a.g. leventis (nigeria) plc annual report 31 december 2016 · 1. financial highlights. 2....

A.G. Leventis (Nigeria) PlcAnnual Report31 December 2016

A.G. Leventis (Nigeria) PlcAnnual Report

31 December 2016

Contents Page

Corporate information 1

Financial highlights 2

Chairman's statement 3

Audit committee's report 6

Directors’ report 7

Circular to shareholders 11

Corporate governance report 12

20

Independent auditor's report 21

Consolidated and separate statements of financial position 25

Consolidated and separate statements of profit or loss and other comprehensive income 26

Consolidated statement of changes in equity 27

Separate statement of changes in equity 28

Consolidated and separate statements of cash flows 29

Notes to the financial statements 30

Other national disclosures 101

- Consolidated and separate statements of value added 102

- Group financial summary 103

- Company financial summary 104

Statement of directors’ responsibilities in relation to the financial statements


31 December 2016

Corporate information

Board of Directors: Chief Joseph Babatunde Oke, OON Chairman - Retired (Sept 2016)Ahmed Kazalma Mantey Chairman - Appointed (Sept 2016)Michail Oikonomakis (Greek) Executive Vice Chairman/Chief Executive OfficerSuleman Abubakar Independent Non- Executive DirectorHaralambos (Harry) G. David (Cypriot) Non- Executive DirectorOrikolade Adebayo Karim Independent Non- Executive DirectorAnastasios Loannis Leventis (British) Non- Executive DirectorKenny Ezenwani Odogwu Non- Executive Director

Deputy Company secretary Bola Adebisi

Registered office: 2, Wharf Road, Apapa, Lagos.

Registration number: RC: 1654

Registrars: Cardinal Stone Registrars Limited358, Herbert Macaulay Way,Yaba, Lagos

Independent auditor: KPMG Professional ServicesKPMG TowerBishop Aboyade Cole StreetVictoria Island, Lagos

Principal bankers: Access Bank PlcFidelity Bank PlcFirst Bank of Nigeria LimitedFirst City Monumental Bank PlcStanbic IBTC PlcUBA PlcUnion Bank PlcZenith Bank PlcGuaranty Trust Bank Plc

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31 December 2016

Financial highlightsIn thousands of naira

2016 2015 % 2016 2015 %

Revenue 12,777,906 12,535,861 2 9,861,180 9,970,654 (1.1)

Gross profit 2,176,102 4,165,832 (48) 2,083,712 3,540,872 (41)

Operating (loss)/ profit (1,024,661) 1,154,010 (189) (2,822,231) 1,103,671 (356)

(Loss)/Profit before income tax (2,912,112) 291,225 (4,126,989) 730,795 (665)

(Loss)/Profit after tax (3,766,756) 355,945 (1,158)

Share capital 1,323,645 1,323,645 - 1,323,645 1,323,645 -

Total equity 6,344,043 9,090,982 7,275,893 11,233,270 (35)

Data per 50k share

Basic (loss)/ earnings per share (kobo) (94) 6 (142) 13 (1,192)

Declared dividend - - - - 10 -

Per share value - - - 3 4 (25)

Stock Exchange InformationStock exchange quotation at 31 December in Naira per share - - - 0.96 0.62 55

Market capitalization at31 December (₦ millions) - - - 2,541 1,641 55

RatiosCurrent ratio 0.71 1.00 (29) 0.92 1.53 (40)Debt-to-equity ratio 2.21 1.48 49 1.51 0.94 61 Gross profit Margin 17% 33% 14 21% 36% 9 Net (loss)/ profit Margin (23%) 2% (42%) 7% (36)Interest coverage ratio (52%) 113% (190%) 152% (225)

Number of employees 1551 1546 1278 1246 3

(40) (146)

-

(30)

(1,667)

The Group The Company

(2,566,280)

(1,100)

1,350 (176,986)

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31 December 2016

Chairman's statementFor the year ended 31 December 2016

ECONOMIC ENVIRONMENT

LEVENTIS MOTORS DIVISION

REAL ESTATE DIVISION

CHRISSTAHL NIGERIA LIMITED

Distinguished Shareholders, my colleagues on the Board, Ladies and Gentlemen, it is my pleasure to welcome you to the 58th Annual General Meeting of our Company and to present to you the Group’s financial results for the year ended December 31, 2016.

The period under review will long be remembered as one of the most challenging in Nigeria’s recent history. Theeconomy suffered its first contraction in over two decades and consequently a first recession in a quarter of acentury. The country is heavily dependent on crude oil export to fuel its economy but the period wascharacterized by weak oil prices, lower crude oil output due to pipeline vandalism from militant attacks in theNiger Delta area.

The economy also experienced weaker inflation-induced consumption demand, significantly reduced foreignreserves and a concomitantly weaker currency. There were also problems in the energy sector such as fuelshortages and lower electricity generation. The conflict with Boko Haram militants also created a humanitariancrisis in the North East which authorities are struggling to handle.

The effect of the recession in our economy continued to impact adversely on our operations as there was areduction in credit opportunities which in turn affected our income. This harsh environment along with thecontinued lag in infrastructure especially power and road network added to our cost of doing business.Nevertheless, we strove to ensure that we continued to develop our business as much as possible.

A review of our operations will confirm the trying times under which we operated.

The extremely tight market liquidity affected this division as truck prices increased by 60% to 80%. Transporterstherefore postponed purchase of trucks in the expectation that prices would drop in the future. Very low spareparts availability was experienced due to foreign exchange shortage which affected parts importation. Despitethese prevailing issues, Revenue grew by 12% and Gross Profit by 3217% when compared with the same periodlast year. The Fleet Solutions unit of this division which has proven to be successful will be expanded this year.

This Division’s revenue in 2016 was flat when compared with the same period in 2015. The Gross Profithowever reduced by 14% in 2016 over last year. The performance of this division was adversely impacted by thepartial stagnation in the real estate market due to the economic crisis and high cost of maintenance andimprovement items due to foreign exchange fluctuation. Nevertheless, this division will continue to seek forways to improve the properties under its portfolio.

The relocation of all Leventis Businesses in Iddo to 2 Wharf Road was completed in the year under review.

Chrisstahl Nigeria Limited’s revenue rose from N170.47 million in 2015 to N281.91 million in 2016 reflecting a65% growth. The performance of this business unit however decreased from a loss of N41 million in 2015 to aloss of N92.3 million for the year under review High rate of foreign exchange adversely affected this businessunit which only recently entered the Nigerian market.

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31 December 2016

Chairman's statement (Cont'd)For the year ended 31 December 2016

DRUCKFARBEN NIGERIA LIMITED

LEVENTIS FOODS LIMITED

VICTORIA BEACH HOTEL LIMITED

PIKWIK NIGERIA LIMITED

OPERATING RESULTS

The revenue from this subsidiary increased by 25% from N816.95 Million to N1.02 Billion in the year underreview. The fluctuating and high rate of foreign exchange adversely affected the profitability of this subsidiary.Management continues to engage with our joint venture partners to seek further opportunities for growth in thisbusiness unit.

2016 was a very difficult year for this subsidiary. Sales increased by 28% from N2.19 billion in 2015 to N2.79billion in current year. Notwithstanding the increase in Sales, the gross profit dropped significantly by 79% fromN463 million to N96 million.

Worsening rates of unemployment and underemployment mean reduced household income and this puts a strainon disposable income to pay for goods and services. The cost of raw and packaging materials continued toincrease throughout the year while the market was able to absorb only a small proportion of the increase. Energycost increased significantly throughout the year as a result of gas unavailability for more than 6 months of theyear which forced the company to switch to diesel.

High finance cost, fluctuating foreign exchange rate and the continuing increases in cost of raw materialscontributed to the loss for the year.

You will recall that you were informed last year that Directors continue to explore economically cost effectivemeans of utilizing the Hotel’s assets. I am pleased to inform you that a consultant has been retained to provide acomprehensive plan for the utilization of the Company’s entire real estate at the Oyingbo axis. I am optimisticthat the project when completed would enhance the profitability of the Company.

As my predecessor informed you last year, this company is the newest joint venture in our Group. Managementis expectant that this new business unit will roll out its first store by the end of this year. I am optimistic that withthe combination of our experience and our partner’s expertise, this company in no distant future will contributeto the profitability of the Group.

The Company and the Group revenue for the year under review was N9.86 Billion and N12.78 Billion reflectinga decrease of 1% and an increase of 2% respectively over last year in spite of the tough economic environment.The Profit before tax however declined significantly to close at a loss of N4.13 Billion and N2.93 Billion for theCompany and Group respectively when compared with that of the previous year.

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31 December 2016

Directors’ reportFor the year ended 31 December 2016

1 Financial statements

2 Legal form

3 Principal activities

• Real estate: Property development and management

• Production and distribution of food items

The principal activities of the joint ventures are: • Manufacture and trade in flexography and rotogravure inks for flexible packaging products• Supply and installation of pumps, valves and pipes• Retail of fast moving consumer goods

4 Results for the year

In thousands of Naira 2016 2015 2016 2015Revenue 12,777,906 12,535,861 9,861,180 9,970,654 Operating (loss)/profit (1,024,661) 1,154,010 (2,822,231) 1,103,671 (Loss)/Profit before tax (2,912,112) 291,225 (4,126,989) 730,795 Taxation 345,832 (468,211) 360,233 (374,850)(Loss)/Profit for the year from continuing operations (2,566,280) (176,986) (3,766,756) 355,945

(80,068) (322,851) - -

(2,402,675) 165,125 (3,692,648) 340,537

5 Property, plant and equipment

6 Dividend

The performance of the Group during the year under review as compared with the previous year is as follows:


Total loss attributable to non-controlling interest

Total comprehensive (loss)/ income attributable to owners of the company

Information relating to changes in property plant and equipment is disclosed in Note 13 to these financial statements.

The directors present their annual report on the affairs of A.G Leventis (Nigeria) Plc ("The Company") and its subsidiaries("together, the Group"), together with the financial statements and independent auditor's report for the year ended 31December 2016.

The Group was incorporated in Nigeria as a Private Limited Liability Company in 1952 and was converted to a publiclimited liability company in 1978. The Company's shares were quoted on The Nigerian Stock Exchange with effect from 29November 1978. The Group is made up of eight (8) subsidiaries, three (3) associates and three (3) Joint Ventures all ofwhich were incorporated in Nigeria.

The Group's principal activities are as follows: • Sales and servicing of: commercial vehicles, agricultural, mining and construction equipment

• Provision of administrative, management and other specialized services to subsidiaries, associated and relatedcompanies

A total dividend of N264,729,030.50 (two hundred and sixty four million, seven hundred and twenty nine thousand, thirtynaira and fifty kobo only) that is, 10 kobo (ten kobo) per share was declared and paid during the year in respect of the 2015financial results. No dividend has been recommended by the board of directors for approval at the forthcoming AnnualGeneral Meeting.

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31 December 2016

7 Directors

8 Record of director's attendance

9 Directors and their interests

As at 31 December

2016

As at 31 December 2015

Chief Joseph Babatunde Oke, OON (Resigned w.e.f. Sept 8, 2016) 6,152,669 5,539,003Ahmed Kazalma Mantey 12,000 12,000 Michail Oikonomakis (Greek) 1,978,395 - Suleman Abubakar (Independent) - - Haralambos (Harry) G. David (Cypriot) 3,837,059 3,837,059 Orikolade Adebayo Karim (Independent) - - Anastasios Ioannis Leventis (British) 876,000 876,000 Kenny Ezenwani Odogwu 768 768

10 Director's interest in contracts

11 Charitable donations

In thousands of Naira 2016 2015Greek Embassy - 1,000 UN Global Compact Office 734 - Youth Grassroots Football - 500 Community Initiative Services - 200 Nigerian Conservation Foundation 63 250 Others - 91

797 2,041

Chief Joseph B. Oke, OON retired as Director and Chairman of the Board with effect from September 8, 2016, and Mr.Ahmed Kazalma Mantey was elected as Chairman in his stead.The Directors retiring by rotation in accordance with the Articles of Association are Messrs. Haralambos (Harry) G. Davidand Kenny Ezenwani Odogwu and being eligible, offer themselves for re-election.

In accordance with Section 258(2) of the Companies and Allied Matters Act, CAP C20 LFN 2004, the records ofDirectors’ attendance at Board meetings during the year under review will be available for inspection at the Annual GeneralMeeting.

Other than as disclosed above, the Directors are not aware of any disclosable interests or transactions in the share capital ofthe Company or any of its subsidiaries as at December 31, 2016 or at the date of this report.

None of the Directors has notified the Company for the purpose of Section 277 of the Companies and Allied Matters Act,Cap C.20, Laws of the Federation of Nigeria, 2004 of any disclosable interests in contracts in which the Company wasinvolved either during the year ended December 31, 2016 or at the date of this report.

In accordance with Section 38(2) of the Companies and Allied Matters Act, Cap C.20, Laws of the Federation of Nigeria,2004, the Company did not make any donation or gift to any political party, political association or for any politicalpurpose in the course of the year under review (2015: Nil).

Directors' interests in the issued share capital of the Company as recorded in the Register of Members and/or as notified bythe Directors in compliance with sections 275 and 276 of the Companies and Allied Matters Act, Cap C.20, Laws of theFederation of Nigeria, 2004 and the Listing requirements of the Nigerian Stock Exchange were as follows:

During the year under review, the Company made the following donations:

Number of ordinary shares of N0.50k each

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31 December 2016

12 Corporate Social Responsibility

CSR activities and highlights

• Supported the Lagos State Scout camping exercise and took part in the closing Ceremony.

• Refurbished an old secondary school in Apapa.

13 Employment of disabled persons

14 Employment equity, gender policies and practices

15 Health, safety and welfare of employeesThe Company maintains an insurance health care scheme with some Health Maintenance Organizations (HMOs), licensedby the National Health Insurance Scheme (NHIS) to provide health insurance to employees in the private sector. Throughthis arrangement, each employee, their respective spouses, and dependents below the ages of eighteen (18) or twenty-two(22) years (depending on the HMO an employee registers with) are entitled to medical treatment in well-equipped,qualitative network of hospitals under the scheme.

Drawing on from our corporate mission and key values statement, emphasizing social commitment and corporatecontribution to the society, our Corporate Social Responsibility aims at enriching lives of our employees and theCommunity at large.We provide support for our communities along the lines of our branded theme of “Enriching Lives”, through activities thatfocus on the Active and continuous community involvement, development and investment with particular emphasis on:• Education• Social Welfare; through Corporate philanthropy and employee volunteering.

The Key Benefits of our Corporate Social Responsibilities are:• Improved reputation management• Enhanced ability to recruit, develop and retain staff• Improved innovation, competitiveness and market positioning• Enhanced ability to address change• More robust “social license” to operate in the community

• Sponsored the 2016 Walk for Nature organized by the Nigerian Conservation Foundation (NCF) in collaboration with the Lagos State Ministry of Environment, as well as sponsored other environmental awareness campaign and programs.

Our resourcing and promotion policy ensures equity, and is free from discriminatory bias of gender, ethnic origin, age,marital status, gender, sexual orientation, disability, religion and other diversity issues. This is role modelled throughout ourend to end employee life cycle process.

The Company runs canteens for junior and management employees where meals are heavily subsidized.Health and Safety regulations are in place within the Company’s premises and employees are regularly informed of theregulations.There are contributory retirement benefit schemes for both management and junior employees of the Company inconformity with the Pensions Act 2014.

• Refurbished the Birrel College Information Technology Centre and presented corporate souvenirs and food products from Leventis Foods Limited to the school representatives

In addition to our regular activities with Manufacturing Association of Nigeria (an opportunity to network with othermanufacturers and create visibility for our Company), we:

• Co-sponsored the 2016 Youth National Football Championship aka Dodo Mayana Soccer thorn.• Participated in the United Nations Global Impact’s awareness workshop for Sustainable Development Goals andreinforced our commitment towards: Gender Equality, Clean Water and Sanitation, etc.

Our Corporate Social Responsibility (CSR) integrates social, environmental and economic concerns into the Group’svalues, culture, decision making, strategy and operations in a transparent and accountable manner and thus, establishesbetter practices within the Group, creates wealth and improves the society at large.

It is the Company’s policy to give special consideration to disabled persons having regard to the individual applicant’saptitudes and abilities. There were no disabled persons in the Company as at year end. (2015: nil)

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UUkasoanya

Typewritten Text


31 December 2016

Corporate governance reportFor the year ended 31 December 2016

In compliance with Section 34(4) of the Code, it is hereby reported as follows;

The Board of Directors

Composition of the board of directors

Induction and Training

Schedule of matters reserved for the BoardMatters reserved for the Board of Directors of the Company are set out in the Board’s Charter which complieswith the requirements of the Code.

A.G Leventis (Nigeria) Plc is committed to the best practices in corporate governance; hence the Board iscontinually reviewing corporate governance standards and procedures in the light of the current developmentsin and outside Nigeria. It recognizes that corporate governance is fundamental to earning the confidence andtrust of the shareholders and consequently provides the structure through which the objectives of the Companyare set and the means of attaining such objectives.

The Board is guided by the provisions of the Code of Corporate Governance (“the Code”) which came intoeffect on April 1, 2011, and has designed policies to ensure that the Company’s business is conducted in a fairand transparent manner that conforms to high ethical standards. This governance framework helps the Boardto discharge its roles of providing oversight and strategic counsel in line with their responsibility to ensureconformity with regulatory requirements and acceptable risk.

The Directors of the Company are professionals who are well established in various fields of endeavor such asMarketing, Administration, Business, Law, Economics, Real Estate etc., creating a good skills, mix and wealthof experience which they have brought to bear on deliberations at Board meetings and in the exercise of theiroversight functions.

The Board governs and supervises the overall activities of the Company through the Executive Vice Chairman/ Chief Executive Officer.

During the year under review, the Company was managed by a Board of Eight (8) Directors, consisting ofseven (7) Non-Executive Directors, which included the Chairman and one (1) Executive Director untilSeptember 8, 2016 when Chief J. B. Oke, OON retired from the Company. The Non-Executive Directors areindependent of management and are free from any constraints, which may materially affect the exercise oftheir judgement as Directors of the Company.

The Company formally inducts newly appointed Directors, and as part of this induction, each new Director isprovided with information about the Company and made to meet with the Management of the Company.The Human Resources and Remuneration Committee is in charge of the induction and continuous training ofDirectors for better service on the Board.

Separation of the positions of the Chairman and Executive Vice Chairman/Chief Executive OfficerThe position of the Chairman and that of the Executive Vice Chairman/Chief Executive Officer of the Boardare occupied by different persons and the Executive Vice Chairman/Chief Executive Officer is responsible forimplementation of the Company's business strategy and the day-to-day running of the business.

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31 December 2016

Performance and Evaluation Process

The roles of the Board of DirectorsThe Directors have formalized a Charter and a Code of Business Ethics for the Group.The Charter provides for the following as the roles and responsibilities of the Board of Directors:

• Strategy and Planning• Staffing at Board and Senior Management Levels & Succession Planning• Executive Remuneration• Performance Monitoring• Risk Management and Internal Control• Audit and Compliance• Capital Management and Financial Reporting• Communication with the shareholders and management of investor relations• Board and its Committees’ accountabilities and responsibilities

Board committees

The Committee met on March 8, 2016, June 8, 2016, September 7, 2016, and November 30, 2016.The Human Resources & Remuneration Committee is charged with instituting a transparent procedure for theappointment of new directors to the Board and making recommendations to the Board regarding the tenuresand re-appointment of Non-executive directors on the Board. The Committee also performs other functions asset out in its Charter.

The Committee met on March 9, 2016, June 8, 2016, September 7, 2016, and November 29, 2016.

The Board is alive to its responsibilities which primarily involve the creation of stakeholder value andensuring the success of the Company. The Board is responsible for ensuring that the affairs of the Companyare run in an efficient manner and in compliance with applicable regulations. Members of the Board arerequired at all times to act in the best interest of the Company in the articulation and formulation of itsstrategic direction. The Board of Directors is dedicated to ensuring that the Company achieves its objectives.The Board met 5 (five) times during the year on the following days: March 10, 2016, April 20, 2016, May 112016, September 8, 2016 and December 1, 2016.

The Board carries out some of its responsibilities through two committees whose Charters respectively set outtheir roles, responsibilities, scope of authority and procedure for reporting to the Board. The Committees are;Strategic Planning & Finance Committee and Human Resources & Remuneration Committee.

The Strategic Planning & Finance Committee is vested with delegated responsibility for all businesses, whichshould be dealt with expeditiously and are not of such a nature as to necessitate consideration by a full meetingof the Directors. In particular, the Committee exercises the approval powers vested in its Charter.

The Committee is also responsible for monitoring the integrity of the Financial Statements of the Companyand reviewing the effectiveness of the Company's internal control and risk Management System, among others. The Committee comprises of two (2) Non-Executive Directors and one (1) Executive Director

The Human Resources and Remuneration Committee conducts a formal evaluation process to assess thecomposition and performance of the Board, each Committee, and each individual Director on an annual basis.The assessment is conducted to ensure that Board, Committees, and individual members are effective andproductive and to identify opportunities for improvement and skill set needs.The Human Resources and Remuneration Committee reports its assessment to the Board, annually. Directorswill not be nominated for re-election unless it is affirmatively determined that the Director is substantiallycontributing to the overall effectiveness of the Board.

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31 December 2016

Attendance of meetings by directors

Board meetings10-Mar-16 20-Apr-16 11-May-16 8-Sep-16 1-Dec-16

P P P P N/A

P P P P P

P P P P PP A A P PP A A P PP P A P PP P P P PP A P P A

Strategic planning & finance committee meetings8-Mar-16 8-Jun-16 7-Sep-16

P P P

P P P

P P PP P P

Human resources and remuneration committee meetings

9-Mar-16 8-Jun-16 7-Sep-16

P P P

N/A N/A N/A

P P PP P PA P P

P = PresentA = ApologiesN/A = Not on the Board/Committee at the date of the meeting

Michail Oikonomakis PHaralambos (Harry) G. David

Suleman Abubakar

The following is the list of the directors and their attendance at the Board and Committee Meetings heldduring the year.

Chief Joseph Babatunde Oke, OON (Chairman) (Retired w.e.f 8 September 2016) N/A

NameChief Joseph Babatunde Oke, OON (Chairman) (Retired w.e.f 8 September 2016)

Michail OikonomakisHaralambos (Harry) G. DavidAnastasios Ioannis LeventisKenny Ezenwani OdogwuSuleman AbubakarOrikolade Karim

Mr. Ahmed Mantey (Appointed Chairman w.e.f 8 September 2016)

Name 30-Nov-16

Mr. Ahmed Mantey (Appointed Chairman w.e.f 8 September 2016) P

The Strategic planning & finance committee meetings were attended by the Chief Finance Officer, GroupHead, Finance, the Group Human Resources and Administration Director, the Group Supply Chain Director,and the Company Secretary/Legal Adviser. Other senior management members were invited to brief eachCommittee on agenda items related to their areas of responsibilities.During the year, the Committee reviewed the Company’s quarterly financial report, the annual report andaccounts, the management letter and draft letter of representation before recommending their approval to theBoard. The Committee also reviewed the critical accounting policies, judgements and estimates applied in thepreparation of the financial statements.

Similarly, the Committee reviewed reports on key risks affecting the Company’s operations, the relatedcontrols and assurance processes designed to manage and mitigate such risks. This is in addition to receivingregular updates on the Company's controls and governance environment.

P

Mr. Ahmed Mantey (Appointed Chairman w.e.f 8 September 2016) P

Name 29-Nov-16Chief Joseph Babatunde Oke, OON (Chairman) (Retired w.e.f 8 September 2016) P

Michail Oikonomakis PP

Anastasios Ioannis Leventis P

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31 December 2016

Audit Committee

20-Apr-16 4-May-16 27-Jul-16 22-Nov-16P P P PP P P PP A P PP P P PP P A P

P P P N/A

P = PresentA = ApologiesN/A = Not on the Board/Committee at the date of the meeting

The Committee evaluates annually, the independence and performance of the external auditors, reviews theaudit plan and findings from the audit including the management letter from the external auditors and alsoreviews with management and the external auditors the annual audited financial statements before itssubmission to the Board. During the year, the Committee approved the audit plan and scope of the externalauditor's work for the financial year and reviewed the quarterly and half yearly financial results beforepresentation to the Board. The Committee met with and reviewed the auditors fee proposals for the services tobe rendered and endorsed the re-appointment of the external auditors of the Company.

During the year under review, Mr. Ahmed Mantey who was appointed the Chairman of the Board of theCompany, resigned from the Audit Committee in accordance with the principles of Corporate Governance.

