Up Bottling Company PLC Annual Report 31...

Seven‐Up Bottling Company PLC

Annual Report

31 March 2016

Seven-Up Bottling Company PLCAnnual Report

31 March 2016

ContentsPage

Directors and other corporate information 1

Results at a glance 2

Directors’ report 3

Statement of directors’ responsibilities in relation to the financial statements 11

Report of the Audit committee 12

Independent Auditor's Report 13

Statement of financial position 14

Statement of profit or loss and other comprehensive income 15

Statement of changes in equity 16

Statement of cash flows 17

Notes to the financial statements 18

Other national disclosures 60

Value Added Statement

Five Year Financial Summary


31 March 2016

Directors and other corporate information

Board of Directors: Mr. Faysal El‐Khalil, O.O.N (Lebanese) ‐ Chairman

Mr. Sunil Sawhney (Indian) ‐ Managing Director/ CEO

Chief Farid El‐khalil (Lebanese)

Otunba (Dr) A. Ojora O.F.R., C.O.N.

*Alternate ‐ Mrs. Oluwatoyin Ojora Saraki

Alhaji Ahmadu Yaro ‐ Retired effective 22 September 2015

Chief Emmanuel N. Nwokoro

Mallam Mohammed Hayatu‐Deen O.O.N.

Mr. Ziad A. El‐Khalil (Lebanese)

Mr. Femi Mokikan

Mr. Georges Kolakez (Lebanese)

Company Secretaries: Equity Services Limited

162 Ikorodu Road (2nd floor)

Onipanu, Lagos

Registered Office: 247 Moshood Abiola Way

Ijora

Lagos

Registrars: GTL Registrars Limited

2 Burma Road

Apapa, Lagos

Independent Auditor: KPMG Professional Services

KPMG Tower

Bishop Aboyade Cole Street

Victoria Island, Lagos

Principal Bankers: Access Bank PLC.

Citibank Nigeria Limited

Diamond Bank PLC.

Fidelity Bank PLC.

First Bank of Nigeria Limited

First City Monument Bank Limited

Guaranty Trust Bank PLC.

Heritage Bank Limited

Stanbic IBTC Bank PLC.

Standard Chartered Bank Nigeria Limited

Union Bank of Nigeria PLC.

United Bank for Africa PLC.

Zenith Bank PLC.

1


31 March 2016

Results at a glanceIncrease

2016 2015 %

Financial information ‐ (in thousands of naira)

Revenue 85,634,679 82,450,505 4

Profit before taxation 3,757,390 8,749,101 (57)

Profit for the year 3,347,463 7,125,788 (53)

Share capital 320,295 320,295 ‐

Total equity 24,779,594 23,933,633 4

Data per 50k share‐ (in naira )

Basic earnings per share 5.23 11.12 (53)

Diluted earnings per share 5.23 11.12 (53)

Declared dividend* 2.75 2.50 10

Net assets 38.68 37.36 4

Dividend proposed** 1.60 2.75 (42)

Stock exchange quotation at 31 March

in Naira per share 155.00 156.00 (1)

Number of shares issued (‘000) 640,590 640,590 ‐

Market capitalization at 31 March (N '000) 99,291,506 99,932,097 (1)

Stock Exchange Information

* Declared dividend represents the final dividend proposed for the preceding year but declared during

the current year.

** The directors recommend to members a dividend payment of N1,024,944,581 (2015: N1,761,623,498)

representing N1.60 per share (2015: N2.75 per share), on the issued share capital of 640,590,363 ordinary

shares of 50 kobo each (2015: 640,590,363 ordinary shares of 50 kobo each), subject to approval by the

shareholders at the Annual General Meeting.

2


31 March 2016

Directors’ ReportFor the year ended 31 March 2016

1 Legal Form

2 Principal Activities

3 Operating Results

The highlights of the Company’s operating results are as follows:

2016 2015

In thousands of naira

Revenue 85,634,679 82,450,505

Results from operating activities 6,961,343 11,186,832

Profit before taxation 3,757,390 8,749,101

Profit for the year 3,347,463 7,125,788

Total comprehensive income for the year 2,598,854 8,189,312

4 Dividend

The Directors have pleasure in presenting their report on the affairs of Seven‐Up Bottling Company PLC

(“the Company”) together with the Company’s audited financial statements for the year ended 31 March

2016.

The Company was incorporated as a private limited liability company on 25th June, 1959 under the

name Seven‐Up Limited. On 16th May, 1960, the name was changed to Seven‐Up Bottling Company

Limited and in 1978 it became a public company. The name “Seven‐Up Bottling Company PLC” was

adopted on 26th November, 1991 in compliance with the provisions of the Companies and Allied

Matters Act 1990. Currently, the Company’s shares are quoted on the floor of the Nigerian Stock

Exchange.

The Company continued to be engaged in the bottling and marketing of a wide range of soft drinks

and Aquafina table water.

The directors recommend to members the payment of a dividend of N1,024,944,581 (2015:

N1,761,623,498) representing N1.60 per share (2015: N 2.75 per share), on the issued share capital of

640,590,363 ordinary shares of 50 kobo each (2015: 640,590,363 ordinary shares of 50 kobo each). If

the recommended dividend of N1.60 is approved by the shareholders, it will be paid subject to

deduction of withholding tax at the appropriate tax rate.

3


31 March 2016

5 Board of Directors

6 Directors and their Interests

(a)

Name 2016 2015

Otunba (Dr.) A. Ojora O.F.R, C.O.N 2,252,635 2,252,635

Chief Emmanuel N. Nwokoro 672,643 1,144,843

Alhaji Ahmadu Yaro Retired with effect from 22 September 2015 83,522 83,522

Mr. Femi Mokikan 33,116 33,116

Mallam Mohammed Hayatu‐Deen O.O.N ‐ ‐

Chief Farid El‐Khalil ** ‐ ‐

Mr. Sunil Sawhney * ‐ ‐

Mr. Ziad A. El‐Khalil ** ‐ ‐

Mr. Faysal El‐Khalil ** ‐ ‐

Mr. Georges Kolakez ** ‐ ‐

* Indian

** Lebanese

(b)

(c)

The Directors who served during the year and their interests in the issued and paid up share capital

of the Company as recorded in the Register of Members for the purpose of section 275 of the

Companies and Allied Matters Act, CAP C20 LFN, 2004 were as follows:

The names of the Directors who held office during the year under review are as listed in Note 6(a) of

this report. Subsequent to the last Annual General Meeting (AGM), Alhaji Ahmadu Yaro resigned as

Director of the Company with effect from 22nd September, 2015.

In accordance with Article 90 of the Company’s Articles of Association, Mr. Georges Kolakez, Otunba

(Dr.) Adekunle Ojora and Mallam Mohammed Hayatu‐deen are the Directors retiring by rotation at

this AGM and being eligible, they offer themselves for re‐election. Pursuant to section 258(2) of the

Companies and Allied Matters Act, CAP C20 LFN 2004, a record of the Directors’ attendances at board

meetings during the year under consideration will be made available for inspection by any member.

None of the Directors has notified the Company of any declarable interest in any contract or

proposed contract to which the Company was a party to during the year ended 31 March 2016 for

the purpose of section 277 of the Companies and Allied Matters Act, Cap C20, Laws of the

Federation of Nigeria, 2004.

No share options were granted to the directors by Seven Up Bottling Company PLC.

Shareholdings

4


31 March 2016

7 Analysis of ShareholdingsNumber of Number of

Shareholding Between shareholders % shares %

1 ‐ 1,000 19,302 59.9 9,220,166 1.4

1,001 ‐ 5,000 10,438 32.3 21,492,715 3.4

5,001 ‐ 10,000 1,407 4.3 9,965,030 1.6

10,001 ‐ 50,000 830 2.6 16,226,412 2.5

50,001 ‐ 100,000 106 0.3 7,399,014 1.2

100,001 ‐ 500,000 117 0.4 25,514,163 4.0

500,001 ‐ 1,000,000 14 0.1 9,872,334 1.5

1,000,001 and above 19 0.1 540,900,529 84.4

32,233 100 640,590,363 100

8 Substantial Shareholders

9 Donations

2016 2015


Lagos State Security Trust Fund 2,000 ‐

AFBTE Secretariat 3,000 ‐

Orphanage and Old People's Home ‐ 400

Community free eye surgery ‐ 300

Nigeria centenary flag project ‐ 500

GCE Forms for 20 Abete Community Children 297 300

Co‐sponsor Financial Reporting Council of Nigeria 1,000 1,000

CIPMN House project ‐ 2,000

Education endowment fund ‐ 3,800

2016 Nigeria Stock Market (Pearl Awards) 125 ‐

Anthony Akpati Annual tribute 282 ‐

Lady of the Rosary church 600 ‐

Others ‐ 525

7,304 8,825

As contained in the Register of Members, AFFELKA S.A. held 469,047,789 ordinary shares of 50k each

in the capital of the Company representing 73.22% of the issued capital as at 31st March, 2016. No

other shareholder held 5% or more of the share capital of the Company as at that date.

In the year under review, the Company made donations to charitable institutions, bodies and

individuals amounting to N7,304,000 (2015: N8,825,000). The beneficiaries were as follows:

5


31 March 2016

10 Local Sourcing of Raw Materials

11 Suppliers

12 Product Distribution

13 Acquisition of Own Shares

The Company did not acquire any of its own shares during the year under review (2015: Nil).

14 Property, plant and equipment

15 Events after the reporting date

16 Employment and Employees

(a) Employment of physically challenged persons:

(b) Health and Safety at Work and Welfare of Employees:

In compliance with section 38(2) of the Companies and Allied Matters Act, Cap.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 political purpose during the year.

On a continuing basis, the Company explores the use of local raw materials in its production processes

and has successfully introduced the use of locally produced items such as sugar, crown corks and

chemicals in a number of its products.

The Company procures all of its raw materials on a commercial basis from overseas and local

suppliers.

The Company distributes its products directly via depots it maintains nation‐wide and motivates key

dealers to expand the existing distribution network by establishing mini depots.

Information relating to changes in property, plant and equipment is given in Note 12 to the financial

statements.

There were no events after the reporting date which could have had a material effect on the financial

position of the Company as at 31 March 2016 and its operating results for the year ended which have

not been adequately provided for in these financial statements.

The Company continues to maintain its policy of non‐discrimination on recruitment and selection

when considering applications for employment, including those received from physically

challenged persons. In the event of any employee becoming disabled in the line of duty through

industrial accident, the Company ensures continuity of employment by arranging suitable training

for such employees who are subsequently redeployed to jobs compatible with their capability.

Presently, the Company has seventeen (2015: seventeen) physically challenged persons on its

payroll.

The Company gives priority attention to health, safety and welfare of its employees, and ensures

that its Smoke Area Policy is observed in all its facilities. The health and ailment status of its

workforce are regularly monitored.

The Company’s premises are certified by the Fire Service for emergency preparedness with fire

fighting equipment strategically located within the premises. Fire drills are organised occasionally

to sensitize the employees on the dangers of fire accident in order to prepare them against any

eventuality.

6


31 March 2016

(c) Employee Involvement and Training:

17 Corporate Governance

Name of Directors

No. of

meetings

held

No. of

meetings

attended

Mr. Faysal El‐Khalil, O.O.N 4 4

Mr. Sunil Sawhney 4 4

Chief Farid EL‐Khalil 4 1

Otunba (Dr.) A. Ojora, O.F.R, C.O.N 4 4

Alhaji Ahmadu Yaro (Retired effective 22 September 2015) 4 ‐

Chief Emmanuel N. Nwokoro 4 3

Mallam Mohammed Hayatu‐deen, O.O.N 4 2

Mr. Ziad A. EL‐Khalil 4 3

Mr. Femi Mokikan 4 3

Mr. Georges Kolakez 4 3

The meetings were held on 23rd June 2015, 22nd September 2015, 26th November 2015 and 24th

February 2016.

The Company is committed to providing employees information regarding issues that affect the

Company’s performance and plans as well as seeking their views, where practicable, on matters

that affect their interests. Towards this end, management holds meetings with employees,

through their representatives, at formal and informal sessions while circulars are published

regularly to brief them about significant corporate issues.

To improve the efficiency and productivity level, employees undergo on‐the‐job training in addition

to being reimbursed all expenses incurred in acquiring professional qualifications.

The Board comprises eight Non‐Executive Directors including the chairman and one Executive Director.

