GREIF NIGERIA PLC€¦ · Although Nigeria exited recession in 2017, which claimed at least 50 manufacturers, mainly SMEs, according to the Manufacturers Association of Nigeria (MAN)

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GREIF NIGERIA PLC Apapa, Nigeria

ANNUAL REPORT AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2019

GREIF NIGERIA PLC REPORT OF THE DIRECTORS, AUDITED FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENT AND OTHER NATIONAL DISCLOSURES FOR THE YEAR ENDED 31 OCTOBER 2019

CONTENTS PAGE

Directors, Professional Advisers, etc. 3 Results at a Glance 4 Chairman’s Statement 5 Corporate Governance 7 Report of Directors 9 Statement of Directors’ Responsibilities 13 Report of the Audit Committee 14 Independent Auditors Report 15 Statement of Financial Position 18 Statement of Profit & Loss & Comprehensive Income 19 Statement of Changes in Equity 20 Statement of Cash Flows 21 Notes to the Financial Statements 22 Other National Disclosure

-Statement of Value Added 66 -Five Years Financial Summary 67

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GREIF NIGERIA PLC FOR THE YEAR ENDED 31 OCTOBER 2019 DIRECTORS, PROFESSIONAL ADVISERS DIRECTORS: Mr. Adedayo Abiodun Olowoniyi - Chairman

Mr. David Onabajo - Managing Director Mr. Olukunle Adebayo Obadina Mr. Gaius Adetayo Omotayo Mr. Erik Maarten ‘t Sas - Dutch

COMPANY Marina Nominees Limited SECRETARY: Aret Adams House 233 Ikorodu Road,

Ilupeju, Lagos Tel: 0818-650-7567 Email: [email protected]

REGISTERED 1, Alapata Road. (Off Dockyard Road) OFFICE: Apapa, Lagos, Nigeria

Tel: +234 0 803 402 3903, +234 0 908 289 8377 Email: [email protected] Website: www.greif.com

AUDITORS: Ernst & Young

(Chartered Accountants) 10th & 13th Floor, UBA House 57 Marina, Lagos. Tel: +234 1 4630 479-80

PRINCIPAL United Bank for Africa Plc BANKERS:

REGISTRARS All Crown Registrars Limited AND TRANSFER 190 Ikorodu Road, Onipanu Bus Stop, OFFICE: Shomolu, Lagos,

P.M.B 12884, Marina, Lagos Email: aallcrownregistrarsltd.com AUDIT: Mr. David Oguntoye COMMITTEE Alhaji Kolawole Saka

Mr. G. A. Omotayo Mr. Erik Maarten ‘t Sas Mr. O. A Obadina Elder Lady A.A Shoewu, JP

mailto:[email protected]

mailto:[email protected]

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GREIF NIGERIA PLC RESULTS AT A GLANCE FOR THE YEAR ENDED 31 OCTOBER 2019

31-Oct 31-Oct

2019 2018 % change

N’000 N’000 incr/(decr)

Revenue 90,517 534,611 -83%

====== ====== Cost of Sales (269,359) (649,287) -59%

Loss before taxation (311,537) (245,229) -27%

Taxation (695) (17,360) -96%

Loss for the year (312,232) (262,589) -19%

====== =======

At Year End

Paid-up share capital - N'000 21,320 21,320 0%

===== ===== Shareholders’ funds - N'000 (213,397) 98,835 -316%

====== ===== Total No. of Shares - '000 42,640 42,640

Per –Share data

Loss per share (732) Kobo

(616) Kobo

-19%

Net assets per share (500) Kobo (232) Kobo -316%

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GREIF NIGERIA PLC CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2019

Distinguished Shareholders, members of the Board of Directors and the general public, I hereby present to you the Annual Report and Accounts of Greif Nigeria Plc. for the financial year ended 31 October 2019.

BUSINESS ENVIRONMENT

For Nigeria, 2019 being an election year made business to kick off rather slowly. According to National Bureau of Statistics Nigeria Economic Update (Issue 35), Nigeria’s economy performed poorly and witnessed a second consecutive quarter of weakened growth as real GDP slowed to a year-on-year growth rate of 1.94% in the second quarter of 2019. The rate is lower than the revised 2.1% growth rate reported for the previous quarter (2019Q1) and particularly underlines slow paced growth in the non-oil sector. While the oil sector leveraged on oil price rebounds and expanded by 6.61 percentage points to record a growth rate of 5.15% (from -1.46%), the non-oil sector slowed to 1.64%, declining from 2.47% posted in the last quarter

The trend in the non-oil sector revealed the suboptimal growth state of two major sub-sectors – agriculture and manufacturing. Agriculture subsector fell significantly from 3.17% to 1.79% while the manufacturing sector entered the negative growth rate zone (-0.13%) and contributed less to GDP QOQ (9.1%). The performance of the non-oil sectors continued to be continually undermined by systemic issues including the lack of large-scale mechanization, inadequate backward and forward integration with local industries, and poor standardization of products.

It would be beneficial for the government to create an environment that encourages private sector partnerships and public-private partnership for upscaling production, particularly in agriculture and manufacturing sectors. Regulatory agencies such as Standards Organization of Nigeria (SON) also need to deepen their efforts towards ensuring better quality and standardization of products to boost Nigeria’s domestic sales and exports.

OPERATING INDUSTRY

The poor development of businesses in Nigeria has led to ripple impacts on the Nigerian economy. Low job creation, rising unemployment, rising youth vices and weakening consumer demand are some of the obvious impacts.

A number of manufacturing companies have shut down because they cannot have access to annealed cold rolled—their major raw material— from Western Metal Products Company Limited (WEMPCO) Group, the only company authorized to produce the input.

Right from the government of Good luck Jonathan, Wempco has been the only company allowed to produce annealed cold-rolled steel and supply to other downstream firms which use it to make aluminium products and wheel barrows. But for a long time, the company has been unable to produce the steel and is even accused of importing the product.

The inconsistence in government policy as new government takes over has adversely affected Greif Nigeria Plc negatively being the leading drum manufacturer in Nigeria.

It is also important to mention that cold-rolled steel is one of the items on the Central Bank of Nigeria’s list of 41 items banned from accessing foreign exchange since 2016, this has impacted negatively on our business operation in Nigeria

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GREIF NIGERIA PLC CHAIRMAN’S STATEMENT-cont’d FOR THE YEAR ENDED 31 OCTOBER 2019

Other industrial steel company have closed business since this policy was introduced such as Federated Steel from China, Universal Steel (Iron Ore maker), Industrial And Farm Equipment Company just to mention a few.

Although Nigeria exited recession in 2017, which claimed at least 50 manufacturers, mainly SMEs, according to the Manufacturers Association of Nigeria (MAN). Much of the problem was caused by poor access to dollars to import inputs. Many companies in Nigeria cannot compete with cheap Chinese steel. There is also low patronage by Construction players and government contractors.

Investor Like Greif Nigeria Plc has been faced with various issues such as multiple taxation, hurdles by government agencies and poor infrastructure and ineffective port operation.

With regards to poor business environment that have confronted us and impacted our business operations negatively, we have been compelled to close our manufacturing facilities in Apapa since January, 2019, having also closed other division in Koko Delta and Kaduna: hoping the business environment will become stable.

Having considered our strategic priorities, Greif’s sustainability strategies support our fundamental vision of, in industrial packaging, be the best performing customer service company in the world and our commitment to conducting business The Greif Way. We have decided to exit Nigeria business environment having evaluated all the variable. OPERATING RESULTS

The Company achieved a loss of N90.517million for the year under review, a decrease of 83% over the prior year figure of N534.611Million. Total comprehensive loss in 2019 was N263m against N262m Loss in the prior year. DIVIDEND

The Board did not recommend any dividend. GENERAL OUTLOOK

Following his victory at the polls in Feb-19, President Buhari surprisingly re-appointed the CBN governor for another 5-year term, the first time a CBN governor would be returned for a second term since 1999. It was expected that the change in leadership of CBN could bring about some structural changes in the economy, with three key domestic factors which observer expect to play out in the year.

As at Jun-19, two of these factors have materialized. Notably, Nigeria’s 2019 general election did not pull any surprise, President Muhammadu Buhari defeated his major challenger, Alhaji Atiku Abubakar of the PDP by 15.1million votes to 11.3million votes.

Additionally, the re-appointment was the first key strategic economic decision made by President Buhari following his re-election in Feb-19.While political uncertainty may be out of the way, economic uncertainties remain elevated. Yes, continuity in government and an extension of the tenure of the CBN Leadership suggests stability in the policy framework of the economy over the next 4 to 5 years. Nevertheless, concerns about the viability of the current macroeconomic framework are yet to be addressed.

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GREIF NIGERIA PLC CHAIRMAN’S STATEMENT - Contd FOR THE YEAR ENDED 31 OCTOBER 2019

In the mind of various observers, investors and stakeholders, the biggest question on their minds relates to whether the government’s 2-fold subsidy program on foreign exchange and energy prices will continue despite sustained underperformance of government revenue against budget benchmarks, rising debt profile and fiscal crisis in most of the 36 States of the federation. Clearly, there is a need to strategically re-align fiscal policy to drive long term growth and development given that macroeconomic outcomes remain vulnerable to external and domestic shocks.

Economic analyst are of the views that Nigeria’s short-term growth outlook will be dependent on:

1. Policy Uncertainties: Policy uncertainties will remain one of the biggest concerns for investors in H2-19. This position is buttressed by several factors. For instance, President Buhari is unlikely to form his cabinet until the end of Q3-19, if the experience from 2015 is anything to go by. This is because nomination must come from the 36 States in the name of the “Federal Character” clause, then go through Presidential consideration before a final screening by the Senate. This is likely to slow investment planning as important decision in the strategic sectors of the economy as well as policy formulation across the sectors, have to wait for the ministers to settle in.