The table below summarizes the attendance of the Audit Committee members at the four meetings held during the year:

NameMiss Christie O. Vincent (Chairperson)Mr. Rasaq MumuniMr. Kenny Ezenwani OdogwuMr. John OgundipeMr. Suleman AbubakarMr. Ahmed Kazalma Mantey (Resigned w.e.f 22 November 2016)

The Audit Committee is composed of six (6) members made up of three representatives of the shareholderselected at the 2015 (held in 2016) Annual General Meeting for a tenure of one year, and three representativesof the Board of Directors who are Non-executive Directors, nominated by the Board. The Chairman of theCommittee, Mrs. Christie Vincent-Uwalaka is a shareholders’ representative. The Committee met four (4) times in the year on the following days: March 20, 2016, May 4, 2016, July 27,2016 and November 22, 2016.

The Board was kept updated and informed at its regular quarterly meetings of the activities of the StrategicPlanning & Finance and Human Resources & Remuneration Committees through the minutes of theseCommittees and verbal updates provided to the Board by the Chairmen of the Committees which is includedas a regular item on the agenda of Board meetings.

The Committee reviewed the plans of both the internal and external auditors and approved the plans at thebeginning of the financial year.The Committee has considered the proposed audit fee structure for the 2016 financial year and hasrecommended to the Board, a suitable fee for the external auditors, subject to approval of shareholders at theAnnual General Meeting.

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31 December 2016

Mr. Michail Oikonomakis (Greek)

Mr. Orikolade Karim

Mr. Suleman Abubakar

Mr. Kenny E Odogwu

Mr. Haralambos (Harry) George David (Cypriot)

Mr. David is the Chairman of Frigoglass S.A., Plias S.A., Vice-Chairman of Katselis S.A. and a Director ofIdeal Group, A.G. Leventis (Nigeria) PLC, the Nigerian Bottling Company Limited, Vectis Capital, QuestEnergy, Beta Glass PLC, and Frigoglass Industries (Nigeria) Plc.

Mr. Suleman Abubakar is the CEO of Imani Group of Companies. He holds an MBA from AmericanUniversity, Washington DC. He is a member of the Board of Trustees of Real Estate Developers Associationof Nigeria. He joined the Board of A. G. Leventis (Nigeria) Plc on September 13, 2012.

Mr. Kenny Odogwu is a Legal Practitioner. He also holds an MBA from Stern Business School, NYU, NewYork, USA. He was appointed a director of the Company on June 10, 2011. He is currently serving on theBoards of Odogwu Group of Companies and Royal Exchange Plc.

Mr. Ahmed Kazalma ManteyMr. Mantey is the Non- Executive Chairman for the Group. He was a banker before joining the Group in 1992.He has worked in the Head Office, Business Units and Divisions of A.G. Leventis Group of companies asDivisional Executive/Special Assistant to the Chief Executive, Deputy General Manager (AGL) , DeputyGeneral Manager (Leventis Motors & Technical Products), General Manager (Leventis Stores) and ExecutiveDirector (Abuja Capital Motors Ltd). Mr. Mantey is on the board of Nigerian Bottling Company Ltd andLeventis Foundation GTE.

Profiles of board of directors and company secretary

Michail Oikonomakis started his career in Coca-Cola Hellenic (CCH) the second biggest bottler of The Coca-Cola Company in the world, operating in 28 countries. Over the first years he worked in Sales, holding avariety of Sales Field and Commercial positions. He constantly progressed throughout his career into widerand higher responsibility roles within Coca-Cola Hellenic where he was appointed as a Commercial Directorand Country GM in various operations of CCH and CEO in its subsidiaries. He was, also, CEO of a listedGroup of Companies operating in the food sector. He is, also, member of the Board of Directors of GreekNigerian Chamber of Commerce and Technology (GNCCT), a member of CEO Association and member ofthe Advisory Board of Global Thinkers Forum, a London based think tank ecosystem for excellence inleadership with values.

Mr. Karim is the Group Managing Director/CEO Shoreline Energy International Ltd, a leading energy andinfrastructure company in Africa. His current portfolio consists of Construction, Commodities trading, Agro-allied Products, oil and Gas, Engineering and Power.

Mr. Haralambos (Harry) George David Graduated with a Business Degree from Providence College USA, in1987. He served as a certified investment advisor with Credit Suisse in New York between 1987-1989 andthen worked within Leventis Group Companies in Nigeria and the Republic of Ireland from 1989-1992.

He was recently appointed an Independent Non-Executive Director of the Board of Directors of PetrosPetropoulos AEBE.

He is the Chairman of Costain West Africa Plc and Nigerian Ropes Plc. He is also a Director in seven (7) other companies including Shoreline Power Ltd, Ecobank Nigeria Plc, Schlumberger Testing and ProductionServices Nigeria Limited and Trans-Amadi Facilities Ltd.Mr. Karim is a Young Global Leader (2008) Award Honoree and also a pioneer and active member of theGlobal Agenda Council on Emerging Multinationals of the World Economic Forum.

He is a fellow of the Institute of Directors (UK). He joined the Board of A.G. Leventis (Nigeria) Plc onDecember 04, 2014, and was appointed the Chairman of the Company with effect from September 8, 2016.

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31 December 2016

Mr. Anastasios Ioannis Leventis

Communication policy

Printed material

Transparency in financial reporting and internal control

Complaints management policy

Mr. Anastasios Leventis works at Leventis Overseas Limited, a company that imports and exports to WestAfrica, and is a board member of A.G. Leventis (Nigeria) Plc and Nigerian Bottling Company Limited. Mr.Leventis is also a director of Alpheus Group Limited, a private asset management company managing assets ofprivate clients and charitable foundations. In addition he serves as a trustee of the A.G. Leventis Foundation, amember of the board of overseers of the Gennadius Library in Athens and a member of the Campaign board ofthe University of Exeter. Mr. Leventis holds a BA in Classics from the University of Exeter and an MBA fromNew York University’s Leonard Stern School of Business.

The Company is committed to managing an open and consistent communication policy with shareholders,potential investors and other interested parties. The objective is to ensure that the perception of those partiesabout the historical record, current performance and future prospects of the Company is in line withmanagement’s understanding of the actual situation.

The guiding principles of this policy, as it relates to shareholders, are that the Company gives equal treatmentto shareholders in equal situations; that any price sensitive information is published in a timely fashion; andthat information is provided in a format that is as full, simple, readable, understandable, transparent andconsistent as possible.The Company has an established website and investor–relations portal where the Company’s Annual Reportsand other relevant information about the Company is published and made accessible to the public.

The Company produces a detailed Annual Report and Financial Statements, which provides insight about thebusiness and its financial results, according to relevant international and local standards and regulations. Inaddition, the Company publishes full year and half year results.

The Company produces annually a comprehensive Annual Report and Financial Statements in compliancewith International Financial Reporting Standards and in the manner required by the Companies and AlliedMatters Act, CAP C20, LFN 2004, the Financial Reporting Council of Nigeria Act, 2011 and other relevantregulations.

In addition, the Company has in place, adequate internal control procedures that compel staff compliance withthe Company’s standard operating procedures.

In compliance with the Securities and Exchange Commission guideline that all Capital Market Operators mustdevelop a complaints policy framework on how to resolve complaints arising from issues covered under theInvestment and Securities Act, 2007, the Company has developed a Complaints Management Policy whichwill ensure that all complaints and enquiries from the Company’s shareholders are managed in a fair,impartial, efficient and timely manner. A copy of this policy is available on the Company’s website atwww.agleventis.com.

Has also served on the boards of Alpha Finance, DEI (Hellenic Public Power Corp), Lanitis Development andEmporiki Bank.

He is also a member of the General Council of the Greek Industries Federation (SEV), member of the board ofthe Foundation for Economic and Industrial Research (IOBE), a member of the Organizing Committee of theAthens Classic Marathon and member of the TATE’s Africa Acquisitions Committee.

17


31 December 2016

Security trading policy

Whistle blowing policy

Code of business conduct

Statement of company's risk management policies and practices

Specifically, our risk management objectives are to:

• demonstrate good corporate governance by managing our risks effectively;

• avoid damage to our reputation, brands and our economic profit; and• identify and maximize the benefit from new opportunities, challenges and initiatives.

Internal auditThe Group's effort to continuously ensure sound financial discipline and adherence to high ethical standards,as part of its corporate governance strategy, have resulted in the setting up of a robust group internal auditfunction which is risk focused.

The internal audit function is currently manned by a team of professionals charged with the responsibility ofensuring that strategic business risks facing the Group are promptly identified, effectively mitigated and thatrecommendations are proffered and continuously monitored. To ensure independence of this importantfunction, Internal audit reports to the statutory audit committee.

In addition to the Code of Conduct, we have policies which inspire and guide how we work every day andeverywhere. These key policies govern our conduct in all facets of the Company's operations and includepolicies on Anti-Corruption, Anti-Money Laundering, Competition and Anti-Trust. We apply the principles offairness, integrity and transparency in all our business dealings as entrenched in our Code of Conduct and inline with international best practices. Training, communication programmes and compliance monitoringmechanisms are in place to ensure that all relevant stakeholders remain aware of and comply with theprovisions of the Code and policies.

In compliance with Section 14 of the Nigerian Stock Exchange Amended Rules, the Company has developed aSecurity Trading Policy which will guide its directors, Management, Officers and related persons in dealingwith its shares. A copy of this policy has been distributed to all employees and is available on the Company’swebsite at www.agleventis.com.

The Company has put in place a "Whistle Blowing Policy" which is known to all stakeholders. This policy hasa dedicated “hot-line” and email system which could be used anonymously to report unethical practices.

The Company has put in place a Code of Business Conduct in line with internationally recognized bestpractices. Under the Code, the Company does not give or receive, whether directly or indirectly, bribes or other improper advantages for business or financial gain. No employee or director may offer, give or receive any giftor payment, which is or may be construed as being a bribe.

The Board of Directors has the responsibility of ensuring the maintenance of a sound system of internalcontrol and risk management which it does through its Strategic Planning & Finance Committee.

• prioritize risks appropriately and take appropriate risk for appropriate return in line with risk culture andappetite;

18


31 December 2016

Regulatory matters

Substantial interests in shares

Conclusion

20% of the Company's shares are required to be held by the public in line with the minimum free floatapplicable per the listing requirements. The number of shares held by the public as at 31 December 2016amounted to 12% of the Company's total shares.Discussions are being held with the Nigerian Stock Exchange by management and plans to rectify thedeficiency have been communicated.

Overall, the Company and its subsidiaries are committed to ensuring that internationally recognized bestpractices in corporate governance are observed in all areas of the Company’s business.The policies are constantly reviewed with focus on high ethical standards of honesty, integrity, accountabilityand transparency.

The Group discharged the penalties in the sum of N600,000 imposed on it by the Nigerian Stock Exchange forthe late filing of the 2015 Audited Accounts and Financial Statements, and the sum of N7,445,000 imposed onit by the Securities and Exchange Commission.

The Registrar has advised that according to the register of members on 31 December 2016, apart fromLeventis Holding S.A. with 1,510,616,882 (2015: 1,510,616,882), representing 57.06%; Boval S.A. with640,537,970 (2015: 640,537,970), representing 24.2%; and Leventis Overseas Limited with 177,198,452,representing 6.68%, no other individual shareholder held up to 5% of the issued share capital of the Company.

19

20

27 April 2017

27 April 2017

25

27 April

The notes on pages 30 to 100 are an integral part of these financial statements

UUkasoanya

Text Box


31 December 2016

Consolidated and separate statements of profit or loss and other comprehensive incomeFor the year ended 31 December

Note 2016 2015 2016 2015In thousands of naira

Revenue 6 12,777,906 12,535,861 9,861,180 9,970,654

Cost of sales 8.1

Gross profit 2,176,102 4,165,832 2,083,712 3,540,872

Other income 9 34,389 102,830 11,560 53,164

Selling and distribution expenses 8.2

Administrative expenses 8.3

Operating (loss)/ profit (1,024,661) 1,154,010 (2,822,231) 1,103,671

Finance income 7.1 179,905 203,693 178,854 353,356

Finance costs 7.2

Net finance costs

Share of loss from joint venture 20.1 (4,980) - -

Minimum taxes 11.1.1 (7,472) (38,157) - -

(Loss)/profit after minimum taxes (2,912,112) 291,225 (4,126,989) 730,795

(Loss)/profit before tax 11.4 (2,912,112) 291,225 (4,126,989) 730,795

Income tax expense/(credit) 11.1 345,832 360,233

(Loss)/profit for the year (176,986) (3,766,756) 355,945

Other comprehensive income, net of tax

Items that will never be reclassified subsequently to profit or loss:

Remeasurement of defined benefit obligation 10.5 123,592 26,909 108,943 (19,667)

Related tax 11.6 (39,549) 2,860 (34,862) 5,900

84,043 29,769 (13,767)

Items that may be reclassified subsequently to profit or loss:

Fair value gain/(loss) on available for sale financial assets 16.1 27

27

Other comprehensive income, net of tax 84,070 28,128 (15,408)

Share of other comprehensive income from joint venture 20.1 - - - -

Total comprehensive (loss)/ income for the year (148,858) (3,692,648) 340,537

(Loss)/profit attributable to:

Owners of the Company (2,486,212) 145,865 (3,766,756) 355,945

Non-controlling interests 30 (80,068) - -

(176,986) (3,766,756) 355,945

Total comprehensive (loss)/ income attributable to:

Owners of the Company: (2,402,675) 165,125 (3,692,648) 340,537

Non-controlling interests 30 - -

(148,858) (3,692,648) 340,537

Earnings per share:Basic and diluted (loss)/earnings per share (kobo) 12 (94) 6 (142) 13

(313,983) (79,535)

(2,482,210)

74,108

(2,482,210)

(322,851)

(2,566,280)

(1,641) 27 (1,641)

74,081

27 (1,641) (1,641)

(372,876) (82,691)

(2,566,280)

(468,211) (374,850)

(1,483,612) (1,023,341) (1,977,193)

(1,797,288) (819,648) (1,304,758)



(10,601,804)

(580,490) (781,438)

(2,333,214) (2,654,662)

(8,370,029) (7,777,468)

(4,534,083)

(383,420)

(6,429,782)

(469,646)

(2,020,719)

(726,232)

26


31 December 2016

Consolidated statement of changes in equityfor the year ended 31 December 2016

The Group Non-

Share Share Other Retained controlling TotalIn thousands of naira Note Capital Premium reserve earnings Total interests Equity

Balance at 1 January 2015 1,323,645 210,548 4,364,512 4,219,178 10,117,883 9,385,840

Total comprehensive incomeProfit for the year - - - 145,865 145,865 (176,986)

Other comprehensive income - - 19,260 - 19,260 8,868 28,128

Reclassification from retained earnings - - 398,687 (398,687) - - -

Total comprehensive income/ (loss) - - 417,947 (252,822) 165,125 (148,858)

Changes in ownership interestAcquisition of NCI without change in control 30.1 - - - (3,024)

Total changes in ownership interest - - - (3,024)Balance at 31 December 2015 1,323,645 210,548 4,782,459 3,823,380 10,140,032 (1,049,050) 9,090,982

Balance at 1 January 2016 1,323,645 210,548 4,782,459 3,823,380 10,140,032 (1,049,050) 9,090,982

Total comprehensive income -

Loss for the year - - - (2,486,212) (2,486,212)

Other comprehensive income - - 83,537 - 83,537 533 84,070

Total comprehensive income/ (loss) - - 83,537 (2,402,675) (79,535)

Transactions with owners of the CompanyDividend declared 12.2 (264,729) (264,729) - (264,729)

Total transactions with the owners of the Company - - - (264,729) (264,729) - Changes in ownership interestChange in ownership interest in subsidiary without a change in control 30.2 - (978,581) 978,581 Total changes in ownership interest - - - (978,581) 978,581

Balance at 31 December 2016 1,323,645 210,548 4,865,996 93,858 6,494,047 (150,004) 6,344,043


(2,486,212) (2,482,210)

(978,581) - (978,581) -

(80,068) (2,566,280)

(264,729)

(322,851)

(732,043)

(313,983)

(142,976) (142,976) (146,000) (142,976) (142,976) (146,000)

27


31 December 2016

Separate statement of changes in equityfor the year ended 31 December 2016

The Company Share Share Other Retained Total

Note Capital Premium reserve earnings Equity

In thousands of nairaBalance at 1 January 2015 - - 1,323,645 210,548 4,379,608 4,978,932 10,892,733

Total comprehensive income Profit for the year - - - 355,945 355,945

Other comprehensive income - - (15,408) - (15,408)

Total comprehensive income/ (loss) - (15,408) 355,945 340,537

Balance at 31 December 2015 1,323,645 210,548 4,364,200 5,334,877 11,233,270

Balance as at 1 January 2016 1,323,645 210,548 4,364,200 5,334,877 11,233,270

Total comprehensive income Loss for the year - - - (3,766,756) (3,766,756)

Other comprehensive income - - -

Total comprehensive income/ (loss) - - (3,766,756) (3,692,648)

Transactions with owners of the companyDividend Declared 12.2 - - - (264,729)

Balance at 31 December 2016 1,323,645 210,548 4,438,308 1,303,392 7,275,893

The notes on pages 30 to 100 are an integral part of these financial statements 74,108 264729009

4,473,168 264729

74,108

(264,729)

74,108 74,108

28


31 December 2016

Consolidated and separate statement of cash flows

NoteIn thousands of naira 2016 2015 2016 2015Cash flow from operating activities(Loss)/profit for the year (2,566,280) (176,986) (3,766,756) 355,945 Adjustments for:Depreciation of property, plant and equipment 13 1,294,800 1,266,835 1,101,733 1,100,360 Depreciation of investment properties 14 69,990 57,024 65,292 52,326 Amortization 15.2 20,426 28,904 16,735 25,032 Finance income 7.1 (179,905) (203,693) (178,854) (353,356)Finance costs 7.2 1,977,193 1,023,341 1,483,612 726,232 Gain on disposal of property, plant and equipment 9 (9,335) (6,100) (1,057) (4,935)Defined benefit expense 10.1 91,838 62,540 82,595 58,396 Long service benefit expense 10.2 10,295 48,291 9,864 36,244 Write off of investment in subsidiaries 8.3 - - - 163,185 Tax expense (credit)/expense 11 (345,832) 468,211 (360,233) 374,850 Minimum taxes 11 7,472 38,157 - - Impairment of investment in subsidiaries 8.3 - 31,495 1,487,079 31,495 Impairment of receivable from subsidiary 8.3 - - 893,600 - Write off of property, plant and equipment 13 27,915 36,001 27,915 20,762 Write off of Investment property 14 53,650 - 53,650 - Share of loss on joint ventures 20.1 82,691 4,980 - - Impairment loss on goodwill 15.1 4,486 2,726 - -

539,404 2,681,726 915,175 2,586,536 Changes inInventories 17.2 750,360 195,973 660,165 53,289 Trade and other receivables 18.2 632 (772,660) (757,803) (910,205)Deposit for foreign currency 18.3 (375,274) - (375,274) - Prepayments 19.1 35,832 5,525 57,393 (3,811)Trade and other payables 27.4 2,287,262 284,259 2,104,199 428,473 Deferred revenue (184,874) 241,775 (167,203) 235,589 Cash generated from operations 3,053,342 2,636,598 2,436,652 2,389,871

Income taxes paid 11.3 (63,257) (129,636) (43,481) (75,952)Gratuity paid 10.1 (53,271) (105,148) (25,379) (79,636)Long service award paid 10.2 (3,526) - (2,572) - Cash generated from operating activities 2,933,288 2,401,814 2,365,220 2,234,283

Cash flows from investing activitiesInterest received 7.3 137,572 170,047 131,643 319,710 Proceeds from sale of property plant and equipment 13,985 27,125 2,116 12,914 Proceeds from sale and lease back transaction - 569,970 - 569,970 Acquisition of additional shares in Joint Venture - (34,500) - (34,500)Acquisition of property, plant and equipment 13 (306,884) (721,879) (261,969) (508,245)Acquisition of intangible assets 15.2 (3,684) (19,676) (3,684) (18,277)Purchase of Non-controlling interest in Abuja Capital Motors - (146,000) - (146,000)

Net cash (used in)/ generated from investing activities (159,011) (154,913) (131,894) 195,572

Cash flow from financing activitiesFinance costs paid 7.4 (1,880,599) (985,303) (1,382,138) (726,232)Dividend paid 27.1 (54,261) - (54,261) - Proceeds from loans and borrowings 26.1.1 - 632,690 - 632,690 Repayment of borrowings 26.1.1 (451,258) (370,006) (451,258) (370,006)Repayment of finance lease liabilities 26.1.3 (408,873) (518,355) (408,873) (518,355)Net cash used in financing activities (2,794,991) (1,240,974) (2,296,530) (981,903)Net (decrease)/increase in cash and cash equivalents (20,714) 1,005,927 (63,204) 1,447,952 Cash and cash equivalents at 1 January (382,147) (1,388,074) 1,091,289 (356,663)Cash and cash equivalents at 31 December 21 (402,861) (382,147) 1,028,085 1,091,289



29


31 December 2016Notes to the consolidated and separate financial statementsFor the year ended 31 December 2016

Page1 Reporting entity 312 Basis of preparation 313 Significant accounting policies 324 Standards and interpretations effective 31 December 2016 515 Determination of fair values 516 Revenue 527 Finance income and finance costs 528 Expenses by nature 539 Other income 56

10 Employee benefits 5611 Taxation 6012 Basic Earnings per share 6413 Property, plant and equipment 6514 Investment properties 6815 Intangible assets 6916 Financial assets 7017 Inventories 7118 Trade and other receivables 7119 Prepayments 7320 Investments in joint ventures 7321 Cash and cash equivalents 7522 Share capital 7523 Other reserves 7524 Investments in subsidiaries 7525 Capital management 7726 Loans and borrowings 7727 Trade and other payables 7928 Deferred revenue 7929 Financial instruments - financial risk management and fair values 8030 Non-controlling interests 8931 Operating leases 9032 Capital commitments 9133 Contingent liabilities 9134 Related parties 9135 Operating segments 9436 Events after the reporting date 9537 Condensed financial data of consolidated entities 96

30


31 December 2016

Notes to the consolidated and separate financial statementsFor the year ended 31 December 2016

1 Reporting entity

2 Basis of preparation

2.1.

Measurement basis

Fair valuePresent value of the obligationLower of cost and net realizable valueFair value

2.2 Functional and presentation currency

2.3 Use of judgments and estimates

2.3.1.

Note 3(A)(v) – classification of joint arrangements;Note 3(H) – leases: whether an arrangement contains a lease and lease classification;

JudgmentsInformation about judgments made in applying accounting policies that have the most significant effectson the amounts recognized in the separate and consolidated financial statements is included in thefollowing notes:

ItemsNon-derivative financial instruments Initially at fair value and subsequently at

amortized cost using effective interest rateAvailable-for-sale financial assetsDefined benefit obligationInventory

A.G. Leventis (Nigeria) Plc, a company quoted on the Nigerian Stock Exchange was incorporated as alimited liability Company in 1958 and converted to a public company on 29 November 1978. TheCompany's registered office is No. 2 Wharf Road, Apapa, Lagos.

The principal activities of the Group and Company include the sale and servicing of, commercialvehicles, agricultural and construction equipment, property letting and management and production andsales of pastries and other related food items.

The separate financial statements as at 31 December 2016 comprises the financial statements of A.GLeventis (Nigeria) Plc ("the Company"). The consolidated financial statements as at 31 December 2016comprises the financial statements of the company and its subsidiaries (together, referred to as "theGroup").

These consolidated and separate financial statements have been prepared in accordance withInternational Financial Reporting Standards and in the manner required by the Companies and AlliedMatters Act CAP C.20 Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council ofNigeria Act, 2011. The financial statements which were prepared on a going concern basis, wereauthorized for issue by the Company's board of directors on 27 April, 2017.These financial statements cover the financial year from 1 January 2016 to 31 December 2016.

Basis of measurementThe consolidated financial statements have been prepared on the historical cost basis except for thefollowing items, which are measured on an alternative basis.

These consolidated and separate financial statements are presented in Naira, which is theGroup's/Company's functional currency. All financial information presented in Naira has been rounded tothe nearest thousand unless stated otherwise.

In preparing these consolidated and separate financial statements, management has made judgments,estimates and assumptions that affect the application of the Group/Company’s accounting policies andthe reported amounts of assets, liabilities, income and expenses. Actual results may differ from theseestimates.Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates arerecognized prospectively.

Derivative financial instruments

31


31 December 2016

Notes to the consolidated and separate financial statements2.3.2. Assumptions and estimation uncertainties

Note 10 – measurement of defined benefit obligations: key actuarial assumptions;

2.4 Measurement of fair values

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

3 Significant accounting policies

A. Basis of Consolidationi. Business Combinations

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservableinputs).In some cases, if the inputs used to measure the fair value of an asset or a liability are categorized indifferent levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety inthe same level of the fair value hierarchy as the lowest level input that is significant to the entiremeasurement.

