boc gases nigeria plc financial report... · finanacial statements - 31 december 2014 together with...

Annual Report and Accounts

BOC GASES NIGERIA PLC

RC 2035

BOC Gases Nigeria will delight its customersby providing safe and superior qualityproducts and services through highlymotivated people with passion forexcellence.

S - Safety firstP - Passion for ExcellenceI - Innovation for CustomersC - Commitment to IntegrityE - Empowering People

Our Core Values

Our Vision

Mission

We will be the leading gases, welding and allied products Company in the West African sub-region, admired for our people, who provide innovative solutions that make a difference to the region.

iBOC Gases Nigeria Plc Annual Reports & Accounts 2014

Shareholder’s Admission Form

June 11, 2015 at

Finanacial Statements - 31 December 2014 Together with Directors’ and Auditor’s Reports

Gases Nigeria Plc BOC

ii BOC Gases Nigeria PlcAnnual Report & Account 2014Annual Reports & Accounts 2014



iiBOC Gases Nigeria Plc

Company Profile

Company Profile

BOC Gases Nigeria plc (BOC) was incorporated in 1959 and commenced operations in 1960. The Company became listed on the Nigerian Stock Exchange in 1979. With a total number of 99 full time staff scattered across the country, the Company is the West African market leader in the supply of industrial/medical gases and welding products.

BOC has prospered by constantly meeting the needs of customers and developing solutions that add value to customers' applications. The Company is a subsidiary of The Linde Group, Germany and has several sister companies in Africa. Notable among the sister companies is African Oxygen Limited (Afrox), based in South Africa, which serves as the African regional head quarter of Linde. Two of Afrox representatives are on the Board of the Company.

BOC remains committed to achieving above average growth for its shareholders, built on the back of the company's strong brand name and national distribution network. BOC is structured and managed in accordance with The Linde's Group best practice globally. Our products offers include:

- Full range of large-volume on-site gases- Bulk CO2 and ASU- Cylinder gases (oxygen, argon, acetylene etc)- Scientific gases, refrigerants- Packaged chemicals and helium- Medical gases (oxygen, nitrous and enthonox)- Gas and Arc Welding products and ancillary safety products

Key Company data

Full name: BOC Gases Nigeria plc Number of shareholders: 8,488Registration number: RC 2035 Shares in issue: 416,244,706Year end: 31 December Market capitalization: N2,281,020,989Number of employees: 95 Sector: Chemical/Specialty chemical

The Linde Group profile

The Linde Group is a world leading gases and engineering company with over 48,000 employees working in around 100 countries worldwide. In the 2014 financial year, it achieved turnover of 17b Euro. The strategy of The Linde Group is geared towards sustainable earnings-based growth and focuses on the expansion of its international business with forward-looking products and services. The Linde Group acts responsibly towards its shareholders, business partners, employees, society and the environment. The Linde Group is committed to technologies and products that unite the goals of customer value and sustainable development. For more information, visit The Linde Group online at http://www.linde.com

Annual Reports & Accounts 2014





Board of Directors

iii BOC Gases Nigeria PlcAnnual Reports & Accounts 2014

Abiodun Olbode Alabi is a Chartered Accountant and holds B.Sc Accounting with first class Honours from Ahmadu Bello University, Zaria in 1977.

He is an alumnus of the London Business School, Oxford University, UK, Management Centre Europe Brussels and the Harvard Business School, Boston, USA.

He has experience spanning 36 years in manufacturing, banking and audit, the last being the Executive Director, Finance of the Bank of Agriculture Limited. He is currently serving on the board of several companies in the country.

Hendrik Mentz De Waal joined the Board of BOC Nigeria on his being appointed as the Cluster Manager, West Africa, Region Emerging Africa.

Prior to this appointment, he was the Managing Director of Afrox Namibia & Angola (two subsidiaries of African oxygen Ltd) from 2009 to 2013. He joined the Afrox family in 1999 from Namibia Breweries Ltd.

He had his education at Stellenbosch University with B.Comm (Accounting) and attended a management development programme with WITS University Graduate School of Business.

David Akinbola AkintolaDavid Akinbola Akintola is the Chairman, Board of BOC Nigeria. He started his career with research & Development Department of British Oxygen Company in 1970 after graduating from University of London with B.Sc (Chemistry & Zoology) and M.Sc degree in Analytical Chemistry. He was seconded to industrial Gases Limited (IGL), now BOC Gases Nigeria Plc in 1972.

He served in various capacities and become the first indigenous Managing Director/CEO in 1985, from were he retired in 2001.

Johann van RooyenJohann van Rooyen became the Managing Director of BOC Gases Nigeria in August 2014. Prior to this position, he served as the Managing Director of African Oxygen Ltd, Zambia, a subsidiary of African Oxygen Ltd, South Africa.

He joined the Afrox Group in 1984 and has served in several capacities with strings of successes and achievements to his credit.

He is an alumnus of University of the Witwatersrand, Graduate School of Business Administration and has undergone several senior managers/executive courses in South Africa.

Adeshina Alayaki CFA, FRMAdeshina Alayaki is a fellow of the Institute of Chartered Accountants of Nigeria and Chartered Institute of Stockbrokers of Nigeria. He is an Associate of Chartered Institute of Bankers. He is also a CFA Charterholder and a Certified Financial Risk Manager.

He holds a B.Sc in Banking and Finance from Ogun State University and obtained his MBA from Ahmadu Bello University, Zaria. He has undergone several finance and management development programs in Nigeria, South Africa and United Kingdom. He is an alumnus of Graduate School of Management, South Africa.

Adeshina has a total of 28 years post graduation work experience in audit, banking, capital market registrar operations, investment management and manufacturing. He is approximately 11 years old with BOC Nigeria

Jonathan Narayadoo became a member of the Board in 2013. He was previously employed by Afrox Ltd, South Africa where he worked for 33 years. During this time, Jonathan held various senior management positions and in 2009, become an Executive Director of Afrox, a company that listed on the Johannesburg Stock Exchange and served in this role until may 2013.

Jonathan was educated in South Africa and attended a Graduate Development programme at the University of Cape Town as well as Management Development program me in London. He is also an Associate of the production Management Institute of South Africa.

ivBOC Gases Nigeria Plc

NOTICE IS HEREBY GIVEN that the 56th Annual General Meeting of BOC Gases Nigeria plc will be held at the Ogun/Ondo Hall, Lagos Airport Hotel, 111, Obafemi Awolowo Way, Ikeja, Lagos State, on Thursday, June 11, 2015 at 11.00 am for the following purposes:

ORDINARY BUSINESS

st1. To receive and consider the accounts for the year ended 31 December, 2014 and the reports of the Directors, External Auditors and Audit Committee thereon;

2. To declare a dividend;

3. To re-elect Directors;

4. To approve the remuneration of the Directors;

5. To authorize the Directors to fix the remuneration of the Auditors;

6. To elect members of the Audit Committee.

NOTES:

1. PROXIESA member of the Company entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company. To be valid for the purposes of the meeting, the enclosed Proxy Form must be stamped by the Commissioner of Stamp Duties and deposited at the office of the Registrar, All Crown Registrars Limited, 190, Ikorodu Road, Lagos, not less than 48 hours prior to the time of the meeting.

2. DIVIDEND WARRANTS

If the dividend recommended by the Directors is approved, dividend warrants will be posted on Monday, June 15, 2015 to those shareholders whose names are registered in the Company's Register of Members at the close of business on Thursday May 14, 2015.

3. CLOSURE OF REGISTER AND TRANSFER BOOKSThe Register of Members and Transfer Books of the Company will be closed from Friday, May 15, 2015 to Friday, May 22, 2015, both dates inclusive, for the purpose of determining those entitled to the dividend being proposed.

4. AUDIT COMMITTEEAny member may nominate a shareholder as a member of the Audit Committee by giving notice, in writing, of such nomination to the Secretary of the Company, at least 21 days before the date of the AGM.

BY ORDER OF THE BOARD

G. E. ORISEHSECRETARYLAGOS, NIGERIA19 March, 2015

Notice of Annual General Meeting






v BOC Gases Nigeria Plc

Executive Management


Johann van Rooyen Managing Director

Adeshina Alayaki CFA, FRMFinance Director

Enyinnaya OgbonnayaHead Operations & Engineering

Siji OluwunmiHead Human Resources

Bukola PopoolaRegional Manager Sales & Marketing (North & West)

Bolaji AdisaHead Supply Chain

viBOC Gases Nigeria Plc




Kasali BelloHead SHEQ

Michael AkinduroHead Distribution Logistics

Charles ChigboluRegional Head Sales & Marketing (South)

Martins EsinuloHead Business Development



1 BOC Gases Nigeria Plc

Page

Corporate information 2

The year at a glance 3

Chairman’s Statement 4

Managing Director’s Review 7

Directors’ report 9

Statement of directors’ responsibilities 16

Report of the Audit Committee 17

Independent Auditor’s report 18

Statement of financial position 19

Statement of profit or loss and other comprehensive income 20

Statement of changes in equity 21

Statement of cash flows 22

Notes to the financial statements 23

Additional information 55


Contents



2BOC Gases Nigeria Plc

Registration number: RC 2035

Board of directors: Name

Mr David Akinbola Akintola - ChairmanMr Johann van Rooyen (South African) - Managing DirectorMr Abiodun Olabode Alabi - Non-executiveMr Jonathan Narayadoo (South African) - Non-executiveMr Hendrik Mentz De Waal (South African) - Non-executiveMr Adeshina Alayaki - Finance Director

Company Secretary: G E Oriseh

Registered office: Plots 1-3, Block HOshodi Industrial EstateOshodiLagos State

Registrar: All Crown Registrars LimitedRegistrar’s Department180 Awolowo RoadIkoyiLagos

Auditor: KPMG Professional ServicesKPMG TowerBishop Aboyade Cole StreetVictoria IslandLagos Tel: (01) 2718955www.ng.kpmg.com

Bankers: Guaranty Trust Bank PlcStandard Chartered Bank Nigeria LimitedZenith Bank PlcRand Merchant Bank Nigeria LimitedUnited Bank For Africa

Members of the AuditCommittee: Rev P O Oyebanjo - Chairman

Mr Abiodun Olabode AlabiMr Peter OkohMr Hendrik Mentz De Waal (South African)

Corporate Information



2014 2013 % increaseN'000 N'000 /(decrease)

Revenue 2,212,896 2,091,618 6

Results from operating activities 288,238 324,046 (11)

Profit before income tax 307,923 380,322 (19)

Income tax expense (82,322) (117,565) (30)

Profit for the year 225,601 262,757 (14)

Total comprehensive income for the year 225,601 262,757 (14)

Declared dividend during the year* 41,624 83,249 100

Share capital 208,122 208,122 -

Total equity 2,016,703 1,823,426 11

Number of 50 kobo ordinary shares issued 416,244,706 416,244,706

Per 50k share data

Basic earnings per share (kobo) 54 63

Dividend per share:

- Declared during the year 10k 20k

- Bonus shares - -

Proposed dividend:

- Cash 10k 10k

Net assets per share (Naira) 4.89 4.38

Stock exchange quotation at end of year N5.48 N6.33

Market capitalisation at end of year (N: '000) 2,281,021 2,634,829

* Dividend declared during the year represents the dividend proposed during the preceding year and approved by the shareholders for payment in the current year.

The Year at a Glance







Distinguished shareholders, I welcome you to the 56th Annual General Meeting of your company. It is my pleasure to report on our 2014 performance amidst a volatile, uncertain and a rapidly changing global and local environment, unforeseen a decade ago.

The global economy's marginal growth of 2.6% in 2014 (2013 :2.5%) was largely due to sustained improvement in the US and Chinese economies. The US economy was reported to have grown by 2.4% while that of China grew by 7.4% (the lowest rate in the past three decades of an average growth of 10% p.a.).The world economy was jolted by the steep drop in the crude oil price which crashed from above US$100/barrel to below US$50/barrel. OPEC member countries with low Forex external reserves such as Nigeria have since witnessed significant exchange rate volatility, increasing the risk of an economic recession. The discovery and large scale production of shale oil, significant reserves of crude oil, and slowdown in China's economic growth coupled with OPEC members maintaining production quotas are only some of the factors that will determine the future of the global economy.

On the home front, the Nigerian economy, being largely dependent of Forex from crude oil experienced a significant revenue reduction and consequently resulted in the devaluation of the national currency by over 25% at the end of 2014. Government's strong defense of the national currency depleted external reserves from the US$43.6b at the beginning of 2014 to US$34.4b by year-end. Though the external reserves declined, the nation posted a GDP increase of 6.96% against the previous year's growth rate of 5.4%. Crude oil production was reported to average only 1.8 million barrels per day partly due to leakages. For the second year running, appropriate government economic policies during 2014 ensured single digit inflation average of 8%. Insurgence activities in the far North and ethnic violence in the Middle Belt of the country continue to pose serious security challenge. As a consequence, many thousands of lives were lost in the process and businesses were negatively impacted by this. Approximately 6% of BOC Nigeria's operations were affected and the majority of - customers reduced their business activities in that area. Apart from the real impact on our business, we are also concerned about the safety and security of our employees and properties in that area. We are pleased to note that government's security efforts are yielding results and normalcy is expected to return to the affected areas very soon

The spate of kidnappings and militancy in the Niger Delta has almost disappeared when compared to 2009, following the granting of amnesty to the Niger Delta militants in 2009 by the Federal Government of Nigeria. However, theft from oil pipelines continues to impact the country's daily crude oil production outputs.

