GREIF NIGERIA PLC ANNUAL REPORT AND AUDITED FINANCIAL ... · The late signing of the budget had slowed down activities as the annual Gross Domestic Product (GDP) growth rate had slowed

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GREIF NIGERIA PLC Apapa, Nigeria

ANNUAL REPORT AND

AUDITED FINANCIAL STATEMENTS AND

SUPPLEMENTARY FINANCIAL INFORMATION

FOR THE YEAR ENDED 31 OCTOBER 2018

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS, AUDITED FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2018 CONTENTS PAGE Directors, Bankers, Professional Advisers, etc. 3 Results at a Glance 5 Chairman’s Statement 6 Corporate Governance 9 Report of Directors 11 Statement of Directors’ Responsibilities 15 Report of the Audit Committee 16 Independent Auditors Report 17 Statement of Financial Position 20 Statement of Profit & Loss & Comprehensive Income 21 Statement of Changes in Equity 22 Statement of Cash Flows 23 Notes to the Financial Statements 24 Statement of Value Added 68 Five Years Financial Summary 68

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GREIF NIGERIA PLC


DIRECTORS, PROFESSIONAL ADVISERS

DIRECTORS: Mr. Adedayo Abiodun Olowoniyi - Chairman Mr. Olukunle Adebayo Obadina Mr. Gaius Adetayo Omotayo Mr. Erik Maarten ‘t Sas - Dutch Mr. David Onabajo -Managing Director –Appointed on 01/11/2018

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

Ilupeju, Lagos Tel: 01-7740219, 0818-650-7567 Email: [email protected]

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

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

AUDITORS: Ernst & Young

(Chartered Accountants) 10th & 13th Floor, UBA House 57 Marina, Lagos.

SOLICITORS: Irving and Bonnar

Akuro House (7th Floor) 24/26 Campbell Street P.O. Box 2578, Lagos.

PRINCIPAL EcoBank International Plc

BANKERS: First City Monument Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc United Bank for Africa Plc Zenith Bank Plc

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

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

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

mailto:[email protected]

mailto:[email protected]

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GREIF NIGERIA PLC RESULTS AT A GLANCE FOR THE YEAR ENDED 31 OCTOBER 2018

31-Oct

31-Oct

2018

2017

% change

N’000

N’000

incr/(decr)

Revenue 534,611

1,405,218

(62%)

Cost of Sales (649,287)

(1,153,758)

(43%)

(Loss)/profit before taxation (245,229)

77,554

210%

Tax Expense (17,360)

(28,130)

38%

(Loss)/profit for the year (262,589)

49,424

At Year End

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

21,320

-

Shareholders’ funds - N'000 98,835

361,424

(73%)

Total No. of Shares - '000 42,640

42,640

-

Per –Share data

(Loss)/earnings per share (616) Kobo 116 Kobo (620%)

Net assets per share 232 Kobo 848 Kobo (71%)

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GREIF NIGERIA PLC CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2018 Distinguished Shareholders, members of the Board of Directors, invited guests, ladies and gentlemen, I welcome you all to the 81st Annual General meeting of our Company. I hereby present to you the Annual Report and Accounts of Greif Nigeria Plc. for the financial year ended 31 October 2018. BUSINESS ENVIRONMENT For the first six months of 2018, the Nigerian economy recorded improvements that were engendered by increasing business activities, rising oil prices in the global market, increased oil output by the country, declining inflation and increased inflow of foreign exchange. Economic indicators have remained positive since the beginning of the year except for the equities market which saw a lot of volatility but still closed slightly positive, and the manufacturing sector which continued to complain of the lack of access to cheap finance. The late signing of the budget had slowed down activities as the annual Gross Domestic Product (GDP) growth rate had slowed from 2.11 per cent in the last quarter of 2017 to 1.94 per cent in the first quarter of the year. Purchasing Managers Index (PMI) which measures business activity in the country has been expanding faster hovering between 56 and 57 index points since the beginning of the year. Investor optimism over the recovery of Nigeria’s economy skyrocketed during the early parts of 2018 after the nation pulled itself out of recession. Available data suggests economic activity remained relatively weak in the final quarter of 2018, following a modest showing in Q3 which was propped up by higher oil production. The PMI edged down in December and brought the Q4 average below that of Q3’s, signaling waning momentum of business activity towards the end of the year. On the demand side, multi-year high unemployment in Q3 coupled with still-elevated inflationary pressures through year-end likely weighed on private consumption in Q4. This comes against the backdrop of the upcoming presidential election of 16 February which is set to be a two-horse race between incumbent President Muhammad Buhari and Atiku Abubakar, a businessman and former vice-president. Although both candidates take a similar stance on certain economic issues, they differ sharply over the management of the foreign exchange system and the vital oil industry. Thus, were Abubakar to win, the possibility arises that economic policy is reoriented going forward. OPERATING INDUSTRY The economy is expected to gain traction this year, on the back of stronger household consumption and public spending. The recent slide in oil prices and announced OPEC oil output cuts pose downside risks going forward, however. Political uncertainty over the outcome of next month’s general election also clouds the outlook. Focus Economics panelists see GDP increasing 2.4% in 2019, down 0.1 percentage points from last month’s estimate, and 2.9% in 2020. The economy continued to show signs of recovery from the 2016 recession. GDP growth was estimated at 0.8% in 2017, up from –1.5% in 2016. The outlook beyond is positive, with growth projected at 2.1% in 2018 and 2.5% in 2019. This outlook is anchored in higher oil prices and production, as well as stronger agricultural performance Specifically for the Companies in the steel drum business, the second half of 2018 witnessed a worldwide global steel demand surge in the market place caused by supply shortages as a result of scarcity of coking coal and China’s improved economy. This has led to shortage in steel availability in the international market place and increasing overall world prices of our basic raw material. Coupled with the challenges in domestic economy already highlighted above, 2018 was a very difficult year to navigate.

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GREIF NIGERIA PLC CHAIRMAN’S STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2018

We have tried to navigate this difficult business terrain by recovering our costs through multiple price increases to our customers, cost reduction initiatives and improved efficiencies. However, we have not succeeded in that. We have lost our most important customer, halfway through the year and had to reduce prices to retain volumes, not fully recovering costs. OPERATING RESULTS The Company achieved a turnover of N534.611million for the year under review, a decrease of 62% over the prior year figure of N1.405billion. Total comprehensive loss in 2018 was N262m against N49m profit in the prior year. DIVIDEND

The Board did not recommend any dividend. GENERAL OUTLOOK In presenting his 2019 budget to the National Assembly the President, General Muhammadu Buhari articulated his objectives as stimulation of the economy and promotion of Import substitution and export. He presented N7.298trillion budget premised on a benchmark oil price of $42.5 per barrel and production of 2.2million barrels per day. With budgeted aggregate revenue at N4.94trillion, this leaves a budget deficit of N2.36trillion, to be sourced via foreign loans (external sources) and domestic borrowing (internal sources). Capex budget represents about 30% of the total. The budget focus was a GDP growth of 5.3% while strict discipline will ensure alignment of fiscal, monetary, trade and industrial policies. The World Bank and IMF have revised Nigeria’s estimated 2017 GDP growth rate downwards from 5.3% anticipated by government to about 2% growth. Macroeconomic variables still have to significantly improve in order for the country to come out of the current deep-rooted recession. Therefore, we still expect that the economic environment in 2018 will continue to be fluid, changing and uncertain and businesses have to be proactive and make clear-cut choices about how to compete and be unique in the market place. Businesses also need to make clear definition of strategy, business model and core operations in order to ensure income growth and profitability. COMPANY OUTLOOK

The trends that have started mid 2018 still continues in the first (fiscal) quarter of 2019. As a result of increased competition and a stagnant market for steel drums, we do not see an improvement happening in the near future. Greif Nigeria has been operating well below operating costs, even below direct material costs, and sees no signs of improved market conditions. Therefore, we have decided to stop operations with immediate effect. The coming months we will investigate on if and/or how we can continue with Greif Nigeria.

Adedayo Olowoniyi Chairman 31 January 2019

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GREIF NIGERIA PLC CORPORATE GOVERNANCE

FOR THE YEAR ENDED 31 OCTOBER 2018 Introduction

Greif Nigeria Plc recognizes the importance of good corporate governance as a means of sustaining viability of the business in the long term, and further believes that the attainment of business objectives is directly aligned to good corporate behavior. In the conduct of its business, Greif Nigeria has sought to comply with all statutory requirements, adopted tried and proven best practices to protect the environment and its employees, invested in the community in which it operates, and strove to enhance shareholder value in the process. Greif Nigeria adopts both medium and long term growth strategies, and allocates resources in order to guarantee the creation of wealth. Greif Nigeria promotes and recognizes excellence through its employee development programmes. The Company has put in place systems of internal controls in order to safeguard the interests of shareholders and stakeholders and ensure the reliability of its records. As indicated in the notes to the financial statements, the business adopts standard accounting practices to facilitate transparency in the disclosure of information and to give assurance to the reliability of the financial statements. Legal Structure of Greif Nigeria Plc

Greif Nigeria Plc ownership structure is as follows: Greif International Holding B.V. The Netherlands 51% The Van Leer Nigerian Education Trust 23% Other Nigerian Citizens & Associations 26% Board of Directors The responsibility of good corporate governance is placed on the Board of Directors and the Management Team. The Board of Directors is highly qualified and experienced in their professional areas of expertise. As at 31 October 2018, the Board had one full time Executive Director - the Managing Director of the company. The Board also has three other members who are non-Executive Directors, one of whom is the Chairman of the Board and the Greif group Business Regional Manager for Sub Sahara Africa with oversight responsibility for Greif Nigeria management team. The Board meets regularly to deliberate on policy matters, corporate strategy and implementation, review Company performance, operations, finances and set standards for ethical conduct of the Company’s business, amongst other critical activities. The Board met three times during the year under review and the attendance is presented in the table below:

P = Present A = Absent

No.

