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Seven‐Up Bottling Company PLC
Annual Report
31 March 2016
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
ContentsPage
Directors and other corporate information 1
Results at a glance 2
Directors’ report 3
Statement of directors’ responsibilities in relation to the financial statements 11
Report of the Audit committee 12
Independent Auditor's Report 13
Statement of financial position 14
Statement of profit or loss and other comprehensive income 15
Statement of changes in equity 16
Statement of cash flows 17
Notes to the financial statements 18
Other national disclosures 60
Value Added Statement
Five Year Financial Summary
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Directors and other corporate information
Board of Directors: Mr. Faysal El‐Khalil, O.O.N (Lebanese) ‐ Chairman
Mr. Sunil Sawhney (Indian) ‐ Managing Director/ CEO
Chief Farid El‐khalil (Lebanese)
Otunba (Dr) A. Ojora O.F.R., C.O.N.
*Alternate ‐ Mrs. Oluwatoyin Ojora Saraki
Alhaji Ahmadu Yaro ‐ Retired effective 22 September 2015
Chief Emmanuel N. Nwokoro
Mallam Mohammed Hayatu‐Deen O.O.N.
Mr. Ziad A. El‐Khalil (Lebanese)
Mr. Femi Mokikan
Mr. Georges Kolakez (Lebanese)
Company Secretaries: Equity Services Limited
162 Ikorodu Road (2nd floor)
Onipanu, Lagos
Registered Office: 247 Moshood Abiola Way
Ijora
Lagos
Registrars: GTL Registrars Limited
2 Burma Road
Apapa, Lagos
Independent Auditor: KPMG Professional Services
KPMG Tower
Bishop Aboyade Cole Street
Victoria Island, Lagos
Principal Bankers: Access Bank PLC.
Citibank Nigeria Limited
Diamond Bank PLC.
Fidelity Bank PLC.
First Bank of Nigeria Limited
First City Monument Bank Limited
Guaranty Trust Bank PLC.
Heritage Bank Limited
Stanbic IBTC Bank PLC.
Standard Chartered Bank Nigeria Limited
Union Bank of Nigeria PLC.
United Bank for Africa PLC.
Zenith Bank PLC.
1
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Results at a glanceIncrease
2016 2015 %
Financial information ‐ (in thousands of naira)
Revenue 85,634,679 82,450,505 4
Profit before taxation 3,757,390 8,749,101 (57)
Profit for the year 3,347,463 7,125,788 (53)
Share capital 320,295 320,295 ‐
Total equity 24,779,594 23,933,633 4
Data per 50k share‐ (in naira )
Basic earnings per share 5.23 11.12 (53)
Diluted earnings per share 5.23 11.12 (53)
Declared dividend* 2.75 2.50 10
Net assets 38.68 37.36 4
Dividend proposed** 1.60 2.75 (42)
Stock exchange quotation at 31 March
in Naira per share 155.00 156.00 (1)
Number of shares issued (‘000) 640,590 640,590 ‐
Market capitalization at 31 March (N '000) 99,291,506 99,932,097 (1)
Stock Exchange Information
* Declared dividend represents the final dividend proposed for the preceding year but declared during
the current year.
** The directors recommend to members a dividend payment of N1,024,944,581 (2015: N1,761,623,498)
representing N1.60 per share (2015: N2.75 per share), on the issued share capital of 640,590,363 ordinary
shares of 50 kobo each (2015: 640,590,363 ordinary shares of 50 kobo each), subject to approval by the
shareholders at the Annual General Meeting.
2
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Directors’ ReportFor the year ended 31 March 2016
1 Legal Form
2 Principal Activities
3 Operating Results
The highlights of the Company’s operating results are as follows:
2016 2015
In thousands of naira
Revenue 85,634,679 82,450,505
Results from operating activities 6,961,343 11,186,832
Profit before taxation 3,757,390 8,749,101
Profit for the year 3,347,463 7,125,788
Total comprehensive income for the year 2,598,854 8,189,312
4 Dividend
The Directors have pleasure in presenting their report on the affairs of Seven‐Up Bottling Company PLC
(“the Company”) together with the Company’s audited financial statements for the year ended 31 March
2016.
The Company was incorporated as a private limited liability company on 25th June, 1959 under the
name Seven‐Up Limited. On 16th May, 1960, the name was changed to Seven‐Up Bottling Company
Limited and in 1978 it became a public company. The name “Seven‐Up Bottling Company PLC” was
adopted on 26th November, 1991 in compliance with the provisions of the Companies and Allied
Matters Act 1990. Currently, the Company’s shares are quoted on the floor of the Nigerian Stock
Exchange.
The Company continued to be engaged in the bottling and marketing of a wide range of soft drinks
and Aquafina table water.
The directors recommend to members the payment of a dividend of N1,024,944,581 (2015:
N1,761,623,498) representing N1.60 per share (2015: N 2.75 per share), on the issued share capital of
640,590,363 ordinary shares of 50 kobo each (2015: 640,590,363 ordinary shares of 50 kobo each). If
the recommended dividend of N1.60 is approved by the shareholders, it will be paid subject to
deduction of withholding tax at the appropriate tax rate.
3
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
5 Board of Directors
6 Directors and their Interests
(a)
Name 2016 2015
Otunba (Dr.) A. Ojora O.F.R, C.O.N 2,252,635 2,252,635
Chief Emmanuel N. Nwokoro 672,643 1,144,843
Alhaji Ahmadu Yaro Retired with effect from 22 September 2015 83,522 83,522
Mr. Femi Mokikan 33,116 33,116
Mallam Mohammed Hayatu‐Deen O.O.N ‐ ‐
Chief Farid El‐Khalil ** ‐ ‐
Mr. Sunil Sawhney * ‐ ‐
Mr. Ziad A. El‐Khalil ** ‐ ‐
Mr. Faysal El‐Khalil ** ‐ ‐
Mr. Georges Kolakez ** ‐ ‐
* Indian
** Lebanese
(b)
(c)
The Directors who served during the year and their interests in the issued and paid up share capital
of the Company as recorded in the Register of Members for the purpose of section 275 of the
Companies and Allied Matters Act, CAP C20 LFN, 2004 were as follows:
The names of the Directors who held office during the year under review are as listed in Note 6(a) of
this report. Subsequent to the last Annual General Meeting (AGM), Alhaji Ahmadu Yaro resigned as
Director of the Company with effect from 22nd September, 2015.
In accordance with Article 90 of the Company’s Articles of Association, Mr. Georges Kolakez, Otunba
(Dr.) Adekunle Ojora and Mallam Mohammed Hayatu‐deen are the Directors retiring by rotation at
this AGM and being eligible, they offer themselves for re‐election. Pursuant to section 258(2) of the
Companies and Allied Matters Act, CAP C20 LFN 2004, a record of the Directors’ attendances at board
meetings during the year under consideration will be made available for inspection by any member.
None of the Directors has notified the Company of any declarable interest in any contract or
proposed contract to which the Company was a party to during the year ended 31 March 2016 for
the purpose of section 277 of the Companies and Allied Matters Act, Cap C20, Laws of the
Federation of Nigeria, 2004.
No share options were granted to the directors by Seven Up Bottling Company PLC.
Shareholdings
4
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
7 Analysis of ShareholdingsNumber of Number of
Shareholding Between shareholders % shares %
1 ‐ 1,000 19,302 59.9 9,220,166 1.4
1,001 ‐ 5,000 10,438 32.3 21,492,715 3.4
5,001 ‐ 10,000 1,407 4.3 9,965,030 1.6
10,001 ‐ 50,000 830 2.6 16,226,412 2.5
50,001 ‐ 100,000 106 0.3 7,399,014 1.2
100,001 ‐ 500,000 117 0.4 25,514,163 4.0
500,001 ‐ 1,000,000 14 0.1 9,872,334 1.5
1,000,001 and above 19 0.1 540,900,529 84.4
32,233 100 640,590,363 100
8 Substantial Shareholders
9 Donations
2016 2015
In thousands of naira
Lagos State Security Trust Fund 2,000 ‐
AFBTE Secretariat 3,000 ‐
Orphanage and Old People's Home ‐ 400
Community free eye surgery ‐ 300
Nigeria centenary flag project ‐ 500
GCE Forms for 20 Abete Community Children 297 300
Co‐sponsor Financial Reporting Council of Nigeria 1,000 1,000
CIPMN House project ‐ 2,000
Education endowment fund ‐ 3,800
2016 Nigeria Stock Market (Pearl Awards) 125 ‐
Anthony Akpati Annual tribute 282 ‐
Lady of the Rosary church 600 ‐
Others ‐ 525
7,304 8,825
As contained in the Register of Members, AFFELKA S.A. held 469,047,789 ordinary shares of 50k each
in the capital of the Company representing 73.22% of the issued capital as at 31st March, 2016. No
other shareholder held 5% or more of the share capital of the Company as at that date.
In the year under review, the Company made donations to charitable institutions, bodies and
individuals amounting to N7,304,000 (2015: N8,825,000). The beneficiaries were as follows:
5
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
10 Local Sourcing of Raw Materials
11 Suppliers
12 Product Distribution
13 Acquisition of Own Shares
The Company did not acquire any of its own shares during the year under review (2015: Nil).
14 Property, plant and equipment
15 Events after the reporting date
16 Employment and Employees
(a) Employment of physically challenged persons:
(b) Health and Safety at Work and Welfare of Employees:
In compliance with section 38(2) of the Companies and Allied Matters Act, Cap.20, Laws of the
Federation of Nigeria, 2004, the Company did not make any donation or gift to any political party,
political association or for any political purpose during the year.
On a continuing basis, the Company explores the use of local raw materials in its production processes
and has successfully introduced the use of locally produced items such as sugar, crown corks and
chemicals in a number of its products.
The Company procures all of its raw materials on a commercial basis from overseas and local
suppliers.
The Company distributes its products directly via depots it maintains nation‐wide and motivates key
dealers to expand the existing distribution network by establishing mini depots.
Information relating to changes in property, plant and equipment is given in Note 12 to the financial
statements.
There were no events after the reporting date which could have had a material effect on the financial
position of the Company as at 31 March 2016 and its operating results for the year ended which have
not been adequately provided for in these financial statements.
The Company continues to maintain its policy of non‐discrimination on recruitment and selection
when considering applications for employment, including those received from physically
challenged persons. In the event of any employee becoming disabled in the line of duty through
industrial accident, the Company ensures continuity of employment by arranging suitable training
for such employees who are subsequently redeployed to jobs compatible with their capability.
Presently, the Company has seventeen (2015: seventeen) physically challenged persons on its
payroll.
The Company gives priority attention to health, safety and welfare of its employees, and ensures
that its Smoke Area Policy is observed in all its facilities. The health and ailment status of its
workforce are regularly monitored.
The Company’s premises are certified by the Fire Service for emergency preparedness with fire
fighting equipment strategically located within the premises. Fire drills are organised occasionally
to sensitize the employees on the dangers of fire accident in order to prepare them against any
eventuality.
6
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(c) Employee Involvement and Training:
17 Corporate Governance
Name of Directors
No. of
meetings
held
No. of
meetings
attended
Mr. Faysal El‐Khalil, O.O.N 4 4
Mr. Sunil Sawhney 4 4
Chief Farid EL‐Khalil 4 1
Otunba (Dr.) A. Ojora, O.F.R, C.O.N 4 4
Alhaji Ahmadu Yaro (Retired effective 22 September 2015) 4 ‐
Chief Emmanuel N. Nwokoro 4 3
Mallam Mohammed Hayatu‐deen, O.O.N 4 2
Mr. Ziad A. EL‐Khalil 4 3
Mr. Femi Mokikan 4 3
Mr. Georges Kolakez 4 3
The meetings were held on 23rd June 2015, 22nd September 2015, 26th November 2015 and 24th
February 2016.
The Company is committed to providing employees information regarding issues that affect the
Company’s performance and plans as well as seeking their views, where practicable, on matters
that affect their interests. Towards this end, management holds meetings with employees,
through their representatives, at formal and informal sessions while circulars are published
regularly to brief them about significant corporate issues.
To improve the efficiency and productivity level, employees undergo on‐the‐job training in addition
to being reimbursed all expenses incurred in acquiring professional qualifications.
The Board comprises eight Non‐Executive Directors including the chairman and one Executive Director.
