presco 2019 report send

PRESCO PLC
RC 174370

Fresh Palm Fruit Crude Palm Oil PFAD

RBDPO Palm Olein Palm Stearin Palm Kernel Oil

ANNUAL REPORT & ACCOUNTS 2019

PRESCO PLC

Producer of Specialty Fats and Oils

A fully integrated agro industrial establishment with oil palm
plantations, palm oil mill, palm kernel crushing plant and vegetable oil
refining plant. Presco Plc produces specialty oils and fats of
outstanding quality to customers’ specification and assures reliability of
supply of its products all year round.

Presco Plc
Obaretin Estate, Km 22, Benin/Sapele Road,
P.O. Box 7061, Benin City, Edo State, Nigeria.

: +234 803 413 4444
: [email protected]

www.presco-plc.com



Contents

Company Profile 4-5

Notice of Annual General Meeting 6-8

Financial Highlights 9

Directors and Professional Advisers 10-11

Chairman's Statement 12-14

Board of Directors 15-20

Report of the Directors 21

Report on Board of Directors' Appraisal Report 22-27

Corporate Governance Report 28-30

Committees 31-37

Report of the Audit Committee 38

Certification Pursuant to Section 60 (2) of Investment and Securities Act No. 29 of 2011 39

Statement of directors' responsibilities 40-41

Independent Auditor's Report 42-46

Statement of profit or loss and other comprehensive income 47

Statement of financial position 48-49

Statement of changes in equity 50

Statement of cash flows 51-52

Notes to the financial statements 53-160

Statement of value added 161-162

Five-year financial summary 163-164

Share Capital History 165

Proxy Form 167

Shareholders Data Form 169

E-Dividend Activation Form 171

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COMPANY PROFILE

Presco Plc (Presco) is a public limited company incorporated as a private limited liability
company on September 24, 1991 and listed on the Nigerian Stock Exchange in 2002.
Presco is a fully integrated agro-industrial establishment with oil palm plantations in Edo
and Delta States of Nigeria, palm oil mill, palm kernel crushing plant and vegetable oil
refining plant and operates as a major producer of specialty oils and fats in the Nigeria oil
palm and vegetable oil industry for industrial use and domestic consumption. Presco is a
subsidiary of Societe d’Investissement pour I’Agriculture Tropicale (SIAT SA), a Belgian
agro-industrial Group specialized in the establishment and management of industrial as
well as smallholders’ plantations and whose core businesses are oil palm and natural
rubber, while cattle ranching and horticulture are also part of their activities.

Products:
The company range of products include Special Palm Oil, Palm Kernel Oil, Refined
Bleached and Deodorized Palm Oil, Olein, Stearin, Palm Fatty Acid Distillate, Palm Kernel
Cake.

Employment: Presco is one of the largest employers of labour in Edo and Delta states, with
a total of about 8,000 employees. Indirectly, Presco's operations positively impact on the
livelihoods of many more people through transport and/or construction contracts, and
Kernel purchase from out grower farmers, as well as by the company being a large
consumer of goods and services.

Community Relations: In order to sustain a friendly operating environment, and in an
effort to ensure that its presence impacts positively on the lives and social well-being of its
host communities, Presco's Corporate Social Responsibility Policy focuses on the provision
of educational infrastructure and scholarships, road maintenance, electricity, potable
water supply and other essential basic services for its host communities.

Environment: Presco firmly believes in environmentally friendly and sustainable
operation. All factory wastes from the oil mill are recycled into the plantation or used as
fuel to generate green process steam and electricity. The company now rely majorly on
green energy for its operation at Obaretin Estate by harnessing methane gas produced by
decomposition of its palm oil mill effluent through its bio-methanisation plant
commissioned in 2014.
Presco played a leading role in the development of the national interpretation for Round
Table on Sustainable Palm Oil (RSPO) in Nigeria, launched in 2018, and is currently working
towards RSPO certification.

Awards and Recognition: Presco has over the years won many awards including the
Nigerian Stock Exchange Annual President's Merit Award; Manufacturers Association of
Nigeria Chairman's Award for Community Development Excellence among companies in

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Edo and Delta States of Nigeria. Recent awards in the last five years include but are not
limited to The Achievers in Agriculture Award, Pearl Awards for Sectorial Leadership in
Agriculture, Award for Highest Dividend Growth, (Nigeria Agric Awards), Winner of
Corporate Social Responsibility Award, Nigeria Agric Awards, Achiever in Agriculture
Awards, Pearl Most Outstanding CEO of the Year Award, Pearl Award of Sectorial
Leadership in Agriculture.

For more information on Presco Plc, please visit www.presco-plc.com
Tel:08034134444; 07035622750; 07034141113

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PRESCO PLC
RC 174370

NOTICE OF THE 27TH ANNUAL GENERAL MEETING OF PRESCO PLC

NOTICE IS HEREBY GIVEN that the 27th Annual General Meeting of Presco Plc will be
held at The Dura Club, Obaretin Estate, Km. 22, Benin/Sapele Road, Ikpoba-Okha
LGA, Edo State, Nigeria on Wednesday, September 2, 2020 at 12:00 noon to transact
the following business:
(ATTENDANCE IS BY PROXY)

ORDINARY BUSINESS

1. To lay before the meeting the audited accounts of the Company for the year
ended December 31, 2019 together with the reports of the Directors, Auditors
and Statutory Audit Committee thereon.

2. To declare a dividend.
3. To re-elect the following Directors whose profile and CV can be found in the

company’s website who retired by rotation and being eligible offered themselves
for re- election: ( i ) Mr. Osa Osunde, ( ii ) HRH Prince Aiguobasinmwin Ogie
Akenzua, (iii) Mr. William Kenneth Crockett
4. To elect Mr. Gerald Royle Ray, Mr. Paul Cardoen and Mrs. Ingrid Vandewiele who
were appointed since the last Annual General Meeting to fill casual vacancies on
the Board in accordance with the provisions of CAMA 2004 whose profile and CV
appear in the company’s website and being eligible offered themselves for
election.
5. To authorize the Directors to fix the remuneration of Independent Auditors.
6. To elect members of Statutory Audit Committee.
7. To re-appoint Deloitte & Touche as Independent Auditors of Presco Plc.

NOTES

COVID-19 Overall Risk to Stakeholders
The novel COVID-19 virus pandemic has had significant impact on global
economies around the world, and it is having accounting implications for many
entities. Our company is no different, which is why we have put in place
protective measures in keeping with World Health Organization, NCDC, Edo State
Government and Corporate Affairs Commission guidelines (safety protocols) to

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mitigate the spread. To ensure the safe conduct of the 27th Annual General
Meeting of Presco Plc, Notice is Hereby Given to Shareholders That Attendance
Shall Only Be By PROXY and Shall Be Limited to Only Twenty (20) Persons.

1. Proxy
A member of the Company entitled to attend and vote at the Annual General
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 proxy form is enclosed. Executed proxy
forms should be deposited at the office of the Company’s Registrars, First Registrars
& Investor Services Limited, Plot 2, Abebe Village Road, Iganmu, Lagos, not less
than 48 hours before the time of the meeting.
E-mail: [email protected]

Pursuant to the above stated. Shareholders are encouraged to appoint any one of

the under listed proposed proxies to attend and vote in their stead at the meeting.

1. Mr. Felix Nwabuko 2. Mr. Gerald Royle Ray

3. Mr William Kenneth Crockett 4. Mr. Osa Osunde

5. HRH Prince A. O. Akenzua 6. Chief (Dr.) Bassey E. O. Edem

7. Mr. Patrick Uwadia 8. Mr. Famous Igbinevbo

9. Mr. Kingsley Iyekekpolor 10. Engr. MOT Olayiwola Tobun

11. Bishop Goodluck Akpore

Instruments of PROXY shall be at the company’s expense.

2. Closure of Register and Transfer Books
The Register of Members and Transfer Books will be closed from Monday July 20th,
2020, to Wednesday July 22nd, 2020 (both days inclusive) to enhance preparation
for the payment of dividend.

3. Dividend
If the dividend recommended by the Directors is approved, dividend will be paid
electronically on Friday September 4, 2020 to shareholders whose names appear
on the Register of Members as at the close of business on Friday July 17th, 2020 and
who have completed the e-dividend registration and mandated the Registrar to
pay their dividend directly into their Bank accounts.

4. E-Dividend
Pursuant to the directive of the Securities and Exchange Commission, notice is
hereby given to shareholders to provide account for the purpose of e-
dividend/bonus. A form is inserted into this Annual Report and Accounts 2019 for
completion by all shareholders to furnish the particulars of their accounts to the
Registrar (First Registrars & Investor Services Limited, Plot 2, Abebe Village Road,
Iganmu).

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5. The Qualification Date
The qualification date for payment of dividend is Friday July 17th, 2020.

6. Registered Office
Obaretin Estate, Km 22, Benin/Sapele Road, Ikpoba-Okha LGA, Edo State,
Nigeria.

7. Shareholders Right to Ask Questions
Shareholders reserve the right to ask questions at the Annual General
Meeting. Shareholders may also submit their questions prior to the meeting
in writing to the company, in line with Rule 19.12 (c) of the listing rules of The
Nigerian Stock Exchange. Such questions should be addressed to the
Company Secretary and reach the Company at its Registered Office or by
electronic mail at [email protected] not later than 7 days prior to
the date of the meeting.

8. Statutory Audit Committee
In accordance with Section 359(5) of the Companies and Allied Matters Act
2004 any member may nominate a qualified shareholder as a member of
Statutory Audit Committee by giving notice in writing of such nomination to
the Company Secretary at least 21 days before the meeting.

BY ORDER OF THE BOARD

Patrick Uwadia, Esq. Registered Office
Company Secretary Obaretin Estate, Km 22 Benin/Sapele
Dated this 22nd day of May, 2020 Road, Ikpoba/Okha L.G.A.
FRC/2013/ICSAN/00000004864 Edo State, Nigeria.

