Mar 31, 2016 - Items that will not be reclassified to income statement: .... Proceeds from sale of property, plant and e
Unilever Nigeria Plc Unaudited Interim Financial Statements For the Three Months ended 31 March 2016
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Contents
Page
- Income statement
2
- Statement of other comprehensive income
3
- Statement of financial position
4-5
- Statement of changes in equity
6
- Statement of cash flows
7
- Notes to the financial statements
8
1
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Income Statement For three months ended 31 March 2016 2016 N'000
2015 N'000
16,782,159 (10,749,571)
14,910,995 (9,849,240)
6,032,588 (770,280) (3,354,509) -
5,061,755 (619,174) (2,871,290) 50,690
1,907,799 57,179 (545,676)
1,621,981 60,670 (817,909)
1,419,302 (377,898)
864,742 (274,294)
Profit for the period
1,041,404
590,448
Attributable to: Equity holders
1,041,404
590,448
0.28
0.16
Note Revenue Cost of sales
6
Gross profit Selling and distribution expenses Marketing and administrative expenses Profit on disposal of property, plant and equipment
7
Operating profit Finance income Finance costs Profit before taxation Taxation
8
Earnings per share for profit attributable to equity holders: Basic and diluted earnings per share (Naira)
The notes on pages 8 to 15 form an integral part of these financial statements.
2
12
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Statement of Other Comprehensive Income For three months ended 31 March 2016 2016 N'000
2015 N'000
Items that will not be reclassified to income statement: Remeasurement on post employment benefit obligations Tax effect
-
-
Other comprehensive income
-
-
Profit for the period
1,041,404
590,448
Total comprehensive income
1,041,404
590,448
Attributable to: Equity holders
1,041,404
590,448
Note
The notes on pages 8 to 15 form an integral part of these financial statements.
3
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Statement of Financial Position As at 31 March 2016 Note Assets Non-current assets Property, plant and equipment Intangible assets Other non- current assets Employee loan receivable Retirement benefit surplus
9
14
Current assets Assets held for sale Inventories Trade and other receivables Employee loan receivable Cash and bank balances
10 11 12
Total assets
31 March 2016
31 December 2015
N'000
N'000
26,258,717 1,110,119 114,475 110,103 320,262 27,913,676
27,368,919 1,168,581 208,809 127,979 290,382 29,164,670
171,411 4,799,910 11,849,672 73,300 4,948,954 21,843,247
171,411 6,173,113 10,142,845 85,201 4,435,244 21,007,814
49,756,923
50,172,484
23,073,869 233,335 4,206,779 5,212,689 32,756 32,759,428
22,542,842 159,840 4,535,672 7,426,543 32,756 34,697,653
3,364,995 3,402,871 282,125 93,060 87,348 722,439 7,952,838
3,060,591 3,369,353 266,548 88,494 95,537 591,055 7,471,578
40,712,266
42,169,231
Liabilities Current liabilities Trade and other payables Income tax Bank overdrafts Loans and borrowings Deferred income
13 12
Non-current liabilities Deferred tax liabilities Retirement benefit obligations Long service award obligations Other employee benefits Deferred income Loans and borrowings
14 14
Total liabilities
4
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Statement of Financial Position (continued) As at 31 March 2016 Note Equity Ordinary share capital Share premium Retained earnings Total equity
17 17
Total equity and liabilities
31 March 2016 N'000
31 December 2015 N'000
1,891,649 45,717 7,107,291 9,044,657
1,891,649 45,717 6,065,887 8,003,253
49,756,923
50,172,484
The financial statements on pages 2 to 15 were approved for issue by the Board of Directors on 14 April 2016 and signed on its behalf by:
His Majesty N.A. Achebe CFR, MNI Chairman
Yaw Nsarkoh Managing Director
Adesola Sotande-Peters Finance Director
FRC/2013/NIM/00000001568
FRC/2014/IODN/00000007035
FRC/2015/ICAN/00000010834
The notes on pages 8 to 15 form an integral part of these financial statements.
