CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Transcription

1 UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2016

2 OUTLINE PAGE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 3 CONSOLIDATED STATEMENT OF CASH FLOWS 4 NOTES TO THE FINANCIAL STATEMENTS 5 38

3 CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 3 m onths to Notes Rev enue Cost of sales 4 6 Gross profit Gain/ (Loss) on disposal of inv estment properties Selling and distribution ex penses Administrativ e ex penses Other operating income Operating profit 9 m onths to 3 m onths to Sept m onths to Sept ,462,67 2 (1,1 07,393) 3,209,241 (2,304,7 7 7 ) 605,541 (594,529) 4,1 02,952 (3,261,831 ) 355, , , , ,37 2 (1 9,7 7 5) (697,699) 1 46, ,37 2 (97,902) (1,422,97 0) 21 7,07 4 (25,621 ) (1 49,7 66) 409,07 1 (1 00,535) (7 88,905) 493, , , , ,1 07 Finance income Finance cost Net finance cost ,7 83 (841,41 3) (67 2,630) 453,989 (1,7 61,67 3) (1,307,684) 1 33,325 (7 45,940) (61 2,61 5) 37 6,493 (1,890,1 7 7 ) (1,51 3,684) Share of profit of associate and JV Profit before im pairm ent , ,7 09 1,092, , ,490 (141,429) 1,431, ,238 Impairment of UHL PPE & inv estment Profit /(loss) before tax ation 9 10, ,953 (47 3,000) (614,429) (47 3,000) (109,7 62) 10 (21,21 1 ) (1 09,1 81 ) Profit/ (loss) for the y ear (1 0,502) 23,7 7 3 (61 4,429) (1 09,7 62) Profit/(loss) attributable to: Equity holders of the parent Noncontrolling interest T otal profit/(loss) (5,448) (5,053) (1 0,502) 45,659 (21,886) 23,7 7 3 (584,229) (30,200) (61 4,429) (7 5,323) (34,439) (1 09,7 62) Tax ation Other comprehensiv e income T otal com prehensiv e incom e/(loss) (1 0,502) 23,7 7 3 (61 4,429) (1 09,7 62) T otal com prehensiv e incom e /(loss) attributable to: Equity holders of the parent Noncontrolling interests (5,448) (5,053) 45,659 (21,886) (584,229) (30,200) (7 5,323) (34,439) T otal com prehensiv e incom e/(loss) (1 0,502) 23,7 7 3 (61 4,429) (1 09,7 62) Basic EPS (Kobo) Diluted EPS (Kobo) (0) (0) 3 3 (34) (34) (4) (4) ** For purpose of proper comparison, H N08 billion impairment of the inv estment in UPDC Hotels Ltd has been updated to align with y ear end audit treatment. The notes on pages 5 to 38 are an integral part of these consolidated financial statements. 1 Page

4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30TH SEPTEMBER 2016 T h e Grou p Notes A ssets Non c u rren t assets Property, plant and equipment Intangible assets Inv estment properties Inv estments in assoc iate and joint v entures A v ailableforsale financ ial asset Inv estments in subsidiaries Cu rren t assets Inv entories Trade and other rec eiv ables Cash at bank and in hand T otal assets ,339, , ,1 32, ,45 2, , ,630, , ,867, ,1 97, ,000 48,988, ,7 65, ,7 7 6, ,043,97 7 1,096, ,331,95 5 8,7 62, ,904 25,91 7, ,905, ,1 95, ,960,5 67 4,321, , ,7 07 6,399, , , ,883,629 6,898,21 9 Non c u rren t liabilities Interest bearing Loans and Borrowings Deferred tax ation Deferred rev enue Cu rren t liabilities Trade and other pay ables Current inc ome tax liabilities ,388, , ,886, ,7 62 Interest bearing Loans and Borrowings ,7 7 2, ,407, , , , , ,424, ,488, ,307, ,386, ,37 5 3,943, ,938, ,37 5 3,943, ,892, ,7 40,832 (1 42,889) 35,5 97,942 35,695,1 7 3 (1 21,003) 35,5 7 4, ,905, ,960,5 67 Div idend Pay able Deferred rev enue T otal liabilities Equ ity Share c apital Share premium Retained earnings Equ ity attribu table to equ ity h olders of th e Com pan y Non c on trollin g in terest T otal equ ity T otal equ ity an d liabilities 24 (a) 24 (b) 24 (c ) Th e fina ncia l sta tem ents on pa ges 1 to 4 w er e a ppr ov ed a nd a u th or ised for issu e by th e boa r d of dir ector s on 2 5th October, Hakeem D. Ogunniran A deniun F. Taiwo FRC/201 3/ICSA N/ FRC/201 3/ICA N/ The summary of signific ant ac c ounting polic ies and notes on pages 5 to 38 are an integral part of these financ ial statements. 2 Page