The Group/Company recognizes transfers between levels of the fair value hierarchy at the end of thereporting period during which the change has occurred. Further information about the assumptions madein measuring fair value is included in the following notes:Note 29 - Financial Instruments – Financial risk management and fair valuesNote 14 - Investment properties

The Group has consistently applied the following significant accounting policies to all periods presentedin these separate and consolidated financial statements.

The Group accounts for business combinations using the acquisition method when control istransferred to the Group. The consideration transferred in the acquisition is generally measuredat fair value, as are the identifiable net assets acquired. The excess of the purchase considerationover the fair value of identifiable net asset is recognized as goodwill on acquisition. Anygoodwill that arises is tested annually for impairment. Any gain on a bargain purchase isrecognized in profit or loss immediately. Transaction costs are expensed as incurred, except ifrelated to the issue of debt or equity securities.

Note 11.5 – recognition of deferred tax assets: availability of future taxable profit against which taxlosses carried forward can be utilized;

Note 3(J) – impairment test: key assumptions underlying recoverable amounts; andNotes 3(L) – recognition and measurement of provisions and contingencies: key assumptions about thelikelihood and magnitude of an outflow of resources.

A number of the Group/Company's accounting policies and disclosures require the determination of fairvalues, for both financial and non-financial assets and liabilities. When applicable, further informationabout the assumptions made in determining fair values is disclosed in the notes specific to that asset orliability.

When measuring the fair value of an asset or a liability, the Company uses market observable data as faras possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputsused in the valuation techniques as follows:

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Information about assumptions and estimation uncertainties that have a significant risk of resulting in amaterial adjustment in the year ending 31 December 2017 is included in the following notes:

32


31 December 2016

Notes to the consolidated and separate financial statements

ii. Subsidiaries

iii. Non Controlling Interests (NCI)

iv Loss of control

v. Interests in equity-accounted investees

Interests in the joint ventures are accounted for using the equity method. They are initiallyrecognized at cost, which includes transaction costs. Subsequent to initial recognition, theconsolidated financial statements include the Group’s share of the profit or loss and OCI ofequity-accounted investees, less any impairment losses, until the date on which joint controlceases.

Interests in the joint ventures are derecognised when the Group loses joint control over the jointventure. Any resulting gain or loss is recognized in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligationto pay contingent consideration that meets the definition of a financial instrument is classified asequity, then it is not remeasured and settlement is accounted for within equity. Otherwise,contingent consideration is remeasured at fair value at each reporting date and subsequentchanges in the fair value of the contingent consideration are recognized in profit or loss.

If share-based payment awards (replacement awards) are required to be exchanged for awardsheld by the acquiree’s employees (acquiree’s awards), then all or a portion of the amount of theacquirer’s replacement awards is included in measuring the consideration transferred in thebusiness combination. This determination is based on the market-based measure of thereplacement awards compared with the market-based measure of the acquiree’s awards and theextent to which the replacement awards relate to pre-combination service.

Subsidiaries are entities controlled by the Company. The Company controls an entity when it isexposed to, or has rights to, variable returns from its involvement with the entity and has theability to affect those returns through its power over the entity. The financial statements ofsubsidiaries are included in the consolidated financial statements from the date that controlcommences until the date that control ceases. The accounting policies of subsidiaries aremodified where necessary to align them with the policies adopted by the Company. Separatedisclosure is made for non-controlling interest.

NCI are measured at their proportionate share of the acquiree’s identifiable net assets at the dateof acquisition.Changes in the Group’s interest in a subsidiary that do not result in a loss of control areaccounted for as equity transactions.

When the Company loses control over a subsidiary, it derecognizes the assets and liabilities ofthe subsidiary, and any related NCI and other components of equity. Any resulting gain or loss isrecognized in profit or loss. Any interest retained in the former subsidiary is measured at fairvalue when control is lost.

The Group’s interests in equity-accounted investees comprise interests in joint ventures.A joint venture is an arrangement in which the Company has joint control, whereby theCompany has rights to the net assets of the arrangement, rather than rights to its assets andobligations for its liabilities.

The consideration transferred does not include amounts related to the settlement of pre-existingrelationships. Such amounts are generally recognized in profit or loss.

33


31 December 2016

Notes to the consolidated and separate financial statementsvi Transactions eliminated on consolidation

B Foreign Currency Transactions

C Financial Instruments

i Non-derivative financial assets and financial liabilities - Recognition and derecognition

The Group classifies non-derivative financial liabilities into the following categories: financialliabilities at fair value through profit or loss and other financial liabilities.

The Group initially recognizes loans and receivables and debt securities issued on the date whenthey are originated. All other financial assets and financial liabilities are initially recognized onthe trade date when the entity becomes a party to the contractual provisions of the instrument.

The Group derecognizes a financial asset when the contractual rights to the cash flows from theasset expire, or it transfers the rights to receive the contractual cash flows in a transaction inwhich substantially all of the risks and rewards of ownership of the financial asset aretransferred, or it neither transfers nor retains substantially all of the risks and rewards ofownership and does not retain control over the transferred asset. Any interest in suchderecognized financial assets that is created or retained by the Group is recognized as a separateasset or liability.

The Group derecognizes a financial liability when its contractual obligations are discharged orcancelled, or expire.

Financial assets and financial liabilities are offset and the net amount presented in the statementof financial position when, and only when, the Group currently has a legally enforceable right tooffset the amounts and intends either to settle them on a net basis or to realize the asset and settlethe liability simultaneously.

Intra-group balances and transactions, and any unrealized income and expenses arising fromintra-group transactions, are eliminated. Unrealized gains arising from transactions with equityaccounted investees are eliminated against the investment to the extent of the Company’s interestin the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only tothe extent that there is no evidence of impairment.

Transactions denominated in foreign currencies are translated and recorded in Naira at the actualexchange rates as of the date of the transaction. Monetary assets and liabilities denominated inforeign currencies are translated to the functional currency at the exchange rate at the reporting date.Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translatedto the functional currency at the exchange rate when the fair value was measured.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translatedusing the exchange rate at the date of the transaction. Foreign currency differences arising ontranslation are recognized in profit or loss.

The Group classifies non-derivative financial assets into the following categories: financial assets atfair value through profit or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets.

34


31 December 2016

Notes to the consolidated and separate financial statementsii Non derivative financial assets - Measurement

Financial assets at fair value through profit or loss

Held-to-maturity financial assets

Cash and cash equivalents

iii Non-derivative financial liabilities

Loans and borrowings

A financial liability is classified as fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs arerecognized in profit or loss as incurred. Financial liabilities at fair value through profit or lossare measured at fair value and changes therein, including any interest expense, are recognized inprofit or loss.

Other non-derivative financial liabilities are initially measured at fair value less any directlyattributable transaction costs. Subsequent to initial recognition, these liabilities are measured atamortized cost using the effective interest method.

Loans and borrowings are recognized initially at fair value, net of transaction costs incurred.Loans and borrowings are subsequently stated at amortized cost; any difference between theproceeds (net of transaction costs) and the redemption value is recognized in profit or loss overthe period of the borrowings using the effective interest method.

Loans and borrowings, for which the Group has an unconditional right to defer settlement of theliability for at least 12 months after the statement of financial position date, are classified as non-current liabilities.

These assets are initially measured at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, they are measured at amortized cost using the effective interestmethod.

Loans and receivablesThese assets are initially measured at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, they are measured at amortized cost using the effective interestmethod.

Available-for-sale financial assetsThese assets are initially measured at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, they are measured at fair value and changes therein, other thanimpairment losses and foreign currency differences on debt instruments, are recognized in OCIand accumulated in the fair value reserve. When these assets are derecognized, the gain or lossaccumulated in equity is reclassified to profit or loss.

Cash and cash equivalents comprise cash on hand; cash balances with banks and call depositswith original maturities of three months or less. Bank overdrafts that are repayable on demandand form an integral part of the Group/Company's cash management are included as acomponent of cash and cash equivalents for the purpose of statement of cash flows.

A financial asset is classified as fair value through profit or loss if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs arerecognized in profit or loss as incurred. Financial assets at fair value through profit or loss aremeasured at fair value and changes therein, including any interest or dividend income, arerecognized in profit or loss.

35


31 December 2016

Notes to the consolidated and separate financial statementsiv Derivative financial assets

D

E Property plant and equipmenti Recognition and measurement

ii

Items of property, plant and equipment are measured at cost less accumulated depreciation andany accumulated impairment losses.Cost includes expenditure that is directly attributable to the acquisition of the asset. Property,plant and equipment under construction are disclosed as capital work-in-progress. The cost ofself-constructed asset includes the cost of materials and direct labour, any other costs directlyattributable to bringing the assets to a working condition for their intended use including, whereapplicable, the costs of dismantling and removing the items and restoring the site on which theyare located and borrowing costs on qualifying assets.

When parts of an item of property, plant and equipment have different useful lives, they areaccounted for as separate items (major components) of property, plant and equipment.An item of property, plant and equipment is derecognized upon disposal or when the asset ispermanently withdrawn from use and no future economic benefits are expected from thedisposal. Gains and losses on disposal of an item of property, plant and equipment aredetermined by comparing the proceeds from disposal with the carrying amount of property, plantand equipment, and are recognized in the profit or loss.

Subsequent expenditureSubsequent expenditure is capitalized only if it is probable that the future economic benefitsassociated with the expenditure will flow to the Group and its cost can be measured reliably. Thecosts of the day-to-day servicing of property, plant and equipment are recognized in profit orloss as incurred.

Share capitalThe Company has only one class of shares, ordinary shares. Ordinary shares are classified as equity.When new shares are issued, they are recorded in share capital at their par value. The excess of theissue price over the par value is recorded in the share premium reserve. The use of the share premiumaccount is governed by S.120(3) of Companies and Allied Matters Act CAP C.20 Laws of theFederation of Nigeria, 2004. All ordinary shares rank equally with regard to the Company's residualassets. Holders of these shares are entitled to dividends as declared from time to time and are entitledto one vote per share at general meetings of the Company.Incremental costs directly attributable to the issue of ordinary shares are recognized as a deductionfrom equity, net of any tax effects.

The Group holds derivative financial instruments to hedge its foreign currency risk exposures.Embedded derivatives are separated from the host contract and accounted for separately ifcertain criteria are met.

Derivatives are initially measured at fair value. Any directly attributable costs are recognised inprofit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fairvalue, and changes there in are generally recognised in profit or loss.

36


31 December 2016

Notes to the consolidated and separate financial statementsiii Depreciation

YearsFreehold land -Leasehold LandBuildings 20 - 50Plant and machinery – factory productionImprovement to leasehold (shorter of lease period or useful life) 4 - 10Plant and machinery – others 4 - 10Office equipment and furniture 5 - 10Computer equipment 2 - 3Trucks 4 - 10Motor vehicles 2 - 4

iv Reclassification to Investment property

F Investment property

Investment properties have a useful life ranging from 20 - 50 years

Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred tothe relevant asset category immediately the asset is available for use and depreciatedaccordingly.

When the use of a property changes from owner-occupied to investment property, the property ismeasured at cost less accumulated depreciation and impairment and it is depreciated over theremaining useful life after reclassification.

Investment properties are properties held to earn rentals and/or for capital appreciation (includingproperty under construction for such purposes). Investment properties are measured initially at cost,including transaction costs. Subsequent to initial recognition, investment properties are measured atcost less accumulated depreciation using the straight-line method.

An investment property is derecognized upon disposal or when the investment property ispermanently withdrawn from use and no future economic benefits are expected from the disposal.Any gain or loss arising on the derecognition of the property (calculated as the difference betweenthe net disposal proceeds and the carrying amount of the asset) is included in profit or loss in theperiod in which the property is derecognized.

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or otheramount substituted for cost, less its residual value.Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful livesof each part of an item of property, plant and equipment, which reflects the expected pattern ofconsumption of the future economic benefits embodied in the asset. Leased assets aredepreciated over the shorter of the lease term and their useful lives unless it is reasonably certainthat the Group will obtain ownership by the end of the lease term in which case the assets aredepreciated over the useful life.

The estimated useful lives for the current and comparative periods are as follows:

Over the lease period

on unit of production

Depreciation methods, useful lives and residual values are reviewed at each financial year endand adjusted if appropriate.

37


31 December 2016

Notes to the consolidated and separate financial statementsG

i. Goodwill

ii. Other Intangible assets

Subsequent expenditure

iii. Amortization of Intangible assets other than goodwill

iv. De-recognition of intangible assets

H LeasesDetermining whether an arrangement contains a lease

(a)(b) the arrangement conveys a right to use the asset

fulfilment of the arrangement is dependent on the use of a specific asset or assets ; and

At inception or on reassessment of an arrangement that contains a lease, the Group/Companyseparates payments and other consideration required by the arrangement into those for the leaseand those for other elements on the basis of their relative fair values.

If the Group/Company concludes for a finance lease that it is impracticable to separate thepayments reliably, then an asset and a liability are recognized at an amount equal to the fairvalue of the underlying asset; subsequently, the liability is reduced as payments are made and animputed finance cost on the liability is recognized using the Group/Company's incrementalborrowing rate.

The Group's other intangible asset with finite useful life is software.

Subsequent expenditure is capitalized only when it increases the future economic benefitsembodied in the specific intangible asset to which it relates. All other expenditure, includingexpenditure on internally generated goodwill and brands, is recognized in profit or loss asincurred.

Amortization is calculated to write off the cost of intangible assets less their estimated residualvalues using the straight-line method over their estimated useful lives, and is recognized in profitor loss. Goodwill is not amortized.

The estimated useful lives for the software for current and comparative periods is 3 years.

Intangible asset is derecognized upon disposal or when the asset is permanently withdrawn fromuse and no future economic benefits are expected from the disposal. Any gain or loss arising onthe derecognition of the asset (calculated as the difference between the net disposal proceeds andthe carrying amount of the asset) is included in profit or loss in the period in which the asset isderecognized.

At inception of an arrangement, the Group/Company determines whether the arrangement is orcontains a lease and performs an assessment of whether:

Intangible assets

Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. Formeasurement of goodwill at initial recognition, see Note 3A (i).

Subsequent measurementGoodwill is measured at cost less accumulated impairment losses. In respect of equity accountedinvestees, the carrying amount of goodwill is included in the carrying amount of the investment.Goodwill is not amortized but tested for impairment annually or more frequently if events orchanges in circumstances indicate that it might be impaired.

Other intangible assets that are acquired by the Group/Company and have finite useful lives aremeasured at cost less accumulated amortization and accumulated impairment losses.

38


31 December 2016

Notes to the consolidated and separate financial statementsi Leased assets as Lessee

ii Lease payments as Lessee

iii

I Inventories

J Impairmenti Non-derivative financial assets

Inventory-in-transit - purchase cost incurred to date.Net realizable value is the estimated selling price in the ordinary course of business, less theestimated costs to completion and selling expensesSlow moving and obsolete inventory items are written off to profit or loss.

A financial asset subsequently measured at amortized cost, is assessed at each reporting date todetermine whether there is objective evidence that it is impaired. A financial asset is impaired ifobjective evidence indicates that a loss event has occurred after the initial recognition of theasset, and that the loss event had a negative effect on the estimated future cash flows of thatasset that can be reliably estimated.

Minimum lease payments made under finance leases are apportioned between the financeexpense and the reduction of the outstanding liability. The finance expense is allocated to eachperiod during the lease term so as to produce a constant periodic rate of interest on the remainingbalance of the liability.

Leased assets as LessorRental income from operating leases is recognized on a straight-line basis over the term of therelevant lease. Initial direct costs incurred in negotiating and arranging an operating lease areadded to the carrying amount of the leased asset and recognized on a straight-line basis over thelease term.

Inventories are measured at the lower of cost and net realizable value. The cost of inventoriesincludes expenditure incurred in acquiring the inventories, production or conversion costs and othercosts incurred in bringing them to their existing location and condition. The basis of costing is asfollows:

Raw materials, spare parts, consumables and purchased finished goods - purchase cost on a weightedaverage basis including transportation and clearing costs.

Finished products and products-in-process - weighted average cost of direct materials, labour costsand a proportion of production overheads based on normal operating capacity.

Leases in terms of which the Group assumes substantially all the risks and rewards of ownershipare classified as finance leases. Upon initial recognition the leased asset is measured at anamount equal to the lower of its fair value and the present value of the minimum lease payments.Subsequent to initial recognition, the asset is accounted for in accordance with the accountingpolicy applicable to that asset.

Other leases are operating leases and the leased assets are not recognized in the Group'sstatement of financial position.

Payments made under operating leases are recognized in profit or loss on a straight-line basisover the term of the lease. Lease incentives received are recognized as an integral part of thetotal lease expense, over the term of the lease.

39


31 December 2016


ii

The recoverable amount of an asset or cash-generating unit is the greater of its value in use andits fair value less costs to sell. In assessing value in use, the estimated future cash flows arediscounted to their present value using a pre-tax discount rate that reflects current marketassessments of the time value of money and the risks specific to the asset. For the purpose ofimpairment testing, assets that cannot be tested individually are grouped together into thesmallest group of assets that generates cash inflows from continuing use that are largelyindependent of the cash inflows of other assets or groups of assets (the “cash-generating unit, orCGU”). For the purposes of goodwill impairment testing, goodwill acquired in a businesscombination is allocated to the CGU, or the group of CGUs, that is expected to benefit from thesynergies of the combination. This allocation is subject to an operating segment ceiling test andreflects the lowest level at which that goodwill is monitored for internal reporting purposes.

The Group's corporate assets do not generate separate cash inflows. If there is an indication thata corporate asset may be impaired, then the recoverable amount is determined for the CGU towhich the corporate asset belongs.

Objective evidence that financial assets are impaired can include default or delinquency by adebtor, restructuring of an amount due to the Group/Company on terms that the Group/Companywould not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or thedisappearance of an active market for a security. In addition, for an investment in an equitysecurity, a significant or prolonged decline in its fair value below its cost is objective evidenceof impairment.

The Group considers evidence of impairment for receivables at both a specific asset andcollective level. All individually significant receivables are assessed for specific impairment. Allindividually significant receivables found not to be specifically impaired are then collectivelyassessed for any impairment that has been incurred but not yet identified. Receivables that arenot individually significant are collectively assessed for impairment by grouping togetherreceivables with similar risk characteristics.

In assessing collective impairment the Group uses historical trends of the probability of default,timing of recoveries and the amount of loss incurred, adjusted for management's judgment as towhether current economic and credit conditions are such that the actual losses are likely to begreater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as thedifference between its carrying amount and the present value of the estimated future cash flowsdiscounted at the asset's original effective interest rate. Losses are recognized in profit or lossand reflected in an allowance account against receivables. Interest on the impaired assetcontinues to be recognized through the unwinding of the discount. When a subsequent eventcauses the amount of impairment loss to decrease, the decrease in impairment loss is reversedthrough profit or loss.

Non-financial assetsThe carrying amounts of the Group's non-financial assets are reviewed at each reporting date todetermine whether there is any indication of impairment. If any such indication exists, then theasset's recoverable amount is estimated. For goodwill and intangible assets that have indefiniteuseful lives or that are not yet available for use, the recoverable amount is estimated each year atthe same time.

40


31 December 2016


K Employee benefitsi.

ii. Defined contribution plans

iii Defined benefit gratuity scheme

Short-term employee benefits are expensed as the related service is provided. A liability isrecognized for the amount expected to be paid if the Group has a present legal or constructiveobligation to pay this amount as a result of past service provided by the employee and theobligation can be estimated reliably.

A defined contribution plan is a post-employment benefit plan (pension fund) under which theGroup/Company pays fixed contributions into a separate entity. The Group/Company has nolegal or constructive obligations to pay further contributions if the fund does not hold sufficientassets to pay all employees the benefits relating to employee service in the current and priorperiods.

In line with the provisions of the Pension Reform Act 2014, the Group/Company has instituted adefined contribution pension scheme for its permanent staff. Staff contributions to the schemeare funded through payroll deductions while the Group/Company's contribution is recognized inprofit or loss as employee benefit expense in the periods during which services are rendered byemployees. Employees contribute 8% of their basic salary, housing and transport allowances andthe Company contributes 10% of each employee's basic salary, housing and transport allowancesto the Scheme.

The Group has a defined benefit gratuity scheme for all its permanent Nigerian employees. TheGroup's net obligation in respect of defined benefit scheme is calculated by estimating theamount of future benefit that employees have earned in return for their service in the current andprior periods and that benefit is discounted to determine its present value. In determining theliability for employee benefits under the defined benefit scheme, consideration is given to futureincreases in salary rates and the Company's experience with staff turnover.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds itsestimated recoverable amount. Impairment losses are recognized in profit or loss. Impairmentlosses recognized in respect of CGUs are allocated first to reduce the carrying amount of anygoodwill allocated to the units, and then to reduce the carrying amounts of the other assets in theunit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairmentlosses recognized in prior periods are assessed at each reporting date for any indications that theloss has decreased or no longer exists. An impairment loss is reversed if there has been a changein the estimates used to determine the recoverable amount. An impairment loss is reversed onlyto the extent that the asset's carrying amount does not exceed the carrying amount that wouldhave been determined, net of depreciation or amortization, if no impairment loss had beenrecognized.Goodwill that forms part of the carrying amount of an investment in an associate is notrecognized separately, and therefore is not tested for impairment separately. Instead, the entireamount of the investment in an associate is tested for impairment as a single asset when there isobjective evidence that the investment in an associate may be impaired.

Short-term employee benefits

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31 December 2016


Defined benefit costs are categorised as follows:

* Net interest expense; and* Remeasurements

iv

v Termination Benefits

L Provisions and contingent liabilitiesi Provisions

Long service awardThe Group operates long service award for its qualified staff. The benefits are graduateddepending on the employees number of years in service to the group. The Group's obligation inrespect of the scheme is the amount of future benefits that employees have earned in return fortheir service in the current and prior periods. The benefit is discounted to determine its presentvalue. The discount rate is the yield at the reporting date on Federal Government of Nigeriaissued bonds that have maturity dates approximate to the term of the Group's defined benefitsobligation. The obligation is determined by an independent actuary at each reporting period.When the benefits of a plan are changed or when a plan is curtailed, the resulting change inbenefit that relates to past service or the gain or loss on curtailment is recognised immediately inprofit or loss. The Group recognises gains and losses on the settlement of a defined benefit planwhen the settlement occurs. Gains or losses due to remeasurement of tong service awards arerecognised in profit or loss.

Termination benefits are recognized as an expense when the Company is committeddemonstrably, without realistic possibility of withdrawal, to a formal detailed plan to eitherterminate employment before the normal retirement date, or to provide termination benefits as aresult of an offer made to encourage voluntary redundancy. Termination benefits for voluntaryredundancies are recognized as an expense if the Company has made an offer of voluntaryredundancy, it is probable that the offer will be accepted, and the number of acceptances can beestimated reliably. If benefits are payable more than 12 months after the reporting period, thenthey are discounted to their present value.

A provision is recognized if, as a result of a past event, the Group/Company has a present legal orconstructive obligation that can be estimated reliably, and it is probable that an outflow of economicbenefits will be required to settle the obligation. Provisions are determined by discounting theexpected future cash flows at a pre-tax rate that reflects current market assessments of the time valueof money and the risks specific to the liability. The unwinding of the discount is recognized asfinance cost.

The recognized liability is determined by an independent actuarial valuation every year using theprojected unit credit method. Actuarial gains and losses arising from differences between theactual and expected outcome in the valuation of the obligation are recognized fully in othercomprehensive income. The effect of any curtailment is recognized in full in the profit or lossimmediately the curtailment occurs. The discount rate is the yield on Federal Government ofNigeria issued bonds that have maturity dates approximating the tenure of the Group'sobligation. Although the scheme is not funded, the Group ensures that adequate arrangementsare in place to meet its obligations under the scheme.

* Service costs (including current service cost, past service cost, as well as gains and losses onsettlements or curtailments);

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31 December 2016


ii Contingent Liabilities

M Revenuei Sale of goods

ii Rendering of Services

iii. Investment property rental income

Contingent liabilities are only disclosed and not recognized as liabilities in the statement of financialposition. If the likelihood of an outflow of resources is remote, the possible obligation is neither aprovision nor a contingent liability and no disclosure is made.

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value ofthe consideration received or receivable, net of value added tax, sales returns, trade discounts andvolume rebates. Revenue is recognized when persuasive evidence exists that the significant risks andrewards of ownership have been transferred to the buyer, recovery of the consideration is probableand there is no continuing management involvement with the goods and the amount of revenue canbe measured reliably.

If it is probable that discounts will be granted and the amount can be measured reliably, then thediscount is recognized as a reduction of revenue as the sales are recognized.

Revenue from a contract to provide services is recognized by reference to the stage of completion ofthe contract. The stage of completion of the contract is determined as follows:• Servicing fees included in the price of products sold are recognized by reference to the proportionof the total cost of providing the service for the product sold, taking into account historical trends inthe number of services actually provided on past goods sold; and• Revenue from time, distance and material contracts is recognized at the contractual rates as labourhours are delivered, distance is covered and direct are expenses incurred.

