GREIF NIGERIA PLC Apapa, Nigeria - Proshare

GREIF NIGERIA PLC Apapa, Nigeria ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL INFORMATION FOR THE YEAR ENDED 31 OCTOBER 2017

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS, AUDITED FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2017

CONTENTS

PAGE

Directors, Bankers, Professional Advisers, etc.

2

Notice of Meeting

3

Results at a Glance

4

Chairman’s Statement

5

Corporate Governance

8

Report of Directors

10

Statement of Directors’ Responsibilities

14

Report of the Audit Committee

15

Independent Auditors Report

16

Statement of Financial Position

18

Statement of Profit & Loss & Comprehensive Income

19

Statement of Changes in Equity

20

Statement of Cash Flows

21

Notes to the Financial Statements

22

Statement of Value Added

56

Five Years Financial Summary

57

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GREIF NIGERIA PLC FOR THE PERIOD ENDED 31 OCTOBER 2017

DIRECTORS, PROFESSIONAL ADVISERS DIRECTORS:

Mr. Adedayo Abiodun Olowoniyi - Appointed April 21, 2017 Chairman Mr. Louis Wentzel -South African Resigned April 21, 2017 Mr. Olukunle Adebayo Obadina Managing Director Mr. Gaius Adetayo Omotayo Mr. Erik Maarten ’t Sas - Dutch

COMPANY SECRETARY:

Marina Nominees Limited Aret Adams House 233 Ikorodu Road, Ilupeju, Lagos Tel: 01-7740219, 0818-650-7567 Email: [email protected]

REGISTERED OFFICE:

1, Alapata Road. (Off Dockyard Road) Apapa, Lagos, Nigeria Tel: 01-212-1764; 01-212-1765 Email: [email protected] Website: www.greif.com

AUDITORS:

Ernst & Young (Chartered Accountants) 10th & 13th Floor, UBA House 57 Marina, Lagos.

SOLICITORS:

Irving and Bonnar Akuro House (7th Floor) 24/26 Campbell Street P.O. Box 2578, Lagos.

PRINCIPAL BANKERS:

EcoBank International Plc First City Monument Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc United Bank for Africa Plc Zenith Bank Plc

REGISTRARS AND TRANSFER OFFICE:

All Crown Registrars Limited 190 Ikorodu Road, Onipanu Bu Stop, Shomolu, Lagos, P.M.B 12884, Marina, Lagos Email: [email protected]

AUDIT: COMMITTEE

Mr. David Oguntoye Alhaji Kolawole Saka Mr. G.A.Omotayo Mr. Eric Maarten ’t Sas Elder Lady A.Shoewu, JP

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GREIF NIGERIA PLC NOTICE OF MEETING NOTICE IS HEREBY GIVEN that the 80th Annual General Meeting of the Company will be held at the Neni Hall, Rock view Hotel, Park Lane, Apapa, Lagos on 25th April, 2018 at 11:00 a.m. for the following purposes:1. To receive the financial statements for the year ended 31st October, 2017 and the reports of the Directors, Independent Auditors and Audit Committee thereon. 2. To elect & re-elect Directors Special notice has been received by the Company that it is intended to propose the following resolution as an ordinary resolution, namely: “That Mr. G. A. Omotayo be re-elected a Director of the Company pursuant to section 256 of the Companies and Allied Matters Act CAP C20 LFN 2004, notwithstanding that he attained the age of seventy (70) years on 22 nd November, 2016” 3. To approve the remuneration of the Directors for the year ended 31st October, 2017 4. To authorize the Directors to fix the remuneration of the Independent Auditors. 5. To appoint members of the Audit Committee. BY ORDER OF THE BOARD

LAGOS January 31, 2018

MARINA NOMINEES LIMITED Secretaries (FRC/2013/00000000001506)

NOTES: i. PROXIES A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote instead of him and such proxy need not be a member of the Company All instruments of proxy should be stamped and deposited at the office of the Registrar, All Crown Registrars Limited, 190 Ikorodu Road, Onipanu Bus Stop, Shomolu, Lagos, PMB 12884, Lagos not less than 48 hours before the time for holding the meeting. An unstamped form of proxy is attached. ii.

AUDIT COMMITTEE Any member may nominate a shareholder as a member of the Audit Committee by giving notice in writing of such nomination to the Company Secretaries at least 21 days before the Annual General Meeting

iii.

CLOSURE OF COMPANY REGISTER AND TRANSFER BOOKS The register of members and transfer books will be closed from Monday, 19th March to Wednesday, 21st March 2018 (both dates inclusive) for the purposes of preparing an update List of Shareholders.

iv.

RIGHTS OF SECURITIES’ HOLDERS TO ASK QUESTIONS Securities’ holders have a right to ask questions not only at the meeting, but also in writing prior to the meeting, and such questions must be submitted to the Company on or before 18th day of April 2018

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GREIF NIGERIA PLC RESULTS AT A GLANCE FOR THE PERIOD ENDED 31 OCTOBER 2017

31-Oct 2017 N’000

31-Oct 2016 N’000

Revenue

1,405,218

999,150

41%

Cost of Sales

1,149,882

832,998

-38%

77,554

37,597

106%

(28,130)

(10,491)

-168%

49,424

27,106

82%

Paid-up share capital - N'000

21,320

21,320

0%

Shareholders’ funds - N'000

361,424

337,584

7%

42,640

42,640

0%

Profit before taxation Tax Expense Total Comprehensive Income

% change incr/(decr)

At Year End

Total No. of Shares - '000 Per –Share data Earnings per share

116

Kobo

64

Kobo

82%

Net assets per share

848

Kobo

792

Kobo

7%

Dividend Proposed

0

Kobo

Kobo

-100%

4

60

GREIF NIGERIA PLC CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2017 Distinguished Shareholders, members of the Board of Directors, invited guests, ladies and gentlemen; I welcome you all to the 80th Annual General meeting of our Company. I hereby present to you the Annual Report and Accounts of Greif Nigeria Plc for the financial year ended October 31, 2017.

BUSINESS ENVIRONMENT Macroeconomic indicators from Bureau of Statistics in 2017 show that the country is now out of the devastating economic recession. Historically, the Real GDP growth rates decreased from 6.77% recorded in 4th quarter 2013, to 5.94% in 4th quarter 2014 and 2.11% in 4th quarter 2015. At the lowest point in the economic recession Real GDP recorded -2.24% in 3rd quarter 2016 but now stands at 1.4% in 3rd quarter 2017. The Inflation rate is at 15.37% as of December 2017, an improvement over 18.55% recorded same period last year. After dipping to significantly low levels in February/March 2017 especially in the parallel market to about N520/$, the exchange rate had since strengthened at about N363/$ in the parallel market. With increasing inflows from crude oil sales as a result of both increase in international prices and exported volumes, coupled with greater commitment in funding the foreign exchange market, the Central Bank of Nigeria had been able to deal effectively with forex speculations thereby stabilizing the market. The official rate, however, still stands at N305/$ It is noteworthy that Government achieved significant successes in the anti-corruption crusade and improved government fiscal discipline via the Treasury Single Account (TSA), while the government’s policy roadmap to economic recovery, the Economic Recovery and Growth Plan (ERGP) was credited as the tool out of the economic recession. The plan contained important reform goals, such as increased spending on infrastructure, privatisation of state-owned assets, improvement of revenue collection, achievement of food security, and acceleration of the environmental clean-up in the Niger Delta. It also provided clarity on fiscal and monetary policy and made it clear that government was interested in pursuing economic and fiscal diversification policies. In 2017 there were series of security concerns all over the country. In the northeast, the Boko haram terrorist group’s activities have been active through various devastating suicide bombings and urban guerilla warfare. Also various fatal communal clashes between the nomadic Fulani herdsmen and their host communities were recorded during the year. The general consensus is that for government to achieve the much needed Foreign Denominated Investments in the Nigerian economy these security concerns must be fully addressed.

OPERATING INDUSTRY In 2017 manufacturers and industries in the real sector in the country continued to face the harsh reality of the after effect of economic recession. Specifically for the Manufacturing sector of the economy, the real GDP showed a downward trend from 15.41% from 1st quarter 2014 to the lowest -7% in 1st quarter 2016 and is currently at -2.85 at 3rd quarter 2017. This shows that the manufacturing sector’s recovery lags much more behind the overall national real GDP% A mix of significant fall in aggregate demand and purchasing power, difficulty in accessing foreign exchange and delays in Form “M” approval, unfavorably high exchange rate, deliberate rampant misinterpretations of shipments/consignment values chargeable for relevant tariffs/duties, delays by relevant government inspection agencies and shipping companies at the port, lack of adequate supportive infrastructure, erratic power supply and multiple taxation/charges by state and local government authorities contributed to increased cost of ownership of consignments and high cost of doing business in the country. The real fact is that many manufacturing companies have either closed shop or are operating at significantly reduced operational capacities. Specifically for the Company in the steel drum business, the second half of 2017 witnessed pressure on pricing of steel worldwide due to both internal restructuring of the Chinese steel industry and a reduction of about 30% in her exports of steel because of increased local consumption and reduced capacities. The Chinese steel industry in the past 18-months witnessed major cuts in excess of 100-million tons due to the government’s

