UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD …...UAC House, 1-5, Odunlami Street, Lagos, Nigeria...

UNAUDITED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2016

TABLE OF CONTENTS

PAGE

GENERAL INFORMATION 3

STATEMENT OF COMPREHENSIVE INCOME 4

STATEMENT OF FINANCIAL POSITION 5

STATEMENT OF CHANGES IN EQUITY 6

STATEMENT OF CASH FLOWS 7

NOTES TO THE FINANCIAL STATEMENTS 8 OTHER INFORMATION:

STATEMENT OF VALUE ADDED 23

PORTLAND PAINTS & PRODUCTS NIGERIA PLC GENERAL INFORMATION FOR THE PERIOD ENDED 30 SEPTEMBER 2016 BOARD OF DIRECTORS

Mr. Larry Ettah - Chairman Mr. Mukhtar Yakasai - Managing Director/Chief Executive Mr. Bayo Osibo - Director Mr. Abdul Bello - Director Eng. Dipo Ashafa - Director Mrs. Adeline Ogunfidodo -Director

REGISTERED OFFICE Sandtex House 105A, Adeniyi Jones Avenue, Ikeja. Lagos State. FACTORY Km 36, Abeokuta – Lagos Expressway Ewekoro, Ogun State. REGISTERED NUMBER RC 76075 FRCN NUMBER FRC/2012/0000000000221 COMPANY SECRETARY Adeleke Yusuff Esq, UAC House, 1-5, Odunlami Street, Lagos, Nigeria AUDITORS PricewaterhouseCoopers Landmark Towers, 5B, Water Corporation Road Victoria Island, Lagos. REGISTRAR Africa Prudential Registrars Plc (formerly called UBA Registrars Ltd) No. 220B, Ikorodu Road Palmgrove, Lagos. BANKERS United Bank for Africa Plc Skye Bank Plc Ecobank Nigeria Plc First City Monument Bank Plc Zenith Bank Plc

PORTLAND PAINTS & PRODUCTS NIGERIA PLC

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


(All amounts are in thousands of Naira, unless otherwise stated)

3 Months to

September

2016

9 Months to

September

2016

3 Months to

September

2015

9 Months to

September

2015

Note N'000 N'000 N'000 N'000

Revenue 3 493,382 1,358,687 359,977 1,664,494

Cost of Sales 5 (275,266) (754,152) (188,518) (926,846)

Gross Profit 218,117 604,536 171,459 737,649

Other Operating Income 4 61,606 80,631 18,004 -

Other Operating Loss - - - (1,082)

Selling and distribution expenses 5 (115,021) (306,853) (151,647) (350,885)

Administrative expenses 5 (121,760) (336,910) (128,398) (376,395)

Profit/(Loss) from Operations 42,942 41,404 (90,580) 9,287

Finance Income 7 8 859 689 2,639

Finance Expenses 7 (24,693) (73,679) (31,025) (90,067)

Net Finance Expenses (24,685) (72,820) (30,337) (87,429)

Profit/(Loss) Before Taxation 18,257 (31,416) (120,917) (78,141)

Taxation 8 (3,737) (15,070) (6,615) (37,050)

(Loss)/Profit from Continuing Operations 14,520 (46,486) (127,532) (115,191)

Profit /(Loss) from Discountinued Operations - - - -

Other Comprehensive Income - - - -

Total Comprehensive Income 14,520 (46,486) (127,532) (115,191)

Earnings Per Share for Profit Attributable to Owners

of The Company During The Year:

Basic (Kobo) 9 4 (12) (32) (29)

Diluted (Kobo) 9 4 (12) (32) (29)

The notes on pages 8 to 22 form an integral part of these financial statements

4

PORTLAND PAINTS & PRODUCTS NIGERIA PLC

STATEMENT OF CHANGES IN EQUITY

AS AT 30 SEPTEMBER 2016


Share capital

Revaluation

Surplus

Retained

earnings Total equity

N'000 N'000 N'000 N'000

1st January 2015 200,000 91,923 632,679 924,602

Loss for the Period - - (115,190) (115,190)

