Sep 30, 2016 - The accounting policies adopted in the preparation of the interim condensed financial statements are cons
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)
Balance at 30 September 2015
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
Balance at 30 September 2016
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
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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016
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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016
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
Plant & Machinery N'000
Furniture & Fittings N'000
Computer & Office Equipments 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
Plant & Machinery N'000
Furniture & Fittings N'000
Computer & Office Equipments 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)
Balance as at 30 September 2016
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)
Balance as at 30 September 2016
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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 7
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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016
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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 15
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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 19
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
-
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 24
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
Company 30 September 2016 30 September 2015
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
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 27
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
Company 30 September 2016 30 September 2015
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) -
Transnational Corporation of Nigeria Plc Notes to the Financial Statements For the nine months ended 30 September 2016 31
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