In line with global best practice in corporate governance, the positions of the Chairman and Chief

Executive Officer are separate with two Directors acting in both capacities.

The Board has overall responsibility for supervising the Company’s business, maintaining adequate and

effective internal control system, adding value to shareholders and protecting the interests of other

stakeholders.

The Board of Directors met four (4) times during the financial year ended 31 March 2016 and a record

of their attendance is as shown below;

The Company subsidizes housing, transportation and meals and provides free health care services

to employees and their nuclear families. Additionally, it operates a contributory Pension Scheme

and provides a comprehensive National Health Insurance Plan for its employees.

7


31 March 2016

Corporate Governance/Remuneration Committee

Name of Directors

No. of

meetings

held

No. of

meetings

attended

Otunba (Dr.) A. Ojora, O.F.R, C.O.N Chairman 1 1

Mr. Faysal El‐Khalil, O.O.N 1 1

Mr. Femi Mokikan 1 1

Mallam M. Hayatu‐deen 1 1

Risk Management Committee

No. of

meetings

held

No. of

meetings

attended

Mr. Sunil Sawhney Chairman 1 1

Chief Farid EL‐Khalil 1 1

Mr. Georges Kolakez 1 1

Mr. Ziad El‐Khalil 1 1

Mr. Ali Jafri* 1 1

Management Committee

The Corporate Governance/Remuneration committee was set up by the Board on 26th November,

2015. It comprises four Non‐Executive Directors with Otunba (Dr.) Adekunle Ojora as chairman. Its

responsibilities include ensuring the company’s compliance with good governance practice,

nominating for board’s approval candidates to fill vacancies, considering and making

recommendations on succession planning of the company for the positions of chairman, managing

director, executive director, and other senior executives. Additionally, it ensures that an appropriate

remuneration policy for all directors and staff is in place and oversees major changes in employees

benefits structure.

The committee held its inaugural meeting on 24th February, 2016 during the year under consideration

with all members present.

The Risk Management Committee was established on 26 November 2015 and consists of three non‐

executive directors, one executive director and the Chief Financial Officer. It is chaired by Mr. Sunil

Sawhney and advises the board on, among other things, the Company’s appetite for risk and its risk

management policy, oversight function regarding management’s process for the identification of

significant risk across the company and the adequacy of prevention, detection and reporting

mechanisms, and the review of the adequacy and effectiveness of risk management and controls.

The committee met on 24 February 2016 during the year ended 31 March 2016 with all members

present.

* As Chief Financial Officer of the company, he attends Risk Management Committee meeting as a

sitting member.

The Management Committee is made up of three members: Messrs. Sunil Sawhney, Ziad El‐Khalil, and

Femi Mokikan, and has responsibility for recommending strategic initiatives to the Board of Directors

and supervising the implementation of board policies.

The committee which is chaired by Mr. Sunil Sawhney (Managing Director/Chief Executive Officer) met

28 times during the year under review and the members attendance record is as shown below:

8


31 March 2016

No. of

meetings

held

No. of

meetings

attended

Mr. Sunil Sawhney 28 28

Mr. Ziad A.EL‐Khalil 28 28

Mr. Femi Mokikan* 28 11

Securities Trading Policy

18 Audit Committee

No. of

meetings

held

No. of

meetings

attendedShareholders’ Representative 3 3

Mr Obarinde I. Obatosho Shareholders’ '' 3 3

Mr Kenneth N. Nwosu Shareholders’ '' 3 3

Mr Femi Mokikan Directors’ '' 3 2

Otunba (Dr.) A. Ojora, C.O.N, O.F.R Directors’ '' 3 2

Mr. Georges Kolakez Directors’ '' 3 3

The Company has securities trading policy applicable and circulated to directors, insiders, external

advisers and all employees that may at any time possess any inside or material information about our

company.

The Company has adopted a code of conduct regarding securities transaction by the directors on

terms no less exacting than the required standard set out in the Listing Rules of the Nigerian Stock

Exchange.

The Company made specific enquiry of all directors whether they have complied with the required

standard set out in the listing rules and the Company’s code of conduct regarding securities

transactions by directors and the Company is unaware of any non‐compliance.

Pursuant to section 359(3) of the Companies and Allied Matters Act, CAP C20 LFN 2004, the Company

has an Audit Committee in place whose functions are as stated in section 359(6) of the Act. The

Committee consists of three (3) Directors and three (3) shareholders’ representatives, including the

chairman. The Committee members met three times in the year under review and their attendance

record is as shown below:

Evang. Peter Akinola Soares‐ Chairman

The meetings were held on 19th June 2015, 14th December 2015 and 18th February 2016.

*As at 1 July 2015, Mr. Femi Mokikan ceased to be a member of the Management Committee.

9


31 March 2016

Statement of profit or loss and other comprehensive incomeFor the year ended 31 March


Note 2016 2015

Revenue 5 85,634,679 82,450,505

Cost of sales 6(a) (60,622,243) (51,972,978)

Gross profit 25,012,436 30,477,527

Other income 6(b) 317,434 81,603

Selling and distribution expenses 6(a) (11,801,831) (12,909,907)

Administrative expenses 6(a) (6,566,696) (6,462,391)

Results from operating activities 6,961,343 11,186,832

Finance income 7(a) 41,571 22,151

Finance costs 7(b) (3,245,524) (2,459,882)

Net finance costs (3,203,953) (2,437,731)

Profit before taxation 8 3,757,390 8,749,101

Income tax expense 10(a) (409,927) (1,623,313)


Other comprehensive income

Items that will never be reclassified to profit or loss:

Remeasurement of defined benefit (liability) / asset 22(a) (1,069,442) 1,519,320

Related tax 16(b) 320,833 (455,796)

Other comprehensive income for the year, net of tax (748,609) 1,063,524

Total comprehensive income for the year 2,598,854 8,189,312

Equity holders of the Company 3,347,463 7,125,788

Equity holders of the Company 2,598,854 8,189,312

Earnings per share

Basic earnings per share (kobo) 11(a) 523 1,112

Total comprehensive income for the year is attributable

to:

Profit for the year is attributable to:

The accompanying notes and significant accounting policies on pages 18 to 59 form an integral part of

these financial statements.

15


31 March 2016

Statement of changes in equityFor the year ended 31 March

In thousands of naira Note Share capital Share premium Retained earnings Total equity

Balance, 1 April 2014 320,295 299,140 16,709,260 17,328,695

Total comprehensive income

Profit for the year ‐ ‐ 7,125,788 7,125,788 Other Comprehensive income ‐ ‐ 1,063,524 1,063,524 Total comprehensive income ‐ ‐ 8,189,312 8,189,312

Transactions with owners of the Company

Contribution and distribution

Dividend to equity holders 11(b) ‐ ‐ (1,601,476) (1,601,476)Unclaimed dividend written back 23(b) ‐ ‐ 17,102 17,102 Total transactions with owners of the Company ‐ ‐ (1,584,374) (1,584,374)

Balance, 31 March 2015 320,295 299,140 23,314,198 23,933,633

Balance, 1 April 2015 320,295 299,140 23,314,198 23,933,633 Total comprehensive income Profit for the year ‐ ‐ 3,347,463 3,347,463 Other comprehensive income ‐ ‐ (748,609) (748,609)

Total comprehensive income ‐ ‐ 2,598,854 2,598,854

Transactions with owners of the Company

Contribution and distribution

Dividend to equity holders 11(b) ‐ ‐ (1,761,623) (1,761,623)

Unclaimed dividend written back 23(b) ‐ ‐ 8,730 8,730 Total transactions with owners of the Company ‐ ‐ (1,752,893) (1,752,893)

Balance, 31 March 2016 320,295 299,140 24,160,159 24,779,594

The accompanying notes and significant accounting policies on pages 18 to 59 form an integral part of these financial statements.

16


31 March 2016

Statement of cash flowsFor the year ended 31 March


Note 2016 2015

Cash flows from operating activities


Adjustments for:

Depreciation of property plant and equipment 12(a) 9,325,971 8,520,745

Amortization of intangible assets 13 35,237 28,139

Finance income 7(a) (41,571) (22,151)

Finance costs 7(c) 3,245,524 1,961,624

Employee benefit charge 22(c) 1,142,434 638,052

Loss/(gain) on sale of property, plant and equipment 4,109 (39,927)

Income tax expense 10(a) 409,927 1,623,313

17,469,094 19,835,583

Change in inventories (1,926,393) (108,100)

Change in trade and other receivables (1,159,433) (1,658,284)

Change in prepayments 177,142 46,049

Change in deposit for imports 4,957,800 (5,874,980)

Change in trade and other payables (excluding dividend payable)* 1,577,023 3,297,326

Cash generated from operating activities 21,095,233 15,537,594

Value Added Tax (VAT) paid * (1,812,611) (2,210,619)

Income tax paid 10(c) (974,853) (1,485,992)

Employee benefit paid (1,323,426) (209,760)

Net cash from operating activities 16,984,343 11,631,223

Cash flow from investing activities

Finance income received 7(a) 31,455 22,151

Proceeds from sale of property, plant and equipment 93,396 83,007

Acquisition of property, plant and equipment 12(e) (7,321,118) (14,833,700)

Acquisition of Intangible assets 13 (62,908) (7,876)

Net cash used in investing activities (7,259,175) (14,736,418)

Cash flow from financing activities

Proceeds from loans and borrowings 21(a)(ii) 70,326,373 8,778,758

Repayment of loans and borrowings 21(a)(ii) (67,812,771) (7,954,316)

Interest paid 7(c) (3,015,927) (1,786,572)

Dividend paid 23(c) (1,643,748) (1,513,088)

Net cash used in financing activities (2,146,073) (2,475,218)

Net increase in cash and cash equivalents 7,579,095 (5,580,413)

Cash and cash equivalents at the beginning of the year (2,798,981) 2,753,963

Effect of exchange rate fluctuations on cash held 156 27,469

Cash and cash equivalents at the end of the year 19 4,780,270 (2,798,981)

The accompanying notes and significant accounting policies on pages 18 to 59 form an integral part of these

financial statements.

*Change in trade and other payables has been adjusted for the effect of Value Added Tax (VAT) paid shown

separately on the statement of cash flows as well as the portion of property plant and equipment unpaid as at year

end.

17


31 March 2016

Notes to the financial statementsFor the year ended 31 March 2016

Page Page

1 Reporting entity 19 16 Deferred taxation 40

2 Basis of preparation 19 17 Inventories 41

3 Significant accounting policies 20 18 Trade and other receivables 41

4 Determination of fair values 31 19 Cash and cash equivalents 41

5 Revenue 32 20 Capital and reserves 42

6 Analysis of expenses and other income 32 21 Loans and borrowings 42

7 Finance income and finance cost 33 22 Employee benefits 44

8 Profit before taxation 33 23 Trade and other payables 47

9 Personnel expenses 3424 Financial risk management and

financial instruments 48

10 Taxation 36 25 Capital management 55

11 Earnings and declared dividend per share 37 26 Operating leases 56

12 Property, plant and equipment 38 27 Changes in presentation 56

13 Intangible assets 39 28 Contingencies 56

14 Prepayments and other receivables 40 29 Related parties 57

15 Deposit for import 40 30 Subsequent events 59

18


31 March 2016

Notes to the financial statementsFor the year ended 31 March 2016

1 Reporting Entity

2 Basis of Preparation

(a) Statement of compliance

(b) Basis of measurement

(c) Functional and presentation currency

(d) Use of estimates and judgment

Note 22 Measurement of defined benefit obligation: key actuarial assumption

Note 28Contingencies: key assumptions about the likelihood and magnitude of an

outflow of resources

Seven‐Up Bottling Company PLC (“the Company”) is a company domiciled in Nigeria. The Company was

incorporated in Nigeria as a private Limited liability Company on 25th June, 1959 under the name Seven‐

Up Limited. On 16th May 1960, the name was changed to Seven‐Up Bottling Company Limited and

thereafter to “Seven‐Up Bottling Company PLC” on 26th November 1991 in compliance with the

provisions of the Companies and Allied matters Act 1990. Currently, the Company’s shares are quoted

on the floor of the Nigerian Stock Exchange. The majority shareholder of the Company is Afelka S.A,

having 73.22% interest in the equity of Seven‐Up Bottling Company PLC. The address of the Company’s

registered office is 247, Moshood Abiola Way, Ijora, Lagos.

The Company is primarily involved in the business of bottling and marketing of a wide range of soft

drinks and Aquafina premium table water across Nigeria.

