Potential of Local Feed Ingredients for Feeds Production & Feeds
LIVESTOCK FEEDS PLC FINANCIAL STATEMENTS,...
Transcript of LIVESTOCK FEEDS PLC FINANCIAL STATEMENTS,...
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REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER, 2010
1. The directors submit their report together with the audited financial statements of the company for
the year ended 31 December 2010.
2. RESULT N 000
The profit for the year after taxation 28,304
3. LEGAL FORM
The company was incorporated as a limited liability company on 20 March 1963 and was quoted on the Nigerian Stock Exchange in 1978.
4. PRINCIPAL ACTIVITY
The principal activity of the company is agriculture. The Company is engaged in the manufacturing and marketing of livestock feeds and concentrates.
5. SHAREHOLDINGS Substantial Interest in shares According to the Register of members, the following shareholders of the Company held more than 5% of the issued share capital of the Company as at 31st December 2010.
Shareholder Number of shares % Cashcraft Assets Mgt. Ltd. /Oceanic Bank Plc 80,000,000 6.67 First Capital Trust Ltd. 350,784,971 29.23 Kakawa Nominees 110,000,000 9.17
Analysis of Shareholding Range of Holdings No. of % of No. of % of
Shareholders Shareholders Shares held Shareholders 1 1,000 3,153 15.74 1,802,943 0.15
1,001 10,000 9,175 45.79 49,618,064 4.05 10,001
50,000 5,670 28.30 137,959,998 11.50 50,001 - 100,000 1,207 6.02 94,845,765 7.90 100,001
500,000 691 3.45 145,292,738 12.11 500,001
1,000,000 79 0.39 60,988,537 5.08 1,000,001
5,000,000 57 0.28 122,929,252 10.24 5,000,001
10,000,000 4 0.02 126,786,150 10.57 10,000,001
above 2 0.01 460,784,971 38.40
Total 20,038 100.00 1,199,999,418 100.00
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REPORT OF THE DIRECTORS (Cont d SHARE CAPITAL HISTORY
The nominal value of the issued and paid up share capital of the company as at 31 December 2010 was N599, 999, 709. The share capital had been progressively increased over the years as follows:
Date Issued & Fully Paid
Issued& Fully Paid
Cumulative
Increase N
Cumulative N
Consideration
March,1963 100,000.00
100,000.00
200,000.00
200,000.00
Cash April 8,1971 112,500.00
212,500.00
225,000.00
425,000.00
Cash March 14,1977 1,254,500.00
1,467,000.00
1,042,000.00
1,467,000.00
Cash Stock split April 7,1978 4,402,136.00
5,869,136.00
1,467,568.00
2,934,568.00
50k July 23,1980 2,934,568.00
8,803,704.00
1,467,284.00
4,401,852.00
1for 2 April 2,1982 2,200,926.00
11,004,630.00
1,100,463.00
5,502,315.00
1 for 4 March 31,1983 2,751,158.00
13,755,788.00
1,375,579.00
6,877,894.00
1 for 4 August 14,1985 3,438,947.00
17,194,735.00
1,719,473.50
8,597,367.50
1for 4 April 13,1987 3,438,947.00
20,633,682.00
1,719,473.50
10,316,841.00
1 for 5 1996 4,126,736.00
24,760,418.00
2,063,368.00
12,380,209.00
1 for 5 Sep-2006 544,720,000.00
569,480,418.00
272,360,000.00
284,740,209.00
Right issue March 26,2007 630,519,000.00
1,199,999,418.00
315,259,500.00
599,999,709.00
Private placement
6. DIRECTORS AND DIRECTORS INTERESTS (a) The list of the current Directors of the Company is shown on page 2. (b) In accordance with Section 258 (2) of the Companies and Allied Matters Act, (Cap C20
Laws of the Federation of Nigeria, 2004), the record of the Directors attendance at Directors meetings during 2010 is available for inspection at the Annual General Meeting.
(c) The Directors retiring by rotation at this Annual General Meeting in accordance with the Company s Article of Association are Mr. A Ikpea and Alhaji S.A Kaka who, being eligible, offer themselves for re-election.
(d) The interests of the directors in the shares of the company are as follows:
Directors Shareholdings: 31 December, 2010 24 March, 2011 Number of shares Number of shares
R. A. Tade 10,314,053 10,413,053 Y. Suleiman-Oba 2,010,000 2,010,000 S. Adegbenga Kaka 110,038 110,038 B. Oyapero - -
M. O. Asanmo (Mrs) 232,355 232,355 A. Ikpea 1,844,563 1,844,563 Indirect Interest:
Mr. B. Oyapero (Through First Capital Trust Ltd) 350,784,971 Mr. A. Ikpea (Through Cashcraft Assets 80,000,000
Management Ltd)
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REPORT OF THE DIRECTORS (Cont d)
(e) DIRECTORS INTERESTS IN CONTRACTS
None of the Directors has notified the company, for the purpose of section 277 of the Companies and Allied Matters Act (Cap C20 Laws of the Federation of Nigeria, 2004), of any declarable interest in contracts or proposed contracts with the Company during the year.
DIRECTORS RESPONSIBILITIES
The directors are responsible for the preparation of the financial statements, which give a true and fair view of the state of affairs of the company at the end of each financial year, and of the profit or loss for that period, and which comply with the Companies and Allied Matters Act, (Cap C20 Laws of the Federation of Nigeria, 2004). In doing so they ensure that:
Proper accounting records are maintained;
Internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets and prevent and detect fraud and other irregularities.
