The Company of Nigeria Report/AFS 2017 v20 - FINAL.… · closed for refurbishment in June 2009 and has yet to be re-opened. A modern casino was opened in December ... 10 May 2010

The Tourist Company of Nigeria Plc Annual Report

For the 18 month period ended 31 December 2017

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For the 18 months period ended 31 December 2017

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Company ProfileThe Tourist Company of Nigeria ("Company") was incorporated on 10 April 1964 as The Tourist Company ofNigeria Limited, at that stage wholly-owned by the Federal Government of Nigeria, to acquire the FederalPalace Hotel (“the Palace Hotel”). The Palace Hotel, built at the dawn of Nigeria’s independence in 1960, waspreviously owned by Victoria Beach Hotel Limited, a member of the AG Leventis group. The Company wasconverted to a public liability company on 20 April 1994, when it also assumed its present name.

The Palace Hotel was designed and built to a very high standard: it was to be, and indeed it was, the premierinternational hotel in the country at the time. It is worth noting that the celebration of Nigeria’s independencefrom the United Kingdom took place in the Hotel’s Independence Hall in 1960.

The 15 floor Suites Hotel (also known as the Towers) was built to coincide with the Summit of the Heads ofState of the African Union and the Festival of African Arts and Culture, held in Nigeria in 1977.

In 1992, Ikeja Hotel Plc, in association with another investor (collectively the “Ikeja Hotel Group”) acquiredThe Tourist Company of Nigeria Plc from the Federal Government. In 2009 and 2010, Sun InternationalLimited acquired a substantial shareholding in the Company, thereby becoming an equal shareholder with theIkeja Hotel Group of shareholders.

Following the acquisition of the Company from the Federal Government, a comprehensive and phasedrefurbishment of the Palace Hotel was undertaken and it was re-opened in July 2008. The Towers Hotel wasclosed for refurbishment in June 2009 and has yet to be re-opened. A modern casino was opened in December2009, a new banqueting facility in January 2010, and the Pool Club in September 2010.



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Financial highlights

₦’000 ₦’000

Major statement of financial position itemsNon-current assets 8,136,547 8,740,461 Current assets 1,771,332 1,805,879 Capital and reserves/Net liabilities 46Non-current liabilities 18,767,128 16,187,085 16Current liabilities 1,344,547 1,344,819 -

Net assets per share (kobo) 46

₦’000 ₦’000Major statement of profit or loss and other comprehensive income itemsRevenue 4,906,975 2,891,445 70Loss before taxationLoss for the periodLoss per share- basic (kobo)

Stock Exchange InformationStock exchange quotationIn Naira per share 3.50 3.34 5

Number of shares issued ('000) 2,246,437 2,246,437 -

Market capitalisation 7,862,530 7,503,100 5

31 December 2017 30 June 2016% Increase /

(Decrease)

(3,218,232)(143)

(3,218,232) (42) (5,547,091) (5,547,091)

(247)

18 monthsto 31

December 2017

12 monthsto 30

June 2016% Increase /

(Decrease)

(10,203,796)

(454) (311)

(6,985,564)

(7)(2)

(42)(42)



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Corporate information

Board of directors SolicitorsMr. Goodie M Ibru, OON - (Retired 17 May 2017) GM Ibru & CoMr. Yakubu A Disu (Resigned 7 July 2017) Circular Suite, 10th FloorChief Anthony Idigbe, SAN - Acting Chairman ** Federal Palace Towers HotelMr. Abatcha Bulama ** 6-8 Ahmadu Bello WayMr. Ufuoma Ibru ** Victoria IslandMr. Anthony M Leeming* (Resigned 15 May 2017) LagosMr. D Ramakhatela Mokhobo*Mr. T J David Kliegl * (Appointed 27 July 2017)Mr. Norman Basthdaw * ** Adepetun Caxton-Martins Agbor & SegunMr. Andrew G Johnston * ** 9th Floor, St Nicholas HouseDr. Alexander A Thompholous ** Catholic Mission Street

Lagos

Secretary and registered officePunuka Nominees LimitedInternational Law Centre RegistrarPlot 45 Oyibo Adjarho Street GTL Registrars LimitedOff Ayinde Akinmade Street 274 Murtala Muhammed WayOff Admiralty Way, YabaLekki Peninsula Phase 1 LagosLagos

Independent auditor Hotel and Casino OperatorsKPMG Professional Services Sun International Management LimitedKPMG Tower 6 Sandown Valley CrescentBishop Aboyade Cole Street SandtonVictoria Island Republic of South AfricaLagos

Members of the audit committee Principal bankerRepresenting the shareholders: Stanbic IBTC Bank PlcChief Victor C N Oyolu - Chairman Plot 1712Mr. Bolaji B Banjo Idejo StreetMr. Peter A Soares Victoria Island

Lagos

Representing the board of directors:Mr. Yakubu A Disu (Resigned 7 July 2017)Mr. D Ramakhatela Mokhobo*Mr. Abatcha Bulama **Dr. Alexander A Thompholous **

* South African** Appointed 22 August 2017



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Shareholder Information

HISTORY OF SHARE CAPITAL CHANGES

Date Increase Cumulative Increase Cumulative Consideration11 April 1964 200 200 200 200 Cash 8 July 1985 10,699,800 10,700,000 10,699,800 10,700,000 Cash 6 June 1991 16,920,000 27,620,000 16,920,000 27,620,000 Cash 14 November 1991 602,280 28,222,280 602,280 28,222,280 Cash 3 December 1993 471,777,720 500,000,000 452,703,720 480,926,000 Cash 31 May 2000 500,000,000 1,000,000,000 - 480,926,00018 June 2002 - 1,000,000,000 88,223,412 569,149,412 Cash 1 December 2008 1,000,000,000 2,000,000,000 - 569,149,41210 May 2010 - 2,000,000,000 554,071,324 1,123,220,736 Cash

Range of shareholdingNumber of

shareholders% of total

shareholdersTotal number of shares held

%shareholding

1 - 1,000 3,277 70.08 2,111,670 0.10 1,001 - 5,000 1,125 24.05 2,932,213 0.13 5,001 - 10,000 131 2.80 1,170,659 0.05 10,001 - 50,000 89 1.90 2,120,547 0.09 50,001 - 100,000 17 0.36 1,419,079 0.06 100,001 - 500,000 22 0.47 6,055,741 0.27 500,001 - 1,000,000 3 0.06 2,262,571 0.10 1,000,001 - and above 13 0.28 2,228,364,992 99.20

4,677 100.00 2,246,437,472 100.00

SHARE CAPITAL ANALYSIS AS AT 31 DECEMBER 2017

Authorised (Naira) Issued and fully paid



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Chairman's reportFor the period ended 31 December 2017

Operating environmentThe financial year under review is one of growth in comparison to the turmoil of the previous year asNigeria and the Tourist Company of Nigeria Plc (TCN) are relentlessly pulling out of a decliningeconomy and are making positive headway with the gradual resolution of the shareholders dispute whichis impacting positively on the business.

Nigeria’s economy is said to be gaining steam in its goal to recover from recession as a result of thedeclining oil prices. It has continued to show signs of recovery from the 2016 recession as stated in theAfrican economic outlook 2018 by the African Development Bank.

According to The Focus Economics Panel with regards to the Nigerian economic growth, though higheroil prices, recovering household demand and higher production will lift growth this year. Although therewill still be high inflation and a weak business climate will keep the recovery modest.

Inflation dropped from as high at 18.6% in 2016 to 15.4% 2017 which shows improvement in theeconomy.

General insecurities in the country such as Boko Haram insurgents whose activities have taken a backseat as at 2017 has helped give a positive outlook on the Nigerian economy but the emergence of theFulani herdsmen killings and with its gaining momentum has resulted in heightened risk aversions.

The country’s GDP growth was estimated at 0.8% in 2017, which was an increase from –1.5% in 2016.There is a projected growth of 2.1% in 2018 and 2.5% in 2019. This outlook is precipitated on higher oilprices and production, as well as stronger agricultural performance. GDP growth picked up pace in thethird quarter due to faster growth in the oil sector, however, the rest of the economy performed poorly.

The country’s external reserve as at the end of 2016 was below $20 billion dollars and as at 2017 was$39 billion dollars. The improvement in the external reserves shows the ability of the CBN to defend thenaira.

In 2016 there was volatility in the dollars which affected its liquidity but in 2017, the CBN introducedthe I&E FX Window for importers and exporters to ease the dollar liquidity which allows the exchangerate trade at the market determined price. This has aided in the stability of the foreign exchange.

The oil prices in 2017 made a rebound to an average of $52 per barrel (Brent crude) in 2017 and areprojected to reach $54 in 2018, this is an increase from the recorded $43 per barrel in 2016. There was anincrease in oil production from 1.45 million (One Million, four hundred and fifty thousand) barrels perday in the first quarter of 2017 to 2.03 million (Two Million and thirty Thousand) in the third quarter of2017 which was due to the de-escalation of hostilities in the delta region and this is expected to remain atthe same level in 2018 and 2019, in line with the Organization of the Petroleum Exporting Countriesproduction restrictions.



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Hospitality revenue increased 95.5% from the previous year due to higher room occupancy and improvedrates, and significantly improved food and beverage revenue. The improved hospitality revenue wasdirectly attributable to the long-term strategy of room rate adjustment and having competitively pricedproducts and services. The strategy was implemented in 2016 before gaining traction and resulting insignificant growth in hospitality revenue from the beginning of 2017. Consequently, hospitality grossprofit increased 108.5%.

Forensic Audit The firm of Akintola Williams Deloitte has been contracted by the Securities and Exchange Commissionto perform a forensic audit on the company with a specific focus on the Sun International acquisition ofTCN shares as well as “Ikeja Hotel Group” investment in TCN. It is our hope that the audit will settle theshareholders dispute which has significantly affected the company over the years. The forensic auditcommenced at the beginning of 2018 and is still ongoing.

Indirect costs increased by 79.3% despite strict cost controls, due to an increase in energy costs of126.6% caused by poor electricity supply from the EKEDC grid and the rapidly escalating diesel prices.

The Company incurred a comprehensive loss of ₦3.2 billion after interest and tax. The loss included anunrealised loss on shareholders loans of ₦1.3 billion as the loans are denominated in US Dollars.

Delisting of the company The Company received a notification from the Nigerian Stock Exchange (NSE) on 1 July 2015 of itsintention to delist the Company owing to TCN not complying with the free float requirements of theNSE.

Company PerformanceThe Company is reporting on the 18-month financial period ended 31 December 2017. Prior yearcomparatives are for the 12-month period ended 30 June 2016.

The Company’s revenue for the period ended 31 December 2017 increased by 69.7% to ₦4.9 billion,from the year ended 30 June 2016. The operating loss increased by 38.4% due to the prolongedrecession, increased spend on additional regulatory compliance, and the impact of higher costs caused bythe weakened Naira. The increased costs could not be passed on to our customers in view of theincreasingly aggressive competition and a smaller market. Strict cost controls remain enforced in alloperational departments.

The Company has two business segments, namely Hotel and Casino operations. The results of thesesegments are set out fully in the financial statements.

Casino revenue increased 42.3% in a competitive market and was affected by the macro factors affectingthe Nigerian economy. On a pro rata basis, the Casino experienced decreased revenue in both tables andslots games. The Casino operations contributed to the cash flows of the Company. Casino revenuehowever remains under pressure.



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Directors’ reportFor the period ended 31 December 2017

Legal form & principal activities

Principal activities

Change in accounting year end

Operating results for the periodThe Company’s results for the period are as follows:

₦’000 ₦’000Revenue 4,906,975 2,891,445 Loss before taxation (5,547,091)Total comprehensive income for the period (5,547,091)

Property, plant and equipment

Dividend

Retirement of directors by rotation

Substantial shareholdings

No. of shares %

Sun International Limited 1,108,138,647 49.33Associated Ventures International Limited 419,408,169 18.68Oma Investments Limited 405,614,547 18.06Ikeja Hotels Plc 273,529,085 12.18

The board of directors is pleased to present its report to the members of the Company, together with theaudited annual financial statements of the Company for the period ended 31 December 2017.

The Company was incorporated in Nigeria as a private limited liability company on 10 April 1964 and wasconverted to a public limited liability company on 20 April 1994.

The Company has not declared or paid any dividends for the period under review, and no dividend is proposed(2016: Nil).

In accordance with the articles of association of the Company, Mr. D Ramakhatela Mokhobo retires by rotationat the annual general meeting. The retiring director is eligible for re-election and has accordingly offeredhimself for re-election.

As at 31 December 2017, the following shareholders held more than 5% of the issued share capital of theCompany.

The principal activities of the Company are the operation of gaming and hospitality businesses.

New capital work in progress during the year amounted to ₦226 million (2016: ₦270 million). Completedcapital work in progress transferred to property, plant and equipment during the year totalled ₦234 million(2016: ₦246 million). Details of movements in the property, plant and equipment are shown in Note 11(a) tothe financial statements. The directors are of the view that the Company’s property, plant and equipment arevalued at amounts not lower than the recoverable amount.

