UAC REPORT 2006 2 - Africa Prudential · GCOML and AVM Mouktar Mohammed (Rtd.), President, Nigerian...

2 0 0 5 A n n u a l R e p o r t & A c c o u n t s

03

& Accounts

2005

Report of the Auditors

Report of the Audit Committee

Statement of Significant Accounting Policies

Value Added Statement

Group Profit & Loss Account

Balance Sheet

Cash Flow Statement

Notes to the Financial Statements

Analyses of Sales, Operating Profits &

Employment of Funds

Five-Year Financial Summary

Shareholders’ Information

36

37

38

40

41

42

43

44

58

59

60

C o n t e n t s

Our Vision

Our Mission

Strategic Moves

Company Profile

Financial Highlights

Chairman’s Statement

Notice of Meeting

Board of Directors, Professional Advisers etc

Statement of Directors’ Responsibilities

Directors’ Report

Board of Directors

Salient Performance Graphs

3

4

5

8

9

10

13

14

17

18

32

35

Annual Report

To be No. 1 in our

chosen markets,

providing exceptional

value to our customers.

Our Vision

Our Mission

To experience the

thrill of adding value

to lives and businesses

by being a superior

convenience provider.

Our growth and expansion

in a number of our divisions

and subsidiar ies have been

against odds and an increasing

competitive market environment;

nevertheless, we continue to set

the pace by making strategic moves

that befit our leadership position.

Strategic Moves

L-R: Mr. Ayo Ajayi, MD UACN PLC, Mrs. Mainasara,

repesentative of NAFDACs D-G; Mr. Bode Emanuel, Chairman,

GCOML and AVM Mouktar Mohammed (Rtd.), President,

Nigerian Heart Foundation at the official endorsement of Grand

L-R: Mrs. Mainasara, representative of NAFDAC's D-G; Grand

Pure Soya Oil billboard models (daughter and mother); Mr. Bode

Emanuel, Chairman, GCOML and AVM Mouktar Mohammed

(Rtd.), President, Nigerian Heart Foundation at the official

A drama sketch depicting the benefits of using Grand Pure

Soya Oil at the official endorsement of Grand Pure Soya Oil by

Financial Highlights

Group Company2005 2004 2005 2004

N’000 N’000 N’000 N’000

Sales to third parties 27,118,696 25,116,384 16,982,650 17,374,954

Operating profit before taxation 2,918,381 1,902,113 2,477,128 1,698,567

Exceptional items (193,539) 516,704 (168,204) 501,906

Profit before taxation 2,724,842 2,418,817 2,308,924 2,200,473

Taxation (915,581) (768,646) (533,410) (601,906)

Profit after taxation 1,809,261 1,650,171 1,775,514 1,598,567

Minority interest (179,352) (80,028) — —

Profit after taxation and minority interest 1,629,909 1,570,143 1,775,514 1,598,567

Capital expenditure 3,178,556 1,724,854 2,768,289 1,273,501

Shareholders funds 12,895,629 11,150,034 12,697,246 10,753,343

Earnings per share (kobo) 127 137 138 140Earnings per share (kobo) adjusted 127 122 138 124

Dividend per share (kobo) 100 85 100 85Dividend per share (kobo) adjusted 100 76 100 76

Net assets per share (kobo) 1,074 1,048 988 941Share price at year-end (kobo) 1,700 1,417 1,700 1,417

Company Profile

UAC of Nigeria PLC is largely a Nigerian- publiccompany with 20% of the company’s issued shares heldby Actis International.

As one of the largest diversified businesses in the privatesector, UAC of Nigeria PLC distributes its products and services throughout the country. The company operatesin the manufacturing and processing, service, logistics and warehousing, automobile and real estate sectors of the economy.

UAC of Nigeria PLC is proud of its commercial expertise, efficiency, technical skills and high ethical standards.

owned

R


11

Distinguished Shareholders, Colleagues, Ladies and Gentlemen.

It gives me great pleasure to welcome you to the Annual General Meeting of our Company holding at the Federal Capital City, Abuja and to present the Annual Report and Accounts for the financial year ended 31st December 2005. Before we take a detailed look at our Company's performance, permit me to quickly make some remarks on the operating environment in the last year, in order to put the performance of our Company in proper perspective.

OPERATING ENVIRONMENT

The world economy receded from a 30-year high growth rate of 5.1% in 2004 to approximately 4.4% in 2005. This is not unconnected with natural disasters such as the December 2004 Asian Tsunami and Hurricanes Katrina and Rita in the US. The sustained increase in price of crude oil in the international market and constrained refining capacity also took its toll on the global economy. However, growth performance in various regions of the globe was mixed.

At the domestic level, the year under review was challenging on many fronts. Consumer purchasing power remained flat as inflation rose to 18% against the budget’s single digit target. Social unrest in the Niger Delta intensified with negative consequences for business and economic activities in the area. As crude oil prices rose to phenomenal heights, attendant adjustments in local pump prices significantly increased local energy cost; moreso, when reviewed against dismal supply situation from the national electricity grid.

Infrastructure deficit in the economy remains a critical challenge to economic progress, as we are increasingly hobbled by avoidable cost, with negative impact on margins, as low consumer purchasing power hampers efforts at full cost recovery.

Significant gains were witnessed in macro-economic management as Gross Domestic Product (GDP) increased by 8.2%. Interest rate softened as the Central Bank of Nigeria (CBN) reduced Minimum Rediscount Rate (MRR) to 13%, with prime lending rate at approximately 17%. Huge accretion to

external reserves and improvement in overall balance of payment brought initial appreciation and subsequent stability to Naira/Dollar

exchange rate at N132.8 to the US$. Government negotiated an “exit” agreement on external debts resulting in debt cancellation of about US$18b. This has significant upside, as it will improve the country's access to foreign capital (as reflected by the recent BB-

Fitch Ratings), release resources to address infrastructure and social development agenda, as well as ensure a major

Chairman’s Statement

restructuring of our public and external balance sheet.Encouraging momentum was recorded in the Government’s anti-corruption agenda, as the prosecution of investigated cases continued. Banking reforms led to the consolidation of the motley crowd into 25 institutions, with expectations that the sector will now be in a position to support real sector development.

FINANCIAL PERFORMANCEDespite the difficult operating environment, your company achieved respectable results in 2005. Turnover for the group was N27.126 billion, a growth of 8% over N25.11 billion recorded in 2004.

Operating profit for the year was N2.92 billion, representing a growth of 53.7% over N1.90 billion in 2004. Given the improved and impressive performance, the board has recommended for your approval a dividend of N1.00 per share, an increase of 17.6% over the previous year. This development is significant in that we are now a triple digit dividend paying Company.

As part of our ongoing efforts to focus on the true sources of value creation for our businesses, we restructured operations in UAC FOODS Division and exited the Bread and Agro business categories. In so doing, we took steps to ensure value preserving solutions, by leasing out the Agro facility and are currently pursuing similar arrangement with interested parties for our Bread plants in Lagos, Suleija and Port-Harcourt.

The dividends of the restructuring exercise are already manifesting in improved efficiencies and management focus in the Snacks and Ice-cream categories.

LOOKING FORWARDWe are hopeful that the business climate will improve. The Pensions reforms should mobilize private capital for investment and help address the infrastructure deficit. The 25 emerging banks will move more toward financial intermediation in their liability assets creation rather than trade finance and government treasury bills; thus, improving credit access to the real sector. Budgeted spending in 2006 will ameliorate deficiencies in infrastructure and alleviate poverty and the sustained campaign for fiscal prudence and anti-corruption will benefit corporate Nigeria. Improved country risk rating will also improve foreign investment and reduce cost of business.

Subsidized loan to the Agricultural sector should moderate food prices and improve employment. However, as a pre-election year, there will be significant inflationary pressures as “political spending” will lead to liquidity challenges and test macro-economic stability.

We are encouraged by Government and international efforts at containing the outbreak of Avian Influenza Virus in the country, as this has significant risk for the poultry industry and consumer confidence in patronizing chicken products. The initial press reports on this issue, I must say, were indeed “scare mongering” rather than helpful, especially in educating the populace on safety measures that mitigate the risk of human contraction of the virus. Increasingly, good sense and judgment will prevail as stakeholders are involved in concerted efforts at public enlightenment.

Whatever the challenges, we are looking ahead with confidence, as we strive to enact winning and innovative strategies in managing our brands, processes and people. We are confident we will win.

CONCLUSIONDistinguished Shareholders, I wish at this stage to express appreciation to the management and staff of our company led by Mr. Ayo Ajayi, for their dedication, loyalty, professionalism and resourcefulness.

We thank you, our esteemed Shareholders, for your continued valuable support and understanding.

I also want to express my profound gratitude to my colleagues on the Board for their guidance and support.

Long Live UAC of Nigeria PlcLong live the Federal Republic of NigeriaGod bless you all.

Lt Gen. M. I. Wushishi (rtd), CFR, FSS, PSC

Chairman’s Statement cont’d

ChairmanLt General M. I. Wushishi (rtd), CFR, FSS, PSC

10U A C O F N I G E R I A P L C



NOTICE IS HEREBY GIVEN THAT the next Annual General Meeting of the Members of UAC OF NIGERIA thPLC will be held at the TRANSCORP HILTON HOTEL, ABUJA on Wednesday, 17 May, 2006, at 10.00

o'clock in the forenoon in order to transact the following businesses:

Ordinary Businessst1. Lay before the Members the Report of the Directors, the Consolidated Balance Sheet of the Company as at 31

December 2005, together with the Consolidated Profit & Loss Account for the year ended on that date and the Reports of the Auditors and Audit Committee thereon.

2. Declare a Dividend

3. Authorise the Directors to fix the remuneration of the Auditors

4. Re-elect Directors

5. Elect Members of the Audit Committee

Special Business

6. Fix the remuneration of the Directors

A Member of the Company entitled to attend and vote at this Meeting is entitled to appoint a proxy to attend and vote instead of him, and such a proxy need not be a member of the Company. A proxy form is enclosed and if it is to be valid for the purposes of this Meeting, it must be completed and deposited at the Registered Office of the company not less than 48 hours before the time for holding the meeting.

thDated this 20 day of April, 2006.

By Order of the Board

O. A. MajekodunmiCompany Secretary

Registered Office:Niger House1-5 Odunlami StreetLagos

DividendIn view of these results, the Directors recommend to members the payment of a dividend of N1.00 per 50k share. A resolution to this effect will be put to the meeting for the approval of the members.

Dividend WarrantsIf payment of the dividend is approved, the warrants will be posted on 16th June, 2006 to Shareholders, whose

thnames are on the Register of Members on 10 May, 2006.

Closure of Register and Transfer Booksth thThe Register of Members and Transfer Books will be closed from 10 to 12 May, 2006, both dates inclusive, for

the purposes of payment of the dividend.

Audit CommitteeThe Audit Committee consists of three (3) Shareholders and three (3) Directors. Any member may nominate a shareholder as a member of the Committee by giving notice in writing of such nomination to the Company Secretary at least twenty-one (21) days before the Annual General Meeting.

Unclaimed Share Certificates & Dividend WarrantsShareholders are hereby informed that a sizeable quantity of share certificates and dividend warrants have been returned to the Registrar as unclaimed. Some dividend warrants have neither been presented to the bank for payment nor to the Registrar for revalidation. Affected members are by this notice please advised to contact the Company Secretary or Registrar or call at the Registered Office of the Company during normal business hours.