NOTE: The Notice of the 27th Annual General Meeting of the Company together with the
Annual Report and Accounts, 2019 have been published in the company's website:
www.presco-plc.com

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Financial Highlights

FOR THE YEAR ENDED 31 DECEMBER, 2019

Statement of Comprehensive Income

Revenue 2019 2018
Gross profit N’000 N’000
Operating profit (Restated)*
Interest expenses 19,723,641
Profit before taxation 12,721,831 21,344,730
Profit after taxation 15,892,114
8,126,477
Statement of Financial Position 2,133,709 7,591,550
6,059,683 1,339,324
Total Assets 3,838,746 6,321,010
Total Liabilities 4,284,188
Equity 71,009,830
Current Assets 43,121,954 58,678,749
Current Liabilities 27,887,876 34,504,407
Retained Earnings 21,150,004 24,174,342
26,286,284 15,506,385
Gross margin % 26,256,085 21,208,741
Operating profit % 22,440,193
Profit before tax % 65%
41% 74%
EBITDA 31% 36%
Return On Equity 30%
Earnings Per Share 9,581,189
14% 8,874,820
374 18%
430

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BOARD OF DIRECTORS

Mr. Pierre Vandebeeck (Belgian) Chairman
Managing Director/CEO
Mr. Felix O. Nwabuko FCA (Nigerian) Independent Non-Executive Director
Independent Non-Executive Director
Mr. Osa Osunde FCS, FCTI, F.loD (Nigerian) Independent Non-Executive Director,
resigned w.e.f. July 24, 2019
Chief (Engr.) James B. Erhuero, JP, mni, OON (Nigerian) Non-Executive Director, Resigned
w.e.f February 14, 2020
Dr. Shettima Mustafa, CON (Nigerian) Independent Non-Executive Director
Independent Non-Executive Director
Mrs. Marie Vandebeeck (Belgian) Executive Director (CFO)
Executive Director, resigned w.e.f. July 24, 2019
Chief Dr. Bassey E.O. Edem, FCA, MFR (Nigerian) Executive Director (COO), appointed
HRH Prince Aiguobasinmwin, Akenzua (Nigerian) w.e.f. July 24, 2019
Mr. William Kenneth Crockett (Irish) Independent Non-Executive Director, appointed
Mr. Thor Eivind Bakken (Norwegian) w.e.f. July 24, 2019
Mr. Gerald Ray (South African)

Amb. Nonye Udo (Nigerian)

COMPANY SECRETARY: Patrick Uwadia, Esq.

REGISTERED OFFICE: Obaretin Estate,
Km. 22, Benin/Sapele Road,
Ikpoba-Okha Local Government Area,
Edo State

REGISTRARS & TRANSFER OFFICE: First Registrars & Investor Services, Limited
TECHNICAL PARTNER/MANAGING AGENT: Plot 2, Abebe Village Road, Iganmu,
P.M.B. 12692, Marina,
Lagos, Nigeria

NV Siat S.A.
Brussels, Belgium

SOLICITORS: Abdulai, Taiwo & Co. Solicitors
Goodwill House,
278, Ikorodu Road,
Lagos, Nigeria.

AUDITORS: Deloitte & Touche
(Chartered Accountants)
Civic Towers, Plot GA1, Ozumba
Mbadiwe Avenue, Victoria Island,
P.O. Box 965, Marina,
Lagos, Nigeria

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BANKERS: Access Bank Plc
Ecobank Limited
Fidelity Bank Plc
First Bank of Nigeria Limited
Guaranty Trust Bank Plc
Stanbic IBTC Bank Plc
United Bank for Africa Plc
Union Bank Plc
Zenith Bank Plc

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Chairman’s Statement

Distinguished Shareholders, Fellow Directors, Ladies and
Gentlemen,
I am delighted to welcome you to the 27th Annual General
Meeting of our Company, Presco Plc, and to present our Annual
Report and Accounts for the year ended 31 December 2019. I
trust by now you would have reviewed the Annual Report for the
year ended December 31, 2019.

The Business Environment
The Nigeria economy continued its gradual recovery from the
recession recorded in 2018; achieving an annual growth rate of 2.27% for 2019 compared to
1.93% recorded in 2018 on a year on year basis. Inflation increased to 11.98% at the close of 2019
from 11.44% of end of 2018. The business environment was also impacted by other significant
economic issues. It was a general election year. The Central Bank of Nigeria played a larger role in
direct lending and trade policy, encouraging banks to lend to the real sector of the economy.
Nigeria closed her land borders in response to the rise in illegal importations and abuses in the
ECOWAS Trade Liberalization Scheme (ETLS) and also went on to sign the African Continental Free
Trade Agreement (AFCTA). The new Nigeria Finance Bill 2019 was passed and a 50% increase
introduced on Value Added Tax (VAT) rate from 5% to 7.5%. It was another year of grappling with
the challenges of slow growth, increasing unemployment rate, infrastructural deficit and
insecurity.

For our industry, following the moves initiated by the Federal Government to check and fight the
illegal importation and malpractices, 4th quarter 2019 witnessed a gradual recovery of average
unit selling prices of crude and refined products from the hitherto downward pressure.

As the year drew to a close, there was the emergence of the twin shocks of COVID-19 pandemic
and global oil price crash that are of significant far reaching consequences for the national
economy and businesses. COVID-19 in particular brought with it challenges to our lifestyle,
culture, social interactions, etc. Without a doubt, the global, national and local business
environment will likely become even more unpredictable in the next months.

Operating Results
Revenue for the year was N19.72 Billion, representing a 7.6% reduction on N21.34 Billion of 2018.
We realized a gross profit of N12.72 Billion (2018: N15.89 Billion) and a profit after tax (after
accounting for changes in fair value of biological assets) of N3.8 Billion (2018: N4.3 Billion).
Volume wise, 47,253 tons of crude and refined products were sold (2018: 48,240 tons). In the
year under review we achieved a milestone of crossing the 200,000 tons mark for fresh fruit
bunches harvested with a harvest of 200,097 tons (2018: 191,672 tons); Crude Palm Oil (CPO)
produced was 43,757 tons (2018: 42,895 tons), Refined, Bleached and Deodorized Oil (RBDO)

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produced was 20,594 tons (2018: 21,726 tons) and Olein and Stearin produced was 7,967 tons
(2018: 9,001 tons).

Average unit selling prices of crude palm oil declined by 14.15% year on year from N408,632 per
tonne for 2018 to N349,968 for 2019. The abuse of the ECOWAS Trade Liberalization Scheme for
imports into Nigeria was a major cause of the slump in crude palm oil prices in 2019. Average
unit selling prices of refined products and crude palm kernel oil declined marginally by between
1% and 3%.

Management Focus
We are proud of continuing to successfully grow our business and of the important
contributions we make to Nigeria's agriculture and agribusiness as well as the wider society. We
continue to establish a leading position in our industry.

The expansions of installed capacities of processing facilities progressed satisfactorily. During
the year under review, the construction of a new 350 tons per day palm kernel crushing plant
was completed and so also was the construction of a new 30 tons palm kernel shell boiler.
Construction work on the extension of the palm oil mill from 60 tons Fresh Fruit Bunches (FFB)
per hour to 90 tons FFB per hour was commenced and completed in January 2020. Work on the
new 500 tons per day vegetable oil refinery has progressed satisfactorily with its commissioning
targeted for the end of the third quarter of 2020.

In 2020 we will resume our oil palm plantation hectarage expansion.

We continued to deepen our investment in community relations through our host communities'
development programme that focuses on education, roads, water and electricity. We also
sustained the intensity in research and development, encouraged by the remarkable success in
increasing the quality and quantity of our fresh fruit bunches and oil production per hectare.

I am confident that Presco Plc is well positioned to generate sustainable long-term growth
which should in turn drive shareholders returns.

Dividend
Your Board of Directors has proposed a dividend of 200 kobo per share, which amounts to
N2,000,000,000 (Two Billion Naira only) for shareholders' approval subject to withholding tax at
the appropriate rate.

Corporate Governance
Grant Thornton Consultants, an international corporate consultant, carried out the annual
Board Assessment. Their report forms part of the annual report and accounts as required by the
SEC Code and the 2018 National Code of Corporate Governance Practice. Also, the company's

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technical partners Siat SA, published a comprehensive Sustainability Report on Presco Plc which
can be found on the company's web site.

In line with national and international requirements for greater disclosure and transparency of
corporate governance, this year's Annual Report as in the past retains in additional section, the
Corporate Governance Report. It is expected that this will give greater confidence to our
shareholders as well as other stakeholders.

COVID-19 Overall Risk to Operations
The novel COVID-19 virus has had significant impact on global economies around the world, and
it is having accounting implications for many entities. Our company is no different, which is why
we have put in place protective measures in keeping with World Health Organization guidelines
to minimize the risk to our workforce and ensure minimum disruption to operations.

As a result of our prompt and decisive actions, we have not had the unpleasant situation of being
forced to consider workforce reductions resulting from illnesses and quarantines. Also, there
has not been any material impact affecting the supply and demand for the company's primary
products and therefore, the company's ability to continue as a going concern is not in doubt.

It is however, not possible at this time to reliably estimate the duration and severity of these
consequences, as well as their impact on the Company for future periods. The company would
continue to assess the impact of COVID-19 on its operations, but however, do not anticipate the
COVID-19 to have a significant impact on its operations.

Appreciation
Many thanks to my Board colleagues for their considerable contribution. We all appreciate the
dedication, skills and professionalism of our employees. Above all, I would like to thank our loyal
shareholders for their continued support.

My profound gratitude to His Royal Majesty, the Oba of Benin and to the Governments of Edo and
Delta States for continuing to support our business through providing the enabling and
conducive environment for business.

I wish you a very happy Annual General Meeting.

