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ABC TRANSPORT PLC

CONSOLIDATED FINANCIAL STATEMENTS

31 DECEMBER 2017

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

INDEX PAGE

Statement of Directors' responsibilities in relation to the financial statements 1

Independent auditor's report 2

Consolidated statement of profit or loss and other comprehensive income 7

Consolidated statement of financial position 8

Consolidated statement of changes in equity 9

Consolidated statement of cash flows 10

Notes to the financial statements 11

Other national disclosures:

Consolidated statement of value added 71

Financial summary – Group 72

Financial summary – Company 73

ABC TRANSPORT PLC

ABC TRANSPORT PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2017

2017 2016 2017 2016

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

Non-current assets

Deferred tax asset 11.3 60,543 60,543 59,864 59,864

Intangible assets 14 18,565 18,457 18,565 18,457

Property, plant and equipment 15 2,955,045 2,977,889 2,873,463 2,902,614

Investment in subsidiaries 16 - - 41,470 41,470

Other investments 17 1,845 1,845 1,845 1,845

Financial assets - FVTPL 17.2 19,792 16,935 19,792 16,935

Total non-current assets 3,055,790 3,075,669 3,014,999 3,041,185

Current assets

Inventories 19 587,087 552,936 228,372 171,280

Trade and other receivables 20 324,909 248,884 163,766 307,118

Other current assets 21 329,655 362,535 413,516 299,422

Cash and bank balances 22 173,191 85,635 100,967 62,370

Total current assets 1,414,842 1,249,990 906,621 840,190

Total assets 4,470,632 4,325,659 3,921,621 3,881,376

Equity and reserves

Issued share capital 23.1 828,850 828,850 828,850 828,850

Share premium 23.2 575,391 575,391 575,391 575,391

Retained earnings 24 324,595 142,804 382,555 366,772

Other comprehensive income reserve 25 (1,684) (45,534) 3,040 (39,591)

Shareholder's fund 1,727,152 1,501,511 1,789,836 1,731,422

Non-controlling interests 26 214,435 (117,001) - -

Total equity and reserves 1,941,587 1,384,510 1,789,836 1,731,422

Non-current liabilities

Long-term borrowings 27 357,653 50,726 263,595 50,726

Finance lease obligations 28 - - - -

Post employment benefits - defined benefits 29.1 268,039 270,436 265,644 266,498

Provisions 30 24,861 6,614 24,861 6,614

Deferred tax 11.3 - - - -

Total non-current liabilities 650,553 327,776 554,100 323,838

Current liabilities

Short term borrowings 27 285,269 842,263 285,269 405,370

Finance lease obligations 28 - 45,607 - 45,607

Post employment benefits - defined contribution 29.1 204,419 187,549 204,403 187,338

Current tax liabilities 11.2 262,329 158,996 101,204 157,359

Trade and other payables 31 939,665 1,185,183 799,999 836,744

Deferred income 32 18,814 6,269 18,814 6,269

Bank overdrafts 22.1 167,996 187,506 167,996 187,429

Total current liabilities 1,878,492 2,613,373 1,577,686 1,826,116

Total Liabilities 2,529,045 2,941,149 2,131,786 2,149,954

Total equity and liabilities 4,470,632 4,325,659 3,921,621 3,881,376

____________________________ ____________________________ ____________________________Prince Olumide Obayomi Mr. Frank Nneji

Chairman Managing Director/CEO

FRC/2014/00000009248 FRC/2015/00000011771

The accompanying notes and statement of significant accounting policies form an integral part of these consolidated financial

statements.

Chief Finance Officer

FRC/2014/ICAN/00000007350

Group Company

Mr. Rex Okoro

The consolidated financial statements were approved by the Board of Directors on 17 March 2018 and signed on its behalf by:

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ABC TRANSPORT PLC

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME


2017 2016 2017 2016

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

Continuing operations

Revenue 6 7,186,797 6,710,047 5,723,335 5,631,984

Direct costs 43 (5,568,814) (5,498,566) (4,653,659) (4,698,392)

Gross profit 1,617,983 1,211,481 1,069,676 933,592

Administrative expenses 44 (1,036,500) (1,409,015) (1,157,665) (1,160,441)

Other operating income 6.2.1 282,211 85,263 72,685 84,978

Investment income 6.2.4 - - 163,350 -

Interest income 6.2.2 754 1,778 749 108

Net fair value gains on financial assets through

profit or loss6.2.2.1 2,285 1,783 2,285 1,783

Impairment losses 9 - (8,184) - (8,184)

Other gains and losses 6.2.3 100,323 115,829 91,042 103,055

Finance costs 10 (200,211) (489,514) (136,815) (213,002)

Profit/(Loss) before tax 766,844 (490,579) 105,307 (258,111)

Income tax expense 11 (253,586) (109,219) (89,524) (101,527)

Profit/(Loss) from continuing operations 513,258 (599,798) 15,783 (359,638)

Attributable to:

Equity shareholders 181,791 (481,525) 15,783 (359,638)

Non-controlling interests 26 331,467 (118,273) - -

513,258 (599,798) 15,783 (359,638)

Items that may be reclassified subsequently

to profit or loss

Foreign exchange translation gain(loss), net of tax 24 249 (3,095) - -

Net gain/(loss) on defined benefit plans, net of tax 29 43,601 27,776 42,631 27,598

Other comprehensive income/(loss) 43,850 24,681 42,631 27,598

Total comprehensive income/(loss) for the year 557,108 (575,117) 58,414 (332,040)

Attributable to:

Equity shareholders 225,671 (457,082) 58,414 (332,040)

Non-controlling interests 331,436 (118,035) - -

557,108 (575,117) 58,414 (332,040)

Basic and diluted Earnings/(Loss) per share (Kobo) 12 31 (36) 1 (22)

Group Company

The accompanying notes and statement of significant accounting policies form an integral part of these consolidated

financial statements.

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ABC TRANSPORT PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


I. Group Issued Non share Share Retained OCI controllin

capital premium earnings reserves interests Total

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

At 1 January 2016 828,850 575,391 624,329 (76,405) (33,357) 1,918,808

Changes in equity for 2016:

Loss for the year - - (481,525) - (118,273) (599,798)

Issued share capital - - - - 34,950 34,950 Actuarial loss - - - 27,776 (83) 27,693

Translation gain - - - 3,095 (238) 2,857

At 31 December 2016 828,850 575,391 142,804 (45,534) (117,001) 1,384,510

At 1 January 2017 828,850 575,391 142,804 (45,534) (117,001) 1,384,510


Profit for the year - - 181,791 - 331,467 513,258

Issued share capital - - - - - -

Actuarial Gain - - - 43,601 - 43,601

Translation gain - - - 249 (31) 218

31 December 2017 828,850 575,391 324,595 (1,684) 214,435 1,941,587

II. Company

Issued

share

capital

Share

premium

Retained

earnings

OCI

reserves Total

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

1 January 2016 828,850 575,391 726,410 (67,189) 2,063,462


Loss for the year - - (359,638) - (359,638)

Issued share capital - - 0

Other comprehensive income - - - 27,598 27,598

Dividends relating to 2016 paid during the year - - - - -

31 December 2016 828,850 575,391 366,772 (39,591) 1,731,422

1 January 2017 828,850 575,391 366,772 (39,591) 1,731,422


Profit for the year - - 15,783 - 15,783

Issued share capital - - - - -

Other comprehensive income - - - 42,631 42,631

Dividends relating to 2017 paid during the year - - - - -

31 December 2017 828,850 575,391 382,555 3,040 1,789,836

The accompanying notes and statement of significant accounting policies form an integral part of these

consolidated financial statements.

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ABC TRANSPORT PLC

CONSOLIDATED STATEMENT OF CASH FLOWS


2017 2016 2017 2016

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

Cash flows from operating activities

Profit/(loss) for the year 513,258 (599,798) 15,783 (359,638)

Adjustment for:

Depreciation and amortisation 915,883 1,140,631 914,348 1,133,615

Movement in non-controlling interest - 65,501 - -

Non-controlling interest translation gain (31) - - -

Movement in FVTPL (2,857) - (2,857) -

Fair value gain (3,039) 1,434 (3,034) (1,891)

Interest expense 200,211 489,514 136,815 213,002

Income tax expense 253,586 109,219 89,524 101,527

Investment income - - (163,350) -

Profit on disposal of property, plant and equipment (23,542) (38,921) (23,542) (38,921)

Impairment Loss recognised in the year - 8,184 - 8,184

1,853,470 1,175,765 963,688 1,055,879

Changes in:

Trade and other receivables (76,025) 71,366 143,352 226,672

Other assets 32,880 88,544 (114,094) 71,509

Inventories (34,151) 643,954 (57,092) 3,963

Post employment benefits 14,474 34,604 16,211 33,496

Provisions 18,247 (3,521) 18,248 (3,521)

Trade and other payables (245,518) 128,922 (36,745) (13,550)

Other comprehensive income reserve 43,850 - 42,631 -

Deferred income 12,545 275 12,545 275

Cash generated from operating activities 1,619,772 2,139,909 988,744 1,374,723

Tax paid using withholding tax certificate (125,766) (76,490) (125,766) (76,490)

Tax paid through cash (24,487) (86,445) (19,913) (76,860)

Net cash from operating activities 1,469,519 1,976,974 843,065 1,221,373

Cash flows from investing activities:

Investments in financial assets 3,039 1,783 3,034 1,891

Purchase of property, plant and equipment (890,389) (402,082) (882,546) (335,772)

Other movement in property, plant and equipment 4,898 3,991 4,898 4,454

Purchase of intangible assets (9,016) (3,237) (9,016) (3,237)

Additional investment in subsidiaries - - - 34,950

Proceeds from investments - - 163,350 -

Proceeds on sale of property plant and equipment 24,902 66,320 24,901 66,319

Cash received from investment in finance leases - 21,792 - 4,783

Net cash used in investing activities (866,567) (311,433) (695,380) (226,612)

Cash flows from financing activities:

Increase in share capital - - - -

Increase in share premium - - - -

Additional borrowings taken 535,892 - 535,893 -

Repayment of borrowings (785,959) (988,618) (443,125) (697,315)

Additional finance leases - - - -

Repayment of finance lease obligations (45,607) (127,170) (45,607) (148,962)

Finance costs (200,211) (489,514) (136,815) (213,002)

Net cash used in financing activities (495,885) (1,605,302) (89,655) (1,059,279)

Net increase/(decrease) in cash and cash

equivalents 107,067 60,239 58,031 (64,518)

Cash and cash equivalents at 1 January (101,871) (162,110) (125,059) (60,541)

Cash and cash equivalents at 31 December 22 5,196 (101,871) (67,029) (125,059)

Group Company

The accompanying notes and statement of significant accounting policies form an integral part of these consolidated financial

statements.

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ABC TRANSPORT PLC

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1. General information

1.1. The Group

1.2 Corporate office

1.3 Principal activities

2. Basis of preparation

2.1 Statement of compliance with IFRSs

2.2 Basis of measurement

2.3 Use of estimates and judgements

2.4. Going concern consideration

These consolidated financial statements comprise the financial statements of ABC Transport Plc (referred

to as "the company" and its subsidiaries (together referred to as "the group"). The company which became

a public liability company in 2005 equally owns 99% in ABC Transport in Ghana to provide transport

service, 50% equity stake in Transit Supports Services Ltd, a trading company engaged in the importation

and sales of vehicle spares and installation of motor vehicle speed governing devices, and a 5% stake in

ABC Express Courier (ABEX) Ltd. In October 2014,Transit Supports Services Ltd commenced the

assembly of heavy duty trucks under the automotive policy of the Federal Government of Nigeria. The

assembly is carried out in partnership with the Shanxi Group of China(owners of the Shacman franchise)

and the Anambra Motor Manufacturing Company of Nigeria.

The Group's management has made an assessment of the Group's ability to continue as a going concern

and is satisfied that the Group has the resources to continue in business for the foreseeable future.

Furthermore, management is not aware of any material uncertainties that may cast significant doubt upon

the Group's ability to continue as a going concern. Therefore the financial statements are prepared on the

going concern basis.

These consolidated financial statements are the financial statements of the company and its subsidiaries

(together, "the group"). The consolidated financial statements for the year ended 31 December 2017 have

been prepared in line with IFRS 10 on Consolidated Financial Statements in accordance with the

International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standard

Board ("IASB") and in compliance with the Financial Reporting Council of Nigeria Act, No 6, 2011.

Additional information required by local regulators are included where appropriate.

The registered office address of the company is Kilometer 5, MCC/Uratta Road, Umuoba Uratta, P.O. Box

2575, Owerri, Imo State.

The principal activities of the group are road transportation, cargo business across the road passenger

network, haulage activities, importation and sales of vehicle spares, installation of motor vehicle speed

governing devices, assembly of heavy duty trucks under the automotive policy of the Federal Government

of Nigeria and hospitality business.

These consolidated financial statements have been prepared in accordance with the going concern

principle under the historical cost convention, except as modified by actuarial valuation of staff gratuity and

fair valuation of financial assets and liabilities where applicable. The liability for defined benefit obligations is

recognized as the present value of the defined benefit obligation less the total of the plan assets, plus

unrecognized actuarial gains, less unrecognized past service cost and unrecognized actuarial losses while

the plan assets for defined benefit obligations are measured at fair value.

The preparation of consolidated financial statements in conformity with IFRS requires the use of certain

critical accounting estimates, it also requires management to exercise its judgment in the process of

applying the group’s accounting policies. Changes in assumptions may have a significant impact on the

consolidated financial statements in the period the assumptions changed. Management believes that the

underlying assumptions are appropriate and therefore the group’s consolidated financial statements

present the financial position and results fairly.

The consolidated financial statements comprise of the statement of profit or loss and other comprehensive

income, the statement of financial position, the statement of changes in equity, the statement of cashflows

and notes to the financial statements.

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ABC TRANSPORT PLC



2.5 Functional and presentation currency

2.6 Basis of consolidation

All intra-group transactions, income and expenses are eliminated in full on consolidation.

2.7 Summary of Standards and Interpretations effective for the first time

a Amendments to IFRS 12 Disclosure of Interests in Other Entities

b Amendments to IFRS for SMEs

Three amendments are however of larger impact:

-

-

-

c Amendments to IAS 7 Statement of Cash Flows

The standard now allows an option to use the revaluation model for property, plant and equipment as

not allowing this option has been identified as the single biggest impediment to adoption of the IFRS for

SMEs in some jurisdictions in which SMEs commonly revalue their property, plant and equipment and/or

are required by law to revalue property, plant and equipment;

The main recognition and measurement requirements for deferred income tax have been aligned with

current requirements in IAS 12 Income Taxes (in developing the IFRS for SMEs, the IASB had already

anticipated finalization of its proposed changes to IAS 12, however, these changes were never

finalized); and

The main recognition and measurement requirements for exploration and evaluation assets have been

aligned with IFRS 6 Exploration for and Evaluation of Mineral Resources to ensure that the IFRS for

SMEs provides the same relief as full IFRSs for these activities.

This amendment to IAS7 clarify that entities shall provide disclosures that enable users of financial

statements to evaluate changes in liabilities arising from financing activities.

Subsidiaries are entities over which the Group has control. IFRS 10 defines control as having these three

elements: (a) power over an investee, (b) exposure or rights to variable returns from involvement with the

investee, and (c) the ability to use its power over the investee to affect the amount of the investor's returns.

Although the equity interest of the Group in Transit Support Service Limited is 50%, control is predicated on

the fact that: (i) The managing director of ABC Transport Plc owns the other 50% equity of the equity

share; (ii). An executive director in ABC Transport Plc represents the company on the Board of Transit

Support Services Ltd; and (iii) ABC Transport Plc is a major customer to Transit Support Services Ltd,

which deals on vehicle consumable and speed governing devices.

These consolidated financial statements are presented in Nigerian Naira, which is the group's functional

currency except as indicated in these consolidated financial statements, financial information presented in

Naira has been rounded to the nearest thousand.

The consolidated financial statements incorporate the financial statement of ABC Transport Plc and its

subsidiaries made up to 31 December each year.

This amendment clarifies the scope of the standard by specifying that the disclosure requirements in the

standard, apply to an entity’s interests that are classified as held for sale, as held for distribution or as

discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued

Operations.

Non-controlling interests represent the portion of profit or loss and net assets of subsidiaries not owned,

directly or indirectly by ABC Transport Plc. Non-controlling interests are presented separately in the

consolidated income statement and within equity in the consolidated statement of financial position

separately from the parent shareholders' equity.

Associates are those entities over which the Group can exercise significant influence, but not control or joint

control. Investment in associate is accounted for in the financial statements using the equity method.

Investment in the associate is carried in the statement of financial position at cost plus post acquisition

changes in the Group’s share in the net assets of associate, less any impairment in value. The statement of

profit or loss reflects the Group’s share of the results of the operations of associate.

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ABC TRANSPORT PLC



d Amendments to IAS 12 Income Taxes

-

- The carrying amount of an asset does not limit the estimation of probable future taxable profits.

-

-

2.8

2.8.1 Amendments effective from annual periods beginning on or after 1 January 2018a Amendments to IFRS 2 Share-based Payment

b Amendments to IFRS 4 Insurance Contracts

-

-

c Amendments to IFRS 15 'Revenue from Contracts with Customers

- Identify the contract with the customer

- Identify the performance obligations in the contract

- Determine the transaction price

- Allocate the transaction price to the performance obligations in the contracts

- Recognize revenue when (or as) the entity satisfies a performance obligation.

d Amendments to IFRS 9 Financial Instruments

-

IFRS 15 provides a single, principles based five step model to be applied to all contracts with customers.

The five steps in the model are as follows:

Guidance is provided on topics such as the point in which revenue is recognized, accounting for variable

consideration, costs of fulfilling and obtaining a contract and various related matters. New disclosures about

revenue are also introduced.

Amends IFRS 15 Revenue from Contracts with Customers also clarify three aspects of the standard

(identifying performance obligations, principal versus agent considerations, and licensing) and to provide

some transition relief for modified contracts and completed contracts.

A finalized version of IFRS 9 which contains accounting requirements for financial instruments, replacing

IAS 39 Financial Instruments: Recognition and Measurement. The standard contains requirements in the

following areas:

Classification and measurement. Financial assets are classified by reference to the business model

within which they are held and their contractual cash flow characteristics. The 2014 version of IFRS 9

introduces a 'fair value through other comprehensive income' category for certain debt instruments.

Financial liabilities are classified in a similar manner to under IAS 39; however there are differences in

the requirements applying to the measurement of an entity's own credit risk.

Amends to recognition of deferred tax assets for unrealized losses, IAS 12 Income Taxes clarify the

following aspects:

Unrealized losses on debt instruments measured at fair value and measured at cost for tax purposes

give rise to a deductible temporary difference regardless of whether the debt instrument's holder expects

to recover the carrying amount of the debt instrument by sale or by use.

Estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible

temporary differences.

An entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax law

restricts the utilization of tax losses, an entity would assess a deferred tax asset in combination with

other deferred tax assets of the same type.

Standards and interpretations issued/amended but not yet effective.

At the date of authorisation of these financial statements the following standards, amendments to existing

standards and interpretations were in issue, but not yet effective: This includes:

Amends IFRS 2 Share-based Payment to clarify the standard in relation to the accounting for cash settled

share-based payment transactions that include a performance condition, the classification of share-based

payment transactions with net settlement features, and the accounting for modifications of share-based

payment transactions from cash-settled to equity-settled.

Amends IFRS 4 Insurance Contracts provide two options for entities that issue insurance contracts within

the scope of IFRS 4:

An option that permits entities to reclassify, from profit or loss to other comprehensive income, some of

the income or expenses arising from designated financial assets; this is the so called overlay approach;

An optional temporary exemption from applying IFRS 9 for entities whose predominant activity is

issuing contracts within the scope of IFRS 4; this is the so-called deferral approach.

The application of both approaches is optional and an entity is permitted to stop applying them before the

new insurance contracts standard is applied.

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-

-

-

e Amendments to IAS 40 Investment Property

f Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards

g Amendments to IAS 28 Investments in Associates and Joint Ventures

2.8.2 Amendments effective from annual periods beginning on or after 1 January 2019

a

Effective for an annual periods beginning on or after 1 January 2019:-

-

-

-

- IFRS 16 supersedes the following Standards and Interpretations:

a) IAS 17 Leases;

b) IFRIC 4 Determining whether an Arrangement contains a Lease;

c) SIC-15 Operating Leases - Incentives; and

d) SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

New standard that introduces a single lessee accounting model and requires a lessee to recognise

assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of

low value. A lessee is required to recognise a right-of-use asset representing its right to use the

underlying leased asset and a lease liability representing its obligation to make lease payments. A

lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and

equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee

recognises depreciation of the right-of-use asset and interest on the lease liability, and also classifies

cash repayments of the lease liability into a principal portion and an interest portion and presents them

in the statement of cash flows applying IAS 7 Statement of Cash Flows.

IFRS 16 contains expanded disclosure requirements for lessees. Lessees will need to apply judgement

in deciding upon the information to disclose to meet the objective of providing a basis for users of

financial statements to assess the effect that leases have on the financial position, financial

performance and cash flows of the lessee.

IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a

lessor continues to classify its leases as operating leases or finance leases, and to account for those

two types of leases differently.

IFRS 16 also requires enhanced disclosures to be provided by lessors that will improve information

disclosed about a lessor’s risk exposure, particularly to residual value risk.

Impairment. The 2014 version of IFRS 9 introduces an 'expected credit loss' model for the measurement

of the impairment of financial assets, so it is no longer necessary for a credit event to have occurred

before a credit loss is recognized

Hedge accounting. Introduces a new hedge accounting model that is designed to be more closely

aligned with how entities undertake risk management activities when hedging financial and non-financial

risk exposures

Derecognition. The requirements for derecognition of financial assets and liabilities are carried forward

from IAS 39.

Amends paragraph 57 to state that an entity shall transfer a property to, or from, investment property when,

and only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases

to meet, the definition of investment property. A change in management’s intentions for the use of a

property by itself does not constitute evidence of a change in use. The list of examples of evidence in

paragraph 57(a) – (d) is now presented as a non-exhaustive list of examples instead of the previous

exhaustive list.

Amendments’ resulting from Annual Improvements 2014–2016 Cycle, the amendment deletes the short-

term exemptions in paragraphs E3–E7 of IFRS 1, because they have now served their intended purpose.

This amendment Clarifies that the election to measure at fair value through profit or loss an investment in

an associate or a joint venture that is held by an entity that is a venture capital organization, or other

qualifying entity, is available for each investment in an associate or joint venture on an investment by

investment basis, upon initial recognition.

IFRS 16 'Leases'

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ABC TRANSPORT PLC



2.8.3 New standards, amendments and interpretations issued but without an effective date

a Amendments to IFRS 9 Financial Instruments

IFRS 9 introduces new requirements for classifying and measuring financial assets, as follows:

-

-

-

-

b

-

-

3. Summary of significant accounting policies

3.1 Revenue recognition

3.1.2 Investment return

Require the partial recognition of gains and losses where the assets do not constitute a business, i.e. a

gain or loss is recognized only to the extent of the unrelated investors’ interests in that associate or joint

venture.

These requirements apply regardless of the legal form of the transaction, e.g. whether the sale or

contribution of assets occurs by an investor transferring shares in a subsidiary that holds the assets

(resulting in loss of control of the subsidiary), or by the direct sale of the assets themselves.

Debt instruments meeting both a 'business model' test and a 'cash flow characteristics' test are

measured at amortised cost (the use of fair value is optional in some limited circumstances).

Investments in equity instruments can be designated as 'fair value through other comprehensive

income' with only dividends being recognized in profit or loss.

All other instruments (including all derivatives) are measured at fair value with changes recognized in

the profit or loss

The concept of 'embedded derivatives' does not apply to financial assets within the scope of the

Standard and the entire instrument must be classified and measured in accordance with the above

guidelines.

Also a revised version of IFRS 9 incorporating requirements for the classification and measurement of

financial liabilities, and carrying over the existing derecognition requirements from IAS 39 Financial

Instruments: Recognition and Measurement.

The revised financial liability provisions maintain the existing amortised cost measurement basis for most

liabilities. New requirements apply where an entity chooses to measure a liability at fair value through profit

or loss in these cases, the portion of the change in fair value related to changes in the entity's own credit

risk is presented in other comprehensive income rather than within profit or loss.

Amendments to IFRS 10 and IAS 28 Consolidated Financial Statements and Investments in

Associates and Joint VenturesAmends IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint

Ventures (2011) to clarify the treatment of the sale or contribution of assets from an investor to its associate

or joint venture, as follows:

Require full recognition in the investor's financial statements of gains and losses arising on the sale or

contribution of assets that constitute a business (as defined in IFRS 3 Business Combinations).

Revenue received in advance (advance bookings for passenger travels) is treated as a liability, until the

service is rendered. Revenue for cargo items not yet delivered to destination as at the reporting date is

equally treated as a liability while all attributable revenue on delivered loads (haulage and cargo) at the end

of the reporting period are included in revenue irrespective of when they are invoiced to the customer.

The significant accounting policies set out below have been applied consistently to all years presented in

these consolidated financial statements unless otherwise indicated.

Investment return consists of dividend, interest and rent receivable, movement in amortized cost on debt

securities and other loan and receivables and realized gains and losses, and unrealized gains and losses

on fair value assets recognised in the profit or loss.

Revenue is measured at the fair value of the consideration received or receivable in respect of passenger

operation, cargo services, haulage, hire services, sale of vehicles, vehicle spare parts and hospitality

business.

At the date of authorisation of these financial statements the following standards, amendments to existing

standards and interpretations were in issue, but without an effective: This includes:

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ABC TRANSPORT PLC



3.1.3 Interest income

3.1.4 Rental income

Rental income is recognized on an accrued basis.

3.1.5 Realised gains and losses

3.1.6 Proceed from disposal of property, plant and equipment

3.2 Customer loyalty programme

3.3 Property, plant and equipment

3.3.1 Recognition

3.3.2 Subsequent costs

Major refurbishments and renovations are capitalized as part of the item of the property, plant and

equipment and are depreciated over the remaining useful lives of the assets.

Proceeds from the disposal of property, plant and equipment are excluded from revenue, they form part of

other income as gains or losses from disposal of property, plant and equipment. Gains or losses on the

remeasurement of non-current assets classified as held for sale that does not meet the definition of

discontinued operations are included in profit or loss from continuing operations.

The realised gains or losses on the disposal of an investment is the difference between proceeds received,

net of transaction costs and it original or amortised costs as appropriate.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective

interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the

expected life of the financial asset to the assets carrying amount.

On presentation of 11 manual tickets or 10 e-tickets, a customer is awarded a free ticket for the next travel,

hence revenue from passenger operation (coach) is regarded as a multiple-component sales i.e the

components being revenue and award credit.

The Group grants award credits for each sale/travel which is accumulated for each passenger up to the

number required for redemption of the award. The consideration initially received for each travel is allocated

between revenue and the award credit. The consideration allocated to award credits represents the amount

that the entity has received for accepting an obligation to supply awards if customers redeem the credits.

This amount reflects both the value of the awards and the Group’s expectations regarding the proportion of

credits that will be redeemed, i.e. the risk of a claim being made. A customer loyalty award obligation is

recognized as a liability until the Group fulfills its obligations to deliver awards to customers or when the risk

of a claim has expired. Claims in respect of a particular year expire at the end of February of the

succeeding year. Hence, revenue relating to award credits is recognized as the risk expires, i.e. based on

the number of award credits that have been redeemed relative to the total number expected to be

redeemed. This is in accordance with International Financial Reporting Interpretation Committee 13 (IFRIC

13).

Property, plant and equipment are stated at cost less accumulated depreciation and any recognized

impairment loss. Bus terminals and other buildings are carried at their historical cost less accumulated

depreciation and any impairment loss. Durability of such items is considered before capitalisation. Major

spare parts of motor vehicles which include axle, gear box, engine, body and other significant components

are capitalised when they are replaced and depreciated over the remaining useful lives of the assets. The

values of the replaced parts are derecognised on replacement.

Buildings on leasehold lands are depreciated over their estimated useful lives unless there are indications

that the lease will not be renewable at the expiration of the extant lease terms, in which case the buildings

are depreciated over the remaining life of the lease. In such a case a decommissioning cost is capitalised

and discounted over the remaining life of the lease in accordance with IAS 37.

The fair value of land and buildings have been adopted as the deemed cost for these assets. All other

assets have been recognized at their historical costs.

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3.3.3 Depreciation of property, plant and equipment

Asset class

Luxury buses and trucks 5-7 years

Trailer beds 7-10 years

Shuttle buses 2-5 years

Pool buses 4-6 years

Computers 3-5 years

Furniture and equipment 4-5 years

Buildings 15-20 years

Depreciation commences when assets are available for use.

3.3.4 Derecognition

3.3.5 Reclassification

3.4. Inventories

3.5

Motor vehicles assembled for sale,spare parts and other stock items are valued at the lower of cost and net

realisable value. Cost includes purchase cost and other cost incurred in bringing the stocks to their present

location and condition. The weighted average cost method is used to determine cost.

Depreciation is calculated using the straight-line method to allocate their cost to their residual values over

their estimated useful life, as follows:

When the use of a property changes from owner-occupier to investment property, the property is re-

measured to fair value and reclassified as investment property. Any gain arising on re-measurement is

recognized in the income statement to the extent that it reverses a previous impairment loss on the specific

property, with any remaining recognized in other comprehensive income and presented in the revaluation

reserve in equity. Any loss is recognized immediately in the income statement.

Borrowing costs relating to self constructed items of property, plant and equipment are capitalised in line

with IAS 23 borrowing costs.

The group reviews the estimated useful lives of property, plant and equipment at the end of each reporting

period.

An item of property, plant and equipment is derecognised on disposal or when no future economic benefits

are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the

difference between the net disposal proceeds and the carrying amount of the asset) is included in the

income statement in the year the asset is derecognised.

Useful lives

Asset classified as held for sale are carried at the lower of carrying amount and fair value less cost to sell in

accordance with IFRS 5. Items of property, plant and equipment classified as held for sale are not

depreciated in accordance with IFRS 5 non-current assets held for sale and discontinued operations.

The assets’ residual values and useful lives are reviewed at the end of each reporting period and adjusted if

appropriate. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s

carrying amount is greater than its estimated recoverable value. Gain and losses on disposals are

determined by comparing the proceeds with the carrying amount. These are included in the income

statement as operating income.

Discontinued operations and non-current assets held for sale

This is the case, when the asset (or disposal group) is available for immediate sale in its present condition

subject only to terms that are usual and customary for sales of such assets (or disposal groups) and the

sale is considered to be highly probable.

Discontinued operations and non-current assets are classified as held for sale if their carrying amount will

be recovered through a sale transaction rather than through continuing use.

Discontinued operations and non-current assets held for sale are measured at the lower of carrying amount

and fair value less costs to sell.

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3.6 Impairment

Indicators of impairment

3.7 Provisions

The Group recognises a provision if, and only if:i. A present obligation (legal or constructive) has arisen as a result of past event,

ii. Payment is probable (more likely than not), and

iii. The amount can be reliably estimated.

3.8 Foreign currencies

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit)

is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount

does not exceed the carrying amount that would have been determined had no impairment loss been

recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is

recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which

case the reversal of the impairment loss is treated as a revaluation increase.

The Group’s motor vehicle performance report provides the primary reference for motor vehicles

impairment review. The report has such indicators as number of breakdowns per vehicle, spares

consumption per vehicle, number of operation run per vehicle, accidented vehicles etc. Secondary

indicators include market prices technology and the general economic situation in the country.

A sale is considered to be highly probable if the appropriate level of management is committed to a plan to

sell the asset (or disposal group), and an active programme to locate a buyer and complete the plan has

been initiated. Furthermore, the asset (or disposal group) has been actively marketed for sale at a price that

is reasonable in relation to its current fair value. In addition, the sale is expected to qualify for recognition

as a completed sale within one-year from the date that it is classified as held for sale.

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the entities within

the group. Monetary items denominated in foreign currencies are retranslated at the exchange rates

applying at the reporting date. Non-monetary items carried at fair value that are denominated in foreign

currencies are retranslated at the rates prevailing at the date when the fair value was determined.

Provision for settlement of litigation is measured at the most likely amount payable, as advised by the

Group’s solicitors. Provision for warranties is measured at a probability weighted expected value. Both

measurements are at discounted present values using a pre- tax discount rate that reflects the current

market assessment of the time value of money specific to the liability.

A possible obligation i.e. a contingent liability is disclosed but not accrued. However, disclosure is not made

if payment is remote.

At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is

any indication that those assets have suffered an impairment loss. If any such indication exists, the

recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if

any). Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value

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

that reflects current market assessments of the time value of money.

Where the asset does not generate cash flows that are independent from other assets, the Group

estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the asset does

not belong to a cash generating unit, its fair value is determined and compared to its carrying amount to

determine its recoverable amount. If the recoverable amount of an asset (or cash-generating unit) is

estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is

reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless

the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a

revaluation decrease to the extent of previous revaluation gains, with any residual impairment recognised

as an expense.

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•

•

•

3.9

3.9.1

3.9.2 Deferred tax

3.9.3

Capital gains tax relating to a disposal of an extraordinary item is deducted from such item.

The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that

it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be

recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in

which the liability is settled or the asset raised, based on tax rates (and tax laws) that have been enacted or

substantively enacted or substantively enacted by the end of the reporting period. The measurement of

deferred tax liabilities and asset reflect the tax consequences that would follow from the manner in which

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

and liabilities.

Current and deferred tax of the group are recognized in the statement of comprehensive income, except

when they relate to items that are recognized in other comprehensive income or directly in equity, in which

case, the current and deferred tax are also recognized in other compressive income or directly in equality

respectively . Where current tax or deferred tax arises from initial accounting for a business combination,

the tax effect is included in the accounting for business combination.

Exchange differences on transactions entered into hedge foreign currency risks.

Capital gains tax is included in the tax expense for the period to which it relates.

Capital gains tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported

in the consolidated statement of comprehensive income because of items of income or expenses that are

taxable or deductible in future years and items that are never taxable or deductible. The group and

company liability for current tax is calculated using tax rates that have been enacted or substantively

enacted by the end of the reporting period.

Deferred tax is recognized on temporary difference between the carrying amounts of asset and liabilities in

the consolidated financial statements and the corresponding tax bases used in the computation of taxable

profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax

assets are generally recognized for all deductible temporary differences to the extent that it is probable that

taxable profit will be available against which those deductible temporary differences can be utilized. Such

deferred tax asset and liabilities are not recognized if the temporary differences arise from goodwill or from

the initial recognition (other than in a business combination) of other assets and liabilities in transactions

that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable difference associated with investment in subsidiaries and

association and interest in joint ventures , except where the group is able to control the reversal of the

temporary differences and it is probably that the temporary difference will not reverse in the foreseeable

future. Deferred tax asset arising from deductible temporary difference associated with such investments

and interest are only recognized to the extent that it is probable that there will be sufficient taxable profit

against which to utilize the benefit of the temporary difference and they are expected to reverse in the

foreseeable future.

Taxation

Current tax

Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognized in income statement in the period in which they arise except for:

Exchange differences on foreign currency borrowings which are regarded as adjustments to interest

costs, where those interest costs qualify for capitalization to assets under construction.

Exchange differences on loans to or from a foreign operation for which settlement is neither planned nor

likely to occur and therefore forms part of the net investment in the foreign operation, which are

recognized initially in other comprehensive income and reclassified from equity to profit or loss on

disposal or partial disposal of the net investment.

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ABC TRANSPORT PLC



3.9.4

The net amount owing to or due from the tax authority is included in debtors or creditors.

Recoverable VAT outstanding for over three years is fully provided for.

Output VAT is excluded from the revenue shown in the statement of comprehensive income.

3.9.5

3.10. Financial instruments

Trade and other receivables

Borrowings

Trade and other payables

Effective interest method

Held to maturity (HTM) investments

Available-for-sale (AFS) financial assets

Held for trading (HFT) financial assets

Non-recoverable VAT paid in respect of an item of non-capital nature is written off to statement of

comprehensive income. Non-recoverable VAT paid in respect of an item of property,plant and equipment is

capitalized as part of the cost of the property, plant and equipment.

The withholding tax credit is used as set-off against income tax payable. Tax credit which is considered

irrecoverable is written-off as part of the tax charge for the year.

Financial assets and financial liabilities in respect of financial instruments are recognised on the Group's

statement of financial position when any member of the Group becomes a party to the contractual

provisions of the instrument. Financial liabilities and equity instruments are classified according to the

substance of the contractual arrangements entered into.

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate

allowances for estimated irrecoverable amounts. Estimated irrecoverable amounts are based on the ageing

of the receivable balances and historical experience. Individual trade receivables are written-off when

management deems them not to be collectible.

Loans and borrowings are initially measured at fair value, net of direct transaction costs. Subsequently,

loans and borrowings are measured at amortised cost, which is calculated by taking into account any

discount or premium on settlement.

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised

cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial asset or liability

and of allocating interest income or expense over the relevant period. The effective interest rate is the rate

that exactly discounts estimated future cash receipts or payments over the expected life of the financial

asset or liability.

HTM investments are non-derivative financial assets with fixed or determinable payments and fixed

maturities wherein the Group has the positive intention and ability to hold to maturity. HTM investments are

carried at cost or amortized cost in the balance sheets. Amortization is determined by using the effective

interest rate method.

AFS financial assets are non-derivatives that are either designated in this category or not classified in any

of the other categories. AFS financial assets are carried at fair value in the statement of financial position.