Notice ofAnnual General Meeting

O. A. Majekodunmi Company Secretary


Board of Directors, Professional Advisers etc.

Chairman Nigeria, 2004, the record of Directors' Lt Gen. M. I. Wushishi (Rtd), CFR, FSS, PSC attendance at Board Meetings during the year

2005 is available for inspection at this Annual Managing Director/Chief Executive Officer General Meeting.Mr. Joshua Ayodele Ajayi

Company SecretaryDirectors O. A. Majekodunmi

Alhaji (Dr) Mohammed Hassan KogunaUAC Registrars Limited

Senator Udoma Udo Udoma Registrar

Mr. Victor Gabriel HammondRegistered and Transfer Office

Chief Samuel Olaniyi Bolarinde Niger House1-5 Odunlami StreetMr. Olayiwola Adetunji AdetomiwaLagosMr. Larry Ephraim Ettah

Dr. Nkosana Donald Moyo AuditorsPriceWaterhouseCoopersMr. Mohammed Mohammed WahbyChartered Accountants

Mr. Hywel Rees-Jones (alternate to Dr. Nkosana D Moyo) 252E Muri Okunola StreetVictoria Island

Retirement by Rotation Lagos.In accordance with the Articles of Association of the Company, Senator Udo Udoma, Chief Samuel Olaniyi In accordance with Section 357(2) of the Bolarinde and Mr. Victor Gabriel Hammond retire by Companies & Allied Matters Act, (CAP C20) rotation at this meeting and being eligible, offer Laws of Federation of Nigeria, 2004, themselves for re-election. PriceWaterhouseCoopers will continue in office

as Auditors without a resolution being passed. Record of Directors' Attendance

A resolution will, however, be proposed at this In accordance with Section 258(2) of the Companies &

meeting authorizing the directors to fix their Allied Matters Act, (CAP C20) Laws of Federation of

remuneration.

Mr. J. A. AjayiManaging Director/

Chief Executive Officer

The following statement, which should be read in conjunction with the Auditors’ statement of their responsibilities as set out in their report on page 36, is made with a view to distinguishing for shareholders, the respective responsibilities of the Directors and the Auditors, in relation to the accounting requirements of the companies in the group.

In accordance with the provisions of the Companies and Allied Matters Act,

. the directors are responsible for the preparation of annual financial statements which give a true and fair view of the position of the company and the group and of the profit or loss for the financial year.

The directors’ responsibilities also include ensuring that:

(a) appropriate internal controls are established to safeguard the assets of the company and the group, and to prevent and detect fraud and other irregularities;

(b) the company keeps accounting records which disclose with reasonable accuracy the financial position of the company and the group and which ensure that the statements comply with the requirements of the Companies and Allied Matters Act, .

(c) the company and the group have used suitable accounting policies consistently applied and supported by reasonable and prudent judgement and estimates and that all applicable accounting standards have been followed;

It is also the responsibility of the directors to be satisfied that it is appropriate for the financial statements to be prepared on a going concern basis unless it is presumed that the company and the group will not continue in

(CAP C20) Laws of Federation of Nigeria,

2004

(CAP C20) Laws of Federation of Nigeria, 2004

Statement of Directors’ Responsibility

&S L OA ILE R M

E ILC LSD

N LTA DR .G

&S L OA ILE R M

E ILC LSD

N LTA DR .G

18U A C O F N I G E R I A P L C 2 0 0 5 A n n u a l R e p o r t & A c c o u n t s

19

Directors’ Report

The Directors have pleasure in submitting to the Members, the Consolidated Balance Sheet as at 31st December, 2005 together with the Consolidated Profit and Loss Accounts for the year ended on that date, showing a net consolidated profit of N1,629,909 million after providing for taxation of N915.581 million and the transfer of Minority Interest share of profits amounting to N179.352 million.

The report also covered a review of the business performance in the last financial year as well as a look at future prospects.

DIVIDENDThe Directors have recommended the payment of N1.00 dividend per 50k share for the year.

RETAINED PROFITThe profit retained for the year in the business will amount to N345.285 million made as follows:

2005 2004N'000 N'000

Profit for the year after Taxation andMinority Interest 1,629,909 1,570,143

Profit for the year retained 345,285 599,159

PRINCIPAL ACTIVITIESUAC of Nigeria Plc is a diversified business with activities in the following principal sectors: Manufacturing and Processing, Warehousing & Logistics and Real Estates.

UAC FOODSThe business recorded a strong growth in both turnover and profitability in the snacks and ice cream categories. However, this was diluted by unprofitable operations in Agro and bread.

The exit from Agro, Bread and Drinks was part of a refocus strategy to reposition the unit for sustainable growth and profitability.

The premise-based channels are being developed to further deepen the visibility of the products.

The Ice Cream category sustained its leadership position during the year. New investments were made in cold rooms, secondary distribution infrastructure and strategic warehousing alliance was entered into with MDS to improve the visibility and availability of Supreme brand of Ice cream.

MR BIGG'SThe business grew in both turnover and profitability. Mr Biggs's, the largest food retail business in Nigeria continued its dominance of the market by adding 42 restaurants thus increasing the number of restaurants pan Nigeria to 160 by end of 2005.

In the course of the year, three new exciting meals - Heritage Pottage, Dalucious Pasta Rice & Beans and Farm House Beans & Dodo were introduced in test locations to give our esteemed customers wider variety. The national roll-out of the meals is scheduled for 2006.The business also introduced a new restaurant concept tagged "Da Nu Experience" to give our esteemed

THE COMPANY

customers an enhanced ambience.

The Business remained profitable although it suffered from a downturn in the fortunes of its key clients in 2005.

Despite the harsh economic environment, the business sustained its Number One position in the outbound logistics industry in Nigeria with the addition of six new clients in the pharmaceutical and Telecoms Logistics market. Facilities upgrade and expansion recorded further attention.

The unit commissioned its Ultra-Modern Northern Redistribution Hub in Abuja and the National Pharmaceutical Distribution Centre in Lagos. It also expanded its Haulage and Redistribution businesses significantly during the year.

Despite the unprecedented increase in the cost of raw materials, the company posted impressive results.

The Feed business surpassed sales projections one year after the installation of the new Automated Feed Mill plant.

The Nigerian Heart Foundation endorsed Grand Pure Soya Oil as the first heart-friendly oil in Nigeria. This has further boosted demand for the brand.

The business had marginal growth in revenue due to tough and competitive market environment but recorded gains in efficiency.

The restructuring exercise of the business continued with its recapitalization to provide the required working capital, reduce its debt and put it on the path of sustainable performance in the highly competitive market.

To ensure that the business records improved volume growth, more aggressive marketing and distribution strategy has been put in place. The results of the various strategies are expected to impact positively on the company’s performance in the coming year.

The Company consolidated its leadership position in the Chemical/Paints sector of the Nigerian economy with improved turnover and profit.

Dulux blazed the trail by launching colour laboratory centres in Lekki, Victoria Island and Ikeja by offering over 12,000 colours to discerning customers.

Similar facilities were introduced in Abuja and Port Harcourt.

The business went through a difficult year as a result of high production cost and influx of new and “second hand” brands of vehicles from Asian countries.

The government removed duty incentives granted bonafide assemblers, and introduced the new ECOWAS duty tariffs/(CET) towards the end of the year, which granted completely built vehicles (CBU) lower duty rate of 10% while retaining 5% duty on completely knocked down units (CKD).

MDS LOGISTICS

SUBSIDIARIES

GRAND CEREALS & OIL MILLS LIMITED

SPRING WATERS NIGERIA LIMITED

CAP PLC

GM NIGERIA LIMITED

Directors’ Report cont’d


21

Directors’ Report cont’d

The Company launched the “Tough Trio”- Isuzu Pick-ups, FTR and Maxi Bus - in September 2005 to increase its product range and improve turnover.

WARM SPRING WATERS LIMITEDGossy has continued to enjoy market acceptance and increased penetration especially in the South West. Although turnover tripled in 2005, the business was yet to attain critical mass and profitability due to tough competition in the bottled water market. Plans are on to increase visibility of the brand in more cities in the country and improve distribution to push up sales volume.

(CAP C20) Laws of Federation of Nigeria, 2004

DIRECTORS’ INTERESTIn Ordinary Shares

December 2005 December, 2004Directors ordinary shares ordinary sharesLt. Gen. M.I. Wushishi (Rtd), CFR, FSS, PSC 464,000 464,000Mr. J. A. Ajayi }direct 2,000,000 2,000,000

}Indirect 3,020,650 3,020,650Mr. O. A. Adetomiwa 200,770 200,770Chief S. O. Bolarinde 474,090 474,090Mr. L. E. Ettah 131,250 131,250Mr. V. G. Hammond 2,878 2,878Alhaji M. H. Koguna 377,337 364,837Mr. U. U. Udoma} direct 838,052 838,052

}Indirect 9,325,180 9,325,180

IN CONTRACTSSome of the directors have given notices for the purposes of Section 277 of the Companies and Allied Matters Act,

to the effect that they are members of some specified companies which could be regarded as interested in any contracts with which the group was involved during the year under review.

CHARITABLE GIFTS AND OTHER DONATIONS N

Scholarships (Secondary Schools/Higher Education) 4,646,000Kerang Community Development Project 300,000Mr. Bigg’s - “Bigg Heart Initiatives”/Sponsorships 12,993,000

17,939,000

DISTRIBUTORS/CUSTOMERSThe proportion of our goods and services handled by distributors is about one-tenth of our turnover. These distributors are appointed solely on the strength of the level of business they can make and the degree of support services they can provide to customers. Distributors are spread across the length and breadth of the country. Among the major ones are:


23

Directors’ Report cont’dDirectors’ Report Cont’d

UAC FOODS Double Seven KadunaRepiko Kaduna

Snacks Estate Supermarket AbujaRodansy Enterprises LagosO Okhuakhua LagosKalesadex LagosR. Mekwuye LagosIkuyajesin LagosP Agunugo LagosNkechi Ekwufolu OnitshaMadonna Foods OwerriKingsley Ugwu EnuguBasat Enterprises AbeokutaMrs Pogoson Ijebu-OdeMrs Sigbeku ShagamuP O Enterprises PHCSodel Stores PHCVivian George PHCKaysic Food Mart PHCDomfrank BeninJames Njoku BeninAustella Kim AgborJoseph Umeanyi AbujaGillytex Investment AbujaBenchim Nig. Ltd. Abuja

ICE CREAMShoprite LagosBig Treat LagosSweet Sensation LagosTantalizers LagosTasty Fried Chicken LagosFestus Amede LagosDomino Stores LagosMacdons LagosChris Supermarket AbeokutaAdonis Supermarket IbadanTonnyson LagosTriangle Fast Foods LagosChris Ani Enterprises LagosClassic Restaurant LagosKoseyin Link Lagos GRAND CEREALS & OIL MILLS LIMITEDYinkus Delite IbadanHappy Bite Confectionary OnitshaHappy Bite Confectionary EnuguValue Mart LagosRepiko Supermarket Ijebu-OdeMrs. Nwachukwu WarriCrunchies Fried PHCEsco Super Stores WarriZoro Supermarket BeninHappy Bite Confectionary PHCOasis Bakery Kaduna