5
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Statement of Changes in Equity For three months ended 31 March 2016 Share capital N'000
Share premium N'000
Retained earnings N'000
Total N'000
1,891,649
45,717
5,541,442
7,478,808
Profit for the period
-
-
590,448
590,448
Other comprehensive income Remeasurement on post employment benefit obligations, net of tax
-
-
-
-
-
-
590,448
590,448
-
-
-
-
Balance at 31 March 2015
1,891,649
45,717
6,131,890
8,069,256
Balance at 1 January 2016
1,891,649
45,717
6,065,887
8,003,253
Profit for the period
-
-
1,041,404
1,041,404
Other comprehensive income Remeasurement on post employment benefit obligations, net of tax
-
-
-
-
-
-
1,041,404
1,041,404
-
-
1,891,649
45,717
Balance at 1 January 2015 Total comprehensive income for the period
Transactions with owners Dividend declared
Total comprehensive income for the period
Transactions with owners Dividend declared
Balance at 31 March 2016
The notes on pages 8 to 15 form an integral part of these financial statements.
6
-
7,107,291
-
9,044,657
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Statement of Cash Flows For three months ended 31 March 2016 2016 N'000
2015 N'000
3,649,952 (152,794) (1,571) -
2,678,186 (187,873) (600) -
3,495,587
2,489,713
57,179 (78,467) -
60,670 (2,768,719) 51,387
Net cash used in investing activities
(21,288)
(2,656,662)
Cash flows from financing activities Drawdown of long-term loan Repayment of long-term loan Interest payment
(103,034) (528,662)
(96,045) (801,824)
Net cash flow used in financing activities
(631,696)
(897,869)
2,842,603 (7,100,428)
(1,064,818) (14,218,479)
(4,257,825)
(15,283,297)
Note Cash flows from operating activities Cash generated from operations Retirement benefits paid Long service award obligations paid Tax paid
15
Net cash flow generated from operating activities
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
9
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
12
The notes on pages 8 to 15 form an integral part of these financial statements.
7
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
Notes to the financial statements
Page
General information
9
Basis of preparation
9
Significant accounting policies
9
Estimates
9
Financial risk management
9 - 10
Segment reporting
11
Marketing and administrative expenses
11
Income taxes
11
Property, plant and equipment
12
Inventories
13
Trade and other receivables
13
Cash and cash equivalents
13
Trade and other payables
13 - 14
Retirement benefit obligations
14
Cash flows from operating activities
14
Related party transactions
15
Share capital and premium
15
8
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
1.
General information Unilever Nigeria Plc is incorporated in Nigeria under the Companies and Allied Matters Act 1990 as a public limited liability company and is domiciled in Nigeria. The Company's shares are listed on the Nigerian Stock Exchange (NSE). The Company is principally involved in the manufacture and marketing of foods and food ingredients, and home and personal care products. It has manufacturing plants in Lagos and Agbara.
2.
Basis of preparation These interim financial statements for the three months ended 31 March 2016 have been prepared in accordance with IAS 34, ‘Interim financial reporting’. The interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2015, which have been prepared in accordance with IFRS.
3.
Significant accounting policies The accounting policies adopted are consistent with those of the previous financial year.
4.
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 financial statements for the year ended 31 December 2015.
5.
Financial risk management Financial risk factors Unilever’s activities expose it to a variety of financial risks: market risk (foreign exchange risk), credit risk and liquidity risk. Unilever’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Unilever’s financial performance. Risk management is carried out by a Treasury Department under policies approved by the Finance Director. Unilever's Treasury Department identifies, evaluates and manages financial risks in close co-operation with Unilever’s operating units. These policies are mostly Unilever Global Policies adapted for local use. 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 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.
5.1.
Financial risk factors
(a) Market risk (i) Foreign exchange risk Unilever is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro and USD. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities. The company manages this risk mainly by hedging foreign exchange currency contracts. At 31 March 2016, the unhedged financial assets and liabilities amounted to N4.3 billion (2015: N1.3 billion).
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Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
5.
Financial risk management (continued)
5.1.
