NOTORE CHEMICAL INDUSTRIES PLC ANNUAL …notore.com/images/investor_relations/Notore_September_2017_Audited... · Victoria Island Lagos Auditor ... Notore Chemical Industries Plc

NOTORE CHEMICAL INDUSTRIES PLCANNUAL REPORT AND FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 SEPTEMBER 2017


PageCorporate information 3Directors' report 4Statement of directors responsibilities 8Report of the audit committee 9Report of the independent auditor 10

Financial statements

Consolidated statements of profit or loss and other comprehensive income 13Consolidated statements of financial position 14Statements of changes in equity 15Statements of cash flows 17

Note Notes to the financial statements

1.0 General information 182.0 Basis of preparation and adoption of IFRSs 183.0 Changes in accounting policy and disclosures 184.0 Summary of significant accounting policies 194.1 Foreign currency translation 194.2 Trade receivables 194.3 Revenue recognition 194.4 Cash and cash equivalents 194.5 Inventories 194.6 Trade payables 194.7 Provisions 194.8 Property, plant and equipment 204.9 Intangible assets 204.10 Impairment of non-financial assets 204.11 Financial instruments 204.12 Offsetting financial instruments 214.13 Impairment of financial assets 214.14 Income taxation 214.15 Employee benefits 224.16 Leases 224.17 Government grants 224.18 Cost of sales 224.19 Borrowings 224.20 Borrowings costs 234.21 Investment property 234.22 Consolidation 234.23 Segment reporting 23

5 Critical accounting estimates and judgements 236 Financial risk management 247 Revenue 308 Cost of sales 309a Administrative expenses 309b Selling and distribution expenses 3110 Other income 3111 Finance income and costs 3112 Income tax expense 3113 Earnings per share (EPS) 3314 Property, plant and equipment 3415 Investment property 3616 Intangible assets 3817 Inventories 3818 Trade and other receivables 3919 Cash and cash equivalents 3920 Share capital 3921 Retained earnings 3922 Employee benefit obligations 4023 Borrowings 4124 Trade and other payables 4225 Related party transactions 4226 Contingent liabilities 4327 Investments in subsidiaries 4428 Events after the statement of financial position date 4429 Going concern 4430 Restatement of comparative financial information 45

Other informationStatement of value added 48Five year financial summary - group 49Five year financial summary - company 50


Corporate information

Directors

General Dr. Yakubu Gowon, GCFR (Chairman)Mr. Onajite P. Okoloko (Managing Director/CEO)Mr. Michael OsimeMr. Richard HerbEngr. Mike Orugbo, JPChief Odoliyi LolomariMr. Ike OsakweMr. Michael JansaMr. Hassan BadrawiMr. Bashir LebadaDr. Ini UruaMr. Geoffroy DedieuMr. Seyi OwodunniMr. Bernard LongeMr. Femi Agbaje (Executive Director)

Company secretary

Mrs. Otivbo Saleh6th Floor, Keystone Bank BuildingKeystone Bank CrescentOff Adeyemo Alakija StreetVictoria IslandLagos

Auditor

PricewaterhouseCoopersChartered AccountantsLandmark Towers5B, Water Corporation RoadVictoria IslandLagos

Registered office

Notore Industrial ComplexOnneRivers StateNigeria

Registration number

640303

Principal bankers

Skye Bank PlcFirst City Monument Bank PlcEcobank Nigeria PlcUnion Bank of Nigeria PlcUnited Bank for Africa PlcDiamond Bank PlcGuaranty Trust Bank Plc

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DIRECTORS' REPORT

INCORPORATION AND ADDRESS

PRINCIPAL ACTIVITIES

RESULTS

DIRECTORS

General Dr. Yakubu Gowon, GCFR Nigerian (Chairman)Mr. Onajite P. Okoloko Nigerian (Managing Director/CEO)Mr. Michael Osime NigerianMr. Richard Herb BritishEngr. Mike Orugbo, JP NigerianChief Odoliyi Lolomari NigerianMr. Ike Osakwe NigerianMr. Michael Jansa AmericanMr. Hassan Badrawi EgyptianMr. Bashir Lebada CanadianDr. Ini Urua NigerianMr. Geoffroy Dedieu FrenchMr. Seyi Owodunni NigerianMr. Bernard Longe NigerianMr. Femi Agbaje Nigerian (Executive Director)

DIRECTORS' SHAREHOLDING

DirectorsNumber of

shares held at30 September 2017

Number ofshares held at

30 September 2016

General Dr. Yakubu Gowon, GCFR Nil Nil 1,246,618,670 1,246,618,670

Mr. Michael Osime (Indirect - Notore Chemical Industries (Mauritius) Ltd) 1,242,400,000 1,242,400,000 Mr. Richard Herb (Indirect - Notore Chemical Industries (Mauritius) Ltd) 1,242,400,000 1,242,400,000 Engr. Mike Orugbo, JP 34,333,330 34,333,330 Chief Odoliyi Lolomari Nil Nil Mr. Ike Osakwe Nil Nil Mr. Michael Jansa Nil Nil Mr. Hassan Badrawi Nil Nil Mr. Bashir Lebada Nil Nil Dr. Ini Urua Nil Nil Mr. Geoffroy Dedieu Nil Nil Mr. Seyi Owodunni Nil Nil Mr. Bernard Longe Nil Nil Mr. Femi Agbaje Nil Nil

The shareholding interests of the Directors in the Issued Share Capital of the Company as recorded in the Register of Directors’ Shareholdings and/or asnotified by the Directors for the purposes of Sections 275 and 276 of the Companies and Allied Matters Act, 2004 are as follows:

Mr. Onajite P. Okoloko (Indirect - Notore Chemical Industries (Mauritius) Ltd and Okmine Global Services Ltd)

During the year under review and to the date of this report, in addition to Mr. Onajite P. Okoloko, Mr. Michael Osime and Mr. Richard Herb, the other Directorsrepresenting Notore Chemical Industries (Mauritius) Limited on the Board are Mr. Mike Jansa, Mr. Seyi Owodunni and Mr. Hassan Badrawi. Dr. Ini Uruarepresents Africa Finance Corporation while Mr. Geoffroy Dedieu and Mr. Bernard Longe represent TY Holdings Limited.

In accordance with the provisions of the Companies and Allied Matters Act, the Directors of Notore Chemical Industries Plc hereby present their reporttogether with the audited financial statements for the year ended 30th September 2017 to the members of the Company.

Notore Chemical Industries Plc was incorporated in Nigeria on 30th November 2005, as a private limited liability company, and is domiciled in Nigeria. Itsregistered office address is Notore Industrial Complex, Onne, River State, Nigeria. On 13th June 2014, the Company was re-registered as a public limited

The principal activities of the Company are to manufacture, treat, process, produce, supply and deal in nitrogenous fertilizer and all substances suited toimproving the fertility of soil and water. The Company has a 500,000 metric tonne Urea Plant in Onne, Rivers State, Nigeria.

The Company’s financial statements for the year ended 30th September 2017 are as stated on pages 13 - 47. The total comprehensive income for the yearended 30th September 2017 is N3.99 billion and same has been transferred to retained earnings.

The Directors who held office during the year to the date of this report were:

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DIRECTORS' REPORT (CONT'D)

SHAREHOLDING

Number of holding Number of shareholders

Number of shares

Percentage holding (%)

Nigerian Shareholders 1 – 50,000,000 3 86,914,500 5.39 50,000,001 – 100,000,000 1 79,048,000 4.90 100,000,001 – 150,000,000 1 129,629,630 8.04

5 295,592,130 18.33 Foreign shareholders 2 1,316,474,070 81.67

7 1,612,066,200 100.00

Shareholder Number of shares

Percentage holding (%)

Notore Chemical Industries (Mauritius) Limited (Foreign) 1,242,400,000 77.07 TY Holdings Limited 129,629,630 8.04 Africa Finance Corporation 79,048,000 4.90 NPK Investment Limited (Foreign) 74,074,070 4.60 Engr. Mike Orugbo, JP 34,333,330 2.13 Okmine Global Services Limited 4,218,670 0.26 STANBIC IBTC Trustees Limited, Employee Stock Option (ESOP) 48,362,500 3.00

1,612,066,200 100.00

CORPORATE GOVERNANCE AND STATEMENT OF COMPLIANCE

DIRECTORS' INTERESTS IN CONTRACTS

SUBSIDIARY COMPANIES

Subsidiary Company Authorised share Capital

Issued share capital

Number of shares alloted to holding

company

Value of shares alloted to

holding company Units Units Units Naira

Notore Power Limited (Inactive) 10,000,000 10,000,000 9,999,999 9,999,999 Notore Seeds Limited (Inactive) 10,000,000 10,000,000 9,999,999 9,999,999 Notore Foods Limited (Inactive) 10,000,000 10,000,000 9,999,999 9,999,999 Notore Supply and Trading Limited BVI (Dormant) 50,000 no par

single class 100 single 100 single -

1,300 1,300 1,300 Notore Industrial City Limited (Inactive) 10,000,000 10,000,000 9,999,999 9,999,999

KEY DISTRIBUTORS

ABJ Nigeria LimitedAF & C BlendingAlbabello Trading Co. Limited Alhaji Bashir MaccidoAlhaji Sadiku Shehu & Sons LimitedAl-Yuma VenturesAnasiyya & Sons Nig LimitedBaralmo Global Resources Nig. LimitedDoreo PartnersHulhulde Nigeria LimitedI.H Fako Nigeria LimitedKibiya Consults LimitedMFB Fertilizer and Chemicals Co. LtdMusa Biu Garko LimitedRingim FarmsR & Partners Ventures Nigeria LimitedSalisu & Sons Nigeria LimitedSalnas Integrated Services LimitedSamseed GlobalSMDD Nigeria Limited

The Company transacted business with the following key distributors during the year:

According to the Register of Members, as at 30 September 2017, the spread of shareholding in the Company is as follows:

As a limited liability company, Notore imbibed the highest standards of corporate governance and best practices and conducts its business and operations inan open and transparent manner in line with international best practices. The Company is dedicated to the promotion of the interests of its shareholders andrecognises the importance of compliance with the principles of good corporate governance under the Security and Exchange Commission's (SEC) Code ofCorporate Governance for Public Companies in Nigeria (the "SEC Code"). In this regard and although it is not an enforceable statute, Notore, in line with itsstatus as a public limited liability company, expects to fully comply with the SEC Code, and align its operations with international best practices as theCompany recognises the importance of its adoption as a valuable contribution to long term business prosperity and accountability to shareholders.

Save for the Managing Director of the Company who is also the Chairman of Eroton Exploration and Production Company Limited (''Eroton''), for the purposeof Section 277 of the Companies and Allied Matters Act, 2004, none of the Directors notified the Company of any direct or indirect interest in contracts orproposed contracts with the Company during the year under review. The Company entered into a 20 year contract with Eroton for the supply of gas whichcame into full force on 31st March 2016.

The Company has six subsidiaries in line with its long term plans and strategies. As of 30th September 2017, only one of the subsidiaries (Notore Supply andTrading Mauritius Limited) is active. The shareholding of Notore Chemical Industries Plc in these subsidiaries are as follows:

Notore Supply and Trading Mauritius Limited (Active)

According to the Register of Members as at 30th September 2017, the following are the Shareholders of the Company:

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DIRECTORS' REPORT (CONT'D)

ISO 9001 CERTIFICATION

UREA SUPER GRANULES PROJECT

ACHIEVEMENTS AT THE PLANT

GRANTING OF LICENSE AS OIL AND GAS FREE ZONE DEVELOPER

EMPLOYMENT AND EMPLOYEESEMPLOYMENT OF DISABLED PERSONS

EMPLOYEE HEALTH, SAFETY AND WELFARE

EMPLOYEE TRAINING AND INVOLVEMENT

The Company operates a robust training and developmental strategy with the overall objective of equipping employees with the right competencies.Employees are also involved in the affairs of the Company through various profit and productivity-related incentive schemes, which at the determined periodwill allow them a share in the profits of the Company.

In order to improve the reliability of the Plant from 57% to 67% and increase Urea production from 1,050 MTPD to 1,300 MTPD, Project 1300 was conceivedto attend to targeted critical constraints identified as limiting the Plant and same was achieved upon completion of Project 1300.On 11 November 2016, the Plant was shut down for 17 days to undertake Project 1300 which addressed major constraints such as CO2 limitation resultingfrom the LTS Catalyst End-of-Run and frequent failures of Granulation equipment. A project cost of US$2.7 million was earmarked for the exercise which had a 9% overrun. Project 1300 was successfully concluded and production output ofthe Plant improved from 1,050 MTPD to 1,300 MTPD. In January 2017, the Plant recorded the highest production of Urea (39,520MT) since November 2012.Currently, the Ammonia Plant is operating at 86% rate while Urea is at 94%.Subsequent to the challenges of severe gas shortages experienced in 2013 and 2014, gas supply to the Plant has attained a high level of stability andreliability following the long term Gas Supply Agreement entered into with Eroton Exploration and Production Company Limited which has ensuredimprovement in the uptime of the Plant.

The Company has a policy of fair consideration of job applications by disabled persons having regard to their abilities and aptitude. The Company’s policyprohibits discrimination of disabled persons in the recruitment, training and career development of its employees.

The Company enforces strict health and safety rules and practices within the work environment, which are reviewed and tested regularly. Fire prevention andfire-fighting equipment are installed in strategic locations within the Company’s premises. The Company provides free medical care for its employees and theirfamilies through designated hospitals and clinics under a health Insurance Scheme.The Company operates a Group Life and Employee Compensation Scheme for the benefit of its Employees. It also operates a contributory pension schemebased on the provisions of the Pension Reform Act 2014.

The Company was on 4 December 2017 granted license by the Oil and Gas Free Zones Authority as a Free Zone Developer in the Oil and Gas Free Zone,Onne, Rivers State of Nigeria. By this license, the Company's entire land area (558.623 Hectares) is now designated an Oil and Gas Free Zone area, while theCompany's fertilizer plant located within this Free Zone area will now be deemed a business operating within the Oil and Gas Free Zone, Onne.

