- Income statement Statement of other comprehensive income 4. - Statement of financial position Statement of changes in equity 7

Transcription

1 Unaudited Financial Statements For the Year ended 31 December

2 Contents Page - Income statement Statement of other comprehensive income 4 - Statement of financial position Statement of changes in equity 7 - Statement of cash flows 8 - Notes to the financial statements 9 1

3 Income Statement For three months ended 31 December Continuing operations Note Revenue 6 21,666,077 19,890,621 Cost of sales (15,148,260) (12,983,870) Gross profit 6,517,817 6,906,751 Selling and distribution expenses (1,105,090) (838,674) Marketing and administrative expenses (3,538,132) (2,537,565) Other income 28,250 (16,918) Operating profit 1,902,845 3,513,594 Finance income 1,133, ,045 Finance costs (178,479) (385,478) Profit before taxation 2,857,478 4,100,161 Taxation (714,370) (1,611,737) Profit from continuing operations 2,143,108 2,488,424 Discontinued operation Profit from discontinued operations 8(ii) - 135,190 Profit for the period 2,143,108 2,623,614 Attributable to: Equity holders 2,143,108 2,623,614 Earnings per share for profit attributable to equity holders: Basic and diluted earnings per share (Naira) The notes on pages 9 to 18 form an integral part of these financial statements. 2

4 Income Statement For the year ended 31 December Continuing operations Note Revenue 93,971,329 85,193,369 Right of Return 6b (1,946,260) - Net Revenue 6 92,025,069 85,193,369 Cost of sales (64,598,398) (57,679,133) Gross profit 27,426,671 27,514,236 Selling and distribution expenses (4,234,339) (3,790,502) Marketing and administrative expenses 7 (15,033,571) (11,452,695) Other income 8 2,267,473 (16,918) Operating profit 10,426,234 12,254,121 Finance income 3,589,632 1,565,263 Finance costs (452,601) (3,200,696) Profit before taxation 13,563,265 10,618,688 Taxation (3,535,012) (3,526,251) Profit from continuing operations 10,028,253 7,092,437 Discontinued operations Profit from discontinued operations 119, ,648 Profit for the year 10,147,932 7,450,085 Attributable to: Equity holders 10,147,932 7,450,085 Earnings per share for profit attributable to equity holders: Basic and diluted earnings per share (Naira) The notes on pages 9 to 18 form an integral part of these financial statements. 3

5 Statement of Other Comprehensive Income For three months ended 31 December Items that will not be reclassified to income statement: Remeasurement on post employment benefit obligations - (1,000,252) Tax effect - 320,081 Other comprehensive income - (680,171) Profit for the period 2,143,108 2,623,614 Total comprehensive income 2,143,108 1,943,443 Attributable to: Equity holders 2,143,108 1,943,443 Statement of Other Comprehensive Income For the year ended 31 December Items that will not be reclassified to income statement: Remeasurement on post employment benefit obligations - (1,000,252) Tax effect - 320,081 Other comprehensive income - (680,171) Profit for the period 10,147,932 7,450,085 Total comprehensive income 10,147,932 6,769,914 Attributable to: Equity holders 10,147,932 6,769,914 The notes on pages 9 to 18 form an integral part of these financial statements. 4

6 Statement of Financial Position As at 31 December 31 December 31 December Note Assets Non-current assets Property, plant and equipment 12 29,763,683 29,880,704 Intangible assets 448, ,890 Other non- current assets 30,574 79,486 Employee loan receivable 65, ,310 Retirement benefit surplus , ,235 30,696,276 31,125,625 Current assets Inventories 13 14,464,435 11,478,532 Trade and other receivables 14 34,921,308 27,907,229 Employee loan receivable 49,760 79,384 Cash and bank balances 15 58,320,643 50,493, ,756,146 89,958,740 Total assets 138,452, ,084,365 Liabilities Current liabilities Trade and other payables 16 45,270,794 33,408,820 Income tax 2,748,898 2,799,203 Loans and borrowings ,528 Deferred income - 32,756 48,020,086 36,695,307 Non-current liabilities Deferred tax liabilities 5,111,279 4,484,871 Retirement benefit obligations 17 1,889,633 3,454,370 Long service award obligations , ,745 Other employee benefits - 85,902 Deferred income - 30,025 Loans and borrowings 3, ,770 7,248,532 8,480,683 Total liabilities 55,268,618 45,175,990 5