Changes in the fair value of such assets are accounted for in other comprehensive income.

The fair value of financial instruments that are actively traded in organized financial market is determined by

reference to quoted market bid prices at the close of business on the balance sheet date. For financial

instruments where there is no active market, except for investment in unquoted equity securities, fair value

is determined using valuation techniques. Such techniques include using recent arm’s-length market

transactions; reference to the current market value of another instrument, which is substantially the same;

discounted cash flow analysis; and option pricing models. In the absence of a reliable basis for determining

fair value, investments in unquoted equity securities are carried at cost, net of impairment.

Withholding tax

Value added tax

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ABC TRANSPORT PLC



Financial instruments at fair value through profit or loss

Impairment of financial assets

Assets carried at amortized cost

Assets carried at cost

Derecognition of financial assets and financial liabilities

- the right to receive cash flows from the assets have been expired; or

- the Company retains the rights to receive cash flows from the asset, but has assumed an obligation to

pay them in full without material delay to a third party under a “pass-through” arrangement; or the

Company has transferred its rights to receive cash flows from the asset and either (a) transferred

substantially the risks and rewards of the asset, or (b) has neither transferred nor retained substantially

all the risks and rewards of the asset, but has transferred control of the asset. Where the Company has

transferred its right to received cash flows from an asset and has neither transferred not retained

substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is

recognized to the extent of the Company’s continuing involvement in the asset.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost

(net of any principal payment and amortization) and its current fair value, less any impairment loss

previously recognized in profit or loss, is transferred from equity to profit or loss. Reversals in respect of

equity instruments classified as available-for-sale are not recognized in profit or loss. Reversals of

impairment losses on debt instruments are reversed through profit or loss if the increase in fair value of the

instrument can be objectively related to an event occurring after the impairment loss was recognized in

profit or loss.

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial

assets) is derecognized where:

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at

fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and

must be settled by delivery of such an unquoted equity instrument has been incurred, the amount of the

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

future cash flows discounted at the current market rate of return for similar financial assets.

Financial instruments are classified in this category if these result from trading activities or derivatives

transaction that are not accounted for as accounting hedges, or when the Company elects to designate a

financial instrument under this category.

The Group assesses at each balance sheet date whether a financial asset or group of financial assets is

impaired.

If there is objective evidence that an impairment loss on loans and receivables carried at amortized cost

has been incurred, the amount of the loss is measured as the difference bewteen the asset's carrying

amount and the present value of estimated future cash flows (excluding future credit losses that have not

been incurred) discounted at the financial asset's original effective interest rate (i.e the effective interest

rate computed at initial recognition). The carrying amount of the asset shall be reduced either directly or

through through the use of an allowance account. The amount of the loss shall be recognized in profit or

loss.The Group first assesses whether objective evidence of impairment exists individually for financial assets

that are individually significant. Assets that are not individually significant are assessed either individually or

collectively. Where a collective assessment is to be undertaken, the Group includes financial assets that

have been individually assessed for which no impairment has been recognized. Assets that are individually

assessed for impairment and for which an impairment loss is or continues to be recognized are not

included in a collective assessment for impairment.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognized, the previously recognized

impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the income

statement, to the extent that the carrying value of the asset does not exceed its amortized cost at reversal

date.

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3.11 Segmental reporting

The Group is primarily organized on a business basis and it includes the following:

Coach operation

Shuttle operation

Sprinter operation

Haulage service

Cargo service; and

Hospitality service

Trading (Truck assembly, sale of spares and speed governors)

3.12. Trade and other receivables

3.13

3.13.1

Pension fund scheme

The management of ABC Transport Plc has determined the operating segments of the Group based upon

the information provided to the Managing Director who is considered to be the chief operating decision

maker.

This is consistent with the way the group manages itself and the format of the Group’s internal financial

reporting. The second analysis is presented according to the geographic markets comprising Nigeria and

Ghana. The Group’s geographical segments are determined by the location of the Group’s assets and

operations.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or

expires. Where an existing financial liability is replaced by another from the same lender or substantially

difference terms, or terms of an existing liability are substantially modified, such an exchange or

modification is treated as a derecognition of the original liability and the recognition of a new liability, and

the difference in the respective carrying amounts is recognized in the income statement.

Obligations for contributions to the defined contribution pension plans are recognised as an employee

benefit expense in profit or loss in the periods during which services are rendered by employees.

Contributions to a defined contribution plan that is due more than twelve months after the end of the period

in which the employees render the service are discounted to their present value.

Payments to defined contribution plans are recognised as an expense as they fall due. Any contributions

outstanding at the year end are included as an accrual in the Statement of Financial Position.

Trade and other receivables are recognised and carried at the lower of their original value and recoverable

amount. Allowance is made where there is evidence that the balances will not be recovered in full.

Employee benefits

Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed

contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.

Obligations for contributions to defined contribution pension plans are recognised as an employee benefit

expense in profit or loss in the periods during which services are rendered by employees. Contributions to

a defined contribution plan that is due more than 12 months after the end of the period in which the

employees render the service are discounted to their present value. In relation to the defined contribution

plan, the group has in place the Pension fund scheme.

In accordance with the provisions of the Pension Reform Act, 2004 as amended the group has instituted a

Contributory Pension Scheme for its employees, where both the employees and the Group contribute 10%

and 8% of the employee gross emoluments.

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ABC TRANSPORT PLC



3.13.2

3.13.3

3.13.4

3.14 Leases

3.14.1

3.14.2

Defined benefit plan

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The

group’s net obligation in respect of defined benefit plan is calculated separately for each plan by estimating

the amount of future benefit that employees have earned in return for their services in the current and prior

periods; that benefit is discounted to determine its present value. Any recognized past service costs and

fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on AA credit-

rated bonds that have maturity dates approximating the terms of the group’s obligation and that are

denominated in the currency in which the benefit are expected to be paid.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant

lease. Any balloon payments and rent free periods are taken into account when determining the straight-

line charge.

The group recognizes all actuarial gains or losses arising from defined benefit plans immediately in other

comprehensive income and all expenses related to defined benefit plans in personnel expenses in income

statement.

The group recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the

curtailment or settlement occurs. The gain or loss on settlement or curtailment comprises any resulting

change in the fair value of the plan asset, any change in the present value of defined benefit obligation,

any related actuarial gains or losses and past services cost that had not previously been recognised.

Short term employee benefits

These are measured on an undiscounted basis and are expensed as the related service is provided. A

liability is recognized for the amount expected to be paid under short term cash bonus or profit sharing

plans if the group has a present legal or constructive obligation to pay this amount as a result of past

service provided by the employee, and the obligation can be estimated reliably.

Termination benefits

Termination benefit are recognized as an expense when the group is demonstrably committed without

realistic possible withdrawals to a formal detail plan to either terminate employment before the normal

retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary

redundancy. Termination benefits for voluntary redundancies is recognized as expenses if the group has

made an offer of voluntary redundancy and it is probable that the offer will be accepted, and the number of

acceptances can be estimated reliably. If the benefits are payable more than 12 months after the reporting

date, then they are discounted to their present value.

The calculation is performed annually by a qualified actuary using the projected credit unit method.

As Lessor

Operating leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks

and rewards of ownership to the lessee. All other leases are classified as operating leases.

The related liability to the lessor is included in the statement of financial position as a finance lease

obligation.

Lease payments are apportioned between interest expenses and capital redemption of the liability, Interest

is recognised immediately in income statement, unless attributable to qualifying assets, in which case they

are capitalised to the cost of those assets.

As Lessee

Finance leases

Assets held under finance leases are recognised as assets of the group at the fair value at the inception of

the lease or if lower, at the present value of the minimum lease payments.

Contingent rentals arising under finance leases are recognised in the period in which they are incurred.

23

ABC TRANSPORT PLC



3.15

3.16

3.17

3.18

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary

course of business. Accounts payable are classified as current liabilities if payment is due with one year or

less. If not, they are presented as non-current liabilities.

Trade and other payables are stated at their original invoiced value, as the interest that would be

recognised from discounting future cash payments over the short payment period is not considered to be

material.

Equity instruments

Trade and other payables

Operating leases

Operating lease payments are recognised as an expense on a straight-line basis over the lease term,

except if another systematic basis is more representative of the time pattern in which economic benefits

will flow to the group.

Borrowing costs

All other borrowing costs are recognized in the profit or loss in the period in which they are incurred.

Investment income earned on the temporary investment of specific borrowing costs eligible for

capitalization.

Borrowing cost are interested and other costs that the group incurs in connection with borrowingof funds,

these include interest expenses calculated using effective interest rate method, finance charges in respect

of finance leases and exchanged differences arising from foreign currency borrowings’ interest cost.

Where a range of debt instruments is used to borrow funds or where the financing activities are

coordinated centrally, a weighted average capitalization is applied.

Borrowing costs directly e to the acquisition, construction or production of qualifying asset, which are

assets that necessarily take a substantial period of time to get ready for their intended use or sale, added

to the cost of those assets, until such time as the assets are substantially ready for their intended use or

sale. The group defines qualifying asset as asset that takes more than a year to prepare for its intended

use. All other borrowing costs are expensed in the period in which they incurred.

Finance income comprises interest income on fund invested (including available-for-sale financial assets);

gain on the disposal of available-for-sale financial assets. Finance income is recognised as it accrued in

profit or loss, using the effective interest method.

Finance costs comprises interest expense on borrowing, unwinding of the discount on provision, interest

expense on factoring of trade receivables and impairement losses recognised on financial assets except

financial costs that are directly attributable to the acquisition, construction or production of a qualifying

assets which are captured as part of the related assets, are recognise in profit or loss using the effective

interest method.

Finance income and finance costs

Equity instruments issued by the group are recorded at the value of proceeds received, net of costs

directly attributable to the issue of the instruments. Shares are classified as equity when there is no

obligation to transfer cash or other assets. Incremental costs directly attributable to the issue of equity

instruments are shown in equity as a deduction from the proceeds, net of tax.

Where any company purchases the group’s equity share capital (treasury shares), the consideration paid,

including any directly attributable incremental costs (net of income taxes), is deducted from equity

attributable to the group’s equity holders. Where such shares are subsequently sold, re-issued or

otherwise disposed of any consideration received is included in equity attributable to the group’s equity

holders, net of any directly attributable incremental transaction costs and the related income tax effects.

24

ABC TRANSPORT PLC



3.19

3.20 Cash and cash equivalents

3.21

3.22 Share premium

This relates to amount received by ABC Transport Plc over and above the face value of its shares.

3.23

3.24

3.25

3.26. Reserves

The translation reserve:

3.27. Government grants

Statement of cash flows

The statement of cash flows is prepared using the indirect method. Changes in statement of financial

position items that have not resulted in cashlows such as translation differences, fair value changes,

equity-settled share-based payments and other non-cash items, have been eliminated for the purpose of

preparing the statement.

Share capital

The Group has one class of shares, ordinary shares. Ordinary shares are classified as equity. Where new

shares are issued, they are recorded in share capital at their par values. The excess of the issue over the

per value is recorded in the share premium reserve. Incremental costs directly attributable to the issue of

ordinary shares are recognised as a deduction from equity, net of any tax effects.

Cash and cash equivalents comprises cash on hand; cash balances with bank and call deposits with

original maturities of three months or less. Bank overdrafts that are repayable on demand and form an

integral part of the Group's cash management are included as a component of cash and cash equivalents

for the purpose of statement of cash flows.

Government grants are recognized where there is reasonable assurance that the group will comply with

the conditions attached to it, and that the grant will be received. Where government grant is by the

extension of interest free loans or below-market rate of interest, the benefit of the interest free/below

market interest rate is measured as the difference between the initial carrying value of the loan determined

in accordance with IAS 39 and the proceeds received. Government grants are recognized in the profit or

loss on a systematic basis over the periods in which the group recognizes as expenses the related costs

for which the grants are intended to compensate.

The translation reserve comprises all foreign currency differences arising from the translation of the net

assets of overseas operations.

Dividend distribution

Dividend distribution to the group shareholders is recognized as a deduction in the revenue reserve in the

year in which the dividend is approved by the company's shareholders.

Unclaimed dividend

Unclaimed dividend are amounts payable to shareholders in respect of dividend previously declared by

the Group which have remained unclaimed by the shareholder in compliance with section 385 of the

Companies and Allied Matters Act, CAP C20, laws of the federation of Nigeria 2004. Unclaimed dividend

are transfered to revenue reserves after twelve years.

Earnings per share

The Group presents basic earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by

dividing the profit or loss attributable to ordinary shareholders of the Group by the number of shares

outstanding during the year.

25

ABC TRANSPORT PLC



4.

a)

b)

c) Impairment of property, plant and equipment and intangible assets

d) Property, plant and equipment

Management is required to make judgement concerning the cause, timing and amount of impairment. In the

identification of impairment indicators, management considers the impact of changes in current competitive

conditions, cost of capital, availability of funding, technological obsolescence, discontinuance of services and

other circumstances that could indicate impairment exist.

Critical accounting estimates and judgement

The group makes estimate and assumption about the future that affects the reported amounts of assets and

liabilities. Estimates and judgment are continually evaluated and based on historical experience and other

factors, including expectation of future events that are believed to be reasonable under the circumstances. In

the future, actual experience may differ from these estimates and assumption.

Changes in assumptions about these factors could affect the reported fair value of financial instruments.

The effect of a change in an accounting estimate is recognized prospectively by including it in the

comprehensive income in the period of the change, if the change affects that period only, or in the period of

change and future period, if the change affects both the estimates and assumptions that have a significant

risks of causing material adjustment to the carrying amount of asset and liabilities in the next consolidated

financial statements are discussed below:

The present value of defined benefit obligation depends on a number of factors that are determined on an

actuarial basis using a number of assumptions. The assumptions used in determining the defined benefit

obligation include the discount rate, interest rate, mortality rate, etc the group determines the discount rate at

the end of each year. This is the interest rate that should be used to determine the present value of estimate

future cash outflows expected to be required to settle the pension obligations. In determining the appropriate

discount rate, the group considers the interest rates of high-quality corporate bond that are denominated in

the currency in which the benefits will be paid, and have terms to maturity approximating the terms of the

defined benefit obligation.

The group determines that available-for-sale equity financial assets are impaired when there has been a

significant or prolonged decline in the fair value below its cost. This determination of what is significant or

prolonged requires judgment. In making this judgment, the group evaluates among other factors, the normal

volatility in share price, the financial health of the investee, industry and sector performance, changes in

technology, and operational and financing cash flow. Impairment may be appropriate when there is evidence

of deterioration in the financial health of the investee, industry and sector performance, changes in

technology, and financing and operational cash flows.

Defined benefit obligation

Impairment of available-for-sale equity financial assets

The fair values of financial instruments where no active market exists or where quoted prices are not

otherwise available are determined by using valuation techniques. In these cases, the fair values are

estimated from observable data in respect of similar financial instruments or using models. Where market

observable inputs are not available, they are estimated based on appropriate assumptions. Where valuation

To the extent practical, models use only observable data. However, areas such as credit risk (both own credit

risk and counterparty risk), volatilities and correlations require management to make estimates.

Property, plant and equipment represent the most significant proportion of the asset base of the group,

accounting for about 80% of the Group’s total assets. Therefore the estimates and assumptions made to

determine their carrying value and related depreciation are critical to the Group’s financial position and

performance.

The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected

useful life and the expected residual value at the end of its life. Increasing an asset’s expected life or it’s

residual value would result in the reduced depreciation charge in the consolidated income statement.

26

ABC TRANSPORT PLC



e) Provisions and contingent liabilities

f) Non-current assets held for sale

g) Allowances for trade receivables

The amount recognised as a provision is the best estimate of the consideration required to settle the present

obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the

obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its

carrying amount is the present value of those cash flows (when the effect of the time value of money is

material).

Judgment is equally exercised in assessing the likelihood that a pending litigation will succeed, or a liability

will arise and to quantify the possible range of the financial settlement. Because of the inherent uncertainty in

the foregoing evaluation processes, actual outcomes may be different from the originally estimated

provisions.

Property, plant and equipment is stated at fair value less accumulated depreciation and any impairment

losses. Depreciation is calculated to write off the fair value of Property, plant and equipmentother than land

and work-in-progress on a straight-line basis over the estimated useful life of the respective classes of

assets.

Buildings on owned land are depreciated over the period management expects to derive benefit from their

use and this period is reviewed annually for appropriateness. Judgment is however applied on the useful lives

of buildings constructed on lands held on short-term leases which are only depreciated over a period

extending beyond the expiry of the lease if there is reasonable expectation that the lease will be renewed.

Depreciation charged in the income statement together with the carrying amounts will differ significantly

should an expected renewal of short-term fail to materialize. This is in view of the under-provision resulting

from the shorter useful lives and the possible impacts of un-capitalized decommissioning costs.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a

past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be

made of the amount of the obligation.

Withholding tax credit notes receivable aged 18 months and above are considered doubtful for collection and

are subjected to a 100% provision. No provisioning is made for credit notes aged below 18 months as they

are considered collectible going by the present timeframe between the remittance of deductions and

production of the credit notes by the Federal Inland Revenue Service.

Receivables resulting from barter arrangements are not subject to the aged-analysis above as judgment is

exercised by management in determining the position of such receivables.

On retirement of items of property,plant and equipment (usually operational motor vehicles) from operations,

they are fair-valued and reclassified to a non-current-assets-held-for-sale account at the lower of their NBVs

and fair-value less cost to sell with any differences arising thereon taken to profit or loss. Since there are no

active markets dealing in second-hand vehicles, the Group exercises judgment in placing realistic values to

the assets classified as held-for-sale by reference to the circumstances of previous disposals taking

cognizance of physical conditions, vehicle brands, age, economic realities etc. These valuations are usually

carried out by an assets disposal committee comprising the head of materials management, head of

administration, head of internal audit, head of finance and the service engineer. The gross value of these

assets are usually material and future results could be affected where actual proceeds differ materially from

the valuations.

The group exercises judgment in measuring and recognizing allowance for trade receivables.

Impairment allowance is made when there is objective evidence that the company/group will not be able to

collect the debts. The allowance raised is the amount needed to reduce the carrying value to the present

value of expected future cash receipts.

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ABC TRANSPORT PLC



h) Defined benefit obligation

i) Non-current assets held for sale

j)

i)

ii)

6. Revenue and other income

6.1 Revenue

2017 2016 2017 2016

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

Categories of revenue

Transport earnings 2,539,198 2,541,075 2,507,633 2,578,788

Haulage operations 1,543,047 1,634,991 1,543,047 1,634,991

Loads and waybill 1,411,922 1,156,958 1,411,934 1,156,958

Hospitality 260,532 260,938 260,532 260,938

Sale of vehicle spares and speed governors 1,431,910 1,115,776 - -

Service charge (cash transfer services) 190 309 190 309

7,186,797 6,710,047 5,723,335 5,631,984

6.1.1

Deferred taxes are recognised for all unused tax losses to the extent that it is probable that taxable profit

will be available against which the losses can be utilised. Significant management judgement is required

to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and

the level of future taxable profits together with future tax planning strategies.