5 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30TH SETEMBER 2016 Attributable to owners of the Com pany Share Capital Share Prem ium Retained Earnings Non Controlling T OT AL interest T otal Balance at 1 January Profit/ (loss) for the y ear Other comprehensiv e income Div idend paid 859,37 5 3,943, ,330, ,7 68 (859,37 5) 36,1 32, ,7 68 (859,37 5) (80,01 3) (40,990) 36,052, ,7 7 8 (859,37 5) Balance at 31st Decem ber ,37 5 3,943, ,892,525 35,695,17 3 (121,003) 35,57 4,17 0 Balance at 1 January Profit/ (loss) for the period Other comprehensiv e income Div idend paid 859,37 5 3,943, ,892,525 45,659 35,695, ,659 (1 21,003) (21,886) 35,57 4, ,7 7 3 Balance at 30th 859,37 5 3,943, ,938,184 35,7 40,832 (142,889) 35,597,942 The summary of significant accounting policies and notes on pages 5 to 38 are an integral part of these financial statements. 3 Page

6 CONSOLIDATED STATEMENT OF CASH FLOWS Cash flow from operating activ ities (Note 25) Tax paid Net Cash inflow from operating activ ities 30Sep 31Dec (1,537,669) (51,038) (1,588,7 07 ) 4,036,1 25 (1 58,031 ) 3,87 8,094 Cash flow from inv esting activ ities Proceeds from sale of inv estment property Purchase of property, plant & equipment 2,497, ,000 (67,939) (45,409) Purchase of intangible asset (3,306) (40,848) Proceeds from sale of property, plant and equipment 95,1 37 5,7 99 (1 5,539) (53,593) Purchase of inv estments properties Inv estment in JV Share of Profit of UPDC REIT and JV (1,535,865) 1,092,601 1,21 6, , ,981 4,052, ,099 Proceeds from borrowings 1 6,91 4,056 9,37 7,400 Repay ment of borrowings (1 5,891,91 4) (1 0,21 0,7 81 ) Interest receiv ed Net cash flow from inv esting activ ities Cash flow from financing activ ities Div idend paid Interest paid (859,37 5) (1,7 61,67 3) (2,67 0,625) Net cash flow from financing activ ities (7 39,532) (4,363,381) Net increase/(decrease) in cash and cash equiv alents 1,7 24,1 26 Net foreign ex change difference Cash and cash equiv alents at the beginning of the period Cash and cash equiv alents at the end of the period (Note 21) 6,024 (1 47,1 88) 8,801 (1,1 48,51 6) (1,01 0,1 30) 581,633 (1,148,516) The statement of accounting policies and the notes on pages 5 to 38 form an integral part of these financial statements 4 Page

7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT 1. General inform ation UA CN Property Dev elopment Company Plc ('the Company ') and its subsidiaries (together 'the Group') is a company incorporated in the Nigeria. The Group has business with activ ities in the following principal sectors: real estate and hotel management. The address of the registered office is 1 5 Odunlami Street, Lagos. The company is a public limited company and is listed on the Nigerian Stock Ex change. Sum m ary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies hav e been consistently applied to all the y ears presented, unless otherwise stated. 1 Basis of preparation The financial statements of UPDC hav e been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRSIC) interpretations applicable to companies reporting under IFRS as issued by International A ccounting Standard Board (IA SB). The consolidated and separate financial statements hav e been prepared under the historical cost conv ention ex cept for inv estment properties which are measured at fair v alue. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to ex ercise its judgement in the process of apply ing the group s accounting policies. The areas inv olv ing a higher degree of judgement or complex ity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4. (A ll amounts are in Naira thousands unless otherw ise stated) 1.2 Changes in accounting policy and disclosures (a) New and am ended standards adopted by th e group The Group applied for the first time certain standards and amendments, which are effectiv e for annual periods beginning on or after 1 January The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not y et effectiv e. The nature and the effect of these changes are disclosed below. A lthough these new standards and amendments applied for the first time in 201 5, they did not hav e a material impact on the annual consolidated financial statements of the Group. The nature and the impact of each new standard or amendment is described below: Am endm ents to IAS 19 Defined Benefit Plans: Employ ee ContributionsIA S 1 9 requires an entity to consider contributions from employ ees or third parties when accounting for defined benefit plans. Where the contributions are linked to serv ice, they should be attributed to periods of serv ice as a negativ e benefit. These amendments clarify that, if the amount of the contributions is independent of the number of y ears of serv ice, an entity is permitted to recognise such contributions as a reduction in the serv ice cost in the period in which the serv ice is rendered, instead of allocating the contributions to the periods of serv ice. This amendment is effectiv e for annual periods beginning on or after 1 July This amendment is not relev ant to the Group, since none of the entities within the Group has defined benefit plans with contributions from employ ees or third parties. Annual Im prov em ents Cy cle With the ex ception of the improv ement relating to IFRS 2 Sharebased Payment applied to sharebased pay ment transactions with a grant date on or after 1 July 201 4, all other improv ements are effectiv e for accounting periods beginning on or after 1 July The Group has applied these improv ements for the first time in these consolidated financial statements. They include: 5 Page

