FTN COCOA PROCESSORS PLC REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2009 WITH MANAGEMENT SCHEDULES

Transcription

1 FTN COCOA PROCESSORS PLC REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2009 WITH MANAGEMENT SCHEDULES

2 FTN COCOA PROCESSORS PLC REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2009 CONTENTS PAGE Corporate information 1 Results at a glance 2 Report of the directors 3 Auditors report 8 Report of the audit committee 9 Statement of accounting policies 10 Balance sheet 13 Profit and loss account 14 Statement of cash flows 15 Notes to the financial statements 16 Statement of value added 23 Five-year financial summary 24

3 - Page 1 - FTN COCOA PROCESSORS PLC CORPORATE INFORMATION Directors: Chief O Osunkeye, OON - Chairman Mr. A. A. Aderonmu - Managing Mr. Akin Laoye - Executive Sir (Chief) S. O. Oguntimehin, OON Mr. O. A. Balogun Mr. O. Abegunde M. P. Nwalozie - (appointed w.e.f. 3 May, 2010) Company Secretaries: Alpha-Genasec Limited, Kresta Laurel Complex, 376, Ikorodu Road, Maryland, Lagos. Tel Registered office: Plot 5, Block 77, Basheer Shittu Avenue, Magodo, GRA, Lagos. Tel Website: inof@ftn-cocoa.com Registration number: RC Factory Address: Auditors: Registrars: Bankers: Km 9, Monatan- Iwo Road, Opposite Arcedem Wofun Olodo, Ibadan, Oyo State. Tel Baker Tilly Nigeria, (Chartered Accountants), Kresta Laurel Complex (4th Floor), 376, Ikorodu Road, Maryland, Lagos. Tel Meristem Registrar, 213, Herbert Macaulay Street, Yaba, Lagos. Sterling Bank PLc Diamond Bank Plc Ecobank Plc Guaranty Trust Bank Plc Bank PHB Plc Equitorial Trust Bank Plc

4 - Page 2 - FTN COCOA PROCESSORS PLC RESULTS AT A GLANCE For the year % N 000 N 000 Increase/ (decrease) Turnover 1,361, , Profit before taxation 259, ,350 (8) Company taxation 51 25,540 (99.8) Deferred taxation - 60,783 (100) Profit after taxation 259, , Earnings per share 11.80k 8.91k Dividend paid (per share) 3.5k 3.5k At year end Investments ,222 (99.5) Share capital 1,100,000 1,100,000 - Shareholders fund 2,389,265 2,481,337 (4) Number Number Number of employees ====== ====

5 - Page 3 - FTN COCOA PROCESSORS PLC REPORT OF THE DIRECTORS 1. The directors hereby submit their report and the financial statements of the company for the year ended 31 December Review of operating performance N 000 Profit before taxation 259,710 Company taxation (51) Deferred taxation - Profit after taxation 259, Legal form ======= FTN Cocoa Processors Plc started as Fantastic Abiola Nigeria Limited, a private Company limited by shares which was incorporated on 26 August, The name Fantastic Abiola Nigeria Limited was changed to Fantastic Traders Nigeria Limited on 26 August, 1998 and subsequently changed to FTN Cocoa Processors Limited on 3 December, The status of the company was changed to FTN Cocoa Processors Plc on 29 February, 2008 and the shares of the company were listed on the Nigerian Stock Exchange on 24 July, Principal activities The principal activities of the company are the processing of cocoa beans and palm kernel into Cocoa Cake, Liquor, Butter, Powder, Palm Kernel oil and Palm Kernel cake. Cocoa Cake, Liquor and butter are exported while Cocoa powder, Palm Kernel oil and Palm Kernel cakes are marketed locally to manufacturing companies. 5. Directors The names of the directors of the company are as stated on page 1 of these reports and financial statements. 6. Directors interests (i) The interest of the directors in the issued share capital of the company are as follows:- Shareholdings as at 7/5/ /12/ /12/2008 Chief Olusegun Osunkeye, OON 22,000,000 22,000,000 22,000,000 Mr. A. A. Aderonmu 551,900, ,900, ,900,000 Mr. Akin Laoye 165,000, ,000, ,000,000 Mr. Soji Balogun 41,030,000 41,030,000 41,030,000 Sir (Chief) S. O. Oguntimehin, OON 100, ,000 - Mr. Wole Abegunde (Indirect holding through Meristem) 114,669, ,669, ,315,200 Securities Limited Mr. P. Nwalozie- direct 10,000,000 10,000,000 10,000,000 Indirect 126,335, ,335, ,335,996