The Company in its commitment to improving product/service quality, processes and customer satisfaction, has transited from its ISO 2001: 2008 QualityManagement System (QMS) to the new ISO 9001:2015 Quality Management System (QMS) international standard. In this regard, the Company underwenttwo audit stages conducted by Bureau Veritas (ISO External Auditors). The ISO External Auditors using the new ISO 9001:2015 international standard, haveadjudged our QMS as being compliant with the new ISO standard and our Company was adjudged worthy by UKAS – a United Kingdom-based AccreditationBody, in conjunction with Bureau Veritas Certification Holding – to be admitted into the global league of about five percent (5%) of companies operating aQuality Management System (QMS) that meets the new ISO 9001:2015 standard. This is a testimony to the Company's long commitment to quality productsand services, total customer satisfaction and continuous performance improvement in its business operations.

The Company has been championing the introduction of Urea Super Granules (USG) into the Nigerian market for application by rice producers in floodedfarmlands since year 2013. USG is simply Urea compacted into big granules (2.7g per granule) so that it can be applied via deep placement in flooded ricefields and the Company has taken the lead in promoting its widespread adoption across the country. In recognition of the potential benefits of the USG and itsadvantages over the conventional urea fertilizer for rice farmers, the Company has attracted the interest and partnership of the Africa Enterprise ChallengeFund (AECF).

The Africa Enterprise Challenge Fund (AECF) is a "Special Partnership Initiative" of the Alliance for a Green Revolution in Africa (AGRA), with fundingprovided by a consortium and awarded to successful applicants after demand-led competitive bidding rounds. The focus of the Fund is on the agri-businesssector, access to rural financial services and renewable energy. The schemes include projects with an entirely rural focus or projects that would benefit boththe rural and urban poor. The consortium includes the Conservative Group to Assist the Poor (CGAP); the UK's Department for International Development(DFID); the International Fund for Agricultural Development (IFAD) and the Danish Ministry of Foreign Affairs (Danish MoFA) amongst others. To date, theCompany has recieved a total of US$300,000 from AECF as support for the development of the Company's Urea Super Granules business. The fundsreceived have been utilized on the following activities in the execution of the project: (a) Fabrication of briquetting machines;(b) setting up of a productionplatform for the installation of briquetting machines (c) Acquiring and branding of tricycles for re-distribution of small packs of Urea in rural communities; (d)Training of Staff, and (e) Direct marketing activities.

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NOTORE CHEMICAL INDUSTRIES PLCSTATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 SEPTEMBER 2017

(All amounts are in thousands of Naira, unless otherwise stated)

Group

Share capital

Share premium

Foreign currency

translation reserve

Asset revaluation

reserveRetained earnings Total equity

N'000 N'000 N'000 N'000 N'000 N'000Note

Balance at 1 October 2014 806,033 27,995,916 (96) - (10,438,494) 18,363,359

Loss for the year - - - - (11,871,623) (11,871,623)

Other comprehensive income:Remeasurements of post-employment benefit obligations, net of tax - - - - 975,908 975,908 Currency translation difference - - 139,607 - - 139,607

Total comprehensive loss for the year - - 139,607 - (10,895,715) (10,756,108)

Balance at 30 September 2015 806,033 27,995,916 139,511 - (21,334,209) 7,607,251

Balance at 1 October 2015 806,033 27,995,916 139,511 - (21,334,209) 7,607,251

Loss for the year - - - - (12,016,862) (12,016,862)

Other comprehensive income:PPE revaluation surplus 14 - - - 46,090,430 - 46,090,430 Remeasurements of post-employment benefit obligations, net of tax - - - - 20,008 20,008 Currency translation difference - - 267,451 - - 267,451

Total comprehensive loss for the year - - 267,451 46,090,430 (11,996,854) 34,361,027

Balance at 30 September 2016 806,033 27,995,916 406,962 46,090,430 (33,331,063) 41,968,278

Balance at 1 October 2016 806,033 27,995,916 406,962 46,090,430 (33,331,063) 41,968,278

Profit for the year - - - - 8,652,434 8,652,434

Other comprehensive income:Revaluation surplus released to retained earnings - - - (4,729,891) 4,729,891 - Remeasurements of post-employment benefit obligations, net of tax - - - - 65,559 65,559 Currency transalation difference - - 618 - - 618

Total comprehensive profit for the year - - 618 (4,729,891) 13,447,884 8,718,611

Balance at 30 September 2017 806,033 27,995,916 407,580 41,360,539 (19,883,179) 50,686,889

The notes on pages 18 to 47 are an integral part of these financial statements.

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NOTORE CHEMICAL INDUSTRIES PLCSTATEMENTS OF CHANGES IN EQUITYFOR THE YEAR ENDED 30 SEPTEMBER 2017


Company

Share capital Share

premium

Asset revaluation

reserveRetained earnings Total equity

N'000 N'000 N'000 N'000 N'000Note

Balance at 1 October 2014 806,033 27,995,916 - (11,011,940) 17,790,009

Loss for the year - - - (11,643,684) (11,643,684)

Other comprehensive income:Remeasurements of post-employment benefit obligations, net of tax - - - 975,908 975,908

Total comprehensive loss for the year - - - (10,667,776) (10,667,776)

Balance at 30 September 2015 806,033 27,995,916 - (21,679,716) 7,122,233

Balance at 1 October 2015 806,033 27,995,916 - (21,679,716) 7,122,233

Loss for the year - - - (12,018,149) (12,018,149)Other comprehensive income:PPE revaluation surplus 14 - - 46,090,430 - 46,090,430 Remeasurements of post-employment benefit obligations, net of tax - - - 20,008 20,008

Total comprehensive loss for the year - - 46,090,430 (11,998,141) 34,092,289

Balance at 30 September 2016 806,033 27,995,916 46,090,430 (33,677,857) 41,214,522

Balance at 1 October 2016 806,033 27,995,916 46,090,430 (33,677,857) 41,214,522

Profit for the year - - - 8,716,990 8,716,990

Other comprehensive income:Revaluation surplus released to retained earnings - - (4,729,891) 4,729,891 - Remeasurements of post-employment benefit obligations, net of tax - - - 65,559 65,559

Total comprehensive loss for the year - - (4,729,891) 13,512,440 8,782,549

Balance at 30 September 2017 806,033 27,995,916 41,360,539 (20,165,417) 49,997,071


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NOTORE CHEMICAL INDUSTRIES PLCSTATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 30 SEPTEMBER 2017


Note 30 Sept 201730 Sept 2016

Restated 30 Sept 201730 Sept 2016

RestatedN'000 N'000 N'000 N'000

Cash flows from operating activities:Loss on ordinary activities before taxation (2,148,135) (11,835,606) (2,083,579) (11,836,893)

Adjustments for :Depreciation 14 8,015,317 3,259,054 8,014,770 3,258,540 Property, plant and equipment written-off 14 219,949 - 219,949 - Amortisation of intangible assets 16 - 28 - 28 Current service cost and interest on gratuity 22 366,406 344,072 366,406 344,072 Fair value adjustment on investment property 10 (564,281) (1,812,555) (564,281) (1,812,555)Currency translation difference 618 267,451 - - Net adjustments for non-cash items 8,038,009 2,058,050 8,036,844 1,790,085 Interest received 11 (393) (508) (393) (508)Interest paid 11 9,091,228 14,243,856 9,091,228 14,243,856 Gratuity paid 22 (176,694) (182,322) (176,694) (182,322)Increase in gratuity plan asset 22 (465,950) (100,506) (465,950) (100,506)Income taxes paid 12 - (139,646) - (139,646)

Changes in working capital: Increase in inventories (423,254) (472,791) (423,254) (472,791)Decrease in trade and other receivables 98,360 1,010,546 97,677 524,586 (Decrease)/increase in trade and other payables (6,749,927) 5,013,134 (6,804,347) 5,759,643 Net cash generated from operating activities 7,263,243 9,594,207 7,271,532 9,585,504

Cash flows from investing activities:Purchases of property, plant and equipment 14 (431,632) (610,647) (431,632) (609,106) Investment in subsidiary - - (10,000) - Interest received 11 393 508 393 508

Net cash used in investing activities (431,239) (610,139) (441,239) (608,598)

Cash flows from financing activities:Repayments of borrowings 23 (9,422,375) (6,496,751) (9,422,375) (6,496,751)Changes in term loan arising from reclassification (to)/from bank overdraft 23 (20,263,869) 27,546,499 (20,263,869) 27,546,499 Interest paid 11 (9,091,228) (14,243,856) (9,091,228) (14,243,856)

Net cash (used in)/generated from financing activities (38,777,472) 6,805,892 (38,777,472) 6,805,892

Net (decrease)/increase in cash and cash equivalents (31,945,468) 15,789,960 (31,947,179) 15,782,798 Cash and cash equivalents at beginning of year (4,657,115) -20,447,075 (4,663,747) (20,446,545)

Cash and cash equivalents at end of year 19 (36,602,583) (4,657,115) (36,610,926) (4,663,747)


CompanyGroup

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NOTORE CHEMICAL INDUSTRIES PLC


1.0 General information

The address of the company's registered office is:Notore Industrial ComplexOnneRivers StateNigeria

2.0 Basis of preparation and adoption of IFRSs

3.0

a) New and amended standards adopted by the group

The following standards have been adopted by the group for the first time

b) New accounting standards issued but not yet adopted

IFRS 16, 'Leases' establishes principles for the recognition, measurement, presentation and disclosure of leases, with the objective of ensuringthat lessees and lessors provide relevant information that faithfully represents those transactions. This will result in almost all leases beingrecognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (theright to use the leased item) and a financial liability to pay rentals are recognised. The only exception are short term and low-value leases. Theaccounting for lessors will not significantly change. The standard is effective for annual periods beginning on or after 1 January 2019. TheCompany will assess the impact of IFRS 16.

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.

Amendments to IAS 1, "Presentation of financial statements" gives clarification on materiality and aggregation, presentation of subtotals, thestructure of financial statements and the disclosure of accounting policies. The amendments form a part of the IASB’s Disclosure Initiative, whichexplores how financial statement disclosures can be improved. The amendments are effective from 1 January 2016.

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. Thecomplete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement offinancial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories forfinancial assets: amortised cost, fair value through other comprehensive income and fair value through profit or loss. The standard is effective foraccounting periods beginning on or after 1 January 2018. Early adoption is permitted. The Company is assessing IFRS 9’s full impact.

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principles for reporting useful information tousers of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts withcustomers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain thebenefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. Thestandard is effective for annual periods beginning on or after 1 January 2017 and earlier application is permitted. The Company is assessing theimpact of IFRS 15.

Notore Chemical Industries Plc (''the Company'') was incorporated on 30 November 2005 to manufacture and deal in nitrogenous fertilizers andall substances suited to improving the fertility of soil and water. The company fully rehabilitated a 500,000 metric tonne Urea Plant in Onne,Rivers State, Nigeria and commenced commercial production in the first quarter of 2010. It is a subsidiary of Notore Chemical Industries

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 SEPTEMBER 2017

The consolidated financial statements of Notore Chemical Industries Plc have been prepared in accordance with International Financial ReportingStandards (IFRS) and IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The consolidated financialstatements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, plant and machineryand investment property.

The principal activities of the company are to manufacture, treat, process, produce, supply and deal in nitrogenous fertilizer and all substancessuited to improving the fertility of soil and water.

These financial statements are presented in Nigerian Naira which is the functional currency of the primary economic environment in which theparent company operates. The financial statements have been rounded to the nearest thousands Naira (NGN'000), except where otherwiseindicated.

The consolidated financial statements has been prepared through the consolidation of the following subsidiaries with the Company. Thesubsidiaries are: Notore Supply and Trading Mauritius Limited, Notore Power Limited, Notore Foods Limited, Notore Seeds Limited and NotoreIndustrial City Limited

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requiresmanagement to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree ofjudgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.These financial statements were authorised for issue by the board of directors on ………………………. 2018.

Changes in accounting policy and disclosures

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 October 2016 andbeyond, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financialstatements of the Company, except the following set out below:

Amendments to IAS 7, "Statement of Cash Flows" intended to clarify IAS 7 to improve information provided to users of financial statementsabout an entity's financing activities. The amendments requires that the following changes in liabilities arising from financing activities aredisclosed (to the extent necessary): changes from financing cash flows, changes arising from obtaining or losing control of subsidiaries or otherbusinesses, the effect of changes in foreign exchange rates, changes in fair values and other changes. They are effective for annual periodsbeginning on or after 1 January 2017, with earlier application being permitted. The amendments does not have significant impact on thecompany's reporting.

18




4.0 Summary of significant accounting policies

4.1 Foreign currency translation

(a) Functional and presentation currency

(b) Transactions and balances

(c) Group companies

(i)(ii)

(iii) all resulting exchange differences are recognised in profit or loss.

4.2 Trade receivables

4.3 Revenue recognition

4.4 Cash and cash equivalents

4.5 Inventories

4.6 Trade payables

4.7 Provisions

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, cash balances with banks, other short term highlyliquid investments with original maturity of three months or less and bank overdrafts. In the consolidated balance sheet, bank overdrafts areshown within borrowings in current liabilities.

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finishedgoods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normaloperating capacity), but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less thecosts of completion and applicable variable selling expenses. If carrying value exceeds net realizable amount, a write down is recognized. Thewrite-down may be reversed in a subsequent period if the circumstances which caused it no longer exist.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accountspayable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Ifnot, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortisedcost using the effective interest method.

Provisions for legal claims are recognised when: the Company has a present legal or constructive obligation as a result of past events; it isprobable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are notrecognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering theclass of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the sameclass of obligations may be small.

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied to thirdparties in the normal course of business, stated net of discounts, returns and value added taxes. The company recognises revenue when theamount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity. Depending on the terms ofsales, revenue recognition could be at point of dispatch or upon customer's acknowledgement of delivery.

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

Trade receivables are amounts due from customers for sale of fertilizer products in the ordinary course of business. If collection is expected inone year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, lessprovision for impairment.

income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonableapproximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at therate on the dates of the transactions); and

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistentlyapplied to all the periods presented, unless otherwise stated.

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates(‘the functional currency’). The financial statements are presented in Naira which is the group's functional currency.

The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy) that have a functionalcurrency different from the presentation currency are translated into the presentation currency as follows:

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions orvaluations where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from thetranslation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss within ‘finance incomeor cost’. All other foreign exchange gains and losses are presented in profit or loss within ‘other income or expenses’.

