Annual Report Inside 2018 - CAP Plc · 2020-05-07 · 2018 ANNUAL REPORT & FINANCIAL STATEMENTS 9 Chemical and Allied Products plc CAPplc RC: 4551 DULUX COLOUR CENTRES Ÿ17A, Ajao

CAP plcRC: 4551

Chemical and Allied Products Plc

ANNUAL REPORT & FINANCIAL STATEMENTS

2018

2018 ANNUAL REPORT & FINANCIAL STATEMENTS 2

Chemical and Allied Products plc

CAP plcRC: 4551

2.13 Employee Benefits

2.14 Revenue Recognition

2.15 Leases

2.16 Fair Value Measurement

2.17 Dividend Distribution

2.18 Risk Management

3 Financial Risk Management

3.1 Financial Risk Factors

3.2 Capital Risk Management

4 Significant Judgments and Estimates

4.1 Significant Estimates

4.2 Significant Judgements

5 Segment Analysis

6 Other Income

7 Expenses by Nature

8 Employee Benefits

9 Finance Income

10 Finance Cost

11 Taxation

12 Dividend

13 Earnings Per Share

14 Property, Plant and Equipment

15 Intangible Assets

16 Inventories

17 Trade and Other Receivables

18 Prepayments

19 Cash and Cash Equivalents

20 Interest-bearing Loans and Borrowings

21 Trade and Other Payables

22 Share Capital

23 Deferred Tax

24 Refund Asset

25 Refund Liability

26 Related Party Transactions

27 Capital Commitments and Contingent Liabilities

28 Fair Values

29 Technical Support Agreements

29 Events after Reporting Date

Value Added Statement

Company Five-year Financial Summary

Salient Performance Graphs

Shareholders' Information

Proxy Form

Shareholders' E-service Application Form

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Contents



CAP plcRC: 4551

Our Vision, Mission and Shared Values

Financial Highlights

Notice of Meeting

Corporate Profile

Product Range

Corporate Responsibility

Chairman's Statement

Directors and Professional Advisers

Profile of Board of Directors

Report of the Directors

Statement of Directors' Responsibilities

Report of Audit Committee

Report of Independent Auditors

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Cash Flow Statement

Notes to the Financial Statements

1 General Information

2 Significant Accounting Policies

2.1 Basis of Preparation

2.1.1 Going Concern

2.1.2 New and Amended standards with Interpretation

2.1.3 Changes in Accounting Policies and Disclosures

2.2 Segment Reporting

2.3 Foreign Currency Translations

2.4 Property, Plant and Equipment

2.5 Impairment of Non-current Assets

2.6 Intangible Assets

2.7 Impairment of Non-financial Assets

2.8 Financial Assets

2.8.1 Initial Recognition and Measurement

2.8.2 Subsequent Measurement

2.8.3 Offsetting Financial Instruments

2.8.4 Trade Receivables

2.8.5 Financial Liabilities

2.8.6 Loans and Borrowings

2.8.7 Financial Instruments-initial recognition and subsequent

measurement under IFRS 9

2.8.8 Government Grant

2.9 Inventories

2.10 Cash and Cash Equivalents

2.11 Share Capital

2.12 Current and Deferred Income Tax

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CAP plcRC: 4551

%

change

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16

44

(20)

19

17

35

26

(26)

(17)

54

36

25

3

0

2

2017

N000

7,113,950

1,975,676

226,703

77,592

2,181,711

(682,981)

1,498,730

5,013,990

180,319

81,188

2,820,459

214

320

3,400

700,000

23,800,000

Revenue

Operating profit

Finance income

Other operating income

Profit before taxation

Taxation

Profit for the year

Total equity and liabilities

Additions to Property, Plant & Equipment (PPE)

Depreciation on PPE

Cash and cash equivalents

Earnings per share (kobo) – Basic and diluted

Net asset per share (kobo) – Basic

NSE quotation as at December 31 (kobo)

Number of shares in issue ('000 units)

Market capitalization as at December 31

2018

N000

7,764,534

2,285,201

327,249

61,837

2,597,832

(568,489)

2,029,343

6,311,246

133,982

94,736

4,339,294

290

401

3,485

700,000

24,395,000

Financial Highlights



CAP plcRC: 4551Vision, Mission and Shared Values

Our vision“To be No. 1 in the

decorative coatings market, providing exceptional value

to our customers.”

Our mission“To grow our top-line

by a minimum of 20% annually at an EBIT profitability

of 34%.”

Shared valuesCustomer focus

Respect for the individualIntegrity

Team spiritInnovation

Openness and communication

Desired outcome“Adding value to lives

and businesses.”



CAP plcRC: 4551

NOTES

DividendIn view of the results, the directors have recommended to members, the payment of a dividend of 290kobo per share. A resolution to this effect will be put to the meeting for the approval of the Members. Dividend WarrantsIf the payment of dividend is approved, the warrants will be posted on Friday June 21, 2019 to Shareholders whose names appear on the Register of Members at the close of business on Friday May 24, 2019.

Closure of Register and Transfer BooksThe Register of members and the Transfer Books of the company will be closed from Monday 27 May to Friday 31 May 2019 (both dates inclusive) for the purposes of payment of the dividend.

Rights of Shareholders to ask questionsShareholders have a right to ask questions not only at the meeting but also in writing prior to the meeting and such questions must be submitted to the Company Secretary on or before June 14, 2019.

Audit CommitteeThe Audit Committee consists of three (3) Shareholders and three (3) Directors. Any member may nominate a Shareholder as a member of the Committee by giving notice in writing of such nomination to the Company Secretary at least twenty-one days before the Annual General Meeting. Nominators should please submit a profile of their nominees to the Company Secretary for publication on the Company's website for the information of all shareholders.

Unclaimed Share Certificates and Dividend WarrantsShareholders are hereby informed that a sizeable quantity of share certificates and dividend warrants have been returned to the Registrars as unclaimed. Some dividend warrants have neither been presented to the Bank for payment nor to the Registrar for revalidation. Affected shareholders are by this notice advised to contact the Registrars, Africa Prudential Plc at their office at 220B, Ikorodu Road, Palmgrove, Lagos or call them on 234-7080606400 during normal business hours to revalidate their dividend warrants and update their contact information.

Annual Report & Unclaimed Dividend ListShareholders who wish to receive electronic copies of the Annual Report & Accounts and Unclaimed Dividends list should please send their names and e-mail addresses to the Registrars at [email protected].

Notice of Annual General Meeting cont’d



CAP plcRC: 4551Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the 54th Annual General Meeting of Chemical and Allied Products Plc, will be held at the Arthur Mbanefo Hall, Golden Tulip Festac, Amuwo Odofin, Lagos State on Thursday June 20, 2019 at 10.00am in order to transact the following businesses:

ORDINARY BUSINESS1. Lay before the Members the Report of the Directors, the Financial Statements of the Company for the year ended 31st December 2018 together with the Reports of the Auditors and the Audit Committee thereon.

2. Declare a Dividend

3. Elect/Re-elect Directors

4. Authorize the Directors to fix the Remuneration of the Auditors

5. Elect Members of the Audit Committee

SPECIAL BUSINESS6. Fix the Remuneration of Directors

7. Renew the General Mandate authoring the Company to enter into recurrent transactions with related parties or companies.

PROXYA member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to attend instead of him/her and such a proxy need not be a member of the company. A proxy form is enclosed and if it is to be valid for the purposes of this meeting, it must be completed and deposited at the office of the Registrar not less than 48 hours before the time of holding the meeting.

Dated this 20th Day of March 2019By Order of the Board

Rose Joshua Hamis (Mrs.) Company SecretaryFRC/2013/ICSAN/00000002356



CAP plcRC: 4551

E-dividend/BonusPursuant to the directive of the Securities and Exchange Commission, notice is hereby given to all shareholders to open bank accounts, stock broking accounts and CSCS accounts for the purpose of e-dividend. E-service application form is attached to this Annual Report for completion by all shareholders who are yet to complete the form, and to furnish the particulars of these accounts to the Registrars, Africa Prudential Plc at their office at 220B, Ikorodu Road, Palmgrove, Lagos or call them on 234-7080606400 during normal business hours, or send email messages to [email protected].

Notice of Annual General Meeting cont’d



CAP plcRC: 4551

Chemical and Allied Products Plc (CAP), a subsidiary of UAC of Nigeria PLC, is the

technological licensee of AkzoNobel, the world's largest paint producer. CAP PLC evolved

from the world-renowned British multinational Imperial Chemical Industries Plc (ICI),

which formalized its Nigerian operations in 1957 under ICI Exports Limited. In 1965, ICI

Exports Limited changed its name to ICI Nigeria Limited and in 1968 it was subsumed by ICI

Paints Limited. ICI was acquired in 2008 by AkzoNobel.

Following the promulgation of the first and second Indigenization Decrees in 1972 and

1977, ICI Nigeria Limited at first sold 40 percent but later 60 percent of its share capital to

the Nigerian public, and went further to change its name by a special resolution of the

shareholders to Chemical and Allied Products Limited (CAPL) in the spirit of indigenization.

In 1991, the 'Limited' appellation was dropped for 'PLC' in compliance with the provision of

the Companies and Allied Matters Act of 1990.

In 1992, ICI Nigeria Limited finally disposed-off its minority 40% shareholding in CAP PLC

when it sold 35.7% of its equity to UAC of Nigeria PLC and the rest to the Nigerian public on

the floor of the Nigeria Stock Exchange. Currently, UAC of Nigeria PLC holds about 51.49%

of the Company's equity.

CAP PLC operates in the coatings business and provides a wide range of quality products

and services, and its brands have become household names. In November 2013, the

Company was awarded the ISO 14001:2004 Certification on Environmental Management

System (EMS). Dulux, the flagship brand, is positioned in the premium segment. Caplux is

offered in the standard segment as a complimentary brand to protect overall volume

share.

The Flagship Brand - DULUX

Dulux is the leading authority in decorative paints and stands at the forefront on

innovation and quality. The brand is a premium quality paint that provides an exceptional

combination of durability and beauty. It allows consumers to fully express themselves in

colours and creativity.

Distribution Channel

Dulux is strategically distributed through Dulux Colour Centres (DCCs). The DCC is an

innovative strategy introduced to bridge the gap between Dulux and its consumers. CAP

PLC pioneered the colour centre concept in Nigeria in 2005, a move that began a revolution

in the Nigerian paint industry.

Corporate Profile



CAP plcRC: 4551

DULUX COLOUR CENTRESŸ17A, Ajao Road, off Adeniyi Jones Avenue Ikeja.Ÿ17A, Aboyade Cole Street, Victoria Island.Ÿ9A, Osolo-way, Aswani Market Roundabout Ajao Estate. ŸKm 18/19 Lekki-Epe Expressway(By Chevron Roundabout).ŸSuite 5-6 Blue Crest Mall, Abijo by Fara Park Estate, Ajah.ŸPlot 2016 Festac Link Road, Beside Mobil Filling Station Festac. Ÿ133, Ogunlana Drive, Opposite UBA Bank, Beside Access Bank, Surulere.Ÿ22A, Lanre Awolokun Street, Gbagada Phase 2, Gbagada.Ÿ12 Admiralty Way, Lekki Phase 1, Lekki.

S/N LOCATION1 Lagos

ŸPlot 1259, Aminu Kano Crescnt, Wuse 11.ŸPlot 171, Gouba Plaza, A.E Ekukinam St, Utako District, Beside Chisco Transport. Ÿ7, Dunukofia Street, by FCDA, Area 11 GarkiŸPlot 104 3rd Avenue (Pa Imodu) Gwarinpa II Estate.Ÿ33, Gana Street, Off Shehu Shagari Road, Adjacent Transcorp Hilton, Maitama.

2 Abuja

3 Port Harcourt

4 Kano5 Asaba

6 Warri7 Enugu8 Ibadan9 Gombe10 Edo

Ÿ190/172, Aba Road, Opposite Waterlines Bus-Stop.Ÿ36, Trans Amadi Industrial Layout Rumubiakani.

Ÿ9B, Niger Street, Opposite Royal Tropicana Hotel.ŸIdolor House, 417B, Nnebisi Road, Beside Uzoigwe Primary School, Opp Old Ecobank.Ÿ40,Effurun-Warri Road.Ÿ19, Ogui Road, Canute House.Ÿ2A, Aare Avenue Off Awolowo Road, New Bodija.ŸAlhajiyel Plaza, Opposite NIPOST Office, Bauchi Road.Ÿ 71, Akpakpava Road, James Watt, Benin City.

The company also has Dulux Colour Shops (DCSs) across the country.

Corporate Profile cont’d

Dulux Colour Centres Addresses



CAP plcRC: 4551

DULUX PAINT

Dulux Trade: Considered as the best paint by professional decorators due to its performance.

It saves time and money with better opacity, better durability, higher spreading rates, pack

sizes that are more convenient and economical to use. It is available as millbases which can

be tinted with the aid of in-store machines to achieve desired colours. Dulux Trade offers a

wide variety of finishes including; Vinyl Silk, Vinyl Matt, Vinyl Soft Sheen, Eggshell, High

Gloss, Weathershield Masonry and special effect paints.

Dulux Emulsion: an interior and exterior finish formulated on high quality emulsion binder; gives an even matt coating.

Dulux Silk Emulsion: an acrylic base emulsion paint with mid sheen finish which is suitable for all interior and exterior surfaces.

Dulux Weathershield: the ultimate exterior paint range for long lasting durability and protection in various textured finishes including; Dulux Weathershield Textured, Dulux Weathershield Smooth, Dulux Weathershield Tex Matt and Dulux Weathershield Ultra.

Dulux Gloss: is a quality quick drying and hardwearing oil modified alkyd paint.

Dulux Eggshell: is a quality quick drying and hardwearing solvent based- modified alkyd satin paint.

Dulux Primer: this is a first coat of paint which can be used to cover a surface in order to get it ready for use or coating. The primers include: Dulux Alkali Resisting Primer and Dulux Undercoat.

Hammerite Metal Paint: Hammerite metal paint requires minimal surface preparation before application and offers long lasting protection, plus a great looking finish for both interior and exterior metal finishes. Unlike other conventional metal paints, Hammerite can be applied directly onto metals without using a primer and undercoat first.

CAPLUX PAINT Caplux paint is a standard product; good quality at an affordable price. It is available in emulsion, gloss and textured variants. It is formulated to give lasting brilliance on application.

Product Range



CAP plcRC: 4551

Whistle Blowing: The whistle blowing procedure in place ensures that e-mails are anonymously received, discretely investigated and a report sent to the Audit Committee.

Marketplace Activities: Our service mission is to delight our customers with exceptional quality products and services. We aspire to provide peace of mind for our customers. Some of the marketplace activities are:-

Product Information Integrity: Precise and concise information about our products are provided to customers through clear and proper labelling and products information bulletin.

Value/culture alignment of dealers: Dealers and their employees are educated on the values of the company and are supported to imbibe them.

Customer involvement in improvement processes: Product knowledge and suggestions for improvement are discussed regularly with our customers at different customer/consumer engagement fora. Customer satisfaction surveys are also conducted as part of the feedback system.

Capacity building of dealers and users: Several training and development initiatives are conducted annually for our dealers, partners and other users of our products.

HSE compliance of dealers: Dealers' outlets are regularly assessed for compliance with HSE standards and practices. Corrective actions are taken as appropriate to ensure conformity.

Careline Unit: The Customer Careline unit collates and monitors feedback from our customers and other stakeholders. This is fed into our process for customer satisfaction improvement initiatives.

Workforce Activities We aspire to be an employer of choice. We recognize that our success is dependent on the calibre and motivation of our people.

Recruitment and Retention: Our policy involves the right placement of people in the right roles and retention of talented people. Annual employee surveys are conducted to provide information on what employees' value and where they want us to improve.

Training and Development: The annual training plan achievement is measured to monitor performance and progress. Effectiveness of training programs is also monitored through annual performance appraisal of staff and delegation of responsibilities.

Freedom of Association and Collective Bargaining: Our employees belong to a vibrant local union and an industry wide trade union.

Corporate Responsibility cont’d



CAP plcRC: 4551

Commitment to Sustainability

CAP Plc is fully committed to sustainability and strives to formulate paints that are eco-friendly without compromising on quality and standards. CAP works closely with its technical partner, AkzoNobel, in furtherance of this objective.

Corporate Social Responsibility

CAP Plc participates in the United Nations Global Compact Initiative and pursues a vibrant corporate social responsibility agenda.

CAP Plc launched its Corporate Social Responsibility (CSR) policy in 2006 with the aim of looking at the business through a new lens. We are mindful that our little action or inaction affects our society, the economy and the environment. Therefore, CAP Plc has been steadfast and committed to the culture of truly Caring About People.

The focus, has been on the educational sector through interventionist initiatives that seek to uplift standards in the sector and provide a more conducive environment for a sound academic attainment.

CAP and Corporate Social Responsibility 2018

The principles of the UN Global Compact guide the way we work and the way we implement policies, processes and programs to clearly align our thrust for business growth with our obligations to the society.

Our CSR policy recognizes the company's role in the following broad areas: Leadership with vision and values, market place activities, workforce activities, supply chain activities, community activities, stakeholder engagement and environmental concerns. The journey has been rewarding and we are encouraged to keep doing good.

Leadership, Vision and Values

We regard ethical leadership and practice as critical to responsible business and are committed to conducting our business according to ethical, professional and legal standards.

Shared Values: The CAP community strives to live its shared values of integrity, respect for the individual, customer focus, team spirit, innovation and openness and communication.

UACN Code of Business Conduct: CAP is a signatory to the UACN code of business conduct which outlines expected pattern of conduct for all employees including the rejection of any form of inducement (giving or receiving).

Corporate Responsibility



CAP plcRC: 4551

1. Donated paint accessories to the training event 0rganized by Grandman Concept

Service Limited.

2. Donated paints to Little Sisters of the Poor (Home for the Elderly) Enugu.

3. Repainted Manufacturers Association of Nigeria (MAN) Secretariat.

4. Repainted St. Paul's Anglican Primary School, Isolo (2018 Major CSR – Let's Colour

Campaign).

5. Supported:

a) The Pacelli School for the Blind Christmas Celebration

b) The YouthCan Project of the SOS Children Villages Nigeria

6. Sponsored:

a) The Annual School Inter-House Sports Competition of Ogba Primary School

b) The refurbishing and repairs of the patrol vehicle for the Nigerian Police

Divisional Headquarters MAN Centre Division

Community ActivitiesCAP Plc values community leadership and responsibility. We are committed to playing a responsible and responsive role in the community. In 2018, we undertook the following projects:


CAP - A Participant in the UN Global Compact InitiativeIn August 2006, the company was accepted by the United Nations' Secretary General as a participant in the Global Compact Initiative, raising the bar in human rights, labour standards, environment and anti-corruption. We have joined the local network and are committed to propagating the values of the Global Compact Initiative.

Global Compact Principle

Businesses should support and respect the protection of internationally proclaimed human rights

Businesses to ensure that they are not complicit in human rights abuses.

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Action Taken/Impact Achieved

The staff handbook provides guidelines on Staff welfare, disciplinary and grievance procedures. Employees are made aware of their rights at the workplace and are assured of fair treatment always.

People are assessed based on defined criteria that do not discriminate on the basis of religion, tribe or gender.

CAP Plc is represented at employers' associations with a view to assisting the process of human rights observance.



CAP plcRC: 4551

Self-development: The tuition costs of pre-approved and relevant programs of study for our employees are fully paid for by the company.

The Crèche: A friendly crèche is operated at the company's head office at Ikeja to promote baby-mother bonding.

Recognition: We recognise the achievement of employees who display exemplary traits of integrity, dedication to duty, customer focus and initiative in line with our shared values.