2. Weak macroeconomic framework: In the last 4/5 years, the IMF and other stakeholders have insisted that the macroeconomic framework in Nigeria is too weak to spur the required growth. Majorly, this is captured in the multiple exchange rates regime, distortionary quasi-fiscal activities, inadequate fiscal consolidation efforts, and the reluctance to overhaul the 2-fold subsidy program in the currency and energy markets, despite low revenue mobilization. This concern is also reflected in the policy agenda of Governor Emefiele for the next 5 years. According to the governor, the overarching objective of his administration is to achieve a double-digit GDP growth, single digit inflation rate, lower unemployment rate, and a stable exchange rate.

To drive high single or double-digit GDP growth and check double-digit inflation rate, economic policies must address poor revenue mobilization, rising debt profile, petrol price subsidy, low foreign direct investment, booming population, high unemployment rate, power sector crisis, port congestion, corruption, and insecurity.

COMPANY OUTLOOK

The trend that started in 2019 that necessitated suspension of manufacturing operation in January, in our Apapa, Nigeria has not abated in first quarter of 2019 .However, the board and management adopted various strategies to review the business closure decision. Some of our approaches include conversion cost reduction, marginal product price increase with engagement with our customers bulk raw material supply in order to reduce production cost, plant upgrading and also obtaining UN certification for our product in order to be more competitive but this has not yield the desired outcome. Therefore, Greif Nigeria cannot continue to operate below operating costs, selling our product below direct material. Since, the operating business environment has become very harsh, particularly to player in our industry and with far reaching economic and financial implications. Without prejudice to future Changes in government policies, we do not have any immediate plans to resuscitate manufacturing operations in the context of the extant external business environments. In Nigeria ___________________ Adedayo Olowoniyi Chairman 24th January 2020

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GREIF NIGERIA PLC CORPORATE GOVERNANCE FOR THE YEAR ENDED 31 OCTOBER 2019 INTRODUCTION

Greif Nigeria Plc recognizes the importance of good corporate governance as a means of sustaining viability of the business in the long term, and further believes that the attainment of business objectives is directly aligned to good corporate behavior. In the conduct of its business, Greif Nigeria has sought to comply with all statutory requirements, adopted tried and proven best practices to protect the environment and its employees, and strove to enhance shareholder value in the process. Greif Nigeria adopts both medium and long term growth strategies, and allocates resources in order to guarantee the creation of wealth. Greif Nigeria promotes and recognizes excellence through its employee development programmes. The Company has put in place systems of internal controls in order to safeguard the interests of shareholders and stakeholders and ensure the reliability of its records. As indicated in the notes to the financial statements, the business adopts standard accounting practices to facilitate transparency in the disclosure of information and to give assurance to the reliability of the financial statements. Even though we have seized operation in the last one year, we have kept all records and reported prompt to the stock exchange without any infraction. LEGAL STRUCTURE OF GREIF NIGERIA PLC

Greif Nigeria Plc ownership structure is as follows: Greif International Holding B.V. The Netherlands - 51% The Van Leer Nigerian Education Trust - 23% Other Nigerian Citizens & Associations - 26% BOARD OF DIRECTORS

The responsibility of good corporate governance is placed on the Board of Directors and the Management Team. The Board of Directors is highly qualified and experienced in their professional areas of expertise. As at 31 October 2019, the Board had one full time Executive Director - the Managing Director of the company. The Board also has three other members who are non-Executive Directors, one of whom is the Chairman of the Board and the Greif group Business Regional Manager for Sub Sahara Africa with oversight responsibility for Greif Nigeria management team. The Board meets regularly to deliberate on policy matters, corporate strategy and implementation, review Company performance, operations, finances and set standards for ethical conduct of the Company’s business, amongst other critical activities. The Board met twice during the year under review and the attendance is presented in the table below:

P = Present A = Absent

No.

Names of Directors

Dates of Board Meeting

27/03/2019 18/06/2019

1. Mr. Adedayo Olowoniyi – Chairman P P

2. Mr. David Olufemi Onabajo – Managing Director P P

3. Mr. Erik Maarten ‘t Sas P P

4. Mr. Gaius A. Omotayo A A

5 Mr. O. A. Obadina A A

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GREIF NIGERIA PLC CORPORATE GOVERNANCE Cont’d FOR THE YEAR ENDED 31 OCTOBER 2019 THE AUDIT COMMITTEE

As at 31 October 2019, the Audit Committee consisted of six (6) members, three of whom are members of the Board of Directors and the other three members being Independent Shareholders. The Audit Committee is chaired by an Independent Shareholder member. The committee meets to review the adequacy of the internal and external audit plan, to receive and deliberate on the report of the external auditors, to review progress on recommendations made in both the internal and external audit reports, to review the adequacy of internal control systems and the degree of business compliance with laid down internal policies, laws, code of business principles and any other relevant regulatory framework. The Committee met twice during the year under review and the attendance is presented in the table below:

No. Names of Audit Committee Dates of Audit Committee Meeting

Members 28/01/2019 24/10/2019

1. Mr. D.O. Oguntoye – Chairman P P

2. Elder Lady A. A. Shoewu, JP P P

3. Alhaji K. A. Saka P P

4. Mr. Erik Maarten ‘t Sas R P

5. Mr. O. A. Obadina A A

6. Mr. Gaius A. Omotayo A A

P = Present A = Absent R = Represented

THE MANAGEMENT TEAM

The Management Team consists of six full time managers of the Company which include the Managing Director and five heads of functions namely Finance, Marketing, Production, Maintenance, and Human Resources. The Management team meets regularly to review the performance of the company and assess progress against the achievement of laid down objectives. It also reviews programmes and strategies, and assigns responsibilities and resources for achievement of set goals. The management team has been dissolved since the business stopped manufacturing and sales in January 2019.Two member of the management team were placed on redundancy in February, 2019 while the last two were also affected in March. Leaving the company with three employee: Managing Director, Human Resource Business Partner and Accountant who coordinates our finance department with supervisory support from external Financial Consultant, who act as the Chief Finance Officer. CODE OF BUSINESS PRINCIPLES

Greif has a documented code of business principles to guide all employees and business partners in the discharge of their duties all over the world, wherever Greif subsidiaries operate. Greif Nigeria as a member of the Greif Group of companies, subscribes to this code. The code sets the standard of professionalism and degree of integrity required for business operations. Among other things, the code covers the following areas: compliance with the law, conflicts of interest, public activities, environmental management, diversity in the workplace, accuracy and reliability of financial reporting, related and interested party transactions, etc. It also covers the procedure for handling breaches and instances of non-compliance and whistle blowing

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 OCTOBER 2019

The company has adopted a code of conduct regarding securities transactions by its directors and other interested parties in accordance with Nigerian Stock Exchange rules governing transactions with related parties or interested parties and Greif group code of conduct. Specific enquiry of all Directors has been made on compliance or otherwise with the listing rules and in the company’s code of conduct regarding securities transactions by the Directors. There was no known non-compliance by the Directors at the time of reporting The Directors hereby submit their report together with the audited financial statements for the year ended 31 October 2019. PRINCIPAL ACTIVITIES

The principal activities of the Company during the year continued to be the manufacturing and marketing of metal drums. But this principal activities was terminated at the end of first quarter (January 2019), hence due to unfavorable business environment in the drum manufacturing industry. STATE OF AFFAIRS

In the opinion of the Directors, the company can continue operate the business below operating costs which will continue to erode shareholder funds. Hence, disengagement of redundant employees which account for about 15, one staff retired in January leaving only three employee to keep records and implement business closure plan. RESULT FOR THE YEAR 2019 2018

N’000 N’000 Revenue 90,517 534,611 ===== ====== Loss before taxation (311,537) (245,229) Taxation (695) (17,360) ----------- --------- Loss for the year (312,232) (262,589) ====== ===== DIVIDEND The Directors did not recommend a dividend for approval at the Annual General Meeting.

EVENTS AFTER REPORTING PERIOD

At the company’s Extra-Ordinary General meeting held on 23rd January 2020, the Shareholders were of the opinion that the company should be repositioned and go into the production and distribution of plastic drums. The Company has commenced the process of changing its status from being a listed company to a limited liability company.

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DIRECTORS

The names of the Directors at the date of this report and of those who have held office during the year are as follows: Mr. Adedayo Abiodun Olowoniyi - Chairman Mr. David Onabajo - Managing Director Mr. Olukunle A. Obadina Mr. Gaius A. Omotayo Mr. Erik Maarten ’t Sas - Dutch DIRECTORS’ INTERESTS IN CONTRACTS None of the Directors has notified the Company for the purpose of section 277 of the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria 2004, of their direct or indirect interest in contracts or proposed contracts with the Company during the year. RECORD OF DIRECTORS’ ATTENDANCE AT BOARD MEETINGS

In accordance with section 258 (2) of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004, the record of the Directors’ attendance at Director’s meetings during 2018/2019 is available for inspection at the Annual General Meeting. DIRECTORS’ SHAREHOLDINGS

The Register of Directors’ interests in the share capital of the Company is available 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 them for the purposes of sections 275 and 276 of Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria 2004, and the listing requirements of the Nigerian Stock Exchange are as follows: Number of Shares as at October 31 October 31 2019 2018 Mr. G.A. Omotayo 115,133 115,133 Mr. O.A. Obadina 72,333 72,333

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 OCTOBER 2019 SUBSTANTIAL INTEREST IN SHARES The shares of the Company are beneficially held as follows:

Number of shares as at 31 October, % 31 October, % 2019 2018

Greif International Holding B.V. The Netherlands 21,746,400 21,746,400 51 The Van Leer Nigerian Education Trust 9,807,200 9,807,200 23 Other Nigerian Citizens & Associations 11,086,400 11,086,400 26 -------------- ---- -------------- ----- 42,640,000 42,640,000 100 ======== === ======== == No individual shareholder other than Greif International Holdings B.V., and The Van Leer Nigerian Education Trust held more than 5% of the issued share capital of the Company as at 31 October 2019. SHAREHOLDER INFORMATION Analysis of shareholding as at 31 October, 2019

Range No. of

Shareholders Holder's

% Holders

Cum Units Units%

Units Cum

1 - 100 215 8.60% 215 14,895 0.03% 14895

101 - 1,000 1,410 56.42% 1,625 707,838 1.66% 722,733

1,001 - 10,000 763 30.53% 2,388 2,293,296 5.38% 3,016,029

10,001 - 100,000 101 4.04% 2,489 3,413,115 8.00% 6,429,144

100,001 - 1,000,000 16 0.64% 2,505 3,554,095 8.34% 9,983,239

1,000,001 - 99,999,999 3 0.12% 2,508 32,656,761 76.59% 42,640,000

Grand Total 2,508 100.36% 42,640,000 100.00%

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History of Share Capital

As at 31 October, 2019 the called up and fully paid capital of the Company was N 21,320,000 divided into 42,640,000 shares of 50 kobo each As at 31 October, 2019 the called up and fully paid capital of the Company was N 21,320,000 divided into 42,640,000 shares of 50 kobo each SUPPLIERS

The company's significant overseas suppliers are ArcelorMittal International, Greif Shanghai, China, Wuxi Jiushun Steel, China and Proseal India. DISTRIBUTORS

The company has no distributors. All products are sold and delivered by the Company directly to the consumers.

