Oct 26, 2016 - for the period ended 30th September 2016. Note ... Summary of significant accounting policies. 5. 3 ....
UAC of Nigeria Plc Financial Statements for the period ended 30th September 2016
UAC of Nigeria Plc Index to the consolidated and Separate financial statements for the period ended 30th September 2016 Note
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
Page
Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statements of changes in equity Consolidated cash flow statements Notes to the consolidated financial statements General information Summary of significant accounting policies Segment analysis Other gains/(losses) Expenses by Nature and Function Net finance income/(cost) Taxation Dividend Earnings per share Property, plant and equipment Intangible assets Investment property Available for Sale Financial Assets Investments in associates and joint ventures Inventories Properties under construction Trade and other receivables Cash and cash equivalent Borrowings Trade and other payables Deferred revenue Dividend Payable Provisions Deferred Tax Share capital Reconciliation of profit before tax to cash generated from operations Related Party Transactions
1 2 3 4 5 5 5 6 7 7 8 8 9 9 10 11 12 13 13 14 14 15 16 16-17 18 18 18 19 20 21 21 22
UAC of Nigeria Plc Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Period ended 30th September 2016
Notes Continuing Operations Revenue Cost of sales Gross profit % of Revenue Other gains Selling and distribution expenses Administrative expenses Other Losses Operating profit before impairment
3
4 5 5 4(i)
3 months to September 2016 N'000
The Group 9 months to 3 months to 9 months to September September September 2016 2015 2015 N'000 N'000 N'000 Re-presented Re-presented
20,900,335 (16,588,779)
57,703,293 (45,227,575)
17,366,321 (13,702,697)
55,073,889 (42,884,386)
4,311,555 21% 1,314,381 (900,055) (2,009,506) 2,716,375
12,475,718 22% 1,779,758 (2,658,589) (5,551,766) 6,045,120
3,663,624 21% 421,360 (981,519) (1,651,310) (4,098) 1,448,058
12,189,503 22% 933,331 (2,793,675) (5,139,181) (4,158) 5,185,821
(473,000)
(473,000)
Impairment of UPDC Hotel's PPE
-
Operating profit after impairment
-
2,716,375
6,045,120
975,058
4,712,821
Finance income
6
360,626
988,675
326,079
1,013,207
Finance cost Net finance (cost) / income
6
(835,255) (474,629)
(1,828,972) (840,297)
(813,467) (487,388)
(2,208,008) (1,194,800)
122,410
1,092,601
226,490
1,431,815
2,364,156 (648,872)
6,297,424 (1,955,014)
714,160 (789,389)
4,949,836 (1,899,944)
1,715,284
4,342,410
(75,228)
3,049,892
Share of net profit of associates and joint venture using the equity method Profit before tax from continuing operations Income Tax Expense
14.3 7
Profit for the period PBT of Revenue % of % Revenue Profit attributable to: Equity holders of the parent Non controlling interests
11%
Total comprehensive income attributable to: Equity holders of the parent Non controlling interests Earnings per share from continuing and discontinued operations attributable to owners of the parent during the period (expressed in Naira per share): Basic Earnings Per Share From continuing operations From discontinued operations From profit for the period Diluted Earnings Per Share From continuing operations From discontinued operations From profit for the period
9 9
11% 8%
4%
9% 6%
1,004,560 710,724
2,543,143 1,799,267
(54,917) (20,312)
1,580,178 1,469,713
1,715,284
4,342,410
(75,229)
3,049,892
1,004,560 710,724 1,715,284
2,543,143 1,799,267 4,342,410
(54,917) (20,312) (75,229)
1,580,178 1,469,713 3,049,892
52
132 132
(3) (3)
132 132
(3) (3)
52
9 9
52 52
82 82 82 82
i.) In line with IFRS 5, Warm Spring Waters Nigeria Ltd has been re-consolidated as it no longer meets the IFRS criteria for classification as held-forsale.Comparative figures for 2015 were adjusted. ii.) For purpose of proper comparison, the 2015 Impairment of UPDC Plc’s N2.08 billion investment in UPDC Hotels Ltd has been updated to align with year-end audit treatment
1
UAC of Nigeria Plc Consolidated Statement of Financial Position As at 30th September 2016
Notes
The Group 30 Sep 16 31 Dec 15 31 Dec 14 N'000 N'000 N'000 Re-presented Re-presented
Assets Non-current assets Property, plant and equipment Intangible assets and goodwill Investment property Investments in associates and joint ventures
10 11 12 14
35,092,776 1,748,807 18,274,518 21,452,004
36,100,036 1,862,646 20,035,327 21,197,867
37,288,383 1,842,452 19,924,421 19,100,575
Available-for-sale financial assets Prepayment Deferred tax asset
13 17 24
19,308 13,402 174,431 76,775,246
19,308 10,789 231,652 79,457,625
12,312 25,032 202,610 78,395,786
Current assets Inventories Trade and other receivables Cash and Cash equivalents (excluding bank overdrafts)
15 17 18
27,296,550 17,509,831 13,093,846 57,900,227
25,328,868 14,656,437 9,212,399 49,197,703
27,855,738 16,001,084 8,108,053 51,964,875
134,675,473
128,655,328
130,360,660
19 24 21 23