Life after Work Training: We constantly remind employees of the inevitability of retirement and train them to face the challenges of that situation when it occurs.

Appointment and fair treatment of Suppliers and Contractors: Suppliers of goods and services are appointed using defined criteria that do not discriminate on the basis of religion, tribe or sex. We strive to treat them fairly and settle their invoices on due dates.

Fair treatment of Shareholders: All shareholders are treated equally.

Health, Safety and Environmental (HSE) Activities:We are committed to providing a working environment that is safe for all employees, contractors, customers and members of the public. The company is ISO 9001:2015 certified and also has the ISO 14001:2015 Environmental Management System (EMS) certification.

HSE Policy and Manual: This sets out the company policy on HSE and actions/guidelines for maintenance of a safe workplace. HSE assessments and fire drills are conducted regularly.

Environmental Assessment: We conduct periodic environmental assessment of our operations. The environmental assessment report is submitted to the regulatory agencies for verification.

Promoting Sustainable Environment: We maintain a vibrant relationship with the Nigeria Conservation Foundation. We also ensure that our operations are carried out with minimum impact on the environment.

Promoting Healthy Lifestyle: We conduct health seminars, provide the environment for recreation and share knowledge on the essence of living well. We have a gym and other recreational facilities to promote healthy living through regular exercise and relaxation.




CAP plcRC: 4551


Businesses should work against all forms of corruption, including extortion and bribery.

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CAP Plc is a signatory to the UACN Code of Business Conduct, which outlines expected pattern of conduct for all employees including the rejection of any form of inducement, giving or receiving.


Registered Office/Head Office2, Adeniyi Jones AvenuePMB 21072, Ikeja, LagosTel: 08159493070

Careline telephone: 08159493070 e-mail: [email protected]: www.duluxnigeria.comwww.capplc.com



CAP plcRC: 4551


Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

The elimination of all forms of forced and compulsory labour;

The effective abolition of child labour;

The elimination of discrimination in respect of employment and occupation.

Businesses should support a precautionary approach to environmental challenges;

Undertake initiatives to promote greater environmental responsibility;

Businesses should encourage the development and diffusion of environmentally friendly technologies.

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CAP Plc workers belong to a vibrant local union. CAP recognises the union's right to collective bargaining and implements industry's collective agreement on schedule.

Employees discuss, negotiate and agree their terms of employment and are free to accept/reject the terms without coercion. CAP employs 8 hour work day and annual leave with full benefits.

CAP Plc will not employ anyone under the age of 18 years and will not do business with any supplier that engages in child labour utilization.

CAP Plc is an equal rights employer, without discrimination on account of sex, tribe, religion or profession.

We have undertaken product substitutions in our operations based on environmental considerations.

We are committed to producing environmentally friendly products. For example, the company has successfully produced Lead-free water based paints making the company first to achieve this feat in the country. CAP is also at the advanced stage of producing a low VOC solvent based paint.

We work closely with agencies to monitor our environmental performance and sustain improvements. We conduct quarterly environmental audits. We ensure regular maintenance of our effluent system.

CAP Plc has a well-articulated Environmental Management Programme which made the company to be awarded the NIS ISO 14001:2004 (Environmental Management System) certification by SON.

In making decisions to buy or use products and services, we appraise their environmental friendliness.




CAP plcRC: 4551CAP Cares



CAP plcRC: 4551

I welcome you to the 54th Annual General Meeting of your company, Chemical and Allied Products Plc, holding today, 20th June 2019, at Golden Tulip Festac, Amuwo Odofin, Lagos. At this meeting, I will present to you the company's Audited Annual Report for the year ended December 31, 2018 which has been prepared under the International Financial Reporting Standards (IFRS).

Operating Environment

The Nigerian economy recorded improvements attributable to increasing business activities, rising oil prices in the global market, increase in oil output and inflow of foreign exchange and declining inflation.

Economic indicators have remained positive since the beginning of the year except for the equity market which experienced volatility, and the

manufacturing sector's inaccessibility to cheap funds.

The late signing of the budget slowed down activities as the annual Gross Domestic Product growth rate declined from 2.11% in the last quarter of 2017 to 1.94% in the first quarter of 2018. Purchasing Managers Index (PMI) has been growing, hovering between 56 and 57 index points since the beginning of the year.

Investors' optimism over the recovery of Nigeria's economy increased in the early part of 2018 after the nation pulled out of recession.

Economic activities remained relatively weak in the final quarter of 2018, following a modest showing in Q3 which was enhanced by higher oil production. The PMI slowed down in December and brought the Q4 average below that of Q3, signaling waning momentum of business activities towards the end of the year. On the demand side, multi-year high unemployment rate in Q3 coupled with high inflationary pressures by year-end affected private consumption in Q4.

The exchange rate stabilized with the Naira exchanging with the US Dollar as at December 2018 at an average interbank rate of N306, while the parallel market closed at N360.

Monetary policy remained broadly aggressive, with the MPC holding MPR at 14.0% throughout the year amid aggressive liquidity mop-up exercises. On the other hand, fiscal policy was broadly expansionary supported by massive borrowing programme and non-oil revenue mobilization.

In the social-political climate, the war on insurgency continued as Boko Haram's attacks on soft targets in the North East, and incidences of killings credited to cattle herdsmen continued.

The activities leading to 2019 elections gathered momentum in 2018, resulting in politics being prioritized over governance and economy development.

Review of Operations

We navigated the difficult business terrain by recovering our costs through various cost reduction initiatives and improved efficiencies. This was achieved through products' reformulation and vendor-managed inventory initiatives.

Chairman’s Statement



CAP plcRC: 4551Chairman’s Statement cont’d

CAP Plc expanded its distribution channels and improved on field presence by opening 2 Dulux Colour

Centres in Lagos and Abuja. The company also increased marketing activities and value- adding services.

It extended in-plant paint production to silk line and commenced Dulux Colour Centre upgrades. We will

work harmoniously with Dulux Colour Centre distributors to achieve topline growth in 2019.

The company has successfully transited to ISO 9001:2015 and ISO 14001:2015 certifications on Quality

and Environmental Management Systems, respectively. We will continue to offer high quality products

and services to customers while complying with regulatory requirements in a healthy and safe

environment.

Financial Results

Despite the challenging operating environment in 2018, your company ended the year with an

impressive performance. The business recorded a turnover of N7.76bn representing a growth of 9% over

previous year. The operating profit was N2.28bn, a growth of 15% over 2017.

Dividend

On the strength of this performance, the Board has recommended a dividend of N2.03billion

representing 290kobo for every 50kobo ordinary share to shareholders on the Register of Members as at

close of business on May 24, 2019 for consideration and approval.

Outlook

The economy is expected to gain traction this year, on the back of stronger household consumption and

public spending. The recent slide in oil prices and OPEC's oil output cut pose downside risks going

forward. Economic Analysts see GDP increasing by 2.4% in 2019 and 2.9% in 2020 respectively.

During the President's presentation of 2019 budget to the National Assembly, he articulated his main

economic objectives as stimulation of the economy and promotion of Import substitution and exports.

Macroeconomic variables must significantly improve in order for the country to fully recover from

recession. Therefore, we expect that the economic environment in 2019 will continue to be fluid, and

uncertain and businesses must be proactive and make clear-cut choices about how to compete in the

market place. Businesses also need to make clear definition of strategy, business model and core

operations in order to increase revenue and profitability.

Your company is closely following developments at all levels and is prepared to key into opportunities

that will be created. We are equally poised to take advantage of other structural reforms of the Federal

Government, which might impact the housing and real estate sector.



CAP plcRC: 4551Chairman’s Statement cont’d

The business will respond appropriately to the emerging paint market trends and different economy scenarios by: • Opening New Dulux Colour Centres • Business development • Increasing volumes • Consistent engagement with professionals and specifiers • Completing DCC upgrades • Introducing new products and value added services • Launching Virtual DCC • Entrenching presence in the standard market • Building People Capabilities • Implementing impactful marketing initiatives to ensure effective customer engagement.

Board changes I wish to update you on the changes on the Board since the last Annual General Meeting. Mrs. Oluwakemi Ogunnubi, who served your company as the Managing Director/CEO resigned from her position with effect from 18th February 2019. Also, Messrs Larry Ephraim Ettah and Mr. Abdul Akhor Bello resigned from the board, following their retirement as Group Chief Executive Officers of UAC of Nigeria Plc on July 23 and December 31, 2018 respectively.

Mrs. Omolara Elemide, who was the Acting Group Managing Director/Chief Executive Officer of UAC of Nigeria Plc, was appointed to the Board of CAP Plc as the Acting Managing Director of the company until appointment of a substantive Managing Director.

AppreciationOn behalf of the Board, I thank our valued customers for their loyalty. We pledge to continue to deliver superior products and services to your delight. To our suppliers, trade partners and technical partners, AkzoNobel, we appreciate your support at all times.

I cannot but commend the Management and staff for their diligence in achieving a respectable performance in a turbulent year.

I wish to thank my colleagues on the Board, for their support in ensuring that the company maintains its leadership position amidst all the challenges.

In conclusion, on behalf of the Board of Directors, I wish to thank our distinguished shareholders for your support to the Board and Management of your Company over time. We look to the future with renewed confidence knowing that we have your cooperation at all times.

Thank you for your attention.

Solomon AigbavboaAg. ChairmanFRC/2014/PCNNG/00000007895



CAP plcRC: 4551Board of Directors

& Professional Advisers, etcBoard of DirectorsMr. Solomon Ohiolei Aigbavboa Non - Executive Director/Ag. ChairmanMr. Opeyemi Olukayode Agbaje Non - Executive DirectorAmbassador Kayode Garrick Independent Non - Executive Director Mrs. Omolara Iswat Elemide Ag. Managing Director (Appointed wef 18/2/19)

Retirement by Rotation In accordance with the Articles of Association of the Company and provisions of the Companies and Allied Matters Act, Cap C20 LFN 2004, Mr. Opeyemi Olukayode Agbaje and Ambassador Kayode Garrick are the directors retiring by rotation. Amb. Garrick, being eligible, offers himself for re-election. Mr. Agbaje is however not offering himself for re-election.Also in accordance with the Law, Mrs Omolara Iswat Elemide having been appointed to the Board since the last AGM, retire at this meeting and offers herself for election. The biographical information of the directors for re-election and election are on pages 24 and 25 of this Annual Report.

Record of Directors' Attendance at Board MeetingsIn accordance with section 258 (2) of the Companies and Allied Matters Act, Cap C20 LFN 2004, the record of Directors' attendance at Board meetings during the year is available for inspection at this Annual General Meeting.

Company SecretaryRose Joshua Hamis (Mrs.)

Registered /HeadOffice

2, Adeniyi Jones Avenue

P.M.B. 21072, Ikeja – Lagos.

Tel: 08159493070

E-mail: [email protected]

Registrar

Africa Prudential Plc

220B Ikorodu Road

Palmgrove - Lagos

Tel: 07080606400

Auditors

Messrs Ernst & Young

10th and 15th Floor

UBA House, 57, Marina,

Lagos



CAP plcRC: 4551Board of Directors’ Profile

Mrs. Omolara Iswat Elemide joined UAC of Nigeria Plc (UAC) on October 4, 1983. A Fellow of the Institute of Chartered Accountants of Nigeria, she holds a Higher National Diploma in Accountancy from Kwara State Polytechnic, Ilorin. She had worked in various capacities within the UAC group. She was on a six-month attachment with the Unilever International Audit Departments in United States of America, Germany and United Kingdom in 1991, after which she became the Senior Group Manager, Unilever International Audit, Lagos. At the divestment of Unilever from UACN in 1994, she assumed the position of Audit Manager for the UACN Group. She was at different times between 1997 and 2005, the Divisional Commercial Director and Finance Director of GB

Ollivant/MDS Division and UACN Property Development Company Plc, respectively.

Mrs Elemide joined the Board of Chemical and Allied Products PLC (“CAP PLC”) as Finance Director/Company Secretary in February 2005, a position she held until May 4, 2009 when she was appointed the Managing Director of the company.

She has attended various training programmes within and outside the country amongst which are International Management Seminar at the Four Acres UK, Unilever International Audit Seminar, USA, Strategy & Finance at the Ashridge Business School, UK and the Bullet-Proof Manager Training Series by Crestcom International, Colorado, USA. She was appointed the Executive Director, Corporate Services of UAC of Nigeria PLC with responsibility for Human Resource, Marketing and Strategy & Innovation on the 1st of January, 2018. She was appointed Acting Group Managing Director/CEO of the UAC of Nigeria PLC with effect from 1st January, 2019. She also currently doubles as Acting Managing Director of Chemical and Allied Products PLC, a subsidiary of the UACN.

Mr. Agbaje attended Igbobi College, Yaba, Lagos and holds a first degree in Law from University of Ife (now Obafemi Awolowo University, Ile-Ife) and two Masters Degrees in Law and Business from the University of Lagos and IESE Business School, Spain respectively. He has a multi-disciplinary background and professional experience including legal practice at Kola Awodein (SAN) and Co. for two years; over 16 years in banking and finance rising to Executive Director and has since 2004 managed RTC Advisory Services Limited, a leading strategy and business advisory company as Senior Consultant/CEO. He has also lectured in Business Strategy and the Environment of Business at the Lagos Business School. He is a member of the Board of Trustees of the Lagos

State Security Trust Fund and Chairman of the Board of The Integrity Organisation/Convention on Business Integrity. Mr Agbaje is a member of the Strategic Management Society, USA and was elected Representative-at-Large of the Strategy Practice Interest Group of the Society in November 2016. He also holds memberships of the International Bar Association and Institute of Directors, Nigeria. He writes a weekly column, “Economy, Polity, Society” in Businessday Nigeria and is a regular speaker at conferences, seminars and discussions on economy, business and national development. He joined the Board on 4th May 2009 as a Non-Executive Director.

Mrs. Omolara Iswat Elemide, 59

Mr Opeyemi Olukayode Agbaje, 54



CAP plcRC: 4551Board of Directors’ Profile

Solomon, a Pharmacist was educated at the University of Benin and Federal University of Technology, Owerri where he bagged the B.Pharm (1990), M.Sc (1995) and MBA (2004) degrees respectively. He started his career in academics with the University of Benin where he left as Lecturer 2 in Pharmaceutical Chemistry to join UAC of Nigeria Plc in June 1997 as Personal Products Manager in the then GBO/MDS Division. He thereafter, occupied various Management positions in the UACN group including National Customer Service Manager, MDS Logistics; GM, Franchise Operations, Mr Biggs and GM, Operations, UAC Foods. In September 2008, he joined Zain Telecoms, Nigeria where he served as General Manager, North West Regional Operations and Director, Regional Support in the Sales

Group. In June 2009, he returned to UACN and was subsequently appointed in January 2010 as the Managing Director of MDS Logistics Limited, a joint venture between UACN and Imperial Holdings Limited of South Africa. He was appointed the Managing Director of Livestock Feeds Plc, a Subsidiary Company of UACN Plc, in January 2018.

He has attended several management courses and training locally and internationally. He is a recipient of both the University of Benin Scholarship for academic excellence, and the Federal Government of Nigeria's post graduate scholarship award. He is a Fellow of the Chartered Institute of Logistics & Transport, Nigeria (FCLIT); Chartered Institute of Supply Chain Management, Ghana (FCSCM) and the Institute of Logistics Management, Nigeria (F.ILM). He joined the Board on 5th May 2008 as a Non-Executive Director.

Ambassador Garrick holds a Bachelor of Arts (Languages) degree from the University of Ife (now Obafemi Awolowo University), Ile Ife. He is the founder and Director of South Strategy Consulting. He has 34 years diplomatic experience and is fluent in; English, French, German and Portuguese. Apart from several other diplomatic, consular and public service appointments, he was Nigeria's Ambassador Extraordinary and Plenipotentiary to Brazil, Paraguay and Bolivia.

He was awarded the Grand Cross of the Order of Rio Branco by the President of Brazil. He joined the Board on 21st March, 2013 as a non-executive director. He is an Independent Non-Executive Director.

Ambassador Kayode Garrick, 64

Mr Solomon Ohiolei Aigbavboa, 51




CAP plcRC: 4551

The Directors hereby present their report with the audited financial statements for the year ended 31 December, 2018 which disclose the state of affairs of the company.

Principal ActivitiesThe principal activities of the Company are the manufacturing and sale of paints.

Profit for the YearThe result for the year is summarized as follows:-

Profit for the year

2018N000

2,029,343

2017N000

1,498,730

Report of the Directors

DividendThe Directors are pleased to recommend to shareholders a dividend of N2.03billion representing 290kobo per ordinary share of 50 kobo each. If approved, the dividend will be paid on 21st June 2019 to members, who are on the Register of Members at the close of business on Friday May 24, 2019. The total dividend will be net of withholding tax.

Corporate Governance ReportCAP Plc is a Company of integrity and high ethical standard. Our reputation for honest, open and dependable business conduct, built over the years, is as much an asset as our people and brand. We conduct our business in full compliance with the laws and regulations of Nigeria and our group Code of Business Conduct.

The Board of DirectorsUnder the Articles of Association of the Company, the business of the Company shall be controlled and managed by the Directors, who may exercise all such powers of the company as are not by statute or the Articles to be exercised by the company in General Meeting. The operations of the Board of CAP Plc are governed by a charter.

Composition of the Board of DirectorsThe Board of CAP Plc was made up of four (4) Non-Executive Directors and one (1) Executive Director during the year. All the Directors have access to the services of the Company Secretary. With the approval of the Chairman of the Board, they may take advice from third party professionals in areas where such advice will improve the quality of their contributions to Board deliberations.



CAP plcRC: 4551

Mr. Larry E. Ettah - Non-Executive Director/Chairman (Resigned wef 20/7/18)Mr. Abdul Akhor. Bello - Non-Executive Director/Ag. Chairman (Resigned wef 31/12/18)Mr. Solomon Ohiolei Aigbavboa - Non-Executive Director/Ag. Chairman Mrs. Oluwakemi Oluseyi Ogunnubi - Managing Director (Resigned wef 18/2/19)Mrs Omolara Iswat Elemide - Ag. Managing Director (Appointed wef 18/2/19)Mr. Opeyemi Olukayode Agbaje - Non-Executive DirectorAmbassador Kayode Garrick - Independent Non-Executive Director

Directors' ShareholdingThe Register of Directors' interests in the share capital of the Company is open for inspection at the Annual General Meeting. The direct and indirect interest of Directors in the issued share capital of the Company as recorded in the Register of Directors' shareholdings and/or as notified by the Directors for the purposes of sections 275 and 276 of the Companies and Allied Matters Act and the listing requirements of the Nigerian Stock Exchange are as follows:

Directors' Interest in ContractsNone of the Directors has notified the Company for the purpose of section 277 of the companies and Allied Matters Act of any disclosable interest in contracts with the Company or related party transactions during the year.

Separation in Chairman and CEO's Positions The position of the Chairman of the Board of Directors is distinct from that of the Managing Director/CEO. The Ag. Chairman of the Board was Mr. Abdul Akhor Bello, who was a Non-Executive Director, while the Managing Director/CEO during the year was Mrs Oluwakemi Oluseyi Ogunnubi.

Directors’ Report cont’d

The Directors who held office during the year and to the date of the report were:-

Mr. Larry E. EttahMr. Abdul A. BelloMrs. Oluwakemi OgunnubiMr. Opeyemi O AgbajeMr. Solomon O AigbavboaAmbassador Kayode Garrick

NumberDirect

4,592,971365,952

40,66562,33257,330

1,215

31 December 2018 31 December 2017

Number4,083,332

365,95240,66562,33257,330

1,215

Abdul Akhor Bello 360,427,061

Percentage (%)Name Indirect Interest (UAC of Nig Plc)

51.49

Directors' Indirect Interest

UAC of Nigeria Plc

Shareholder

360,427,061

No. of Shares

51.49

(%)

Major ShareholdingsAccording to the Register of members, the following shareholder of the company held more than 5% of the issued shared capital of the company as at December 31, 2018.