19




4.8 Property, plant and equipment

Asset category Depreciation rate (%)Motor vehicle 25Computer equipment 33Office equipment 25

Asset category Depreciation rate (%)Buildings 2Plant and machinery 5

4.9 Intangible assets

4.10 Impairment of non-financial assets

4.11 Financial instruments

(i) Financial assets

(a) Loans and receivables

(b) Derecognition

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the company has transferredsubstantially all risks and rewards of ownership.

Depreciation is calculated using the straight-line method to allocate their revalued amounts, net of their residual values, over their estimateduseful lives. Freehold is not depreciated but leasehold land and leasehold improvements is depreciated over the remaining lease term. On anannual basis, the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset'soriginal cost is transferred from asset revaluation reserves account to retained earnings through other comprehensive income. For Buildings andPlant & Machinery, depreciation is calculated as follows:

Computer software licences are acquired and recognized at acquisition cost less accumulated amortisation and any accumulated impairmentlosses. Subsequent expenditures on software are capitalised only when it increases the future economic benefits of the related software.Software maintenance costs are recognized as expenses in the profit and loss as they are incurred. Amortisation is recognized in profit and lossaccount on a straight-line basis over the estimated useful life of the software, from the date it is available for use. The estimated useful life ofsoftware is three years and this is reassessed annually.

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carryingamount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverableamount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessingimpairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financialassets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

The Company classifies its financial assets as loans and receivables. The classification depends on the purpose for which the financial assetswere acquired. Management determines the classification of financial assets at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. TheCompany’s loans and receivables comprise trade receivables, and cash and cash equivalents, and are included in current assets due to theirshort-term nature. Loans and receivables are initially recognized at the amount expected to be received, less, when material, a discount to reducethe loans and receivables to fair value. Subsequently, loans and receivables are carried at amortised cost less any impairment.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflectscurrent market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage oftime is recognised as interest expense.

Property, plant and equipment (excluding land & building and plant & machinery) are initially recognised at cost and subsequently stated athistorical cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to theacquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the company and the cost can be measured reliably.Repairs and maintenance costs are charged to the income statement during the period in which they are incurred.

The major categories of property, plant and equipment (excluding land & building and plant & machinery) are depreciated on a straight-line basisas follows:

The assets’ residual values, depreciation method and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimatedrecoverable amount.

Land & Building and Plant & Machinery are recognised at fair value based on periodic, but at least triennial, valuations by external independentvaluers, less subsequent depreciation. A revaluation surplus is credited to other reserves in shareholders’ equity.

The Group allocates the amount initially recognized in respect of an item of property, plant and equipment to its significant parts and depreciatesseparately each of such part. The carrying amount of a replaced part is derecognized when replaced. Impairment losses and gains and losses ondisposals of property, plant and equipment are included in the statement of profit or loss. Gains and losses on disposals are determined bycomparing the proceeds with the carrying amount.

20




(ii) Financial liabilities at amortised cost

(c ) Derecognition

4.12 Offsetting financial instruments

4.13 Impairment of financial assets

Assets carried at amortised cost

4.14 Income taxation

(a) Current income tax

(b) Deferred income tax

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in thecountries where the entities in the Group operate and generate taxable income. Management periodically evaluates positions taken in tax returnswith respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis ofamounts expected to be paid to the tax authorities.

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities andtheir carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted orsubstantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferredincome tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will beavailable against which the temporary differences can be utilised.Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, associates and jointarrangements, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the group and itis probable that the temporary difference will not reverse in the foreseeable future. Generally, the group is unable to control the reversal of thetemporary difference for associates except where there is an agreement in place that gives the group the ability to control the reveral of thetemporary difference.Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries, associates and jointarrangements only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit availableagainst which the temporary difference can be utilised.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current taxliabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either thesame taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default ordelinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and whereobservable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economicconditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s originaleffective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated incomestatement. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest ratedetermined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring afterthe impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment lossis recognised in the consolidated income statement.

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relatesto items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income ordirectly in equity, respectively.

Current income tax is the amount of income tax payable on the taxable profit for the year determined in accordance with the Companies IncomeTax Act (CITA). Education tax is assessed at 2% of the chargeable profits.

Financial liabilities are classified as financial liabilities at amortised cost. Financial liabilities are recognised initially at fair value and, in the case offinancial liabilities at amortised cost, inclusive of directly attributable transaction costs. The subsequent measurement of financial liabilitiesdepends on their classification as follows:These include trade payables and bank borrowings. Trade payables are initially recognized at theamount required to be paid, less, when material, a discount to reduce the payables to fair value. Subsequently, trade payables are measured atamortised cost using the effective interest method. Bank borrowings are recognised initially at fair value, net of any transaction costs incurred,and subsequently at amortised cost using the effective interest method. These are classified as current liabilities if payment is due within twelvemonths. Otherwise, they are presented as non-current liabilities.

Financial assets and liabilities are derecognised when the rights to receive cash flows from the investments or settle obligations have expired orhave been transferred and the company has transferred substantially all risks and rewards of ownership.

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset therecognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets isimpaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence ofimpairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events)has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

21




4.15 Employee benefits

(i) Defined contribution scheme (Pension obligations)

(ii) Gratuity Scheme

(iii) Profit-sharing and bonus plans

4.16 Leases

4.17 Government grants

4.18 Cost of sales

4.19 Borrowings

Grants from the government are not recognised until there is reasonable assurance that the grant will be received and the Company will complywith all attached conditions. Government grants are recognised in the income statement so as to match with the related costs that they areintended to compensate.

Cost of sales is primarily comprised of direct materials and supplies consumed in the manufacture of product, as well as manufacturing labor,depreciation expense and direct overhead expense necessary to acquire and convert the purchased materials and supplies into finished product.Cost of sales also includes the cost of haulage and export grant credit.

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; anydifference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of theborrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all ofthe facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probablethat some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of thefacility to which it relates.

Past-service costs are recognised immediately in income statement. The net interest cost is calculated by applying the discount rate to the netbalance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the income

The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profitattributable to the company’s shareholders after certain adjustments. The group recognises a provision where contractually obliged or wherethere is a past practice that has created a constructive obligation.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-linebasis over the period of the lease.

The group leases certain property, plant and equipment. Leases of property, plant and equipment where the group has substantially all the risksand rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fairvalue of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, areincluded in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as toproduce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquiredunder finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

The group operates various post-employment schemes, including both a defined contribution scheme and a defined benefit obligation.

The group operates a defined contribution pension scheme for its employees in line with the provisions of the Pension Reform Act. A definedcontribution plan is a pension plan under which the company pays fixed contributions into a separate entity. The group has no legal orconstructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating toemployee service in the current and prior periods.

The group’s contributions to the defined contribution schemes are charged to the statement of profit or loss for the period to which they relate.The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extentthat a cash refund or a reduction in the future payments is available.

The Company operates a defined benefit gratuity scheme for its employees. The employees' retirement benefits under the gratuity schemedepends on the individual's years of service and gross salaries at the end of each completed year.

The risk that the retirement benefits could cost more than expected or that the return on the investments is lower than expected remains with theCompany, and may increase the Company’s obligation. Lump-sum benefits payable upon retirement or resignation of employment are fullyaccrued over the service lives of employees of the Company. The liability recognised in the balance sheet in respect of the unfunded part ofgratuity scheme is the present value of the defined benefit obligation at the balance sheet date. The defined benefit obligation is calculatedannually by an independent actuary using the projected unit credit method. The present value of the defined benefit obligation is determined bydiscounting the estimated future cash outflows using interest rates of the Federal Government of Nigeria bonds. Actuarial gains or losses arisingfrom experience adjustments and changes in actuarial assumptions are charged or credited in full to equity in other comprehensive income in theperiod in which they arise.

22




4.20 Borrowings costs

4.21 Investment property

4.22 Consolidation

(a) Subsidiaries

(b) Changes in ownership interests in subsidiaries without change of control

(c) Disposal of subsidiaries

4.23 Segment reporting

5 Critical accounting estimates and judgements

5.1 Impairment

i Impairment of non-financial assets

Operating segment is reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). TheCODM,who is responsible for allocating resources and assessing performance of the operating segment has been identified as the GroupLeadership Council. The Group’s reportable segment has been identified on a product basis as Fertilizer and the Group is a one segmentbusiness.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of futureevents that are believed to be reasonable under the circumstances. The group makes estimates and assumptions concerning the future. Theresulting accounting estimates will by definition, seldom equal the related actual results.

The company reviews other non-financial assets for possible impairment if there are events or changes in circumstances that indicate that thecarrying values of the assets may not be recoverable, or at least at every reporting date, when there is any indication that the asset might beimpaired. The Company is of the opinion that there is no impairment indicator on its non-financial assets as at the reporting date.

An operating segment is a component of an entity: that engages in business activities from which it may earn revenues and incur expenses(including revenues and expenses relating to transactions with other components of the same entity); whose operating results are regularlyreviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess itsperformance; and (c) for which discrete financial information is available.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets thatnecessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time asthe assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowingspending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs arerecognised in profit or loss in the period in which they are incurred.

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group is classified as investmentproperty. Investment property also includes property that is being constructed or developed for future use as investment property. Land heldunder operating leases is classified and accounted for by the Group as investment property when the definition of investment property wouldotherwise be met. The operating lease is accounted for as if it were a finance lease.

Investment property is measured initially at its cost, including related transaction costs and (where applicable) borrowing costs. After initialrecognition, investment property is carried at fair value. Changes in fair values are presented in profit or loss as part of other income. Recognitionof investment properties takes place only when it is probable that the future economic benefits that are associated with the investment propertywill flow to the Group and the cost can be reliably measured. This is usually when all risks are transferred.

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group isexposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power overthe entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the datethat control ceases. Investments in subsidiaries are recognised at cost less impairment.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are alsoeliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with group's accounting policies.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactionswith the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of thecarrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in

When the group ceases to have control any retained interest in the entity is remeasured to its fair value at the date when control is lost, with thechange in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting forthe retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensiveincome in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean thatamounts previously recognised in other comprehensive income are reclassified to profit or loss.

23




ii Impairment of financial assets

5.2 Negotiable Duty Credit Certificates

5.3 Employee benefit obligations

5.4 Income taxes and Deferred tax

5.5 Functional currency

6.0 Financial risk management

6.1 Introduction and overview of company and group risk management

Negotiable Duty Credit Certificate (NDCC) is a Federal Government of Nigeria instrument useful for settlement of Import and Excise Duties in lieuof cash. In the past four years, the company and other industry players have not been able to use the NDCC for settlemnt of Import and Exciseduties due to unwillingness on the part of the relevant government agency to accept the instrument. Notwithstanding, the Directors continue torecognise the full value of the instrument being a sovereign debt.

The present value of the employee benefit obligations depends on a number of factors that are determined on an actuarial basis using a numberof assumptions. The assumptions used in determining the net cost (income) for these benefits include the discount rate. Any changes in theseassumptions will impact the carrying amount of employee benefit obligations. The Company's actuaries determines the appropriate discount rateat the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected tobe required to settle the employee benefit obligations.

The group’s activities expose it to a variety of financial risks: market risk (including foreign exchange and interest rate risk), credit risk and liquidityrisk. The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potentialadverse effects on the group’s financial performance.

Risk management is carried out by a treasury department under policies approved by the board of directors. Treasury identifies, evaluates, andmanages financial risks in close co-operation with the group’s operating units. The board provides written principles for overall risk management,as well as written policies covering specific areas, such as foreign exchange risk, credit risk, other price risk and investment of excess liquidity.

In determining the appropriate discount rate, the actuaries considers the interest rates of high-quality corporate bonds (except where there is nodeep market in such bonds, in which case the discount rate should be based on market yields on Government bonds) that are denominated inthe currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related employee benefit obligation.Other key assumptions for employee benefit obligations are based in part on current market conditions. Additional information is disclosed in

Taxes are paid by Company under a number of different regulations and laws, which are subject to varying interpretations. In this environment, itis possible for the tax authorities to review transactions and activities that have not been reviewed in the past and scrutinize these in greaterdetail, with additional taxes being assessed based on new interpretations of the applicable tax law and regulations. Accordingly, management’sinterpretation of the applicable tax law and regulations as applied to the transactions and activities of the Company may be challenged by therelevant taxation authorities. The Company’s management believes that its interpretation of the relevant tax law and regulations is appropriateand that the tax position included in these financial statements will be sustained.

Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities andtheir carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted orsubstantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferredincome tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will beavailable against which the temporary differences can be utilised. Management is of the view that there is a high probability that future taxableprofit will be available to utilise the temporary differences.

Functional currency is the currency of the primary economic environment in which the parent company operates. The assessment of thefunctional currency of the foreign subsidiary is subjective and involves the use of management's estimates and judgements. Management is ofthe opinion that the foreign subsidiary's functional currency is the Nigerian Naira as it is the currency that mainly influences sales prices for itsgoods and Nigeria is the country whose competitive forces and regulations mainly determine the sales prices of its goods.

At the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset is impaired. A financial asset ora group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one ormore events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimatedfuture cash flows of the financial asset or group of financial assets that can be reliably estimated. Evidence of impairment may include indicationsthat the debtors or a group of debtors is experiencing significant financial difficulty.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the presentvalue of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s originaleffective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated incomestatement. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an eventoccurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognisedimpairment loss is recognised in the consolidated income statement.

24

NOTORE CHEMICAL INDUSTRIES PLCNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 SEPTEMBER 2017


6.0 Financial risk management (continued)

(a) Market risk

(i) Foreign exchange risk

30 Sept 2017 30 Sept 2016USD '000 USD '000

Financial assetsTrade and other receivables - Cash and cash equivalents 175 46

175 46

Financial liabilitiesBorrowings 58,508 46,784 Trade and other payables 25,799 7,907

84,307 54,691

Net exposure in statement of financial position (84,132) (54,645)

(i) Foreign exchange risk (continued)Exchange rates Reporting date

exchange rates & translation

Sensitivity to 5% strengthening

Increase/(decrease) in profit or loss

30 September 2017US Dollars 305.25 (25,681,432) (24,397,360) 1,284,072

30 September 2016US Dollars 304.75 (16,653,151) (15,820,494) 832,658

(ii) Interest rate risk

The group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal ofexisting positions and alternative financing. Based on these scenarios, the group calculates the impact on profit and loss of a defined interest rate shift.For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions.

