2019 Annual Report - Final Version

Consolidated
and Separate

Statement

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Consolidated and Separate Stateme

For the year ended 31 December 2019

In thousands of naira
Revenue
Revenue

Other income

Impairment loss on financial assets
Personnel expenses
Depreciation
Amortization
Operating expenses
Total expenses
Operating surplus
Share of profit of equity accounted investees
(net of income tax)
Operating Surplus before tax
Income tax expense
Operating Surplus after tax

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ent of Comprehensive Income

Note Group Group Exchange Exchange
9 2019 2018 2019 2018
4,954,435 4,822,617
10 4,954,435 4,822,617 4,863,461 4,700,579
4,863,461 4,700,579
11 2,828,923 2,848,871
12 3,728,576 3,575,043
16 7,783,358 7,671,488
15 8,592,037 8,275,622
13 (63,990) (50,364)
(3,694,465) (3,066,896) (82,821) (52,840)
19(iii) (3,694,465) (3,066,895)
(384,003) (374,916)
14 (92,767) (205,687) (437,186) (321,567)
(2,471,201) (92,767) (205,687)
(2,777,924) (2,431,748)
(6,169,064) (2,760,945)
(7,013,149) (6,078,738)
1,502,424 (7,068,184)
770,209 2,196,884
1,302,603 1,523,852
1,531,589 2,805,027 -
2,301,798 - 2,196,884
(101,583) 1,523,852
(30,925) 2,703,444 -
2,270,873 - 2,196,884
1,523,852

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Other comprehensive income:
Items that are or may be reclassified to profit or loss
Equity-accounted investee - share of OCI
Items that will never be reclassified to profit or loss
E-quity accounted investee effect of dilution
Remeasurement of defined benefit liability
Equity investment at FVOCI - net change in fair value
Other comprehensive income/(loss), net of tax
Total comprehensive income for the year
The accompanying notes and the statement of significant accounting policies ar

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19(i) 84,554 (19,344) - -

19(ii) - 89,062 - -
26 9,710 (29,190) 9,710 (29,190)
156,012
21(a)(iii) 250,277 62,624 - -
103,152 9,710 (29,190)
2,521,150 2,167,694
2,806,596 1,533,562

re an integral part of these consolidated financial statements

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Consolidated and Separate Stateme

As at 31 December 2019

In thousands of naira Not
ASSETS
Property and equipment 1
Intangible assets 1
Investment properties 1
Investment in associates 1
Investment in subsidiaries 2
Investment securities 2
Total non- current assets
Intercompany receivables 1
Trade and other receivables 2
Prepayment 2
Investment securities 2
Cash and cash equivalents 2
Total current assets
Total assets 25(a
EQUITY 25(b
Accumulated funds
Other reserves

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ent of Financial Position

Group Group Exchange Exchange
te 2019 2018 2019 2018

16 4,309,602 3,914,072 2,255,227 1,836,427
15 257,155 309,030 252,520 304,394
18 - - -
19 10,689,986 1,144,400
20 - 9,024,856 2,157,340 1,058,304
21 4,761,505 945,950 945,950
-
20,018,248 2,604,247 4,305,438 2,340,632
17 - 16,996,605 9,916,475 6,485,707
22 229,550 2,052,107
23 301,827 - 868,671 1,172,910
21 7,133,863 1,282,058 200,383
24 4,416,040 301,802 218,637
291,787 6,943,867 7,688,734
12,081,280 7,688,773 4,307,178 2,606,461
32,099,528 2,810,873 12,621,901 13,738,849
12,073,491 22,538,376 20,224,556
a) 28,060,679 29,070,096
b) 378,024 19,034,188 17,510,336
25,789,805 (53,109) (62,819)
127,748

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Total equity 26
27
LIABILITIES 28
Retirement benefit obligation
Deferred tax liability 29
Provisions 30
Total non current liabilities 3

Other liabilities
Current tax liabilities
Lease Liabilities
Total current liabilities

Total liabilities
Total equity and liabilities

The financial statements were approved by the Council on 18 February 2020 and s

Otunba Abimbola Ogunbanjo Mr. Oscar N. Onyem
FRC/2013/NBA/00000004358 FRC/2013/IODN/00
(President) (Chief Executive Offi

The accompanying notes and the statement of significant accounting policies are

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28,438,703 25,917,553 18,981,079 17,447,517

6 477,034 368,344 477,034 368,344
7 201,395 192,332 - -
8 357,276 357,276
917,952 357,276 357,276
1,035,705 834,310 725,620
9 2,576,302 2,063,366
0 47,811 171,225 2,554,990 2,051,419
31 1,008 - - -
-
2,625,120 2,234,591 167,998
2,722,988 2,051,419
3,660,825 3,152,543
32,099,528 29,070,096 3,557,298 2,777,039
22,538,376 20,224,556
signed on its behalf by:

ma, OON Mr. Cyril Eigbobo
0000001802 FRC/2013/ICAN/00000001736
ficer) (Chief Financial Officer)

an integral part of these consolidated financial statements

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Consolidated and Separate Stateme

For the year ended 31 December 2019

The Group

In thousands of naira

Balance at 1 January 2018
Total comprehensive income for the year:
Surplus for the year
Other comprehensive income (net of income tax)
Equity accounted investee - share of OCI
Dilution effect
Total comprehensive income for the year
Balance as at 31 December 2018
Balance at 1 January 2019, as previously reported
Opening balance
Adjustment on initial application of IFRS 16, net of tax
Restated balance at 1 January 2019
Total comprehensive income for the year:
Surplus for the year
Other comprehensive income (net of income tax)

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ent of Changes in Equity

Accumulated Fair value Actuarial Total equity
funds reserve valuation reserve 23,110,957
58,225
23,086,361 (33,629)
62,624
2,703,444 (19,344) (29,190) 2,703,444
- - 33,434
- 89,062
132,342 (29,190) (19,344)
2,703,444 190,567 (62,819) 89,062
25,789,805 190,567 (62,819)
25,789,805 2,806,596
- - 25,917,553
- 190,567 (62,819) 25,917,553
25,789,805
156,012 9,710 -
2,270,873 25,917,553

2,270,873
165,722

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Equity accounted investee - share of OCI
Total comprehensive income for the year

Balance at 31 December 2019

The Exchange

In thousands of naira
Balance at 1 January 2018, as previously reported
Total comprehensive income for the year:
Surplus for the year
Other comprehensive income (net of income tax)
Total comprehensive income for the year
Balance as at 31 December 2018
Balance at 1 January 2019, as previously reported
Adjustment on initial application of IFRS 16, net of tax
Restated balance at 1 January 2019
Total comprehensive income for the year:
Surplus for the year
Other comprehensive income (net of income tax)
Total comprehensive income for the year

Balance at 31 December 2019

The accompanying notes and the statement of significant accounting policies are an integral part of

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- 84,554 - 84,554
2,270,873 240,566 9,710 2,521,149

28,060,679 431,133 (53,109) 28,438,703

Accumulated Fair value Actuarial Total equity
funds reserve valuation reserve
15,279,823
15,313,452 - (33,629)
2,196,884
2,196,884 - - (29,190)
- (29,190)
- (29,190) 2,167,694
2,196,884 - (62,819) 17,447,517
17,510,336 - (62,819) 17,447,517
17,510,336
- -
17,510,336 (62,819) 17,447,517

1,523,852 - - 1,523,852
- - 9,710 9,710
9,710
1,523,852 - 1,533,562
(53,109)
19,034,188 18,981,079

these consolidated financial statements

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Consolidated and Separate Stateme

For the year ended 31 December 2019

In thousands of naira
Cash flows from operating activities:
Surplus after tax
Adjustments for:
Income tax expense
Depreciation of property and equipment
Amortization of intangible assets
Gain on disposal of property and equipment
Provisions no longer required
Loss on foreign exchange rates translation
Impairment loss on investment securities
Impairment loss/(reversal) on cash and cash equivalent
Impairment charges on intercompany receivables
Impairment loss on trade and other receivables
Impairment loss on investment in subsidiaries
Interest on Lease liabilities
Fair value changes on investment held at FVOCI
Share of profit of equity accounted investee
Provision for retirement benefit obligations
Interest income
Dividend income

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ent of Cash Flows

Note Group Group Exchange Exchange
2019 2018 2019 2018
14
16 2,270,873 2,703,444 1,523,852 2,196,884
15
10 30,925 101,583 - -
10 384,003 374,916 437,186 321,567
13 205,687 205,687
11 92,767 92,767
11 (238,854) (6,120) (25,962) (6,121)
17 (147,498) - (139,830) -
11
11 1,825 9,521 (25) 9,521
31 295 15 295 15
21 481 481
19 - (846) (175,684) (846)
26 - 63,215 1,977
10 63,215 51,195
10 - 51,195 -
- 27,597 500
3,029
(156,012) (62,624) - -
(1,531,589) (1,302,603) - -
118,400 185,667
118,400 185,667 (1,732,046) (1,593,967)
(1,732,102) (1,600,813) (1,050,049) (953,476)