Names of Directors

Dates of Board Meeting

08/12/2017 25/04/2018 30/08/2018

1. Mr. Adedayo Olowoniyi – Chairman P P P

2. Mr. Olukunle Obadina – Managing P P P

3. Mr. Erik Maarten ‘t Sas P P P

4. Mr. Gaius A. Omotayo Represented Represented Absent

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GREIF NIGERIA PLC CORPORATE GOVERNANCE Cont’d FOR THE YEAR ENDED 31 OCTOBER 2018 The Audit Committee

As at 31 October 2018, the Audit Committee consisted of five (5) members, two of whom are members of the Board of Directors and the other three members being independent shareholders. The Audit Committee is chaired by an independent shareholder member. The committee meets to review the adequacy of the internal and external audit plan, to receive and deliberate on the report of the external auditors, to review progress on recommendations made in both the internal and external audit reports, to review the adequacy of internal control systems and the degree of business compliance with laid down internal policies, laws, code of business principles and any other relevant regulatory framework. The Committee met three times during the year under review and the attendance is presented in the table below:

No.

Names of Audit Committee Dates of Audit Committee Meeting

Members 14/11/2017 29/01/2018 15/05/2018 29/08/2018

1. Mr. D.O. Oguntoye – Chairman P P P P

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

3. Mr. Gaius A. Omotayo P A A A

4. Alhaji K. A. Saka P P P P

5. Mr. Erik Maarten ‘t Sas R R R P

P = Present; A = Absent; R = Represented The Management Team

The Management Team consists of six full time managers of the Company which include the Managing Director and five heads of functions namely Finance, Marketing, Production, Maintenance, and Human Resources. The Management team meets regularly to review the performance of the company and assess progress against the achievement of laid down objectives. It also reviews programmes and strategies, and assigns responsibilities and resources for achievement of set goals. Consequently, the Management Team is charged with the responsibility of identifying and assessing the risk profile within which the company is operating, with a view to eliminating or minimizing the impact of such risks to the achievement of set company objectives. Code of Business Principles

Greif has a documented code of business principles to guide all employees and business partners in the discharge of their duties all over the world, wherever Greif subsidiaries operate. Greif Nigeria as a member of the Greif Group of companies, subscribes to this code. The code sets the standard of professionalism and degree of integrity required for business operations. Among other things, the code covers the following areas: compliance with the law, conflicts of interest, public activities, environmental management, diversity in the workplace, accuracy and reliability of financial reporting, related and interested party transactions, etc. It also covers the procedure for handling breaches and instances of non-compliance. The company has adopted a code of conduct regarding securities transactions by its directors and other interested parties in accordance with Nigerian Stock Exchange rules governing transactions with related parties or interested parties and Greif group code of conduct. Specific enquiry of all Directors has been made on compliance or otherwise with the listing rules and in the company’s code of conduct regarding securities transactions by the Directors. There was no known non-compliance by the Directors at the time of reporting

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 OCTOBER 2018 The Directors hereby submit their report together with the audited financial statements for the year ended 31st October 2018. PRINCIPAL ACTIVITIES The principal activities of the Company during the year continued to be the manufacturing and marketing of metal drums. STATE OF AFFAIRS In the opinion of the Directors, the state of the Company's affairs is satisfactory and there has been no material change since the reporting date. RESULT FOR THE YEAR 2018 2017

N’000 N’000 Revenue 534,611 1,405,218 ---------- ---------- (Loss)/profit before taxation (245,229) 77,554 Taxation (17,360) (28,130) ----------- --------- (Loss)/profit for the year (262,589) 49,424 ====== ===== DIVIDEND The Directors did not recommend a dividend for approval at the Annual General Meeting. EVENTS AFTER REPORTING PERIOD

There were no significant event after the reporting date, which have not been provided for in these financial statements. DIRECTORS

The names of the Directors at the date of this report and of those who have held office during the year are as follows: Mr. Adedayo Abiodun Olowoniyi - Chairman Mr. Olukunle A. Obadina -Retired as Managing Director on 31/10/2018 Mr. Gaius A. Omotayo Mr. Erik Maarten ’t Sas - Dutch Mr. David Onabajo - Appointed as Managing Director on 01/22/2018 DIRECTORS’ INTERESTS IN CONTRACTS

None of the Directors has notified the Company for the purpose of section 277 of the Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria 2004, of their direct or indirect interest in contracts or proposed contracts with the Company during the year. RECORD OF DIRECTORS’ ATTENDANCE AT BOARD MEETINGS In accordance with section 258 (2) of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004, the record of the Directors’ attendance at Director’s meetings during 2017/2018 is available for inspection at the Annual General Meeting.

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS – Cont’d FOR THE YEAR ENDED 31 OCTOBER 2018

DIRECTORS’ SHAREHOLDINGS The Register of Directors’ interests in the share capital of the Company is available for inspection at the Annual General Meeting. The direct and indirect interest of Directors in the issued share capital of the Company as recorded in the Register of Directors’ Shareholdings and/or as notified by them for the purposes of sections 275 and 276 of Companies and Allied Matters Act (CAP C20) Laws of the Federation of Nigeria 2004, and the listing requirements of the Nigerian Stock Exchange are as follows: Number of Shares as at October 31 October 31 2018 2017 Mr. G.A. Omotayo 115,133 115,133 Mr. O.A. Obadina 72,333 72,333 SUBSTANTIAL INTEREST IN SHARES

The shares of the Company are beneficially held as follows: Number of shares as at

31 October, % 31 October, % 2018 2017

Greif International Holding B.V. The Netherlands 21,746,400 51 21,746,400 51 The Van Leer Nigerian Education Trust 9,807,200 23 9,807,200 23 Other Nigerian Citizens & Associations 11,086,400 26 11,086,400 26 ------------- ---- -------------- ----- 42,640,000 100 42,640,000 100 ====== === ====== ==

No individual shareholder other than Greif International Holdings B.V., and The Van Leer Nigerian Education Trust held more than 5% of the issued share capital of the Company as at 31 October 2018. SHAREHOLDER INFORMATION Analysis of shareholding as at 31 October, 2018

Range No. of

Shareholders Holder's

% Holders

Cum Units Units%

Units Cum

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

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

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

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

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

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

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

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS – Cont’d FOR THE YEAR ENDED 31 OCTOBER 2018 Analysis of shareholding as at October 31, 2017

Range No. of

Shareholders Holder's

% Holders

Cum Units Units%

Units Cum

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

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

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

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

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

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

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

History of Share Capital

DATE № of

Shares

Authorised N Description

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

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

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

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

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

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

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

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

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

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

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

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

As at 31 October, 2018 the called up and fully paid capital of the Company was N 21,320,000 divided into 42,640,000 shares of 50 kobo each SUPPLIERS

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

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

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GREIF NIGERIA PLC REPORT OF THE DIRECTORS – Cont’d FOR THE YEAR ENDED 31 OCTOBER 2018

PROPERTY, PLANT AND EQUIPMENT

Movements in Property, Plant and Equipment during the year are shown in Note 7 to the financial statements. In the opinion of the Directors, the market value of the Company's Property, Plant and Equipment is not lower than the value shown in the audited financial statements. CHARITABLE GIFTS AND DONATIONS The company made donations of N485,000 (2017: N400,000) as follows:

Associations 31October 2018 31 October 2017

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

485,000 200,000.

