Jun 30, 2017 - UACN PROPERTY DEVELOPMENT COMPANY PLC .... The summary of significant accounting policies and notes on pa
UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH JUNE, 2017
T ABLE OF CONT ENT
PAGE
Consolidated statement of comprehensive income
1
Consolidated statement of financial position
2
Consolidated statement of changes in equity
3
Consolidated statement of cashflows
4
Notes to the consolidated financial statements
5 - 15
`
UACN PROPERTY DEVELOPMENT COMPANY PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30TH JUNE 2017 T he Group Notes
Rev enue Cost of sales
3 5
3 m onths ended 30/06/17 N'000 1 ,01 1 ,87 0 (944,993)
Gross profit Gain/(Loss) on disposal of inv estment properties Selling and distribution ex penses Administrativ e ex penses Other operating income Other Losses
5 5 4i 4iii
Operating (loss)/ profit Finance income Finance cost
6 6
Net finance cost Share of profit of associates Share of Loss of Joint Ventures
3 m onths ended 30/06/16 N'000 1 ,063,07 9 (631 ,025)
6 m onths ended 30/06/16 N'000 1 ,7 46,569 (1 ,1 97 ,385)
66,87 7
248,51 8
432,054
549,1 84
481 ,433
481 ,433
(30,000)
(29,000)
(25,662) (27 7 ,321 ) 283,586 (1 1 0,606)
(56,800) (564,67 5) 305,286 (1 1 0,606)
(39,922) (426,07 1 ) 5,7 86 -
(7 8,1 27 ) (7 25,27 2) 7 0,322 -
41 8,307
303,1 56
(58,1 53)
(21 2,893)
1 07 ,339 (1 ,537 ,960)
301 ,91 8 (3,054,828)
1 59,37 7 (1 59,639)
285,206 (920,260)
(1 ,430,621 )
(2,7 52,91 0)
(261 )
(635,054)
250,1 93 (1 06,590)
642,857 (21 3,1 7 9)
305,949 -
97 0,1 91 -
(868,7 10)
(2,020,07 6)
247 ,535
122,244
(2,07 1 )
(43,307 )
(87 0,7 81)
(2,063,383)
4ii
(Loss)/ Profit before tax ation Tax ation
6 m onths ended 30/06/17 N'000 2,985,928 (2,7 37 ,409)
7
(Loss)/ Profit for the period Other Comprehensiv e income
-
T otal com prehensiv e incom e
-
(85,51 2)
(87 ,97 0)
162,022
34,27 5
-
-
(87 0,7 81 )
(2,063,383)
1 62,022
34,27 5
(867 ,425) (3,356)
(2,055,1 05) (8,27 8)
1 7 1 ,564 (9,541 )
51 ,1 08 (1 6,833)
(87 0,7 81 )
(2,063,383)
1 62,022
34,27 5
(867 ,425)
(2,055,1 05)
1 7 1 ,564
51 ,1 08
(3,356)
(8,27 8)
(87 0,7 81 )
(2,063,383)
1 62,022
34,27 5
(867 ,425)
(2,055,1 05)
1 7 1 ,564
51 ,1 08
(50) (50)
(1 20) (1 20)
10 10
3 3
Profit attributable to: Equity holders of the parent Non controlling interest T otal com prehensiv e incom e attributable to: Equity holders of the parent Non controlling interests
Earnings per share for profit attributable to the equity holders of the group Basic EPS (Kobo) Diluted EPS (Kobo)
8 8
The notes on pages 5 to 1 5 are an integral part of these consolidated financial statements.
