Transnational Corporation of Nigeria Plc Unaudited condensed ...

Transnational Corporation of Nigeria Plc Unaudited condensed consolidated interim financial For the period ended 30 September 2016

Transnational Corporation of Nigeria Plc Statement of Financial Position As at 30 September 2016

Note Assets Non-current assets Property, plant and equipment Intangible assets Investment property Investment in subsidiaries Debt and equity securities Prepaid lease rental (long term)

Group 31 December 30 September 2015 2016 N'000 N'000

Company 31 December 30 September 2015 2016 N'000 N'000

120,173,968 38,876,945 1,706,600 2,065,414 66,100

109,761,030 38,886,750 1,706,600 1,764,937 5,000

22,085 5,076,158 1,706,600 27,529,887 2,065,414 -

35,015 5,076,385 1,706,600 27,529,887 1,764,937 -

162,889,027

152,124,317

36,400,144

36,112,824

4,645,155 48,441,984 30,000 85,642 4,369,649

4,597,456 31,353,769 30,000 358,887 14,419,520

23,797,373 85,642 17,855

20,137,082 358,887 10,686

57,572,430

50,759,632

23,900,870

20,506,655

220,461,457

202,883,949

60,301,014

56,619,479

34,024,204 4,383,085 14,173,782 1,875,000

20,097,690 5,695,106 15,363,985 1,875,000

8,286,857 213,512 5,309,039 1,875,000

7,647,979 202,198 5,627,440 1,875,000

54,456,071

43,031,781

15,684,408

15,352,617

81,806,854 10,502,430

61,844,507 10,502,430

13,176,886 -

10,045,155 -

92,309,284

72,346,937

13,176,886

10,045,155

146,765,355

115,378,718

28,861,294

25,397,772

20,328,524 6,245,343 (345,819) (188,548) 20,170,317 46,209,817 27,486,285

19,360,499 7,213,368 (345,819) (587,547) 28,138,355 53,778,856 33,726,375

19,360,499 7,213,368 (52,776) 4,918,629 31,439,720 -

19,360,499 7,213,368 (475,867) 5,123,707 31,221,707 -

73,696,102

87,505,231

31,439,720

31,221,707

220,461,457 -0 The notes on pages 5 to 18 are an integral part of these financial statements.

202,883,949 -

60,301,014 0

56,619,479 -

Current assets Inventories Trade and other receivables Prepaid lease rental (short term) Debt and equity securities Cash and cash equivalents

6 7 8 9 14 11

12 13 11 14 15

Total assets Liabilities Current liabilities Trade and other payables Taxation Borrowings (short term) Advance deposits

Non-current liabilities Borrowings (long term) Deferred tax

16 17 18 19

18 10

Total liabilities Equity Ordinary share capital Share premium Treasury shares Other reserves Retained earnings Equity attributable to owners of the parent Non controlling interest Total equity

28 28 28

29

Net equity and liabilities

-0.065200001 The financial statements on pages 8 to 47 were approved and authorised for issue by the Board of Directors on 24 March 2016 and

Ibikunle Oriola Chief Finance Officer FRC/2013/ICAN/00000004372

Emmanuel Nnorom President, Chief Executive Officer FRC/2014/ICAN/00000007402

1

Transnational Corporation of Nigeria Plc Statement of Comprehensive Income For the nine months ended 30 September 2016 Group 30 September 30 September 2016 2015 N'000 N'000

Company 30 September 30 September 2016 2015 N'000 N'000

Note Revenue Cost of sales

20 21

Gross profit Administrative expenses Other income/expenses Other (losses)/gains - net

24 22 23

Operating profit Finance income Finance cost

25 25

Finance cost -net Profit before taxation Taxation

17

Profit for the period Profit attributable to: Owners of the parent Non controlling interest Other comprehensive income Items that may be reclassified to profit or loss: Changes in the fair value of available-for-sale (equity securities)

14

Total comprehensive income for the period Attributable to: Owners of the parent Non controlling interest Basic EPS (kobo) Diluted EPS (kobo)

41,921,050 (22,081,654)

30,425,206 (12,247,880)

1,723,376 -

2,271,384 -

19,839,396

18,177,326

1,723,376

2,271,384

(8,966,826) 364,062 347,008

(8,307,505) 1,169,083 -

(1,322,925) 879,422 -

(1,140,007) 883,144 -

11,583,640

11,038,904

1,279,873

2,014,521

786,283 (25,152,912)

942,522 (4,793,136)

1,018,182 (2,330,795)

844,310 (1,620,045)

(24,366,629)

(3,850,614)

(1,312,613)

(775,736)

(12,782,989) (1,425,139)

7,188,290 (1,302,538)

(32,740) (172,338)

1,238,786 (227,138)

(14,208,128)

5,885,752

(205,078)

1,011,648

(7,968,038) (6,240,090)

3,003,106 2,882,646

(205,078) -

1,011,648 -

398,999

(63,367)

398,999

(63,367)

(13,809,129)

5,822,385

193,921

948,281

(7,569,039) (6,240,090)

2,939,739 2,882,646

193,921 -

948,281 -

(19.02) (19.02)

7.76 7.76

(0.53) (0.53)

2.61 2.61

27 27

The result shown above relate to continuing operations, there are no incomes or expenses from discontinued operations. The notes on pages 5 to 18 are an integral part of these financial statements.

