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PAINTS AND COATINGS MANUFACTURERS
NIGERIA PLC [RC 406117] Annual Reports and Accounts
For the Year Ended 31st December 2013
PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
CONTENTS Page
Director's Resonsibility For Financial Reporting 4
Independent Auditor's Report 5
Result At A Glance 6
Vision and Mission Statement 7
Directors, Professional advisers etc. 8
Notice of Annual General Meeting 9
Chairman's Statement 10
Report of the Directors 11
Report of the Audit Committee 15
Statement of Comprehensive Income 16
Statement of Financial Position 17
Statement of Change in shareholders equity 18
Statement of Cashflow 19
Statement of Earnings Per Share 20
Accounting policies and notes to the financial statements
1 Nature and Description of reporting entity 21
2 Statement of compliance 21
3 Foreign currency translation 21
4 Profit and ordinary activity before taxation 21
5 New and revised IFRSs in issue 22
6 Critical Accounting Judgements and Key Sources of estimation uncertainty 27
7 Revenue Recognition 29
8 Cost of goods sold and other expenses 29
9 Prepayments and accrued income 29
10 Accruals and deferred income 29
11 Change in accounting policies 29
12 Inventories 29
13 Cash and cash equivalent 30
14 Provisions, accruals and other current liabilities 31
15 Reimburseable 31
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
16 Employee benefits 31
17 Segment information 32
18 Property, plant and equipment 33
19 Share capital 37
20 Share Premium 37
21 Retained Earnings 37
22 Revaluation reserve 38
23 Income tax 39
24 Events after the reporting date 40
25 Dividends paid and proposed 40
26 Trade and other receivables 40
27 Directors and employees 41
28 Related party transactions 42
29 Contingent liability 42
30 Loan favouring directors and officials 42
31 Comparatives 42
32 Approval of financial statements 42
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
DIRECTORS'S STATEMENT OF RESPONSILITY FOR FINANCIAL REPORTING
The Directors of Paints and Coatings Manufacturers Nigeria Plc are responsible for preparation, presentation and
integrity of the accompanying financial statements and all other information in the Annual Report.
This responsibilty includes the following :
a Keeping proper accounting records that disclose, with reasonable accuracy that the financial position
of the company comply with the requirements of the Companies and Allied Matters Act CAP C20 LFN 2004.
b The selection and consistent application of appropriate accounting principles and methods in additions to making
judgements and estimates necessary to prepare the financial statements in accordance with International
Financial Reporting Standards (''IFRS'') as issued by the International Accounting Standards Board (''IASB'').
c To design a system of internal control to ensure that the assets of the company are safeguarded and that
relevant and reliable financial information is produced.
The Directors of the company accepts responsibility for the Annual Report and Financial Statements and the
accompanying notes, which have been prepared using appropriate accounting policies supported by reasonable and
prudent judgement and estimates and in conformity with International Financial Reporting Standards (''IFRS'') and the
requirements of the Companies and Allied Matters Act, CAP C20 LFN 2004.
Lagos, Nigeria
2 0 th March 2014
[signed] [signed]
Michael Thompson Wale Jubril
FRC/2014/CISN/00000006703
««««««««««« «««««««««««
Vice Chairman/(CEO) Executive Director (Finance)
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
Independent Auditors' Report
To the Shareholders of Paints and Coatings Manufacturers Nigeria Plc :
We have audited the accompanying financial statements of Paint and Coating Manufacturers Nigeria Plc, which
comprise the Statement of Financial Position, Statement of Comprehensive income, Statement of change in equity and
statement of cashflow and notes, comprising a summary of significant accounting policies and other explanatory
information for the year ended 31st December 2013 set out on pages 17 to 20 which have been prepared on the basis
of accounting policies and notes set out on pages 20 to 37.
Respective responsibilities of Directors and Auditors
The Directors of the company are responsible for the preparation and fair presentation of these Financial
Statement in accordance with International Financial Reporting Standards (''IFRS''), and with the requirements
of the Companies and Allied Matters Act, CAP C20 LFN 2004. This responsibility also includes designing and
maintaining internal control relevant to the preparation and fair presentation of financial statements that are free
from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies;
and making accounting estimates that are reasonable in the circumstances.
Auditors responsibility
Our responsibility is to express an independent opinion on the financial statements based on our audit.
We conducted our audit in accordance with Nigeria Auditing Standards. Those standards requires that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the
financial statement are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depends on our judgement, including the assessment of the
risks of material misstatement in the financial statement, whether due to fraud or error.
In making those risk assessments, we consider internal control relevant to the entity's presentation and fair
presentation of the financial statement inorder to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opionion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by the directors, as well as evaluating the overall presentation of the financial statements.
We planned and performed our audit so as to obtain all the information and explanation which we considered necessary
in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from
material misstatements, whether caused by fraud or other irregularities or errors. We believe that the audit evidence we
have obtained during our audits is sufficent and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, and are in agreement with the books of accounts, it also gives a true
and fair view of the financial position of Paints and Coatings Manufacturers Nigeria Plc and its financial performance
and cash flows for the year then ended 31st December 2013,and in accordance with the Companies and Allied Matters Act,
CAP C20 LFN 2004, the Financial Reporting Council of Nigeria Act No. 6, 2011 and the International Financial Reporting
Standards. Olumuyiwa Olokun & Co Olumuyiwa Olokun-Obafemi FCA/
FRC/2013/ICAN/00000001935
Lagos, Nigeria For: OOC Chartered Accountants
Dated: 25-03-2014
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
RESULTS AT A GLANCE Year Ended Year Ended
31st Dec., 2013 31st Dec., 2012 Variance
=N= =N= %
Turnover 3,090,744,574 2,908,192,874 6%
Profit before Taxation 292,460,019 275,025,968 6%
Total Comprehensive Income 287,849,599 252,622,593 14%
Total assets 2,337,220,475 1,995,093,224 17%
Authorised Share Capital 600,000,000 600,000,000 -
Issued and fully paid Share Capital 396,457,128 396,457,128 -
Per 50K Share data based on 792,914,256 Ordinary shares of 50K each
(2012: 792,914,256 Ordinary shares of 50k each)
Net Assets Per Share 2.95 2.52 17%
Earnings Per Share (Basic) 0.36 0.32 14%
Dividend Per Share (Basic) 0.08 Kobo 0.12 Kobo
(2013 Proposed Dividend)
Stock Exchange quotation/(Share Price)
as at 31st December 2013 (Kobo) 1.9 1.96 -3%
Dividends Covers (times) 23.75 16.33
Number of employees 120 113 6%
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
VISION AND MISSION STATEMENT
OUR VISION
To be the preferred world-class manufacturer and distributor of Paints & Coatings to the Nigerian Marketplace.
OUR MISSION
To produce and supply world class quality products efficiently to our customers through the teamwork of
highly skilled and motivated staff.
To be a good corporate citizen known for high ethical standards
OUR CORE VALUE
Integrity: - In all our dealings with one customers, service providers, staff and all stakeholders, we uphold
moral excellence, honesty, wholesomeness and sincerity.
We accept responsibilities and hold ourselves accountable.
Ingenuity: - we are constantly driven by a strong desire to create value through creative thinking, use
of technology and pragmatic approach to overcoming challenges to deliver value.
Protect People & The Environment:-The sustenance of good health and safety in the work place for our
staff and the protection and maintenance of our assets and the environment are matters of primary concern
to us.
