1, Prince Kayode Akingbade Victoria Island Annex Lagos, Nigeria Tel: +234 (1) 2705757 +234 (1) 2705656 +234 (1) 8099000092 Fax: +234 (1) 461745 mail: info@caverton-offshor www.caverton-offshore.com CAVERTON OFFSHORE SUPPORT GROUP PLC Lagos, Nigeria UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2018 Directors: Mr. Aderemi Makanjuola (Chairman), Olabode Makanjuola (CEO), Mr. Raymond Ihyembe (Independent director), Mr. Akin Kekere-Ekun (Non-executive director), Mr Bashir Bakare (Non-executive director), Mallam Bello Gwandu (Non-executive director), Mr. Akinsola Falola (Non-executive director), HRM. Maduka Edmund Daukoru (Non-executive director), Captain Josiah Choms (executive director), Mrs. Titilola Adigun (Chief Financial Officer) Caverton Offshore Support Plc Registered in Nigeria No. 750603
Unaudited Consolidated and Separate Financial Statements For the period ended 30 June 2018 Page Statement of Profit or Loss and Comprehensive Income 1 Statement of Financial Position 2 Statement of Changes in Equity 3 Statement of Cash Flows 4 Notes to the Financial Statements 5-12
Statement of profit or loss for the period ended 30 June 2018 Notes April to June 2018 June 2018 April to June 2017 June 2017 April to June 2018 June 2018 April to June 2017 June 2017 Revenue 1 9,661,755 14,222,221 5,008,295 10,112,729 - - - - Operating expenses 2 (6,060,569) (8,810,465) (3,150,829) (6,612,781) - - - - Operating Profit 3,601,186 5,411,756 1,857,466 3,499,948 - - - - Administrative expenses 3 (1,678,295) (2,639,699) (1,032,854) (1,953,194) (101,118) (134,242) (45,800) (80,490) Other operating income 4 8,117 52,554 80,809 150,308 - - - - Total Operating Profit 1,931,008 2,824,611 905,421 1,697,062 (101,118) (134,242) (45,800) (80,490) - - - - Finance cost 5 (850,890) (1,267,973) (322,778) (759,036) - (4) (6) Profit before income tax expense 1,080,118 1,556,638 582,643 938,026 (101,118) (134,242) (45,804) (80,496) Income tax expense 6 (411,200) (594,187) (202,878) (343,442) (9,623) (20,735) - (4,188) Profit for the year 668,918 962,451 379,765 594,584 (110,741) (154,977) (45,804) (84,684) Profit attributable to: Owners of the 952,826 588,638 Non-controlling interests 9,625 5,946 962,451 594,584 Basic Earnings per share (N) 9 0.29 0.18-0.05-0.03 Olabode Makanjuola - Chief Executive Officer FRC/2013/IODN/00000002456 Titi Adigun - Chief Finance Officer FRC/2013/ICAN/00000002398
Statement of financial position at as 30 June 2018 Notes June 2018 December 2017 June 2018 December 2017 N'000 N'000 N'000 N'000 Assets Non current assets Property, plant and equipment 10 24,327,311 22,071,147 - - Intangible assets 11 6,305 11,489 Deffered Tax assets 8 285,278 285,278 55,587 55,587 Goodwill 6,026,909 6,026,909 Investment in subsidiaries - - 8,514,000 8,514,000 30,645,803 28,394,823 8,569,587 8,569,587 Current assets ; Cash and bank 14 1,481,353 2,430,494 2,058 2,503 Trade and other receivables 13 15,046,526 13,142,648 1,184,424 1,891,911 Prepayments 16 76,320 27,095 - Inventories 12 2,252,254 2,251,103 - - 18,856,453 17,851,340 1,186,482 1,894,414 Total assets 49,502,256 46,246,163 9,756,069 10,464,001 Equity and liabilities Equity Ordinary share capital 17 1,675,255 1,675,255 1,675,255 1,675,255 Share premium 17 6,616,991 6,616,991 6,616,991 6,616,991 Retained earnings 7,868,091 7,417,841-18,943 638,610 Non-Controlling Interest 103,225 93,600 - - Total equity 16,263,562 15,803,687 8,273,303 8,930,856 Non-current liabilities Interest-bearing loans and borrowings 18 15,342,913 12,680,699 - - Deferred tax liabilities 8 724,100 724,100 - - Deferred revenue 19 3,846 196,706 - - 16,070,859 13,601,505 - - Current liabilities Trade and other payables 20 14,754,528 11,322,344 1,131,431 1,156,611 Interest-bearing loans and borrowings 18 784,282 3,769,407 - - Deferred revenue 21 589,391 618,218 - Income tax payable 7 1,039,634 1,131,002 351,335 376,534 17,167,835 16,840,971 1,482,766 1,533,145 - - Total liabilities 33,238,694 30,442,476 1,482,766 1,533,145 Total equity and liabilities 49,502,256 46,246,163 9,756,069 10,464,001 Olabode Makanjuola - Chief Executive Officer FRC/2013/IODN/00000002456 Titi Adigun - Chief Finance Officer FRC/2013/ICAN/00000002398 2
