SMART PRODUCTS NIGERIA PLC MANAGEMENT ACCOUNTS FOR THE PERIOD ENDED 30THSEPTEMBER, 2016

Transcription

1 SMART PRODUCTS IGERIA PLC MAAGEMET ACCOUTS FOR THE PERIOD EDED 30THSEPTEMBER, 2016

2 SMART PRODUCT IGERIA PLC MAAGEMET ACCOUTS FOR THE PERIOD EDED 3OTHSEPTEMBER, 2016 COTETS PAGE Statement of financial position 1 Statement of comprehensive income 2 otes to the management accounts 3-18

3 -Page1- SMART PRODUCTS IGERIA PLC STATEMET OF FIACIAL POSITIO AS AT 3OTHSEPTEMBER, 2016 ote 30 Sep, Dec, 2015 Assets: on-current: Property, plant and equipment ,494 2,213,367 Investment property 10 89,239,331 84,928,555 Available for sale financial assets ,775,565 1,775,565 94,078,390 88,917, Current: Loans and receivables 12 47,052,735 22,279,863 Cash and cash equivalent ,314 20,153,000 47,771,049 42,432, Total assets 141,849, ,350,350 == Liabilities on-current Deferred tax liabilities ,042,882 18,042,882 18,042, Current: Trade and other payable 14 10,957,573 10,957,573 Deferred income 15 6,835,237 2,179,524 Current tax payable ,228,998 27,228,998 45,021,808 40,366, Total liabilities 63,064,690 58,408,977 Equity Issued share capital 16 22,500,000 22,500,000 Share premium 17 1,151,920 1,151,920 Asset revaluation reserve 18 80,647,330 80,647,330 Retained earnings 19 (25,514,501) (31,357,077) Equity attributable to owners 78,784,749 72,941,373 Total liabilities and equity 141,849, ,350,350 ==

4 -Page2- SMART PRODUCTS IGERIA PLC STATEMET OF COMPREHESIVE ICOME FOR THE PERIOD EDED 30THSEPTEMBER 2016 ote 30 Sep, Dec, 2015 Revenue 3 33,210,176 45,190,169 Other income 4 3,773,406 7,665,204 Total revenue 36,983,582 52,855,373 Personnel expenses 5 (5,511,900) (5,971,814) Other operating expenses 6 (16,268,307) (23,818,746) Profit before tax 15,203,375 23,064,813 Income tax expenses (8,323,112) Deferred tax expenses 7.2-1,915,763 Profit for the period after tax 19 15,203,375 16,657,464 Other comprehensive income Appreciation on available for sale financial assets ,843 Total comprehensive income for the period 15,203,375 16,893,307 Earnings per share Basic profit for the period attributable to ordinary equity holders ===== =====... Mr. Abiola A. Aderonmu Mr. Amin A. Amzat Managing Director Chie Finance Officer FRC/2014/IM/ FRC/2014/ICA/

5 -Page3-1. Corporate information SMART PRODUCTS IGERIA PLC OTES TO THE FIACIAL STATEMETS The company, Smart Product igeria Plc (formerly Associated Press Limited) was incorporated on 11 January, 1966 as a limited liability company and commenced business as a legal entity immediately. It was converted to a public limited liability company in The registered office is located at 373, Agege Motor Road, Challenge, Mushin, Lagos. The principal activity of the company is the management and administration of the company s properties and investments from where it derives income. 2. Accounting policies The principal accounting policies adopted in the preparation of these management accounts are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. 2.1 Basis of preparation The management accounts have been prepared on an historical cost basis, except for those available-for-sale financial assets that have been measured at fair value. The financial statements values are presented in the igerian aira (), which is the Company s presentation currency, unless otherwise indicated Statement of compliance The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Additional information required by national regulations is included where appropriate. The Company presents its statement of financial position with necessary analysis of the items presented in the respective notes. An analysis regarding recovery or settlement within 12 months after the reporting date (current) and more than 12 months after the reporting date (non-current) form an integral part of each of the notes where applicable. Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position only when there is a legally enforceable right to offset the recognized amount and there is an intention to settle on a net basis, or to realize the assets and settled the liability simultaneously.