5,751,564 5,038,725 78,707 170,501 11,039,498
8,125,644 5,048,083 15,751 133,600 13,323,078
7,737,406 5,568,609 214,085 132,065 13,652,166
20 7 19 22 21
18,506,007 4,483,721 21,440,276 3,408,765 252,737 48,091,505
15,035,800 4,749,821 17,522,548 3,574,697 307,361 41,190,227
14,119,869 4,481,335 20,557,739 2,379,061 92,759 41,630,763
59,131,003
54,513,304
55,282,929
960,432 3,934,536 28,575 (5,504) 40,292,699 45,210,738 30,333,731
960,432 3,934,536 28,575 (5,504) 39,670,420 44,588,460 29,553,564
960,432 3,934,536 28,575 (3,792) 40,048,438 44,968,190 30,109,541
75,544,470
74,142,024
75,077,731
134,675,473
128,655,328
130,360,660
Total assets Liabilities Non-current liabilities Borrowings Deferred tax liabilities Deferred revenue Provisions Current liabilities Trade and other payables Current income tax liabilities Bank overdrafts and current portion of borrowings Dividend payable Deferred revenue
Total liabilities Equity Ordinary share capital Share premium Contingency reserve Available-for-sale reserve Retained earnings Equity attributable to equity holders of the Company Non controlling interests
25 25 25
Total equity Total equity and liabilities
The financial statements and the notes on pages 5 to 22 were approved and authorised before issue by the board of directors on 26 October, 2016 and were signed on its behalf by: Mr Larry E. Ettah
GMD/CEOFRC/2013/IODN/00000002692
Mr. Abdul A. Bello
ED/CFO FRC/2013/ICAN/0000000724
The notes on pages 5 to 22 are an integral part of these financial statements. 2
UAC of Nigeria Plc Consolidated Statement of Changes in Equity for the period ended 30th September 2016 The Group Attributable to owners of the Company
Balance at 1 January 2016 Profit and loss Transactions with Equity holders Dividends Balance at 30 September 2016
Share Capital N'000 960,432 960,432
Share Premium N'000 3,934,536 -
Contingency reserve N'000 28,575
Available for sale Reserve N'000 (5,504)
-
3,934,536
28,575
(5,504)
Retained Earnings N'000 39,670,420 2,543,143 (1,920,864) 40,292,699
Total N'000 44,588,460
Non controlling Interest N'000 29,553,564
Total N'000 74,142,024
2,543,143
1,799,267
4,342,410
(1,920,864) 45,210,738
(1,019,101) 30,333,731
(2,939,965) 75,544,470
The Group Attributable to owners of the Company
Balance at 1 January 2015 Profit and loss Transactions with Equity holders Dividends Balance at 30 September 2015
Share Capital N'000 960,432 960,432
Share Premium N'000 3,934,536 3,934,536
Contingency reserve N'000 28,575 28,575
Available for Reserve N'000 (5,504) (5,504)
Retained Earnings N'000 41,451,756 1,580,178 (3,361,514) 39,670,420
N'000 46,369,795
Non controlling Interest N'000 30,340,978
Total N'000 76,710,774
1,580,178
1,469,713
3,049,892
Total
(3,361,514) 44,588,460
(2,257,127) 29,553,564
(5,618,641) 74,142,024 -
3
UAC of Nigeria Plc Consolidated statement of cash flow for the period ended 30th September 2016
Notes Cash flows from operating activities Cash generated from/(used in) operations Corporate tax paid VAT paid
26
The Group 30 Sep 16 30 Sep 15 N'000 N'000 6,710,038 (1,447,546) (95,338)
13,390,654 (2,539,338) (538,577)
Interest paid
(1,828,972)
(2,208,008)
Net cash flow generated from/(used in) operating activities
3,338,182
8,104,731
988,675 (36,978) (1,085,410) 435,342 (19,742) 1,780,550 10,000 (109,883) 1,962,555
1,013,207 (190,171) (1,372,912) 166,744 (562,375) 507,400 122,500 (315,607)
(1,019,101) (1,920,864) (2,374,079) 4,836,455 (477,589)
(2,257,127) (3,361,514) (1,212,770) 1,272,423 (5,558,989)
4,823,148 7,374,776
2,230,136 5,832,402
12,203,947
8,062,538
Cash flows from investing activities Interest received Purchase of Intangible assets Purchase of property, plant and equipment Proceeds from sale of property, plant and equipment Purchase of investment properties Proceeds from sale of investment properties Income Distribution from UPDC REIT Recovery of previously impaired loan Payment for additional shares acquired-Portland Paints Plc Net cash generated from investing activities Cash flows from financing activities Dividends paid to non controlling interests Dividends paid to Company shareholders Loan ( Repayments)/Addition Increase/(Decrease) in commercial papers Net cash flow used in financing activities Net increase/(decrease) in cash & cash equivalents Cash & cash equivalents at the beginning of the year Cash & cash equivalents at the end of the period after adjusting for bank overdraft
18(i)
4
UAC of Nigeria Plc NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1.
General information UAC of Nigeria Plc ('the Company') and its subsidiaries (together 'the Group') is a company incorporated in Nigeria. The Group is a diversified business with activities in the following principal sectors: Foods, Logistics, Real Estate and paints. The address of the registered office is 1-5, Odunlami Street, Lagos. The company is a public limited company, which is listed on the Nigerian Stock Exchange domiciled in Nigeria.
2.