Financial risk factors
(ii) Cash flow and fair value interest rate risk Unilever’s interest rate risk arises from bank overdrafts and bank loans. Overdrafts issued at variable rates expose Unilever to cash flow interest rate risk. Borrowings issued at fixed rates expose Unilever to fair value interest rate risk. Unilever analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions and alternative financing. Based on these scenarios, Unilever calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions. The following table shows the split in fixed and floating rate exposures:
Fixed rate (bank loans) Floating rates (bank overdrafts)
2016 N'000
2015 N'000
5,935,127 4,206,779
8,017,599 4,535,672
10,141,906
12,553,271
(b) Credit risk Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. For banks and financial institutions, only parties classified as "International Golden Circle" (preferred choice for the Unilever group) are accepted. Exposure limit with the banks is set at a maximum of N4.7 billion. Risk control assesses the credit quality of wholesale customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board or external ratings. The utilisation of credit limits is regularly monitored. Concentration of credit risk with respect to trade receivables is limited, due to the Company’s customer base being diverse. Credit terms for customers are determined on individual basis. Credit risk relating to trade receivables is managed by reference to the customers' credit limit, inventory balance, cash position and secondary sales to final consumers. (c) Liquidity risk Liquidity risk is the risk that Unilever will face difficulty in meeting its obligations associated with its financial liabilities. Unilever’s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this management considers both normal and stressed conditions. A material and sustained shortfall in our cash flow could undermine Unilever's credibility, impair investor confidence and also restrict Unilever’s ability to raise funds. Where current libilities exceed current assets, the Company seeks to manage its liquidity requirements by maintaining access to bank lending which are renewable annually. At the reporting date, Unilever held cash in bank was N2.1 billion (2015: N1.5 billion). Unilever also had N4.2 billion overdraft (2015: N6 billion).
10
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
6.
Segment reporting The chief operating decision-maker has been identified as the Leadership Team (LT) of Unilever Nigeria Plc. The Leadership Team reviews Unilever’s monthly financial and operational information in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The Leadership Team consider the business from a product category perspective. Unilever is segmented into Food Products (FP), Personal Care (HC) and Home Care (PC) products. Foods – including sale of tea, savoury and spreads. Personal Care – including sale of skin care and oral care products. Home Care – including sales of fabric care, household cleaning and water purification products. There are no intersegmental sales and Nigeria is the company's primary geographical segment as it comprises 96% of the company's sales. The Leadership Team assesses the performance based on operating profits for each operating segment that is reviewed. Total financing (including interest income and expense), income taxes and retirement benefit obligations are managed on an entity-wide basis and are not allocated to operating segments. Food Products N'000
Personal Care N'000
Home Care N'000
Total N'000
8,612,332 999,389 982,449 29,343 (280,032)
4,397,969 510,347 501,697 14,984 (143,001)
3,771,858 437,693 430,273 12,852 (122,643)
16,782,159 1,947,429 1,914,419 57,179 (545,676) (6,620) 1,419,302
Food Products N'000
Personal Care N'000
Home Care N'000
Total N'000
6,998,175 263,000 764,480 28,475 (383,869)
4,680,114 175,885 511,256 19,042 (256,717)
3,232,706 121,489 353,141 13,153 (177,323)
14,910,995 560,374 1,628,877 60,670 (817,909) (6,896) 864,742
Domestic (within Nigeria) N'000
Export (outside Nigeria) N'000
Total N'000
3 Months ended 31 March 2016
16,094,341
687,818
16,782,159
3 Months ended 31 March 2015
14,538,074
372,921
14,910,995
31 March 2016 Revenue Depreciation and amortisation Segmental operating profit Finance income Finance cost Amortisation of prepaid benefit on employee loan Profit before taxation
31 March 2015 Revenue Depreciation and amortisation Segmental operating profit Finance income Finance cost Amortisation of prepaid benefit on employee loan Profit before taxation Turnover over by geographical location
The company has 97 customers, and no single customer accounted for more than 10% of the company's revenue. 7.
Marketing and administrative expenses
Brand and marketing Overheads Service Fees
8.
2016 N'000
2015 N'000
908,262 2,069,940 376,307
1,321,436 1,369,877 179,977
3,354,509
2,871,290
Income Taxes Income tax expense is recognised based on management’s estimate of the weighted average annual income tax rate expected for the period. The estimated average tax rate used for the period ended 31 March 2016 is 27% (the estimated tax rate for the three months ended 31 March 2015 was 32%).
11
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
9.