SPRING WATERS NIGERIA LIMITEDJoniel Nigeria Ltd. AbaGodsway Nig. Ltd Abuja Royal Pacific Ltd AbujaLe Maridien Hotels & Towers AbujaSheraton Hotels & Towers AbujaTranscorp Hilton AbujaJonia Ventures BauchiMrs Ayuba E Yanko Birnin KebbiDominco Ltd CalabarEasy Main Stores DamaturuOmni Trading EnuguGimba Muazu GombeAlh. Lawali Musa Kaura GusauPaddy & Associates GwagwaladaHarams Investment JosAnthony Ebebe JosBisaldip Nig Ltd KadunaChanchangi Airlines KadunaDalha Garba & Co KanoAlh. Ali Swan KanoRoyal Tropicana KanoTahir Guest Palace KanoM Y Sayaya KatsinaElcon Enterprises LafiaChris Amobi Ajah LafiaNataco Nig. Ltd LokojaTahbuji Nig. Ltd Maiduguri M S Onwuka & Sons MakurdiHajia Onyiaminat ShendamAlh Kalambaina SokotoGingiya Hotel SokotoAl Gee Ltd SulejaThessy Nwogbu Inv. Ltd SulejaJames Zira YolaJ A Onabowale Zaria

Industrial CustomersGuinness Nigeria Plc IkejaNigerian Breweries Plc IganmuBendel Brewery Limited BeninPAL Brewery Limited AnambraIntecil Nigeria Limited EnuguNycil Nigeria Limited OttaYunusa Salisu JosFelicia Nwosu JosP U Nwosu Jos

Mega Distributors Intermotors LagosTCL Foods Limited Jos SCOA Motors LagosMariama Fatima Abuja Elim Motors LagosLTS Limited Kaduna

Daayad Cars & Accessories Ltd LagosUnik D Limited Aba

Aquaphill Motors CalabarBernirose (Nig) Ent. EnuguBap Services Limited PHTopodata Surveys Inc. Owerri Madunka Motors Limited KadunaEzeora C Enterprises Onitsha

Tee & Bee Stores Ltd Lagos Al-safa Motors AbujaPhed Agrovet Nigeria Ltd KanoFunmork Enterprises Ibadan

CHEMICAL & ALLIED PRODUCTS PLCJehns Enterprises Lafia

Na Allah Inv. Limited LagosEl-Ibrahim Enterprises MaiduguriFirst Ebony Inv. & Allied Serv. Ltd LagosOdafe & Yovwe Food & Agric Co. WarriEdeoga Nig Ltd Abuja Tophiro Nigeria Limited OwerriZango General Merchants Kano Kebbi Vet Pharma & Agric Eqp. KebbiSpringwood Inv. Ltd AbaAgro Mercantile Concept PHF N Osisiego & Sons OnitshaRoyal Pacific Nig. Ltd AbujaAlhaji Gyaran & Sons JosJacine Limited UyoAll size Nigeria Limited P/Harcourt Nikseg Foods Ltd BeninKapital Int. Consulting & Inv. Co. BeninAnimex Nigeria Limited CalabarN. Dennis & Co. Ltd MaiduguriNna Adama MinnaGlomola Nigeria Ltd IbadanOk'Akpo International Group GombeOlaosebikan Stores Nig. Ltd Lagos Kandung Marketing KafanchanT. Balogun Enterprises LagosFlorigee Pharmaceuticals Aba

WARM SPRING WATERS NIGERIA LIMITED Taron Ventures Limited Ado-EkitiMoybay Nig. Limited AkureFemo Sharp Corner Ibadan/OshogboAarinola Adenuga Ent. IjebuOdeTopwall Agency AbeokutaAirport Hotel LagosPremier Hotel IbadanTCC Ogere OgunTimsop Enterprises AbujaMofesan Ventures LagosElder G.A. Ojo Kaduna

Brabusco/Flour Customers T & Y Ventures PHCTunfun Group of Companies IlorinAlhaji Ali Hassan Maiduguri

Alhaji Abba Aji "

Alhaji Ali Damaturu "

Alhaji Bukar Maishinkafa "

Alhaji Mustapha Gumsa "

Alhaji Musa Ali "

Alhaji Umar Jakana "

Gerald Okenwamadu Lagos

Chudras Ventures Lagos

A&P Foods Limited Lagos

GM NIGERIA LIMITED

Gils Lakin & Co Limited Lagos

Road Truckers Nigeria Limited Lagos

Key DistributorsUmejison Stores AbaD D & Sons BeninUmar Shinkafi SokotoE Y N MubiAlfas Agro Farm MakurdiAzubuike Okonkwo Orlu Frankama Enterprises GbokoCema Agency LagosAliyah & Amir Ventures ZariaKeziem Stores Aba

EMPLOYMENT POLICY AND EMPLOYEE WELFARE, HEALTH AND SAFETYIt is the policy of the group that there is no

discrimination in the employment, training and career

development of all categories of people including

disabled persons.

The health and welfare of the work-force are prime in

all our activities. Employees enjoy free medical

services at the Group Clinics located in Lagos Island,

Apapa, Oregun, Matori, Ojota, Kano, Kaduna, Zaria,

Jos, Sapele, Benin, Warri, Aba, Port Harcourt and


Directors’ Report Cont’d

EMPLOYEE INVOLVEMENT AND TRAININGOnitsha, which are supervised by full-time Medical Regular routine meetings are put in place to ensure Doctors and qualified Nurses. Besides, special exchange of ideas between staff and management arrangements are made with recognised Hospitals through Joint Consultative Committees, Briefing Sessions as retainers to provide medical attention to and Company Council Meetings. Team briefing

employees in locations where we have no clinics.approach is adopted in some areas and Communication Audit has been embarked upon to stimulate and monitor

It is also our policy to ensure that our work the level of employee awareness on matters of concern to environment is safe and clean. Towards this end, them.the group enforces strict adherence to safety rules and practices through its Safety Committees in Our policy recognises human resources as the most various locations. important asset of the organisation. It is therefore

imperative to retain and motivate skilled work force Safety and Fire Drills are regularly organised to keep through systematic training and development. employees alert at all times. Consequently, training forms part of individual

development towards achieving excellence in Heavily subsidised canteen services are provided performance of day-to-day activities. We have a while recreational facilities and staff clubs are Training/Seminar Centre at Apapa.available in various parts of the country.

Various in-house courses are also supplemented by external courses for employees within and outside Nigeria.

We encourage self-development schemes which enable employees to improve themselves academically and professionally in their chosen career.

By Order of the Board


13th day of April, 2006.

CORPORATE GOVERNANCEThe Board is responsible for the governance of the Company, keeping of proper books of accounts which disclose with reasonable accuracy from year to year, the financial position of the Company and ensures their compliance with the provisions of the Companies and Allied Matters Act, (CAP C20) Laws of Federation of Nigeria, 2004 as amended. They are also responsible for safe-guarding the assets of the Company by taking reasonable steps for the prevention and detection of fraud and other irregularities.

During the year under review, the Company was managed by a Board of ten members, made up of three executive directors and seven non-executive directors including the Chairman. It ensured the implementation of the Company's objectives through the following committees.

Nos. Committee Membership Status Number of Meetings in the year

1. General Lt. Gen M I Wushishi ChairmanPurposes Mr. J A Ajayi Member

Mr. O A Adetomiwa “ 4Mr. L E Ettah “Chief S. O. BolarindeMr. V G HammondDr. N D Moyo “

2. Compensation Lt. Gen M I Wushishi Chairman 1Mr. J A Ajayi MemberSenator U U Udoma “Mr. V G HammondDr. N D Moyo “

“ Mr. L E Ettah Member/Secretary

FOODS CAP PLC MR. BIGG’S MDS GMNL SWAN GCOML WSWNL

BRANCHLOCATIONS

Aba

Abeokuta

Abuja

Ado-Ekiti

Akure

Asaba

Awka

Benin

Bida

Calabar

Eket

Enugu

Gombe

Gusau

Ibadan

Ijebu-Ode

Ikogosi

Ikorodu

Ilorin

Jalingo

Jos

Kaduna

Kano

Katsina

Lagos

Lokoja

Maiduguri

Makurdi

Maya

Minna

Nnewi

Ondo

Onitsha

Oshogbo

Ota

Owerri

Oyo

Port-Harcourt

Sapele

Sokoto

Ughelli

Umuahia

Uyo

Warri

Yenagoa

Yola


29


MR BIGG'S LOCATIONS 2005

ABA

BAUCHI

ABAKALIKI BENIN

ABEOKUTA

ABUJA

CALABAR

EKET

ENUGU

ADO EKITI

GHANAAGBOR

AKURE

IBADAN

ASABA

AWKA

BAYELSA

1, Factory Road, Aba

180, Faulks Road, Aba

4, WaterWorks/Gunning Road 57 Sapele Road, Benin

Plot 201 Benin/Lagos Road, Ugbowo

107, Ekenwan Road, BeninPlot 2, Obafemi Awolowo Way, Ibara

59 Benin Agbor Road, Benin

57, Akpakpava Road, Benin

Ihama Junction, Elema Qtrs, Along Airport Rd.45, Lagos Crescent, Garki Abuja

Pt368 Kashim Ibrahim/Aminu Kano Cr. Wuse Mobil

Filling Station, Asokoro, FCT Abuja 50 Kizito Attah Way, CalabarPlot 3 Addis Ababa Crescent Wuse Zone 4 Murtala Mohammed Highway, CalabarK 77 Sultan Dasuki Way, Kubwa Abuja

Plot 525 Jabi District, FCT Abuja

Eteibi Street, Eket, Akwa Ibom3rd Avenue, Gwawrinpa Estate, Abuja FCT

Beside Nyanya Shopping Complex, Nyanya

193, Izom Road, Gwagwalada26,Okpara Avenue, Enugu

64, Chime Avenue, Enugu

97, Agbani RoadOpposite Fajuyi Park, Ado Ekiti

Akasanoma Rd, Opp. Calvary Baptist, Near Kwame Agbor-Asaba Expressway, Agbor

Nkrumah Cide, Accra

Plot 1, 25 Street Control - Dansoman Housing EstateECWA Church Premises, Oba Adesida Rd.