CAP plcRC: 4551

The Roles and Responsibilities of the Board are: a) Formulation of policies, strategy and overseeing the management and conduct of the Business; b) Formulation and management of risk management framework; c) Succession planning and the appointment, training, remuneration and replacement of board members and senior management; d) Overseeing the effectiveness and adequacy of internal control system; e) Overseeing the maintenance of the company's communication and information dissemination policy; f) Performance appraisal and compensation of board members and senior executives; g) Ensuring effective communication with shareholders, stakeholders and the investing public; h) Ensuring the integrity of financial controls and reports; i) Ensuring that ethical standards are maintained; j) Ensuring compliance with the company's memorandum and articles of association, applicable laws, regulations, standards and code of corporate governance by the company k) Definition of the scope of delegated authority to board committee and management and their accountabilities; l) Definition of the scope of corporate social responsibility through the approval of relevant policies; m) Approval and enforcement of the group code of business conduct and code of conduct for directors.

Board Appointment The process of appointing Directors involves a declaration of a vacancy at the board meeting; the sourcing of the curriculum vitae of suitable candidates depending on the required skills, competence and experience at any particular time; and the reference of the curriculum vitae to the Risk and Governance committee of the Board for necessary background checks, informal interviews/interaction and a recommendation for the approval of the Board of Directors. A Director appointed by the Board is presented to the next Annual General Meeting of members of the Company for election in line with statutory requirement.

Directors' Induction and Training Every newly appointed Director receives a comprehensive letter of appointment detailing the terms of reference and composition of the board and board committee, schedule of board meetings, his entitlements and demand on his time as a result of the appointment. The letter of appointment is accompanied with the Memorandum and Articles of Association of the Company, the previous year's Annual Report and Financial Statements, the Code of Corporate Governance for Public Companies in Nigeria, UACN Code of Business Conduct, and other documents, policies, processes and procedures of the Company that help the director to gain understanding of the company, its history, culture, values, business principles, people, projects, processes and plan.




CAP plcRC: 4551

A new Director undergoes an induction in order for him to get acquainted with the business operations, issues and brands of the company. As part of the induction process, he is introduced to the Directors, members of the Leadership Team, Company's operations and Dulux partners.

Board MeetingsThe Board met 6 (six) times during the 2018 financial year. The following table shows the list of Directors and their attendance at the Board meetings.

Board EvaluationA Board performance evaluation was undertaken in the year 2018. The performances of the Board, Board Committee and individual Directors were adjudged satisfactory. Necessary feedbacks were given to individual Directors arising from the exercise.

Board CommitteeThe Board functions as a full Board and through the Risk and Governance Committee. The Committee makes recommendations for approval by the full Board. The following are the Committee's terms of reference:-

Risks 1. Assist the Board in its oversight of risk management and monitoring the Company's performance with regards to risk management; 2. Recommend for Board approval the risk policy of the Company and review its implementation at all levels to achieve the Company's objective ; 3. Monitor that risk management policies are integrated into the Company's culture; 4. Review quarterly risk management reports and make recommendation to the Board on appropriate actions; 5. Periodically evaluate the Company's risk profile, action plans to manage high risks and progress on the implementation of these plans; 6. Ensure that the Company's risk exposures are within the approved risk control limits;

DIRECTORS

Mr. Larry Ephraim Ettah - ChairmanMr. Abdul Akhor BelloMrs. Oluwakemi Oluseyi OgunnubMr. Opeyemi Olukayode AgbajeMr. Solomon Ohiolei AigbavboaAmb Kayode Garrick

21 MAR

PPPPPP

20 APR

PPPPPP

19 JUN

PPPPPP

20 JUL

PPPPPP

18 OCT

RPPPPP

6 DEC

RPPPPP

Attendance Key: P = Present R = Resigned




CAP plcRC: 4551

7. Undertake at least annually a thorough risk assessment covering all aspects of the company's business with a view to using the result of the risk assessment to update the risk management framework of the company; 8. Understand the principal risk to achieving the Company's strategy; 9. Ensure that the business profile and plans are consistent with the Company's risk appetite; 10. Make recommendation on the Company's risks management framework including responsibilities, authorities and control; 11. Review the process for identifying and analyzing business level risks; 12. Review the structure for, and implementation of, risk measurement and reporting standard as well as methodologies; 13. Review key control processes and practices of the Company, including limit structures. 14. Ensure that the Company's risk management practices and conditions are appropriate for the business environment; 15. Assess new risk return opportunities.

Governance 16. Oversee the Company's financial reporting, its policies and processes; 17. Review the Company's operational performance; 18. Make recommendations to the Board on capital expenditure, specific projects and their financing within the overall approved plan; 19. Appraise the investment climate and recommend to the board where, when and what investment(s) to make with the Company's surplus funds; 20. Make recommendations on management of Company's cash and debt exposure/ borrowings; 21. Monitor compliance with applicable laws and regulations by the Company; 22. Review updates on implementation level of Internal and external auditors' recommendations by management from Board representatives on the Audit Committee; 23. Periodically review the manning level and adequacy of the resources with which internal audit and the risk management functions discharge their duties; 24. Monitor, benchmark and apply as appropriate, best practices with regard to governance and risk; 25. Review accounting policies and reporting standards and ensure their adequacy for the Company's purposes; 26. Make recommendations on the composition of the Board; 27. Recommend the appointment, remuneration and promotion of Executive Directors and Senior Management; 28. Make recommendations to the Board on the adoption of a code of conduct (including the policy on trading in company shares) for Directors and senior executives and to review same from time to time;




CAP plcRC: 4551

29. Periodically review and make recommendations to the Board on the compensation, performance and talent management, succession planning and retention for the Company; 30. Make recommendations on the whistle blowing process for the Company.


The Committee met four (4) times during the year. The following shows the dates of the

meetings and attendance of members of the Committee at such meetings:-

DIRECTORS

Mr. Opeyemi Olukayode Agbaje - ChairmanMr. Abdul Akhor BelloMrs. Oluwakemi Oluseyi OgunnubiMr. Solomon Ohiolei AigbavboaAmbassador Kayode Garrick

20 MAR

P-PPP

19 APR

PPPPP

19 JUL

PPPPP

18 OCT

PPPPP

Attendance Key: P = Present - = Not yet a member

Governance at Management Level The Executive Management of the Company gains group insight from presenting the Company's draft annual budget to the group executive management and Board of the parent Company, UAC of Nigeria Plc (UACN). The Chairman of the Board also attends the Company's annual business conference to give the employees feedback from the group and Board on Company's performance in the previous year, corporate strategy, business direction and performance expectation for the New Year. The Managing Director (MD) attends the monthly UACN group business review meetings where company's performance, business issues and plans are reviewed and direction given. The executive management and leadership team of the Company attend the annual UACN group business retreat where strategic and executional issues are discussed with clear direction and action plans, in additional to other periodic group functional review meetings. At the company level, the leadership team members report to the Managing Director and support the Managing Director in the day to day management of the business and in the implementation of the company policies. The Company structure ensures adequate in-built succession plans at all levels of the business. Accountability meetings and reviews are held on a weekly, monthly and quarterly basis. These include weekly meetings of the leadership team. The company holds an annual business conference where the financial goals and other strategies of the business for the year are discussed, agreed and unveiled with the leadership team, management, staff and business partners in attendance.



CAP plcRC: 4551

Statutory Audit CommitteeThe Statutory Audit Committee consists of six members, made up of three (3) representatives of the shareholders elected at the previous Annual General Meeting for a tenure of one year and three (3) representatives of the Board of Directors nominated by the Board.

The Chairman of the Committee is Mr. Solomon Ohiolei Aigbavboa, a Non-Executive Director. The Company Secretary is the Secretary of the Committee. The meetings of the Committee were attended by the Company's Risk & Compliance Team Lead, representatives of Ernst & Young, our external auditors, KPMG, our internal auditors and Head, Risk and Compliance of the UACN group. The Committee operates within the provisions of the Companies and Allied Matters Act CAP C20 Laws of the Federation 2004, 2011 SEC Code of Corporate Governance for Public Companies in Nigeria, its terms of reference and best practice.

Terms of Reference of the Audit CommitteeThe Committee is authorized by the Companies & Allied Matters Act, CAP C20 Laws of the Federation 2004: a) To ascertain whether the accounting and reporting policies of the Company are in accordance with legal requirements and agreed ethical practices; b) Review the scope and planning of external audit; c) Review the findings as reported through the management controls report and management responses thereon; d) Keep under review the effectiveness of the Company's system of accounting and internal control; e) Make recommendation to the Board with regards to the appointment, removal and remuneration of the external auditors of the Company; f) Authorise the internal auditor to carry out investigations into any activities of the Company, which may be of interest or concern to the Committee.


The Committee met five (5) times during the year and the following table shows the attendance of the members at the meetings.

MEMBERS

Mr. Solomon Ohiolei AigbavboaMr. Opeyemi Olukayode AgbajePrince Bassey ManfredMrs. Abigail Olufolake OlaajeAmbassador Kayode Garrick Mrs. Samiat Adebanke Odunuga

20 MAR

PPPPPP

11 JUN

PPPPPP

18 JUL

PPPPRP

18 OCT

PPPPRP

6 DEC

PPPPRP

Attendance Key: P = Present



CAP plcRC: 4551

In addition, the 2011 Securities and Exchange Commission (SEC) Code of Corporate

Governance also assigns the following responsibilities to the Audit Committee:

a) To oversee internal audit and internal controls; and to document and

review the roles, responsibil ities, authority and scope of

operations of the internal audit function; approve the annual internal

audit plan.

b) Assist in the oversight of the integrity of the Company's financial

statements, compliance with legal and other regulatory requirements,

assessment of qualifications and independence of external auditor and

performance of the Company's internal audit function as well as that of

external auditors;

c) Establish an internal audit function and ensure there are other means of

obtaining sufficient assurance of regular review or appraisal of the system

of internal controls of the company;

d) Ensure the development of a comprehensive internal control framework

for the company; obtain assurance and report annually in the financial

report, on the operating effectiveness of the company's internal control

framework;

e) Oversee management's process for the identification of significant fraud

risks across the company and ensure that adequate prevention, detection

and reporting mechanisms are in place;

f) At least on an annual basis, obtain and review a report by the internal

auditor describing the strength and quality of internal controls including

any issues or recommendations for improvement, raised by the most

recent control review of the company;

g) Discuss the annual audited financial statements and half yearly unaudited

statements with management and external auditors;

h) Discuss policies and strategies with respect to risk assessment and

management;

i) Meet separately and periodically with management, internal auditors and

external auditors;

j) Review and ensure that adequate whistle-blowing procedures are in place.

A summary of issues reported are highlighted to the chairman;

k) Review, with the external auditor, any audit scope limitations or problems

encountered and management's responses to same




CAP plcRC: 4551

l) Review the independence of the external auditors and ensure that where

non-audit services are provided by the external auditors, there is no conflict

of interest;

m) Preserve auditor independence, by setting clear hiring policies for

employees or former employees of independent auditors;

n) Consider any related party transactions that may arise within the company

or group;

o) Invoke its authority to investigate any matter within its terms of reference

and the company must make available resources, including internal audit

and access to external advice where necessary, to carry out this function;

and report to the members of the company at annual general meeting and

to the Board of Directors, when necessary.


Risk Management We have a risk management framework which articulates the Company's strategy, objective, vision and mission around risk management for the UACN group. The implementation of the framework commenced in quarter 1 2014. There is a risk and compliance unit in the Company to drive the process.

Trading in Securities PolicyIn compliance with clause 17 of the Nigerian Stock Exchange amended Rules, we have a Securities Trading Policy in place to guide our Board, Employees, External Advisers and Related Parties on trading in the securities of the Company within the closed period. Under the policy, the closed period is when no Director, employee, external adviser and related party with inside information can trade in the Company's securities. The closed period is 15 days prior to the date of any meeting of the Board of Directors proposed to be held to consider any price sensitive matter or the date of circulation of agenda papers pertaining to a board meeting on any of the said matters up to 24 hours after the price sensitive information is submitted to the exchange. The trading window shall thereafter be opened. We hereby confirm that no Director traded in the securities of the company within the closed period.

Shareholders Complaints Management PolicyWe have put in place a Complaints Management Policy to handle and resolve complaints from our shareholders and investors. The policy was defined and endorsed by the Company's senior management that is also responsible for its implementation and for monitoring compliance. The policy has been posted on the company's website and shall be made available to shareholders of the company at the Annual General Meeting.



CAP plcRC: 4551

Code of Business ConductAs a member of UACN group, the employees of the Company subscribe to UACN Code of Business Conduct. The code forms the basis of the conduct expected of every employee of the company and reflects our core values and principles. The Board of Directors is responsible for ensuring that the Code is communicated to, understood and observed by, all employees.

Compliance with the Code of Corporate GovernanceThe Company has complied with the 2011 Code of Corporate Governance for Public Companies.

HUMAN RESOURCES REPORT

Employment of Disabled PersonsThe Company adhered to its age-long policy of non-discrimination against disabled persons in 2018. The Company had one disabled person on its payroll as at 31 December, 2018.All employees are treated equally and are given equal opportunities to develop their careers; Disability is not a barrier to promotion or career development in our company.

Health, safety and welfare of Company employeesOur policy at all times is to conduct our operations safely, protecting the health and safety of employees and all persons who may be affected. We will manage all our activities so as to give benefits to the society, ensuring that relevant laws and regulations are kept and that our activities are acceptable to the community at large with minimum environmental impact.

HIV/AIDSOur company works to ensure a safe healthy working environment by providing basic HIV/AIDS training to inform, educate and train all employees about HIV/AIDS prevention, care and control. We do not discriminate against or dismiss any employee on the basis of his or her HIV status. The HIV status and medical records of any individual will be considered and kept as strictly confidential. As much as possible care will be taken to support such individuals by providing counselling and medical support services.

Employee Welfare The company has several welfare initiatives in the various locations of its operations, to ensure the health and vitality of the employees. Recreational facilities are also available in some locations. In addition, free medical care is provided for all employees, their spouses and up to four children through Health Management Organisation (HMO) while voluntary health screening exercises are also provided to employees on an ongoing basis.




CAP plcRC: 4551

We implement a number of programmes to ensure that our employees have work-life balance. Employees are encouraged to take their annual vacation as and when due. The Company believes this will provide them the opportunity to refresh and renew to stay healthy to perform better on the job. It is the Company's policy not to allow accumulation of leave beyond one year except under extremely special circumstances. Work is organised to enable employees work within the official business hours to catch up with their social and family obligations. The Company has paternity leave of 5 working days in place for male employees whose wives are delivered of babies. The maternity leave policy has been reviewed to accommodate additional annual leave days.

Employee Engagement and Involvement Our employees are fully involved in strategy formulation and execution, in order to achieve business plan ownership and commitment at all levels. Regular meetings are held at different levels of the Company and Business Units to ensure that all Employees are given the opportunity to interact with one another and with the management team for exchange of ideas and sharing of relevant business information. The other engagement platforms are: Joint Consultative Committees (JCCs), Business Review Meetings, Open Forum/Community Briefings/Family Meetings and Leadership Team (LT) meetings of the various Business Units and the Corporate Centre.We also have in place counselling sessions between Executive Management and different cadres of talents. These sessions allow management to proactively engage the talents with a view of addressing their career issues, welfare and retention.

Training and Staff DevelopmentThe company recognizes training of its human resources as an investment which adds value to the business. We are therefore committed to continuous development of our workforce through courses and seminars organized internally and externally including overseas courses. Individual needs of each employee are considered in organizing training courses. Members of staff are also encouraged and assisted financially to embark on self-development schemes to improve themselves both academically and professionally.

Anti-corruption and business integrityOur company does not give or receive whether directly or indirectly, bribes or other improper advantages for business or financial gain. No employee may offer, give or receive any gift or payment which is or may be construed as being, a bribe. Any demand for, or offer of, a bribe must be rejected immediately and reported to management. No employee will be criticized for any loss of business resulting from adherence to these principles. The company's accounting records and supporting documents must accurately describe and reflect the nature of the underlying transactions. No undisclosed or unrecorded account, fund or asset will be established or maintained.

Whistle blowing A whistle blowing policy has also been put in place to encourage employees at all levels to alert and inform management of any negative development that might impinge on the value, performance and/or image of the company before any harm is done. Similarly a corporate fraud policy has been established to facilitate the development of controls which will aid in the detection and prevention of fraud against the company. It is our intention to promote consistent organizational behaviour by providing guidelines and assigning responsibility for the development of controls and conduct of investigations.




CAP plcRC: 4551Directors’ Report cont’d

Dulux Agents 1. Ambroziny International Nig. Ltd. Enugu2. Amehgate Integrated Services Ltd. Abuja, Gombe3. Cellit Limited Lagos4. Charterbridge Ventures Limited Lagos5. Chrisbaki Nigeria Limited Warri6. Edeoga Nigeria Limited Abuja, Kaduna & Jos7. First Ebony Invest. & Allied Services Ltd. Lagos8. House Affairs Limited Lagos9. International Partners & Dev. Nig. Ltd. Kano10. Kay Taiwo International Limited Lagos11. Kapital Int. Consulting & Investment Nig. Ltd. Benin12. KSV Synergy Nigeria Limited Lagos13. Levitikal Realities & Construction Limited Abuja14. Marco Bruno Limited Port Harcourt15. Matojez Integrated Service Limited Lagos16. Metrospeed Property Limited Ibadan17. Stanzel Associates Limited Abuja18. Taes International Concept Limited Abuja19. Treaty Projects Limited Port Harcourt, Asaba

Donated paints accessories to the training event organized by Grandman Concept Service LimitedDonated paints to the Little Sisters of the Poor (Home for the Elderly) EnuguDonated paints for the repainting of the Manufacturers Association of Nigeria (MAN) SecretariatRepainted St. Paul's Anglican Primary School, IsoloSponsored the Annual School Inter-House Sports Competition of Ogba Primary SchoolSponsored the refurbishing and repairs of the patrol Vehicle for the Nigerian Police Divisional Headquarters MAN Centre DivisionSupported the Pacelli School for the Blind Christmas CelebrationSupported the YouthCan Project of the SOS Children Villages NigeriaTOTAL

301,038.00

287,749.80

284,604.401,450,346.69

108,100.00

100,000.0037,872.20

4,080,000.006,649,711.09

1

2

3

45

6

78

DonationsThe following amounts were given by way of gifts and donations during the year ended 31 December, 2018:

AMOUNTN

S/N INSTITUTIONS



CAP plcRC: 4551

Customer Service and Quality PolicyWe remain a quality driven company. We pursue continuous improvement in products and customer service and quality in all areas of our activities.

Dated this 20th day of March, 2019By Order of the Board

Rose Joshua Hamis (Mrs.)Company SecretaryFRC/2013/ICSAN/00000002356




CAP plcRC: 4551

The Companies and Allied Matters Act requires the Directors to prepare financial statements for each financial year that give a true and fair view of the state of financial affairs of the company at the end of the year and of its profit or loss. The responsibility includes:

a) ensuring that the company keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the company and comply with the requirements of the Companies and Allied Matters Act;

b) designing, implementation and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; and

c) preparing the company's financial statements using suitable accounting policies supported by reasonable and prudent judgments and estimates, that are consistently applied.

The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards and the requirements of the Companies and Allied Matters Act.

The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the company and of its profit. The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the Directors to indicate that the Company will not remain a going concern for at least twelve months from the date of this statement.