PROPERTY, PLANT AND EQUIPMENT Movements in Property, Plant and Equipment during the year are shown in Note 7 to the financial statements. In the opinion of the Directors, the market value of the Company's Property, Plant and Equipment is not lower than the value shown in the audited financial statements. CHARITABLE GIFTS AND DONATIONS

The company did not make any donation in 2019 (2018: N485,000)

Associations 31October 2019 31 October 2018

1. So-Said Charity Home for the Safety of the Insane and Destitute

- 485,000.

- 485,000

DATE № of

Shares

Authorized N Description

21st August, 1970 100,000 200,000 N200,000 divided into 100,000 shares of N2.00 each

24th November, 1970 150,000 300,000 N300,000 divided into 150,000 shares of N2.00 each

28th September, 1972 200,000 400,000 N400,000 divided into 200,000 shares of N2.00 each

29th September, 1976 500,000 1,000,000 N1,000,000 divided into 500,000 shares of N2.00 each

8th October, 1976 1,000,000 2,000,000 N2,000,000 divided into 1,000,000 shares of N2.00 each

30th November, 1977 1,500,000 3,000,000 N 3,000,000 divided into 1,500,000 shares of N2.00 each

8th February, 1979 6,000,000 3,000,000

Each of Existing 1,500,000 shares of N 2.00 each in the capital of the Company was sub-divided into four ordinary shares of 50 kobo each.

8th February, 1979 9,000,000 4,500,000 N 4,500,000 divided into 9,000,000 ordinary shares of 50 kobo each

2nd December, 1980 14,000,000 7,000,000 N 7,000,000 divided into 14,000,000 ordinary shares of 50 kobo each

31st July, 1990 30,000,000 15,000,000 N 15,000,000 divided into 30,000,000 shares of 50 kobo each

7th July, 1992 60,000,000 30,000,000 N 30,000,000 divided into 60,000,000 shares of 50 kobo each

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS – Cont’d FOR THE YEAR ENDED 31 OCTOBER 2019 EMPLOYMENT OF PHYSICALLY-CHALLENGED PERSONS

The Company employed no physically-challenged person during the year. It is, however, the Company's policy to consider physically-challenged persons for employment if academically and medically qualified. HEALTH, SAFETY AND ENVIRONMENT

Health, safety and environmental regulations are applied within the Company's premises and employees are aware of existing regulations. The Company provides subsidy to all categories of employees for medical, transport, housing, etc. EMPLOYEES' INTEREST AND TRAINING

The Company is committed to keeping employees fully informed as far as possible, regarding the Company's performance and progress. The Company also seeks their views wherever practicable on matters, which particularly affect them as employees. Management, professional and technical expertise are the Company's major assets, and investment in developing such skills continues. The Company's expanding skill base has extended to a range of training provided and has broadened opportunities for career development within the organization. Incentive schemes designed to meet the circumstances of each individual are implemented wherever appropriate and some of these schemes include bonus, promotion, wage increase, etc. AUDITORS Ernst & Young, having expressed their willingness, will continue in office as the Company’s auditors in accordance with section 357(2) of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004. A resolution will be proposed authorizing the Directors to fix their remuneration. BY ORDER OF THE BOARD MARINA NOMINEES LIMITED FRC/2015/00000000001506 LAGOS, NIGERIA 31 January 2020

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GREIF NIGERIA PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS. FOR THE YEAR ENDED 31 OCTOBER 2019

The Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004, 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 responsibilities include ensuring that the company: a) 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 CAP C20 Laws of the Federation of Nigeria 2004;

b) Establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other

irregularities; and c) Prepares its financial statements using suitable accounting policies supported by reasonable and

prudent judgments and estimates, and are consistently applied. The Directors accept responsibility for the annual financial statements loss which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards issued by International Accounting Standards Board, Financial Reporting Council of Nigeria Act № 6, 2011 and the requirements of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004. 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 loss for the year ended 31 October 2019. 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. To the best of our knowledge and ability we report no contravention or violation of any regulatory requirement(s) during the year. At the company extra-ordinary general meeting held on 23rd January 2020, the company’s directors resolved that arrangements are in place to delist the company’s share from The Nigeria Stock Exchange as well as to liquidate the company in no distant future.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY: David Onabajo Gaius A. Omotayo Managing Director Director FRC/2018/IODN/00000018995 FRC/2014/IODN/00000009253

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GREIF NIGERIA PLC REPORT OF THE AUDIT COMMITTEE

TO THE MEMBERS OF GREIF NIGERIA PLC

FOR THE YEAR ENDED 31 OCTOBER 2019 In accordance with the provision of Section 359(6) of the Companies and Allied Matters Act CAP C20 Laws of Federation of Nigeria 2004, members of the Audit Committee of Greif Nigeria Plc report as follows:- We have exercised our statutory functions under section 359(6) of the Companies and Allied Matter, Act CAP C20 Laws of the Federation of Nigeria 2004, and we acknowledge the co-operation of the management and staff in the conduct of these responsibilities. We confirm that:

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 are in our opinion adequate c) The internal control system was in order d) The Independent Auditors’ Management Letter Comments were satisfactorily dealt with by

management. e) We have reviewed the audited financial statements prior to the board’s approval

MEMBERS OF THE AUDIT COMMITTEE

1. Mr. David O. Oguntoye, (Chairman) - Shareholders Representative 2. Mr. O. A. Obadina - Non-Executive Director 3. Mr. G.A.Omotayo - Non-Executive Director 4. Alhaji Kolawole Saka - Shareholders Representative

5. Mr. Erik Maarten ’t Sas - Non-Executive Director

6. Elder Lady A .Shoewu, JP - Shareholders Representative

------------------------------------ Mr. David O. OGUNTOYE FRC/2013/ANAN/00000002787 Chairman, Audit Committee 23rd January 2020

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GREIF NIGERIA PLC STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER 2019

Notes 31-Oct-19 31-Oct-18

Assets N’000 N’000 Non-Current Assets Property, plant and Equipment 7 29,250 93,848 Intangible Assets 8 135 4,583 Deferred taxation 15c - - -------- -------- Total Non-Current Assets 29,385 98,431 --------- ---------

Current Assets Inventories 9 8,350 63,874 Trade & Other Receivables 10 101,602 168,938 Prepayments 11 139 20,880 Cash at bank and in hand 12 34,066 123,608 ----------- ----------- Total Current Assets 144,157 377,300

---------- ---------- Total Assets 173,542 475,731

===== ===== Equity & Liabilities Equity 21,320 21,320 Retained earnings 13b (234,717) 77,515 ---------- ---------- Total Equity (213,397) 98,835

------------ -------- Current Liabilities Trade & other payables 17 386,244 376,896 Income Tax Payable 15b 695 - ---------- ---------- Total Current Liabilities 386,939 376,896

---------- ---------- Total Equity & Liabilities 173,542 475,731 ====== ======

_______________________ _____________________ __________________ Gaius A. Omotayo David Onabajo Bolaji O. Osho

Director Managing Director Chief Finance Officer

FRC/2014/IODN/00000009253 FRC/2018/IODN/00000018995 FRC/2014/ICAN/00000007531

These financial statements were approved by the Board of Directors on 24th January 2020.

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GREIF NIGERIA PLC STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 OCTOBER 2019

Note 31-Oct-19 31-Oct-18

N’000 N’000

Revenue 18 90,517 534,611

Cost of Sales 19.2 (269,359) (649,287)

------------ ------------

Gross loss (178,842) (114,676)

Other operating income 19.1 44,123 19,755

Selling and Marketing Costs 19.3 (671) (8,250)

General and Administrative Expenses 19.4 (180,502) (150,426)

------------ ------------

Operating loss (315,892) (253,597)

Taxation 21 4,355 8,368

---------- ----------

Loss before taxation (311,537) (245,229)

Tax Expense 15a (695) (17,360)

------------ ------------

Loss for the year (312,232) (262,589)

Other Comprehensive income; net of tax - -

----------- -----------

Total comprehensive loss; net of tax (312,232) (262,589)

======= =======

Total comprehensive income attributable to: Equity Holders of the Company (312,232) (262,589)

Earnings per share N N

Basic loss per share Loss earnings from operations 24 (732) (616)

Diluted loss per share (732) (616)

Loss from operations (732) (616)

See notes to the financial statements

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GREIF NIGERIA PLC STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 OCTOBER 2019

For the year ended 31 October 2019

Notes Share Capital Retained Earnings Total Equity

N’000 N’000 N’000

Balance as at 1 November 2018 21,320 77,515 98,835

Loss for year - (312,232) (312,232)

-------- ----------- ----------

21,320 (234,717) (213,397)

