the company and its subsidiaries for a period of 12 months after the date of this notice;

(iii) the ordinary capital and reserves of the company and its subsidiaries will be adequate for the purposes of the business of the company and its subsidiaries for the period of 12 months after the date of this notice; and

(iv) the working capital of the company and its subsidiaries will be adequate for the purposes of the business of the company and its subsidiaries for the period of 12 months after the date of this notice.

The company will ensure that its sponsor will provide the necessary letter on the adequacy of the working capital in terms of the JSE Listings Requirements, prior to the commencement of any purchase of the company’s shares on the open market.

Share capital

Authorised Issued

Number of shares R million


Ordinary shares of 5 cents each 776 857 200 38.9 688 668 338 34.46.5% cumulative preference shares of R2 each 100 000 0.2 100 000 0.26% cumulative preference shares of R2 each 400 000 0.8 400 000 0.8Redeemable preference shares of 5 cents each 100 – – –

39.9 35.4

The issued ordinary share capital includes 48 784 062 treasury shares of which 3 713 207 are held by the Nampak Black Management Trust.

Share premium as at 30 September 2016: R250.7 million.


In terms of the JSE Listings Requirements for special resolution number 2, the following general information is included in the integrated report:(i) Directors and management (pages 74 to 77 )(ii) Major shareholders (page 97 )(iii) There have been no material changes since 30 September

2016(iv) Share capital of the company (page 92 )(v) The company is not party to any material litigation nor is it

aware of any pending material litigation to which it may become a party.

The directors whose names appear on pages 74 to 76 of the integrated report, collectively and individually accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the circular (the notice of the annual general meeting) contains all information required by law and the JSE Listings Requirements.”

Special resolution number 3 – Financial assistance to related or inter-related companies or corporations “RESOLVED, as a special resolution, in terms of section 45 of the Companies Act, that the company provides at any time and from time to time during the period of 2 (two) years commencing on the date of this special resolution, any direct or indirect financial assistance (which includes lending money, guaranteeing a loan or other obligation, and securing any debt or obligation) as contemplated in such section of the Companies Act to any 1 (one) or more related or inter-related companies or corporations of the company and/or to any 1 (one) or more members of any such related or inter-related company or corporation and/or to any 1 (one) or more persons related to any such company or corporation, provided that:1. the board from time to time determines: (a) the recipient or

recipients of such financial assistance; (b) the form, nature and extent of such financial assistance and (c) the terms and conditions under which such financial assistance is provided;

2. the board may not authorise the company to provide any financial assistance pursuant to this special resolution unless the board meets all those requirements of section 45 of the Companies Act which it is required to meet in order to authorise the company to provide such financial assistance;”

Reason and effectThe main reason for special resolution number 3 is to authorise the directors, if they deem it appropriate in the interests of the company, to provide financial assistance to related or inter-related companies and/or to any one or more members of any such related or inter-related companies subject to the restrictions contained in the above resolution.

The effect of special resolution number 3 will be to ensure that Nampak’s subsidiaries and other related and inter-related companies and corporations have access to financing and/or financial backing from Nampak.

Identification, voting and proxiesOrdinary shareholders are entitled to attend, speak and vote at the annual general meeting.

In terms of section 63(1) of the Companies Act, any person attending or participating in the general meeting must present reasonably satisfactory identification and the person presiding at the annual general meeting must be reasonably satisfied that the right of any person to participate in and vote (whether as a shareholder or as a proxy for a shareholder) has been reasonably verified.

In accordance with the company’s memorandum of incorporation, voting shall be by ballot only.

Shareholders holding dematerialised shares, but not in their own name, must furnish their Central Securities Depository Participant (CSDP) or broker with their instructions for voting at the annual general meeting. If your CSDP or broker, as the case may be, does not obtain instructions from you, it will be obliged to act in accordance with your mandate furnished to it, or if the mandate is silent in this regard, complete the attached form of proxy.

Unless you advise your CSDP or broker, in terms of the agreement between you and your CSDP or broker by the cut-off time stipulated therein, that you wish to attend the general meeting or send a proxy to represent you at this general meeting, your CSDP or broker will assume that you do not wish to attend the general meeting or send a proxy.

If you wish to attend the annual general meeting or send a proxy, you must request your CSDP or broker to issue the necessary letter of authority to you. Shareholders holding dematerialised shares, and who are unable to attend the annual general meeting and wish to be represented thereat, must complete the attached form of proxy in accordance with the instructions therein and lodge it with or post it to the share registrar.

Forms of proxy must be dated and signed by the shareholder appointing a proxy and should be forwarded to reach the share registrar by no later than 12:00 on Monday, 30 January 2017. Before a proxy exercises any rights of a shareholder at the annual general meeting, such form of proxy must be so delivered.


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Notice of annual general meeting continued

In compliance with the provisions of section 58(8)(b)(i) of the Companies Act, a summary of the rights of a shareholder to be represented by proxy, as set out in section 58 of the Companies Act, is set out below:1. An ordinary shareholder entitled to attend and vote at the annual

general meeting may appoint any individual as a proxy to attend, participate in and vote at the annual general meeting in the place of the shareholder. A proxy need not be a shareholder of the company. A proxy appointment must be in writing, dated and signed by the shareholder appointing a proxy, and, subject to the rights of a shareholder to revoke such appointment (as set out below), remains valid only until the end of the annual general meeting.

2. A proxy may delegate the proxy’s authority to act on behalf of a shareholder to another person, subject to any restrictions set out in the instrument appointing the proxy.

3. The appointment of a proxy is suspended at any time and to the extent that the shareholder who appointed such proxy chooses to act directly and in person in the exercise of any rights as a shareholder.

4. The appointment of a proxy is revocable by the shareholder in question cancelling it in writing and delivering a copy of the revocation instrument to the proxy and to the company. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of: (a) the date stated in the revocation instrument, if any and (b) the date on which the revocation instrument is delivered to the company as required in the first sentence of this paragraph.

5. If the instrument appointing the proxy has been delivered to the company, as long as that appointment remains in effect, any notice that is required by the Companies Act or the company’s memorandum of incorporation to be delivered by the company to the shareholder, must be delivered by the company to: (a) the shareholder or (b) the proxy, if the shareholder has: (i) directed the company to do so in writing and (ii) paid any reasonable fee charged by the company for doing so.

6. Attention is also drawn to the notes to the form of proxy. The completion of a form of proxy does not preclude any shareholder from attending the annual general meeting.

Electronic communicationShareholders or their proxies may participate in the meeting by way of telephone conference call and, if they wish to do so:•• must contact the assistant company secretary (by email at the address [email protected]) by no later than 12:00 on Friday, 27 January 2017 in order to obtain dial-in details for the conference call;

•• will be required to provide reasonably satisfactory identification; and

•• will be billed separately by their own telephone service providers for their telephone call to participate in the meeting.

Voting will not be possible via electronic facilities and shareholders wishing to vote their shares will need to be represented at the meeting either in person, by proxy or by letter of representation, as provided for in the notice of the meeting.

By order of the board

NP O’BrienCompany secretary20 December 2016

Nampak LtdNampak HouseHampton Office Park20 Georgian Crescent East Bryanston, Sandton2191Republic of South Africa


Form of proxy

Nampak Ltd(Incorporated in the Republic of South Africa)(Registration number: 1968/008070/06)(Share code: NPK ISIN: ZAE000071676)(“Nampak” or “the company”)

FORM OF PROXY FOR USE BY CERTIFICATED SHAREHOLDERS AND “OWN NAME” DEMATERIALISED SHAREHOLDERS ONLY – 49th ANNUAL GENERAL MEETING

For use only: •• by holders of certificated shares of the company; and•• holders of dematerialised shares in the company held through a Central Securities Depository Participant (CSDP) or broker and who have selected “own name” registration;

at the annual general meeting of the company to be held in The Forum at The Campus, Wanderers Building, 57 Sloane Street, Bryanston, 2021, South Africa on Wednesday, 1 February 2017 at 12.00 or at any adjournment thereof (the annual general meeting).

If you are a Nampak shareholder entitled to attend and vote at the annual general meeting you can appoint a proxy to attend, vote and speak in your stead. A proxy need not be a Nampak shareholder.

If you are a Nampak shareholder and have dematerialised your share certificate through a CSDP (and have not selected “own name” registration in the sub-register maintained by a CSDP), do not complete this form of proxy but instruct your CSDP to issue you with the necessary letter of representation to attend the annual general meeting, or if you do not wish to attend, provide your CSDP with your voting instructions in terms of your custody agreement entered into with them.

I/We(Full names in BLOCK LETTERS please)

of (address)

telephone (work) (home)

being the holder(s) of ordinary shares in the company, hereby appoint (see note 2):

1. or failing him/her

2. or failing him/her

3. the chairman of the company, or failing him the chairman of the annual general meeting, as my/our proxy to attend, speak, and on a poll to vote or abstain from voting on my/our behalf at the annual general meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the ordinary and special resolutions to be proposed thereat and at any adjournment thereof.

INSERT AN ‘X’ OR THE NUMBER OF ORDINARY SHARES HELD IN THE COMPANY (see note 2)

Proposed resolutions For Against Abstain

1. To re-elect RC Andersen

2. To re-elect PM Madi

3. To re-elect NV Lila

4. To re-elect PM Surgey

5. To appoint the external auditors

6. To appoint RC Andersen a member of the audit committee

7. To appoint NV Lila a member of the audit committee

8. To appoint IN Mkhari a member of the audit committee

9. To confirm the group’s remuneration policy

10. Special resolution number 1: to approve the fees payable to the non-executive directors

11. Special resolution number 2: to authorise the directors of the company to acquire or purchase shares issued by the company on the JSE Limited

12. Special resolution number 3: to authorise the directors of the company to provide financial assistance to related or inter-related companies or corporations

Note: Please indicate with an “X” in the relevant spaces above according to how you wish your votes to be cast. However, if you wish to cast your votes in respect of a lesser number of shares than you own in the company, insert the number of shares held in respect of which you wish to vote (see note 2).

Signed at on 2016/2017

Signature


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Notes to form of proxy

1. A shareholder is entitled to appoint one or more proxies (none of whom need be a shareholder of the company) to attend, speak and vote or abstain from voting in the place of that shareholder at the annual general meeting.

2. A shareholder may therefore insert the name of a proxy of the shareholder’s choice in the space provided, with or without deleting the words “the chairman of the company or failing him the chairman of the annual general meeting”. The person whose name appears first on this form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow.

3. A shareholder’s instructions to the proxy must be indicated by the insertion of an “X” in the appropriate box. Failure to comply with the above will be deemed to authorise the chairman of the company or failing him the chairman of the annual general meeting, if the chairman is the authorised proxy, to vote in favour of the ordinary and the special resolutions at the annual general meeting, or any other proxy to vote or abstain from voting at the annual general meeting as he/she deems fit, in respect of the shareholder’s total holding.

4. The completion and lodging of this form of proxy will not preclude a shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so.

5. In case of joint shareholders, the vote of the most senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint shareholders, for which purpose seniority will be determined by the order in which the names appear on the company’s register of shareholders in respect of the joint holding.

6. If a shareholder does not indicate on this form of proxy that his/her proxy is to vote in favour of or against any ordinary resolution or special resolution or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the annual general meeting be proposed, the proxy shall be entitled to vote as he/she thinks fit.

7. The chairman of the annual general meeting may reject or accept any form of proxy which is completed and/or received otherwise than in accordance with these notes.

8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the company’s share registrar or waived by the chairman of the annual general meeting.

9. Any alteration or correction to this form of proxy must be initialled by the signatory/ies, other than the deletion of alternatives.

10. Forms of proxy must be lodged with or posted to the company, c/o Computershare Investor Services (Pty) Ltd, Rosebank Towers, 15 Bierman Avenue, Rosebank, 2196 (PO Box 61051, Marshalltown, 2107, South Africa), to be received by no later than 12:00 on Monday, 30 January 2017.


Analysis of registered shareholders and company schemes

Registered shareholder spreadIn accordance with the JSE Listings Requirements, the following table confirms the spread of registered shareholders as at 30 September 2016:

Registered shareholder spread

Shareholder spreadNumber

of holders% of total

shareholdersNumber

of shares% of issued

capital

1—1 000 shares 4 024 57.44 1 399 250 0.201 001—10 000 shares 2 119 30.25 6 869 384 1.0010 001—100 000 shares 517 7.38 17 769 103 2.58100 001—1 000 000 shares 264 3.77 83 437 329 12.121 000 001 shares and above 81 1.16 579 193 272 84.10

Total 7 005 100 688 668 338 100

Public and non-public shareholdingsWithin the shareholder base, we are able to confirm the split between public shareholdings and directors/company-related schemes as being:

Shareholder typeNumber


shareholdersNumber


capital

Non-public shareholders 23 0.33 50 026 106 7.26•• Directors and associates 10 0.14 343 418 0.05•• Prescribed officers and management 11 0.16 830 913 0.12•• Treasury shares 1 0.01 45 070 855 6.54•• Empowerment 1 0.01 3 780 920 0.55

Public shareholders 6 982 99.67 638 642 232 92.74

Total 7 005 100.00 688 668 338 100.00

Substantial investment management and beneficial interestsSubstantial investment management and beneficial interests above 3%Through regular analysis of STRATE registered holdings, and pursuant to the provisions of section 56 of the Companies Act, the following shareholders held directly and indirectly equal to or in excess of 3% of the issued share capital as at 30 September 2016:

Investment management shareholdings

Investment managerTotal

shareholding %

Allan Gray Investment Council 128 888 113 18.72PIC 75 022 828 10.89Lazard Asset Management LLC Group 57 122 575 8.29Somerset Capital Management LLP 51 367 483 7.46Nampak Products Ltd 45 070 854 6.54Wellington Management Company 31 768 406 4.61Capital Research & Management 22 249 000 3.23

Total 411 489 259 59.75


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Shareholders’ diary

Annual general meeting 1 February 2017Interim statement and ordinary dividend announcement for the half-year ending 31 March 2017 May 2017 Group results and ordinary dividend announcement for the year ending 30 September 2017 November 2017

DividendOrdinaryFinal for the year ended 30 September 2016 No dividend being paidInterim for the half-year ending 31 March 2017 To be paid in July 2017

Preference6.5% and 6% cumulative Payable twice per annum during February and August


Glossary of terms

B-BBEE Broad-based black economic empowerment

CAGR Compound annual growth rate

Capex Capital expenditure

Cullet Waste glass

CSD Carbonated soft drinks

DBP Deferred bonus plan

DEA Department of Environmental Affairs

dti Department of Trade and Industry

EBITDA Earnings before interest, taxation, depreciation and amortisation

FABS Flavoured alcoholic beverages

FMCG Fast-moving consumer goods

FTSE/Russell ESG

FTSE Russell Environmental Social & Governance

GDP Gross domestic product

HDPE High-density polyethylene

HEPS Headline earnings per share

IFRS International Financial Reporting Standards

IIRC International Integrated Reporting Council

IOM Isle of Man

IOS International Organisation for Standardisation

LPG Liquefied petroleum gas

LTI Long-term incentive

LTIFR Lost-time injury frequency rate. It refers to the rate of occurrence of workplace incidents that result in an employee’s inability to work the next full work shift. It refers to the number of such injuries that occur within a given period relative to the total number of hours worked in the same accounting period

MTI Medium-term incentive

OHSAS Occupational Health and Safety Assessment Series

PET Polyethylene terephthalate

Preforms Test-tube-shaped containers with thick walls, blow-moulded on customers’ sites

PRMA Post-retirement medical aid

PRO Producer responsibility organisations

PSP Performance share plan

R&D Research and development

ROE Return on equity

RONA Return on net assets

SAP Share appreciation plan

SKU Stock-keeping unit

STI Short-term incentive

TGRC The Glass Recycling Company

UHT Ultra-heat treated


Corporate information

AuditorsDeloitte & ToucheBuildings 1 and 2, Deloitte Place The Woodlands Office Park Woodlands DriveWoodmead, Sandton

Business address and registered officeNampak House Hampton Office Park20 Georgian Crescent East Bryanston, 2191, South Africa PO Box 69983, Bryanston, 2021Telephone +27 719 6300 Website www.nampak.com

Company secretaryNeill O’Brien BProcPO Box 69983, Bryanston, 2021Telephone +27 11 719 6332 neill.o’[email protected]

Investor relationsZanele SalmanBSc (Hons), DipMM, MBAPO Box 69983, Bryanston, 2021Telephone +27 11 719 6326 [email protected]

Share registrarComputershare Investor Services (Pty) Ltd Rosebank Towers15 Bierman Avenue, Rosebank, 2196 PO Box 61051, Marshalltown, 2107Telephone +27 11 370 5000Telefax +27 11 370 5487

SponsorUBS South Africa (Pty) Ltd 64 Wierda Road EastSandton, 2196, South AfricaPO Box 652863, Benmore, 2010Telephone +27 11 322 7000Telefax: +27 11 784 8280

SustainabilityLynne Kidd BA (Hons)PO Box 69983, Bryanston, 2021Telephone +27 11 719 6322 [email protected]


2016 FINANCIALSTATEMENTS

NA

MPA

K LIMITED

FINA

NCIA

L STATEMEN

TS 2016

1 Directors’ responsibility for annual financial statements

1 Preparer of financial statements

1 Certificate by company secretary

2 Independent auditor’s report

3 Audit committee report

5 Directors’ report

9 Accounting policies

16 Consolidated statement of financial position

17 Consolidated statement of comprehensive income

18 Consolidated statement of changes in equity

19 Consolidated statement of cash flows

20 Notes to the consolidated financial statements

77 Company statement of financial position

78 Company statement of comprehensive income

79 Company statement of changes in equity

80 Company statement of cash flows

81 Notes to the company financial statements

87 Composition of the group and corporate activity

89 Interests in subsidiaries, associates and joint ventures

91 Analysis of registered shareholders and company schemes

92 Shareholders’ diary

IBC Corporate information

Contents

The directors of the company are responsible for the preparation and integrity of the annual financial statements and related financial information included in this report. The annual financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards and the requirements of the Companies Act, No 71 of 2008, and incorporate full and responsible disclosure in line with the accounting philosophy of the group.

The directors are responsible for the internal controls and management enables the directors to meet these responsibilities. Adequate accounting records and internal controls and systems have been maintained to provide reasonable assurance on the integrity and reliability of the financial statements and to adequately safeguard, verify and maintain accountability for the group’s assets. Such controls are based on established policies and procedures and are implemented by trained personnel with appropriate segregation of duties.

The board is responsible for ensuring that the company maintains a sound and effective system of internal controls and risk management. The audit committee assessed the effectiveness of the system of internal controls and risk management for the year under review,

principally through self-assessment by, and information from, management and reports from the internal and external auditors. Based on these processes and reports, the board is of the opinion that the company’s system of internal control and risk management is effective and provides reasonable assurance on the integrity and reliability of the financial statements and the safeguarding of the company’s assets.

It is the responsibility of the independent auditors to report on whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.

The annual financial statements of the year ended 30 September 2016, set out on pages 5 to 91 , were approved by the board of directors at its meeting on 21 November 2016 and are signed on its behalf by:

TT Mboweni A de RuyterChairman Chief executive officer

Directors’ responsibility for annual financial statementsfor the year ended 30 September 2016

The annual financial statements have been prepared under the supervision of GR Fullerton CA(SA).

GR FullertonChief financial officer

Preparer of financial statements

In terms of section 88(2)(e) of the Companies Act, No 71 of 2008, I certify that the company has lodged with the Commissioner all such returns and notices required by the Companies Act and that all such returns and notices are true, correct and up to date.

NP O’BrienCompany secretary

Certificate by company secretary

1 Nampak Limited Financial Statements 2016

To the shareholders of Nampak LimitedWe have audited the consolidated and separate financial statements

of Nampak Limited, as set out on pages 9 to 91 , which comprise

the statements of financial position as at 30 September 2016,

and the statements of financial performance, statements of other

comprehensive income, statements of changes in equity and

statements of cash flows for the year then ended, and the notes,

comprising a summary of significant accounting policies and other

explanatory information.

Directors’ responsibility for the consolidated and separate financial statementsThe company’s directors are responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with International Financial Reporting Standards and requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of the consolidated and separate financial statements that are free from material misstatements, whether due to fraud or error.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in these consolidated and separate financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the consolidated and separate financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

OpinionIn our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Nampak Limited as at 30 September 2016, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

Other reports required by the Companies Act of South AfricaAs part of our audit of the consolidated and separate financial statements for the year ended 30 September 2016, we have read the directors’ report, the audit committee’s report and the certification by the company secretary for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated and separate financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated and separate financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Report on other legal and regulatory requirementsIn terms of the Independent Regulatory Board for Auditors (IRBA) Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that Deloitte & Touche has been the auditor of Nampak Limited for 48 years.

Deloitte & Touche Registered AuditorsPer: Trushar KalanPartner

21 November 2016

Buildings 1 and 2Deloitte PlaceThe Woodlands Office ParkWoodlands DriveWoodmeadSandton

River Walk Office Park41 Matroosberg RoadAshley GardensPretoria

Independent auditor’s report

National executive: *LL Bam Chief Executive, *TMM Jordan Deputy Chief Executive Officer, *MJ Jarvis Chief Operating Officer, *GM Pinnock Audit,*N Sing Risk Advisory,*NB Kader Tax, TP Pillay Consulting, S Gwala BPaaS, *K Black Clients & Industries, *JK Mazzocco Talent & Transformation, *MJ Comber Reputation & Risk,*TJ Brown Chairman of the Board

A full list of partners and directors is available on request. *Partner and Registered Auditor

B-BBEE rating: Level 2 contributor in terms of the Chartered Accountancy Profession Sector Code

Member of Deloitte Touche Tohmatsu Ltd


IntroductionThe audit committee presents its report for the financial year ended 30 September 2016. The committee has discharged all its responsibilities and carried out all the functions assigned to it in terms of section 94(7) of the Companies Act, No 71 of 2008, and as contained in the committee’s charter.

MembershipShareholders appointed four members to the committee for the 2016 financial year at the annual general meeting on 3 February 2016. The current members are as follows:

Name Date of first appointment





* Mrs Molope will step down as a member of the audit committee at the company’s annual general meeting on 1 February 2017.

Shareholders will be requested to approve the appointment of committee members for the 2017 financial year at the annual general meeting to be held on 1 February 2017. Following the decision of the chairperson to step down on 1 February 2017, the board has recommended that the remaining three members of the committee be re-elected by shareholders. A communication will be sent to shareholders in due course about the election of a fourth member to the committee.

The CVs of the committee members and their attendance at committee meetings can be found on page 69 and pages 74 and 75 of the 2016 integrated report.

MeetingsThe committee meets at least twice per year and during the year under review the committee met six times. Out of the six meetings which were held, three were special committee meetings which considered Nampak Glass capitalisation and depreciation of furnace 3. The group chairman, chief executive officer (CEO), chief financial officer (CFO), internal auditors and external auditors all attend meetings of the committee by invitation. At its meetings, the committee reviews the group’s financial results, receives and considers reports from the internal and external auditors on the results of their work and attends generally to its responsibilities. The committee also meets separately with the internal and external auditors to obtain assurance that they have received full cooperation from management, while the committee chairperson meets regularly with key executives to review issues which require consideration by the committee.

Role of the committeeThe committee operates within written terms of reference which are reviewed and updated regularly. A copy of the charter is available on the company’s website http://www.nampak.com/content/documents/about/audit-committee-charter.pdf. The responsibility of the committee includes:•• the nomination for appointment as auditor of the company of a registered auditor who, in the opinion of the committee, is independent of the company;

•• the determination of the fees to be paid to the auditor and the auditor’s terms of engagement;

•• the determination of the nature and extent of any non-audit services which the auditor may provide to the company;

•• the pre-approval of any proposed contract with the auditor for the provision on non-audit services to the company;

•• the evaluation of the performance of the external auditor;•• the review and evaluation of the effectiveness of the internal controls of the group (with reference to the findings of both the internal and external auditors);

•• monitoring and supervising the effective function of internal audit;•• the appointment, performance assessment and dismissal of the chief internal audit executive;

•• the review of the annual financial statements, the interim reports and any other announcement regarding the group’s results or other financial information to be made public;

•• review of the process for financial reporting;•• monitoring compliance with laws and regulations, material pending litigation, material defalcations, risk management, insurance covers, important accounting issues and specific disclosures in the financial statements; and

•• review and evaluation of the expertise and experience of the CFO.

Discharge of responsibilitiesDuring the year under review the committee:•• reviewed the interim and annual financial statements and recommended them for approval by the board;

•• reviewed the integrated report for 2016 and recommended it for approval by the board;

•• reviewed and satisfied itself that the company’s finance function was adequately resourced by people with appropriate expertise and experience and that the internal financial controls were effective;

•• satisfied itself that the CFO, Mr Glenn Fullerton, has appropriate expertise and experience;

•• resolved to continue to outsource the internal audit function to EY during the financial year;

•• approved the internal audit plans;•• received and reviewed reports from both the internal and external auditors, which included commentary on effectiveness of the internal control environment, systems and processes and, where appropriate, made recommendations to the board;

Audit committee report


Audit committee report continued

•• reviewed the independence of the external auditors, Deloitte & Touche, and recommended them for appointment at the annual general meeting as auditors for the 2017 financial year, with Mr Trushar Kalan as the designated auditor. Mr Trushar Kalan was initially appointed as the individual registered auditor during the financial year ended 30 September 2015;

•• ensured that the appointment of the external auditors complied with the provisions of the Companies Act, No 71 of 2008, and other legislation relating to the appointment of auditors;

•• determined the fees to be paid to the external and internal auditors and their terms of engagement;

•• determined the nature and extent of non-audit services which may be provided by the external auditors and pre-approved the contract terms for the provision of non-audit services by the external auditors;

•• noted that it had not received any complaints, from within or outside the company, relating to the accounting practices and internal audit of the company, to the content or auditing of its financial statements, or any related matter;

•• was responsible for the oversight of financial reporting risks, internal financial controls, fraud risks as it relates to financial reporting and IT risks as it relates to financial reporting; and

•• reviewed with management legal and regulatory matters that could have a material impact on the group.

GeneralThe internal and external auditors have unrestricted access to the committee.

During the year, the committee performed the functions required of an audit committee on behalf of all subsidiary companies in South Africa which are required to have an audit committee in terms of the Companies Act, No 71 of 2008.

CWN Molope Chairperson of the audit committee

21 November 2016


Business of the companyNampak is Africa’s largest diversified packaging group. We are the market leader in manufacturing beverage cans in South Africa, Nigeria and Angola and have commanding positions in other metal, glass and plastic packaging in South Africa. We are the sole producer of cigarette cartons in Nigeria and a significant manufacturer of paper packaging in many other African countries. For more than 70 years we have invested in world-class facilities. We operate in 11 countries in Africa as well as in the United Kingdom and Ireland.