2.. Komforta Schools 200,000

Total 485,000 400,000

EMPLOYMENT OF PHYSICALLY-CHALLENGED PERSONS The Company employed no physically-challenged person during the year. It is, however, the Company's policy to consider physically-challenged persons for employment if academically and medically qualified. HEALTH, SAFETY AND ENVIRONMENT Health, safety and environmental regulations are applied within the Company's premises and employees are aware of existing regulations. The Company provides subsidy to all categories of employees for medical, transport, housing, etc. EMPLOYEES' INTEREST AND TRAINING

The Company is committed to keeping employees fully informed as far as possible, regarding the Company's performance and progress. The Company also seeks their views wherever practicable on matters, which particularly affect them as employees. Management, professional and technical expertise are the Company's major assets, and investment in developing such skills continues. The Company's expanding skill base has extended to a range of training provided and has broadened opportunities for career development within the organization. Incentive schemes designed to meet the circumstances of each individual are implemented wherever appropriate and some of these schemes include bonus, promotion, wage increase, etc. AUDITORS Ernst & Young, having expressed their willingness, will continue in office as the Company’s auditors in accordance with section 357(2) of the Companies and Allied Matters Act, CAP C20 Laws of the Federation of Nigeria 2004. A resolution will be proposed authorizing the Directors to fix their remuneration. BY ORDER OF THE BOARD MARINA NOMINEES LIMITED FRC/2015/00000000001506 LAGOS, NIGERIA 31 January 2019

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GREIF NIGERIA PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RELATION TO THE FINANCIAL STATEMENTS. FOR THE YEAR ENDED 31 OCTOBER 2018 The Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004, requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of financial affairs of the Company at the end of the year and of its profit or loss. The responsibilities include ensuring that the company: a) Keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the

Company and comply with the requirements of the Companies and Allied Matters Act CAP C20 Laws of the Federation of Nigeria 2004;

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

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

prudent judgments and estimates, and are consistently applied. The Directors accept responsibility for the annual financial statements loss which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards issued by International Accounting Standards Board, Financial Reporting Council of Nigeria Act № 6, 2011 and the requirements of the Companies and Allied Matters Act, CAP C20, Laws of the Federation of Nigeria 2004. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its profit for the year ended 31 October 2018. The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. To the best of our knowledge and ability we report no contravention or violation of any regulatory requirement(s) during the year. 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. SIGNED ON BEHALF OF THE BOARD OF DIRECTORS ON 30TH JANUARY 2019 BY:

David Onabajo O. A. OBADINA Managing Director Director FRC/2018/IODN/00000018995 FRC/2013/ICAN/00000004254

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GREIF NIGERIA PLC REPORT OF THE AUDIT COMMITTEE

TO THE MEMBERS OF GREIF NIGERIA PLC


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

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

b) The scope and planning of the external audit are in our opinion adequate c) The internal control system was in order d) The Independent Auditors’ Management Letter Comments were satisfactorily dealt with by

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

MEMBERS OF THE AUDIT COMMITTEE

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

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

5. Elder Lady A .Shoewu, JP - Shareholders Representative The additional director will be appointed at the next AGM to make up equal number as CAMA requires Mr. David O. OGUNTOYE FRC/2013/ANAN/00000002787 Chairman, Audit Committee 31 January 2019

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16

17

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GREIF NIGERIA PLC STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER 2018

Notes 31-Oct-18

31-Oct-17

Assets

N’000

N’000

Non-Current Assets Property, plant and Equipment 7 93,848

123,957

Intangible Assets 8 4,583

9,031

Deferred taxation 15c -

17,098

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

Total Non-Current Assets

98,431

150,086

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

Current Assets Inventories 9 63,874

182,126

Trade & Other Receivables 10 168,938

236,670

Prepayments 11 20,880

48,125

Cash at bank and in hand 12 123,608

169,657

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

Total Current Assets

377,300

636,578

----------

----------

Total Assets

475,731

786,664

===== ======

Equity & Liabilities Equity 21,320

21,320

Retained earnings 13b 77,515

340,104

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

Total Equity

98,835

361,424

- --------

----------

Current Liabilities Trade & other payables 17 376,896

376,265

Income Tax Payable 15b -

48,975

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

Total Current Liabilities

376,896

425,230

----------

---------

Total Equity & Liabilities

475,731

786,664

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

The account was approved by the Board of Directors on 30 th January 2019

_______________________ _____________________ __________________ Olukunle Obadina David Onabajo H. G. Omidiora Director Managing Director Chief Finance Officer FRC/2014/ICAN/00000004254 FRC/2018/IODN/00000018995 FRC/2013/ICAN/00000004092

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GREIF NIGERIA PLC STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 OCTOBER 2018

Note 31-Oct-18

31-Oct-17

N’000

N’000

Revenue 18 534,611

1,405,218

Cost of Sales 19 (649,287)

(1,153,758)

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

Gross (loss)/profit

(114,676)

251,460

Other operating income 19 19,755 3,876

Selling & Marketing Costs 19 (8,250)

(5,068)

General and Administrative Expenses 19 (150,426)

(174,105)

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

-----------

Operating (loss)/profit

(253,597)

76,163

Finance Income 21 8,368

1,391

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

(Loss)/profit before tax

(245,229)

77,554

Tax Expense 15a (17,360)

(28,130)

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

(Loss)/profit for the year

(262,589)

49,424

Other Comprehensive income

-

-

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

Total comprehensive(loss)/ income

(262,589)

49,424

=======

======

Total comprehensive income attributable to: Equity Holders of the Company

(262,588)

49,424

Earnings per share

N

N

Basic (loss)/earnings per share (Loss)/earnings from operations (616)

116

Diluted (loss)/earnings per share (Loss)/earnings from operations (616)

116

See notes to the financial statements

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GREIF NIGERIA PLC STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 OCTOBER 2018

For the year ended 31 October 2018

Notes Share Capital

Retained Earnings Total Equity

N’000 N’000 N’000

Balance as at 1 November 2017

21,320 340,104 361,424

Loss for year

- (262,589) (262,589)

21,320 77,515 98,835

Dividend Paid

- - -

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

For the year ended 31 October 2017

Share Capital

Retained Earnings Total Equity

N’000 N’000 N’000


21,320 316,264 337,584

Profit for year

- 49,424 49,424

21,320 365,688 387,008

Dividend Paid

- (25,584) (25,584)

Balance as at 31 October 2017 13b 21,320 340,104 361,424


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GREIF NIGERIA PLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 2018

Note 31-Oct-18

31-Oct-17

N’000

N’000

OPERATING ACTIVITIES Cash receipts from customers

649,344

1,487,141

Cash paid to suppliers and employees (661,813)

(1,332,639)

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

Cash flow (used in)/ provided by operating activities 12a (12,469)

154,502

Tax Paid 15b (49,237)

(27,482)

----------

----------

Net cash flow (used in)/ provided by operating activities

(61,706)

127,020

INVESTING ACTIVITIES

Proceeds from sales of property and equipment 7,984

-

Purchase of property, plant and equipment 7 (695)

(5,959)

Interest received

8,368

1,391

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

Net cash flow provided/(used in) by investing activities

15,657

(4,568)

FINANCING ACTIVITIES

Dividend paid

-

(25,584)

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

Net cash flow used in financing activities

-

(25,584)

----------

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

Net(decrease)/increase in cash and cash equivalent

(46,049)

96,868

Cash and cash equivalent at the beginning of the year

169,657

72,789

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

Cash and cash equivalent at the end of the year 10 123,608

169,657

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


22

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 OCTOBER 2018

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

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

(2) BASIS OF PREPARATION

(2a) Statement of compliance

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

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

These financial statements were authorized by the Board of Directors on 31 January 2019 and there were no events subsequent to the year end. There is no material event after the reporting date which could have had a material effect on the state of affairs of the company as at 31 October 2018.

(2b) Functional and presentation currency

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

(2c) Basis of measurement

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

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

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

GREIF NIGERIA PLC NOTES TO THE FINANCIAL STATEMENT-cont’d FOR THE YEAR ENDED 31 OCTOBER 2018

23

(2d) Use of judgements and estimates

The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period . These estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates

The estimates and underlying assumptions are reviewed on an ongoing basis. Rev isions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(2e) Current vs non-current classification

The Company presents assets and liabilities in statement of financial position based on current/non-current classification. An asset is presented as current when it is:

- Expected to be realised or intended to sold or consumed in normal operating cycle - Held primarily for the purpose of trading - Expected to be realised within twelve months after the reporting period, or - Cash or cash equivalent unless restricted from being exchanged or used to settle a

liability for at least twelve months after the reporting period All other assets are classified as non-current.

A liability is presented as current when:

- It is expected to be settled in normal operating cycle - It is held primarily for the purpose of trading - It is due to be settled within twelve months after the reporting period, or - There is no unconditional right to defer the settlement of the liability for at least twelve

months after the reporting period. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.


24

2f) Fair value measurement The Company does not measure any asset or liability at fair value , subsequent to initial recognition. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or - In the absence of a principal market, in the most advantageous market for the asset or

liability. The principal or the most advantageous market must be accessible to by the Company. (3) SIGNIFICANT ACCOUNTING POLICIES

(3a) Property, plant and equipment

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

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

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

3a.i Subsequent costs

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

3a.ii Depreciation

Depreciation is charged to the profit or loss (except where it is required for recognition in another asset, based on another IFRS Standard e.g. IAS 2) on a straight-line basis over the estimated useful lives of each significant part of an item of property, plant and equipment. Depreciation on leased assets is charged over the shorter of the lease term and their useful life. Freehold land is not depreciated whilst leasehold land is depreciated over the lease period in the certificate of occupancy, usually 99years.


25

The useful lives of the property, plant and equipment are as follows:

ASSET CLASS ECONOMIC USEFUL LIVES

Land NIL

Building - 20 – 30-Years

Equipment, Plant and Machinery - 5 – 15-Years

Motor vehicles - 3 – 5-Years

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

3a.iii Derecognition

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

3b. Intangible assets

3b.i Software

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

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

3b.ii Amortization

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

Classes of intangible assets Useful lives

IT Software 3 years


26

3c. Financial assets

3c.i Initial recognition and measurement

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

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

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

3c.ii Subsequent measurement

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

3c.iii Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment losses. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in profit or loss. The company's financial assets that qualify as loans and receivables include trade receivables;VAT receivables,sundry receivables and cash and cash equivalent.

3c.iv Trade and other receivables

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


27

3c.v Derecognition

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

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

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

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Company’s continuing involvement in it. In such case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

3c.vi Impairment of financial assets

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

3c.vii Financial assets carried at amortised cost

The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.