1
(9,541 )
(1 6,833)
UACN PROPERTY DEVELOPMENT COMPANY PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30TH JUNE 2017 T h e Grou p Notes
30 Ju n e 2017
31 Dec . 2016
N'000
N'000
A ssets Non -c u rren t assets Property , plant and equipment Intangible assets Inv estment properties
9 10 11
1 2,07 4,7 20 49,869 1 5 ,65 9,006
1 2,246,244 5 1 ,403 1 6,65 4,320
Inv estments in joint v entures Inv estments in assoc iates A v ailable-for-sale financ ial assets Inv estments in subsidiaries
12 12 13 14
268,1 09 1 9,21 4,989 1 0,000 -
481 ,289 1 9,21 4,990 1 0,000 -
47 ,27 6,693
48,65 8,246
1 1 ,5 7 9,943 9,7 64,1 7 3 35 4,898
1 2,868,001 9,288,37 9 89,1 1 1
Cu rren t assets Inv entories Trade and other rec eiv ables Cash at bank and in hand
15 16 17
T otal assets L iabilities Non -c u rren t liabilities Interest bearing Loans and Borrowings Deferred tax ation liabilities Deferred rev enue
18 22
21 ,699,01 3
22,245 ,490
68,97 5 ,7 07
7 0,903,7 36
2,833,335 7 5 ,1 94 4,245
4,000,000 7 2,5 37 4,600
2,91 2,7 7 4
4,0 7 7 ,1 37
1 3,7 1 8,1 32 7 7 5 ,826 1 9,039,985 35 9,688 208,5 7 1
1 2,934,264 7 32,5 1 9 1 8,607 ,800 307 ,7 67 220,1 36
34,1 0 2,20 2
32,80 2,486
37 ,014,97 6
36,87 9,623
85 9,37 5 3,943,27 3 27 ,31 6,649
85 9,37 5 3,943,27 3 29,37 1 ,7 5 4
32,1 1 9,297
34,1 7 4,401
Cu rren t liabilities Trade and other pay ables Current inc ome tax liabilities Interest bearing Loans and Borrowings Div idend Pay able Deferred rev enue
19 18 20
T otal liabilities Equ ity Share c apital Share premium Retained earnings Equ ity attribu table to equ ity h olders of th e Com pan y Non c on trollin g in terest T otal equ ity T otal equ ity an d liabilities
(1 5 8,5 65 )
(1 5 0,287 )
31,960,7 31
34,024,115
68,97 5 ,7 07
7 0,903,7 36
Th e fina ncia l sta tem ents on pa ges 1 to 4 w er e a ppr ov ed a nd a u th or ised for issu e by th e boa r d of dir ector s on 2 5 Ju ly 2 01 7 a nd w er e signed on its beh a lf by :
A deniun O. Taiwo FRC/201 3/ICA N/00000007 23
Hakeem D. Ogunniran FRC/201 3/ICSA N/00000001 7 23
The summary of signific ant ac c ounting polic ies and notes on pages 5 to 1 5 are an integral part of these financ ial statements.
2
UACN PROPERTY DEVELOPMENT COMPANY PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 30TH JUNE 2017 THE GROUP Attributable to owners of the Company
Balance at 1 January 2016 Profit for the period Dividends Balance at 30 June 2016 Balance at 1 January 2017 Loss for the period Dividends Balance at 30 June 2017
Share Capital N'000 859,375 -
Share Premium N'000 3,943,273 -
Retained Earnings N'000 30,892,525 51,108 -
Total N'000 35,695,172 51,108 -
Non Controlling interest N'000 (121,003) (16,833) -
Total N'000 35,574,169 34,275 -
859,375
3,943,273
30,943,633
35,746,280
(137,836)
35,608,444
859,375 -
3,943,273 -
29,371,754 (2,055,105) -
34,174,401 (2,055,105) -
(150,287) (8,278) -
34,024,114 (2,063,383) -
859,375
3,943,273
27,316,649
32,119,296
(158,565)
31,960,731
The summary of significant accounting policies and notes on pages 5 to 15 are an integral part of these financial statements.
