Unaudited Condensed Consolidated Financial Statements
Statement of Financial Position As at Note Assets Non-current assets Property, plant and equipment 5 150,345,829 141,835,592 24,166 18,338 Intangible assets 6 39,496,774 39,517,340 5,075,818 5,075,818 Investment property 7 1,706,600 1,706,600 1,706,600 1,706,600 Investment in subsidiaries 8 - - 27,529,887 27,529,887 Debt and equity securities 13 4,054,315 4,971,353 4,054,315 4,971,353 Deferred tax 9 3,348,918 3,348,918 - - Prepaid lease rental (long term) 10 17,251 53,010 - - 198,969,687 191,432,813 38,390,786 39,301,996 Current assets Inventories 11 4,638,859 4,646,609 - - Trade and other receivables 12 88,459,371 83,827,859 24,905,839 23,460,800 Prepaid lease rental (short term) 10 30,000 16,741 - - Cash and cash equivalents 14 6,513,876 5,598,282 989,644 339,974 99,642,106 94,089,491 25,895,483 23,800,774 Total assets 298,611,793 285,522,304 64,286,269 63,102,770 Liabilities Current liabilities Trade and other payables 15 73,820,792 64,846,974 848,891 3,702,299 Taxation 16 1,804,987 1,424,147 40,578 225,015 Borrowings (short term) 17 26,264,827 36,509,388 9,989,952 10,223,020 Advance deposits 19 1,875,000 1,875,000 1,875,000 1,875,000 103,765,606 104,655,509 12,754,421 16,025,334 Non-current liabilities Borrowings (long term) 17 75,336,571 75,589,945 14,361,420 11,470,290 Deposit for shares 18 2,410,000 2,410,000 - - Deferred tax 9 7,159,053 7,159,053 - - 84,905,624 85,158,998 14,361,420 11,470,290 Total liabilities 188,671,230 189,814,507 27,115,841 27,495,624 Equity Ordinary share capital 28 20,323,996 20,323,996 20,323,996 20,323,996 Share premium 28 6,249,871 6,249,871 6,249,871 6,249,871 Other reserves 1,860,743 2,777,781 1,972,423 2,889,461 Retained earnings 38,211,318 31,961,979 8,624,138 6,143,818 Equity attributable to owners of the parent 66,645,928 61,313,627 37,170,428 35,607,146 Non controlling interest 29 43,294,635 34,394,170 - - Total equity 109,940,563 95,707,797 37,170,428 35,607,146 Net equity and liabilities 298,611,793 285,522,304 64,286,269 63,102,770 The notes on pages 7 to 19 are an integral part of these financial statements. The financial statements on pages 1 to 19 were approved and authorised for issue by the Board of Directors on 22 October and were signed on its behalf by Mutiu Bakare Chief Finance Officer FRC/2016/ICAN/00000014111 Adim Jibunoh President/Chief Executive Officer FRC/2014/IODN/00000008267 1
Statement of Profit or Loss and Other Comprehensive Income Note Revenue 20 79,860,754 56,756,794 6,642,684 3,433,061 Cost of sales 21 (42,900,544) (31,134,574) - - Gross profit 36,960,210 25,622,220 6,642,684 3,433,061 Administrative expenses 24 (11,557,231) (9,395,404) (2,034,038) (1,358,360) Other income 22 542,051 582,737 904,277 864,381 Other gains /(loss) - net 23 (15,512) 505-477 Operating profit 25,929,518 16,810,058 5,512,923 2,939,559 Finance income 25 901,057 577,692 839,925 1,088,607 Finance cost 25 (7,492,158) (7,196,178) (2,395,300) (2,233,583) Foreign exchange loss on financing activities 26 (1,621,374) (1,149,339) - - Finance cost -net (8,212,475) (7,767,825) (1,555,375) (1,144,976) Profit/ (Loss) before taxation 17,717,043 9,042,233 3,957,548 1,794,583 Taxation 16 (1,754,279) (857,001) (664,268) (343,306) Profit/ (Loss) for the period 15,962,764 8,185,232 3,293,280 1,451,277 Profit / (Loss) attributable to: Owners of the parent 7,062,299 3,275,810 3,293,280 1,451,277 Non controlling interest 8,900,465 4,909,422 - - Other comprehensive income Items that may be reclassified to profit or loss: Changes in the fair value of available-for-sale (equity securities) 23 (917,038) 1,997,790 (917,038) 1,997,790 Total comprehensive income for the period 15,045,726 10,183,022 2,376,242 3,449,067 Attributable to: Owners of the parent 6,145,261 5,273,600 2,376,242 3,449,067 Non controlling interest 8,900,465 4,909,422 - - Basic EPS (kobo) 27 17.37 8.06 8.10 3.57 Diluted EPS (kobo) 27 17.37 8.06 8.10 3.57 The result shown above relate to continuing operations. There are no incomes or expenses from discontinued operations. The notes on pages 7 to 19 are an integral part of these financial statements. 2