12 months to 30

June 2016

18 months to 31

December 2017

By a resolution of the board of directors dated 16 March 2017, the company changed its financial accountingyear end from 30 June to 31 December. This change was required to align the financial accounting year end ofthe Company with the financial accounting year end of the majority shareholders. The financial statements forthe current period are prepared for 18 months from 1 July 2016 to 31 December 2017. Consequently, theamounts presented in the financial statements and related notes are not entirely comparable.

(3,218,232) (3,218,232)

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Directors’ interests in contracts

Directors’ interests in shares

Direct Indirect Direct IndirectMr. Goodie M Ibru, OON (Note 1) - 419,408,169 - 419,408,169 Mr. Yakubu A Disu 110,000 - 110,000 - Senator Felix O, Ibru, CON * - - 9,114,421 - Mr. Anthony M Leeming - - - - Mr. D Ramakhatela Mokhobo - - - - Chief Anthony Idigbe, SAN - - - - Mr. Abatcha Bulama 1,000 - - - Dr. Alexander A Thomopulos 25,000 - - - Mr. Ufuoma Ibru - - - - Mr. T J David Kliegl - - - - Mr. Norman Basthdaw - - - - Mr. Andrew G Johnston - - - - Note 1 – Held through Ikeja Hotel Plc and Associated Ventures International Limited.* Deceased 12 March 2016

Corporate governance

– Board of directors

Number of shares held

The direct and indirect interests of directors in the issued share capital of the Company, as recorded in theregister of members at year end, are as follows:

The Company continues to subscribe to the highest principles of good corporate governance. An outline of theCompany’s current corporate governance structure and practices is provided below:

The directors are responsible for the corporate governance of the Company.

The directors have a responsibility to ensure that proper accounting records are kept, and that the financialstatus of the Company is at all times disclosed with reasonable accuracy. The directors are responsible forthe preparation and fair presentation of these financial statements in accordance with InternationalFinancial Reporting Standards (IFRS) and in the manner required by the Companies and Allied MattersAct, CAP C20, Laws of the Federation of Nigeria,2004 and the Financial Reporting Council of NigeriaAct, 2011. In this regard, the responsibility of the directors includes: designing, implementing andmaintaining internal controls relevant to the preparation and fair presentation of financial statements thatare free from material misstatement, whether due to fraud or error, selecting and applying appropriateaccounting policies, and making accounting estimates that are reasonable in the circumstances.

The directors are also responsible for protecting the Company’s assets and taking reasonable steps forpreventing and detecting fraud and other malpractices with regard to the Company’s affairs.

Number of shares held31 December 2017 30 June 2016

Directors are required to disclose any interests they may have in contracts to be entered into by the Company,prior to the consideration of those proposed contracts by the board. The directors have notified the Company,for the purpose of Section 277 of the Companies and Allied Matters Act, CAP C20, Laws of the Federation ofNigeria 2004, of their interest in new contracts deliberated upon during the period under review.

Mr. D Ramakhatela Mokhobo, and Mr. Norman Basthdaw are directors of Sun International (South Africa)Limited with which the Company signed an operating management agreement, effective 1 October 2017. Thisagreement has been lodged with NOTAP for approval. Further information on directors’ interests in contracts entered into in the current and prior years is provided inNote 25 to the annual financial statements.

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Mr. Goodie M Ibru, OON - (Retired 17 May 2017)Mr. Yakubu A Disu (Resigned 7 July 2017)Chief Anthony Idigbe, SAN - Acting Chairman **Mr. Abatcha Bulama **Mr. Ufuoma Ibru **Dr. Alexander A Thomopulos **Mr. Anthony M Leeming* (Resigned 15 May 2017)Mr. D Ramakhatela Mokhobo *Mr. T J David Kliegl * (Appointed 27 July 2017)Mr. Norman Basthdaw * **Mr. Andrew G Johnston * *** South African** Appointed 22 August 2017

Name No. attendedMr. Goodie M Ibru, OON 2Mr. Yakubu A Disu 4Chief Anthony Idigbe, SAN 2Mr. Abatcha Bulama 2Mr. Ufuoma Ibru 2Dr. Alexander A Thomopulos 2Mr. Anthony M Leeming 2Mr. D Ramakhatela Mokhobo 6Mr. T J David Kliegl 2Mr. Norman Basthdaw 0Mr. Andrew G Johnston 0

– Audit committee

• Representing the Shareholders:Chief Victor C N Oyolu (Chairman)Mr. Bolaji O BanjoMr. Peter A Soares

The directors who served during the financial year and to the date of this report were:

The affairs of the Company are structured for management by a board of eight directors. As at the date ofthis report the board consisted of eight directors. The board meets regularly to decide on policy mattersand direct the affairs of the Company. During these meetings, the directors also review the Company’sperformance, operations and finances, and set standards for the ethical conduct of the Company’sbusiness.

The board met six times during the financial reporting period (on 19 September 2016, 5 December 2016,16 March 2017, 16 May 2017, 22 August 2017 and 13 December 2017). In accordance with Section258(2) of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004, therecord of directors’ attendance at board meetings held during the financial year under review is set outbelow:

In accordance with Section 359(4) of the Companies and Allied Matters Act, CAP C20, Laws of theFederation of Nigeria 2004, the Company has an audit committee comprising three directors and threerepresentatives of the shareholders. The audit committee carries out its functions as set out in section359(6) of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004 andaccording to its approved terms of reference. During the financial period under review, the auditcommittee members were comprised as follows:

Board Member 19.9.2016 5.12.2016 16.3.2017 16.5.2017 22.8.2017 13.12.2017Mr. Goodie M Ibru, OON √ √Mr. Yakubu A Disu √ √ √ √ n/a n/a Chief Anthony Idigbe, SAN n/a n/a n/a n/a √ √ Mr. Abatcha Bulama n/a n/a n/a n/a √ √ Mr. Ufuoma Ibru n/a n/a n/a n/a √ √ Dr. Alexander A Thomopulos n/a n/a n/a n/a √ √ Mr. Anthony M Leeming √ √ n/a n/a n/a Mr. D Ramakhatela Mokhobo √ √ √ √ √ √ Mr. T J David Kliegl n/a n/a n/a n/a √ √ Mr. Norman Basthdaw n/a n/a n/a n/aMr. Andrew G Johnston n/a n/a n/a n/a√ - attendedn/a – not board member at date of meeting



11

Mr. Goodie M Ibru, OON - (Retired 17 May 2017)Mr. Yakubu A Disu (Resigned 7 July 2017)Chief Anthony Idigbe, SAN - Acting Chairman **Mr. Abatcha Bulama **Mr. Ufuoma Ibru **Dr. Alexander A Thomopulos **Mr. Anthony M Leeming* (Resigned 15 May 2017)Mr. D Ramakhatela Mokhobo *Mr. T J David Kliegl * (Appointed 27 July 2017)Mr. Norman Basthdaw * **Mr. Andrew G Johnston * *** South African** Appointed 22 August 2017

Name No. attendedMr. Goodie M Ibru, OON 2Mr. Yakubu A Disu 4Chief Anthony Idigbe, SAN 2Mr. Abatcha Bulama 2Mr. Ufuoma Ibru 2Dr. Alexander A Thomopulos 2Mr. Anthony M Leeming 2Mr. D Ramakhatela Mokhobo 6Mr. T J David Kliegl 2Mr. Norman Basthdaw 0Mr. Andrew G Johnston 0

– Audit committee

• Representing the Shareholders:Chief Victor C N Oyolu (Chairman)Mr. Bolaji O BanjoMr. Peter A Soares

The directors who served during the financial year and to the date of this report were:

The affairs of the Company are structured for management by a board of eight directors. As at the date ofthis report the board consisted of eight directors. The board meets regularly to decide on policy mattersand direct the affairs of the Company. During these meetings, the directors also review the Company’sperformance, operations and finances, and set standards for the ethical conduct of the Company’sbusiness.

The board met six times during the financial reporting period (on 19 September 2016, 5 December 2016,16 March 2017, 16 May 2017, 22 August 2017 and 13 December 2017). In accordance with Section258(2) of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004, therecord of directors’ attendance at board meetings held during the financial year under review is set outbelow:

In accordance with Section 359(4) of the Companies and Allied Matters Act, CAP C20, Laws of theFederation of Nigeria 2004, the Company has an audit committee comprising three directors and threerepresentatives of the shareholders. The audit committee carries out its functions as set out in section359(6) of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004 andaccording to its approved terms of reference. During the financial period under review, the auditcommittee members were comprised as follows:



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• Representing the board of directors:Mr. Yakubu A Disu (Resigned 7 July 2017)Mr. D Ramakhatela MokhoboMr. Abatcha Bulama (Appointed 22 August 2017)Dr. Alexander A Thomopulos (Appointed 22 August 2017)

Name No. attendedChief Victor C N Oyolu 6Mr. Bolaji O Banjo 6Mr. Peter A Soares 6Mr. Yakubu A Disu 4Mr. D Ramakhatela Mokhobo 6Mr. Abatcha Bulama 1Dr. Alexander A Thomopulos 1

– Other committees

• Finance Committee: No. attendedMr. Abatcha Bulama (Chairman) 1Mr. Ufuoma Ibru 1Dr. Alexander A Thomopulos 1Mr. D Ramakhatela Mokhobo 1Mr. T J David Kliegl 1

• Nomination and Governance Committee:Mr. T J David Kliegl (Chairman)Mr. Abatcha BulamaMr. Ufuoma IbruDr. Alexander A ThomopulosMr. D Ramakhatela Mokhobo

Internal audit

Risk management

The Audit Committee met six times during the financial period under review. The number of meetingsattended by each member is indicated below:

The Company’s executive management has established a risk committee, which is overseen by the board ofdirectors of the Company. The risk committee assesses the risks to the Company on an annual basis andreviews the effectiveness of any mitigating actions and controls for risks identified, on a quarterly basis. Thisis reported to meetings of the audit committee and the board of directors.

The internal audit function is performed by the firm of Deloitte & Touche. A systematic, disciplined and risk-based approach is adopted to evaluate and improve the effectiveness of internal controls and governanceprocesses in the areas that are audited (generally twice per annum).

In addition to the Audit Committee, the board has reconstituted the Finance Committee and constituted aNomination and Governance Committee. The Finance Committee met once during the financial periodunder review as the financial issues were adequately addressed by the Board of Directors. Thecomposition of the committees and the number of meetings attended by each member is as follows:

The Nomination and Governance committee did not meet during the financial period under review.



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Internal audit

Risk management






In addition to the Audit Committee, the board has reconstituted the Finance Committee and constituted a Nomination and Governance Committee. The Finance Committee met once during the financial period under review (12 December 2017) as the financial issues were adequately addressed by the Board of Directors. The composition of the committees and the number of meetings attended by each member is as follows:



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Internal audit

Risk management






Audit Committee Member 19.9.2016 5.12.2016 15.3.2017 16.5.2017 22.8.2017 13.12.2017Chief Victor C N Oyolu √ √ √ √ √ √ Mr. Bolaji O Banjo √ √ √ √ √ √ Mr. Peter A Soares √ √ √ √ √ √ Mr. Yakubu A Disu √ √ √ √ n/a n/a Mr. D Ramakhatela Mokhobo √ √ √ √ √ √ Mr. Abatcha Bulama n/a n/a n/a n/a n/a √ Dr. Alexander A Thomopulos n/a n/a n/a n/a n/a √ √ - attendedn/a – not committee board member at date of meeting



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14

Delegation of authority

Going concern assessment

NSE policy requirements

Management, technical and service agreements The Company has:(a)

(b)

(c)

Delisting from the Nigerian Stock Exchange

Employment and employees(a) Employment of physically challenged persons

an agreement with Ikeja Hotel Plc to provide support services to the Company which terminated on 30September 2017.

There were 5 physically challenged employees as at 31 December 2017 (2016: 5) and has an employmentpolicy that precludes discrimination against the physically challenged. For employees of the Company whobecome physically challenged, arrangements are available to retrain them for alternative work within theCompany.

a new operating management agreement with Sun International (South Africa) Limited for the managementof the Federal Palace Hotel & Casino with effect from 1 October 2017. The new agreement has been lodgedwith the National Office for Technical Acquisition and Promotion (NOTAP) for approval;

a National Office for Technical Acquisition and Promotion approved development management andtechnical service agreement with Sun International Management Limited for the provision of technicalservices to the Company, which terminated on 30 September 2017, has not been renewed by SunInternational (South Africa) Limited; and

The Company has an approved delegation of authority framework of matters that can be delegated to SunInternational (South Africa) Limited and the Company’s executive management, and those matters reserved forthe board.

The directors have made an assessment of the Company’s ability to continue to trade despite being technicallyinsolvent. The liabilities exceed assets due to shareholder and related party borrowings. The repayment of theborrowings is governed by the Second Shareholders Agreement, which specifies repayments of the borrowingswould only be triggered by the Company achieving specific profitability targets, and provided adequate fundingis available. The profitability targets will not be realised for the foreseeable future. Should the borrowings beconverted to equity, solvency ratios will be restored. Despite the economic indicators, the directors remainconcerned at the poor trading environment. However, the Company has survived the prolonged recession. Thedirectors have assessed the cash flow position and believe the Company has sufficient resources to continue totrade for the foreseeable future. The directors will continue to closely monitor the liquidity position of theCompany.