Applicable accounting standards are followed;
Suitable accounting policies are adopted and consistently applied;
Judgments and estimates made are reasonable and prudent;
The going concern basis is used unless it is inappropriate to presume that the company will continue in business.
7. CORPORATE GOVERNANCE
The Company is committed to best corporate governance practices and high ethical conduct in institutionalizing a process of regularly reviewing our processes and practices to align them with the code of corporate governance in Nigeria.
(a) Records of Director s Attendance
In accordance with Section 258(2) of the Companies and Allied Matters Act CAP C20 LFN 2004, the Directors attendance at board meetings during the year is available for inspection at the Annual General Meeting. The meetings of the Board were presided over by the Chairman. Written notices of Board meetings and minutes of meeting were appropriately recorded and circulated.
The Board and committee meetings and members attendance at these meetings are presented in the table below:
Names of Directors Board Establishment Committee
Business Devpt.
Committee
Audit Committee
Finance & Budget
Committee NO. OF MEETINGS 4 - 2 1 Robert A. Tade 3 - - - - Y. Suleiman-Oba 1 - - 1 1 S. A. Kaka 3 - 2 - B. Oyapero 4 - - - 1 M. O. Asanmo (Mrs) 4 1 2 1 A. Ikpea 3 - - -
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(b) Board Committees
In conformity with the Code of Best Practices in Corporate Governance, the Board has a number of committees which advise it on specific issues. The committees are as follows:
Finance and Budget Committee
This is a sub committee of the Board that is empowered to look into the draft budget for each year, review the financial position of the company and other financial matters. They are expected to make recommendations to the Board in a report to be submitted to it.
The following are currently members of the Committee: Mr. B. Oyapero Mr. Y. Suleiman-Oba Mrs. M. O. Asanmo - Managing Director Mr. Tayo Olayioye - Finance Controller
Establishment Committee
This sub committee of the Board is empowered to look at and review the remuneration of Executive Directors; make recommendations to the Board on matters of promotion, remuneration and welfare of staff.
Members: Alhaji S. A. Kaka Mr. Tony Ikpea Mrs. M. O. Asanmo - Managing Director Mrs M. Olowononi - Head of Human Resources
Business Development Committee
This Committee looks into the business plan and strategy of the company for each year and makes recommendations to the Board thereon.
The following are members of this Committee:
Mrs. M. O. Asanmo Mr. Y. Suleiman-Oba
Mr. Jide Adegbite - General Manager, Operations Mr. C. H. Aham-neze - General Manager, Sales and Marketing
(c) Audit Committee
The Committee comprises six members, three representing shareholders and three representing the board. In accordance with section 359(6) of the Companies and Allied Matters Act CAP C20 LFN 2004, the following members and Directors were elected and nominated pursuant to Section 359(4) of the said Act and will serve on the Committee up to the conclusion of this year s Annual General Meeting.
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Members of the Audit Committee:
Pastor A. O Edun - Members representative Mr. Jacob Akinola - Members representative Alhaji W. A. Adegbite - Members representative Mr. Y. Suleiman-Oba - Director Alhaji S. A. Kaka - Director Mrs. M. O. Asanmo - Director
The meetings of the committee were held and the functions of the committee are provided in section 359(6) of the Companies and Allied Matters Act CAP C20 LFN 2004.
8. FIXED ASSETS
Movements in fixed assets during the period are shown in Note 8 on page 12 In the opinion of the directors, the market value of the company s properties is not less than the value shown in the accounts.
9. DONATIONS
There were no donations made to charitable organizations during the year.
10. COMPANY S DISTRIBUTORS
The names of the company s major farmers are as follows:-
Oriental Farm, Aba Yamfy Farm Offa Flourishing Daniel Farm Sagamu Ore-Ofe Farms, Oyo Halleluyah Farms, Ijebu-Igbo Obi Farms, Ibadan. Farm Fresh, Gberigbe, Ikorodu Dora Joy Farms, Uromi, Ubiaja Solace Farms, Ijebu-Igbo, Ogun Ogunniran Farm, Sagamu Oloyo Farm, Ilaro Sesadex Farm, Adiyan Emonena Farms, Ughelli, Delta Stet Enterprises, Aba Kingsley Farm, Benin Leonis Mustard Farm, Owerri Picca Divine Farm, Eket Okejson Ent. Farm Uyo Aroket Farms, Jos Daimant Farms, Kaduna Canaan Farms, Kaduna S& P Farms, Suleja S.G Adiya Farms, Kaduna Dala Agric, Kaduna Onoseke-vwe Agro Services Farms, Ughelli.
11. SUPPLIERS
The company does not have significant overseas suppliers while local suppliers are Flour Mills of Nigeria Plc for Wheat offals, Grand Cereals & Oil Mills Ltd for soya bean cake, and local farmers for grains and soya beans.
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The company, which is not associated with the local suppliers, obtains all its materials at an arm s length.
12. ACQUISITION OF OWN SHARES
The company did not purchase its own shares during the year.
13. EMPLOYMENT AND EMPLOYEES
1 Employment of disabled persons It is the policy of the company that there should be no discrimination in considering applications for employment, including those for disabled persons. All employees, whether or not disabled, are given equal opportunities to develop their experience and knowledge, and to qualify for promotion in furtherance of their careers. As at 31 December, 2010 no disabled person was employed by the company.
2 Employee involvement and training
The company is committed to keeping employees fully informed as much as possible regarding its performance and progress and seeking their views wherever practicable on matters, which particularly affect them as employees.
Management, professional and technical expertise are the company s major assets and investments in developing such skills continue. The company s expanding skill base has extended to a range of training provided and has broadened opportunities for career development within the organization.