Statement of Profit or Loss and Other Comprehensive Income Note July - Sept July - Sept July - Sept July - Sept Revenue 20 25,771,287 22,582,932 2,364,617 1,377,599 Cost of sales 21 (13,383,702) (11,835,742) - - Gross profit 12,387,585 10,747,190 2,364,617 1,377,599 Administrative expenses 24 (3,940,073) (3,746,811) (680,254) (530,895) Other income 22 137,482 276,772 261,961 268,833 Other gains /(loss) - net 23 (2,198) (4,155) - 477 Operating profit 8,582,796 7,272,996 1,946,324 1,116,014 Finance income 25 428,470 143,049 414,321 369,339 Finance cost 25 (2,478,711) (2,494,706) (803,658) (695,008) Foreign exchange loss on financing activities 26 (759,582) (427,632) - - Finance cost -net (2,809,823) (2,779,289) (389,337) (325,669) Profit/ (Loss) before taxation 5,772,973 4,493,707 1,556,987 790,345 Taxation 16 (685,539) (488,475) (236,461) (137,760) Profit/ (Loss) for the period 5,087,434 4,005,232 1,320,526 652,585 Profit / (Loss) attributable to: Owners of the parent 2,345,950 1,686,099 1,320,526 652,585 Non controlling interest 2,741,484 2,319,133 - - Other comprehensive income Items that may be reclassified to profit or loss: Changes in the fair value of available-for-sale (equity securities) 23 (1,013,461) (57,987) (1,013,461) (57,987) Total comprehensive income for the period 4,073,973 3,947,245 307,065 594,598 Attributable to: Owners of the parent 1,332,489 1,628,112 307,065 594,598 Non controlling interest 2,741,484 2,319,133 - - Basic EPS (kobo) 27 5.77 4.15 3.25 1.61 Diluted EPS (kobo) 27 5.77 4.15 3.25 1.61 The result shown above relate to continuing operations. There are no incomes or expenses from discontinued operations. The notes on pages 7 to 19 are an integral part of these financial statements. 3
Statement of Changes in Equity Attributable to owners of the parent Total Non Total Share Share Treasury Other Retained Controlling Controlling equity capital premium shares reserves earnings interest interest Balance at 1 January 20,323,996 6,249,871 (345,819) (14,662) 27,207,214 53,420,600 33,027,997 86,448,597 Profit for the period - - - - 3,275,810 3,275,810 4,909,422 8,185,232 Reclassification to profit or loss - - 345,819 (6,530) - 339,289-339,289 Other comprehensive income - - - 1,997,790-1,997,790-1,997,790 Balance at 20,323,996 6,249,871-1,976,598 30,483,024 59,033,490 37,937,419 96,970,909 Balance at 1 January 20,323,996 6,249,871 0 2,777,781 31,961,979 61,313,627 34,394,170 95,707,797 Profit for the period - - - - 7,062,299 7,062,299 8,900,465 15,962,764 Dividend paid - - - - (812,960) (812,960) - (812,960) Other comprehensive income - - - (917,038) - (917,038) - (917,038) Balance at 20,323,996 6,249,871-1,860,743 38,211,318 66,645,928 43,294,635 109,940,563 #REF! Balance at 1 January 20,323,996 6,249,871 (345,819) (14,662) 27,207,214 53,420,600 33,027,997 86,448,597 Profit for the period - - - - 4,754,765 4,754,765 5,852,511 10,607,276 Dividend paid to non-controlling - interest - - - - - (4,486,338) (4,486,338) Reclassification to profit or loss - - 345,819 (6,530) - 339,289-339,289 Other comprehensive income - - - 2,798,973-2,798,973-2,798,973 Balance at 31 Dec 20,323,996 6,249,871-2,777,781 31,961,979 61,313,627 34,394,170 95,707,797 Share Share Treasury Other Retained Controlling 2016 capital premium shares reserves earnings interest interest Balance at 2016 20,323,996 6,249,871 (345,819) (14,662) 27,207,214 53,420,600 33,027,997 86,448,597 4
Statement of Changes in Equity Attributable to owners of the parent Share Share Other Retained Total capital premium reserves earnings equity Balance at 1 January 20,323,996 6,249,871 97,018 4,274,614 30,945,499 Profit for the period - - - 1,451,277 1,451,277 Reclassification to profit or loss - - (6,530) - (6,530) Other comprehensive income - - 1,997,790-1,997,790 Balance at 20,323,996 6,249,871 2,088,278 5,725,891 34,388,036 Balance at 1 January 20,323,996 6,249,871 2,889,461 6,143,818 35,607,146 Profit for the period - - - 3,293,280 3,293,280 Dividend paid - - - (812,960) (812,960) Reclassification to profit or loss - - - - - Other comprehensive income - - (917,038) - (917,038) Balance at 20,323,996 6,249,871 1,972,423 8,624,138 37,170,428 Balance at 1 January 20,323,996 6,249,871 97,018 4,274,614 30,945,499 Profit for the period - - - 1,869,204 1,869,204 Reclassification to profit or loss - - (6,530) - (6,530) Other comprehensive income - - 2,798,973-2,798,973 Balance at 31 Dec 20,323,996 6,249,871 2,889,461 6,143,818 35,607,146 5
