the tourist company of nigeria plc -...

THE TOURIST COMPANY OFNIGERIA Plc

CONDENSED UNAUDITED FINANCIAL STATEMENTS

FOR THE FIFTEEN MONTHS ENDED 30 SEPTEMBER 2017

THE TOURIST COMPANY OF NIGERIA PLC

CONDENSED UNAUDITED FINANCIAL STATEMENTSFOR THE FIFTEEN MONTHS ENDED 30 SEPTEMBER 2017

CONTENTS Page Nos

RESPONSIBILITY STATEMENT 1

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES 2 - 7

STATEMENT OF COMPREHENSIVE INCOME 8

STATEMENT OF FINANCIAL POSITION 9

STATEMENT OF CHANGES IN EQUITY 10

STATEMENT OF CASH FLOWS 11

NOTES TO THE FINANCIAL STATEMENTS 12 - 18

FINANCIAL SUMMARY 19

STATEMENT OF COMPREHENSIVE INCOME FORECAST FOR QUARTER ENDING 31 DECEMBER 2017 20

STATEMENT OF COMPREHENSIVE INCOME FORECAST FOR 18 MONTHS ENDING 31 DECEMBER 2017 21


RESPONSIBILITY STATEMENTFOR THE FIFTEEN MONTHS ENDED 30 SEPTEMBER 2017

a

b

c

Mr David Kliegl (General Manager) Mr Bjørn Bjaaland (Financial Manager)

FRC/2013/NIM/00000004949 FRC/2014/MULTI/00000008950

1

We have conducted a review of the condensed financial statements. We confirm that to the best of our knowledge:

18 October 2017 18 October 2017

The condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial

Reporting'.

The condensed financial statements do not contain any untrue material fact or contain a material omission of

fact.

The condensed financial statements of the Company fairly present in all material respects the financial

performance for the period and financial position for the period then ended.


STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

1. REPORTING ENTITY

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

(a) Statement of compliance

(b) Basis of measurement

The financial statements have been prepared under the historical cost convention.

(c) Critical accounting estimates and judgements

• Asset useful lives and residual values

(d) Functional and presentation currency

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Foreign currency transactions

(b) Property, plant and equipment

Recognition and measurement

2

Transactions denominated in foreign currencies are translated to Naira at the rate of exchange ruling on the

transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the rate

of exchange ruling at the statement of financial position date. Gains or losses arising on translation are

recognised in profit or loss.

Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated

impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the

items. The cost of certain items of property, plant and equipment was determined by reference to Nigerian

GAAP by revaluation on 30 November 1990 by Messrs Jide Taiwo & Co, estate surveyors and valuers.

The Company elected to apply the optional exemption to use the previous revaluation as deemed cost on 1

July 2011, the date of transition to IFRS.

The Tourist Company of Nigeria Plc is a public liability company registered in Nigeria and is quoted on the

Nigerian Stock Exchange. It was incorporated on 10 April 1964. The Company converted from a private

company to its current form on 20 April 1994. The Company operates a gaming and hospitality business in

Victoria Island, Lagos.

The financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRS).

Preparation of the financial statements in conformity with IFRS requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the

financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results may differ from those estimates.

Property, plant and equipment are depreciated over their useful lives, taking into account

residual values where appropriate. The actual useful lives of the assets and residual values are

assessed annually and may vary depending on a number of factors. In re–assessing asset

useful lives, factors such as technological innovation, product life cycles and maintenance

programmes are taken into account. Residual value assessments consider issues such as

future market conditions, the remaining life of the assets and projected disposal values.

The financial statements are presented in Nigerian Naira, which is the Company’s functional currency.

All financial information presented in Naira has been rounded to the nearest thousand except where

otherwise indicated.

The accounting policies set out below have been consistently applied to all periods presented in these

financial statements, unless otherwise stated.



Depreciation

Leasehold land Over the lease period

Buildings and infrastructure

- Casino and hotel premises 40 years

Plant and machinery

- Pumps, pipes, tanks and compressors 10 years

- Generating set equipment 2 years

- Generators 10 years

Casino equipment 10 years

Hotel and office equipment 10 years

Furniture and fittings 10 years

Motor vehicles 7 years

Subsequent costs

(c) Intangible assets

3

Costs arising subsequent to the acquisition of an asset are included in the asset’s carrying amount or

recognised as a separate asset, as appropriate, only when it is probable that future economic benefits

associated with the item will flow to the Company and the cost of the item can be measured reliably. The

carrying amount of the replaced part is then de-recognised. All other repairs and maintenance costs are

charged to the statement of comprehensive income during the financial period in which they are incurred.

Borrowing costs and certain direct costs relating to major capital projects are capitalised during the period

of development or construction.

Expenditure on computer software is capitalised and amortised using the straight line method over 4

years. Costs associated with maintaining computer software programmes are recognised as an expense

as incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and

are recognised in profit or loss in the statement of comprehensive income.

Assets held under finance lease are depreciated over their expected useful lives on the same basis as

the owned assets or, where shorter, the term of the relevant lease.