In line with global best practice in corporate governance, the positions of the Chairman and Chief
Executive Officer are separate with two Directors acting in both capacities.
The Board has overall responsibility for supervising the Company’s business, maintaining adequate and
effective internal control system, adding value to shareholders and protecting the interests of other
stakeholders.
The Board of Directors met four (4) times during the financial year ended 31 March 2016 and a record
of their attendance is as shown below;
The Company subsidizes housing, transportation and meals and provides free health care services
to employees and their nuclear families. Additionally, it operates a contributory Pension Scheme
and provides a comprehensive National Health Insurance Plan for its employees.
7
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Corporate Governance/Remuneration Committee
Name of Directors
No. of
meetings
held
No. of
meetings
attended
Otunba (Dr.) A. Ojora, O.F.R, C.O.N Chairman 1 1
Mr. Faysal El‐Khalil, O.O.N 1 1
Mr. Femi Mokikan 1 1
Mallam M. Hayatu‐deen 1 1
Risk Management Committee
No. of
meetings
held
No. of
meetings
attended
Mr. Sunil Sawhney Chairman 1 1
Chief Farid EL‐Khalil 1 1
Mr. Georges Kolakez 1 1
Mr. Ziad El‐Khalil 1 1
Mr. Ali Jafri* 1 1
Management Committee
The Corporate Governance/Remuneration committee was set up by the Board on 26th November,
2015. It comprises four Non‐Executive Directors with Otunba (Dr.) Adekunle Ojora as chairman. Its
responsibilities include ensuring the company’s compliance with good governance practice,
nominating for board’s approval candidates to fill vacancies, considering and making
recommendations on succession planning of the company for the positions of chairman, managing
director, executive director, and other senior executives. Additionally, it ensures that an appropriate
remuneration policy for all directors and staff is in place and oversees major changes in employees
benefits structure.
The committee held its inaugural meeting on 24th February, 2016 during the year under consideration
with all members present.
The Risk Management Committee was established on 26 November 2015 and consists of three non‐
executive directors, one executive director and the Chief Financial Officer. It is chaired by Mr. Sunil
Sawhney and advises the board on, among other things, the Company’s appetite for risk and its risk
management policy, oversight function regarding management’s process for the identification of
significant risk across the company and the adequacy of prevention, detection and reporting
mechanisms, and the review of the adequacy and effectiveness of risk management and controls.
The committee met on 24 February 2016 during the year ended 31 March 2016 with all members
present.
* As Chief Financial Officer of the company, he attends Risk Management Committee meeting as a
sitting member.
The Management Committee is made up of three members: Messrs. Sunil Sawhney, Ziad El‐Khalil, and
Femi Mokikan, and has responsibility for recommending strategic initiatives to the Board of Directors
and supervising the implementation of board policies.
The committee which is chaired by Mr. Sunil Sawhney (Managing Director/Chief Executive Officer) met
28 times during the year under review and the members attendance record is as shown below:
8
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
No. of
meetings
held
No. of
meetings
attended
Mr. Sunil Sawhney 28 28
Mr. Ziad A.EL‐Khalil 28 28
Mr. Femi Mokikan* 28 11
Securities Trading Policy
18 Audit Committee
No. of
meetings
held
No. of
meetings
attendedShareholders’ Representative 3 3
Mr Obarinde I. Obatosho Shareholders’ '' 3 3
Mr Kenneth N. Nwosu Shareholders’ '' 3 3
Mr Femi Mokikan Directors’ '' 3 2
Otunba (Dr.) A. Ojora, C.O.N, O.F.R Directors’ '' 3 2
Mr. Georges Kolakez Directors’ '' 3 3
The Company has securities trading policy applicable and circulated to directors, insiders, external
advisers and all employees that may at any time possess any inside or material information about our
company.
The Company has adopted a code of conduct regarding securities transaction by the directors on
terms no less exacting than the required standard set out in the Listing Rules of the Nigerian Stock
Exchange.
The Company made specific enquiry of all directors whether they have complied with the required
standard set out in the listing rules and the Company’s code of conduct regarding securities
transactions by directors and the Company is unaware of any non‐compliance.
Pursuant to section 359(3) of the Companies and Allied Matters Act, CAP C20 LFN 2004, the Company
has an Audit Committee in place whose functions are as stated in section 359(6) of the Act. The
Committee consists of three (3) Directors and three (3) shareholders’ representatives, including the
chairman. The Committee members met three times in the year under review and their attendance
record is as shown below:
Evang. Peter Akinola Soares‐ Chairman
The meetings were held on 19th June 2015, 14th December 2015 and 18th February 2016.
*As at 1 July 2015, Mr. Femi Mokikan ceased to be a member of the Management Committee.
9
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Statement of profit or loss and other comprehensive incomeFor the year ended 31 March
In thousands of naira
Note 2016 2015
Revenue 5 85,634,679 82,450,505
Cost of sales 6(a) (60,622,243) (51,972,978)
Gross profit 25,012,436 30,477,527
Other income 6(b) 317,434 81,603
Selling and distribution expenses 6(a) (11,801,831) (12,909,907)
Administrative expenses 6(a) (6,566,696) (6,462,391)
Results from operating activities 6,961,343 11,186,832
Finance income 7(a) 41,571 22,151
Finance costs 7(b) (3,245,524) (2,459,882)
Net finance costs (3,203,953) (2,437,731)
Profit before taxation 8 3,757,390 8,749,101
Income tax expense 10(a) (409,927) (1,623,313)
Profit for the year 3,347,463 7,125,788
Other comprehensive income
Items that will never be reclassified to profit or loss:
Remeasurement of defined benefit (liability) / asset 22(a) (1,069,442) 1,519,320
Related tax 16(b) 320,833 (455,796)
Other comprehensive income for the year, net of tax (748,609) 1,063,524
Total comprehensive income for the year 2,598,854 8,189,312
Equity holders of the Company 3,347,463 7,125,788
Equity holders of the Company 2,598,854 8,189,312
Earnings per share
Basic earnings per share (kobo) 11(a) 523 1,112
Total comprehensive income for the year is attributable
to:
Profit for the year is attributable to:
The accompanying notes and significant accounting policies on pages 18 to 59 form an integral part of
these financial statements.
15
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Statement of changes in equityFor the year ended 31 March
In thousands of naira Note Share capital Share premium Retained earnings Total equity
Balance, 1 April 2014 320,295 299,140 16,709,260 17,328,695
Total comprehensive income
Profit for the year ‐ ‐ 7,125,788 7,125,788 Other Comprehensive income ‐ ‐ 1,063,524 1,063,524 Total comprehensive income ‐ ‐ 8,189,312 8,189,312
Transactions with owners of the Company
Contribution and distribution
Dividend to equity holders 11(b) ‐ ‐ (1,601,476) (1,601,476)Unclaimed dividend written back 23(b) ‐ ‐ 17,102 17,102 Total transactions with owners of the Company ‐ ‐ (1,584,374) (1,584,374)
Balance, 31 March 2015 320,295 299,140 23,314,198 23,933,633
Balance, 1 April 2015 320,295 299,140 23,314,198 23,933,633 Total comprehensive income Profit for the year ‐ ‐ 3,347,463 3,347,463 Other comprehensive income ‐ ‐ (748,609) (748,609)
Total comprehensive income ‐ ‐ 2,598,854 2,598,854
Transactions with owners of the Company
Contribution and distribution
Dividend to equity holders 11(b) ‐ ‐ (1,761,623) (1,761,623)
Unclaimed dividend written back 23(b) ‐ ‐ 8,730 8,730 Total transactions with owners of the Company ‐ ‐ (1,752,893) (1,752,893)
Balance, 31 March 2016 320,295 299,140 24,160,159 24,779,594
The accompanying notes and significant accounting policies on pages 18 to 59 form an integral part of these financial statements.
16
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Statement of cash flowsFor the year ended 31 March
In thousands of naira
Note 2016 2015
Cash flows from operating activities
Profit for the year 3,347,463 7,125,788
Adjustments for:
Depreciation of property plant and equipment 12(a) 9,325,971 8,520,745
Amortization of intangible assets 13 35,237 28,139
Finance income 7(a) (41,571) (22,151)
Finance costs 7(c) 3,245,524 1,961,624
Employee benefit charge 22(c) 1,142,434 638,052
Loss/(gain) on sale of property, plant and equipment 4,109 (39,927)
Income tax expense 10(a) 409,927 1,623,313
17,469,094 19,835,583
Change in inventories (1,926,393) (108,100)
Change in trade and other receivables (1,159,433) (1,658,284)
Change in prepayments 177,142 46,049
Change in deposit for imports 4,957,800 (5,874,980)
Change in trade and other payables (excluding dividend payable)* 1,577,023 3,297,326
Cash generated from operating activities 21,095,233 15,537,594
Value Added Tax (VAT) paid * (1,812,611) (2,210,619)
Income tax paid 10(c) (974,853) (1,485,992)
Employee benefit paid (1,323,426) (209,760)
Net cash from operating activities 16,984,343 11,631,223
Cash flow from investing activities
Finance income received 7(a) 31,455 22,151
Proceeds from sale of property, plant and equipment 93,396 83,007
Acquisition of property, plant and equipment 12(e) (7,321,118) (14,833,700)
Acquisition of Intangible assets 13 (62,908) (7,876)
Net cash used in investing activities (7,259,175) (14,736,418)
Cash flow from financing activities
Proceeds from loans and borrowings 21(a)(ii) 70,326,373 8,778,758
Repayment of loans and borrowings 21(a)(ii) (67,812,771) (7,954,316)
Interest paid 7(c) (3,015,927) (1,786,572)
Dividend paid 23(c) (1,643,748) (1,513,088)
Net cash used in financing activities (2,146,073) (2,475,218)
Net increase in cash and cash equivalents 7,579,095 (5,580,413)
Cash and cash equivalents at the beginning of the year (2,798,981) 2,753,963
Effect of exchange rate fluctuations on cash held 156 27,469
Cash and cash equivalents at the end of the year 19 4,780,270 (2,798,981)
The accompanying notes and significant accounting policies on pages 18 to 59 form an integral part of these
financial statements.
*Change in trade and other payables has been adjusted for the effect of Value Added Tax (VAT) paid shown
separately on the statement of cash flows as well as the portion of property plant and equipment unpaid as at year
end.
17
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Notes to the financial statementsFor the year ended 31 March 2016
Page Page
1 Reporting entity 19 16 Deferred taxation 40
2 Basis of preparation 19 17 Inventories 41
3 Significant accounting policies 20 18 Trade and other receivables 41
4 Determination of fair values 31 19 Cash and cash equivalents 41
5 Revenue 32 20 Capital and reserves 42
6 Analysis of expenses and other income 32 21 Loans and borrowings 42
7 Finance income and finance cost 33 22 Employee benefits 44
8 Profit before taxation 33 23 Trade and other payables 47
9 Personnel expenses 3424 Financial risk management and
financial instruments 48
10 Taxation 36 25 Capital management 55
11 Earnings and declared dividend per share 37 26 Operating leases 56
12 Property, plant and equipment 38 27 Changes in presentation 56
13 Intangible assets 39 28 Contingencies 56
14 Prepayments and other receivables 40 29 Related parties 57
15 Deposit for import 40 30 Subsequent events 59
18
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Notes to the financial statementsFor the year ended 31 March 2016
1 Reporting Entity
2 Basis of Preparation
(a) Statement of compliance
(b) Basis of measurement
(c) Functional and presentation currency
(d) Use of estimates and judgment
Note 22 Measurement of defined benefit obligation: key actuarial assumption
Note 28Contingencies: key assumptions about the likelihood and magnitude of an
outflow of resources
Seven‐Up Bottling Company PLC (“the Company”) is a company domiciled in Nigeria. The Company was
incorporated in Nigeria as a private Limited liability Company on 25th June, 1959 under the name Seven‐
Up Limited. On 16th May 1960, the name was changed to Seven‐Up Bottling Company Limited and
thereafter to “Seven‐Up Bottling Company PLC” on 26th November 1991 in compliance with the
provisions of the Companies and Allied matters Act 1990. Currently, the Company’s shares are quoted
on the floor of the Nigerian Stock Exchange. The majority shareholder of the Company is Afelka S.A,
having 73.22% interest in the equity of Seven‐Up Bottling Company PLC. The address of the Company’s
registered office is 247, Moshood Abiola Way, Ijora, Lagos.