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GREIF NIGERIA PLC CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2017 restructuring. of its entire steel industry aimed at eradicating illegal plants producing steel products of inferior quality, closure of old plants and those not meeting new strict international standard on renewable energy. This coupled with the challenges in domestic economy already highlighted above, especially erratic foreign exchange rate made 2017 a very difficult year to navigate. We, however, navigated the difficult business terrain by recovering our costs through multiple price increases to our customer, pragmatic cost reduction initiatives and improved efficiencies. In addition, we retained business focus by strict adherence to the discipline of the Greif business system and customer service excellence, running a lean production system with increased emphasis on continuous line improvement and waste elimination OPERATING RESULTS The Company achieved a turnover of N1, 405.218million for the period under review, an increase of 41% over the prior year figure of N999.15million. Total comprehensive income increased by 82% to N49.424million in 2017 as against N27.106million in 2016 DIVIDEND Due to a need to optimize our manufacturing footprint in Nigeria, and the impact it will have on operating working capital in an inflationary economy, the Board is unable to recommend a dividend for approval at this Annual General Meeting BUSINESS OUTLOOK IN 2018 Nigeria's President Muhammadu Buhari presented the 2018 budget of 8.612 trillion naira, the country's biggest ever, to lawmakers, budget premised on a benchmark oil price of $45 per barrel and production of 2.3million barrels per day. The “Budget of Consolidation” was a nominal increase of 16 per cent above a budget of N7.44 trillion for the outgoing year 2017. The 2018 Budget was expected to consolidate on the achievements of previous budgets and deliver further on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020. The deficit is expected to be 2.005 trillion naira to be sourced via foreign loans (external sources) and domestic borrowing (internal sources). The President noted that in keeping with the government’s policy, 30.8 per cent or N2.652 trillion of aggregate expenditure had been allocated to the capital budget. The World Bank and IMF revised Nigeria’s estimated 2018 GDP growth rate to 2.5% if strict discipline alignment of fiscal, monetary, trade and industrial policies continued. With foreign currency reserve currently at US$40bln, the worldwide pricing of crude Oil recently reaching the US$70/barrel mark coupled with increased production capacities there is a major optimism that the government’s economic recovery efforts will be boosted. With decreasing inflation, more of the macroeconomic and socio-economic variables (like the security situation in the country) still have to significantly improve in order for the country to sustain a definite growth path in the years ahead. We still expect that the economic environment in 2018 will continue to be fluid and changing, though more certain and stable than 2017. Specifically for our business, we have started facing new entrants to the industry, tougher competition, pressures on reduction of product prices due to relative stability in the foreign exchange and increasing need to restructure our entire business in order to face the issues of 2018. We will have to be proactive and make clearcut choices about how to compete and be unique in the market place, make clear definition of strategy and the business model of our core operations in order to ensure income growth and profitability. Our worldwide vision is clear – “In industrial packaging, be the best performing, customer-service Company”. Greif Nigeria remains committed to maintaining our sharp focus on our core operations and identifying market opportunities that improve our business. In 2018, we will be laser focused on our strategic priorities: our people, our customers, transformational performance. Our strategic focus on Greif business system remains strong and we will continue to build on these capabilities and further tap into the Greif worldwide strategy to improve our efficiencies, drive out waste, maintain our lean manufacturing operations to remain competitive.

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GREIF NIGERIA PLC CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2017 BOARD OF DIRECTORS/STAFF MATTERS Our people are our greatest assets. The Company enjoyed stable and peaceful industrial relation atmosphere during the year under review. We celebrated another whole year without any accidents in all our plant sites in 2017. We maintained appropriate communication channels through which employees were periodically briefed on the activities of the company. During the year under review, relevant training and development programs were undertaken within available company resources. I wish to express deep appreciation to the entire workforce and the management team for their hard work, peaceful and mature disposition during a very difficult year. During the year, Mr. Louis Wentzel resigned from the Board after about 8-years as a Company Director. We thank him for his immense contributions over the years and wish him all the best in his future endeavors. I was appointed as a Director since the last Annual General Meeting to replace him, and in accordance with article 95 of the company’s article of association, being eligible offer myself for election at this Annual General Meeting CONCLUSION Finally my full appreciation goes to the board of directors, committed shareholders, our esteemed customers and other stakeholders for their continued support. It is my belief that together, we shall move the company to greater height even in these tough times. Distinguished ladies and gentlemen, I thank you for your attention.

Adedayo A. Olowoniyi Chairman FRC/2016/IODN/00000013954 January 31, 2018

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GREIF NIGERIA PLC CORPORATE GOVERNANCE FOR THE YEAR ENDED 31 OCTOBER 2017 Introduction Greif Nigeria Plc recognizes the importance of good corporate governance as a means of sustaining viability of the business in the long term, and further believes that the attainment of business objectives is directly aligned to good corporate behavior. In the conduct of its business, Greif Nigeria has sought to comply with all statutory requirements, adopted tried and proven best practices to protect the environment and its employees, invested in the community in which it operates, and strove to enhance shareholder value in the process. Greif Nigeria adopts both medium and long term growth strategies, and allocates resources in order to guarantee the creation of wealth. Greif Nigeria promotes and recognizes excellence through its employee development programmes. The Company has put in place systems of internal controls in order to safeguard the interests of shareholders and stakeholders and ensure the reliability of its records. As indicated in the notes to the financial statements, the business adopts standard accounting practices to facilitate transparency in the disclosure of information and to give assurance to the reliability of the financial statements. Legal Structure of Greif Nigeria Plc Greif Nigeria Plc ownership structure is as follows: Greif International Holding B.V. The Netherlands The Van Leer Nigerian Education Trust Other Nigerian Citizens & Associations

51% 23% 26%

Board of Directors The responsibility of good corporate governance is placed on the Board of Directors and the Management Team. The Board of Directors is highly qualified and experienced in their professional areas of expertise. As at October 31, 2017, the Board had one full time Executive Director - the Managing Director of the company. The Board also has three other members who are non-Executive Directors, one of whom is the Chairman of the Board and the Greif group Business Regional Manager for Sub Sahara Africa with oversight responsibility for Greif Nigeria management team. The Board meets regularly to deliberate on policy matters, corporate strategy and implementation, review Company performance, operations, finances and set standards for ethical conduct of the Company’s business, amongst other critical activities. The Board met three times during the year under review and the attendance is presented in the table below: Dates of Board Meeting No Names of Directors 15-02-2017 21-04-2017 22-09-2017 08-12-2017 . 1. Mr. Adedayo Olowoniyi – Chairman Not yet P P P Appointed 2. Mr. Louis Wentzel A P No longer A No longer A Director Director 3. Mr. Olukunle Obadina – Managing P P P P 4. Mr. Gaius A. Omotayo R R P R 5. Mr. Erik M t’ Sas P P P P P = Present; A = Absent; R = Represented

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GREIF NIGERIA PLC CORPORATE GOVERNANCE Cont’d FOR THE YEAR ENDED 31 OCTOBER 2017 The Audit Committee As at October 31, 2017, the Audit Committee consisted of five (5) members, two of whom are members of the Board of Directors and the other three members being independent shareholders. The Audit Committee is chaired by an independent shareholder member. The committee meets to review the adequacy of the internal and external audit plan, to receive and deliberate on the report of the external auditors, to review progress on recommendations made in both the internal and external audit reports, to review the adequacy of internal control systems and the degree of business compliance with laid down internal policies, laws, code of business principles and any other relevant regulatory framework. The Committee met three times during the year under review and the attendance is presented in the table below: No. 1. 2. 3. 4. 5.

Names of Audit Committee Members Mr. D.O. Oguntoye (Chairman ) Mr. G.A. Omotayo Alhaji K.A. Saka Mr. Erik M. ’t Sas Elder, Lady A.A. Shoewu, JP

Dates of Audit Committee Meeting 08-05-2017 22-06-2017 14-11-2017 P P P R R P P P P A A R P P P

P = Present; A = Absent; R = Represented The Management Team The Management Team consists of six full time managers of the Company which include the Managing Director and five heads of functions namely Finance, Marketing, Production, Maintenance, and Human Resources. The Management team meets regularly to review the performance of the company and assess progress against the achievement of laid down objectives. It also reviews programmes and strategies, and assigns responsibilities and resources for achievement of set goals. Consequently, the Management Team is charged with the responsibility of identifying and assessing the risk profile within which the company is operating, with a view to eliminating or minimizing the impact of such risks to the achievement of set company objectives. Code of Business Principles Greif has a documented code of business principles to guide all employees and business partners in the discharge of their duties all over the world, wherever Greif subsidiaries operate. Greif Nigeria as a member of the Greif Group of companies, subscribes to this code. The code sets the standard of professionalism and degree of integrity required for business operations. Among other things, the code covers the following areas: compliance with the law, conflicts of interest, public activities, environmental management, diversity in the workplace, accuracy and reliability of financial reporting, related and interested party transactions, etc. It also covers the procedure for handling breaches and instances of non-compliance. Trading in Security Policy The company has adopted a code of conduct regarding securities transactions by its directors and other interested parties in accordance with Nigerian Stock Exchange rules governing transactions with related parties or interested parties and Greif group code of conduct. Specific enquiry of all Directors has been made on compliance or otherwise with the listing rules and in the company’s code of conduct regarding securities transactions by the Directors. There was no known noncompliance by the Directors at the time of reporting Complaints Management Policy The Company has put in place a Complaints Management Policy to handle and resolve complaints from the Shareholders and Investors. The policy was defined and endorsed by the Company’s senior management who is also responsible for its implementation and for monitoring compliance. The policy shall be made available on the Company’s website and to shareholders of the Company at the Annual General Meeting.

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 OCTOBER 2017 The Directors hereby submit their report together with the audited financial statements for the year ended 31 October 2017. PRINCIPAL ACTIVITIES The principal activities of the Company during the year continued to be the manufacturing and marketing of metal drums. STATE OF AFFAIRS In the opinion of the Directors, the state of the Company's affairs is satisfactory and there has been no material change since the balance sheet date. RESULT FOR THE YEAR Revenue Profit for the year before taxation Taxation Total Comprehensive Income

2017 N’000

2016 N’000

1,405,218 ---------77,554 (28,130) -------49,424 ====

999,150 ---------37,597 (10,491) --------27,106 ====

DIVIDEND The Directors do not recommend a dividend for approval at the Annual General Meeting.

EVENTS AFTER REPORTING PERIOD There were no significant post balance sheet events, which have not been provided for in these financial statements. DIRECTORS The names of the Directors at the date of this report and of those who have held office during the year are as follows: Mr. Adedayo Abiodun Olowoniyi - Chairman Mr. Louis Wentzel -South African Mr. Olukunle A. Obadina -Managing Director Mr. Gaius A. Omotayo Mr. Erik t’Sas - Dutch

Appointed April 21, 2017 Resigned April 21, 2017

RETIREMENT OF DIRECTORS In accordance with article 95 of the Company’s Articles of Association, Mr. Gaius Omotayo retires by rotation at the Company’s Annual General Meeting and being eligible offers himself for re-election. Also in accordance with article 95 of the company’s article of association, Mr. Adedayo Olowoniyi, appointed a Director since the last Annual General Meeting, being eligible offers himself for election at this Annual General Meeting DIRECTORS’ INTERESTS IN CONTRACTS None of the Directors has notified the Company for the purpose of section 277 of the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria 2004, of their direct or indirect interest in contracts or proposed contracts with the Company during the year.