3
UACN PROPERTY DEVELOPMENT COMPANY PLC CONSOLIDATED STATEMENT OF CASH FLOWS AS AT 30TH JUNE 2017 The Group 2017
2016
June Cash flow from operating activities (Note 21)
=N='000
June =N='000
1,696,428
(2,222,905)
Tax paid
-
(51,038)
VAT paid
(29,258)
-
Net Cash inflow from operating activities
1,667,170
(2,273,943)
Cash flow from investing activities Proceeds from sale of investment property Purchase of property, plant & equipment Purchase of intangible asset
1,482,333 (27,638) (6,010)
Proceeds from sale of property, plant and equipment Purchase of investment properties
50 (5,586)
Income Distribution from UPDC REIT Interest received Net cash flow from investing activities
716,000 (60,903) (4,837) 91,899 (15,539)
642,857
970,191
301,918 2,387,924
285,206 1,982,018
145,179
16,224,056
Cash flow from financing activities Proceeds from borrowings Repayment of borrowings Interest paid Net cash flow from financing activities
(1,166,665)
(14,526,553)
(3,054,828)
(920,260)
(4,076,314)
Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period (Note 17)
(21,220) (863,383) (884,602)
777,242 485,316 (1,148,517) (663,200)
The statement of accounting policies and the notes on pages 5 to 15 form an integral part of these financial statements 4 (884,601)
UACN PROPERTY DEVELOPMENT COMPANY PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT FOR THE PERIOD ENDED 30TH JUNE 2017 1.
General information UAC Property Development Company Plc ('the Company') and its subsidiaries (together 'the Group') is a company incorporated in the Nigeria. The Group has business with activities in the following principal sectors: real estate and hotel management. The address of the registered office is 1-5 Odunlami Street, Lagos. The company is a public limited company and is listed on the Nigerian Stock Exchange.
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. (All amounts are in Naira thousands unless otherwise stated) 2.2 Accounting Policies The accounting policies adopted are consistent with those for the year ended 31 December, 2016. 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 2016.
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 2016. There have been no changes in the risk management structure since year end or in any risk management policy.
5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3. Segment Analysis The chief operating decision-maker has been identified as the Executive Committee (Exco). Exco reviews the company's internal reporting in order to assess performance and allocate resources. Management has identified the following as operating and geographical segments. Nigeria is the Company's primary geographical segment as the operations of the Company are entirely carried out in Nigeria. As at June 30, 2017, UPDC Plc operations comprised two business segments namely: Property development, sales & management and Hospitality services. Property development, sales & management - UACN Property Development Plc (UPDC) main business is the acquisition, development, sals and management of high quality serviced commercial and residual properties in the luxury, premium and classic segments of the real estate market in Nigeria. The company approaches property planning from the customers' perspective to create comfortable living/working environments. Hospitality services - UPDC Hotels Limited, the company's subsidiary is in the hospitality industry and leverages significantly on the success of its principal promoter UACN Property Development Company Plc. The hotel provides services such as sale of rooms, conference halls as well as food & beverages. The following measures are reviewed by Exco: Revenue to third parties Earnings before interest and tax Profit before tax Net current assets Property, plant and equipment Property development Hospitality services sales & management N'000 N'000 2,225,557 763,358 (2,988) 2,225,557 760,370