Oyemekun Road, Akure

38 Oba Adebimpe Road, Dugbe

1, Oluyole Way, Bodija329 Nnebisi Rd, Opp. State Stadium, Asaba Mobil Filling Station, Oluyole Estate

Idi Ape Road, Bashorun

21 ,Lagos Road, Elewura B/Stop, Challenge 268 Nnamdi Azikwe Rd, Awka

Polytechnic Rd, Sango, Ibadan

Along Abeokuta Rd., Apata Ganga, Ibadan

Opoloepie, Yenagoa Bayelsa State

Yandola Road, Opp. SSS Office

197, Awolowo Road, Oke-Ado, Ibadan 26 Broad Street, Lagos

Iwo Road Roundabout By Lamidi Ajadi & Sons Ltd. AP Filling Station, Oba Akran Avenue, Ikeja

16 Creek Road, Apapa

126 Ojuelegba Rd, Tejuosho96, Ibrahim Taiwo Road, lIorin 52 Allen Avenue Ikeja17-21 Murtala Mohammed Way, llorin 84 Ozumba Mbadiwe Rd., Victoria Island29, Bishop Close, GRA, llorin 1 Acjon Plaza 1st Avenue Festac Town

77, Bode Thomas Street, Surulere

45, Awolowo Road, Ikeja124 Folagbade Street, Ijebu-Ode

145, Broad Street, Lagos

16, Akin Adesola St, Victoria Island

Mobil Filling Station, MarylandNo 27, Aba Road, lkot Ekpene, Akwa Ibom StateDamilola Plaza, 22 Road, Festac Town

23, Alaba International Mkt. Rd, Ojo, Alaba

8 Osolo Way, Ajao EstateBenin-Asaba Expressway

7 Ago Palace Way, Okota

21 Coker Road, lIupejuOpposite First Bank, Lagere, Ile-Ife 166 Ogunlana Drive, Surulere

Plot 1 03 Isheri/Omole Road, Omole Phase 1

Mobil Filling Station, Abule-Egba117, Calabar Road, Ikom

Mobil Filling Station, Alakija Bus stop

Mobil Filling Station, Agidingbi

Mobil Filling Station, Lekki Roundabout, Lekki B239, Imo Street, Ilesha

143, Egbeda Road, Akowonjo

35, Lagos Street, Ikorodu40/42 Ahmadu Bello Way, Jos 149, 3rd Av. A Close, FHA Gowon Estate, Ipaja37B Yakubu Gowon Way, Jos Mobil Filling Station, Palm Avenue Mushin

Mobil Filling Station, Bdg. Exp. Way By Festac

Mobil FilIing Station, Ijaiye Ogba, Ogba2, Yakubu Gowon Way, Kaduna

2 Adedeji/Ogudu Road, Ogudu9A, Kachia Road, Kaduna

Mobil Filling Station, Itire Road, Surulere 20, Isa Kaita Road

Mobil Filling Station, GbagadaKaduna Polytechnic

Mobil Filling Station, Kirikiri Road,

Mobil Filling Station, Aguda Surulere

Idiroko Road, Sango-Ota31, Niger St. (Gidan Niger), Kano 3 Davies Street, off Demurin St, Ketu53 New Road, Sabon Gari, Kano70 Ikosi Road, Ketu Ikosi

8 Boladale Street, Oshodi51 Marina, Lagos.

89, St Finbarrs Rd, Akoka,Tinubu Street, Lagos

Mobil Filling Station, Alaguntan

ILORIN

IJEBU - ODE

IKOT EKPENE

ISSELE-UKU

ILE-IFE

IKOM

ILESHA

JOS

KADUNA

KANO

LAGOS


31


45, Diya Street, Ifako Gbagada 3, Yaba Street, Ondo

Mobil Filling Station, Oregun Rd, Ikeja

Oke Afa, Isolo, Opp. Jakande Est. Ikotun-Ejigbo Rd 75, Upper New Market Rd., Onitsha133 Iju Road, Iju23, Limca Road, Nkpor129 Apapa Rd., Ebute Metta

2 Bajulaiye Rd., Morocco Area

48 Ikorodu Road, Jibowu-Fadeyi2, Awolowo Road, Igbonna, Oshogbo

30, Adesina Street, Ijeshatedo

128, Sagamu Road, Ikorodu

Beside Alimosho LG Council, IkotunTara Road, Ogbomosho

Along Herbert Macaulay Road, Yaba

Lagos-Epe Expressway, Ajah

30, Sipeolu Road, Shomolu 97, Okigwe Road, Owerri, Imo State 61b Charity Road, New Oko Oba Plot 4861kenegbu Layout, Owerri25b, Toyin Street, Ikeja

Old Departure Hall, Beside Inland Bank, Local Airport

7, Azikiwe Road, P/Harcourt18, Olowu Street, Off Obafemi Awolowo Way, Ikeja

Plot 47 Trans Amadi Industrial Layout1, Akanni Showunmi Street, Beesam, Mafoluku

212, Aba Road

18/19 Rumuibekwe, Opp. Shell Residential Est.

6, Olu-Obasanjo Road145, Murtala Mohammed Way, LokojaEast West Rd, Opp. UniPort, Chioba Town R/State

50, Aggrey Rd, P/Harcourt

3, Krikasama Road, Maiduguri No 472 Ikwere Rd., Rumuigbo

NGAB Filling Station, Bama Rd., Maiduguri Along East West Rd., Rumukurushi Habour Road, Onne

F7 Abacha Road, GRA 111, PH

28, Okoporo Road

Off Port Harcourt/Aba Expressway, Opp. Air force Base, 1, Otukpo Road, MakurdiStadium Road

By YKC Filling Station, Woji

Tunga Bosso Road, Minna, Niger State 189, Ahoada/Omou Ed, Omokhu

Aba/Port Harcourt Expressway, Obigbo

67, Aba Road, GarrisonIgwe Orizu Road, Nnewi, Anambra State 107, Old Aba Road, Rumubiakanni

Ughelli/Patani Rd, Beside Coca-Cola Depot2, Enugu Road, Nsukka

ONITSHA

OSHOGBO

OGBOMOSHO

OWERRI

PORT HARCOURT

LOKOJA

MAIDUGURI

MAKURDI

MINNA

NNEWI

UGHELLINSUKKA

UMUAHIAONDO

Aba Road, Umuahia, Abia State 2, Mayne Av, Opp. FBN Plc, UMUAHIA

UAC Hse, Green Field, Ekit Iram, 11 Ikot Ekpene Rd,

UYO

Plot 1 Dominic Utuk Avenue, Govt. Layout.

82 Ikot Ekpene Rd., Uyo

Plot 8, Biu Rd, Adjacent Zenith Bank, GOMBE

36, Trading Layout, Canteen Rd, Opp. Old Cabinet

Office, GUSAU37, Airport Road, Warri3, Makera Rd, opp Kakuri Police Station, KADUNA19 Udu Rd., Beside Esco S/mkt Effurun Delta State1-4, Ahmadu Bello Way, KADUNA

33, Niger Street, KANO

12, Nagogo Rd, KATSINAF3 Kaduna Rd., Sa bon Gari, Zaria

10, Nguru Rd, MAIDUGURI

8, Abdullahi Fodis SOKOTO

4, Manchester Rd., YOLA

Mc'Iver, 6 Cole Street, LAGOS

16, Creek Road, Apapa, LAGOS Idu Industrial Estate, ABUJAUAC Complex, Ibara R/About ABEOKUTA 10 12 Maiduguri Bye-Pass, BAUCHI147, Ajilosun St, Ado/Ikere Rd, ADO EKITI Along Zungeru Rd. Opp C/Cola Depot, BIDA27 Oba Market Rd, BENIN 5B, Hospital Road JALINGO201 Folagbade Street, IJEBU ODE 10, UAC Main Bldg , UBA Road, Waterside LOKOJA111, Murtala Mohammed Way, ILORIN 6, Beach Rd, JOS2, Odedibo St., Idi Isin, ONDO 28, Murtala Mohammed Rd, JOS3, Station Rd, off Gen. Post Office, OSHOGBO 1 Beach Rd, MAKURDIIshola Motors Building, Ogbomosho Rd, OYO Shiroro Road, MINNA6, Palm Avenue, SAPELE Along Kaduna/Lokoja Exp. Way, Dumex Junction, CFAO Premises, Opp. Urhobo Coll. Warri-Effurun Rd, SULEJAWARRI 42, Kashim Ibrahim Way, Bakin Kogi Area, YOLA

8, Factory Rd, ABA Plot 32 Kudirat Abiola Way, OREGUN13, Factory Road, ABA

70/72 Marina Rd, CALABAR

26, Okpara Avenue, ENUGU

1, Okpara Avenue, ENUGU

Plot 5, Niger Bridge, Industial Layout, ONITSHA

3, Orgi Mbieri Exp Rd, off K5 Okigwe Rd, OWERRI

4, Forces Av. Old GRA, PORT HARCOURT

UYO

NORTH NORTH DEPOTS

WARRI

ZARIA

MDS LOCATIONS - 2005WEST DEPOTS

NORTH CENTRAL DEPOTS

EAST DEPOTS CORPORATE HEADQUARTERS


Board of

Directors

Senator U. U. UdomaAlhaji (Dr) M. H. Koguna Mr. O. A. AdetomiwaMr. V. G. Hammond Chief S. O. Bolarinde

U A C O F N I G E R I A P L C

Lt General M. I. Wushishi (rtd), CFR, FSS, PSCCHAIRMAN

Dr. N. D. Moyo Mr. L. E. Ettah

Mr. J. A. AjayiMD/CEO

Mr. M. M. Wahby


35

at THE PA MS, Lekki.L

Salient Performance Graphs

Nai

ra B

illio

ns

0

5

10

15

20

25

2001 2002 2003 2004 2005

13.2

17.5

TURNOVER

30

20.9

25.2

27.1

PROFIT BEFORE TAX & MI

Nai

ra M

illio

ns

0

400

800

1200

1600

2000

2400

2800

1462.4

2003 2004 2005

2724.8

1639.6

2001 2002

2672.3

2418.8

EARNINGS PER SHARE

Ko

bo

0

50

100

150

200

128

111

122

191

127

2001 2002 2003 2004 2005


37

REPORT OF THE AUDIT COMMITTEETO THE MEMBERS OF UAC OF NIGERIA PLC

In compliance with Section 359 sub-section 6 of the Companies and Allied Matters Act , we have reviewed the audited Financial Statements of the company for

the year ended 31st December, 2005 and report as follow:

(a) The accounting and reporting policies of the group and the company are consistent with legal requirement and agreed ethical practices.

(b) The scope and planning of the external audit are, in our opinion adequate .

(c) The internal audit and the internal control systems are functioning well.

(d) The External Auditors’ Management Controls Report was satisfactorily dealt with by the management.

O. FayomboChairman of t he Meeting

Dated 19th April, 2006

MEMBERS OF THE COMMITTEE:Mr. O. Fayombo — Chairman

Mr. O. A. Adetomiwa — Member

Prince G. A. Olagunju — Member

Mr. V. G. Hammond — Member

Chief S. O. Bolarinde — Member

Mr. N. K. Nnabike — Member

SECRETARYMr. O A Majekodunmi

(CAP C20) Laws

of Federation of Nigeria, 2004

Audit Committee’s Report

REPORT OF THE AUDITORS TO THE MEMBERS OFUAC OF NIGERIA PLC

We have examined the financial statements of UAC of Nigeria Plc for the year ended 31 December 2005 set out on pages 38 to 57, which have been prepared in accordance with the accounting policies set out on pages 38 and 39.

Respective responsibilities of Directors and AuditorsAs described in the Statement of Directors' Responsibilities in relation to the financial statements on page 17, the company's Directors are responsible for the preparation of the financial statements.

It is our responsibility as auditors to express an independent opinion, based on our audit, on those financial statements prepared by the directors.

Basis of opinionWe conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes an assessment of the accounting principles used and significant estimates and judgements made by the Directors, and an evaluation of the overall adequacy of the presentation of the financial statements. We planned and performed such audit procedures and obtained all the information and explanations, which we considered necessary for the purpose of our audit. We believe that our audit provides us with a reasonable basis for our opinion.

OpinionIn our opinion, the company has kept proper books and the financial statements which are in agreement with them, give in the prescribed manner the information required by the Companies and Allied Matters Act

, and give a true and fair view of the state of financial position of the company and the Group as at 31 December 2005 and of the profit of the company and the Group and cash flows of the Group for the year then ended in conformity with generally accepted accounting principles in Nigeria.

Chartered Accountants,Lagos

1May 2006

(CAP C20) Laws of Federation of Nigeria 2004

Auditors’ Report

PricewaterhouseCoopersChartered AccountantsPlot 252E Muri Okunola Street,Off Ajose Adeogun Street,Victoria Island, P. O. Box 2419Lagos, Nigeria.