Mrs. Omolara I. Elemide Solomon O. Aigbavboa Ag. Managing Director Ag. ChairmanFRC/2013/ICAN/00000001850 FRC/2014/PCNNG/0000000789520 March 2019 20 March 2019

Statement of Directors’ Responsibilities For the year ended 31 December 2018

Audit Committee Members

Am

bas

sad

or

Kay

od

e G

arri

ck

Mrs

. Sam

iat

Od

un

uga

Mr.

So

lom

on

A

igb

avb

oa

Mrs

. Ab

igai

l O

laaj

e

Pri

nce

Bas

sey

Man

fre

d

Mr.

Op

eye

mi

Agb

aje



CAP plcRC: 4551



CAP plcRC: 4551Report of the Audit Committee

In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act,

we have reviewed the audited financial statements of the company for the year ended 31

December 2018 and report as follows:-

a. The accounting and reporting policies of the company are consistent with

legal requirements and agreed ethical practices.

b. The scope and planning of the external audit were adequate.

c. The company maintained effective systems of accounting and internal

controls during the year.

d. The company's management adequately responded to matters covered in

the management report issued by the external auditors.

We deliberated with the external auditors who confirmed that all necessary cooperation was

received from management and that they had issued a clean report in respect of the year

ended 31 December 2018.

Solomon O. AigbavboaChairman, Audit CommitteeFRC/2014/PCNNG/00000007895Dated 20th March 2019

Members of the CommitteeMr. Solomon Aigbavboa - ChairmanMr. Opeyemi Agbaje - Non-Executive directorAmbassador Kayode Garrick - Non-Executive directorPrince Bassey Manfred - Shareholders' representativeMrs. Abigail O. Olaaje - Shareholders' representativeMrs. Samiat Odunnuga - Shareholders' representative



CAP plcRC: 4551

Ernst & Young10th FloorUBA House57, MarinaP. O. Box 2442, MarinaLagos, Nigeria.

Tel: +234 (01) 631 4500Fax: +234 (01) 463 0481Email: [email protected]

Opinion

We have audited the financial statements of Chemical and Allied Products Plc which comprise

the statement of financial position as at 31 December 2018, the statement of profit or loss and

other comprehensive income, statement of changes in equity and statement of cash flows for

the year then ended, and notes to the financial statements, including a summary of significant

accounting policies and other explanatory information.

In our opinion, the financial statements give a true and fair view of the financial position of

Chemical and Allied Products Plc as at 31 December 2018, and its financial performance and

cash flows for the year then ended in accordance with the International Financial Reporting

Standards (IFRS) issued by International Accounting Standards Board, the provisions of the

Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004 and in

compliance with the Financial Reporting Council of Nigeria Act No.6, 2011

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our

responsibilities under those standards are further described in the Auditors' Responsibilities for

the Audit of the Financial Statements section of our report. We are independent of the

Company in accordance with International Ethics Standards Board for Accountants' Code of

Ethics for Professional Accountants (IESBA Code) and other independence requirements

applicable to performing the audit of Chemical and Allied Products Plc. We have fulfilled our

other ethical responsibilities in accordance with the IESBA Code, and in accordance with other

ethical requirements applicable to performing the audit of Chemical and Allied Products Plc.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion .

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most

significance in our audit of the financial, statements of the current period. We have determined

that there are no key audit matters to communicate in our report.

Independent Auditors' Report

To the Members of Chemical and Allied Products Plc

Report on the Audit of the Financial Statements

Report of the Auditors



CAP plcRC: 4551

Other InformationThe Directors are responsible for the other information. The other information comprises the Directors' Report, the Audit Committee Report, Corporate Governance Report and Other National Disclosures (Value Added Statement and 5 Year Financial Summary) as required by the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004. The other information does not include the financial statements and our auditors' report thereon.

Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Statements The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, the provisions of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004 and in compliance with the Financial Reporting Council of Nigeria Act, No 6, 2011, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Report of the Auditors cont’d



CAP plcRC: 4551

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain

professional scepticism throughout the audit. We also:

Ÿ Identify and assess the risks of material misstatement of the financial statements,

whether due to fraud or error, design and perform audit procedures responsive to

those risks and obtain audit evidence that is sufficient and appropriate to provide a

basis for our opinion. The risk of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error, as fraud may involve collusion,

forgery, intentional omissions, misrepresentations, or the override of internal control.

Ÿ Obtain an understanding of internal control relevant to the audit in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the company's internal control.

Ÿ Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the Directors.

Ÿ Conclude on the appropriateness of the Directors' use of the going concern basis of

accounting and based on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that may cast significant doubt on

the Company's ability to continue as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention in our auditors' report to the

related disclosures in the financial statements or, if such disclosures are inadequate,

to modify our opinion. Our conclusions are based on the audit evidence obtained up

to the date of our auditors' report. However, future events or conditions may cause

the company to cease to continue as a going concern.

Ÿ Evaluate the overall presentation, structure and content of the financial statements,

including the disclosures, and whether the financial statements represent the

underlying transactions and events in a manner that achieves fair presentation.

Ÿ Obtain sufficient appropriate audit evidence regarding the financial information of

the entity or business activities within the Company to express an opinion on the

financial statements. We are responsible for the direction, supervision and

performance of the company's audit. We remain solely responsible for our audit

opinion.




CAP plcRC: 4551

We communicate with the Directors regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including any significant deficiencies in

internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical

requirements regarding independence, and to communicate with them all relationships and

other matters that may reasonably be thought to bear on our independence, and where

applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of

most significance in the audit of the financial statements of the current period and are

therefore the key audit matters. We describe these matters in our auditor's report unless law or

regulation precludes public disclosure about the matter or when, in extremely rare

circumstances, we determine that a matter should not be communicated in our report because

the adverse consequences of doing so would reasonably be expected to outweigh the public

interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

In accordance with the requirement of Schedule 6 of the Companies and Allied Matters Act,

CAP C20 Laws of the Federation of Nigeria 2004, we confirm that:

i) we have obtained all the information and explanations which to the best of

our knowledge and belief were necessary for the purposes of our audit;

ii) in our opinion proper books of account have been kept by the Company, so

far as appears from our examination of those books; and

iii) the Company's statement of financial position and statement of profit or

loss and other comprehensive income are in agreement with the books of

account.

Yusuf Aliu, FCA

FRC/2012/ICAN/00000000138

For: Ernst & Young

Lagos, Nigeria

27 March 2019




CAP plcRC: 4551

The notes on pages 49 to 119 are an integral part of these financial statements.

RevenueCost of sales

Gross profitSelling and distribution expensesAdministrative expensesOther income

Operating profitFinance incomeFinance costNet Finance income

Profit before taxationIncome tax expense

Profit after tax Other comprehensive income for the year net of tax

Total comprehensive income for the year, net of tax

Earnings per share for profit attributable to the equity holders of the company:

Basic and diluted EPS (kobo)

Statement of Profit or Loss and Other Comprehensive IncomeFor the year ended 31 December 2018

Notes

57i

7iii7ii6

910

11

13

2018N000

7,764,534 (4,034,561)

3,729,973(356,737)

(1,149,872) 61,837

2,285,201

327,249 (14,618) 312,631

2,597,832 (568,489)

2,029,343

-

2,029,343

290

2017N000

7,113,950 (3,863,985)

-3,249,965 (301,225)

(1,050,656) 77,592

1,975,676

226,703(20,668) 206,035

2,181,711 (682,981)

1,498,730

-

1,498,730

214



CAP plcRC: 4551

AssetsNon-current assetsProperty, plant and equipmentIntangible assetsFinance lease receivable

Current assetsInventoriesRefund AssetTrade and other receivablesPrepaymentsCash and cash equivalents

Total assets

LiabilitiesNon-current liabilitiesDeferred taxation liabilities

Current liabilitiesTrade and other payablesCurrent income tax liabilitiesDividend payableBorrowingGovernment grantRefund liability

Total liabilitiesEquity Ordinary share capitalShare premiumRetained earningsTotal equity

Total equity and liabilities

Notes

1415

17b

1624

17a1819

23

211112202025

2222

22

2018N000

729,962 25,814 10,377

766,153

884,115 926

172,488 148,270

4,339,294 5,545,0936,311,246

127,053 127,053

1,559,016

800,841 1,013,328

- -

2,070 3,375,254 3,502,307

350,000

19,254 2,439,685 2,808,939

6,311,246

2017N000

691,059 49,068 10,379

750,506

1,187,405 -

110,700 144,920

2,820,459 4,263,484 5,013,990

100,049 100,049

1,130,834

652,175 809,598

77,631 1,484

- 2,671,721 2,771,770

350,000

19,254 1,872,966 2,242,220

5,013,990

Statement of Financial PositionFor the year ended 31 December 2018

Mr. Solomon AigbavboaAg.Chairman

FRC/2014/PCNNG/00000007895

Mrs. Olufunke OlokodanaFinance Controller

FRC/2013/ICAN/00000003222

Mrs. Omolara ElemideAg. Managing Director

FRC/2013/ICAN/00000001850


The financial statements on pages 49 to 119 has been approved and authorised for issue by the Board of directors on March 20th 2019.



CAP plcRC: 4551

At 1 January 2017

Profit for the yearOther comprehensive income

Total comprehensive income:

Transaction with owners:Dividends paid and proposed

Balance at 31 December 2017

Effect of adoption of new accounting standards

Restated opening balance

Profit for the year

Other comprehensive income

Total comprehensive income:Transactions with owners:Dividend paid and proposed

Balance at 31 December 2018

ShareCapital

N000

350,000 -

-

-

350,000

-

-

-

350,000

Share Premium

N000

19,254 -

-

19,254

19,254

-

19,254

RetainedEarnings

N000

1,914,236

1,498,730 -

1,498,730

(1,540,000)

1,872,966

(27,624)

1,845,342

2,029,343

-

2,029,343

(1,435,000)

2,439,685

TOTALEQUITY

N000

2,283,490

1,498,730 -

1,498,730

(1,540,000)

2,242,220

(27,624)

2,214,596

2,029,343

-

2,029,343

(1,435,000)

2,808,939

Statement of Changes in EquityFor the year ended 31 December 2018


Notes

12

2.1.3 (i & ii)

12



CAP plcRC: 4551

Profit before taxationAdjustments forDepreciation of PPEAmortisation of intangible assetsProfit on sale of PPEFinance costsGovernment grantImpairment on other receivableImpairment and write-off on trade receivableImpairment on intercompany receivableImpairment of short term depositsFinance leaseFinance incomeNet foreign exchange loss/(gains)Cash flows from operations before working capital changesDecrease/(Increase) in inventory(Increase)/decrease in trade and other receivablesIncrease/(decrease) in payables(Increase)/decrease in prepaymentIncrease in refund assetDecrease in refund liabilityCash flows generated from operationsIncome taxes paid Net cash flows from operating activities

Cash flows from investing activities Purchase of PPEPurchase of Intangible assetsProceeds from disposal of PPEImpairment of cash short termInterest received Net cash flows from investing activities

Cash flows from financing activities Dividends refundedDividends paidInterest PaidLoan RepaymentNet cash flows used in financing activities

Net increase in cash and cash equivalentsNet foreign exchange differenceCash and cash equivalents at beginning of periodCash and cash equivalents at end of period

2018N000

2,597,832

94,736 23,255

(52)14,618 (1,484)

81414,776

2,633 11,243

2(327,249)

2,473 2,433,596

303,290 (156,439)

428,182 (3,350)

256(424)

3,005,111 (319,081)2,686,030

(133,982)

-395

(43,095) 327,249 150,567

206,683

(1,437,953) (4,019)

(80,000) (1,315,289)

1,521,308

(2,473)2,820,459 4,339,294

2017N000

2,181,711

81,188 22,242 (4,877) 20,668 (4,136)

1,205 1,296

-- 2

(226,703) (6,271)

2,066,325 (253,519)

493,774 (45,244) 220,840

--

2,482,176 (682,923) 1,799,253

(180,319)

(13,964) 8,515

-226,703

40,935

288,781

(1,540,000) (15,239) (85,082)

(1,351,540)

488,648 6,271

2,325,540 2,820,459

Statement of Cash FlowsFor the year ended 31 December 2018


Notes

14156

10207ii7ii7ii7ii1796

17c

2425

11

1415

9

12122020

61919



CAP plcRC: 4551

1. General Information

Chemical and Allied Products Plc ('the company') is a company incorporated in Nigeria. The company is involved in the manufacturing and sale of paint. The address of the registered office is 2 Adeniyi Jones Avenue, Ikeja, Lagos.

The company is a Public Limited Liability Company, which is listed on the Nigerian Stock Exchange domiciled in Nigeria.

2. Summary of Significant Accounting Policies

2.1 Basis of Preparation The financial statements have been prepared in accordance with International

Financial Reporting Standards (IFRSs). The financial statements have been prepared on a historical cost basis. The policies set out below have been consistently applied to all the years presented.

(All amounts are in Naira thousands unless otherwise stated)

2.1.1 Going Concern Nothing has come to the attention of the Directors to indicate that the company

will not remain a going concern for at least twelve months from the date of this financial statements.

2.1.2 New and Amended Standards and Interpretation The following new standards and amendments became effective as of 1 January

2018:

IFRS 15 Revenue from contract with customers-IFRS 9 Financial Instruments-IFRIC Interpretation 22 Foreign Currency Transactions and Advance Considerations-Amendments to IAS 40 Transfers of Investment Property-Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions-Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts-Amendments to IAS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice-Amendments to IFRS 1 First-time Adoption of IFRS - Deletion of short-term exemptions for first-time adopters

For the year ended 31 December 2018Notes to the Financial Statements



CAP plcRC: 4551

2.1.3 Changes in accounting policies and disclosures i Impact of application of IFRS 15 Revenue from Contracts with Customers

The company adopted IFRS 15 using the modified retrospective method of adoption with the date of initial application of 1 January 2018. Under this method, the standard can be applied either to all contracts at the date of initial application or only to contracts that are not completed at this date. The company elected to apply the standard to all contracts as at 1 January 2018.

The company applied IFRS 15 and IFRS 9 for the first time. The nature and effect of the changes as a result of adoption of these new accounting standards are described below:

Several other amendments and interpretations applied for the first time in 2018, but did have an impact on the financial statements of the company. The company has not earlier adopted any standard, interpretation or amendment that have been issued, but are not yet effective.

The cumulative effect of initially applying IFRS 15 is recognised at the date of initial application as an adjustment to the opening balance of retained earnings. Therefore, the comparative information was not restated and continues to be reported under IAS 18.

The effect of adopting IFRS 15 on the Statement of Financial Position as at January 1, 2018 was, as follows:

Notes to the Financial Statements cont’dFor the year ended 31 December 2018

AssetsRight of Return assets

Total Asset

LiabilitiesDeferred Tax LiabilitiesRefund Liabilities

Total LiabiltiesTotal Adjustment on equity:Retained earnings

Reference Increase/Decrease

1,182 1,182

(394)2,494

2,100

(918)

a

ba



CAP plcRC: 4551

Set out below, are the amounts by which each financial statement line item is affected as at and for the year ended 31 December 2018 as a result of the adoption of IFRS 15. The adoption of IFRS 15 did not have a material impact on OCI or the company's operating, investing and financing cash flows. The first column shows amounts prepared under IFRS 15 and the second column shows what the amounts would have been had IFRS 15 not been adopted:

Statement of Profit or loss and Other Comprehensive Income for the year ended 31 December 2018


Amounts prepared under

Revenue from Contracts with CustomersSale of goodsRendering of ServicesRevenueCost of SalesGross ProfitSelling and distribution expensesAdministrative expensesOther incomeNet finance incomeProfit before taxIncome tax expense Profit for the yearEarnings per share

7,758,380 6,154

7,764,534(4,034,561)

3,729,973 (356,737)

(1,149,872)61,837

312,631 2,597,832 (568,489)2,029,343

2.90

7,757,956 6,154

7,764,110 (4,034,305)

3,729,805 (356,737)

(1,149,872)61,837

312,631 2,597,664 (568,439)2,029,225

2.90

424-

424(256)

168

-

-168

50218

ImpactPrevious

IFRS

N000N000N000

IFRS 15Reference

a

a

b



CAP plcRC: 4551Notes to the Financial Statements cont’d

For the year ended 31 December 2018

Amounts prepared under

AssetsRight of return assetsTotal Assets

EquityRetained earnings Total equity LiabilitiesDeferred Tax LiabilitiesTotal non-current liabilities

Refund LiabilitiesTotal current LiabilitiesTotal LiabilitiesTotal Equity and Liabilities

9266,311,246

2,439,685 2,808,939

127,053 127,053

2,070 3,375,254 3,502,307 6,311,246

- 6,309,008

2,439,467 2,808,721

127,103 127,103

-

3,373,184 3,500,287 6,309,008

9262,238

218218

(50)(50)

2,070 2,070 2,020 2,238

Increase/(decrease)

Previous IFRSIFRS 15Reference

a

b

b

a

The nature of the adjustments as at 1 January 2018 and the reasons for the significant changes in the statement of financial position as at 31 December 2018 and the statement of profit or loss for the year ended 31 December 2018 are described below:

a) Sale of paint with variable consideration Some contracts for the sale of goods provide customers with a right of return.

Before adopting IFRS 15, the company recognised revenue from the sale of goods measured at the fair value of the consideration received or receivable, net of returns. If revenue could not be reliably measured, the Company deferred recognition of revenue until the uncertainty was resolved. Under IFRS 15, rights of return rebates give rise to variable consideration.





Rights of return Under IFRS 15, the consideration received from the customer is variable because

the contract allows the customer to return the products. The company used the probability-weighted expected value of returns to estimate the goods that will not be returned. For goods expected to be returned, the company presented a refund liability and asset for the right to recover products from a customer separately in the statement of financial position. Upon adoption of IFRS 15, the remeasurement resulted in additional refund liability of N2,494,177 and right of return assets N1,181,788 as at 1 January 2018. As a result of these adjustments, retained earnings as at 1 January 2018 decreased by N1,312,389.

As at 31 December 2018, right of return assets and refund liabilities decreased to N2,070,258 and N925,821 respectively. It also increased Revenue from contracts with customers and cost of sales by N423,919 and N255,968 respectively, for the year ended 31 December 2018.

b Other adjustments In addition to the adjustments described above, other items of the primary

financial statements such as deferred taxes and retained earnings were adjusted as necessary.

ii Impact of application of IFRS 9, Financial instruments IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition

and Measurement for annual periods beginning on or after 1 January 2018, bringing together all three aspects of accounting for financial instruments: classification and measurement; impairment; and hedge accounting.

The Company applied IFRS 9 prospectively, with an initial application date of 1 January 2018. The Company has not restated the comparative information, which continues to be reported under IAS 39. Differences arising from the adoption of IFRS 9 have been recognised directly in retained earnings and other components of equity.

The effect of adopting IFRS 9 as at 1 January 2018 was, as follows:




Assets Trade receivables Intercompany receivables Short-term deposits Total Assets Liabilities Deferred tax liabilities Total liabilities Total adjustment on equity: Retained earnings

N000

(6,260)(40)

(31,852)(38,152)

(11,446)(11,446)

(26,706)(26,706)

a,b

c

b,c

Adjustments 1 January 2018

The nature of these adjustments are described below:

a Classification and measurement Under IFRS 9, debt instruments are subsequently measured at fair value through

profit or loss, amortised cost, or fair value through OCI. The classification is based on two criteria: the company's business model for managing the assets; and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' or the principal amount outstanding.

The assessment of the company's business model was made as of the date of initial application, 1 January 2018. The assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was made based on the facts and circumstances as at the initial recognition of the assets.

The classification and measurement requirements of IFRS 9 did not have a significant impact to the company. The following are the changes in the classification of the company's financial assets.

