CONTENTS 01 CONTENTS

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2 0 1 1 A N N U A L R E P O R T A N D A C C O U N T S

CONTENTS

CONTENTSVision and Mission 2

Value, Quality Policy and Network 3

Company and Subsidiaries 4

Notice of Annual General Meeting 5 - 6

Directors, Professional Advisers, etc 7

Current Board of Directors 8 - 9

Results at a Glance 10

Chairman’s Statement 11 - 12

Report of the Directors 13 - 17

Corporate Governance 18

Statement of the Directors’ Responsibilities 19

Report of the Audit Committee 20

Report of the Independent Auditors 21

Statement of Significant Accounting Policies 22 - 24

Consolidated Profit and Loss Account 25

Consolidated Balance Sheet 26

Statement of Cash Flows 27

Notes to the Financial Statement 28 - 40

Consolidated Statement of Value Added 41

Financial Summary (Group) 42

Financial Summary (Company) 43

Share Capital History 44

Management Team 45

Corporate Social Responsibilities Report 46

Proxy Form 47

02


Our

VISION

Our

MISSION

To be the logistics company of first choice known for global best practices

We will provide value added logistics solutions that will be secure, prompt and effective through:

VISION AND MISSION

- People: Employing, developing, and retaining a well-motivated team oriented workforce, sharing common ideals and values.

- Service: Evolving and marketing a range of technology-driven services designed to meet the diverse needs of customers.

- Profit: Ensuring that our operations reflect a commitment to quality and are profitable at all times through prudent management.

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VALUE, QUALITY POLICY ANDNETWORK

VALUES

Our values are what we hold dear to our heart in the course of our business operations. The industry and all stakeholders will know us for the following:

Ethical practice: Red Star Express shall play by the rules, doing its business in line with International and local laws. The company will be professional in the discharge of its duties to all stakeholders and it will demand the same from all.

Relationship building: We will strive to establish a direct one to one relationship with every of its customers by satisfying its customers through customisation of service

Entrepreneurship: We will continue to identify new opportunities and discover new ways to do old processes through its people, its processes and technology

Excellence: Red Star Express will promote excellence through optimal productivity of all people in the company at all times

QUALITY POLICY

Red Star Express will meet supply chain management and business support services to her customers at all times by satisfying their changing needs and continually improving on the quality of service.

We will achieve this by using modern technology and employing highly skilled and well-motivated work force to ultimately maximize returns to stakeholders.

NETWORK

l 169 offices within Nigeria

l Deliveries to additional 1,500 communities

l Over 1,200 highly trained staff

l Over 500 vehicle fleet

04


COMPANY AND SUBSIDIARIES

* Express delivery of documents and parcels * International pick up and delivery

* Prompt delivery of bulk mails*

* Nationwide Haulage * Reversed logistics * Warehousing * Inventory Management *Dedicated truck Service

* Parcel consolidation and bulk deliveries *

* Air and Sea Freight* Import and Export* Custom Clearance * International and Domestic Freight Forwarding

* Packing and removal of personal effects* Dangerous goods Handling* Regulatory documentation*

* Mail management services * Dedicated despatch service* Pool Vehicle service * Document archival*

Red Star Express

Red Star Logistics

Red Star Freight

Red Star Support Services

Licensee of Federal Express Corporation

Subsidiary of Red Star Express Plc



05


NOTICE OF ANNUAL GENERAL MEETING

OTICE IS HEREBY GIVEN that the 18th Annual General Meeting of Red Star Express Plc. will be Nheld at the Welcome Centre Hotel, International Airport Road, Mafoluku, Lagos on Thursday September 8, 2011 at 11.00a.m. to transact the following:-

ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the year ended 31st March 2011 and the Report of the Directors and Auditors thereon.

2. To declare a dividend.

3. To re-elect Directors.

4. To authorize the Directors to fix the remuneration of Auditors.

5. To elect members of the Audit Committee.

BY ORDER OF THE BOARD

FRANCES NDIDI AKPOMUKACOMPANY SECRETARY/LEGAL ADVISER

Registered Office70 International Airport RoadMafoluku, Lagos.

NOTE:

1. PROXYA member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company. An unstamped form of proxy is attached and if it is to be valid for the purpose of the meeting, it must be completed and duly signed by the appointing shareholder and deposited at the Registrars office, Intercontinental Registrars Limited, IPL Plaza, 274, Murtala Mohammed Way, Alagomeji, Yaba, Lagos not later than 48 hours before the time for holding the meeting. A corporate member being a member of the company is required to execute a proxy under seal.

2. CLOSURE OF REGISTER AND TRANSFER OF BOOKSThe Register of Members and Transfer of Books of the Company will be closed from August 19, 2011 through 24th August 2011 both dates inclusive to enable the presentation of an up to date Register.

3. DIVIDEND PAYMENTIf the recommendation for dividend is approved, dividend of 30 kobo per 50 kobo share will be posted on September 15, 2011 to all shareholders whose names appear on the Register of the company at the close of business on August 18, 2011. Shareholders who have

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NOTICE OF ANNUAL GENERAL MEETING contd.

completed the e-dividend Mandate Form will receive a direct credit of the dividend into their bank accounts (via e-dividend) on September 15, 2011 while dividend warrants for shareholders who have not completed the e-dividend Mandate Form shall be posted on September 15, 2011.

4. NOMINATION FOR AUDIT COMMITTEEIn accordance with section 359(5) of the Companies and Allied Matters Act, CAP 20 LFN 2004, any member may nominate another shareholder as a member of the Audit Committee, by giving notice in writing to such nomination to the Company Secretary at least 21 days before the Annual General Meeting.

5. UNCLAIMED DIVIDEND WARRANTS AND SHARE CERTIFICATESSeveral dividend warrants and share certificates remain unclaimed and are yet to be presented for payment returned to the Company for revalidation or collected. We implore shareholders who are yet to update their contact details to kindly contact the Company's Registrars or the Company Secretary.

07


DIRECTORS, PROFESSIONAL ADVISERSetc.

DIRECTORS: Dr. Mohammed H. Koguna - Chairman Sule Umar Bichi - Managing Muyiwa Olumekun - Executive Mazi Sonny Allison Barr. Olayemi PetersMr. Isaac OrolugbagbeAlh. Aminu Dangana

SECRETARY: Frances Ndidi Akpomuka

REGISTERED OFFICE: 70, International Airport Road, Isolo, Lagos.

AUDITORS: Akintola Williams Deloitte[Chartered Accountants]235 Ikorodu Road, Ilupeju, Lagos

SOLICITORS: Charles Uwensuyi-Edosomwan & Co.195A, Corporation Drive,Dolphin Estate,Ikoyi, Lagos.

REGISTRARS: Intercontinental Registrars Limited IPL Plaza, 274, Murtala Mohammed Way,Alagomeji, Yaba,Lagos.

PRINCIPAL BANKERS: Guaranty Trust Bank PlcDiamond Bank PlcZenith Bank PlcFirst City Monument Bank PlcOceanic Bank PlcAccess Bank PlcSkye Bank PlcBank PHB PlcFirst Bank of Nigeria Plc

Stanbic IBTC Bank Plc

Fidelity Bank Plc

Finbank Plc

United Bank for Africa Plc

Ecobank Plc

Sterling Bank Plc

08


CURRENT BOARD OF DIRECTORS

MUYIWA OLUMEKUNExecutive Director

SULE UMAR BICHIManaging Director/CEO

DR. MOHAMMED H. KOGUNAChairman

09


CURRENT BOARD OF DIRECTORS

MAZI SONNY ALLISONDirector

OLAYEMI PETERSDirector

ISAAC OROLUGBAGBEDirector

ALH. AMINU DANGANADirector

10


RESULTS AT A GLANCE

2011 2010 Increase/(Decrease) N'000 N'000 %

Turnover 4,207,877 4,139,818 2

Profit before Tax 411,301 473,614 (13)

Profit after Tax 333,594 180,516 85

Proposed Dividend 176,849 176,849 -

Share Capital 294,748 294,748 -

Shareholders' Fund 1,440,431 1,283,686 12

PER SHARE DATA

Number of N1 Ordinary shares 589,496,760 589,496,760 - ========== ===========

Earnings per share (Naira) Basic 0.57 0.31 84

Proposed dividend per share 0.30 0.30 -

Dividend cover (times) 1.89 1.02 85

Assets per share 2.44 2.18 12

Number of employees 1,405 1,114 26

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CHAIRMAN’S STATEMENT

Distinguished Shareholders, Ladies and Gentlemen

t is with great pleasure that I welcome you to the 18th Annual General Meeting of your company, IRed Star Express Plc and to present to you our performance for the financial year ended March 31, 2011.

You will recall that Red Star Express was listed on the Nigerian Stock Exchange four years ago. During the year under review, the company was able to post a moderate growth in revenue and profit after tax despite obvious challenges in the global economic environment.