The political scene witnessed the emergence of a unified opposition in 2013 which continued during 2014 and was marked by defections and re-alignments in preparation for the 2015 general elections. It is pleasing to note that this has not resulted in any constitutional or general crisis. We witnessed only minor skirmishes which usually characterize politics in this part of the world.

Competition in the Nigerian gases market intensified in 2014 as new entrants continue to enter the market creating additional capacity. As a result of the difficult economic environment many gas suppliers are forced to re-asses their strategies and find ways to reduce costs as a means to compensate for the reduced demand for their products. Market intelligence reports indicate there are now more than 50 industrial gases production companies operating in Nigeria.

The unsafe and unethical filling of BOC cylinders, and passing same off as BOC products, continues to pose a threat to our reputation and brand. The absence of regulation with regards to standards and enforcement remains supportive of sub-standard filling and selling of gases. In line with The Linde Group policies, BOC Gases Nigeria continues to comply with global standards with regards to safety and quality standards of products. We continue to lobby relevant authorities and industry bodies to put in place and enforce internationally recognized regulations to avoid the inevitable tragedies associated with unregulated markets.

OPERATING RESULTS Despite the harsh economic conditions, revenue in 2014 rose to N2.21billion from the N2.09billion of 2013. Profit for the year, after tax, was at N225.6 million, down from N262.7 million in 2013. Significant adjustments of slow moving/obsolete stock, bad debts and increases in the cost of natural gas not recoverable from customers all negatively impacted profit performance by over N100m. Furthermore, the effect of the backward integration by major customers in one of the key segments is having an ongoing negative impact on performance.

Chairman's Statement





PROPOSED DIVIDENDThe Board recommends for your approval the payment of dividend of 10 Kobo per 50 Kobo ordinary share held This will be subject to the deduction of the relevant withholding tax for shareholders whose names appear in the company's Register of Members at the close of business on Thursday, May 14, 2015. This translates to the sum of =N=41.6m.

THE BOARD OF DIRECTORSFour regular Board meetings were held during 2014. At these meetings, the Risk Committee's reports were reviewed in order to update members about the risks and opportunities facing the company. Additional reports from the Executive members, highlighting current business developments as well projections into the future, served as good input to Board decisions.

At the end of July 2014, Johnson Idowu retired as the Managing Director after forty two and a half (42.5) years of meritorious service. He has since been succeeded by Johann van Rooyen, on international transfer from African Oxygen Zambia where he was the Managing Director and was responsible for significant improvements in the profitability and growth of that business. Mr. Johann van Rooyen has been with The Linde Group for 30 years. Please join me in welcoming Mr. Johann van Rooyen to the Board.

There were no conflicts of interest involving any Board member during the period under review.

Whatever has a beginning must also have an end. At the end of this Annual General Meeting, I shall be bowing out of the company after forty three years of service (29 years spent as full time employee of which I served 15 years as the Executive Managing Director and 14 years as Chairman of the Board). I am happy to be leave behind a strong company, which is well positioned to take advantage of business opportunities in the most attractive market in Africa.

CUSTOMERS, DISTRIBUTORS, AGENTS AND SUPPLIERSIn the current dispensation where loyalty is rare, we must give kudos to our loyal customers, re-sellers, agents and suppliers who are responsible for the modest results achieved in 2014. Though profit after tax declined by 14%, the patronage of our key customers, and the new ones developed during the year, cannot be over emphasized. We wish to assure our shareholders that we are committed to improving strategic alliances which have been formed with our customers, resellers, agents and suppliers.

HUMAN RESOURCESOur employees remain our greatest asset and, despite the fierce competition and difficult business environment, our 2014 results attest to this. We will continue to invest in our people through training available both locally and abroad. Employees are also encouraged to further their education, knowledge, skills and aptitude in various areas of our operations.

SAFETY, HEALTH, ENVIRONMENT AND QUALITY (SHEQ)In BOC Nigeria, we place SHEQ above all economic interest and as a member of The Linde Group we regularly invite international SHEQ monitors to assess our sites. These assessments provide independent and objective reports on our SHEQ activities and supplement our own internal audits.

SHEQ forms the basis of your company's operations. We invest substantial amounts of time and effort to live our principle: SHEQ is 100% of our behavior, 100% of the time. Safety risks are regularly assessed, controlled and effectively managed and good housekeeping is maintained at all sites and depots.

We are delighted to once again report there were no major incidents during the year for the eight consecutive year following The Linde Group's recognition of our company's achievement of a million accident-free hours at all our sites is a significant achievement.

Being an ISO certified company and a member of The Linde Group, we have continued to make quality our watchword and our customers attest to this.

CORPORATE SOCIAL RESPONSIBILITY (CSR) - USEMIGENEThe company demonstrated its commitment to being a socially responsible corporate citizen through the involvement and caring for the less privileged in our society. We also donated materials to the less privileged in 2014. The Company is






Constantly reviewing additional areas such as providing scholarships and other means through which to contribute to uplifting the communities in which we operate.

FUTUREWe have confidence in Nigeria's economic future, the largest economy in Africa with huge future potential. Foreign direct investment continues to flow into the country to exploit business opportunities. The International Monetary Fund and the World Bank project GDP growth of above 5% in 2015 for Nigeria.

The various reforms in the oil and gas, agriculture and power sectors have sustained the GDP above 6% and will likely continue barring unforeseen circumstances.

In the third quarter of last year, we commissioned the most modern and technologically advanced Air Separation Unit (ASU), in the country at Port Harcourt to meet the demand in the oil and gas industry. In spite of the decline in the fortune of the oil and gas industry and political uncertainties, we achieved our business case revenue target for the project. By the time we are having this Annual General Meeting, the installation of ASU compression facilities on the same Port Harcourt site would be well advanced. This investment is expected to increase our market share and further confirm the leadership status of your company in the gases industry. Further potential capital investments that can generate acceptable returns and drive performance are currently receiving attention.

The support of our sister companies in the United Kingdom and South Africa, with regard to special gases, continues to yield the desired results. We plan to continue to fulfill our obligations and consolidate our efforts in this regard.

The Board is pleased to confirm that your company will continue to be active in the West African market in 2015 and beyond.

CONCLUSIONNotwithstanding the challenges of inadequate infrastructure, multiple taxes from government, and high operating costs, your company remains the only listed gases company in Nigeria with the leading market share, offering a broad range of gases to its valued customers.

Management will continue to focus on developing new revenue streams and aggressively market existing and new products, improve service delivery, reduce overheads, and develop/introduce new and innovative offers. These activities, we believe, will support your company's drive to maintain its leadership position in the market and improve shareholder value in 2015.

I wish to sincerely thank the members of the Board of Directors, management and our employees for their personal dedication and continued support.

On behalf of the Board, management and employees of the company, I also thank our valued customers, resellers, suppliers and you, our shareholders, for your support in 2014. Our focus remains to exceed your expectations, provide good returns on your investments and also to contribute to the growth of our nation, Nigeria.

Finally, , I wish to express my profound gratitude to the Board, employees, resellers, suppliers' and others who in one way or the other have supported me throughout all these years. Thank you.

Mr. D.A. AkintolaChairman






INTRODUCTIONThe year 2014 was characterized by a set of mixed results for your Company. Aggressive and sustained efforts throughout the year paid off in terms of sales which grew by 6%. Growth was achieved despite a reduction in price of one of our key products in order to stimulate demand and improve competitiveness. We focused on generating increased volumes and dedicated significant attention to those segments of our business where we have a competitive edge in the market. We gained six new customers who are key players in the oil and gas sectors subsequent to the commissioning of our Air Separation Unit (ASU) in Port-Harcourt.

The greatest challenge of 2014 was the cost increases experienced in many parts of the business including significant energy cost increases. Costs could not be fully recovered through pricing due to increased competition and a subdued demand for our products. The situation was further exacerbated when the Naira was devalued in the last quarter of the year. As a result of mergers and acquisitions and backward integration within the beverage sector over the past four years, we lost two key customers in 2014. The commissioning of our new ASU plant also presented challenges of increased and militant demand for financial support from our host community in Port-Harcourt.

Our strategy of being increasingly customer focused and the development of new customers and products improved sales in 2014. We intend building on the successes of 2014 to support our vision of being the preferred gas supplier in Nigeria, recognized for our value added safety and quality products MANUFACTURING INDUSTRY REVIEWManufacturers' woes continued unabated in 2014 as challenges in infrastructure and energy their toll on businesses. Since Q4 of 2013, your Company self-generates electricity and has since overcome the inadequacy of power supply in the country. However, we are currently faced with paying for expensive natural gas and maintenance spares due to the Naira devaluation.

The deteriorated road network has long been a hindrance to cost-effective transportation of goods however, with governments' plans to deal with this, there is an expectation that 2015 will be better. Once completed, road improvements are expected to ease inter-state distribution of products to our branches and customers as well as reduce the cost of repairs and maintenance of our distribution fleet.

Our Company was charged multiple illegal taxes and levies despite several publications of the Joint Tax Board on applicable taxes in the Nigeria statute books. Various taxes and levies are raised by local governments, outside the legally approved taxes and levies, and failure to pay usually results in offices being shut and distribution vehicles being impounded. The exploitation and extortion of local government “sticker boys” continue unchecked.

The devaluation of the Naira by over 25% had a negative impact on many manufacturers who are now faced with huge debts due to their foreign currency obligations... FINANCIAL RESULTSIncreased energy costs that could not be passed on to customers, write off of bad debts, obsolete and slow moving stocks negatively impacted profitability despite the 6% growth in sales. Revenues grew to N2.2b in 2014 against N2.09b in the previous year. Profit after tax declined by 14% from N262.7m in 2013 to N225.6m in 2014.

The decrease in cash and cash equivalents was mainly due the N1b expended on the new ASU plant in Port-Harcourt. A total of N1.2b was spent on the plant and I am pleased to report that your Company internally financed N1billion while the balance of N0.2billion was financed through the bank. Gearing remains low and improves our credit worthiness for accessing external finance to undertake growth projects in 2015 and beyond. The Board's priority is to maximize shareholder wealth and during 2014 shareholder equity grew by 10.6%

Management will continue to focus on growing sales, reducing overheads, introducing new product and service innovations, developing new markets and improving logistics. These activities and others will no doubt improve future performance.

BUSINESS OUTLOOKNigeria's growth prospects are acknowledged widely within and outside the country. It remains a favourite with foreign direct investors especially since the rebasing exercise done in 2014 which showed the country as the largest economy in Africa. Foreign Direct Investments continue to flow into the various sectors of the economy and is expected to continue into the future notwithstanding the current challenges in the oil and gas sectors. We expect some turnaround in the oil and gas

Managing Director's Review





Sector and additional investments in telecommunication. The various reforms in energy and agricultural sectors are also expected to contribute to the country's economic growth on a sustainable long term basis.

At BOC Gases, we aim to position ourselves by strengthening our internal capabilities, enhancing our market position and improving strategic alliances with our partners. We remain optimistic and committed to delighting our customers with our quality products, and dedicated employees. We believe these will further consolidate our leadership position in the gas industry.

As a dynamic entity, we continuously look for opportunities to increase shareholder value. We believe in the future of BOC Gases Nigeria Plc and we are positive of its sustainable growth prospects especially with the appropriate investments. Our main concern remains political risk and we are confident that political solutions will be found.

CONCLUSIONOur performance in 2014 was made possible with the support of all our stakeholders. And as such, I wish to thank my colleagues on the Board, management and staff, our suppliers and, above all, our customers.

Johann Van RooyenManaging Director

Managing Director's Review




For the year ended 31 December 2014

The directors present their annual report on the affairs of BOC Gases Nigeria Plc (“the Company”) together with the financial statements and the auditor's report for the year ended 31 December 2014.

1 Legal statusBOC Gases Nigeria Plc ("the Company"), a public company quoted on the Nigerian Stock Exchange in 1979, was incorporated as a public limited liability company on 12 November 1959 under the name Industrial Gases (Nigeria) Limited. The name was changed on 10 July 1961 to Industrial Gases Limited and thereafter to BOC Gases Nigeria Plc on 17 March 1997. The Company is a subsidiary of BOC Holdings Limited, U.K., which holds 60% interest in the equity of BOC Gases Nigeria Plc. BOC Holdings Limited, U.K. is a subsidiary of Linde AG, Germany, the ultimate holding company. The Company's registered office address is Plots 1-3, Block H, Oshodi Industrial Estate, Oshodi, Lagos.

2 Principal activitiesThe Company engages in the manufacture of industrial and medical gases and the sale of special gases, welding and medical equipment.

3 Operating results The following is a summary of the Company’s operating results:

2014 2013N'000 N'000

Revenue 2,212,896 2,091,618Results from operating activities 288,238 324,046Profit before income tax 307,923 380,322Profit for the year 225,601 262,757Total comprehensive income for the year 225,601 262,757Retained earnings 1,808,581 1,615,304

4 DividendThe directors have recommended for approval the payment of a dividend of 10k (2013: 10k) per share on the issued share capial of 416,244,706 (2013: 416,244,706) shares of 50k each, before deduction of withholding tax.

5 Directors and their interests

(a) The directors who served during the year and their interests in the shares of the Company are as follows:

Date Interest in the ordinary appointed/(resigned) shares of the Company

Name 2014 2013No. of shares No. of shares

Mr David Akinbola Akintola - Chairman 19,185 19,185Mr Johnson Adeyi Idowu - Managing Director (31 July 2014) 232,537 232,537Mr Abiodun Olabode Alabi 16,326 16,326Mr Adeshina Alayaki Nil NilMr Jonathan Narayadoo (South African) Nil NilMr Hendrik Mentz De Waal (South African) Nil NilMr. Johann van Rooyen - Managing Director 23 August 2014 Nil Nil

Other than as disclosed above, the directors do not have any other interests required to be disclosed under section 275 of the Companies and Allied Matters Act of Nigeria.