8 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) 1.2 Changes in accounting policy and disclosures (continued) IFRS 2 Sharebased Pay m ent This improv ement is applied prospectiv ely and clarifies v arious issues relating to the definitions of performance and serv ice conditions which are v esting conditions. The clarifications are consistent with how the Group has identified any performance and serv ice conditions which are v esting conditions in prev ious periods. In addition, the Group had not granted any awards during the second half of and Thus, these amendments did not impact the Group s financial statements or accounting policies IFRS 3 Business Combinations The amendment is applied prospectiv ely and clarifies that all contingent consideration arrangements classified as liabilities (or assets) arising from a business combination should be subsequently measured at fair v alue through profit or loss whether or not they fall within the scope of IA S 39. This is consistent with the Group s current accounting policy and, thus, this amendment did not impact the Group s accounting policy. IFRS 8 Operating Segm ents The amendments are applied retrospectiv ely and clarify that: A n entity must disclose the judgements made by management in apply ing the aggregation criteria in paragraph 1 2 of IFRS 8, including a brief description of operating segments that hav e been aggregated and the economic characteristics (e.g., sales and gross margins) used to assess whether the segments are similar The reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reported to the chief operating decision maker, similar to the required disclosure for segment liabilities. The Group has not applied the aggregation criteria in IFRS 8.1 The Group has presented the reconciliation of segment assets to total assets in prev ious periods and continues to disclose the same in Note 5 in this period s financial statements as the reconciliation is reported to the chief operating decision maker for the purpose of her decision making. IAS 16 Property, Plant and Equipm ent and IAS 38 Intangible Assets The amendment is applied retrospectiv ely and clarifies in IA S 1 6 and IA S 38 that the asset may be rev alued by reference to observ able data by either adjusting the gross carry ing amount of the asset to market v alue or by determining the market v alue of the carry ing v alue and adjusting the gross carry ing amount proportionately so that the resulting carry ing amount equals the market v alue. In addition, the accumulated depreciation or amortisation is the difference between the gross and carry ing amounts of the asset. This amendment did not hav e any impact to the rev aluation adjustments recorded by the Group during the current period. IAS 24 Related Party Disclosures The amendment is applied retrospectiv ely and clarifies that a management entity (an entity that prov ides key management personnel serv ices) is a related party subject to the related party disclosures. In addition, an entity that uses a management entity is required to disclose the ex penses incurred for management serv ices. The Group has presented in prev ious periods and continues to disclose the same in Note 7 management serv ices pay ment and information on management serv ice agreement in Note 30 in this period s financial statements. 6 Page

9 NOTE TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) 1.2 Changes in accounting policy and disclosures (continued) Annual Improvements Cycle These improvements are effective from 1 July 2014 and the Group has applied these amendments for the first time in these consolidated financial statements. They include: IFRS 3 Business Combinations The amendment is applied prospectively and clarifies for the scope exceptions within IFRS 3 that: Joint arrangements, not just joint ventures, are outside the scope of IFRS 3 This scope exception applies only to the accounting in the financial statements of the joint arrangement itself. UPDC Plc is not a joint arrangement, and thus this amendment is not relevant for the Group and its subsidiaries. IFRS 13 Fair Value Measurement The amendment is applied prospectiv ely and clarifies that the portfolio ex ception in IFRS 1 3 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of IAS 39. The Group does not apply the portfolio ex ception in IFRS 1 3. IAS 40 Investm ent Property The description of ancillary serv ices in IAS 40 differentiates between inv estment property and owneroccupied property (i.e., property, plant and equipment). The amendment is applied prospectiv ely and clarifies that IFRS 3, and not the description of ancillary serv ices in IAS 40, is used to determine if the transaction is the purchase of an asset or a business combination. In prev ious periods, the Group has relied on IFRS 3, not IAS 40, in determining whether an acquisition is of an asset or is a business acquisition. Thus, this amendment did not impact the accounting policy of the Group. IFRIC 21 Lev ies IFRIC 21, Lev ies, sets out the accounting for an obligation to pay a lev y if that liability is within the scope of IAS 37 Prov isions. The interpretation addresses what the obligating ev ent is that giv es rise to pay a lev y and when a liability should be recognised. The group is not currently subjected to significant lev ies so the impact on the group is not material. Sum m ary of significant accounting policies (b) New standards, am endm ents and interpretations not yet adopted A number of new standards and amendments to standards and interpretations are effectiv e for annual periods beginning after 1 January 201 4, and hav e not been applied in preparing these consolidated financial statement. None of these is ex pected to hav e a significant effect on the consolidated financial statements of the Group, ex cept the following set out below: 7 Page