6 -Page Summary of significant accounting policies The following are the significant accounting policies adopted by the Company in preparing its management accounts: Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses (if any). The cost of property, plant and equipment includes expenditure incurred during construction, delivery and modification. Other subsequent expenditure is capitalised only when it increases the future economic benefits associated with the asset to which it relates. Where a substantial period of time is required to bring the asset into use, attributable finance costs are capitalised and included in the cost of the relevant asset. Depreciation is provided on straight line basis to allocate the cost/revalued amounts less their residual values over the estimated useful lives of the various classes of assets. The principal rates used are: Plant and machinery 10 years Motor vehicles 4 years Furniture, fixtures and equipment 10 years Generator 3 years Depreciation is charged based on usage in the year of purchase. The asset s residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively if appropriate to reflect the relevant market conditions and expectations, obsolescence and normal wear and tear. Impairment review is carried out when events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment losses on non-revalued assets are recognised in the income statement as an expense, while reversals of impairment losses are also stated in the income statement. An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised Investment properties Leasehold property The company has opted to use the carrying cost of its investment property as deemed cost upon transition to IFRS and subsequently measure it using the cost model.

7 Investment properties (including borrowing cost attributable to their construction, acquisition and production) are capitalised and are initially measured at cost; -Page 5- subsequently, they are amortised over the remaining leasehold life of the lease agreement (less any accumulated impairment losses). The company however discloses the fair value of its investment properties as at the end of the financial period in compliance with paragraph 79 of IAS 40. The fair value is determined every three years by external independent valuers who are registered with the Financial Reporting Council (FRC) of igeria. Increase in their carrying amount are credited to revaluation reserve in shareholder s equity. Decreases that offset previous increases of the same properties are charged against revaluation reserve while, all other decreases are charged to the income statement. Revaluation surplus on disposed properties are written back to income in line with the provisions of IAS 40. The company s investment property is amortised over the remaining life of the lease agreement. The lease expires by Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. After initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses (if any). Capitalization of expenditure ceases when the asset is in the condition necessary for it to be capable of operating in the manner intended by management. Depreciable amount is allocated on a systematic basis over its useful life using the straight line basis in which charges for each period are recognised in the profit or loss. Direct computer software development costs recognised as intangible assets are amortised on a straight line basis over four years and are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful life of the asset is reviewed at each financial year end. If the expected useful life is different from the previous estimates, the amortisation period will change. And if there is a change due to the expected pattern of consumption of the future economic benefits embodied in the asset, the amortisation period will be changed to reflect the pattern which will be accounted for as a change in accounting estimate. However, the company did not have any intangible asset as at 30 September, Taxation a) Current income tax Current income tax liabilities and assets for the current and prior periods is measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted at the reporting date.current income tax assets and liabilities also include adjustments for tax expected to be payable or recoverable in respect of previous periods. b) Deferred tax

8 Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are calculated in respect of temporary differences using the balance sheet liability method. -Page 6- Deferred tax assets are recorded only to the extent that it is probable that taxable profit will be available against which the deferred tax asset will be realized or if it can be offset against existing deferred tax liabilities. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred tax assets and liabilities are measured at tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting period. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority Employee s retirement benefits Defined contribution The Company operates a funded defined contributory scheme with some Pension Fund Administrators. This is in compliance with the provisions of the Pension Reform Act, 2004 whereby employer and employees contribute minimum of 10% and 8% respectively of the employees eligible emoluments. Staff contributions to the scheme are funded through payroll deductions, while the Company s contribution is charged to the income statement. When an employee has rendered service to an entity during a period, the company recognises the contribution payable to a defined contribution plan in exchange for that service (a) as a liability (accrued expenses), after deducting any contribution already paid, (b) as an expense Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured, regardless of when the