7 Statement of Financial Position (continued) As at 31 December Equity Ordinary share capital Share premium Retained earnings Total equity Note December 2,872,503 56,812,810 23,498,491 83,183, December 2,872,503 56,812,810 16,223,062 75,908,375 Total equity and liabilities 138,452, ,084,365 The financial statements on pages 2 to 18 were approved for issue by the Board of Directors on 21 January 2019 and signed on its behalf by: His Majesty N.A. Achebe CFR, MNI Yaw Nsarkoh Adesola Sotande-Peters Chairman Managing Director Finance Director FRC/2013/NIM/ FRC/2014/IODN/ FRC/2015/ICAN/ The notes on pages 9 to 18 form an integral part of these financial statements. 6

8 Statement of Changes in Equity For Year ended 31 December Share capital Share premium Retained earnings Total Balance at 1 January 1,891,649 45,717 9,752,577 11,689,943 Total comprehensive income for the period Profit for the period - - 7,450,085 7,450,085 Other comprehensive income Remeasurement on post employment benefit obligations, net of tax - - (680,171) ,769,914 7,450,085 Transactions with owners Dividend declared Statute barred dividend Rights issue inflow Rights issue expenses 980, ,870,420 (1,103,327) - (378,330) 78, (378,330) 78,901-58,851,274 (1,103,327) Balance at 31 December 2,872,503 56,812,810 16,223,062 75,908,375 Balance at 1 January 2,872,503 56,812,810 16,223,062 75,908,375 Total comprehensive income for the period Profit for the period ,147,932 10,147,932 Other comprehensive income Remeasurement on post employment benefit obligations, net of tax ,147,932 10,147,932 Transactions with owners Dividend declared - - (2,872,503) (2,872,503) Balance at 31 December 2,872,503 56,812,810 23,498,491 83,183,804 The notes on pages 9 to 18 form an integral part of these financial statements. 7

9 Statement of Cash Flows For the Year ended 31 December 31 December 31 December Note Cash flows from operating activities Cash generated from operations 18 13,500,931 7,122,666 Retirement benefits paid (1,907,688) (567,951) Long service award obligations paid (19,244) (21,243) Tax paid (3,000,960) (598,165) Net cash flow generated from operating activities 8,573,039 5,935,307 Cash flows from investing activities Interest received 3,589,632 1,303,526 Purchase of intangible assets - - Purchase of property, plant and equipment 12 (5,395,511) (4,559,238) Proceeds from sale of property, plant and equipment 5,055,114 5,043 Net cash from/(used in) investing activities 3,249,235 (3,250,669) Cash flows from financing activities Drawdown of short-term loan - 17,529,069 Repayment of long-term loan (670,122) (33,450,744) Net proceeds from rights issue - 57,747,947 Interest payment (452,601) (1,113,126) Dividend paid (2,872,503) (378,330) Net cash flow (used in)/from financing activities (3,995,226) 40,334,816 Net (decrease)/increase in cash and cash equivalents 7,827,048 43,019,454 Cash and cash equivalents at the beginning of the year 50,493,595 7,474,141 Cash and cash equivalents at the end of the Year 15 58,320,643 50,493,595 The notes on pages 9 to 18 form an integral part of these financial statements. 8

10 Notes to the financial statements Page General information Basis of preparation Significant accounting policies Estimates Financial risk management Segment reporting Marketing and administrative expenses Other income Discontinued operations Finance income Finance cost Income taxes Property, plant and equipment Inventories Trade and other receivables Cash and cash equivalents Trade and other payables Retirement benefit obligations Cash flows from operating activities Related party transactions Share capital and premium

11 1. General information is incorporated in Nigeria under the Companies and Allied Matters Act 1990 as a public limited liability company and is domiciled in Nigeria. The Company's shares are listed on the Nigerian Stock Exchange (NSE). The Company is principally involved in the manufacture and marketing of foods and food ingredients, and home and personal care products. It has manufacturing plants in Lagos and Agbara. 2. Basis of preparation The financial statements of ("Unilever" or "the Company") have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The financial statements have been prepared under the historical cost basis, except for the following which are measured on each: The financial statements are presented in Nigerian Naira, rounded to the nearest thousand () unless otherwise indicated. 3. Significant accounting policies The accounting policies adopted are consistent with those of the previous financial year. 4. Estimates The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. 5. Financial risk management Financial risk factors Unilever s activities expose it to a variety of financial risks: market risk (foreign exchange risk), credit risk and liquidity risk. Unilever s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Unilever s financial performance. Risk management is carried out by a Treasury Department under policies approved by the Finance Director. Unilever's Treasury Department identifies, evaluates and manages financial risks in close co-operation with Unilever s operating units. These policies are mostly Unilever Global Policies adapted for local use. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Company s annual financial statements as at 31 December. There have been no changes in the risk management structure since year end or in any risk management policy Financial risk factors (a) Market risk (i) Foreign exchange risk Unilever is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro and USD. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities. The Company manages this risk mainly by hedging foreign exchange currency contracts. At 31 December, the unhedged financial assets and liabilities amounted to N8.3 billion (: N7 billion). 10