Our 6 678 people provide leading-edge packaging to our customers, some of whom are among the world’s largest FMCG companies. Nampak has a well-resourced R&D facility that provides innovative solutions which fully support our varied customers’ packaging requirements. We support recycling, reuse and recovery of used packaging. Our strategy is to unlock further value from our base business and accelerate growth in the rest of Africa.

Accounting policiesThe annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies Act, No 71 of 2008. The principal accounting policies have been applied consistently with the previous year.

Borrowing facilitiesGroup gross borrowings at 30 September 2016 amount to R7 524.9 million (2015: R8 331.1 million). In terms of the company’s memorandum of incorporation, the borrowing powers are unlimited. Details of the borrowings and facilities are set out in notes 1 and 15 to the annual financial statements.

Review of operations and resultsRevenue increased by 10.7%, a pleasing performance in challenging trading conditions. Bevcan Nigeria and Nampak Glass recorded respective revenue growth in excess of 50% and Bevcan in Angola and our metals business in Nigeria posted increases in revenue in excess of 20%. Glass achieved a revenue growth of 18% after adjusting for the prior year turnover of R251 million generated and capitalised net of operating costs during the start-up phase. The performances in Nigeria and Angola are notable given the significant drop in oil prices in the year and expectations in some quarters that this would result in declining revenue for Nampak operations in these two oil-dependent countries. Stable production at our Glass operation in South Africa was fundamental to the growth in turnover and return to profitability.

Trading margins from operations increased from 9.8% to 10.5% primarily due to cost savings and the turnaround achieved in Glass. Increased centre costs related to unrealised foreign exchange losses on forward exchange contracts and project-related costs resulted in group trading margin declining from 10.6% in 2015 to 10.0% in the current year.

Good progress was made on settlement of the post-retirement medical aid liability accorded to South African pensioners younger than 75 years. At 30 September 2016, 475 pensioners had selected an annuity benefit in lieu of future subsidies by the company. At the closing date of the offer on 15 October 2016, 947 of 1 285 pensioners had responded with 73% of these pensioners opting for the alternative annuity offer. We will continue to trace the remaining pensioners so that they are given the same opportunity.

At 31 December 2015 the lock-in period of the BMT came to an end as per the trust deed. At this date, the shares necessary to repay the grant made by Nampak Ltd were sold and the proceeds repaid to Nampak. Current Nampak employees were given an option to roll their share rights to 15 February 2017 at which date they may choose to receive the shares. A further extension to 31 December 2017 will automatically apply if the shares are “under water” at the extension date of 15 February 2017. Of the total shares held, 23 655 988 shares were either sold or transferred to the beneficiaries of the trust.

Corporate activityOn 1 September 2016, the company’s wholly owned subsidiary, Nampak Products Ltd, completed a sale and leaseback transaction with a company in the Collins Property Group, Imbali Props 21 (Pty) Ltd (Imbali), in terms of which Nampak Products Ltd sold 16 of its factory properties in South Africa to Imbali for a purchase price of R1.744 billion and simultaneously leased back 15 of the properties from Imbali.

Nampak also concluded the sale of Nampak Products Ltd’s 50% shareholding in Sancella SA (Pty) Ltd with effect from 1 December 2015.

The following companies were reinstated during the year under review:•• Nampak Metal Packaging Ltd;•• Nampak Paper Ltd; and•• Southern Paper Industries (Pty) Ltd.

Directors’ reportfor the year ended 30 September 2016

Share capital

Authorised Issued



Ordinary shares of 5 cents each 776 857 200 38.9 688 668 338 34.46.5% cumulative preference shares of R2 each 100 000 0.2 100 000 0.26% cumulative preference shares of R2 each 400 000 0.8 400 000 0.8Redeemable preference shares of 5 cents each 100 – – –

39.9 35.4

The issued ordinary share capital includes 48 784 062 treasury shares of which 3 713 207 are held by the Nampak Black Management Trust.

Share premium as at 30 September 2016: R250.7 million.

There were no changes to the 6.5% and 6% preference shares.


Share plansThe Nampak Ltd Performance Share Plan and the Nampak Ltd Share Appreciation PlanNo further allocations of awards have been made in terms of the PSP and the SAP since 2009.

Details of the share plans are included in note 22 appearing on pages 55 to 60 .

The tables following show the number of shares under award and the maximum number of shares which may be delivered. However, the actual number of shares which will be delivered to participants will depend on the extent to which performance conditions will be satisfied and, consequently, may be less than the number stated below:

The Nampak Ltd Share Appreciation Plan (SAP)

2016 2015

Balance at the commencement of the financial year 115 500 305 681Forfeitures/cancellations (4 000) (4 000)Retirements – –Rights forfeited due to under-achievement of performance criteria – –Exercised (111 500) (186 181)

Balance at the end of the financial year – 115 500

Number of participants – 12

The Nampak Ltd Performance Share Plan 2009 (PSP 2009)

2016 2015

Balance at the commencement of the financial year 2 876 176 3 668 994Number of conditional shares awarded during the year: 1 208 391 669 432

Executive directors 573 026 260 003Senior executives 635 365 409 429

Forfeitures/cancellations – (58 415)Retirements (38 822) (110 992)Rights forfeited due to under-achievement of performance criteria (439 969) (533 841)Rights exercised (831 319) (759 002)

Balance at the end of the financial year 2 774 457 2 876 176

Number of participants 25 25

The Nampak Ltd Share Appreciation Plan 2009 (SAP 2009)

2016 2015

Balance at the commencement of the financial year 3 426 011 5 105 940Number of conditional shares awarded during the year: 3 297 395 3 098 325

Executive directors 256 694 130 320Senior executives 3 040 701 2 968 005

Forfeitures/cancellations (222 133) (885 360)Retirements (149 955) (49 384)Rights forfeited due to under-achievement of performance criteria (392 168) (2 991 643)Rights exercised (6 900) (851 867)

Balance at the end of the financial year 5 952 250 3 426 011


Directors’ report continuedfor the year ended 30 September 2016

During the year, the issued ordinary share capital reduced as follows:

Ordinary shares of

5 cents each

Issued at 30 September 2015 702 496 655Red Coral share repurchase and cancellation (14 969 114)Ordinary shares allotted to employees other than directors in terms of the Nampak Deferred Bonus Plan (DBP) 153 234Ordinary shares allotted to directors in terms of the DBP 18 104Ordinary shares allotted to employees other than directors in terms of the Nampak Ltd Performance Share Plan (PSP) 844 188Ordinary shares allotted to directors in terms of the PSP 111 440Ordinary shares allotted to employees other than directors in terms of the Nampak Ltd Share Appreciation Plan (SAP) 13 831Ordinary shares allotted to directors in terms of the SAP –

Issued at 30 September 2016 688 668 338


The Nampak Ltd Deferred Bonus Plan 2009 (DBP 2009)Selected employees are able to apply up to a maximum of 50% of their after tax annual bonus to purchase bonus shares. Employees will receive a matching award, which is a conditional right to receive shares equal in value to the bonus shares held as at the respective vesting dates on a 1:1 basis. Vesting of the matching award is dependent upon continued employment and is not subject to the satisfaction of performance targets.

The DBP may be summarised as follows:

2016 2015

Balance at the commencement of the financial year 307 560 423 331Number of bonus shares purchased by employees during the year: 74 672 126 109

Executive directors 32 871 53 625Senior executives 41 801 72 484

Number of bonus shares transferred/sold to/by employees during the year: (171 338) (229 597)

Executive directors (18 104) (122 000)Senior executives (153 234) (107 597)

Forfeitures – (3 301)Retirements – (8 982)

Balance at the end of the financial year 210 894 307 560


Placement of unissued shares under the control of the directors for purposes of the share plansIn terms of resolutions passed by shareholders of the company at the annual general meeting held on 8 February 2006, no more than 7.13% of the total issued ordinary shares as at 24 January 2006 (46.4 million shares) may be set aside from the unissued share capital of the company for purposes of all share plans. The total unissued shares under the control of the directors for purposes of all share plans at 30 September 2016 is summarised adjacent:

Balance at the commencement of the financial year 18 476 043Less: Awards granted in terms of the PSP 2009

during the current financial year(1 208 391)

Less: Awards granted in terms of the SAP 2009 during the current financial year

(3 297 395)

Less: Number of conditional shares awarded during the year and prior financial years in terms of DBP

(210 894)

Less: Shares allotted in respect of dividends declared and paid during the current and prior financial years

(96 666)

Add: Options forfeited during the current financial year

–

Add: Awards forfeited in terms of the PSP during the current financial year

–

Add: Awards forfeited in terms of the SAP during the current financial year

4 000

Add: Awards forfeited in terms of the PSP 2009 during the current financial year

478 791

Add: Awards forfeited in terms of the SAP 2009 during the current financial year

764 256

Maximum available for future allocations 14 909 744

Maximum available for future allocationsThe calculation above illustrates the maximum potential available shares for future allocations of all the share plans and it is unlikely that the maximum limit will be reached. This is because the SAP and the SAP 2009 are much less dilutive than conventional option plans, as only the appreciation in the share price is settled in shares. One award granted will therefore never result in a full share being issued.

In respect of the SAP 2009, the company will be limited to issuing no more than 18 000 000 (eighteen million) shares. This limit also takes into account awards granted under the SAP Trust in 2006.

In respect of the PSP 2009, the company will be limited to issuing no more than 9 000 000 (nine million) shares. This limit also takes into account awards already granted under the PSP Trust in 2006.

In respect of the DBP, the company will be limited to issuing no more than 5 000 000 (five million) shares.

Taking all the plans together, the company will be limited to issuing no more than 32 000 000 (thirty-two million) shares. This is the limit previously approved in respect of the SAP Trust and PSP Trust and does not increase the overall dilution of shareholders through the operation of the plans.


DividendsDetails of dividends paid, dealt with in the financial statements, are shown below:

Class of shareDividend number

Cents per share (gross)

Declaration date

Last day to trade

Payment date

6% cumulative preference 94 6.00 26/11/2015 15/01/2016 25/01/201695 6.00 12/07/2016 26/07/2016 01/08/2016

6.5% cumulative preference 94 6.50 26/11/2015 15/01/2016 25/01/201695 6.50 12/07/2016 26/07/2016 01/08/2016



Ordinary dividendAfter many years of applying a constant dividend policy of 1.55 times cover with a pay-out ratio of 64.5% of HEPS, driven primarily by corporate action rather than cash generation, in 2016 the board made the difficult decision to suspend the payment of both the interim and full year dividend. The decision was part of the group’s balance sheet restructuring programme given the high historic gearing levels that arose from aggressive capital expenditure and corporate finance activities over the preceding five years and liquidity issues in Nigeria and Angola. Future dividends, which will be resumed if appropriate from the 2017 financial year, will be linked to cash generated in non-cash restricted countries and will be based on a 40% pay-out ratio taking into account capital expenditure requirements.

Directors and secretaryThe names of the directors and secretary in office at 30 September 2016 are set out on pages 74 to 77 of the integrated annual report.

Ms NV Lila, Professor PM Madi and Messrs RC Andersen and PM Surgey retire by rotation in terms of the company’s memorandum of incorporation but, being eligible, offer themselves for re-election at the forthcoming annual general meeting. Ms NV Lila, Professor PM Madi and Messrs RC Andersen and PM Surgey do not have service contracts as non-executive directors.

Interests of directors and prescribed officersThe total direct and indirect beneficial and non-beneficial interests of the directors and prescribed officers of Nampak Ltd in the issued ordinary share capital of the company as at 30 September 2016 are shown below:

Ordinary shares

2016 2015

Beneficial interestsExecutive directorsAM de Ruyter 94 576 68 959GR Fullerton 1 108 97FV Tshiqi 190 726 141 241Non-executive directorsRC Andersen 31 000 31 000Non-beneficial interests of directors 8 8Beneficial interestsPrescribed officersC Burmeister 144 917 57 136M Khutama 791 –RG Morris 350 833 286 461EE Smuts 116 967 68 236NP O’Brien 122 078 74 123

Dr RJ Khoza, an independent non-executive director, had an indirect, beneficial shareholding through his family trust in the ordinary share capital of the company as at 30 September 2016:

Name of director 2016 2015

RJ Khoza Family Trust 26 000 26 000

There have been no changes to the directors’ shareholding outlined above since the financial year-end and to the date of this report.

Litigation statementThere are no material legal or arbitration proceedings (including proceedings which are pending or threatened of which the directors of Nampak Ltd are aware) which may have a material effect on the financial position of the group.

Going concernThe directors believe that the company will be a going concern for the foreseeable future.

Special resolutionsThe following special resolutions were passed during the year under review:•• Nampak Glass (Pty) Ltd passed special resolutions for a reduction in share capital in anticipation of its deregistration;

•• Southern Paper Industries (Pty) Ltd passed a special resolution for the removal and appointment of directors;

•• Nampak Paper Ltd passed a special resolution for the removal and appointment of directors; and

•• Nampak Metal Packaging passed a special resolution for the removal of a director.

Retirement fundsDetails of retirement funds are reflected in note 17 to the annual financial statements.

Subsidiary, joint venture and associate companiesDetails of the company’s significant subsidiaries, joint ventures and associates are given in Annexure B on pages 89 and 90 .

Subsequent eventsThere have been no subsequent events from the reporting date up to the date of this report.


1. Basis of preparation The consolidated and separate financial statements have been

prepared in accordance with International Financial Reporting Standards (IFRS) and in a manner as required by the Companies Act, No 71 of 2008.

The group annual financial statements are presented in South African rand, which is the currency in which the majority of the group’s transactions are denominated. The group annual financial statements have been prepared on the going concern and historical cost basis, except for financial instruments that are measured at revalued amounts or fair values, as explained in the accounting policies below.

The accounting policies set out below have been applied, in all material respects, consistently by all group entities to all periods presented in these consolidated financial statements.

During the year, the group embarked on a process to make changes to the way it organises and presents its explanatory notes to the financial statements motivated by the need to make financial statements easier to understand. These changes include removing accounting policies and disclosures that are immaterial.

Accounting policies which are useful to users, especially where particular accounting policies are based on judgement regarding choices within IFRS, have been disclosed. Accounting policies for which no choice is permitted in terms of IFRS have been included only if management concluded that the disclosure would assist users in understanding the financial statements as a whole, taking into account the materiality of the item being discussed. Accounting policies which are not applicable from time to time have been removed, but will be included if the type of transaction occurs in future.

2. Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies, reported amounts and related disclosures.

Estimates and underlying assumptions related to critical judgements are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Certain accounting policies have been identified as involving particularly complex or subjective judgements or assessments, as follows:•• Net investment in a foreign operation

Management continually reviews the collectibility of amounts receivable by Nampak International Limited (NIL) in terms of intergroup loans to its operations based in Africa. NIL is the main holding company for the African operations and is based in the Isle of Man. Where management has decided that they will not seek repayment of loans in the foreseeable future, the outstanding balance is considered to be and is recognised as being part of NIL’s net investment in these operations in accordance with the

application of IAS 21 The Effects of Changes in Foreign Exchange Rates (paragraph 15). Consequently, any exchange differences on translation of the loan are recognised in profit or loss in the separate financial statements of the operation concerned, while on consolidation such exchange differences are recognised in other comprehensive income.

•• Estimates of asset useful lives and depreciation methods Property, plant and equipment are depreciated over their

useful life taking into account residual values. Useful lives are assessed annually. Useful lives are affected by technology innovations, maintenance programmes and future productivity. Future market conditions determine the residual values.

•• Impairment tests of assets Impairment tests on property, plant and equipment are only

done if there is an impairment indicator. Goodwill is tested for impairment annually. Future cash flows are based on management’s estimate of future market conditions. These conditions may change after year-end.

•• Deferred tax assets Deferred tax assets are recognised to the extent that it is

probable that taxable income will be available in future against which they can be utilised. Future taxable profits are estimated based on business plans which include estimates and assumptions regarding economic growth, interest, inflation and taxation rates, and competitive forces.

3. Basis of consolidation The consolidated financial statements incorporate the financial

statements of the company and subsidiaries of the group. A subsidiary is an entity over which the group has control. Control is achieved when the company has power over the investee, is exposed or has rights to variable returns from its involvement with the investee, and has the ability to use its power to affect its returns.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity. Non-controlling interests consist of the amount of the non-controlling shareholders’ interests at the date of the original business combination and their share of changes in equity since the date of the combination.

Financial results of subsidiaries, joint ventures and associates are prepared for the same reporting period as the parent company. Where necessary, adjustments are made to bring the accounting policies in line with those of the group.

4. Business combinations All business combinations are accounted for by applying the

acquisition method. Goodwill represents amounts arising on acquisition of subsidiaries and is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquirer, and the fair value of the acquirer’s previously held equity interest in the acquiree, if any, over the net of the acquisition date amounts of the identifiable assets acquired and liabilities and contingent liabilities assumed. If, after assessment of the group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the acquirer’s consideration transferred, the amount of any non-controlling interests in the acquiree and the fair

Accounting policiesfor the year ended 30 September 2016


4. Business combinations continued value of the acquirer’s previously held equity interests in the

acquiree, if any, the excess is recognised immediately in profit or loss as a bargain purchase gain. All acquisition-related costs are recognised as expenses in the period in which the costs are incurred and the services received.

The choice of measurement basis of non-controlling interests is made on a transaction-by-transaction basis. Non-controlling interests are measured at fair value or at their proportionate share of the entity’s net assets.

5. Investments in associates and joint ventures Associates are those companies in which the group holds a

long-term equity interest and is in a position to exercise significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

Joint ventures are those entities which are not subsidiaries and over which the group exercises joint control, which is defined as the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.

Joint ventures are joint arrangements whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement.

The results and assets and liabilities of associates and joint ventures are incorporated in these financial statements using the equity method of accounting. Losses of an associate and joint venture in excess of the group’s interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the group’s net investment in the associate or joint venture) are not recognised.

Where a group entity transacts with an associate or joint venture of the group, profits and losses are eliminated to the extent of the group’s interest in the relevant associate or joint venture.

6. Goodwill Goodwill is initially recognised as an asset at cost and is

subsequently measured at cost less any accumulated impairment losses.

For the purposes of impairment testing, goodwill is allocated to each of the group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill is allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

7. Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of the assets’ previous carrying amount and fair value less costs to sell. Impairment losses on the initial classification as held for sale and subsequent reassessments are accounted for in profit or loss. Non-current assets (and disposal groups) classified as held for sale, are not depreciated.

8. Revenue recognition Revenue is measured at the fair value of the consideration

received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of sales-related taxes. Revenue is measured net of cash discounts, settlement discounts and rebates given to customers.

Sales of goods are generally recognised when goods are delivered and title has passed. In isolated cases, goods are exported free on board. Revenue on services is recognised when the service has been performed.

Other revenue relates to transactions that do not form part of core business sales and the quantum of these transactions are not material. Other revenue is recognised in accordance with the sale of goods principle.

Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

9. Government grants Government grants are initially recognised as deferred income

when there is reasonable assurance that they will be received and the group will comply with the conditions associated with the grant. Grants that compensate the group for expenses incurred are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate. Grants that compensate the group for the cost of an asset are recognised as deferred income and then recognised in comprehensive income or expenses on a systematic basis over the useful life of the asset.

10. Leasing Leases are classified as finance leases whenever the terms of

the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rentals payable under operating leases are charged to profit or loss on the straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to

Accounting policies continuedfor the year ended 30 September 2016


10. Leasing continued enter into an operating lease are also spread on a straight-line

basis over the lease term.

During the year, the group entered into a significant sale and leaseback transaction for 15 of its industrial properties at their carrying amount. The group has accounted for the transaction as an operating sale and leaseback as the significant risks and rewards of ownership have been transferred to, and remain with, the purchaser. The sales price for the properties is equal to their fair value, in effect, a normal sale transaction occurred and the profit on the sale has been recognised in profit or loss in the current period.

11. Foreign currencies In order to hedge its exposure to certain foreign exchange

risks, the group enters into derivative financial instruments. Further details are provided in the accounting policy relating to financial instruments.

12. Employee benefits The cost of providing employee benefits is accounted for in

the period in which the benefits are earned by employees.

Short-term employee benefits The cost of short-term employee benefits (those payable within

12 months after service is rendered, such as paid vacation and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of profit-sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance and the obligation can be measured reliably.

Post-employment benefits The group operates a number of defined contribution and

defined benefit funds in compliance with relevant local legislation. The assets of the funds are held separately from those of the group and are administered either by trustees, which include elected employee representatives, or in some cases, by independent experts.

The group does not provide post-retirement medical benefits for employees who joined the company after 1 June 1996. The obligation in respect of medical benefits to employees and pensioners employed before that date is treated as defined benefit plans.

Payments to defined contribution plans are charged as an expense as they fall due. Payments made to industry-managed retirement benefit schemes are dealt with as defined contribution plans where the group’s obligations under the schemes are equivalent to those arising in a defined contribution retirement plan.

For defined benefit plans, the cost of providing the benefits is determined using the projected unit credit method. Actuarial valuations are conducted on a triennial basis with interim valuations performed on an annual basis.

Consideration is given to any event that could impact the funds up to the reporting date where interim valuations are performed at an earlier date using an independent valuation expert.

The amount recognised in the statement of financial position represents the present value of the defined benefit obligation, adjusted for unrecognised past service costs, and reduced by the fair value of plan assets.

Share-based payments The group issues equity-settled share-based payments to

certain employees. The Black Management Trust (BMT) issues shares to certain employees and therefore this is treated as an equity-settled share-based payment. However, in the event of death or disability of an employee, the settlement will be done in cash rather than equity. Therefore this component is treated as cash settled. The Share Appreciation Plan (SAP), Performance Share Plan (PSP) and Deferred Bonus Plan (DBP) are all treated as equity-settled schemes. Equity-settled share-based payments are measured at fair value, excluding the effect of non-market vesting conditions, at the date of grant. The fair value at the grant date of the BMT equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group’s estimate of the shares that will eventually vest, excluding the effect of non-market vesting conditions. The expense for the PSP is recognised proportionately so that after the third year of the grant a participant will be entitled to a third of the shares, after the fourth year another third so that after five years the participant will be entitled to receive full rights under the plan.

The expenses for the SAP and DBP are also recognised proportionally, but the participant will be entitled to full rights after the third year of the grant/third year after which bonus shares were purchased.

Fair value is measured using various models as disclosed in the share-based payment note. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of estimated forfeitures, exercise restrictions and behavioural considerations.

Grants issued to employees of subsidiaries are treated as equity-settled share-based payments, with the subsidiaries recognising a corresponding increase in equity as a contribution from the parent. In the company annual financial statements, this contribution is treated as an investment in subsidiaries.

13. Taxation Income tax expense represents the sum of the tax currently

payable and deferred tax.

The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.



13. Taxation continued Deferred tax is recognised on differences between the

carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

14. Property, plant and equipment and investment property

Property, plant and equipment and investment property are stated at cost less accumulated depreciation and any accumulated impairment losses.

All costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, and for qualifying assets, borrowing costs in accordance with the group’s accounting policy are included in the carrying value of the asset. Costs also include an estimate of costs of dismantling and removing the item and restoring the site on which it is located. When parts of an item of property, plant and equipment have different useful lives or residual values, they are accounted for as separate items (major components).

Depreciation commences when the assets are ready for their intended use. Depreciation is charged so as to write off the cost over their estimated useful lives, using the straight-line method – other than for the Bevcan operations where the units of production method is applied. The latter method was applied for the Bevcan operations for the first time from 1 October 2015 and the change in method was accounted for as a change in estimate in accordance with IAS 16: Property, Plant and Equipment and IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors. Depreciation is not provided in respect of land.

Assets held under finance lease are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

The average straight-line rates of depreciation used are:Freehold buildings and investment property 30 to 50 yearsLeasehold buildings Shorter of asset life or the

lease termPlant and equipment 2 to 20 yearsFurniture and equipment 4 to 10 yearsMotor vehicles 2 to 10 years

Depreciation methods, useful lives and residual values are reassessed annually or when there is an indication that they have changed.

The gain or loss on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

15. Borrowing costs Borrowing costs directly attributable to the acquisition,

construction or production of qualifying assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

16. Intangible assets excluding goodwill Included in intangible assets are patents, trademarks,

capitalised research and development costs, ERP system costs and computer software costs.

Acquired computer software licences, patents and trademarks are measured at purchase cost and are amortised on a straight-line basis over their estimated useful lives.

Costs associated with development or maintaining computer software programs are recognised as the expense is incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include software development, employee costs and an appropriate portion of relevant overheads. Subsequent expenditure is capitalised when it increases the future economic benefits embodied in the specific asset to which it relates.

17. Impairment of assets At each reporting date, the group reviews the carrying

amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

If the recoverable amount of an asset, or cash-generating unit, is estimated to be less than its carrying amount, the carrying amount of the asset, or cash-generating unit, is reduced to its recoverable amount.



17. Impairment of assets continued Where an impairment loss subsequently reverses, the carrying

amount of the asset, or cash-generating unit, is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised in prior years.

18. Inventories Inventories are stated at the lower of cost or net realisable

value. Cost comprises direct materials and, where applicable, direct labour and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the first-in, first-out method. Net realisable value represents the estimated selling price less all estimated costs to be incurred in marketing, selling and distribution.

19. Financial instruments Financial assets and financial liabilities are recognised on

the group’s statement of financial position when the group becomes a party to the contractual provisions of the instrument.

Trade receivables Trade receivables are measured initially at fair value, and are

subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Non-current financial assets Non-current financial assets relate to held-to-maturity

investments and available-for-sale investments. These are initially measured at fair value, plus directly attributable transaction costs.

At subsequent reporting dates, debt securities that the group has expressed intention or ability to hold to maturity (held-to-maturity securities) are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts.

Instruments other than held-to-maturity debt securities are classified as available-for-sale financial assets, and are measured at subsequent reporting dates at fair value. Unrealised gains and losses arising from the revaluation of available-for-sale financial assets are recognised in other comprehensive income.

Cash and cash equivalents Cash and cash equivalents comprise cash on hand and

demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Bank overdrafts which are repayable on demand and form an integral part of the daily cash management are also included in cash and cash equivalents.

Financial liabilities and equity Financial liabilities and equity instruments issued by the group

are classified according to the substance of the contractual arrangement entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.

Bank borrowings Interest-bearing bank loans and overdrafts are initially

measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the group’s accounting policy for borrowing costs.

Trade payables Trade payables are initially measured at fair value, and are

subsequently measured at amortised cost, using the effective interest rate method.

Equity instruments Equity instruments issued by the company are recorded at the

proceeds received, net of direct issue costs.

Derivative financial instruments and hedge accounting The group’s activities expose it to the financial risks of

changes in foreign exchange rates, interest rates and commodity prices.

The group uses derivative financial instruments, primarily foreign currency forward contracts, commodity futures and interest rate derivatives to hedge its risks associated with foreign currency and market fluctuations relating to certain firm commitments and forecast transactions. These derivatives are initially measured at fair value on the contract date, and are remeasured to fair value at subsequent reporting dates. The resulting gain or loss is recognised in profit or loss as it arises, unless the derivative is designated and effective as a hedging instrument.