9 payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes. The following specific recognition criteria must also be met before revenue is recognised for each of the two major income sources available to the company as follows:- -Page 7- Rental income This income is generated from rent paid by tenants on the company s property and is being recognised on time basis. Rent received for the period is recognised in the income statement as turnover for the period while amount relating to the period yet to expire is deferred and recognised as payable in the statements of financial position. Investment income Investment income is generated through dividend from equity investment. This income is recognised in the statement of comprehensive income as income when the company s right to receive the payment is established Financial Instruments i) Financial assets Initial recognition and measurement Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, as appropriate. The company s financial assets include cash and short-term deposits, fixed deposits, loans and other receivables, quoted equity investment. The company recognises three classes of financial assets: a) Available for sale financial investments b) Held to maturity investment c) Loans and receivables All financial assets are recognised initially at fair value plus transaction costs. Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows: Available for sale financial investments Equity investments classified as available-for-sale are those that are neither classified as held for trading nor designated at fair value through profit or loss. After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised in the available-for-

10 sale reserve through other comprehensive income until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income or the investment is determined to be impaired, when the cumulative loss is reclassified from the available-for sale reserve to the income statement. -Page 8- Investments in unquoted equity instruments that do not have an active market and whose fair value cannot be reliably measured and or derivatives that is linked to and must be settled by delivery of such unquoted equity instruments are measured at cost. For a financial asset reclassified out of the available-for-sale category, any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the Effective Interest Rate (EIR). Any difference between the new amortised cost and the expected cash flows is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the income statement. Held to- maturity investments on-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to maturity when the Company has the positive intention and ability to hold them to maturity. After initial measurement, held-tomaturity investments are measured at amortised cost using the EIR, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the income statement. Gains and losses are recognised in the income statement when the investments are derecognised or impaired, as well as through the amortisation process. Included in this classification are Investments in Treasury bills and Bonds issued by federal government and state government. However, the company did not have any held - to -maturity investments as at 30 September, Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the income statement. Gains and losses are recognised in the income statement when the investments are derecognised or impaired, as well as through the amortisation process. Included in this classification are personal loans, car loan and mortgage loan given to employees. Derecognition

11 A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when: The right to receive cash flows from the asset have expired; and -Page 9- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the asset is recognised to the extent of the Company s continuing involvement in the asset. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. ii) Impairment of financial assets The company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred loss event ) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial assets carried at amortised cost For financial assets carried at amortised cost, the company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset s carrying amount and the present

12 value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR. -Page 10- The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of investment income in the income statement. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is recognised in the income statement. Available for sale financial investments For available-for-sale financial investments, the Company assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. Significant is evaluated against the original cost of the investment and prolonged against the period in which the fair value has been below its original cost. When there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the income statement is removed from other comprehensive income and recognised in the income statement. Impairment losses on equity investments are not reversed through the income statement; increases in their fair value after impairment are recognised directly in other comprehensive income. A threshold of 20% is applied consistently to conclude whether or not the decline in fair value is significant. iii) Financial liabilities Initial recognition and measurement Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The company determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, carried at amortised cost, this includes directly attributable transaction costs. The company s financial liabilities include trade and other payables. Derecognition

13 A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, -Page 11- Such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the income statement. iv) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if: There is a currently enforceable legal right to offset the recognised amounts; and There is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously v) Fair value of financial instruments The fair value of financial instruments that are traded in active markets are determined at each reporting date by reference to quoted market prices or dealer price quotations. For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include: Using recent arm s length market transactions Reference to the current fair value of another instrument that is substantially the same A discounted cash flow analysis or other valuation models Cash and cash equivalent Cash and cash equivalent in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less. For the purpose of statement of cash flows, cash and cash equivalents consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts (if any) Provision A provision is recognised if as a result of 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. Amounts are recorded based on management s best estimate of the amount needed to settle the obligation, which includes, among other things, management s experience in similar transactions. Where the effect of the time value of money is significant, the provision is discounted at a rate that reflects the estimated timing of payment, if the timing can be reasonably determined, as well as the risk associated with the liability.