30-Jun-17 Total Revenue Intergroup revenue Revenue to third parties Earnings before interest and tax
Total N'000 2,988,916 (2,988) 2,985,928
1,102,198
(156,185)
Profit before tax
(1,650,712)
(156,185)
(2,020,076)
Net current assets
2,052,616
(14,726,317)
(12,403,189)
11,975,788
12,074,720
Property, plant and equipment
98,932
Property development Hospitality services sales & management N'000 N'000 1,191,727 554,842 (2,358) 1,191,727 552,484
30-Jun-16 Total Revenue Intergroup revenue Revenue to third parties Earnings before interest and tax Profit before tax Net current assets Property, plant and equipment
757,299
439,848
(317,603)
122,244
6,358,011
(14,537,475)
(8,179,463)
12,306,485
12,419,964
30 Jun 2017
30 Jun 2016
Analysis of revenue by category: N'000 1,599,001 288,596 258,102 79,858 2,225,557 760,370 2,985,928 30 Jun 2017
N'000 828,680 277,247 85,799 1,191,727 552,484 1,744,211 30 Jun 2016
Analysis of revenue by geographical location: N'000 2,985,928 6
N'000 1,746,569 (2,358) 1,744,211
(317,603)
Entity wide information
Nigeria
Total
1,074,902
113,479
Sale of property stock Share of James Pinnock sale of property stock Rental income Project and Management Surcharge Income UACN Property Development Company Plc UPDC Hotels Limited
303,156
N'000 1,744,211
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4 (i). Other Income
The Group Jun 2017 Jun 2016 N'000 N'000 2,242 26,849 29,999 4,374 5,195 264,435 7,387 35,127 305,286 70,323
Sales commission Legal and Documentation Fee Service charge income from UHL Recovery of excess bank charges
Other Income Total other income 4 (ii) Share of profit of associate
642,857
970,191
UPDC diversified its portfolio in 2013 through the floating of the UPDC Real Estate Investment Trust (REIT). Five (5) major investment properties were transferred to the UPDC REIT namely Abebe courts Ikoyi, Victoria Mall Plaza (VMP), residential and office block, Victoria Island, UACN commercial complex Abuja and MDS warehouse at Aba. Amount represents recognition of Profit from the REIT for the period under review. 4 (iii) Other Losses
The Group Jun 2017 Jun 2016 N'000 N'000 110,606 -
Losses on ongoing projects
Losses on ongoing projects are losses emanating from the project accounts upon completion. 5 (a) Expenses by nature
Change in inventories of finished goods and work in progress Direct operating expenses for Investment properties Personnel expenses Depreciation & Amortization Professional fees Auditors' remuneration Directors' emoluments UACN management fee Information Technology Insurance Marketing & Communication Back duty
5 (b) Expenses by function Cost of sales Selling and distribution expenses Admininstrative expenses
The Group Jun 2017 Jun 2016 N'000 N'000 2,654,390 1,207,732 21,207 30,014 309,045 316,751 191,281 193,869 12,593 97,933 2,500 3,360 36,022 26,675 19,370 11,917 43,820 21,845 14,845 12,557 56,800 78,127 237,904 3,361,872
2,000,782
2,740,397 56,800 564,675 3,361,872
1,197,385 78,127 725,272 2,000,782
6. Net finance income/(cost) The Group Jun 2017 Jun 2016 N'000 N'000 Finance Income Interest payable on borrowings Interst payable on bank overdraft Finance Costs Net finance cost 7. Taxation
301,918
285,206
(2,852,034) (202,794) (3,054,828) (2,752,910)
(758,772) (161,489) (920,260) (635,054)
The Group Jun 2017 Jun 2016 N'000 N'000
Current tax Nigeria corporation tax charge/ (credit) for the period
43,307
87,970
Total current tax charge
43,307
87,970
7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 8. 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 excluding ordinary shares purchased by the company and held as treasury shares.
The Group Jun 2017 Jun 2016 Profit attributable to ordinary equity shareholders (NGN 000) Basic earnings per share (Kobo) Diluted earnings per share (Kobo)
(2,055,105)
51,108
(120) (120)
3 3
The Group Jun 2017 Jun 2016 Number ('000) Number ('000) 1,718,750 1,718,750
Basic weighted average and Diluted weighted average number of shares.