Rental income from investment property is recognized as revenue on a straight-line basis over theterm of the lease. Lease incentives granted are recognized as an integral part of the total rentalincome, over the term of the lease.

A provision for restructuring is recognized when the Group has approved a detailed and formalrestructuring plan, and the restructuring either has commenced or has been announced publicly.Future operating losses are not provided for.

A contingent liability is a possible obligation that arises from past events and whose existence will beconfirmed only by the occurrence or non-occurrence of one or more uncertain future events notwholly within the control of the company, or a present obligation that arises from past events but isnot recognized because it is not probable that an outflow of resources embodying economic benefitswill be required to settle the obligation; or the amount of the obligation cannot be measured withsufficient reliability.

43


31 December 2016

Notes to the consolidated and separate financial statementsN Finance income and finance costs

O Income and deferred taxes

i)

ii)

iii) temporary differences arising on the initial recognition of goodwill.In determining the amount of current and deferred tax, the Group/Company takes into account the impactof uncertain tax positions and whether additional taxes and interest may be due. The assessment relies onestimates and assumptions and may involve a series of judgments about future event. New informationmay become available that causes the company to adjust its judgments regarding the adequacy of existingtax liabilities; such changes to the tax liabilities will impact tax expenses in the period that such adetermination is made.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences whenthey reverse, based on the laws that have been enacted or substantively enacted by the reporting date.Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current taxliabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxableentity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basisor their tax assets and liabilities will be realized simultaneously.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assetsand liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxis not recognized for the following temporary differences:

the initial recognition of assets or liabilities in a transaction that is not a business combination andthat affects neither accounting nor taxable profit or lossdifferences relating to investments in subsidiaries and jointly controlled entities to the extent that it isprobable that they will not reverse in the foreseeable future

Finance income comprises interest income on funds invested (including available-for-sale financialassets), gains on the disposal of available-for-sale financial assets, changes in the fair value of financialassets at fair value through profit or loss. Interest income is recognized as it accrues in profit or loss,using the effective interest method.

Finance costs comprise interest expense on borrowings, unwinding of the discount on employee benefits,changes in the fair value of financial assets at fair value through profit or loss and impairment lossesrecognized on financial assets except finance costs that are directly attributable to the acquisition,construction or production of a qualifying asset which are capitalized as part of the related assets andrecognized in profit or loss using the effective interest method.

Foreign currency gains and losses are reported on a net basis and presented in finance cost or financeincome depending on the net position of currency exchange rate movements.

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized inprofit or loss except to the extent that it relates to a business combination, or items recognized directly inequity or in other comprehensive income.Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using taxrates statutorily enacted at the reporting date, and any adjustment to tax payable in respect of previousyears.

Deferred tax is recognized in profit or loss account except to the extent that it relates to a transaction thatis recognized directly in equity or other comprehensive income. A deferred tax asset is recognized only tothe extent that it is probable that future taxable profits will be available against which the amount will beutilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related taxbenefit will be realized.

44


31 December 2016

Notes to the consolidated and separate financial statementsP Earnings Per Share

Q Segment reporting

R Statement of cash flows

S DividendsDividends are recognized as liability in the period they are declared.

The statement of cash flows is prepared using the indirect method. Changes in statement of financialposition items that have not resulted in cash flows such as translation differences, fair value changes,equity-settled share-based payments and other non-cash items have been eliminated for the purpose ofpreparing the statement. Dividends paid to ordinary shareholders are included in financing activities.Interest paid is also included in financing activities while finance income is included in investingactivities.

Dividends which remained unclaimed for a period exceeding twelve (12) years from the date ofdeclaration and which are no longer actionable by shareholders in accordance with Section 385 of theCompanies and Allied Matters Act CAP C.20 Laws of the Federation of Nigeria, 2004 are written backto retained earnings.

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPSis calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by theweighted average number of ordinary shares outstanding during the period, adjusted for own shares held.Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and theweighted average number of ordinary shares outstanding, adjusted for own shares held and for the effectsof all dilutive potential ordinary shares.

An operating segment is a distinguishable component of the Group that earns revenue and incursexpenditure from providing related products or services (business segment), or providing products orservices within a particular economic environment (geographical segment), and which is subject to risksand returns that are different from those of other segments.

The Group's primary format for segment reporting is based on business segments. The business segmentsare determined by management based on the Group/Company's internal reporting structure.All operating segments' operating results are reviewed regularly by the Executive Committee, which isconsidered to be the chief operating decision maker for the Group to make decisions about resources tobe allocated to the segments and assess segments performance, and for which discrete financialinformation is available. Where applicable, Segment results that are reported include items directlyattributable to a segment as well as those that can be allocated on a reasonable basis.

Section 108(b)(1-11) requires that all unclaimed dividends in the custody of the Registrars shall be returned to the paying company twelve (12) months after the date of approval of dividends at a general meeting and evidence of remittance forwarded to the Commission within 24 hours.

45


31 December 2016

Notes to the consolidated and separate financial statementsT Standards and interpretations not yet adopted

Effective for the financial year commencing on or after 1 January 2017- Amendments to IAS 7 - Statement of cash flows- Amendments to IAS 12 - Income taxesEffective for the financial year commencing on or after 1 January 2018- IFRS 9 - Financial instruments- IFRS 15 - Revenue from contracts with customers- IFRIC 22 - Foreign Currency Transactions and Advance Consideration- Amendments to IAS 40 - Investment Property

Effective for the financial year commencing on or after 1 January 2019- IFRS 16 - Leases

Standard available for optional adoption-

Standards not applicable

- Amendments to IFRS 4 - Insurance Contracts- Amendments to IFRS 2 - Share-based Payments

Except for those Standards, Amendments to Standards and Interpretations that are not applicable to theentity, all Standards, Amendments to Standards and Interpretations will be adopted at their effective dateunless otherwise indicated.

At the date of authorization of the financial statements of the Group for the year ended 31 December2016, the following Standards, Amendments to Standards and Interpretations were in issue but not yeteffective:

Amendments to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and itsAssociate or Joint Venture (Associates and Joint Ventures: Asset Transactions).

The following Amendments to Standards are not applicable to the business of the entity and willtherefore have no impact on future financial statements:

46


31 December 2016

Date issuedby IASB

Effective date (Annual periods beginning on or after )

Amendmentsto IFRS 10 andIAS 28

Sale or Contributionof Assets between an investor and its Associate or JointVenture

September 2014

The effective date of thisamendment has been deferred indefinitely bythe IASB.Early adoption is permitted

The amendments require the full gain to be recognised when assets transferred between aninvestor and its associate or joint venture meet the definition of a ‘business’ under IFRS 3Business Combinations. Where the assets transferred do not meet the definition of a business,a partial gain to the extent of unrelated investors’ interests in the associate or joint venture isrecognised. The definition of a business is key to determining the extent of the gain to berecognised.

The Group/Company will adopt the amendments when they become effective.

Standard/ Interpretation Summary of the requirements and assessment of impact

Amendments to IAS 7 Disclosure Initiative January 2016

1 January 2017; Early adoption is permitted

The amendments provide for disclosures that enable users of financial statements to evaluatechanges in liabilities arising from financing activities, including both changes arising fromcash flow and non-cash changes. This includes providing a reconciliation between theopening and closing balances arising from financing activities.

The Group/Company will adopt the amendments for the year ending 31 December 2017.

Amendments to IAS 12

Recognition of DeferredTax Assets for Unrealised Losses

January 20161 January 2017; Early adoption is permitted

The amendments provide additional guidance on the existence of deductible temporarydifferences, which depend solely on a comparison of the carrying amount of an asset and itstax base at the end of the reporting period, and is not affected by possible future changes inthe carrying amount or expected manner of recovery of the asset.The amendments also provide additional guidance on the methods used to calculate futuretaxable profit to establish whether a deferred tax asset can be recognised.Guidance is provided where an entity may assume that it will recover an asset for more thanits carrying amount, provided that there is sufficientevidence that it is probable that the entity will achieve this.Guidance is provided for deductible temporary differences related to unrealised losses are notassessed separately for recognition. These areassessed on a combined basis, unless a tax law restricts the use of losses to deductionsagainst income of a specific type.

The amendment is not expected to have any significant impact on the (consolidated) financialstatements of the Group/ Company. The Group/ Company will adopt the amendments for theyear ending 31 December 2017.

47


31 December 2016

IFRS 9 Financial Instruments July 20141 January 2018; Early adoption is permitted

IFRS 15Revenue from contracts with customers

May 2014 1 January 2018; Early adoption is permitted

This standard replaces IAS 11 - Construction Contracts, IAS 18 - Revenue, IFRIC 13 -Customer Loyalty Programmes, IFRIC 15 - Agreements for the Construction of Real Estate,IFRIC 18 - Transfer of Assets from Customers and SIC-31 Revenue – Barter of TransactionsInvolving Advertising Services.

The standard contains a single model that applies to contracts with customers and twoapproaches to recognizing revenue: at a point in time or over time. The model features acontract-based five-step analysis of transactions to determine whether, how much and whenrevenue is recognized.This new standard will most likely have a significant impact on the Group, which will include a possible change in the timing of when revenue is recognized and the amount of revenuerecognized.

The Group is yet to carry-out an assessment to determine the impact that the initialapplication of IFRS 15 could have on its business; however, the Group will adopt thestandard for the year ending 31 December 2018.

On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, whichreplaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39Financial Instruments: Recognition and Measurement.IFRS 9 includes revised guidance on the classification and measurement of financialinstruments, a new expected credit loss model for calculating impairment on financial assets,and new general hedge accounting requirements. It also carries forward the guidance onrecognition and derecognition of financial instruments from IAS 39.

The Group (or Company) is yet to carry-out an assessment to determine the impact that theinitial application of IFRS 9 could have on its business; however, the Group/Company willadopt the standard for the year ending 31 December 2018.

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31 December 2016

IFRIC 22

Foreign CurrencyTransactions and Advance Consideration

December 2016

1 January 2018; Early adoption is permitted

IFRS 16 Leases January 2016

1 January 2019;Early adoption is permitted only for entities that adopt IFRS 15 Revenue from Contracts with Customers, at or before the date of initial application of IFRS 16.

The amendments provide guidance on the transaction date to be used in determining the exchange rate for translation of foreign currencytransactions involving an advance payment or receipt.The amendments clarifies that the transaction date is the date on which the Company initially recognises the prepayment or deferred incomearising from the advance consideration. For transactions involving multiple payments or receipts, each payment or receipt gives rise to aseparate transaction date.The interpretation applies when a Company:• pays or receives consideration in a foreigncurrency; and• recognises a non-monetary asset or liability – eg. non-refundable advance consideration –before recognising the related item.

The Group/Company will adopt the amendments for the year ending 31 December 2018.

IFRS 16 replaces IAS 17 Leases, IFRIC 4 - Determining whether an Arrangement contains aLease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance ofTransactions Involving the Legal Form of a Lease. The standard sets out the principles for therecognition, measurement, presentation and disclosure of leases for both parties to a contract,i.e. the customer (‘lessee’) and the supplier (‘lessor’). IFRS 16 eliminates the classification ofleases as operating leases or finance leases as required by IAS 17 and introduces a singlelessee accounting model. Applying that model, a lessee is required to recognize:(a) assets and liabilities for all leases with a term of more than 12 months, unless theunderlying asset is of low value; and(b) depreciation of lease assets separately from interest on lease liabilities in the profit or loss.

For the lessor, IFRS 16 substantially carries forward the lessor accounting requirements inIAS 17. Accordingly, a lessor continues to classify its leases as operating leases or financeleases, and to account for those two types of leases differently.

The Group is yet to carry out an assessment to determine the impact on its business; however,the Group will adopt the standard for the year ending 31 December 2019.

49


31 December 2016

Amendmentsto IAS 40

Transfers ofInvestmentProperty

December 2016

1 January 2018Early adoption ispermitted

The IASB has amended the requirements of IAS 40 Investment Property on when a Companyshould transfer a property to, or from,investment property.The amendments state that a transfer is made when and only when there is a change in use –i.e. an asset ceases to meet the definitionof investment property and there is evidence of a change in use. A change in managementintention alone does not support a transfer.A company has a choice on transition to apply:• the prospective approach – i.e. apply the amendments to transfers that occur after the date ofinitial application – and also reassess the classification of property assets held at that date; or• the retrospective approach – i.e. apply the amendments retrospectively, but only if it doesnot involve the use of hindsight.The Group/Company will adopt the amendments for the year ending 31 December 2018.

50


31 December 2016


4 Standards and interpretations effective 31 December 2016

• Amendments to IFRS 11 - Accounting for acquisitions of interests in joint operations•

• Amendments to IAS 27 - Equity method in separate financial statements• Amendments to IAS 1 - Disclosure Initiatives• Annual Improvements to IFRSs 2012 - 2014 Cycle - various standards

5 Determination of fair values

i) Trade and other receivables

ii) Non-derivative financial instruments

New IFRS standards and amendments to existing standards that became effective for annual periods endingon or after 31 December 2016 have been applied in preparing the financial statements and resulted inadditional disclosures but had no significant impact on the measurements of the Group’s assets andliabilities.

Amendments to IAS 16 and IAS 38 - Clarification of acceptable methods of depreciation and amortization

A number of the Group/Company's accounting policies and disclosures require the determination of fair value,for both financial and non-financial assets and liabilities. See Note 29(B) for basis of determination of fairvalue for financial assets and liabilities. When applicable, further information about the assumptions made indetermining fair values is disclosed in the notes specific to that asset or liability.

The fair value of trade and other receivables is estimated as the present value of future cash flows,discounted at the market rate of interest at the reporting date. This fair value is determined for disclosurepurposes. For short term trade receivables, no disclosure of fair value is presented when the carrying amountis a reasonable approximation of fair value.

Fair value, which is determined for disclosure purposes, is calculated based on the present value of futureprincipal and interest cash flows, discounted at the market rate of interest at the reporting date.

51


31 December 2016

Notes to the consolidated and separate financial statements6 Revenue

In thousands of naira 2016 2015 2016 2015Revenue from sales of goods 6,410,818 5,323,599 3,618,292 3,039,361 Investment property rental income 1,484,654 1,357,354 1,407,830 1,256,996

4,882,434 5,854,908 4,835,058 5,674,297 12,777,906 12,535,861 9,861,180 9,970,654

7 Finance income and finance cost7.1

In thousands of naira 2016 2015 2016 2015 149,902 170,047 143,768 150,910

- - 5,083 168,800 30,003 33,646 30,003 33,646 179,905 203,693 178,854 353,356

7.2In thousands of naira 2016 2015 2016 2015Interest on bank overdrafts 400,877 444,491 111,676 198,965

446,296 494,835 446,296 494,835 Net foreign exchange loss 1,130,020 84,015 925,640 32,432

1,977,193 1,023,341 1,483,612 726,232

7.3 Finance income per statement of cash flowsIn thousands of naira 2016 2015 2016 2015From continuing operations 179,905 203,693 178,854 353,356 Interest receivable (12,330) - (17,208) -

(30,003) (33,646) (30,003) (33,646) 137,572 170,047 131,643 319,710

7.4In thousands of naira 2016 2015 2016 2015Interest on bank overdrafts 400,877 444,491 111,676 198,965

446,296 494,835 446,296 494,835 Net realised foreign exchange loss 1,033,426 45,977 824,166 32,432

1,880,599 985,303 1,382,138 726,232

Interest on obligation under finance lease



The following is an analysis of the Group's revenue for the year from continuing operations

Revenue from rendering of services

Finance income comprises the following:

Interest on bank depositsInterest on loans to related partiesAmortized gain on sale and lease back

Interest on obligation under finance lease

Finance costs comprise the following:

Amortized gain on sale and lease back

Finance costs per statement of cash flows




Revenue represents the invoiced value of goods sold, services rendered and rental income, and is stated net ofVAT and discounts.For the year ended 31 December 2016, the Group has deferred revenue of N485 million (2015: N640 million) relating to investment property rentals (see Note 28).

52


31 December 2016


8 Expense by nature8.1 Cost of sales

In thousands of naira 2016 2015 2016 2015Salaries and allowances 1,268,878 1,216,991 1,076,348 989,331 Other related staff cost 76,349 65,120 71,829 50,214

5,049,892 4,006,569 5,049,892 4,007,747 Rental services 648,938 640,194 646,939 502,677 Depreciation 1,061,025 979,892 932,460 879,813 Other factory cost 463,144 315,658 - - Raw material cost 2,033,578 1,145,605 - -

10,601,804 8,370,029 7,777,468 6,429,782

8.2 Selling and distribution

In thousands of naira 2016 2015 2016 2015Salaries and allowances 223,203 224,222 123,270 118,047 Other related staff cost 8,714 27,782 8,714 21,899 Travel and subsistence 25,539 25,762 13,336 12,418 Telephone, postages and courier 20,872 20,493 18,201 17,721 Repairs and maintenance 79,081 65,409 47,226 33,391

38,047 86,875 33,477 38,014

Bad debts expense 29,675 172,007 14,726 142,766 Advert and promotions 22,208 72,829 3,601 11,612 Commissions 133,151 86,059 120,869 73,778

580,490 781,438 383,420 469,646

Engines, spare parts and maintenance

Carriage, sanitation and other selling expenses


The CompanyThe Group

53


31 December 2016


8.3 Administrative expensesIn thousands of naira 2016 2015 2016 2015Directors' remuneration 58,433 39,738 55,324 39,493 Salaries and allowances 821,519 692,895 651,122 598,950 Other staff related cost 142,393 73,583 56,182 68,284

461,877 175,963 460,339 168,748

107,831 300,244 70,483 260,008

Subscription and publication 30,259 31,027 29,266 28,192 Insurance and licensing 50,323 49,656 46,518 44,007 Electricity 37,275 19,189 16,216 18,315 Telephone, postages and courier 29,393 23,526 25,864 21,945 Audit fee 32,141 29,500 20,000 17,100 Repairs, maintenance and fuel 175,439 71,364 132,509 46,840 Travel and subsistence 104,362 83,745 92,657 56,756 Bank charges 26,297 21,196 21,803 16,761 Rent and rates 92,678 30,814 77,191 57,485

68,760 82,455 62,569 62,454 Donations 2,497 2,041 2,497 2,034 Depreciation and amortization 324,188 372,871 251,299 297,905 Write-off of property, plant and equipment and investment properties 84,511 36,001 81,565 20,762

Goodwill impairment 4,486 2,726 - - Write off of Investments - 163,185 - 163,185 Impairment of receivable from subsidiary - - 893,600 - Impairment of investments in subsidiaries - 31,495 1,487,079 31,495

2,654,662 2,333,214 4,534,083 2,020,719

Entertainment, security and internet

Training, developments and projectsLegal, administration and other professional expenses


54


31 December 2016


8.4 Summarized as follows:In thousands of naira 2016 2015 2016 2015Employee benefits 2,541,056 2,300,593 1,987,465 1,846,725 Engines, spare parts and maintenance 5,049,892 4,006,569 5,049,892 4,007,747 Depreciation and amortization 1,385,213 1,352,763 1,183,759 1,177,718 Raw materials, consumables and other factory costs 2,496,722 1,461,263 - -

Write-off of property, plant and equipment and investment properties 84,511 36,001 81,565 20,762

Consultancy, agency and professional services 273,123 413,077 211,352 350,886 Rent, subscriptions and insurance 173,260 111,497 152,975 129,684 Repairs and maintenance 254,520 136,773 179,735 80,231 Impairment of investment in subsidiary - 31,495 1,487,079 31,495 Impairment of receivable from subsidiary - - 893,600 - Write off of investment - 163,185 - 163,185 Bad debts expense 29,675 172,007 14,726 142,766 Training, developments and projects 461,877 175,963 460,339 168,748 Adverts and promotions 22,208 72,829 3,601 11,612 Directors remuneration 58,433 39,738 55,324 39,493 Travels, telephone and postages 180,166 153,526 150,058 108,840 Cleaning, security and entertainment 755,745 812,250 742,985 603,145 Other sundry expenses 66,069 42,426 40,516 37,110 Goodwill impairment 4,486 2,726 - - Total cost of sales, selling and distribution and administrative expenses 13,836,956 11,484,681 12,694,971 8,920,147


55


31 December 2016

Notes to the consolidated and separate financial statements9 Other income


Insurance claims - 32,735 - 32,735 Sales of scrap 25,054 63,995 10,503 15,494

34,389 102,830 11,560 53,164

10 Employee Benefits

In thousands of naira 2016 2015 2016 2015 289,664 374,689 255,025 306,752 55,060 48,291 43,536 36,244

Total employee benefit liabilities 344,724 422,980 298,561 342,996

10.1 Movement in present value of the defined benefit (gratuity) obligation

In thousands of naira 2016 2015 2016 2015

Defined benefits obligations at 1 January 374,689 444,205 306,752 308,325 Benefits paid during the year (25,379) (79,636)Current service costs 49,527 62,540 40,566 43,995 Interest cost 42,311 - 34,281 -

(108,943) 19,667 Net Transfer (ii) - - 7,748 14,401

289,664 374,689 255,025 306,752

Defined benefit expense recognized in profit or loss for defined benefit.

In thousands of naira 2016 2015 2016 2015Current service cost 49,527 62,540 40,566 43,995 Interest cost 42,311 - 34,281 - Net transfer - - 7,748 14,401

91,838 62,540 82,595 58,396

10.2 Movement in other long-term employee benefitsThe movement in long service awards benefit plan liability during the year was as follows:

In thousands of naira 2016 2015 2016 2015Obligation at 1 January 48,291 - 36,244 - Benefits paid during the year (3,526) - (2,572) - Current service costs 14,504 48,291 11,450 36,244 Interest cost 5,598 - 4,193 -

(9,807) - (5,779) - Obligation at 31 December 55,060 48,291 43,536 36,244

Long service awards expense recognized in the income statement :

In thousands of naira 2016 2015 2016 2015Current service cost 14,504 48,291 11,450 36,244 Interest cost 5,598 - 4,193 -

(9,807) - (5,779) - 10,295 48,291 9,864 36,244

The Company

Gains on disposal of property, plant and equipment

Recognized liability for defined benefit (gratuity) obligation (Note 10.1)Recognized liability for other long term employee benefits (Note 10.2)

(53,271)

(123,592) (26,908)

(105,148)

The Group

Actuarial (gains)/losses recognized in other comprehensive income (Note 10.5)

Defined benefits obligations at 31 December

(ii) During the year, the defined benefit(gratuity) obligations of members of staff of other companies within the Group was transferred toA.G. Leventis (Nigeria) Plc following the transfer of the relevant employees to the company.

Actuarial (gains)/losses recognized in profit or loss

Actuarial (gains)/losses recognized in profit or loss




The Company


The Group

56


31 December 2016

Notes to the consolidated and separate financial statements10.3 Pension payable

In thousands of naira 2016 2015 2016 2015Obligation at 1 January 70,743 63,503 32,842 33,146 Charge for the year:Employer's contribution 86,435 130,649 79,522 97,635 Employees' contribution 73,002 104,520 64,285 78,108 Remittance (173,329) (227,929) (121,242) (176,047)Obligation at 31 December 56,851 70,743 55,407 32,842

10.4 The employee benefits related expenses are recognized in the following line items in profit or loss:

The Group2016 2015 2016 2015 2016 2015

27,578 17,814 64,260 44,726 91,838 62,540 21,136 63,366 65,299 67,283 86,435 130,649 3,130 14,682 7,165 33,609 10,295 48,291 51,844 95,862 136,724 145,618 188,568 241,480

Company

2016 2015 2016 2015 2016 2015 16,879 9,268 65,716 34,727 82,595 43,995 20,421 47,585 59,101 50,050 79,522 97,635 1,449 7,635 8,039 28,609 9,488 36,244 38,749 64,488 132,856 113,386 171,605 177,874

10.5

In thousands of naira 2016 2015 2016 2015Cumulative amount at 1 January (246,508) (216,739) (80,883) (94,650) Recognized during the year - (gains)/loss (123,592) (26,909) (108,943) 19,667 Deferred tax 39,549 (2,860) 34,862 (5,900)Recognized during the year net of tax (84,043) (29,769) (74,081) 13,767

(330,551) (246,508) (154,964) (80,883)

In thousands of naira 2016 2015 2016 2015Change in assumptions - losses/(gains) (99,068) 66,672 (84,168) 53,420 Experience Assumptions - (gains) (24,524) (93,581) (24,775) (33,753)Realized during the year (123,592) (26,909) (108,943) 19,667

10.6 Actuarial assumptionsPrincipal actuarial assumptions at the reporting date (expressed as weighted averages):

2016 2015Discount rate (p.a) 15.8% 12%Average pay increase (p.a) 12% 12%Average rate of inflation (p.a) 12% 9%

These assumptions depict management's estimate of the likely future experience of the company.