When the carrying amount of an asset is greater than its estimated recoverable amount, it is written down

immediately to its recoverable amount.

Depreciation is recognised so as to write off the cost or valuation of assets less the residual values over

their useful lives, using the straight-line method. The principal useful lives over which the assets are

depreciated are as follows:

The assets’ residual values and useful lives are reviewed annually, and adjusted if appropriate, at each

statement of financial position date.

Usage of operating equipment (which includes uniforms, casino chips, kitchen utensils, crockery, cutlery

and linen) is recognised as an expense. The period of usage depends on the nature of the operating

equipment and varies between one and three years.



(d) Impairment of non-financial assets

(e) Inventory

(f) Cash and cash equivalents

(g) Financial instruments

Financial Assets

4

The classification of financial assets depends on the purpose for which the financial assets were acquired.

Management determines the classification of its financial assets at initial recognition. The financial assets

carried at the statement of financial position date are classified as ‘Receivables’.

All purchases and sales of financial assets are recognised on the trade date, which is the date that the

Company commits to purchase or sell the asset. Financial assets are de-recognised when the rights to

receive cash flows from the financial assets have expired or have been transferred and the Company has

transferred substantially all risks and rewards of ownership.

The Company assesses at each statement of financial position date whether there is objective evidence

that a financial asset or a group of financial assets is impaired. A provision for impairment is established

where there is objective evidence that the Company will not be able to collect all amounts due according

to the original terms of the receivables. Significant financial difficulties of the counterparty and default or

delinquency in payments are considered indicators that the receivable is impaired. The amount of the

impairment loss is the difference between the asset’s carrying amount and the present value of estimated

future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is

reduced through the use of an allowance account, and the amount of the loss is recognised in profit or

Assets that have an indefinite useful life are not subject to depreciation or amortisation and are tested

annually for impairment. Assets that are subject to depreciation or amortisation are reviewed for

impairment whenever events or changes in circumstances indicate that the carrying amount may not be

recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount

exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs

to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels

for which there are separately identifiable cash flows (cash generating units). In assessing value in use,

the estimated future cash flows are discounted to their present value using a pre-tax discount rate.

Impairment losses are recognised in profit or loss. An impairment loss is reversed only to the extent that

the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of

depreciation or amortisation, if no impairment loss had been recognised.

Inventory comprises merchandise held for sale and consumables, and is measured at the lower of cost

and net realisable value on a first-in first-out basis. Net realisable value is the estimated selling price in

the ordinary course of business, less any costs necessary to make the sale.

Cash and cash equivalents are carried in the statement of financial position at fair value. Cash and cash

equivalents comprise cash on hand and deposits held on call with banks. In the statement of financial

position and statement of cash flows, bank overdrafts are included in borrowings.

Financial instruments carried at statement of financial position date include accounts receivable, cash and

cash equivalents, borrowings and accounts payable and accruals.

Financial instruments are recognised initially at fair value plus, for instruments not at fair value through

profit or loss, any directly attributable transaction costs. Subsequent to initial recognition, financial

instruments are measured as described below.



Receivables

Financial liabilities

Non-derivative financial liabilities

Share capital

(h) Current and deferred tax

5

The tax expense for the financial year comprises current and deferred tax. Tax is recognised in profit or

loss in the statement of comprehensive income, except to the extent that it relates to items recognised

directly in equity.

Current tax is the expected tax payable on the taxable income or loss for the year, using tax rates

enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of

previous years.

Deferred tax is provided in full, using the liability method and using tax rates enacted or substantively

enacted at the reporting date, for all temporary differences arising between the tax bases of assets and

liabilities and their carrying values for financial reporting purposes.

Deferred tax assets relating to the carry forward of unused tax losses, tax credits and deductible

temporary differences are recognised to the extent that it is probable that future taxable profit will be

available against which the unused tax losses can be utilised in the foreseeable future.

loss in the statement of comprehensive income. When a receivable is uncollectible, it is written off against

the allowance account. Subsequent recoveries of amounts previously written off are credited in profit or

loss in the statement of comprehensive income.

Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted

in an active market. They are classified as current assets unless receipt is anticipated beyond 12 months,

in which case the amounts are included in non-current assets. Receivables are recognised initially at fair

value plus any directly attributable transaction costs.

Subsequent to initial recognition, receivables are carried at amortised cost using the effective interest

method, less any impairment losses.

The company’s financial liabilities at statement of financial position date include ‘Borrowings’ and

‘Accounts payable and accruals’ (excluding indirect taxes and employee related payables). These

financial liabilities are subsequently measured at amortised cost using the effective interest method.

Financial liabilities are included in current liabilities unless the Company has an unconditional right to

defer settlement of the liability for at least 12 months after the statement of financial position date.

Financial liabilities are recognised initially on the trade date, which is the date that the Company becomes

a party to the contractual provisions of the instrument. The Company de-recognises a financial liability

when the contractual obligations are discharged, cancelled or expire. The Company classifies non-

derivative financial liabilities into the other financial liabilities category. Such financial liabilities are

recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial

recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise borrowings and accounts payable and accruals.

Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares,

other than arising on a business combination, are shown as a deduction from the proceeds, net of income

taxes, in equity.



(i) Leases

(j) Employee benefits

Short-term employee benefits

Defined contribution retirement plans

(k) Provisions

(l) Revenue recognition

Customer loyalty points are provided against revenue when points are earned.

6

Revenue comprises the fair value of the consideration received or receivable from the sale of goods and

services in the ordinary course of the Company’s activities. Revenue is recognised when it is probable that

the economic benefits associated with a transaction will flow to the Company and the amount of revenue

and associated costs incurred or to be incurred can be measured reliably.

Revenue includes net gaming win, hotel, entertainment and restaurant revenues, other service fees, rental

income and the invoiced value of goods and services sold less returns and allowances. Value Added Tax

(VAT) and other taxes levied on casino winnings are included in revenue and treated as overhead

expenses, as these are borne by the Company and not by its customers. VAT on all other revenue

transactions is considered to be a tax collected by the Company as an agent on behalf of the revenue

authorities and is excluded from revenue.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the

Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets

and liabilities.

Leases of assets where the Company assumes substantially all the benefits and risks of ownership are

classified as finance leases. Finance leases are capitalised at commencement and are measured at the

lower of the fair value of the leased asset and the present value of minimum lease payments. Each lease

payment is allocated between the liability and finance charges so as to achieve a constant rate on the

finance balance outstanding. The corresponding lease obligations, net of finance charges, are included in

borrowings. The interest element of the lease payment is charged to profit or loss over the lease period.

The assets acquired under finance leasing contracts are depreciated over the shorter of the useful life of

the asset, or the lease period. Where a lease has an option to be renewed, the renewal period is

considered when the period over which the asset will be depreciated is determined.

Leases of assets under which substantially all the risks and benefits of ownership are effectively retained

by the lessor are classified as operating leases and are not recognised in the Company’s statement of

financial position. Payments made under operating leases are charged to profit or loss on a straight-line

basis over the period of the lease. When an operating lease is terminated before the lease period has

expired, any payment required to be made to the lessor by way of a penalty is recognised as an expense in

the period in which termination takes place.

Short-term employee benefit obligations are measured on an un-discounted basis and are expensed as

the related service is provided. A liability is recognised for the amount expected to be paid under short-

term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to

pay this amount as a result of past service provided by the employee, and the obligation can be estimated

reliably.

The Company operates a contributory scheme in line with the Pension Reform Act, 2004. The Company

and the employees respectively contribute 7.5% of the employees’ current salaries and designated

allowances. The Company’s contributions are charged to the statement of comprehensive income in the

period to which the contributions relate.

Provisions are recognised when the Company has a present legal or constructive obligation as a result of

past events, it is probable that an outflow of resources will be required to settle the obligation, and a

reliable estimate of the amount of the obligation can be made. Provisions are measured at the present

value of the expenditures expected to be required to settle the obligation.



(m) Finance income and finance costs

(n) Segment reporting

4. Determination of fair values

• Property, plant and equipment

• Trade and other receivables

• Other non-derivative financial liabilities

7

Fair value, which is determined for disclosure purposes, is calculated based on the present value of

future principal and interest cash flows, discounted at the market rate of interest at the reporting

date.

Net finance costs include interest expense on borrowings as well as interest income on bank balances.

Net finance costs also include other finance income and expense items, such as exchange differences

arising on borrowings and the settlement of foreign currency creditors. Foreign currency gains and losses

are reported on a net basis.

Segment results that are reported to the Company’s General Manager include items directly attributable to

a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise

mainly corporate assets, shared services and tax assets and liabilities.

A number of the Company’s accounting policies and disclosures require the determination of fair value,

for both financial and non-financial liabilities. Fair values have been determined for measurement and/or

disclosure purposes based on the following methods. Where applicable, further information about the

assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

The market value of property is the estimated amount for which items could be exchanged on the

date of valuation between a willing buyer and a willing seller in an arm’s length transaction after

proper marketing, wherein the parties had each acted knowledgeably and willingly. The fair value of

items of plant, equipment, fixtures and fittings is based on the market and cost approaches using

quoted market prices for similar items when available and replacement cost when appropriate.

The fair value of trade and other receivables is estimated as the present value of future cash flows,

discounted at the market rate of interest at the reporting date. This fair value is determined for

disclosure purposes. For short term receivables, no disclosure of fair value is presented when the

carrying amount is a reasonable approximation of fair value.