19. Financial instruments continued Changes in the fair value of derivative financial instruments

that are designated and effective as hedges of future cash flows are recognised in other comprehensive income. The ineffective portion is recognised immediately in profit or loss. If the cash flow hedge of a firm commitment or forecast transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gain or loss on the derivative that had previously been recognised in equity is included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in profit or loss in the same period in which the hedge item affects profit or loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, for forecast transactions, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to profit or loss for the period.

Gains and losses deferred in the foreign currency translation reserve are recognised in profit or loss on disposal of the foreign operation.

20. Provisions Provisions are recognised when the group has a present

obligation as a result of a past event, and it is probable that the group will be required to settle that obligation. Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the reporting date, and are discounted to present value where the effect is material.

21. Segment reporting Operating segments are identified on the basis of internal

reports that are regularly reviewed by the group’s chief operating decision-maker in order to allocate resources to the segment and assess the segment’s performance.

22. Financial guarantees The group regards financial guarantee contracts as insurance

contracts and has used accounting applicable to insurance contracts. Liabilities in terms of the financial guarantees are only recognised when it is probable that economic benefits will flow from the group.

23. Adoption of new and revised International Financial Reporting Standards and circulars

23.1 New and revised International Financial Reporting Standards in issue and effective for the current financial year

The group adopted all amendments or improvements to standards or interpretations that became effective during the current financial year with no effect on the financial statements of the group. No new standards were effective for the current financial year and the group did not elect to adopt any of these standards earlier than their effective dates.

23.2 New and revised International Financial Reporting Standards in issue but not yet effective for the current financial year

At the date of authorisation of these financial statements, the following standards, amendments to existing standards and interpretations were in issue but not yet effective for the current year and have not been early adopted.

These standards, amendments and interpretations will be effective for annual periods beginning after the dates listed below:

•• IFRS 9: Financial Instruments IFRS 9 is part of the IASB’s project to replace IAS 39. This

standard introduced new requirements for the classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortised cost or fair value.

The group anticipates that the application of IFRS 9 may have a significant impact on amounts reported in respect of the group’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 9 until a detailed review has been completed.

Effective date: annual periods beginning on or after 1 January 2018.

•• IFRS 15: Revenue From Contracts With Customers The objective of IFRS 15 is to establish the principles that an

entity should apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer.



23. Adoption of new and revised International Financial Reporting Standards and circulars continued

23.2 New and revised International Financial Reporting Standards in issue but not yet effective for the current financial year continued

The core principle of IFRS 15 is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This core principle is delivered in a five step model framework:

•– identify the contract(s) with a customer;•– identify the performance obligations in the contract;•– determine the transaction price;•– allocate the transaction price to the performance obligations in the contract; and

•– recognise revenue when (or as) the entity satisfies a performance obligation.

Application of this guidance will depend on the facts and circumstances present in a contract with a customer and will require the exercise of judgement.

The group has initiated the process of assessing the impact of IFRS 15 on its consolidated financial statements.

Effective date: annual periods beginning on or after 1 January 2018.

•• IFRS 16: Leases IFRS 16 provides a comprehensive model for the

identification of lease arrangements and their treatment in the financial statements of both lessees and lessors. The standard introduces significant changes to lessee accounting. It removes the distinction between operating and finance leases under IAS 17 and requires a lessee to recognise a right-of-use asset and a lease liability at lease commencement for all leases, except for short-term leases and leases of low-value assets. The new standard will have a material impact on the group.

IFRS 16 is effective for reporting periods beginning on or after 1 January 2019 with early application permitted for entities that apply IFRS 15 on or before the date of initial application of IFRS 16.

•• Annual improvements to IFRS 2010 – 2012 cycle In addition to the new standards, revisions and amendments

to existing standards described above, several minor amendments to standards are effective for annual periods beginning on 1 January 2016.

The group anticipates that the adoption of these amendments in future periods will not have a material impact on the results, financial position and cash flows of the group.

•• Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation

The amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment. The amendments to IAS 38 introduce a rebuttable presumption that revenue is not an appropriate basis for amortisation of an intangible asset. This presumption can only be rebutted in the following two limited circumstances:(a) when the intangible asset is expressed as a measure

of revenue; or(b) when it can be demonstrated that revenue and the

consumption of the economic benefits of the intangible asset are highly correlated.

The amendments apply prospectively for annual periods beginning on or after 1 January 2016.

The group anticipates that the adoption of these amendments in future periods will not have any impact on the results, financial position and cash flows of the group.

24. Comparative figures During the year, the group reassessed its disclosure of gains

and losses arising from the translation of financial instruments.

Previously, all gains and losses arising from the translation of financial instruments were regarded as not being part of the normal trading activities of the group and therefore recognised as “abnormal gains and losses” (ie outside of trading profit) as defined and presented in the segmental report disclosure (note 2). Following this reassessment, only losses on the translation of financial instruments arising from the illiquidity in Angola and Nigeria were regarded as “abnormal” and have been disclosed as such, while other translation gains and losses were now regarded as being part of the group’s normal trading activities and have therefore been recognised as being part of trading profit.

Consequently, trading profit from continuing operations for the comparative period has been restated to R1 839.6 million from R1 820.5 million, while trading profit from discontinued operations has been restated to R43.2 million from R56.9 million.



Consolidated statement of financial positionat 30 September 2016

Notes2016

R million 2015

R million

ASSETSNon-current assetsProperty, plant and equipment 3 10 567.1 11 016.9Investment property 3 6.3 8.8Goodwill 4 3 734.4 3 769.0Other intangible assets 5 309.0 349.6Investments in associates 6 19.8 22.0Investments in joint ventures 7 7.9 9.4Non-current financial assets 8 56.4 45.7Deferred tax assets 9 70.6 145.3

14 771.5 15 366.7Current assetsInventories 10 3 376.7 3 890.6Trade receivables and other current assets 11 3 109.0 3 404.4Tax assets 11.2 12.0Bank balances, deposits and cash equivalents 12 2 835.4 1 587.4

9 332.3 8 894.4Assets classified as held for sale 13 – 146.4

Total assets 24 103.8 24 407.5

EQUITY AND LIABILITIESCapital and reservesShare capital 14 35.4 36.1Capital reserves 14 (121.4) (405.0)Other reserves 14 51.0 1 061.7Retained earnings 14 9 238.5 8 109.6

Shareholders’ equity 9 203.5 8 802.4Non-controlling interest 14 241.0 370.0

Total equity 9 444.5 9 172.4Non-current liabilitiesLoans and borrowings 15 6 202.1 4 212.0Other non-current liabilities 16 37.0 61.6Retirement benefit obligation 17 1 855.7 2 008.4Deferred tax liabilities 9 230.1 329.2

8 324.9 6 611.2Current liabilitiesTrade payables and other current liabilities 18 4 668.7 4 183.3Bank overdrafts and loans 15 1 322.8 4 119.1Provisions 19 269.0 235.3Tax liabilities 73.9 86.2

6 334.4 8 623.9



Consolidated statement of comprehensive incomefor the year ended 30 September 2016

Notes2016

R million 2015

R million

CONTINUING OPERATIONSRevenue 20 19 138.9 17 291.3Raw materials and consumables used 10 041.5 9 304.5Employee benefit expense 3 122.7 2 804.9Depreciation and amortisation expense 911.7 802.3Other operating expenses 3 156.2 2 877.3Other operating income 256.0 179.1

Operating profit 21 2 162.8 1 681.4Finance costs 23 527.5 316.6Finance income 24 42.0 37.6Share of net losses in associates 6 (1.3) (2.6)Share of net profits/(losses) in joint ventures 7 1.4 (1.2)

Profit before tax 1 677.4 1 398.6Income tax expense/(benefit) 26 199.1 (57.5)

Profit after tax from continuing operations 1 478.3 1 456.1

DISCONTINUED OPERATIONSLoss for the year from discontinued operations 29 – (394.8)

Profit for the year 1 478.3 1 061.3Other comprehensive (expense)/income for the year, net of taxItems that will not be reclassified to profit or lossNet actuarial loss from retirement benefit obligations (491.0) (9.6)Items that may be reclassified to profit or lossExchange difference on translation of foreign operations (509.4) 774.6(Loss)/gain on cash flow hedges (34.3) 56.8

Other comprehensive (expense)/income for the year, net of tax (1 034.7) 821.8


Profit/(loss) attributable to:Owners of Nampak Ltd 1 610.4 1 043.2Non-controlling interest in subsidiaries (132.1) 18.1

1 478.3 1 061.3

Total comprehensive income/(expense) attributable to:Owners of Nampak Ltd 572.6 1 794.0Non-controlling interest in subsidiaries (129.0) 89.1

443.6 1 883.1

Earnings per shareBasic (cents per share) 32

Continuing operations 254.5 228.3 Discontinued operations – (62.7)

Total 254.5 165.6

Diluted (cents per share) 32Continuing operations 253.9 225.6 Discontinued operations – (61.9)

Total 253.9 163.7


Notes2016

R million2015

R million

Opening balance 9 172.4 7 883.1Net shares issued during the year 28.9 74.9Share-based payment expense/(income) 13.9 (2.6)Share grants exercised (28.8) (75.0)Share of movement in associate’s and joint venture’s non-distributable reserve 0.9 0.6Non-controlling interest realised on disposal of subsidiary – 2.6Shares repurchased and cancelled (0.8) –Treasury shares disposed 384.2 –Transfer from hedging reserve to related assets – (4.9)Increase in non-controlling shareholders’ interest on consolidation of Zimbabwe associates – 356.8Total comprehensive income for the year 443.6 1 883.1Dividends paid 31 (569.8) (946.2)


Comprising:Share capital 14 35.4 36.1Capital reserves 14 (121.4) (405.0)

Share premium 250.7 221.9Treasury shares (557.9) (827.6)Share-based payments reserve 185.8 200.7

Other reserves 14 51.0 1 061.7Foreign currency translation reserve 1 494.9 2 017.8Financial instruments hedging reserve 18.8 53.1Recognised actuarial losses (1 466.6) (975.6)Share of non-distributable reserves in associates and joint ventures 3.7 4.5Available-for-sale financial assets revaluation reserve – (38.3)Other 0.2 0.2

Retained earnings 14 9 238.5 8 109.6

Shareholders’ equity 9 203.5 8 802.4Non-controlling interest 14 241.0 370.0

Total equity 9 444.5 9 172.4

Consolidated statement of changes in equityfor the year ended 30 September 2016


Notes2016

R million2015

R million

Cash flows from operating activitiesCash receipts from customers 19 161.6 16 916.6Cash paid to suppliers and employees (16 336.3) (15 190.1)

Cash generated from operations 36.1 2 825.3 1 726.5Income from investments – 7.4Interest received 40.1 40.9Interest paid (561.5) (417.3)Retirement benefits, contributions and settlements (161.0) (364.9)Income tax paid (201.3) (151.6)Replacement capital expenditure (475.7) (1 352.6)

Cash flows from operations 1 465.9 (511.6)Dividends paid (575.5) (946.2)

Cash generated from/(utilised in) operating activities 890.4 (1 457.8)

Cash flows from investing activitiesExpansion capital expenditure (951.7) (771.0)Capitalised expenditure on group ERP systems and other intangible assets (16.2) (71.6)Proceeds from sale and leaseback transaction 1 701.1 –Proceeds from disposal of other property, plant, equipment, investments and non-current assets held for sale 186.7 145.3Disposal of businesses 36.2 – 1 982.7(Increase)/decrease in non-current financial assets and investments (28.5) 51.0

Cash generated from investing activities 891.4 1 336.4

Cash flows from financing activitiesNon-current borrowings raised 2 665.5 558.3Non-current borrowings repaid (1 036.8) (1 887.0)Net current borrowings raised/(repaid) 339.7 (160.0)Proceeds from disposal of treasury shares 384.2 –Capital raised from issue of shares 28.9 74.9Shares repurchased and cancelled (0.8) –

Cash raised/(repaid) in financing activities 2 380.7 (1 413.8)

Net increase/(decrease) in cash and cash equivalents 4 162.5 (1 535.2)Net overdraft at beginning of year (2 084.9) (681.0)Cash acquired on consolidation of Zimbabwe associates – 44.1Translation of cash in foreign subsidiaries (235.6) 87.2

Cash and cash equivalents/(net overdraft) at end of year 36.3 1 842.0 (2 084.9)

Consolidated statement of cash flowsfor the year ended 30 September 2016


Notes to the consolidated financial statementsfor the year ended 30 September 2016

1. Financial risk management Capital risk management The group manages its capital to ensure that entities in the group and the company will be able to continue as a going concern while

maximising the return to stakeholders through the optimisation of the debt and equity balances.

The group’s objectives when managing capital are to provide an adequate return to shareholders, to appropriately gear the business, to safeguard the ability of the group to continue as a going concern and to take advantage of opportunities that are expected to provide an adequate return to shareholders.

In order to optimise the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue or buy back shares or sell assets to reduce debt. In line with this strategy, the group did not declare interim or final dividends for the year (note 31) and entered into a sale and leaseback transaction for 15 of its industrial properties in South Africa (note 27) among other measures applied.

The group monitors capital based on its gearing ratio and net debt to EBITDA ratio. These ratios are calculated as net debt divided by total equity and EBITDA respectively.

Financial risk management objectives The group’s corporate treasury provides services to the business, coordinates access to domestic and international financial markets and

monitors and manages the financial risks relating to the operations of the group. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.

The main risk areas to which the group is exposed are interest rates, liquidity, currency and commodity prices. Selected derivative and non-derivative hedging instruments are used to hedge risks. Hedging instruments are used to cover risks that affect the group’s cash flows and are not used for trading or speculative purposes.

Treasury management, reporting to the chief financial officer, is responsible for considering and managing the group’s day-to-day financial market risks by adopting strategies within the guidelines set by the treasury policy manual and approved by the risk and sustainability committee. Certain transactions require prior approval of the board of directors.

Compliance with policies and exposure limits are periodically reviewed by the internal auditors.

There has been no change to the group and company’s exposure to market risk or the manner in which these risks are managed and measured.

Interest rate risk management Interest rate risk is the possibility that the group may suffer financial loss due to adverse movements in interest rates. The group is exposed

to interest rate risks mainly in South Africa and the Isle of Man. To minimise the effects of interest rate fluctuations in these countries, the group manages the interest rate risk for net debt denominated in rand and dollar separately. Interest rate hedging activities are reviewed regularly to ensure compliance with acceptable risk tolerance levels.

The rand and dollar interest rate risks are mainly managed on a floating rate basis using derivative instruments, where appropriate, to limit the effects of adverse movements in rates.

There were no interest rate derivatives in place during the year.


Notes to the consolidated financial statements continuedfor the year ended 30 September 2016

1. Financial risk management continued Interest rate risk management continued

The risk profile of interest-bearing financial assets and liabilities at 30 September:

Floating rateliabilities R million

Fixed rateliabilities R million

Floating rateassets

R million

Net liability/(asset)

R million

South African rand 1 827.1 – (83.3) 1 743.8 UK pound – – (52.5) (52.5)US dollar 3 291.2 2 393.2 (2 366.2) 3 318.2 Other currencies 13.4 – (397.6) (384.2)

Total at 30 September 2016 5 131.7 2 393.2 (2 899.6) 4 625.3

South African rand 3 200.2 – (214.2) 2 986.0 UK pound – – (155.3) (155.3)US dollar 2 697.1 2 414.1 (862.8) 4 248.4 Other currencies 19.7 – (516.7) (497.0)

Total at 30 September 2015 5 917.0 2 414.1 (1 749.0) 6 582.1

Weighted average interest rates are as follows:

2016 2015

Bankbalances

%Borrowings*

%

Bank balances

%Borrowings*

%

South African rand 6.7 8.2 5.3 6.9UK pound 0.1 – 0.1 –US dollar 4.3 3.9 0.2 3.3

*Borrowings include overnight call facilities.

Sensitivity analysis If the market interest rates had been 100 basis points higher/lower at 30 September 2016 profit or loss would have been R51.3 million

lower/higher (2015: R59.2 million).

The amount of R51.3 million (2015: R59.2 million) is calculated based on the assumption that the daily average weighted cost of borrowings was higher/lower by 100 basis points throughout the year and such rate was applied to the borrowings as at year-end. This would not necessarily equate to the actual profit or loss as year-end borrowings do not reflect actual borrowings throughout the year.



1. Financial risk management continuedLiquidity risk managementLiquidity risk is the possibility that the group may suffer financial loss through liquid funds not being available or that excessive finance costs must be paid to obtain funds to meet payment requirements. The ultimate responsibility for liquidity risk management rests with the board of directors. The group manages liquidity risk through forecasting and monitoring cash flow requirements on a daily basis, and by maintaining sufficient undrawn facilities.

To reduce credit risk, banking facilities are entered into only with leading financial institutions.

The sharp fall in oil prices from above US$110 a barrel in mid-2014 to below US$30 in early 2016 led to a steep decline in the value of the currencies of oil-exporters Angola and Nigeria. During the year, the Angolan kwanza and the Nigerian naira weakened by 23% and 58% respectively against the US dollar, pressuring public finances and leading to shortages in hard currencies. Significant regulatory uncertainty in Nigeria before and after the unpegging of the naira on 20 June 2016 placed significant pressure on Nampak’s ability to receive US dollar allocations.

A considerable amount of management attention has been applied to these liquidity constraints.

At 30 September, the kwanza equivalent of US$45 million (2015: nil) has been hedged through US dollar indexed Angolan kwanza bonds in order to protect the group against further Angolan kwanza devaluation. The Angola liquidity position has been somewhat better than the previous year under review.

Nigerian liquidity has remained challenging despite the announcement by the Nigerian Central Bank on 17 June 2016 that it would float its currency on 20 June 2016. In Nigeria, US$27 million has been secured in deliverable forward exchange contracts with maturity dates post-year-end with the majority maturing in November 2016.

Accordingly, R990 million (50%) of the group’s cash holdings in Nigeria and Angola were hedged at year-end.

Due to these liquidity constraints the group experienced difficulties in timeously converting the bank balances (in local currency) of the operations into US dollars in order to settle US dollar-denominated group commitments. This combined with the weakened Angolan and Nigerian currencies, resulted in total foreign exchange losses for the group of R681.0 million (2015: R160.5 million) which have been reclassified to abnormal losses as they are not directly attributable to normal trading (refer note 2).

The group remains committed to the operations in these countries with the overall long-term investment rationale based on the demographics underpinning growth in packaging being sound. The group has adequate funding for operations in the rest of Africa and is well positioned to benefit in the medium to long term.

Significant liquid resources were held at year-end. The group had the following undrawn facilities available at 30 September:

South Africa R million

Rest of Africa R million

Europe R million

Total R million

Expiry period at 30 September 2016One year 5 730.0 112.4 851.0 6 693.4

Total 5 730.0 112.4 851.0 6 693.4

Expiry period at 30 September 2015One year 2 251.0 59.9 1 285.9 3 596.8

Total 2 251.0 59.9 1 285.9 3 596.8



1. Financial risk management continued Maturity profile of financial instruments

The maturity profile of financial assets and liabilities at 30 September was as follows:

Notes

Carryingamount

R million

Currentyear

R million

1 – 2years

R million

2 – 3years

R million

3 – 4years

R million

Over4 years

R million

At 30 September 2016Financial assetsNon-current financial assets 8 56.4 – 7.2 5.6 5.9 37.7 Trade receivables and other current assets¹ 11 2 897.9 2 897.9 – – – – Bank balances, deposits and cash equivalents 12 2 835.4 2 835.4 – – – –

Total 5 789.7 5 733.3 7.2 5.6 5.9 37.7

Financial liabilitiesNon-current loans and borrowings 15 6 202.1 – 2 320.2 1 052.2 1 720.6 1 109.1 Trade payables and other current liabilities 18 4 668.7 4 668.7 – – – – Bank overdrafts and loans 15 1 322.8 1 322.8 – – – –

Total 12 193.6 5 991.5 2 320.2 1 052.2 1 720.6 1 109.1

Total at 30 September 2015

Financial assetsNon-current financial assets 8 45.7 – 9.8 3.9 3.6 28.4 Trade receivables and other current assets 11 3 166.2 3 166.2 – – – – Bank balances, deposits and cash equivalents 12 1 587.4 1 587.4 – – – – Assets classified as held for sale² 13 122.2 122.2 – – – –

Total 4 921.5 4 875.8 9.8 3.9 3.6 28.4

Financial liabilitiesNon-current loans and borrowings 15 4 212.0 – 455.1 464.2 869.9 2 422.8 Trade payables and other current liabilities³ 18 4 177.6 4 177.6 – – – – Bank overdrafts and loans 15 4 119.1 4 119.1 – – – –

Total 12 508.7 8 296.7 455.1 464.2 869.9 2 422.8

¹ Prepayments are excluded from trade receivables and other current assets.² Amount relates to a loan to Sancella (Pty) Ltd reclassified to assets held for sale.³ Shareholders for dividends are excluded from trade payables and other current liabilities.

Currency risk managementCurrency risk is the possibility that the group may suffer financial loss as a consequence of the depreciation in the measurement currency relative to the foreign currency prior to payment of a commitment in that foreign currency or the measurement currency strengthening prior to receiving payment in that foreign currency. The group also has translation risk arising from the consolidation of foreign operations into South African rand. Risks from foreign currencies for trading purposes are hedged to the extent that they influence the group’s cash flows.

It is group policy that all foreign exchange exposures of the South African divisions are hedged. Net currency exposures and hedging positions are centrally controlled and managed for South African operations. The currency exposure of the group’s rest of Africa and European operations is centrally controlled and managed by the operations themselves. Speculative positions are not permitted.

The group uses forward exchange contracts (FECs) in particular, together with other hedging instruments such as swaps and options, to manage transactional currency risks. Specific translation risks are managed through the selective use of options and hedge positions. In South Africa, all capital commitments are required to be designated as a cash flow hedge. These hedges are tested for hedge effectiveness on a regular basis. In the current year, a loss on the fair value of FECs amounting to R34.3 million (2015: R56.8 million gain) was taken to equity. When risks and rewards of ownership transfer to the group, an adjustment to the carrying value will be made against the assets. There were no adjustments against the carrying amount of assets during the year (2015: R4.9 million).



1. Financial risk management continuedCurrency risk management continuedMaterial concentrations of currency risk exists within the group’s Angola and Nigeria operations which are responsible for forex losses on the devaluation of the currencies against the US dollar. These currency risks mainly affect cash, cash equivalents and trade receivables.

Where material concentrations of currency risk exists within the group, a sensitivity analysis was performed to calculate what the decrease in profit or loss for the year would have been if the affected individual currencies weakened against the US dollar.

At 30 September 2016, the total possible decrease in profit or loss, calculated for the estimated currency movements, was R118.9 million with the kwanza/US dollar and naira/US dollar exchange rate (with an expected 10% devaluation). These changes had no material effect on the group’s equity.

The amounts were calculated with reference to the financial instruments, exposed to currency risk at the reporting date and does not reflect the group’s exposure throughout the reporting period as these balances may vary significantly due to the self-funding nature of the group’s required working capital and cyclical nature of cash received from sale of merchandise. The possible currency movements were determined based on management’s best estimates taking into account prevailing economic and market conditions and future expectations.

Currency conversion guide at 30 September 2016 2015

Statement of comprehensive income (average)Rand/UK pound 21.07 18.56 Rand/Euro 16.43 13.77 Rand/US dollar 14.79 12.02 Kwanza/US dollar 161.57 114.52Naira/US dollar 229.60 191.21

Statement of financial position (spot)Rand/UK pound 17.80 20.97 Rand/Euro 15.42 15.50 Rand/US dollar 13.72 13.86 Kwanza/US dollar 171.72 140.06Naira/US dollar 315.00 199.00

Sensitivity analysisThe primary currency risk relates to movements in the exchange rates with the US dollar, UK pound and euro.

If the exchange rates with these currencies had weakened by 5% at 30 September 2016, with all other variables held constant, the impact on profit and loss for the year would have been a decrease of R35.5 million (2015: R51.4 million). Conversely, if the exchange rates with these currencies strengthened by 5%, profit and loss would increase by R35.5million (2015: R51.4 million).



1. Financial risk management continuedCurrency risk management continuedIn South Africa, all imports, exports and capital commitments are fully hedged once they are firm and ascertainable. The values of open forward exchange contracts (FECs) entered into at 30 September and their expected maturity profiles are:

Average contract rate Notional amount net imports Fair value (liability)/asset

2016R

2015R

2016R million

2015R million

2016R million

2015R million

Fair value hedges and FECsUS dollar

Less than 3 months 14.68 13.22 (136.0) 391.8 (22.0) 53.5 3 to 6 months 14.96 12.87 (98.1) (92.7) (4.5) 10.9 6 to 9 months 15.31 13.61 (145.4) (77.6) (9.3) 4.4 Greater than 9 months 14.95 14.13 (29.9) (17.7) (0.4) 0.6

EuroLess than 3 months 16.43 14.70 (202.9) (111.3) (6.8) 14.9 3 to 6 months 17.23 15.06 (62.2) (34.4) (3.9) 4.5 6 to 9 months 17.73 14.94 (29.5) (11.5) (2.5) 1.0

UK poundLess than 3 months 21.84 20.32 (5.9) (130.4) 10.0 0.7

OtherLess than 3 months 4.35 13.15 2.5 48.4 (1.1) 12.8

(40.5) 103.3

Commodity price risk managementCommodity price risk is the risk that the group may suffer financial loss when a fluctuating price contract is entered into and commodity prices increase or when a fixed price agreement is entered into and commodity prices fall. The group uses derivative instruments, including forward agreements and futures, to hedge commodity risk.

The values of open future contracts entered into at 30 September and their expected maturity profiles are:

Average contract rate Notional amount Fair value (liability)/asset

2016R

2015R

2016R million

2015R million

2016R million

2015R million

Less than 3 months 23 669 22 450 (33.3) (12.3) (1.0) (0.4)3 to 6 months 23 222 – (28.4) – 0.5 –6 to 9 months 23 225 – (9.9) – 0.3 –

(0.2) (0.4)

Sensitivity analysisIf commodity prices relevant to the group had been 5% higher/lower and all other variables remained constant, profit for the year would have been R3.1 million lower/higher (2015: R0.04 million higher/lower).

At year-end, the primary commodity exposure that the group had related to the purchase price of aluminium.

Credit risk managementCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group.

Potential concentrations of credit risk consist principally of cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as trade debtors. The credit risk on liquid funds and derivative financial instruments is limited because the group’s counterparties are major banks of high standing.

Trade debtors comprise a large, widespread customer base. Ongoing credit evaluations on the financial condition of customers are performed, taking into account financial position and past experience.

The group does not consider there to be any significant concentration of credit risk which has not been insured or adequately provided for at year-end.