Property, plant and equipment (PPE) Capital work-inprogress N'000 Cost At 1 January 2015 Additions Transfers Disposals Write off Reclassification to assets held for sale At 31 December 2015 Additions Transfers Reclassification between PPE heads Write off At 31 March 2016
Lease Plant Furniture hold and and Motor land Buildings machinery equipment vehicles N'000 N'000 N'000 N'000 N'000
3,015,302 5,068,498 (6,780,261) (10,132)
67,615 1,708,200 (21,872) (20,350)
7,080,868 472,618 (98,252) (326,742)
24,819,535 4,245,509 (4,917,403) -
1,293,407 78,467 (397,864)
1,733,593 3,335
7,128,492 71,160
24,147,641 260,919 (2,595)
1,368,682 62,450 2,595
(1,342) 972,668
1,736,928
7,199,652
24,405,965
(74) 1,433,653
-
32,282 7,836 8,146 (8,146) -
870,805 205,063 174,907 (174,907) (108,592)
10,359,893 1,465,540 616,712 (183,053) (4,930,603)
-
(12,341) 27,777 4,395 32,172
(163,340) 803,936 50,170 854,106
7,328,489 403,886 665,917 8,398,292
368,396 34,464 402,860
496,058 28,421 524,479
(175,681) 9,024,656 521,336 665,917 10,211,909
Net book value: At 1 January 2015
3,015,302
35,333
6,210,063
14,459,642
864,114
246,325
24,830,779
At 31 December 2015
1,293,407
1,705,816
6,324,556
16,819,152
1,000,286
225,702
27,368,919
972,668
1,704,756
6,345,546
16,007,673
1,030,793
197,281
26,258,717
Depreciation / impairment At 1 January 2015 Depreciation charge for the year Impairment charge Reclassification of impairment Impairment reversal Disposals Reclassification to assets held for sale At 31 December 2015 Depreciation charge for the period Impairment charge At 31 March 2016
At 31 March 2016
1,163,828 828,221 263,195 90,739 (58,341) (197,200) -
Total N'000 36,975,369 5,068,498 (5,293,068) (10,132)
721,760 -
(347,092) 36,393,575 78,467 -
721,760
(1,416) 36,470,626
299,714 581,896 124,443 103,686 (55,761) (189,524)
12,144,590 1,906,568 616,712 (183,053) (5,284,480)
(i) Leasehold land on finance lease The Company has non - cancellable finance lease agreements with the Federal Government of Nigeria which was paid once and in advance. There are no finance lease liabilities and no future finance charges to the income statement. The lease terms are between 50 and 99 years. The following amounts represents owned land where the Company is a lessee under a finance lease: 2016 N'000
2015 N'000
Cost – capitalised finance leases Accumulated depreciation
1,733,593 (32,172)
1,733,593 (27,777)
Net book value
1,701,421
1,705,816
12
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
10. Inventories 2016 N'000
2015 N'000
2,876,081 531,313 620,406 772,110
3,367,044 599,929 1,422,949 783,191
4,799,910
6,173,113
2016 N'000
2015 N'000
Trade receivables: gross Less impairment
5,272,720 (264,580)
4,174,782 (1,141,523)
Trade receivables: net Advances and prepayments Unclaimed dividend held with registrar Other receivables Due from related parties (Note 16(iii))
5,008,140 1,262,232 1,126,913 4,452,387
3,033,259 598,881 396,665 486,720 5,627,320
11,849,672
10,142,845
Raw and packaging materials Work in progress Finished goods Engineering spares and other inventories
11.