The financial statements have been prepared in accordance with the International Financial

Reporting Standards (IFRS) and in the manner required by the Companies and Allied Matters Act of

Nigeria and the Financial Reporting Council of Nigeria Act, 2011. These financial statements were

authorized for issue by the Company's Board of Directors on 22nd June 2016.

The financial statements have been prepared under the historical cost basis and the use of actuarial

methods for estimating certain employee benefits which are based on the present value of

anticipated future liabilities.

These financial statements are presented in Naira, which is the Company’s functional currency. All

amounts have been rounded to the nearest thousand unless otherwise indicated.

The preparation of the financial statements in conformity with IFRSs requires management to make

judgments, estimates and assumptions that affect the application of accounting policies and the

reported amounts of assets, liabilities, income and expenses. Actual results may differ from these

estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognized in the period in which the estimates are revised and in any future periods

affected.

Information about assumptions and estimation uncertainties that have a significant risk of resulting

in a material adjustment within the next financial year are included in the following notes:

19


31 March 2016

(i) Measurement of fair values

3 Significant accounting policies

(a) Foreign currency

Foreign currency transactions

(b) Financial instruments

I. Non‐derivative financial assets‐recognition and measurement

The accounting policies set out below have been applied consistently to all years presented in these

financial statements.

Non‐monetary items that are measured in terms of historical cost in a foreign currency are

translated using the exchange rate at the date of the transaction.

Transactions denominated in foreign currencies are translated and recorded in Naira at the

exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in

foreign currencies are translated to the functional currency at the exchange rate at the reporting

date. The foreign currency gain or loss on monetary items is the difference between amortized cost

in the functional currency at the beginning of the period, adjusted for effective interest and

payments during the period, and the amortized cost in foreign currency translated at the exchange

rate at the end of the year.

Foreign currency differences arising on translation are recognized in profit or loss.

The Company initially recognizes loans and receivables and deposits on the date that they are

originated. All other financial assets are recognized initially on the trade date at which the

Company becomes a party to the contractual provisions of the instrument.

The Company derecognizes a financial asset when the contractual rights to the cash flows from

the asset expire, or it transfers the rights to receive the contractual cash flows on the financial

asset in a transaction in which substantially all the risks and rewards of ownership of the

financial asset are transferred. Any interest in transferred financial assets that is created or

retained by the Company is recognized as a separate asset or liability.

A number of the Company’s accounting policies and disclosures require the measurement of fair

values, for both financial and non‐financial assets and liabilities.

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

• 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).

• Level 3: inputs for the asset or liability that are not based on observable market data

(unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the

fair value hierarchy, then the fair value measurement is categorised in its entirety in the same

level of the fair value hierarchy as the lowest level input that is significant to the entire

measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the

reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the

following notes:

• Note 24 ‐ Financial risk management and financial instruments

20


31 March 2016

Loans and receivables

Cash and cash equivalents

II. Non‐derivative financial liabilities‐recognition and measurement

III. Share capital

(c) Property, plant and equipment

I. Recognition and measurement

Loans and receivables are financial assets with fixed or determinable payments that are not

quoted in an active market. Such assets are recognized initially at fair value plus any directly

attributable transaction costs. Subsequent to initial recognition, loans and receivables are

measured at amortized cost using the effective interest method, less any impairment losses. An

impairment loss is recognized if the carrying amount exceeds the estimated recoverable

amount. Loans and receivables comprise trade and other receivables.

Cash and cash equivalents comprise cash on hand, cash balances with banks and call deposits

with original maturities of three months or less. Bank overdrafts that are repayable on demand

and form an integral part of the Company’s cash management are included as a component of

cash and cash equivalents for the purpose of the statement of cash flows.

The Company’s non‐derivative financial assets are classified as loans and receivables and cash

and cash equivalents.

All financial liabilities are recognized initially on the trade date at which the Company becomes a

party to the contractual provisions of the instrument.

The Company derecognizes a financial liability when its contractual obligations are discharged or

cancelled or expire.

Items of property, plant and equipment are measured at cost less accumulated depreciation and

any accumulated impairment losses and residual value.

The Company has the following non‐derivative financial liabilities: loans and borrowings, bank

overdrafts, trade and other payables. Such financial liabilities are recognized initially at fair value

less any directly attributable transaction costs. Subsequent to initial recognition these financial

liabilities are measured at amortized cost using the effective interest method.

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of

ordinary shares and share options are recognized as a deduction from equity, net of any tax

effects.

Financial assets and financial liabilities are offset and the net amount presented in the statement

of financial position when, and only when, the Company has a legally enforceable right to offset

the amounts and intends either to settle them on a net basis or to realise the asset and settle

the liability simultaneously.

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31 March 2016

II . Subsequent costs

III. Depreciation

Depreciation is calculated to write off the cost of items of property, plant and equipment less

their estimated residual values using a straight‐line basis over their estimated useful lives.

Depreciation is generally recognized in profit or loss, unless the amount is included in the

carrying amount of another asset. Leased assets are depreciated over the shorter of the lease

term and their useful lives unless it is reasonably certain that the Company will obtain ownership

by the end of the lease term in which case the assets are depreciated over the useful life.

The cost of replacing a part of an item of property, plant and equipment is recognized in the

carrying amount of the item if it is probable that the future economic benefits embodied within

the part will flow to the Company and its cost can be measured reliably. The carrying amount of

the replaced part is derecognized. The costs of the day‐to‐day servicing of property, plant and

equipment are recognized in profit or loss as incurred.

Items of property, plant and equipment are depreciated from the date they are available for use

or, in respect of capital‐work‐in‐progress, from the date that the asset is completed and ready

for use.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Items of

property, plant and equipment under construction are disclosed as capital work‐in‐progress.

The cost of construction recognized includes the cost of materials and direct labour, the costs of

dismantling and removing the items and restoring the site on which they are located, and

borrowing costs on qualifying assets and any other costs directly attributable to bringing the

assets to the location and condition necessary for it to be capable of operating in the manner

intended by management.

Purchased software that is integral to the functionality of the related equipment is capitalized as

part of the equipment.

When parts of an item of property, plant and equipment have different useful lives, they are

accounted for as separate items (major components) of property, plant and equipment.

The carrying amount of an item of property, plant and equipment is derecognized on disposal or

when no future economic benefits are expected from its use or disposal. The gains and losses on

disposal of an item of property, plant and equipment are determined by comparing the

proceeds from disposal with the carrying amount of property, plant and equipment, and are

recognized net within other income in profit or loss.

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31 March 2016

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

• Leasehold land

• Buildings 20 years

• Plant and machinery

‐ moulds 3 years

‐ Other plant and machinery 7 years

• Motor vehicle 5 years

• Furniture and fittings 10 years

• IT equipment 4 years

• Returnable packaging materials

‐ Bottles 5 years

‐ Crates 7 years

(d) Intangible assets

I. Software

II. Subsequent expenditure

Derecognition

III. Amortization

• Computer software 4 years

Amortization is calculated over the cost of the asset, or other amount substituted for cost, less

its residual value.

Over lease period or 99 years, whichever is

lower

Depreciation methods, useful lives and residual values are reviewed at each financial year end

and adjusted if appropriate.

Capital work‐in‐progress is not depreciated. The attributable cost of each asset is transferred to

the relevant asset category immediately the asset is available for use and depreciated

accordingly.

Purchased software with finite useful life is measured at cost less accumulated amortization and

accumulated impairment losses.

Subsequent expenditure is capitalized only when it increases the future economic benefits

embodied in the specific asset to which it relates. All other expenditure, including expenditure

on internally generated goodwill and brands, is recognized in profit or loss as incurred.

An item of intangible asset is derecognized on disposal or when no future economic benefits are

expected from its use or disposal. The gain or loss arising from the derecognition of an intangible

assets are determined by comparing the net proceeds (if any) from disposal with the carrying

amount of the intangible assets and are recognized net within other income in profit or loss.

Amortization is recognized in profit or loss on a straight‐line basis over the estimated useful lives

of intangible assets, other than goodwill, from the date that they are available for use, since this

most closely reflects the expected pattern of consumption of the future economic benefits

embodied in the asset. The estimated useful life for the current and comparative periods is as

follows:

Amortization methods, useful lives and residual values are reviewed at each financial year‐end

and adjusted if appropriate.

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31 March 2016

(e) Leases

I. Determining whether an arrangement contains a lease

● the arrangement contains a right to use the asset(s).

II. Leased assets

III. Lease payments

(f) Inventories

At inception of an arrangement, the Company determines whether such an arrangement is or

contains a lease. This will be the case if the following two criteria are met:

At inception or on reassessment of the arrangement, the Company separates payments and

other consideration required by such an arrangement into those for the lease and those for

other elements on the basis of their relative fair values. If the Company concludes for a finance

lease that it is impracticable to separate the payments reliably, then an asset and a liability are

recognised at an amount equal to the fair value of the underlying asset. Subsequently the

liability is reduced as payments are made and an imputed finance cost on the liability is

recognised using the Company’s incremental borrowing rate.

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

Assets held by the Company under leases for which the Company assumes substantially all the

risks and rewards of ownership are classified as finance leases. Upon initial recognition the

leased asset is measured at an amount 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 accounting policy applicable to that asset.

Assets held under other leases are operating leases and the leased assets are not recognized in

the Company’s statement of financial position.

Payments made under operating leases are recognized in profit or loss on a straight‐line basis

over the term of the lease. Lease incentives received are recognized as an integral part of the

total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance

expense and the reduction of the outstanding liability. The finance expense is allocated to each

period during the lease term so as to produce a constant periodic rate of interest on the

remaining balance of the liability.

Inventories are measured at the lower of cost and net realizable value. The cost of inventories

includes expenditure incurred in acquiring the inventories, production or conversion costs and other

costs incurred in bringing them to their existing location and condition. In the case of manufactured

inventories and work‐in‐progress, cost includes an appropriate share of production overheads based

on normal operating capacity. Cost incurred in bringing each product to its present location and

condition is based on:

24


31 March 2016

Engineering spares:

Goods‐in‐transit: purchase cost incurred to date

Allowance is made for obsolete, slow moving or defective items where appropriate.

(g) Impairment

I. Non‐derivative financial assets

Raw and non‐returnable packaging materials

Products‐ in‐ process and manufactured finished

goods

Engineering spares are classified as inventory and are recognized in the profit or loss as consumed.

purchase cost on a weighted average

cost basis, including transportation

and clearing costs

purchase cost on a first‐ in, first ‐ out

basis including transportation and

clearing costs

weighted average cost of direct

materials and labour plus a reasonable

proportion of manufacturing

overheads based on normal levels of

activity

Weighted average cost is reviewed periodically to ensure it consistently approximates historical

cost.

Net realizable value is the estimated selling price in the ordinary course of business, less the

estimated costs of completion and selling expenses.

A financial asset not carried at fair value through profit or loss is assessed at each reporting date

to determine whether there is objective evidence that it is impaired. A financial asset is impaired

if objective evidence indicates that a loss event has occurred after the initial recognition of the

asset, and that the loss event had a negative effect on the estimated future cash flows of that

asset that can be reliably estimated.

Objective evidence that financial assets are impaired can include; default or delinquency by a

debtor, restructuring of an amount due to the Company on terms that the Company would not

consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the

disappearance of an active market for a security. In addition, for an investment in an equity

security, a significant or prolonged decline in its fair value below its cost is objective evidence of

impairment.

The Company considers evidence of impairment for receivables at both a specific asset and

collective level. All individually significant receivables are assessed for specific impairment. All

individually significant receivables found not to be specifically impaired are then collectively

assessed for any impairment that has been incurred but not yet identified. Receivables that are

not individually significant are collectively assessed for impairment by grouping together

receivables with similar risk characteristics.

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31 March 2016

II. Non‐financial assets

The recoverable amount of an asset or cash‐generating unit is the greater of its value in use and

its fair value less costs to sell. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre‐tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset. For the purpose of

impairment testing, assets that cannot be tested individually are grouped together into the

smallest group of assets that generates cash inflows from continuing use that are largely

independent of the cash inflows of other assets or groups of assets (the “cash‐generating unit, or

CGU”).

The Company’s corporate assets do not generate separate cash inflows. If there is an indication

that a corporate asset may be impaired, then the recoverable amount is determined for the CGU

to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its

estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment

losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any

goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in

the unit (group of units) on a pro rata basis.