(b) Diluted Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dillutive potential ordinary shares. The group has no dilutive instruments. 9. Property, plant and equipment The Group Cost At 1 January 2017 Addition Disposals Reclassification At 30 June 2017
Leasehold land Motor vehicles and buildings N'000 N'000 14,515,138 255,098 14,515,138 255,098
Plant and Machinery N'000 810,762 24,123 (83,505) 751,380
Furniture & Fittings N'000 1,514,953 2,926 (95) 1,517,784
Computer Equipment N'000 131,179 589 (165) 131,604
N'000 17,227,129 27,638 (83,764) 17,171,003
Total
Accumulated depreciation and impairment At 1 January 2017 Charge for the period Disposals
2,565,861 138,602 -
197,654 9,538 -
803,845 9,150 (68,181)
1,294,391 24,123 (85)
119,135 2,324 (73)
4,980,886 183,737 (68,340)
At 30 June 2017
2,704,462
207,192
744,813
1,318,429
121,385
5,096,283
Net book values At 30 June 2017 At 31 December 2016
11,810,676 11,949,277
47,905 57,444
6,566 6,917
199,355 220,561
10,218 12,044
12,074,720 12,246,244
8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 10. Intangible assets The Group Cost
Software N'000
At 1 January 2017 Additions Disposals At 30 June 2017
318,909 6,010 324,920
Amortisation At 1 January 2017 Amortisation for the period At 30 June 2017
267,507 7,544 275,051
Net book values At 30 June 2017 At 31 December 2016
49,869 51,403
11. Investment property The Group
Fair value
Freehold building
Leasehold building
N'000
N'000
At 1 January 2017 Additions Disposals At 30 June 2017
441,050 -
16,213,270 5,586 (1,000,900)
441,050
15,217,956
Total investment properties N'000 16,654,320 5,586 (1,000,900) 15,659,006
The Group
Fair value
Freehold building
Leasehold building
N'000
N'000
At 1 January 2016 Additions Reclassification Reclassification from property stocks held as inventories - Note 15(ii) Disposals Net gain/ Deficit on revaluation
471,138 (23,588) (6,500)
At 31 Dec 2016
441,050
Total investment properties N'000
16,395,877 15,539 23,588
16,867,015 15,539 -
312,845
312,845
(2,050,050) 1,515,470 16,213,270
(2,050,050) 1,508,970 16,654,320
Two properties in Lagos valued at N1billion were disposed during the period for a sales proceed of N1.48billion. 9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12. Investments in associates and equity accounted joint ventures
Principal investments
The Group Jun 2017 Dec-16 N'000 N'000
Quoted shares: UPDC REIT Joint Ventures UPDC Metro City Limited First Festival Mall Limited Transit Village Dev. Co. Ltd
Jun 2017 % holding
Dec-16 % holding
19,214,989
19,214,990
61.8%
61.8%
194,503 73,606 268,109
407,683 73,606 481,289
60.0% 45.0% 40.0%
60.0% 45.0% 40.0%
19,483,099
19,696,279
The movement in the investment in joint ventures during the year is stated below: The Group Jun 2017 Dec-16 N'000 N'000 At 1 January 2017 481,289 2,088,068 Share of (loss)/ profit of First Festival Mall Limited (213,179) 173,256 Impairment of investment in UPDC Metro City Limited (244,170) Derecognition of investment in James Pinnock At 30 June 2017
268,109
(1,535,865) 481,289
13. Available for sale financial asset
Investment in UNICO CPFA Limited
The Group Jun 2017 Dec-16 N'000 N'000 10,000 10,000
This represents 6.7% holding in the ordinary share capital of UNICO CPFA Limited, a company incorporated and operating in Nigeria. The investment is measured at cost. The fair value cannot be obtained as the shares of the company is not quoted.
14. Investments in subsidiaries The Group Jun 2017 Dec-16 N'000 N'000 UPDC Hotels Limited 2,082,500,000 Shares of =N=1.00 each Manor Gardens 53,810,000 Ordinary Shares of =N=1.00 each
Impairment of investments
2,082,500
2,082,500
94.70
94.70
53,810
53,810
67.50
67.50
2,136,310 (2,136,310) -
2,136,310 (2,136,310) -
15(i). Inventories
Consumption stocks and spares Non trade stock Properties under construction (note 15)
The Group Jun 2017 Dec-16 N'000 N'000 132,509 135,867 55,703 60,002 11,391,731 12,672,132 11,579,943 12,868,001
All Inventory above are carried at cost at all the periods reported. 10
% Shareholding Jun 2017 Dec-16 N'000 N'000
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 15(ii). Properties under construction The Group Jun 2017 Dec-16 N'000 N'000