- - (859,805) 418,602

(840,242) 659,023

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Change in intercompany receivables
Change in trade and other receivables
Change in prepayments
Change in liabilities

Income tax paid
Retirement benefit obligation paid

Net cash from operating activities
Cash flows from investing activities:
Interest received
Dividend received
Purchase of investments financial assets
Acquisition of property and equipment
Proceeds from the sale of property and equipment
Proceeds from the sale of investment property
Additional investment in associates
Acquisition of intangible assets

Net cash used in investing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year
Effect of movements in exchange rates on cash held
Cash and cash equivalents at end of year

The accompanying notes and the statement of significant accounting policies are an integral part of

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35(i) - - 20,205 130,933
35(ii) 989,293 (225,444) 909,312 (220,530)
35(iii) (10,040) (83,164)
35(iv) 512,936 (70,105) 503,571 3,045
(627,433) (391,619)
30 651,946 490,119
26 (47,028) (263,960) - (59,569)
(28,179) - -
- (41,577)
490,119 (41,577)
604,918 (333,716)
(101,146)

35(v) 1,620,077 1,512,183 1,620,439 1,503,018
35(vi) 947,880 953,476 947,880 858,129
35(vii)
(1,313,218) (2,011,308) (1,107,137) (2,082,605)
16 (702,242) (300,513) (569,996) (263,451)
35(viii) 222,716 44,165 9,823 44,164
35(ix) 1,450,000 - 1,450,000 -
(608,000) (608,000)
35(x) (1,183,590) (2,004) (1,099,036) (2,004)
15 (40,893) (40,893)

35(xi) 1,000,730 (412,002) 1,211,079 (550,749)

1,605,648 (745,717) 1,701,198 (651,896)

2,812,514 3,566,349 2,608,102 3,268,116
- (8,104) - (8,104)

4,418,161 2,812,514 4,309,300 2,608,102

these consolidated financial statements

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Notes to the
Consolidated and
Separate Financial

Statements

Notes to the Consolidated and Separate
Financial Statements

For the year ended 31 December 2019

1 Reporting entity except for the following items, which
The Nigerian Stock Exchange ("the are measured on an alternative basis
Exchange'') is a Company domiciled in on each reporting date:
Nigeria. The Exchange was incorporated (a) Investments in debt instruments
in Nigeria as a private Company Limited
by shares on 15 September 1960 as measured at amortised cost.
Lagos Stock Exchange and its name was (b) Equity investments measured at
changed to The Nigerian Stock Exchange
on 15 December 1977. The Exchange was fair value through other
re-incorporated as a Company Limited by comprehensive income (FVOCI).
Guarantee on 18 December 1990 and (c) The liability for defined benefit
gained full membership status of the obligations recognised as the
World Federation of Exchanges (the present value of the defined benefit
“WFE”) on 28 December 2014. The obligation less the fair value of the
address of the Exchange’s registered plan assets.
office is Stock Exchange House, 2/4 (d) Trade and other receivables and
Customs Street, Lagos. other liabilities are measurement at
amortised cost.
The consolidated and separate financial These consolidated financial
statements of the Exchange as at and for statements are presented in naira,
the year ended 31 December 2019 which is the Company’s functional
comprise the Exchange and its currency. All amounts have been
subsidiaries (together referred to as the rounded to the nearest thousand,
“Group”) and the Group's interest in equity unless otherwise indicated. The
accounted investees. The principal financial statements were
activity of the Exchange is to provide authorised for issue by the Council
facilities to the public for the purchase and on 18 February 2020. Details of the
sale of capital market securities. Group's and the Exchange's
accounting policies are included in
note 5 to the financial statements.

2 Basis of accounting 3 Use of judgments and estimates

i Statement of compliance In preparing these consolidated and

These consolidated and separate separate financial statements, the

financial statements have been Council members have made

prepared in accordance with judgments, estimates and assumptions

International Financial Reporting that affect the application of the Group's

Standards (IFRS), in the manner accounting policies and the reported

required by the Companies and Allied amounts of assets, liabilities, income and

Matters Act of Nigeria (CAMA) and the expenses. Actual results may differ from

Financial Reporting Council of Nigeria these estimates. Judgment refers to

Act, 2011. management's judgments applied to

significant accounting policies that

ii Basis of preparation materially impact the financial

These financial statements have been statements. Estimates and underlying

prepared on an accrual basis and assumptions are reviewed on an ongoing

under historical cost convention basis. Revisions to estimates are

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recognised prospectively. weighted-average loss
rate;
I Judgements Note 26 Measurement of defined
Information about judgements made Note 32 benefit obligations: key
in applying accounting policies that actuarial assumptions;
have the most significant effects on the and
amounts recognised in the financial Recognition and
statements is included in the following measurement of
notes: provisions and
contingencies: key
Note 31 Lease Term: whether the assumptions about the
Note 19 Group is reasonably likelihood and magnitude
Note 20 certain to exercise of an outflow of
extension options; resources.
Equity-accounted
investees: whether the iii Measurement of fair values
Group has significant A number of the Group's accounting
influence over an investee; policies and disclosures require the
and measurement of fair values, for both
Consolidation: whether financial and non-financial assets
the Group has de facto and liabilities.
control over an investee.

ii Assumptions and estimation The Group has an established
uncertainties control framework with respect to
Information about assumptions and the measurement of fair values. This
estimation uncertainties that have a includes a valuation team that has
significant risk of resulting in a overall responsibility for overseeing
material adjustment within the next all significant fair value
financial year are included in the measurements, including Level 3 fair
following notes: values, and report directly to the
chief financial officer.

Note 7(B) FVOCI: Key assumptions The valuation team regularly reviews
underlying the significant unobservable inputs and
determination of fair value valuation adjustments. If third party
of the investments; information, such as broker quotes
or pricing services, is used to
Note 15(A) Impairment test of measure fair values, then the
intangible assets and valuation team assesses the
goodwill: key evidence obtained from the third
assumptions underlying parties to support the conclusion
recoverable amounts, that such valuations meet the
including the requirements of IFRS, including the
recoverability of level in the fair value hierarchy in
development costs; which such valuations should be
classified. Significant valuation
Note 20 Investment in issues are reported to the Group's
subsidiaries: Key Audit and Risk Management
assumptions underlying Committee.
the recoverable amount;
When measuring the fair value of an
Note 22 Measurement of ECL asset or a liability, the Group uses
allowance for trade observable market data as far as
receivables : key
assumptions in
determining the