In respect of other assets (excluding goodwill for which impairment loss is not reversed),

impairment losses recognized in prior periods are assessed at each reporting date for any

indications that the loss has decreased or no longer exists. An impairment loss is reversed if

there has been a change in the estimates used to determine the recoverable amount. An

impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed

the carrying amount that would have been determined, net of depreciation or amortization, if

no impairment loss had been recognized.

In assessing collective impairment, the Company uses historical trends of the probability of

default, timing of recoveries and the amount of loss incurred, adjusted for management’s

judgment as to whether current economic and credit conditions are such that the actual losses

are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the

difference between its carrying amount and the present value of the estimated future cash flows

discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss

and recognized in an allowance account against receivables. Interest on the impaired asset

continues to be recognized through the unwinding of the discount. When a subsequent event

causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed

through profit or loss. An impairment loss is reversed only to the extent that the asset’s carrying

amount does not exceed the carrying amount that would have been determined, if no

impairment loss had been recognized.

The carrying amounts of the Company’s non‐financial assets, other than inventories are

reviewed at each reporting date to determine whether there is any indication of impairment. If

any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and

intangible assets that have indefinite useful lives or that are not yet available for use, the

recoverable amount is estimated each year at the same time.

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31 March 2016

(h) Employee benefits

I. Defined contribution plans

II. Defined benefit plans

III. Other long term employee benefits

The discount rate is the yield at the reporting date on Federal Government of Nigeria issued

bonds that have maturity dates approximating the term of the Company’s obligation. The

calculation is performed using the Projected Unit Credit method. Any remeasurements are

recognized in the profit or loss.

The Company’s other long‐term employee benefits represent Long Service Awards scheme

instituted for all permanent employees. The Company’s obligation in respect of the Long Service

Awards scheme is the amount of future benefits that employees have earned in return for their

service in the current and prior periods. The benefit is discounted to determine its present value.

A defined contribution plan is a post‐employment benefit plan under which an entity pays fixed

contributions into a separate entity and has no legal or constructive obligation to pay further

amounts in respect of all employee benefits relating to employee service in current and prior

periods.

In line with the provisions of the Pension Reform Act 2014, the Company has instituted a defined

contribution pension scheme for their permanent staff. Staff contributions to the scheme are

funded through payroll deductions. Obligations for contributions to the defined contribution

plan are recognized as employee benefit expense in profit or loss in the periods which related

services are rendered by employees. The Company and its employees each contribute 10% and

8% respectively of the employees' basic salaries, transport & housing allowances to the fund on

a monthly basis.

A defined benefit plan is a post‐employment benefit plan other than a defined contribution plan.

The Company’s net obligation in respect of defined benefit gratuity scheme is calculated by

estimating the amount of future benefit that employees have earned in return for their service

in the current and prior years and that benefit is discounted to determine its present value. In

determining the liability for employee benefits under the defined benefit scheme, consideration

is given to future increases in salary rates and the Company's experience with staff turnover.

The Company's liability with respect to this scheme is determined by an independent actuarial

valuation every year using the projected unit credit method. Remeasurements arising from

differences between the actual and expected outcome in the valuation of the obligation are

recognized in other comprehensive income. The effect of any curtailment is also recognized in

full in profit or loss immediately when the curtailment occurs. The discount rate is the yield on

Federal Government of Nigeria issued bonds that have maturity dates approximating the terms

of the company’s obligation. Although the scheme is not funded, the Company ensures that

adequate arrangements are in place to meet its obligations under the scheme.

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31 March 2016

IV. Termination benefits

V. Short‐term employee benefits

(i) Provisions

(j) Contingent liabilities

(k) Revenue

Revenue is recognized when persuasive evidence exists that the significant risks and rewards of

ownership have been transferred to the buyer, recovery of the consideration is probable and there

is no continuing management involvement with the goods, and the amount of revenue can be

measured reliably. If it is probable that discount will be granted and the amount can be measured

reliably, then the discount is recognized as a reduction of revenue as the sales are recognized.

Termination benefits are recognized as an expense when the Company is committed

demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either

terminate employment before the normal retirement date, or to provide termination benefits as

a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary

redundancies are recognized as an expense if the Company has made an offer of voluntary

redundancy, it is probable that the offer will be accepted, and the number of acceptances can be

estimated reliably. If benefits are payable more than 12 months after the reporting period, then

they are discounted to their present value.

Short‐term employee benefit obligations are measured on an undiscounted basis and are

expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under short‐term cash bonus or

profit sharing plans if the Company has a present legal or constructive obligation to pay this

amount as a result of past service provided by the employee, and the obligation can be

estimated reliably.

A provision is recognized if, as a result of a past event, the Company has a present legal or

constructive obligation that can be estimated reliably, and it is probable that an outflow of economic

benefits will be required to settle the obligation. Provisions are determined by discounting the

expected future cash flows at a pre‐tax rate that reflects current market assessments of the time

value of money and the risks specific to the liability. The unwinding of the discount is recognized as

finance cost.

A contingent liability is a possible obligation that arises from past events and whose existence will be

confirmed only by the occurrence or non‐occurrence of one or more uncertain future events not

wholly within the control of the Company, or a present obligation that arises from past events but is

not recognized because it is not probable that an outflow of resources embodying economic

benefits will be required to settle the obligation; or the amount of the obligation cannot be

measured with sufficient reliability.

Contingent liabilities are only disclosed and not recognized as liabilities in the statement of financial

position. If the likelihood of an outflow of resources is remote, the possible obligation is neither a

provision 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 of

the consideration received or receivable, net of value added tax, sales returns, trade discounts and

volume rebates.

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31 March 2016

(l) Finance income and finance costs

(m) Income tax

I. Current tax

II. Deferred tax

Deferred tax are recognized in profit or loss except to the extent that it relates to a business

combination, or items recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year,

using tax rates statutorily enacted at the reporting date, and any adjustment to tax payable in

respect of previous years. The Company is subject to the following types of current income tax;

• Company Income Tax‐ This relates to tax on revenue and profit generated by the Company

during the year, to be taxed under the Companies Income Tax Act Cap C21, LFN 2004 as

amended to date.

• Tertiary Education Tax‐ This is based on the assessable income of the Company and is

governed by the Tertiary Education Trust Fund (Establishment) Act LFN 2011

Deferred tax is recognized in respect of temporary differences between the carrying amounts of

assets and liabilities for financial reporting purposes and the amounts used for taxation

purposes. Deferred tax is not recognized for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is

not a business combination and that affects neither accounting nor taxable profit or loss;

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible

temporary differences to the extent that it is probable that future taxable profits will be

available against which they can be used. Deferred tax assets are reviewed at each reporting

date and are reduced to the extent that it is no longer probable that the related tax benefit will

be realised. Such reductions are reversed when the probability of future taxable profits impairs.

Deferred tax is measured at the tax rates that are expected to be applied to temporary

differences when they reverse, using tax rates enacted or substantively enacted at the reporting

date.

Finance income comprises interest income on funds invested. Interest income is recognized as it

accrues in profit or loss, using the effective interest method.

Finance costs comprise interest expense on borrowings and impairment losses recognized on

financial assets (other than trade receivables).

Borrowing cost that are not directly attributable to the acquisition, construction or production of a

qualifying asset are recognized in profit or loss.

Transfer of significant risk and rewards of ownership is determined to be transferred to the buyer at

the point of delivery to the buyer.

Foreign currency gains and losses are recognised in profit or loss and presented on a net basis as

either finance income or finance cost.

Deferred tax assets and liabilities are offset only if certain criteria are met.

Income tax expense represents the sum of current tax expense and deferred tax expense.

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31 March 2016

(n) Earnings per share

(o) Dividends

Dividends are recognized as a liability in the period they are declared.

(p) Related parties

(q) Segment reporting

(r) Standards and interpretations not yet adopted

The Securities and Exchange Commission (SEC) published a circular in 2015 directing Capital Market

Registrars to return all unclaimed dividend which has been in their custody for fifteen (15) months

and above to the paying companies. These unclaimed dividends are included as a liability to the

shareholders until they become statute barred in accordance with the provisions of Section 385 of

CAMA.

All of the Company’s products have similar risks and returns thus management does not use

operating segments’ operating results to make decisions about resources to be allocated to the

segment and assess its performance.

A number of new standards, amendments to standards and interpretations are effective for annual

periods beginning after 1st April 2015, and have not been applied in preparing these financial

statements. Those which may be relevant to the Company are set out below. The extent of the

impact of these standards is yet to be determined. The Company does not plan to adopt these

standards early. These will be adopted in the period that they become mandatory unless otherwise

indicated

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic

EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company

by the weighted 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 the weighted average number of ordinary shares outstanding, adjusted for own

shares held, for the effects of all dilutive potential ordinary shares.

Dividends which remained unclaimed for a period exceeding twelve (12) years from the date of

declaration and which are no longer actionable by shareholders in accordance with Section 385 of

Companies and Allied Matters Act of Nigeria are written back to retained earnings.

Related parties include the holding company and other group entities. Directors, their close family

members and any employee who is able to exert a significant influence on the operating policies of

the Company are also considered to be related parties. Key management personnel are also

regarded as related parties. Key management personnel are those persons having authority and

responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,

including any director (whether executive or otherwise) of that entity.

An operating segment is a distinguishable component of the Company that earns revenue and incurs

expenditure from providing related products or services (business segment), or providing products

or services within a particular economic environment (geographical segment), and which is subject

to risks and returns that are different from those of other segments.

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31 March 2016

(i) IFRS 15 Revenue from contract with customers ‐ 1 January 2017

(ii) IFRS 9 Financial Instruments ‐ 1 January 2018

4 Determination of fair values

(a) Trade and other receivables

(b) Non‐derivative financial liabilities

A number of the Company’s accounting policies and disclosures require the measurement of fair value,

for both financial and non‐financial assets and liabilities. Fair values have been determined for

measurement and/or disclosure purposes based on the methods indicated below.

On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, which replaces

earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial

Instruments: Recognition and Measurement. Even though the measurement categories are

similar to IAS 39, the criteria for classification into these categories are significantly different. In

addition, the IFRS 9 impairment model has been changed from an “incurred loss” model from

IAS 39 to an “expected credit loss” model, which is expected to increase the provision for bad

debts recognised in the Company.

IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early adoption

permitted. The adoption of these standards is expected to have an impact on the Company's

financial assets and liabilities.

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 Transactions Involving Advertising

Services.

The standard contains a single model that applies to contracts with customers and two

approaches to recognising revenue: at a point in time or over time. The model features a

contract‐based five‐step analysis of transactions to determine whether, how much and when

revenue is recognised.

This new standard will most likely have a significant impact on the Company, which will include a

possible change in the timing of when revenue is recognised and the amount of revenue

recognised.

The Company is yet to carry‐out an assessment to determine the impact that the initial

application of IFRS 15 could have on its business; however, the Group (or Company) will adopt

the standard for the year ending 31 December 2018.

Fair value, which is determined for disclosure purposes, is calculated based on the present value of

future principal and interest cash flows, discounted at the market rate of interest at the reporting

date.

When applicable, further information about the assumptions made in determining 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 measurement date. Fair value for short‐term

receivables with no stated interest rate are measured at the original invoice amount if the effect of

discounting is immaterial. Fair value is determined at initial recognition and for disclosure purposes,

at each annual reporting date.

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31 March 2016

5 Revenue

Revenue for the year comprises:

In thousands of naira 2016 2015

Sale of goods:

Local 85,616,691 82,372,767

Export 17,988 77,738

Total Revenue 85,634,679 82,450,505

6 Analysis of expenses and other income

(a) Analysis of expenses by nature


Raw materials and consumables 48,058,473 40,842,546

Advertising and sales promotion 3,352,822 3,160,391

Depreciation (Note 12(a)) 9,325,971 8,520,745

Auditors' remuneration 39,000 38,000

Professional fees (i) 89,924 47,236

Amortization (Note 13) 35,237 28,139

Payroll expenses (Note 9) 10,872,213 10,331,234

Transportation 2,360,438 2,482,369

Repairs and maintenance 4,350,490 5,114,816

Management fees ‐ 262,473

Lease and rentals 506,202 517,327

78,990,770 71,345,276

Total cost of sales, selling & distribution and administrative expenses is made up of:


Cost of sales 60,622,243 51,972,978

Selling and distribution expenses 11,801,831 12,909,907

Administrative expenses 6,566,696 6,462,391

78,990,770 71,345,276

(i)

(b) Other income represents income from the sale of scrap.