Efficient Performance: - We are committed to excellence in everything we do and we strive to continually
improve in all our processes and we are passionate about ensuring a high standard of personal
hygiene amongst our staff as well as a sustained clean workplace.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
DIRECTORS, PROFESSIONAL ADVISERS ETC.
DIRECTORS Chief S.I.C. Okoli - C hairman
Michael Thompson (British) - V ice Chairman/CEO
Wale Jubril - E xecutive Director (Finance)
Ademola Laniyan - E xecutive Director
(Legal and Corporate)
Bassam Dina - D irector
Michelle Knupfer (British) - D irector
Olabanji Kazeem - A lternate Director
COMPANY SECRETARY Ademola Laniyan Esq
AND LEGAL ADVISERS 18/24 Ajisegiri Street, Shogunle Oshodi
Lagos State, Nigeria.
REGISTERED OFFICE 18/24 Ajisegiri Street, Shogunle Oshodi
Lagos State, Nigeria.
REGISTRATION NO. 406117
REGISTRAR Meristem Registrars Limited
305, Herbert Macaulay Way, Yaba, Lagos.
P.O.Box 51585, Ikoyi, Lagos.
AUDITORS OOC Chartered Accountants
5 Oresola Close
Crystal Estate, Illupeju Lagos.
BANKERS Access Bank Plc
Citibank Nigeria Plc
Guaranty Trust Bank
Keystone Bank Plc
Zenith International Bank
CORPORATE HEAD OFFICE 18/24 Ajisegiri Street
Shogunle, Oshodi
Lagos State, Nigeria.
Tel: (01) 740 4044, 740 5183, 740 5184
www.pcmnigeria.com
BRANCH Port harcourt branch
99 Rivoc Road, Trans Amadi Port Harcourt, Rivers State
Abuja Branch
Suite 1-2 Saham Plaza, 10 Alexandra Crescent
(Behind Banex Plaza), Wuse 11 Abuja.
Page 8
Notice of Annual General Meeting
Page 9
Chairman's Statement
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
REPORT OF THE DIRECTORS
The Directors present to the distinguished members of the company this annual report together with the audited financial
statements of the company for the year ended 31st December 2013.
RESULTS
The company results at a glance for the year ended 31st December 2013 are set out on page 3.
LEGAL STATUS
The company was incorporated in Nigeria as a private limited liability company in 2001, and was converted to a Public
Limited Liability Company (Plc) in 2008. The name of the company was changed from Protective Coatings Distributors
Nigeria Limited (PCDN) to Paints and Coatings Manufacturers Nigeria Plc (PCMN Plc) on 21st November, 2008.
FINANCIAL REPORTING COUNCIL
The company has been registered with the financial reporting council of Nigeria with registration number
FRC/2013/0000000000563.
LISTING ON THE NIGERIA STOCK EXCHANGE
The Company was listed by introduction on the Nigeria Stock Exchange on 2nd November 2010.
PRINCIPAL ACTIVITIES
The company is engaged in carrying out Manufacture of Chemicals, Marine, Protective, industrial, Decorative and
Architectural coatings and paints and related products.
DIRECTORS AND DIRECTOR'S INTEREST
a) The Directors who held office during the year and to the date of this report are set out below :
NAME NATIONALITY DESIGNATION
Chief S.I.C. Okoli Chairman
Michael Thompson British Vice Chairman/CEO
Wale Jubril Executive Director (Finance)
Ademola Laniyan Executive Director (Legal and Corporate)
Bassam Dina Director
Michelle Knupfer British Director
Olabanji Kazeem Alternate Director
b) Directors' Interest in the Issued Share Capital of the Company
The Director's interest in the shares of the company as recorded in the Register of members as at 31st December 2013
are as follows :
Directors Direct Holding Indirect Holding Direct Holding Indirect Holding
Chief S.I.C. Okoli - 1 0 6 ,145,618 - 1 0 6 ,145,618
Michael Thompson (British) - 2 8 8 ,000,000 - 2 8 8 ,000,000
Wale Jubril 1 4 ,459,300 1 4 ,459,300
Ademola Laniyan 1 1 ,750,000 - 1 1 ,750,000 -
Bassam Dina 1 9 2 ,000,000 - 1 9 2 ,000,000 -
Olabanji Kazeem 2 ,000,000 - 2 ,000,000 -
Total Holdings 2 2 0 ,209,300 3 9 4 ,145,618 2 2 0 ,209,300 3 9 4 ,145,618
As at 31st Dec., 2013
No. of Shares
As at 31st Dec., 2012
No. of Shares
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
c) Indirect holding
Chief S.I.C. Okoli has indirect interests in the shares of Jenete Iloabanafo Investment Ltd., who has 106,145,618 ordinary
shares (2012 : 106,145,618 ordinary shares) in the issued share capital of the company.
Mr. Michael Thompson has indirect interests in the shares of Semeli Limited BVI, who has 288,000,000 ordinary shares
(2012 : 288,000,000) in the issued share capital of the company.
DIRECTOR'S INTEREST IN CONTRACT
Mr Ademola Laniyan, the Executive Director Legal and Corporate Services a partner in Laniyan and Ibrahim and Co.
also acts as Legal Advisers/Company Secretary to the company.
Apart from the above, none of the Directors has notified the Company for the purpose of section 277 of the Companies and
Allied Matters Act, CAP C20 LFN 2004 of any declarable interest in contracts with which the Company was involved as
at 31st December 2013.
RECORDS OF DIRECTOR'S ATTENDANCE AT MEETINGS
Pursuant to and in accordance with section 258(2) of the Companies and Allied Matters Act, CAP C20 LFN 2004 the records
of directors' attendance at Board meetings during the year under review will be made available for inspection at the
Annual General Meeting.
MAJOR SHAREHOLDERS
According to the Register of Members as at 31st December 2013, the following shareholders of the company held more
than 5% of the issued ordinary share capital of the company.
2013 2012
Name # of Shares # of Shares % Holding
Semeli Ltd (BVI) 2 8 8 ,000,000 2 8 8 ,000,000 3 6 .3 %
Bassam Dina 1 9 2 ,000,000 1 9 2 ,000,000 2 4 .2 %
Jenete Iloabanafo Investment Limited 1 0 6 ,145,618 1 0 6 ,145,618 1 3 .4 %
Stanbic Nom./AMCON/Intercontinental Bank 5 8 ,662,500 5 8 ,662,500 7 .4 %
ANALYSIS OF SHAREHOLDING
The analysis of shareholding is as stated below:
No. of holdings No. of Shareholders % of Shareholders No. of Holding % of Holding
0 - 5 0 0 ,000 554 9 0 .8 % 4 1 ,387,913 5 .2 %
5 0 0 ,001 - 1 ,000,000 30 4 .9 % 2 3 ,344,732 2 .9 %
1 ,000,001 - 1 0 ,000,000 20 3 .3 % 5 7 ,164,193 7 .2 %
1 0 ,000,001 - 100,000,000 3 0 .5 % 8 4 ,871,800 1 0 .7 %
1 0 0 ,000,001 - 288,000,000 3 0 .5 % 5 8 6 ,145,618 7 3 .9 %
Total 610 100% 7 9 2 ,914,256 100%
FIXED ASSETS
Information relating to changes in fixed assets during the year is shown in note 1 on page 35. In the opinion of the Directors,
the fair value of the company's properties is not substantially less than the value shown in the financial statements.