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS – Cont’d FOR THE YEAR ENDED 31 OCTOBER 2017 RECORD OF DIRECTORS’ ATTENDANCE AT BOARD MEETINGS In accordance with section 258 (2) of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004, the record of the Directors’ attendance at Director’s meetings during 2014/2015 is available for inspection at the Annual General Meeting. DIRECTORS’ SHAREHOLDINGS The Register of Directors’ interests in the share capital of the Company is available for inspection at the Annual General Meeting. The direct and indirect interest of Directors in the issued share capital of the Company as recorded in the Register of Directors’ Shareholdings and/or as notified by them for the purposes of sections 275 and 276 of Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria 2004, and the listing requirements of the Nigerian Stock Exchange are as follows:

Mr. G.A. Omotayo Mr. O.A. Obadina

Number of Shares as at October 31 October 31 2017 2016 115,133 115,133 72,333 72,333

SUBSTANTIAL INTEREST IN SHARES The shares of the Company are beneficially held as follows:

Greif International Holding B.V. The Netherlands The Van Leer Nigerian Education Trust Other Nigerian Citizens & Associations

Number of shares as at 31 October, % 31 October, 2017 2016 21,760,000 9,680,000 11,200,000 ------------42,640,000 ======

51 23 26 ---100 ===

21,760,000 9,680,000 11,200,000 -------------42,640,000 ======

% 51 23 26 ----100 ==

No individual shareholder other than Greif International Holdings B.V., and The Van Leer Nigerian Education Trust held more than 5% of the issued share capital of the Company as at 31st October 2017.

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS – Cont’d FOR THE YEAR ENDED 31 OCTOBER 2017 SHAREHOLDER INFORMATION Analysis of shareholding as at October 31, 2017 No. of Holder's Range Shareholders % 1 - 100 215 8.60% 101 - 1,000 1,410 56.42% 1,001 - 10,000 763 30.53% 10,001 - 100,000 101 4.04% 100,001 - 1,000,000 16 0.64% 1,000,001 - 99,999,999 3 0.12% Grand Total 2,508 100.36%

Holders Cum 215 1,625 2,388 2,489 2,505 2,508

Units

Units%

14,895 707,838 2,293,296 3,413,115 3,554,095 32,656,761 42,640,000

0.03% 1.66% 5.38% 8.00% 8.34% 76.59% 100.00%

Units Cum 14895 722,733 3,016,029 6,429,144 9,983,239 42,640,000

History of Share Capital DATE 21st August, 1970 24th November, 1970 28th September, 1972 29th September, 1976 8th October, 1976 30th November, 1977

№ of Shares 100,000 150,000 200,000 500,000 1,000,000 1,500,000

Authorised N 200,000 300,000 400,000 1,000,000 2,000,000 3,000,000

8th February, 1979

6,000,000

3,000,000

8th February, 1979

9,000,000

4,500,000

14,000,000 30,000,000 60,000,000

7,000,000 15,000,000 30,000,000

2nd December, 1980 31st July, 1990 7th July, 1992

Description N200,000 divided into 100,000 shares of N2.00 each N300,000 divided into 150,000 shares of N2.00 each N400,000 divided into 200,000 shares of N2.00 each N1,000,000 divided into 500,000 shares of N2.00 each N2,000,000 divided into 1,000,000 shares of N2.00 each N 3,000,000 divided into 1,500,000 shares of N2.00 each Each of Existing 1,500,000 shares of N 2.00 each in the capital of the Company was sub-divided into four ordinary shares of 50 kobo each. N 4,500,000 divided into 9,000,000 ordinary shares of 50 kobo each N 7,000,000 divided into 14,000,000 ordinary shares of 50 kobo each N 15,000,000 divided into 30,000,000 shares of 50 kobo each N 30,000,000 divided into 60,000,000 shares of 50 kobo each

As at 31st October, 2017 the called up and fully paid capital of the Company was N 21,320,000 divided into 42,640,000 shares of 50 kobo each SUPPLIERS The Company's significant overseas suppliers are ArcelorMittal International, EMEA, Greif Shanghai, China, Wuxi Jiushun Steel, China and Proseal India. DISTRIBUTORS The Company has no distributors. All products are sold and delivered by the Company directly to the consumers.

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS – Continued FOR THE YEAR ENDED 31 OCTOBER 2017 PROPERTY, PLANT AND EQUIPMENT Movements in Property, Plant and Equipment during the year are shown in Note 5 to the financial statements on page 43. In the opinion of the Directors, the market value of the Company's Property, Plant and Equipment is not lower than the value shown in the audited financial statements. CHARITABLE GIFTS AND DONATIONS The company made donations of N400,000 (2016: N200,000) as follows: 1. 2..

Associations So-Said Charity Home for the Safety of the Insane and Destitute Komforta Schools Total

October 31, 2017 200,000 200,000 400.000

October 31, 2016 200.000 0 200,000

EMPLOYMENT OF PHYSICALLY-CHALLENGED PERSONS The Company employed no physically-challenged person during the year. It is, however, the Company's policy to consider physically-challenged persons for employment if academically and medically qualified. HEALTH, SAFETY AND ENVIRONMENT Health, safety and environmental regulations are applied within the Company's premises and employees are aware of existing regulations. The Company provides subsidy to all categories of employees for medical, transport, housing, etc. EMPLOYEES' INTEREST AND TRAINING The Company is committed to keeping employees fully informed as far as possible, regarding the Company's performance and progress. The Company also seeks their views wherever practicable on matters, which particularly affect them as employees. Management, professional and technical expertise are the Company's major assets, and investment in developing such skills continues. The Company's expanding skill base has extended to a range of training provided and has broadened opportunities for career development within the organisation. Incentive schemes designed to meet the circumstances of each individual are implemented wherever appropriate and some of these schemes include bonus, promotion, wage increase, etc. AUDITORS Ernst & Young, having expressed their willingness, will continue in office as the Company’s auditors in accordance with section 357(2) of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004. A resolution will be proposed authorizing the Directors to fix their remuneration. BY ORDER OF THE BOARD

MARINA NOMINEES LIMITED FRC/2015/00000000001506 LAGOS, NIGERIA January 31, 2018

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GREIF NIGERIA PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS. FOR THE YEAR ENDED 31 OCTOBER 2017 The Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004, requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of financial affairs of the Company at the end of the year and of its profit or loss. The responsibilities include ensuring that the company: a)

keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Company and comply with the requirements of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004;

b)

establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and

c)

prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgments and estimates, and are consistently applied.

The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards issued by International Accounting Standards Board, Financial Reporting Council of Nigeria Act № 6, 2011 and the requirements of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004.. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its profit for the year ended 31 October 201. The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. To the best of our knowledge and ability we report no contravention or violation of any regulatory requirement(s) during the year. Nothing has come to the attention of the directors to indicate that the company will not remain a going concern for at least twelve months from the date of this statement. SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

O. A. OBADINA Managing Director FRC/2013/ICAN/00000004254 January 31, 2018

G. A. OMOTAYO Director FRC/2014/IODN/00000009253 January 31, 2018

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GREIF NIGERIA PLC REPORT OF THE AUDIT COMMITTEE TO THE MEMBERS OF GREIF NIGERIA PLC FOR THE YEAR ENDED 31 OCTOBER 2017 In accordance with the provision of Section 359(6) of the Companies and Allied Matters Act CAP C20 Laws of Federation of Nigeria 2004, members of the Audit Committee of Greif Nigera Plc report as follows:We have exercised our statutory functions under section 359(6) of the Companies and Allied Matter, Act CAP C20 Laws of the Federation of Nigeria 2004, and we acknowledge the co-operation of the management and staff in the conduct of these responsibilities. We confirm that: a) b) c) d) e)

The accounting and reporting policies of the Company are consistent with legal requirements and agreed ethical practices. The scope and planning of the external audit are in our opinion adequate The internal control system was in order The Independent Auditors’ Management Letter Comments were satisfactorily dealt with by management. We have reviewed the audited financial statements prior to the board’s approval

MEMBERS OF THE AUDIT COMMITTEE 1. 2. 3. 4. 5.

Mr. David O. Oguntoye, (Chairman) Mr. G.A.Omotayo Alhaji Kolawole Saka Mr. Erik t’Sas Elder Lady A.Shoewu, JP

-

Mr. David O. OGUNTOYE FRC/2013/ANAN/00000002787 Chairman, Audit Committee January 30, 2018

15

Shareholders Representative Non-Executive Director Shareholders Representative Non-Executive Director Shareholders Representative

16 16

17 17

18 18

GREIF NIGERIA PLC STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER 2017 Notes Assets

31-Oct-17

31-Oct-16

N'000

N'000

Non-Current Assets Property, plant & Equipment

5

123,957

156,018

Intangible Assets

6

9,031

0

Deferred taxation

14c

17,098

0

150,085

156,018

Total Non-Current Assets Current Assets Inventories

7

182,126

126,965

Trade & Other Receivables

8

236,670

251,477

Prepayments

9

48,124

115,241

Cash and cash equivalents

10

169,657

72,790

Total Current Assets

636,578

566,472

Total Assets

786,663

722,490

21,320

21,320

Retained earnings

340,104

316,264

Total Equity

361,424

337,584

0

3,683

0

3,683

Equity & Liabilities Equity

12

Non-Current Liabilities Deferred taxation

14c

Total Non-Current Liabilities Current Liabilities Trade & other payables

16

376,264

351,177

Income Tax Payable

14b

48,975

27,547

Provisions

22

0

2,500

Total Current Liabilities

425,239

381,223

Total Equity & Liabilities

786,663

722,490

_______________________ G. A. Omotayo Director

FRC/2014/IODN/00000009253

_____________________ O. A. Obadina Managing Director

FRC/2013/ICAN/00000004254

See notes to the financial statements 19

__________________ H. G. Omidiora Chief Finance Officer

FRC/2013/ICAN/00000004092

GREIF NIGERIA PLC STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 OCTOBER 2017 Note