Pierre Vandebeeck
Chairman

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BOARD OF DIRECTORS

Mr. Pierre Vandebeeck (Belgian) Chairman, (NED)
Mr. Felix Onwuchekwa Nwabuko FCA Managing/CEO
Mr. Osa Osunde FCS, FCTI, F. loD Ind. Non-Executive Director (INED)
Chief (Engr.) James B. Erhuero, JP, mni, OON Ind. Non-Executive Director (INED)
Mrs. Marie William Vandebeeck (Belgian) Non-Executive Director (NED),
Resigned w.e.f February 14, 2020
Dr. Shettima Mustafa, CON Ind. Non-Executive Director (INED)
Resigned w.e.f July 24, 2019
Chief Dr. Bassey E.O. Edem, FCA, MFR Ind. Non-Executive Director (INED)
HRH Prince Aiguobasinmwin O. Akenzua Ind. Non-Executive Director (INED)
Mr. William Kenneth Crockett (Irish) Executive Director (ED)
Mr. Thor Eivind Bakken (Norwegian) Executive Director (ED) (Resigned
w.e.f July 24, 2019)
Amb Nonye Udo Ind. Non-Executive Director (INED)
Elected w.e.f July 24, 2019
Mr. Gerald Royle Ray (South African) Executive Director (ED) (Appointed
w.e.f July 24, 2019)

DIRECTORS’ BRIEF

Mr. Pierre Vandebeeck
Mr. Pierre Vandebeeck, a Belgian, is the Chairman Board of Directors of Presco Plc. He holds
degrees in Chemistry from the Higher Institution for Chemistry, Sint Truiden, Belgium and
Tropical Agriculture Engineering from Agricultural College, Vilvoorde, Belgium. He started
his career in 1969 with Afrifina s.a. and was seconded to the Democratic Republic of Congo
where he worked in several capacities in coffee, cocoa, rubber and palm plantations.
Responsible for establishing several oil palm estates in Nigeria, Mr. Vandebeeck joined
Socfinco s.a. in 1974 to start Socfinco' Nigeria operations. He worked as Plantation Manager
for Adapalm from 1974 to 1978, then at the 10,000 hectare Risonpalm oil palm project from
1978 to 1983. In 1983 he became the Director of Operations for Socfinco in Nigeria,
responsible for the conception, preparation and implementation of major tree crop
programs for several state governments and private sector organization. Prior to joining
Presco in 1991 as Managing Director, he was Managing Director of Indufina s.a.,
Luxembourg from 1990 to 1991. He has been Chairman and Managing Director of Siat sa
since 1991 and is a director of several other companies. Mr. Vandebeeck became the
Chairman of Presco Plc on 1st January, 2010.

Mr. Felix Onwuchekwa Nwabuko
Chartered Accountant and a Consultant with extensive multi industry, international, and
business management experience within big four audit firm, international industrial group
including twenty three years in expert management of leading large scale industrial oil
palm plantation and processing enterprises in the Nigerian and Ghanaian oil palm and

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vegetable oil industry and world class university environments, Fellow of Institute of
Chartered Accountants of Nigeria, Associate of Chartered Institute of Taxation Nigeria,
Alumni of Manchester Business School, United Kingdom and University of Benin, Nigeria.
Group Country Managing Director with effect 1st February 2015.

Osa Osunde, FCS, FCTI, F.IoD
Osa Osunde, FCS, FCTI, F.IoD is an alumnus of Auchi Polytechnic with a qualification in
Accounting. With vast experience in Capital Market Operations, Banking and Financial
Services. Mr. Osunde belong to several professional bodies amongst which are: Fellow,
Chartered Institute of Stockbrokers, Fellow, Institute of Administrative Management of
Nigeria, Fellow, Chartered Institute of Taxation of Nigeria and Member, Nigeria Institute of
Management. As part of his early working experiences, he was Head of Stockbroking with
Wintrut Limited, one of the early stockbroking firms in Nigeria based in Lagos at the time
before moving to Fidelity Finance Company Limited as the company’s pioneer Managing
Director/Chief Executive Officer soon after incorporation. He is a graduate of the
prestigious New York Institute of Finance, New York, USA in 1992 and has attended several
local and international multi-disciplinary courses. A member of New York Stock Exchange,
he is also an Authorized Dealer/Clerk of the Nigerian Stock Exchange (NSE) and he was one
time a member of Council of The Exchange. He sits on the boards of many quoted and
private limited liability companies. Mr. Osunde is currently the Executive Chairman of
Fidelity Finance Company Limited. He was appointed as a director of Presco Plc on May 7,
2003. He is widely traveled and happily married.

Chief (Engr.) James B. Erhuero, MBA, FNIM, JP, mni, OON
(Engr.) J.B. Erhuero joined the Board of Presco Plc on 15th July, 2004. He was one time
Secretary to the Delta State Government where he previously served as Head of Service.
Before he became the Head of Service to the Delta State Government, he was a Permanent
Secretary in the defunct Bendel State and Delta State Civil Service in the Ministries of Com &
Industry, Finance & Economic Planning & Works & Transport. Engr. Erhuero holds a B.Sc.
honours degree in Mechanical Engineering and an MBA from University of Benin.
Certificate in Industrial Projects’ Appraisal from the University of Bradford, UK, Member of
the Nigeria Institute of Policy Strategic Studies, Kuru, Jos, Fellow of the Nigerian Institute of
Management, and once a member of the Governing Council of the Institute 2009 to 2013.
He is a Knight of St. Mulumba (KSM).

Mrs. Marie William Vandebeeck
Mrs. Marie Vandebeeck was reappointed to the board of Presco Plc, in December 2012.
She is a Belgian and the Deputy Managing Director in charge of Corporate Affairs at nv Siat
sa, Brussels, Belgium. Previous positions held include, Assistant to the Chief Operating
Officer for the African Region at Heidelberg Cement in Brussels; Deputy Managing Director
in charge of Finance and Logistics at nv Siat sa, Brussels. She previously served at Siat Gabon
where she held the position of Deputy Managing Director. She started her career at nv Siat
sa, Brussels as a Business Development Manager. Mrs. Marie Vandebeeck holds a Master in
Business Engineering from the Catholic University, Leuven and studied at College of

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Management, ESC Lyon and completed a general management program at the Vlerick
Leuven-Ghent Management School. She is on the Board of Siat sa, Brussels and other
Companies within the Siat Group.

Dr. Shettima Mustafa, OFR, CON
Dr. Mustafa is a renowned Agriculturist specialized in Plant Breeding and Agronomy. He
served the Federal Republic of Nigeria in various capacities including Honourable Minister
of Agriculture and Natural Resources between 1990 and 1992, Honourable Minister of
Defence between 2008 and 2009 and Minister of Interior between 2009 and 2010. He
previously held the position of Head, Agricultural Projects Monitoring and Evaluation Unit,
where he was the Overseer of the ADPs nationwide. He holds a B.Sc honours and PhD from
the Ahmadu Bello University, Zaria.

Chief (Dr.) Bassey Edem Orok Edem, FCA, MFR
Chief Bassey Edem Orok Edem is an administrator, Chartered Accountant and an Agri-
Business Magnate. He holds a Diploma in Accountancy from Yaba College of Technology, a
Bachelor of Science (B.Sc.) in Accounting from University of Lagos, a Master of Business
Administration (MBA) from University of Calabar and a Doctor of Business Administration
(DBA) from the London Graduate School of Commonwealth University. He worked with the
United Africa Company of Nigerian (UACN) Plc. In November 1979, he was transferred to
Pamol (Nigeria) Limited where he was Promoted Managing Director/Chief Executive
Officer 1982 and appointed Vice Chairman, MD/CEO. He voluntarily retired in 2006. He was
also an Executive Director of Dunlop Nigeria Plc (the parent company of Pamol Nigeria
Limited). Chief Edem won the Unilever international Managing Director of the year Award
in 1988. He is a fellow of Chartered Association of Certified Accountants UK; Fellow of the
Institute of Chartered Secretaries and Administrators UK, Fellow of the Institute of
Chartered Accountants of Nigeria and Alumnus of The Lagos Business School (CEP. 1994)
and the past President of NACCIMA. He was appointed as a director of Presco Plc on
December 6, 2013.

HRH (Prince) Aiguobasinmwin Ogie Akenzua
HRH (Prince) Aiguobasinmwin Ogie Akenzua was appointed a Director of Presco Plc on April
16, 2015. He holds a B.Sc. in Computer Science and Information Technology, Igbinedion
University, Okada and MPA, University of Benin, Benin City. He is Enogie of Siluko. He is also
Special Adviser to the Governor of Edo State on Special Duties. He was the Special Adviser
to the Executive Governor of Edo State on Youth and Special interests from 2008 to 2012
and the Special Adviser to the Executive Chairman of Ovia South West Local Government
Area from 2007 to 2008.

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Mr. William Kenneth Crockett, DBS, BBS, FCMA, CGMA (Appointed CFO wef 1st May, 2017)
Mr. William, Kenneth Crockett is a Global Chartered Management Accountant and Fellow of
the Chartered Institute of Management Accountants. He is a former Council Member of the
Institute in the Republic of Ireland and former President of the institute's Cork and Kerry
region and also a Business graduate from the National University of Ireland, University
College, Cork. Prior to joining Presco Plc as Chief Financial Officer he was Financial Director
of PW Nigeria Ltd , an Irish Civil Engineering, Construction and Mining company based in
Nigeria. Prior to that he was Financial Director of Minteq Europe Limited,( a subsidiary of
Minerals Technologies Inc.), Manufacturers and Distributors of Refractory Products for
the steel industry. His area of responsibility covered Europe, Middle East, Russia, Turkey
and South Africa. Before joining Minteq Europe Limited he was Financial Manager of PW
Ghana Limited an Irish Mining Civil Engineering and Construction company.
Previous positions includeFinancial Controller & Company Secretary of Peter France and
Manford Clothing Ireland, Group Internal Auditor for O.K.R. Group (Burgerking ),
Restaurants in Ireland ,Finance and Administration Manager at F.H. Thompson & Sons
Limited, Bakers, Ireland and Branch Accountant and Credit Controller at Chadwicks
Limited, Builders Merchants, ( Grafton Group Plc) ,Ireland.