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possible. Fair values are categorised as previously reported, under IAS 17
into different levels in a fair value and related interpretations. The details
hierarchy based on the inputs used in of the changes in accounting policies are
the valuation techniques as follows. disclosed below. Additionally, the
(i) Level 1: Quoted market price disclosure requirements in IFRS 16 have
not generally been applied to
(unadjusted) in an active comparative information.
market for an identical
assets or liabilities. a) Definition of a lease
(ii) Level 2: inputs other than quoted Previously, the Group determined
prices included in Level 1 at contract inception whether an
that are observable for arrangement was or contained a
the asset or liability, lease under IFRIC 4 Determining
either directly (i.e. as whether an Arrangement contains
prices) or indirectly a Lease. Under IFRS 16, the Group
(iii) Level3: inputs for the asset or now assesses whether a contract
liability that are not is or contains a lease based on the
based on observable definition of a lease, as explained
market data in Note (5.16).
(unobservable inputs).
On transition to IFRS 16, the Group
If the inputs used to measure the fair elected to apply the practical
value of an asset or a liability fall into expedient to guide the
different levels of the fair value assessment of which
hierarchy, then the fair value transactions are leases. The
measurement is categorised in its Group applied IFRS 16 only to
entirety in the same level of the fair contracts that were previously
value hierarchy as the lowest level identified as leases. Contracts
input that is significant to the entire that were not identified as leases
measurement. under IAS 17 and IFRIC 4 were not
reassessed for whether there is a
The Group recognises transfers lease under IFRS 16. Therefore,
between levels of the fair value the definition of a lease under IFRS
hierarchy at the end of the reporting 16 was applied only to contracts
period during which the change has entered into or changed on or after
occurred. Further information about 1 January 2019.
the assumptions made in measuring
fair values is included in note 7. (b) As a lessee
As a lessee, the Group leases
4 Changes in accounting policies office space for its respective
The Group initially applied IFRS 16 Leases branches. The Group previously
from 1 January 2019. A number of new classified leases as operating or
standards are also effective from 1 finance leases based on its
January 2019 but they do not have a assessment of whether the lease
material effect on the Group’s financial transferred significantly all of the
statements. risks and rewards incidental to
ownership of the underlying asset
The Group applied IFRS 16 using the to the Group. Under IFRS 16, the
modified retrospective approach which Group recognises right-of-use
had no cumulative effect of initial assets and lease liabilities – i.e.
application in accumulated funds at 1 these leases are on-balance
January 2019. Accordingly, the sheet. At commencement or on
comparative information presented for modification of a contract that
2018 is not restated – i.e. it is presented,
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contains a lease component, the Group The Group used a number of practical
allocates the consideration in the expedients when applying IFRS 16 to
contract to each lease component on leases previously classified as operating
the basis of its relative stand- alone leases under IAS 17. In particular, the
price. Also, for leases of property, the
Group has elected to separate non- Group:
lease components and account for the - did not recognise right-of-use
lease and associated non-lease
components as a separate assets and liabilities for leases for
components. which the lease term ends within
12 months of the date of initial ap
i. Leases classified as operating - did not recognise right-of-use
leases under IAS 17 assets and liabilities for leases of
Previously, the Group classified low value assets (e.g. IT
property leases as operating [equipment);
leases under IAS 17. On transition, - excluded initial direct costs from
for these leases, lease liabilities the measurement of the right-of-
were measured at the present use asset at the date of initial
value of the remaining lease application; and
payments, discounted at the - used hindsight when determining
Group’s incremental borrowing the lease term.
rate as at 1 January 2019 (see
Note 4(d)). Right-of-use assets (c) As a lessor
are measured at either: The Group leases out its own
– their carrying amount as if property. The Group has classified
IFRS 16 had been applied these leases as operating leases.
since the commencement The Group is not required to make
date, discounted using the any adjustments on transition to
Group’s incremental IFRS 16 for leases in which it acts
borrowing rate at the date of as a lessor. The Group has applied
initial application; or IFRS 15 Revenue from Contracts
– an amount equal to the lease with Customers to allocate
liability, adjusted by the consideration in the contract to
amount of any prepaid or each lease and non-lease
accrued lease payments: the component.
Group applied this approach.
(d) Impact on financial statements
The Group has tested its right-of-use i. Impact on transition
assets for impairment on the date of
transition and has concluded that there On transition to IFRS 16, the Group
is no indication that the right-of-use recognised additional right-of-
assets are impaired use assets and additional lease
liabilities. The impact on transition
is summarised below.

In thousands of naira 1-Jan-19 1-Jan-19

Right-of-use assets – property, plant and equipment 60,925 298,770
Lease Liabilities 45,651 283,496

When measuring lease liabilities for leases that were classified as operating leases,
the Group discounted lease payments using its incremental borrowing rate at
1 January 2019. The weighted average rate applied is 17%.

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In thousands of naira Group Exchange
1-Jan-19 1-Jan-19
Operating lease commitments at 31 December 2018 as
disclosed under IAS 17 in the Group's consolidated 47,672 143,095
financial statements 17% 17%
Discounted using the incremental borrowing rate at - -
1 January 2019 - -
– Recognition exemption for leases of low-value assets
– Recognition exemption for leases with less than

12 months of lease term at transition

5 Significant accounting policies when control is lost.
The Group has consistently applied the
following accounting policies to all (iii) Investment in associates
periods presented in these consolidated Associates are those entities in
and separate financial statements except which the Group has significant
where otherwise stated. influence, but not control or joint
control, over the financial and
5.1 Basis of consolidation operating policies.
(I) Subsidiaries
Subsidiaries are entities controlled by The Group accounts for Interests
the Group. The Group 'controls' an in associates using the equity
entity if it is exposed to, or has rights method. They are initially
to, variable returns from its recognised at cost, which include
involvement with the entity and has transaction costs. Subsequent to
the ability to affect those returns initial recognition, the
through its power over the entity. The consolidated financial statements
consolidated and separate financial include the Group's share of the
statements incorporates the assets, profit or loss and OCI of equity-
liabilities and performance results of: accounted investees, until the
NSE Consult Limited, Coral Properties date on which the significant
Limited, NGX Real Estate Limited influence ceases.
(formerly Naira Properties Limited ) In the separate financial
and NSE Nominees Limited. The statements for the Exchange,
financial statements of subsidiaries investment in associates are
are included in the consolidated and carried at cost.
separate financial statements from
the date that control commences until (iv) Transactions eliminated on
the date that control ceases. consolidation
In the separate financial statements, Intra-group balances and
investment in subsidiaries are carried transactions, and any unrealised
at cost less impairment losses. income and expenses arising from
intra-group transactions, are
(ii) Loss of control eliminated in preparing the
When the Group loses control over a consolidated and separate
subsidiary, the Group derecognises financial statements. Unrealised
the assets and liabilities of the gains arising from transactions
subsidiary, any non-controlling with equity-accounted investees
interests and the other components of are eliminated against the
equity related to the subsidiary. Any investment to the extent of the
interest retained in the former Group’s interest in the investee.
subsidiary is measured at fair value Unrealised losses are eliminated

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in the same way as unrealised gains, becomes a party to the contractual
but only to the extent that there is no provisions of the instrument.
evidence of impairment.
A financial asset (unless it is a trade
(v) Non-controlling interest receivable without a significant
Non-controlling interest are financing component) or financial
measured at their proportionate share liability is initially measured at fair
of the acquiree's identifiable net value plus, for an item not at FVTPL,
assets at the acquisition date. transaction costs that are directly
Changes in the Group's interests in attributable to its acquisition or issue.
subsidiary that do not result in a loss A trade receivable without a
of control are accounted for as equity significant financing component is
transaction. initially measured at the transaction
price.
5.3 Foreign currency translations
Transactions in foreign currencies are (ii) Classification and subsequent
translated into the functional currencies measurement
of the operations at the spot exchange Financial Assets
rates at the dates of the transactions. On initial recognition, a financial asset
is classified as measured at: amortised
Monetary assets and liabilities cost; fair value through other
denominated in foreign currencies at the comprehensive income (FVOCI) – debt
reporting date are translated into the investment; FVOCI - equity investment;
functional currency at the exchange rate or fair value through profit or loss
as at that date. Non-monetary assets and (FVTPL).
liabilities that are measured at fair value in Financial assets are not reclassified
a foreign currency are translated into the subsequent to their initial recognition
functional currency at the exchange rate unless the Group changes its business
when the fair value was determined. Non- model for managing financial assets, in
monetary items that are measured in which case all affected financial assets
terms of historical cost in a foreign are reclassified on the first day of the
currency are translated at the exchange first reporting period following the
rate at the date of the transaction. Foreign change in the business model.
currency differences are generally
recognised in statement of profit or loss A financial asset is measured at
and presented within operating expenses. amortised cost if it meets both of the
However, foreign currency differences following conditions and is not
arising from the translation of the designated as at FVTPL:
following item are recognised in OCI. - it is held within a business model
- an investment in equity security
whose objective is to hold assets
designated as at FVOCI (except on to collect contractual cash flows;
impairment, in which case foreign and
currency differences that have - its contractual terms give rise on
been recognised in OCI are specified dates to cash flows that
reclassified to profit or loss); are solely payments of principal
and interest on the principal
5.4 Financial instruments amount outstanding.
(i) Recognition and initial measurement
Trade receivables and debt securities A debt investment is measured at FVOCI
issued are initially recognised when if it meets both of the following
they are originated. All other financial conditions and is not designated as at
assets and financial liabilities are FVTPL:
initially recognised when the Group - it is held within a business model

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whose objective is achieved by assets held within that business
both collecting contractual cash model) and how those risks are
flows and selling financial managed;
- its contractual terms give rise on - how managers of the business are
specified dates to cash flows that compensated – e.g. whether
are solely payments of principal compensation is based on the fair
and interest on the principal value of the assets managed or the
amount outstanding. contractual cash flows collected; and
- the frequency, volume and timing of
On initial recognition of an equity sales of financial assets in prior
investment that is not held for trading, the periods, the reasons for such sales and
Group may irrevocably elect to present expectations about future sales
subsequent changes in the investment’s activity.
fair value in OCI. This election is made on Transfers of financial assets to third
an investment-by-investment basis. parties in transactions that do not qualify
for derecognition are not considered sales
All financial assets not classified as for this purpose, consistent with the
measured at amortised cost or FVOCI as Group’s continuing recognition of the
described above are measured at FVTPL. assets.
On initial recognition, the Group may Financial assets that are held for trading
irrevocably designate a financial asset or are managed and whose performance
that otherwise meets the requirements to is evaluated on a fair value basis are
be measured at amortised cost or at measured at FVTPL.
FVOCI as at FVTPL if doing so eliminates
or significantly reduces an accounting Assessment whether contractual cash
mismatch that would otherwise arise. flows are solely payments of principal
and interest:
Financial assets - Business model For the purposes of this assessment,
assessment ‘principal’ is defined as the fair value of
The Group makes an assessment of the the financial asset on initial recognition.
objective of the business model in which a ‘Interest’ is defined as consideration for
financial asset is held at a portfolio level the time value of money and for the credit
because this best reflects the way the risk associated with the principal
business is managed and information is amount outstanding during a particular
provided to management. The period of time and for other basic
information considered includes: lending risks and costs (e.g. liquidity risk
- the stated policies and objectives for and administrative costs), as well as a
profit margin
the portfolio and the operation of those
policies in practice. These include In assessing whether the contractual
whether management’s strategy cash flows are solely payments of
focuses on earning contractual principal and interest, the Group
interest income, maintaining a considers the contractual terms of the
particular interest rate profile, instrument. This includes assessing
matching the duration of the financial whether the financial asset contains a
assets to the duration of any related contractual term that could change the
liabilities or expected cash outflows or timing or amount of contractual cash
realising cash flows through the sale flows such that it would not meet this
of the assets; condition. In making this assessment,
- how the performance of the portfolio is the Group considers:
evaluated and reported to the Group’s - contingent events that would
management;
- the risks that affect the performance of change the amount or timing of
the business model (and the financial cash flows;