The Company is primarily involved in the business of bottling and marketing of a wide range of soft
drinks and Aquafina premium table water across Nigeria.
The financial statements have been prepared in accordance with the International Financial
Reporting Standards (IFRS) and in the manner required by the Companies and Allied Matters Act of
Nigeria and the Financial Reporting Council of Nigeria Act, 2011. These financial statements were
authorized for issue by the Company's Board of Directors on 22nd June 2016.
The financial statements have been prepared under the historical cost basis and the use of actuarial
methods for estimating certain employee benefits which are based on the present value of
anticipated future liabilities.
These financial statements are presented in Naira, which is the Company’s functional currency. All
amounts have been rounded to the nearest thousand unless otherwise indicated.
The preparation of the financial statements in conformity with IFRSs requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future periods
affected.
Information about assumptions and estimation uncertainties that have a significant risk of resulting
in a material adjustment within the next financial year are included in the following notes:
19
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(i) Measurement of fair values
3 Significant accounting policies
(a) Foreign currency
Foreign currency transactions
(b) Financial instruments
I. Non‐derivative financial assets‐recognition and measurement
The accounting policies set out below have been applied consistently to all years presented in these
financial statements.
Non‐monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction.
Transactions denominated in foreign currencies are translated and recorded in Naira at the
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in
foreign currencies are translated to the functional currency at the exchange rate at the reporting
date. The foreign currency gain or loss on monetary items is the difference between amortized cost
in the functional currency at the beginning of the period, adjusted for effective interest and
payments during the period, and the amortized cost in foreign currency translated at the exchange
rate at the end of the year.
Foreign currency differences arising on translation are recognized in profit or loss.
The Company initially recognizes loans and receivables and deposits on the date that they are
originated. All other financial assets are recognized initially on the trade date at which the
Company becomes a party to the contractual provisions of the instrument.
The Company derecognizes a financial asset when the contractual rights to the cash flows from
the asset expire, or it transfers the rights to receive the contractual cash flows on the financial
asset in a transaction in which substantially all the risks and rewards of ownership of the
financial asset are transferred. Any interest in transferred financial assets that is created or
retained by the Company is recognized as a separate asset or liability.
A number of the Company’s accounting policies and disclosures require the measurement of fair
values, for both financial and non‐financial assets and liabilities.
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same
level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in the
following notes:
• Note 24 ‐ Financial risk management and financial instruments
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Seven-Up Bottling Company PLCAnnual Report
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Loans and receivables
Cash and cash equivalents
II. Non‐derivative financial liabilities‐recognition and measurement
III. Share capital
(c) Property, plant and equipment
I. Recognition and measurement
Loans and receivables are financial assets with fixed or determinable payments that are not
quoted in an active market. Such assets are recognized initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, loans and receivables are
measured at amortized cost using the effective interest method, less any impairment losses. An
impairment loss is recognized if the carrying amount exceeds the estimated recoverable
amount. Loans and receivables comprise trade and other receivables.
Cash and cash equivalents comprise cash on hand, cash balances with banks and call deposits
with original maturities of three months or less. 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 flows.
The Company’s non‐derivative financial assets are classified as loans and receivables and cash
and cash equivalents.
All financial liabilities are recognized initially on the trade date at which the Company becomes a
party to the contractual provisions of the instrument.
The Company derecognizes a financial liability when its contractual obligations are discharged or
cancelled or expire.
Items of property, plant and equipment are measured at cost less accumulated depreciation and
any accumulated impairment losses and residual value.
The Company has the following non‐derivative financial liabilities: loans and borrowings, bank
overdrafts, trade and other payables. Such financial liabilities are recognized initially at fair value
less any directly attributable transaction costs. Subsequent to initial recognition these financial
liabilities are measured at amortized cost using the effective interest method.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
ordinary shares and share options are recognized as a deduction from equity, net of any tax
effects.
Financial assets and financial liabilities are offset and the net amount presented in the statement
of financial position when, and only when, the Company has a legally enforceable right to offset
the amounts and intends either to settle them on a net basis or to realise the asset and settle
the liability simultaneously.
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Seven-Up Bottling Company PLCAnnual Report
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II . Subsequent costs
III. Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less
their estimated residual values using a straight‐line basis over their estimated useful lives.
Depreciation is generally recognized in profit or loss, unless the amount is included in the
carrying amount of another asset. Leased assets are depreciated over the shorter of the lease
term and their useful lives unless it is reasonably certain that the Company will obtain ownership
by the end of the lease term in which case the assets are depreciated over the useful life.
The cost of replacing a part of an item of property, plant and equipment is recognized in the
carrying amount of the item if it is probable that the future economic benefits embodied within
the part will flow to the Company and its cost can be measured reliably. The carrying amount of
the replaced part is derecognized. The costs of the day‐to‐day servicing of property, plant and
equipment are recognized in profit or loss as incurred.
Items of property, plant and equipment are depreciated from the date they are available for use
or, in respect of capital‐work‐in‐progress, from the date that the asset is completed and ready
for use.
Cost includes expenditure that is directly attributable to the acquisition of the asset. Items of
property, plant and equipment under construction are disclosed as capital work‐in‐progress.
The cost of construction recognized includes the cost of materials and direct labour, the costs of
dismantling and removing the items and restoring the site on which they are located, and
borrowing costs on qualifying assets and any other costs directly attributable to bringing the
assets to the location and condition necessary for it to be capable of operating in the manner
intended by management.
Purchased software that is integral to the functionality of the related equipment is capitalized as
part of the equipment.
When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or
when no future economic benefits are expected from its use or disposal. The gains and losses on
disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment, and are
recognized net within other income in profit or loss.
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Seven-Up Bottling Company PLCAnnual Report
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The estimated useful lives for the current and comparative periods are as follows:
• Leasehold land
• Buildings 20 years
• Plant and machinery
‐ moulds 3 years
‐ Other plant and machinery 7 years
• Motor vehicle 5 years
• Furniture and fittings 10 years
• IT equipment 4 years
• Returnable packaging materials
‐ Bottles 5 years
‐ Crates 7 years
(d) Intangible assets
I. Software
II. Subsequent expenditure
Derecognition
III. Amortization
• Computer software 4 years
Amortization is calculated over the cost of the asset, or other amount substituted for cost, less
its residual value.
Over lease period or 99 years, whichever is
lower
Depreciation methods, useful lives and residual values are reviewed at each financial year end
and adjusted if appropriate.
Capital work‐in‐progress is not depreciated. The attributable cost of each asset is transferred to
the relevant asset category immediately the asset is available for use and depreciated
accordingly.
Purchased software with finite useful life is measured at cost less accumulated amortization and
accumulated impairment losses.
Subsequent expenditure is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including expenditure
on internally generated goodwill and brands, is recognized in profit or loss as incurred.
An item of intangible asset is derecognized on disposal or when no future economic benefits are
expected from its use or disposal. The gain or loss arising from the derecognition of an intangible
assets are determined by comparing the net proceeds (if any) from disposal with the carrying
amount of the intangible assets and are recognized net within other income in profit or loss.
Amortization is recognized in profit or loss on a straight‐line basis over the estimated useful lives
of intangible assets, other than goodwill, from the date that they are available for use, since this
most closely reflects the expected pattern of consumption of the future economic benefits
embodied in the asset. The estimated useful life for the current and comparative periods is as
follows:
Amortization methods, useful lives and residual values are reviewed at each financial year‐end
and adjusted if appropriate.
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Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(e) Leases
I. Determining whether an arrangement contains a lease
● the arrangement contains a right to use the asset(s).
II. Leased assets
III. Lease payments
(f) Inventories
At inception of an arrangement, the Company determines whether such an arrangement is or
contains a lease. This will be the case if the following two criteria are met:
At inception or on reassessment of the arrangement, the Company separates payments and
other consideration required by such an arrangement into those for the lease and those for
other elements on the basis of their relative fair values. If the Company concludes for a finance
lease that it is impracticable to separate the payments reliably, then an asset and a liability are
recognised at an amount equal to the fair value of the underlying asset. Subsequently the
liability is reduced as payments are made and an imputed finance cost on the liability is
recognised using the Company’s incremental borrowing rate.
● the fulfillment of the arrangement is dependent on the use of a specific asset or assets; and
Assets held by the Company under leases for which the Company assumes substantially all the
risks and rewards of ownership are classified as finance leases. Upon initial recognition the
leased asset is measured at an amount equal to the lower of its fair value and the present value
of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to that asset.
Assets held under other leases are operating leases and the leased assets are not recognized in
the Company’s statement of financial position.
Payments made under operating leases are recognized in profit or loss on a straight‐line basis
over the term of the lease. Lease incentives received are recognized as an integral part of the
total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance
expense and the reduction of the outstanding liability. The finance expense is allocated to each
period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability.
Inventories are measured at the lower of cost and net realizable value. The cost of inventories
includes expenditure incurred in acquiring the inventories, production or conversion costs and other
costs incurred in bringing them to their existing location and condition. In the case of manufactured
inventories and work‐in‐progress, cost includes an appropriate share of production overheads based
on normal operating capacity. Cost incurred in bringing each product to its present location and
condition is based on:
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Seven-Up Bottling Company PLCAnnual Report
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Engineering spares:
Goods‐in‐transit: purchase cost incurred to date
Allowance is made for obsolete, slow moving or defective items where appropriate.
(g) Impairment
I. Non‐derivative financial assets
Raw and non‐returnable packaging materials
Products‐ in‐ process and manufactured finished
goods
Engineering spares are classified as inventory and are recognized in the profit or loss as consumed.
purchase cost on a weighted average
cost basis, including transportation
and clearing costs
purchase cost on a first‐ in, first ‐ out
basis including transportation and
clearing costs
weighted average cost of direct
materials and labour plus a reasonable
proportion of manufacturing
overheads based on normal levels of
activity
Weighted average cost is reviewed periodically to ensure it consistently approximates historical
cost.
Net realizable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and selling expenses.
A financial asset not carried at fair value through profit or loss is assessed at each reporting date
to determine whether there is objective evidence that it is impaired. A financial asset is impaired
if objective evidence indicates that a loss event has occurred after the initial recognition of the
asset, and that the loss event had a negative effect on the estimated future cash flows of that
asset that can be reliably estimated.
Objective evidence that financial assets are impaired can include; default or delinquency by a
debtor, restructuring of an amount due to the Company on terms that the Company would not
consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the
disappearance of an active market for a security. In addition, for an investment in an equity
security, a significant or prolonged decline in its fair value below its cost is objective evidence of
impairment.
The Company considers evidence of impairment for receivables at both a specific asset and
collective level. All individually significant receivables are assessed for specific impairment. All
individually significant receivables found not to be specifically impaired are then collectively
assessed for any impairment that has been incurred but not yet identified. Receivables that are
not individually significant are collectively assessed for impairment by grouping together
receivables with similar risk characteristics.
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Seven-Up Bottling Company PLCAnnual Report
31 March 2016
II. Non‐financial assets
The recoverable amount of an asset or cash‐generating unit is the greater of its value in use and
its fair value less costs to sell. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre‐tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For the purpose of
impairment testing, assets that cannot be tested individually are grouped together into the
smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (the “cash‐generating unit, or
CGU”).
The Company’s corporate assets do not generate separate cash inflows. If there is an indication
that a corporate asset may be impaired, then the recoverable amount is determined for the CGU
to which the corporate asset belongs.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its
estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment
losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any
goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in
the unit (group of units) on a pro rata basis.
In respect of other assets (excluding goodwill for which impairment loss is not reversed),
impairment losses recognized in prior periods are assessed at each reporting date for any
indications that the loss has decreased or no longer exists. An impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortization, if
no impairment loss had been recognized.
In assessing collective impairment, the Company uses historical trends of the probability of
default, timing of recoveries and the amount of loss incurred, adjusted for management’s
judgment as to whether current economic and credit conditions are such that the actual losses
are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the
difference between its carrying amount and the present value of the estimated future cash flows
discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss
and recognized in an allowance account against receivables. Interest on the impaired asset
continues to be recognized through the unwinding of the discount. When a subsequent event
causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed
through profit or loss. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, if no
impairment loss had been recognized.