31-Oct-17 N'000

Revenue Cost of Sales

17 18

Gross Profit

999,150

1,149,882

832,998

255,335

166,153

0

0

18

(5,067)

(7,262)

18

(174,105)

(127,916)

76,163

30,975

1,391

6,622

Operating Profit Finance Income Finance Charge

N'000

1,405,218

Other Operating Income Selling & Marketing Costs General and Administrative Expenses

31-Oct-16

20 20

0

0

77,554

37,597

(28,130)

(10,490)

49,424

27,106

Other Comprehensive income

0

0

Total comprehensive income

49,424

27,106

Equity Holders of the Company

49,424

27,106

Earnings per share

N

N

Profit before tax Tax Expense

14a

Profit for the year

Total comprehensive income attributable to:

Basic earnings per share Earnings from continuing operations Earnings from discontinued operations Total

24

116

64

0

0

116

64

116

64

0

0

116

64

Diluted earnings per share Earnings from continuing operations Earnings from discontinued operations Total

24

See notes to the financial statements

20

GREIF NIGERIA PLC STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 OCTOBER 2017 For the period ended 31 October 2017 Notes

Share Capital

Retained Earnings

Total Equity

N'000

N'000

N'000

21,320

316,264

337,584

Profit for period

0

49,424

49,424

Other adjustments to RE

0

0

0

21,320

365,688

387,008

0

(25,584)

(25,584)

21,320

340,104

361,424

Balance at 1 November 2016

Dividend Paid Balance at 31 October 2017

12

For the year ended 31 October 2016 Share Capital

Retained Earnings

Total Equity

N'000

N'000

N'000

21,320

314,742

336,062

Profit for period

0

27,106

27,106

Other comprehensive income

0

0

0

Balance at 1 November 2015

Dividend Paid Balance at 31 October 2016

12

21,320

341,848

363,168

0

(25,584)

(25,584)

21,320

316,264

337,584


21

GREIF NIGERIA PLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 2017 Note

31-Oct-17

31-Oct-16

N'000

N'000

OPERATING ACTIVITIES Cash receipts from customers Cash paid to suppliers and employees

1,487,140

834,495

(1,332,639)

(937,934)

154,501

(103,439)

Tax Paid

14b

(27,482)

(31,898)

Net cash provided by operating activities

11

127,019

(135,338)

Proceeds from sales of property and equipment Purchase of property, plant and equipment & Intangible assets 5

0

0

(5,959)

(25,535)

1,391

6,622

(4,568)

(18,913)

0

0

(25,584)

(25,584)

0

0

(25,584)

(25,584)

NET CHANGE IN CASH AND CASH EQUIVALENTS

96,867

(179,835)

Cash and cash equivalent at November 1,

72,789

252,623

169,657

72,789

INVESTING ACTIVITIES

Interest received

FINANCING ACTIVITIES Interest paid Dividend paid Loan Repayment

Cash and cash equivalent at October 31,

10


22

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2017 (1)

REPORTING ENTITY

GREIF Nigeria Plc (the "Company") is a manufacturing company incorporated as a limited liability company under the Company Ordinance (CAP 38) with the name Metal Containers of West Africa Limited on 20 January 1940. The name was subsequently , by a special resolution on 4 th July 1969, changed to Van Leer Containers (Nigeria) Limited. The Company became “Van Leer Containers (Nigeria) Plc” in line with the Companies and Allied Matters Act (CAP 20), Laws of the Federation of Nigeria 1990. The Company’s name was eventually changed to “Greif Nigeria Plc” by a special resolution on 12 th May 2004. The authorized share capital is allotted to Greif International Holdings B.V. Netherlands (51%), The Van Leer Nigerian Educational Trust (23%) and other Nigeri an investors (26%). The Company is primarily involved in the manufacturing and marketing of steel drums. These financial statements of the Company is as at and for the year ended 31 October 2017. (2)

BASIS OF PREPARATION

(2a) Statement of compliance These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Standards Board (IASB). The financial statements comprise the statement of financial position, statement of p rofit or loss and other comprehensive income, statement of changes in equity, statement of cash flows and the notes to the financial statements for the Company. These financial statements were authorised by the Board of Directors on 31-January 2018 and there were no events subsequent to the year end. (2b) Functional and presentation currency These financial statements are presented in Nigerian Naira, which is the Company’s functional currency. All amounts have been rounded to the nearest thousand, unle ss otherwise indicated

23

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT – Continued FOR THE YEAR ENDED 31 OCTOBER 2017

(2c) Basis of measurement The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date :. (i) Inventory – Weighted Average or lower of cost and net realizable value (ii) Financial Instruments –Initially measured at fair value and subsequently at amortized cost (iii) Provision – Best estimate to settle the present obligations at the end of reporting period. (iv) Held for sale and Disposal Group – Lower of carrying amount and fair value less cost to sell The accounting policies have been applied consistently throughout the period covered by the financial statements and comparative period. (2d) Use of judgements and estimates The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The se estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recogn ised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. (2e)

Current vs non-current classification

The Company presents assets and liabilities in statement of financia l position based on current/non-current classification. An asset is presented as current when it is: - Expected to be realised or intended to sold or consumed in normal operating cycle - Held primarily for the purpose of trading - Expected to be realised within twelve months after the reporting period, or - Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period All other assets are classified as non-current. A liability is presented as current when: - It is expected to be settled in normal operating cycle - It is held primarily for the purpose of trading - It is due to be settled within twelve months after the reporting period, or - There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

24


The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. 2f) Fair value measurement The Company does not measure any asset or liability at fair value , subsequent to initial recognition. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: - In the principal market for the asset or liability, or - In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Company. (3)

SIGNIFICANT ACCOUNTING POLICIES

(3a) Property, plant and equipment Items of property, plant and equipment are stated at cost less accumulated depreciation (se e below) and impairment losses. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Company recognises such parts as individual assets with specific useful lives and depreciates them accordingly. The cost of self-constructed assets includes the cost of materials, direct labour and an appropriate proportion of directly attributable production overheads. Where significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment in line with IAS 16 principle of componentization.

3a.i

Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recogn ised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecogn ised. The costs of the day-to-day servicing of property, plant and equipment are recogn ised in profit or loss as incurred.

25


3a.ii

Depreciation Depreciation is charged to the profit or loss (except where it is required for recognition in another asset, based on another IFRS Standard e.g. IAS 2) on a straight-line basis over the estimated useful lives of each significant part of an item of property, plant and equipment. Depreciation on leased assets is charged over the shorter of the lease term and their useful life. Freehold land is not depreciated whilst leasehold land is depreciated over the lease period in the certificate of occupancy, usually 99years. The useful lives of the property, Plant and Equipment are as follows:

ASSET CLASS

USEFUL LIVES

• Leasehold land -

62.5-Years.

• Building -

20 – 30-Years

• Equipment, Plant and Machinery -

5 – 15-Years

• Motor vehicles -

3 – 5-Years

The residual values, useful lives and depreciation methods are reassessed annually and if expectations differ from earlier projections, the change is treated as a change in estimate in accordance with IAS 8. Assets under construction are not depreciated until they are ready for use. 3a.iii Derecognition An item of property, plant and equipment is derecogn ised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in statement of profit or loss in the year the asset is de-recognised 3b. Intangible assets 3b.i

Software Software acquired by the Company is stated at cost less accumulated amortization (see below) and impairment losses. Expenditure on internally generated goodwill and brands is recogn ised in the Statement of profit or loss as an expense as incurred.

3b.ii Subsequent expenditure Subsequent expenditure on capitalized intangible assets (Software) is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed a s incurred.

26


3b.iii Amortization Amortization is charged to the profit or loss on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Software assets are amortized from the date they are available fo r use and over the license period. . Classes of intangible assets

Useful lives

IT Software

3 years

3c.

Financial assets

3c.i

Initial recognition and measurement Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

3c.ii Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows. Financial assets within the Company include trade and other receivables and cash and short-term deposits.

3c.iii Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment losses. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in profit or loss. The company's financial assets that qualify as loans and receivables include trade receivables; amount due from related parties and employee loans and advances.

3c.iv Trade and other receivables Trade and other receivables include trade receivables which are on trade terms and receivables from affiliated companies. These are carried at original invoice amount less any impairment losses. When a receivable is determined to be uncollectable, it is 27


written off, firstly against any provision available and then to profit or loss. Subsequent recoveries of amounts previously provided for are recognised as other income and credited to profit or loss.

3c.v

Derecognition A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when: - The rights to receive cash flows from the asset have expired - The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through 'arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Company’s continuing invol vement in it. In such case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

3c.vi Impairment of financial assets The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the receivables or a group of receivables is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

3c.vii Financial assets carried at amortised cost The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The 28


present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.

3d

Financial liabilities Financial liabilities are classified, at initial recogniti on, as loans and borrowings or payables, as appropriate. These financial liabilities are recognised initially at fair value, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other payables, bank overdr afts and other loans and borrowings.

3d.i

Trade and other payables

Trade and other payables are obligations to pay for goods and services that have been acquired in the normal course of business. These amounts are classified as current because payment is expected in one year or less. Trade and other payables are initially recogn ised at fair value i.e. transaction cost less all discounts. Subsequent to initial recognition, they are measured at amortised cost using effective rate of interest. Normally they are due for payment within 12-months from the reporting year end. In the event of a longer payment i.e. greater than 12 months such balances are discounted using the effective interest rate.

3d.ii Bank overdrafts

Bank overdrafts are initially recognised at fair value which is the proceeds received, net of directly attributable costs. These are subsequently measured at amortised cost using the effective interest rate method with finance costs being recognised in profit or loss and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Bank overdrafts are classified as interest-bearing loans and borrowings under current liabilities.

3d.iii Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in profit or loss.