Summary of significant accounting policies
2.1
Basis of preparation The financial statements have been prepared in accordance with IAS 34. The financial statements have been prepared on a historical cost basis except for investment property, held for trading and available for sale financial instruments which are carried at fair value.
2.2
Accounting Policies The accounting policies adopted are consistent with those for the year ended 31 December 2015.
2.3
Estimates The preparation of interim financial statements requires management to 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. In preparing these condensed interim financial statements, 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 for the year ended 31 December 2015.
2.4
Financial Risk Management The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. 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. This 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 company’s annual financial statements as at 31 December 2015. There have been no changes in the risk management structure since year end or in any risk management policy.
5
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 3. Segment Analysis The Group The chief operating decision-maker has been identified as the Executive Committee (Exco), made up of the executive directors of the company. The Exco reviews the Group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The Group has identified the following as segments: Food and Beverage - Made up of business units involved in the manufacturing and sales of food items, livestock feeds, bottled water, fruit juices, ice-cream and quick service restaurants. Paints - Made up of business units involved in the manufacturing and sales of paints products and other decoratives. Logistics - Made up of a business unit involved in rendering logistics and supply chain services including warehousing, transportation and redistribution services. Real Estate - Made up of a business unit involved in real estate development and management and owners of Golden Tulip Hotels, Festac, Lagos. Others - These are non-reportable segments made up of two medium size entities within the group involved in pension fund administration services and the corporate head office. The following measures are reviewed by Exco; with Profit Before Tax taken as the segment profit. - Revenue to third parties - Operating profit - Profit before tax - Property, plant and equipment - Net assets - EBIT Margin - Return On Equity
30 September 2016 Total Revenue Intergroup revenue Revenue to third parties
Food and Beverages N'000
Paints
Logistics
Real Estate
Others
Total
N'000
N'000
N'000
N'000
N'000
45,942,503 (1,070,994) 44,871,509
6,068,228 (15,594) 6,052,634
3,931,961 (519,934) 3,412,027
3,209,241 (104,346) 3,104,896
Operating profit
3,606,616
1,407,267
976,249
348,037
(293,047)
6,045,121
Profit before tax
2,858,009
1,430,446
1,118,336
132,953
757,679
6,297,425
Share of profit of associates and joint venture
-
-
-
782,544 (520,317) 262,227
1,092,601
-
59,934,478 (2,231,185) 57,703,293
1,092,601
Property, plant and equipment
17,085,386
1,232,957
3,634,687
12,339,427
800,319
35,092,776
Net assets
18,625,591
2,360,736
5,707,105
35,597,942
13,253,095
75,544,469
30 September 2015 Total Revenue Intergroup revenue Revenue to third parties Operating profit Impairment of UPDC Hotel's PPE Profit before tax
Food and Beverages N'000
Paints
Logistics
Real Estate
Other
Total
N'000
N'000
N'000
N'000
N'000
40,916,987 606,621 40,310,366
6,762,122 50,135 6,711,988
3,527,113 52,522 3,474,591
4,306,817 4,306,817
750,317 480,189 270,128
56,263,356 1,189,467 55,073,889
3,147,983
1,573,696
707,083
445,107
(688,048)
5,185,821
-
-
-
(473,000)
2,179,521
1,645,568
787,743
-
-
-
Property, plant and equipment
15,955,810
891,786
Net assets
18,231,786
2,391,965
Share of profit of associates and joint venture
(109,762)
-
(473,000)
446,765
4,949,836
1,431,815
-
1,431,815
3,534,206
13,232,489
2,485,745
36,100,037
4,693,857
34,475,210
14,349,206
74,142,025
Entity wide information Analysis of revenue by category: Sale of goods Revenue from services
Analysis of revenue by geographical location: Nigeria Ivory Coast
30 Sep 2016 N'000 54,029,039 3,674,253 57,703,293 30 Sep 2016 N'000 57,692,668 10,625 57,703,293
30 Sep 2015 N'000 51,599,298 3,474,591 55,073,889 30 Sep 2015 N'000 55,062,014 11,875 55,073,889
Concentration risk The group is not exposed to any concentration risk, as there is no single customer with a contribution to revenue of more than 10%. 6
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 4. Other Gains
Profit on sales of Property,Plant and Equipment Profit on sales of Investment Property Recovery of previously impaired loan Gains on government grant* Other trading income Total other Gains
The Group 30 Sep 2016 30 Sep 2015 N'000 N'000 176,462 10,238 749,848 10,000 122,500 179,771 178,248 663,677 622,345 1,779,758 933,331
*Gains on government grant