Statement of Changes in Equity as at 30 June 2018 GROUP COMPANY Issued Share Capital Share premium Retained Earnings Total Non controlling interest Total Equity Issued Share Capital Share premium Retained Earnings Total N 000 N 000 As at 1 January 2018 1,675,255 6,616,991 7,417,841 15,710,087 93,600 15,803,687 1,675,255 6,616,991 638,610 8,930,856 Profit for the year - - 952,826 952,826 9,625 962,451 - - (154,977) (154,977) Dividend (502,576) (502,576) - (502,576) (502,576) (502,576) At 30 June 2018 1,675,255 6,616,991 7,868,091 16,160,337 103,225 16,263,562 1,675,255 6,616,991 (18,943) 8,273,303 As at 1 January 2017 1,675,255 6,616,991 4,824,341 13,116,587 77,272 13,193,859 1,675,255 6,616,991 (338,431) 7,953,815 Profit for the year - - 2,593,500 2,593,500 28,328 2,621,828 - - 977,041 977,041 Dividend to NCI from CHL (12,000) (12,000) Dividend - - - - - At 31st December 2017 1,675,255 6,616,991 7,417,841 15,710,087 93,600 15,803,687 1,675,255 6,616,991 638,610 8,930,856 3
Statements of cash flows for the period ended 30 June 2018 June December June December Notes Operating activities Profit/(loss) before tax 1,556,639 3,907,099 (134,242) 1,002,710 Non-cash adjustment to reconcile profit before tax to net cash flows Depreciation of property, plant and equipment 10 766,789 941,467 - - Amortisation and impairment of intangible assets 11 5,184 10,371 - - Amortisation of government grant - (191,521) - - Finance costs - interest 1,190,381 1,423,699 - - Finance income (10,347) (38,052) - - Effect of foreign exchange differences on cash - (960,702) - - Profit on sale of property, plant and equipment - (472,953) - - Impairment loss - 467,647 - - Intangible asset written off - - - - Working capital adjustments: (Increase)/Decrease in trade and other receivables (1,914,480) (1,838,632) 682,307 (919,474) Increase in due from related parties - (969,398) - Increase in prepayments (49,226) (4,199) - - Increase in inventories (1,152) (400,927) - - Increase /(decrease) in trade and other payables 1,887,422 732,803 - (43,253) Increase/(Decrease) in Due to related parties - (73,434) - - 3,431,210 2,533,268 548,065 39,983 Income tax paid (70,000) (190,478) (45,934) (40,338) Net cash flows from operating activities 3,361,210 2,342,790 502,131 (355) Investing activities Proceeds from sale of property, plant and equipment - - - - Purchase of property, plant and equipment 10 (3,022,953) (2,423,563) - - Proceeds from scrapped sales - 472,953 - - Purchase of intangible assets - - - - Interest received 10,347 38,052 - - Net cash flows from/(used in) investing activities (3,012,606) (1,912,558) - - Financing activities Proceeds from borrowings - 3,127,966 - - Repayment of borrowings 800,559 (2,585,268) - - Interest paid (1,190,381) (1,423,699) - - Dividend paid on NCI - (12,000) - - Dividend paid (502,576) - (502,576) - Net cash flows from/(used in) financing activities (892,397) (893,001) (502,576) - Net increase/(decrease) in cash and cash equivalents (543,793) (462,769) (445) (355) Cash and cash equivalents at 1 January 2,024,011 2,486,780 2,503 2,858 Cash and cash equivalents at 30 June 1,480,218 2,024,011 2,058 2,503