The company is into a barter arrangement with a government parastatal (Federal Radio Corporation of

Nigeria - FRCN) in which it extends coach passenger services in exchange for advert placement on the

parastatal's broadcast media. Revenue on this arrangement is recognized at the fair value of the services

rendered which is the aggregate value of tickets issued. Included in transport earnings above is the sum

of N1.008 billion (2016: N1.634 billion) earned from the barter arrangement for the period. Invoices on

advert placements are included in advertisement expenses. All barter income is earned by the parent

company.

The following is an analysis of the Company's and Group's revenue for the year from continuing

operations (excluding investment income)

Group Company

Taxes

The Group operates an unfunded defined benefit scheme which entitles staff who put in a minimum

qualifying working period of five years to gratuity upon leaving the employment of the company. The

Company also gives a grant of N100,000 to heavy-duty vehicle drivers that put up to ten years in service.

IAS 19 requires the application of the Projected Unit Credit Method for actuarial valuations. Actuarial

measurements involve the use of several demographic projections regarding mortality, rates of employee

turnover etc and financial projections in the area of future salaries and benefit levels, discount rate,

inflation etc.The uncertainty underlying these assumptions about the future is likely to make actual payments differ

from liabilities carried in the statement of financial position.

On retirement of items of PPE (usually operational motor vehicles) from operations, they are fair-valued

and reclassified to a non-current-assets-held-for-sale account at the lower of their NBVs and fair-value

less cost to sell with any differences arising thereon taken to profit or loss. Since there are no active

markets dealing in second-hand vehicles, the Group exercises judgment in placing realistic values to the

assets classified as held-for-sale by reference to the circumstances of previous disposals taking

cognizance of physical conditions, vehicle brands, age, economic realities etc. These valuations are

usually carried out by an assets disposal committee comprising the head of materials management, head

of administration, head of internal audit, head of finance and the service engineer. The gross value of

these assets are usually material and future results could be affected where actual proceeds differ

materially from the valuations.

Uncertainties exist with respect to the amount and timing of future taxable income. Given the complexities

of existing contractual agreement, differences arising between the actual results and the assumptions

made could necessitate future adjustment to tax income and expenses already recorded. The group

establishes provisions based on reasonable estimates.

28

ABC TRANSPORT PLC



6.1.2 Information about major Customers

Segment - Haulage operations

Customer - United Cement Company of Nigeria Limited

Revenue - N1,543,047,051

2017 2016 2017 2016

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

6.2 Other income

6.2.1 Other operating income

Insurance indemnity 19,879 20,462 19,879 20,462

Operating rental income 12,049 19,693 12,049 19,408

Finance lease income - 4,783 - 4,783

Income from adverts 640 1,540 640 1,540

Sale of scrap/other assets 214,839 1,926 5,325 1,926

Sale of promotional items 53 460 53 460

Exchange gain 25,615 35,998 25,602 35,998

Demurrage on waybills 418 401 418 401

Franchise income 8,718 - 8,718 -

282,211 85,263 72,685 84,978

6.2.2 Interest income

Bank interest 754 1,778 749 108

6.2.2.12,285 1,783 2,285 1,783

6.2.3 Others gains and losses

Profit on disposal of property, plant and equipment 23,542 38,921 23,542 38,921

Others (reversal of provisions/accruals etc) 76,781 76,908 67,500 64,134

100,323 115,829 91,042 103,055

6.2.4 Investment Income

Dividend received from TSS Limited - - 163,350 -

7. Segment information

7.1. Description of segments

Coach passenger operations - long distance service using luxury buses.Sprinter passenger operations - long distance service using midi buses.Shuttle passenger service - relatively shorter distance service using mini buses.Haulage services - dedicated long distance haulage servicing manufacturers.Cargo services - consolidated cargo services including mails and light.Hospitality CTI - budget accommodation targeted at sleep-over passengers.Corporate and others - head office revenue and others.Trading - Vehicle assembly, sale of spares and speed governors by Transit

Supports Services Ltd.

United Cements contributes 26% of the total revenue of ABC Transport Plc during the year, as detailed

below:

Net fair value gains/(losses) on financial assets

at fair value through profit or loss

Management has determined the operating segments based on the reports reviewed by the Budget

Committee (chaired by the Managing Director) that are used to make strategic decisions. The Budget

committee currently consists of the managing director, the chief financial officer, the head of planning, the

chief internal auditor, head of human resources and the operating divisional heads. The committee

considers the business from an operating basis based on services, subject to differing risks and return

patterns and have identified the reportable segments as follows:

Group Company

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ABC TRANSPORT PLC



7.2 Business segment - 2017

Coach Sprinter Shuttle Cargo Haulage CTI

Trading

(Truck/

Spare parts

sales Others Total

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

Income:

Gross segment revenue 1,328,798 697,432 418,263 1,412,281 1,543,047 260,532 1,431,909 190 7,092,452

Intersegment revenue 68,732 8,592 17,021 - - - - - 94,345

Total revenue 1,397,530 706,024 435,285 1,412,281 1,543,047 260,532 1,431,909 190 7,186,797

Other income - 8,718 - 2,313 - - 218,800 155,742 385,573

1,397,530 714,742 435,285 1,414,594 1,543,047 260,532 1,650,709 155,931 7,572,369

Less: Direct costs

Material 377,666 273,576 150,912 352,231 418,986 49,720 618,162 - 2,241,252

Salaries and wages 115,786 24,811 33,082 124,725 88,557 20,718 32,428 4,241 444,348

Depreciation - direct 215,164 74,613 43,654 119,272 276,167 19,818 12,552 70,323 831,563

Depreciation- apportioned 13,001 7,353 8,099 15,985 18,649 - - - 63,086

Finance lease charges 7,329 10,260 2,932 - 109,443 6,840 63,396 - 200,200

Impairment losses - - - - - - - - -

Other direct overheads 393,327 242,193 126,636 455,795 505,832 48,440 15,498 644 1,788,365

1,122,273 632,806 365,314 1,068,008 1,417,634 145,536 742,036 75,208 5,568,814

Contribution to profit 275,257 81,935 69,971 346,586 125,413 114,996 908,673 80,723 2,003,555

Less: Apportioned costs

Workshop charge 39,639 8,494 11,325 40,235 7,153 - - 93,364 200,210

General administration 262,723 62,298 83,064 244,991 285,823 12,000 85,601 - 1,036,501

302,362 70,792 94,389 285,227 292,976 12,000 85,601 93,364 1,236,711

Total expenses 1,424,635 703,598 459,703 1,353,234 1,710,610 157,536 827,637 168,572 6,805,525

Profit/(loss) before tax (27,105) 11,144 (24,418) 61,360 (167,563) 102,996 823,072 (12,641) 766,844

7.2 Business segment - 2016

Coach Sprinter Shuttle Cargo Haulage CTI

Trading

(Truck/

Spare parts

sales Others Total

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

Income:

Gross segment revenue 1,636,199 492,084 450,504 1,156,958 1,634,991 260,938 1,078,063 310 6,710,047

Intersegment revenue 56,878 5,343 20,770 - - - - - 82,991

Total revenue 1,693,077 497,427 471,274 1,156,958 1,634,991 260,938 1,078,063 310 6,793,038

Other income - - 13,346 - - 14,444 176,863 204,653

1,693,077 497,427 471,274 1,170,304 1,634,991 260,938 1,092,507 177,173 6,997,691

Less: Direct costs

Material 407,698 188,745 158,482 261,671 462,398 41,063 741,126 - 2,261,183

Salaries and wages 120,469 17,210 34,420 103,581 107,775 18,251 25,961 - 427,667

Depreciation - direct 361,759 53,133 59,577 100,727 447,296 25,662 8,180 10,689 1,067,023

Depreciation- apportioned 11,016 3,536 6,434 10,684 16,260 - - 47,930

Finance lease charges 13,947 1,992 3,985 - 179,296 13,782 276,512 - 489,514

Impairment losses - 5,611 - - 2,573 - - - 8,184

Other direct overheads 574,600 127,861 126,522 360,813 563,712 48,735 47,385 - 1,849,628

1,489,489 398,088 389,420 837,476 1,779,310 147,493 1,099,164 10,689 6,151,129

Contribution to profit 203,588 99,339 81,854 332,828 (144,319) 113,445 (6,657) 166,484 846,562

Less: Apportioned costs

Workshop charge 51,267 7,324 14,648 54,618 9,017 - - - 136,874

General administration 295,034 42,148 84,295 214,059 325,772 12,000 226,957 - 1,200,265

346,301 49,472 98,943 268,677 334,789 12,000 226,957 - 1,337,139

Total expenses 1,835,790 447,560 488,363 1,106,153 2,114,099 159,493 1,326,121 10,689 7,488,268

(Loss)/profit before tax (142,713) 49,867 (17,089) 64,151 (479,108) 101,445 (233,614) 166,484 (490,577)

Quantitative threshold:

While Spinter and Shuttle segments do not meet the quantitative thresholds of IFRS 8, they have been reported separately as management believes that

information about the segment will enable users evaluate the passengers business.

While Spinter and Shuttle segments do not meet the quantitative thresholds of IFRS 8, they have been reported separately as management believes that

information about the segment will enable users evaluate the passengers business.

30

ABC TRANSPORT PLC



Nigeria Ghana Total Nigeria Ghana Total

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

7.3 Geographical segment

Revenue and other income 6,781,169 791,202 6,914,700 868,395 7,783,095

Earning before depreciation, -

interest and tax 1,770,842 161,933 899,674 239,895 1,139,569

Interest income 754 - 1,778 - 1,778

Finance cost 195,690 4,510 484,518 4,996 489,514

Income tax expense or income (227,090) (26,496) 97,033 12,186 109,219

Segment assets 2,831,530 224,260 4,007,042 305,911 4,312,953

Capital expenditure 922,212 - 408,857 - 408,857

7.4 Segment assets and liabilities Truck/ Corporate

Coach Sprinter Shuttle Cargo Haulage

Spare parts

sales and others Total

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

Segment assets

2017 494,222 847,571 122,833 389,804 922,304 81,571 197,484 3,978,094

2016 672,486 216,825 167,074 445,220 1,280,842 75,155 218,067 3,075,669

Segment liabilities

2017 - - - - - - 2,429,287

2016 - - - - - - 2,941,149

Capital expenditure

2017 77616 710,432 11,903 65,936 16,148 18968 21,209 922,212

2016 188,288 83,970 10,569 36,329 15,135 36107 38,460 408,858

2017 2016

N'000 N'000

7.5 Segment reconciliation

Revenue

Total revenue from reportable segments 7,186,797 6,710,047

Other revenues 385,573 204,653

Group revenue 7,572,370 6,914,700

Profit/(Loss)

Total Profit/(loss) from reportable segments 766,844 (490,579)

Income tax expense (253,586) (109,219)

Group (loss)/profit 513,258 (599,798)

Assets

Total property, plant and equipment 2,955,045 2,977,889

Other non-current assets 100,745 97,780

Current assets 1,414,842 1,249,990

Assets held for sale - -

Group assets 4,470,633 4,325,659

2017

Segment asset is made up of items of property, plant and equipment and held for sale assets. Other assets like debtors,

prepayment, etc are not reported to the Chief Operating Decision Maker on a segment basis, hence they are not included in

this report. Liabilities are also not reviewed by the Chief Operating Decision Maker on a segmental basis, hence it has been

provided on the Group basis.

Group

In compliance with IFRS 8, Sales of Spare Parts and Vehicle assembly are aggregated and reported as operating segment,

considering that they have similar economic characteristics and they are regularly reviewed by the entity's chief operating

decision maker.

2016

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ABC TRANSPORT PLC



2017 2016 2017 2016

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

8. Operating profitOperating profit has been arrived after

charging/(crediting):

Depreciation of property, plant and equipment 906,975 1,133,550 905,440 1,126,534

Amortization of intangible assets 8,908 7,081 8,908 7,081

Impairment losses - 8,184 - 8,184

Staff costs 933,079 919,440 881,470 872,278

Profit on disposal of property, plant and equipment (23,542) (38,921) (23,542) (38,921)

Audit fees 11,723 11,722 9,500 9,000

Expenses by nature

Materials consumed (spares, tyres, oil and

lubricant, etc) 3,178,499 3,106,775 2,530,161 2,313,241

Employees' expenses (Note 38) 933,079 919,440 881,470 872,278

Depreciation and amortization expenses 931,911 1,141,868 919,246 1,133,621

Rent expenses 71,762 61,618 55,545 46,528

Transport expenses 40,419 31,685 23,153 28,518

Others 1,449,644 1,646,195 1,401,748 1,464,648

6,605,315 6,907,581 5,811,324 5,858,833

9. Impairment losses

Intangible asset (Note 14) - - - -

Property plant and equipment (Note 15b) - 8,184 - 8,184

Total - 8,184 - 8,184

10. Finance costsFinancial liabilities held at amortized cost:

Interest on borrowings 140,805 449,637 77,409 173,125

Interest on finance lease obligations - 3,615 - 3,615

Interest on overdaft 59,406 36,262 59,406 36,262

200,211 489,514 136,815 213,002

Fair value through income statement (held for

trading) - - - -

Total finance costs 200,211 489,514 136,815 213,002

All finance charges for the group were as a result of interest on overdraft, borrowings and finance leases

taken by the group.

CompanyGroup

Impairment losses relating to property, plant and

equipment for the company and group in 2017 is

Nil. (2016 : N8.184 million)

The net impairment losses were based on fair

value less cost to sell for property, plant and

equipment and net recoverable amount for

intangible assets. All impairment for the group

belonged to the parent company.

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ABC TRANSPORT PLC



2017 2016 2017 2016

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

11. Taxation

11.a Income tax expense

Income tax 247,858 101,419 83,796 93,727

Education tax 15,962 16,012 15,962 16,012

(Over)/under provision in previous year (10,234) (8,212) (10,234) (8,212)

Total current tax expense 253,586 109,219 89,524 101,527

11.b Deferred tax on origination and reversal of temporary

differences:

Deferred tax (Note 11.3) - - - -

Total deferred tax charge/(income) - - - -

Total income tax expense 253,586 109,219 89,524 101,527

11.1 Factors affecting tax expenses for the year

Profit/(Loss) before tax as shown in the consolidated

income statement 766,844 (490,579) 105,307 (258,111)

Expected income tax expense on profit at statutory tax

rate (30%) 230,053 (147,174) 31,592 (77,433)

Effect of portion of income taxed on a different basis -

education tax 27,259 16,012 15,962 16,012

Effect of permanent differences on investment allowance (523) (711) (523) (711)

Effect of expenses that are not deductible in determining

taxable taxable profitexempt from taxation 34,964 28,426 34,664 28,426

Effect of income and expenses that are not exempt from

taxation (54,907) 40,344 (52,123)

+

+ (37,088)

Accelerated capital allowance on propert,plant and

equipment 99,218 178,545 115,206

+ 178,545

Effect of tax on disposal of property, plant and equipment

3,985 1,988 3,985 1,988

Effect of additional tax on income derived from Ghana 2,940 - - -

Effect of Loss relief - Transport Support Services Limited (79,169) - - -

Effect of minimum taxation on loss making subsidiary -

Transit Supports Services Limited - 1,988 - 1,988

Adjustment recognized in current year in relation to

current tax of prior years (10,234) (8,212) (10,234) (8,212)

253,586 111,206 138,529 103,515

Effective tax rate 33% -23% 132% -40%

No income tax was recognized directly in equity

No income tax was recognized in other comprehensive income

Group Company

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ABC TRANSPORT PLC



2017 2016 2017 2016

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

11.2 Current tax liabilities

Income tax payable (Note 11.4) 262,329 158,996 101,204 157,359

11.3 Deferred tax balances

Deferred tax assets 60,543 60,543 59,864 59,864

Recognised Recognised

Opening in profit Closing Opening in profit Closing

balance or loss balance balance or loss balance

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

11.3a 2017

Deferred tax assets/

liabilities in relation to:

Property, plant and equipment 2,821 2,821 2,142 - 2,142

Retirement benefit obligations 16,101 - 16,101 16,101 - 16,101

Provision for doubtful debts 26,832 - 26,832 26,832 - 26,832

Impairment 14,789 - 14,789 14,789 - 14,789

60,543 - 60,543 59,864 - 59,864

11.3b 2016

Deferred tax assets/

liabilities in relation to:

Property, plant and equipment 2,821 - 2,821 2,142 - 2,142

Retirement benefit obligations 16,101 - 16,101 16,101 - 16,101

Provision for doubtful debts 26,832 - 26,832 26,832 - 26,832

Impairment 14,789 - 14,789 14,789 - 14,789

60,543 - 60,543 59,864 - 59,864

The following is the analysis of the deferred tax assets

presented in the consolidated and separate statements of

financial position:

There are no unrecognised deductible temporary differences, unused tax losses and unused tax credits for

which no deferred tax assets have been recognised.

Group Company

CompanyGroup

The group has adopted the International Acounting Standard, IAS 12 on deferred taxation, which is computed

using the liability method. The deferred tax computation has resulted into a deferred tax asset of N624,604,000

(2016 : N501,968,000) which has not been recognised in these financial statements on the grounds of

prudence.

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ABC TRANSPORT PLC



2017 2016 2017 2016

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

11.4 Income tax

Analysis of movements in the current tax

balance during the year:

At 1 January 158,996 212,712 157,359 209,182

Income tax 236,561 101,419 83,796 93,727

Education tax 27,259 16,012 15,962 16,012

Under/(over) provision in the prior year (10,234) (8,212) (10,234) (8,212)

Tax paid during the year (24,487) (84,552) (19,913) (76,860)Withholding tax credit notes utilised for tax

payments (125,766) (76,490) (125,766) (76,490)

Exchange movements - (1,893) - -

At 31 December 262,329 158,996 101,204 157,359

Factors affecting the tax charge in future years

2017 2016 2017 2016

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

12. Basic earnings/(loss) per share

Profit/(loss) after taxation 513,258 (599,798) 15,783 (359,638)

Number of sharesWeighted average number of shares for basic

earning per share 1,657,700 1,657,700 1,657,700 1,657,700

Effect of dilutive potential share: restricted

shares and share options - - - -

Weighted average number of shares for diluted

earnings per share 1,657,700 1,657,700 1,657,700 1,657,700

Earnings/(Loss) per share (kobo)

- Basic 31 (36) 1 (22)

- Diluted 31 (36) 1 (22)

Earnings/(Loss) per shares have been computed based on Profit/(Loss) after tax and 1,657,700,000

ordinary shares of N0.50 each after the bonus issue of one new share for existing shareholders.

Factors that may affect the Group's future tax charge include the impact of corporate restructurings, the

resolution of open issues, future planning opportunities, corporate acquisitions and disposals, the use of

brought forward tax losses and changes in tax legislation and tax rates.