30th September 2015 200,000 91,923 517,489 809,412

1st January 2016 200,000 91,923 399,694 691,617

Loss for the period - - (46,486) (46,486)

30 SEPTEMBER 2016 200,000 91,923 353,209 645,131

6

PORTLAND PAINTS & PRODUCTS PLC

STATEMENT OF CASH FLOWS



9 Months to

September

2016

9 Months to

September

2015

N'000 N'000

Cash flows from operating activities:

Cash generated from operations 18 128,877 2,517

Income Tax paid (3,670) (26,751)

Net cash generated from Operating activities 125,207 (24,234)

Cash flows from investing activities:

Purchase of Property, Plant and Equipment 10 (30,560) (25,256)

Proceeds from sale of property, plant and equipment 9,296 10,808

Finance income 859 2,639

Net cash provided / (absorbed) by Investing activities (20,405) (11,809)

Cash flows from financing activities:

Repayments of Borrowings (89,472) (59,667)

Interest paid (73,679) (90,067)

Net cash provided / (absorbed) by financing activities (163,151) (149,734)

Net increase/(decrease) in cash and cash equivalents (58,349) (185,778)

Cash and cash equivalents brought forward 161,444 225,051

Cash and cash equivalents 14 103,095 39,273

7

PORTLAND PAINTS & PRODUCTS NIGERIA PLC NOTE TO THE UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016

8

1. Corporate Information

1.2 Legal Status

Portland Paints & Products Nigeria Limited was incorporated as a private limited liability company on 3rd September, 1985. The company by a special resolution of 24th April, 2008 changed its name to Portland Paints & Products Nigeria Plc, consequent upon it becoming a Public Limited Liability Company. The Company was listed on the floor of the Nigerian Stock Exchange on 9 July 2009. The registered office is located at Sandtex House, 105A, Adeniyi Jones Avenue, Ikeja. Lagos State, Nigeria.

1.3 Principal activities

The company is principally engaged in the business of manufacturing and sale of paints, marketing of sanitary wares and marketing of Hempel marine and protective coatings for the oil and gas sector. During the period, the company continued to implement its strategies for enhancing the quality of its service delivery through restructuring of its operations, increased investment in technology infrastructure and enforcement of procedures and manpower development. There was no change in the principal activities of the company during the period. 2. Summary of significant Accounting Policies 2.1 Basis of preparation The financial statements of have been prepared in accordance with International Financial Reporting Standards (IFRS), the provisions of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004 and Financial Reporting Council of Nigeria Act, No 6, 2011. The policies set out below have been consistently applied to all the periods reported as approved by the Board of Directors. The financial statements have been prepared on a going concern basis. 2.2. Accounting Policies The accounting policies adopted are consistent with those for the year ended 31 December 2015. 2.3 Basis of Measurement The financial statements have been prepared on a historical cost basis modified by the revaluation of land and building at a fair value. The company’s financial statements are presented in naira, which is also the company’s functional currency. Transactions in the foreign currency are recognized in Naira at the official spot rate at the date of transaction.

PORTLAND PAINTS & PRODUCTS NIGERIA PLC NOTE TO THE UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016

9

2.4 Significant accounting judgments, estimates and assumptions The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses assets and liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. The company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur. Material estimates in the financial statements are the same with those for the year ended 31 December 2015.

2.5 Financial risk management. The company’s activities expose it to a variety of financial risks; market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company’s financial performances. The 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 company’s annual financial statement as at 31 December 2015. There have been no changes in the risk management structure since year end or in any risk management policy.


NOTES TO THE FINANCIAL STATEMENTS



3 Segment Information:

No other segment has been aggregated to form the above reportable operating segments.