6 - Page 4 (ii) None of the directors has notified the company for the purpose of Section 277 of the Companies and Allied Matters Act, Cap C20 LFN 2004 to the effect that he had interest in any contract with which the company was involved during the year under review. 7. Substantial interest in shares According to the Registrar of Members the following persons held more than 5% of the issued share capital of the company on 31 December, 2009: Shareholders Number of shares Percentage Mr. A. A.Aderonmu 551,900, Mr. Akin Laoye 165,000, Mr. Wole Abegunde (indirect) 114,669, Mr. Peter Nwalozie (direct/indirect) 136,335, Directors responsibility In accordance with the provisions of Sections 334 and 335 of the Companies and Allied Matters Act Cap C20 LFN 2004, the directors of the company are responsible for the preparation of financial statements which give a true and fair view of the state of affairs of the company at the end of each financial year, and of the profit or loss for that year, and comply with the provisions of the Companies and Allied Matters Act, Cap C20 LFN In doing so, they ensure that:- - proper accounting records are maintained; - applicable accounting standards are followed; - suitable accounting policies are adopted and consistently applied; - the going concern basis is used, unless it is inappropriate to presume that the company will continue in business; and - adequate internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets and prevent and detect fraud and other irregularities. 9. Analysis of shareholding as at 31 December, 2009 Range No. of Holders % Holders Cum. Units Unit % Units Cum. holders 1-10,000 2, ,152 9,964, ,964,180 10,001-50,000 1, ,621 37,011, ,975,656 50, , ,999 29,273, ,249, , , , ,534, ,783, ,001-1,000, ,762 61,018, ,802,242 1,000,001-10,000, , ,126, ,929,117 10,000,001-2,200,000, ,929 1,613,070, ,200,000,000 4, ,200,000, ===== ===== ========== ======

7 10. The share capital history i) Authorised Initial share capital N5,000, : Increased to N1,000,000, : Increased to N1,100,000,000 - Page 5 ii)issued share capital 1991 : N10, : increased to N5,000, : increased to N1,000,000, : increased to N1,100,000, Fixed assets Movements in fixed assets during the year are shown in Note 1 to the financial statements on page 16. In the opinion of the directors, the market value of the company s fixed assets is not lower than the value shown in the financial statements. 12. Dividend The directors recommend the payment of a dividend of N77 million (2008 N77 million) which is equivalent to 3.5 kobo per share. The dividend is subject to the deduction of appropriate withholding tax at the time of payment. 13. Personnel (i) Employment of disabled persons: The company does not discriminate in considering applications for employment including those from disabled persons. All employees are given equal opportunities to develop their knowledge and skills within the organisation. As at 31 December 2009 there were, however, no disabled persons in the company s employment. (ii) Employee s involvement and training: The company is committed to keeping employees fully informed as far as possible regarding its performance and progress and seeking their views wherever practicable on matters, which particularly affect them as employees. The company provides a range of training from time to time with potential broadening opportunities for employees career development within the organisation. (iii) Staff welfare and safety at work: The company places high premium on its human resources and there is existing provision for lunch, rent and transport allowances. The company conducts its activities in a way to take foremost account of the safety of its employees and other persons.