(b) In accordance with section 277 of the Companies and Allied Matters Act of Nigeria, none of the directors has notified the Company of any declarable interests in contracts with the Company.

Directors’ Report

9 BOC Gases Nigeria PlcAnnual Reports & Accounts 2014




(c) In accordance with article 90 of the Company's Article of Association, Messrs Abiodun Olabode Alabi and Mr Adeshina Alayaki retired and, being eligible, offer themselves for re-election.

6 Responsibilities of the directors for internal controlThe Board retains full responsibilities for the overall direction and control of the Company. The directors are responsible for the Company’s system of financial internal control and for monitoring effectiveness. They are also responsible for taking such steps as are reasonably available to safeguard the assets of the Company and to prevent and detect fraud and irregularities.

The directors believe that intelligent risk taking is an important element of the Company's entrepreneurship approach. This means that the business risks need to be managed by applying effective controls. Management is responsible to the Board for the identification and measurement of risks and to confirm that effective systems of controls are in place and that appropriate corrective action is taken.

Systems of internal controls can provide only reasonable, not absolute assurance against material misstatement or loss. Systems of internal control exercised by the Board include:

i. Delegating authority to management within defined areas of responsibility;

ii. Receiving regular reports from management on financial performance and other issues;

iii. Ensuring that a continual assessment is made of all risks and that appropriate measures are taken to mitigate the impact of those risks; and

iv. Maintaining and directing an effective and independent internal audit function, receiving reports of findings as well as taking action thereon.

7 Records of directors' attendanceFurther to the provisions of section 258(2) of the Companies and Allied Matters Act of Nigeria, the records of directors’ attendance at Board meetings during the year under review is available at the Annual General Meeting for inspection.

8 Substantial shareholdingThe fully paid shares of the Company as at 31 December were beneficially held as follows:

2014 2013No. of shares % No. of shares %

BOC Holdings Limited, U.K. 249,746,823 60 249,746,823 60TY Holdings Limited 48,473,212 12 48,473,212 12Nigerian Citizens and other associations 118,024,671 28 118,024,671 28

416,244,706 100 416,244,706 100

No other shareholder, except as disclosed above, held more than 5% of the issued share capital of the Company at 31 December 2014.

9 Property, plant and equipmentInformation relating to changes in property, plant and equipment is given in Note 13 to the financial statements.

10 Gifts and donationsThe Company made donations or charitable contributions amounting to N100,000.00 to Optimal Children's Home (Orphanage) Magodo, Lagos during the year (2013:Nil).

Directors’ Report





In compliance with section 38(2) of the Companies and Allied Matters Act of Nigeria, the Company did not make any donation or gift to any political party, political association or for any political purpose in the course of the year under review (2013: Nil).

11 Business review and future developmentThe Company intends to continue fulfilling its objectives as stated in its Memorandum and Articles of Association.

12 Major distributorsThe Company has a network of distributors and agents throughout Nigeria in order to ensure that its products are brought as close as possible to end-users. The major agents during the year include N.I. Abbe-Ketu, B. Sanyaolu -Abeokuta, D.A. Olaleye-Abuja, Gregory Emakpor- Benin, Z.O Salami-Ilorin and S.O. Adeniyi-Akure.

13 SuppliersThe Company procures materials (mainly engineering spare parts, liquid gases and welding equipment) from BOC Holdings Limited, U.K., which is its parent company and African Oxygen Limited, South Africa, which is a fellow subsidiary to BOC Holdings Limited, U.K.

The Company’s major local suppliers are Orbit Maritime Limited, Kingword Tech Services, Central Horizon Gas Co Limited, Mantrac Nigeria Limited and Gaslink Nigeria Limited.

14 Employment and employees

(a) Employment of physically challenged personsIt is the policy of the Company that there is no discrimination in considering applications for employment including those of physically challenged persons.

The Company had no physically challenged person in its employment as at 31 December 2014 (2013: one).

All employees, whether or not physically challenged, are given equal opportunities to develop their experience and knowledge and to qualify for promotion in furtherance of their careers. In the event of members of staff becoming physically challenged, every effort is made to ensure that their employment with the Company continues and that appropriate training is arranged. It is the policy of the Company that the training, career development and promotion of physically challenged persons should, as far as possible, be identical to that of other employees.

(b) Health and safety at work and welfare of employeesHealth and safety regulations are in force within the Company’s premises and employees are aware of existing regulations. To this end, the Company has various forms of insurance policies, including workmen’s compensation and group life insurance, to adequately secure and protect its employees.

(c) Employees' involvement and trainingThe Company places considerable value on the involvement of its employees and has continued its practice of keeping them informed on matters affecting them as employees and on the various factors affecting the performance of the Company.

Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.

Training is carried out at various levels through in-house and external courses.

Management, professional and technical expertise are the Company’s major assets and the Company has continued the investment in developing such skills.

(d) Dissemination of informationIn order to maintain shared perception of our goals, the Company is committed to communicating information to employees in as fast and effective a manner as possible. The Company considers this critical to the maintenance of team spirit and high employee morale.

Directors’ Report





15 Corporate GovernanceBOC Gases Nigeria Plc remains committed to ensuring that fair, honest and understandable business practices are integrated into the organizational culture. Sound corporate governance is a way of life within the Company and best practices are followed.

Governance principles are incorporated into all Company’s structures, systems and policies which are constantly reassessed and reviewed to ensure that continuous compliance and best practice is adhered to.

BOC Gases Nigeria Plc continues to implement the corporate governance rules of the Securities and Exchange Commission as well as those of The Nigerian Stock Exchange.

(a) The BoardThe Board of Directors is responsible for setting the direction of the Company by establishing strategic objectives and key policies. The Board monitors compliance with the approved policies and achievements against objectives through quarterly performance reporting and budget updates.

Board meetings are held formally four times a year and ad-hoc meetings are arranged as necessary. Where directors are unable to attend any particular Board meeting, they communicate comments they may have regarding the agenda and general items to the committee Chairperson to be raised at the relevant meeting.

The agenda and relevant supporting documents are distributed to the directors well before each Board meeting. During the meeting, the appropriate executive director explains and motivates business items where decisions are required. The directors have unrestricted access to all Company information and records.

The attendance schedule for the year is on Note (e) below.

(b) Composition of the BoardThe Board is made up of four (4) non-executive directors (including the Chairman), and two (2) executive directors:

Four non-executive directors Two executive directorsDavid Akinbola Akintola – Chairman Johann van Rooyen – Managing DirectorAbiodun Olabode Alabi Adeshina Alayaki - Finance DirectorJonathan NarayadooHendrik Mentz De Waal

(c) The Chairman and Managing DirectorThe roles of the Chairman and the Managing Director are separate to ensure a balance of power and authority, so that no individual has unfettered powers in decision making.

The Chairman has no executive functions, but provides overall leadership of the Board. He, in conjunction with other non-executive directors, monitors and evaluates the performance of the Managing Director to ensure that the strategic and operational objectives of the Company are achieved.

(d) Rotation of directors and confirmation of new appointmentsAt the Annual General Meeting to be held on 11 June 2015, shareholders will be asked to confirm the reappointment of Messrs. Abiodun Olabode Alabi and Adeshina Alayaki who will retire in accordance with the Company’s Articles of Association but who, being eligible have offered themselves for re-election.

(e) Board committeesWhile the Board remains accountable and responsible for the performance and affairs of the Company, it delegates to management and Board committees certain functions to assist it to discharge its duties properly. Each Board committee acts within agreed, written terms of reference. The Chairman of each Board committee reports and provides minutes of committee meetings at scheduled Board meetings.

Directors’ Report





Directors’ Report

The Board committees’ chairmen and members are non-executive directors. The executive directors attend Board committee meetings by invitation. The established Board committees are shown below:

Committee Purpose Composition Meetings

Statutory AuditAbiodun Olabode Alabi The committee’s functions are as stated in Two non- Meet threeHendrik Mentz De Waal section 359 (6) of the Companies and Allied executive times a year

Matters Act. directors RemunerationAbiodun Olabode Alabi Determines and makes recommendations Two non- Meet twoJonathan Narayadoo to the Board on the framework, policy, executive times in a year

costs of executive and senior management directorsremuneration. Determines and recommends the executive directors and other senior employees are adequately remunerated.

Reviews and advises on the general principles under which compensation, training, succession plans and performance management are applied to senior employees of the Company.

RiskAbiodun Olabode Alabi Monitors and reviews the Company’s policies, Three non- Meet fourHendrik Mentz De Waal practices, risks, compliance with corporate executive times in a yearJonathan Narayadoo governance principles and regulations. Directors

Details of directors’ attendance at the Board and committee meetings are set out below:

Remuneration Risk Board Audit Committee Committee Committee

Number of meetings held (4 meetings) (3 meetings) (2 meetings) (4 meetings)during the financial period Dates: Mar 27, Dates: Mar 25 & Dates: Mar 25, Dates: Mar 26,

June 25, Oct 15 & Oct 15 & Dec Oct 14, June 24, Oct 14Dec 10 2014 09, 2014 2014 & Dec 09, 2014

David Akinbola Akintola** 4 N/A N/A N/A (Johnson Adeyi Idowu) 2 - 1 - Johann van Rooyen 2 - 1 - Abiodun Olabode Alabi** 4 3 2 4Adeshina Alayaki 4 - - - Hendrik Mentz De Waal** 3 2 - 3Jonathan Narayadoo** 4 1 2 4

** Non-executive director

Note: Name in bracket is the Managing Director that retired during the year.

(f ) Performance assessmentDirectors are required to dedicate sufficient time to be able to monitor, evaluate and comment effectively to the Board and management on the financial and operational information supplied to the Board.





(g) Employee relations Encouragement of employee participation is a high priority. The Company has adopted several participating structures on issues that affect employees. License to work ensures every employee is competent in his/her job within specific time frames. Learning needs are identified through the development of competency profiles for specific jobs.

(h) Going concern The directors, having considered all relevant factors, are of the opinion that the annual financial statements have been prepared on a going-concern basis. They believe that the Company has adequate resources in place to continue in operation for the foreseeable future.

(i) Code of ethicsInextricably linked to good corporate governance is the Company’s code of ethics. The Company has always espoused the highest ethical standards of business conduct and full compliance with applicable laws, regulations and industry standards.

The Company aims to earn the trust of customers, shareholders, colleagues, suppliers and communities through honesty, performance excellence, good corporate governance and accountability. The Company expects people to respect confidential information, Company time and assets. The Company believes in open and honest communication, fair treatment and equal opportunities.

Guiding principles or core values within the code define our responsibilities towards, and what we expect from:

- Directors- Employees- Local communities and the public - Customers, suppliers and markets; and - Shareholders

Allegiance to the code of ethics is the starting point from which employees draw inspiration and guidance for behaviour within a group, society or the organization. An integrity line has been established to enable employees to report contraventions of the code of ethics.

(j) Social responsibilityThe Company has a strong culture of social responsibility. The objective is to assist wisely and constructively thereby making a sustainable difference.

(k) Risk managementRisk management has been further embedded in daily activities of the Company throughout 2014, and now includes, but is not limited to, quarterly review of top risks faced by the Company and progress on mitigation plans.

(l) Internal controls Management maintains accounting records and has developed systems designed to provide assurance as to the integrity and reliability of the financial statements. Responsibility for the adequacy and operations of the systems is delegated to the executive directors. These records and systems are designed to safeguard the Company’s assets and minimize fraud.

Our systems of internal control are based on organizational structures, such as written policies and procedures, which include budgeting and forecasting disciplines and the comparison of actual results against these budgets and forecasts.

(m) Internal auditA centralized, South Africa-based, internal audit department renders independent, objective audit and consultation services geared towards creating added value and improving business processes. It helps the Company to achieve objectives by assessing and helping to improve the effectiveness of risk management, control mechanisms and the management and monitoring of processes through a systematic and targeted approach. The department is part of The Linde Group’s global internal audit function.

Directors’ Report





Internal audit follows a risk-based approach and utilizes the Company’s enterprise-wide risk assessment, as one of many contributors to their annual risks assessment, before arriving at their audit work plan for the year. The internal audit department focuses on six core audit functions, namely:

- Standard reviews, financial and operational processes;- IT reviews; this role is conducted by the special auditors from the global function;- Special reviews, as requested by the Audit Committee members or executive management;- Projects, conducted as part of the controlling shareholder initiative and aligned to the Company's risk assessment;- Self-assessments, conducted on a periodic basis; and- Integrity line, conducting fraud investigations on cases reported to the independent ethics hotline.

The Head of Internal Audit attends all Audit Committee meetings where all findings are presented. The Internal Audit department is guided by a comprehensive audit manual as developed by the global function.

16 Independent auditorsKPMG Professional Services served as the Independent Auditors during the year under review. The Independent Auditor’s Report was signed by Oluwafemi O. Awotoye (Mr.), ACA, a Partner in the Firm.

In accordance with section 357(2) of the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004, KPMG Professional Services have indicated their willingness to continue in office as Independent Auditors to the Company.

BY ORDER OF THE BOARD

Lagos, Nigeria G E Oriseh19 March 2015 FRC/2014/ICAN/00000006708

Company Secretary

Directors’ Report





The directors accept responsibility for the preparation of the annual financial statements set out on pages 19 to 54 that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies and Allied Matters Act of Nigeria and the Financial Reporting Council of Nigeria Act, 2011.