(i) Income Decorative

Marine &

Industrial

Paints

Portland

Bathrooms Total9 Months to

September

2016

9 Months to

September

2016

9 Months to

September

2016

9 Months to

September

2016N'000 N'000 N'000 N'000

Revenue:

Total Revenue 1,055,490 290,753 12,444 1,358,687

Inter-segmental revenue - - -

Total Revenue From External Customers 1,055,490 290,753 12,444 1,358,687

Company's Revenue per Statement of

Comprehensive Income 1,055,490 290,753 12,444 1,358,687

Segement Gross Profit 475,602 124,779 4,155 604,536

Operating Expenses 585,645

Depreciation 19,465

Amortisation 38,652

Finance Income (859)

Finance Expense 73,679

Other Income (80,631)

Sub-total 635,952

Company's Loss Before Tax (31,416)

Decorative

Marine

Paints

Portland

Bathrooms Total9 Months to

September

2015

9 Months to

September

2015

9 Months to

September

2015

9 Months to

September

2015N'000 N'000 N'000 N'000

Revenue:

Total Revenue 1,100,814 539,636 24,045 1,664,494

Total Revenue From External Customers 1,100,814 539,636 24,045 1,664,494

Company's Revenue per Statement of

Comprehensive Income 1,100,814 539,636 24,045 1,664,494

Segement Gross Profit 567,247 165,538 4,864 737,649

Operating Expenses 660,729

Depreciation 36,945

Amortisation 29,605

Finance Income (2,639)

Finance Expense 90,067

(Other Income)/Loss 1,082

Sub-total 815,790

Company's Profit Before Tax (78,142)

The operating segments did not transact with each other and as such there are no transfer prices between operating segments.

For management purpose, the Company is organised into Strategic Business Units (SBU) based on products

categories and has three reportable segments as follows:

The chief operating decision maker (CODM) has been identified as the executive management. The Executive Management monitors

the operating results of each business units separately for the purpose of making decisions about resource allocation and

performance assessment. Segment performance is evaluated based on gross profit or loss and is measured consistently with gross

profit or loss in the combined financial statements. However, the segment liabilities are absorbed by the decorative segment.

- Portland Decorative Paints segment, which manufactures and market various ranges of decorative paints.

- Portland Marine Segment, which manufactures and markets various ranges of marine protective paints.

- Portland Bathroom segment, which markets and distributes ranges of sanitary ware products.

10





(ii) Assets & Liabilities Decorative

Marine

Paints

Portland

Bathrooms Total

9 Months to

September

2016

9 Months to

September

2016

9 Months to

September

2016

9 Months to

September

2016N'000 N'000 N'000 N'000

Addition to Non-current Assets 30,560 30,560

Reportable Segment Assets 1,013,292 382,603 286,952 1,682,848

Factory Office Property 199,608 - - 199,608

Total Company Assets 1,243,460 382,603 286,952 1,913,016

Reportable Segement Liabilities:

Loans and Borrowings (Excluding Leases and

Overdrafts) 160,080 - - 160,080

Defined Contribution Pension Scheme 7,356 - - 7,356

Financial Liabilities 37,903 - - 37,903

Deferred Tax Laibilities 19,108 - - 19,108

Other Unallocated and Central Liabilities 1,043,438 - - 1,043,438

Total Company Liabilities 1,267,885 - - 1,267,885

Decorative

Marine

Paints

Portland

Bathrooms Total

31 December

2015

31 December

2015

31 December

2015

31 December

2015N'000 N'000 N'000 N'000

Addition to Non-current Assets 29,565 29,565

Reportable Segment Assets 991,806 379,857 284,893 1,656,555

Factory Office Property 213,164 - - 213,164

Total Company Assets 1,234,534 379,857 284,893 1,899,283

Reportable Segement Liabilities:

Loans and Borrowings (Excluding Leases and

Overdrafts) 225,868 - - 225,868

Defined Contribution Pension Scheme 7,395 - - 7,395

Financial Liabilities 56,756 - - 56,756

Deferred Tax Laibilities 19,108 - - 19,108

Other Unallocated and Central Liabilities 898,541 - - 898,541

Total Company Liabilities 1,207,668 - - 1,207,668

Items of Property, Plant and Equipment are directly allocated to the SBU enjoying the economic benefits of the assets.