In thousands of nairaDefined benefit obligation planDefined contribution plan (pension) Note 10.3Long service awards expense

Amount accumulated in other reserves at 31 December

The Company

Actuarial (gains)/losses during the year primarily relate to changes in assumptions and experience adjustment. The actuarial gains andlosses recognized during the year are analyzed as follows:


Total

Cost of sales

Cost of sales

Defined benefit obligation expenseDefined contribution plan (pension) Note 10.3Long service awards expense

In thousands of naira

Administrative & Selling expenses Total


Pension payable represents amount due under a defined contribution scheme in which the employer and employee contribute 10% and 8%respectively of basic salary, housing and transport allowances.The balance on the pension payable account, included in trade and other payables represents the amount due to Pension FundAdministrators which is yet to be remitted at the year end. The movement on this account during the year was as follows:

Administrative & Selling expenses

Due to unavailability of published reliable demographic data in Nigeria, the demographic assumptions regarding future mortality arebased on the rates published jointly by the Institute and Faculty of Actuaries in the UK as follows:

Actuarial gains and losses on defined benefit (gratuity) obligation are recognized in other comprehensive income. The movement on thecumulative amount included in other reserves as at the year end was as follows:

The Group

57


31 December 2016

Notes to the consolidated and separate financial statementsMortality in Service

Sample age

2530354045

Withdrawal from Service 2016 2015

Age band Less than or equal to 30 5.0 5.031-39 5.0 5.040-44 4.0 4.045-50 2.0 2.051-55 1.0 1.051 & above 0.0 0.0

10.7 Sensitivity analysis

2016 2015 2016 2015+1% 18,704 30,872 16,018 24,672 -1% (28,594)

+1% (17,566)-1% 11,728 19,653 9,844 15,621

Age rated up by 1 year (132)

360 161 317 123

h) Historical information

In thousands of naira 2016 2015 2016 2015Present value of defined benefit obligation 289,664 444,205 255,024 308,325

10.8 Staff Information

Personnel expenses(a) Staff cost including provision for gratuity liabilities and long service awards:

In thousands of naira 2016 2015 2016 2015Salaries, wages and allowances 2,125,032 1,924,121 1,679,135 1,528,454 Pension contribution 86,435 130,649 79,522 97,635 Defined benefit (gratuity) expense 91,838 62,540 82,595 43,995 Long service awards expense 10,295 48,291 9,488 36,244 Other staff cost 227,456 166,485 136,725 140,397

2,541,056 2,332,086 1,987,465 1,846,725

2016

Number of deaths in a year out of 10,000 lives

2015

Number of deaths in a year out of 10,000 lives

14 14

7 77 79 9

26 26

Rate (%)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, wouldhave affected the defined benefit obligation by the amounts shown below:

Salary increase

Mortality experience




The Company's actuarial valuer is O.O Okpaise with FRC number FRC/NAS/00000000738 representing HR Nigeria Limited.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide anapproximation of the sensitivity of the assumptions shown

Discount rate

Age rated down by 1 year

(21,277) (35,867) (18,170)

(13,042) (22,144) (10,930)

(393) (172) (350)

58


31 December 2016


Employees remuneration:The number of employees in receipt of emoluments falls within the following ranges were as follows:

In thousands of naira 2016 2015 2016 201550,000 - 200,000 39 23 31 17200,001 - 400,000 478 145 434 86400,001 - 600,000 10 358 8 352600,001 - 1,000,000 783 792 612 6171,000,001 - 1,500,000 106 74 96 621,500,001 - 2,000,000 44 47 22 372,000,001 - 2,500,000 22 28 20 202,000,001 - 3,000,000 11 14 6 83,000,001 - 4,000,000 15 21 22 14

Over - 4,000,000 43 44 27 33Total 1,551 1,546 1,278 1,246

The average number of persons employed as at the year end was as follows:

2016 2015 2016 2015Supply Chain 894 821 844 772HR & Admin 97 105 80 75Maintenance 313 347 278 318Sales & Marketing 59 71 27 30Production 111 121 0 0Legal 5 7 5 7Finance & Account 49 52 39 39IT/MIS 7 8 5 5Quality Assurance & Quality Control 16 14 0 0Total 1,551 1,546 1,278 1,246



59


31 December 2016

Notes to the consolidated and separate financial statements11 Taxation

11.1 Income tax expense

Current tax expense

in thousands of naira 2016 2015 2016 2015

Income tax 21,888 354,069 - 327,428 Tertiary education tax 1,586 44,991 - 43,481 Capital gains tax - 9 - 9 Impairment of WHT 179,179 64,098 166,145 64,098

202,653 463,167 166,145 435,016

Deferred tax (credit)/charge

(548,485) 5,044 (526,378) (60,166)

(345,832) 468,211 (360,233) 374,850

11.1.1 Minimum tax expensesMinimum tax has been computed for the Group's subsidiaries with no assessable profit as at year end.

in thousands of naira 2016 2015 2016 2015Minimum taxes 7,472 38,157 - -

11.2 Reconciliation of effective tax rate

The Group

in thousands of naira % 2016 % 2015Profit/(loss) before income tax (2,912,112) 291,225

Income tax using the statutory tax rate 30% (873,633) 30% 87,368 Impact of tertiary education tax 2% (58,242) 2% 5,825 Impact of capital gains tax 0% - 0% 9 Non-deductible expenses -28% 804,016 21% 60,480

12% (360,531) 73% 212,955

Tax exempt income 1% (23,587) 0% - Impact of under provision in prior year 37,476 Write off of withholding tax receivables -6% 166,145 22% 64,098

11% (345,832) 148% 468,211

The tax charge for the year has been computed after adjusting for certain items of expenditure and income, which are not deductible or chargeable for tax purposes, and comprises:


Origination and reversal of temporary differences


Effect of unused tax losses and tax offsets not recognised as deferred tax

60


31 December 2016


The Companyin thousands of naira % 2016 % 2015Profit before income tax (4,126,989) 730,795

Income tax using the statutory tax rate 30% (1,238,097) 30% 219,239 Impact of tertiary education tax 2% (82,540) 6% 43,481 Impact of capital gains tax 0% - 0% 9 Non-deductible expenses -19% 804,684 7% 48,023 Tax exempt income 0% (10,425) 0% - Write off of withholding tax -4% 166,145 9% 64,098

9% (360,233) 52% 374,850

11.3 Movement in current tax liability

in thousands of naira 2016 2015 2016 2015Balance at 1st January 577,267 507,404 454,586 359,309 Payments made during the year (63,257) (129,636) (43,481) (75,952)Income and tertiary education tax charge 23,474 399,069 - 370,918 Minimum taxes 7,472 38,157 - - Withholding tax credit notes utilized (327,428) (237,727) (327,428) (199,689)Current tax liability 217,528 577,267 83,677 454,586

11.4 (Loss)/ profit before taxation(Loss)/ profit before taxation is arrived at after charging:

In thousands of naira Note 2016 2015 2016 2015

Directors' emoluments 8.4 58,433 39,738 55,324 39,493 Auditor's remuneration 8.3 32,141 29,500 20,000 17,100 Gain on disposal of PPE 9 9,335 6,100 1,057 4,935 Net exchange loss 7 1,130,020 84,015 925,640 32,432 Impairment of investments 8.3 - 163,185 1,487,079 163,185 Lease rental expenses 8.3 92,678 30,814 77,191 62,454 Employee benefit expenses 8.4 2,541,056 2,300,593 1,987,465 1,846,725

8.4 1,385,213 1,352,763 1,183,759 1,177,718 Depreciation and amortisation



61


31 December 2016


11.5 Deferred tax (Assets)/Liabilities Recognized deferred tax assets and liabilities are attributable to the following:

The Group

in thousands of naira 2016 2015 2016 2015 2016 2015

Property plant and equipment - - 850,088 1,226,159 850,088 1,226,159 Employee benefits (101,911) (109,269) - - (101,911) (109,269)Unrealized exchange (loss)/gain (317,160) (34,082) 215,688 - (101,472) (34,082)Allowance for doubtful debts (36,354) (42,553) - - (36,354) (42,553)Diminution in Investment - (16,377) - - - (16,377)Provisions for inventory (32,389) - - - (32,389) - Loss carried forward (63,020) - - - (63,020) - Net tax (assets)/liabilities (550,834) (202,281) 1,065,776 1,226,159 514,942 1,023,878

The Company

in thousands of naira 2016 2015 2016 2015 2016 2015

Property plant and equipment - - 809,461 1,168,112 809,461 1,168,112 Employee benefits (95,540) (102,898) - - (95,540) (102,898) Unrealized exchange (loss)/gain (317,160) (34,082) 215,688 - (101,472) (34,082) Allowance for doubtful debts (36,354) (42,553) - - (36,354) (42,553) Diminution in Investment - (16,377) - - - (16,377) Provisions for inventory (32,389) - - - (32,389) - Loss carried forward (63,020) - - - (63,020) - Net tax (assets)/liabilities (544,463) (195,910) 1,025,149 1,168,112 480,686 972,202

Assets Liabilities Net

Assets Liabilities Net

62


31 December 2016

11.6 Movement in temporary differences during the yearThe Group

in thousands of nairaBalance at 1

Jan 2015Recognized in

profit or lossRecognized in

OCIBalance 31

Dec. 2015

Recognizedin profit or

lossRecognized in

OCINet balance at

31 Dec 2016Deferred tax

liabilitiesDeferred tax

assets

1,150,383 75,776 - 1,226,159 (376,071) - 850,088 867,580 (17,492)

Employee benefits (108,251) 1,842 (2,860) (109,269) (32,191) 39,549 (101,911) (101,911) -

(9,004) (25,078) - (34,082) (67,390) - (101,472) (101,472) -

Allowance for doubtful debts (11,434) (31,119) - (42,553) 6,199 - (36,354) (36,354) -

Diminution in Investment - (16,377) - (16,377) 16,377 - - - - Provisions for inventory - - - - (32,389) - (32,389) (32,389) - Loss carried forward - - - - (63,020) - (63,020) (63,020) -

1,021,694 5,044 (2,860) 1,023,878 (548,485) 39,549 514,942 532,434 (17,492)

The Company

in thousands of nairaBalance at 1

Jan 2015

Recognizedin income statement

Recognized in OCI

Balance 31 Dec. 2015

Recognized inincome

statementRecognized in

OCIBalance 31

Dec. 2016Property plant and equipment 1,179,487 (11,375) - 1,168,112 (358,651) - 809,461 Employee benefits (92,498) (4,500) (5,900) (102,898) (27,504) 34,862 (95,540)Unrealized exchange (loss)/gain (23,132) (10,950) - (34,082) (67,390) - (101,472)Doubtful debts (19,645) (22,908) - (42,553) 6,199 - (36,354)Diminution in Investment (5,944) (10,433) - (16,377) 16,377 - - Provisions for inventory - - - - (32,389) - (32,389)Loss carried forward - - - - (63,020) - (63,020)

1,038,268 (60,166) (5,900) 972,202 (526,378) 34,862 480,686

Property plant and equipment

Unrealized exchange (loss)/gain

The Group has unrecognised capital allowance and carry forward unused tax losses amounting to N927 million and N724 million respectively. No deferred tax asset has been recognised in respect of these amounts due to the unpredictability of the amount and timing of future taxable profit against which they would be utilised. The capital allowances and tax losses can be carried forwardindefinitely.

63


31 December 2016

12 Basic earnings per share

2016 2015 2016 2015N'000 N'000 N'000 N'000

Reconciliation of profit or loss for the year to earningsProfit or loss for the year attributable to equity holders of the (2,486,212) 145,865 (3,766,756) 355,945 Weighted average number of shares ('000) 2,647,290 2,647,290 2,647,290 2,647,290Basic (loss)/ earnings per shareFrom continuing operations (kobo per share) (0.94) 0.06 (1.42) 0.13

Diluted earnings per share

Where there is a discontinued operation, diluted earnings per share is determined for both continuing and discontinued operations.

2016 2015 2016 2015N'000 N'000 N'000 N'000

Reconciliation of profit or loss for the year to earningsProfit or Loss for the year attributable to equity holders of the (2,486,212) 145,865 (3,766,756) 355,945 Weighted average number of shares ('000) 2,647,290 2,647,290 2,647,290 2,647,290Diluted (loss)/ earnings per shareFrom continuing operations (kobo per share) (0.94) 0.06 (1.42) 0.13

12.2 Dividend declaredDividend declared during the year in relation to 2015 financial year was N265 million.


Basic earnings per share is determined by dividing profit or loss attributable to the ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.


In the determination of diluted earnings per share, profit or loss attributable to the equity holders of the Company and the weighted average number of ordinary shares are adjusted for the effects of all dilutive potential ordinary shares.

64


31 December 2016

Notes to the consolidated and separate financial statements13 Property, plant and equipment

In thousands of nairaOffice Transportation

Plant equipment, Transportation trucks Capital Leasehold Freehold and furniture Computer Motor trucks under Transportation Leasehold work in

The Group Buildings land land machinery and fittings equipment vehicles under loans finance lease Others improvements progress Total

CostBalance at 1 January 2015 576,856 81,142 70,770 3,797,349 368,497 135,742 661,620 2,776,374 2,723,676 - 1,224,703 974,865 13,391,594 Additions 9,744 - - 155,918 16,752 18,610 13,888 - 569,970 - 42,132 464,835 1,291,849 Transfers from Capital Work in Process 15,583 - - 45,122 44,666 1,052 - - - - 445,102 (551,525) - Reclassification to Investment property - - - - - - - - - - - (566,127) (566,127)Transfer from inventory to Property, plant and Equipment (PPE) - - - - - - - 115,640 - - - - 115,640

Reclassifications from trucks under finance Lease - - - - - - - 790,244 (790,244) - - - -

Reclassifications to Capital Work in Process - - - - - - (2,879) - - - - 2,879 - Disposal for sale and lease back transaction - - - - - - - (569,878) - - - - (569,878)Other Disposals - - - (16,532) (11,896) (1,112) (66,813) (34,002) - - (5,425) (24,029) (159,809)Balance at 31 December 2015 602,183 81,142 70,770 3,981,857 418,019 154,292 605,816 3,078,378 2,503,402 - 1,706,512 300,898 13,503,269 Balance at 1 January 2016 602,183 81,142 70,770 3,981,857 418,019 154,292 605,816 3,078,378 2,503,402 - 1,706,512 300,898 13,503,269 Additions - - - 70,348 26,709 6,659 8,407 - - - 20,616 174,145 306,884 Transfers from Capital Work in Process - - - 11,761 4,315 - - - 25,785 (41,861) - Reclassification to Investment property (3,909) (3,909)Transfer from inventory to PPE - - - - - - - - - 388,010 - - 388,010 Reclassifications from Trucks under Finance Lease (Note 13.1.2) - - - - - - - (989,803) 989,803 - - -

Disposals - - - (36,107) (52,463) (28,798) (44,530) - - - - (161,898)Write off - - - - - - - (38,897) (33,628) - - (72,525)

Balance at 31 December 2016 602,183 81,142 70,770 4,027,859 396,580 132,153 569,693 3,039,481 1,479,971 1,377,813 1,752,913 429,273 13,959,831

Depreciation and ImpairmentBalance at 1 January 2015 294,407 11,691 - 1,874,601 295,411 109,119 527,833 457,088 1,052,840 - 977,702 - 5,600,692 Depreciation expense for the year 8,875 646 125,287 52,571 18,666 76,761 386,669 387,735 - 209,625 - 1,266,835 Reclassifications from Trucks under Finance Lease - - - - - - 608,212 (608,212) - - - -

Disposal for sale and lease back transaction - - - - - - (60,611) - - - - (60,611)Other Disposals - - - (8,032) (9,753) (740) (31,752) (15,469) - - - (65,746)Balance at 31 December 2015 303,282 12,337 - 1,991,856 338,229 127,045 572,842 1,375,889 832,363 - 1,187,327 - 6,741,170 Balance at 1 January 2016 303,282 12,337 - 1,991,856 338,229 127,045 572,842 1,375,889 832,363 - 1,187,327 - 6,741,170 Depreciation expense for the year 20,791 - - 234,355 35,039 14,826 38,474 366,539 419,837 14,104 150,835 - 1,294,800 Reclassifications from Trucks under Finance Lease - - - - - - - (609,201) 609,201 - - -

Disposals - - - (36,107) (52,449) (26,969) (41,723) (157,248)Write-offs - - - - (15,411) (29,199) (44,610)Balance at 31 December 2016 324,073 12,337 - 2,190,104 320,819 114,902 569,593 1,727,017 613,800 623,305 1,338,162 - 7,834,112

- Carrying amountAt 31 December 2014 282,449 69,451 70,770 1,922,748 73,086 26,623 133,787 2,319,286 1,670,836 - 247,001 974,865 7,790,902 At 31 December 2015 298,901 68,805 70,770 1,990,001 79,790 27,247 32,974 1,702,489 1,671,039 - 519,185 300,898 6,762,099 At 31 December 2016 278,110 68,805 70,770 1,837,755 75,761 17,251 100 1,312,464 866,171 754,508 414,751 429,273 6,125,719

65


31 December 2016

Notes to the Consolidated and Separate Financial Statements13 Property, plant and equipment (Continued)

In thousands of naira TransportationOffice Trucks

The Company Plant equipment, Transportation under Capital Freehold and furniture Computer Motor Trucks under finance Transportation Leasehold work in

2015 Buildings land machinery and fittings equipment vehicles Loans lease Trucks others improvements progress Total

CostBalance at 1 January 2015 106,852 2,885 574,823 171,038 59,164 450,207 2,776,374 2,723,676 - 1,135,352 916,013 8,916,384 Additions - - 24,606 10,485 17,352 9,592 - 569,970 - 42,132 404,078 1,078,215 Transfer from Capital Work in Process - - 45,122 44,666 1,052 - - - - 445,102 (1,102,069) (566,127)Transfer from inventory to PPE (13.1.1) - - - - - - 115,640 - - - - 115,640 Reclassifications from Trucks under Finance Lease to Transportation trucks (Note 13.1.3) - - - - - 790,244 (790,244) - - - -

Disposal for sale and lease back transaction - - - - - - (569,878) - - - - (569,878)Other Disposals (4,726) (47,438) (34,002) - (5,425) (3,030) (94,621)Write off - - - - - - - - - - (20,762) (20,762)Balance at 31 December 2015 106,852 2,885 644,551 221,463 77,568 412,361 3,078,378 2,503,402 - 1,617,161 194,230 8,858,851 Balance at 1 January 2016 106,852 2,885 644,551 221,463 77,568 412,361 3,078,378 2,503,402 - 1,617,161 194,230 8,858,851 Additions - - 29,269 24,340 6,459 7,140 - - - 20,616 174,145 261,969 Transfer from Capital Work in Process - - 11,761 4,315 - - - - 25,785 (41,861) - Reclassification to Investment property (Note 14) (3,909) (3,909)Transfer from inventory to Property, plant and equipment (13.1.1) - - - - - - - - 388,010 - - 388,010

Reclassifications from trucks under finance Lease (Note 13.1.2) - - - - - - (989,803) 989,803 - - -

Disposal - - (440) (2,653) (246) (20,631) - - - - - (23,970)Write off (38,897) (33,628) - - (72,525)Balance at 31 December 2016 106,852 2,885 685,141 247,465 83,781 398,870 3,039,481 1,479,971 1,377,813 1,663,562 322,605 9,408,426

Depreciation and Impairment

Balance at 1 January 2015 105,168 - 359,826 128,365 51,872 322,550 457,088 1,052,840 - 917,350 - 3,395,059 Depreciation expense for the year 1,653 - 40,688 35,412 11,998 66,752 386,669 387,735 - 169,453 - 1,100,360 Reclassifications from Trucks under Finance Lease - - - - - - 608,212 (608,212) - - - - Disposal for sale and lease back transaction - - - - - - (60,611) - - - - (60,611)Other disposals - - - (3,434) - (40,078) (15,469) - - - - (58,981)Balance at 31 December 2015 106,821 - 400,514 160,343 63,870 349,224 1,375,889 832,363 - 1,086,803 - 4,375,827 Balance at 1 January 2016 106,821 - 400,514 160,343 63,870 349,224 1,375,889 832,363 - 1,086,803 - 4,375,827 Depreciation expense for the year - - 86,423 26,651 9,920 42,882 366,539 419,837 14,104 135,377 - 1,101,733 Reclassifications from Trucks under Finance Lease - - - - - - - (609,201) 609,201 - - - Disposals - - (440) (2,653) (246) (19,572) - - - - - (22,911)Write-offs - - - - - - (15,411) (29,199) - - - (44,610)

Balance at 31 December 2016 106,821 - 486,497 184,341 73,544 372,534 1,727,017 613,800 623,305 1,222,180 - 5,410,039

Carrying amountAt 31 December 2014 1,684 2,885 214,997 42,673 7,292 127,657 2,319,286 1,670,836 - 218,002 916,013 5,521,325 At 31 December 2015 31 2,885 244,037 61,120 13,698 63,137 1,702,489 1,671,039 - 530,358 194,230 4,483,024 At 31 December 2016 31 2,885 198,644 63,124 10,237 26,336 1,312,464 866,171 754,508 441,382 322,605 3,998,387

13.1.1 This represents movement of trucks from inventory to PPE for transportation business.13.1.2 This represents reclassification of transportation trucks under finance lease whose lease obligation has been fully settled to transportation trucks others.

Accumulated depreciation and impairment loses

66


31 December 2015


13.2 Assets held under finance lease

13.3 Capital work in progressAnalysis of capital work in progress is as shown below:

in thousands of naira 2016 2015 2016 2015Leasehold improvement 259,355 141,631 238,146 120,422 Plant and machinery 148,225 131,376 71,096 54,247 Office furniture and Equipment 20,086 27,584 11,756 19,254 Computer Equipment 307 307 307 307 Investment Property 1,300 - 1,300 - Total 429,273 300,898 322,605 194,230

13.4 Capital CommitmentsAs at 31 December 2016 the Group has ₦113.1 million in capital commitments (2015: ₦36.7 million).

Assets held under finance lease represent trucks on sales and lease back from various banks. Interest rate underlyingall obligations under finance leases are fixed at respective contract dates and ranges from 16% to 19% (2015: 16% to19%) per annum. The average lease term is 7 years and the Group has options to purchase the trucks for a nominalamount at the end of the lease terms.The Group and Company has assets under finance lease with a carrying amount of ₦ 866 million (2015: ₦1.7 billion) and ₦ 866 million (2015: ₦ 1.7 billion) are pledged as securities for the finance lease obligation respectively.


67


31 December 2016

Notes to the Consolidated and Separate Financial Statements14 Investment property

2016

In thousands of naira Land Building Total Land Building TotalCostBalance at 1 January 2016 2,651,135 3,374,841 6,025,976 2,651,135 3,260,683 5,911,818 Transfers from Capital Work in Progress (Note 13) - 3,909 3,909 - 3,909 3,909 Write-offs (53,650) - (53,650) (53,650) - (53,650)Balance at 31 December 2016 2,597,485 3,378,750 5,976,235 2,597,485 3,264,592 5,862,077

DepreciationBalance at 1 January 2016 - (245,911) (245,911) - (231,817) (231,817)Charge for the year - (69,990) (69,990) - (65,292) (65,292)Balance at 31 December 2016 - (315,901) (315,901) - (297,109) (297,109)

Net book Value at 31 December 2,597,485 3,062,849 5,660,334 2,597,485 2,967,483 5,564,968

2015

In thousands of naira Land Building Total Land Building TotalCostBalance at 1 January 2015 2,651,135 2,808,714 5,459,849 2,651,135 2,694,556 5,345,691 Transfers from Capital Work in Progress (Note 13) - 566,127 566,127 - 566,127 566,127 Balance at 31 December 2015 2,651,135 3,374,841 6,025,976 2,651,135 3,260,683 5,911,818 DepreciationBalance at 1 January 2015 - (188,887) (188,886) - (179,491) (179,490)Charge for the year - (57,024) (57,024) - (52,326) (52,326)Balance at 31 December 2015 - (245,911) (245,910) - (231,817) (231,816)Net book Value at 31 December 2015 2,651,135 3,128,930 5,780,066 2,651,135 3,028,866 5,680,002

Group Company

Group Company

68


31 December 2016


15 Intangible assets

In thousands of naira 2016 2015 2016 2015Goodwill (Note 15.1) - 4,486 - - Software (Note 15.2) 14,190 30,932 10,135 23,186

14,190 35,418 10,135 23,186 15.1 Goodwill

Goodwill is allocated for impairment testing purposes to cash-generating units.

In thousands of naira 2016 2015Foods and hospitality 4,186 4,186 Sales and servicing of engines 300 300 Rent and other services - 2,726 Balance at 1 January 4,486 7,212 Impairment (4,486) (2,726)Balance at 31 December - 4,486

The property rental income for the year from investment properties, all of which are leased out under operatingleases, amounted to ₦1.5 billion (2015: ₦1.4 billion) for the Group; and ₦ 1.4 billion (2015: ₦1.3 billion) forthe Company. Direct operating expenses arising on the investment properties in the period amounted to ₦645million (2015: ₦505 million) for the Group; and ₦647 million (2015: ₦503 million) for the Company.


