Investor Presentaiton

ANNUAL REPORT 2020 60 Notes to the Financial Statements For the year ended 31 December 2020 Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate. Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred to the relevant asset category immediately the asset is available for use and depreciated accordingly. d) Intangible Assets i. Software Purchased software with finite useful life is measured at cost less accumulated amortisation and accumulated impairment losses. ii. Subsequent expenditure For identifying a lease or a lease component, there must be; i) ii) An identified asset. An asset is typically identified by being explicitly specified in a contract (for example; an address or license plate). However, an asset can also be identified by being implicitly specified at the time that the asset is made available for use by the customer (for example, when it is clear to all parties which asset is meant, for example when the lessor only has one asset to fulfill its contractual obligations with). A portion of an asset's capacity can also be an identified asset. The right to control the use of an identified asset. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, an entity shall assess whether, throughout the period of use, the customer has both of the following. a) The right to obtain substantially all of the economic benefits from use of the identified asset; b) The right to direct the use of the identified asset. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred. iii. Amortisation Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Amortisation is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets. The estimated useful life for the current and comparative periods is as follows: Computer software amortization is 5 years. Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. e) Related Parties Initial recognition At the commencement date, when a lessee starts using the leased asset, a lessee shall recognise a right-of-use asset and a lease liability. Right of use asset At the commencement date, a lessee shall measure the right-of-use asset at cost. The cost of the right-of-use asset shall comprise (IFRS 16.24): 1. The amount of the initial measurement of the lease liability; 2. 3. Any lease payments made at or before the commencement date, less any lease incentives received; Any initial direct costs incurred by the lessee; and 4. Related parties include the holding company and other group entities. Directors, their close family members and any employee who is able to exert a significant influence on the operating policies of the Company are also considered to be related parties. Key management personnel are also regarded as related parties. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. f) Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At the commencement date, the right of use asset is measured at cost, and the lease liability is measured at the present value of the lease payments that are not paid at that date. After the commencement date, the right of use asset is measured at cost minus accumulated depreciation, accumulated impairments, and/or adjusted for any remeasurements or modifications. After the commencement date, the lease liability is measured by increasing the carrying amount with interest on the lease liability, by reducing the carrying amount to reflect the lease payments made and by adjusting for any remeasurements or modifications. Lease expenses for short term, low value and variable leases, as well as non-lease components. are expensed directly in the income statement. An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The lessee incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period. Lease liabilities At the commencement date, a lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date (IFRS 16.27): 1. Fixed payments (including in-substance fixed payments), less any lease incentives receivable; 2. Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; 3. Amounts expected to be payable by the lessee under residual value guarantees; 4. The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and At inception of a contract, an entity shall assess whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. 5. Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. Determining whether an arrangement is, or contains, a lease FrieslandCampina WAMCO Nigeria PLC FrieslandCampina WAMCO Nigeria PLC 61

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