Thor Eivind Bakken (Appointed COO w.e.f 28th April 2018)
Mr. Thor Eivind Bakken has a broad and diverse business background and graduated from
The Norwegian School of Marketing and Business Studies (NMH) in 1986. He has completed
several acknowledged in-house management training programs in Orkla School for
Business Relations and Orkla Brand School. His work experience covers ten years Sales and
Marketing experience from several positions in FMCG and B2B, both domestic and
international, ten years of Operational Industrial Management, also domestic and
international and ten years as Senior Management Consultant focusing on Change
Management, Strategic Planning, Lean and Continuous Improvement with a broad specter
of industrial clients. 2001 - 2005 he was director and general manager of Norpalm Ghana
Ltd, an oil palm company in Takoradi Ghana. 2005-2006 he had assignment as Deputy
Country Director for Norwegian Refugee Council in Gulu Uganda. In 2006 – 2007 he was
Managing Director for Tree Farms/Sao Hill Pole Company in Mafinga Tanzania.

Nonye Udo (Ambassador)
Ambassador Nonye Udo is an accomplished career diplomat who represented Nigeria
admirably both at home and abroad. Her distinguished service to Nigeria in the Ministry of
Foreign Affairs earned her the 2017 Presidential Civil Service Merit Award. At the United
Nations Headquarters she was a well-respected expert member of the United Nations
revered Advisory Committee on Administrative and Budgetary Questions, the ACABQ.
As a female officer in a mostly male dominated field of diplomacy, Ambassador Udo was
very sensitive to women empowerment, gender mainstreaming and mentoring of the
underprivileged. This was a continuation of her work on Sustainable Development Goals
(SDGs) at the United Nations as well as Nigeria’s expert to the Committee on Responsibility
to Protect (R2P). As a further recognition of her expertise and dedication to service both to
humanity in general and Nigeria in particular, she was nominated and served as the first

18

Nigeria female Ambassador to the Kingdom of Belgium, Luxembourg and to the European
Union headquarters.
Mr. Gerald Royle Ray
Mr. Gerald Royle Ray joined Presco PLC with effect from 24 July 2019 as Chief Operating
Officer (COO) from Siat Nigeria Limited (SNL) where he worked from January 2016 – July
2019 as Chief Operating Officer. Gerald has broad and diverse operational and agriculture
background that spans 37 years in South, East and West Africa. His previous roles include
General Manager Land Preparation (Golden Veroleum Liberia), General Manager (New
Forests Company Rwanda) , Director of Operations (Buchanan Renewables Liberia)
Harvesting and Transport Manager(Shiselweni Forestry Company Swaziland) Gerald
worked for Mondi Ltd over a period of 26 years in which he had various positions. He has
completed several acknowledged in-house management and training courses; he has also
attended external courses at Stellenbosch University , Saasveld Forestry Collage, Pretoria
Technicon and ICFR.
Patrick Uwadia, Esq.
Patrick Uwadia, Esq. is the Company Secretary. He joined the Company in April, 2013. A
Chartered Secretary, PGD, ACIS UK. He has worked for Federal Ministry of Housing, Urban
and Environment - Internal Audit, Road Construction Company of Nigeria Limited - Internal
Audit, Godfray Konu & Co/Island Nominees Ltd. Company Secretary, Peat, Marwick, Ani,
Ogunde & Co/Marina Nominees Limited - Company Secretary, Abdulai Taiwo & Co Ltd –
Company Secretary and The Okomu Oil Palm Company Plc - Company Secretary.

19

DIRECTORS OF PRESCO

Mr. Pierre Vandebeeck

Chairman

Mr. Felix O. Nwabuko Engr. J.B. Erhuero JP, mni,OON

Managing Director/CEO

Mr. Osa Osunde

Mrs. Marie William Vandebeeck Chief (Dr.) Bassey E.O. Edem

Mr. William Kenneth Crockett

HRH (Prince) Mr. Gerald Royle Ray

Aiguobasinmwin O. Akenzua

Ambassador Nonye Udo

20

REPORT OF THE DIRECTORS

The Directors submit their report together with the audited financial statements for the year
ended December 31, 2019, which disclose the state of affairs of the Company.

1. PRINCIPAL ACTIVITIES

The principal activities of the Company are the development of oil palm plantations,
palm oil milling, palm kernel processing and vegetable oil refining for the production of
specialty edible oils and fats.

2. OPERATING RESULT

The company's performance during the year under review is summarized below:

Particulars 2019 2018 %
N‘000 N‘000 Difference
Revenue from operations 19,723,641 21,344,730
Gross profit 12,721,831 15,892,114 -8%
Profit after tax and changes in fair -20%
value of biological assets 3,838,746 4,284,188 -10%

3. DIVIDEND

In respect of the current year, the Directors recommend for approval a dividend of 200
kobo per 50 kobo share amounting to N2,000,000,000 subject to the deduction of
withholding tax at the appropriate rate.

At the last AGM, shareholders approved the Directors' recommendation of a dividend of
200 kobo per share amounting to N2,000,000,000, subject to the deduction of
withholding tax at the appropriate rate.

21

4. DIRECTORS

The Directors who held office during the year and to the date of this report were:

Mr. Pierre Vandebeeck (Belgian) Chairman

Mr. Felix O. Nwabuko FCA (Nigerian) Managing Director/CEO

Mr. Osa Osunde FCS, FCTI, F.loD (Nigerian) Independent Non-Executive Director

Chief (Engr.) James B. Erhuero, JP, mni, OON (Nigerian) Independent Non-Executive Director

Dr. Shettima Mustafa, CON (Nigerian) Independent Non-Executive Director,

resigned w.e.f. July 24, 2019

Mrs. Marie William Vandebeeck (Belgian) Non-Executive Director, resigned w.e.f.

February 14, 2020

Chief Dr. Bassey E.O. Edem, FCA, MFR (Nigerian) Independent Non-Executive Director

HRH Prince Aiguobasinmwin, Akenzua (Nigerian) Independent Non-Executive Director

Mr. William Kenneth Crockett (Irish) Executive Director (CFO)

Mr. Thor Eivind Bakken (Norwegian) Executive Director, resigned w.e.f.

July 24, 2019

Mr. Gerald Royle Ray (South African) Executive Director (COO),

appointed w.e.f. July 24, 2019

Amb. Nonye Udo (Nigerian) Independent Non-Executive Director,

elected w.e.f. July 24, 2019

In accordance with the company's articles of association:
(a) Mr. William Kenneth Crockett, Mr. Osa Osunde and HRH Prince Aiguobasinmwin Ogie
Akenzua, whose Curriculum Vitae (C.V.) can be found in the company’s website, retire by
rotation at this annual general meeting, being eligible, offer themselves for re-election.

(b) Mr. Gerald Royle Ray, Mr. Paul Cardoen and Mrs. Ingrid Vandewiele who were
appointed Directors to fill casual vacancies on the Board after the last annual general
meeting, whose Curriculum Vitae (C.V.) can be found in the company’s website retire at
this meeting; being eligible offer themselves for election.

5. DIRECTORS INTEREST IN SHARES

The interest of Directors in the issued share capital of the Company as recorded in the
Register of Members and/or notified by the Directors for the purpose of Section 275 of the
Companies and Allied Matters Act, CAP C20 LFN 2004, and disclosed in accordance with
the Listing Rules of the Nigerian Stock Exchange is as follows:

Name of Director 2019 2019 2018 2018
Mr. Pierre Vandebeeck Units (Direct) Units (Indirect)
Units (Direct) Units (Indirect)
- 208,320
47,052 14,846 206,320
-
Mr. Felix O. Nwabuko FCA 250 - 250 47,052
-
Mr. Osa Osunde FCS, FIoD 1,000 - 1,000 -

Dr. Shettima Mustafa, CON - 255,372 167,500 -

Chief Engr. James B. Erhuero, nmi, JP, OON 624,000 624,000 -

Chief Dr. Bassey Edem, FCA, MFR 50,000 50,000 -
857,596 255,372
Total 675,250

22

As at 31 December 2019, the direct holdings of Mr. Pierre Vandebeeck were sold, while he
acquired indirect shares in another company. The indirect shares are held in the name of
SA FIMAVE NV.

The indirect shares of Felix O. Nwabuko is held in the name of Mega Equities Limited.
The Direct and Indirect Holdings of the other directors remain unchanged.
The Directors with indirect shares are not representing any individual or company.

6. SUBSTANTIAL SHAREHOLDERS

The following shareholders held 5% and above of the issued share capital of the
Company as at 31 December, 2019:

Name of Address Holdings % Holdings
Shareholder
Romboutsstraat 6-8, 600,000,000 60%
SIAT SA 1932 Zaventem, Belgium

7. SHARE RANGE ANALYSIS

The range of the distribution of the shares of the Company as at 31 December, 2019 is as
follows:

RANGE ANALYSIS AS AT 31/12/2019

RANGE - 1,000 No of % Units %
- 5,000 Holders Holders Units
1 - 10,000 1,850,265
1,001 - 50,000 3,475 37.80 8,936,315 0.19
5,001 - 100,000 3,367 36.62 8,060,295 0.89
10,001 - 500,000 10.85 22,696,552 0.81
50,001 - 1,000,000 998 10.72 12,519,210 2.27
100,001 - 5,000,000 986 30,533,415 1.25
500,001 - 10,000,000 163 1.77 13,953,723 3.05
1,000,001 - 50,000,000 137 1.49 80,624,536 1.40
5,000,001 - 1,000,000,000 0.22 42,287,459 8.06
10,000,001 20 0.34 178,538,230 4.23
50,000,001 31 0.08 600,000,000 17.85
0.10 60.00
7 0.01 1,000,000,000
9 100.00
1 100.00

9,194

23

8. CAPITAL ASSETS

Significant capital assets expenditure during the year was as follows:

Work in progress 2019 2018
Building N’000 N’000
Heavy duty equipment 14,547,927
6,990,003 11,640
Utilities 16,967
Furniture and fitting 79,105
13,451
Motor vehicles & wheel tractors - 20,069
Processing Equipment 31,524
24,385 178,121
104,760
373,732
898

9. MAJOR CUSTOMERS

The Company's products are sold directly to customers comprising wholesalers,
consumers and industrial users with majority located within the Country.