Statement of Cash Flows Note Cash flows from operating activities Cash generated from/(used in) operations 30 30,773,704 14,649,295 555,778 (361,082) Tax paid (709,171) (950,546) (184,437) (140,359) Net cash flows generated from/(used in) operating activities 30,064,533 13,698,749 371,341 (501,441) Cash flows from investing activities Interest received 25 901,057 577,692 839,925 1,088,607 Purchase of intangible assets 6 - - - Proceeds from sale of AFS equity securities - 35,563-35,563 Proceed from sale of property, plant and equipment - - Purchase of property, plant and equipment 5 (11,231,429) (15,267,338) (11,397) (8,519) Net cash flows (used in)/generated from investing activities (10,330,372) (14,654,083) 828,528 1,115,651 Cash flows from financing activities Net movement in borrowings (10,497,936) 7,220,681 2,658,061 1,942,843 Dividend paid (812,960) - (812,960) - Dividend paid to non-controlling interest - - - - Proceeds from sale of treasury shares - 275,909 - - Interest payment 25 (7,492,158) (7,196,178) (2,395,300) (2,233,583) Net cash flows (used in)/generated from financing activities (18,803,054) 300,412 (550,199) (290,740) Net (decrease)/increase in cash and cash equivalents 931,107 (654,922) 649,670 323,470 Cash and cash equivalents at the beginning of the period 5,598,282 2,361,320 339,974 5,026 Foreign exchange loss/(gain) on cash and cash equivalents (15,512) 505-477 Cash and cash equivalents at the end of the period 6,513,877 1,706,904 989,644 328,973 The notes on pages 7 to 19 are an integral part of these financial statements. 6
1. General information, ("the " or "Transcorp"), was incorporated on 16 November, 2004 as a private limited liability domiciled in Nigeria in accordance with the requirements of the Companies and Allied Matters Act. Following a successful initial public offer (IPO), the was in December 2006, listed on the Nigerian Stock Exchange. The shares of the have continued to be traded on the floor of the Exchange. The is domiciled in Nigeria and the address of its registered office is 38 Glover Road, Ikoyi, Lagos, Nigeria. The maintains controlling interests in the following companies. The, together with the subsidiaries are known as the Transcorp, ("the ") - Capital Leisure and Hospitality Limited - Transcorp Hotels Plc - Transcorp Hotels Calabar Limited - Transcorp Energy Limited - Teragro Commodities Limited - Transcorp Power Limited - Transcorp Staff Share Ownership Trust Limited - Transcorp Properties Limited - Transcorp OPL 281 Limited - Transcorp Telecomms Limited - Transcorp Trading and Logistic Limited - Transcorp Refining Limited - Transcorp Hotels Ikoyi Limited - Transcorp Hotels Port Harcourt Limited The s business is investment and operation of portfolio companies in the hospitality, power, agro-allied and oil & gas sectors. 2. Summary of significant accounting policies 2.1 Basis of preparation The condensed consolidated financial statements have been prepared in accordance with the Companies and Allied Matters Act (CAMA), IAS 34 Interim Financial Reporting, International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The financial statements have been prepared on a historical cost basis except for available-for-sale financial assets, financial assets and liabilities and investment property measured at fair value. The condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the s annual financial statements as at 31 December. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 3. The preparation of financial statements, in conformity with generally accepted accounting principles under IFRS, requires the directors to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the directors' best knowledge of the amounts, events or actions, actual results ultimately may differ from those estimates. The financial statements have been prepared on a historical cost basis except for the fair value basis applied to certain intangible assets, investment property and equity investments. All values are rounded to the nearest thousand (N 000), except when otherwise indicated. 7