-------- ----------- ----------

Dividend Paid - - -

-------- ----------- ----------

Balance as at 31 October 2019 13b 21,320 (234,022) (212,702)

===== ===== =====

For the year ended 31 October 2018

Share Capital Retained Earnings Total Equity

N’000 N’000 N’000

Balance as at 1 November 2017 21,320 340,104 361,424

Profit for year - (262,589) (262,589)

-------- ----------- ----------

21,320 77,515 98,835

-------- ----------- ----------

Dividend Paid - - -

-------- ----------- ----------

Balance as at 31 October 2018 13b 21,320 77,515 98,835

===== ===== =====


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GREIF NIGERIA PLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 2019

Note 31-Oct-19 31-Oct-18

N’000 N’000

OPERATING ACTIVITIES Cash receipts from customers 222,710 649,344

Cash paid to suppliers and employees (316,617) (661,813)

----------- -----------

Cash used in operating activities 12a (93,897) (12,469)

Tax Paid 15b - (49,237)

---------- ----------

Net cash used in operating activities (93,897) (61,706)

INVESTING ACTIVITIES

Proceeds from sales of property and equipment - 7,984

Purchase of property, plant and equipment 7 - (695)

Interest received 21 4,355 8,368

-------- --------

Net cash provided by investing activities 4,355 15,657

---------- ----------

Net decrease in cash and cash equivalent (89,542) (46,049)

Cash and cash equivalent at the beginning of the year 123,608 169,657

---------- ----------

Cash and cash equivalent at the end of the year 12 34,066 123,608

===== ======


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GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2019

(1) REPORTING ENTITY

GREIF Nigeria Plc (the "Company") is a manufacturing company incorporated as a limited liability company under the Company Ordinance (CAP 38) with the name Metal Containers of West Africa Limited on 20 January 1940. The name was subsequently , by a special resolution on 4th July 1969, changed to Van Leer Containers (Nigeria) Limited. The Company became “Van Leer Containers (Nigeria) Plc” in line with the Companies and Allied Matters Act (CAP 20), Laws of the Federation of Nigeria 1990. The Company’s name was eventually changed to “Greif Nigeria Plc” by a special resolution on 12 th May 2004. The authorized share capital is allotted to Greif International Holdings B.V. Netherlands (51%), The Van Leer Nigerian Educational Trust (23%) and other Nigerian investors (26%).

The Company is primarily involved in the manufacturing and marketing of steel drums.

(2) BASIS OF PREPARATION

(2a) Statement of compliance

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Standards Board (IASB).

The financial statements comprise the statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows and the notes to the financial statements for the Company.

These financial statements were authorized by the Board of Directors on 31 January 2019 and there were no events subsequent to the year end. There is no material event after the reporting date which could have had a material effect on the state of affairs of the company as at 31 October 2019.

(2b) Functional and presentation currency

These financial statements are presented in Nigerian Naira, which is the Company’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated

(2c) Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date:.

(i) Inventory – Lower of cost and net realizable value (ii) Financial Instruments –Initially measured at fair value and subsequently at amortized cost (iii) Provision – Best estimate to settle the present obligations at the end of reporting period. (iv)

The accounting policies have been applied consistently throughout the period covered by the financial statements and comparative period.

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT-cont’d FOR THE YEAR ENDED 31 OCTOBER 2019

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(3) SIGNIFICANT ACCOUNTING POLICIES

(3a) Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation (se e below) and impairment losses. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Company recognises such parts as individual assets with specific useful lives and depreciates them accordingly.

The cost of self-constructed assets includes the cost of materials, direct labour and an appropriate proportion of directly attributable production overheads.

Where significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment in line with IAS 16 principle of componentization.

3a.i Subsequent costs

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associates with the item will flow to the company and the cost of the item can be reliably measured. Repairs and maintenance costs are recognized in the profit or loss as incurred i

3a.ii Depreciation

Depreciation is charged to the profit or loss (except where it is required for recognition in another asset, based on another IFRS Standard e.g. IAS 2) on a straight-line basis over the estimated useful lives of each significant part of an item of property, plant and equipment. Depreciation on leased assets is charged over the shorter of the lease term and their useful life.


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3a.ii Depreciation-continued The useful lives of the property, plant and equipment are as follows:

ASSET CLASS ECONOMIC USEFUL LIVES

Land NIL

Building - 20 – 30-Years

Equipment, Plant and Machinery - 5 – 15-Years

Motor vehicles - 3 – 5-Years

The residual values, useful economic lives and depreciation methods are reassessed annually and if expectations differ from earlier projections, the change is treated as a change in estimate in accordance with IAS 8. Assets under construction are not depreciated until they are available for use.

3a.iii Derecognition

An item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on de -recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in statement of profit or loss in the year the asset is de-recognised

3b. Intangible assets

3b.i Software

Software acquired by the Company is stated at cost less accumulated amortization (see below) and impairment losses.

Expenditure on internally generated goodwill and brands is recognised in the profit or loss as an expense as incurred.

3b.ii Amortization

Amortization is charged to the profit or loss on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Software assets are amortized from the date they are available for use and over the license period. .

Classes of intangible assets Useful lives

IT Software 3 years


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3c. Financial assets- Before 1 November 2018

3c.i Initial recognition and measurement

Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets.

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 are attributable to the acquisition of the financial asset.

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 commi ts to purchase or sell the asset.

3c.ii Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows. Financial assets within the Company include trade and other receivables and cash and short-term deposits.

3c.iii Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment losses. 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 in finance income in profit or loss. The company's financial assets that qualify as loans and receivables include trade receivables;VAT receivables,sundry receivables and cash and cash equivalent.

3c.iv Trade and other receivables

Trade and other receivables include trade receivables which are on trade terms and receivables from affiliated companies. Trade receivables are carried at original invoice amount less any allowance for impairment. When a trade receivable is determined to be uncollectible, it is written off firstly against any provision available and then to profit or loss..

Financial assets before I November 2018

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 November 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.

The Company applied IFRS 9 retrospectively, with an initial application date of 1 November 2018. The Company has not restated the comparative information, which continues to be reported under IAS 39. There is no material quantitative changes based on the adoption of IFRS 9 to the Company's receivables but the qualitative disclosures have been updated in line with the application of IFRS 9.


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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’ on the principal amount outstanding.

The assessment of the Company’s business model was made as of the date of initial application, 1 November 2018. The assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was made based o n 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 Group.

The following are the changes in the classification of the Company’s f inancial assets:

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 Group’s financial liabilities. In summary, upon adoption of IFRS 9, the Group had the following required or elected reclassifications as at 1 November 2018.

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 recognize an allowance for ECLs for all debt instruments not held at fair value through profit or loss.

Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the company.

The Company is exposed to credit risk from its operating activities primarily trade receivables and deposits with banks and other financial institution. The company has a credit control function that weekly monitors trade receivables and resolves credit related matters. Weekly collection report is also done at the Company level to the Chief Financial Officer.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. The Company has adopted a policy of only dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from defaults. The Credit Control Unit closely follows up with each customer and outstanding customer receivables are regularly monitored by the Unit. The requirement for impairment is analysed at each reporting date on an individual basis for all customers. The Company evaluates the concentration of risk with respect to trade receivables as Medium as customers consists of large and reputable oil companies that are subject to scrutiny by various regulatory


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bodies, local and international. The Company’s maximum exposure to credit risk for the components of the statement of financial position is its carrying amount.

Deposits with banks and other financial institutions

Credit risk from balances with banks and financial institutions is ma naged by the Company’s treasury department in accordance with the Company’s policy. Surplus funds are spread amongst reputable commercial banks and funds must be within treasury limits assigned to each of the counterparty. Counterparty treasury limits are reviewed by the Company’s Chief Financial Officer periodically and may be updated throughout the year subject to approval of the Company Managing Director. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through potential counterparty’s failure. The Company’s maximum exposure to credit risk for the components of the statement of financial position is its carrying amount.

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 or other forms of credit insurance). 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. T. The Company does not hold collateral as security. Expected credit loss measurement - other financial assets

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 recognized 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). The ECL is determined by projecting the Probability of default, Loss Given default and Exposure at default 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.


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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.

3c.v Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

- The rights to receive cash flows from the asset have expired

- 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, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Company’s continuing involvement in it. In such 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.

3c.vi Impairment of financial assets

The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only i f, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event 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 receivables or a group of receivables is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

3c.vii Financial assets carried at amortised cost

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 effective interest rate.


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3d Financial liabilities

Financial liabilities are classified, at initial recognition, or payables, as appropriate. These financial liabilities are recognised initially at fair value, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other payables,

3d.i Trade and other payables

Trade and other payables are obligations to pay for goods and services that have been acquired in the normal course of business. These amounts are classified as current because payment is expected in one year or less. Trade and other payables are initially recognised at fair value i.e. transaction cost less all discounts. Subsequent to initial recognition, they are measured at amortised cost using effective rate of interest. Normally they are due for payment within 12 -months from the reporting year end. In the event of a longer payment i.e. greater than 12-months such balances are discounted using the effective interest rate.

3d.ii Bank overdrafts

Bank overdrafts are initially recognised at fair value which is the proceeds received, net of directly attributable costs. These are subsequently measured at amortised cost using the effective interest rate method with finance costs being recognised in profit or loss and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Bank overdrafts are classified as interest -bearing loans and borrowings under current liabilities.

3d.iii Loans and borrowings

After initial recognition, interest bearing loans and borrowings are s ubsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when liabilities are derecognised as well as through the effective interest rate method (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 in finance costs in profit or loss.

3d.iv 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 a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

3d.v Offsetting of financial instruments Financial assets and financial liabilities are offset with the net amount reported in the statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and the intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.


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3e. Inventories

Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, les s the estimated costs to completion and of selling expenses.

The cost of inventories is based on the weighted average principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. The Company’s finished goods inventories cost includes an appropriate share of overheads based on normal operating capacity which were incurred in bringing the inventories to their present location and condition.