CORPORATE GOVERNANCE
The board is actively involved in the running of the company. The Directors are involved among other things, in keeping
proper accounting records which disclose with reasonable accuracy and transparency at anytime, the financial status
of the company and ensure that the accounts comply with the relevant provisions of the Laws.
The Board is also responsible for safeguarding the assets of the company by taking reasonable steps for the prevention
and detection of fraud and other irregularities.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
COMPANY QUALITY POLICY
The Company strives to be world-class supplier of Protective, Marine, Industrial, Decorative, Automotive Coating Systems,
Inks and Associated services in order to meet or exceed the expectations of it's customers.
The primary quality related objectives of the Company are to:
. Identify, understand and comply with and meet or exceed the requirements of our customer.
. Continually improve through the elimination of non - conformances;
. Comply with the relevant statutory and regulatory requirements;
. Eliminate or reduce all forms of wastages.
ISO STANDARDS CERTIFICATION
The company has attained the following ISO standards certification :
ISO 9001: 2008 - Quality Certification
ISO 14001:2004 - Environmental Management certification
ISO 18001:2007 - Health & Safety certification
DONATIONS
The following donations was made during the year under review :
=N=
Igbobi College Old Boys Association 1 0 0 ,000
Eket Youth Development projects 5 0 0 ,000
Other donations includes the followings:
a) paints to Nigeria Airforce Secondary School Ikeja to recoat the water tank stand. b) Public borehole water to the community.
SUPPLIERS
The following major suppliers used by the company are listed below:
International Paints UK
Avon Crown Caps
Chizzy Nigeria Limited
Comart Nigeria Ltd
Nycil Limited Otta
Regatta Industries
GUARANTEES AND OTHER FINANCIAL COMMITMENTS
a The Company did not charge any of its assets to secure liabilities to third parties.
b The Directors are of the opinion that all known liabilities and Commitments have been taken into consideration in the
preparation of the financial statements.
EMPLOYMENT AND EMPLOYEES
The company's employees are regularly provided with information on matters that are of concern to them as employees.
Such information is either passed to them through regular meetings with employees and/or through notices pasted on notice
board.
a Employment of disabled persons
It is the policy of the company that full and fair consideration be given to applications for employment by the company
including those from disabled person having regard to their particular aptitude, skills and ability.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
b Health, safety at work and welfare of employees.
Health and safety regulations are in force within the company's premises, warehouse and manufacturing floor.
The employees are aware of the existing regulations. The company provides medical insurance to all staff with
accredited health management organisations (HMOs).
c Employee Training
Management, professional and technical experience are the company's major assets and investment in developing
such skills continues.
AUDITORS
In accordance with Section 357(2) of the Companies and Allied Matters Act, CAP C20 LFN 2004,our auditors, OOC Chartered
Accountants have indicated their willingness to continue in office.
A resolution will be proposed authorising the Directors to determine their remuneration.
BY ORDER OF THE BOARD
Ademola Laniyan Esq
FRC/2014/NBA/00000006853
Company Secretary
Page 14
Report of the Audit Committee
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31st December 2013
2013 2012
NOTES =N= =N=
Revenue 6 3 ,090,744,574 2 ,908,192,874
Cost of goods sales 7 (1,991,460,220) (1,919,904,813)
GROSS PROFIT 1 ,099,284,354 9 8 8 ,288,061
Administrative expenses 7 (792,742,985) (699,769,005)
Selling and distribution expenses 7 (21,269,392) (18,490,414)
Trading operating profit 2 8 5 ,271,977 2 7 0 ,028,642
Other income 1 0 ,983,607 1 8 ,225,629
Finance cost (7,219,520) (19,613,995)
Bad debt recovered 2 ,108,548 4 ,986,423
Profit on disposal of fixed assets - 4 3 4 ,234
Interest received 1 ,315,407 9 6 5 ,035
PROFIT BEFORE TAXATION 2 9 2 ,460,019 2 7 5 ,025,968
Tax expenses 22 (4,610,420) (7,875,624)
Net Earnings 2 8 7 ,849,599 2 6 7 ,150,344
Other Comprehensive Loss
Capital Gain Tax on impairment - 1 ,824,089
Prior year income tax - (16,351,840)
Other Comprehensive Income/(loss) for the year - (14,527,751)
TOTAL COMPREHENSIVE INCOME 2 8 7 ,849,599 2 5 2 ,622,593
The accounting policies and notes to the accounts form part of these financial statements.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
STATEMENT OF FINANCIAL POSITION as at 31 December 2013
2013 2012
Assets NOTES =N= =N=
Current Assets
Cash and cash equivalents 12 8,831,618 67,554,078
Trade receivables 25 210,638,560 184,444,656
Inventory and Goods in Transit 11 909,739,286 1,134,921,261
Prepayments and accrued income 8 677,328,901 70,632,503
Total Current Assets 1,806,538,365 1,457,552,498
Non-Current Assets
Property, Plant and Equipment 17 295,458,415 324,931,554
Deferred Income Taxes 235,223,695 212,609,172
Total Non-Current Assets 530,682,110 537,540,726
Total Assets 2,337,220,475 1,995,093,224
Equity and Liabilities
Equity attributable to owners of the company
Share Capital 18 396,457,128 396,457,128
Share Premium 19 415,071,706 415,071,706
Revaluation Reserve 20 113,005,773 113,005,773
Retained Earnings 20 596,976,125 404,276,237
Total Equity 1,521,510,733 1,328,810,844
Non Current Liability
Provision for bad debt - 2,270,164
Deferred Tax liability 22 12,758,874 12,758,874
Total Non Current Liabilities 12,758,874 15,029,038
Current Liability
Trade payable 542,107,331 62,695,195
Sundry creditors and accruals 13 147,479,791 73,864,831
Other payable 13 57,119,920 44,663,104
Customer deposits 43,757,783 462,154,588
Taxation 22 12,486,044 7,875,624
Total Current Liabilities 802,950,869 651,253,342
Total Liabilities 815,709,743 666,282,380
Total Equity and Liabilities 2,337,220,475 1,995,093,224
The accounting policies and notes to the accounts form part of these financial statements.