3 Fair value estimation The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: - (Level 1): Quoted prices (unadjusted) in active markets for identical assets or liabilities. - (Level 2): Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). - (Level 3): Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). At Assets Level 1 Level 2 Level 3 Total Financial assets at fair value through other comprehensive income Equity securities at fair value through OCI 4,054,315 - - 4,054,315 At Assets Level 1 Level 2 Level 3 Total Financial assets at fair value through profit or loss Equity securities at fair value through profit or loss 4,971,353 - - 4,971,353 There were no transfers between levels 1 and 2 during the year. (a) Financial instruments in level 1 The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm s length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily equity investments listed on the Nigerian Stock Exchange (NSE) classified as equity securities at fair value through other comprehensive income. 4 Segment analysis The The chief operating decision-maker has been identified as the Board of Directors of Transcorp. The Board reviews the s internal reporting in order to assess performance and allocate resources. The directors have determined the operating segments based on these reports. The Board considers the business from an industry perspective and has identified 5 operating segments. i Hospitality The hospitality business is made up of its direct subsidiary Transcorp Hotels Plc. (THP) and indirect subsidiaries, Transcorp Hotels Calabar Limited (THC), Transcorp Hotels Ikoyi Limited and Transcorp Hotels Port Harcourt Limited. These entities render hospitality services to customers. ii iii Agro-allied This relates to a subsidiary Teragro Commodities Limited. The subsidiary is engaged in the manufacturing/processing of fruit concentrates from fruits from which the derives revenue. Power This relates to a subsidiary Transcorp Power Limited (TPL). The subsidiary is engaged in generation of electric power. iv Oil & Gas Two subsidiaries make up the oil & gas segment namely Transcorp Energy Limited and Transcorp OPL 281 Limited. The companies are into the exploration, refining and marketing of petroleum products. The subsidiaries are in the start-up phase and have not started generating revenue. v Corporate Centre This segment is the parent, and the other non-operational subsidiaries. The Board assesses the performance based on operating profits for each operating segment that is reviewed by the Board. Other information provided, except as noted below, to the Board is measured in a manner consistent with that of the financial statements. Sales between segments are carried out at arm s length. The revenue from external parties reported to the group is measured in a manner consistent with that in the income statement. 8
Total segment assets exclude tax related assets. These are included in the reconciliation to the total statement of financial position assets. As at ember Hospitality Oil & gas Agro-allied Power Corporate centre Intersegment elimination Total Revenue 12,670,740 - - 67,190,014 6,642,684 (6,642,684) 79,860,754 Finance income 11,027 - - 50,105 839,925-901,057 Finance cost - - 33,182 6,685,050 2,395,300-9,113,532 Depreciation and 719,344 - - 1,979,802 5,569-2,704,715 amortisation Profit/(loss) before 3,451,859 - - 17,022,704 3,957,548 (6,715,068) 17,717,043 taxation Taxation 1,090,011 - - - 664,268-1,754,279 Segmental assets 105,989,682 4,855,475 258,454 155,385,030 64,286,276 (32,163,124) 298,611,793 Segmental liabilities 47,180,029 5,172,571 1,724,832 120,771,484 27,115,844 (13,293,530) 188,671,230 Net assets 58,809,653 (317,096) (1,466,378) 34,613,546 37,170,432 (18,869,594) 109,940,563 As at ember Corporate Intersegment Hospitality Oil & gas Agro-allied Power centre elimination Total Revenue 9,787,897 - - 46,968,897 3,433,061 (3,433,061) 56,756,794 Finance income 174,066 - - 830 1,088,607 (685,810) 577,693 Finance cost - - - 6,797,743 2,233,583 (685,810) 8,345,516 Depreciation and amortisation 772,760 - - 1,703,938 8,465-2,485,163 Profit/(loss) before 1,673,740 - - 9,436,773 1,794,583 (3,862,863) 9,042,233 taxation Taxation 513,695 - - - 343,306-857,001 Segmental assets 107,459,361 5,105,459 334,917 147,518,024 63,094,512 (37,989,969) 285,522,304 Segmental liabilities 51,038,659 5,578,670 2,050,148 131,911,931 27,487,366 (28,252,267) 189,814,507 Net assets 56,420,702 (473,211) (1,715,231) 15,606,093 35,607,146 (9,737,702) 95,707,797 Revenues from transactions with other operating segments relates to dividend income from Transcorp Hotels Plc and Transcorp Power Limited to the,. The totals presented for the s operating segments reconcile to the key financial figures as presented in its financial statements as follows: Revenue Total revenue for reportable segments 86,503,438 60,189,855 Elimination of inter-segment revenue (i) (6,642,684) (3,433,061) External revenue 79,860,754 