CHAPTER ONE
BACKGROUND OF THE STUDY
1.1 INTRODUCTION
In a manufacturing firm, the inevitable fact is that materials, trained personnel, proper funding and good management constitute the component part of accountability as a watch word and because of this in a day-to-day business affairs there is need for accurate and informative financial records and statement which are necessary in making sound decisions by the managers. It is based on this premise that accounting information comes in since it objective is to help managers determine whether a profit has been made, to know the amount of the assets on hand, the amount owned to creditors and amount of owners equity which will help them have a good timely and useful information.
However, accounting is said to be a system that measures business activities processes that information into reports and communicates these finding to decision makers, Harris (2002).On the other hand, the series of activities which are limited and form a progression of steps beginning with observation, the collecting, recording, analyzing and finally communicating information to its users. This information helps managers to take proper decision and control operations. It serves as a decision tool and can only come from a well-designed and well-run accounting system. Although management is not involve in the details of day-to-day accounting procedures or end of period accounting procedures but the efficiency of these procedures has a major influence on the quality and promptness of the information they receives. Brock, Palmer & Cunningham (2001).
Therefore, accounting information in champion breweries is expected to have the essential quality of good and accurate financial transaction of the firm since it is the foundation on which the activities of their business depend on. Champion breweries plc was incorporated as a private limited liability company on the 31st of July 1974 within the name south east breweries limited because of political imperatives in Nigeria the company’s name was changed from south east breweries limited to cross rive breweries limited and thereafter to champion breweries plc.
The latter name, champion breweries limited was changed to champion breweries plc on the 1st September, 1992.On the 24th of November, 1974 the government of the then south eastern state of Nigeria signed an agreement with Messrs Haze Bravery.GMBH of Hamburg, (technical partners) for the supply and construction of a turkey brewery in Uyo with a capacity of 150000 hectoliters. The foundation stone of the brewery was officially commissionable and its products Champion larger been launched into the market with success.On the 22nd of July 19797, a second contract was surged with the technical partners to increase the capacity of the brewery from 150000 to 50000 hectolitres. The foundation stone for the expansion was laid on the 24th of December 1977.
The expansion, which incorporated more sophisticated machinery, was completed and put on trial, run in September 1979. The second production line was officially commissioned on the 11th same year the company’s products “Champion Leger Beer” and “Champion Malta” won silver medal at an international medal for quality at the 16thworld selection for beers and non-alcoholic beverages in Luxemburg. Consequent upon pressure of demand for its product, million hectoliters. The third expansion, which gulped substantial resources, could not be realized. The non-completion of expansion program coupled with back of working capital and inadequate maintenance of the plants force the company to close its doors for business between 1990 – 1991. All subsequent reactivation attempts did not yield the desired results.With the audient of democracy in Nigeria in May 1999, the government of Akwa Ibom state made the reactivation of the brewery a cardinal activity. Consequently, the Akwa Ibom State investment and industrial promotion council (AKIPOC) was charged with the responsibility reactivation the company person to this mandate, AKIPOC, in conjunction with the board of directors of the company went to the market to solicit for core investors/technical managers, in the process Messrs,
Montgomery venture incorporated of panama (with offices in Geneva, Switzerlar) was identified and brought into the company as core investors/technical managers after a memorandum of understanding was signed.Based on the memorandum, a reactivation committee was set up by board of the company to work with the core investors/technical managers for the revamping of the company. The reactivation process which commenced in February 2000, lasted about nineteen month, now the plant has been revamped and restructured to use one hundred percent locally sourced raw materials. The brewery is now fully operational and the capacity is 500000 hectolitres per annum. (Champion Breweries Plc 2001 Annual Report).