Cost Balance 1 January Additions Reclassification as investment properties Disposals Other losses from completed projects Provision for Manor Gardens Unrealised gain on transfer of asset
12,672,132 263,048 (1,543,448) 11,391,731
12,166,714 5,021,016 (312,845) (2,402,787) (1,695,579) (132,936) 28,548 12,672,132
16. Trade and other receivables
Trade receivables Less: provision for impairment of trade receivables Net trade receivables Receivables from group companies (Note 22) Other receivables Advances to staff Analysis of other receivables Mobilization payments to contractors Prepayments and accrued income Sundry debit balances
The Group Jun 2017 Dec-16 N'000 N'000 1,072,602 1,518,227 (144,136) (144,136) 928,466 1,374,091 7,776,788 7,007,840 1,054,966 903,569 3,953 2,878 9,764,173 9,288,379 126,401 239,508 689,057 1,054,966
87,345 185,840 630,384 903,569
Movements in the provision for impairment of trade receivables are as follows: The Group Jun 2017 Dec-16 N'000 N'000 144,136 172,017 3,470 (31,351) 144,136 144,136
At 1 January Provision for receivables impairment Unused amounts reversed
11
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17. Cash and cash equivalents
Cash at bank and in hand Short term investment
The Group Jun-17 Dec-16 N'000 N'000 307,489 89,111 47,409 354,898 89,111
Less: bank overdrafts (included in borrowings, note 21)
(1,239,500)
(952,493)
Cash and cash equivalents
(884,601)
(863,382)
Offsetting of bank overdraft against cash at bank and in hand is only for the purpose of the statement of cash flow. 18. Interest bearing Loans and Borrowings The Group Jun-17 Dec-16 N'000 N'000 Current borrowings Bank Overdrafts Commercial papers dues within one year Loans due within one year (i) Non-current borrowings Loans due after one year (i)
Total borrowings
1,239,500 15,467,153 2,333,332 19,039,985
952,493 15,321,974 2,333,333 18,607,800
2,833,335 2,833,335
4,000,000 4,000,000
21,873,320
22,607,800
(i) Loans The Group
Amount due Jun-17 Dec-16
Details of the loan maturities are as follows:
N'000
N'000
Tenor
Repayment terms
Guaranty Trust Bank Plc
2,500,000
3,000,000
26 months
Half yearly
FSDH Merchant Bank Ltd
2,666,667
3,333,333
23 months
Quarterly
5,166,667
6,333,333
Security Equitable mortgage Equitable mortgage
The average interest rate for facilities during the period was 22.8% (2016 was 14.1%). All covenants attached to borrowings have been complied with throughout the period. Total borrowing cost of N144.98 million (2016: N568.8 million) have been capitalised into various projects using weighted average rate of 22.8%. Details of commercial papers
First Bank of Nigeria Limited Commercial Paper Total Commercial Papers
The Group Jun-17 Dec-16 N'000 N'000 300,000 300,000 15,167,153 15,021,974 15,467,153 15,321,974
12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 19. Trade and other payables The Group Jun-17 Dec-16 N'000 N'000 1,308,120 1,603,952 7,368,199 9,703,624 8,676,319 11,307,576 2,917 8,114 2,927,329 240,014 2,111,567 1,378,559 13,718,132 12,934,264
Trade payables Amounts owed to other related parties (Note 22) Provision for employee leave Other payables Accruals Total
Trade and other payables comprise amounts outstanding for trade purchases and ongoing costs. The Directors consider the carrying amount of trade and other payables to approximate its fair value. 20. Deferred revenue Deferred revenue are rentals received in advance which are recognized in the income statement when earned. The Group Jun-17 Dec-16 N'000 N'000 Within one year 208,571 220,136 Greater than one year 4,245 4,600 212,816 224,735 The Group lease out a number of premises to third parties. These are subject to review dates ranging from 1 year to 2 years. The Group has no contingent rent nor significant leasing arrangement. Movement in the deferred revenue is as follows: The Group Jun-17 Dec-16 N'000 N'000 224,735 257,121 246,183 510,574 (258,102) (542,960) 212,816 224,735
Opening balance Rental received in the period Less amount released to Comprehensive Income Balance carried forward
21. Reconciliation of profit before tax to cash generated from operations The Group Jun-17 Jun-16 N'000 N'000 Profit before tax (2,020,076) 122,244 Adjustment for non cash items: Depreciation Losses on ongoing projects Amortization of intangible asset (Gain)/ Loss on disposal of investment properties (Profit)/ Loss on disposal of property, plant and equipment Finance cost Finance income Share of profit of UPDC REIT Share of loss of Joint Ventures