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- terms that may adjust the contractual include reasonable additional
coupon rate, including variable - rate compensation for early termination of
features; the contract. Additionally, for a financial
asset acquired at a discount or premium
- prepayment and extension features; to its contractual par amount, a feature
and that permits or requires prepayment at an
amount that substantially represents the
- terms that limit the Group’s claim to contractual par amount plus accrued (but
cash flows from specified assets (e.g. unpaid) contractual interest (which may
non-recourse features). also include reasonable additional
compensation for early termination) is
A prepayment feature is consistent with treated as consistent with this criterion if
the solely payments of principal and the fair value of the prepayment feature is
interest criterion if the prepayment insignificant at initial recognition.
amount substantially represents unpaid
amounts of principal and interest on the
principal amount outstanding, which may

Financial assets - Subsequent measurement and gains and losses:

Financial assets at These assets are subsequently measured at amortised cost using
amortised cost effective interest rate method. The amortised cost is reduced by
impairment losses. Interest income, foreign exchange gains and
losses and impairment are recognised in profit or loss. Any gain or
loss on derecognition is recognised in statement of profit or loss.
Included in financial assets at amortised cost are investments in
debt securities, cash and cash equivalents, intercompany
receivables and trade and other receivables.

Equity investments These assets are subsequently measured at fair value. Dividends
at FVOCI are recognised as income in profit or loss unless the
dividend clearly represent recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and are
never reclassified to profit or loss. Classified as FVOCI are the
investment in equity securities.

Debt investments These assets are subsequently measured at fair value. Interest
at FVOCI income calculated using the effective interest method, foreign
exchange gains and losses and impairment are recognised in profit
or loss. Other net gains and losses are recognised in OCI. On
derecognition, gains and losses accumulated in OCI are reclassified
to profit or loss.

Financial liabilities - Classification, gains and losses, including any interest
subsquent measurement and gains and expense, are recognised in profit or loss.
losses Other financial liabilities are
Financial liabilities are classified as subsequently measured at amortised
measured at amortised cost or FVTPL. A cost using the effective interest method.
financial liability is classified as at FVTPL Interest expense and foreign exchange
if it is classified as held-for- trading, it is a gains and losses are recognised in profit
derivative or it is designated as such on or loss. Any gain or loss on derecognition
initial recognition. Financial liabilities at s also recognised in profit or loss. The
FVTPL are measured at fair value and net principle of amortised cost is disclosed in

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note 5.4 (v)(b). legally enforceable right to set off the
amounts and it intends either to
(iii) Derecognition of financial settle them on a net basis or to
instruments realise the asset and settle the
Financial assets liability simultaneously.
The Group derecognises a financial
asset when the contractual rights to (v) The concept of fair value
the cash flows from the financial measurement and amortised cost
asset expires, or it transfers the (a) Fair value measurement
rights to receive the contractual Fair value is the price that would be
cash flows in a transaction in which received to sell an asset or paid to
substantially all of the risks and transfer a liability in an orderly
rewards of ownership of the financial transaction between market
asset are transferred or in which the participants at the measurement
Group neither transfers nor retains date in the principal or, in its absence,
substantially all of the risks and the most advantageous market to
rewards of ownership and it does not which the Group has access at the
retain control of the financial asset. date. A number of the Group's
The Group enters into transactions accounting policies and disclosures
whereby it transfers assets require the measurement of fair
recognised in its statement of values, for both financial and non
financial position, but retains either financial assets and liabilities
all or substantially all of the risks and (see Note 3 (iii))
rewards of the transferred assets. In
these cases, the transferred assets When available, the Group measures
are not derecognised. the fair value of an instrument using
the quoted price in an active market
Financial liabilities for that instrument. A market is
The Group derecognises a financial regarded as active if transactions for
liability when its contractual the asset or liability take place with
obligations are discharged or sufficient frequency and volume to
cancelled, or expired. The Group also provide pricing information on an
derecognises a financial liability ongoing basis.
when its terms are modified and the If an asset or a liability measured at
cash flows of the modified liability fair value has a bid price or an ask
are substantially different, in which price, then the Group measures the
case a new financial liability based assets at a bid price and liabilities at
on the modified terms is recognised an ask price.
at fair value.
On derecognition of a financial The best evidence of the fair value of
liability, the difference between the a financial instrument on initial
carrying amount extinguished and recognition is normally the
the consideration paid (including any transaction price – i.e. the fair value
non-cash assets transferred or of the consideration given or
liabilities assumed) is recognised in received. If the Group determines
profit or loss. that the fair value on initial
recognition differs from the
(iv) Offsetting transaction price and the fair value is
Financial assets and financial evidenced neither by a quoted price
liabilities are offset and the net in an active market for an identical
amount presented in the statement asset or liability nor based on a
of financial position when, and only valuation technique for which any
when, the Group currently has a unobservable inputs are judged to be

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insignificant in relation to the instrument) has not increased
measurement, then the financial significantly since initial recognition.
instrument is initially measured at
fair value, adjusted to defer the Loss allowances for trade receivables
difference between the fair value on (including lease receivables) and
initial recognition and the contract assets are always measured at
transaction price. Subsequently, that an amount equal to lifetime ECLs
difference is recognised in profit or
loss on an appropriate basis over the When determining whether the credit risk
life of the instrument but no later of a financial asset has increased
than when the valuation is wholly significantly since initial recognition and
supported by observable market when estimating ECLs, the Group
data or the transaction is closed out. considers reasonable and supportable
information that is relevant and available
(b) Amortised cost measurement without undue cost or effort. This
The amortised cost of a financial includes both quantitative and
asset or liability is the amount at qualitative information and analysis,
which the financial asset or liability based on the Group’s historical
is measured at initial recognition, experience and informed credit
minus principal repayments, plus or assessment and including
minus the cumulative amortisation forward-looking information.
using the effective interest method The Group assumes that the credit risk
of any difference between the initial on a financial asset has increased
amount recognised and the maturity significantly if it is more than 365 days
amount, minus any reduction for past due or if the obligor has been
impairment. delisted from the Exchange's trading
Effective interest method is a platform for trade receivables in the case
method of calculating the amortised of listed companies.
cost of a financial asset or a financial
liability and of allocating the interest The Group considers a financial asset to
income or interest expense over the be in default when:
relevant period. - the borrower is unlikely to pay its