Costs incurred in bringing each product to its present location and conditions are accounted for as follows:

Raw materials: Purchase cost and weighted average cost basis

Materials Work-in-progress: On weighted average cost basis

Finished goods: Cost of direct materials, conversion costs and a proportion of manufacturing overheads based on normal operating capacity using the weighted average basis.

3f. Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the Statement of cash flow.

Greif Plc has chosen the policy of recognizing all interest received and dividend received under the ‘cash flow from investing activities’ in the Statement of cash flows. In a similar vein, interest paid and dividend paid shall be shown under ‘cash flow from financing activities’.

3g. Impairment of non-financial assets

3g.i Impairment review

The carrying amounts of the Company's assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit or loss.

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its 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.


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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.

Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the assets in the cash generating unit (since goodwill arises only on consolidation and the Company does not have any subsidiary or associate) in the unit on a pro rata basis. A cash-generating unit is the group of assets identified that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

The recoverable amount of assets or cash-generating units is the greater of their fair value less costs to sell and value in use. 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. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

3g.ii Conditions for reversals of impairments

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if there is objective evidence of impairment as a result of one or more events that has occurred since the initial recognition of the asset (an incurred loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

3h. Foreign currency transactions

Transactions in foreign currency are recorded initially in Nigerian Naira which is the functional and presentation currency at the rate of exchange ruling at the date of the transaction.

At each subsequent annual reporting date :

Foreign currency monetary amounts are reported using the closing rate

Non-monetary items carried at historical cost are reported using the exchange rate at the date of the transaction.

Exchange differences arising when monetary items are settled or when monetary items are translated at rates different from those at which they were translated when initially recognised or in previous financial statements are reported in profit or loss in the period

3i. Share capital

3i.i Share capital

Share capital is classified as equity if it is non-redeemable and any dividends are discretionary, or is redeemable but only at the Company's option. Dividends on share capital classified as equity are recognised as distributions within equity. Non-equity


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share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders or if dividend payments are not discretionary. Dividends thereon are recognised in profit or loss as a finance charge.

3i.ii Dividends

Dividends on non-equity shares are recognised as a liability and accounted for on an accruals basis. Equity dividends are recognised as a liability in the period in which they are declared (appropriately authorized and not at the discretion of the Company).

3j. Pension schemes

The Company operates a defined contributory staff pension scheme in accordance with the provisions of the Pension Reforms Act 2014. The Company and each employee contribute 10% and 8% of annual emoluments (Basic, Housing and Transport) respectively. Staff contribution to the scheme is funded through the payroll deductions while the Company’s contributions are charged to profit or loss.

Obligations for contributions to defined contribution pension plans are recogn ised as an employee benefit expense in profit or loss in the periods during which ser vices are rendered by employees. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Also the Company operates a defined end of service savings scheme wherein certain amounts are set aside monthly, charged to profit or loss and remitted to a fund manager to provide for lump sum payment to employee after the period of service. Only the amounts accrued and not yet transferred to the fund manager are recognised as liability at the end of every reporting period. The Company does not have any further obligation whatsoever after the monthly remittance. This scheme meets all the characteristics of defined contribution plan of IAS 19 – Employee Benefits

3k. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

3l. Provisions

A provision is recognised in the Statement of financial position when the Company has a present legal or constructive obligation as a result of a past event, it can be measured reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability .

3m. Revenue – Sales of goods- Before 1 November 2018

Revenue in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates.


35

Revenue is recognised when evidence exists in the form of delivery of, and delivery acknowledgment of goods to clients, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers. IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. IFRS 15 requires entities to exercise judgment, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures The Company adopted IFRS 15 using the modified retrospective method of adoption with the date of initial application of 1 November 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 November 2018. The cumulative effect of initially applying IFRS 15 is recognized 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 and related Interpretations. There is no material quantitative changes based on the adoption of IFRS 15 to the Company's revenue but the qualitative disclosures have been updated in line with the application of IFRS 15.

3n. Income tax

Income tax on the profit or loss for the year comprises current and deferred taxation. Income tax is recognised in the of profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable/(recoverable) on the taxable income/(loss) for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable/(receivable) in respect of previous years. Current tax includes income tax, education tax etc.

Deferred taxation is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred taxation provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates that are expected to apply when the temporary difference reverses, based on rates that have been enacted or substantively enacted at the reporting date.


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Deferred tax is not recognized from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred taxation asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred taxation assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

3o. Segment reporting

The Company has determined that, in accordance with IFRS 8 "Operating Segments" and based on its internal reporting framework and management structure, it is a single product entity with one reportable segment. Such determination is necessarily judgmental in its nature and has been determined by management in preparing the Financial Statements. However, the following entity wide disclosure are relevant:

3p. Earnings per share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held if any. The Company does not have any potential ordinary shares with dilutive effect at the reporting date.

3q. Changes in accounting policies and disclosures- After 1 November 2018

The company applied IFRS 15 and IFRS 9 for the first time. The nature and effect of the changes as a result of have an impact on the financial statements of the Company. The Company has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. IFRS 15 Revenue from Contracts with Customers IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers. IFRS 15 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. IFRS 15 requires entities to exercise judgment, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires extensive disclosures The Company adopted IFRS 15 using the modified retrospective method of adoption with the date of initial application of 1 November 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


37

Company elected to apply the standard to all contracts as at 1 November 2018. The cumulative effect of initially applying IFRS 15 is recognized 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 and related Interpretations. There is no material quantitative changes based on the adoption of IFRS 15 to the Company's revenue but the qualitative disclosures have been updated in line with the application of IFRS 15. 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 November 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting. The Company applied IFRS 9 retrospectively, with an initial application date of 1 November 2018. The Company has not restated the comparative information, which continues to be reported under IAS 39. There is no material quantitative changes based on the adoption of IFRS 9 to the Company's receivables but the qualitative disclosures have been updated in line with the application of IFRS 9. 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’ on the principal amount outstanding. The assessment of the Company’s business model was made as of the date of initial application, 1 November 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 Group. The following are the changes in the classification of the Company’s financial assets: 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 Group’s financial liabilities. In summary, upon adoption of IFRS 9, the Group had the following required or elected reclassifications as at 1 November 2018. 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 recognize an allowance for ECLs for all debt instruments not held at fair value through profit or loss. Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the company. The Company is exposed to credit risk from its operating activities primarily trade receivables and deposits with banks and other financial institution. The company has a credit control function that weekly monitors trade receivables and resolves credit related matters. Weekly collection report is also done at the Company level to the Chief Financial Officer.


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Trade receivables Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. The Company has adopted a policy of only dealing with creditworthy counterparties, as a means of mitigating the risk of financial loss from defaults. The Credit Control Unit closely follows up with each customer and outstanding customer receivables are regularly monitored by the Unit. The requirement for impairment is analysed at each reporting date on an individual basis for all customers. The Company evaluates the concentration of risk with respect to trade receivables as Medium as customers consists of large and reputable oil companies that are subject to scrutiny by various regulatory bodies, local and international. The Company’s maximum exposure to credit risk for the components of the statement of financial position is its carrying amount. Deposits with banks and other financial institutions

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Surplus funds are spread amongst reputable commercial banks and funds must be within treasury limits assigned to each of the counterparty. Counterparty treasury limits are reviewed by the Company’s Chief Financial Officer periodically and may be updated throughout the year subject to approval of the Company Managing Director. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through potential counterparty’s failure. The Company’s maximum exposure to credit risk for the components of the statement of financial position is its carrying amount. 3q Changes in accounting policies and disclosures – Continued Impact of application of IFRS 9 Financial instruments-continued 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 or other forms of credit insurance). 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. T. The Company does not hold collateral as security. Expected credit loss measurement - other financial assets

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 recognized 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). The ECL is determined by projecting the Probability of default, Loss Given default and Exposure at default 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


39

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. 4. Standards issued but not yet effective The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The company intends to adopt these standard, if applicable, when they become effective. 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 recognize 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 recognize 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 recognize 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. The company plans to apply IFRS 16 initially on 1 November 2018, using the modified retrospective approach. Therefore, the cumulative effect of adopting IFRS 16 will be recognized as an adjustment to the opening balance of retained earnings at 1 November 2018, with no restatement of comparative information.


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IFRS 17 Insurance Contracts In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new accounting standard for insurance contracts covering recognition and measurement, presentation and disclosure. Once effective, IFRS 17 will replace IFRS 4 Insurance Contracts (IFRS 4) that was 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 to 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, which are largely based on grandfathering previous local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of IFRS 17 is the general model, supplemented by: • A specific adaptation for contracts with direct participation features (the variable fee approach) • 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. 4. Standards issued but not yet effective – Continued 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, or does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The interpretation specifically addresses the following: . Whether an entity considers uncertain tax treatments separately . The assumptions an entity makes about the examination of tax treatments by taxation authorities . How an entity determines taxable profit (tax loss), tax bases, unused of tax losses, unused tax credits and tax rates . How an entity considers changes in facts and circumstances An entity must determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The interpretation is effective for annual reporting periods beginning 2019, but certain transition reliefs are available. The company will apply interpretation from its effective date. The company may need to establish processes and procedures to obtain information that is necessary to apply he 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.


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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. Amendments to IAS 19: Plan Amendment, Curtailment or Settlement

The amendments to IAS 19 address the accounting when a plan amendment, curtailment or settlement occurs 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: • 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 • 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. 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 retrospectively and are effective from 1 January 2019, with early application permitted. This amendment have no impact in the Company financial statement.


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Annual Improvements 2015-2017 Cycle (issued in December 2017) These improvement 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 are currently not applicable to 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 IFRS3. 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. 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. 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. These amendments are currently not applicable to the Company.

5. Significant accounting judgments, estimates and assumptions

The preparation of the financial statements require management to make judgments,

estimates and assumptions that affect the reported amounts of revenues, expenses,

assets and liabilities, and the disclosure of contingent liabilities, at the end of the

reporting period. However, uncertainty about these assumptions and estimates

could result in outcomes that require a material adjustment to the carrying amount

of the asset or liability affected in future periods.