Incentive schemes and awards designed to meet the circumstances of each individual are implemented wherever appropriate and some of these include productivity bonus, Area Sales Representative awards, Area Sales Manager of the Quarter Award etc.
3 Health, safety at work and welfare of employees
Health and safety regulations are in force within the company s premises. The Health and Safety Department ensures that employees are aware of existing regulations. The company provides allowances to all employees for medical, transportation, housing etc.
14. POST BALANCE SHEET EVENTS
There were no other significant post balance sheet events which could have had a materials effect on the state of affairs of the company as at 31st December 2010 which have not been adequately provided for or disclosed.
15. FUTURE DEVELOPMENTS
The challenges of cash flow and high interest rates persisted towards a greater part of the year. The impact of this is inability to stockpile sufficient raw materials during the stockpiling season. In the feedmilling industry where the cost of raw materials make up about 90% of the cost of production, inability to take advantage of the much reduced prices of the materials during the harvest season will ultimately have a negative effect on the operations and results of the company.
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The negative security situation in Aba where one of our mills is located posed a major challenge
for us in the year as most farms in the territory were shut down, banks were often closed down for weeks at times, and transporters were unwilling to deliver feeds to customers and raw materials to the mill. The insecurity affected business in general as the mill, which is one of our highest sales earner achieved just about 50% of its sales budget for the year. These combined effects were the cause of reduced sales in the year, in comparison to the profit made in 2009.
However the paucity in funds improved in December of the year with the approval of the Federal Government Agric Stabilization loan for purchase of raw materials. These funds by their developmental nature are subject to highly reduced interest rates than what is obtainable in the regular banking channel. This served as a turnaround benefit for the company, which we fully utilized in the acquisition of the materials and expect a better footing in the coming year. We also project the possibilities of additional funds from the Federal Government Agric loans to purchase new and automated milling and other ancillary machines to replace our aged machines acquired over 27 years ago. The acquisition of these new machines will greatly improve the quality and availability of our products as well as reduce our running costs on the old manual machines.
In diversification of our sources of income in the coming year, we are exploring partnership with some overseas supplier of our raw materials to act as their agent in Nigeria thereby adding their products to our sales portfolio. We are on the verge of obtaining the necessary approvals from NAFDAC and other regulatory agencies for this purpose.
In a general vista we plan on fully maximizing all our available resources to ensure we bring a cutting edge to the industry before the end of the next financial year.
16. ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS). In the next financial year we are migrating to the International Financial Reporting Standards (IFRS) which is a new compliance directive of account reporting for all quoted companies. We have presently embarked on training our employees to be equipped with the necessary knowledge to ease in the migration to this new standard of account reporting.
17. AUDITORS
BDO Professional Services having indicated their willingness will continue in office as the company s auditors in accordance with Section 357(2) of the Companies and Allied Matters Act (Cap C20 Laws of the Federation of Nigeria, 2004). A resolution will be proposed authorizing the directors to determine their remuneration.
LAGOS, NIGERIA March 24, 2011
REPORT OF THE INDEPENDENT AUDITORS
TO THE MEMBERS OF LIVESTOCK FEEDS PLC
Directors' Responsibility for the Financial Statements
2. The directors are responsible for the preparation and fair presentation of these financial statements
Auditors' responsibility
3. Our responsibility is to express an independent opinion on the financial statements based on ouraudit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance as to whether the financial statements are free from material misstatement.
We have audited the accompanying financial statements of Livestock Feeds Plc for the year ended 31December 2010, set out on pages 6 to 19 which have been prepared on the basis of significantaccounting policies on pages 3 to 5 and other explanatory notes on pages 9 to17.
An audit involves performing procedures to obtain evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditors' judgement, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditors consider internal controls relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe Company's internal controls. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by the directors, as well asevaluating the overall presentation of the financial statements.
in accordance with Nigerian Statements of Accounting Standards and with the requirements of theCompanies and Allied Matters Act, CAP C20 LFN, 2004. This responsibility includes: designing,implementing and maintaining internal controls relevant to the preparation and fair presentation offinancial statements that are free from material misstatement whether due to fraud or error, selecting andapplying appropriate accounting policies, and making accounting estimates that are reasonable in thecircumstances.
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Opinion
4. In our opinion, the financial statements give a true and fair view of the state of affairs of the Company's financial position as at 31 December 2010 in accordance with the Companies and Allied Matters Act, CAP C20 LFN, 2004, and with Nigerian Statements of Accounting Standards.
Report on other legal requirements
5. The Companies and Allied Matters Act, CAP C20 LFN, 2004 requires that in carrying out our auditwe consider and report to you on the following matters. We confirm that:
i)
ii) in our opinion, proper books of account have been kept by the Company; and
iii)
Lagos, Nigeria28 March 2011
the Company's balance sheet and profit and loss account are in agreement with the booksof account.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
we have obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose of our audit.
3LIVESTOCK FEEDS PLC
FINANCIAL STATEMENTS, 31 DECEMBER 2010
ACCOUNTING POLICIES
Basis of preparation of financial statements
a)
Fixed assets
b) Fixed assets are stated at cost or valuation less accumulated depreciation.
Depreciation of fixed assets
c)
% per annumLeasehold land and building 3Plant and machinery 121/2
Furniture and fittings 121/2
Motor vehicles- Automobiles 20- Trucks 121/2
Computer equipment 331/3
Depreciation is not provided on fixed assets until they are brought into use.Gains or losses on the disposal of fixed assets are included in the profit and loss account.