Approved on Behalf of the Board
[signed] [signed]
Michael Thompson Wale Jubril
FRC/2014/CISN/00000006703
««««««««««« «««««««««««
Vice Chairman (CEO) Executive Director (Finance)
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
STATEMENT OF CHANGE IN SHAREHOLDER'S EQUITY For the year ended 31st December 2013
2012 Share Capital
Share
Premium
Retained
Earnings
Revaluation
Reserve Total Equity
N N N N N
Balance at January 1, 2012 3 9 6 ,457,128 4 1 5 ,071,706 2 3 5 ,302,392 1 3 1 ,246,664 1 ,178,077,890
Total comprehensive income for the year 2 5 2 ,622,593 2 5 2 ,622,593
Dividends declared/Paid (2011 ) (63,433,140) (63,433,140)
Capitalisation of Inventory cost (20,215,608) (20,215,608)
Impairment of Motor Vehicles (7,381,108) (7,381,108)
Inpairment of Furniture and Fittings (10,859,782) (10,859,782)
Balance at 31st Dec., 2012 3 9 6 ,457,128 4 1 5 ,071,706 4 0 4 ,276,237 1 1 3 ,005,773 1 ,328,810,844
2013 Share Capital
Share
Premium
Retained
Earnings
Revaluation
Reserve Total Equity
N N N N N
Balance at January 1, 2013 3 9 6 ,457,128 4 1 5 ,071,706 4 0 4 ,276,237 1 1 3 ,005,773 1 ,328,810,844
Total comprehensive income for the year 2 8 7 ,849,599 2 8 7 ,849,599
Dividends declared/Paid (2012 ) (95,149,711) (95,149,711)
Balance at 31st Dec., 2013 3 9 6 ,457,128 4 1 5 ,071,706 5 9 6 ,976,125 1 1 3 ,005,773 1 ,521,510,733
Notes 18 19 21 20
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
STATEMENT OF CASHFLOW For the year ended 31st December 2013
2013 2012
N N
OPERATING ACTIVITIES
Cash receipts from customers 2 ,643,883,702 3 ,120,483,882
Cash paid to suppliers (2,568,406,398) (2,992,839,207)
Cash generated from operations 7 5 ,477,304 1 2 7 ,644,675
Interest Paid (7,219,520) (19,613,995)
Debt Debt Recovered 2 ,108,548 -
Income tax - (16,351,840)
Value added tax paid (5,011,601) (10,604,773)
Deferred Income Tax (22,614,523) (87,556,687)
Cash Flows from Operating Activities 4 2 ,740,208 (6,482,620)
INVESTING ACTIVITIES
Purchase of property, plant and equipments (18,611,971) (38,576,830)
Proceeds from sale of property, plant and equipment - 4 ,168,726
Net Interest received 1 ,315,407 9 6 5 ,035
Other Income 1 0 ,983,607 1 8 ,225,629
Cash Flows from Investing Activities (6,312,957) (15,217,440)
FINANCING ACTIVITIES
Dividends paid (95,149,711) (63,433,140)
Cash Flows from Financing Activities (95,149,711) (63,433,140)
Change in Cash and Cash Equivalents (58,722,460) (85,133,200)
Cash and Cash Equivalents, Beginning of Year 6 7 ,554,078 1 5 2 ,687,278
Cash and Cash Equivalents, End of Year 8 ,831,618 6 7 ,554,078
Page 19
PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
STATEMENT OF EARNINGS PER SHARE
For the years ended December 31, 2013
2013 2012
N N
Revenue 3 ,090,744,574 2 ,908,192,874
Cost of goods sales (1,991,460,220) (1,919,904,813)
Selling, General and Administrative Expenses (814,012,377) (718,259,419)
Operating Income 2 8 5 ,271,977 2 7 0 ,028,642
Other Income 1 4 ,407,562 2 4 ,611,321
Net Interest expense and other financial charges (7,219,520) (19,613,995)
Earnings Before Income Taxes 2 9 2 ,460,019 2 7 5 ,025,968
Tax expenses (4,610,420) (7,875,624)
Net Earnings 2 8 7 ,849,599 2 6 7 ,150,344
No. of shares outstanding used to calculate Basic Earning per share 7 9 2 ,914,256 7 9 2 ,914,256
Net Earnings per Ordinary Shares
Basic 0 .3 6 0 .3 4
Diluted 0 .3 6 0 .3 4
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS For the year ended December 31, 2013
1 Nature and description of the Reporting Entity
The financial statements of the company for the year ended 31 December 2013, were authorised for issue in
accordance with the resolution of the Directors on the 20th March, 2014
The company is a public limited liability company domiciled in Nigeria whose shares are publicly traded.
The registered office of the company is located at 18/24 Ajisegiri Street, Shogunle, Oshodi, Lagos State, Nigeria.
The principal activities of the company is carrying out manufacture of chemicals, marine, protective, industrial,
decorative and architectural coatings and paints and other related products.
2 Statement of Compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards
(''IFRS'') as issued by the International Accounting Standards Boards (''IASB'') and with the interpretations
issued by the International Financial Reporting Interpretations Committee (IFRIC).
The financial statements have been prepared on an accrual basis and under the historical cost convention,
unless stated overwise and using the accounting policies described therein.
3 Foreign Currency Translation
(a) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment
in which the company operates ''functional currency''. The financial statements are presented in Nigeria Naira =N=,
which is the company's functional presentation currency.
Assets and Liabilities denominated in foreign currencies are translated into Nigeria Naira at the foreign currency
exchange rate in effect at the balance sheet date. Exchange gains or losses arising from the translation of these
balances denominated in foreign currencies are recognized in operating income.
Revenues and expenses denominated in foreign currencies are translated into Nigeria Naira at foreign currency
exchange rates in effect at the dates when such items are transacted.
4 Profit on Ordinary Activities before Taxation
Profit on ordinary activities before taxation is stated after charging /(crediting) the following :-
2013 2012
N N
Depreciation 4 8 ,085,109 4 9 ,235,304
Auditor's Remuneration 3 ,000,000 2 ,500,000
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS (Cont')
For the year ended December 31, 2013
5 ADOPTION OF NEW AND REVISED IFRS STANDARDS
Accounting standards and interpretations issued but not yet effective
The following revision to accounting standards and pronouncements that are applicable to the
company were issued but not yet effective. Where IFRSs and IFRIC iInterpretations listed below
permits, early adoption is permitted, the company has elected not to apply them in the
preparation of these financial statements.
The full impact of these IFRSs and IFRIC interpretations is currently being assessed by the
company, but none of these pronoucements are expected to result in any material adjustments to
the financial statements.
5 .1 IFRS 9 Financial Instruments
Effective date : 1st January 2015
IFRS 9 issue in november 2009 introduce new requirements for classification and measurement
of financial assets. IFRS 9 amended in October 2010 to includes the requirement for the
classification and measurement of financial liabilities and for derecognition.
Key requirements of IFRS 9 are described as follows :-
IFRS 9 requires all recognised financial assets that are within the scope of IAS 39
financial instruments.
Recongnition and measurement to be subsequently measured at amortised cost or fair value.
specifically, debt investments that are held within a business model whose objective is to collect
the contractual cash flows, and that have contractual cash flows that are solely payments in principal
and interest on the principal outstanding are generally measures at amortised cost at the end of
subsequent accounting periods.
IFRS 9 is effective for annual financial statements beginning on or after 1 January 2015, with earlier
application permitted.
The directors are of the view that the application of IFRS 9 will not be applicable to the company.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
5 .2 IFRS 10 Consolidated Financial Statements
Effective date : 1st January 2013
IFRS 10, replaces the parts of IAS 27 Consolidated and separate Financial Statement that deal with
consolidated financial statement and SIC-12 Consolidation- Special Purpose Entities. Under IFRS 10,
there is only one basis for consolidation, that is control. In addition, IFRS 10 include a new definition
of control that contaion three elements:
(i) power over an investee,
(ii) exposure, or right, to variable returns from its involvement with the investee, and
(iii) the ability to use its power over the investee to affect the amount of the investor's returns.
The directors are of the view that the application of IFRS 9 will not be applicable to the company.
5 .3 IFRS 11 Joint Arrangements
Effective date : 1st January 2013
IFRS 11 replaces IAS 31 interest in joint ventures and SIC-13 Joint Controlled Entitied- Non-monetary
Contribution by ventures. IFRS 11 deals with how a joint arrangment of which two or more parties
have joint control should be classified. Under IFRS 11, joint arrangmnets are claasified as joint
operations or ventures, pending on the rights and obligations of the parties to the arrangments.