10 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) (b) New standards, am endm ents and interpretations not yet adopted IFRS 9, Financial instruments, addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete v ersion of IFRS 9 was issued in July It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mix ed measurement model and establishes three primary measurement categories for financial assets: amortised cost and fair v alue through OCI. The basis of classification depends on the entity s business model and the contractual cash flow characteristics of the financial asset. Inv estments in equity instruments are required to be measured at fair v alue through profit or loss with the irrev ocable option at inception to present changes in fair v alue in OCI not recy cling. There is now a new ex pected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement ex cept for the recognition of changes in own credit risk in other comprehensiv e income, for liabilities designated at fair v alue through profit or loss. IFRS 9 relax es the requirements for hedge effectiv eness by replacing the bright line hedge effectiv eness tests. It requires an economic relationship between the hedged item and hedging instrument and for the hedged ratio to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effectiv e for accounting periods beginning on or after 1 January Early adoption is permitted. The group is y et to assess IFRS 9 s full impact. IFRS 1 5, Rev enue from contracts with customers deals with rev enue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of rev enue and cash flows arising from an entity s contracts with customers. Rev enue is recognised when a customer obtains control of a good or serv ice and thus has the ability to direct the use and obtain the benefits from the good or serv ice. The standard replaces IAS 1 8 Rev enue and IAS 1 1 Construction contracts and related interpretations. The standard is effectiv e for annual periods beginning on or after 1 January and earlier application is permitted. The group is assessing the impact of IFRS 1 5. IFRS 14 Regulatory Deferral Accounts IFRS 1 4 is an optional standard that allows an entity, whose activ ities are subject to rateregulation, to continue apply ing most of its ex isting accounting policies for regulatory deferral account balances upon its firsttime adoption of IFRS. Entities that adopt IFRS 1 4 must present the regulatory deferral accounts as separate line items on the statement of financial position and present mov ements in these account balances as separate line items in the statement of profit or loss and OCI. The standard requires disclosure of the nature of, and risks associated with, the entity s rateregulation and the effects of that rateregulation on its financial statements. IFRS 1 4 is effectiv e for annual periods beginning on or after 1 January Since the Group is an ex isting IFRS preparer, this standard would not apply. 8 Page

11 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Su m m ary of significant accou nting policies (continu ed) (b) New standards, am endm ents and interpretations not y et adopted A m endm ents to I FRS 11 Joint A rrangem ents: A ccounting for A cquisitions of Interests The amendments to IFRS 1 1 require that a joint operator accounting for the acquisition of an interest in a joint operation, in which the activ ity of the joint operation constitutes a business, must apply the relev ant IFRS 3 principles for business combinations accounting. The amendments also clarify that a prev iously held interest in a joint operation is not remeasured on the acquisition of an additional interest in the same joint operation while joint control is retained. In addition, a scope ex clusion has been added to IFRS 1 1 to specify that the amendments do not apply when the parties sharing joint control, including the reporting entity, are under common control of the same ultimate controlling party. The amendments apply to both the acquisition of the initial interest in a joint operation and the acquisition of any additional interests in the same joint operation and are prospectiv ely effectiv e for annual periods beginning on or after 1 January 201 6, with early adoption permitted. These amendments are not ex pected to hav e any impact on the Group. A m endm ents to I A S 16 and I A S 41 A griculture: Bearer Plants The amendments change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the definition of bearer plants will no longer be within the scope of IA S 41. Instead, IA S 1 6 will apply. A fter initial recognition, bearer plants will be measured under IA S 1 6 at accumulated cost (before maturity ) and using either the cost model or rev aluation model (after maturity ). The amendments also require that produce that grows on bearer plants will remain in the scope of IA S 41 measured at fair v alue less costs to sell. For gov ernment grants related to bearer plants, IA S 20 A ccounting for Gov ernment Grants and Disclosure of Gov ernment A ssistance will apply. The amendments are retrospectiv ely effectiv e for annual periods beginning on or after 1 January 201 6, with early adoption permitted. These amendments are not ex pected to hav e any impact on the Group as the Group does not hav e any bearer plants. A m endm ents to I A S 27 : Equity Meth od in Separate Financial Statem ents The amendments will allow entities to use the equity method to account for inv estments in subsidiaries, joint v entures and associates in their separate financial statements. Entities already apply ing IFRS and electing to change to the equity method in its separate financial statements will hav e to apply that change retrospectiv ely. For firsttime adopters of IFRS electing to use the equity method in its separate financial statements, they will be required to apply this method from the date of transition to IFRS. The amendments are effectiv e for annual periods beginning on or after 1 January 201 6, with early adoption permitted. These amendments will not hav e any impact on the Group s consolidated financial statements. A m endm ents to I FRS 10 and I A S 28: Sale or Contribution of A ssets between an Investor and its A ssociate or Joint Venture The amendments address the conflict between IFRS 1 0 and IA S 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint v enture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an inv estor and its associate or joint v enture, is recognised in full. A ny gain or loss resulting from the sale or contribution of assets that do not constitute a business, howev er, is recognised only to the ex tent of unrelated inv estors interests in the associate or joint v enture. These amendments must be applied prospectiv ely and are effectiv e for annual periods beginning on or after 1 January 201 6, with early adoption permitted. These amendments are not ex pected to hav e any impact on the Group. A nnu al im prov em ents 2012: 2014 cy cle 1 Janu ary 2016 These improv ements are effectiv e for annual periods beginning on or after 1 January They include: 9 Page