Trade and other receivables
Advances and prepayments include prepaid warehouse rents, insurance premium and advances to vendors. 12. Cash and cash equivalents 2016 N'000
2015 N'000
Cash at bank and in hand Fixed deposit
2,059,743 2,889,211
1,549,014 2,886,230
Cash and bank balances
4,948,954
4,435,244
(5,000,000) (4,206,779)
(7,000,000) (4,535,672)
(4,257,825)
(7,100,428)
Short term bank loan Bank overdrafts Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include bank overdrafts and short term bank loan. 13. Trade and other payables
Trade payables Amount due to related companies (Note 16(iii)) Dividend payable (Note 13(i)) Accrued liabilities Accrued brand and marketing expenses Accrued shipping and freight charges Non trade payables
13
2016 N'000
2015 N'000
6,273,676 8,749,450 3,262,970 732,124 611,637 611,470 2,832,542
6,280,820 7,618,844 3,351,652 1,477,732 366,432 692,439 2,754,923
23,073,869
22,542,842
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
13. Trade and other payables (continued) (i)
2016 N'000
2015 N'000
As at 1 January Dividend declared Dividend paid during the year Unclaimed dividend with Registrar Dividend claimed Unclaimed dividend returned by Registrar Unclaimed dividend now statute barred
3,351,652 (88,682) -
414,560 378,330 (378,330) 396,665 2,680,840 (140,413)
As at 31 March/31 December
3,262,970
3,351,652
Dividend payable
14. Retirement benefit obligations The amounts recognised in the statement of financial position are determined as follows: 2016 N'000
2015 N'000
Present value of funded retirement benefit obligations Fair value of plan assets
(1,382,616) 1,702,878
(1,258,656) 1,549,038
Retirement benefit surplus Present value of unfunded retirement benefit obligations Long service award obligations
320,262 (3,402,871) (282,125)
290,382 (3,369,353) (266,548)
Net liability in the statement of financial position
(3,364,734)
(3,345,519)
The amounts recognised within the income statement were as follows:
15.
Current Service Cost N'000
Net Interest Cost N'000
Total N'000
3 Months Ended 31 March 2016
98,247
75,334
173,581
3 Months Ended 31 March 2015
89,689
105,578
195,267
Cash flows from operating activities
Profit before tax
2016 N'000
2015 N'000
1,419,302
864,742
Adjustment for non-cash items: - Depreciation of fixed assets - Impairment charge - Assets write off - Amortisation of intangible assets - Profit on disposals on fixed assets - Finance income - Finance expense - Net charge in retirement benefit obligations - Change in employee loan receivable - Long service award obligations - Other employee benefits Changes in working capital: - Increase in trade and other receivables - Decrease in inventory - Increase in trade and other payables - Decrease in other non-current assets
521,336 665,917 1,342 58,462 (57,179) 545,676 156,433 29,777 17,149 -
502,097 2,990 58,279 (50,690) (60,670) 817,909 169,717 23,962 25,549 -
(1,706,827) 1,373,203 531,027 94,334
(1,575,614) 945,207 698,035 256,673
Cash flows generated from operating activities
3,649,952
2,678,186
14
Unilever Nigeria Plc Unaudited Interim Financial Statements for the Three Months Ended 31 March 2016
16. Related party transactions (i) Sale of finished goods to related parties
Unilever Ghana Limited Unilever Cote D'Ivoire
2016 N'000
2015 N'000
181,094 506,723
265,957 106,964
687,817
372,921
2016 N'000
2015 N'000
537,127 147,460 14,879 3,135
779,471 283,591 112,533 74,017 119,564
702,601
1,369,176
2016 N'000
2015 N'000
2,125,663 1,296,808 839,412 190,504
2,591,809 2,134,390 667,113 234,008
4,452,387
5,627,320
2016 N'000
2015 N'000
2,744,960 63,759 4,208,644 823,816 908,271
2,396,876 64,060 3,912,106 576,811 668,991
8,749,450
7,618,844
(ii) Purchases of finished goods for resale from related parties
Unilever Ghana Limited Unilever Market Development (Pty) Limited Unilever Gulf FZE Unilever Phillipines Unilever Supply Chain Company, UK
(iii) Outstanding related party balances as at 31 March were:
Receivables from related parties: Unilever Cote D'Ivoire Unilever Ghana Limited Unilever UK Plc Other related parties
Payables to related parties: Unilever UK Plc Unilever Cote D'Ivoire Unilever Ghana Limited Unilever Asia Private Other related parties
17.
Share capital and share premium
Balance as at 31 December 2015 and 31 March 2016
Number of ordinary shares (thousands)
Ordinary shares N'000
Share premium N'000
3,783,296
1,891,649
45,717
The authorised number of ordinary shares is 6,053,274,000 with a par value of 50kobo per share. Of these, 3,783,296,250 ordinary shares have been issued and fully paid.
15