Some of these are: Nestle Nig Plc, Lagos; Wamco Nigeria Plc, Lagos; Chikki Food Industries,
Lagos; PZ Cussons Nigeria Plc, Lagos; PZ Wilmar Ltd, Lagos; Fan Milk Plc, Ibadan; Golden
Pasta Company Ltd, Lagos; Aspira Nigeria Ltd, Kano; KLK Emmerich GmbH, Germany;
Promasidor, Lagos; Primera foods, Lagos; Orient foods Lagos; Beloxxi Industries Limited,
Lagos; Dangote Group, Lagos; amongst others.

10. COMMUNITY DEVELOPMENT PROJECTS/COMMUNITY RELATIONS

The Company's Host Communities' Development Programme continued during the year
ended 31 December, 2019. The focus was on education, roads, water, electricity and
support to out-growers. Total expenditure in respect of the programme was N22,985,196
(2018: N52,325,978) and is included within the Corporate Social Responsibility (CSR)
expense of Note 9 of the financial statement.

11. DONATIONS

Donations during the year amounting to N48,181,772.00 (2018: N38,923,000.00) were
made to various organisations including but not limited to Institute of Chartered
Accountants of Nigeria, Benin Golf Open Championship UNIBEN Faculty of Science The
Edo Summit, Feed Nigeria Summit, AGM Food, Beverage & Tobacco Sector RSPO
Conference, Edo State NUJ Edo State Ministry of Commerce and Industry Nigerian
Television Authority, World Safety Organisation, Benin Chamber of Commerce, Oba of
Benin Kingdom events, Communal events among others.

24

12. RESEARCH & DEVELOPMENT

We are committed to Research and Development. It is at the forefront of our new planting
material development and has been very successful in increasing the quantity of Fresh
Fruit Bunches (FFB) and Oil production per hectare. We continue to put efforts to be the
leader in Research and Development.

The amount expended on research and development in the year under review was
N210.452 million (2018: N608.321 million). We have collaborated with first class research
organizations, national and international universities. Every year the research activities
are increasingly bringing us closer to our ambition of establishing Presco as a Centre of
Excellence for oil palm cultivation and research in the West African region.

13. EMPLOYMENT OF DISABLED PERSONS

The Company maintains a policy of giving fair consideration to applications for
employment of disabled persons giving regards to their particular aptitudes and abilities.
At present there are fifty (50) disabled persons employed by the Company.

14. HEALTH, SAFETY AND WELFARE

Medical services are provided free of charge for Company employees at the estate clinics
and retainer hospitals. Appropriate personal protective equipment is provided for
employees at work. There is a fire-fighting program, which involves all employees and the
use of sophisticated equipment. Welfare facilities provided include housing for
employees (or payment of an allowance in lieu) and transport to and from the work
place.

15. EMPLOYEE INVOLVEMENT AND TRAINING

The Company maintains communication and consultation on a regular basis with
employee representatives to brief employees on matters affecting them. On-the-job
training facilities are provided for all categories of employees with a view to improving
their performance, job satisfaction and prospects. External training program are also
undertaken.

16. EVENTS AFTER THE END OF THE REPORTING PERIOD

As at the date of the approval of the financial statements, management has performed a
preliminary assessment of the impact of COVID-19 on its operations. Management,
however, does not anticipate the COVID-19 to have significant impact on its operations.
See Note 42 of the financial statements for management's preliminary assessment of
COVID-19 on its business.

25

17. AUDITORS

In accordance with Section 357(2) of the Companies and Allied Matters Act (CAP C20) LFN
2004, Deloitte & Touche (Chartered Accountants) will continue in office as Auditors to the
Company, having indicated their willingness to do so. A resolution will be proposed to
reappoint them and to authorize the Directors to fix their remuneration.
BY ORDER OF THE BOARD

____________________________________
Patrick Uwadia, Esq.
Company Secretary
FRC/2013/ICSAN/00000004864
22 May 2020
Obaretin Estate,Ikpoba Okha LGA,
Edo State, Nigeria

26

Grant Thornton

An instinct for growthTM

Chartered Accountants

Grant Thornton Nigeria
4 Geodetic Road, Rumuobiokani
P.O.Box 12674, Port Harcout,
Nigeria
T: +234 8146489646
www.grantthornton.com.ng

Report of the External Consultants on Presco Plc’s Board of Directors’ Appraisal for the
year ended 31 December 2019

We have completed our procedures for Presco Plc’s board of directors’ appraisal for the year
ended December 2019 in accordance with section 15, sub-sections 1 and 6 of the Securities and
Exchange Commission’s (SEC) Code of Corporate Governance 2011 for public companies in
Nigeria.

The scope of our review focused on all the relevant sections of the SEC Code.

Our review procedures were in accordance with the limited scope of our engagement and might
not necessary identify all irregularities that may exist in the underlying information.

Our approach involved a review of the company’s board papers and minutes, key corporate
governance structures, policies and practices. This included the review of the corporate
governance framework and representations obtained from questionnaires. Interviews with the
members of the board and senior management.

Based on our review, the company’s corporate governance practices substantially complied with
the key provisions of the SEC Code of Corporate Governance 2011. Specific recommendations
to further improve the company’s governance practices have been articulated and included in our
detailed report and gap analysis to the board of directors. These include recommendations to
continue the improvements in the disclosure process. Implementation of the risk management
framework and adoption of a risk based internal audit process.

This report should not be construed for expression or approval of matters not specifically
mentioned therein

Yours faithfully

Ngozi A. Ogwo
Principal Partner & Head,
Grant Thornton Advisory Services
FRC/2013/ICAN/00000004923
22 May 2020

Partners:

Peter N. Orizu (Executive Chairman)

Isaac E. Esene

Ngozi A. Ogwo

Orji J. Okpechi

Victor O. Osifo

Nkwachi U. Abuka

Uchenna G. Okigbo

Ajayi O. Irivboje Audit * Tax * Advisory

Nonyerem O. Opara Grant Thornton Nigeria is a member firm of Grant Thornton International Ltd.

27

CORPORATE GOVERNANCE REPORT

Presco Plc follows the Corporate Governance Guidelines which is in compliance with the
Code of Corporate Governance in Nigeria 2011 as amended and supplemented by the
Company's Code of Corporate Governance and the Corporate Governance Guidelines for
the Siat Group of which it is a member which is in line with International Best Practice.

THE BOARD

The Board is constituted of ten Directors including the Chairman who has no executive
responsibilities. The primary responsibility of the Board is to ensure that the Company's
business strategy is appropriate and implemented effectively. The Board is also
responsible for the management of the Company's relationship with its various
stakeholders.

On appointment, Directors receive all codes of corporate governance and policy
document and a comprehensive induction, including site visits and meetings with senior
management to help them build up quickly detailed understanding of the Company.
Additional training is arranged as appropriate, by the Company and at the Company's
expense.

INDEPENDENT & EXECUTIVE STATUS OF DIRECTORS

Mr. Pierre Vandebeeck (Belgian) Chairman, Non-Executive

Mr. Felix O. Nwabuko Managing/CEO

Mr. Osa Osunde Ind. Non-Executive

Chief (Engr.) James B. Erhuero, JP, mni, OON Ind. Non-Executive

Dr. Shettima Mustafa, CON Ind. Non-Executive (Resigned w.e.f.

July 24, 2019)

Mrs. Marie William Vendebeeck (Belgian) Non-Executive (Resigned w.e.f

February 14, 2020)

Chief Dr. Bassey E.O. Edem, MFR Ind. Non-Executive

HRH Prince A.O. Akenzua Ind. Non-Executive

Mr. William Kenneth Crockett (Irish) Executive Director, CFO

Mr. Thor Eivind Bakken (Norwegian) Executive Director

Resigned w.e.f July 24, 2019

Mr. Gerald Royle Ray (South African) Executive Director, COO (Appointed

w.e.f July 24, 2019)

AMB. Nonye Udo Ind. Non-Executive Director

(Elected on July 24, 2019)

28

BOARD MEETINGS

The Board of Directors met four times during the year, as follows:

Meeting Date Main Item of Business

March 29th 2019 Consideration of Draft Audited Accounts as at 31 December, 2018.
Unaudited accounts as at 29 March 2019, Operations Report, Filling of casual
vacancies on the Board, Proposed Dividend, Date of Annual General
Meeting, Draft Corporate Governance Policies Gender Policy

July 24th 2019 Unaudited accounts for Q2 2019, Marketing Report, Operations Report,
November 19th, 2019 Sakponba Land, Internal Audit Report, Election and appointment of
Directors

Unaudited accounts as at 30 September 2019, Operations Report, 2020
Budget Proposals, Approval of Key Code of Corporate Governance Polices

December 2019/January Unaudited Financial Statements for the year ended 31 December 2019

2020 Operations Report, 2020 Budget Proposals, Establishment of Corporate

Governance Committees.