5.5 Impairment credit obligations to the Group in
(I) Non-derivative financial assets full, without recourse by the Group
Financial instruments to actions such as realising
The Group recognises loss allowances for security (if any is held); or
ECLs on: - the financial asset is more than 90
- financial assets measured at days past due.
amortised cost and
- debt investments measured at The Group considers a debt security to
FVOCI; have low credit risk when its credit risk
The Group measures loss allowances at rating is equivalent to the globally
an amount equal to lifetime ECLs, except understood definition of ‘investment
for the following, which are measured at grade’. The Group considers this to be
12-month ECLs: between AAA and BBB per Fitch,
- debt securities that are determined Standard & Poor's, and Global Credit
to have low credit risk at the Rating.
reporting date; and Lifetime ECLs are the ECLs that result
- other debt securities and bank from all possible default events over the
balances for which credit risk (i.e. the expected life of a financial
risk of default occurring over the instrument.12-month ECLs are the
expected life of the financial portion of ECLs that result from default
events that are possible within the 12
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months after the reporting date (or a Write-off
shorter period if the expected life of the The gross carrying amount of a financial
instrument is less than 12 months). asset is written off when the Group has
The maximum period considered when no reasonable expectations of
estimating ECLs is the maximum recovering a financial asset in its entirety
contractual period over which the Group is or a portion thereof. For corporate
exposed to credit risk. customers, the Group individually makes
an assessment with respect to the
Measurement of ECLs timing and amount of write-off based on
ECLs are a probability-weighted estimate whether there is a reasonable
of credit losses. Credit losses are expectation of recovery. The Group
measured as the present value of all cash expects no significant recovery from the
shortfalls (i.e. the difference between the amount written off. However, financial
cash flows due to the entity in accordance assets that are written off could still be
with the contract and the cash flows that subject to enforcement activities in order
the Group expects to receive). ECLs are to comply with the Group’s procedures
discounted at the effective interest rate of for recovery of amounts due.
the financial asset.
(ii) Impairment of non-financial
Credit-impaired financial assets assets
At each reporting date, the Group
assesses whether financial assets carried The carrying amounts of the Group’s
at amortised cost are credit-impaired. A non-financial assets other than deferred
financial asset is ‘credit-impaired’ when tax assets are reviewed at each
one or more events that have a reporting date to determine whether
detrimental impact on the estimated there is any indication of impairment. If
future cash flows of the financial asset any such indication exists then the
have occurred. asset’s recoverable amount is
estimated. Goodwill is tested annually
Evidence that a financial asset is for impairment.
credit-impaired includes the following
observable data: For impairment testing, assets grouped
- significant financial difficulty of into cash-generating units (CGUs). A
cash-generating unit is the smallest
the borrower or issuer identifiable asset group that generates
- a breach of contract such as a cash flows that largely are independent
from other assets and groups.
default or being more than 365 Impairment losses are recognised in
days past due; profit or loss. Impairment losses
- it is probable that the borrower will recognised in respect of cash-
enter bankruptcy or other financial generating units are allocated first to
reorganisation; or reduce the carrying amount of any
- the disappearance of an active goodwill allocated to the units and then
market for a security because of to reduce the carrying amount of the
financial difficulties. other assets in the unit (group of units)
on a pro rata basis.
Presentation of allowance for ECL in the
statement of financial position The recoverable amount of an asset or
Loss allowances for financial assets cash-generating unit is the greater of its
measured at amortised cost are deducted value in use and its fair value less costs
from the gross carrying amount of the to sell. In assessing value in use, the
assets.For debt securities at FVOCI, the estimated future cash flows are
loss allowance is charged to profit or loss discounted to their present value using a
and is recognised in OCI. pre-tax discount rate that reflects

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current market assessments of the time items (major components) of property
value of money and the risks specific to and equipment and each component is
the asset. depreciated separately. Changes to an
existing item of property or equipment are
An impairment loss is recognised if the added to or deducted from the cost of the
carrying amount of an asset or CGU related asset and depreciated
exceeds its recoverable amount. prospectively over the remaining useful
Impairment losses are recognised in life of the asset.
profit or loss. They are allocated first to
reduce the carrying amount of any Any gain or loss on disposal of an item of
goodwill allocated to the CGU, and then to property and equipment is recognised in
reduce the carrying amounts of the other income/other expenses in
other assets in the CGU on a pro rata statement of profit or loss.
basis.
(ii) Subsequent costs
An impairment loss in respect of goodwill The Subsequent expenditure is
is not reversed. In respect of other assets, capitalised only if it is probable that the
impairment losses recognised in prior future economic benefits associated
years are assessed at each reporting date with the expenditure will flow to the
for any indications that the loss has Group. The carrying amount of the
decreased or no longer exists. An replaced part is derecognised. The costs
impairment loss is reversed if there has of the day-to-day servicing of property
been a change in the estimates used to and equipment are recognised in profit or
determine the recoverable amount. An loss as incurred.
impairment loss is reversed only to the
extent that the asset’s carrying amount (iii) Depreciation
does not exceed the carrying amount that Depreciation is calculated to write off the
would have been determined, net of cost of items of property, plant and
depreciation or amortisation, if no equipment less their estimated residual
impairment loss had been recognised. values using the straight-line method
over their estimated useful lives, and is
5.6 Property and equipment generally recognised in profit or loss.
(I) Recognition and measurement Land is not depreciated.
Items of property and equipment are
initially recognised at cost, which includes Depreciation begins when an asset is
capitalised borrowing costs, and available for use and ceases at the earlier
subsequently measured at cost less of the date that the asset is derecognised
accumulated depreciation and or classified as held for sale in
accumulated impairment losses. accordance with IFRS 5. A non-current
asset or disposal group is not
If significant parts of an item of property depreciated while it is classified as held
and equipment have different useful lives, for sale.
then they are accounted for as separate

The estimated useful lives of items of property and equipment for the current and comparative
year are as follows:

Leasehold improvements Over the shorter of the useful life of item or lease period
Freehold land Not depreciated
Building 50 years
Computer equipment 5 years
Office equipment 5 years
Furniture, fixtures & fittings 5 years

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Motor vehicles 5 years

Depreciation methods, useful lives and residual values are reassessed at each reporting date and
adjusted if applicable.

(iv) De-recognition embodied in the specific asset to which it
An item of property and equipment is relates. All other expenditure is expensed
derecognised on disposal or when no as incurred.
future economic benefits are expected
from its use or disposal. Any gain or loss (iii) Amortisation
arising on de-recognition of the asset Amortisation is recognised in profit or
(calculated as the difference between the loss on a straight-line basis over the
net disposal proceeds and the carrying estimated useful life of the software,
amount of the asset) is included in profit from the date that is available for use
or loss in the year the asset is since this most reflects the expected
derecognised. pattern of consumption of the future
economic benefits embodied in the
5.7 Intangible assets asset. The estimated useful life of
(I) Goodwill software is five years. The amortisation
Goodwill arising on the acquisition of methods, useful lives and residual values
subsidiaries is measured at cost less of intangible assets are reviewed at each
accumulated impairment losses. In financial year-end and adjusted if
respect of equity-accounted investments, appropriate.
the carrying amount of goodwill is
included in the carrying amount of the (iv) De-recognition
investment, and an impairment loss on Intangible assets are derecognised on
such an investment is not allocated to disposal or when no future economic
any asset, including goodwill, that forms benefits are expected from its use or
part of the carrying amount of the equity- disposal. Any gain or loss arising on de-
accounted investee. recognition of the asset (calculated as
the difference between the net disposal
(ii) Software proceeds and the carrying amount of the
Purchased software is recognised if it is asset) is included in profit or loss in the
probable that the expected future year the asset is derecognised.
economic benefits that are attributable to
the asset will flow to the entity; and the 5.8 Provisions
cost of the software can be measured Provisions are determined by
reliably. Expenditure that forms part of the discounting the expected future cash
cost of software that meets the flows at a pre-tax rate that reflects
recognition criteria are capitalized as part current market assessments of the time
of the software. The capitalized costs of value of money and the risks specific to
internally developed software or the liability. The unwinding of the
separately acquired software include all discount is recognised as finance cost.
costs directly attributable to developing
and purchasing the software respectively A provision for restructuring is
and capitalized borrowing costs, and are recognised when the Group has
amortised over its useful life. approved a detailed and formal
restructuring plan, and the restructuring
Software is stated at capitalized cost less either has commenced or has been
accumulated amortisation and announced publicly. Future operating
impairment. Subsequent expenditure of costs are not provided for.
software assets is capitalized only when
it increases the future economic benefits A provision for onerous contracts is