8 - Page Audit Committee In accordance with Section 359(3) of the Companies and Allied Matters Act, Cap C20 LFN 2004, the Audit Committee members of the company elected at the last Annual General Meeting are as follows: - Wale Jubril Simide Sanusi Olusoji Balogun Oluwole Abegunde The functions of the audit committee are as stated in Section 359(6) of the Companies and Allied Matters Act, Cap C20 LFN Board committee meetings The Board of Directors ensured that the company s objectives were implemented through the committees constituted as stated below: - Audit committee The committee met twice during the year under review. Membership and attendance at meetings during the year were as follows: - Names Designation Number of Number of meetings held meetings attended Wale Jubril Chairman 2 2 Simide Sanusi Member 2 2 Olusoji Balogun Member 2 2 Oluwole Abegunde Member Compliance with the code of corporate governance The Directors confirm that they manage the affairs of the company in accordance with the provisions of the code of best practices on corporate governance in Nigeria with regards to matters stated concerning the Board of Directors, the Shareholders and the Audit Committee. Board meetings are scheduled well in advance. Also the agenda of Board meetings and reports on full business review, full report from the various Board Committees and reports from the Audit Committee are circularized to all Directors. The Board met 4 times during the year under review.

9 - Page 7 The Board Committees as constituted during the year are as follows: - i) Finance and Corporate Governance Committee. The committee met four times in the year under review. meetings during the year were as follows: - Membership and attendance at Names Designation Number of Number of meetings held meetings Attended Chief Olusegun Osunkeye Chairman 4 4 Mr. Abiola A. Aderonmu Member 4 4 Mr. Akin Laaoye Member 4 4 Mr. Amin A. Amzat Member 4 4 ii) Annual General Meeting Committee The committee met four times in the year under review. meetings during the year were as follows: - Membership and attendance at Names Designation Number of Number of meetings held meetings attended Mr. Amin A. Amzat Chairman 4 4 Mr. P. O. Afolabi Member 4 4 Mr. David Kalu Member 4 4 Management team The day to day management of the business is the responsibility of the managing director and the executive director who are assisted by a management team made up of heads of all the departments in the company. The management team holds scheduled meetings weekly to deliberate on critical issues affecting the day to day running of the company. 17. Auditors Messrs Baker Tilly Nigeria, (Chartered Accountants), have indicated their willingness to continue as auditors in accordance with Section 357(2) of the Companies and Allied Matters Act, Cap C20 LFN A resolution will be proposed to authorise the directors to fix their remuneration. By order of the Board LAGOS, Nigeria 7 May, 2010 Alpha-Genasec Limited Company Secretaries

10 - Page 8 - AUDITORS' REPORT TO THE MEMBERS OF FTN COCOA PROCESSORS PLC We have audited the financial statements set out on pages 13 to 24 which have been prepared under the accounting policies set out on pages 10 to 12. Respective responsibilities of directors and auditors As stated on page 4, the company s directors are responsible for the preparation of the financial statements. It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you. Basis of opinion We conducted our audit in accordance with generally accepted auditing standards. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material mis-statement. In forming our opinion, we also evaluated the overall adequacy of the presentation of the information in the financial statements. We have obtained all the information and explanations we considered necessary for the purpose of our audit. Proper books of account have been kept by the company and the financial statements are in agreement with the books of account. Opinion In our opinion and to the best of our information and the explanations given to us, the financial statements together with the relevant notes 1 to 19 give a true and fair view of the state of affairs of the company as at 31 December, 2009 and of the profit and cash flow for the year then ended and have been properly prepared in accordance with the Companies and Allied Matters Act, Cap C20 LFN LAGOS, Nigeria 7 May, 2010 (CHARTERED ACCOUNTANTS)

11 - Page 9 - FTN COCOA PROCESSORS PLC REPORT OF THE AUDIT COMMITTEE In compliance with the provision of Section 359(6) of the Companies and Allied Matters Act, Cap C20 LFN 2004, we have: - a) reviewed the scope and planning of the audit requirements; b) reviewed the External Auditors Report to Management on the audit of the financial statements for the year ended 31 December, 2009 as well as the management responses thereto; and c) ascertained that the accounting and reporting policies of the company for the year ended 31 December, 2009 are in accordance with legal and agreed ethical practices. In our opinion, the scope and planning of the audit for the year ended 31 December, 2009 were adequate and we are satisfied with the management responses to the auditors findings. Dated this 30 April, 2010 Wale Jubril Chairman, Audit Committee Other members of the committee: Simide Sanusi Olusoji Balogun Oluwole Abegunde