CONDENSED UNAUDITED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FIFTEEN MONTHS ENDED 30 SEPTEMBER 2017

Quarter Quarter 15 months Year

ended ended ended ended

30 September 30 September 30 September 30 June

2017 2016 2017 2016

Notes N'000 N'000 N'000 N'000

Revenue

Gaming 298,744 352,374 1,704,908 1,402,541

Hospitality 488,840 327,237 2,435,295 1,488,904

1 787,584 679,611 4,140,203 2,891,445

Expenses 1 (920,016) (923,899) (4,874,799) (3,335,374)

Operating (loss) / profit (132,431) (244,288) (734,596) (443,929)

Finance costs 2 (199,909) (1,416,349) (2,305,961) (5,103,162)

Loss before tax (332,340) (1,660,637) (3,040,558) (5,547,091)

Taxation 3 - - - -

(Loss) / profit after tax (332,340) (1,660,637) (3,040,558) (5,547,091)

Other comprehensive income/(loss) - - - -

Total comprehensive (loss)/income 1 (332,340) (1,660,637) (3,040,558) (5,547,091)

(Loss) / earnings per share (kobo) 4 (15) (74) (135) (247)

8

The statement of significant accounting policies on pages 2 to 7 forms an integral part of these financial

statements.

Internal revenues for the quarter of N32.1 million (2016: N31.5 million) have been eliminated in compliance with

IFRS.There is no impact on operating profit.


CONDENSED UNAUDITED STATEMENT OF FINANCIAL POSITIONAS AT 30 SEPTEMBER 2017

30 September 30 June

2017 2016

Notes N'000 N'000

ASSETS

Non-current assets

Property, plant and equipment 5 8,115,767 8,628,273

Intangible assets 9,019 10,609

Tax asset 102,317 101,579

8,227,102 8,740,461

Current assets

Inventory 104,848 93,676

Trade and other receivables 165,000 72,636

Prepayments 87,383 26,791

Cash and cash equivalents 1,280,128 1,612,776

1,637,358 1,805,879

Total assets 9,864,461 10,546,340

Capital and reserves

Share capital and share premium 5,255,983 5,255,983

Accumulated losses (15,282,105) (12,241,547)

Total equity (10,026,123) (6,985,564)

Non-current liabilities

Borrowings 6 18,538,487 16,187,085

Deferred tax - -

18,538,487 16,187,085

Current liabilities

Trade and other payables 1,352,097 1,344,819

Income tax liability - -

1,352,097 1,344,819

Total liabilities 19,890,583 17,531,904

Total equity and liabilities 9,864,461 10,546,340

Mr. David Kliegl; (General Manager)__________________________) FRC/2013/NIM/00000004949

Mr. Bjorn Bjaaland (Financial Manager)__________________________) FRC/2014/MULTI/00000008950

9

The statement of significant accounting policies on pages 2 to 7 forms an integral part of these

financial statements.


CONDENSED UNAUDITED STATEMENT OF CHANGES IN EQUITYFOR THE FIFTEEN MONTHS ENDED 30 SEPTEMBER 2017

Share Share Accumulated Total

capital premium losses equity

N’000 N’000 N’000 N’000

Balance at 1 July 2015 1,123,220 4,132,763 (6,694,456) (1,438,474)

Total comprehensive loss for the year ended 30 June 2016 - - (5,547,091) (5,547,091)

Balance at 30 June 2016 1,123,220 4,132,763 (12,241,547) (6,985,564)

Balance at 1 July 2016 1,123,220 4,132,763 (12,241,547) (6,985,564)

Total comprehensive loss for the 15 months ended 30 September 2017 - - (3,040,558) (3,040,558)

Balance at 30 September 2017 1,123,220 4,132,763 (15,282,105) (10,026,122)

10

The statement of significant accounting policies on pages 2 to 7 forms an integral part of these financial statements.


CONDENSED UNAUDITED STATEMENT OF CASH FLOWS

FOR THE FIFTEEN MONTHS ENDED 30 SEPTEMBER 201715 months Year

ended ended

30 September 30 June

2017 2016

Notes N'000 N'000

Cash flows from operating activities

(Loss) / profit for the period (3,040,558) (5,547,091)

Adjustments for:

Depreciation 671,366 547,355

Amortisation 5,146 21,273

Operating equipment usage 27,003 32,306

Finance cost 2,304,750.46 5,103,162

Write off of property, plant and equipment 22,845 24,626

Net movement in working capital (7,843) 787,401

Tax asset (738) (11,725)

Net cash provided by operating activities (18,027) 957,307

Cash flows from investing activities

Interest income 1,211 536

Acquisition of property, plant and equipment 5 (208,708) (333,570)

Acquisition of intangible assets (3,556) (10,385)

Net cash provided by investing activities (211,053) (343,419)

Cash flows from financing activities

Payment of related tax on interest on borrowings (103,568) -

Net cash provided by financing activities (103,568) -

Net cash flow for the year ended 30 June 2016 - 613,888

Net cash flow for the 15 months to date (332,648) -

Cash and cash equivalents at the beginning of the period 1,612,776 998,888

Cash and cash equivalents at the end of the period 1,280,128 1,612,776

11

The statement of significant accounting policies on pages 2 to 7 forms an integral part of these financial

statements.


NOTES TO THE FINANCIAL STATEMENTS

1 Segment InformationThe Company has two reportable segments, as described below.

Gaming:This includes the provision of tables and slots gaming facilities.