1. Financial risk management continuedCarrying amount of financial instrumentsThe group’s financial instruments consist mainly of investments, bank balances, deposits and cash equivalents, trade receivables and other financial assets, trade payables and other financial liabilities, interest-bearing borrowings and derivative financial instruments.

The following financial assets and financial liabilities are reflected at their carrying amount at year-end, and not measured at fair value due to their relative short-term nature or other measurement requirements:

Loans and other non-current receivables: the carrying amount of loans and receivables is shown at amortised cost.

Available-for-sale financial assets: these assets consist of unlisted investments and management is of the opinion that the carrying amount of these investments approximates their cost. These investments have no quoted market price in an active market, and are thus shown at cost as the fair value cannot be reliably measured. The investments have also been assessed for impairment, and no indicators were identified.

Bank balances, deposits and cash equivalents: these financial assets are measured at amortised cost.

Trade receivables and other financial assets: these financial assets are measured at amortised cost.

Trade payables and other financial liabilities: these financial liabilities are measured at amortised cost.

Non-current and current borrowings: the carrying amounts of non-current and current borrowings are shown at amortised cost.

The following financial assets and financial liabilities are carried at fair value at year-end:

Derivative financial instruments: derivative financial instruments are measured at fair value based on calculations using mark-to-market valuations.

The group’s financial instruments carried at fair value are classified into three categories defined as follows:

Level 1 –- financial instruments are those that are valued using unadjusted quoted prices in active markets for identical financial instruments. The group had no level 1 financial instruments at year-end.

Level 2 – financial instruments are those valued using techniques based primarily on observable market data. Instruments in this category are valued using quoted prices for similar instruments or identical instruments in markets which are not considered to be active, or valuation techniques where all the inputs that have a significant effect on the valuation are directly or indirectly based on observable market data. Financial instruments classified as level 2 consist of forward exchange contracts and commodity futures (as set out above) and their fair value is determined using the contract exchange rate at measurement date, with the resulting value discounted back to the present value.

Level 3 – financial instruments are those valued using techniques that incorporate information other than observable market data. Instruments in this category have been valued using a valuation technique where at least one input, which could have a significant effect on the instrument’s valuation, is not based on observable market data. The group had no level 3 financial instruments at year-end.

The carrying amounts of financial instruments as presented on the statement of financial position are measured as follows:

Notes

Carrying amount

R million

At fair value– level 2R million

At amortisedcost

R millionAt cost

R million

At 30 September 2016Financial assetsNon-current financial assets 8 56.4 – 56.4 – Trade receivables and other current assets¹ 11 2 897.9 – 2 897.9

Trade receivables 2 594.9 – 2 594.9 – Other receivables 303.0 – 303.0 –

Bank balances, deposits and cash equivalents 12 2 835.4 – 2 835.4 –

Total 5 789.7 – 5 789.7 –



1. Financial risk management continuedCarrying amount of financial instruments continued

Notes

Carrying amount

R million

At fair value– level 2R million

At amortisedcost

R millionAt cost

R million

At 30 September 2016

Financial liabilitiesNon-current loans and borrowings 15 6 202.1 – 6 202.1 – Trade payables and other current liabilities 18 4 668.7 40.7 4 628.0

Trade payables 2 431.9 – 2 431.9 – Derivative financial liabilities 40.7 40.7 – – Other payables 2 196.1 – 2 196.1 –

Bank overdrafts and loans 15 1 322.8 – 1 322.8 –

Total 12 193.6 40.7 12 152.9 –

At 30 September 2015 Financial assetsNon-current financial assets 8 45.7 – 33.0 12.7 Trade receivables and other current assets¹ 11 3 166.2 178.2 2 988.0 –

Trade receivables 2 726.9 – 2 726.9 – Derivative financial assets 178.2 178.2 – – Other receivables 261.1 – 261.1 –

Bank balances, deposits and cash equivalents 12 1 587.4 – 1 587.4 – Assets classified as held for sale3 13 122.2 – 122.2 –

Total 4 921.5 178.2 4 730.6 12.7

Financial liabilitiesNon-current loans and borrowings 15 4 212.0 – 4 212.0 – Trade payables and other current liabilities² 18 4 177.6 75.3 4 102.3 –

Trade payables 2 520.1 – 2 520.1 – Derivative financial liabilities 75.3 75.3 – – Other payables 1 582.2 – 1 582.2 –

Bank overdrafts and loans 15 4 119.1 4 119.1

Total 12 508.7 75.3 12 433.4 –

¹ Prepayments are excluded from trade receivables and other current assets.² Shareholders for dividends are excluded from trade payables and other current liabilities.³ Amount relates to a loan to Sancella (Pty) Ltd reclassified to assets held for sale.



2. Segmental report

External revenue Internal revenue Trading profit1 Trading margin EBITDA2 Operating assets Operating liabilities Capital expenditure

Segment analysis2016

R million2015

R million2016

R million2015

R million2016

R million2015

R million2016

%2015

%2016

R million2015

R million2016

R million2015

R million2016

R million2015

R million2016

R million2015

R million

Metals 10 510.1 9 933.2 39.8 52.4 1 284.9 1 202.5 12.2 12.1 918.7 1 371.2 9 802.5 10 296.8 3 138.4 3 141.7 843.8 1 609.3 Glass 1 322.7 876.7 – – 104.5 (81.1) 7.9 (9.3) 305.5 55.5 2 390.1 2 331.1 197.6 245.3 150.7 191.7 Plastics 5 556.6 5 011.4 9.9 7.5 392.2 361.8 7.1 7.2 616.8 521.9 2 966.4 3 010.5 944.2 909.7 375.0 242.4 Paper 1 749.5 1 470.0 7.9 6.2 235.9 211.1 13.5 14.4 299.9 249.7 1 132.6 1 368.3 514.9 319.5 52.9 72.0 Corporate – – 2 828.0 2 992.5 (112.4) 145.3 – – 1 294.0 406.8 6 336.2 6 825.0 1 876.4 1 151.9 21.2 36.3 Eliminations – – (2 885.6) (3 058.6) – – – – – – (1 505.4) (1 347.1) (1 696.8) (1 287.9) – –

Continuing operations 19 138.9 17 291.3 – – 1 905.1 1 839.6 10.0 10.6 3 434.9 2 605.1 21 122.4 22 484.6 4 974.7 4 480.2 1 443.6 2 151.7 Discontinued operations – 3 324.9 – 60.8 – 43.2 1.3 – (416.6) – 16.6 – – – 43.5 Eliminations – – – (60.8) – – – – – – – – – – – –

Total 19 138.9 20 616.2 – – 1 905.1 1 882.8 10.0 9.1 3 434.9 2 188.5 21 122.4 22 501.2 4 974.7 4 480.2 1 443.6 2 195.2

Geographical analysis (continuing operations):South Africa 10 958.8 10 599.5 322.7 259.6 942.0 695.1 8.6 6.6 1 341.2 1 067.1 9 729.3 8 918.0 2 237.5 2 409.9 1 061.2 1 405.1 Rest of Africa 5 949.8 4 723.9 83.8 66.5 990.2 882.8 16.6 18.7 627.1 969.6 6 019.1 7 254.4 2 523.0 1 978.2 235.9 678.7 Europe 2 230.3 1 967.9 – – 85.3 116.4 3.8 5.9 172.6 161.6 871.0 1 015.6 342.1 380.1 125.3 31.6 Corporate – – 2 828.0 2 992.5 (112.4) 145.3 – – 1 294.0 406.8 6 336.2 6 825.0 1 876.4 1 223.1 21.2 36.3 Eliminations – – (3 234.5) (3 318.6) – – – – – – (1 833.2) (1 528.4) (2 004.3) (1 511.1) – –

19 138.9 17 291.3 – – 1 905.1 1 839.6 10.0 10.6 3 434.9 2 605.1 21 122.4 22 484.6 4 974.7 4 480.2 1 443.6 2 151.7 1 Operating profit before abnormal items.2 EBITDA calculation is before net impairments/(reversals).

Reconciliation of operating profit/(loss) and trading profit

Continuing operations Discontinued operations Total

2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

Operating profit/(loss) 2 162.8 1 681.4 – (503.8) 2 162.8 1 177.6Abnormal losses/(gains)*

Retrenchment and restructuring costs 34.1 77.3 – 119.1 34.1 196.4Net impairment losses on property, plant, equipment, intangible assets, investments and shareholder loans 360.4 121.4 – 77.7 360.4 199.1Profit on disposal of property subject to sale and leaseback (1 318.9) – – – (1 318.9) –Profit on disposal of other property (15.2) (102.5) – – (15.2) (102.5)Net (profit)/loss on disposal of investments and businesses (3.5) – – 350.2 (3.5) 350.2Gain on revaluation and consolidation of Zimbabwe entities – (124.2) – – – (124.2)Devaluation loss arising from Angolan and Nigerian illiquidity 681.0 160.5 – – 681.0 160.5Business acquisition-related costs 4.4 25.7 – – 4.4 25.7

Trading profit 1 905.1 1 839.6 – 43.2 1 905.1 1 882.8

* Abnormal losses/(gains) are defined as losses and gains which do not arise from normal trading activities or are of such a size, nature or incidence that their disclosure is relevant to explain the performance for the period.



2. Segmental report

External revenue Internal revenue Trading profit1 Trading margin EBITDA2 Operating assets Operating liabilities Capital expenditure

Segment analysis2016

R million2015

R million2016

R million2015

R million2016

R million2015

R million2016

%2015

%2016

R million2015

R million2016

R million2015

R million2016

R million2015

R million2016

R million2015

R million

Metals 10 510.1 9 933.2 39.8 52.4 1 284.9 1 202.5 12.2 12.1 918.7 1 371.2 9 802.5 10 296.8 3 138.4 3 141.7 843.8 1 609.3 Glass 1 322.7 876.7 – – 104.5 (81.1) 7.9 (9.3) 305.5 55.5 2 390.1 2 331.1 197.6 245.3 150.7 191.7 Plastics 5 556.6 5 011.4 9.9 7.5 392.2 361.8 7.1 7.2 616.8 521.9 2 966.4 3 010.5 944.2 909.7 375.0 242.4 Paper 1 749.5 1 470.0 7.9 6.2 235.9 211.1 13.5 14.4 299.9 249.7 1 132.6 1 368.3 514.9 319.5 52.9 72.0 Corporate – – 2 828.0 2 992.5 (112.4) 145.3 – – 1 294.0 406.8 6 336.2 6 825.0 1 876.4 1 151.9 21.2 36.3 Eliminations – – (2 885.6) (3 058.6) – – – – – – (1 505.4) (1 347.1) (1 696.8) (1 287.9) – –

Continuing operations 19 138.9 17 291.3 – – 1 905.1 1 839.6 10.0 10.6 3 434.9 2 605.1 21 122.4 22 484.6 4 974.7 4 480.2 1 443.6 2 151.7 Discontinued operations – 3 324.9 – 60.8 – 43.2 1.3 – (416.6) – 16.6 – – – 43.5 Eliminations – – – (60.8) – – – – – – – – – – – –

Total 19 138.9 20 616.2 – – 1 905.1 1 882.8 10.0 9.1 3 434.9 2 188.5 21 122.4 22 501.2 4 974.7 4 480.2 1 443.6 2 195.2

Geographical analysis (continuing operations):South Africa 10 958.8 10 599.5 322.7 259.6 942.0 695.1 8.6 6.6 1 341.2 1 067.1 9 729.3 8 918.0 2 237.5 2 409.9 1 061.2 1 405.1 Rest of Africa 5 949.8 4 723.9 83.8 66.5 990.2 882.8 16.6 18.7 627.1 969.6 6 019.1 7 254.4 2 523.0 1 978.2 235.9 678.7 Europe 2 230.3 1 967.9 – – 85.3 116.4 3.8 5.9 172.6 161.6 871.0 1 015.6 342.1 380.1 125.3 31.6 Corporate – – 2 828.0 2 992.5 (112.4) 145.3 – – 1 294.0 406.8 6 336.2 6 825.0 1 876.4 1 223.1 21.2 36.3 Eliminations – – (3 234.5) (3 318.6) – – – – – – (1 833.2) (1 528.4) (2 004.3) (1 511.1) – –

19 138.9 17 291.3 – – 1 905.1 1 839.6 10.0 10.6 3 434.9 2 605.1 21 122.4 22 484.6 4 974.7 4 480.2 1 443.6 2 151.7 1 Operating profit before abnormal items.2 EBITDA calculation is before net impairments/(reversals).

Revenue to external customers*

2016R million

2015R million

Geographical informationSouth Africa 9 967.6 11 379.8 United Kingdom 2 115.2 2 209.0 Angola 1 664.3 1 635.4 Nigeria 2 267.4 1 494.9 Rest of the world 3 124.4 3 897.1

19 138.9 20 616.2

* Revenue is attributed to countries on the basis of the customer’s location.

Non-current assets*

2016R million

2015R million

Geographical informationSouth Africa 5 995.1 5 863.4 Angola 2 072.7 2 442.7 Nigeria 1 142.0 1 340.9 United Kingdom 520.5 603.2 Rest of the world 4 914.2 4 949.7

14 644.5 15 199.9

* Non-current assets exclude financial instruments, deferred tax assets, post-employment benefit assets and rights arising under insurance contracts.



2. Segmental report continuedOperating segments are identified on the same basis that financial information is reported internally for the purpose of allocating resources between segments and assessing their performance by the group’s chief operating decision-maker, defined as the group executive committee. Reportable segments have been identified after applying the quantitative thresholds per IFRS 8: Operating Segments, and after aggregating operating segments with similar economic characteristics.

The principal activities of the segments are as follows:

Metals – manufacture of beverage cans, food cans, aerosol cans and other metal packaging.

Glass – manufacture of various types of glass packaging.

Plastics – manufacture of plastic bottles, crates, drums and tubes.

Paper – manufacture of corrugated boxes and folding cartons.

Corporate – head office activities, procurement, treasury, property services and consolidation adjustments including goodwill.

The differences between the measurements of the reportable segments’ profit and losses and assets and liabilities, and the group’s profit and losses and assets and liabilities are as follows:•• Reportable segments’ contributions to post-retirement medical aid funds and pension funds are expensed as and when incurred, while at group these funds are actuarially valued and accounted for as per the group accounting policy (refer to accounting policy note 12).

•• Reportable segments’ account for profit and loss on close-out of forward exchange contracts while at group forward exchange contracts are fair valued and the fair value adjustments are accounted for as per the group accounting policy (refer to accounting policy note 19).

There is no individual customer who contributes more than 10% to the group’s total revenue.

In addition, the businesses are grouped by geographical location. The main geographical regions identified are South Africa, United Kingdom, Angola, Nigeria and rest of the world. Geographical split is determined by location of the operating assets.



3. Property, plant and equipment

Freehold land andbuildings R million

Leasehold buildings R million

Plant, equipment

and vehicles R million

Capitalised leased plant and vehicles

R million

Total property, plant and

equipment R million

Investment properties

R million

Gross carrying amountAt 1 October 2014 1 428.5 647.8 13 939.2 23.6 16 039.1 25.8 Additions 9.2 206.5 1 907.9 – 2 123.6 – Transfer from equity on cash flow hedges – – (4.9) – (4.9) – Interest capitalised – – 100.0 – 100.0 – Business combinations 175.8 – 529.4 – 705.2 0.3 Disposals (15.1) – (168.3) (2.5) (185.9) (11.5)Disposal of businesses (318.2) (1.5) (2 024.8) (2.5) (2 347.0) – Impairment loss (3.1) (1.5) (117.1) – (121.7) – Reversal of impairment loss – – 0.3 – 0.3 – Reclassified to assets held for sale (30.2) – – – (30.2) – Translation differences 56.6 189.5 936.9 – 1 183.0 0.1 Other movements 89.9 (2.1) (99.2) 0.1 (11.3) –

At 30 September 2015 1 393.4 1 038.7 14 999.4 18.7 17 450.2 14.7 Additions 6.7 6.7 1 414.0 – 1 427.4 – Interest capitalised – – 37.9 – 37.9 – Disposals – sale and leaseback* (354.8) – (119.8) – (474.6) (4.0)Disposals – other (15.6) (0.4) (406.0) (3.4) (425.4) –Impairment loss – – (347.2) – (347.2) – Translation differences (109.7) (11.1) (599.6) – (720.4) – Other movements 57.8 3.9 (84.2) – (22.5) (0.3)

At 30 September 2016 977.8 1 037.8 14 894.5 15.3 16 925.4 10.4

Accumulated depreciationAt 1 October 2014 396.1 81.4 5 693.7 20.1 6 191.3 9.3 Depreciation charge for the year 30.5 31.1 704.6 0.4 766.6 1.6 Business combinations 4.8 – 286.6 – 291.4 – Disposals (2.4) – (143.0) (2.0) (147.4) (4.0)Disposal of businesses (102.1) (1.1) (966.1) (1.9) (1 071.2) – Reclassified to assets held for sale (6.0) – – – (6.0) – Translation differences 8.3 19.9 388.4 – 416.6 0.2 Other movements 12.0 0.7 (20.6) (0.1) (8.0) (1.2)

At 30 September 2015 341.2 132.0 5 943.6 16.5 6 433.3 5.9 Depreciation charge for the year 30.5 31.5 800.2 0.2 862.4 0.7 Disposals – sale and leaseback* (92.9) – (9.2) – (102.1) (1.9)Disposals – other (4.8) (0.4) (370.2) (3.2) (378.6) –Translation differences (37.6) (3.5) (408.2) – (449.3) 0.1 Other movements 5.9 (2.4) (11.0) 0.1 (7.4) (0.7)

At 30 September 2016 242.3 157.2 5 945.2 13.6 6 358.3 4.1

Net book value at 30 September 2016 735.5 880.6 8 949.3 1.7 10 567.1 6.3

Net book value at 30 September 2015 1 052.2 906.7 9 055.8 2.2 11 016.9 8.8

* The group entered into a sale and leaseback transaction for the sale and leaseback of 15 of its industrial properties effective 1 September. Refer to note 27.



3. Property, plant and equipment continued

2016R million

2015R million

Property rental income earned by the group from its investment property under operating leases 5.5 7.3

Impairment losses have been recognised on certain plant and equipment where the carrying value exceeded the higher of value-in-use or fair value less cost to sell.

Change in accounting estimateAs of 1 October 2015, the group changed its method of depreciating plant at its Bevcan operations from the straight-line method to the units of production method, as it was felt that the latter method reflects more appropriately the pattern of the consumption of the future economic benefits embodied in the assets concerned. In accordance with IAS 16: Property, Plant and Equipment, this change is an accounting estimate and is therefore applied prospectively in terms of IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors. The impact of the change in depreciation method for the year ended 30 September 2016 is a decrease in the depreciation expense of R122.0 million.

4. Goodwill

R million

Carrying amountAt 1 October 2014 3 166.1 Disposal of business (34.0)Translation differences 597.7 Other 39.2

At 30 September 2015 3 769.0 Translation differences (34.6)

At 30 September 2016 3 734.4

The allocation of goodwill by cash-generating unit (CGU) is presented below:

Cost R million

Cumulative impairment

R million

Net carrying value

R million

At 30 September 2015Metals 3 374.7 (18.4) 3 356.3 Glass 321.1 – 321.1 Plastics 114.0 (60.1) 53.9 Paper 37.7 – 37.7

3 847.5 (78.5) 3 769.0

At 30 September 2016Metals 3 340.5 (18.4) 3 322.1Glass 321.1 – 321.1 Plastics 114.0 (60.1) 53.9 Paper 37.3 – 37.3

3 812.9 (78.5) 3 734.4

The group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.



4. Goodwill continuedThe recoverable amounts of the CGUs are determined using value-in-use calculations. These calculations use cash flow projections based on the most recent financial budgets approved by management for the next five years. Cash flows beyond the five-year period are extrapolated using the growth rates below:

Key assumptions used for value-in-use calculations

South Africa %

Rest of Africa %

Nigeria** %

Europe %

2015Growth rate* 5.5 2.0 – 2.0Discount rate (post-tax) 10.8 8.8 – 6.3

2016Growth rate* 5.6 2.3 – 13.5 2.3 – 12.8 2.2Discount rate (post-tax) 11.8 7.5 – 18.0 10.3 – 21.7 5.2Discount rate (pre-tax) 14.2 9.6 – 21.5 12.5 – 21.8 5.4

* The growth rates are obtained from external sources of information and are used in the calculation of the termination value after the five-year management estimate of cash flows.

** Included in rest of Africa in prior year.

Management estimates discount rates using the post-tax average weighted cost of capital for the group, adjusted for risks associated with the geographical markets in which the CGUs operate. A post-tax rate is used due to the different tax rates applicable in the tax jurisdictions concerned. Growth rates are based on industry growth rate forecasts.

Nigeria’s discount rate has been specifically increased by a further 1.5% to accommodate for the risk associated with illiquidity in the market.

Additionally, management considers the impact of sales volumes both from a market and customer variation point of view, production efficiencies and the impact of fluctuations in overhead when determining the cash flow projections used in value-in-use calculations. Sensitivity in the calculation of headroom, being the difference between the value-in-use and the net asset value (including goodwill) is assessed through the value-in-use calculation process and it is the determination of management that headroom is not adversely affected by these movements.

The present value of the future cash flows expected to be derived from the Nampak Glass and Bevcan Nigeria operations exceed the carrying amount of their CGUs. Cash flow projections are supported by reasonable assumptions. There has been no deterioration in the capability of assets within these CGUs to generate cash flows and further to this there is no persuasive evidence that the assets associated with the goodwill can no longer demonstrate the financial results that were expected from them at the time of the respective purchases. Therefore no impairment of goodwill is required for either the Nampak Glass or Bevcan Nigeria operations.

In the prior year, goodwill of R34.0 million was included in the disposal of the Flexibles business.



5. Other intangible assets

ERP systems and software

R million Other*

R million Total

R million

CostAt 1 October 2014 439.5 329.7 769.2 Additions 11.7 59.9 71.6 Business combinations – 63.3 63.3 Disposals (4.0) – (4.0)Disposal of businesses (71.3) (35.8) (107.1)Translation differences (0.4) 18.6 18.2 Other movements (1.2) 0.2 (1.0)

At 30 September 2015 374.3 435.9 810.2 Additions 15.6 0.6 16.2 Disposals (170.7) – (170.7)Impairment loss (8.5) – (8.5)Translation differences (3.5) (1.0) (4.5)Other movements 11.3 (4.0) 7.3

At 30 September 2016 218.5 431.5 650.0

AmortisationAt 1 October 2014 406.2 109.6 515.8 Charge for the year 10.0 33.6 43.6 Disposals (3.9) – (3.9)Disposal of businesses (69.3) (25.8) (95.1)Translation differences (0.9) 0.5 (0.4)Other movements 0.6 – 0.6

At 30 September 2015 342.7 117.9 460.6 Charge for the year 14.2 34.4 48.6 Disposals (170.7) – (170.7)Translation differences (1.7) (0.3) (2.0)Other movements 5.8 (1.3) 4.5

At 30 September 2016 190.3 150.7 341.0

Net carrying value at 30 September 2016 28.2 280.8 309.0

Net carrying value at 30 September 2015 31.6 318.0 349.6

* Other intangible assets consist of patents, trademarks, licences and customer relationships.



6. Investments in associates

2016R million

2015R million

(Refer to Annexure B for details)Cost of investments in associates 4.1 4.9 Share of other post-acquisition reserves 3.7 3.9 Share of post-acquisition profit, net of dividend received 12.0 13.2

Opening balance 13.2 69.2 Decrease in interest 0.1 – Consolidation of Zimbabwe associates – (53.4)Share of current year loss (1.3) (2.6)

19.8 22.0

The financial year-ends of Group Risk Holdings (Pty) Ltd and Collect-a-Can (Pty) Ltd are 30 September and 31 December respectively.

The group’s interest in Group Risk Holdings (Pty) Ltd decreased from 22.1% to 16.8% during the year. This was a consequence of Nampak’s insurance premium being reduced due to our contribution to the associated mutual risk group having decreased following the disposal of the assets relating to the SA Paper divisions.

During the prior year, the group acquired a controlling interest in the associates located in Zimbabwe, Megapak Zimbabwe (Pvt) Ltd (previously 49.0% interest) and Hunyani Holdings Ltd (previously 38.9% interest) (see note 30).

Summarised financial information in respect of the group’s associates is set out below:

Revenue 326.0 451.2 Net loss for the year (2.3) (10.6)Group’s share of associates’ net loss for the year (1.3) (2.6)

Total assets 494.3 403.1 Total liabilities 430.7 341.8

Net assets 63.6 61.3

Group’s share of associates’ net assets 19.8 22.0

7. Investments in joint ventures

2016R million

2015R million

(Refer to Annexure B for details)Cost of investments in joint ventures 5.9 36.8 Share of other post-acquisition reserves – 0.6 Share of post-acquisition net profit/(loss), net of dividend received 1.1 (29.2)

Opening balance (29.2) (25.0)Disposal of joint ventures 28.9 – Share of current year net profit/(loss)– continuing operations 1.4 (1.2)– discontinued operations – (3.0)

Translation differences 0.9 1.2

7.9 9.4



7. Investments in joint ventures continued

2016R million

2015R million

The financial year-end of Softex Tissue Products (Pvt) Ltd is 30 September.

During the current year, the group disposed of its interests in Sancella SA (Pty) Ltd (effective 1 December 2015) and Crown Cork Company (Mozambique) LDA (effective 15 March 2016). The proceeds from the disposal of the interests in Sancella SA (Pty) Ltd were applied to settle outstanding loan balances.

Summarised financial information in respect of the group’s joint ventures is set out below:

Revenue 167.6 583.2 Net loss for the year (26.0) (55.0)Group’s share of joint ventures’ net profit/(loss) for the year 1.4 (4.2)

Total assets 24.5 448.2 Total liabilities 9.6 477.9

Net assets/(liabilities) 14.9 (29.7)

Group’s share of joint ventures’ net assets 7.9 9.4

8. Non-current financial assetsAvailable-for-sale financial assets(Refer to Annexure B for details)Unlisted investments – 12.7

– 12.7

Loans and receivablesEquipment sales receivables1 62.3 34.3 Other loans and receivables 1.9 5.1

Total loans and receivables 64.2 39.4 Less: Amounts receivable within one year, reflected in trade receivables and other current assets (note 11) 7.8 6.4

Net non-current loans and receivables 56.4 33.0

Total non-current financial assets 56.4 45.7 1 Equipment sales receivables are repayable from 2017 to 2021. Interest rates charged are from 9.5% to 13.0%.