2

Transnational Corporation of Nigeria Plc Statement of Changes in Equity For the nine months ended 30 September 2016

Group

Attributable to owners of the parent Share Capital N'000

Share Premium N'000

Treasury Shares N'000

Other Reserves N'000

Retained Earnings N'000

Total Controlling interest N'000

Non Controlling interest N'000

19,360,499

7,213,368

(137,790)

-

30,070,219

56,506,296

33,248,555

89,754,851

-

-

-

(63,367) -

3,003,106 (2,323,281)

(63,367) 3,003,106 (2,323,281)

2,882,646 -

(63,367) 5,885,752 (2,323,281)

Balance at 30 September 2015

19,360,499

7,213,368

(137,790)

(63,367)

30,750,044

57,122,754

36,131,201

93,253,955

Balance at 1 January 2016

19,360,499

7,213,368

(345,819)

(587,547)

28,138,355

53,778,856

33,726,375

87,505,231

-

-

-

398,999

(7,968,038) -

(7,968,038) 398,999

(6,240,090) -

(14,208,128) 398,999

19,360,499

7,213,368

(345,819)

(188,548)

20,170,317

46,209,817

27,486,285

73,696,102

Share Capital N'000

Share Premium N'000

Other Reserves N'000

Retained Earnings N'000

N'000

Balance at 1 January 2015 Revaluation of AFS financial assets Dividend paid Profit for the year

19,360,499 -

7,213,368 -

(63,367) -

6,887,323 1,011,648 (2,323,281)

33,461,190 (63,367) 1,011,648 (2,323,281)


19,360,499

7,213,368

-63,367

5,575,690

32,086,190

Balance at 1 January 2016 Transfer from OCI Dividend paid Loss for the period Other comprehensive income

19,360,499 -

7,213,368 -

(475,867) 24,092 398,999

5,123,707 (205,078) -

31,221,707 24,092 (205,078) 398,999


19,360,499

7,213,368

(52,776)

4,918,629

31,439,720

Balance at 1 January 2015 Revaluation of AFS financial assets Profit for the period Dividend paid

Profit for the year Acquisition of treasury shares Shares alloted to NCI Dividend paid Other comprehensive income Balance at 30 September 2016

Total Equity N'000

Company

The notes on pages 5 to 18 are an integral part of these financial statements.

3

Total

Transnational Corporation of Nigeria Plc Statement of Cash Flows For the nine months ended 30 September 2016 Group 30 September 2016 N'000

30 September 2015 N'000



11,332,126 (2,737,160)

11,291,519

(2,253,627)

(1,805,196)

(1,448,750) (161,024)

8,594,966

9,486,323

(1,609,774)

(2,428,851)

25 7 6

786,283 (516) (12,819,469)

942,522 (16,157) (6,788,505)

1,018,182 (415)

844,310 (937)

14

98,522 18,119

440,934

98,522 18,119

440,934

(11,917,061)

(5,421,206)

1,134,408

1,284,307

18,772,144 (6,702,527) -

6,964,005 (4,793,136) (2,323,281)

2,813,330 (2,330,795) -

5,091,940 (1,620,045) (2,323,281)

12,069,617

(152,412)

482,535

1,148,614

8,747,522

3,912,705

7,169

4,069

15

14,419,520

2,930,517

10,686

8,118

23

(18,797,393)

266,672

-

-

15

4,369,649

7,109,894

17,855

12,187

Note Cash flows from operating activities Cash generated from/(used in) operations VAT paid Tax paid

31 17

Net cash flows generated from /(used in) operating activities Cash flows from investing activities Interest received Increase in intangible assets Purchase of property, plant and equipment Proceeds from Sale of property, plant and equipment Proceeds from sale of AFS equity securities Fixed income investment Net cash flows (used in)/ generated from investing activities Cash flows from financing activities Net movement in borrowings Interest payment Dividend Payment

25

Net cash flows generated/ (used in) from financing activities Net increase/ (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Foreign exchange (loss)/ gain on cash and cash equivalents Cash and cash equivalents at the end of the period

Company

The notes on pages 5 to 18 are an integral part of these financial statements.

4

(175,224)

Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 ` 1.

General information Transnational Corporation of Nigeria Plc, ("the Company" or "Transcorp"), was incorporated on 16 November, 2004 as a private limited liability Company domiciled in Nigeria in accordance with the requirements of the Companies and Allied Matters Act. Following a successful initial public offer (IPO), the Company was in December 2006, listed on the Nigerian Stock Exchange. The shares of the Company have continued to be traded on the floor of the Exchange. The Company is domiciled in Nigeria and the address of its registered office is 38 Glover Road, Ikoyi, Lagos, Nigeria. The Company maintains controlling interests in the following companies. The Company, together with the subsidiaries are known as the Transcorp Group, ("the Group") - Capital Leisure and Hospitality Limited - Transcorp Hotels Plc - Transcorp Hotels Calabar Limited - Transcorp Energy Limited - Teragro Commodities Limited - Transcorp Power Limited (Transcorp Ughelli Power Limited) - Transcorp Staff Share Ownership Trust Company Limited - Transcorp Properties Limited - Transcorp OPL 281 Limited - Transcorp Telecomms Ltd - Transcorp Trading and Logistic Ltd - Transcorp Refining Company Limited - Transcorp Hotels Ikoyi Limited - Transcorp Hotels Port Harcourt Limited The Company’s business is the investment in and operation of portfolio companies in the hospitality, power, agro-allied and oil & gas sectors. These financial statements are presented in Nigerian Naira, being the functional currency of the primary economic environment in which the Company operates.

2.

Summary of significant accounting policies

2.1

Basis of preparation The interim condensed consolidated financial statements for the third quarter ended 30 September, 2016 have been prepared in accordance with IAS 34 Interim Financial Reporting and the Companies and Allied Matters Act (CAMA). The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements as at 31 December 2015. The accounting policies adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2015. In preparing these interim financial statements, Management make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgements made by Management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2015. The interim condensed financial statements have been prepared on a historical cost basis except for the fair value basis applied to certain property plant and equipment, intangible assets, investment property and equity investments. The financial statements are presented in Naira being the functional currency of the primary economic environment in which the Company operates. All values are rounded to the nearest thousand (N’000), except when otherwise indicated.