The government grant of N180 million (At September 2015 : N178 million) relates to government facilities received by two entities – Livestock Feeds PLC and Portland Paints and Products Nigeria PLC, at below-market rates of interest. The facilities are meant to assist in the procurement of certain items of plant and machinery. In both entities, the grants are recognised as deferred income and amortised to profit or loss on a systematic basis over the useful life of the asset in line with their respective accounting policies. 4(i). Other Losses
The Group 30 Sep 2016 30 Sep 2015 N'000 N'000
Loss on sales of Property,Plant and Equipment
-
(4,158)
Total other Losses
-
(4,158)
5 (a) . Expenses by nature
Changes in inventories of finished goods and work in progress Write off of inventories to net realisable value Personnel expenses Depreciation Amortisation of intangibles Impairment of Property,Plant and Equipment Allowance for receivables impairment Royalty fees Rents & Rates Electricity & power Vehicles repairs, maintenance & fueling Other repairs & maintenance Auditors' remuneration Information Technology Legal expenses Donations & Subscriptions Insurance Back duty Distribution expenses Marketing, Advertising & Communication Sundry office expenses
5(b). Expenses by function Analysed as: Cost of sales Selling and distribution expenses Administrative expenses
Personnel expenses include: Wages, salaries and other short term benefits for staff and managers Directors' emoluments Post employment benefits: - Defined contribution plans
The Group 30 Sep 2016 30 Sep 2015 N'000 N'000 25,449,775 28,629,425 7,150,345 7,227,797 5,583,384 5,910,865 2,178,455 2,348,533 65,329 50,159 465,552 52,292 69,289 81,275 99,368 818,600 1,056,343 637,135 932,307 139,594 233,339 227,143 65,169 108,432 450,288 1,728,519 683,368 2,617,189 53,437,930
812,882 1,012,226 555,925 871,570 150,968 210,085 113,406 62,263 152,848 124,426 1,708,939 744,333 2,676,034 50,817,241
45,227,575 2,658,589 5,551,766 53,437,930
42,884,386 2,793,675 5,139,181 50,817,241
The Group 30 Sep 2016 30 Sep 2015 N'000 N'000 5,170,451 237,538
5,519,729 215,156
175,395 5,583,384
175,980 5,910,865 7
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 6. Net finance income/(cost) The Group 30 Sep 2016 30 Sep 2015 N'000 N'000 Interest income on short-term bank deposits Finance Income Interest on bank loans Interest on bank overdraft Interest on government grant Finance Costs Net finance (cost) / income
7. Taxation
Current tax Nigeria corporation tax charge for the year Education tax Total current tax charge
988,675 988,675
1,013,207 1,013,207
1,517,050 119,207 192,715 1,828,972 (840,297)
1,681,729 364,377 161,901 2,208,008 (1,194,800)
The Group 2016 2015 N'000 N'000 1,955,014 1,955,014
1,898,589 1,354 1,899,944
Deferred tax Temporary differences, origination and reversal
-
-
Total deferred tax
-
-
1,955,014
1,899,944
Income tax expense
Nigeria corporation tax is calculated at 30% (2015: 30%) of the taxable assessable profit for the period. The tax charge for the period can be reconciled to the profit per the consolidated income statement as follows: The Group 2016 2015 N'000 N'000 Profit before tax Tax at the Nigeria corporation tax rate of 30% (2015: 30%) Deferred tax relating to prior periods Tax charge for the year
6,297,424
4,949,836
1,889,227 65,787
1,484,951 414,993
1,955,014
1,899,944
The tax (charge)/credit relating to components of other comprehensive income is as follows: Reconciliation of the tax payable account
Opening balance Prior year under/(over) provision Tax expense Paid during the period
The Group 2016 2015 N'000 4,749,821 4,974,223 65,787 414,993 1,955,014 1,899,944 (2,286,901) (2,539,338) 4,483,721 4,749,821
8
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 8. Dividend The Company 2016 N'000
Amounts recognised as distributions to ordinary shareholders in the year comprise: Final dividend for the year ended 31 December 2015 paid in 2016 (2015: Final 2014 dividend paid in 2015) Weighted average number of shares Dividends per share (kobo per share)
2015 N'000
1,920,864
3,361,512
1,920,864,000 100
1,920,864,000 175
9. Earnings Per Share (a) Basic Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year. The Group 2016 2015 N'000 N'000
The Company 2016 2015 N'000 N'000
Profit attributable to ordinary equity shareholders: Profit from continuing operations Profit from discontinued operations
2,543,143 2,543,143
1,580,178 1,580,178
Basic earnings per share From continuing operations From discontinued operations From profit for the period
132 132
-
Dilluted earnings per share From continuing operations From discontinued operations From profit for the period
132 132
-
Basic weighted average and Diluted weighted average number of shares (000)
1,810,568 1,810,568
82
2,635,613 2,635,613
82
137
94
82
137
94 -
82
137
94
94
137
The Company 2016 2015 Number Number 1,920,864 1,920,864
(b) Diluted Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The group has no dilutive instruments. 9
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 10. Property, plant and equipment The Group
At 1 January 2015 Additions Disposals Transfers Write Off Reclassifications Other reclassifications At 31 December 2015
Leasehold land and buildings N'000 24,339,363 83,516 743,408 25,166,287