Tax and advisory services amounting to N25 million (2015:N23 million) were provided by

KPMG Professional Services. The balance of professional fees amounting to N70 million

(2015: N29 million) represent expenses for professional services provided by companies and

firms other than the external audit firm.

Total cost of sales, selling & distribution and administrative

expenses

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31 March 2016

7 Finance income and finance cost

a. Finance income comprises:


Interest income on bank deposit 31,455 22,151

Net gain on foreign exchange transactions 10,116 ‐

41,571 22,151

b. Finance costs comprises:


Interest on overdraft (429,096) (299,133)

(2,816,428) (1,662,491)

Net loss on foreign exchange transactions ‐ (498,258)

(3,245,524) (2,459,882)

Net finance cost recognized in profit or loss (3,203,953) (2,437,731)

c. Finance cost in the cash flow


Finance costs per profit or loss 3,245,524 2,459,882

Loss on foreign exchange transactions ‐ (498,258)

Finance costs per statement of cash flows 3,245,524 1,961,624

Interest accrual (229,597) (175,052)

Interest paid per statement of cash flows 3,015,927 1,786,572

d. Finance income in the cash flow


Finance income in the statement of profit or loss / cash flows (41,571) ‐

Gain on foreign exchange transactions* 10,116 ‐ Finance income received per statement of cash flows (31,455) ‐

8 Profit before taxation

Profit before taxation is stated after charging/(crediting):


Depreciation of property, plant and equipment (Note 12 (a)) 9,325,971 8,520,745

Amortization of intangible assets (Note 13) 35,237 28,139

Auditor’s remuneration 39,000 38,000

Directors’ remuneration (Note 9 (c)) 18,695 46,276

Personnel expenses (Note 9 (a)) 10,872,213 10,331,234

Loss/(gain) on sale of property, plant and equipment 4,109 (39,927)

Net (gain)/loss on foreign exchange transactions (10,116) 498,258

Operating lease cost (Note 26) 462,253 517,327

Management service fee (29(d)(vi)) ‐ 262,473

*The effect of the gain in foreign exchange transactions in the statement of cash flows has been

adjusted for in the change in trade and other payables.

Financial liabilities measured at amortized cost‐

interest expense (Note 21 (a)(ii))

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31 March 2016

9 Personnel expenses

(a) Personnel expenses for the year comprise the following:


Salaries, wages and allowances 7,878,078 7,852,641

Expenses related to defined benefit plans (Note 22(c)) 1,142,434 638,052

Expenses related to defined contribution plans (Note 23(a)) 816,838 795,356

Other personnel expenses 1,034,863 1,045,185

10,872,213 10,331,234

(b)

2016 2015

N N Number Number

550,001 ‐ 600,000 ‐ 5

600,001 ‐ 650,000 1 6

650,001 ‐ 700,000 2 20

700,001 ‐ 800,000 18 751

800,001 ‐ 1,000,000 1,144 1,084

1,000,001 ‐ 1,200,000 393 299

1,200,001 ‐ 1,400,000 153 213

1,400,001 ‐ 1,600,000 159 195

1,600,001 ‐ 1,800,000 177 273

1,800,001 ‐ 2,000,000 150 135

2,000,001 ‐ 2,500,000 208 206

2,500,001 ‐ 3,000,000 102 124

3,000,001 ‐ 3,500,000 77 84

3,500,001 ‐ 4,000,000 54 74

4,000,001 ‐ 4,500,000 32 48

4,500,001 ‐ 5,000,000 16 17

5,000,001 ‐ 7,000,000 36 40

7,000,001 and above 37 32

2,759 3,606

Employees of the Company, whose duties were wholly or mainly discharged in Nigeria, received

remuneration (excluding pension costs and certain benefits) in the following ranges:

34


31 March 2016

The number of full‐time persons employed per function as at 31 March was as follows:

2016 2015

Number Number

Manufacturing 1,169 1,669

Distribution 1,102 1,507

Finance 163 178

Human Resources/ Administration 297 218

Information Technology 28 34 2,759 3,606

(c) Directors' remuneration

Remuneration paid to directors of the Company was as follows:


Fees paid to non‐executive directors 700 700

Remuneration paid to the chairman 4,212 3,900

Remuneration paid to executive directors 13,783 41,676

18,695 46,276

The executive directors’ remuneration shown above includes:


Highest paid director 5,370 36,701

2016 2015

N N Number Number

0 ‐ 3,000,000 8 7

3,000,001 ‐ 4,500,000 ‐ 1

8 8

The number of other directors (excluding the Chairman and highest paid director) who received

emoluments excluding pension contributions and certain benefits were within the following ranges:

35


31 March 2016

10 Taxation

(a) Income tax expense


Current tax expense

Current year income tax 871,705 745,658

Tertiary education tax 156,314 233,956

Capital gains tax 5,400 ‐

1,033,419 979,614

Prior year underprovision ‐ 345,604

1,033,419 1,325,218

Deferred tax expense

Origination and reversal of temporary differences (623,492) 298,095

Total income tax expense 409,927 1,623,313

(b) Income tax recognized directly in other comprehensive income


Remeasurement of defined benefit (liability)/ asset (Note 22(a)) (1,069,442) 1,519,320

Related tax (Note 16(b)) 320,833 (455,796)Defined benefit plan actuarial (loss)/gain, net of tax (748,609) 1,063,524

(c) Movement in current tax liabilities

Movement in tax payable account during the year was as follows


Balance, beginning of the year 1,339,805 1,500,579

Payments in the year (974,853) (1,485,992)

Charge for the year 1,033,419 1,325,218

Balance, end of the year 1,398,371 1,339,805

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:

36


31 March 2016

(d)

i Can products produced at the Company's Lagos Plant

ii

(e) Reconciliation of effective tax rate

2016 2015



Taxation 409,927 1,623,313

Profit before tax 3,757,390 8,749,101

30.0% 1,127,217 30.0% 2,624,730

Impact of Tertiary education tax 4.2% 156,314 2.7% 233,956

Impact of Capital gains tax 0.1% 5,400 0% ‐

Non‐deductible expenses 2.0% 76,585 0.3% 22,354

Tax exempt income ‐1.9% (75,044) ‐4.9% (425,539)

Pioneer status incentive ‐23.4% (880,545) ‐13.5% (1,177,792)

Prior year underprovision 0% ‐ 4.0% 345,604

Tax expense 11.0% 409,927 18.6% 1,623,313

11 Earnings and declared dividend per share

(a)

(b)

Income tax using the Company’s

domestic tax rate

Declared dividend per share of 275 kobo (2015: 250 kobo) is based on the dividend declared

on 23 June 2015 of N1,761,623,498 (2015: N1,601,475,908) on 640,590,363 ordinary shares

of 50 kobo each (2015: 640,590,363 ordinary shares of 50 kobo each), being the number of

ordinary shares in issue during the year.

Basic and diluted earnings per share of 523 kobo (2015: 1,112 kobo) was calculated based on

profit attributable to the owners of the Company for the year of N3,347,463,000 (2015:

N7,125,788,000) and on 640,590,363 ordinary shares of 50 kobo each (2015: 640,590,363

ordinary shares of 50 kobo each), being the number of ordinary shares in issue during the

year and at the end of the year.

In 2013, the Nigerian Investment Promotion Council (NIPC) granted the Company a pioneer

status for a five year period with respect to the following production activities of the

Company.

PET products produced at the Lagos, Enugu and Abuja plant locations, with a retroactive

commencement production date of 1 September 2011.

The effective commencement production date was certified by the Industrial Inspectorate

Department of the Federal Ministry of Commerce and Industry on 23 November 2013. In

accordance with the provision of the Industrial Development (Income Tax Relief) Act, the

Company's profit attributable to the pioneer line of business is therefore not liable to income

taxes for the duration of the pioneer period.

37


31 March 2016

12 Property, plant and equipment (PPE)

(a) The movement on these accounts during the year was as follows:


Cost

Balance at 1 April 2014 87,027 12,862,022 29,038,759 9,268,867 5,684,908 12,715,589 3,067,771 72,724,943

Additions ‐ 36,215 125,318 206,322 79,656 3,408,337 10,882,464 14,738,312

Transfers from capital work in progress ‐ 2,593,331 9,247,198 29,497 413,978 ‐ (12,284,004) ‐

Reclassification*** ‐ ‐ ‐ ‐ ‐ ‐ 372,684 372,684

Disposals ‐ ‐ (25,076) (41,742) ‐ (287,095) ‐ (353,913)

Write‐off ‐ ‐ ‐ (62,006) ‐ (1,202,338) ‐ (1,264,344)

Balance at 31 March 2015 87,027 15,491,568 38,386,199 9,400,938 6,178,542 14,634,493 2,038,915 86,217,682

Balance at 1 April 2015 87,027 15,491,568 38,386,199 9,400,938 6,178,542 14,634,493 2,038,915 86,217,682

Additions 15,500 24,789 52,500 230,166 54,720 4,200,368 2,886,950 7,464,993

Transfers from capital work in progress ‐ 1,110,397 3,017,308 171,916 248,193 ‐ (4,547,814) ‐

Reclassification*** ‐ ‐ ‐ ‐ ‐ ‐ 53,924 53,924

Disposals ‐ ‐ (24,199) (454,677) (3,156) (1,678,267) ‐ (2,160,299)

Balance at 31 March 2016 102,527 16,626,754 41,431,808 9,348,343 6,478,299 17,156,594 431,975 91,576,300

Depreciation and impairment

Balance at 1 April 2014 7,189 2,805,152 16,361,635 7,024,278 3,521,713 5,111,472 ‐ 34,831,439

Depreciation for the year 1,212 648,593 3,498,661 917,113 710,726 2,744,440 ‐ 8,520,745

Disposals ‐ ‐ (25,076) (37,225) ‐ (248,532) ‐ (310,833)

Write‐off ‐ ‐ ‐ (62,006) ‐ (1,202,338) ‐ (1,264,344)

Balance at 31 March 2015 8,401 3,453,745 19,835,220 7,842,160 4,232,439 6,405,042 ‐ 41,777,007

Balance at 1 April 2015 8,401 3,453,745 19,835,220 7,842,160 4,232,439 6,405,042 ‐ 41,777,007

Depreciation for the year 1,404 791,662 4,185,194 724,945 717,425 2,905,341 ‐ 9,325,971

Disposals ‐ ‐ (23,993) (445,354) (1,479) (1,591,968) ‐ (2,062,794)

Balance at 31 March 2016 9,805 4,245,407 23,996,421 8,121,751 4,948,385 7,718,415 ‐ 49,040,184

Carrying amounts

At 1 April 2014 79,838 10,056,870 12,677,124 2,244,589 2,163,195 7,604,117 3,067,771 37,893,504

At 31 March 2015 78,626 12,037,823 18,550,979 1,558,778 1,946,103 8,229,451 2,038,915 44,440,675

At 1 April 2015 78,626 12,037,823 18,550,979 1,558,778 1,946,103 8,229,451 2,038,915 44,440,675

At 31 March 2016 92,722 12,381,347 17,435,387 1,226,592 1,529,914 9,438,179 431,975 42,536,116

*** Amount represents reclassification of qualifying spares from inventory.

Returnable

packaging

PPE Under

ConstructionTotal Leasehold land Buildings

Plant and

MachineryMotor Vehicles

Office

Equipment

38


31 March 2016

(b) Property, plant and equipment under construction

Capital work in progress at the year is analyzed as follows:


Plant and machinery 163,271 1,221,505

Land and buildings 265,516 812,624

Furniture equipment 3,188 4,786

431,975 2,038,915

No borrowing costs were capitalized in current year (2015: Nil).

(c) Assets held on finance lease

(d) Capital commitments

2016 2015

Approved and contracted 748,419,830 ‐ Approved but not contracted 195,847,440 ‐

944,267,270 ‐

(e) Additions in cash flow statement

2016 2015

Additions per Note 12 (a) 7,464,993 14,738,312

Reclassification of qualifying spares from inventories 53,924 372,684

Accrued additions to property, plant and equipment (197,799) (277,296)

Acquisition of PPE per statement of cash flows 7,321,118 14,833,700

13 Intangible assets

The movement in this account during the year was as follows:


Cost 2016 2015

Balance beginning of the year 115,129 107,253

Additions 62,908 7,876

Balance end of year 178,037 115,129

Amortization

Balance beginning of the year 87,431 59,292

Amortization for the year 35,237 28,139

Balance end of year 122,668 87,431

Carrying amounts

Balance beginning of the year 27,698 47,961 Balance end of year 55,369 27,698

The Company holds various pieces of land under finance lease arrangements. The maximum

tenor of the lease arrangements is 99 years in line with the Land Use Act. The lease amounts

were fully paid at the inception of the lease arrangements.