5

Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 3.

Financial risk management

3.1

Financial risk factors The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group does not hedge any of its risk exposures. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December 2015. Risk management is carried out in line with policies approved by the board of directors. The board provides written policies for overall risk management, as well as set the overall risk appetite for the Group. Specific risk management approaches are defined for respective risks such as interest rate risk, credit risk,liquidity and investment risk. The Group’s overall risk management program seeks to minimize potential adverse effects on the Group’s financial performance. There have been no changes in any risk management policies since 2015 year end.

3.3

Fair value estimation The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). The following table presents the Group’s financial assets that are measured at fair value at 30 September 2016. 3.3

Fair value estimation (continued) Assets Financial assets at fair value through other comprehensive income Equity securities at fair value through OCI

Level 1

Level 2

Level 3

Total

2,065,414

-

-

2,065,414

The following table presents the Group’s financial assets and liabilities that are measured at fair value at 31 December 2015. Assets Financial assets at fair value through profit or loss Equity securities at fair value through profit or loss

Level 1

Level 2

Level 3

Total

1,764,937

-

-

1,764,937

There were no transfers between levels 1 and 2 during the year. (a) Financial instruments in level 1 The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily equity investments listed on the Nigerian Stock Exchange (NSE) classified as equity securities at fair value through other comprehensive income and profit or loss in Q3 2016 and financial year 2015 respectively. Valuation techniques used to derive level 2 fair values Level 2 fair values of land have been derived using the sales comparison approach. Sales prices of comparable land in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot. Group's valuation processes The Group's finance department includes a team that performs the valuations of financial assets required for financial reporting purposes. This team reports directly to the Chief Financial Officer (CFO). The CFO reports to the Finance and Investment Committee (FIC). Discussions of valuations processes and results are held between the CFO and the FIC periodically in line with the Group's reporting process.

6

Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016

4

Critical accounting estimates and judgments

4.1 Critical accounting policies and key sources of estimation uncertainty The preparation of financial statements requires the directors to use judgment in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgments are continuously evaluated and are based on the directors' experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. The following discusses the most significant accounting judgments and estimates that the Group has made in the preparation of the financial statements: Impairment of goodwill The Group reviews goodwill at least annually and other non-financial assets when there is any indication that the asset might be impaired. The Group has estimated the value in use and fair value of operating segments to which goodwill is allocated using discounted cash flow models that required assumptions about future cash flows, margins, and discount rates. See note 7 for methods and assumptions used in estimating net recoverable amount. 4.2 Critical judgements in applying the entity's accounting policies Consolidation of entities in which the group holds less than 50% Management consider that the group has de facto control of Transcorp Staff Share Ownership Trust Company Limited (the entity) even though the group's interest is only 1%. Control has been determined based on the following considerations: i) The Group directs the activities that significantly affect the entity's returns ii) Transcorp is exposed to variable returns from its involvement with the entity as the number of shares held by the share scheme are used to reduce the share capital of the group iii) Transcorp has the ability to use its power to affect the its returns from its involvement with with the entity 5

Segment Analysis The Group The chief operating decision-maker has been identified as the Board of Directors of Transcorp. The Board reviews the Group’s internal reporting in order to assess performance and allocate resources. The directors have determined the operating segments based on these reports. The Board considers the business from an industry perspective and has identified 5 operating segments.

i

Hospitality The hospitality business is made up of its direct subsidiary Transcorp Hotels Plc. (THP) and indirect subsidiaries, Transcorp Hotels Calabar Limited (THC), Transcorp Hotels Ikoyi Limited and Transcorp Hotels Port Harcourt Limited. These entities render hospitality services to customers.

ii

Agro-allied This relates to a subsidiary Teragro Commodities Limited. The subsidiary is engaged in the manufacturing/processing of fruit concentrates from fruits from which the Group derives revenue.

iii

Power This relates to a subsidiary Transcorp Power Limited (TPL). The subsidiary is engaged in generation of electric power.

iv

Oil & Gas Two subsidiaries make up the oil & gas segment namely Transcorp Energy Limited and Transcorp OPL 281 Limited. The companies are into the exploration, refining and marketing of petroleum products. The subsidiaries are in the start-up phase and have not started generating revenue.

v

Corporate Centre This segment is the parent Company, Transnational Corporation of Nigeria Plc and the other non-operational subsidiaries. The Board assesses the performance based on operating profits for each operating segment that is reviewed by the Board. Other information provided, except as noted below, to the Board is measured in a manner consistent with that of the financial statements. Sales between segments are carried out at arm’s length. The revenue from external parties reported to the group is measured in a manner consistent with that in the income statement. Total segment assets exclude tax related assets. These are included in the reconciliation to the total statement of financial position assets.