The directors further accept responsibility for maintaining adequate accounting records as required by the Companies and Allied Matters Act of Nigeria and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error.

The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the Company will not remain a going concern in the year ahead.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

_____________________________ _____________________________Mr Adeshina Alayaki (Finance Director) Mr Johann van Rooyen (Managing Director)FRC/2013/ICAN/00000000939 FRC/2015/IODN/0000001103519 March 2015 19 March 2015

Statement of Directors’ Responsibilities in Relation to the Financial Statements for the year ended 31 December 2014





To the members of BOC Gases Nigeria Plc

In accordance with the provisions of section 359(6) of the Companies and Allied Matters Act Cap C20 Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council of Nigeria Act, 2011, we, the Members of the Audit Committee of BOC Gases Nigeria Plc, having carried out our statutory functions under the Act, hereby report that:

(a) the accounting and reporting policies of the Company are in accordance with legal requirements and agreed ethical practices;

(b) the scope and planning of the audit for the year ended 31 December 2014 are satisfactory;

(c) having reviewed the independent auditor's memorandum of recommendations on accounting procedures and internal controls, we are satisfied with management responses thereon.

Finally, we acknowledge the co-operation of management and staff in the conduct of our duties.

Members of the Audit Committee are:

1) Rev P O Oyebanjo (Shareholders' representative) - Chairman2) Mr Peter Okoh (Shareholders' representative) - Member3) Mr Abiodun Olabode Alabi (Directors' representative) - Member4) Mr Hendrik Mentz De Waal (South African) (Directors' representative) - Member

The Company Secretary serves as the Secretary to the Committee.

Oyebanjo Peter OlatunjiFRC/2014/NIM/0000000855519 March 2015

Report of the Audit Committee





1954.




As at 31 December

Notes 2014 2013N'000 N'000

Property, plant and equipment 13 2,250,364 1,416,288Prepayments 14 12,191 2,500Total non-current assets 2,262,555 1,418,788

Inventories 15 219,732 267,821Trade and other receivables 16 384,137 319,618Current tax assets 17 97,135 102,113Prepayments 14 40,218 56,768Cash and cash equivalents 18 414,775 722,171Total current assets 1,155,997 1,468,491

Total assets 3,418,552 2,887,279

Share capital 19 208,122 208,122Retained earnings 1,808,581 1,615,304 Total equity 2,016,703 1,823,426

Loans and borrowings 21 122,045 - Employee benefit obligation 22 15,305 18,149Deferred tax liabilities 23 329,626 262,992Total non-current liabilities 466,976 281,141

Current tax liabilities 11(c) 5,529 92,603Trade and other payables 24 816,084 644,071Loans and borrowings 21 60,494 - Deferred income 25 52,766 46,038 Total current liabilities 934,873 782,712

Total liabilities 1,401,849 1,063,853

Total equity and liabilities 3,418,552 2,887,279

Approved by the Board of Directors on 19 March 2015 and signed on its behalf by:

................................) Mr David Akinbola Akintola (Board Chairman) FRC/2013/IODN/00000003155

................................) Mr Johann van Rooyen (Managing Director)FRC/2015/IODN/000000011035

................................) Mr Adeshina Alayaki (Finance Director) FRC/2013/ICAN/00000000939

The notes on pages 23 to 54 are an integral part of these financial statements.

ASSETS

EQUITY

LIABILITIES

Statement of financial position





Statement of profit or loss and other comprehensive income

For the Year Ended 31 December

Notes 2014 2013N'000 N'000

Revenue 5 2,212,896 2,091,618 Cost of sales 8 (1,026,116) (919,458)Gross profit 1,186,780 1,172,160 Other income 6 40,365 957 Selling and distribution expenses 8 (464,977) (432,572)Administrative expenses 8 (473,930) (416,499)Results from operating activities 288,238 324,046

Finance income 7 20,884 56,276 Finance expenses 7 (1,199) - Profit before income tax 9 307,923 380,322

Income tax expense 11(a) (82,322) (117,565)Profit for the year 225,601 262,757

Other comprehensive income, net of income tax - -

Total comprehensive income for the year 225,601 262,757

Basic earnings per share (kobo) 12 54 63


Other comprehensive income

Earnings per share






Attributable to equity holders of the CompanyShare Retained Total

capital earnings equityNotes N'000 N'000 N'000

Balance at 1 January 2014 208,122 1,615,304 1,823,426

Profit for the year - 225,601 225,601 Other comprehensive income - - - Total comprehensive income for the year - 225,601 225,601

Unclaimed dividend 20(b) 9,300 9,300Declared dividend 20(b) - (41,624) (41,624)Total transactions with owners of the Company - (32,324) (32,324)

Balance at 31 December 2014 208,122 1,808,581 2,016,703


Balance at 1 January 2013 208,122 1,435,796 1,643,918

Profit for the year - 262,757 262,757 Other comprehensive income - - - Total comprehensive income for the year - 262,757 262,757

Declared dividend 20(b) - (83,249) (83,249) Total transactions with owners of the Company - (83,249) (83,249)

Balance at 31 December 2013 208,122 1,615,304 1,823,426


Comprehensive income for the year

Transactions with owners of the Company

Contributions and distributions

Comprehensive income for the year

Transactions with owners of the Company

Contributions and distributions

Statement of changes in equity





For the year ended 31 December

Notes 2014 2013N'000 N'000

Profit for the year 225,601 262,757 Adjustments for:- Depreciation 13 205,511 187,327 -Write down on inventories 8 77,546 30,554 - Impairment loss on trade and other receivables 47,820 22,685 - Interest income 7 (12,247) (43,626)- Long service award charge 22(a) 3,394 2,834 - Actuarial (gain)/loss on long service award 22(a) (4,476) 702 - Unrealised exchange gain on foreign exchange transactions 9 (6,138) (12,650)- Gain on sale of property, plant and equipment (39,736) (24)- Income tax expense 11(a) 82,322 117,565

579,597 568,124

Changes in working capital:- inventories (29,457) (16,739)- trade and other receivables (112,339) 74,457 - current tax assets 4,978 (24,740)- prepayments 6,859 34,458- trade and other payables 292,730 103,851- deferred income 6,728 18,809 Cash generated from operating activities 749,096 758,220

Withholding tax (WHT) credit notes utilised 11(c) (31,365) - Long service awards paid 22(a) (1,762) - Value added tax (VAT) paid* (63,431) (43,734)Income tax paid 11(c) (71,397) (177,963)Net cash from operating activities 581,141 536,523

Interest received 7 12,247 43,626 Proceeds from sale of property, plant and equipment 40,277 48 Acquisition of property, plant and equipment 13 (1,040,128) (272,749)Net cash used in investing activities (987,604) (229,075)

Dividends paid 20(b) (91,573) (33,300)Unclaimed dividends received 20 9,300 - Loan received 21(c) 200,000 - Transaction cost on loans and borrowings 21(c) (2,100) - Loan repayment 21(c) (15,385) - Interest paid (1,175) - Net cash from/(used in) financing activities 99,067 (33,300)

Net (decrease)/increase in cash and cash equivalents (307,396) 274,148 Cash and cash equivalents at 1 January 722,171 448,023

Cash and cash equivalents at 31 December 414,775 722,171


* Value Added Tax (VAT) paid and shown separately above, has been adjusted for in deriving the change in trade and other payables.

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Statement of cash flows





Page1 Reporting entity 24

2 Basis for preparation 24

3 Significant accounting policies 24

4 Measurement of fair values 32

5 Revenue 33

6 Other income 33

7 Finance income and finance costs 33

8 Income and expenses 33

9 Profit before income tax 34

10 Personnel expenses 34

11 Taxation 36

12 Earnings per share 36

13 Property, plant and equipment 37

14 Prepayments 39

15 Inventories 39

16 Trade and other receivables 39

17 Current tax assets 39

18 Cash and cash equivalents 40

19 Share capital 40

20 Dividends 40

21 Loans and borrowings 41

22 Employee benefits 41

23 Deferred tax liabilities 45

24 Trade and other payables 46

25 Deferred income 46

26 Financial risk management and financial instruments 46

27 Contingencies 52

28 Related parties 53

29 Operating leases 54

30 Subsequent events 54

Notes to the financial statements





1 Reporting entityBOC Gases Nigeria Plc ("the Company"), a public company quoted on the Nigerian Stock Exchange since 1979, was incorporated as a public limited liability company on 12 November 1959, under the name Industrial Gases (Nigeria) Limited. The name was changed on 10 July 1961 to Industrial Gases Limited and thereafter to BOC Gases Nigeria Plc on 17 March 1997. The Company is a subsidiary of BOC Holdings Limited, U.K., the latter having a 60% interest in the equity of BOC Gases Nigeria Plc. The Company's registered office address is Plots 1-3, Block H, Oshodi Industrial Estate, Oshodi, Lagos. The Company is principally engaged in the manufacture of industrial and medical gases and the sale of special gases, welding and medical equipment.

2 Basis for preparation

(a) Basis of accountingThese financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

The financial statements were authorised for issue by the Board of directors on 19 March 2015.

(b) Basis of measurementThe financial statements have been prepared on the historical cost basis except for defined benefit obligations (Note 22).

(c) Functional and presentation currencyThese financial statements are presented in Naira (N), which is the Company’s functional currency. All financial information presented in Naira has been rounded to the nearest thousand, except where otherwise stated.

(d) Use of judgments and estimatesIn preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

i Assumptions and estimation uncertaintiesInformation about assumptions and estimation uncertainties and critical judgments in applying accouting policies that have the most significant effect on the amounts recognized in the financial statements are described in the following notes:

• Note 22 - Measurement of employee benefit obligations: key actuarial assumptions

• Note 27 - Contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.

3 Significant accounting policiesThe accounting policies set out below have been applied consistently to all periods presented in these financial statements.

(a) Foreign currency transactionsTransactions denominated in foreign currencies during the year are translated and recorded in Naira at actual exchange rates as of the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated into the functional currency at the rate of exchange prevailing at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss. Non-monetary items that are measured based on historical cost in a foreign currency are not translated.






(b) Financial instruments

(i) Non-derivative financial assetsThe Company initially recognises loans and receivables on the date that they are originated. All other financial assets are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial asset when the contractual rights to cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither trnsfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Company is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

The Company has the following non-derivative financial assets: loans and receivables.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using effective interest rate method, less any impairment losses. Short term receivables that do not attract interest are measured at original invoice amount where the effect of discounting is not material.

Loans and receivables comprise trade and other receivables.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand, cash balances with banks and call deposits with original maturities of three months or less.

(ii) Non-derivative financial liabilitiesAll financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.

The Company has the following non-derivative financial liabilities: trade and other payables and loans and borrowings.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method. Short term payables that do not attract interest are measured at original invoice amount where the effect of discounting is not material.

(c) Property, plant and equipment

(i) Recognition and measurementItems of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Property, plant and equipment comprise tangible items that are held for use in the production or supply of goods and services or for administrative purposes and are expected to be used during more than one accounting period. Buildings comprise of factories and offices.






Cost includes expenditure that is directly attributable to the acquisition of the asset. Property, plant and equipment under construction are disclosed as capital work-in-progress. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use including, where applicable, the costs of dismantling and removing the items and restoring the site on which they are located and borrowing costs on qualifying assets.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains or losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised in profit or loss.

(ii) Subsequent costsThe cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) DepreciationDepreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment which reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term in which case the assets are depreciated over the useful life.

The estimated useful lives for the current and comparative periods are as follows:

Leasehold land Lease periodLeasehold Buildings Lease periodPlant and machinery 14 yearsCylinders 20 yearsMotor vehicles 7 yearsCommercial tankers 15 yearsValves 8 yearsFurniture and fittings 3-8 years

Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.

No depreciation is charged on capital work in progress. The attributable cost of each asset is transferred to the relevant category at the point when the asset becomes ready for use and is depreciated accordingly.

(d) InventoriesInventories are measured at the lower of cost and net realisable value.

The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition. These include:

Raw materials, spares that do not qualify Purchase cost on a weighted average basis including as property, plant and equipment and transportation costspurchased finished goods Work-in-progress and manufactured Weighted average cost of direct materials and labour plus anfinished goods appropriate proportion of manufacturing overheadInventory in transit Purchase cost incurred






Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Inventory values are adjusted for obsolete, slow-moving or defective items. Inventory write-downs are recognised in profit or loss in the relevant period.

(e) Impairment

(i) Non-derivative financial assetsA financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flows of that asset that can be reliably estimated.

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The Company considers evidence of impairment for financial assets measured at amortised cost and collective level. All individually significant assets are assessed for specific impairment. All individually significant assets found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed

for impairment by grouping together receivables with similar risk characteristics.

In assessing collective impairment, the Company uses historical information on the timing of recoveries and the amount of loss incurred, and makes an adjustment if current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against receivables. When the Company considers that there are no realistic prospects of recovery of the asset, the relavant amounts are written off. Where applicable, interest on the impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

(ii) Non-financial assetsThe carrying amounts of the Company’s non-financial assets, other than inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in profit or loss.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(g) Employee benefits

(i) Defined contribution planA defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees.






(a) In line with the provisions of the Pension Reform Act 2004, the Company has instituted a defined contribution pension scheme for its staff. Staff contributions to the scheme are funded through payroll deductions whilst the Company’s contribution is recognised in profit or loss as employee benefit expense in the periods during which services are rendered by employees. Employees contribute 7.5% each of their basic salary, transport and housing allowances to the Fund on a monthly basis. The Company’s contribution is 7.5% and 15% of each employee’s basic salary, transport and housing allowances for non-management and management employees respectively.