28

3d Financial liabilities

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

3d.i Trade and other payables Trade and other payables are obligations to pay for goods and services that have been acquired in the normal course of business. These amounts are classified as current because payment is expected in one year or less. Trade and other payables are initially recognised at fair value i.e. transaction cost less all discounts. Subsequent to initial recognition, they are measured at amortised cost using effective rate of interest. Normally they are due for payment within 12 -months from the reporting year end. In the event of a longer payment i.e. greater than 12 -months such balances are discounted using the effective interest rate.

3d.ii Bank overdrafts Bank overdrafts are initially recognised at fair value which is the proceeds received, net of directly attributable costs. These are subsequently measured at amortised cost using the effective interest rate method with finance costs being recognised in profit or loss and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Bank overdrafts are classified as interest -bearing loans and borrowings under current liabilities.

3d.iii Loans and borrowings After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in profit or loss.

3d.iv Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

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


29

3e. Inventories

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

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

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

Raw materials: Purchase cost and weighted average cost basis

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

Finished goods: Cost of direct materials, conversion costs and a proportion of manufacturing overheads based on normal operating capacity using the weighted average basis.3f. Cash and cash equivalents

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

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

3g. Impairment of non-financial assets

3g.i Impairment review

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

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

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individua l asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.


30

3g.i Impairment review-continued

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

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

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

The recoverable amount of assets or cash-generating units is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the ris ks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

3g.ii Conditions for reversals of impairments

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

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

3h. Foreign currency transactions

Transactions in foreign currency are recorded initially in Nigerian Naira which is the functional and presentation currency at the rate of exchange ruling at the date of the transaction. At each subsequent annual reporting date :

Foreign currency monetary amounts are reported using the closing rate

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

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


31

3i. Share capital

3i.i Share capital

Share capital is classified as equity if it is non-redeemable and any dividends are discretionary, or is redeemable but only at the Company's option. Dividends on share capital classified as equity are recognised as distributions within equity. Non-equity share capital is classified as a liability if it is redeemable on a specific date or at the option of the shareholders or if dividend payments are not discretionary. Dividends thereon are recognised in profit or loss as a finance charge.

3i.ii Dividends

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

3j. Pension schemes

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

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

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

3k. Short-term employee benefits

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

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

3l. Provisions

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


32

3m. Revenue – Sales of goods

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

Revenue is recognised when evidence exists in the form of delivery of, and delivery acknowledgment of goods to clients, that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.

3n. Income tax

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

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

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

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

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

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

3o. Segment reporting

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


33

3p. Earnings per share

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

4. Standards issued but not yet effective

A number of new Standards and amendments to Standards are effective for annual

period beginning after the reporting period and earlier application is permitted;

however, the Company has not early applied the following new or amended

Standards in preparing these financial statements.

New or

amended

Standards

Summary of the requirements Possible impact on the

financial statements

IFRS 9

Financial

Instruments

IFRS 9 replaces the existing

guidance in IAS 39 Financial

Instruments: Recognition and

Measurement. Except for certain

trade receivables, an entity initially

measures a financial asset not at

fair value through profit/loss,the

transaction costs. debts instruments

are subsequently measured at fair

value through profit/loss

(FVOCI),on the basis of their

contractual cash flows and the

business model under which the

debt instruments are held. There is

a fair value option (FVO) that

allows financial assets on initial

recognition to be designated as

FVTPL if that eliminates or

significantly reduces an accounting

mismatch.

Equity instruments are generally

measured at FVTPL. However

entities that have an irrevocable

option on an instrument-by-

instrument basis to present changes

in the fair value of non-trading

instruments in other

comprehensive income (OCI)

without subsequent reclassification

to profit/loss. The amendments

The Company plans to adopt the new standard on the required effective date and will not restate comparative information. Shortly before finalising the October 2018 financial statements, the Company performed a detailed impact assessment of all three aspects of IFRS 9. This assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to the Company in 2019 when it will adopt IFRS 9. Overall, the Company expects no significant impact on its statement of financial position and equity except for the effect of applying the impairment requirements of IFRS 9. The Company expects an increase in the loss allowance resulting in a negative impact on equity as discussed below. In addition, the Company will implement changes in classification of certain financial instruments. (a) Classification and measurement

The Company does not expect a significant impact on its


34

have an effective date of 1 January

2018.

statement of financial position or equity on applying the classification and measurement requirements of IFRS 9. Debt instruments classified as loans and receivables Under IAS 39, the Company has the following debt instruments which are classified under loans and receivables:

Trade receivables

Cash and Bank balances

These debt instruments are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Company analysed the contractual cash flow characteristics of those instruments and concluded that they meet the criteria for amortized cost measurement under IFRS 9. Therefore, reclassification of these instruments is not required. In addition, the measurement basis for these debt instruments will continue to be amortised cost, thus leading to no change in the current practice. (b) Impairment

IFRS 9 requires the Company to record expected credit losses on all of its debt instruments either on a 12-month or lifetime basis. The Company will apply the simplified approach and record lifetime expected losses on all trade receivables that do not have significant financing component. For all other debt instruments other than trade receivables, the Company will apply general approach under which financial assets are classified into three stages i.e. stage 1, stage 2 or stage 3 depending on whether or not the credit risk of the financial asset has increased significantly. The Company has determined


35

that, due to the unsecured nature of its receivables, the loss allowance will likely increase, this will lead to a corresponding related decrease in the deferred tax liability The Company will apply general

approach under which financial

assets are classified into three

stages i.e. stage 1, stage 2 or stage

3 depending on whether or not

the credit risk of the financial

asset has increased significantly.

Due to the fact that the financial

assets (cash and bank balances)

has not been tested for

impairment, the loss allowance to

be recognised will likely increase.

This will lead to adjustments in

the carrying value of the financial

assets and deferred tax liability.

(c) Hedge accounting

Although IFRS 9 does not change the general principles of how an entity accounts for effective hedges, the Company does not engage in any financial or economic hedge. As such, this aspect of IFRS 9 will not have impact on the company..

IFRS 15

Revenue

from

Contracts

with

Customers

IFRS 15 replaces all existing revenue

requirements in IFRS 11,construction

contracts, IAS 18,revenue,IFRIC 13

Customers loyalty programmes;

IFRIC 15 Agreements for the

construction of real estate, IFRIC

18,Transfers of asset from customer.

The standard outlines the principle

an entity must apply to measure and

recognize revenue at an amount that

reflects the consideration to which

the entity expects to be entitled in

exchange for transferring goods or

services to a customer.

The principle in IFRS 15 must be

Before finalizing the October 2018 financial statements, the Company performed a detailed assessment of IFRS 15 and the outcome of this assessment is described below.; These are based on the Company’s current interpretation of IFRS 15 and may be subject to change as interpretations evolve. Furthermore, the Company is considering and will continue to monitor any further development. The following issues has been identified by the Company and require consideration:


36

applied using a five-step model. The

standard requires entities to exercise

judgement, taking into consideration

all of the relevant facts and

circumstances when applying each

step of the model to contracts with

their customers

The standards also specifies how to

account for the incremental cost of

obtaining a contracts and the costs

directly related to fulfilling a

contracts.

IFRS 15 is effective for annual

reporting periods beginning on or

after 1 January 2018.

Combining contracts and

portfolio expedient

Under the current revenue

standard, contracts are not

required to be combined for the

purpose of recognising revenue.

On adoption of IFRS 15, the

Company will not be combining

its currently existing contracts

with the same customer because

the contracts do not meet the

requirements of IFRS 15:17.

However, contracts with similar

characteristics and different

customers may be combined by

applying the portfolio approach

practical expedient. The

expedient allows an entity to

apply the five-step model to a

portfolio of contracts (or

performance obligations) with

similar characteristics if the entity

reasonably expects that the effects

on the financial statements of

applying the Standard to the

portfolio would not differ

materially from applying the

Standard to the individual

contracts (or performance

obligations) within that portfolio.

The IASB recognized that there

may be situations in which it may

be more practical for an entity to

combine contracts for revenue

recognition purposes rather than

attempt to account for each

contract separately.

Significant financing component

The Company normally gives varying credit period between 30-


37

60days to customers for payment to be made after sales and rendering of services. Using the practical expedient in IFRS 15, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less. Unbundling of performance

obligations

The Company currently does not assess its products being sold in a contract for distinctiveness either by themselves or as part of a bundle. The Company’s principal remains the manufacturing and marketing of steel drums, the Company operates a sales level agreement with its customers.. IFRS 15 requires that an entity must identify the promised goods and services within a contract and determine which of the goods and services are separate performance obligations. Promised goods or services represent separate performance obligations if the goods or services are distinct (by themselves, or as part of a bundle of goods and services) or if the goods and services are part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer. If a promised good or service is not distinct, an entity is required to combine that good or service with other promised goods or services until it identifies a bundle of goods or services that, together, is distinct. An entity is required to account for all the


38

goods or services promised in a contract as a single performance obligation if the entire bundle of promised goods and services is the only performance obligation identified From the Company’s assessments, the Company has determined that sales level agreements contracts have one (1) performance obligations which is the supply of steel drums.

The Company intends to

implement a process for

analysing all promises stated in a

contract in order to guide it in

accurately identifying its

performance obligations. The

Company is equally working

towards developing clear

accounting policies that will

guide the identification of

performance obligations.