ATTENDANCE AT MEETING BY BOARD MEMBERS

The number of attendance at meetings by Board members during the year under review is
as follows:

Names of Directors Number of Attendance at meetings

Mr. Pierre Vandebeeck (Belgian) (Chairman) 3
Mr. Felix O. Nwabuko FCA, MD/CEO 4
Chief (Engr.) James B. Erhuero, JP, mni, OON 4
Mr. Osa Osunde, FCS, FCTI, F.IoD 4
Dr, Shettima Mustafa, CON 0
Mrs. Marie William Vandebeeck (Belgian) 2
Chief Dr. Bassey E.O. Edem, FCA, MFR 4
HRH (Prince) A.O. Akenzua 4
Mr. William Kenneth Crockett (Irish) 4
Mr. Thor Eivind Bakken (Norwegian) 3 resigned w.e.f 24 July, 2019
AMB Nonye Udo 3 Elected w.e.f 24 July, 2019
Mr. Gerald Royle Ray (South African) 2 appointed w.e.f 24 July 2019

29

CONFLICT OF INTEREST

All Directors and employees are expected to avoid direct or indirect conflicts of interest.
Where a conflict of interest may arise in a matter to be decided by the Board of Directors,
the Director concerned is expected to inform the Board and to abstain from voting.
Transaction between the Company and Directors, where they arise, take place at arm's
length.

There have been no transaction and other contractual relationships between the
Company and its Board members and executive managers, which are not covered by its
legal provisions on conflicts of interest.

The Company carries out transactions with its parent Company, sa Siat nv on an arm's
length basis. The terms and conditions of transactions are covered by an agreement
between Siat and Presco Plc. These transactions are in the nature of secondment of
personnel and the purchase and supply of equipment and materials.

TRANSACTION IN SHARES AND COMPLIANCE WITH DIRECTIVES ON MARKET ABUSE
The use of inside or unpublished information about the Company in buying or selling of its
shares is strictly forbidden. In order to comply with legislation on insider dealing and
market manipulation (market abuse), Directors and executive management are expected
to declare transactions on their own account in the shares or other financial instruments
of the Company. Where significant, such transactions will be disclosed to the market.
There were no such transactions in the year under review.

The Company has adopted the code of conduct regarding Securities transactions by its
directors on terms no less exacting than the required standard set on the rules. Having
made enquiry of all directors, all directors have complied with the listing rules and the
issuers' code of conduct regarding securities transactions by directors.

It is hereby confirmed that the Company also has in place a Securities Trading policy in
compliance with Rule 17.15 Disclosure of Dealings in issuers' Shares, Rulebook of The
Exchange, 2015 (Issuers' Rules) which states that: “Every Issuer shall establish a Securities
Trading policy which apply to all employees and Directors and shall be circulated to all
employees that may at time possess any insider or material information about the Issuer.
The trading policy shall include the need to enforce confidentiality against external
advisers”. This policy is posted on the company's website.

30

COMMITTEES Director, member (Re-appointed on 24/07/19)
Shareholder, member (Re-elected on 24/07/19)
Statutory Audit Committee Shareholder, member (Re-elected on 24/07/19)
Shareholder, member (Re-elected on 24/07/19)
Chief Dr. Bassey E.O. Director, member (Re-appointed on 24/07/19)
Edem FCA MFR (Chairman) Director, member (Re-appointed on 24/07/19)
Engr. M.O.T. Olayiwola Tobun
Mr. Famous Igbinevbo
Mr. Kingsley Iyekekpolor
Mr. Osa Osunde FCS. FCTI, F.IoD
HRH Prince A.O. Akenzua

Attendance at meeting by Statutory Audit Committee members

The number of attendance at meetings by Audit Committee members during the year under
review is as follows:

Names of Audit Committee Members Number of Attendance at Meeting

Chief Dr. Bassey E.O. Edem (Chairman) 4
Engr. MOT Olayiwola Tobun 4
Mr. Famous Igbinevbo 4
Mr. Kingsley Iyekekpolor 4
Mr. Osa Osunde FCS, FCTI, F.IoD 4
HRH Prince A. O. Akenzua 4

The Audit Committee met four times during the year, as follows:

Meeting Date Main Items of business

March 28th, 2019 Approval of Management Letter., Draft Audited Financial Statement for
the year ended 31 December 2018. Unaudited Financial Statement as at
28 February, 2019, First Quarter Internal Audit Manager's Report.

July 24th, 2019 Approval of Unaudited accounts as at 30 June, 2019 and internal Audit
Report as at 30 June, 2019

November 18th, 2019 Approval of Audit Planning Memorandum for Presco Plc for the year
ending 31 December, 2019, Unaudited accounts as at 30 September, 2019
December 2019/ and internal Audit Report as at 30 September, 2019
January 2020
Approval of Q4 Unaudited accounts as at 31 December, 2019 and 2020
Budget Estimate

31

Risk Management Committee

The risk management committee have the duty to:
(a) Assist the Board in its oversight of the risk profile, risk management framework and

the risk strategy as may be determined by the Board.
(b) Review the adequacy and effectiveness of risk management and controls in the

Company.
(c) Exercise oversight over management process for the identification of significant risks

across the company and the adequacy of prevention, detection and reporting
mechanisms.
(d) Undertake the review of the company's compliance level with application laws and
regulatory requirements which may impact the company's risk profile.
(e) Undertake periodic review of changes in the economic and business environment,
including emerging trends and other factors relevant to the Company's risk profile
and make recommendations to the Board as appropriate.
(f) Review and recommend for approval of the Board risk management procedures and
controls for new products and services.
(g) Ensure that information Technology assets are managed effectively.
(h) Review the company's information Technology governance framework at least
annually.

Members of Risk Management Committee

Date Name of Members Attendance

Chief Dr. Bassey E. O. Edem Chairman 1
1
Mr. Osa Osunde Member 1
1
November 19, 2019 Chief Operations Officer Member 1

Managing Director Member

Company Secretary Secretary

BOARD AUDIT COMMITTEE

The Board audit committee should have the following additional responsibilities:
(a) Exercise oversight over the integrity of the company's financial statements,

compliance with legal and other regulatory requirements, assessment of
qualifications and independence of external auditor, and performance of the
company's internal audit function as well as that of external auditors;
(b) Establish an internal audit function and ensure there are other means of obtaining
sufficient assurance of regular review or appraisal of the system of internal controls in
the company;
(c) Ensure the development of a comprehensive internal control framework for the
company, obtain assurance and report annually in the financial report, on the

32

operating effectiveness of the company's internal control framework;
(d) Oversee the process for the identification of significant fraud risks across the

company and ensure that adequate prevention, detection and reporting
mechanisms are in place;
(e) At least on a quarterly basis, obtain and review a report by the internal auditor
describing the strength and quality of internal controls including any issues or
recommendations for improvement, raised by the most recent internal control
review of the company;
(f) Discuss the annual audited financial statements with management and external
auditors;
(g) Discuss policies and strategies with respect to risk assessment and management;
(h) Meet separately and periodically with management, internal auditors and
external auditors;
(i) Review and ensure that adequate whistle-blowing procedures are in place and
that a summary of issues reported are highlighted to the chairman of the
committee;
(j) Review, with the external auditor, any audit scope limitations or problems
encountered and management's responses to same;
(k) Review the independence of the external auditors and ensure that where
approved non-audit services are provided by the external auditors, there is no
conflict of interest;
(l) Preserve auditors independence, by setting clear hiring policies for employees or
former employees of independent auditors;
(m) Consider any related party transactions that may arise within the company or
group;
(n) Invoke its authority to investigate any matter within its Charter for which purpose
the company must make available the resources to the internal auditors with
which to carry out this function, including access to external advice where
necessary; and
(o) Report regularly to the Board.

Members of Board Audit Committee:

Date Name of Members Attendance

Chief (Engr.) James Erhuero Chairman 1
0 (Resigned w.e.f
Dr. Shettima Mustafa Member
July 24, 2019)
November 19, 2019
1
Mr. Osa Osunde Member 1
Chief Financial Officer Member 1

Company Secretary Secretary

The board audit committee met once during the year.

33

Nomination and Governance Committee

The nomination and governance committee shall have the duty to:
(a) Review the structure, size and composition of the board at least annually and make

recommendations on any proposed changes to the board.
(b) Establish the criteria for board and board committee membership, review

prospective candidates' qualifications and any potential conflict of interest, assess
the contribution of current directors against their re-nomination suitability, and
make appropriate recommendations to the board.
(c) Periodically determine the skills, knowledge and experience required on the board
and its committees.
(d) Identify individuals suitably qualified to become board members and make
recommendations to the board for nomination and appointment as directors.
(e) Ensure the annual declaration of independence by independent non-executive
directors and undertake the annual assessment of the independent status of such
independent non-executive directors.
(f) Justify to the board and members of the company the re-classification of an existing
non-executive director as an independent non-executive director.
(g) Ensure that the company has a succession policy and plan in place for the chairman
of the board, the chief executive officer of the company, and all other executive and
non-executive directors and senior management positions.
(h) Ensure that the board undertakes an annual performance evaluation of itself, its
committees, the chairman and other individual directors.

Nomination and Governance Committee Attendance

Date Name of Members

Mr. Osa Osunde Chairman 1
1
Managing Director Member 1
0 (Resigned w.e.f
November 19, 2019 Chief Dr. Bassey E. O. Edem Member
July 24, 2019)
Dr. Shettima Mustafa Member
1
Company Secretary Secretary

The nomination and governance committee met once during the year under review.

SECURITIES TRADING POLICY

The Securities Trading Policy (“Policy”) of Presco Plc (“the Company”) provides information
regarding insider trading provisions in compliance with the Listing Rules (“Listing Rules”) of
the Nigerian Stock Exchange (“Exchange”) and the Rules and Regulations of the Securities
and Exchange Commission(“SEC”) both as amended. This Policy sets out the requirements
for Directors, Principal Officers, Employees, persons discharging managerial responsibility,
External Advisers (“Officials”) of the Company and persons closely connected to them, to
determine their conduct regarding securities transactions in the Company.