Group Company

Group Company

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13. Goodwill

Computer Franchise

software fee Others Total

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

14. Intangible assetsCost:

At 1 January 2016 37,839 4,725 300 42,864

Additions 3,237 - - 3,237

At 31 December 2016 41,076 4,725 300 46,101

At 1 January 2017 41,076 4,725 300 46,101

Additions 969 1,405 6,642 9,016

At 31 December 2017 42,045 6,130 6,942 55,117

Accumulated impairment losses and

amortization:

At 1 January 2016 15,538 4,725 300 20,563

Amortization charge for the year 7,081 - - 7,081

At 31 December 2016 22,619 4,725 300 27,644

At 1 January 2017 22,619 4,725 300 27,644

Amortization charge for the year 8,444 302 162 8,908

At 31 December 2017 31,063 5,027 462 36,552

Carrying amount

At 31 December 2016 18,457 - - 18,457

At 31 December 2017 10,982 1,103 6,480 18,565

a.

b.

c. There was no impairment of any intangible asset during the year.

d. All the intangible assets owned by the group comes from the parent company

The amortisation of intangible asset of N8,908,000 (31 December, 2016 : N7,081,000) is included in direct

cost of the statement of profit or loss and other comprehensive income.

There was no goodwill arising from business combinations on acquisition of the subsidiaries. This was due to

the fact that the subsidiaries were acquired on start-up i.e there were no retained earnings pre-acquisition.

The purchase consideration paid by ABC Plc in ABC Ghana Limited and Transit Support Services Limited

formed the net assets of the subsidiaries therefore they were equal and no goodwill earned.

Group and Company

This relates to purchased Computer softwares, Franchise fee, while others include Vehicle tracking software,

Ticketing system software, ERP software, On-board montage, website and Anti-virus software.

36

ABC TRANSPORT PLC



Computer software

Impairment of intangibles

Asset class Estimated useful life

Franchise 5 - 10 years

Vehicle tracking software 3 - 5 years

Ticketing systems 5 years

ERP software 5 - 7 years

On-board montage 5 - 7 years

Website 5 - 7 years

Anti-virus software 3 - 5 years

The useful life of computer software is determined by management at the time the software is acquired and

brought into use and is regularly reviewed for appropriateness. This usually represents management's view of

expected period over which the Group will receive benefits from the software but not exceeding the licence

term. Computer software are amortised on a straight-line basis over a period of 3 - 5 years which usually do

not exceed the term of the software licences. This is applicable to both software licences purchased off-the-

shelf and software uniquely developed for the Group by software vendors.

Impairment will arise where there are indications that the Group will not obtain future economic benefits

commensurate with the carrying amounts of the software licence. This could occur in instances of software

sub-optimality or due to technological and business process advancements or outright cut-over to another

software. Significant use of judgment will be required where there are indications of impairment to software

licences to either write-down/write off the carrying amounts or/and reduce the useful lives. Impairment in the

current year amounts to Nil (2016 : Nil).

Amortization is charged on intangible assets at cost less residual value over the estimated useful lives using

the straight line method as follows:

37

ABC TRANSPORT PLC



15. Property, plant and equipment

Group Equipment

Motor furniture Computer Work-in

Land Buildings vehicle and fittings equipment progress Total

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

Cost:

At 1 January 2016 146,566 1,254,761 7,500,327 300,525 53,118 36,819 9,292,116 Additions 17,140 22,415 286,225 53,043 5,622 17,637 402,082 Adjustment in opening balance - (19,913) 20,417 (1,047) 12,561 - 12,018 Transfers to finance lease receivables - - - - - - - Transferred to inventories - - - - - - - Disposals - - (338,354) - - - (338,354) Written off burnt vehicle - - - - - - - Transfers from work-in-progress - 52,527 - 1,129 - (53,656) - Unrealised loss - - - - - - -

At 31 December 2016 163,706 1,309,790 7,468,615 353,650 71,301 800 9,367,862

At 1 January 2017 163,706 1,309,790 7,468,615 353,650 71,301 800 9,367,862 Additions 4,981 9,058 845,900 18,421 3,243 8,785.57 890,389 Adjustment in opening balance - - (4,162) - - - (4,162) Disposals - - (217,993) - - - (217,993) Transfers from work-in-progress - - - - - - -

At 31 December 2017 168,687 1,318,848 8,092,360 372,071 74,544 9,586 10,036,096

Accumulated depreciation and

impairment:

At 1 January 2016 - 552,299 4,751,658 196,932 42,296 - 5,543,185

Charge for the year - 48,585 1,045,236 35,198 4,531 - 1,133,550

Adjustment in opening balance - 333 1,889 (87) 13,874 - 16,009 Elimination on disposals - - (310,955) - - - (310,955) Transfers to finance lease receivables - - - - - - - Transferred to inventories - - - - - - - Accumulated depreciation on burnt vehicles - - - - - - - Impairment losses recognised - - 8,184 - - - 8,184 Unrealised loss - - - - - - -

At 31 December 2016 - 601,217 5,496,012 232,043 60,701 - 6,389,973

At 1 January 2017 - 601,217 5,496,012 232,043 60,701 - 6,389,973

Charge for the year - 49,928 827,356 25,116 4,575 - 906,975

Adjustment in opening balance - - 736 - - - 736

Elimination on disposals - - (216,633) - - - (216,633)

Impairment losses recognised - - - - - - -

At 31 December 2017 - 651,145 6,107,471 257,159 65,276 - 7,081,051

Carrying amount

31 December 2016 163,706 708,573 1,972,603 121,607 10,600 800 2,977,889

31 December 2017 168,687 667,703 1,984,889 114,913 9,268 9,586 2,955,045

Cost NBV

N'000 N'000

Motor vehicles 1,087,348 884,994

Buildings 653,958 272,816

Land 26,772 26,772

1,768,078 1,184,582

A summary of property, plant and equipment pledged as collateral for borrowings as at 31 December 2017 indicated in Note 15 is presented

below:

Depreciation charged is included in the administrative expenses and Direct Cost in the statement of profit or loss and other comprehensive

income.

38

ABC TRANSPORT PLC



15. Property, plant and equipment

The Company Equipment

Motor furniture Computer Work-in-

Land Buildings vehicle and fittings equipment progress Total

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

Cost:

At 1 January 2016 146,566 1,254,761 7,495,603 281,321 53,118 27,196 9,258,565

Additions 17,140 2,502 286,225 16,936 5,622 7,347 335,772

Adjustment in opening balance - - - (1,047) - - (1,047)

Disposals - - (338,354) - - - (338,354)

Transfers from work-in-progress - 32,614 - 1,129 - (33,743) -

At 31 December 2016 163,706 1,289,877 7,443,474 298,339 58,740 800 9,254,936

At 1 January 2017 163,706 1,289,877 7,443,474 298,339 58,740 800 9,254,936 Additions 4,981 5,025 846,268 14,243 3,243 8,786 882,546

Adjustment in opening balance - - - - - - -

Disposals - - (217,993) - - - (217,993)

Transfer to Impairment. - - (4,162) - - - (4,162)

Written off in the year - - - (10,942) - - (10,942)

At 31 December 2017 168,687 1,294,902 8,067,588 301,640 61,983 9,586 9,904,386

Accumulated depreciation and

impairment:

AT 1 January 2016 - 552,299 4,735,318 198,733 42,296 - 5,528,646

Charge for the year - 47,921 1,043,482 30,600 4,531 - 1,126,534

Adjustment in opening balance - - - (87) - - (87)


Impairment losses recognised - - 8,184 - - - 8,184

At 31 December 2016 - 600,220 5,476,029 229,246 46,827 - 6,352,322

At 1 January 2017 - 600,220 5,476,029 229,246 46,827 - 6,352,322

Charge for the year 48,730 824,433 27,702 4,575 - 905,440

Adjustment in opening balance - - 736 - - - 736


Written off in the year - - - (10,942) - - (10,942)

At 31 December 2017 - 648,950 6,084,565 246,006 51,402 - 7,030,923

Net book value:

31 December 2016 163,706 689,657 1,967,445 69,093 11,913 800 2,902,614

31 December 2017 168,687 645,952 1,983,023 55,634 10,581 9,586 2,873,463

Cost NBV

N'000 N'000

Motor vehicles 1,087,348 884,994

Buildings 653,958 272,816

Land 26,772 26,772

1,768,078 1,184,582

All property, plant and equipment pledged as collateral for borrowings as at 31 December 2017 indicated in Note 15 in the previous

page all belonged to the parent company.

Depreciation charged is included in the administrative expenses and Direct Cost in the statement of profit or loss and other

comprehensive income.

39

ABC TRANSPORT PLC



2017 2016 2017 2016

In thousand N'000 N'000 N'000 N'000

16. Investment in subsidiaries

ABC Ghana Limited (Note i) 600,000 99% - - 6,470 6,470

Transit Supports Services Limited (Note ii) 100 50% - - 35,000 35,000

- - 41,470 41,470

i)

ii)

16.1 Subsidiary with significant non-controlling interests

a. Name of Subsidiary: Transit Supports Services Limited

Summary of results: Group Subsidiary Group Subsidiary

2017 2017 2016 2016

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

Revenue 7,186,798 1,463,463 6,710,048 1,078,063

Profit/(loss) before tax 766,844 663,824 (490,577) (232,468)

Current tax expense (253,586) (164,062) (109,219) (7,692)

Profit/(loss) from continuing operations 513,258 497,475 (599,796) (240,160)

Total comprehensive (loss)/income 557,108 498,694 (575,117) (243,077)

Capital expenditure (gross) 890,389 7,843 402,082 66,310

Depreciation 906,975 1,535 1,133,550 7,016

Summary of financial position:

Property, plant and equipment 2,955,045 81,582 2,977,889 75,275

Other non-current assets 100,745 - 97,780 -

Current assets 1,414,842 508,221 1,249,990 409,799

Current liabilities 1,878,492 300,807 2,613,373 787,257

Net current (lliabilities)/assets (463,650) 207,414 (1,363,384) (377,459)

Non current liabilities 554,100 96,453 323,838 3,938

Share capital 828,850 828,850 828,850 828,850

Retained earnings/(loss) 324,595 (57,960) 142,804 (223,968)

Shareholders' funds 1,727,152 (62,684) 1,501,511 (229,911)

Summary of cash flows:

Net cash from/(used in) operating activities 1,619,772 631,028 2,139,909 765,186

Net cash used in financing activities (495,885) (406,231) (1,605,302) (546,023)

Net cash (used in)/from investing activities (866,567) (171,187) (311,433) (84,821)

Opening cash and cash equivalents (101,871) 23,188 (162,110) (101,569)

Closing cash and cash equivalents 5,196 72,225 (101,871) 23,188

b. Non-controlling interests

This was arrived at after elimination of intra-group transactions and differ from the loss presented in the summarized stand-alone

results for the subsidiary.

Accumulated non-controlling interests attributable to Transit Supports Services Limited in the consolidated statement of financial

position amounts to N214,431 million (2016 - N117 million).

There were no restrictions on the Company's ability to access or use the Group's assets or settle the group's liabilities at 31

December 2017.

Group Company

Non-controlling interests have a 50% equity stake in Transit Supports Services Limited. Profit attributable to non-controlling

interests in the 2017 consolidated profit amounts to Profit of N331.47 million (2016 - Loss of N118.5 million).

Held by

(Units) % voting

power 2014

ABC Ghana Limited: A Company incorporated in Ghana the 3rd May, 2007. It commenced road passenger transportation

services within Ghana and the West Coast between Lagos, Nigeria and Accra Ghana. The company also offer passenger and

cargo handling services to ABC Transport Plc.

Transit Supports Services Limited (TSS Limited): A Company incorporated in Nigeria in 2007 and engaged in the importation

and sales of motor vehicles, motor vehicle spares and installation of motor vehicle speed governing devices.

ABC Transport Plc owns a 50% equity stake in Transit Supports Services Limited a company incorporated in Nigeria in 2007 and

engaged in the importation and sales of motor vehicles, motor vehicle spares and installation of motor vehicle speed governing

devices. A summary of the results and financial position of Transit Supports Services Limited together with relevant disclosures

relating to non-controlling interests is provided below in accordance with the requirements of IFRS 12:

40

ABC TRANSPORT PLC



ABC

Tranport

Plc

ABC

Ghana

Ltd

Transit

Supports

Services

Limited Elimination Total

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

16.2 Condensed result of consolidated entities - 2017

Condensed profit or loss

Gross profit 1,069,676 30,085 751,151 (232,929) 1,617,983

Other operating income 72,685 13 209,514 - 282,211

Interest income 749 5 - 754

Net fair value gains/(losses) on financial assets at

fair value through profit or loss 2,285 - - - 2,285

Dividend income 163,350 - - (163,350) -

Other gains and losses 91,042 - 9,281 - 100,323

Total operating income 1,399,787 30,103 969,947 (396,279) 2,003,555

Administrative expenses (1,157,665) (30,940) (82,556) 234,661 (1,036,500)

Finance costs (136,815) - (63,396) - (200,211)

Profit / (loss)before tax 105,307 (837) 823,994 (161,618) 766,844

Current tax expense (89,524) (3,075) (160,987) - (253,586)

Profit/(loss) from continuing operations 15,783 (3,912) 663,007 (161,618) 513,258

41

ABC TRANSPORT PLC



ABC

Tranport

Plc

ABC

Ghana

Ltd

Transit

Supports

Services


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

16.2 Condensed result of consolidated entities - 2017

Condensed financial position

Non-current assets:

Deferred tax asset 59,864 - - 679 60,543

Intangible assets 18,565 - - - 18,565

Property, plant and equipment 2,873,463 12 81,570 - 2,955,045

Investment in subsidiaries 41,470 - - (41,470) -

Other investments 1,845 - - - 1,845

Financial assets - FVTPL 19,792 - - - 19,792

Finance lease receivables - - - - -

3,014,999 12 81,570 (40,791) 3,055,790

Current assets

Inventories 228,372 - 358,715 - 587,087

Trade and other receivables 163,766 (76,713) 242,551 (4,695) 324,909

Other assets 413,516 9,640 95,036 (25,187) 493,005

Cash and bank balances 100,967 39,279 32,944 - 173,191

906,621 (27,793) 729,244 (29,881) 1,578,192

Non- current assets held for sale - - - - -

Total assets 3,921,621 (27,781) 810,814 (70,672) 4,633,982

Equity and reserves

Issued share capital 828,850 3,450 70,000 (73,450) 828,850

Share premium 575,391 - - - 575,391

Retained earnings 382,555 (48,688) 362,595 (208,516) 487,945

Other comprehensive (loss)/income reserve 3,040 109 (658) (4,175) (1,684)

Shareholder's fund 1,789,836 (45,129) 431,937 (286,141) 1,890,502

Non-controlling interests - - - 214,435 214,435

Total equity and reserves 1,789,836 (45,129) 431,937 (71,705) 2,104,937

Non-current liabilities - -

Long-term borrowings 263,595 94,059 - 357,653

Finance lease obligations - - - - -

Post employment benefits - defined benefits 265,644 1,783 2,343 (1,732) 268,039

Provisions 24,861 - - - 24,861

Deferred tax - - - - -

554,100 1,783 96,402 (1,732) 650,553

Current liabilities

Short term borrowings 285,269 - - - 285,269


Post employment benefits - defined contribution 204,403 - 16 - 204,419

Current taxation liabilities 101,205 139 160,986 - 262,329

Trade and other payables 799,999 15,425 121,473 2,768 939,665

Deferred income 18,814 - - - 18,814

Bank overdrafts 167,996 - - - 167,996

1,577,686 15,564 282,475 2,768 1,878,492

Total equity and liabilities 3,921,621 (27,781) 810,814 (70,672) 4,633,982

42

ABC TRANSPORT PLC



ABC

Tranport

Plc

ABC

Ghana

Ltd

Transit

Supports

Services


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

16.2 Condensed result of consolidated

entities - 2016

Condensed profit and loss

Gross profit 933,592 18,580 289,553 (30,243) 1,211,482

Other operating income 84,978 285 - - 85,263

Interest income 108 - - - 108

Net fair value gains on financial assets at

fair value through profit or loss 1,783 - - - 1,783

Income from investments - - - - -

Other gains 103,055 13,804 - 116,859 Total operating income 1,123,516 18,865 303,357 (30,243) 1,415,495

Administrative expenses (1,160,441) (17,078) (261,098) 30,243 (1,408,374)

Impairment losses (8,184) - - - (8,184)

Finance costs (213,002) - (276,512) - (489,514)

Profit before tax (258,111) 1,787 (234,253) - (490,577)

Current tax expense (101,527) (4,832) (2,860) - (109,219)

Profit from continuing operations (359,638) (3,045) (237,113) - (599,796)

43

ABC TRANSPORT PLC



ABC

Tranport

Plc

ABC

Ghana

Ltd

Transit

Supports

Services


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

16.2 Condensed result of consolidated

entities - 2016

Condensed financial position

Non-current assets:

Deferred tax asset 59,864 - - 679 60,543

Intangible assets 18,457 - - - 18,457

Property, plant and equipment 2,902,614 120 75,155 - 2,977,889

Investment in subsidiaries 41,470 - - (41,470) -

Other investments 1,845 - - - 1,845

Financial assets - FVTPL 16,935 - - - 16,935

3,041,185 120 75,155 (40,791) 3,075,670

Current assets

Inventories 171,280 - 381,655 - 552,935

Trade and other receivables 307,119 (48,662) (20,828) 11,256 248,885

Other assets 299,422 5,648 54,796 2,667 362,534

Cash and bank balances 62,370 16,644 6,621 - 85,635

840,190 (26,370) 422,244 13,923 1,249,989

Non- current assets held for sale - - - - -

Total assets 3,881,376 (26,250) 497,399 (26,868) 4,325,658

Equity and reserves

Issued share capital 828,850 3,325 70,000 (73,325) 828,850

Share premium 575,391 - - - 575,391

Retained earnings 366,772 (39,848) (300,416) 116,536 143,044

Other comprehensive income reserve (39,591) 347 1,519 (2,577) (40,302)

Shareholder's fund 1,731,422 (36,176) (228,897) 40,634 1,506,983

Non-controlling interests - - - (117,001) (117,001)

Total equity and reserves 1,731,422 (36,176) (228,897) (76,367) 1,389,982

Non-current liabilities

Long-term borrowings 50,726 - - - 50,726


Post employment benefits - defined benefits 266,498 1,563 2,375 - 270,436

Provisions 6,614 - - - 6,614

Deferred tax - - - - -

323,838 1,563 2,375 - 327,776

Current liabilities

Short term borrowings 405,370 - 436,893 - 842,263

Finance lease obligations 45,607 - - - 45,607

Post employment benefits - defined

contribution 187,338 - 211 - 187,549

Current taxation liabilities 157,359 (809) 2,446 - 158,996

Trade and other payables 836,744 9,173 284,294 49,500 1,179,711

Deferred income 6,269 - - - 6,269

Bank overdrafts 187,429 - 77 - 187,506

1,826,115 8,364 723,921 49,500 2,607,900

Total equity and liabilities 3,881,375 (26,249) 497,399 (26,867) 4,325,658

44

ABC TRANSPORT PLC



2017 2016 2017 2016

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

17. Other InvestmentsInvestment in Abex Ltd accounted for as investment

under IAS 39 (Note 17.1) 1,845 1,845 1,845 1,845

17.1

2017 2016

N'000 N'000

17.2 Financial assets designated at fair value through profit or lossAt 1 January 16,935 20,152

Withdrawal in the year - (5,000)

Fair value gain (Note 6.2.2.1) 2,857 1,783

At 31 December 19,792 16,935

17.2a.