Sale of Goods

Greif Nigeria Plc is into the production and marketing of steel drums. Revenue is recognized at a point in time when control of the asset is transferred to the customer, generally on delivery of the goods. The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated (e.g., warranties, customer loyalty points). In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration and the existence of significant financing components.


39

Revenue recognition at a point in

time

For sale of motor vehicles and non-routine servicing of motor vehicles, revenue is recognized at a point in time once delivery has been made to the customer.

Determining the transaction

price

The Company currently does not consider the impact of significant financing component in the determination of transaction price. IFRS 15 requires that an entity shall consider the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. The Company normally gives between 30-60days to its customers for payment to be made after services have been rendered. The Company has assessed the effect of financing component on the transaction price with its customer and determined to take advantage of the practical expedient in IFRS 15 which requires that an entity need not adjust the transaction price for the effects of significant financing component since the period between when it sells to a customer and when the customer pays for that good or service is less than a year.


40

Allocation of transaction price to

performance obligation

Under the current revenue

standard, the company is not

required to determine

performance obligations and

therefore does not allocate

transaction price to performance

obligations.

However, IFRS 15 states that the objective when allocating the transaction price is for an entity to allocate the transaction price to each performance obligation (or distinct good or service) in an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the promised goods or services to the customer. Determining the transaction price is an important step in applying IFRS 15 because this amount is allocated to the identified performance obligations and is recognised as revenue when (or as) those performance obligations are satisfied. IFRS 15 also requires that once the separate performance obligations have been identified and the transaction price has been determined, an entity is expected to allocate the transaction price to the performance obligations in proportion to their stand-alone selling prices. IFRS 15 indicates that the observable price of a good or service sold separately provides the best evidence of stand-alone selling price. However, in many situations, stand-alone selling prices will not be readily observable. In those cases, an entity must estimate the stand-alone selling price.


41

IFRS 15.35 states that an entity transfers control of a good or service over time if one of the following criteria are met:

a. As the entity performs,

the customer

simultaneously receives

and consumes the

benefits provided by the

entity’s performance.

b. The entity’s performance

creates or enhances an

asset (e.g., work in

progress) that the

customer controls as the

asset is created or

enhanced.

c. The entity’s performance

does not create an asset

with an alternative use to

the entity and the entity

has an enforceable right

to payment for

performance completed

to date.

The Company expects that the

adoption of IFRS 15 is not

expected to have an impact on

the Company’s revenue, profit or

loss because the method of

measuring progress currently is

still available under the output

method of IFRS 15 and the

application will produce the same

result.

IFRS 15 explains that when an

entity has determined that a

performance obligation is

satisfied over time, the standard

requires the entity to select a

single revenue recognition


42

method for the relevant

performance obligation that

faithfully depicts the entity’s

performance in transferring

control of the goods or services.

In addition, the entity is required

to apply the selected method

consistently to similar

performance obligations. Hence,

at the end of each reporting

period, an entity is required to re-

measure its progress towards

completion of the performance

obligation.

On adoption of IFRS 15, the

Company does not expect that

measuring progress in line with

the requirements of IFRS 15 will

have an impact on the revenue

and profit or loss because

measuring progress using output

method (as anticipated) is not

expected to be significantly

different from revenue

recognized under the current

standard. However, the

Company is working towards

developing a clear accounting

policy initiative for determining

the appropriate method of

measuring progress.

Presentation and disclosure

requirements

The presentation and disclosure requirements in IFRS 15 are more detailed than under current IFRS. The presentation requirements represent a significant change from current practice and significantly increases the volume of disclosures required in the Company’s financial statements.


43

Many of the disclosure requirements in IFRS 15 are new and the Company has assessed that the impact of some of these disclosures requirements will be significant. In particular, the Company expects that the notes to the financial statements will be expanded because of the disclosure of significant judgements made: when determining the transaction price of contracts and stand-alone price of performance obligations. In addition, as required by IFRS 15, the Company will disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. It will also disclose information about the relationship between the disclosure of disaggregated revenue and revenue information disclosed for each reportable segment. The Company is finalizing appropriate systems, internal controls, policies and procedures necessary to collect and disclose the required information. Other adjustments

In addition to the major adjustments described above, on adoption of IFRS 15, other items of the primary financial statements such as deferred taxes, profit or loss after tax for the year will be affected and adjusted as necessary. The recognition and measurement requirements in IFRS 15 are also applicable for recognition and measurement of any gains or losses on disposal of


44

non-financial assets (such as items of property and equipment and intangible assets), when that disposal is not in the ordinary course of business.

IFRS 16

LEASES

IFRS 16 requires leases to account

for all leases under a single- on the

balance sheet model in a similar way

to finance leases under IAS 17.The

standard includes two recognition

exemptions for leases-leases of

“low-value” assetss (e.g. personal

computers) and short-term leases

(i.e. leases with a lease term of 12

months or less).At the

commencement date of a lease, the

lessee will recognise a liability to

make lease payment(i.e. the lease

liability) and an asset representing

the right to use the underlying

assets during the lease term (i.e. the

right of use asset).

Lessee will be required to separately

recognize the interest expenses in

the lease liability and the

depreciation expense on the right-on

use asset.

Lessor accounting is substantially

unchanged from current accounting

under IAS 17. Lessor will continue

to classify all leases using the same

classification principle as in IAS 17

and distinguish between two types

of leases, operating and finance

leases.

This is effective for annual period

beginning on or after 1 January 2019

The Company does not have any lease arrangement in place. Lessor accounting under IFRS 16 is substantially unchanged from today’s accounting under IAS 17. Lessors will continue to classify all leases using the same classification principle as in IAS 17 and distinguish between two types of leases: operating and finance leases. IFRS 16 also requires lessees and lessors to make more extensive disclosures than under IAS 17. IFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted, but not before an entity applies IFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. The standard’s transition provisions permit certain reliefs.

IFRIC 22

Foreign

currency

Transactions

and

Advance

Considerati

The interpretation of this standard

clarifies that in determining the spot

exchange rate to use on initial

recognition of the related asset,

expense or income( or part of it) on

the derecognition of a non-monetary

asset or non-monetary asset or non-

The Company has carried

out a detailed impact

assessment. It had

ascertained and

documented the level of

the new standard will

have on its financial


45

on monetary liability relating to

advance consideration, the date of

the transaction is the date in which

an entity initially recognizes the

non-monetary asset or non-

monetary liability arising from the

advance consideration. If there are

multiple payments or receipts in

advance, then the entity must

determine a date of the transactions

for each payment or receipt of

advance.

The standard is effective for annual

period beginning on or after 1

January 2018.

statements

IFRIC 23

Uncertainty

over income

tax

treatment

This standard clarifies application of

the recognition and measurement

requirements in IAS 12 income taxes

when there is uncertainty over

income tax treatment

The interpretation addresses the

accounting for income taxes when

tax treatments involve uncertainty

that affects the application of IAS 12.

The interpretation does not apply to

taxes or taxes outside the scope of

IAS 12,nor does it specifically

include requirements relating to

interest and penalties associated

with uncertain tax treatments.

The standard says that an entity has

to determine whether to consider

each uncertain tax treatment

separately or together with one or

more other uncertain tax treatment.

The approach that better predicts

the resolution of the uncertainty

should be followed.

Whether an entity consider

uncertain tax treatment separately.

The assumption an entity makes the

examination of tax treatment by

taxation authorities.

How an entity considers uncertain

tax treatment separately.

The assumption an entity makes

The Company has carried

out a detailed impact

assessment. The company

has determined to

consider each tax

uncertain tax treatment

separately and together

with one or more other

uncertain tax treatment.

The company plans to

interpret the standard

from its effective date.

Since the company does

not operate in a complex

tax environment, applying

the interpretation may not

have significant impact on

its financial statement.

Also the company needs

to establish processes and

procedures to obtain

information that is

necessary to apply the

interpretation of the

standards


46

about the examination of tax

treatments by taxation authorities.

How an entity determines taxable

profit (tax loss),tax bases, unused

tax losses ,unused tax credits and

tax rates.

How an entity considers changes in

facts and circumstances

The interpretation is effective for

annual reporting period beginning

on or after 1 January 2019.

.

IFRS 2 Classification and Measurement of Share-based Payment Transactions — Amendments to IFRS 2

The IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are met. The amendments are effective for annual periods beginning on or after 1 January 2018, with early application permitted.

The Company is assessing the potential effect of the amendments on its financial statements.


47

5. Significant accounting judgments, estimates and assumptions

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

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

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

period. However, uncertainty about these assumptions and estimates could result in

outcomes that require a material adjustment to the carrying amount of the asset or liability

affected in future periods.

5a. Judgments

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

following judgments, which have the most significant effect on the amounts recognised in

the financial statements:

5a-i Estimates and assumptions

Going concern: The Company’s management has made an assessment of its ability

to continue as a going concern and is satisfied that it has the resources to continue

in business for the foreseeable future. Furthermore, management is not awar e of

any material uncertainties that may cast significant doubt upon the Company’s

ability to continue as a going concern. Therefore, the financial statements continue

to be prepared on the going concern basis.