At 1 January 2016 Additions Disposals Transfers Write Off* Reclassifications Other reclassifications** Adjustments At 30 September 2016
25,166,287 111,275 (72,303) 206,628 712 25,412,600
Cost:
Plant and Computer Machinery Equipment N'000 N'000 18,223,752 539,954 223,173 85,929 (455,805) (17,599) 3,238 (475) (1,413) (1,609) (54,993) 373,198 285 533 17,938,237 979,930
Motor Vehicles N'000 4,786,976 288,011 (768,833) (2,169) (206) 201,304 5,510 4,510,594
Office Capital Work Furniture in progress N'000 N'000 2,753,307 2,616,027 80,955 1,047,110 (90,420) (3,735) 8,019 (8,397) (86,139) (1,176,779) 210 2,665,931 2,474,226 2,474,226 360,368 (527,759) (93,807) 2,213,029
Total N'000 53,259,380 1,808,693 (1,336,392) 216 (3,228) 6,537 53,735,206
17,938,237 220,903 (334,389) (20,002) 240,865 48,668 (6,011) 18,088,271
979,930 69,929 (2,129) (154) (5,217) 8,474 1,050,834
4,510,594 271,504 (533,802) (10,705) 70,875 4,308,466
2,665,931 51,431 (30,636) (44) (14,449) 916 15,576 2,688,725
53,735,206 1,085,410 (973,258) (10,902) (39,667) (28,852) (6,011) 53,761,924
2,762,013 365,122
7,483,936 1,125,741
343,042 85,430
3,349,759 473,022
2,046,952 299,218
-
15,985,701 2,348,533
Impairment charge Disposals Transfers Write Off Reclassifications Other reclassifications At 31 December 2015
453,173 194,474 (863) 3,773,918
37,233 (449,359) (268,226) 77 7,929,402
12 (16,641) (474) (24) 210,394 433 622,173
117 (651,596) (2,081) (21) (10,686) 2,468 3,160,981
7,806 (79,494) (125,955) 171 2,148,697
-
498,341 (1,197,090) (2,555) (45) 2,286 17,635,171
At 1 January 2016 Charge for the year Disposals Transfers Write Off* At 30 September 2016
3,773,918 436,248 (16,214) 4,193,951
7,929,402 970,869 (234,594) (17,587) 8,648,089
622,173 101,946 (1,858) (297) (5,213) 716,751
3,160,981 305,819 (559,594) (22,476) 2,884,731
2,148,697 114,686 (32,272) (5,486) 2,225,626
-
Net book values: At 30 September 2016
21,218,648
9,440,182
334,083
1,423,735
463,099
2,213,029
35,092,777
At 31 December 2015
21,392,370
10,008,835
357,757
1,349,612
517,234
2,474,226
36,100,036
Accumulated depreciation and impairment At 1 January 2015 Charge for the year
-
17,635,171 1,929,568 (844,531) (22,773) (28,286) 18,669,148
*Assets written off include fully depreciated assets no longer in use and damaged assets identified during the period. **Other reclassifications are assets that were transfered to other class of asset due to change in the use.Also, cost relating to SAP ERP implementation accumulated in PPE was transferred to intangible asset during the period. The non-current assets are not pledged as security by the group.
10
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 11. Intangible assets and goodwill
Cost
Goodwill N'000
Group Brands & Trade Marks Software N'000 N'000
Total N'000
At 1 January 2015 Additions - externally acquired during the year Transfer from PPE At 31 December 2015
548,747 548,747
1,070,185 1,070,185
905,788 174,077 (7,362) 1,072,503
2,524,720 174,077 (7,362) 2,691,435
At 1 January 2016 Additions - externally acquired during the year Transfer from PPE At 30 September 2016
548,747 548,747
1,070,185 1,070,185
1,072,503 36,978 568 1,110,049
2,691,435 36,978 568 2,728,981
Accumulated amortisation and impairment At 31 December 2015 Amortisation for the year At 31 December 2015
-
288,439 288,439
393,828 146,521 540,349
682,268 146,521 828,788
At 1 January 2016
-
288,439
540,349
828,788
Amortisation for the period At 30 September 2016
-
288,439
151,386 691,735
151,386 980,174
Net book values At 30 September 2016
548,747
781,746
418,314
1,748,807
At 31 December 2015
548,747
781,746
532,154
1,862,646
11
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 12. Investment property The Group Freehold building N'000
Fair value At 1 January 2015 Additions during the year Reclassification from property stocks held as inventories (Note 13) Disposals
708,898 -
Net gain from fair value adjustments on investment property At 31 December 2015 At 1 January 2016 Additions during the period Disposals At 30 September 2016
19,215,524 54,377
19,924,422 54,377
260,000 (276,365)
260,000 (276,365)
11,837 720,735
61,056 19,314,592
72,893 20,035,327
720,735 720,735
19,314,592 19,742 (1,780,550) 17,553,783
20,035,327 19,742 (1,780,550) 18,274,518
-
Fair value of investment properties is categorised as follows:
30-Sep-16 External valuation
The Group Freehold building N'000 720,735 720,735
Fair value of investment properties is categorised as follows:
31-Dec-15 External valuation
Leasehold building N'000
Total investment properties N'000
Leasehold building N'000 17,553,783 17,553,783
Total investment properties N'000 18,274,518 18,274,518
The Group Freehold building N'000 720,735 720,735
Leasehold building N'000 19,314,592 19,314,592
Total investment properties N'000 20,035,327 20,035,327
The Group’s investment properties were revalued at 31 December 2015 by an independent professionally qualified valuer who holds recognised relevant professional qualifications and has recent experience in the locations and categories of the investment properties valued. The latest valuation was performed by the external Surveyor- Messrs Steve Akhigbemidu & Co. (FRC/2013/NIESV/000000001442).