On 1 July 2015, the Nigerian Stock Exchange (NSE) notified the Company of its intention to delist TCN due tothe free float deficiency. A board resolution was passed on 13 July 2015 authorising the delisting, andcommunicated in a letter to the NSE on 20 July 2015. The Company sent a reminder to the NSE on 27 April2016. The NSE responded on 31 May 2017 that the delisting process had been placed on hold until thegovernance problems at Ikeja Hotel Plc have been resolved. The board will consider its options when the IkejaHotel Plc's governance issues have been resolved, but will co-operate fully with the NSE on the way forward.

The Company has developed a Security Trading Policy guiding its related parties in compliance with section 14of the NSE Amended Rules. The Company has in place a Complaints Management Policy Framework incompliance with the Securities & Exchange Commission rules, which is located on the Company's website atwww.tcn.com.ng.



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16





18



19



20



21



22



Statement of profit or loss and other comprehensive incomeFor the period/year ended

Notes ₦’000 ₦’000RevenueGaming 1,996,296 1,402,541 Hospitality 2,910,679 1,488,904

4,906,975 2,891,445

ExpenditureAmortisation of intangible asset 12 (21,273)Consumables and services 8(b) (544,937)Depreciation of property, plant and equipment 11(a) (547,355)Employee costs 6(a) (1,017,615)Management and support fees 24 (c) (134,135)Promotional and marketing costs (82,942)Property and administrative costs 8(c ) (987,117)

(3,335,374)

Operating loss (614,293) (443,929)

Finance income 7(a) 1,472 536 Finance costs 7(b) (5,103,698)

Loss before taxation 8 (5,547,091)Taxation 9 - -

Loss for the period/year (5,547,091)

Other comprehensive income for the period/year - -

Total comprehensive income for the period/year (5,547,091)

Loss per share (kobo)Basic and diluted loss per share 10 (247)

18 months to 31

December 2017

12 monthsto 30

June 2016

The accompanying notes on pages 25 to 61 form an integral part of these financial statements.

(6,553) (785,037) (804,196) (1,714,769) (136,713)

(3,218,232)

(3,218,232)

(143)

(86,592) (1,987,408)

(5,521,268)

(2,605,411)

(3,218,232)

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23



23

Statement of changes in equityAttributable to equity holders of the Company

Share capitalShare

premiumAccumulated

lossTotal

equity₦’000 ₦’000 ₦’000 ₦’000

Balance at 1 July 2015 1,123,220 4,132,763 Total comprehensive income - -

Balance at 30 June 2016 1,123,220 4,132,763

Balance at 1 July 2016 1,123,220 4,132,763 Total comprehensive income - -

Balance at 31 December 2017 1,123,220 4,132,763


(1,438,473) (5,547,091)

(6,985,564)

(6,985,564) (3,218,232)

(10,203,796) (15,459,779)

(3,218,232) (12,241,547)

(12,241,547)

(5,547,091) (6,694,456)



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24

Statement of cash flowsFor the period/year ended

31 December 2017

30 June 2016

Notes ₦’000 ₦’000Cash flows from operating activities:Loss for the yearAdjustments for:Depreciation 11(a) 804,196 547,355 Amortisation 12 6,553 21,273 Operating equipment usage 11(a) 20,701 32,306 Net finance cost 7(c) 2,603,939 5,103,162 Write off of property, plant and equipment 43,414 24,626

260,571 181,631

Changes in: Inventories Trade and other receivables 133,684 Tax assetsPrepayments 73,953

20(b) 59,587 653,457 Cash generated from operating activities 100,770 1,007,257

Value Added Tax (VAT) paid

Net cash generated from operating activities 10,342 957,307

Cash flow from investing activitiesInterest income 7(a) 1,472 536 Acquisition of property, plant and equipment 11(d)Acquisition of intangible assets 12Net cash used in investing activities

Net (decrease)/increase in cash and cash equivalents 613,888

Cash and cash equivalents, beginning of period 1,612,776 998,888

Cash and cash equivalents, end of period 1,363,745 1,612,776

(3,218,232) (5,547,091)

(19,787) (169,847)

(24,850)

(23,743)

(11,725) (4,903)

(10,385) (343,419)

Trade and other payables


(253,106)

(90,428)

(7,739) (259,373)

(249,031)

(49,950)

(333,570)



25



25

Notes to the financial statements

Page Page

1 Reporting entity 26 17 Share capital and premium 46

2 Basis of accounting 26 18 Borrowings 46

3 Changes in accounting policies 27 19 Deferred tax 48

4 Significant accounting policies 27 20 Trade and other payables 48

5 Determination of fair values 37 21 Cash and cash equivalents 48

6 Employee costs 38 22 Capital expenditure commitments 49

7 Finance income and costs 39 23 Operating leases commitments 49

8 Loss before taxation 40 24 Management and support fees 49

9 Taxation 41 25 Related parties 51

10 Loss per share 42 26 Segment information 53

11 Property, plant and equipment 43 27 Financial risk management 54

12 Intangible assets 44 28 Contingencies 59

13 Tax assets 45 29 Events after the reporting date 59

14 Inventories 45 30 Shareholder dispute litigation 59

15 Trade and other receivables 45 31 Going concern 60

16 Prepayments 46



26



26

For the period ended 31 December 2017

1. Reporting entity

2. Basis of accounting(a) Statement of compliance

(b) Basis of measurement

Change in financial accounting year end

(c) Critical accounting estimates and judgements

• Note 11 (g) Asset useful lives and residual values

• Note 19 - Deferred tax assets

• Note 28 - Contingencies (including taxation)

• Note 31 - Going concern

Management made certain key assumptions about the likelihood and magnitude of outflow of economicresources.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognized in the year in which the estimates are revised and in any future years affected.

Management has made estimates on future economic and business realities as it relates to forecasts andbudgets used in the assessment of the Company’s ability to continue as a going concern and the

The preparation of the financial statements in conformity with IFRS requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses during the reporting period.Actual results may differ from those estimates.

Property, plant and equipment are depreciated over their useful lives, taking into account residual valueswhere appropriate. The actual useful lives of the assets and residual values are assessed annually and mayvary depending on a number of factors. In re–assessing asset useful lives, factors such as technologicalinnovation, product life cycles and maintenance programmes are taken into account. Residual valueassessments consider issues such as future market conditions, the remaining life of the assets and projected disposal values.

Notes to the financial statements

The Tourist Company of Nigeria Plc is a company listed on the Nigerian Stock Exchange. The address of theCompany's registered office is Punuka Nominees Limited, Plot 45 Oyibo Adjarho Street, Off Admiralty Way,Lekki Peninsula Phase 1, Lagos. The Company converted from a private company to its current form on 20April 1994. The Company operates a gaming and hospitality business in Victoria Island, Lagos.

The financial statements have been prepared in accordance with International Financial ReportingStandards (IFRS) and in the manner required by the Companies and Allied Matters Act of Nigeria CapC.20, Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council Act, 2011. Thefinancial statements were authorised for issue by the board of directors on 8 March 2018.

The financial statements have been prepared under the historical cost convention except for certainfinancial instruments initially measured at fair value.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that ithas become probable that future taxable profits will be available against which they can be used.

By a resolution of the board of directors dated 16 March 2017, the company changed its financialaccounting year end from 30 June to 31 December. This change was required to align the financialaccounting year end of the Company with the financial accounting year end of the majority shareholders.



27



27

(d) Functional and presentation currency

Changes in accounting policies

Significant accounting policies

Page a) Foreign currency transactions 27b) Property, plant and equipment 27c) Intangible assets 29d) Impairment of non financial assets 29e) Inventories 29f) Cash and cash equivalents 29g) Financial instruments 30h) Share capital 31i) Current and deferred tax 31j) Leased assets 31k) Employee benefits 32l) Provisions 32m) Contingent liabilities 32n) Statement of cash flows 32o) Revenue 32p) Finance income and finance costs 33q) Loss per share 33r) Segment reporting 33s) Related parties 33t) Accounting policy developments 33

(a) Foreign currency transactions

(b) Property, plant and equipmentI. Recognition and measurement

Set out below is an index of the significant accounting policies, the details of which are available on the pagesthat follow.

Purchased software that is integral to the functionality of related equipment is capitalised as part of theequipment.

Transactions denominated in foreign currencies are translated at the rate of exchange ruling on thetransaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the rateof exchange ruling at the reporting date. Foreign exchange gains or losses arising on translation arerecognised in profit or loss.

Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulatedimpairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of theitems. Property, plant and equipment not yet available for use are disclosed as capital-work-in-progress.

appropriateness of the going concern assumption in the preparation of the financial statements for the periodended 31 December 2017.

The financial statements are presented in Nigerian Naira, which is the Company’s functional currency. Allfinancial information presented in Naira has been rounded to the nearest thousand except where otherwiseindicated.

The Company has consistently applied the accounting policies set out in Note 4 to all periods presented inthese financial statements.



28



II. Depreciation

Leasehold land – Over the lease periodBuildings and infrastructure- Casino and hotel premises – 36 - 40 yearsPlant and machinery- Pumps, pipes, tanks and compressors – 10 years - Generating set equipment – 2 years- Generators – 10 yearsHotel and office equipment – 10 yearsMotor vehicles – 7 yearsFurniture and fittings – 10 yearsCasino equipment – 10 years

Subsequent costs

III. Borrowing costs

IV. Derecognition

Assets held under finance lease are depreciated over their expected useful lives on the same basis as theowned assets or, where shorter, the term of the relevant lease.

When parts of an item of property, plant and equipment have different useful lives, they are accounted foras separate items (major components) of property, plant and equipment.

When the carrying amount of an asset is greater than its estimated recoverable amount, it is written downimmediately to its recoverable amount.

Depreciation is calculated so as to write off the cost of items of property, plant and equipment less theirestimated residual values over their useful lives, using the straight-line method. Leased assets aredepreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that theCompany will obtain ownership by the end of the lease term, in which case the assets are developed overthe useful life. The principal useful lives over which the assets are depreciated are as follows:

Depreciation (usage) of operating equipment (which includes casino chips, kitchen utensils, crockery,cutlery and linen) is recognised as an expense. The period of usage depends on the nature of the operatingequipment and varies between one and three years.

Costs arising subsequent to the acquisition of an asset are included in the asset’s carrying amount orrecognised as a separate asset, as appropriate, only when it is probable that future economic benefitsassociated with the item will flow to the Company and the cost of the item can be measured reliably.

The assets’ residual values and useful lives are reviewed annually, and adjusted if appropriate, at reportingdate. Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred to therelevant asset category immediately the asset is available for use and depreciated accordingly.

The carrying amount of the replaced part is then de-recognised. All other repairs and maintenance costsare charged to the statement of comprehensive income during the financial period in which they areincurred.

Borrowing costs and certain direct costs relating to major capital projects are capitalised during the period of development or construction.

The carrying amount of an item or PPE shall be derecognised on disposal or when no future economicbenefit is expected from its use or disposal.Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and arerecognised in profit or loss in the statement of comprehensive income.

28



29



27

(c) Intangible assetsRecognition and measurement

Subsequent costs

Derecognition

(d) Impairment of non-financial assets

(e) Inventories

(f) Cash and cash equivalents

When the carrying amount of an asset is greater than its estimated recoverable amount, it is written downimmediately to its recoverable amount.

Costs arising subsequent to the acquisition of an asset are included in the asset’s carrying amount orrecognised as a separate asset, as appropriate, only when it is probable that future economic benefitsassociated with the item will flow to the Company and the cost of the item can be measured reliably.

Expenditure on computer software is capitalised and amortised using the straight line method over 4 years.Costs associated with maintaining computer software programmes are recognised as an expense asincurred. Amortisation methods, useful lives and residual values are reviewed at each reporting date andadjusted if appropriate.

The carrying amount of the replaced part is then de-recognised. All other repairs and maintenance costs arecharged to the statement of comprehensive income during the financial period in which they are incurred.

Intangible assets that have an indefinite useful life are not subject to depreciation or amortisation and aretested annually for impairment. Other assets with finite useful life that are subject to depreciation oramortisation are reviewed for impairment whenever events or changes in circumstances indicate that thecarrying amount may not be recoverable. An impairment loss is recognised for the amount by which theasset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’sfair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped atthe lowest levels for which there are separately identifiable cash flows (cash generating units). In assessingvalue in use, the estimated future cash flows are discounted to their present value using a pre-tax discountrate.

The carrying amount of an item shall be derecognised on disposal or when no future economic benefit areexpected from its use or disposal.

Impairment losses are recognised in profit or loss. An impairment loss is reversed only to the extent that theasset’s carrying amount does not exceed the carrying amount that would have been determined, net ofdepreciation or amortisation, if no impairment loss had been recognised.

Inventories comprises of merchandise held for sale and consumables, and are measured at the lower of costand net realisable value on a weighted average basis. Net realisable value is the estimated selling price inthe ordinary course of business, less any costs necessary to make the sale. The cost of inventories includesexpenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existinglocation and condition.