In 2016, the fair value of the Group's investment properties was ₦17.5 billion (2015: ₦17.8 billion). The fairvalue of investment property was determined by Jide Taiwo & Co, an independent Estate Surveyor and Valuer,having appropriate and recognised professional qualifications. The fair value measurement for all of the investment properties has been categorised as Level 2 fair value basedon the inputs to the valuation techniques used.

Basis of valuation : The property has been valued on market value basisMethod of valuation : Cost approach - this provides an indication of value using the economic principle that abuyer will pay more for an asset that will cost more to purchase or construct.Market Analysis : Analysis of recent transactions on comparable properties within the neighbourhood.

The fair value of some of the Group's investment properties could not be determined reliably, due to the securitychallenges caused by the insurgency in the North Eastern part of Nigeria. The affected properties are detailed asfollows:

The carrying value of these properties amounting to ₦621 thousand as at year end is not considered material tothe carrying value of the total investment properties. The directors believe that the fair value of the land andbuildings that were not valued is not expected to be materially different from their carrying amounts.

- Plot 70, Ls street, Nguru, Yobe state- Plot 73, Ls street, Nguru, Yobe state- No 5, GRA, Nguru, Yobe state

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units that areexpected to benefit from that business combination. The goodwill was tested for impairment and the goodwillamount of N4.5 was found to be impaired.

The carrying amount of goodwill was allocated to cash generating units as follows:

Impairment is determined by comparing the carrying amount of the cash generating units (CGU) with therecoverable amount. The recoverable amount of the CGU is the higher of the value in use and the fair value lesscost to sell. The value in use of the CGU was determined to be the recoverable amount. The determination of thevalue in use was based on the following key assumptions:- Cash flows were projected based on actual operating results and a four year business plan. Cash flows for a fouryears period were extrapolated using expected annual volume growth rates. Management believes that thisforecast period is appropriate for the business.- The revenue growth per year after the first three year period is assumed to be at the 19% (2015: 19%) expectedannual long-term inflation, based on external sources.

69


31 December 2016


15.2 Software


Balance at beginning of year 76,657 36,508 65,039 36,508

Additions during the year 3,684 19,676 3,684 18,277

Reclassifications from prepayment - 10,254 - 10,254

Transfers from Capital Work in Progress (Note 13) - 10,219 - - Balance at end of year 80,341 76,657 68,723 65,039

Accumulated AmortisationBalance at beginning of year 45,725 16,821 41,853 16,821

Amortization charge for the year 20,426 28,904 16,735 25,032 Balance at end of year 66,151 45,725 58,588 41,853

Net book value at 31 December 14,190 30,932 10,135 23,186

16 Financial assets (Investments in equity securities)Financial assets comprise:


As at 31 December 4,695 4,668 4,695 4,668

16.1 Equity securities -available -for-sale

In thousands of naira 2016 2015 2016 2015Balance as at 1 January 4,668 6,309 4,668 6,309 fair value gain/(loss) 27 (1,641) 27 (1,641)As at 31 December 4,695 4,668 4,695 4,668




The group's exposure to market risk related to investments in quoted securities is disclosed in Note 29.

The market value of quoted investments as at 31 December 2016 was ₦ 4.7million (2015: ₦ 4.7 million). Gains on investment in equity securities is non-taxable hence there is no deferred tax impact on the gains during the year.

Investment in equity securities - available for sale (16.1)

70


31 December 2016

Notes to the consolidated and separate financial statements17 Inventories

In thousands of naira 2016 2015 2016 2015Raw materials 69,532 93,530 - - Work in progress 11,521 35,483 11,521 35,483 Goods in transit (17.1) - 319,043 - 318,652 Finished goods 2,192,122 2,869,349 2,140,249 2,827,865 Spare parts and consumables 614,455 708,595 521,053 538,998

2,887,630 4,026,000 2,672,823 3,720,998

17.1

17.2 Changes in inventory in statement of cash flows

In thousands of naira 2016 2015 2016 2015Inventory as at 31 December 2,887,630 4,026,000 2,672,823 3,720,998 Inventory as at 1 January (4,026,000) (4,337,613) (3,720,998) (3,889,927)

(1,138,370) (311,613) (1,048,175) (168,929)Transfer to PPE (Note 13) 388,010 115,640 388,010 115,640

(750,360) (195,973) (660,165) (53,289)

18 Trade and other receivablesIn thousands of naira 2016 2015 2016 2015Trade receivables 1,599,524 1,071,260 993,161 945,408 Other receivables (Note 18.1) 903,180 1,827,487 1,610,507 3,378,156 Withholding tax receivables 436,252 547,448 436,189 519,947

2,938,956 3,446,195 3,039,857 4,843,511 18.1 Other receivables

Staff debtors 108,715 144,701 125,420 117,113 Dividend receivable from registrars 3,190 22,335 3,190 22,335 Due from related parties (18.1.2) 387,140 1,253,851 1,116,871 2,879,726 Advance payment to vendors (18.1.3) 339,886 366,126 307,779 322,624 Interest receivable 12,330 - 17,207 - Insurance claims receivables 37,231 9,786 37,231 8,622 Other debtors 14,688 30,688 2,809 27,736

903,180 1,827,487 1,610,507 3,378,156

18.1.2

18.1.3


Goods in transit refers to already shipped goods from overseas suppliers which were not yet received as at 31December 2016.


The Group's exposure to credit risk and impairment loss related to trade and other receivables is disclosed inNote 29(C)


In 2016, loans receivable by the Company from Leventis Foods Limited, amounting to N1.2 billion were converted to new shares. The conversion resulted in a 44% increase in the Company's shareholding in Leventis Foods Limited from 51% to 95%. Also see note 24.2(ii).

The cost of inventories recognised as an expense during the year in respect of continuing operations in the Group was N7.08 billion (2015: N5.15), while in the Company it was N5.05 billion (2015: N4.01 billion).

Inventory write offs during the period for the Group amounted to N247.3 (2015: N55.9 million), Company N199.1 million (2015: N29.1 million).

Included in advance payment to vendors in an amount of ₦ 308 million (2015: ₦308 million) relating topayments made in advance for the acquisition of land in Moniya, Ibadan.

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31 December 2016

18.2 Changes in trade and other receivables in statement of cash flowsIn thousands of naira

2016 2015 2016 2015Trade and other receivables at 31 December 2,938,956 3,446,195 3,039,857 4,843,511 Trade and other receivables at 1 January (3,446,195) (2,975,360) (4,843,511) (4,197,093)

(507,239) 470,835 (1,803,654) 646,418 Withholding tax utilised 327,428 237,727 327,428 199,689 Debt equity conversion of receivable fromLeventis Foods Limited (Note 18.1.2) - - 1,174,284 -

Impairment of receivables from subsidiary 893,600 Impairment of WHT 179,179 64,098 166,145 64,098

(632) 772,660 757,803 910,205

18.3 Deposit for foreign currency

The Group's exposure to credit risk and impairment loss related to derivatives is disclosed in Note 29(c).


Deposit for foreign currency represents prepaid forward contracts of duration of three to four months.

72


31 December 2016


19 Prepayments

In thousands of naira2016 2015 2016 2015

Current portion 146,960 189,479 109,197 173,277 Long term portion 20,834 14,147 20,834 14,147 Total prepayments 167,794 203,626 130,031 187,424

These balances represent prepaid rent, insurance and other administrative expenses.

19.1 Changes in prepayments in cash flow statementIn thousands of naira

2016 2015 2016 2015Prepayments at 31 December 167,794 203,626 130,031 187,424 Prepayments at 1 January (203,626) (219,405) (187,424) (193,867)

(35,832) (15,779) (57,393) (6,443) Reclassifications to intangible asset - 10,254 - 10,254 Changes in prepayments in cashflow (35,832) (5,525) (57,393) 3,811

20 Investment in joint ventures

20.1 Group2016


PikWik Nigeria Limited

Druckfarben Nigeria Limited

Chrisstahl Nigeria Limited Total

Percentage ownership 49% 50% 50%Non-current assets - 50,466 79,058 Current assets 74,589 477,872 339,361 Non-current liabilities - (5,320) - Current liabilities (25,521) (264,518) (384,416)Net Assets 100% 49,068 258,500 34,003 Deposit for shares - - (11,214) Adjusted Net Assets (100%) 49,068 258,500 22,789 Group's share of adjusted net assets (49%:50%:50%) 24,043 129,250 11,395

AGL portion of Deposit for shares - - 10,000 Carrying amount of interest in joint venture 24,043 129,250 21,395 174,688


The Group has three joint arrangements in which the group participates; namely Druckfarben Nigeria Limited(DFN), Chrisstahl Nigeria Limited (CNL) and PikWik Nigeria Limited (PNL). The principal activity of DFNis the manufacturing and sales of flexography and rotogravure. The principal activity of CNL is the supply ofplumbing and industrial goods whiles the principal activity of PNL is retail services especially with respect tofast-moving consumer goods. The companies are not publicly listed and were incorporated in Nigeria. TheGroup has 50% shareholding in DFN and CNL, while its shareholding in PNL is 49%.

Druckfarben Nigeria Limited (DFN), Chrisstahl Nigeria Limited (CNL) and PikWik Nigeria Limited (PNL)are structured as separate vehicles and the group has residual interest in the net assets of the entities.Accordingly, the group has classified its interest in these entities as joint ventures.

The following summarises the financial information of DFN, CNL and PNL as included in their respectivefinancial statements. The table reconciles the summarised financial information to the carrying amount of theGroup's interest in DFN, CNL and PNL.


73


31 December 2016






Revenue - 1,021,885 281,911 Depreciation and amortization - (14,892) (1,933)Interest expense - (5,746) (5,024)Income tax expense - - - Total comprehensive loss (100%) (10,932) (61,725) (92,943)Share of total comprehensive loss (49%:50%:50%)

(5,357) (30,862) (46,472) (82,691)

Group's share of total comprehensive loss (5,357) (30,862) (46,472) (82,691)

2015




Percentage ownership 50% 50%Non-current assets 47,841 97,890 Current assets 452,548 281,623 Non-current liabilities (3,689) (19,890)

(176,476) (232,678)Net Assets 100% 320,224 126,945 Deposit for shares - (11,214)Adjusted Net Assets(100%) 320,224 115,731 Group's share of net assets (50%: 50%) 160,112 57,866 AGL portion of Deposit for shares 10,000 Carrying amount of interest in joint venture 160,112 67,866 227,978 Revenue 816,951 170,474 Depreciation and amortization (17,052) (17,164)Interest expense (13,972) (489)Income tax expense - - Profit/(loss) and total comprehensive income (100%) 30,870 (40,831)Profit/(loss) and total comprehensive income (50%: 50%) 15,435 (20,415) (4,980)Group's share of total comprehensive income/(loss) 15,435 (20,415) (4,980)

20.2 Company




Chrisstahl Nigeria Limited

Total

Balance as at January 1, 2016 - 75,000 110,000 185,000 Additional investments (20.2.1) 29,400 - - 29,400 Balance as at December 31, 2016 29,400 75,000 110,000 214,400

20.2.1 During the year, the Company entered into a joint venture arrangement with Pick n Pay Retailers (Pty) Ltd withan agreed share capital of N 29 million which gave the company a 49% ownership of PikWik Nigeria Limited(PNL). The Joint Venture has been fully incorporated but the shares has not been paid-up as at 31 December2016.

Current liabilities

There were no items recognised in Other Comprehensive Income (OCI).

74


31 December 2016


21 Cash and cash equivalents

In thousands of naira 2016 2015 2016 2015Cash in hand 13,506 3,925 11,703 3,028 Bank balances 399,662 293,927 266,676 260,209 Short term deposits 1,563,609 1,718,003 1,563,527 1,658,297

1,976,777 2,015,855 1,841,906 1,921,534

Bank overdraft (2,379,638) (2,398,002) (813,821) (830,245) (402,861) (382,147) 1,028,085 1,091,289

22 Share capitalIn thousands of units Gross Provision Gross ProvisionAuthorised:As at 1 JanuaryOrdinary shares of 50 kobo each 2,700,000 2,700,000 2,700,000 2,700,000

As at 31 DecemberOrdinary shares of 50 kobo each 2,700,000 2,700,000 2,700,000 2,700,000

Issued and fully paid:In thousandsAs at 1 January

2,647,290 2,647,290 2,647,290 2,647,290

As at 31 December 2,647,290 2,647,290 2,647,290 2,647,290

23 Other reserves

24 Investment in Subsidiaries

In thousands of naira 2016 2015Abuja Capital Motors Limited (24.2.(i)) 323,800 323,800Leventis Foods Limited (24.2.(ii)) 1,487,079 312,795Iddo Investment Limited (24.2.(iii)) 10,800 10,800 Victoria Beach Hotel Limited (24.2.(iv)) 48,000 48,000 Guinea Construction Company Limited (24.2.(v)) 6,000 6,000 TCN Properties Limited (24.2.(vi)) 91 91 Trans Guinea Limited (24.2.(vii)) 600 600 Leventis Power Systems Limited (24.2.(viii)) 26,517 58,012

1,902,887 760,098 Impairment (ii) (1,487,079) (31,495)

415,808 728,603

24.1 Acquisition of Additional Equity in Leventis Foods Limited

The Company

In 2016, loans receivable by the Company from Leventis Foods Limited, amounting to N1.2 billion were converted to additional shares. The conversion resulted in a 44% increase in the Company's shareholding in Leventis Foods Limited from 51% to 95%.

Ordinary shares of 50 kobo each

The Group

The Group

Ordinary shares of 50 kobo each

The Company

The Company

All shares rank equally with regard to the Company's residual assets. The holders of the ordinary shares are entitled to receivedividend declared from time to time, and are entitled to one vote per share at general meetings of the Company.

Cash and cash equivalents in the statement of financialposition

The Group's exposure to credit and currency risks for cash and cash equivalents disclosed in Note 29.

Cash and cash equivalents in the statement of cash flows

As at 31 December 2016, the Company's share price was 96 kobo per share with a value of ₦ 2.5billion (2015: 62 kobo pershare with a value of ₦1.6 billion).

Other reserves comprises of fair value gains on investment property, actuarial gains and losses on defined benefit plan schemeand cumulative gains or losses on equity investments accounted for as available for sale.

The cumulative gains/losses on available for sale securities will subsequently be recycled into profit or loss on disposal of thesecurity.

75


31 December 2016

24.2 Operations and activities of subsidiaries(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

Details of the Group’s subsidiaries at the end of the reporting period are as follows:

Subsidiaries Name Class of shares2016 %

Holdings2015 %

HoldingsAbuja Capital Motors Limited Ordinary Shares 100 100%Guinea Construction Company Limited Ordinary Shares 100 100Iddo Investment Limited Ordinary Shares 100 100Leventis Foods Limited Ordinary Shares 95 51Leventis Power System Limited Ordinary Shares 100 100Victoria Beach Hotel Limited Ordinary Shares 100 100TCN Properties Limited Ordinary Shares 91 91Trans Guinea Limited Ordinary Shares 60 60

Details of principal activity and location Principal activity LocationAbuja Capital Motors Limited

Guinea Construction Company Limited

Iddo Investment LimitedLeventis Foods Limited

Leventis Power System LimitedVictoria Beach Hotel Limited

TCN Properties Limited

Trans Guinea Limited

The investments in subsidiaries are stated at cost.

Nigeria

Nigeria

Nigeria

-Hotel management

Nigeria

Processing and marketing ofbakery products

Sales and assembly of vehicle

Leventis Foods Limited made a loss of ₦958 million (2015: ₦642 million) for the year and is in a net liability position of ₦1.9billion (2015: ₦2.1 billion). The value of the Company's investment in and receivable from Leventis Foods Limited amounted toN1.49 billion and N893.6 million respectively. Based on the assessment of the directors impairment losses have been recorded inthe statement of profit or loss and other comprehensive income in respect of these balances.

Iddo investments majors in property letting. The Company closed the year with a profit of N0.8 million (2015: N7.7 million).Amount due to Iddo investment as at year end is N92.7 million (2015: N0.7 million).

Nigeria

Place of incorporation and operation

Property letting

Mainland Hotel 2/4 Murtala Mohammed Way,Ebute-Metta, Lagos, Nigeria

Leventis Close, Central Area District, Abuja,Nigeria

Nigeria

Sales and servicing of cars and agricultural equipment

Property letting

Property letting

Iddo house, Iddo, Lagos, Nigeria


2 Wharf Road, Apapa, Lagos, NigeriaIddo house, Iddo, Lagos, Nigeria

NigeriaNigeria

In prior year, Victoria Beach Hotel Limited (VBH) ceased its primary operation as a hotel business. Some of the Company'sassets were sold or transferred to other entities within the group. As at the date of the financial statements, the net assets of VBHamounted to N 373 million representing mainly land and building which the directors plan to renovate and put to alternativeuses.

Trans Guinea Limited's (TGL) main line of business is the assembly of trailers and trucks. It's main customer is A.G. Leventis(Nigeria) Plc. TGL closed the year with a net current liability of N278 million. This casts doubts over the Company's ability tocontinue as a going concern. The directors however reaffirm their commitment to the investment in TGL and will ensure thatadequate financial support is provided to it by A.G Leventis (Nigeria) Plc to continue in business as a going concern.

Leventis Power Systems (LPS) has as its main line of business, the sales and leasing of generating sets, provision of technicalbackup, repairs and maintenance of power generating sets. LPS has not been involved in any trading activities since 2011 as ithas been dormant.

Abuja Capital Motors Limited (ACM) has as its core operation, car servicing and sales of spare parts for cars, trucks andagricultural equipment. In prior year, the operations of ACM was shut down by the directors and most of its assets transferred toother related entities within the group. The major asset of the Company as at year end is land and building which are beingrented out to third parties.

Guinea Construction Limited's (GCL) main line of business is property letting. The company closed the year with a loss of N0.33million (2015: N0.85 million). Amount due to GCL from the parent company is N3.5 million (2015: N3.6 million).

TCN Properties Limited continues to major in property letting as its principal activity. For the year ended, the company recordeda profit of N59.8 million (2015: N42.1 million). Amount due to TCN properties from A.G. Leventis as at year end is N304million (2015: N224 million).

6, Ijora Causeway, Ijora, Lagos


76


31 December 2016


25 Capital management

In thousands of naira 2016 2015 2016 2015Total liabilities 13,999,506 13,410,923 10,992,391 10,544,680

(1,976,777) (2,015,855) (1,841,906) (1,921,534)Adjusted net debt 12,022,729 11,395,068 9,150,485 8,623,146 Total Equity 6,344,043 9,090,982 7,275,893 11,233,270 Net debt to equity ratio 1.90 1.25 1.26 0.77

26.1 Loans and borrowingsIn thousands of naira 2016 2015 2016 2015Non-current liabilitiesBank loans 678,974 1,103,673 678,974 1,103,673 Finance lease liabilities 566,000 912,069 566,000 912,069

1,244,974 2,015,742 1,244,974 2,015,742 Current liabilitiesBank loan 426,259 452,818 426,259 452,818 Finance lease liabilities 342,461 405,265 342,461 405,265

768,720 858,083 768,720 858,083

Bank loans 1,105,233 1,556,491 1,105,233 1,556,491 Finance lease liabilities 908,461 1,317,334 908,461 1,317,334 Total 2,013,694 2,873,825 2,013,694 2,873,825

Terms and repayment schedule of bank loans and finance lease obligationThe GroupThe terms and conditions of outstanding loans are as follows.

In thousands of Naira CurrencyNominal

interest rateYear of

maturity Face valueCarrying

amount Face valueCarrying

amountBank overdrafts NGN 16%-17% 2017 2,379,638 2,379,638 2,398,002 2,398,002 Secured bank loan NGN 17.5% 2016 - 2019 1,087,530 1,087,530 1,461,983 1,461,983 Secured bank loan NGN 18% 2017 17,703 17,703 94,508 94,508 Finance lease liability NGN 10.5% - 18.5% 2016 - 2019 764,993 764,993 1,081,668 1,081,668 Finance lease liability NGN 16% 2018 143,468 143,468 235,666 235,666 Total interest bearing liabilities 4,393,332 4,393,332 5,271,827 5,271,827

The CompanyThe terms and conditions of outstanding loans are as follows.

In thousands of Naira CurrencyNominal

interest rateYear of

maturity Face valueCarrying

amount Face valueCarrying

amountBank over drafts NGN 16%-17% 2017 813,821 813,821 830,245 830,245 Secured bank loan NGN 17.5% 2016 - 2019 1,087,530 1,087,530 1,461,983 1,461,983 Secured bank loan NGN 18% 2017 17,703 17,703 94,508 94,508 Finance lease liability NGN 10.5% - 18.5% 2016 - 2019 764,993 764,993 1,081,668 1,081,668 Finance lease liability NGN 16% 2018 143,468 143,468 235,666 235,666 Total interest bearing liabilities 2,827,515 2,827,515 3,704,070 3,704,070


2016 2015

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustainfuture development of the business. Management monitors the return on capital as well as the level of dividends to ordinaryshareholders. This is done by using a ratio of adjusted net debt to adjusted equity. Adjusted net debt has been defined as totalliabilities, including interest-bearing loans and borrowings, less cash and cash equivalents. Adjusted equity comprises allcomponents of equity.

The Company’s adjusted net debt to equity ratio at 31 December was as follows.


There were no changes to the company's approach to capital management during the year.

2016 2015

Less: Cash and Cash equivalents

77


31 December 2016


26.1.1 Long term bank loans

The movement on the facility during the year was as follows:In thousands of naira 2016 2015 2016 2015

At 1 January 1,556,491 1,293,807 1,556,491 1,293,807 Additional drawdown - 632,690 - 632,690 Repayments (451,258) (370,006) (451,258) (370,006)At 31 December 1,105,233 1,556,491 1,105,233 1,556,491

26.1.2 Finance lease liabilitiesLeasing arrangement

Amounts payable under finance leases:Group

In thousands of naira 2016 2015 2016 2015 2016 2015Less than one year 484,566 610,168 142,105 204,903 342,461 405,265 Between one and three years

662,749 1,150,392 96,749 238,323 566,000 912,069

1,147,315 1,760,560 238,854 443,226 908,461 1,317,334

Company

In thousands of naira 2016 2015 2016 2015 2016 2015Less than one year 484,566 610,168 142,105 204,903 342,461 405,265 Between one and three years

662,749 1,150,392 96,749 238,323 566,000 912,069

1,147,315 1,760,560 238,854 443,226 908,461 1,317,334

All lease obligations are denominated in Naira. 26.1.3 The movement on the facility during the year was as follows:


At 1 January 1,317,334 1,265,719 1,317,334 1,265,719 Additional drawdown - 569,970 - 569,970 Repayments (408,873) (518,355) (408,873) (518,355)At 31 December 908,461 1,317,334 908,461 1,317,334

Present value of minimum lease payments

Long term bank loans represent bank facilities obtained by the Company to finance the purchase of trucks for the provision ofhaulage services to third party customers. The tenor of the facilities are in the range of 4-5 years. The interest rate on the facilitiesrange between 17.5% - 18% per annum. The security on these facilities include a negative pledge by the Company, the naming ofthe bank as first loss payee with respect to insurance claim on the acquired assets. Interest expense for the year has been fully paidup as at year end.

Group Company

The Company entered into sales and lease back transactions (finance lease) with two Nigerian banks. The Company sold haulagetrucks to the banks and leased them back for use in the provision of transportation and haulage services to customers. The averagelease term is 7 years. The Company has options to purchase the haulage trucks for a nominal amount at the end of the lease terms.The Company's obligations under finance leases are secured by the lessors' title to the leased assets.

Interest rate underlying all obligations under finance leases are fixed at respective contract rates ranging from 16% to 19% (2015:16% to 19%) per annum.

InterestPresent value of minimum

lease payments

All loan obligations are denominated in Naira. The present value of loan repayments is approximately equal to their carryingamount as there were no significant transaction costs.