Trade and other receivables, cash and short-term deposits classified as Loans and receivables as at 31 December 2017 are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest. These are classified and measured as Debt instruments at amortised cost beginning 1 January 2018.

The company has not designated any financial liabilities as at fair value through profit or loss. There are no changes in classification and measurement for the company's financial liabilities.






In summary, upon adoption of IFRS 9, the company had the following required or elected reclassifications as at 1 January 2018.

b Impairment of Financial assets The adoption of IFRS 9 has fundamentally changed the company's accounting for

impairment losses for financial assets by replacing IAS 39's incurred loss approach with a forward-looking Expected Credit Loss (ECL) approach. IFRS 9 requires the Company to recognise an allowance for ECLs for all debt instruments not held at fair value through profit or loss and contract assets.

Upon adoption of IFRS 9 the company recognised additional impairment on its trade receivables, intercompany receivables and short-term deposits, amounting to N6 million, N40,000 and N31 million respectively, which resulted in a decrease in retained earnings of N38 million as at 1 January 2018.

*The change in the carrying amount is as a result of additional impairment allowance.

IFRS 9 Measurement Category

IAS 39 Measurement CategoryLoans and RecievablesTrade and other recievables*Cash and short-term deposits

-

-

110,700

2,820,459

-

-

104,400

2,788,607

Amortized cost

Fair Value through

OCI

Fair Value through

Profit/ Loss

N000 N000 N000 N000





C Other adjustments In addition to the adjustments described above, other items such as deferred

taxes were adjusted to retained earnings as necessary upon adoption of IFRS 9 as at 1 January 2018.

Set out below is the reconciliation of the year end closing impairment allowances as at 31st December in accordance with IAS 39 to the opening loss allowances as determined in accordance with IFRS 9:

IFRS 9 Measurement Category

Loans and receivables under IAS 39/Financial assets at amortised cost under IFRS 9 and contract assets Trade receivablesIntercompany receivablesShort-term deposits

19,643 6,690

-26,333

6,260 40

31,852 38,152

25,903 6,730

31,852 64,485

ECL under IFRS 9 as at 1

January 2018Remeasur

ement

Allowance for impairment

under IAS 39 as at 31 December

2017

N000 N000 N000

Retained earningsClosing balance under IAS 39 (31 December 2017)Recognition of IFRS 9 ECLsDeferred tax in relation to the aboveOpening balance under IFRS 9 (1 January 2018) Total change in equity due to adopting IFRS 9

1,872,966 (38,152)

11,446 1,846,260

(26,706)



CAP plcRC: 4551

Impact of new standards, amendments and interpretations Standard issued not yet effective

IFRS 17 Insurance Contracts In May 2017, the IASB issued IFRS 17 Insurance Contracts, a comprehensive new

accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, IFRS 17, will replace IFRS 4 issued in 2005. IFRS 17 applies to all types of insurance contracts (i.e., Life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as certain guarantees and financial instruments with discretionary participation features.

A few scope exceptions will apply. The overall objective of IFRS 17 is to provide an accounting model for insurance contracts that is more useful and consistent for insurers. In contrast to the requirements in IFRS 4, IFRS 17 provides comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of IFRS 17 is the general model, supplemented by:

Ÿ A specific adaptation for contracts with direct participation features (the variable fee approach)

Ÿ A simplified approach (the premium allocation approach) mainly for short- duration contracts

IFRS 17 is effective for reporting periods beginning on or after 1 January 2021, with comparative figures required. Early application is permitted, provided the entity also applies IFRS 9 and IFRS 15 on or before the date it first applies IFRS 17. This standard is not applicable to the CAP Plc.

IFRIC Interpretation 23 Uncertainty over Income Tax Treatment The Interpretation addresses the accounting for income taxes when tax

treatments involve uncertainty that affects the application of IAS 12 and does not apply to taxes or levies outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.




CAP plcRC: 4551

The Interpretation specifically addresses the following: Ÿ Whether an entity considers uncertain tax treatments separately Ÿ The assumptions that an entity makes about the treatments by taxation

authorities Ÿ How an entity determines taxable profit (tax loss), tax bases, unused tax

losses, unused tax credits and tax rates Ÿ How an entity considers changes in facts and circumstances


An entity has to determine whether to consider each uncertain tax treatment separately or together. The approach that better predicts the resolution of the uncertainty should be followed. The interpretation is effective for annual reporting periods beginning on or after 1 January 2019, but certain transition reliefs are available. The Company will apply the interpretation from its effective date. In addition, the Company may need to establish processes and procedures to obtain information that is necessary to apply the Interpretation on a timely basis.

Amendments to IFRS 9: Prepayment Features with Negative Compensation Under IFRS 9, a debt instrument can be measured at amortised cost or at fair value

through other comprehensive income, provided that the contractual cash flows are 'solely payments of principal and interest on the principal amount outstanding' (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to IFRS 9 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract.

The amendments should be applied retrospectively and are effective from 1 January 2019, with earlier application permitted. These amendments have no impact on the financial statements of the Company.



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Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The amendments address the conflict between IFRS 10 and IAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments clarify that the gain or loss resulting from the sale or contribution of assets that constitute a business, as defined in IFRS 3, between an investor and its associate or joint venture, is recognised in full. Any gain or loss resulting from the sale or contribution of assets that do not constitute a business, however, is recognised only to the extent of unrelated investors' interests in the associate or joint venture. The IASB has deferred the effective date of these amendments indefinitely, but an entity that early adopts the amendments must apply them prospectively. The standard does not impact on the financial statement of the company.

Amendments to IAS 19: Plan Amendment, Curtailment or Settlement The amendments to IAS 19 addresses as the accounting of a plan amendment,

curtailment or settlement that occur during a reporting period. The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to:

Ÿ Determine current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event

Ÿ Determine net interest for the remainder of the period after the plan amendment, curtailment or settlement using: the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event; and the discount rate used to remeasure that net defined benefit liability (asset).

The amendments also clarify that an entity first determines any past service cost, or a gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognised in profit or loss.

An entity then determines the effect of the asset ceiling after the plan amendment, curtailment or settlement

Any change in that effect, excluding amounts included in the net interest, is recognised in other comprehensive income.

The amendments apply to plan amendments, curtailments, or settlements occurring on or after the beginning of the first annual reporting period that begins on or after 1 January 2019, with early application permitted. These amendments will apply only to any future plan amendments, curtailments, or settlements of the Company.




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Amendments to IAS 28: Long-term interests in associates and joint ventures The amendments clarify that an entity applies IFRS 9 to long-term interests in an

associate or joint venture to which the equity method is not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests). This clarification is relevant because it implies that the expected credit loss model in IFRS 9 applies to such long-term interests.

The amendments also clarified that, in applying IFRS 9, an entity does not take account of any losses of the associate or joint venture, or any impairment losses on the net investment, recognised as adjustments to the net investment in the associate or joint venture that arise from applying IAS 28 Investments in Associates and Joint Ventures.

The amendments should be applied prospectively and are effective from 1

January 2019, with early application permitted. Since the Company does not have such long-term interests in its associate and joint venture, the amendments will not have an impact on its financial statements.

(b) Annual Improvements 2015-2017 Cycle

These improvements include:

IFRS 3 Business Combinations The amendments clarify that, when an entity obtains control of a business that is

a joint operation, it applies the requirements for a business combination achieved in stages, including remeasuring previously held interests in the assets and liabilities of the joint operation at fair value. In doing so, the acquirer remeasures its entire previously held interest in the joint operation. An entity applies those amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2019, with early application permitted. These amendments will apply on future business combinations of the Company.

IFRS 11 Joint Arrangements A party that participates in, but does not have joint control of, a joint operation

might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business as defined in IFRS 3.

.




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The amendments clarify that the previously held interests in that joint operation are not remeasured. An entity applies those amendments to transactions in which it obtains joint control on or after the beginning of the first annual reporting period beginning on or after 1 January 2019, with early application permitted. These amendments are currently not applicable to the Company but may apply to future transactions.

IAS 12 Income Taxes The amendments clarify that the income tax consequences of dividends are

linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

An entity applies those amendments for annual reporting periods beginning on or after 1 January 2019, with early application is permitted. When an entity first applies those amendments, it applies them to the income tax consequences of dividends recognised on or after the beginning of the earliest comparative period. The company will review its effect on its financial statements when it becomes effective.

IAS 23 Borrowing Costs The amendments clarify that an entity treats as part of general borrowings any

borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete. An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after 1 January 2019, with early application permitted. Since the Company's current practice is in line with these amendments, the Company does not expect any effect on its financial statements.

The following amendments that are issued but not yet effective would not have impact on the company

-Definition of a Business - Amendment to IFRS 3 - I Jan 2020 -Definition of Material - Amendment to IAS 1 and IAS 8 - I Jan 2020 -Amendment to The Conceptual Framework for Financial Reporting - 1 Jan 2020

For the year ended 31 December 2018Notes to the Financial Statements cont’d



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IFRS 16 Leases IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4

Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. The standard includes two recognition exemptions for lessees – leases of 'low-value' assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. Lessor accounting under IFRS 16 is substantially unchanged from today's accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard's transition provisions permit certain reliefs. In 2017, the Company plans to assess the potential effect of IFRS 16 on its consolidated financial statements.

2.2 Segment reporting

Segment information is reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Directors that make strategic decisions. A segment is a distinguishable component of the company that is engaged either in providing related products or within a particular service or in providing products or services in an economic (geographical) segment that is subject to risks and returns that are different from those of other segments.




CAP plcRC: 4551

2.3 Foreign currency translation

(a) Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in Naira (N), which is the company's functional currency.

(b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of profit or loss and other comprehensive income within 'finance income or cost'.

(c) Foreign currency policy Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

2.4 Property, plant and equipment

Land and buildings held for use in the production or supply of goods or services, or for administration purposes, are stated at cost less any accumulated impairment losses (for land and buldings) and accumulated depreciation (for buildings). All other property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Costs include expenditure that is directly attributable to the acquisition of the items. Land and building comprise mainly of factories and offices.




CAP plcRC: 4551

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost can be measured reliably. The carrying amount of the replaced cost is derecognised. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred.

Land is not depreciated. Leasehold properties are depreciated over their useful lives, unless the lease period is shorter, in which case the lease period is used. Depreciation on other classes of property, plant and equipment is calculated using the straight line method to allocate their cost to their residual values over their estimated useful lives, as follows:


Building on leasehold land Shorter of useful life and lease terms (44 to 99 years) Plant and machinery 3 to 43 years Furniture and fittings 3 to 6 years Tinting equipment 4 years Motor vehicles 4 to 6 years

The assets' residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting date.

2.5 Imparment of non-current assets

Where an indication of impairment exists, an asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than it's estimated recoverable amount (refer to impairment Note 2.6 for further details)

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the profit or loss for the period.



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2.6 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any

accumulated amortization and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in the statement profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss and other comprehensive income in the expense category that is consistent with the function of the intangible assets.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss and other comprehensive income when the asset is derecognised.

Computer software Costs associated with maintaining computer software programmes are

recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the company are recognised as intangible assets when the following criteria are met:




CAP plcRC: 4551

- it is technically feasible to complete the software product so that it will be available for use; - the directors intend to complete the software product and use it; - there is an ability to use or sell the software product; - it can be demonstrated how the software product will generate probable future economic benefits; - adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and - the expenditure attributable to the software product during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Computer software development costs recognised as assets are amortised over their estimated useful lives, which does not exceed five years.

2.7 Impairment of non-financial assets

Assets that are subject to depreciation and amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use.The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.




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2.8 Financial assets - IAS 39

2.8.1 Initial recognition and measurement (Under IFRS 9)

All financial assets are recognised initially at fair value plus in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Regular purchases and sales of financial assets are recognised on the trade date –

the date on which the company commits to purchase or sell the asset.

2.8.2 Subsequent measurement

(i) Loans and receivablesThis category is the most relevant to the company. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss nd other comprehensive income. The losses arising from impairment are recognised in the profit or loss in finance costs for loan and in th other operating expenses for receivables.The company's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the statement of financial position (Notes 17a and 19).

Derecognition A financial asset (or, where applicable, a part of a financial asset or part of

similar financial assets) is primarily derecognised (i.e., removed from the company's statement of financial position) when: The rights to receive cash flows from the asset have expired or the company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without materials delay under a 'pass through' arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the transferred asset to the extent of its continuing involvement.




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Impairment of financial assets The company assesses, at each reporting date, whether there is objective

evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset, has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial re-organisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets carried at amortised cost For financial assets carried at amortised cost, the Company first assesses

whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.The amount of any impairment loss identified is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred).

The present value of the estimated future cash flows is discounted at the financial asset's original EIR. The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in the statement of profit or loss and other comprehensive income. Interest income (recorded as finance income in the statement of profit or loss and other comprehensive income) continues to be accrued on the reduced carrying amount using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.




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Obective evidence that financial assets are impaired includes: - significant financial difficulty of the issuer or obligor; - a breach of contract, such as a default or delinquency in interest or principal payments; - the company, for economic or legal reasons relating to the borrower's financial difficulty, granting to the borrower a concession that the lender would not otherwise consider; - it becomes probable that the borrower will enter bankruptcy or other financial reorganisation; - the disappearance of an active market for that financial asset because of financial difficulties; or - observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including:

(i) adverse changes in the payment status of borrowers in the portfolio; and (ii) national or local economic conditions that correlate with defaults on the

assets in the portfolio.

2.8. Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

2.8.4 Trade receivables-IAS 39

Trade receivables are amounts due from customers for goods sold in the ordinary course of business.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.




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2.8.5 Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction cost.

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

2.8.6 Loans and borrowings

This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other comprehensive income. For more information, refer to Note 20.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss and other comprehensive income.




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2.8.7 Financial Instruments-intial recognition and subsequent measurement under IFRS 9

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Financial Assets Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial

asset's contractual cash flow characteristics and the Company's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under IFRS 15. Refer to the accounting policies in Revenue from contracts with customers above.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.




CAP plcRC: 4551Notes to the financial statements cont’d

For the year ended 31 December 2016For the year ended 31 December 2018Notes to the Financial Statements cont’d

Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified into 1 category:

Ÿ Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Company. The Company measures financial assets at amortised cost if both of the following conditions are met:

Ÿ The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; andŸ The contractual terms of the financial asset give rise on specified dates to

cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

The Company's financial assets at amortised cost includes trade receivables, other receivables, loans, cash and cash equivalents and related parties receivables.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Company's statement of financial position) when:

Ÿ The rights to receive cash flows from the asset have expired Or Ÿ The Company has transferred its rights to receive cash flows from the asset or

has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership.





When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

Further disclosures relating to impairment of financial assets are also provided in the note below:

Ÿ Trade receivables Note 17a The Company recognises an allowance for expected credit losses (ECLs) for

all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment using the loss rate model.





The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company.

A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

ii) Financial Liabilities

Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair

value through statement of profit or loss and other comprehensive income, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans

and borrowings and payables, net of directly attributable transaction costsThe Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.

Subsequent measurement The measurement of financial liabilities depends on their classification, as

described below:

Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities

held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Company has not designated any financial liability as at fair value through profit or loss.

For receivables to related parties (non-trade), other receivables and short-term deposits, the Company applies general approach in calculating ECLs. It is the Company's policy to measure ECLs on such asset on a 12-month basis. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.



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Loans and borrowings

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss. This category generally applies to interest-bearing loans and borrowings.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss and other comprehensive income.

iii) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.8.8 Government grant

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the costs, which it is intended to compensate, are expensed. Where the grant relates to an asset, it is recognised as deferred income in equal amounts over the expected useful life of the related asset.






When the Company receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset by equal annual instalments. When loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as a government grant.

The company's government grant is presented in the statement of financial position by setting up a deferred income named government grant. This is a Bank of industry loan grant as a result of reduction in interest rate which is below effective interest rate. (No unfulfilled conditions exist in respect of the grant).

After initial recognition, the government grant is recognized as income in profit or loss on a systematic basis over the life of the loan.

2.9 Inventories

Inventories are stated at the lower of cost and estimated net realisable value. Cost is calculated based on the actual cost that comprises cost of direct materials and where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

2.10 Cash and cash equivalents

Cash and cash equivalents includes cash at bank and in hand plus short-term deposits. Short-term deposits have a maturity of less than three months from the date of acquisition, are readily convertible to cash and are subject to an insignificant risk of change in value.

2.11 Share capital

Ordinary shares are classified as equity.

2.12 Current and deferred income tax

The tax for the year comprises current (company income tax and education tax) and deferred tax. Tax is recognised in the profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is recognised in other comprehensive income or directly in equity, respectively.



CAP plcRC: 4551

The tax payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax is charged or credited to the profit or loss, except when it relates to items charged or credited to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company intends to settle its tax liabilities on a net basis.

2.13 Employee benefits

The company operates a defined contribution plan. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. The company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.






(a) Defined contribution schemes i) Statutory contributions (Note 8): The Pensions Reform Act of 2014 requires all

companies to pay a minimum of 10% of employees monthly emoluments to a pension fund on behalf of all full time employees.

ii) Voluntary contributions (Note 8): The company also contributes on an annual basis a fixed percentage of the employees salary to a fund managed by a fund administrator. The funds are invested on behalf of the employees and they will receive a payout based on the return of the fund upon retirement.

The contributions are recognised as employee benefit expenses when they are due. The company has no further payment obligation once the contributions have been paid. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is available.

(b) Productivity incentive and bonus plans All full time staff are eligible to participate in the productivity incentive scheme.

The company recognises a liability and an expense for bonuses and productivity incentive, based on a formula that takes into consideration the profit attributable to the company's shareholders after certain adjustments. The company recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

2.14 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, rebates and sales related taxes. Revenue is recognised when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity.

(i) Sale of goods Revenue arises from the sale of paints and other decoratives and is recognised

when the risks and rewards associated with ownership are transferred to the buyer. Due to the short term nature of these transactions no significant judgements are required.

(ii) Interest Income Interest income is recognised using the effective interest method. (iii) Rendering of services Revenue arises from the use of assets and provision of technical support to the

agents.

Revenue is recognized when services are rendered



CAP plcRC: 4551

2.14 Revenue From Contracts with Customers (IFRS 15)

The Company is involved in the manufacturing and sale of paint. Revenue from contracts with customers is recognised when control of the goods

or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.

The Company has applied IFRS 15 practical expedient to a portfolio of contracts (or performance obligations) with similar characteristics since the Company reasonably expect that the accounting result will not be materially different from the result of applying the standard to the individual contracts. The Company has been able to take a reasonable approach to determine the portfolios that would be representative of its types of customers and business lines. This has been used to categorise the different revenue stream detailed below.

Sale of Paints The Company manufactures and sells paint and other decoratives. Revenue are

recognised at the point in time when control of the asset is transferred to the customer, generally on delivery of the products. The normal credit term is 30 to 60 days upon delivery.Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

The paint is often sold with volume rebates based on aggregate sales over a three months period. Revenue from these sales is recognised based on the price specified in the contract, net of the estimated volume rebates.The Company normally transfer the products to the customers premises as part of the sales incentive which is a logistics discount. The logistic discount which is the transport cost paid on behalf of the customer is recognised as a reduction to revenue for the related goods.The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated (if any). In determining the transaction price for the sale of paint, the Company considers the existence of significant financing components and consideration payable to the customer (if any).






i) Variable ConsiderationIf the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Some contracts for the sale of paint and other decorative provide customers with a right of return and usage based fees (management fee). The rights of return and usage based fees give rise to variable consideration.