39

Financial StatementsFinancial Statements

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Accounting conventionThe financial statements are prepared under the historical cost convention as modified by the revaluation of certain fixed assets.

(b) Intangible assetsIntagibles arising out of acquisition of brand franchise are amortised over the period of the franchise agreement.

(c) Depreciation of fixed assetsDepreciation is calculated to write off the cost or the revalued amounts of fixed assets over their expected useful lives on a straight line basis at the following annual rates. Investment properties are accounted for in accordance with the provisions of International Accounting Standard No. 25.

Leasehold land and buildings with fixed tenure of less than 33 years are depreciated over the lives of the relevant leases.

Leasehold land and buildings with a fixed tenure of 33 years or more 3%Heavy industrial plant }Furniture and office }equipment } 10%Light industrial plant }Heavy vehicles } 20%Light vehicles }

1Computer equipment }33 / %3

(d) Stocks and work-in-progressStocks and work-in-progress are stated at the lower of cost and net realisable value.

Cost is ascertained as follows:Finished goods – direct cost of materials and labour together with a proportion of works overheads.

Raw materials – invoiced cost plus all other costs of bringing items to the company’s warehouses.

(e) Deferred taxationDeferred taxation is provided for, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values. Current income tax rates are used to determine deferred income tax.

The principal temporary differences arise from depreciation on property, plant and equipment, revaluations of certain non-current assets, provision for pensions and other post retirement benefits and tax losses carried forward. Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

(f) TurnoverTurnover comprises the net value of goods and services invoiced and delivered to third parties after deduction of discounts and value added tax.

(h) Foreign currenciesTransactions in foreign currencies are translated into naira at the rates ruling on the dates of the transactions. Assets and liabilities in foreign currencies are converted into Naira at the rates of exchange ruling on the balance sheet date. All exchange gains and losses arising are included in the operating results.

(i) Accounting for retirement gratuities and pensionsLiabilities in respect of retirement gratuities and pensions are provided for by making unfunded provisions and by making payments to pension funds. The amounts of the payments/charges are determined on an actuarial basis so that over the long term the funds will be adequate to meet the liabilities. The unfunded provisions represent the estimated present value of the future liability for retirement gratuities/pensions to employees other than benefits provided through pensions funds.

(j) Research and development expenditureExpenditure incurred on research is charged against revenue in the year in which it is incurred. Development costs are amortised in five equal annual instalments beginning from the year of completion of the related project.

(k) InvestmentsLong term investments portfolio is stated at cost and provision is made for permanent diminution in value. Dividends are accounted for when received.

(l) Consolidation of subsidiariesThe group balance sheet and profit and loss of the holding company and of its operating subsidiary companies made up to the balance sheet date.

A subsidiary is a company in which the group has more than half of its equity share capital.

(m) Associated companyAn associated company is defined as a company, not being a subsidiary, in which the group has between 20% and 50% interest. The company’s share of the results of the associated company is included in the company’s and the group’s profit and loss accounts. The company’s and the group’s share of post-acquisition results are added to the cost of the investment in the balance sheets. These amounts are taken from the latest audited financial statements of the company concerned, whose year end is co-terminous with that of the group.

(n) Borrowing costsBorrowing costs associated with loan facilities utilised in executing qualifying capital work in progress are capitalised in accordance with the provisions of International Accounting Standard No. 23. They include interest charges, establishment fees and other incidental fees directly related to the creation and arrangement of the facilities.

(o) Accounting for franchise fee revenueFranchise fee revenue from an individual franchise sale is recognised, with an appropriate provision for estimated uncollectable amount, when all material services or conditions relating to the sale have been substantially performed or satisfied by the franchisor in accordance with the provisions of Financial Accounting Standard No. 45.



41

Financial Statements


Financial Statements

Group Company

2005 2004 2005 2004

N’million % N’million % N’million % N’million %

Sales of products and services 27.118.7 25,116.4 16,982.7 17,375.0

Share of associated companies profits 560.2 352.4 560.2 352.4

Cost of materials and services (20,980.8) (18,937.4) (12,316.1) (12,465.4)

Value Added 6,698.1 100.0 6,531.4 100.0 5,226.8 100.0 5,262.0 100.0

Used as follows:

1. To pay employees 2,167.8 32.3 1,956.6 30.0 1,608.3 30.7 1,441.7 27.4

2. To pay taxes 915.6 13.7 768.6 11.8 533.4 10.2 601.9 11.4

3. To pay net interest charges 318.9 4.8 854.7 13.0 212.3 4.1 609.3 11.6

4. Depreciation of fixed assets 1,486.5 22.1 1,301.3 19.9 1,097.3 21.0 1,010.5 19.2

5. Transfer to minority interest 179.4 2.7 80.0 1.2 - - – –

6. To pay dividend 1,284.6 19.2 971.0 14.9 1,284.6 24.6 971.0 18.5

7. Future investment in the group 345.3 5.2 599.2 9.2 490.9 9.4 627.6 11.9

6,698.1 100.0 6,531.4 100.0 5,226.8 100.0 5,262.0 100.0

Group Value Added StatementFor the year ended 31st December, 2005

Group Company

2005 2004 2005 2004

Notes N’000 N’000 N’000 N’000

Turnover 1 27,118,696 25,116,384 16,982,650 17,374,954

Cost of sales 2 (20,090,052) (18,911,456)(12,753,371) (13,362,357)

Gross profit 7,028,644 6,204,928 4,229,279 4,012,597

Other income 3 160,504 148,462 214,970 200,381

Selling & distribution expenses (450,507) (417,575) (109,119) (108,846)

Administration expenses (4,061.525) (3,531,353) (2,509,112) (2,148,651)

Operating profit from operations 2,677,116 2,404,462 1,826,018 1,955,481

Share of profit of associated companies 4 560,160 352,365 560,160 352,365

Interest income 374,615 – 303,295 –

Finance charges (693,510) (854,714) (212,345) (609,279)

Net operating profit 2,918,381 1,902,113 2,477,128 1,698,567

Profit from disposal of certain assets 5 6,461 716,704 31,796 701,906

Provision for unfunded retirement benefits 6 (200,000) (200,000) (200,000) (200,000)

Profit before taxation & minority interest 7 2,724,842 2,418,817 2,308,924 2,200,473

Taxation 8(i) (915,581) (768,646) (533,410) (601,906)

Profit after taxation but before minority

Interest 1,809,261 1,650,171 1,775,514 1,598,567

Minority Interest 23 (179,352) (80,028) – –

Profit after taxation and minority interest 1,629,909 1,570,143 1,775,514 1,598,567

Proposed dividend 10(i) (1,284,624) (970,984) (1,284,624) (970,984)

Retained by the company 490,890 627,583 490,890 627,583

Retained by subsidiaries (145,605) (28,425) – –

Profit of the year retained 22 345,285 599,159 490,890 627,583

Earnings per share (kobo) 10(ii) 127 137 138 140

Earnings per share (kobo) adjusted 127 122 138 124

Dividend per share (kobo) 10(ii) 100 85 100 85

Dividend per share (kobo) adjusted 100 76 100 76

The statement of accounting policies on pages 38 and 39 and the notes on pages 44 to 57 form an integral part of these financial statements.

Group Profit And Loss AccountFor the year ended 31st December, 2005

Taxes - 13.7%

Employees - 32.3%

Minority Interest - 2.7%

Net Interest Charges 4.8%

Depreciation - 22.1%

Future Investments - 5.2%

UA C

Dividend - 19.2%


43

Financial Statements Financial Statements

Group Company2005 2004 2005 2004

Notes N’000 N’000 N’000 N’000Intangible assets 11 267,545 - 267,545 -Fixed assets 12 10,964,432 9,824,028 7,489,537 6,322,600Long term investments 13 4,468,279 3,904,978 5,928,662 4,859,823

15,700,256 13,729,006 13,685,744 11,182,423

Current assets:Stocks & work-in-progress 14 5,199,370 3,680,149 691,656 989,456Debtors & prepayments 15 3,413,788 2,663,568 4,052,986 3,441,379Cash and bank Balances 16 2,098,123 2,900,153 1,502,863 2,152,459

10,711,281 9,243,870 6,247,505 6,583,384Current liabilitiesBank loans/overdrafts 16 3,089,258 2,610,645 682,092 1,288,994Trade and other creditors 17 6,106,950 5,792,919 4,372,784 3,812,488

9,196,208 8,403,564 5,054,876 5,101,482

Net current assets 1,515,073 840,306 1,192,629 1,481,902

Total assets less current liabilities 17,215,329 14,569,312 14,878,373 12,664,325

Creditors falling due after one year 18 (1,343,749) (807,049) (943,160) (521,549)Provision for liabilities and charges 19 (2,069,388) (1,788,309) (1,237,967) (1,389,433)

Total net assets 13,802,192 11,973,954 12,697,246 10,753,343

Share capital 20 642,312 571,168 642,312 571,168Share premium 21 4,237,997 2,678,619 4,237,997 2,657,619Capital reserve 21 1,984,452 2,062,664 1,984,452 2,030,961Other reserve 21 126,797 278,797 126,797 278,797Retained profit 22 5,904,071 5,558,786 5,705,688 5,214,798

Shareholders’ funds 12,895,629 11,150,034 12,697,246 10,753,343Minority interest 23 906,563 823,920 – –

Employment of funds 13,802,192 11,973,954 12,697,246 10,753,343

Lt. Gen M. I. Wushishi (Rtd) CFR, FSS, PSC Directors

Mr. O. A. Adetomiwa

The statement of accounting policies on pages 38 and 39 and the notes on pages 44 to 57 form an integral part of these financial statements.