Hospitality:

QUARTER ENDED 30 SEPTEMBER2017 2016 2017 2016 2017 2016 2017 2016

N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000Revenue

Total revenue for reportable segments 298,744 352,374 520,937 358,767 - - 819,681 711,141

Elimination of inter-segment revenue * - - (32,097) (31,530) - - (32,097) (31,530) Reportable segment revenue 298,744 352,374 488,840 327,237 - - 787,584 679,611

Profit before tax

Reportable segment revenue 298,744 352,374 488,840 327,237 - - 787,584 679,611

Expenses (150,068) (173,802) (196,948) (169,273) (466,935) (479,823) (813,951) (822,899)

Elimination of inter-segment expenses 32,097 31,530 - - - - 32,097 31,530

Depreciation and amortisation - - (138,161) (132,529) (138,161) (132,529)

Net Finance Costs - - - - (199,909) (1,416,349) (199,909) (1,416,349) Loss before tax 180,773 210,101 291,892 157,964 (805,005) (2,028,702) (332,340) (1,660,637)

Reportable segment assets 9,864,461 10,484,056 9,864,461 10,484,056

Reportable segment liabilities 19,890,583 19,130,258 19,890,583 19,130,258

YEAR ENDED 30 JUNE 2016 Gaming Hospitality Unallocated TotalN'000 N'000 N'000 N'000

Revenue

Total revenue for reportable segments 1,402,541 1,653,258 - 3,055,799

Elimination of inter-segment revenue * - (164,354) - (164,354) Reportable segment revenue 1,402,541 1,488,904 - 2,891,445

Profit before tax

Reportable segment revenue 1,402,541 1,488,904 - 2,891,445

Expenses (656,175) (642,242) (1,632,683) (2,931,100)

Elimination of inter-segment expenses 164,354 - - 164,354

Depreciation and amortisation - - (568,628) (568,628)

Net Finance Costs - - (5,103,162) (5,103,162) Loss before tax 910,720 846,662 (7,304,473) (5,547,091)

Reportable segment assets 10,546,340 10,546,340

Reportable segment liabilities 17,531,904 17,531,904

12

Total

This consists of the sale of hotel room accommodation, sale of food and beverages in the Company's restaurants and bars, as well as venue hire, pool club

subscriptions and entrance fees, parking and laundry charges, and other miscellaneous revenue.

Unallocated Costs represents support services to the above segments, and includes Finance and Administration, Human Resources, Information Technology,

Security and other Property related services.

Information regarding the results of each reportable segment is provided below. Performance is measured based on segment profit before tax, as included in

the Company's internal management reports that are reviewed by the Company's General Manager.

Gaming Hospitality Unallocated






2017 2016 2017 2016

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

2 Net finance costs

Net finance costs comprises:

Interest expense 232,091 226,107 1,135,024 577,401

Interest income on bank balances (250) (240) (1,211) (536)

Loss/(Gain) on foreign exchange (31,931) 1,190,482 1,172,148 4,526,297

199,909 1,416,349 2,305,961 5,103,162

3 Taxation

4 (Loss)/earnings per share




2017 2016 2017 2016

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

Weighted number of shares 2,246,437,472 2,246,437,472 2,246,437,472 2,246,437,472

Kobo Kobo Kobo Kobo

Basic (loss)/earning per share (15) (74) (135) (27)

5 Property, plant and equipment

Leasehold land & buildings 24,365 - 24,365 28,175

Infrastructure 0 - 47,010 -

Plant and machinery 6,921 3,176 81,116 87,672

Equipment 4,647 2,996 18,125 124,561

Furniture and fittings - - - 5,136

Motor vehicles - - - 948

Operating equipment 24,140 136 31,381 63,356

Capital work in progress 18,841 4,949 6,712 23,722 78,913 11,257 208,708 333,570

13

In 2013, the Nigerian Investment Promotion Council (NIPC) granted the Company a Pioneer Status for a five year period

with respect to the tourism and hospitality business of the Company, with a retrospective effective commencement

production date of 1 January 2011.

The effective production date was certified by the Industrial Inspectorate Department of the Federal Ministry of

Commerce and Industry on 28 May 2013. In accordance with the provision of the Industrial Development (Income Tax

Relief) Act, the Company's profit attributable to the Pioneer line of business is therefore not liable to income taxes for the

duration of the Pioneer period. The Company incurred tax losses, consequently there was no tax payable in current year.

Basic (loss)/earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by

the weighted average number of ordinary shares in issue during the year.

The Company did not have any instruments with a dilutive effect during the year, thus, basic and diluted loss per share

are equal.