Finance Lease
d)
Long term investments
e)
Stocks
f) Stocks are stated at the lower of cost and net realizable value.Cost incurred in bringing each product to its presentlocation and condition is based on:
Raw materials
Purchase cost on weighted average basis, including transportation costs.
Finished goods Cost of direct materials and labour plus a reasonableproportion of overheads absorbed by manufacturing based on normal levels of activity.
Engineering spares Purchase cost including freight and other incidental costs.
The following is a summary of the significant accounting policies adopted by the Company in the preparation of these financialstatements.
The financial statements are prepared under the historical cost convention as modified by the revaluation of leaseholdland and buildings.
The capital element under finance leases are capitalised and depreciated at the same rates for assets of that category.The interest element of the finance cost is charged to the income statements over the lease period. The obligation to thelessor is shown as part of other creditors, amounts falling due after more than one year appropriately.
Depreciation of fixed assets is calculated to write off the cost/valuation of fixed assets on a straight line basis over theexpected useful lives of the assets concerned. The principal annual rates used for this purpose are:
Quoted investments are valued at the lower of cost and market value. The amount by which cost exceeds market valueis charged to the income statement for the period. Realised gains and losses on the disposal of quoted investments aretaken to the income statement in the period of disposal.
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Goods-in-transit Invoice price
Provision is made for obsolete,slow-moving or defective items where appropriate.
Debtors
g) Debtors are stated net of specific provisions for bad and doubtful debts.
Income Taxation
h)
Deferred Taxation i)
Dividends
j) (i)
Unclaimed dividend
(ii)
Provisions
k)
Turnover
l) Turnover represents the net sales of feeds and concentrates at invoiced values to third parties.
Foreign Currencies
m)
Repairs and renewals
n)
Transactions in foreign currencies are recorded in naira at the rates of exchange ruling at the date of the transactions.Assets and liabilities denominated in foreign currencies at the balance sheet date are converted to Naira at theapplicable rates of exchange prevailing at the balance sheet date. All differences arising therefrom are dealt with in theprofit and loss account.
Income tax and education tax payable is provided on taxable profit and adjusted profit respectively at the currentstatutory rate.
Dividends on ordinary shares are appropriated from retained earnings and recognised as a liability in the period in whichthey are declared until they are paid. Dividends that are proposed but not yet declared are disclosed in the notes to thefinancial statements
Renewals which constitute major overhauls or renovations are treated as additons to fixed assets. Repairs andreplacement parts are charged to the profit and loss account in the year in which the costs are incurred.
Net realizable value is based on estimated normal selling price less further costs expected to be incurred to completionand disposal
Provisions are recognised when the Company has a present obligation, whether legal or constructive, as a result of apast event for which it is probable that an outflow of resources embodying economic benefits will be required to settlethe obligation and a reliable estimate can be made of the amount of the obligation in accordance with SAS 23.
Deferred taxation, which arises principally from timing differences in the recognition of items for accounting and taxpurposes, is calculated using the liability method. This represents taxation at the current rate of Corporate income tax onthe difference between the depreciation charge in the accounts and the capital allowances claimable for tax. This is inaccordance with SAS 19 on Accounting for Taxes.
Dividends which remain unclaimed for a period exceeding twelve years from the date of declaration and which are nolonger actionable by shareholders in accordance with Section 385 of the Companies and Allied Matters Act, CAP C20LFN, 2004 are written back to retained earnings.
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Retirement benefits
o)
Cash and cash equivalents
p)
Segment reporting
q)
Revaluation reserve
r)
Impairment of assets
s)
The Company operates a defined benefits contributory staff pension scheme for its employees in accordance with thePension Reform Act, 2004. It contributes 10% and the employees contribute 7.5% of employee's relevant emoluments.The Company's contribution is charged to the profit and loss account.
In addition, the Company instituted a productivity allowance based on the quarterly results of the Company. This is areplacement of the gratuity scheme previously maintained by the Company.
For the purpose of reporting cash flows, cash and cash equivalents include cash in hand, cash balances with banks andinvestments in money market instruments.
On disposal of previously revalued fixed assets, an amount equal to the revaluation surplus attributable to that asset istransferred from the revaluation reserve to retained earnings.
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amountmay not be recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceedsits recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and its value inuse.
Surplus/(deficits) arising on revaluation of individual fixed assets are (credited)/debited to a non-distributable reserveknown as revaluation reserve. Revaluation deficits in excess of the amount of prior revaluation surplus on the sameasset are charged to profit and loss account.
The Company's business segments that are subject to similar risks and returns, are presented by products andgeographical locations in accordance with SAS 24.
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LIVESTOCK FEEDS PLC
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2010
2010 2009Notes N'000 N'000
Turnover 2 2,000,767 2,178,432 Cost of sales (1,733,950) (1,938,079)
Gross profit 266,817 240,353Marketing & distribution expenses (77,253) (70,469) Administrative expenses (88,422) (86,997)
Trading Profit 101,142 82,887Other income 3 18,372 11,517
Operating Profit 119,514 94,404Interest payable and similar charges 4 (66,670) (55,653)
Profit before taxation 5 52,844 38,751Taxation 6 (24,540) (8,803)
Profit after taxation transferred to revenue reserve 22 28,304 29,948
Basic earnings per share 7 2.36kobo 2.49kobo
The accounting policies on pages 3 to 5 and notes on pages 9 to 17 form part of these financial statements.
Auditors' report, pages 1 and 2.