There are three types of joint arrangment:
(i) joint controlled entities,
(ii) jointly controlled assets
(iii) jointly controlled operations.
and In addition, joint ventures under
In addition, joint ventures under IFRS 11 are required to be accounted for using the equity method
of accounting, whereas jointly controlled entities under IAS 31 can be accounted for using the
equity method of accounting or proportionate accounting.
The directors are of the view that the application of IFRS 9 will not be applicable to the company.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
5 .4 IFRS 12 Disclosures of Interest in other entities
Effective date : 1st January 2013
This IFRS is applicable to companies that have interests in subsidiaries, joint arrangements,
associates, and/or unconsolidated structure entities.
The directors are of the view that the application of IFRS 9 in the future will not have any impact
on the company.
The directors are of the view that the application of IFRS 9 will not be applicable to the company.
5 .5 IFRS 13 Fair value measurement
Effective date : 1st January 2013
IFRS 13 establishes a single sourse of guidance for fair value measurement and disclosures about
fair value measurements.
The standard defines fair value, establishes a framework for measuring fair value and requires
disclosures about fair value measuremnets. The scope of IFRS 13 is broad;
it applies to both financial instrument items and non- financial instrumnet items for which other
IFRSs require or permit fair value measurement and disclosurs about fair value measurements.
IFRS 13 are more extensive than those required in the current standards. For example, quantitative
and qualitative disclosures based on the three-level fair value hierarchy currentlyb required for
financial instruments only under IFRS7 Financial Instrumnets: Disclosures will be extended by
IFRS 13 to cover all asset and liabilities within the scope.
IFRS 13 is effective for annual periods beginning on or after 1 january 2013. with the earlier application
permitted. The director anticipate that IFRS 13 will be adopted in the company financial Statement
fot the annual period beginning I January 2013 and that the application for the new Standard may
affect the amounts reported in the Financial Statements and result in more extensive disclosure
in the financial statements.
The directors have adopted IFRS 13 in the financial statements for the year ended 31 December
2 0 1 3 . The application does not significantly affect the amounts stated in the financial statements.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
5 .6 IAS 19 Employee Benefits
Effective date : 1st January 2013
The amendments to IAS 19 change the accounting for the defined benefit plan and termination
benefits. The most significant change related to the accounting of changes is defined benefit
obligations and plan assets. The amendment required recognition of changes in the defined benefit
obligations and a fair value of the plan assests when they occur, and hence eliminate the
corridor approach' permitted under the previous version of IAS 19 and accelerate the recognition
of the past service cost. The amendments required all actualrial gains and losses to be recognised
immediately through other comprehensive income in order for the net pension asset or liability
recognised in the statement of financial position to reflect the value of the plan deficit or surplus.
the amendments to IAS 19 are effective for the annual periods beginning on or after 1 january 2013
and required retrospective application and certain exceptions. The director anticipant that the
amendments to the IAS 19 will be adopted in the company's financial statements for the annual
period beginning 1 January 2013 and that the application of the amendments to IAS 19 may have
impact on amounts reported in respect of the company's defined benefit plans. However, the
directors have not yet performed a detailed analysis of the application of the amendments and
hence have yet quantified the extent of the impact.
5 .7 IAS 16 Amendments to IAS 16 Property, Plant and Equipment
The amendments to IAS 16 require that spare parts, standby equipment and servicing equipment
should be classified as property, plant and equipment when they meet the definition of property
plant and equipment in IAS 16.
The directors are of the view that the amendments to IAS 16 will not have significant effect on the
financial statements.
5 .8 IAS 36 Amendments to IAS 36
Recoverable Amount Disclosures for Non-Financial Assets
Applicable to annual periods beginning on or after 1st January 2014
The amendment reduces the circumstances in which the recoverable amount of assets or
cash-generating units is required to be disclosed, clarifies the disclosures required,
and to introduce an explicit requirement to disclose the discount rate used in determining impairment
(or reversals) where recoverable amount (based on fair value less costs of disposal) is determined
using a present value technique.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
5 .9 IAS 39 Amendments to IAS 39
Novation of Derivatives and Continuation of Hedges Accounting
Applicable to annual periods beginning on or after 1st January 2014
Amends IAS 39 Financial Instruments: Recognition and Measurement make it clear that there
is no need to discontinue hedge accounting if a hedging derivative is novated, provided certain
criteria are met.
5 .1 0 Offsetting Financial Assets and Financial Liabilities
Applicable to annual periods beginning on or after 1st January 2014
The amendment clarify certain aspects because of diversity in application of the requirements on
offsetting, focused on four main areas: the meaning of 'currently has a legally enforceable right
of set-off', the application of simultaneous realisation and settlement, the offsetting of collateral
amounts and the unit of account for applying the offsetting requirements.
5 .1 1 IFRIC 21 Levies
Applicable to annual periods beginning on or after 1st January 2014
Provides guidance on when to recognise a liability for a levy imposed by a government,
both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities
and Contingent Assets and those where the timing and amount of the levy is certain.
The liability is recognised progressively if the obligating event occurs over a period of time.
If an obligation is triggered on reaching a minimum threshold, the liability is recognised when
that minimum threshold is reached.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS (Cont')
For the year ended December 31, 2013
6 Critical accounting judgements and key sources of estimation uncertainty
6 .1
6 .2
6 .3
6 .4
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, are discussed below.
Useful lives of property, plant and equipment
The Company reviews the estimated useful lives of property, plant and equipment at the end of each
reporting period. During the current year, the useful lives of property, plant and equipment remained
constant.
In the application of the CRPSaQ\¶V accounting policies, the directors are required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the year in which the estimate is revised if the revision affects only that
year, or in the year of the revision and future years if the revision affects both current and future years.
Critical judgements in applying accounting policies
The following are the critical judgements, apart from those involving estimations (which are dealt with
separately below), that the directors have made in the process of applying the CRPSaQ\¶V accounting
policies and that have a significant effect on the amounts recognised in the financial statements.
Revenue recognition
In making its judgment, management considered the detailed criteria for the recognition of revenue
from the sale of goods set out in IAS 18 Revenue and in particular, whether the entity had transferred
to the buyer the significant risks and rewards of ownership of the goods. Based on the acceptance by
the customer of the liability of the goods sold, the directors are satisfied that the significant risks and
rewards have been transferred and that recognition of the revenue in the current year is appropriate.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
6 .5
6 .6 Allowance for Obsolete Inventory
6 .7 Valuation of Financial Liabilities
The Company reviews its inventory to access loss on account of obsolescence on a regular basis. In
determining whether an allowance for obsolescence should be recorded in profit or loss, the Company
makes judgements as to whether there is any observable data indicating that there is any future
sellability of the product and the net realizable value of such products. Accordingly, allowance for
impairment, if any, is made where the net realisable value is less than cost based on best estimates by
the management.
Financial liabilities have been measured at amortised cost. The effective interest rate used in
determining the amortised cost of the individual liability amounts has been estimated using the
contractual cash flows on the loans. IAS 39 requires the use of the expected cash flows but also
allows for the use of contractual cash flows in instances where the expected cash flows cannot be
reliably determined. However, the effective interest rate has been determined to be the rate that
effectively discounts all the future contractual cash flows on the loans including processing,
management fees and other fees that are incidental to the different loan transactions.