Balance SheetAs at 31st December, 2005

Group Company2005 2004 2005 2004

Cash flow from operating activities N’000 N’000 N’000 N’000Operating profit before taxation 2,724,842 2,418,817 2,308,924 2,200,474Equity interest in undistributed earnings ofassociated companies (net of tax) (459,485) (307,916) (459,485) (307,916)Depreciation of fixed assets 1,486,506 1,301,244 1,097,332 1,010,543Provision for unfunded retirement benefit 200,000 200,000 200,000 200,000Provisions no longer required (182,031) - (182,031 -Profit on disposal of a division - (538,661) - (538,661)Profit on disposal of certain assets (6,461) (178,043) (31,796) (163,245)Interest on loans and overdrafts/(received) 318,896 854,714 (90,950) 609,279

Cash flow before changes in working capital 4,082,267 3,750,155 2,841,994 3,010,474Changes in working capital(Increase)/decrease in stocks (1,519,222) (271,404) 297,800 (102,282)Increase in debtors and prepayments (750,220) (68,607) (611,607) (754,002)Increase/(decrease) in creditors and accruals 106,094 (1,683,863) 414,452 (808,278)Increase/(decrease) in other provisions 194,099 811,021 (135,072) 476,398

Cash flow after changes in working capital 2,113,018 2,537,302 2,807,567 1,822,310

Tax paid (928,195) (357,954) (731,335) (230,328)Payment of retirement benefits (460,610) (283,823) (456,010) (169,940)

Net cash flow from operating activities 724,213 1,895,525 1,620,222 1,422,042

Investing activitiesPurchase of fixed assets (3,178,556) (1,724,854) (2,768,289) (1,273,501)Proceeds from disposal of a division - 768,190 - 768,190Proceeds from sale of certain assets 74,192 329,600 45,462 296,965Dividends received 215,031 293,558 215,031 293,558Net Investment in associated and other companies 127,665 (138,074) (365,619) (250,735)

Cash flow from investing activities (2,761,668) (471,580) (2,873,415) (165,523)

Cash flow from financing activitiesLoans term debts granted/(repaid) 536,698 95,305 421,611 (190,194)Proceeds from sale of rights issues 1,651,522 2,984,297 1,651,522 2,839,483Dividend paid (909,837) (421,838) (856,576) (421,838)Dividend paid to minority interest (105,577) (51,104) – –Withholding tax paid (97,098) (54,518) (97,098) (54,518)Interest (on loans and overdrafts)/received (318,896) (854,714) 90,950 (609,279)

Net cash flow from financing activities 756,812 1,697,428 1,210,409 1,563,654

Net increase/(decrease) in cash and cash equivalents (1,280,643) 3,121,373 (42,784) 2,820,173Cash and cash equivalents at the beginning of the year 289,508 (2,831,865) 863,555 (1,956,618)

Cash and cash equivalents at the end of the year (note 16)(991,135) 289,508 820,771 863,555

Group Cash Flow StatementFor the year ended 31st December, 2005

}


45

Notes to the Financial Statements cont’dNotes to the Financial Statements

1. Turnover

2005 2004

N’000 N’000

UAC of Nigeria Plc

Third Party Turnover 16,682,758 17,161,107

Franchised Income 299,892 213,847

16,982,650 17,374,954

Mr. Bigg’s Ghana Limited 106,266 81,087

GM Nigeria Limited 1,387,904 1,199,310

Spring Waters Nigeria Limited 703,393 673,360

Grand Cereals & Oil Mills Limited 6,104,202 4,213,963

Chemical & Allied Products Plc 1,525,426 1,466,762

Warm Spring Waters Nigeria Limited 308,855 106,948

27,118,696 25,116,384

Franchised Turnover (Memo) 2,189,429 1,679,204

2. Cost of sales

UAC of Nigeria Plc 12,753,371 13,362,357

Mr. Bigg’s Ghana Limited 89,123 62,407

GM Nigeria Limited 1,086,141 906,714


Grand Cereals & Oil Mills Limited 4,565,392 3,072,674

Chemical & Allied Products Plc 914,403 910,332


20,090,052 18,911,456

3. Other income

Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

Dividends received - - 103,912 89,710

Other trading income 160,504 148,462 111,058 110,671

Total 160,504 148,462 214,970 200,381

4. Share of profit of associated companies

Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

Tractor & Equipment Nigeria Limited 75,838 38,811 75,838 38,811

UACN Property Development Company Plc 469,475 300,773 469,475 300,773

Opticom Leasing Company Limited 14,847 12,781 14,847 12,781

Total 560,160 352,365 560,160 352,365

5. Disposal of certain items

(Loss)/Profit on disposal of other fixed assets (18,343) 19,458 6,992 4,660

Profit on disposal of property 24,804 158,585 24,804 158,585

Profit on disposal of division - 538,661 - 538,661

6,461 716,704 31,796 701,906

6. Provision for unfunded retirement benefits

Provision for the year 200,000 200,000 200,000 200,000

Unfunded Retirement Benefits provision represents part of the cumulative shortfall on actuarial valuation on the retirement benefit of N1.453 billion. The balance of N406m will be provided for over the next two years in accordance with the Statement of Accounting Standards number 8 on Employees Retirement Benefits.

2005 2004

N’000 N’000

7. Profit before taxation

The group profit before taxation is arrived at after charging:

Auditors remuneration: Group auditors 21,500 21,500

Others 4,500 4,500

Directors emoluments 26,049 17,841

Interest:

(a)Bank loans (including commercial papers and bankers acceptances) 192,792 208,208

(b)Bank overdrafts 500,718 646,506

693,510 854,714

Depreciation of fixed assets 1,486,506 1,301,244

Provision for unfunded retirement benefits 200,000 200,000

and after crediting:

Profit from disposal of other certain assets 6,461 178,045

Disposal of a division - 538,661

Exchange loss (4,257) (3,630)

Interest on deposits 374,615 82,040

Rental income from properties 75,787 76,940


47

Notes to the Financial Statements cont’dNotes to the Financial Statements cont’d

Group Company

2005 2004 2005 2004

8(i) Taxation N’000 N’000 N’000 N’000

Per profit and loss account

Charges for the year:

Income tax 631,485 529,192 388,480 388,788

Education tax 93,493 63,525 57,774 51,558

Capital gains tax 2,947 79 2,876 38

Deferred Tax 86,981 131,402 (16,395) 117,074

On share of profit of associated companies:

Income tax 89,182 41,670 89,182 41,670

Education tax 11,493 2,778 11,493 2,778

Total 915,581 768,646 533,410 601,906

(ii) Per balance sheet

Opening balance:

Income tax 687,548 395,160 373,993 148,759

Education tax 70,099 50,291 51,984 36,237

Capital gains tax 15,033 47,939 14,406 45,332

Charges for the year:

Income tax 720,666 570,862 388,480 388,788

Education tax 104,986 66,303 57,774 51,558

Capital gains tax 2,947 79 2,876 38

(Over)/under provisions in previous years

Income tax (116,686) – 14,795 –

Education tax (3,796) – (426) –

Capital gains tax (14,954) – (14,368) –

Payments:

Income tax (570,862) (278,474) (388,788) (163,553)

Education tax (66,303) (46,495) (51,558) (35,811)

Capital gains tax (79) (32,985) (38) (30,963)

Closing balance:

Income tax 720,666 687,548 388,480 373,993

Education tax 104,986 70,099 57,774 51,984

Capital gains tax 2,947 15,033 2,876 14,406

828,599 722,680 449,130 440,383

Withholding tax due for payments 34,905 28,841 – –

Per Note 17 863,504 801,521 449,130 440,383

(iii) The amounts provided as income tax on the profits for the year have been computed on the basis of Companies Income Tax Act 1979 and in accordance with the Finance (Miscellaneous Taxation) Act No. 32 of 1996 (as amended).

(iv) Education tax represents 2% of assessable profit in accordance with Act No. 7 of 1993.

(v) Capital gains tax has been provided at the rate of 10% in accordance with the Finance (Miscellaneous Taxation) Act No. 32 of 1996. However, whenever proceeds will be reinvested in similar assets, no provision is made for Capital gains tax in line with Section 32 of Capital Gains Tax Act 1967.

9. Particulars of directors and staff

(i) The group has in its employment during the year weekly average number of staff in each category below.

The aggregate amount stated against each category was incurred as wages and pension cost during the year.

2005 2004

Number Cost Number Cost

N’000 N’000

Management 589 1,272,233 628 1,143,058

Staff 5,963 895,520 6,701 813,578

Total 6,552 2,167,753 7 ,3291,956,636

(ii) The table below shows the number of employees whose emoluments (excluding pension costs and certain benefits) were over N100,000 in the year.

2005 2004

N N Number Number

100,001 - 200,000 2,285 2,565

200,001 - 300,000 1,917 2,125

300,001 - 400,000 324 348

400,001 - 500,000 642 775

500,001 - 600,000 446 541

600,001 - 700,000 244 270

700,001 - 800,000 154 165

800,001 - 900,000 116 135

900,001 - 1,000,000 53 62

1,000,001 - 1,100,000 42 46

1,100,001 - 1,200,000 38 45

1,200,001 - 1,300,000 23 25

1,300,001 - 1,400,000 27 32

1,400,001 - 1,500,000 30 38

1,500,001 - 1,600,000 25 20

1,600,001 - 1,700,000 21 32

1,700,001 - 1,800,000 17 25

1,800,001 - 1,900,000 11 12

1,900,000 - 2,000,000 10 9

2,000,001 and above 127 59

6,552 7,329


49


2005 2004

N’000 N’000

(iii) Emoluments of directors

Fees 694 550

Other emoluments 25,355 17,593

26,049 18,143

(iv) Emolument of the Managing Director/Chief Executive who was also

the highest paid director

11,680 9,003

(v) The table below shows the numbers of directors of the company, whose remuneration,

excluding pension contributions, fell within the bands shown.

2005 2004

N N Number Number

100,001 - 150,000 7 5

3,400,001 - 3,500,000 – –

3,700,001 - 4,200,000 – 1

4,400,001 - 5,000,000 1 1

5,600,001 - 5,800,000 1 –

8,600,001 - 9,800,000 – 1

10,000,001 and 12,000,000 1 –

10 8

10(i)Dividend

The dividend of N1,284,624,258 is subject to a withholding tax, which is not to be retained by the company but is to be paid over to the Federal and various State Tax Authorities.

(ii) Earnings and dividend per share

Earnings and dividend per ordinary share of 50k are calculated on the group profit after taxation and minority interest on the basis of ordinary shares of 1,284,624,258 units in issue as at 31 December 2005.

11. Intangible assets

Group Company

2005 2004 2005 2004

Cost: N’000 N’000 N’000 N’000

Balance at 1 January 300,989 – 300,989 –

Amortisation:

Less: amount amortised for the year 33,444 – 33,444 –

Net book value at 31December 267,545 – 267,545 –

The company was granted the Innscor brand franchise in November, 2003 and opened the first stores during 2005.

12. Fixed assets

(i) Group Motor Vehicles

Furniture & Capital

Land and Plant & Office Work-in

Buildings Machinery Equipment Progress Total

N’000 N’000 N’000 N’000 N’000

Cost/Valuation

Balance 1 January, 2005 3,949,981 7,166,092 2,348,577 833,639 14,298,289

Additions during the year 479,510 559,312 589,204 1,550,530 3,178,556

Disposals (8,980) (177,547) (96,245) – (222,772)

Adjustments/write off (54,970) 158,296 54,283 (565,788) (408,179)

Reclassifications 313,659 344,446 141,765 (799,870) –

Balance 31 December, 2005 4,679,200 8,110,599 3,037,584 1,018,511 16,845,894

Depreciation

Balance 1 January, 2005 775,619 2,415,751 1,278,830 4,061 4,474,261

Charged for the year 244,815 820,015 421,676 – 1,486,506

On disposals (5,703) (76,561) (72,776) – (155,040)

On reclassifications (6) 4,254 (187) (4,061) –

On adjustments/write off (372) 62,919 13,188 – 75,735

Balance 31 December, 2005 1,014,353 2,226,378 1,640,731 – 5,881,462

Net book values at:

31 December, 2005 3,664,847 4,884,221 1,396,853 1,018,511 10,964,432

31 December, 2004 3,174,362 4,750,341 1,069,747 829,578 9,824,028


51


(ii) Company Motor Vehicles

Furniture & Capital

Land and Plant & Office Work-in

Buildings Machinery Equipment Progress Total

N’000 N’000 N’000 N’000 N’000

Cost/Valuation

Balance 1 January, 2005 3,191,341 4,215,880 1,956,115 321,367 9,684,703

Additions during the year 423,222 403,700 480,784 1,460,583 2,768,289

Disposals (77) (175) (55,119) – (55,371)

Adjustments/write off (58,089) 50,895 78,202 (547,918) (476,910)

Reclassification 315,310 307,928 133,453 (756,691) –

Balance 31 December, 2005 3,871,707 4,978,228 2,593,435 477,341 11,920,711

Depreciation

Balance 1 January, 2005 664,754 1,636,879 1,056,409 4,061 3,362,103

On Adjustments/write off – (3,102) 20,606 (4,061) 13,443

Charged for the year 219,281 544,103 333,948 – 1,097,332

On Disposals (71) (160) (41,473) – (41,704)

On Reclassifications (6) (31) 37 – –

Balance 31 December, 2005 883,958 2,177,689 1,369,527 – 4,431,174

Net book values at:

31 December, 2005 2,987,749 2,800,539 1,223,908 477,341 7,489,537

31 December, 2004 2,526,587 2,579,001 899,706 317,306 6,322,600

(iii) Properties

The land and buildings of the company and the properties, plant and machinery of a subsidiary were revalued as at 31 December, 1997 by Messrs Adegbemile, Akinlosotu Aganga & Co. Estate Surveyors and Valuers on the basis of open market values.