7


5

Segment Analysis (continued)

As at 30 September 2016 N'000

Hospitality

Oil & gas

Agro-allied

Power

Corporate Centre

Intersegment eliminations

Total

Revenue

11,470,931

-

15,791

30,434,328

1,723,376

(1,723,376)

41,921,050

Finance income Finance cost Depreciation and amortisation Profit/(loss) before taxation Taxation

446,957 (727,728) 3,926,998 (1,252,801)

(479,420) (479,420) -

(22,767) (31,018) (119,682) -

(22,556,467) (1,623,551) (13,387,350) -

1,018,182 (2,330,795) (12,070) (32,740) (172,338)

(678,856) 236,537 (2,690,795)

786,283 (25,152,912) (2,394,367) (12,782,989) (1,425,139)

Segmental assets Segmental liabilities Additions to non current assets

90,204,392 33,887,256

6,761,136 7,557,388 -

398,417 1,552,284 32,378

98,070,467 96,215,133 -

60,301,016 28,861,291 -

(35,273,971) (21,307,997) -

220,461,457 146,765,355 32,378

As at 30 September 2015 N'000

Hospitality

Oil & gas

Agro-allied

Power

Corporate centre

Intersegment eliminations

Total

Revenue

10,462,430

-

105,131

19,857,646

2,271,384

(2,271,384)

30,425,207

Finance income Finance cost Depreciation and amortisation Profit before taxation Taxation

275,947 (769,936) 3,417,042 (1,075,400)

-

-25,764 -5,706 -166,280 -

(3,325,061) (1,431,111) 4,970,128 -

844,310 (1,620,045) (12,290) 1,175,418 (227,138)

At December 2015 Segmental Assets Segmental Liabilities Additions to non current assets

90,943,774 37,328,677 -

6,761,136 7,077,968 -

390,365 1,418,255 485,991

89,562,660 74,317,985 -

56,927,580 26,016,232 -

1,120,256 (4,970,871) (2,219,043) 9,396,308 (1,302,538)

(41,701,566) (30,780,399) -

202,883,949 115,378,718 485,991

Revenues from transactions with other operating segments relates to dividend income from Transcorp Hotels Plc and Transcorp Power Limited to the Company, Transnational Corporation of Nigeria Plc. Reconciliations of reportable segment revenues, profit or loss, assets and liabilities. The totals presented for the Group’s operating segments reconcile to the key financial figures as presented in its financial statements as follows: 30 September 2016

30 September 2015

43,644,426 (1,723,376) 41,921,050

32,696,591 (2,271,384) 30,425,206

(10,092,194) (2,690,795) (12,782,989)

9,396,308 (2,208,018) 7,188,291

30 September 2016

31 December 2015

Assets Total assets of reportable segments Consolidation eliminations (iii) Consolidated total assets

255,735,428 (35,273,971) 220,461,457

244,585,515 (41,701,566) 202,883,949

Liabilities Total liabilities of reportable segments Consolidation eliminations (iv) Consolidated total liabilities

146,159,117 606,238 146,765,355

118,519,068 (3,140,350) 115,378,718

N'000 Revenue Total revenue for reportable segments Elimination of inter-segment revenue (i) External revenue Profit or loss Total profit or loss for reportable segments Elimination of inter-segment profits (ii) Consolidated profit before taxation

8


5

Segment Analysis (continued) The nature of differences between the measurements of the reportable segment's assets/liabilities and the assets/liabilities of the Group is as follows:

(i) Elimination of inter-segment revenue relates to dividend income from Transcorp Power Limted and Transcorp Hotels to Transnational Corporation of Nigerira. (ii) Elimination of inter-segment profits relates to dividend income between the segments and other income arising from transactions with non-controlling interests. (iii) Investments of Transnational Corporation of Nigeria Plc in its subsidiaries and investment of Transcorp Hotels Plc in Transcorp Hotels Calabar Limited, Transcorp Hotels Port harcourt Limited and Transcorp Hotels Ikoyi limited respectively accounts for the consolidation eliminations of total assets of reportable segments. Intersegment receivables were also eliminated to arrive at the consolidated total assets. (iv) Inter-segment payables, dividend payable to segments within the Group and management fees payable to Transnational Corporation of Nigeria Plc from Transcorp Hotels Plc and Transcorp Power Ltd accounts for the consolidation eliminations in total liabilities of the reportable segments.

Entity-wide Information The following is an analysis of the Group's revenue from continuing operations from its major products and services. Analysis of revenue by category:

Rooms Food & Beverage Shop rental Service charge Laundry Juice Concentrate Capacity charge Energy delivered Ancilliary services Total

30 September 2016 N'000 7,347,431 3,136,494 509,087 11,262 466,657 15,791 10,634,038 19,687,716 112,574

30 September 2015 N'000 7,096,888 2,511,865 506,594 10,327 336,753 105,131 14,090,532 5,621,766 145,349

41,921,050

30,425,205

The Group is domiciled in Nigeria where it generates all its external revenue. The total non-current assets of the Group are all located in Nigeria.

6

Property, plant and equipment Group

Land N'000

Building & Improvements N'000

Plant & Machinery N'000

Furniture & Fittings N'000

Computer & Office Equipments N'000

Cost Balance as at 1 January 2015 Additions Reclassification Disposals

31,760,758 2,132,500 1,507,000 -

17,000,877 217,787 16,588 -

45,546,578 1,082,277 4,364,063 -

2,502,609 350,885 436 (9,430)

61,840 1,279 (1,635)

597,190 168,649 29,500 (92,815)

6,521,234 14,104,304 (4,410,587) (358,582)

103,991,086 18,057,681 1,507,000 (462,462)

Balance as at 31 December 2015

35,400,258

17,235,252

50,992,918

2,844,500

61,484

702,524

15,856,369

123,093,305

Balance as at 1 January 2016 Additions Reclassification Disposals

35,400,258 16,652 -

17,235,252 353,206 -

50,992,918 1,097,014 (1,154)

2,844,500 224,900 (2,313)

61,484 (415)

702,524 3,040 (25,385)

15,856,369 11,124,656 -

123,093,305 12,819,469 (29,267)

Balance as at 30 September 2016

35,416,910

17,588,458

52,088,778

3,067,087

61,069

680,179

26,981,025

135,883,507

9

Motor Capital Work in Vehicles Progress N'000 N'000

Total N'000

Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 6

Property, plant and equipment (continued) Group Building & Improvements N'000




1,443,735

6,898,158

1,797,656

19,232

313,712

-

10,472,493

402,745 -

2,236,719 -

213,936 (3,820)