BUSINESS OPERATING ENVIRONMENTThe global economy which started recovering in 2009 after the meltdown, slowed down again in the year under review. With the debt crises in the Euro zone and the challenges still faced by the Americans, global economy has remained rather fragile.

In Nigeria, business operating environment continued to be burdened by plethora of Social, Political and Economical challenges. Even though 2011 elections were generally successful, the resultant security challenges in some sections of the country as well as unexpected public holiday affected business significantly.

During the year under review, the Courier/ Logistics industry came under more intense operating pressure. With the number of providers still in rising, competition in the industry has become more severe.

Poor state of infrastructure especially road network coupled with the current devaluing of the naira, double digit inflation rate as well as skyrocketing interest rates, impacted negatively on the cost of doing business significantly during the year.

I am however happy to inform you that inspite of all these, your company still managed to remain reasonably profitable.

FINANCIAL PERFORMANCE The harsh operating environment notwithstanding, our Company achieved a growth of 2% in revenue moving from N4.14 billion in 2009/2010 to N4.2 billion in 2010/2011. The profit before tax decreased from N473.61 million to N411.30 million, while the profit after tax grew by 85% moving from N180.5 million to N333.6 million.

DIVIDEND Based on the above performance, the Board of Directors is recommending a gross cash dividend of 30kobo each for every 50kobo share making a total dividend for the year amounting to N176.8 million. The dividend will be paid subject to the deduction of the appropriate withholding tax upon approval at this meeting.

CORPORATE SOCIAL RESPONSIBILITYIn continuation of its avowed commitment to reward academic excellence in public secondary schools in Nigeria, Red Star Foundation, expanded its scope of activities during the year under review.

In addition to extending the scholarship programme to the North, the Foundation also commenced the “I Care Project”. The “I Care Project”is aimed at mobilizing staff of Red Star Express to donate non-perishable items to the less privileged in the society. One orphanage and a Lagos State Government Old Peoples’ Home became the first beneficiaries of the project.

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CHAIRMAN’S STATEMENT contd.

Presently, the scholarship scheme has 32 beneficiaries all over the country in addition to the 9 newly awarded scholars from the Northern region.

May I also inform you that the sum of N1,667,970.00 (One Million Six Hundred and Sixty-Seven Thousand, Nine Hundred and Seventy Naira Only) being 0.5% of profit after tax has again been appropriated to the foundation to boost its activities.

FUTURE OUTLOOK As the Federal Government settles down and the domestic banking reform successfully implemented, the Nigerian economy promises to grow significantly in the new financial year. Indeed the IMF projects that the economy will grow at least 8.5% this year. Following the adoption of a new strategic vision for the company, your company is fully on course to becoming an integrated Logistic One Stop shop.

In a couple of months we will be launching a number of new services into the market. This we believe to a large extent will expand our revenue base and signal in concrete terms our desire to expand our market share.

CONCLUSIONOur sincere appreciation goes to our shareholders, customers, employees and other stakeholders for their continued support, which has enabled us to record another profitable year. We look forward with great excitement to more successful years ahead as we work hard to enhance returns to shareholders, while continuing in our pursuit to be the logistics company of first choice known for global best practices.

Once again, thank you and welcome to the 2011 Annual General Meeting

Dr. Mohammed H. KogunaDurbin Kano

13


REPORT OF THE DIRECTORSFor The Year Ended 31 March 2011

The Directors present their annual report on the affairs of Red Star Express Plc. (“the Company”) and its subsidiaries (“the Group”) together with the Audited Financial Statements and auditors' report for the year ended 31st March, 2011, which disclose the state of affairs of the Company.

In the opinion of the Directors, the state of the Company's affairs was satisfactory, and no events have occurred since the balance sheet date, which would materially affect the financial statements as presented.

LEGAL FORMThe Company was incorporated in Nigeria under the Companies and Allied Matters Act as a private limited liability company on 10th July, 1992 and commenced business on 12th October, 1992. The Company became a public Company on July 9, 2007 and subsequently listed its shares on the Nigerian Stock Exchange (NSE) on November 14, 2007. The Company has three (3) subsidiaries; Red Star Freight Limited, Red Star Logistics Limited and Red Star Support Services Limited. The results of the Company's subsidiaries have been consolidated in these financial statements.

PRINCIPAL ACTIVITIESThe Company is principally engaged in the provision of courier services, Mail Management Service, freight services, logistics, ware housing and general haulage.

OPERATING RESULTS AND DIVIDEND

The results for the year can be summarized as follows:

Group Group Company CompanyMarch '11 March '10 March '11 March '10

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

Turnover 4,207,877 4,139,818 2,924,593 3,034,108PBT 411,301 473,614 198,936 330,693Tax (77,707) (293,098) (10,516) (84,901)PAT 333,594 180,516 209,452 245,792 DIVIDEND

The Directors pursuant to provisions of section 379 of the Companies and Allied Matters act of Nigeria, proposed a dividend of 30kobo per share from the retained earnings account as at 31st March 2011. This is subject to approval by shareholders at the Annual General Meeting.Payment of dividend is subject to withholding tax at 10%.

DIRECTORS The Directors who held office during the year and to the date of this report are:

Dr. Mohammed H. Koguna ChairmanMr. Sule Umar Bichi Managing DirectorMr. Muyiwa Olumekun Executive DirectorMazi Sonny Allison Non Executive DirectorMr. Olayemi Peters Non Executive DirectorMr. Isaac Orolugbagbe Non Executive DirectorAlh. Aminu Dangana Non Executive Director

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REPORT OF THE DIRECTORScontd.

In accordance with the Company's Articles of Association, Mr. Isaac Orolugbagbe and Alh. Aminu Dangana are due for retirement by rotation and being eligible offer themselves for re-election.

RECORD OF DIRECTORS ATTENDANCE AT BOARD MEETINGS

In accordance with section 258 (2) of the Companies and Allied Matters Act (CAPC20) Laws of the Federation of Nigeria, 2004, the record of the Directors' attendance at Directors' meetings during the year under review are hereby disclosed.

Attendance at board meetings and committee meetings during the financial year ended March 31, 2011;

Directors Board Finance & Budget Strategy & Business Development

Frequency of meetings 4 3 3

Dr. M.H. Koguna 4 N/A N/A

Sule Umar Bichi 4 3 3

Muyiwa Olumekun 4 N/A 3

Mazi Sonny Allison 4 3 3

Mr. Olayemi Peters 4 N/A 3

Mr. Isaac Orolugbagbe 3 3 3

Alh. Aminu Dangana 4 N/A N/A

Audit CommitteeNumber of meetings 3

Ogbuefi Gilbert Uti 3

Hon. Tajudeen Jimoh 3

Alh. Aminu Dangana 3

Mr. Isaac Orolugbagbe 2

DIRECTORS' SHAREHOLDING

The direct and indirect interests of Directors in the issued share capital of the Company as recorded in the Register of Directors' shareholdings and/or as notified by them for the purposes of sections 275 and 276 of the Companies and Allied Matters Act (CAP 20) Laws of the Federation 2004 and the listing requirements of the Nigerian Stock Exchange are as follows;

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S/NO NAME NUMBER OF NUMBER OF NUMBER OF SHARES HELD SHARES HELD SHARES HELDAS AT JULY 14, AS AT 31/3/ AS AT 31/3/102011 2011

1. Alhaji Mohammed H. Koguna 107,619,912 direct 86,756,059- indirect 105,889,912 direct86,756,059indirect 107,619,912-direct 79,856,059-indirect

2. Sule Umar Bichi 3,020,126 3,020,126 2,185,802

3. Olumuyiwa Olumekun 1,600,990 1,600,990 1,600,990

4. Sonny Allison 569,810 569,810 2,069,810

5. Olayemi Peters 7,032,065 7,032,065 7,032,065

7. Isaac Orolugbagbe 12,552,959 12,552,959 12,552,959

8. Aminu Dangana 100,000 100,000 85,000

According to the register of members as at 31st March, 2011, the following shareholders of the Company held more than 5% of the issued share capital of the Company;

Name SHAREHOLDING %HoldingMohammed H. Koguna 107,619,912 18.25

Koguna Babura & Co. Ltd. 86,756,059 14.71 ANALYSIS OF SHAREHOLDINGAccording to the Register of members as at 31st March 2011, the spread of shareholding in the company was as follows:

Share Range Number of % of Number of Percentage of Shareholders shareholders holdings shareholding

1 - 1,000 440 10.3774 281,842 0.04781,001 - 5,000 963 22.7123 3,289,736 0.55815,001 - 10,000 737 17.3821 6,271,032 1.0638

10,001 - 50,000 1,395 32.9009 36,771,112 6.237750,001 - 100,000 345 8.1368 27,029,329 4.5852

100,001 - 500,000 271 6.3915 60,929,226 10.3358500,001 - 1,000,000 37 0.8726 27,355,789 4.6405

1,000,001 - 5,000,000 35 0.8255 81,193,901 13.77345,000,001 - 10,000,000 8 0.1887 59,275,933 10.0553

10,000,001 AND ABOVE- 9 0.2123 287,098,860 48.7024===== ====== ========== =======

TOTAL 4,240 100.00 589,496,760 100.00===== ====== ========== =======

UNCLAIMED DIVIDEND

Since the conversion of the company to a public limited liability company and subsequent listing of its shares on the Nigerian Stock Exchange in 2007, the company has an outstanding N9,531,150.20 unclaimed dividend out of N132,636,770.90 declared in 2008 and N13,095,147.42 out of N176,849,028 declared in 2009.