Cash and cash equivalents are classified as loans and receivables and subsequently measured at amortisedcost. Cash and cash equivalents comprise cash on hand and deposits held on call with banks with originalmaturities of three months or less. Bank overdrafts that are repayable on demand and form an integral partof the Company's cash management are included as a component of cash and cash equivalents for thepurposes of cash flow statement.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and arerecognised in profit or loss in the statement of comprehensive income.



30



27

(g) Financial instruments

I. Financial Assets

Loans and receivables

Derecognition of financial assets and impairment of financial assets

II. Financial liabilities

The Company derecognises a financial asset when the contractual rights to the cash flows from the assetexpire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantiallyall of the risks and rewards of ownership of the financial asset are transferred, or it neither transfers norretains substantially all of the risks and rewards of ownership and does not retain control over thetransferred asset.

Financial instruments carried at reporting date include trade receivables, cash and cash equivalents,borrowings, trade payables and accruals.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount ofthe loss is recognised as profit or loss. When a receivable is uncollectible, it is written off against theallowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss inthe statement of profit or loss and other comprehensive income.

The classification of financial assets depends on management's intention. Management determines theclassification of its financial assets at initial recognition. The financial assets carried at the reporting dateare classified as ‘Loans and receivables’.

Financial instruments are recognised initially at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, financial instruments are measured as described below.

Subsequent to initial recognition, receivables are carried at amortised cost using the effective interestmethod, less any impairment losses.

The Company’s financial liabilities at reporting date include ‘Borrowings’ and ‘Trade and other payables’(excluding indirect taxes and employee related payables). Financial liabilities are included in currentliabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12months after the reporting date.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. They are classified as non-current assets unless receipt is anticipated within 12months, in which case the amounts are included in current assets. Loans and receivables are recognisedinitially at fair value plus any directly attributable transaction costs.

Financial liabilities are recognised initially on the trade date, which is the date that the Company becomes aparty to the contractual provisions of the instrument. The Company classifies non-derivative financialliabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fairvalue less any directly attributable transaction costs. Subsequent to initial recognition, these financialliabilities are measured at amortised cost using the effective interest method. Other financial liabilitiescomprise borrowings and accounts payable and accruals.

Significant financial difficulties of the counterparty and default or delinquency in payments are consideredindicators that the receivable is impaired. The amount of the impairment loss is the difference between theasset’s carrying amount and the present value of estimated future cash flows, discounted at the originaleffective interest rate.



31



Derecognition of financial liabilities

(h) Share capital

(i) Current and deferred tax

Current Tax

Deferred Tax

(j) Leased assets

Taxation for the period comprises current and deferred tax. Taxation is recognised in the statement ofprofit or loss and other comprehensive income, except to the extent that it relates to a businesscombination, or items recognised directly in equity or in other comprehensive income.

Leases of assets under which substantially all the risks and benefits of ownership are effectively retainedby the lessor are classified as operating leases and are not recognised in the Company’s statement offinancial position.

The Company has only one class of shares, ordinary shares. Ordinary shares are classified as equity. Whennew shares are issued, they are recorded in share capital at their par value. The excess of the issue priceover the par value is recorded in the share premium reserve.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which theCompany expects, at the end of the reporting period, to recover or settle the carrying amount of its assetsand liabilities.

Tertiary Education Tax - Tertiary education tax is based on the assessable income of the Company and isgoverned by the Tertiary Education Trust Fund (Establishment) Act Laws of the Federation of Nigeria2011.

Deferred tax assets relating to the carry forward of unused tax losses, tax credits and deductible temporarydifferences are recognised to the extent that it is probable that future taxable profit will be availableagainst which the unused tax losses can be utilised in the foreseeable future.

Company Income Tax - This relates to tax on revenue and profit generated by the Company during theyear, to be taxed under the Companies Income Tax Act Cap C21, Laws of the Federation of Nigeria 2004as amended, to date.

Deferred tax is provided in full, using the liability method and using tax rates enacted or substantivelyenacted at the reporting date, for all temporary differences arising between the tax bases of assets andliabilities and their carrying values for financial reporting purposes.

Current tax is the expected tax payable on the taxable income or loss for the year, using tax rates enactedor substantively enacted at the reporting date, and any adjustment to tax payable in respect of previousyears. The Company is subject to the following types of current income tax:

The Company de-recognises a financial liability when the contractual obligations are discharged, cancelledor expire.

Leases of assets where the Company assumes substantially all the benefits and risks of ownership areclassified as finance leases. Finance leases are capitalised at commencement and are measured at the lowerof the fair value of the leased asset and the present value of minimum lease payments. Each lease paymentis allocated between the liability and finance charges so as to achieve a constant rate on the financebalance outstanding. The corresponding lease obligations, net of finance charges, are included inborrowings. The interest element of the lease payment is charged to profit or loss over the lease period.The assets acquired under finance leasing contracts are depreciated over the shorter of the useful life of theasset, or the lease period. Where a lease has an option to be renewed, the renewal period is consideredwhen the period over which the asset will be depreciated is determined.

31



32



27

(k) Employee benefitsShort-term employee benefits

Defined contribution plans

(l) Provisions

(m) Contingent liabilities

(n) Statement of cash flows

(o) Revenue

Payments made under operating leases are charged to profit or loss on a straight-line basis over the periodof the lease. When an operating lease is terminated before the lease period has expired, any paymentrequired to be made to the lessor by way of a penalty is recognised as an expense in the period in whichtermination takes place.

Contingent liabilities are only disclosed and not recognised as liabilities in the statement of financialposition.

The Company operates a contributory scheme in line with the Pension Reform Act, 2014. The Companyand the employees respectively contribute 10% and 8% of the employees’ current salaries and designatedallowances into a separate entity.

A contingent liability is a possible obligation that arises from past events and whose existence will beconfirmed only by the occurrence or non-occurrence of one or more uncertain future events not whollywithin the control of the company, or a present obligation that arises from past events but is not recognisedbecause it is not probable that an outflow of resources embodying economic benefits will be required tosettle the obligation; or the amount of the obligation cannot be measured with sufficient reliability.

Short-term employee benefit obligations are measured on an un-discounted basis and are expensed as therelated service is provided. A liability is recognised for the amount expected to be paid under short-termcash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay thisamount as a result of past service provided by the employee, and the obligation can be estimated reliably.

The Company’s contributions are charged to profit or loss in the period to which the contributions relate.The Company has no legal or constructive obligation to pay further contributions if the fund does not holdsufficient assets to pay all employee benefits relating to employee services in the current and prior periods.

Provisions are recognised when the Company has a present legal or constructive obligation as a result ofpast events, it is probable that an outflow of resources will be required to settle the obligation, and areliable estimate of the amount of the obligation can be made. Provisions are measured at the present valueof the expenditures expected to be required to settle the obligation.

Revenue is recognised at the fair value of the consideration received or receivable from the sale of goodsand rendering of services in the ordinary course of the Company’s activities. Revenue is recognised whenit is probable that the economic benefits associated with a transaction will flow to the Company and theamount of revenue and associated costs incurred or to be incurred can be measured reliably.

If the likelihood of an outflow of resources is remote, the possible obligation is neither a provision nor acontingent liability and no disclosure is made.

The statement of cash flows is prepared using the indirect method. Changes in statement of financialposition items that have not resulted in cash flows such as translation differences, fair value changes andother non-cash items, have been eliminated for the purpose of preparing the statement. Interest paid is alsoincluded in financing activities while finance income is included in investing activities.



33



33

(p) Finance income and finance costs

(q) Loss per share

(r) Segment reporting

(s) Related parties

(t) Accounting policy developments

New standards and interpretations not yet adopted

VAT on all other revenue transactions is considered to be a tax collected by the Company as an agent onbehalf of the revenue authorities and is excluded from revenue. Customer loyalty points are provided againstrevenue when points are earned.

Interest income and interest expense on all interest bearing financial instruments are recognised using theeffective interest method. The effective interest rate is the rate that exactly discounts the expected future cashpayments or receipt through the expected life of the financial instrument. Net finance costs include interestexpense on borrowings as well as interest income on bank balances. Net finance costs also include otherfinance income and expense items, such as exchange differences arising on borrowings and the settlement offoreign currency creditors. Foreign currency gains and losses are reported on a net basis.

The Company presents basic and diluted loss per share (LPS) data for its ordinary shares. Basic LPS iscalculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weightedaverage number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted LPSis determined by adjusting the loss attributable to ordinary shareholders and the weighted average number ofordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinaryshares.

Related parties includes the ultimate holding company and other major shareholders, directors, their closefamily members and any employee who is able to exert a significant influence on operating policies or theCompany, are also considered to be related parties. Key management personnel are those persons havingauthority and responsibility for planning, directing and controlling activities or the entity directly orindirectly.

Accounting policy developments include new standards issued, amendments to standards and interpretationsissued on current standards.

At the date of authorisation of the financial statements of the Company for the year ended 31 December2017, the following Standards, Amendments to Standards and Interpretations were in issue but not yeteffective:

Segment results that are reported to the Company’s Board of Directors include items directly attributable to asegment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainlycorporate assets, shared services and tax assets and liabilities.

Revenue includes net gaming win, hotel, entertainment and restaurant revenues, other service fees, rentalincome and the invoiced value of goods and services sold less returns and allowances. Taxes levied on casinowinnings are included in revenue and treated as overhead expenses, as these are borne by the Company andnot by its customers.



34



A. Estimated impact of the adoption of IFRS 9 and IFRS 15

As reported at 31

December 2017

Estimated adjustments

due to adoption of

IFRS 9

Estimated adjustments

due to adoption of

IFRS 15

Estimated adjusted opening

balance at 1 January

2018₦'000 ₦'000 ₦'000 ₦'000

Accumulated loss (3,218,232) (10,516) - (3,228,748)

• IFRS 15 Revenue from contracts with customers, Effective date; 1 January 2018• IFRS 9 Financial Instruments (2010), Effective date; 1 January 2018• Annual Improvements to IFRSs 2014 - 2016 Cycle - various standards (Amendments to IFRS 1 and IAS28), Effective date; 1 January 2018• IFRICC 22 Foreign currency translations and advance consideration, Effective date; 1 January 2018• IFRIC 23 Uncertainty over Income Tax Treatments, Effective date; 1 January 2019• IFRS 16 Leases, Effective date; 1 January 2019

Except for those Standards, Amendments to Standards and Interpretations that are not applicable to theentity, all Standards, Amendments to Standards and Interpretations will be adopted at their effective dateunless otherwise indicated.

The following Standards, Amendments to Standards and Interpretations are not applicable to the businessof the entity and will therefore have no impact on future financial statements.

The Company is required to adopt IFRS 9 Financial Instruments and IFRS 15 Revenue from Contractswith Customers from 1 January 2018. The Company assessed the estimated impact that the initialapplication of IFRS 9 and IFRS 15 will have on its financial statements. The estimated impact of theadoption of these standards on the Group's equity as at 1 January 2018 is based on assessments undertakento date and is summarised below. The actual impacts of adopting the standards at 1 January 2018 maychange because the new accounting policies are subject to change until the Company presents its firstfinancial statements that include the date of initial application.

The directors are of the opinion that the impact of the application of the remaining Standards,Amendments to Standards and Interpretations will be as follows:

• Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4),Effective date; 1 January 2018• Classification and Measurement of Share Based Payment Transactions (Amendments to IFRS 2),Effective date; 1 January 2018• Transfers of Investment Property (Amendments to IAS 40), Effective date; 1 January 2018• Prepayment features with negative compensation (Amendments to IFRS 9), Effective date; 1 January2018• IFRS 17 Insurance Contracts, Effective 1 January 2021• Sale or Contribution of Assets between an investor and its Associate or Joint Venture (Amendments toIFRS 10 and IAS 28). The effective date for these amendments was deferred indefinitely. Early adoptioncontinues to be permitted.

34



35



₦’000Trade and other receivables 10,516 Cash and cash equivalents -

The Company believes that impairment losses are likely to increase and become more volatile for assets inthe scope of the IFRS 9 impairment model. Based on the impairment methodology described below, theCompany has estimated that application of IFRS 9's impairment requirements at 1 January 2018 results inadditional impairment losses as follows:

Under IFRS 15, the total consideration in the contracts will be allocated to all services based on their stand-alone prices. The stand-alone prices will be determined based on the approved price at which theCompany renders the services in separate transactions.

Based on the Company's assessment, the fair value and the stand-alone prices are broadly similar.Therefore, the Company does not expect the application of IFRS 15 to result in significant differences inthe timing of revenue recognition for these services.

The Company plans to adopt IFRS 15 using the cumulative effect method, with the effect of initiallyapplying this standard recognised at the date of initial application (i.e. 1 January 2018). As a result, theCompany will not apply the requirements of IFRS 15 to the comparative period presented.

B. IFRS 15 Revenue from contracts with customers. IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue isrecognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11Construction Contracts and IFRIC 13 Customer Loyalty Programmes.