9. Deferred taxThe following are the major deferred tax liabilities and assets recognised by the group, and the movements thereon, during the current and prior reporting periods:

Accelerated tax

depreciationR million

Provisions R million

Pre-payments R million

Retirement benefit

obligation R million

Tax losses R million

Other R million

Total R million

At 1 October 2014 1 009.2 (250.8) 9.4 (580.0) (77.7) 199.1 309.2 Charge/(credit) to other comprehensive income for the year 39.1 – – (4.7) – (1.1) 33.3 (Credit)/charge to profit for the year (152.6) 4.6 (0.3) 103.1 (106.3) (75.3) (226.8)Business combinations 68.1 (3.9) 0.5 – 0.6 10.2 75.5 Translation differences (2.3) 2.3 0.3 – 4.7 (12.3) (7.3)

At 30 September 2015 961.5 (247.8) 9.9 (481.6) (178.7) 120.6 183.9 (Credit)/charge to other comprehensive income for the year – – – (8.4) – (50.5) (58.9)Charge/(credit) to profit for the year 312.7 3.8 7.4 20.0 (243.7) (77.9) 22.3 Translation differences (24.3) 2.4 0.1 24.5 (2.3) 11.8 12.2

At 30 September 2016 1 249.9 (241.6) 17.4 (445.5) (424.7) 4.0 159.5

2016R million

2015R million

Analysed between:Deferred tax assets 70.6 145.3 Deferred tax liabilities 230.1 329.2

159.5 183.9

At year-end, the group had unused tax losses of R1 690.6 million (2015: R520.4 million) available for offset against future taxable profits. Deferred tax assets have been recognised in respect of R1 566.1 million (2015: R436.7 million) of such losses. No deferred tax asset has been recognised on the remaining R124.5 million (2015: R83.7 million) due to the unpredictability of future profit streams. There are no expiry dates on the tax losses.

In addition, the group had capital losses available for utilisation against future capital gains to the value of R2 084.4 million (2015: R2 648.2 million). During the year, R864.3 million (2015: R181.4 million) of the capital losses were utilised. Deferred tax has been raised on R188.9 million (2015: R342.3 million) of the losses.



10. Inventories

2016R million

2015R million

Raw materials 1 457.6 1 914.1 Work in progress 41.3 52.8 Finished goods 1 137.8 1 169.8 Consumables 740.0 753.9

Total 3 376.7 3 890.6

Carrying amount of inventories included at net realisable value 154.2 157.2 Amount of write-down of inventory to net realisable value included in raw materials and consumables used 51.1 2.5 Amount of reversals of previous inventory write-downs included in raw materials and consumables used – 11.2

11. Trade receivables and other current assetsTrade receivables 2 594.9 2 726.9 Prepayments 211.1 238.2 Derivative financial instruments (note 1) – 178.2 Current portion of loans and receivables (note 8) 7.8 6.4 Royalties receivable 164.5 118.7Other 130.7 136.0

Total 3 109.0 3 404.4

The directors consider that the carrying amounts of trade receivables and other current assets approximate their fair values due to the short-term nature of these assets. The total amount receivable represents the maximum exposure to credit risk for trade receivables and other current assets, before any credit enhancements or collateral that may be held.

The average credit term on the sale of goods is 30 days. The group does not permit general provisions for doubtful debts based solely on the age of receivables. The allowance for doubtful debt is provided for on the basis of the estimated irrecoverable amounts from the sale of goods, determined by historical trend analysis for similar classes of receivables.

Included in the group’s trade receivable balance are debtors with a carrying value of R635.5 million (2015: R589.5 million) which are past due at the reporting date for which the group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The group does not hold any collateral over these balances.

Ageing of past due but not impaired trade receivables30 days and less 425.2 283.6 30 – 60 days 106.7 154.5 60 – 90 days 38.0 57.7 90 – 180+ days 65.6 93.7

Total 635.5 589.5



11. Trade receivables and other current assets continuedAn allowance of R46.0 million (2015: R57.3 million) has been made for estimated irrecoverable amounts from the sale of goods. This allowance has been determined by reference to past default.

2016R million

2015R million

Analysis of the allowance for doubtful debtsBalance at beginning of year 57.3 94.3 Impairment losses recognised on receivables 21.0 21.4 Amounts written off during the year (15.2) (3.5)Disposal of businesses – (48.8)Impairment losses reversed (12.1) (17.9)Translation differences (5.0) 11.8

Balance at end of year 46.0 57.3

In determining the recoverability of a trade receivable, the group considers any change in the credit quality of the trade receivable from the date the credit was initially granted up to the reporting date. With the exception of a few multinationals, the concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the board of directors believes that there is no further credit provision required in excess of the allowance for doubtful debts.

12. Bank balances, deposits and cash equivalentsCash at bank 1 251.8 997.6 Short-term bank deposits 966.1 589.8Cash equivalents* 617.5 –

Total 2 835.4 1 587.4 * Cash equivalents relate to US dollar indexed Angolan kwanza bonds. As at 30 September the Angolan

kwanza equivalent of US$45 million had been hedged through these bonds in order to protect the group against further Angolan kwanza devaluation.

Analysed between:South African rand 45.3 56.0 Foreign currencies 2 790.1 1 531.4

2 835.4 1 587.4

13. Assets held for saleAssets which are expected to be sold in the next 12 months are classified as held for sale and are presented separately in the statement of financial position.

Assets relating to the discontinued operation in the previous year consisted of an immovable property used by Nampak Flexibles which had not been formally transferred at the end of September 2015, as well as the loan to Sancella SA (Pty) Ltd. These assets were disposed of during the first quarter of the current financial year.

The additional property classified as held for sale related to the Liquid Packaging business and was disposed of in September 2016 along with the properties that were subject to the sale and leaseback transaction (note 27).

2016R million

2015R million

Assets classified as held for saleProperty – 7.6 Assets relating to the discontinued operation – 138.8

Total – 146.4

The major classes of assets and liabilities of the discontinued operations at the end of the year are as follows:Property – 16.6 Current portion of loans and receivables – 122.2

Total – 138.8



14. Capital and reserves

Capital reserves Other reserves

Notes

Share capital

R million

Share premiumR million

Treasury shares

R million

Share-based

payments reserve

R million

Foreign currency

translation reserve

R million

Financial instruments

hedging reserve

R million

Recognised actuarial

lossesR million

Share of non-

distributable reserves in associates and joint venturesR million

Available-for-sale

financial assets

revaluation reserve

R millionOther

R million

Retained earningsR million

Total attributable

to owners of Nampak

LtdR million

Non-controlling

interestR million

Total equity

R million

Reconciliation of movement in capital and reservesAt 1 October 2014 36.1 147.0 (827.6) 278.3 1 314.2 1.2 (966.0) 3.9 (38.3) 0.2 7 985.1 7 934.1 (51.0) 7 883.1 Employee share option scheme:– value of employee services – – – (2.6) – – – – – – – (2.6) – (2.6)– share grants exercised – – – (75.0) – – – – – – – (75.0) – (75.0)– proceeds from shares issued –-* 74.9 – – – – – – – – – 74.9 – 74.9 Share of associates’ and joint ventures’ non-distributable reserves – – – – – – – 0.6 – – – 0.6 – 0.6 Consolidation of Zimbabwe associates – – – – – – – – – – 25.2 25.2 331.6 356.8 Currency translation differences – – – – 703.6 – – – – – – 703.6 71.0 774.6 Gain on cash flow hedges – – – – – 56.8 – – – – – 56.8 – 56.8 Transfer from cash flow hedging reserve to assets – – – – – (4.9) – – – – – (4.9) – (4.9)Net actuarial loss – – – – – – (9.6) – – – – (9.6) – (9.6)Non-controlling interest realised with disposal of subsidiary – – – – – – – – – – – – 2.6 2.6 Profit for the year – – – – – – – – – – 1 043.2 1 043.2 18.1 1 061.3 Dividends paid 31 – – – – – – – – – – (943.9) (943.9) (2.3) (946.2)

At 30 September 2015 36.1 221.9 (827.6) 200.7 2 017.8 53.1 (975.6) 4.5 (38.3) 0.2 8 109.6 8 802.4 370.0 9 172.4 Employee share option scheme:– value of employee services – – – 13.9 – – – – – – – 13.9 – 13.9 – share grants exercised – – – (28.8) – – – – – – – (28.8) – (28.8)– proceeds from shares issued 0.1 28.8 – – – – – – – – – 28.9 – 28.9 Share of associates’ non-distributable reserves – – – – – – – 0.9 – – – 0.9 – 0.9 Shares repurchased and cancelled (0.8) – – – – – – – – – – (0.8) – (0.8)Treasury shares disposed – – 269.7 – – – – – – – 114.5 384.2 – 384.2 Disposal of investments – – – – (10.4) – – (1.7) 38.3 – (26.2) – – – Currency translation differences – – – – (512.5) – – – – – – (512.5) 3.1 (509.4)Loss on cash flow hedges – – – – – (34.3) – – – – – (34.3) – (34.3)Net actuarial loss – – – – – – (491.0) – – – – (491.0) – (491.0)Profit for the year – – – – – – – – – – 1 610.4 1 610.4 (132.1) 1 478.3 Dividends paid 31 – – – – – – – – – – (569.8) (569.8) – (569.8)

At 30 September 2016 35.4 250.7 (557.9) 185.8 1 494.9 18.8 (1 466.6) 3.7 – 0.2 9 238.5 9 203.5 241.0 9 444.5

* Less than R100 000.




Capital reserves Other reserves

Notes

Share capital

R million


Treasury shares

R million

Share-based

payments reserve

R million

Foreign currency

translation reserve

R million

Financial instruments

hedging reserve

R million

Recognised actuarial

lossesR million

Share of non-

distributable reserves in associates and joint venturesR million

Available-for-sale

financial assets

revaluation reserve

R millionOther

R million


Total attributable

to owners of Nampak

LtdR million

Non-controlling

interestR million

Total equity

R million

Reconciliation of movement in capital and reservesAt 1 October 2014 36.1 147.0 (827.6) 278.3 1 314.2 1.2 (966.0) 3.9 (38.3) 0.2 7 985.1 7 934.1 (51.0) 7 883.1 Employee share option scheme:– value of employee services – – – (2.6) – – – – – – – (2.6) – (2.6)– share grants exercised – – – (75.0) – – – – – – – (75.0) – (75.0)– proceeds from shares issued –-* 74.9 – – – – – – – – – 74.9 – 74.9 Share of associates’ and joint ventures’ non-distributable reserves – – – – – – – 0.6 – – – 0.6 – 0.6 Consolidation of Zimbabwe associates – – – – – – – – – – 25.2 25.2 331.6 356.8 Currency translation differences – – – – 703.6 – – – – – – 703.6 71.0 774.6 Gain on cash flow hedges – – – – – 56.8 – – – – – 56.8 – 56.8 Transfer from cash flow hedging reserve to assets – – – – – (4.9) – – – – – (4.9) – (4.9)Net actuarial loss – – – – – – (9.6) – – – – (9.6) – (9.6)Non-controlling interest realised with disposal of subsidiary – – – – – – – – – – – – 2.6 2.6 Profit for the year – – – – – – – – – – 1 043.2 1 043.2 18.1 1 061.3 Dividends paid 31 – – – – – – – – – – (943.9) (943.9) (2.3) (946.2)

At 30 September 2015 36.1 221.9 (827.6) 200.7 2 017.8 53.1 (975.6) 4.5 (38.3) 0.2 8 109.6 8 802.4 370.0 9 172.4 Employee share option scheme:– value of employee services – – – 13.9 – – – – – – – 13.9 – 13.9 – share grants exercised – – – (28.8) – – – – – – – (28.8) – (28.8)– proceeds from shares issued 0.1 28.8 – – – – – – – – – 28.9 – 28.9 Share of associates’ non-distributable reserves – – – – – – – 0.9 – – – 0.9 – 0.9 Shares repurchased and cancelled (0.8) – – – – – – – – – – (0.8) – (0.8)Treasury shares disposed – – 269.7 – – – – – – – 114.5 384.2 – 384.2 Disposal of investments – – – – (10.4) – – (1.7) 38.3 – (26.2) – – – Currency translation differences – – – – (512.5) – – – – – – (512.5) 3.1 (509.4)Loss on cash flow hedges – – – – – (34.3) – – – – – (34.3) – (34.3)Net actuarial loss – – – – – – (491.0) – – – – (491.0) – (491.0)Profit for the year – – – – – – – – – – 1 610.4 1 610.4 (132.1) 1 478.3 Dividends paid 31 – – – – – – – – – – (569.8) (569.8) – (569.8)

At 30 September 2016 35.4 250.7 (557.9) 185.8 1 494.9 18.8 (1 466.6) 3.7 – 0.2 9 238.5 9 203.5 241.0 9 444.5




14. Capital and reserves continued

2016R million

2015R million

Share capitalAuthorised:776 857 200 ordinary shares of 5 cents each 38.9 38.9 100 000 6.5% cumulative preference shares of R2 each 0.2 0.2 400 000 6% cumulative preference shares of R2 each 0.8 0.8 100 redeemable preference shares of 5 cents each – –

Total 39.9 39.9

Issued:688 668 338 (2015: 702 496 655) ordinary shares of 5 cents each 34.4 35.1 100 000 6.5% cumulative preference shares of R2 each 0.2 0.2 400 000 6% cumulative preference shares of R2 each 0.8 0.8

Total 35.4 36.1

14 909 744 (2015: 18 476 043) ordinary shares have been set aside for employees’ share schemes.

Capital reservesShare premium 250.7 221.9 Treasury shares (557.9) (827.6)

3 713 207 ordinary shares held by the Nampak Black Management Share Trust (42.3) (312.0)45 070 855 ordinary shares held by Nampak Products Ltd (515.6) (515.6)

Share-based payments reserve 185.8 200.7

Total (121.4) (405.0)

Reconciliation of number of ordinary shares issuedNumber of ordinary shares issued at beginning of year 702 496 655 700 707 537 Repurchase and cancellation of ordinary shares* (14 969 114) – Ordinary shares allotted to employees and retired employees other than directors in terms of the Nampak Ltd Performance Share Plan (PSP) 844 188 489 630 Ordinary shares allotted to directors in terms of the PSP 111 440 567 179 Ordinary shares allotted to employees and former employees other than directors in terms of the Nampak Ltd Share Appreciation Plan (SAP) 13 831 287 346 Ordinary shares allotted to directors in terms of the SAP – 215 366 Ordinary shares allotted to employees and former employees other than directors in terms of the Nampak Ltd Deferred Bonus Plan (DBP) 153 234 107 597 Ordinary shares allotted to directors in terms of the DBP 18 104 122 000

Number of ordinary shares issued at end of year 688 668 338 702 496 655 Treasury shares (48 784 062) (72 440 050)

Net number of ordinary shares 639 884 276 630 056 605

* In November 2015, Nampak Ltd exercised its option in terms of the preferred ordinary share subscription agreement between Nampak Ltd and Red Coral Investments 23 (Pty) Ltd (Red Coral) to repurchase 14 969 114 of its ordinary shares from Red Coral as calculated in terms of the formula provided in the agreement.



14. Capital and reserves continuedPreference sharesThere were no changes to the issued 6.5% and 6% preference shares.

Treasury sharesTreasury shares represent Nampak Ltd shares held by group subsidiary companies.

During the year, 23 655 988 of the shares held by the Black Management Trust (BMT) were sold to settle the founding grant (including the notional return thereon) owed to Nampak Ltd and to settle the amount due to beneficiaries in accordance with the provisions contained in the BMT deed of trust. Refer to note 22.

Foreign currency translation reserveThe translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Financial instruments hedging reserveThe hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions in terms of which risk of ownership has not yet passed.

Recognised actuarial lossesActuarial losses comprise: (a) experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred); and(b) the effects of changes in actuarial assumptions.

The group policy is to recognise all actuarial gains/(losses) in the period in which they occur in equity.

Share of non-distributable reserves in associates and joint venturesNon-distributable reserves of associates and joint ventures arise out of associate companies and joint ventures being equity accounted. These reserves are not available for distribution by way of dividends.

Available-for-sale financial assets revaluation reserveThe available-for-sale financial assets revaluation reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investment is derecognised.

Non-controlling interestNon-controlling interest represents the value of the remaining ownership in the subsidiary investments that are not wholly owned by the group.



15. Loans and borrowings

Redeemable/repayable

Year-end interest rates

2016R million

2015R million

Secured loans1

– Foreign 2018 to 2023 2.7% to 5.3% 5 192.0 4 658.2 Unsecured loans– Local 2018 8.7% 1 000.0 – Capitalised finance leases2

– Local 2017 7.5% 0.1 0.3 – Foreign 2019 11.0% 0.2 0.3

6 192.3 4 658.8 Less: Instalments due for repayment within one year, reflected as current loans³ (9.8) 446.8

Net non-current loans and borrowings 6 202.1 4 212.0 1 Loans and borrowings are secured as follows: R5 192.0 million (2015: R4 658.2 million) debt is secured by guarantees issued by Nampak Ltd.

This facility is subject to covenants relating to interest cover, gearing and liquidity of the Nampak Ltd group. The Nampak Ltd group was within the covenant requirements throughout the year under review

No liabilities have been recognised for the outstanding guarantees.² Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of

default. All leases are on a fixed repayment basis and no arrangement has been entered into for contingent rental payments. Interest rates are fixed at the contract date. The fair value of the group’s lease obligations approximates the carrying amount.

³ Included in the current portion of loans repayable within one year is the following year’s amortisation of legal fees capitalised previously as part of the carrying amount of foreign secured loans.

Current loansCurrent portion of loans (10.1) 446.2 Current portion of finance leases 0.3 0.6 Note programme – unsecured 250.0 – Other current loans – unsecured 89.2 – Bank overdrafts – unsecured 993.4 3 672.3

Total current loans and borrowings 1 322.8 4 119.1

Total borrowings 7 524.9 8 331.1



15. Loans and borrowings continuedSummary of borrowings by year of redemption or payment:

TotalR million

Local R million

ForeignR million

Total owing at 30 September 2016 6 192.3 1 000.1 5 192.2 Repayable during the year ending 30 September 2017 (9.8) 0.1 (9.9)

2018 2 320.2 1 000.0 1 320.2 2019 1 052.2 – 1 052.2 2020 1 720.6 – 1 720.6

2021 onwards 1 109.1 – 1 109.1

Included above are minimum lease payments due on capitalised finance leases which are all repayable during the year ended 30 September 2017:

TotalR million

Local R million

Foreign R million

Total owing at 30 September 2016 0.3 0.1 0.2

16. Other non-current liabilities

2016R million

2015R million

Onerous operating lease liabilities 22.7 40.4 Deferred income 24.9 20.1

47.6 60.5 Less: Current portion 10.6 1.5

37.0 59.0 Add: Non-current provisions (note 19) – 2.6

Total 37.0 61.6

The onerous operating leases relate to land and buildings, motor vehicles and other commitments with remaining terms from 2017 onwards. The deferred income mainly relates to government grants which are amortised over the useful lives of the assets to which they pertain.



17. Retirement benefit information17.1 Defined contribution funds

Membership and costs for each fund are as follows:

Members Contribution costs

Country 2016 20152016

R million 2015

R million

Nampak Group Pension Fund* RSA 1 220 1 860 69.9 123.1 Nampak Provident Fund* RSA 2 896 5 581 76.0 168.3 Other – Rest of Africa Rest of Africa 3 117 3 245 27.1 36.9Other – UK UK 487 238 13.2 10.2Other – South Africa RSA 82 391 4.8 7.1

Totals 7 802 11 315 191.0 345.6

* These funds are governed by the Pension Funds Act, No 24 of 1956.

17.2 Defined benefit fundsThe principal assumptions used for the purpose of the actuarial valuations were as follows:

Pension funds Post-

retirement medical

South Africa

UnitedKingdom

2016 Assumptions (%)Discount rate 9.5 2.2 9.2Consumer price inflation (long term) 7.0 1.9 7.0Expected return on funds’ assets – 2.2 –Rate of compensation increase – 3.0 –Pension increase 4.7 1.8/2.2/2.9 –Rate of medical inflation – – 8.5Membership dataTotal membership 27 1 451 1 882

2015Assumptions (%)Discount rate 8.6 3.7 8.8Consumer price inflation (long term) 6.0 2.9 6.7Expected return on funds’ assets – – 8.8Rate of compensation increase – 3.4 – Pension increase 4.7 2.8/2.1 – Rate of medical inflation – – 8.2Membership dataTotal membership 23 1 290 2 494



17. Retirement benefit information continued17.2 Defined benefit funds continued

The major categories of plan assets as a percentage of total plan assets (UK pension fund only) are as follows:

%

2016Emerging market equity 7.5Emerging market debt 4.7Diversified growth funds 49.6Cash 3.6Insured pensions 34.6

2015Emerging market equity 6.2Emerging market debt 3.6Diversified growth funds 51.9Cash 1.2Insured pensions 37.1

The amounts recognised in the statement of financial position are as follows:

Pension funds

Post-retirement

medical


United Kingdom R million


Total R million

2016Valuation resultsFair value of plan assets – (1 670.3) – (1 670.3)Present value of benefit obligations 2.4 2 383.2 1 140.4 3 526.0

Net liability 2.4 712.9 1 140.4 1 855.7

2015Valuation resultsFair value of plan assets – (1 759.9) – (1 759.9)Present value of benefit obligations 2.1 2 233.1 1 533.1 3 768.3

Net liability 2.1 473.2 1 533.1 2 008.4




The amounts recognised in the statement of comprehensive income are as follows:

Pension funds

Post-retirement

medical




Total R million

2016Service cost:

Current service cost – – 5.7 5.7 Past service cost (adjustment) – (46.5) – (46.5)

Curtailment gain – – (91.2) (91.2)Net interest cost 0.2 16.6 131.7 148.5

Components on defined benefit expense/(income) recognised in profit or loss 0.2 (29.9) 46.2 16.5

Remeasurement of the net defined benefit liability: Return on plan assets (excluding amounts included in net interest expense) – gain – (147.0) – (147.0)Actuarial (gains)/losses arising from changes in demographic assumptions – (8.1) 9.9 1.8Actuarial losses arising from changes in financial assumptions 0.1 587.0 81.1 668.2Actuarial gains arising from experiences adjustments – (23.6) – (23.6)

Components of defined benefit expense recognised in other comprehensive income 0.1 408.3 91.0 499.4

2015Service cost:

Current service cost – – 15.1 15.1 Past service cost (adjustment) – (20.0) (41.2) (61.2)

Net interest cost 0.1 18.1 149.9 168.1

Components of defined benefit expense/(income) recognised in profit or loss 0.1 (1.9) 123.8 122.0

Remeasurement of the net defined benefit liability: Return on plan assets (excluding amounts included in net interest expense) – loss – 125.4 – 125.4 Actuarial gains arising from changes in demographic assumptions – (115.1) (15.5) (130.6)Actuarial losses arising from changes in financial assumptions 0.7 5.8 40.7 47.2 Actuarial gains arising from experience adjustments – (25.2) (2.5) (27.7)

Components of defined benefit expense/(income) recognised in other comprehensive income 0.7 (9.1) 22.7 14.3




Changes in the fair value of plan assets are as follows:

Pension funds

Post-retirement

medical




Total R million

At 1 October 2014 – 1 687.0 – 1 687.0 Interest income – 67.9 – 67.9 Remeasurement loss:

Return on plan assets (excluding amounts included in net interest expense) – (125.4) – (125.4)Contributions by employers – 53.8 – 53.8 Contributions by members – – – – Translation difference on foreign plans – 258.9 – 258.9 Benefits paid – (81.8) – (81.8)Settlements – (100.5) – (100.5)

At 30 September 2015 – 1 759.9 – 1 759.9 Interest income – 64.9 – 64.9 Remeasurement gain:

Return on plan assets (excluding amounts included in net interest expense) – 147.0 – 147.0 Contributions by employers – 61.1 – 61.1 Translation difference on foreign plans – (278.1) – (278.1)Benefits paid – (84.5) – (84.5)

At 30 September 2016 – 1 670.3 – 1 670.3




Changes in the present value of the defined benefit obligation are as follows:

Pension funds

Post-retirement

medical




Total R million

At 1 October 2014 1.3 2 161.0 1 697.7 3 860.0 Current service cost – – 15.1 15.1 Interest cost 0.1 86.0 149.9 236.0 Remeasurement (gains)/losses:

Actuarial gains arising from changes in demographic assumptions – (115.1) (15.5) (130.6)Actuarial losses arising from changes in financial assumptions 0.7 5.8 40.7 47.2 Actuarial gains arising from experience adjustments – (25.2) (43.6) (68.8)

Past service cost, including gains on curtailments – (20.0) – (20.0)Translation difference on foreign plans – 322.8 – 322.8 Benefits paid – (72.4) (95.4) (167.8)Settlements (109.8) (215.8) (325.6)

At 30 September 2015 2.1 2 233.1 1 533.1 3 768.3 Current service cost – – 5.7 5.7 Interest cost 0.2 81.5 131.7 213.4 Past service cost (adjustment) – (46.5) – (46.5)Remeasurement (gains)/losses:

Remeasurement gain – curtailment* – – (91.2) (91.2)Actuarial (gains)/losses arising from changes in demographic assumptions – (8.1) 9.9 1.8Actuarial losses arising from changes in financial assumptions 0.1 587.0 81.1 668.2 Actuarial gains arising from experience adjustments – (23.6) – (23.6)

Translation difference on foreign plans – (355.7) – (355.7)Benefits paid – (84.5) (99.9) (184.4)Settlements* – (430.0) (430.0)

At 30 September 2016 2.4 2 383.2 1 140.4 3 526.0

Expected contributions to defined benefit plans in 2017 0.3 63.8 83.4 147.5

* During the current financial year, Nampak Limited offered continuation members in receipt of a monthly medical scheme contribution subsidy the option of converting the monthly subsidy into an annuity secured in the pensioner’s own individual name. As at the effective date of the post-retirement medical valuation, a total of 475 continuation members had accepted this offer from Nampak Limited. The result of the offer is that the Nampak Limited liability in respect of continuation members who accepted this offer has been replaced by the purchase of an annuity in the continuation members’ individual names. The liability has therefore been extinguished and the transaction has led to a curtailment gain of R83.8 million in the 2016 financial year. The curtailment gain was calculated as the difference between the cost of the annuities and the value of the liabilities on an individual basis and summed to provide a total. The curtailment gain or loss was based on the 30 September 2016 valuation liability. The total settlements payable to continuation members at 30 September 2016 is R406.4 million. This amount has been treated as an accrual in the 2016 financial statements.

The total unfunded pension liability is R2.4 million (2015: R2.1 million) and the unfunded post-retirement medical liability is R1 140.4 million (2015: R1 533.1 million).




Post-retirement medical plansAssumed healthcare cost trends have a significant effect on the amounts recognised in the income statement. The effect of a one percentage point change in assumed healthcare cost trend rates would be as follows:

One % point increase

R million

One % point decrease R million

Effect on aggregate of the service costs and interest cost 17.4 14.8Effect on defined benefit obligation 122.5 104.9

Pension Fund UKThe effect of a 0.1 percentage point change in the following assumptions will effect the liability recognised as follow:

0.1% point increase

R million

0.1% point decrease R million

Discount rate 43.6 43.6 Inflation 36.1 36.1

The statutory actuarial valuations of the defined benefit funds are as follows:

Valuation date

Fair value of assetsR million

Fair value of liabilities

R million Valuation basis

Nampak plc Pension Plan 05/04/2013 928.4 1 235.3 PUC Nampak plc Staff Pension Plan 05/04/2013 712.7 861.1 PUC Nampak Post-Retirement Medical Aid Fund 30/09/2016 – 1 140.4 PUC

PUC: projected unit credit

The latest actuarial valuations in respect of the defined benefit funds found them in sound financial condition. In arriving at their findings, the actuaries have taken into account reasonable long-term estimates of inflation, future increases in wages, salaries and pensions and sustainable investment returns. Funds denominated in foreign currency have been translated at the rate ruling at year-end.