3d.iv Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, o r the terms of an existing liability are substantially modified, such an exchange or modification is

29


treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognise d in profit or loss.

3d.v Offsetting of financial instruments

Financial assets and financial liabilities are offset with the net amount reported in the statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and the intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

3e. Inventories Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs to completion and of selling expenses. The cost of inventories is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. The Company’s finished goods inventories cost includes an appropriate share of overheads based on normal operating capacity which were incurred in bringing the inventories to their present location and condition. Costs incurred in bringing each product to its present location and conditions are accounted for as follows: Raw materials: Purchase cost and weighted average cost basis Materials Work-in-progress: On weighted average cost basis Finished goods: Cost of direct materials, conversion costs and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. 3f. Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank over drafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the Cash Flow Statement. Greif Plc has chosen the policy of recognizing all interest received and dividend received under the ‘cash flow from investing activities’ in the statement of cash flows. In a similar vein, interest paid and dividend paid shall be shown under ‘cash flow from financing activities’. 3g.

Impairment of non-financial assets

3g.i

Impairment review 30


The carrying amounts of the Company's assets, other than inve ntories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, t he asset's recoverable amount is estimated. An impairment loss is recogn ised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recogn ised in the profit or loss. The company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses recogn ised in respect of cash-generating units are allocated to reduce the carrying amount of the assets in the cash generating unit (since goodwill arises only on consolidation and the Company does not have any subsidiary or associate) in the unit on a pro rata basis. A cash-generating unit is the group of assets identified that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of assets or cash-generating units is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

3g.ii

financial assets (including receivables) A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is i mpaired. A

31


financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be est imated reliably. Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indic ations that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence o f impairment. An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective i nterest rate. Losses are recogn ised in profit or loss. Interest on the impaired asset continues to be recogn ised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment los s is reversed through profit or loss. 3g.iii Conditions for reversals of impairments An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recogn ised..

3h. Foreign currency transactions Transactions in foreign currency are recorded initially in Nigerian Naira which is the functional and presentation currency at the rate of exchange ruling at the date of the transaction. At each subsequent annual reporting date :  Foreign currency monetary amounts are reported using the closing rate  Non-monetary items carried at historical cost are reported using the exchange rate at the date of the transaction  Non-monetary items carried at fair value are reported at the rate that existed when the fair values were determined Exchange differences arising when monetary items are settled or when monetary items are translated at rates different from those at which they were translated when initially recognised or in previous financial statements are reported in profit or loss in the period 3i.

Share capital

32


3i.i Share capital Share capital is classified as equity if it is non-redeemable and any dividends are discretionary, or is redeemable but only at the Company's option. Dividends on share capital classified as equity are recogn ised as distributions within equity. Nonequity share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders or if dividend payments are not discretionary. Dividends thereon are recogn ised in the Statement of profit or loss as a finance charge. 3i.ii Dividends Dividends on non-equity shares are recogn ised as a liability and accounted for on an accruals basis. Equity dividends are recogn ised as a liability in the period in which they are declared (appropriately author ised and not at the discretion of the Company).

3j.

Pension schemes

The Company operates a defined contributory staff pension scheme in accordance with the provisions of the Pension Reforms Act 2014. The Company and each employee contribute 10% and 8% of annual emoluments (Basic, Housing and Transport) respectively. Staff contribution to the scheme is funded through the payroll deductions while the Company’s contributions are charged to the Statement of profit or loss. Obligations for contributions to defined contribution pension plans are recogn ised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Prepaid contributions are recogn ised as an asset to the extent that a cash refund or a reduction in future payments is available. Also the Company operates a defined end of service savings scheme wherein certain amounts are set aside monthly, charged to the Statement of profit or loss and remitted to a fund manager to provide for lump sum payment to employee after the period of service. Only the amounts accrued and not yet transferred to the fund manager are recognised as liability at the end of every reporting period. Based on the terms of the scheme, the Company does not have any further obligation whatsoever after the monthly remittance. This scheme meets all the characteristics of defined contribution plan of IAS 19 – Employee Benefits 3k. Termination benefits Termination benefits are recogn ised as an expense when the Company is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termina tion benefits for voluntary redundancies are recogn ised as an expense if the Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 33


months after the reporting period, then they are discounted to their present value. 3l. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recogn ised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. 3m. Provisions A provision is recogn ised in the Statement of Financial Position when the Company has a present legal or constructive obligation as a result of a past event, it can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for. 3n. Revenue – Sales of goods Revenue in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when evidence exists in the form of delivery of, and delivery acknowledgment of goods to clients, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised. 3o. Income tax Income tax on the profit or loss for the year comprises current and deferred taxation. Income tax is recognised in the of profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable/(recoverable) on the taxable income/(loss) for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable/(receivable) in respect of previous years. Current tax includes income tax, education tax etc. 34


Deferred taxation is provided using the liability method, providing for temporary

differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: The amount of deferred taxation provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates that are expected to apply when the temporary difference reverses, based on rates that have been enacted or substantively enacted at the reporting date. Deferred tax is not recognized from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred taxation asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred taxation assets are reduced to the extent that it is no longer probable that the related tax benef it will be realized. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend. 3p. Segment reporting The Company has determined that, in accordance with IFRS 8 "Operating Segments" and based on its internal reporting framework and management structure, it is a single product entity with one reportable segment. Such determination is necessarily judgmental in its nature and has been determined by management in preparing the Financial Statements. However, the following entity wide disclosure are relevant: -

The Company manufactures and markets steel drums packaging products from three locations in Nigeria with revenue concentration from customers within Nigeria only at 54% for Apapa, Lagos State, (2016: 59%), 25% for Koko, Delta State, (2016: 21%) and 21% for Kaduna, Kaduna State, (2016:21%)

-

Approximately 98% (2016: 98%) of the Company’s revenue is attributable to sales transactions to the Oil and Gas sector of the Nigerian economy.

-

A particular customer accounted for about 42% of the Company’s sales on the average (2016: 42%).

-

More than 98% of GREIF Plc’s customers have been transacting with the company for over 10years 3q. Earnings per share The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held if any. The Company does not 35


have any potential ordinary shares with dilutive effect at the reporting date. 3r.

Standards issued but not yet effective

A number of new Standards and amendments to Standards are effective for an nual period beginning after the reporting period and earlier application is permitted; however, the Company has not early applied the following new or amended Standards in preparing these financial statements. New or amended Standards IFRS 9 Financial Instruments

IFRS 15 Revenue from Contracts with Customers

Agriculture: Bearer Plants (Amendments

Summary of the requirements

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and de-recognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on after 1 January 2018, with early adoption permitted. IFRS 15 establishes a comprehensive framework for determining how much and when revenue is recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreement for the construction of real estate and IFRIC 18 Transfer of assets from customers, SIC 31 Revenue – Barter transactions involving advertising services. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. These amendments require a bearer plant, defined as a living plant, to be accounted for as property, plant and equipment and included in

36

Possible impact on the financial statements The Company is currently assessing the potential impact on its financial statements resulting from the application of IFRS 9

The Company is assessing the potential impact on its financial statements resulting from application of IFRS 15

None. The Company does not have any bearer


to IAS 16 and IAS 41)

IFRS 16 LEASES

IAS 12 amendments

the scope of IAS 16 Property, Plant and Equipment, instead of IAS 41 Agriculture. The amendment are effective for annual reporting periods beginning on or after 1 January 2016, with early adoption permitted This standard sets out the principles for the recognition, measurement, presentation and disclosure of leases. The objective is to ensure that the lessees and lessors provide relevant information in a manner that faithfully represents those transactions. The amendments require that the changes in the opening equity of the earliest comparative period may be recognized in opening retained earnings( or in another component of equity, as appropriate) without allocating the change between opening retained earnings and other components of equity. The amendments are effective for annual reporting periods beginning on or after 1 January 2017 with early adoption permitted.

plants.

None The company did not have any lease currently running

The Company is assessing the potential impact on its financial statements resulting from application of amended IAS 12

The following new or amended Standards are not expected to have any impact or any significant impact on the Company’s financial statements. - IFRS 15 Regulatory Deferral Accounts - Accounting for Acquisition of Interest in Joint Operation (Amendments to IFRS 11). - Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS 16 and IAS 38). - Equity Method in Separate Financial Statements (Amendments to IAS 27). - Sale or Contribution of Assets between an Investor and its Ass ociate or Joint Venture (Amendments to IFRS 10 and IAS 28). - Annual Improvements to IFRSs 2012 – 2014 Cycle – various standards. - Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28). - Disclosure Initiative (Amendments to IAS 1). 3s. Significant accounting judgments, estimates and assumptions

37


The preparation of the financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

3t. Judgments In the process of applying the Company’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements:

3t-i Operating lease commitments – Company as lessee The Company has entered into leases on land. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life, that it does not retain all the significant risks and rewards of ownership and accounts for the contracts as operating leases.

3t-ii

Estimates and assumptions Going concern: The Company’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon the Company’s ability to continue as a going concern. Therefore, the financial statements continue to be prepared on the going concern basis.

3t-iii

Impairment of non-financial assets Impairment exists when the carrying amount of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth 38


rate used for extrapolation purposes.

3t-iv Property, plant and equipment The company carries its property, plant and equipment at cost in the Statement of financial position. Estimates and assumptions made to determine their carrying value and related depreciation are critical to the company’s financial position and performance. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of the assets are determined by management at the time the asset is acquired and reviewed periodically. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. The carrying amount of the property, plant and equipment at the reporting date is disclosed in Note 5.

3t-v Taxes Uncertainties exist with respect to the interpretation of tax regulations and the amount and timing of future taxable income. Differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities in the country. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing (note 13) and the level of future taxable profits together with future tax planning strategies.