The carrying amounts of the Company’s non‐financial assets, other than inventories are
reviewed at each reporting date to determine whether there is any indication of impairment. If
any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and
intangible assets that have indefinite useful lives or that are not yet available for use, the
recoverable amount is estimated each year at the same time.
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Seven-Up Bottling Company PLCAnnual Report
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(h) Employee benefits
I. Defined contribution plans
II. Defined benefit plans
III. Other long term employee benefits
The discount rate is the yield at the reporting date on Federal Government of Nigeria issued
bonds that have maturity dates approximating the term of the Company’s obligation. The
calculation is performed using the Projected Unit Credit method. Any remeasurements are
recognized in the profit or loss.
The Company’s other long‐term employee benefits represent Long Service Awards scheme
instituted for all permanent employees. The Company’s obligation in respect of the Long Service
Awards scheme is the amount of future benefits that employees have earned in return for their
service in the current and prior periods. The benefit is discounted to determine its present value.
A defined contribution plan is a post‐employment benefit plan under which an entity pays fixed
contributions into a separate entity and has no legal or constructive obligation to pay further
amounts in respect of all employee benefits relating to employee service in current and prior
periods.
In line with the provisions of the Pension Reform Act 2014, the Company has instituted a defined
contribution pension scheme for their permanent staff. Staff contributions to the scheme are
funded through payroll deductions. Obligations for contributions to the defined contribution
plan are recognized as employee benefit expense in profit or loss in the periods which related
services are rendered by employees. The Company and its employees each contribute 10% and
8% respectively of the employees' basic salaries, transport & housing allowances to the fund on
a monthly basis.
A defined benefit plan is a post‐employment benefit plan other than a defined contribution plan.
The Company’s net obligation in respect of defined benefit gratuity scheme is calculated by
estimating the amount of future benefit that employees have earned in return for their service
in the current and prior years and that benefit is discounted to determine its present value. In
determining the liability for employee benefits under the defined benefit scheme, consideration
is given to future increases in salary rates and the Company's experience with staff turnover.
The Company's liability with respect to this scheme is determined by an independent actuarial
valuation every year using the projected unit credit method. Remeasurements arising from
differences between the actual and expected outcome in the valuation of the obligation are
recognized in other comprehensive income. The effect of any curtailment is also recognized in
full in profit or loss immediately when the curtailment occurs. The discount rate is the yield on
Federal Government of Nigeria issued bonds that have maturity dates approximating the terms
of the company’s obligation. Although the scheme is not funded, the Company ensures that
adequate arrangements are in place to meet its obligations under the scheme.
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Seven-Up Bottling Company PLCAnnual Report
31 March 2016
IV. Termination benefits
V. Short‐term employee benefits
(i) Provisions
(j) Contingent liabilities
(k) Revenue
Revenue is recognized when persuasive evidence exists that the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is probable and there
is no continuing management involvement with the goods, and the amount of revenue can be
measured reliably. If it is probable that discount will be granted and the amount can be measured
reliably, then the discount is recognized as a reduction of revenue as the sales are recognized.
Termination benefits are recognized as an expense when the Company is committed
demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either
terminate employment before the normal retirement date, or to provide termination benefits as
a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary
redundancies are recognized as an expense if the Company has made an offer of voluntary
redundancy, it is probable that the offer will be accepted, and the number of acceptances can be
estimated reliably. If benefits are payable more than 12 months after the reporting period, then
they are discounted to their present value.
Short‐term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided.
A liability is recognized 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.
A provision is recognized if, as a result of a past event, the Company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of economic
benefits will be required to settle the obligation. 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. The unwinding of the discount is recognized as
finance cost.
A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non‐occurrence of one or more uncertain future events not
wholly within the control of the Company, or a present obligation that arises from past events but is
not recognized because it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; or the amount of the obligation cannot be
measured with sufficient reliability.
Contingent liabilities are only disclosed and not recognized as liabilities in the statement of financial
position. If the likelihood of an outflow of resources is remote, the possible obligation is neither a
provision nor a contingent liability and no disclosure is made.
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of
the consideration received or receivable, net of value added tax, sales returns, trade discounts and
volume rebates.
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Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(l) Finance income and finance costs
(m) Income tax
I. Current tax
II. Deferred tax
Deferred tax are recognized in profit or loss except to the extent that it relates to a business
combination, or items recognized directly in equity or in other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year,
using tax rates statutorily enacted at the reporting date, and any adjustment to tax payable in
respect of previous years. The Company is subject to the following types of current income tax;
• Company Income Tax‐ This relates to tax on revenue and profit generated by the Company
during the year, to be taxed under the Companies Income Tax Act Cap C21, LFN 2004 as
amended to date.
• Tertiary Education Tax‐ This is based on the assessable income of the Company and is
governed by the Tertiary Education Trust Fund (Establishment) Act LFN 2011
Deferred tax is recognized in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognized for:
• temporary differences on the initial recognition of assets or liabilities in a transaction that is
not a business combination and that affects neither accounting nor taxable profit or loss;
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible
temporary differences to the extent that it is probable that future taxable profits will be
available against which they can be used. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised. Such reductions are reversed when the probability of future taxable profits impairs.
Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, using tax rates enacted or substantively enacted at the reporting
date.
Finance income comprises interest income on funds invested. Interest income is recognized as it
accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on borrowings and impairment losses recognized on
financial assets (other than trade receivables).
Borrowing cost that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognized in profit or loss.
Transfer of significant risk and rewards of ownership is determined to be transferred to the buyer at
the point of delivery to the buyer.
Foreign currency gains and losses are recognised in profit or loss and presented on a net basis as
either finance income or finance cost.
Deferred tax assets and liabilities are offset only if certain criteria are met.
Income tax expense represents the sum of current tax expense and deferred tax expense.
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Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(n) Earnings per share
(o) Dividends
Dividends are recognized as a liability in the period they are declared.
(p) Related parties
(q) Segment reporting
(r) Standards and interpretations not yet adopted
The Securities and Exchange Commission (SEC) published a circular in 2015 directing Capital Market
Registrars to return all unclaimed dividend which has been in their custody for fifteen (15) months
and above to the paying companies. These unclaimed dividends are included as a liability to the
shareholders until they become statute barred in accordance with the provisions of Section 385 of
CAMA.
All of the Company’s products have similar risks and returns thus management does not use
operating segments’ operating results to make decisions about resources to be allocated to the
segment and assess its performance.
A number of new standards, amendments to standards and interpretations are effective for annual
periods beginning after 1st April 2015, and have not been applied in preparing these financial
statements. Those which may be relevant to the Company are set out below. The extent of the
impact of these standards is yet to be determined. The Company does not plan to adopt these
standards early. These will be adopted in the period that they become mandatory unless otherwise
indicated
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. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding, adjusted for own
shares held, for the effects of all dilutive potential ordinary shares.
Dividends which remained unclaimed for a period exceeding twelve (12) years from the date of
declaration and which are no longer actionable by shareholders in accordance with Section 385 of
Companies and Allied Matters Act of Nigeria are written back to retained earnings.
Related parties include the holding company and other group entities. Directors, their close family
members and any employee who is able to exert a significant influence on the operating policies of
the Company are also considered to be related parties. Key management personnel are also
regarded as related parties. Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the entity, directly or indirectly,
including any director (whether executive or otherwise) of that entity.
An operating segment is a distinguishable component of the Company that earns revenue and incurs
expenditure from providing related products or services (business segment), or providing products
or services within a particular economic environment (geographical segment), and which is subject
to risks and returns that are different from those of other segments.
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Seven-Up Bottling Company PLCAnnual Report
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(i) IFRS 15 Revenue from contract with customers ‐ 1 January 2017
(ii) IFRS 9 Financial Instruments ‐ 1 January 2018
4 Determination of fair values
(a) Trade and other receivables
(b) Non‐derivative financial liabilities
A number of the Company’s accounting policies and disclosures require the measurement of fair value,
for both financial and non‐financial assets and liabilities. Fair values have been determined for
measurement and/or disclosure purposes based on the methods indicated below.
On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, which replaces
earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial
Instruments: Recognition and Measurement. Even though the measurement categories are
similar to IAS 39, the criteria for classification into these categories are significantly different. In
addition, the IFRS 9 impairment model has been changed from an “incurred loss” model from
IAS 39 to an “expected credit loss” model, which is expected to increase the provision for bad
debts recognised in the Company.
IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early adoption
permitted. The adoption of these standards is expected to have an impact on the Company's
financial assets and liabilities.
This standard replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty
Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of
Assets from Customers and SIC‐31 Revenue – Barter of Transactions Involving Advertising
Services.
The standard contains a single model that applies to contracts with customers and two
approaches to recognising revenue: at a point in time or over time. The model features a
contract‐based five‐step analysis of transactions to determine whether, how much and when
revenue is recognised.
This new standard will most likely have a significant impact on the Company, which will include a
possible change in the timing of when revenue is recognised and the amount of revenue
recognised.
The Company is yet to carry‐out an assessment to determine the impact that the initial
application of IFRS 15 could have on its business; however, the Group (or Company) will adopt
the standard for the year ending 31 December 2018.
Fair value, which is determined for disclosure purposes, is calculated based on the present value of
future principal and interest cash flows, discounted at the market rate of interest at the reporting
date.
When applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability.
The fair value of trade and other receivables is estimated as the present value of future cash flows,
discounted at the market rate of interest at the measurement date. Fair value for short‐term
receivables with no stated interest rate are measured at the original invoice amount if the effect of
discounting is immaterial. Fair value is determined at initial recognition and for disclosure purposes,
at each annual reporting date.
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Seven-Up Bottling Company PLCAnnual Report
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5 Revenue
Revenue for the year comprises:
In thousands of naira 2016 2015
Sale of goods:
Local 85,616,691 82,372,767
Export 17,988 77,738
Total Revenue 85,634,679 82,450,505
6 Analysis of expenses and other income
(a) Analysis of expenses by nature
In thousands of naira 2016 2015
Raw materials and consumables 48,058,473 40,842,546
Advertising and sales promotion 3,352,822 3,160,391
Depreciation (Note 12(a)) 9,325,971 8,520,745
Auditors' remuneration 39,000 38,000
Professional fees (i) 89,924 47,236
Amortization (Note 13) 35,237 28,139
Payroll expenses (Note 9) 10,872,213 10,331,234
Transportation 2,360,438 2,482,369
Repairs and maintenance 4,350,490 5,114,816
Management fees ‐ 262,473
Lease and rentals 506,202 517,327
78,990,770 71,345,276
Total cost of sales, selling & distribution and administrative expenses is made up of:
In thousands of naira 2016 2015
Cost of sales 60,622,243 51,972,978
Selling and distribution expenses 11,801,831 12,909,907
Administrative expenses 6,566,696 6,462,391
78,990,770 71,345,276
(i)
(b) Other income represents income from the sale of scrap.
Tax and advisory services amounting to N25 million (2015:N23 million) were provided by
KPMG Professional Services. The balance of professional fees amounting to N70 million
(2015: N29 million) represent expenses for professional services provided by companies and
firms other than the external audit firm.
Total cost of sales, selling & distribution and administrative
expenses
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Seven-Up Bottling Company PLCAnnual Report
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7 Finance income and finance cost
a. Finance income comprises:
In thousands of naira 2016 2015
Interest income on bank deposit 31,455 22,151
Net gain on foreign exchange transactions 10,116 ‐
41,571 22,151
b. Finance costs comprises:
In thousands of naira 2016 2015
Interest on overdraft (429,096) (299,133)
(2,816,428) (1,662,491)
Net loss on foreign exchange transactions ‐ (498,258)
(3,245,524) (2,459,882)
Net finance cost recognized in profit or loss (3,203,953) (2,437,731)
c. Finance cost in the cash flow
In thousands of naira 2016 2015
Finance costs per profit or loss 3,245,524 2,459,882
Loss on foreign exchange transactions ‐ (498,258)
Finance costs per statement of cash flows 3,245,524 1,961,624
Interest accrual (229,597) (175,052)
Interest paid per statement of cash flows 3,015,927 1,786,572
d. Finance income in the cash flow
In thousands of naira 2016 2015
Finance income in the statement of profit or loss / cash flows (41,571) ‐
Gain on foreign exchange transactions* 10,116 ‐ Finance income received per statement of cash flows (31,455) ‐
8 Profit before taxation
Profit before taxation is stated after charging/(crediting):
In thousands of naira 2016 2015
Depreciation of property, plant and equipment (Note 12 (a)) 9,325,971 8,520,745
Amortization of intangible assets (Note 13) 35,237 28,139
Auditor’s remuneration 39,000 38,000
Directors’ remuneration (Note 9 (c)) 18,695 46,276
Personnel expenses (Note 9 (a)) 10,872,213 10,331,234
Loss/(gain) on sale of property, plant and equipment 4,109 (39,927)
Net (gain)/loss on foreign exchange transactions (10,116) 498,258
Operating lease cost (Note 26) 462,253 517,327
Management service fee (29(d)(vi)) ‐ 262,473
*The effect of the gain in foreign exchange transactions in the statement of cash flows has been
adjusted for in the change in trade and other payables.