12 - Page 10 - FTN COCOA PROCESSORS PLC STATEMENT OF ACCOUNTING POLICIES The following are the main accounting policies adopted by the company in the preparation of its financial statements: 1. Basis of accounting The financial statements are prepared on the basis of historical cost convention. 2. Turnover Turnover represents the gross value of goods exported and local sales to third parties during the year. 3. Stocks and work-in-progress Stocks and work-in-progress are valued at the lower of cost and net realizable value while goods in transit are stated at the invoice price. Cost of stocks includes purchases costs, conversion cost (materials, labour and overhead) and other costs incurred. 4. Fixed assets Fixed assets are stated at cost or valuation less accumulated depreciation. 5. Depreciation Depreciation is provided on a straight line basis to write-off the fixed assets at the end of their estimated useful lives at the following rates per annum - Plant & machinery 10% Motor vehicles 20% Office equipment 10% Furniture & fittings 10% Building 2% Land Nil 6. Investments Investments are stated at cost. Provisions are made for diminution in value of investments when they are below cost with the exception of value of government securities as it is usual for the company to hold them till maturity. Where a sale is made in any financial year, the gain or loss is taken to the profit and loss account. 7. Debtors Debtors are stated after deduction of adequate provisions for any debts considered bad or doubtful of recovery.

13 8. Foreign currencies transactions - Page 11 - Transactions in foreign currencies are translated to Naira at the appropriate rates of exchange ruling at the time they arise. Foreign currency balances are converted to Naira at the rate ruling on the balance sheet date. Gains or losses on such transactions are dealt with in the profit and loss account for the year. 9. Employees retirement benefits A pension scheme is in place for the benefit of the company s employees as required by Pension Reforms Act The company contributes 15% of the employees basic salary, housing and transport allowances. The pension costs are charged to the profit and loss account. 10. Dividend distribution In accordance with SAS 23, dividend distribution to the company s shareholders is recognized as a liability in the company s financial statements in the period in which the dividend is approved by the company s shareholders. 11. Income tax Income tax expense is the aggregate charge to profit and loss account in respect of company income tax, education tax, capital gain tax and deferred tax. Current income tax is the expected amount of income tax payable on taxable profits determined in accordance with the Companies Income Tax Act (CITA) using the statutory rates at balance sheet date. Education levy is assessed at 2% of the chargeable profit while capital gains tax is assessed at 10% of the capital gain. 12. Deferred taxation Provision for deferred taxation is made by the liability method and calculated at the current rate of taxation on the differences between the net book values of the fixed assets qualifying for capital allowances and their corresponding tax written down values. 13. Cash and cash equivalent For the purpose of reporting cash flows, cash and cash equivalents include cash in hand, cash balances and short term deposits with banks. 14. Provisions A provision is recognized only 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. 15. Export expansion grant The export expansion grant of 30% of total export per period by the Nigerian Export Promotion Council is recognized as an income in the period in which the export is made.

14 - Page Segment reporting A segment is a distinguishable component of the company that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of other segments. Segment information is required to be presented in respect of the company s business and geographical segments, where applicable. The company s primary format for segment reporting is based on business segments. The business segments are determined by management based on the company s internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. This is based on Statement of Accounting Standard (SAS) 24 and the effect of this adoption is shown in note 13 on page 18 of the financial statements. 17. Comparative Where necessary, comparative figures are adjusted to conform with changes in presentation in the current year in accordance with the Statement of Accounting Standard (SAS 2). 18. Research and development expenditure Expenditure incurred on research is charged against revenue in the year in which it is incurred. Development costs are amortised in five equal annual installments beginning from the year of completion of the related party. 19. Exchange equalization reserve The Convertible Bond is revalued at the year end to reflect the correct Naira value. Exchange fluctuation gains or losses arising from such revaluation is recorded in Exchange equalization reserve account.