12 5. Financial risk management (continued) 5.1. Financial risk factors (ii) Cash flow and fair value interest rate risk Unilever s interest rate risk arises from bank overdrafts and bank loans. Overdrafts issued at variable rates expose Unilever to cash flow interest rate risk. Borrowings issued at fixed rates expose Unilever to fair value interest rate risk. Unilever analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions and alternative financing. Based on these scenarios, Unilever calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions. The following table shows the split in fixed and floating rate exposures: Fixed rate (bank loans) 4, ,298 (b) Credit risk 4, ,298 Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. For banks and financial institutions, only parties classified as "International Golden Circle" (preferred choice for the Unilever group) are accepted. Exposure limit with the banks is set at a maximum of N6.6 billion. Risk control assesses the credit quality of wholesale customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board or external ratings. The utilisation of credit limits is regularly monitored. Concentration of credit risk with respect to trade receivables is limited, due to the Company s customer base being diverse. Credit terms for customers are determined on individual basis. Credit risk relating to trade receivables is managed by reference to the customers' credit limit, inventory balance, cash position and secondary sales to final consumers. (c) Liquidity risk Liquidity risk is the risk that Unilever will face difficulty in meeting its obligations associated with its financial liabilities. Unilever s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this management considers both normal and stressed conditions. A material and sustained shortfall in our cash flow could undermine Unilever's credibility, impair investor confidence and also restrict Unilever s ability to raise funds. Where current libilities exceed current assets, the Company seeks to manage its liquidity requirements by maintaining access to bank lending which are renewable annually. At the reporting date, Unilever held cash in bank was N58 billion (: N50 billion). 11

13 6. Segment reporting The chief operating decision-maker has been identified as the Leadership Team (LT) of. The Leadership Team reviews Unilever s monthly financial and operational information in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. The Leadership Team consider the business from a product category perspective. Unilever is segmented into Food Products (FP), Home & Personal Care Products (HPC). Foods including sale of tea, savoury and spreads. Home & Personal Care including sale of skin care and oral care products, fabric care and household cleaning There are no intersegmental sales and Nigeria is the company's primary geographical segment as it comprises 99% of the company's sales. The Leadership Team assesses the performance based on operating profits for each operating segment that is reviewed. Total financing (including interest income and expense), income taxes and retirement benefit obligations are managed on an entity-wide basis and are not allocated to operating segments. Home Food & Personal Products Care Total 3 months ended 31 December Revenue 11,120,732 10,545,345 21,666,077 Depreciation and amortisation 237, , ,302 Segmental operating profit 976, ,156 1,902,845 Finance income 1,133,112 Finance cost (178,479) Profit before taxation 2,857,478 3 months ended 31 December Revenue 8,844,858 11,045,763 19,890,621 Depreciation and amortisation 411, , ,827 Segmental operating profit 1,562,407 1,951,187 3,513,594 Finance income 972,045 Finance cost (385,478) Profit before taxation 4,100,161 Year ended 31 December Revenue 44,304,917 47,720,152 92,025,069 Depreciation and amortisation 1,276,259 1,374,640 2,650,899 Segmental operating profit 5,019,648 5,406,586 10,426,234 Finance income 3,589,632 Finance cost (452,601) Profit before taxation 13,563,265 Year ended 31 December Revenue 37,283,202 47,910,167 85,193,369 Depreciation and amortisation 2,046,132 2,287,166 4,333,298 Segmental operating profit 5,362,775 6,891,346 12,254,121 Finance income 1,565,263 Finance cost (3,200,696) Profit before taxation 10,618,688 12