Several dividend warrants remain unclaimed and are yet to be presented for payment or returned to the Company for revalidation or collected. We implore shareholders who are yet to update their contact details to kindly contact the Company's Registrars or the Company Secretary.

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Also shareholders are encouraged to fill the dividend mandate form attached at the back of the annual accounts for direct credit of their dividend to their designated bank accounts.

DIRECTORS INTERESTS IN CONTRACTS

None of the Directors has notified the Company for the purpose of section 277 of the Companies and Allied Matters Act (CAP 20) Laws of the Federation of Nigeria 2004 of their direct or indirect interest in contracts or proposed contracts with the company during the year.

DONATIONS AND GIFTSThe following donations were made during the year:

DESCRIPTION AMOUNT (N)

MARITIME WORKERS UNION OF NIGERIA 100,000.00

ROTARY CLUB, IKOYI 30,000.00

CHRIST EMBASSY CHURCH 50,000.00

BONNY YOUTH DEVELOPMENT 260,000.00

LAGOS BUSINESS SCHOOL 50,000.00

R S E FOUNDATION 1,667,970.00

===========2,157,970.00===========

CORPORATE SOCIAL RESPONSIBILITYIn continuation of its avowed commitment to reward academic excellence from public secondary schools in Nigeria, Red Star Express Plc has extended the scope by awarding scholarship to 9 students from the Northern part of the country. This brings to 41 the number of students who enjoy the scholarship, all over the country.

As approved by the shareholders at the annual general meeting of August 20, 2009 that 0.5% profit after tax is appropriated annually to Red Star Foundation for corporate social responsibility, the sum of N1,667,970.00 (One Million Six Hundred and Sixty-Seven Thousand, Nine Hundred and Seventy Naira Only) was transferred to the fund to boost its social responsibility activities.

Red Star Express strategic move to expand its Corporate Social Responsibility activities has also brought about the birth of the “I Care Project” for the less privileged. The project is designed to support the needs of the motherless children and the elderly people living in Nigeria.

SERVICE CONTRACT AGREEMENTThe Company has a contract agreement with Federal Express Corporation (FedEx), Belgium under the Global Service Participant Scheme of FedEx. The agreement provides for the movement of sensitive documents and parcels worldwide and supported with training and Information Technology.

There is no service fees payable. All transactions are done at arm's length basis.

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COMPLIANCE WITH THE LAWThe Board ensures Management complies with all existing laws and co operates with regulatory agencies in the course of carrying out its activities.The directors confirm that the Company complied with the above within the financial year.

EMPLOYMENT AND EMPLOYEE POLICY

1. Employment of disabled personsRed Star Express continues to maintain a policy of giving fair consideration to the application for employment made by disabled persons with due regard to their abilities and disposition. The Company's policy prohibits discrimination of disabled persons in the recruitment, training and career development of its employees. In the event of members of staff becoming disabled, efforts are geared towards ensuring that their employment continues. As at 31st March, 2011, no disabled person was employed by the Company.

2. Employees' Involvement and trainingEmployees, being the greatest assets of the company, in the year ending Mach 31, 2011, the Company invested about N39.4 million in both local and international training. Formal and informal channels are also employed in communication with employees with an appropriate two-way feedback mechanism.

3. Health, safety at work and welfare of employeesThe Company enforces strict health and safety rules and practices at the work environment, which are reviewed and tested regularly. The company further provides free medical facilities for staff and their immediate families under the Health Management Organizations (HMOs).

The company also maintains a safe and healthy workplace with fire prevention and fire fighting equipment installed at strategic locations in the company's offices.

The company also maintains Group Personal Accident and Workmen's compensation insurance, contributory pension scheme and non contributory gratuity scheme, all for the benefit and comfort of employees.

AUDITORSThe auditors, Messrs. Akintola Williams Deloitte, have indicated their willingness to continue in office in accordance with section 357(2) of the Companies and Allied Matters Act, Laws of the Federation 2004. A resolution will be proposed authorizing the directors to fix their remuneration.

BY ORDER OF THE BOARD

FRANCES NDIDI AKPOMUKACOMPANY SECRETARY

JUNE 28TH, 2011

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CORPORATE GOVERNANCE

INTRODUCTION

Red Star Express Plc. recognizes the importance of good corporate governance as a means of sustaining the viability of the business, therefore the company is mindful of its obligations to remain committed to safeguarding and improving shareholders value and meet expectations of all stakeholders. To this end, the company ensures compliance with the Code of Corporate Governance issued by the Securities and Exchange Commission and other international standards of best practices by putting in place systems of internal controls to achieve set targets and objectives.

GOVERNANCE STRUCTURE

The business of the company is driven by the Board of Directors made up of a non executive Chairman and six directors of which two are executive directors, with the appropriate mix of skills and experience. The board exercises oversight functions through its committees namely; Finance and budget committee, Strategy and Business Development Committee and the Audit committee of the company.

The responsibility for the day-to-day management of the company has been delegated by the board to the Managing Director/Chief Executive Officer supported by an Executive Director.

Executive Management is accountable to the board for the development and implementation of strategies and policies. The board periodically reviews the company's performance, matters of strategic concern and other matters considered as material. The board meets quarterly and additional meetings are convened as need arise.

BOARD COMMITTEES

The board carries out its responsibilities through its committees which have clearly defined terms of reference as contained in the charter setting them up. The charter sets out their terms of reference, roles, responsibilities, functions and scope of authority. The committees make recommendations to the board which retains responsibility for final decision making. The committees render reports to the board at the board meeting.

OTHER COMMITTEE

Management Committee - this consists of Executive Management and six other Heads of Department. They have scheduled weekly meetings to deliberate on matters ranging from sales and revenue, operations and services, risk management, quality, brand and other corporate issues. Emergency meetings may be called as need arise.

RELATIONSHIP WITH SHAREHOLDERS

The company maintains a cordial relationship with shareholders. The company's Annual General Meetings are conducted in a transparent and fair manner. Locations have been easily accessible and shareholders are given opportunity to express their opinion on the company's financials and other issues of concern. The Annual General Meetings are attended by representatives of Securities and Exchange Commission, The Nigerian Stock Exchange, Corporate Affairs Commission as well as representatives of shareholders Associations.

Also quarterly, half yearly and annual financial results are published in widely circulated newspapers. Notice of Annual General Meeting and financial results of the company are dispatched to all shareholders.

All shareholders are treated equally regardless of number of shareholding or social status.

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STATEMENT OF DIRECTORS RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS For the year ended March 31, 2011

he Companies and Allied Matters Act (CAP C 20) Laws of the Federation of Nigeria, 2004 requires Tthe Directors to prepare financial statements for each financial year that give a true and fair view of the state of financial affairs of the Company at the end of the year and of its profit or loss. The responsibilities include ensuring that the Company:

(a) Keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Company and comply with the requirements of the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria, 2004.

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

(c) Prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgments and estimates, and are consistently applied.

The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with Nigerian Accounting Standards and the requirements of the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria, 2004.

The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its profit or loss. The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the Directors to indicate that the Company will not remain a going concern for at least twelve months from the date of this statement.

ISAAC OROLUGBAGBE SULE UMAR BICHIDIRECTOR DIRECTOR

14TH JULY, 2011

20


REPORT OF THE AUDITCOMMITTEE

TO THE SHAREHOLDERS OF RED STAR EXPRESS PLC.

In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria, 2004, we have reviewed the audited financial statements of the Company for the year ended 31st March 2010 and report as follows:

(a) The accounting and reporting policies of the Company are consistent with legal requirements and agreed ethical practices.

(b) The scope and planning of the external audit was adequate.

(c) The Company maintained effective systems of accounting and internal controls during the year.

(d) The Company's Management has adequately responded to matters covered in the Management report issued by the external auditors.

OGBUEFI GILBERT UTIChairman - Audit Committee

27TH JUNE 2011

Members of the Audit Committee

Ogbuefi Gilbert Uti Independent shareholder Hon. Tajudeen Jimoh Independent shareholderMr. Isaac Orolugbagbe Non Executive DirectorAlh. Aminu Dangana Non Executive Director

SecretaryFrances N. Akpomuka

e have audited the accompanying consolidated financial statements of Red Star Express Plc Wand its subsidiaries, set out on pages 22 - 43 which comprise the consolidated balance sheet as at 31 March 2011, the consolidated income statement, consolidated statement of cash flows, consolidated statement of value added for the year then ended, the summary of significant accounting policies, financial summary and other explanatory information.

