Investor Presentaiton
ANNUAL REPORT 2020
66
Notes to the Financial Statements
For the year ended 31 December 2020
i.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
statutorily enacted at the reporting date, and any adjustment to tax payable in respect of previous years. The
Company is subject to the following types of current income tax:
ii.
Company Income Tax - This relates to tax on revenue and profit generated by the Company during the
year, to be taxed under the Companies Income Tax Act Cap C21, LFN 2004 as amended to date.
Tertiary Education Tax - Tertiary education tax is based on the assessable income of the Company and is
governed by the Tertiary Education Trust Fund (Establishment) Act LFN 2011.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
Deferred tax is not recognized for the following temporary differences:
Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
Temporary differences related to investments in subsidiaries, associates and joint arrangements to the
extent that the Group is able to control the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future; and
9)
Dividends
Dividends are recognised as liability in the period they are declared.
Dividends which remained unclaimed for a period exceeding twelve (12) years from the date of declaration and
which are no longer actionable by shareholders in accordance with Section 385 of Companies and Allied Matters
Act of Nigeria are written back to retained earnings.
The Securities and Exchange Commission (SEC) published a circular directing Capital Market Registrars to return
all unclaimed dividend which has been in their custody for fifteen (15) months and above to the paying companies.
These unclaimed dividends are included as a liability to the shareholders.
r)
Statement of Cash Flows
The statement of cash flows is prepared using the indirect method. Changes in statement of financial position items
that have not resulted in cash flows such as translation differences and other non-cash items, have been eliminated
for the purpose of preparing the statement. Dividends paid to ordinary shareholders are included in financing
activities. Finance cost is also included in financing activities while finance income received is included in investing
activities.
s)
New Standards, Amendments and Interpretations Adopted by the Company
The Company has applied the following standards for the first time for the annual reporting period commencing 1
January 2020:
IFRS 16 - Leases (effective 1 January 2019)
IFRIC 23 - Uncertainty over income tax treatments (effective 1 January 2019)
IFRS 16 was issued in January 2016 but became effective on 1 January 2019. It will result in almost all leases
being recognised on the statement of financial position, as the distinction between operating and finance leases
is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay
rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will
not significantly change.
The Company has applied the modified retrospective approach and will not restate comparative amounts for the
year prior to first adoption. The standard for leases is mandatory for financial years commencing on or after 1
January 2019.
•
o)
Taxable temporary differences arising on the initial recognition of goodwill.
Earnings Per Share
t)
New Standards and Interpretations not yet Adopted
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is
determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number
of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.
p) Segment Reporting
An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Company's other components. All of the Company's products have similar risks and returns thus management does
not use operating segments' operating results to make decisions about resources to be allocated to the segment
and assess its performance.
A number of new standards and amendments to standards and interpretations are effective for annual periods
beginning after 1 January 2020, and have not been applied in preparing these financial statements. Management is
yet to assess the effect of the following standards on the financial statements of the Company.
Conceptual framework for financial reporting - Revised (effective date - 1 January 2020)
These amendments were issued in March 2018. Included in the revised conceptual framework are revised definitions
of an asset and a liability as well as new guidance on measurement and derecognition, presentation and disclosure.
The amendments focused on areas not yet covered and areas that had shortcomings.
There are no other IFRSS or IFRIC interpretations that are not yet effective that would be expected to have a
material impact on the Company.
FrieslandCampina WAMCO Nigeria PLC
FrieslandCampina WAMCO Nigeria PLC
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