C. IFRS 9 Financial Instruments. Date issued by IASB; July 2014, Effective date; 1 January 2018 Earlyadoption is permittedOn 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, which replaces earlierversions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial Instruments:Recognition and Measurement.

The Company operates a gaming and hospitality business. If the services under a single arrangement arerendered in different reporting periods, then the consideration is allocated on a relative fair value basisbetween the different services. Revenue is currently recognised when it is probable that the economicbenefits associated with a transaction will flow to the Company and the amount of revenue and associatedcosts incurred or to be incurred can be reliably measured.

Estimated additional impairment recognised at

1 January 2018

IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a newexpected credit loss model for calculating impairment on financial assets, and new general hedgeaccounting requirements. It also carries forward the guidance on recognition and derecognition of financialinstruments from IAS 39.

35



36



27

Cash and cash equivalent

i. Determining whether an arrangement contains a lease

D. IFRS 16, "Leases". Date issued by IASB; January 2016, Effective date; 1 January 2019Early adoption is permitted only for entities that adopt IFRS 15 Revenue from Contracts with Customers,at or before the date of initial application of IFRS 16.

IFRS 16 replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the LegalForm of a Lease.

IFRS 16 introduces a single, on-balance sheet lease accounting model for leases. A lessee recognises aright-of-use asset representing its right to use the underlying asset and a lease liability representing itsobligation to make lease payments.

The Company has completed an initial assessment of the potential impact on its financial statements buthas not yet completed its detailed assessment. The actual impact of applying IFRS 16 on the financialstatements in the period of initial application will depend on future economic conditions, including theCompany's borrowing rate at 1 January 2019, the composition of the Company's lease portfolio at thatdate, the Company's latest assessment of whether it will exercise any lease renewal options and the extentto which the Company chooses to use practical expedients and recognition exemptions.

On transition to IFRS 16, the Company can choose whether to: - apply the IFRS 16 definition of a lease to all its contracts; or - apply a practical expedient and not reassess whether a contract is, or contains, a lease.

The Company plans to apply the practical expedient to grandfather the definition of a lease on transition.This means that it will apply IFRS 16 to all contracts entered into before 1 January 2019 and identified asleases in accordance with IAS 17.

So far, the most significant impact identified is that the Company will recognise new assets and liabilitiesfor its operating leases of casino equipment. As at 31 December 2017, the Company had no futureminimum lease payments under non-cancellable operating leases.

In addition, the nature of expenses related to those leases will now change as IFRS 16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense onlease liabilities.

The cash and cash equivalents are held with banks which are rated BB- to BBB+, based on Fitch ratings asat 31 December 2017.

The estimated impairment on cash and cash equivalents was calculated based on the 12-month expectedloss basis and reflects the short maturities of the exposures. The Company considers that its cash and cashequivalents have low credit risk based on the external credit ratings of the banks.

The Company estimated that application of IFRS 9's impairment requirements at 1 January 2018 results inno impairment loss.

Changes in accounting policies resulting from the adoption of IFRS 9 will generally be appliedretrospectively.



37



37

ii. TransitionAs a lessee, the Company can either apply the standards using a: - retrospective approach; or- modified retrospective approach with optional practical expedients.

The lessee applies the election consistently to all its leases.

Standards and interpretations effective 31 December 2017

5. Determination of fair values

(a) Trade and other receivables

(b) Borrowings

• Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)

The Company plans to apply IFRS 16 initially on 1 January 2019, using the modified retrospective approach.Therefore, the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the openingbalance of retained earnings at 1 January 2019, with no restatement of comparative information.

When applying the modified retrospective approach to leases previously classified as operating leases underIAS 17, the lessee can elect, on a lease-by-lease basis, whether to apply a number of practical expedients ontransition. The Company is assessing the potential impact of using these practical expedients.

The Company is not required to make any adjustments for leases in which it is a lessor except where it is anintermediate lessor in a sub-lease.

The fair value of trade and other receivables is estimated as the present value of future cash flows, discountedat the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. Forshort term receivables, no disclosure of fair value is presented when the carrying amount is a reasonableapproximation of fair value.

Fair value, which is determined for disclosure purposes, is calculated based on the present value of futureprincipal and interest cash flows, discounted at the market rate of interest at the reporting date.

The effective interpretations and standards that need to be considered for financial years ended 31 December2017 are listed below:

• Disclosure Initiative (Amendments to IAS 7)

A number of the Company’s accounting policies and disclosures require the determination of fair value, forboth financial and non-financial liabilities. Fair values have been determined for measurement and/ordisclosure purposes based on the following methods. Where applicable, further information about theassumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

• Annual Improvements to IFRS, 2014 - 2016 Cycle - various standards (Amendments to IFRS 12)



38



38

6. Employee costs(a) Employee costs for the period/year comprises:

18 monthsto 31

December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Salaries, wages, bonuses and other benefits 1,280,035 793,464 Defined contribution pension fund costs 124,763 48,494 Other personnel costs 309,971 175,657

1,714,769 1,017,615

(b)

18 monthsto 31

December 2017

12 monthsto 30

June 2016N N Number Number

0 - 200,000 3 4 200,001 - 400,000 4 2 400,001 - 600,000 22 15 600,001 - 800,000 162 188 800,001 - 1,000,000 14 12 1,000,001 - above 144 159

349 380

The number of full-time persons employed per function as at period/year end was as follows:18 months

to 31 December 2017

12 monthsto 30

June 2016Number Number

Gaming 57 78Hospitality 246 258Administration and support services 46 44

349 380(c) Pension payable

31 December 2017

30 June2016

₦'000 ₦'000

Balance at beginning of the year - 4,090 Charge for the year 124,763 48,494 Payments during the year (120,644) (52,584)

Balance as at end of the year 4,119 -

Employees of the Company, whose duties were wholly or mainly discharged in Nigeria, receivedremuneration (excluding pension costs and certain benefits) in the following ranges:

The balance of the pension payable account represents the amount due to the Pension Fund Administratorwhich is yet to be remitted at the year end. The movement on this account during the year was as follows:



39



39

(d) Directors' remuneration

18 monthsto 31

December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Executive directors - - Non-executive directors 1,661 1,421

1,661 1,421

The directors’ remuneration shown above includes:18 months

to 31 December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Chairman's fees 165 200Highest paid director 400 350

Other directors received emoluments in the following ranges;18 months

to 31 December 2017

12 monthsto 30

June 2016N N Number Number

0 - 100,000 4 - 100,001 - Above 6 4

10 4

7. Finance income and costs(a) Finance income comprises:

18 monthsto 31

December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Interest income on bank balances 1,472 536

1,472 536

The Company's majority shareholder, Sun International Limited, operates a defined contributionprovident fund. Currently, the provident fund is available to the Company’s expatriate employees, whilstthe Company’s Nigerian employees belong to Nigerian employee nominated defined contribution funds.Contributions are made by both the Company and its employees to these funds.

Remuneration, excluding certain benefits of directors of the Company, who discharged their dutiesmainly in Nigeria, is as follows:



40



40

(b) Finance costs comprise:18 months

to 31 December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Interest expense 1,369,855 577,401 1,235,556 4,526,297

2,605,411 5,103,698

(c) Net finance costs:Finance income (1,472) (536)Finance costs 2,605,411 5,103,698

2,603,939 5,103,162 8. Loss before taxation

(a) Loss before taxation is stated after charging the following:18 months

to 31 December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Depreciation of property, plant and equipment (Note 11(a)) 804,196 547,355 Amortisation of intangible assets (Note 12) 6,553 21,273 Operating lease charges - casino equipment 7,796 6,540 Audit fees 25,200 20,169 Non-Audit fees* 4,841 1,898 Audit fee expenses 320 180 Write off of property, plant and equipment 43,414 24,626 Employee costs (Note 6(a)) 1,714,769 1,017,615 Loss on foreign exchange (Note 7(b)) 1,235,556 4,526,297 Management and support fees (Notes 24(c)) 136,713 134,135

*

(b) Consumables and services comprise the following:

18 monthsto 31

December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Cost of sales - food & beverage 378,094 159,480 Cost of sales - other 29,847 21,131 Amortisation of casino licence fees 85,000 110,000 Other operating expenditure 64,379 54,033 Card commission 26,438 13,567 Printing & Stationery 11,154 14,752

Loss on foreign currency translation

Tax and Corporate services amounting to ₦4.8 million (2016: ₦1.9 million) with respect to transfer pricing documentation, and application for NOTAP certificate were provided by KPMG Professional Services.



41



41

Gaming - Taxes 89,919 87,283 Entertainment 20,679 18,599 Repairs and maintenance 23,672 19,059 General expenses 34,657 36,726 Other casino related expenses 21,198 10,307

785,037 544,937

(c ) Property and administrative costs comprise of the following:

18 monthsto 31

December 2017

12 monthsto 30

June 2016₦'000 ₦'000

Power, fuel and other utilities 1,044,447 454,959 27,337 15,904

Repairs and maintenance 221,030 87,938 Information technology and related expenses 147,719 78,345 Outsourced contracts 111,118 92,125 Professional fees 145,650 119,605 Bad debt expense 8,248 (12,389)Operating lease charges - casino equipment 7,796 6,540 Write off of property, plant and equipment 43,414 24,626 Insurance 109,565 57,638 Licenses and permits 36,474 20,174 Other general expenses 84,610 41,652

1,987,408 987,117

9. Taxation(a) Income tax expense

(b)

Card commission

The effective production date was certified by the Industrial Inspectorate Department of the Federal Ministryof Commerce and Industry on 28 May 2013. In accordance with the provision of the Industrial Development(Income Tax Relief) Act, the Company's profit attributable to the Pioneer line of business is therefore notliable to income taxes for the duration of the Pioneer period, which ended 31 December 2015. The Companyincurred tax losses, consequently there was no tax payable in current year.

In 2013, the Nigerian Investment Promotion Council (NIPC) granted the Company a Pioneer Status for a fiveyear period with respect to the tourism and hospitality business of the Company, with a retrospective effectivecommencement production date of 1 January 2011.

The Company's results when adjusted for tax purposes resulted in a nil assessible and taxable income.Accordingly, no provision has been made for income and tertiary education taxes for the year (2016: Nil).



42



(c) Reconciliation of effective tax rate2017 2017 2016 2016

₦'000 ₦'000

Loss from continuing operationsTaxation - - Loss before tax

Income tax using the company's tax rate 30% 30% (1,664,127)

-27% 879,884 -30% 1,667,167

0% - 0% (10,359)

Effect of permanent differences -3% 85,586 0% 7,319 - - - -

10. Loss per share

Number of shares for loss per share calculation31 December

201730 June

2016

Weighted number of shares 2,246,437,472 2,246,437,472

Kobo KoboBasic and diluted loss per share (143) (247)

(3,218,232) (5,547,091)

The Company did not have any instruments with a dilutive effect during the year, thus, basic and dilutedloss per share are equal.

Basic loss per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

Origination and reversal of temporary differenceChange in recognized deductible temporary differences

(3,218,232) (5,547,091)

(965,470)

42



43

The

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44



(d) 31 December

201730 June

2016₦'000 ₦'000

Additions (Note 11(a)) 258,308 333,570 Accrued additions to PPE (5,202) - PPE additions in statement of cash flows 253,106 333,570

(e) Assets held on finance lease

(f)

31 December 2017

30 June 2016

₦'000 ₦'000Building and infrastructure 53,545 28,175 Plant and machinery 142,169 121,786 Casino equipment 5,663 36,204 Motor Vehicles - 947 Furniture and fittings 277 5,136 Hotel and office equipment 24,727 77,966 Property, plant and equipment 226,381 270,214 Intangible assets 7,739 10,385

234,120 280,599

(g)

12. Intangible assets

31 December 2017

30 June 2016

₦'000 ₦'000CostBalance at the beginning of the period/year 70,083 59,698 Additions 7,739 10,385 Disposals - - Balance at the end of the period/year 77,822 70,083 AmortisationBalance at the beginning of the period/year 59,474 38,201 Amortisation 6,553 21,273 Disposals - - Balance at the end of the period/year 66,027 59,474

PPE additions in statement of cash flows

Intangible assets represent the purchase costs and installation of software licences. The movement in theintangibles asset account during the year was as follows:

Included as part of property, plant and equipment is land held under finance lease arrangements for a minimumlease term of 99 years. The lease amounts were fully paid at the inception of the lease.

Capital work in progressAdditions to capital work in progress during the year is analysed as follows:

No borrowing costs were capitalised during the acquisition of property, plant and equipment as additions werenot financed through borrowings (2016: Nil)During the year, the Company reassessed the remaining useful lives of its property, plant and equipment. Nochanges were considered necessary.

The classification of the lease of land as a finance lease is on the basis that the lease transfers substantially allof the risks and rewards of ownership incidental to ownership of the land to the Company.