The entire amount reported for the group was invested by the parent company.

18. Finance lease receivables

Current portion - -

Non-current portion - -

- -

Group Company

Group

This is carried at deemed cost of N1,845,263.35 which was the fair value of the amount invested. The

investment is not impaired as Abex Ltd paid dividend of Nil (2016:Nil).

An unclaimed dividend pool of N14,424,653.73 was transferred in August 2012 from

the custody of the Company's registrars to Stanbic IBTC Assets Management

Limited for investment to the benefit of the company in line with the provisions of the

Investment and Securities Act 2007. gain of N2.857 million (2016 : N1.783 million)

accruing thereon for the year up to 31 December 2016 is included in non-operating

income reported for the period. The financial assets created from the above is

classified as fair-value-through-profit or loss (FVTPL) in accordance with IAS 39.

The unclaimed dividend liability of N45,161,291 (2016 : N45,161,291) is reported

under other payables as at 31 December 2017.

45

ABC TRANSPORT PLC



2017 2016 2017 2016

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

18.2 Amount receivable under finance lease

Not later than one year - - - -

Later than one year and not - - - -

later than 5 years - - - -

- - - -

Less: unearned finance income - - - -

Present value of minimum lease

payment receivable - - - -

Over-due rentals outstanding - - - -

- - - -

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

19. Inventories

Motor vehicle spares 190,867 138,894 190,867 138,893

Fuel/diesel 17,792 13,958 17,792 13,958

Stationery 11,628 9,911 11,628 9,911

Oil and lubricants 5,430 5,265 5,430 5,265

Snacks and fruit drinks 91 52 91 52

Uniform and promotional materials 527 806 527 806

Sanitation materials 117 191 117 191

City Transit Inn (CTI) 1,922 2,204 1,922 2,204

Transit Support Services (TSS) 358,713 381,655 - -

587,087 552,936 228,372 171,280

Present value of minimumMinimum

lease payments

Inventory consumed within the period included in cost of sales amounted to N3.210 billion (2016 : N2.34

billion).

The interest rate inherent in the leases is fixed at the contract date for the entire lease term. The average

effective interest rate contracted is approximately 53% per annum.

Group and Company Group and Company

lease payments

Unguaranteed residual values of the leased assets(5 TATA Buses) are estimated at N2.5 million (N500,000

per bus).The finance lease receivables at the end of the period are not impaired.

Inventories value of N587.09 million (2016 : N552.9 million) were carried at net realisable value. There

amount charged to statement of profit or loss and other comprehensive income in respect of written down

value of inventories to net realizable value is N263,638. (2016 : N7.559 million). There are no inventories

pledge as securities for liabilities. CTI inventory include food items, food and beverage consumables, house-

keeping items, etc while TSS inventory are tyres, oil filters, air filters, fuel filters, flat beds and auto control

products held for sale. The Group expects to consume all inventory existing at the reporting date within twelve

months thereafter.

The entire amount reported for the group belongs to the parent company.

Group Company

46

ABC TRANSPORT PLC



2017 2016 2017 2016

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

20. Trade and other receivables Included within

current assets:

Trade receivables 260,257 264,622 130,402 248,839

Allowance for trade receivables (Note 20.2) (33,870) (61,146) (22,366) (49,838)

226,387 203,476 108,036 199,001

Amounts owed by staff (Note 20.3) 105,484 57,370 105,484 57,370

Amounts due (to)/from related parties (Note 20.5) (6,962) (11,962) (49,754) 50,747

324,909 248,884 163,766 307,118

20.1 Trade receivables

i.

ii.

iii.

iv. FRCN receivables past due but not impaired:

Analysis by maturity2017 2016 2017 2016

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

91 - 180 days 1,009 590 1,009 590

181 - 365 days - 1,104 - 1,104

Over 365 days 14,235 13,443 14,235 13,443

Total amount 15,244 15,137 15,244 15,137

v. All trade are included within current assets and are stated after making allowance for bad and doubtful

balances and analyzed below:Allowances are made for all group debts.

Group Company

Group Company

The average credit period is 60 days. No allowance is charged on outstanding debts for the first 60 days

after the date of invoice. The group has recognised 100% allowance for debts over 365 days because

historical experience has shown that debts in this category are usually irrecoverable. Allowances are also

made for debts between 61 days and 365 days based on percentages that reflect the best estimate of

collection with reference to entity's historical experience and an analysis of the debtor's financial position.

No specific allowance was made for any debtor as at 31 December 2017 (2016 : Nil).

Included in the amount of amounts due (to)/from related parties is an amount of N million (2016 : N0.27

million) owed by ABEX express parcel service. ABC Transport Plc has a 5% equity stake in Abex Ltd. The

amounts owed by Abex Ltd. have not been impaired.

Trade receivables disclosed above also includes amounts that are past due but not considered to be

impaired at the end of the reporting period. All receivables in this category are due from the barter

arrangement with the Federal Radio Corporation of Nigeria (FRCN), the amounts charged against FRCN

are technically not receivable from the customer but can be used at anytime by the group for advert

placements in any of the broadcast stations under the FRCN. It is based on this premise that the group has

decided not to make any allowances for such debts.

47

ABC TRANSPORT PLC



2017 2016 2017 2016

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

20.2 Movement in the allowance for doubtful debt

(trade receivables)

At 1 January 61,146 119,280 49,838 108,813

Impairment losses recognised on receivable 6,842 841 -

Impairment losses written back on receivable (22,615) (24,983) (27,472) (24,983)

Amounts written off as bad debt during the year (11,504) (33,992) - (33,992)

At 31 December 33,870 61,146 22,366 49,838

20.3 Staff receivables

2017 2016 2017 2016

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

Gross amount owed by staff 207,821 163,725 207,821 163,725

Allowances for staff debts (Note 20.4) (102,337) (106,354) (102,337) (106,354)

Staff receivables (net) 105,484 57,370 105,484 57,370

20.4 Movement in the allowance for doubtful debt (staff receivables)

2017 2016 2017 2016

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

At 1 January 89,592 77,001 79,104 78,001

Impairment losses recognised on receivable 12,745 12,591 23,233 1,103

At 31 December 102,337 89,592 102,337 79,104

Group Company

Group Company

Group Company

Interests are not charged on overdue debts that arise as a result of IOUs.

In determining the recoverability of a trade receivable, the Group considers any change in the credit

quality of the trade receivable from the date credit was initially granted up to the end of the reporting

period. There were no debts considered as specifically impaired during the year (2016 : Nil).

The entity also has receivables from staff who owe the group. Staff debts are either in form of loans or

unretired IOUs charged directly to the staff's account.

The group makes specific allowances for staff receivables based on parameters such as the employment

status of the staff concerned (whether dormant or disengaged) and/or if the debt is an unretired IOU.

100% allowances are made for unretired IOUs immediately they become due (usually 7 days).

The staff debts for the group are 100% attributable to the parent company

48

ABC TRANSPORT PLC



20.5 Receivables from related parties

2017 2016

N'000 N'000

Amounts due (to)/from related parties to the group (6,962) (11,962)

Amounts due from the group to the related parties - -

Net amounts owed (6,962) (11,962)

i.

ii.

iii.

iiv.

2017 2016 2017 2016

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

v. Parent company intra-group (payables)/

receivables as at 31 December

Due (to)/ from Rapido Ventures (14,158) (18,100) (7,845) (20,403)

Due (to)/from ABC Ghana (6,261) - 67,179 34,741

Due (to)/from Transit Support services - - (122,546) 30,271

Due (to)/from Abex Express 1,240 274 1,240 274

Due (to)/from Mayfair Suite 12,217 5,864 12,217 5,864

(6,962) (11,962) (49,754) 50,747

21. Other assets

Prepaid rent 77,069 86,965 48,404 58,123

Prepaid insurance 41,381 21,407 40,406 21,037

Withholding taxes recoverable 191,593 227,909 141,598 180,813

Deposits for vehicle and spares - 9,115 - -

Vat recoverable 24,172 - - -

Dividend receivable - - 163,350 -

Others 62,340 90,283 86,657 112,594

396,554 435,679 480,415 372,566

Impairment charge (66,899) (73,144) (66,899) (73,144)

329,655 362,535 413,516 299,422

Movement in the impairment charge (other assets)At 1 January 73,144 - 73,144 -

Impairment losses recognised on other assets - 73,144 73,144

Impairment losses written back on other assets (6,245) - (6,245) -

Amounts written off during the year - - - -

At 31 December 66,899 73,144 66,899 73,144

The group has receivables/payables from related parties. These related parties are not part of the group but

they are related in one way or the other. The bulk of these amounts do not arise from trade activities but

usually from shared costs and other reimbursable.

The amounts outstanding are unsecured and will be settled in cash. The group does not make any

allowances for related party receivables because all amounts are considered collectible within the shortest

period possible.

The Managing Director of ABC Transport Plc, Mr Frank Nneji is the largest shareholder in both Rapido

Ventures Ltd and ABC Transport Plc and is equally the Chairman of Rapido Ventures Ltd.

CompanyGroup

Intra-group receivables/payables have been eliminated on consolidation.

The related party receivables were due to/due from Rapido Ventures Limited.

Group

49

ABC TRANSPORT PLC



22. Cash and cash equivalents

2017 2016 2017 2016

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

Cash in hand 35,132 17,719 18,452 17,648

Cash at bank 138,059 67,916 82,515 44,722

Gross cash and bank balances 173,191 85,635 100,967 62,370

Cash and bank balances as per statement of

financial position 173,191 85,635 100,967 62,370

22.1 Bank overdrafts (167,996) (187,506) (167,996) (187,429)

Cash and bank balances as per statement of

cash flows 5,195 (101,871) (67,029) (125,059)

22.2 Impairment charge

At 1 January - 13,933 - 13,933

Impairment losses written back in the year - (13,933) - (13,933)

At 31 December - - - -

23. Share capital

Authorised:At 31 December-2,000,000,000 ordinary shares

of 50k each 1,000,000 1,000,000 1,000,000 1,000,000

23.1 Issued and fully paid:At 31 December-1,657,700,000 ordinary shares

of 50k each 828,850 828,850 828,850 828,850

For the purposes of the consolidated statements of cash flows, cash and cash equivalents include cash on

hand and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the

reporting period as shown in the consolidated statements of cash flows can be reconciled to the related

items in the consolidated statements of financial position.

Cash and bank balances as presented in the

statement of financial position

Group Company

50

ABC TRANSPORT PLC



2017 2016 2017 2016

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

23.1a Issued share capital comprises of:

420,000,000 ordinary shares at 50k each

(December 2005) 210,000 210,000 210,000 210,000

420,000,000 ordinary shares at 50k each (April

2006) 210,000 210,000 210,000 210,000


(September 2006) 333,500 333,500 333,500 333,500


(September 2015) 75,350 75,350 75,535 75,535

At 31 December 828,850 828,850 828,850 828,850

23.2 Share premium

420,000,000 ordinary share premium at 50k each

(December 2005) 210,000 210,000 210,000 210,000


(April 2006) 210,000 210,000 210,000 210,000


(September 2006) 333,500 333,500 333,500 333,500

753,500 753,500 753,500 753,500

Total direct expenses on the issue of shares (178,109) (178,109) (178,109) (178,109)

At 31 December 575,391 575,391 575,391 575,391

24. Retained earnings

At 1 January 142,804 624,329 366,772 726,410

Transferred from statement of profit or loss and

other comprehensive income 181,791 (481,525) 15,783 (359,638)

At 31 December 324,595 142,804 382,555 366,772

2017 2016 2017 2016

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

25. Other comprehensive income reserves

At 1 January (45,534) (76,405) (39,591) (67,189)

Actuarial (gains)/losses (Note 29) 43,601 27,776 42,631 27,598

Foreign currency translation (gain)/loss 249 3,095 - -

At 31 December (1,684) (45,534) 3,040 (39,591)

The exchange differences arose from the translation of the results and net assets of the group's foreign

operations from the functional currency to the group's presentation currency (i.e translating ABC Ghana's

results from cedis to naira). These are recognised directly in other comprehensive income and

accummulated in the foreign exchange revaluation reserve.

Group Company

The Board is proposing to distribute N49,731,000 representing 3 kobo per share from the dividend received

from TSS Limited in respect of its 2017 operating activities. The distribution, having been previously

subjected to the relevant tax deductions and will not be subjected to any further withholding tax deduction in

the hands of the shareholders.

Group Company

51

ABC TRANSPORT PLC



2017 2016

N'000 N'000

26. Non-controlling interests

At 1 January (117,001) (33,357)

Issued share capital - 34,950

Share of Profit/(loss) for the year 331,467 (118,273)

Other comprehensive income reserve:

Foreign currency translation gain (31) (83)

Actuarial losses - (238)

At 31 December 214,435 (117,001)

These are the net assets of the non-controlling interests in the group.

27. Borrowings 2017 2016 2017 2016

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

a. Secured amounts:

Bank overdrafts 167,996 187,506 167,996 187,429

Bank loans 642,922 892,989 548,864 456,096

Others (Note vi) - - - -

Total borrowed fund 642,922 892,989 548,864 456,096

b. Analysis by maturity:

Current-due within 1 year 285,269 842,263 285,269 405,370

Non-current-due after 1 year 357,653 50,726 263,595 50,726

642,922 892,989 548,864 456,096

27.1 Summary of borrowing arrangements

i.

ii.

iii

Group

Group

Company

Borrowing from Fidelity Bank to part finance 150 units of trucks/trailers and construction of new haulage site

at Mfamosing,Calabar. Total amount offered was N2.498billion for a tenor of 48 months. The amount is being

drawn in tranches. At 31 December 2016, a total of N2.47billion had been drawn on the facility. Securities

provided for the loans are legal mortgage over terminal at plot 7, Cadastral zone 5 Abuja, property at 52

Ikorodu Road, Jibowu Lagos, insurance over properties, joint ownership of vehicles financed and personal

guarantee of the Managing Director. Average effective interest rate for the loan is 18.50% per annum.

Aggregate outstanding on this line was N95.7 million as at 31 December 2017.

Borrowing from Fidelity Bank to finance the expansion of CTI. Amount offered was N150million for a tenor of

45 months. The amount is being drawn in tranches. At 31 December 2015, the total offered amount

(N150million) had been fully drawn. Securities provided are legal mortgage over terminal at plot 7, Cadastral

zone 5 Abuja, property at 52 Ikorodu road Lagos, insurance over properties, joint ownership of vehicles

financed and personal guarantee of the Managing Director. Average effective interest rate for the loan is

19.51% per annum. Outstanding balance on this facility was N20.2 million has been liquidated as at 31

December 2017.

Diamond Bank Term Loan of N232.37m with a tenor of 18 months being a restructured overdraft facility

aimed at aligning repayment with Transit Supports Services Ltd cash flow from the sale of F3000 Shacman

trucks financed. Securities provided is a Third Party Legal Mortgage over ABC Transport Plc terminal

located in Port-Harcourt valued at N168 with a Forced-sales-Value(FSV) of N112m, The interest rate on the

facility is 23% per annum.Outstanding balance on this facility was N50.38m as at 31 December 2017.

52

ABC TRANSPORT PLC



iv

v.

vi

vii

viii

ix Borrowing from Diamond Bank Plc to partfinance 80% the purchase and importation of 31units of brand new

buses (24units of BD 6 Hiace bus and 7units of Neptune N 6 brand). Amount offered was N254.12m for a

tenor of 24 months. The amount was drawn in two tranches. Securities provided for the loan are legal

motgage over terminal at Plot 7, Cadastral Zone 5 Abuja, property at 52 Ikorodu Road, Jibowu Lagos,

insurance over properties, joint ownership of vehicles financed, and personal guarantee of the Managing

Director. The interest rate for the loan is 25% per annum. Outstanding balance on the facility was N217.10m

as at 31 December 2017.

Borrowing from Fidelity Bank Plc to part finance the importation of 43units of Shacman F3000 truck heads,

30units of 50-ton flat beds and 10units of 36Vurmark cement carrier.Amount offered was N316.65m for a

tenor of 40 months has been fully liduidated as at 31 December 2017. Securities provided for the loan were

legal motgage over terminal at Plot 7,Cadastral Zone 5 Abuja, property at 52 Ikorodu Road, Jibowu Lagos,

insurance over properties, joint ownership of vehicles financed, and personal guarantee of the Managing

Director.

Borrowing from Fidelity Bank Plc to part finance the purchase of 36units mini buses.Amount offered was

N331.5m for a tenor of 30 months. The amount is being drawn in tranches. At 31 December 2017, a total of

N280.88m had been drawn on the facility. Securities provided for the loan are legal motgage over terminal at

Plot 7, Cadastral Zone 5 Abuja, property at 52 Ikorodu Road, Jibowu Lagos, insurance over properties, joint

ownership of vehicles financed, and personal guarantee of the Managing Director. The interest rate for the

loan is 28% per annum. Outstanding balance on the facility was N279.81m as at 31 December 2017.

Borrowing from Fidelity Bank Plc to part finance the purchase of 6 units Schacman F3000 Truck heads and 6

units of 50 tons Flat beds. Amount offered was N105.55m for a tenor of 36 months. Securities provided for

the loan are legal motgage over terminal at Plot 7, Cadastral Zone 5 Abuja, property at 52 Ikorodu Road,

Jibowu Lagos, insurance over properties, joint ownership of vehicles financed, and personal guarantee of the

Managing Director. The interest rate for the loan is 25% per annum. Outstanding balance on the facility was

N39.25m as at 31 December 2017.

Borrowing from Fidelity Bank Plc to part finance the importation of 10 units of yaxing luxury buses. Total

amount offered was N312.29million while total amount drawn as at 31 December 2015 was N264.2million for

a tenor of 27 months . Securities provided for the loans are legal mortgage over terminal at plot 7, Cadastral

zone 5 Abuja, property at 52 Ikorodu Road, Jibowu Lagos, insurance over properties, joint ownership of

vehicles financed and personal guarantee of the Managing Director. Effective interest rate for the loan is

22.6% per annum. This facility had a balance of 12.7 million as at 31 December 2017.