The valuations listed above are not necessarily the valuations used in determining the surplus or obligation recognised on the statement of financial position.



18. Trade payables and other current liabilities

2016 R million

2015 R million

Trade payables 2 431.9 2 520.1 Accruals 1 632.6 1 273.7 Derivative financial instruments (note 1) 40.7 75.3 Shareholders for dividends – 5.7 Value added tax 380.7 166.9 Other 182.8 141.6

Total 4 668.7 4 183.3

Trade payables and accruals mainly consist of amounts outstanding for trade purchases and ongoing costs.

The directors consider that the carrying amounts of trade payables and other current liabilities approximate their fair values.

19. Provisions

Restructuring R million

Customer claims

R million Other

R million Total

R million

At 1 October 2014 7.0 15.7 28.6 51.3 Additions 252.3 12.8 33.8 298.9 Usage (30.9) (14.4) (27.8) (73.1)Reversals (4.2) (5.5) (5.7) (15.4)Disposal of business – – (6.1) (6.1)Translation differences 0.1 0.6 1.7 2.4 Other 1.6 0.1 (21.8) (20.1)

At 30 September 2015 225.9 9.3 2.7 237.9 Additions 26.2 47.2 97.0 170.4 Usage (74.9) (1.5) 1.4 (75.0)Reversals (42.9) (5.7) – (48.6)Translation differences (1.8) (1.2) (9.8) (12.8)Other (3.1) – 0.2 (2.9)

At 30 September 2016 129.4 48.1 91.5 269.0

2016R million

2015R million

Analysed as:Current 269.0 235.3 Non-current (note 16) – 2.6

269.0 237.9

RestructuringProvisions for restructuring are recognised when the group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it. Restructuring provisions only include those direct expenditures which are necessarily entailed by the restructuring and are not associated with the ongoing activities of the group.

Customer claimsAmounts expected to be payable under customer claims in respect of packaging already supplied. The provision is based on historical customer claims data and a weighting of all possible outcomes against their associated probabilities.

OtherThese provisions mainly relate to onerous leases on property.



20. Revenue


2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

Sale of goods 19 099.9 16 982.0 – 3 301.8 19 099.9 20 283.8Rendering of services 5.7 2.7 – 50.2 5.7 52.9Other 33.3 306.6 – (27.1) 33.3 279.5

19 138.9 17 291.3 – 3 324.9 19 138.9 20 616.2

21. Operating profitOperating profit is stated after taking into account the following items:

21.1 Cost of goods sold 12 771.6 11 945.6 – 2 052.7 12 771.6 13 998.3

21.2 Included in employee benefit expenseRetrenchment costs 29.7 46.2 – 6.8 29.7 53.0Defined benefit plan expense 107.7 182.9 – 0.3 107.7 183.2Pension fund curtailment gain on restructure (91.2) (61.2) – – (91.2) (61.2)Other share-based payment expenses 19.3 (3.6) – – 19.3 (3.6)

21.3 Depreciation and amortisation consists ofInvestment properties 0.7 1.6 – – 0.7 1.6Freehold and leasehold buildings 62.0 61.6 – – 62.0 61.6Plant, equipment and vehicles 800.4 695.5 – 9.5 800.4 705.0Intangible assets 48.6 43.6 – – 48.6 43.6

911.7 802.3 – 9.5 911.7 811.8

21.4 Included in other operating expenses and incomeAuditors’ remunerationAudit and professional fees 26.4 19.5 – (0.7) 26.4 18.8Tax services 2.2 1.1 – – 2.2 1.1Other services 1.3 2.2 – 0.1 1.3 2.3

29.9 22.8 – (0.6) 29.9 22.2

ImpairmentsFreehold and leasehold buildings – 4.6 – – – 4.6Plant and equipment 347.2 117.1 – – 347.2 117.1Intangible assets 8.5 – – – 8.5 –Loans to non-controlling shareholders – – – 77.7 – 77.7Other investments 5.1 – – – 5.1 –

360.8 121.7 – 77.7 360.8 199.4

Reversal of impairmentsPlant and equipment – (0.3) – – – (0.3)Loans to non-controlling shareholders (0.4) – – – (0.4) –

Total (0.4) (0.3) – – (0.4) (0.3)

Rentals in respect of operating leasesProperty 107.7 75.4 – 16.9 107.7 92.3Plant, equipment and vehicles 8.8 5.4 – 1.2 8.8 6.6

Total 116.5 80.8 – 18.1 116.5 98.9



21. Operating profit continued


2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

21.4 Included in other operating expenses and income continuedNet loss/gain on financial instruments

Derivatives 108.9 (43.8) – 5.2 108.9 (38.6)Other financial instruments* 546.3 185.2 – 8.5 546.3 193.7

655.2 141.4 – 13.7 655.2 155.1

* Includes devaluation losses arising from Angolan and Nigerian illiquidity.

Net (profit)/loss on disposalsNet profit on disposal of property – sale and leaseback (1 318.9) – – – (1 318.9) –Net profit on disposal of other property (15.2) (102.5) – – (15.2) (102.5)Net loss/(profit) on disposal of plant, equipment and intangible assets 22.0 (0.3) – 3.6 22.0 3.3(Gain)/loss on disposal of businesses and investments (3.5) – – 350.2 (3.5) 350.2

(1 315.6) (102.8) – 353.8 (1 315.6) 251.0

Other expenses/(income)Administration and technical fees 47.6 38.7 – 0.9 47.6 39.6Selling expenses 53.9 15.7 – 15.8 53.9 31.5Distribution expenses 563.2 519.0 – 194.2 563.2 713.2Research and development expenditure 7.5 (0.8) – 5.3 7.5 4.5Gain on Nampak Zimbabwe restructure – (124.2) – – – (124.2)Restructuring costs 4.4 31.1 – 112.3 4.4 143.4

21.5 Directors and prescribed officers’ remunerationFull details of remuneration are included in note 37.

No contributions were made in respect of past directors and prescribed officers.



22. Share-based paymentsAll share schemes are classified as equity-settled schemes.

2016R million

2015R million

Share-based payment expenses recognisedOn share plans:Performance Share Plan 11.9 10.3 Share Appreciation Plan 5.0 (15.5)Deferred Bonus Plan 2.4 1.6

Total 19.3 (3.6)

BEE transactionBlack Management Trust (BMT)OverviewDuring 2005, the group issued 27 369 195 ordinary shares to the BMT as part of its black economic empowerment (BEE) transaction at a market value of R15.13 per share. Nampak provided a founding grant to the trust that provided for shares to be allocated to black managers over a period of five years. One-third of the shares vested three years after the operative date, a further one-third vested after four years and the final one-third vested on 30 September 2010 provided the services were not terminated for disciplinary reasons. The shares were to be held in trust until 31 December 2015, at which time the founding grant would be settled and the balance of the benefit would be released to the beneficiaries. The company had the discretion to extend the lock-in period by a further two years should the value of the trust shares be less than the outstanding grant – as all the shares had vested as at 30 September 2010, no further expenses were recognised in the current year.

At 31 December 2015 the lock-in period of the BMT came to an end as per the trust deed. At this date, the shares necessary to repay the grant made by Nampak Ltd were sold and the proceeds repaid to Nampak. Current Nampak employees were given an option to roll their share rights to 15 February 2017 at which date they may choose to receive the shares. A further extension to 31 December 2017 will automatically apply if the shares are “under water” at the extension date of 15 February 2017. Of the total shares held, 23 655 988 shares were either sold or transferred to the beneficiaries of the trust.

Other share plansPerformance Share Plan and Share Appreciation PlanOverviewDuring July 2006, the group adopted two share-based payment plans, the Performance Share Plan (PSP) and the Share Appreciation Plan (SAP).

Participation to the PSP is restricted to senior executives and executive directors, while participation in the SAP is restricted to senior management and executive directors. Participation in both plans is subject to approval by the remuneration committee.

Both the PSP and SAP allocations are allocated on condition that certain performance criteria will be satisfied during the specific performance period for the allocation concerned. If a participant ceases to be employed by Nampak due to death, retirement or disability the number of shares/share appreciation rights capable of vesting will not be forfeited; however, they will be adjusted according to the lesser of the date of termination and 36 months. Participants then have six months under the SAP to exercise these share appreciation rights before they lapse. Termination of employment due to resignation or dismissal prior to the expiry of three years from theallocation date will forfeit their allocated shares/share appreciation rights. Termination of employment due to resignation or dismissal after the expiry of the three years from allocation date under the PSP will result in shares/share appreciation rights being forfeited. Where an employee is retrenched the shares/share appreciation rights will vest, be released and may be exercised in full to the extent that the performance condition is achieved.

Deferred Bonus PlanOverviewDuring February 2010, the group adopted the Deferred Bonus Plan.

Participation in the plan is limited to executive directors and senior executives of the group and its divisions. Participants were entitled to use a maximum of 50% of their annual bonus after tax to purchase shares (bonus shares) in Nampak Ltd.

A matching award, which is based on the number of bonus shares acquired and still held at the vesting date, is made to all participants. For example, if 100 bonus shares were acquired and are still held at the vesting date, the matching award will consist of 100 matching shares.

The participants are the owners of the bonus shares from date of acquisition and have all shareholder rights in respect of the bonus shares from this date. Participants are entitled to withdraw from the plan and dispose of their shares at any time, but this will impact their ability to receive matching shares.

The matching award will vest at the end of the Deferred Bonus Plan period (DBP period) on the vesting date, provided that the bonus shares are still held and the participant is still employed by the group.

Participants have no rights in respect of matching shares until after the vesting date.

An amount of 74 672 bonus shares were purchased during the current financial year.



22. Share-based payments continuedOther share plans continued

TSR criteria1 HEPS condition2

Ranking compared to ALSI 40 constituent companies Non-market condition

Allocation date Performance period Threshold Target Threshold Target

Performance Share Plan4

14 December 2010 01/10/2010 – 30/09/2013 CPI + 9% CPI + 24% CPI + 9% CPI + 24%

17 March 2011 01/10/2010 – 30/09/2013 CPI + 9% CPI + 24% CPI + 9% CPI + 24%




2 January 2014 01/10/2013 – 30/09/2016 CPI + 9% CPI + 24% CPI + 9% CPI + 24%


17 December 2015 01/10/2015 – 30/09/2018 CPI + 9% CPI + 24% CPI + 9% CPI + 24%1 The total shareholder return (TSR) criteria are based on Nampak’s TSR compared to the TSR of constituent companies of the ALSI 40, excluding mining and

resource companies (for the first four allocations) and improvement in TSR relative to the cumulative CPI within the performance period (for the last seven allocations).

2 The non-market condition is based on an improvement in Nampak’s annual headline earnings per share adjusted for financial fair value gains and losses relative to the cumulative CPI within the performance period.

3 The non-market condition is based on an improvement in Nampak’s annual return on equity.4 Shares vesting will be released proportionately between the third and fifth year from the original grant date so that after five years the participants will be

entitled to receive full rights under the scheme.

Details of the share options outstanding during the year are as follows:

Performance Share Plan – Share grants Performance Share Plan – Share grants

17 December2015

15 December2014

2 January 2014

3 December 2013

3 December 2012

5 December 2011

17 March 2011

14 December 2010

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

2016Outstanding at beginning of year – 622 314 128 300 666 289 309 144 841 249 18 334 290 546 Granted during the year 1 208 391 – – – – – – – Retirements during the year (21 377) (9 339) – (8 106) – – – – Exercised during the year – – – – (103 049) (419 390) (18 334) (290 546)Forfeited during the year as a result of non-market condition – – (89 810) (350 159) – – – –

Outstanding at end of year 1 187 014 612 975 38 490 308 024 206 095 421 859 – –

2015Outstanding at beginning of year – – 128 300 758 903 872 660 1 250 746 36 667 572 468 Granted during the year – 669 432 – – – – – – Forfeited during the year – (21 801) – (30 273) (6 341) – – – Retirements during the year – (25 317) – (62 341) (23 334) – – – Exercised during the year – – – – – (409 497) (18 333) (281 922)Forfeited during the year as a result of non-market condition – – – – (533 841) – – –

Outstanding at end of year – 622 314 128 300 666 289 309 144 841 249 18 334 290 546

For the 17 December 2015 PSP grant, the fair value is calculated as the share price at grant date, reduced for expected dividends over the vesting period. The fair value is then adjusted for non-market vesting conditions and expected attrition rates.



22. Share-based payments continued

ROE condition3 Vesting

Non-market conditionPerformance

below threshold

criteria

Performance below target criteria

above threshold

Performance at or above

target criteriaThreshold Target Note

– – No vestingProportional

vesting 100%50% of shares subject to TSR condition and 50% subject to HEPS condition – – No vesting

Proportional vesting 100%

– – No vestingProportional

vesting 100%

15.5% 17.5% No vestingProportional

vesting 100%

40% of shares subject to TSR condition, 40% subject to HEPS condition and 20% subject to ROE condition


vesting 100%

30% of shares subject to TSR condition, 40% subject to HEPS condition and 30% subject to ROE condition


vesting 100%


vesting 100%


vesting 100%

Details of the share options outstanding during the year are as follows:

Performance Share Plan – Share grants Performance Share Plan – Share grants

17 December2015

15 December2014

2 January 2014

3 December 2013

3 December 2012

5 December 2011

17 March 2011

14 December 2010

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

Number of awards

2016Outstanding at beginning of year – 622 314 128 300 666 289 309 144 841 249 18 334 290 546 Granted during the year 1 208 391 – – – – – – – Retirements during the year (21 377) (9 339) – (8 106) – – – – Exercised during the year – – – – (103 049) (419 390) (18 334) (290 546)Forfeited during the year as a result of non-market condition – – (89 810) (350 159) – – – –

Outstanding at end of year 1 187 014 612 975 38 490 308 024 206 095 421 859 – –

2015Outstanding at beginning of year – – 128 300 758 903 872 660 1 250 746 36 667 572 468 Granted during the year – 669 432 – – – – – – Forfeited during the year – (21 801) – (30 273) (6 341) – – – Retirements during the year – (25 317) – (62 341) (23 334) – – – Exercised during the year – – – – – (409 497) (18 333) (281 922)Forfeited during the year as a result of non-market condition – – – – (533 841) – – –

Outstanding at end of year – 622 314 128 300 666 289 309 144 841 249 18 334 290 546

For the 17 December 2015 PSP grant, the fair value is calculated as the share price at grant date, reduced for expected dividends over the vesting period. The fair value is then adjusted for non-market vesting conditions and expected attrition rates.




HEPS condition

Non-market condition1

Allocation date Performance period Threshold Target

Share Appreciation Plan2

1 July 2006 01/04/2006 – 31/03/2009 CPI + 2% CPI + 6%

14 December 2010 01/10/2010 – 30/09/2013 – CPI + 6%

3 December 2012 01/10/2012 – 30/09/2015 – CPI + 6%

3 December 2013 01/10/2013 – 30/09/2016 – CPI + 6%

2 January 2014 01/10/2013 – 30/09/2016 – CPI + 6%

15 December 2014 01/10/2014 – 30/09/2017 – CPI + 6%

17 December 2015 01/10/2015 – 30/09/2018 – CPI + 6%1 The non-market condition is based on an improvement in Nampak’s annual headline earnings per share adjusted for financial fair value gains and losses

relative to the cumulative CPI within the performance period.2 Upon vesting of rights, rights are released immediately after the third year. Rights must be exercised within seven years from grant date. For the allocations

before 2010, 100% of the share appreciation rights vest and the shares are released proportionately between the third and fifth year from the original grant date so that after five years, participants will be entitled to receive full rights under the scheme. Participants have 10 years from grant date to exercise rights for these allocations.

Details of the share rights outstanding during the year are as follows:

Share Appreciation Plan – Share rights

17 December 2015 15 December 2014 2 January 2014

Number of allocations

Weighted average exercise

priceNumber of allocations




price

2016Outstanding at beginning of year – – 2 727 515 42.00 121 132 41.00 Granted during the year 3 297 395 24.29 – – – –Forfeited during the year (75 000) 24.29 (133 333) 42.00 – –Retirements during the year (89 240) 24.29 (57 678) 42.00 – –Exercised during the year – – – – – –Forfeited during the year as a result of non-market condition – – – – (121 132) 41.00

Outstanding at end of year 3 133 155 24.29 2 536 504 42.00 – –

Exercisable at end of year – 118 005 – – –

2015Outstanding at beginning of year – – – – 121 132 –Granted during the year – – 3 098 325 42.00 – 41.00 Forfeited during the year – – (370 810) 42.00 – –Retirements during the year – – – – – –Exercised during the year – – – – – –Forfeited during the year as a result of non-market condition – – – – – –

Outstanding at end of year – – 2 727 515 42.00 121 132 41.00

Exercisable at end of year – – 118 005 – – –

For the 17 December 2015 SAP grant, the fair value of the share rights were calculated using a binomial tree model. The fair value is then adjusted for non-market vesting conditions and expected attrition rates.




Vesting

Performance below threshold criteriaPerformance below target criteria above

threshold Performance at or above target criteria

No vesting Proportional vesting 100%

No vesting – 100%

No vesting – 100%

No vesting – 100%

No vesting – 100%

No vesting – 100%

No vesting – 100%

Share Appreciation Plan – Share rights

3 December 2013 3 December 2012 14 December 2010 1 July 2006

Number of allocations








price

348 923 37.81 117 274 30.67 111 167 23.00 115 500 17.00 – – – – – – – – – – – – (13 800) 23.00 (4 000) 17.00

(3 037) 37.81 – – – – – – – – – – (6 900) 23.00 (111 500) 17.00

(271 036) 37.81 – – – – – –

74 850 37.81 117 274 30.67 90 467 23.00 – –

74 850 117 274 90 467 –

384 194 – 3 642 790 30.67 200 867 23.00 139 500 17.00 – – – – – – – –

(17 210) 37.81 (490 440) 30.67 (6 900) 23.00 (4 000) 17.00 (18 061) 37.81 (17 871) 30.67 – 23.00 – –

– (25 562) 30.67 (82 800) – (20 000) 17.00

– (2 991 643) – – – – –

348 923 37.81 117 274 30.67 111 167 23.00 115 500 17.00

74 850 – 117 274 – 111 167 – 115 500 –



22. Share-based payments continuedThe calculated fair values and significant inputs into the valuation models were as follows:

PSP allocations

17 December2015

15 December 2014

2 January 2014

3 December 2013

Weighted average fair value 21.2 12.8 25.0 21.7 Expected volatility2 –1 – 23.4% 23.6%Expected life 5 years 5 years 5 years 5 years Remaining life 4.2 years 3.2 years 2.3 years 2.2 yearsRisk-free rate 8.5% 7.1% 8.0% 8.0%Expected dividend yield 3.5% 4.0% 6.0% 6.0%

SAP allocations

15 December2015

15 December 2014

2 January 2014

3 December 2013

Weighted average exercise price 24.3 42.2 41.1 37.8Weighted average fair value 8.2 8.1 11.2 8.6Expected volatility2 30.0% 25.0% 25.6% 25.5%Expected life 3 years 3 years 3 years 3 years Remaining life 2.2 years 1.2 years 0.3 years 0.2 yearsRisk-free rate 8.5% 7.2% 8.0% 8.0%Expected dividend yield 3.5% 4.0% 6.0% 6.0%

Deferred Bonus Plan

15 December2015

17 December 2014

3 December 2013

14 December 2012

Weighted average fair value 21.2 29.2 34.8 27.8 Expected life 3 years 3 years 3 years 3 years Remaining life 2.2 years 1.2 years 0.2 years 0 years Risk-free rate – – – – Expected dividend yield 3.5% 4.0% 4.2% 4.8%

¹ An explicit volatility assumption was not used in the valuation, as an equity risk-premium approach was used for incorporating a probability weighted average of TSR scenarios and the vesting structure for the TSR performance condition.

² Expected volatility was determined with reference to historical volatility. The expected useful life used in the model has been adjusted, based on management’s best estimate, for the effects of forfeitures, exercise restrictions and behavioural considerations.


23. Finance costs


2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

Interest paid – short-term facilities 565.1 403.8 – 35.1 565.1 438.9Interest paid – long-term facilities 0.2 0.6 – – 0.2 0.6Interest paid – other 0.1 12.2 – – 0.1 12.2Less: Interest capitalised (37.9) (100.0) – – (37.9) (100.0)

527.5 316.6 – 35.1 527.5 351.7

Borrowing costs included in the cost of qualifying assets are calculated by applying a capitalisation rate of 7.7% (2015: 6.9% to 8.0%) to expenditure on those assets.


2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

24. Finance incomeInterest received – short-term facilities 37.4 20.5 – – 37.4 20.5 Interest received – other 4.6 17.1 – 9.3 4.6 26.4

42.0 37.6 – 9.3 42.0 46.9

25. Income from investmentsNormal dividends – – – 7.4 – 7.4

26. Income taxCurrent tax – current year 132.7 61.5 – (2.4) 132.7 59.1– prior year (6.8) (59.0) – (1.4) (6.8) (60.4)– capital gains tax – (41.2) – 41.2 – –Deferred tax– current year 160.9 62.7 – (174.8) 160.9 (112.1)– prior year (130.9) (119.6) – 5.1 (130.9) (114.5)– change in tax rate (7.7) (0.2) – – (7.7) (0.2)Withholding and foreign tax 50.9 38.3 – 1.9 50.9 40.2

Total 199.1 (57.5) – (130.4) 199.1 (187.9)

The company tax rate in South Africa is 28% (2015: 28%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in those relevant jurisdictions.



26. Income tax continued


2016%

2015%

2016%

2015%

2016%

2015%

Reconciliation of rate of taxEffective group rate of tax 11.9 (4.1) – 24.8 11.9 (21.5)Reduction in tax rate due to:– exempt income (including

capital profits) 22.3 2.5 – (24.1) 22.3 18.6– associate profit/(loss) 0.1 (0.1) – – 0.1 (0.2)– government incentives 6.4 9.7 – (0.1) 6.4 15.5– adjustment for prior year 8.2 12.8 – 0.7 8.2 20.0– tax rate reduction 0.5 – – – 0.5 –– tax rate differential 10.3 9.9 – – 10.3 15.9– capital gains tax – 2.9 – 7.8 – –Increase in tax rate due to:– deferred taxation not

recognised (0.4) (0.7) – 0.4 (0.4) (1.3)– exchange losses not protected (21.2) – – – (21.2) –– disallowable expenses (7.1) (2.2) – 18.1 (7.1) (14.4)– withholding and foreign taxes (3.0) (2.7) – 0.4 (3.0) (4.6)

Normal tax rate 28.0 28.0 - 28.0 28.0 28.0

In addition to the income tax charge/(benefit) to profit or loss, a deferred tax credit of R58.9 million (2015: R33.3 million charge) has been recognised in equity during the year.

27. Sale and leaseback transactionThe group entered into a sale and leaseback transaction for the sale and leaseback of 15 of its industrial properties in South Africa effective 1 September 2016.

The selling prices of the properties were determined by an independent valuer and confirmed through a comprehensive market review.

Fourteen of the properties were leased for a period of 15 years with an option to renew the lease agreements for one additional period of 10 years, and an option to repurchase the properties at market-related prices on termination of the lease agreements. One property was leased for a period of three years. Escalation of rentals is provided for in the agreements at inflation-related rates.

The lease has been classified and recognised as an operating lease in terms of the criteria set out in IAS 17 Leases.

In terms of the lease agreements, the group remains responsible for all maintenance, insurance, rates and taxes (“triple net” lease).

2016 R million

2015R million

Disposal of the properties subject to the transactionNet proceeds on disposal of properties 1 701.1 –Net carrying value of properties disposed (382.2) –

Property, plant and equipment (note 3) (374.6) –Non-current assets held for sale (note 13) (7.6) –

Profit on disposal of properties (note 21) 1 318.9 –

Future minimum lease payments2017 145.9 –2018 – 2021 681.1 –2022 onwards 2 709.5 –

Total 3 536.5 –



28. Operating lease commitments

2016R million

2015R million

Other than the sale and leaseback arrangement (note 27), the group has other lease commitments in respect of land and buildings, plant, equipment and vehicles, which are payable as follows:Year ending 30 September 2016 9.4 45.1 2017 47.8 31.7 2018 42.7 19.4 2019 28.3 11.7 2020 23.1 67.7 2021 and beyond 71.7 –

Total 223.0 175.6

Comprising: Land and buildings 195.7 150.6 Vehicles 3.3 15.1

Other 24.0 9.9

223.0 175.6

29. Discontinued operationsAn agreement for the sale of Nampak’s 50% shareholding in, and loans to, Sancella SA (Pty) Ltd was entered into on 21 July 2015, with the transaction being effective 1 December 2015. The proceeds from the sale were applied to settle the outstanding loan balances.

The loans had been impaired to the amount expected to be recovered in terms of the transaction as at 30 September 2015 and no further loss was recognised on the recovery of the net carrying values of these loans on the effective date of the transaction.

During the previous year, the group disposed of the following businesses:•• Nampak Corrugated and Nampak Tissue businesses effective 1 April 2015;•• Nampak Flexibles and Nampak Recycling businesses effective 1 July 2015; and•• Nampak Sacks business effective 29 September 2015.

The above disposals are consistent with the group’s strategy of exiting its non-core and underperforming businesses.

The results of the discontinued operations included in the group consolidated statement of comprehensive income are set out below.

2016 R million

2015R million

Results of the discontinued operations for the yearRevenue* – 3 385.7Expenses – (3 560.7)

Loss before tax – (175.0)Attributable income tax benefit – 8.1

– (166.9)Loss on disposal of operations – (350.2)Attributable income tax benefit – 122.3

– (227.9)

Loss for the period from discontinued operations – (394.8)

* Includes internal revenue (sales to other divisions within the group).



30. Business combinationsIn the previous financial year, the group consolidated Hunyani Holdings Ltd (Hunyani) and Megapak Zimbabwe (Pvt) Ltd (Megapak) with effect from 1 December 2014. These entities, situated in Zimbabwe, were previously recognised as associates and equity accounted as such. The revaluation of the group’s original interest in Hunyani and Megapak resulted in gains of R14.2 million and R9.3 million respectively.

As part of this process, the group restructured its subsidiary, CarnaudMetalbox Zimbabwe Ltd, and Megapak under Hunyani, and Hunyani was renamed Nampak Zimbabwe Ltd. The transaction also involved the group increasing its effective interest in the Nampak Zimbabwe Ltd group to 51.43%.