Directors' Responsibility for the Consolidated Financial StatementsThe Directors are responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Companies and Allied Matters Act, Cap C20, LFN 2004, and for such internal control as the Directors determine are necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Red Star Express Plc and its subsidiaries as at 31 March 2011, and of its financial performance and its cash flows for the year then ended; the company and its subsidiaries have kept proper books of account, which are in agreement with the consolidated balance sheet and consolidated income statement, in the manner required by the Companies and Allied Matters Act, Cap C20, LFN 2004, and, in accordance with the Statements of Accounting Standards issued by the Nigerian Accounting Standards Board.

Chartered AccountantsLagos, Nigeria.14 July 2011

Akintola Williams Deloitte235 Ikorodu Road, IlupejuP. O. Box 965, MarinaLagosNigeria

Tel: +234 (1) 271 7800Fax: +234 (1) 271 7801www.deloitte.com/ng

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited byguarantee, and its network of member firms, each of which is a legally separate and independent entity.Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte ToucheTohmatsu Limited and its member firms.

Akintola Williams Deloitte, a member firm of Deloitte Touche Tohmatsu Limited, is a professional servicesorganization that provides audit, tax, consulting, financial advisory and enterprise risk services.

DeloitteINDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF

RED STAR EXPRESS PLC

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STATEMENT OF SIGNIFICANT ACCOUNTING POLICIESFor The Year Ended 31 March 2011

The following are the summary of significant accounting policies adopted by the company and its subsidiaries in the preparation of the consolidated financial statements:

1. Basis of accountingThe consolidated financial statements are prepared under the historical cost basis as modified by the revaluation of motor vehicles

2. Basis of consolidationThe consolidated financial statements incorporate the financial statements of the company, Red Star Express Plc and its wholly-owned subsidiaries Red Star Freight Limited, Red Star Supports Services Limited, Red Star Logistics Limited and Red Star Express Staff Retirement and gratuity scheme assets. The financial statements are all made up to 31 March. All inter-company transactions, balances, income and expenses are eliminated in full on consolidation.

3. TurnoverTurnover represents the net value of courier service rendered to third parties after deducting discounts and rebates.

4. Fixed assetsThese are stated at cost less accumulated depreciation.

5. DepreciationFixed assets are depreciated on the straight line basis at the following rates per annum which are expected to write off their cost or revalued amounts over their anticipated useful lives:

%

Land and building - 5Improvement on building - 20Furniture and fittings - 20Office equipment - 20Motor vehicles - 25Motorcycles - 33 Computer equipment - 33Construction-in-progress - Nil

6. Marketable securitiesMarketable securities comprising of government bonds and other securities held for fixed redemption, date are stated at cost and premiums or discounts arising on purchase are amortised on the yield to redemption.

7. Investments

Investments are classified as short term or long term investments.

7.1 Short term investmentsAn investment is classified as short term investment at its inception if acquired principally on a temporary basis for a period not exceeding one year. Short term investment are valued at lower of cost or market value.

7.2 Long term investmentsInvestments intended to be held for over a period exceeding one year, which are either held to maturity or available for sales in response to needs for liquidity or changes in interest rates, exchange rates or equity prices are classified as long-term investments.

1/ 31/ 3

23


7.3 Valuation(a) Quoted investments other than dated securities are stated:

- At the lower of cost and market value for short-term investments;- At cost for long-term investments. Provision is made for permanent diminution in the value of the investments.

(b) Unquoted investments are held as long-term and stated at cost less provision for diminution in values.

(c) Dated securities are stated at cost.(d) Investments in subsidiaries are stated at cost less provision for permanent

diminution in value and investments income is accounted for on an accrual basis.

7.4 Investment propertyInvestment property is property held either to earn rental income or for capital appreciation or both. Investment properties are carried in the balance sheet at their market value and revalued periodically on a systematic basis

7.5 Investment incomeInvestment income comprises interest income earned on short-term deposits, rental income and income earned on other activities. Investment income is accounted for on an accrual basis.

8. GoodwillGoodwill arising on consolidation represents the excess of the cost of acquisition over the fair value of the identifiable assets and liabilities of the acquired subsidiary(ies) at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Losses arising from impairment are charged to the profit and loss account in the period in which they arise.

9. Stocks

Stocks are stated at the lower of cost and net realisable value after making adequate provisions for obsolete and damaged items. Cost comprises supplier's invoice price and where appropriate freight and other charges incurred to bring the materials to their location and condition. First in, first out (FIFO) is the stock valuation method being used.

10. DebtorsDebtors are stated after deduction of any debts considered doubtful of collection.

11. Deferred taxationDeferred taxation, which arises principally from timing differences in the recognition of items for accounting and tax purposes, is calculated using the liability method. This represents taxation at the current rate of corporate income tax on the difference between the depreciation charged in the accounts and the capital allowances claimable for tax. This is in accordance with Statement of Accounting Standard (SAS 19) on Accounting for Taxes.

12. TaxationIncome tax and education tax payable are provided on taxable profit and adjusted profit respectively at the current statutory rates.

13. Foreign currenciesTransactions in foreign currencies are recorded in Naira at the rates of exchange ruling at the date of the transactions. Assets and liabilities existing in foreign currencies are converted in Naira at the rates of exchange applicable at the balance sheet date. Gains or losses arising therefrom are recognised in the profit and loss account.


24


14. Retirement benefitsThe Company operates a contributory pension scheme covering all eligible employees where the employer and employees contribute 7½% each of the employees' relevant emoluments in accordance with the Pension Reform Act 2004. The costs are charged to the profit and loss account.

The company also operates a non contributory gratuity scheme. The entitlement of the employees are based on applicable emoluments and qualifying years of service at the time of leaving the Company. The assets of the schemes are held in a separate trustee-administered fund. The costs are charged to the profit and loss account.

15. ProvisionsProvisions are recognised when the Company has present obligation whether legal or constructive, as result of a past event for which it is probable that outflow of reliable estimate can be made of the amount of the obligation in accordance with Statement of Accounting Standard (SAS) 23 on Accounting for Provisions, Contingent Liabilities and Contingent Assets.

16. Earnings per share Earnings per share (EPS) are based on profit after taxation and the number of issued and fully paid ordinary shares are the end of the each financial year.

17. Segment reportingA segment is a distinguishable component of the company that is engaged either in providing related products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are different from those of other segments.

The company's primary format for segment reporting is based on business segments. The business segments are determined by management based on the company's internal reporting structure.

18. Dividends Dividends to shareholders are recognised as liabilities only when declared and agreed by the shareholders at the Annual General Meeting.

19. ComparativeWhere necessary, comparative figures have been adjusted to conform to changes in presentation in the current year in accordance with the Statement of Accounting Standard (SAS 2).


25


CONSOLIDATED PROFIT & LOSS ACCOUNTFor The Year Ended 31 March 2011

The Group The Company

2011 2010 2011 2010

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

Turnover 2 4,207,877 4,139,818 2,924,593 3,034,108

Operational costs (2,794,031) (2,768,288) (2,120,952) (2,155,026)

Gross profit 1,413,846 1,371,530 803,641 879,082

Administrative expenses (1,059,813) (936,554) (674,934) (666,169)

354,033 434,976 128,707 212,913

Other income 3 55,268 33,084 68,070 123,241

Operating profit 4 409,301 468,060 196,777 336,154

Interest received 2,752 24,915 2,752 13,900

Interest payable and similar charges - (16,883) - (16,883)

Provision for diminution in investments (752) (2,478) (593) (2,478)

Profit before taxation 5 411,301 473,614 198,936 330,693

Taxation 6 (77,707) (293,098) 10,516 (84,901)

Profit after taxation transferred to 18 333,594 180,516 209,452 245,792

general reserve ========== ======== ======== =======

Earnings per share (Kobo) - Basic 27 57 31 36 42

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

The accounting policies on pages 22 to 24 and the explanatory notes on pages 28 to 40 form part of these

consolidated financial statements.

26


CONSOLIDATED BALANCE SHEETFor The Year Ended 31 March 2011

The Group The Company2011 2010 2011 2010

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

FIXED ASSETS 7 739,217 735,324 491,049 516,287LONG TERM INVESTMENTS 8 155,723 155,331 209,433 214,430GOODWILL 9 1,500 1,500 - -

CURRENT ASSETSStocks 10 46,149 30,179 44,577 26,808 Trade debtors 11 1,204,359 1,133,402 931,670 892,972 Other debtors and prepayments 12 277,916 253,940 227,307 208,386 Due from related company - - 188,923 197,657 Short term deposits 178,853 282,494 134,353 238,224 Bank balances and cash 13 166,771 130,412 102,624 116,222

1,874,048 1,830,427 1,629,454 1,680,269

CREDITORS: Amounts falling due within one yearTrade creditors 161,563 183,046 156,894 183,056 Other creditors and accruals 14 534,428 503,616 433,189 408,405 Due to related companies - - 128,373 95,884 Taxation 6 237,752 299,171 83,918 137,685

933,743 985,833 802,374 825,030

NET CURRENT ASSETS 940,305 844,594 827,080 855,239

TOTAL ASSETS LESS CURRENT LIABILITIES 1,836,745 1,736,749 1,527,562 1,585,956

Deferred taxation 15 (55,430) (123,873) (13,728) (87,628)

PROVISION FOR LIABILITIES AND CHARGESStaff gratuity 16 (340,884) (329,190) (269,298) (286,395)

1,440,431 1,283,686 1,244,536 1,211,933========= ======== ========= =========

CAPITAL AND RESERVESShare capital 17 294,748 294,748 294,748 294,748Share premium 296,433 296,433 296,433 296,433General reserve 18 849,250 692,505 653,355 620,752

1,440,431 1,283,686 1,244,536 1,211,933========= ======== ========= =========

The consolidated financial statements on pages 22 to 40 were approved by the Board of Directors on 14 July 2011 and signed on its behalf by:

)

)

) Directors

)

)

The accounting policies on pages 22 to 24 and the explanatory notes on pages 28 to 40 form part of these consolidated financial statements.