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5a. Judgments

In the process of applying the Company’s accounting policies, management has

made the following judgments, which have the most significant effect on the

amounts recognised in the financial statements:

Accounts receivable

The allowance for doubtful accounts involves management judgment and review of

individual receivable balances based on an individual customer’s prior payment

record, current economic trends and analysis of historical bad debts of a similar type.

5a-i Estimates and assumptions

Going concern: The company ceased operation in January 2019 but the

management does not have a plan to liquidate in the nearest future and has

commenced the process of delisting the company from Nigerian stock exchange

and it is assiduously working to diversify into the production and distribution of

plastic drums instead of steel drum it used to produce until January 2019.

6 FINANCIAL RISK MANAGEMENT 6a Overview

The company has exposure to the following risk from its use of financial instruments:

Credit risk

Liquidity risk

Market risk

This note presents information about the GREIF Nigeria Plc’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these financial statements.

6b Risk management framework

The Board of Directors has overall responsibility for the establishment and overs ight of Greif Nigeria Plc’s risk management framework. Executive Management is responsible for developing and monitoring Greif Nigeria Plc’s risk management policies and reporting regularly to the Board of Directors on its activities.

The Company’s risk management policies are established to identify and analyze the risks faced by the business, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in the business environment. The Company, through management standards, procedures and training, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the business. The Audit Committee is assisted in its oversight role by the Management. Management undertakes


44

both regular and ad-hoc review of risk management controls and procedures, the results of which are reported to the Audit Committee of the Board of Directors and possible escalation to the Group designated officer in South Africa.

6c Credit risk

Credit risk is the risk of financial loss to GREIF Nigeria Plc if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the GREIF Nigeria Plc’s receivables from customers.

6c.i Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, Management considers the profile of individual customer, including the default risk of the industry and the specific antecedents of the customer and Management’s intrinsic knowledge of the customer. During the year ended 31 October 2019, approximately 98% (corresponding period 31 October 2018: 98%) of GREIF Plc’s revenue is attributable to sales transactions to the oil and gas sector of the Nigerian economy. Additionally, a particular customer accounted for about 40% of the Company’s sales on the average (October 2018 comparative 42%).

The Company has established a credit policy under which each new customer is analyzed individually for credit worthiness before the Company’s standard payment and delivery terms and conditions are offered. Management review includes external ratings, when available, and in some cases bank references. Credit purchase limits are established for each customer, which represents the maximum open amount without requiring approval from the Board of Directors; these limits are reviewed annually. Customers that fail to meet the Company’s benchmark credit worthiness may transact business on a cash-on-delivery basis.

More than 98% of GREIF Plc’s customers have been transacting with the company for over 10years, and no impairment loss has been recognised against these customers except for the ECL of IFRS 9 charged in 2019 financial year.

In monitoring customer credit risk, customers are grouped according to their credit characteristics. Trade receivables relate mainly to the Company’s end-user customers. The Company provides for doubtful debts, calculated at 30% of the amounts between

90days and 180days, and 100% of amounts over 180days in the age analysis, excluding

related party balances. In addition, Company establishes an allowance for

impairment that represents its estimate of incurred losses in respect of trade and other

receivables. The schedule below shows the schedule of trade and other receivables at

the end of the tagged reporting periods.

6d 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 practicable, that it

would always have sufficient liquidity to meet its maturing obligations when due, under both

normal and stressed conditions, without incurring unacceptable losses or risking damage to

the Company's reputation.


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Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry. In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

6d.i Maturity schedule for Financial Liabilities

The following are the contractual maturities of financial liabilities:

31-Oct-19

Due Within One Year

Due After One Year

Total

Financial Liabilities N’000 N’000 N’000

Trade Payables – Local - - 5,351 Trade Payables – Greif SA 325,717 - 324,612 Accrued Professional Fees 12,387 - 12,006 Other Accruals - - 3,520 -------------- ------------ --------------

338,104 - 345,489

====== ====== ====== 31-Oct-18

Due Within One Year

Due After One Year

Total

Financial Liabilities N'000 N'000 N'000

Trade Payables – Local 5,351 - 5,351 Trade Payables – Greif SA 324,612 - 324,612 Accrued Professional Fees 12,006 - 12,006 Other Accruals 3,520 - 3,520 -------------- ------------ --------------

345,489 - 345,489

====== ====== ======

The carrying amounts of trade and other payables for period ended October 31, 2019 and 2018

respectively approximate to their true fair values.


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6e Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates,

interest rates and equity prices will affect the Company’ income or the value of its

holdings of financial instruments. The objective of market risk management is to

manage and control market risk exposures within acceptable parameters, while

optimizing the return.

6f Currency risk

The Company is exposed to currency risk on purchases of raw materials that are

denominated in United States Dollars, or a currency other than the functional currency

of the Company. Confirmed letters of credit are opened for such offshore purchases and

official bids for Dollars are made at the Central Bank of Nigeria official rates.

Besides, the company is exposed to foreign exchange volatility on account of the group

loan. Such foreign currency denominated loans are revalued at the rate of exchange

ruling at the end of every reporting period, with exchange gains or/and losses

recognised in the profit or loss.

Below is the effect on profit & Equity of a +/-5% change in exchange rate:

Sensitivity Analysis

6g Interest rate and Equity price risk

The company is not exposed to interest rate risk and equity price risk at the end of 3 1 October

2019. 2018(Nil)

Description 31-Oct-19 31-Oct-18 N’000 N’000 Due to GSA US$ (895) (895) Due to Greif International US$ - - Due to Greif USA US$ - -

Dollar Denominated Bank US$ 601 13

Balance Due from GSA US$ - - Net Foreign Balances A US$ (294) (822) Closing rate at period-end B N/$ 362.280 362.637

Naira Equivalent of Net Foreign Balances C=AxB Naira (106,562) (319,869)

5% Change in Closing rate D N/$ 380.39 380.77 Naira Equivalent of change on Closing rate F=AxD Naira (111,890) (335,862) Net Effect of Change in Naira G=F-C +/- (5,328) (15,993) Net loss/profit for year H Naira (263,058) (257,730) Net Effect as % of (loss)/ profit I=G/H% %+/- (2.0%) (6.2%)


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7. PROPERTY, PLANT AND EQUIPMENT – ACQUISITION, DISPOSAL, DEPRECIATION.

31-Oct-19 31-Oct-18

PROPERTY, PLANT AND EQUIPMENT Cost

Accumulated Depreciation

Carrying Value Cost

Accumulated Depreciation

Carrying Value

N’000 N’000 N’000 N’000 N’000 N’000 Land & Building 47,677 18,427 29,250 47,677 17,205 30,472 Plant, Machinery & Equipment - - - 220,170 158,091 62,079 Motor Vehicles 6,050 6,050 - 11,784 10,487 1,297 Capital Work-in-progress - - - - - - --------- ---------- --------- --------- ---------- --------- Total 53,727 24,477 29,250 279,631 185,783 93,848 ===== ===== ===== ====== ===== =====

Land &

Building

Plant &

Machinery Motor Vehicles

Capital Work In

Progress Total

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

At 1 November 2018 50,557 243,102 14,831 5,959 314,449

Additions - 350 - 345 695

Disposal (101)- (13,146) (1,280) - (14,527)

Write Off (2,779) (16,440) (1,767) - (20,986)

Transfer - 6,304 - (6,304) -

--------- -------------- -------------- ------------ ------------------ 47,677 220,170 11,784 - 279,631

Additions - - -

Disposals - -- -

Transfers - -

Write off - (220,170) (5,734) (225,904)

----------- --------------- --------------- ------------ -----------------

At 31st October 2019 47,677 - 6,050 - 53,727

----------- --------------- --------------- ------------ -----------------

Depreciation

At 1 November 2018 17,387 160,869 12,235 - 190,491

Charge for the year 1,297 12,934 1,298 - 15,529

Disposal (88) (6,658) (1,279) - (8,025)

Write Off (1,391) (9,054) (1,767) (12,212)

-------- ----------- -------------- ------------ ----------------- 17,205 158,091 10,487 - 185,783

Charge for the year 1,222 2,434 1,151 - 4,807

Disposals -


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Transfers

Write Off (160,525) (5,588) (166,113)

--------- ------------- --------------- -------------

At 31 October 2019 18,427 - 6,050 - 24,477

---------- ------------- ---------------- ------------- ----------------

NET BOOK VALUE

At 31st October 2019 29,250 - - - 29,250

====== ======== ======== ====== ========

At 31st October 2018 30,472 62,079 1,297 - 93,848

====== ======== ======== ======= ========


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8. INTANGIBLE ASSETS

Greif Plc has Intangible Assets representing software with which the company processes its financial and operational transactions.

31-Oct-19 31-Oct-18

Software Software

N’000 N’000

Cost as at 1 November 18,316 18,316

Additions - -

--------- ---------

Cost as at 31 October 18,316 18,316

Amortization as at 1 November (13,733) (9,285)

Amortised During Year (4,448) (4,448)

--------- ---------

Amortization as at 31 October (18,181) (13,733)

As at 31 October 135 4,583

9. INVENTORIES

31-Oct-19 31-Oct-18

N'000 N'000

Raw Materials (Note 9a) 8,350 55,111

Work-in-Progress - 2,395

Finished Goods - 1,627

Goods-in-Transit - 4,741

--------- ---------

8,350 63,874

===== ====

The cost of inventory recognized as expense and included in cost of sales at 31 October 2019 amounted to N218.485million (31 October 2018: N477.984million).