3s-vi Fair value of financial instruments Where the fair values of financial instruments recorded on the Statement of Financial Position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flow mod el. The inputs to these models are derived from observable market data where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of model inputs regarding forward prices, credit risk and volatility that are not supported by observable market

39


data. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

4

FINANCIAL RISK MANAGEMENT

4a Overview The company has exposure to the following risk from its use of financial instruments:  Credit risk  Liquidity risk  Market risk This note presents information about the GREIF Plc’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring an d managing risk. Further quantitative disclosures are included throughout these financial statements. 4b Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of Greif Nigeria Plc’s risk management framework. Executive Management is responsible for developing and monitoring Greif Nigeria Plc’s risk management policies and reporting regularly to the Board of Directors on its activities. The Company’s risk management policies are established to ide ntify and analyze the risks faced by the business, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in the business environment. The Company, through management standards, procedures and training, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors complian ce with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the business. The Audit Committee is assisted in its oversight role by the Management. Management undertakes both regular and ad-hoc review of risk management controls and procedures, the results of which are reported to the Audit Committee of the Board of Directors and possible escalation to the Group designated officer in South Africa. 4c Credit risk Credit risk is the risk of financial loss to GREIF Plc if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the GREIF Plc’s receivables from customers. 4c.i Trade and other receivables The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, Management considers the profile of individual customer, including the default risk of the industry and the specific antecedents of the customer and Management’s intrinsic knowledge of the customer.

40


During the year ended 31 October 2017, approximately 98% (corresponding period 31 October 2016: 98%) of GREIF Plc’s revenue is attributable to sales transactions to the oil and gas sector of the Nigerian economy. Additionally, a particular customer accounted for about 42% of the Company’s sales on the average (October 2016 comparative 42%). The Company has established a credit policy under which each new customer is analyzed individually for credit worthiness before the Company’s standard payment and delivery terms and conditions are offered. Management review includes external ratings, when available, and in some cases bank references. Credit purchase limits are established for each customer, which represents the maximum open amount without requiring approval from the Board of Directors; these limits are reviewed annually. Customers that fail to meet the Company’s benchmark credit worthiness may transact business on a cash-on-delivery basis.

More than 98% of GREIF Plc’s customers have been transacting with the company for over 10years, and no impairment loss has been recognised against these customers. In monitoring customer credit risk, customers are grouped according to their cre dit characteristics. Trade receivables relate mainly to the Company’s end-user customers. The Company provides for doubtful debts, calculated at 30% of the amounts between 90days and 180days, and 100% of amounts over 180days in the age analysis, excluding related party balances. In addition, Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The schedule below shows the schedule of trade and other receivables at the end of the tagged reporting periods. 31-Oct-17 N'000 138,333 (994) 137,339

Trade Receivables - Local Allowance for Bad and Doubtful Debt

31-Oct-16 N'000 165,675 165,675

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data. The maximum exposure to credit risk for the components of the statement of financial position at 31 October 2017, and 31 October 2016 is the carrying amounts as disclosed in note.

4c.ii An analysis of Trade Receivable is as follows: Total Trade Receivable 31-Oct-17 31-Oct-16

N'000 137,339 165,675

Not past due Past due but not impaired Not Impaired 61-90days 91-180days N'000 N'000 N'000 136,288 49 1,003 164,486 683 506

41


Movement in impairment of trade receivables is as detailed below: 31-Oct-17 31-Oct-16 N'000 N'000 At Start of period 20,089 Trade receivable impairment 994 Recovered during the year Written off as uncollectible during year (20,089) 994 4d Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as practicable, that it would always have sufficient liquidity to meet its maturing obligations when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. Excessive risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly. 4d.i Maturity schedule for Financial Liabilities The following are the contractual maturities of financial liabilities: 31-Oct-17 Financial Liabilities Trade Payables – Local Trade Payables – Greif SA Due to Greif USA Due to Greif Netherlands Accrued Professional Fees ESB Staff Savings Scheme Accrued Payroll Benefits Other Accruals

Due Within One Year

Due After One Year

Total

N'000 14,410 321,496 7,857 6,659 2,421 793 1,024

N'000 -

N'000 14,410 321,496 7,857 6,659 2,421 793 1,024

354,661

-

354,661

42


31-Oct-16 Financial Liabilities Trade Payables – Local Trade Payables – Greif SA Due to Greif USA Due to Greif Netherlands Accrued Professional Fees ESB Staff Savings Scheme Accrued Payroll Benefits Other Accruals

Due Within One Year

Due After One Year

Total

N'000 23,721 275,543 5,501 12,077 11,131 3,456 679 845

N'000 -

N'000 23,721 275,543 5,501 12,077 11,131 3,456 679 845

332,952

-

332,952

The carrying amounts of trade and other payables for period ended October 31, 2017 and 2016 respectively approximate to their true fair values. The Company uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimizing its cash profit. Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period for at least 30days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. 4e Market risk Market risk is the risk that changes in market prices, such as foreign exchange interest rates and equity prices will affect the Company’ income or the value holdings of financial instruments. The objective of market risk management manage and control market risk exposures within acceptable parameters, optimizing the return.

rates, of its is to while

4f Currency risk The Company is exposed to currency risk on purchases of raw materials that are denominated in United States Dollars, or a currency other than the functional currency of the Company. Confirmed letters of credit are opened for such offshore purchases and official bids for Dollars are made at the Central Bank of Nigeria official rates. Besides, the company is exposed to foreign exchange volatility on account of the group loan. Such foreign currency denominated loans are revalued at the rate of exchange ruling at the end of every reporting period, with exchange gains or/and losses recognised in the income statement. Below is the effect on profit & Equity of a +/-5% change in exchange rate: 43


Sensitivity Analysis Description

Due to GSA Due to Greif International Due to Greif USA Dollar Denominated Bank Balance Due from GSA Net Foreign Balances Closing rate at period-end Naira Equivalent of Net Foreign Balances 5% Change in Closing rate Naira Equivalent of change on Closing rate Net Effect of Change in Naira Net Profit for year Net Effect as % of Profit

A B C=AxB D F=AxD G=F-C H I=G/H%

US$ US$ US$ US$ US$ US$ N/$ Naira N/$ Naira +/Naira %+/-

31-Oct-17 '000 (898) (22) 98 (822) 358 (294,407) 376 (309,127) (14,720) 49,424 29.78%

31-Oct-16 '000 (903) (18) 9 (912) 305 (278,025) 320 (291,926) (13,901) 27,106 51.28%

4g Interest rate and Equity price risk The company is not exposed to interest rate risk and equity price risk at the end of 3 1 October 2017.

5. PROPERTY, PLANT AND EQUIPMENT – ACQUISITION, DISPOSAL, DEPRECIATION AND IMPAIRMENT

PROPERTY, PLANT AND EQUIPMENT Leasehold Land & Building Plant, Machinery & Equipment Motor Vehicles Capital Work-in-progress Total

31-Oct-17 Accumulated Depreciation & Carrying Cost Impairment Value N'000 N'000 N'000 50,557 17,387 33,170 243,102 14,831 5,959 314,449

160,869 12,236 0 190,492

44

31-Oct-16 Accumulated Depreciation & Cost Impairment N'000 N'000 50,557 15,843

82,233 231,572 2,595 14,831 5,959 31,263 123,957 328,222

145,424 10,939 172,205

Carrying Value N'000 34,714 86,149 3,892 31,263 156,018


Reconciliation of property, plant and equipment: 31-Oct-2017 Reconciliation of property, plant and equipment - 31-Oct-2017

Opening Balance

Additions

Disposal Cost

Transfers

Depreciation

N'000

N'000

N'000

N'000

N'000

Leasehold Land & Building

34,714

0

0

0

(1,544)

Plant, Machinery & Equipment

86,149

0

(527)

12,057

3,892

0

0

31,263

5,959

156,018

5,959

Motor Vehicles Capital Work-in-progress Total

Disposal Depreciation

Impairment Loss

Total

N'000

N'000

0

0

33,170

(15,973)

527

0

82,233

0

(1,297)

0

0

2,595

0

(25,535)

0

0

(5,728)

5,959

(527)

(13,478)

(18,814)

527

(5,728)

123,957

Depreciation

Disposal Depreciation

Impairment Loss

N'000

N'000

N'000

Reconciliation of property, plant and equipment - 31-Oct-2016 Reconciliation of property, plant and equipment - 31-Oct-2016

Opening Balance

Additions

N'000 Leasehold Land & Building Plant, Machinery & Equipment Motor Vehicles Capital Work-in-progress Total

Disposal Cost

Transfers

N'000

N'000

N'000

36,047

-

-

-

(1,332)

-

-

34,714

101,468

-

-

-

(15,319)

-

-

86,149

5,189

-

-

-

(1,297)

-

-

3,892

-

-

-

31,263

-

-

156,018

5,728

25,535

-

-

148,432

25,535

-

-

(17,949)

During the period ended 31 October 2017, the Company acquired assets with a cost, excluding capitalized borrowing costs, of N5.959million (31 October 2016: N25.535million). During the period the Company disposed of items of property, plant and equipment with a carrying cost of N0.527Million ( 31 October 2016: Ni l). Any profit or loss as a result of disposal is recognized in the statement of profit or loss and other comprehensive income at the year end. Impairment loss on items of Property, plant and equipment during the period amounted N5.728million for the year ended 31 October 2017. 6.