44



45



Carrying amountsBalance at the beginning of the period/year 10,609 21,497 Balance at the end of the period/year 11,795 10,609

13. Tax assets

14. Inventories31 December

201730 June

2016₦'000 ₦'000

Merchandise - 1,206 Consumables and hotel stock 113,463 92,470

113,463 93,676

15. Trade and other receivables31 December

201730 June

2016₦'000 ₦'000

Financial instrumentsTrade receivables 225,851 138,027 Less: impairment (Note 27(b)) (93,584) (92,128)Net trade receivables 132,267 45,899 Credit card receivables 30,660 7,552 Advance payment to suppliers 37,078 2,313 Non-financial instrumentsOther receivables 42,478 16,872

242,483 72,636

Included in the carrying amount of trade receivables are amounts due from related parties (refer Note 25(b)(iii)).

The carrying values of trade and other receivables approximate their fair value as at the reporting date.

The value of food and beverage consumables included in consumables and services as cost of sale amounted to₦378.1 million (2016: ₦159.5 million).

The Company has recognised an allowance of ₦93.6 million (2016: ₦92.1 million) for the impairment of itstrade receivables during the year ended 31 December 2017. The creation and usage of the allowance forimpaired receivables has been included in 'Property and administrative costs' in the statement of profit or lossand other comprehensive income. Other receivables are expected to be fully recoverable. The trade receivableswhich are fully performing and past due but not impaired relate to customers that have a good track recordwith the Company in terms of recoverability.

Tax assets comprises withholding tax credit notes as the Company has unutilised tax losses and capitalallowances which are not expected to be utilised in the next 12 months.

45



46



16. Prepayments31 December

201730 June

2016₦'000 ₦'000

Insurance prepayments - 1,010 Licenses prepayments 23,663 11,838 General prepayments - subscription and maintenance fees 22,960 10,999 Service contracts prepayments 5,018 2,944

51,641 26,791

17. Share capital and premiumShare Capital

(i) Authorised ordinary shares of 50K each31 December

201730 June

2016₦'000 ₦'000

Balance at the beginning of the period/year 2,000,000 2,000,000 Balance at the end of the period/year 2,000,000 2,000,000

4,000,000,000 ordinary shares of 50 Kobo each at 31 December 2017 (2016: 4,000,000,000).

(ii) Issued and fully paid ordinary shares of 50K each31 December

201730 June

2016₦'000 ₦'000

Balance at the beginning of the period/year 1,123,220 1,123,220 Balance at the end of the period/year 1,123,220 1,123,220

2,246,437,472 ordinary shares of 50 Kobo each at 31 December 2017 (2016: 2,246,437,472).All issued shares are fully paid.

The premium on the 2,246,437,472 ordinary shares of 50 Kobo each is as follows:31 December

201730 June

2016₦'000 ₦'000

Share Premium 4,132,763 4,132,763

18. Borrowings31 December

201730 June

2016₦'000 ₦'000

(a) Non-currentTerm facilities (unsecured) 18,767,128 16,187,085 Total borrowings 18,767,128 16,187,085

Holders of these shares are entitled to dividends from time to time and are entitled to one vote per share atthe general meetings of the Company.

46



47



(b) Terms and conditions of outstanding loans are as follows:US$'000 ₦'000 ₦'000

31 December 2017

31 December 2017

30 June 2016

Non-current, unsecuredShareholders:Ikeja Hotel PlcAt beginning of the period/year 18,784 5,306,468 3,502,243 Interest capitalised 1,470 449,194 189,515 Exchange difference - 438,219 1,633,662 Related tax on interestAt end of period/year 20,128 6,148,963 5,306,468 Sun International LimitedAt beginning of the period/year 20,079 5,672,366 3,745,900 Interest capitalised 1,570 479,719 201,826 Exchange difference - 466,739 1,739,777 Related tax on interestAt end of period/year 21,548 6,582,845 5,672,366

Total shareholders 41,676 12,731,808 10,978,834

Other:Omamo Investment CorporationAt beginning of the period/year 18,436 5,208,251 3,436,927 Interest capitalised 1,443 440,937 186,059 Exchange difference - 430,226 1,603,871 Related tax on interestAt end of period/year 19,756 6,035,320 5,208,251

61,432 18,767,128 16,187,085

Terms of the above loans:(a) They are unsecured.(b)

(c) The loans are denominated in US Dollars.(d) Interest is capitalised at 5% per annum.

(126) (44,918) (18,952)

(101) (35,979) (15,137)

(123) (44,094) (18,606)

The interest rate of 5% (2016: 5%) has been set on the Company’s fixed borrowings. Of these fixedborrowings 100% (2016:100%) were for periods longer than 12 months. The Company had no unutilisedborrowing facilities at 31 December 2017 (2016: Nil).

The loan from Omamo Corporation is currently the subject to a legal dispute (Note 30).

In terms of its articles of association, the directors, on behalf of the Company are empowered to borrow orobtain loans in the ordinary course of business and in the overall best interest of the Company subject to theapproval of shareholders for a foreign loan.

Repayment is subject to the board of director's discretion, taking into account the availability of fundsand the Company's working capital requirements.

47



48



19. Deferred taxUnrecognised deferred tax assets

20. Trade and other payables31 December

201730 June

2016(a) Trade and other payables ₦'000 ₦'000

Financial instrumentsTrade payables 94,478 73,125 Other payables 624,997 458,804 Amount due to related parties (Note 25(b)(i)&(ii)) 55,601 64,561 Accrued expenses 309,243 555,691 Casino loyalty programme liability 21,607 33,466

1,105,926 1,185,647 Non-financial instrumentsEmployee related accruals 137,022 105,864 Other payables * 89,510 26,914 Deposits received 12,089 26,394

1,344,547 1,344,819

(b) Trade and other payables in statement of cash flows31 December

201730 June

2016₦'000 ₦'000

Trade and other payables movement 205,191 Value Added Tax (VAT) paidRealised exchange differences 20,093 445,522 Accrued additions to PPE (Note 11(d)) 5,202 - Related taxes on shareholder loans 124,991 52,694 Trade and other payables in statement of cash flows 59,586 653,457

21. Cash and cash equivalents

Cash and cash equivalents consist of:31 December

201730 June

2016₦'000 ₦'000

Cash at bank 1,337,418 1,584,451 Cash on hand 26,327 28,325 Cash and cash equivalents in the statement of cash flows 1,363,745 1,612,776

(49,950) (90,428) (272)

The Company has a net deferred tax asset amounting to ₦3.6 billion as at 31 December 2017 (2016: ₦2.7billion), arising mainly from unutilised capital allowances and tax losses that may be available for offsetagainst future taxable income. The Company did not recognise the deferred tax asset due to uncertaintiesrelating to the timing of the amount and reversal of these differences.

* Other payables comprise non income tax liabilities such as withholding tax, consumption tax andVAT.

48



49



49

22. Capital expenditure commitments 31 December

201730 June

2016₦'000 ₦'000

Capital commitmentsContracted 53,025 11,463 Authorised by the board of directors but not contracted 1,162,061 2,552,150

1,215,086 2,563,613

To be spent in the forthcoming financial year 224,139 294,752 To be spent thereafter 990,947 2,268,861

1,215,086 2,563,613

Future capital expenditure will be funded by internally generated cash flows and debt facilities.

23. Operating lease commitments

31 December 2017

30 June 2016

₦'000 ₦'000Less than one year - 5,424 Between one and five years - 452

- 5,876

24. Management and support fees

(a) Operating services agreement

The Company leases casino equipment under operating leases. The leases typically run for a period of oneto three years, with an option to renew the lease after that date. Lease rentals are paid on a monthly basisand included in operating expenses and as such there are no future lease payment payable in relation to thislease. During the year ended 31 December 2017, an amount of ₦7.8 million (2016: ₦6.5 million) wasrecognized as an expense in profit or loss in respect of operating leases.

The Company had an agreement with Sun International Management Limited (a subsidiary of SunInternational Limited) until 30 September 2017 to manage the Company's business. The agreement wasapproved by the National Office for Technology Acquisition and Promotion (NOTAP) on 19 May2009 with certificate number CR004719 and expired on 30 September 2017. In terms of thisagreement, the Company was obligated to pay the following annual fees to Sun InternationalManagement Limited:

At the end of the reporting period, the future minimum lease payments under the operating lease arepayable as follows:



50



50

-Basic fee

-Incentive fee

(b) Support services agreement

-Basic fee

-Incentive fee

(c) Management and support fees

(based on the structure above)31 December

201730 June

2016₦'000 ₦'000

Sun International Management Limited Basic fees 124,206 93,372Incentive fees 23,267

Ikeja Hotel Plc Basic fees 14,006Incentive fees 386 3,490

136,713 134,135

The agreement was renewed with Sun International (South Africa) Limited effective 1 October 2017for an extended period of 5 years, with a reduced incentive fee of 8% per annum of the adjusted netprofit of the Company. The new agreement has been lodged with NOTAP for approval. No accrualhas been recorded in the books for the new operating management agreement.

(6,510)

18,631

An incentive fee of 1.5% per annum of the adjusted net profit of the Company. This fee is exclusiveof any taxes and is denominated and payable in Naira.

A basic fee equal to 0.45% per annum of the gross revenue of the Company. This is exclusive of anytaxes and is denominated and payable in Naira.

A basic fee equal to 3% per annum of the gross revenue of the Company. This is exclusive of anytaxes and is denominated and payable in Naira.

An incentive fee of 10% per annum of the adjusted net profit of the Company for the period to 30September 2017. This fee is exclusive of any taxes and is denominated and payable in Naira.

The Company had an agreement with Ikeja Hotel Plc to provide support services to the Companyuntil 30 September 2017 when it was terminated. In terms of this agreement, the Company wasobligated to pay the following annual fees to Ikeja Hotel Plc as follows:



51



25. Related parties(a) Ultimate holding company

(b) Related party transactions

31 December 2017

30 June 2016

31 December 2017

30 June 2016

₦'000 ₦'000 ₦'000 ₦'000(i) Accounts payable

Sun International Management Limited (257,941) (192,283) (715) (7,959)Is a subsidiary of Sun International Limited,which is a shareholder in the Company.It had an operating service agreement with theCompany which expired in September 2017(Note24(a)).

Ikeja Hotel Plc (19,017) (17,496) (13,165) (16,322)

(ii) Other related party transactions include:AVI Services Limited (139,701) (80,289) - -

GM Ibru & Co (26,219) (12,563) (15,872) (14,000)

IHL Services Limited 2,438 (5,895) (25,821) (26,131)

The Company is a subsidiary of Sun International Limited incorporated in South Africa. Sun InternationalLimited held 49.33% of the issued and fully paid share capital of the Company as at 31 December 2017(2016: 49.33%).

Value of goods and services supplied (to)/from

the CompanyAmount due (to)/from the

Company

The transaction values and balances with related parties below exclude borrowings, the values of which aredisclosed in Note 18.

Is controlled by Goodie M. Ibru, OON, the formerChairman of the Company. It provides a stafftransport service to the Company and operates acar hire business at the hotel.

Is a firm of attorneys controlled by Goodie M.Ibru, OON, the former Chairman of the Company.It provides legal services to the Company andrents offices from the Company.

Is a shareholder in the Company and waspreviously controlled by Goodie M. Ibru, OON,the former Chairman of the Company.It had a support service agreement with theCompany (Note 24(b)).

This was previously controlled by Goodie M.Ibru, OON, the former Chairman of the Company.It provided company secretarial services to theCompany.

51



52



Lady Maiden Ibru - - - -

Guardian Press Limited (657) (2,056) (28) (149)

Estate of Late Dr Alex Ibru - - - -

Guy Saries Limited (3,053) (1,895) - -

(444,150) (312,477) (55,601) (64,561)

(iii) Accounts receivable (For hospitality services provided)Sun International Management Limited - 1,061 - 82 Ikeja Hotel Plc * 16,619 9,308 17,259 639

16,619 10,369 17,259 721

* The receivable from Ikeja Hotels from hospitality has been recorded as trade receivables

(c) Transactions with key management personnel

Key management personnel compensation

₦'000 ₦'000Short-term employee benefits 390,185 201,706 Post-employment benefit 41,125 13,853

431,310 215,559

Key management personnel compensation comprised: 31 December 2017

30 June 2016

Key management personnel are those persons having authority and responsibility for planning, directingand controlling the activities of the Company directly or indirectly, including any director (whetherexecutive or otherwise) of that Company. Refer to Note 6(d) for amounts paid to directors of the Companyduring the year.

Lady Ibru is the wife of the late Dr Alex Ibru, aformer director with an indirect shareholding inthe Company. Lady Ibru rents retail premises fromthe Company, for which no rental has beencharged.

A former director and indirect shareholder in theCompany. The estate rents the hotel penthousepremises from the Company, which is currentlythe subject of a legal dispute. No rental has beencharged.

This is controlled by Goodie M. Ibru, the formerChairman of the Company. It provides mediaagency to facilitate regulatory announcements onbehalf of the Company.

The Guardian Press Limited is controlled by LadyMaiden Ibru. The Company purchases newspapersfrom The Guardian Press Limited.

52



53

The

Tour

ist C

ompa

ny o

f Nig

eria

Plc

An

nual

Rep

ort

For t

he 1

8 m

onth

per

iod

ende

d 31

Dec

embe

r 201

7

26.

Segm

ent i

nfor

mat

ion

The

Com

pany

has

two

repo

rtabl

e se

gmen

ts, a

s des

crib

ed b

elow

.