56,756,794 Profit or loss Total (loss) or profit for reportable segments 24,432,111 12,905,096 Elimination of inter-segment profits (ii) (6,715,068) (3,862,863) Consolidated (loss) or profit before taxation 17,717,043 9,042,233 Assets Total assets of reportable segments 330,774,917 323,512,274 Consolidation eliminations (iii) (32,163,124) (37,989,969) Consolidated total assets 298,611,793 285,522,304 Liabilities Total liabilities of reportable segments 201,964,760 218,066,775 Consolidation eliminations (iv) (13,293,530) (28,252,268) Consolidated total liabilities 188,671,230 189,814,507 The nature of differences between the measurements of the reportable segment's assets/liabilities and the assets/liabilities of the is as follows: 9
4 Segment analysis (continued) (i) Elimination of inter-segment revenue relates to dividend income from Transcorp Power Limited and Transcorp Hotels Plc to Transnational Corporation of Nigeria Plc. (ii) Elimination of inter-segment profits relates to dividend income between the segments and other income arising from transactions with noncontrolling interests. (iii) Investments of in its subsidiaries and investment of Transcorp Hotels Plc in Transcorp Hotels Calabar Limited, Transcorp Hotels Port Harcourt Limited and Transcorp Hotels Ikoyi limited respectively accounts for the consolidation eliminations of total assets of reportable segments. Inter-segment receivables were also eliminated to arrive at the consolidated total assets. (iv) Inter-segment payables, dividend payable to segments within the and management fees payable and interest payable to Transnational Corporation of Nigeria Plc from Transcorp Hotels Plc accounts for the consolidation eliminations in total liabilities of the reportable segments. Entity-wide information The following is an analysis of the 's revenue from continuing operations from its major products and services. Analysis of revenue by category: Rooms 7,863,837 6,108,544 Food and beverage 3,764,312 2,742,426 Shop rental 481,635 469,402 Service charge 83,791 89,505 Other operating revenue 477,165 378,020 Capacity charge 23,678,208 16,570,089 Energy sent out 43,441,306 30,294,108 Ancillary services 70,500 104,700 Total 79,860,754 56,756,794 The is domiciled in Nigeria where it generates all its external revenue. The total non-current assets of the are all located in Nigeria. 10
5 Property, plant and equipment (PP&E) Building & Plant & Furniture & Computer & office Capital work Land improvements machinery fittings equipments Motor vehicles in progress Total Cost Balance as at 1 January 35,588,745 17,606,754 52,201,428 3,184,912 123,550 688,255 31,731,727 141,125,371 Additions 309,609 79,161 5,428,784 26,478 273,606 55,703 11,325,667 17,499,007 Interest Capitalised - - - - - - 3,168,732 3,168,732 Reclassification - 181 6,036,816 - - 29,500 (6,066,497) - Disposals - - (4,578) (304) (155,828) (40,554) - (201,264) Write off - - (75,541) (5,935) - - (8,778) (90,254) Balance as at 35,898,354 17,686,096 63,586,909 3,205,151 241,328 732,904 40,150,851 161,501,592 Balance as at 1 January 35,898,354 17,686,096 63,586,909 3,205,151 241,328 732,904 40,150,851 161,501,592 Additions 25,214 24,641 696,519 234,332 9,434 37,514 10,203,774 11,231,429 Reclassification - - 17,429 - - - (17,429) - Disposals - - - (26,609) - (46,786) - (73,395) Balance as at 35,923,568 17,710,737 64,300,857 3,412,874 250,762 723,632 50,337,196 172,659,626 Depreciation and impairment losses Balance as at 1 January - 2,260,200 11,475,909 2,264,320 50,735 413,646-16,464,810 Depreciation - 418,618 2,537,432 45,944 338,967 105,603-3,446,565 Disposals - - (2,477) (51) (155,432) (17,559) - (175,519) Write off - - (57,786) (12,069) - - - (69,855) Balance as at - 2,678,818 13,953,078 2,298,144 234,270 501,690-19,666,001 Balance as at 1 January - 2,678,818 13,953,078 2,298,144 234,270 501,690-19,666,001 Depreciation - 309,326 2,065,668 249,103-61,151-2,685,248 Disposals - - - (11,087) - (26,364) - (37,451) Balance as at - 2,988,144 16,018,746 2,536,160 234,270 536,477-22,313,797 Net book value At 35,898,354 15,007,278 49,633,831 907,007 7,057 231,214 40,150,851 141,835,592 At 35,923,568 14,722,593 48,282,111 876,714 16,491 187,155 50,337,196 150,345,829 11