Production activities in the factory is mainly production of decorative paints. Hence the relevant costs are absorbed by

Decorative Business Unit. This accounts for the depreciation on Factory building wholly absorbed by Decorative Business

Unit. Other Income is generated from the application of paints in addition to the sales and marketing of paint products.

The amounts provided to the chief operating decision maker (CODM) with respect to total assets are measured in a manner

consistent with that of the financial statements. These assets are allocated based on the operations of the segments and the

physical location of the assets.

11


NOTES TO THE FINANCIAL STATEMENTSFOR THE PERIOD ENDED 30 SEPTEMBER 2016

(All amounts are in thousands of Naira, unless otherwise stated) 9 Months to

September

2016

9 Months to

September

2015

N'000 N'000

4 Other Operating Income/(Loss):

Government grants 18,385 16,346

Profit on sale of fixed assets 4,821 2,674

Sale of scrap 947 1,891

Discount Received 1,158 1,727

Insurance claim received 1,537 354

Income from executed projects 11,988 2,018

Exchange gain 31,875 13,280

Franchisee Fee 20 10,219

Toll Manufacturing 381 229

Sundry Income 8,706 -

Container Deposit Refund 812 1,095

Oracle licence surcharge - (25,750)

Additional Tax Liability - Back Duty - (25,310)

Total 80,631 -1,226

5 Expense by function

Cost of sales 754,152 926,846

Selling & distribution expenses 306,853 350,885

Adminstrative expenses 336,910 376,395

1,397,914 1,654,126

6 Expenses by nature

Change in inventories of finished goods and work in progress 754,152 926,846

Amortization of intangible assets 38,652 29,605

Depreciation on property, plant and equipment 57,459 82,069

Staff costs 172,407 209,627

Sales commissions, rebates and discounts 90,868 89,080

Distribution costs 61,565 75,607

Repairs and maintenance 19,851 22,315

Advert and promotional expenses 64,728 27,998

Management fee 13,597 18,304

Auditors' fees 8,100 6,300

Bad debt provision 502 42,263

Information technology 35,037 26,279

Rent & rates 24,694 30,508

Legal & Professional Fees 21,153 22,028

Travelling expenses 34,684 28,149

Other expenses 466 17,148

1,397,914 1,654,126

7 Finance income:

Interest received on bank deposits 859 2,639

Total 859 2,639

Finance costs:

Interest on debts and borrowings 73,679 90,067

Total 73,679 90,067

8 Taxation

(i) Current tax on profits for the year:

Company income tax 12,934 14,941

Education tax 2,136 1,354

Deffered tax - 20,754

Total current tax 15,070 37,050

(ii) Reconciliation of tax charge:

Profit / (Loss) before tax (31,416) 193,153

Tax at Nigerian's statutory income tax rates (Minimum Tax) (9,425) (23,442)

Disallowable expenses 43,012 44,461

Disallowable income (1,550) -

Balancing charge 1,980 243

Tax effect of capital allowance (21,084) (6,351)

Education tax @2% of assessable profit 2,136 1,354

Deffered Tax - 20,754

Total tax charge for the year 15,070 37,019

9 Earnings per share

Net (Loss)/profit attributable to ordinary equity holders (46,486) (115,191)

Weighted average number of ordinary shares for basic earnings per share 400,000 400,000

Basic (Loss)/earnings per share (in kobo) -12 (29)

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the

parent by the weighted average number of ordinary shares outstanding during the year.