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LIVESTOCK FEEDS PLC
BALANCE SHEET AS AT 31 DECEMBER 2010
2010 2009Notes N'000 N'000
Non current assets:Fixed assets 8(a) 354,018
290,803
Leased assets 9 1,163
3,067
Long term investments 10 11,431
8,469
Total non-current assets 366,612
302,339
Current assets:Stocks 11 513,382
422,354
Trade debtors 12(a) 154,073
93,605
Other debtors and prepayments 12(b) 18,321
30,892
Cash at bank and in hand 24,270
23,184
Total current assets 710,046
570,035
Current liabilities:Borrowings 13 394,967
181,708
Creditors and accruals 14 193,993
229,052
Dividend payable 15 101
101
Taxation 6 30,556
29,472
Total current liabilities 619,617
440,333
Net current assets 90,429 129,702
Total assets less Current liabilities 457,041
432,041
Non current liabilities:Deferred tax 6(e) (22,309)
(7,656)
Obligations under finance lease 16 (776)
(1,553)
Retirement benefits and related obligations 17 (11,792)
(28,972)
Total net assets 422,164
393,860
Financed by:
Share capital 19 600,000
600,000
Share premium 20 8,028
8,028
Revaluation reserve 21 229,346
229,346
General Reserve 22 (415,210)
(443,514)
Shareholders' funds 422,164
393,860
The financial statements and notes on pages 6 to 19 were approved by the Board of Directors on 24 March 2011and signed on its behalf by:
(i) Mrs. Modupe O. Asanmo )) Directors
(ii) Mr. Robert A. Tade )
The accounting policies on pages 3 to 5 and notes on pages 9 to 17 form part of these financial statements.
Auditors' report, pages 1 and 2.
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LIVESTOCK FEEDS PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2010
2010 2009Notes N'000 N'000
Cash flows from operating activities:Cash received from customers 1,971,236 2,189,905 Payments to suppliers and employees (1,985,313) (2,033,721) Gratuity paid 17(b) (16,920) (8,559) Pension paid (13,009) (15,491) VAT received - - VAT paid - - Tax paid 6(b) (8,803) (10,812)
Net cash provided by operating activities 23 (52,809) 121,322
Cash flows from investing activities:Purchase of fixed assets 8 (93,989) (22,546) Initial deposit for leased assets 9 - (240) Proceeds from disposal of fixed assets 2,160 1,855 Interest received 3 6 3
Net cash used in investing activities (91,823) (20,928)
Cash flows from financing activities:Interest on loan and overdrafts 4 (66,495) (55,023) Lease repaid (871) (1,070) Short term loans - (25,000) Interest on lease 4 (175) (630)
Net cash outflow from financing activities (67,541)
(81,723)
Net (decrease)/increase in cash and cash equivalents (212,173) 18,671
Cash and cash equivalents as at beginning of the year (158,524) (177,195)
Cash and cash equivalents at end of year 24 (370,697) (158,524)
The accounting policies on pages 3 to 5 and notes on pages 9 to 17 form part of these financial statements.
Auditors' report, pages 1 and 2.
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LIVESTOCK FEEDS PLC
FINANCIAL STATEMENTS, 31 DECEMBER 2010
NOTES TO THE FINANCIAL STATEMENTS
Corporates structure and business1.
The Company was incorporated as a limited liability Company on March 20 ,1963 and commenced business on May 20,1963. It was quoted on the Nigerian Stock Exchange in 1978. 28.84% of the issued share capitalis owned by First Capital Trust Limited, 6.67% by Cashcraft Asset Management Limited, 9.17% by Kakawa Nominees and the rest by other Nigerians. It is engaged principally in manufacturing and Marketing of animal feeds and concentrates.
Turnover 2010 2009
2(a) Analysis by geographical areas: N'000 N'000Within Nigeria 2,000,767 2,178,432 Outside Nigeria - -
2,000,767 2,178,432
(b) Analysis of turnover 2010 2009
Turnover is made up of: N'000 N'000Veg drugs 494 3,824 Fish feeds 11,435 11,465 Mash/concentrate 1,983,536 2,162,564 Full fat 1,545 - Raw materials 3,757 579
2,000,767 2,178,432
(c) Segment reporting Mash/Analysis: Vet drug Fish Feeds Concentrate Full fat Raw Materials Total
N'000 N'000 N'000 N'000 N'000 N'000(i) By product - 2010
Turnover 494 11,435 1,983,536 1,545 3,757 2,000,767 Cost of sales (475) (10,654) (1,717,907) (1,377) (3,537) (1,733,950) Gross profit 19 781 265,629 168 220 266,817 2010 % Gross profit to sales 3.8% 6.8% 13.4% 10.9% 5.9% 13.3%
By product - 2009Turnover 3,824 11,465 2,162,564 - 579 2,178,432 Cost of sales (3,491) (10,337) (1,923,790) - (461) (1,938,079) Gross profit 333 1,128 238,774 - 118 240,353 2009 % Gross profit to sales 8.7% 9.8% 11.0% - 20.4% 11.0%
(ii) By geographical location Head office Ikeja Benin Aba Kaduna Total within Nigeria N'000 N'000 N'000 N'000 N'000 N'000Vet Drugs - - 494 - - 494 Fish Feeds 11,435 - - - - 11,435 Mash/concentrates - 658,491 507,354 566,082 251,609 1,983,536 Full fat - - 1,545 - - 1,545 Raw Materials - 3,757 - - - 3,757
Total 11,435 662,248 509,393 566,082 251,609 2,000,767
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Other Income 2010 2009 N'000 N'000
3. Interest income 6
3
Sale of scrap 3,240
988
Rent received 27
54
Laboratory Income 1,365
1,212
Weighing Income 3,850
5,485
Insurance claims received 3,888
-
Provisions no longer required 4,940
3,556
Trade debts recovered 19
-
Other debts recovered -
219
Investment income 25
-
Truck income 286
-
Profit-Diesel sales 98
-
Profit on disposal of fixed assets 628
-
18,372
11,517
Interest payable and similar charges 2010 2009 N'000 N'000
4. Interest on loans 47,952
29,398
Interest on overdraft 13,617
21,492
Bank charges 4,926
4,133
Interest on lease 175
630
66,670
55,653
Profit before taxation 2010 2009
5(i) Profit before taxation is arrived at N'000 N'000after charging:Directors' remuneration 5,723
5,040
Depreciation of fixed assets 31,143
31,379
Auditors ' fees 3,400
3,000
Profit on disposal of fixed assets 628
4,300
and after crediting:Interest received 6
3
(ii) Emoluments of Directors and employees: 2010 2009(a) The aggregate emoluments of directors were: N'000 N'000
Fees 520
520
Other emoluments, including pension contribution 5,723
5,040
(b) totalled 120
120
(c)
paid director amounted to 5,203
4,840
(d) The table below shows the number of directors of the Company (excluding the Chairman) whose remuneration (excluding pension contributions) in respect of services to the Company fell within the bands shown:
2010 2009 No. No.