The surplus arising from this revaluation was credited to the capital reserve account.

The company’s other properties are stated at directors’ valuation as at 30 September, 1974 with subsequent additions to the cost.

(iv) All other categories of fixed assets are stated at cost.

13. Long term investments

(i) These comprise investments in wholly owned, subsidiary and associated companies. Consolidated profit and loss account and balance sheet have been prepared for the company and its operating subsidiaries; GM Nigeria Limited, Spring Waters Nigeria Limited, CAP Plc, Grand Cereals & Oil Mills Limited and Warm Spring Waters Nigeria Limited, and Mr. Bigg’s Ghana Limited.

The associated companies include; Tractor & Equipment Nigeria Limited, UACN Property Development Company Plc, Opticom Leasing Company Limited and UAC Registrars Limited.

(ii) Long term investments are stated at cost and they comprise:

Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

a) Quoted shares:

Chemical and Allied Products Plc

105,195,810 ordinary shares of 50k each – – 114,461 114,461

UACN Property Development Company Plc

460,000,000 Ordinary shares of 50k each 2,222,209 2,222,209 2,222,209 2,222,209

b) Unquoted shares

General Cotton Mill Limited

33,749,624 Ordinary shares of 50k each 18,012 18,012 18,012 18,012

Tractor & equipment Nigeria Limited

18,000,000 Ordinary shares of N1 each 207,606 207,606 207,606 207,606

GM Nigeria Limited

72,000,000 Ordinary shares of N1 each – – 95,760 95,760

Spring Waters Nigeria Limited


Grand Cereals and Oil Mills Limited


Warm Spring Waters Nigeria Limited


Opticom Leasing Company Limited

24,000,000 ordinary shares of N1 each 24,000 24,000 24,000 24,000

Mr. Biggs Ghana Ltd

11,666,667 ordinary shares of N1 each – – 11,666 11,666

UAC Registrars Limited

50,000,000 ordinary shares of N1 each – – 50,000 –

Chemical and Allied Products Plc -

investment in UACN Plc 6,642 13,283 – –

Others 47,899 30,173 1,001 1,001

Sub Total 2,526,368 2,515,283 3,986,751 3,470,128


53


Group Company

2005 2004 2005 2004

c) Accumulated amount of share of N’000 N’000 N’000 N’000

Associated companies:

Tractor & Equipment Nigeria Limited 422,437 189,937 422,437 189,937

UACN Property Development Company Plc 1,494,289 1,184,020 1,494,289 1,184,020

Opticom Leasing Company Limited 25,185 15,738 25,185 15,738

Total long term investments 4,468,279 3,904,978 5,928,662 4,859,823

(iii) Market value of quoted investments Company

2005 2004

Carrying Market Carrying Market

Amount Value Amount Value

N’000 N’000 N’000 N’000

Chemical and Allied Products Plc 114,461 757,410 114,461 601,720

UACN Property Development Company Plc 3,716,498 4,025,000 3,406,229 4,094,000

3,830,959 4,782,410 3,520,690 4,695,720

The directors did not consider that the value appreciation of N308,502 in the value of the company’s investment in UPDC Plc between the market value of N4,025,000 and its carrying value of N3,716,498 as at year ended 31 December 2003 represent a permanent increase in the value of the investment.

(iv) All the investments are held in companies, which are incorporated in Nigeria.

Other relevant details are as follows:

Company Number of Percentage of Major activitiesshares held shareholding

Subsidiaries

(a) Grand Cereals and Oil 192,000,000 Ordinary Shares Processing of locally sourced

Mills Limited of N1.00 each 64.00 grains and oil seeds into

grits, flour, oil and cake and

production of poultry feeds.

(b) GM Nigeria Ltd 72,000,000 Ordinary shares 60.00 Sale and assembling of

of N1.00each motor vehicles

(c) Spring Waters Nigeria Ltd. 520,263,972 Ordinary shares 90.57 Production of bottled

of N1.00 each spring water

(d) Chemical and Allied Products Plc 105,195,810 ordinary shares 50.18 Manufacturing of paints

of 50k each and chemicals

(e) WarmSpring Water Nigeria Ltd. 360,000,000 Ordinary shares 73.30 Production of bottled

of N1.00 each natural spring water

(f) Mr. Bigg’s Ghana Limited 11,666,667 Ordinary shares 100.00 Mr. Bigg’s Quick Service

of N1.00 each Restaurants

Associated companies

(a) UACN Property Development 460,000,000 Ordinary shares 46.00 Property Development

Company Plc of 50k each & Real Estate

(b) Opticom Leasing Company 24,000,000 Ordinary shares 40.00 Equipment Leasing

Limited of N1.00 each

(c) Tractor & Equipment Nigeria 18,000,000 ordinary shares 30.00 Sale and servicing of

Limited of N1.00 each Caterpillar equipment

Others

(a) General Cotton Mill Limited 33,749,624 ordinary shares 17.80 Manufacturing of textile

of 50k each materials

14. Stocks Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

Raw materials and work-in-progress 4,129,620 2,614,891 553,201 766,860

Technical stocks and spares 271,431 463,255 137,866 177,592

Merchandise and other stocks 798,319 602,003 589 45,004

5,199,370 3,680,149 691,656 989,456

15. Debtors and prepayments

Trade debtors 1,391,975 958,893 651,994 237,646

Prepayments for stocks in transit 13,575 12,908 13,575 12,908

Long term debts 4,618 3,159 284 284

Amount owed by related companies – – 1,542,953 1,535,819

Sundry debtors 1,002,278 726,138 975,002 1,015,607

Prepayments and accrued income 1,001,342 962,470 869,178 639,115

3,413,788 2,663,568 4,052,986 3,441,379

16. Cash and bank balances

Cash in hand and at banks 2,098,123 2,900,153 1,502,863 2,152,549

Bank loans – 324,395 – –

Bank overdrafts 2,853,258 1,146,250 446,092 148,994

Bankers acceptances and commercial papers 236,000 1,140,000 236,000 1,140,000

3,089,258 2,610,645 682,092 1,288,994

Net cash and bank balances (991,135) 289,508 820,771 863,555


55


Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

17. Trade and other creditors

Trade creditors 1,921,267 1,561,581 1,351,788 775,710

Other credit balances 1,074,679 1,681,306 638,362 1,255,097

Accruals and deferred income 356,717 294,633 172,397 8,239

Proposed dividend 1,284,624 970,984 1,284,624 970,984

Dividends unclaimed 606,159 482,894 476,483 362,075

Taxation (note 8) 863,504 801,521 449,130 440,383

Total 6,106,950 5,792,919 4,372,784 3,812,488

18. Creditors falling due after one year

Maturity Group Company

Date 2005 2004 2005 2004

N’000 N’000 N’000 N’000

Agricultural bank loans February, 2008 867,255 400,000 633,333 400,000

Long term loan:

Intercontinental Bank Plc 166,667 285,500 – –

Finance leases: UNICO & OPTICOM 309,827 121,549 309,827 121,549

1,343,749 807,049 943,160 521,549

The long term loan facility in one of the subsidiaries is secured by the title to the equipment financed by the loan.

Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

19. Provisions for liabilities and charges

Pension and gratuity obligations {note (i)} 948,355 826,627 725,523 741,281

Deferred taxation {note (ii)} 428,995 342,014 251,504 267,899

Other provisions 692,038 619,668 260,940 380,253

2,069,388 1,788,309 1,237,967 1,389,433

(i) Pension and gratuity obligations

(a) The pension scheme of the employees is managed by UNICO Pension Fund.

(b) Pension and gratuity obligations represent provisions for liabilities in respect of retirement gratuities and pension as stated in the accounting policies (h).

Movement in gratuity and unfunded

retirement benefits provisions:

Opening balance as at 1st January 826,627 646,798 741,281 563,640

Provision during the year 382,338 263,652 240,252 147,581

Exceptional provision (note 6) 200,000 200,000 200,000 200,000

Payment during the year (460,610) (283,823) (456,010) (169,940)

Closing balance as at 31 December 948,355 826,627 725,523 741,281

(Ii) Deferred taxation

The Company, using liability methods, has fully provided for deferred tax in these financial statements. Company N16,395 credit (2004: N267,899) Group N86,981 (2004: N342,014).

20. Share capital 2005 2004

Number Value Number Value

000 N’000 000 N’000

Ordinary shares of 50k each

Authorised:

Balance at the beginning of the year 2,000,000 1,000,000 1,000,000 500,000

Balance at the end of the year 2,000,000 1,000,000 2,000,000 1,000,000

Issued and fully paid:

Balance at the beginning of the year 1,142,336 571,168 908,636 454,318

Balance at the end of the year 1,284,624 642,312 1,142,336 571,168

21. Share premium, capital & other reserves Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

Share premium (i) 4,327,997 2,678,619 4,327,997 2,657,619

Capital reserve (ii) 1,984,452 2,062,664 1,984,452 2,030,961

Other reserve (iii) 126,797 278,797 126,797 278,797

Balance at the end of the year 6,349,246 5,020,080 6,349,246 4,967,377

(i) The increase in share premium was due to the Rights issue to ACTIS LLP.

The shortfall in group and company reserves was as a result of:

(Ii) Release of capitalised surplus on disposed fixed assets.

(Iii) Over-provision made for restructured businesses no longer required.


57


Group Company

2005 2004 2005 2004

N’000 N’000 N’000 N’000

22. Retained profit

Balance at the beginning of the year 5,558,786 5,004,626 5,214,798 4,896,281

Retained profit for the year 345,285 599,159 490,890 627,583

Provision for CGT on transferred property

to UPDC Plc now due – (290,950) – (290,950)

Prior years’ provision for deferred tax – (49,485) – (49,485)

Adjustments in prior years’ retained earnings – 295,436 – 31,369

Balance as at the end of the year 5,904,071 5,558,786 5,705,688 5,214,798

23. Minority interest

This comprises amounts due to holders of minority shares in the four subsidiaries companies and are made up of:

2005 2004

N’000 N’000

Share capital 307,308 321,554

Share premium (2,666) 7,758

Retained loss of previous years (176,366) (120,002)

Retained profit for the year 179,352 80,028

Capital reserve 238,144 173,791

Deposit for shares in a subsidiary 360,791 360,791

Balance at the end of the year 906,563 823,920

24. Commitment for capital expenditure

At 31st December, 2005, the amount of capital expenditure authorised by the Board and still unspent amounted to Group N703,293,090; Company N697,867,496 (2004: NIL). Included in the unspent amount are commitments for capital expenditure amounting to Group N566,005,507; Company N564,918,152 (2004: NIL) which have already been entered into at the balance sheet date.