(b) The Company has a defined contribution scheme for junior level employees, which is funded through fixed contributions made by the Company over the service life of the employees and charged accordingly as personnel expense in profit or loss. The funds are managed and administered by Stanbic IBTC Pension Managers Limited. Stanbic IBTC Pension Managers Limited is a duly registered Fund Administrator that administers the gratuity (defined contribution) scheme for employees.

BOC Gases Nigeria Plc has no recourse to the funds, which is managed in accordance with the Pension Reform Act of 2004 and regulated by the Pension Commission.

(ii) Other long-term employee benefitsThe Company’s other long-term employee benefits represents long service awards scheme instituted for all permanent employees. The Company’s obligation in respect of this scheme is the amount of future benefits that employees have earned in return for their service in the current and prior periods. The benefit is discounted to determine its present value. The discount rate is the yield at the reporting date on Federal Government of Nigeria issued bonds that have maturity dates approximating the term of the Company’s obligation. The calculation is performed using the projected unit credit method. Remeasurements are recognised immediately in profit or loss in the period in which they arise. Although the scheme was not funded, the Company ensured that adequate arrangements were in place to meets its obligations under the scheme.

(iii) Termination benefitsTermination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the end of the reporting period, then they are discounted.

(iv) Short-term benefitsShort-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(h) Provisions and contingent liabilities

ProvisionsA provision is recognised if, as a result of past event, the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan and the restructuring either has commenced or has been announced publicly. Future operating losses are not provided for.

Contingent liabilitiesA contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability.






Contingent liabilities are only disclosed and not recognised as liabilities in the statement of financial position.

If the likelihood of an outflow of resources is remote, the possible obligation is neither a provision nor a contingent liability and no disclosure is made.

(i) RevenueRevenue is measured at the fair value of the consideration received or receivable, net of Value Added Tax, discounts allowed and rebates in the ordinary course of business.

(i) Sale of goodsRevenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of Value Added Tax, returns, discounts allowed and rebates. Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably.

The timing of the transfer of risks and rewards varies depending on the individual terms of sales agreement.

(ii) ServicesThe Company is involved in managing gas plants, as well as performing related maintenance services. Revenue from services rendered is recognised in profit or loss, net of value added tax and discounts. Revenue from services are recognized only to the extent that it is probable that economic resources will flow to the Company and the revenue can be reliably measured.

(j) Leases(i) Where the Company is the Lessee

Leases of property, plant and equipment, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease's commencement at the lower of the fair value of the leased property and the present value of minimum lease payments. Subsequently, the asset is accounted for in accordance with the accounting policy appropriate to the assets. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expenses is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability.

The property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the lessee obtains ownership by the end of the lease term.

Leases where the lessor retains substantially all the risks and rewards of ownership, are classified as operating leases. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the period of the lease.

(ii) Determining whether an agreement contains a leaseAt inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. This will be the case if the following two criteria are met:

- the fulfilment of the arrangement is dependent on the use of a specific asset or assets; and

- the arrangement contains a right to use the asset(s).

At inception or on reassessment of the arrangement, the Company seperates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Company concludes for a finance lease that it is impracticable to seperate the payments reliably , then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as paymnets are made and an imputed finance cost on the liability is recognised using the Company's incremental borrowing rate.






(k) Finance income and finance costsFinance income comprises interest income on funds invested and net gains on foreign exchange differences. Interest income is recognised in profit or loss as it accrues, using the effective interest method.

Finance costs comprise unwinding of the discount on provisions and interest expenses on borrowings (except interest expenses that are directly attributable to the acquisition, construction or production of a qualifying asset which are capitalised as part of the related assets) and are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses are reported on a net basis.

(l) Income taxIncome tax expense comprises current tax - company income tax and tertiary education tax, and deferred tax. Current and deferred tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.

(i) Current taxCurrent tax is the expected tax payable or receivable on the taxable income or loss for the year in accordance with Companies Income Tax Act (CITA) using tax rates as at the reporting date and any adjustment to tax payable in respect of previous years. Corporate Income tax is assessed at 30% of assessable profit. The Tertiary Education Trust Fund Act repeals the Education Tax Act Cap. E4, Laws of the Federation of Nigeria, 2004 and Education Tax Fund Act No. 17, 2003 and establishes the Tertiary Education Trust Fund charged with the responsibility for imposing, managing and disbursing the tax to public tertiary institutions in Nigeria. Tertiary education tax is assessed at 2% of assessable profit.

(ii) Deferred taxDeferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, using the liability method. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss.

Deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability of future taxable profits improves.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

(m) Earnings per shareThe Company presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effect of all dilutive potential ordinary shares. Diluted EPS is only disclosed when there is a dilutive impact.

(n) Dividends Dividends are recognised as liability in the period they are declared.






Dividends, which remain unclaimed for a period exceeding twelve (12) years from the date of declaration, are no longer actionable by the shareholders in accordance with section 385 of the Companies and Allied Matters Act of Nigeria and are therefore written back to retained earnings.

(o) Segment reportingAn operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company's other components. All segments' operating results are reviewed by the Company's Chief Operating Decision Maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The Company's primary format of segment reporting is based on business segments. The business segments are determined by management based on Company's internal reporting structure.

(p) Share capital The Company has only one class of shares, namely ordinary shares. Ordinary shares are classified as equity. When new shares are issued, they are recorded in share capital at their par value. The excess of the issue price over the par 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.

(q) New Standards and Interpretations not yet adoptedA number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2014; however, the Company has not applied the following new or amended standards in preparing these financial statements.

New or amended standards Summary of the requirements Possible impact on financial statementsIFRS 9 Financial instruments IFRS 9, published in July 2014, The Company is assessing the potential

replaces the existing guidance impact on its financial statementsin IAS 39 Financial Instruments: resulting from application of IFRS 9.Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measure-ment of financial instruments, including a new expected credit loss model for calculating impair-ment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on reco-gnition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted.

IFRS 15 Revenue from IFRS 15 establishes a comprehensive The Company is assessing the potential Contracts with Customers framework for determining whether, impact on its financial statements

how much and when revenue is resulting from the application of recognised. It replaces existing IFRS 15.revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC13 Customer Loyalty Programmes.IFRS 15 is effective for annual reporting periods begining on or after 1 January 2017, with early adoption permitted.






Agriculture: Bearer Plants These amendments require a bearer None(Amendments to IAS 16 plant, defined as a living plant, to be The Company does not have anyand IAS 41) accounted for as property, plant bearer plants.

and equipment and included in the scope of IAS 16 Property, Plant and Equipment, instead of IAS 41 Agriculture. The amendments are effective forannual reporting periods beginning on or after 12 January 2016, with early adoption permitted.

The following new or amended standards are not expected to have a significant impact on the Company's financial statements.

• IFRS 14 Regulatory Deferral Accounts.• Accounting for Acquisitions of interests in Joint operations ( Amendments to IFRS 11)• Clarification of Acceptable methods of Depreciation and Amortisation ( Amendments to IAS 16 and IAS 38)• Defined Benefits Plans: Employee Contribution (Amendments to IAS 19)• Annual Improvements to IFRSs 2010-2012 Cycle.• Annual Improvements to IFRSs 2011-2013 Cycle.

4 Measurement of Fair ValuesSome of the Company’s accounting policies and disclosures require the determination of fair value, both for financial and non-financial assets and liabilities.

The Company has an established framework in respect of fair values. This include valuation team that has the overall responsibility for overseeing all significant fair value measurements, including level 3 fair values, and report directly to the Finance Director.

When measuring the fair value of an asset or a liability, the Company uses observable data as far as possible. Fair values are categorized into different levels in fair value heirarchy based on the inputs used in the valuation technique as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.• Level 2: input other than quoted prices included in level 1 that are observable for the assets or liability, either

directly (i.e as prices) or indirectly (i.e as derived from prices).• Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

• Note 26 - Financial instruments






5 Revenue2014 2013

N'000 N'000Gas sales 1,946,815 1,901,208Engineering services 85,521 54,801Others 180,560 135,609

2,212,896 2,091,618

The Company has a single operating segment which is in respect of manufacture and sale of gases, and the sale and service of equipment related to gases.

Revenue by geographical area is as follows:2014 2013

N'000 N'000Nigeria 2,127,375 2,036,817Export 85,521 54,801

2,212,896 2,091,618

Only two of the Company's customers account for more than 10 per cent of the Company's total revenue.

No further operating segment information is reported.

6 Other income2014 2013

N'000 N'000 Gain on sale of property, plant and equipment 39,736 24Gain on sale of scrap 629 933

40,365 957

7 Finance income and finance costsNet finance income comprises:

2014 2013N'000 N'000

Interest income on bank deposits 12,247 43,626Gain on foreign exchange transactions 8,637 12,650

20,884 56,276Interest expense on loan (1,199) - Net Finance income 19,685 56,276

8 Income and expensesExpenses by nature

2014 2013N'000 N'000

Raw materials and consumables used 458,107 333,015Changes in finished goods 107,334 172,074Personnel expenses 456,193 414,567Directors' remuneration 79,042 61,041Technical aid fee 9,237 11,498Depreciation expense 205,511 187,327Repairs and maintenance 164,947 238,479Travel and entertainment 46,735 39,826Auditors' remuneration 14,036 12,936Vehicle running expenses 74,796 65,132Allowance for bad and doubtful debts 39,103 9,290Write-down of inventories 77,546 30,554Other administrative and general expenses 232,436 192,790 Total cost of sales, selling and distribution expenses and administrative expenses 1,965,023 1,768,529






9 Profit before income taxProfit before income tax is stated after charging/(crediting):

Note 2014 2013N'000 N'000

Depreciation of property, plant and equipment 13 205,511 187,327 Auditors' remuneration 14,036 12,936 Personnel expenses 10 456,193 414,567 Directors' remuneration 9(b) 79,042 61,041 Technical aid fee 9,237 11,498 Internet service charge 14,215 11,933Realised exchange gain on foreign exchange transactions 2,499 - Unrealised exchange gain on foreign exchange transactions 6,138 12,650 Gain on property, plant and equipment disposed 6 (39,736) (24)

(b)

2014 2013N'000 N'000

Fees as directors 550 550Other emoluments (including pensions) 78,492 60,491

79,042 61,041

The directors' remuneration shown above includes:2014 2013

N'000 N'000

Chairman 300 300

Highest paid director 42,301 41,113

42,601 41,413

2014 2013Number Number

N N- 250,000 1 1- 16,700,000 1- 19,400,000 1 1

3 2

10 Personnel expenses(a)

2014 2013N'000 N'000

Salaries, wages and allowances 289,610 277,684Contributions to defined contribution plans 44,498 58,859Termination/ redundancy benefits 7,389 11,889 (Income)/expenses related to other long-term benefits 3,536Training, recruitment and canteen expenses 20,993 15,361Medical expenses 4,450 5,615Other personnel expenses 90,335 41,622

456,193 414,567

Directors' remuneration

Other directors received emoluments in the following ranges:

Directors' remuneration for the year includes:

240,001

Personnel expenses including the provision for long service award benefits:

16,600,00119,300,001

(1,082)






(b)

2014 2013Number Number

N N1,100,001 1,200,000 - 1

1,200,001 1,300,000 - 91,300,001 1,400,000 - 111,400,001 1,500,000 - 6

1,500,001 1,600,000 - 41,600,001 1,700,000 2 51,700,001 1,800,000 6 8

1,800,001 1,900,000 10 2

1,900,001 2,000,000 5 42,000,001 2,100,000 1 62,100,001 2,200,000 6 4

2,200,001 2,300,000 4 62,300,001 2,600,000 13 92,600,001 2,700,000 4 2

2,700,001 2,900,000 3 0

2,900,001 3,000,000 4 03,000,001 3,100,000 3 03,100,001 3,200,000 2 1

3,200,001 3,600,000 11 03,600,001 3,900,000 3 03,900,001 4,000,000 1 1

4,000,001 - 4,500,000 2 1

4,500,001 - 4,700,000 - 14,700,001 4,800,000 - 14,800,001 5,400,000 - 1

5,500,001 6,000,000 2 46,100,001 7,000,000 1 37,000,001 8,000,000 1 3

Above 8,000,001 13 6

97 99

Numberof employeesof the Company as at 31 December, whose dutieswere wholly or mainly dischargedinNigeria, received annual remuneration (excluding pension contributions and certain benefits) in thefollowing ranges:

--

---

- - -

-

---

- - -

--

- - -

-

---

- -

(c) The number of persons employed as at 31 December are:2014 2013

Number Number

Operations 40 47Customers Service 4 3Sales and Marketing 37 34Finance and Information Technology 12 11Administration 4 4

97 99






11 Taxation(a) Income tax expense

2014 2013

The tax charge for the year has been computedafter adjustingfor certain items of expenditureandincome,which are not deductible or chargeable for tax purposes, and comprises:

N'000 N'000

Current tax expenseIncome tax - 77,187Capital gains tax 3,860 - Tertiary education tax 11,828 11,953

15,688 89,140Deferred tax expense

66,634 28,425

82,322 117,565

(b) Reconciliation of effective tax rate2014 2013

N'000 N'000% %

Profit before income tax 307,923 380,322

Income tax using the statutory tax rate 30.0 92,377 30.0 114,097Impact of tertiary education tax 3.8 11,828 3.1 11,953Impact of capital gains 1.3 3,860

(16.0)Non-deductible expenses 7.6 23,306 1.7 6,324Other reconciling items 0 119

26.7 82,322 30.9 117,565

Origination and reversal of temporary differences

Effect of tax incentives and exempted income (3.0)

(11,439)

(0.9)

(3,370)

(49,168)

(c) Movement in current tax liability -

2014 2013N'000 N'000

Balance at 1 January 92,603 181,426Payments during the year

-

Charge for the year 15,688 89,140

Balance at 31 December 5,529 92,603

12 Earnings per shareBasic earnings per share

Weighted average number of ordinary shares (basic)Note 2014 2013

Issued ordinary shares at 1 January 416,244,706 416,244,706

18 416,244,706 416,244,706

(31,365)

The Company had no dilutive potential ordinary shares to be accounted for in these financial statements.