27


STATEMENT OF CASH FLOWSFor The Year Ended 31 March 2011


2011 2010 2011 2010

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

Cash flows from operating activities:

Cash receipts from customers 4,190,771 4,068,890 2,929,369 2,947,920

Payment to suppliers and employees (3,637,036) (3,341,064) (2,682,506) (2,580,245)

Value added tax paid (145,055) (187,818) (106,468) (142,270)

Taxes paid 6.2 (104,224) (139,478) (13,806) (25,546)

Net cash provided by operating 19 304,456 400,530 126,589 199,859

activities

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

Cash flows from investing activities:

Dividend received 3 - 71 23,849 89,680

Interest received 2,752 24,915 2,752 13,900

Purchase of fixed assets 7 (203,808) (221,494) (99,307) (92,746)

Investment in subsidiary companies - - - (24,071)

Proceeds on liquidation of investment 4,220 3,000 4,220 3,000

Proceeds on disposal of fixed assets 1,947 5,160 1,277 4,714

Net cash provided by investing activities (194,889) (188,348) (67,209) (5,523)

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

Cash flows from financing activities:

Interest paid - (16,883) - (16,883)

Dividend paid (176,849) (176,849) (176,849) (176,849)

Net cash provided by financing activities (176,849) (193,732) (176,849) (193,732)

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

Net (decrease)/increase in cash and

cash equivalents (67,282) 18,450 (117,469) 604

Cash and cash equivalents at the

beginning of the year 412,906 394,456 354,446 353,842

Cash and cash equivalents at the

end of the year 20 345,624 412,906 236,977 354,446

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

28


NOTES TO THE FINANCIAL STATEMENTSFor The Year Ended 31 March 2011

1. THE COMPANY

1. Legal formThe Company was incorporated as a private limited liability company on 10 July 1992 and commenced business on 12 October 1992. Its shares were admitted to the official list of the Nigerian Stock Exchange on 14 November 2007. 14% of the issued share capital of the Company is held by Koguna Babura Insurance Brokers Limited and 86% are held by Nigerians.

2. Principal activitiesThe Company engages principally in provision of courier services and its wholly owned subsidiaries are engaged in the provision of freight, support services, logistics and general haulage services.

2011 20102. SEGMENT REPORTING Turnover Cost of Gross Turnover Cost of Gross

sale profit sale profitN'000 N'000 N'000 N'000 N'000 N'000

Analysis by groupCourier 2,924,593 2,120,952 803,641 3,034,108 2,155,026 879,082Support services 587,713 375,868 211,845 439,476 330,893 108,583 Freight 137,393 66,651 70,742 149,363 86,432 62,931Logistics 558,178 230,560 327,618 516,871 195,937 320,934

4,207,877 2,794,031 1,413,846 4,139,818 2,768,288 1,371,530

======== ======== ======== ======== ======== ========3. OTHER INCOME

Insurance claims received - 6,000 - 6,000Profit on disposal of fixed assets 1,417 2,815 747 3,235Provision no longer required 26,364 17,586 23,780 17,586Other revenue 26,229 - 18,436 - Recovery on expenses - 3,763 - 3,763Dividend received - 71 23,849 89,680Exchange gain 1,258 2,849 1,258 2,977

55,268 33,084 68,070 123,241====== ====== ====== =======

29



4. OPERATING PROFIT CONTRIBUTED BY THE COMPANY AND ITS SUBSIDIARIES

Red Star Express Plc 172,928 246,545 196,777 336,154Red Star Freight Limited 42,795 29,640 - - Red Star Logistics Limited 118,537 123,669 - - Red Star Support Services Limited 75,041 68,206 - -

409,301 468,060 196,777 336,154 ======= ======= ======= =======

5. PROFIT BEFORE TAXATION

The profit before taxation is stated after charging/(crediting):Depreciation 202,291 164,465 125,502 120,710 Audit fee 9,650 9,299 7,250 7,250 Profit on disposal of fixed assets (1,417) (2,815) (747) (3,235)Directors' emoluments (Note 22) 17,220 16,200 17,220 16,200 Exchange gain (1,258) (2,849) (1,258) (2,977)Dividend received - (71) (23,849) (89,680)Provision for staff pension 84,796 83,447 49,766 53,782 Provision for staff gratuity 55,723 121,056 30,883 78,000

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

6. TAXATION

1. Profit and loss accountIncome tax 133,546 134,198 57,746 65,722 Education tax 12,604 13,504 5,638 8,065 Under provision in prior years - 98,037 - -

146,150 245,739 63,384 73,787 Deferred taxation (Note 15) (68,443) 47,359 (73,900) 11,114

77,707 293,098 (10,516) 84,901 ======= ======= ======= ======

2. Balance sheetAt the beginning of the year 299,171 222,169 137,685 118,703 Charge for the year 146,150 245,739 63,384 73,787 Payments during the year (104,224) (139,478) (13,806) (25,546)Withholding tax credit utilised (Note 12.1) (103,345) (29,259) (103,345) (29,259)At the end of the year 237,752 299,171 83,918 137,685

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

3. The charge for income tax in these consolidated financial statements is based on the provisions of the Companies Income Tax Act, CAP C21, LFN 2004 as amended to date. Education tax is based on


30


7.

FIX

ED

ASSETS

Impro

ve-

Const

ruc-

The G

roup

Land a

nd

ments

on

Furn

iture

Com

pute

rO

ffic

eM

oto

rM

oto

r-ti

on-in

-

buildin

gbuildin

gs

and f

itti

ngs

equip

ment

equip

ment

vehic

les

cyc

les

pro

gre

ssTo

tal

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

Cost

At

the b

egi

nnin

g of th

e y

ear

441,0

85

56,4

92

5

3,2

03

138,5

98

1

83,5

65

424,3

68

146,8

41

5

,925

1,4

50,0

77

Additio

ns d

uring

the y

ear

18,8

04

1,1

49

5

,707

1

6,5

31

1

8,1

62

7

5,6

31

6

0,6

54

7

,170

2

03,8

08

Transfe

rs

4

12

-

-

-

-

-

-

(1,1

33)

(721)

Dis

posals

-

-

(102)

-

(9

12)

(1

5,6

14)

(6

,613)

-

(23,2

41)

Adju

stm

ents

(3,5

20)

6,0

50

(127)

(4

,091)

-

(4

9,0

62)

(2

1,0

79)

-

(

71,8

29)

At

the e

nd o

f th

e y

ear

4

56,7

81

63,6

91

5

8,6

81

151,0

38

2

00,8

15

435,3

23

179,8

03

1

1,9

62

1,5

58,0

94

Depre

cia

tion

At

the b

egi

nnin

g of th

e y

ear

49,1

76

38,3

77

3

6,4

72

107,9

70

1

22,5

61

256,6

39

103,5

58

-

7

14,7

53

Charg

e for

the y

ear

19,9

67

5,5

01

5

,646

2

1,4

87

2

3,3

56

8

9,7

25

3

6,6

09

-

2

02,2

91

On d

isposals

-

-

(102)

-

(9

12)

(1

5,4

04)

(6

,293)

-

(22,7

11)

Adju

stm

ents

5

80

(

1,7

85)

(83)

(3

,052)

-

(4

9,1

37)

(2

1,9

79)

-

(75,4

56)