15 FTN COCOA PROCESSORS PLC BALANCE SHEET AS AT 31 DECEMBER, Page 13 - Note N 000 N 000 Fixed assets: 1 1,946,798 2,046,325 Investments ,222 Current assets Stocks 3 625, ,211 Debtors and prepayments 4 862, ,733 Cash and bank balances 46, ,554 1,533, , Less: Current liabilities: Creditors and accruals 5 195,436 91,721 Current taxation 6 34,685 34, , , Net current assets 1,303, ,092 3,251,298 3,068,639 Non-current liabilities Deferred taxation 7 60,783 60,783 Corporate Bond 8 801, , (862,033) (587,302) Total net assets 2,389,265 2,481,337 ======= ======== Financed by: Share capital 9 1,100,000 1,100,000 Share premium 10 1,091,420 1,091,420 Exchange equalization reserve 11 (274,731) - Revenue reserve , ,917 Shareholders fund 2,389,265 2,481,337 ======== ======== The financial statements were approved by the Board of Directors on 7 May, 2010 and signed on its behalf by Chief O. O. Osunkeye Chairman Managing Director Mr. A. A. Aderonmu The accounting policies on pages 10 to 12 and the notes on pages 16 to 22 form part of these financial statements.

16 - Page 14 - FTN COCOA PROCESSORS PLC PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER, 2009 Note N 000 N 000 Turnover 13 1,361, ,258 Cost of sales (1,146,280) (685,394) Gross profit 215, ,864 Administrative expenses, etc (202,836) (203,270) Operating profit 12,374 80,594 Other income , , , ,350 Interest on Corporate Bond (35,055) - Profit before taxation , ,350 Current taxation 6 (51) (25,540) Deferred tax 7 - (60,783) Profit after taxation , ,027 ====== ====== Earnings per share (adjusted) 11.80k 8.91k ====== ======= The accounting policies on pages 10 to 12 and the notes on pages 16 to 22 form part of these financial statements.

17 FTN COCOA PROCESSORS PLC - Page 15 - STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER, 2009 Cash flow from operating activities - Note N 000 N 000 Operating profit before working capital changes , ,876 Working capital changes 16.2 (538,794) (437,880) Net cash outflow from operating activities (112,172) (19,004) Cash flow from financing activities Exchange equalization reserve (274,731) - Share issue expense/received - (47,892) Revaluation/Corporate Bond obtained 274, ,519 Dividend paid (77,000) (50,000) (77,000) 428, Cash flow from investing activities: Purchase of fixed assets (71,670) (537,476) Investments 169,349 (172,584) 97,679 (710,060) ====== ======= Net(decrease)/increase in cash and cash equivalent (91,493) (300,437) Cash and cash equivalent at the beginning of the year 137, ,991 Cash and cash equivalent at the end of the year 46, ,554 Represented by: ====== ======= Cash and bank balances , ,554 ====== =======