Impairment losses on receivables
The Company reviews its receivables to access impairment at least on an annual basis. The
Company's credit risk is primarily attributable to its trade receivables. In determining whether
impairment losses should be reported in profit or loss, the Company makes judgements as to whether
there is any observable data indicating that there is a measureable decrease in the estimated future
cash flow. Accordingly, an allowance for impairment is made where there are identified loss events or
condition which, based on previous experience, is evident of a reduction in the recoverability of the
cash flows.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS (Cont')
7 Revenue recognition
Revenue represents amounts received or receivable from third parties for goods supplied to the customer
and for services rendered. Revenue from sale of goods is recognised in the income statement
when significant risks and rewards of ownership of the goods have been transferred to the buyer.
It is measured at list price applicable to the goods supplied or services rendered after dedcution
of returns, value added tax, pricing allowances and other trade discount.
Hence the following must apply to qualifies as a revenue :
(a) the significant risks and rewards of ownership of the goods have passed to the buyer.
(b) managerial involvement and effective control over the goods have been transferred.
(c) the amount of revenue is reliably measurable.
(d) the economic benefits are probable; and
(e) the costs are reliably measurable.
Interest income, services fees and other revenue related to financial services are recognised on an accrual
basis.
8 Cost of goods sold and other expenses
Cost of goods sold is determined on the basis of the cost of production or or purchase and any variation
in inventories. All other expenses are recognised when the company receives the risks and rewards of
ownership or when it receives the services.
9 Prepayments and accrued income
Prepayments and accrued income comprises payments made in advance relating to the following year,
and income relating to the current year, which will not be invoiced until after the balance sheet date.
10 Accruals and deferred income
Accruals and deferred income comprise expenses relating to the current year, which will not be invoiced
until after the balance sheet date, and income received in advance relating to the following year.
11 Change in accounting policies
The accounting policies are the same as those applied in the Financial Statements for the year ended
3 1 December 2012.
12 Inventories 2013 2012
=N= =N=
Finished goods (at cost or net realisable value) 33 9,044,078 41 9,665,592
Raw materials (at cost) 56 6,112,492 65 4,495,872
Work in progress 2,739,570 -
Goods in transit 1,843,146 60 ,759,797
TOTAL 90 9,739,286 1,134,921,261
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
Inventories held for sale in the ordinary course of business, held in the process of production for such sales,
and held in form of raw material and for packaging to be consumed in the production process.
The company values inventories at the lower of cost and net realisable value. Cost include cost of
purchases plus other costs, such as transportation etc. that are directly incurred to bring inventories to their
present location and condition.
Raw material inventories, finished goods and other inventoriesare accounted for weighted average method.
Inventories are written down to net realizable value when the cost of inventories is estimated to be
unrecoverable due to obsolescense, damage or declining selling price.
When circumstances that previously inventories to be written down below cost no longer exit or when there
is clear evidence of an increase in selling price, the amount of the written down previously recorded is
reversed.
The net realisable value of inventory is re-assessed at each financial reporting date and reduction may be
necessary to write down to net realisable value.
The write down of value of inventory over the net realisable value, unallocated production overheads and
abnormal production cost are classified as the cost of sales.
Storage costs, indirect administrative overhead and certain selling costs related to inventories are expensed
in the period that these costs are incurred.
Finished goods and work in progress
Cost of direct materials and labour and a proportion of manufacturing overheads based on normal capacity
of the production facilities.
Normal operating capacity is the average production volume expected over a number of periods under
normal circumstances, taking down time for planned maintenance into account.
In periods of abnomally high production volumes, the actual volume is used as the denominator so that
cost is not higher than actual cost.
13 Cash and cash equivalent 2013 2012
=N= =N=
Cash at banks and on hand 8,831,618 32 ,903,273
Bank terms deposits - 34 ,650,805
TOTAL 8,831,618 67 ,554,078
Cash and cash equivalent consist of cash in hand and in bank and other highly liquid marketable
investments with an original maturity date of 90 days or less from the date of acqusition.
The bank terms deposits is a short term investment with maturity of three months or less from the initial
recognition.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
14 Provisions
Provisions comprise liabilities of uncertain timing or amount that arise from known and unknown risks.
Provisions are recognised when there exists a legal or constructive obligation arising from a past event
and when the future cash outflows can be reliably estimated.
Provision are recognised in these financial statements when:
(a) an entity has a present obligation (legal or constructive) as a result of a past events; A present legal
obligation is derivable from a contract, legislation or other operation of laws whereas a constructive obligation
is derivable by an established pattern of past practice, published policies.
(b) it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation;
The amount recognized as a provision is the present value of the best estimate of the consideration required
to settle the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation.
1 4 .1 Onerous contracts
Present obligations arising under onerous contract are recognised and measure as provisons.
An onerous contract is considered to exist when the compnay has a contract under which the
unavoidable cost of meeting the obligations under the contract exceed the economics benefits
expected to be received from the contract.
1 4 .2 Warranties
Provisions for the expected cost of warranty obligations under sales of goods contract are recognised
at the date of sale of the relevant products at the director's best estimate of the amount of warranties.
The directors are of the view that no such exposure exist.
15 Reimbursements
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another
party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement
will be received.
Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be
required to settle the obligation, the provision shall be reversed.
16 Employee Benefits
Post Employment Benefit Plans
The company in line with Pension Reform Act, 2004, has a defined contribution plan whereby the company
pays fixed contributions into an approved Pension Fund Administrators (approved PFAs).
The fixed contribution rate is 7.5% of gross salary payable by the employee and employer to the pension
plan, the companys' contribution are accrued and charged to the income statement.
The obligation of the company for the period is limited to the contribution required for the period.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
The fund is being managed by Pension Funds Administrators (PFA) listed below:
1 ) Stanbic IBTC Pension Managers Limited
2 ) ARM Pension
3 ) IEI Anchor Pension Manager
4 ) Pensions Alliance Limited (Pal Pension)
5 ) Trustfund Pensions Plc
6 ) AIICO Pension Managers Limited
The defined contribution plan paid by the company during the year is as listed below :-
2013 2012
=N= =N=
Key Management Staff 1 8 ,086,420 1 8 ,086,420
Other Staff 1 7 ,041,214 1 7 ,129,363
Total pension paid 3 5 ,127,634 3 5 ,215,783
17 Segment Information
The company is organised into business units based on the products manufactured.
- P rotective Coating and marine and related
- Decoratives and related
- O ther related products
Management measure the operating results of its business units seperately for the
purpose of decision making.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS (Cont')
18 PROPERTY, PLANT & EQUIPMENT
Property, plant and equipment are recognised and subsequently measured at cost less accumulated depreciation and any
accumulated impairment losses. Cost include expenses that are directly attributable to the acqusition of the asset to prepare
the asset for its intended use.
Property, plant and equipment are tangible items that are held for use in the production of goods and for administrative purposes
and are expected to be used during more than one year.
To qualify as an item of Property, plant and equipment, the following criteria must be met:
(a) It is probable that future economic benefits associated with the items will flow to the company,
(b) the cost of the item can be measured reliably.
The company adds to the carrying amount of an item of property, plant and equipment the cost of replacing parts of such an item
when that cost added is expected to provide future benefits to the company.
All other day to day servicing is expensed as repairs and Maintenace.
