Annual Report 2012
Total Page：16
File Type：pdf, Size：1020Kb
Contents 2 Notice of Annual General Meeting 4 Corporate Information 5 Financial Highlights 6 Chairman’s Statement 8 Managing Director’s Review 10 Directors’ Report 14 Corporate Governance Statement 16 Statement of Directors’ Responsibilities 17 Audit Committee’s Report 18 Report of the Auditors 19 Significant Accounting Policies 30 Consolidated Income Statement 32 Statement of Financial Position 34 Statement of Cash Flows 35 Statement of changes in equity 36 Notes to the Financial Statements 54 Statement of Value Added 55 Five Year Financial Summary 57 Share Capital History 59 Proxy Form 61 Unclaimed Dividends 2012 Annual Report & Financial Statements 1 Notice of Annual General Meeting for the year ended 31 December 2012 Notice is hereby given that the Fifty Third Annual General meeting of members of First Aluminium Nigeria Plc will be held on Wednesday May 15th at Lagos Airport Hotel, 111 Obafemi Awolowo Way, Ikeja, Lagos at 11:00 am prompt to transact the following business: Ordinary Business 1. To approve the Report of the Directors, the audited Financial Statements for the year ended 31 December 2012 and the Reports of the Auditors and Audit Committee thereon. 2. To re-elect Directors Joseph Makoju, Engr Mike Okolo and Ben Elfrink Special notice is hereby given for the re-election of Alhaji S. S. Baffa as a director of the Company notwithstanding that he is over 70 years old. 3. To authorize the Directors to fix the remuneration of the Auditors. 4. To elect members of the Audit Committee. Special Business 5. To approve the remuneration of the Directors Notes: 1. Proxy A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company. A form of proxy is enclosed with this notice. Proxy forms must be completed and deposited at the office of the Company’s Registrars, Union Registrars Ltd., 2 Burma Road, Apapa, Lagos not later than 48 hours before the time of the meeting. 2. Closure of Register of Members The Register of members and Transfer Books of the Company will be closed from Monday May 6th 2013 to Friday May 10th 2013 (both days inclusive) for the purpose of updating the register. 3. Audit Committee Any member may nominate a shareholder as a member of the Audit Committee by giving notice in writing of such nomination to the Company Secretary at least 21 days before the Annual General Meeting. 4. Unclaimed Dividend Warrants Dividend warrants remain unclaimed or are yet to be presented for payment. Members affected are advised to either write to the Company Registrar or call at their office during normal working hours. A list of unclaimed dividends is attached at the end of the financial statements. BY ORDER OF THE BOARD POPOOLA NOMINEES LIMITED Secretaries to the Company 13 March 2013 2 2012 Annual Report & Financial Statements Corporate Information for the year ended 31 December 2012 EXECUTIVE OFFICERS: B. Elfrink - Managing Director W.J.Dixon - Commercial Director M.Okolo - Executive Director A. Vitankar - Divisional Manager - Rolling Mill Division B.Wobo - Group Human Resource Manager C. O Iwunwa - Group Treasury Manager SECRETARIES: Popoola Nominees Limited 2A Raufu Taylor Close Off Idejo Street Victoris Island, Lagos REGISTRARS AND TRANSFER OFFICE: Union Registrars Limited 2, Burma Road, Apapa, Lagos. AUDITORS: BDO Professional Services Chartered Accountants ADOL House 15 CIPM Avenue CBD, Alausa, Ikeja P.O.Box 4929 GBO Marina REGISTERED OFFICE: 2, Akilo Street, Ogba, Ikeja P.O. Box 1071, Lagos. Telephone: (01) 7349779 E-Mail: [email protected], [email protected] www.fanplc.com RC NO: 2288 FACTORIES: Rolling Mill 19/21 Onitsha Street Trans Amadi Industrial Layout, E-Mail: [email protected] Port Harcourt. Packaging Division 2, Akilo Street, E-Mail: [email protected] Ogba, Ikeja Lagos. Aluminium city 1, Alhaji Adejumo Avenue E-Mail: [email protected] Oshodi Express way Ilupeju, Lagos. 2012 Annual Report & Financial Statements 3 Corporate Information for the year ended 31 December 2012 BANKERS: Access Bank Plc Diamond Bank Plc Fidelity Bank Plc Keystone Bank Limited Mainstreet Bank Limited Stanbic IBTC Bank Plc Union Bank Plc Wema Bank Plc Zenith Bank Plc ANALYSIS OF SHAREHOLDERS LISTING AS AT 31 DECEMBER 2012 Range of Shares Number of % OF TOTAL SHARE UNITS % OF TOTAL Shareholders 1 - 1,000 1,704 13.34 958,443 0.05 1,001 - 10,000 6,599 51.67 33,011,634 1.56 10,001 - 100,000 3,903 30.56 132,947,779 6.30 100,001 - 500,000 458 3.59 192,552,534 4.39 500,001 - 1,000,000 58 0.45 40,866,217 1.94 1,000,001 - 5,000,000 38 0.30 79,203,633 3.75 5,000,001 - and above 12 0.09 1,730,819,002 82.01 12,772 100 2,110,359,242 100 4 2012 Annual Report & Financial Statements Financial Highlights for the year ended 31 December 2012 2012 2011 2012 2011 GROUP GROUP COMPANY