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recognised when the expected benefits The Group operates a funded defined
to be derived by the Group from a contract contribution retirement benefit scheme
are lower than the unavoidable cost of for its employees under the provisions
meeting its obligations under the of the Pension Reform Act of 2014. The
contract. The provision is measured at the employer contributes 10% while the
present value of the lower of the expected employee contributes 8% of the
cost of terminating the contract and the qualifying employee’s salary. Obligations
expected net cost of continuing with the in respect of the Group’s contributions to
contract. Before a provision is the scheme are recognised as an
established, the Group recognises any expense in the profit or loss account on
impairment loss on the assets associated an annual basis.
with that contract.
(iii) Defined benefit plans
5.9 Prepayments The Group’s net obligation in respect of
Prepayments are stated at cost less defined benefit plans is calculated
amortised amounts. Prepayments are separately for each plan by estimating
amortised to income by the straight-line the amount of future benefit that
method or according to performance of employees have earned in the current
the underlying transaction. and prior periods, discounting that
amount and deducting the fair value of
5.10 Employee Benefits any plan assets.
(I) Short-term employee benefits
Short-term employee benefits are The defined benefit obligation is
expensed as the related service is calculated annually by independent
provided. A liability is recognised for the actuaries using the projected unit credit
amount expected to be paid if the Group method. In determining the appropriate
has a present legal or constructive discount rate, the Group considers the
obligation to pay this amount as a result of market yields on Government Bonds of
past service provided by the employee medium duration as compiled by the
and the obligation can be estimated Debt Management Organisation (DMO).
reliably. When the calculation results in a
potential asset for the Group, the
(ii) Defined contribution plans recognised asset is limited to the
A defined contribution plan is a post present value of economic benefits
employment benefit plan under which an available in the form of any future
entity pays fixed contributions into a refunds from the plan or reductions in
separate entity and has no legal or future contributions to the plan. To
constructive obligation to pay further calculate the present value of economic
amounts. Obligations for contributions to benefits, consideration is given to any
defined contribution plans are recognised applicable minimum funding
as employee benefit expenses in profit or requirements.
loss in the years in which the services are
rendered by employees. Prepaid Remeasurements of the net defined
contributions are recognised as an asset benefit liability, which comprise actuarial
to the extent that a cash refund or a gains and losses, the return on plan
reduction in future payments is available. assets (excluding interest) and the
Contributions to a defined contribution effect of the asset ceiling (if any,
plan that is due more than 12 months after excluding interest), are recognised
the end of the year in which the immediately in OCI. The Group
employees render the service are determines the net interest expense
discounted to their present value at the (income) on the net defined benefit
reporting date. liability (asset) for the period by applying
the discount rate used to measure the
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defined benefit obligation at the beginning Effective 1 January 2015, long-term
of the annual period to the then-net incentive scheme was established for
defined benefit liability (asset), taking into certain eligible employees. The
account any changes in the net defined entitlement for the qualifying employee
benefit liability (asset) during the period is based on the following threshold of
as a result of contributions and benefit their gross salary per annum or annual
payments. Net interest expense and other cash pay (Total Cash Compensation
expenses related to defined benefit plans (TCC)) for every year of services,
are recognised in profit or loss. depending on the term completed.
* 15%-17.5% in the first five years of
When the benefits of a plan are changed
or when a plan is curtailed, the resulting service (first term)
change in benefit that relates to past * 25%-35% in the next 5 years of services
service or the gain or loss on curtailment
is recognised immediately in profit or loss. (second term)
The Group recognises gains and losses On 1 August 2017, management
on the settlement of a defined benefit plan established a long service recognition
when the settlement occurs. initiative which is designed to recognize,
appreciate and celebrate the
With effect from 31 March 2011, the contributions of long tenured
defined benefit scheme was terminated employees, at the attainment of
and final entitlements due to qualified milestone years during their work
staff was subsequently fully funded by lifespan with the company. The policy
the Group. became effective in 2018.

Table below presents the cash benefit attached to each milestone year.

Milestone Years Computation of cash benefit
5 years 5% of annual gross salary
10 years 9% of annual gross salary
15 years 13% of annual gross salary
20 years 17% of annual gross salary
25 years 21% of annual gross salary
30 years 25% of annual gross salary
35 years 30% of annual gross salary

(iv) Termination benefits whose operating results are reviewed
Termination benefits are expensed at the regularly by the Group Executive
earlier of when the Group can no longer Committee (being the chief operating
withdraw the offer of those benefits and decision maker) to make decisions about
when the Group recognises costs for a resources allocated to each segment
restructuring. If benefits are not expected and assess its performance, and for
to be settled wholly within 12 months of which discrete financial information is
the reporting date, then they are available. Information relating to
discounted. segment reporting is presented in Note 8
to the financial statements.
5.11.Segment reporting
An operating segment is a component of 5.12 Contingencies
the Group that engages in business (I) Contingent asset
activities from which it can earn revenues Contingent asset is a possible asset
and incur expenses, including revenues that arises from past events and whose
and expenses that relate to transactions existence will be confirmed only by the
with any of the Group’s other components, occurrence or non-occurrence of one or

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more uncertain future events not wholly income and recognised over the required
within the control of the entity. period. These are warehoused in
deferred income account.
A contingent asset is disclosed when an
inflow of economic benefit is probable. (ii) Other income
When the realization of income is virtually Other income are recognised as the
certain, then the related asset is not a related services are performed. Included
contingent and its recognition is in Other income are dividend income,
appropriate. interest income, market data income etc.
Contingent assets are assessed
continually to ensure that developments (a). Dividend income
are appropriately reflected in the financial Dividend income is recognised
statement. when the right to receive
income is established. Usually
(ii) Contingent liability this is the ex-dividend date for
Contingent liability is a possible obligation equity securities. Dividends
that arises from past events and whose are presented in net trading
existence will be confirmed only by the income or net income from
occurrence or non- occurrence of one or other financial instruments at
more uncertain future events not wholly fair value through profit or loss
within the control of the entity; or a present based on the underlying
obligation that arises from past events but classification of the equity
is not recognised because it is not investment. Dividend income
probable that an outflow of resources from equity accounted
embodying economic benefits will be investee is recognised as a
required to settle the obligation; or the component of other operating
amount of the obligation cannot be income.
measured with sufficient reliability.
(b) Interest Income
Contingent liability is disclosed unless the Interest income is recognised
possibility of an outflow of resources in the statement of profit or
embodying economic benefit is remote. A loss using the effective
provision for the part of the obligation for interest rate method. The
which an outflow of resources embodying effective interest rate is the
economic benefits is probable is rate that exactly discounts the
recognised, except in the extremely rare estimated future cash receipts
circumstances where no reliable through the expected life of the
estimate can be made. financial asset (or, where
appropriate, a shorter period)
Contingent liabilities are assessed to the carrying amount of the
continually to determine whether an financial asset. The effective
outflow of economic benefit has become interest rate is established on
probable. initial recognition of the
financial asset and is not
5.13 Revenue and other income revised subsequently.
(I) Revenue
Revenue comprises listing fees, entrance The calculation of the effective
fees, transaction fees and trading levies. interest rate includes
Revenue from fees and levies earned is contractual fees and points
recognised as related services are paid or received, transaction
performed. Any upfront fees or payment costs, and discounts or
for services that are rendered over a premiums that are an integral
period of time are treated as unearned part of the effective interest
rate. Transaction costs
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include incremental costs that are income or a lower tax expense when
directly attributable to the compared to minimum tax. Minimum
acquisition, issue or disposal of a tax is charged based on the highest of
financial asset or liability. certain range as specified in the
Company Income Tax Act (CITA).
Interest income presented in the
income statement includes The Federal Board of Inland Revenue
interest on financial assets at upheld that the income of the Exchange
amortised cost on an effective is not liable to tax since it is a company
interest basis. Interest income limited by guarantee.
and expenses on all trading assets
and liabilities are considered to be (ii) Deferred tax
incidental to the Group’s trading Deferred tax is recognised in respect of
operations and are presented temporary differences between the
together with all other changes carrying amounts of assets and liabilities
in the fair value of trading assets for financial reporting purposes and the
and liabilities in net trading amounts used for taxation purposes.
income. Deferred tax is not recognised for the
following temporary differences arising
( c) Rental Income from:
Rental income from investment • The initial recognition of goodwill;
property is recognised as revenue
on a straight-line basis over the • The initial recognition of assets or
term of the lease. Lease incentives liabilities in a transaction that is not
granted are recognised as an a business combination and
integral part of the total rental that affects neither accounting nor
income, over the term of the lease. taxable profit or loss; and