The foreign exchange risk is mainly from loan, foreign creditors and intercompany balances denominated in foreign currencies.

A 5 percent strengthening of the Nigeria Naira against the above currencies at 30 September 2017 and 30 September 2016 could have had an equalbut opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Based on the simulations performed, the impact of a 1% shift in variable interest rates would be an increase of N376 million (30 September 2016: N49million) or decrease of N376 million (30 September 2016: N49 million), respectively. The simulation is done on a quarterly basis to verify that themaximum loss potential is within the limit given by the management.

A material change in the value of any such foreign currency could result in a material adverse effect on the group’s cash flow and future profits. Thegroup is exposed to exchange rate risk to the extent that balances and transactions denominated in a currency other than the Naira. The group holdsthe majority of its cash and cash equivalents in Naira. However, the group does maintain deposits in US Dollars in order to fund ongoing commercialactivity and other expenditure incurred in these currencies. Currency exposure arising from assets and liabilities denominated in foreign currencies ismanaged primarily by setting limits on the amounts that that may be invested in such deposits.

The foreign currency risk sensitivity analysis reflects the expected financial impact in Naira equivalent resulting from a 5% change to foreign currencyrisk exposure.

A 5 percent weakening of Nigerian Naira against the following currencies as at 30 September 2017 and 30 September 2016 would have increased/(decreased) group's profit before tax by the amount shown below. This analysis assumes that all other variables remains constant.

The group’s interest rate risk arises from long-term borrowings and the group policy is to maintain its borrowings in fixed rate instruments.

The group is exposed to risks resulting from fluctuations in foreign currency exchange rates in relation to its export sales which arises from itsexpsosures primarily to the US dollar. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities, and netinvestments in foreign operations.

Management has set up a policy to manage the group's foreign exchange risk against its functional currency. To manage the foreign exchange risksarising from future commercial transactions and recognised assets and liabilities, the company uses off-setting approach. Foreign exchange risk ariseswhen future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the group’s functional currency.

25



(b) Credit risk

30 Sept 2017 30 Sept 2016 30 Sept 2015

Trade receivables 656,860 839,698 2,296,253 1,039,087 254,377 490,111 1,695,947 1,094,075 2,786,364

30 Sept 2017 30 Sept 2016 30 Sept 2015

Trade receivables 656,860 838,924 1,815,772 1,030,742 247,745 490,111 1,687,602 1,086,669 2,305,883

30 September 2017Neither past due

nor impaired Up to 3 months 3 months to 6

months6 months to 1

yearTotal

Trade receivables 11,495 10,943 131,530 153,968 1,039,087 - - - 1,039,087



months6 months to 1

yearTotal

Trade receivables 218,802 118,860 19,817 - 357,479 254,377 - - - 254,377



months6 months to 1

yearTotal

Trade receivables 480,481 - - 1,167,452 1,647,933 490,111 - - - 490,111



months6 months to 1

yearTotal

Trade receivables - 11,495 10,943 131,530 153,968 1,030,742 - - - 1,030,742



months6 months to 1

yearTotal

Trade receivables 218,028 118,860 19,817 - 356,705 247,745 - - - 247,745



months6 months to 1

yearTotal

Trade receivables - - - 1,167,452 1,167,452 490,111 - - - 490,111

Cash and cash equivalents (excluding overdraft)


The table below analyses the company's financial assets less impairment of trade receivables into relevant maturity groupings at the reporting date




Credit risk refers to the risk of a counterparty defaulting on its contractual obligations resulting in financial loss to the group. Credit risk is managed ongroup basis, except for credit risk relating to accounts receivable balances. Each local entity is responsible for managing and analysing the credit riskfor each of their new clients before standard payment and delivery terms and conditions are offered. Credit risk arises from cash and cash equivalentsand deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables andcommitted transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. If wholesalecustomers are independently rated, these ratings are used. If there is no independent rating, risk control assesses the credit quality of the customer,taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings inaccordance with limits set by the board. The utilisation of credit limits is regularly monitored. Sales to retail customers are settled in cash or using majorcredit cards.

The group’s maximum exposure to credit risk due to default of the counter party is equal to the carrying value of its financial assets. No credit limitswere exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties. There is nocollateral on exposure to credit risk.

The table below analyses the group's financial assets less impairment of trade receivables into relevant maturity groupings at the reporting date




The group's maximum exposure to credit risk as at the reporting date is:

The company's maximum exposure to credit risk as at the reporting date is:

26



(b) Credit risk (continued)

30 Sept 2017 30 Sept 2016 30 Sept 2015Impaired trade receivable: N'000 N'000 N'000At the beginning of the year 482,219 648,320 68,196 Increase during the year 20,673 14,494 580,124 Decrease during the year - (180,595) - At end of the year 502,892 482,219 648,320 Provision for impairment (502,892) (482,219) (648,320)Net impaired trade receivables with no provision - - -

30 Sept 2017 30 Sept 2016 30 Sept 2015N'000 N'000 N'000

Provisions for impairment of trade receivables:482,219 648,320 68,196

20,673 14,494 580,124 - (180,595) -

Balance at the end of the year (Note 18) 502,892 482,219 648,320

30 Sept 2017 30 Sept 2016 30 Sept 2015642,365 606,402 1,815,772

US Dollars (in '000s) 47 765 2,445

30 Sept 2017 30 Sept 2016 30 Sept 2015 642,365 606,402 1,815,772

US Dollars (in '000s) 47 765 -

Credit quality of financial assets

COMPANY30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2017 30 Sept 2016 30 Sept 2015

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

B 1,039,087 254,377 490,111 1,030,742 247,745 490,111

(c) Liquidity risk

At 30 September 2017

Between 3 months and 1 year

Between 1 and 2 years


Over 5 years Total

Borrowings 47,743,692 5,762,299 16,099,488 3,384,419 72,989,898 Trade payables 4,997,782 - - - 4,997,782

Nigerian Naira (in '000s)

The creation and release of provision for impaired receivables have been included in ‘administrative expenses’ in the statement of profit or loss.Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash. The maximumexposure to credit risk at the reporting date is the carrying value of each class of receivables mentioned above. The Company does not hold anycollateral as security.

Reversed during the year (Note 9a)

Movements in the impaired trade receivables and the related provision for impairment are as follows:

Balance at the beginning of the yearCharged for the year (Note 9a)

Group & Company

Nigerian Naira (in '000s)

The carrying amounts of the Company's gross trade receivables are denominated in the following currencies:

As at 30 September 2017 and 30 September 2016 the group and the company Neither past due nor impaired trade receivables as well as the aging ofthe past due but not impaired trade receivables are as disclosed in the above tables.

The carrying amounts of the Group's gross trade receivables are denominated in the following currencies:

Cash flow forecasting is performed in the operating entities of the group and aggregated by group finance. Group finance monitors rolling forecasts ofthe group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawncommitted borrowing facilities at all times so that the group does not breach borrowing limits or covenants (where applicable) on any of its borrowingfacilities. Such forecasting takes into consideration the group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratiotargets and, if applicable external regulatory or legal requirements – for example, currency restrictions.

The table below analyses the group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balancesheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

B' ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however,capacity for continued payment is vulnerable to deterioration in the business and economic environment.

The credit quality of trade receivables are assessed by reference to historical information about counterparty default rates and the credit policy of theCompany.

An analysis of the credit rating of counterparties where cash and cash equivalents are held is presented as follows:

GROUP

27



(c) Liquidity risk (continued)






Between 3 months and 1 year



Over 5 years Total






6.2 Capital risk management

30 Sept 2017 30 Sept 2016 30 Sept 2015Total borrowings (Note 23) 72,989,892 69,945,959 64,921,905 Less: Cash in hand and at bank (Note 19) (1,039,087) (254,377) (490,111)Net debt 71,950,805 69,691,582 64,431,794 Total equity 50,686,889 41,968,278 7,607,251 Total capital employed 122,637,694 111,659,860 72,039,045 Gearing ratio 59% 62% 89%

30 Sept 2017 30 Sept 2016 30 Sept 2015Total borrowings (Note 23) 72,989,892 69,945,959 64,921,376 Less: Cash in hand and at bank (Note 19) (1,030,742) (247,745) (490,111)Net debt 71,959,150 69,698,214 64,431,265 Total equity 49,997,071 41,214,522 7,122,233 Total capital employed 121,956,221 110,912,736 71,553,498 Gearing ratio 59% 63% 90%

Company

Group

The gearing ratios at 30 September 2017, 30 September 2016 and 30 September 2015 for the company were as follows:

The table below analyses the company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at thebalance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

The group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholdersand benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capitalstructure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reducedebt.

Consistent with others in the industry, the group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by totalcapital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) lesscash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated statement of financial position plus net debt.

The gearing ratios at 30 September 2017, 30 September 2016 and 30 September 2015 for the group were as follows:

28



6.3 Financial instruments by category

The Group's financial instruments are categorised as follows:

30 Sept 2017 30 Sept 2016 30 Sept 2015Loans and receivablesTrade and other receivables excluding prepayments 2,997,118 3,080,966 4,169,471 Cash in hand and at bank 1,039,087 254,377 490,111

4,036,205 3,335,343 4,659,582

Liabilities at amortized costBorrowings excluding finance lease liabilities 72,989,892 69,945,958 64,921,905 Trade and other payables 11,281,636 18,031,563 13,018,429

84,271,528 87,977,521 77,940,334

The Company's financial instruments are categorised as follows:

30 Sept 2017 30 Sept 2016 30 Sept 2015Loans and receivablesTrade and other receivables excluding prepayments 2,996,813 3,080,190 3,681,957 Cash in hand and at bank 1,030,742 247,745 490,111

4,027,555 3,327,935 4,172,068

Liabilities at amortized costBorrowings excluding finance lease liabilities 72,989,892 69,945,958 64,921,376 Trade and other payables 11,999,520 18,803,868 13,044,225

84,989,412 88,749,826 77,965,601

30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2017 30 Sept 2016 30 Sept 2015N'000 N'000 N'000 N'000 N'000 N'000

Non-current borrowings (Note 23) 25,246,204 30,969,189 36,814,280 18,270,287 21,154,691 23,760,326


Non-current borrowings (Note 23) 25,246,204 30,969,189 36,814,280 18,270,287 21,154,691 23,760,326

Company

In determining the appropriate discount rate, the actuaries considers the interest rates of high-quality corporate bonds (except where there is no deep market in such bonds, in which case the discount rate should be based on market yields on Government bonds) that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related employee benefit obligation. Other key assumptions for employee benefit obligations are based in part on current market conditions. Additional information is disclosed in Note 23.

The carrying values of cash and cash equivalents, trade receivables, trade payables and current borrowings approximate their fair value.

Carrying amount Fair value

Group

Company

GroupCarrying amount Fair value

29



7 Revenue

30 Sept 2017 30 Sept 2016 30 Sept 2017 30 Sept 2016N'000 N'000 N'000 N'000

NPK 1,668 31,799 1,668 31,799 Urea and other chemicals 35,677,832 24,092,540 35,677,832 24,092,540 Ammonia 214,098 1,077,166 214,098 1,077,166 Total 35,893,598 25,201,505 35,893,598 25,201,505

Analysis by geographical location:Within Nigeria 34,330,356 21,680,221 34,330,356 21,680,221 Outside Nigeria 1,563,242 3,521,284 1,563,242 3,521,284

35,893,598 25,201,505 35,893,598 25,201,505

8 Cost of sales


Raw materials and other chemicals cost 12,590,231 9,535,119 12,635,044 9,633,436 Depreciation 7,662,242 3,015,084 7,662,242 3,015,084 Staff cost (Note 9d) 2,717,233 2,330,694 2,717,233 2,330,694 Haulage cost 2,491,732 3,395,905 2,491,732 3,395,905 Total 25,461,438 18,276,802 25,506,252 18,375,119

Analysis of depreciation charged


Depreciation on PPE charged to cost of sales 7,662,242 3,015,084 7,662,242 3,015,084 Depreciation on PPE charged to admin expenses 353,075 243,970 352,528 243,456 Total depreciation charged on PPE (Note 14) 8,015,317 3,259,054 8,014,770 3,258,540

Total depreciation charged on cost of sales 7,662,242 3,015,084 7,662,242 3,015,084

Total depreciation charged on admin expenses (Note 9a) 353,075 243,970 352,528 243,456

Total depreciation charged on PPE 8,015,317 3,259,054 8,014,770 3,258,540

9a Administrative expenses

The following balances are included as part of administrative expenses:


Employee benefit expense (Note 9d) 1,561,343 1,929,625 1,529,599 1,898,421 Repair and maintenance 127,252 54,827 127,253 54,827 Consultancy 125,543 67,878 125,543 67,878 Transportation & Travel 250,962 307,810 250,685 266,610 Depreciation (Note 8) 353,075 243,970 352,528 243,456 Amortisation of intangible assets (Note 16) - 28 - 28 Corporate promotion expenses 28,458 37,973 28,458 37,973 Directors fees (Note 25c) 507,453 509,047 507,453 509,047 Board expenses 75,701 43,962 75,701 43,962 Foreign currency exchange loss 228,807 1,173,567 228,807 1,173,567 Bank charges 59,768 53,586 59,768 53,586 Impairment of trade receivables (Note 6b) 20,673 14,494 20,673 14,494 Write-back of impairment (Note 6b) - (180,595) - (180,595)Other admin and general expenses 1,040,219 1,731,842 961,618 1,692,122 Auditor's renumeration 41,526 37,906 40,000 36,750

4,420,780 6,025,920 4,308,084 5,912,126

CompanyGroup

Group Company

Group Company

The Group's reportable segment has been identified on a product basis as fertilizer because all the company's sales comprise mainly fertilizer productswith similar risks and rewards. The Group is a one segment business with no turnover to a customer that is greater than 10% of sales of the company.Revenue is generated from local and export sales and an analysis based on customers' locations is set out above.