34

The objective of this Policy is to ensure that all Insiders and or Officials (who become aware of or
have the knowledge of any negotiations or agreements related to intended acquisitions or
disposals, which are notifiable transactions or connected transactions under the Listing Rules or
any insider information), must refrain from dealing in the Company's securities, as soon as they
become aware of them or have the information, until such a time that the information has been
made public.
Any unauthorized disclosure of confidential information to any other person or the use of such
information for the advantage of himself/herself or others is disallowed. Consequently, all
dealings in which Insiders or Officials are deemed to be interested in, must be conducted in
accordance with this Policy. Insiders or Officials who are desirous of dealing in any securities in
the Company must have regard to the provisions of the Investments and Securities Act (“ISA”)
and the Listing Rules with respect to Insider dealing and market misconduct.
We confirm that Presco Plc’s Securities Trading Policy has been posted on the Company’s website

COMPLAINTS MANAGEMENT POLICY

To establish and maintain complaints management framework in compliance with rules relating
to complaints management framework of the Nigeria Capital Market.
To establish and maintain open easy accessible window to enable all stakeholders and members
of the public present or lodge complaints concerning the company's operations, business
activities, management, administration and public relation.
To establish and maintain competent and functional complaints committee to investigate and
resolve complaints received or lodged.
To establish and maintain electronic complaints register.
To take all necessary measures in full compliance with the provisions of the code of good
corporate governance for public quoted company in particular and organizations in general.
We confirm that Presco Plc Complaints Management Policy has been posted on the Company’s
website.

COMPLAINTS MANAGEMENT COMMITTEE

To carry out the Complaints Management policy of the company as summarized
above under complaints management policy.
Complaints Management committee

Date Name of Members Attendance

HRH (Prince) A. O. Akenzua Chairman 1
1
Managing Director Member 1
0 (Resigned w.e.f
November 19, 2019 Chief Operations Officer Member
July 24, 2019)
Dr. Shettima Mustafa Member
1
Company Secretary Secretary

The complaints management committee met once during the year under review.

35

Remuneration Committee

A remuneration committee was constituted by the Board during the year under review in
line with the requirement of Security and Exchange Commission (SEC).
The members of the committee are:

Remuneration Committee

Date Name of Members Attendance

Dr. Shettima Mustafa Chairman 0 (Resigned w.e.f
July 24, 2019)
November 19, 2019 Dr. Bassey E. O. Edem Member
1
HRH (Prince) A. O. Akenzua Member 1
1
Company Secretary Secretary

The remuneration committee met once during the year under review.
There is currently no Board Business Development Committee because the full Board
reviews the long-term business plan annually.

There is currently no Board Corporate/Public Relations Committee because the full Board
regularly reviews and evaluates aspects of the social and business environment and duly
guides Executive Management

Company Secretary

All Directors have access to the services of the Company Secretary and may take
independent professional advice at Presco's expense.

The Company Secretary is also responsible for facilitating the induction and professional
development of Board members as well as ensuring information flow within the Board, its
Committees and between the Non-Executive Directors and senior management.

The Company Secretary is Mr. Patrick Uwadia. He was employed on 8th April, 2013.

Executive Management

Under the leadership of the Managing Director, Executive Management is responsible to the
Board for the implementation of the strategy and policies approved by the Board, making
and implementing operational decisions and running the Company. Non-executive
Directors, using their knowledge and experience, challenge, monitor and approve the
strategy and policies recommended by Executive Management.

36

Information Flows

It is the responsibility of Executive Management under the direction of the Board, to
ensure that the Board receives adequate information on a timely basis, about the
Company's businesses and operations at appropriate intervals and in an appropriate
manner, to enable the Board to carry out its responsibilities.

Internal Audit

The Company's internal audit function reports to the Managing Director. For its day-to-
day and project work, the department is guided by the instructions of the Statutory Audit
Committee and the Company's internal Audit Charter/Procedures Manual. The Internal
Auditor is Mr. Fayoyin Oyekunle. He has held the position since May 5th 2014.

Management

Mr. Gerald Royle Ray assumed duty as Chief Operating Officer in place of Mr. Thor Bakken
with effect on July 24th, 2019.

Environment, Health and Safety

The Company conducts its affairs in a safe and environmentally sustainable manner as
well as promotes the health of its employees, contractors, customers and host
communities. Presco Plc complies with all applicable environmental, health and safety
laws and regulations and aims to improve its performance in these areas. Environmental,
health and safety matters are integrated into business decision-making and training is
provided to ensure that stakeholders are aware of the requirements of the Company's
Corporate Governance Guidelines.

The Company commits significant resources towards environmental protection, health
and safety. There are independent departments with budgets for same. The Company
is a foremost sponsor in the exercise to classify Nigerian Palm Oil under Roundtable for
Sustainable Palm Oil (RSPO).

37

REPORT OF THE AUDIT COMMITTEE

To the members of Presco Plc

In compliance with the provisions of Section 357(3) to (6) of the Companies and Allied Matters
Act, the members of the Audit Committee reviewed the financial statements of the company for
the year ended 31 December 2019 and reports as follows:

a) Reviewed the scope and planning of the audit requirements and found them adequate;
b) Reviewed the financial statements for the year ended 31 December 2019 and are satisfied

with the explanations obtained;
c) Reviewed the external auditors' management letter for the year ended 31 December

2019 and are satisfied that management is taking appropriate steps to address the issues
raised; and
d) Ascertained that the accounting and reporting policies for the year ended 31 December
2019 are in accordance with legal requirements and agreed ethical practices.

The external auditors confirmed having received full cooperation from the Company's
management and that the scope of their work was not restricted in any way.

_________________________________
Chief Dr. Bassey E.O. Edem, FCA, MFR
FRC/2015/ICAN/00000012205
Chairman, Statutory Audit Committee
21 May 2020

Members of the Statutory Audit Committee:

Chief Dr. Bassey E.O. Edem, FCA, MFR Director Chairman
Member
Engr. M.O.T. Olayiwola Tobun Shareholder Member
Member
Mr. Famous Igbinevbo Shareholder Member
Member
Mr. Kingsley Iyekekpolor Shareholder

Mr. Osa Osunde FCS. FCTI, F.Iod Director

HRH Prince A.O. Akenzua Director

The Company Secretary, Patrick Uwadia, acted as secretary to the audit committee

Chief Dr. Bassey Engr. M. O. T. Mr. Famous Mr. Kingsley Mr. Osa Osunde HRH Prince A. O.
E. O. Edem FCA MFR Olayiwola Tobun Igbinevbo Iyekekpolor FCS. FCTI. F.Iod Akenzua

Chairman

38

Certification Pursuant to Section 60 (2) of Investment and Securities Act No. 29
of 2011

We the undersigned hereby certify the following with regards to our financial reports for the year
ended 31 December, 2019 that;

a) We have reviewed the report;
b) To the best of our knowledge, the report does not contain:

(i) Any untrue statement of materials effect, or
(ii) Omit to state a material fact, which would make the statements misleading in the

light of the circumstances under which such statements were made;
c) To the best of our knowledge, the financial statements and other financial information

included in the report fairly present in all material respects the financial condition and
results of operations of the Company as of, and for the period presented in the
report.

d) We:
(i) Are responsible for establishing and maintaining internal controls;
(ii) Have designed such internal controls to ensure that material information relating
to the Company is made known to such officers by others within entities
particularly during the period in which the periodic reports are being
prepared;
(iii) Have evaluated the effectiveness of the Company's internal controls as of date
within 90 days prior to the report;
(iv) Have presented in our report our conclusions about the effectiveness of the
company's internal controls based on our evaluation as of that date;

e) We are not aware of and have disclosed as such to the Auditors and the Audit Committee:
(i) Significant deficiencies in the design and operation of internal controls which
would adversely affect the Company's ability to record, process, summarize and
report financial data and have identified for the company's auditors any material
weakness in internal controls; and
(ii) Any fraud, whether or not material, that involves management or other
employees who have significant role in the company's internal controls;

f) We have identified in the report whether or not there were significant changes in internal
controls or other factors that could significantly affect internal controls subsequent to
the date of our evaluation, including any corrective actions with regard to significant
deficiencies and material weakness.

_______________________ _____________________
Felix O. Nwabuko William Kenneth Crockett
Managing Director Chief Financial Officer
FRC/2016/ICAN/00000014276 FRC/2019/ICAN/00000019300

39

STATEMENT OF DIRECTORS' RESPONSIBILITIES
For the preparation and approval of the financial statements

The Directors of Presco Plc are responsible for the preparation of the financial statements
that give a true and fair view of the financial position of the Company as at 31 December
2019, and the results of its operations, cash flows and changes in equity for the year
ended, in compliance with International Financial Reporting Standards ("IFRS") and in the
manner required by the Companies and Allied Matters Act of Nigeria, the Financial
Reporting Council of Nigeria Act, 2011.
In preparing the financial statements, the Directors are responsible for:

* properly selecting and applying accounting policies;
* presenting information, including accounting policies, in a manner that provides

relevant, reliable, comparable and understandable information;
* providing additional disclosures when compliance with the specific requirements

in IFRSs are insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Company's financial position
and financial performance; and
* making an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for:

* designing, implementing and maintaining an effective and sound system of
internal controls throughout the Company;

* maintaining adequate accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable accuracy at any time
the financial position of the Company, and which enable them to ensure that the
financial statements of the Company comply with IFRS;

* maintaining statutory accounting records in compliance with the legislation of
Nigeria and IFRS;

* taking such steps as are reasonably available to them to safeguard the assets of
the Company; and

* preventing and detecting fraud and other irregularities.

Going Concern:

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

40

The financial statements set out on the accompanying pages have been prepared on a going
concern basis, were approved by the directors on 22 May 2020 and were signed on its behalf by:

_________________________ ________________________
Pierre Vandebeeck Felix O. Nwabuko
Chairman Managing Director
FRC/2019/NIM/00000019385 FRC/2016/ICAN/00000014276

________________________

William Kenneth Crockett
Chief Financial Officer
FRC/2019/ICAN/00000019300

41

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Presco Plc

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Presco Plc which comprise the
statement of financial position as at 31 December 2019, the statement of profit or loss and other
comprehensive income, changes in equity, cash flows for the year then ended, the notes to the
financial statements including a summary of significant accounting policies.