2016 R million

2015R million

Fair value of previously held interests – 184.9Plus: Outside shareholders’ interests recognised – 356.8Less: Fair value of identifiable net assets acquired – (642.4)

Gain arising on consolidation – (100.7)

31. Dividends and cash distributions

2016 R million

2015R million

Dividends paid Final dividend number 87 paid on 18 January 2016: gross amount of 92.0 cents per share (2015: number 85 – 107.0 cents per share) 633.6 751.5 No interim dividend paid (2015: number 86 – 42.0 cents per share) – 295.0 Dividend attributable to treasury shares (66.7) (107.9)

566.9 938.6 Other dividends 2.9 7.6

Total dividends 569.8 946.2

No dividend was declared for the year ending 30 September 2016.

2016 Cents

2015Cents

Analysis of dividends declared in respect of current year’s earnings:Dividends per ordinary shareInterim – 42.0 Final – 92.0

– 134.0

6.5% and 6% cumulative preference dividendsPreference dividends totalling R0.1 million (2015: R0.1 million) were declared on 26 November 2015 and 12 July 2016, and paid on 25 January 2016 and 1 August 2016 respectively.




32. Basic, diluted and headline earnings per shareBasic earnings per shareBasic earnings per share is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of ordinary shares in issue during the year, excluding those held as treasury shares.

Weighted average number of shares in issue is calculated as the number of shares in issue at the beginning of the year, increased by shares issued during the year, weighted on a time basis for the period during which they have participated in the profit of the group.


2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

Basic earningsProfit attributable to equity holders of the company for the period 1 610.4 1 438.0 – (394.8) 1 610.4 1 043.2 Less: Preference dividend (0.1) (0.1) – – (0.1) (0.1)

Total 1 610.3 1 437.9 – (394.8) 1 610.3 1 043.1

Weighted average number of shares in issue (‘000) 632 667 629 726 632 667 629 726 632 667 629 726

Basic earnings per share 254.5 228.3 – (62.7) 254.5 165.6

Diluted earnings per shareThe diluted basic earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential ordinary shares.


2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

Diluted earnings* 1 610.3 1 437.9 – (394.8) 1 610.3 1 043.1

Weighted average number of ordinary shares for the purpose of diluted basic earnings per share (‘000) 634 335 637 369 634 335 637 369 634 335 637 369

Weighted average number of ordinary shares for the purpose of basic earnings per share 632 667 629 726 632 667 629 726 632 667 629 726Effect of dilutive potential ordinary shares:

Ordinary shares issued to Black Management Trust (‘000) – 4 847 – 4 847 – 4 847Other share incentive plans (‘000) 1 668 2 796 1 668 2 796 1 668 2 796

Diluted earnings per share 253.9 225.6 – (61.9) 253.9 163.7

* No dilution of basic earnings.



32. Basic, diluted and headline earnings per share continued


2016R million

2015R million

2016R million

2015R million

2016R million

2015R million

Headline earnings per shareHeadline earningsBasic earnings 1 610.3 1 437.9 – (394.8) 1 610.3 1 043.1Adjusted for:Net impairment losses on goodwill, plant and equipment 360.8 121.4 – – 360.8 121.4Net (loss)/gain on disposal of businesses and other investments (3.5) – – 350.2 (3.5) 350.2Gain on revaluation and consolidation of Zimbabwe associates – (124.2) – – – (124.2)Profit on disposal of property subject to sale and leaseback (1 318.9) – – – (1 318.9) –Net loss/(profit) on disposal of other property, plant, equipment and intangible assets 6.8 (102.8) – 3.6 6.8 (99.2)Tax effects and outside shareholders’ interest 25.4 (21.2) – (123.2) 25.4 (144.4)

Total 680.9 1 311.1 – (164.2) 680.9 1 146.9

Weighted average number of shares in issue (‘000) 632 667 629 726 632 667 629 726 632 667 629 726

Headline earnings per share (cents) 107.6 208.2 – (26.1) 107.6 182.1

Diluted headline earnings per shareDiluted headline earnings* 680.9 1 311.1 – (164.2) 680.9 1 146.9

Weighted average number of ordinary shares for the purpose of diluted headline earnings per share (‘000)** 634 335 637 369 634 335 637 369 634 335 637 369

Diluted headline earnings per share (cents) 107.3 205.7 – (25.8) 107.3 179.9

* No dilution of headline earnings.** Per diluted earnings per share calculation.

33. Contingent liabilitiesGuarantees in respect of property leases 5.0 3.3 Customer claims and other 1.7 11.5 Tax contingent liability 76.9 49.4

Total 83.6 64.2

34. Capital commitmentsCapital commitments for acquisition of property, plant and equipment – contracted 276.3 727.2 – approved 178.1 772.9

Total 454.4 1 500.1



35. Related-party transactions

2016R million

2015R million

Disclosure in respect of associates and joint ventures is provided in notes 6 and 7. Details of joint ventures and associates can be found in Annexure B.Material related-party transactions were as follows:

Sales and services rendered (from)/to related parties:Associates (30.0) 64.7 Joint ventures 6.6 11.4

(23.4) 76.1

Interest received from related parties:Joint ventures – 11.1

– 11.1

Amounts owing (after eliminating inter-company balances) by related parties are disclosed in the respective notes to the financial statements for those balance sheet items.

Amounts receivable from related parties:Loans to joint ventures – 122.2

– 122.2

Key membersKey members are those persons having authority and responsibility for planning, directing and controlling the activities of the group, directly or indirectly (executive or otherwise). Key members have been defined as the board of directors of the holding company and the group executive committee.

A number of key members hold positions in related entities where they may have significant influence over the financial and operating policies of those entities. These relationships have been listed below:

Key member Entity Position in entity

RC Andersen Nampak 1979 Share Purchase Trust TrusteeNampak Ltd Performance Share Trust TrusteeNampak Ltd Share Appreciation Trust Trustee

RJ Khoza Aka Capital (Pty) Ltd Executive chairmanCWN Molope Red Coral Investments 23 (Pty) Ltd Shareholder

(Red Coral repurchase took place in December 2015. Refer to note 14)

PM Surgey Nampak 1979 Share Purchase Trust TrusteeNampak Ltd Performance Share Trust TrusteeNampak Ltd Share Appreciation Trust Trustee

FV Tshiqi Nampak Group Pension Fund Employer trusteeNP O’Brien Nampak Group Pension Fund Employer trustee

Transactions between the group and these entities have occurred under terms and conditions that are no more favourable than those entered into with third parties in arm’s length transactions.

Related-party transactions include:Certain non-executive directors of the group are also non-executive directors of other public companies which may transact with the group. Executive directors or the chairpersons of such companies are assumed to have significant influence. Except as disclosed above, the relevant individuals do not believe that they have significant influence over the financial and operating policies of those companies.



35. Related-party transactions continuedCompensation relating to key management personnelThe remuneration of directors and other members of key management during the year was as follows:

2016R million

2015R million

Short-term employee benefits 37.9 34.9 Post-employment benefits – 1.4 Termination benefits – 8.8 Share-based payments 11.4 7.1

49.3 52.2

The remuneration of directors and key executives is determined by the remuneration committee, having regard to the performance of individuals and market trends.

ShareholdersAn analysis of major shareholders is provided on page 91 .

36. Notes to the cash flow statements

2016R million

2015R million

36.1 Reconciliation of profit before taxation to cash generated from operationsProfit before taxation 1 677.4 873.4

Continuing operations 1 677.4 1 398.6 Discontinued operations – (525.2)

Adjustment for:Depreciation and amortisation 911.7 811.8 Net (profit)/loss on disposal of businesses, property, plant, equipment and intangible assets (1 315.6) 251.0 Financial instruments fair value adjustment 108.9 (38.6)Income from investments – (7.4)Gain on revaluation and consolidation of Zimbabwe associates – (124.2)Net defined benefit plan expense/(income) 16.5 122.0 Impairment losses 360.8 199.4 Reversal of impairment losses (0.4) (0.3)Share of loss in associates 1.3 2.6 Share of (profit)/loss in joint ventures (1.4) 4.2 Share-based payments expense/(income) 19.3 (3.6)Net finance costs 485.5 304.8

Operating profit before working capital changes 2 264.0 2 395.1 Decrease/(increase) in inventories 487.8 (766.2)Decrease/(increase) in trade receivables and other current assets 119.1 (425.1)(Decrease)/increase in trade payables and other current liabilities (45.6) 522.7

Cash generated from operations 2 825.3 1 726.5



36. Notes to the cash flow statements continued

2016R million

2015R million

36.2 Disposal of businessesDuring the prior year, the group disposed of the remaining South African-based businesses of the Paper segment, as set out in the note on discontinued operations (note 29). Net assets disposed – 2 331.3 Outside shareholders’ interest – 2.6 Goodwill disposed – 34.0 Loss on disposal of businesses – (350.2)

Total disposal consideration – 2 017.7 Less: Deferred sales proceeds – (35.0)

Net inflow on disposal – 1 982.7

36.3 Cash and cash equivalents/(overdrafts)Cash and cash equivalents included in the statement of cash flows consist of the following amounts on the statement of financial position:Bank balances, deposits and cash equivalents (note 12) 2 835.4 1 587.4 Bank overdraft (note 15) (993.4) (3 672.3)

1 842.0 (2 084.9)



37. Remuneration of directors and prescribed officers In terms of total guaranteed packages, plus other benefits for 2016, this detail is set out in the table below. Table 1(a) Executive directors’ and group executive committee members’ total remuneration 2016

Name

Basic salary(rand)


(rand)

Guaranteed package

(rand)

Value of other

benefits1

(rand)STI2

(rand)

Total remuneration

(rand)

SAP and PSP3

(rand)

Columns 1 2 3 = 1+2 4 5 6 = 3+4+5 7Executive directorsAM de Ruyter 6 369 501 431 589 6 801 090 20 273 2 442 045 9 263 408 754 789GR Fullerton 3 831 392 31 941 3 863 333 11 516 1 436 400 5 311 249 –FV Tshiqi 2 642 421 249 346 2 891 767 8 620 766 463 3 666 850 367 433

Total 12 843 314 712 876 13 556 190 40 409 4 644 908 18 241 507 1 122 222

Group executive committeeC Burmeister 2 475 833 246 307 2 722 140 8 114 1 664 371 4 394 625 236 477M Khutama 1 992 114 207 886 2 200 000 6 558 721 050 2 927 608 –RG Morris 3 067 042 273 958 3 341 000 9 959 1 823 117 5 174 076 393 318NP O’Brien 2 375 665 241 519 2 617 184 7 801 599 087 3 224 072 291 836EE Smuts 2 730 966 252 738 2 983 704 8 894 988 680 3 981 278 302 131

Total 12 641 620 1 222 408 13 864 028 41 326 5 796 305 19 701 659 1 223 7621 Other benefits refers to group personal accident cover.2 STI disclosed is based on performance during the 2016 financial year, but actual STI payments will only be made in December 2016.3 SAPs and PSPs disclosed were awarded in December 2013 (January 2014 for AM de Ruyter), with the applicable performance period ending

30 September 2016. Values represented are calculated using the VWAP as at 30 September 2016.



37. Remuneration of directors and prescribed officers continued Table 1(b) Executive directors’ and group executive committee members’ total remuneration 2015

Name

Basic salary(rand)

Payments by offshore companies

(rand)1


(rand)

Guaranteed package

(rand)

Value of other

benefits10

(rand)STI11

(rand)

Total remuneration

(rand)

SAP and PSP12

(rand)

Columns 1 2 3 4 = 1+2+3 5 6 7 = 4+5+6 8Executive directorsAM de Ruyter2 6 078 024 – 524 976 6 603 000 4 251 527 2 057 495 12 912 022 –GR Fullerton3 316 667 – – 316 667 882 90 250 407 799 –G Griffiths4 2 161 399 645 408 161 366 2 968 173 283 144 576 488 3 827 804 500 918 AH Howie5 444 234 – 39 109 483 342 1 347 – 484 689 –FV Tshiqi 2 528 725 – 214 886 2 743 612 7 482 557 125 3 308 218 330 695

Total 11 529 049 645 408 940 336 13 114 793 4 544 381 3 281 358 20 940 533 831 613

Group executive committeeC Burmeister 2 356 294 – 199 706 2 556 000 6 970 1 537 658 4 100 628 187 816 PA de Weerdt6 2 893 355 – 246 987 3 140 342 5 089 458 807 735 9 037 535 1 772 918 M Khutama7 338 335 – 28 332 366 667 1 022 79 420 447 108 –RG Morris8 2 921 912 – 247 916 3 169 829 496 901 600 762 4 267 492 354 584 SE Msane9 1 402 882 – 119 094 1 521 976 6 144 271 317 208 7 983 455 1 420 490 NP O’Brien 2 265 718 – 191 732 2 457 450 7 071 488 160 2 952 681 260 831 EE Smuts 2 671 703 – 225 097 2 896 800 8 269 596 487 3 501 556 213 726 Total 14 850 199 – 1 258 865 16 109 063 11 753 961 4 427 430 32 290 454 4 210 365

1 For the purposes of total remuneration, offshore payments have been converted into rand using the average exchange rate of GBP1: R18.5583.2 Received a sign on cash award of R4 233 152, paid on 5 January 2015.3 Appointed with effect from 1 September 2015.4 Retired with effect from 19 June 2015. Received leave pay to the value of R277 318 on termination.5 Appointed in the role of acting chief financial officer for the period 19 June 2015 to 31 August 2015.6 Early retirement with effect from 30 September 2015. Received a loss of office payment of R4 192 735. Received a cash settlement in respect of post-retirement medical aid of R886 232. Received a long service award to the value of R7 500 for 35 years’ service.7 Appointed with effect from 1 August 2015.8 Received a settlement in respect of post retirement medical aid of R487 887 in the form of a pension fund contribution.9 Retrenched with effect from 31 March 2015. Received a loss of office payment of R4 305 427. Received a special incentive in respect of the sale of the paper businesses of R1 834 793.10 Unless specifically noted above, other refers to group personal accident cover.11 STI disclosed is based on performance during the 2015 financial year, but actual STI payments will only be made in December 2015.12 SAPs and PSPs disclosed were awarded in December 2012, with the applicable performance period ending 30 September 2015 and the employment

period ending in December 2015. Values represented are calculated using the VWAP as at 30 September 2015.



37. Remuneration of directors and prescribed officers continued The table below illustrates, on an individual executive director and group executive committee member level, the value of long-term

incentives allocated, settled, forfeited and the current value of units not settled under each share plan. Table 2 Share Appreciation Plan

NameAward

date

Market value at award

date(rand)

Number of shareappre-ciation rights

awarded

Movements (forfeited

or withdrawn

as a result of

achieve-ment

against perfor-mance

condition)

Number of rights capable

of being exercised

Number of rights

exercisedExercise

date

Market value on exercise

date (rand)

Gains on rights

exercised(rand)

Balance of rights

not exercised

(rand)Lapse date

Executive directorsAM de Ruyter 17.12.2015 24.29 140 080 – – – – – – – 17.12.2022

15.12.2014 42.20 100 229 – – – – – – – 15.12.202102.01.2014 41.07 121 132 (121 132) – – – – – – 02.01.2021

GR Fullerton 17.12.2015 24.29 78 268 – – – – – – 17.12.2022

FV Tshiqi 17.12.2015 24.29 38 346 – – – – – – – 17.12.202215.12.2014 42.20 30 091 – – – – – – – 15.12.202103.12.2013 37.81 38 406 (38 406) – – – – – – 03.12.2020

03.12.2012 30.67 42 570 (42 570) – – – – – – 03.12.2019

Group executive committeeC Burmeister 17.12.2015 24.29 38 346 – – – – – – – 17.12.2022

15.12.2014 42.20 26 683 – – – – – – – 15.12.202103.12.2013 37.81 24 296 (24 296) – – – – – – 03.12.202003.12.2012 30.67 14 538 (14 538) – – – – – – 03.12.2019

M Khutama 17.12.2015 24.29 38 346 – – – – – – – 17.12.2022

RG Morris 17.12.2015 24.29 38 346 – – – – – – – 17.12.202215.12.2014 42.20 30 091 – – – – – – – 15.12.202103.12.2013 37.81 38 406 (38 406) – – – – – – 03.12.202003.12.2012 30.67 42 570 (42 570) – – – – – – 03.12.2019

NP O’Brien 17.12.2015 24.29 38 346 – – – – – – – 17.12.202215.12.2014 42.20 26 683 – – – – – – – 15.12.202103.12.2013 37.81 32 395 (32 395) – – – – – – 03.12.202003.12.2012 30.67 35 166 (35 166) – – – – – – 03.12.2019

EE Smuts 17.12.2015 24.29 38 346 – – – – – – – 17.12.202215.12.2014 42.20 26 683 – – – – – – – 15.12.202103.12.2013 37.81 32 395 (32 395) – – – – – – 03.12.202003.12.2012 30.67 14 538 (14 538) – – – – – – 03.12.2019



37. Remuneration of directors and prescribed officers continued Table 3 Performance Share Plan

NameAward

date

Number of conditional

shares awarded


or withdrawn

as a result of

achieve-ment


condition)

Number of shares capable of being

released

Number of shares released

Release date

Market value on

release date(rand)

Gain on vested

shares (rand)

Gain on additional dividend

shares (rand)

Total gain on vesting

and dividend

shares (rand)

Vested shares

still to be released

excluding dividend

shares

Executive directorsAM de Ruyter 17.12.2015 325 850 – – – – – – – – –

15.12.2014 187 272 – – – – – – – – – 02.01.2014 128 300 (89 810) – – – – – – – –

GR Fullerton 17.12.2015 153 823 – – – – – – – – –

FV Tshiqi 17.12.2015 93 353 – – – – – – – – – 15.12.2014 43 331 – – – – – – – – – 03.12.2013 62 458 (43 721) – – – – – – – – 03.12.2012 63 816 (51 053) 12 763 4 254 03.12.2015 27.16 115 539 18 034 133 573 8 509 05.12.2011 168 775 – 168 775 56 258 05.12.2014 41.35 2 326 268 219 114 2 545 382

56 258 07.12.2015 26.88 1 512 215 302 938 1 815 153 56 259 14.12.2010 76 200 – 76 200 25 400 17.12.2013 39.19 995 426 85 709 1 081 135

25 400 15.12.2014 42.20 1 071 880 122 296 1 194 176 25 400 14.12.2015 23.56 598 424 160 137 758 561 –

Group executive committeeC Burmeister 17.12.2015 91 533 – – – – – – – – –

15.12.2014 36 112 – – – – – – – – – 03.12.2013 40 196 (28 137) – – – – – – – – 03.12.2012 36 224 (28 979) 7 245 2 415 03.12.2015 27.16 65 591 10 239 75 831 4 830 05.12.2011 20 180 – 20 180 6 727 05.12.2014 41.35 278 161 26 175 304 336

6 727 07.12.2015 26.88 180 822 36 207 217 029 6 726 14.12.2010 19 000 – 19 000 6 333 17.12.2013 39.19 248 190 21 358 269 548

6 333 15.12.2014 42.20 267 253 30 468 297 721 6 334 14.12.2015 23.56 149 229 39 934 189 163 –

M Khutama 17.12.2015 85 923 – – – – – – – – –

RG Morris 17.12.2015 98 183 – – – – – – – – – 15.12.2014 46 631 – – – – – – – – – 03.12.2013 66 858 (46 801) – – – – – – – – 03.12.2012 68 426 (54 741) 13 685 4 562 03.12.2015 27.16 123 904 19 338 143 242 9 123 05.12.2011 172 775 – 172 775 57 592 05.12.2014 41.35 2 381 429 224 282 2 605 712

57 592 07.12.2015 26.88 1 548 073 310 115 1 858 188 57 591 14.12.2010 80 000 – 80 000 26 667 17.12.2013 39.19 1 045 080 89 980 1 135 060

26 667 15.12.2014 42.20 1 125 347 128 372 1 253 720 26 666 14.12.2015 23.56 628 251 168 124 796 375 –



37. Remuneration of directors and prescribed officers continued Table 3 continued Performance Share Plan continued

NameAward

date

Number of conditional

shares awarded


or withdrawn

as a result of

achieve-ment


condition)

Number of shares capable of being

released

Number of shares released

Release date

Market value on

release date(rand)

Gain on vested

shares (rand)

Gain on additional dividend

shares (rand)

Total gain on vesting

and dividend

shares (rand)

Vested shares

still to be released

excluding dividend

shares

Group executive committeeNP O’Brien 17.12.2015 90 403 – – – – – – – – –

15.12.2014 35 352 – – – – – – – – – 03.12.2013 49 608 (34 726) – – – – – – – – 03.12.2012 50 334 (40 267) 10 067 3 356 03.12.2015 27.16 91 149 14 205 105 354 6 711 05.12.2011 76 314 – 76 314 25 438 05.12.2014 41.35 1 051 861 99 075 1 150 936

25 438 07.12.2015 26.88 683 773 136 980 820 754 25 438 14.12.2010 64 500 – 64 500 21 500 17.12.2013 39.19 842 585 72 541 915 126

21 500 15.12.2014 42.20 907 300 103 517 1 010 817 21 500 14.12.2015 23.56 506 540 135 541 642 081 –

EE Smuts 17.12.2015 94 343 – – – – – – – – – 15.12.2014 38 762 – – – – – – – – – 03.12.2013 51 358 (35 951) – – – – – – – – 03.12.2012 41 244 (32 995) 8 249 2 750 03.12.2015 27.16 74 690 11 652 86 342 5 499 05.12.2011 23 960 – 23 960 7 987 05.12.2014 41.35 330 262 31 095 361 358

7 987 07.12.2015 26.88 214 691 43 008 257 699 7 986 14.12.2010 22 500 – 22 500 7 500 17.12.2013 39,19 293 925 25 278 319 203

7 500 15.12.2014 42,20 316 500 36 081 352 581 7 500 14.12.2015 23,56 176 700 47 285 223 985 –



37. Remuneration of directors and prescribed officers continued Table 4 Deferred Bonus Plan

NameGrant

date

Number of shares

purchased

Movements (forfeited or withdrawn

as a result of termination of

employment)

Market value at

grant date(rand)

Matching award release

date

Matching award

– number of shares released

Market value at award

date (rand)

Gain on matching

award (rand)

Value invested

in Nampak shares at

30 September 2016

at R19.61 per share

(rand)

Executive directorsAM de Ruyter 15.12.2015 25 617 – 23.57 17.12.2018 – – – 1 276 140

17.12.2014 39 459 – 42.14 18.12.2017 – – – –

GR Fullerton 15.12.2015 1 011 – 23.57 17.12.2018 – – – 19 826

FV Tshiqi 15.12.2015 6 243 – 23.57 17.12.2018 – – – 400 22017.12.2014 14 166 – 42.14 18.12.2017 – – – –14.12.2012 18 104 – 32.38 14.12.2015 18 104 23.56 426 530 –

Group executive committeeC Burmeister 15.12.2015 15 316 – 23.57 17.12.2018 – – – 464 796

17.12.2014 6 761 – 42.14 18.12.2017 – – – –18.12.2013 1 625 – 39.49 19.12.2016 – – – –14.12.2012 6 070 – 32.38 14.12.2015 6 070 23.56 143 009 –

M Khutama 15.12.2015 791 – 23.57 17.12.2018 – – – 15 512

RG Morris 15.12.2015 5 985 – 23.57 17.12.2018 – – – 456 65817.12.2014 13 036 – 42.14 18.12.2017 – – – –18.12.2013 4 266 – 39.49 19.12.2016 – – – –14.12.2012 12 908 – 32.38 14.12.2015 12 908 23.56 304 112 –

NP O’Brien 15.12.2015 4 255 – 23.57 17.12.2018 – – – 362 37317.12.2014 11 113 – 42.14 18.12.2017 – – – –18.12.2013 3 111 – 39.49 19.12.2016 – – – –14.12.2012 12 982 – 32.38 14.12.2015 12 982 23.56 305 856 –

EE Smuts 15.12.2015 5 942 – 23.57 17.12.2018 – – – 476 15017.12.2014 10 465 – 42.14 18.12.2017 – – – –18.12.2013 7 874 – 39.49 19.12.2016 – – – –14.12.2012 9 087 – 32.38 14.12.2015 9 087 23.56 214 090 –

Black Management TrustMr Tshiqi remains a beneficiary in the BMT with the following awards granted:

Name Number of awards granted Founding grant price (rand)

FV Tshiqi 982 579 15.13



37. Remuneration of directors and prescribed officers continued Table 5 Non-executive directors’ remuneration

The non-executive remuneration paid during the year under review (as approved by shareholders) and the total comparative figure for 2015 are disclosed below.

NameBase

feeMeeting

fees

Audit committee total fees

(rand)


total fees (rand)


total fees (rand)

Investment committee total fees

(rand)

Risk and sustainability

committee total fees

(rand)

Social, ethics and

transformation committee

total fees (rand)

Total 2016 (rand)

Total 2015 (rand)

RC Andersen 164 200 103 800 185 000 98 500 71 450 176 800 – – 799 750 777 980E Ikazoboh 164 200 69 200 – – – 81 900 – – 315 300 347 970RJ Khoza 164 200 103 800 – – 71 450 – – – 339 450 321 745NV Lila3 164 200 103 800 185 000 – – – 170 101 – 623 101 416 540PM Madi 164 200 69 200 – – – 90 200 90 200 176 800 590 600 546 410TT Mboweni1 1 667 400 – – – – – – – 1 667 400 1 580 500IN Mkhari 164 200 86 500 185 000 – – 90 200 – 90 200 616 100 548 590DC Moephuli2 164 200 69 200 – – – 81 900 81 900 – 397 200 416 530CWN Molope3 164 200 103 800 362 700 – – – 97 102 – 727 802 658 755RV Smither4 – – – – – – – – – 255 875PM Surgey 164 200 103 800 – 191 050 71 450 – 90 200 90 200 710 900 704 380

3 145 200 813 100 917 700 289 550 214 350 521 000 529 503 357 200 6 787 603 6 575 2751 Fee includes participation in board sub-committee meetings. 2 Fee donated to Transnet Foundation.3 NV Lila took over chairman role of the risk and sustainability committee from CWN Molope with effect from 3 November 2015.4 Resigned from the board and all committees with effect 4 February 2015.

38. Subsequent eventsThere have been no subsequent events from the reporting date up to the date of the financial statements.