Group Company

30



9b Selling and distribution expenses30 Sept 2017 30 Sept 2016 30 Sept 2017 30 Sept 2016

N'000 N'000 N'000 N'000Marketing expenses 320,439 541,426 320,439 541,426

9c Employee benefits expense


Salaries and wages 2,667,651 2,733,844 2,635,906 2,702,640 Other employee benefits 957,970 914,639 957,970 914,639 Termination benefits 50,941 15,462 50,941 15,462 Employer's pension contribution - defined contributions 235,608 252,302 235,608 252,302 Gratuity charge (Note 22) 366,406 344,072 366,406 344,072

4,278,576 4,260,319 4,246,831 4,229,115

9d Analysis of employee benefits expense charged to:


Cost of sales 2,717,233 2,330,694 2,717,233 2,330,694 Administrative expenses 1,561,343 1,929,625 1,529,599 1,898,421

4,278,576 4,260,319 4,246,831 4,229,115

10 Other income


Fair value adjustment on investment property (Note 15) 564,281 1,812,555 564,281 1,812,555 Rental income 1,721 1,877 1,721 1,877 Others 685,757 235,953 682,431 219,189

1,251,759 2,050,385 1,248,433 2,033,621

11 Finance income and costs


Finance income

Interest income on short-term bank deposits 393 508 393 508

Finance cost

Interest expense:

– Interest and fees on bank borrowings 9,091,228 14,243,856 9,091,228 14,243,856

Net finance costs 9,090,835 14,243,348 9,090,835 14,243,348

12 Income tax expense


Profit or loss account:Education tax 94,367 - 94,367 - Deferred tax charge 56,428 181,256 56,428 181,256 Unrecognised deferred tax credit of prior years (10,251,732) - (10,251,732) - Deferred tax credit (699,632) - (699,632) - Income tax expense (10,800,569) 181,256 (10,800,569) 181,256

Group Company

Included in the finance cost is the exchange difference on dollar denominated bank obligations and is largely responsible for the significant reductionobserved in finance cost. For the year ended 30 September, 2017, exchange rate was relatively stable hovering between N304.75/USD andN305.25/USD compared to last financial year when the exchange rate was very erratic. In prior year, exchange rate at first took a sharp jump in June2016 from N196.5/USD to N282.5/USD and later moved to N304.75/USD towards September 2016. The amount of exchange difference recognised aspart of finance cost for the year-ended 30 September, 2017 is N5.6 million (2016: N5.1 billion)

Group Company

Group Company

Group Company

Group Company

Group Company

31



12 Income tax expense (continued)

Reconciliation of statutory and effective tax ratesThe tax on the company's profit before tax differs from the theoretical amount as follows:


Loss before income tax (2,148,135) (11,835,606) (2,083,579) (11,836,893)Tax calculated at the rate of 30% (2015: 30%) (644,441) (3,550,682) (625,074) (3,551,068)

Effect of:Education tax 94,367 - 94,367 - Tax rate differential (94,776) - (94,776) - Prior years unrecognised deferred tax credit (10,251,732) - (10,251,732) - Non chargeable income 19,367 180,870 - 181,256 Non deductible expenses 76,646 3,551,068 76,646 3,551,068 Total income tax expense in income statement (10,800,569) 181,256 (10,800,569) 181,256

The movement in the current income taxation payable is as follows:


At start of the period - 139,646 286,897 Charge for the period - Income tax - - - Charge for the period - Education tax 94,367 - - Payment during the period - (139,646) (147,251)Total current income tax liabilities 94,367 - 139,646

12a Deferred income tax

The analysis of deferred tax assets and deferred tax liabilities is as follows:


Deferred tax assets:– Deferred tax assets to be recovered after more than 12 months 16,397,529 5,446,165 5,446,165– Deferred tax assets to be recovered within 12 months - - -

16,397,529 5,446,165 5,446,165

Deferred tax liabilities:– Deferred tax liabilities to be recovered after more than 12 months 27,791,271 27,706,746 3,567,892– Deferred tax liabilities to be recovered within 12 months - - -

27,791,271 27,706,746 3,567,892

Deferred tax (liability)/asset - (net) (11,393,742) (22,260,581) 1,878,273


Deferred tax assets:Deferred income tax asset:Balance at the beginning of the year 5,446,165 5,446,165 5,549,059

Transfer of previously recognised tax credit for the year on remeasurement of EBO to deferred tax liability - - (102,894) Credit for the year 10,951,364 - - Total deferred tax asset 16,397,529 5,446,165 5,446,165

Deferred tax liabilities:Deferred income tax liabilities:Balance at the beginning of the year 27,706,746 3,567,892 3,149,645Deferred tax charge for the year (Note 12) 56,428 181,256 - Deferred tax charge on revaluation surplus - 23,949,023 - Deferred tax charge on actuarial gain 28,097 8,575 521,141

Transfer of previously recognised tax credit for the year on remeasurement of EBO from deferred tax asset - - (102,894) Total deferred tax liabilities 27,791,271 27,706,746 3,567,892

Group and Company

Group and Company

CompanyGroup

The applicable tax rates used for the 2017 and 2016 reconciliations above is the corporate tax rate of 30% payable by taxable entities in Nigeria on taxableprofits under tax law in Nigeria.

The movement in deferred income tax assets and liabilities during the period, without taking into consideration the offsetting of balances within the same taxjurisdiction, is as follows:

Group and Company

32



Recognised deferred tax assets and liabilities are attributable to the following:

Fixed assets Actuarial loss Provisions Tax losses Total N'000 N'000 N'000 N'000 N'000

Deferred tax assetsAt 1 October 2014 2,615,814 349,287 471,911 2,009,153 5,446,165

At 30 September 2015 2,615,814 349,287 471,911 2,009,153 5,446,165

At 1 October 2015 2,615,814 349,287 471,911 2,009,153 5,446,165

At 30 September 2016 2,615,814 349,287 471,911 2,009,153 5,446,165

At 1 October 2016 2,615,814 349,287 471,911 2,009,153 5,446,165Unrecognised deferred tax credit of prior years credited to profit or loss 4,002,564 - 178,747 6,070,421 10,251,732 Credited to profit or loss for the year 2,404,431 - 67,323 (1,772,122) 699,632 At 30 September 2017 9,022,809 349,287 717,981 6,307,452 16,397,529

Actuarial gain Fixed assetsInvestment

property Provisions Total N'000 N'000 N'000 N'000 N'000

Deferred tax liabilitiesAt 1 October 2014 - - - 3,149,645 3,149,645 Charged to other comprehensive income 418,247 - - - 418,247 At 30 September 2015 418,247 - - 3,149,645 3,567,892

At 1 October 2015 418,247 - - 3,149,645 3,567,892 Charged to income statement - - 181,256 - 181,256 Reclassification - 3,149,645 - (3,149,645) - Charged to other comprehensive income 8,575 23,949,023 - - 23,957,598 At 30 September 2016 426,822 27,098,668 181,256 - 27,706,746

At 1 October 2016 426,822 27,098,668 181,256 - 27,706,746 Charged to other comprehensive income 28,097 - - - 28,097 Charged to profit or loss - - 56,428 - 56,428 At 30 September 2017 454,919.12 27,098,668 237,684 - 27,791,271

Deferred tax asset - 30 September 2015 2,197,567 349,287 471,911 -1,140,492 1,878,273Deferred tax liability - 30 September 2016 2,188,992 -26,749,381 290,655 2,009,153 -22,260,581Deferred tax liability - 30 September 2017 8,567,890 -26,749,381 480,297 6,307,452 -11,393,742

13 Earnings per share (EPS)


Profit/(loss) for the year attributable to shareholders 8,652,434 (12,016,862) 8,716,990 (12,018,149)

Weighted average number of ordinary shares in issue 1,612,066 1,612,066 1,612,066 1,612,066

Basic earnings per share (Naira) 5.37 (7.45) 5.41 (7.46)

Diluted earnings per share (Naira) 5.37 (7.45) 5.41 (7.46)

Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the company by the weighted average number of ordinaryshares in issue during the year. Diluted EPS is the same as Basic EPS as there are no potential securities convertible to ordinary shares at both year ends.

CompanyGroup

33



14 Property, plant and equipment

Group Land &

BuildingsPlant &

MachineryMotor

VehicleComputer

EquipmentOffice

EquipmentCapital Work

in Progress TotalN'000 N'000 N'000 N'000 N'000 N'000 N'000

CostAt 1 October 2014 11,596,025 59,994,056 489,639 185,083 310,727 1,483,128 74,058,658 Additions - 10,500 - 10,604 15,941 157,509 194,554 Write-off - - - - - (60,303) (60,303)Reclassification 30,188 - - - - (30,188) -

At 30 September 2015 11,626,213 60,004,556 489,639 195,687 326,668 1,550,146 74,192,909 Accumulated depreciation

At 1 October 2014 674,754 11,085,404 432,364 162,210 256,912 - 12,611,644 Charge for the year 181,787 3,006,608 33,822 15,526 25,994 - 3,263,737

At 30 September 2015 856,541 14,092,012 466,186 177,736 282,906 - 15,875,381 Net Book ValueAt 30 September 2015 10,769,672 45,912,544 23,453 17,951 43,762 1,550,146 58,317,528

CostAt 1 October 2015 11,626,213 60,004,556 489,639 195,687 326,668 1,550,146 74,192,909 Additions - 5,250 109,977 11,215 30,223 453,982 610,647 Reclassification (30,188) 33,686 - - - (3,498) - Revaluation surplus adjustment 4,231,922 47,661,720 - - - - 51,893,642


At 1 October 2015 856,541 14,092,012 466,186 177,736 282,906 - 15,875,381 Charge for the year 182,173 3,015,084 23,172 10,113 28,512 - 3,259,054 Revaluation surplus adjustment (1,038,714) (17,107,096) - - - - (18,145,810)

At 30 September 2016 - - 489,358 187,849 311,418 - 988,625 Net Book ValueAt 30 September 2016 15,827,947 107,705,212 110,258 19,053 45,473 2,000,630 125,708,573

CostAt 1 October 2016 15,827,947 107,705,212 599,616 206,902 356,891 2,000,630 126,697,198Additions - - 45,145 15,929 33,871 336,687 431,632Write-off - - - - - (219,949) (219,949)Reclassification - 363,753 - - - (363,753) -

- At 30 September 2017 15,827,947 108,068,965 644,761 222,831 390,762 1,753,615 126,908,881 Accumulated depreciation

At 1 October 2016 - - 489,358 187,849 311,418 - 988,625Charge for the year 284,214 7,662,242 35,098 10,218 23,545 - 8,015,317

- At 30 September 2017 284,214 7,662,242 524,456 198,067 334,963 - 9,003,942

Net Book ValueAt 30 September 2017 15,543,733 100,406,723 120,305 24,764 55,799 1,753,615 117,904,939

34


(All amounts are in thousands of Naira, unless otherwise stated)14 Property, plant and equipment (continued)

CompanyLand &

BuildingsPlant &

MachineryMotor

VehicleComputer

EquipmentOffice

EquipmentCapital Work

in ProgressTotal

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

CostAt 1 October 2014 11,596,025 59,994,056 489,639 182,765 310,727 1,483,128 74,056,340 Additions - 10,500 - 10,013 15,941 157,509 193,963 Write-off - - - - - (60,303) (60,303)Reclassification 30,188 - - - - (30,188) -


At 1 October 2014 674,754 11,085,404 432,364 160,135 256,912 - 12,609,569 Charge for the year 181,787 3,006,608 33,822 15,526 25,994 - 3,263,737

At 30 September 2015 856,541 14,092,012 466,186 175,661 282,906 - 15,873,306


CostAt 1 October 2015 11,626,213 60,004,556 489,639 192,778 326,668 1,550,146 74,190,000 Additions - 5,250 109,977 9,674 30,223 453,982 609,106 Reclassification (30,188) 33,686 - - - (3,498) - Revaluation surplus adjustment 4,231,922 47,661,720 - - - - 51,893,642

At 30 September 2016 15,827,947 107,705,212 599,616 202,452 356,891 2,000,630 126,692,748 Accumulated depreciationAt 1 October 2015 856,541 14,092,012 466,186 175,661 282,906 - 15,873,306 Charge for the year 182,173 3,015,084 23,172 9,599 28,512 - 3,258,540 Revaluation surplus adjustment (1,038,714) (17,107,096) - - - - (18,145,810)At 30 September 2016 - - 489,358 185,260 311,418 - 986,036


CostAt 1 October 2016 15,827,947 107,705,212 599,616 202,452 356,891 2,000,630 126,692,748 Additions - - 45,145 15,929 33,871 336,687 431,632 Write-off - - - - - (219,949) (219,949)Reclassification - 363,753 - - - (363,753) -

At 30 September 2017 15,827,947 108,068,965 644,761 218,381 390,762 1,753,615 126,904,431 Accumulated depreciationAt 1 October 2016 - - 489,358 185,260 311,418 - 986,036 Charge for the year 284,214 7,662,242 35,098 9,671 23,545 - 8,014,770

At 30 September 2017 284,214 7,662,242 524,456 194,931 334,963 - 9,000,806


On 30 September 2016, the Group adopted a policy of recognizing Land & Building and Plant & Machinery at revalued amount in accordance with theprovisions of IAS 16 ‘Property, Plant and Equipment’. This is a change from the previous policy, under which all property, plant and equipment werestated at historic cost less accumulated depreciation and impairment losses. The revaluation of Land & Building and Plant & Machinery providesshareholders with a more representative value than the historic cost basis.

The impact of the change in accounting policy on the financial statements is an increase of N70 billion (i.e. increase in cost of N51.9 billion and reversalof accumulated depreciation of N18.1 billion). The corresponding amount of the revaluation surplus has been recognised as part of items that will neverbe reclassified to profit or loss in Other Comprehensive Income.