During the period, net additions to property, plant and equipment

is analysed as follows:



Quarter Year

ended ended

30 September 30 June2017 2016

N'000 N'000

6 Borrowings

(a) Non-current

Term facilities (Unsecured) 18,538,487 16,187,085

Total borrowings 18,538,487 16,187,085

(b) Terms and conditions of outstanding loans are as follows




2017 2017 2017 2016

US$'000 N'000 N'000 N'000

Non-current, unsecured

Shareholders:

Ikeja Hotel PlcAt beginning of the period 19,656 6,009,219 5,306,468 3,502,243

Interest capitalised 249 76,057 372,248 189,515

Exchange difference (2,953) 433,226 1,633,662

Related tax on interest (25) (7,606) (37,225) (18,952)

At end of period 19,880 6,074,718 6,074,718 5,306,468

Sun International LimitedAt beginning of the period 21,036 6,429,204 5,672,366 3,745,900




At end of period 21,282 6,501,322 6,501,322 5,672,366

Total shareholders 41,163 12,576,039 12,576,039 10,978,834

Other:Omamo Investment CorporationAt beginning of the year 19,293 5,898,158 5,208,251 3,436,927




At end of period 19,513 5,962,448 5,962,448 5,208,251

60,675 18,538,487 18,538,487 16,187,085

Terms of the above loans:(a) They are unsecured.

(b)

(c ) The loans are denominated in US Dollars.

(d) Interest is capitalised at 5% per annum.

The loan from Omamo Corporation is currently the subject to a legal dispute.

14

The interest rate of 5% (2016: 5%) has been set on the Company’s fixed borrowings. Of these fixed

borrowings 100% (2016:100%) were for periods longer than 12 months. The Company had no unutilised

borrowing facilities at 30 September 2017 (2016: Nil).

Repayment is subject to the board of director's discretion, taking into account the availability of funds

and the Company's working capital requirements.

In terms of its articles of association, apart from temporary loans in the ordinary course of business, the

Company’s borrowings shall not, without the previous sanction of the Company in general meeting, exceed the

sum equivalent to one and half times the aggregate of its paid-up share capital and reserves.



7 Management and support fees

(a) Operating services agreement

-Basic fee

-Incentive fee

-Development, management and technical services fee

(b) Support services agreement

-Basic fee

-Incentive fee

(c) Management and support fees

(based on the structure above) Quarter Quarter 15 months Year

ended ended ended ended30 September 30 September 30 September 30 June

2017 2016 2017 2016N'000 N'000 N'000 N'000

Sun International Management Limited Basic fees 24,590 21,334 124,206 93,372

Incentive fees (9,084) - (6,510) 23,267

Ikeja Hotel Plc Basic fees 3,689 3,200 18,631 14,006

Incentive fees - - 386 3,490

19,195 24,534 136,713 134,135

15

An incentive fee of 1.5% per annum of the adjusted net profit of the Company. This fee is exclusive of any

taxes and is denominated and payable in Naira.

The Company has an agreement with Sun International Management Limited (a subsidiary of Sun

International Limited) until 30 September 2017 to manage the Company's business. In terms of this

agreement, the Company is obligated to pay the following annual fees to Sun International Management

Limited:

A basic fee equal to 3% per annum of the gross revenue of the Company. This is exclusive of any taxes and

is denominated and payable in South African Rands.

An incentive fee of 10% per annum of the adjusted net profit of the Company. This fee is exclusive of any

taxes and is denominated and payable in South African Rands.

A fee of 2.5% per annum of the aggregate cost of new property development projects undertaken by the

Company. This fee is exclusive of any taxes and is denominated and payable in South African Rands.

The Company has an agreement with Ikeja Hotel Plc to provide support services to the Company until 30

September 2017. In terms of this agreement, the Company is obligated to pay the following annual fees to

Ikeja Hotel Plc as follows:

A basic fee equal to 0.45% per annum of the gross revenue of the Company. This is exclusive of any taxes

and is denominated and payable in Naira.



8 Related parties(a) Ultimate holding company

(b) Related party transactions

Quarter Quarter 15 months Year 15 months Year

ended ended ended ended ended ended

30 September 30 September 30 September 30 June 30 September 30 June2017 2016 2017 2016 2017 2016

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

(i) Accounts payableSun International Management Limited

(56,248) (56,622) (258,065) (192,283) (8,949) (7,959)

Ikeja Hotel Plc

(3,689) (3,200) (19,017) (17,496) (13,406) (16,322)

(ii) Other related party transactions include:

AVI Services Limited

(23,421) (23,384) (116,423) (80,289) - -

GM Ibru & Co

(6,000) (6,000) (30,000) (12,563) (33,558) (14,000)

IHL Services Limited

- (2,251) - (5,895) (28,226) (26,131)

Minet Nigeria Limited

- - - - - -

16

Value of goods and services supplied (to) / from the

Company

Is a shareholder in the Company and is

controlled by Goodie M. Ibru, a director of the

Company. It has a support service agreement

with the Company (Note 7(a))

Is controlled by Goodie M. Ibru, a director of

the Company. It provides a staff transport

service to the Company, operates a car hire

business at the Hotel.

The Company is a subsidiary of Sun International Limited incorporated in South Africa. Sun International Limited held 49.33%

of the issued and fully paid share capital of the Company as at 30 June 2017 (2016: 49.33%)

The transaction values and balances with related parties below exclude borrowings, the values of which are disclosed in note

16.

Amount due (to)/from the

Company

Is a firm of attorneys controlled by Goodie M.

Ibru, a director of the Company. It provides

legal services to the Company and rents


the Company. It provides company secretarial

services to the Company.


the Company. It provides insurance broking

services to the Company.