COMPANY N’000 N’000 N’000 N’000 Turnover 8,639,181 8,867,453 8,639,181 8,627,276 Trading (Loss)/ Profit (640,050) 183,572 (651,801) 75,944 Other income 63,388 60,854 47,483 58,526 Loss on discontinued operation (525,371) (20,928) (525,371) (20,928) Loss before taxation (1,053,239) (204,318) (1,064,990) (311,946) Taxation 48,847 (70,471) 48,847 (80,243) Loss after taxation (1,004,393) (278,789) (1,016,143) (392,189) Other comprehensive loss (526) (3,528) (526) (3,528) Total comprehensive loss for the year (1,004,919) (278,317) (1,016,669) (395,717) Total assets 8,866,267 9,952,145 8,770,956 9,838,766 Equity attributable to owners of the parent Company 4,513,400 5,936,110 4,522,211 5,929,395 Loss per 50k share (Kobo) (48) (13) (48) (13) Earnings per share is based on the number of shares in issue as at 31 December 2012. 2012 Annual Report & Financial Statements 5 Chairman’s Statement for the year ended 31 December 2012 Restructuring During the fourth quarter our business saw a sudden decrease in order activity firstly in the Aluminium division but then in Packaging as the whole Nigerian economy slowed. This occurred at a time when we were considering plans for 2013 and the Board concluded that future markets were uncertain. During November we considered a number of strategic options for the group’s future but given the ongoing uncertainty surrounding the economy the Board decided that the operations of the business should concentrate resources on those activities that would be cash generative and profitable. Notwithstanding the progress that had been made at improving asset utilization and quality of own manufactured aluminium coils in the last 2 years it became clear that the Mill could not compete with imported products and the decision was made to stop manufacture which lead to the direct loss of 215 skilled jobs. For our supply chain the position is worse as each manufacturing job is generally considered to support 3 others because we are major consumers of materials, spares, consumables and service and wherever possible we have endeavored to source locally. We have not given up hope that manufacturing is completely finished in Port Harcourt however. The Mill has effectively been mothballed meaning that if in the future a Government creates an environment where local manufacturing is no longer disadvantaged we can restart operations. We cannot foresee that happening in the near future which is why we have impaired the fixed assets, and written down inventory to estimated realisable value . New financial reporting standards mean that the costs of closure are no longer considered to be exceptional but are shown as discontinued operations in our annual accounts to provide for a fuller explanation and better understanding of the underlying business that goes forward into 2013. The total cost of closing, the manufacturing is calculated to be N525million comprising impairment of property, plant and equipment N305m impairment of the inventories N163m and employment termination costs of N58m International Financial Reporting Standards (‘IFRS’) Following a meeting of the Nigerian Federal Executive Council in July 2010 January 1, 2012 was chosen as the effective date for convergence of accounting standards in Nigeria with IFRS. IFRS has been accepted or adopted for public accounting purposes in over 100 countries and adoption is seen as improving comparability and transparency. FAN has had to prepare 2012 and 2011 financial statements and the opening balance sheet (as of 1 January 2011) by applying the IFRSs effective at 31 December 2012. Certain figures for 2010 and 2011 have been restated to comply with IFRS . Since IAS 1 requires that at least one year of comparative prior period financial information be presented, the opening balance sheet is 1 January 2011. This means that our first financial statements should include at least: • three balance sheets (statements of financial position) • two statements of comprehensive income • two separate income statements (if presented) • two statements of cash flows • two statements of changes in equity • and related notes, including comparative information Corporate Governance The Board sets the tone for the way in which Fan operates and we remain committed to running the business in a responsible way. The Board considers current performance, strategy, risk management, the internal control framework and other aspects of corporate governance throughout the year. Some of the discussions involve the wider team of 6 2012 Annual Report & Financial Statements Chairman’s Statement for the year ended 31 December 2012 executive officers so that executive management is able to disseminate the values and standards of the Board throughout the company and ensure these are embedded at all levels.