9a Raw Materials 31-Oct-19 31-Oct-18

N'000 N'000

Raw Materials 8,350 55,111

--------- ---------

8,350 55,111 ===== =====

During the period ended 31 October 2019 there was no additional allowance for slow moving materials.(2018; Nil)


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10. TRADES AND OTHER RECEIVABLES

31-Oct-19 31-Oct-18

N'000 N'000

Trade receivables 4,917 77,385

Less Impairment (Note 10b) (4,917) (7,953)

---------- ------------

- 69,432

Value Added Tax Recoverable 101,602 94,918

Sundry Receivables - 4,588

--------- ---------

101,602 168,938

====== ======

Trade receivables are non-interest bearing and are generally on a term of 30 to 90 days. VAT receivable consists of amounts recoverable from FIRS in respect of 5% VAT deducted at source from our invoices and paid over to FIRS by our customers in the Oil marketing industry. No receivable is pledged as security for borrowings

10b. Impairment - Individually impaired

During the year trade receivables with an initial carrying value of N 7,753 were impaired and fully provided for as at 31 October 2019. See below for the movements in the allowance for impairment of receivables:

31-Oct-19 31-Oct-18

N’000 N’000

As at 1 November 7,753 994

Trade receivable impairment - 7,753

Recovered during the year (2,836) (994)

Written off as uncollectible during year - -

--------- ---------

As at 31 October 4,917 7,753

===== =====

11. PREPAYMENT 31-Oct-19 31-Oct-18

N’000 N’000

Advance to suppliers - 18,472

Employees advances - 1,146

Prepayment 139 1,262

--------- ---------

139 20,880

=== ===== Prepayment consists of amounts in respect of advance payment for imports on confirmed letters of credit, to local suppliers, prepaid employee payroll and other operational prepayments


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12. CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash balances and call deposits. The schedules below show the balances at the current period (and at the comparative period)

31-Oct-19 31-Oct-18

N’000 N’000

Cash in hand 308 87

Bank Balances 33,758 27,216

Short Term Bank Deposit - 96,305

--------- ---------

34,066 123,608

===== =====

Cash at banks earns interest based on daily bank deposit rates determined by the banks. These deposits have an average maturity of between 60-90 days. For the purposes of the Statement of cash flows, cash and cash equivalents include cash on hand and in banks. Cash and cash equivalents at the end of the reporting period as shown in the Statement of cash flows is same as in the Statement of financial position. 12a. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

31-Oct-19 31-Oct-18

N’000 N’000

Loss before taxation (311,537) (245,229)

Adjustment to reconcile net income to net cash provided: Impairment recovery (2,836)

Unrealised exchange loss 1,795

Depreciation of PPE 4,807 15,529

Amortization of Intangibles 4,448 4,448

Asset written off 59,791 8,774

Gain on disposal of assets - (1,483)

Interest received (4,355) (1,483)

Allowance for doubtful debt - 6,759

-------------- --------------

(247,887) (219,570)

Changes in Assets & Liabilities: Decrease in Inventories 55,524 118,252

Decrease in Receivables and Prepayment 90,913 88,218

Increase Payables and Accruals 7,553 631

-

(93,897) (12,469)

====== ======


52

13. SHARE CAPITAL AND RESERVES

No issue of additional shares was made during the year ended 31 October 2019 (no similar issue was made during the year ended 31 October 2018). Details of equity at the reporting date are as follows:

13a. Share Capital 31-Oct-19 31-Oct-18 Authorised: N’000 N’000

60,000,000 ordinary shares of 50kobo each 30,000 30,000 ===== ===== Called up and fully paid: N’000 N’000

42,640,000 ordinary shares of 50kobo each 21,320 21,320 ===== =====

13a.i Dividend

No dividend was proposed for the year ended 31 October 2019 (2018: Nil) - - 13b. Retained earnings

31-Oct-19 31-Oct-18

N’000 N’000

As at 1 November 77,515 340,104 --------- ---------

77,515 340,104

Loss for the year (312,232) (262,589) Dividend paid during the year - - ------------ --------- As at 31 October (234,717) 77,515 ====== =====

14 RELATED PARTIES’ DISCLOSURES

14a. Related Party Transactions with the Greif Group The shares of the Company are beneficially held as follows:

Description Shareholdings (%) Unit in shares

Greif International Holding B.V. The Netherlands 51 21,746,400 The Van Leer Nigerian Education Trust 23 9,807,200 Other Nigerian Citizens & 26 11,086,400

The Company enters into transactions with related parties and sister Companies within the Greif group in the course of its business. These transactions include, but are not limited to, technical advises, investment advisory services, IT related support, logistics support, personnel support and the purchase of certain production materials and spares. Amounts owed to and due from related parties are transaction based. No allowance s for doubtful debts has been made against amounts outstanding and no expenses have been recognised during the year in respect of bad or doubtful debts due from related parties.

The Company currently has no technical or management services agreement with Greif group in place.


53

14a. Related Party Transactions with the Greif Group- cont’d

Summary of Related Party Transactions with the Greif Group:

Years

Sales to related parties

Purchases from

related parties

Amount of intercompany

loans

Amounts owed by

related parties

Amounts owed to related parties

N’000 N’000 N’000 N’000 N’000 Greif International Holding B.V.

2019 - - - - -

the Netherlands 2018 - - - - -

Greif South Africa 2019 - - - - 325,717

2018 - - - - 324,612 Greif International USA 2019 - - - - - 2018 - - - - -

14a.i Due to Greif South Africa 31-Oct-19 31-Oct-18

N’000 N’000

Due To Greif South Africa (Note 14) 325,717 324,612

===== ===== The company has an intercompany trade payable balance of US$895,142 (2018: US$895,142) due to its sister company, Greif South Africa.

The Company enters into transactions with related parties and sister Companies within the Greif group in the course of its business. These transactions include, but are not limited to, technical advises, investment advisory services, IT related support, logistics support, personnel support and the purchase of certain production materials and spares. Amounts owed to and due from related parties are transaction based.

The receivable and payable 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

14b Related Party Transactions - Key Management Personnel Compensation

(14b.i) Key management compensation – Staff 31-Oct-19 31-Oct-18

N’000 N’000

Salaries and other short-term employment benefits 13,238 3,982 Management Incentive Program - - Pension Costs - Defined Contribution Scheme 1,168 328 End Of Service Savings Scheme - Defined Contribution - 337


54

-------- --------

14,401 4,647

-------- --------

Short term employee benefit 13,238 3,982 Post-employment benefit 1,163 665 -------- --------

14,401 4,647 ==== ====

(14b.ii) Key management compensation - Audit Committee shareholders representative

31-Oct-19 31-Oct-18

N’000 N’000

Sitting Allowance for the year 468 840 ------ -------

(14b.iii) Key management compensation - Directors 31-Oct-18 31-Oct-17

DIRECTORS’ EMOLUMENTS N’000 N’000

Fees – Chairman - 210 Fees - Other Directors 180 540 ------ ------

180 750 Emolument as non-executives - 60

Emolument as executives 15,743 8,078

------- ------- Total Directors Emoluments 15,923 8,888 ==== ====

Key management personnel includes executive Directors.


55

15 INCOME TAX EXPENSE

31-Oct-19 31-Oct-18 15a Profit and Loss: N’000 N’000 Company income tax provision 695 - Educational Tax provision - - Company Income Tax ( Note 15b) - - Under/(over) provision of income taxes - 262 Deferred Tax for period (Note 15c) 17,098 ---------- ---------- Income Tax Expense - 17,360 ====== ===== 15b Income tax payable 31-Oct-18 31-Oct-18 As at 1 November 2018 695 48,975 Current period charge (Note 15a) - - Under/(over) provision of income taxes - 262 Payment during period - (49,237) --------- --------- As at 31 October 2019 695 - === ===== 15c Deferred Tax N’000 N’000 Balance at 1 November 2018 - (17,098) Provision for the year (Note 15a) - - Reversal - 17,098 ---------- As at 31 October 2019 - - ====== ======

16a. Income tax reconciliation - IAS 12P.81c 31-Oct-19 31-Oct-18

N’000 N’000 Loss before income tax (311,537) (253,597) Tax thereon at 30% (2018: 30%) 93,461 760,791 Impact of disallowable expense for tax purpose - -

Utilization of previously recognised tax credit (93,461) (760,791) Tertiary education tax at 2% of assessable profit - - Effect of under/(over)-provision in prior year - 262 Minimum tax provision 695 -------- -------- Total income tax expense 695 262 ===== ==== Effective tax rate %deduction based on realization of these differences (0.22%) (0.11%) 16b. Deferred tax reconciliation - IAS 12P.81c N’000 N’000 Accelerated depreciation for tax purpose 4,354 23,733 Tax Losses (130,506) (59,570) Unrealised exchange losses (539) ---------- ----------

(126,691) (35,837) ====== =======


56

16c. Unrecgonised deferred tax assets As at reporting date, the company has deferred tax assets of N126 million (2018:N35 million)

mainly arising from unutilised capital allowances and unrelieved tax losses. This amount has not been recognised due to uncertainties regarding the amount and timing of future taxable profits against which this deferred tax asset would be available for utilisation.