12 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) IFRS 5 Noncurrent Assets Held for Sale and Discontinued Operations Assets (or disposal groups) are generally disposed of either through sale or distribution to owners. The amendment clarifies that changing from one of these disposal methods to the other would not be considered a new plan of disposal, rather it is a continuation of the original plan. There is, therefore, no interruption of the application of the requirements in IFRS 5. This amendment must be applied prospectiv ely. IFRS 7 Financial Instrum ents: Disclosures (i) Serv icing contracts The amendment clarifies that a serv icing contract that includes a fee can constitute continuing inv olv ement in a financial asset. An entity must assess the nature of the fee and the arrangement against the guidance for continuing inv olv ement in IFRS 7 in order to assess whether the disclosures are required. The assessment of which serv icing contracts constitute continuing inv olv ement must be done retrospectiv ely. Howev er, the required disclosures would not need to be prov ided for any period beginning before the annual period in which the entity first applies the amendments. (b) New standards, am endm ents and interpretations not yet adopted The amendment clarifies that the offsetting disclosure requirements do not apply to condensed interim financial statements, unless such disclosures prov ide a significant update to the information reported in the most recent annual report. This amendment must be applied retrospectiv ely. IAS 19 Em ployee Benefits The amendment clarifies that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there is no deep market for high quality corporate bonds in that currency, gov ernment bond rates must be used. This amendment must be applied prospectiv ely. IAS 34 Interim Financial Reporting The amendment clarifies that the required interim disclosures must either be in the interim financial statements or incorporated by crossreference between the interim financial statements and wherev er they are included within the interim financial report (e.g., in the management commentary or risk report). The other information within the interim financial report must be av ailable to users on the same terms as the interim financial statements and at the same time. This amendment must be applied retrospectiv ely. These amendments are not ex pected to hav e any impact on the Group. 10 P a g e

13 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT A m endm ents to I A S 1 Disclosu re I nitiative The amendments to IA S 1 Presentation of Financ ial Statements c larify, rather than signific antly c hange, ex isting IA S 1 requirements. The amendments c larify : The materiality requirements in IA S 1 That spec ific line items in the statement(s) of profit or loss and OCI and the statement of financ ial position may be disaggregated That entities hav e flex ibility as to the order in whic h they present the notes to financ ial statements That the share of OCI of assoc iates and joint v entures ac c ounted for using the equity method must be presented in aggregate as a single line item, and c lassified between those items that will or will not be subsequently rec lassified to profit or loss Furthermore, the amendments c larify the requirements that apply when additional subtotals are presented in the statement of financ ial position and the statement(s) of profit or loss and OCI. These amendments are effec tiv e for annual periods beginning on or after 1 January 201 6, with early adoption permitted. These amendments are not ex pec ted to hav e any impac t on the Group. A m endm ents to I FRS 10, I FRS 12 and I A S 28 I nvestm ent Entities: A pply ing th e Consolidation Exception The amendments address issues that hav e arisen in apply ing the inv estment entities ex c eption under IFRS 1 0. The amendments to IFRS 1 0 c larify that the ex emption from presenting c onsolidated financ ial statements applies to a parent entity that is a subsidiary of an inv estment entity, when the inv estment entity measures all of its subsidiaries at fair v alue. Furthermore, the amendments to IFRS 1 0 c larify that only a subsidiary of an inv estment entity that is not an inv estment entity itself and that prov ides support serv ic es to the inv estment entity is c onsolidated. A ll other subsidiaries of an inv estment entity are measured at fair v alue. The amendments to IA S 28 allow the inv estor, when apply ing the equity method, to retain the fair v alue measurement applied by the inv estment entity assoc iate or joint v enture to its interests in subsidiaries. These amendments must be applied retrospec tiv ely and are effec tiv e for annual periods beginning on or after 1 January 201 6, with early adoption permitted. These amendments are not ex pec ted to hav e any impac t on the group. I FRS 16 L eases 1 Janu ary 2019 Effec tiv e for annual periods beginning on or after 1 January Early applic ation is permitted, but not before an entity applies IFRS 1 5. The key features of the amendment are: The new standard requires lessees to ac c ount for all leases under a single on balanc e sheet model (subjec t to c ertain ex emptions) in a similar way to financ e leases under IA S 1 7. Lessees rec ognise a liability to pay rentals with a c orresponding asset, and rec ognise interest ex pense and deprec iation separately. The new standard inc ludes two rec ognition ex emptions for lessees leases of 'low v alue' assets (e.g., personal c omputer) and shortterm leases (i.e., leases with a lease term of 1 2 months or less). Reassessment of c ertain key c onsiderations (e.g., lease term, v ariable rents based on an index or rate, disc ount rate) by the lessee is required upon c ertain ev ents. Lessor ac c ounting is substantially the same as today 's lessor ac c ounting, using IA S 1 7 's dual c lassific ation approac h. The group is still assessing the impac t of this amendment. I A S 12 Taxes: Recognition of Deferred Tax A ssets for Unrealised Losses The amendment c larifies the ac c ounting for deferred tax assets for unrealised losses on debt instruments measured at fair v alue. The amendments c larify : The requirements relating to rec ov ery of an asset for more than its c arry ing amount in a way that enhanc es understanding and reduc es the risk of an arbitrary estimate of probable future tax able profit was rev ised The standard c larify that tax able profit ex c luding tax deduc tions used for assessing the utilization of deduc tible temporary differenc es is different from tax able profit on whic h inc ome tax es are pay able The amendment is effec tiv e for annual periods beginning on or after 1 January The group is still assessing the impac t of this amendment. 11 P a g e