14 Leasing -Page12- (i) Finance Lease A lease arrangement under which substantially all the risks and rewards incidental to ownership of the leased item rest with the lease are capitalised at the inception of the lease at the lower of the fair value of the related item or the present value of the minimum lease payments. Lease payments are apportioned between finance charges and a reduction in the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are expensed to the income statement. Capitalised leased assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. (ii) Operating Lease Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Lease payments under operating leases are charged on a straight line basis over the lease term. 30 Sep, Dec, Turnover Rental income 33,202,554 45,183,403 Dividend received 7,622 6,766 33,210,176 45,190, Other income Service charge reimbursement 2,694,744 3,287,194 Interest on bank deposit - 95,846 Interest on commercial paper 1,078,662 4,282,164 3,773,406 7,685,204 ======= ======== 5. Personnel expenses Pension contribution 377, ,190 Staff welfare and medical (ational Health Insurance Scheme) 83, ,000 Directors fees and allowances 1,968,750 2,400,000 Salaries and wages 13,081,939 2,799,624 5,511,900 5,971,814 ======= ======= 6. Other operating expenses Depreciation on property, plant and equipment 1,629,873 3,588,400 Amortisation of investment properties 2, 588,724 3,118,601 Annual general meeting expenses 1,633,716 2,688,688 Other professional fees 1,286,250 1,440,000 Entertainment 298, ,850 Security service 1,183,410 2,029,300 Vehicle running and maintenance 2,274,750 1,350,000

15 Repairs and maintenance 405, ,350 Travelling 798,264 1,073,250 Printing and stationary 189, ,405 -Page13- Sep, 2016 Dec, 2015 Waste disposal/cleaning 722,727 1,471,780 Insurance motor vehicles 22,500 30,000 Generator running 989, ,690 Audit fee 562, ,000 Registrars 273, ,256 Land use charge 357, ,935 Electricity 403, ,940 Insurance building 209, ,443 Financial Reporting Council due 150, ,000 Loss on financial assets available for sale - 1,026,670 Listing and filing fees 13, ,261 Bank charges 59,901 59,687 Impairment on available for sale financial assets - 173,740 - Website/card and fuel 214, ,500 16,268,307 23,818, Statement of financial position Income tax Balance at 1 January 27,228,998 20,906,563 Statements of comprehensive income - 8,323,112 27,228,998 29,229,675 Payment during the year - (2,000,677) At 30 September/December 27,228,998 27,228, Deferred tax At 1 January 18,042,882 19,958,645 Movement during the period - (1,915,763) At 30 September/December 18,042,882 18,042,882 ======== 7.3 The company income tax was based on the provision of the Company Income Tax Act (Cap.60 LF 1993) and the education tax Act 1993 as amended to date. The income tax expense for the year ended can be reconciled to the accounting profit as follows:- 8. Earnings per share Basic earnings per share amounts is calculated by dividing the net profit for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding at the reporting date. The following reflects the income and share data used in the basic earnings per share computations. et profit attributable to ordinary shareholders 30 Sep, Dec, 2015

16 for basic earnings 15,203,375 16,893,307 Weighted average number of ordinary shares 45,000,000 45,000,000 Basic earnings per ordinary share === -Page Property, plant and equipments Furniture Motor Generator Fixtures & Vehicles equipment Total Cost valuation As at 1 st January, ,479,004 12,162,000 3,019,050 20,660,054 Additions - - 2,480,000 2,480,000 As at 30 th September, ,479,004 12,162,000 5,499,050 23,140,054 = As at 1 st January, ,039,362 10,388,375 3,018,950 18,446,687 Charge for the year 329, , ,337 1,629,873 As at 30 th September, ,369,086 11,275,187 3,432,287 20,076,560 == Carrying amount At 30 th September, , ,813 2,066,763 3,063,494 ======= ======= ======= ========= At 31st December, ,642 1,773, ,213,367 ======= ========= 10. Investment property Leasehold building 30 Sep, 2016 Dec, st January 115,388, ,491,601 Additions during the year 6,899,500 4,896, September, ,287, ,388,251 === Amortisation 1 st January 30,459,696 27,341,095 Charge during the year 2,588,724 3,118, September, 33,048,420 30,459,696 Carrying amount as at 30 September 89,239,331 84,928,555 The leasehold investment property is located at KM12, Agege Motor Road, Mushin, Lagos and is being amortised over the remaining term of the lease. The lease term will expire in Financial assets Available for sale financial assets (11.1) 1,775,565 1,775,565 Loans and other receivables (12) 45,201,995 22,279,863 46,982,560 24,055, Available for sale financial assets