5.14 Income Tax • Investments in subsidiaries
Income tax expense comprises current and associate to the extent
and deferred tax. It is recognised in profit that the Group is able to
or loss except to the extent that it relates to control the timing of the
a business combination, or items reversal of the temporary
recognised directly in equity or in OCI. difference and it is probable
that they will not reverse in the
The Group has determined that interest foreseeable future;
and penalties related to income taxes,
including uncertain tax treatments, do not Deferred tax assets are recognised for
meet the definition of income taxes, and unused tax losses, unused tax credits
therefore accounted for them a under IAS and deductible temporary differences to
37 Provisions, Contingent Liabilities and the extent that it is probable that future
Contingent Assets. taxable profits will be available against
which they can be used. Future taxable
(i) Current tax profits are determined based on the
Current tax is the expected tax payable on reversal of relevant taxable temporary
taxable income or loss for the year differences. If the amount of taxable
determined in accordance with the temporary differences is insufficient to
Companies Income tax Act (CITA), using recognise a deferred tax asset in full, then
tax rates enacted or substantively enacted future taxable profits, adjusted for
at the reporting date, and any adjustment reversals of existing temporary
to tax payable or receivable in respect of differences, are considered, based on
previous years. Minimum tax is charged the business plans for individual
where an entity does not have taxable
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subsidiaries in the Group. Deferred tax on less active markets or discounted
assets are reviewed at each reporting date cash flow projections.
and are reduced to the extent that it is no
longer probable that the related tax benefit 5.16 Leases
will be realised; such reductions are As described in Note 4,The Group has
reversed when the probability of future applied IFRS 16 using the modified
taxable profits improves. retrospective approach and therefore the
Unrecognised deferred tax assets are comparative information has not been
reassessed at each reporting date and restated and continues to be reported
recognised to the extent that it has under IAS 17 and IFRIC 4. The details of
become probable that future taxable accounting policies under IAS 17 and
profits will be available against which they IFRIC 4 are disclosed separately.
can be used.
Accounting policy applicable from
Deferred tax is measured at the tax rates 1 January 2019
that are expected to be applied to At inception of a contract, the Group
temporary differences when they reverse, assesses whether a contract is, or
using tax rates enacted or substantively contains, a lease. A contract is, or
enacted at the reporting date, and reflects contains, a lease if the contract conveys
uncertainty related to income taxes, if any. the right to control the use of an identified
asset for a period of time in exchange for
The measurement of deferred tax reflects consideration. To assess whether a
the tax consequences that would follow contract conveys the right to control the
from the manner in which the Group use of an identified asset, the Group uses
expects, at the reporting date, to recover the definition of a lease in IFRS 16.
or settle the carrying amount of its assets
and liabilities. For this purpose, the This policy is applied to contracts
carrying amount of investment property entered into, on or after 1 January 2019.
measured at fair value is presumed to be
recovered through sale, and the Group has (i) The Group as a lease
not rebutted this presumption. The Group recognises a right-of-use
asset and a lease liability at the lease
Deferred tax assets and liabilities are commencement date. The right-of-use
offset only if certain criteria are met. asset is initially measured at cost, which
comprises the initial amount of the lease
5.15 Investment properties under liability adjusted for any lease payments
construction made at or before the commencement
Investment properties under construction date, plus any initial direct costs
for which the fair value cannot be incurred and an estimate of costs to
determined reliably, but for which the dismantle and remove the underlying
Group expects that the fair value of the asset or to restore the underlying asset
property will be reliably determinable or the site on which it is located, less any
when construction is completed, are lease incentives received.
measured at cost less impairment until
the fair value becomes reliably The right-of-use asset is subsequently
determinable or construction is depreciated using the straight-line
completed – whichever is earlier. Fair method from the commencement date
value is based on active market prices, to the end of the lease term, unless the
adjusted, if necessary, for any difference lease transfers ownership of the
in the nature, location or condition of the underlying asset to the Group by the end
specific asset. If this information is not of the lease term or the cost of the right-
available, the Group uses alternative of-use asset reflects that the Group
valuation methods, such as recent prices will exercise a purchase option. In that

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case the right-of-use asset will be When the lease liability is remeasured in
depreciated over the useful life of the this way, a corresponding adjustment is
underlying asset, which is determined on made to the carrying amount of the
the same basis as those of property and right-of-use asset, or is recorded in profit
equipment. In addition, the right-of-use or loss if the carrying amount of the
asset is periodically reduced by right-of-use asset has been reduced to
impairment losses, if any, and adjusted zero.
for certain remeasurements of the lease
liability. The Group presents right-of-use assets
that do not meet the definition of
The lease liability is initially measured at investment property in ‘property, plant
the present value of the lease payments and equipment’ and lease liabilities in the
that are not paid at the commencement statement of financial position.
date, discounted using the interest rate
implicit in the lease or, if that rate cannot Short-term leases and leases of low-
be readily determined, the Group’s value assets
incremental borrowing rate. Generally, the The Group has elected not to recognise
Group uses its incremental borrowing rate right-of-use assets and lease liabilities
as the discount rate. for leases of low-value assets and short-
term leases. The Group recognises the
Lease payments included in the lease payments associated with these
measurement of the lease liability are leases as an expense on a straight-line
made up of the following: basis over the lease term.
– fixed payments, including in
The Group as a lessor
substance fixed payments; At inception or on modification of a
– variable lease payments that depend contract that contains a lease
component, the Group allocates the
on an index or a rate, initially measured consideration in the contract to each
using the index or rate as at the lease component on the basis of their
commencement date; relative standalone prices. The Group
– amounts expected to be payable under also determines at lease inception
a residual value guarantee; and whether each lease is a finance lease or
– the exercise price under a purchase an operating lease.
option that the Group is reasonably
certain to exercise, lease payments in To classify each lease, the Group makes
an optional renewal period if the Group an overall assessment of whether the
is reasonably certain to exercise an lease transfers substantially all of the
extension option, and penalties for risks and rewards incidental to
early termination of a lease unless the ownership of the underlying asset. If this
Group is reasonably certain not to is the case, then the lease is a finance
terminate early. lease; if not, then it is an operating lease.
As part of this assessment, the Group
The lease liability is measured at considers certain indicators such as
amortised cost using the effective interest whether the lease is for the major part of
method. It is remeasured when there is a the economic life of the asset.
change in future lease payments arising
from a change in an index or rate, if there is When the Group is an intermediate
a change in the Group’s estimate of the lessor, it accounts for its interests in the
amount expected to be payable under a head lease and the sub-lease separately.
residual value guarantee, if the Group It assesses the lease classification of a
changes its assessment of whether it will sub-lease with reference to the right-of
exercise a purchase, extension or use asset arising from the head lease,
termination option or if there is a revised
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Page 122

not with reference to the underlying asset. Group classified leases that transferred
If a head lease is a short-term lease to substantially all of the risks and rewards
which the Group applies the exemption of ownership as finance leases. When
described above, then it classifies the this was the case, the leased assets were
sub-lease as an operating lease. measured initially at an amount equal to
the lower of their fair value and the
If an arrangement contains lease and present value of the minimum lease
non-lease components, then the Group payments. Minimum lease payments
applies IFRS 15 to allocate the were the payments over the lease term
consideration in the contract. The Group that the lessee was required to make,
recognises lease payments received excluding any contingent rent.
under operating leases as income on a Subsequent to initial recognition, the
straightline basis over the lease term as assets were accounted for in
part of 'revenue’. accordance with the accounting policy
applicable to that asset.
Generally, the Group’s accounting policy
under IFRS 16 has not changed from the Assets held under other leases were
comparative period. The Group earns classified as operating leases and were
rental income from operating leases of its not recognised in the Group’s statement
property (see Note 9).Rental income is of financial position. Payments made
recognised on a straight-line basis over under operating leases were recognised
the term of the lease. in profit or loss on a straight-line basis
over the term of the lease. Lease
Policy applicable before 1 January 2019 incentives received were recognised as
For contracts entered into before 1 an integral part of the total lease
January 2019, the Group determined expense, over the term of the lease.
whether the arrangement was or
contained a lease based on the ii. As a lessor
assessment of When the Group acted as a lessor, it
– fulfilment of the arrangement was determined at lease inception whether
each lease was a finance lease or an
dependent on the use of a specific operating lease.
asset or assets; and To classify each lease, the Group made
– the arrangement had conveyed a right an overall assessment of whether the
to use the asset. An arrangement lease transferred substantially all of the
conveyed the right to use the asset if risks and rewards incidental to
one of the following was met: ownership of the underlying asset. If this
- the purchaser had the ability or right to was the case, then the lease was a
operate the asset while obtaining or finance lease; if not, then it was an
controlling more than an insignificant operating lease. As part of this
amount of the output; assessment, the Group considered
- the purchaser had the ability or right to certain indicators such as whether the
control physical access to the asset lease was for the major part of the
while obtaining or controlling more economic life of the asset.
than an insignificant amount of the
- facts and circumstances indicated 5.17 Equity and reserves
that it was remote that other parties (i) Accumulated funds
would take more than an insignificant Accumulated funds are the carried
amount of the output, and the price per forward recognized income net of
unit was neither fixed per unit of output expenses plus current period surplus.
nor equal to the current market price
per unit of output. (ii) Other reserves
i. As a lesse Other reserves comprises of fair value
In the comparative period, as a lessee the
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gain or loss on investments carried at The Group's risk management policies
FVOCI and actuarial gains or loss on are established to identify and analyse
retirement benefit obligation. the risks faced by the Group, to set
appropriate limits and controls and to
5.18 New Standards, amendments and monitor risks and adherence to limits.
Interpretations to existing Standards Risk management policies and systems
that are not yet effective are reviewed regularly to reflect the
A number of new standards are effective changes in market conditions and the
for annual periods beginning after 1 Group's activities. The Group through its
January 2020 and early application is training and management standards
permitted; however, the Group has not and procedures, aims to develop a
early adopted the new or amended disciplined and risk informed
standards in preparing these environment in which all employees have
consolidated financial statements. The a good understanding of inherent risk
group do not expect to have any material specific to their department.
impact upon initial application. The
standards and amendments include: The Group's Audit and Risk Management
- IFRS 17 Insurance Contracts Committee oversees how management
- Definition of a Business (Amendments monitors compliance with the Group's
to IFRS 3) risk management policies and
- Definition of Material (Amendments to procedures and reviews the adequacy of
IAS 1 and IAS 8) the risk management framework in
- Amendments to References to relation to the risks faced by the Group.
Conceptual Framework in IFRS The Committee is assisted in its
Standards oversight role by the Internal Audit
Department, which undertakes both
6 Financial risk management regular and ad-hoc reviews of risk
The Group is exposed to the following management controls and procedures,
risks arising from financial instruments: the results of which are reported to the
• Credit risk - (see 6 (ii) below) Audit and Risk Management Committee.
• Liquidity risk - (see 6 (iii) below)
• Market risk - (see 6 (iv) below) (ii) Credit Risk
Credit risk is the risk of financial loss to
(i) Risk management framework the Group if a customer or counterparty
Fundamental to the business activities to a financial instrument fails to meet its
and growth of The Exchange is a strong contractual obligations, and arises
risk management practice which is at the principally from the Group’s receivables
core of achieving The Exchange's from customers and investments in debt
Strategic Objectives. The Council has securities.
overall responsibility for the
establishment and oversight of the The Group has exposure to credit risk as
Group's risk management framework. a result of receivables due mainly from
The Council has established the Audit market operators such as listed entities
and Risk Management Committee, and brokers. The carrying amounts of
which is responsible for developing and financial assets and contract assets
monitoring the Group's risk represent the maximum credit exposure.
management policies. The Committee
reports regularly to Council on its
activities.