14 6. Segment reporting (continued) Turnover over by geographical location Domestic Export (within (outside Nigeria) Nigeria) Total 3 months ended 31 December 21,452, ,510 21,666,077 3 months ended 31 December 19,213, ,198 19,890, months ended 31 December 90,341,581 1,683,488 92,025, months ended 31 December 83,497,196 1,696,173 85,193,369 The company has 139 customers, and no single customer accounted for more than 10% of the company's revenue. b. In line with the new standard on Revenue, IFRS 15 an estimate of the right of return has been made to account for likely returns of sales 7. Marketing and administrative expenses Brand and marketing 4,379,347 3,559,442 Overheads 7,902,967 5,653,191 Service Fees 2,751,257 2,240,062 15,033,571 11,452, Other income Gain on sale of spreads 2,027,880 - Gain on sale of Aba factory 153,059 - Gain on sale of property plant and equipment 10,264 (16,918) TSA income (8 (i)) 76,270-2,267,473 (16,918) 8(i) Effective 1 July, Unilever Nigeria sold its Spreads business (Blueband margarine) and all the assets attached to the business to Sigma Bidco B.V, an entity incorporated by KKR & Co LP. The entity is incorporated in Nigeria as Sigma Silver Foods (Upfield Foods) Nigeria Limited. A Transitional Service Arrangement is in place during which Unilever Nigeria would support Upfield Foods and earn an income. 13

15 The results of the spreads business has been presented under discontinued operations in the statement of comprehensive income, separate from continuing operations. The comparative has also been restated. (ii) Discontinued Operations Year ended 31 Year ended 3 months 3 months Dec 31 Dec ended 31 ended 31 Dec Dec Turnover 2,344,435 5,577,937-1,751,792 Cost of sales (1,814,954) (4,148,909) - (1,147,959) Gross Profit 529,481 1,429, ,833 Selling and Distribution expenses (123,044) (202,433) - (54,721) Marketing and administrative expenses (309,811) (529,884) - (287,327) Other Income - (1,108) (1,108) Operating profit 96, , ,677 Finance income 73, ,484-67,727 Finance cost (8,253) (209,562) - (44,616) Profit Before tax 161, , ,788 Taxation (42,050) (230,877) - (148,598) Profit for the period 119, , , Finance income Interest on call deposits and bank accounts 3,549,953 1,201,042 Interest income from employee loans 39,679 78,481 Derivative gain - 285,740 3,589,632 1,565, Finance cost Interest on third party bank loans 105,755 2,348,380 Exchange difference on bank accounts 109, ,853 Interest cost on defined benefit plans 237, , Income Taxes 452,601 3,200,696 Income tax expense is recognised based on management s estimate of the weighted average annual income tax rate expected for the period. The estimated average tax rate used for the period ended 31 December is 26% 14

16 12. Property, plant and equipment (PPE) Cost Capital work-inprogress Lease hold land Buildings Plant and machinery Furniture and equipment Motor vehicles Total At 1 January 3,755,235 1,814,142 7,249,995 25,221,447 1,567, ,367 40,530,707 Additions 4,559, ,559,238 Transfers (4,742,901) 114, ,270 3,617, ,905 65,765 - Disposals - (132,816) (12,958) (157,971) (303,745) Reclassification between asset (8,370) 8,370 - class (1,514,563) 1,514,563 - Reclassification from assets held for sale 20, , ,094 At 31 December 3,571, ,433 9,530,572 28,697,718 2,068, ,161 45,133,294 Additions 5,395, ,395,511 Transfers (4,679,565) 19, ,343 3,183, , ,746 - Disposals (492,395) (2,438,864) (227,788) (9,840) (3,168,887) Reclassification between PPE heads At 31 December 4,287, ,990 9,758,520 29,442,705 2,106,118 1,311,067 47,359,918 Depreciation / impairment At 1 January - 27,777 1,012,250 9,160, , ,165 11,258,521 Depreciation charge for the year ,941 3,417, , ,800 4,099,064 Reclassification between asset class - (24,587) 24,587 (4,544) 4, Reclassification from assets held for sale - 12, , , Disposals (125,809) (3,817) (151,050) (280,676) At 31 December - 15,531 1,492,118 12,447, , ,915 15,252,590 Depreciation charge for the period ,560 2,003, , ,038 2,650,899 Disposals/write-off (178,208) (118,085) (9,321) (1,640) (307,254) At 31 December - 15,531 1,585,470 14,332, , ,313 17,596,235 Net book value: At 1 January 3,755,235 1,786,365 6,237,745 16,061,008 1,053, ,202 29,272,186 At 31 December 3,571, ,902 8,038,454 16,250,140 1,313, ,246 29,880,704 At 31 December 4,287, ,459 8,173,050 15,109,737 1,171, ,754 29,763,683 15