12
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 13. Available for Sale financial assets The details and carrying amount of available for sale financial assets are as follows:
Opening Balance as at 1 January Fair value Loss on available-for-sale financial assets
The Group 2016 N'000 19,308
2015 N'000 22,312
19,308
(3,004) 19,308
The Company 2016 2015 N'000 N'000 1,001 1,001 1,001
1,001
Available for sale financial assets represent investment in quoted shares in the following Companies: First Bank of Nigeria Ltd, United Bank for Africa Plc, Zenith Bank Plc, AFRIPRUD and UBA Capital Plc. 14. Investments in associates and equity accounted joint ventures The Group 2016 N'000 Associate UPDC's Investment in UPDC REIT Joint Ventures UPDC Metro City Limited First Festival Mall Limited James Pinnock JV Transit Village Dev. Co. Ltd* At 30 September
2015 N'000
The Company 2016 2015 N'000 N'000
19,363,936
19,109,799
-
-
244,170 234,427 1,535,865 73,606 21,452,004
244,170 234,427 1,535,865 73,606 21,197,867
-
-
14.1 Investments in Associate Investments in Associate above represents UPDC's investment in REIT as at 30th September 2016. The associate as stated above have share capital consisting solely of ordinary shares, which are directly held by the group. 14.2 Investments in Joint Ventures All joint ventures are primarily set up for projects. The investments in Joint Venture were measured at cost. * Transit Village JV is not yet operational. The company's investment represents the seed capital contributed towards acquiring the land for the project.
13
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 14.3 Share of net profit of Associates using the equity method
Share of profit in REIT
The Group 2016 2015 N'000 N'000 1,092,601 1,431,815
UPDC diversified its portfolio in 2013 through the floating of the UPDC Real Estate Investment Trust (REIT) at a capital value of N26.7 billion listed on the Nigerian Stock Exchange (NSE) on 1 July, 2013. Five (5) major investment properties were transferred to the UPDC REIT namely Abebe Court Ikoyi, Victoria Mall Plaza (VMP), residential and office block, Victoria Island, UACN commercial complex Abuja and MDS warehouse at Aba. The REIT's income comprises of rental income from these investment properties and interest income from investment in money market instruments and other real estate's related assets. UPDC held 61.5% of the real fund at 31 December 2015.The share of profit recognised in the group financial statements relates to UPDC's share of the REIT's profit for the Quarter ended 30 September 2016. The revaluation gain is not distributable until the affected investment properties are disposed. 15. Inventories
Raw materials and consumables Technical stocks and spares Properties under construction (note 16) Finished goods and goods for resale
The Group 2016 2015 N'000 N'000 9,667,842 10,452,015 1,316,589 1,232,933 14,600,366 12,166,714 1,711,754 1,477,206 27,296,550 25,328,867
All inventory above are carried at cost at all the periods reported. The Group During the period ended 30 September 2016 N7.15 million (Sep 2015: N7.23 Million) was charged to the income statement for damages, obsolescence and write downs. 16. Properties under construction included in inventories
Cost/Valuation Balance 1 January Additions Disposals Reclassification as investment properties (Note 12) Provision for Maitama Land Unrealised gain on transfer of asset Balance 30 September
The Group 2016 2015 N'000 N'000 12,166,714 9,489,183 4,037,312 5,896,842 (1,632,207) (3,178,378) (260,000) (5,423) 28,548 224,489 14,600,366 12,166,714
14
17. Trade and other receivables Receivables due within one year Trade receivables Less: allowance for impairment of trade receivables Net trade receivables Other receivables Advance payments WHT receivable Prepayments - staff grants Prepayments- Other
The Group 2016 2015 N'000 N'000 4,965,461 5,397,726 (1,807,356) (1,755,065) 3,158,105 3,642,661 10,830,408 7,666,104 1,181,277 1,063,027 538,752 796,188 293,324 271,983 1,507,965 1,216,474 17,509,831 14,656,437
Trade receivables are non-interest bearing and are generally due for settlement within 30 days and therefore are all classified as current.They are amounts due from customers for goods sold or services performed in the ordinary course of business. Other receivables are amounts that generally arise from transactions outside the usual operating activities of the group. Interest may be charged at commercial rates where the terms of repayment exceed six months. Collateral is not normally obtained. If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are presented as non-current assets.
Advance payments are mobilisation fees made to contractors for the supply of goods and services.
Prepayments - Current Prepayments - Non-current Total prepayments
The Group 2016 2015 N'000 N'000 1,801,289 1,488,457 13,402 10,789 1,814,691 1,499,246
The balance on prepayment represent rent and insurance paid in advance which will be charged against earnings in the periods they relate to.