14 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) 2 Consolidation (a) Subsidiaries Subsidiaries are all entities (including structured entities) ov er which the group has control. The group controls an entity when the group is ex posed to, or has rights to,v ariable returns from its inv olv ement with the entity and has the ability to affect those returns through its power ov er the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases. The group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair v alues of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the group. The consideration transferred includes the fair v alue of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair v alues at the acquisition date. The group recognises any noncontrolling interest in the acquiree on an acquisitionby acquisition basis, either at fair v alue or at the noncontrolling interest s proportionate share of the recognised amounts of acquiree s identifiable net assets. A cquisitionrelated costs are ex pensed as incurred. If the business combination is achiev ed in stages, the acquisition date carry ing v alue of the acquirer s prev iously held equity interest in the acquiree is remeasured to fair v alue at the acquisition date; any gains or losses arising from such remeasurement are recognised in profit or loss. A ny contingent consideration to be transferred by the group is recognised at fair v alue at the acquisition date. Subsequent changes to the fair v alue of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IA S 39 either in profit or loss or as a change to other comprehensiv e income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity. The ex cess of the consideration transferred, the amount of any noncontrolling interest in the acquiree and the acquisitiondate fair v alue of any prev ious equity interest in the acquiree ov er the fair v alue of the identifiable net assets acquired is recorded as goodwill. If the total of consideration transferred, noncontrolling interest recognised and prev iously held interest measured is less than the fair v alue of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the income statement. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries hav e been adjusted to conform with the group s accounting policies. (b) Changes in ow nership interests in subsidiaries w ithout change of control Transactions with noncontrolling interests that do not result in loss of control are accounted for as equity transactions that is, as transactions with the owners in their capacity as owners. The difference between fair v alue of any consideration paid and the relev ant share acquired of the carry ing v alue of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to noncontrolling interests are also recorded in equity. (c) Disposal of subsidiaries When the group ceases to hav e control any retained interest in the entity is remeasured to its fair v alue at the date when control is lost, with the change in carry ing amount recognised in profit or loss. The fair v alue is the initial carry ing amount for the purposes of subsequently accounting for the retained interest as an associate, joint v enture or financial asset. In addition, any amounts prev iously recognised in other comprehensiv e income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts prev iously recognised in other comprehensiv e income are reclassified to profit or loss. 12 P a g e

15 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) (d) Associates and joint ventures Associates are all entities ov er which the group has significant influence but not control, generally accompany ing a shareholding of between 20% and 50% of the v oting rights. Inv estments in associates are accounted for using the equity method of accounting. Under the equity method, the inv estment is initially recognised at cost, and the carry ing amount is increased or decreased to recognise the inv estor s share of the profit or loss of the inv estee after the date of acquisition. The group s inv estment in associates includes goodwill identified on acquisition. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts prev iously recognised in other comprehensiv e income is reclassified to profit or loss where appropriate. The group s share of postacquisition profit or loss is recognised in profit or loss, and its share of postacquisition mov ements in other comprehensiv e income is recognised in other comprehensiv e income with a corresponding adjustment to the carry ing amount of the inv estment. When the group s share of losses in an associate equals or ex ceeds its interest in the associate, including any other unsecured receiv ables, the group does not recognise further losses, unless it has incurred legal or constructiv e obligations or made pay ments on behalf of the associate. The group determines at each reporting date whether there is any objectiv e ev idence that the inv estment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recov erable amount of the associate and its carry ing v alue and recognises the amount adjacent to share of profit/ (loss) of an associate in the income statement. Profits and losses resulting from upstream and downstream transactions between the group and its associate are recognised in the group s financial statements only to the ex tent of unrelated inv estor s interests in the associates. Unrealised losses are eliminated unless the transaction prov ides ev idence of an impairment of the asset transferred. Accounting policies of associates hav e been changed where necessary to ensure consistency with the policies adopted by the group. Dilution gains and losses arising in inv estments in associates are recognised in the income statement. (e) Joint arrangements The group has applied IFRS 1 1 to all joint arrangements as of 1 January Under IFRS 1 1 inv estments in joint arrangements are classified as either joint operations or joint v entures depending on the contractual rights and obligations each inv estor. IFRS GAAP plc has assessed the nature of its joint arrangements and determined them to be joint v entures. Joint v entures are accounted for using the equity method. Under the equity method of accounting, interests in joint v entures are initially recognised at cost and adjusted thereafter to recognise the group s share of the postacquisition profits or losses and mov ements in other comprehensiv e income. When the group s share of losses in a joint v enture equals or ex ceeds its interests in the joint v entures (which includes any longterm interests that, in substance, form part of the group s net inv estment in the joint v entures), the group does not recognise further losses, unless it has incurred obligations or made pay ments on behalf of the joint v entures. Unrealised gains on transactions between the group and its joint v entures are eliminated to the ex tent of the group s interest in the joint v entures. Unrealised losses are also eliminated unless the transaction prov ides ev idence of an impairment of the asset transferred. Accounting policies of the joint v entures hav e been changed where necessary to ensure consistency with the policies adopted by the group. 13 P a g e