5a-ii Impairment of non-financial assets

The company assesses assets or group of assets for impairment whenever events or

changes in circumstances indicate that the carrying amount of an asset may not be

recoverable. If any such indication of impairment exists, the Company makes an

estimate of the asset’s recoverable amount. Individual assets are grouped for

impairment assessment purposes at the lowest level (Cash generating unit) at

which there are identifiable cash flows that are largely independent of the cash

flows of other group of assets. An assets recoverable amount is the higher of its fair

value less costs to sell and its value in use. Where the carrying amount of an asset

exceeds its recoverable amount, the asset is considered impaired and is written

down to its recoverable amount. In assessing value in use, the estimated future

cash flows are adjusted for the risks specific to the asset and are discounted to

their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money. Impairment losses are recognized in profit

& loss.

Impairment losses recognized in prior periods can be reversed up to the original

carrying amount, had the impairment loss not been recognized. Such reversal is

recognized in profit or loss. After such a reversal, the depreciation charge is

adjusted in future periods to allocate the asset’s revised carrying amount, less any

residual value, on a systematic basis over its remaining useful life.


48

5a-iv Property, plant and equipment

The company carries its property, plant and equipment at cost in the Statement of

financial position. Estimates and assumptions made to determine their carrying

value and related depreciation are critical to the company’s financial position and

performance. The charge in respect of periodic depreciation is derived after

determining an estimate of an asset’s expected useful life and the expected residual

value at the end of its life. The useful lives and residual values of the assets are

determined by management at the time the asset is acquired and reviewed

periodically. The lives are based on historical experience with similar assets as well

as anticipation of future events, which may impact their life, such as changes in

technology. The carrying amount of the property, plant and equipment at the

reporting date is disclosed in Note 7.

5a-iv Taxes

Uncertainties exist with respect to the interpretation of tax regulations and the

amount and timing of future taxable income. Differences arising between the

actual results and the assumptions made, or future changes to such assumptions,

could necessitate future adjustments to tax income and expense already recorded.

The Company establishes provisions, based on reasonable estimates, for possible

consequences of audits by the tax authorities in the country. The amount of such

provisions is based on various factors, such as experience of previous tax audits

and differing interpretations of tax regulations by the taxable entity and the

responsible tax authority. Deferred tax assets are recognised for unused tax losses

to the extent that it is probable that taxable profit will be available against which

the losses can be utilised. Significant management judgment is required to

determine the amount of deferred tax assets that can be recognised, based upon the

likely timing (note 13) and the level of future taxable profits together with future

tax planning strategies.

5a-v Fair value of financial instruments

Where the fair values of financial instruments recorded on the Statement of

financial position cannot be derived from active markets, they are determined

using valuation techniques including the discounted cash flow model. The inputs

to these models are derived from observable market data where possible, but

where this is not feasible, a degree of judgment is required in establishing fair

values. The judgments include considerations of model inputs regarding forward

prices, credit risk and volatility that are not supported by observable market data.

Changes in assumptions about these factors could affect the reported fair value of

financial instruments.


49

6 FINANCIAL RISK MANAGEMENT 6a Overview

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

Credit risk

Liquidity risk

Market risk

This note presents information about the GREIF Nigeria Plc’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout these financial statements. 6b Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of Greif Nigeria Plc’s risk management framework. Executive Management is responsible for developing and monitoring Greif Nigeria Plc’s risk management policies and reporting regularly to the Board of Directors on its activities. The Company’s risk management policies are established to identify and analyze the risks faced by the business, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in the business environment. The Company, through management standards, procedures and training, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the business. The Audit Committee is assisted in its oversight role by the Management. Management undertakes both regular and ad -hoc review of risk management controls and procedures, the results of which are reported to the Audit Committee of the Board of Directors and possible escalation to the Group designated officer in South Africa. 6c Credit risk Credit risk is the risk of financial loss to GREIF Nigeria Plc if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the GREIF Nigeria Plc’s receivables from customers.

6c.i Trade and other receivables The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, Management considers the profile of individual customer, including the default risk of the industry and the specific antecedents of the customer and Management’s intrinsic knowledge of the customer. During the year ended 31 October 2018, approximately 98% (corresponding period 31 October 2017: 98%) of GREIF Plc’s revenue is attributable to sales transactions to the oil and gas sector of the Nigerian economy. Additionally, a particular customer accounted for about 40% of the Company’s sales on the average (October 2017 comparative 42%).


50

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

More than 98% of GREIF Plc’s customers have been transacting with the company for over 10years, and no impairment loss has been recognised against these customers except for the ECL of IFRS 9 charged in 2018 financial year.

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

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

analysis, excluding related party balances. In addition, Company establishes an

allowance for impairment that represents its estimate of incurred losses in respect of

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

other receivables at the end of the tagged reporting periods.

31-Oct-18

31-Oct-17

N’000

N’000

Trade Receivables - Local

77,185

138,333 Impairment

(7,753)

(994)

69,437

137,339

6d Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations

associated with its financial liabilities that are settled by delivering cash or another financial asset. The

Company's approach to managing liquidity is to ensure, as far as practicable, that it would always

have sufficient liquidity to meet its maturing obligations when due, under both normal and stressed

conditions, without incurring unacceptable losses or risking damage to the Company's

reputation.

Excessive risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.


51

6d.i Maturity schedule for Financial Liabilities

The following are the contractual maturities of financial liabilities:

31-Oct-18

Due Within One Year

Due After One Year

Total

Financial Liabilities

N’000

N’000

N’000

Trade Payables – Local

5,351

-

5,351

Trade Payables – Greif SA

324,612

-

324,612

Accrued Professional Fees

12,006

-

12,006

Other Accruals 3,520 - 3,520

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

345,489

-

345,489

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

31-Oct-17

Due Within One Year

Due After One Year

Total

Financial Liabilities

N'000

N'000

N'000

Trade Payables – Local

14,410

-

14,410

Trade Payables – Greif SA

321,496

-

321,496

Due to Greif USA

7,857

-

7,857

Other Accruals 1,024 - 1,024

Accrued Professional Fees

7,019

-

7,019

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

351,806 351,806

====== - =====

The carrying amounts of trade and other payables for period ended October 31, 2018 and 2017

respectively approximate to their true fair values.


52

6e Market risk

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

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

of financial instruments. The objective of market risk management is to manage and control

market risk exposures within acceptable parameters, while optimizing the return.

6f Currency risk

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

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

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

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

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

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

the end of every reporting period, with exchange gains or/and losses recognised in the profit

or loss.

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

Sensitivity Analysis

6g Interest rate and Equity price risk

The company is not exposed to interest rate risk and equity price risk at the end of 31 October

2018. 2017(Nil)

Description

31-Oct-18

31-Oct-17

N’000

N’000

Due to GSA US$

(895)

(898)

Due to Greif International US$

-

-

Due to Greif USA US$

-

(22)

Dollar Denominated Bank US$

13

98

Balance Due from GSA US$

-

-

Net Foreign Balances A US$

(822)

(822)

Closing rate at period-end B N/$

362.637

358

Naira Equivalent of Net Foreign Balances C=AxB Naira

(319,869)

(294,407)

5% Change in Closing rate D N/$

380.77

376

Naira Equivalent of change on Closing rate F=AxD Naira

(335,862)

(309,127)

Net Effect of Change in Naira G=F-C +/-

(15,993)

(14,720)

Net loss/profit for year H Naira

(257,730)

49,424

Net Effect as % of (loss)/ profit I=G/H% %+/-

(6.2%)

42.84%


53

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

31-Oct-18 31-Oct-17

PROPERTY, PLANT AND EQUIPMENT Cost

Accumulated Depreciation

Carrying Value Cost

Accumulated Depreciation

Carrying Value

N’000 N’000 N’000 N’000 N’000 N’000

Land & Building 47,676 17,204 30,472 50,557 17,387 33,170

Plant, Machinery & Equipment 220,170 158,091 62,079 243,102 160,869 82,233

Motor Vehicles 11,784 10,487 1,297 14,831 12,236 2,595

Capital Work-in-progress - - - 5,959 - 5,959

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

Total 279,630 185,782 93,848 314,449 190,492 123,957

During the year ended 31 October 2018, the Company acquired assets with a cost of N0.695 million (31 October 2017: N5.959million). During the year the Company disposed of items of property, plant and equipment with a carrying cost of N 14.527 Million ( 31 October 2017: N0.527Million). Any profit or loss as a result of disposal is recognized in the profit or loss at the year end.

Reconciliation of property, plant and equipment - 31-October-2018

Opening Balance Additions

Disposal Cost

Write-off Transfers Depreciation

Disposal Depreciation

Assets Written off Total

N’000 N’000 N’000 N’0000 N’0000 N’000

N’000 N’000

Land & Building 33,170 - (101) (2,779) - (1,297) 89 1,390 30,472

Plant, Machinery & Equipment 82,233 350 (13,147) (16,438) 6,304 (12,934) 6,658 9,053 62,079

Motor Vehicles 2,595 - (1,279) (1,767) - (1,298) 1,279 1,767 1,297

Capital Work-in-progress 5,959 345

(6,304) - - - -

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

Total 123,957 695 (14,527) (20,984) - (15,529) 8,026 12,213 93,848

Reconciliation of property, plant and equipment - 31-October-2017

Opening Balance Additions

Disposal Cost

Transfers Depreciation

Disposal Depreciation

Assets written off Total

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

N'000 N'000

Land & Building 34,714 - - - (1,544) - - 33,170

Plant, Machinery & Equipment 86,149 - (527) 12,057 (15,973) 527 - 82,233

Motor Vehicles 3,892 - - - (1,297) - - 2,595

Capital Work-in-progress 31,263 5,959 - (5,728) (25,535) - - - 5,959

Total 156,018 5,959 (527) (5,728) (13,478) (18,814) 527

123,957


54

8. INTANGIBLE ASSETS

Greif Plc has Intangible Assets representing software with which the company processes its financial and operational transactions. The cost of Additional ERP Software acquired during the year was Nil as against N13.478million same period last year.