Is a subsidiary of Sun International Limited,

which is a shareholder in the Company.

It has an operating service agreement with the

Company (Note 7(a)).



8 Related parties

(b) Related party transactions

Quarter Quarter 15 months Year 15 months Year

ended ended ended ended ended ended

30 September 30 September 30 September 30 June 30 September 30 June2017 2016 2017 2016 2017 2016

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

Lady Maiden Ibru

- - - - - -

Estate of Late Dr Alex Ibru

- - - - - -

Guy Saries Limited

- - - - - -

(89,358) (91,457) (423,505) (308,526) (84,139) (64,412)

(iii)

Sun International Management Limited - 645 - 1,061 - 82

Ikeja Hotel Plc 1,388 1,936 17,076 9,308 17,715 639

1,388 2,581 17,076 10,369 17,715 721

9 Subsequent events

10 Contingencies

11 Shareholder dispute litigation

The Company has been involved in on-going shareholder and related party disputes as follows:

(a)

17

Accounts receivable (for hospitality services

provided)

The transaction values and balances with related parties below exclude borrowings, the values of which are disclosed in note

16.

Lady Ibru is the wife of the late Dr Alex Ibru, a

former director with an indirect shareholding in

the Company. Lady Ibru rents retail premises

from the Company, for which no rental charge

has been processed.

A former director and indirect shareholder in

the Company. The estate rents hotel

penthouse premises from the Company, which

is currently the subject of a legal dispute. No

rental charge has been processed.

On 23 September 2011, Omamo Investment Corporation (“Omamo”), instituted a winding up petition against the Company, on

grounds that it believed that the Company was insolvent and that the Company had refused to repay its loan when Omamo

demanded repayment. This petition was dismissed by the Federal High Court. As at 30 June 2016, the total loan balance

payable to Omamo was N5.29 billion (30 June 2015: N3.50 billion). Based on the formal agreements duly executed by all the

loan creditors (refer note 18), the loans are repayable at the discretion of the board of directors, taking into account availability

of funds and working capital requirements of the Company provided specific EBITDA targets have been met. Accordingly

none of the loans were due for repayment as at 30 June 2016. There has been no further update in the current financial year.

The Company is subject to various pending litigations and claims arising in the normal course of business. The contingent liabilities

in respect of these pending litigation and claims amounted to N1.3 billion as at 30 September 2017 (2016: N1.3 billion). In addition,

the Company is currently undergoing two tax regulatory reviews with respect to the financial statements of the financial year 2009 to

2015. As at the date of this report, the amount of the obligation with respect to the regulatory review has not been disclosed because

the amount cannot be measured with sufficient reliability. In the opinion of the directors, no material loss is expected to arise from

these claims and audits. Therefore, no provision for any loss arising has been made in the financial statements.

Amount due (to)/from the

Company

No material subsequent events having an effect on the financial position and results of the Company have occurred between 30

September 2017 and the date of this report.


the Company.

Value of goods and services supplied (to) / from the

Company



11 Shareholder dispute litigation

(b)

(c)

(d)

12 Going concern

13 Change in accounting period

18

On 21 May 2012, Omamo Investment Corporation served a notice of demand on the Company, seeking

repayment of its loan. In response thereto on 8 June 2012, the Company applied to the Federal High Court

seeking an enforcement order of the terms of its agreement with Omamo as well as a shareholder in the Company

and related party to Omamo namely Oma Investments Limited ("Oma"). With respect to the latter action, the court

delivered judgement on 3 October 2013, in which it declined to grant the Company's application for an

enforcement order. The Company's Solicitors are currently engaged in the appeal against this decision. The

Appeal Court granted an amended notice to appeal, and the appeal stands adjourned to 20 November 2017.

The board of directors resolved at a board meeting held on 16 March 2017 to change the financial year of the Company

from 30 June to 31 December to bring it in line with its majority shareholders. Consequently, the Company will report

unaudited financial statements for the 15 months to 30 September 2017 and audited financial statements for the

eighteen months to 31 December 2017.

The directors, based on advice from the Company’s solicitors are confident that judgment will be delivered in the

Company’s favour, and that the above litigation contingency will not materialise into a loss for the Tourist Company of

Nigeria Plc (TCN).

The Company incurred losses after taxation amounting to N332 million (2016: N1,660 million) for the quarter ended 30

Septyember 2017 and as of that date had a net liability of N10.0 billion (2016: N7.0 billion).

As noted in Note 11(d), the Company is involved in a lawsuit in which Oma Investment Ltd, a shareholder petitioned the

Federal High Court challenging the legality of the hotel management agreement currently in place for the management

of The Tourist Company of Nigeria Plc (TCN). This case remains adjourned till 15 February 2018 and has not been

concluded. Moreso, the Economic and Financial Crimes Commission (EFCC) has commenced investigation into the

case, but no report has been issued as at the date of approving the financial statements. Furthermore, the majority

shareholder of the Company, Sun International Limited (SIL) has expressed its decision to disinvest in the Company

and exit Nigeria. The process of the disinvestment is still at early stages. Accordingly, the full implications on the

business are yet to be fully determined. In the meanwhile, the Company continues to trade as normal.