Fidelity Bank Term Loan with a tenor of 180 days being a restructured overdraft facility aimed at aligning

repayment with Transit Supports Services Limited cash flow expected from the sale of F3000 Shacman

trucks financed. Securities provided include the personal guarantee of the MD, legal mortgage over the

property of ABC Transport Plc located at Plot 7,Cadastral, Zone 5, Utako District, Abuja, corporate guarantee

of ABC Transport Plc, all assets debenture on fixed and floating assets of Transit Supports Services Ltd and

insurance cover on properties, to be undertaken by Transit Supports Services Ltd but brokered by FUSL

Insurance Brokers with Fidelity's interest noted as the first loss payee. Interest rate on the facility is 24.75%

per annum. The balance of the facility including accrued interest was N43.68 as at 31 December 2017.

53

ABC TRANSPORT PLC



28. Obligations under finance lease

Amount payable under finance lease

2017 2016 2017 2016

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

Not later than one year - current - 45,607 - 45,607

Later than one year and not later than 5 years -

non-current - - - -

- 45,607 - 45,607

Less: Future finance charges - - - -

- 45,607 - 45,607

Present value of minimum lease

payment receivable - 45,607 - 45,607

Overdue unpaid amounts - - - -

- 45,607 - 45,607

2017 2016

N'000 N'000

Motor vehicles - 331,845

Total - 331,845

The group obtained some of its buses under finance leases from The Infrastructure Bank (formerly Urban

Development Bank of Nigeria). The average lease term for the buses is between 24 - 32 months. The

ownership of the assets transfer to the group at the expiration of the lease term. The group's obligations to the

lessor are secured by the lessor's title to the leased assets.

At the expiration of the lease term in December 2017, the ownership of the buses had been transferred to the

company.

The net book value of finance leased assets as at 31 December 2017 included in property, plant and

equipment reported under Note 15 to this financial statements are as follows:

lease payments

Group and Company

All group finance lease obligations are owed by the parent company.

The average implicit interest rate on the lease is 5% per annum (2016: 5% per annum)

Minimum lease payments

Group and Company Group and Company

Present value of minimum

54

ABC TRANSPORT PLC



29. Post employment benefits

i.

ii.

iii.

2017 2016 2017 2016

29.1 Statement of financial position N'000 N'000 N'000 N'000

a. Defined contribution schemes 204,419 187,549 204,403 187,338

b. Defined benefit schemes 268,039 270,436 265,644 266,498 Total amount presented in the statement of

financial position 472,458 457,985 470,047 453,836

29.2 Statement of profit or loss

a. Defined contribution schemes 33,525 34,046 33,096 34,046

b. Defined benefit schemes 71,819 61,729 72,320 60,072

Total amount charged to the income

statement 105,344 95,775 105,416 94,118

Defined benefit schemes

2017 2016 2017 2016

29.3 Weighted average actuarial assumptions % % % %

used at 31 December

Rate of inflation 19 19 19 19

Rate of increase in salaries 14 14 14 14

Return on investment 15 15 15 15

Defined benefit scheme are based upon independent actuarial valuation performed by Excel Actuaries limited

using the projected unit credit basis. This valuation was carried out as at 31 December 2017.

Defined benefit schemes expense is recognised in administrative expenses in the statement of

comprehensive income.

The actuarial valuation report was signed in February 2018 by Jonathan Ben Phiri

(FRC/2016/NAS/00000015016) a fellow member of the Institute and Faculty of Actuaries, United Kingdom.

The Group operates a contributory pension scheme of 18% where both employer and employee contribute

10% and 8% each of the gross emolument. Also management put in place gratuity for staff that have been in

the employment of the company for a minimum of five (5) years and a long service grant of two hundred

thousand naira (N200,000) for drivers who have served the company up to ten (10) years. The long service

grant has been reviewed downwards to one hundred thousand naira (N100,000) with effect from January

2016.

The defined benefit scheme is unfunded with no assets specifically set aside to meet obligations as at when

due. Funds are retained in the Group's business to meet due obligations.

Under the defined benefit's scheme member's past service benefits have been assessed using the Projected

Unit Credit Method (PUCM). This method calculates the actuarial liability (staff gratuity benefits and long

service grants) as the discounted value of the benefits that have accrued over the past period of membership

of the beneficiaries. In determining this value allowance is made for any future expected inflationary growth of

the on-going benefits up to the exit date.

The principal actuarial assumptions used for estimating the Group's benefit obligations (IAS 19) are set out

below:

The Projected Unit Credit Method (PUCM) was applied to determine the present value of the Group's defined

benefit obligations and the related current service cost and where applicable the past service costs in

accordance with Guidance Note (GN 9) issued by the Institute and Faculty of Actuaries.

Group Company

Group Company

55

ABC TRANSPORT PLC



i. Salary increments

ii. Withdrawal rates

iii. Mortality

iv. The present value of the liabilities of the scheme

2017 2016 2017 2016

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

Gratuity 268,039 270,436 265,644 266,498

Drivers long service grant - 11,266 - 11,266

268,039 281,702 265,644 277,764

b. Movement in plan liabilities:

At 1 January 270,436 257,762 266,498 254,721

Current service cost 29,987 36,581 30,985 35,702

Interest cost 34,315 26,350 33,890 25,995

Actuarial gains (Note 24) (43,602) (27,776) (42,631) (27,598)

Benefits paid (23,098) (22,481) (23,098) (22,322)

At 31 December 268,039 270,436 265,644 266,498

30. Provisions

At 1 January 6,614 10,135 6,614 10,135

Additions for the year (Note 30.1) 18,248 - 18,248 -

Write back during the year - (3,521) - (3,521)

At 31 December 24,861 6,614 24,861 6,614

Analysis by maturity:

Current liabilities - - - -

Non-current liabilities 24,861 6,614 24,861 6,614

24,861 10,135 24,861 6,614

Group Company

It was assumed that members' basic salaries would increase in future on account of inflation at an

average long term compound rate of 10% p.a.

Withdrawals in excess of those anticipated for members with past service less than 5 years and 10 years

(for drivers of heavy duty vehicles), would generally result in a reduction of the staff gratuity benefits.

Accordingly, a margin has been maintained in the assumed rates of withdrawal to ensure that the

expected surplus emerging on withdrawals is not overstated.

Mortality in excess of those anticipated, for members with past service less than 5 years and 10 years (for

drivers of heavy duty vehicles), would generally result in a reduction of the staff gratuity benefits.

Accordingly, a margin has been maintained in the assumed rates of mortality to ensure that the expected

surplus emerging on mortality is not overstated. The A1967/70 mortality tables were assumed to apply.

The amount included in the statement of financial position arising from the Group's obligation in respect of

its defined benefit scheme is as follows:

56

ABC TRANSPORT PLC



30.1

i.

ii.

iii.

2017 2016 2017 2016

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

31. Trade and other payables

Trade payables (Note 31.a) 295,415 560,858 271,394 332,179

Accruals 151,927 69,842 74,887 60,782

Industrial Training Fund Levy (Note 31.b) 8,342 8,612 8,026 8,348

Unclaimed dividends (Note 31.c) 45,161 45,161 45,161 45,161

Co-operative liabilities 27,337 42,069 27,337 42,069

Development levy liabilities - - - -

Value added tax liabilities (Note 31.b) 254,417 293,833 254,208 222,142

Withholding tax liabilities (Note 31.b) 6,701 6,215 3,689 4,788

Pay-As-You-Earn liabilities (Note 31.b) 11,016 12,889 11,016 12,889

Staff welfare liabilities 38 13 38 13

Other tax payables (Note 31.d) - - - -

Other payable 139,062 145,405 103,992 108,087

Customer cash transfer 250 286 250 286

939,665 1,185,183 799,999 836,744

All the liabilities above are classified as current

a.

b.

c.

d.

2017 2016 2017 2016

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

32. Deferred income

Deferred income from cargo operations 7,731 - 7,731 -

Deferred income from leased warehouse 11,083 - 11,083 -

Deferred government grant income (Note 32.i) - 6,269 - 6,269

18,814 6,269 18,814 6,269

i.

Group Company

The deferred government grant income arises from the government intervention in obtaining finance

leased assets at 0% where it would have normally been 5% (see Note 28). The revenue is earned on a

monthly basis and taken to other revenue to be spread over the useful life of the asset.

The average credit period for the purchases of major items is 30 days. However, with certain arrangement

with major suppliers, payment terms can be renegotiated for longer periods.

Statutory liabilities such as VAT, WHT, PAYE, ITF are expected to be settled in line with the relevant

laws/regulations setting them up. With the exception of ITF which is payable yearly, the rest are payable

monthly. The entity has defaulted in remitting VAT on a monthly basis and expects future liabilities arising

from penalties from the tax authorities. Probable amounts of charges arising from unremitted statutory

liabilities have been estimated and provision accordingly made (see Note 30).These represents the total unclaimed dividend pool to several shareholders as at 31 December 2017. The

amounts have been invested in line with the provisions of the Investment and Securities Act 2007.

These are in respect of additional tax assessments carried out by the Imo State Board of Internal Revenue

for undercharge of state tax liabilities. The group has agreed with the tax body to discharge the liabilities

over a period of time.

Trade and other payables are non-interest bearing and hence approximate their fair values. The Group

does not have any derivative financial instrument.

All provisions reported by the group are attributable to the parent company.

There are no other constructive or legal obligations for which the entity is expected to make provisions as

at 31 December 2017.

The provisions in the financial statements relate to pending litigations of N24.86 million on unremitted

statutory deductions and judgment debts of N10.135 million group on some cases decided against the

Company for which the Group has filed an appeal. The Group is optimistic that the ultimate liabilities on

these cases will be lesser than the amount provided.

The number of grants expected to crystallize under the customer loyalty programme is immaterial hence no

provision has been made in connection thereto.

Group Company

57

ABC TRANSPORT PLC



33. Commitments

Operating lease commitments

2017 2016

N'000 N'000

Within one year

Within one year - -

In more than one year but less than two years - 3,000

In more than two years but less than three years - -

In more than three years but less than four years - -

- 3,000

34. Contingent liabilities

2017 2016

N'000 N'000

35. Related parties

35.1 Directors and key management compensation

Directors

Aggregate emoluments of the directors of the company were as follows:Salaries, fees and sitting allowances 40,788 41,126

Incentives (rent of MD's premises) 6,000 6,000

46,788 47,126

Key management compensation

Short-term employee benefits 70,731 72,985

Post employment benefits: 2,555 4,532

Defined contribution schemes 2,552 2,673

75,838 80,190

The Group had no operating lease committments as at 31 December 2017.

Aggregate compensation for key management, being the directors and

members of the executive management was as follows:

Executive management refers to the management staff from the level of Assistant General Manager and

above.

Legal proceedings - The Group's solicitors reviewed all the outstanding cases at the end of each financial

period and advised on the possibility or otherwise of each particular case resulting in a liability against the

group after taking due cognisance of the peculiar circumstances of the case in question, the possibility of

settling out of court on mutually agreed terms or by arbitration. The solicitors equally advised on the likely

timing for the judgment or settlement and amount of the liability.

Appropriate provision has been made in these financial statements for likely liabilities arising from these

cases.

Group and Company

Group and Company

58

ABC TRANSPORT PLC



35.2 Related party transactions

ABC Co-op Abex Rapido Mayfair Total

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

2017Group to the related parties - 1,611 10,383 7,909 19,903

Related party invoices to the Group - 118 22,215 11,057 33,390

2016Group to the related parties - 2,828 26,803 5,462 35,093

Related party invoices to the Group - 284 15,811 10,996 27,091

Abex Express Parcel Services Limited

Rapido Ventures Limited

Mayfair Hotels and Suites

Transactions with directors other than compensation

The managing director of ABC Transport Plc, Mr Frank Nneji is the largest shareholder in both Rapido

Ventures Limited and ABC Transport Plc and is equally the Managing Director of Rapido Ventures

Limited. ABC Transport Plc owed Rapido Ventures the sum of N7,232,006.75 as at 31 December 2017

(2016 ABC owed N20,403,053): which is reported as part of other payables. The nature of the major

transactions between the group and Rapido are the reimbursable costs of operation which include the

diesel issued to Rapido, shared cost of administrative and building costs since they share the same

premises. The group sometimes helps with cargo delivery on behalf of Rapido. Rapido invoices to the

group mainly involves rent of premises to ABC Transport Plc and Transit Support Services Ltd. All

transactions are carried out at arm's length.

The wife of ABC Transport's managing director is the managing director of Mayfair Hotels and Suites,

which offers hospitality services to ABC TransportPlc.MayfairHotels owed ABC Transport Plc the sum of

N12,216,967.88 as at 31December 2017(2016:N5,864,441.5).Mayfair is the official hotelier for the group

as they cater for the group's clients and guests. The standard room rate apply except in cases where, at

the discretion of hotel management, discounts are given. The group, principally through the parent issues

diesel to Mayfair Hotels at standard terms also.

During the twelve months ended 31 December 2017 neither any director or any other executive officer nor

any associate of any director or any other executive officer was indebted to the Company.

During the twelve months ended 31 December 2017, the Company has not been a party to any other

material transaction, or proposed transactions in which any member of the key management personnel

(including directors, any other executive officer, senior manager, any spouse or relative of any of the

foregoing or any relative of such spouse) had or was to have a direct or indirect material interest.

The Group's related party transactions are with ABEX Courier Ltd, Rapido Ventures Ltd and Mayfair

Suites and Conference Centre. At 31 December 2017, the total invoices to and fro the related parties are

analysed below:

ABC Transport Plc owns 5% of the share capital of Abex Express Parcel Services Limited. Included in

trade receivables at 31 December 2017 is the sum of N1,240,274.12 (2016 : N273,734) due from Abex to

ABC Transport Plc. The Group provided cargo services to ABEX Express Parcel Services totaling

N1,611,067.08 for the year ended 31 December 2017 (2016 : N2,827,852) while Abex Limited provided

courier services worth N118,261.5 (2016:N284,928) to the Company.The services were provided at arm's

length.

59

ABC TRANSPORT PLC



2017 2016 2017 2016

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

36. Employees

By Activity:

Operations 908 878 886 869

Accounts 60 63 56 58

Audit 26 28 26 28

Customer service and marketing 7 9 5 8

Materials management 51 53 49 51

Fleet maintenance 251 241 247 237

Hospitality 41 40 41 40

Legal 3 3 3 3

Human resources/administration 51 59 51 59

Cost control and planning 4 4 4 4

General management 33 30 30 27

1,435 1,408 1,398 1,384

By Segment:a) Business segment

Coach 157 506 153 489

Sprinter 121 50 121 47

Shuttle 141 156 141 152

Trading-Transit Supports Services Ltd 26 14 - 14

Cargo 301 256 298 256

Haulage 173 199 173 199

CTI 41 40 41 40

Others 475 187 471 187

1,435 1,408 1,398 1,384

b) Geographical segment

Nigeria 1,424 1,398 1,387 1,374

Ghana 11 10 11 10

1,435 1,408 1,398 1,384

The total cost incurred in respect of these

employees (including directors) was:

Wages and salaries and allowances etc 805,597 802,646 753,955 757,150

Medical expenses 22,137 21,020 22,099 21,011

Staff retirement benefits 105,345 95,774 105,417 94,118

933,079 919,440 881,470 872,279

CompanyGroup

The average employee headcount as at 31 December

2015 by nature of activity and by segment is shown

below:

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ABC TRANSPORT PLC



37. Financial instruments risk management

2017 2016

N'000 N'000

Cash at bank and in hand 173,191 85,635

Security deposits for lease obligations - 7,472

Finance lease receivables - -

Trade and other receivables 358,780 310,030

Total 531,971 403,137

Credit risk management

2017 2016

N'000 N'000

Cash deposit - -

Total - -

The board risk management committee provides the strategic direction for the overall risk management within

the Group. Risk management policies approved at the board level are thereafter passed down through the

managing director who oversees the implementation in conjunction with the Group Head of Finance and Chief

Internal Auditor using various management organs including the budget and finance committees.

The company manages the credit risk from trade receivables through adequate profiling of customers, granting

credit to only blue-chip companies in the haulage business. Credit limits are equally placed on cargo debtors

according to their established credit profiles. The treasury units monitor credit with follow-up for collection upon

maturity.

The exposure on staff loans is equally managed by profiling staff for purposes of granting loans and advances.

Gross allowance on doubtful staff debts was N102.337 million as at 31 December 2017 (2016 : N106.4 million).

Group and Company

Investment in money market securities is managed by a professional investment firm which invests the funds in

various risk-free securities such as government bonds and securities. Security deposits were cash deposits

made as collateral for borrowings which are returned after the loans get fully liquidated. The Group has been

meeting all obligations due on its borrowings.

Group and Company

Gross allowance on doubtful trade receivables was N33,870 million as at 31 December 2017 (2016 :

N61.1million).

Finance lease receivables arose from the lease of mass transit buses to licensed operators in Nigeria. The

contractual terms provide for comprehensive insurance of the vehicles and regular inspection by designated

officers to ensure the vehicles are always in good condition as they serve as part of the collateral on the

receivables in the event of defaults by the lessees. The receivables are further collateralized by bank credit

guarantees and cash deposits. Collaterals on finance lease receivables as at 31 December 2017 are as

follows:

The Group's exposure to risks arising from financial instruments as at 31 December 2017 are as presented

below:

The Group has a high credit risk exposure on trade receivables. Credit exposures arise from the haulage and

consolidated cargo business as proceeds from passenger business are received in advance. The haulage

business services big manufacturing concerns with billings done at intervals (usually a period of one month)

and payments after another interval depending on the contractual terms. While a major part of the cargo

revenue is received on cash basis, about 5% credit is granted to institutional customers with a credit period of

about one month. With the haulage business contributing over 40% to the Group's turnover, the implication is

that a significant part of the company's reported revenue will remain uncollected at each reporting date.

Though there is a subsidiary that operates in Ghana, the bulk of the credit risk is concentrated in Nigeria within

the Haulage and cargo business segments as mentioned above.

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ABC TRANSPORT PLC



38. Liquidity risk

Negotiation of credit terms with suppliers

Negotiation of installments plan with the tax and other relevant authorities

Follow-up on matured credits for prompt collection

Stocking of only vital inventory items

Negotiation of overdraft facilities in periods of immense pressure leveraging on the Group's high credit rating

Maintaining a portfolio of borrowings with a varied maturity profile

39. Maturity of borrowings

Other Finance Operating Trade Other

Bank loans loans lease leases payables payables Total

N'000 N'000 N'000 N'000 N'000 N'000 N'00031 December 2017

Within 6 months 142,618 - - - 295,415 644,250 1,082,283

In 6 to 12 months 142,651 - - - - - 142,651

In 12 to 18 months 138,302 - - - - - 138,302

In 18 to 24 months 74,985 - - - - - 74,985

In more than 24 months 144,367 - - - - - 144,367

642,922 - - - 295,415 644,250 1,582,588

31 December 2016

Within 6 months 729,501 - 45,607 - 560,858 624,325 1,960,291

In 6 to 12 months 112,762 - - - - - 112,762

In 12 to 18 months 33,158 - - - - - 33,158

In 18 to 24 months 17,569 - - - - - 17,569

In more than 24 months - - - - - - -

892,990 - 45,607 - 560,858 624,325 2,123,780

The maturity profile of the anticipated future cash flows including interest in relation to the Group's non-derivative

financial liabilities on an undiscounted basis which therefore differs from both the carrying value and fair value is as

follows:

The Group faces the risk of liquidity as a result of the gap between the payment by trade debtors for services

rendered and the pressure of immediate payment for inputs, repayment of borrowings, taxes and other obligations.