4,840,001 - 5,300,000 1
1
The emoluments (excluding pension contributions) of the highest
The Chairman's emoluments (excluding pension contributions)
11
iii) Staff numbers and cost 2010 2009
No. No.(a) The average number of persons employed
(excluding directors) in the Company during the year was 92
92
(b) The aggregate payroll costs of these persons were as follows : N'000 N'000
Wages and Salaries, including staff bonus 119,069
108,833
Contribution to pension schemes 12,749
13,586
131,818
122,419
(c)
2010 2009 No. No.
Up to - N200,000 38
55
N200,001 - N210,000 7
5
N210,001 - N230,000 7
- N230,001 - N240,000 1
8
N250,001 - N300,000 18
7
N300,001 - N400,000 12
11
N410,001 - N460,000 4
4
N600,001 - N750,001 1
-
N750,001 and above 4
2
92
92
Taxation 2010 2009
6(a) Per profit and loss account: N'000 N'000Income tax 13,612
7,336
Education tax 1,878
1,467
Deferred tax 14,653
-
Over provision for income tax in prior years (5,603)
-
24,540
8,803
(b)Per balance sheet 2010 2009
Balance at 1 January : N'000 N'000Income tax 29,807
31,481
Education tax (335)
-
29,472
31,481
Payments during the year:Income tax (7,336)
(9,010)
Education tax (1,467)
(1,802)
Provision for the year:Income tax 13,612
7,336
Education tax 1,878
1,467
Over provision for income tax in prior years (5,603)
-
Balance at 31 December 30,556
29,472
(c) The amount provided as income tax on the profit for the year has been computed on the basis of the income tax rate of 30% in accordance with Company Income Tax Act, CAP C21 LFN 2004.
(d) Education Tax is computed at 2% of assessable profit in line with Education Tax Act, CAP E4 LFN 2004.
The table below shows the number of employees of the Company other than Directors whose earnings duringthe year, fell within the ranges shown below:
12
(e) Movement on deferred tax: 2010 2009
N'000 N'000Balance at 1 January 7,656
7,656
Charge for the year 14,653
-
Balance at 31, December 22,309
7,656
Deferred taxation
(f) As a result of the accelerated rate of capital allowances the net book value of the Company's fixed assets at the balance sheet date exceeded their corresponding tax written down value by N74,363,174 (2009 : N25,520,000) a decrease during the yearof N647,481 (2009: N22,522,010). Provision has been made during the current year for the tax that will become payale in in future upon reversal of this timing difference as a result unutilised capital allowances.
Basic earnings per ordinary share 2010 2009
7. Basic earnings per share is calculated by dividing the net profit '000 '000attributable to shareholders by the weighted average number of ordinary shares in issue during the year and ranking for dividend.
Profit for the year attributable to shareholders N28,304 N29,948
Weighted average number of ordinary shares in issue 1,200,000
1,200,000
Basic earnings per share 2.36kobo 2.49kobo
Fixed assets
8(a) Fixed assets comprise: Leasehold Machinery Furniture
land and and & fittings Motor Computer Constructionbuildings equipment Vehicles equipment in progress Total
N'000 N'000 N'000 N'000 N'000 N'000 N'000Cost/valuation:At 1 January 2010 262,429
110,754
17,324
49,260
17,313
285
457,365
Additions 1,974
6,867
1,542
10,104
-
73,502
93,989
Disposals -
(303)
-
(8,443)
(3)
- (8,749)
Transfers in/(out) (Note 9) -
-
-
2,083
385
(385)
2,083
At 31 December, 2010 264,403
117,318
18,866
53,004
17,695
73,402
544,688
DepreciationAt 1 January 2010 75,428
49,981
8,451
18,338
14,364
-
166,562
Charge for the year 7,881
10,470
8,033
1,650
2,135
-
30,169
On disposals -
(303)
-
(6,911)
-
-
(7,214)
Transfers in/(out) (Note 9) -
-
-
1,153
-
-
1,153
At 31 December, 2010 83,309
60,148
16,484
14,230
16,499
-
190,670
Net book values at:31 December, 2010 N181,094 N57,170 N2,382 N38,774 N1,196 N73,402 N354,018
Cost/valuation:At 1 January 2009 253,483
96,242
15,348
50,841
17,007
16,206
449,127
Additions 1,149
8,527
1,201
10,652
306
711
22,546
Disposals -
(1,949)
(126)
(12,233)
-
-
(14,308)
Transfers in/(out) 7,797
7,934
901
-
-
(16,632)
-
At 31 December, 2009 262,429
110,754
17,324
49,260
17,313
285
457,365
DepreciationAt 1 January 2009 67,581
40,794
6,840
17,283
11,907
-
144,405
Charge for the year 7,847
9,935
1,709
8,363
2,457
-
30,311
On disposals -
(748)
(98)
(7,308)
-
-
(8,154)
Transfers in/(out) -
-
-
-
-
-
-
At 31 December, 2009 75,428
49,981
8,451
18,338
14,364
-
166,562
Net book values at:31 December, 2009 N187,001 N60,773 N8,873 N30,922 N2,949 N285 N290,803
On 31 March 1999, leasehold land and buildings were revalued by Messrs Yinka Sonaike and Company, Estate Surveyors and Valuers. The revaluation was based on existing use at open market value. The surplus arising on revaluation of N229,346,000 has been credited to revaluation reserve (note 21).