Gam

ing:

This

incl

udes

the

prov

isio

n of

tabl

es a

nd sl

ots g

amin

g fa

cilit

ies.

Hos

pita

lity:

2017

2016

2017

2016

2017

2016

2017

2016

₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0R

even

ueTo

tal r

even

ue fo

r rep

orta

ble

segm

ents

1,9

96,2

96

1,4

02,5

41

3,1

12,0

74

1,6

53,2

58

-

-

5,

108,

370

3,

055,

799

Elim

inat

ion

of in

ter-s

egm

ent r

even

ue *

-

-

(201

,395

)

(164

,354

)

-

-

(201

,395

)

(16

4,35

4)R

epor

tabl

e se

gmen

t rev

enue

1,9

96,2

96

1,4

02,5

41

2,9

10,6

79

1,4

88,9

04

-

-

4,

906,

975

2,

891,

445

Prof

it be

fore

tax

Rep

orta

ble

segm

ent r

even

ue 1

,996

,296

1

,402

,541

2

,910

,679

1

,488

,904

-

-

4,90

6,97

5

2,89

1,44

5 Ex

pens

es

(839

,648

)

(656

,175

)

(1

,145

,581

)

(642

,242

) (

2,92

6,68

5) (

1,63

2,68

3) (

4,91

1,91

4) (

2,93

1,10

0)El

imin

atio

n of

inte

r-seg

men

t exp

ense

s

201

,395

164

,354

-

-

-

-

20

1,39

5

16

4,35

4 D

epre

ciat

ion

and

amor

tisat

ion

-

-

-

-

(81

0,74

9)

(56

8,62

8)

(81

0,74

9)

(56

8,62

8)N

et F

inan

ce C

osts

-

-

-

- (

2,60

3,93

9) (

5,10

3,16

2) (

2,60

3,93

9) (

5,10

3,16

2)Pr

ofit/

(Los

s) b

efor

e ta

x 1

,358

,043

910

,720

1

,765

,098

846

,662

(6

,341

,373

) (

7,30

4,47

3) (

3,21

8,23

2) (

5,54

7,09

1)R

epor

tabl

e se

gmen

t ass

ets

9,

907,

879

10,

546,

340

9,

907,

879

10,

546,

340

Rep

orta

ble

segm

ent l

iabi

litie

s 2

0,11

1,67

5 1

7,53

1,90

4 2

0,11

1,67

5 1

7,53

1,90

4

Maj

or c

usto

mer

* In

ter-s

egm

ent r

even

ue re

pres

ents

com

plim

enta

ry ro

om sa

les a

nd fo

od a

nd b

ever

age

reve

nue

whi

ch is

incl

uded

in h

ospi

talit

y re

venu

e.

Rev

enue

from

one

cust

omer

does

not

repr

esen

tup

toor

exce

ed10

%of

the

Com

pany

'sto

tal

reve

nue.

Ther

efor

e,in

form

atio

non

maj

orcu

stom

ers

isno

tpr

esen

ted.

This

cons

ists

ofth

esa

leof

hote

lroo

mac

com

mod

atio

n,sa

leof

food

and

beve

rage

sin

the

Com

pany

'sre

stau

rant

san

dba

rs,a

sw

ella

sve

nue

hire

,poo

lclu

bsu

bscr

iptio

ns a

nd e

ntra

nce

fees

, par

king

and

laun

dry

char

ges,

and

othe

r mis

cella

neou

s rev

enue

.

Una

lloca

ted

Cos

tsre

pres

ents

supp

ort

serv

ices

toth

eab

ove

segm

ents

,and

incl

udes

finan

cean

dad

min

istra

tion,

hum

anre

sour

ces,

info

rmat

ion

tech

nolo

gy,

secu

rity

and

othe

r pro

perty

rela

ted

serv

ices

.

Info

rmat

ion

rega

rdin

gth

ere

sults

ofea

chre

porta

ble

segm

enti

spr

ovid

edbe

low

.Pe

rfor

man

ceis

mea

sure

dba

sed

onse

gmen

tpro

fitbe

fore

tax,

asin

clud

edin

the

Com

pany

's in

tern

al m

anag

emen

t rep

orts

that

are

revi

ewed

by

the

Com

pany

's G

ener

al M

anag

er.

Gam

ing

Hos

pita

lity

Una

lloca

ted

Tota

l

53



54

The

Tour

ist C

ompa

ny o

f Nig

eria

Plc

An

nual

Rep

ort

For t

he 1

8 m

onth

s per

iod

ende

d 31

Dec

embe

r 201

7 54

27.F

inan

cial

ris

k m

anag

emen

t and

fair

val

ues

The

Com

pany

has

exp

osur

e to

the

follo

win

g ris

ks fr

om it

s use

of f

inan

cial

inst

rum

ents

:

-

Liq

uidi

ty ri

sk-

C

redi

t ris

k-

M

arke

t ris

k-

C

apita

l man

agem

ent r

isk

Ris

k m

anag

emen

t fra

mew

ork

(a)

Liq

uidi

ty r

isk

The

follo

win

g ar

e th

e m

atur

ity a

naly

sis o

f con

tract

ual u

ndis

coun

ted

finan

cial

liab

ilitie

s (in

clud

ing

prin

cipa

l and

inte

rest

pay

men

ts):

Liqu

idity

risk

isth

eris

kth

atth

eC

ompa

nyw

illno

tbe

able

tom

eeti

tsfin

anci

alob

ligat

ions

asth

eyfa

lldu

e.Th

eC

ompa

nyat

allt

imes

mai

ntai

nsad

equa

teco

mm

itted

cred

itfa

cilit

ies

inor

dert

om

eeta

llits

com

mitm

ents

asan

dw

hen

they

fall

due.

Rep

aym

ento

fbor

row

ings

isst

ruct

ured

soas

tom

atch

the

expe

cted

cas

h flo

ws f

rom

ope

ratio

ns to

whi

ch th

ey re

late

.

The

boar

dof

dire

ctor

sha

sov

eral

lres

pons

ibili

tyfo

rthe

esta

blis

hmen

tand

over

sigh

toft

heC

ompa

ny’s

risk

man

agem

entf

ram

ewor

k.Th

eB

oard

has

esta

blis

hed

the

Ris

kM

anag

emen

tCom

mitt

ee,w

hich

isre

spon

sibl

efo

rde

velo

ping

and

mon

itorin

gth

eC

ompa

ny’s

risk

man

agem

entp

olic

ies.

The

com

mitt

ee re

ports

regu

larly

to th

e B

oard

of D

irect

ors o

n its

act

iviti

es.

The

Com

pany

’sris

km

anag

emen

tpol

icie

sar

ees

tabl

ishe

dto

iden

tify

and

anal

yse

the

risks

face

dby

the

Com

pany

,to

seta

ppro

pria

teris

klim

itsan

dco

ntro

ls,a

ndto

mon

itor

risks

and

adhe

renc

eto

limits

.Ris

km

anag

emen

tpol

icie

san

dsy

stem

sar

ere

view

edre

gula

rlyto

refle

ctch

ange

sin

mar

ket

cond

ition

sand

the

Com

pany

’sac

tiviti

es.T

heC

ompa

ny,t

hrou

ghits

train

ing

and

man

agem

ents

tand

ards

and

proc

edur

es,a

imst

ode

velo

pa

disc

iplin

edan

d co

nstru

ctiv

e co

ntro

l env

ironm

ent i

n w

hich

all

empl

oyee

s und

erst

and

thei

r rol

es a

nd o

blig

atio

ns.

The

Com

pany

'sA

udit

Com

mitt

eeov

erse

esho

wm

anag

emen

tmon

itors

com

plia

nce

with

the

Com

pany

’sris

km

anag

emen

tpol

icie

san

dpr

oced

ures

,an

dre

view

sth

ead

equa

cyof

the

risk

man

agem

ent

fram

ewor

kin

rela

tion

toth

eris

ksfa

ced

byth

eC

ompa

ny.T

heC

ompa

nyA

udit

Com

mitt

eeis

assi

sted

inits

over

sigh

tro

leby

Inte

rnal

Aud

it.In

tern

alA

udit

unde

rtake

sbo

thre

gula

ran

dad

hoc

revi

ews

ofris

km

anag

emen

tco

ntro

lsan

dpr

oced

ures

, the

resu

lts o

f whi

ch a

re re

porte

d to

bot

h se

nior

man

agem

ent a

nd th

e A

udit

Com

mitt

ee.



55

The

Tour

ist C

ompa

ny o

f Nig

eria

Plc

An

nual

Rep

ort

For t

he 1

8 m

onth

per

iod

ende

d 31

Dec

embe

r 201

7

Car

ryin

g A

mou

nt

Con

tract

ual

cash

flow

sO

n de

man

d or

no

t exc

eedi

ng

6 m

onth

s

Mor

e th

an 6

m

onth

s but

not

ex

ceed

ing

1 ye

ar

Mor

e th

an 1

ye

ar b

ut n

ot

exce

edin

g 2

year

s

Mor

e th

an 2

ye

ars b

ut n

ot

exce

edin

g 5

year

s

Mor

e th

an 5

ye

ars

31 D

ecem

ber 2

017

₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0

Fina

ncia

l lia

bilit

ies

Bor

row

ings

18,

767,

128

24,

097,

057

-

-

-

-

24,

097,

057

Trad

e pa

yabl

es

94,4

78

94

,478

94,

478

-

-

-

Oth

er p

ayab

les

624

,997

6

24,9

97

3

5,09

6

5

89,9

01

-

-

-

Am

ount

s due

to re

late

d pa

rties

55

,601

55,6

01

5

5,60

1

-

-

-

-

Acc

rued

exp

ense

s

3

09,2

43

309

,243

309,

243

-

-

-

-

C

asin

o Lo

yalty

Pro

gram

me

21

,607

21,6

07

2

1,60

7

-

-

-

-

19,

873,

054

25,

202,

983

51

6,02

5

5

89,9

01

-

-

2

4,09

7,05

7

30 J

une

2016

₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0₦'00

0Fi

nanc

ial l

iabi

litie

sB

orro

win

gs 1

6,18

7,08

5 2

0,78

4,27

2

-

-

-

-

2

0,78

4,27

2 Tr

ade

paya

bles

73

,125

73,1

25

7

3,12

5

-

-

-

O

ther

pay

able

s

4

58,8

04

458

,804

10,

174

448

,630

-

-

-

A

mou

nts d

ue to

rela

ted

parti

es

64,5

61

64

,561

64,

561

-

-

-

-

A

ccru

ed e

xpen

ses

555

,691

5

55,6

91

55

5,69

1

-

-

-

-

Cas

ino

Loya

lty P

rogr

amm

e

33,4

66

33

,466

33,

466

-

-

-

-

17,

372,

732

21,

969,

919

73

7,01

7

4

48,6

30

-

-

2

0,78

4,27

2 55



56



56

(b) Credit risk

Exposure to credit risk The maximum exposure to credit risk at the reporting date was:

31 December 2017

30 June 2016

₦'000 ₦'000Trade receivables (Note 15) 132,267 45,899 Cash and bank balances (Note 21) 1,337,418 1,584,451

1,469,685 1,630,350

The aging of trade receivables at the reporting date was:

Gross Impairment Gross Impairment31 December

201731 December

201730 June

201630 June

2016₦'000 ₦'000 ₦'000 ₦'000

Not past due 46,217 - 19,261 - Past due by 1 to 30 days 42,951 - 5,487 - Past due by 31 to 60 days 20,967 - 10,204 - Past due by 61 to 90 days 4,083 - 3,870 - Past due by more than 91 days 111,633 (93,584) 99,205 (92,128)

225,851 (93,584) 138,027 (92,128)

31 December 2017

30 June 2016

₦'000 ₦'000Balance at beginning 92,128 114,803 Impairment loss/(gain) recognised 1,456 (22,675)Balance at year end 93,584 92,128

Credit risk arises from trade and other receivables (excluding prepayments and VAT), and cash and cashequivalents. The granting of credit is controlled by specific application and account limits. Cash deposits areonly placed with high quality financial institutions.

The maximum exposure to credit risk is represented by the carrying amount of each financial assetsdetermined to be exposed to credit risk.

Carrying amount

The Company’s most significant customer accounts for ₦36 million of the trade and receivables carryingamount at 31 December 2017 (2016: ₦27 million).

The movement in the allowance for impairment in respect of trade and other receivables during the year wasas follows:

The Company has no significant concentrations of credit risk with respect to trade receivables, due to awidely dispersed customer base.



57



57

(c) Market risk

I. Foreign currency risk

31 December 2017

30 June 2016

₦'000 ₦'000Financial AssetsUS Dollar ($) 3,608 4,449 Euro (€) 103 265 Pound Sterling (£) 20 26 South African Rand (R ) 54 2

Financial liabilitiesUS Dollar ($) 61,694 58,106 South African Rand - 421

Spot Average Spot Average

US Dollar ($) 1 305.50 304.32 282.50 196.49Euro (€) 1 366.26 341.47 313.60 292.80Pound Sterling (£) 1 412.97 393.02 379.54 217.46South African Rand (R ) 1 28.83 23.75 18.92 13.83

31 December 2017 30 June 2016

Exposure to currency risk

The following significant exchange rates applied during the year:

The impairment loss as at 31 December 2017 relates to several customers that are not expected to be able topay their outstanding balances, mainly due to economic circumstances. The Company believes that theunimpaired amounts past due are still collectible, based on historic payment behaviour and extensiveanalyses of the underlying customers’ credit ratings. The impairment loss is included in property andadministrative cost in the statement of comprehensive income.