4,205 (1,320) -

99,527 (92,210)

-

2,957,132 (97,350) -

-

1,846,480

9,134,877

2,007,772

22,117

321,029

-

13,332,275

-

1,846,480

9,134,877

2,007,772

22,117

321,029

-

13,332,275

307,991 -

1,800,027 (294)

194,908 -

(251)

81,571 (6,689)

-

2,384,497 (7,233) -

-

2,154,471

10,934,610

2,202,680

21,866

395,911

-

15,709,539

35,400,258

15,388,772

41,858,041

836,728

39,367

381,495

15,856,369

109,761,030

35,416,910

15,433,987

41,154,167

864,407

39,203

284,268

26,981,025

120,173,968

Building & improvements N'000




Motor Capital Work Vehicles in progress N'000 N'000

Total N'000

28,294

4,618

29,608

27,008

Land N'000 Depreciation and impairment losses Balance as at 1 January 2015 Depreciation Disposals Impairment Balance as at 31 December 2015

Balance as at 1 January 2016 Depreciation Disposals Impairment Balance as at 30 September 2016 Carrying amounts At 31 December 2015 At 30 September 2016

Motor Capital Work Vehicles in Progress N'000 N'000

Total N'000

Company

Cost Balance as at 1 January 2016 Additions Disposals

(415)

13,975 415 (6,415)

-

103,503 415 (6,830)


28,294

4,618

29,608

26,593

7,975

-

97,088

Depreciation and impairment losses Balance as at 1 January 2016 Depreciation for the year Disposals

19,082 5,110 -

1,124 493 -

15,339 2,951 -

21,751 2,114 (154)

11,192 1,175 (5,174)

-

68,488 11,843 (5,328)


24,192

1,617

18,290

23,711

7,193

-

75,003

9,212 4,102

3,494 3,000

14,269 11,318

5,257 2,882

2,783 782

-

35,015 22,085

Carrying amounts At 31 December 2015 At 30 September 2016

10


Intangible assets

Group

Company

At 1 January 2016 Addition Disposal

Goodwill N'000 30,934,143 -

Computer software N'000 145,040 516 -

Oil Prospecting License N'000 5,075,818 -

Exploration and Evaluation Expenditure N'000 2,818,412 -

As at 30 September 2016

30,934,143

145,556

5,075,818

Cost

Total N'000 38,973,413 516 -

Computer software N'000 12,966 -

Oil Prospecting License N'000 5,075,818 -

Total N'000 5,088,784 -

2,818,412

38,973,929

12,966

5,075,818

5,088,784

Accumulated amortisation and impairment At 1 January 2016 Amortisation charge

-

86,663 10,321

-

-

86,663 10,321

12,399 227

-

12,399 227

As at 30 September 2016

-

96,984

-

-

96,984

12,626

-

12,626

30,934,143

145,556

5,075,818

2,818,412

38,973,929

12,966

5,075,818

5,088,784

30,934,143

(96,984) 48,572

5,075,818

2,818,412

(96,984) 38,876,945

(12,626) 340

5,075,818

(12,626) 5,076,158

30,934,143

145,040

5,075,818

2,818,412

38,973,413

12,966

5,075,818

5,088,784

30,934,143

(86,663) 58,377

5,075,818

2,818,412

(86,663) 38,886,750

(12,399) 567

5,075,818

(12,399) 5,076,385

Net book value Cost Accumulated amortisation and impairment At 30 September 2016 Net book value Cost Accumulated amortisation and impairment At 31 December 2015

Goodwill is not amortised but tested for impairment annually. The remaining amortisation period for computer software cost is between 3 to 6 years. The Production Sharing Contract between Transcorp and the Nigerian National Petroleum Corporation was signed by the Federal Government of Nigeria on 2 May 2014. Per the agreement, the exploration period is for 5 years after which the OPL converts to an Oil Mining License for a period of 20 years. Amortisation of the OPL cost will commence when it has been determined that commercial quantity of crude can be produced from the oil field and mining commences.

Goodwill has been allocated to the following CGUs

Transcorp Hotels Calabar (THC) Transcorp Hotels Plc (THP) Transcorp Power Limited (TPL)

30 September 2016 N'000 863,163 20,369,790 9,701,190

31 December 2015 N'000 863,163 20,369,790 9,701,190

30,934,143

30,934,143

Goodwill arose from the excess of the consideration over acquisition-date fair values of identifiable assets and liabilities of subsidiaries acquired. The goodwill amount relates to pre-existing goodwill from previous business combinations. In assessing goodwill for impairment at 31 December 2015 and 2014 , the Company compared the aggregate recoverable amount of the assets included in the CGUs below to their respective carrying amounts. Recoverable amount has been determined based on the value in use of the CGUs using five year cash flow budgets approved by directors that made maximum use of observable markets for inputs and outputs. For periods beyond the budget period, cash flows were extrapolated using growth rates that do not exceed the long-term average for the business. No impairment in Goodwill has been recognised in financial year 2016 The key assumptions used for the value-in-use calculations are as follows:

Budgeted gross margin % Weighted average growth rate Pre-tax discount rate

30 September 2016 TPL THC 55% 74% 5% 6% 17% 17%

THP 80% 6% 17%

TPL 55% 5% 17%

31 December 2015 THC 74% 6% 17%

THP 80% 6% 17%

Reasonably possible changes in key assumptions would not cause the recoverable amount of goodwill to fall below the carrying value. 8