Weighted average number of ordinary shares during the year

Basic earnings per share at 31 December 2014 was based on the profit attributable to ordinary shareholders ofN245,315,847 (2013: N262,757,000), and on the 416,244,706 ordinary shares of 50 kobo each, being the weightedaverage number of ordinary shares in issue during the year (2013: 416,244,706 for the purpose of earnings pershare), and is calculated as follows:

(177,963)Withholding tax credit notes utilised

(71,397)






13Pr

oper

ty, p

lant

and

equ

ipm

ent

(a)

The

mov

emen

t on

thes

e ac

coun

ts w

as a

s fol

low

s:

Leas

ehol

d la

ndBu

ildin

gs

Pla

nt,

mac

hine

ry,

cylin

ders

an

d va

lves

M

otor

ve

hicl

esCo

mm

erci

al

tank

ers

Furn

iture

an

d fit

tings

Capi

tal w

ork-

in-

prog

ress

Tota

lN'

000

N'00

0N

'000

N'00

0N

'000

N'00

0N'

000

N'00

0

COST

:

Bala

nce

at 1

Janu

ary

2014

5,30

012

8,56

41,

867,

779

274,

623

55,5

1411

0,46

228

1,99

62,

724,

238

Addi

tions

-

-

-

-

-

3

,161

1,0

36,9

67

1,04

0,12

8 D

ispos

als

-

(1

,407

)

(

16,5

39)

-

-

-

Tr

ansf

ers

-

-

1

,253

,003

-

-

-

(

1,25

3,00

3)

-

Bala

nce

at 3

1 D

ecem

ber 2

014

5,30

012

7,15

73,

104,

243

263,

934

55,5

1411

3,62

365

,960

3,73

5,73

1

Bala

nce

at 1

Janu

ary

2013

5,30

012

8,56

41,

495,

351

276,

833

55,5

1410

9,50

439

4,96

22,

466,

028

Addi

tions

-

-

36,5

04

-

-

181

23

6,06

427

2,74

9D

ispos

als

-

-

(6,6

20)

-

-

Tran

sfer

s

-

-

33

9,09

64,

410

-

5,

524

-

Bala

nce

at 3

1 D

ecem

ber 2

013

5,30

012

8,56

41,

867,

779

274,

623

55,5

1411

0,46

228

1,99

62,

724,

238

Bala

nce

at 1

Janu

ary

2014

2

,252

67

,388

932,

237

192,

215

18,3

1095

,548

-

1,

307,

950

Dep

reci

atio

n fo

r the

yea

r

1

41

7,26

316

9,63

519

,209

2,97

36,

290

-

20

5,51

1D

ispos

als

-

(8

66)

-

-

-

Bala

nce

at 3

1 D

ecem

ber 2

014

2,39

373

,785

1,08

5,33

320

0,73

521

,283

101,

838

-

1,

485,

367

(10,

689)

(2

8,63

5)

(3,1

72)

(4,7

47)

(14,

539)

(349

,030

)

ACCU

MU

LATE

D

DEP

RECI

ATIO

N:

(16,

539)

(10,

689)

(28,

094)

Not

es to

the

finan

cial

sta

tem

ents





Leas

ehol

d la

ndBu

ildin

gs

Pla

nt,

mac

hine

ry,

cylin

ders

an

d va

lves

M

otor

ve

hicl

esCo

mm

erci

al

tank

ers

Furn

iture

an

d fit

tings

Capi

tal w

ork-

in-

prog

ress

Tota

l

N'00

0N'

000

N'0

00N'

000

N'0

00N'

000

N'00

0N'

000

Bala

nce

at 1

Janu

ary

2013

2

,111

59

,920

791,

054

173,

769

15,3

3792

,947

-

1,

135,

138

Dep

reci

atio

n fo

r the

yea

r

1

41

7,46

814

4,33

125

,066

2,97

37,

348

-

18

7,32

7D

ispos

als

-

-

-

-

Bala

nce

at 3

1 D

ecem

ber 2

013

2,25

267

,388

932,

237

192,

215

18,3

1095

,548

-

1,

307,

950

CARR

YIN

G A

MO

UN

TS:

2,90

753

,372

2,01

8,91

063

,199

34,2

3111

,785

65,9

602,

250,

364

3,04

861

,176

935,

542

82,4

0837

,204

14,9

1428

1,99

61,

416,

288

(b)

Plan

t, m

achi

nery

, cyl

inde

rs a

nd v

alve

s com

prise

:

Cost

Carr

ying

am

ount

N '00

0N'

000

N'0

00

Plan

t and

mac

hine

ry2,

747,

108

1,75

5,01

5Cy

linde

rs30

8,62

421

6,40

3Va

lves

48,5

1147

,492

At 3

1 D

ecem

ber 2

014

3,10

4,24

32,

018,

910

Plan

t and

mac

hine

ry1,

542,

679

703,

576

Cylin

ders

325,

100

231,

966

Valv

es

-

-

At

31

Dec

embe

r 201

31,

867,

779

935,

542

At 3

1 D

ecem

ber 2

013

(3,1

48)

(6,6

20)

(4,7

47)

(14,

515)

At 3

1 D

ecem

ber 2

014

932,

237

Dep

reci

atio

n

992,

093

92,2

21

1,08

5,33

3

839,

103

93,1

34

1,01

9

-

Not

es to

the

finan

cial

sta

tem

ents





(c)

(d) Capital commitments

(e) Assessment of impairment

14 Prepayments

15 Inventories2014 2013

N'000 N'000

Raw materials and consumables 117,342 89,691Finished goods 94,068 170,492Goods in transit 8,322 7,638

219,732 267,821

16 Trade and other receivables2014 2013

N'000 N'000

Trade receivables 354,558 317,253

Other receivables 29,579 2,365

384,137 319,618

All land held by the Company are under finance lease arrangements. The maximum tenor of the leasearrangementsis 99 years in line with the Land Use Act. The lease amountswere fully paid at the inceptionof thelease arrangements.

Capital expenditurecommitmentsauthorisedby the directors but not providedfor in these financial statementsamounted to nil(2013: N408 million).

The directors reviewed the carrying amounts of the Company's property, plant and equipment noting no indication of impairment.

In 2014 raw materials and consumables, changes in finished goods and goods in transit included in cost of salesamounted to N565.44 million (2013: N505.08 million). The write-down of inventories amounted to N77.55 million(2013: N30.55 million). The write-down and net allowance/ reversal are included in cost of sales.

The Company's exposure to credit and market risks and impairmentlosses related to trade and other receivables aredisclosed in Note 26.

Non-current and current prepayments represent rental expenses prepaid by the Company and advance paymentsmade to suppliers.

17 Current tax assets2014 2013

N'000 N'000

Withholding tax receivables 97,135 102,113

97,135 102,113

The movement on withholding tax receivables during the year was as follows:

2014 2013N'000 N'000

Balance at 1 January 102,113 77,373 Additions during the year 26,387 24,740 Utilisations during the year -

Balance at 31 December 97,135 102,113 (31,365)

Payments made by Nigerian customers of the Company are subject to a withholding tax in accordance with theNigerian tax laws. The amount withheld is available to offset the actual tax liabilities. Based on the current tax laws,these withholding taxes do not expire.






Call deposits 271,168 668,425Cash in hand 1,369 2,917

414,775 722,171

19 Share capital(a) Authorised ordinary shares of 50 kobo each

2014 2013N'000 N'000

250,000 250,000

All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares are entitled todividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.

Cash and cash equivalents in the statement of cash flows

The Company's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities is disclosed inNote 26.

500,000,000 ordinary shares

(b) Issued and fully paid ordinary shares of 50 kobo each2014 2013

N'000 N'000In issue at 1 January -416,244,706 (2013: -416,244,706 ) ordinary shares 208,122 208,122In issue at 31 December

- 416,244,706 ordinary shares 208,122 208,122

18 Cash and cash equivalents 2014 2013N'000 N'000

Bank balances 142,238 50,829

(b)2014 2013

N'000 N'000

Balance at 1 January 49,949 - Dividend declared 41,624 83,249Payments during the year

Balance at 31 December - 49,949

2014 2013N'000 N'000

9,300

Dividends payable

(33,300)

-

(91,573)

Unclaimed dividends transferred to retained earnings

20 Dividends(a) Dividends

2014 2013N'000 N'000

41,624

41,624

The following dividends were declared by the Company for The respective years indicated:

10 kobo (2013: 20kobo) per qualifying ordinary share

2014 2013N'000 N'000

41,624

83,249

After the end of the reporting period, the following dividends were proposed by the directors .

10 kobo (2013: 20kobo) per qualifying ordinary share






(i.)

(ii.)

21 Loans and borrowings(a) Loans comprise amount due as a result of borrowings from Rand Merchant Bank Nigeria Limited.

2014 2013N'000 N'000

Non-current liabilities

Unsecured bank loan 122,045 -

Current liabilitiesUnsecured bank loan 60,494 -

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

CurrencyNominal Interest rate

Year of maturity

Unsecured bank loan NGN 16.5% 2014-17

(c) The movement in the loan balances during the year was as follows:2014

N'000Balance beginning of the year - Loans drawn down during the year 200,000

Effective Interest 1,199

Arrangement Fee *Repayment

(1,175)

*VAT inclusive at 5%22 Employee benefit obligation

2014 2013N'000 N'000

(a) Long service awards benefit plan (Note (i)) 15,305 18,149

(i) Movement in long service awards benefits plan

2014 2013N'000 N'000

Balance at 1 January 18,149 14,613 3,394 2,834

Payments during the yearBalance at 31 December 15,305 18,149

-

Face value

Other long-term benefits expense recognised in profit or loss for long service awards obligation comprise:

Carrying amountN'000N'000

184,615 182,539

(15,385)

702

(2,100)

(4,476) (1,762)

The movement on the long service awards benefit plan liability during the year was as follows:

Actuarial losses/(gains) recognised in profit or loss (see note (e))Current service costs, past service costs and interest (see below)

Unclaimed dividends transferred to retained earnings represent dividends which have remained unclaimedforover twelve (12) years and are therefore no longer recoverable or actionableby the shareholders in accordancewith section 385 of the Companies and Allied Matters Act, Cap. C20, Laws of the Federal Republic of Nigeria,2004.

As at 31 December2014, unclaimeddividends amountingto N75.42 million (2013: N48.48 million) are held withthe Company’s registrar, All Crown Registrars Limited.

-Principal

-Interest

182,539






2014 2013N'000 N'000

Current service costs 1,104 965Interest on obligation 2,388 1,869

- 3,394 2,834

702

(b) Pension contribution payable (statutory)

2014 2013N'000 N'000

Balance at 1 January 17,402 12,383Charge for the year 41,907 56,367 Employees contribution 55,312 36,448Payments during the year

Balance at 31 December 9,378 17,402

The balance as at year-end is included in trade and other payables.

(87,796)

The balance on the pension payable account represents the amount due to the Pension Fund Administrators,which is yet to be remitted at the year end. The movement on this account during the year was as follows:

(98)

(1,082)

(4,476)

(105,243)

3,536

Actuarial losses/(gains)

Past Service Cost






Not

es to

the

finan

cial

sta

tem

ents

(c)

Pens

ion

cont

ribu

tion

pay

able

2014

2013

N'0

00N

'000

Obl

igat

ion

at 1

Janu

ary

--

Char

ge fo

r the

yea

r2,

591

2,49

2Pa

ymen

tsO

blig

atio

n at

31

Dec

embe

r -

-

The

bala

nce

as a

t yea

r-en

d is

incl

uded

in tr

ade

and

othe

r pay

able

s.

(d)

The

expe

nse

is re

cogn

ised

in th

e fo

llow

ing

line

item

s in

the

stat

emen

t of p

rofit

or l

oss

and

othe

r com

preh

ensi

ve in

com

e

2014

2013

2014

2013

2014

2013

N'0

00N

'000

N'0

00N

'000

N'0

00N

'000

Pens

ion

cont

ribut

ion

(sta

tuto

ry)

1

2,57

2

16,

910

2

9,33

5

39,

457

4

1,90

7

56,

367

Pens

ion

cont

ribut

ion

7

77

7

48

1,8

14

1,7

44

2,5

91

2,4

92

Long

ser

vice

aw

ards

loss

/(ga

in)

1,06

1

2

,475

3

,536

13,0

2418

,719

30,3

9243

,676

43,4

1662

,395

(e)

Actu

aria

l los

ses/

(gai

ns) r

ecog

nise

d in

pro

fit o

r los

s ar

ises

from

:

2014

2013

N'0

00N

'000

- Fin

anci

al a

ssum

ptio

ns

(4

,753

)

- Dem

ogra

phic

ass

umpt

ions

277

-

(4

,476

)

The

mov

emen

t on

this

acc

ount

dur

ing

the

year

was

as

follo

ws:

Cost

of s

ales

Adm

inis

trat

ive

expe

nses

Tota

l

(2,5

91)

(2,4

92)

702

702

(

325)

(

757)

(1,0

82)





(f ) Actuarial assumptionsPrincipal financial actuarial assumptions at the reporting date (expressed as weighted averages):

2014 2013

Long-term average discount rate (p.a.) 14% 13%Average pay increase (p.a.) 12% 15%Average rate of inflation (p.a.) 10% 10.0%Average duration (years) 13.53 13.53

Mortality in service

Number of deaths Number of deathsin year out of in year out of

Sample age 10,000 lives 10,000 lives25 7 730 7 735 9 940 14 1445 26 26

Mortality in retirement

Male FemaleSample age 2014 2013 2014 2013

65 210 210 96 9670 325 325 165 16575 499 499 281 28180 760 760 474 474

Withdrawals/ Turnover

Sensitivity analysis

Increase DecreaseN'000 N'000

Discount rate (1% movement) 14,560 16,127 Salary increase rate ( 1% movement) 16,060 14,609 Mortality rate ( 1 year movement) 15,240 15,346

Assumptions regarding future mortality rates are based on published statistics and mortality tables byInstitute and Faculty of Actuaries in the UK.