18 1. Fixed assets FTN COCOA PROCESSORS PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER Page 16 - Plant & Machinery under Plant & Motor Furniture & Office Land & construction machinery vehicles fittings equipment building Total Cost N 000 N 000 N 000 N 000 N 000 N 000 N 000 At 1 Jan., ,373 1,066,281 62,786 17,264 14, ,277 2,285,192 Additions - 56,581-1,566 3,207 10,316 71,670 Reclassification (250,373) 250, At 31 Dec, ,373,235 62,786 18,830 17, ,593 2,356,862 ====== ======= ===== ===== ===== ====== ======= Depreciation: At 1 Jan., ,199 37,428 2,859 3,154 36, ,867 Charge for the year - 137,323 12,558 1,883 1,741 17, ,197 At 31 Dec, ,522 49,986 4,742 4,895 53, ,064 Net book value: At 31 Dec, ,076,713 12,800 14,088 12, ,674 1,946,798 ====== ====== ===== ===== ===== ====== ====== At 31 Dec, , ,082 25,358 14,405 11, ,050 2,046,325 ====== ====== ===== ===== ===== ====== ======= 2. Investments N 000 N 000 Quoted investment 2,759 59,386 (Market value N362,551) Provision for diminution in value (2,397) (8,362) ,024 Unquoted investment Fixed deposits - 112, ,222 ===== ====== The effect of the Global financial meltdown on the Nigerian Stock exchange resulted in a fall in the value of the company s investments in quoted shares as a result of which a provision of N8.362 million was made in the financial statements for the year ended 31 December, As at 31 December, 2009, the situation in the stock exchange had improved such that the Company s investments had gained value by N5.965 million which has been written back in these financial statements. 3. Stocks Finished goods 267, ,213 Raw materials 70,296 10,776 Spare parts 236, ,789 WIP 17,955 39,718 Factory consumable in transit 33,545 39, , ,211 ====== ======

19 - Page Debtors and prepayments N 000 N 000 Trade debtors 394, ,762 Debtor Export Expansion Grant 467, ,097 Deposit and prepayments 1,060 20,095 Other debtors 1,263 2, , ,733 Less: Provision for bad debt (1,731) - 862, ,733 ======= ======= The company has fulfilled the relevant conditions necessary for entitlement to the Export Expansion Grant and relevant application has been made to the Nigerian Export Promotion Council. 5. Creditors a) Amount falling due within one year Trade creditors 111,498 76,305 Accrued expenses 45,559 8,368 Other creditors 38,379 7, ,436 91,721 ======= ======= 6. Taxation 6.1 Profit and loss account Company tax - 20,950 Education tax - 4,257 Withholding tax on dividend ,540 ====== ===== The company is not liable to tax with the approval of Pioneer Status for the company by Nigerian Investment Promotion Commission with effect from 1 January, Balance sheet At 1 January 34,685 9,478 Charge for the year 51 25,540 34,736 35,018 Withholding tax receivable (51) (333) At 31 December 34,685 34,685 ====== =====

20 - Page Deferred taxation N 000 N 000 At 1 January 60,783 - Charge for the year - 60,783 At 31 December 60,783 60,783 ====== ===== 8. Corporate Bond Convertible bond 801, ,519 ====== ====== The convertible bond of JPY 500 million has been converted into Naira at the ruling exchange rate on 31 December, It is expected to be partly or fully repaid in However, there is the option of converting the bond into ordinary shares at a floor rate of N1.70 per share. Other details of this loan are as follows: - Amount offered: JPY 500m Facility type: Bond with options Options put: Repayment of part or full at a future date Call: Conversion of bond into ordinary shares at a floor rate of N1.70k Tenor: 18 years Put tenor: 30 months, 42 months Yield (interest) 4.375% Yield to maturity: 4.375% Collateral: No collateral required 9. Share capital Authorised, issued and paid up N 000 N 000 2,200,000,000 ordinary shares of 50k each 1,100,000 1,100,000 ======= =======

21 - Page 19 - N 000 N Share premium 1,091,420 1,239,312 Bonus issue - (100,000) Issuing expenses - (47,892) 1,091,420 1,091,420 ======= ======= 11. Exchange equalization reserve (274,731) - ======= ======= This amount represents potential exchange loss that may arise from the conversion of long term Corporate Bond in accordance with Statement of Accounting Standards (SAS 7). 12. Revenue reserve At 1 January 289, ,890 Dividend paid (77,000) (50,000) 212,917 93,890 Profit and loss account 259, ,027 At 31 December 472, , Turnover ====== ======= Export sales: Cocoa butter 609, ,083 Cocoa cake 104,631 87,438 Cocoa liquor 1, , , Local sales: Cocoa Beans 268,380 - Cocoa powder 244, ,484 Palm kernel oil 123,549 70,469 Palm kernel cake 9,247 4, , , ,361, ,258 ======= =======