Rights of return Certain contracts provide a customer with a right to return the goods within a

specified period. The Company uses the expected value method to estimate the goods that will not be returned because this method best predicts the amount of variable consideration to which the Company will be entitled. The requirements in IFRS 15 on constraining estimates of variable consideration are also applied in order to determine the amount of variable consideration that can be included in the transaction price. For goods that are expected to be returned, instead of revenue, the Company recognises a refund liability. A right of return asset (and corresponding adjustment to cost of sales) is also recognised for the right to recover products from a customer.

Customer Usage The Company has contracts where support staffs are located in the colour

centres/shops that belongs to its numerous customers. The fee charged is based on a constant rate on sales made by the customer. The total transaction price of service cost rendered by Company would be variable since the contracts have range of possible transaction prices arising from different volume purchased even though the rate per unit/band is fixed. The Company estimates the variable consideration using the expected value (i.e.., a probability weighted amount) because this method best predicts the amount of consideration.

ii) Significant financing component Using the practical expedient in IFRS 15, the Company does not adjust the

promised amount of consideration for the effects of a significant financing component since it expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.



CAP plcRC: 4551

Application of paint The Company provides service of application of paints to its customers.Such

services are recognised as a performance obligation satisfied over time. Revenue is recognised by measuring progress using the input method that is labour hours.

Using the practical expedient in IFRS 15 for the application of paint, the Company has elect to recognise revenue based on the amount invoiced to the customer since the Company has a right to consideration from its customer in an amount that corresponds directly with the value to the customer of the Company's performance completed to date.

Contract Balances

Trade Recievables A receivable represents the Company's right to an amount of consideration

that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Assets and liabilities arising from rights of return

Right of return assets Right of return asset represents the Company's right to recover the goods

expected to be returned by customers. The asset is measured at the former carrying amount of the inventory, less any expected costs to recover the goods, including any potential decreases in the value of the returned goods. The Company updates the measurement of the asset recorded for any revisions to its expected level of returns, as well as any additional decreases in the value of the returned products.

Refund Liabilities A refund liability is the obligation to refund some or all of the consideration

received (or receivable) from the customer and is measured at the amount the Company ultimately expects it will have to return to the customer. The Company updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period. Refer to above accounting policy on variable consideration






Cost to obtain a contract The Company pays sales commission to its employees for each contract that

they obtain for sales of paint. The Company has elected to apply the optional practical expedient for costs to obtain a contract which allows the Company to immediately expense sales commissions (included under employee benefits and part of selling and distribution) because the amortisation period of the asset that the Company otherwise would have used is one year or less.

2.15 Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

A lease is classified at the inception date of a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the company is classified as a finance lease.

Finance lease Leases that transfer substantially all the risks and rewards incidental to ownership

of an asset to another party, the lessee, are classified as finance leases. Title may or may not eventually be transferred. Where the company is the lessor, assets subject to finance leases are initially reported as receivables at an amount equal to the net investment in the lease. Lease income from finance lease is subsequently recognised as earned income over the term of the lease based on the effective interest rate method.

Operating lease payments are recognised as an operating expense in the statement of profit or loss and other comprehensive income on a straight-line basis over the lease term.

Company as a lessor Leases in which the company does not transfer substantially all the risks and

ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contigent rents are recognised as revenue in the period in which they are earned.

2.16 Fair value measurement

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.



CAP plcRC: 4551

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

(a) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

(b) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

(c) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value

measurement is unobservable:

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

2.17 Dividend distribution

Dividend distribution to the company's shareholders is recognised as a liability in the company's financial statements in the period in which the dividends are approved by the company's shareholders. In respect of interim dividends these are recognised once declared by the board of directors.

Dividend not claimed for over a period of 15 months are refunded back to the company and are treated as a liability in the company's financial statements.






2.18 Risk management

The board through the Risk and Governance Committee has the responsibility for developing and implementing an enterprise - wide risk management framework for identifying, measuring, monitoring and controlling risks in the company. The executive management ensures the implementation of controls put in place to mitigate the various identified risks and report updates of status to the Board quarterly.

3. Financial risk management

3.1 Financial risk factors

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 performance.

(a) Market risk (i) Foreign exchange risk The company is exposed to foreign exchange risk arising from various currency

exposures, primarily with respect to the US dollar as a result of importing key raw materials. Foreign exchange risk arises from future commercial transactions. There are limited exposures to recognised assets and liabilities.

The company manages its risk in the following ways: Scenario planning, information sharing within the group,In-plant tinting,local production of dulux trade bases,effective working capital management and planning, export drive,insurance, participation in MAN,NECA activities to influence government policies.

The company does not make use of derivatives to hedge its exposures. Letters of credit are issued by the company to the foreign suppliers for the purchase of materials.The Company does not hedge but buys from the official market to mitigate the difference between the official and parallel markets.



CAP plcRC: 4551

(ii) Price risk The company is not exposed to equity securities price risk and commodity

price risk. The company had no equity securities as at 31 December 2018 and 31 December 2017.

(iii) Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The company is not exposed to the risk of changes in market interest rates because the loans and borrowings are fixed rate.


The company's foreign exchange risk is as follows:

NairaUSDGBP Total cash and short term deposits

2018 2017

N000N000Cash and short term deposits:2,780,823

39,369 267

2,820,459

4,151,457 146,074

41,763 4,339,294

If the Naira was to decrease by 1% against the foreign currencies the impact on profit would be as follows (and vice versa for a 1% increase)

2018 2017

N000N000

- -

USDGBP

1,461 418

3943





(b) Credit risk

Credit risk is monitored and managed in the company by the Finance Controller. The company is responsible for managing and analysing the credit risk for each of her new clients before standard payment and delivery terms and conditions are offered. 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, the company utilises the institutions that have sufficient reputational risk but do not strictly monitor their formal ratings . In addition the company monitors its exposures with individual institutions and has internal limits to control maximum exposures. Credit terms are set with customers based on past experiences, payment history and reputations of the customers. Sales to retail customers are settled in cash, while only agents and corporate customers are given credits based on limits set by the board, typically 30 days.

No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties.

Impairment losses Trade Receivables For trade receivables, the company applied the simplified approach in computing

ECL. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses (ECL). The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, customer type and rating, and coverage by letters of credit). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Generally, trade receivables are written-off if past due for more than one year and are not subject to enforcement activity. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 17. The company does not hold collateral as security.



CAP plcRC: 4551

Set out below is the information about the credit risk exposure on the Company's trade receivables as at 31 December 2018 using a provision matrix:

Expected credit loss measurement - other financial assets

The company applied the general approach in computing expected credit losses (ECL) for intercompany receivables and short-term deposits. The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).


Trade receivablesDays past due

31 December 2018

In thousands of nairaExpected credit loss rateEstimated total gross carrying amount at defaultExpected credit loss

100.00%

19,609 19,609

-

123,393 34,419

Total>365 days100.00%

- -

100.00%

- -

16.17%

14,885 2,407

13.95%

88,899 12,403

181-365 days

91-180 days1-90 daysCurrent

Trade receivablesDays past due

31 January 2018

In thousands of nairaExpected credit loss rateEstimated total gross carrying amount at defaultExpected credit loss

100%

19,609 19,609

68,46225,903

Total>365 days100%

-

100%

1,438 1,438

13%

263 34

10%

47,152 4,822

181-365 days

91-180 days1-90 daysCurrent





The ECL is determined by projecting the PD, LGD and EAD for each future month and for each individual exposure. These three components are multiplied together and adjusted for the likelihood of survival (i.e. the exposure has not prepaid or defaulted in an earlier month). This effectively calculates an ECL for each future month, which is then discounted back to the reporting date and summed. The discount rate used in the ECL calculation is the original effective interest rate or an approximation thereof.

The 12-month and Lifetime PDs are derived by mapping the internal rating grade of the obligors to the PD term structure of an external rating agency for all asset classes. The 12-month and lifetime EADs are determined based on the expected payment profile, which varies by product type. The assumptions underlying the ECL calculation – such as how the maturity profile of the PDs, etc. – are monitored and reviewed on a regular basis. There have been no significant changes in estimation techniques or significant assumptions made during the reporting period. The significant changes in the balances of the other financial assets including information about their impairment allowance are disclosed below respectively.

The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Analysis of inputs to the ECL model under multiple economic scenarios

An overview of the approach to estimating ECLs is set out in Note 3.b(ii) Summary of significant accounting policies and in Note 4 Significant accounting judgements, estimates and assumptions. To ensure completeness and accuracy, the Company obtains the data used from third party sources (Central Bank of Nigeria, Standards and Poor's etc.) and a team of expert within its credit risk department verifies the accuracy of inputs to the Company's ECL models including determining the weights attributable to the multiple scenarios. The following tables set out the key drivers of expected loss and the assumptions used for the Company's base case estimate, ECLs based on the base case, plus the effect of the use of multiple economic scenarios as at 1 January 2018 and 31 December 2018.

The tables show the values of the key forward looking economic variables/assumptions used in each of the economic scenarios for the ECL calculations. The figures for “Subsequent years” represent a long-term average and so are the same for each scenario.





31 December, 2018

Key drivers GDP growth

Oil Price %

Exchange rate %

Inflation rate %

Assigned probabilitie

s

10%80%10%

10%80%10%

10%80%10%

10%80%10%

ECL scenario

UpturnBase

Downturn

UpturnBase

Downturn

UpturnBase

Downturn

UpturnBase

Downturn

2019

0.260.200.14

56.0055.0044.00

180.00199.50204.75

26.0031.0034.00

2020

0.2919.00

0.11

59.0057.0041.00

175.00209.48214.99

24.0032.0036.00

2021

0.320.150.08

62.0062.0038.00

170.00219.95225.74

22.0033.0038.00

2022

0.350.160.05

65.0054.0035.00

165.00230.95237.02

20.0034.0040.00

Subsequent years

0.410.15

-0.01

71.0057.0029.00

155.00254.62261.32

16.0036.0044.00

2023

0.380.140.02

68.0056.0032.00

160.00242.49248.87

18.0035.0042.00

1 January, 2018

Key drivers GDP growth

Oil Price %

Exchange rate %

Inflation rate %

Assigned probabilities

11%79%10%

11%79%10%

11%79%10%

11%79%10%

ECL scenario

UpturnBase

Downturn

UpturnBase

Downturn

UpturnBase

Downturn

UpturnBase

Downturn

2018

0.230.200.17

53.0050.0047.00

185.00190.00195.00

28.0030.0032.00

2019

0.260.200.14

56.0055.0044.00

180.00199.50204.75

26.0031.0034.00

2020

0.2919.00

0.11

59.0057.0041.00

175.00209.48214.99

24.0032.0036.00

2021

0.320.150.08

62.0062.0038.00

170.00219.95225.74

22.0033.0038.00

Subsequent years

0.380.140.02

68.0056.0032.00

160.00242.50248.88

18.0035.0042.00

2022

0.350.160.05

65.0054.0035.00

165.00230.95237.03

20.0034.0040.00





Short-term depositsAn analysis of changes in the gross carrying amount and the corresponding ECL allowances is, as follows:

The following tables outline the impact of multiple scenarios on the allowance:

Short-term deposit

Other receivables31 December 2018

Intercompany receivables

Upside (10%)Base (80%)Downside (10%)Total

2,265 18,119

2,265 22,649

4,310 34,476

4,310 43,096

6255,003

6256,253

7,200 57,598

7,200 71,998

Total

Short-term deposits

Other receivables1 January 2018

Intercompany receivables

Upside (11%)Base (79%)Downside (10%)Total

2,408 17,294

2,189 21,891

3,504 25,163

3,185 31,852

7405,317

6736,730

4,244 30,480

3,858 38,582

Total

Stage 2Stage 1 Stage 3

In thousands of nairaGross carrying amount as at 1 January 2018New asset purchasedAsset derecognised or repaid (excluding write offs)At 31 December 2018

2,741,170 4,185,456

(2,741,170)4,185,456

2,741,170 4,185,456

(2,741,170)4,185,456

--

--

--

--

Total


In thousands of nairaECL allowance as at 1 January 2018New asset purchasedAsset derecognised or repaid (excluding write offs)At 31 December 2018

31,852 43,096

(31,852)

43,096

31,852 43,096

(31,852)

43,096

--

--

--

--

Total





Other receivablesAn analysis of changes in the gross carrying amount and the corresponding ECL allowances is, as follows:

Intercompany recivablesAn analysis of changes in the gross carrying amount and the corresponding ECL allowances is, as follows:



47,191 26,679

-

73,870

47,191 26,679

-

73,870

--

--

--

--

Total



6,999 7,246

-

14,245

6,999 7,246

-

14,245

--

--

--

--

Total



21,891 758

- 22,649

21,891 758

- 22,649

--

--

--

--

Total







6,690 -

(437)6,253

6,690 -

(437)6,253

--

--

--

--

Total

Finance lease receivableTrade receivablesReceivable from related partiesOther receivablesAdvances to staffCash and bank balancesShort term deposits

10,377 123,393

14,245 73,870

118196,933

4,185,456 4,604,392

10,379 88,974

7,992 51,221

118196,933

4,142,361 4,497,978

--------

-34,419

6,253 22,649

- -

43,095 106,416

N000N000 N000N000

TotalFully

performing

Past due but not

Impaired Impaired

31 December 2018

Finance lease receivableTrade receivablesReceivable from related partiesOther receivablesAdvances to staffCash and bank balancesShort term deposits

10,379 68,152

6,999 47,191

34479,289

2,741,170 2,953,524

10,379 48,509

30925,300

34479,289

2,741,170 2,905,300

--------

-19,643

6,690 21,891

---

48,224

N000N000 N000N000

Total gross amount

Fully performing

Past due but not

Impaired Impaired

31 December 2017





Reconciliation of the provision for impairment:

Other receivablesAt 1 JanuaryAdditional impairment charge for the yearAt 31 December

21,891 758

22,649

20,686 1,205

21,891

N000

2017

N000

2018

(c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

Cash flow forecasting is performed in the company and rolling forecasts of the company's liquidity requirements is monitored to ensure it has sufficient cash to meet operational needs at all times. In addition, the company obtained letter of credits as a cover for it's foreign suppliers.

The group is finalising newpolicies on cash reserves and liquidity.

Reconciliation of the provision for impairment:

Trade receivablesAt 1 JanuaryAdjustment upon application of IFRS 9Balance as at 1 January 2018 /1 January 2017– As restatedProvision for expected credit lossWrite off during the yearAt 31 December

19,643 6,260

25,903 14,810 (6,294) 34,419

20,938 -

20,938 34

(1,330)19,643

N000

2017

N000

2018





Surplus cash held by the company over and above balance required for working capital management are invested in interest bearing current accounts, time deposits, money market deposits. At the reporting date, the company held money market funds of N4,142,360,619.51 (2017: N2,741,169,579.57) that are expected to readily generate cash inflows for managing liquidity risk.

The table below analyses the company's financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

3.2 Capital risk management

The company's objectives when managing capital are to safeguard the company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

At 31 December 2018

Trade payables

At 31 December 2017

BorrowingTrade payables

Less than 3 months

344,147 344,147

Less than 3 months

N00020,000

219,896 239,896

Between 3 months

and 1 year

Between 3 months

and 1 yearN000

59,115 -

59,115

Between 1 and 5 years

--

Between 1 and 5 yearsN000

---

Over 5 years

--

Over 5 years

N000---

N000N000 N000N000



CAP plcRC: 4551

The company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total equity. Net debt is calculated as total borrowings (including 'current and non-current borrowings' as shown in the Statement of financial position). Total equity is calculated as 'equity' as shown in the statement of financial position.


4. Significant judgements and estimates

4.1 Significant estimates

The preparation of financial statement in conformity with IFRS requires the use of certain critical accounting estimates. In the process of applying the Company's accounting policies, management has exercised judgment and estimates in determining the amounts recognised in the financial statements. Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed. The areas where judgment and estimates are significant to the financial statements are as follows:

Property, Plant and Equipment/Intangible Assets Estimates are made in determining the depreciation/amortisation rates and

useful lives of these property, plant and equipment. These financial statements have, in the management's opinion been properly prepared within reasonable limits of materiality and within the framework of the summarised significant accounting policies.(refer to Note 2.4 for further details).

The amortisation period/useful lives of intangible assets also require management estimation.

Trade and other payablesBorrowingLess:cash and cash equivalentsNet cash and cash equivalents

EquityTotal EquityCapital and DebtGearing ratioThe company is a low geared company.

1,559,016 -

(4,339,294)(2,780,278)

2,808,939 2,808,939

56%

1,130,834 79,115

(2,820,459)(1,610,510)

2,242,220 2,242,220

50%

N000

2017

N000

2018





Provision for expected credit losses of trade receivables The Company uses a provision matrix to calculate ECLs for trade receivables. The

provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating).

The provision matrix is initially based on the Company's historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company's historical credit loss experience and forecast of economic conditions may also not be representative of customer's actual default in the future. The information about the ECLs on the Company's trade receivablesis disclosed in Note 3(b).

Impairment losses on other financial assets The Company's ECL calculations are outputs of complex models with a number of

underlying assumptions regarding the choice of variable inputs and their interdependencies. Elements of the ECL models that are considered accounting judgements and estimates include:

Ÿ The segmentation of financial assets when their ECL is assessed on a collective basis

Ÿ Development of ECL models, including the various formulas and the choice of inputsDetermination of associations between macroeconomic scenarios and, economic inputs, such as unemployment levels, inflation rate and GDP, and the effect on PDs, EADs and LGDs

Ÿ Selection of forward-looking macroeconomic scenarios and their probability weightings, to derive the economic inputs into the ECL models

4.2 Significant judgements

Revenue from Contracts with Customers The company applied the following judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers:



CAP plcRC: 4551

Determining the timing of satisfaction of application paints

The company concluded that revenue for installation services is to be recognised over time because the customer simultaneously receives and consumes the benefits provided by the company. The fact that another entity would not need to re-perform the service that the company has provided to date demonstrates that the customer simultaneously receives and consumes the benefits of the company's performance as it performs.

The company determined that the input method is the best method in measuring progress of the application of paint services because there is a direct relationship between the company's effort (i.e., labour hours incurred) and the transfer of service to the customer. The company recognises revenue on the basis of the labour hours expended relative to the total expected labour hours to complete the service.

Determining the timing of satisfaction of sales of paint The company concluded that revenue for sales of product is to be recognised as a

point in time; when the customer obtains control of the paint. The company assess when control is transferred using the indicators below:

Ÿ The company has a present right to payment for the product;Ÿ The customer has legal title to the product;Ÿ The company has transferred physical possession of the asset and delivery

note received;Ÿ The customer has the significant risks and rewards of ownership of the

product; andŸ The customer has accepted the asset

Estimating variable consideration for returns and volume rebates The company estimates variable considerations to be included in the transaction price for the sale of paints with rights of return and volume rebates.

The company developed a statistical model for forecasting sales returns. The model used the historical return data of each product to come up with expected return percentages. These percentages are applied to determine the expected value of the variable consideration. Any significant changes in experience as compared to historical return pattern will impact the expected return percentages estimated by the company.

The company updates its assessment of expected returns monthly and the refund liabilities are adjusted accordingly. Estimates of expected returns are sensitive to changes in circumstances and the company's past experience regarding returns may not be representative of customers' actual returns and rebate entitlements in the future.






5. Segment Analysis

The chief operating decision-maker has been identified as the executive directors. The executive directors review the company's internal reporting on monthly income statement and financial position in order to assess performance and allocate resources.

The Executive Director assess performance of the operating segment based on profit from operations.