25. Contingent liabilities

There were litigations in the ordinary course of business with the company. It is the Directors opinion that no material liability against the company will materialise.

26. Related parties transactions

As indicated in note 13 (long term investments), the company has shareholding in some of its associated companies.

The following transactions were carried out with related parties.

(i) Sales and purchases of goods and services 2005 2004

(a) Sales of goods and services: N’000 N’000

UACN Property Development Company Plc 39,619 15,570


Chemical & Allied Products Plc 1,073 11,593


Grand Cereals & Oil Mills Limited 21,843 –

132,831 276,164

(b) Purchases of goods and services:

UACN Property Development Company Plc 31,136 41,599


Grand Cereals & Oil Mills Limited 216,192 206,406


Chemical and Allied Products Plc 26,560 26,027

Tractor & Equipment Nigeria Limited 509 575

423,878 372,476

The related party transactions were carried out on commercial terms and conditions.

(ii) Loans to directors

No loans were granted to the directors of the company during the year.

27. Post balance sheet event

There has been no material post balance sheet event to date.

28. Comparative figures

Reclassifications have been made in respect of certain prior year figures in order to conform with current year presentation.

29. Approval of the financial statements

The financial statements were approved by the directors on 20th April, 2006.


59

Analyses of Sales, Operating Profit and Employment of Funds

Naira millions 2001 2002 2003 2004 2005

Sales to third parties

Manufacturing and processing 11,203.9 15,593.0 19,093.6 22,821.6 24,723.7

Technical sales 1,719.2 1,429.0 1,035.4 1,199.3 1,387.9

Warehousing & logistics 314.5 497.0 714.5 1,095.5 1,007.1

Total 13,237.6 17,519.0 20,843.5 25,116.4 27,118.7

Operating profit


Technical sales (25.3) 156.7 140.2 165.2 162.4

Warehousing & logistics 117.4 149.0 191.3 305.1 149.3

Total 2,270.0 2,804.5 3,829.7 3,273.5 3,043.7

Financial items:

(Including interest and

currency fluctuations) (807.6) (1,164.9) (1,157.4) (854.7) (318.9)

Profit before taxation 1,462.4 1,639.6 2,672.3 2,418.8 2,724.8

Employment of funds


Technical sales 960.0 992.6 922.4 880.5 886.9

Warehousing & logistics 194.9 408.0 180.6 1,049.8 1,291.4

Total 7,046.6 7,933.8 8,695.3 11,974.0 13,802.2

Use of fixed assets


Technical sales 541.2 499.7 294.9 305.0 309.9

Warehousing & logistics 209.4 372.3 534.3 679.1 1,064.4

Total 6,680.4 9,101.9 9,587.6 9,824.0 10,964.4

For the year ended 31st December

Five Year Financial Summary

Naira millions 2001 2002 2003 2004 2005

Funds employedOrdinary shareholders’ funds 5,365.3 6,428.6 7,919.7 11,150.0 12,895.6Minorities interest 858.7 905.7 775.6 823.9 906.6Creditors due after one year 3.6 20.0 711.7 1,039.0 1,343.7Provision for liabilities and charges 1,555.4 1,562.6 1,835.6 1,671.2 2,069.4

Total 7,783.0 8,916.9 11,242.6 14,684.1 17,215.3

Employment of fundsFixed assets 6,750.4 9,101.8 9,587.6 9,824.0 11,232.0Interest in subsidiary company 0.4 0.4 0.4 0.4 –Trade investments 2,922.0 3,130.5 3,766.5 3,904.6 4,468.2Long term debts 2.3 1.2 – – –Net current (liabilities)/assets (1,822.1) (3,317.0) (2,111.8) 955.1 1,515.1

Total 7,783.0 8,916.9 11,242.6 14,684.1 17,215.3

Capital expenditure 3,120.6 3,966.1 2,480.6 1,724.9 3,178.6

Depreciation 586.6 868.0 1,135.1 1,301.2 1,486.5

ResultsSales to third parties 13,237.6 17,519.0 20,843.5 25,116.4 27,118.7Profit from operations 805.8 1,460.5 1,548.1 1,902.1 2,918.4Share of profit of associated companies 343.9 439.2 534.6 352.4 560.2Taxation (209.4) (282.9) (481.0) (768.6) (915.6)Profit after tax and minority interest 1,006.5 1,166.2 2,184.6 1,570.1 1,629.9Dividends (136.3) (318.0) (545.2) (971.0) (1,284.6)Profit of the year retained 870.2 848.2 1,639.4 599.2 345.3.

Share prices: High (kobo) 429.0 489.0 1,048.0 1,733.0 1,998.0 Low (kobo) 299.0 300.0 410.0 1,020.0 1,299.0

Market capitalisation (year-end) 3,362.0 3,725.4 9,268.1 16,186.9 21,838.6

Dividends per share 15 35 60 85 100Dividends per share (adjusted) – – 48 76 100Earnings per share (kobo) 111 128 240 137 127Earnings per share (kobo) adjusted – – 191 122 127Net assets per share (kobo) 590 708 958 1,048 1,074Dividends cover (times) 7.38 3.67 4.00 1.62 1.27

Note:The dividends, earnings and net assets per share of 50 kobo are computed respectively on the proposed dividends, the profit after taxation and the shareholders funds, each on the basis of the number of ordinary shares in issue as at 31st December.


61

Shareholders Information

Shareholdings

According to the register of members, no shareholder of the company held more than 10% of the issued capital of the company as at 31st December, 2005.

Number of holdings Number of Number of Percentage shares holders %

1 - 500 13,207,650 42,790 1.03

501 - 1,000 14,153,007 18,362 1.10

1001 - 5,000 245,784,197 120,605 19.13

5,001 - 50,000 174,711,051 13,358 13.60

50,001 - 100,000 55,038,757 766 4.28

100,001 - 500,000 135,688,615 662 10.56

500,001 - 1,000,000 74,927,771 106 5.83

1,000,001 - 10,000,000 208,753,472 77 16.25

10,000,001 - and over 362,359,738 5 28.21

1,284,624,258 196,731 100.00

Movement in share capital

Authorised capital Issued and fully paid capitalFrom To From To Consideration

Date N’000 N’000 N’000 N’000

30-9-1976 26,000 40,000 23,760 39,600 Scrip Issue (2 for 3)

23-9-1977 40,000 80,000 39,600 79,200 Scrip Issue (1 for 1)

30-9-1978 80,000 100,000 79,200 99,000 Scrip Issue (1 for 4)

30-9-1980 100,000 148,500 99,000 148,500 Scrip Issue (1 for 2)

11-4-1990 148,500 163,350 148,500 163,350 Scrip Issue (1 for 10)

16-9-1993 163,350 204,188 163,350 204,188 Scrip Issue (1 for 4)

05-4-1994 204,188 204,188 204,188 161,308 Capital Reduction

15-2-1995 204,188 204,188 161,308 181,727 Offer for subscription

03-7-1996 204,188 300,000 181,727 227,159 Scrip Issue (1 for 4)

09-8-2000 300,000 500,000 227,159 454,318 Scrip Issue (1 for 1)

27-10-2004 500,000 1,000,000 454,318 642,312 Right Issue (1 for 4)

Five year dividend history

Dividends declared during the last five years were as follows:

Total amount Dividend per % of profitDate declared N’000 share after taxation

30th May, 2001 - - -

22nd May, 2002 136,295 15.00k 14

21st May, 2003 318,022 35.00k 37

19th May, 2004 545,181 60.00k 25

18th May, 2005 970,984 85.00k 59

Unclaimed dividends and share certificates

Since becoming a public company in 1974, the company has declared dividends and issued a number of scrip shares.

Currently, our unclaimed dividends accounts indicated that some dividend warrants have not been presented to the bank for payment while others have been returned to the registrar as unclaimed because the addresses could not be traced.

This notice is to request all affected shareholders in their own interest to contact:

The Company Registrar

UAC Registrars Limited

Niger House

1-5 Odunlami Street

Lagos.

Tel: 01-2666229 Fax: 2663241

The Dividends are set out below:

Dividends Date declared Amount unclaimed

Month Day Year 2005 2004

N’000

30 July 6 1994 6,470 6,696

31 July 5 1995 6,104 12,848

32 July 3 1996 12,402 18,768

33 July 9 1997 23,595 28,743

34 July 9 1998 22,018 23,769

35 May 7 1999 29,264 30,792

36 May 22 2002 17,427 22,371

37 May 21 2003 56,884 66,182

38 May 19 2004 107,994 146,285

39 May 18 2005 188,885 –

N’000

Shareholders Information



03

UAC OF NIGERIA PLCAnnual General Meeting to be held at 10.00a.m on Wednesday, 17th May, 2006 at the TRANSCORP HILTON HOTEL, ABUJA.

I/We

being a member/members of UAC OF NIGERIA PLC, hereby

appoint*

......................................................................................................

or failing him the Chairman of the Meeting as my/our proxy to vote for

me/us on my/our behalf at the General Meeting of the Company to be

held on Wednesday, 17th May, 2006 and at any and every adjournment

thereof

Dated this ................. day of ................................................. 2006.

NOTES

(a) *Delete whichever is not applicable.

(b) If the votes are being cast as proxy, the proxy must sign his own name but also insert the name of the shareholder he represents at the top of the form in the space provided.

(c) A member voting in his own right as a member and also voting as proxy or representative or another or other members should fill one voting paper for his own holding and a separate paper for each of the members he is representing. Similarly those present who are acting as proxy for more than one other member must complete a separate voting form for each member they represent.

(d) A member need not cast all his votes in one way. In such a case he should insert the number of votes for and against the motion in the

ADMISSION FORMUAC OF NIGERIA PLCAnnual General Meeting

* Please admit

to the Annual General Meeting of UAC of Nig. Plc which will be held at the TRANSCORP HILTON HOTEL, ABUJA on Wednesday, 17th May, 2006.

IMPORTANT NOTE:1. This admission card must be produced by the Shareholder or his proxy in order to obtain admission to the Annual General meeting.2. Shareholders or their proxies are requested to sign the admission card in the appropriate place before attending the Meeting.

O. A. MAJEKODUNMI

UAC OF NIGERIA PLCAnnual General Meeting Admission FormName and address of shareholder

Signature of person attending

SHAREHOLDER................................................

PROXY................................................................

U A C

U A C

UA C

RESOLUTIONS

Ordinary Business For Against

To re-elect

To declare a dividend

Fix the remuneration of the Auditors

Elect members of the Audit Committee

Fix remuneration of Directors

Please indicate your wish by placing an X in the appropriate square. (Alternatively see (c) below) ONLY PUT THE X BESIDE THE MOTION BEFORE THE MEETING AND NOT ANY OF THE OTHERS.

S I G N A T U R E O F MEMBER/PROXY*.....................................................

1. 2. Chief S. O. Bolarinde3. Mr. Victor G. Hammond

Senator U U Udoma

Notes

If undelivered please return toUAC REGISTRARS LIMITED

2ND FLOOR1 – 5 ODUNLAMI STREET

P. O. BOX 2183LAGOS

THE REGISTRARUAC REGISTRARS LIMITEDNiger House1 - 5 Odunlami StreetP.O. Box 2183Lagos Tel: 2666229

PLEASE AFFIXSTAMP

UAC REPORT 2006 2 - Africa Prudential · GCOML and AVM Mouktar Mohammed (Rtd.), President, Nigerian...

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