Based on historic default rates, the Company believes that, apart from the above, no additional impairmentallowance is necessary in respect of trade receivables past due.

Market risk includes foreign currency risk, interest rate risk and other price risk. The Company's exposure toother price risks is limited as the Company does not have any investments which are subject to changes inequity prices.

The summary quantitative data about the Company’s exposure to currency risk as reported to theManagement of the Company based on its risk management policy was as follows:

The Company monitors the movement in currency rates on a going concern basis to mitigate the risk that themovements in the exchange rates may adversely affect the Company's income or value of their holdings offinancial instruments.

Included in the statements of financial position are the following amounts denominated in currencies otherthan the functional currency of the Company (Naira). The currency risk is the risk that the fair value offuture cash flows of a financial instrument will fluctuate due to the changes in foreign exchange rates.



58



58

Foreign currency sensitivity

31 December 2017

30 June 2016

₦'000 ₦'000

1,767,134 1,507,305 Increase in loss before tax 1,767,134 1,507,305

II. Cash flow interest rate risk

(d) Capital management risk

GearingThe gearing ratios were as follows:

31 December 2017

30 June 2016

₦'000 ₦'000Total borrowings (note 18) 18,767,128 16,187,085 Less cash and cash equivalents (1,363,745) (1,612,776)

Net debt 17,403,383 14,574,309 Total equity (10,203,796) (6,985,564)

Total capital 7,199,587 7,588,745

Net debt to equity ratio -171% -209%

There were no changes to the Company's approach to capital management during the year.

The Company is not subject to externally imposed capital requirements.

The Company's objectives when managing capital are to safeguard the Company's ability to continue as agoing concern in order to provide benefits for its stakeholders and to maintain an optimal capital structure toreduce the cost of capital.

The board of directors monitors the level of capital, which the Company defines as total share capital andshare premium.

A 10% strengthening in the Naira against the above foreign currency assets and liabilities at 31 December2017 would have an equal but opposite effect to the amounts shown above, on the basis that all othervariables remain constant.

The Company's cash flow interest rate risk could arise from cash and cash equivalents. The Company doesnot have borrowings with variable interest rates.

A 10% weakening in the Naira against the above foreign currency assets and liabilities at 31 December 2017would decrease equity and increase the loss before tax by the amounts shown below. This analysis assumesthat all other variables, in particular interest rates, remain constant. The analysis was performed on the samebasis as at 30 June 2016:

In order to maintain or adjust this capital structure, the Company may issue new shares, adjust the amount ofdividends paid to shareholders, return capital to shareholders or buy back existing shares.

Decrease in equity



59



59

(e) Fair values(i) Accounting classification and fair values

(ii) Measurement of fair valuesValuation techniques and significant unobservable inputs

28. Contingencies

29. Events after reporting date

30. Shareholder dispute litigationThe Company has been involved in on-going shareholder and related party disputes as follows:

(a)

The fair value of the Company's financial assets and liabilities are categorised as Level 3 at 31 December2017. This is because the future cashflows of the financial instruments are based on contractual amounts asthere are no recent observable arm's length transactions in the market.

The fair values of financial assets and liabilities are not significantly different from the carrying amountsshown in the statement of financial position due to the immaterial impact of discounting.

The fair values were determined on the same basis in prior year and there have been no transfer betweenlevel during the financial reporting period.

On 23 September 2011, Omamo Investment Corporation (“Omamo”), instituted a winding up petition againstthe Company, on grounds that it believed that the Company was insolvent and that the Company had refusedto repay its loan when Omamo demanded repayment. This petition was dismissed by the Federal High Court.As at 31 December 2017, the total loan balance payable to Omamo was ₦6.0 billion (30 June 2016: ₦5.2billion). Based on the formal agreements duly executed by all the loan creditors (refer note 18), the loans arerepayable at the discretion of the board of directors, taking into account availability of funds and workingcapital requirements of the Company provided specific EBITDA targets have been met. Accordingly, noneof the loans were due for repayment as at 31 December 2017. There has been no further update in the currentfinancial year.

The Company is subject to various pending litigations and claims arising in the normal course of business.The contingent liabilities in respect of these pending litigation and claims amounted to ₦1.4 billion as at 31December 2017 (2016: ₦1.3 billion). In addition, the Company is currently undergoing tax regulatoryreviews with respect to the financial statements of the financial year 2009 to 2015. As at the date of thisreport, the amount of the obligation with respect to the regulatory review has not been disclosed because theamount cannot be measured with sufficient reliability. In the opinion of the directors, no material loss isexpected to arise from these claims and audits. Therefore, no provision for any loss arising has been made inthe financial statements.

Effective 1 January 2018, Punuka Nominees Limited, a company associated with the Acting Chairman of theCompany was appointed as the Company Secretary to the Company. This is in line with Section 277 of theCompanies and Allied Matters Act, CAP C20 Laws of the Federation 2004, that requires directors todisclose any interests in contracts to be entered into by the Company.

Other than this, there were no events after the reporting date that could have had a material effect on thefinancial statements of the Company that have not been provided for or disclosed in these financialstatements.

Trade and other receivables, cash and cash equivalents, loans and borrowings, trade and other payables arethe Company's financial instruments.



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(b)

(c)

(d)

31. Going concern

On 21 May 2012, Omamo Investment Corporation served a notice of demand on the Company, seekingrepayment of its loan. In response thereto on 8 June 2012, the Company applied to the Federal High Courtseeking an enforcement order of the terms of its agreement with Omamo as well as a shareholder in theCompany and related party to Omamo namely Oma Investments Limited ("Oma"). With respect to the latteraction, the court delivered judgement on 3 October 2013, in which it declined to grant the Company'sapplication for an enforcement order. The Company's Solicitors are currently engaged in the appeal againstthis decision. The Appeal Court granted an amended notice to appeal, and the appeal stands adjourned to 20November 2017, and subsequently adjourned further to 16 April 2018 for hearing of pending applications.

On 30 October 2012, in a separate suit, Oma Investment Ltd petitioned the Federal High Court challengingthe legality of the hotel management agreement currently in place for the management of The TouristCompany of Nigeria Plc (TCN). TCN has raised a preliminary objection. On 30 January 2014, the Courtdismissed the preliminary objection. Subsequently, TCN’s solicitors have filed a motion for stay ofproceedings transmitted to the Court of Appeal. On 3 July 2014 the Federal High Court adjourned the mattersine die (indefinitely) until the matter before the Court of Appeal has been determined. The Court of Appealadjourned the matter to 22 September 2016. At the next adjourned date, 16 February 2017, the matter wasadjourned to 2 July 2018 for hearing of the Appeal. The Economic and Financial Crimes Commission(EFCC) commenced its investigation into the case two years ago. In the current year, no report has beenissued as at the date of the finalisation of these financial statements.

On 30 October 2012, Omamo and Oma filed a subsequent action against the Company, challenging (interalia) further aspects of the agreements to which they are signatories. On 12 November 2013, the matter cameup for hearing at the trial court where a motion for an injunction restraining Oma from making a furtherdemand for repayment was declined. The Company's solicitors have proceeded to file a similar motion withthe Court of Appeal. Until the motion of appeal is heard, Oma is effectively restrained from taking furtheraction. As at the date of this financial statement, the court had not yet decided on this action.

The directors are confident that judgment will be delivered in the Company’s favour, and that the abovelitigation contingency will not materialise into a loss for the Tourist Company of Nigeria Plc (TCN).

The Company incurred losses after taxation amounting to ₦3.2 billion (2016: ₦5.5 billion) for the yearended 31 December 2017 and as of that date had a net liability of ₦10.2 billion (2016: ₦7.0 billion).

As noted in Note 30(d), the Company is involved in a lawsuit in which Oma Investment Ltd, a shareholderpetitioned the Federal High Court challenging the legality of the hotel management agreement for themanagement of The Tourist Company of Nigeria Plc (TCN). This case remains adjourned sine die and hasnot been concluded. Moreso, the Economic and Financial Crimes Commission (EFCC) has commencedinvestigation into the matter, but no report has been issued as at the date of approving the financialstatements. Furthermore, the majority shareholder of the Company, Sun International Limited (SIL) hasexpressed its decision to disinvest in the Company and exit Nigeria. The process of the disinvestment is stillat early stages. Accordingly, the full implications on the business are yet to be fully determined. In themeanwhile, the Company continues to trade as normal.



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The Company incurred losses after taxation amounting to ₦3.2 billion (2016: ₦5.5 billion) for the year ended 31 December 2017 and as of that date had a net liability of ₦10.2 billion (2016: ₦7.0 billion).

As noted in Note 30(d), the Company is involved in a lawsuit in which Oma Investment Ltd, a shareholderpetitioned the Federal High Court challenging the legality of the hotel management agreement currently inplace for the management of The Tourist Company of Nigeria Plc (TCN). This case remains adjourned sinedie and has not been concluded. Moreso, the Economic and Financial Crimes Commission (EFCC) hascommenced investigation into the matter, but no report has been issued as at the date of approving thefinancial statements. Furthermore, the majority shareholder of the Company, Sun International Limited (SIL)has expressed its decision to disinvest in the Company and exit Nigeria. The process of the disinvestment isstill at early stages. Accordingly, the full implications on the business are yet to be fully determined. In themeanwhile, the Company continues to trade as normal.

The directors have made an assessment of the Company’s ability to continue to trade despite beingtechnically insolvent. Discussions are ongoing regarding improving the capital structure of the Company.Therefore, the directors have no reason to believe the Company will not remain liquid and able to meet itsobligations as they become due and payable in the year ahead. The directors will continue to review theliquidity position of the Company on an annual basis.

In addition, the Company has signed a new operating management agreement with Sun International (SouthAfrica) Limited (SISA), a subsidiary of Sun International Limited and expects SISA to fully fulfill itsobligations as contained in the management agreement. The new management agreement became effective atthe expiration of the existing management agreement in September 2017. The Company has lodged anapplication with NOTAP for approval.

These financial statements have been prepared on the basis of accounting policies applicable to a goingconcern, as in the opinion of the Directors’ the Company based on existing plans, will become profitable inthe years ahead.

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62

62

OTHER NATIONAL DISCLOSURES



63



Other national disclosuresValue added statementFor the period/year ended

31 December 30 June2017 2016₦'000 % ₦'000 %

Revenue 4,906,975 2,891,445

Bought-in materials and services: Amount paid to suppliers (2,859,037) (1,614,996) Management and support fees (136,713) (134,135)

(2,995,750) (1,749,131)

Finance income 1,472 536

Valued added 1,912,697 100 1,142,850 100

Distribution of Value Added:

To Government:Taxation - - - -

To Employees:Salaries, wages and fringe benefits 1,714,769 90 1,017,615 89

To Providers of Finance:Finance costs 2,605,411 136 5,103,698 447

Retained in the Business:For replacement of property, plant and equipment 804,196 42 547,355 48 For replacement of intangible assets 6,553 - 21,273 2 To deplete reserves (3,218,232) (168) (5,547,091) (486)

Valued added 1,912,697 100 1,142,850 100

Value added represents the additional wealth which the Company has been able to create by its own employees'efforts. This statement shows the allocation of that wealth between government, employees, providers of capitaland that retained in the business.

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64



64

Other national disclosuresFinancial summary

Statement of financial position31 December

201730 June

201630 June

201530 June

201430 June

2013₦'000 ₦'000 ₦'000 ₦'000 ₦'000

AssetsNon-current assets 8,136,547 8,740,461 9,010,340 9,414,139 9,648,752 Current assets 1,771,332 1,805,879 1,375,885 1,183,749 1,439,408 Total Assets 9,907,879 10,546,340 10,386,225 10,597,888 11,088,160

Equity and liabilitiesCapital and reserves 1,203,853 1,806,400 Non-current liabilities 18,767,128 16,187,085 10,853,215 8,158,540 7,762,355 Current liabilities 1,344,547 1,344,819 971,483 1,235,495 1,519,405 Total equity and liabilities 9,907,879 10,546,340 10,386,225 10,597,888 11,088,160

Statement of comprehensive income

Revenue 4,906,975 2,891,445 3,209,322 3,386,066 3,458,485

Loss before taxationTaxation - - - - 388,894 (Loss)/profit after tax 125,050

Per share data(Loss)/earnings per ordinary share (Kobo) 6

Net assets per ordinary share (Kobo) 54 80

(263,844)

(247) (118) (27)

(10,203,796) (6,985,564) (1,438,473)

(3,218,232)

(3,218,232)

(5,547,091)

(5,547,091)

(2,642,326)

(2,642,326)

(143)

(454) (311) (64)

(602,547)

(602,547)

Documents

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