Operating profitDepreciation (Note 14)Interest income (Note 9)Profit before taxationIncome tax (Note 11)Total assetsTotal liabilities

Entity wide information:Analysis of revenue:Sale of paint productsRevenue from services

2,285,201 94,736

327,249 2,597,832

568,489 6,311,246 3,502,307

2018

N000 7,758,380

6,154 7,764,534

1,975,676 81,188

226,703 2,181,711

682,981 5,013,990 2,771,770

2017

N0007,103,932

10,018 7,113,950

N000

2017

N000

2018





Disaggregated revenue information

Set out below is the disaggregation of the company's revenue from contracts with customers:

Set out below is the amount of revenue recognised from:


Sale of paint products

Application of paint

Geographical marketsWithin NigeriaOutside NigeriaTotal revenue from contracts with customers

Type of goods/service Sale of paint productsApplication of paintTotal revenue from contracts with customers

Timing of revenue recognitionGoods transferred at a point in timeServices transferred over timeTotal revenue from contracts with customers

Sales channelsThrough intermediariesDirectly to customersTotal revenue from contracts with customers

Amounts included in refund liabilities at the beginning of the year

7,758,380 -

7,758,380

7,758,380 -

7,758,380

7,758,380 -

7,758,380

2,637,849 5,120,531 7,758,380

6,154 -

6,154

- 6,154 6,154

-6,154 6,154

- 6,154 6,154

7,764,534 -

7,764,534

7,758,380 6,154

7,764,534

7,758,380 6,154

7,764,534

2,637,849 5,126,685 7,764,534

2018N000

2,494

Total

N000N000N000

Segments





Performance obligations

Information about the company's performance obligations are summarised below:

Sale of paints The performance obligation is satisfied upon customers obtaining control of the

paints that is upon delivery and acceptance. Invoices are usually payable generally within 30 to 60 days from delivery. Some contracts provide customers with a right of return. Returned goods are exchanged only for new goods i.e. no cash refunds are offered.

Application of paint The performance obligation is satisfied over a period of time and payment is

generally due upon completion of the service and acceptance of the customer. Revenue is recognised by measuring progress using the input method that is labour hours.

Concentration risk

Three customers who are agents of the company contributed 34% of the

Sale of scrap itemsProfit on sale of PPEInterest from Government grantManagement feesRealised Exchange Loss/gain

5,328 52

1,484 57,445 (2,473)61,837

9,482 4,877 4,136

52,826 6,271

77,592

N000

2017

N000

2018

6. Other income

Management fees represent income generated from management services rendered to the company's key distributors.





7ii Administrative expenses

7. Expenses by nature

7i Cost of sales

Change in inventories of finished goods and work in progressStaff costs Royalty fees (Note 29a)Hire of equipmentCapdec project costDepreciation of property,plant & equipment (Note 14)General risk insurance premiumDirect overheadOther expenses

3,531,246 182,119 139,827

29,721 4,745

57,372 14,389

8,152 66,990

4,034,561

3,428,242 147,992 123,235

33,633 7,070

49,637 13,007

4,726 56,443

3,863,985

N000

2017

N000

2018

Staff costs excluding directors' emolumentsDirectors' emoluments (Note 8iii)Auditors' feesDepreciation of property,plant & equipment (Note 14)\Amortisation of intangible assets (Note 15)InsuranceCommercial service fees (Note 29b)Computer chargesCleaning and laundrySecurityImpairment on other receivablesImpairment on intercompany receivablesImpairment and write off on trade receivablesImpairment of short term depositsOther expenses

541,515 74,18320,983

37,364 23,255

3,199 81,534 39,612 18,546 10,357

8142,633

14,776 11,243

269,858 1,149,872

551,268 69,633 19,530

31,551 22,242

4,215 74,701 26,457 18,347 11,347

1,205 -

1,296-

218,864 1,050,656

N000

2017

N000

2018





7iii Selling and distribution expenses

Other expenses relates to office cleaning expenses, awards and conferences expenses incurred during the year.

Marketing communication & entertainmentTour and travellingCarriage outwardOther expenses

137,228 48,151 94,219 77,140

356,737

105,741 36,807 85,950 72,727

301,225

N000

2017

N000

2018

Particulars of directors and staff

(i) The company had in its employment during the year the weekly average number of staff in each category below. The aggregate amount stated against each category was incurred as wages and retirement benefit costs during the year.

8. Employee benefits

Staff costs include:Wages and salariesPension costs: - Defined contribution plans (Statutory) - Defined contribution plans (Voluntary)

648,107

38,413 37,114

723,634

621,089

37,970 40,201

699,260

N000

2017

N000

2018

CostManagementStaffTotal

480,367 243,267 723,634

485,785 213,475 699,260

N000

2017

N000

2018

20172018NumbersManagementStaff

80133213

86119205





(ii) The table below shows the number of employees who earned over =N=300,000 as emoluments in the year and were within the bands stated.

(iii) Emoluments of directors

Fees Passage allowance Other emoluments

(iv) The Chairman's emoluments

(v) Emolument of the highest paid director

1,294 57,076 15,813 74,183

12,857

15,813

1,175 50,003 18,455 69,633

11,721

18,455

N000

2017

N000

2018

N300,000 700,001 1,000,001 1,400,001 1,800,001 2,200,001 2,600,001 3,000,001 4,000,001 5,000,001 6,000,001 8,000,001 9,000,001 10,000,001 10,000,001

700,000 1,000,000 1,400,000 1,800,000 2,200,000 2,400,000 3,000,000 4,000,000 5,000,000 6,000,000 8,000,000 9,000,000

10,000,000 16,000,000 18,000,000

2018Number

29673620

89

1417

4331110

213

2017Number

29593620

89

1417

4331101

205





Key management compensation

Key management have been defined as the executive directors.

Key management compensation includes:

(vi) The table below shows the number of Directors of the company, whose remuneration, excluding pension contributions, are within the bands shown below.

Short-term employee benefits:- Wages and salaries- Directors emolumentsPost employment benefits: - Defined contribution plan

15,813 8,023

1,581

25,417

18,455 8,435

2,027

28,917

N000

2017

N000

2018

The amounts above have been included in directors emoluments.

Interest income on short-term bank depositsInterest income on loan to related partyInterest income on finance lease assets

323,951 -

3,298 327,249

191,631 32,074

2,998 226,703

N000

2017

N000

2018

9. Finance income

Interest costAmortised costInterest element on loan

4,019 2,369 8,230

14,618

20,668 - -

20,668

N000

2017

N000

2018

10. Finance Cost

14,000,00118,000,001

16,000,00020,000,000

N --

2 0 1 8N u m b e r

1-1

2017Number

- 11





11. Taxation

Nigeria corporation tax is calculated at 30% (2017: 30%) of the estimated assessable profit for the year.

Current taxNigeria corporation tax charge for the year

Education taxCapital gain taxIncome tax expense

747,194

53,647 -

800,841

589,503

45,335 92

634,930

N000

2017

N000

2018

The tax charge for the year can be reconciled to the profit per the statement of profit or loss as follows:

Accounting Profit before tax

Tax at the Nigeria corporation tax rate of 30% (2017: 30%)Impact of disallowable expensesImpact of Education taxPrior year over provisionTax exempt incomeCapital gain taxTax incentives

Effective tax rate

Income tax for the yearTax at the Nigeria corporation tax rate of 30% (2017: 30%)Education taxPrior Year Over ProvisionCapital gain taxDeferred tax charged/ writeback for the year

Tax charge for the year

2,597,832

779,350 43,322 53,647

(271,196) (34,082)

-(2,552)

568,489

22%

747,194 53,647

(271,196) -

38,844

568,489

2,181,711

654,513 18,221 45,335

-(18,526)

92(16,654) 682,981

31%

589,503 45,335

-92

48,051

682,981

N000

2017

N000

2018





Per statement of profit or loss

Income taxEducation taxPrior CIT over provisionCapital gain taxDeferred taxation (Note 23)

747,194 53,647

(271,196)-

38,844 568,489

589,503 45,335

-92

48,051 682,981

N000

2017

N000

2018

Per statement of financial position:Balance 1 January

(Payments)/writeback during the year:Income taxEducation taxCapital gains taxBack duty taxTotal cash paymentWHT UtilisedPrior CIT over provision

Provision for the year:Income taxEducation taxCapital gain tax

Balance as at 31 December

652,175

(273,654)(45,335)

(92)-

(319,081)(61,898)

(271,196)(652,175)

747,194 53,647

-800,841

800,841

720,713

(635,753)(47,000)

-(170)

(682,923)(20,545)

-(703,468)

589,503 45,335

92634,930

652,175





12. Dividend

Amounts recognised as distributions to ordinary shareholders in the year comprise:

***The dividend refunded relates to a recall of dividend deposited with the Registrars which have stayed over and above 15 months in accordance with SEC requirement.

Approved dividend for 2018: 290 kobo per share (2017:205 kobo per share)

The directors proposed, out of 2018 profit, a dividend of 290 kobo per share amounting to N2.03billion subject to approval at the annual general meeting and are not recognised as liability as at 31 Dec. 2018

At 1 January*Approved dividend***Dividend refundedPayments during the yearAt 31 December

809,598 1,435,000

206,683 (1,437,953)

1,013,328

520,817 1,540,000

288,781 (1,540,000)

809,598

N000

2017

N000

2018

13. Earnings per share

(a) Basic Basic earnings per share is calculated by dividing the profit attributable to equity

holders of the company by the weighted average number of ordinary shares in issue during the year.

There were no potentially dilutive shares outstanding at 31 December 2018.

Weighted average number of ordinary shares in issue ('000)Profit attributable to ordinary equity shareholders (N'000) Basic earnings per share (kobo)

(b) Diluted

700,000

2,029,343 290

290

700,000

1,498,730 214

214

20172018





14. Property, plant and equipment

Cost

At 1 January 2017 Additions Disposals Reclassification At 30 December 2017

At 1 January 2018 Additions Disposals Reclassifications At 31 December 2018

Accumulated depreciation At 1 January 2017 Charge for the year Disposals At 31 December 2017

At 1 January 2018 Charge for the year Disposals At 31 December 2018

Net book values At 31 December 2018

At 31 December 2017

Leasehold Land

11,472 - -

11,472

11,472 ---

11,472

3,862--

3,862

3,862 - -

3,862

7,610

7,610

Buildings on

leaseholdland

N000

53,846 --

53,846

53,846 843

-0

54,689

14,107 1,765

-15,872

15,872 1,765

- 17,637

37,052

37,974

Tinting equipment

N000

164,300 -

(2,550)

161,750

161,750 15,449

(41,376) -

135,823

129,553 11,847 (2,405)

138,995

138,995 12,480

(41,307) 110,168

25,655

22,755

Plant and Machinery

N000

419,304 117,907 (5,145)

211,793 743,860

743,860 23,841 (1,676) 45,776

811,801

216,050 37,789 (5,009)

248,831

248,831 44,893 (1,665)

292,060

519,741

495,029

Furniture and fittings

N000

124,351 16,637 (5,167)

135,821

135,821 14,491 (2,202)

-148,110

102,997 12,589 (5,125)

110,461

110,461 14,679 (1,939)

123,201

24,909

25,360

Motor vehicles

N000

171,684 -

(33,141)

138,543

138,543 79,358

--

217,901

99,613 17,198

(29,827) 86,984

86,984 20,919

107,903

109,998

51,559

Total

N000

1,161,750 180,319 (46,003)

1,296,066

1,296,068 133,982 (45,254)

-1,384,796

566,182 81,188

(42,366) 605,004

605,004 94,736

(44,911) 654,829

729,962

691,059

WIP

N000

216,793 45,776

-(211,793)

50,776

50,776 --

(45,776) 5,000

----

-- - -

5,000

50,776

Leasehold properties have an unexpired tenure of between 43 and 65 years. Work in progress (WIP) relates to the amount incurred for factory extension which is yet to be completed.





15. Intangible assets

Cost of software: At 1 January Additions Balance at 31 December

Amortization of software At 1 January Amortization of software during the year Balance at 31 December

Net Balance at 31 December

2018N000

116,271 -

116,271

67,202 23,255 90,457

25,814

2017N000

102,306 13,964

116,270

44,960 22,242 67,202

49,068

16. Inventories

Raw materials Intermediates Technical stocks and spares Containers and labels Consumable stocks Finished goods

2018N000

295,194 14,330 31,520 43,777 27,654

471,641 884,115

Value at

CostCostCostCostCostCost

2017N000

350,512 21,077 18,962 41,287

9,386 746,181

1,187,405

The amount of inventory expensed during the year is N3,531,246,000 (2017 N3,428,242,000) This is recognised in cost of sales.





17a. Trade and other receivables Receivables due within one year

Trade receivables Less: provision for impairment of trade receivables Net trade receivable Receivables from related parties (Note 25) Impairment on receivables from related parties Witholding tax receivable Impairment on witholding tax receivable Witholding tax credit notes received Other receivables Impairment on other receivables Advances to staff

2018N000

123,393 (34,419)

88,974 14,245 (6,253) 20,689

(14,080) 17,575 73,870

(22,649) 118

172,488

2017N000

68,152 (19,643)

48,509 6,999

(6,690) 52,758

(53,295)36,776 47,191

(21,891) 344

110,700

Other receivables includes interest receivables and non-interest bearing advances granted to trade partners.

Gross investment in lease Unearned finance income Net investment in lease

17b. Receivables due after one year, finance lease receivables

2018N000

91,601 (81,224)

10,377

2017N000

91,601 (81,222)

10,379

Movements in the provision for expected credit losses on trade receivables are as follows:

At 1 January under IAS 39 Adjustment upon application of IFRS 9 Balance as at 1 January 2018 – As restated Additional impairment charge for the year Receivables written off during the year At 31 December

2018N000

19,643 6,260

25,903 14,776 (6,260) 34,419

2017N000

20,939 -

- 34

(1,330) 19,643





Gross finance lease receivable - minimum lease receivable - No later than 1 year - 2 to 5 years - More than 5 years

Future finance income on lease

Present value of finance lease receivable

The present value is analysed as follows: - No later than 1 year - 2 to 5 years - More than 5 years

Gross investment in lease2018N000

2,200 11,000 78,401 91,601

(81,224)

10,377

1,606 4,306 4,464

10,377

2017N000

2,200 11,000 78,401 91,601

(81,222)

10,379

1,608 4,306 4,464

10,379

The company has finance lease for a warehouse to a related party, MDS Logistics. The lease is for a total period of 51 years; of this period 41 years remain in the contract. The property reverts to the company at the end of the lease period.

17c. Decease/(Increase) in Trade and other Receivables

2017 movement

Trade & Other Receivables WHT utilized Impairment of Trade & Other Rec.

2016

627,520

Increase/Decrease2017

110,700 516,820 (20,545)

(2,501)493,774

Trade & Other Receivables Prior year Imp. Current year imp. Interest element on loan WHT Utilised

2018 movement2017

110,700 6,999

47,191

Increase/Decrease2018

172,488 14,245 73,870

(61,788)(6,300)

(18,223)(8,230)

(61,898)(156,439)





19. Cash and cash equivalents

Cash at bank and in hand Short-term deposits

2018N000

196,933 4,142,361 4,339,294

2017N000

79,289 2,741,170 2,820,459

Cash at banks earns interest at floating rates on daily bank deposit rates.

Short-term deposits are made for varying periods of between one day and three months,depending on the immediate cash requirements of the company, and earn interest at the respective short-term deposit rates.

In 2015, Security and Exchange Commision directed all Registrars to return all unclaimed dividends, which have been in their custody for 15 months and above, to the paying companies. Included in the cash and shorterm deposits is N1.395b which represents unclaimed dividends received from Africa Prudential Registrars as at 31st December 2018.

18. Prepayments

Import prepayment Other prepayments Packaging Material Insurance

2018N000

13,539 61,648 49,083 24,001

148,270

2017N000

20,470 47,050 60,213 17,187

144,920

Other prepayments includes staff prepayments on housing, education allowance etc.





Other accruals includes gratuity payable to staff, car grant payable to staff, accrued incentives to staff and professiional fee outstnding during the period.

Authorised: Ordinary shares of 50k each Issued and fully paid: Ordinary shares of 50k each

Movements during the year: Balance at 1 January 2018 At 31 December 2018

Number '000

1,500,000

700,000

Number of shares

'000 700,000 700,000

Amount N000

750,000

350,000

Ordinary shares

N000 350,000 350,000

2017

Amount N000

750,000

350,000

Number '000

1,500,000

700,000

22. Share capital

Average credit period taken for trade purchases (days) 30 30

2018 2017

Terms and conditions of the above financial liabilities: Trade payables are non-interest bearing and are normally settled on 30 days term.

Other payables are non-interest bearing and have an average term of six months.





Borrowing Current portions As at 1/1 Interest accrued (Note 10) Interest paid Loan repayment Balance as at 31 December

Grant Balance as at 1 Jan. Release to P or L Balance as at 31 December

20. Interest-bearing loans and borrowings

2018N000

77,631 6,388

(4,019) (80,000)

-

1,484 (1,484)

-

2017N000

157,284 20,668

(15,239) (85,082)

77,631

5,620 (4,136)

1,484

The of Bank of Industry granted N200m loan to the company for the procurement of plant and machinery for expansion of its production capacity at an interest rate of 10%. The tenor of the loan is 36 months. The company's grant is disclosed in the Financial statement because the interest on the loan is below the effective interest rate.

21. Trade and other payables

Trade payables Royalty accrual

Provision for employee leave VAT payable Witholding tax payable Income received in advance Accrued marketing expenses Payable to related parties Accrued customers rebate Accrued dealer's reward Accrued audit fee Sundry creditors Reclassification of dividend payable Other accruals

2018N000

344,147 139,827 483,974

1,515 168,790

17,102 203,223

17,260 38,074

-15,186 20,948 52,724

389,043 151,177

1,559,016

2017N000

219,896 123,235 343,131

- 87,324

3,946 -

3,307 9,870

112,776 32,499 18,900 49,236

389,043 80,802

1,130,834



CAP plcRC: 4551

Nature and purpose of reserves The share premium reserve is used to recognise the amount above the par value of issued and fully paid ordinary share of the Company.

Share premium balance at 1 january

At 31 December

N0002018

19,254

19,254

N0002017

19,254

19,254


Accelerated depreciation property, plant & equipment Trade and other receivables Inventories

Accelerated depreciation property, plant & equipment Trade and other receivables Inventories

2018N000

132,630 (30,456)

(2,126)100,049 156,905 (24,768)

(5,083)127,053

2017N000

81,119 (26,905)

(2,216)51,998

132,630 (30,456)

(2,126)100,049

23. Deferred tax The analysis of deferred tax assets and deferred tax liabilities is as follows: Statement of financial position:

At 1 January Adjustment upon adoption of new standards At 1 January (restated) Profit or loss charge (Note 11) At 31 December

2018N000

(100,049)11,840

(88,209)(38,844)

(127,053))

2017N000

(51,998)-

(51,998)(48,051)

(100,049)

The movement on the deferred income tax account is as follows:





26. Related party transactions

The immediate and ultimate parent, as well as controlling party of the company is UAC of Nigeria Plc incorporated in Nigeria. There are other companies that are related to CAP Plc through common shareholdings and directorship.

The following transactions were carried out with related parties:

(a) Sales of goods and services

24. Refund Asset

This relates to return asset on right of return previously taken as cost of sales.

Right of return asset 926926

--

2018 2017

This relates to refund liabililty on right of return previously taken as revenue.

25. Refund Liability

At 1 January At 31 December

2,0702,070

--

UAC of Nigeria Plc UAC Foods Limited UACN Property Dev. Company Plc UAC Restaurants

Relationship

ServiceSales of paint

Sales of paintSales of paint

ParentFellow subsidiary

Fellow subsidiaryFellow subsidiary

6861,565

29,108 654

32,013

-1,643

3,744 370

5,757

2018N000

2017N000

UAC of Nigeria Plc: Commercial service fee (Note 7)

2018N000

81,534

2017N000

74,701

(b) Purchases of goods and services



CAP plcRC: 4551

(c) Key management compensation

Key management have been determined as directors (executive and non-executive) the Chairman and other senior management that form part of the leadership team. Details of compensation are documented in note 8. There were no other transactions with key management during the year.