The following reflects the income and share data used on the basic earnings per share computations:

12





Land

Factory

building

Plant and

machinery

Furniture

and fittings

Computer

Equipments

Motor

vehicles

Work-in-

progress Total

10

Property, plant and

equipment N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000

Cost

At 1 January 2015 40,000 165,912 405,054 201,032 26,841 227,007 13,999 1,079,845

Additions - 7,252 2,717 14,563 - 0 5,032 29,565

Transfers / Held for sales - - 3,238 8,019 2,471 (8,397) 5,331

Disposal - - (15,849) (82,835) (31,869) - (130,553)

At 31 December 2015 40,000 173,164 395,160 140,779 26,841 197,609 10,634 984,188

At 1 January 2016 40,000 173,164 395,160 140,779 26,841 197,609 10,634 984,188

Additions - 0 9,401 6,419 - 14,560 180 30,560

Transfers / Held for sales - - - - - - -

Disposal - - (6,920) (980) (15,770) - (23,670)

At 30 SEPTEMBER 2016 40,000 173,164 397,641 146,218 26,841 196,400 10,815 991,078

Depreciation

At 1 January 2015 - 6,663 212,767 129,609 22,957 160,808 - 532,805

Additions - 3,587 32,634 40,062 - 32,974 - 109,257

Disposal (15,848) (72,021) (26,209) (114,078)

Transfer - -

At 31 December 2015 - 10,251 229,553 97,650 22,957 167,574 - 527,985

At 1 January 2016 - 10,251 229,553 97,650 22,957 167,574 - 527,985

Additions - 3,305 24,477 12,540 - 18,544 - 58,867

Disposal (6,518) (4,601) (14,788) (25,907)

At 30 SEPTEMBER 2016 - 13,556 247,512 105,589 22,957 171,330 - 560,944

Net book Value as at:At 30 SEPTEMBER 2016 40,000 159,608 150,129 40,629 3,884 25,070 10,815 430,134

At 31 December 2015 40,000 162,913 165,607 43,130 3,884 30,035 10,634 456,203

Fair Value of land and building:

The company land and buildings were fair valued as at 31st December 2012 by Obosi Eleh & Co. (Estate Valuer), an accredited independent professional

valuer who holds relevant professional qualifications and have recent experience in the location and categories of the properties valued. The fair value

measurement is based on its "highest and best use" and its represents the price that would be received to sell the property in an orderly transaction

between market participants as at 31 December 2012. Fair value is determined by reference to market-based evidence, based on active market prices,

adjusted for any difference in the nature, location or condition of the specific property. Management is of the opinion that the value represents the value

as at 30th September 2016. Other items of PPE were carried at cost, duly reviewed for impairment as at September 30th, 2016, no impairment provision

is deemed necessary.

Depreciation amounting to N57m (2015-N82m) charged to income statement, N27m (2015-N30m) charged to cost of sales, N19m (2015- N37) to

administrative expenses and N11m (2015-N15m) to selling and distribution expenses.

13





Trade Mark

Computer

Software Total

11 Intangible Assets N'000 N'000 N'000

Cost

At 1 January 2015 49,024 197,368 246,392

At 31 December 2015 49,024 197,368 246,392

At 1 January 2016 49,025 197,368 246,393

At 30 SEPTEMBER 2016 49,025 197,368 246,393

Amortization:

At 1 January 2015 - 82,233 82,233

Charge for the year - 39,473 39,473

At 31 December 2015 - 121,706 121,706

At 1 January 2016 - 121,706 121,706

Charge for the year - 38,652 38,652

At 30 SEPTEMBER 2016 - 160,358 160,358

Net Book values at:

At 30 SEPTEMBER 2016 49,025 37,010 86,035

At 31 December 2015 49,024 75,662 124,686

The Company's intangible asset represents the N49m trade mark purchased from Blue Circle Industries Plc

adjudged to have an indefinite life. N197m relates to investment on licence and technical agreement on

oracle ERP applications. The oracle ERP application was acquired in year 2012 and put to use December

2012, to be amortised to income statement over a period of five years. While the trade mark is carried at

cost to be tested annually for impairment. At present no impairment is deemed required and there is no

contractual commitment as at September 30th, 2016.

Intangible assets amortization charged to income statement amounts to N38m (2015-N30m) included as

part of administrative expenses.