Future minimum lease payments

CompanyGroup

InterestFuture minimum lease

payments

78


31 December 2016


27 Trade and other payablesIn thousands of naira 2016 2015 2016 2015Trade payables 2,333,342 996,188 1,255,102 228,806 Amounts due to related entities 2,902,530 2,194,022 3,297,464 2,325,510 Dividend payable ( Note 27.1) 911,626 701,158 911,626 701,158 Loan payable (Note 27.2) 144,591 130,886 144,591 130,886 Accruals 899,946 615,926 636,280 516,472 Due to Directors 149,414 125,342 149,414 125,342 VAT payable 223,536 144,323 155,548 51,168 Withholding taxes payable 98,441 63,557 68,743 42,691 Employee related taxes payable 130,001 83,933 33,462 59,173 Staff pension (Note 10.3) 56,851 70,743 55,407 32,842 Deposit for shares (Note 27.3) 15,000 15,000 - - Other Payables 107,324 250,133 87,992 183,254

7,972,602 5,391,211 6,795,629 4,397,301

27.1 Dividend payableIn thousands of naira 2016 2015 2016 2015At 1 January 701,158 629,125 701,158 629,125 Dividend declared during the year 264,729 - 264,729 - Paid during the year (local dividend) (54,261) - (54,261) - Unclaimed dividend refunded by the registrars - 72,033 - 72,033 At 31 December 911,626 701,158 911,626 701,158

27.2

27.3 Deposit for shares

27.4 Changes in trade and other payables in statement of cash flowsIn thousands of naira

2016 2015 2016 2015Trade and other payables at 31 December 7,972,602 5,391,211 6,795,629 4,397,301 Trade and other payables at 1 January (5,391,211) (5,106,952) (4,397,301) (3,968,827)

2,581,391 284,259 2,398,328 428,474 Dividend declared in 2015 (264,729) - (264,729) - Unpaid Investment in Joint Venture (29,400) - (29,400) -

2,287,262 284,259 2,104,199 428,474

28 Deferred revenue

Long term deferred revenueIn thousands of naira 2016 2015 2016 2015Rent received in advance 196,607 214,675 196,607 214,675 Deferred income from sale and lease back transaction 27,039 54,522 27,039 54,522

223,646 269,197 223,646 269,197

Short term deferred revenueIn thousands of naira 2016 2015 2016 2015Rent received in advance 288,117 424,919 255,554 374,685 Deferred income from sale and lease back transaction 27,123 29,644 27,123 29,644

315,240 454,563 282,677 404,329

Deposit for shares of ₦15 million (2015: ₦15 million) relates to the deposit by Iron Products and Steel Limited (40% shareholderin Trans Guinea Limited, a subsidiary) in respect of more shares in Trans Guinea Limited which were yet to be issued to IronProducts and Steel Limited as at 31 December 2016.

The loan payable represents the loans granted by CP Leventis and Tasso Leventis to the Company. Interest is charged on the loans at 10 percent per annum and the amounts are repayable on demand.






79


31 December 2016

Notes to the consolidated and separate financial statements29 Financial instruments - Fair values and financial risk management

A. Accounting classifications and fair values

Group

31 December 2016 Loans and receivables

Available for sale

Other financial liabilities Total Level 1 Level 2 Level 3

In thousands of nairaFinancial assets measured at fair valueInvestment in Equity securities (quoted) - 4,695 - 4,695 4,695 - -

- 4,695 - 4,695 4,695 Financial assets not measured at fair valueTrade and other receivables and deposit for foreign currency (excluding prepayments,advance payments, WHT and deposit for shares). 2,528,092 - - 2,528,092 - - -

Cash and cash equivalents 1,976,777 - - 1,976,777 4,504,869 - - 4,504,869

Financial liabilities not measured at fair valueBank loans - - 1,105,233 1,105,233 - 1,222,307 - Finance lease liability - - 908,461 908,461 - 917,382 -

Trade and other payables (excluding accruals, PAYE, VAT and WHT) - - 6,563,828 6,563,828 - - -

- - 8,577,522 8,577,522 2,139,689


Available for sale


In thousands of nairaFinancial assets measured at fair valueInvestment in Equity securities (quoted) - 4,668 - 4,668 4,668 - -

- 4,668 - 4,668 4,668 Financial assets not measured at fair valueTrade and other receivables and deposit for foreign currency (excluding prepayments,advance payments, WHT and deposit for shares). 2,522,621 - - 2,522,621 - - -

Cash and cash equivalents 2,015,855 - - 2,015,855 - - - 4,538,476 - - 4,538,476 - - -

Financial liabilities not measured at fair valueBank loans - - 1,556,491 1,556,491 - 1,556,366 - Finance lease liability - - 1,317,334 1,317,334 - 1,330,286 - Trade and other payables (excluding non-income and other related taxes) - - 4,412,729 4,412,729 - - -

- - 7,286,554 7,286,554 - 2,886,652 -

The following table shows the classification, carrying amount and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financialassets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Fair Value

Fair ValueCarrying Amount

Carrying Amount

80


31 December 2016

Notes to the consolidated and separate financial statementsCompany


Available for sale


In thousands of nairaFinancial assets measured at fair valueInvestment in Equity securities - 4,695 - 4,695 4,695 - -

- 4,695 - 4,695 4,695 - - Financial assets not measured at fair valueTrade and other receivables and deposit for foreign currency (excluding prepayments,advance payments, WHT and deposit for shares). 2,661,163 - - 2,661,163 - - -


Financial liabilities not measured at fair valueBank loans - - 1,105,233 1,105,233 - 1,222,307 - Finance lease liability - - 908,461 908,461 - 917,382 - Trade and other payables (excluding accruals, PAYE, VAT and WHT) - - 5,846,189 5,846,189 - - -

- - 7,859,883 7,859,883 - 2,139,689 -


Available for sale


In thousands of nairaFinancial assets measured at fair valueInvestment in Equity securities - 4,668 - 4,668 4,668 - -

- 4,668 - 4,668 4,668 - - Financial assets not measured at fair valueTrade and other receivables and deposit for foreign currency (excluding prepayments,advance payments, WHT and deposit for shares). 3,990,940 - - 3,990,940 - - -


Financial liabilities not measured at fair valueBank loans - - 1,556,491 1,556,491 - 1,556,366 - Finance lease liability - - 1,317,334 1,317,334 - 1,330,286 -

Trade and other payables (excluding non-income and other related taxes) - - 3,694,956 3,694,956 - -

- - 6,568,781 6,568,781 - 2,886,652 -

Fair Value

Fair Value

Carrying Amount

Carrying Amount

81


31 December 2016


B. Measurement of fair values(i) Financial instruments in level 1

(ii) Financial instruments in level 2

C. Financial risk managementOverviewThe Group has exposure to the following risks arising from financial instruments:● Credit risk● Liquidity risk● Market risk

(i) Risk management framework

(ii) Credit risk

Exposure to credit risk

In thousands of naira 2016 2015 2016 2015Trade and other receivables ** 2,528,092 2,522,621 2,661,163 3,990,940 Cash and bank balances 1,976,777 2,015,855 1,841,906 1,921,534 Deposit for foreign currency 375,274 - 375,274 -

4,880,143 4,538,476 4,878,343 5,912,474

** This excludes prepayments, advance payments, WHT and deposit for shares

The fair value of financial instruments traded in active markets (quoted equity) is based on quoted market prices at thereporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange,dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularlyoccurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Company is the bid price at the reporting date. Theseinstruments are included in level 1. There were no transfers between levels during the year.

The fair value of financial instruments that are not traded in an active market (loans and borrowings and finance leases)is determined by using discounted cash flow valuation techniques. This valuation technique maximize the use ofobservable market data by using the market related interest rate for discounting the contractual cash flows. There are nosignificant unobservable inputs. There were no transfers between levels during the year. The basis of measurement hasremained the same between current and prior years.


The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

The Audit Committee oversees how management monitors compliance with the risk management policies andprocedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.The Company's Audit Committee is assisted in its oversight role by the Internal Audit Function. Internal Auditundertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which arereported to the Audit Committee.

The board of directors has overall responsibility for the establishment and oversight of the Group's risk managementframework. The board of directors has established the Strategic Planning and Finance Committee, which is responsiblefor developing and monitoring the Company’s risk management policies. The Committee reports regularly to the boardof directors on its activities.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to setappropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies andsystems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, throughits standard operating procedures, aims to develop a disciplined and constructive control environment in which allemployees understand their roles and obligations.

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meetits contractual obligations, and arises principally from the Group's receivables from customers, bank balances, anddeposits.

82


31 December 2016

Notes to the consolidated and separate financial statementsTrade and other receivables

In thousands of naira 2016 2015 2016 2015Trade receivables 1,599,524 1,071,260 993,161 945,408 Other receivables ** 928,568 1,451,361 1,668,002 3,045,532

2,528,092 2,522,621 2,661,163 3,990,940

** This excludes prepayments, advance payments, WHT and deposit for shares.

Concentration of credit risk

The GroupIn thousands of naira

2016 2015 2016 2015Food and hospitality 158,996 65,799 - - Real Estate 133,465 555,277 1,157,178 2,175,486 Motors 2,235,631 1,901,545 1,503,985 1,815,454

2,528,092 2,522,621 2,661,163 3,990,940

Impairment

In thousands of naira Gross Provision Gross Provision0-60 days 628,241 - 1,061,478 (1,061,478)60-90 days 343,606 (10,655) 730,727 (95,607)90-120 days 462,623 (48,960) 277,613 (34,351)120-180+ days 366,891 (147,400) 133,475 (59,941)180-360 days 33,640 (28,462) 218,010 (98,666)

1,835,001 (235,477) 2,421,303 (1,350,043)



At 31 December 2016, the ageing of trade receivables including those that were past due is

At 31 December 2016, the maximum exposure to credit risk for trade and other receivables by industry was as follows.

At 31 December 2016, the maximum exposure to credit risk for trade and other receivables was as follows

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,management also considers the factors that may influence the credit risk of its customer base, including the default riskof the industry.

The Group has established a credit policy under which each new customer is analyzed individually for creditworthinessbefore the Group’s standard payment and delivery terms and conditions are offered. Credit sales limits are establishedfor each customer and are reviewed regularly. The concentration of credit risk is limited due to the large and unrelatedcustomer base. The company has pledged no trade receivables during the year.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade andother receivables. The main components of this allowance are a specific loss component that relates to individuallysignificant exposures, and a collective loss component established for groups of similar assets in respect of losses thathave been incurred but not yet identified.

The Group has also established a policy under which staff are required to have spent at least one year in employmentwith the Group before they can access loans extending for a period of one year. Deductions are made on a monthlybasis from staff emoluments to recover the loans, and any outstanding loan balance is deducted from an exitingemployee's final entitlements.

There has been no history of default in respect of amounts due from related companies as such amounts are alwayssettled in full. Accordingly management considers the amount due from related parties as recoverable.

The Group2016 2015

83


31 December 2016


In thousands of naira Gross Provision Gross Provision0-60 days 597,752 - 1,024,751 (1,024,751)60-90 days 271,680 (2,411) 669,659 (119,490)90-120 days 134,790 (18,960) 267,218 - 120-180+ days 84,562 (78,500) 142,962 (14,941)180-360 days 32,710 (28,462) 98,666 (98,666)

1,121,494 (128,333) 2,203,256 (1,257,848)

Movement in allowance for doubtful debts

In thousands of naira 2016 2015 2016 2015Trade receivablesBalance at 1 January 205,802 150,996 113,607 77,108 Impairment loss recognised 29,675 54,806 14,726 36,499 Balance at 31 December 235,477 205,802 128,333 113,607

Cash and cash equivalents

Deposit for foreign currency


The Group does not hold collateral on these balances. The Group believes that the unimpaired amounts that are pastdue are still collectible in full based on historic payment behaviour and extensive analysis of customer credit risk.

The Group's deposit for foreign currency of N379.5 million as at 31 December 2016 (2015: Nil) represents itsmaximum exposure on these assets. The deposit is held by banks and the Group mitigates its exposure by selectingreputable banks with good credit ratings and a history of strong financial performance.

2016 2015

The Group held cash and cash equivalents of ₦1.98 billion at 31 December 2016 (2015: ₦2 billion), which representsits maximum credit exposure on these assets. The cash and cash equivalents are held with commercial banks. TheCompany manages the risk associated with its cash and cash equivalents by selecting banks with strong financialposition and history of good performance.

The Company

84


31 December 2016

Notes to the consolidated and separate financial statements(iii) Liquidity risk

Exposure to liquidity risk

Carrying amount Carrying amount31st December 2016In thousands of naira Up to 1 year

Between 1 and 3 Years Total Up to 1year

Between 1 and 3 Years Total

Non-derivative financial liabilitiesBank overdrafts (Note 21) 2,379,638 2,379,638 - 2,379,638 813,821 813,821 - 813,821 Bank loans (Note 26.1.1) 1,105,233 615,761 879,935 1,495,696 1,105,233 615,761 879,935 1,495,696 Finance lease liability (Note 26.1.2) 908,461 484,566 662,749 1,147,315 908,461 484,566 662,749 1,147,315

Trade and other payables (Note 27) (excluding non-income and other related taxes) 6,563,828 6,563,828 - 6,563,828 5,846,189 5,846,189 - 5,846,189

10,957,160 10,043,793 1,542,684 11,586,477 8,673,704 7,760,337 1,542,684 9,303,021 31st December 2015Non-derivative financial liabilitiesBank overdrafts (Note 21) 2,398,002 2,398,002 - 2,398,002 830,245 830,245 - 830,245 Bank loans (Note 26.1.1) 1,556,491 690,155 1,351,936 2,042,091 1,556,491 690,155 1,351,936 2,042,091 Finance lease liability (Note 26.1.2) 1,317,334 610,168 1,150,392 1,760,560 1,317,334 610,168 1,150,392 1,760,560

Trade and other payables (Note 27) (excluding non-income and other related taxes) 4,412,729 4,412,729 - 4,412,729 3,694,956 3,694,956 - 3,694,956

9,684,556 8,111,054 2,502,328 10,613,382 7,399,026 5,825,524 2,502,328 8,327,852

(iv) Market risk

Currency risk

(a) Central Bank of Nigeria (CBN) qualifying foreign exchange transactions

Contractual cash flows Contractual cash flows

The Group's policy is to ensure that its net exposure in respect of monetary assets and liabilities denominated in foreign currencies are kept to an acceptable level. The Company monitors the movement in foreign currencies on an ongoing basis and takesappropriate actions as necessary.

Some of the Company's transactions such as foreign loans and borrowings which are supported by certificate of capital importation and importation of inventory which were done using Form M, qualified for official foreign exchange transactions underthe CBN foreign exchange guidelines. Accordingly, the Company was able to source for foreign exchange from the banks at the official exchange rates for payments for these transactions during the year.

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as faras possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group aims to maintain the level of cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities over the next 60 days. The Group also monitors the level of expected cash inflows on trade and other receivablestogether with expected cash outflows on trade and other payables. At 31 December 2016, the expected cash flows from trade and other receivables maturing within two months were N 1.16 billion (2015: N 1.04 billion). These excludes potential impactof extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is tomanage and control market risk exposures within acceptable parameters, while optimizing return.

The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of the Group. The functional currency of the Group is primarilythe Naira. The currencies in which these transactions are primarily denominated are Euro (€), US Dollars (US$) and Pounds Sterling (GBP). The currency risk is the risk that the fair value or future cash flows of financial instrument will fluctuate due tothe changes in foreign exchange rates.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements:


85


31 December 2016

Notes to the consolidated and separate financial statementsExposure to currency riskThe summary quantitative data about the Group and its exposure to currency risk was as follows:

Group

US$ '000 €' 000 GBP' 000 US$ '000 €' 000 GBP' 000AssetsCash and cash equivalents 2,971 3 13 65 4 3 Trade receivables 1,368 - - - - -

LiabilitiesTrade and other payables (9,245) (1,232) (372) (11,810) (1,529) (420)Net exposure (4,906) (1,229) (359) (11,745) (1,525) (417)

Company

US$ '000 €' 000 GBP' 000 US$ '000 €' 000 GBP' 000AssetsCash and cash equivalents 2,959 2 13 16 3 3 Trade receivables 1,368 - - - - -

LiabilitiesTrade and other payables (9,245) (164) (255) (11,810) (539) (309)Net exposure (4,918) (162) (242) (11,794) (536) (306)

The following significant exchange rates were applied for CBN qualifying transactions:

Naira 2016 2015 2016 2015US$ 1 256.06 199.05 315.00 197.75 € 1 282.87 217.30 335.29 222.50 GBP 1 342.64 295.29 390.92 305.00

Sensitivity analysis

In thousands of Naira Strengthening Weakening Strengthening Weakening31 December 2016US$ (20% movement) 309,141 (309,141) 309,897 (309,897)€ (20% movement) 82,481 (82,481) 10,863 (10,863)GBP (20% movement) 28,068 (28,068) 18,921 (18,921)

31 December 2015US$ (20% movement) 464,515 (464,515) 466,453 (466,453)€ (20% movement) 67,863 (67,863) 23,852 (23,852)GBP (20% movement) 25,437 (25,437) 18,666 (18,666)

The GroupProfit or loss

A reasonably possible strengthening (weakening) of the naira against all other currencies at 31 December would have affected the measurement of financial instruments denominated in a foreign currency and affected profit or loss (no impact on equity)by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Year end spot rate

2016 2015

The CompanyProfit or loss

Average rate during the year

2016 2015

86


31 December 2016

Notes to the consolidated and separate financial statements(b) Central Bank of Nigeria non qualifying transactions

Group

US$'000 €'000 GBP'000 US$'000 €'000 GBP'000Trade and other payables (1,301) - (3) (191) (65) (215)Net Exposure (1,301) - (3) (191) (65) (215)

Company

US$'000 €'000 GBP'000 US$'000 €'000 GBP'000AssetTrade and other receivable - 3 - - - -

LiabilitiesTrade and other payables (1,301) - (3) (191) (65) (215)Net Exposure (1,301) 3 (3) (191) (65) (215)Sensitivity analysis

In thousands of Naira Strengthening Weakening Strengthening Weakening31 December 2016US$ (20% movement) 318,745 (318,745) 318,745 (318,745)€ (20% movement) (753) 753 (723) 723 GBP (20% movement) 885 (885) 885 (885)31 December 2015US$ (20% movement) 10,085 (10,098) 10,085 (10,098)€ (20% movement) 3,614 (3,614) 3,614 (3,614)GBP (20% movement) 16,233 (16,225) 16,233 (16,225)

A reasonably possible strengthening/(weakening) of the naira against all other currencies at 31 December would have affected the measurement of financial instruments denominated in aforeign currency and affected profit or loss (no impact on equity) by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant andignores any impact of forecast sales and purchases.

The GroupProfit or loss

Certain transactions entered into by the Company which are denominated in currencies other than the functional currency, (the Naira) primarily the US Dollars (US$), Euro (€) and Pounds (£)are more exposed to currency risk as these transactions can only be settled by sourcing for foreign exchange from the parallel market usually at rates higher than the official rates. Currency riskis the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates.

The summary of quantitative data about the Company’s exposure to currency risk in respect of these transactions is as follows:

2015

2015

Profit or loss

2016

2016

The Company

87


31 December 2016

Notes to the consolidated and separate financial statementsThe following exchange rates were applied for the Non - CBN qualifying transactions:

Year end spot rateNaira 2016 2015 2016 2015US$ 1 403.70 265.74 490.00 264.00 € 1 459.33 271.51 502.00 278.00 GBP 1 538.73 365.48 590.00 377.50

Interest rate risk

Variable instrumentsIn thousands of naira 2016 2015 2016 2015Financial liabilities:Bank overdrafts (2,379,638) (2,398,002) (813,821) (830,245)Loans and borrowings (476,254) (1,157,659) (476,254) (1,157,659)

(2,855,892) (3,555,661) (1,290,075) (1,987,904)

Cash flow sensitivity analysis for variable rate instrumentsA 1% movement in interest rate would have affected profit or loss (no impact on equity) as shown below.

In thousands of naira 1% increase 1% decrease 1% increase 1% decreaseCash flow sensitivity (net)2016 (28,559) 28,559 (12,901) 12,901

2015 (35,557) 35,557 (19,879) 19,879 Fair value sensitivity analysis for fixed rate instrumentsAs at year end, the company has no fixed rate instruments.

Other market price risk

Sensitivity analysis – Equity price risk

Interest rate risk comprises interest rate risk that results from borrowings at fixed rates and the interest cash flow risk that results from borrowings at variable rates. The board of directors isresponsible for setting the overall duration and interest management targets. The Company's objective is to manage its interest rate exposure through careful borrowing profiling and use ofheterogeneous borrowing sources.

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

Nominal amountThe CompanyThe Group

Average rate during the year

The Group The CompanyProfit/loss Profit/loss

The Group is exposed to equity price risk, which arises from available-for-sale equity securities held for dividend and capital gains. The management of the Group monitors the proportion of equity securities in its investment portfolio based on market indices. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the Strategic Planning and Finance Committee.The primary goal of the Group’s investment strategy is to maximize investment returns to improve its returns in general.

All of the Group’s listed equity investments are listed on Nigerian Stock Exchange. A 10% increase in the equity price at the reporting date would have increased equity by ₦469 thousand (2015: an increase of ₦467 thousand); an equal change in equity price in the opposite direction would have decreased equity by ₦469 thousand (2015: a decrease of ₦467 thousand).

88


31 December 2016


30 Non-controlling interests

In thousands of naira Trans Guinea

Limited

Other immaterial

subsidiaries Total31 December 2016NC1 Percentage 40%Non-current Assets 50,679 Current Assets 56,615 Non-current Liabilities - Current Liabilities (334,787)Net Liabilities (227,493) - (1,500,451) (1,727,944)Carrying amount of NCI (90,997) - (59,007) (150,004)Revenue 111,462 2,884,702 Loss (92,073) (907,845)

OCI - 10,654 Total comprehensive loss (92,073) (897,191)

Loss allocated to NCI (36,829) (43,239) (80,068)OCI allocated to NCI - - 533 533 Total comprehensive loss allocated to NCI (36,829) (42,706) (79,535)Cash flow from operating activities 573,619 Cash flow from investing activities (44,635)Cash flow form financing activities (518,791)

Net increase in cash and cash equivalents 10,193

In thousands of naira Leventis Foods Limited

Trans Guinea Limited

Other immaterial

Subsidiaries Total31 December 2015

NC1 Percentage 49% 40%

Non-current Assets 1,865,685 64,792

Current Assets 314,153 173,972

Non-current Liabilities (52,976) -

Current Liabilities (4,250,930) (337,380)

Net(Liabilities)/Assets (2,124,068) (98,616) 346,549 (1,876,135)

Carrying amount of NCI (1,040,793) (39,446) 31,189 (1,049,050)

Revenue 2,188,238 123,190

Loss (642,178) (88,303) OCI 18,096 -

Total comprehensive (loss)/income (624,082) (88,303) 42,131 (Loss)/Profit allocated to NCI (293,447) (32,939) 3,535 (322,851)

OCI allocated to NCI 8,868 - - 8,868

Total comprehensive income allocated to NCI (284,579) (32,939) 3,535 (313,983)

Cash flow from operating activities 376,617 58,681 -

Cash flow from investing activities (138,017) (41,198) -

Cash flow form financing activities - - -

Net increase in cash and cash equivalents 238,600 17,483 -

The following table summarizes the information relating to each of the Group's subsidiaries that has material NCI, before any intra group eliminations.

89


31 December 2016

Notes to the consolidated and separate financial statements30.1 Acquisition of NCI in Abuja Capital Motors

30.2 Acquisition of additional equity in Leventis Foods Limited

The following summarizes the changes in the Company's ownership interest in Leventis Foods Limited

In thousand of NairaCompany’s ownership interest as at 1 January 2016 (1,083,275) Effect of conversion of loans to equity 1,006,273 Total Comprehensive loss (901,579) Company's net interest as at 31 December 2016 (978,581)

31 Operating leases

A Leases as a lessee

in thousands of naira2016 2015 2016 2015

Less than one year 36,764 27,606 33,776 27,606 Between one and five years 14,348 7,539 3,869 7,539 More than five years 766 893 766 893

51,878 36,038 38,411 36,038

B Leases as lessor

Future Minimum lease payments

in thousands of naira2016 2015 2016 2015

Less than one year 161,772 161,772 67,106 67,106 Between one and five years 137,180 137,180 120,863 120,863 More than five years 15,501 15,501 10,062 10,062

314,453 314,453 198,031 198,031


The Group leases out its investment properties (see Note 14). During 2016, investment property rentals of₦1.5 billion (2015: ₦1.4 billion.) and ₦1.4 billion (2015: ₦1.3 billion) were included in revenue for thegroup and company respectively (see Note 6).

In prior year, the Group acquired an additional 29% interest in Abuja Capital Motors for N146 million incash. The Group recognised a decrease in NCI and retained earnings of ₦3 million.The carrying amount of Abuja Capital Motors in the Group's financial statements on the date of acquisitionwas ₦10 million.

In 2016, loans receivable by the Company from Leventis Foods Limited, amounting to N1.2 billion wereconverted to new shares. The conversion resulted in a 44% increase in the Group's shareholding in LeventisFoods Limited from 51% to 95%. The Group recognised a decrease in retained earnings and non-controllinginterest of N978.6 million

The company leases certain buildings under operating lease arrangements. Operating lease payments whichare often paid at inception of the lease are included in prepayments and are recognised as an expense on astraight-line basis over the term of the relevant lease except where another more systematic basis is morerepresentative of the time pattern in which economic benefits from the lease asset are consumed. Contingentrentals arising under operating leases are recognised as an expense in the period in which they are incurred.At the year end the future minimum lease payments under non-cancellable operating leases were as follows:

Operating lease rental expenses for the year amounted to ₦68.6 million (2015: ₦37.5 million) and ₦62.5million (2015: ₦29.2 million) for the group and company respectively. These amounts are included inadministrative expenses in the statement of profit or loss and other comprehensive income.