22 14. Other income - Page 20 - N 000 N 000 Interest income 6,034 16,228 Investment income 18,718 1,360 Exchange gain 63,101 3,734 Waste Bad debt recovered 1,496 - Export expansion grant 192, , Profit before tax The profit before tax is arrived at: - After charging 282, ,756 ====== ======= Directors emolument 19,668 15,057 Audit fee 1,200 1,070 Depreciation 171, ,497 ====== ====== 16. Cash flow reconciliations.1 Operating profit before working capital changes Profit after tax 259, ,018 Add back Taxation expenses 51 86,332 Operating profit 259, ,350 Tax paid (withholding tax claimed) (51) (333) 259, ,017 Adjustment for items not involving the movement of cash Provision for bad debts 1,731 - (Recovery)/provision for diminution in value of shares (5,965) 8,362 Depreciation 171, , , ,876 ====== ======

23 - Page Working capital changes N 000 N 000 (Increase)/decrease in stock (194,230) (127,746) (Increase)/decrease in debtors & prepayments (448,279) (264,334) (Decrease)/increase in creditors and accrued expenses 103,715 (45,800).3 Reconciliation of cash & cash equivalent (538,794) (437,880) ======= ======== Cash comprises cash on hand and in banks. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows: - N 000 N 000 Cash and bank balances 46, ,554 ====== ====== 17. Emoluments of directors and employees (i) Directors - a) The aggregate emoluments of the directors were - Fees 1,300 1,300 Other emoluments 16,505 12,857 17,805 14,157 ====== ===== b) The emoluments of the Chairman amounted to ====== ===== (ii) The highest paid director earned 11,772 7,560 ====== ======

24 - Page 22 (ii) Staff number and cost a) Average number of persons employed (excluding directors) by the company during the period were: Number Number Management staff 6 11 Senior staff Junior staff ===== ===== b) Employees cost during the year amount to Wages and salaries 63,564 48,925 Staff welfare and medical expenses 2,117 2,026 65,681 50,951 ====== ====== (iii) The number of employees in receipt of emoluments within the following ranges were: - Below N150, N150,001 - N240, N241,001 - N480, N481,000 - N720, N721,000 - N960, N961,000 - N1,200, N1,200,000 and above ==== === 18. Comparative figures Certain prior year balances have been reclassified to conform with current year presentation format. 19. Approval of financial statements The Board of Directors approved these financial statements on 7 May, 2010.

25 - Page 23 - FTN COCOA PROCESSORS PLC STATEMENT OF VALUE ADDED N 000 % N 000 % Turnover 1,361, ,258 Brought-in-materials and services: - Imported (30,272) (13,057) - Local (834,630) (494,403) Value added 496, , Applied as follows: ====== ==== ====== === Employees - Salaries and benefits 65, , Government - Current taxation 51-25,540 6 Retained for expansion of business Depreciation 171, , Deferred tax , Profit for the year 259, , Value added 496, , ======= ==== ====== ===

26 - Page 24 - FTN COCOA PROCESSORS PLC FIVE-YEAR FINANCIAL SUMMARY N 000 N 000 N 000 N 000 N 000 Turnover 1,361, , , , ,484 ======== ======= ====== ====== ====== Profit/(loss) before taxation 259, , ,248 21,088 (4,504) Current taxation (51) (25,540) (4,478) (4,778) (330) Deferred taxation - (60,783) Profit/(loss) after taxation 259, , ,770 16,310 (4,834) ====== ====== ====== ======= ====== Balance sheet Fixed assets 1,946,798 2,046,325 1,637, ,552 81,584 Investments , Current assets 1,533, ,498 1,044, , ,435 Current liabilities (230,121) (126,406) (298,401) (904,307) (500,784) 3,251,298 3,068,639 2,328, , ,235 Deferred taxation (60,783) (60,783) Convertible bond (801,250) (526,519) Total net assets 2,389,265 2,481,337 2,383, , ,235 ======== ======== ====== ======= ======= Financed by Share capital 1,100,000 1,100,000 1,000,000 5,000 5,000 Share premium 1,091,420 1,091,420 1,239, Directors loan account , ,768 Deposit for shares ,000 15,000 Exchange equalization reserve (274,731) Revenue reserve 472, , ,890 1,777 (14,533) Shareholders fund 2,389,265 2,481,337 2,383, , ,235 ======== ======= ====== ====== ====== Per 50kobo share data: Earnings (basic) 11.80k 8.91k 7.0k 163K (48.34k) Earnings (diluted) 11.80k 8.91k 6.49k 0.74k (0.22k) Net assets (adjusted) N1.09 N1.13 N1.08 N0.16 N0.14 Stock exchange quotations N0.54k N1.50k - - -