Notes to the Financial Statements 1 Revenue June June June June Helicopter Charter 310,922 570,896 - - Helicopter maintenance 4,673 1,202 - - Helicopter/ Airplane contract 13,827,924 9,384,064 - - Vessel Time charter 49,850 56,766 - - Dividend Income - - - - Vessel Agency Service 28,852 99,801 - - 14,222,221 10,112,729 - - 2 Operating expenses June June June June Aircraft insurance premium 352,261 202,389 - - Aircraft rentals 2,587,865 2,476,492 - - Crew Salaries 2,698,658 2,139,265 - - Aviation fuel and spare parts 3,038,178 1,634,271 - - Landing and Navigational expenses 122,081 92,937 - - Vessel Charter hire - 63,875 - - Other direct costs - Vessel 11,422 3,552 - - - - - - 8,810,465 6,612,781 - - 3 Administrative expenses June June June June Audit fee 11,500 - - - Employee benefit expense 568,901 466,235 17,875 49,312 Business development 6,333 6,623 - - Depreciation 766,421 453,196 - - Amortisation 5,185 5,185 - - Property and Equip write off 1,164 - - - Communication 42,932 28,576 - - Exchange loss -12,103 73,307 - - Donations 2,647 1,820 - - Management expenses 188,035 121,363 67,255 10,560 Fuel and diesel 25,901 66,603 - - Insurance 15,504 4,999 - - Legal and professional fees 46,321 29,592 - - Licence and levy 7,975 6,871 - - Printing 2,797 2,884 - - 5
Notes to the Financial Statements -Continued Repairs and maintenance 121,219 55,664 - - Transport and travels 265,927 197,380 - - Other expenses and overheads 573,040 432,895 49,112 20,618 2,639,699 1,953,189 134,242 80,490 4 Other operating income June June June June Interest Income 10,347 9,911 - - Profit on disposal of property plant and equipment - - - - Investment profit - - - - Exchange gain/(loss) - 13,679 - - Sundry - - - - Grant income 24,872 117,247 - - Others 17,335 9,471 - - - 52,554 150,308 - - June June June June 5 Finance cost Interest on debts and borrowings 1,267,973 759,036-6 June June June June 6 Income tax Current income tax: Current income tax charge 558,202 322,918 20,735 4,188 Education tax 35,469 20,524 - - Under provision of previous year 516 - - - Deferred tax charge - - - - Income tax expense reported in the income statement 594,187 343,442 20,735 4,188 June December June December 7 Reconciliation of current tax liabilities Opening balance at 1 January 2018 1,131,002 740,559 376,534 365,811 Tax charge in the statement of profit or loss 593,671 791,230 20,735 45,934 Under provision in prior year adjustment 516 37,904-35,322 Payment during the year (24,066) (190,478) - (40,338) Witholding tax credit utilized (661,489) (248,213) (45,934) (30,195) Closing balance at 30 June 2018 1,039,634 1,131,002 351,335 376,534 6
Notes to the Financial Statements -Continued June December June December 8 Net deferred tax assets/(liabilities) Reflected in the statement of financial position as follows Deferred tax assets (285,278) (285,278) (55,587) (55,587) - Deferred tax liabilities 724,100 724,100 - - Net deferred tax assets /(liabilities) 438,822 438,822 (55,587) (55,587) - 9 Earnings per Share June June June June Average number of shares outstanding 3,350,510 3,350,510 3,350,510 3,350,510 Net Income attributable to equity holders 962,451 594,584 (154,977) (84,684) Basic earnings per share in Naira 0.29 0.18-0.05-0.03 7
Notes to the Financial Statements -Continued 10 Property,plant and equipment Land Building structures Aircraft Plant and Machinery Aircraft Equipments Motor Vehicles Furniture fittings and office equipments Construction WIP N 000 Cost At 1 January 2018 5,470,965 3,623,528 12,336,953 69,940 87,633 151,756 375,586 7,167,933 29,284,294 Additions - - 2,933,101 - - 34,192 3,359 52,300 3,022,952 Disposals - - At 30 June 2018 5,470,965 3,623,528 15,270,054 69,940 87,633 185,948 378,945 7,220,233 32,307,246 - Depreciation At 1 January 2018 261,944 1,679,214 4,645,553 50,695 68,586 147,947 359,208-7,213,147 Charge for the year 28,567 82,726 645,002 3,608 929 1,624 4,332-766,788 Depreciation on disposals - - At 30 June 2018 290,511 1,761,941 5,290,555 54,303 69,515 149,571 363,540-7,979,935 Net book value At 30 June 2018 5,180,454 1,861,587 9,979,499 15,637 18,117 36,377 15,405 7,220,233 24,327,311 At 31 December 2017 5,209,021 1,944,313 7,691,400 19,245 19,047 3,809 16,378 7,167,933 22,071,147 11 Intangible assets June 2018 Cost N'000 At 1 January 2018 45,899 Additions - Disposals At 30 June 2018 45,899 Amortisation At 1 January 2018 34,410 Charge for the year 5,184 At 30 June 2018 39,594 Net book value At 30 June 2018 6,305 At 30 June 2017 11,489 8 Total