Movements in the allowance for impairment of trade receivables are as follows:
At 1 January Allowance for receivables impairment Unused amounts reversed 30 September
The Group 2016 2015 N'000 N'000 1,750,181 1,680,892 52,292 69,289 1,802,472 1,750,181
15
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 18. Cash and cash equivalents
Cash at bank and in hand Short-term deposits Cash and short-term deposits
The Group 2016 2015 N'000 N'000 1,145,000 1,407,997 11,948,846 7,804,402 13,093,846 9,212,399
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. In 2015, Securities and Exchange Commission directed all Registrars to return all unclaimed dividends, which have been in their custody for fifteen months and above, to the paying companies.Included in the cash and short-term deposits is N2.1b which represents unclaimed dividends received from Africa Prudential Registrars as at September 2016. (i) Reconciliation to statement of cash flow The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of the financial year as follows:
Cash and short-term deposits Bank Overdrafts (Note 19) Balances per statement of cash flow
The Group 2016 2015 N'000 N'000 13,093,846 9,212,399 (889,899) (1,808,626) 12,203,947 7,403,773
19. Borrowings The Group 2016 2015 N'000 N'000 Current borrowings Overdrafts due within one year Commercial papers due within one year Non-current borrowings Loans due after one year (i) Total borrowings
889,899 20,550,377 21,440,276
1,808,626 15,713,922 17,522,548
5,751,564
8,125,644
27,191,840
25,648,191
16
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 19. Borrowings (Continued)
The borrowings are repayable as follows:
Within one year Between one to two years Between two to three years More than three years
The Group 2016 2015 N'000 N'000 21,440,276 17,522,548 5,684,656 7,888,237 66,908 237,407 27,191,840 25,648,191
(i) Loans due after one year Group
Amount due 2016 2015
Details of the loan maturities due after one year are as follows: Facility Grand Cereals Ltd - Stanbic IBTC PPPNP-Bank of Industry
Term Loan: UPDC - Guaranty Trust Bank UPDC - First Securities Discount House
N'000
N'000
1,362,963 66,908 1,429,871
1,592,593 133,811 1,726,404
1,988,360 2,333,333 5,751,564
2,976,720 3,422,519 8,125,644
The average interest rate for facilities from local banks during the period was 12.6% (2015 was 15.8%).
17
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 20. Trade and other payables
Trade payables Provision for employee leave Other payables Income received in advance Accruals Total
The Group 2016 2015 N'000 N'000 4,991,212 5,985,972 4,991,212 5,985,972 25,914 35,414 7,012,188 4,244,798 1,261,672 1,026,462 5,215,021 3,743,154 18,506,007 15,035,800
Terms and conditions of the above financial liabilities Trade payables are non-interest bearing and are normally settled between 30 and 60-day terms. Other payables and accruals are non-interest bearing and have an average term of six months. Income received in advance are deposits or down-payments received from customers for products. 21. Deferred revenue
At 1 January Deferred during the period Released to the statement of profit or loss At 30 September Current Non-current
The Group 2016 2015 N'000 N'000 323,112 306,844 448,456 717,446 (440,123) (701,178) 331,444 323,112 252,737 78,707
307,361 15,751
Deferred revenue are rentals received in advance which are recognized in the statement of profit or loss when earned. The Group and Company lease a number of premises. These are subject to review dates ranging from 1 year to 2 years. 22. Dividend payable
As at 1 January Dividend declared Dividend paid during the year Reclassification to Other payables Unclaimed dividend refunded As at 30 September
The Group 2016 2015 N'000 N'000 3,574,697 2,379,061 1,920,864 3,361,512 (1,863,288) (3,242,072) (1,590,277) 1,366,768 1,076,196 3,408,765 3,574,697
18
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 23. Provisions
Group At 1 January 2016 Unwinding of discount Arising during the period 30 September 2016 Current Non-current At 1 January 2015 Unwinding of discount Derecorgnised Liabilities Arising during the year 31 December 2015 Current Non-current
Contingent Liabilities N'000 50,000 50,000
N'000 60,023 36,900 96,923
Decommisioning liability N'000 23,578 23,578
Total N'000 133,601 36,900 170,501
50,000
96,923
23,578
170,501
50,000 50,000
57,947 2,076 60,023
24,118 3,040 (3,580) 23,578
132,065 3,040 (3,580) 2,076 133,601
50,000
60,023
23,578
133,601
Legal claim
Contingent liabilities The contingent liability arose from the fair value of assets acquired, liabilities assumed and the non-controlling interest of Portland Paints Plc at the acquisition date. Legal claim In June 2014, an award was made against the group in respect of a legal claim made by a claimant. The award requires a payment of $136,805 rent and service charges to the claimant. A provision has been recognised for this amount. However, we have applied for stay of execution of the award and also filed an application for the setting aside of the award for being null and void. No payment has been made to the claimant pending outcome of the stay of execution. The Lagos high court is currently reviewing the case. Decommisioning liability A subsidiary of the company (UAC Restaurants Limited) has a number of leasehold properties converted to Restaurants, which are required by agreements to be restored back to their original condition upon the expiry of the leases. Decommissioning Liability relates to the provisions made for decommissioning costs relating to these properties.Management has applied its best judgement in determining the amount of the liability that will be incurred at the end of each lease term. Variables such as inflation rate and currency exchange rates amongst others, were considered in this estimate. The discount rate for the unwinding of the discount on the liability was determined using the "Capital Asset Pricing Model".
19
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 24. Deferred Tax
The analysis of deferred tax assets and deferred tax liabilities is as follows:
The Group 2016 2015 N'000 N'000
Deferred tax assets: – Deferred tax asset to be recovered after more than 12 months Deferred tax liabilities: – Deferred tax liability to be recovered after more than 12 months Deferred tax (liabilities) / assets The gross movement on the deferred income tax account is as follows:
174,431 174,431
231,652 231,652
(5,038,725) (4,864,294)
(5,048,083) (4,816,431)
Group 2016 N'000 (4,816,431) (47,863) (4,864,294)
At 1 January Adjustment in respect of prior year (Charged)/credited to profit or loss At 30 September
2015 N'000 (4,906,126) (60,910) 150,606 (4,816,431)
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction is as follows: The Group PPE
Investment properties
Provisions (i)
Deferred tax liabilities At 1 January 2015 Charged/(credited) to profit or loss At 31 December 2015 At 1 January 2016 Charged to the income statement At 30 September 2016
N'000 3,922,881 252,263 4,175,144 4,175,144 (9,357) 4,165,787
N'000 2,088,328 (174,108)
N'000 (444,653) (478,096)
Finance leases
Temporary differences on revenue recognition N'000 N'000 (18,533) (100,000) -
1,914,220
(922,748)
(18,533)
(100,000)
1,914,220 -
(922,748) -
(18,533) -
(100,000) -
1,914,220
(922,748)
(18,533)
(100,000)
Total
N'000 5,448,023 (399,941) 5,048,083 5,048,083 (9,357) 5,038,725
(i) Provisions relate to impairment of financial instruments, write down of inventories to net realisable value and allowances.