Capital expenditure commitments at the year‐end authorized by the Board of Directors

comprise:

39


31 March 2016

14 Prepayments and other receivables

a Prepayments represent current and non‐current portions of prepaid rent.

b

15 Deposit for imports

16 Deferred taxation

Recognized deferred tax liabilities

(a) Deferred tax liabilities are attributable to the following:

In thousands of naira 31‐Mar‐16 31‐Mar‐15 31‐Mar‐16 31‐Mar‐15 31‐Mar‐16 31‐Mar‐15

Property, plant and equipment ‐ ‐ 3,528,304 4,178,687 3,528,304 4,178,687

Employee benefits (1,248,874) (964,421) ‐ ‐ (1,248,874) (964,421)

Unrealized exchange gain ‐ ‐ 3,034 12,523 3,034 12,523

Tax (asset)/liabilities (1,248,874) (964,421) 3,531,338 4,191,210 2,282,464 3,226,789

Set off of tax 1,248,874 964,421 (1,248,874) (964,421) ‐ ‐ Net tax liabilities ‐ ‐ 2,282,464 3,226,789 2,282,464 3,226,789

(b) Movement in temporary differences during the year


Balance 31

March 2014

Recognized

in profit or

loss

Recognized in

other

comprehensive

income

Balance 31

March 2015

Recognized

in profit or

loss

Recognized in

other

comprehensive

income

Balance 31

March 2016

Property, plant and equipment 3,802,189 376,498 ‐ 4,178,687 (650,383) ‐ 3,528,304

Employee benefits (1,329,291) (90,926) 455,796 (964,421) 36,380 (320,833) (1,248,874)

Unrealized exchange gain ‐ 12,523 ‐ 12,523 (9,489) ‐ 3,034

2,472,898 298,095 455,796 3,226,789 (623,492) (320,833) 2,282,464

Net Liabilities Assets

Non‐current other receivables represent non interest bearing loans granted to the Company’s employees, which are secured by the employees’

retirement benefit obligations.

Deposit for imports represent foreign currencies purchased for funding letters of credit in respect of imported raw materials and items of property plant

and equipment.

40


31 March 201617 Inventories


4,785,266 4,361,887

Work in progress 216,103 179,240

Finished products 688,380 813,377

Engineering spares 2,188,774 2,094,613

Goods in transit 3,616,339 2,119,352

11,494,862 9,568,469

18 Trade and other receivables


Trade receivables 455,875 502,625

Staff loans and advances 565,112 503,620

Due from related parties (Note 29 (d)(i)) 3,892,995 3,037,998

Other receivables (i) 677,087 120,262

Deposit with Company's registrars for dividend 70,515 257,327

5,661,584 4,421,832

19 Cash and cash equivalents


Cash and bank balances 5,856,658 1,820,726

Cash and cash equivalents in statement of financial position 5,856,658 1,820,726

Bank overdrafts used for cash management purposes (1,076,388) (4,619,707)Cash and cash equivalents in the statement of cash flows 4,780,270 (2,798,981)

The Company’s exposure to credit risk, currency risk and a sensitivity analysis for cash and cash equivalents

is disclosed in Note 24.

Included in cash and cash equivalents are unclaimed dividend amounting to N635 million (2015:

N339 million) held in a separate bank account in accordance with the guidelines issued by the Securities and

Exchange Commission. This amount is restricted from use by the Company.

The value of raw materials, non‐returnable packaging materials, spare parts, changes in finished products

and products in process recognized in cost of sales during the year amounted to N57.2 billion (2015: N48.9

billion). In current year, there was no write‐down of inventory to net realizable value (2015: N150 million)

these were included in cost of sales on the statement of profit or loss and other comprehensive income.

The Company’s exposure to credit and currency risks, and impairment losses related to trade and other

receivables are disclosed in Note 24.

Raw materials, consumables and non‐returnable packaging

materials

41


31 March 2016

20 Capital and reserves

(a) Ordinary shares

(i) Authorized ordinary shares of 50k each

In number of shares 2016 2015

640,590,363 640,590,363

(ii) Issued and fully paid ordinary shares of 50k each

In number of shares 2016 2015

640,590,363 640,590,363

21 Loans and borrowings

(a)

(i) Loans and borrowing as at 31 March is as follows:


Non‐ current liabilities:Secured bank loans 1,520,205 4,433,469

Current liabilities:

Secured bank loans 16,689,294 11,032,831

18,209,499 15,466,300

(ii) Movement in the loans and borrowings

Secured bank loans

2016 2015

Balance beginning of year 15,466,300 14,466,806

Increase in borrowings 70,326,373 8,778,758

Interest charged (Note 7(b)) 2,816,428 1,662,491

Interest repayment (2,586,831) (1,487,439) Principal repayment (67,812,771) (7,954,316) Balance end of year 18,209,499 15,466,300

This note provides information about the contractual terms of the Company’s interest‐bearing

loans and borrowings, which are measured at amortized cost. For more information about the

Company’s exposure to interest rate, foreign currency and liquidity risks, see Note 24.

42


31 March 2016

Terms and debt repayment schedule

(b) Terms and conditions of outstanding loans were as follows:


Currency Face ValueFair value

Face ValueFair value

CITI bank $3,181,362 USD libor + 5% 2016 628,319 628,319 628,319 1,725,361 1,747,980 1,747,980

Zenith Bank PLC N7,500,000 NGN 13% 2016 6,500,000 6,502,131 6,502,131 3,000,000 3,000,000 3,000,000

Standard Chartered N1,200,031 NGN 13% 2016 1,200,031 1,217,399 1,217,399 2,442,286 2,487,738 2,487,738

Standard Chartered N1,434,933 NGN 2015 ‐ ‐ ‐ 1,434,933 1,434,933 1,434,933

Stanbic IBTC N1,000,000 NGN 2015 ‐ ‐ ‐ 100,000 100,748 100,748

Guaranty Trust Bank PLC N6,000,000 NGN 13% 2016 4,000,000 4,146,393 4,146,393 ‐ ‐ ‐

Union Bank N977,199 NGN 2015 ‐ ‐ ‐ 977,199 1,002,233 1,002,233

Stanbic IBTC N66,187 NGN 2015 ‐ ‐ ‐ 153,000 154,995 154,995

Standard Chartered N1,578,200 NGN 2015 ‐ ‐ ‐ 526,067 530,552 530,552

Standard Chartered N1,579,700 NGN 2015 ‐ ‐ ‐ 526,567 531,063 531,063

Zenith Bank PLC $2,852,244 USD Libor + 9% 2016 559,040 559,040 559,040 ‐ ‐ ‐

Standard Chartered $3,000,060 USD Libor + 7% 2016 592,512 592,512 592,512 280,836 282,433 282,433

Zenith Bank PLC N3,000,000 NGN 16% 2016 3,000,000 3,043,500 3,043,500 3,000,000 3,035,644 3,037,239

Zenith Bank PLC N1,500,000 NGN 17% 2018 1,500,000 1,520,205 1,526,444 ‐ ‐ ‐

Stanbic IBTC N1,125,000 NGN 13.3%‐16.8% 2016 ‐ ‐ ‐ 1,125,000 1,157,981 1,158,639

Total Interest bearing liabilities 17,979,902 18,209,499 18,215,738 15,291,249 15,466,300 15,468,553

The bank loans are secured by a negative pledge on the Company’s assets in line with their relative exposures.

31 March 2016 31 March 2015

Nominal

interest rate

Year of

maturity

Carrying

amount

Carrying

amountFacility

amount

43


31 March 2016

22 Employee benefits


Present value of unfunded obligation for gratuity (Note (a)) 3,738,175 2,939,619

Long service awards benefit plan (Note (b)) 819,570 729,676 Total employee benefit liabilities 4,557,745 3,669,295

(a) Movement in present value of unfunded obligation for gratuity


Balance, beginning of the year 2,939,619 3,769,378

Included in profit or loss

Current service costs 181,710 286,230

Interest costs on obligation 511,497 542,125

Past service cost 268,197 ‐

961,404 828,355

Included in OCI

1,069,442 (1,519,320)

Benefit paid by the plan (1,232,290) (138,794)

Balance, end of the year 3,738,175 2,939,619

The Company operates an unfunded annualized defined benefit gratuity scheme for its employees.

The benefits under which are related to the employees' length of service and remuneration. Under

the annualized defined benefit plan, gratuity is calculated on an annual basis using the salaries for

each year to determine the benefits using projected unit credit method.

Lump sum benefit payable upon retirement or resignation of employment are fully accrued over the

service lives of the employees. Gratuity and other long term employee benefit provisions are based

upon independent actuarial valuation by Alexander Forbes Consulting Actuaries Nigeria Limited with

FRC number FRC/2012/0000000000504.

Actuarial loss/(gain)

44


31 March 2016

(b) Movement in long service award benefit plan


Balance, beginning of the year 729,676 990,945

Included in profit or loss

Current service costs 60,612 96,227

Interest costs on obligation 131,071 143,030

Actuarial gain on long service awards (10,653) (429,560)

181,030 (190,303)

Benefit paid by the plan (91,136) (70,966)

Balance, end of the year 819,570 729,676

(c) Total employee benefit recognized in the profit or loss


Unfunded obligation for gratuity 961,404 828,355

Long service award benefit plan 181,030 (190,303)

1,142,434 638,052

2016 2015

In thousands of Naira

Cost of sales 114,243 295,316

Administrative expense 1,028,191 342,736

1,142,434 638,052

(d) Actuarial assumptions

Financial Assumptions

2016 2015

Long term average discount rate (p.a.)

Gratuity 13.3% 16.4%

Long service awards 13.3% 17.6%

Average Pay Increase (p.a.) 10% 12%

Weighted average duration of the plan (years) 8 6

Assumptions regarding future mortality are based on published statistics and mortality tables.

Employee benefit expense shown above are recognized in administrative expenses and cost of

sales in the statement of profit or loss as follows.

Principal actuarial assumptions at the reporting date (expressed as weighted averages) fall

under two broad categories. These assumptions depict management’s estimate of the likely

future experience of the Company.

Total employee expenses relating to defined benefit

plan (Note (9a))

45


31 March 2016

Mortality in service

Sample age Number of deaths in year out of 10,000 lives

2016 2015

25 7 7

30 7 7

35 9 9

40 14 14

45 26 26

(e) Sensitivity Analysis


rate Gratuity Long service

awards

1% (147,500) (45,829)

‐1% 93,202 50,924

1% 23,074 27,655

‐1% (86,425) (25,379)

+1 year (21,000) (2,800)

‐1 year (45,914) 2,521 Mortality rate

The rates of mortality assumed for employees are the rates published in the A49/52 Ultimate

Tables, published jointly by the Institute and Faculty of Actuaries in the UK. This is due to

unavailability of published reliable demographic data in Nigeria.

Below is the sensitivity analysis of the principal actuarial assumptions adopted in determining

the employee benefit liabilities:

Discount rate

Salary increase rate

46


31 March 2016

23 Trade and other payables


Trade payables 5,359,902 6,032,530

Other payables and accrued expenses (Note (a)) 3,422,841 2,340,515

Amount due to related parties (Note 29(d)(i)) 182,062 845,997

Pension payable (Note (b)) 180,219 207,600

Dividend payable (Note (c)) 706,341 597,196

Liability for returnable packaging material 5,641,185 5,407,472

15,492,550 15,431,310

(a)

(b)

In thousands of Naira 2016 2015


Contributions during the year (Note 9(a)) 816,838 795,356

Payments (844,219) (787,576)


(c) Movement in dividend payable



Declared dividend (Note 11(b)) 1,761,623 1,601,476

Unclaimed dividend written back (8,730) (17,102)

Dividend paid (1,643,748) (1,513,088)


Other payables and accrued expenses represents payroll related accruals, non‐CIT as well as

general accruals as at year end.

Included in other payables and accrued expenses is pension payable to the pension fund

administrators which was yet to be remitted at the year end. The movement on the pension

payable account during the year was as follows:

The directors propose a dividend of 160 kobo per share (2015: 275 kobo per share) on the issued

shares of 640,590,363 ordinary shares of 50k each (640,590,363). The dividend if approved by

members will be paid subject to deduction of withholding tax at the appropriate rate.