Total

INTANGIBLE ASSETS

Greif Plc has Intangible Assets representing software with which the company processes its financial and operational transactions. The cost of Additional ERP Software capitalized during the year was N13.478million as against nil same period last year. 31-Oct-17 31-Oct-16 Software Software N'000 N'000 Cost at period opening – 1 November 4,837 4,837 Additions 13,479 Cost at Period end – 31 October 18,316 4,837 Acc. Amortisation at period opening – 1 November (4,837) (4,837) Amortised During Year (4,448) Acc Amortisation at period end – 31 October (9,285) (4,837) Carrying Amount – 31 October 9,031 -

45

N'000


7. INVENTORIES

31-Oct-17

Raw Materials (Note 7a) Work-in-Progress Finished Goods Goods-in-Transit

31-Oct-16

N'000

N'000

129,908

81,714

10,562

15,788

36,211

6,803

5,445 182,126

22,660 126,965

The cost of inventories recognized as expense and included in cost of sales at 31-October-2017 amounted to: N953.173million (31-October-2016: N672,574million). Inventory carried at Net Realisable Value as at balance sheet date amounted was nil. 7a Raw Materials Raw Materials Allow For slow moving materials

31-Oct-17

31-Oct-16

N'000 129,908 129,908

N'000 81,714 81,714

During the period ended 31 October 2017 there was no additional allowance for slow moving materials. 8 TRADES AND OTHER RECEIVABLES

Trade receivables VAT Recoverable Sundry Receivables Insurance claim Receivable from related parties (Note 13a.i)

31-Oct-17

31-Oct-16

N'000 137,339 92,957 6,374 236,670

N'000 165,675 80,790 5,012 251,477

Trade receivables are non-interest bearing and are generally on a term of 30 to 90 days. VAT recoverable consists of amounts recoverable from FIRS in respect of 5% VAT deducted at source from our invoices and paid over to FIRS by our customers in the Oil marketing industry. Other classes within other receivables do not contain any impaired assets. The receivable from related parties represents balance due from Greif South Africa relates to traveling expenses recoverable from Greif South Africa in respect of KDD maintenance visits by Greif Nigeria Maintenance Manager. No receivable is pledged as security for borrowings 8b. Impairment - Individually impaired During the year trade receivables with an initial carrying value of N993,621 were impaired and fully provided for as at 31 October 2017. See below for the movements in the allowance for impairment of receivables:

46


31-Oct-17 N'000 994 994

At Start of period Trade receivable impairment Recovered during the year Written off as uncollectible during year

31-Oct-16 N'000 20,089 (20,089) -

Age analysis of trade receivables are as follows: Total

Not past due Not Impaired

Trade Receivable

Past due but not impaired 61-90days 91-180days

N'000

N'000

N'000

N'000

31-Oct-17

137,339

136,288

49

1,003

31-Oct-16

165,675

164,486

683

506

9. PREPAYMENT

31-Oct-17 N'000

31-Oct-16 N'000

39,603 771 7,751 48,125

109,264 1,257 4,720 115,241

Advance to suppliers Employees advances Prepaid Expenses (current)

Prepayment consists of amounts in respect of advance payment for imports on confirmed letters of credit, to local suppliers, prepaid employee payroll and other operational prepayments 10. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash balances and call deposits. The schedules below show the balances at the current period (and at the comparative period) 31-Oct-17 31-Oct-16 N'000 N'000 Cash in hand 1,007 504 Bank Balances 157,989 62,396 Short Term Bank Deposit 10,661 9,889 169,657

72,790

Cash at banks earns interest based on daily bank deposit rates determined by the banks. These deposits have an average maturity of between 60-90 days. For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows is same as in the statement of financial position.

47


11. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES 31-Oct-17 31-Oct-16 N'000 N'000 Profit /(Loss) after tax 49,424 16,516 Adjustment to reconcile net income to net cash provided: Depreciation of PPE 18,814 17,949 Amortisation of Intangibles 4,448 Impairment of Assets 5,728 Loss on disposal of assets Interest received (1,391) (6,622) Allowance for slow moving inventory Allowance for doubtful debts Changes in Assets & Liabilities: Increase in Inventories Increase in Receivables & Prepayment Increase in Payables & Accruals Decrease in Taxation Decrease in Deferred taxation Decrease in Provisions

77,023

38,433

(55,162) 81,924 25,088 21,428 (20,781)

(14,370) (164,655) 31,163 (4,352) (17,056)

(2,500)

(4,500)

127,020

(135,337)

12. SHARE CAPITAL AND RESERVES No issue of additional shares was made during the period ended 31 October 2017 (no similar issue was made during the period ended 31 October 2016). Details of equity at the reporting date are as follows: 12a. Share Capital 31-Oct-17 31-Oct-16 Authorised: N'000 N'000 60,000,000 ordinary shares of 50kobo each 30,000 30,000 Called up and fully paid: N'000 N'000 42,640,000 ordinary shares of 50kobo each 21,320 21,320 12a.i Dividend 31-Oct-17 31-Oct-16 N'000 N'000 Proposed dividend for 2017: Nil per share (2016: 60k per share) 25,584 ===== ===== The directors do not recommend the payment of a dividend for the period ended 31 October 2017

48


12b. Reserve

Opening balance Profit for the period Dividend paid

31-Oct-17 N'000

31-Oct-16 N'000

316,264 49,424 (25,584) 340,104

314,742 27,106 (25,584) 316,264

All other net gains and losses on transactions with owners not recognized elsewhere 13 RELATED PARTIES’ DISCLOSURES 13a. Related Party Transactions with the Greif Group The shares of the Company are beneficially held as follows: Description Shareholdings (%) Greif International Holding B.V. The Netherlands 51 The Van Leer Nigerian Education Trust 23 Other Nigerian Citizens & 26

Unit in shares 21,760,000 15,160,040 1,066,247

The Company enters into transactions with related parties and sister Companies within the Greif group in the course of its business. These transactions include, but are not limited to, technical advises, investment advisory services, IT related support, logistics support, personnel support and the purchase of certain production materials and spares. Amounts owed to and due from related parties are transaction based. No allowances for doubtful debts has been made against amounts outstanding and no expenses have been recognised during the year in respect of bad or doubtful debts due from related parties. The Company currently has no technical or management services agreement with Greif group in place. Summary of Related Party Transactions with the Greif Group:

Years Greif International Holding B.V. the Netherlands Greif South Africa Greif International USA

2016 2015 2016 2015 2016 2015

Sales to related parties

Purchases from related parties

Amount of intercompany loans

Amounts owed by related parties

Amounts owed to related parties

N'000 -

N'000 -

N'000 -

N'000 -

N'000 12,077 321,496 275,543 7,857 5,501

49


13a.i Due from Greif South Africa 31-Oct-17 31-Oct-16 N'000 N'000 Due From Greif South Africa The amount relates to recoverable traveling expenses in respect of Knocked Down Drums (KDD) factory maintenance visits by Greif Nigeria on behalf of Greif South Africa . 13a.ii Due to Greif South Africa

31-Oct-17 N'000 321,496

Due To Greif South Africa (Note 16)

31-Oct-16 N'000 275,543

The company has an intercompany trade payable balance of US$897,833 (2016: US$902,681) due to its sister company, Greif South Africa. As at reporting date, there is uncertainty as to the timing and repayment of the balance. Movement in the balance has been basically due to Knocked Down Drums (KDD) service billings, payment on account, write-off and/or fluctuations in closing exchange rate.

13a.iii Due to Greif International Holding Due To Greif International Holding B.V. the Netherlands (Note 16)

31-Oct-17 N'000

31-Oct-16 N'000

-

12,077

Greif International Holding B.V. the Netherlands holds approximately 51% shares of the Greif Nigeria Plc. There was no unpaid net dividend outstanding as at yearend.

13a.iv Due to Greif International USA

Due To Greif International USA (Note 16)

31-Oct-17 N'000 7,857

31-Oct-16 N'000 5,501

The above represents quarterly IT-related costs billed against the Company still outstanding as at period-ended 31-October 2017. This liability has been reflected in the profit and loss and other comprehensive income statement while the invoiced amount which still remained unpaid as at 31-October-2017 is reflected in other payables

50


13b Related Party Transactions - Key Management Personnel Compensation (13b.i) Key management compensation – Staff

31-Oct-17 31-Oct-16 N'000 N'000 Salaries and other short-term employment benefits 15,166 13,826 Management Incentive Program 932 756 Pension Costs - Defined Contribution Scheme 1,264 1,157 End Of Service Savings Scheme - Defined Contribution 1,347 1,052 18,708 16,791 Short term employee benefit 16,098 14,582 Post-employment benefit 2,610 2,209 18,708 16,791 (13b.ii) Key management compensation - Audit Committee shareholders representative 31-Oct-17 31-Oct-16 N'000 N'000 Sitting Allowance for the year 840 508 (13b.iii) Key management compensation - Directors 31-Oct-17 31-Oct-16 DIRECTORS’ EMOLUMENTS N'000 N'000 Fees – Chairman 210 210 Fees - Other Directors 540 540 750 750 Emolument as non-executives 60 60 Emolument as executives 8,078 7,671 Total Directors Emoluments 8,888 8,481 Emolument of highest paid Director 8,258 7,069 Key management personnel includes executive directors, non-executive directors, shareholders representatives on audit committee, the functional heads of Finance and accounts, Sales and Marketing, Plant Management, Maintenance and Human Resources Management. No transaction in respect of sale of goods or services was entered into with any key management personnel or shareholder representatives of the audit committee

14 INCOME TAX EXPENSE Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre -tax income of the period. The Company's effective tax rate in respect of its operations f or the period ended 31 October 2017 was 55.69% as against 31 October 2016: 27.9%. 31-Oct-17 N'000 45,695 3,280 48,975 (64) 48,911 (20,781) 28,130

14a Profit and Loss: Provision for period Educational Tax provision Company Income Tax ( Note 14b) Over provision of income taxes Deferred Tax for period (Note 14c) Income Tax Expense

51

31-Oct-16 N'000 25,741 1,806 27,547 27,547 (17,056) 10,491

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT – Continued FOR THE YEAR ENDED 31 OCTOBER 2017 14b Income tax payable Opening balance Current period charge (Note 14a) Over provision of income taxes Payment during period Closing balance 14c Deferred Tax Liabilities Balance at November 1, Provision for the year (Note 14a) Closing balance

31-Oct-17 27,547 48,975 (64) (27,482) 48,975 N’000 3,683 (20,781) (17,098)

15a. Income tax reconciliation - IAS 12P.81c Profit before income tax Tax thereon at 30% (2015: 30%) Impact of disallowable expense for tax purpose Reversal of prior year over-provision Tertiary education tax at 2% of assessable profit Effect of over-provision in prior year Total income tax expense Effective tax rate % 15b. Deferred tax reconciliation - IAS 12P.81c Accelerated depreciation for tax purpose Provision Unrealized exchange difference 16. TRADE AND OTHER PAYABLES

31-Oct-16 31,898 27,547 (31,898) 27,547 N’000 20,739 (17,056) 3,683

31-Oct-17 N'000 77,554 23,266 1,649 3,280 (64) 28,130 36.27%

31-Oct-16 N'000 37,597 11,279 417 2,930 1,806 (5,942) 10,490 27.90%

N'000 33,180 (50,278) (17,098)

N'000 35,676 (750) (31,243) 3,683

31-Oct-17 N'000 14,410 321,496 7,857 0 6,659 10,004 2,421 793 11,600 0 1,024 376,264

Trade Payables – Local Payables to related parties-Greif SA (Note 13a.ii) Payable to related party-Greif USA (Note 13a.iv) Payable to related pty-Greif Netherlands (Note 13a.111) Accrued professional fees Dividend Unclaimed ESB Staff Savings Scheme Accrued payroll benefits Other taxes payable Dividend Payable Other accruals

31-Oct-16 N'000 23,721 275,543 5,501 12,077 11,131 10,004 3,456 679 8,220 845 351,176

Terms and conditions of the above financial liabilities: • Trade payables are non-interest bearing and are normally settled on a 30-60 day terms • Other payables are non-interest bearing and have an average term of three months. It comprises of VAT, WHT and PAYE • Accruals are liabilities to pay for goods or services that have been received or supplied but have not been invoiced or formally agreed with the supplier. They have an average term of three months.