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28 - Page 26 - FTN COCOA PROCESSORS PLC TRADING, PROFIT AND LOSS ACCOUNT SCHEDULE 1 FOR THE YEAR ENDED 31 DECEMBER, 2009 N 000 N 000 Sales 1,361, ,258 Deduct: Cost of sales Stock of finished goods at 1 January 239, ,070 Cost of manufacturing/factory overheads (schedule II) 1,174, ,537 Less: 1,413, ,607 Stock of finished goods at 31 December (267,589) (239,213) 1,146, ,394 Gross profit 215, ,864 Administrative expenses (Sch. III) (207,331) (171,606) Recovery/(Diminution) in value of shares 5,965 (8,362) Interest on loans and overdraft (1,470) (23,302) Operating profit before taxation 12,374 80,594 Add: Other income 282, , , ,350 Interest on Corporate Bond (35,055) - Profit before taxation 259, ,350 ======= =======

29 - Page 27 FTN COCOA PROCESSORS PLC SCHEDULE 1I MANUFACTURING, COSTING/FACTORY OVERHEADS FOR THE YEAR ENDED 31 DECEMBER, 2009 N 000 N 000 Stock of materials at 1 January 152, ,395 Purchases, customs duty and handling charges, etc 1,018, ,499 1,171, ,894 Less: Stock of materials, spares and work in progress as at 31 December (324,307) (152,283) 846, ,611 Factory expenses 115,240 46,994 Staff canteen expenses 3,774 - Staff wages 7,205 4,915 Fuel, oil and lubricants 53,721 66,072 Repairs and maintenance of plant and machinery 5,262 13,057 Generator maintenance 3,273 1,476 Laboratory expenses 1, Depreciation 1,037, ,603 Plant and machinery 137,323 97,934 1,174, ,537 ======= ======

30 FTN COCOA PROCESSORS PLC STATEMENT OF ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED 31 DECEMBER, Page 28 - SCHEDULE 1II N 000 N 000 Directors remuneration - fees 1,300 1,300 - other remuneration 16,505 12,857 Staff salaries and allowance 56,359 44,010 Board expenses 1, Office and general expenses 15,995 19,242 Legal and registration fee 8,590 12,925 Bank charges and commission 12,786 9,283 Insurance 6,833 6,875 Travelling expenses 5,022 5,535 Entertainment 578 4,240 AGM Expenses 5,795 - Electricity power and water 5,851 3,635 Vehicle repair and maintenance 4,090 3,377 Security expenses 7,316 3,139 Computer expenses 3,467 2,579 Fuel and oil 3,596 2,109 Staff welfare and medical expenses 2,117 2,026 Building repairs and maintenance 832 1,459 Advert & promotion 2,401 1,390 Audit fee 1,200 1,070 Telephone, telex and postages 1, Rent and rates and taxes 1, Newspapers and periodicals Repairs and maintenance Subscription and donation 2, Ness Fees 3,140 - Provision for bad debt 1,731 - Depreciation & amortization 33,874 30, , ,606 Interest on loan and overdraft 1,470 23,302 Recovery/Diminution in value of shares (5,965) 8, , ,270 ======= ======= Interest on Corporate Bond 35,055 - ======= =======