Financial liabilities measured at amortized cost‐
interest expense (Note 21 (a)(ii))
33
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
9 Personnel expenses
(a) Personnel expenses for the year comprise the following:
In thousands of naira 2016 2015
Salaries, wages and allowances 7,878,078 7,852,641
Expenses related to defined benefit plans (Note 22(c)) 1,142,434 638,052
Expenses related to defined contribution plans (Note 23(a)) 816,838 795,356
Other personnel expenses 1,034,863 1,045,185
10,872,213 10,331,234
(b)
2016 2015
N N Number Number
550,001 ‐ 600,000 ‐ 5
600,001 ‐ 650,000 1 6
650,001 ‐ 700,000 2 20
700,001 ‐ 800,000 18 751
800,001 ‐ 1,000,000 1,144 1,084
1,000,001 ‐ 1,200,000 393 299
1,200,001 ‐ 1,400,000 153 213
1,400,001 ‐ 1,600,000 159 195
1,600,001 ‐ 1,800,000 177 273
1,800,001 ‐ 2,000,000 150 135
2,000,001 ‐ 2,500,000 208 206
2,500,001 ‐ 3,000,000 102 124
3,000,001 ‐ 3,500,000 77 84
3,500,001 ‐ 4,000,000 54 74
4,000,001 ‐ 4,500,000 32 48
4,500,001 ‐ 5,000,000 16 17
5,000,001 ‐ 7,000,000 36 40
7,000,001 and above 37 32
2,759 3,606
Employees of the Company, whose duties were wholly or mainly discharged in Nigeria, received
remuneration (excluding pension costs and certain benefits) in the following ranges:
34
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
The number of full‐time persons employed per function as at 31 March was as follows:
2016 2015
Number Number
Manufacturing 1,169 1,669
Distribution 1,102 1,507
Finance 163 178
Human Resources/ Administration 297 218
Information Technology 28 34 2,759 3,606
(c) Directors' remuneration
Remuneration paid to directors of the Company was as follows:
In thousands of naira 2016 2015
Fees paid to non‐executive directors 700 700
Remuneration paid to the chairman 4,212 3,900
Remuneration paid to executive directors 13,783 41,676
18,695 46,276
The executive directors’ remuneration shown above includes:
In thousands of naira 2016 2015
Highest paid director 5,370 36,701
2016 2015
N N Number Number
0 ‐ 3,000,000 8 7
3,000,001 ‐ 4,500,000 ‐ 1
8 8
The number of other directors (excluding the Chairman and highest paid director) who received
emoluments excluding pension contributions and certain benefits were within the following ranges:
35
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
10 Taxation
(a) Income tax expense
In thousands of naira 2016 2015
Current tax expense
Current year income tax 871,705 745,658
Tertiary education tax 156,314 233,956
Capital gains tax 5,400 ‐
1,033,419 979,614
Prior year underprovision ‐ 345,604
1,033,419 1,325,218
Deferred tax expense
Origination and reversal of temporary differences (623,492) 298,095
Total income tax expense 409,927 1,623,313
(b) Income tax recognized directly in other comprehensive income
In thousands of naira 2016 2015
Remeasurement of defined benefit (liability)/ asset (Note 22(a)) (1,069,442) 1,519,320
Related tax (Note 16(b)) 320,833 (455,796)Defined benefit plan actuarial (loss)/gain, net of tax (748,609) 1,063,524
(c) Movement in current tax liabilities
Movement in tax payable account during the year was as follows
In thousands of naira 2016 2015
Balance, beginning of the year 1,339,805 1,500,579
Payments in the year (974,853) (1,485,992)
Charge for the year 1,033,419 1,325,218
Balance, end of the year 1,398,371 1,339,805
The tax charge for the year has been computed after adjusting for certain items of expenditure and
income, which are not deductible or chargeable for tax purposes, and comprises:
36
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(d)
i Can products produced at the Company's Lagos Plant
ii
(e) Reconciliation of effective tax rate
2016 2015
In thousands of naira
Profit for the year 3,347,463 7,125,788
Taxation 409,927 1,623,313
Profit before tax 3,757,390 8,749,101
30.0% 1,127,217 30.0% 2,624,730
Impact of Tertiary education tax 4.2% 156,314 2.7% 233,956
Impact of Capital gains tax 0.1% 5,400 0% ‐
Non‐deductible expenses 2.0% 76,585 0.3% 22,354
Tax exempt income ‐1.9% (75,044) ‐4.9% (425,539)
Pioneer status incentive ‐23.4% (880,545) ‐13.5% (1,177,792)
Prior year underprovision 0% ‐ 4.0% 345,604
Tax expense 11.0% 409,927 18.6% 1,623,313
11 Earnings and declared dividend per share
(a)
(b)
Income tax using the Company’s
domestic tax rate
Declared dividend per share of 275 kobo (2015: 250 kobo) is based on the dividend declared
on 23 June 2015 of N1,761,623,498 (2015: N1,601,475,908) on 640,590,363 ordinary shares
of 50 kobo each (2015: 640,590,363 ordinary shares of 50 kobo each), being the number of
ordinary shares in issue during the year.
Basic and diluted earnings per share of 523 kobo (2015: 1,112 kobo) was calculated based on
profit attributable to the owners of the Company for the year of N3,347,463,000 (2015:
N7,125,788,000) and on 640,590,363 ordinary shares of 50 kobo each (2015: 640,590,363
ordinary shares of 50 kobo each), being the number of ordinary shares in issue during the
year and at the end of the year.
In 2013, the Nigerian Investment Promotion Council (NIPC) granted the Company a pioneer
status for a five year period with respect to the following production activities of the
Company.
PET products produced at the Lagos, Enugu and Abuja plant locations, with a retroactive
commencement production date of 1 September 2011.
The effective commencement production date was certified by the Industrial Inspectorate
Department of the Federal Ministry of Commerce and Industry on 23 November 2013. In
accordance with the provision of the Industrial Development (Income Tax Relief) Act, the
Company's profit attributable to the pioneer line of business is therefore not liable to income
taxes for the duration of the pioneer period.
37
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
12 Property, plant and equipment (PPE)
(a) The movement on these accounts during the year was as follows:
In thousands of naira
Cost
Balance at 1 April 2014 87,027 12,862,022 29,038,759 9,268,867 5,684,908 12,715,589 3,067,771 72,724,943
Additions ‐ 36,215 125,318 206,322 79,656 3,408,337 10,882,464 14,738,312
Transfers from capital work in progress ‐ 2,593,331 9,247,198 29,497 413,978 ‐ (12,284,004) ‐
Reclassification*** ‐ ‐ ‐ ‐ ‐ ‐ 372,684 372,684
Disposals ‐ ‐ (25,076) (41,742) ‐ (287,095) ‐ (353,913)
Write‐off ‐ ‐ ‐ (62,006) ‐ (1,202,338) ‐ (1,264,344)
Balance at 31 March 2015 87,027 15,491,568 38,386,199 9,400,938 6,178,542 14,634,493 2,038,915 86,217,682
Balance at 1 April 2015 87,027 15,491,568 38,386,199 9,400,938 6,178,542 14,634,493 2,038,915 86,217,682
Additions 15,500 24,789 52,500 230,166 54,720 4,200,368 2,886,950 7,464,993
Transfers from capital work in progress ‐ 1,110,397 3,017,308 171,916 248,193 ‐ (4,547,814) ‐
Reclassification*** ‐ ‐ ‐ ‐ ‐ ‐ 53,924 53,924
Disposals ‐ ‐ (24,199) (454,677) (3,156) (1,678,267) ‐ (2,160,299)
Balance at 31 March 2016 102,527 16,626,754 41,431,808 9,348,343 6,478,299 17,156,594 431,975 91,576,300
Depreciation and impairment
Balance at 1 April 2014 7,189 2,805,152 16,361,635 7,024,278 3,521,713 5,111,472 ‐ 34,831,439
Depreciation for the year 1,212 648,593 3,498,661 917,113 710,726 2,744,440 ‐ 8,520,745
Disposals ‐ ‐ (25,076) (37,225) ‐ (248,532) ‐ (310,833)
Write‐off ‐ ‐ ‐ (62,006) ‐ (1,202,338) ‐ (1,264,344)
Balance at 31 March 2015 8,401 3,453,745 19,835,220 7,842,160 4,232,439 6,405,042 ‐ 41,777,007
Balance at 1 April 2015 8,401 3,453,745 19,835,220 7,842,160 4,232,439 6,405,042 ‐ 41,777,007
Depreciation for the year 1,404 791,662 4,185,194 724,945 717,425 2,905,341 ‐ 9,325,971
Disposals ‐ ‐ (23,993) (445,354) (1,479) (1,591,968) ‐ (2,062,794)
Balance at 31 March 2016 9,805 4,245,407 23,996,421 8,121,751 4,948,385 7,718,415 ‐ 49,040,184
Carrying amounts
At 1 April 2014 79,838 10,056,870 12,677,124 2,244,589 2,163,195 7,604,117 3,067,771 37,893,504
At 31 March 2015 78,626 12,037,823 18,550,979 1,558,778 1,946,103 8,229,451 2,038,915 44,440,675
At 1 April 2015 78,626 12,037,823 18,550,979 1,558,778 1,946,103 8,229,451 2,038,915 44,440,675
At 31 March 2016 92,722 12,381,347 17,435,387 1,226,592 1,529,914 9,438,179 431,975 42,536,116
*** Amount represents reclassification of qualifying spares from inventory.
Returnable
packaging
PPE Under
ConstructionTotal Leasehold land Buildings
Plant and
MachineryMotor Vehicles
Office
Equipment
38
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(b) Property, plant and equipment under construction
Capital work in progress at the year is analyzed as follows:
In thousands of naira 2016 2015
Plant and machinery 163,271 1,221,505
Land and buildings 265,516 812,624
Furniture equipment 3,188 4,786
431,975 2,038,915
No borrowing costs were capitalized in current year (2015: Nil).
(c) Assets held on finance lease
(d) Capital commitments
2016 2015
Approved and contracted 748,419,830 ‐ Approved but not contracted 195,847,440 ‐
944,267,270 ‐
(e) Additions in cash flow statement
2016 2015
Additions per Note 12 (a) 7,464,993 14,738,312
Reclassification of qualifying spares from inventories 53,924 372,684
Accrued additions to property, plant and equipment (197,799) (277,296)
Acquisition of PPE per statement of cash flows 7,321,118 14,833,700
13 Intangible assets
The movement in this account during the year was as follows:
In thousands of naira
Cost 2016 2015
Balance beginning of the year 115,129 107,253
Additions 62,908 7,876
Balance end of year 178,037 115,129
Amortization
Balance beginning of the year 87,431 59,292
Amortization for the year 35,237 28,139
Balance end of year 122,668 87,431
Carrying amounts
Balance beginning of the year 27,698 47,961 Balance end of year 55,369 27,698
The Company holds various pieces of land under finance lease arrangements. The maximum
tenor of the lease arrangements is 99 years in line with the Land Use Act. The lease amounts
were fully paid at the inception of the lease arrangements.