52

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT – Continued FOR THE YEAR ENDED 31 OCTOBER 2017 • •

17

For terms and conditions with related parties, refer to Note 13 The carrying amounts of trade and other payables for the year ended October 31, 2016 and 2015 respectively approximate to their fair values.

REVENUE

The analysis of Turnover which was all achieved in Nigeria by product Lines is as follows: 31-Oct-17 Product Lines N'000 Steel Drums 1,405,218

31-Oct-16 N'000 999,150

18 COST OF SALES, SELLING/MARKETING EXPENSES, OTHER OPERATING EXPENSES Items charged/(credited) in arriving at operating profit: Operating Expenses Included in Cost of Sales: Direct Material Cost Direct Line Costs General Administration Employees Benefits (Note 21b) Indirect Factory Labor/employee benefits (Note 21b) Depreciation on Property, Plant & Equipment Indirect Factory/Production Costs Total Cost of Sales Included in Selling & Marketing Costs: Publicity Commercial Presents Total Selling & Marketing Costs Included in Other Operating Costs: Loss/(Gain) on Asset disposal General Administration Employees Benefits (Note 21a) Depreciation on Property, Plant & Equipment Amortisation of Intangible Assets Impairment of Assets Auditors' Remuneration Repairs & Maintenance Personnel expenses Travelling expenses Director expenses Insurance Professional fees Donation Bank charges Subscription Sundry IT expenses Provision for bad debts Office expenses Annual general Meeting expenses Director fees Exchange Loss Total General and Administrative Expenses

53

31-Oct-17 N’000 1,329,055

31-Oct-16 N’000 968,176

953,173

672,574

75,034

62,208

30,804 11,573 16,108 63,190 1,149,882

27,836 11,059 15,543 43,778 832,998

45 5,023 5,068

607 6,655 7,262

29,238 2,706 4,448 5,728 6,000 5,927 7,342 11,170 781 1,555 7,970 400 908 1,726 14,501 994 5,665 2,846 750 63,450 174,465

25,673 2,406 5,750 7,623 4,327 5,559 568 1,116 7,825 200 799 1,437 1,563 14,089 2,519 750 45,712 127,916

31-Oct-17

31-Oct-16

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT – Continued FOR THE YEAR ENDED 31 OCTOBER 2017 N’000

N’000

Exchange loss 63,450 This is the net effect of changes in exchange rate on foreign currency denominated transactions including intercompany balances

19

COST CLASSIFICATION BY NATURE OF EXPENSES

Loss/(Gain) on Asset disposal Depreciation

31-Oct-17

31-Oct-16

N'000

N'000

0

0

18,814

17,949

953,173

672,574

71,615

64,568

Amortization of Intangible Assets

4,448

0

Impairment of Assets

5,728

0

Auditors Remuneration

6,000

5,750

Repairs & Maintenance

5,927

7,623

138,224

105,986

Publicity and Advertisement

5,068

7,262

Personnel expenses

7,342

4,327

Travelling expenses

11,170

5,559

781

568

Insurance

1,555

1,116

Professional fees

7,970

7,825

Donation

400

200

Bank charges

908

800

Direct material Employee benefits (Note 21a)

Factory/Production Expenses

Director expenses

Subscription

1,726

1,439

14,501

11,843

994

0

Office expenses

5,665

3,806

Annual general Meeting expenses

2,846

2,519

750

750

63,450

45,712

1,329,060

968,176

Sundry IT expenses Provision for bad debts

Director fees Exchange Loss/Gain

20

INTEREST INCOME

Interest Income

1,391

This represents interest received on placement of excess funds in short term treasury deposits

54

6,622

45,712


21 EMPLOYEE BENEFITS

21a The following items are included within employee benefits expense: Short term employee benefits Employee & Management Incentive Programs Pension Costs - Defined Contribution Scheme End Of Service Savings Scheme - Defined Contribution 21b This is reflected in Profit and Loss accounts as follows: Direct Labour/employee benefits (Note 18) Indirect Factory Labor/employee benefits (Note 18) General Administration Employees Benefits (Note 18)

31-Oct-17 N'000

31-Oct-16 N'000

60,766 3,846 4,256 2,747 71,615

54,397 3,711 4,028 2,432 64,568

30,804 11,573 29,238 71,615

27,836 11,059 25,673 64,568

21c Staff Categories and Number Total full time employees at the Company as at 31-October-2017 and as compared to corresponding period in 2016 are as follows: Category 31-Oct-17 31-Oct-16 Managerial 6 6 Senior Staff 8 8 Junior Staff 14 14 Total 28 28 22

PROVISIONS

31-Oct-17 31-Oct-16 N'000 N'000 Balance at 1 November 2,500 7,000 Payment during the year (2,500) (4,000) Write back during the year (500) Balance at 31 October 2,500 In December 2011, Judgment was delivered by the High Court of Lagos State against the Company in suit No. LD/1908/06, between Onson Plastics & Industries Limited and Greif Nigeria Plc for the claimant's claim in the sum of Seven Million Naira only i.e. N7m being special and general damages for alleged breach of contract to remove PVC armored cables for purchase entered into between the parties, sometime in March 2005 . The Company thereafter filed an appeal at the Court of Appeal, Lagos against the High Court of Lagos State's judgment. On November 28, 2014 judgment was again delivered by the Court of Appeal against the Company in suit No. CA/L/916/2011

55


In line with legal advise from the solicitors, the Company has subsequently finally reached an out of court agreement in lieu of Supreme Court appearance to settle the liability at N6.5million in installments. At period ended October 31, 2017 the total amount of N6.5million had been settled while the recovery of N500,000 from earlier provision had been credited to the profit and loss account. 23. CONTINGENT LIABILITY The Company had no known contingent liabilities as at the period ended 31-October-2017. 24. EARNINGS PER SHARE Profit attributable to equity holders of the Company (N'000) Weighted average number of ordinary shares in issue ('000) Basic earnings per share (Kobo) Diluted earnings per share (kobo)

31-Oct-17 48,424 42,640 116 116

31-Oct-16 27,106 42,640 64 64

Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. There were no potential ordinary shares outstanding at 31-October-2017 or 2016; diluted earnings per share are therefore the same as basic earnings per share. 25.

EVENTS AFTER REPORTING DATE

There is no material event after the reporting date which could have had a material effect on the state of affairs of the Company as at 31 October 2017.

56

GREIF NIGERIA PLC STATEMENT OF VALUE ADDED 31-Oct-17 N'000 1,405,218 (1,016,001) (218,177) 170,040 1,391 172,430

% Share 100% -72% -16% 12% 0% 12%

31-Oct-16 N'000 999,150 (559,882) (325,777) 113,492 6,622 120,114

% Share 100% -56% -33% 11% 1% 12%

To pay employees Salaries, Wages & Other Benefits

71,615

42%

64,568

53%

To government Taxation

48,911

28%

27,547

23%

0

0%

0

0%

To provide for maintenance & expansion of business Depreciation 23,262 Deferred taxation (20,781) Profit for the year 49,424 172,430

13% -12% 29% 100%

17,949 (17,056) 27,106 120,114

15% -14% 23% 100%

Turnover Bought in materials - local Bought in materials - foreign Other Income Value added Applied as follows:

To providers of finance Interest Paid

Value added represents the additional wealth, which the Company created by its own, and its employees' efforts. This statement shows the allocation of that wealth between employees, government, providers of finance, and that retained for future creation of more wealth.

57

GREIF NIGERIA PLC FIVE-YEAR FINANCIAL SUMMARY AS AT: 31-Oct-17 31-Oct-16 N'000 N'000 TOTAL ASSETS Non-Current Assets 150,085 156,018 Current Assets 636,578 566,472 786,663 722,490 TOTAL EQUITY Equity Share Capital 21,320 21,320 Retained Earnings 340,104 316,264 361,424 337,584 NON-CURRENT LIABILITIES 0 3,683 CURRENT LIABILITIES 425,239 381,223 TOTAL EQUITY & LIABILITIES 786,663 722,490 TURNOVER Profit before tax Tax Expense Profit for the year Other Comprehensive income Total comprehensive income Per Share Information Basic earnings per share Net Assets per Share Dividend Declared

31-Oct-15 N'000

31-Oct-14 N'000

31-Oct-13 N'000

148,432 567,282 715,714

162,480 501,293 663,772

165,865 516,550 682,415

21,320 314,742 336,062

21,320 315,702 337,022

21,320 297,843 319,163

20,739 358,913

35,536 291,215

39,042 324,210

715,714

663,772

682,414

1,405,218

999,150

805,370

787,582

795,200

77,554

37,597

40,149

58,029

52,469

(28,130) 49,424

(10,490) 27,106

(15,525) 24,624

(14,586) 43,443

(21,843) 30,626

0

0

0

0

0

49,424

27,106

24,624

43,443

30,626

116 848 0

64 792 60

58 788 60

102 790 60

58

72 Kobo 749 Kobo 30 Kobo