The directors have made an assessment of the Company’s ability to continue to trade despite being technically

insolvent. Therefore, the directors have no reason to believe the Company will not remain liquid and able to meet its

obligations as they become due and payable in the year ahead. The directors will continue to review the liquidity position

of the Company on an annual basis.

In addition, the Company has an existing operating management agreement with Sun International Management

Limited (SIML) a subsidiary of Sun International Limited and expects SIML to fully fulfill its obligations as contained in

the existing management agreement. Arrangements are ongoing for a new management agreement which will become

effective at the expiration of the existing management agreement in September 2017.

These financial statements have been prepared on the basis of accounting policies applicable to a going concern.

On 30 October 2012, in a separate suit, Oma Investment Ltd petitioned the Federal High Court challenging the

legality of the hotel management agreement currently in place for the management of The Tourist Company of

Nigeria Plc (TCN). TCN has raised a preliminary objection. On 30 January 2014, the Court dismissed the

preliminary objection. Subsequently, TCN’s solicitors have filed a motion for stay of proceedings transmitted to the

Court of Appeal. On 3 July 2014 the Federal High Court adjourned the matter sine die (indefinitely) until the

matter before the Court of Appeal has been determined. The Court of Appeal adjourned the matter to 22

September 2016, and date of hearing tentaively fixed for 15 February 2018. In the previous year, the Economic

and Financial Crimes Commission (EFCC) commenced its investigation into the case. No report has been issued

as at the date of finalisation of these financial statements.

On 30 October 2012, Omamo and Oma filed a subsequent action against the Company, challenging (inter alia)

further aspects of the agreements to which they are signatories. On 12 November 2013, the matter came up for

hearing at the trial court where a motion for an injunction restraining Oma from making a further demand for

repayment was declined. The Company's solicitors have proceeded to file a similar motion with the Court of

Appeal. Until the motion of appeal is heard, Oma is effectively restrained from taking further action. As at the date

of this report, the court had not yet decided on this action.


FINANCIAL SUMMARY

STATEMENT OF FINANCIAL POSITION

30 Sep 2017 30 Jun 2017 30 Jun 2016 30 Jun 2015 30 Jun 2014

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

Assets

Non-current assets 8,227,102 8,299,408 8,740,461 9,010,340 9,342,010

Current assets 1,637,358 1,697,368 1,805,879 1,375,885 1,255,878

Total assets 9,864,461 9,996,776 10,546,340 10,386,225 10,597,888

Equity and liabilities

Capital and reserves (10,026,123) (9,693,782) (6,985,564) (1,438,473) 1,203,853

Non-current liabilities 18,538,487 18,336,582 16,187,085 10,853,215 8,158,540

Current liabilities 1,352,097 1,353,977 1,344,819 971,483 1,235,495

Total equity and liabilities 9,864,461 9,996,776 10,546,340 10,386,225 10,597,888

15 months 12 months Year ended Year ended Year ended

30 Sep 2017 30 Jun 2017 30 Jun 2016 30 Jun 2014 30 Jun 2014

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

STATEMENT OF COMPREHENSIVE INCOME

Revenue 4,140,203 777,193 2,891,445 3,209,322 3,386,066

Loss before tax (3,040,558) (353,477) (5,547,091) (2,642,326) (602,547)

Tax - - - - -

(Loss)/profit after tax (3,040,558) (353,477) (5,547,091) (2,642,326) (602,547)

Per share data

(135) (16) (247) (118) (27)

(446) (432) (311) (64) 54

19

Net assets/(liabilities) per share is based on net assets/(liabilities) and the weighted average number of issued and fully paid ordinary shares at the

end of each financial period.

(Loss)/earnings per ordinary share (kobo)

Net (liabilities) / assets per ordinary share (kobo)

Loss per share is based on the loss after tax for the financial period and the weighted average number of issued and and fully paid ordinary shares at

the end of each financial period.


STATEMENT OF COMPREHENSIVE INCOME FORECASTFOR THE QUARTER ENDING 31 DECEMBER 2017

N'000

Revenue 921,390

Expenses (1,040,813)

Operating (loss) / profit (119,423)

Finance costs (234,369)

Profit before tax (353,792)

Tax -

Profit after tax (353,792)

Other comprehensive income/(loss) -

Total comprehensive income (353,792)

Weighted average number of shares in issue 2,246,437,472

Earnings per share (kobo) (16)

20


STATEMENT OF COMPREHENSIVE INCOME FORECASTFOR THE EIGHTEEN MONTHS ENDING 31 DECEMBER 2017

N'000

Revenue 4,888,991

Expenses (5,743,010)

Operating (loss) / profit (854,020)

Finance costs (2,540,330)

Loss before tax (3,394,350)

Tax -

Loss after tax (3,394,350)

Other comprehensive income/(loss) -

Total comprehensive loss (3,394,350)

Weighted average number of shares in issue 2,246,437,472

Loss per share (kobo) (151)

21

the tourist company of nigeria plc -...

Documents