Capital expenditure commitments at the year‐end authorized by the Board of Directors
comprise:
39
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
14 Prepayments and other receivables
a Prepayments represent current and non‐current portions of prepaid rent.
b
15 Deposit for imports
16 Deferred taxation
Recognized deferred tax liabilities
(a) Deferred tax liabilities are attributable to the following:
In thousands of naira 31‐Mar‐16 31‐Mar‐15 31‐Mar‐16 31‐Mar‐15 31‐Mar‐16 31‐Mar‐15
Property, plant and equipment ‐ ‐ 3,528,304 4,178,687 3,528,304 4,178,687
Employee benefits (1,248,874) (964,421) ‐ ‐ (1,248,874) (964,421)
Unrealized exchange gain ‐ ‐ 3,034 12,523 3,034 12,523
Tax (asset)/liabilities (1,248,874) (964,421) 3,531,338 4,191,210 2,282,464 3,226,789
Set off of tax 1,248,874 964,421 (1,248,874) (964,421) ‐ ‐ Net tax liabilities ‐ ‐ 2,282,464 3,226,789 2,282,464 3,226,789
(b) Movement in temporary differences during the year
In thousands of naira
Balance 31
March 2014
Recognized
in profit or
loss
Recognized in
other
comprehensive
income
Balance 31
March 2015
Recognized
in profit or
loss
Recognized in
other
comprehensive
income
Balance 31
March 2016
Property, plant and equipment 3,802,189 376,498 ‐ 4,178,687 (650,383) ‐ 3,528,304
Employee benefits (1,329,291) (90,926) 455,796 (964,421) 36,380 (320,833) (1,248,874)
Unrealized exchange gain ‐ 12,523 ‐ 12,523 (9,489) ‐ 3,034
2,472,898 298,095 455,796 3,226,789 (623,492) (320,833) 2,282,464
Net Liabilities Assets
Non‐current other receivables represent non interest bearing loans granted to the Company’s employees, which are secured by the employees’
retirement benefit obligations.
Deposit for imports represent foreign currencies purchased for funding letters of credit in respect of imported raw materials and items of property plant
and equipment.
40
Seven-Up Bottling Company PLCAnnual Report
31 March 201617 Inventories
In thousands of naira 2016 2015
4,785,266 4,361,887
Work in progress 216,103 179,240
Finished products 688,380 813,377
Engineering spares 2,188,774 2,094,613
Goods in transit 3,616,339 2,119,352
11,494,862 9,568,469
18 Trade and other receivables
In thousands of naira 2016 2015
Trade receivables 455,875 502,625
Staff loans and advances 565,112 503,620
Due from related parties (Note 29 (d)(i)) 3,892,995 3,037,998
Other receivables (i) 677,087 120,262
Deposit with Company's registrars for dividend 70,515 257,327
5,661,584 4,421,832
19 Cash and cash equivalents
In thousands of naira 2016 2015
Cash and bank balances 5,856,658 1,820,726
Cash and cash equivalents in statement of financial position 5,856,658 1,820,726
Bank overdrafts used for cash management purposes (1,076,388) (4,619,707)Cash and cash equivalents in the statement of cash flows 4,780,270 (2,798,981)
The Company’s exposure to credit risk, currency risk and a sensitivity analysis for cash and cash equivalents
is disclosed in Note 24.
Included in cash and cash equivalents are unclaimed dividend amounting to N635 million (2015:
N339 million) held in a separate bank account in accordance with the guidelines issued by the Securities and
Exchange Commission. This amount is restricted from use by the Company.
The value of raw materials, non‐returnable packaging materials, spare parts, changes in finished products
and products in process recognized in cost of sales during the year amounted to N57.2 billion (2015: N48.9
billion). In current year, there was no write‐down of inventory to net realizable value (2015: N150 million)
these were included in cost of sales on the statement of profit or loss and other comprehensive income.
The Company’s exposure to credit and currency risks, and impairment losses related to trade and other
receivables are disclosed in Note 24.
Raw materials, consumables and non‐returnable packaging
materials
41
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
20 Capital and reserves
(a) Ordinary shares
(i) Authorized ordinary shares of 50k each
In number of shares 2016 2015
640,590,363 640,590,363
(ii) Issued and fully paid ordinary shares of 50k each
In number of shares 2016 2015
640,590,363 640,590,363
21 Loans and borrowings
(a)
(i) Loans and borrowing as at 31 March is as follows:
In thousands of naira 2016 2015
Non‐ current liabilities:Secured bank loans 1,520,205 4,433,469
Current liabilities:
Secured bank loans 16,689,294 11,032,831
18,209,499 15,466,300
(ii) Movement in the loans and borrowings
Secured bank loans
2016 2015
Balance beginning of year 15,466,300 14,466,806
Increase in borrowings 70,326,373 8,778,758
Interest charged (Note 7(b)) 2,816,428 1,662,491
Interest repayment (2,586,831) (1,487,439) Principal repayment (67,812,771) (7,954,316) Balance end of year 18,209,499 15,466,300
This note provides information about the contractual terms of the Company’s interest‐bearing
loans and borrowings, which are measured at amortized cost. For more information about the
Company’s exposure to interest rate, foreign currency and liquidity risks, see Note 24.
42
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Terms and debt repayment schedule
(b) Terms and conditions of outstanding loans were as follows:
In thousands of naira
Currency Face ValueFair value
Face ValueFair value
CITI bank $3,181,362 USD libor + 5% 2016 628,319 628,319 628,319 1,725,361 1,747,980 1,747,980
Zenith Bank PLC N7,500,000 NGN 13% 2016 6,500,000 6,502,131 6,502,131 3,000,000 3,000,000 3,000,000
Standard Chartered N1,200,031 NGN 13% 2016 1,200,031 1,217,399 1,217,399 2,442,286 2,487,738 2,487,738
Standard Chartered N1,434,933 NGN 2015 ‐ ‐ ‐ 1,434,933 1,434,933 1,434,933
Stanbic IBTC N1,000,000 NGN 2015 ‐ ‐ ‐ 100,000 100,748 100,748
Guaranty Trust Bank PLC N6,000,000 NGN 13% 2016 4,000,000 4,146,393 4,146,393 ‐ ‐ ‐
Union Bank N977,199 NGN 2015 ‐ ‐ ‐ 977,199 1,002,233 1,002,233
Stanbic IBTC N66,187 NGN 2015 ‐ ‐ ‐ 153,000 154,995 154,995
Standard Chartered N1,578,200 NGN 2015 ‐ ‐ ‐ 526,067 530,552 530,552
Standard Chartered N1,579,700 NGN 2015 ‐ ‐ ‐ 526,567 531,063 531,063
Zenith Bank PLC $2,852,244 USD Libor + 9% 2016 559,040 559,040 559,040 ‐ ‐ ‐
Standard Chartered $3,000,060 USD Libor + 7% 2016 592,512 592,512 592,512 280,836 282,433 282,433
Zenith Bank PLC N3,000,000 NGN 16% 2016 3,000,000 3,043,500 3,043,500 3,000,000 3,035,644 3,037,239
Zenith Bank PLC N1,500,000 NGN 17% 2018 1,500,000 1,520,205 1,526,444 ‐ ‐ ‐
Stanbic IBTC N1,125,000 NGN 13.3%‐16.8% 2016 ‐ ‐ ‐ 1,125,000 1,157,981 1,158,639
Total Interest bearing liabilities 17,979,902 18,209,499 18,215,738 15,291,249 15,466,300 15,468,553
The bank loans are secured by a negative pledge on the Company’s assets in line with their relative exposures.
31 March 2016 31 March 2015
Nominal
interest rate
Year of
maturity
Carrying
amount
Carrying
amountFacility
amount
43
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
22 Employee benefits
In thousands of naira 2016 2015
Present value of unfunded obligation for gratuity (Note (a)) 3,738,175 2,939,619
Long service awards benefit plan (Note (b)) 819,570 729,676 Total employee benefit liabilities 4,557,745 3,669,295
(a) Movement in present value of unfunded obligation for gratuity
In thousands of naira 2016 2015
Balance, beginning of the year 2,939,619 3,769,378
Included in profit or loss
Current service costs 181,710 286,230
Interest costs on obligation 511,497 542,125
Past service cost 268,197 ‐
961,404 828,355
Included in OCI
1,069,442 (1,519,320)
Benefit paid by the plan (1,232,290) (138,794)
Balance, end of the year 3,738,175 2,939,619
The Company operates an unfunded annualized defined benefit gratuity scheme for its employees.
The benefits under which are related to the employees' length of service and remuneration. Under
the annualized defined benefit plan, gratuity is calculated on an annual basis using the salaries for
each year to determine the benefits using projected unit credit method.
Lump sum benefit payable upon retirement or resignation of employment are fully accrued over the
service lives of the employees. Gratuity and other long term employee benefit provisions are based
upon independent actuarial valuation by Alexander Forbes Consulting Actuaries Nigeria Limited with
FRC number FRC/2012/0000000000504.
Actuarial loss/(gain)
44
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(b) Movement in long service award benefit plan
In thousands of naira 2016 2015
Balance, beginning of the year 729,676 990,945
Included in profit or loss
Current service costs 60,612 96,227
Interest costs on obligation 131,071 143,030
Actuarial gain on long service awards (10,653) (429,560)
181,030 (190,303)
Benefit paid by the plan (91,136) (70,966)
Balance, end of the year 819,570 729,676
(c) Total employee benefit recognized in the profit or loss
In thousands of naira 2016 2015
Unfunded obligation for gratuity 961,404 828,355
Long service award benefit plan 181,030 (190,303)
1,142,434 638,052
2016 2015
In thousands of Naira
Cost of sales 114,243 295,316
Administrative expense 1,028,191 342,736
1,142,434 638,052
(d) Actuarial assumptions
Financial Assumptions
2016 2015
Long term average discount rate (p.a.)
Gratuity 13.3% 16.4%
Long service awards 13.3% 17.6%
Average Pay Increase (p.a.) 10% 12%
Weighted average duration of the plan (years) 8 6
Assumptions regarding future mortality are based on published statistics and mortality tables.
Employee benefit expense shown above are recognized in administrative expenses and cost of
sales in the statement of profit or loss as follows.
Principal actuarial assumptions at the reporting date (expressed as weighted averages) fall
under two broad categories. These assumptions depict management’s estimate of the likely
future experience of the Company.
Total employee expenses relating to defined benefit
plan (Note (9a))
45
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Mortality in service
Sample age Number of deaths in year out of 10,000 lives
2016 2015
25 7 7
30 7 7
35 9 9
40 14 14
45 26 26
(e) Sensitivity Analysis
In thousands of Naira
rate Gratuity Long service
awards
1% (147,500) (45,829)
‐1% 93,202 50,924
1% 23,074 27,655
‐1% (86,425) (25,379)
+1 year (21,000) (2,800)
‐1 year (45,914) 2,521 Mortality rate
The rates of mortality assumed for employees are the rates published in the A49/52 Ultimate
Tables, published jointly by the Institute and Faculty of Actuaries in the UK. This is due to
unavailability of published reliable demographic data in Nigeria.
Below is the sensitivity analysis of the principal actuarial assumptions adopted in determining
the employee benefit liabilities:
Discount rate
Salary increase rate
46
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
23 Trade and other payables
In thousands of naira 2016 2015
Trade payables 5,359,902 6,032,530
Other payables and accrued expenses (Note (a)) 3,422,841 2,340,515
Amount due to related parties (Note 29(d)(i)) 182,062 845,997
Pension payable (Note (b)) 180,219 207,600
Dividend payable (Note (c)) 706,341 597,196
Liability for returnable packaging material 5,641,185 5,407,472
15,492,550 15,431,310
(a)
(b)
In thousands of Naira 2016 2015
Balance, beginning of the year 207,600 199,820
Contributions during the year (Note 9(a)) 816,838 795,356
Payments (844,219) (787,576)
Balance, end of the year 180,219 207,600
(c) Movement in dividend payable
In thousands of naira 2015 2015
Balance, beginning of the year 597,196 525,910
Declared dividend (Note 11(b)) 1,761,623 1,601,476
Unclaimed dividend written back (8,730) (17,102)
Dividend paid (1,643,748) (1,513,088)
Balance, end of the year 706,341 597,196
Other payables and accrued expenses represents payroll related accruals, non‐CIT as well as
general accruals as at year end.
Included in other payables and accrued expenses is pension payable to the pension fund
administrators which was yet to be remitted at the year end. The movement on the pension
payable account during the year was as follows:
The directors propose a dividend of 160 kobo per share (2015: 275 kobo per share) on the issued
shares of 640,590,363 ordinary shares of 50k each (640,590,363). The dividend if approved by
members will be paid subject to deduction of withholding tax at the appropriate rate.