Notes to the Financial Statements -Continued 12 Inventories June December June December Consumable spares - - - - Inventory spares 149,820 1,178,942 - - Shell Project AW 139 2,025,963 1,006,132 - - Jet A1 Aviation fuel Lagos 76,471 66,029 - - 2,252,254 2,251,103 - - 13 Trade receivables and Other receivables June December June December Trade receivables 8,037,411 3,277,518 - - Witholding Tax Receivable 2,531,371 2,722,687 - - Staff advances 24,774 6,947 - - Due from related parties 969,398 786,771 1,448,324 Advance payments 3,884,731 5,403,078 - - Other receivables 568,239 763,020 397,653 443,587 15,046,526 13,142,648 1,184,424 1,891,911 14 Cash and bank balance Cash and bank balances Jan-00 December June December Cash and bank balance 1,481,353 2,430,494 2,058 2,503 15 Cash and cash equivalent For purposes of cashflows, cash and cash equivlents consist of cash and bank balances as defined bove net of outstanding bank overdraft as at the end of the period. Jan-00 December June December Cash and bank balance 1,481,353 2,430,494 2,058 2,503 Overdraft - (406,483) - - Cash and Cash equivalent ( per cashflow statement) 1,481,353 2,024,011 2,058 2,503 16 Prepayments Jan-00 December June December Rent prepaid 76,320 16,545 - - Insurance prepaid - 10,550 - - 76,320 27,095 - - 9
Notes to the Financial Statements -Continued 17 Ordinary share capital Jan-00 December June December Authorised shares 5,000,000,000 ordinary shares of 50k each 2,500,000 2,500,000 2,500,000 2,500,000 Issued and fully paid - - 3,350,509,759 ordinary shares of 50k each 1,675,255 1,675,255 1,675,255 1,675,255 Share premium 6,616,991 6,616,991 6,616,991 6,616,991 10
Notes to the Financial Statements -Continued 18 Interest bearing loans & Borrowings June December June December Overdraft 1,135 406,483 Term Loan - Access Bank - N1.16b 275,703 361,814 - - Term Loan - Access Bank - N3.6b 1,850,000 2,302,309 - - Term Loan - Access Bank - N2.17b 1,981,549 1,980,514 - - Term Loan - Access/BOI - $17,391,550 1,889,695 2,273,617 - - Lecon Financial Services Loan Acct 607,337 741,686 - - Access Bank N6.93b Loan Current Account 717,814 156,491 - - $10m Access Bank Loan 3,060,000 3,060,000 - - Term Loan - Nexim 65,500 97,500 Heritage Bank USD $2.250M 601,348 601,348 - $10m Access Bank Loan Chevron 3,810,271 3,060,000 - - Longview Aviation Assets Management-Finance 1,266,843 1,408,344 - - Total interest-bearing loans and borrowings 16,127,195 16,450,106 - - Total non-current interest-bearing loans and borrowings 15,342,913 12,680,699 - - Total Current - interest bearing loans 784,282 3,769,407 - - Total interest bearing loans -non current 16,127,195 16,450,106 - - 19 Deferred Revenue June December June December SPDC advance 196,706 - - At 1 January 196,706 1,798,778 Movement during the year (192,860) (1,602,072) - - 3,846 196,706 - - 20 Trade and other payables June December June December Trade payables 8,845,225 9,859,627 Other payables 5,878,838 1,343,362 28,487 48,350 Due to related parties - 26,977 1,102,944 1,108,261 Withholding Tax Payable 30,466 92,378 14,754,528 11,322,344 1,131,431 1,156,611
Notes to the Financial Statements -Continued 21 Deferred revenue June December June December At 1 January 618,218 652,989 - - Deferred during the period - - - - Release to the Statement of Profit or loss (28,827) (34,771) - - At 31 March 589,391 618,218 - - 12