(d) Year-end balances arising from sales/purchases of goods/services:

Pension Service

Sales of paintService

ServiceServiceSales of paint

Fellow subsidiary

Fellow subsidiaryParent

Fellow subsidiaryFellow subsidiaryFellow subsidiary

Receivables: UNICO CPFA Limited UACN Property Dev. Company Plc UAC of Nigeria Plc Portland Paint Products Nig. PLC Grand Cereals Ltd UAC Foods Ltd

2018N000

-

10,521 -

2,735 -

98914,245

2017N0006,690

263-

- 46

- 6,999

Relationship

Service

Fellow subsidiary

Fellow subsidiaryParent

Payable: Grand Cereals Ltd Portland Paint Products Nig. PLC UAC of Nigeria Plc

2018N000

150

15,000 22,924 38,074

2017N000

-

-9,870 9,870

Relationship

Fellow subsidiary

Finance lease receivable: MDS Logistices

2018N000

10,377

2017N000

10,379

Relationship





Contingent liabilities

31 December 2018 and 2017 The company is involved in some legal actions in the ordinary course of business.

Based on advice from the company's counsel, the directors are of the opinion that the company has good defence against the claims and no material loss is anticipated.

Capital expenditure authorised & contracted

2018N000

133,963

2017N000

32,795

27. Capital commitments and contingent liabilities

Capital commitments

28. Fair values

The carrying value of cash and cash equivalent, trade and other receivables, trade and other payables and receivables from related parties approximates their fair values as at the reporting dates.

Methods and assumptions used: Assets for which fair value approximates carrying value For financial assets and financial liabilities that have a short term maturity (less

than three months) it is assumed that the carrying amounts approximate their fair value. These includes cash and cash equivalent.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 December 2018, the Company recorded an impairment of receivables relating to amounts owed by related parties 2018: N6,252,659.98 (2017: N6,690,000). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.





29. Technical support agreements

(a) The company has a royalty agreement with AkzoNobel United Kingdom in respect of paints produced and sold. Amount charged for the year (representing 3% of turnover of Dulux Brand) is N139.827million (2017: N123.24million)

(b) The company has commercial services agreement with UACN Plc for support services. Expense for commercial services fee (representing 1% of turnover of the company) is N81.53million (2017: N74.70million).

30. Events after reporting date

No event or transaction has occurred since the reporting date which would have a material effect on this financial statements.



CAP plcRC: 4551

RevenueOther income

Bought in materials and servicesLocalImportedValue added

Applied as follows:To pay employees assalaries, wages and other benefitsTo pay government as taxes Retained for replacement of assets and business growth:Deferred taxationAmortization of intangibles and depreciationProfit attributable to members

7,764,534 374,468

(3,455,602) (1,243,943)

3,439,457

723,634 529,645

38,844

117,991 2,029,343 3,439,457

100

21 15

1

3 59

100

7,113,950 283,627

(3,112,143) (1,301,033)

2,984,401

699,260 634,930

48,051

103,430 1,498,730 2,984,401

100

19 23

-

3 54

100

2018N000

% %

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, government, providers of capital and the amount retained for the future creations of more wealth.

2017N000

Value Added StatementFor the year ended 31 December 2018

EmployeeTaxesDeferred taxDepreciationRetained profit

Deferred tax1%Depreciation

3%

Retained profit 59%

Taxes 15%

Employees 21%



CAP plcRC: 4551Company Five-year Financial Summary

Assets employedProperty, plant and equipmentIntangible assetsFinance lease assetsNet current assets

Deferred taxation

Funds employedShare capitalShare premiumRetained earnings

RESULTSContinued business

Turnover and profitsTurnover Profit before taxationTaxationProfit for the year attributable Interim dividendProfit retained

Notes

Earnings and dividend per share are based on profit after tax and on the number of ordinary shares issued and fully paid at the end of each year.

Per 50k share data (kobo)Earnings per share- BasicEarnings per share- AdjustedDividend per share- BasicDividend cover

290290290

-

214214 205

-

229229220

1

249249235

1

237237235

1

729,962 25,814 10,377

2,169,839 2,935,992

127,053 3,063,045

350,000 19,254

2,439,685 2,808,939

7,764,534

7,764,534 2,597,832 (568,489) 2,029,343

- 2,029,343

691,059 49,068 10,379

1,591,763 2,342,269

100,049 2,442,318

350,000 19,254

1,872,966 2,242,220

7,113,950

7,113,950 2,181,711 (682,981) 1,498,730

-1,498,730

595,565 57,347 10,381

1,757,277 2,420,570 (137,080) 2,283,490

350,000 19,254

1,914,236 2,283,490

6,813,984

6,813,984 2,296,821 (693,464) 1,603,357

-1,603,357

410,324 74,708 10,382

1,080,048 1,575,462

(55,329) 1,520,133

350,000 19,254

1,150,879 1,520,133

7,056,876

7,056,876 2,570,021 (830,462) 1,739,559 (805,000)

934,559

399,746 94,630 10,383

750,124 1,254,883

(74,310) 1,180,573

350,000 19,254

811,319 1,180,573

6,987,604

6,987,604 2,442,140 (779,715) 1,662,425

(1,050,000) 612,425

IFRS2018N000

IFRS2017N000

IFRS2016N000

IFRS2015N000

IFRS2014N000




CAP plcRC: 4551Salient Performance Graphs


2,000

2,500

-

500

1,000

1,500

1,603

1,499

Profit after tax

YEAR

2014 2015 2016 2017 2018

1,662

1,740

2,029

Nm

YEAR

Turnover

6,200

6,400

6,600

6,800

7,000

7,200

7,400

7,600

2014 2015 2016 2017 2018

6,988

7,057

6,814

7,114

7,7657,800

Nm

8,000

100

200

250

350

Kobo

300

-

237249

229

2014 2015 2016 2017 2018

YEAR

214

290

150

Earnings per 50k share - Adjusted

50

235

235

50

150

200

250

2014 2015

220205

2016 2017 2018

Year

Kobo

100

Dividend per 50k share - Adjusted

300

290

YEAR

Turnover PAT Earnings Dividend per share Continued business

2014

6,988 1,662

237235

6,988

2015

7,057 1,740

249235

7,057

2016

6,814 1,603

229220

6,814

2017

7,114 1,499

214205

7,114

2018

7,765 2,029

290290

7,765



CAP plcRC: 4551

Range

Number ofShareholders

Unit ofHoldings

Value ofHoldings

N

Percentage%

4,094 8,821 2,110

30647

41

1,531,384 28,817,631 56,708,489 81,884,898

102,311,003 68,319,534

360,427,061

765,692 14,408,815 28,354,245 40,942,449 51,155,501 34,159,767

180,213,531

0.224.128.10

11.7014.62

9.7551.49

9999,999

99,999 999,999

9,999,999 99,999,999

999,999,999

-------

11,000

10,000100,000

1,000,00010,000,000

100,000,000

Register Range Analysis

15,383 700,000,000 350,000,000 100Total

19911992199319941995199619971998199920002001200220032004201020112012201320142015201620172018

Share capital history

25,00025,00050,000

50,00050,000

100,000100,000100,000100,000100,000100,000100,000150,000150,000150,000420,000420,000420,000420,000420,000420,000

1,500,000 1,500,000

N'00014,00014,00033,352

4,97142,00052,00052,00052,00063,00063,00063,00063,00084,00084,000

105,000280,000280,000350,000350,000350,000350,000350,000

28,00028,00066,704 83,942 84,000

105,000105,000105,000126,000 126,000126,000168,000 168,000210,000 210,000 560,000 560,000700,000 700,000700,000700,000700,000700,000

Right Issue 3:2Bonus Issue 1:5

Scrip Issue 1:5

Bonus Issue 1:3

Bonus 1:4Bonus 1:3Bonus 1:1

Bonus 1:4

AuthorizedN000

IssuedN000

No of sharesN000

Shareholders’ Information

According to the Register of Members, the one shareholder UAC of Nigeria Plc held 5% of the issued share capital of the Company as at 31 December 2018.



CAP plcRC: 4551Shareholders’ Information cont’d

Five year dividend historyDividends declared during the last five years were as follows:-

1,575,000 1,645,000 1,645,000 1,540.000 1.435,000

11198949696

Total AmountN000

% of CompanyProfit after tax

225k235k235k220k205k

Dividend per share

2013 19th June 20142014 18th June 2015 2015 16th June 2016 2016 13th June 20172017 19th June 2018

Date declared

Notice to shareholders

Unclaimed dividends and share certificates

Since becoming a public company in 1974, the Company has declared and issued a number of scrip shares. Currently, our unclaimed dividends account indicates that some dividends warrants have not been returned to the registrars as unclaimed because the addresses could not be traced.

Total amount of unclaimed dividend as at December 31, 2018 was N1,334,912,540.78. The total number of unclaimed certificates as at December 31, 2018 was nil.

This notice is to request all affected shareholders to contact the Head, Business Development & Relationship Management of Africa Prudential Plc at 220B Ikorodu Road, Palmgrove, LagosTel +234-7080606400. Website: africaprudential.com


I/We

being a member/members of CHEMICAL AND ALLIED PRODUCTS PLC, hereby appoints,** ………………………………………………………………..or failing him the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the company to be held on Thursday June 20, 2019 and at any adjournment thereof:-

Dated this ……….………….. day of …………………………… 2019

Shareholder's Signature ……………………………………….........

IF YOU ARE UNABLE TO ATTEND THE MEETING

A member who is unable to attend the Annual General Meeting in person is allowed to attend by proxy. The above form has been prepared to enable you to exercise your right to vote, in case you cannot personally attend the meeting.

Following the normal practice, the name of the Chairman of the company has been entered on the form to ensure that someone will be at the meeting to act as your proxy but if you wish you may insert in the blank space on the form (marked**) the name of any person, whether a member of the company or not, who will attend meeting and vote on your behalf instead of one of the directors.

If executed by a corporation, the Proxy Form should be sealed with the Common Seal. The Proxy must produce the admission card sent with the Report and Accounts to obtain entrance to the meeting.

Please sign this proxy form and send it, so as to reach the address shown overleaf not later than Monday June 17, 2019

Please admit: ADMISSION FORM to the Annual General Meeting of CAP Plc which will be held at the ARTHUR MBANEFO HALL GOLDEN TULIP FESTAC, AMUWO ODOFIN LAGOS ON THURSDAY JUNE 20, 2019

IMPORTANT NOTE 1. This admission card must be produced by the shareholder or the proxy to obtain admission to to the Annual General Meeting. 2. Shareholders or their proxies are requested to sign the admission card in the appropriate place before attending the meeting.

Rose Hamis (Mrs.)Company Secretary

Signature of person attending SHAREHOLDER……………………………………………………………...... PROXY……………………………………………………………………….........Name and address of Shareholder

Annual General MeetingChemical and Allied Products Plc

Annual General MeetingChemical and Allied Products Plc

Proxy Form

54TH ANNUAL GENERAL MEETING TO BE HELD AT THE ARTHUR MBANEFO HALL, GOLDEN TULIP FESTAC, AMUWO ODOFIN, LAGOS STATE ON THURSDAY JUNE 20, 2019 AT

1234

5

6

7

RESOLUTIONS FOR AGAINST ABSTAIN ORDINARY BUSINESS To declare a dividend To re- elect Amb. Kayode Garrick as a Director To elect Mrs. Omolara Elemide as a DirectorTo authorize the Directors' to fix Auditors' remunerationThe Auditor's remuneration and expenses for 2018 was N20.64million inclusive of VATTo elect members of the Audit CommitteeSPECIAL RESOLUTIONSTo approve N35,011,283.47 as Directors' remuneration for 2019The Directors' remuneration for 2018 was N58,369,832.21To renew the general mandate authorizing the Company to enter into recurrent transactions with related parties or companies.

Please indicate with an “X” in the appropriate square how you wish your votes to be cast on the above resolutions. Unless otherwise instructed, the proxy will vote or abstain from voting at his discretion.


PLEASE AFFIXPOSTAGE STAMP

THE REGISTRARAfrica Prudential Plc220B Ikorodu RoadPalm GroveLagosTel: 01-4548118, 4548120

If undelivered please return to

THE REGISTRARAfrica Prudential Plc220B Ikorodu RoadPalm GroveLagosTel: 01-4548118, 4548120


1. AFRICA PRUDENTIAL PLC

2. ABBEY MORTGAGE BANK PLC

3. AFRILAND PROPERTIES PLC

4. ALUMACO PLC

5. A & G INSURANCE PLC

6. .R.M LIFE PLCA

7. DAMAWA STATE GOVERNMENT BONDA

8. ECO PETROLEUM PRODUCTS PLCB

9. UA GROUPB

10. ENUE STATE GOVERNMENT BONDB

11. AP PLCC

12. APPA AND D'ALBERTO PLCC

13. EMENT COY. OF NORTHERN NIG. PLCC

14. SCS PLCC

15. HAMPION BREWERIES PLCC

16. CWG PLC

CORDROS MONEY MARKET FUND17.

18. EBONYI STATE GOVERNMENT BOND

1 . OLDEN CAPITAL PLC9 G

. NFINITY TRUST MORTGAGE BANK PLC20 I

2 . VESTMENT & ALLIED ASSURANCE PLC1 IN

2 . IZ BANK PLC2 JA

2 . DUNA STATE GOVERNMENT BOND3 KA

2 .4 LAGOS BUILDING INVESTMENT CO. PLC

2 .5 MED-VIEW AIRLINE PLC

2 . XTA REAL ESTATE PLC6 MI (formerly ARM Properties Plc)

27. NEXANS KABLEMETAL NIG. PLC

28. OMOLUABI MORTGAGE BANK PLC

9 PER2 . SONAL TRUST & SAVINGS LTD

S MANDRIDES PLC30. P.

. RTLAND PAINTS & PRODUCTS NIG. PLC31 PO

. EMIER BREWERIES PLC32 PR

3 . SORT SAVINGS & LOANS PLC3 RE

3 . ADS NIGERIA PLC4 RO

3 . OA NIGERIA PLC5 SC

3 .6 TRANSCORP HOTELS PLC

3 . ANSCORP PLC7 RT

3 .8 TOWER BOND

3 . E LA CASERA CORPORATE BOND9 TH

. CN PLC40 UA

. ITED BANK FOR AFRICA PLC41 UN

. ITED CAPITAL PLC42 UN

4 . BALANCED FUND3 UNITED CAPITAL

44. UNITED CAPITAL BOND FUND

45. UNITED CAPITAL EQUITY FUND

4 . MONEY MARKET FUND6 UNITED CAPITAL

7 UNITED CAPITAL NIGERIAN EUROBOND FUND4 .

48. UNITED CAPITAL WEALTH FOR WOMEN FUND

49. UNIC DIVERSIFIED HOLDINGS PLC

. IC INSURANCE PLC50 UN

51 U. AC PROPERTY DEVELOPMENT COMPANY PLC

. TC NIGERIA PLC52 U

. EST AFRICAN GLASS IND PLC53 W

CLIENTELE

Please tick against the company(ies)where you have shareholdings

HEAD OFFICE: 220B, Ikorodu Road, Palmgrove, Lagos. Tel: 07080606400

PORT-HARCOURT: . Tel: 084-303457Oklen Suite Building (2nd Floor), No. 1A, Evo Road, GRA Phase 2

E- : @africaprudential.comMAIL cfc | www.africaprudential.com | @afriprud

Africa PrudentialRC 649007

e-SHARE REGISTRATION APPLICATION FORM

Dear Registrar,

Please take this as authority to activate my account(s) on your SharePortalwhere I will be able to view and manage my investment portfolio online withease.

11. NAME OF STOCKBROKER:

10. CSCS CLEARING HOUSE NO.:

9. POSTAL ADDRESS:*

8. ALTERNATE MOBILE NO.:

6. MOBILE NO.:*

5. ALTERNATE E-MAIL:

4. E-MAIL:*

3. OTHER NAME:

2. FIRST NAME:*

1. SURNAME/COMPANY NAME:*

7. SEX: MALE FEMALE

C

OTHERS:

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KINDLY FILL AND RETURN FORM TO ANY OF OUR OFFICE ADDRESSES STATED BELOW | = COMPULSORY FIELDS*

10. OLD ADDRESS(if any)

13. NEXT OF KIN*

1. SURNAME/COMPANY NAME*

2. FIRST NAME* 3. OTHER NAME

4. GENDER* M F 5. E-MAIL

6. ALTERNATE E-MAIL

8. MOBILE (1)* (2)

9. ADDRESS*

14. MOTHER’S MAIDEN NAME*

NAME MOBILE

11. NATIONALITY* 12. OCCUPATION*

15. NAMEBANK 16. A/C NO.

7. DATE OF BIRTH*

17. NAMEA/C 18. OPENING DATEA/C

D D M M Y Y Y Y

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19. BANK VERIFICATION NO. (BVN)

2 . CSCS CLEARING HOUSE NO. (CHN)1 C

20. NAME OF STOCKBROKING FIRM

Africa Prudential







4. ALUMACO PLC


6. .R.M LIFE PLCA



9. UA GROUPB


11. AP PLCC



14. SCS PLCC


16. CWG PLC






2 . IZ BANK PLC2 JA















3 . ANSCORP PLC7 RT

3 .8 TOWER BOND


. CN PLC40 UA














CLIENTELE


OTHERS:

Signature:


Company Seal(if applicable)Signature:


E-DIVIDEND MANDATE ACTIVATION FORM

Bank Name:

Bank Account Number:

Account Opening Date:

SHAREHOLDER ACCOUNT INFORMATION

Surname/Company’s Name First Name Other Name

Address

City State Country

Previous Address (if any)

Clearing House Number (CHN) (if any) Name of Stockbroking Firm

CMobile Telephone 1 Mobile Telephone 2

E-mail Address

Signature:


Company Seal(if applicable)

CurrentPassport

USE GUM ONLYNO STAPLE PINS

(to be stamped by your banker)

ONLY CLEARING BANKS ARE ACCEPTABLE




4. ALUMACO PLC


6. .R.M LIFE PLCA



9. UA GROUPB


11. AP PLCC



14. SCS PLCC


16. CWG PLC






2 . IZ BANK PLC2 JA















3 . ANSCORP PLC7 RT

3 .8 TOWER BOND


. CN PLC40 UA














CLIENTELE





DISCLAIMER"In no event shall Africa Prudential Plc be liable for any damages , losses or liabilities including without limitation, direct or indirect,special, inciden tal, consequential damages, losses or liabilities, in connection with your use of this form or your inability to use theinformation, materials, or in connection with any failure, error, omission, defect, delay in operation or transmission, or systemfailure, even if you advice us of the possibility of such damages, losses of expenses, whether express or implied in respect of such

OTHERS:

information."

Africa PrudentialRC 649007

INSTRUCTIONPlease complete all section of this form to make it eligible for processing and return tothe address below.

The RegistrarAfrica Prudential Plc220B, Ikorodu Road, Palmgrove, Lagos.

I/We hereby request that henceforth, all my/our Dividend Payment(s) due to me\us from

my/our holdings in all the companies ticked at the right hand column be credited directly

to my /our bank detailed below:

DD MM YYYY

Signature:

Gender Male Female:




CAP plcRC: 4551



CAP plcRC: 4551

Documents

Annual Report Inside 2018 - CAP Plc · 2020-05-07 · 2018 ANNUAL REPORT & FINANCIAL STATEMENTS 9 Chemical and Allied Products plc CAPplc RC: 4551 DULUX COLOUR CENTRES Ÿ17A, Ajao