At

the e

nd o

f th

e y

ear

69,7

23

42,0

93

4

1,9

33

126,4

05

1

45,0

05

281,8

23

111,8

95

-

8

18,8

77

Net

book v

alu

e

At

31 M

arc

h 2

011

3

87,0

58

21,5

98

1

6,7

48

2

4,6

33

5

5,8

10

153,5

00

6

7,9

08

1

1,9

62

739,2

17

=======

======

======

=======

=======

=======

======

======

=======

At

31 M

arc

h 2

010

3

91,9

09

18,1

15

1

6,7

31

3

0,6

28

6

1,0

04

167,7

29

4

3,2

83

5

,925

735,3

24

=======

======

======

=======

=======

=======

======

======

=======


31


Impro

ve-

Const

ruc-

The C

om

pany

Land a

nd

ments

on

Furn

iture

Com

pute

rO

ffic

eM

oto

rM

oto

r-ti

on-in

-

buildin

gbuildin

gs

and fit

tings

equip

ment

equip

ment

vehic

les

cyc

les

pro

gre

ssTo

tal

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

N'0

00

Cost

At

the b

egi

nnin

g of

the y

ear

3

38,1

99

53,1

03

5

1,2

17

133,8

66

1

79,7

12

247,0

75

7

5,4

20

5,9

25

1,0

84,5

17

Additio

ns d

uring

the y

ear

7,8

15

1,0

76

5

,358

1

5,8

83

17,0

76

4

3,4

86

8,6

13

-

9

9,3

07

Transfe

rs

4

12

-

-

-

-

-

-

(1,1

33)

(721)

Dis

posals

-

-

(102)

-

(912)

(1

5,6

14)

(6,6

13)

-

(23,2

41)

Transfe

r to

subsid

iary

-

-

-

-

-

-

-

-

-

At

the e

nd o

f th

e y

ear

3

46,4

26

54,1

79

5

6,4

73

149,7

49

1

95,8

76

274,9

47

7

7,4

20

4,7

92

1,1

59,8

62

Depre

cia

tion

At

the b

egi

nnin

g of

the y

ear

48,9

31

35,4

84

3

5,8

53

104,6

54

1

20,9

96

160,1

12

6

2,2

00

-

5

68,2

30

Charg

e f

or

the y

ear

14,5

84

3,6

08

5

,232

2

1,0

96

22,2

76

4

9,8

54

8,8

53

-

1

25,5

03

On d

isposals

-

-

(102)

-

(912)

(1

5,4

04)

(

6,2

93)

-

(22,7

11)

Adju

stm

ent

-

(2,2

09)

-

-

-

-

-

-

(2,2

09)

At

the e

nd o

f th

e y

ear

63,5

15

36,8

83

4

0,9

83

125,7

50

1

42,3

60

194,5

62

6

4,7

60

-

6

68,8

13

Net

book v

alu

e

At

31 M

arc

h 2

011

2

82,9

11

17,2

96

1

5,4

90

2

3,9

99

53,5

16

8

0,3

85

1

2,6

60

4,7

92

491,0

49

=======

======

======

=======

=======

=======

======

======

=======

At

31 M

arc

h 2

010

2

89,2

68

17,6

19

1

5,3

64

2

9,2

12

58,7

16

8

6,9

63

1

3,2

20

5,9

25

516,2

87

=======

======

======

=======

=======

=======

======

======

=======

7.1

The tra

nsfe

r bala

nce

of N

721,0

00 repre

sent asset ca

tego

rised a

s c

apital w

ork

in p

rogr

ess in

pre

vious year th

at w

as e

xpensed in

the year under re

view.

7.2

Fixe

d a

ssets

tra

nsfe

rred to s

ubsid

iary

com

pany(

ies) at th

e n

et book

valu

e h

ave

been in

cluded a

s p

art

of th

e c

ost of in

vestm

ent in

subsid

iary

(ies) during

the y

ear as

follo

ws:

7.3

Adju

stm

ents

in r

espect

of

the G

roup,

repre

sents

corr

ect

ion t

o p

roperly

sta

te t

he o

penin

g bala

nce

s,

while

adju

stm

ent

in r

espect

of

the C

om

pany

repre

sents

acc

um

ula

ted d

epre

ciation o

f asset pre

viously

dis

posed w

hic

h w

as n

ot

writt

en o

ff, n

ow

corr

ect

ed.


32



N'000 N'000 N'000 N'0008. LONG TERM INVESTMENTS

Quoted investments at cost:Access Bank Plc Bonds - 1,500 - 1,5001,500 units at N1,000 each Nemeith International Pharmaceuticals Plc822,743 ordinary shares of 50 Kobo eachMarket value - N929,700 (2010: N1,522,075). 2,057 2,057 2,057 2,057

Access Bank Plc70,400 (2010: 64,000) ordinary shares of 50k each 953 953 - - Market value -N585,024 (2010: 717,440)

Zenith Bank Plc110,000 (2010: 80,000) ordinary shares of 50k each. 698 698 - - Market value -N 1,675,300 (2010; N1,517,600)

First Bank of Nigeria Plc 1,485 1,485 - - 73,828 (2010: 65,625) ordinary shares of 50k eachMarket value -N1,048,357 (2010:1,075,594)

Guaranty Trust bank Plc 1,497 1,497 - - 401,282 (2010: 321,026) ordinary shares of 50k each.Market Value- N8,013,601(2010: N6,709,443) -------------- --------------- ---------------- --------------

6,690 8,190 2,057 3,557 Provision for diminution in investment (1,933) (1,181) (1,128) (535)

4,757 7,009 929 3,022

Investment Property 40,000 40,000 - -

Investment in FGN Bond and treasury bills 110,966 105,418 - -

Unquoted investments at cost:5,806,849 ordinary shares of N1.00 each in - 5,807 - 5,807Red Star Express Communication Limited (40% holding)336,678 Ordinary shares of 50 Kobo each 1,793 1,793 1,793 1,793 in Fortune International Bank Plc

1,793 7,600 1,793 7,600

Provision for diminution in investment (1,793) (4,696) (1,793) (4,696) - 2,904 - 2,904

Investment in subsidiaries: % HoldingInvestment in Red Star Freight Limited 100 - - 11,500 11,500 Investment in Red Star Supports Services Limited 100 - - 49,065 49,065 Investment in Red Star Logistics Limited 100 - - 147,939 147,939

- - 208,504 208,504 155,723 155,331 209,433 214,430

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


33


The Directors are of the opinion that the value of the investments are not less than their net realisable value at the balance sheet date.

During the year investment in Access Bank Plc bond and Red star express communication were disposed of.

9. GOODWILLThe company acquired 100% shares of Easy-way International Company Limited (now Red Star Freight Limited) on 23 February 2007 which resulted in the goodwill as determined below. The goodwill is tested annually for impairment, or more frequently when there are indications that impairment may have occurred. The goodwill has been tested for impairment and there is no impairment arising therefrom.


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

Goodwill on acquisition 1,500 1,500 - - ======= ======= ======= ======

10. STOCKS

Stationeries and packaging materials 40,029 22,856 38,457 22,118Fuel and oil 6,120 4,690 6,120 4,690Spare parts - 2,633 - - Provision for obsolete stock - - - -

46,149 30,179 44,577 26,808====== ======= ======= ======

11. TRADE DEBTORS

Trade debtors 1,277,756 1,233,163 983,223 968,305 Provision for doubtful debts (73,397) (99,761) (51,553) (75,333)

1,204,359 1,133,402 931,670 892,972 ======== ======= ======= ======


34



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

12. OTHER DEBTORS AND PREPAYMENTS

Prepayments 52,494 33,323 34,285 25,575 Unutilised witholding tax receipts 77,285 57,324 77,285 55,980 Other debtors 17,989 22,812 17,989 21,182 Staff loans 130,148 128,224 97,748 104,430 Staff operational advances - 12,257 - 1,219

277,916 253,940 227,307 208,386======= ======= ======= =======

12.1 Unutilised witholding tax receiptsAt the beginning of the year 57,324 18,699 55,980 18,699 Withoding tax receipts during the year 123,306 67,884 124,650 66,540 Withholding tax credit utilised (Note 6.2) (103,345) (29,259) (103,345) (29,259)At the end of the year 77,285 57,324 77,285 55,980

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

13. BANK BALANCES AND CASH

Cash balances 6,294 7,703 5,717 7,693 Cash-in-transit 18,393 36,371 18,082 36,371 Bank balances 142,084 86,338 78,825 72,158

166,771 130,412 102,624 116,222 ======= ======= ======= =======

14. OTHER CREDITORS AND ACCRUALS

Accruals 185,970 200,967 124,771 136,711 Customers deposit 69,690 81,202 69,690 81,202 Agents clearing charges 96,454 72,657 96,454 72,657 Value added tax 93,240 58,775 80,581 58,775 Staff pension accruals (Note 14.1) 22,766 22,217 4,532 12,127 Other creditors 66,308 67,798 57,161 46,933

534,428 503,616 433,189 408,405 ======= ======= ======= =======

14.1 Staff pension accrualsAt the beginning of the year 22,217 13,662 12,127 10,632 Provision for the year 84,796 83,447 49,766 53,782 Payments and remittances (84,247) (74,892) (57,361) (52,287)At the end of the year 22,766 22,217 4,532 12,127

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

15. DEFERRED TAXATION

At the beginning of the year 123,873 76,514 87,628 76,514 (Writeback)/charge for the year (68,443) 47,359 (73,900) 11,114

At the end of the year 55,430 123,873 13,728 87,628======= ======= ======= =======


35



N'000 N'000 N'000 N'00016. STAFF GRATUITY

At the beginning of the year 329,190 224,917 286,395 221,812 Provision for the year 67,177 121,056 34,625 78,000 Payment during the year (55,483) (16,783) (51,722) (13,417)At the end of the year 340,884 329,190 269,298 286,395

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

The Gratuity balance represents the liability of the Group to its staff. Assets of the gratuity fund amounting to N231m as at 31 March 2011 to fund the liability including Investment properties, quoted investments and cash balances have been accounted for in these consolidated financial statements. The unfunded amount of N110m has been fully provided for in the accounts


N'000 N'000 N'000 N'00017. SHARE CAPITAL

Authorised600,000,000 ordinary shares 300,000 300,000 300,000 300,000of 50 kobo each ======= ======= ======= =======

Issued and fully paid589,496,760 ordinary shares 294,748 294,748 294,748 294,748of 50 kobo each ======= ======= ======= =======

18. GENERAL RESERVE

At the beginning of the year 692,505 687,338 620,752 551,809 Profit and loss account 333,594 180,516 209,452 245,792 Prior year adjustment (Note 18.1) - 1,500 - - Dividend declared (Note 18.2) (176,849) (176,849) (176,849) (176,849)

At the end of the year 849,250 692,505 653,355 620,752 ======= ======= ======= =======

18.1 This represents goodwill written off in prior year on acquisition of Red Star Freight Limited now restated (Note 9).