Directors’ fees (rand)


Company statement of financial positionat 30 September 2016

Notes2016

R million2015

R million

ASSETSNon-current assetsInvestment in associate 1 2.5 3.3 Investment in subsidiaries 2 2 330.6 2 311.3

2 333.1 2 314.6

Current assetsOther receivables 4 33.6 417.8 Subsidiary companies 11 886.3 533.2 Bank balances and deposits 5 2.1 1.7

922.0 952.7

Total assets 3 255.1 3 267.3

EQUITY AND LIABILITIESCapital and reservesShare capital 6 35.4 36.1 Capital reserves 6 455.1 435.8 Retained earnings 6 2 740.1 2 785.9

3 230.6 3 257.8

Current liabilitiesOther payables 7 13.9 7.5 Subsidiary companies 11 1.5 1.9 Tax liabilities 9.1 0.1

24.5 9.5



Company statement of comprehensive incomefor the year ended 30 September 2016

Notes2016

R million2015

R million

Employee benefit expense 6.7 6.6 Other operating expenses 0.9 1.7 Other operating income 15.1 11.5

Operating profit 7.5 3.2 Income from investments 8 600.9 1 052.5

Profit before tax 608.4 1 055.7 Income tax expense 9 20.5 3.0



Notes2016

R million2015

R million

Opening balance 3 257.8 3 255.4 Net shares issued during the year 28.9 74.9 Share-based payment expense/(income) 19.3 (3.6)Share grants exercised (28.8) (75.0)Shares repurchased and cancelled (0.8) –Total comprehensive income for the period 587.9 1 052.7 Dividends paid 10 (633.7) (1 046.6)


Comprising:Share capital 6 35.4 36.1 Capital reserves 6 455.1 435.8

Share premium 250.7 221.9 Share option reserve 204.4 213.9

Retained earnings 6 2 740.1 2 785.9

Total equity 3 230.6 3 257.8

Company statement of changes in equityfor the year ended 30 September 2016


Notes2016

R million2015

R million

Cash flows from operating activitiesCash generated from/(utilised in) operations 12.1 15.8 (72.9)Income from investments 600.9 1 052.5 Income tax paid (11.5) (7.0)

Cash flows from operations 605.2 972.6 Dividends paid (633.7) (1 046.6)

Cash utilised in operating activities (28.5) (74.0)

Cash flows from investing activitiesDecrease/(increase) in non-current financial assets and investments 0.8 (0.3)

Cash generated from/(utilised in) investing activities 0.8 (0.3)

Cash flows from financing activitiesCapital raised from issue of shares 28.9 74.9 Shares repurchased and cancelled (0.8) –

Cash raised from financing activities 28.1 74.9

Net increase in cash and cash equivalents 0.4 0.6 Cash and cash equivalents at beginning of year 1.7 1.1

Cash and cash equivalents at end of year 12.2 2.1 1.7

Company statement of cash flowsfor the year ended 30 September 2016


Notes to the company financial statementsfor the year ended 30 September 2016

2016R million

2015R million

1. Investment in associate(Refer to Annexure B for details)Cost of investment in associate 2.5 3.3

2.5 3.3

2. Investments in subsidiaries(Refer to Annexure B for details)Interest in subsidiaries 3 518.4 3 518.4 Share-based payments contribution 215.4 196.1 Net amount due by subsidiaries1 79.8 79.8 Less: Impairment losses (1 483.0) (1 483.0)

Shares at cost less impairments 2 330.6 2 311.3

Directors’ valuation 2 330.6 2 311.3

¹ The loans do not bear interest and have no fixed repayment terms.

3. Other non-current financial assetsResidual right in Nampak Black Management Trust (BMT) 29.9 414.1 Less: Amounts receivable within one year, reflected in other receivables (note 4) (29.9) (414.1)

Total – –

In September 2005, Nampak Ltd made a founding grant to the BMT on behalf of the employer companies. Following the final allocations to participants in the BMT, the founding grant was recovered from the employer companies. However, Nampak still has the right as a residual beneficiary of the BMT. During the year the founding grant was largely settled in the winding up of the BMT. Refer notes 14 and 22 of the consolidated financial statements.

4. Other receivablesCurrent portion of receivables (note 3) 29.9 414.1Other 3.7 3.7

Total 33.6 417.8

5. Bank balances and depositsBank balances 2.1 1.7

Total 2.1 1.7


Notes to the company financial statements continuedfor the year ended 30 September 2016


Attributable to equity holders of the company

Notes

Share capital

R million


Share option

reserveR million


Total equity

R million

Reconciliation of movement in capital and reserves

At 1 October 2014 36.1 147.0 292.5 2 779.8 3 255.4 Employee share option scheme: –– value of employee services – – (3.6) – (3.6)– share grants exercised – – (75.0) – (75.0)– proceeds from shares issued –* 74.9 – – 74.9 Profit for the year – – – 1 052.7 1 052.7 Dividends paid 10 – – – (1 046.6) (1 046.6)

At 30 September 2015 36.1 221.9 213.9 2 785.9 3 257.8 Employee share option scheme:– value of employee services – – 19.3 – 19.3 – share grants exercised – – (28.8) – (28.8)– proceeds from shares issued 0.1 28.8 – – 28.9 Shares repurchased and cancelled (0.8) – – – (0.8)Profit for the year – – – 587.9 587.9 Dividends paid 10 – – – (633.7) (633.7)

At 30 September 2016 35.4 250.7 204.4 2 740.1 3 230.6




6. Capital and reserves continued

2016R million

2015R million

Share capitalAuthorised:776 857 200 ordinary shares of 5 cents each 38.9 38.9100 000 6.5% cumulative preference shares of R2 each 0.2 0.2400 000 6% cumulative preference shares of R2 each 0.8 0.8

Total 39.9 39.9

Issued:688 668 338 (2015: 702 496 655) ordinary shares of 5 cents each 34.4 35.1100 000 6.5% cumulative preference shares of R2 each 0.2 0.2400 000 6% cumulative preference shares of R2 each 0.8 0.8

Total 35.4 36.1

14 909 744 (2015: 18 476 043) ordinary shares have been set aside for employees’ share schemes.

Capital reservesShare premium 250.7 221.9Share option reserve 204.4 213.9

Total 455.1 435.8

Reconciliation of number of ordinary shares issuedNumber of ordinary shares issued at beginning of year 702 496 655 700 707 537 Repurchase and cancellation of ordinary shares* (14 969 114) –Ordinary shares allotted to employees and retired employees other than directors in terms of the Nampak Ltd Performance Share Plan (PSP) 844 188 489 630 Ordinary shares allotted to directors in terms of the PSP 111 440 567 179 Ordinary shares allotted to employees and former employees other than directors in terms of the Nampak Ltd Share Appreciation Plan (SAP) 13 831 287 346 Ordinary shares allotted to directors in terms of the SAP – 215 366 Ordinary shares allotted to employees and former employees other than directors in terms of the Nampak Ltd Deferred Bonus Plan (DBP) 153 234 107 597 Ordinary shares allotted to directors in terms of the DBP 18 104 122 000

Number of ordinary shares issued at end of year 688 668 338 702 496 655

* In November 2015, Nampak Ltd exercised its option in terms of the preferred ordinary share subscription agreement between Nampak and Red Coral Investments 23 (Pty) Ltd (Red Coral) to repurchase 14 969 114 of its ordinary shares from Red Coral as calculated in terms of the formula provided in the agreement.

Preference sharesThere were no changes to the issued 6.5% and 6% preference shares.

7. Other payablesAccruals 10.8 7.4Other 3.1 0.1

Total 13.9 7.5

Accruals principally comprise amounts outstanding for ongoing costs.

The directors consider that the carrying amount of other payables approximates their fair value.



8. Income from investments

2016R million

2015R million

Normal dividends – South Africa 579.5 1048.5Interest received from subsidiaries 21.4 4.0

600.9 1052.5

9. Income taxCurrent tax – current year 22.7 6.6 – prior year (2.2) (3.6)

Total 20.5 3.0

The company tax rate in South Africa is 28% (2015: 28%) of the estimated assessable profit for the year.

Reconciliation of rate of taxEffective company rate of tax % 3.4 0.3

Reduction in tax charge due to:– Dividend income % 26.6 27.8 – Adjustment for prior year normal tax % 0.4 0.3

Increase in tax charge due to:– Disallowable expenses % (0.4) (0.2)– Imputed income – section 9D % (2.0) (0.2)

Normal tax rate % 28.0 28.0

10. Dividends and cash distributionsDividends paid Final dividend number 87 paid on 18 January 2016: gross amount of 92.0 cents per share (2015: number 85 – 107.0 cents per share) 633.6 751.5 No interim dividend paid (2015: number 86 – 42.0 cents per share) – 295.0

633.6 1 046.5 Other dividends 0.1 0.1

Total dividends paid 633.7 1 046.6

No dividend was declared for the year ending 30 September 2016.

2016Cents

2015Cents

Analysis of dividends declared in respect of current year’s earnings:Dividends per ordinary shareInterim – 42.0 Final – 92.0

– 134.0

6.5% and 6% cumulative preference dividendsPreference dividends totalling R0.1 million (2015: R0.1 million) were declared on 26 November 2015 and 12 July 2016, and paid on 25 January 2016 and 1 August 2016 respectively.



11. Related-party transactions

2016R million

2015R million

The company entered into various transactions with subsidiaries and special purpose entities which are deemed to be controlled by the group during the year. Interest, dividends and fees received from these entities are listed in note 8.

Non-current amounts payable by such entities are included in note 2.

Current amounts due by subsidiary companies are as follows:Nampak Products Ltd1 885.6 533.2 Black Management Trust2 0.7 –

886.3 533.2

Current amounts outstanding to subsidiary companies are as follows:Nampak Share Purchase Trust2 1.0 1.0 Nampak Employee Share Trust2 0.5 0.5 Black Management Trust2 – 0.4

1.5 1.9 1These loans bear interest at the average deposit rate and have no fixed repayment terms.2These loans do not bear interest and have no fixed repayment terms.

GuaranteesGuarantee for an amount not exceeding (US$100 million, 2015: US$63 million) on behalf of Nampak International Ltd in favour of the Bank of Merrill Lynch International and Export Development Bank of Canada for a term loan facility 1 372.3 873.4Guarantee for an amount not exceeding US$55 million on behalf of Nampak International Ltd in favour of Standard Bank SA for a revolving credit facility 754.7 762.5Guarantee for an amount not exceeding US$40 million on behalf of Nampak International Ltd in favour of Standard Bank SA for a revolving credit facility 548.9 554.5Guarantee for an amount not exceeding US$132 million on behalf of Nampak International Ltd in favour of Standard Bank SA for a revolving credit facility 1 811.4 1 829.9Guarantee for an amount not exceeding US$175 million in favour of noteholders for the Note Purchase Agreement issued by Nampak International Ltd 2 401.0 –Guarantee for an amount not exceeding R2 billion in favour of noteholders for the DMTN Programme issued by Nampak Products Ltd 2 000.0 –Guarantee for an amount not exceeding US$35 million in favour of Standard Bank for an amortising credit facility 480.2 –Guarantee for an amount not exceeding US$1.2 million on behalf of Nampak International Ltd in favour of U.S. Steel relating to purchases by African operations – 16.6Guarantee for an amount not exceeding US$0.8 million on behalf of Nampak International Ltd in favour of U.S. Steel relating to goods and services delivered by Košice – 11.1Guarantee for an amount not exceeding US$2 million on behalf of Nampak International Ltd in favour of ArcelorMittal – 27.7Guarantee for an amount not exceeding US$0.5 million on behalf of Nampak International Ltd in favour of Sappi Deutschland – 6.9Guarantee for an amount not exceeding US$0.3 million on behalf of Nampak International Ltd in favour of U.S. Steel Serbia – 4.2Guarantee for an amount not exceeding R1 billion on behalf of Nampak Products Ltd in favour of Nedbank for general banking facilities 1 000.0 1 000.0Guarantee for an amount not exceeding R1 billion on behalf of Nampak Products Ltd in favour of Nedbank for a revolving term loan 1 000.0 1 000.0Guarantee for an amount not exceeding R1 billion on behalf of Nampak Products Ltd in favour of Nedbank for a five-year term loan – 1 000.0Guarantee for an amount not exceeding R747.5 million on behalf of Nampak Products Ltd in favour of Rand Merchant Bank for debt facilities 747.5 747.5Guarantee for an amount not exceeding R200 million on behalf of Nampak Products Ltd in favour of Bank of China Ltd for a 12-month bank facility 200.0 200.0



11. Related-party transactions continued

2016R million

2015R million

Guarantee for an amount not exceeding R115 million on behalf of Nampak Products Ltd in favour of Nedbank for an indirect facility 115.0 115.0Guarantee for an amount not exceeding R1.2 million on behalf of Nampak Products Ltd in favour of Unilever SA Home & Personal Care (Pty) Ltd for the supply and installation of case erectors and case sealers – 1.18Guarantee for an amount not exceeding R650 million on behalf of Nampak Products Ltd in favour of Citibank for banking facilities 650.0 650.0Guarantee for an amount not exceeding R400 million on behalf of Nampak Products Ltd in favour of Investec Bank Ltd for general banking facilities 400.0 400.0Guarantee on behalf of Nampak Products Limited in favour of Imbali Props 21 (Pty) Ltd in respect of the annual rental of R145.2 million payable under the 15-year lease agreement for factory premises in South Africa 145.2 –Guarantee on behalf of Nampak Products Limited in favour of Imbali Props 21 (Pty) Ltd in respect of the annual rental of R4.6 million payable under the three-year lease agreement for factory premises in South Africa 4.6 –

Key management personnelDetails of significant positions held by key management personnel and transactions with these entities are provided in note 37 of the group financial statements.

The remuneration of directors and other members of key management during the year was as follows:Short-term employee benefits 37.9 34.9Termination benefits – 8.8Share-based payments 11.4 7.1

49.3 50.8

The remuneration of directors and key executives is determined by the remuneration committee, having regard to the performance of individuals and market trends.

12. Notes to the cash flow statements12.1 Reconciliation of profit before taxation to cash retained from operations

Profit before taxation 608.4 1 055.7Adjustment for:Income from investments (600.9) (1 052.5)

Operating profit before working capital changes 7.5 3.2Decrease in other receivables 384.2 –Decrease in other payables (22.4) (74.0)Movement in subsidiary company loans (353.5) (2.1)

Cash generated from/(utilised in) operations 15.8 (72.9)

12.2 Cash and cash equivalentsCash and cash equivalents included in the statement of cash flows comprise the following amounts on the statement of financial position:Bank balances and deposit (note 5) 2.1 1.7


Composition of the group and corporate activityfor the year ended 30 September 2016

Annexure AThe consolidated financial statements include the accounts of Nampak Ltd (the company) and all of its subsidiaries at 30 September 2016.

1. Interests in subsidiaries, associates, joint ventures and unconsolidated investmentsThe subsidiaries, associates, joint ventures and unconsolidated investments of Nampak Ltd fall under two main holding companies, namely Nampak Products Ltd and Nampak International Ltd. During the year, the Nampak Southern Africa Holdings Ltd group was transferred from Nampak Ltd to Nampak International Ltd.

Nampak Products Ltd is registered in South Africa and operates primarily in South Africa, Angola, Namibia and Swaziland. Nampak International Ltd is registered in the Isle of Man and operates in the United Kingdom, as well as Botswana, Ethiopia, Kenya, Malawi, Nigeria, Tanzania, Zambia and Zimbabwe.

The group holds majority voting rights in all of its subsidiaries. Non-controlling shareholders have significant interests in two of the group’s subsidiaries.

The group also holds interests in two associates and one joint venture. These are not material to the group.

Refer to Annexure B for more details.

2. Entities acquired during the yearNo entities were acquired during the year.

3. Entities disposed of during the yearAn agreement for the sale of Nampak’s 50% shareholding in, and loans to, Sancella SA (Pty) Ltd was entered into on 21 July 2015, with the transaction being effective 1 December 2015. The proceeds from the sale were applied to settle the outstanding loan balances. The loans had been impaired to the amount expected to be recovered in terms of the transaction at 30 September 2015 and therefore no further loss has been recognised.

In addition, an agreement of sale for Nampak’s 50% shareholding in the joint venture Crown Cork Company (Mozambique) LDA was entered into with the effective date of sale being 15 March 2016.

Refer to note 7 for more details on the disposals.


4. Non-controlling interests in the group’s activitiesThe following subsidiaries have non-controlling interests that are material to the group:

Ownership interest held by NCI (%)

Subsidiary Principal place

of businessOperating

segment 2016 2015

Nampak Bevcan Angola LDA (previously Angolata LDA) Angola Metals 30.00 30.00 Nampak Zimbabwe Ltd Zimbabwe Plastics/Paper 48.57 48.57

The financial information for Nampak Bevcan Angola LDA and Nampak Zimbabwe Ltd is set out below:

Bevcan Angola Nampak Zimbabwe

2016R million

2015R million

2016R million

2015R million

Revenue 1 664.3 1 347.7 1 398.8 948.7

Net profit for the year (535.5) (7.8) 58.8 43.5 Attributable to:

Owners of Nampak Ltd (374.8) (5.5) 30.2 22.4 Non-controlling interests in subsidiaries (160.7) (2.3) 28.6 21.1

Other comprehensive income 33.9 1.4 (14.5) 145.3

Total comprehensive income (501.6) (6.4) 44.3 188.8 Attributable to:


Total assets 3 609.2 3 579.6 1 540.1 1 367.3

Total liabilities 4 280.3 3 749.1 629.4 500.6

Total equity (671.1) (169.5) 910.7 866.7 Attributable to:


5. Interests in associates and joint venturesThe associates of the group are Group Risk Holdings (Pty) Ltd and Collect-a-Can (Pty) Ltd, and the group’s joint venture is Softex Tissue Products (Pvt) Ltd. During the current year, the group disposed of its 50% shareholding in each of the joint ventures Sancella SA (Pty) Ltd and Crown Cork (Mozambique) LDA. The results of these entities are not material. Refer to notes 6 and 7 for more detail.

6. Financial restrictions imposed on group entitiesThe group has facilities with external institutions that have imposed certain covenants that may impact the group’s ability to borrow additional funds.

These covenants are as follows:•• To maintain a net debt to EBITDA of not more than 3.0 times.•• To maintain an interest cover ratio of not less than 4.0 times.

At year-end, the group had sufficient headroom with respect to both its facilities and covenants

Composition of the group and corporate activity continuedfor the year ended 30 September 2016


Interests in subsidiaries, associates and joint venturesfor the year ended 30 September 2016

Annexure B

Interest of holding company

Type (see note below)

Country of incorporation

Issued share

capital

Effective percentage holding Shares at cost Indebtedness

2016 %

2015 %

2016 Rm

2015 Rm

2016 Rm

2015 Rm

1. Subsidiaries (consolidated)Auspac Ltd D UK £4 050 000 100 100Bullpak Ltd O Kenya KES4 760 000 100 100CarnaudMetalbox Zimbabwe Ltd O Zimbabwe US$98 994 100 100Crown Cork Company Zimbabwe (1958) (Pvt) Ltd D Zimbabwe US$7 105 100 100EPS (Foston) Ltd D UK £100 100 100Four Four Two Ltd I UK £1 000 100 100Hunyani Forests Ltd O Zimbabwe US$110 000 51.43 51.43 Hunyani Paper and Packaging (Pvt) Ltd O Zimbabwe US$24 000 51.43 51.43 Hunyani Properties Ltd O Zimbabwe US$652 700 51.43 51.43 International Cartons & Packaging Ltd O Zambia ZMK77 526 000 100 100Malbak Ltd I RSA R100 100 100 1 482.9 1 482.9 – –Megapak Zimbabwe (Pty) Ltd O Zimbabwe US$20 100 51.43 51.43Megaplastics Ltd I Zimbabwe US$0 100 100Metal Box (Namibia) (Pty) Ltd D Namibia N$1 100 100Metal Box South Africa Ltd D RSA R100 100 100Nampak Bevcan Angola LDA (previously Angolata LDA) O Angola K4 580 650 70 70Nampak Bevcan Nigeria Ltd (previously Alucan Packaging Ltd) O Nigeria US$5 402 000 100 100Nampak Consumer Goods Ltd O UK £100 100 –Nampak Cartons Nigeria Ltd O Nigeria NGN14 000 000 100 100Nampak Glass (Pty) Ltd D RSA R1 100 100Nampak Holdings (UK) Ltd I UK US$184 100 100Nampak Holdings Ltd I Mauritius US$37 094 100 100Nampak Insurance Company Ltd Insurance Isle of Man £100 000 100 100Nampak International Ltd I Isle of Man US$112 863 100 100 1 889.3 1 889.3 – –Nampak Kenya Ltd O Kenya KES40 280 000 100 100Nampak Liquid Botswana (Pty) Ltd O Botswana BWP100 100 100Nampak Liquid Cartons (Pty) Ltd D RSA R280 100 100Nampak Metal Packaging Ltd Reinstated RSA R1 100 –Nampak Nigeria Ltd O Nigeria NGN107 044 183 100 100Nampak Packaging (Pvt) Ltd O Ethiopia ETB3 848 000 100 100Nampak Paper Ltd Reinstated RSA R2 037 533 100 –Nampak Petpak (Namibia) (Pty) Ltd O Namibia N$100 100 100Nampak Plastics Europe Ltd O UK £4 863 028 100 100Nampak Products Ltd O RSA R3 758 641 100 100 93.7 93.7 79.8 79.8 Nampak Properties (Isle of Man) Ltd P Isle of Man £100 100 100Nampak Properties Nigeria Ltd P Nigeria NGN14 000 000 100 100Nampak Southern Africa Holdings Ltd I Mauritius US$4 726 922 100 100 52.5 52.5 – –


Interests in subsidiaries, associates and joint ventures continuedfor the year ended 30 September 2016

Annexure B continued

Interest of holding company

Type (see note below)

Country of incorporation

Issued share

capital

Effective percentage holding Shares at cost Indebtedness

2016 %

2015 %

2016 Rm

2015 Rm

2016 Rm

2015 Rm

1. Subsidiaries (consolidated)Nampak Tanzania Ltd O Tanzania TZS304 638 620 100 100Nampak Technical Services Ltd O Isle of Man £1 100 100Nampak Tissue (Pty) Ltd D RSA R100 100 100Nampak Zambia Ltd O Zambia ZMK5 000 100 100Nampak Packaging Malawi Ltd O Malawi MWK13 450 000 100 100Nampak Zimbabwe Ltd (previously Hunyani Holdings Ltd) I Zimbabwe US$319 711 51.43 51.43Southern Paper Industries (Pty) Ltd Reinstated RSA R1 000 000 100 –Teknol BV I Netherlands €18 151 100 100Teknol NV I Antilles US$6 000 100 100Transmar (Isle of Man) Ltd I Isle of Man US$600 000 100 100

Total 3 518.4 3 518.4 79.8 79.8

2. Joint ventures(Equity accounted)Crown Cork Company (Mozambique) LDA O Mozambique MT3 800 million – 50Sancella S.A. (Pty) Ltd O RSA R5 000 – 50Softex Tissue Products (Pvt) Ltd O Zimbabwe US$2 897 50 50

3. Associates(Equity accounted)Collect-a-Can (Pty) Ltd O RSA R4 000 000 40 40Group Risk Holdings (Pty) Ltd Insurance RSA R11 300 17 22

4. Other investments

Type (see note

below)

Number of shares held by group

Effective percentage holding

2016 2015 2016 2015

Unlisted investmentsEthiopian Crown Cork & Can Industry O 5 750 5 750 25 25Nampak Polyfoil Zimbabwe (Pvt) Ltd O 1 1 <1 <1 PET RecoZim (Pvt) Ltd D 10 10 10 10

TypeO – OperatingI – Investment holdingD – Dormant


Analysis of registered shareholders and company schemes

Registered shareholder spreadIn accordance with the JSE Listings Requirements, the following table confirms the spread of registered shareholders as at 30 September 2016:

Registered shareholder spread

Shareholder spreadNumber


shareholdersNumber


capital

1—1 000 shares 4 024 57.44 1 399 250 0.201 001—10 000 shares 2 119 30.25 6 869 384 1.0010 001—100 000 shares 517 7.38 17 769 103 2.58100 001—1 000 000 shares 264 3.77 83 437 329 12.121 000 001 shares and above 81 1.16 579 193 272 84.10

Total 7 005 100 688 668 338 100

Public and non-public shareholdingsWithin the shareholder base, we are able to confirm the split between public shareholdings and directors/company-related schemes as being:

Shareholder typeNumber


shareholdersNumber


capital

Non-public shareholders 23 0.33 50 026 106 7.26•• Directors and associates 10 0.14 343 418 0.05•• Prescribed officers and management 11 0.16 830 913 0.12•• Treasury shares 1 0.01 45 070 855 6.54•• Empowerment 1 0.01 3 780 920 0.55

Public shareholders 6 982 99.67 638 642 232 92.74

Total 7 005 100.00 688 668 338 100.00

Substantial investment management and beneficial interestsSubstantial investment management and beneficial interests above 3%Through regular analysis of STRATE registered holdings, and pursuant to the provisions of section 56 of the Companies Act, the following shareholders held directly and indirectly equal to or in excess of 3% of the issued share capital as at 30 September 2016:

Investment management shareholdings

Investment managerTotal

shareholding %

Allan Gray Investment Council 128 888 113 18.72PIC 75 022 828 10.89Lazard Asset Management LLC Group 57 122 575 8.29Somerset Capital Management LLP 51 367 483 7.46Nampak Products Ltd 45 070 854 6.54Wellington Management Company 31 768 406 4.61Capital Research & Management 22 249 000 3.23

Total 411 489 259 59.75


Shareholders’ diary

Annual general meeting 1 February 2017Interim statement and ordinary dividend announcement for the half year ending 31 March 2017 May 2017Group results and ordinary dividend announcement for the year ending 30 September 2017 November 2017

DividendOrdinaryFinal for the year ended 30 September 2016 No dividend being paidInterim for the half-year ending 31 March 2017 To be paid in July 2017

Preference6.5% and 6% cumulative Payable twice per annum during February and August


Corporate information

BASTION GRAPHICS

AuditorsDeloitte & ToucheBuildings 1 and 2, Deloitte PlaceThe Woodlands Office ParkWoodlands DriveWoodmead, Sandton

Business address and registered officeNampak HouseHampton Office Park20 Georgian Crescent EastBryanston, 2191, South AfricaPO Box 69983, Bryanston, 2021Telephone +27 719 6300 Website www.nampak.com

Company secretaryNeill O’BrienBProcPO Box 69983, Bryanston, 2021Telephone +27 11 719 6332neill.o’[email protected]

Investor relationsZanele SalmanBSc (Hons), DipMM, MBAPO Box 69983, Bryanston, 2021Telephone +27 11 719 [email protected]

Share registrarComputershare Investor Services (Pty) LtdRosebank Towers15 Bierman Avenue, Rosebank, 2196PO Box 61051, Marshalltown, 2107Telephone +27 11 370 5000Telefax +27 11 370 5487

SponsorUBS South Africa (Pty) Ltd64 Wierda Road EastSandton, 2196, South AfricaPO Box 652863, Benmore, 2010 Telephone +27 11 322 7000Telefax: +27 11 784 8280

SustainabilityLynne Kidd BA (Hons)PO Box 69983, Bryanston, 2021Telephone +27 11 719 [email protected]

www.nampak.com

NA

MPA

K LIMITED

FINA

NCIA

L STATEMEN

TS 2016