At 31 December, the future minimum lease payments under non-cancellable leases are receivable asfollows;


90


31 December 2016


32 CommitmentsFinancial Commitments

33 Contingent liabilitiesPending litigation and claims

34 Related partiesParent and ultimate controlling entity

A Transactions with key management personneli) Loans to directors

ii) Key management personnel compensation

In thousands of naira 2016 2015Short-term employee benefits 61,202 60,902 Long term-employment benefits 21,671 21,397

82,873 82,299

Some of the subsidiaries are in loss making position as at 31 December 2016. The accumulated losses of someof these subsidiaries have fully eroded its shareholder's fund. Net liabilities for loss making subsidiaries as at 31December 2016 was N2.1 billion (2015: N2.2 billion). Amount payable to the parent company, A.G. Leventis(Nigeria) Limited, as at year end is N2.0 billion.As a result of the above, the Company has committed itself to provide continued support to all subsidiaries inthe Group with net liability position.The Directors are of the opinion that all known liabilities and commitments which are relevant in assessing theCompany's state of affairs have been taken into consideration in the preparation of the financial statements underreview.

Key management personnel compensation comprised the following:

During 2016, no loans were advanced to directors (2015: ₦ 14.3 million). No interest is charged on the loansand they are repayable in cash on demand. At 31 December 2016, the balance outstanding was ₦8.5 million(2015: ₦ 8.6 million) and is included in trade and other receivables.

Compensation of the Group's key management personnel includes salaries and certain non-cash benefits

There are certain lawsuits and claims pending against the Group and the Company in various courts of lawwhich are being handled by external legal counsels. The contingent liabilities in respect of pending litigation andclaims amounted to N90.5 million (2015: N40 million) as at 31st December 2016. In the opinion of theDirectors, the Company's liabilities are not likely to be material, but the amount cannot be determined withsufficient reliability thus no provision has been made in these financial statements.

Related parties include the parent company, Leventis Holding SA, Boval SA, Leventis Overseas Ltd and A.GLeventis group entities, joint ventures and other entities with which the Company shares common directors.Directors, their close family members and any employee who is able to exert a significant influence on theoperating policies of the Company are considered as related parties. Key management personnel are alsoregarded as related parties. Key management personnel are those persons having authority and responsibility forplanning, directing and controlling the activities of the entity, directly or indirectly, including any director(whether executive or otherwise) of that entity.

As at the year ended 31st December 2016 Leventis Holding SA, Boval SA and Leventis Overseas Ltd owned56.98 &, 24.16% and 6.68% respectively of the issued share capital of A.G Leventis (Nigeria) Plc. Theremaining shares of 12.18% is owned by the general public. The ultimate holding company is Leventis HoldingsSA.

The Company had transactions with its parent, and other related parties who are related to the Company. Thetotal amounts due to related parties by the nature of the transaction are shown below:

91


31 December 2016

Notes to the consolidated and separate financial statementsChairman's and directors' emoluments

In thousands of naira 2016 2015 2016 2015Chairman 16,684 23,752 16,684 23,752 Other Directors 39,323 10,904 36,556 29,711

56,007 34,656 53,240 53,463

Chairman 23,752 23,752 16,684 23,752 Highest Paid Director 21,939 17,516 21,939 17,516

45,691 41,268 38,623 41,268

2016 2015 2016 2015100,000 - 400,000 8 8 3 - 400,001 - 1,000,000 4 5 1 5 1,000,001 and above 6 6 2 1 Directors with no emolument 1 1 - 1

19 20 6 7

B Other related party transactions

In thousands of naira 2016 2015 2016 2015Leventis Foods Limited 98,295 260,084 - - Victoria Beach Hotels Limited - 5,045 - - Abuja Capital Motors Limited - 551 - - Transguinea Limited 15,099 13,825 - 27,190 IDDO Investments Limited 756 687 - - TCN Properties Limited 756 687 - - Guinea Construction Company Limited 606 551 - - Druckfarben Nigeria Limited 45,360 40,265 - - Chrisstahl Nigeria Limited 42,344 36,916 - - Nigerian Bottling Company Limited 4,489,675 4,840,984 - - Frigoglass Industries Nigeria Limited 66,389 239,767 - - Leventis Overseas Limited - - 2,588,744 1,987,252 PikWik Nigeria Limited 1,667 - - - Others 83,632 - - -

4,844,579 5,439,362 2,588,744 2,014,442

During the year, the company entered into the following transactions with related parties including members of the Group:

Sale of goods and servicesPurchase of goods and

services

The CompanyNumber

Directors who sat on several boards within the Group are counted once.

NumberThe Group

The number of Directors excluding the Chairman whose emoluments were within the following ranges are:


92


31 December 2016

Notes to the consolidated and separate financial statementsThe following amounts were outstanding at the balance sheet date:

In thousands of naira 2016 2015 2016 2015Leventis Foods Limited - 1,630,484 - - Victoria Beach Hotel Limited 19,928 5,821 (2,033) (113,967)Abuja Capital Motors Limited 80,022 43,283 (3,411) (3,380)Transguinea Limited 218,796 336,761 - (600)IDDO Investments Limited - - (92,770) (690)TCN Properties Limited 494 494 (304,253) (224,133)Guinea Construction Company Limited - - (3,489) (3,637)Leventis Power Systems Limited - - (69,550) (69,550)Druckfarben Nigeria Limited 6,679 3,798 - - Chrisstahl Nigeria Limited 10,177 23,722 - - Nigerian Bottling Company Limited 297,472 766,084 - - Frigoglass Industries Nigeria Limited 89,483 65,303 - - Leventis Overseas Limited - - (2,634,010) (1,909,553)Others 393,820 3,976 (187,948) -

1,116,871 2,879,726 (3,297,464) (2,325,510)

Related party balances is included in Note 18.1 and Note 27

The amounts outstanding are unsecured and are payable or receivable in cash. No guarantees have been given orreceived. Allowance have been made for doubtful debts in respect of the amounts owed by related parties wherenecessary and the amounts bear no interest.

Amounts due from related parties

Amounts due to related parties

93


31 December 2016

Notes to the consolidated and separate financial statements35 Operating segmentsA. Basis for segmentation

The following summary describes the operations of each reportable segment.

Reportable segments OperationsFood and hospitality Hotel management and sales of bread and pastriesSales, transportation and servicing of trucks and enginesLeasing out of property and other related services Letting out of residential and commercial properties

B Information about reportable segments

The Group

2016

in thousands of nairaFood and

hospitality

Sales, transportation and servicing of

trucks and engines Rent and other related services Total

Revenue 2,798,768 8,468,885 1,510,253 12,777,906 Finance income 8,118 171,787 - 179,905 Finance costs (496,708) (1,480,485) - (1,977,193)Segment profit (loss) before tax (1,001,509) (1,333,342) (577,261) (2,912,112)

Segment assets 2,774,075 8,322,813 9,246,661 20,343,549

Segment liabilities 2,704,395 7,766,183 3,528,928 13,999,506

2015

in thousands of nairaFood and

hospitality


engines Rent and other

services Total Revenue 2,398,180 8,441,083 1,696,598 12,535,861 Finance income 33,729 - 169,964 203,693 Finance costs (260,118) (760,479) (2,744) (1,023,341)Segment profit (loss) before tax (566,475) 683,609 174,091 291,225

Segment assets 2,503,880 10,099,909 9,898,116 22,501,905

Segment liabilities 2,704,395 7,112,880 3,593,648 13,410,923

The Company

2016

in thousands of naira


trucks and engines Rent and other related services Total

Revenue 8,340,533 1,520,647 9,861,180 Finance income 30,003 148,851 178,854 Finance costs (1,483,612) - (1,483,612)Segment profit (loss) before tax (1,940,717) (2,186,272) (4,126,989)

Segment assets 8,071,221 10,197,063 18,268,284

Segment liabilities 10,558,997 433,394 10,992,391

The Group has the following 3 strategic divisions, which are its reportable segments. The Directors of the Company have chosen toorganise the Group around differences in product and services.

Information reported to the entity's Group's executive management for the purposes of resource allocation and assessment of segmentperformance focuses on the category of products or services for each type of activity.

Information related to each reportable segment is set out below. Segment profit before tax is used to measure management performancebecause management believes that this information is the most relevant in evaluating the results of the respective segments relative toother entities that operate in same industry.

Sales and servicing of trucks, buses, heavy equipment, generators and other power equipment

94


31 December 2016

2015

in thousands of naira


engines Rent and other

services Total Revenue 8,267,110 1,703,544 9,970,654 Finance income 33,646 319,710 353,356 Finance costs (726,232) (726,232)Segment profit (loss) before tax 595,046 135,749 730,795

Segment assets 9,745,791 12,032,159 21,777,950

Segment liabilities 1,314,107 9,230,573 10,544,680

C Major Customer

36 Events after the balance sheet dateThe Directors are of the opinion that there are no post balance sheet events which could have had a material effect on the statement of financial position of the Company and the Group at 31 December 2016 and on the profit for the year ended on that date which have not been adequately provided for or disclosed in these financial statements.

Revenue generated from one customer, from transportation and servicing of engines, sales of major items and rental services amounted to N4.5 billion of the Group's total revenue (2015: N4.8 billion)

95


31 December 2016

Notes to the consolidated and separate financial statements37 Condensed financial data of consolidated entities37.1 Condensed statement of financial position

In thousands of naira GroupElimination

Entries A.G. Leventis

(Nigeria) Plc Leventis

Foods Limited

Trans Guinea Limited Others

Non-current assets - Property, plant and equipment 6,125,719 - 3,998,387 1,770,311 50,679 306,342 Investment property 5,660,334 (120,747) 5,564,968 - - 216,113 Intangible assets 14,190 - 10,135 2,757 - 1,298 Investments in subsidiaries - (415,808) 415,808 - - - Investments in joint ventures 174,688 (39,712) 214,400 - - - Financial assets (Investments in equity securities) 4,695 - 4,695 - - - Deferred tax asset 17,492 - - - - 17,492 Long term prepayments 20,834 - 20,834 - - Total non-current assets 12,017,952 (576,267) 10,229,227 1,773,068 50,679 541,245 Current assetsInventories 2,887,630 - 2,672,823 186,532 27,500 775 Trade and other receivables 2,938,956 (942,612) 3,039,857 191,104 29,115 621,493 Deposit for foreign currency 375,274 - 375,274 - - - Prepayments 146,960 - 109,197 23,801 - 13,962 Cash and bank balances 1,976,777 - 1,841,906 9,146 - 125,725 Total current assets 8,325,597 (942,612) 8,039,057 410,583 56,615 761,955 Total assets 20,343,549 (1,518,879) 18,268,284 2,183,651 107,294 1,303,200 Equity and LiabilitiesShare capital 1,323,645 (1,422,700) 1,323,645 1,000,000 1,000 421,700 Share premium 210,548 (330,686) 210,548 284,647 - 46,039 Other reserve 4,865,996 (507,780) 4,438,308 500,483 - 434,985 Retained earnings 93,858 2,728,429 1,303,392 (3,674,960) (228,493) (34,583)Attributable to equity holders of the parent 6,494,047 467,263 7,275,893 (1,889,830) (227,493) 868,141 Non-controlling interests (150,004) (150,004) - - - - Total equity 6,344,043 317,259 7,275,893 (1,889,830) (227,493) 868,141

96


31 December 2016

Notes to the consolidated and separate financial statementsNon-current liabilitiesFinance lease liabilities 566,000 - 566,000 - - - Bank loans 678,974 - 678,974 - - - Retirement benefit obligation 344,724 - 298,561 43,260 - 2,903 Deferred tax liabilities 532,434 - 480,686 - - 51,748 Long term deferred revenue 223,646 - 223,646 - - - Total non-current liabilities 2,345,778 - 2,247,867 43,260 - 54,651 Current liabilitiesBank overdrafts 2,379,638 - 813,821 1,565,637 180 - Current tax liabilities 217,528 - 83,677 - - 133,851 Finance lease liabilities 342,461 - 342,461 - - - Bank loans 426,259 - 426,259 - - - Trade and other payables 7,972,602 (1,836,211) 6,795,629 2,464,583 334,607 213,994 Short term deferred revenue 315,240 - 282,677 - - 32,563 Total current liabilities 11,653,728 (1,836,211) 8,744,524 4,030,220 334,787 380,408 Total liabilities 13,999,506 (1,836,211) 10,992,391 4,073,480 334,787 435,059 Total equity and liabilities 20,343,549 (1,518,952) 18,268,284 2,183,650 107,294 1,303,200

97


31 December 2016

Notes to the consolidated and separate financial statements37.2 Condensed statement of comprehensive income

In thousands of naira GroupElimination

Entries A.G. Leventis

(Nigeria) Plc Leventis

Foods Limited


Continuing operationsRevenue 12,777,906 (108,676) 9,861,180 2,792,756 111,462 121,184 Cost of sales (10,601,804) - (7,777,468) (2,696,990) (105,486) (21,860) Gross profit 2,176,102 (108,676) 2,083,712 95,766 5,976 99,324 Other income 34,389 - 11,560 - 1,350 21,479 Selling and distribution expenses (580,490) - (383,420) (144,979) - (52,091) Administration expenses (2,654,662) 2,494,022 (4,534,083) (387,722) (87,111) (139,767) Operating profit (1,024,661) 2,385,346 (2,822,231) (436,935) (79,785) (71,055)Finance income 179,905 (29,120) 178,854 - - 30,171 Finance costs (1,977,193) 29,120 (1,483,612) (518,760) (3,940) - Net finance costs (1,797,288) - (1,304,758) (518,760) (3,940) 30,171 Share of (loss)/profit from joint venture (82,691) - - - - - Minimum taxes (7,472) - - (5,990) - (1,482)Loss after minimum taxes (2,912,112) - (4,126,989) - - - Loss before income tax (2,912,112) 2,385,346 (4,126,989) (955,695) (83,725) (40,884)Income tax expense 345,832 - 360,233 - (8,348) (6,053) Loss for the year after tax (2,566,280) 2,385,346 (3,766,756) (955,695) (92,073) (46,937)Other comprehensive income, net of taxItems that will never be reclassified subsequently to profit or loss: Remeasurement of defined benefit obligation 123,592 - 108,943 15,667 - (1,018) Related tax (39,549) - (34,862) (5,013) - 326

84,043 74,081 10,654 - (692)Items that may be reclassified subsequently to profit or loss:Available for sale financial assets 27 - 27 - - -

27 27 - - - Other comprehensive income for the year net of tax 84,070 74,108 10,654 - (692)Total comprehensive income for the year (2,482,210) (3,692,648) (945,042) (92,073) (47,629)

98


31 December 2016


37.3 Condensed statement of cash flow

in thousands of naira GroupElimination

entries A.G Leventis (Nigeria) Plc

Leventis Foods Limited


Cash flow from operating activitiesProfit/loss (2,566,280) 2,259,498 (3,766,756) (961,686) (92,073) (5,263)Adjustments for:Depreciation of property plan and equipment 1,294,800 - 1,101,733 134,873 14,377 43,817 Depreciation of investment properties 69,990 65,292 - - 4,698 Amortisation 20,426 - 16,735 2,393 - 1,297 Finance income (179,905) 29,120 (178,854) - - (30,171)Finance cost 1,977,193 (29,120) 1,483,612 518,760 3,940 1 Gain on sale of property, plant and equipment (9,335) - (1,057) - - (8,278)Employee benefits 91,838 - 82,595 12,243 - (3,000)Long service benefit expense 10,295 4,193 9,864 1,447 - (5,209)Impairment in investment in subsidiaries - (1,487,079) 1,487,079 - - - Impairment of receivable from subsidiary - (893,600) 893,600 Tax expense (345,832) - (360,233) - 8,530 5,871 Minimum taxes 7,472 - 5,990 1,482 Write off of Property, plant and equipment 27,915 - 27,915 - - - Write off Investment property 53,650 - 53,650 - - -

Share of loss/(profit) on joint ventures 82,691 82,691 - - - - Write off of goodwill 4,486 4,486 - - - -

539,404 (29,811) 915,175 (285,980) (65,226) 5,245 Changes inInventories 750,360 - 660,165 14,183 71,500 4,512 Trade and other receivables 632 759,497 (757,803) (90,218) 39,091 50,065 Deposit for foreign currency (375,274) (375,274)Prepayment 35,832 - 57,393 (12,321) - (9,239) Trade and other payables 2,287,262 (712,613) 2,104,199 955,694 (47,925) (12,093) Deferred income/revenue (184,874) - (167,203) - - (17,671) Cash generated from Operations 3,053,342 17,073 2,436,652 581,358 (2,560) 20,818

99


31 December 2016


Taxes paid (63,257) - (43,481) - - (19,776) Gratuity paid (53,271) - (25,379) (7,739) - (20,153) Long service award paid (3,526) (2,572) (954) Net cash from operating activities 2,933,288 17,073 2,365,220 573,619 (2,560) (20,065)

Cashflow from investing activitiesInterest received 137,572 (22,531) 131,643 - - 28,459 Proceeds from sale of property plant and equipment 13,985 - 2,116 - - 11,869 Acquisition of property plant and equipment (306,884) - (261,969) (44,635) (280) - Acquisition of intangibles (3,684) - (3,684) - - - Net cash used in investing activities (159,011) (22,531) (131,894) (44,635) (280) 40,328

Cashflow from financing activitiesInterest paid (1,880,599) 18,219 (1,382,138) (518,791) (4,106) 6,217 Dividend paid (54,261) - (54,261) - - - Proceeds from loan and borrowings - - - - - - Repayments of borrowing (451,258) - (451,258) - - - Repayments of finance lease liabilities (408,873) - (408,873) - - - Net cash from financing activities (2,794,991) 18,219 (2,296,530) (518,791) (4,106) 6,217 Net decrease in cash and cash equivalents (20,714) 12,761 (63,204) 10,193 (6,946) 26,480 Cash and cash equivalent at 1 January (382,147) - 1,091,289 (1,566,684) 6,766 86,482 Cash and cash equivalent at 31 December (Note 21) (402,861) 12,761 1,028,085 (1,556,491) (180) 112,962

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Other national disclosures

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Other national disclosuresConsolidated and separate statements of value added

In thousands of naira 2016 % 2015 % 2016 % 2015 %

Revenue 12,777,906 12,535,861 9,861,180 9,970,654 Other income 34,389 102,830 11,560 53,164 Finance income 179,905 203,693 178,854 353,356

Bought in materials: - Local (7,417,915) (2,085,035) (7,065,440) (2,813,060) - Imported (3,995,676) (6,659,460) (3,550,092) (3,550,092)Value added 1,578,609 100 4,097,889 100 (563,938) 100 4,014,022 100

Applied as follows:

To pay employees:Salaries, wages and otherrelated staff cost 2,541,056 161 2,300,593 56 1,987,465 (352) 1,846,725 40

To pay providers of capital:

Interest expenses 847,173 54 939,326 23 557,972 (99) 693,800 13

To pay government:Taxation - - - - - - - 6

To provide for replacementand expansion of assets: - Depreciation and amortization 1,385,213 88 1,352,763 33 1,183,759 (210) 1,177,718 21 - Deferred taxation (548,485) (35) 5,044 0 (526,378) 93 (60,166) 3 - Non controlling interest (80,068) (5) (322,851) (8) - - - - - To deplete reserves (2,566,280) (163) (176,986) (4) (3,766,756) 668 355,945 17

1,578,609 100 4,097,889 100 (563,938) 100 4,014,022 100

Value added represents the additional wealth which the Group has been able to create by its own and its employees'efforts. This statement shows the allocation of that wealth between employees, shareholders and government and thatretained for the future creation of more wealth.


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Other national disclosuresGroup financial summary31 DecemberIn thousands of naira 2016 2015 2014 2013 2012

AssetsProperty, plant and equipment 6,125,719 6,762,099 7,790,900 6,316,713 6,551,466 Investment properties 5,660,334 5,780,066 5,270,962 4,702,353 4,743,124 Goodwill on consolidation - 4,486 7,212 7,212 7,212 Other intangible assets 14,190 30,932 19,687 12,725 - Investments in joint ventures 174,688 227,978 268,234 178,020 138,660 Financial assets (Investments in equity securities) 4,695 4,668 6,309 10,248 9,734

Long term prepayment 20,834 14,147 - - - Deferred tax asset 17,492 - - - - Net current liabilities/assets (3,328,131) (1,597) (775,407) 849,406 874,019

8,689,821 12,822,779 12,587,897 12,076,677 12,324,215 Long term liabilitiesFinance lease liabilities 566,000 912,069 750,397 746,648 Loans and borrowings 678,974 1,103,673 985,762 214,842 871,865 Retirement benefit obligation 344,724 422,980 444,205 605,950 671,583 Deferred tax liabilities 532,434 1,023,878 1,021,693 961,713 551,737 Long term deferred revenue 223,646 269,197 - - -

2,345,778 3,731,797 3,202,057 2,529,153 2,095,185 6,344,043 9,090,982 9,385,840 9,547,524 10,229,030

Capital and reservesShare capital 1,323,645 1,323,645 1,323,645 1,323,645 1,323,645 Share premium 210,548 210,548 210,548 210,548 210,548 Capital reserves 4,865,996 4,782,459 4,364,512 4,305,730 4,354,448 Revenue reserve 93,858 3,823,380 4,219,178 4,191,252 3,937,662 Shareholders funds 6,494,047 10,140,032 10,117,883 10,031,175 9,826,303 Non controlling Interests (150,004) (1,049,050) (732,043) (483,651) 402,727

6,344,043 9,090,982 9,385,840 9,547,524 10,229,030 Revenue and profits

Revenue 12,777,906 12,535,861 11,793,715 12,057,083 11,052,231 Profit before taxation and exceptional items (2,912,112) 291,225 534,039 1,227,392 1,037,184

Profit after taxation (2,566,280) (176,986) 211,813 684,642 509,134 Non controlling Interest (80,068) (322,851) (239,680) 421,992 450,083 Profit after taxation and non controlling interest (2,566,280) (176,986) 211,813 405,075 284,170

Per share data - kobo

Earnings - Basic and diluted (94) 6 17 31 28 Note:Earnings per share are based on the profit after taxation and the number of issued and fully paid ordinary shares at the endof each financial year.

This report is not prepared under IFRS. Instead, it has been prepared in compliance with the Company and Allied MattersAct (CAMA) requirement.

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Other national disclosuresCompany financial summary

31 December

In thousands of naira 2016 2015 2014 2013 2012AssetsProperty, plant and equipment 3,998,387 4,483,024 5,521,324 3,190,537 2,973,566 Investment properties 5,564,968 5,680,002 5,166,200 4,472,145 4,508,218 Other intangible assets 10,135 23,186 19,687 12,725 - Investments in subsidiaries 415,808 728,603 776,683 776,683 968,833 Investments in joint ventures 214,400 185,000 150,500 75,000 75,000 Financial assets (Investments in equity securities) 4,695 4,668 6,309 10,248 9,734

Deferred tax asset 17,492 - - - - Long term prepayment 20,834 14,147 - - - Net current (liabilities)/assets (705,467) 3,714,777 2,334,783 4,309,350 3,144,444

9,541,252 14,833,407 13,975,486 12,846,688 11,679,795

Finance lease liabilities 566,000 912,069 750,397 746,648 Loans and borrowings 678,974 1,103,673 985,762 214,842 871,865 Retirement benefit obligation 298,561 342,996 308,325 477,276 415,347 Deferred tax liabilities 480,686 972,202 1,038,269 936,628 709,040 Long term deferred revenue 223,646 269,197 - - -

2,247,867 3,600,137 3,082,753 2,375,394 1,996,252 7,293,385 11,233,270 10,892,733 10,471,294 9,683,543

Capital and reservesShare capital 1,323,645 1,323,645 1,323,645 1,323,645 1,323,645 Share premium 210,548 210,548 210,548 210,548 210,548 Capital reserves 4,438,308 4,364,200 4,379,608 4,302,675 4,342,394 Revenue reserve 1,303,392 5,334,877 4,978,932 4,634,426 3,806,956 Shareholders funds 7,275,893 11,233,270 10,892,733 10,471,294 9,683,543

Revenue and profits

Revenue 9,861,180 9,970,654 9,218,551 9,218,551 7,515,354

Profit before taxation (4,126,989) 730,795 1,086,221 1,878,558 1,598,041 Profit after taxation (3,766,756) 355,945 768,072 1,118,993 710,350

Per share data - kobo

Earnings - Basic and diluted (142) 13 29 51 42

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a.g. leventis (nigeria) plc annual report 31 december 2016 · 1. financial highlights. 2....

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