183,737 110,606 7,545 (481,433)
Changes in working capital: (Increase)/decrease in inventories Decrease/(increase) in receivables Increase/(decrease) in payables Cash generated from operations
(7,387)
(3,611)
3,054,828 (301,918) (642,857) 213,179 116,225
920,260 (285,206) (970,191) 6,367
1,288,058 (475,794) 767,940
(1,248,524) (2,251,092) 1,270,344
1,696,428
13
186,184 7,686 29,000
(2,222,905)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 22. Related party transactions The ultimate parent and controlling party of the company is UAC of Nigeria Plc incorporated in Nigeria. There are other companies that are related to UPDC through common shareholdings. The following transactions were carried out with related parties: (a) Sales of goods and services
UAC of Nigeria Plc UAC Restaurants Limited MDS Logistics Plc Chemical & Allied Products Plc Portland Paints & Products Nig. Plc UNICO CPFA Limited
Relationship Parent Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary
The Group Jun 2017 Jun 2016 N'000 N'000 61,015 30,446 9,719 52,744 9,884 7,668 5,682 474 1,068
Relationship Parent Fellow Subsidiary Fellow Subsidiary
The Group Jun 2017 Jun 2016 N'000 N'000 19,370 11,917 412 7,284
(b) Purchases of goods and services
UAC of Nigeria Plc Chemical & Allied Products Plc Portland Paints & Products Nig. Plc
(c) Period-end balances arising from sales/purchases of goods/services
Receivable:
Relationship
UPDC Metrocity Limited loan UPDC Metrocity Limited First Festival Mall Limited loan (ii) First Festival Mall Limited First Restoration Dev. Co. Limited Calabar Golf Estate Limited Pinnacle Apartment Development Limited Imani and Sons Galaxy Mall Current Account UPDC REIT UAC of Nigeria Plc Grand Cereals Limited UAC Restaurants Limited
Joint Venture Joint Venture Joint Venture Joint Venture Joint Venture Joint Venture Joint Venture JV Partner Joint Venture Associate Parent Company Fellow Subsidiary Fellow Subsidiary
The Group Jun 2017 Dec-16 N'000 N'000 1,170,627 1,383,626 1,328,422 854,430 668,508 530,046 383,790 768,743 73,534 484,226 13,238 96,316 21,282 7,776,788
1,383,626 1,141,850 1,328,422 780,034 646,006 531,159 302,456 696,660 70,809 5,437 96,316 25,065 7,007,840
i. Advances to UPDC Hotels Limited is interest free and repayable on demand. ii. Loan to First Festival Mall Limited attracts interest at MPR + 4% per annum and repayable after 2 years of operation. 14
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Payable UAC of Nigeria Plc. Chemical and Allied Products Plc UPDC REIT MDS Logistics Plc James Pinnock current account Portland Paints and Products Nig. Plc UAC Foods Limited UAC Restaurants Limited Warm Spring Waters Nig. Ltd. Spring Waters Nig Ltd.
Relationship Parent Company Fellow Subsidiary Associate Fellow Subsidiary Joint Venture Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary Fellow Subsidiary
The Group Jun 2017 Dec-16 N'000 N'000 1,535,216 3,927,162 263 6,705 14,610 1,254,769 1,279,830 4,075,379 3,949,143 2,133 662 500,425 524,707 765 41 15 7,368,199 9,703,624
All trading balances will be settled in cash. There were no provisions for doubtful related party receivables at 30 June 2017 (2016: nil) and no charges to the income statement in respect of doubtful related party receivables (2016: nil). The related party transactions were carried out on commercial terms and conditions. 23. Management service agreement The company has a Management Service Agreement with UAC of Nigeria Plc. This agreement provides that the Company pays an annual fee of 1% of its turnover to UACN for services received under the agreement. The services provided include Business Strategy and Financial Advisory, Treasury, Secretarial & Legal, Human Resources Management, Insurance, Pensions & Gratuity Administration, Medical etc. The amount charged in these financial statements is N19.37 million (2016: N11.9 million). This does not include share of James Pinnock sales (Company's joint operation)
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