Investment property Non-current assets - at fair value

Group 30 September 31 December 2016 2015 N'000 N'000 1,706,600 2,738,164 407,000 106,600 (1,507,000) (38,164)

At 1 January Additions Fair value gain on investment properties (a) Transfer to property, plant and equipment (b) Fair value loss on investment properties (b)

1,706,600

At period end

11

1,706,600

Company 30 September 31 December 2016 2015 N'000 N'000 1,706,600 1,600,000 106,600 1,706,600

1,706,600


9

Investment in subsidiaries

Company 30 September 31 December 2016 2015 N'000 N'000 19,618,523 19,618,523 7,860,464 7,860,464 50,900 50,900

Transcorp Hotel Plc Transcorp Power Limited Other subsidiaries companies

27,529,887

10

Deferred tax

Group 30 September 2016 N'000

The movement in deferred tax liability is as follows:

31 December 2015 N'000

At 1 January Adjustment to opening balance Income statement credit

10,502,430 -

11,593,635 (1,091,205)

At period end

10,502,430

10,502,430

At 1 January 2015 Adjustment to opening balance Credited to the income statement At 31 December 2015 At 1 January 2016

Accelerated tax depreciation N'000 4,790,266

Fair value on revaluation N'000 6,784,356

Provisions N'000 15,154

Tax losses charged to P&L N'000 3,859

(1,091,205)

-

-

-

Total N'000 11,593,635 (1,091,205)

3,699,061

6,784,356

15,154

3,859

10,502,430

3,699,061

6,784,356

15,154

3,859

10,502,430

-

-

-

-

-

3,699,061

6,784,356

15,154

3,859

10,502,430

Credited to the income statement At period end 11

27,529,887

Prepaid lease rental

Group 30 September 2016 N'000 35,000 83,600 (22,500) 96,100

At 1 January Lease renewal Utilisation At 30 Sept Less minimum lease payments for the next 12 months

31 December 2015 N'000 65,000 (30,000) 35,000

(30,000)

(30,000)

Non current lease payments

66,100

5,000

Non current lease payments has been analysed as follows: Due between 1 to 5 years

66,100

5,000

Prepaid lease rental represents amounts paid to Benfruit Nigeria Limited by one of the subsidiaries, Teragro Commodities Limited for lease of facilities and equipment. The lease is for a 10 year period, commencing from the date of commissioning at an initial lease rental of N30 million per annum subject to a renewal option for the lessee of further terms of 5 years each.

12


Inventories

Group 30 September 2016 N'000 169,980 128,427 4,222,289 104,224 430 8,752 11,053

Food and beverage Fuel/ lubricant Spares Guest supplies Finished goods Packaging materials Other sundry stock

4,645,155 13

Trade and other receivables

Trade receivables Less: provision for impairment of trade receivables (a) Trade receivables - net

Group 30 September 31 December 2016 2015 N'000 N'000 42,395,845 25,402,891 (1,034,255) (589,973) 41,361,590 24,812,918

Other receivables Prepayments Due from related companies Dividend receivable

a

31 December 2015 N'000 147,931 91,307 4,230,747 88,693 21,001 6,521 11,256 4,597,456

Company 30 September 31 December 2016 2015 N'000 N'000 -

4,859,216 637,462 1,583,716 -

4,760,429 122,875 1,657,547 -

3,739,441 128,313 15,288,493 4,641,126

3,383,367 51,291 13,784,675 2,917,749

48,441,984

31,353,769

23,797,373

20,137,082

Provision for impairment of trade receivables

Group 30 September 2016 N'000 589,973 444,282

Balance at 1 January Impairment losses/(write backs) recognised on receivables At period end

1,034,255

31 December 2015 N'000 147,520 442,453 589,973

A significant portion of the increase in trade receivable relates to receivable from the Transmission Company of Nigeria Plc and Nigerian Bulk Electricity Trading Plc which are the government regulated bodies for the power business.

14

Debt and equity securities 31 December 2015 N'000

31 December 2014 N'000

Current portion Equity securities at fair value through profit or loss Fixed income investment Non-current portion Equity securities at fair value through OCI

See movement in debt and equity securities below:

At 1 January Fair value gain (Note 23) Liquidation/disposal Impairment

30 September 2016 Equity Fixed income securities investment N'000 N'000 1,764,938 358,887 398,999 (98,522) (18,119) (255,126)

At period end

2,065,415

Impairment recognised to reflect counterparty risk on fixed income investments

13

85,642

Group and Company 30 September 31 December 2016 2015 N'000 N'000 85,642 85,642

358,887 358,887

2,065,414

1,764,937

2,151,056

2,123,824

31 December 2015 Equity securities Fixed income investment N'000 N'000 2,256,379 1,175,219 (475,867) (15,575) (467,270) -349,062 1,764,937

358,887


Cash and cash equivalents

Cash and bank balance

Group 30 September 31 December 2016 2015 N'000 N'000 4,369,649

14,419,520

Company 30 September 31 December 2016 2015 N'000 N'000 17,855

10,686

Included in cash and bank balance for the Group is balance held at First Bank of Nigeria Plc of N210 million which is restricted due to a current court lien placed on it since May 2012 as a result of an existing court case between Lagos State Government and Power Holding Company of Nigeria (PHCN). 16

Trade and other payables

Trade creditors Accruals and other liabilities Unearned income Deposit from guests VAT payable Dividend payable Deposit for shares Due to related companies

Group 30 September 31 December 2016 2015 N'000 N'000 18,927,228 11,173,419 12,094,824 5,431,646 87,733 147,461 136,676 123,316 73,798 346,414 691,437 2,410,000 2,410,000 46,613 21,329 34,024,204