It is assumed that all the employees covered by the long service awards scheme would retire at age 60(2013: age 60).

Reasonably possible changes at the reporting date to one of the relevant acturial assumption, holdingother assumptions constant, would have affected the long service awards obligation by the amountsshown below:

Although the analysis does not take account of the full distribution of cash flows expected under the plan,it does provide an approximation of the sensitivity of the assumptions shown.

These assumptions depict management's estimate of the likely future experience of the Company.

Due to unavailability of published reliable demographic data in Nigeria, the demographic assumptionsregarding future mortality are based on the rates published jointly by the Institute and Faculty ofActuaries in the UK as follows:

2014 2013

Number of deaths in year out of 10,000 lives






23D

efer

red

tax

liabi

litie

sRe

cogn

ised

def

erre

d ta

x as

sets

and

liab

ilitie

sD

efer

red

tax

asse

ts a

nd li

abili

ties a

re a

ttrib

utab

le to

the

follo

win

g:

2014

2013

2014

2013

2014

2013

N'0

00N

'000

N'0

00N

'000

N'0

00N

'000

Prop

erty

, pla

nt a

nd e

quip

men

t

-

-

Empl

oyee

ben

efits

obl

igat

ion

4,59

25,

445

-

-

4,59

25,

445

Trad

e an

d ot

her r

ecei

vabl

es22

,099

11,6

54

-

-

22

,099

11,6

54O

ther

s (ex

chan

ge d

iffer

ence

)

-

-

26,6

9117

,099

Mov

emen

t in

tem

pora

ry d

iffer

ence

s is a

s fol

low

s:

Bala

nce

Reco

gnis

ed in

Bala

nce

Reco

gnis

ed in

Bala

nce

I Jan

uary

prof

it or

I Jan

uary

prof

it or

31 D

ecem

ber

2013

loss

2014

loss

2014

N'0

00N

'000

N'0

00N

'000

N'0

00

Prop

erty

, pla

nt a

nd e

quip

men

t(3

54,3

57)

Em

ploy

ee b

enef

its o

blig

atio

n

2

,332

3,

113

5,44

54,

592

Trad

e an

d ot

her r

ecei

vabl

es7,

695

3,95

911

,654

1

0,44

5 22

,099

Oth

ers (

exch

ange

diff

eren

ce)

1,8

35

(1,9

60)

(3

54,3

57)

(329

,626

)

Asse

tsLi

abili

ties

Net

(276

,296

)

(3,7

95)

(276

,296

)

(280

,091

)

(262

,992

)

(354

,357

)

(1,9

60)

(3,7

95)

(356

,317

)

(1,9

60)

(

66,6

34)

(262

,992

)

(329

,626

)

(242

,744

)

(1,8

50)

(234

,567

)

(276

,296

)

(3,7

95)

(33,

552)

(1,9

45)

(28,

425)

(

78,0

61)

(8

53)

Not

es to

the

finan

cial

sta

tem

ents





24 Trade and other payables

Note 2014 2013N'000 N'000

338,505 130,680Trade payables 110,962 126,054Dividend payable 20 - 49,949

366,617 337,388

816,084 644,071

25 Deferred income2014 2013

N'000 N'000Customer advances 52,766 46,038

52,766 46,038

26 Financial risk management and financial instrumentsOverviewThe Company has exposure to the following risks from its use of financial instruments:• credit risk• liquidity risk• market risk

Risk management framework

Due to related parties

Some of the Company's customers make deposits for gases with the Company and utilise these depositsbased on subsequent purchases from the Company. Deposits are recognised as revenue once sale occurs.

The Company's exposure to currency and liquidityrisk related to trade and other payablesis disclosed In Note 26.

Non-trade payables and accrued expenses

This note presents information about the Company's exposure to each of the above risks, the Company'sobjectives, policies and processes for measuring and managing risk and the Company's management ofcapital. Further quantitative disclosures are included throughout these financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Company's riskmanagementframework. The Board has establishedthe Risk Committee, which is responsiblefor developingand monitoring the Company's risk management policies. The Committee reports regularly to the Board ofdirectors on its activities.

Receipts of advances for which a related sale has not occurred, are presented as deferred income.






The Company's risk management policies are established to identify and analyse risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company's Risk Committee oversees how management monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company's Risk Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(a) Credit riskCredit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company's receivables from customers.

Exposure to credit riskThe carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Carrying amountNote 2014 2013

N'000 N'000Trade and other receivables 16 384,137 319,618Cash and cash equivalents* 18 413,406 719,254

797,543 1,038,872

*excluding cash in handThere are no collaterals associated with these transactions.

Trade and other receivablesManagement has credit policies in place and the exposure to credit risk is monitored on an ongoing basis. Under the credit policies all customers requiring credit over a certain amount are reviewed and new customers analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. Credit limits are established for qualifying customers and these limits are reviewed regularly by the Risk Committee. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a cash basis.

Management reviews each customer's credit limit in line with the customer's performance in the preceding quarter and perceived risk factor assigned to the customer.

More than 60 percent of the Company’s customers have been transacting with the Company for over three years and losses have occurred infrequently. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, whether they are a small and medium scale, listed or high profiled customer, industry, aging profile and existence of previous financial difficulties. Trade receivables relate mainly to the Company’s high profiled customers. Customers with no trading activities for a period of up to one year are placed on a dormant customer list and future sales are made on cash basis only with approval of management.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

The maximum exposure to credit risk for trade and other receivables at the reporting date by type of counterparty was:






2014 2013N'000 N'000

422,311 288,068214 60,894

354,558 317,253

31,835 6,061

384,137 319,618 - -

384,137 319,618

Impairment lossesThe ageing of trade and other receivables at the reporting date was:

Gross Impairment Gross Impairment2014 2014 2013 2013

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

Past due 0-30 days 127,845 - 108,755 -Past due 31-60 days 131,384 - 103,625 -Past due 60-180 days 95,334 5,905 80,246 42More than 180 days 99,797 64,318 62,397 35,363

454,360 70,223 355,023 35,405

2014 2013N'000 N'000

Balance at 1 January Impairment loss recognisedAmounts written off 13,002 14,240

Balance at 31 December

(26,960)(22,685)

- Due from related parties

- Other receivables

(35,405)

(35,405)

(70,223)

The movementin the allowancefor impairmentin respect of trade and other receivables during the Year was as follows:

(2,256)

- Major customers - Others - Impairment

- Impairment

(47,820)

Trade receivables

(67,967)

(3,696)

(31,709)

The impairment loss as at 31 December 2014 relates to customers that are not expected to be able to pay their outstanding balances, mainly due to economic circumstances and disputed invoices. The Company believes that all unimpaired amounts that are past due are still collectible, based on historic payment behaviour and the underlying customers’ credit ratings. The impairment loss is included in administrative expenses in profit or loss.

Based on historic default rates, the Company believes that, apart from the above, no impairment allowance is necessary in respect of trade and other receivables beyond 30 days. As at the date of these financial statements, over 35 percent of the trade receivable balance, which includes the amount owed by the Company’s most significant customers, have been collected.

Cash and cash equivalentsThe Company held cash and cash equivalents (excluding cash in hand) of N413.41 million as at 31 December 2014 (2013: N719.25 million), which represents its maximum credit exposure on these assets. The Company mitigates the credit risk exposure of its bank balances by selecting reputable banks with good credit ratings and a history of strong financial performance.

(b) Liquidity riskLiquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Typically, the Company's credit terms with customers are more favourable compared to payment terms to its vendors in order to help provide sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.






Carr

ying

Cont

ract

ual

6 m

onth

s6

mon

ths

to1-

34-

5O

ver 5

Not

eam

ount

cash

flow

sor

less

1 ye

arye

ars

year

sye

ars

N'0

00N

'000

N'0

00N

'000

N'0

00N

'000

N'0

00

Non

-der

ivat

ive

finan

cial

liabi

litie

s

31 D

ecem

ber 2

014

Loan

s an

d bo

rrow

ings

2118

2,53

923

3,94

045

,325

42,8

5614

5,75

9Tr

ade

and

othe

r pay

able

s24

816,

084

816,

084

816,

084

--

--

998,

623

1,05

0,02

486

1,40

942

,856

145,

759

-

-

31 D

ecem

ber 2

013

Trad

e an

d ot

her p

ayab

les

2464

4,07

164

4,07

164

4,07

1-

--

-

644,

071

644,

071

644,

071

--

--

The

follo

win

g ar

e th

e co

ntra

ctua

l mat

uriti

es o

f fin

anci

al li

abili

ties,

and

excl

udin

g th

e im

pact

of n

ettin

g ag

reem

ent:

It

is

not

expe

cted

th

at

the

cash

flo

ws

incl

uded

in

th

e m

atur

ity

anal

ysis

co

uld

occu

r si

gnifi

cant

ly

earli

er,

or

at

sign

ifica

ntly

di

ffer

ent

amou

nts.

Gua

rant

ees

The

Com

pany

has

not

pro

vide

d an

y gua

rant

ees a

s at y

ear-

end.

(c)

Mar

ket r

isk

Mar

ket r

isk i

s the

risk

that

chan

ges i

n m

arke

t pric

es, s

uch

as fo

reig

n ex

chan

ge ra

tes,

inte

rest

rate

s and

equ

ity p

rices

will

affe

ct th

e Co

mpa

ny’s

inco

me

or th

e va

lue

of it

s ho

ldin

gs o

f fin

anci

al in

stru

men

ts. T

he o

bjec

tive

of m

arke

t ris

k m

anag

emen

t is t

o m

anag

e an

d co

ntro

l mar

ket r

isk

expo

sure

s with

in a

ccep

tabl

e pa

ram

eter

s, w

hils

t op

timis

ing

the

retu

rn.

The

Com

pany

man

ages

mar

ket r

isks

by

keep

ing

cost

s lo

w th

roug

h va

rious

cos

t opt

imis

atio

n pr

ogra

mm

es. M

oreo

ver,

mar

ket d

evel

opm

ents

are

mon

itore

d an

d di

scus

sed

regu

larly

and

miti

gatin

g ac

tions

are

take

n w

here

nec

essa

ry.

Curr

ency

risk

The

Com

pany

is e

xpos

ed to

cur

renc

y ris

k on

sale

s and

pur

chas

es th

at a

re d

enom

inat

ed in

a c

urre

ncy

othe

r tha

n its

func

tiona

l cur

renc

y, th

e N

aira

. The

cur

renc

ies i

n w

hich

thes

e tr

ansa

ctio

ns p

rimar

ily a

re d

enom

inat

ed a

re E

uro

(€),

Briti

sh P

ound

Ste

rling

(GBP

), U

S D

olla

r (U

SD) a

nd S

outh

Afr

ican

Ran

d (Z

AR)

. The

cur

renc

y ris

k is

the

risk t

hat t

he fa

ir va

lue

or fu

ture

cash

flow

s of a

fina

ncia

l inst

rum

ent w

ill fl

uctu

ate

due

to th

e ch

ange

s in

fore

ign

exch

ange

rate

s.

Not

es to

the

finan

cial

sta

tem

ents




In m

anag

ing

curr

ency

risk

, the

Com

pany

aim

s to

redu

ce th

e im

pact

of s

hort

-ter

m fl

uctu

atio

ns o

n ea

rnin

gs. T

he C

ompa

ny’s

fore

ign

sale

s are

less

than

4%

of t

he to

tal

sale

s. Th

us th

e ex

posu

re to

cur

renc

y ris

k in

that

rega

rd is

min

imal

. The

Com

pany

’s si

gnifi

cant

exp

osur

e to

cur

renc

y ris

k re

late

s to

its

impo

rtat

ion

of v

ario

us ra

w

mat

eria

ls, s

pare

s and

oth

er p

rope

rty,

pla

nt a

nd e

quip

men

t. A

lthou

gh th

e Co

mpa

ny h

as v

ario

us m

easu

res t

o m

itiga

te e

xpos

ure

to fo

reig

n ex

chan

ge ra

te m

ovem

ent,

over

the

long

er te

rm, h

owev

er, p

erm

anen

t cha

nges

in e

xcha

nge

rate

s wou

ld h

ave

an im

pact

on

prof

it. T

he C

ompa

ny m

onito

rs th

e m

ovem

ent i

n th

e cu

rren

cy ra

tes

on a

n on

goin

g ba

sis.