35



15 Investment property


CostOpening balance 21,402,005 19,589,450 18,747,331 21,402,005 19,589,450 18,747,331 Fair value adjustment (Note 10) 564,281 1,812,555 842,119 564,281 1,812,555 842,119

21,966,286 21,402,005 19,589,450 21,966,286 21,402,005 19,589,450


Not later than one year 1,721 1,877 1,721 1,877Later than one year and not later than five years 6,884 7,510 6,884 7,510

Level 1 Level 2 Level 3 TotalAt 30 September 2017 Notes N'000 N'000 N'000 N'000Investment property 15 - - 21,966,286 21,966,286

Total non-financial assets - - 21,966,286 21,966,286 At 30 September 2016 Notes N'000 N'000 N'000 N'000

Land & buildings 14 - - 15,827,947 15,827,947

Plant & machinery 14 - - 107,705,212 107,705,212 Investment property 15 - - 21,402,005 21,402,005

Total non-financial assets - - 144,935,164 144,935,164 At 30 September 2015 Notes N'000 N'000 N'000 N'000Investment property 15 - - 19,589,450 19,589,450

Total non-financial assets - - 19,589,450 19,589,450

The impact of the change in accounting policy on the financial statements are:i) Increase of N0.8 billion as at 30 September 2015ii) Increase of N1.8 billion as at 30 September 2016 iii) Increase of N0.6 billion as at 30 September 2017

Investment property is made up of an undeveloped land and a commercial property that is leased out to third parties. The commercial property leased tothird parties contains an initial non-cancellable lease period of 3 years. Subsequent renewals are negotiated with the lessee and on average, the renewalperiods are not less than 2 years. No contingent rents are charged. These properties were transferred from property, plant & equipment to investmentproperty on transition date at its fair value as deemed cost.

Also included in Other income in the income statement is the sum of N1.72 million (2016: N1.88 million) being rental income from the commercial property.No direct operating expense was incurred during the year in generating the income. The future minimum lease payments under the non-cancellable operating leases is:

Group Company

Previously, the Group’s investment property was measured at cost less accumulated depreciation and impairment losses. With effect from 30 September2016, the Group revised its accounting policy on investment property from the cost model to fair value model where investment property is stated at fairvalue, in accordance with the provisions of IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”. The change harmonizes the treatmentof investment property with industry practice and enhances the comparability of the Group’s financial statements with those of its peers. The Directorsbelieve that the new policy provides reliable and more relevant financial information to the users of the financial statements. The change in accountingpolicy has been accounted for retrospectively, and the comparative financial statements have been restated.

Group Company

An analysis of the hierarchy levels has been presented below:

There were no transfers in and out of fair value hierarchy levels as at the end of the reporting periods.

The corresponding amounts of the fair value adjustment have been recognised in Other income.

Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) isbased on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bidprice. These instruments are included in level 1.

Level 2: The fair value of financial instruments that are not traded in active markets and determined using valuation techniques which maximise the use ofobservable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable,the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlistedequity securities.

Fair value hierarchy

Recognised fair value measurement

This note explains the judgements and estimates made in determining the fair values of the nonfinancial assets that are recognised and measured at fairvalue in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its non-financial assets into the three levels prescribed under the accounting standards. An explanation of each level is also provided below:

36



*

*

*

Land & buildings

Plant & machinery

Investment property Total

N'000 N'000 N'000 N'000Opening balance 1 October 2015 10,769,672 45,912,544 19,589,450 76,271,666 Acquisitions - 5,250 - 5,250 Reclassification (30,188) 33,686 - 3,498 Amounts recognised in profit or loss:

Depreciation and impairment (182,173) (3,015,084) - (3,197,257)Gains recognised in other income - - 1,812,555 1,812,555

Gains recognised in other comprehensive income 5,270,636 64,768,816 70,039,452

Closing balance 30 September 2016 15,827,947 107,705,212 21,402,005 144,935,164

Opening balance 1 October 2016 15,827,947 107,705,212 21,402,005 144,935,164 Reclassification - 363,753 - 363,753 Amounts recognised in profit or loss:

Depreciation and impairment (284,214) (7,662,242) - (7,946,457)Gains recognised in other income - - 564,281 564,281

Closing balance 30 September 2017 15,543,733 100,406,723 21,966,286 137,916,741

Valuation inputs and relationships to fair value

Financial year Valuation technique

Significant Unobservable

Inputs

Range (weighted average)

N2b – N5bilion (average cost N5 million per square

metre) 30-50 years

(average – 40 years)

N 1b - N5b(average cost N2.5b

per MTPD)

Useful life of the specialised asset

10-20 years (Average – 15

years)N 1b - N5b

(average cost N2.5b per MTPD)



years)N 0.1b - N1 b

(average cost N0.5b per sevicing)



years)

Significant increase (decrease) in the useful life would result in a significantly higher (lower) fair value

Significant increase (decrease) in the cost per unit would result in a significantly higher (lower) fair value

All resulting fair value estimates for properties are included in level 3.

The following table presents the changes in level 3 items for the periods ended 30 September 2016 and 30 September 2017 for recurring fair valuemeasurements:

Depreciated replacement cost2016

Depreciated replacement cost

Urea plant 2016 Depreciated replacement cost

Production capacity

Useful life of the building

Ammonia plant

Production capacity

Significant increase (decrease) in the cost per unit would result in a significantly higher (lower) fair valueSignificant increase (decrease) in the useful life would result in a significantly higher (lower) fair value

Buildings 2016 Depreciated replacement cost

Asset Class

Cost per square metre


Buildings, Plant & Machinery

Fair value measurements using significant unobservable inputs (level 3)

The group obtains independent valuations for its investment properties at least annually and for its land & buildings and plant & machinery (classified asproperty, plant and equipment) at least every three years.

At the end of each reporting period, the directors update their assessment of the fair value of each property, taking into account the most recent independentvaluations. The directors determine a property's value within a range of reasonable fair value estimates.

The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the directors considerinformation from a variety of sources including:

The following table summarises the quantitative information about the significant unobservable inputs used in recurring level 3 fair value measurements.See (ii) above for the valuation techniques adopted.

Valuation techniques used to determine level 3 fair value

current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect thosedifferences

discounted cash flow projections based on reliable estimates of future cash flows

capitalised income projections based upon a property's estimated net market income, and a capitalisation rate derived from an analysis of marketevidence.

Sensitivity of the input to fair value

Significant increase (decrease) in the cost per unit would result in a significantly higher (lower) fair value

Service plant

CapacitySignificant increase (decrease) in the cost per unit would result in a significantly higher (lower) fair value


2016

37



Financial year Valuation technique

Significant Unobservable

Inputs

Range (weighted average)


N0.1b – N16b (average cost N4 million per square

metre)



years)



metre)



years)



metre)



years)

Valuation processes

16 Intangible assets


CostOpening balance 54,961 54,961 54,961 54,961 54,961 54,961

54,961 54,961 54,961 54,961 54,961 54,961Accumulated amortisationOpening balance (54,961) (54,933) (45,970) (54,961) (54,933) (45,970)Charge for the year - (28) (8,963) - (28) (8,963)

(54,961) (54,961) (54,933) (54,961) (54,961) (54,933)

Net book value - - 28 - - 28

17 Inventories

Group 30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2017 30 Sept 2016 30 Sept 2015N'000 N'000 N'000 N'000 N'000 N'000

Raw materials 1,000,921 788,089 1,159,520 1,000,921 788,089 1,159,520Finished goods 717,964 665,016 191,869 717,964 665,016 191,869Goods in transit 771,509 569,628 316,700 771,509 569,628 316,700Spare parts inventories 636,700 681,107 562,960 636,700 681,107 562,960

3,127,094 2,703,840 2,231,049 3,127,094 2,703,840 2,231,049

The cost of inventories included in cost of sales for the year ended 30 September 2017 is N7.51 billion (30 September 2016: N4.47billion).

Intangible assets relate to cost of software. No amortisation expense was recognised during the year (2016:N0.28 million) in Administrative expenses.



Land and building 2015 Depreciated replacement cost



Investment property

Asset Class Sensitivity of the input to fair value


2016 Depreciated replacement cost

Computer software

CompanyGroup

The Group’s Land & Building, Plant & Machinery and investment properties were valued at 30 September 2016 by independent professionally qualifiedvaluers who hold a recognised relevant professional qualification and have recent experience in the locations and segments of the asets valued. For allassets valued, their current use equates to the highest and best use. The Group's finance department includes a team that reviews the valuations performedby the independent valuers for financial reporting purposes. This team reports directly to the chief financial officer (CFO) and the audit committee (AC).Discussions of valuation processes and results are held between the CFO, AC, the valuation team and the independent valuers at every reporting period.

At each financial year end, the finance department: • verifies all major inputs to the independent valuation report;• assesses property valuation movements when compared to the prior year valuation report;• holds discussions with the independent valuer.


Land and building 2017 Depreciated replacement cost

CompanyGroup

Land and building

38



18 Trade and other receivables


Trade receivables 656,860 839,698 2,296,253 656,860 838,924 1,815,772

(502,892) (482,219) (648,320) (502,892) (482,219) (648,320)Net trade receivables 153,968 357,479 1,647,933 153,968 356,705 1,167,452

Prepayments 180,755 195,266 117,308 178,530 192,829 115,649 40,596 24,305 17,643 40,596 24,305 17,643

Negotiable duty credit certificate 571,811 571,811 571,811 571,811 571,811 571,811 Prepaid suppliers 635,435 510,249 142,990 635,435 510,249 142,989 Other receivables 1,595,308 1,617,123 1,789,094 1,595,003 1,617,121 1,782,062

Total 3,177,873 3,276,233 4,286,779 3,175,343 3,273,020 3,797,606

19 Cash and cash equivalents


1,039,087 254,377 490,111 1,030,742 247,745 490,111

1,039,087 254,377 490,111 1,030,742 247,745 490,111


1,039,087 254,377 490,111 1,030,742 247,745 490,111 Bank overdrafts (Note 23) (37,641,668) (4,911,492) (20,937,186) (37,641,668) (4,911,492) (20,936,656)

(36,602,583) (4,657,115) (20,447,075) (36,610,926) (4,663,747) (20,446,545)

20 Share capital

30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2017 30 Sept 2016 30 Sept 2015Authorised:2 billion ordinary shares of 50 Kobo each 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000

Issued and fully paid:1.61 billion ordinary shares of 50 Kobo each 806,033 806,033 806,033 806,033 806,033 806,033

21 Retained earnings


Balance at the beginning (33,331,063) (21,334,209) (10,438,494) (33,677,857) (21,679,716) (11,011,940)Loss for the year 8,652,434 (12,016,862) (11,871,623) 8,716,990 (12,018,149) (11,643,684)

65,559 20,008 975,908 65,559 20,008 975,908

4,729,891 - - 4,729,891 - -

Balance at the end (19,883,179) (33,331,063) (21,334,209) (20,165,417) (33,677,857) (21,679,716)

The trade receivable is not interest bearing. For receivables that are classified as 'current' due to their short-term maturities, the fair value approximatestheir carrying values.

Employee receivables are staff loans granted to staff members at below market rates. The fair value of the employee loans is based on cashflowsdiscounted based on market borrowing rate .

All trade and other receivables are current.

Group

Group

Employee receivables

Cash at bank and in hand (excluding overdrafts)

Cash and cash equivalents (excluding overdrafts)

Cash and cash equivalents (excluding overdrafts)

Cash and cash equivalents include the following for the purposes of the statement of cash flows:

Included in other receivables for the three years presented are receivable from Stanbic IBTC Trustees Limited with respect to the Employee Stock Option(ESOP) and Witholding Tax receivable.

Remeasurements of post employment benefit liabilities net of tax

Less: Impairment of trade receivables (Note 6b)

Short term deposits with banks represents placements with commercial banks for period between 0 - 90 days.

Company

Cash and cash equivalents (including overdrafts)

CompanyGroup

Group Company

Company

CompanyGroup

Revaluation reseve released on depreciation of revalued PPE

39


(All amounts are in thousands of Naira, unless otherwise stated)22 Employee benefit obligations(a) Defined benefit scheme


Balance sheet obligations for: Post-employment benefit 768,753 1,138,647 1,105,986 Liability in the balance sheet 768,753 1,138,647 1,105,986 Income statement charge included in employee benefits expense for: Post-employment benefit 366,406 344,072 626,675

366,406 344,072 626,675 Remeasurements for:Change in financial assumption and experience adjustment (93,656) (28,583) (1,394,155)

(93,656) (28,583) (1,394,155)


Present value of obligations (funded) 1,335,209 1,239,153 1,105,986 Fair value of plan assets (566,456) (100,506) - Deficit of funded plan 768,753 1,138,647 1,105,986


Balance at the beginning of the year 1,239,153 1,105,986 2,028,219 Charge during the year:Current service cost 188,196 188,562 380,003 Interest cost 178,210 155,510 246,672

366,406 344,072 626,675 1,605,559 1,450,058 2,654,894

Remeasurements:Actuarial losses/(gains) - change in financial assumption 28,760 - (213,972)Actuarial losses/(gains) - experience adjustment (122,416) (28,583) (1,180,183)Total (93,656) (28,583) (1,394,155)Payments from plans:Benefits paid by the employer (176,694) (182,322) (154,753)Total (176,694) (182,322) (154,753)Balance at the end of the period 1,335,209 1,239,153 1,105,986

N'000 % N'000 % N'000 %Treasury bills 497,938 87.90 50,282 50.03 - - Local currency sovereign bonds 61,900 10.93 10,126 10.07 - - Local currency corporate bonds 5,195 0.92 - - - - Fixed deposits and commercial papers 1,423 0.25 40,098 39.90 - -

566,456 100.00 100,506 100.00 - -

Year 30 Sept 2017 30 Sept 2016 30 Sept 2015N'000 N'000 N'000

2018 241,417 194,095 161,726 2019 239,223 188,589 164,772 2020 223,369 184,356 157,383 2021 238,420 197,488 145,472 2022 - 2026 2,084,899 1,940,897 1,354,063

30 Sept 2017 30 Sept 2016 30 Sept 2015Discount rate (p.a.) 15.5% 15.0% 15.0%Future average pay increase (p.a.) 12.0% 12.0% 12.0%Average rate of inflation (p.a.) 12.0% 12.0% 9.0%Expected Return on Plan Assets (p.a.) 15.5% 15.0% N/AInterest credit (p.a) 0.0% 0.0% 0.0%

The amounts recognised in the statement of financial position are determined as follows:

The movement in the defined benefit obligation over the year is as follows:

The provision for gratuity was based on independent actuarial valuation performed by independent actuaries using the projected unit credit method. Thecompany maintains an asset account with a fund manager for funding of the obligations as they fall due. As at 30 September 2017, fair value of the planasset stood at N566.5 million (30 September 2016: N100.5).

The company operates a gratuity scheme whereby at the time of leaving the service or retirement from the company, an employee is paid gratuity. The planprovides a retirement benefit of 15% of gross annual salary for each year of service for staff with 5 and above years of service. Responsibility forgovernance of the plans – including investment decisions and contribution schedules – lies with the company.