14





30

September

2016

31 December

2015

N'000 N'000

12 Inventories:

Raw Materials 124,669 96,179

Packaging Materials 21,815 22,389

Work in progress 9,137 6,940

Goods In Transist 68,831 3,294

Finished Goods 556,737 504,369

Spare Parts 14,385 15,888

Diesel 10,253 3,180

Stock Impairment (70,069) (35,952)

Total 735,759 616,286

The amount of write-down on inventories to net realizable value recognised as an expense is

N34m (2015: N40m). This represents impairment for slow moving, obsolete and damaged

inventories. All inventory with the exception of finished goods are stated at cost. Finished goods

are stated at their net realisable values.

First quarter stock count was conducted across all Company's stock holding locations. The

quantity counted was valued using Weighted Average Costing model as per the Company's policy

and agreed as stated herein.

The value of finished goods include N340m (Dec 2015: N338m) imported merchandizing

products.

15





30

September

2016

31

December

2015

13 Trade and Other Receivables N'000 N'000

(i) Trade receivables 567,949 560,140

Less: Provision for impairment of trade receivables - (Note 12iii) (204,841) (204,841)

Receivables from related parties 3,817 701

Other receivables 137,991 111,701

504,916 467,701

(ii) Prepayments

Prepayments - Current 39,676 62,174

Prepayments - Non Current portion 13,402 10,789

Total prepayments 53,077 72,963

The fair values of trade and other receivables classified as loans

and receivables are as follows:30

September

2016

31

December

2015

N'000 N'000

Trade receivables 363,108 355,299

Receivables from related parties (Note 18a) 3,817 701

Total 366,925 356,000

30

September

2016

31

December

2015

(iii) Allowance for impairment of trade receivables: N'000 N'000

As at January 1st 2016 204,841 93,177

Additional allowance for receivable impairment - 111,664

204,841 204,841

Un-utilised amounts reversed - -

Total as at 204,841 204,841

30 SEPTEMBER 2016

Trade receivables are non-interest bearing and are generally on terms of 30-90 days. Trade and

other receivables as at 30 September 2016 were reviewed for impairment test.

The balance on prepayment represent rent,medical and insurance paid in advance which will be

charged against earnings in periods it relatess.

16





14 Interest bearing loans and borrowings:

30

September

2016

31 December

2015

N'000 N'000

(i) Non-Current Borrowings:

Bank loans:

Long term liabilities - Note 14(iii) 53,053 101,571

Total Non Current Borrowings 53,053 101,571

(ii) Current Borrowings:

Overdrafts due within one year 0 -

Bank loans:

Long term liabilities due within one year 107,027 124,297

Total Current Borrowings 107,027 124,297

Total Loans and Borrowings 160,080 225,868

Current borrowings:

- Debenture on fixed and floating assets of Portland Paints & Products Nigeria Plc, valued

at N1.1 billion as at December 2011, by Ubosi Eleh & Co. estate surveyors

- Execution of trust receipts by the borrower.

- Ownership of assets financed

- Promissory note of the Company for principal and interest

- Sales collection agreement

(iii) Long term borrowings

Non current liabilities

Lender

Total

Facility

30

September

2016

31

December

2015

Bank of Industry (BOI) Intervention funds Through Ecobank

Nigeria Plc N300m 44,566 73,852

Bank of Industry (BOI) Intervention Funds Through FCMB

Nigeria Plc N255m 115,514 152,016

Total Long Term Facility 160,080 225,868

Current Portion of Term-Loans (124,297) (124,297)

Due After One Year 35,783 101,571

The movement in Loan and Borrowings represent principal repayment as at 30th September,2016

Repayment

Terms Carrying Value -

28 equal

quarterly

installments

from date of Carrying Value -

60 equal

monthly

installments

with 12 months

moratorium

The bank loans, overdrafts and finance lease borrowings were secured with the followings:

The bank overdrafts, commercial paper, import finance facility and finance lease were secured with the

following:

The secured loan is a Central Bank of Nigeria (CBN) intervention fund through Bank of Industry (BOI). The applicable interest

rate is 6% per annum subject to review by the BOI from time to time in line with the prevailing market conditions. The loan is

repayable in instalments at various dates between January 2011 to 2018. After bifurcation of the government grant, in the

form of a low interest rate loan, the loan bears an effective current interest rate of 22%. N31m (2015:N42m) interest on BOI

facility was charged to income statement as at 30th, September 2016.