16 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) 3 Segm ent reporting Operating segments are reported in a manner consistent with the internal reporting prov ided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Ex ecutiv e Committee that makes strategic decisions. 4 Foreign currency translation (a) Functional and presentation currency Items included in the financial statements of each of the group's entities are measured using the currency of the primary economic env ironment in which the entity operates ('the functional currency '). The consolidated financial statements are presented in Naira (N), which is the group's presentation currency. (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the ex change rates prev ailing at the dates of the transactions or v aluations where items are remeasured. Foreign ex change gains and losses resulting from the settlement of such transactions and from the translation at y earend ex change rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign ex change gains and losses that relate to borrowings and cash and cash equiv alents are presented in profit or loss within 'finance income or cost'. Changes in the fair v alue of monetary securities denominated in foreign currency classified as av ailable for sale are analy sed between translation differences resulting from changes in the amortised cost of the security and other changes in the carry ing amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carry ing amount are recognised in other comprehensiv e income. Translation differences on nonmonetary financial assets and liabilities such as equities held at fair v alue through profit or loss are recognised in profit or loss as part of the fair v alue gain or loss. Translation differences on nonmonetary financial assets, such as equities classified as av ailable for sale, are included in other comprehensiv e income. (c) Group companies The results and financial position of all the group entities (none of which has the currency of a hy perinflationary economy ) that hav e a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; (b) income and ex penses for each income statement are translated at av erage ex change rates (unless this av erage is not a reasonable approx imation of the cumulativ e effect of the rates prev ailing on the transaction dates, in which case income and ex penses are translated at the rate on the dates of the transactions); and (c) all resulting ex change differences are recognised in other comprehensiv e income. 14 P a g e

17 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies continued 5 Property, plant and equipm ent Property, plant and equipment are recorded at cost less accumulated depreciation and impairment. Land and buildings comprise mainly of retail outlets and offices as well as hotel rooms. Land and buildings held for use in the production or supply of goods or serv ices, or for administration purposes, are stated at fair v alue. All other assets are stated at historical cost less accumulated depreciation and accumulated impairment losses. Land is not depreciated. Leasehold properties are depreciated ov er their useful liv es, unless the lease period is shorter, in which case the lease period is used. Depreciation on other assets is calculated using the straight line method to allocate their cost or rev alued amounts to their residual v alues ov er their estimated useful liv es, as follows: Property, plant and equipment are depreciated on a straight line basis ov er the current useful liv es of the assets. The estimated useful liv es of the assets are: Leasehold buildings Heav y industrial plant Furniture and office Equipment Light industrial plant Heav y v ehicles Light v ehicles Computer equipment Lease terms v ary from 5 to 99 y ears 5 to 1 0 y ears 3 to 5 y ears 2 to 5 y ears 7 to 1 0 y ears 4 to 6 y ears 3 to 5 y ears The useful liv es and residual v alues are reassesed at the end of each reporting period and adjusted if necessary. The depreciation on property, plant and equipment is recognised in profit or loss in the y ear in which it occurred. The gain or loss on property, plant and equipment is determined by subtracting the carry ing v alue from the net disposal proceeds on date of sale. The gain or loss on sale of property, plant and equipment is recognised in the statement of comprehensiv e income and is not classified as rev enue. Subsequent ex penditure relating to an item of equipment is capitalised when it is probable that future economic benefits will flow to the entity and the cost can be measured reliably. All other subsequent ex penditure is recognised as an ex pense in the period in which it incurred. 6 Intangible assets Goodwill impairment rev iews are undertaken annually or more frequently if ev ents or changes in circumstances indicate a potential impairment. The carry ing v alue of the CGU containing the goodwill is compared to the recov erable amount, which is the higher of v alue in use and the fair v alue less costs of disposal. Any impairment is recognised immediately as an ex pense and is not subsequently rev ersed. 15 P a g e