17 13. Inventories Raw and packaging materials Work in progress Finished goods Engineering spares and other inventories Goods in transit 7,028, ,586 5,051,496 1,024, ,914 5,194, ,552 1,358,881 3,652, ,413 14,464,435 11,478, Trade and other receivables Trade receivables: gross Less impairment Trade receivables: net Advances and prepayments Unclaimed dividend held with registrar Interest receivable Other receivables Due from related parties (Note 19(iii)) Deposit for imports Derivative assets 17,922,146 (485,746) 17,436,400 4,697, , ,345 2,133,670 9,206, , ,500 5,840,368 (287,672) 5,552,696 5,619, , , ,641 14,972, , ,740 34,921,308 27,907,229 Advances and prepayments include insurance premium and advances to vendors. 15. Cash and cash equivalents Cash at bank and in hand Fixed deposit 25,264,633 33,056,010 25,555,613 24,937,982 Cash and bank balances 58,320,643 50,493,595 Cash and cash equivalents 58,320,643 50,493, Trade and other payables Trade payables Amount due to related companies (Note 19(iii)) Dividend payable Accrued liabilities Accrued brand and marketing expenses Accrued shipping and freight charges Right of return liability Non trade payables 12,038,990 17,525,190 3,171,439 1,175, ,892 1,609,344 1,946,260 7,437,045 8,135,087 17,870,489 2,891, , , ,380 2,808,039 45,270,794 33,408,820 16

18 17. Retirement benefit obligations The amounts recognised in the statement of financial position are determined as follows: Present value of funded retirement benefit obligations (1,525,266) (1,597,969) Fair value of plan assets 1,913,340 1,927,204 Retirement benefit surplus 388, ,235 Present value of unfunded retirement benefit obligations (1,889,633) (3,454,370) Long service award obligations (243,838) (205,745) Net liability in the statement of financial position (1,745,397) (3,330,880) The amounts recognised within the income statement were as follows: 18. Cash flows from operating activities Profit before tax 13,724,994 11,207,213 Adjustment for non-cash items: - Depreciation of property, plant and equipment 2,650,899 4,099,064 - Assets write off Amortisation of intangible assets 257, ,234 - (Gain)/loss on disposals of property, plant and equipment (2,191,203) 18,026 - Finance income (3,589,632) (1,303,526) - Finance expense 452,601 1,167,929 - Exchange loss/(gain) on intercompany loan - 592,863 - Net change in retirement benefit obligations 284, ,188 - Change in employee loan receivable 94,476 (25,105) - Long service award obligations 38,093 45,822 - Statute barred dividend 78,901 - Other employee benefits (85,902) 11,749 - Deferred Income (62,781) - - Derivative gain on forwards (285,740) Changes in working capital: - Increase in trade and other receivables (7,014,079) (8,675,911) - (Increase)/decrease in inventory (2,985,903) (1,600,033) - Increase in trade and other payables 11,878, ,318 - Decrease in other non-current assets 48,912 60,674 Cash flows generated from operating activities 13,500,931 7,122,666 17

19 19. Related party transactions (i) Sale of finished goods to related parties Unilever Ghana Limited Unilever Cote D'Ivoire 694, , , ,371 1,683,488 1,696,174 (ii) Purchases of finished goods for resale from related parties Unilever Ghana Limited Unilever South Africa (Pty) Limited Unilever Gulf Free Zone Establishment Unilever Asia Private Limited Others 1,632,154 51,593 18,461 78,670 8,613 3,729, ,611 16, ,789,492 4,339,682 (iii) Outstanding related party balances as at 31 December were: Receivables from related parties: Unilever Cote D'Ivoire Unilever Ghana Limited Unilever UK Plc Other related parties 4,690,797 4,043, ,383 55,201 7,814,098 4,441,888 2,355, ,564 9,206,712 14,972,990 Payables to related parties: Unilever UK Plc Unilever Cote D'Ivoire Unilever Ghana Limited Unilever Asia Private Unilever NV Unilever South Africa Other related parties 2,727, ,694 6,375,296 5,005,493 2,097, , ,824 3,346, ,963 5,943,665 4,596,274 1,943, ,399 1,069,134 17,525,190 17,870, Share capital and share premium Number of ordinary shares (thousands) Ordinary shares Share premium Balance as at 31 December 5,745,005 2,872,503 56,812,810 The authorised number of ordinary shares is 6,053,274,000 with a par value of 50kobo per share. Of these, 5,745,005,417 ordinary shares have been issued and fully paid. 18