17. TRADE AND OTHER PAYABLES 31-Oct-19 31-Oct-18

N’000 N’000

Trade Payables – Local - 5,351

Payables to related parties-Greif SA (Note 14a.i) 325,717 324,612

Payable to related party-Greif USA (Note 14a.ii) - -

Accrued professional fees 12,387 12,006

Other accruals - 3,520

--------- ---------

338,104 345,489

Dividend Unclaimed 21,004 13,004

ESB Staff Savings Scheme - 1,150

Accrued payroll benefits 9,580 679

Other taxes payable 17,556 16,574

Company tax payable 695

---------- ----------

386,939 376,896

===== =====

Terms and conditions of the above financial liabilities: • Trade payables are non-interest bearing and are normally settled on a 30-60 day terms • Other payables are non-interest bearing and have an average term of three months. It comprises of

VAT, WHT and PAYE • Accruals are liabilities to pay for goods or services that have been received or supplied but have not

been invoiced or formally agreed with the supplier. They have an average term of three months. • For terms and conditions with related parties, refer to Note 13 • The carrying amounts of trade and other payables for the year ended 31 October 2019 and 2018

respectively approximate to their fair values. 18 REVENUE

The analysis of Turnover which was all achieved in Nigeria by product Lines is as follows:

31-Oct-19 31-Oct-18

Product Lines N'000 N'000 Steel Drums 90,517 534,611

Timing of revenue recognition;

Services transferred over time - - Services transferred at a point in time 90,517 534,611

----------- ------------- Total revenue from contracts with customers 90,517 534,511 ====== ======


57

Geographical Market Outside Nigeria - 534,511 Within Nigeria 90,517 5 34,511 --------- ------------ Total revenue from contracts with customers 90,517 534,511 ====== ====== 19 COST OF SALES, SELLING/MARKETING EXPENSES, OTHER OPERATING EXPENSES

31-Oct-19 31-Oct-18

Items charged/(credited) in arriving at operating profit: N’000 N’000 Operating Expenses 450,532 807,963 19.1 Other Operating income: Gain on asset disposed - 1,482 Impairment recovery 2,836 Sales of scrap 80 2,694 Miscellaneous Income 41,207 Rent - 8,010 Services rendered to related party - 7,569 ---------- ---------- 44,123 19,755 ====== ====== 19.2 Cost of Sales Direct Material Cost 218,485 477,984 Direct Line Costs 16,880 52,638 General Administration Employees Benefits (Note 22b) 5,382 24,259 Indirect Factory Labor/employee benefits (Note 22b) 4,350 8,909 Depreciation on Property, Plant & Equipment 2,434 12,405 Indirect Factory/Production Costs 21,828 73,092 --------- --------- Total Cost of Sales 269,359 649,287 ====== ====== 19.3 Selling and Marketing Costs Publicity 526 40 Commercial Presents 145 8,210 ------ ------- Total Selling & Marketing Costs 671 8,250 ==== ====


58

19.4 General and Administrative expenses

General Administration Employees Benefits 64,390 39,032 Depreciation on Property, Plant & Equipment 2,373 3,124

Amortization of Intangible Assets 4,448 4,448

Assets written off 59,791 8,774

Auditors' Remuneration 6,000 6,000

Repairs and Maintenance 6,411 10,142

Personnel expenses 1,063 6,632

Travelling expenses 3,413 14,038

Director expenses 1,113 648

Insurance 1,836 2,185

Professional fees 10,957 11,769

Donation - 485

Bank charges 409 716

Subscription 968 1,906

Sundry IT expenses 8,793 12,857

Impairment of receivables - 6,759

Office expenses 2,675 6,663

Annual general Meeting expenses 3,961 2,360

Director fees 180 750

Exchange Loss 1,795 11,138 --------- --------- Total General and Administrative Expenses 180,502 150,426 ====== =====


59

20 COST CLASSIFICATION BY NATURE OF EXPENSES

31-Oct-19 31-Oct-18 N’000 N’000 Depreciation 4,805 15,529 Direct material 218,485 477,984 Employee benefits (Note 22a) 64,390 72,004 Amortization of Intangible Assets 4,448 4,448 Assets written off 59,791 8,774 Auditors Remuneration 6,000 6,000 Repairs & Maintenance 6,411 10,142 Factory/Production Expenses 48,441 125,926 Publicity and Advertisement 671 8,250

Personnel expenses 1,063 6,632 Travelling expenses 3,413 14,038 Director expenses 1,113 648 Insurance 1,836 2,185 Professional fees 10,957 11,769 Donation - 485 Bank charges 409 716 Subscription 968 1,906 Sundry IT expenses 8,793 12,857 Impairment of receivables 6,759 Office expenses 2,675 6,663 Annual General Meeting expenses 3,961 2,360 Director fees 180 750 Exchange Loss 1,795 11,138 ---------- ----------

450,532 807,963 ======= =======

31-Oct-19 31-Oct-18 N’000 N’000 21 INTEREST INCOME

Interest Income 4,355 8,368 ==== === This represents interest received on placement of excess funds in short term treasury deposits


60

22 EMPLOYEE BENEFITS

31-Oct-19 31-Oct-18

N’000 N’000 22a The following items are included within employee benefits expense: Short term employee benefits 69,292 61,568

Employee and Management Incentive Programs 2,388 1,528

Pension Costs - Defined Contribution Scheme 1,064 4,096

End Of Service Savings Scheme - Defined Contribution 1,378 4,811

-------- ---------

74,122 72,003 ==== =====

22b This is reflected in Profit and Loss accounts as follows:

Direct Labour/employee benefits (Note 19) 5,382 24,062

Indirect Factory Labor/employee benefits (Note 19) 4,350 8,909 General Administration Employees Benefits (Note 19) 64,390 39,032 --------- --------

74,122 72,003 ===== ====

22c Staff Categories and Number

Total full time employees at the Company as at 31-October-2019 and as compared to corresponding period in 2019 are as follows:

Category 31-Oct-19 31-Oct-18

Managerial 1 6

Senior Staff 2 6

Junior Staff - 10

---- ----

Total 3 22

=== == 23. CONTINGENT LIABILITY

The company had no known contingent liabilities as at the year ended 31-October-2019.


61

24. EARNINGS PER SHARE

31-Oct-19 31-Oct-18

Loss attributable to equity holders of the Company (N'000) (312,232)) (262,589)

Weighted average number of ordinary shares in issue ('000) 42,640 42,640

Basic loss per share (Kobo) (732) (616) Diluted loss per share (kobo) (732) (616) ====== ====

Basic (loss)/earnings per share are calculated by dividing the (loss)/profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. There were no potential ordinary shares outstanding as at 31-October-2019 (2018; Nil) diluted(loss)/ earnings per share are therefore the same as basic (loss) earnings per share.

25. Capital management

The directors consider that capital includes net debt, convertible preference shares and equity attributable to the equity holders of the parent.

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 October 2019 and 31 October 2018.

The Company monitors capital using a gearing ratio, which is total capital divided by net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables less cash and cash equivalents.

2019 2018 N'000 N'000 Trade and other payables (Note 17) 386,939 376,896 Less cash and short-term deposits (Note 12) (34,066) (123,608) ------------ ------------ Net debt 352,873 253,288 Equity (213,397) 98,835 ---------- ----------- Capital and net debt 139,476 352,123 ====== ====== Gearing ratio (%) 253 72 == ==

26. EVENTS AFTER REPORTING DATE At the company’s extra-ordinary general meeting held on 23rd January 2020 management has confirmed that it did not have a plan to liquidate the company in the nearest future and has commenced the process of delisting the company from Nigerian stock exchange and it is planning to diversify into the production and distribution of plastic drums instead of steel drum it used to produce until January 2019.

62

GREIF NIGERIA PLC STATEMENT OF VALUE ADDED FOR THE YEAR ENDED 31 OCTOBER 2019

31-Oct-19 % 31-Oct-18 %

N’000 N’000 Turnover 90,517 534,611

Bought in materials and duty- local (358,159) (708,440)

Bought in materials and duty- foreign (8,996) (7,543)

----------- -----------

(276,638) (181,372)

Other Income 48,478 28,123

----------- -----------

Value consumed (228,160) (153,249)

======= ======= Applied as follows:

To pay employees Salaries, Wages & Other Benefits 74,122 (32) 72,003 (47)

To government Taxation - 262 -

To providers of finance Interest Paid - - -

To provide for maintenance & expansion of business

Depreciation & Amortization 9,255 (4) 19,977 (13)

Deferred taxation 17,098 (11)

Loss for the year (311,537) 136 (262,589) 171

----------- -----------

(228,160) 100 (153,249) 100

====== ======

Value consumed represents the additional wealth, which the Company consumed by its own, and its employees' efforts. This statement shows the allocation of that wealth between employees, government, providers of finance, and that retained for future creation of more wealth.

GREIF NIGERIA PLC FIVE-YEAR FINANCIAL SUMMARY

63

GREIF NIGERIA PLC FOR THE YEAR ENDED 31 OCTOBER 2019 5-YEAR SUMMARISED IFRS FINANCIAL SUMMARY

AS AT: 31-Oct-19 31-Oct-18 31-Oct-17 31-Oct-16 31-Oct-15

N’000 N’000 N’000 N’000 N’000 TOTAL ASSETS Non-Current Assets 29,385 98,431 150,086 156,018 148,432 Current Assets 144,157 377,300 636,578 566,472 567,282 ----------- ----------- ---------- --------- ---------

173,542 475,731 786,664 722,490 715,714 ===== ===== ===== ===== =====

TOTAL EQUITY

Equity Share Capital 21,320 21,320 21,320 21,320 21,320 Retained Earnings (234,717) 77,515 340,104 316,264 314,742 ----------- ----------- ---------- --------- ---------

(213,397) 98,835 361,424 337,584 336,062 ===== ===== ===== ===== =====

NON-CURRENT LIABILITIES - - - 3,683 20,739 CURRENT LIABILITIES 386,939 376,896 425,230 381,223 358,913 ----------- ----------- ---------- --------- ---------

TOTAL EQUITY & LIABILITIES 173,542 475,731 786,664 722,490 715,713 ===== ===== ===== ===== =====

TURNOVER 90,517 534,611 1,405,218 999,150 805,370 ===== ===== ===== ===== ===== (Loss)/profit before tax (311,537) (245,229) 77,554 37,597 40,149 Taxation (695) (17,360) (28,130) (10,491) (15,525) ----------- ----------- ---------- --------- ---------

(Loss)/profit for the year (312,232) (262,589) 49,424 27,106 24,624 Other Comprehensive income - - - - - ----------- ----------- ---------- --------- ---------

Total comprehensive (loss)/income (312,232) (262,589) 49,424 27,106 24,624

====== ===== ===== ===== ===== Per Share Information Basic (loss)/earnings per share (732) (616) 116 64 58 Kobo

Net Assets per Share (500) 232 848 792 788 Kobo

Dividend Declared - - - 60 60 Kobo

Documents

GREIF NIGERIA PLC€¦ · Although Nigeria exited recession in 2017, which claimed at least 50 manufacturers, mainly SMEs, according to the Manufacturers Association of Nigeria (MAN)