17





(iv) Cash & Cash Equivalent:

30

September

2016

31

December

2015

N'000 N'000

Cash in hand and bank 103,095 115,124

Short Term / Fixed deposit - 46,320

Cash & short term deposit 103,095 161,444

Less: Bank Overdraft (0) -

Cash and Cash Equivalents 103,095 161,444

(v) Government grants:

30

September

2016

31

December

2015

N'000 N'000

As at January 56,756 81,271

Total Government Grant for the year 56,756 81,271

Released to the income statement (18,385) (24,515)

38,372 56,756

Current 24,516 24,516

Non current 13,856 32,240

38,372 56,756

For the purpose of the statement of cash flow, cash and cash equivalents comprise the following as at 30 June 2016:

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying

periods of between one month and three months depending on the immediate cash requirements of the Company, and

earn interest at the respective short-term deposit rates.

Having satisfied all conditions attached to N36.6 million fixed deposit with Skye Bank used as collateral/guarantee on

behalf of former associate (Portland Contruction Limited), the Company had accessed and realised completely the fixed

deposit plus accrued interest. Consequently as at 3o September 2016, the available deposit is Nil (Dec 2015: N36.6

million).

Government grants relates to loan granted by Agency of Nigeria Government (Centra Bank of Nigeria) with 6% interest

rate which was below the current applicable market rate, the effect of this favourable interest is regarded as a government

grant. There are no unfulfilled conditions or contigencies attached to these grants.

18





15 Trade and Other Payables

30 September

2016

31 December

2015

N'000 N'000

Trade payables 166,504 174,783

Other payables 32,655 24,062

Customer Deposits 57,620 42,304

Accruals 206,833 97,140

Total financial liabilities, excluding loans and borrowings,

classified as financial liabilities measured at amortised cost 463,612 338,288

Intercompany Payable 534,562 526,897

Dividends payable 20,009 20,009

Total trade and other payables 1,018,184 885,194

16 Corporate Tax Liability

30 September

2016

31 December

2015

N'000 N'000

Balance at Beginning of the year

Company Income Tax 19,889 63,878

Education Tax 852 5,729

20,741 69,607

Current Tax Expense

Company Income Tax 12,934 8,209

Education Tax 2,136 852

Additional tax liability - back duty - 20,727

35,811 99,395

Payment During the year (3,670) (78,654)

Income tax payable 32,142 20,741 Total as at 30 SEPTEMBER 2016

Deferred tax

30 September

2016

31 December

2015

N'000 N'000

At 1 January 19,108 74,280

Recognised in profit and loss

Tax expense - (55,172)

Total as at 30 SEPTEMBER 2016 19,108 19,108

Terms and conditions of the above financial and non-financial liabilities.

Trade payables are non-interest bearing and normally settled on 30 day term

Other payables and accruals are non-interest bearing and have an average term of 90 days.

19





17 Share capital

(i)

30 September

2016

30 September

2016

31 December

2015

31 December

2015

Number N'000 Number N'000

Ordinary shares of 50 kobo each 400,000,000 200,000 400,000,000 200,000

Total 400,000,000 200,000 400,000,000 200,000

Issued and Fully

Paid

Issued and

Fully Paid

Issued and

Fully Paid

Issued and

Fully Paid

30 September

2016

30 September

2016

31 December

2015

31 December

2015

Number N'000 Number N'000

Ordinary shares of 50kobo each at

the beginning of the year 400,000,000 200,000 400,000,000 200,000

At end of the year 400,000,000 200,000 400,000,000 200,000

(ii) Nature and purpose of reserves:

30 September

2016

31 December

2015

Other capital reserve (Revaluation Reserve) N'000 N'000

At 1 January 2015 91,923 91,923

Revaluation during the year - -

Total as at 30 SEPTEMBER 2016 91,923 91,923

Asset revaluation reserve:

(iii) Earnings per share

Net profit attributable to ordinary

equity holders (46,486) (115,191)

Weighted average number of

ordinary shares for basic earnings

per share 400,000 400,000

Basic earnings per share (in kobo) (12) (29)

Authorised Authorised

The asset revaluation reserve is used to record increases in the fair value of property, plant and equipment and decreases

to the extent that such decrease relates to an increase on the same asset previously recognised in equity. The revaluation

was carried out on land and building in December 2010 and 2012 by Ubosi Eleh & Co., a professional firm of Chartered

Surveyors on an open market basis.

Basic earnings per share amounts are calculated by dividing net profit for the

year attributable to ordinary equity holders of the parent by the weighted average

number of ordinary shares outstanding during the year.

The following reflects the income and share data used on the basic earnings per

share computations:

20





9 Months to

September

2016

9 Months to

September

2015

N'000 N'000

18 Reconciliation of net profit to net cash

provided by operating activities

Profit before tax (31,416) (78,141)

Adjustments to reconcile net income to net cash

provided by operating activities:

Interest payable 73,679 90,067

Finance income (859) (2,639)

Depreciation Charges 57,459 82,069

(Profit)/Loss on disposal of fixed assets (4,821) (2,674)

Amortisation of intangible assets 38,652 29,605

164,110 196,428

Changes in assets and liabilities:

(Increase)/Decrease in Trade debtors and prepayments (17,331) (57,644)

Decrease/(Increase) in Inventories (119,476) 128,933

(Decrease)/Increase in Trade creditors & Accruals 132,990 (187,059)

(3,817) (115,770)

Net Adjustment 160,293 80,658

Net cash provided by operating activities 128,877 2,517

21





19. Related party transactions

The following transactions were carried out with related parties:

(a) Sales of goods and services Relationship

30

September

2016

31

December

2015

N'000 N'000

UACN Property Dev. Company Plc Sister Company 6,594 6,594

UAC Foods Ltd (UFL) Sister Company 863 863

MDS Logistics Ltd. Sister Company 701 701

8,158 8,158

(b) Purchases of goods and services

30

September

2016

31

December

2015

N'000 N'000

UAC of Nigeria Plc: Service fee Principal Shareholder 84,133 76,616

UAC of Nigeria Plc: Working Capital Finance Facility Principal Shareholder 350,000 350,000

UAC Foods Ltd (UFL): Working Capital Finance

Facility Sister Company 100,000 100,000

534,133 526,616

The parent, ultimate parent and controlling party of the company is UAC of Nigeria Plc incorporated in Nigeria.

There are other companies that are related to Portland Paints & Products Nigeria Plc through common share

holdings and directorship.

22


STATEMENT OF VALUE ADDED FOR THE PERIOD ENDED


9 Months to

September

2016

9 Months to

September

2015

N'000 % N'000 %

Turnover 1,358,687 1,664,494

Non trading items 81,490 2,639

1,440,177 1,667,133

Bought-in-material and services:

- Local (921,511) (1,076,577)

- Imported (259,913) (303,650)

Value added 258,753 100% 286,905 100%

Applied as follows:-

To pay employees:

Salaries and labour related expenses 170,254 66% 206,940 72%

To pay Government:

Corporate tax 15,070 6% 37,050 13%

To pay provider of capital:

Interest charges 73,679 28% 90,067 32%

To pay shareholders

as dividend - 0% - 0%

To provide for replacement of assets

dividend to shareholders and 0%

development of business

- Depreciation 46,237 18% 66,958 23%

- Deferred tax - 0% - 0%

- Loss for the year (46,486) -18% (115,191) -40%

258,754 100% 285,824 100%

Value added represents the additional wealth which the company has been able to create by its own and

its employees' efforts. This statement shows the allocation of that wealth to employees, providers of

capital, government and that retained for the future creation of more wealth.

23

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