Investor Presentaiton
ANNUAL REPORT 2020
Notes to the Financial Statements
For the year ended 31 December 2020
(d)
Actuarial Assumptions
The following were the actuarial assumptions at the reporting date (expressed as weighted averages).
Long service award: The weighted average liability duration for the Plan is 10.18 years (2019: 9.24 years).
Other post employment benefits: The weighted average liability duration for the Plan is 14.76 years (2019: 13.35
years).
In thousands of naira
Financial Assumptions
Long-term Average Discount rate (p.a.)
Long-term Average Future Pay Increase (p.a.)
Long-term Average Future Rate of Inflation (p.a.)
Mortality in Service
2020
The rates of mortality assumed for employees are the rates published in the A67/70 Ultimate Tables, published The
rates of mortality assumed for employees are the rates published in the A67/70 Ultimate Tables, published jointly
by the Institute and Faculty of Actuaries in the UK. This is due to unavailability of published reliable demographic
data in Nigeria. The number of deaths in the year of age out of 10,000 lives is shown below:
Sample Age
25
30
35
40
45
(e)
Sensitivity Analysis for Long Service Award Benefits Obligation
Below is the sensitivity analysis of the principal actuarial assumptions adopted in determining the employee benefit
liabilities showing what the obligation value would be if key inputs changed:
Other post employment
benefits
Rate
2020
2019
Long service awards
benefit
2020
2019
2019
Discount rate
-1%
1%
370,598
282,353
209,399
166,526
1,146,887
752,315
956,136
646,582
Salary increase rate
-1%
989,635
655,891
1%
1,106,788
741,014
8.5%
14%
Inflation rate
-1%
281,923
165,287
1,008,239
683,535
10%
14%
1%
370,172
12%
12%
Mortality
Age rated up by 1 year
322,221
Age rated down by 1 year
323,205
210,553
186,420
186,264
1,087,109
710,651
1,039,945
693,450
1,049,727
698,887
2020
2019
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does
provide an approximation of the sensitivity of the assumptions shown.
(f)
Risk Exposure
(a) Inflation risk
7
7
7
7
Employee benefit obligations are linked to salary inflation, and higher inflation will lead to higher liabilities.
(b) Retirement age of employee
9
9
14
14
26
26
The majority of the plans' obligations are payable on resignation/retirement of employees. Decreases in retirement
age will result in an increase in the employee benefit obligations. This is particularly significant in the employee
benefit obligations, where inflationary increases result in higher sensitivity to changes in expected retirement age.
Withdrawal from Service
Withdrawal from service means retirement; voluntary or compulsory disengagement from service.
23
Trade and Other Payables
Rate
In thousands of naira
Age Band
Less than or equal to 30
31-39
40-44
45-50
51-55
56-59
2020
2019
Trade payables
4.0%
4.0%
Other payables and accruals
3.0%
3.0%
2.0%
2.0%
Amount due to related parties*
Dividend payable**
2.0%
2.0%
5.0%
5.0%
5.0%
5.0%
2020
2019
Note 29 (c)
Note 21
8,710,151
6,319,666
76,791,105
498,000
92,318,922
8,549,798
8,017,472
39,894,406
12,070,421
68,532,097
*The increase is due to illiquidity in the Nigerian FX market. The parent Company provided USD denominated loans to
fund the Company's business operations.
**During the year, cash amounting to #45.22 million (2019: #102.43 million) was received from First Registrars & Investor
Services Limited - the company's registrar - representing unclaimed dividends that have been in their custody for up to
fifteen (15) months. This value is included in dividend payables shown in Note 21.
86
FrieslandCampina WAMCO Nigeria PLC
FrieslandCampina WAMCO Nigeria PLC
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