In our opinion, the financial statements give a true and fair view of the financial position of Presco
Plc as at 31 December 2019 and the financial performance and statement of cash flows for the
year then ended in accordance with the International Financial Reporting Standards, the
Companies and Allied Matters Act Cap C20 LFN 2004 and the Financial Reporting Council of
Nigeria Act, 2011.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditors' Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the requirements of the Institute of Chartered Accountants of Nigeria
Professional Code of Conduct and Guide for Accountants (ICAN Code) and other independence
requirements applicable to performing audits of financial statements in Nigeria. We have fulfilled
our other ethical responsibilities in accordance with the ICAN Code and in accordance with other
ethical requirements applicable to performing audits in Nigeria. The ICAN Code is consistent with
the International Ethics Standards Board for Accountants Code of Ethics for Professional
Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.

Key Audit Matter

Key audit matter is the matter that, in our professional judgement, was of most significance in
our audit of the financial statements of the current year. The matter was addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on the matter.

42

Key Audit Matter How the matter was addressed in the audit
Biological Assets Valuation

The value of the biological assets (Fresh Fruit Bunches) is In evaluating valuation of the Biological Assets, we
a significant balance in the Company's statement of tested the assumptions used and also compliance with
financial position and is disclosed in note 17 to the the requirements of relevant accounting standards.
financial statements. The valuation of the biological
assets involves significant judgments and assumptions. Our procedures included the following:

Accordingly, for the purposes of our audit, we identified • Challenged the model in use with respect to
the valuation of biological assets as a key audit matter compliance with IAS 41 provision and ensured
based on the significant judgement and assumption appropriate adjustments made when necessary.
made by the directors. • Reviewed the inputs used in the valuation by
holding discussions with the farm manager and
The assumptions which have the most significant impact obtaining and reviewing the farm report to verify the
on the biological asset valuation are: input factors used.
• Benchmarked the inputs used in the valuation to
• The Fresh Fruit Bunches (FFB) yield of the palm tree, applicable market data.
which is subjective since it is based on the directors' • Obtained the relevant and applicable Crude Palm
experience and expectations rather than observable Oil (CPO) price converted at the appropriate exchange
market data. The yield is estimated based on age profile rate.
of the palm trees. Relevant assumptions and • Reviewed the assumptions used in the discount
judgements have been included in note 3 of the financial cash flow computation and ensured that they were
statements. reasonable considering the recent economic trends in
• The discount rate, which is based on the weighted the country.
average cost of capital. The calculation of the weighted • Reviewed historical price margins to determine the
average cost of capital is a complex process that involves reasonability and appropriateness of the cash flows.
judgements and specific risk adjustments. • Ensured that discounting factors used in the
• The applicable market to determine the most computation was the weighted average cost of capital of
appropriate Crude Palm Oil price and related the Company's industry
transactional costs to the Company with consideration • Performed sensitivity analysis to assess the impact
for the effective foreign exchange rate impacting the of any change on the assumptions and inputs.
Company's operations. • Involved our internal valuation expert in the
• The forecast for the biological produce which were valuation of the Company's biological assets.
based on management's expectation and experience. • Evaluated the adequacy of the financial statement
• The estimated cost of disposing off the biological disclosures, including disclosures of key assumptions,
asset which includes the incremental costs to take to judgements and sensitivities.
market, the cost of engaging professionals to assist with
the disposal process and other transaction costs, and The judgement and assumptions made by the directors
these are based on the fair value to arrive at the fair for the biological assets valuation were found to be
value less cost to sell. appropriate and the inputs and rates appear to be based
on applicable supporting information.

43

Other Information
The directors are responsible for the other information. The other information comprises the
Chairman's statement, Directors' report, the Investment and Security Act No. 29 of 2007 Section
60(2) certification, Corporate Governance Report, report of the External Consultants on Presco
Plc's Board of Directors' appraisal for the year ended 31 December 2019, the Statement of
directors responsibilities, the Audit committee's report and financial highlights, which we
obtained prior to the date of this auditors' report. The other information does not include the
financial statements and our report thereon.

Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.

Based on the work we have performed on the other information that we obtained prior to the
date of this auditor's report, if we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements
The directors are responsible for the preparation of the financial statements that give a true and
fair view in accordance with International Financial Reporting Standards and the requirements of
the Companies and Allied Matters Act CAP C20 LFN 2004, Financial Reporting Council Act, 2011
and for such internal control as the directors determine is necessary to enable the preparation of
the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate
the Company or to cease operations, or have no realistic alternative but to do so.

Auditors' Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.

44

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors' use of the going concern basis of
accounting and based on the audit evidence obtained, whether a material uncertainty exists
relating to events or conditions that may cast significant doubt on the Company's ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the Company's financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.

We communicated with the audit committee and the directors regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provided the audit committee and directors with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.

From the matters communicated with the audit committee and the directors, we determine the
matter that was of most significance in the audit of the financial statements of the current year
and is therefore the key audit matter. We describe the matter in our auditors' report unless law or

45

regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to
outweigh the benefits derivable by the public from such communication.
Report on Other Legal and Regulatory Requirements
In accordance with the Sixth Schedule of the Companies and Allied Matters Act CAP C20
LFN 2004, we expressly state that:
i) We have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit.
ii) The Company have kept proper books of account, so far as appears from our

examination of those books.
iii) The Company's financial position, statements of profit or loss and other

comprehensive income are in agreement with the books of account and returns.

Hassan Lawal, FCA - FRC/2013/ICAN/000000001382
For: Deloitte & Touche
Chartered Accountants
Lagos, Nigeria
29 May 2020

46

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Notes 2019 2018
N'000 N'000
(Restated)*
Revenue 7 19,723,641
Cost of sales 8 (7,001,810) 21,344,730
Gross profit (5,452,616)
12,721,831 15,892,114

Administrative expenses 9 (6,430,911) (5,450,147)
Selling and distribution expenses
Other gains and losses 10 (382,709) (539,408)
Other operating income
Gain/(loss) on biological asset revaluation 11 231,782 78,340

11.1 154,420 242,721

17 1,832,064 (2,632,070)

Operating profit before finance cost and finance income 8,126,477 7,591,550

Finance cost 12 (2,133,709) (1,339,324)
Finance income
Profit before tax 13 66,915 62,784

Tax expense 14 6,059,683 6,321,010

Profit for the year 15 (2,220,937) (2,036,822)

3,838,746 4,284,188

Other Comprehensive Income (OCI)

Item(s) that will not be reclassified subsequently to profit or loss

Remeasurement of defined benefit obligation 26.2 (146,225) 22,311
Income tax relating to components of OCI (-) 15.2 43,867 (6,693)

Other comprehensive income, net of tax (102,358) 15,618

Total comprehensive income for the year 3,736,388 4,299,806

Earnings Per Share 34 374 430
Basic (Kobo) 34 374 430
Diluted (Kobo)

The accompanying notes form an integral part of these financial statements.
* See note 41

47

STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2019

Assets Notes 31-Dec-19 31-Dec-18 1-Jan-18
Non-current assets 16 N’000 N’000 N’000
Intangible assets 18
Property, plant and equipment 19 121 (Restated)* (Restated)*
Right-of-use assets 48,211,859
Total non-current assets 826,845 352,043
1,647,846 42,345,519 28,122,101
49,859,826
- -
43,172,364 28,474,144

Current assets 22 3,329,438 4,631,715 4,704,706
Inventories
Biological assets 17 5,092,477 3,260,413 5,892,483
Trade and other receivables
Cash and bank balances 23 6,793,152 5,062,572 3,607,661

Total current assets 24 5,934,937 2,551,685 3,307,211

21,150,004 15,506,385 17,512,061

Total assets 71,009,830 58,678,749 45,986,205

Equity and liabilities 25.1 500,000 500,000 500,000
Equity
Share capital 25.2 1,173,528 1,173,528 1,173,528
Share premium
(41,737) 60,621 45,003
Other reserves
Retained earnings 26,256,085 22,440,193 20,156,005

Total equity 27,887,876 24,174,342 21,874,536

Non-current liabilities 27 8,487,757 6,619,142 3,969,140

Borrowings 26 694,053 449,502 409,751
Deferred benefit obligations
Deferred tax liabilities 31 6,784,632 5,735,101 6,169,596
Deferred income
Lease liabilities 29 682,697 59,481 126,608

Total Non-current liabilities 30.2 186,531 432,440 462,074

16,835,670 13,295,666 11,137,169

48

Current liabilities Notes 31-Dec-19 31-Dec-18 1-Jan-18
Trade and other payables N’000 N’000 N’000
Current tax liabilities 32
Bank overdraft 31 8,180,957 (Restated)* (Restated)*
Borrowings 28 1,562,333
Deferred income 27 7,093,237 8,034,114 7,428,137
Lease liabilities 29 9,155,154 1,850,812 860,163
30.2 6,025,950
Total current liabilities 261,097 5,179,745 3,174,048
33,506 1,371,973
Total liabilities 88,506
Total equity and liabilities 26,286,284 29,614 110,565
29,614
43,121,954 21,208,741
71,009,830 12,974,500
34,504,407
24,111,669
58,678,749
45,986,205

The financial statements were approved and authorised for issue by the board of directors on
22 May 2020 and signed on its behalf by:

Mr. Pierre Vandebeeck Felix Nwabuko William Kenneth Crockett
Chairman Managing Director Chief Financial Officer
FRC/2019/NIM/00000019385 FRC/2016/ICAN/00000014276 FRC/2019/ICAN/00000019300

The accompanying notes form an integral part of these financial statements.

49