The summary of the fixed assets is as listed below:
Leasehold Land
Construction in
Progress
Furniture and
Equipment Motor Vehicles
Leasehold
Improvement
Plant &
Machinery Total
Costs/Revaluation N N N N N N N
Balance, beginning of year 2 1 0 ,000,000 1 4 ,174,200 2 9 ,686,793 5 2 ,118,892 3 7 ,896,064 6 7 ,571,455 4 1 1 ,447,403
Additions - 8 ,849,994 2 ,307,934 2 ,300,000 - 5 ,154,043 1 8 ,611,971
Balance, end of year 2 1 0 ,000,000 2 3 ,024,194 3 1 ,994,727 5 4 ,418,892 3 7 ,896,064 7 2 ,725,498 4 3 0 ,059,374
Depreciation
Balance, beginning of year 2 ,153,846 - 1 2 ,076,065 1 7 ,490,626 3 7 ,896,054 1 6 ,899,259 8 6 ,515,850
Charge for the year 2 ,165,064 - 1 0 ,330,873 1 7 ,871,086 - 1 7 ,718,086 4 8 ,085,109
Balance, end of year 4 ,318,910 - 2 2 ,406,938 3 5 ,361,712 3 7 ,896,054 3 4 ,617,345 1 3 4 ,600,959
Carrying amount as at:
3 1 st Dec., 2013 2 0 5 ,681,090 2 3 ,024,194 9 ,587,789 1 9 ,057,180 10 3 8 ,108,153 2 9 5 ,458,415
3 1 st Dec., 2012 2 0 7 ,846,154 1 4 ,174,200 1 7 ,610,728 3 4 ,628,266 10 5 0 ,672,196 3 2 4 ,931,553
The depreciation charge for the year is analysised as follow:
2013 2012
=N= =N=
Cost of sales 1 9 ,883,150 1 9 ,053,105
Adminitrative cost 2 8 ,201,959 3 0 ,182,199
Total 4 8 ,085,109 4 9 ,235,304
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
LEASEHOLD LAND
The details of the land is as listed below:
Location : Within 2KLM off Lagos/Ibadan Expressway, Kenta Oyewolu Village, Ogun State.
Size of Property : 4.138 Hectares per plan no. L.C. 2690 (OG).
Title of Property : Ogun State of Nigeria Certificate of Occupancy No. 026092 dated 17th May
20 09 for a term of Ninety - Nine (99) years commencing 1st January 2009.
Current Value : The value is based on historical cost value.
Debt secured on property : None
1 8 .1 FIXED ASSETS COMMITMENTS
As at December 31, 2013, the company has not entered into any capital commitments for the construction of the leasehold land.
1 8 .2 REVALUATION OF PROPERTY, PLANT AND EQUIPMENT
The company use revaluation model of measurement of property, plant and equipment by engaging the services of Ubosi Eleh and Co.,
Estate Surveyors and Valuers an accredited independent valuer, to determine the fair value of its property, plant and equipment.
The valuation is based on Open Market Capital Value. The date of the most recent valuation was December 2011.
The surplus in cost over the historical value is transferred to the revaluation reserve.
The book values of the revalued assets were adjusted to the revaluation and the resultant surplus were credited to the revalaution
reserves in shareholder's equity.
If the property, plant and equipment were measured using cost model the carrying amount will be as follows:-
Year Ended 31st December 2011 Leasehold Land
Furniture and
Equipment Motor Vehicles
Leasehold
Improvement
Plant &
Machinery
N N N N N
Cost 1 0 5 ,231,625 4 7 ,120,495 6 4 ,480,500 3 7 ,896,064 1 0 5 ,930,946
Accumulated Depreciation 3 ,158,534 3 2 ,220,122 2 9 ,439,580 3 7 ,896,064 4 6 ,209,557
Net Carrying Amount 1 0 2 ,073,091 1 4 ,900,373 3 5 ,040,920 - 5 9 ,721,389
Year Ended 31st December 2012 Leasehold Land
Construction in
progress
Furniture and
Equipment Motor Vehicles
Leasehold
Improvement
Plant &
Machinery
N N N N N N
Cost 1 0 5 ,231,625 1 4 ,174,200 5 5 ,044,670 6 5 ,930,500 3 7 ,896,064 1 1 6 ,609,401
Accumulated Depreciation 5 ,312,380 - 4 4 ,296,187 4 6 ,930,206 3 7 ,896,064 6 3 ,108,816
Net Carrying Amount 9 9 ,919,245 1 4 ,174,200 1 0 ,748,483 1 9 ,000,294 - 5 3 ,500,585
Revaluation will be carried out every three to five years based on fair value and as determined by independent appraisal,
unless material changes are identified that warrant revaluation.
Any increase in revaluation will be in revaluation surplus account whereas any decrease in value will be recognized in other
comprehensive income.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
1 8 .3 DEPRECIATION
Depreciation commences when the assets are available for use and is recognized on a straight line basis to depreciate the cost
of these assets to their estimated residual value over their estimated useful lives.
Depreciation methods, useful lives and residual values are reviewed at each financial year end and are adjusted if appropriate,
such review takes into consideration the nature of the assets, their intended use and the evolution of new technology.
Estimated useful lives are as follows :
Leasehold Land : Over the lease period of 99 years from 2009
Plant & machinery : 4 - 10 Years
Office equipment and furniture : 3 - 8 Years
Motor Vehicle : 3 - 5 Years
1 8 .4 Derecognition of property, plant and building
An item of property, plant and equipment and any significant parts initially recognised is derecognised when :
(a) on disposal; or
(b) when no future economic benefits are expected from its use;
The gain or loss arising from the derecognition of an item of property, plant and equipment (calculated as difference between the net
disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
1 8 .5 Construction in progress
Construction work-in- progress represents assets under construction which are not subject to depreciation, these assets after
completion of construction will be reclassified to the appropriate class of property, plant and equipment.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
1 8 .6 Impairment of tangible and intangible assests excluding goodwill and financial assets.
At the end of each reporting period,the company reviews the carrying amount of the tangible
and intagible assets to determine whether there is any indicator that those assets have suffered
an impairment loss. If any such indication exists, the recoverable amountof the assest is estimated
in order to determine the extent of the impairment loss ( if any). When it is not possible to estimate
the recoverable amount of an individual assets, the company estimate the recoverable amount of
the cash - generating unit to which the assets belong. When a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to individual cash- generating unit,
or otherwise they are allocated to the smallest group of cash -generating units for which a
reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested
for impairment at least annually, and whenever there is an indication that asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In asssessing
vaule in use, the estimated future cash flows are discounted to their present value in use.
The estimated future cash flows are discounted to their present value using a pre-tax
discount rate to reflect current market assessments of the time value of money and the risks specific
to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of the assets( or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset(or cash-generating unit)is reduced to the
recoverable amount, an impairment loss is recognised immediatelly in the income statement.
unless the relevant asset is carried at a revalued amount, in which cases the impairment loss is
treated as a revaluation decrease.
When an impairment loss is subsequently reverses, the carrying amount of ther assets
(or a cash-generating unit) is increased to the revised estimate of its recoverable amount so
that the increased carrying amount does not exceed the carrying amount that would have been
determined has no impairment loss been recognised for the asset (or cash-generating unit) in
prior years. A reversal of an impairmentloss is treated as a revaluation increase.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS (Cont')
2013 2012
19 SHARE CAPITAL N'000 N'000
Authorised :
1,200,000,000 ordinary shares of 50 Kobo per share 6 0 0 ,000 6 0 0 ,000
Issued and Fully Paid
7 9 2 ,914,256 ordinary shares of 50 Kobo per share 3 9 6 ,457 3 9 6 ,457
The share capital did not change during the financial year.