As at 31 March 2016, an amount of N71 million (2015: N257 million) of the total dividend payable

was held with the Company’s registrar, GTL Registrars Limited. The remaining dividend payable of

N635 million (2015: N340 million) represents unclaimed dividends, which have been returned to

the Company by the Registrar.

The Company’s exposure to currency and liquidity risk related to trade and other payables is

disclosed in Note 24.

47


31 March 2016

24 Financial risk management and financial instruments

∙ Credit risk

∙ Liquidity risk

∙ Market risk

Risk management framework

(a) Credit risk

Exposure to credit risk

The Company has exposure to the following risks from its use of financial instruments:

This note presents information about the Company’s exposure to each of the above risks, the

Company’s objectives, policies and processes for measuring and managing risk, and the Company’s

management of capital. Further quantitative disclosures are included throughout these financial

statements.

The Board of Directors' have overall responsibility for the establishment and oversight of the

Company’s risk management framework. The Board has established a Management Committee,

which is responsible for developing and monitoring the Company’s risk management policies. The

committee reports regularly to the Board of Directors on its activities. The Committee is assisted in its

oversight role by Internal Audit.

The Company’s risk management policies are established to identify and analyze the risks faced by

the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

Risk management policies and systems are reviewed regularly by the Management Committee to

reflect changes in market conditions and the Company’s activities.

Credit risk is the risk of financial loss to the Company if a customer or a counterparty to a financial

instrument fails to meet its contractual obligations and arises principally from the Company's

receivable from customers or investment in securities.

The carrying amount of financial assets represents the maximum credit exposure. The maximum

exposure to credit risk at the reporting date was:

The Company’s Audit Committee oversees how management monitors compliance with the

Company’s risk management policies and procedures, and reviews the adequacy of the risk

management framework in relation to the risks faced by the Company. Internal Audit undertakes

both regular and ad hoc reviews of compliance with established controls and procedures, the results

of which are reported to Senior Management of the Company at Management meetings.

48


31 March 2016

In thousands of naira Note 2016 2015

Other receivables (non‐current) 14 95,188 175,663

Trade and other receivables 18 5,661,584 4,421,832

Cash and cash equivalents 19 4,780,270 (2,798,981)

10,537,042 1,798,514

Trade and other receivables

Carrying amount

Management has credit policies in place and the exposure to credit risk is monitored on an

ongoing basis. Under the credit policies all customers requiring credit over a certain amount are

reviewed and new customers analyzed individually for creditworthiness before the Company’s

standard payment and delivery terms and conditions are offered. The Company’s credit

assessment process includes specified cash deposits by new customers. Credit limits are

established for qualifying customers and these limits are reviewed regularly by the Credit control

unit. Customers that fail to meet the Company’s benchmark creditworthiness may transact with

the Company only on a prepayment basis.

The Credit control unit is charged with the review of each customer’s credit limit in line with the

customer's performance and perceived risk factor assigned to the customer.

In monitoring customer credit risk, customers are grouped according to their credit

characteristics, including whether they are an individual or legal entity, whether they are a key

distributor or retail distributor, geographic location, and existence of previous financial

difficulties. Trade and other receivables relate mainly to the Company’s wholesale customers.

Customers with no trading activities for a period of up to one year are placed on a dormant

customer list, and future sales are made on a prepayment basis only with approval of

management.

Amount due from related parties as at year end represents advance to the Company's key

suppliers’ with respect to purchases of packaging materials and funds required to boost their

working capital requirements.

Other receivables represent unclaimed dividends with the registrars, staff advances and

receivables.

49


31 March 2016

In thousands of naira Note 2016 2015

Key customers 639,814 655,678

Other customers 148,805 116,385

Trade receivables 788,619 772,063

Other receivables and advances 1,303,719 685,402

2,092,338 1,457,465

Impairment (394,264) (330,958)

1,698,074 1,126,507

Due from related parties (Note 29(d)(i)) 3,892,995 3,037,998

Deposit with the Company's registrars 70,515 257,327

5,661,584 4,421,832

Impairment losses

The ageing of trade receivables at the reporting date was:

Gross Impairment Gross Impairment

In thousands of naira 2016 2016 2015 2015

Not pass due 0‐30 days 865,772 ‐ 662,270 ‐

Past due 31‐90 days 942,216 (109,914) 574,151 (109,914)

Past due 91‐180 days 87,443 (87,443) 45,646 (45,646)

Past due 181‐365 days 196,907 (196,907) 175,398 (175,398)

More than 365 days ‐ ‐ ‐ ‐

2,092,338 (394,264) 1,457,465 (330,958)

Carrying amount

The Company’s most significant customer accounts for N65 million of the loans and receivables

carrying amount at 31 March 2016 (2015: N121 million).

The Company establishes an allowance for impairment that represents its estimate of incurred

losses in respect of trade and other receivables. The main components of this allowance are a

specific loss component that relates to individually significant exposures, customers with

outstanding amounts but have not placed orders/traded for a prolonged period of time (usually

one year) and a collective loss component established for groups of similar assets in respect of

losses that have been incurred but not yet identified. The collective loss allowance is determined

based on historical data of payment statistics.

The maximum exposure to credit risk for trade and other receivables at the reporting date by

type of counterparty was:

50


31 March 2016



Impairment loss recognized 63,306 30,252

Amounts written off ‐ (252)Balance, end of the year 394,264 330,958

The ageing of amount due from related parties at the reporting date was:

Gross Impairment Gross Impairment

In thousands of naira 2016 2016 2015 2015

Neither past due nor impaired 3,019,718 ‐ 2,281,114 ‐

Past due 31‐90 days 873,277 ‐ 756,884 ‐

Past due 91‐180 days ‐ ‐ ‐ ‐

Past due 181‐365 days ‐ ‐ ‐ ‐

More than 365 days ‐ ‐ ‐ ‐

3,892,995 ‐ 3,037,998 ‐

Cash and cash equivalents

(b) Liquidity risk

The movement in the allowance for impairment in respect of loans and receivables during the year was as

follows:

In addition, the Company maintains the various lines of credits as listed in note 21(b).

The impairment loss as at 31 March 2016 relates to several customers that are not expected to be able to

pay their outstanding balances, mainly due to economic circumstances. The Company believes that the

unimpaired amounts that are past due are still collectible, based on historical payment behaviour and

extensive analysis of the underlying customers’ credit ratings.

Based on historic default rates, the Company believes that, apart from the above, no impairment allowance

is necessary in respect of trade receivables not past due by up to 30 days.

The Company believes that the unimpaired amounts that are past due by more than 30 days are still

collectible in full, based on historic payment behaviour and extensive analysis of customer credit risk.

The Company held cash and cash equivalents of N5.9 billion at 31 March 2016 (2015: N1.8 billion) which

represents its maximum credit exposure on these assets. The cash and cash equivalents are held with bank

and financial institution counterparties, which are reputable and have a sound financial position.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with

its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach

to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its

liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or

risking damage to the Company’s reputation.

The Company uses weighted average cost to cost its products, which assist it in monitoring cash flow

requirements and optimizing its cash return on investments. The Company aims to maintain the level of cash

and cash equivalents at an amount in excess of expected cash outflows on financial liabilities (other than

trade payables) over the succeeding 60 days. The Company also monitors the level of expected cash inflows

on trade and other receivables together with expected cash outflows on trade and other payables. At 31

March 2016, the expected cash flows from trade and other receivables maturing within two months were

N85 million (2015: N657 million). This excludes potential impact of extreme circumstances that cannot

reasonably be predicted, such as natural disasters.

51


31 March 2016

31 March 2016


Non‐derivative financial

liabilities

Loans and borrowings 18,209,499 18,743,013 (17,094,903) (126,452) (1,521,658) ‐ ‐

Unsecured intercompany loan 182,062 182,062 (182,062) ‐ ‐ ‐ ‐

Trade and other payables 13,673,253 13,673,253 (13,673,253) ‐ ‐ ‐ ‐

Bank overdraft 1,076,388 1,076,388 (1,076,388) ‐ ‐ ‐ ‐

33,141,202 33,674,716 (32,026,606) (126,452) (1,521,658) ‐ ‐

31 March 2015


Non‐derivative financial

liabilities

Loans and borrowings 15,466,300 15,952,783 (13,516,503) (1,523,593) (912,687) ‐ ‐

Unsecured intercompany loan 845,997 845,997 (845,997) ‐ ‐ ‐ ‐

Trade and other payables 13,181,163 13,181,163 (13,181,163) ‐ ‐ ‐ ‐

Bank overdraft 4,619,707 4,619,707 ‐ (4,619,707) ‐ ‐ ‐

34,113,167 34,599,650 (27,543,663) (6,143,300) (912,687) ‐ ‐

6 months or

less6‐12 months 1‐2 years 2‐5years

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

More than

5 years

Carrying

amount

Contractual

cash flows

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of

netting agreements.

Carrying

amount

Contractual

cash flows

6 months or

less6‐12 months 1‐2 years 2‐5years

More than

5 years

52


31 March 2016

(c) Market risk

i. Currency risk

Amounts in thousands Euro USD Euro USD

Cash and cash equivalent 12 832 4,252 35,467

Trade and other receivables ‐ 592 2,020 334

Trade and other payables (108) (943) ‐ (2,032)

Bank Loan ‐ (6,181) ‐ ‐

Net exposure (96) (5,700) 6,272 33,769

The following significant exchange rates applied during the year;

2016 2015 2016 2015

Euro 220 218 225 212

United States Dollar (USD) 199 172 199 199

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest

rates will affect the Company’s income or the value of its holdings of financial instruments. The

objective of market risk management is to manage and control market risk exposures within

acceptable parameters, while optimizing the return.

31 March 2016 31 March 2015

Year end spot rate Average rate

Exposure to currency risk

The Company is exposed to currency risk on sales and purchases and borrowings that are

denominated in a currency other than the functional currency of the Company, primarily the

Naira. The currencies in which these transactions primarily are denominated are Euro and

US Dollars (USD). The currency risk is the risk that the fair value or future cash flows of a

financial instrument will fluctuate due to the changes in foreign exchange rates.

The Company'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 by buying or

selling foreign currencies at spot rates when necessary to address short term imbalances.

The summary quantitative data about the Company’s exposure to currency risk as reported

to the Management of the Company based on its risk management policy was as follows:

53


31 March 2016

ii. Sensitivity analysis

Effect in thousands of Naira

31 March 2016

USD (20% strengthening) 226,860

USD (20% weakening) (226,860)

Euro (20% strengthening) 4,320

Euro (20% weakening) (4,320)

31 March 2015

USD (10% strengthening) (672,003)

USD (10% weakening) 672,003

Euro (10% strengthening) (132,966)

Euro (10% weakening) 132,966

(d) Interest rate risk


Fixed rate instruments

Financial assets 1,053,785 281,161

Financial liabilities (18,743,013) (15,952,783)

(17,689,228) (15,671,622)

Variable rate instruments

Financial liabilities ‐ ‐

‐ ‐

Fair value sensitivity analysis for fixed rate instruments

Carrying Amount

In managing interest rate risk, the Company aims to reduce the impact of short‐term fluctuations

in earnings. Dividend pay‐out practices seek a balance between giving good returns to

shareholders on one hand and maintaining a solid debt/equity ratio on the other hand.

At the reporting date the interest rate profile of the Company’s interest‐bearing financial

instruments was:

A strengthening of the naira, as indicated below, against the USD would have affected the

measurement of financial instruments denominated in foreign currency and increased profit

or loss by the amounts shown below. This analysis is based on foreign currency exchange

rate variances that the Company considered to be reasonably possible at the end of the

reporting period. The analysis assumes that all other variables, in particular interest and

inflation rates, remain constant and ignores any impact of forecast sales and purchases.

The Company does not account for any fixed financial assets and liabilities at fair value through

profit or loss. Therefore a change in interest rates at the reporting date would not affect profit or

loss.