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Impairment losses on financial assets and contract assets recognised in statement of profit or loss
were as follows.

Group Group Exchange Exchange
2019
In thousands of naira Notes 2018 2019 2018

Impairment loss on trade receivables 22 2,184,334 2,127,458 1,632,552 1,575,676
and other assets
21 346 51 346 51
Impairment loss on debt securities 17 -- 1,001,263 1,717,143
at amortised cost 2,634,160 3,292,870
2,184,680 2,127,509
Intercompany receivable

As at 31st December 2019, the exposure to credit risk for trade receivables by type of counterparty
was as follows:

In thousands of naira Notes Exchange Exchange
Listed Entities 22 2019 2018
Brokers 22
Others 22 627,046 535,044
125,219 101,062

5,492 33,002

757,757 669,107

Trade receivables and other assets The Group does not require collateral in
The Group’s exposure to credit risk is respect of trade and other receivables.
influenced mainly by the individual The group does not have trade receivable
characteristics of each customer. and contract assets for which no loss
However, management also considers allowance is recognised because of
the factors that may influence the credit collateral.
risk of its customer base, including the
default risk associated with the industry Expected credit loss assessment for
and country in which customers operate. customers as at 1 January and 31
December 2019
The risk management committee has The Group allocates each exposure to a
established a credit policy under which credit risk grade based on data that is
each new customer is analysed determined to be predictive of the risk of
individually for creditworthiness before loss (including but not limited to external
the Group’s standard payment and ratings, audited financial statements,
delivery terms and conditions are offered. management accounts and cash flow
The Group’s review includes external projections and available press
ratings, if they are available, financial information about customers) and
statements, credit agency information applying experienced credit judgement.
and industry information. Credit risk grades are defined using
qualitative and quantitative factors that
The Group limits its exposure to credit risk are indicative of the risk of default and
from trade receivables by establishing are aligned to external credit rating
immediate payment on all contracts with definitions from standard & Poor's and
customers. Global Credit Rating.

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The following table provides information about the Group and Exchange's exposu
from individual customers as at 31 December 2019.

G

31 December 2019 Weighted- c
In thousands of naira average loss rate a
7
Trade receivables 14.5% 1,6
Other receivables 14.5%
Intercompany receivables 2,4
-

Loss rates are based on actual credit loss experience over the past five
years. These rates are multiplied by scalar factors to reflect
differences between economic conditions during the period over
which the historical data has been collected, current conditions and
the Group’s view of economic conditions over the expected lives of the
receivables. Also, the Group uses forward looking information and
credit rating agencies.

Debt securities
The Group limits its exposure to credit risk by investing only in liquid
debt securities. The Group principally invest in bonds issued by the
Federal Government of Nigeria (FGN) treasury bills and fixed deposit
with banks.

The Group monitors changes in credit risk by tracking published
external credit ratings. To determine whether published ratings remain
up to date and to assess whether there has been a significant increase
in credit risk at the reporting date that has not been reflected in
published ratings, the Group supplements this by reviewing changes
in bond yields and, where available, together with available press and
regulatory information about issuers.

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ure to credit risk and ECLs for trade and other receivables and contract assets

Group Exchange

Gross ECL Weighted- Gross carrying ECL
carrying allowance average loss amount allowance
amount
641,431 rate 641,431
771,512 1,542,903 991,121
642,372 14.5% 757,757 1,001,263
- 14.5% 1,075,177
- 1,869,934 2,633,815
2,184,334 28%
413,884 3,702,868

FGN Bonds are fully backed by the full faith and credit of the Federal
Government of Nigeria. No historical data shows any past default of
government instrument dominated in local currency and our
prognosis does not show any possibility of default in the next twelve
months as the economy is on the path of recovery. The expected
default rate is very negligible.The 12 months probabilities of default
are based on historical data supplied by standard &
poor's.

Cash and cash equivalents
The Group held cash and cash equivalents of N4,416,039,983 at 31
December 2019 (2018: N2,810,873,000). The cash and cash
equivalents are held with local banks which are rated between AAA
and BBB per Fitch, Standard & Poor's, and Global Credit Rating.
Impairment on cash and cash equivalents has been measured on a
12-month expected loss basis and reflects the short maturities of the
exposures. The Group considers that its cash and cash equivalents
have low credit risk based on the external credit ratings of the
counterparties.

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The following table provides information about the Group and Exchange's exposu
from individual customers as at 31 December 2019.
The Group uses a similar approach for assessment of ECLs for cash and cash eq
The amount of impairment allowance at 31 December 2019 is N2,121,434 (2018
The following table shows the total exposure to credit risk as at year end.

In thousands of naira Notes
Investment in debt securities 21
Trade and other receivables 22
Intercompany receivables 17
Cash and cash equivalents 24

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

The Group uses activity-based costing to cost its products and
services, which assists it in monitoring cash flow requirements
and optimising its cash return on investments

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ure to credit risk and ECLs for trade and other receivables and contract assets

quivalents to those used for debt securities.
8: N1,640,689).

Group Group Exchange Exchange
2019 2018 2019 2018
11,438,974 10,029,366
229,550 1,282,058 11,249,304 10,029,366
200,383 1,172,910
- - 868,671 2,052,107
4,416,040 2,810,873 2,606,461
16,084,564 14,122,297 4,307,178
16,625,536 15,860,844

The Group aims to maintain the level of its cash and cash
equivalents and other highly marketable debt investments at an
amount in excess of expected cash outflows on financial
liabilities (other than trade payables) over the next 60 days. The
ratio of investments to outflows was 5.9 at 31 December 2019
(2018: 6.0).

The Group also monitors the level of expected cash inflows on
trade and other receivables together with expected cash
outflows on trade and other payables.

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Maturity Analysis-Group 30 days or Less 31 - 60
In thousands of Naira
- 99
Financial assets - 99
Trade and other receivables 3,369,558
Investment securities 3,369,558
Cash and cash equivalents
Total -
Financial liabilities -
Other liabilities
Total

Maturity Analysis-The Exchange 30 days or Less 31 - 6
In thousands of Naira

Financial assets - 99
Intercompany receivable - 99
Trade and other receivables -
Investment securities 3,314,106
Cash and cash equivalents 3,314,106
Total
-
Financial liabilities -
Other liabilities*

Total

* Excluded from other liabilities are deferred income and statutory deduction suc

Page 128

Contractual Cash Flows

0 days 61-90 days 91 days or 2019 Total Carrying
more amount
-
- - 2,413,884 2,413,884 229,550
90,254 - 11,895,714 11,895,714 11,895,368
90,254 58,349
58,349 - 4,418,161 4,416,040
- 14,309,599 18,727,760 16,540,958
-
- 2,284,336 2,284,336 2,284,336
- 2,284,336 2,284,336 2,284,336

Contractual Cash Flows

60 days 61-90 days 91 days or 2019 Total Carrying
more amount
- 1,869,934
- - 1,869,934 2,413,884 868,671
- - 2,413,884 11,249,650 229,550
90,254 - 11,249,650 4,309,300 11,249,304
90,254 4,940 19,842,769 4,307,178
- 16,654,703
4,940
15,533,469

-- 2,278,573 2,278,573 2,278,573
-- 2,278,573 2,278,573 2,278,573

ch as VAT and WHT payable.

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Maturity Analysis-Group 30 days or Less 31 - 60

In thousands of Naira - 1,866
1,866
Financial assets 945,861
Trade and other 945,861
receivables
Other investments -
Cash and cash equivalents -
Total -
Financial liabilities
Retirement benefit obligations 30 days or Less 31 - 60
Other liabilities
Total - 1,672
- 1,672
Maturity Analysis-The Exchange -
In thousands of Naira 935,551

Financial assets 935,551
Intercompany receivable
Trade and other receivables
Other investments
Cash and cash equivalents
Total

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