20 SHARE PREMIUM
Share Premium Account 4 1 5 ,072 4 1 5 ,072
The share premium represents the premium on the sales of shares sold during the private placement net of
associated cost of placement, listings and bonus issued.
21 Retained Earnings 5 1 0 ,201,542 4 0 4 ,276,237
Retained earnings represent the cumulative profits attributable to shareholders of the company.
The dividend related to 2012 and paid during this financial year in conformity with the decision taken at the
Annual General Meeting on 23rd May 2013. Shareholders approved the proposed dividends of '=N=0.12
per share, resulting in total dividends of '=N=95,149,711.
Dividend payable is not accounted for until it has been ratified at the Annual General Meeting.
In the next Annual General Meeting the Board is proposing a dividend of eight kobo (8 Kobo) per share.
The financial statements for the year ended 31 December 2013 do not reflect this proposed distribution,
which will be treated as an appropriation of profit in the year ending 31 December 2014.
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
22 REVALUATION RESERVE
The Leasehold Land, Furniture, Fittings and Office Equipment, Plant and Machinery and Motor Vehicles were
revalued in December 2011 by an independent valuer UBOSI ELEH + Co. a Estate Surveyors and Valuers on
the basis of open Market Capital Value. The revaluation surplus are as stated belew:
2013 2012
=N= =N=
Leasehold land 1 0 7 ,926,909 1 0 7 ,926,909
Furniture and Equipment 1 7 ,722,027 1 7 ,722,027
Motor Vehicles 2 3 ,009,080 2 3 ,009,080
Plant and Machinery (2,828,389) (2,828,389)
1 4 5 ,829,627 1 4 5 ,829,627
Less: Impairment in 2012
Furniture and Equipment (10,859,782) (10,859,782)
Motor Vehicles (7,381,108) (7,381,108)
Revaluation Surplus as at 31st December 2013 1 2 7 ,588,737 1 2 7 ,588,737
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS (Cont')
23 Income Taxes a Pionner Status
The company has been granted pioneer certificate by the Nigerian Investment Promotion Commission, the
Pioneer Certificate under the provisions of Industrial Development Tax Relief Act No. 22 of 1971 as amended and
the Nigeria Investment Promotion Commission Act No. 16 of 1995.
This certificate exempts the company from paying income taxes.
In view of the pioneer certificate no provision has been made for deferred taxation, company income tax
and education tax.
b Deferred Tax Assets (Withholding Tax)
Deferred tax assets relates to unused tax credits that the company can carry forward and deduct from its future
company income taxes liabilities.
Deferred tax assets are recognised to the extent that future taxable profit will be available against which the
temporary differences can be utilised.
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.
c Deferred Tax Liabilities
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined by
using tax rate per the companies income tax act.
The deferred tax liability relates to the deferred capital gain tax on the revaluation surplus account (net of the
deferred capital gain tax on impairment cost during the year).
d Taxation -Per Balance sheet
2013 2012
=N= =N=
Balance brought forward 7,875,624 71,204,847
Payment during the year - (20,221,355)
Withholding tax credit notes - (67,335,332)
Provision for prior years - 16,351,840
Provision for the year 4,610,420 7,875,624
TOTAL 12,486,044 7,875,624
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS (Cont')
24 EVENTS AFTER THE REPORTING PERIOD
This relates to events, favourable or unfavourable, that occurs between the end of the reporting period
and the date when the financial statements are authorised for issue.
25 DIVIDENDS PAID AND PROPOSED
2013 2012
Proposed for approval at the annual general meeting =N= =N=
(not recognised as a liability at 31 December). 6 3 ,433,140 95 ,149,711
Dividend Payable 63 ,433,140 95 ,149,711
The dividend related to 2012 and paid during this financial year in conformity with the decision taken at the
Annual General Meeting on 23rd May 2013. Shareholders approved the proposed dividends of '=N=0.12
per share, resulting in total dividends of '=N=95,149,711.
Since after the year end of the company, the Board of Directors have proposed to declare a dividend of
=N=0.08 per share (2012 N0.12 per share) subject to approval of shareholders at the Annual General
Meeting.
The financial statements for the year ended 31 December 2013 do not reflect this proposed distribution,
which will be treated as an appropriation of profit in the year ending 31 December 2014.
26 TRADE AND OTHER RECEIVABLE
The trade receivable are not interest bearing and are generally on 30-120 days terms.
There are no indication of impairment at the end of the financial period, and the directors are of the oponion that
allowance for impairment is not necessary, therefore no impairment was recognised.
The age of receivable that are past due but not impaired :
=N=
45 - 90 days 12 9,548,072
> 90 days 81 ,090,488
Total 21 0,638,560
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
27 DIRECTORS AND EMPLOYEES 2013 2012
=N= =N=
Emoluments :- Chairman 3,000,000 1,250,000
Directors' Fees 18 ,000,000 6,250,000
Emoluments as executives 68 ,310,000 68 ,310,000
86 ,310,000 74 ,560,000
Highest paid director 22 ,785,000 21 ,285,000
Number of Directors and Employee No. No.
Executive Directors 3 3
Management 27 18
Non Management 90 92
120 113
Employees remuneration range
2013 2012
=N= Number Number
3 3 0 ,001 - 350,000 0 14
3 5 0 ,001 - 360,000 0 10
3 6 0 ,001 - 390,000 28 9
3 9 0 ,001 - 400,000 0 2
4 0 0 ,001 - 410,000 0 4
4 1 0 ,001 - 420,000 0 1
4 2 0 ,001 - 440,000 0 3
4 4 0 ,001 - 450,000 0 1
4 5 0 ,001 - 520,000 8 10
5 2 0 ,001 - 550,000 7 3
5 5 0 ,001 - 650,000 6 3
6 5 0 ,001 - 700,000 11 3
7 0 0 ,001 - 900,000 5 3
9 0 0 ,001 - 1,000,000 4 5
1 ,000,001 - 1,500,000 8 7
1 ,500,001 - 2,500,000 13 15
2 ,500,001 - 3,500,000 3 5
3 ,500,001 - 7,000,000 14 6
7 ,000,001 - 25,000,000 13 9
Total 120 113
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PAINTS AND COATINGS MANUFACTURERS NIGERIA PLC
28 RELATED PARTY TRANSACTIONS
The company is an indigenous Nigeria Company and does not have a subsidiary or a parent company.
29 CONTINGENT ASSETS AND LIABILITIES
Contingent assets and liabilities are possible rights and obligations that arise from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not fully within the control of the company.
(a) Claims
There is no claim to any liability against the company.
(b) Guarantees
The company has not made any guarantee to any company.
30 LOANS FAVOURING DIRECTORS AND OFFICERS
(a) The company did not grant or guarantee any loan or credit in favour of any Director during the year.
(b) No loan was made to any of the Director for the purchase of the company's shares during the year.
31 COMPARABLES
Where necessary, comparative figues have been adjusted to conform with changes in the presentation in
the current year.
32 APPROVAL OF FINANCIAL STATEMENTS
The financial statements for the year ended 31 December 2013 (including comparatives) were approved by
the board of Directors on 20 March 2014.
[signed] [signed]
Michael Thompson Wale Jubril
FRC/2014/CISN/00000006703
««««««««««« «««««««««««
Vice Chairman/(CEO) Executive Director (Finance)
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