Increase/(decrease) in profit or

loss

54


31 March 2016

(e) Fair values

Fair values versus carrying amount


Assets carried at amortized cost

Other receivables (non‐current) 95,188 95,188 175,663 175,663

Trade and other receivables 5,661,584 5,661,584 4,421,832 4,421,832

Cash and cash equivalents 5,856,658 5,856,658 1,820,726 1,820,726

11,613,430 11,613,430 6,418,221 6,418,221

Liabilities carried at amortized cost

Loans and borrowings‐non current 1,520,205 1,526,444 * 4,433,469 4,435,722

Loans and borrowings‐current 16,689,294 16,689,294 11,032,831 11,032,831

Trade and other payables 13,673,253 13,673,253 13,181,163 13,181,163

Bank overdraft 1,076,388 1,076,388 4,619,707 4,619,707

32,959,140 32,965,379 33,267,170 33,269,423

The Company does not carry any financial asset or financial liabilities at fair value.

* Level 2 inputs

The basis for determining fair values is disclosed in Note 4.

2016 2015

Secured bank loans 5%‐17% 7%‐17%

25 Capital management


Total liabilities 43,017,017 43,753,206

Less: cash and cash equivalents (5,856,658) (1,820,726)

Net debt 37,160,359 41,932,480

Total equity 24,779,594 23,933,633

Net debt to equity ratio 1.50 1.75

The interest rates used to discount estimated cash flows, where applicable are based on external sources and

were as follows:

The Company’s debt to adjusted capital ratio at the end of the reporting period was as follows:

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence

and to sustain future development of the business. Management monitors the return on capital, which the

Company defines as result from operating activities divided by total shareholders’ equity. Management also

monitors the level of dividends to all shareholders.

Trade and other receivables, loans and borrowings (current) and bank overdrafts are the Company’s short

term financial instruments. Accordingly, management believes that their fair values are not expected to be

materially different from their carrying values hence no further disclosures have been made.

The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of

financial position, are as follows:

2016 2015

Fair valueCarrying

amountFair value Carrying amount

55


31 March 2016

26 Operating leases

27 Changes in presentation

Statement of financial position


Prior

presentation

(31 March

2014) Reclassification

Current

presentation

(31 March

2014)

Cash and cash equivalents 4,918,916 (827,066) 4,091,850

Deposit for imports ‐ 827,066 827,066

4,918,916 ‐ 4,918,916


Prior

presentation

(31 March

2015) Reclassification

Current

presentation

(31 March

2015)

Cash and cash equivalents 8,522,772 (6,702,046) 1,820,726

Deposit for imports ‐ 6,702,046 6,702,046

8,522,772 ‐ 8,522,772

28 Contingencies

(a) Pending litigation and claims

The Company leases equipment, offices, warehouse and accommodation facilities under operating leases. The

leases typically run for a period of one to five years, with an option to renew the lease after that date. Lease

payments are usually increased at the expiration of the lease term and consequent renewal to reflect market

rentals. Lease rentals are paid upfront and included in prepayments, which are amortized to the profit and loss

over the life of the lease on a straight line basis and therefore there are no future lease payment payable in

relation to these lease. Lease rental payment in current year amounted to N376 million (2015: N520 million).

During the year ended 31 March 2016, an amount of N462 million (2015: N517 million) was recognized as an

expense in profit or loss in respect of operating leases.

The Head office, Ibadan and Ilorin land leases were entered into many years ago. The Company determined that

the land elements of these warehouse and office leases are operating leases. The rent paid to the landlord is

increased to market rate at regular intervals. As a result, it was determined that substantially all the risks and

rewards of the land and buildings are with the landlord.

To enhance the fair presentation and comparability of information, changes were made to the presentation of

certain items in the financial statements. Accordingly, comparative figures were reclassified. Find below the

nature of the change;

The Company is engaged in lawsuits that have arisen in the normal course of business. The contingent

liabilities in respect of pending litigation and other possible claims amounted to N932 million as at 31 March

2016 (2015: N1.1 billion). In the opinion of the directors, and based on independent legal advice, the

Company is not expected to suffer any material loss arising from these claims. Thus no provision has been

made in these financial statements.

56


31 March 2016

(b) Financial commitments

29 Related parties

(a) Parent and ultimate controlling party

(b) Transactions with key management personnel

Loans to key management personnel

(c) Key management personnel compensation

Key management personnel compensation comprised:


Short‐term employee benefits 225,162 275,221

Contribution to compulsory pension fund scheme 9,498 13,068

Long‐term employee benefits 195,918 259,096

430,578 547,385

(d) Other related party transactions

The directors are of the opinion that all known liabilities and commitments, which are relevant in

assessing the financial position of the Company, have been taken into consideration in the

preparation of these financial statements.

Related parties include the parent company, Afelka, S.A and other Seven‐Up entities and entities

under common control with Seven‐Up. Directors, their close family members and any employee

who is able to exert a significant influence on the operating policies of the Company are considered

as related parties. Key management personnel are also regarded as related parties. Key

management personnel are those persons having authority and responsibility for planning,

directing and controlling the activities of the entity, directly or indirectly, including any director

(whether executive or otherwise) of that entity.

A number of key management personnel, or their related parties, hold positions in other entities

that result in them having control or significant influence over the financial or operating policies of

the entities. During the year, a number of these entities transacted with the Company. The total

amounts due to related parties by nature of their transaction are shown below.

The major shareholder of the Company is Afelka S.A with 73.22 % shareholding. The ultimate

controlling party of the Group is Mak Holdings (Lebanon) SAL.

There were no unsecured loans with key management personnel as at year end (2015: N

million). The loans in prior year were non‐interest bearing facilities. At 31 March 2016, the balance

outstanding is included in long term other receivables.

In addition to their salaries, the Company also provides non‐cash benefits to directors and

executive officers, and contributes to a post‐employment defined contribution plan on their behalf.

In accordance with the terms of the plan, directors and executive officers are entitled to access the

fund when they retire.

Executive officers also participate in the Company’s long service awards programme. This

programme awards a certain sum of cash benefit which accrues to the recipient on graduated

periods of uninterrupted service.

57


31 March 2016

(i) Amounts due from related parties


Related Party 2016 2015 2016 2015

Sunglass Limited iii Advance

payment/ supply 8,662,902 4,200,882 3,133,563 2,473,817

iv Advance

payment/ supply

of corks

10,171,303 3,070,244 663,045 503,836

SBC Ghana Limited vii Sale of finished

goods 318,818 39,337 96,387 60,345

19,153,023 7,310,463 3,892,995 3,037,998

(ii) Amounts due to related parties


Related Party 2016 2015 2016 2015

v Cash advance/

Services 967 57,750 182,062 213,659

vi Good and

services 17,680,902 11,774,338 ‐ 632,338

17,681,869 11,832,088 182,062 845,997

(iii) Sunglass Limited:

(iv) Green Eagle, Cork Seal Nigeria Limited (Green Eagle):

Balance outstanding as at

31 March

Transaction value year

ended 31 March

Sunglass Limited whose principal activity is the manufacturing of glass and glass wares is a major

supplier of bottles to Seven‐Up bottling Company PLC "the Company". Sunglass is related to the

Company through common shareholding, as the majority shareholders in Seven‐Up also have majority

shares in Sunglass limited.

The Company advances money to Sunglass Limited to boost their working capital and assist them in the

procurement of materials required for production. These advances are subsequently recovered from

future transactions from the supply of bottles.

Green Eagle, Cork Seal Nigeria Limited whose principal activity is the manufacturing and marketing of

Corks, Seals and Crates for bottling companies and breweries, is a major supplier of crowns and crates

to Seven‐Up Bottling Company PLC. Green Eagle, Cork Seal Nigeria Limited is related to the Company

through common shareholding.

The Company also advances money to Green Eagles to boost their working capital and assist them in

the procurement of materials required for production. These advances are subsequently recovered

from future transactions with the company for the supply of corks and crates.

Nature of

transaction

Green Eagle, Cork

Seal Nigeria Limited

Nature of

transaction

Balance outstanding as at

31 March

M. El Kalil Properties

Limited:

Transaction value year

ended 31 March

Continental

Beverages SAL

(Offshore):

58


31 March 2016

(v) M. El Kalil Properties Limited:

(vi) Continental Beverages SAL (Offshore):

(vii) Seven‐Up Bottling Company (SBC) Ghana

30 Subsequent events

SBC Ghana Limited shares a common director with the Company. SBC Ghana Limited purchases

finished products from Seven‐Up Bottling Company PLC for resale in Ghana. Transactions with the

Company during the year amounted to N318.8 million (2015:N39.3 million) with a receivable balance

of N 96.4 million (2015: N 60.3 milion) as at year end.

The Company occupies properties owned by M. El‐Kalil & Sons (Properties) Limited. M. El‐Kalil & Sons

(Properties) Limited is related to the Company through common shareholding. In prior year M. El Kalil

advanced funds to Seven‐Up to assist in funding the operations of the business. Seven‐Up Bottling

Company also provides management services (mainly legal advice) to M.El Kalil.

Continental Beverages SAL (Offshore) sells goods and provides management services to Seven‐up

Bottling Company PLC. The total amount of goods bought from Continental Beverages during the year

amounted to N17.7 billion (2015: N11.8 billion). A consideration of 3% of profit before tax or 1% of net

sales, in a year where Seven‐up does not make profit (but not exceeding Nil (2015: N288,916,995)), is

paid as management service fees to Continental Beverages. This agreement is usually backed up with a

National Office for Technology Acquisition and Promotion (NOTAP) agreement however in current

year, there was none therefore no accrual was made during for management fee.

All outstanding balances with these related parties are expected to be settled within twelve months of

the reporting date. None of the balances is secured or bears interest.

Management fees payable to Continental Beverages for the year ended 31 March 2016 amounted to

Nil (2015: N262 million).

There are no events after the reporting date which could have had a material effect on the financial

position of the Company as at 31 March 2016 and its operating results for the year then ended that

have not been adequately provided for or disclosed in these financial statements.

59

Other National Disclosures

60


31 March 2016


Value Added StatementFor the year ended 31 March

2016 % 2015 %


Revenue 85,634,679 82,450,505

Brought in materials and services

‐ Local (39,021,969) (36,101,778)

‐ Imported (19,735,380) (16,363,380)

26,877,330 29,985,347

Other income 317,434 81,603

Finance Income 41,571 22,151

Value Added 27,236,335 100 30,089,101 100

Distribution of Value Added:

To Government as:

Taxes and duties

‐ Government as taxes 409,927 2 1,623,313 5

To Employees:

‐ Employees as wages and salaries

and end of service benefits 10,872,213 40 10,331,234 34

To Providers of Finance:

‐ Finance Costs 3,245,524 12 2,459,882 8

Retained in the business:

To maintain and replace

‐ Property, plant and equipment 9,325,971 34 8,520,745 28

‐ Intangible assets 35,237 ‐ 28,139 ‐

To augment reserves 3,347,463 12 7,125,788 25

Value added 27,236,335 100 30,089,101 100

61


31 March 2016


Five ‐ Year Financial Summary

Statement of profit or loss and other

comprehensive income2016 2015 2014 2013 2012


Revenue 85,634,679 82,450,505 77,888,548 64,088,879 59,864,385

Results from operating activities 6,961,343 11186832 9,130,834 5,526,734 4,802,379

Profit before taxation 3,757,390 8,749,101 7,616,444 3,262,719 2,558,644

Profit for the year 3,347,463 7,125,788 6,434,601 2,856,504 1,678,471

Total Comprehensive income for the year 2,598,854 8,189,312 6,160,014 2,928,875 1,678,471

Ratios

Per 50k share data:

Basic/ diluted earnings per share 523 1,112 1,004 446 262

Declared dividend per share (kobo) 275 250 220 200 200

Share price at year end (Naira) 155 156 90 49 42

Net assets per share 39 37 27 20 16

Statement of financial position

2016 2015 2014 2013 2012


Employment of Funds

Share capital 320,295 320,295 320,295 320,295 320,295

Share premium 299,140 299,140 299,140 299,140 299,140

Retained earnings 24,160,159 23,314,198 16,709,260 11,958,545 9,688,160

Shareholder's fund 24,779,594 23,933,633 17,328,695 12,577,980 10,307,595

Current liabilities 34,656,603 32,423,653 29,867,824 27,862,495 29,670,126

Non current liabilities 8,360,414 11,329,553 8,666,690 10,929,695 8,507,941

67,796,611 67,686,839 55,863,209 51,370,170 48,485,662

Asset Employed

Non current assets 42,771,624 44,702,571 38,238,065 35,873,744 33,480,167

Current assets 25,024,987 22,984,268 17,625,144 15,496,426 15,005,495

67,796,611 67,686,839 55,863,209 51,370,170 48,485,662

62

Up Bottling Company PLC Annual Report 31...

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