5 Property, plant and equipment (continued) Building & Plant & Furniture & Computer & office Motor improvements Machinery fittings equipments vehicles Total Cost Balance as at 1 January 28,862 4,618 29,608 27,288 7,975 98,351 Additions - 7,715 322 1,383-9,420 Disposals - (3,562) - (634) - (4,196) Balance as at 28,862 8,771 29,930 28,037 7,975 103,575 Balance as at 1 January 28,862 8,771 29,930 28,037 7,975 103,575 Additions - - 1,963 9,434-11,397 Disposals - - - - - - Balance as at 28,862 8,771 31,893 37,471 7,975 114,972 Depreciation and impairment losses Balance as at 1 January 24,622 1,796 19,347 24,300 7,036 77,101 Depreciation for the year 3,700 1,115 3,781 945 293 9,835 Disposals - (1,461) - (238) - (1,699) Balance as at 28,322 1,450 23,128 25,007 7,329 85,237 Balance as at 1 January 28,322 1,450 23,128 25,007 7,329 85,237 Depreciation for the year 232 579 2,967 1,792 5,569 Disposals - - - Balance as at 28,554 2,029 26,095 26,799 7,329 90,806 Net book value At 540 7,321 6,802 3,029 646 18,338 At 308 6,742 5,798 10,672 646 24,166 Depreciation is allocated as follows; Cost of sales 2,027,816 1,766,393 Administrative expenses 657,431 718,770 2,685,247 2,485,163 All depreciation expenses for the company are charged to administrative expenses. 12
6 Intangible assets Goodwill Computer software Oil Prospecting License Exploration and evaluation expenditure Total Computer software Oil Prospecting License Total Cost At 1 January 30,934,143 210,246 5,075,818 2,843,098 39,063,305 12,966 5,075,818 5,088,784 Addition - 47,924-537,650 585,574 - - - As at 30,934,143 258,170 5,075,818 3,380,748 39,648,879 12,966 5,075,818 5,088,784 At 1 January 30,934,143 258,170 5,075,818 3,380,748 39,648,879 12,966 5,075,818 5,088,784 Addition - - - - - - - - Disposal - (1,098) - - (1,098) - - - As at 30,934,143 257,072 5,075,818 3,380,748 39,647,781 12,966 5,075,818 5,088,784 Accumulated amortisation At 1 January - 111,336 - - 111,336 12,682-12,682 Amortisation charge - 20,203 - - 20,203 284-284 As at - 131,539 - - 131,539 12,966-12,966 At 1 January - 131,539 - - 131,539 12,966-12,966 Amortisation charge - 19,468 - - 19,468 - - - As at - 151,007 - - 151,007 12,966-12,966 Net book value At 30,934,143 126,631 5,075,818 3,380,748 39,517,340-5,075,818 5,075,818 At 30,934,143 106,065 5,075,818 3,380,748 39,496,774-5,075,818 5,075,818 Goodwill is not amortised but tested for impairment annually. The Production Sharing Contract between Transcorp and the Nigerian National Petroleum Corporation was signed by the Federal Government of Nigeria on 2 May 2014. Per the agreement, the exploration period is for 5 years after which the OPL converts to an Oil Mining License for a period of 20 years. Amortisation of the OPL cost will commence when it has been determined that commercial quantity of crude can be produced from the oil field and mining commences. 13
7 Investment property Non-current assets - at fair value At 1 January 1,706,600 1,706,600 1,706,600 1,706,600 At 1,706,600 1,706,600 1,706,600 1,706,600 8 Investment in subsidiaries Transcorp Hotels Plc 19,618,523 19,618,523 Transcorp Power Limited 7,860,464 7,860,464 Other subsidiaries companies 50,900 50,900 Movement in investment in subsidiaries is analysed as follows: 27,529,887 27,529,887 At 1 January 27,529,887 27,549,287 Liquidation of subsidiaries - (19,400) At 27,529,887 27,529,887 9 Deferred tax The balance of Deferred tax assets/ (Liabilities) as at is as follows: Deferred tax assets 3,348,918 3,348,918 Deferred tax liabilities (7,159,053) (7,159,053) (3,810,135) (3,810,135) 10 Prepaid lease rental At 1 January 69,751 88,702 Utilisation (22,500) (18,951) At ember 47,251 69,751 Less: minimum lease payments for the next 12 months (30,000) (16,741) Non current lease payments 17,251 53,010 Non current lease payments has been analysed as follows: Due between 1 to 5 years 17,251 53,010 11 Inventories Food and beverage 149,619 231,431 Fuel/lubricant 98,478 100,659 Spares 4,261,353 4,188,812 Guest supplies 122,135 117,540 Finished goods - 16,286 Packaging materials - 8,752 Other sundry stock 7,274 6,153 4,638,859 4,669,633 Less Impairment - (23,024) 4,638,859 4,646,609 14