As at 31 March 2016, an amount of N71 million (2015: N257 million) of the total dividend payable
was held with the Company’s registrar, GTL Registrars Limited. The remaining dividend payable of
N635 million (2015: N340 million) represents unclaimed dividends, which have been returned to
the Company by the Registrar.
The Company’s exposure to currency and liquidity risk related to trade and other payables is
disclosed in Note 24.
47
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
24 Financial risk management and financial instruments
∙ Credit risk
∙ Liquidity risk
∙ Market risk
Risk management framework
(a) Credit risk
Exposure to credit risk
The Company has exposure to the following risks from its use of financial instruments:
This note presents information about the Company’s exposure to each of the above risks, the
Company’s objectives, policies and processes for measuring and managing risk, and the Company’s
management of capital. Further quantitative disclosures are included throughout these financial
statements.
The Board of Directors' have overall responsibility for the establishment and oversight of the
Company’s risk management framework. The Board has established a Management Committee,
which is responsible for developing and monitoring the Company’s risk management policies. The
committee reports regularly to the Board of Directors on its activities. The Committee is assisted in its
oversight role by Internal Audit.
The Company’s risk management policies are established to identify and analyze the risks faced by
the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly by the Management Committee to
reflect changes in market conditions and the Company’s activities.
Credit risk is the risk of financial loss to the Company if a customer or a counterparty to a financial
instrument fails to meet its contractual obligations and arises principally from the Company's
receivable from customers or investment in securities.
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk at the reporting date was:
The Company’s Audit Committee oversees how management monitors compliance with the
Company’s risk management policies and procedures, and reviews the adequacy of the risk
management framework in relation to the risks faced by the Company. Internal Audit undertakes
both regular and ad hoc reviews of compliance with established controls and procedures, the results
of which are reported to Senior Management of the Company at Management meetings.
48
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
In thousands of naira Note 2016 2015
Other receivables (non‐current) 14 95,188 175,663
Trade and other receivables 18 5,661,584 4,421,832
Cash and cash equivalents 19 4,780,270 (2,798,981)
10,537,042 1,798,514
Trade and other receivables
Carrying amount
Management has credit policies in place and the exposure to credit risk is monitored on an
ongoing basis. Under the credit policies all customers requiring credit over a certain amount are
reviewed and new customers analyzed individually for creditworthiness before the Company’s
standard payment and delivery terms and conditions are offered. The Company’s credit
assessment process includes specified cash deposits by new customers. Credit limits are
established for qualifying customers and these limits are reviewed regularly by the Credit control
unit. Customers that fail to meet the Company’s benchmark creditworthiness may transact with
the Company only on a prepayment basis.
The Credit control unit is charged with the review of each customer’s credit limit in line with the
customer's performance and perceived risk factor assigned to the customer.
In monitoring customer credit risk, customers are grouped according to their credit
characteristics, including whether they are an individual or legal entity, whether they are a key
distributor or retail distributor, geographic location, and existence of previous financial
difficulties. Trade and other receivables relate mainly to the Company’s wholesale customers.
Customers with no trading activities for a period of up to one year are placed on a dormant
customer list, and future sales are made on a prepayment basis only with approval of
management.
Amount due from related parties as at year end represents advance to the Company's key
suppliers’ with respect to purchases of packaging materials and funds required to boost their
working capital requirements.
Other receivables represent unclaimed dividends with the registrars, staff advances and
receivables.
49
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
In thousands of naira Note 2016 2015
Key customers 639,814 655,678
Other customers 148,805 116,385
Trade receivables 788,619 772,063
Other receivables and advances 1,303,719 685,402
2,092,338 1,457,465
Impairment (394,264) (330,958)
1,698,074 1,126,507
Due from related parties (Note 29(d)(i)) 3,892,995 3,037,998
Deposit with the Company's registrars 70,515 257,327
5,661,584 4,421,832
Impairment losses
The ageing of trade receivables at the reporting date was:
Gross Impairment Gross Impairment
In thousands of naira 2016 2016 2015 2015
Not pass due 0‐30 days 865,772 ‐ 662,270 ‐
Past due 31‐90 days 942,216 (109,914) 574,151 (109,914)
Past due 91‐180 days 87,443 (87,443) 45,646 (45,646)
Past due 181‐365 days 196,907 (196,907) 175,398 (175,398)
More than 365 days ‐ ‐ ‐ ‐
2,092,338 (394,264) 1,457,465 (330,958)
Carrying amount
The Company’s most significant customer accounts for N65 million of the loans and receivables
carrying amount at 31 March 2016 (2015: N121 million).
The Company establishes an allowance for impairment that represents its estimate of incurred
losses in respect of trade and other receivables. The main components of this allowance are a
specific loss component that relates to individually significant exposures, customers with
outstanding amounts but have not placed orders/traded for a prolonged period of time (usually
one year) and a collective loss component established for groups of similar assets in respect of
losses that have been incurred but not yet identified. The collective loss allowance is determined
based on historical data of payment statistics.
The maximum exposure to credit risk for trade and other receivables at the reporting date by
type of counterparty was:
50
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
In thousands of Naira 2016 2015
Balance, beginning of the year 330,958 300,958
Impairment loss recognized 63,306 30,252
Amounts written off ‐ (252)Balance, end of the year 394,264 330,958
The ageing of amount due from related parties at the reporting date was:
Gross Impairment Gross Impairment
In thousands of naira 2016 2016 2015 2015
Neither past due nor impaired 3,019,718 ‐ 2,281,114 ‐
Past due 31‐90 days 873,277 ‐ 756,884 ‐
Past due 91‐180 days ‐ ‐ ‐ ‐
Past due 181‐365 days ‐ ‐ ‐ ‐
More than 365 days ‐ ‐ ‐ ‐
3,892,995 ‐ 3,037,998 ‐
Cash and cash equivalents
(b) Liquidity risk
The movement in the allowance for impairment in respect of loans and receivables during the year was as
follows:
In addition, the Company maintains the various lines of credits as listed in note 21(b).
The impairment loss as at 31 March 2016 relates to several customers that are not expected to be able to
pay their outstanding balances, mainly due to economic circumstances. The Company believes that the
unimpaired amounts that are past due are still collectible, based on historical payment behaviour and
extensive analysis of the underlying customers’ credit ratings.
Based on historic default rates, the Company believes that, apart from the above, no impairment allowance
is necessary in respect of trade receivables not past due by up to 30 days.
The Company believes that the unimpaired amounts that are past due by more than 30 days are still
collectible in full, based on historic payment behaviour and extensive analysis of customer credit risk.
The Company held cash and cash equivalents of N5.9 billion at 31 March 2016 (2015: N1.8 billion) which
represents its maximum credit exposure on these assets. The cash and cash equivalents are held with bank
and financial institution counterparties, which are reputable and have a sound financial position.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s reputation.
The Company uses weighted average cost to cost its products, which assist it in monitoring cash flow
requirements and optimizing its cash return on investments. The Company aims to maintain the level of cash
and cash equivalents at an amount in excess of expected cash outflows on financial liabilities (other than
trade payables) over the succeeding 60 days. The Company also monitors the level of expected cash inflows
on trade and other receivables together with expected cash outflows on trade and other payables. At 31
March 2016, the expected cash flows from trade and other receivables maturing within two months were
N85 million (2015: N657 million). This excludes potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters.
51
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
31 March 2016
In thousands of naira
Non‐derivative financial
liabilities
Loans and borrowings 18,209,499 18,743,013 (17,094,903) (126,452) (1,521,658) ‐ ‐
Unsecured intercompany loan 182,062 182,062 (182,062) ‐ ‐ ‐ ‐
Trade and other payables 13,673,253 13,673,253 (13,673,253) ‐ ‐ ‐ ‐
Bank overdraft 1,076,388 1,076,388 (1,076,388) ‐ ‐ ‐ ‐
33,141,202 33,674,716 (32,026,606) (126,452) (1,521,658) ‐ ‐
31 March 2015
In thousands of naira
Non‐derivative financial
liabilities
Loans and borrowings 15,466,300 15,952,783 (13,516,503) (1,523,593) (912,687) ‐ ‐
Unsecured intercompany loan 845,997 845,997 (845,997) ‐ ‐ ‐ ‐
Trade and other payables 13,181,163 13,181,163 (13,181,163) ‐ ‐ ‐ ‐
Bank overdraft 4,619,707 4,619,707 ‐ (4,619,707) ‐ ‐ ‐
34,113,167 34,599,650 (27,543,663) (6,143,300) (912,687) ‐ ‐
6 months or
less6‐12 months 1‐2 years 2‐5years
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
More than
5 years
Carrying
amount
Contractual
cash flows
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of
netting agreements.
Carrying
amount
Contractual
cash flows
6 months or
less6‐12 months 1‐2 years 2‐5years
More than
5 years
52
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(c) Market risk
i. Currency risk
Amounts in thousands Euro USD Euro USD
Cash and cash equivalent 12 832 4,252 35,467
Trade and other receivables ‐ 592 2,020 334
Trade and other payables (108) (943) ‐ (2,032)
Bank Loan ‐ (6,181) ‐ ‐
Net exposure (96) (5,700) 6,272 33,769
The following significant exchange rates applied during the year;
2016 2015 2016 2015
Euro 220 218 225 212
United States Dollar (USD) 199 172 199 199
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest
rates will affect the Company’s 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.
31 March 2016 31 March 2015
Year end spot rate Average rate
Exposure to currency risk
The Company is exposed to currency risk on sales and purchases and borrowings that are
denominated in a currency other than the functional currency of the Company, primarily the
Naira. The currencies in which these transactions primarily are denominated are Euro and
US Dollars (USD). The currency risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate due to the changes in foreign exchange rates.
The Company's policy is to ensure that its net exposure in respect of monetary assets and
liabilities denominated in foreign currencies are kept to an acceptable level by buying or
selling foreign currencies at spot rates when necessary to address short term imbalances.
The summary quantitative data about the Company’s exposure to currency risk as reported
to the Management of the Company based on its risk management policy was as follows:
53
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
ii. Sensitivity analysis
Effect in thousands of Naira
31 March 2016
USD (20% strengthening) 226,860
USD (20% weakening) (226,860)
Euro (20% strengthening) 4,320
Euro (20% weakening) (4,320)
31 March 2015
USD (10% strengthening) (672,003)
USD (10% weakening) 672,003
Euro (10% strengthening) (132,966)
Euro (10% weakening) 132,966
(d) Interest rate risk
In thousands of Naira 2016 2015
Fixed rate instruments
Financial assets 1,053,785 281,161
Financial liabilities (18,743,013) (15,952,783)
(17,689,228) (15,671,622)
Variable rate instruments
Financial liabilities ‐ ‐
‐ ‐
Fair value sensitivity analysis for fixed rate instruments
Carrying Amount
In managing interest rate risk, the Company aims to reduce the impact of short‐term fluctuations
in earnings. Dividend pay‐out practices seek a balance between giving good returns to
shareholders on one hand and maintaining a solid debt/equity ratio on the other hand.
At the reporting date the interest rate profile of the Company’s interest‐bearing financial
instruments was:
A strengthening of the naira, as indicated below, against the USD would have affected the
measurement of financial instruments denominated in foreign currency and increased profit
or loss by the amounts shown below. This analysis is based on foreign currency exchange
rate variances that the Company considered to be reasonably possible at the end of the
reporting period. The analysis assumes that all other variables, in particular interest and
inflation rates, remain constant and ignores any impact of forecast sales and purchases.
The Company does not account for any fixed financial assets and liabilities at fair value through
profit or loss. Therefore a change in interest rates at the reporting date would not affect profit or
loss.
Increase/(decrease) in profit or
loss
54
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(e) Fair values
Fair values versus carrying amount
In thousands of Naira
Assets carried at amortized cost
Other receivables (non‐current) 95,188 95,188 175,663 175,663
Trade and other receivables 5,661,584 5,661,584 4,421,832 4,421,832
Cash and cash equivalents 5,856,658 5,856,658 1,820,726 1,820,726
11,613,430 11,613,430 6,418,221 6,418,221
Liabilities carried at amortized cost
Loans and borrowings‐non current 1,520,205 1,526,444 * 4,433,469 4,435,722
Loans and borrowings‐current 16,689,294 16,689,294 11,032,831 11,032,831
Trade and other payables 13,673,253 13,673,253 13,181,163 13,181,163
Bank overdraft 1,076,388 1,076,388 4,619,707 4,619,707
32,959,140 32,965,379 33,267,170 33,269,423
The Company does not carry any financial asset or financial liabilities at fair value.