Liquidity risk is managed as follows:

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ABC TRANSPORT PLC



40. Interest rate risk

41. Foreign exchange risk

The Group finances the acquisition of vehicles through bank borrowings which are often secured on the assets

of the Group, the vehicles acquired and the personal guarantees of the directors. The employment of this

source of funding is substantial in comparison with the equity holders funds and presents a key source of

uncertainty and risk in view of the impact of interest rate fluctuations on financing costs, the pressure of

repayments on liquidity and the adverse consequences of repayment defaults. The Group has a track record of

keeping with the terms,conditions and covenants of its borrowings which has accorded it a very high credit

rating within the financial community. This, it exploits to negotiate financing at concessionary interest rates with

its financiers with relative ease. In recent times there has been an increasing shift in focus for fund sourcing

from thetraditional financial institutions whose interest rates are benchmarked in line with the Central Bank of

Nigeria's monetary policy rates (MPR) to industrial banks providing cheaper financing targeted at the

development of critical sectors of the economy in line with the government's fiscal objectives. An analysis of

the borrowings at 31 December 2017 with the associated interest rates is provided under note 28 to these

financial statements. Interest on borrowings is usually benchmarked against the Monetary Policy Rate(MPR) of

the Central Bank of Nigeria which represents the rate at which the CBN lends to banks. From past experience

changes in the rate have always led to an overall increases/decreases in the coupon rates of borrowings by

an average of one to two percent. Had the effective interest rate on borrowings been higher by 1% or 2% in

2017,there would have been a n increase in the finance charges reported in Statement of Profit or Loss by

approximately N8m and N13m respectively for the company and N10.50m and N18m respectively for the

Group.

The Group is exposed to foreign exchange risk in the repatriation of funds generated in foreign currency on its

west coast operations, in the transfer of funds to overseas for vehicle spares, and on balances on its

domiciliary accounts. Funds generated from foreign operations are usually lodged in interest bearing accounts

with banks of the country where they were generated and transferred to Naira denominated correspondent

banks targeting periods of favourable exchange rates between the Naira and the foreign currency.

Procurements are equally planned to ensure transfers to overseas suppliers are made in periods of favourable

exchange rates.

Transit Supports Services Ltd imported goods valued at USD 2,217,770 in 2017. Of this, 30% (USD 685,128)

was obtained from the official market at exchange rates hovering between N304-N306/USD, while the balance

was sourced from theparallel market at excahnge rates hovering between N350-N500/USD. The average

exchange rate on imports was N338.50/USD in 2017.

The Group is exposed to foreign exchange risk arising from fluctuations in exchange rates between the Naira

and the Ghanian Cedi,and the Naira against the USD.The results of the Group's foreign operations in Ghana

are converted to Naira at the average rates prevailing within the period. In 2017, a total amount of

GHS1,326,364 earned from foreign operatons was recognized in the income statement at an average

exchange rate of N74.72/GHS. Of this,GHS989,508 was repatriated at an average excahange rate of

N79.49/GHS .Transactions through the domicilary accounts(for the company)are converted at the rates ruling

on the dates of transaction while balances at the end of the reporting period are converted at the rate ruling at

the end of the reporting period with differences taken to profit or loss.Naira is usually purchased at the rate

prevailing on transactions dates and paid into the USD denominated domiciliary account for overseas

procurement of vehicles spares. Transactions through the domiciliary accounts in 2017 (majorly for spares

purchase) amounted to USD214,192. While the exchange rate closed officially at N305.65/USD in 2017, the

rate was appreciable higher(at about N365/USD) at the parallel market. The Company often source foreign

exchange from the parallel market for transfers to overseas spares suppliers due to the delay associated with

obtaining forex at the official rate through the banks and other official dealers.

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ABC TRANSPORT PLC



42. Capital management

The following table summarizes the capital of the Group and company:

2017 2016 2017 2016

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

a. Cash and bank balances 5,195 (101,871) (67,029) (125,059)

Borrowings and leases 642,922 938,596 548,864 501,703

Net debt 648,117 836,725 481,835 376,644

Equity 1,728,836 1,547,045 1,786,796 1,771,013

Capital 2,376,953 2,383,770 2,268,630 2,147,657

b. Gearing ratio

The gearing ratio at the year end is as follows:

2017 2016 2017 2016

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

Borrowings 642,922 892,989 548,864 456,096

Finance lease obligations - 45,607 - 45,607

Total debt 642,922 938,596 548,864 501,703

Equity 1,941,587 1,384,510 1,789,836 1,731,422

Debt to equity ratio 0.33 0.68 0.31 0.29

i. Debt is defined as current borrowings, non current borrowings and finance lease obligations.

ii. Equity includes all capital and reserves of the Group that are managed as capital.

The Company manages its capital to ensure that it will be able to continue as a going concern while

maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital

structure of the Company consists of debt (which includes the borrowings and finance lease obligations)

disclosed in Notes 28 and equity attributable to equity holders of the parent, comprising issued capital,

reserves and retained earnings as disclosed in the relevant notes in the financial statements. The

Company is not subject to any externally imposed capital requirements. The management of the Company

reviews the capital structure on a frequent basis to ensure that gearing is within acceptable limit.

Group Company

The Group's policy is to ensure that some profit is retained to finance further growth which is

complemented with bank borrowings where funds cannot be fully sourced internally.

Group Company

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ABC TRANSPORT PLC



Loans and Available Non-

Group receivables for sale financial FVTPL Total

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

43. Categories of financial instruments

31 December 2017

Assets

Cash and bank balances 173,191 - - - 173,191

Trade and other receivables 324,909 - - - 324,909

Other assets - - 329,655 - 329,655

Inventories - 587,087 - 587,087

Held for trading investment - - - 19,792 19,792

Other investments - 1,845 - - 1,845

Property, plant and equipment - - 2,955,045 2,955,045

Intangible assets - - 18,565 - 18,565

Deferred tax asset - - 60,543 - 60,543


Total assets 498,100 1,845 3,950,895 19,792 4,470,632

Amortized Non-

cost financial FVTPL Total

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

Liabilities

Borrowings 642,922 - - 642,922

Trade and other payables 939,665 - - 939,665

Finance lease obligations - - - -

Provisions - 24,861 - 24,861

Post employment benefits - 472,459 - 472,459

Current taxation liabilities - 262,329 - 262,329

Deferred income - 18,814 - 18,814

Bank overdrafts 167,996 - - 167,996

Total liabilities 1,750,583 778,463 - 2,529,046

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ABC TRANSPORT PLC



Loans and Available Non-

receivables for sale financial FVTPL Total

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

Group

43. Categories of financial

instruments (Cont'd)

31 December 2016

Assets



Other assets - - 362,535 - 362,535

Inventories - - 552,936 - 552,936


Property, plant and equipment - - 2,977,889 - 2,977,889





Total assets 334,519 1,845 3,972,360 16,935 4,325,659

Amortized Non-

cost financial FVTPL Total

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

Liabilities

Borrowings 892,989 - - 892,989

Trade and other payables 1,185,183 - - 1,185,183

Finance lease obligations 45,607 - - 45,607

Provisions - 6,614 - 6,614






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ABC TRANSPORT PLC



Loans and

receivables

Available

for sale

Non-

financial FVTPL Total

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



31 December 2017

Company

Assets



Other assets - - 413,516 - 413,516

Inventories - - 228,372 - 228,372





Investment in subsidiaries - - 41,470 - 41,470



Total assets 264,734 1,845 3,635,250 19,792 3,921,620

Amortized

cost

Non-


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

Liabilities

Borrowings 548,864 - - 548,864


Finance lease obligations - - - -

Provisions - 24,861 - 24,861






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ABC TRANSPORT PLC



Loans and

receivables

Available

for sale

Non-


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

Company



31 December 2016

Assets



Other assets - - 299,422 - 299,422

Inventories - - 171,280 - 171,280





Investment in subsidiaries - - 41,470 - 41,470



Assets classified as held for sale - - - - -

Total assets 369,488 1,845 3,493,107 16,935 3,881,375

Amortized

cost

Non-


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

Liabilities

Borrowings 456,096 - - 456,096


Finance lease obligations 45,607 - - 45,607

Provisions - 6,614 - 6,614






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ABC TRANSPORT PLC



Carrying Carrying

value value Fair value Fair value

2017 2016 2017 2016

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

44. Carrying value and fair value information

Financial liabilities measured at amortized

cost:

Bank loans 642,922 892,989 650,062 871,137

Finance leases - 45,607 - 45,607

Other borrowings - - - -

Total 642,922 938,596 650,062 916,744

45. Financial commitments

46. Financial commitments

The Directors are of the opinion that there were no capital commitments at 31 December 2017 (2016 : Nil).

47. Events after reporting period

48. Contingent liabilities

49. Comparative figure

Certain prior year balances have been re-classified to ensure proper disclosure and uniformity with current

year's presentation. The reclassifications have no net impact on these consolidated financial statements.

Group Group

The fair values are calculated using discounted cash flows with a discount rate based on the coupon interest

rates of the individual loans and leases at the reporting date.

No event or transaction has occurred since the reporting date, which would have had material effect on the

financial statements as at that date or which needs to be mentioned in the financial statements in the

interest of fair presentation of the Company's financial position as at the reporting date or its results for the

year then ended.

The disclosed fair values above fall within level 2 in the fair value hierarchy of IFRS 13 as the cash flows

and discount rates used in the measurements are market corroborated.

The Directors are of the opinion that all known liabilities and commitments have been taken into

consideration in the preparation of these financial statements. These liabilities are relevant in assessing the

Company's state of affairs.

The Company is subject to various pending litigation arising in the normal course of business. The

contingent liabilities in respect of pending litigations was N24.861m as at 31 December 2017 (2016 :

N10,134,626).

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Not

Level 1 Level 2 Level 3 applicable Total

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

Fair value information:

The table below sets out the valuation

Non-current assets

Deferred tax assets - - - 60,543 60,543

Other intangible assets - - - 18,565 18,565

Property, plant and equipment - - - 2,955,045 2,955,045

Investment in subsidiaries - - - - -

Other investments (i) - 1,845 - - 1,845

Financial assets - FVTPL (ii) 19,792 - - - 19,792


Current assets

Inventories - - - 587,087 587,087


Trade and other receivables - - - 324,909 324,909

Other assets - - - 329,655 329,655

Cash and bank balances - - - 173,191 173,191

Non-current assets held for sale - - - - -

Total assets 19,792 1,845 4,448,995 4,470,632

Equity and liabilities

Issued share capital - - - 828,850 828,850

Retained earnings and share premium - - - 898,302 898,302

Non-controlling interests - - - 214,435 214,435

Borrowings - - - 642,922 642,922


Provisions - - - 24,861 24,861

Post employment benefits - - - 472,459 472,459

Current tax payables - - - 262,329 262,329

Trade and other payables - - - 939,665 939,665

Deferred income - - - 18,814 18,814

Bank overdrafts - - - 167,996 167,996

Total equity and liabilities - - - 4,470,633 4,470,633

(i) Upon loss of significant influence in Abex Ltd, IFRS required the measurement of the remaining shareholding of

5% as an investment at fair value. The fair value was determined by recourse to the disposal in December 2014 of

35.2% shareholding at a value determined by a professional valuation of Abex Ltd using the adjusted book value

basis. This method which the Group considered more representative of fair value than other income based

valuations, considered the net worth of Abex Ltd plus assets not recognized in the statement of financial position

plus adjustments for goodwill and revaluation of assets. The shares were sold to an existing shareholder that is

knowledgeable in the business position and dynamics of Abex Ltd. The fair value of the investment stated in the

financial statements is not expected to be remeasured in the foreseeable future.

(ii) This relates to investment in Stanbic IBTC Assets Management Ltd. The fair value is measured as on a recurring

basis as the market value of the securities in which the fund is invested less agreed management fee accruing to

the fund managers at the measurement date. Refer to Note 17 of the financial statements for more details.

Some items of property, plant and equipment were remeasured at their fair value less costs to sell. While the

measurements were in line with the provisions of IFRS 13, relevant disclosures have been made on note 9 to the

financial statements.

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Other National Disclosures

ABC TRANSPORT PLC

CONSOLIDATED STATEMENT OF VALUE ADDED


2017 2016 2017 2016

N'000 % N'000 % N'000 % N'000 %

Revenue 7,186,797 6,710,047 5,723,335 5,631,984

Other income 385,573 204,653 166,760 189,923

7,572,369 6,914,700 5,890,095 5,821,907

Bought-in-material and services:

- Local (4,163,905) (3,747,643) (3,758,175) (3,780,384)

- Imported (601,354) (1,115,132) (102,888) (87,820)

Value added 2,807,109 100 2,051,925 100 2,029,032 100 1,953,703 100

Applied as follows:-

To pay employees

- Wages,alaries and other staff costs 933,079 33 919,440 45 881,470 43 872,278 45

To pay government

- Corporate tax 253,586 9 109,219 6 89,524 4 101,527 5

To pay provider of capital

- Interest expense and similar charges 200,211 8 489,514 24 136,815 7 213,002 11

To provide for replacement of assets

dividend to shareholders and

development of business

- Deferred tax write back - - - - - - - -

- Depreciation of property, plant and

equipment 906,975 32 1,133,550 55 905,440 45 1,126,534 58

- Profit/(Loss) for the year 513,258 17 (599,798) (30) 15,783 1 (359,638) (18)

Value added 2,807,109 100 2,051,925 100 2,029,032 100 1,953,703 100

Group Company

Value added represents the additional wealth which the company has been able to create by its own and its employeees effort. The

statements shows the allocation of that wealth among the employees, capital providers, Government and that retained for creation of

more wealth.

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ABC TRANSPORT PLC

FINANCIAL SUMMARY - GROUP

31 DECEMBER 2017 2016 2015 2014 2013

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

Statement of financial position

Assets employed

Non current assets 3,055,790 3,075,669 3,853,772 4,522,213 3,891,543

Current assets 1,414,842 1,249,990 2,124,414 1,920,994 1,740,725

Total assets 4,470,632 4,325,659 5,978,186 6,443,207 5,632,268

Liabilities

Creditors within one year 1,878,492 2,613,373 3,346,668 3,425,338 2,110,940

Creditors due after one year 650,553 327,776 712,710 1,214,737 1,242,015

Total liabilities 2,529,045 2,941,149 4,059,378 4,640,075 3,352,955

Capital employed

Share capital 828,850 828,850 828,850 753,500 753,500

Share premium 575,391 575,391 575,391 582,068 582,068

Retained earnings 324,595 142,804 624,329 593,992 1,006,607

OCI Reserve (1,684) (45,534) (76,405) (67,884) (55,467)

Non-controlling interests 214,435 (117,001) (33,357) (58,544) (7,394)

Total equity and liabilities 4,470,632 4,325,659 5,978,186 6,443,207 5,632,268

Profit or loss account

Revenue 7,186,797 6,710,047 6,797,392 7,347,873 6,656,947

Cost of sales (5,568,814) (5,498,566) (5,163,809) (5,867,455) (4,991,659)

Gross profit 1,617,983 1,211,481 1,633,583 1,480,418 1,665,288

Administrative expenses (1,036,500) (1,409,015) (1,372,263) (1,506,996) (1,401,698)

Other income 385,573 204,653 444,891 220,932 515,383

Impairment losses - (8,184) (23,727) (9,883) (14,479)

Finance costs (200,211) (489,514) (387,347) (444,442) (243,158)

Profit/(loss) on ordinary activities

before tax 766,844 (490,579) 295,137 (259,971) 521,336

Income tax expense (253,586) (109,219) (163,879) (113,253) (216,258)

Profit/(loss) after taxation 513,258 (599,798) 131,258 (373,224) 305,078

Earnings/(loss) per share - basic

(kobo) 31 (36) (36) (25) 20

Earnings/(loss) per share is based on profit/(loss) after tax and the 1,657,700,000 ordinary shares of 50 kobo

each in issue at the end of each financial year.

Net assets per share is based on the 1,657,700,000 ordinary shares of 50 kobo each in issue at the end of each

financial year and net asset at the end of each financial year.

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ABC TRANSPORT PLC

FINANCIAL SUMMARY - COMPANY

31 DECEMBER 2017 2016 2015 2014 2013

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

Assets employed

Non current assets 3,014,999 3,041,185 3,840,601 4,537,195 3,902,213

Current assets 906,621 840,190 1,179,618 1,148,983 1,812,407

Total assets 3,921,621 3,881,376 5,020,219 5,686,178 5,714,620

Liabilities

Creditors within one year 1,577,686 1,826,116 2,247,088 2,466,681 2,108,861

Creditors due after one year 554,100 323,838 709,669 1,212,740 1,241,076

Total liabilities 2,131,786 2,149,954 2,956,757 3,679,421 3,349,937

Capital employed

Share capital 828,850 828,850 828,850 753,500 753,500

Share premium 575,391 575,391 575,391 582,068 582,068

Retained earnings 382,555 366,772 726,410 729,473 1,073,245

OCI reserve 3,040 (39,591) (67,189) (58,284) (44,130)

Total equity and liabilities 3,921,621 3,881,376 5,020,219 5,686,178 5,714,620

Profit or loss account

Revenue 5,723,335 5,631,984 6,083,528 6,846,024 6,636,859

Cost of sales (4,653,659) (4,698,392) (4,720,502) (5,411,190) (4,950,595)

Gross profit 1,069,676 933,592 1,363,026 1,434,834 1,686,264

Administrative expenses (1,157,665) (1,160,441) (1,211,348) (1,362,220) (1,356,636)

Other income 330,110 189,924 423,204 211,192 496,820

Impairment losses - (8,184) (23,727) (9,883) (14,479)

Finance costs (136,815) (213,002) (320,218) (414,011) (243,158)

Profit/(Loss) on ordinary activities

Profit/(Loss) before taxation 105,306 (258,111) 230,937 (140,088) 568,811

Income tax expense (89,524) (101,527) (158,650) (113,264) (213,725)

Profit/(Loss) after taxation 15,782 (359,638) 72,287 (253,352) 355,086

Earnings/(Loss) per share - basic

(kobo) 1 (22) 5 (17) 24

Earnings/(Loss) per share is based on profit /(loss)after tax and the 1,657,700,000 ordinary shares of 50 kobo

each in issue at the end of each financial year.

Net assets per share is based on the 1,657,700,000 ordinary shares of 50 kobo each in issue at the end of each

financial year and net asset at the end of each financial year.

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abc transport plc€¦ · abc transport plc consolidated statement of financial position at 31...

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