Group & Company

Group & Company

Group & Company

Group & Company

Group & Company

The table below outlines where the company's post-employment amounts and activity are included in the financial statements:

The maturity profiles of future benefits payment is as follows:

The breakdown of the plan assets is shown below:Asset mix: Group & Company

30 September 2017 30 September 2016 30 September 2015

The significant actuarial assumptions were as follows:

40



Accrued liability

N'000Discount rate 1,267,479 Discount rate 1,410,261 Salary increase 1,371,107 Salary decrease 1,302,163 Mortality experience 1,332,207 Mortality experience 1,338,535

(b) Defined contribution scheme

23 Borrowings


Non-current Bank borrowings 25,246,204 30,969,189 36,814,280 Total non-current borrowings 25,246,204 30,969,189 36,814,280

Current Bank overdrafts (Note 19) 37,641,668 4,911,492 20,937,186 Bank borrowings 10,102,020 34,065,278 7,170,440 Total current borrowings 47,743,688 38,976,770 28,107,626

Total borrowings (non-current & current) 72,989,892 69,945,959 64,921,906


Non-current Bank borrowings 25,246,204 30,969,189 36,814,280 Total non-current borrowings 25,246,204 30,969,189 36,814,280

Current Bank overdrafts (Note 19) 37,641,668 4,911,492 20,936,656 Bank borrowings 10,102,020 34,065,278 7,170,440 Total current borrowings 47,743,688 38,976,770 28,107,096

Total borrowings (non-current & current) 72,989,892 69,945,959 64,921,376


Opening balance 65,034,467 43,984,719 49,573,296 65,034,467 43,984,719 49,573,296 Additions - - 1,470,503 - 1,470,503 Reclassification (to)/from bank overdraft (20,263,869) 27,546,499 - (20,263,869) 27,546,499 Repayments (9,422,375) (6,496,751) (7,059,080) (9,422,375) (6,496,751) (7,059,080) Closing balance 35,348,224 65,034,467 43,984,719 35,348,224 65,034,467 43,984,719

i)

ii)

iii)

iv)

Movement in borrowings (excluding overdraft) is represented as follows:

Other short term loans of $3.65 million (N1.11 billion) and N3.19 billion all of which are repayable within one year.

Outstanding borrowings at period end is made up of:

The bank borrowings are secured over the assets of the company and as at the reporting date there are no undrawn borrowing lines.

BOI-CBN intervention (3rd tranche) loan of N10.52 billion out of which N1.52 billion is repayable within one year and N9.00 billion is repayable after oneyear. The duration of the facility is 87 months and the annual interest rate is 7%. The last repayment date of the facility is 31 December 2024.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur,and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarialassumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reportingperiod) has been applied as when calculating the pension liability recognised within the statement of financial position. The methods and types ofassumptions used in preparing the sensitivity analysis did not change compared to the previous year.

BOI-CBN intervention (2nd tranche) loan of N18.60 billion out of which N3.90 billion is repayable within one year and N14.70 billion is repayable after oneyear. The duration of the facility is 71 months and the annual interest rate is 7%. The last repayment date of the facility is 31 August 2022.

-1%

Company

The company also makes provision in respect of defined contribution scheme as stipulated by Nigerian Pension Reform Act. The employer contributionexpensed for the year ended 30 September 2017 was N236 million (30 September 2016: N252 million) while the employee contribution is included insalaries and wages amount - Note 9c

-1%Improved by 1 yearWorsend by 1 year

BOI-CBN intervention (1st tranche) loan balance of N1.93 billion out of which N0.38 billion is repayable within one year and N1.55 billion is repayable afterone year. The duration of the loan is 102 months and the annual interest rate is 7%. The last repayment date of the facility is 31 March 2026.

Group Company

+1%

Group

The sensitivity analysis on the accrued liability as at 30 September 2017 is as follows:

+1%

Group & Company

41



24 Trade and other payables


Trade payables 4,997,782 5,591,089 5,482,267 4,997,782 5,591,089 5,482,267 Interest and fees payable 98,350 1,869,906 1,572,788 98,350 1,869,906 1,572,788 Accrued expenses 2,914,109 6,498,165 4,802,918 2,912,583 6,484,855 4,798,496 Deposit from customers 1,525,426 3,007,383 1,160,456 1,525,426 3,007,383 1,160,456 Amounts due to related parties (Note 25) 1,745,971 1,065,020 - 2,465,381 1,850,635 30,218

11,281,636 18,031,563 13,018,429 11,999,520 18,803,868 13,044,225

25 Related party transactions

Parent and ultimate controlling entity

Transactions with related parties

(a) Transactions with related parties:


Sale of goods to related partiesSale of goods to Notore Supply and Trading Mauritius Limited - - 823,315.86

Purchase of goods from related partiesPurchase of goods from Notore Supply and Trading Mauritius Limited - - 284,410.00 Purchase of goods from Eroton Exploration and Production Company Limited 7,191,435 2,605,981 -

7,191,435 2,605,981 284,410

Commission paid to related partiesCommission paid to Notore Supply and Trading Mauritius Limited 44,813 98,317 177,001

Receipts on behalf of related partiesReceipts on behalf of Notore Supply and Trading Mauritius Limited - 1,850,635 -

Payments to related partiesPayments to Notore Supply and Trading Mauritius Limited 121,018 29,782 - Payments to Eroton Exploration and Production Company Limited 6,510,485 1,540,961 -

6,631,503 1,570,743 -

(b) Amount due to related parties:Particulars:

30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2017 30 Sept 2016 30 Sept 2015N'000 N'000 N'000

Notore Supply and Trading Mauritius Limited - - - 679,410 755,615 218Notore Power Limited - - - 10,000 10,000 10,000Notore Foods Limited - - - 10,000 10,000 10,000Notore Seeds Limited - - - 10,000 10,000 10,000Notore Industrial City Limited - - - 10,000 - - Eroton Exploration and Production Company Limited 1,745,971 1,065,020 - 1,745,971 1,065,020 -

1,745,971 1,065,020 - 2,465,381 1,850,635 30,218

Group

The payables to related parties arise mainly from supply of services and are due two months after the date of purchase. The payables bear no interest.

The company entered into a 20 years gas supply agreement with Eroton Exploration and Production Company Limited ("Eroton"). The agreement becamefully operational effective from 01 March 2016 with the commencement of offtake of gas from Eroton on that date. By this agreement, Eroton became amajor supplier of gas to the company. The Managing Director and Chief Executive Officer of the company is also the Chairman of the Board of ErotonExploration and Production Company Limited.

Group

Company

Company

As at 30 September 2017, Notore Chemical Industries (Mauritius) Limited owned 77.07% of the issued share capital of the company.

Notore Chemical Industries (Mauritius) Limited is the ultimate parent of Notore Chemical Industries Plc. Notore Chemical Industries (Mauritius) Limited, thesubsidiaries, Directors, close family members of the Directors and any employee who is able to exert significant influence on the operating policies of theCompany are considered as related parties. Key management personnel are also regarded as related parties. Key management personnel are thosepersons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director(whether executive or otherwise).

Transactions with related parties are mainly in relation to supply of services, the exchange of goods, the provision and utilisation of financial resources, withother Notore subsidiaries or associated companies. These transactions are an integral part of the ordinary course of its business. All transactions werecarried out for the mutual benefit of the parties involved. During the year, the company transacted business with related parties on terms similar to suchtransactions entered into with third parties. The transactions during the year and year end balances with related parties are shown below:

All trade and other payables are current.

Company

42



25 Related party transactions (continued)

(c) Key management compensation


Salaries and other emoluments 184,522 184,522 184,522 184,522Pension 17,527 15,564 17,527 15,564Gratuity 27,678 27,678 27,678 27,678

229,727 227,764 229,727 227,764


Fees for services as directors 277,727 281,283 277,727 281,283Other emoluments as management 229,727 227,764 229,727 227,764 507,453 509,047 507,453 509,047 Chairman 34,609 35,326 34,609 35,326 The highest paid director 137,287 135,884 137,287 135,884

30 Sept 2017 30 Sept 2016 30 Sept 2017 30 Sept 2016

N NAbove 25,000,000 2 2 2 2 Below 25,000,000 11 11 11 11

13 13 13 13

i


Salaries and wages 2,667,651 2,733,844 2,635,906 2,702,640Other employee benefits 957,970 914,639 957,970 914,639Termination benefits 50,941 15,462 50,941 15,462Employer's pension contribution - defined contributions 235,608 252,302 235,608 252,302Gratuity charge (Note 22) 366,406 344,072 366,406 344,072

4,278,576 4,260,319 4,246,831 4,229,115

ii

30 Sept 2017 30 Sept 2016 30 Sept 2017 30 Sept 2016Administration 290 217 289 216Technical and production 246 268 246 268Sales and marketing 17 26 16 25

553 511 551 509

iii

30 Sept 2017 30 Sept 2016 30 Sept 2017 30 Sept 2016N N

Above 10,500,000 57 40 55 38 10,500,000 16 12 16 12 9,000,000 19 27 19 27 7,500,000 51 38 51 38 6,500,000 62 66 62 66 5,000,000 59 37 59 37 3,500,000 74 80 74 80 2,000,000 169 191 169 191

Below 500,000 46 20 46 20

553 511 551 509

26 Contingent liabilities

The average number of full-time persons employed during the year (other than executive directors) was as follows:

Employee costs during the year comprise:

CompanyGroup

CompanyGroup

The company is involved in various legal proceedings as at 30 September 2017. Of the 21 (twenty-one) suits that the company is involved in, the companyis a sole defendant in 16 (sixteen) of the pending suits and a co-defendant in 5 (five) suits. The total aggregate claims by all claimants in all these lawsuitsas of the reporting date is N6,512,108,866 (as of 30 September 2016, the figure was N25.693 trillion). The drop in the total liabilities in the current year fromwhat it was in the previous year resulted from the striking out by the Federal High Court, Abuja, of Suit No.: FHC/ABJ/CS/107/14 (Chief Francis Amasi-Tito& Ors vs. Notore & 3 Ors.) in which the claimants claimed the sum of N25,689,950,500,000 against all the defendants namely: the President of the FederalRepublic of Nigeria, the Governor of Rivers State, the Director-General of Bureau for Public Enterprises and Notore Chemical Industries Ltd. The directorsbelieve, based on legal advice that no significant loss will eventuate on the part of the Notore from all these suits (i.e. cases co-defending and cases solelydefending), hence, no provision has been made in the accounts for these claims.

Group

2,000,001 500,000

Company

Number Number

The number of directors (excluding the chairman) whose remuneration fell within the following ranges were:

Number Number Group Company

Number

Group Company

9,000,001

Higher-paid employees of the Company, other than directors, whose duties were wholly or mainly discharged in Nigeria, received remuneration in excess ofN500,000 (excluding pension contributions) in the following ranges:

Group Company

Directors's remuneration (including pension contributions) for directors of the Company charged to the profit and loss account are as follows:

7,500,001 6,500,001 5,000,001 3,500,001

Number

43



27 Investments in subsidiariesPrincipal subsidiaries

NameInvestment

Amount

Country of incoporation and place of

businessNature of business

Proportion of ordinary

shares held by parent

Proportion of ordinary

shares held by group

Proportion of ordinary shares

held by non-controlling

interestsN'000 % % %

Notore Supply and Trading Mauritius Limited 255 Mauritius 100.00 100.00 -

Notore Supply and Trading Limited BVI - British Virgin Islands

100.00 100.00 -

Notore Power Limited 10,000 Nigeria Power generation, distribution

and sale

99.99 99.99 0.01

Notore Foods Limited 10,000 Nigeria Marketing of farm produce

99.99 99.99 0.01

Notore Seeds Limited 10,000 NigeriaDevelopment

and marketing of high yield

seeds

99.99 99.99 0.01

Notore Indusrial City Limited 10,000 Nigeria Development and operating

of industrial parks

99.99 99.99 0.01

40,255

Movement in investment in subsidiaries


Opening balance 30,255 30,255 30,000Increase during the year 10,000 - 255 Closing balance 40,255 30,255 30,255

28 Events after the statement of financial position date

29 Going concern

1.

2.

These circumstances cast doubt about the ability of the group and company to meet their obligations as they fall due and accordingly, theappropriateness of the use of the accounting policies applicable to a going concern.

The group had the following subsidiaries as at 30 September 2017

Sale of fertilisers and

other chemical products

Company

All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertakings held directly by the parentcompany do not differ from the proportion of ordinary shares held.

The company was on 4 December 2017 granted a license by the Oil and Gas Free Zones Authority as a Free Zone Developer in the Oil and Gas Zone,Onnes, Rivers State of Nigeria. By this license, the company's entire land area (558.623 Hectares) is now designated an Oil and Gas Free Zone area,while the Company's fertilizer plant located within this Free Zone area will now be deemed a business operating withjin the Oil and Gas Free Zone,Onne.

The consolidated financial statements are prepared using IFRSs that are applicable to a going concern, which contemplates the realization of assetsand settlement of liabilities in the normal course of business as they fall due.The group and company recorded losses before tax of N2.15 billion (2016: N11.84 billion) and N2.08 billion (2016: N11.84 billion) respectively during theyear ended 30 September 2017 and the net current liabilities as of that date were N51.78 billion (2016: N50.77 billion) and N52.50 billion (2016: N51.56billion) respectively.

As part of measures to improve working capital and return the group and the company to profitability, management took the followings steps:

On successful completion of the turnaround maintenance, it is anticipated that the company’s capacity utilization will increase to 95% from the current75%, leading to significant increases in future revenues and cash flows. Based on the foregoing, the directors are confident that the group and the company would be in a position to settle their obligations in the normal courseof business and consider it appropriate to prepare the consolidated financial statements on the basis of accounting policies applicable to a goingconcern.

An inability to raise additional financing or to return to profitability will impact the future assessment of the group and the company as a going concern.These financial statements do not reflect the adjustments to the carrying value of assets and liabilities or the classifications that would be necessary ifthe group and the company were unable to realise their assets and settle their liabilities as a going concern in the normal course of operations. Suchadjustments could be material.

Restructuring of the company’s short-term loans and past due loan obligations totaling N41.94 billion as at 30th September 2017 into fixed long-term loans with varying maturities ranging between five and seven years. In addition, most of this will be subject to a 12 month moratorium onprincipal repayments with more favourable repayment terms. This will reduce significantly the current liabilities and free up significant cash flowsthat will augment working capital.

