Investor Presentaiton
ANNUAL REPORT 2020
70
Notes to the Financial Statements
For the year ended 31 December 2020
Fair Value Methods and Assumptions
(a)
Financial instruments in level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance
sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange,
dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by
the Fund is the current dirty price. These instruments are included in Level 1.
(b)
Financial instrument in level 2
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable
market data where it is available and rely as little as possible on entity specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If
one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Specific valuation techniques used to value financial instruments include:
a)
b)
Quoted market prices or dealer quotes for similar instruments;
Other techniques, such as discounted cash flow analysis, sales prices of comparable properties in close
proximity, are used to determine fair value for the remaining financial instruments.
Derivative assets are included in this level.
(c)
Financial instruments in level 3
Inputs for the asset or liability in this fair value hierarchy are not based on observable market data (unobservable
inputs). This level includes equity investments with significant unobservable components.
Transfers between the fair value hierarchy categories
During the three reporting periods covered by these financial statements, there were no movements between
levels as a result of significant inputs to the fair valuation process becoming observable or unobservable.
6
In thousands of naira
Finance costs
Net finance costs
Agency personnel cost
Rent of premises
Finance Income and Finance Cost
2020
2019
Interest income on short term deposit
398,843
Foreign exchange gain, net
1,065,696
Finance income
1,464,539
167,773
8,616
176,389
Interest expense on overdrafts, loans and borrowings
Foreign exchange loss, net
(2,850,908)
(2,210,877)
(3,095,876)
(5,946,784)
(2,210,877)
(4,482,245)
(2,034,488)
7(a) Analysis of Expenses by Nature
In thousands of naira
2020
2019
Finished goods, raw materials and consumables
Transportation cost
143,971,108
108,625,797
Technical service and royalty expenses
3,521,002
4,559,415
3,391,738
4,423,295
Advertisement and promotion costs
5,874,670
6,840,373
Market research expenses
Employee benefit expense
Note 9(a)
Non-executive Directors' remuneration
Depreciation of property plant and equipment
Depreciation of right of use asset
Amortisation of intangible assets
283,470
864,923
10,722,142
75,263
3,115,430
17,827
123,183
216,133
873,627
8,802,989
74,257
2,567,928
81,427
Impairment on property, plant & equipment
7,117
Equipment and machinery rental
101,276
107,084
Note 7(c)
165,746
118,506
Audit Fees
30,900
25,058
5
Revenue
Non-Audit Fees to Statutory Auditors (PwC)*
Professional fees
4,200
Maintenance
386,883
1,856,511
222,223
1,565,990
Analysis of revenue from sale of goods by geographical area is as follows:
In thousands of naira
Fuel and gas expenses
1,337,660
1,313,087
Meeting and conference expenses
164,926
152,453
2020
2019
Travel and hotel expenses
75,300
329,053
Information and Communications Technology (ICT) expenses
1,473,906
1,451,776
Insurance expenses
611,636
726,679
Local
Export (Note 29 (c) (ii)
199,167,003
360,903
199,527,906
161,540,397
290,667
161,831,064
Loss/(gain) on the sale of property, plant and equipment
Facility expenses
20,091
(10,124)
498,347
185,505
Bank charges
138,310
139,578
Staff welfare and development
163,867
143,441
Office administration & supplies
134,507
108,891
The revenue in 2020 relates only to revenue from contract with customers.
Donations
615,659
19,980
Total cost of sales, selling, distribution and administrative
expenses
180,903,958
142,508,061
Summarised as follows:
Cost of sales
Selling and distribution expenses
Administrative expenses
159,232,853
15,994,528
5,676,577
180,903,958
121,903,495
15,134,185
5,470,381
142,508,061
FrieslandCampina WAMCO Nigeria PLC
* No non-audit services were provided by our auditors in 2020. Details of other professionals providing other forms
of assurance on the financial statements are disclosed in note 22.
FrieslandCampina WAMCO Nigeria PLC
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