31-Oct-18

31-Oct-17

Software

Software

N’000

N’000

Cost as at 1 November

18,316

4,837

Additions

-

13,479

---------

-----------

Cost as at 31 October

18,316

18,316

Amortization as at 1 November

(9,285)

(4,837)

Amortised During Year

(4,448)

(4,448)

---------

---------

Amortization as at 31 October

(13,733)

(9,285)

Balance as at 31 October

4,583

9,031

9. INVENTORIES 31-Oct-18 31-Oct-17

N'000

N'000

Raw Materials (Note 9a)

55,111

129,908

Work-in-Progress

2,395

10,562

Finished Goods

1,627

36,211

Goods-in-Transit

4,741

5,445

63,874

182,126

The cost of inventory recognized as expense and included in cost of sales at 31 October 2018 amounted to N354.887million (31 October 2017: N953.173million).

9a Raw Materials 31-Oct-18 31-Oct-17

N'000

N'000

Raw Materials

55,111

129,908

-

55,111

129,908

During the period ended 31 October 2018 there was no additional allowance for slow moving materials.


55

10. TRADES AND OTHER RECEIVABLES

31-Oct-18

31-Oct-17

N'000

N'000

Trade receivables 69,432

137,339

VAT Recoverable

94,916

92,957

Sundry Receivables

4,588

6,374

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

168,936

236,670

====== ====== Trade receivables are non-interest bearing and are generally on a term of 30 to 90 days.

VAT receivable consists of amounts recoverable from FIRS in respect of 5% VAT deducted at source from our invoices and paid over to FIRS by our customers in the Oil marketing industry.

No receivable is pledged as security for borrowings

10b. Impairment - Individually impaired During the year trade receivables with an initial carrying value of N 7,753 were impaired and fully provided for as at 31 October 2018. See below for the movements in the allowance for impairment of receivables:

31-Oct-18 31-Oct-17

N’000 N’000

At the beginning of the year

994

-

Trade receivable impairment

7,753 994

Recovered during the year (994) -

Written off as uncollectible during year

-

-

7,753

994

11. PREPAYMENT

31-Oct-18

31-Oct-17

N’000

N’000

Advance to suppliers

18,472

39,603

Employees advances

1,146

771

Prepayment

1262

7,751

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

20,880

48,125

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


56

12. CASH AND CASH EQUIVALENTS

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

31-Oct-18

31-Oct-17

N’000

N’000

Cash in hand

87

1,007

Bank Balances

27,216

157,989

Short Term Bank Deposit

96,305

10,661

123,608

169,657

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

31-Oct-18

31-Oct-17

N’000

N’000

(Loss)/profit before tax

(245,229)

77,554

Adjustment to reconcile net income to net cash provided:

Depreciation of PPE

15,529

18,814

Amortisation of Intangibles

4,448

4,448

Asset written off

8,774

5,728

Gain on disposal of assets

(1,483)

-

Interest received

(1,483)

(1,391)

Allowance for doubtful debt 6,759 994

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

(219,570)

106,147

Changes in Assets & Liabilities: Decrease/(increase) in Inventories

118,252

(55,161)

Decrease in Receivables & Prepayment

88,218

80,929

Increase Payables & Accruals

631

25,087

Decrease in provision for Litigation

-

(2,500)

(12,469)

154,502


57

13. SHARE CAPITAL AND RESERVES No issue of additional shares was made during the period ended 31 October 2018 (no similar issue was made during the period ended 31 October 2017). Details of equity at the reporting date are as follows:

13a. Share Capital

31-Oct-18

31-Oct-17

Authorised:

N’000

N’000

60,000,000 ordinary shares of 50kobo each

30,000

30,000

Called up and fully paid:

N’000

N’000

42,640,000 ordinary shares of 50kobo each

21,320

21,320

13a.i Dividend 31-Oct-18 31-Oct-17 N'000 N'000 Proposed dividend for 2018: Nil per share (2017: Nil) - - ===== ===== Proposed dividends on ordinary shares are subject to approval at the annual general meeting and are not recognised as a liability as at 31 October 2018 13b. Retained earnings

31-Oct-18

31-Oct-17

N’000

N’000

Balance at the beginning of the year

340,104

316,264

340,104 316,264


(262,589)

49,424

Dividend paid during the year

-

(25,584)

Balance at the end year

77,515

340,104

14 RELATED PARTIES’ DISCLOSURES 14a. Related Party Transactions with the Greif Group

The shares of the Company are beneficially held as follows: Description Shareholdings (%) Unit in shares Greif International Holding B.V. The Netherlands 51 21,746,400 The Van Leer Nigerian Education Trust 23 9,807,200 Other Nigerian Citizens & 26 11,086,400

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


58

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

Summary of Related Party Transactions with the Greif Group:

Years

Sales to related parties

Purchases from

related parties

Amount of intercompan

y loans

Amounts owed by

related parties

Amounts owed to related parties

N’000 N’000 N’000 N’000 N’000

Greif International Holding B.V.

2018 - - - - -

the Netherlands 2017 - - - - -

Greif South Africa 2018 - - - - 324,612

2017 - - - - 321,496

Greif International USA 2018 - - - - -

2017 - - - - 7,857

14a.i Due to Greif South Africa

31-Oct-18 31-Oct-17

N’000 N’000

Due To Greif South Africa (Note 14)

324,612 321,496

The company has an intercompany trade payable balance of US$895,142 (2017: US$897,833) due to its sister company, Greif South Africa.

The Company enters into transactions with related parties and sister Companies within the Greif group in the course of its business. These transactions include, but are not limited to, technical advises, investment advisory services, IT related support, logistics support, personnel support and the purchase of certain production materials and spares. Amounts owed to and due from related parties are transaction based. The receivable and payable from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year -end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables 14a.ii Due to Greif International USA

31-Oct-18 31-Oct-17

N’000 N’0000

Due To Greif International USA (Note 14)

- 7,857

The above represents quarterly IT-related costs billed against the Company still outstanding as at period-ended 31-October 2018. This liability has been reflected profit or loss while the invoiced amount which still remained unpaid as at 31-October-2018 is reflected in other payables


59

14b Related Party Transactions - Key Management Personnel Compensation

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

31-Oct-17

N’000

N’000

Salaries and other short-term employment benefits

3,982

15,166 Management Incentive Program

-

932

Pension Costs - Defined Contribution Scheme

328

1,264 End Of Service Savings Scheme - Defined Contribution

337

1,347

4,647

18,709

Short term employee benefit

3,982

16,098 Post-employment benefit

665

2,611

4,647

18,709

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

31-Oct-18

31-Oct-17

N’000

N’000

Sitting Allowance for the year

828

840

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

31-Oct-17

DIRECTORS’ EMOLUMENTS

N’000

N’000

Fees – Chairman

105

210 Fees - Other Directors

645

540

750

750

Emolument as non-executives

-

60

Emolument as executives

1,856

8,078

Total Directors Emoluments

2,606

8,888

Emolument of highest paid Director 1,946

8,258

Key management personnel includes executive directors, non-executive directors, shareholders

representatives on audit committee, the functional heads of Finance and accounts, Sales and

Marketing, Plant Management, Maintenance and Human Resources Management. No transaction

in respect of sale of goods or services was entered into with any key management personnel or

shareholder representatives of the audit committee


60

15 INCOME TAX EXPENSE

31-Oct-18

31-Oct-17

15a Profit and Loss:

N’000

N’000

Company income tax provision

-

45,695

Educational Tax provision

-

3,280

Company Income Tax ( Note 15b)

-

48,975

Under/(over) provision of income taxes

262

(64)

Deferred Tax for period (Note 15c)

17,098

(20,781)

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

Income Tax Expense

17,360

28,130

15b Income tax payable

31-Oct-18

31-Oct-17


48,975

27,546

Current period charge (Note 15a)

-

48,975

Under/(over) provision of income taxes 262 (64)

Payment during period

(49,237)

(27,482)

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

Balance as at 31 October 2018

-

48,975

15c Deferred Tax N’000 N’000

Balance at 1 November 2017

(17,098)

3,683

Provision for the year (Note 15a)

(20,781)

Reversal 17,098

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

Balance as at 31 October 2018

-

(17,098)

16a. Income tax reconciliation - IAS 12P.81c

31-Oct-18

31-Oct-17

N’000

N’000

(Loss)/profit before income tax

(253,597)

77,554

Tax thereon at 30% (2017: 30%)

760,791

23,266

Impact of disallowable expense for tax purpose

-

1,648

Utilization of previously recognised tax credit

(760,791)

-

Tertiary education tax at 2% of assessable profit

-

3,280

Effect of under/(over)-provision in prior year

262

(64)

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

Total income tax expense

262

28,130

Effective tax rate %deduction based on realization of these differences

(0.11%)