17 Listed securities Dangote Flour Mills Plc (Tiger Brands) 5,673 22,841 Unilever Plc 1,339,928 1,109,120 First Bank of igeria Plc 260, ,560 -Page Sep, 2016 Dec, 2015 PZ 68,105 63,070 Ecobank Plc 101, ,870 Total available for sale financial asset 1,775, ,870 ======= ======= Impairment allowance Impairment charge for the year - (173,740) Appreciation - 235,844-62,104 At 30 September 1,775,565 1,775,565 ======= ======== 11.2 Available for sale financial assets The fair value of the quoted equity shares is determined by reference to published price on the igeria Stock Exchange. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. The determination of what is significant or prolonged requires judgment. In making this judgment, the company evaluates, among other factors, the duration or extent to which the fair value of an investment is less than its cost. Based on these criteria, there was no impairment of available-for-sale investment quoted equity securities. Determination of fair value and fair values hierarchy The Company used the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities; Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. Financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices from observable current market transactions are assets and liabilities for which pricing is obtained via pricing services, but where prices have not been determined in an active market, financial assets with fair values based on broker quotes, investments in private equity funds with fair values obtained

18 via fund managers and assets that are valued using the Company s own models whereby the majority of assumptions are market observable. -Page 16- on market observable inputs means that fair values are determined, in whole or in part, using a valuation technique (model) based on assumptions that are neither supported by prices from observable current market transactions in the same instrument, nor are they based on available market data. The main asset classes in this category are unlisted equity investments and debt instruments. Valuation techniques are used to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an exit price from the perspective of the Company. Therefore, unobservable inputs reflect the Company s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These inputs are developed based on the best information available, which might include the Company s own data. The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy: 11.2 Available for sale financial assets Level 1 Total fair Value Equity securities 30 September, ,775,565 1,775,565 ======= ======= 31 December, ,775,565 1,775,565 ======== ======= 30 Sep, Dec, Loans and receivables Rent receivable 1,845,780 1,845,780 Sundry debtors 33,566,955 20,434,083 Deposit 11,640,000-47,052,735 22,279, Current 47,052,735 22,279,863 on-current ,052,735 22,279, Cash and cash equivalents - current Cash and bank balance 718,314 20,153,000 ====== ======== 14. Financial liability 14.1 Trade and other payables- current

19 Dividend payable 2,322,000 2,322,000 Statutory deduction 3,399,357 3,399,357 Accruals 5,236,216 5,236,216 -Page Sep, Dec, 2015 Others payable - - Unclaimed dividend ,957,573 10,957, Deferred income Current 6,835,237 2,179,524 on-current - - 6,835,237 2,179,524 Deferred incomes are unexpired rent received from tenants of the company s leasehold investment property. 16. Share capital Authorised 50,000,000 ordinary shares of 0.50 each 25,000,000 25,000,000 Issued and fully paid 45,000,000 ordinary shares of 0.50 each 22,500,000 22,500, Share premium At 30 September 1,151,920 1,151,920 ======= ======= 18. Asset revaluation reserve At 1 January 80,647,330 80,411,486 Transfer from statement of other comprehensive income - 235,844 At 30 September/31 December 80,647,330 80,647,330 Of this opening balance of asset revaluation reserves, 70,866,857 represents the appreciation in the value of the leasehold land and buildings which arose from the revaluation of the assets done in April, 1999 by Jagun Dosumu and Company, whilst the balance of 3,979,851 is in respect of excess revaluation on the buildings prior to April, The transfer of 235,843 from statement of other comprehensive income represent the appreciation in the market value of available for sale financial assets as at 31 December, Retained earnings At 1 January (31,357,876) (39,015,340) Retained profit for the year 15,203,375 16,657,464 Dividend paid/payable 9,360,000 (9,000,000) A s at 30 September (25,514,501) (31,357,876) ==

20 In respect of the current quarter, the directors do not propose any dividend.