18 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) (b) Computer softw are Costs associated with maintaining computer software programmes are recognised as an ex pense as incurred. Dev elopment costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recogniesd as intangible assets when the following criteria are met: it is technically feasible to complete the software product so that it will be av ailable for use; management intends to complete the software product and use or sell it; there is an ability to use or sell the software product; it can be demonstrated how the software product will generate probable future economic benefits; adequate technical, financial and other resources to complete the dev elopment and to use or sell the software product are av ailable; and the ex penditure attributable to the software product during its dev elopment can be reliably measured Directly attributable costs that are capitalised as part of the software product include the software dev elopment employ ee costs and an appropriate portion of relev ant ov erheads. Other dev elopment ex penditures that do not meet these criteria are recognised as an ex pense as incurred. Dev elopment costs prev iously recognised as an ex pense are not recognised as an asset in a subsequent period. Computer software dev elopment costs recognised as assets are amortised ov er their estimated useful liv es, which does not ex ceed fiv e y ears. 7 Inv estm ent properties Properties that are held for longterm rental y ields or for capital appreciation or both, and that are not occupied by the entities in the consolidated group, are classified as inv estment properties. Inv estment properties comprise mainly of commercial projects constructed and acquired with the aim of leasing out to tenants. Inv estment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. After initial recognition, inv estment property is carried at fair v alue. Fair v alue is based on activ e market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not av ailable, the Group uses alternativ e v aluation methods, such as recent prices on less activ e markets or discounted cash flow projections. V aluations are performed as of the financial position date by professional v aluers who hold recognised and relev ant professional qualifications and hav e recent ex perience in the location and category of the inv estment property being v alued. These v aluations form the basis for the carry ing amounts in the financial statements. Inv estment property that is being redev eloped for continuing use as inv estment property or for which the market has become less activ e continues to be measured at fair v alue. The group makes use of internal and ex ternal v aluation ex perts. Each property is v alued by an ex ternal v aluater at least ev ery three y ears. The fair v alue of inv estment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. 16 P a g e

19 NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT Sum m ary of significant accounting policies (continued) 7 Inv estm ent properties (continued) The fair v alue also reflects, on a similar basis, any cash outflows that could be ex pected in respect of the property. Some of those outflows are recognised as a liability, including finance lease liabilities in respect of leasehold land classified as inv estment property ; others, including contingent rent pay ments, are not recognised in the financial statements. Subsequent ex penditure is capitalised to the asset s carry ing amount only when it is probable that future economic benefits associated with the ex penditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are ex pensed when incurred. When part of an inv estment property is replaced, the carry ing amount of the replaced part is derecognised. The fair v alue of inv estment property does not reflect future capital ex penditure that will improv e or enhance the property and does not reflect the related future benefits from this future ex penditure other than those a rational market participant would take into account when determining the v alue of the property. Changes in fair v alues are recognised in profit or loss. Inv estment properties are derecognised when they hav e been disposed. If an inv estment property becomes owneroccupied, it is reclassified as property, plant and equipment. Its fair v alue at the date of reclassification becomes its cost for subsequent accounting purposes. If an item of owneroccupied property becomes an inv estment property because its use has changed, any difference resulting between the carry ing amount and the fair v alue of this item at the date of transfer is treated in the same way as a rev aluation under IAS 1 6. Any resulting increase in the carry ing amount of the property is recognised in profit or loss to the ex tent that it rev erses a prev ious impairment loss, with any remaining increase recognised in other comprehensiv e income and increase directly to equity in rev aluation surplus within equity. Any resulting decrease in the carry ing amount of the property is initially charged in other comprehensiv e income against any prev iously recognised rev aluation surplus, with any remaining decrease charged to profit or loss. Where an inv estment property undergoes a change in use, ev idenced by commencement of dev elopment with a v iew to sale, the property is transferred to inv entories. A property s deemed cost for subsequent accounting as inv entories is its fair v alue at the date of change in use. Leasehold inv estment properties represent properties acquired under gov ernment consent for 99 y ears. 8 Im pairm ent of nonfinancial assets The carry ing v alue of assets is rev iewed for impairment at each reporting date. Assets are impaired when ev ents or changes in circumstances indicate that their carry ing v alue may not be recov erable. If such indication ex ists and where carry ing v alues ex ceed the estimated recov erable amount, the assets are written down to their recov erable amount. Recov erable amounts are determined as the higher of fair v alue less costs to sell or v alue in use. Impairment losses and the rev ersal of impairment losses are recognised in the statement of comprehensiv e income. An impairment loss is rev ersed only to the ex tent that the asset's carry ing amount does not ex ceed the carry ing amount that would hav e been determined, net of depreciation or amortisation, if no impairment loss has been recognised. 17 P a g e