12 Trade and other receivables Trade receivables 82,633,208 79,097,637 - - Less: provision for impairment (1,509,256) (1,298,025) - - Trade receivables - net 81,123,952 77,799,612 - - Other receivables 5,535,225 4,680,420 3,651,654 3,888,518 Prepayments 988,476 356,058 342,505 77,040 Due from related companies 811,718 991,769 20,911,680 19,495,242 88,459,371 83,827,859 24,905,839 23,460,800 13 Debt and equity securities and Non-current portion Equity securities at fair value through OCI 4,054,315 4,971,353 - - 4,054,315 4,971,353 See movement in debt and equity securities below: and At 1 January 4,971,353 2,207,943 Fair value gain/(loss) (917,038) 2,798,973 Liquidation - (35,563) At 4,054,315 4,971,353 14 Cash and cash equivalents Cash and bank balance 6,513,876 5,598,282 989,644 339,974 15 Trade and other payables A significant portion of the trade receivable relates to receivable from the Transmission of Nigeria Plc and Nigerian Bulk Electricity Trading Plc which are the government regulated bodies for the power business. Included in cash and bank balance for the is balance held at First Bank of Nigeria Plc of N210 million which is restricted due to a current court lien placed on it since May 2012 as a result of an existing court case between Lagos State Government and defunct Trade creditors 43,608,690 41,054,748 - - Accruals and other liabilities 16,029,794 15,688,366 265,999 305,016 Unearned income 3,002,843 3,092,164 - - Deposit from guests 135,511 127,203 - - VAT payable 77,985 262,783 19,565 135,930 Dividend payable 655,609 4,384,921-321,000 Due to related companies 10,310,360 236,789 563,327 2,940,353 73,820,792 64,846,974 848,891 3,702,299 15
16 Taxation Income tax 1,090,011 145,089 - - Education tax - 9,673 - - 1,090,011 154,762 - - Tax on franked investment income 664,268 83,611 664,268 83,611 Deferred tax (Note 10) - - - - 1,754,279 238,373 664,268 83,611 The movement in tax payable is as follows: At 1 January 1,424,147 4,137,597 225,015 196,580 Provision for the year 1,090,011 1,178,185-186,334 Payment during the year (709,171) (3,891,635) (184,437) (157,899) At 1,804,987 1,424,147 40,578 225,015 17 Borrowings Falling due within a year Bank borrowings 23,259,827 33,093,017 9,989,952 10,223,020 Unsecured bond 3,005,000 3,416,371 - - 26,264,827 36,509,388 9,989,952 10,223,020 Falling due after one year Bank borrowings 63,355,249 62,336,844 14,361,420 11,470,290 Unsecured bond 11,981,322 13,253,101 - - 75,336,571 75,589,945 14,361,420 11,470,290 Total 101,601,398 112,099,334 24,351,372 21,693,310 18 Deposit for shares Based on the Memorandum of Understanding between Transcorp Hotels Plc and Heirs Holdings Limited, Transcorp Hotels Ikoyi Limited (THIL) will issue shares to Heirs Holdings Limited on completion of the construction and start of operation of the hotel. Deposit for shares relates to Heirs Holding Nigeria Limited's contribution to the development of Transcorp Hotels Ikoyi Limited (THIL). 19 Advance deposits & company Sacoil / Equity, Energy and Resource (EER) farm-in fees 1,875,000 1,875,000 Payment of N1.875 billion (2016: N1.875 billion) relates to farm-in fee of $12.5 million received from EER/SacOil being part of the consideration for the interest of EER and SacOil in Oil Prospecting License 281 (OPL 281). The farm-in process has not been completed. 16
20 Revenue The group derives the following types of revenue: Rooms 7,863,837 6,108,544 - - Food and beverage 3,764,312 2,742,426 - - Shop rental 481,635 469,402 - - Service charge 83,791 89,505 - - Other operating revenue 477,165 378,020 - - Dividend income - - 6,642,684 3,433,061 Capacity charge 23,678,208 16,570,089 - - Energy sent out 43,441,306 30,294,108 - - Ancillary services 70,500 104,700 - - All recognised revenue were generated in Nigeria. 79,860,754 56,756,794 6,642,684 3,433,061 21 Cost of sales Rooms 34,097 28,958 Staff costs 2,916,929 2,413,303 Food and beverage 1,125,915 835,788 Natural gas and fuel costs 35,468,862 24,753,912 Other direct expenses 388,931 398,960 Repairs and maintenance 739,578 749,824 Depreciation 2,027,816 1,766,393 Insurance 182,446 165,221 Other operating departments 15,970 22,215 42,900,544 31,134,574 22 Other income Dividend income on equity securities 368,000 325,709 368,000 325,709 Management fees from subsidiaries - - 525,000 525,000 Profit on disposal of equity investment - 118,336 - - Profit/ (loss) on fixed asset disposal 2,684-106 533 Other income 171,367 138,692 11,171 13,139 542,051 582,737 904,277 864,381 23 Other gains/(losses) - net Included in profit or loss Foreign exchange gain/(loss) (15,512) 505-477 (15,512) 505-477 Included in other comprehensive income Fair value gain/(loss) on equity securities (917,038) 1,997,790 (917,038) 1,997,790 17