20
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 25. Share Capital Group and Company 2016
2015
Number 000 Authorised: Ordinary Shares of 50k each Preference Shares of 50k each Total authorised share capital Issued and fully paid: Ordinary shares of 50k each Total called up share capital
Amount N'000
Number 000
Amount N'000
3,000,000 400,000 3,400,000
1,500,000 200,000 1,700,000
2,000,000 2,000,000
1,000,000 1,000,000
1,920,864 1,920,864
960,432 960,432
1,920,864 1,920,864
960,432 960,432
Movements during the period:
At 31 December 2015 Capitalised during the period At 30 September 2016
Group and Company Number of Ordinary shares shares 000 =N='000 1,920,864 960,432 1,920,864 960,432
Nature and purpose of Other Reserves Share Premium Section 120.2 of Companies and Allied Matters Act requires that where a company issues shares at premium (i.e. above the par value), the value of the premium should be transferred to share premium. The Share premium is to be capitalised and issued as scrips as approved by shareholders from time to time. Contingency Reserve The contingency reserve covers an appropriation of surplus or retained earnings that may or may not be funded, indicating a reservation against a specific or general contingency. The contingency reserve represents the transfer to statutory reserve of 12.5% of the profit after tax of UNICO CPFA Limited in line with section 69 of the Pension Reform Act 2004 (2014 as amended). 26. Reconciliation of profit before tax to cash generated from operations
Profit before tax Adjustment for net finance (income)/costs Operating profit Amortisation of intangible assets Share of associate's profit Depreciation Impairment charge on PPE Profit or Loss on sale of tangible PPE Profit or Loss on sale of Investment Properties Operating cash flows before movements in working capital Movements in working capital: Inventories Trade and other receivables Trade and other payables Net cash from/(used in) operations - continuing operations Trade and other receivables Trade and other payables Net cash from/(used in) operations - discontinued operations Net cash from/(used in) operations
Group 2016 N'000 6,297,424 840,297 7,137,721 151,386 (1,092,601) 1,929,568 (176,462) (749,848) 7,199,766
2015 N'000 4,949,836 1,194,800 6,144,636 140,702 (1,431,815) 1,964,225 465,552 (6,080) 202,728 7,479,949
(1,967,683) (2,853,394) 4,251,813 6,667,403
2,689,618 1,885,011 643,473 12,698,051
65,135 (22,500)
803,000 (110,398)
42,635
692,603
6,710,038
13,390,654 21
UAC of Nigeria Plc Notes to the Consolidated financial statements for the period ended 30th September 2016 27. Related party transactions The Company
The company's related parties consist of companies in whom the company has shareholding and similar interests (it's subsidiaries, associates & joint venture partners), their key management personnel and their close family members, the key management personnel of the company and their close family members and all other entities that are directly or indirectly controlled by the company. The following transactions were carried out with the subsidiaries: (a) Sales of goods and services The Company has commercial services agreements with its subsidiaries for support services. Income from commercial services fees( representing 0.75-1% of turnover of the subsidiaries) N490 million (2015: N464 million). This has been included in the revenue of the Company.
UACN Property Development Co. Plc Grand Cereals Limited Chemical & Allied Products Plc Warm Spring Waters Nigeria Limited UAC Foods Ltd UNICO Closed PFA Ltd MDS Logistics Ltd Portland Paints & Products Plc Livestock Feeds Plc UAC Restaurants Ltd
2016 N'000 21,502 184,938 47,779 3,723 120,253 1,255 20,302 13,582 76,093 489,427
2015 N'000 30,834 162,500 50,957 4,715 115,144 1,359 17,993 16,602 63,487 463,591
2016 N'000 3,844,534 13,608 1,763,634 15,554 2,297 42,453 510,453 128,045 18,902 81,630 6,421,109
2015 N'000 2,017,008 (8,982) 3,849,603 6,172 14,435 64,996 409,669 1,017,949 58,556 28,192 7,457,597
(b) Period-end net balances arising from sales/purchases of goods/services Receivable: UACN Property Development Co. Plc Chemical & Allied Products Plc Grand Cereals Limited Warm Spring Waters Nigeria Limited UNICO CPFA Ltd UAC Restaurants Limited Portland Paints Plc Livestock Feeds Plc MDS Logistics Plc UAC Foods Ltd
All trading balances will be settled in cash. There were no provisions for doubtful related party receivables as at 30 September 2016 (2015: nil) and no charges to the profit or loss in respect of doubtful related party receivables. Intra-group and other related party transactions are carried out at normal commercial terms and conditions.
22