17

Taxation

Income tax Education tax Tax on franked investment income Deferred tax (Note 10) Tax write back

The movement in tax payable is as follows:

At 1 January Provision for the period Adjustment Payment during the period At period end 18

Borrowings

Falling due within a year Bank borrowings Unsecured bond Falling due after one year Bank borrowings Unsecured bond

Total

20,097,690

Group 30 September 31 December 2016 2015 N'000 N'000 1,176,141 1,924,066 76,660 130,917

Company 30 September 31 December 2016 2015 N'000 N'000 526,635 474,313 7,173,666 7,760,222 8,286,857

7,647,979

Company 30 September 31 December 2016 2015 N'000 N'000 153,285 -

1,252,801 172,338 -

2,054,983 324,194 (1,091,205) -

172,338 -

153,285 324,194 -

1,425,139

1,287,972

172,338

477,479

Group 30 September 31 December 2016 2015 N'000 N'000 5,695,106 5,984,570 1,425,139 2,054,983 (2,344,447) (2,737,160) 4,383,085

5,695,106

Group 30 September 31 December 2016 2015 N'000 N'000 14,173,782 12,125,454 3,238,531

Company 30 September 31 December 2016 2015 N'000 N'000 202,198 224,137 172,338 477,479 (161,024) (499,418) 213,512

202,198

Company 30 September 31 December 2016 2015 N'000 N'000 5,309,039 5,627,440 -

-

14,173,782

15,363,985

5,309,039

5,627,440

62,254,759 19,552,095

45,530,943 16,313,564

13,176,886 -

10,045,155 -

81,806,854

61,844,507

13,176,886

10,045,155

95,980,636

77,208,492

18,485,925

15,672,595

14


Advance deposits

Group & company 30 September 2016 31 December 2015 N'000 N'000 1,875,000

Sacoil / Equity, Energy and Resource (EER) farm-in fees 20

Revenue

1,875,000

Group Company 30 September 30 September 30 September 2016 30 September 2016 2015 2015 N'000 N'000 N'000 N'000 7,347,431 7,096,888 3,136,494 2,511,865 509,087 506,595 11,262 10,327 466,657 336,753 15,791 105,131 1,723,376 2,271,384 10,634,038 14,090,532 19,687,716 5,621,766 112,574 145,349 -

The group derives the following types of revenue: Rooms Food & Beverage Shop rental Service charge Laundry Juice Concentrate Dividend income Capacity charge Energy sent out Ancillary services

41,921,050

30,425,206

1,723,376

2,271,384

All recognised revenue were generated in Nigeria. 21

Cost of sales

Group 30 September 2016 30 September 2015 N'000 N'000 18,786 15,987 2,534,896 2,393,303 902,600 693,834 15,290,310 5,923,108 2,469 77,660 432,715 327,963 1,115,798 1,255,171 1,614,544 1,403,551 145,248 121,148 24,288 20,826

Rooms Staff costs Food and beverage Natural gas and fuel costs Direct materials Other direct expenses Repairs and maintenance Depreciation Insurance Other operating departments

22,081,654 22

Other income

Group Company 30 September 30 September 30 September 2016 30 September 2016 2015 2015 N'000 N'000 N'000 N'000 289,008 289,008 525,100 2,627 -

Dividend income on equity securities Management fees from subsidiaries Profit on fixed asset disposal Profit from disposal of AFS equity securities Other income/(losses)

23

12,247,880

Other (losses)/gains - net

72,427

1,169,084

65,314

883,144

364,062

1,169,084

879,422

883,144

Group Company 30 September 30 September 30 September 2016 30 September 2016 2015 2015 N'000 N'000 N'000 N'000 347,008 -

Included in profit or loss Fair value gain on equity securities Foreign exchange (loss) / gain

Included in other comprehensive income Fair value gain on equity securities

15

347,008

-

-

-

398,999

-

398,999

-


Administrative and general expenses

Group Company 30 September 30 September 30 September 2016 30 September 2016 2015 2015

Staff costs Depreciation Amortisation Auditors' remuneration Management and incentive fees Professional fees Director's remuneration Rent and rates Loss on asset disposal Repairs and maintenance Advertising Group Service benefits Insurance Eletricity and diesel cost Travel and accommodation Licenses and fees Business development Bank charges Impairment provision of fixed income investment Provision for bad debts Donations CSR cost Other operating expenses

25

Finance costs and income

N'000

N'000

N'000

1,485,369 769,953 9,870 65,295 1,281,047 199,322 254,057 45,702 912 410,622 17,101 413,850 12,972 831,569 186,037 47,134 303,562 93,271 255,126 489,531 300.00 1,794,224

1,571,376 815,114 378 62,345 1,517,640 320,081 200,958 36,241 525,444 211,756 201,839 12,168 663,454 225,815 34,212 155,513 1,753,169

289,711 11,843 227 31,083 304,791 104,439 85,805 22,500 912 3,743 973 10,989 8,003 74,811 47,109 512 255,126 300.00 70,048

282,485 11,912 378 30,534 256,664 190,485 56,606 12,500 3,843 6,485 10,886 6,421 74,457 34,018 25,584 136,749

8,966,826

8,307,505 -

1,322,925

1,140,007

Group 30 September 30 September 2016 2015

Company 30 September 2016 30 September 2015

N'000

N'000

N'000

N'000

6,702,527 18,450,385

4,793,136 -

2,330,795 -

1,620,045 -

25,152,912

4,793,136

2,330,795

1,620,045

Finance income: Interest income - fixed income investment Interest on loan

786,283

942,522

1,018,182

844,310

Finance income

786,283

942,522

1,018,182

844,310

24,366,629

3,850,614

1,312,613

775,736

Finance costs: Interest expense on loans Foreign exchange loss on financing activities

Net finance costs/(Income)

26

N'000

Net foreign exchange (losses)/gains The exchange differences charged/credited to the income statement are included as follows: Group 30 September 30 September 2016 2015

Other (losses)/gains - net Finance costs


N'000

N'000

N'000

N'000

347,008 18,450,385

-

-

-

18,797,393

-

-

-

The movement in foreign exchange differences is as result of the decline in the value of the Nigerian Naira against the US Dollars by September 2016.