13
9. Leased Assets 2010 2009
N'000 N'000Motor Vehicles:CostAt 1 January 4,873
4,633
Additions -
240
Transfer out (Note 8) (2,083)
-
At 31 December 2,790
4,873
Depreciation:At 1 January 1,806
738
Charge for the year 974
1,068
Transfer out (Note 8) (1,153)
-
At 31 December 1,627
1,806
Net book Value N1,163 N3,067
Investments Cost Market value Cost Market value
10. Quoted N'000 N'000 N'000 N'000Ordinary shares at cost 19,999
19,999
19,999
19,999
Less: Diminution -
(8,568)
-
(11,530)
19,999
11,431
19,999
8,469
Stocks 2010 2009 N'000 N'000
11. Raw materials and consumables 498,158
392,560
Finished goods 4,636
22,579
Engineering spares 17,400
13,145
Stocks - in- transit 620
1,161
Diesel 583
924
Provision for stock obsolescence (8,015)
(8,015)
513,382
422,354
The Company has a finance lease obligation on motor vehicles with Stanbic IBTC Bank Plc to the tune of N2.7 million (2009 :N4.87 million) during the year. The balance due as at 31 December 2010 is as disclosed under obligations under financelease in note 16 of the financial statements.
2010 2009
14
Trade debtors 2010 2009 N'000 N'000
12(a) Trade debtors 182,479
106,546
Provision for doubtful debts (28,406)
(12,941)
154,073
93,605
Other debtors and prepayments 2010 2009
N'000 N'000(b) Prepayments 7,344
4,490
Staff loans and advances 1,121
6,344
Other debtors 9,856
20,058
18,321
30,892
Borrowings 2010 2009 N'000 N'000
13(a) Bank overdraft 394,967 181,708
(b) The Company obtained a facility of N100 million from Guaranty Trust Bank Plc
(c) The Company has an advance facility of N100 million with Stanbic IBTC Bank Plc, out of which N51.34 million has been utilised.
(d) The Company also has an overdraft facility of N50 million with Stanbic IBTC Bank, out of which N32.6 million has been utilized.
(e) The Company has a short term loan facility of N300 million with Stanbic IBTC Bank PlcThe facility is secured by:
Pari-passu debenture with Guaranty Trust Bank Plc over fixed and floating assets of the Company with the Bank's Interest noted for N200 million.
The facilities were obtained to augment the working capital requirement of the Company for the day to day raw material procurement and other running overhead costs.
Creditors and accruals 2010 2009 N'000 N'000
14. Trade creditors 151,107
177,018
Accruals (Note 14(a)) 24,957
27,615
Other creditors (Note 14(b)) 17,929
23,826
Deferred income -
499
193,993
228,958
Lease obligations (Note 16) -
94
193,993
229,052
2010 2009 N'000 N'000
a) Accruals Ex-Staff balances 7,835
11,989
Provision for interest 2,936
22
Industrial Training Fund 2,878
3,710
Accrued salary 6,913
5,090
Professional fees 2,826
3,633
Other accrued expenses 1,569
3,171
24,957
27,615
2010 2009 b) Other creditors N'000 N'000
Withholding tax 14,562
16,590
Staff cooperative deduction 97
157
NSITF 83
83
Pay as you earn (PAYE) 736
420
Sundry creditors 2,451
6,576
17,929
23,826
15
Dividend payable
2010 200915. The movement on dividend payable is as follows: N'000 N'000
At 1 January 101
101
Declared during the year -
-
Payment during the year -
-
At 31 December 101
101
Obligations under finance lease 2010 2009
N'000 N'00016. At 1 January 1,647
2,717
Additions in the year -
240
Initial deposit paid -
(287)
Repayments in the year (871)
(1,023)
At 31 December 776
1,647
Analysed as follows:Payable within one year (Note14) -
94
Payable after more than one year 776
1,553
776
1,647
This amount represents outstanding obligations under Finance leases.