Expo

sure

to cu

rren

cy ri

skTh

e Co

mpa

ny’s

tran

sact

iona

l exp

osur

e to

Eur

o (€

), Br

itish

Pou

nd S

terli

ng (G

BP),

US

Dol

lar (

USD

) and

Sou

th A

fric

an R

and

(ZA

R), f

orei

gn c

urre

ncy

risk

was

bas

ed o

n no

tiona

l am

ount

s as f

ollo

ws:

EURO

GBP

USD

ZAR

EURO

GBP

USD

ZAR

In th

ousa

nds

Fina

ncia

l ass

et

Due

from

rela

ted

part

ies

-

-

-

-

-

-

-

-

Cash

and

cas

h eq

uiva

lent

s

-

1 18

0

-

-

1

103

-

Fina

ncia

l lia

bilit

y

Due

to re

late

d pa

rtie

s

(93

1)

-

Net

exp

osur

e(7

51)

103

(7,5

93)

(11,

237)

(58)

(58)

(1

1,23

7)

(7,5

93)

(5

5)

(4)

(3

)

(5

5)

(3)

(4)

31 D

ecem

ber 2

014

31 D

ecem

ber 2

013


Not

es to

the

finan

cial

sta

tem

ents





The following significant exchange rates applied during the year:

2014 2013 2014 2013N N N N

EURO 207.91 206.97 203.55 223.26GBP 257.76 243.52 261.47 261.31USD 156.45 156.14 167.50 154.78ZAR 15.43 16.60 15.43 15.28

Sensitivity analysis

Profit or loss20 percent strengthening

N'000

31 December 2014EURO GBP USD ZAR

31 December 2013EURO GBPUSD 3,050

ZAR

Interest rate risk profile

2014 2013N'000 N'000

Fixed rate instrumentFinancial liabilities 182,539 -

Reporting date spot rateAverage rate

A weakening of the Naira against the above currencies at 31 December would have had the equal butopposite effect on the above currencies to the amounts shown above, on the basis that all other variablesremain constant.

A reasonably possible strengthening of the Naira, as indicated below, against the EURO, GBP, USD andZAR at 31 December would have increased/(decreased) profit or loss by the amounts shown below. Thisanalysis is based on foreign currency exchange rate variances that the Company considered to bereasonably possible at the end of the reporting period. The analysis assumes that all other variables, inparticular interest rates, remain constant. The analysis is performed on the same basis for 2013, albeitthat the reasonably possible foreign exchange rate variances were different, as indicated below.

(13,410) (6,624)

(140.28) (25,181)

(34,667)

(62,920)

In managing interest risk, the Company aims to reduce the impact of short-term fluctuations in earnings.At the reporting date, the interst rate profile of the Company's interest- bearing financial instruments was

Carrying amount

The Company does not account for any fixed-rate financial assets or liabilities at fair value through profitor loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

(2,278)






NoteCarrying amount Fair value

Carrying amount Fair value

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

Financial assets not measured at fair valueLoans and receivables

Trade and other receivables 16 384,137 384,137 319,618 319,618Cash and cash equivalents 18 414,775 414,775 722,171 722,171

798,912 798,912 1,041,789 1,041,789

Financial liabilities not measured at fair value

Other financial liabilities

Trade and other payables 24 816,084 816,084 644,071 644,071Loans and borrowings 21 182,539 181,440 - -

998,623 997,524 644,071 644,071

The basis for determining fair values is disclosed in Note 4.

27 Contingencies

(a)Guarantees and contingent liabilities

The Company had no guarantees or contingent liabilities in respect of guarantees as at year-end

2014 2013

Trade and other recievables, cash and cash Equivalents,trade and other payables, the Company short term

financial instrument. Accordingly, management believes that their fair value are not materially different

from their carrying values.

(d) Capital management

The Company’s debt to adjusted capital ratio at the end of the reporting period was as follows:

2014 2013N'000 N'000

Total liabilities 1,401,849 1,063,853Less: Cash and cash equivalentsNet debt 987,074 341,682

Total equity 2,016,703 1,823,426

Debt to adjusted capital ratio 0.49 0.19

There were no changes in the Company’s approach to capital management during the year.

The Company is not subject to any externally imposed capital requirements.

(e) Fair valuesFair values vs carrying amounts

The fair values of financial assets and liabilities, together with the carrying amounts shown in thestatement of financial position, are as follows:

(414,775) (722,171)

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and marketconfidence and to sustain future development of the business. Management monitors the return oncapital, which the Company defines as the result from operating activities, divided by total shareholders’equity. Management also monitors the level of dividends to all shareholders.






(b) Pending litigation and claims

(c) Financial commitments

28 Related parties(a) Parent and ultimate controlling party

Other related party transactions

2013 2014 2013N'000 N'000 N'000

Sale of goods and servicesParent 13,112 6,513 (940) Afrox 14,450 17,688

Technical aid feesAfrox 9,237 11,498

Internet service chargeUltimate holding company 11,715 11,933 cAdministrative and othersUltimate holding company 245 - - Afrox 71,375 1,939

(11,933)

for the year ended

2014N'000

The Company is engaged in some legal actions which have arisen in the normal course of business andare being handled by the Company's external legal counsel. Claims against the Company amounts toN279 million. Based on independent legal advice, the directors are of the opinion that the Company willnot suffer any material loss, thus no provision has been made in these financial statements.

The parent company of BOC Gases Nigeria Plc is BOC Holdings Limited UK, incorporated in the UnitedKingdom. BOC Holdings Limited, U.K. owns 60% of the issued share capital of BOC Gases Nigeria Plc. Theultimate holding company is Linde AG, incorporated in Germany.

31 December

(18,424)

(245)(87,640)

(173,394)

16,265

During the year, the Company signed an internet service support agreement with Linde AG. TheCompany also has an active management support agreement with African Oxygen Limited. This ischarged at 3 percent of the Company's profit before income tax.

All outstanding balances with these related parties are to be settled in cash within twelve months of thereporting date. None of the balances are secured nor bear interest. No debts from related parties havebeen impaired and there was no expense for bad debt on related parties.

(11,857)

(157,349)

(12,170) (11,498)

The Company has transactions with its parent and African Oxygen Limited (Afrox), a related party to theCompany by virtue of being a member of The Linde Group. The total amounts due to related parties bynature of the transaction are shown below:

Balancedue (to)/ from

Transaction values

The directors are of the opinion that all known liabilities and commitments, which are relevant inassessing the state of affairs of the Company, have been taken into consideration in the preparation ofthese financial statements.

(b) Transactions with key management personnel

Loans to key management personnelThe Company did not grant any loans to or receive any loans from any key management personnel.

Key management personnel are those persons having authority and responsibility for planning, directingand controlling the activities of the Company, directly or indirectly, including any director of theCompany.






Key management personnel compensation

Key management personnel compensation comprised the following:2014 2013

N'000 N'000

Short-term employee benefits 124,996 121,249Post-employment benefits (pension contribution) 18,029 12,432Other long term benefits (long service awards) 1,189 208

144,214 133,889

Key management personnel and director transactions

29 Operating leasesLease as lessee

30 Subsequent eventsThere were no significant events after the end of the reporting date which could have had a material effect onthe state of affairs of the Company as at 31 December 2014 and the profit for the year ended on that datewhich have not been adequately accounted for or disclosed where necessary.

In addition to their salaries, the Company also contributes to a post-employment defined contributionplan on behalf of key management personnel in the form of pensions, and to the Company's long serviceaward scheme.

The Company leases a number of offices under non cancellable operating leases. During the year ended 31December 2014, an amount of N 7.1 million was recognised as an expense in profit or loss in respect ofoperating lease (2013: N1.37 million). Lease rentals are paid upfront and included in prepayments, which areamortised to profit or loss over the life of the lease.

No key management personnel, or their related parties, hold positions in other entities that result inthem having control or significant influence over the financial or operating policies of the entity.Directors of the Company do not purchase goods from the Company.

Directors of the Company control 0.1 percent of the voting shares of the Company.






2014 2013N'000 N'000

Revenue 2,212,896 2,091,618

Bought in materials and services:

- Local

- Imported

950,003 1,008,232Other income 40,365 957

Finance income 20,884 56,276

Value added by operating activities 1,011,252 1,065,465

Distribution of value added % %

To government as:Income tax 82,322 8 117,565 11

To employees:Salaries, wages and allowances 456,193 45 414,567 39

Retained in the business:To maintain and replace: - Property, plant and equipment 205,511 21 187,327 17To pay proposed dividend 41,625 4 83,249 8

To augment reserves 225,601 22 262,757 25

Value added 1,011,252 100 1,065,465 100

(1,136,604)

(126,289) (108,338)

(975,048)

For the year 31 DecemberValue Added Statement

Additional Information These are other information and do not form part of the financial statement.



2014 2013 2012 2011 2010N'000 N'000 N'000 N'000

Revenue 2,212,896 2,091,618 2,325,714 2,361,617

Results from operating activities 288,238 324,046 472,793 460,148Profit before income tax 307,923 380,322 499,049 487,492Profit for the year 225,601 262,757 304,632 332,573Total comprehensive income for the year 225,601 262,757 304,632 332,573

Employment of fundsProperty, plant and equipment 2,250,364 1,416,288 1,330,890 1,129,828 1,065,807 Prepayments 12,191 2,500 3,181 3,910 3,109 Net current assets 221,124 685,779 559,027 439,687 298,469 Loans and borrowings - - - -

Employee benefitsDeferred tax liabilitiesNet assets 2,016,703 1,823,426 1,643,918 1,334,544 1,142,444

Funds employedShare capital 208,122 208,122 208,122 196,560 196,560Retained earnings 1,808,581 1,615,304 1,435,796 1,137,984 945,884

2,016,703 1,823,426 1,643,918 1,334,544 1,142,444

Per share data (kobo):Earnings per share (Basic) 59 63 73 80Share price at year-end 548 633 625 685Declared dividend per share 10 20 - 36Bonus shares - - 1 for 17 -

Net assets per share 489 438 395 321

(10,612) (228,269)

(999) (223,942)

For the year ended 31 December

(14,613)(234,567)

(18,149)(15,305)(329,626) (262,992)

(122,045)

N'000

Five- Year Financial summary

Additional Information These are other information and do not form part of the financial statement.







Rang

eN

o. o

f Hol

ders

Hol

ders

%H

olde

r Cum

Uni

tsU

nits

%H

olde

rs C

um. U

nits

1 -

100

246

3.

33

284

13

,760

0.

00

13,7

60

10

1 -

1,0

001,

841

21

.93

2,15

5

86

2,07

1

0.21

87

5,83

1

1001

- 1

0,00

04,

617

53

.99

6,76

2

17

,335

,811

4.

17

18,2

11,6

42

100,

001

- 10

0,00

01,

637

19

.01

8,38

4

41

,382

,472

9.

94

59,5

94,1

14

100,

001

- 1,

000,

000

134

1.

59

8,52

0

34

,723

,878

8.

34

94,3

17,9

92

1,00

0,00

1 -

999

,999

,999

13

0.15

8,

533

321,

926,

714

77.3

5

41

6,24

4,70

6

G

rand

Tota

l8,

488

10

0.00

416,

244,

706

100.

00

POSI

TIO

N A

S AT

31S

T D

ECEM

BER,

201

4SH

ARE

SH

ARE

HO

LDER

S A

NA

LYSI

S




58BOC Gases Nigeria Plc Annual Reports & Accounts 2014




Proxy Form

I/We..................................................being a Member/ Members of BOC GASES NIGERIA plc

hereby appoint*.................................................................................. (Block Capitals Please)

or failing him Mr. D. A. Akintola, the Chairman of the meetings as my/our* proxy to act and vote for me/us* at the Annual General Meeting of the Company to be held on June 11, 2015 and at any adjournment thereof.

Dated.........................day of................2015

Shareholder's Signature..............................................................................(See Note (iii) below)

*Delete as necessary

Annual General Meeting to be held at 11.00 am on Thursday, June 11, 2015 in the Ogun/Ondo Hall, Lagos Airport Hotel, Ikeja, Lagos State

NOTES:

THIS PROXY FORM SHOULD NOT BE COMPLETED AND RETURNED IF THE MEMBER WILL BE ATTENDING THE MEETING.

(i) A member (shareholder) entitled to attend and vote at the General Meeting is entitled to appoint a proxy in his/her stead. All proxies should be deposited with the Registrar of the Company not less than 48 hours before the time of holding the meeting. A proxy need not be a member of the Company.

(ii) In the case of Joint Shareholders, any of such may complete the form, but the names of all joint shareholders must be stated.

(iii) If the shareholder is a corporation, this form must be under its common seal or under the hand of some officer or attorney duly authorized in that behalf.

(iv) Provision has been made on this form for the Chairman of the meeting to act as your proxy, but if you wish, you may insert in the blank space on the form (marked*) the name of any person whether a member of the Company or not, who will attend the meeting and vote on your behalf instead of the Chairman of the meeting.

(v) It is a requirement of the law under the Stamp Duties Act that any instrument of proxy to be used for the purpose of voting by any person entitled to vote at any meeting of shareholders must be duly stamped otherwise any vote given or tendered under such proxy shall be void.

(vi) The proxy must produce the Admission Form sent with the Notice of meeting to obtain entry to the Meeting.

RESOLUTION

To adopt the Report & Accounts.

To declare a dividend

To re-elect Mr. A. O. Alabi as Director.

To re-elect Mr. A. R. Alayaki as Director.

To re-elect Mr. J. van Rooyen as Director.

To approve the Remuneration of Directors.

To authorize the Directors to fix the Auditors' Remuneration.

To elect members of the Audit Committee.

FOR AGAINST


Plot 1-3, Block H Oshodi Industrial Estate Oshodi Lagos State

www.bocng.come-mail:[email protected]

BOC GASES NIGERIA PLC

RC 2035

Ha

mb

ak

boc gases nigeria plc financial report... · finanacial statements - 31 december 2014 together with...

Documents