18.2At the Annual General Meeting held on 9 August 2010, the shareholders approved a dividend of 30 Kobo per ordinary share amounting to N177 million for the year ended 31 March 2010 payable forthwith to the shareholders whose names were registered in the Company's register of members at close of business on 27 July 2010. The dividend has been paid during the year.

In respect of the current year, the Directors propose that a dividend of 30 Kobo on the basis of ordinary share of 50 kobo each be paid to shareholders whose names appear in the register of members at the close of business on 19 August 2011. This dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Dividend to shareholders are now accounted for on the date of declaration as they do not meet the criteria for present obligation in Statement of Accounting Standard (SAS) 23 on Accounting for Provisions, Contingent liabilities and Contingent Assets. The proposed dividend is subject to deduction of withholding tax at the appropriate tax rate at the time of payment. The total estimated dividend to be paid is N177 million.


36



2011 2010 2011 2010

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

19. RECONCILIATION OF NET PROFIT AFTER TAXATION

TO CASH PROVIDED BY OPERATING ACTIVITIES

Net profit after taxation 333,594 180,516 209,452 245,792

Adjustment to reconcile net income to

net cash provided by operating:

Depreciation 202,291 164,465 125,503 120,710

Interest income (2,752) (24,915) (2,752) (13,900)

Interest expenses - 16,883 - 16,883

Provision for diminution in investments 752 2,478 593 2,478

Profit on disposal of fixed assets (1,417) (2,815) (747) (3,235)

Loss on disposal of investment 184 - 184 -

Adjustment to fixed assets (2,906) - (1,488) -

Dividend received - (71) (23,849) (89,680)

Changes in assets and liabilities:

(Increase)/decrease in stocks (15,970) 3,808 (17,769) (1,328)

Increase in trade debtors (70,957) (101,252) (38,698) (116,514)

Increase in other debtors and prepayments (23,976) (26,807) (18,921) (8,023)

Decrease/(increase) in due from related companies - - 8,734 (18,088)

(Decrease)/increase in trade creditors (21,483) 78,555 (26,162) 78,555

Increase/(decrease) in other creditors 25,423 (68,405) 24,784 (48,887)

Increase/(decrease) in due to related companies - - 32,489 (26,540)

(Decrease)/increase in taxation (61,419) 77,000 (53,767) 18,982

(Decrease)/increase in deferred taxation (68,443) 47,359 (73,900) 11,114

Increase/(decrease) in staff gratuity -11,535 53,731 (17,097) 31,540

Total adjustments (29,138) 220,014 (82,863) (45,933)

Net cash provided by operating activities 304,456 400,530 126,589 199,859

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


37



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

20. RECONCILIATION OF CASH AND CASH EQUIVALENTS

Cash balances 6,294 7,703 5,717 7,693 Cash-in-transit 18,393 36,371 18,082 36,371 Bank balances 142,084 86,338 78,825 72,158 Short term deposits 178,853 282,494 134,353 238,224

345,624 412,906 236,977 354,446======= ======= ======= =======

21. EMPLOYMENT AND EMPLOYEES

1. StaffAverage number of persons employed in the financial year under review and the staff costs were as follows: Number Number Number Number

Managerial 8 8 7 7 Senior staff 46 43 40 37 Supervisors 185 171 158 150 Junior staff 1,166 892 133 174

1,405 1,114 338 368 ====== ====== ====== ======

Staff costs:Salaries, wages and other benefits 1,102,912 1,022,892 756,856 746,444 Staff pension and gratuity 109,575 162,779 59,508 104,891

1,212,487 1,185,671 816,364 851,335 ======== ======== ======= =======

2. Employees remunerated at higher rates, excluding allowances:

N N Number Number Number Number

140,001 - 210,000 1,166 447 133 174 210,001 - 360,000 190 445 162 154 360,000 - 900,000 41 214 36 32 900,001 - 1,700,000 6 6 5 6

1,700,001 - 2,011,000 2 2 2 2======= ======= ======= =======


38



N'000 N'000 N'000 N'00022. CHAIRMAN'S AND DIRECTORS'

EMOLUMENTS

1. Emoluments:Chairman 675 500 675 500 Other Directors 16,545 15,700 16,545 15,700

17,220 16,200 17,220 16,200 ======= ======= ======= =======

As Directors' fees 2,835 2,500 2,835 2,500 Emoluments as executives 14,385 13,700 14,385 13,700

17,220 16,200 17,220 16,200 ======= ======= ======= =======

2. The number of Directors excluding the Chairman whose emoluments were withinthe following ranges were:

N N Number Number Number Number

390,001 - 400,000 - 5 - 5 530,001 540,000 5 - 5 -

4,600,001 and above 2 2 2 2======= ======= ======= =======

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

Chairman 675 500 675 500 The highest paid Director earned 7,412 7,059 7,412 7,059

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

23. GUARANTEES AND OTHER FINANCIAL COMMITMENTS

1. Contingent liabilitiesAs at 31 March 2011, there were no contingent liabilities (2010: N100,000) in respect of pending litigations against the Company. The Directors are of the opinion that, based on the Solicitors' advice, no material loss will arise from them. Consequently, no provision has been made in these consolidated financial statements for the amount.

2. Financial commitmentsThe Directors are of the opinion that all known liabilities and commitments which are relevant in assessing the Company's state of affairs have been taken into account in the preparation of these consolidated financial statements under review.

3. Performance BondThe Company accepted a performance bond of N50 million (2010- N50 million) in favour of Nigeria Customs Service.

24. SUPPLIERS

The Company's significant suppliers are mainly local. Some of the major suppliers are:

Kongo-Rock Investments LimitedChita Express LimitedAegis Core LimitedAero ContractorsAir FranceBritish Airways

The Company is not associated with the suppliers.


39


25. POST BALANCE SHEET EVENTS

The Directors are of the opinion that there were no significant post balance sheet events which would have had any material effect on the balance sheet and the profit for the year ended on that date, which have not been adequately provided for or disclosed in the consolidated financial statements.

26. RELATED PARTY TRANSACTIONS

The company had significant transactions with its related companies in the form of transfer of funds and payments for goods and services on behalf of each other. The balances due from/to the related companies which are disclosed in the balance sheet are as follows:


N'000 N'000 N'000 N'000Due from related company

Red Star Retirement Benefit Scheme 188,923 179,569 Red Star Logistics Limited - - - 18,088

- - 188,923 197,657===== ===== ======= ======

Due to related companies

Red Star Freight Limited - - 23,795 28,417 Red Star Logistics Limited - - 18,300 - Red Star Supports Services Limited - - 86,278 67,467

- - 128,373 95,884===== ===== ======= ======

27. EARNINGS PER SHARE

Earnings per share (EPS) are based on profit after taxation and the number of issued and fully paid ordinary shares are the end of the each financial year.