Provision for retirement benefits 2010 2009 N'000 N'000
17. Pension (Note 17a) 1,557
1,817
Provision for staff gratuities (Note 17b) 10,235
27,155
11,792
28,972
(a) The movement on the Pension account during the year was as follows: 2010 2009
N'000 N'000At 1 January 1,817
3,722
Provision for the year 12,749
13,586
Payment in the year (13,009)
(15,491)
At 31 December 1,557
1,817
(b)
The movement on the account during the year was as follows: 2010 2009
N'000 N'000At 1 January 27,155
35,714
Provision during the year -
-
Payments to retirees during the year (16,920)
(8,559)
At 31 December 10,235
27,155
Short term loan 2010 2009 N'000 N'000
18. At 1 January -
25,000
Additions -
-
Repayments -
(25,000)
At 31 December -
-
Provision for staff gratuities comprises terminal benefits payable to employees on retirement or resignation ofemployment. The staff gratuity provision for the year was Nil (2009 : Nil). The provision was nil as a result ofmanagements decision to discontinue the scheme and concentrate on pension in conformity with the Pension Reform Act, 2004.
16Share capital
2010 200919. Authorised '000 '000
ValueOrdinary shares of 50kobo each N1,000,000 N1,000,000
NumberOrdinary shares of 50kobo each 2,000,000 2,000,000
Issued and fully paidValueOrdinary shares of 50kobo each
N600,000
N600,000NumberOrdinary shares of 50kobo each 1,200,000
1,200,000
Share premium 2010 2009 N'000 N'000
20. At 31 December 8,028
8,028
Revaluation reserves 2010 2009 N'000 N'000
21. At 1 January 229,346
229,346
Deferred capital gains tax -
-
At 31 December 229,346
229,346
Revenue reserves 2010 2009
22. The movement in revenue reserves is analysed below: N'000 N'000At 1 January (443,514)
(473,462)
Profit and loss account 28,304
29,948
At 31 December (415,210)
(443,514)
Reconciliation of net income to net cash 2010 2009 provided by operating activities N'000 N'000
23. Profit after taxation 28,304
29,948
Adjustment for items not involving the movement of funds:Depreciation 31,143
31,379
(Profit)/loss on disposal of fixed assets (628)
4,300
Asset written off 3
-Other adjustments:Interest received (6)
(3)
Interest paid 66,670
55,653
(Write back)/Provision for diminution in investments (2,962)
3,516
122,524
124,793
Changes in working capital(Increase)/decrease in stocks (91,028)
85,382
(Increase)/decrease in trade debtors & prepayments (47,897)
825
Decrease in trade creditors and accruals (34,965)
(77,205)
Increase/(Decrease) in income tax payable 1,084
(2,009)
Increase in deferred taxation 14,653
-Net decrease in retirement benefits (17,180)
(10,464)
(52,809)
121,322
Cash and cash equivalents 2010 2009 N'000 N'000
24. Borrowings (394,967)
(181,708)
Cash at bank and in hand 24,270
23,184
(370,697)
(158,524)
17
Contingent liabilities
25.
Capital commitments
26. There were no capital commitments during the year(2009 : Nil).
Post balance sheet events
27.
Comparative figures
28.
The Directors are of the opinion that there is no post balance sheet event which could have had a material effecton the state of affairs of the Company as at 31 December 2010 and on the financial performance for the yearended on that date, which has not been adequately provided for or disclosed in these financial statements.
Certain comparative figures have been restated where necessary in order to provide a more meaningfulcomparison.
In the opinion of the Company's solicitors, there were contigent liabilities at the balance sheet date totalling N0.98million (December 2009 - N4.25 million) in the ordinary course of business arising out of litigation. Provision hasnot been made in these financial statements in respect of these claims as the Directors are of the opinion that theCompany has filed counter claims and has a good defence.
18
LIVESTOCK FEEDS PLC
STATEMENT OF VALUE ADDED
FOR THE YEAR ENDED 31 DECEMBER 2010
2010 2009 N'000 % N'000 %
Turnover 2,000,767 2,178,432 Other income 18,372 11,517
2,019,139 2,189,949 Bought-in-materials and services: - Foreign - - - Local (1,736,664) (1,941,747)
Value added 282,475 100 248,202 100
% value added 14% 11%
Applied as follows: % %
To employees : as salaries and labour related expenses 131,818 47 122,419 49
To providers of funds: as interest expenses 66,670 24 55,653 22
To Government : as Company taxes 24,540 10 8,803 4 Shareholders as dividend - - -
Retained for the Company's future: for assets replacement ( depreciation) 31,143 11 31,379 13 for expansion 28,304 8 29,948 12
282,475 100 248,202 100
The value added represents the wealth created through the use of the Company's assets by itsemployees.
19
LIVESTOCK FEEDS PLC
FIVE -YEAR FINANCIAL SUMMARY
31 DECEMBER 2010
Balance sheet December December December December March
2010 2009 2008 2007 2007
Capital and reserves N'000 N'000 N'000 N'000 N'000
Share capital 600,000 600,000 600,000 600,000 12,380
Share premium 8,028 8,028 8,028 8,028 -
Revaluation reserve 229,346 229,346 229,346 229,346 206,411
General reserve (415,210) (443,514) (473,462) (519,203) (553,873)
Shareholders' funds 422,164 393,860 363,912 318,171 (335,082)
Net assets:
Fixed assets 354,018 290,803 304,722 260,230 209,067
Finance lease 1,163 3,067 3,895 1,567 1,783
Investments 11,431 8,469 11,986 3,200 -
Net current Assets / (liabilities) 90,429 129,702 92,100 90,009 (480,550)
Provision for liabilities and charges (34,877) (38,181) (48,791) (36,835) (65,382)
422,164 393,860 363,912 318,171 (335,082)
Profit and loss account
Turnover 2,000,767 2,178,432 2,368,590 931,976 581,762 Profit before taxation 52,844 38,751 64,208 37,922 8,840 Taxation (24,540) (8,803) (18,467) (3,252) (516) Profit after taxation 28,304 29,948 45,741 34,670 8,324