36.27%

16b. Deferred tax reconciliation - IAS 12P.81c N’000

N’000

Accelerated depreciation for tax purpose

17,098

33,180

Trade and other receivables

-

(50,278)

Reversal

(17,098)

-

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

-

(17,098)

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


61

17. TRADE AND OTHER PAYABLES

31-Oct-18

31-Oct-17

N’000

N’000

Trade Payables – Local 5,351 14,410

Payables to related parties-Greif SA (Note 14a.i) 324,612 321,496

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

-

7,857

Accrued professional fees

12,006

7,019

Other accruals 3,520 1,024

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

345,489 351,806

Dividend Unclaimed 13,004 10,004

ESB Staff Savings Scheme 1,150 2,421

Accrued payroll benefits 679 790

Other taxes payable 16,574 11,244

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

376,372

376,265

===== =====

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

VAT, WHT and PAYE • Accruals are liabilities to pay for goods or services that have been received or supplied but have

not been invoiced or formally agreed with the supplier. They have an average term of three months. • For terms and conditions with related parties, refer to Note 13 • The carrying amounts of trade and other payables for the year ended 31 October 2018 and 2017

respectively approximate to their fair values. 18 REVENUE

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

31-Oct-18

31-Oct-17

Product Lines

N'000

N'000 Steel Drums

534,611

1,405,218


62

19 COST OF SALES, SELLING/MARKETING EXPENSES, OTHER OPERATING EXPENSES

31-Oct-18 31-Oct-17

Items charged/(credited) in arriving at operating profit: N’000 N’000

Operating Expenses 807,963 1,329,055

Included in Other Operating income:

Gain on asset disposed 1,482 -

Sales of scrap 2,694 1,176

Rent 8,010 2,700

Services rendered to related party 7,569 -

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

19,756 3,876

====== =====

Direct Material Cost 477,984 957,049

Direct Line Costs 52,638 75,034

General Administration Employees Benefits (Note 22b) 24,062 30,804

Indirect Factory Labor/employee benefits (Note 22b) 8,909 11,573

Depreciation on Property, Plant & Equipment 12,405 16,108

Indirect Factory/Production Costs 73,092 63,190

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

Total Cost of Sales 649,287 1,153,758

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

Publicity 40 45

Commercial Presents 8,210 5,023

Total Selling & Marketing Costs 8,250 5,068

==== -=====

General Administration Employees Benefits 39,032 29,238

Depreciation on Property, Plant & Equipment 3,124 2,706

Amortization of Intangible Assets 4,448 4,448

Assets written off 8,774 5,728

Auditors' Remuneration 6,000 6,000

Repairs & Maintenance 10,142 5,927

Personnel expenses 6,632 7,342

Travelling expenses 14,038 11,170

Director expenses 648 781

Insurance 2,185 1,555

Professional fees 11,769 7,970

Donation 485 400

Bank charges 716 908

Subscription 1,906 1,726

Sundry IT expenses 12,857 14,501

Impairment of receivables 6,759 994

Office expenses 6,663 5,665

Annual general Meeting expenses 2,360 2,846

Director fees 750 750

Exchange Loss 11,138 63,450

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

Total General and Administrative Expenses 150,426 174,105


63

19 COST OF SALES, SELLING/MARKETING EXPENSES, OTHER OPERATING EXPENSES - cont’d

20 COST CLASSIFICATION BY NATURE OF EXPENSES

31-Oct-18 31-Oct-17

N’000 N’000

Depreciation 15,529 18,814

Direct material 477,984 957,049

Employee benefits (Note 22a) 72,004 71,615

Amortization of Intangible Assets 4,448 4,448

Assets written off 8,774 5,728

Auditors Remuneration 6,000 6,000

Repairs & Maintenance 10,142 5,927

Factory/Production Expenses 125,926 138,224

Publicity and Advertisement 8,250 5,068

Personnel expenses 6,632 7,342

Travelling expenses 14,038 11,170

Director expenses 648 781

Insurance 2,185 1,555

Professional fees 11,769 7,970

Donation 485 400

Bank charges 716 908

Subscription 1,906 1,726

Sundry IT expenses 12,857 14,501

Impairment of receivables 6,759 994

Office expenses 6,663 5,665

Annual general Meeting expenses 2,360 2,846

Director fees 750 750

Exchange Loss/Gain 11,138 63,450

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

807,963 1,332,931

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


64

31-Oct-18 31-Oct-17 N’000 N’000 21 INTEREST INCOME

Interest Income 8,368 1,391 This represents interest received on placement of excess funds in short term treasury deposits 22 EMPLOYEE BENEFITS

31-Oct-18 31-Oct-17

N’000 N’000

22a The following items are included within employee benefits expense:

Short term employee benefits 61,569 65,393

Employee & Management Incentive Programs 1,528 3,300

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

End Of Service Savings Scheme - Defined Contribution 4,811 1,858

72,004 71,615

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

Direct Labour/employee benefits (Note 18) 24,062 30,804

Indirect Factory Labor/employee benefits (Note 19) 8,909 11,573 General Administration Employees Benefits (Note 19) 39,032 29,238

72,004 71,615

22c Staff Categories and Number Total full time employees at the Company as at 31-October-2018 and as compared to corresponding period in 2018 are as follows:

Category

31-Oct-18 31-Oct-17

Managerial

6 6

Senior Staff

6 8

Junior Staff

10 14

Total

22 28

23. CONTINGENT LIABILITY

The Company had no known contingent liabilities as at the period ended 31-October-2018.

24. EARNINGS PER SHARE

31-Oct-18 31-Oct-17

(Loss)/profit attributable to equity holders of the Company (N'000) (262,589)) 49,424

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

Basic (loss/) earnings per share (Kobo) (616) 116 Diluted (loss) earnings per share (kobo) (616) 116

Basic (loss)/earnings per share are calculated by dividing the (loss)/profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. There were no potential ordinary shares outstanding as at 31-October-2018 (2017; Nil) diluted(loss)/ earnings per share are therefore the same as basic (loss) earnings per share.


65

25. Capital management

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

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

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 October 2018 and 31 October 2017.

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

2018 2017 N'000 N'000 Trade and other payables (Note 17) 376,896 376,265 Less cash and short-term deposits (Note 12) (123,608) (169,657) ------------ ------------ Net debt 253,288 206,608 Equity 98,835 361,424 ---------- ----------- Capital and net debt 352,123 568,032 ====== ====== Gearing ratio (%) 72 36 == ==

26. EVENTS AFTER REPORTING DATE

There is no material event after the reporting date which could have had a material effect on the state of affairs of the Company as at 31 October 2018.

66

GREIF NIGERIA PLC STATEMENT OF VALUE ADDED FOR THE YEAR ENDED 31 OCTOBER 2018

31-Oct-18 % 31-Oct-17 %

N’000

N’000

Turnover

534,611 1,405,218

Bought in materials and duty- local

(708,439) (1,076,335)

Bought in materials and duty- foreign

(7,543) (161,719)

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

(181,371) 167,164

Other Income

28,123 5,267

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

Value (consumed)/added

(153,248) 172,431

=======

=======

Applied as follows:

To pay employees Salaries, Wages & Other Benefits

72,004 (47) 71,615 42

To government Taxation

262 - 48,911 28

To providers of finance Interest Paid

- - - -

To provide for maintenance & expansion of business

Depreciation & Amortization

19,977 (13) 23,262 13

Deferred taxation

17,098 (11) (20,781) (12)


(262,589) 171 49,424 29

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

(153,248) 100 172,431 100

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

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

GREIF NIGERIA PLC FIVE-YEAR FINANCIAL SUMMARY

67

5-YEAR SUMMARISED IFRS FINANCIAL SUMMARY

AS AT: 31-Oct-18 31-Oct-17 31-Oct-16 31-Oct-15 31-Oct-14

N’000 N’000 N’000 N’000 N’000

TOTAL ASSETS Non-Current Assets 98,431 150,086 156,018 148,432 162,480

Current Assets 377,300 636,578 566,472 567,282 501,293

475,731 786,664 722,490 715,714 663,772

TOTAL EQUITY Equity Share Capital 21,320 21,320 21,320 21,320 21,320

Retained Earnings 77,515 340,104 316,264 314,742 315,702

98,835 361,424 337,584 336,062 337,022

NON-CURRENT LIABILITIES - - 3,683 20,739 35,536 CURRENT LIABILITIES 376,896 425,230 381,223 358,913 291,215 TOTAL EQUITY & LIABILITIES 475,731 786,664 722,490 715,713 663,772

TURNOVER 534,611 1,405,218 999,150 805,370 787,582

(Loss)/profit before tax (245,229) 77,554 37,597 40,149 58,029 Tax Expense (17,360) (28,130) (10,491) (15,525) (14,586) Profit for the year (262,589) 49,424 27,106 24,624 43,443 Other Comprehensive income - - - - -

Total comprehensive (loss)/income (262,589) 49,424 27,106 24,624 43,443

Per Share Information Basic earnings per share (616) 116 64 58 102 Kobo

Net Assets per Share 232 848 792 788 790 Kobo

Dividend Declared - - 60 60 30 Kobo

Documents

GREIF NIGERIA PLC ANNUAL REPORT AND AUDITED FINANCIAL ... · The late signing of the budget had slowed down activities as the annual Gross Domestic Product (GDP) growth rate had slowed