16

N109/$1

from December 2015 to 30


Earnings per share Basic earnings/ loss per share is calculated by dividing the profit/ loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares. Company

Group 30 September 30 September 2016 2015

30 September 2016

30 September 2015

Profit attributable to shareholders

N'000 (7,569,039)

N'000 3,003,106

N'000 (205,078)

N'000 1,011,648

Weighted average number of ordinary shares in issue

39,796,580

38,720,997

38,720,997

38,720,997

(19.02) (19.02)

7.76 7.76

(0.53) (0.53)

2.61 2.61

Basic earnings/ loss per share (Kobo) Diluted earnings/ loss per share (Kobo) 28

Share capital

a

Authorised:

45,000,000,000 ordinary shares of 50kobo each

Group 30 September 31 December 2016 2015 22,500,000

Company 30 September 2016 31 December 2015

22,500,000

22,500,000

22,500,000

Allotted, called up and fully paid: Group and Company Number of shares (thousands)

b

At 1 January 2016

38,720,997

Ordinary shares N'000 19,360,499

Bonus Issue At 30 September 2016

1,936,049 40,657,046

968,025 20,328,524

Share premium

Group 30 September 31 December 2016 2015 N'000 N'000

19,360,499

Company 30 September 2016 31 December 2015 N'000 N'000

At 1 January 2016

7,213,368

7,213,368

7,213,368

7,213,368

Bonus Issue At 30 September 2016

(968,025) 6,245,343

7,213,368

(968,025) 6,245,343

7,213,368

c

Treasury shares Treasury shares represent the Company's shares held by the Employee Share Scheme as at 30 September 2016

29

Non controlling Interest Transcorp Hotels Plc (THP)

Transcorp Ughelli Power Transcorp Hotels Limited (TUPL) Ikoyi Limited

Group

26,326,106

7,399,429

840

33,726,375

THP profit for the year TPL profit for the year

452,573 -

(6,692,663)

-

452,573 (6,692,663)

At 30 September 2016

26,778,679

706,766

840

27,486,285

At 1 January 2016

30

Total N'000 19,360,499

Cash generated from operating activities Group 30 September 30 September 2016 2015 Profit before tax Adjustment for non cash items Depreciation of fixed assets Profit on disposal of AFS equity securities (Profit) /Loss on assets disposal Loss write-back from AFS reserves Amortization of intangible assets Fair value gain on equity securities Provision for debt securities Amortization of prepaid lease rental Finance cost Finance income Foreign exchange loss/gain


N'000 (12,782,989)

N'000 7,188,291

N'000 (32,740)

N'000 1,238,786

2,384,497 24,092 912 226,661 9,870 (398,999) 255,126 25,152,912 (786,283) (347,008)

2,218,665 -

11,843 24,092 912 226,661 227 (398,999) 255,126 2,330,795 (1,018,182) -

11,912 -

17

378 63,366 22,500 4,793,136 (942,522) (266,672)

378 1,620,045 (844,310) -


Cash generated from operating activities (continued) Other adjustments to reconcile expenses for the year to cash from operating activities

Increase in debtors and prepayment Increase in inventory Increase in payables and accrued expenses Net cash generated from/(used in) operations 32

Related parties

a

Related entities

(17,149,316) (47,699) 14,790,350

(2,500,638) (2,482,809) 3,197,825

(3,660,291) 811,806

(1,263,959) (3,016,479)

11,332,126

11,291,519

(1,448,750)

(2,253,627)

Heirs Holding Limited Heirs Holding Limited is a company controlled by the group's key management personnel. Transcorp entered into a technical services agreement with Heirs Holding Limited for the latter’s provision of corporate and financial advisory services, governance support, brand and communications services and business development support. A technical services agreement was also entered into between Transcorp Power Limited and Heirs Holdings Limited.

Tony Elumelu Foundation Tony Elumelu Foundation is a company controlled by the group's key management personnel. The Foundation carries out various Corporate Social Responsibility (CSR) activities on behalf of Transcorp Power Limited. Tenoil Petroleum and Energy Services Tenoil Petroleum and Energy Services is a company controlled by the group's key management personnel. Tenoil disposed part of its interest in Transcorp Power Limited (TPL) to Transcorp Plc. Consideration for the disposal was used to reduce amount receivable from the counter-party as at date of disposal. The outstanding receivable balance as at balance sheet date is deemed recoverable. Nembe Creek Oil Company Limited Nembe Creek Oil Company Limited is a company controlled by the group's key management personnel. Other subsidiaries The Company enter into a Technical and Management services agreement with Transcorp Hotels Plc and Transcorp Power Limited. As stipulated in the signed agreement, the Company earns management fee of 5% of profit before tax of Transcorp Hotels Plc and Transcorp Power Limited. Other intercompany balances relates to payment made or received on behalf of the company's subsidiaries. b

Key management personnel Name Mr. Tony Elumelu, MFR Mr. Emmanuel N. Nnorom Olorogun Otega Emerhor, OON Mr. Kayode Fasola

Designation Chairman President/CEO Director Director

Name Mr. Stanley Inye Lawson Mr. Chibundu Edozie Alhaji Abdulquadir Jeli Bello

18

Designation Director Director Director