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

Profit for the year attributable to 333,594 180,516 209,452 245,792Shareholders ======= ======= ======= =======

Number Number Number Number

Number of ordinary shares in issue 589,497 589,497 589,497 589,497 ======= ======= ======= =======

Earnings per share (Kobo) 57 31 36 42======= ======= ======= =======


40


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41


Group The Company2011 2010 2011 2010

N'000 % N'000 % N'000 % N'000 %

Turnover 4,207,877 4,139,818 2,924,593 3,034,108 Other income 55,268 33,212 68,070 123,241

4,263,145 4,173,030 2,992,663 3,157,349

Purchases and services:- Local (1,899,138) (1,822,729) (1,313,932) (1,328,365)- Imported (537,928) (509,668) (537,928) (509,363)

VALUE ADDED 1,826,079 100 1,840,633 100 1,140,803 100 1,319,621 100========= === ======== === ======== === ======== ===

APPLIED AS FOLLOWS:

To pay employees:Salaries, wages and social 1,212,487 67 1,185,671 64 816,364 71 851,335 65benefits

To pay Government:Taxes 146,150 8 245,739 13 63,384 6 73,787 6

To pay providers of capital:Interest expenses - - 16,883 1 - - 16,883 1

To provide for replacement of assets and expansion of business:- Depreciation 202,291 11 164,465 9 125,503 11 120,710 9 - Deferred taxation (68,443) (4) 47,359 3 (73,900) (6) 11,114 1 - Profit and loss account 333,594 18 180,516 10 209,452 18 245,792 18

1,826,079 100 1,840,633 100 1,140,803 100 1,319,621 100 ========= === ======== === ======== === ======== ===

Value added represents the additional wealth which the company has been able to create by its own and its employees' efforts. This statement shows the allocation of that wealth between employees, shareholders, government and that retained for the future creation of more wealth.

CONSOLIDATED STATEMENT OF VALUE ADDEDFor The Year Ended 31 March 2011

42


FINANCIAL SUMMARY (GROUP)For The Year Ended 31 March 2011

2011 2010 2009 2008 2007N'000 N'000 N'000 N'000 N'000

BALANCE SHEET

ASSETS Fixed assets 739,217 735,324 680,640 647,865 480,085 Long term investments 155,723 155,331 11,404 13,864 13,864 Goodwill 1,500 1,500 1,500 - - Net current assets 940,305 844,594 743,425 662,846 474,084 Deferred taxation (55,430) (123,873) (76,514) (82,438) (46,609)Provision for liabilities and charges (340,884) (329,190) (80,436) (64,528) (116,409)

1,440,431 1,283,686 1,280,019 1,177,609 805,015 ======== ========= ======== ========= ========

CAPITAL AND RESERVESShare capital 294,748 294,748 294,748 294,748 257,248 Share premium 296,433 296,433 296,433 296,433 43,833 Revaluation reserve - - - - 3,050 General reserve 849,250 692,505 688,838 586,428 500,884

1,440,431 1,283,686 1,280,019 1,177,609 805,015 ======== ========= ======== ========= ========

TURNOVER AND PROFITS

Turnover 4,207,877 4,139,818 3,959,979 3,098,503 2,668,266 Profit before taxation 411,301 473,614 459,769 305,544 221,692 Profit after taxation 333,594 180,516 248,285 195,683 118,484

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

Per N1 share data (Kobo):Earnings - Basic 57 31 42 33 23 Earnings - Diluted - - - 33 20 Net assets 244 218 217 200 156

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

NOTES:

1. Earnings per share are based on profit after taxation and the number of issued and fully paid ordinary shares at the end of each financial year.

2. Net assets per share are based on the net assets and number of issued and fully paid ordinary shares at the end of each financial year.

43


FINANCIAL SUMMARY (COMPANY)For The Year Ended 31 March 2011

2011 2010 2009 2008 2007N'000 N'000 N'000 N'000 N'000

BALANCE SHEET

ASSETS

Fixed assets 491,049 516,287 572,230 647,865 480,085 Long term investments 209,433 214,430 169,337 13,864 13,864 Net current assets 827,080 855,239 553,223 662,846 474,084 Deferred taxation (13,728) (87,628) (76,514) (82,438) (46,609)Provision for liabilities and charges (269,298) (286,395) (75,286) (64,528) (116,409)

1,244,536 1,211,933 1,142,990 1,177,609 805,015 ======== ========= ======== ========= ========

CAPITAL AND RESERVES

Share capital 294,748 294,748 294,748 294,748 257,248 Share premium 296,433 296,433 296,433 296,433 43,833 Revaluation reserve - - - - 3,050 General reserve 653,355 620,752 551,809 586,428 500,884

1,244,536 1,211,933 1,142,990 1,177,609 805,015======== ========= ======== ========= ========

TURNOVER AND PROFITS

Turnover 2,924,593 4,139,818 2,978,918 3,098,503 2,668,266 Profit before taxation 198,936 473,614 238,189 305,544 221,692 Profit after taxation 209,452 180,516 122,837 195,683 118,484

Per N1 share data (Kobo):Earnings - Basic 36 31 21 33 23 Earnings - Diluted - - - 33 20 Net assets 211 206 194 200 156

NOTES:

1. Earnings per share are based on profit after taxation and the number of issued and fully paid ordinary shares at the end of each financial year.

2. Net assets per share are based on the net assets and number of issued and fully paid ordinary shares at the end of each financial year.

44


SHARE CAPITAL HISTORY

The company’s initial authorized share capital was N7million comprising 7million ordinary shares of N1 each. The shares were subdivided into ordinary shares of 50 kobo each in July 2006. The company’s authorized share capital is currently N300 million; comprising 600 million ordinary shares of 50 kobo each, while the company’s issued share capital is N294,748,155 comprising 589,496,760 ordinary shares of 50 kobo each.

The following changes have taken place in the authorized and issued share capital of the company since incorporation.

Year Authorised Issued and Fully Paid-up Consideration(N’000) (N’000)

Increase Cumulative Increase Cumulative

1992 7,000,000 7,000,000 3,570,186 3,570,186 Cash

1993 14,000,000 21,000,000 0 3,570,186 -

1994 7,000,000 28,000,000 0 3,570,186 -

1995 17,000,000 45,000,000 0 3,570,186 -

1996 0 45,000,000 38,358,445 41,928,631 Cash

1998 0 45,000,000 1,238,534 43,167,165 Cash

1999 0 45,000,000 298,947 43,466,112 Cash

2000 0 45,000,000 593,550 44,059,662 Cash

2001 0 45,000,000 102,501 44,162,163 Cash

2002 0 45,000,000 5,000 44,167,163 Cash

2003 10,000,000 55,000,000 7,282,468 51,449,631 Cash

2007 245,000,000 300,000,000 205,798,524 257,248,155 Bonus issue

2008 - - 37,500,000 294,748,155 Cash

45


MANAGEMENT TEAM

VICTOR UKWATDGM, Marketing & Key Accounts

‘DESOLA ODEDIRANDGM, Corporate Services

SINA LAJORIN Chief Operating Officer, Red Star Logistics Ltd.

PANTI MOHAMMEDDGM, Operations & Services

VINCENT IHEMENWADGM, Finance & Planning

SOLA OBABORIDGM, Sales

ENOMA OJOChief Operating Officer, Red Star Support Services Ltd.

MUDIAGA OKUMAGBAChief Operating Officer, Red Star Freight Ltd.

SULE UMAR BICHIManaging Director/CEO

MUYIWA OLUMEKUNExecutive Director

46


CORPORATE SOCIAL RESPONSIBILITY REPORT

Red Star Foundation commences in the Northern region

Scholars displaying their cheques with management of Red Star Express

Tour around the Orphanage Home Taking a tour around the Home

Management of Red Star Express in the Orphanage Home Presentation of donations to the Orphanage Home

Managing Director presenting cheque to a scholar

Management of Red Star Express with dignitaries and parents of scholars

47


PROXY FORM

FORM OF PROXY FOR USE AT THE 18TH ANNUAL GENERAL MEETING OF RED STAR EXPRESS PLC. TO BE HELD ON SEPTEMBER 8, 2011 AT THE WELCOME CENTRE HOTEL,

INTERNATIONAL AIRPORT ROAD, MAFOLUKU, LAGOS AT 11 A.M.

I/WE ……………….......................................................................................being a member(s)

of RED STAR EXPRESS PLC. hereby appoint:**………………….............................................or failing him Mr. Sule Umar Bichi as my/our proxy to vote for me/us and on my/our behalf at the Annual General meeting of the Company to be held on Thursday 8th September 2011 and at any adjournment thereof.

Dated this..............................day of ..............................................……….. 2011.

Shareholders' signature………………………..............................…………….

Common seal should be affixed if executed by a corporation.

RESOLUTIONS FOR AGAINST

To present the Audited Financial Statements for the year ended 31st March 2011 and the Report of the Directors and Auditors thereon.

To declare a dividend

To elect/reelect Directors

To authorize Directors to fix the remuneration of the Auditors.

To reelect shareholders representatives on the Audit Committee.

NOTE:

A shareholder who is unable to attend the Annual General Meeting is allowed by law to vote by proxy. The above proxy form has been prepared to enable you exercise your right to vote, in case you cannot personally attend the meeting.

Following the normal practice, the name of the Managing Director of the Company has been entered on the form to ensure that someone will be at the meeting to act as your proxy but if you wish you may insert on the blank space on the form (marked **) the name of any person, whether a member of the Company or not, who will attend the meeting and vote on your behalf instead of one of the Managing Director.

To be valid for the purposes of the meeting, the proxy form must be completed and deposited at the office of the Registrars, Intercontinental Registrars Limited, IPL Plaza, 274, Murtala Mohammed Way, Alagomeji, Yaba, Lagos.

.

.

.

Documents

CONTENTS 01 CONTENTS