Raising of fresh USD40 million seven year Term Loan facility from the African Export-Import Bank (Afreximbank). The directors plan to utilize theproceeds of the Afreximbank term loan for essential capital asset investments such as scheduled turn-around maintenance of production facilities,rehabilitation of the 25MW back-up gas turbine and procurement of critical spares for the production plant. Preliminary approval of this loan hasbeen received from Afreximbank and the Directors are confident that the loan arrangement will be finalized successfully before the end of firstQuarter of 2018.

44



30 Restatement of comparative financial information

As previously reported Adjustment

Revised amount

As previously reported Adjustment Revised amount

30-Sep-16 30-Sep-16 30-Sep-16 30-Sep-16N'000 N'000 N'000 N'000 N'000 N'000

Statements of profit or loss and other comprehensive income:

Employee benefits expense (Note 9c):Salaries and wages 2,733,844 - 2,733,844 2,702,640 - 2,702,640 Other employee benefits 914,639 - 914,639 914,639 - 914,639 Termination benefits 15,462 - 15,462 15,462 - 15,462 Employer's pension contribution - defined contributions 252,302 - 252,302 252,302 - 252,302 Gratuity charge 746,965 (402,893) 344,072 746,965 (402,893) 344,072

4,663,212 (402,893) 4,260,319 4,632,008 (402,893) 4,229,115

Analysis of employee benefits expense charged to (Note 9d):

Cost of sales 2,552,731 (222,037) 2,330,694 2,552,731 (222,037) 2,330,694 Administrative expenses 2,110,481 (180,856) 1,929,625 2,079,277 (180,856) 1,898,421

4,663,212 (402,893) 4,260,319 4,632,008 (402,893) 4,229,115

Impact of empoyee benefits on:Cost of sales (Note 8) 18,498,839 (222,037) 18,276,802 18,597,156 (222,037) 18,375,119 Administrative expenses (Note 9a) 6,206,776 (180,856) 6,025,920 6,092,982 (180,856) 5,912,126

Loss before income tax (12,238,499) 402,893 (11,835,606) (12,239,786) 402,893 (11,836,893)Income tax expense (181,256) - (181,256) (181,256) - (181,256)

Loss after tax (12,419,755) 402,893 (12,016,862) (12,421,042) 402,893 (12,018,149)

Other comprehensive Income:

Items that will not be reclassified to profit or lossRemeasurement of employee benefit obligations (89,201) 117,784 28,583 (89,201) 117,784 28,583 Deferred tax credit/(charge) on actuarial loss 26,760 (35,335) (8,575) 26,760 (35,335) (8,575)

(62,441) 82,449 20,008 (62,441) 82,449 20,008

The Notore staff gratuity scheme is a lump sum benefit linked to salaries and services rendered in each year of the employee’s working life. The gratuitybenefit is calculated for each year of service and set aside as annual contribution in a notional account. The gratuity benefit payable at exit is the notionalaccount balance of the employee which consists of the sum of these annual gratuities (or annual contributions) only.The valuation report for the staffgratuity scheme as at 30th September 2017 produced by a firm of professional Actuaries, disclosed a liability adjustment of N2.26billion, resulting in arevision of the scheme’s prior years’ valuation and a significant reduction in its defined benefit obligation.

This liability adjustment was attributed to a programming error in the Actuaries liability estimation model applied in prior years, but discovered during theyear 2017 valuation review process. The erroneous model projected future notional annual gratuity balances instead of future annual gratuity contributions,leading to an overstatement of the scheme’s defined benefit obligation in prior years.The error predates 2015 but the correction has been made in theearliest practicable period.

The following tables reflect the impact of the required correction on the previously reported numbers in the 2015 and 2016 financial statements.

Year ended 30 September 2016Group Company

45



30 Restatement of comparative financial information - continued


Revised amount


30-Sep-16 30-Sep-16 30-Sep-16 30-Sep-16N N N N N N

Earnings per share for loss attributable to the equity holders of the company (Note 13) Basic EPS (Naira) (7.70) 0.25 (7.45) (7.71) 0.25 (7.46)Diluted EPS (Naira) (7.70) 0.25 (7.45) (7.71) 0.25 (7.46)


Revised amount



Deferred tax asset (Note 12a):Balance at the beginning of the year 5,549,059 (102,894) 5,446,165 5,549,059 (102,894) 5,446,165 Tax credit on components of other comprehensive income 26,760 - 26,760 26,760 - 26,760 Transfer of previously recognised tax credit for the year on remeasurement of EBO to deferred tax liability - (26,760) (26,760) - (26,760) (26,760)

Balance at the end of the year 5,575,819 (129,655) 5,446,165 5,575,819 (129,655) 5,446,165

Deferred tax liability (Note 12a):Balance at the beginning of the year 3,149,645 418,247 3,567,892 3,149,645 418,247 3,567,892 Deferred tax charge for the year 181,256 - 181,256 181,256 - 181,256

Deferred tax charge on revaluation surplus 23,949,023 - 23,949,023 23,949,023 - 23,949,023 Tax charge on components of other comprehensive income - 35,335 35,335 - 35,335 35,335 Transfer of previously recognised tax credit for the year on remeasurement of EBO from deferred tax asset - (26,760) (26,760) - (26,760) (26,760)

Balance at the end of the year 27,279,924 426,822 27,706,746 27,279,924 426,822 27,706,746

Employee benefit obligation (Note 22):

Balance at the beginning of the year 2,843,122 (1,737,136) 1,105,986 2,843,122 (1,737,136) 1,105,986

Charge during the year:Current service cost 498,956 (310,394) 188,562 498,956 (310,394) 188,562 Interest expense 248,009 (92,499) 155,510 248,009 (92,499) 155,510

Total 746,965 (402,893) 344,072 746,965 (402,893) 344,072

Remeasurements:Actuarial losses/(gains) - experience adjustment 89,201 (117,784) (28,583) 89,201 (117,784) (28,583)

Total 89,201 (117,784) (28,583) 89,201 (117,784) (28,583)

Payments from plans:Benefits paid by the employer (182,322) - (182,322) (182,322) - (182,322)

Total (182,322) - (182,322) (182,322) - (182,322)

Balance at the end of the year 3,496,966 (2,257,813) 1,239,153 3,496,966 (2,257,813) 1,239,153

Group Company

Group Company

46



30 Restatement of comparative financial information - continued


Revised amount



Retained earnings (Note 21):

Balance at the beginning (10,438,494) - (10,438,494) (11,011,940) - (11,011,940)Loss for the year (11,871,623) - (11,871,623) (11,643,684) - (11,643,684)Remeasurement of employee benefit obligations (342,981) 1,737,136 1,394,155 (342,981) 1,737,136 1,394,155

Deferred tax credit/(charge) on remeasurement 102,894 (521,141) (418,246) 102,894 (521,141) (418,246)

Balance at the end of the year (22,550,204) 1,215,995 (21,334,209) (22,895,711) 1,215,995 (21,679,714)

Deferred tax asset (Note 12a):

Balance at the beginning of the year 5,446,165 - 5,446,165 5,446,165 - 5,446,165 Tax credit/(charge) on components of other comprehensive income 102,894 - 102,894 102,894 - 102,894 Transfer of previously recognised tax credit for the year on remeasurement of EBO to deferred tax liability - (102,894) (102,894) - (102,894) (102,894)

Balance at the end of the year 5,549,059 (102,894) 5,446,165 5,549,059 (102,894) 5,446,165

Deferred tax liability (Note 12a):

Balance at the beginning of the year 3,149,645 - 3,149,645 3,149,645 3,149,645 Tax charge on components of other comprehensive income - 521,141 521,141 - 521,141 521,141 Transfer of previously recognised tax credit for the year on remeasurement of EBO from deferred tax asset - (102,894) (102,894) - (102,894) (102,894)

Balance at the end of the year 3,149,645 418,247 3,567,892 3,149,645 418,247 3,567,892

Employee benefit obligation (Note 22):

Balance at the beginning of the year 2,028,219 - 2,028,219 2,028,219 - 2,028,219

Charge during the year:Current service cost 380,003 - 380,003 380,003 - 380,003 Interest expense 246,672 - 246,672 246,672 - 246,672

Total 626,675 - 626,675 626,675 - 626,675

Remeasurements:

Actuarial (gains)/losses - change in financial assumption (124,043) (89,929) (213,972) (124,043) (89,929) (213,972)

Actuarial losses losses/(gains) - experience adjustment 467,024 (1,647,207) (1,180,183) 467,024 (1,647,207) (1,180,183)

Total 342,981 (1,737,136) (1,394,155) 342,981 (1,737,136) (1,394,155)

Payments from plans:Benefits paid by the employer (154,753) - (154,753) (154,753) - (154,753)

Total (154,753) - (154,753) (154,753) - (154,753)

Balance at the end of the year 2,843,122 (1,737,136) 1,105,986 2,843,122 (1,737,136) 1,105,986

Year ended 30 September 2015Group Company

47

NOTORE CHEMICAL INDUSTRIES PLCSTATEMENT OF VALUE ADDEDFOR THE YEAR ENDED 30 SEPTEMBER 2017


Note GROUP GROUP COMPANY COMPANY2017 % 2016 % 2017 % 2016 %

Turnover 7 35,893,598 25,201,505 35,893,598 25,201,505

Other income 10 1,251,759 2,050,385 1,248,433 2,033,621

Less bought in goods and services- Local (17,896,228) (17,312,619) (17,860,663) (17,328,849)- Foreign (12,536) (12,128) (12,511) (12,139)

Value created 19,236,593 100 9,927,143 100 19,268,857 100 9,894,138 100

Applied as follows;

Salaries, wages and other benefits 9c 4,278,576 22 4,260,319 44 4,246,831 23 4,229,115 43

Finance cost - net 11 9,090,835 47 14,243,348 142 9,090,835 46 14,243,348 144

Taxation 12 (10,800,569) (56) 181,256 2 (10,800,569) (56) 181,256 2

Depreciation - PPE 14 8,015,317 42 3,259,054 33 8,014,770 42 3,258,540 33 - Intangibles 16 - - 28 - - - 28 -

Loss for the year 8,652,434 45 (12,016,862) (121) 8,716,990 45 (12,018,149) (122)

Value created 19,236,593 100 9,927,143 100 19,268,857 100 9,894,138 100

Note: Statement of value added is not a required disclosure under IFRS.

48

NOTORE CHEMICAL INDUSTRIES PLCFIVE YEAR FINANCIAL SUMMARY - GROUPAS AT 30 SEPTEMBER 2017


30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2014 30 Sept 2013

Total assets

139,871,225 147,110,578 79,785,279 85,649,501 86,118,4477,344,054 6,234,450 7,007,939 7,378,345 12,629,408

147,215,279 153,345,028 86,793,217 93,027,846 98,747,855

Total equity and liabilities

806,033 806,033 806,033 806,033 156,37027,995,916 27,995,916 27,995,916 27,995,916 27,564,748

407,580 406,962 139,511 (96.00) - - - - - 493,534

Asset revaluation reserves 41,360,539 46,090,430 - - - -19,883,179 -33,331,063 -21,334,209 -10,438,494 -1,061,20237,408,699 54,368,417 37,920,266 46,491,212 43,626,15959,119,691 57,008,333 41,265,701 28,173,275 27,968,246

147,215,279 153,345,028 86,793,217 93,027,846 98,747,855

REVENUE AND PROFIT30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2014 30 Sept 2013

35,893,598 25,201,505 16,276,760 16,571,954 21,285,943-2,148,135 -11,835,606 -11,871,623 -11,653,758 1,694,325

10,800,569 -181,256 - -181,256 -459,1928,652,434 -12,016,862 -11,871,623 -11,653,758 1,235,133

PER ORDINARY SHARE

Earnings per share (Naira) 5.37 (7.45) (7.36) (7.44) 7.90

Note: Five year financial summary is not a required disclosure under IFRS.

Non-current liabilitiesCurrent liabilities

Share based payment reserve

Profit/(loss) after taxation

Turnover(Loss)/profit before taxationTaxation

Ordinary sharesShare premiumForeign currency translation reserve

Retained loss

Non-current assetsCurrent assets

49

NOTORE CHEMICAL INDUSTRIES PLCFIVE YEAR FINANCIAL SUMMARY - COMPANYAS AT 30 SEPTEMBER 2017


30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2014 30 Sept 2013

Total assets

139,910,166 147,138,972 79,814,700 85,679,258 86,148,2047,333,179 6,224,605 6,518,766 7,368,154 12,253,887

147,243,345 153,363,577 86,333,466 93,047,412 98,402,091

Total equity and liabilities

806,033 806,033 806,033 806,033 156,37027,995,916 27,995,916 27,995,916 27,995,916 27,564,748

- - - - 493,534Asset revaluation reserves 41,360,539 46,090,430 - - -

-20,165,417 -33,677,857 -21,679,716 -11,011,940 -1,656,59537,408,699 54,368,417 37,920,266 46,491,212 43,626,15959,837,575 57,780,638 41,290,967 28,766,191 28,217,875

147,243,345 153,363,577 86,333,466 93,047,412 98,402,091

REVENUE AND PROFIT30 Sept 2017 30 Sept 2016 30 Sept 2015 30 Sept 2014 30 Sept 2013

35,893,598 25,201,505 16,600,804 16,500,881 20,233,013-2,083,579 -11,836,893 -11,643,684 -11,631,743 1,202,095

10,800,569 -181,256 - - -459,1928,716,990 -12,018,149 -11,643,684 -11,631,743 742,903

PER ORDINARY SHARE

Earnings per share (Naira) 5.41 (7.46) (7.22) (7.43) 4.75

Note: Five year financial summary is not a required disclosure under IFRS.

Turnover(Loss)/profit before taxationTaxationProfit/(loss) after taxation

Ordinary sharesShare premium

Retained loss

Share based payment reserve

Non-current assetsCurrent assets

Non-current liabilitiesCurrent liabilities

50

NOTORE CHEMICAL INDUSTRIES PLC ANNUAL …notore.com/images/investor_relations/Notore_September_2017_Audited... · Victoria Island Lagos Auditor ... Notore Chemical Industries Plc

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