24 Administrative and general expenses Staff costs 2,540,541 1,472,803 318,302 300,397 Depreciation 657,431 718,770 5,569 8,253 Amortisation 19,468 9,356-212 Auditors' remuneration 103,347 57,195 33,910 26,250 Management and incentive fees 2,416,348 1,692,611 304,792 270,925 Professional fees 403,007 421,017 67,119 67,950 Director's remuneration 247,330 182,606 112,884 73,138 Rent and rates 76,329 45,000 53,829 22,500 Loss on asset disposal - 22,715 - - Repairs and maintenance 575,596 430,908 5,298 5,534 Advertising 5,381 5,007 5,381 5,007 service benefits 239,503 182,673 - - Insurance 225,751 1,003 9,361 973 Eletricity and diesel cost 952,645 941,516 9,826 11,998 Travel and accommodation 220,646 101,263 53,989 57,191 Licenses and fees 23,254 29,979 23,254 29,979 Marketing and promotion 158,107 182,440 - - Bank charges 217,705 356,464 5,550 10,465 Provision for bad debts 210,000 280,000 - - Provision for impairment 800,315-800,315 - Corporate social responsibilty cost - 700-700 Other operating expenses 1,464,527 2,261,378 224,659 466,888 Other operating expenses include costs incurred on security services, subscription and fees and lease rentals. 11,557,231 9,395,404 2,034,038 1,358,360 25 Finance costs and income Finance costs: Interest expense on loans 7,492,158 7,196,178 2,395,300 2,233,583 Interest expense on loans 7,492,158 7,196,178 2,395,300 2,233,583 Finance income: Interest on loan 901,057 577,692 839,925 1,088,607 901,057 577,692 839,925 1,088,607 26 Net foreign exchange losses The exchange differences charged/credited to the income statement are included as follows: Foreign exchange loss on borrowings 1,621,374 1,149,339 - - The movement in foreign exchange differences is as result of the decline in the value of the Nigerian Naira against the US Dollars by N108.5/$1 27 Earnings per share Basic earnings/ (loss) per share is calculated by dividing the profit/ (loss) attributable to equity holders of the by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the and held as treasury shares. Profit attributable to shareholders 7,062,299 3,275,810 3,293,280 1,451,277 Weighted average number of ordinary shares in issue 40,647,991 40,647,991 40,647,991 40,647,991 Basic earnings per share (Kobo) 17.37 8.06 8.10 3.57 Diluted earnings per share (Kobo) 17.37 8.06 8.10 3.57 28 Share capital a Authorised: 45,000,000,000 ordinary shares of 50kobo each 22,500,000 22,500,000 22,500,000 22,500,000 Allotted, called up and fully paid: and Number of shares (thousands) Ordinary shares Total At 1 January 40,647,991 20,323,996 20,323,996 Bonus issue - - - At 40,647,991 20,323,996 20,323,996 18
b Share premium and At 1 January 6,249,871 6,249,871 At 6,249,871 6,249,871 29 Non controlling interest Transcorp Hotels Plc (THP) Transcorp Power Limited (TPL) Transcorp Hotels Ikoyi Limited At 1 January 26,812,274 7,581,056 840 34,394,170 THP profit for the period 390,400 - - 390,400 TPL profit for the period - 8,510,065-8,510,065 At 27,202,674 16,091,121 840 43,294,635 30 Cash generated from operating activities Profit /(Loss) before tax 17,717,043 9,042,233 3,957,548 1,794,583 Adjustment for: Depreciation of PP&E (Note 6) 2,685,248 2,485,163 5,569 8,253 Write off - - Profit on disposal of AFS equity securities - - Loss on disposal of PP&E - 22,715 - Amortization of intangible assets 19,468 9,356-212 Loss on disposal of treasury shares - - Fair value gain on equity securities - (6,530) (6,530) Finance cost 7,492,158 8,345,516 2,395,300 2,233,583 Finance income (Note 26) (901,057) (577,692) (839,925) (1,088,607) Foreign exchange loss/ (gain) 1,621,374 1,149,339 - Changes in working capital: Increase in trade, other receivables and prepayment (6,842,098) (33,750,423) (1,445,039) (1,350,190) Increase in inventories 7,750 (132,312) - - Increase/(decrease) in trade and other payables 8,973,818 28,061,930 (3,517,675) (1,952,386) Net cash generated from/(used in) operations 30,773,704 14,649,295 555,778 (361,082) 31 Contingent liabilities Apart from the issue mentioned in note 19, there were no other material litigations in the ordinary course of business as at the balance sheet date. The directors are of the opinion that all known liabilities which are relevant in assessing the state of affairs of the have been taken into consideration in the preparation of these financial statements. 32 Subsequent events No subsequent event after the balance sheet date came to the notice of the directors, which would materially affect the position shown by the financial statements on the balance sheet date. 19