* Level 2 inputs
The basis for determining fair values is disclosed in Note 4.
2016 2015
Secured bank loans 5%‐17% 7%‐17%
25 Capital management
In thousands of Naira 2016 2015
Total liabilities 43,017,017 43,753,206
Less: cash and cash equivalents (5,856,658) (1,820,726)
Net debt 37,160,359 41,932,480
Total equity 24,779,594 23,933,633
Net debt to equity ratio 1.50 1.75
The interest rates used to discount estimated cash flows, where applicable are based on external sources and
were as follows:
The Company’s debt to adjusted capital ratio at the end of the reporting period was as follows:
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Management monitors the return on capital, which the
Company defines as result from operating activities divided by total shareholders’ equity. Management also
monitors the level of dividends to all shareholders.
Trade and other receivables, loans and borrowings (current) and bank overdrafts are the Company’s short
term financial instruments. Accordingly, management believes that their fair values are not expected to be
materially different from their carrying values hence no further disclosures have been made.
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of
financial position, are as follows:
2016 2015
Fair valueCarrying
amountFair value Carrying amount
55
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
26 Operating leases
27 Changes in presentation
Statement of financial position
In thousands of naira
Prior
presentation
(31 March
2014) Reclassification
Current
presentation
(31 March
2014)
Cash and cash equivalents 4,918,916 (827,066) 4,091,850
Deposit for imports ‐ 827,066 827,066
4,918,916 ‐ 4,918,916
In thousands of naira
Prior
presentation
(31 March
2015) Reclassification
Current
presentation
(31 March
2015)
Cash and cash equivalents 8,522,772 (6,702,046) 1,820,726
Deposit for imports ‐ 6,702,046 6,702,046
8,522,772 ‐ 8,522,772
28 Contingencies
(a) Pending litigation and claims
The Company leases equipment, offices, warehouse and accommodation facilities under operating leases. The
leases typically run for a period of one to five years, with an option to renew the lease after that date. Lease
payments are usually increased at the expiration of the lease term and consequent renewal to reflect market
rentals. Lease rentals are paid upfront and included in prepayments, which are amortized to the profit and loss
over the life of the lease on a straight line basis and therefore there are no future lease payment payable in
relation to these lease. Lease rental payment in current year amounted to N376 million (2015: N520 million).
During the year ended 31 March 2016, an amount of N462 million (2015: N517 million) was recognized as an
expense in profit or loss in respect of operating leases.
The Head office, Ibadan and Ilorin land leases were entered into many years ago. The Company determined that
the land elements of these warehouse and office leases are operating leases. The rent paid to the landlord is
increased to market rate at regular intervals. As a result, it was determined that substantially all the risks and
rewards of the land and buildings are with the landlord.
To enhance the fair presentation and comparability of information, changes were made to the presentation of
certain items in the financial statements. Accordingly, comparative figures were reclassified. Find below the
nature of the change;
The Company is engaged in lawsuits that have arisen in the normal course of business. The contingent
liabilities in respect of pending litigation and other possible claims amounted to N932 million as at 31 March
2016 (2015: N1.1 billion). In the opinion of the directors, and based on independent legal advice, the
Company is not expected to suffer any material loss arising from these claims. Thus no provision has been
made in these financial statements.
56
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(b) Financial commitments
29 Related parties
(a) Parent and ultimate controlling party
(b) Transactions with key management personnel
Loans to key management personnel
(c) Key management personnel compensation
Key management personnel compensation comprised:
In thousands of naira 2016 2015
Short‐term employee benefits 225,162 275,221
Contribution to compulsory pension fund scheme 9,498 13,068
Long‐term employee benefits 195,918 259,096
430,578 547,385
(d) Other related party transactions
The directors are of the opinion that all known liabilities and commitments, which are relevant in
assessing the financial position of the Company, have been taken into consideration in the
preparation of these financial statements.
Related parties include the parent company, Afelka, S.A and other Seven‐Up entities and entities
under common control with Seven‐Up. Directors, their close family members and any employee
who is able to exert a significant influence on the operating policies of the Company are considered
as related parties. Key management personnel are also regarded as related parties. Key
management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity, directly or indirectly, including any director
(whether executive or otherwise) of that entity.
A number of key management personnel, or their related parties, hold positions in other entities
that result in them having control or significant influence over the financial or operating policies of
the entities. During the year, a number of these entities transacted with the Company. The total
amounts due to related parties by nature of their transaction are shown below.
The major shareholder of the Company is Afelka S.A with 73.22 % shareholding. The ultimate
controlling party of the Group is Mak Holdings (Lebanon) SAL.
There were no unsecured loans with key management personnel as at year end (2015: N
million). The loans in prior year were non‐interest bearing facilities. At 31 March 2016, the balance
outstanding is included in long term other receivables.
In addition to their salaries, the Company also provides non‐cash benefits to directors and
executive officers, and contributes to a post‐employment defined contribution plan on their behalf.
In accordance with the terms of the plan, directors and executive officers are entitled to access the
fund when they retire.
Executive officers also participate in the Company’s long service awards programme. This
programme awards a certain sum of cash benefit which accrues to the recipient on graduated
periods of uninterrupted service.
57
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(i) Amounts due from related parties
In thousands of naira
Related Party 2016 2015 2016 2015
Sunglass Limited iii Advance
payment/ supply 8,662,902 4,200,882 3,133,563 2,473,817
iv Advance
payment/ supply
of corks
10,171,303 3,070,244 663,045 503,836
SBC Ghana Limited vii Sale of finished
goods 318,818 39,337 96,387 60,345
19,153,023 7,310,463 3,892,995 3,037,998
(ii) Amounts due to related parties
In thousands of naira
Related Party 2016 2015 2016 2015
v Cash advance/
Services 967 57,750 182,062 213,659
vi Good and
services 17,680,902 11,774,338 ‐ 632,338
17,681,869 11,832,088 182,062 845,997
(iii) Sunglass Limited:
(iv) Green Eagle, Cork Seal Nigeria Limited (Green Eagle):
Balance outstanding as at
31 March
Transaction value year
ended 31 March
Sunglass Limited whose principal activity is the manufacturing of glass and glass wares is a major
supplier of bottles to Seven‐Up bottling Company PLC "the Company". Sunglass is related to the
Company through common shareholding, as the majority shareholders in Seven‐Up also have majority
shares in Sunglass limited.
The Company advances money to Sunglass Limited to boost their working capital and assist them in the
procurement of materials required for production. These advances are subsequently recovered from
future transactions from the supply of bottles.
Green Eagle, Cork Seal Nigeria Limited whose principal activity is the manufacturing and marketing of
Corks, Seals and Crates for bottling companies and breweries, is a major supplier of crowns and crates
to Seven‐Up Bottling Company PLC. Green Eagle, Cork Seal Nigeria Limited is related to the Company
through common shareholding.
The Company also advances money to Green Eagles to boost their working capital and assist them in
the procurement of materials required for production. These advances are subsequently recovered
from future transactions with the company for the supply of corks and crates.
Nature of
transaction
Green Eagle, Cork
Seal Nigeria Limited
Nature of
transaction
Balance outstanding as at
31 March
M. El Kalil Properties
Limited:
Transaction value year
ended 31 March
Continental
Beverages SAL
(Offshore):
58
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
(v) M. El Kalil Properties Limited:
(vi) Continental Beverages SAL (Offshore):
(vii) Seven‐Up Bottling Company (SBC) Ghana
30 Subsequent events
SBC Ghana Limited shares a common director with the Company. SBC Ghana Limited purchases
finished products from Seven‐Up Bottling Company PLC for resale in Ghana. Transactions with the
Company during the year amounted to N318.8 million (2015:N39.3 million) with a receivable balance
of N 96.4 million (2015: N 60.3 milion) as at year end.
The Company occupies properties owned by M. El‐Kalil & Sons (Properties) Limited. M. El‐Kalil & Sons
(Properties) Limited is related to the Company through common shareholding. In prior year M. El Kalil
advanced funds to Seven‐Up to assist in funding the operations of the business. Seven‐Up Bottling
Company also provides management services (mainly legal advice) to M.El Kalil.
Continental Beverages SAL (Offshore) sells goods and provides management services to Seven‐up
Bottling Company PLC. The total amount of goods bought from Continental Beverages during the year
amounted to N17.7 billion (2015: N11.8 billion). A consideration of 3% of profit before tax or 1% of net
sales, in a year where Seven‐up does not make profit (but not exceeding Nil (2015: N288,916,995)), is
paid as management service fees to Continental Beverages. This agreement is usually backed up with a
National Office for Technology Acquisition and Promotion (NOTAP) agreement however in current
year, there was none therefore no accrual was made during for management fee.
All outstanding balances with these related parties are expected to be settled within twelve months of
the reporting date. None of the balances is secured or bears interest.
Management fees payable to Continental Beverages for the year ended 31 March 2016 amounted to
Nil (2015: N262 million).
There are no events after the reporting date which could have had a material effect on the financial
position of the Company as at 31 March 2016 and its operating results for the year then ended that
have not been adequately provided for or disclosed in these financial statements.
59
Other National Disclosures
60
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Other National Disclosures
Value Added StatementFor the year ended 31 March
2016 % 2015 %
In thousands of naira
Revenue 85,634,679 82,450,505
Brought in materials and services
‐ Local (39,021,969) (36,101,778)
‐ Imported (19,735,380) (16,363,380)
26,877,330 29,985,347
Other income 317,434 81,603
Finance Income 41,571 22,151
Value Added 27,236,335 100 30,089,101 100
Distribution of Value Added:
To Government as:
Taxes and duties
‐ Government as taxes 409,927 2 1,623,313 5
To Employees:
‐ Employees as wages and salaries
and end of service benefits 10,872,213 40 10,331,234 34
To Providers of Finance:
‐ Finance Costs 3,245,524 12 2,459,882 8
Retained in the business:
To maintain and replace
‐ Property, plant and equipment 9,325,971 34 8,520,745 28
‐ Intangible assets 35,237 ‐ 28,139 ‐
To augment reserves 3,347,463 12 7,125,788 25
Value added 27,236,335 100 30,089,101 100
61
Seven-Up Bottling Company PLCAnnual Report
31 March 2016
Other National Disclosures
Five ‐ Year Financial Summary
Statement of profit or loss and other
comprehensive income2016 2015 2014 2013 2012
In thousands of naira
Revenue 85,634,679 82,450,505 77,888,548 64,088,879 59,864,385
Results from operating activities 6,961,343 11186832 9,130,834 5,526,734 4,802,379
Profit before taxation 3,757,390 8,749,101 7,616,444 3,262,719 2,558,644
Profit for the year 3,347,463 7,125,788 6,434,601 2,856,504 1,678,471
Total Comprehensive income for the year 2,598,854 8,189,312 6,160,014 2,928,875 1,678,471
Ratios
Per 50k share data:
Basic/ diluted earnings per share 523 1,112 1,004 446 262
Declared dividend per share (kobo) 275 250 220 200 200
Share price at year end (Naira) 155 156 90 49 42
Net assets per share 39 37 27 20 16
Statement of financial position
2016 2015 2014 2013 2012
In thousands of naira
Employment of Funds
Share capital 320,295 320,295 320,295 320,295 320,295
Share premium 299,140 299,140 299,140 299,140 299,140
Retained earnings 24,160,159 23,314,198 16,709,260 11,958,545 9,688,160
Shareholder's fund 24,779,594 23,933,633 17,328,695 12,577,980 10,307,595
Current liabilities 34,656,603 32,423,653 29,867,824 27,862,495 29,670,126
Non current liabilities 8,360,414 11,329,553 8,666,690 10,929,695 8,507,941
67,796,611 67,686,839 55,863,209 51,370,170 48,485,662
Asset Employed
Non current assets 42,771,624 44,702,571 38,238,065 35,873,744 33,480,167
Current assets 25,024,987 22,984,268 17,625,144 15,496,426 15,005,495
67,796,611 67,686,839 55,863,209 51,370,170 48,485,662
62